Background on IFQs
While individual fishing quotas (IFQs) are controversial, bycatch and economic problems in the commercial fishing industry have led some members of the commercial fishing and conservation communities to consider their use. At the same time, some in these communities oppose IFQs. Strongly-worded arguments have been made that IFQs are both beneficial and harmful to the environment and to fishing industry members. In 1999, the National Research Council published a study reviewing the pros and cons of IFQ programs and recommending their use as a fisheries management tool. This page was created to clarify some issues surrounding this topic.
What is an IFQ?
An IFQ is a federal permit to harvest a quantity of fish, usually expressed as a percentage of a fishery's total allowable catch that may be held for exclusive use by an individual. IFQs are often issued as quota shares. A quota share represents a percentage of the total allowable catch in the fishery and each year quota pounds are issued to quota share holders based on the total allowable catch for that year. If transferable, quota shares and quota pounds can be leased or sold. Harvest privileges can also be taken away if the IFQ holder does not comply with federal fishing standards.
There are currently IFQ programs in effect for Alaska halibut and sablefish, for surf clams and ocean quahogs off the Mid-Atlantic states, for wreckfish in the South Atlantic, and for the West Coast limited entry fixed gear sablefish fishery. IFQs are also used in New Zealand, Australia, and Iceland. IFQ programs vary considerably, depending on the fishery in which they are used and the regulations for each specific program.
The West Coast limited entry fixed-gear sablefish fishery operates under an IFQ program in which transfer of quota shares is highly restricted. Shares are blocked into three size categories (tiers), shares cannot be transferred separately from the limited entry permit, and no more than three permits can be stacked on a single vessel.
Some potential benefits of IFQs include:
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Reduced overcapitalization (too many boats and too much gear) in the fishery
(little economic incentive to maintain capacity in a fishery beyond
what is needed)
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Greater rewards for efficiency, conservation and stewardship (IFQs provide more economic incentive to support conservative harvest levels that allow fish populations to grow)
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Reduced bycatch (when IFQs apply to catch and there is adequate monitoring)
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More efficient use of fish products by processors
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When transitioning from a derby fishery, more time to catch fish, resulting in safer working conditions and higher-quality products
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More flexibility to adjust to regulations and other fishing and market conditions
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More economic certainty for fishermen
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Better balance of supply and demand
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Those wanting to leave the fishery would receive some compensation
Some potential drawbacks of IFQs include:
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Difficulty in initially allocating quota shares
- Possible concentration of wealth and monopolization
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Concerns about equity (fears that small boats and communities will be harmed)
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Possible absentee ownership of IFQs
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Need for careful design and monitoring
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Possible cultural changes created by the new system
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Perceptions that IFQs allocate public resource rights to private citizens
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Perceptions that IFQs reduce fishermen's access to a public resource
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Possibility of unreported bycatch due to factors such as incentives for highgrading (lower-quality fish being thrown back in favor of better fish)
Mitigating factors for IFQ programs:
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IFQ shares may be revoked if abused
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IFQ programs may be modified or discontinued if they do not meet their goals
The MSA requires IFQ holders to pay the costs of managing and enforcing IFQ programs. However, only fees in amounts of up to 3% of the exvessel value may be reserved explicitly to cover program costs. Fees collected in excess of the 3% limit may be used to cover program costs only if allocated for that purpose through the annual appropriations process.
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History of Trawl Rationalization Discussions in the Pacific Coast Region
Trawl rationalization involves two closely related and interlinked decisions. The first is the specification of the management system that will be used to rationalize the trawl fishery. This decision involves the consideration of harvest control tools that will be used to manage the limited entry trawl vessels' groundfish harvest, tools such as IFQs and harvester co-ops. This decision is being address as Amendment 20 to the Groundfish FMP. The second decision involves determining the proportion of the available catch that will be allocated to the trawl fishery. This decision is being addressed as Amendment 21 to the Groundfish FMP.
The Council considered alternatives that would rationalize the trawl fishery either through a Trawl Individual Quota (TIQ) program for all trawl sectors, or co-ops for the whiting sectors. The trawl individual quota program would be based on individual fishing quotas (IFQs). Consideration was given to other types of individual quota systems, such as individual processing quotas (IPQs), but was halted when Congress imposed a restriction on consideration of IPQs. The Council also considered but rejected extending the duration of the two-month cumulative limits and allowing permit stacking.
The Ad Hoc Trawl IQ Committee presented its first report at the November 2003 Council meeting (download the November 2003 report). After reviewing the report, the Council adopted a control date of November 6, 2003 for groundfish trawl individual quotas. Download the control date notice. This control date will apply to any person potentially eligible for individual quota shares. The control date puts those persons on notice that the Council may decide to not count activities occurring after the control date toward determining a person's qualification for an initial allocation or determining the amount of initial allocation of quota shares. This control date was also a topic in a May 24, 2005 Federal Register notice.
At its June 2005 meeting, the Council culminated a year-and-a-half initial public scoping process with the unanimous adoption of seven trawl rationalization alternatives for analysis in an environmental impact statement (EIS). At that time, the alternatives included only TIQ programs and permit stacking.
The decision to move forward was unanimously requested by the Council's Ad Hoc Trawl Individual Quota Committee which includes representation of whiting and nonwhiting sectors, shoreside and at-sea processors, communities and environmentalists. A public workshop on the analytical approach and impacts to be covered in the EIS was held April 18-20, 2006 in Portland, Oregon.
At its June 2005 meeting, the Council also tasked its Analytical Team and SSC with drafting options for community involvement in a TIQ program and reporting back to the Council in November 2005; and directed staff to announce the Council's intent to prepare an EIS on intersector allocation as soon as possible. Such allocations would be necessary to support a TIQ program as well as support the biennial management process and implement recent Council policy decisions on bycatch control.
The Analytical Team reported back to the Council on community involvement options at its November 2005 meeting. Results of that meeting are summarized in the January 2006 status report and the Fall 2005 Council newsletter.
At its June 2006 meeting, the Council reviewed the first stage of development of the analysis (including EIS) for the TIQ program and permit stacking alternatives. It took a number of actions modifying certain aspects of the alternatives (Summary of June 2006 actions). In September 2006, the Council added co-op alternatives for the whiting fishery to the suite of alternatives it has under consideration.
In December 2006, Congress completed work on a reauthorized MSA. The reauthorization contained substantial changes to the language pertaining to individual quota programs. The MSA term “limited access privilege programs” (LAPPs) encompasses both individual quota and co operative management. Earlier versions of the reauthorizing legislation had included provisions exempting the Pacific Council's groundfish trawl IFQ program. However, this exemption was not contained in the final version. The Council's Groundfish Allocation Committee (GAC) reviewed all relevant provisions and found that, in general, the new act did not appear to require substantial deviation from the alternatives that the Council had thus far developed. The reauthorized MSA did, however, require that this Council submit a fully analyzed proposal for a rationalization program for the trawl groundfish and whiting fisheries, including the shorebased sector of the whiting fishery, within 24 months of the enactment of the reauthorization.
In March 2007, after reviewing reports from the GAC and other advisory bodies, the Council eliminated the permit stacking alternative and reorganized the IFQ and co-op alternatives. See the “March 2007 Council Action Summary.” The Council made further modifications in June (see the “June 2007 Council Action Summary”). At its November 2007 meeting, the Council finalized the alternatives that will be the subject of a draft preliminary EIS (see “November 2007 Council Action Summary”). Elements of the tracking and monitoring provisions were refined at the Council's March 2008 meeting. At its June 2008 meeting, the Council selected a preliminary preferred alternative. The draft amendment package and draft preliminary EIS were released October 3, and public hearings were held October 27, 28, and 29, 2008.
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Final Council Decisions Process and Draft Documents
At its November 2008 meeting, the Council recommended an IFQ program for the shoreside fishery and co-ops for the whiting mothership catcher-processor sectors. A brief description of the motion is included in the November Council decision document. A full description of the Council recommendation will be posted here.
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Recent Documents
The draft trawl rationalization amendment (Amendment 20 to the groundfish FMP) Council decision document (in the form of a preliminary draft environmental impact statement [EIS]) is available on the trawl rationalization decision document web page.
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Documents Archives
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Individual Quota Outreach Materials
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Contact Information
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PFMC
11/24/08
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