Owning the Owner Operator Policy

I read a blog post this week and the first paragraph rang so true to me: how most media stories would lead you to believe that the fishery is on its last legs and a dying industry when the opposite is in fact the case.  What really caught my interest though was that there is a movement in the United States that if new fishing licences are issued, that they be to owner operators. At a time when Canada’s commitment to owner operator fisheries seems to be seriously in question, it’s interesting to see other countries advocating and moving in that direction.

 

Owner operator fisheries means simply that the person who owns the boat and license is the one on the water fishing. While the official policy jargon in Canada will tell you that the Department of Fisheries and Oceans supports owner operator fisheries, the reality of policy decisions over the past two decades that I’ve been in the fishery have resulted in quite the opposite: management has moved towards individual transferable quotas (ITQ’s) which ultimately result in consolidation of access to the resource for a few (mainly) corporate interests who then hire people to fish.

 

So what’s the problem, right? People still have jobs fishing. Well, I guess it depends on how you look at it.

The T. Buck Suzuki Environmental Foundation‘s report “Caught Up in Catch Shares”  looks at the impact of ITQ’s on the British Columbia fishery and has the best diagram to explain the difference between an owner operator fishery and one that requires leasing quota to access the resource:

 

Catch Shares

The above diagram is based on actual case studies in 2012. When boats have to lease quota from another entity in order to go fishing (instead of owning it themselves) maintenance, insurance, and income for captain and crew dramatically decrease as the majority of funds go towards leasing. If it’s an owner operator fishery, it’s the scenario on the left. If it’s not, it’s the scenario on the right.

 

This season on “Deadliest Catch” (or maybe “The Bait”), Josh and Casey talked about how they were essentially hired hands to captain the Cornelia Marie; they no longer owned the majority share in the boat and quota. There was also a brief conversation about how it was different for young people to enter that fishery now; once the fishery went to ITQs, the price of entry skyrocketed. Crab quota had become a commodity instead of a mechanism to access the fishery.

 

Proponents of ITQs will talk about profitability, and vertical integration, and how many people they employ and the value of the fishery. As ITQ’s evolve, they tend to be owned as investments by people further and further from the coast. Owner operator  fisheries are the economic driver in most coastal communities, with much of the money that is earned in these fisheries staying in those communities through spin-off jobs.

 

About a year ago I wrote with some hope about impending change in the Department of Fisheries and Oceans that would see their commitment to owner operator be more than words. They were ready to take action. A year later there has been no tangible reason to think that it was more than just words on paper.

 

Owner operator fisheries create vibrant coastal communities with good economies. New Brunswick’s GDP grew in 2015 on the strength of manufacturing and resource industries (like fishing). Seems like something government should support with more than just empty jargon.

7 thoughts on “Owning the Owner Operator Policy

  1. I was largely unaware of this scenario until lately Bonnie. Your article is excellent. My prayer is that a way to turn the tide back to the owner/operator, becomes evident and evidently necessary to those who can make it happen.

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  2. I would humbly suggest you look into the ITQ system in place in Area 10 Snow Crab. It is an Owner/operator ITQ with accumulation caps, which was a groundbreaking idea which has been studied and copied and other countries. The point it illustrates is that just because a good idea, poorly executed, goes awry, doesn’t mean it can’t be fixed once the flaws are exposed. I often use the analogy of the Ford Pinto. This car famously failed because the gas tank was placed in the trunk, and in rear end collisions, it would explode. Now, this was poor design, no doubt, but Ford didn’t decide to scrap building cars…. they corrected the design, and continued.

    The Lobster fishery is one of the best possible species for ITQ management. They’re easily high graded for maximum value, they regenerate claws, and survive capture and re-release well. If you read examples of SW Australia Cray fishing, they’re tossing overboard $20/lb Cray, because they can get far more for one the market values more. It is a self selecting conservation method without compare. Now, if you’re talking about fish which are killed during capture, or otherwise harmed, high grading is bad, but in our industry, it is actually ideal. So what’s the drawback?

    The biggest issues people have with the ITQ system, are exactly as you outline, accumulation by one individual or company and a fishery which becomes unattainable for young entrants. However, isn’t this already becoming the case in some zones, even under our so called “Owner Operator” Policy? Perhaps, using Area 19 as a pattern, an ITQ system which doesn’t allow limitless accumulation or company ownership would actually make it more accessible to new entrants?

    Let’s say, over the course of my fishing life, I accumulate the maximum level of quota specified by the rules of the fishery, and I wish to sell out. I can then take that quota and split it into manageable chunks and sell it. This would optimize my return on investment and also allow younger entrants to buy smaller lots of quota and build their business up over time, as I did. Let’s imagine you have three children who wish to enter the fishery, you can split it among them, so they can all benefit from your work.

    All I can say is, it is not an idea which should be tossed out with the bath water, and as we as an industry are faced with corporate accumulation and shy-rocking entrance costs, maybe reshuffling the deck and new rules which address these problems is not a terrible idea to explore.

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    1. Thanks for your comments and the information on snow crab management. It sounds like a system that is working for you. In my experience with three specific fisheries (herring, groundfish, and scallop) that went from an owner/operator, competitive model to an ITQ fishery, the result was a consolidation of quota into the hands of large corporations and lost jobs and incomes in my community. I agree that the concept of an accumulation cap could address some of those concerns, but I have little faith that if the Department will not enforce owner operator that it would be likely to enforce a cap.

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  3. ITQ does not necessarily lead to corporate ownership. The Snow Crab fishery in parts of the Gulf of St Lawrence have been ITQ for 25 years and STILL are Owner operator. The quota share is no different from a lobster trap limit AS LONG AS THE OWNER of the enterprise is on board actually doing the fishing. It is a matter of design of the systen. O / O and ITQ are not at all imcompatible if O / O is enshrined in the access / allocation system and aggregation limits are also helpfull so that the fishery is not monopolized by individuals and O /O is in place to ensure that actual fishermen actually fish. I am very tired of hearing the false argument that the whole ITQ system is bad based on some poorly designed systems elsewhere.

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    1. Thanks for you comments. I appreciate that there are different experiences in different places. My experience with three fisheries (scallop, herring and groundfish) that moved to an ITQ system was a loss of jobs and income to my community. I agree with you that entrenchment of owner/operator is vital in fisheries management.

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  4. Thanks for the nice article, it hits close to home as my family were once vessel owners in Gloucester, MA. Our port never went the way of “factory ships” thankfully, buy our owner-operators are just hanging on in the face of heavy regulations.

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