NORTHEAST GROUNDFISH FISHERY
The Northeast Multispecies Sector Program was implemented in the Northeast groundfish fishery in 2010. This fishery occurs primarily off the New England coastal states and targets a diverse group of species, including Atlantic cod, haddock, pollock, yellowtail flounder, and more. Several species are managed as two or more separate stocks, based on geographic region. Vessels fish primarily with otter trawls, sink gillnets, bottom longline (tub trawls), jigs and handlines. Bottom trawling with otter trawls is the predominant fishing method employed, although many vessels participating in groundfish fisheries switch gears seasonally.
The Northeast Multispecies Sector Program revised a previously existing framework for sector management and established 17 new sectors and modified two existing sectors. Sectors are designed to be voluntary and self-selecting, and Northeast groundfish fishery participants who do not wish to seek sector membership have the right to continue fishing under the “common pool” system. During the first season of the program in 2010, more than half of the limited access groundfish permit holders – representing 98 percent of the groundfish harvested – chose to join sectors. The remaining fishermen fished the “common pool” quota; the pool closes when the quota is reached independent of who caught the fish. Prior to the start of each fishing year (May 1 – April 30) every groundfish fishery participant must either apply to join a sector or elect to fish in the common pool. Sectors differ in terms of membership size, vessel type, predominant gear type and geographic distribution. The membership of some sectors is fairly homogeneous; for example, the Northeast Coastal Communities Sector consists primarily of small, owner-operated day boat fishermen who use hook and line gear. However, other sectors may be more diverse.
Sectors operate by managing a combined allocation, which is the pooled allocations of all sector participants. The allocation a fisherman brings to a sector is determined by the proportion of the total landings for each allocated groundfish stock during the time period 1996-2006 as calculated by a Northeast multispecies permit’s landings history recorded in the National Marine Fisheries Service (NMFS) commercial dealer database. This allocation is termed the individual’s Potential Sector Contribution (PSC). For each stock, the total PSC held by a sector’s members is multiplied by the stock’s annual catch limit (ACL) to determine the sector’s Annual Catch Entitlement (ACE) in weight units. Each sector develops its own set of rules to distribute the sector’s allocation among its membership. In most sectors, fishermen are allowed to retain their PSCs for their own use. However, all catches of allocated groundfish stocks on sector fishing trips count toward that sector’s ACE. There presently is no cap on sector allocations. A sector may expel a member for violations of its contract. If the sector expels a member, the ACE associated with that member’s permit remains in the sector for the remainder of the fishing year, and the individual is unable to fish. Permit holders can change sectors but only at the end of the fishing year. If they leave a sector, their PSC goes with them and the resulting ACE is subtracted from the ACE of the sector they leave and added to the ACE of their new sector.
All approved sectors receive “universal” exemptions from trip limits for allocated groundfish stocks, the Georges Bank (GB) Seasonal Closure Area and the requirement to use northeast multispecies days-at-sea (DAS) to land allocated groundfish stocks. All sector vessels may use a 6-inch mesh codend on haddock separator trawls, rope trawls, and Ruhle trawls when fishing on GB. Sector vessels are also exempt from portions of the Gulf of Maine Rolling Closure Areas. In addition, each sector can request other regulatory exemptions through its operations plan and contract submitted to NMFS for approval on an annual or bi-annual basis. The exemptions are intended to provide additional flexibility and improve profitability for sector vessels. NMFS approved 23 additional exemptions for 2013.
Allocated Stocks in the Northeast Multispecies Sector Program
- Gulf of Maine cod
- Eastern Georges Bank cod
- Western Georges Bank cod
- White hake
- Witch flounder
- Cape Cod/Gulf of Maine yellowtail flounder
- Georges Bank yellowtail flounder
- Southern New England/Mid-Atlantic yellowtail flounder
- Eastern Georges Bank haddock
- Western Georges Bank haddock
- Gulf of Maine haddock
- Georges Bank winter flounder
- Gulf of Maine winter flounder
ACE is transferable between sectors via approved annual leases, while PSC is transferable within sectors using informal lease arrangements. There is no limit on the amount of ACE or PSC that can be transferred. Although ACE is held at the sector level, the buying and selling of ACE between sectors occurs almost universally at the individual vessel or vessel affiliation level. ACE transfers must be approved by NMFS, which reviews the proposed transfer and confirms that the selling sector is compliant with vessel trip reports. In addition, in order to protect their membership, sectors have added their own review requirements to ACE transfers, including right of first refusal clauses requiring members of a sector be given an opportunity to purchase the ACE at the asking price before the sector manager allows the inter-sector transfer to proceed. Many sectors require the member selling the ACE out of the sector to pay a fee to the sector to help cover administration expenses. PSC transfers do not require NMFS approval unless the transfer is permanent, in which case it cannot occur independent of a conventional Northeast multispecies permit and vessel transfer. Although transfers of permits (and associated PSC) occur between individuals, they may also be subject to sector review.
Once a sector’s ACE for a specific stock is reached, all vessels participating in that sector are prohibited from fishing in that specific stock area until such time that the sector obtains additional ACE from another sector. If a sector exceeds its ACE in any given year, its allocation in the subsequent year is reduced to account for the overage. A sector may acquire ACE of any stock from another sector up to two weeks into the following fishing year to quota balance if an ACE was exceeded. Conversely, a sector can carry up to 10 percent of its unused ACE allocation of each stock into the following fishing year, with the exception of GB yellowtail flounder. At the beginning of each fishing year, NMFS withholds 20 percent of a sector’s ACE for each stock for a period of up to 61 days (i.e., through June 30) to allow time to process any ACE transfers submitted by May and to determine whether the ACE allocated to any sector needs to be reduced or any overage penalties need to be applied to individual permits/vessels in the current fishing year to accommodate an ACE overage by that sector during the previous fishing year.
It is important to note that the Northeast Multispecies Sector Program is not considered an individual fishing quota (IFQ) program or other type of limited access privilege program (LAPP) as defined by the Magnuson-Stevens Fishery Conservation and Management Act (MSA), but it is a type of catch share program. NMFS determined that the Northeast Multispecies Sector Program is not an IFQ program because there is no individual vessel allocation made by NMFS; instead, NMFS distributes the annual allocation among the sectors. Additionally, there is no permanent allocation that could be fished or transferred; allocation of one or more groundfish species is granted to a sector based upon the collective catch history of participating vessels, and since membership in sectors can change regularly, the annual allocations to sectors can change as well. Because NMFS concluded that sectors are not LAPPs or IFQs, the LAPP and IFQ provisions of the MSA, including the requirements that an IFQ program be approved by a two-thirds majority of eligible permit holders and crew members and that a cost recovery fee program be implemented to cover the costs of management, data collection and analysis, and enforcement activities, do not apply to the Northeast Multispecies Sector Program.
Overview of Fishery History
The Northeast groundfish industry has been both culturally and economically important for more than 400 years. It is New England’s oldest industry and was for many years its most important one.
Initially, the commercial groundfish fishery focused primarily on cod. The salt cod industry supported a hook and line fishery that included hundreds of sailing vessels. From 1900 to 1930, the fleet transitioned to steam powered trawlers and increasingly targeted haddock for delivery to the fresh fillet market. The introduction of powered vessels, together with the adoption of otter trawls, allowed increased catches with reduced fishing effort. By the 1930s, with the transition to diesel-powered trawlers, the groundfish fleet had grown too efficient, and landings and discards far surpassed a sustainable level for the resource. Landings of haddock plummeted after peaking at over 100,000 mt in the late 1920s. Small mesh sizes were blamed for the excessive catches, but the first regulations on minimum mesh sizes were not implemented for another 20 years.
Groundfish landings decreased during World War II due to fleet requisitions for the war, but profitability increased as a result of protein demands for military personnel. During the post-war period the quantity and value of landings showed a steady decline due to competition from imports of foreign groundfish products and low abundance of some groundfish stocks. However, landings again increased in the 1960s with added effort by foreign distant water factory trawlers and the discovery of resources off Georges Bank. Haddock landings reached a record-high of over 154,000 mt in 1965 but declined rapidly thereafter. By 1974, indices of abundance for many groundfish species had dropped to the lowest levels ever recorded.
Following enactment of the Fishery Conservation and Management Act (the Act would later be known as the Magnuson-Stevens Fishery Conservation and Management Act (MSA)) in 1976 and exclusion of foreign fleets, federal government policies and programs encouraged U.S. fishermen to engage in the Northeast groundfish fishery, and the number of domestic vessels in the Northeast groundfish trawl fleet doubled between 1976 and 1984. Moreover, the harvesting capability of the fleet expanded as wooden side-trawlers were replaced by steel stern-trawlers equipped with more modern technology for locating, catching, and handling fish. With this rapid increase in fishing effort and advances in fishing technology came a spike in landings. However, many of the most productive stocks soon collapsed due to the failure of the management system to take steps necessary to rebuild the populations. In 1986, the New England Fishery Management Council (NEFMC) implemented the Northeast Multispecies Fishery Management Plan (FMP).
By the early 1990s, groundfish exploitation rates were at their highest, and stock biomass reached record lows. The drastic and persistent decline in the condition of many key stocks prompted the NEFMC to strengthen stock rebuilding efforts. Attempts to end overfishing and rebuild fish stocks resulted in a frequently changing and complicated management regime. Regulations employed a combination of gear restrictions, trip limits, days-at-sea restrictions, fishing area closures, and other rules. As combined measures failed to rein in overfishing, the number of days fishermen were allowed to fish dropped each succeeding year until they were a fraction of what they had been. By 2009, most fishermen had 40 or fewer days of fishing per year. While some stocks were overfished, others were severely underfished.
Congress attempted to support failing fishing communities through a variety of measures. In 1995, the U.S. Secretary of Commerce declared a fishery resource disaster in the Northeast groundfish fishery, prompting federal disaster relief assistance of $90 million. Sixty-five million dollars of this total were used to fund a variety of services, such as technical assistance and loan programs, retraining programs, a health insurance program and fishing family assistance centers. The remaining funds were used in vessel and permit buyback programs. In 1996, the National Marine Fisheries Service (NMFS) set up a pilot buyback of groundfish vessels; the program was expanded in 1998, and 79 boats were removed from the Northeast groundfish fleet. A permit buyback program in 2001 removed 245 permits, mostly from the fleet’s smaller boats; the boats themselves were not surrendered.
In 2007, an omnibus spending bill included $13.4 million in the National Oceanic and Atmospheric Administration (NOAA) budget for the Massachusetts multispecies fishery. The funding was provided to lessen the economic impacts associated with New England Fishery Management Council’s (NEFMC) Framework 42 of Amendment 13 to the Northeast Multispecies Fishery Management Plan (FMP), which reduced days-at-sea (DAS) and implemented differential DAS counting areas. In 2012, the Secretary of Commerce declared a commercial fishery failure in the Northeast groundfish fishery for the 2013 fishing season based on the expectation that further cuts to catch limits may be necessary.
Northeast groundfish stocks were managed under the Magnuson-Stevens Fishery Management and Conservation Act (MSA) beginning with the adoption of a groundfish plan for cod, haddock, and yellowtail flounder in 1977. This plan relied on hard quotas, called total allowable catches (TACs), and proved unworkable. The quota system was rejected in 1982 with the adoption of the Interim Groundfish Plan, which relied on minimum fish sizes and gear restrictions to control fishing mortality. The Northeast Multispecies Fishery Management Plan (FMP) was then implemented in 1986.
In response to declining groundfish stocks, the FMP has been modified through numerous amendments and framework measures, each of which placed additional restrictions on fishing. During most of the 1980s and early 1990s, groundfish harvests were regulated by indirect controls on fishing mortality such as mesh and minimum fish size restrictions and some area closures. However, legal action from environmental groups stimulated demands for stronger action to eliminate overfishing and restore depleted stocks of cod, haddock and yellowtail flounder. Amendment 5 to the FMP, implemented in 1994, marked the beginning of an effort reduction program to address the MSA requirements to end overfishing and rebuild overfished stocks. The amendment established a days-at-sea (DAS) program to limit the number of fishing days each vessel was allowed to fish, increased mesh size requirements, expanded areas closed to groundfish fishing, and imposed a moratorium on new entrants with the goal of reducing the fishing effort on cod, haddock and yellowtail flounder stocks by 50% over five years. Amendment 7 (1996) broadened regulations enacted under Amendment 5 and accelerated the schedule of the DAS reduction program from 5 years to 3 years. A series of framework adjustments of Amendment 7 expanded the use of closed areas in the Gulf of Maine area and implemented additional measures to reduce or maintain fishing mortality rates of critical stocks.
A 2001 lawsuit filed against the National Marine Fisheries Service (NMFS) because it failed to create rebuilding plans consistent with new overfishing definitions created in Amendment 9 (1998) led to further reductions in effort, additional closed areas and other fishing restrictions. Negotiations among the parties to the lawsuit also led to development of Amendment 13 (2004), which implemented a wide suite of measures including formal rebuilding plans for all regulated groundfish stocks, a DAS purchase and leasing program that allowed vessel owners to consolidate DAS from two or more vessels onto one and new limited access permit categories. Framework 42 (2007) of Amendment 13 reduced DAS and established differential DAS counting areas.
Despite the range of management measures implemented, many depleted fish stocks in the Northeast groundfish fishery failed to show signs of recovery. It is likely that measures were ineffective for a variety of reasons, including the failure of the effort control measures to prevent fishing mortality from exceeding overfishing thresholds, a substantial level of illegal and unreported fishing, and shifting environmental conditions that hampered the rebuilding of overfished stocks.
Given the lack of success of existing measures, by the late 2000s, fishery managers and members of the fishing industry were considering entirely new ways of managing the fishery, including ‘‘sector based management’’ which involved allocations of groundfish stocks to what are essentially fishermen cooperatives. Amendment 13 had specified a process for the formation of sectors within the Northeast groundfish fishery. The amendment approved a sector for Georges Bank cod hook fishermen and authorized NMFS to approve a legally binding operations plan for the sector and to allocate a percentage of the total allowable catch of Georges Bank cod to the sector based on the catch history of its members.
The sector based approach was expanded by Amendment 16, which was implemented through final rule on April 9, 2010. Amendment 16 also set Annual Catch Limits in compliance with 2006 revisions to the MSA. The first day of fishing under the Northeast Multispecies Sector Program was May 1, 2010.
In 2009, the Northeast Fisheries Science Center initiated a process to identify and define socio-economic performance measures for Northeast Region fisheries, including the Northeast groundfish fishery. Data collection efforts include vessel owner and crew surveys and annual cost survey. Using the set of indicators developed by this performance measure initiative and the data collected thus far, the Northeast Fisheries Science Center has reported first and second year results for the Northeast Multispecies Sector Program.