INTERVIEW TRANSCRIPT - Richard Allen

In general terms can you describe how the fisheries are doing here?

I think the lobster fishery, in particular, has been viewed as doing quite well; they’re viewed as running opposite to the trend. We’ve had increase to the landing in the last twenty years or so - we’re twice as high as what was estimated to be maximum sustainable yield. And people say, great, we keep setting new records and landings every year, the resource is healthy, we’re seeing a lot of young lobsters coming along.

At the same time, the scientists are telling us that we’re really pushing this fishery very hard, and we’re running the risk of stock collapse because we don’t have enough females producing eggs and not enough eggs, and so there’s quite a bit of concern. So while we have what is generally viewed as a healthy fishery, we also have a lot of advice that we should be doing more to conserve the fishery.

You put a lot of credence to what the scientists are saying, but how about your colleagues out there, the lobster fishermen?

Well, I think I’ve had an opportunity, through my career and my involvement in the fishery management process, to really get a lot closer to the science and be a lot more involved in it and get a better understanding of what it really is that the scientists are telling us. And the fact that they say we’re over-fishing doesn’t mean we’ve depleted the fishery — they’re saying we’re running a high risk of pushing the fishery beyond what it can stand.

Whereas a lot of the people in the fishing industry, when you tell them this fishery is over-fished, they think they should be seeing low catches. And when they’re seeing high catches and somebody tells them the fishery is over-fished, it just doesn’t add up to them; doesn’t make sense. So there’s a lot of feeling that the scientists just really don’t know what they are talking about.

In my view it’s that people don’t really understand what the other person is saying. And that’s why the project that I’m working on is to try to overcome some of that misunder-standing by giving the fishing community the same tools to work with as the scientists have. And so if they can both use the same tools, and get a better understanding of what the other side is saying, then I think we’ll make more progress in the long run.

If the lobster fishery were to collapse, what kind of impacts would that have in this community?

Well, I think people focus on the groundfish fishery as being a real catastrophe in New England, and when you think about the impact that the decline or collapse of the lobster fishery would have it would just make the groundfish problem look like small potatoes. I mean, the lobster fishery is so large — it’s the single most valuable fishery on the Atlantic coast; it’s worth 250 to 300 million dollars dockside, plus the multiplier effect throughout the economy — that so many communities, so many people involved in the lobster fishery, if it goes downhill, it would really be devastating. And the recovery time would be so long that it would just be one of those things that there would be no quick fix to it.

We hear a lot about the impacts of bottom trawling on essential fish habitat. Does that affect the lobster, the health of the lobster fishery?

Nobody can really say for sure what those impacts are. There’s a tremendous amount of controversy. It’s all the way from plowing the bottom and stirring up nutrients and aerating it and making it healthier to devastating it. And we have a pretty good relationship with the trawlers in this area, and there tend to be certain grounds that the lobstermen fish and certain grounds that the trawlers work. And at times some of the most productive grounds where we catch lobster are grounds that at other times of the year are where the trawlers work. So I don’t think there’s a lot of feelings here that it’s an overall bad situation.

How do we reduce the fishing effort? What is the solution to the problem, in your point of view?

I think the fundamental failure that we’ve seen in the fisheries management systems has been that they try to push everybody down. Their restrictions apply, usually across the board — the catch has to be reduced, the fishing effort has to be reduced. And so we push everybody down to where it’s uneconomic to be fishing. Nobody has the ability to say, ‘Well I can see my future in this fishery as being a good one; I can adjust to these changes.’ The attempt is to just to make everybody go broke together is the way I see it.

And so the natural reaction that the people have is that they have to fight against that. So the short-term interest that the people accuse the industry of is just a natural thing. They just don’t see how they can survive, given the restrictions that are proposed. The payoff in terms of conservation is usually too far down the road for people to say, ‘Oh yeah, I can cut back and then things will be better for me in the future.’

And so until we come up with a system that allows some people to make a choice to do something else, and some people to still maintain a viable fishing business, I think we’ll continue to face these fishery management failures. We need some kind of a system of transferable fishing rights, where the people that are getting out can sell out to the people who want to stay in. Instead of having two business each going broke we might have one successful business and one that’s gone and done something else but has been compensated for doing that.

We are going all around the world; we’ll be looking at community-based fisheries in Papua New Guinea and all over the western Pacific where traditional ways they’ve managed their fishing for century is no longer true. They are now in a money economy, now we’re able to refrigerate fish and jet them all over the world. Global economy is weighing in badly in areas where traditional fishing rights and management used to sustain a fishery. Can you compare this idea of individual fishing quotas to traditional methods that have been used successfully elsewhere in the world?

I don’t claim to be an expert in world fisheries management systems. I do think it’s interesting — I’ve heard a lot of people say that there is no such thing as a successful fishery management system anywhere in the world. I look at it as a challenge. I’d like to be able to go out and find out if there are really successful fisheries management systems out there.

But clearly people do point to some traditional systems that, in my mind, had a lot of attributes similar to something like transferable fishing rights, where either the tribe or the clan or the chief allocated the rights. And as you say, they weren’t necessarily in a money economy so they weren’t transferable in the same way on the free market that you might have today, but they were pretty well defined exclusive fishing rights.

And I think those systems are breaking down, because people are getting into the industrialized economy and the free market. And so the global economy is impacting even those systems that had been successful. And what we need to do is to find a system that will work in the free-market economy and that’s what I see has happened in the rest of our economy. The creation of property rights and the ability to have transferable property rights is really the foundation that our economy runs on.

And if we can bring fisheries into that kind of a system I think we’ll be much more successful than trying to maintain a kind of command and control system where the government tries to decide just how the fisheries should operate and come up with all kinds of regulations to divide up the catch and decide who’s fishing and who’s not fishing and what kind of fishing businesses they can run and what kind of gear they can use. It just hasn’t worked and we need a fundamentally different system.

Some say ITQ’s and property fishing rights might be an incentive to fishermen, just like with houses, to fish in a cleaner way and in a less hurried way, because there’ll be less competition, and they can go at it in a more thoughtful manner. And the value in their property, as the fishery recovers or as the fisheries thrive, become more valuable. Do you see a way of promoting stewardship of the fisheries?

There is no question in my mind that when people have an ownership in a resource they would want to improve that resource; if it’s not open to everybody, if they make an improvement. I see it like you wouldn’t put your money in the bank if they were going to give out keys to the bank to everybody that came along; if everybody could walk in and take your money out you wouldn’t put your money in the bank.

Well, if you invest in fishery conservation, which is really what conservation requires, an investment — somebody has to withhold catching today in order to leave something in the water to grow and reproduce. Now if they can’t have that expectation of getting that return when it comes, if somebody else could come and take it, well, there’s not a lot of interest in making that kind of an investment.

But if you say to somebody, okay this is your resource — and not one individual, but as a group of resource owners — if you say this is yours, if you invest in it, conserve it, whatever payback comes you will be able to share in that, I think that will turn the whole system around.

When you speak in favor of individual quotas that are transferable, what do you say to all the fishermen that are afraid that basically this will create vertical integration and consolidation and they’re going to get closed out?

Well, the first thing I say is: look at the alternatives. You’re getting constantly pushed down and down and down. What kind of a future do you have in the fishery the way it’s going now? Your flexibility is getting eroded; you just don’t have the opportunity to run a good business; you’ve got to look for something different.

And when you look at something like transferable fishing rights — yes, there is a great fear that large corporations, people with money, will be in a better position to buy these out; concentrate the industry — there are many things that can be done to avoid that.

There are all kinds of social engineering constraints that can be put on systems of transferable fishing rights. You can put caps on the amount that any one person can own; you can require the owner of the fishing right be an active participant in the fishery; if it’s profit that’s attracting all this big money, then you can tax it away. I’m not really in favor of that myself — I’d like to see things left in the private sector — but that is one way to do it.

So there are a lot of ways you can avoid the industry being attractive to big money and getting taken over. And the other thing is, too, that any of the systems that we have, any of the alternatives, if we accept that we’re going to have limits, that it’s not going to be an open-access fishery, then most of those other systems have the same potential to be taken over by big corporate interests, the people with money.

Whether you have limited licenses or whether you have transferable effort units — traps, days at sea compared to quota — they all have that problem. And we’re gonna have one of those systems. If we’re gonna have it with ITQ’s, we’re gonna have it with other systems, and we have to deal with it which ever one we adopt.

You said earlier that it’s better to have one endeavor that can make it, rather than two endeavors that go broke.

Well, it’s interesting to me that economically the fishery would be better off to be fishing on a much more conservative level. If you look at the theoretical economic approach, a bio-economic approach, if we allow the fishery to get out to a depleted stage, with a lot of fishing effort, we can actually get rid of a tremendous amount of that fishing effort, rebuild the biomass to a much higher level, have a much healthier stock, be taking the same amount out, but be making a lot more profit.

And so it’s almost like one of these win/win situations that everybody strives for — you can cut back on the fishery after it settles out again, you have a much healthier resource, you have people making a lot more money, being a lot more profitable. You may not have as many people; you could still have just as many people, just they wouldn’t be as efficient.

But you have to have a system to bring that kind of change about; you can’t just let it go wild like we’ve done in the past.

I think that one of the things most frustrating to me in my involvement in fishery management is: it seems like we could have such a win/win situation. But right now we’ve depleted stocks, we have a fishing industry that isn’t economically healthy, and if we can get the right system that’ll move that whole fishing effort back to a lower level of fishing effort, we’ll have healthier stocks producing more fish, more fish now and in the future; we’ll have nice, sustainable fisheries and we’ll have people making more money. And so it’s a question of how do we get from here to there. I think there’s a clear way to do it, without a lot of pain, but I think the system just has to be radically changed in order to accomplish that objective.

Would you like to say anything else?

I’d like to get across this point: that there really are no trained fishery managers around the world. There are very few, if any, schools that train people in fisheries management. And it’s a highly complex field. We have mostly biologists who have come up through the ranks who are put into policy-making positions which involve much more than biology and we have fishermen who are good at running fishing businesses but aren’t necessarily able to step back and take a look at the big picture of how a fishery operates.

We have a lot of economists who have studied, and in my mind probably have some of the best ideas on what’s going on, because some of the economists look at their field as studying human behavior, and that’s what we’ve got — there is human behavior and incentives. And what we really need is to get more people who are involved in the study of fishery management as a field itself. And much more dialogue with the industry.

So do you think that there is a flaw in the system, the way the nine regional councils are set up?

It’s not just the regional councils, it’s the whole fishery management system, from the state level to the federal system. I think the fishery management traditionally was always looked at as a biological problem. You had to study the fish, and you had to make changes to do with the fish. And it’s only recently that people have really realized that it’s an economic activity. A fishery is really an economic activity and the way that you affect the fish populations is much more through the economics of the business. And you have to make the economic framework right before you’ll get the biology right.

But when you’ve got a system that was built on biologists, just getting that kind of change in thinking and getting that kind of people that you need and the emphasis other than biology I think is tremendously difficult. If you look at a lot of the biological controversy — and the lobster fishery is a perfect example of this — the whole system is mired in controversy over the stock assessments and the biology. The only reason there’s all that controversy is because of the economic implications of the biological advice.

And yet nobody is looking at the economic situation that we’re in and trying to say, well what is the field of economics tell us about dealing with theses problems? The United States Marine Fisheries Commission just came out with a list of research priorities. The first 28 are all biologically oriented. Number 29 made some mention of socio-economics. And the problem is really a socio-economic problem.

A lot of people are saying the biological data — stock assessments and understanding fish population dynamics and understanding the whole ecosystem of fisheries — is in its infancy. Therefore, even with ITQ’s there has got to be a total allowable catch and to arrive at that total allowable catch, the precautionary approach might need to weigh in.

The precautionary approach is one of those win/win situations. The maximum economic yield from a fishery is usually realized at a point below the maximum sustainable yield. And so if you manage to maximize the economic returns from a fishery you’ll be operating in a precautionary way; that you’ll keep the fishery below its maximum potential physical production but you’ll maximize its economic productivity.

For most people, that’s really what they’re interested in — getting the most we can in economic terms out of the fishery. Whether we get a few extra pounds of fish is not really critical. Both the consumers benefit and the fishermen benefit if we operate the fishery at maximum economic yield.

And so if we could just find a way to move back — we’ve gone beyond maximum sustainable yield, we’ve gotten beyond maximum economic yield. Now the goal in the law is to move to maximum sustainable yield, better to move even further back in terms of healthy fish stocks to maximum economic yield. And everyone would be better off, including the fish stocks.

So in that sense, does supply ever really meet demand?

Supply always meets demand. In general terms you’d be producing the same amount of fish putting it into the market at the point of maximum economic yield, as you are at the point where all the profits are dissipated, the open access equilibrium, where you got far too much fishing effort producing fish from a depleted fish stock; they’re not producing as much as that stock could.

You could work on the other side of this production curve and be working on a healthy resource, taking the same amount out of a healthy resource as you’re taking out of a depleted resource and- but using far less effort. So the cost of producing it is much less. Use a fraction of the effort and a fraction of the production cost to produce the same amount of fish, which means there’s a lot of profit there.

And that’s what the economists’ term, economic rent. And whether that rent stays in the fishery or whether the government collects it doesn’t matter to the fundamental question of where you’re going to operate the fishery. It’s a kind of a political choice of whether you think the government is better at spending money than the private sector is.

Are you saying that if the stocks that are being depleted are allowed to rebuild, then it becomes less costly to catch them, and therefore the profit increases?

What happens in a fishery that’s an open-access fishery that’s left to run it’s course, is that as long as there’s any profit there, more and more people come into the fishery. So that eats up all that profit. When it gets to the point where there’s essentially no profit, then it stabilizes. Usually that’s to the point where the resources started to decline, you’ve got a lot of people just barely making it so they’re resistant to new regulations coming in.

If you have a system that gets rid of some of that fishing effort, that allows the stocks to rebuild so you get a much healthier stock, you’ve got less fishing effort, so what they call the "catch per unit" effort is much higher. So fishermen are going out having a lot easier time catching fish and they don’t have all the competition from the other people using up the costs of effort, so the profits are higher, they’re producing the same amount of fish as before with a lot healthier stock.

So it’s just amazing that people can’t see the benefits of moving to that kind of a management regime.

So the production levels remain the same?

The production levels will stabilize at comparable levels. In order to get the stock rebuilt you have to have a period when the catches will go down. You’ve got to put some stock back into the fishery, let it build up. So there’s a period of time when you got to have lower catches, but once you get the stock rebuilt you’re going to be taking out just as much but with a lot less effort going in.

So your cost of production are much less, profits are higher, consumers are getting the same amount of fish, usually with more size variability in the catch than a lot of fisheries — that’s important. Like in the lobster fishery you can get at least a dollar a pound more, for say a two-pound lobster than you can for a one-pound lobster, because there’s scarcity. Consumers want more two-pound lobsters; they’re willing to pay more for them. So the consumers benefit if you create a fishery in which they’re getting more two-pound lobsters. And the fishermen would benefit — they get more money for the catch. And the stock would be healthier because you got more big lobsters producing more eggs.