Feeling the Pinch

Too little too late? Feds to refinance 2003 commercial-fishing buyback loan

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This month, Congress announced it would work to reduce the financial strain on commercial fishermen who participated in a federal buyback of permits and fishing boats, mostly draggers, in California back in 2003.

There’s a bill in the House to refinance a buyback loan at a lower rate than the 6.97 percent set by the feds when the buyback was enacted. It also reduces fees collected under the program from a maximum of 5 percent to 3 percent.

It’s welcome news for commercial fishermen—but what good did the original buyback do, if any?

Liz Ryan, a fisheries expert with the National Oceanic and Atmospheric Administration (NOAA), says that the buyback program, aimed at reducing fishing pressure, worked under the principle of the reverse auction.

Fishermen who offered the lowest for-sale price to the government were the first to
have their boats and permits bought out.

Those fishermen got cash in exchange for giving up their boats and permits. The boats were permanently retired from fishing, the permits torn up. The remaining California groundfish fleet was then on hook for a combination loan-grant program that sent $37.5 million via the government loan, and another $10 million in grant money, to fishermen willing to hang up their skins.

“The loan has to be paid back by the industry itself,” says Ryan. Under the program, loan payments are taken directly out of fish sales, and sent to the feds by the buyers. But more than a decade after the buyback, which affected 91 boats and 239 permits, NOAA can’t say whether the program helped save collapsing groundfish stocks in California, which comprise 90 species.

“It was the buyback’s intention that the fisheries recover, but it’s not as if we have the staff,” says Ryan, to monitor the efficacy of the program. “You can’t say that the buyback has helped these fisheries to recover.”

What you can say, adds NOAA spokeswoman Connie Barclay, is that “it’s one of the tools contributing to the ending of overfishing.”

For Bodega Bay fisherman Tony Anello, the buyback program was an example of “closing the gate after the cows have already left.”

Anello supported the move to reduce the number of draggers in the state commercial fleet. It’s a destructive, wasteful way to harvest the ocean’s bounty.

Anello and his family run crab boats in Bodega Bay and own the Spud Point Crab Co. He says pressures on Dungeness crab, combined with a very shaky salmon fishery, means uncertainty is still the rule of the day—and fishermen are hitting the crab hard to make ends meet.

Anello has already seen a drop-off in his crab catch this year. His traps are now coming out of the briny with one to four crabs, he says.

“Right now, the crab industry is overcapitalized,” he says. “I’m surprised that the fishery has held up as well as it has.”

And forget the salmon, he says. “If you don’t catch enough crab during the season, you’re going to starve. There aren’t enough salmon.”

Humboldt State University economics professor Dr. Steven Hackett has researched the socioeconomics of fisheries management and asks the question: “How do you sustain fishermen and the industry cluster that surrounds them?”

Bodega Bay has an interlocking economy driven by fish and crabs: there are slip fees, fuel docks, fish processors, marine engine repair shops. The main impediments to sustaining a healthy industry cluster, says Hackett, are a tight regulatory climate factored in with prohibitive costs to enter and maintain a commercial-fishing business.

“We’ve seen years where people really struggle,” he says. “And it doesn’t take too many of those before you have to find another line of work—and that cascades into the industry cluster.”

Note: This article has been updated and corrected to reflect the accurate interest rate currently charged to fishermen, and with additional information about a proposed adjusted fee schedule for participants in the buyback program.



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