By Ann Shriver, Executive Director, International Institute of Fisheries Economics and Trade (IIFET) and Director, North American Association of Fisheries Economists (NAAFE) Business Office.

(Author's Caveat: These notes are incomplete, summarized, and informal; they provide my impressions of what people said and do not purport to be a completely accurate rendering. Please do not take them out of context. IIFET members' names appear in bold.)

The NAAFE Forum began in New Orleans Sunday evening, April 1, with an opening reception. Two to three concurrent sessions were held all day Monday and Tuesday, April 2 and 3, with a special session Wednesday morning April 4 on Gulf of Mexico Fisheries and Management. In total, the 90 participants gave some eighty presentations. In addition to the opening cocktail, participants were treated to a closing banquet, tours of the bayou and fish processing plants, and of course New Orleans' exciting night life and world famous cuisine.

Since this reporter could only attend one session at a time these notes cannot provide the full story. The goal is only to give you a taste of what happened, to whet your appetite for future forums and the proceedings (availability details will be announced through IIFET channels).

In the conference's opening session, organizers Walter Keithly and Gunnar Knapp welcomed participants to New Orleans and read congratulatory letters from IIFET and the European Association of Fisheries Economists (EAFE). Gunnar Knapp explained the origins of the conference; since IIFET conferences often occur outside of the US and are expensive to attend, a strong need was felt for an opportunity to exchange ideas both more frequently and with lower travel costs.

Kickoff speakers addressed the conference theme, "The State of North American Fisheries Economics". Jim Wilen (University of California, Davis) discussed the value of early contributions by Gordon, Crutchfield, and Scott, and the change in tone between the early period of fisheries economics, and the period since the mid 1970's. The latter period began with less optimism, due to the building contentiousness of fisheries management problems leading up to the declaration of extended fisheries jurisdictions. The declaration of EFJ's was supposed to provide the framework for rationalization of the fisheries, but despite the possibility of limiting entry, fishermen's incomes have largely not been improved nor have the expected resource rents been generated.

Wilen indicated that there are still many things we don't know enough about, including the microeconomics of the rent dissipation process. Economists can predict outcomes and consequences but we haven't articulated these well, nor made the case for consideration of economics in policy options. He made a plea for sticking to simpler models which can be supported by the available data, and strongly advocated spending time on the docks, boats, bars and coffee shops with fishermen, who are "smarter than PhDs" when it comes to fishing.

John Ward of the National Marine Fisheries Service (NMFS) gave the government manager's perspective on the state of our science. He described the very complex legislative and international law framework within which fisheries management is supposed to function today. The Magnuson-Stevens act, the Regulatory Flexibility Act, and endangered species legislation all govern federal fisheries management. The ten national standards set by the Magnuson-Stevens act sometimes conflict with one another. In addition there exists a welter of management bodies, including regional councils, state departments of fisheries, etc., plus a variety of federal agencies that can affect the process (the Small Business Administration, Office of Management and Budget, the General Accounting Office, and Congressional Research Service, among others.) This is not to mention the international bodies that involve themselves, including the United Nations, the Food and Agriculture Organization, commissions with interests in particular species such as tunas or whales, ICLARM, APEC, and many others. All of this generates complexity as each group attempts to achieve its own objectives.

Fundamentally, because we have not dealt with the problem of fisheries as a common property resource, problems will continue to occur, and often our attempts to resolve one problem cause problems in neighboring sectors. Overfishing, overcapacity, fishermen's dissatisfaction with NMFS (evidenced by some 108 pending lawsuits), all are symptoms of our failure to address the fundamental problem of property rights.

Progress on any of these problems requires input from a variety of disciplines in the physical, natural, and social sciences. Ward suggests that the economist is in a unique position to integrate these disciplines into a common framework, work with different user groups, identify objectives, incorporate stock dynamics, and determine the impacts given the constraints (laws, mandates). We also need to convince managers that markets are the most efficient allocation tools that we have.

Gordon Blue (Alaska crab fisherman and former management council member) described how he and a group of fishermen had gotten together and designed an industry-funded buyback program, which they then successfully shepherded through the legislative process; the first auction should be held by the end of this year. This represents a new tactic for an industry whose members are normally preoccupied by fighting amongst themselves. Blue identified a variety of sources of demand for fisheries economics work, including the increasing value of social and economic impact studies, the regulatory review processes now required, vehement advocacy among a variety of groups, the demands of policy both international and domestic, and the uncertainty imposed whenever the government is involved in the economy.

In the wide-ranging discussion that followed, needs for more empirical work and better communication with fishermen were reiterated, and a need for a better handle on the relationship between our models and the policy process was expressed. The state of fisheries management was described variously as one of "sclerosis" and impending heart attack, lunacy, and extremely expensive, and the important and growing role of aquaculture was emphasized.

Following the opening session, participants chose between sessions on Uses of Economics by US Fishery Management Councils, and Non-Market Values and Fisheries. In the former session, Theo Brainerd (NMFS Maryland) both chaired and presented, describing the mandated social and economic analyses required including the fishery impact statements (by the Magnuson-Stevens Act), and regulatory impact revues (by Executive Order 12866 or the Regulatory Flexibility Act). For every management action, costs and impacts on small businesses must be calculated, subjected to public scrutiny, and considered. These studies are carried out by the regional management councils with assistance as required by NMFS, but are ultimately the responsibility of NMFS.

Eric Thunberg (NMFS, Woods Hole) began by wondering whether, given the state of fisheries management in the US, we should be cynical or optimistic, and concluded that there was reason for both. There has been substantial recognition of the need for better social and economic analysis, driven not only by an appreciation for what it can offer, but also by lawsuits facing the agency. Required analyses need to address standard cost/benefit relationships, distributive effects, impacts on small businesses, and on communities. Sources of data provide standard catch and price information, and some valuation and expenditure data on recreational fishing, but community impact data is difficult and we have nothing on non-consumptive uses of the resource. Cost data is still in a developmental stage.

Ralph Townsend (University of Maine) provided suggestions on how to increase the impact of social science analysis in the council process. Social scientists need to understand the process in which we're embedded so that our output is useful; we need to stop producing mind-numbing documents after decisions are already made. Social science needs to be brought into the process earlier, and documents need to be well written. We have to figure out how to get the information out to the public sector, even if it doesn't count for tenure. With the inclusion of the community stability requirements under the national standards imposed by Magnuson-Stevens, we will need to generate a story about the positive long run impacts on communities; we can predict what the rents are, but not the full benefits.

Vishwanie Maharaj (South Atlantic Fishery Management Council) described an ongoing cost and earnings data collection program in her region. Their efforts will add elements to the logbooks completed by fishermen, to get a handle on varying trip revenues and costs, fish abundance, market conditions, and the changes in regulations. Tony Lamberte (Gulf of Mexico Fishery Management Council) described the steps of the progress of management measures through the various council committees, which generates the need for social science research. Walt Keithly (Louisiana State University) briefly described the process of reviewing the queen conch situation for the Caribbean Fisheries Management Council, in which absolutely no data existed, nor was there time or resources to collect any.

Later that afternoon, participants were offered a choice between sessions on the Economics of Fishing Cooperatives under the American Fisheries ActFisheries Economics Data: What do we have? What do we need? and General Topics. Attending the first of these, I was quickly overwhelmed by the complexity of the topic, addressed both empirically and theoretically by the speakers. The American Fisheries Act contains provisions to reduce the Bering Sea Pollock fishery by directly eliminating a number of at-sea processors and catcher-processors, naming specific vessels allowed to continue in the fishery, restricting onshore processing to existing firms, and permitting fishing vessels to form cooperatives in which participants have stipulated catch shares. The first half of the session addressed the origins and implementation of the act.

Seth Macinko (University of Connecticut) described in detail the history of the negotiation processes among the onshore and offshore catching and processing segments of industry, the North Pacific Fishery Management Council, Governor Stevens, and Senator Gorton, which finally resulted in passage of the act. Ed Richardson (At-Sea Processors Association) discussed the Pollock Conservation Cooperative, the industry group of offshore processors, formed to attempt rationalization of the overcapitalized industry. Richardson said that the payoffs of the AFA have included idled boats, an increase in product recovery, and better control over product mix resulting in better profitability for the industry. He described the nature of cooperative fishing, indicating that small, homogeneous groups, in which trust can develop, are necessary in order to succeed.

Robert Halvorsen (University of Washington) was hired by the North Pacific Fishery Management Council to determine whether vessels could be harmed by the imposition of the AFA type of coops, and to analyze the effects of a different variant called "Dooley-Hall" coops. The paper, co-authored with Fahad Khalil and Jacques Lawarree, applies bargaining theory to analyze the effects of both types of coops on the distribution of net benefits of the AFA among processors and harvesters. His group concluded that some independent catcher vessels could be made worse off by the formation of AFA coops, and that Dooley-Hall coops would be more favorable for them than AFA coops.

Keith Criddle (Utah State University) discussed the political economy of fishing cooperatives in the Bering Sea Pollock fishery. He began by demonstrating that the Pollock fishery is relatively healthy with pressure to increase fishing, since revenue would be maximized at catches of 2-3 million metric tons, while fishing is currently capped at around 1 million. The advantages and disadvantages of cooperative fishery, and conditions under which they may work well, were described vis-à-vis IFQs. He warned that the length of term of usufruct rights granted under the program would affect the attractiveness of these ventures to long-term investment.

In the discussion following, parallels were drawn between these new coops and some producer organizations in Europe. When asked about the effects on issues such as bycatch and marine mammal protection, Ed Richardson indicated that these problems are more easily managed within a coop than under the previous command and control structure.

During the second half of the session, Lee AndersonScott MatulichRalph Townsend, and Andrew Kitts presented additional analysis on AFA coops. Lee Anderson (University of Delaware) began with a theoretical microeconomic analysis of the coops' structure and its potential outcomes. His Excel spreadsheet program demonstrates some of the possible effects on optimal coop operation, distribution effects of vessel switching between coops, and efficiency effects. Anderson pointed out that the gains from coop formation come from the rationalization of that part of the fleet; more efficient boats and plants continue working while less efficient units are removed from operation. The formation of coops does not have all of the benefits of an ITQ program, because the efficiency gains are limited to the small groups that form the cooperatives.

Scott Matulich (Washington State University) examined the way vessels are permitted, under the AFA rules, to switch back and forth between cooperatives. His analytical model evaluates the implication of these switching rules on both harvesters and processors. Conditions under which fishers and processors can be made better or worse off were defined, e.g. whether the full TAC is being utilized by the coop or not (such as under the provision allowing up to 10% of quota to be delivered to a different processor). One of Matulich's conclusions is similar to Anderson's: the AFA provides a Pareto-improvement but is not as efficient as an IFQ plan.

Ralph Townsend (University of Maine) suggested that the AFA producer cooperatives form a middle ground between traditional externality theory and the Coasian criticisms. The government management entity has solved the problems that have, in the past, reduced Coasian bargains to a theoretical novelty, by defining the eligible group. Once this set of issues was resolved by fiat, producer groups could quickly and efficiently, through market mechanisms, develop working cooperative arrangements.

Andrew Kitts (NMFS, Woods Hole) assessed whether this form of cooperatives could work in the Northeast region of the US as they appear to in the Northwest. A variety of fisheries in the Northeast region were characterized in order to determine whether they might be good candidates for a cooperative program. Among the factors which were posited as helping to ensure success of such a program were: small numbers of homogeneous harvesters with similar catch histories, positive attitudes toward coops, political and legal support for coops, limited foreign investment, good data on catch histories, an existing history of limited entry management, such as an ITQ or IFQ program, control of the fishery by a hard TAC, and strong incentives to cooperate such as a derby situation causing a dangerous "race to fish".

Discussion followed on some of the difficulties inherent in making politically acceptable choices when setting up coop rules, their advantages and disadvantages over ITQ programs, how to integrate consumer and environmental rights into the system, and special aspects of the Washington/Alaska situation which might make coops work uniquely in that region.

On Tuesday morning, April 3, I missed Measuring Efficiency and Capacity in Fisheries with John WaldenJim KirkleyCatherine Morrison-Paul, Antonio Alvarez, Diane Dupont, and Doug Lipton, as well as Catfish Economics and Marketing with Carole Engle, Terrill Hanson, Henry Kinnucan, Stuart Dean, Siddhartha Dasgupta, and Diego Valderrama. Instead I attended the first half of a session entitled International Fisheries Issues, in which Greg Schneider, Roger Cory, and John Ward addressed developments in a variety of international fora, including the FAO, WTO, APEC and OECD. Schneider (NMFS) provided an overview of current activities in international agencies, and mentioned areas in which he feels additional work would be valuable, including the effects of subsidies on the processing sector, case studies linking subsidies to resource depletion, more work on the trade effects of subsidies, empirical work generally, and efficient and fruitful coordination efforts.

John Ward (NMFS, Maryland) discussed the need for the measurement of fishing capacity in the US, which has come out of the FAO's Code of Conduct for Responsible Fishing, which specifically requires that measures be taken to ensure that excess fishing capacity is avoided and exploitation remains economically viable. How do we measure, assess, and manage overcapacity in the US, asked Ward? He continued on to discuss some of the issues in measuring and assessing capacity, both qualitative (biological status of the fishery, management category, harvest/TAC relationship, TAC/season length ratio, controversies about total catch level, latent permits, catch per unit of effort) and quantitative (data envelopment analysis, stochastic production frontiers, peak to peak measures). He went on to mention that in a recent study of fisheries managed by a federal Fisheries Management Plan, 40 of these fisheries or 55% of the total were considered overcapitalized.

The presentation raised a number of issues around measuring and managing overcapitalization. Ward mentioned that the position of Pamela Mace (NMFS biologist) is that fishing effort worldwide should be cut by 50%, making it one of the primary marine problems worldwide.

Next, Roger Corey (US International Trade Commission) described the content and process of recent international trade cases against dumping and/or subsidies involving fisheries products. He described how dumping is measured, using alternative market prices to determine whether a product is being sold in the US market at below fair market value, which may be below the home market price, below the price in a third market, or below production costs. In measuring costs of production the US makes some assumptions about a fair profit rate, and in a recent case against Norway, set it at 8%, raising objections by the Norwegian salmon sellers. In the case against Chinese exports of crawfish tails to the US, production costs were particularly difficult to measure; they used proxies for labor costs and determined that a dumping margin of 200% existed, and imposed a countervailing duty.

Subsidies are much more difficult to litigate; the law requires that in order to be actionable the subsidy must be specifically designed to increase a country's exports of a particular product. Then, the actual damage to the home industry has to be measured, looking at price trends, production trends, capacity utilization, and employment data, and it must be determined that this damage was due to competition from the imported product.

Corey mentioned that in his work there exists a strong need for measurement of short and long term demand elasticities for all seafood products.

I had to miss part two of this session, featuring Jon SutinenBill Schrank, and Basil Sharp, in order to attend the Economic Assessments and Marine Reserves session Tuesday from 10:30-noon. In this session James Sanchirico of Resources for the Future led off with an assessment of the benefits and potential drawbacks of marine reserves as a management method for fish resources. A version of the paper is forthcoming in JEEM. 160 scientists recently signed a petition advocating the use of no-take or marine reserve areas to revive failing fish populations; however, not a single economist was among the group and they failed to mention the fact that whether you think marine reserves are good or not depends on whether you include social and economic costs in your objectives.

The paper sets up a spatial bioeconomic model, depending on production in the reserve area and dispersal. Several types of dispersal are modeled in order to determine how the various patches will react and interact. In the behavioral rules, entry and exit are related to rents; both biomass movement and economic movement are included. Among the conclusions are that a biological/economic win--win situation will occur if the dispersal benefits from the reserve are greater than the opportunity cost of closing a patch (the lost harvest). This occurs when there are low opportunity costs, such as if the patch is overexploited or in low biological productivity areas (counter to the biological literature). There is an intricate relationship between a win--win situation and location choice.

The next group of presenters included Bob Leeworthy (NMFS), Tom Murray (Virginia Inst. of Marine Science), and Manoj Shivlani (University of Miami). They described the process by which the marine reserve of the Dry Tortugas Islands of the Florida Keys was established. Initially, a detailed and complete socio-economic survey of the local fishers was done to identify location and volumes of catch by species, within a grid of one mile-square block. All of the local fishermen participated and through thorough and painstaking work with the fishermen themselves, with the fish houses, and with the fishing organizations, the surveyors got a very accurate picture of where the fish were being taken so that they could bring information on the precise costs of closing particular areas to the table. They were able to estimate consumer surplus losses from closures of very specific areas. This information was important in enabling the various user groups to get together and choose an effective marine reserve area with the most acceptable ratio between social and economic cost and biological benefits.

Jim Wilen (UC Davis) then described his work with Marty Smith (UC Davis, winner of the IIFET 2000 Best Student Paper award) on "A Dynamic Spatial Model of Marine Reserve Formation". He began with the statement that many biological analyses of the effects of marine reserves naively fail to include human behavior. In this paper, two models were created and then linked; first a biological model described egg and larvae production, dispersal and settlement in patches along the California coast. The economic model is a discrete choice model describing fisher decisions about whether, and where, to dive for urchins, using nested logit estimates. In the discussion afterward he explained that this type of modeling could be used for a variety of spatial management techniques. Current results are preliminary, with richer results to come.

In order to attend the Tuesday afternoon session on Fisheries Markets and Trade, I had to miss both parts of the session Bioeconomic Models and Fishery Management, with presentations by Dan HollandEric ThunbergJim KirkleyLee AndersonSherry LarkinWade Griffin, and Walter Keithly. I also missed the session on Economics and Conflicts between Sport and Commercial Fisheries, with Keith CriddleJon Sutinen, Gordon Gislason, and Gunnar Knapp.

In the Markets and Trade session, however, we were treated to a discussion of something very new. Chris Anderson, University of Rhode Island's newest resource economics faculty member, described the potential benefits of experimental economics in fisheries economics. Next, Josue Martinez-Garmendia (University of Rhode Island) described the economic value of forecasts in seafood trade, and the remarkably limited interest shown by seafood traders in detailed in sophisticated analysis on market outlook-remarkable given the level of uncertainty in the industry. Quentin Fong (University of Alaska, Kodiak) then described his "Assortment Analysis of Seafood Products in Hong Kong Supermarkets." With an increase in the world trade of seafood products from 24 to 48 million metric tons, improved market information is needed by both marketers and policymakers. Fong undertook a Hong Kong supermarket survey, collecting data on prices, packaging, and product form among other factors.

He then used a pairwise assortment overlap of various types of seafood products to explain the diversity of products carried. Preliminary results show that each chain adopts different strategies in capturing market share. In the future, he hopes to be able to look at individual firms and correlate product mix with the socioeconomic structure of stores' shoppers.

Finally, Hamady Diop analyzed Vibrio vulnificus impacts on the US demand for oysters by comparing Gulf of Mexico and Chesapeake Bay market results. These bacteria thrive in warmer waters in the April-June period, and attack the oyster meat. There are particular consequences of this infection for consumers with compromised immune systems.

Following problems in California stemming from consumption of Louisiana oysters, the FDA required warning labels on raw oysters; this affected consumption of Gulf oysters. Prior to 1991, prices of gulf and bay oysters moved together, while afterward they diverged, with the Gulf oysters price over a $1 less per pound, probably due to the warning labels. Diop's model measured cointegration, determining that a single market existed before, and two markets after, 1991. Dockside price models showed that Gulf oyster summer prices decline by $1.45, or 48%, while winter prices lost $1.44/lb.

The summer and winter season losses in revenue due to Vibrio in the Gulf of Mexico were each over $7 million over the period 1991-97, or 43%. The impact on Chesapeake oysters has been mixed, and there has been a movement from cointegrated to separate channel markets.

The late afternoon sessions offered were Bioeconomic Models and Fishery Management (part II)Fisheries Management with Eric ThunbergJosue Martinez-Garmendia, Sang-Go Lee, and Yong Suhk Wui, and the one I attended, Teaching Fisheries Economics: What Should we Teach? How should we teach it?

Gert Van Santen began his presentation with the premise that as far as fisheries economics and management is concerned, "It's Time to Concede that the Emperor Still has Very Few Clothes". In 37 years of fisheries economics, he summarized our legacy as follows: we mostly agree about why we over fish (A), we think there is an optimal solution, such as proposed in the Gordon-Schaeffer models (B), and we refuse to examine how we can get from A to B and ignore alternatives to B. We could have done a lot more.

Since successes teach more illustrative lessons than failures, Van Santen proposed that we look fishery management plans which have succeeded, such as those in New Zealand, Iceland, Australia, Namibia, and those which are "doing pretty ok" such as Japan, Norway, and Chile. What did they do to be successful? They used a political crisis effectively, targeted political feasibility, and sought fundamental sectoral change.

Van Santen proposed 8 "dos" drawn from these example: design a scenario, appoint a good administrator, negotiate consensus, build political critical mass, use a carrot and stick approach, start small then expand, ensure sustainability, introduce a rights-based system, and restructure institutions (such as legal systems, research and subsidies).

"Don'ts", he proposed, include: assuming there is one standard solution, shooting for the biological or economic moon, excluding key constituencies, and most importantly misjudging the role of the public and private sectors. The ultimate target is sustainability, on socio economic (equity), ecological, community, institutional, and political levels.

Van Santen proposed that future economics students should be taught a little Gordon-Schaeffer economics, some institutional economics, microeconomics, and political economy; they should know how to challenge neo-classical dogma, and the art of sector planning. The need to understand the limits and risks of stock assessment, interactions in the coastal zone, some sociology and anthropology, political science and engineering, conflict management, business management and communications, fishing and processing technology. Finally, what they need above all is to learn to keep an open mind.

Jon Sutinen (University of Rhode Island) said he began using Lee Anderson's book in the 1970s, teaching his students to conduct bio-economic analysis, to look at both static and dynamic adjustments, starting with a simple single species model using comparative statics and gradually increasing the complexity by adding species and user groups and property rights variations. It was very pedagogical and systematic. But today, he thinks that while bio-economic models are very important, they're only a tool and only go so far, so he doesn't spend much as time teaching them anymore.

Sutinen has now moved away from numerical modeling and into policy issues. He now calls his undergraduate course "fish and wildlife", because we can use our bioeconomic framework on other species and property rights and institutional settings. What motivates him currently is making a difference in the policy arena, rather than publishing articles. One major challenge is to get away from jargon so as to reach out to people outside of economics, e.g. at a fishermen's meetings. How do you explain things to your grandmothers? This is what we need to teach our students. Another client group should be journalists--we should make a greater effort at incorporating communication into our teaching.

In the following discussion, Gunnar Knapp added that he always tries to include fisheries examples in undergraduate courses, and finds that there's a need for basic literacy in how prices are formed. It's a challenge to get students to understand what's happening under different management arrangements, who's benefiting, who's losing, and how are institutions functioning. In his classes he has future fisheries journalists, so any little thing he can get in there about fundamentals is multiplied many times in its effect on the public.

Henry Kinnucan added that he belongs to a group of academics getting together twice a year, which wanted to bring industry into the group. They put them on program, hosted panel discussions, and did everything they could, but 15 years later they still have a very long row to hoe. People get frustrated and leave. Price determination and markets are important and many students don't grasp them.

Richard Allen (commercial lobsterman)

The presentation given by Richard Allen explaining basic concepts of fisheries management including biological and economic models was the best use of PowerPoint technology I have ever seen. It also provided an excellent education in the basic concepts, which Allen has used to help fishermen and managers to understand the potential consequences and outcomes of management strategies.

In addition to being a commercial lobsterman, Allen spent 9 years on the New England Fishery Management Council and other management bodies. He doesn't recall ever having had a discussion of the basic economics. He has been spending his effort to do this with fishermen and managers over the last several years, doing 20-45 minute presentations to a variety of groups to give them an economic foundation for the policy issues they're trying to grapple with. An examples of a title of one of his talks is "Money on the Table: Fishery Conservation as an Economic Development Opportunity".

(The following summary of Dick Allen's comments is difficult to understand without the PowerPoint images underpinning it!) He first explained a bit of fish population dynamics: as we increase fishing we travel up over the yield curve until Maximum Sustainable Yield (MSY) and beyond, into growth overfishing (where fish caught before they get to full size) and recruitment overfishing (where fish are caught before they reproduce).

He then adds economics, laying economic rent or "true profit" (revenue minus cost) and a total industry cost curve in stepwise fashion to illustrate what happens when we add boats. He explains the difference between individual profit motive and overall industry profits. "Overcapacity" is defined as the effort that comes into a fishery when you exceed maximum economic yield.

Allen maintains that most fishery management plans are designed by the industry, and we're asking for the wrong things, that harm the industry. He illustrates how both reduced profit and bycatch issues (such as right whales) may be resolved by moving back along the production function. We need, says Allen, to get the industry to understand that moving back along this curve is not necessarily going to be harmful to them, as it's closer to MEY. TAC management just maintains the profit.

He then goes into issues of maximum and minimum legal size, which can help people to understand the problems of ineffective fishing effort. He emphasizes to industry audiences that catches are increasing over time; MSY for lobster is 30 million pounds, but currently we're catching 80 million pounds.

Commentary from the audience began with Scott Matulich, who indicated that although the presentation contained a couple of small errors they could be easily fixed. He recommended that Allen work on his presentation with University of Maine scholars to develop a web-based delivery system; a primer of this sort would be of great value to council members. Gunnar Knapp agreed.

The question was asked, how do you sell the concept of economic rent to fishers? They don't care about economic rent, and tend to think it's the government making them pay something. They're more concerned about the price of transferable certificates. Matulich replied it's best to try not to use jargon--don't use the term "economic rents" at first; call it profits, then slip into terms like rents. It was pointed out that each of these different presentations talked about a different clientele group, but all were about communication.

Van Santen mentioned that one serious problem is that most fisheries managers do not have a background in fisheries economics. In other countries, they may not even have a fisheries background. The education process for them is crucial.

Quentin Fong mentioned that in his extension appointment, he has found that it's important to sit down in a bar or coffee shop with fishers and be able to explain things so your grandmother could understand it.

Gunnar Knapp related an anecdote in which he had been asked to speak to salmon fishermen after a big harvest with low prices. After his explanation he asked if there were any questions. One fisherman who had wandered in very late raised his hand and said, "I just got here so I didn't hear anything you said, but it's all bullshit!" This typifies the situation faced by many of us working with the general public.

Tuesday evening, conference participants were treated to a closing banquet. Gunnar Knapp laid the proposal to form a North American Association of Fisheries Economists and some draft goals for the organization before the group, and following some discussion over the inclusion of marine mammals in the organization's name, the group unanimously ratified the proposals. (See the IIFET Newsletter, 2001 #1, for details). Lee AndersonAnn Shriver and Gil Sylvia thanked Walt Keithly and Gunnar Knapp for all their work in organizing this first successful conference. Rognvaldur Hannesson regaled us with tales of the cats of Rome and urged us to carefully consider the possible issues provided to IIFET by the formation of the North American Association of Fisheries Economists. Finally, entertainment was provided by a Cajun humorist, who had us all chuckling with his tales of Bubba and his Uncle and friends from down on the Bayou.

Wednesday Morning, 9:00-12:30: Gulf of Mexico Fisheries Workshop

The following notes are more detailed, since it is less likely that papers will be available for follow-up.

The first speaker, Gerald Horst, has been a fisheries extension specialist in Louisiana for 25 years. He began with the premise that all fisheries are subcultural, but the influence of fishing in Louisiana has been a culturally shaping experience unlike in other states. Here, it's all about the harvest and use of living resources. Fisheries affect what we do, what we eat, and the very mentality. In the food arena New Orleans is totally different from the coastal Acadian or "Cajun" culture, though influenced. Northern Louisiana is again a different culture, a different universe.

What do we Cajuns eat? Anything that walks, crawls, swims or flies. Wading birds are considered game birds, despite laws to the contrary. Crawfish are found in 30 states but we're the only ones who eat them. What you might call trash fish elsewhere, our people consider a challenge. We eat amphibians and reptiles, turtle, alligators, frogs, snails, coons, possums and even nutria. Nutria are causing major damage in the US because of their herbivory-our solution is: eat it! Our interest in wildlife as food has become an obsession.

In coastal Louisiana, you ain't nothing if you ain't got a wetlands camp or base for fishing and hunting. Our camp cooking is legendary. Jambalaya is a hunter's dish; it's what you make when you have 4 species of food animals. It's routine to find three, four or five different types of commercial fishing gear used for recreation at these camps. Throughout our battles over fishing gear, all during that time people kept and used gillnets at their camps. There's a great deal of crossover between recreational and commercial use. People here are not yuppies with sunglasses on a geek strap.

Our attitude is affected by this culture in the sense that we manage by numbers of animals rather than for trophy or larger animals. For example we have a 25 fish limit on speckled trout, rather than the smaller numbers of neighboring states. The Cajun hunting-fishing culture influences our mentality and sense of identity. We direct managers to manage resources for maximum harvest, and for the needs of the Cajun and Creole cultures (the legislation actually uses these words). Every effort we make to bring management into the 21st century is torpedoed by Cajuns coming out of the Bayou to complain we're wrecking our culture. We will be the last state to address the capacity/overfishing problem. Here in Louisiana, we harvest many smaller animals these days, and this is clearly due to growth overfishing.

Recreational vs. commercial battles are exacerbated by the entitlement feeling that is culturally bred in here. The Turtle Excluder Device (TED) wars were essentially 6500 commercial fishermen with a messianic leader who simply refused to pull TEDs. What makes Louisiana different is not ethnicity, in spite of the fact that it is a Cajun/Acadian culture on the coast. What makes Louisiana different is the geography of the area, and the fact that the largest river in America is draining through this state. We have a river culture, an identifiable subculture, of folks who live and eat off the river. The river fertilizes and builds coastal Louisiana. We have a stupendous stretch of marshes, a monstrous resource base, full of remote and impenetrable swamps. 125 species are harvested in the state. The difficult nature of moving around in these marshes has created a sense of independence. Until recently roads were poor, settlements were mere camps in the marsh, and only the men that went to town could speak English.

We have had a mostly land oriented fishery, rather than deep water. The coastal Cajuns have abandoned shrimp trawling and other deepwater industries to immigrant Vietnamese. We have a Spanish moss gathering industry; the moss is gathered and ginned for use in upholstery. We have turtle farming-over a hundred farms exist, which came out of the baby turtle aquarium industry. We are gatherers of lizards. We logged by digging up ancient cypress logs. We're still engaged in fur trapping: Louisiana has harvested more fur than all the Canadian provinces plus the top 3 US states combined.

Our intense feeling of ownership and the use of our resources have been exacerbated by the oil and gas industry, which created a boom mentality for 50 years. Jobs were easy to find, the kind of thing you could do when the fishing wasn't good, and easy to discard. The oil and gas jobs financially subsidized the commercial fishing industry in Louisiana. Oil and gas industry earnings provided the money that put an awful lot of our fishing vessels out there. You didn't get the shakeouts that would occur with a pure fisheries-based economy.

This situation creates a management dilemma. You may be beating your head against a wall talking about limited entry or effort control. In this state fishery provides the underpinnings of our culture. Biologists alone will find management a close to hopeless task unless we get powerful support from our economists and sociologists. We have to understand the people of this state and where they come from in order to manage the fisheries.

The second speaker, Bob Spaeth, is President of the Southern Offshore Fisheries Association (SOFA) and owner of his own fleet of longline boats and packing company. He has gone from deckhand to fleet owner. He spoke on the importance of economics to us as a fishing community.

He began with an example of how economics can influence peoples' lives. Two years ago at an SSC meeting in Tampa, they were about to set a 1.2 million pound TAC on grouper (catch levels were at about 9.8 million pounds in the commercial sector alone). Spaeth felt there were some errors in the data so he and Walt Keithly argued against it and it was sent back to the review panel. This gave his organization time to hire a scientist (Trevor Kenchington) to review the data. The result was that the SAP raised the limits to 4.2-5.2 million pounds of red grouper, worth about $10 million to a small industry. If we hadn't had some economic input, we'd be out of business today. Fisheries are economically based. Economics drives the seafood houses and all the other parts of the network.

NMFS hasn't had enough money and resources to do a good job on economics. SOFA feels that NMFS has continually reduced the shark industry, first by 50%, then by 50% more; in its economic statement NMFS said it wouldn't affect the industry but SOFA disagreed, resulting in a lawsuit. SOFA lost the suit on all the scientific issues, because as an industry, we don't have any science available. However, on the economic issues, if over 5% of your industry is affected this fact triggers a review. This hadn't been done for years. We won on the economic issues and ended up going to a settlement with NMFS. As part of settlement, we got NMFS to agree to an independent review. We could work on the science because of the economics. What industry did was to say if the science indicates that NMFS is right, we'll accept the 50% reduction but we need to find a way to remove some people from the industry, since all the other fisheries in the state are being reduced and there is nowhere for excess workers to go.

To be complete and useful, economic analysis must contain more than just numbers. For example, say we're doing a study on how to reduce the catch by 20%. We crunch the numbers and get an answer but that's not enough. The first thing economic studies might miss is that people and boats catch fish. The average age of a captain is 40, and the average age of a vessel is 80; there are no new captains. A captain must know 23 species, how, where, when he can fish, and the sizes he can catch. Penalties on the commercial sector are very severe for mistakes. The fishery is in collapse not because of the money but because of the people.

Let's talk about the boats. In the 1980s a boat coast $200,000. The fishery won't support that kind of investment anymore. The second thing economic studies miss, is that they don't always pick up what other agencies are doing that affect the industry; for example, coast guard requirements add $10,000 in costs per vessel, and take $2500 a year to maintain. Then eventually the equipment has to be replaced.

The third thing that we miss is that vessels don't just fish for one species in our fishery. They may go after shark, grouper, and amberjack. As access to some species is cut off we have to look at the fate of the other fisheries we could move into in the future. Since the shark lawsuit, NMFS is trying to do a better job on the economics.

Another pet peeve of his is that council members are asked to make a decision to shut down or reduce a fishery--to make a decision on your livelihood--and they don't have economic information. You obviously can't do a full-blown study on every option but maybe you guys have some ideas on how to fix that.

Economics is the single biggest factor in fishing and doesn't get the respect that it should. If we have a disaster such as hoof and mouth, we'll be in sad shape.

The morning's third speaker was Chris Dorsett, Program Director for Fisheries with the Gulf Restoration Network

Dorsett explained that his is an environmental group. The Southeast region is in the midst of a population boom that will continue putting pressure on our coastlines and fishing, and have implications on water quality and quantity. We'll feel those effects in fisheries productivity. The dead zone off the Louisiana coast is the premier ecological issue in this state. The hypoxic condition is due to Mississippi River runoff, and results in an annual loss of 25-35 square miles of marsh each year.

Our climate is suitable for year round fishing, and is full of diverse habitats and species. We can't keep up on stock assessments.

The Sustainable Fisheries Act is very significant, with three major components: the first is that overfishing problems are recognized and rebuilding of stocks is required. We do not yet have assessments on all of the species. The big assessment coming up this summer is grouper; ten out of our fifteen grouper species managed by this council have been declared endangered by the American Fisheries Society.

The second component of the act is that bycatch must be reduced to the extent practicable, or we need to reduce mortality in that bycatch. The TEDs pulled by the shrimp boats are not designed for other fish species. We don't think of bycatch in recreational fisheries but it's a serious issue.

Thirdly, habitat is recognized as important. The adverse impacts caused by fisheries gear have to be reduced. The impact of bottom trawling on habitats needs to be addressed.

The number of overfished species has created the classic derby fishery. Fishermen are not encouraging their kids to join the fishing industry. In commercial Red snapper, we now have a set TAC, and we might see same thing in the recreational fishery. Growth in this fishery was not restrained; NMFS tried to estimate it but failed. We've been exceeding the estimates for 8 years. We now have a charter boat moratorium issue, and are down to 6 months of fishing in the year.

We tend to look at the short-term economic pain but not the long-term benefits of conservation.

The importance of recreational fishing in our area is demonstrated by the fact that the council is made up of seven recreational fishers and four commercial.

Walt Keithly contributed that the state tried to manage the recreational fishery with bag limits but we were overfishing the quota every year. It took an act of Congress to shut that fishery down.

William "Corky" Perret (former Assistant Secretary, Louisiana Department of Wildlife and Fisheries, and currently Program Director , Mississipi Department of Marine Fisheries.)

We have no economists on the (Gulf of Mexico) fishery management council, though we have 5 biologists. We have to implement national standards at the council level, using the "best scientific information". The lack of data we suffer from has already been cited; the biological information we do possess is very poor. Early on I recognized the need for sociologists and economists in our process. We were required to do economic analysis but had to guess at the numbers; we're required to manage for Optimum Sustainable Yield (OSY), which requires economic knowledge.

In the area of bycatch management: TEDs are not the only method we're using. Now we have a historical fishing community that we need to manage for. It has been said, and it's true that "we don't manage fish, we manage people". Last week we had a good example of this: a US senator and Lieutenant Governor of the state testified to the council, and we passed a moratorium to cap fishing effort.

Regarding what is called the gillnet war; it has been brewing for 20 years, and I was in it from day 1; it's the major reason I'm not in Louisiana anymore. Management in this state has to deal with our mania for food. Recently I ate in a local restaurant where salmon was the catch of the day-ironic in the Gulf of Mexico. I have to ask myself where was the Louisiana Restaurant Association in the political battle over fishery resource management?

The {fisheries management} act was passed for the wrong reason; it was not conservation, it was allocation. It has been blown out of proportion in the press, and recreational fishers didn't understand it, but it passed. A consultant from Texas testified on the economics of the issue. Go ahead and pass the matter, but don't say you're doing it for conservation reasons!

You economists were the only group mentioned in Dr. Hogarth's interview. NMFS has 110 lawsuits against it, which all have a lot to do with what the agency did not do on economics. It looks now as though they may be looking at some funding to make up for this.

The commercial fishing sector has taken the hardest hits. I wonder where we'd be if we'd had good economic information. It's scary when you let the people manage a renewable resource by vote; everything becomes and issue of "to kill or not to kill Bambi".

On our mania for food and the nutria problem: the nutria is a rat, an exotic rat from Argentina. The nutria were undermining the levies with their burrows, but people were against killing this rat. Now LSU has done some research on the problem and folks are more willing to them.

On shrimp: as a management council member and a state regulator I get input from all segments of the population. We used to issue 40,000 gear licenses, which is down to about 20,000 today. About 75% of boats were under 30 feet, and were Mom and Pop operations. I was the idiot who always opened the season too early. When you open the season determines who gets the fish because the shrimp go offshore at a certain time. If you open the season later, then the deepwater, larger boats can get them.

Gunnar Knapp: This situation with the immigrant Vietnamese fishermen is interesting. Could you explain how they got important in fisheries industry?

William "Corky" Perret : The situation is not gulf-wide, but mostly in Louisiana. Gerald Horst added that this mostly happened because the LA fishermen abdicated their role in offshore fishing. This state's fishermen are not really offshore oriented. There was a short time due to the lowering of the rate on the government guarantee when it opened up. The Catholic Church did some resettlement of the Vietnamese immigrants, but most of what they achieved was by virtue of hard work. It's hard {for state extension agents} to get into that community, and immigrants are still coming in. There's a language barrier. Other Vietnamese community members own fingernail shops and fish markets. They started out building rickety small boats and began to amass wealth and bought larger boats; now they own almost all of them.

Question for Bob Spaeth: the next regulation could put you out of business. Not many people are willing share data in a situation like that. Bob Spaeth: {I understand people's reticence because in the past} people have provided data and it has been used against them.

Question from Jon Sutinen: suppose George W. called you up and asked you to craft a master plan to totally reform fisheries. What would you do?

Answer: Bob Spaeth: I'd set up an arbitration group. I don't like all the states sitting on voting seats on the Gulf council. They need to be there in an advisory, not a voting capacity. In the makeup of the current council, the person now in there doesn't represent me. Let the commercial community choose it's representative. Don't make them so big you can't get anything done. The system needs lots of modification.

William "Corky" Perret : I'm a proponent of doing away with the council system. Let the agency handle its own responsibility at the regional level, with advisory panels of citizen groups. Bob Spaeth: I'm not happy where I'm at, so we might as well blow the whole damn thing up. Our motto is we fish for you. Where is the sense that the non-fish consuming public has access to the resource? In the gulf it's being allocated due to politics, pressure. Let's do an economic study on the impacts on commercial fishing, instead.

Question: what about measuring consumer surplus?

Answer: Tony Lamberte: we did some of this, but didn't get good results. We estimate based on demand. Bob Leeworthy did it using published studies. The changes in nationwide supply are significant on a regional level but it comes down to a tiny amount in price per pound.

Question: Bill Schrank: Newfoundland has a fisheries culture. When they finally realized what a serious problem the fisheries were in, and the crunch came, the question of culture came up. The regulators said they couldn't cut the fisheries back enough because the culture would be damaged in 1989. But by 1992 it had to be closed down completely, with no sign of recovery to date. The human effects were tremendous in terms of unemployment, and the population fell by 10%. Take a good long look at what happened in Newfoundland when you try to manage the situation here.