It’s Time to Rethink “Catch Shares”

Gentner: It’s time to rethink ‘catch shares’

Catch shares in marine fisheries is a concept unfamiliar to most people, and it is probably completely alien to most hunters and anglers in this country. It is a system of wildlife management that bestows some percentage of a public marine resource, like red snapper in the Gulf of Mexico, to private businesses for free, to use and sell for their own profit. It was thought that by giving away ownership rights to individuals, the fishery would consolidate and ultimately become easier to manage. While the same number of fish would be caught, the benefits of funneling access to the resource through fewer entities was thought to remove some of the uncertainty in the industry and thus would be worth the price of privatizing a public resource for free.

While catch shares are still the darling of some fisheries economists, there is a growing backlash against this management tool worldwide for a variety of reasons. At the heart of these complaints is fleet and wealth consolidation, extraction of public wealth for private profit, and failure to capitalize share-cost into production costs.

Within the past two years, two small-scale fisheries organizations, the World Forum of Fisher Peoples and the World Forum of Fish Harvesters and Fish Workers came out in opposition to a large World Bank investment initiative centered around rights-based management. These small-scale fisherfolk organizations oppose “ocean grabbing” because it destroys communities and consolidates the fleet and the fishery wealth in too few hands. In addition to these grassroots resistance efforts, there have been several scholarly articles published that state that the only real guaranteed output from catch shares is capacity reduction through consolidation. And while reducing capacity is the key to reducing overfishing, it is not a sufficient condition to improving biological outcomes. In other words, there is no guarantee that stock will be conserved, but a definite guarantee that the industry will shrink, generally damaging coastal communities.

Beyond the consolidation problem, as we’ve seen in the Gulf red snapper commercial sector, these systems create “quota barons” who pay their harvesters laborer wages in order to increase their profits or lease out their quota to other fishermen or new entrants. First-generation quota holders paid nothing for the public resource, and this failure to capitalize the share value as a cost in the production of fish by quota holders is actually distorting quota markets and changing incentives. When the quota is given away to the first generation of fishers at the inception of a catch share, the subsequent generations of fishermen essentially become fishery sharecroppers forever.

Here in the energy capital of the world, it is especially difficult to believe an agency of the federal government gives public resources away for free to private businesses, but that is exactly what NOAA Fisheries is doing, and all while under the auspices of the U.S. Department of Commerce. Unlike the auction system that governs just about every other public resource – oil and gas, timber, airwaves – all of the resource “rents,” or profits, that should belong to the American public from our shared marine fisheries and should be generating wealth for years to come get stripped out by a small number of people who forever lock those values up in private bank accounts.

To address this issue, catch-share systems in American fisheries should be reconsidered from the top down. At the very least, these rights should be of limited duration and should be auctioned off regularly. Judging from the backlash coming from other parts of the world and in our own country, it would be entirely appropriate to question whether strong individual rights given away for free have any place in the management of our public resources.

Gentner is president of Gentner Consulting Group and worked eight years as a senior research economist for the National Marine Fisheries Service.

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