Groundfish aid plan includes $100 million in permit, boat buybacks

The New England congressional delegation is seeking federal financial aid to support the region's groundfishermen. A draft letter features a $100 million permit and boat buyback program, and $87.5 million in various subsidies for those who stay in business.
Robert F. Bukaty | BDN
The New England congressional delegation is seeking federal financial aid to support the region's groundfishermen. A draft letter features a $100 million permit and boat buyback program, and $87.5 million in various subsidies for those who stay in business. Buy Photo
By Richard Gaines, Gloucester Daily Times
Posted Aug. 30, 2012, at 6:34 a.m.

A draft letter that outlines a proposed disaster relief program for the Northeast groundfishery — featuring a $100 million permit and boat buyback program, and $87.5 million in various subsidies for those who stay in business — is circulating among members of the New England congressional delegation.

Under the program, the government would front the buyback money, which would be repaid from charges on the revenue generated by the industry survivors, according to the draft letter. The government would also put up $10 million to cover the anticipated default rate in the program.

A copy of the draft letter was provided to the Times Wednesday by a staffer within the New England delegation. The letter is being circulated for ideas and signatures in time to put the House and Senate leadership and appropriations committees on notice of a desire to tack the groundfish disaster relief program onto a bill that was likely to make it to President Obama’s desk before the end of the 112th Congress. One likely carrier is a disaster assistance bill for farmers that passed the House in July. But many New England delegation members have not yet seen the package, a congressional staffer told the Times Wednesday.

It was more than eight months ago that Massachusetts, New Hampshire and Maine asked the Department of Commerce to declare a fisheries disaster.

The administration never has responded, creating widespread anger.

“Our fishermen work hard every day under challenging conditions,” said Rep. Frank Guinta of New Hampshire. “The least Washington can do is extend the courtesy of replying to the request for disaster assistance.”

On Monday, Sen. John Kerry’s office issued a statement hinting that a regional disaster declaration was being drafted.

Without the declaration, which is authorized for fishery failures in the Magnuson-Stevens Fishery Conservation and Management Act, relief aid is considered a political near impossibility.

Along with the $100 million buyout, the draft letter proposed $30 million in direct aid to fishermen, another $30 million to assist communities and shore side businesses, $15 million to cover at sea monitoring for two years, $7.5 million for cooperative and traditional scientific research, $2.5 million to for retraining ex-fishermen and another $5 million to support the 17 fishing cooperatives, or sectors, now operating in New England.

On Tuesday, New York said that it, too, was seeking relief from the failure of the groundfishery, and urged to be included in any disaster relief legislation.

However, only Massachusetts, which filed first last November, submitted original socio-economic studies ostensibly proving the Northeast groundfishery has failed.

Gov. Deval Patrick declared the studies a break-even analysis, and a case study of a group of boats based in small ports along Massachusetts Bay proved the disaster was triggered by the 2010 conversion of the groundfishery into an allocated commodity market trading in “catch shares” among fishing cooperatives whose members are encouraged to buy, sell and trade shares, and thus fishing quota.

The system, however, is shown to have consolidated control of the fishery into fewer and larger capitalized hands, while driving smaller, independent boats to the sidelines. NOAA’s own figures showed that 21 of the Gloucester fleet’s then 96 boats were essentially driven out of business in 2010 alone, the first year under the catch share system.

Twice, in 2011 and again this year, Democratic Reps. John Tierney and Barney Frank, as well as a significant number of their Democratic colleagues, joined with House Republicans in approving amendments to spending bills to halt the expansion of the catch share system, the fisheries agenda brought by Jane Lubchenco, when she was picked by President Obama to head the National Oceanic and Atmospheric Administration in 2009.

Lubchenco told The Times that her goal via catch share trading was to see a “significant fraction” of the groundfish boats eliminated via consolidation.

By providing buyout capital and subsidizing the survivors, the plan outlined in the letter would accelerate the consolidation of the fishery.

“This is consolidation on steroids,” said one an industry attorney who spoke only on the condition of anonymity Wednesday.

“I don’t see how this deals with the structural problems,” added an industry analyst.

The onset of the catch share regimen has been backed by the Walton Foundation and Environmental Defense Fund, subsidized by the foundation organized with Wal-Mart profits and coincided with new conservation law that required 10-year rebuilding timelines for weakened stocks. And, beginning in 2010 — the same year catch shares began in New England — strict catch limits were required to meet the rebuilding deadlines.

The confluence of these forces meant piddling allocations across the industry, leaving the strong stronger for their ability to acquire catch shares and the weak desperate — watching, folding up and selling out.

At a Senate Commerce Committee hearing he organized in Boston last October, Sen. John Kerry cited consolidation as a frightening problem.

“In 2010,” Kerry said facing Lubchenco, “approximately 80 percent of the gross revenues resulted from landings from only 20 percent of the active vessels. That threatens the future of small boat fishing in Massachusetts.”

Dire as the condition of the industry was, it got materially more desperate as 2012 wore on. First, came a shocking scientific assessment of Gulf of Maine cod that reversed an optimistic assessment made only three years earlier which had served as the basis of larger allocations of the linchpin fish for the day boats.

Then came a cohort of updated assessments for the groundfish stocks on Georges Bank, which had been the mainstay for the offshore boats.

Together, the government’s science described a fishery less fecund and dynamic as previously found, facing cuts of between 45-73 percent next year.

Last week, Mayors Carolyn Kirk of Gloucester and Jon Mitchell of New Bedford urged NOAA to freeze its catch limits in place until confidence in its scientific assessments was restored.

The twin New England fishing capitals — which together account for more than two thirds of the region’s landings in groundfish (not including scallops) — are leading a legal challenge to the catch share regimen that culminates in legal arguments next Wednesday in the U.S First Circuit Court of Appeals in Boston.

The case centers on the claim that the government set out to illegally bar fishermen from a referendum on whether to go to an allocated, limited access concept for the groundfishery. The government, along with its environmental allies and a small group of fishermen operating with broad subsidies by conservation groups, argued successfully in U.S. district court last spring that the referendum was not required.

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©2012 the Gloucester Daily Times (Gloucester, Mass.)

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http://bangordailynews.com/2012/08/30/politics/groundfish-aid-plan-includes-100-million-in-permit-boat-buybacks/ printed on August 23, 2014