Charter group proposes plan to acquire commercial halibut quota

  • By DJ SUMMERS
  • Sunday, March 15, 2015 10:22pm
  • News

As halibut bycatch cuts of 50 percent or more loom for the Bering Sea flatfish trawlers, charter halibut fishermen are pitching a plan to acquire a bigger piece of the fishery on the other side of the Alaska Peninsula.

During its February meeting, the North Pacific Fishery Management Council finalized a working group to complete an initial analysis of CATCH, a program that would potentially replace the current halibut quota transfer program in Southeast and Southcentral Alaska.

Catch Accountability Through Compensated Halibut, or CATCH, has been developed as a way to efficiently transfer quota between the commercial and charter halibut sectors. This takes place under a regional catch-sharing plan instituted in 2014 that replaced a guideline harvest level for charter vessels with a percentage of the overall harvest.

In 2004, the coastwide Pacific halibut catch limit was 76.5 million pounds. By 2014, that had been cut 64 percent to 27.5 million pounds. The charter sector exceeded its allocations under the 2014 catch-sharing plan, which has led to tightening restrictions on the trip, bag and size limits in 2015.

The workgoup will consist of North Pacific council member Ed Dersham as chairman, charter operators Ken Dole and Richard Yamada representing Southeast Alaska, or Area 2C, and charter operators Andy Mezirow and Martin Spago representing Southcentral Alaska, or Area 3A. Bruce Gabrys will represent Area 3A longliners and council member Duncan Fields will represent Community Quota Entities.

Steve MacLean, halibut fishery analyst for the North Pacific Fishery Management Council, says one name has been submitted to represent Area 2C longliners, but not yet appointed to the position.

CATCH would either replace or run concurrently with the current Guided Angler Fish transfer program, or GAF.

GAF allows individual charter guides in Areas 2C and 3A to lease commercial Individual Fishing Quota, or IFQ, from commercial shareholders to allow their clients to harvest halibut in addition to or instead of the daily bag limit while keeping the charter sector within its annual allocations.

Individual Fishing Quota, or IFQ, assigns an individual level of halibut quota to commercial permit holders based on their historical harvest levels and involvement in the fishery.

Southeast Alaska charter guide Yamada authored the CATCH proposal, which was introduced to the North Pacific council in October. The workgroup will put together an initial analysis of CATCH, tentatively scheduled for the council’s June meeting in Sitka.

“The object is to match up willing buyers with willing sellers,” said Yamada, a board member of the Alaska Charter Association. “This is a market-based solution to allocation problems.”

The CATCH program would differ from GAF in that charter operators could purchase, rather than simply lease, quota from commercial users. They program would also be sector-wide rather than individual; purchased quota would be held in a common pool for all charter vessels to draw from as needed to stay within their allocation.

The current industry quota transfer program, GAF, has only been in place for a year, since the beginning of the 2014 halibut season. National Marine Fisheries Service fishery management specialist Julie Scheurer says GAF usage exceeded expectations.

“As of September 15, 2014, NMFS Restricted Access Management Program processed 111 transfers totaling 41,152 (pounds) of IFQ to 43 different charter halibut permit holders,” reads a National Marine Fisheries Service, or NMFS, report on GAF usage. “These transfers allowed the harvest of up to 2,027 additional halibut as GAF by charter vessel anglers. Overall, nearly 20 percent of all GAF transfers were ‘self-transfers,’ i.e., the same person held both the IFQ and the charter halibut permit and transferred the IFQ to himself.”

According to NMFS, Area 2C transfers totaled 29,498 pounds of halibut IFQ at an average price of $5.62 per pound. Area 3A transfers totaled 11,654 pounds at an average $5.01 per pound.

CATCH would rely on the establishment of Recreational Quota Entities, or RQEs, to make the quota purchases and hold them for communal charter use. Similar organizations exist in the form of Community Quota Entities, or CQEs, which perform the same task on behalf of small fishing communities, but are infrequently used due to the expense of halibut quota.

The expense of halibut quota fuels the discussion around CATCH. Shares are currently selling for about $50 per pound, far greater than the cost of leasing. The biggest question is exactly how the charter industry would fund the RQEs to make quota purchases. Yamada says there are several possibilities for funding, but the most likely is some form of state-issued halibut conservation stamp, which would require legislative approval and be paid for by charter customers.

The plan addresses several concerns the halibut charter industry had moving into a catch-sharing program they don’t feel GAF adequately addresses, the foremost of which is absence of publicly accessible IFQ trading platform.

“There’s no mechanism to make this GAF available,” Yamada said. “If you’re a charter operator and you want GAF, there’s no marketplace. You have to know a commercial IFQ holder who’s willing to sell.”

Yamada also says the usage caps on IFQ holders hold back many charter operators, as the 10,000- to 15,000-pound block requirements cause charter operators to lease more IFQ than needed and wind up stuck with the remainder. A common pool would allow each to draw as needed instead of lose capital investment on quota overstock.

Lastly, Yamada is afraid GAF will price smaller charter operators out of business as customers justify the price of the GAF purchase with fishing for larger and larger halibut, known as high-grading.

The average weight of a GAF halibut in Southeast Alaska was 26 pounds in 2014. At an average 2C transfer price of $5.62 per pound, that one fish cost $146. Anglers will likely only pay that much extra for a trophy-size fish, which will inflate the average GAF weight.

NMFS projects that the average GAF weight for Area 2C in 2015 will be 68 pounds, making single GAF fish $382 for the angler who buys it. Yamada says he worries that high grading could lead to GAF fish of 90 or 100 pounds that could cost as much as $600.

Larger, deep-pocketed lodges may have the clientele wealthy enough for that, but the smaller operators and their blue-collar clientele will be effectively priced out of the GAF program, according to Yamada.

The commercial opposition to CATCH worries about a similar negative impact on coastal communities and entry-level commercial halibut fishermen if Outside money floods the IFQ market in pursuit of trophy fish and raises the price of entry into the halibut industry.

“The halibut stamp funding mechanisms proposed for CATCH threatens to distort the market,” reads a letter from Tom Gemmell, executive director of the Halibut Coalition, which is made up of commercial and subsistence fishing members, “requiring individual commercial fishermen to compete for quota against a purchasing entity (the RQE) that is fed by an external revenue stream.”

Further, the Halibut Coalition questions the motivation for Outside quota buyers to harvest halibut responsibly.

“The investment required of commercial quota share purchasers creates a long-term commitment to sustainable harvest— ‘skin in the game’ means the quota share holders pay attention to safeguarding the resource.”

The Halibut Coalition supports the idea of quota transfer with options to lease and to purchase, but feels GAF adequately addresses the concerns of the charter halibut industry or could be modified to do so as more time passes.

DJ Summers can be reached at daniel.summers@alaskajournal.com.

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