Effort Control: The NFFO Position

We have come to the inescapable conclusion that the scale of effort reductions imposed will seriously jeopardise the long term viability of the vessels that are subject to it, even though strenuous efforts are being made to “buyback” days through various cod avoidance measures. The paper below spells out the NFFO position in detail.Cod Recovery and Days at Sea Restrictions: an NFFO Position Paper

The EU Cod Recovery Plan agreed by the Council of Ministers in November and formally adopted in December 2008, imposes a 25% reduction in fishing effort in 2009, with further reductions in subsequent years, dependent on the conservation status of the various cod stocks. The Regulation also provides scope for vessels and fleets to “buy-back” days at sea up to a maximum of the 25% reduction.

Since the start of this year the NFFO has been in detailed discussions with Defra officials over the detail of how the new Kw days regime should be applied during this year and beyond.

Within this context, this paper describes the NFFO’s current position. .

Immediate Issues

A number of immediate issues arise from the interim UK effort regime that will be in place until 30th April. It is appropriate because of this time frame that we address these at the outset of our paper:

We can see no justification for the restriction that applies a penalty for bringing forward days from the rest of the effort year into the interim period. Almost all fisheries are seasonal, some more than others and it wholly arbitrary, artificial and unnecessary to disadvantage vessels operating in fisheries whose main period of activity may be predominantly in the first three months of the year.
The failure to provide licence entitlements with an allocation of days, in the same way as active eligible vessels, is an unsustainable position, which has immediate consequences for operators who find themselves in this position and long-term implications for fleet renewal. It is vital to resolve this issue quickly.

Effort Control as a Management Tool

It is a matter of grave concern to us that effort control has emerged as a key instrument in the CFP without any serious analysis as to its effect, either in terms of fishing mortality or its impact on the economic viability of vessels. Under restrictive time at sea, it is rational economic behaviour for fishermen to fish more intensively during the period during which they are allowed to go to sea, than would otherwise be the case. This is the primary reason why there is a large area of uncertainty over the precise contribution that effort control can make to reducing fishing mortality. Fisheries scientists express this problem as “the non-linear relationship between fishing effort and fishing mortality” and “the fisheries response to restrictive measures” but these phrases hardly capture the scale of the potential misalignment between days at sea and the objective of rebuilding cod stocks. For example, where vessels target inshore stocks to save their days at sea allocations, or high grade to maximize income, or adapt their fishing pattern in a thousand other different ways, effort control can not only be a very blunt and largely ineffective measure, it actually creates a perverse incentive. Despite repeated requests, the Commission has failed to ask of ICES or even STECF, the fundamental question: Does effort control deliver stock recovery? To date we have seen no evidence that recovery plans based on effort control are more successful than those without an effort regime.

What is much more certain than the contribution that effort control can make to the reduction in fishing mortality, is the clear evidence that effort constraints increase fleet costs and reduce operational flexibility, ultimately to the point at which the business viability can be jeopardised. How close our fleets are to that point in 2009 is, so far, an open question.

The impact of effort reductions is absolute, in a way in which quota controls are not. Limitations on time at sea quickly translate to reductions in economic viability. By contrast, when quotas are reduced, there remains a degree of flexibility, for example by changing target species. This type of flexibility is simply not available when a restrictive effort regime applies and suggests that much more care needs to be taken when applying effort controls.

Finally, we would make the point that the application of days at sea reductions in the revised cod recovery plan has been the antitheses of good governance. Days at sea restrictions have been applied under the new regime:

in the absence of a meaningful regulatory impact assessment, despite this being one of the most significant changes to the CFP since its inception
with a scale of reduction from baselines that amounts to the irresponsible
and with reduction rates that are wholly arbitrary , with no clear relationship to ICES advice

It is for these reasons – the questionable status of effort limits as an effective conservation tool, along with its blunt and damaging economic impact – that the NFFO has consistently opposed, and continues to oppose, the application days at sea restrictions, in favour of alternatives.

Effort control is the last throw of the dice of a centralised command and control system that itself is overdue for reform. Its primary merit is cosmetic. It can be applied at a distance by a remote bureaucracy, giving to the gullible the impression of effective intervention and management. Its other advantage for the Commission is that is can be used as an instrument of coercion: to force member states to reduce fishing capacity through publically funded decommissioning schemes, or to apply other management measures that do have a prospect of directly reducing fishing mortality on cod, such as more selective gear or various types of spatial/temporal cod avoidance arrangements.

The NFFO was dragged reluctantly into the UK’s Kw pilot scheme for 2008. It was abundantly clear to us at that stage that the headroom in days permitted by the Commission would not survive the initial introductory period, and so it has proved. The Commission, through the new cod recovery plan, is now in a position to demand the most draconian reductions without having to deal with the problems and practicalities of implementation. These have now been transferred to the member states. We are therefore currently in that uncomfortable period of finding ways to accommodate and ameliorate unmanageable effort reductions.

Effort Control in 2009

The novel features of the new cod recovery plan are:

The establishment of effort baselines relating to fleet effort during the period 2004 – 2006. There are a number of significant concerns over the accuracy of those baselines and the lack of transparency in the process through which they have been established. We have yet to reach the stage when we have confidence in the baselines.
The scale of the effort reductions. As discussed above the 25% reduction is at a level where there is no comparable example, in terms of economic impact or implementation problems
The Kw days approach, which transfers competence for detailed management of days at sea restrictions from the Commission and Council of Ministers, to member states. What was sold as “flexibility” for member states to tailor their own effort regime to their own requirements, becomes a huge, unmanageable burden, with this scale of reduction
The facility for vessels and fleets to “buy-back” the reduction in days at sea allocation up to a maximum of 25% in return for the adoption of various kinds of cod avoidance measures.
The extension of the cod recovery zone in to the west. The absence of adequate consultation on changes to the western boundary of the CRZ has meant the unnecessary inclusion of an area of deep water which harbours a clean saithe fishery in the CRZ.

Against this background, the UK authorities and the devolved administrations, have instigated a number of cod avoidance measures as a means of “buying back” the 25% reduction imposed in 2009. In particular, the Scottish administration as part of the Scottish Conservation Credits Scheme has taken the lead in applying real time closures in both Scottish and Norwegian waters, building on an approach first applied in 2008. Defra / MFA have followed suit with a number of real time closures in English waters and the Northern Irish administration has taken the lead in proposing a number of measures tailored to the fishery in the Irish Sea.

The NFFO has been asked for its views on how to move forward in the context of the circumstances described above. The rest of this paper describes those views.

NFFO Position

The introductory remarks to this paper should have left no doubt that we are strongly opposed to the use of days at sea restrictions for a range of reasons. Nevertheless, we recognise the importance of working collaboratively with Defra and the devolved administrations to secure the “least worst” outcome for 2009, whilst pressing for CFP reform at European level.

Our starting point is that the scale of the 25% reduction applied in 2009 is wholly arbitrary with no basis in scientific advice or in negotiated consent from those to which it applies. Against this background, we wish to make it clear that should there be evidence that days at sea for 2009 are insufficient to allow the fleets to take their legitimate quotas, thereby jeopardising the long term viability of the UK fleets, then we must hold the UK Minister to his commitment to return to Brussels to renegotiate the package. We know this will not be easy and that it is therefore important that we provide the Minister with the strongest possible negotiating hand. In particular, we must demonstrate that the UK has made vigorous efforts to implement the new cod recovery plan.

For these reasons, we outline the following package of measures that the NFFO could support as part of the UK’s buy-back package:

Real Time Closures

RTCs in Scottish Waters: We support real time closures both as an effective means of cod avoidance and as a contribution to buying back days at sea. However, a precondition of that support is that that we are directly involved in defining the conditions and criteria used to apply real time closures to our vessels, whether in English, Northern Irish, Scottish, or Norwegian waters. There have been serious deficiencies in terms of lack of transparency, communication and involvement in the RTCs applied by the Scottish administration. This may be excused by the speed at which they have been applied but it is now essential that the failures of governance are addressed and we are party to any discussions on any real time closures that apply to our fleets.

RTCs in Norwegian Waters: As the terms of the RTC regime in the North Sea are solidified during discussions between EU and Norway scheduled for May, it is critically important that there are strong communication channels between negotiating officials and the NFFO. Indeed on an issue such as this there is a very strong argument for the industry to be direct parties to the negotiations.

What is not acceptable (and we think is now fully understood) is to have one administration making RTC rules for fleets that have not been party to the development of those rules.

It is a matter of demonstrable fact that many NFFO member vessels spend a very high proportion of their time operating in “Scottish” waters and in the Norwegian sector of the North Sea. It is imperative therefore that the arrangements that would allow us to shape the RTC programme in Scottish waters are quickly put in place.

RTCs in English Waters: We support the application of RTCs in the English zone as a contribution to cod recovery and as a means of buying-back days. However, given the relatively few vessels operating in the central and southern North Sea, we don’t think that the Scottish arrangements can simply be transferred across, as there will be too few vessels operating to trigger sufficient closures to amount to a credible measure. We suggest that logbook/VMS/LPUE data is used as a substitute. We are happy to discuss this further.

Closures in the Irish Sea: The restricted area of the Irish Sea and the existing seasonal closure means that RTCs are not an appropriate approach for this zone. Alternatives are discussed below.

Eliminator Trawl

The NFFO was involved in bringing the eliminator trawl from the United States to the UK and the initial trials on the East Coast.

We remain of the view that this gear represents a breakthrough in the search for a net that is selective for cod. In circumstances where an almost total exclusion of cod from the catch is required it shows great promise. What is also clear, however, is that the eliminator trawl is not a panacea. Much more work is required to demonstrate its utility in a range of different fisheries and with different sizes of vessel and for this reason we have given trials of different variants of the eliminator priority in this year’s Fisheries Science Partnership projects. However, the funding available to provide a complete picture of the eliminator’s potential is not likely to be available from within the FSP budget and we therefore think that it is important to identify alternative sources of finance for this important work.

We see the eliminator being useful in meeting the EU Norway commitments, should uptake of the cod quota reach 90% by 15th November but also as part of cod avoidance plans.Juveniles/ Improved Exploitation Pattern

We believe that more could be done, as part of the buyback programme, to defer capture of juvenile cod, thereby improving the exploitation pattern of the species. In this context we would propose the following:

North Sea

Nephrop trawlers should be able to buyback a relevant proportion of days in return for increasing the selectivity of their gear:

For twin rig trawlers targeting nephrops, an increase in mesh size to 99mm (with a maximum twine size of double 4mm) throughout the North Sea
Single trawls targeting nephrops, should be rewarded with extra days if they increase the mesh size in their mandatory square mesh panel from 90mm to 100mm.

Irish Sea

The following measures are advanced for the Irish Sea as a three stranded approach:

as a contribution towards rebuilding cod stocks
as part of a UK case to the Commission for revisiting the cod recovery plan
as a contribution towards the buy-back of days in 2009

We would support:

The retention of the current seasonal closure in the Irish Sea, appropriately refined in area and duration
The establishment of an “amber” area in the eastern Irish Sea. This area would be closed to those vessels which agree to the closure in return for additional days. A derogation would apply for vessels that catch minimal amounts of cod. Clearly, this measure would be more effective if supported by vessels from other member states.
Whitefish Vessels: Increased mesh size for vessels targeting whitefish from 100mm to 120mm (with max twine size 6mm single or 4mm double as per current legislation)
Nephrops Single Trawl: Mesh size increase from 70mm to 80mm (again constructed from max 6mm or double 4mm twine)
Nephrops Twin-rig Trawl: Mesh size increase from 80mm to 99mm (max 6mm single; 4mm double twine)
Requirement for a 120mm square mesh panel in the tapered section of all nets targeting nephrops (following positive results from ongoing gear trials in the Irish Sea)

It has to be appreciated that the scale of the projected cuts in effort under the Cod Recovery Plan to 2013 are absolutely inconsistent with the economic survival of a whitefish or a nephrops fleet in the Irish Sea. For this reason the forgoing proposals would only be acceptable as part of a package which involves a serious UK commitment to secure a renegotiated CRP with more realistic effort obligations.

Clearly we would wish to discuss the various strands of a renegotiated CRP but the elements of a possible approach that we could find acceptable for the Irish Sea would contain:

The UK, as a high level policy objective, should strive to cap the UK pot of days at 2004 -2006 reference level, on the grounds that 2009 has demonstrated extreme economic dislocation resulting from an arbitrary but very severe reduction of 25%
This allocation should only be reduced in the future to address technical creep or if capacity reductions have not achieved an equivalent reduction. (This is the approach that applies in Faeroes)
It is important to appreciate that the main reductions in cod mortality are secured by the severe constraints on TACs
The implementation of the above should take place within the context of a programme of systematic upgrading of the science on Irish Sea fish stocks and in particular, the state of the cod stock taking into account, interaction with other stocks and the influence of climate change and cyclical pattern

Capacity Reduction: a novel approach

Effort control is a temporary, inadequate, economically perverse substitute for a structural policy. In this we agree with the Commission, which has in general been frustrated by member states’ reluctance to reduce the fishing capacity of their fleets through publically funded decommissioning schemes; and also with the Norwegian Government which has always seen effort control as a failure of political will and commitment to the fishing industry.

The most effective way to reduce fishing capacity is through a voluntary, publically funded decommissioning scheme and the UK has in the past made a substantial contribution to the recovery of cod stocks and underpinning the profitability of the fleet and the prospects for a high level of compliance by funding substantial decommissioning schemes.

We appreciate that given the current financial crisis public finances will be stretched for the indefinite future. We therefore advance the idea of a capacity reduction programme based on co-financing between government and industry.

The merits of this approach would be the permanent reduction of capacity at a lower cost to the public purse than a full decommissioning scheme; a reduction in the fleets targeting cod, and increased viability for the vessels that remain. We are happy to discuss the practicalities of how this might be achieved.

Flat Rate Allocations

One of our principle objections to the Kw days approach is that it would lead to pressures to allocate days to different classes of vessel on a differential basis. This would be highly divisive and involve fisheries managers in a series of value judgements as to whom was more deserving, over and above which vessels should be rewarded for “virtuous” behaviour. It would also embed and institutionalise effort control in a much deeper way than has hitherto been the case.

The way to avoid this is to ensure that effort is allocated on a flat rate basis, with additional days only for various categories of cod avoidance.

Licence Entitlements

At any point in time a number of fishing vessel licenses will not be attached to vessels for a variety of reasons but mainly relating to commercial transactions and restructuring. We have asked that licences in this transitional situation are granted a days at sea allocation in the same way as an active fishing vessel. This was the arrangement under the previous new days at sea regime and is entirely consistent with the principles of equity and flexibility to allow for new investment. The licence represents a potential authority to fish and without a days at sea allocation that potential is stripped away. We consider that both morally and as a matter of law, entitlements should receive an allocation of days in the same way that currently active vessels are.

Exempt Fleets

The provision that allows vessels which catch minimal amounts of cod – below 1.5% cod -exemption from the days at sea regime is an important one and its early availability should be pursued vigorously. We would anticipate that significant parts of the beam trawl, saithe and nephrops fleets would be eligible to take advantage of this clause.

Observer Programme

The absence of derogations for vessels that carry observers to confirm that cod catches remain below 5% and the removal of the derogation for a clean saithe fishery, are proving extremely restrictive. There is a big difference between 5% and 1.5%, especially against the background of a recovering cod stock.

2004-6 Reference Period / Validity of Baselines

In the interests of transparency and to ensure the accuracy of the data we consider it important to find a means to revisit both the rational behind using the 2004-6 reference period and the quality control used in establishing the baselines for the various effort groups. We know of serious deficiencies in the data employed by other member states and it is important that we have the facility to scrutinise the UK data for possible anomalies that may only be obvious to an industry eye with direct experience of the fisheries concerned.

Cod Avoidance Plans

The NFFO, during 2008 trialled a number of individual vessel cod avoidance plans through which the vessels designed and followed a series of spatial, temporal and gear avoidance measures tailored to their own vessels. Although the pilot was late starting, the results were in the main encouraging and we consider that it is important to continue the trial, not least because of the useful data on cod discards and how to avoid them that the trials generate. We appreciate that there are administrative challenges in operating individual cod avoidance plans at fleet level but as an experiment in bottom-up management that gives the industry responsibility for designing and implementing its own arrangements subject to periodic audit, it is an important, ground breaking, initiative that should be continued and supported.

Conclusion

This paper has described the NFFO’s opposition to the Kw days regime. It argues that the scale of the effort reductions in the cod recovery plan is such that the industry will not be able to absorb them and at the same time remain economically viable. It is therefore inevitable that at some stage the Minister will have to return to Brussels to revisit the legislation agreed last November.

We appreciate that the Minister’s negotiating hand will be strengthened if the UK can demonstrate that it has been vigorous in its attempts to implement the cod recovery plan. We therefore put forward a range of suggestions for measures that could be included as part of the buyback arrangements. We also raise a number of concerns about the implementation of the Kw days regime to date.

NFFO March 2009.