Situation

November 2008: Processor Stake in Individual Quota Management System to be Finalized

Coalition Support Critical to Success

In June, the Pacific Fishery Management Council voted on a preferred alternative for an Individual Quota Management system. In that vote, processors were granted 20 percent of initial allocation for shore-side whiting and shore-side non-whiting (groundfish); the balance was earmarked for harvesters. The Council's decision, which will have a far-reaching impact on preserving the economic viability of coastal communities and jobs, is not yet final.

Key issues surrounding the Individual Quota Management system remain unresolved and must be addressed before the system is finalized at the Council's November meeting. West Coast processors are committed to continuing their work with the Council to develop a system that will be beneficial to all of the industry's stakeholders-processors, harvesters and coastal communities. The Coastal Jobs Coalition was instrumental in the Council's recent decision, and its persistent support will be imperative in keeping a balanced allocation at the forefront of discussions in the coming months.

Affected Fisheries

Pacific Whiting Fishery
Pacific whiting is the largest fishery by volume on the West Coast, representing more than 3,000 jobs and in excess of $89 million in annual revenues. A versatile protein source, Pacific whiting is a groundfish that has the opportunity to be caught and processed year round, but is currently caught for just a short period of time. Major ports extend from Westport, Wash., to Eureka, Calif.

The fishery is regulated by the federal government as an Olympic or derby-style fishery: the government establishes a quota for the fishery as a whole and permitted vessels fish until the overall quota is reached. Vessels do not have individual limits, so vessel owners/fishermen race to catch as much of the regulated supply as early as possible to maximize their profits

Groundfish Fishery
The West Coast trawl groundfish fishery includes flatfish, sablefish and rockfish. These species are fished year round as far north as Blaine/Bellingham, Wash., and as far south as Avila Beach, Calif., with the industry accounting for more than 2,000 jobs. The fishery is regulated by the federal government as a limited entry fishery, managed through bi-monthly trip limits.

In earlier attempts to maintain fish stock and economic security for fishermen, the federal government reduced the groundfish trawler fleet by one-third by buying back trawl groundfish permits and vessels from their owners. The impact of a reduced fleet has devastated some coastal communities where processors have scaled back or closed due to limited or no product.

The Current Problem: A Monopoly and a Race for Fish

In the West Coast seafood industry, there are approximately 176 commercial groundfish limited entry permits; permit owners are allowed to commercially catch either whiting or groundfish. The permits enable vessel owners/fishermen to have a monopoly of a public resource. The results:

• Currently, permit holders sell their catch to whomever they choose at a negotiated price that is subject to market forces
• Processors must also negotiate to purchase and process safe food product product at costs subject to market forces
• Consumers, from individuals, to grocery stores, to restaurants, have choices in the seafood market that are influenced by price, quality, availability and sustainability of products. Currently:
• Too much product jams processing plants, inhibiting optimal protein recovery and creating more waste. Today 68% of the catch goes into non-value added products.
• Too much product at one time creates a feast or famine cycle for vessel owners/fishermen, processors, and the communities in which they operate.
• Conservation efforts take a backseat to speed, as the race to capture fish often results in greater by-catch (non-targeted or prohibited species).
• Coastal Jobs are at risk:
• In the groundfish industry, 4.3 people are employed by processors for each person employed as a vessel owner/fisherman
• In the Pacific whiting fishery, 12.5 people are employed by processors for each vessel owner/fisherman

Results of Quota Monopoly

Quota Options