Wednesday, March 13, 2013

California Fisheries Fund Loans Help Fishermen Strive for Sustainability

Commercial fishermen and environmentalists don’t often find themselves on the same boat, collaboratively eyeing the horizon. All the same, fishermen realize the need to protect the resource that feeds their livelihood.

Steve Fitz certainly does.

In 2012, Fitz – who fishes out of Half Moon Bay, California – used a loan from the California Fisheries Fund (CFF) to glean the extra financial assistance he needed to buy the F/V Mr. Morgan from his uncle (also Steve Fitz) and start Mr. Morgan Fisheries, specializing in sustainably harvested groundfish and Dungeness crabs. Fitz said the funding “allowed me to purchase my boat, start my business, preserve my strong family fishing heritage, upgrade my fishing equipment, and bring a higher quality and sustainable product to the dock.”

The loan not only helped Fitz expand the family business, but gave him a chance to continue a family tradition of having the nation’s only commercial fishing operation to use Scottish seine gear. Phoebe Higgins, the CCF director, calls it “an eco-friendly fishing technique that gently herds fish into the path of lightweight nets without dragging heavy and destructive gear on the ocean floor.”

Developed in Scotland in the 1920s, these seine nets are considered by many observers as the most environmentally friendly flatfish harvesting method used by the West Coast trawl industry compared to traditional bottom trawling. Environmentalists say the traditional method leads to higher by-catch numbers and adverse impacts to seafloor habitats.

Fitz describes the Scottish seine as “more environmentally benign.”

The net has no steel trawl doors or cables, and the lightweight net is only used on smooth, sandy bottoms, not in rocky undersea terrain. Its lighter construction and slower, kinder, gentler harvesting and lower impact on ocean bottom habitat led to an exemption from 2005 federal trawl closure areas off the California coast.

Fitz grew up fishing with his father in Cape Cod, Massachusetts, and first learned about the Scottish seine method in 1975. He later moved west, earned a business degree at the University of Denver, and in 1993 migrated to Half Moon Bay to fish with his namesake uncle. In 2000, he began serving as co-captain of the F/V Mr. Morgan, a 66-foot steel boat built in Louisiana in 1979 that began life as a Gulf Coast shrimper.

Mr. Morgan Fisheries is known for its sand dabs, petrale sole and chilipepper rockfish managed under a federal trawl catch share program launched in 2011 and touted by EDF.

“Like all other participants in this program, the Mr. Morgan receives an individual fishing quota for several groundfish species that may be harvested throughout the year, with requirements for full accountability of every pound of fish harvested and a human observer on every fishing trip,” EDF officials stated, noting that the new fishing practices “guarantee no overfishing.”

Fitz, they noted, can use the “100 percent federal at-sea monitoring no overfishing guaranteed” label to market the fish.

It’s nothing new to the Fitz family, who have helped lead the way in sustainable fishing for many years, including participation since 2007 in a program to identify overfished species “hot spots” and help fishermen avoid catching at-risk stocks. Fitz is among the “future friendly team” of fishermen involved with the Half Moon Bay Fishermen’s Association, which states that it’s “dedicated to supplying our community with the freshest, locally and sustainably caught seafood.” He’s often found selling fresh fish off the boat at the dock in Half Moon Bay’s Pillar Point Harbor.

Higgins said CFF’s loan to Fitz “is helping to preserve the presence of a family fishing operation that has become an important player in harvesting groundfish with selective gear in the historically and culturally important Half Moon Bay area.

Fitz joined Higgins during the January awards ceremony at the California Environmental Protection Agency headquarters in Sacramento, where EDF received the Governor’s Environmental and Economic Leadership Award (GEELA) for the CFF loan project. GEELA recognizes efforts by individuals, organizations and businesses that “successfully achieved measurable environmental and economic outcomes in preserving the state’s natural resources through innovative partnerships.”

More and more, “Americans want locally-caught, environmentally-sustainable seafood,” noted Higgins. “The challenge comes when fishermen try to make the transition from unsustainable to more environmentally friendly fishing methods. They need financing, and often banks do not invest in commercial fishing.” Fishermen need that financing to switch to fishing vessels and gear that minimize habitat and fish damage, target the most abundant species of fish, avoid threatened species, and comply with ever-growing federal and state regulations. The CFF provides those funds, but there is a “catch.”

Funds for Fisheries
CFF was launched in 2008 by the San Francisco-based Environmental Defense Fund (EDF), a national non-profit focused on what its directors call “transformational solutions to the most serious environmental problems.” EDF forges scientific, economic and other “innovative” partnerships to reach those solutions.

The CFF offers low-interest loans to fishermen and fishing businesses to improve operations that support eco-friendly seafood. Higgins said the fund aims to remove economic impediments for fishermen who want to fish more sustainably and “lends throughout the entire supply chain, from sea to store.” Those loans are available to fishermen who are part of the groundfish catch share management program, because Higgins said it “provides confidence” that the fisheries are sustainably managed. The fishermen’s catch share quotas can be collateral for a CFF loan.

According to the CFF website (, the revolving loan fund invests in fishermen, fishing businesses, ports and port communities. The loans – either term (1 to 10 years) or line of credit with interest rates of 4 to 8 percent, depending on market interest rates and specific borrower circumstances – are available to fishermen, processors, distributors, ports, communities and nonprofit organizations. The funds can go toward gear purchase or modification, vessel purchases or improvements, fishing permit or quota purchases, capital equipment upgrades for dockside infrastructure, processing capacity and transportation, or working capital for business growth.

Higgins and others say access to capital can make a difference in whether fishermen oppose or support new regulations that require more sustainable practices. EDF, which raises the funds itself to underwrite the CFF, is attempting to expand the program by partnering with major banks. Bank officials say EDF’s contribution takes away some of the risk of the lending process for the banks, helping them to offer the loans at lower interest rates.

Keeping up with regulations and sustainable practices is a key to survival for commercial fishermen.

Saving the Sea’s Bounty
Despite the ongoing diversity and abundant production of the nation’s fisheries, most of the seafood eaten in the United States is imported.

Commercial fishermen note that most of the protections built into US fisheries management are not enforced elsewhere, and many of the most marketable species are caught or farmed without considering sustainability.

Choosing US wild-caught seafood supports fishermen, like Fitz, and their families, who want to preserve the resource to maintain the fishing heritage.

For many years, agency and fisheries officials say California fisheries struggled with dwindling fish stocks and income, putting the fishermen in a catch-22 situation by depriving them of the money needed to upgrade equipment just to keep up with changing requirements.

A 2010 study by the National Ocean Economics (NOE) program valued California’s ocean-related economy at $43 billion, providing more than 474,000 jobs. Commercial fishing landings statewide reached a peak of more than 900 million pounds in 1981, but had dropped to 297 million pounds in 2005 for various reasons, among them “overfishing and misguided regulation.”

In 2011, the sustainable fishing management program known as catch shares went into effect for more than 60 species of West Coast groundfish – among them, sand dabs, sole, flounder and cod – designed to give fishermen a secure share of the overall catch. EDF officials say the new system “righted the fishing management ship, giving fishermen the right to catch a certain amount of fish each year and the responsibility to not exceed it.”

Higgins said catch shares give fishermen “a direct investment” in the fish stock, because as fish populations rebound, the value of their shares grows.

Why Quotas?
Not long ago, the West Coast groundfish industry was sinking under the weight of overcapitalization.

Fishermen and others say the federal government sowed the seeds in the 1970s by guaranteeing low down payment, low-interest loans to fishermen to build up the fishing fleet so they could “Americanize” the fisheries within the established 200-mile territorial sea zone. By 1991, overcapitalization reigned, with the fleet boasting “too many vessels to harvest available resources.”
Poor ocean conditions complicated matters.

Declared a disaster in 2000, the fishery foundered, along with communities that depend on it. In 2001, fishermen proposed a government buy-back program, which launched in 2003 and reduced the fleet by half.

Even so, managers say the fishery remained overcapitalized, and the search began for other ways to restore a fishery whose landings dropped by 70 percent in two decades, from an average of 74,000 tons in the 1980s to 22,214 tons in 2007. Revenues fell from $47.3 million in 1997 to $22.2 million in 2007. Major declines in nine of 82 groundfish species led to the 2000 federal fishery disaster declaration, and the Pacific Fisheries Management Council (PFMC) listed seven rockfish species as “overfished.”

What They Are
The PFMC, which governs fishing in federal waters off the coasts of Oregon, Washington and California, rode a five-year wave of controversy toward its final decision on establishing an individual fishing quota system for the West Coast groundfish fishery. Before the council decided, 13 members of Congress sent a letter, asking them “to support a fair, well-designed IFQ program that will transform the groundfish industry from a fishery struggling with by-catch problems and economic stagnancy into a vibrant, ecologically, and economically sustainable fishery” that would benefit fishermen, processors, coastal communities and the fishery resource.

Many other individuals, agencies, councils, commissions and others weighed in, and many say they would watch carefully as the system settled in.

“Catch share” is a catch-all term for fishery management strategies that emphasize individually determined fishing quotas that require those who ply the oceans to stop fishing when they reach their specified limit. Whether the term is an acceptable form of speech or used as part of a muttered curse depends on who’s talking.

Under traditional fishery management, fishermen compete for the total allowable catch, which often turns into a fishing derby as vessels rush to haul in as much as they can before the overall limit is reached.

NOAA officials say it creates a situation with “too many vessels going after too few fish.” Fishing derbies, they note, put more boats and gear in the water than necessary, exceed quotas, lead to high by-catch levels and unsafe fishing conditions, and create a glut in the market, reducing the economic value to fishermen and coastal communities.

“Catch shares allow fishermen to plan their businesses better, and be more selective about when and how they catch their allotment, because they know their share of the fishery is secure,” said Jim Balsiger, acting administrator of NOAA Fisheries Service at the time the agency announced its proposed catch share policy in 2008. “They also help ensure fishermen adhere to annual catch limits, because the value of their share is directly linked to the overall health of the fish stock and its habitat.”

Fishery managers say they are committed to finding ways “to make the health of the oceans go hand-in-hand with the prosperity of fishermen and the well-being of coastal communities.”

Advocates of catch shares say the current fishery management system of trip limits, area closures, and gear restrictions to protect and restore fish populations isn’t working. They say quotas are needed to revive fisheries and to protect and restore fishing communities and jobs, noting that catch shares decrease costs and boost fishermen’s revenue through greater efficiency, yields, and dockside prices. Catch share programs divvy up the total allowable catch into specific allocations – or shares – for fishermen, cooperatives, communities, processors, and others, who can only fish until they reach their assigned limit. Once they reach the limit, they must stop fishing.

Shares are typically allocated based on historical participation levels in the fishery. The fishermen can decide how to catch their allotment when weather, markets, and their individual business conditions are most favorable.

NOAA officials say allocating shares “eliminates the biologically and economically wasteful race to capture a share of the total,” and the fishermen “gain an incentive to conserve fish stocks, avoid market gluts, and catch their allowable share of the total at the least cost.”

Opponents said – and still say - quotas would decimate the fishery, calling it de facto privatization of a public resource and another regulatory burden in an already over-regulated industry.

Supporters say the catch share program gives each boat a guaranteed “share” of the allowable groundfish catch for the year based on a combination of he each vessel’s catch history and size. That guarantee, advocates added, allows fishermen to fish at their own pace, and since they can fish when prices are best, they can earn a higher profit from fewer fish. It also protects the resource by giving fishermen an incentive to harvest in a more efficient way that rebuild stocks. Fishermen can use their allocated share to harvest, or they can trade or sell it.

Here to Stay?
Catch shares remain controversial, but they are now an inevitable fact of fishing life for groundfish fishermen like Fitz.

Sustainable fisheries are considered an “essential component” of national ocean policy, and NOAA policy supports catch shares as a way to manage fisheries at sustainable levels, and boost their economic performance. According to the agency, well-designed catch share programs “help rebuild fisheries and sustain fishermen, communities, and vibrant working waterfronts, including the cultural and resource access traditions that have been a part of this country since its founding.”

Opponents remain cautious. Advocates point to results.

A 2012 NOAA report indicated that the catch shares program is improving sustainability. It cited a “dramatic reduction” in by-catch and discards under the new approach. Under this system, the report reiterated, “Fishermen have time to fish more carefully and when weather and prices are best. As a result, they can bring in higher quality fish for a higher price.”

Recent NOE numbers indicate that California fisheries landings are improving, with 438 million pounds landed in 2010.

Even so, finding money for upgrades and equipment changes has proven difficult, which is why the CFF was founded.

“As catches plummeted and fishing costs rose, banks were increasingly unwilling to extend loans to fishermen,” states an EDF news release, noting that the CFF was initiated to help West Coast fisheries “transition to sustainable and profitable fishing.”

So far, 14 loans totaling almost $1.7 million have gone to 11 borrowers. In addition to Fitz, three other California commercial fishermen – Roger Cullen, Bill Blue and Geoff Bettencourt - are among those borrowers. Cullen aboard F/V Dorado and Blue onF/V Morning Light fish out of Morro Bay, while Bettencourt plies the seas from Half Moon Bay aboard F/V Moriah Lee.

David Crabbe, another long-time California-based commercial fishermen, is on the CFF fund advisory committee.

CFF also sponsors the Fisheries Business Network, an informal network of fishermen, processors, distributors, retailers, restaurant owners and others looking to boost fisheries sustainability and profitability. Commercial fisherman interested in obtaining a loan through CFF should contact Higgins at or call 415-293-6120.

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