NPFMC Considers Requiring Active Participation for Crab Fishery

Who should profit from the Bering Sea and Aleutian Islands crab fisheries?

That was the big question at the North Pacific Fishery Management Council meeting over the weekend.  Answering it generated more than six hours of public testimony and resulted in a vote that split the council.

At the heart of the debate is a practice called quota leasing.

Crab fishing used to be a race.  There was a set amount that could be taken, and vessels competed to get as many pounds as possible before it all ran out. Six years ago, fisheries managers switched over to a system that distributed shares of the harvest to vessel owners based on how much they had caught historically.

For many owners, the share they received wasn’t big enough to make fishing profitable.  Others simply didn’t want to be part of the industry anymore.  The result was a massive consolidation of the crab fleet.  Two hundred and thirty boats fished Bristol Bay red king crab in 2001.  This year, only 62 fished.

But many of the owners who no longer have vessels that fish for crab still own crab shares.  They lease those shares to active boats in exchange for part of the profits.

Anecdotal evidence suggests that in some fisheries, like Bristol Bay, more than half of the total harvest is leased.  Quota holders in that fishery charge boats up to 70 percent for the right to fish their shares.

What that potentially means is that some quota holders receive large profits from their shares, without assuming any of the risk of owning a vessel or actually catching crab.

Councilor Sam Cotten described it as ‘collecting rent’ when he asked crabber Tyler Schmeil whether the practice bothered him.

“Do you care if the people you lease your quota from are active in the fishery?  Does it make any difference to you as part of your business?  Or does it offend you as a matter of policy?  Do you think we ought to make any changes there?”

Schmeil said it didn’t bother him.  And so did crabber Brian Hayworth, who also testified.

“To hear that owners of the boats are sitting on beaches in tropical locations, receiving checks that most of us can only dream of, doesn’t really phase me.  Good for them.  They were truly the ones who took the financial risk of owning their boats, dealing with crews, dealing with insurance companies, before the IFQ [Individual Fishing Quota] program.  And most of these guys pioneered the industry.”

Other fishermen and some Councilors felt very differently about who should benefit.

Tom Suryan is skipper of the Bristol Mariner. He testified that high lease rates take money out of crewmember’s pockets.

“We know traditionally where we started before rationalization, there’s tremendous data to show that.  We know where we are now.  And we also know there is a trend downward over time, especially as more and more crab is leased and there are royalties assigned to that.  It seems to be coming out of the crew share.”

Councilor Dan Hull said he didn’t see any incentive for quota holders to ever sell their shares and let new people into the industry if they could just keep collecting returns.

“The only reason that a corporation might sell, as far as I can see, is if the revenues earned from that quota would be less than what they could earn by investing it in something else.”

As it stands, data on leasing and how it actually affects crew pay and quota turnover is scarce.

motion introduced by Fish and Game Commissioner Cora Campbell asks for more analysis of the issues.  The motion, which passed by one vote, calls for the council to consider an active participation requirement for the fisheries and commissions a study that examines lease rate caps, crew compensation and quota sales.

The Council is expected to take up the issue again sometime next year.

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