Background
The groundfish fishing capacity reduction program, or vessel buyback, was
implemented in 2003 by National Marine Fisheries Service (NMFS). The purpose of the program was to reduce the number of vessels and permits endorsed for the operation of groundfish trawl
gear in order to increase productivity in the groundfish fishery, help
financially stabilize the fishery, and conserve and manage fish. The program
also involved fishing capacity reduction in the California, Oregon, and
Washington fisheries for Dungeness crab and pink shrimp.
To participate in the voluntary program, groundfish permit holders bid for
reduction payments, and NMFS scored each bid against the bidder’s past exvessel
revenues. A reverse auction accepted bids whose amounts were the lowest
percentages of revenues. This created reduction contracts. A referendum on the
fees followed the bidding process. All seven fisheries (federal groundfish and
Washington, Oregon, and California pink shrimp and Dungeness crab fisheries)
voted in the referendum. A statutory formula assigned different weights to each
fishery’s votes.
On December 4, 2003, accepted bidders were required to permanently stop all
further fishing with the reduction vessels and permits. NMFS is revoking the
relinquished Federal permits, and NMFS will advise California, Oregon, and
Washington about the relinquished state permits. NMFS will also notify the
National Vessel Documentation Center to revoke the reduction vessels’ fisheries
endorsement, and will notify the U.S. Maritime Administration to restrict the vessels’
transfer to foreign ownership or registry.
Vessels participating in the program must be sold, scrapped, or converted to
nonfishing purposes, and the owner must agree not to use the vessel for fishing
again.
Program Financing
The program’s maximum cost is $46 million, of which a 30-year loan will
finance $36 million. Future fish landing fees will be used to repay the loan.
Each of the seven fisheries involved will pay fees at different rates. Congress
appropriated the remaining $10 million of the program’s cost.
Accepted Bidders, Vessels, and Permits
One hundred eight groundfish permit owners submitted bids. These totaled $59,786,471. NMFS accepted 92 bids. These totaled $45,752,471. The next lowest scoring bid would have exceeded the program’s maximum cost.
The accepted bids involved 92 fishing vessels as well as 240 fishing permits. Ninety-two
of the permits were groundfish trawl permits, and 121 were crab and shrimp permits.
The remaining 27 were other Federal permits.
NMFS received 1,105 timely votes in the referendum. After weighting, 85.85% of the
votes approved the fees. The referendum was successful. The reduction contracts
are in full force and effect.
Buyback Timeline
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February 20, 2003: Congress enacts the fishing capacity reduction program.
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May 28: Initial notification of the program published by NMFS.
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July 18: Final notification published by NMFS; fishers invited to propose bids.
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August 4: Bidding period opens.
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August 29: Bidding period closes.
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September 30: NMFS mails ballots to referendum voters.
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October 15: Referendum voting period begins.
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October 29: Referendum voting period ends.
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November 4: NMFS publishes a notice listing the accepted bids.
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December 4, 2003: Accepted bidders required to permanently stop all further fishing with the reduction vessels and permits.
Links
Buyback in the News
PFMC
04/27/06
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