Continuing ITQs Like Icelandic Will Fail

“The Common Fisheries Policy (CFP) has been a biological, environmental, economic and social disaster…. Exchanging a disastrous system run from Brussels for one run by London is no panacea”

Many in Britain look to Iceland as a model of fisheries management to aspire to.

Recent visits by Government suggests post Brexit British management will either be a tightening of the Quota system to an Individual Transferable Quota (ITQ) system such as Iceland with a fully enforced ban on discards

Alternatively, management could be by Effort Control where vessels are limited in their Days-at-Sea in return for being able to land and record all catches in a catch less land more system as Fishing for Leave advocate.

Just because Iceland exceed the dismal CFP does not make their system aspirational.

Much of Iceland industry and fleet is an impeccable model of an integrated business where in many instances one company controls production from catching through to processing and sales.

However, behind this superficial attractiveness there are significant problems which means this system is inapplicable for best management of Britain’s fisheries and industry and the government should go to effort control instead.

Nationally fishing is a hugely significant and vital part of Iceland’s economy, accounting for 26% of GDP. Therefore, Iceland has pursued a model of management geared towards maximum economic output and efficiency to maximise the economy’s lifeblood.

Whereas, for Britain it is the health and well-being of vibrant coastal communities that is of the most vital importance economically.

ICELAND VS BRITAIN ECOLOGY

Firstly it is important to recognise that ecologically Iceland’s fishing waters are very different to Britain’s.   Iceland has a far less mixed fishery than Britain where there are fewer species which also live in less of a mix.

This makes it easier to be able to catch the “right” species for which a vessel has quota, whereas quotas are not applicable and difficult to adhere to in the highly mixed ecology around the British Isles as has been proved over the last 30 years of CFP failure.

Quotas are the cause of discards in a mixed fishery, banning the symptom instead of the cause leads to ‘Choke Species’ where vessels will have to stop fishing when they exhaust their lowest quota allocation – government reports estimate 60% of quotas will remain uncaught resulting in decimation of the British fleet.

ITQs ARE BAD FINANCIALLY

Secondly, Iceland operates an ITQ Quota system where the quota allocations are owned and can be bought, sold and traded, they can also be used as security to raise capital against and have consequently attracted significant monetary value.

Iceland has a digitised electronic monitoring system where vessels catches and quota usage is recorded on an ongoing basis. This facilitates quota trading, swapping and leasing to deploy the quota to where it is needed. Iceland also operates a discard ban.

Those advocating copying Iceland as some sort of bastion of admirable management miss that Britain ALREADY has a de-facto ITQ system of administering quotas in name only.

In 1999 the British government created a system of Fixed Quota Allocation (FQA) Units which gave vessels entitlement to a fixed share of whatever quota the EU allocated Britain – in effect FQAs act like stocks and shares.

Through a system of Producers Organisations (POs), in effect co-operatives of vessels, quotas are able to be swapped and traded as in Iceland.

The only difference is that Iceland has a more transparent system but that is of little material consequence.

Resultantly, a public resource has been corporatized into the hands of a few with no heed or consideration as to the consequences for communities.

As the EU incessantly cut the quotas vessels had to acquire more and more FQA units to maintain parity of fishing opportunity.

Initially 10 FQAs equalled 1 Ton to catch. If Quota was cut 50% 10FQAs equalled 500kg.
Therefore, vessels had to buy 10 more FQAs as they needed 20FQAs to keep 1 ton to catch.

An ITQ system propels a situation of consolidation into a few big company hands.   This results in continuing consolidation as bigger companies with greater financial leverage have consolidated more and more entitlement to quota into fewer and fewer hands.

This is exactly what has happened in Iceland already where in many instances all quotas have been sold or taken from numerous fishing villages around the coast.

In Iceland this has seen the ruination of coastal communities, inshore fishing and family businesses and the Icelandic industry is now predominantly controlled and owned by a few big companies.

This is one of the hottest and most divisive political issues in Icelandic politics.10% of the fishing companies hold more than 50% of the fishing rights. and the 40 largest hold 84% of the fishing rights.

Family businesses are squeezed out, the supporting trades and shops close as the areas local boat are bought out, house prices fall, people move away in something akin to the highland clearances – this is the pattern we have seen repeated in Britain under the de-facto ITQ system we already operate.

Looked at purely from the economics an ITQ system puts a disproportionate financial drain upon the industry as ever-increasing amounts of liquidity have to be invested to acquire and maintain the right to fish.

Rather than reinvestment in newer or upgraded vessels the majority of the industry who try to soldier on are doing so in a fleet with an ever-increasing average age.

QUOTA RENTALS – DARK UNDERBELLY

ITQ Quotas also creates the financially incontinent system of Quota Rentals. This is the dark underbelly of the British system that is little known about.

As a trade in quotas developed the majority of vessels could rent quota to substitute for what they lacked.  This created companies and individuals who became quota traders – slipper skippers.

As quotas have been cut or lagged behind stocks due to the poor science they generate boats have increasingly had to rent – as demand has intensified so has price to exorbitant levels. With rentals on some species accounting for an extortionate 70% of the value of the fish landed.

Government statistics show that slipper skippers ashore are bleeding away 60% of the profit from active vessels.

Those slipper skippers now hold a dominant position, using vessels necessity to access quota to keep the industry silent – there is effectively a racket revolving round the cartel advocating for the status quo of a failed management regime.

This will only intensify with a discard ban where all fish will have to be legally landed rather than discarded.

ITQs STOPS YOUNG MEN

An ITQ system crushes one of the main drivers of young men to go to sea traditionally that they had the opportunity to work their way up and aspire through their ability and hard work to become an owner and skipper one day.

With this incentive removes, along with having the indignity of having to dump half your labours into the sea with discards many young men from fishing families, the traditional lifeblood of recruitment into a hard and risky industry have chosen to pursue less arduous careers elsewhere if they are going to have to work for a large company anyway.

ICELAND STILL HAS DISCARDS

Even more discouraging is that Iceland’s system has not managed to get rid of discards as will happen under any quota system in a mixed fishery. Discards are banned in Iceland but there is no at sea enforcement to make sure vessels comply.

If vessels do not have and cannot acquire quota through swaps or exorbitant renting costs they will always discard fish in order to keep fishing for species that they do have quota for.  It would be financial illiteracy to do otherwise.

As Iceland is highly dependent on fisheries there is less political incentive to have a tightly enforced discard ban with the repercussion of choke species.

In Britain public concerns on sustainability and good management demand that any discard ban is credible and under quotas this will necessitate full CCTV enforcement which with choke species will bankrupt the fleet.

In 2013 one family business who is one of the bigger quota holders attempted to replicate a Catch Quota, Discard Ban, ITQ fishery as some extol should be followed post Brexit.

The vessels lasted 5 weeks before they had to call the trial off as it was impossible to keep fishing legally.  They calculated they alone would utilise the entire UK North Sea Hake allocation such is the disparity between stocks and quotas.
http://www.seafish.org/media/1120923/dag_oct13_poconcerns.pdf

CONCLUSION

To retain and intensify the same system on steroids that has led Britain halfway down the path to where Iceland is will not achieve rejuvenation of communities and sensible management of fish stocks.

Taking the opportunity of leaving the EU to embrace a unique, real time monitored and managed fisheries system under Days-At-Sea where all vessels can prosper, ending consolidation to a few, will allow coastal communities to boom.

With Days-at-Sea being discard free and generating real time science it means Britain fulfils her international obligation under UNCLOS to fish in the most sustainable manner possible whilst also generating the best science available – allows CEFAS & Britain to be world leading.

Most importantly it gives an equitable system where large and small can prosper which will allow communities and coastal constituencies to rebuild and flourish for generations.

Not continue with the same ITQ quota policies as currently which are of perpetual decline and consolidation with the choke species being the nail in the coffin.

We either move to a system that ticks all the boxes or for convenience, and to appease a minority of quota interests, we drive ourselves off a cliff ecologically and economically.

We’ll never have success on this acid test if we continue the same bad management.

We will never rebuild coastal communities by keeping the same system of continual decline and consolidation.

Coastal communities didn’t vote Leave and Conservative to stay the same –continue consolidation, as in Iceland to a few hands.

  • Susan Beaton

    The arguments against ITQ management very commonly end up with the notion that the ITQs become so expensive because of restricted access, and thus become concentrated in few hands, that it basically kills the small communities which once relied on those fisheries. However, when you’re talking about preserving coastal communities while at the same time spreading the wealth from fisheries to the most people possible, two small changes can be made to the ITQ model to maximize efficiency, reduce waste, and assure the fish stay in the hands of smaller/individual operators. #1) Place a cap on accumulation of quota. #2) Make the ITQ have an Owner/Operator component. That is, if you own it, you fish it. So this makes the leasing of quota within the fleet impossible. These two elements were introduced in the Area 19 Snow Crab fishery off the North eastern coast of Nova Scotia, Canada some 25 years ago, and to this day, that fishery remains in independent harvesters hands, and the wealth generated from that fishery is kept in the communities along the shore, all while protecting the species from over fishing. The cost of entry has also been kept in check by the realities of the cap on accumulation. It mitigates the effects of the tragedy of the commons, as well. ITQ systems are a very desirable way to manage any shellfish in particular, because any discard stands a good chance of returning to the ocean alive for future harvest and breeding. However, any fishery can benefit from this type of management, particularly in terms of by-catches, as Iceland had shown. So, instead of tossing the cod with the bilge water because of a few flaws in the ITQ set up, perhaps cast a wider net for answers already found elsewhere.