Letter to the Minister: Under 10s Quotas

Dear Minister

Under-10 metre quotas

We are not without sympathy for the dilemma that you face in addressing the problems of the under-10 metre fleet. The issue has become politicised and expectations have been raised within Parliament, the media and parts of the under-10m fleet that your intervention is about to relieve the well publicised quota shortage facing some under 10m fisheries.

Our fear is that the route that you appear to have chosen as a solution is about to satisfy no one whilst alienating many. The danger of your current course is that, as an industry, we will all be left worse off than before.

Problems

It was clear from the industry’s response to the under-10m consultation last summer that there was no appetite for a headlong rush into community quotas, which would have represented a huge step into the unknown for most fishermen currently in the under-10m quota pool. The flexibility provided by the pool system, to change target species to reflect local availability and market conditions, is clearly valued by inshore fishermen. Nevertheless, it is also clear that most under-10m fishermen have been disadvantaged by comparison with their counterparts in producer organisations by their lack of access to effective, on-going, locally tailored, quota management. It was not unreasonable therefore to trial new quota management arrangements for those under-10s who were interested, through a limited number of pilot schemes: so far so good.

However, it is Defra’s intention to increase the quotas available to the pilots through top-slicing, as a first step in a wider redistribution of quotas from the producer organisations to the under-10s. That, in our view, is a flawed policy for the following reasons:

It suggests that an incremental, piecemeal, approach is the best way to address the problems facing the under-10s, rather than a comprehensive package of measures. This looks and sounds more like a public relations stop-gap, responding to immediate political pressures, rather than a well thought through, comprehensive, policy designed to solve the problems in the under-10m fleet with the whole industry’s interests in mind.
It focuses on only one, relatively minor, aspect of the problem facing the under-10 fleets – the aspect dealing with domestic quota management arrangements; this is unlikely to make an impact on the problem as a whole
Forced administrative redistribution is fraught with administrative, legal and ethical complexities, no matter how well intentioned; this is a quagmire that it is best to stay clear of, not least because the signs are that after the dust has settled, the substantive problems facing the under-10s will remain unresolved
It invalidates the pilots as a pathfinder exercise, as it will not be possible to replicate the experience of the relatively privileged pilots across the whole under-10m fleet
A one-off quota adjustment, that POs might have been persuaded was good value for money, in return for ending turbulence in the under-10m sector, has been replaced by the prospect of an on-going salami slicing of quotas, many of which have been paid for by bank loans that are still being paid; resistance and at the very least a withdrawal of cooperation can therefore be expected

On the evidence so far, the exercise will create a series of anomalies that include:

Failing to meet the aspirations of the under-10s in pilot projects
Disadvantaging those under-10s inside and outside producer organisations who currently benefit from transfers and swaps arranged by POs
In effect, transferring fishing opportunities from one part of the under-10m fleet to another part of the under-10m fleet
Creating a list of instances where quota will be taken from POs on the basis of inadequate information, to give them to under-10s where there is no identifiable need
Creating a damaging atmosphere of division and hostility within the fishing industry
Undermining levels of cooperation between producer organisations and under-10s, in a welter of fear and suspicion and possible legal actions
Stripping quota from the one genuine self-supporting community quota initiative in the country – the Dutchy Quota Company
Transferring a discard problem from one part of the fleet to another part of the fleet
Undermining the market exchange of quota that has developed in response to the cumbersome alternative of administrative redistribution

The central question which we think that you must ask yourself is where is this going? Those under-10m fisheries where the problems are most acute are unlikely to receive enough quota to resolve their problems; whilst the system of quota management based on FQAs, previously regarded as a model of delegated responsibility, will be thrown into turmoil, partly through flaws in the methodology used to identify underutilised quota, but mainly through fear of future expropriations.

On the evidence so far, Defra does not have at its disposal the expertise to undertake a redistribution of the type proposed on anything like a fair or rational basis. This is not surprising, as one of the reasons that fisheries administrations allowed market exchanges in quota to develop was that it represented a more efficient way for quota needs to be met with quota supply without complex value-judgements by civil servants distant from the realities of seasonal fishing patterns and the balance of surplus and demand in the ports.

Solutions

The current focus on redistribution/reallocation/realignment, from the producer organisations to the under-10s, distracts from the central point which is that the problems facing the under-10s are multi-layered and that adjustments to the domestic quota arrangements, though attracting most attention and generating much heat, can only be a relatively minor part of any effective and lasting solution.

We have previously explained how the problems facing the under-10m sector evolved from the 1980s and 1990s; there is no need to go over that ground again. If however, there is a genuine will within Defra to put the under-10m fisheries on sustainable and profitable footing, it is necessary to deal with the underlying structural issues rather than treating the symptoms.

Against this background, our advice is:

Defer implementation of the pilot projects and redistributions until 1st January 2013; use the intervening period to develop a comprehensive solution to the problems in the under-10m fleet; this makes sense at a number of levels, not least preparing the ground for the pilots adequately and rebuilding cooperative links between the POs and the under-10s that are currently failing in a fog of fear and mutual suspicion. We believe that NUTFA and UKAFPO could be persuaded of the value of such as an approach.
Identify the core under-10 fisheries in which pool catch limits seriously constrain the fleet; the MMO statistics that we have seen so far suggest that this is a specific and geographically focused problem rather than the widespread and generic problem that has been portrayed. Solutions should be focused on these specific fisheries. This does not preclude more general support for the under-10 fleet but would have the merit of recognising that quota shortage is not a generic problem for this sector of the fleet and focusing policy accordingly.
Address the underlying problem of skewed fleet development. The fact that around 14% of the under-10m fleet catches around 70% of the pool allocations suggests that this is a core aspect of the problem. Any policy approach to the under-10s is unlikely to succeed unless this point is addressed explicitly.
Address the structural overcapacity in the under-10 m fleet. We are open to discussing a voluntary decommissioning scheme that is not wholly funded by government. Over the last 20 years the English over-10m fleet has been reduced by over 50% to fit its quotas; the numbers of under-10s have remained broadly static whilst their catching capacity has increased; we are not suggesting that a similar fleet contraction is necessary for the under-10s – but this sector of the fleet should be assisted to make an adjustment to balance capacity with fishing opportunities on a voluntary basis. We would suggest that a limited scheme (decommissioning, or some form of licence parking) targeted at the high catching under-10 would offer best value for money. It would be worth investigating that the type of transitioning finance linked to a Fisheries Improvement Plan highlighted at the recent launch of the International Sustainability Unit might be available from the World Bank or charitable foundations.
Dealing with the issue of latent capacity must inescapably be part of the policy.
Proceed with developing ways in which tailored quota management can be brought to the under-10m sector; encourage cooperation between POs and under-10m pilot groups at a regional level; the under-10s currently have quota assets that are not being used to their best advantage.
Underutilised quotas whilst other fishermen go short are not defensible. However, if there is market failure this should be addressed as such rather than reverting to the inherent limitations of administrative redistribution. Much can be achieved in a spirit of cooperation. The corollary is also true: cooperation will evaporate in an atmosphere of fear and suspicion.
Recognise that in some important instances relative stability shares are the underlying issue, rather than domestic quota distribution. The obvious example is cod in the Eastern channel where France holds 84% of the quota and the UK holds 7%: tinkering with domestic quota management rules can only have a limited influence on outcomes. Without destabilising relative stability, we believe that against the background of increasing TACs, it should be possible to secure significant additional tonnages of stocks of importance to the under-10m fleet through astute exchanges with other member states; this will not be cost free so it is worth considering what the UK is willing to trade in return – this need not be restricted to quota. It is time to be imaginative.
It is also worth reflecting on the fact that if TACs had remained at 1990 levels there would barely have been an under-10m quota problem that couldn’t have been addressed through underpinning and licensing constraints; the recent trend towards increasing TACs reflecting rebuilt stocks should provide more room for manoeuvre.
If, as part of a comprehensive package as described above, it is still necessary for you to consider quota redistribution as a last resort, this should be undertaken as part of a one-off adjustment in which security of quota through a formal system of user-rights discussed and agreed with the producer organisations.

I hope that you find the above constructive. Our fear is that you appear to be drifting towards decisions that will fail to resolve the problems facing the under-10s, whilst creating a divisive and damaging reaction from the producer organisations. This would be a major distraction when we have so many important issues to address as an industry.

We would appreciate the opportunity to discuss these important matters with you at the earliest opportunity.

Yours sincerely

Barrie Deas

Chief Executive