S OREGON Fish & Wildlife Report to the Legislature on the Oregon Ocean Crab Fishery License Limitation Program S February 4, 411997 1997 Marine Resource Program - Fish Division Administrative Services Division Oregon Department of Fish and Wildlife Portland, Portlando Oregon
Report to the Legislature on the Oregon Ocean Crab Fishery License Limitation Program Background The 68th Oregon Legislative Assembly found the Oregon ocean fishery to be overcapitalized and economically unstable due to excessiveffort effort In order to prevent further destabilization, the Legislature created a restricted participation, or limited entry system for the fishery in HB 3094 License limitation for the Oregon ocean fishery was implemented December 1, l,1995 The bill also required Oregon Department of Fish and Wildlife (ODFW) to submit this report to the 1997 t997 Legislature on: o The number and characteristics of vessels participating in the ocean fishery o Information regarding transfers of permits authorized by the Act o Actions of the Commercial Fishery Permit Board and Fish and Wildlife Commission Recommendations are provided on determining optimum fleet size and the need, feasibility, structure, and implementation of an industry sponsored permit buy-back program Number of and Characteristics of Vessels Since the program was initiated,454 permits have been issued, 9 additional permits were waiting to be issued and2 2 more were waiting for transfer This includes permits issued after appeal of denied permit application Of the 454 permitted vessels, 341 made landings during the 1995-96 season (Table 1 and Figure 1) l) Catch during the 1995-96 season totaled 177 million pounds Only 58 million pounds have been landed since the opening of the 1996-97 season, and early indications are that catch will be much reduced cver over previous seasons' catches ijw jip,,, j' L <30 41' 79 4 4l 30-50 258 202 >50 t12 S 97 Unknown 16 r I 6T ' S 239 76 'S A 4 Total 465 341 380 BISI Length (ft) Horsepower Tons 43 45 42 241 249 225 aa '4 30 '4 '41 2l
Average length, horsepower and tons were similar for permitted vessels and vessels actually making landings There was a higher percentage of permitted smaller boats (less than 30 ft) f0 that did not make landings compared with larger boats On average, the present day fleet is comprised of larger vessels with more horsepower, compared with average fleet size during the five years previous to limited entry 't 160 140 120 100 80 60 40 20 0 ga f,arorou, U) U It It) It) lolo,,l It) U) (!rtt?9t?9o)c orf(grcr@lororoa= A r(\lc,t(t(ltn@ Ii C& C) It) (D N V It) D N C) C) C Length Category (feet) DPermits With Landingsj Figure 1 Number of vessels with Oregon permits and number of vessels actually making landings during the 1995-96 season, by 5 foot increments Increases in the number of permits over typical average fleet size is a characteristic of new limited entry programs, whereby qualifying criteria tend to be broader and more inclusive (OSUESG, OCZMA, OCT,Jv IA, and ODFW, SB 938 Limited Entry Study Final Report to Senate Agriculture, Natural Resources and Environment Committee and Oregon Fish and Wildlife Commission, 1995) Transfer Activity Activitv and Actions of the Permit Review Board Of the 85 appeals of initial permit application denials heard by the Permit Review Board, 54 were denied Nine applicants have appealedenials by the Review Board to the Oregon Court of Appeals Eighty-three Eighty+hree transfers of permits were effected by the Department, prior to the opening of the 1996-97 season on December 1st lst Administrative Rules Oregon Administrative Rules (OAR 635-006-1000 through 635-006-1210) were adopted in 1995 and amended in 1996 to implement portions of the limited entry program for ocean The rules are summarized as follows: Annual Renewal Requirement: Payment of $75 annual fee and application by January 31 3l of the year for which permit is applied for are the only requirements for renewal of ocean permits o Transferability ofpermits: Landings of at at least 500 pounds of ocean in each of two fishing seasons in a 60 month period are required in order to transfer a permit The length of the vessel receiving a transferred permit is limited to no more than 10 feet greater than the vessel a
permit is transferred from Overall length of a vessel receiving a transferred permit cannot exceed 99 feet in length Vessel permits qualifying under (4)( (4XlXd) 1 )(d) of Chapter 484 may only be transferred to vessels 26 feet in length or less A vessel owner has up to two years to transfer the permit to a replacement vessel if the original vessel is destroyedue due to fire, capsizing, sinking or other event o Commercial Fishery Permit Board The Permit Board may delegate authority to the Department to waive eligibility requirements for ocean fishery permits under certain circumstances o Vessel Length Modffication Modification Vesselength modifications were restricted to no more than a 10 l0 ft increase for each 60 month period The Board and Department staff recommended several housekeeping rule changes to the Fish and Wildlife Commission November 1,1996 1996 These changes were based on Board experience with appeals, and the need for further interpretation of statutes and Oregon Administrative Ruies Rules (OAR) The OAR's adopted were consistent with actions taken by the Board The following is a summary of the rule changes: Under construction and completion for purposes of eligibility in the ocean fishery were defined Under construction for purposes of initial eligibility for an Oregon ocean permit pursuant to ORS 508931, means that between December 1, 1988 and August 14, L4,1991, a contract was signed and earnest money paid equaling 10% l0% of the value of the contract, or invoices had been paid for 10% l)vo or more of the total construction cost, to produce a newly newlv constructed vessel, including, but not limited to, the laying of the new vessel's keel o Completion of a vessel for the purposes of initial eligibility for an Oregon ocean permit pursuant to ORS 508931 is defined as: (a) a date identified in a contract document as the proposed or actual date of completion; or (b) the date an insurance policy was in effect covering covedng the vessel for loss or liability; or (c) the date of inspection for certification by the US Coast Guard; or (d) other written documentation acceptable accepiable to the Departmenthat that establishes the actual date the vessel was completed for the purposes of entering the Oregon ocean fishery o The ocean fishery forpurposes of ORS 508926, means all fishing for in Oregon waters of the Columbia River and all other ocean water seaward of Oregon's coastline and river mouths Single delivery licenses may not be substituted for a boat license for the purpose of initial eligibility for an ocean fishery permit However, a vessel with an Oregon ocean permit may use a single delivery license up to two times per calendar year, in lieu of a boat license Transfer of permits: To qualify a permit for transfer, vessels are required to land at least 500 lb of ocean in each of two fishing seasons in the last five seasons, which includes landings made during any season open at the time of application 4
Optimum Ontimum Fleet Size and Fleet Reduction Programs Determining the optimum fleet size is usually the first step in developing a fleet reduction program, when needed A determination of optimum fleet size involves estimating harvest capacity, projecting future expectations of harvest levels, measuring impacts on other fisheries, and working with the affected users to determine a target fleet size (OSUESG, OCZMA, and ODFW, 1995) The numbers of limited entry permits (fleet size) is usually expressed in statute law (troll salmon, gilinet gillnet salmon, ocean shrimp, scallop) although some are in administrative rules (herring, sea urchin, and developmentai developmental fisheries) The fishery is a notable exception While qualification criteria and the result of appeals of denied permit applications will eventually determine the numbers of ocean permits, no target fleet size has been determined by the Legislature or by the Oregon Fish and Wildlife Commission Fleet reduction programs in Oregon have, or have had three different forms: o Renewal Requirement: Establishing a permit renewal requirement is the simplest form Failure to meet the requirement results in a reduction in the available permits These programs are usually tied to a lottery which is held when the numbers of permits renewed fall below the target level expressed in statute or rule Currently, all Oregon limited entry systems employ this method, except there is no lottery provision for the fishery o Combine Permits: The sea urchin fishery adds an additional provision for purchase by an individual of three sea urchin permits to make one permit o Buy-Back Programs: In the past, Oregon participated in a vessel permit buy- Sback program to reduce the number of salmon gillnet permits, in cooperation with Washington Department of Fish and Wildlife using federal funds available through the Salmon and Steelhead Conservation and Enhancement Act of 1980 The Columbia River gilinet gillnet buy-back program allowed for a faster reduction rate, than through attrition (failure to meet renewal requirements) The maximum rate of natural attrition was 6Vo 6% after 572 permits were issued in 1980 In the second year of the buy-back program in 1983, 15% l5vo of the permits were purchased and2vo 2% lost due to attrition Buy-back programs can be cost effective to the state if excess fleet capacity exists to harvest a resource Savings to society sociefy come through a reduction in costs to harvest a resources (ODFW, 1987) A cost benefit ration of 22:1 22:l to 28:1 was achieved over the course of the Columbia River gillnet buy-back program from 1983-86 Federal assistance for this program was obtained through PL96-949 in support of the goal to "obtain and ensure an effective and expeditious reduction in the overallfishing capacity of the number of vessels and licenses in in the non-indian commercial salmon ftshing fishing fleets" 5
o Fleet reduction through attrition has been recommended to the Legislature as the preferred method for commercial fisheries (OSUESG,OCZMA, and ODFW, 1995) An annualanding requirement has been used as a means of reducing speculative use of permits and reduction of unused permits When limited entry housekeeping rules for were considered December or 1996, the public and Commission heard options for imposing a landing requirement for permit renewal There was not strong support for a landing requirement in the ocean fishery, as it could force additional fishing effort into the fishery The Commission rejected the option of adding a landing requirement Landings are required to qualify a permit for transfer, however Need and Structure of a Buy-back Prosram Program for the Dunseness Crab Fisherv Fishery It is easy to demonstrate that excess harvesting capacity exists for the available ocean fishery Between the 1950 and 1960, a fleet with an average of less than 100 boats fishing a total of 20,000 pots was capable of landing between 6 to 11 I 1 million pounds Between 1980 and 1990 a fleet in excess of 300 vessels fishing an average of 97,000 pots landed a similar amount with a dramatic decline in the average catch per boat (Demory, 1990) Recent decisions by Federal Courts have resulted in allocation of ocean resources in Washington State to tribal entities This decision has the potential of dislocating fishers in a manner similar to salmon fisheries During the last session of Congress, the re-authorization of the Magnuson Act established the ability abiiiry for states to extend their jurisdiction beyond state territorial teritorial seas to enforce selected rules, not including gear and limited entry rules regulating ocean fisheries The same legislation also began a process to review need for the development of a federal fisheries management plan In any case, tribal needs will be accommodated by extended jurisdiction by the State of Washington Washington" Current active fleet size is comparable to recent average fleet size The number of pots used by the fleet continues to increase During a survey of the fleet in 1992 l992by the Pacific States Marine Fisheries Commission, 57% of Oregon respondents indicated that there were too many boats in the fleet, while 43% 437o felt fleet size was about right Harvesters were asked how they felt about a buy-back program for the fishery at informal 'townhall 'townhall meetings' held along the coast October of 1996 Most were concerned about the high level of effort Others suggested waiting to see what happens for a few years before developing a buy-back program They pointed out that the cost of permits is very high presently These costs should come down if abundance goes down Possible ways of funding a buy-back program were also discussed at the meetings If a buy-back program were recommended for Oregon's fishery, the Department recommends it be patterned after the Columbia River Gillnet Gilinet Salmon Fleet Reduction Program Namely, the Department should solicit offers to sell permits from eligible harvesters and then purchase permits starting with the lowest offer price, proceeding in order through ascending offers up to and including a maximum purchase price established by the Oregon Fish and Wildlife Commission This method pays fair market price to the permit holders according to what they think the permits are worth and allows the Departmento to purchase the maximum number of permits per dollar expended (ODFW, 1987) r1
Recommendations: o As As a a consequence of of changes in the Magnuson Act, staff anticipates pending action by the Pacific Fishery Management Council working in concert with state agencies to develop a management plan for the ocean fishery Staff recommends Department participation in this process o Staff recorrmends recommends deferring consideration of issues such as optimum fleet fteet size, methods for fleet reduction, reciprocity, and allocation until a planning process is underway underway o Currently, no action is recommended on establishing a buy-back program Fleet reduction through a buy-back program should be evaluated at such time as needs are identified through a planning process or when federal funds may come available S
References Demory, D 1990 History and status of the Oregon fishery Oregon Department of Fish and Wildlife, Newport, Oregon ODFW 1987 Final summary report: Oregon Columbia River gillnet salmon fleet reduction program, 1983-1986 Oregon Department of Fish and Wildlife, Portland, Oregon OSUESG, OCZMA,and ODFW 1995 SB938 58938 Limited entry study final report to Senate Agriculture, Natural Resources and Environmental Committee and Oregon Fish and Wildlife Commission Oregon State University-Extension Sea Grant, Oregon Coastal Zone Management Association, and Oregon Oregon Department of Fish and Wildlife, Newport, Oregon PSMFC 1993 A Areview of of the California, Oregon, and Washington fishery A report of the Pacific States Marine Fisheries Commission pursuant to National Oceanic and Atmospheric Administration Award No NA89AA-D- IJ095, 1J095, Gladstone, Oregon