Do catch shares shape market entrepreneurship and diversification in New England?

Joshua Stoll, University of Maine

Abstract:

Economic theory suggests that catch shares lead to the maximization of returns for quota holders by providing harvesters’ exclusivity to the resource and flexibility to choose where, when, and how to fish and subsequently market their catch. The NOAA Catch Share Policy aligns with this view asserting that “Combining Annual Catch Limits (ACLs) with the allocation of exclusive privileges to stakeholders can help meet total allowable catch targets, reduce the negative impacts of the race for fish, promote more stable, year-round fishing, and promote greater freedom and flexibility in fisherman business decision making than when ACLs are used alone” (pg 9). Testimony provided by Jane Lubchenco in 2011 at a congressional hearing on New England Groundfish Management to the US Senate Committee on Commerce, Science, and Transportation in 2011, further supports this perspective by way of anecdotal evidence. In this testimony Lubchenco explains that fishermen in New England “are beginning to realize new entrepreneurial opportunities under sector management.” She continues by describing three concrete instances where fishermen are developing new and innovative marketing strategies that create direct links between fishermen and end-consumers. These types of market entrepreneurship, which include a range of business arrangements that provide short (often direct) supply chains, serve two important roles in fostering coastal community resilience. First, fishermen benefit by earning higher prices for their catch. Second, these new market arrangements act to diversify the supply chain by creating a greater range of outlets through which fishermen can sell their product. This is thought to increase coastal community resilience by lessening the impact of market disturbances, such as that which was recently observed in New England by the temporary European Union ban on spiny dogfish caused by elevated levels of toxins in several shipments. However, beyond the examples provided by Lubchenco and a general awareness that some level of market transformation is occurring in New England, there is an absence of empirical data on the role that catch shares play in shaping seafood distribution patterns or the extent to which it is occurring. We hypothesize that fishermen that participate in catch shares such as the Northeast Multispecies Sector Program and Limited Access Scallop Fishery will demonstrate greater market entrepreneurship and be more diversified than those fishermen in the general category groundfish and scallop fisheries. We propose to investigate the relationship between catch shares and market entrepreneurship and diversification among fishermen in New England by surveying harvesters engaged in catch share and non-catch share fisheries. The results of our research will provide information about the extent to which fishermen are participating in new innovative and diverse market arrangements, thereby complementing Tier 1 Indicators for Catch Share Fisheries by furthering knowledge about revenue and profitability.