Glossary: Catch Shares

Allocation

Direct and deliberate distribution of the opportunity to participate in a fishery among identifiable, discrete user groups or individuals.

Annual catch limit

The maximum amount of fish that can be sustainably caught in a given year. Also known as total allowable catch.

Bycatch

Fish harvested in a fishery, but which are not sold or kept for personal use. Includes economic discards and regulatory discards; does not include fish released alive under a recreational catch and release fishery management program. [Source: 16 USC 1802(3).]

Catch share program

Any fishery management program that allocates a specific percentage of the total allowable fishery catch or a specific fishing area to individuals, cooperatives, communities, or other entities. The term includes more specific programs defined in statute, such as limited access privilege programs (LAPPs) and individual fishing quotas (IFQs). It also includes territorial use rights fisheries (TURFs) that grant an exclusive privilege to fish in a geographically designated fishing ground. The recipient of a catch share is directly accountable to stop fishing when its specific share of annual quota is reached. This term is not defined in the MSA.

Consolidation

A change in industry structure wherein the number of businesses decreases and the size of businesses (e.g., number of employees) increases over time.

Cost recovery fee

A fee charged by NOAA Fisheries to recover the costs of management, data collection and analysis, and enforcement programs that directly support a limited access privilege program (LAPP) or community development quota program. The relevant costs to recover are the incremental costs—costs that would not have been incurred but for the LAPP—since cost recovery is not authorized for non-LAPP fisheries. A cost recovery fee shall not exceed 3 percent of the ex-vessel value of fish harvested under any such program, and shall be collected at either the time of the landing, filing of a landing report, or sale of such fish during a fishing season or in the last quarter of the calendar year in which the fish is harvested.

Derby fishing/race to fish

Fishing conditions characterized by short seasons and severe competition for fish, often resulting in low profits and harvests that exceed sustainable levels.

Economic efficiency

The use of resources in a way that leads to the maximum production of goods and/or services. Economic efficiency is attained if no additional output can be produced without increasing the amount of inputs used to produce that output and if production occurs at the lowest possible per unit cost.

Ex-vessel value

A measure of the dollar value of commercial landings, usually calculated as the price per pound at first purchase of the commercial landings multiplied by the total pounds landed.

Fishing community

A community that is substantially dependent on or substantially engaged in the harvest or processing of fishery resources to meet social and economic needs, and in which fishing vessel owners, operators, and crew and U.S. fish processors are based. [Source: 16 USC 1802(17).]

Fishing cooperative

As defined by the Fishermen’s Collective Marketing Act of 1934, a group of “persons engaged in the fishing industry as fishermen, catching, collecting, or cultivating aquatic products, or as planters of aquatic products on public or private beds, that may act together in association, corporate or otherwise.” This term is not defined in the MSA.

Individual fishing quota

A federal permit under a limited access system to harvest a quantity of fish, expressed by a unit or units representing a percentage of the total allowable catch of a fishery that may be received or held for exclusive use by a person. Does not include community development quotas as described in MSA section 305(i).

Individual transferable quota

An individual fishing quota program where privileges can be transferred subsequent to initial allocations. This term is not defined in the MSA.

Limited access privilege

A federal permit, issued as part of a limited access system under MSA section 303A, to harvest a quantity of fish expressed by a unit or units representing a portion of the total allowable catch of the fishery that may be received or held for exclusive use by a person. This includes individual fishing quotas, but does not include community development quotas as described in MSA section 305(i). [Source: 16 USC 1801(26).]

Limited access system

A system that limits participation in a fishery to those satisfying certain eligibility criteria or requirements, contained in a fishery management plan or associated regulation. [Source: 16 USC 1802 (27).]

Northeast Groundfish Sector Program

An exclusive assignment of some portion of the total allowable catch to a group of two or more individuals holding permits in the Northeast groundfish fishery that have fulfilled council eligibility and participation criteria, and have agreed to collaborate, voluntarily and for a specified period of time, in order to achieve a common set of objectives. The group may be organized around a particular gear type, species or geographic area with its purpose being the receipt of an exclusive privilege to fish. This term is not defined in the MSA.

Overcapacity/overcapitalization

The difference between harvest capacity (the total amount of fish that can be harvested if fleet is unconstrained) and a management target catch level (e.g., annual catch limit/total allowable catch, quota, maximum sustainable yield). It is not synonymous with excess capacity, which is the difference between harvest capacity and actual harvest.

Permit bank

A collection of fishing permits held by an organization or individual for the purpose of leasing the associated fishing privileges to qualifying fishermen.

Quota pounds (annual allocation)

The amount of fish a participant is allowed to catch each year, usually defined in terms of total weight. Often calculated as a percentage of the quota based on a participant’s quota shares and varies according to quota changes over time.

Quota share

The percentage of the sector’s catch limit to which the holder of quota shares has access to harvest. This percentage is used to calculate the annual allocation, and it is not affected by changes in the catch limit over time.

Rationalization

An allocation of labor and capital between fishing and other industries that maximizes the net value of production.

Regional fishery association

An association formed for the mutual benefit of members to meet social and economic needs in a region or subregion. It is comprised of persons engaging in the harvest or processing of fishery resources in that specific region or subregion or who otherwise own or operate businesses substantially dependent upon a fishery. [Source: 16 USC 1802(14).]

Royalties

Fees collected from auctioning initial or subsequent allocations of quota under a limited access privilege program or other catch share program. The purpose of royalties is to collect resource rent. Resource rent is an economic term defined as a surplus value: the difference between ex-vessel value and production costs, which includes normal profit. Normal profit is the profit that a business owner considers necessary to make running the business worthwhile (i.e., it is comparable to the best amount the entrepreneur could earn doing another job). Potential reasons for collecting resource rent include ensuring a return to the resource owner (i.e., the public), avoiding an inefficient allocation of quota, and achieving distributional objectives. Rent recovery is not equivalent to cost recovery.

Share cap/allocation cap/accumulation limit

The maximum percentage of the shares, amount of annual allocation, or level of landings any single entity can possess and/or land. Caps and accumulation limits are used to limit consolidation and ensure that people, entities, or corporations do not develop too much control over a fishery or markets.

Shareholder

In the context of catch share programs, a shareholder is an entity (person, business, community, etc.) that holds a share of the quota in that program. In the context of businesses, particularly corporations, a shareholder (or stockholder) is an entity that owns at least one share in that business.

Transferability

In the context of catch share programs, the ability of quota shares and/or annual allocation/quota pounds to be bought or sold.