Sink or Swim Time for U.S. Fishery Policy

Ocean Policy: Time to Act

JAMES N. SANCHIRICO

SUSAN S. HANNA

Sink or Swim Time for U.S. Fishery Policy

Immediate action is needed to turn the tide in favor of sustainability, but more fundamental changes are essential as well.

Marine species residing in U.S. territorial waters and the men and women who make their livelihood from them are at a critical juncture. Many species are overexploited and face additional threats from land-based pollution, habitat damage, and climate change. The U.S. government agency in charge of fishery management, the National Marine Fisheries Service (NMFS), reports that of the 259 major fish species, 43 have population levels below their biological targets and another 41 are being fished too hard. Still unknown is the extent to which our actions affect the nature of food webs and ecosystems, with consequences yet to be determined.

The vessels and fishing power of many U.S. fisheries exceed levels that would maximize economic returns to society. Competition for fish leads to low wages, dangerous working conditions, and shorter and shorter fishing seasons. Short seasons with large catches, in turn, force fish processors to invest in facilities that can handle large quantities but run at partial capacity for most of the year, creating boom-and-bust cycles in local employment. With supply gluts, most fish are processed and frozen, even though consumers might prefer fresh fish throughout the year.

Two recent commissions were set up to study U.S. fishery management and, more generally, ocean stewardship. In 2003, the Pew Oceans Commission released its review of the status of living marine resources, and in 2004 the U.S. Commission on Ocean Policy released its preliminary report assessing both living and nonliving marine resources and a full array of ocean and coastal uses. Not since 1969, when the Stratton Commission produced a report that recommended creation of the National Oceanic and Atmospheric Administration (NOAA) and laid the groundwork for the 1976 Fishery Conservation and Management Act (FCMA), has U.S. ocean policy been subjected to a systematic and broad-scale assessment.

The next year or so will be a defining time for U.S. fishery policy. As of August 2004, about 40 bills with one or more recommendations from the commissions had been introduced in Congress. Four bills are major pieces of legislation that would the way U.S. fishery management is practiced. The president is also required by law to respond within 90 days after receiving the U.S. Commission’s final report, which was due in September 2004.

We believe that when considering the recommendations of these reports, the question for policymakers is not only the direction of change for fishery management but also its sequence. Which changes will serve as building blocks for longer-term change? Getting the answer wrong could impede improvements in marine ecosystem health and the livelihoods of those directly dependent on them, especially if efforts directed at long-term institutional changes, such as a new Department of Oceans, distract attention from more immediate issues. Uncertainty about the nature of the changes and the responsibilities of various agencies and regulators could remove incentives for taking action now to improve the situation.

Basic first aid teaches one to stop the bleeding first. Indeed, we need to address the immediate problems of U.S. fisheries by setting hard limits on catches, allocating the catch to individuals, separating the decisions regarding catch limits and allocation, and allocating shares of the resource to the public at large. The two commissions also recommended these changes. None of our solutions, however, require major legislation or institutional reorganization, but rather could and should be done with a presidential executive order.

Once those acute issues have been addressed, efforts to make longer-term, fundamental changes are more likely to succeed. Two of the more important proposed changes are reorienting fishery policy toward ecosystems and reorganizing the institutional structure of ocean policy. Discussion about these necessary reforms should begin now, but implementation should proceed slowly.

Addressing immediate problems

U.S. fishery management is conducted at a regionallevel by eight regional fishery management councils with oversight by NMFS and the secretary of Commerce. Council voting membership comprises state fishery managers, a regional representative of NMFS, tribal representation (only for the Pacific region), and individuals (mostly representatives of different sectors of the commercial fishing industry and sportfishing groups, including charter and recreational interests) nominated by the governors and selected by the secretary of commerce.

The councils develop fishery management plans pursuant to national guidelines in the FCMA (now called the Magnuson-Stevens FCMA) and other laws. These plans include decisions on total allowable catch, allocation of the catch among different types of fishers, and controls on fishing effort, such as gear restrictions and area and season closures. The decisions regarding allowable catch of a particular species are based on recommendations from scientific advisory panels, factoring in socioeconomic and ecosystem effects.

Our immediate concerns center on incentives, the determination of allowable catch, and the allocation of this catch among the various stakeholders, including the commercial fishing industry, recreational fishers, and the public.

Ending the race for fish and aligning incentives. In the years since FCMA took effect, most U.S. fisheries have been managed under command-and-control regulations that govern the total size of the catch, minimum fish size, type of gear, season length, and areas open to fishing. When the allowable catch is subject to competition, fishers have no ownership over the fish until they are caught. This creates a race for fish.

The historical record shows that without effective controls, the race will continue until fish stocks are depleted and fishing and processing capacity are in excess of profitable or sustainable levels. Declining assurances about the future create incentives to catch as much as one can now. Conflicts among competing interests for limited resources also increase. Both factors lead to greater sociopolitical pressures to increase allowable catches in the short run. More now and more for everyone is an easy solution. In other words, we are currently managing our fisheries such that the incentives for fishers (and sometimes for regulators) are at odds with long-term sustainability.

What can policymakers do to end the race for fish and better align the incentives of those utilizing the resource with sustainability? As a first step, we recommend that fishery management plans explicitly address incentives, especially fisheries with too many boats and fishing power. Plans should consider approaches that pair responsibilities with rights through contracting and develop mechanisms to strengthen accountability among fishery participants. Plans also need to consider the application of incentive-based tools, to create the expectation that such a policy would be in place by a specified date. A presidential executive order could make incentive-based tools the default approach, so that a council would have to justify why a plan did not include such tools.

One promising approach to ending the race for fish and aligning incentives with long-term stability is the allocation of harvest rights, as in an individual fishing quota (IFQ) system. IFQs limit fishing operations by allocating the total allowable catch to participants based on historical catch and fishing effort. By guaranteeing fishers a share of the catch, this approach significantly reduces incentives to engage in a race for fish. Both the Pew and the U.S. Commission reports recommend such programsbut would change the word from fishing or harvest “rights” to terms conveying the idea that fishing is a privilege of access granted by the government.

Currently, there are approximately 75 IFQ programs in the world, including four in the United States. Almost all have allocated quota in perpetuity and gratis, based mainly on past catch history. The Pew Commission proposes that quotas be periodically reallocated using a combination of catch history, bids in the form of offered royalty payments on catch, and conservation commitments by the bidder. Periodic allocations can work if the period is long enough to provide security and stability to the fishing operation. Requiring individuals to pay for the privilege rather than getting their shares for free should also be considered. Some programs assess fees and use the funds to cover the costs of management, such as data collection, scientific research, and onboard observer and other enforcement programs.

One promising approach to ending the race for fish and aligning incentives toward long-term stability is the allocation of harvest rights, as in a quota system.

One major benefit of IFQ programs is the relaxing of controls on season length, which give fishers the ability to shift from maximizing quantity to maximizing the return on their allocations. For example, since the introduction in 1994 of an IFQ system in the Alaska halibut fishery, the season length has grown from two 24-hour openings to more than 200 days. One study found that the ability to time fishing trips when port prices for halibut were higher, combined with the elimination of gluts of fresh product, increased the price per pound by more than 40 percent.

Other benefits are potential reductions in capacity and costs. For example, when transferability of the shares is permitted in an IFQ system, the least efficient vessels find it more profitable to sell their quota rather than fish. Over time, this should reduce excess capacity and increase the efficiency of vessels operating in the fishery. Because of these gains, we believe that the potential for trading harvest rights needs to be considered for each fishery.

Many have argued that transferability increases consolidation in the industry. This has happened in practice, but consolidation is desirable, because overcapacity is a legacy of the race for fish. A smaller, more profitable industry seems like a better solution than severe restrictions on fishing, such as those in the New England groundfish and west coast rockfish fisheries. Regardless, economic transitional effects of market-based approaches to reducing capacity can be lessened with complementary tools, such as vessel-buyback programs in which government pays the fisher to retire their boat.

Concerns about the distributional composition of the industry, such as loss of family-owned operations, could be addressed in the design of the programs. The Pew Commission, for example, argues that quotas should be allocated across different groups (new entrants, and small, medium, and large vessels) and that trades across groups should not be allowed. Restrictions on trading, however, reduce the potential for efficiency gains. Besides, it is not clear that the public supports the goal of preserving family-owned fishing operations or that such a social engineering policy is best implemented through restrictions on trading.

Past experience with IFQs offers lessons for designing new programs. First, flexibility mechanisms, such as the ability to lease one’s quota and divide it into any amount, must be built into the system so that fishers can match catches with holdings. Second, allocating rights to catches that are measured at the time of landing requires strong monitoring and enforcement to deter fishers from discarding fish at sea. And finally, the quota allocation process is difficult and costly but can be successful if it is transparent and includes means for resolving conflicts.

Another rights-based approach that can end the race for fish and correct incentives is a fishing cooperative, in which fishers are granted legal authority to collude to determine the allocation among them. Sen. Ted Stevens (R-AK) helped institute such a system for the Alaska pollock fishery, one of the largest fisheries by volume in the world. Implemented in 1998, the pollock cooperative is generally viewed as a success.

Finally, an executive order should provide funds to investigate methods of allocating rights to recreational fishing interests. Although each recreational fisher has a small impact on a fishery, aggregate catch totals can be significant. According to NMFS, nearly 17 million recreational marine anglers make about 60 million fishing trips to the Atlantic, Gulf, and Pacific coasts per year. The best means of allocation to ensure that recreational catches remain within limits will most likely vary with each fishery.

Setting catch limits. Management decisions regarding the appropriate annual catch level are fraught with uncertainties regarding the level of fish populations, species’ growth processes, and the effects of environmental factors, such as climate variability and ocean conditions. Stock assessment reports incorporate these factors along with data from fishery catches and research expeditions. In many of the smaller, less-valuable fisheries, however, very little information exists other than catch totals. Based on single-species stock assessments and socioeconomic considerations, councils set annual allowable catches with the goal of meeting a target fish population level. Councils are required to manage for a level of fish stock biomass that can produce the maximum yield over time.

Some of the councils decide not to implement an explicit cap on catches for a particular fishery, but rather attempt to use controls on fishing effort as an indirect means of controlling the annual take. The New England council, for example, prefers to limit a vessel’s days at sea to achieve a target biological catch for groundfish. New England fishers prefer this approach because they are free to catch as much as they can within their time limits. As one fisherman stated, “No one tells a farmer how much crop he can grow.” These indirect approaches are very inefficient means of achieving target population levels.

What can policymakers do to strengthen harvest controls? We recommend that hard caps or total allowable catches be set for all harvested stocks for which biomass size can be estimated and that these caps factor in incidental catches of marine mammals and ecosystem effects. Once the total catches are set to address ecosystem effects, which themselves are often uncertain, explicit precautionary buffers for single species might still be needed.

Rather than capping all stocks, the Pew Commission recommends that fisheries with indirect means to control harvest should be evaluated every three years to ensure that they are meeting the conservation goals of the regional plans. Both commissions suggest that precautionary buffers to address the uncertainties be built into the process. The effectiveness of aggregate catch limits in maintaining the conservation objectives of a fishery management plan is tied, however, to the degree to which incentives are addressed. That is, a cap with no individual allocation will just result in a race for fish.

Separating allocation and conservation decisions. Many scientists argue that precautionary measures proposed to accommodate uncertainty in setting aggregate catches often succumb to short-run economic considerations in council decisions. Because the councils include representatives of industry and state agencies whose constituents have a financial stake in the outcome, many have raised concerns that the council process is akin to the fox guarding the hen house. The U.S. Commission, for example, concludes that council membership is often unbalanced among interests and that the long-term interests of the public are not best served. Of course, it is difficult to quantify the results, but even removing the perception of a conflict of interest seems worthwhile.

To that end, both commissions recommend taking actions to insulate harvest decisions (how many fish can be taken) from allocation decisions (who harvests what, when, and where). The goal is to prevent short-term economic, social, or political considerations from overwhelming scientific considerations regarding recovery and sustainability of stocks. A bill to reform the councils, recently introduced in the House by Rep. Nick Rahall (D-W.Va.), contains provisions addressing conflicts of interest and broadening membership to include nonfishing interests.

The U.S. Commission believes that reform can be accomplished within the current institutional structure by introducing a much stronger role for independent scientific advisers in setting allowable harvest levels. The Pew Commission, on the other hand, proposes a set of regional ecosystem councils that would oversee NMFS conservation decisions, which would then be required to undergo scientific peer review.

In the Pew model, the role of the regional fishery management councils would be limited to allocation, with fishing industry participants charged with developing allocation plans for fisheries under strict operational guidelines and oversight. The call for oversight recognizes that just separating these decisions is not enough. The biological health of the system depends not just on the total catch but also on the type of gear and where it is used. The Pew report, for example, recommends limiting bottom trawling, which it likens to clearcutting forests because of its effects on the sea floor, to regions currently trawled and eventually instituting a total ban on the practice.

We, too, recommend that conservation and allocation decisions be separated. Like the U.S. Commission, we believe that actions should be taken to distance these two decisions within existing regulatory requirements. We also agree on the need to strengthen the oversight of the council appointment process and the training of new council members. These steps should be done in anticipation of new statutory requirements that will be developed at a later date.

We also recommend that monitoring and evaluation of fisheries management be significantly strengthened and include regular assessments of biological, economic, and social performance. Current approaches are limited and do not necessarily review progress toward meeting integrated fishery management objectives.

Over the long term, the ability to sustain marine fisheries will require a more systematic adoption of ecosystem approaches.

Allocating resources to the public. Federal and state laws regulating the use of marine resources are implemented by government agencies subject to the public trust doctrine: Managers are the exclusive public trustees and stewards of marine resources, which belong to every citizen. The objective of fishery management has for the most part focused on maximizing the returns from catching fish. Nonconsumptive use values, such as marine biodiversity, that the public might consider important have not been factored in. One way to incorporate marine biodiversity value into fishery management would be to allocate some of the resource to the public at large, either by setting aside areas or portions of the catch each year. Given that the resources belong to every citizen, allocation is used here in a symbolic rather than literal sense.

Compared with land, few of our waters are protected from exploitation. There is now a movement to change that and create marine reserves, areas closed to all extractive uses. A highly visible part of the Pew Commission report recommends legislation that would mandate the creation of a network of marine reserves throughout the seascape. The U.S. Commission sees marine protected areas as most effective when they are designed in the broader context of regional ecosystem planning and used in conjunction with other management tools.

We recommend developing methods for incorporating broader values, such as marine biodiversity conservation, into fishery management. This would include allocating areas of the ocean for marine biodiversity conservation that are limited in their uses. One such method is to establish a robust stakeholder process in which fishery managers engage fishers, environmentalists, and other concerned citizens in decisions about where to site marine reserves that will have the greatest benefit at the lowest cost to fishers. But for fishers and others to participate effectively, the decisionmaking process needs to be decentralized and information exchanged at the regional or local level. It may also strengthen accountability for implementation and increase the likelihood that everyone will benefit.

Allocations to the public should be made simultaneously with the allocation of the catch to the individual fishers. Combining the two processes would lessen any economic transition effects due to closing areas to fishing and might increase the probability of buy-in from the fishing industry.

Addressing longer-term problems

Many marine scientists place the blame for current problems on the single-species approach to fishery management and the tendency to favor higher catch totals for sociopolitical purposes. Over the long term, the ability to sustain marine fisheries will require a more systematic adoption of ecosystem approaches. Before this can occur, however, a flexible and adaptive management system needs to be in place, which in turn requires greater integration of management through structural reforms.

Adopting ecosystem approaches. Like the two commission reports, legislation proposed in the 107th and 108th Congress has emphasized the need to design ecosystem-based management plans. Although many definitions exist of what constitutes ecosystem management, the concept is that fishery management decisions should not adversely affect ecosystem function and productivity.

From an operational standpoint, however, many hard questions remain, such as what an actual ecosystem management plan entails. In addition, ecosystem-based management involves difficult trade-offs, and there is not likely to be one “right” plan. For example, California sea otters have an appetite for abalone, whose low population levels have led to restrictions on commercial fishing. One way to increase abalone stocks would be to cull sea otters, whose populations are rebounding after the otters were listed in 1977 as threatened under the Endangered Species Act. But a save-the-sea-otter group might weigh things differently and come up with another plan. Which plan should managers follow? Which objectives take priority?

Much work needs to be done to develop practical guidelines for implementing ecosystem-based management. These include measuring to the extent possible ecosystem processes and functions, implementing precautionary buffers, assessing trade-offs, and incorporating economic values. In addition, methods should be developed to allow trade-offs and different interpretations to be resolved in an open and fair democratic process rather than mandating and constraining the political process or leaving the courts to decide.

Accordingly, we recommend that NOAA, in consultation with other agencies, the councils, and a scientific advisory committee, develop operational guidelines for implementing ecosystem-based management. The U.S. Commission suggests incorporating ecosystem approaches within essential fish habitat designations and bycatch management. (Bycatch is the incidental taking of nontarget fish, marine birds, or marine mammals.) It recommends, for example, that essential fish habitat designations be changed from single species to multispecies and eventually to an ecosystem-based approach. It also suggests that plans address the broad ecosystem effects of bycatch, not only of commercially important species but also of all species.

We agree that an effective ocean policy must be grounded in an understanding of ecosystems. Ocean and coastal resources should be managed to reflect the relationship among all ecosystem components and the environments in which marine species live. Although many questions remain, it is clear that ecosystem management needs to cross existing jurisdictional boundaries and, ideally, promote learning, adaptation, and innovation. We should also encourage stronger user-group participation in cooperative management and experimental approaches to management.

Both commissions take an ecocentric view, and we agree that this broader view is necessary to improve both the ecological and the economic health of our fisheries. However, we would not stop there. Because just as there are benefits from taking an ecosystem approach, there are potential economies of scope in incorporating seafood markets, fishing community economies, aquaculture, and other marine sectors in fishery management plans.

Reorganizing institutions. Fishery exploitation, degraded habitats, ecosystem damage, and losses to fishing communities are the visible symptoms of the problems of fishery management performance. Many have argued that over the long term, the resolutions of these problems and the change to ecosystem approaches are possible only through fundamental structural reform in laws and organizations. We agree that there is a need for streamlining the process, consolidating marine governance under one roof, and clarifying the goals of fishery management. A coherent ocean policy will remain elusive as long as approximately 140 laws and a dozen agencies and departments have jurisdiction over various aspects of marine ecosystems.

How should policymakers undertake such reform? The Pew Commission finds the system itself fundamentally broken; the U.S. Commission concludes that with better coordination and reorganization, the problems can be addressed. Of course, there is no guarantee that either approach will succeed.

To implement an ecosystem approach, the U.S. Commission recommends the establishment of a national ocean policy framework that includes national coordination and leadership, a regional approach, coordinated offshore management, and a strengthened and streamlined federal agency structure. This framework would establish within the Executive Office of the President a National Ocean Council and a Presidential Council of Advisers on Ocean Policy to coordinate and harmonize ocean policy at the highest levels of government. These efforts could focus high-level attention on ocean and coastal issues and provide leadership in developing ocean policy, coordinating ocean and coastal programs, and helping federal agencies move toward ecosystem management. The U.S. Commission also recommends the formation of additional committees and offices, plus processes to improve intersectoral and interregional coordination.

To improve coordination across jurisdictional boundaries, the U.S. Commission recommends the voluntary formation of regional ocean councils through processes developed by the National Ocean Council. The purpose of the new regional ocean councils would be to coordinate state, territorial, tribal, and local governments in developing regional responses to issues. To support these councils, coordinated regional ocean information programs and regional ecosystem assessments would need to be undertaken.

Begin with actions that can be accomplished quickly through a presidential order and that do not require major legislation or institutional reorganization.

The Pew Commission argues for a National Oceans Policy Act. This legislation would create an Oceans Agency that would subsume NOAA and all of its subcomponents, the marine mammal programs of the U.S. Fish and Wildlife Service, the ocean minerals program of the Department of Interior, the coastal and marine programs of the Environmental Protection Agency, the aquaculture programs of the U.S. Department of Agriculture, and the coastal protection programs of the U.S. Army Corps of Engineers.Along with the new Oceans Agency, this act would establish a permanent national oceans council within the Executive Office of the President.

Such a National Oceans Policy Act would also create regional ecosystem councils, charged with developing and implementing ecosystem and zonal plans that encompass all the potential uses of the marine environment: oil and gas exploration, offshore wind farms, aquaculture, and commercial and recreational fishing. The plans would be approved by the Oceans Agency. To prevent overrepresentation of industry and recreational fishing interests in fishery management, the Pew Commission recommends that the ecosystem councils be democratic and representative of the “broadest possible range of stakeholders.” The act would also change the traditional focus of management plans from harvested species to ecosystem function and productivity.

To both commission reports, we would add that more attention should be paid to the long-term need to develop the human capital of fisheries management. We need to prepare for the future of fishery management by developing programs that train tomorrow’s decisionmakers and educate future fishery scientists.

The existence of the two commissions is a signal that the United States is on the cusp of significant change in managing marine resources. The fundamental agreement between the two commissions is that we can do better in our management of the oceans. Marine resources do not need to be threatened, and fishing businesses and the communities they support do not need to go the way of old-growth logging towns. Future generations can enjoy the bounty of the oceans much as we do today. Reversing the current trends, however, will not be easy. There will be many conflicts along the way.

Recommended reading

S. Hanna, “Strengthening Governance of Ocean Fishery Resources,” Ecological Economics 31 (1999): 275-286.

S. Hanna, H. Blough, R. Allen, S. Iudicello, G. Matlock and B. McCay, Fishing Grounds: Defining a New Era for American Fishery Management. Washington, D.C.: Island Press, 2000.

S. Iudicello, M. Weber, and R. Wieland, Fish, Markets

and Fishermen: The Economics of Overfishing. Washington, D.C.: Island Press, 1999.

J. N. Sanchirico and R. Newell, “Catching Market Efficiencies: Quota-based Fishery Management,” Resources, No. 150, Spring 2003 (available at http://www.rff.org/rff/Publications/Resource_Articles.cfm).

J. N. Sanchirico, “Marine Protected Areas: Can They Revitalize Our Nation’s Fisheries?,” Resources, No. 140, Summer 2000 (available at http://www.rff.org/rff/Publications/Resource_Articles.cfm).


James N. Sanchirico () is a fellow at Resources for the Future in Washington, D.C. Susan S. Hanna (susan. ) is professor of marine economics and a member of the Sea Grant Extension Program at Oregon State University and a member of the Science Advisory Panel of the U.S. Commission on Ocean Policy.