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Have opportunities or barriers to entering the fishery changed?

Indicators: Access and Exclusion

Key Findings

  • Prior to implementation of the Northeast Multispecies Sector Program, access to the groundfish fishery tightened in 1994 with implementation of a limited access program, and some fishermen left the fishery. Similarly, when the Northeast Multispecies Sector Program began in 2010, additional fishermen chose to leave the fishery.
  • In the initial allocation of the catch share program, a majority of shares for several allocated stocks were concentrated among the top 25 quota holders.
  • About a third of the fishermen enrolled in sectors do not catch allocated groundfish but instead transfer their entire quota to other fishermen.
  • The volume of ACE transfers for individual stocks has varied, with many stocks showing a decrease in transfers. The decreases are likely a response to lower annual catch limits.
  • Permit banks are being used to preserve fishing opportunities for fishermen who may otherwise be disproportionately affected by the consolidation of fishing effort that followed implementation of the Northeast Multispecies Sector Program.

Interactive Chart Story


This indicator shows the degree to which people seeking to fish have access to fishing quota and how evenly catch shares are distributed among the fleet.

In Their Own Words

Although some of the quantitative data analyzed for this indicator exhibited clear trends, it was challenging to discuss the relationships between observed data trends and implementation of the respective catch share programs. The Measuring the Effects of Catch Shares project team believed that those stakeholders most involved in the fishery, either as active participants or as representatives of an involved coalition of participants (e.g., sector managers in the Northeast), would be able to provide insight and help to explain trends seen in the existing quantitative data. The following quotes were selected to illustrate some of those perspectives and highlight trends such as effects on small vessels, the effect of avoiding “choke stocks,” fleet diversification, and product quality. The individual quotes do not represent findings or conclusions for this indicator, nor do they represent a consensus across any category of participants.

“The fishermen in New Hampshire and southern Maine and Northern Massachusetts are historically small boats. They’re day boat draggers. They fished for historically whatever came through. The rolling closures put a dent in how they could fish because a lot of the closures were right off of New Hampshire. So when catch shares came their allocations were small to begin with.”
~ Fisherman

“In theory, a smaller boat being in a sector with larger boats makes sense because the way the sectors work you have right of first refusal. So if there is some bigger boat within your sector that wants to lease away fish, in theory they would say “You’re a small boat guy. You really need this fish. Okay. I’ll lease it to you.” So now you’ve made out well because you tied your wagon to a bigger guy whose got a bigger allocation. The downside is when you want that fish and I’m willing to lease it, I say it’s $5 a pound.”
~ Government

“I’m not sure if it’s really made more of an insulation because mostly people are harvesting the allocation that they bring to the sector. There’s not a lot of sharing. There is definitely a lot of inter-sector trading, but in terms of the sector divvying out the allocation to the individuals initially, it’s been pretty much proportional to what they’ve gotten in the first place.”
~ Government

“One of the big issues I have, and I didn’t know this when we went to those catch shares, is that the boats that always fished George’s out off New Bedford could lease codfish quota and then come in to the Gulf of Maine. And that put pressure on the Gulf of Maine that the Gulf of Maine has never seen. And I didn’t realize that could happen, see.”
~ Fisherman

“Generally most people are in sectors because it does provide them with benefits and flexibilities. But as a general rule, they are not actually interested in cooperating any differently than they did before.”
~ Government

“I personally think that a significant proportion of vessels that are in sectors, it wasn’t the best choice for them. I think part of it is that everyone looks at the common pool quota and they’re saying it’s so low I couldn’t fish there. But it’s low because there are so few people in the common pool that have a history. If half of the permits that are in sectors go in to the common pool, they take their quota from the sectors to the common pool. Nobody wants to be the one guy who goes there because then the other people in there are all just trying to get a piece of your quota. But if half of you go, you’ll find the common pool is a lot different. I think the smaller guys, the day trippers, would probably do better in the common pool, assuming enough of them went in to bring the quota up. Realistically, it is the trip boats, the high volume vessels, that make the most of the efficiencies of scale in sectors.      ”
~ Government

“There is still that mindset that this is my fish. At least in the two sectors that I work there is no concept of a community pool for the stocks that people are concerned with. I would love to move to that direction.”
~ Industry Representative

“So now we have members from New York, New Jersey, and they mostly became members because they were not longtime participants in the groundfish fishery but because of the allocation method that was used they received small amounts of allocation, not enough to make it worthwhile for them to fish it. So we accommodate them as members that just lease their fish to us. I think part of the reason why many of them came to us is because we wanted their fish and we didn’t charge them anything to participate. They just get revenue from whatever they lease to us, so it’s no work for them. They just get checks in the mail and they’re happy to do that.”
~ Industry Representative

“I understand why there is 13 different sectors in the network. I just don’t think that makes sense. I think they need to consolidate. I know that’s a dirty word. They need to consolidate to get more efficiency in the way that they do business, and cut down on their fees and stuff because I don’t want to see those guys go out of business either.”
~ Industry Representative

“The way I always looked at it, do you want the whole industry collapsed? Or do you want some people to have the ability to make it work? There’s a fundamental choice you could make. Because there was obviously not enough fish. No one person got enough fish to make it. Nobody. So if you didn’t have leasing, then that meant everybody has to go under.”
~ Fisherman

“But many fishermen just stay at home and kick back and transfer away their fish at a price, making a nice pot of money without really being fishermen anymore. Is that a bad thing? Is that a good thing? I guess the jury is–it depends who you talk to because if you have somebody who is a longstanding fishermen, who was pushed out of the fishery because of a catch share allocation that might have been inappropriate or inequitable, at least he’s still got the potential to get back in the fishery if conditions improve. In the meantime, he just leases away his fish and doesn’t fish.”
~ Government

“We have a good, strong sector, but we knew each other. We knew who was good. And we wouldn’t let anybody come in that we knew wouldn’t work. And that was how it was designed, self-selecting.”
~ Fisherman

“In our sector the larger boats subsidize the smaller boats, because our fee is based on your allocation. So naturally if somebody has a big allocation, they’re paying a bigger share. And that’s okay. We set it up like that. That’s okay. I’m fine with that. And even on our monitoring and stuff, it’s spread out that way.”
~ Fisherman

“I think after a couple years people are becoming used to sectors, but there are still a small number of guys in the common pool who have just held out and said, “We think we can make it better staying in the common pool.” They don’t see the sector program as really having anything to offer other than additional fees.”
~ Government


Baseline: Before Catch Share Program

In response to stock declines and widespread overfishing, the government restricted access to the groundfish fishery in 1994 through a federal license limitation program (Management Framework). Access to the fishery was determined by a combination of vessel characteristics, including length, horsepower, and gross tonnage. Each limited access Northeast multispecies permit has maximum upgradeable baselines for each of those characteristics. Permits must be renewed annually, and they are transferable subject to the baseline upgrade limits. A permit is normally registered for use with a particular vessel at the time the permit is issued, renewed, transferred, or replaced. In addition, a days-at-sea (DAS) system to limit fishing opportunities was phased in over several years (Management Framework). The DAS system limited the number of days each permit could fish for groundfish in a year. Amendment 13 to the FMP implemented a DAS purchase and leasing program in 2004 that allowed vessel owners to consolidate DAS from two or more vessels onto one. However, DAS could only be sold within a vessel size class, or from a larger vessel to a smaller vessel.

During Catch Share Program

PSC Distribution

After the Northeast Multispecies Sector Program started in 2010, the limited access Northeast multispecies permits and baseline upgrade limits remained in effect. However, the program allowed all owners of vessels issued a permit to opt out of the DAS system by voluntarily joining a sector. Each permitted vessel that joins a sector is allocated a potential sector contribution (PSC) based on its groundfish catch during the catch history qualification years (Northeast Multispecies Sector Program). Persons who do not currently own a fishing vessel, but who retained the fishing and permit history of a vessel, are also allowed to participate in sectors, provided they have a Confirmation of Permit History. 

In the initial allocation of the Northeast Multispecies Sector Program, the majority of PSC for nine allocated stocks was concentrated among the top 25 quota holders (see chart above: PSC Distribution). The most concentrated stock was Georges Bank winter flounder, for which three entities controlled 36 percent of the total PSC. The least concentrated were Gulf of Maine cod and Southern New England/Mid-Atlantic yellowtail flounder, for which the top three entities controlled 12 percent and 11 percent, respectively.

One possible reason for the uneven distribution of PSC is the initial allocation formula used when the Northeast Multispecies Sector Program began. PSC allocations were based on fishermen’s catch histories during the time period 1996-2006 (Northeast Multispecies Sector Program). Individuals who chose to purchase additional DAS after they became transferable in 2004 increased their landings, which subsequently resulted in higher catch histories (and PSC allocations) during implementation of the Northeast Multispecies Sector Program; those who leased out DAS lowered their catch histories and PSC allocations.

In terms of sector allocations, in 2014, the percentage of the ACLs for the allocated stocks that NMFS distributed to a particular sector as ACE ranged from less than 0.01 percent for some stocks to 51 percent for redfish allocated to Sustainable Harvest Sector 1 (Sector ACE Allocation ).

In 2017, Amendment 18 to the FMP imposed accumulation limits to prevent the acquisition of excessive shares. However, the 15.5 percent cap on aggregate PSC and 5 percent cap on limited access Northeast multispecies permits did not reduce consolidation of holdings from the present level. Permit banks are assigned the same accumulation limit as other entities.

ACE Transfers

Annual catch entitlement (ACE) may be transferred between sectors, while PSC may be transferred only within sectors. ACE transfers must be reported to NMFS, but PSC transfers do not (Northeast Multispecies Sector Program). Although ACE is pooled within sectors by regulation, most sectors assign catch allowances to member vessels based on PSC allocations, and the buying and selling of ACE between sectors occurs almost universally at vessel or vessel affiliation level. However, all between-sector transactions of ACE need sector management as well as NMFS approval. Sector managers can submit ACE transfer requests to NMFS electronically via the Sector Information Management Module, a secure website used by sector managers and NMFS to communicate sector-specific information. ACE is exchanged between sectors for money, for ACE of another stock, or for any terms agreed to by the two sectors.

Some sectors trade their entire annual allocation of ACE. For example, Northeast Fishery Sector 4 trades all its allocation, most of which is transferred to Northeast Fishery Sectors 2 and 3. With respect to the groundfish fleet overall, roughly one-third of the fishermen enrolled in sectors do not catch allocated groundfish but instead transfer their entire quota to other fishermen.

While it took time for a market for ACE to develop once the Northeast Multispecies Sector Program was implemented, transfer activity was fairly steady after mid-August of 2010. The volume of ACE transfers for individual stocks has varied, with many stocks showing a decrease in transfers (see chart above: Annual ACE Transfers by Stock). The decreases are likely a response to lower annual catch limits (ACLs) across a number of key stocks (Annual Catch Limits). NMFS has developed a website to view electronically groundfish sector-specific ACE trade information, including the sector transferring its allocation, the sector receiving the allocation, the live pounds of each stock transferred, the date the transfer was initiated and the date the transfer was completed. Initially, the website also provided financial information related to the exchanges, but this information was removed after NOAA General Council deemed it to be confidential.

One advantage of sectors is that harvest overages by individual sector members may be compensated for by reallocation within the sector, rather than through acquisitions of quota on the open market. All sectors have included in their operations plans a right of first refusal which applies to ACE transfers by its members, and some operations plans also include a right of first offer. There have been complaints that these sector restrictions on transfers may be depressing the liquidity of the ACE trading market, and affecting the relationship between ACE prices and ACLs for specific stocks.

NMFS estimated transfer prices for the allocated stocks. For some stocks, such as Georges Bank haddock, prices for ACE were at or near zero. The ACLs for those stocks were relatively high, but it was difficult for fishermen to harvest them because of low allocations of co-occurring stocks (Financial Viability of the Fishery: Landings). ACE of species with low allocations, such as cod and yellowtail flounder, traded at prices that at times exceeded half of the species’ ex-vessel prices.

Transfer data suggest that larger vessels were more likely than smaller vessels to be able to afford to buy ACE for non-target or constraining stocks, such as cod and George’s Bank yellowtail flounder, that allowed them to access target species, such as haddock. Landings and allocation data by vessel size category point to a broad shift of ACE from smaller to larger vessels (Financial Viability of the Fishery: Landings). The smallest vessel size category (less than 30 feet in length), most likely comprised of inactive skiffs, was a primary source of leased ACE. Additionally, permits with a Confirmation of Permit History were also a significant source of ACE. One indication of the broad shift of ACE from smaller to larger vessels is that while the largest vessel size category (more than 75 feet in length) was allocated 37 percent of all ACE in 2013, this size category caught 53 percent of total groundfish catch.

Some day-boat fishermen with smaller vessels are concerned that ACE transfers are leading to a groundfish fleet of larger vessels and fewer vessel owners (Number of Active Vessels). Under the catch share program, large vessels are allowed to purchase ACE from small vessels, which can price other small vessels out of the quota market.

Permit Banks

Permit banks are being used to preserve fishing opportunities for fishermen who may otherwise be disproportionately affected by the consolidation of fishing effort that has followed implementation of the Northeast Multispecies Sector Program (Number of Active Vessels). For example, several New England states received grant awards from NMFS to establish banks of limited access Northeast multispecies permits. Permit banks have also been established by nonprofit organizations through grants, loans, and mitigation funding. Amendment 17 to the FMP was completed in 2012 to further develop State-operated permit banks, and to streamline the administrative requirements these permit banks must meet to lease ACE to a sector. By 2013, permit banks owned more than 95 limited access Northeast multispecies permits.

Each permit bank has a unique mission, but they generally exist to help provide fishing opportunities for specific segments of the industry (e.g., specific ports, gear types, vessel sizes), with a larger aim of providing stability for the industry and fishing communities. Typically, the ACE and/or DAS associated with a bank’s permits are offered at below-market-rate prices to fishermen who intend to actively fish for groundfish and meet other eligibility criteria established by the permit bank. For example, the Maine Permit Bank requires that the recipient (buyer) of ACE operate a vessel less than 45 feet in length, operate their vessel from a community with no more than 30,000 residents, and land their catch in Maine. In contrast, The Nature Conservancy/Island Institute Community Permit Bank sells ACE to vessels of all sizes, gear types, and ports, with a focus on supporting collaborative research and developing gear configurations that are more selective than required (Financial Viability of the Fishery: Landings).

While permit banks have helped some fishermen acquire quota at sub-market prices, they are limited by the low volume of quota they can make available. In order to significantly increase their quota holdings, permit banks have to acquire permits with substantial allocations, which can be expensive.

Information Sources

Demarest, C. and A. Kitts. 2013. Trends in Groundfish Fishery Concentration, 2007-2013: Draft. Prepared for New England Fishery Management Council. Newburyport, MA.

Groundfish Plan Development Team. 2013. Groundfish permit banks. New England Fishery Management Council. Newburyport, MA.

Kitts, A. et al. 2011. 2010 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2010-April 2011). NMFS Northeast Fisheries Science Center Reference Document 11-19. Woods Hole, MA.

Murphy, T. et al. 2012. 2011 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2011-April 2012). NMFS Northeast Fisheries Science Center Reference Document 12-30. Woods Hole, MA.

Murphy, T. et al. 2013. 2012 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2012-April 2013). NMFS Northeast Fisheries Science Center Reference Document 14-01. Woods Hole, MA.

Murphy, T. et al. 2015. 2013 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2013-April 2014). National Marine Fisheries Service, Northeast Fisheries Science Center Reference Document 15-02. Woods Hole, MA.

National Marine Fisheries Service. 2015. Fishing Years 2015-2020 Northeast Multispecies Sector Operations Plans and Contracts: A Programmatic Environmental Assessment. Gloucester, MA.

National Marine Fisheries Service. 2017. Sector ACE Transfer Summary. Available online: https://www.greateratlantic.fisheries.noaa.gov/acetransfer/

Updated: April 2018

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