Money on the Table - The Profit Potential in Effective Fishery Management

1. Money on the Table -The Profit Potential in Effective Fishery Management

2. My Topics • Simplified Fishery Management • Lobster Management Programs in Other Places • The Rhode Island Experience • My Take on the California Lobster Fishery • The Future of Fishery Management and How to Profit from Sustainability

3. The 3 Basic Fishery Controls • Recruitment • requires adequate spawning stock, • then determined primarily by nature. • The minimum legal size • Creates a floor, doesn’t help the stock above MLS • Contributes to yield per recruit • The fishing mortality rate • fraction of the fishable stock taken each year, • determined by fishing effort, • Determines average size of animals. Less fishing means higher catches!

4. Fishing Mortality Controls – Leaving Lobsters in the Water • Direct - Annual Total Allowable Catch • Indirect – Fishing Effort Control • Even less direct – • Closed season • Prohibition on egg-bearing lobsters • Closed areas (effect depends on migration)

5. American Lobster Management Areas

6. Traditional U.S. Atlantic Approach • No TAC • No effort control • Counter excess catch with discard requirements • Minimum size • Egg-bearing females • V-notched females • Maximum legal size • Throw back 86 of every 100 lobsters caught

7. Current U.S. Atlantic Approach • No TAC, but tightening Reference Points • 6 of 7 Lobster Management Areas have Individual Trap Allocations, meant to be transferable. • A trap is not a unit of fishing effort. • More regulations sure to follow as each allocated trap turns into more fishing effort.

8. Canadian Atlantic Inshore Approach • No TAC • Limit licenses, uniform trap limit (300) • Short legal season • Still overfishing • Chronic controversy • (Unimaginable trap limits by New England standards)

9. New Zealand, most of Australia • Individual transferable quotas • Australian states had transferable traps

10. South Australia provides good lesson • Southern Zone prospered after switch from Transferable Traps to ITQs • Northern Zone kept ITTs and collapsed

11. Comparisons with Other Lobster Fisheries Source for Western Australian data: http://www.dpiwe.tas.gov.au/inter.nsf/WebPages/EGIL-5J375D?open#Industryvalue and http://www.dpiwe.tas.gov.au/inter.nsf/Attachments/ALIR-4Z95VB/$FILE/Rocklobsterpolicydocument.pdf Source for Victoria: http://www.siv.com.au/lobster.htm Source for LFA 33: Department of Fisheries and Oceans, Canada

12. RI Lobster Fishery Experience • Fished down in late 1800s • Constant scientific warnings • Reliance on newly recruiting lobsters • Steadily increasing traps (300-1600 from 1970-1997) • Increasingly variable catches • Heavy fishing pressure increases variability • No standing stock of adult lobsters to take up the slack when environmental conditions produce poor year class • Phenomenal fishing in late 1990s, then collapse • Regulatory response increases discard rate to 86% • High costs – low revenue

13. RI Lobster Fishery Experience • 1,000+ commercial lobster licenses issued each year 1990-2003 – meaningless • 2003 – 278 reported more than 1 pound • 2007 – Approx 200 rec’d Individual trap allocation • Based on average number of traps used to catch an individual’s annual landings

14. Southern New England Trap Allocation Formula Allocation was lower of predicted or reported.

16. California Lobster Fishery • 200 licenses – 151 transferable • 300 traps per license average? • 750-1,000 traps max • Will each license go to the max as transfers take place? • Will big operators try to stay ahead of the pack?

17. California Lobster Resource • Most legal lobsters caught in first year? • With no limit on traps, will more traps take more lobsters in first year? • Take 20% of legal animals each year? • More and larger lobsters in standing stock.

18. The Intersection of Biology and Economics Growth Overfishing Starts Here Max Profit Economic Overfishing Starts Here X Price = Revenue in $ Cost of Effort Loss 10 ? 9 Recruitment Overfishing Starts Here 8 Economic Rent or True Profit = Revenue minus Costs Or $ 7 6 5 4 Overcapitalization 3 2 Total Industry Costs - Includes a Normal Profit 1 FMEY OAE Yield in LBS Lbs. FMSY Fishing Mortality Rate - F or Effective Fishing Effort (Boats, Traps, Days, Etc.) MEY - Maximum Economic Yield MSY - Maximum Sustainable Yield OAE - Open Access Equilibrium Economic Rent – The difference between revenue and cost

19. Marine Stewardship Council Requirements • The dependence of productivity on abundance has been estimated and used to estimate potential Target Reference Points and associated uncertainties. • A Limit Reference Point (LRP) has been established and its level is computed at appropriate time intervals to determine whether the stock is depleted. • The management system incorporates and applies an adaptive and precautionary exploited stock strategy • The management system applies information through implementation of measures and strategies (by rule or by voluntary action of fishery) that demonstrably control the degree of exploitation of the resource in the light of the natural variation in ecosystems. • There is a process in place for rapid development of a recovery plan for target populations should significant depletion occur. Significant depletion can be defined as dropping below the LRP.

20. Investing in Conservation • Reduce fishing effort – save costs • Leave legal animals to grow and reproduce – larger biomass • Harvest greater yield at lower cost – fishermen make money on high CPUE • Reduce variability • Profit from sustainability

21. Get a Piece of the Stock • Competition for a natural resource is a zero-sum game – produces the same or less fish at higher cost. • Allocation allows least cost harvest. • Creates an incentive to build wealth in fish stock, rather than maximize cash flow. • Individual trap allocations are better than nothing, but far from ideal.

22. Can a Lobster Fishery Achieve Its Profit Potential without Quota Shares or an Effective Trap Limit?

23. Thanks! For more information visit www.LobsterConservation.com