114 KAIIONAI l/INi; nil SALMON AND KOI I II l<KI\( . IISIIIKIIS 



ptwals tor an iiKlc[X*iulcnll\ orj-am/al lk-cl-a\lin.lu>n 

 scheme. virtiull> cvciv commercial lislimg orgaiiiAitU)ii 

 has expressed support for measures to reduce excessive 

 fleet capacity, though ditVerences about implementation 

 remain. 



A tlcet-reduction prt)gram miisl meet certain contli- 

 tions. First, the broad pattern ot reduction imisi lie 

 clarified. The vagueness regarding this matter in my Pre- 

 liminary Report caused anxiety among lishcrmen. 



The proposed vessel buyback program has 

 been the focus of much discussion and con- 

 troversy among industry representatives. 

 Cienerally. most industry groups have been 

 receptive to the concept, but they question 

 the exact form of the program. They express 

 concern that the final (post buyback) struc- 

 ture of the fleet has not been articulated, 

 spelled out clearly, and thus each group is 

 fearful that it may be adversely impacted by 

 the program. In other words, each organiza- 

 tion is concerned that it may [be] the group to 

 bear the costs, not reap the benefits, of the 

 program." 



My proposals for reduction to a target fleet over a decade 

 are aimed at eliminating this uncertainty. 



Second, it must be a substantial program, sufficient to 

 withdraw a significant amount of licensed capacity to 

 cushion adjustment to the proposed target fleet. Third, it 

 should concentrate on licences as opposed to vessels. 

 Fourth, fishermen and vesselowners should participate in, 

 and have an influence on, the program's operation. Fifth, 

 the cost should be shared between the government and 

 those who expect to benefit most directly from fleet 

 rationalization, namely holders of fishing licences. Sixth, 

 the program must have financial integrity; that is, it must 

 have its own sources of funds and the ability to manage 

 its own revenues, and it should be financially account- 

 able. Its activities must be designed to minimize upward 

 pressure on the value of licences as the fleet-reduction 

 program proceeds. Finally, the buy-back scheme must be 

 buttressed with rigorous rules and administration of the 

 licensing arrangements to close loopholes, to reduce dis- 

 cretionary issuance of new licences and to tighten control 

 of vessel replacement, which otherwise threaten to frus- 

 trate any attempt at fleet reduction. 



Two points deserve emphasis. First, the govenunent's 

 main responsibility is for licences, not vessels. The num- 

 ber of boats in the fleet will be governed by the number 

 of licences issued, but it is the latter which the govern- 

 ment has created and for which it is responsible. Vessels, 

 in contrast, are the private property of vesselowners, cre- 

 ated by them alone. The government's responsibility for 

 vessels is therefore much less direct. Eliminating excess 



licensed fi.shing capacity is the ultimate goal ot a tleet- 

 icduclion program, but reducing the number ot licences 

 i.ssued by the government is the instrument. Sometimes 

 acc|uiring vessels may cxpcililc licence acquisitions, but it 

 should be done only when thai is the case. My present 

 proposals, outlined below, avoid the necessity of the gov- 

 ernment becoming directly involved in acquiring vessels. 



fhe second point has to do with the appropriate com- 

 pensation to be paid to a licen.see for relinqui.shing his 

 licence. The proper amount cannot be less than the value 

 of the licence in the private marketplace; otherwise, sell- 

 ing a licence privately would always be more advanta- 

 geous. Nor should it be much more than this; any pay- 

 ments in excess of the minimum required to retire the 

 desired number of licences would impair the degree of 

 rationalization that can be achieved with the available 

 funds. This point deserves emphasis because a number of 

 participants suggested that compensation be based on 

 some factor, such as recent earnings, or the age of the 

 vessel or fisherman, and so on. For the reasons given 

 here, these would undoubtedly fail to serve the purpose. 



Organization and pmposc I therefore propose a pro- 

 gram aimed at reducing the licensed salmon and roe- 

 herring fleets during the transitional period, through the 

 Pacific Fisheries Licensing Board recommended in Chap- 

 ter 8. Fair compensation will be offered to those who 

 voluntarily relinquish their licences. Specifically, I recom- 

 mend that the following steps be taken: 



18. During the 10-year transitional period beginning in 

 1983, the Pacific Fisheries Licensing Board should 

 reduce the excess liceased capacity in the salmon and 

 roe-herring fleets (i.e. the difierence between present 

 and target fleets), offering compensation to licensees 

 for voluntarily relinquishing their licences. 



19. To carry out these purposes the board should have the 

 capacity and powers to enter into contracts, to deal in 

 fishing licences and ves.sels, to borrow and invest funds 

 and to manage its own finances. 



The objective should be to reduce licensed capacity as 

 quickly and efficiently as funds allow. Since the board's 

 mandate extends to two fisheries, with funds coming sep- 

 arately from each (as I propose below), some guidance is 

 required about the allocation of funds between the two 

 fisheries. Thus I recommend- 



20. The board should direct its funds to retiring capacity 

 in the salmon and roe-herring fleets, in proportion to 

 the funds it receives Irom each fishery. 



21. For each fishery the board should use the funds avail- 

 able to it in any year to withdraw as much licensed 

 capacity as possible by accepting the lowest offers in 

 terms of the compensation asked per licensed ton of 

 vessel capacity. 



