gulf trollers association
QUOTA DISCUSSION PAPER
CRITICAL ISSUES EFFECTING VIABILITY,
- NATIVE TREATY SETTLEMENTS
- S.A.R.A. (SPECIES AT RISK ACT)
- PRICE and QUALITY
- COST RECOVERY
How we deal with these issues will determine the survival of the
commercial salmon industry. DFO’s priority is not our survival,
in fact the commercial fleet is at the bottom of the priority list,
with conservation, treaty settlements, section 35 fish, and sports
priority to springs and coho before us. Our local officials are
trying but they have constitutional requirements that must be met.
Very soon a law will be enacted that compels DFO to adhere to their
mandate of conservation. This law once enacted will require increasingly
strict risk averse measures. This paper attempts to bring forth
some solutions to the above concerns and asks is there another way
and if so what is it?
Prior to the development of any organizational concept it is necessary
to have a clear idea of the aims and goals to be achieved. This
discussion paper will begin with an outline of some desired results
and make proposals designed to achieve these results. It should
be reviewed in that context, are the desired results correctly stated
and complete and if so will the suggested mechanisms achieve these
The introduction of ITQ’s has different meanings for fishery
managers and for fishers. This discussion will consider but not
analyze the value to managers, but will focus on the impact to fishers.
During the past few years there has been extensive debate over the
value of ITQ’s to the salmon fleet. The essence of this debate
has been the conflict between two fundamentally opposed views. Historically,
fishing has been an activity in which skill, hard work, guts and
efficient equipment has allowed some fishers to catch more fish
and earn greater incomes than others. Each year and each trip was
a gamble with the potential for a wide range of financial rewards.
An ITQ system of management alters the traditional fishery fundamentally.
Under this system the fisher knows how many fish he may catch before
fishing begins. The gamble, which is a significant factor in the
appeal of the life style, is to a large extent removed.
The fact remains however, that even
if the stocks returned to traditional levels, outside forces (SARA,
Treaty settlements, Sports allocation) will have a dramatic impact
on the commercial sectors ability to pursue their allocation. While
quotas may not be a panacea, they can offer greater flexibility
in harvesting and marketing, coupled with reduced risk in the area
of over harvesting, quotas may provide a better management tool.
There needs to be financial compensation for the inevitable reallocation
that will follow treaty settlements and growth of the sports sector.
Based on a fixed percentage share of the annual catch, there needs
to be an accountable mechanism to transfer allocation from one sector
to another. Quotas offer a good mechanism of exchange when allocation
is transferred from one sector to another.
This paper proposes an Individual Transferable Quota (ITQ) system
for the troll fleet. Some desirable results of the system are;
- Creates an accountable means of moving allocation.
- Improved stable business environment.
- Accountable access to harvestable surpluses.
- Co-management with DFO.
- Increased stability of markets and prices.
- Flexibility in harvesting times, areas and methods.
- Encourages innovative marketing.
- Improved quality control.
It is evident that some important issues which impact the fishery
and must be negotiated between fishery managers and fishermen are
independent of ITQ considerations and should be ignored when considering
the ITQ system. These issues are:
- Total Allowable Catch (TAC)
- Environmental Issues
- Treaty commitments
- Observer coverage
Issues which must be discussed and resolved are:
- Setting of each individual’s quota.
It is proposed that quota can be allocated as pounds and/or pieces
depending on species and ease of management. Quota transferability
is seen as critical to the success of an ITQ program. It is proposed
that quota be transferable in units of pounds or numbers of fish
between licensed vessels of that gear type. Transferability between
gear types should not be allowed, but special circumstances may
arise where your allocation may be caught by an alternate means.
Special circumstances will be decided at the CSAB Troll caucus level.
ADDRESSING THE AIMS AND GOALS
Creating an Accountable Means of Moving Allocation
Only when all available catch is accounted for, (commercial, sports,
native) with each sector having their own known and enforceable
portion of the overall TAC, is it possible to protect the stocks
and effect transfers between sectors in a fair and equitable manner.
As the fishery is fully subscribed the only place the native and
sports fishermen can obtain allocation is from the commercial sector.
It is essential that each commercial vessel have a known percentage
of the commercial TAC thus when a commercial vessel license is retired
the proper allocation is also retired. The past practices of reallocation
have been neither fair nor equitable and if they continue in the
present manner over 100% of the commercial TAC will be reallocated
long before 100% of the commercial licenses are bought out. In this
case all parties will be disenfranchised, native, sports, those
remaining in the commercial industry and the people who chose to
sell out. An IQ establishes quantifiable percentages of the TAC,
and this will ensure fair transfer of allocation and protection
of the stocks.
Stable business environment
The quota system reduces the number of variables within the fishing
business. Weather and breakdowns are less of an influence as is
competitive fishing pressure. Having a known preseason allocation
will help in the planning of an individuals fishing season: i.e.
crew size, opening times, pre-selling.
Accountable access to fish
The quota system will force accountability into the system. When
individual fishers are allocated a percentage of the TAC, these
same individuals have a means not only to track their allocation
but a means to track others as well. Management also, will have
an effective accounting tool to track the TAC. A properly set up
quota system allows each sector the ability to maximize their allocation,
it also ensures that each sector stays within their allocation.
Slower paced fisheries are no longer in jeopardy of losing their
TAC to the higher volume fisheries. This has been shown to be true
in all other ITQ fisheries as there have been no significant overages
in the last 12 years.
Co-management with DFO
Quota systems in other fisheries have lead to more responsibilities
for the fisher but also more input into the planning of the fishery.
ITQ in the salmon fishery will strengthen the current co-management
structure between fishers and DFO, in turn this will strengthen
security of access to salmon. A good example of this is the 88%
commercial 12% sports allocation split recently negotiated in the
Stability of markets and prices
The advent of a quota fishery allows flexibility in the development
of fishing patterns, this will allow supply to more nearly meet
the needs of the market, consequently enhancing the value of the
Without the pressures we have to maximize daily catches before the
quota is caught, fishers will have the luxury of improved quality
control. The fear that others will catch ones share of the allocation
ISSUES THAT DO NOT AFFECT IMPLEMENTING AN IQ PROGRAM
Canada is committed to certain catch levels as a result of International
and Native treaties and these levels must be maintained. These commitments
will impact the TAC and may impact timing of allowable fisheries,
but they are not related to implementing an ITQ program.
Canada is committed to SARA legislation and as in treaties these
concerns must be addressed but are not related to implementing an
Total allowable catch
The TAC for each species and stock will be established by managers
using processes that are not related to the ITQ program although
they will be achieved with input from fishermen.
Fleet Observer Coverage
DFO is committed to observer coverage in salmon fisheries now. This
is not specific to either IQ or derby fisheries, but to the fleet
as a whole regardless of whether the fishery is an ITQ or derby.
ISSUES WHICH MUST BE DISCUSSED AND RESOLVED.
Setting the ITQ percentage.
There are a number of possible formulas that could be used to determine
the individual share of the TAC. Its attributes must include transparency,
fairness and workability. Experience in other IQ fisheries indicate
that some combination of equal shares per license plus an allowance
for either past performance or investment in the industry is considered
fair by a majority of fishers in these fisheries. An equal share
to each license holder has a significant degree of support in the
The problems that skew setting of an ITQ in the salmon industry
are many. For example history is nearly impossible to define, with,
fleet reduction, stacking, dockside sales, and area switching having
taken place over the last few years. Investment in the industry
is also hard to quantify, the size of a vessel may not be a factor
of salmon income alone and in the Gulf size is certainly no indication
of catching ability.
Regardless of the method chosen, a referendum of license holders
is the best possible way of deciding this issue.
Historically all citizens had a right to participate in the fishery.
As populations grew and technology advanced this right was restricted
to those who had invested time and money into the industry. Government
assumed the responsibility of controlling the licensing process
and developed and enforced regulations designed to restrict over
harvesting of stocks. The introduction of ITQ’s effectively
provides more certainty and fishing opportunity rights for fishers
and the responsibility for protecting that certainty shifts from
a solely government role to a joint fisherman/government responsibility.
Consequently, co-management between fishermen and managers becomes
essential with both groups working towards maximising opportunity.
The introduction of an ITQ fishery represents a fundamental shift
in the underlying philosophy of fishery management. As it stands
now managers only open fisheries if they feel there is enough room
and abundance for the whole fleet. The accountability of an IQ fishery
allows managers the ability to open fisheries on small surpluses.
Unfortunately government is not able to relinquish its management
responsibilities when it passes the cost of this management to fishers.
It is imperative that fishers establish an organization to control
and administer the funds provided by the fleet and DFO to co-manage
Activities that will be managed and overseen under the new system
include: administration of a validation program, quota transfer
tracking, enforcement, monitoring, research and data gathering activities.
If quota fisheries were to become a reality across the troll sector,
budgets will be measured in the hundreds of thousands of dollars
and cannot be done in an ad- hoc basis. There are two possible ways
to approach this problem. Industry could create a new organization,
or could contract this service to an established firm. Once fishing
organizations acquire the expertise to manage these activities it
is recommended they assume co-management responsibilities.
DFO has stated there will be increased cost recovery in the salmon
fishery. The GTA has done some cost analysis of the validation,
management and reporting required over the past two years of the
pilot program. There are a number of avenues to be explored in the
collection of fees.
- Flat rate.
- Percentage of poundage (species specific rates)
- Percentage of total dollar value.
- Small upfront license fee and pay remainder at time of delivery.
- Small upfront license fee with a fixed dollar value per lb and/or
piece paid at time of license pick up.
The individual IQ holders would cover validation cost. With an average
shore based offload time of 821 pieces per hour and confining the
offload sites to those covered by the halibut fleet, costs could
be kept to a minimum. Validation at sea is slightly more expensive
with an average 641 piece per hour offload time.
Transferability or the possibility of sale or lease of quota has
been the subject of extensive debate. Much has been made of “armchair
fishermen” and instant millionaires. The assumed risks and/or
fears with transferability are two-fold: first, “armchair
fishermen” leasing quota and it’s associated high lease
price and secondly, concentration of ownership into a few hands.
These risks are overstated in the troll fishery as there is an upper
limit to the amount of fish that one vessel can catch. However real
or perceived these concerns are, there are a number of ways to deal
with them. It depends on the initial set up of the IQ system. For
example, the first concern of armchair fishermen can be addressed
by setting the quota, (as is being proposed by the GTA) in-season
on the actual number of boats that are on the water participating
in the fishery; or you could institute a owner-operator clause.
The fear of corporate concentration can also be addressed by limiting
the total allowable allocation allowed on any one license to 1%
or lower of any areas TAC.
It is proposed in this discussion paper that permanent allocation
transfers between gear types not be allowed, but if special circumstances
arise where it is impossible to catch your allocation (thereby leaving
large parts of your area allocation uncaught) by traditional means
alternate solutions could be explored. An example of this would
be short windows of opportunities because of SARA or other management
constraints. Regardless of the outcome of the debate on transferability,
methods must be developed which allow individual fishermen maximum
flexibility to design their own operations.
For its success, an ITQ program depends on the fact that it ensures
catches can be controlled. Individuals have an agreed amount of
fish that they may harvest, with a combination of hail-ins, at sea
monitoring and 100% validation confidence amongst managers, conservationists,
natives, sports and other fishers that the TAC will not be exceeded
will be considerable. This has lead to increased fishing time and
flexibility in management in other ITQ fisheries herring, halibut,
and geoduck to name a few. It is envisioned that an ITQ fishery
in the troll industry will provide the same flexibility and opportunities.
In a quota fishery it is necessary to have some form of process
in place to record all landings and relate them to the available
Elements for a monitoring system would be:
- Hail out to start fishing. (to management entity)
- Daily catch reporting from sea. (to management and DFO)
- Daily tracking of available TAC. (through management with DFO
- Hail in prior to landing. (to management entity)
- 100% dockside or at sea validation. (report to DFO/ management)
- Landing reports submitted to DFO.
An area of concern centers around the perception of highgrading;
the releasing of one fish for the retention of another due to size
and/or condition of the fish. Although it is much touted as a deterrent
for the implementation of a quota system there are ways to address
these concerns. In sockeye for example, (although for the last two
years of the quota project and with extensive coverage no evidence
of highgrading has occurred) it would be possible to assess possible
high grading by comparing the rates of #2 sockeye delivered. You
would achieve this by using DFO sales slip data to calculate the
amount of #2’s delivered over the last few years and comparing
to the landings by quota vessels.
In the case of spring salmon you could use an entirely different
approach. DFO has the data that is used for the allocation process.
This breaks down the number of fish and the poundage caught in each
area by each gear type. It would be a matter of compiling the number
and poundage of each grade (small, medium, large) resulting in a
quota of each grade.
It may require that different species require different means to
set the individual quotas. Sockeye may be set on pieces; spring
salmon may be set on poundage. Whichever is used, pieces/poundage,
or a combination of the two, ease of management and accountability
would be main factors to take into account.
STEPS IN THE STRUCTURE OF AN IVQ PROGRAM
In conclusion, these are the challenges that would need to be overcome
if the fleet were forced, or decided on its own to embrace an IQ
- Establish quota shares (equal or combination)
- Establish transferability mechanism.
- Establish communication protocol
- Establish method of payment of program costs.
- Establish management organization.
- Establish enforcement and penalty guidelines.
- Establish level of observer coverage
Although it sounds complicated one just needs to look at the Trawl
quota fishery with its multitudes of species and areas to know it
can be accomplished.