8.0 ECONOMIC IMPACTS AND ANALYSES
8.1 Analysis of Economic Impacts
8.1.1 Expected economic impacts of the pelagic longline
alternatives
8.1.2 Expected economic impacts of the shark
gillnet fishery alternatives
8.1.3 Expected economic impacts of the general
alternatives
8.2 Regulatory Impact Review
8.2.1 Description of the management objectives
8.2.2 Description of the fishery
8.2.3 Statement of the problem
8.2.4 Description of each alternative
8.2.5 Economic analysis of expected effects of each alternative relative to
the baseline
8.2.6 Summary
8.3 Final Regulatory Flexibility Analysis
8.3.1 Statement of the need for and objectives of this rulemaking
8.3.3 Description and estimate of the number
of small entities to which the final rule will apply
8.3.4 Description of the projected reporting,
record-keeping, and other compliance requirements of the final rule, including
an estimate of the classes of small entities which will be subject to the
requirement and the type of professional skills necessary for preparation
of the report or record
8.3.5 Description of the steps the agency has
taken to minimize the significant economic impact on small entities consistent
with the stated objectives of applicable statutes, including a statement of
the factual, policy, and legal reasons for selecting the alternative adopted
in the final rule and the reason that each one of the other significant alternatives
to the rule considered by the agency which affect small entities was rejected
8.3.6 Summary
8.0 ECONOMIC IMPACTS AND ANALYSES
As described in section 3, before implementing management measures, NOAA Fisheries
must consider the economic impacts of the management measures, particularly in
accordance with two laws: the Regulatory Flexibility Act (Reg Flex Act) and Executive
Order 12866 (E.O. 12866). This section contains an economic analysis, the Regulatory
Impact Review required under E.O. 12866, and the Final Regulatory Flexibility
Analysis (FRFA) required under the Reg Flex Act. Additional economic and social
considerations and information are discussed in sections 7 and 9 of this document
and chapter 5 of the annual SAFE report.
8.1 Analysis of Economic Impacts
8.1.1 Expected economic impacts of the pelagic longline alternatives
Number of pelagic longline fishermen
NOAA Fisheries considers all HMS permit holders to be small entities. In October
2001, there were approximately 208 fishermen with a directed swordfish limited
access permit and 112 fishermen with an incidental swordfish limited access permit.
Therefore, in October 2001, there were approximately 320 fishermen who could use
pelagic longline gear to fish for HMS. This is down from the 443 fishermen who
were permitted to use pelagic longline gear in HMS fisheries in October 2000.
The decrease in number of permit holders could be due to a number of reasons.
For a description of possible reasons, please see chapter 9 of the 2002 SAFE report
(NOAA Fisheries 2002).
Only a few of these fishermen actually report fishing with pelagic longline gear
in logbooks (considered "active"). In 2000, 199 fishermen reported pelagic longline
activity in the pelagic logbook but only 171 fishermen reported fishing for HMS
with pelagic longline in both the pelagic logbook and in weigh-out slips. Table
8.1 lists the number of active pelagic longline vessels from 1990 to 2000.
In general, the number of active vessels has been decreasing since 1994.
Table 8.1 The number of vessels that
reported fishing with pelagic longline gear in the pelagic logbook. Source:
Cramer, 2001.
| Year |
Number of
active vessels |
Year |
Number of
active vessels |
| 1990 |
416 |
1996 |
367 |
| 1991 |
333 |
1997 |
350 |
| 1992 |
337 |
1998 |
286 |
| 1993 |
434 |
1999 |
224 |
| 1994 |
501 |
2000 |
199 |
| 1995 |
489 |
- |
- |
The number of vessels that fish in each area has also decreased although most
vessels continue to fish in the Gulf of Mexico, Florida East Coast,
or the mid-Atlantic Bight (Table 8.2).
Table 8.2 The number of vessels that reported
fishing with pelagic longline gear by area. Source: Cramer and Adams,
2001; Cramer, 2001. Note: Vessels that fish
in more than one area during the year are counted in both areas. CAR: Caribbean,
GOM: Gulf of Mexico, FEC: Florida east coast, SAB: South Atlantic Bight, MAB:
mid-Atlantic Bight, NEC: Northeast Coastal, NED: Northeast Distant, SAR: Sargasso,
NCA: North Central Atlantic, TUN: tuna north, TUS: tuna south
| Area |
1997 |
1998 |
1999 |
2000 |
| CAR |
45 |
30 |
18 |
18 |
| GOM |
118 |
98 |
89 |
79 |
| FEC |
73 |
69 |
53 |
52 |
| SAB |
67 |
53 |
45 |
46 |
| MAB |
81 |
64 |
68 |
59 |
| NEC |
57 |
40 |
39 |
36 |
| NED |
22 |
15 |
10 |
13 |
| SAR |
11 |
9 |
4 |
5 |
| NCA |
24 |
12 |
9 |
6 |
| TUN |
21 |
12 |
9 |
5 |
| TUS |
21 |
11 |
8 |
3 |
Gross revenues of pelagic longline vessels
The gross revenues of pelagic longline vessels vary greatly depending on the location
and species targeted. Using the weight offish landed per trip as reported in 2000
weigh-out slips and the average 2000 ex-vessel price for the fleet (Table 8.3),
NOAA Fisheries calculated the average gross revenues per trip and per vessel for
pelagic longline vessels. This information indicates that overall, the average
pelagic longline vessel has annual gross revenues of $168,114 (range of less than
$1000 to almost $800,000) and that combined the 171 vessels reporting HMS landings
in both the pelagic logbook and the weigh-out slips in 2000 had total annual gross
revenues of almost $29 million (Table 8.4). Most of these gross revenues were
derived from swordfish and yellowfin tuna landings (Table 8.5).
Table 8.3 Average
ex-vessel prices per lb dw for Atlantic HMS in 2000. Source: Dealer weigh-out
slips from the Southeast Fisheries Science Center and Northeast Fisheries Science
Center, and bluefin tuna dealer reports from the Northeast Regional Office. Note:
Small coastal sharks are not generally caught in the North Atlantic region.
| Species |
Average for all
regions |
Average for N.
Atlantic region
only |
| Bigeye tuna |
$3.18 |
$4.12 |
| Bluefin tuna |
$9.66 |
$8.93 |
| Yellowfin tuna |
$2.46 |
$2.64 |
| Other tunas |
$0.75 |
$0.93 |
| Swordfish |
$3.51 |
$3.87 |
| Large coastal sharks |
$0.68 |
$1.01 |
| Pelagic sharks |
$1.09 |
$1.10 |
| Small coastal sharks |
$0.46 |
- |
| Shark fins |
$10.47 |
$6.83 |
Table 8.4 Predicted
gross revenues for the pelagic longline fleet based on fishing reports for 2000.
Source: Logbook and weigh-out data maintained by the Southeast Fisheries Science
Center.
| Description |
Number |
Total value |
Average per
vessel |
Minimum
value per
vessel |
Maximum
value per
vessel |
| Annual gross revenues for
the fleet |
171 vessels |
$29 million |
$168,114 |
< $1000 |
~ $800,000 |
| Per trip gross revenues
for vessels fishing in
NED area |
47 trips |
$5 million |
$106,903 |
~ $33,000 |
~ $183,000 |
| Per trip gross revenues
for vessels not fishing in
NED area |
2,379 trips |
$24 million |
$10,182 |
< $100 |
~ $82,000 |
Table 8.5 The species composition of landings in the pelagic longline fleet in 2000. Source: Logbook
and weigh-out data maintained by the Southeast Fisheries Science Center.
| Species |
% by number |
% by weight |
% by gross
revenues |
| Swordfish |
37.34 |
43.71 |
51.93 |
| Yellowfin tuna |
42.68 |
41.21 |
34.31 |
| Bigeye tuna |
7.32 |
7.43 |
8.00 |
| Bluefin tuna |
0.14 |
0.95 |
3.09 |
| Other tunas |
5.69 |
2.35 |
0.60 |
| Pelagic sharks |
1.82 |
2.13 |
1.16 |
| Large coastal sharks |
5.00 |
2.22 |
0.91 |
The gross revenues data change dramatically when only trips conducted in the NED
area are considered. In 2000, 13 vessels took an average of 3.6 trips per vessel
in the NED area. Twenty- eight of these trips occurred in the third quarter, 12
in the fourth quarter, and seven in the second quarter. No trips occurred in the
first quarter. In total, these 47 trips brought in just over $5 million in gross
revenues with average gross revenues per vessel per trip at $106,903 (range from
$33,000 to $183,000) (Table 8.4). (1) Unlike the
fleet as a whole, these gross revenues are derived almost entirely from swordfish
landings (Table 8.6). It is interesting to note that the average gross revenues
per trip for these vessels is almost the same as the annual
gross revenues per vessel for the entire fleet (Table 8.4). Thus, of
all the vessels in the fleet, vessels that fish in the NED area may be considered
the most economically viable vessels.
Table 8.6 The
species composition of landings for pelagic longline trips conducted in the NED
area in 2000. Source: Logbook and weigh-out data maintained by the Southeast
Fisheries Science Center.
| Species |
% by number |
% by weight |
% by gross
revenues |
| Swordfish |
87.79 |
88.54 |
88.14 |
| Yellowfin tuna |
0.39 |
0.27 |
0.19 |
| Bigeye tuna |
9.57 |
8.23 |
8.72 |
| Bluefin tuna |
0.12 |
0.99 |
2.27 |
| Other tunas |
1.00 |
0.36 |
0.09 |
| Pelagic sharks |
1.14 |
1.60 |
0.59 |
| Large coastal sharks |
0.00 |
0.00 |
0.00 |
NOAA Fisheries also looked at the gross revenues per trip for all trips outside
of the NED area (2). In all, there were 2,379 pelagic
longline trips reported outside of the NED area. Most of these trips were in the
Gulf of Mexico and Florida East Coast areas (Table 8.7). Additionally, on average,
vessels fishing in those areas conducted more trips than vessels in other areas
(Table 8.7). In general, the number of trips per quarter in all areas outside
the NED area were fairly constant (558 in the first quarter, 636 in the second,
687 in the third, and 498 in the fourth) with a slight increase in the third quarter
and a slight decrease in the fourth quarter. In
total, these 2,379 trips brought in just over $24 million in gross revenues with
average gross revenues per vessel per trip at $10,182 (range from less than $100
to $82,000) (Table 8.4). (3) As expected,
these gross revenues were derived from both swordfish and yellowfin
tuna landings (Table 8.8).
Table 8.7 The number of trips in each area
in 2000. Source: Logbook and weigh-out data maintained by the Southeast
Fisheries Science Center. CAR: Caribbean, GOM: Gulf of Mexico, FEC: Florida east
coast, SAB: South Atlantic Bight, MAB: mid-Atlantic Bight, NEC: Northeast Coastal,
NED: Northeast Distant, SAR: Sargasso, NCA: North Central Atlantic, TUN: tuna
north, TUS: tuna south
| Area |
Number of
trips |
Average trips
per vessel |
| CAR |
51 |
2.8 |
| GOM |
830 |
10.6 |
| FEC |
687 |
13.5 |
| SAB |
274 |
6.1 |
| MAB |
397 |
7.0 |
| NEC |
120 |
3.3 |
| NED |
47 |
3.6 |
| SAR |
3 |
1.0 |
| NCA |
8 |
1.6 |
| TUN |
3 |
1.0 |
| TUS |
6 |
3.0 |
Table 8.8 The
species composition of landings for pelagic longline trips conducted outside the
NED area in 2000. Source: Logbook and weigh-out data maintained by the
Southeast Fisheries Science Center.
| Species |
% by number |
% by weight |
% by gross
revenues |
| Swordfish |
31.29 |
36.85 |
45.05 |
| Yellowfin tuna |
47.76 |
47.48 |
40.68 |
| Bigeye tuna |
7.05 |
7.31 |
8.10 |
| Bluefin tuna |
0.14 |
0.94 |
3.16 |
| Other tunas |
6.25 |
2.65 |
0.69 |
| Pelagic sharks |
1.90 |
2.21 |
1.24 |
| Large coastal sharks |
5.60 |
2.56 |
1.08 |
Variable costs and net revenues of pelagic longline fishing
Most of the studies available to NOAA Fisheries regarding pelagic longline variable
costs and net revenues analyze data from 1996 and 1997. While these data analyzed
are over five years old, this information still provides interesting insights
to pelagic longline fishing and provides estimates on the potential costs of pelagic
longline fishing. Where noted, NOAA Fisheries has converted 1996 and 1997 dollars
to 2000 dollars using the consumer price index conversion factors of 0.911 and
0.932, respectively.
Larkin et al. (2000) examined 1996 logbooks and the 1996 voluntary economic
forms and found that net returns to a vessel owner varied substantially depending
on the vessel size and the fishing behavior (i.e. sets per trip, fishing location,
season, target species). They found that out of 3,255 pelagic longline trips reported
in 1996, 642 pelagic longline trips provided the voluntary economic information.
Larkin et al. (2000) suggest using median values (half of the fleet is
less than this value and half is above) instead of mean values (the average of
all vessels) given the high degree of skewness to the data. For example, the mean
owner's share of a trip is $4,412 while the median is $2,242. Larkin et al.
(2000) suggest that the median values identify the characteristics of the majority
of the fleet better than the mean, which can be influenced by outliers (a few
vessels that may not be similar to the rest of the fleet). The mean supply costs
per trip for the vessels sampled was $5,959 and median was $3,666 (Table 8.9).
This changed depending on area fished with the median ranging from $1,928 in the
area between North Carolina and the east coast of Florida (FEC to MAB) and $10,100
in the Caribbean. Vessels in the NED area (Maine to Virginia region in Larkin
et al. (2000)) had a median supply cost per trip of $2,831 or $3,108
in 2000 dollars. For the entire fleet, Larkin et al. (2000) found that
the average net revenues per vessel per trip was $7,354 ($8,072 in 2000 dollars).
Vessels fishing in the Caribbean and Maine to Virginia areas had the largest average
net returns to the vessel owner per trip at $12,188 and $6,672, respectively ($13,379
and $7,324, respectively, in 2000 dollars). Generally, Larkin et al.
(2000) found that vessels that were between 46 and 64 feet in length, had between
10 and 21 sets per trip, fished in the second quarter, fished in the Caribbean,
or had more than 75 percent of their gross revenues from swordfish had the highest
net return to the owner (ranging from $3,187 to $13,097 per trip) while vessels
that were less than 45 feet in length, had between one and three sets per trip,
fished in the first quarter, fished between North Carolina and Miami, FL, or had
between 25 and 50 percent of their gross revenues from swordfish had
the lowest net return to the owner (ranging from $642 to $1,885 per trip).
Table 8.9 The
cost-earnings characteristics of 1996 pelagic longline trips. Source:
Larkin et al. 2000. Note: Numbers
in the table are in 1996 dollars and denote the median not the mean, unless otherwise
noted.
| Variable |
All trips |
Region |
| ME to VA |
NC to FL |
TX to FL |
Caribbean |
| Number of trips |
642 |
86 |
189 |
319 |
47 |
| Number of crew |
4 |
3 |
2 |
4 |
4 |
| Total Gross
Revenues |
$8,916 |
$7,060 |
$4,826 |
$9,387 |
$26,227 |
| Fuel costs |
$1,031 |
$753 |
$410 |
$1,266 |
$1,970 |
| Bait costs |
$960 |
$965 |
$590 |
$1,000 |
$2,705 |
| Ice costs |
$256 |
$185 |
$150 |
$330 |
$300 |
| Light sticks |
$360 |
$94 |
$198 |
$597 |
$1,295 |
| Miscellaneous
costs |
$305 |
$171 |
$42 |
$821 |
$1,560 |
| Total costs |
$3,666 |
$2,831 |
$1,928 |
$5,230 |
$10,100 |
| Net return to
owner |
$2,242 |
$2,671 |
$1,740 |
$2,022 |
$8,020 |
| Mean net return
to owner |
$4,412 |
$6,672 |
$3,679 |
$3,099 |
$12,188 |
Porter et al. (2001) conducted a survey of 147 vessels along the Atlantic
and Gulf of Mexico (110 surveys were completed) in 1998 regarding 1997 operations.
Survey information was combined with trip tickets and logbook data. They found
that on average, vessels received approximately $250,000 annual gross revenues,
annual variable costs were approximately $190,000, and annual fixed costs were
approximately $50,000. Thus, vessels were left with approximately $8,000 to cover
depreciation on the vessel and the vessel owner lost approximately $3,500 per
year. On a per trip level, gross revenues averaged $22,000 and trip expenses,
including labor, were $16,000. Labor cost the owner the most (43 percent), followed
by gear. Generally trip returns were divided so the vessel owner received 43 percent
and the captain and crew 57%. Porter et al. (2001) noted that 1997 was
probably a financially poor year due to a reduction in swordfish quota and a subsequent
closure of the fishery (this fishery has not been closed since). Similar to Larkin
et al. (2000), Porter et al. (2001) noted differences between
region, vessel size, and target species. While all vessels had an average net
return per trip of $5,556 ($6,019 in 2000 dollars), vessels that fished in the
New England or Caribbean regions had much higher net returns per trip at $20,772
and $18,940, respectively ($22,505 and $20,520, respectively
in 2000 dollars) (Table 8.10).
Table 8.10 Cost-earnings characteristics
of an average 1997 pelagic longline trip. Source: Porter et
al. 2001. Note: Numbers in the table are in 1997 dollars and denote the mean.
Variable |
All vessels |
Region |
| New
England |
Mid-Atlantic |
South
Atlantic |
Gulf of
Mexico |
Caribbean |
| Length of trip |
13 |
36 |
12 |
8 |
14 |
28 |
| Gross revenues |
$22,364 |
$81,569 |
$20,151 |
$11,242 |
$16,437 |
$67,440 |
| Fuel costs |
$2,071 |
$9,209 |
$2,154 |
$717 |
$1,703 |
$5,601 |
| Ice costs |
$297 |
$378 |
$252 |
$191 |
$469 |
$372 |
| Bait costs |
$1,559 |
$4,779 |
$1,488 |
$882 |
$1,406 |
$3,771 |
| Light sticks |
$738 |
$3,129 |
$635 |
$392 |
$490 |
$2,164 |
| Food costs |
$897 |
$2,943 |
$817 |
$438 |
$881 |
$2,270 |
| Gear costs |
$2,336 |
$6,800 |
$2,147 |
$1,381 |
$2,067 |
$5,808 |
| Other costs |
$442 |
$1,687 |
$414 |
$206 |
$342 |
$1,293 |
| Total variable
costs (not labor) |
$9,634 |
$34,725 |
$8,839 |
$5,007 |
$7,867 |
$25,880 |
| Total labor costs |
$7,173 |
$26,071 |
$6,558 |
$3,670 |
$4,727 |
$22,620 |
| Net return |
$5,556 |
$20,772 |
$4,753 |
$2,565 |
$3,843 |
$18,940 |
In general, both Larkin et al. (2000) and Porter et al. (2001)
found that the average net return to a vessel is fairly low after all variable
costs including labor were accounted for. This was true even of vessels fishing
in the northeast region or Caribbean (i.e., regions with relatively high gross
revenues). This corresponds with the results of Ward and Hanson (1999) who found
that fifty percent of the fleet earns $10,000 or less annually and that each year
20 percent of the fleet actually has a loss. Additionally, as suggested by Larkin
et al. (2000) in their discussion of mean versus median values, Ward
and Hanson (1999) found there were a number of vessels that earned much higher
net revenues than the average vessel with 19 percent of the fleet earning $50,000
or more annually and 7 percent earning more than $100,000 annually.
Effects of the alternatives on fishermen
NOAA Fisheries considered twelve alternatives, including no action, to reduce
the incidental catch and mortality of protected species, such as sea turtles,
on pelagic longline gear in HMS fisheries. These alternatives include no action,
a time/area closure, changes in the way pelagic longline gear is set, changes
in the gear itself, changes in the bait, and changes in the reporting requirements.
Of these, the alternative that proposes closing the NED area to fishing with pelagic
longline gear would probably have the largest economic impact despite the fact
that it actually affects only 13 (7.6%) of the 171 vessels reporting HMS landings
in the pelagic logbook and weigh-out slips in 2000. The economic impact of this
closure could be offset if the vessels fishing in the NED area are eligible to
and decide to participate in the experimental fishery NOAA Fisheries is conducting
in the NED area. Because there may be vessels that fish in the NED area that are
not eligible to participate or decide not to participate in the NED area experiment,
this and the following sub-section (Effects of the alternatives on fishermen
and Impacts on related industries, respectively) will discuss the
alternatives without considering the NED area experiment. Any economic benefits
or costs of the experiment are discussed in a separate sub-section below (The
experimental fishery in the northeast distant statistical reporting area).
As discussed above, based on gross revenues, it appears that vessels fishing in
the NED area are some of the most economically viable operations in the pelagic
longline fleet. This conclusion is supported when considering net revenues, although
vessels fishing in the Caribbean appear to be as, or more, economically viable
as vessels fishing in the NED area (Larkin et al., 2000; Porter et
al., 2001). From 1998 to 2000, NED area vessels have landed over 40,000 swordfish
or 21 percent of all swordfish landed by the Atlantic pelagic longline fishery
(Cramer, 2001). If the NED area is closed, the vessels that normally fish in that
area could either decide to (1) leave the fishery or (2) fish in other areas.
Since 1997, an average of 15 vessels have fished each year in the NED area. Because
the vessels that fish in the NED area are among the largest and most productive
in the fleet, if a vessel decides to leave the fishery, it is possible that the
vessel owner could sell their vessel and its permits for a "reasonable" price.
However, preliminary data on the cost of HMS limited access permits do not indicate
differences between permit type (directed or incidental) or vessel size. It is
also likely that the experienced crew from the vessel could find positions on
other pelagic longline vessels. If the vessel owner decides to have the vessel
fish in other areas, unless the vessel fishes in the Caribbean, based on the gross
and net revenues discussed above, it is unlikely it could generate as much revenue
as it did in the NED area. Indeed, because of the vessel's large size, it is likely
that with the higher maintenance costs expected, larger variable costs (e.g.,
fuel, ice, etc.), larger mortgage and insurance costs, and other factors such
as inexperience fishing in other areas, the NED area vessels may have higher costs
resulting in lower net revenues than non-NED vessels fishing in the same areas.
In other words, the non-NED area vessels, even if they have similar catches as
the NED area vessels, would have lower costs and therefore higher net revenues.
The exception to this would be the Caribbean where vessels are also large and
have similar revenues and costs as those in the NED area. However, because of
their size, the NED area vessels are highly mobile and stay on longer trips than
the non-NED area vessels in the fleet (except for Caribbean vessels). These factors
may allow the NED area vessels to follow the migration of the fish and catch more
fish per trip than is average for the other areas. This could eliminate the difference
between net revenues for non-NED area vessels and net revenues for NED vessels
in these open areas; although it is unlikely that the NED area vessels could have
similar net revenues in other areas, except for the Caribbean, to the net revenues
in the NED area.
The other alternatives considered would affect all pelagic longline fishermen
but are not expected to change gross or net revenues for any portion of the fleet.
Alternative 2 would prohibit fishermen from setting gangions next to floatlines.
To comply with this regulation, fishermen could set fewer hooks or set hooks closer
together and maintain the length of the mainline or fishermen could set the same
number of hooks and maintain the same spacing while increasing the length of the
mainline. If fishermen decide to set fewer hooks, the number of fish caught could
decrease by an equivalent amount resulting in slightly lower gross revenues. However,
the time needed to set or haul the mainline and the amount of bait needed for
the hooks could also decrease resulting in slightly lower variable costs in increasing
the amount of time spent fishing. If the fishermen set the same number of hooks
and increase the length of the mainline to comply with the regulation, the amount
of time it takes to set and haul the mainline could increase slightly but fishermen
would still catch the same number of fish per set. Thus, either method of complying
with this regulation should not have a large impact on overall net revenues for
a trip although the ratio between costs and revenues could alter slightly.
Alternative 3 would require fishermen to have gangions longer than their floatlines.
Fishermen could comply with this regulation by decreasing floatline length appropriately,
increasing gangion length, or a combination of the two. Thus, this regulation
could increase the amount of monofilament needed per trip in order to repair gangions
and could require time in the short-term to increase the gangion length or decrease
floatline length. However, this regulation should not increase costs per trip
significantly and therefore should not affect net revenues.
Alternative 4 would require fishermen to possess and use non-stainless steel,
corrodible hooks. Under this definition, NOAA Fisheries would not expect this
alternative to have many impacts as a number of fishermen already use non-stainless
steel hooks. Generally individual hooks cost less than $1.00.
Alternative 5, which would require the captain to report lethal turtle takes within
48 hours of returning to port, Alternative 6, which would require vessel operators
to post handling and release guidelines, Alternative 7 which is no action, and
Alternative 8, which would require fishermen to use a dehooking device, should
have few, if any, economic impacts. Buying a dehooking device would be a one time
cost of less than $100.
Alternative 9 would require fishermen to set hooks deeper in the water column.
This could be done by placing fewer floats or placing more hooks between floats.
As fishermen already do this to fish for tuna, NOAA Fisheries does not expect
this alternative to have any economic impacts unless the catch composition changes
dramatically. For instance, if this alternative causes more tuna to be caught
than swordfish, the gross revenues per trip could decrease because swordfish are
worth more than tuna (Larkin et al., 2000; Porter et al., 2001).
Alternatives 10 and 11 would require fishermen to change the type of bait used
in the fishery. In Alternative 10, fishermen would be required to dye their bait
blue. The dye used to color the bait is inexpensive ($46 per lb) and, although
it may increase annual costs slightly, should have minor economic impacts. Alternative
11 would require fishermen to use mackerel instead of squid bait. Bait accounts
for 16 to 26 percent of the total costs per trip (Larkin et al., 2000;
Porter et al., 2001). NOAA Fisheries assumes that fishermen already use
the bait that maximizes catch and minimizes costs. Thus, changing the bait type
fishermen can use could either decrease gross revenues (because it does not attract
as many fish) or increase total trip costs. In either case, while the exact impact
is unknown because NOAA Fisheries does not collect information regarding bait
type, altering the type of bait used could result in long-term changes in net
revenues.
Alternative 12 would require fishermen to use a type of "stealth" gear. At this
time, NOAA Fisheries has no economic information for this alternative. However,
any changes to fishing gear would require at least a one-time increase in fishing
costs.
Impacts on related industries
Fishermen rely on many industries including processors, dealers, wholesalers,
restaurants, bait houses, equipment manufacturers and suppliers, and electronic
suppliers and repairmen. Of these, only dealers are required to have Federal permits
in order to buy fish from fishermen. As of October 2001, there were 522 Atlantic
tuna dealers, 302 Atlantic swordfish dealers, and 249 Atlantic shark dealers.
As with fishermen, the majority of these permit holders are located in Florida
(20 percent), followed by Massachusetts (14 percent) and New York (10 percent).
Many of these alternatives would be unlikely to affect dealers, processors, and
wholesalers unless they had an impact on the amount of fish landed. However, once
again, the closure of the NED area is the alternative most likely to affect dealers,
particularly dealers in the Northeast who rely on fishing vessels fishing in the
NED area. Because there are so few NED area fishermen, only a few dealers rely
on the NED area fishing for a substantial portion of their activities. However,
because those few vessels land such a large percentage of U.S.-caught swordfish,
it is likely that these dealers would be significantly affected and may be forced
out of business, regardless of the course of action of the vessel. This is because
if the vessel decides to continue fishing but changes areas, it is likely the
vessel would change dealers in order to land the highest quality seafood and receive
the highest ex-vessel price possible. Dealers that do not go out of business would
likely increase dependence on other fisheries, including tunas.
Equipment manufacturers and suppliers could also experience some economic impacts
if fishermen are required to change their methods of fishing. Alternatives that
would affect them include Alternatives 2 and 3 because fishermen might need additional
monofilament, Alternative 4 because fishermen might need different types of hooks,
Alternative 8 because fishermen could be required to carry dehooking devices,
and Alternative 12 because fishermen might need additional supplies than under
no action. In all, these alternatives could require fishermen to buy additional
supplies and thus have a positive impact on equipment manufacturers and suppliers.
The alternatives could also have implications for bait houses if fishermen are
required to dye bait or switch bait. Although, it is not clear how much of an
economic impact might result.
The experimental fishery in the northeast distant statistical reporting area
The information presented here is preliminary and is based on only a few of the
dealer reports submitted to NOAA Fisheries regarding the vessels that participated
in the experiment in 2001.
In 2001, 8 vessels participated in the experimental fishery and conducted approximately
185 sets. In 2001, the experiment examined bait type and gangion spacing. In order
to participate in the experiment, each vessel had to meet a number of requirements
such as holding a valid permit, carrying an observer, and complying with all other
regulations. In return for participating, each vessel received $4,150 per set
conducted and was allowed to sell any fish caught (4).
While the experiment did not begin until mid-September, some vessels were able
to conduct two trips before the end of the season.
In total, NOAA Fisheries paid participating vessels a total of $769,825 or approximately
$96,228 per vessel. Vessels received additional money from selling their fish.
As expected, these vessels made most of their gross revenues per trip from swordfish
(Table 8.11). However, it also appears that the amount of gross revenues from
bigeye tuna was larger than expected based on the information in Table 8.6. In
total, it appears that the vessels that participated in the 2001 NED area experiment
obtained approximately $2 million in gross revenues from both fishing and the
experiment. Considering the experiment did not begin until late in the fishing
season for the NED area, it appears that participating in the NED area experiment
will help NED area fishing vessels economically in the short-term while fishing
methods to reduce turtle bycatch are examined. In the long-term, participating
in the NED area experiment will help all pelagic longline fishing vessels, particularly
those in the NED area, if the experiment can document bycatch reduction methods
and allow for the NED area to be re-opened to U.S. pelagic longline vessels. Depending
on the impacts on catch rates, the NED area experimental fishery could also mitigate
impacts on dealers in the short-term. Additionally, during the duration of the
experimental fishery, dealers could experiment expanding into other fisheries
in case the fishing experiment does not result in bycatch reduction methods.
NOAA Fisheries has received a number of bids for the 2002 experimental fishery.
NOAA Fisheries anticipates having 10 vessels participating in the 2002 experimental
fishery starting in mid-July and running through October. The bids received ranged
from $4,000 to $4,500 per set.
Table 8.11 Preliminary information regarding
the 2001 experimental fishery. Source: Northeast
dealer weight out slips. Note: The average gross revenues per species per trip
are averages from all vessels and do not add up to the total average gross revenues
per trip. The information in this table does not include compensatory payments
for participating in the fishery; this information denotes gross revenues from
sale of fish only.
| Species |
Average ex-vessel price |
Average
gross revenues
per trip |
Minimum
gross revenues
per trip |
Maximum
gross revenues
per trip |
| Swordfish |
$2.96 |
$32,501 |
$776 |
$95,731 |
| Yellowfin tuna |
$3.15 |
$5,327 |
$1,064 |
$11,841 |
| Bigeye tuna |
$4.15 |
$17,235 |
$1,153 |
$53,460 |
| Albacore tuna |
$0.34 |
$557 |
$13 |
$1,949 |
| Mako shark |
$1.23 |
$632 |
$94 |
$1,911 |
| Total |
-- |
$84,738 |
$23,376 |
$199,123 |
8.1.2 Expected economic impacts of the shark gillnet fishery alternatives
Number of shark gillnet fishermen
In October 2001, there were 252 directed shark permit holders. However, the number
of these permit holders that use drift gillnet gear to fish for sharks has been
less than 11 vessels in recent years (Table 8.12). Each vessel has between three
and six crew members, including the operator. These fishermen fish off the east
coast of Florida and Georgia. Because of the gear restrictions, the short large
coastal shark season, and observer coverage requirements for these vessels, it
is unlikely that the number of vessels in this fishery would
increase substantially.
Table 8.12 The number of operating shark
gillnet vessels. Source: Trent et
al., 1997; Carlson and Lee, 1999; Carlson and Baremore, 2001.
| Year |
Number of vessels |
Year |
Number of vessels |
| 1990 |
11 |
1996 |
unknown |
| 1991 |
unknown |
1997 |
unknown |
| 1992 |
unknown |
1998 |
unknown |
| 1993 |
5 |
1999 |
4 |
| 1994 |
6 |
2000 |
6 |
| 1995 |
11 |
2001 |
6 |
Gross revenues of shark gillnet fishermen
NOAA Fisheries has few data regarding the gross revenues of shark gillnet fishermen
although NOAA Fisheries hopes to collect additional economic information for all
HMS fishermen in the near future. Based on landings reported in logbooks and ex-vessel
price information, the gross revenues for shark gillnet fishermen during the first
large coastal shark season of 1999 ranged from $3,000 to $38,000 and averaged
$19,615. The average gross revenues per trip during the first large coastal shark
season of 1999 ranged from $380 to $9,000 and averaged $3,700.
Using the 2000 and 2001 observer information during the non-right whale calving
season, the prices listed in Table 8.3 above, and the average weight per shark
(Scott et al. 1998, Carlson 2001), it appears that the total gross revenues
from sharks for all observed strikenet trips (8 sets total in 2000 and 2001) was
approximately $1,130 ($142 per set; the amount of time per set averaged less than
one hour). Similarly, the total gross revenues from sharks for all observed driftnet
trips (37 sets total in 2000 and 2001) was approximately $46,700 ($1,262 per set;
the amount of time per set averaged nine hours). This information indicates that
shark gillnet vessels are not as economically viable as other commercial sectors
of HMS fisheries such as the pelagic longline fishermen.
Variable costs of fishing with shark gillnet gear
NOAA Fisheries has limited information available regarding variable costs of shark
gillnet fishing, although NOAA Fisheries hopes to collect additional economic
information for all HMS fishermen in the near future. NOAA Fisheries expects that
the fishing costs per trip are less than those of a pelagic longline fishing trip
because the trips are usually shorter (an average of 18 hours per trip), vessels
do not fish far offshore (within 30 nautical miles from port), and the gear does
not need hooks, bait, or light sticks. Other costs may be incurred as the holes
in the gear would need to be repaired regularly.
Shark gillnet vessels that fish in a strike-net method probably incur higher costs
per trip than those vessels that fish in a drift gillnet method. This is because
strikenetting usually requires the use of a small vessel (used to run the net
around the school of sharks) and a spotter plane (used to spot schools of fish).
While the cost per trip is higher than the traditional drift gillnet method, bycatch
in this method is extremely low, catch rates of the target species is high, and
vessels can complete a set in less time (one hour versus nine hours). NOAA Fisheries
estimates that the smaller vessel could cost between $2,000 and $14,000 to buy.
Because these second vessels have specific requirements to be sturdy enough to
hold the gillnet and move quickly around the school of sharks, it is likely that
vessel owners would need to re-fit any used vessel bought for this purpose. Additionally,
a second vessel means additional fuel and maintenance costs. Spotter planes in
other fisheries are paid based on the percentage of the proceeds from the trip,
generally 10 to 25 percent of gross revenues. Thus, given the average gross revenues
per trip, converting a drift gillnet vessel to a strikenet vessel could be prohibitive.
Recently some strikenet vessels have begun striking behind other vessels such
as trawl vessels (e.g., shrimp vessels). This negates the need for a spotter plane
and could reduce the variable costs substantially. Additionally, some of the smaller
drift gillnet vessels have begun to use small nets to strike fish without a second
vessel (Carlson, 2002). Their efforts are moderately successful and could reduce
the costs of the fishing in a strikenet method substantially by reducing the amount
of net that needs to be repaired and the amount of additional gear needed.
Effects of the alternatives on fishermen
Alternative 13 would require the vessel operator and the observer to sight whales
and contact NOAA Fisheries if a listed whale is taken. This alternative is not
expected to have any economic impacts. Similarly, Alternative 15, no action, would
not have any economic impacts.
Alternative 14 would require shark gillnet fishermen to conduct net checks every
0.5 to two hours to check for protected species. For fishermen operating in a
strikenet fashion, this alternative would not have any economic impacts since
a set takes less than one hour. However, for fishermen operating in a drift gillnet
fashion, this alternative would require fishermen to check the net approximately
four times during a nine hour set. NOAA Fisheries believes that most gillnet fishermen
fishing in a drift gillnet fashion already do this but for fishermen who do not
already follow this practice, this may reduce gross revenues per set if moving
the net reduces the number of fish caught. Additionally, checking the net could
increase the amount of fuel needed. As fuel can be a major portion of the variable
costs per trip (at least in the pelagic longline fishery), the profit per trip
could be reduced. Because the profits for these vessels are already low, even
a small reduction in profits could force less profitable vessels out of the fishery.
Alternative 16, prohibiting drift gillnet gear in the shark fishery, could have
significant negative economic impacts on the six vessels that have fished in this
fishery in recent years. While these vessels often fish in other fisheries during
a large coastal shark closure, such as the mackerel fishery, NOAA Fisheries would
not expect them to regain all their lost revenues by switching to other fisheries.
Alternative 17 would require shark gillnet vessels to fish in a strikenet fashion
and to use spotter planes. As discussed above, a number of drift gillnet vessels
are beginning to switch to a strikenet fashion of fishing but not all of them
use spotter planes. Some vessels are fishing behind trawl vessels where shark
schools congregate to eat the bycatch discards from those vessels. Requiring them
to use spotter planes could have a substantial impact on net revenues since spotter
planes typically take 10 to 25 percent of gross revenues from a trip. This alternative
may have large economic costs, putting some of the vessels out of business or
into other fisheries, with few ecological benefits.
Impacts on related industries
As with pelagic longline fishermen, shark gillnet fishermen rely on other industries
for equipment and to sell fish. However, there are few shark gillnet fishermen,
their revenues are small compared to other fishermen, and the fishery occurs in
Florida where most commercial HMS fishermen are located. Therefore, it is unlikely
that any related industries rely solely on shark gillnet fishermen. The only alternative
that may affect other industries is Alternative 16, requiring the use of a spotter
plane. This industry may notice a slight increase in revenues if shark gillnet
fishermen are required to use spotter planes and all shark gillnet fishermen remain
in business.
8.1.3 Expected economic impacts of the general alternatives
Number of HMS fishermen
There are approximately 23,000 fishermen who hold HMS permits. As seen in section
8.1.1, not all of these permit holders report fishing for HMS. This is especially
true for the Atlantic tunas Angling and General categories where there are thousands
of permit holders and but few participants are actually successful in landing
bluefin or yellowfin tuna. For example, in 1997, only 1,027 vessels and, in 1998,
only 965 vessels in the General and Charter/Headboat categories reported landing
bluefin tuna over 73 inches curved fork length.
Table 8.13 The number of HMS permit holders.
The actual number of permit holders are subject to change and can vary from year
to year based on participation rates.
| Permit type |
As of October 2000 |
As of October 2001 |
| Shark, swordfish, tuna longline
limited access permits |
982 |
752 |
| Atlantic tunas Angling category |
14,908 |
12,685 |
| Atlantic tunas Harpoon
category |
44 |
53 |
| Atlantic tunas Trap category |
4 |
1 |
| Atlantic tunas General category |
6,705 |
6,072 |
| Atlantic tunas Purse Seine
category, limited access |
5 |
5 |
| HMS Charter/headboat |
2,728 (5) |
3,260 |
| Total |
25,376 |
22,828 |
Gross revenues of HMS fishermen
The gross revenues of HMS fishermen changes depending on the gear type used and
the species targeted. In total, HMS fishermen earned approximately $77.5 million
in 2000 (on average $3,372 per permit holder) (Table 8.14). Of all HMS, yellowfin
tuna brings in the highest gross revenues (~$30.6 million in 2000), followed by
bluefin tuna (~$20.6 million in 2000), and swordfish (~$17.0
million in 2000). Sharks brought in the lowest gross revenues (~$5.5 million total
in 2000).
Table 8.14 Estimates of the total ex-vessel
value gross revenues of Atlantic HMS fisheries as presented in the 2002 SAFE report.
Note: Average ex-vessel prices are the averages of averages and may have some
weighting errors, except for bluefin tuna which is based on a fleet-wide average.
2000 prices are converted to 1996 dollars using a conversion factor of .911. Sources:
NOAA Fisheries, 1997b; NOAA Fisheries, 2001b; Cortes, 2000; Cortes, 2001a; Cortes,
2001b; and bluefin tuna dealer reports from the Northeast Regional Office.
| Species |
1996 |
2000 |
| Ex-vessel
price
($/lb dw) |
Weight
(lb dw) |
Fishery Value |
Ex-vessel
price
($/lb dw) |
Weight
(lb dw) |
Fishery Value |
| Bigeye tuna |
$2.40 |
1,212,706 |
$2,904,432 |
$2.90 |
1,012,352 |
$2,935,821 |
| Bluefin tuna |
$10.58 |
1,652,989 |
$17,488,624 |
$8.80 |
2,137,580 |
$18,810,704 |
| Yellowfin tuna |
$2.11 |
6,679,938 |
$14,116,936 |
$2.24 |
12,435,708 |
$27,855,986 |
| Other tunas |
$0.83 |
368,433 |
$305,799 |
$0.68 |
795,243 |
$540,765 |
| Total tuna |
-- |
-- |
$34,815,791 |
-- |
-- |
$50,143,276 |
| Swordfish |
$3.77 |
7,170,619 |
$27,033,234 |
$3.20 |
4,832,384 |
$15,463,629 |
| Large coastal
sharks |
$0.67 |
5,262,314 |
$3,499,439 |
$0.62 |
3,762,000 |
$2,332,440 |
| Pelagic sharks |
$1.05 |
695,531 |
$727,989 |
$0.99 |
215,005 |
$212,855 |
| Small coastal
sharks |
$0.25 |
460,667 |
$115,167 |
$0.42 |
672,245* |
$282,343 |
| Shark fins
(weight = 5% of all
sharks landed) |
$6.01 |
320,926 |
$1,928,763 |
$9.54 |
232,462 |
$2,217,687 |
| Total sharks |
-- |
-- |
$6,271,358 |
-- |
-- |
$5,045,325 |
| Total HMS |
-- |
-- |
$68,120,382 |
-- |
-- |
$70,652,230 |
*1999 data used. 2000 data not available.
Variable costs of HMS fishing
NOAA Fisheries has little economic data for fishing gears other than pelagic
longline. Regarding bottom longline, this gear is mainly used to target sharks
and any fishing costs for this gear type should be similar to the fishing costs
for pelagic longline. McHugh and Murray (1997) found that a seven day trip had
an average profit (owner's share of catch minus all expenses) of $1,589. Vessels
between 40 and 49 feet had an average profit of $1,975 for a seven day trip.
Additional data are needed for this fishery.
Regarding purse seine, NOAA Fisheries is continuing its efforts to collect economic
data on the Atlantic tunas purse seine fishery. In 2000, a voluntary survey
was distributed to the owners of the five Atlantic tuna purse seine vessels.
The study is still in the data collection and compilation stage, and NOAA Fisheries
plans to collect additional data from the purse seine vessels in order to have
preliminary results available for next year's SAFE report. The purpose of the
survey is to collect up-to-date information regarding the seasonal and/or yearly
costs incurred by the purse seine fleet. Accurate cost information will be particularly
useful when addressing the impact of regulations on Atlantic tuna fishery participants,
including purse seiners, to ensure that the agency conducts adequate analyses
as required under various legal mandates.
The actual costs associated with the commercial handgear fishery is unknown
although a non-random sample of 15 vessel owners in the General Category Tuna
Association reported in the HMS FMP estimated the average variable cost per
fishing trip in 1997 to be $516. The commercial handgear fishery targets mainly
tunas, particularly bluefin tuna. For this reason, most of the economic information
regarding this fishery is related to bluefin tuna. In 1999, researchers at the
University of Rhode Island finalized a project that: 1) evaluated the influence
of factors such as quantity supplied, time of harvest, and quality characteristics
on the price of U.S. Atlantic bluefin tuna sold on the Japanese wholesale market;
2) determined the relationship between prices in Japan and ex-vessel prices
received by U.S. fishermen, and 3) determined how different fishery management
options influence gross revenues received by U.S. fishermen. The final report
concluded that regulations should be developed and implemented that would help
the fishery avoid capture seasons that are condensed into sporadic intervals.
The report also recommended that consumer preferences should be considered for
the efficient exploitation and trade of bluefin tuna in order to help increase
revenues for the industry and to eliminate economic inefficiencies generated
by public management. Specifically, the report suggests a more dispersed allocation
of harvest planned in conjunction with periods of the year when fish seem to
possess consumer-favored characteristics, such as high fat content. The researchers
at the University of Rhode Island have continued their work, concentrating on
the following research objectives: 1) to formally evaluate, using a hedonic
model, the degree to which price of U.S. fresh bluefin tuna is determined by
those quality attributes of each fish, rather than by just the quantity supplied;
2) to attempt to show how the quality of U.S. bluefin tuna depends on harvest
practices; and 3) to combine the results from the hedonic model and production
model estimates to find quota allocations that could result in the highest payoffs
to the industry.
Economic information for recreational fisheries generally measures angler willingness
to pay (WTP). Angler WTP depends, in part, on the species sought and on the
location. Ditton et al. (1998) found that the WTP for a bluefin tuna
trip in North Carolina ranged from $344 to 388 per person. Fisher and Ditton
(1992a) found that anglers were willing to pay an additional $105 per trip rather
than stop fishing for sharks. The most recent recreational economic information
comes from a 1994 survey of anglers in New England and the mid-Atlantic (Hicks
et al., 1999). The data collected were used to estimate expenditures
and economic value of the various groups of recreational fisheries in this area.
One category of fishing, called "Big Game" consisted primarily of HMS, including
sharks, billfish, and tunas. Although this study is not an exhaustive picture
of the entire HMS recreational fishery, the results provide considerable insight
into the absolute and relative values of the recreational fisheries for HMS.
Overall average WTP for a one-day fishing trip ranged from a low of less than
a dollar in New Hampshire to a high of $42 in Virginia. Aggregate WTP (average
WTP times the number of trips) ranged from $18,000 in New Hampshire to nearly
$1 million in Virginia. Besides WTP, recreational anglers also have to pay for
equipment and possibly travel costs. This study also found that boat fees were
responsible for the greatest percentage of expenditures. Roughly 70 percent
and 53 percent of total expenditures by anglers went for private/rental boats
and charter/party boats, respectively. Travel expenses were the smallest portion
of expenditures, although travel costs for those fishing on party/charter vessels
were about twice as high as for those fishing on private/rental boats ($28 vs.
$16).
Effects of the alternatives on fishermen
Alternative 18, no action, would not have any incremental economic impacts.
Similarly, Alternative 19, requiring all vessels to post sea turtle handling
guidelines, should not have any economic impacts since NOAA Fisheries will provide
the guidelines at no cost to vessel owners.
Alternative 20, would likely have the greatest economic impact of all the alternatives
considered for all gear types (excluding the NED closure area which is applicable
only to pelagic longline gear). This alternative would require all fishermen
to carry and use line clippers and dipnets. This equipment currently has a one-time
cost of approximately $250. However, the cost could change if demand is increased
as a result of any rulemaking. While $250 is not a large amount compared to
other costs of fishing, it could discourage the occasional angler who would
only be required to have the equipment on board for one or two HMS fishing trips
a year. In total, the 23,000 fishermen permitted in HMS fisheries could spend
$5.75 million buying this equipment.
Alternative 21, requiring vessels to carry and use a dehooking device, could
also have minor economic impacts. Dehooking devices generally cost approximately
$100 depending on the length of the handle and the strength of the material
(i.e., whether it was designed for small fin fish or large fish such as sharks).
As described above, this should not impact most commercial fishermen who spend
much more on other fishing costs but it could discourage the occasional HMS
angler. However, a number of recreational and commercial fishermen already use
dehooking devices voluntarily. In total, the 23,000 fishermen permitted in HMS
fisheries could spend approximately $2.3 million buying this equipment.
Alternative 22, requiring vessels to move 1 nm after any interactions with
protected species, would have minor economic impacts. Interactions with protected
species are a relatively rare occurrence and therefore would not affect most
fishing trips. However, on the occasional fishing trip where a protected species
is encountered, this alternative could increase fuel costs and could decrease
target catch if the vessel is forced to move off prime fishing grounds.
Impacts on related industries
The only alternatives that would significantly affect related industries are
alternatives 18 and 19. Under these alternatives, HMS fishermen could spend
over $8 million buying additional equipment. This could increase profits for
suppliers and encourage production for line clippers, dipnets,
and dehooking devices.
8.2 Regulatory Impact Review
8.2.1 Description of the management objectives
Please see section 1 for a description of the objectives of this rulemaking.
8.2.2 Description of the fishery
Please see section 6 for a description of the fisheries that could be affected
by this rulemaking.
8.2.3 Statement of the problem
Please see section 1 for a description of the problem and need for this rulemaking.
8.2.4 Description of each alternative
Please see section 2 for a summary of each alternative and section 7 for a complete
description of each alternative and its expected ecological, social, and economic
impacts.
8.2.5 Economic analysis of expected effects of each alternative relative
to the baseline
NOAA Fisheries does not believe that the national net benefits and costs would
change significantly in the long run as a result of implementation of the preferred
alternatives. The benefits and costs of parts of the industry might change and
the volume of certain species (such as swordfish from the NED area) might change
slightly but the total volume of fish available for consumption should not change
significantly. Table 8.14 indicates possible changes as a result of each alternative.
Table 8.14 Summary of net benefits and costs
for each alternative.
| Management measure |
Net Economic Benefits |
Net Economic Costs |
Pelagic longline fishery requirements |
| Alternative 1- NED area closure
FINAL ACTION |
Could reduce interactions with sea
turtles leading to higher existence
value. |
The fewer than 20 vessels that fish
in the NED area land a significant
amount of the U.S.-caught
swordfish. This alternative would
cause the vessels that fish in that
area to change areas, leading to
lower gross revenues, or leave
fishery. If the vessels move or
leave the fishery, that could impact
related businesses that rely on those
vessels and could effect consumers
if importers increase the cost of
swordfish. |
| Alternative 2 - Prohibit gangions
next to floatlines |
None. |
Minimal. |
| Alternative 3 - Gangion length
longer than floatline length
FINAL ACTION |
Could reduce mortality of sea
turtles leading to higher existence
value. |
Minimal. |
| Alternative 4 - Corrodible hooks
FINAL ACTION |
Could reduce post-release mortality
of hooked sea turtles leading to
higher existence value. |
Minimal. |
| Alternative 5 - Report lethal turtle
takes within 48 hours
FINAL ACTION |
None. |
None. |
| Alternative 6 - Require bottom and
pelagic longline fishermen to post
sea turtle handing guidelines
FINAL ACTION |
None. |
None. |
| Alternative 7 - No Action |
None. |
None. |
| Alternative 8 - Carry and use a
dehooking device |
Could reduce post-release mortality
of hooked sea turtles leading to
higher existence value. Could
increase profits for suppliers. |
Minimal. Approximately $100 per
vessel. |
| Alternative 9 - Fish hooks deeper in
water column |
Could reduce interactions with sea
turtles leading to higher existence
value. |
Could reduce gross revenues by
increasing the amount of tuna
caught while decreasing the amount
of swordfish caught. Swordfish
trips generally have higher profits
than tuna trips. |
| Alternative 10 - Use blue-dyed bait |
Could reduce interactions with sea
turtles leading to higher existence
value. |
Blue dye costs approximately $46
per lb. Impacts on target catch are
unknown. |
| Alternative 11 - Use mackerel bait |
Could reduce interactions with sea
turtles leading to higher existence
value. |
Unknown. |
| Alternative 12 - Use stealth gear |
Could reduce interactions with sea
turtles leading to higher existence
value. |
Unknown. |
Shark gillnet fishery requirements |
| Alternative 13 - Watch for whales;
Notify NOAA Fisheries if whale
taken
FINAL ACTION |
Might reduce interactions with
whales leading to higher existence
value. |
None. |
| Alternative 14 - Net checks every
0.5 to 2 hours
FINAL ACTION |
Might reduce mortality of protected
species leading to higher existence
value. |
Minimal. For fishermen who do
not already do this, might increase
fuel costs. Might decrease target
catch if net needs to be moved
during checks. |
| Alternative 15 - No Action |
None. |
None. |
| Alternative 16 - Prohibit gear |
Would eliminate any bycatch in the
fishery leading to higher existence
value of protected species. |
Would eliminate the six vessels in
this fishery sector but would not
have a large impact on the shark
fishery as a whole. |
| Alternative 17 - Require
strikenetting and spotter plane |
Would virtually eliminate any
bycatch in the fishery leading to
higher existence value of protected
species. Could increase profits for
spotter planes. |
Could eliminate the six vessels in
this fishery but would not have a
large impact on the shark fishery as
a whole. If vessels remain in
fishery, profits would decrease as
much of the revenues would pay for
the spotter plane. |
General requirements |
| Alternative 18 - No Action
FINAL ACTION |
No incremental effects. |
No incremental effects. |
| Alternative 19 - Post sea turtle
handling guidelines |
None. |
None. |
| Alternative 20 - Carry and use line
clippers and dipnets |
Might reduce post-release mortality
of sea turtles leading to higher
existence value. Might increase
profits for suppliers. |
Approximately $250 per vessel or
$5.75 million for all HMS
fishermen. |
| Alternative 21 - Carry and use a
dehooking device |
Might reduce post-release mortality
of sea turtles leading to higher
existence value. Might increase
profits for suppliers. |
Approximately $100 per vessel or
$2.3 million for all HMS fishermen. |
| Alternative 22 - Move 1 nm after
interaction with protected species |
Might reduce post-release mortality
of sea turtles leading to higher
existence value. |
Minimal. Might increase fuel costs
on rare occasions when interactions
occur. Might decrease target catch
on rare occasions when interactions
occur. |
8.2.6 Summary
Under E.O. 12866, a regulation is a "significant regulatory action" if it is likely
to: 1) have an annual effect on the economy of $100 million or more or adversely
affect in a material way the economy, a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or State, local, or tribal governments
or communities; 2) create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency; 3) materially alter the budgetary
impact of entitlements, grants, user fees, or loan programs or the rights, and
obligation of recipients thereof; or 4) raise novel legal or policy issues arising
out of legal mandates, the President's priorities, or the principles set forth
in the Executive Order. The final actions described in this document and in the
final rule do not meet the above criteria. Therefore, under E.O. 12866, the final
rule is not a significant regulatory action.
8.3 Final Regulatory Flexibility Analysis
8.3.1 Statement of the need for and objectives of this rulemaking
Please see section 1 of this document for a description of the need for, the legal
basis, and objectives of this rulemaking.
8.3.2 A summary of the significant issues raised by the public comments
in response to the initial regulatory flexibility analysis, a summary of the assessment
of the agency of such issues, and a statement of any changes made in the rule
as a result of such comments
NOAA Fisheries received many comments during the comment period. These and NOAA
Fisheries' responses are summarized in Appendix A of this document and are included
in the final rule. NOAA Fisheries received only a few comments related to economic
issues and concerns; all pertained to the closure of the NED area. These comments
are responded to with the other comments in Appendix A and the economic concerns
are discussed here.
All of the economic comments noted the substantial economic impacts a closure
of the NED area will have on the vessels that normally would fish in the area.
These comments noted that NED area vessels cannot simply go fish elsewhere and
remain profitable; that paychecks for crew members for NED area trips are double,
and in some cases twenty times, the paychecks for crew members for non-NED area
trips; and that eliminating fishing in the NED removes the incentive to continue
in this fishery. Further the comments note that if the NED area is closed, NED
area vessels have two options: stop fishing or attempt to survive by switching
to the coastal fishery. These comments further note that other coastal fishing
areas are overcrowded and that NED area vessels will experience competition with
coastal longline fishermen and have gear conflicts with stationary lobster and
crab gear in these coastal areas.
NOAA Fisheries is aware, and stated in the economic analyses and Initial Regulatory
Flexibility Analysis (IRFA) for the proposed rule, that not all other fishing
areas are likely to be as profitable as the NED area for pelagic longline vessels
that typically fished in the NED area. However, data available to NOAA Fisheries
indicate that other areas, such as the Caribbean area, can be as profitable as
the NED area. Additionally, data available to NOAA Fisheries indicate that NED
vessels already fish in other areas during winter months; thus, switching locations
is not prohibitive for NED vessels. Also, in the short term, NED vessels can volunteer
to participate in the NED experimental fishery. Participating in the NED experimental
fishery can be profitable for these vessels in the short-term, and, in the worse
case scenario, will allow these vessels time to plan their course of action if
the experimental fishery does not produce results that would allow NOAA Fisheries
to reopen the NED area. Additionally, while the NED area vessels could be substantially
impacted due to a closure of the NED area, NOAA Fisheries must close the NED area
as part of the RPA to remove jeopardy as described in the BiOp and section 1 of
this document. The NED area was chosen as part of the RPA because the majority
of sea turtle interactions, both as reported in fishing logbooks and as observed
by fishing observers, occurs in the NED area (see section 7). Furthermore, no
other area(s) would eliminate as many sea turtle interactions while impacting
so few active vessels (15 vessels out of almost 200 vessels). Thus, to the extent
practicable, NOAA Fisheries has minimized the economic impact
of the BiOp fleet-wide.
8.3.3 Description and estimate of the number of small entities to which
the final rule will apply
NOAA Fisheries considers all permit holders to be small entities. A description
of the fisheries affected can be found in section 6 of this document. As of October
2001, there were approximately 208 directed swordfish permit holders and 112 incidental
swordfish permit holders for a total of 320 permit holders who are authorized
to use pelagic longline (only about half of all permit holders are actually active
in the pelagic longline fishery) and could be affected by the pelagic longline
gear requirements of the final rule. Fewer than 20 vessels would be affected by
a closure of the NED area. Additionally, while there were 252 directed shark permit
holders in October 2001, NOAA Fisheries knows of fewer than 11 shark fishermen
who have used drift gillnet gear at some point in the past few years and who could
be affected by the shark gillnet gear requirements of the final rule. The general
requirements considered but not finalized in this rulemaking could have affected
all HMS permit holders including HMS limited access permit holders (~ 752), tuna
harpoon category permit holders (~53), tuna trap category permit holders (~1),
tuna general category permit holders (~6,072), tuna purse seine category permit
holders (5), tuna angling category permit holders (~12,685), and HMS charter/headboat
permit holders (~3,260).
Other sectors of HMS fisheries such as dealers, processors, bait houses, and gear
manufacturers might be affected by the final regulations particularly the closure
of the NED area. However, the final rule does not apply directly to them, only
to permit holders and fishermen. As such, economic impacts on these other sectors
are discussed in other sections of this document but not here.
8.3.4 Description of the projected reporting, record-keeping, and other
compliance requirements of the final rule, including an estimate of the classes
of small entities which will be subject to the requirement and the type of professional
skills necessary for preparation of the report or record
Some of the final actions in this document result in additional reporting, record-keeping,
and compliance requirements. Alternatives 5 and 13 would require fishermen to
report to NOAA Fisheries turtle takes (required for fishermen using pelagic longline
gear) or whale sightings (required for fishermen using shark gillnet gear) within
a specified amount of time. Neither of these alternatives are expected to increase
costs or to increase the needed skill levels required for HMS fisheries.
The other final actions would change the way and areas where fishermen can fish
and set their gear but should not increase the skill level needed to participate
in HMS fisheries. Alternatives 3 (required for fishermen using pelagic longline
gear) and 14 (required for fishermen using shark gillnet gear) could have a small
impact on fishing profits (e.g., 3 may require additional monofilament, 14 could
reduce target catch slightly and increase fuel costs) but these alternatives would
not have a significant economic impact on individual fishermen. Alternative 1
(required for fishermen using pelagic longline gear) could have a significant
economic impact on fewer than 20 vessels and their communities if they do not
participate in the experimental fishery and are not as successful fishing in other
areas. Under the definition of non-stainless steel, Alternative 4 (required for
fishermen using pelagic longline gear) is unlikely to change the profits of individual
fishermen. Alternative 6 (required for fishermen using pelagic longline
gear) should not have any economic impact on individual fishermen.
8.3.5 Description of the steps the agency has taken to minimize the significant
economic impact on small entities consistent with the stated objectives of applicable
statutes, including a statement of the factual, policy, and legal reasons for
selecting the alternative adopted in the final rule and the reason that each one
of the other significant alternatives to the rule considered by the agency which
affect small entities was rejected
During preparation of an IRFA, the Reg Flex Act (5 U.S.C. § 603 (c) (1)-(4)) lists
four types of alternatives to minimize the economic impacts of a proposed rule
which should be discussed. NOAA Fisheries is also including discussion of these
alternatives in this FRFA. These alternatives (all of which assume the proposed
action could impact small entities differently than large entities) are:
- Establishment of differing compliance or reporting requirements or timetables
that take into account the resources available to small entities
- Clarification, consolidation, or simplification of compliance and reporting
requirements under the rule for such small entities
- Use of performance rather than design standards
- Exemptions from coverage of the rule for small entities
Under the first and fourth alternatives listed above, NOAA Fisheries considers
all permit holders to be small entities, and thus, in order to meet the objectives
of this rulemaking and address the management concerns at hand, NOAA Fisheries
cannot exempt small entities or change the reporting requirements for small
entities. The second and third alternatives are discussed below with the alternatives
that were considered but not preferred.
NOAA Fisheries considered a number of alternatives for pelagic longline fishermen
that could minimize the economic impact of the final actions, particularly the
closure of the NED area. All of these alternatives were designed to reduce sea
turtle interactions and reduce post release mortality. These alternatives included
rigging the pelagic longline in a different method (Alternative 9), requiring
vessels to use mackerel instead of squid bait (Alternative 11), and requiring
vessels to use stealth gear (Alternative 12). At this time, NOAA Fisheries does
not have adequate information on how these alternatives would affect sea turtle
interactions or post-release mortality. For this reason, NOAA Fisheries is conducting
an experimental fishery in the NED area to test some of these alternatives in
the hopes of opening the NED area in the future and exporting the knowledge gained
to other nations. In the meantime, closing the NED area (Alternative 1) allows
for the greatest reduction in turtle interactions and no other alternative (performance
or design) or simplification of the requirements is available that can minimize
its economic impacts on the small portion of the fleet (<8 percent) that fishes
in the NED area. The other final actions, would have minor economic impacts similar
to those for Alternatives 9 through 12.
NOAA Fisheries is also finalizing regulations for shark gillnet fishermen. These
fishermen have small profits compared to fishermen in other sectors of the HMS
fleet and they often spend time fishing in other fisheries in order to make a
living. The two final actions (requiring the vessel operator to sight whales and
contact NOAA Fisheries and require net checks at specified times) should not have
a large economic impact and should help reduce interactions and any post-release
mortality if interactions do occur. However, requiring the net checks could make
some trips unprofitable if the fisherman has to move the net causing him/her to
miss large amount of target species and if the net checks require large amounts
of fuel, thus increasing the trip costs. However, the two final actions already
minimize the economic impacts compared to the two other alternatives considered
(prohibiting the gear and requiring the use of a spotter plane). It is not likely
that simplifying the regulations or formulating performance standards would help
reduce protected species interactions or post-release mortality in this fishery.
NOAA Fisheries is not finalizing any alternative that would affect all HMS fishermen
at this time. The final action maintains the status quo and will not result in
any additional substantial impacts on individual small entities. The alternatives
that were considered for all HMS fishermen but not selected would not result in
substantial impacts on individual small entities but could have some small costs.
For instance, Alternative 19 should not have any economic impact as the guidelines
will be provided at no cost to the fisherman; Alternatives 20 and 21 may have
some slight (~$350 in total) one time costs; and Alternative 22 might occasionally
increase trip costs depending on the circumstances involved.
8.3.6 Summary
NOAA Fisheries concludes that while some of the final actions are likely to have
a minor impact on small entities, most of the final actions would not have a significant
impact on a substantial number of small entities as defined under the Reg Flex
Act. However, Alternative 1, closure of the NED area, could have a significant
impact on a substantial number of small entities (less than 20 vessels that fish
in the NED area) as defined under the Reg Flex Act. In fact, some of the small
entities that participate in the NED area fishery, both fishermen and businesses
related to fishing (i.e., dealers and bait houses), might be forced out of business
or be forced to significantly alter their method of business. However, NOAA Fisheries
is conducting an experimental fishery in the NED area that could minimize the
economic impacts for fishermen who participate in the short-term, and depending
on the results of the experiment, gear modifications could replace the area closure
as a means to minimize the economic impacts in the long-term for the entire fishery.
If NOAA Fisheries is unable to find gear modifications that reduce sea turtle
takes and mortality to the extent required by the BiOp, the experimental fishery
minimizes the economic impact to these few vessels to the extent practicable by
allowing some fishermen to continue to fish in the NED area in the short-term
while allowing time for them to explore other options for the long-term.
1. To calculate gross revenues
for the NED area trips, the average ex-vessel prices from the north Atlantic region
were used (Table 8.3). These ex-vessel prices may also contribute to the higher
gross revenues because they are, in general, higher than the average ex-vessel
prices for all regions combined. However, using these ex-vessel prices is appropriate
because vessels fishing in the NED area generally land their fish in north Atlantic
ports.
2. Vessels that fish for HMS
are mobile and may fish in more than one area. For example, a vessel that fishes
in the FEC for one trip may fish in the GOM or SAB for the next trip.
3.To
calculate gross revenues for trips outside the NED area, the average ex-vessel
prices from all regions were used (Table 8.3).
4. Terms of participation
and amount of money offered each vessel may change in each year of the experiment.5.
The charter/headboat permits used
to be for Atlantic tunas only. Starting in 2001, all charter/headboats fishing
for any HMS are required to obtain a permit.