Property Rights Foundation of America®

from Proceedings of the Fourth Annual N. Y. Conf. on Private Property Rights (PRFA 1999)

Fisheries Conservation through Property Rights
Frederick William Meeker
Attorney, Manhattan & Hampton Bays

Thank you, Jim. I am delighted to be here, Carol, and honored to be a speaker today. As Jim said, I am an admiralty attorney. I practice mostly in New York City but also on Long Island, and for the past eight or nine years I have been representing commercial fishermen, these poor beleaguered men who are engaged in the most dangerous occupation in the world. And as Jim said, in my lifetime we have gone from total freedom of the seas to a situation now where commercial fishermen are probably the most regulated people on earth, an occupation that was once characterized as total freedom. You know, you want to go fishing, you go fishing. You go when you want and catch what you want and catch how much that you want.

Now you've got a situation where the bureaucrats are telling you when you can fish, where you can fish, how much you can catch, and they have got to approve it before you leave. It is a situation where the commercial fisherman is blamed for not policing all the species in the seas, which they may have some responsibility for.

But the government and the governments of the world cannot shirk their own responsibilities for the situation that has developed. It was the government that financed the construction of all these huge factory ships that managed to rape the waters of the Atlantic Ocean. The Georges Banks and the Grand Banks have been furnishing cod to the world since some say before Columbus and in the 1980s they just took everything. So the regulation of fisheries really got going and we have got into a situation now where it is almost totalitarian. This problem, as I say, resulted from the huge capitalization of fisheries and then, of course, it became a crisis and you have always got to have a crisis in order to rape citizen's rights.

The problem in the world's fisheries is what they call the tragedy of the commons. This was a concept, I guess, that was recognized first in feudal England where you had common grazing rights. The problem with common grazing rights is that if Alf is going to put five cows on the property, Ben is going to put ten on and Charles is going to come around and put 500 on it, because it doesn't cost them anything to maintain the property. All they do is take, and pretty soon everybody is out of the cow-raising business because there is no more foliage. Well, the bounty of the seas protected us from that situation for centuries until about the 'seventies and the 'eighties when they basically went after the cod. And after they got all the cod, they went after the caplin and the stuff that the cod eat; so we have got a situation where we are not able to rebuild these fisheries.

Now, the answer that the government gave was, well, let's regulate it. And of course in their heavy hand they decided, rather than regulate the resource they would regulate the fishermen. So you've got a situation now where if you want to become a commercial fisherman, the short answer is you can't. You cannot get into the fisheries today. You can go recreational fishing, but you can't sell your catch. They call it a moratorium on licenses, and virtually every viable economic fishery is closed. The only way you are going to get a license is if you buy a corporation that has got one or use some other legal chicanery to get one, because you are not going to be issued one. So basically the public resource has been privatized.

Now, the question is, how should we regulate this now-privatized resource? Should the bureaucrats tell you who can fish? Should they use this as a political plum or should the markets decide?

A concept probably new within the last fifteen years, and probably within the last twelve in this country, was the concept of individual transferable quotas. The idea is that now that you have closed the resource. Say, you have got ten fishermen in a particular fishery. You take those ten fishermen, and then the scientists establish what is a total allowable catch. Say it is a million bushels, and among those ten fishermen who are licensed, that is the way you've got it because no one else can get in, you whack up the million bushels and each one gets 100,000 bushels to take.

This is a system where these individual quotas become valuable. They become active if they are transferable. A guy who wants to get out of the business can sell it. A guy who wants to take it easy for a while can lease his quota, and it provides the fisherman, normally an occupation that doesn't allow for amassing capital, to amass capital. He has something that is valuable that the banks will loan money on, that he can use for retirement. If he wants to get out of the business and get into something else, he can use it for retraining. And these quotas happen.

Of course, the socialists hate this idea. The idea that you can profit from a public resource drives them batty even though it is not costing anyone anything. It is just making some people wealthy. I can give you an example of what happened in 1993. Prior to 1993 in the state of New York, if you wanted to go clamming, you could go clamming. You didn't need a license. You could take however many clams you wanted and sell them. In 1993 the State decided, no, this was not a good thing. So they issued licenses and they said there will be a moratorium after August 15 or something and then there will be no more. Then they said, well, you can only take 14 cages a day and you can only take 21 cages a week. By the way, a cage of clams is 37 bushels. You can only take about 150,000 bushels a quarter and you can only take 500,000 bushels a year. This is industry-wide. So you've basically got a situation where 22 fishermen in the fishery vie for 500,000 bushels of clams.

Everyone agrees and the legislature agreed that these 22 boats chasing 500,000 clams was vast overcapitalization, which is true.

So in 1993 they established an outfit called the Surf Clam/Ocean Quahog Management Advisory Board which was made up of nine industry members, most of which were clammers. There were two processors and the rest were clammers. These people met for four years to come up with a plan to free up this insane regulation. They came up with the individual transferable quota plan which, as I say, is a marvelous solution which cuts down the cost of enforcement, brings capital within reach of the fisherman, provides him retirement if he wants to get out, and also will by operation of economics solve the overcapitalization problem because one of the purposes of establishing this board was to come up with a plan that would solve this overcapitalization problem.

They came up with this plan after four long years of fighting. It was an ugly thing to see, because it was basically nine unpaid fishermen taking a long night a month out of their work for four years to come up with this plan and, of course, when they came up with the plan, it was this back of the hand. We will not have ITQs here and that is basically where we stand. There will be no ITQs here and we are still working under this old plan.

Now, ITQs have worked, as I say, in several fisheries. In the EEZ [Exclusive Economic Zone], the zone between 3 miles and 200 miles which the federal government controls, they have an ITQ plan for surf clams and ocean quahogs. It has worked marvelously well. You have got a situation where it is taking a declining stock and it has brought it back. People are making money. Within the last four years they took the sable fishery and the halibut fishery in the Pacific, basically Washington, Alaska, and northern California and Oregon, and they turned that into an ITQ fishery.

Now, prior to the time this ITQ plan went in, if you wanted to go halibut fishing or sable fishing, the state or the federal government would establish a total allowable catch, and then when the season opened, anyone could go fishing. So what you had was these races going out of Puget Sound and the Alaskan ports to get to the fish, and basically the entire annual quota was caught within two days and you had horrible stuff going on. They would go out in this horrible weather and ships sinking, guys dying, because they would have to get to that resource before it was all caught up. It was a perfect situation for ITQs or individual fish quotas, as they call them out there. The effect on consumers of this silliness was you could buy fresh halibut for maybe two weeks a year and then the rest of it was all frozen. The result of these IFQs is now you can buy fresh halibut year round, it is a better product, the fishermen are not dying having to go out in bad weather to catch this stuff, and they also have a piece of capital here that they can borrow money on. It is just a marvelous situation. But it is resisted so hard by the government, it is depressing at times.

However, there is a light at the end of the tunnel notwithstanding what is happening in this state. In 1994 after the Republicans got in, because of a problem between the two senators from Washington and Alaska they imposed a moratorium on ITQ systems in federal fisheries, and they established a panel of the National Science Foundation National Research Council to study the question of regulation with ITQs. About two months ago, the National Research Council came back and after reviewing all the ITQs they have put their imprimatur on it. They say it is a great idea although there are these worries about "somebody is going to get rich here," which is totally unacceptable to bureaucrats. But at any rate, ITQs now have gotten the imprimatur of Congress or at least the council. The question remains as to whether or not the Congress will do it. A politician will fight science tooth and nail if it means it is going to be less power for the politicians, but we can hope that if we can get interest in this situation and put some pressure on our legislators, maybe we can have a return of freedom to the seas. That is to be sincerely hoped for.

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