CATCH SHARE PROGRAM OVERVIEW
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.
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