Halibut, sablefish IFQ program more costly than thought

Posted: Tuesday, April 12, 2005

Administering, managing and enforcing the Alaska halibut and sablefish Individual Fishing Quota program costs more today than managing those fisheries did in the days before the IFQ program was created, according to a report issued this week by the federal Government Accountability Office.

The program, created in 1995, cost at least $3.2 million in fiscal year 2003, roughly equivalent to 1.4 percent of the dockside (ex-vessel) value of the catch, the report said. Its complex rules are partly to blame, the GAO said.

Two much smaller programs— the surfclam-ocean quahog and wreckfish programs— actually cost less under their new IFQ management schemes, in part because those Atlantic species programs are simpler to manage, GAO said.

The halibut and sablefish program was developed by the North Pacific Fisheries Management Council and implemented by the National Marine Fisheries Service in 1995 in a response to the overcapitalization of the fisheries that had led to seasons sometimes lasting less than two days. Combat fishing often put fishers at risk, led to the loss of gear, excessive bycatch of nontarget species and poor product quality, the GAO report noted.

According to Anu K. Mittal, GAO director of natural resources and environment, the IFQ program has achieved many of its goals, such as stabilizing fisheries and reducing excessive investment.

"However, these program also have raised concerns, such as the costs of IFQ management and the equity of gifting a public trust resource to a select group of beneficiaries," Mittal said in the report.

A variety of cost-recovery methods are employed to recoup management expenses for the halibut and sablefish program— user fees, quota set-asides and outsourcing of government services such as monitoring compliance to industry.

In 2003, those methods were applied under what is known as the "incremental costs" approach. The Magnuson-Stevens act, which requires recovery of "actual costs directly related to the management and enforcement" of IFQ programs, does not define what that means.

The fisheries service has interpreted it to mean costs that would not have occurred but for the existence of the IFQ program itself, so-called "incremental costs."

The GAO reported, however, that if the phrase were interpreted to mean "full costs," the service could have recovered more. The GAO recommended that Congress consider clarifying the IFQ cost-recovery fee provisions of the act.

The GAO also noted that while cost-recovery in the halibut and sablefish fisheries may be incomplete, at least those fisheries have a cost-recovery program. Though the Magnuson-Stevens act requires it, neither the surfclam-ocean quahog fishery nor the wreckfish fishery has a cost-recovery scheme.

Further, the GAO report said a lack of guidance by the fisheries service on how to estimate costs for IFQ programs has led different organizational units to use their own methodologies.

"Without a standard cost estimation process, the National Marine Fisheries Service has no credible basis for knowing whether it is charging the appropriate fees and whether it is recovering all required costs," the report said.

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