The Japanese Journal of American Studies, No. 21 (2010)

Challenges Faced by the U.S. Fishery Policy inOvercoming Overﬁshing in Federally Managed
Waters: Shifting from Traditional to
Responsible Fishery Management
for Sustainable Seafood

Takanori OHASHI*

INTRODUCTION
The total amount of seafood consumption in the United States has beensteadily increasing and is second only to Japan and China.1 Seafood consumption in the United States as well as the rest of the world is expected
to increase further with growing awareness of its health beneﬁts.2 The
Food and Agriculture Organization of the United Nations (FAO) estimates that the continuing global demand for seafood will exceed supply
in the future and that marine-capture ﬁsheries will be unable to meet thisdemand.3 Fish is an important source of animal protein. However, theincreasing demand for natural resources such as ﬁsh can lead to theirdegradation; moreover, waste from the exploitation of natural resources
will increase if not managed sustainably. In other words, renewable
natural resources like ﬁsh can be naturally replenished, thus ensuring an
indeﬁnite stream of beneﬁts only if managed properly. The most important question is how can we continue to meet the growing demand for

Copyright © 2010 Takanori Ohashi. All rights reserved. This work may be used, with thisnotice included, for noncommercial purposes. No copies of this work may be distributed,
electronically or otherwise, in whole or in part, without permission from the author.
*Assistant Manager, Fisheries Agency, Government of Japan

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seafood in a way that is sustainable in the long run. Therefore, when considering a sustainable supply of seafood as a source of food, the importance of “ﬁshery management” cannot be overemphasized.
Overﬁshing has become a global concern: it could result in the depletion of ﬁsh stocks,4 thereby threatening future seafood consumption as
well as the economies of nations and communities dependent on sustainable ﬁshing. It is well known that over 90 percent of the world’s
marine ﬁsh catch comes from the 200 miles of coastline, because ofhigher productivity in the coastal areas. It follows, therefore, that theseareas face the maximum problems related to ﬁshery management. Like
many coastal countries, the United States has been confronted with thecommercial challenge of depletion of ﬁsh stocks and low proﬁtability.5
In a congressionally mandated report, the National Oceanic andAtmospheric Administration’s National Marine Fisheries Service(NMFS) acknowledged the excess harvesting capacity of one-third to
one-half of the assessed federally managed ﬁsheries;6 this excess harvesting is likely to result in poor economic proﬁtability.7
The primary legal authority for ﬁshery management in the federally
managed waters of the United States (from 3 miles to 200 miles) is theMagnuson-Stevens Fishery Conservation and Management Act (MSA),
Public Law 109–479. The MSA establishes a regional council-management system for regulating ﬁsheries. When the council shortened theannual ﬁshing season, ﬁshermen responded by increasing their ﬂeet sizeand began using engines that are more powerful. This triggered further
cuts in the duration of the season, prompting the ﬁshermen to place more
hooks, lines, and nets, which, in turn, led to more reductions in the lengthof the season. In some ﬁsheries, such as that of the Alaskan halibut, theannual commercial ﬁshing season has been reduced from forty-sevendays to only two or three days.8 These reductions have resulted in a kindof “race for ﬁsh,” compelling ﬁshermen to go out in bad weather for fearof losing their catch to competitors. Further, this has had a negative effecton the ﬁsh population since most ﬁshermen exceed their catch limits.
Moreover, all the ﬁshermen deliver their catch at the docks simultaneously, and this temporary glut of ﬁsh depresses prices. In addition, muchof the catch is frozen, thereby reducing the year-round availability offresh ﬁsh and adversely affecting quality and income. Finally, ﬁshermen
often return home to long months of unemployment after the short ﬁshing season. This “tragedy of the commons” encourages dangerous, economically wasteful, and environmentally damaging ﬁshing activities.

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A key feature of a renewable resource like ﬁsh is that its stock can beboth increased and decreased. Nevertheless, no renewable resource canregenerate to levels higher than what the ecosystem can handle. It should
be noted that if the harvest is always limited to less than or equal to thesustainable yield, the resource stocks will not deplete. However, in thecase of weak or absent ﬁshing-related property rights, “derby ﬁshing” or
the race for ﬁsh continues until the break-even point or until no more
proﬁt can be made. This often results in overﬁshing, which eventuallyleads to the depletion of ﬁsh stocks. Therefore, it is highly unlikely thata ﬁshery adopting a laissez-faire approach will beneﬁt society.
The aim of U.S. ﬁshery management is similar to that of rights-based
management (RBM) in U.S. ﬁsheries, in that it aims at the optimum use
of ﬁshery resources and economic efﬁciency. Over the last three decades,
councils have been established in the United States to address the trendof overﬁshing, improve the economic performance of ﬁsheries, andstrengthen the conservation of species. The federal government has been
inclined to employ some exclusive quota forms of RBM, for example,
access limitation programs, including the individual (transferable) ﬁshing quota (IFQ). However, the introduction of certain IFQ programs has
had a negative impact on ﬁshing activities, for example, the eliminationof vessels and reduction in crews. Therefore, an amendment to the MSA,
better known as the Sustainable Fisheries Act, Public Law 104–297,
established a moratorium on all the new IFQ programs and shifted theprogress toward ﬁshing reforms until the moratorium was lifted in 2002.
The IFQ expanded over the years, and in the 2006 reauthorization of
MSA, it was referred to as a limited access privilege program (LAPP).9This article aims to clarify U.S. ﬁshery-management policy and explore the evolution of RBM with respect to U.S. ﬁsheries for addressing
the trend of overﬁshing. In other words, the article attempts to show that
responsible ﬁshery management is needed to ensure the sustainable supply of seafood. Further, the article attempts to explain (1) why the U.S.
government introduced and implemented a moratorium on the IFQ programs, and (2) how the U.S. government lifted and expanded these programs.
The remainder of this paper is divided as follows. Section I explores
the concepts, theory, and characteristics related to RBM in ﬁsheries.
Moreover, this section prepares the framework for analyzing thepotential and actual effects of RBM in U.S. ﬁsheries. Section II identiﬁes the manner in which RBM has been implemented in the United

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TAKANORI OHASHIStates. It applies the analytical framework developed in section I todescribe the characteristics and assess the effectiveness of some of the
programs, including license/vessels limitation and exclusive quotas,
such as IFQ programs, community development quota (CDQ) programs,
and ﬁshing cooperatives. Given the overcapacity problem that emergedin the 1990s, at both the national and international levels, section III discusses the implications of this for the U.S. ﬁsheries that led to the expansion of the IFQ programs and their evolution into LAPPs. In order todetermine the most suitable management tool for addressing overcapacity, I conducted a comparative analysis, from both economic andenvironmental perspectives, among LAPPs, traditional management
methods, and decommissions schemes. Further, this section identiﬁes
the special features of the LAPP, referring to a brief comparative analysis between LAPP and Japanese community-based resource management (JCBRM). Finally, the article provides concluding remarks, policy
implications, and a discussion of the scope for future study.
I.
A.

PROPERTY RIGHTS IN FISHERIES

Concepts of “Property Rights in Fisheries”

It is widely recognized that the primary cause of overﬁshing is the lackof property rights. In fact, this was the main theme of Garrett Hardin’sseminal article “The Tragedy of the Commons.”10 Since no one can own
a ﬁsh until it is caught and placed in a boat, there are no incentives toconserve the stock. However, postponing the harvest may make economic sense in terms of being able to obtain a larger and more valuable
catch later. In addition, allowing the ﬁsh to spawn before harvesting may
provide for even larger catches in the distant future. From an individual
perspective, the postponement will not appear feasible unless the individual who foregoes the harvest is guaranteed the right to future harvest
increases. Nevertheless, with no property rights for ﬁsh, there are no suchguarantees.
Consider a simple counterexample: the overexploitation of cattle is
not a matter of concern because if owners postpone the harvest, they are
guaranteed future beneﬁts. Anderson (2007) suggests that the case ofproperty rights with regard to cattle should be studied in more detail.11
For instance, no one, not even the government, can take cattle away froman owner without providing adequate compensation. Therefore, indi-

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193

viduals are able to buy or sell cattle to achieve a balance between thenumber of cattle and the productivity of pastures. This also implies thatan owner can choose to do whatever he or she desires with the cattle; forinstance, they can either be kept for breeding or sent to the slaughterhouse. Moreover, if someone inadvertently or deliberately kills theowner’s cattle or lowers their value, the owner can sue for compensation. Given the nature of these property rights, owners have sufﬁcientincentive to utilize their cattle to maximize the economic value from theiruse, because they will receive all of the gains. If the economic returns
from breeding the cattle are high, an owner will be motivated to retain
them. On the other hand, since the returns for slaughtering depend on
the throughput of feedlots each year, an owner will be have an incentive
to develop procedures that maximize proﬁts by considering the choiceand costs of input and the timing of production.
The basics of property rights in ﬁsheries are derived from the notionof attempting to simulate some of the aspects of property rights that are
extremely efﬁcient with respect to cattle.12 However, it is difﬁcult to imitate these aspects without analyzing them in detail, and this has not been
done, for technical reasons. First, ﬁsh move around over wide spaces,
and it is impossible to identify and assign individual ﬁsh to individualowners. Similarly, it is not possible to track ﬁsh offspring. Thus, property
rights in ﬁsheries are clearly different and weaker than those that apply
to cattle and other land-based animals. Although property rights can beunderstood as rights that are related to an object or a thing, it is wrong
to simply assume that property rights refer to rights over things. In fact,
more correctly, property rights are a set of relationships between people
and things. However, this is a broad deﬁnition of property rights, and anumber of different types of rights (e.g., use, access, harvest, and ownership rights) exist under this general category.13 Unlike some of theother natural resource sectors, such as land, private ownership of wildﬁsh has never been conceivable. If the ownership of wild ﬁsh is inconceivable, then property rights in ﬁsheries can be deﬁned as a “bundle ofrights.”Regarding the nature of property rights in ﬁsheries in the UnitedStates, there are some legal and political constraints. The Sustainable
Fisheries Act clearly stipulates that an IFQ program is merely a permit
to harvest and that it does not confer any right to compensation, and that
there are no rights, title, or interest in any ﬁsh until harvested.14 Thus, if
a regional ﬁshery-management council creates an IFQ program but then

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later decides to replace it with another type of regulation, the holders of
the IFQ permits will not be entitled to compensation. Furthermore, theweak nature of the property rights in ﬁsheries is supplemented by caselaw in the United States. According to the common law public trust doctrine, which has been extensively developed in the United States and isapplicable to all public assets that are of universal public interest,15 theseassets cannot be alienated from the state.16 These public assets are thus
held in trust by the government for the citizenry. This doctrine has been
repeatedly applied to case law in the Unites States against claims related
to property rights of ﬁsh, and this may have an inhibiting effect on thedevelopment of property rights in ﬁshing.17 Thus far, the public trust doctrine has been used as an argument against property rights in ﬁshing;
however, it cannot be applied as a convincing argument against rightsbased ﬁshery management.18
In many parts of the world, there exist property rights systems in ﬁsheries that depend on unwritten, traditional, or customary agreements pertaining to who can ﬁsh in a particular location and, sometimes, what typeof gear can they use.19 In these situations, social, cultural, or political traditions will determine the nature of the property rights in ﬁsheries. Thus,
property rights in ﬁsheries, in most cases, do not convey the actual ownership of the resources themselves to any individual. In fact, in the UnitedStates, ﬁsheries resources are recognized as public resources, and property rights in ﬁsheries are deﬁned in terms of an individual’s right to harvest or otherwise use the ﬁshery resource.20
B.

Analytical Framework of the Characteristics of RBM in Fisheries

When examining the characteristics of the existing property rights systems in ﬁshery management, Scott (1996) identiﬁed the following as themost important: (1) exclusivity of participation in the ﬁshery, (2) durability of the rights conferred, (3) security conferred by the rights, and (4)transferability of the rights.21 Generally speaking, the more of these characteristics in a right, the more valuable and costly it is.
Exclusivity is valued because it protects the right holder from interference with respect to ﬁsh stock and ﬁshing. In a ﬁshery, it is regarded
that the low exclusivity of a ﬁsherman’s license compels competition
every time with other vessels for a typical share of the catch. Durability
is valued because it allows the right holder to obtain payoffs in the futurefrom the investments made in earlier years. Indeed, if a right’s duration

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195

is short, the holder will avoid any long-term improvements or investments. In a ﬁshery, durability encourages the right holder to invest in
costly changes in the size and age structure of the ﬁsh stock that may
result in larger and more proﬁtable catches, even if it means an extended
waiting period. Security is valued because it saves the right holder fromthe costs of protecting and enforcing that right to ﬁsh. In most publicﬁsheries, a ﬁsherman’s right is secure; however, the ﬁsherman may betaken aback by new arrangements that arbitrarily reduce the characteristics of the right. Finally, transferability is valued because it allows theright holder to make the best use of his or her time and capital by selling the right if the ﬁsherman so wishes. Thus, in the context of ideal ﬁsheries, each characteristic appears to play an important role.
C.

Measurements of the Characteristics

Following Scott (1988), it is helpful to portray these characteristics asmeasures along axes in a four-dimensional space (ﬁgure 1).22 A perfectproperty right must lie within the outer limits of all the characteristics(ﬁgure 2). It follows that the corresponding characteristics of RBM must
be completely contained within the triangle in ﬁgure 2.

Figure 1

Figure 2

Using such a graphic approach may help in understanding, at a glance,
the key strengths and weaknesses of particular management instrumentswith respect to the expected outcomes. In ﬁgure 3, if the representative
portion of the given instruments is located within this gray area, in principle, the instruments will be able to facilitate the optimal use of the existing ﬁshing capacity. In ﬁgure 4, the representative portion indicates thatsome degree of transferability (e.g., leasing) exists and that these may
facilitate short-term adjustment.

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TAKANORI OHASHI

Figure 3

Figure 4

In ﬁgure 5, if the representative portion of the given instrument islocated in this gray area, in principle, the instrument will be able to facilitate and secure appropriate investment (by providing some levels of
exclusivity, durability, and security). In ﬁgure 6, if, in addition, somedegree of long-term transferability exists, the instrument is expected tofacilitate long-term adjustment of the ﬂeet.

Figure 5

Figure 6

These four characteristics are interrelated to a considerable extent.
Together, they generate a particular bundle of rights that possess the ability to facilitate particular management outcomes.23
II.

DEVELOPMENT AND IMPLEMENTATION OF LIMITATIONOF ACCESS IN U.S. FISHERIESIn general, RBM has increasingly gained acceptance in the UnitedStates. In fact, several instruments have been implemented to limit theCHALLENGES FACED BY THE U.S. FISHERY POLICY

197

access to resources, depending primarily on the biological, social, andgeographical characteristics of the ﬁsheries. In this section, license/vessel limitations, IFQ programs, CDQ programs, and ﬁshing cooperatives
are examined with respect to their status and effectiveness by using theanalytical framework derived in section I.
A.

License/Vessel Limitations

License/vessel limitations are designed to cap or reduce the numberof participants and/or vessels in a ﬁshery by establishing criteria for theircontinued inclusion, such as historical participation. As of December
2008, there were forty-ﬁve ﬁshery-management plans in effect, most ofwhich were license/vessel limitation programs. However, the extent ofuse of these programs varies considerably among regions of the country.24 The North Paciﬁc Council, for example, has chosen to implement
moratorium measures, despite the fact that the majority of stocks in thewaters of Alaska are not overﬁshed. The New England Council and the
Mid-Atlantic Council, on the other hand, have taken similar actions in
response to the problems resulting from severe overﬁshing and overcapitalized ﬁsheries.
Exclusivity: Since the right is attached to either the vessel or the owner,
right holders are expected to have some incentive to compete. However,in practice, the councils have been inclusive with respect to approving alimited-access program and setting criteria for continued participation.25
In addition, the councils have sometimes established lengthy qualiﬁcation periods for the inclusion of many ﬁshermen/vessels. This suggeststhat considerable latent effort is made in terms of a limited-access program. Under such circumstances, when the ﬁshery is rebuilt, dormant
effort can be reapplied and the potential beneﬁts that might have otherwise accrued for those ﬁshermen who remained in the ﬁshery throughthe hard times will be dissipated.26 In general, exclusivity may vary from
low to relatively high, depending on the nature and structure of the ﬁshery; however, in most cases, a low level of exclusivity has been observed.
Duration: Licenses/vessel permits are often given on an annual or seasonal basis, and they are renewed at the beginning of each period. Whenthe renewal of a license is conditioned on objective criteria, such as compliance with rules, the time horizon can be considered as long but loosely
deﬁned. In the absence of clear rules regarding the attribution of licenses,
the time horizon can be extremely short, thereby weakening the incentive

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of right holders to modify their investment and operational behavior.
Therefore, the characteristic of duration with respect to licenses regimes
is considered to be moderate.
Security: Since the right is attached to either the vessel or the owner,
security for limited licenses/vessels is considered high. In practice, however, security has been attenuated by external events such as the closingof a ﬁshery for environmental or safety reasons. Since enforceability, in
general, is relatively easy, it seems reasonable to assume that security isrelatively high.
Transferability: By deﬁnition, licenses/vessels limitations are not transferable.
Depending on the nature and structure of the ﬁshery, it follows that
this type of management is primarily intended to incite license holders
to invest in the ﬁshery. The New England Council case has demonstrated
the theoretical aspects of this to a large extent.
B.

Individual Fishing Quotas

IFQs are management tools that can be employed to constrain effort
and achieve a rational application of capital to the available ﬁsh resources. The primary purpose of IFQs has been to achieve a better matchof capacity to resource productivity and to address economic inefﬁciencies by eliminating “derby ﬁshing” and allowing for the consolidationof ﬁshing efforts. Traditional ﬁshery-management tools have focused on
input controls (e.g., restrictions on gear and licenses/vessels limitations)and output controls (e.g., quotas and trip limits). These tools, particularly input controls, seek to limit the productivity of ﬁshing vessels,
affecting their efﬁciency and proﬁtability. Moreover, the input/output
control approach places a signiﬁcant administrative burden on ﬁshery
managers because they are often required to “command and control” themeasures pertaining to the ﬁshery in order to make decisions that would
be better made by the individual entrepreneur (e.g., when and how toﬁsh) or by the market. IFQ-based management has the same goal as thatof output controls, but with the added efﬁciency of private ownershipand market transferability of access to the output. The following fourﬁsheries in the United States are under IFQ management: Surf clams/
ocean quahog (Mid-Atlantic), halibut/sableﬁsh (Alaska), wreckﬁsh(South Atlantic), and blueﬁn tuna (North Atlantic).

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Exclusivity: IFQs provide an individual, group, or association with theprivilege to harvest a given quantity of ﬁsh. Further, IFQs provide holders of the privilege with a strong sense of exclusivity. As a result, thischaracteristic can be considered to be high with respect to IFQs.
Duration: In principle, any IFQ program is subject to a formal anddetailed ﬁve-year review after implementation.27 While the explicit duration may be considered as limited, in practice, available information suggests that renewal is fairly automatic. Thus, the overall presence of thischaracteristic is also considered to be high.
Security: IFQs are revocable privileges that are granted by a responsible agent of the state to an individual, allowing him or her to use a resource that rightly belongs to the general public. Such resources are heldin trust only by the government and cannot be alienated. The legal status of an IFQ in the United States may be weaker than it is in other countries.28 With regard to enforceability, experience suggests that in mostcases improvements in the possibility of adjusting catch capacity to theavailable resources have reduced illegal, unregulated, and unreported
behavior.29 Thus, the security level in IFQs is moderate.
Transferability: In principle, U.S. IFQs are transferable. However, theextent of transferability varies between ﬁsheries. In most IFQ ﬁsheries,
transfers are subject to procedures ensuring current and historical harvest and to the participation of the ﬁshing communities. While the arrangements do vary across ﬁsheries, it can be considered to vary fromlevels that low and moderate (e.g., halibut/sableﬁsh) to relatively high(e.g., surf clam/ocean quahog). As a result, it can be stated that there ishigh transferability with IFQs.
By allowing high levels of two characteristics, namely, exclusivity andduration, the U.S. IFQ system, in general, provides the holders with theprivilege of a planning horizon that is relatively secure. Further, it provides the holders with proper incentives to make efﬁcient investment inharvesting techniques and in developing new markets. Moreover, therelatively high levels of transferability facilitate the ﬂeet adjustment
process.
C.

Community Development Quotas

Community development quotas allocate a catch quota to a certain“ﬁshing community.” The available information suggests that CDQs

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have been implemented in Japan, Korea, New Zealand, Canada, and theUnited States. However, in the United States’ halibut/sableﬁsh ﬁshery,
concerns among ﬁshery managers regarding the preservation of ruralcommunities in western Alaska led to the creation of CDQs in 1991.
CDQ programs were intended to improve the social and economic conditions of these ﬁshing communities through capacity building; thesecommunities were given special consideration and were allowed toengage in commercial ﬁshing.30 CDQs were formalized as part of anamendment to the MSA in 1996. The statutory language ensures that a
portion of the total allowable catch is to be set aside for the qualifying
coastal native communities in the most remote reaches of western
Alaska.
Exclusivity: CDQ programs are highly exclusive with regard to access.
Eligibility requirements are highly speciﬁc and restrictive with regard tocommunity location and qualifying criteria.
Duration: Since CDQs are authorized in the MSA, their duration isconsiderably long.
Security: Due to the speciﬁc authorization of this program in the MSA,
and because of the speciﬁcity of language in describing eligible participants, security under CDQ programs is higher than that in any other program.
Transferability: A community’s share (annual allocation) is transferable between the nonproﬁt managing organizations that represent themember communities. Further, leasing shares to external parties to conduct ﬁshing is easy and common. Thus, the stated goal of CDQs, that is,
to provide ﬁshermen residing in the remote ﬁshing-dependent communities with an opportunity to participate in the Bering Sea and AleutianIsland ﬁsheries, is sufﬁciently achieved.
D.

Fishing Cooperatives

Fishing cooperatives are relatively new in the United States.31 Although they have been developed as an alternative to IFQ programs,
instead of allocating ﬁsh to individual vessels, the cooperative members
reach a consensus on how to share the allocation. Thereafter, vessel owners or operators coordinate their ﬁshing activities to achieve economic
efﬁciency or to meet other mutual objectives. Currently, three cooperatives are in operation, namely, in the Paciﬁc Northwest, with Alaskan
pollack vessels ﬁshing in the Bering Sea, and in the cod hook sector in

CHALLENGES FACED BY THE U.S. FISHERY POLICY201

the Georges Bank. Their primary objective is to eliminate “derby ﬁshing.” Further, in cooperatives, there is no government involvement.32
Exclusivity: Entry into the three ﬁshing cooperatives is strictly limited.
Moreover, since new permits are not being issued, potential entrants are
obligated to procure existing vessels and/or permits with their concomitant histories and capacity limitations. As a result, ﬁshing cooperatives
are highly exclusive.
Duration: There is no provision for a sunset mechanism in ﬁshingcooperatives. Thus, participation within the cooperative is subject to acontract.33 As a result, the characteristic of duration under ﬁshing cooperatives can be considered to be relatively high, but limited.
Security: Sector allocations are not endowed with the trappings ofproperty; further, sector participants are not given rights of ownership.
In practice, the ﬁshing history associated with sector participants is aprincipal factor in determining quota allocation to a sector. In fact, industry members may consider the ﬁshing privileges provided under ﬁshingcooperatives to be as good as the privileges of owing the ﬁshing vessel.
Transferability: Within the Alaskan pollack ﬁshery, several cooperatives exist. The transfer of vessels from one cooperative to another ispossible, but without incentive. Within a cooperative, implicit transferability is considerably high, allowing for the most efﬁcient set of vessels
to harvest the entire cooperative share of the total allowable catch. Thus,
transferability under ﬁshing cooperatives is relatively high, but limited.
Fishing cooperatives provide an opportunity to restructure the ﬂeet inorder to maximize proﬁts. Further, cooperatives possess the potential topreserve ﬁshing-dependent communities that are located at key ports.
III. EMERGENCE OF LIMITED ACCESS PRIVILEGE PROGRAMS: ARE
IFQ PROGRAMS THE SOLUTION TO REDUCING FISHING CAPACITY?
A. From the Regulatory Actions of Regional Councils to Mandatory
National Standards
Since the adoption of the United Nations Food and Agriculture Organization (FAO) International Plan of Action for the management ofﬁshing capacity in 1999,34 it has been more widely recognized that
overcapacity is the most obvious problem in many domestic and international ﬁsheries, fostering destructive derby operations, aggravating overﬁshing, and undermining the economic performance of the harvesting202

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sector. In order to address the problems related to the management ofovercapacity, the SFA authorized a ﬁshing-capacity reduction programthat may be used with complementary management tools. The mostdirect and obvious response to overﬁshing was the implementation of abuy-back program. Permit/vessel buy-back programs may be publicly
or privately funded, or, at times, they may be supported by both public
and private ﬁnancial resources. Further, most of the permit/vesselbuybacks have involved a certain amount of public funding. However,there is a concern that the management of latent capacity can pose a special challenge to the buy-back administrator. For instance, while $10 million was spent to buy back latent permits, critics maintain that this did
not reduce active capacity and was ineffective in terms of decreasing
capacity.35 Nevertheless, if buybacks ease management and enforcement
and result in more proﬁtable operations, the net natural economic beneﬁt may be positive.
Among the complementary management tools, limited entry is typically one of the simplest means of managing capacity. However, its
biggest shortcoming is that while it restricts new entrants, it does notconstrain the effort and investments made by established participants. A
study by the Organisation for Economic Co-operation and Development(OECD) concluded that limited entry is, in general, not a highly effective means of curbing overﬁshing and overcapacity.36 On the other hand,
exclusive quotas, another management tool, can be effective and economically efﬁcient. A typical form of an exclusive quota program is the
IFQ. Experience with several IFQs in the United States has demonstrated
that this form of management can be effective in managing capacity as
it affects effort, investment, and participation according to the objectives
and structure of the IFQ program. Further, IFQ programs have resulted
in improvements from both biological and ecological perspectives, forexample, a decline in the discard of small clams and a signiﬁcant reduction in the frequency of halibut overharvests. These improvements areprimarily the result of incentives to determine a good ﬁshing time andlocation with larger sized and/or more valuable products.37 However, thisdoes not imply that an IFQ program is the best management tool for
addressing ﬁshery problems such as ﬁshing capacity.
In 1996 the U.S. Congress, as part of the SFA, placed a moratoriumon the implementation of new IFQ programs in U.S. federally managed
waters. The major impetus behind the moratorium appeared to have beena concern over the design and implementation of the North Paciﬁc hal-

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203

ibut/sableﬁsh IFQ program. However, there were also many social andeconomic issues associated with IFQs (e.g., its affect on ﬁshing communities and on vessel crewmembers) that triggered vigorous publicdebates.38 In establishing the moratorium on new IFQ programs, Congress also required that the National Academy of Sciences review theexisting IFQ programs and make recommendations regarding their
future use.39 The 1999 study concluded that the U.S. IFQ programs weremeeting most of their objectives and were successful, albeit not without
problems.40 Clearly, IFQs are not a universal solution to all the problems
related to ﬁshery management. They require a considerable initial investment in design and implementation. Moreover, IFQ management
requires sound science for determination of quotas and considerable
enforcement to ensure adherence to regulations. However, when appropriately implemented, IFQs can be a powerful tool in ensuring effective
and efﬁcient ﬁshery management.
Further, the National Academy of Sciences believed that councils
would be able to manage resources with greater efﬁciency if IFQs were
implemented, and they provided additional appropriate conditions thatshould be set in future legislation with respect to new IFQ programs.41
The NMFS administrator stated on more than one occasion that IFQs
should be made available to the councils as a valuable management tool
to address overcapacity in the harvesting sector.42 Furthermore, at thetime, discussions pertaining to IFQs were also occurring in a larger
debate on ocean policy and governance. An important recommendationfrom the U.S. Committee on Ocean Policy was to establish normal standards for the exclusive quota program.43 Thus, in the United States, conditions were nurtured for the development of national standards andguidelines for the development and implementation of IFQs. In fact, over
the years, there has been an increase in the use of exclusive quotas,
including IFQs, CDQs, and ﬁshing cooperatives, for the purpose of rationalizing ﬁshing. Since 2002 the NMFS has steadily continued to moveaway from the traditional regulated open access to other limited-accessprograms; in addition, the number of exclusive quota programs has doubled, from six to twelve,44 and this trend is expected to continue.
In comparison with (public-funded) buy-back programs, IFQs are considered to be cost-effective measures. In 2002 the NMFS concluded thatthe cost of buy-back programs in ﬁve ﬁsheries alone was approximately$1 billion.45 While aggregated public costs have amounted to almost $70
million, no public funding has been appropriated since 2004.46 In the case

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of IFQs, capacity is reduced through the rationalizing effect of thesecondary market for IFQ shares. This market is driven by several factors, including the industry’s capital, market and input prices, and stock
conditions. In addition, the U.S. IFQ programs require that the participant pay 3 percent of the aggregate ex-vessel revenue toward the management and enforcement cost attributable to that program under the
MSA.
Thus, IFQs have not only evolved into, but also have produced, alternatives such as CDQs and ﬁshing cooperatives. In sum, these exclusive
quota programs developed for the purpose of replacing the regulatory
actions of the council and under a formalized guideline stipulated by the
MSA are subsumed under the limited access privilege program. The primary driving force behind this may be that the LAPP can address the
problem of “creeping effort” or “latent” management, which is related
to retired or inactive permits and vessels in the case of limited license or
buy-back programs. Another factor may be that LAPPs are more costeffective in terms of constant or shrinking federal budgets. Perhaps,
LAPPs, at this stage, are the best and most practical tool for addressing
structural adjustment and the reduction of ﬁshing capacity.
B.

Special Features of LAPPs

Since LAPPs are an improvement on IFQs, their special features canbe examined by comparing the two. First, LAPPs are designed by employing mandatory procedures; IFQs, on the other hand, were designed
and developed at the complete discretion of a council without any mandatory procedures. Further, the MSA speciﬁes certain mandatory conditions and provisions for the developing of LAPPs.47 If a council wishes
to develop a LAPP, it needs to employ the national standards, otherapplicable laws, and the management of the particular ﬁshery-management program as the criteria for selecting and designing a LAPP.
Second, LAPPs possess ﬂexibility and diversity. In New Zealand, forexample, there is only one individual transferable quota program for all
the different federally managed stocks. The rules governing the transferability and other aspects of the individual transferable quota programs
are the same for all the different ﬁsheries. This consistency helps in lowering management and monitoring costs. On the other hand, as a resultof having eight councils under the MSA, LAPPs in the United States aredesigned individually in the various regions, sometimes varying within

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each region, or even for a single species within a ﬁshery. For instance,in the sableﬁsh/halibut IFQ program, the council included numerous provisions under the program, such as restriction of transfer across the vessel categories and restrictive share cap, in order to maintain the social
fabric of the ﬁshing community. On the other hand, the pollack ﬁsherycooperative system, and to some extent the crab/IFQ/processors program, were designed to reﬂect the more industrial nature of these ﬁsheries; however, in the case of the crab/IFQ/processors program, there
still exist regional delivery provisions that have been designed to protect
the involvement of the existing community in these ﬁsheries.
Third, under the LAPP, there is a broader emphasis on allocating
privileges to a wider range of potential recipients. Although it was not
required by the earlier versions of the MSA, traditionally, IFQs havebeen given to a “person” in the narrow sense of the word. Primarily, IFQs
were given to individuals or various types of business entities. However,
it is now possible to consider two types of entities, as mentioned in the
MSA, as well as other types of organizations. Thus, the MSA of 2006
increased the range of entities to which IFQs could be given. As previously noted, the new LAPP places more emphasis on the community andon geographically based control of harvesting privileges, where the community is deﬁned in the broadest possible sense, including groups andcooperatives.48
Fourth, as authorized in the MSA provision of 2006, ﬁshermen’s initiative (as is evident from the growing interest in ﬁshery cooperatives)and sector allocations can be viewed as examples of devolution. This isbecause, in both cases, the user group exercises certain authority thatwould otherwise be provided for in a federally approved ﬁshery-management program.49
It is often suggested that the United States and Japan are at opposite
ends of the ﬁshery-management spectrum. Makino (2003) argues thatthe conceptually opposite aspects relating to ﬁshery management between Japan and United States exist because Japanese ﬁsheries management includes the concept of “resource preservation and breeding by
resource users themselves,” which implies conservation measures
undertaken by local ﬁshermen.50 On the other hand, U.S. resource management is basically a dual system, which means “resource managementby the government, and resource use by citizens.”51 Nevertheless, there
are relatively more similarities than differences between the LAPP andJapanese community-based resource management.52 Conceptually,

206

TAKANORI OHASHIJCBRM has several characteristics, including ﬁshermen’s initiative or
involvement in the decision-making process regarding conservation
measures, minimum or no government intervention, and a ﬂexible program. The LAPP has come to have similar characteristics to JCBRM,
that is to say ﬁshermen’s groups or cooperatives have more responsibilities in implementing conservation measures and quota allocations as
industry-based programs with minimal government intervention. Major
differences can be viewed in the form of management measures: LAPP
uses exclusive quota, whereas JCBRM uses “command and control,”such as restricted ﬁshing gear and closed seasons. In sum, both LAPP
and JCBRM share almost the same management concept of “comanagement” or self-governance, and both intend to develop economicallyand biologically sustainable ﬁsheries.53
CONCLUSION
Fishery management in the United States has gradually evolved
through several stages in accordance with the changes in the internal andexternal environments of the ﬁshing sector. In other words, the development did not happen at once. Moreover, U.S. ﬁshery-management policy has evolved from relatively simple responses to biological problems
in the 1970s to much more complex problems of allocation and overcapitalization in the 1990s. In fact, RBM was developed in response tothese problems. The range of management schemes implemented toresolve emerging problems include (1) limited entry or regulated open
access programs; (2) IFQs in ﬁsheries on both coasts of the United States;and (3) comanagement as witnessed in the CDQs in Alaska and industry-based programs with minimal government intervention, for example,
ﬁshing cooperatives. However, to overcome overﬁshing in the UnitedStates, the focus has been on the use of exclusive quota programs; thishas resulted in the development of LAPPs through major amendments
to the MSA in 1996 and 2006. Although a majority of the U.S. ﬁsheries
are still managed under the limited-entry program, a growing number offederally managed ﬁsheries are expected to employ a LAPP.
With a broader recognition of LAPP, different ﬁsheries can havedifferent goals; for instance, one may choose to maximize economic efﬁciency, while another may want to preserve the current owner-operatorﬂeet structure. In fact, LAPPs can be designed to optimize these goals.
Further, the implementation of LAPPs in twelve ﬁsheries in the UnitedStates has demonstrated their effectiveness in curbing overﬁshing andCHALLENGES FACED BY THE U.S. FISHERY POLICY

207

helping rationalize ﬁsheries. However, this does not imply that traditional or conventional management schemes such as license limitation,
harvest restriction, or buybacks should be done away with. Instead, if
these conventional schemes are implemented in conjunction with a
LAPP, they can contribute to an effective management regime that meetsthe objectives of sustainable ﬁsheries. Hence, LAPPs should be a central part of U.S. ﬁshery policy. Many challenges still exist, and the NMFS
will continue to reﬁne and reexamine its guidelines and policies in
response to constantly changing conditions.
The U.S. experience in the evolution of ﬁshery management can provide insight for other ﬁshing nations. First, optimal management of a
speciﬁc ﬁshery requires the most appropriate combination of all available tools and the rights associated with them. No single ﬁshery-management strategy can be applied to all ﬁshery-related problems. Second,
management entities should shift from central/federal governmentbased managers to geographically local users or groups employing selfgovernance or comanagement. Such users or groups are in the best
position to involve regional stakeholders and design management programs appropriate to the species that they manage. Third, the ﬁsherymanagement structure should be designed to support an optimum
system, depending on changing socioeconomic and environmental conditions. While changing the system may have a signiﬁcant impact on theﬁshery sector in the short term, in the long run, it could contribute to economically and biologically sustainable use of ﬁshery resources.
The sustainability of seafood can be achieved when the population ofthat species is managed in a way that ensures that current needs are met
without damaging the ability of the species to reproduce and be available in the future. Any mismanagement of ﬁsh stocks in the United States
will ultimately reduce the amount of seafood available to U.S. consumers. Attempts by the United States to rebuild sustainable ﬁsh stocks
using LAPPs may result in an increased supply of seafood to U.S. consumers in the future.
Finally, it must be emphasized that this article is only the beginningof a more extensive analysis of U.S. ﬁshery-management policy. Future
research might include (1) the socioeconomic and cultural aspects ofﬁsheries and the ﬁshing community in the United States, (2) conﬂicts between stakeholders over the policy-formulation process, (3) a comparative study of the United States and Japan with respect to ﬁshery
management, and (4) interaction between international ﬁshery-management regimes and U.S. ﬁshery-management policies.

208

TAKANORI OHASHINOTES1National Marine Fisheries Service (NMFS), Fisheries of the United States 2008, 21
July 2009.
2
In 2005 Americans consumed a record 16.6 pounds of seafood per capita; healthprofessionals are encouraging a doubling of this amount. NOAA News Release, 12 July
2007.
3
Food and Agriculture Organization (FAO), The State of World Fisheries and Aquaculture, Rome, 2004.
4
Regarding the global status of ﬁsh stocks, the proportion of fully utilized, overexploited, depleted, and recovering stocks appears to be more than 80%, with no room forfurther expansion owing to excess ﬁshing pressure in the past. FAO, The State of World
Fisheries and Aquaculture, Rome, 2008.
5
A well-documented example concerns New England’s “Atlantic cod” stock, which
has not recovered from excessive ﬁshing despite the drastic ﬁshing restrictions that havebeen implemented over the last several years. See, for example, S. R. Playfair, VanishingSpecies, (Hanover, NH: University Press of New England, 2003), chaps. 2–3.
6
The NMFS is the ultimate management authority with respect to ﬁshery resourcesin federally managed waters that are controlled by the National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
7
NMFS, Excess Harvesting Capacity in U.S. Fisheries, 28 April 2008.
8
Natural Research Council (NRC), Sharing the Fish: Toward a National Policy on
Individual Fishing Quotas, (Washington, DC: National Academy Press, 1999), 306.
9
See Sec. 303A, Public Law 109–479.
10
G. Hardin, “The Tragedy of the Commons,” Science 162 (1968): 1243–48.
11
L. G. Anderson and M. C. Holliday, eds., The Design and Use of Limited AccessPrivilege Program (NMFS, November 2007), 9.
12
Ibid.
13
European Commission, Studies and Pilot Project for Carrying Out the Common
Fishery Policy (Brussels, February 2009).
14
See Sec. 303(d)(3), Public Law 104–297.
15
R. Connor, “Are ITQs Property Rights? Deﬁnition, Discipline and Discourse,” in
Use of Property Rights in Fisheries Management 2 (Rome: FAO, 2000), 46–62.
16
Ibid.
17
D. C. Slade, R. K. Kehoe, and J. K. Stahl, Putting the Public Trust Doctrine to Work
(Washington, DC: Coastal State Organization, 1997).
18
Connor, Are ITQs Property Rights?
19
S. Foale, “Ownership and Management of Trochus Fisheries at West Nggela,
Solomon Islands,” in Proceedings of the 2nd World Fisheries Congress, (Australia,
Collingwood: Commonwealth Scientiﬁc and Industrial Research Organisation (CSIRO),
1996), 266–72.
20
See Sec. 303(d)(3), Public Law 104–297. In other countries, such as Japan andTaiwan, there are instances wherein the property rights for ﬁshery resources belong tolocal communities.
21
A. Scott, “The ITQ as a Property Right: Where It Came From, How It Works andWhere It Is Going,” in Taking Ownership: Property Rights and Fisheries Managementon the Atlantic Coast, (Halifax, NS: Atlantic Institute for Market Studies, 1996), 31–98.
22
A. Scott, “Development of Property Rights in the Fishery,” Marine Resource Economics 5 (1988): 289–311.

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209

23
Ibid. Scott suggests that all the characteristics can be viewed as attenuated simply
because a ﬁshery’s activities are inﬂuenced by other potential uses that do not consider
the design of the management instruments.
24
For more details, see FishWatch, http://www.nmfs.noaa.gov/ﬁshwatch (accessed 10
August 2009).
25
The New England Council, for example, has, in some ﬁsheries, accepted proof of asingle landing of any quantity of a species in that ﬁshery as proof of historical participation.
26
In other cases, when the stock can be accessed by several user groups, ﬁshing operators are inclined to “race for ﬁsh.” Such behavior has also reduced the level of exclusivity, leading to “effort creeping” or “capital stufﬁng” and higher costs.
27
See Sec. 303A, Public Law 109–479.
28
Ragnar Arnason suggests that the quota right is regarded as a property by theAustralian courts and that constitutional protection and certain rights to compensation
may exist should the individual transferable share quota be revoked. See R. Arnason,“A Review of International Experience with ITQs,” Reports 58 (University of Portsmith,Centre for the Economics and Management of Aquatic Resources, 2002).
29
OECD, Further Examination of Economic Aspects Relating to the Transition to
Sustainable Fisheries (Paris, September 2005).
30
NRC, Sharing the Fish, 124–28.
31
Joseph M. Sullivan, “Harvesting Cooperatives and U.S. Antitrust Law: Recent
Developments and Implementations,” Paper presented at the International Institute ofFisheries and Trade Symposium, Corvallis, Oregon, 10–14 July 2000.
32
NRC, Sharing the Fish. With regard to potential antitrust violations, the U.S.
Department of Justice concluded that cooperatives did not appear to have anticompetitive effects.
33
The Alaskan pollack cooperative is supported by the American Fisheries Act, Public
Law 105–277, and it enjoys some expectation of permanence.
34
The plan requires the states to develop national plans of management regarding ﬁshing capacity. See the United States National Plan for the Management of Fishing
Capacity (NMFS, August 2004).
35
Ibid.
36
OECD, Toward Sustainable Fisheries: The Economic Aspects of the Managementof Living Marine Resources (Paris, 1997).
37
NRC, Sharing the Fish, 64–65, 74–75.
38
Ibid., 295–96.
39
Ibid., 243–45.
40
Ibid., 192–224.
41
Ibid.
42
For more details, see Congressional Testimony, http://www.legislative.noaa.gov/
111testimony.html (accessed 14 July 2009).
43
E. G. Buck, Ocean Commission: Ocean Policy Review and Outlook, (Washington,
DC: Congressional Research Service, July 2007).
44
Ibid.
45
NMFS, The Estimated Vessel Buyback Program Costs to Eliminate Overcapacity
in Five Federally Management Fisheries, June 2002.
46
NMFS, United States National Plan for the Management of Fishing Capacity,
August 2004.
47
See Sec. 303A, Public Law 109–479.
48
Ibid.

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49
Sections 303A(c)(6) (B) and (D), Public Law 109–479 refer to the procedures forthe initiation of LAPP by way of “petition” or “New England and Gulf referendum.”
50
M. Makino and W. Sakamoto, “History and International Characteristics of the Idea
of Fishery Resource Management in Japan,” Journal of Japan Fishery Science 69(2003): 368–75.
51
Ibid.
52
From an economic viewpoint, JCBRM aims to maximize proﬁt by catching particular target species and selling them in the market. See A. Hasegawa, “Theoretical Studyon the Shigen Kanrigata Gyogyo and Its Actual Types in Japan,” Journal of Fishery
Economy 33 (1989): 1–39.
53
Ibid. Comanagement can be deﬁned as “an arrangement wherein the responsibility
for resource management is shared between the government and user groups.”