Lobster Shake-Up: The No-Glut Way to Who Fishes What
by Laurie Schreiber
Commissioner Patrick Keliher. “Northeast Harbor, Maine. The overall economy from marine fisheries is over $1 billion, and you guys make up, now, the bulk of it,” Keliher said. Part of that dominance, he said, is due to “piss-poor management” of other fisheries, as well as environmental factors such as warming ocean temperatures. He continued, “When you lose value in this fishery, the entire state loses.” © Photo by Sam Murfitt
NORTHEAST HARBOR – Large crowds turned out for the Department of Marine Resources (DMR) meetings on limited entry and optimizing the lobster resource, held throughout January in 16 communities.
About 80 people – most of them fishermen, along with dealers and other stakeholders – went to the Jan. 8 meeting in Northeast Harbor.
The meetings were conducted in the wake of “a year marked by record high landings and low boat prices in the lobster fishery,” according to the DMR.
The meetings were aimed at getting input on the state of the industry and recommendations for the future. They followed the DMR’s receipt of a report entitled, “An Independent Evaluation of the Limited Entry System for Lobster and Crab,” conducted by the Gulf of Maine Research Institute (GMRI), available at maine.gov/dmr/GMRIReportRelease.
The report provided an evaluation of the existing limited entry fishery, as well as options and recommendations to address deficiencies in the current system. The DMR was required to report back to the legislature on the results of the study in January.
DMR Commissioner Patrick Keliher told folks that he was looking at short-term and long-term situations.
For the long-term, he asked, “What happens if there’s a change to the resource? What if it starts going down? We’re not well positioned, if we didn’t see that coming.”
The question comes on the heels of the latest landings report, which shows that, as of Jan. 3, more than 123 million pounds of lobsters were caught in 2012, an increase of approximately 18 million pounds over 2011.
“Yet while the lobster fishery has experienced unparalleled growth in landings, the total value is almost $331 million, a decrease of $3.7 million compared to 2011,” the report says.
(Some dealer reports are still to come, and the current numbers are incomplete. The DMR said it will issue an updated report by late February. For preliminary 2012 landings broken down by county, month and zone, visit maine.gov/dmr/commercialfishing/recentlandings.)
“This unprecedented preliminary landings report provides us with both an opportunity and a challenge,” Keliher said in a press release. “We need to look closely at this abundant resource and address the challenges presented when supply exceeds demand, as it did this past year, resulting in a decreased overall value which affects the entire industry. To put this into perspective, in 2005, the industry landed 70 million pounds for $320 million.”
Last year’s haul was 53 million more pounds than 2005, but only $13 million more in value.
Keliher said his agency plans to develop management measures that “respond to abundant supply and its adverse impact statewide on boat price, particularly in the summer months.”
Keliher characterized record volumes, combined with poor prices, as a “glut.”
The glut, he said, was exacerbated by 5 million pounds of early shedders, harvested over a four-week period in summer 2012; and by record landings in Canada.
The state should aim to maximize the value of this public resource, he said.
At the same time, he said, there’s no guarantee that the number of lobsters on ocean’s bottom will remain so high. And the current licensing system is not prepared to react to a resource decline, he said.
“This industry is now the backbone of the coastal economy,” Keliher said. “And I have to look at it not from the individual standpoint but the entire industry.”
Lobster fishing also fuels other businesses, such as bait, boats and fuel.
“The overall economy from marine fisheries is over $1 billion, and you guys make up, now, the bulk of it,” Keliher said.
Part of that dominance, he said, is due to “piss-poor management” of other fisheries, as well as environmental factors such as warming ocean temperatures.
He continued, “When you lose value in this fishery, the entire state loses.”
In June 2012, he said, the glut made itself apparent as his phone “rang off the hook.” First calling were some of the big dealers, who said they didn’t have a place to send all the product that was coming in. When Canadian processors opened up, the price bottomed out. That’s when harvesters started calling, asking Keliher to shut down the fishery. Keliher said he didn’t have that authority.
“What we’re doing is, we’re now landing a public resource at such a low price that we’re pissing it away,” he said.
Some people made it up with volume, he said. But fishermen to the west had the most difficulty.
“Boats are on the market; people are going out of business,” he said. “There are a lot of regional differences that we also have to take into account, by bay or by zone.”
The DMR’s Lobster Advisory Council (LAC) has discussed options to ensure product quality and profitability, Keliher said. The conversation centers on trying to avoid future gluts.
Among the options the LAC has discussed are seasonal gauge increases, with the intention of slowing the harvest.
“The problem is it forces those landings so far ahead, you end up recouping those landings the following spring or summer and it puts more landings on the market when you don’t want it,” he said.
Seasonal trap reductions and seasonal closures were also on the table.
On the latter, he said, “I was talking with a fisherman in Stonington. He said, ‘If we all had to close and bring our traps out of the water, Stonington would sink.’”
In the end, the LAC decided to ask the DMR to prepare a draft bill, to take to the legislature, that would permit only three days in the fishery, with an optional daily time limit, for a period of time – probably four weeks – in the summer when the market is saturated. The “saturation” trigger was not defined in the draft language.
The idea is that fishing just three days a week would slow the product coming to the docks, he said.
However, he said, there is some question as to whether that limit would accomplish anything. For one thing, he said, fishermen at other meetings have already said they would just fish harder during those days.
“Whatever we do, it’s got to work,” he said. “I’d rather see something that’s agreed upon by the industry” and has clear triggers.
Another difficulty, he said, is that dealers have said they need landings at least five days a week, if not six.
In Northeast Harbor, there was disagreement about the type of action to take. Some fishermen suggested a crate limit, or culling for quality.
Others said that dealers are in the best position to tell fishermen how much product they need.
“Canada is nailing the living bejeezus out of lobster,” said Jon Carter. “It’s a global market, not a Maine market. We’ve got to deal with them. They flood the market, then we come on with a lower-quality lobster.”
Carter, who fishes out of Bar Harbor, said that, last summer, “we had wicked dead loss….That’s what everybody’s trying to avoid.”
He added, “Why would you want to catch a lobster, throw it in a crate, and let it die before it gets to anybody? That just doesn’t make sense to me.”
Carter said that dealers were in a position to address the situation, “if the dealers said, ‘You know what, boys, we’re not going to have these deads.’ But every dealer I’ve talked to says, ‘Oh, I’m afraid if I tell you I won’t buy your lobster, you’re going to go to Joe Blow over here.’ You know what, if the dealers got their act together, we wouldn’t need this [LAC proposal].”
“If your dealer says, ‘I’ve got a glut,’ then you don’t go,” said Tremont fisherman Jon Crossman. “We’re all self-employed, we’re all going to adapt.”
Bruce Damon supported the idea of a seasonal gauge increase.
“A one-pound lobster is not much of a meal,” Damon said.
Another fisherman said a seasonal gauge increase would be useful for kicking a lot of “junk” product off the market. And if shedders have a chance to harden up, he said, that would slow landings, spread the catch through the year, and have a higher-quality product and a better price.
Dealer/processor Rob Bauer said a gauge increase will automatically increase the market. Currently, said Bauer, Maine can’t sell lobster to southern New England because the minimum size in those states is larger than Maine’s.
“We’ve lost Rhode Island, Connecticut, southern Massachusetts – that market was fairly substantial,” Bauer said.
Bauer said Maine can’t ship lobster south unless they’re culled for size, tagged, and inspected.
“I used to do big business in Rhode Island and I had to stop,” he said. “So if we increase the gauge, we probably increase the live market by 15 million pounds, just like that.”
On culling for quality, Bauer said he had trouble bringing up the question with a couple of fishermen last year.
“I had two encounters this summer, where I complained about quality to the fishermen, tried to refuse the lobster, and almost came to call the sheriff,” he said. “I don’t know if I want to have physical violence threatened to me every time I tell a fisherman his lobster sucks. We had two times that happened. So this quality thing, it’s easy for you guys to say the dealer’s got to step up, but when we do step up it gets in our face and the next thing we know, we’re calling 911.”
Part of the problem, fishermen said, is that slowing down fishing simply means leaving lobsters in the traps.
Still, some fishermen agreed, dealers are in a position to be able to tell boats when to fish or not, based on whether they can move the product or not.
“If you put me on three days, we’ll just come in and keep unloading, and during that time we’ll be in a rush, and quality is a problem,” said fisherman James West, of Sorrento. “The only way to do it is through dealers, and there’s no incentive for them to do it.”
West suggested it might be useful if dealers had a differential price structure based on the quality of the product a fisherman brings in.
West said the problem is not about the fishery, per se.
“There’s not much market for seafood period,” he said. “It’s the economy.”
Keliher noted that fishermen at other meetings earlier in January were almost unanimous that something had to be done.
“Here, I’m hearing a mix of ideas and ‘Don’t do anything,’” Keliher said. “You don’t like days out, time limits. There seems to be some interest in looking at the gauge.”
Maine Lobstermen’s Association vice president Jim Dow said the industry needed to do something. “Last spring,” he said, “we were all mad as hell that the price was so low, and everybody said, ‘I don’t know what the answer is, but we need to do something.’ Doing nothing over and over and over, and expecting a different outcome, is not going to change a thing. If you think the dealers are going to bail us out, you’re mistaken. The dealers are not worried about our bottom line; they’re worried about their bottom line. We as fishermen need to think about this as taking care of ourselves. And maybe the three days isn’t the answer, but doing nothing isn’t the answer either.”
Keliher said he didn’t believe in more regulations, but he also didn’t want to see the situation repeat itself.
“My preference is, if we’re going to do something, to only do it if it’s needed,” Keliher said. “If the dealers can work it out, beautiful. I don’t think they’re going to.”
One man said the conversation always ends up with restrictions on the fishermen. But the fishermen, he said, are just trying to survive.
Last summer, he said, “No one knew what the future was going to bring. We’ve all got families to support and you’re going to do whatever you have to do to make a living….A fisherman is going to do whatever he’s got to do to meet that bottom line. …Heavily restricting us, cutting us back, will not work.”
John Nicolai, a lobster tourboat operator, said that, as the industry works out these questions, it must avoid the perception that lobster is a cheap commodity.
“It’s a luxury food item, no matter what anybody says,” Nicolai said. “We used to have this beautiful aura of producing wild-caught seafood…We have the best product in the world, the best waters to fish out of, and the marketing stinks.
If we don’t get the price up and create more demand, you can bring in all the lobsters you want, that price is going to stay low and Maine lobster is going to stay a cheap commodity, and it’s going to fall into a category you don’t want to fall into. You want to stay at a luxury food item level, not as cheap seafood.”
In the same vein, Keliher said the conversation should not be about “junk” lobster.
“As an industry, you should just talk about soft lobsters, not junk,” said Keliher. “At the end of the day, there’s a home for these lobsters. And hopefully they become – whether it’s a value-added component, or moving to a better live market – it’s all Maine lobster. It’s all good quality.”
For the long-term, Keliher said, the industry should prepare for an eventual resource decline. That’s expected to happen despite all of Maine’s conservation measures, he said.
“Ask southern New England if they ever thought they’d see a 75 percent reduction in their resource,” he said. “It can happen. And it can happen for all kinds of different reasons.”
Keliher said that, according to DMR analysis, the resource would be seven years into a decline before the industry saw it in landings.
The industry must be able to act quickly if the resource declines, he said. In part, he said, the industry must address the question of latency. There are approximately a million latent tags statewide.
“So if we did see a decline and had to reduce traps, you would have to come down, as well as the guy who doesn’t even fish would have to come down,” Keliher said.
The industry will have a problem if latent effort activates, he said.
Trap reduction is the most efficient way, but not the only way, to deal with a resource decline, Keliher said.
The industry needs to address the issue carefully, he said. He offered as a cautionary tale of unintended consequences the situation in 1997, when an 800-trap limit was imposed on the industry, in an effort to reduce gear in the water. Some people were forced to reduce to 800. But others, who feared eventually having their numbers further bumped down if they didn’t use them, went up to 800. The end result was more gear in the water, not less.
“No one realized that would happen,” Keliher said.
Conversely, he said, the current licensing system has failed those who have trained to fish through the state’s apprenticeship program. Rather than the expected wait of two or three years to get commercial license, based on a zone’s entry/exit ratio, the waiting period for entry is now 20 or 30 years long, except in Zone C, which is an open zone.
“We’ve got people on the waiting list who don’t ever have a chance to get into the fishery,” said Keliher.
“That feeds into long-term structural problems,” he continued. “There are very few license holders between the ages of 23 and 40. But that’s the age bracket of people on the waiting list.”
Keliher cited the example of one man in Friendship, who has been on his zone’s waiting list for 10 years. Now he’s age 60, and he’s got a further 10-year wait.
According to the GMRI report, on average, only 5 percent of student license holders – who are entitled to get their commercial license by age 18 without going on a waiting list – go on to get their commercial license. That percentage is higher on offshore islands and Down East, said Keliher.
The report’s major recommendation was a four-tiered license system with varying numbers of trap tags.
“I think the tier system helps us to address that latency, and it helps us create a system that can react, if we need it to react,” said Keliher. “Our goal is to have a licensing system capable of responding efficiently to a decline in the resource. And, associated with that, trying to balance entry and exit in the fishery, recognizing that we’ve got differences by region and zones.”
Keliher said that, in his opinion, the GMRI’s four tiers is overly complicated. But the DMR narrowed it to a “simple three-tiered concept based on landings in zones.”
According to DMR deputy commissioner Meredith Mendelson, the proposed system looks at dealer reports for individual landings over the past four years, and takes each fisherman’s best year.
Those fishermen who didn’t land anything, during the four years, get placed in a 50-tag tier.
“Those are people interested in leaving their options open,” Mendelson said.
The system places fishermen at the 400-trap level if their landings were in the 25th percentile of total landings for the zone. That means that, for Zone B, an individual’s landings during his best year would have been 6,097 pounds or less, to qualify for 400 traps.
Everyone who landed more than 6,097 pounds qualifies for 800 traps.
The qualification for 400 traps is deliberately lenient, Mendelson said. That tier represents only 2 percent of landings in Zone B; 98 percent of the zone’s fishermen would be in the top tier.
The system would allow fishermen to move down at will. Those would perhaps be fishermen who are retiring from the fishery.
To move up, those in the 50-trap tier could qualify for 400 traps if they can prove landings over a certain period of time; the current proposal is five years.
That would take care of many people who are currently stuck on waiting lists. People who already have been on the waiting list for more than five years would automatically get into the fishery at 400 traps.
To move from 400 to 800 traps, the system would use a 1:1 entry/exit ratio, much like the ratios currently in place for each zone.
(None of the numbers in the proposal are cast in stone, said Keliher.)
For Zone B, the numbers would work out as follows: according to DMR data, 68 license-holders didn’t have any landings in four years and would be in the 50-trap tier; 84 are below the 25th percentile and would drop down to 400 traps; and nothing would change for 325 license-holders, who would be in the 800-trap tier.
For new entrants, said Mendelson, the proposed system affects both people on the apprentice list and students. The system proposes an abbreviated apprenticeship program for people wishing to get into the 50-trap tier.
Others, who want to fish full-time, would complete their apprenticeship as it currently exists and get into the 400-trap tier. They would not have a waiting period.
Student license holders would come in at 400 and stay there, Mendelson said. Mendelson said the DMR has heard a lot of concern about that provision, because of a potentially large influx of people from the waiting list who would get 400 traps.
For example, in Zone B, there are currently 57 people on the waiting list. Of those, 38 have been waiting for five years or more. The 38 people, qualifying for 400 traps each, would represent an additional 15,200 tags in Zone B.
“We hear concern about that,” Mendelson said. “We think it’s unlikely those people would be ready, right off the bat, to go fishing. But it’s possible.”
Carter said he was concerned that, if more people are allowed to fish under this system, the interstate management body, the Atlantic States Marine Fisheries Commission (ASMFC), will step in to decrease fishing effort.
But Mendelson said that, although more people would be fishing, the number of tags is expected to drop.
“It would probably be a wash,” she said.
“The goal is not to bring in more effort,” said Keliher. On the contrary, he said, both the ASMFC and federal regulators regard latent tags as possible effort, so the system would take a big chunk of tags off the books.
By way of example, Mendelson said, last year, in Zone B, 312,000 tags were purchased. That was less than the 381,000 that could have been purchased, if each license-holder had gone for his 800 tags.
The difference, Mendelson said, means 69,000 tags of potential effort.
In the proposed system, in Zone B, 64 people in the 50-tag tier would have 3,400 tags all together. The 400 tier would have 33,000, and the 800 tier would have 260,000 tags.
That brings the total of tags that can be purchased to fish, in Zone B, down to 297,000, from the current 381,000 that is allowed.
“It’s a significant drop,” said Mendelson.
Fishermen expressed concern that the system allows people off the waiting list immediately and “incentivizes” them to fish harder.
“It is a huge concern,” said Dow. “If you take 38 people immediately…you’ve taken the latent tags out of the fishery and then given them back to guys who want to use them and have to use them in order to keep that gear. You’ve increased the traps in the water that’s being fished and, over time, people who are on that list now, and have been on that list for a while, will continue to come in….You’re going to increase the traps in the water big-time.”
The Maine lobster fishery was open access until the mid-1990s. The limited entry system has been in place for 15 years, as a way to reduce the number of licenses and achieve a 30 percent reduction in the number of trap tags, due to concern that fishing effort was too high. As the program matured, the goal of the program was changed to achieve a reduction in trap tags, rather than licenses, since tags represent the actual effort in the water.
But since 1997, although the number of all licenses type declined statewide by 12 percent, the number of tags increased by 13 percent, going from 2.1 million to 3.1 million in 15 years, mostly in the eastern half of Maine. It became apparent that controlling numbers of licenses or trap tags didn’t directly impact the conservation of the lobster resource. Instead, the system became a socio-economic tool that controlled who had access to the lobster resource. The system provides opportunities for children through its student license program. But for others, including those who have learned the trade through the state’s apprentice program, the system has resulted in long waiting lists for licenses.
According to the GMRI report (maine.gov/dmr/GMRIReportRelease), in 2011, there were 4,933 commercial license holders, who bought a total of 2,876,388 tags. In addition, there were 761 student license holders with 49,238 tags and 269 apprentice license holders, who cannot buy tags.
Not all license holders actively fish; 1,107 commercial licenses did not record any landings in 2011, 22 percent of the total.
GMRI identified four key deficiencies: latent effort, long waiting periods, underaccounting of retiring tags, and an inadequacy of the system to respond to a resource decline.
Latent effort represents a risk to the fishery because this high level of potential new effort would dramatically increase the pressure on the lobster resource. GMRI estimated there are about 1.2 million latent tags. If the latent tags were activated, that would represent a potential 39 percent increase in existing effort, the report said.
By meeting’s end, there was no clear consensus about the three-tier plan.
After the meeting, fisherman Holly Masterson said she was concerned that not enough people on the waiting lists were aware of the meetings and the processes used by legislation to pass new bills.
“They are unaware that being part of the fishing community/industry also means understanding the government process to change such systems as the limited entry process,” said Masterson, who added that she hoped to spread the word that wait list applicants need to get involved.
Masterson said she was also concerned about those fishermen who did not want new license-holders in “their” waters. As someone who has been on the waiting list since 2007, she said, the 400-trap tier would be a viable middle ground for getting into the fishery.
“It’s not enough to be full-time, but just enough to extend our apprentice experience to the next step,” she said. “It would also weed out the ones who are not really into it. Those of us who truly want to be fishermen, want to because it is what we know. It’s what we have watched our families do for our whole lives and it’s what we dream of doing and becoming.”
Masterson said that, when she first started the apprentice program, the Zone B entry/exit ratio was 1:3. It is currently 1:5, which means that 4,000 tags must be retired before a new license is awarded.
(Each lobster limited-entry zone has an exit ratio to determine how many tags must be retired in order for a new zone entrant to be allowed into the zone. The entry/exit ratio for each zone is as follows: Zone A: 1:3, or 1 new license for every 2,400 tags retired; Zone B: 1:5, 1 new license for every 4,000 tags; Zone C is open; Zone D-G: 1:5.)
If Zone B were still 1:3, said Masterson, who has worked as a sternman the past eight years, “I would just about have my license by now and that was the system I entered into...Doesn’t the state of Maine pride itself on our lobstering industry? Don’t they want the people on the waiting list who want to be fishing, fishing?”