Purpose and Need

This amendment along with a regulatory amendment to effect the same regulatory change for halibut was deemed necessary to increase the consolidation (“sweep-up”) levels for small quota share (QS) blocks for Pacific halibut and sablefish managed under the IFQ program. The IFQ longline industry reported that current sweep-up levels do not equal the harvest of a viable fishing trip and proposed a moderate increase in these levels to allow greater amounts of QS to be swept-up into economically “fishable” amounts, without overly increasing consolidation or allowing the creation of large-sized blocks. This action is intended to maintain consistency with the objectives of the IFQ program (i.e., prevent excessive consolidation of QS, maintain diversity of the fishing fleet, and allow new entrants into the fishery), while increasing the program's flexibility by allowing a moderately greater amount of QS to be “swept-up” into larger amounts that can be fished more economically.

Analysis

A 32-page analysis (Secretarial review draft dated November 27, 1996) included a range of alternatives of setting the sweep-up level at 1,000, 3,000, and 5,000 lb for halibut and 3,000, 5,000, and 7,000 lb for sablefish. The Council rejected the status quo levels (the lowest) and the highest levels. The analysis concluded that a moderate increase in the sweep-up levels would likely increase the transfer of very small, blocked QS to crew and small boat fishermen who seek to increase their holdings. While some price increases in small block shares might have occurred, a price differential was projected to remain between smaller and larger QS blocks. If the ability to transfer and consolidate small blocks would increase, then the number of unfished blocks would decrease.

Regulation Summary

Amendment 43 increased the sweep-up levels for small QS blocks for Pacific halibut and sablefish from a 1,000 lb (0.45 mt) maximum for Pacific halibut and 3,000 lb (1.4 mt) maximum for sablefish to a 3,000 lb (1.4 mt) maximum and a 5,000 lb (2.3 mt) maximum, respectively. Two other changes were recommended to accompany these increases: 1) The base year TAC for determining the pounds would be the 1996, rather than 1994, TAC which was used for the first sweep-up levels; 2) Once QS levels are established for the appropriate regulatory areas based on the 1996 TAC, those QS levels would be fixed and codified. This would eliminate any confusion as to the appropriate sweep-up level in pounds, which would fluctuate with changes in the annual TAC. The maximum number of QS units that may be consolidated into a single QS block in each IFQ regulatory area is shown in the above table.

Results

Relatively few sweep-up transactions occurred in 1995 and 1996. Following implementation of Amendment 43, the number of sweep-up transactions increased substantially related to the higher sweep-up limits. In 1998, the number decreased to levels closer to those similar to 1995 and 1996. In total, the number of sweepable blocks declined by 693 for halibut and 151 for sablefish from 1995 through 1998.