PCFFA Fishermen’s News, October 2008: Crumbling Infrastructure

October, 2008

Crumbling Fisheries Infrastructure

How Development and “Rationalization” Threaten Coastal Fishing Communities By Zeke Grader, Sara Randall, Glen Spain

Infrastructure is one of those bureaucratic words that has been in vogue for only about the past 30 years. It’s one that brings a yawn to most of us. William Shakespeare would never have used it (“Lo yon infrastructure and thou bridge to nowhere…..”) but its a favorite with every city manager with a pocket protector, not to mention with those non-descript, pasty faced mid-west Congressmen sitting on bodies like the House Transportation Committee.

But before you turn the page to look at an ad for a new marine head, consider what we’re talking about here applied to fishery infrastructure — we are talking here about the content of our ports, the places you leave and return to and what’s there to serve your needs. We’re talking the wharves and marinas, the buying stations and processing plants, the ice house and fuel dock, the shipyards, the diesel and electronic repair shops, the gear store and chandlery. It’s the shoreside stuff of fishing. And, frankly, today it’s mostly in a shambles.

The three basics of commercial fishing are fish, access to the fish, and markets for those fish. Without any of those, you have no fishery.

For the better part of 30 years PCFFA’s primary focus has been on the fish— protecting and restoring stocks to ensure the existence of our fisheries. That’s certainly what Fishermen’s News readers have heard most from us over the years. That issue is certainly the most difficult of the three and, obviously, with no fish to catch the other two don’t matter much.

Time, too, has been spent in this column on discussing marketing, particularly after the nose dive salmon prices took several years ago. Promotion, improving quality, ensuring the healthfulness of fish, full and accurate labeling, and certification programs have all been part of the marketing effort.

Most of PCFFA’s past effort on access has dealt mostly with fishing regulations — which are largely driven by fish stock abundance — working to ensure there was access to harvest the stocks available and the regulations were fair and equitable. More recently, more attention has been focused on loss of access to fishing grounds under proposals for large networks of no-fishing zones, euphemistically called “marine protected areas (MPAs)” or “marine reserves.” We’ve also talked about the looming threat of new offshore oil drilling and consequent loss or destruction of whole fishing areas.

However, the second type of access — having ports to leave and return to, places to get supplied and offload and tie-up (i.e., the infrastructure of our industry) has been given far less attention. It is deserving of our attention now, however, when whole fishing communities are disappearing or threatened with disappearance. What brought this all to mind was the near collapse of the fishing infrastructure in Morro Bay, California, brought about by the recent loss (through buy-out) of its last small trawl fleet, and also the recent economic woes in Adak, Alaska, attributed to the rationalization of the BSAI crab fishery (“crab ratz”).

What we’d like to do here is examine these more hidden threats to the underlying infrastructure supporting fishing communities — and, of course, suggest what can be done about it.

Coastal Development

Beginning in the 1960’s, fueled by the nation’s post World War II prosperity, pressure began to build on historical fishing ports all along the coast for second homes and upscale retirement housing, tourism facilities, recreational marinas, even offices. Fishermen, in places such as California, along parts of Puget Sound, Connecticut, the Carolinas and Florida among others began to feel the pinch from this new development encroaching on traditional fishing harbors.

Developers had their eyes on port properties not to upgrade or improve them for fisheries, but rather to convert them to “higher and better uses” — meaning, of course, properties that would net them more money, whether or not those uses required a waterfront. This had the effect of displacing fishery-related businesses and uses dependent on waterfronts or coastal lands. Speculation then drove up housing prices, so that living in coastal communities also became too expensive even for fishermen working in those same communities.

Sadly, this problem has not gone away. Look at what’s happened in Maine for example. Even such traditional fishing locales such as Seattle’s Fishermen’s Terminal have come under intense pressure from developers and city bureaucrats who would displace fishing from this venerable locale.

In a public outcry against the closing off of access to their coast by private development, Californians passed a ballot initiative in 1972 to protect their coast, plan its usages and establish regulatory authority to protect access and coastal dependent uses for future generations. In 1976, the State Legislature was considering bills to implement the initiative. Many in the development community still had not come to grips with the message of the 1972 vote and acted to block implementing legislation or push weaker bills to thwart the will of the voters. Sadly, fish processors and even some fishing representatives, guided more by a reactionary ideology than the pragmatic needs of the fishing industry, were among those fighting coastal protection legislation.

PCFFA took a different tack. It saw the value of a strong coastal act for preserving the State’s vulnerable fishery infrastructure, but also for laying the foundation for needed improvements, including new marinas for commercial fishing boats.

In one of its first legislative actions, following its formation earlier that year, PCFFA successfully put port protection language in the California Coastal Act. As a result, a strong bill was passed late that summer and sent the Governor where it was signed, declaring commercial fishing as a “coastal dependent use” and stating that “commercial fishing facilities within the coastal zone shall be protected and, where feasible, upgraded.”

Some of the other coastal states also included protective language for fishing facilities in their coastal acts — but many unfortunately still have no such protections.

Over the years, the language in the California Coastal Act has proven invaluable for keeping developers from pushing out commercial fishing facilities altogether in many local harbors. For the most part, the California Coastal Commission staff has also been willing to enforce the law to ensure that fishing infrastructure is protected.

The problem with the language in the Act is that it is one of “use it or lose it.” If facilities become vacant or abandoned they can then be converted to other uses. And that is the rub. If fishing infrastructure is converted during a fishery downturn due to non-use, it is next to impossible to get it back if there is a fishery rebound, even with renewed interest in using the property for fishing purposes.

Depressed or Collapsed Fisheries

The second threat to the maintenance of fishing infrastructure is not from outside, but from within. This is when there is a downturn in fishing or when a fishery collapses and, as a result, catches remain low or non-existent for a period long enough that it may no longer be profitable for a business owner, or even a municipality (where a whole marina may be involved), to keep a facility in operation. And, as noted above, once a facility closes and it is converted through development to other uses it is most likely lost forever as part of the fishery infrastructure in that port.

Just along the California coast, the recent downturn in salmon and groundfish has caused the disappearance of fishing facilities in Sausalito and Oakland on San Francisco Bay, not to mention the near disappearance from the fishery map of little, once bustling landing sites such as Shelter Cove. In San Francisco it is now difficult for a small fisherman to get ice. In Bodega Bay, there is only one remaining county facility, Spud Point, as the only place to buy fuel and ice. The downturn in fishing for Moss Landing opened the door for conversion of fishing support businesses to a major research laboratory. Much of Fort Bragg’s Noyo Flat could soon be lost to tourism and other non-fishing activities as a result of the loss of much of the production that once came into what was once the coast’s largest salmon port. It’s not much different along the coast in Oregon, in ports such as Brookings, or in many of Washington State’s fishing communities.

Sometimes just the loss of one fishery can be enough to cause the collapse of a community’s already strained fishery infrastructure. In Morro Bay, for example, the loss of the groundfish trawl fleet meant a major loss of income coming across the dock and to many other fishery support businesses in that community. Thus, it was not just the groundfish fishery that was affected, but all of the other fisheries — including salmon, albacore and hook-and-line rockfish fishermen who utilized the same facilities those trawlers supported.

The lesson from Morro Bay — which is working hard now to build itself back up — is the interdependence of differing fisheries when it comes to maintaining a viable port. Certainly fishing communities should work to ensure there are diverse fisheries in their ports, the same as any individual should have a diverse financial investments portfolio. However, unless real effort is made to maintain healthy fish stocks — and the markets for those fish — the loss of even one fishery can topple an infrastructure utilized by many different fisheries.

What this means is that it is in everyone’s best interests in a fishing community whose members utilize or depend in some way on the same infrastructure to be concerned with maintaining all local healthy fish stocks — whether or not they themselves catch those types of fish.

“Rationalization” and Consolidation

The most recent threat to the infrastructure of our fishing ports comes from the latest fad in fishery management measures, ironically developed to “improve the economics of fisheries.”

For years we’ve been hearing fishery managers, academics and some of the environmental NGOs nattering on about “too many boats chasing too few fish.” Their overly simplified view of fisheries often misses the fact that it may be a only few boats taking too much fish, or the fact that large amounts of fish were being taken because no effort had been made to assure the best price was achieved for the fish in order to reduce pressure, but still maintain the economic viability of a fishery.

“Overcapitalization” can take many forms; it’s not always reflected in the absolute number of vessels in the fishery, but perhaps in their size or the amount of gear being used. Good fishery management is not one of extremes, but a balancing between the economics of individual operators, with an effort to spread the wealth of a fishery as broadly as possible among fishermen and their communities, all the while being mindful of the long-term sustainability of the resource.

In response to the mindless chatter of these dilettantes about too many boats (or fishermen), and in part because it is their prescription of choice to their own flawed diagnosis, individual quota systems have been prescribed with the intent of reducing the number of participants in a fishery. This almost always means a severe reduction in fleet size and a corresponding reduction in jobs at sea. What has been developed instead are privatized quota systems intended to use “market forces” to determine the allocation of catch to individuals or vessels.

The idea is that the smaller, less productive members of a fleet will sell out their quotas or harvest shares to larger “more efficient” producers, making the fishery more profitable for the surviving members. This way of thinking, however, makes the underlying assumption that bigger is better. But better for what? A bigger boat may be much less sustainable, or much less able to fish selectively than several smaller boats spreading the same effort over a wider area. Bigger is thus not always a conservation benefit.

We should also note that these market system proponents seldom let market forces work completely — they arbitrarily begin these systems by eliminating at the outset smaller producers and others they deem unworthy of participating in the fishery.

There can be no argument that those who hold and accumulate more quota shares do very well — many becoming very wealthy as the ownership over the fishery consolidates among a smaller and smaller group. This mechanism of economic cannibalism is euphemistically called “rationalization” through the issuance of individual fishing quotas (IFQs).

“Rationalization” is a nice sounding term; it would be worthy of Jonathan Swift had he turned his attention to fisheries rather than the “Irish problem.” Unfortunately, there are just a few serious glitches with this fine-sounding theory. The first is that it leaves in its wake a lot of impoverished and unemployed fishermen.

The second glitch to quota-based rationalization is that it can result in a substantial reduction in the number of vessels in a fishery within a port. Sometimes it means the fishery leaves the port altogether, as the vessels holding quota or share just move elsewhere, leaving the infrastructure of a whole community with no support, and no jobs for shoreside workers. That’s what happened in Morro Bay and may be what’s happening in Adak, Alaska.

Last month, in response to the economic crisis facing Adak, David Fraser in a 15 September letter to John Sackton (Editor and Publisher of the online newsletter Seafood.com) provided his analysis of what went wrong in Adak, saying:

“[T]he core of the problem is the negative subsidy created by the Crab Ratz program [BSAI “crab rationalization” program] as it impacted the City of Adak.”

“‘Crab Ratz’ robbed Adak of landings of 2 million lbs. a year of brown crab.

“The fact that Crab Ratz allowed consolidation of the floating processor IPQ [Individual Processor Quotas] for northern opilo so that all could be processed in one plant added insult to injury. This consolidation, absent sideboards, allowed a floating opilio processor to come out west and take cod that would otherwise have been landed in Adak. The increase in floating processing of crab resulted in a 60% cut in cod landings from the prior year.

“Crab Ratz is what is pushing Adak Fisheries up against the wall, and in turn making the town ‘an economic basket case.’

“Both Adak and the city could survive quite well if brown crab processing rights had been allocated in recognition of who was doing the processing and had the investment when the plan was being developed. All we need is an equal amount of ‘subsidy’ with every other community/processor in the Bering Sea and GOA that enjoy the protections of shoreside processing requirement for the primary fisheries on which they depend.”

When the problem of a fishery leaving a community because of IFQs is raised, the typical response again has been wrong. In the North Pacific, with BSAI crab rationalization, and now in the Pacific with groundfish, the answer has usually been to institute processor quotas on top of the individual fishing quotas. The theory behind this is that by giving processors their own quota shares to the fishery, the fishery will stay in that community, keeping the fishing infrastructure intact. The only problem is that no one is requiring that processor (or its quota shares anyway) to stay in that port. The processor could easily move or sell the quota elsewhere — or simply outsource all the processing to China or somewhere else.

For all of its supposed expertise, the North Pacific Council blew it big time with crab rationalization, and they are about to do it again in groundfish. Meanwhile the Pacific Council is headed in the same direction, with a strategic plan to reduce the trawl fleet another fifty percent (it was already halved by the federally-supported and industry-supported trawl buyback). This means many ports along the coast that have depended on trawlers for at least the production of flatfish will now lose those vessels (see www.inforain.org/gfr).

Moreover, the current Pacific Council proposal to give west coast processors 20 percent of the groundfish quota also includes no sideboards to ensure the quota given to a processor will stay in the community that the processor quota was intended to protect.

Its bad enough having groups like Environmental Defense Fund mucking about in fisheries they have little knowledge of, but some of our fleet seems willing to blindly go along too, asking no questions, and the regional fish councils (who should know better) are also following in lockstep over this precipice.

Supporting Legislation to Protect Working Waterfronts

In 2007, two Maine Congress people, Senator Susan Collins and Representative Tom Allen, introduced bills to try to address the continuing nationwide loss of working waterfronts – S. 741 and H.R.3223 respectively. Unfortunately, neither of these bills will pass into law this year.

In the upcoming year, with the new Administration and hopefully a more responsive Congress, fishermen need to focus on getting the issue of the loss of our working waterfronts out front again. We need to push our Congress people to address the loss of working waterfronts and the effect it has on our coastal communities, and to help them come up with solutions before it is too late.

Remember also that state Legislatures may also take this issue up, provided local fishermen prod them to do so. Too many coastal states still have weak (or no) protections for working waterfronts even today.

What To Do About It

There are several obvious things that coastal fishing communities can do to staunch some of these problems and to protect their fishing industry infrastructure. Here are some of them:

Maintain Strong and Diversified Fisheries: Protecting and rebuilding locally depleted fisheries should be our highest priority. If these local fisheries are strong, they will support their community infrastructure and provide opportunities for fishermen to make a decent living.

This also means keep a diversity of fisheries going all the time. Then when one fishery naturally diminishes (all fisheries are to some degree cyclical), there are alternative opportunities on other stocks available to keep the community going.

Increase Flexibility With Cross-Fishery and Cross-Boundary Permits: The trend in recent years has been to make access to each fishery more rigid, based on limited-entry permitting and, of course, state-by-state permit systems that do not easily allow a boat owner to participate in multiple fisheries across state lines.

However, in these hard times of rapid and often unpredictable change, fishery management should be more flexible, not more rigid. Fishing effort can be just as easily controlled through other means than excluding otherwise qualified boats and fishermen because they do not fit a rigid profile of past landings or state residence. This would also broaden the economic support for any one port’s infrastructure over more fisheries and a wider geographic area.

Creating Real-Time Monitoring and Permit Buyback Programs: If the size of the biomass supporting a fishery shrinks suddenly for any reason, there needs to be an automatic mechanism already in place and pre-funded that can rapidly buy back some of the excess catch capacity from willing sellers so that the harvest capacity matches the harvest available, and thus provides a decent livelihood for each remaining participant. As it is, basic fisheries monitoring is so poor that it can be years before the science catches up with what is actually happening at sea — and several more years before fisheries management policy catches up with the science.

This is just how the Pacific groundfish fishery collapsed. For nearly two decades, people were encouraged through various federal financial incentive programs to build more boats to catch groundfish — but it was not until nearly 20 years later that the basic science was done to determine what the sustainably allowable catch actually was. That biological limited turned out to be much lower than the capacity built to catch it.

By that time, however, a whole lot of over-fishing had been done, quit by accident, and the whole west coast groundfish fishery was on the verge of collapse. The draconian measures that had to then be put in place to rescue these depleted stocks was a typical example of this kind of dysfunctional “boom and bust” management.

We have to do better, and one secret to that is to properly fund and do the necessary stock assessment research before the build-up of a fleet, not afterwards when it is too late to throttle back without great economic pain.

The flip side of this type of real-time monitoring coupled with speedy demand reduction would be to give more permits out (via auction or lottery for instance to already qualified fishermen) whenever a once-depleted stock has recovered — again, based on real time research and stock assessment data collected in an on-going process. In this way, the fleet size could be “right-sized” quickly and efficiently to match the sustainable harvest levels, avoiding the old boom and bust types of crises by reducing even accidental over-fishing quickly and smoothly.

Place Strict Sideboards on Quota Programs: If private quota systems have to be used at all (and those instances should probably be rare), there have to first be strict control sideboards and firm standards put in place to prevent consolidation, geographic migration of quota ownership that leaves quota-dependent local ports abandoned, and to prevent speculation from artificially driving up the share prices.

Fully and permanently privatizing these quota shares would also be a major mistake — once these quota shares become unfettered property rights, it would be next to impossible (and expensive) to recapture and retire them if things in a fishery started to go wrong.

Financial speculation in quota shares is also a serious fear. There would be nothing more destructive to a fishing community than for large numbers of their local catch quota shares to wind up in the hands of banks and speculators, turning fishermen into mere serfs of these big financial institutions which — as we have recently seen — can be badly mismanaged and go bankrupt, potentially dragging whole quota-dependent fishing communities with them. Quota shares should be held only by working fishermen, and not usable as collateral for loans or other purposes.

To date little more than lip-service has been given to another type of quota share program, this model intended to keep quota within a fishing community to benefit that community. These alternative programs are called “community development quotas” (CDQs), and should be further developed as an alternative to the usual individual ownership types of quota systems. CDQs may be far more effective at keeping fishing communities economically viable and intact than highly transferrable quota systems based solely on widely migratory single individuals.

And most especially, there should be no processor ownership of quota shares allowed for any shares by any means. Processor-owned shares are a terrible idea. In addition to being an inherent violation of numerous anti-trust principles, they turn independent commercial fishermen into little more than sharecroppers beholden to processor monopolies controlled by a handful of suddenly rich big-wigs who could make or break competing fishermen on a whim — simply by manipulating processor prices.

Even the Department of Justice’s Anti-Trust Division of the Bush Administration vehemently opposed the BSAI crab rationalization processor quota IPQ idea, warning of consolidation and price-fixing — and that is in fact what is happening in that fishery, and to places like Adak, Alaska. Unfortunately the anti-trust experts’ objections were over-ruled and a specific exemption from national anti-trust laws was passed in Congress for this purpose.

Pass Laws To Protect Working Waterfronts: As noted above, many coastal states still do not have sufficient protections for working waterfronts to protect them against encroaching development. Even California’s, which is probably the strongest, needs some improvements. Local land use and zoning laws could also be of some assistance in protecting these port facilities from future development.

It should be a high priority for fishermen to pass bills like S. 741 and H.R.3223 in the next Congress. But until Congress acts, if ever, we should still be pressing our local state Legislatures for similar relief.

Develop a Long-term Local Port Business Plan: And finally, every fishing port should have a long-term waterfront land use and infrastructure development business plan specifically to support local fishermen and their industry. Few actually do. Needless to say, such a business plan should be developed with local fishermen’s full input and participation.

If your port has not developed such a business plan, start agitating your port officials and Commissioners to develop one — including plans for developing and maintaining all the necessary infrastructure to keep your port a working commercial fishing facility well into the foreseeable future.

Remember: a viable long-term fishing future will not just “happen.” It is made and shaped by what we are doing today.

Zeke Grader is the Executive Director of the Pacific Coast Federation of Fishermen’s Associations (PCFFA), the west coast’s largest trade association of commercial fishing families. Sara Randall is with the Institute for Fisheries Resources (IFR), a PCFFA affiliate, working out of its San Francisco office. Glen Spain is PCFFA’s Northwest Regional Director. PCFFA can be reached at its Southwest Office at PO Box 29370, San Francisco, CA 94129-0370, (415)561-5080, and at its Northwest Office at PO Box 11170, Eugene, OR 97440-3370, (541)689-2000, or by email to: fish1ifr@aol.com. PCFFA’s Internet Home Page is at: www.pcffa.org.