Crab Ratz Problems Well Known Before Implementation

Almost Five Years Ago---The Northern Fish Council Ignored Working Fishermen Then, Too

Here is the naively worded testimony I provided the North Pacific Fisheries Management Council in early 2004, before implementation of Crab Ratz. The fact that none of the socially destructive aspects of Crab Ratz have been addressed to this day is a sad commentary itself.

North Pacific Fisheries Management Council

Re: BUY BACK MY BACK

First of all, I would like to thank you, the North Pacific Fisheries Management council, for waking me up. I had been asleep, and the cold bucket of water that was your crab rationalization plan left me blinking, sputtering, and drenched in outrage.

Because, to me, the rationalization behind rationalization isn’t rational. As a guy who first crabbed in 1984, who has banged and shoveled many tons of salt water ice, hooked and pulled through thousands of buoy setups, pushed, tied and clambered over hundreds of stacks of pots, and dealt on a personal basis with processors, skippers and boat owners, I felt I might be in a position to point out certain errors in the plan’s most basic logical underpinnings.

To wit:
The awarding of permanent buying privileges to a limited number of processors is not justified. If the vessel buyback program is sufficient compensation for the overcapitalization of boat owners, then a similar one time buyback program should suffice for the overcapitalization of processors. To step into the arena of the giving and taking away of freedoms, rights and privileges in a free society should not be the job of the Council, only the management of fisheries. To award buyer’s privileges to these entities is, I think, best understood in terms of the stripping the right of everyone else to buy fish. To extend this thinking logically everyone in the industry should be frozen in place, from cannery workers to deckhands, skippers and owners. Is it the intent of the Council to create a permanent caste system? I don’t think it is, so the Council must reconsider this awarding of the market to an anointed few.

Since the days of the daring Dutchmen in what was then New Amsterdam, free trade has been the engine that powers America. To create Lords of Commerce in the fishing industry is to apply a medieval solution to a modern problem. The Justice Department has numerous reservations about Processor Shares and has predicted a sticky goo of lawsuits. I must concur.

The elimination of consideration for crew, and the minimal consideration offered to skippers is not justified. Every argument offered to support the awarding of shares to processors applies to skippers and crew, who pay, on average, 40% of a boats daily operating expenses plus the cost of their own equipment, and the investment of many hours of labor, for what is only a chance to make money. If they were wage earners, with the owners taking all the risk, making all the investment, and therefore taking all the profit, there would be no claim. But they aren’t. Fishing is a venture, undertaken by contractually linked businessmen, three quarters of which are skippers and crew. The Justice Department hasn’t studied this aspect of rationalization, but surely a similar sticky goo of lawsuits is lurking in the wings for this, too.

I’m an old man, nearly 43, and I thought the sight of me, bent over my cane as I shuffle painfully up the long stairways to attend the meetings might engender a sympathetic ear on the part of the Council. What I have come to learn is that the North Pacific Fisheries Management Council is not so much a forum of the minds as an advocacy platform. In its well meaning desire to defer to the wishes and concerns of the industry, the Council has formed policy based on the interests of those groups most forcefully represented in the hallways, at the breakfast tables, and in the seats of the Council itself.

I expected to find fire breathing dragons and evil wizards at work when I first began attending Council meetings. To my surprise I spoke to a continuous stream of pleasant, intelligent, engaging people who were doing nothing more or less than their jobs, which was to represent their own interests and those of their employers. Processors, well-informed, well-funded, and well represented on the Council, mounted an impressive campaign, and are now a driving force in the process. Fledgling Skipper/Crew groups like the Gulf Groundfish Fisherman’s Association, the Crewman’s Association and the swelling Deep Sea Fisherman’s Union will probably grow up too late to join the big boys on the field before the game is over.

Still, the potential for backlash is enormous. Every lawsuit, every protest, every disparate group with an axe to grind at the Council’s table has the potential to further slow a process that can be tracked by counting the rings in its trunk. I therefore suggest these two changes:

1. That the number of processors allowed to buy fish in Alaska not be limited. A simple buyback program, in which excess processors would be bought out by those remaining, would be better still.

2. That a “Buy Back My Back” program be implemented to compensate long term participants in the industry:
A long term participant is defined as a skipper or crewman who fulfils his/her full seasonal contractual obligations.
The fund would have two tiers: one for Skipper/Crew participants during the qualifying IFQ years, and one for ongoing participants in the rationalized fishery.

Qualifying participants in the first tier would be assigned one point for each of the IFQ qualifying years in which he fulfils his contractual obligation. Acknowledging that Skipper/Crew often move from boat to boat while requiring contractual fulfillment for qualification recognizes the fluid nature of skipper/crew employment dynamic, while also recognizing the importance of dependable professionals. Qualified participants would receive a one time payment, amount depending on number of points, funded in a way similar to the vessel buyback program. This purpose of this payment would be to enable excess Skipper/Crew to leave the industry, or for those wishing to remain to buy into the industry.

The second tier would be comprised of present day contracted skipper/crew. Upon fulfilling his seasonal contract, he would be signed off by the boat owner and would receive a yearly dividend. The creation of a subsidized health insurance program as an alternate to a dividend could best bring permanent long term benefits to the community of fishers.

Such a program would address issues of equitable distribution of the resource to all stakeholders in the industry as well as fostering a stable, professional pool of contractors for the industry. I strongly urge that these changes be seriously considered as you refine the alternatives for GOA Groundfish and implement the BSAI crab rationalization plan.

I’m sorry I won’t be able to join you for this meeting. I know you’ll miss me. Right now I smell so strongly of squid juice that the automatic doors at Safeway open 25 feet before I arrive. I therefore officially support the efforts of Mr. Kwatchka of the GGFA, Mr. Soma of the DSFU, and the testimony supplied by Mr. Branson of the Crewman’s Association.
Thank You, Terry Haines

Almost five years ago, and the same issues sit on the table while our fishing communities suffer.

Mr. Terry Goes to a Meetin'--Chapter Four

I'm sitting at the Sheraton sushi bar feeling angry and depressed.
St. Jude is slumped beside me. Even he seems a little put off.

The Fish Council's Advisory Panel, its members only too aware they are being carefully watched by bankers in sweat stained suits, crumpled the Crew Quota Proposal and kicked it under the table. The majority of the A.P. officially signed off on the Crab Ratz Program, saying "the crab program is achieving most of its objectives and that many of the major changes identified in the Council's April Motion would de-stabilize the harvesting, processing, and community sectors and are not necessarily based on the findings of the Council's 18 month and 3 year reviews."

The real truth is jammed between those lines like the sweet greasy middle of an Oreo cookie.

De-stabilize means nervous bankers.

Most of the resistance to making reasonable tweaks to the program lie in the fact that so many owners have "doubled down": using their initially allocated quota as collateral to borrow money to buy more quota. Banks extended the "priviledge" of using quota as collateral because halibut and pollock quota has been such iron-clad investments. What the bankers now know is that the law gives no guarantee of rights, and in fact explicitly states they can be taken away at any time. Any proposal that might redesignate even a small portion of the quota changes the numbers for the crunchers and that makes them nervous.

This is, of course, a terribly short sided view. The real danger to the program, and to every fisherman, banker and processor with a stake in it is in not fixing it. Its easy enough to fend off those of us who come to the Council and engage in the process in good faith. Looming clouds of lawsuits based on the program's parentage are the real danger. Crab Ratz was hatched because Senator Ted Stevens sat on it, in a nest built by his son, Ben, and a flock of cronies. Dissenting voices were ignored. Even the former Council Chair admitted, after Ratz was pushed through, that unresolved crew issues were her greatest concern. The Senator's system of marking ears for corporate lobbyists who hired his son has cast a shadow across the industry from Adak to the Southeast salmon grounds. A slight alteration of shares over time is a far cry from having the whole shebang thrown out in a federal court. A real effort to correct the program could pre-emp this by making it a moot point.

Four members of the Advisory Panel deserve recognition for their minority opinion, "that it is premature to assert that the Crab Rationalization Program fully meets its original objectives, conservation goals or community protection needs...we recommend that analysis of the 90/10 split continue, while additional analysis on crew shares, WAG issues and ROFRs be initiated."

Signed: Beth Stewart, Michelle Ridgeway, Chuck McCallum, and John Moller.

And is is worth noting the Fish Council is a near autonomous body. They are no more bound to listen to the Advisory Panel than they are the President of Somalia. Or me for that matter.

Meanwhile the ongoing struggle to keep Ratz unchanged (Ratus Quo) is centered on Data Suppression. At the direction of the Fish Council and NOAA General Counsel, a number of studies are in progress that tend to confirm evidence that Ratz has had quite dramatic consequenses for working fishermen and their communities. Owners groups like the Alaska Crab Coalition have spend a great deal of time and money begging the Council to ignore the data, on the basis that it is still being gathered and analyzed and because such a poor job was done gathering Socioeconomic data prior to the implementation of Ratz that there is nothing with which to compare it. I tried to answer this lame circular argument in my official comment to the Council, below:

Red Headed Step-Crew

I'm sitting next to Dr. Fina in the hotseat. The twenty or so members of the North Pacific Fisheries Management Council's Advisory Panel are looking at me like a semicircle of angry bears. It is nearing five o'clock in what has been for them a long afternoon chewing tough flavorless staff reports and gulping unwise amounts of keg coffee. My proposal is in their packet--a scheme that would take something away from many of them, at least on the surface. I look down at "The Proposal" a single page in Mark Fina's vast binder (It is the same as the one below). The Advisory Panel members seem to find it a bit confusing. Hell, I find it a bit confusing (though no more confusing than most of the paper that passes through this panel).

But it will work.

I drift back in time --Branson and I showing up at the meetings before Ratz was implemented wearing sweatpants and rainboots, hand scrawled demands in our hands. Just look at me now--wearing slippers and jeans and the magic hat, with printed up demands right in their packets. We asked for all manner of things back then- (I put in one for a quota pool that would fund health insurance for fishermen) anything, really--value was obviously being carried away from the fishery like furniture after a fire and deckhands were sitting on the soggy lawn like confused stepchildren. Skippers were at least given a ratty folding chair...

Whoops my mind wandered a bit there.

To my left Panel member Mike Martin is fixing me with a flat emotionless gaze. I like Mr. Martin (damn that weakness!) He has a talent for details and is a hounddog for clarification. Later he will grill me like a king salmon steak.

I read the proposal aloud, mouth suddenly croaking dry. Nevertheless I stop with irritating frequency to expand on points (I am a terribly self important blowhard) and the bears begin to shift in their seats, realizing I will be seriously challenging their five o'clock quittin' time.

The Chairman opens the panel up for questions. I hold my breath. As nervous as I am the worst possible thing that can happen right now is that no one asks any questions. Its like hearing "Next!" as you begin your audition.

I needn't have worried. The questions fly, despite the lure of beer and sushi one mere circular flight downstairs. Mike starts. His list of questions is longer than santa's naughty list. Then more questions from the right and left. They bounce back and forth like a Williams sisters tennis match. With a voice like a Death Valley frog I try to answer.

The idea, I say, is to distribute the benefits of rationalization among stakeholders in a way more reflective of the pre ratz distribution.

"If the intent of the Council when they created the program was to privatize access to a public resource so that a small group of stakeholders can extract the maximum value from the resource to the detriment of other stakeholders, and that they be allowed to do so forever, without any investment in the industry, then I question that intent. If such was not the Council's intent then it is their responsibility to fix the program."

"Crew Quota would be unowned and simply harvested by working fishing boats without the onerous lease fee."

Lots of doublespeak has been written about crew compensation. Here's the bottom line: if you charge working fishermen a seventy percent fee to fish King Crab but tell him he can harvest more, that's like telling the McDonald's guy you have to bust him from ten down to three dollars an hour. The good news is you get to work lots more hours.

Gee, thanks mister!

In the end the Advisory Panel seriously looked at all the crew proposals. And that, my friends, has never happened before. Do I dare to hope?

Hope is good. Work is better. I'd better get back downstairs and see if I can't corral Denby or Duncan. And ask them questions.