GOMEX Commercial Industry Grouper Buyback Program Rick E

GOMEX Commercial Industry Grouper Buyback Program Rick E. Marks ROMEA, Arlington VA November, 2005

How did we get here? • • Fishing closures Trip limits Fuel prices Weather events Excess capacity No entry controls Market loss • Derby fishing • Future regulations/lower TAC’s/closed areas • Ripple effects in coastal communities • Shore side infrastructure concerns

Where is here? • Commercial Industry leaders recognized both the urgent need to address growing problems in the fishery and the existing burden on the Council to get something done quickly… • Congress approved a $35 M loan package for a voluntary buyback program in the FY 2005 process (for both VL & LL) • A buyback program is developed from an existing limited access program(!)

Buyback Program Process • Organize a representative Steering Committee and highly qualified advisors • Develop an industry business PLAN to implement limited access & voluntary buyback programs • Take the PLAN to an industry-wide vote • Implement the approved PLAN

Commercial Industry Steering Committee • • • Glenn Brooks (LL) Martin Fisher (VL/LL) Jack Golden (LL) Jimmy Kaufmel (FT) Paul Longhridge (VL) Bart Niquet (VL) • • • Dean Pruitt (LL) Steve Rash (D/LL/VL) Julie Russell (VL/D/R) Eric Schmidt (VL) Bob Spaeth (LL)

Steering Committee: Informal Ad Hoc Advisors • • • Roy Williams (FWC) Roy Crabtree (NMFS) Mike Grable (NMFS) William Ward (D/VL) Doug Gregory, FL Sea Grant (facilitation and data analysis) • Ken Daniels (LL) • Walter Keithly (LSU Economist) • Chuck Adams (UF Economist)

The PLAN ~ Limited Access • Specifies fishery endorsement criteria for gear types using recorded federal logbook landings during 2001 -2004 • Current valid federal reef fish permit as of January ‘ 05 • Historic use requirement for LL and T gear • Incidental catch permits

Grouper Endorsement Criteria • VL: 4, 000 lbs in any 1 of 4 yrs 2001 -2004 with active reef fish permit • LL: 15, 000 lbs in any 2 of 4 yrs 2001 -2004 with active permit and LL landings prior to July 12, 2000 • FT: 15, 000 lbs in any 2 of 4 yrs 2001 -2004 with active permit and LL landings prior to July 12, 2000 {FT gear illegal as of 2/7/07} • Incidental: Landings of 500 -3, 999 lbs in any 1 of 4 years 2001 -2004 get 100 lbs per trip

Limited Access provisions… • Federal log book catch history will follow the federal reef fish permit • Endorsements will be transferable with reef fish permit or to another reef fish permit holder -provided the transfer does not violate vessel size/hp restrictions • Appeals considered based only on accuracy of Federal log book data (65 -day process)

Vessel Size & HP Restrictions • PLAN provides for a one-time allowance (effective Jan 1, ’ 05) for a vessel associated with a qualified endorsement to increase TL by no more than 20% and HP by no more than 25%

The PLAN ~ Voluntary Buyback • Voluntary bids from qualified permit holders will be submitted to NMFS • Bids will be judged based on the reef fish permit owner’s average landings for the 3 most productive years, 2001 -2004 • Maximum bid is $6. 00/lb, not to exceed a total value of $350 K • NMFS awards bids, lowest to highest • NMFS conducts final buyback referendum

The PLAN ~ Loan Repayment • All federal funding used in this buyback will be repaid by participants choosing to remain in the fishery, depending on endorsement scheme • Up to a 5% ex-vessel landing fee collected by NMFS pursuant to standard M-S A requirements • LL endorsements only = LL repays • All gear endorsements = all participants repay, incl. incidental participants

Grouper species subject to loan repayment? • • Rock Hind Speckled Hind Yellowedge Grouper Red Hind Red Grouper Misty Grouper Warsaw Grouper Gag Grouper • • • Snowy/Brown Grouper Marbled Grouper Black Grouper Yellowmouth Grouper Yellowfin Grouper Scamp

Buyback Program ~ Disposition of Infrastructure and Revocation of Permits • Revocation of Federal reef fish permit and grouper endorsement • Revocation of grouper catch history • Revocation of U. S. fishing privileges but vessel may be sold into foreign registry or retained for personal recreation • Vessel may be destroyed at the owner’s cost

The PLAN ~ Impacts? ? • LL Vessels reduced from 164 to 82 • VL Vessels reduced from 834 to 234 • Potential quota savings from limited access 2. 1 M lbs • Potential savings from buyback 1. 1 to 2. 3 M lbs • Difficult to estimate quota savings due to uncertainties regarding incidental catch, vessels moving from LL to VL gear, unknown effort shifts, future regulations, etc…. • Goals are to reduce capacity, extend fishing year for remaining participants, stabilize markets, stabilize shore side sector, provide time for Council to develop ITQ…

The PLAN ~ Current Status • 1136 informational ballot packets were sent out certified mail with unique tracking numbers • • • 568 were returned and delivered to NMFS 218 (38%) ballots were in favor of the PLAN 350 (62%) ballots were opposed to the PLAN • NMFS will release the final results after each ballot is weighted based on the permit’s average catch history: 3 most productive years during 2001 -2004 • If 60% of the votes are in favor, the PLAN will move forward. If not, a second LL referendum will be conducted.