Untangling Catch Shares with Lee van der Voo

by Ryan Nebeker

Published: 12/06/22, Last updated: 12/06/22

Overfishing is a huge problem, one that requires sound policy to regulate. Over the course of the twentieth century, several important fisheries collapsed, leading to the United States developing policies to regulate it. These policies have earned the U.S. a good reputation when it comes to fisheries management, with a successful record of preventing overfishing and rehabilitating fish stocks in recent decades. But as we explore in our new FoodPrint of Wild Seafood report, not all management strategies have been a success for fisherpeople and their communities. The development of catch share programs, which privatize access to fisheries and limit who is allowed to use the ocean’s resources, are of particular concern.

Read Our Report The FoodPrint of Wild Seafood

In order to understand how catch shares have changed fisheries and fishing communities across the U.S., we spoke to journalist Lee van der Voo, who covered the topic extensively in her book “The Fish Market.”

Can you explain the basics of how a catch share program works and how it differs from other ways of managing fisheries?

Every fishery has only a certain number of fish that can be caught in any given year, and that’s to ensure that the next year there are still fish, so most management strategies cap the allowable catch. The manner of capping the catch, if you will, is what changes. And catch share systems are one way of doing that. And they do it by taking the pie of all the fish that can be caught in a year, dividing those slices and then giving them away in ownership, almost like private properties to qualifying fishermen, sometimes companies. Essentially it’s a process that ensures hard caps on the fish that can be caught and it gives fishermen a lot of discretion over when to catch. So there are a lot of arguments about how it makes fishing safer, but creating that private annuity out of fishing has essentially turned the market on its head.

Not every fishery is under a catch share program. What are some of the big ones that we know and recognize when it comes to fish that’s on our plates?

Most whitefish off the East coast are in a catch share. Alaskan crab is famously in a catch share, along with red snapper and grouper in the Gulf of Mexico. So is the clam supply in New England — the chopped clams, the clam chowder clams, the little bits of fried clam that are so popular. Those are the big ones that come first to mind.

Where did this kind of push towards this system come from and how these programs got implemented?

The largest push toward catch shares came from the environmental community. There were a handful of groups, most notably the Environmental Defense Fund, that were really pushing this concept as a best-case scenario for creating more sustainability in American fisheries.

At the time, there certainly were issues there that really needed to be addressed. Some of the fisheries were being controlled by narrowing the window of time in which fish could be caught. And it was so derby style and crazy that one fishery had an actual starting gun that would be fired and people would race off to the ocean and catch as much as they could.

That just led to a lot of environmental damage and safety issues, because when people are rushing, if their gear gets tangled, they’re not going to sort it out. They’re going to cut off their ropes and leave them in the ocean to ghost fish [when abandoned gear snares fish and other wildlife] and move on. People in crab fisheries were piling their boats so high with pots that they would capsize and people would drown.

Terms to Know
Ghost Fishing Gear
Abandoned gear that still snares fish and other wildlife.

It was really terrible, and of course the product was not good. It would just be pounds and pounds and pounds of fish piling up on the dock waiting to be processed, which is why, 15 years ago, you would find a fish like halibut in the freezer aisle, flash frozen in some kind of square because there wasn’t much else you could do with that volume.

So the idea was to give fishermen an ownership stake in the fishery and that they would take care of it. They’ll be good stewards because they’ll have an investment interest into the future. And in that they can be better stewards of the ocean, they can be better stewards of the product. But the idea behind it was maybe a bit naive: like if you give everybody a house, it automatically means everybody’s going to cut their grass. And that’s just not true. Not everybody’s going to cut their grass. Not everybody’s going to be a good neighbor. Some people are going to become landlords! And that’s essentially what happened.

What determined who got shares versus who didn’t, and how has that shaken out in terms of winners and losers for fishing communities and others?

Well, who got what was determined in the end by regional fishery management councils that control the fisheries in America. There are eight of them around the country, and they’re like any other governing body in that they’re populated by people who have an interest of some sort in the fishery, and sometimes that interest really affected the direction of the catch shares.

Some were wired more in favor of industry, and some more in the environmental direction, because you do see folks with environmental interests on those councils. But as we usually see in the capitalist experiment that is America, any system shaped around private ownership eventually retools itself in the direction of the deepest pocket.

I was reporting back in 2014 about how Lion Capital, a British private equity firm, was kind of the first to snatch up ownership of the ocean in the United States by purchasing Bumblebee Foods, which at the time owned Snow’s, famous for the creamy white clam chowder. Snow’s was the holder of about 23 percent of the clams that dominate America’s canned clam industry. And those rights migrated overseas to a British private equity firm in that one sale.

So these are the folks that have begun to gain control of the fisheries. I recently saw some great reporting by the New Bedford Light and ProPublica about how the billionaire Dutch family that owns Blue Harvest Fisheries has emerged as a force in groundfish fishing off the coast of Massachusetts.

These are very wealthy, powerful equity groups and corporations that are acquiring access to the fisheries and passing the cost of owning them and fishing them onto fishermen. There’s been profound disenfranchisement of people who used to have a more personal stake in fishing and seafood. Everyone from indigenous communities in Southwest Alaska whose history with halibut goes back to the beginning of time to small-boat, family operations around the United States everywhere have been losing access. Whole communities have fallen apart over that.

Are they still employing members of those same fishing communities? And is the main change the ownership or have they also slimmed down the entire operation?

These operations have definitely become more consolidated and there are fewer jobs for sure. Economists like to refer to it as economic efficiency. What essentially it means is bigger boats with fewer people fishing, right? You know, maybe it’s not particularly economically efficient on a global scale to have a lot of little boats fishing, but there are a lot of folks whose jobs that was who would argue that that was working out just fine.

I’ve heard people describe what has happened to those jobs as the creation of a cubicle on a deck, right? These used to be family businesses staffed by generations of uncles and cousins, and they would go out to sea in a boat that they owned and fish for their living.

And sure, they can still get a job fishing for Blue Harvest or some equity group if they rent the right to go out to sea. But there are cases where those fishermen are paying 80% of the catch just to rent the right to go fishing, so the economic outcome is certainly not the same for those people.

Have any reforms to catch share programs — like ownership caps on shares — managed to avoid or reduce this economic harm?

In my reporting, any time that I have come across a rule that’s intended to keep boots on deck and keep deep pockets from getting ever deeper, there’s a game to be played to circumnavigate it. I have not seen where that’s been effective. There’s just no enforcement.

How has the implementation of catch share programs changed what we see at the grocery store in terms of price and availability?

From a consumer perspective, the business of pre-assigning catch is a huge win because it allows the marketplace to be a steady thing. There’s no longer a season for this or for that, because really only fish that migrate have seasons. The rest of them are there all the time. What we’d gotten used to as a seasonal adjustment was really just artifice in a lot of cases from management councils limiting seasons before catch shares. Now, for example, you can get halibut any time of year, and that’s the best example that I have of a fish that went from being a hideous frozen brick to a white tablecloth fish.

Of course the price changes with that too. You might have paid some very, very low sum for the frozen brick. Now maybe you’re going to pay prices up in the $28, $29 a pound for that fish fresh-caught. These products really should have always been more valuable, since it’s people going out on the ocean and hunting the last wild protein source in the world and bringing it to your table. But when most of that increased cost is captured by folks who have absolutely no relationship to the job of providing that fish, that’s worrisome. The consumer is absolutely padding the profits of equity firms overseas at this point. I used to have a calculation that it was only something like 62 cents a pound of that $28 halibut actually went to the fishermen. The fisherman’s share of the dollar is scary low.

With some catch share programs running for more than 10 years now, do we have solid data on whether or not they’ve delivered on ending overfishing, cutting back on bycatch and other issues?

I think any hard cap on catch absolutely delivers on environmental outcomes, and a preassigned catch — saying, “Hey, you have this much to catch over a year” — is safer, does make better products, and the environmental outcomes are certainly there, at least to the extent that the science that’s built into it is accurate, right? That’s always a little dodgy when you’re talking about fish. We know precious little about what’s actually going on in the ocean.

So to that extent, pre-assignment and hard caps on catches can be effective, of course. But does it need to be a private property? That’s the issue here. There are ways of pre-assigning and capping catch in systems that aren’t about trading them later on private markets. There are examples in state fisheries where, when a person decides that they want to stop fishing, that share is retired back to the community and potentially goes to a younger fisherman. There are ways of keeping these things in the family as well that people undertake. But without that, granting these rights in perpetuity essentially means that the share is like a house or a car. Much like you can rent your house and just disappear and go do something else, you can rent your right to go fishing. And that is essentially what’s denying younger people opportunities and opening the door to private equity groups to come in and make an offer that is too good to say no to.

"These are devastating outcomes for communities who cannot hang on. It's not just losing the family business, losing the job or getting a divorce over whether or not you stay in or get out. It's about whether the whole town can hang on."

Lee van der Voo

Author, "The Fish Market"

There are communities that have tried to navigate that. In Petersburg, Alaska, for example, I saw a lot of community discussion about strategic divestment, how to keep assets in the community, how to make sure that a place like Petersburg retains its economic hold as a fishing community.

And there are a lot of downstream consequences to that not being the case. It matters whether or not there’s fishing activity in a community to maintain boat storage, boat repair services, bait, ice and processing facilities, and all those things in turn translate to whether or not you’ve got enough people paying taxes and kids in the schools.

These are devastating outcomes for communities who cannot hang on. It’s not just losing the family business, losing the job or getting a divorce over whether or not you stay in or get out. It’s about whether the whole town can hang on.

It impacts tourism too. People really value going to these little towns and seeing all these beautiful small boats and docks. It’s such a part of our history that we know very little about culturally, sometimes, and what’s sad about it is that most of the non-fishing population of this country is only noticing when the boats are gone and the town isn’t as cute anymore.

You know, you’re there to play ski ball and there’s not much else going. That’s the evolution here. There’s only so many cute little boutique hotels that can sustain what used to be a fishing town.

As equity groups and others have more and more of a say in fisheries policy making,  does that compromise regulators’ ability to impose scientifically-based management on these fisheries as those interests get more and more consolidated?

In certain fisheries in which extraordinary wealth has consolidated, there are folks who have accumulated enough power to influence the science, but I don’t know that it’s an active concern. I think we’ve seen it come up a couple times in the last two years with regard to the pollock fishery in terms of the impact that it’s having on marine wildlife populations in the Bering Sea and North Pacific, for example.

But on the whole, the system is mostly working fine from an environmental perspective. Pre-assigning and capping catch is the way to do it. There’s not a better alternative than that. It’s just this business of tethering it to the property rights that’s problematic.

Fishing itself is in danger from other things, notably climate change. But not from fishing.

When it comes to those other threats, fishing isn’t always the most secure investment. The snow crab fishery in the Bering Sea got shut down this year, for example Are shareholders just eating that as a loss?

Absolutely. There’s a great many of them that can weather it, especially those who are coming have accumulated wealth and want to accumulate some more. But there are certainly shareholders who have bought in and mortgaged themselves to the gills to have these rights to go fishing because they’re fishermen and it’s where they want to be. But in the same way that people do with housing sometimes, they just get in over their head, and if it’s a bad year, that greatly impacts their ability to pay for their shares. I mean, these things can cost a couple hundred thousand dollars just to have a starting share. If you’re somebody who’s paying that with the nickels and dimes on your earnings, you can really get in over your head.

Who it really hurts are the people that go and do the fishing, especially non-shareholders, because they essentially rent the right to go fishing and pay as much as 80 percent of the catch to do that. And out of their 20 percent, they’re still paying bait and fuel, so they’re the ones that are going to be hardest hit if they can’t go fishing.

In the time since you’ve wrapped up the book, has anything changed in the public’s understanding of this problem?

I wish that there were more public awareness about this issue. In my experience, there’s very little. I think that we’re starting to see some conversations about why equity groups and multinational corporations are taking ownership of fisheries and how that happened, but we’re very far down the road to be having that conversation, and sadly, I think we’re past the point where we could have been having more meaningful conversations about who loses and who wins. Anybody who is going to lose has lost by now. There’s going to be more losers in the rental economy, but in terms of acquiring shares or not, it’s sad, but it’s done.

When it comes to groups pushing for reform or abolishing catch shares, have they made any traction?

Well, it’s been really interesting to watch the environmental community’s reaction to all of this. I think six years ago, seven, eight years ago, talking about equity was not as well received as it is in America today. And I think over time there has been an acknowledgement that this is a major equity failure.

In terms of fairness for fishing communities, it has gone horribly wrong. And what you’ve seen over the last decade or so is folks in the environmental world, mainly NGOs and also the philanthropies that fund them have stepped away from this particular idea. The exception is the Environmental Defense Fund, which has been its largest promoter of catch shares. But in recent days, even the EDF has suggested a willingness to talk about reform and what reform might look like.

Even then, we’ve arrived at this point where it’s going to be very hard to untangle these assets from these gigantic multinational corporations and equity firms that now own them. Theoretically these programs are malleable, but in practice, any effort to retool this business of having created these monetary rights is just going to turn into a drag out fight that’s stacked with lobbyists that plays out in ugly ways in the Capitol. Dismantling these programs would look like buy back programs on a scale that certainly isn’t COVID relief, but it would be a scary figure. Plus, you look at a buyback program and all of a sudden you’re funneling money into the pockets of people who were already vacuuming all the money out in the first place.

I think folks are much more interested in trying to pursue solutions that will work, which means modifying where we are because we’re decades into this, and despite its failures it’s going to be very hard to get out. But I would say that fishermen are a lot like farmers in that, culturally, they’re always fishermen. They would go back if there was a path to going back. And so I think the challenge now becomes how to make that path.

Top photo by David A Litman/ Adobe Stock.

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