Wednesday, June 9, 2010

Crabber: Let's cure 'indefensible' lease rates

Deckboss asked crab boat owner Ian Pitzman for permission to post the following letter calling attention to what he believes is a serious problem with crab rationalization, the reform that converted Alaska's major king and Tanner crab fisheries to catch and processing shares beginning in 2005.

The letter is addressed to the board of ICEPAC, the Inter-Cooperative Exchange Policy Advocacy Committee. ICEPAC is an umbrella group for many Bering Sea and Aleutian Islands crab harvesters.

I'd sure like to elaborate on this important letter, but lacking sleep I'll just post it for now and maybe circle back later.

May 10, 2010

ICEPAC Board of Directors

Mr. Chairman:

As a concerned member of your organization, I would like to address the sensitive subject of lease rates, a.k.a. "royalties," in the Bering Sea crab fisheries. I believe that the current environment, with lease rates at seventy to eighty percent, is unsustainable. In its short tenure, ICEPAC has proven very effective in addressing problems that confront our changing industry. With regard to the Bering Sea crab fisheries, lease rates are, by far, the biggest issue to everyone actually working on the water. Responsible vessel maintenance comes at no small price. Unsustainably high lease rates, paid out before vessel and crew costs, create a very real safety issue. Furthermore, these high rates are stifling to new entrants in this fishery. I am certain that these are unintended consequences of crab rationalization.

To be true stewards of a fishery, sometimes tough choices must be made. This is a tremendously valuable natural resource and we must make sure an equitable share remains on the water for the benefit of the vessels and their crew. I suggest to you that it is in our best interest as an industry to address this issue cooperatively. If the will does not exist for a voluntary agreement amongst harvesters, I feel it is our responsibility, as a group, to ask the NPFMC for lease rate regulation.

I have been a Bering Sea crabber all of my adult life. I live in Homer, Alaska, and I own two crab vessels, one of which is currently fishing. I have a modest amount of quota, and I lease from four other quota holders to maintain my fishing enterprise. Because I bought my first boat in 2006, just after crab rationalization, quota leasing is absolutely critical to my survival in this fishery. As I see it, businesses like mine are the model for future access to the industry. Short of inheritance, for an Alaskan to progress from the deck to wheelhouse to vessel owner, they must tread my path. This is a path of opportunity that must remain accessible.

Some may say that I can just opt out. If I can't afford the lease rates, just don't participate. But all that accomplishes is another boat tied up, more jobs lost, and one more voice silenced. I feel that this is an industry-wide problem and it must be addressed broadly. I can't ask my leaseholders to take less than the market rate for their quota, just as they wouldn't ask me to catch it for more. What is needed is an industry-wide lease rate that has variable potential, taking into account quota value, vessel operating costs, fair crew wages, etc. Perhaps an annually arbitrated cap verified by EDR would be prudent.

My intent in writing to the board today is twofold. First, I would like to see this subject "out of the closet," so to speak, and roundly discussed in public prior to the Council addressing it later this fall. Secondly, I would like to see our group take up this issue at the Kodiak ICEPAC meeting on May 27th. Let us be proactive rather than reactive. Everyone is well aware that seventy to eighty percent lease rates are indefensible.

Thank you for your attention to this matter.


Ian Pitzman

Fortune Sea LLC
Homer, AK
F/V Cape Caution & F/V Kona Kai


Anonymous said...

..If we lower our lease rates, we might not be able to live in Hawaii all year long while you peons risk your lives catching our quota in the Bering Sea! The government gave all the crab to us. You're just gonna have to suck it. By the way, I haven't received your check yet for that leased quota. You DO want to fish next year don't you? Maybe I'll give you 10%, if I feel generous.

Big quota holder (and buddy of Ted Stevens)

Anonymous said...

What ever you think of the issue (and I personally agree with him), you have to admit it's well written and thoughtfully laid out. Nice work.

Anonymous said...

Thanks Ian. Well said.

Anonymous said...

then we need to address halibut "lease" amounts - slipper skipper shares vs boat/crew are about 75%/25%. same same

Anonymous said...

Ian, very well written, but, good luck with any implementation. A poster pointed out the same applies to the halibut fishery. I do not believe that 'rationalization' of 'rationalization' will ever happen. It is after all, for better or worse, the new market. The holders of quota will forever more win. You are screwed. If it were allowed, the holders of (to lease) quota would gladly welcome a Russian fisher to harvest for 1%, with a couple of babes thrown in!