Community Fisheries Trust Models The concept of a Trust; What purpose does a trust serve?What purpose does a trust serve? How does it function?How does it function? What do they hold and why?What do they hold and why? How are they managed?How are they managed? 3e context: economic, equity (social), and ecological3e context: economic, equity (social), and ecological Assets of access, market values, trading, effects of incentivesAssets of access, market values, trading, effects of incentives Permit banks, quota trusts, othersPermit banks, quota trusts, others Intergenerational (retirement) issuesIntergenerational (retirement) issues Working examplesWorking examples

Rights vs. Privileges Rights Traditional principles of property rights includes: control of the use of the property control of the use of the property controluse controluse the right to any benefit from the property (examples: mining rights) the right to any benefit from the property (examples: mining rights) a right to transfer or sell the property a right to transfer or sell the propertytransferselltransfersell a right to exclude others from the property a right to exclude others from the property vs. Privileges a special entitlement granted by a government or other authority to a restricted group, either by birth or on a conditional basis. A privilege can be revoked in some cases. a special entitlement granted by a government or other authority to a restricted group, either by birth or on a conditional basis. A privilege can be revoked in some cases.entitlement The confusion in fisheries is the concept and practice of quotas that can be traded (bought and sold) or granted (donated) as an inheritance. These are revocable (in theory) but are traded, used as collateral by banks for lending, and have escalating value. The confusion in fisheries is the concept and practice of quotas that can be traded (bought and sold) or granted (donated) as an inheritance. These are revocable (in theory) but are traded, used as collateral by banks for lending, and have escalating value.

The concept of a “ trust ” Trusts control assets What purpose does a trust serve? - to hold the assets in perpetuity (durability in time) for the benefit of some defined beneficiaries (person(s), groups (communities). How does it function?How does it function? - Administers and manages the asset for a defined purpose (e.g. an land trust for conservation or a financial trust for family inheritance) How are they managed?How are they managed? - By a board of directors or “ trustees ”, elected or appointed which have legal and financial responsibilities and liabilities.

Application to Fisheries What do fisheries trusts hold?What do fisheries trusts hold? - Quota (catch shares), permits (for a particular fishery), access to rivers, rod days (recreational rights), leases, easements. Why has the Community Fisheries Trust idea emerged?Why has the Community Fisheries Trust idea emerged? - Market failures: the inability to generate the full set of 3e benefits from otherwise successful quota programs, (economically efficient (or too efficient), but not socially effective, or unclear ecological outcomes). -Communities are experiencing a decline in fishing culture hastened by the perception of “ privatization ” of a traditional common pool resource. -Trust concept works because there are defined privileges, but there are several issues and impacts of quota programs

Trusts are a tool to address issues What issues do communities address in quota programs?What issues do communities address in quota programs? Lack of community benefits from industrial scale fishing operations offshore from their places/ecosystems.Lack of community benefits from industrial scale fishing operations offshore from their places/ecosystems. Loss of quota holdings in small communities through moves, sales, retirements, small allocations.Loss of quota holdings in small communities through moves, sales, retirements, small allocations. Cost barriers to new entrants to the fishery (new generation must pay to enter fishery, quota share values rise with good management, certified (e.g. MSC) fisheries, and quality product (drives consumer demand) Example of Alaska halibut.Cost barriers to new entrants to the fishery (new generation must pay to enter fishery, quota share values rise with good management, certified (e.g. MSC) fisheries, and quality product (drives consumer demand) Example of Alaska halibut. 25,000 lbs of halibut quota in area 3A (Gulf of Alaska) is $30/lb = $750,000. Generates $125,000 gross revenues per year. Assuming 50% costs, with $20,000 going to debt = 37 years to pay off full loan.25,000 lbs of halibut quota in area 3A (Gulf of Alaska) is $30/lb = $750,000. Generates $125,000 gross revenues per year. Assuming 50% costs, with $20,000 going to debt = 37 years to pay off full loan.

How do Trusts get assets? Community Development Quota corporations: awarded quota allocation by policy, but quota had to be extracted from other holders (fishing corporations). These shares are then leased back to the fishing companies, and the revenues support community schools, clinics, economic development, etc.Community Development Quota corporations: awarded quota allocation by policy, but quota had to be extracted from other holders (fishing corporations). These shares are then leased back to the fishing companies, and the revenues support community schools, clinics, economic development, etc. Community Quota Entities: can purchase quota on the open market and lease it to residents only. Need clear social rules of the game to maintain fairness, access, equity in benefits. Leasing rates need to cover any debt (capital is key issue).Community Quota Entities: can purchase quota on the open market and lease it to residents only. Need clear social rules of the game to maintain fairness, access, equity in benefits. Leasing rates need to cover any debt (capital is key issue). Community Quota Banks: members bring their quota to a non-profit corporation, retain ownership, but pool resources to be able to leverage new quota purchase and management for a common community of users.Community Quota Banks: members bring their quota to a non-profit corporation, retain ownership, but pool resources to be able to leverage new quota purchase and management for a common community of users. Community Permit Bank: a non-profit entity purchases fishing permits and leases them to residents, revenues from fisheries pay off debt used to acquire permits (capital is key issue). Community Permit Bank: a non-profit entity purchases fishing permits and leases them to residents, revenues from fisheries pay off debt used to acquire permits (capital is key issue).

How do Trusts get assets? (2) Quota purchases powered by other community revenue trusts: North Sea oil revenues, LNG terminal community compensation trusts in New England.Quota purchases powered by other community revenue trusts: North Sea oil revenues, LNG terminal community compensation trusts in New England. New policy initiatives: Market design of quota programs for 3e outcomes;New policy initiatives: Market design of quota programs for 3e outcomes; - Includes community sector allocations upfront before market forces take over. Avoids huge income windfalls and intergenerational barriers, can protect community structure, needs to be combined with private incentives to generate efficiencies, can create synergy with other sector allocations (auctions of quota, annual harvests), etc. A government could allocate fisheries quotas to community trusts, based a combination of performance incentives, community stability, and quality management.A government could allocate fisheries quotas to community trusts, based a combination of performance incentives, community stability, and quality management.