Introducing Transferable Fishing Concessions
- A check list for operative considerations
What about ” A transferable catch share is a share of a fish stock allocated for a period to an
individual fisher or a group of fishermen to use in their fishery or to transfer to other users.
Catch shares are often used in management where excess fleet capacity must be reduced or
quota leasing can help adapting quota holdings to actual catches.”
I have not seen an authorized definition. I stick to the EDF manual.
Starting with TAC/quota management I would say that “catch shares” is the overarching
concept (the EU paper uses “ fishing shares”). A catch share can then

be non-transferable (as some Swedish) or transferable as proposed by the commission

be individual (and transferable or not) as in DK = ITQ

be quasi cooperative as Germany and to some extent Scotland (PO administration). By quasi I
mean that the PO administer, the fisher is not supposed to sell his right, but selling his boat
often include a shadow price for the fish

A true cooperative as ThorupStrand in DK. You pay a symbolic amunt to get in – you get more
or less when you leave and the wealth generation stays in the cooperative
These are some of the legal/economic language. By the way see this paper:
Then in relation to sustainability you should define whether shares relate to landings or total
removals. To- day EU operate with Landings, this of cource being the reason we have
introduced removals or CQM. In the new EU text I assume that we talk about catches as total
removals, but that is not clear (commission still have the definition catches=landings – a
leftover?)
The EDF manual operates with removals, but in practical management this is not a reality
Then you could elaborate on TURFS and Effort management
Background
ITQ’s are the economist’s panacea for over capacity and bad economic performance of
fishing fleets. At the same time ITQ’s are often considered as the way to capital
concentration and closure of coastal communities.
An important point missing in the discussion is that the amount of capital that can be set free
by managing fisheries according to market principles is of an order that often leaves plenty of
room for ITQ systems to take account of and even promote societal policies and
developments. If the discussion of ITQ’s moved from the chambers of economist to the table
of politicians this perspectives would gain the attention it deserves.
Denmark introduced transferable quotas in 2007 with the result, that the fleet is now in
balance with fishing opportunities and fishermen have got a robust economy. The Danish
model allocates fishing right premiums to coastal vessels and fishing rights for new entry of
young fishers (The Fishfund). Public money allocated for scrapping of vessels are now used
for innovation and infrastructures, and fishermen’s money previously spent for superfluous
vessel tonnage and fuel is directed towards added value investments.
1.
What is ITQ?
Individual Transferable Quotas (ITQ) are quotas or quota shares allocated to fishermen or
fishing vessels in such a way, that the rights can be utilized, sold or rented out by the holder
of the right.
Aaron: What about ” A transferable catch share is a share of a fish stock allocated for a
period to an individual fisher or a group of fishermen to use in their fishery or to transfer to
other users. Catch shares are often used in management where excess fleet capacity must
be reduced or quota leasing can help adapting quota holdings to actual catches.”
I have not seen an authorized definition. I stick to the EDF manual.
Starting with TAC/quota management I would say that “catch shares” is the overarching
concept (the EU paper uses “ fishing shares”). A catch share can then

be non-transferable (as some Swedish) or transferable as proposed by the
commission

be individual (and transferable or not) as in DK = ITQ

be quasi cooperative as Germany and to some extent Scotland (PO administration).
By quasi I mean that the PO administer, the fisher is not supposed to sell his right, but
selling his boat often include a shadow price for the fish

A true cooperative as ThorupStrand in DK. You pay a symbolic amunt to get in – you
get more or less when you leave and the wealth generation stays in the cooperative
These are some of the legal/economic language. By the way see this paper:
Then in relation to sustainability you should define whether shares relate to landings or total
removals. To- day EU operate with Landings, this of cource being the reason we have
introduced removals or CQM. In the new EU text I assume that we talk about catches as total
removals, but that is not clear (commission still have the definition catches=landings – a
leftover?)
The EDF manual operates with removals, but in practical management this is not a reality
Then you could elaborate on TURFS and Effort management
2.
Why ITQ
The element of transferability is the core instrument in adapting fishing capacity to catch
opportunities. In its pure form it is highly efficient, and has been claimed to be an efficient
fisheries conservation tool (ref.: Can Catch Shares Prevent Fisheries Collapse. Christopher
Costello et. al.)
Ownership to a certain share of a fish stock is considered to favour fishermen’s responsibility
for the long term utilization of the stock. This has to be taken with some reservation
however. It depends on tradition in the given fishery, on the acceptance of biological advice
and on legitimacy of rules. It also depends on the number of right owners, economic
condition and fluctuations in market forces.
ITQ’s will without question adapt capacity to “fishing opportunities”. If adherence to rules is
low, control is weak and market drivers for upgrading are high the “fishing opportunities” will
exceed the TAC’s however. In other words under those circumstances ITQ will not prevent
illegal catches, upgrading and discards.
Perceived negative elements of ITQ’s as capital concentration and the closure of coastal
fisheries are likely effects of a purely liberal ITQ system. In most market economies such
consequences are regulated by public policy measures. See below regarding coastal fishery,
employment, regional priorities, new entrance etc.
3.
ITQ and economic efficiency
ITQ management is a machinery able to provide economic efficiency. In its pure form it
produces the highest yield pr capital input. It does not necessarily produce the maximum
yield for society, as it under certain circumstances of specialization will not allow for less
valuable fishing opportunities to be utilized. Such so called negative externalities have not
drawn much attention from economists.
Economic efficiency is important in fisheries where a rational handling of catches is
fundamental to the economic result. Fisheries for a number of pelagic species as herring and
mackerel depend on quantity and rational processing, and economic performance is sensitive
to restrictions in the use of the rights. On the other hand ITQ may work well in a number of
demersal fisheries for high value species, even with a societal regulation that favours e.g.
coastal vessels. High value fisheries e.g. daily caught fresh fish has a competitive edge of a
different nature than that of large scale economics.
4.
Introducing ITQ
4.1.
The type of right
The right should be given as a certain share of a defined TAC/quota. The ITQ and its use can
be restricted in a number of ways: It can be,




4.2.
allocated to certain groups e.g. persons qualified as fishermen (vessel owners and/or
crew)
allocated permanently to the owner of the right or subject to notice of termination
restricted with regard to transferability e.g. within given fleet segments or regional
boundaries
conditioned by its use on registered vessels (i.e. to avoid “slipper skippers”)
Initial allocation
ITQ’s can be allocated in a number of ways:



4.3.
By auction. This method ensures that the value of the right (the resource rent) is
immediately taxed by the public. In cases of severe over capacity the value is low.
Auction is a relevant method for allocating new fisheries.
Allocation to vessels according to physical or economic characteristics (the author
knows of no examples)
Allocation according to the individual vessels or owners historic catches seems to be a
method acceptable to the industry and authorities as it reflects “real past
performance”. Due to the considerable variability in vessel activities the initiate
allocation will challenge the legal and administrative process of transformation.
How can the right be used
The terms for the use of an ITQ have to be decided. Transferability is what makes the ITQ
work. But it can be regulated or restricted in a number of ways:
The trading of ITQ’s can be restricted in relation to
 geography, which is difficult to enforce
 vessel segments – e.g. to protect coastal fleets
Renting of ITQ’s within a given quota year can be
 prohibited or restricted
 made free
 bound to pooling schemes (producers organisation or the like)
Trading favours structural changes and permanent capacity reduction while the renting
favours continuous adaptation to fishing possibilities. In its extreme form – as in Danish
fisheries – a fisher having caught more than his vessel quota can rent the necessary fish with
a phone call.
Relation between 4.4.
Resource rent
An introduction of ITQ will result in a capitalization of the right. The value of the right
depends on the earnings in the fleet. Overcapacity may have the result, that the increased
capital value is nil. It should also be taken into account, that access to fisheries is often
restricted before the introduction of an ITQ-like system with the effect, that the value of
access e.g. in the form of a registered fishing vessel has already been capitalized.
In fisheries with severe over capacity the main capital value does not lie with the right as
such but with the transferability which makes it possible to conduct the fishery in an effective
way. An estimation of the cost of maintenance, fuel and interest paid for a 20% fleet surplus
gives a picture of the amount of money that can be saved or directed towards other
activities. On top of that better catch opportunities will occur due to improved accessibility
and reduced effort on the fish stocks.
If resource rent is introduced it should be by way of auction or as a transparent mechanism
introduced not later than the first allocation of the rights.
Types of resource rent:
In money,
 Yearly payment e.g. based on average earning indicators for the year
 Revenue from auctioning the fish. This is a once and for all payment
 Payment in connection with revenues from sale of rights.
In fish
 A certain share of the TAC is reserved for allocations for other purposes (Fish Fund)
 A certain share of the individual vessel quota is taxed in connection with sale of rights
4.5
Taxation
Taxation will have to be dealt with according to national law. The consequences of the initial
allocation may have to be dealt with according to special rules if the allocation of the right is
considered to be a new economic benefit and not just a continuation of an already given
right to utilize (but not to sell). At the first sale of the right after an ITQ introduction normal
taxation practise should be applicable.
4.6
Open Access
Open access to fishing possibilities can be considered in relation to two aspects:
 Does the acquisition of fishing opportunities require formal access conditions as
“fisherman status” or the like.
 Is access to fishing opportunities open to any citizen. The latter is seldom the situation.
[In the Icelandic case for the Human Rights Committee (CCPR/C/91/D/1306/200414
December 2007) the committee questions the government’s right to exclude individuals
from access.]
It should be considered if on the one hand if ITQ’s should be given as permanent rights
(private asset) or if they should be time limited or subject to notice of termination (public
asset) and on the other hand if a certain share of the rights should be reserved for new entry.
4.7
Social and policy considerations
ITQ management can be designed to serve societal policies in relation to:
Structural development of the fleet
 Restriction of capital- or owner concentration
 Defining fleet segments with no cross-border transferability
Allocation priorities
 Premiums for coastal fisheries or geographical regions
 Facilitating new entry e.g. young fishermen’s entry
4.8
Mortgage and property right registration
An important feature of ITQ’s is that the property right makes financing of the fishery easier
as financial institutions can gain mortgage in the rights. National law should take account of
this possibility and it should ensure a registration administration that enables a flexible trade
and transfer of fishing rights.
Rev. 2
12. February 2009
Re din Samudra artikkel. Løysinga med kooperativ er interessant. Eg er likevel litt forundra
over Thorupstrand kooperativ.
Som regel vil det vere slik at kooperativ vil fordele overskottet mellom sine medlemer.
Dersom der er eit overskott, og det
ikkje er avgrensingar på medlemskap, vil ein vente av det vil kome nye medlemer heilt til
overskottet vert redusert til null.
EDF page 42 http://www.edf.org/documents/11387_catch-share-design-manual.pdf
There are two main types of group-allocated catch shares:
••Cooperatives Shares allocated to a group of fishermen or other entities. The entire catch
can be allocated to one Cooperative or it can be split among multiple Cooperatives.
Cooperatives historically have been organized around a common feature such as gear type
or location. Some Cooperatives are built by individual shareholders who opt to pool their
annual share allocations such as Denmark’s system of Fishpools, which facilitates
temporary transfers (see Catch Shares in Practice: Danish Pelagic and Demersal Individual
Transferable Quota Programs).
••Community Fishing Quotas (CFQs) Shares allocated to a specific community with certain
rules and stipulations that tie the share, or the proceeds of the share, to that community.
These have also been called Community Development Quotas (CDQs), and Community
Quotas. Permit banks, community license banks and Community Fishing Associations are
also beginning to emerge, and these entities may be appropriate recipients or holders of
catch share privileges. Alaska has both CDQs and Community Quota Entities (CQEs). The
CDQs allocate shares to 65 native communities, which are then allowed to fish or lease
shares. CQEs are entities that are not granted shares, but are allowed to purchase and fish
shares.
Group-allocated catch shares are more common when the goal of the catch share is to
promote or benefit a specified group of participants. Organizing a group of fishermen, boats
and/or fishing businesses can be challenging. Therefore, Cooperatives and community shares
have generally been implemented where one or more of the following characteristics exist:
discrete fishing units with strong social bonds, common interests and values; ability of group
to monitor and enforce rules; or mutually agreed upon laws, norms and methods for
functioning as a group. There are significant costs of managing a Cooperative that need to be
covered. These can be especially expensive where organized groups do not yet exist and
most models charge the participating fishermen a fee for the group services. In some cases, a
Cooperative can be used to consolidate quota into a few entities, which may not fit the goals
of the catch share program.
Despite the challenges, some group-allocated catch shares have been successful in meeting
key social and/or economic goals. When there is a cohesive, tight-knit group that can
collectively manage a fishery, or there is a goal of promoting a certain group of fishermen
(i.e., based on location or gear type), a group catch share may be preferable.
Combinations
It is possible to combine these individual and group approaches. For example, a Fishery
Management Plan may identify an individually-allocated catch share, but various fishermen
can choose to create agreements among themselves and act as a group. On the flip side,
when a management plan creates a group-allocated catch share, each group may choose to
implement individual shares among themselves in order to effectively fish and manage their
shares. A combination approach, either formal or informal, may be the most effective for a
fishery.
All of these approaches are feasible and can work. The key is to assess the goals of the
program and how the overall design will affect incentives of participants in order to achieve
those goals.
Additional considerations
One important purpose of allocating shares is to eliminate, or minimize, the incentive for
fishermen to competitively race for fish. Any time the program design encourages an
individual to race, the catch share program will not achieve full benefits. This could happen
under both individually-allocated systems – e.g., if individuals want to maximize a limited,
higher value fish – or under group-allocated systems – e.g., when group activities are not
coordinated and members need to race for good fishing grounds or a competitive share. In
these instances, systems that enforce accountability will be even more important. See Step 6
– Develop Administrative Systems for further discussion.
Communication and coordination of fishing activity are often important components of a
catch share program, especially when there is a high likelihood of encountering prohibited
bycatch or species with low catch limits. Both individually-allocated and group-allocated
approaches have successfully addressed this challenge. For example, the Pacific Whiting
Conservation Cooperative has a protocol for tracking and avoiding bycatch hotspots through
real-time reporting of catch composition and the enforcement of closures in real-time. The
British Columbia Integrated Groundfish Program requires real-time trading and catch
accounting to ensure that all species are accounted for as they are caught.
Once you have decided whether to allocate shares to individuals, groups or a combination of
both, the specific privilege holders must still be determined. In the case of individuallyallocated systems, existing licensing conditions will be important determinants. In almost all
cases where a fishery has moved from a limited entry system to an individually-allocated
catch share program, the catch share privilege holder has been the license holder. For
example, in British Columbia the allocation is based on the vessel, because vessels, rather
than individuals, are licensed (Grafton et al., 2005). In the U.S., permits are generally held by
an individual (though it may have to be tied to a vessel) and U.S. catch shares have generally
reflected that by allocating catch shares to individual participants (Redstone Strategy Group,
LLC and Environmental Defense Fund, 2007). Following existing licensing conditions makes
allocation administratively easier and ensures that existing participants are included in the
program.
For group-allocated catch shares, there must be an actual entity to hold the shares. Entities
that hold and manage the shares could be an existing fishermen’s association, a non-profit
corporation, local government or another recognized and organized entity. If a suitable entity
does not exist, then it must be created. For example, when NOAA approved (upon the
recommendation of the New England Fishery Management Council) a cod (Gadus morhua)
sector allocation for the George’s Bank Cod Hook and Fixed Gear Sectors, the fishermen were
required to create a legal entity with the responsibility of managing the allocation and
reporting to the government on a regular basis.
Furthermore, when catch shares are group-allocated, there are two different levels of
interaction to consider. First, the interaction among groups, i.e., can shares be traded across
groups? And second, the interaction within a group, i.e., how do group members divide up
the catch share?
Andelsforeing
There 'contract may cover a number of issues: quotes allocation, profit sharing, a
organization, investments in the fleet and other. The contract may also contain policy issues
such as vessel size limits ownership regulations or fishing gear restrictions. Here I deal with
the issue of quota utilization ( allocation, transfers) I presume that the Coop contract is
based on the following elements:
(Edit homepage yield make a contract standard)
*Quotashares and quotas are owned by the coop
* entry the the coop
What is the attraction of working for your livelihood in a fishers coop instead as an individual
fisherman? The latter is the most common way of organizing
Ostrom, heldbo, offer some benefits that may owershadow the difficulties. The main
difficulty being that the decision making is not done by the individual but in a democratic
process between peers. This will require a well functioning cohesive social structure
cohesion.
The fishing becomes more community based thus contribution to the social fabric that can
guard small communities and investments add harbours that are the basis for their survival.
A threat to the share-system
The European in-shore fishing is mainly based on the share-system, a system of equally
sharing
risks and income amongst the fishing crew. By the introduction of transferable rights, given
to the
boat owner, this traditional system is eliminated, and replaced by an employer-employee
relation.
For thousand years, the share-system has proved to be the base of a positive involvement of
fishers
in the fishing business and in coastal communities of Europe. In addition, the share-system is
less
vulnerable to fluctuating prices and catches. Research in Denmark indicates that by
promoting
transferable rights, the CFP will take away the basic foundation of the share-system.
Instead, the CFP should create a framework to cater for and secure the share-system by
recognising
this as a preferential economic organisation in the fisheries. Further the CFP should recognise
and
promote the in-shore and share-based fisheries as important to thriving communities and
coastal
culture. It is this type of fisheries that provides the high quality catches, maintains the basic
European maritime cultural heritage, and can thus gain from tourism and value-adding
marketing.
By promoting a transferable rights regime which in a very short time leads to a
concentration, the
CFP will take away possibilities for the in-shore fishing sector to develop products based on
regional identity and terroir-maritime. With the competition from third world aquaculture
and fish
harvesting, the production of high value commodities will be an important factor in the
future food
market.
Case study
The introduction of a transferable rights regime resulted in dramatic changes in the Danish
fishing
sector. Although most fishers were unprepared for the rapid changes, there has been a few
examples
of initiatives trying to protect the in-shore fisheries from the changes. This case study draws
upon
experience from an initiative in the fishing community of Thorupstrand.2 The fishers in
Thorupstrand catch high value fish products in the North Sea and Skagerrak that are landed
on the
same day they are caught and typically sent of to the central and southern European markets
for
fresh and high quality fish. In the village of Thorupstrand, boat owners and fishers have
established
a cooperative company where they have bought quotas jointly, with the aim of securing the
community of its present and future catch rights. In that way, the cooperative company
replaces the
Danish state as provider and guarantor of fishing rights.
The basic principle in the cooperative is that any fisher landing his fish in Thorupstrand can
become
a member by paying a fixed entrance fee and by committing himself to an ethical codex.
Thereby
younger fishers without quotas have an opportunity to enter the community quotas on the
same
conditions as the founding members. This means that it is not possible to speculate in the
quota
value of the cooperative, and thereby extracting the surplus from future generations, which
is
happening other places in Denmark as a consequence of transferable rights. In Thorupstrand
there
has been a positive influx of new and young fishers, something very rare under the new
management regime.
Financial vulnerability
The fishing quotas have been bought with money from loans in local banks, with the security
of the
entrance fees and the value of the quota. Before the introduction of transferable rights the
community with around 20 fishing vessels had none or very little debt. Now it has a debt of
13.5 €,
solely from acquiring the necessary fishing quota. These loans and interest have to be paid
off by
catching fish, and the financial crisis has meant a decrease in prices, while at the same time
one of
the credit institutions has been declared bankrupt and taken over by the state. Thus, at a
time with
huge catches it is not enough to meet increased demands from the credit institutions.
Community based quota companies, which use advantages of scale to own and distribute
quotas in
cooperation, is a sustainable model for in-shore fishers to survive a transferable rights
regime. If,
however, dependency on borrowed money is too big, the model is not resistant to financial
and
price crisis. Therefore the CFP should focus on delivering a framework that caters for
communities
and inshore fishers by diminishing the dependence on loan-capital.
A solution for the share-system and coastal fishing communities of Europe
1 - In the Danish case fishers and communities were unprepared for the repressive
expropriation of
the old equal catching rights, the introduction of a privatised fishing rights system and the
consequent fast and sudden rise in quota (boat) prices. Any future European implementation
of a
transferable rights regime should be implemented with precaution and with the proper
preparations
in the in-shore sector.
2- In fact it would be better to exempt the in-shore and post-industrial fisheries from a
transferable
rights regime, as this leads to concentration in a few companies and harbours, and changes
the fleet
from an owner-operated into a relationship of employer/employee. This means business
activities
are moved away from communities, and that cheaper migrant labour is hired as crew. The
CFP
should differ strictly between the in-shore and the industrial fisheries.
3 - To avoid non beneficial mortgage and indebtedness of the in-shore fisheries, a percentage
of the
total allowable catch should be allocated to the in-shore sector beforehand, together with
the
establishment of modern local cooperative quota companies. These quotas could be
allocated with a
certain set of restrictions that would allow the in-shore fishing to develop. This would make
the inshore
sector less vulnerable to financial fluctuations and crisis. By promoting this model the CFP
would promote economically, environmentally and socioculturally sustainable fisheries.
The single most important point is to safeguard the in-shore fisheries from a transferable
rights
regime. The CFP should, on a European scale, work to promote this sector as it is ecologically
more
sustainable, delivers high-value products and has a very important economic role and
cultural
significance in rural and coastal Europe.
We hope you find our comments useful.