nfcc: national fisheries conservation center

The Moratorium on Individual Transferable Quotas Should Be Lifted
By Rod Fujita

Our nation's fishing industry and the families that depend upon it are at risk because too many commercially fished stocks are in steep decline or have already been depleted. On the West Coast, bocaccio, canary rockfish, cowcod, yellowtail rockfish, and lingcod have all been dramatically overfished. Some of these species are at less than 10% of their estimated original levels. But the use of Individual Transferable Quotas (ITQs), a kind of stock market for fish catches, holds great promise for ending the race to catch fish.

One of the most fundamental causes of overfishing is that the prevailing management regimes actually encourage it.

Many U.S. fisheries, including part of the West Coast groundfish fishery, are open to all comers. At the same time, fisheries managers set a limit on the total number of fish that can be caught from that fishery. This sort of management system creates strong incentives to catch as many fish as quickly as possible, before the catch limit is reached, leading to frenzied fishing derbies. These incentives for intense competition mean that fishermen don't get any benefits from good conservation behavior.

Individual Transferable Quotas turn these incentives completely around. Each fisherman is assigned a fixed percentage of the total catch that can be taken from the sea. If anyone wants to catch more, they must buy allowances from others. Or a fisherman can catch less or leave the fishery entirely and sell the allowance. Like shares of a company's stock, ITQs are percentage shares of the allowable catch, held by individual fishermen. As the health of the fish population increases and allowable catches increase, share value increases as well. Thus, ITQ holders have a direct economic stake in ensuring that the fish population stays healthy.

In contrast to conventional fishery management regimes, almost all ITQ programs have effectively ended the race for fish, according to the scientific literature, including a recent review by the National Academy of Sciences' National Research Council. The best picture of how U.S. ITQ programs may operate can be seen in the performance of the Alaska sablefish and halibut ITQ program. Other ITQ programs, such as that for surf clams or New Zealand's program, do not incorporate several important features of the Alaska program (for example, stringent caps on the total amount of quota share that can be accumulated by any one firm or individual).

The Alaska ITQ programs stopped the race for fish and increased season length from less than 5 days per year to 245 days per year. The total allowable catch (the total amount of fish allowed to be caught) has never been exceeded under the Alaska ITQ programs. Bycatch discard (fish and other species wastefully caught but not kept) was reduced by about 82% in the Alaska halibut fishery after ITQs were implemented.

There is no evidence of highgrading (dumping of lower value fish to maximize value of the quota share) resulting from the Alaskan ITQ programs. However, anecdotal evidence of this has surfaced recently. This evidence should be viewed in the context of pervasive anecdotes about highgrading resulting from non-ITQ management (i.e., small trip limits put in place in lieu of ITQs to extend the fishing season). Safety appears to have improved with the Alaska ITQ programs because of the end of the race for fish; search and rescue missions for imperiled boats dropped by 63% after ITQs were implemented. While there have been winners and losers (as would be the case for any management regime that successfully reduces an overcapitalized fleet), excessive consolidation of fishing fleets and corporate takeovers of independent fishing firms has not occurred, probably due to the restrictions on ITQ ownership contained in the Alaska ITQ program.

While ITQs hold great promise for U.S. fisheries, there is currently a Congressionally-mandated moratorium on new ITQ programs. The major law that covers U.S. fisheries, the Magnuson Fisheries Act, is up for renewal this year. Congress has a chance to give all U.S. fisheries a greater chance of long-term productivity by lifting the ban on ITQs and passing a strong Magnuson Act that emphasizes the economically and environmentally sound incentives that can restore balance to our nation's $3 billion fishing industry.

Dr. Rod Fujita is a marine ecologist at Environmental Defense, where he focuses on marine reserves, fisheries reform, and other measures to protect marine ecosystems.