Fishermen show 'staggering' level of interest
in latest buy-back plan

The Daily Astorian May 8, 2001

Severe harvest limits have been imposed to preserve West Coast groundfish species. Tough measures will be needed to save the groundfishing industry as well, a fishing expert told local boat owners last week.

Pete Leipzig, director of the Fisherman's Marketing Association, spoke Friday at the Port of Astoria on a proposed vessel buy-back program designed to cut the size of the groundfishing fleet in Oregon, Washington and California by half.

"The worst thing is that we have an economically unhealthy fleet," he said. "This has got to be turned into a good business again."

The buy-back proposal is intended to reduce the "over-capacity" plaguing the groundfishing fleet now that harvest levels for rockfish, ling cod, perch and other species have been cut dramatically by the Pacific Fishery Managing Council, the federal agency that oversees West Coast fish harvests.

The "Transition to Sustainability" plan presented by the council last year offers a variety of measures for helping restore the groundfish fishery, which was declared a federal disaster in January 2000. Centerpiece of the plan is the proposal to buy the boats and fishing permits of one-half or more of the West Coast groundfish fleet.

Leipzig and his Eureka, Calif.-based marketing association were given the lead role in developing the proposal. His Astoria appearance was the last in a series of presentations held in fishing communities up and down the West Coast, while efforts get under way to Congress to secure funding for the program's estimated $50 million cost.

The proposed program differs from earlier buy-back plans in that it sets a goal of reducing the harvest capacity of the groundfish fleet by between 45 and 60 percent, Leipzig said. The boats remaining after such a reduction could operate economically within the new, lower harvest levels imposed by the fishery council.

The interest in such a program is there, he said. A survey sent out to almost 500 boat owners found that 72 percent of trawling permit-holders expressed an interest in selling their boats. Almost half of the others, longline and pot fishers, also said they might take advantage of the program.

That "staggering" level of interest, he said, comes despite the fact that the program would require owners to sell not only their boats but all their fishing permits, for groundfish and all other types.

The all-or-nothing provision of the plan was included to prevent "spillover" into other fisheries, which was a source of complaints about earlier buy-back proposals. Shrimp and crab fishers argued that people who surrendered their groundfish permits would simply switch to other fisheries and put pressure on them.

Much of the public meeting process has involved rumor-control, Leipzig said. Many people attending the meetings have come in "looking for a fight," he said, but after hearing an explanation of the proposal have said they have a better understanding of it, even if they don't embrace it.

One of the biggest rumors surrounding the proposal is that it amounts to a bail-out of the groundfish industry by crab, shrimp and other fishers. That's because half of the $50 million price would be paid by those boat owners who remain in business.

That cost would be covered through a long-term loan paid back by people in those fisheries that benefit from the reduction of the groundfish fleet.

Many people in groundfishing also hold permits for other fisheries. Since they must surrender those permits along with their groundfish licenses if they take part in the program, that will mean fewer people harvesting shrimp, crab and other types, Leipzig said. That is the reason people in those industries would foot some of the bill.

"There are real benefits through capacity reduction through this program," he said.

In most cases shrimp, crab and salmon fishers will be charged only small fraction of the industry's share of the program's cost - less than 2 percent - but could reap considerable benefits, Leipzig said. In Oregon, for example, the boat owners identified as willing sellers in the survey account for more than a quarter of the local shrimp harvest, he said. The cost to shrimp fishers to buy the permits from those owners - through the long-term loan would amount to an extra fee of three-tenths of 1 percent of their sales.

Charging other boat owners for part of the program cost is also a matter of politics -lawmakers showed little interest in the proposal when it was pitched as a wholly government-funded program, Leipzig said. A plan with a 50/50 split gets a better reception.

The buy-back would work through a reverse auction in which boat owners would submit bids for their vessels. Each bid would be assigned a score factoring in the bid price with the boat's most recent earnings - the higher the earnings in relation to the price, the better the score and the more likely the bid will be accepted, Leipzig said.

Without a voluntary system like the boat buy-out program, people in the industry may instead get hit with a mandatory fleet-reduction plan, such as a "permit-stacking" scheme requiring each boat to carry two fishing permits, Leipzig said. PFMC officials have said such a plan is likely to go forward if the buy-out proposal dies.

Some in attendance at Friday's meeting said the buy-back plan has merit.

"This is a lot better system than being forced to stack permits," said Steve Finzer. "I would rather pay a 3 percent assessment than be forced to buy another permit."

Boat owner Fred Hamann said the buy-out is something he'd consider. Small-vessel fishers like him are being squeezed out by the bigger boats, which are seeking fish closer to shore.

"If I got a reasonable settlement, my son could go to college, and I could go into another business," he said.

Norman Kujula said he didn't support the idea of having other boat owners pay for the program. Companies in other industries that have faced major reductions, such as timber, haven't been charged to buy out their competitors, he said.

Last year a "snapshot" survey of the local groundfish fleet estimated that most of the four-dozen Astoria-area groundfish vessels faced bankruptcy due to the latest harvest restrictions.

Some at Friday's meeting, including an aide to U.S. Rep. David Wu, D-Ore, asked how the calculations on the cost to other boat owners would read if more limits are handed down.

The goal of the program is to provide ample harvests for the remaining operators, but Leipzig admitted that a pledge of abundant yields is something no one is in a position to offer.

"I will not guarantee things in the future will not change - new, lower quotas, or marine reserves," he said. "I hope we've hit bottom, and that things will improve, but I can't guarantee it."

Wu is supporting legislation in the U.S. House of Representatives to provide the necessary federal funding for the program. In the U.S. Senate, Ron Wyden, D-Ore., has agreed to push for money there.

The government will not actually take possession of any of the purchased boats, Leipzig said. They would remain the responsibility of the owner, who could scrap them, convert them, donate them to a university or other entity, or find other uses as long as they do not involve any kind of fishing. If an owner intended to scrap the boat, the cost should be factored into the asking price, he said.

Onno Husing of the Oregon Coastal Zone Management Association said the buy-back program could give people in the industry a bigger voice in fisheries policy by showing that people in the industry are taking steps themselves to address the problems.

"This is the best ammunition to the folks back east who don't understand our communities," he said. "We can say we have a fleet that matches the resource."