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taken in this direction several years ago when Congress statutorily outlawed the 

 practice of roe stripping. The Magnuson Act does speak about maximizing food pro- 

 duction, but we are concerned that this goal has been given short shriit in some 

 instances in favor of management plans that seek to maximize short-term profit- 

 ability. A requirement to ensure fuller utilization of commercially marketable spe- 

 cies, such as those enforced in some state fisheries, would certainly help. 



A third issue, somewhat related to the second, has to do with a recent change in 

 the way the Commerce Department reviews the economic impacts of fishery man- 

 agement plans. Several years ago, the Commerce Department began requiring that 

 aflocative plans to be accompanied by a full, quantitative cost/benefit analysis. Not 

 only was this new standard imposed without any change in the statute, but it has 

 been given preeminent status during the federal review process. Under the system 

 as it evolved during the past few years, allocative plans will only be approved if ac- 

 companied by a quantitative cost/benefit analysis demonstrating that overall net na- 

 tional benefits from the plan are positive. This sounds fine until you realize that 

 the government has been defining net national benefits as profits made by industry 

 participants. Not only is this not a standard in the Magnuson Act, it is a practice 

 which should not form the major basis for making decisions regarding a public re- 

 source. 



Under the Magnuson Act, net national benefits are comprised of not only the eco- 

 nomics of the fishery, but the social and biological impacts as well. The Commerce 

 Department, however, has recently decided to review allocation decisions based pri- 

 marily upon the predicted economic effects. This system has had one profound ef- 

 fect — it gives the Commerce Department great latitude in deciding whether or not 

 a plan is acceptable. Since it is the Commerce Department economists who ulti- 

 mately decide what is a proper cost/benefit analysis, it is now possible for the Com- 

 merce Department hierarchy to accept or reject Council plans based upon the views 

 of a group of government economists whose views may or may not be made public. 

 For instance, when the Pacific Fishery Management Council submitted its proposed 

 Pacific whiting allocation, it was accompanied by a quantitative cost/benefit analysis 

 that showed a net gain from the Council plan. In rejecting the plan, the Commerce 

 Department said that it felt the data used in the Council's cost/benefit was suspect. 

 The lesson from this was that even if a plan showed a net economic gain it may 

 not be approved since the Commerce Department has the final say over what is an 

 acceptable cost/benefit analysis. 



We feel it would be wise for Congress to remind the agency, through amendment 

 or report language, that the net economic effect of a management plan is only one 

 of several standards of review by which management plans are to be judged. 



A fourth issue we are very concerned about centers upon a new interpretation the 

 Commerce Department is giving to the Act, under the guise of "partial approval" 

 or "partial disapproval". Specifically, the Department appears to have decided that 

 it can make wholesale changes in the recommendations of a fishery management 

 council, implement that modified plan, and do so under the rationale that these ac- 

 tions are a "partial approval" or a "partial disapproval" of the plan. The well-estab- 

 lished historical notion that the Secretary shall not substitute his judgment for that 

 of the Councils from a policy perspective is becoming lost under this practice. We 

 recommend that Congress once again make it clear that the primary responsibility 

 for formulating fishery management plans rests with the Councils. We fear that if 

 this new "partial approval" strategy by the Commerce Department is allowed to 

 stand it will effectively eliminate any substantive role for the Councils in crafting 

 fishery management policies. 



Finally, some fisheries managers and industry participants favor individual trans- 

 ferable quota (ITQ) management systems as a solution for various fishery problems, 

 including overcapitalization in the nation's fisheries. Yet there is no uniform ITQ 

 system, and little predictability regarding the impacts these systems will have on 

 current fishery participants. Every ITQ system must be uniquely fashioned for an 

 individual fishery, and this process may or may not fit the current participants un- 

 less a focused standard of fairness is applied. A major concern for those currently 

 fiarticipating in fisheries is the potential uncertainty, disruption and cost which 

 TQ/resource privatization may bring to the status quo. There is a particular equity 

 problem when some sectors of a fishery are vertically integrated in harvesting and 

 processing capacity, while other sectors remain separated. Underutilized domestic 

 fishery resources have been developed by fishermen and processors under the Mag- 

 nuson Act through open access conditions. The existing industry sectors who partici- 

 pated in that development are formed by groups of fishermen identified by fishing 

 gear, and groups of processors identified by onshore and offshore locations. These 

 classifications among fishermen and processors constitute the major competing sec- 

 tors of the U.S. industry. Creation of an entirely new "privatized resource" manage- 



