[Senate Hearing 112-239]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-239
 
            REVIEW OF MASSACHUSETTS FISHERY MANAGEMENT PLANS

=======================================================================

                             FIELD HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 3, 2011

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation




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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas, 
JOHN F. KERRY, Massachusetts             Ranking
BARBARA BOXER, California            OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida                 JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey      ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas                 JOHNNY ISAKSON, Georgia
CLAIRE McCASKILL, Missouri           ROY BLUNT, Missouri
AMY KLOBUCHAR, Minnesota             JOHN BOOZMAN, Arkansas
TOM UDALL, New Mexico                PATRICK J. TOOMEY, Pennsylvania
MARK WARNER, Virginia                MARCO RUBIO, Florida
MARK BEGICH, Alaska                  KELLY AYOTTE, New Hampshire
                                     DEAN HELLER, Nevada
                    Ellen L. Doneski, Staff Director
                   James Reid, Deputy Staff Director
                   Bruce H. Andrews, General Counsel
                Todd Bertoson, Republican Staff Director
           Jarrod Thompson, Republican Deputy Staff Director
   Rebecca Seidel, Republican General Counsel and Chief Investigator


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on October 3, 2011..................................     1
Statement of Senator Kerry.......................................     1
Statement of Senator Begich......................................    19

                               Witnesses

Therese Murray, President of the Massachusetts Senate............     1
Hon. Scott Brown, U.S. Senator from Massachusetts................     4
Hon. Jane Lubchenco, Ph.D., Under Secretary of Commerce for 
  Oceans and Atmosphere, and Administrator, NOAA, U.S. Department 
  of Commerce....................................................     5
    Prepared statement...........................................     6
Congressman Barney Frank, U.S. Representative from Massachusetts 
  (4th District).................................................    29
Congressman John F. Tierney, U.S. Representative from 
  Massachusetts (6th District)...................................    33
Congressman William R. Keating, U.S. Representative from 
  Massachusetts (10th District)..................................    36
Stephen P. Welch, Fisherman and Board Member, Northeast Seafood 
  Coalition......................................................    41
    Prepared statement...........................................    43
Paul Diodati, Director, Massachusetts Division of Marine 
  Fisheries and Co-Chair, Massachusetts Marine Fisheries 
  Institute......................................................    46
    Prepared statement...........................................    48
Colin McAllister ``RIP'' Cunningham, Jr., Acting Chairman, 
  Northeast Fisheries Management Council.........................    50
    Prepared statement...........................................    51
Steven X. Cadrin, Associate Professor, Department of Fisheries 
  Oceanography, School for Marine Science and Technology, 
  University of Massachusetts Dartmouth..........................    54
    Prepared statement...........................................    56
Brian J. Rothschild, Montgomery Charter Professor of Marine 
  Science and Technology and Co-Chair, Massachusetts Marine 
  Fisheries Institute, University of Massachusetts Dartmouth.....    60
    Prepared statement...........................................    62

                                Appendix

Response to written question submitted by Hon. Mark Begich to 
  Hon. Jane Lubchenco, Ph.D......................................    87
Letter dated October 6, 2011 to Hon. John F. Kerry from Steven A. 
  Baddour, State Senator, First Essex District regarding 
  testimony of Herbert Crooks....................................    88
Pew Environment Group and Conservational Law Foundation, prepared 
  statement......................................................    88
Maggie Raymond on Behalf of the Associated Fisheries of Maine, 
  prepared statement.............................................    97


            REVIEW OF MASSACHUSETTS FISHERY MANAGEMENT PLANS

                              ----------                              


                        MONDAY, OCTOBER 3, 2011

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                        Boston, MA.
    The Committee met, pursuant to notice, at 9:02 a.m. in room 

A-1, Massachusetts State House, Hon. John F. Kerry presiding.

           OPENING STATEMENT OF HON. JOHN F. KERRY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Kerry. This field hearing of the Commerce Committee 
will come to order. And it's my privilege to turn the floor 
over immediately to the President of the Senate, Therese 
Murray.

                 STATEMENT OF THERESE MURRAY, 
             PRESIDENT OF THE MASSACHUSETTS SENATE

    Ms. Murray. Thank you, Senator. And thank you for holding 
this very important field hearing today.
    I want to thank Senator Brown, Congressman Frank, 
Congressman Tierney, and I don't see Congressman Keating yet. 
But thank you all for being here.
    I'd also like to recognize the other Massachusetts elected 
officials who in this area of concern have joined us, and 
that's Minority Leader Bruce Tarr, Representative Ferrante, and 
I believe Senator McGee will be joining us also. And I want to 
welcome Senator Begich from Alaska and Under Secretary 
Lubchenco to the Massachusetts State House.
    I hope that, if not today, that at some point you'll take a 
few minutes to walk around this historic building. And as you 
do, you will notice in almost every corner of this State House, 
there is a reminder of how important the fishing industry is 
for the Commonwealth--on the chandelier that hangs just under 
the golden dome in the Senate chamber, in the House gallery 
looking over the House floor, and the stained glass throughout 
the hallways.
    Just as Massachusetts was the foundation for this nation, 
the fishing industry was the foundation of our economy. Sadly, 
each year, our fleet is vanishing. Each year, families who for 
generations have bravely and proudly fished our waters are 
forced out of their livelihoods. In my own district, which 
stretches along the coast from Kingston to Cape Cod, the few 
fishermen who are left are desperately trying to hold onto 
their boats, their houses, and to feed their families.
    Our larger commercial fleets in Gloucester, New Bedford, 
and Provincetown have been decimated. And instead of trying to 
find solutions we have all been fighting for, we have 
consistently run into road block after road block. And in many 
cases, our fishermen have been seen as guilty until proven 
innocent.
    Enforcement power by the Federal Government officials has 
been misguided, misused, and abused. And to make matters worse, 
the science used to determine the catch is antiquated and 
inaccurate, unfairly restricting the catch that the fishermen 
who have been able to hang on can rely upon.
    So I say, and I believe I can speak for my colleagues in 
both the Massachusetts Senate and the House of Representatives 
who represent fishing communities, it is time for the road 
blocks to come down. It's time for NOAA to begin to work with 
our fishermen. And I hope today's hearing will shed some light 
on the continued questions about our fishing industry and that 
the thoughtful and meaningful dialog will produce positive and 
constructive steps which will help our fishermen maintain their 
livelihood and stop the erosion of a bedrock industry here in 
the Commonwealth of Massachusetts.
    Thank you for taking me.
    Senator Kerry. Thank you very much, Madam President. We 
really appreciate your helping us to use the facilities, and we 
are very appreciative for your leadership and friendship. Thank 
you. Appreciate you being here today.
    Ms. Murray. Thank you, Senator.
    Senator Kerry. Let me welcome everyone in this room for an 
opportunity to try to review where we are with respect to the 
Massachusetts fishing industry. And I am particularly happy 
today to welcome the Chair of the Oceans Subcommittee of the 
Commerce Committee, a good friend of mine, Senator Mark Begich 
from Alaska, who has taken the time to come up here as the 
Chair and share in this information gathering and exchange of 
views.
    I'd just say to everybody here that over the now 26 years 
which I've been privileged to represent the state and, 
particularly, this industry in a lot of these struggles through 
the years, having rewritten the Magnuson bill at least two or 
three times, this has been a long fight. But throughout that 
fight, there has been a history of Alaska-Massachusetts 
cooperation.
    Senator Ted Stevens and I became very good friends and 
worked diligently together. In fact, we were rewriting the 1994 
Magnuson-Stevens Act when the Senate changed hands, and what 
was going to be the Kerry-Magnuson Act became the Stevens--or 
Magnuson-Stevens Act, as it happens in the Senate.
    But we were partners. We were a team. And he was passionate 
about fishing, about the oceans. It is no small irony that he 
passed away going on a fishing expedition, which is what he 
loved to do every summer--took off in Alaska in a small plane, 
and we lost him a couple of years ago now. But it's really nice 
for me to have this partnership continue with Mark Begich, 
former Mayor of Anchorage, and who, believe me, is just as 
passionate and just as knowledgeable about the fishing 
interests and about this relationship that we need to work on.
    So, I want this hearing today to consider the social and 
economic impacts of Federal regulation and discuss how we make 
improvements, not only in the outcomes for fishermen but in the 
relationship with the Federal Government. I thank NOAA 
Administrator Jane Lubchenco for taking the time out of her 
schedule to be here, and I welcome all of the other witnesses 
who are here today.
    I apologize for the elongated nature of this hearing room. 
But the Gardner Auditorium, where we would have perhaps met, 
was already booked, and we didn't want to delay the hearing yet 
again simply over location.
    So nobody here needs any lessons about what a critical 
component of our historic, cultural, economic fabric the 
fishing industry is to us. Gloucester and New Bedford are two 
of the largest ports in the Nation for landing fish. And the 
commercial fishing industry of our state supports over 77,000 
jobs in Massachusetts.
    Unfortunately, for many of our fishermen and local 
businesses, they're all facing an increased difficulty of just 
staying in business. Jim Keding is like any other commercial 
fisherman in Massachusetts. He understands the rules and he's 
tried to live by them. And I think all of us can agree that the 
regulations shouldn't get in the way of common sense or simple 
efforts to try to provide adequately for family and to ply your 
trade.
    But recent changes in Federal regulations have had an 
impact, a major impact, on the fishing allocation. It's made it 
much more difficult for Mr. Keding and for many others to make 
a living doing what they love to do and have done for years.
    As a result, Jim has had to sell his boat and his home. Now 
he's forced to rent another boat just to make ends meet, and, 
obviously, I don't think anybody believes that's an acceptable 
situation. It highlights the challenge that we face, some of it 
just sheer disappointment, some of it economic reality, some of 
it a mistrust that has grown up, and we need to try to 
understand it better and eliminate that mistrust.
    I intend to introduce legislation called the ``Fishery 
Research and Conservation Investment Act,'' which will focus 
Federal funding under the Kennedy-Saltonstall Act on 
identifying the critical research, conservation, and management 
needs in each separate fishery region of the country. And I 
hope that this will once and for all allow the Federal funds to 
go where they were originally intended, to address the critical 
problems facing the science and the decisionmaking process, 
which has contributed to the mistrust.
    Under this legislation, the fishery region would develop a 
5-year fishery investment plan that would specifically address 
their needs, and money from the Kennedy-Saltonstall fund would 
be used to implement that. Our fishermen will be deeply 
involved in helping to develop these plans, something that I 
think many feel has not been sufficiently attended to.
    I'd just say quickly that in 2009, Senator Kennedy and I, 
together with our House colleagues, worked to confront the 
Department of Commerce. And we requested an investigation into 
the potential abuses and intimidation of certain fishermen.
    And, Dr. Lubchenco, even though you had only just taken 
office at that time, literally--it was 2009. The new 
administration had just come in and you'd just been appointed. 
The vast majority of those abuses took place during past 
administrations.
    But, nevertheless, I want to thank you for taking our 
request seriously. You initiated a Department of Commerce 
Inspector General report. I know it's not an easy thing to do 
the moment you come into a new job. But I think it was 
important you did that. It helped to stop the abuse, and I 
think now more than $600,000 has been returned in unnecessary 
fines. I think there's still more that we can do. You and I 
have talked about it. We can talk about some of that today.
    In 2008, I was able to join with our colleagues in the 
House in successfully obtaining disaster funding for 
Massachusetts, and that has been helpful. But--and we've 
expanded the health insurance for fishermen. But every one of 
us knows we've got a long way to go to try to get this 
relationship on an even keel.
    Most importantly, in 2010, approximately 80 percent of the 
gross revenues resulted from landings from only 20 percent of 
active vessels. That clearly threatens the future of small boat 
fishing in Massachusetts. And small boat fishing is what has 
been at the center of life in our state for generations. So 
that's the struggle. That's what we want to focus on. And 
Senator Brown will make a brief opening.
    I need to apologize up front that because of the Super 
Committee requirements, I need to leave here around 11, 11:15. 
Hopefully, we will have been through both panels by then and 
the hearing will be wrapping up. But if not, I ask everybody's 
indulgence. If we're going to have any industries left of any 
kind, we need to be successful in that Super Committee work. So 
I know you understand that.
    Senator Brown?

                STATEMENT OF HON. SCOTT BROWN, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Brown. Thank you, Senator, and thank you for 
holding this hearing.
    As you know, in June, Senator Carper and I held a hearing 
on enforcement abuses and mismanagement of seized assets and 
lack of accountability that you just referenced. And this 
morning's hearing is a follow-up to that hearing to explore 
some of the larger issues.
    And, as you noted, and rightly so--first of all, I want to 
thank you for your leadership on this issue, for holding this. 
We're obviously--I know we're working on the Oceans caucus. And 
I want to thank Senator Begich for coming out--he's working 
hard on these issues--and all the Congressmen and Mayors and 
elected officials who care very deeply about this real issue.
    And you've noted the decline in vessels, the ever changing 
nature of fishing in Massachusetts. Gloucester, Fall River, New 
Bedford, and the surrounding New England areas are being--are 
dealing with some overzealous enforcement and a mismanaged 
transition to sector management. And this has combined to 
decimate the industry to historic lows, and, as you know, the 
fishermen are battling each and every day to try to just stay 
in business.
    So we have a lot of real challenges. I'm excited to be 
here.
    I'm glad, Dr. Lubchenco, you decided to come to this 
hearing, and I look forward to getting started.
    Thank you.
    Senator Kerry. Thank you very much.
    With that, we are going to proceed. Senator Begich has 
decided--did you want to say one quick word?
    Senator Begich. No. I want to get right to it at this time.
    Senator Kerry. Dr. Lubchenco, thank you very much for 
taking time to be with us. We look forward to your testimony. 
If you could summarize, as is the norm, we'll put your full 
testimony in the record as if read in full. And we appreciate 
your being here.

            STATEMENT OF HON. JANE LUBCHENCO, Ph.D.,

             UNDER SECRETARY OF COMMERCE FOR OCEANS

            AND ATMOSPHERE, AND ADMINISTRATOR, NOAA,

                  U.S. DEPARTMENT OF COMMERCE

    Dr. Lubchenco. Thank you, Mr. Chairman, Senator Begich, 
Senator Brown, Representative Tierney, Representative Frank. 
It's my pleasure to be here with all of you today. Thank you 
very much for this opportunity to testify.
    Senator Kerry, I want to thank you in particular for your 
leadership on fisheries, on oceans, and on climate issues.
    And, Senator Begich, thank you for being here today. I 
really appreciate that, and I appreciate your leadership as 
well.
    Let me start by saying that, as Senator Kerry has already 
noted, starting with my first day in office, I have taken 
fishing issues in this region very seriously. And I am firmly 
committed to many of the reforms that have been set in motion 
and others that are yet to come.
    Fishing jobs have been at the heart of this region for 
decades if not centuries. I understand that fishermen here are 
suffering. Together, I believe we can and will do better.
    The 2006 reauthorization of the Magnuson-Stevens Act put 
into motion new catch limits to end overfishing and to rebuild 
stock. Along with the new catch limits, the New England Fishery 
Management Council worked with NOAA to expand the sector 
program, to put new sector rules in place for New England 
groundfish which give fishermen increasing flexibility in 
operating their businesses.
    Following decades of problems, there are now glimmers of 
hope. We are finally on track to end overfishing. Stocks are 
being rebuilt and catch limits are up. In addition, revenues 
are up for some but not all fishermen.
    Fishermen are fishing more selectively, benefiting their 
bottom line and the vulnerable stocks. And new entrepreneurial 
activities leading to higher quality fish and higher profits 
are taking off under sector management. A community supported 
fishery in Maine provides weekly shares of local seafood 
through a cooperative, and a boat-to-table business in Rhode 
Island links fishermen directly to restaurants.
    I believe that, in fact, we are making progress, but not 
enough, and very significant challenges remain. Not all 
fishermen are reaping these benefits. The costs are still high 
for implementing the sector program. Fishermen aren't catching 
the full allotment of fish.
    So I pledge to continue working with industry, the Council, 
other stakeholders, and Congress to fix problems and make 
course corrections to improve the system for all fishermen, 
including small boat fishermen. In the region, we are working 
aggressively, following up on the independent management review 
report and working with the council on a number of management 
adjustment reforms, including a number of excellent suggestions 
that you included in the July 26 letter from the New England 
delegation. We are acting on observer costs and monitoring 
approaches, access to unused quota in closed areas, excessive 
quota consolidation, innovative gear, and several other 
important improvements.
    Sustainable fisheries, I believe, are about a better future 
for fishermen, for families, and for communities. Our goal is 
to enable fishermen to chart their course. We aim to accomplish 
this by giving fishermen more control over their operations, 
and to work with them continuously to adapt our management 
efforts.
    Thank you for the opportunity to discuss NOAA's efforts on 
groundfish management in New England. Eric Schwaab, the 
Director of NOAA Fisheries, and I are here to answer questions.
    Thank you.
    [The prepared statement of Dr. Lubchenco follows:]

 Prepared Statement of Hon. Jane Lubchenco, Ph.D., Under Secretary of 
     Commerce for Oceans and Atmosphere, and Administrator, NOAA, 
                      U.S. Department of Commerce

    Senator Kerry and members of the Subcommittee, my name is Jane 
Lubchenco, and I am the Under Secretary of Commerce for Oceans and 
Atmosphere and the Administrator of the Department of Commerce's 
National Oceanic and Atmospheric Administration (NOAA). Senator Kerry, 
I would like to thank you for your leadership over the many years on 
fisheries, oceans, and climate issues. In your tenure in the Senate you 
worked closely with Senator Stevens to rewrite the Magnuson-Stevens 
Fishery Conservation and Management Act (Magnuson-Stevens Act) and you 
continually show commitment to building sustainable coastal economies. 
I appreciate your support of NOAA and our efforts to improve the 
products and services that are vital to supporting America's 
businesses, communities, and people.
    Fishing jobs have been at the heart of this region for centuries. I 
take the challenges in the Northeast region very seriously, as I know 
you do. Following decades of overfishing and decline, including the 
collapse and closure of this fabled fishery, and years of legal 
battles, the past 10 years have been particularly challenging for those 
who catch cod, haddock, and other groundfish. Court rulings calling for 
science-based catch levels drove the government to implement well 
intentioned but ever tightening regulations under the ``days at sea'' 
management system. Under this system, individual fishermen were told 
how many days and when they could fish, which often forced them to sea 
in bad weather. And they were told how much fish they could bring back 
to port on each trip, forcing them to pitch their extra catch overboard 
as wasted by-catch. From 2001-2009, landings dropped by nearly 40 
percent, revenues fell by more than one half, and the number of vessels 
in the fishery dwindled to less than half their previous levels. And 
because these regulations often did not succeed in halting overfishing, 
the rules were always changing. The last decade saw 11 major regulatory 
overhauls and changes in the rules every 4 months on average, including 
ratcheting down on the number of ``days at sea'' available. Decades of 
overfishing, failing fish stocks and punishing regulations interacted 
to threaten the region's most iconic industry.
    That system was not working for fishermen. It was driving them out 
of business and the stocks were not rebuilding to a point where they 
could sustain a profitable industry. In response, the New England 
Fishery Management Council--with representatives from Massachusetts and 
other New England state governments, commercial and recreational 
fishermen, and a representative from NOAA--held more than 60 public 
meetings over 3 years to develop a new approach called ``sector 
management.'' This approach revolves around a system of voluntary 
cooperative fishing groups (called ``sectors''). Most importantly, this 
approach gives fishermen greater flexibility and ownership over the 
day-to-day management of their businesses. In June 2009, the Council 
voted 14-1 to approve the new program. This new sector management 
program was expanded at the same time that the much lower catch limits 
required by the Magnuson-Stevens Act were implemented.
    The adoption of this new management system and the lower catch 
limits happened early in my tenure as Administrator. Indeed, sustaining 
the groundfish fishery and the economic health of the industry has been 
of paramount importance to me since my first day in office. I 
understand how important it is to the region's economy and culture. I 
also know that implementing tough measures to end overfishing and to 
rebuild stocks is not easy for fishermen and fishing communities.
    For those reasons, I have devoted significant energy to take action 
in three key areas that I will talk about today: (1) our work with 
fishermen and the New England Fishery Management Council to help get 
this fishery on a pathway to sustainability and long-term 
profitability; (2) our top-to-bottom overhaul of NOAA operations in the 
region, including an independent management review and follow-up 
actions we have already taken; and (3) advancing concrete proposals 
that build on your ideas--and those of other partners in New England--
to address residual problems faced by fishermen in the region and to 
build on the progress made.
    Our goals are clear: to be a partner in the success of fishermen, 
to sustain fishing jobs, to create a profitable and healthy future for 
fishing communities, and to maintain marine fisheries. We appreciate 
your support in getting there.
    We are working with fishermen and the Council to put the fishery on 
a path to profitability.
    As described in detail later in my testimony (Attachment A), 
fishing in all its forms is a $71 billion per year industry in the 
United States, generating economic activity that creates 1.4 million 
full and part-time jobs, from the boat captains and crews, to people in 
processing plants, trucks, seafood markets, and restaurants. Rebuilding 
all U.S. fish stocks would generate an additional $31 billion in sales 
impacts, support an additional 500,000 jobs and increase dockside 
revenues to fishermen by $2.2 billion, which is more than a 50 percent 
increase from the current annual dockside revenues. New England, the 
region with the most number of overfished species as of this summer, 
stands to gain significantly as overfishing ends and fisheries are 
rebuilt. A prime example of the benefits of rebuilding is seen in the 
New England sea scallop fishery, where revenues increased five-fold as 
the fishery rebuilt, from $44 million in 1998 to $265 million in 2010, 
making New Bedford the largest port by value every year since 2000.
    To get the New England groundfish fishery back on track, I embraced 
new management decisions made by the Council, and I provided resources 
to speed up the transition to a fishery with a more sustainable future. 
I did this because I realized the seriousness of the dire economic 
situation in New England and because the days-at-sea system was not 
helping the fish or the fishermen. While there are improvements to be 
made in the sector system and fishermen are still struggling, glimmers 
of hope are now finally emerging in the fishery after decades of 
problems. We don't want to return to the past, so we must work together 
to continue the recent progress we've seen, address the imperfections 
of the new system and get this fishery back in the black. The progress 
we've made is due directly to the active engagement of fishermen from 
throughout the region and our intense efforts to reverse our 
trajectory. Although we still have much more work to do, I believe we 
are turning the corner.
    I want to empower fishermen to chart their course. We will do that 
by simplifying regulations, giving fishermen more control over their 
operations, and working with them on management. For decades, the New 
England groundfish fishery underperformed both ecologically and 
economically with not enough fish to support good fishing jobs. The 
2006 Magnuson-Stevens Act reauthorization put into motion two important 
changes. First, it set annual catch limits to end overfishing and to 
rebuild stocks. Second, the Council worked with NOAA to put new rules 
in place to give fishermen increased flexibility in how they operate 
their businesses.
    How are we doing after 1 year with new catch limits and with the 
expanded sector management program? We see both signs of progress and 
continued room for improvement.
    Signs of progress:

        1. We are finally on track to end overfishing. For the first 
        time ever, we have catch limits and accountability measures in 
        place and clear ability to track progress. In 2010, fishermen 
        fished within the limits for 18 of the 20 stocks. This is 
        excellent news.

        2. Stocks are being rebuilt and therefore catch limits are up. 
        Due to the rebuilding progress already underway, in the 2011 
        fishing year, catch levels have gone up for 12 of the 20 
        groundfish stocks, which is another indication the Magnuson-
        Stevens Act and associated management measures are working to 
        improve the status of the stocks and the economics of the 
        fishery.

        3. Fishermen are fishing more selectively which benefits their 
        bottom line and avoids depleting already low stocks. Despite 
        lower catch limits for many stocks, under sector management 
        fishermen were able to fish smarter by more effectively 
        avoiding weaker stocks and by capturing a higher percentage of 
        the allowable catch. Fishermen and sector managers have 
        reported to us how incentives have changed under this 
        cooperative management approach. They have noted they have the 
        ability to spend more time offshore, seeking high abundance 
        stocks and avoiding bycatch of weaker stocks. Sectors free 
        fishermen from limitations of days at sea management 
        conditions.

        4. We have a better accounting for and less waste of bycatch. 
        Fishermen captured more high-valued species and kept more of 
        the fish that had historically been thrown overboard. For 
        example, only 9 percent of Georges Bank yellowtail flounder 
        total catch was discarded in 2010 compared to 31 percent in 
        2009. Adhering to catch limits and reducing discards will 
        hasten rebuilding, yielding increased quotas more quickly.

        5. New England fishermen are beginning to realize new 
        entrepreneurial opportunities under sector management. Here are 
        three examples: (A) A group of small-boat fishermen in Rhode 
        Island has started a new business to market their fish directly 
        to local restaurants as ``boat to table.'' (B) Another new 
        company helps fishermen match their supply to consumers' 
        demands across New England. (C) Fishermen in Port Clyde are 
        making the most out of their catch through a Community 
        Supported Fishery program. This program is similar to the Cape 
        Ann Fresh Catch program started by the Gloucester Fishermen's 
        Wives Association and supported by NOAA Sea Grant. Customers 
        give the fishing community financial support in advance of the 
        season, and in turn the fishermen provide a weekly share of 
        seafood during the harvesting season. This innovative marketing 
        program is leading to higher quality fish and higher profits. 
        In each case, the sector program provided fishermen with the 
        flexibility to be entrepreneurial and innovative, and to 
        control the destiny of their small businesses. In each case, 
        fishermen have been freed from overly burdensome regulations, 
        and they can fish more safely.

        6. Revenues are up for some but not all fishermen. For example, 
        the average New England groundfish fisherman earned 16 percent 
        more per pound this year than last. Revenues for 
        groundfishermen from Portland, Maine, were up by 25 percent. 
        For those with a homeport in New Bedford, the increase was over 
        20 percent. These initial numbers are encouraging, but we need 
        the full balance sheet reflecting revenues and costs and 
        particularly changes in number of boats to know the full story, 
        and we'll have that information in the near future.

    Challenges Remaining:

        1. Not all fishermen are reaping these benefits. While we have 
        some promising preliminary economic information about the first 
        year of the program in New England (above and Attachment B), 
        overall statistics can mask the trouble that some fishermen are 
        facing. Some fishermen appear to be having a tough time making 
        the transition to sectors. I want to understand why some 
        sectors seem to be working well while others do not and 
        identify corrective actions. And I want to work with those in 
        Congress and in coastal communities who want to help improve 
        the system for all fishermen, including small boat fishermen.

        2. Some fishermen continue to distrust the scientific 
        information used to set limits. Moreover, more frequent 
        assessments for some stocks would be desirable. And, we are 
        requesting additional resources for stock assessments in our FY 
        2012 budget.

        3. Costs of implementing the sector program remain a challenge.

        4. Faster adjustments in response to changing status of stocks 
        and more nimble ability to implement innovations are needed.

        5. Better communication among NOAA, fishermen and the Council 
        is desirable.

        6. Improved understanding of and responsiveness to economic 
        challenges faced by fishermen is needed.

    In the next section, I lay out a number of specific actions NOAA is 
advancing to help with these and other implementation problems.
    Responsive actions underway. After learning about problems in 
NOAA's operations in the region, I have overseen a top-to-bottom 
overhaul of our work in the region, including in the areas of 
enforcement, science, management and engagement.
    In one of our first steps, Eric Schwaab, our Assistant 
Administrator for fisheries, took the initiative to set up a 
comprehensive, independent review of management in the region; that 
review provides some excellent suggestions that we are now pursuing. 
Our overhaul is still underway and is bringing long-overdue change. We 
have also committed to seeking industry and regional input as we work 
to fill the Northeast Regional Administrator and Northeast Science 
Center Director positions.
    The Management Review, conducted by an independent firm, provided a 
regional analysis and management review of the fishery management 
process in New England, focusing on the relationships among the New 
England Fishery Management Council, the Northeast Regional Office, and 
the Northeast Fisheries Science Center. The review examined how 
effective those three entities are at carrying out their 
responsibilities under the Magnuson-Stevens Act. This review included 
nearly 200 independent interviews with stakeholders across the region. 
In April, NOAA released the results and at my direction, immediately 
began taking actions to address management, science, and communications 
issues identified in the review.
    In tackling the multiple issues identified in the report, NOAA 
Fisheries began with those changes that would bring the greatest 
benefit: (1) simplify governance; (2) simplify communications; (3) 
improve science collaboration; and (4) maximize overall collaboration. 
Because many of these changes require Council action, NOAA Fisheries is 
working closely with the New England Fishery Management Council on many 
of these efforts. At its meeting on September 26, 2011, the Council and 
the agency reported on progress to date, including:

        1. Fast tracking a mid-term review of the current five-year 
        research strategic plan for cooperative research to ensure it 
        is responsive to industry, management, and scientific 
        priorities. Our Cooperative Research Program is wrapping up a 
        series of outreach meetings with fishermen and scientists to 
        gather input to refine its research strategic plan through 
        2014.

        2. Overhauling our data collection and management system. We 
        have initiated a review and analysis of the regional data 
        systems to better integrate them and improve efficiencies. 
        NOAA's Satellite and Information Services staff, which has 
        conducted similar work in the past, has begun this review.

        3. Developing new operating agreements. We are working on new 
        agreements with the New England and Mid-Atlantic Councils to 
        clarify roles and responsibilities, strengthen collaboration, 
        simplify the governance structure and process, and highlight 
        opportunities for public input.

        4. Launching a ``plain language'' campaign; we are striving to 
        make all of our written documents more clear and concise.

        5. Establishing a single Communications Team in our regional 
        office--representing the region, the center and the Office of 
        Law Enforcement--to simplify and strengthen our outreach and 
        collaboration efforts and streamline and improve our external 
        communications. We host regular meetings with sector managers 
        to identify and resolve issues related to sector management, 
        provide information, and get feedback from the fishing 
        industry.

        6. Hiring a former commercial fisherman in New England to serve 
        as our first formal compliance liaison in the country. He is 
        working directly with the fishing industry in a non-enforcement 
        capacity to improve communications and ensure all can comply 
        with needed conservation measures.

        7. Developing a revised approach for producing stock 
        assessments that we will begin transitioning to in 2013. The 
        intent of this new approach is to provide managers the 
        information to adjust annual or biennial catch limits in 
        response to changing stock conditions, so industry can take 
        quicker advantage of healthy stocks and not overfish newly 
        depleted stocks.

    Future actions. Even with the significant progress made, we have 
much work ahead and are open to any good ideas about how to make 
progress with the fishery and our effectiveness. I appreciate the 
suggestions offered by the July 26 letter from the New England 
Delegation, and intend to pursue aggressively the following actions:

        1. Develop more cost-effective observer and monitoring 
        approaches, and a cost-transition plan that recognizes chronic 
        economic challenges facing many segments of the industry. We 
        understand that adaptation to any new management system is 
        challenging, and the timing of sector implementation in 
        conjunction with the requirement to set annual catch limits to 
        end overfishing created an even more difficult transition. In 
        recognition of the hurdles faced by the fishery associated with 
        that transition, in Fiscal Years 2009 and 2010, NOAA invested 
        over $47 million to assist in many ways, including to offset 
        start-up costs of groundfish sectors, conduct at-sea research 
        with industry, and develop permit banks.

        In addition, recently, NOAA's National Marine Fisheries Service 
        (NMFS) re-evaluated the effectiveness of the dockside 
        monitoring program, made a timely adjustment to the 
        requirements, and redirected funding for that program to make 
        approximately $1 million in additional funds available directly 
        to sectors to support their operations.

        While monitoring is critical to the sector management program's 
        success, I recognize that at-sea monitoring costs are difficult 
        for the fishing industry to assume and I share your desire to 
        reduce these costs; NOAA is working to do so. NOAA is also 
        working with the fishing industry to improve the utility of new 
        monitoring tools beyond at-sea monitoring, such as electronic 
        catch monitoring, which could reduce overall monitoring costs 
        to the industry. Pilot programs are currently underway to test 
        the effectiveness of these techniques. Following these pilots, 
        we will work with the Council, sector managers, and 
        stakeholders to more broadly implement electronic catch 
        monitoring technology, and I am committed to nationwide efforts 
        that will reduce the economic burdens associated with 
        monitoring costs.

        2. Evaluate input controls and provide access to unused quota. 
        Following the 2010 fishing year, two particular issues arose 
        that require agency and Council attention. Earlier this summer, 
        we asked the Council to consider action to raise the 10 percent 
        unused quota carryover provision. Additionally, the Council is 
        considering the continued merits of groundfish closed areas 
        through an Essential Fish Habitat amendment process. We have 
        and will continue to advocate that the Council give priority to 
        both issues.

        Underutilization of available catch is an on-going challenge in 
        the groundfish fishery. The fishery has under-harvested 
        available quotas for a number of species over the last several 
        years. I embrace the goal of fully exploiting available quotas 
        and will continue to support Council and NOAA efforts to help 
        the industry catch the maximum amount of fish allowed across 
        the full range of managed stocks. Continuing evolution of the 
        management program to sectors, as well as conservation 
        engineering solutions, such as net design, will result in 
        improvements in the fishery's ability to catch more of the 
        available fish. Moreover, I firmly believe that under the 
        sector program we can and should look for opportunities to 
        expeditiously open closed areas, which will directly benefit 
        fishermen.

        3. Improve understanding, delivery and use of socio-economic 
        data. We have worked aggressively to understand the complex 
        economic conditions impacting fishermen, and a detailed 
        description of this work is contained in Attachment B.

     We are now completing a more comprehensive annual report 
            on groundfishing for year 2010 that will help us to better 
            understand performance at the vessel ownership level. The 
            report will analyze vessel operating and sector membership 
            cost and information about quota trading to better evaluate 
            changes in fishery and financial performance.

     We are also in support of the Massachusetts Division of 
            Marine Fisheries (DMF) in a study with the University of 
            Massachusetts' School for Marine Science and Technology 
            (SMAST) to better understand the challenges faced by the 
            South Shore fishermen of Sector X. This is the work 
            initiated in response to Governor Patrick's earlier request 
            for a fishery disaster declaration. We anxiously await the 
            results.

     A team of NMFS, DMF, and SMAST is conducting an analysis 
            of how the financial position of vessels was affected by 
            the 2010 transition to catch-share and quotas-based 
            management through a ``break-even analysis'' of the 
            groundfish fishery. The team has compiled vessel profiles 
            using statistical averages for seven gear and vessel size 
            categories. The analysis was completed in mid-September and 
            is currently undergoing peer review. We understand how 
            important this analysis is and have had our economists 
            working closely on this project, have met with this team 
            bi-weekly, and given financial support to ensure its 
            completion. Preliminary analysis shows that while a number 
            of fleet segments performed better in 2010 relative to 
            2009, some segments did perform worse, including some of 
            the smaller boat segments.

        4. Address the concerns about excessive accumulation of fishing 
        privileges. Soon after the sector program was approved by the 
        Council, NOAA identified consolidation as a potentially serious 
        problem and requested the Council ensure the continuation of a 
        diverse fleet. NOAA is working with the New England Council to 
        develop an amendment to the Northeast Multispecies Fishery 
        Management Plan. This amendment would set limits on the amount 
        of fishing privileges that can be accumulated by a particular 
        individual, business or other entity such as a sector. At the 
        Council's request, we published a ``control date'' of April 7, 
        2011, to notify the industry that accumulation of fishing 
        privileges after that date may be treated differently than 
        those accumulated before the date. Establishing a control date 
        also gives the public notice that interested participants 
        should locate and preserve records that substantiate and verify 
        their ownership or control of groundfish permits and other 
        fishing privileges in the fishery.

        5. Encourage development of innovative gear. NOAA has provided 
        funding for other innovations to improve overall groundfish 
        fishery performance, particularly cooperative research to help 
        the fishing industry develop more selective gear and fishing 
        methods to enable fishermen to reduce the bycatch of the more 
        vulnerable stocks, allowing the industry to fully utilize 
        quotas for healthy groundfish stocks. A few examples of the 
        types of research underway include modifying a net to a topless 
        trawl to better target flounder while avoiding cod and haddock 
        and creating several additional escape panel designs to promote 
        escape of certain species or size classes of fish; increasing 
        the size of codend meshes to reduce bycatch of non-cod species 
        while increasing the value of cod captured by targeting larger 
        fish; testing tension sensors deployed within the meshes at the 
        rear of the net to reduce discarding and allowing operators to 
        be more strategic in the capture and marketing of their catch; 
        ongoing testing of fuel consumption to determine the overall 
        profitability of using the modified gear in comparison to 
        unmodified gear; and developing an inexpensive, underwater-
        detaching codend to address the problem of catching large 
        amounts of unwanted fish species. I am committed to supporting 
        such innovative approaches to fishing and to have NOAA assist 
        in the expeditious deployment of these innovations.

    It is worth noting that in addition to managing fisheries, NOAA 
provides a wealth of services to fishermen in New England. NOAA marine 
weather reports and navigation charts provide critical information for 
fishing vessels; NOAA satellites provide data for weather reports and 
receive search and rescue signals; and NOAA scientific research informs 
future management. In summary, implementing a completely new fishery 
management system in New England is challenging and requires close 
attention to design during this early phase, but the system also holds 
promise for increasing flexibility and economic returns for fishermen. 
As I have highlighted in my testimony, the agency is working diligently 
to address issues together with the Council and the industry as they 
arise. While we are making good progress, we acknowledge the system is 
not perfect and we are committed to continually making improvements.
    We are seeing benefits from the transition to sector management as 
catches do not exceed the annual catch limits, and fishing becomes more 
efficient and flexible, all of which contribute to the common goal of 
ecological and economic sustainability of groundfish stocks. NOAA will 
continue to work with the fishing industry and the New England Council 
to adapt these programs as needed, and to ensure open and productive 
communication with the New England fishing community.
    These are extremely challenging economic times for the Nation, and 
that is certainly true for fishermen. There are no easy answers, no 
silver bullets, and I do not come here claiming to have all the 
answers. But one thing I am sure of is the need for all of us to 
continue to work together toward the shared goal of sustainable 
fisheries and good fishing jobs. Sustainable fisheries are about a 
better future--a time when fishermen can rely on fishing as a stable 
income for their families, a time when grandparents and grandkids spend 
a day out on the water fishing, and a time when fishing communities can 
count on fishing to help their local economies recover and thrive. I 
believe fishermen, scientists, environmentalists, processors, chefs, 
government managers, and others can work together toward these shared 
goals.
    Thank you again for the opportunity to discuss NOAA's efforts on 
groundfish management in New England. We are available to answer any 
questions you may have.
                                 ______
                                 
                              Attachment A
The Value of Rebuilding Fisheries Across our Country

    Fishing in all its forms is a $71 billion per year business in the 
United States, and that business is vital to the economies and 
identities of our coastal communities. The economic activity generated 
by fisheries creates 1.4 million full- and part-time jobs, from the 
boat captains and crews, from the oyster farmers to the people in 
processing plants, trucks, seafood markets, and restaurants.\1\
---------------------------------------------------------------------------
    \1\ National Marine Fisheries Service. 2011. Fisheries Economics of 
the United States, 2009. U.S. Dept. Commerce, available at http://
www.st.nmfs.noaa.gov/st5/publication/econ/2009
/FEUS%202009%20ALL.pdf.
---------------------------------------------------------------------------
    NOAA economists estimate that rebuilding all U.S. fish stocks would 
generate an additional $31 billion in sales impacts, support an 
additional 500,000 jobs and increase the revenue fishermen receive at 
the dock by $2.2 billion.\2\ This is more than a 50 percent increase 
from the current annual dockside revenues.
---------------------------------------------------------------------------
    \2\ Internal analysis using the National Marine Fisheries Service 
Commercial Fishing & Seafood Industry Input/Output Model. For 
additional information on this model, see ``The NMFS Commercial Fishing 
& Seafood Industry Input/Output Model.'' available at https://
www.st.nmfs.noaa.gov/documents/Commercial%20Fishing%20IO%20Model.pdf.
---------------------------------------------------------------------------
    We are making gains across the country as individual fisheries have 
recovered, which will increase as we finally bring an end to 
overfishing. One place the benefits of rebuilding are most apparent in 
the New England sea scallop fishery. Since beginning to rebuild in 
1999, the scallop fishery has experienced an average annual growth in 
landings revenue of 19 percent (16 percent after adjusting for 
inflation, i.e., real terms), increasing from $44 million in 1998 to 
$265 million in 2010, a five-fold increase. While there have not been 
ups and downs, overall the fishery has demonstrated sustained growth, 
with landings revenue increasing relative to the previous year in ten 
of the past 12 years. In Massachusetts alone, the commercial harvest of 
sea scallops generated an increase in jobs in the fishing industry as 
well as across the broader state economy, rising from 4,700 jobs in 
1998 to 30,000 in 2010. The rebuilt sea scallop fishery also 
contributes to the economic sustainability of fishing communities. The 
port of New Bedford is the largest port in the country by value than 
any other every year since 2000, in large part due to its sea scallop 
landings. Landings revenue in New Bedford has experienced sustained 
growth since rebuilding of scallops, increasing in nine of the last 
twelve years and 23 percent higher in 2010 relative to 2009.\3\
---------------------------------------------------------------------------
    \3\ National Marine Fisheries Service. 2011. Fisheries of the 
United States, 2010. U.S. Dept. Commerce, available at http://
www.st.nmfs.noaa.gov/st1/fus/fus10/index.html.
---------------------------------------------------------------------------
    More generally, in these challenging economic times, during 2010 
the commercial fishing industry was a strong performer. While 
unemployment rates more than doubled from 4.6 percent in 2007 to 9.6 
percent in 2010, employment and employment impacts generated from 
commercial fishing increased.\4\ In particular, both jobs and job 
impacts generated by the commercial fishing industry increased 16 
percent in 2010 over the previous year and, indeed, were at their 
highest levels since 2006. In addition, commercial fishermen received $ 
4.5 billion for their catch in 2010, a 10 percent increase over 2009 
levels. Overall, the commercial fishing industry--from harvest, through 
the dealer and processing sectors, whole sale sectors, to retail 
outlets (including seafood markets, grocery stores, and restaurants)--
generated $116 billion in sales impacts, contributed $48 billion to 
GNP, and supported 1 million jobs in the fishing industry and across 
the broader economy.\5\
---------------------------------------------------------------------------
    \4\ National unemployment rate data obtained from http://
data.bls.gov/timeseries/LNU04
000000?years_option=all_years&periods_option=specific_periods&periods=An
nual+Data. Commercial fishing industry job and job impact numbers 
obtained from the NMFS Commercial Fishing Economic Impact Model.
    \5\ National Marine Fisheries Service. 2011. Fisheries Economics of 
the United States 2010 (forthcoming).
---------------------------------------------------------------------------
    Catch share programs, and, in particular, established catch share 
programs (those implemented prior to 2007), have been a bright spot for 
U.S. commercial fisheries in recent years. Among the established 
programs that NMFS is able to report on, the majority experienced 
revenue growth from 2007 to 2009, with increases ranging from 8 percent 
to 128 percent, despite the fact that overall landings revenue declined 
nationally during this timeframe. Although we do not have landings 
revenues for most of the catch share programs for 2010 yet, nationally 
commercial fishing landings revenues increased more than 10 percent 
from 2009 to 2010. Revenue is up even as we are rebuilding stocks and 
implementing annual catch limits in all federally-managed fisheries. 
These programs give fishermen the ability to work around weaker stocks 
and then focus on the healthier stocks.
    Marine recreational fishing is also widely recognized as a critical 
economic driver of, and contributor to, local and regional economies, 
as well as the national economy. Take for example, the Gulf of Mexico 
and the Southeast Atlantic regions, where our most recent statistics 
(2009) show combined expenditures on saltwater fishing trips and 
durable fishing equipment of $10.1 billion annually; or the Mid-
Atlantic and Pacific regions where expenditures for these items reach 
$3.5 billion and $2.2 billion respectively, on an annual basis. This 
significant economic activity generates local jobs that cannot be 
outsourced, which support communities large and small in our Nation's 
coastal states, territories, and commonwealths. Businesses directly 
impacted by recreational fishing range from marinas, boat dealers, and 
bait shops to hotels, restaurants and other service-oriented businesses 
in coastal communities. In those communities where it is common for 
recreational fishermen to maintain a second home, saltwater anglers can 
be a factor in the local housing market. Overall, saltwater anglers 
took 74 million fishing trips in 2009, with angler expenditures 
generating $50 billion in sales impacts, contributed $23 billion to 
GNP, and supported over 327,000 jobs across the broader economy.\6\
---------------------------------------------------------------------------
    \6\ Fisheries Economics of the United States, 2009.
---------------------------------------------------------------------------
                                 ______
                                 
                              Attachment B
Socioeconomic Performance of the Northeast Groundfish Fleet in 2010

    Economists and social scientists at the Northeast Fisheries Science 
Center recently reported on fishing year 2010 performance of groundfish 
vessels holding limited access permits--the vessels that rely most on 
groundfish landings and revenues, and that have been the most affected 
by the management measures newly in effect in 2010.
    Some of the news is positive. Both prices and total gross revenues 
from all species landed by groundfish vessels were up for 2010 in 
comparison to 2009. This is despite the fact that annual catch limits, 
required for rebuilding, resulted in a decline in total landings of 
groundfish species for the third year. Average revenues per vessel were 
also up for 2010 in comparison to 2009.
    Massachusetts ports have received about $12 million, approximately 
half of the increased revenues during 2010, of which $6.8 million was 
generated by vessels home ported in Massachusetts, with the remaining 
revenue produced by vessels home ported elsewhere but landing their 
catch in Massachusetts ports. Massachusetts was the only state where 
revenues from groundfish landed there were higher than in 2009.
    Fishermen also captured more higher-valued species and kept more of 
the fish that had historically been thrown overboard. Reducing discards 
and increasing capture of available quota is an important shared goal 
of fishermen, the Council and NOAA. The sector program led to 
substantial reduction in the amount of groundfish discarded because, 
unlike the effort control system under ``Days-at-Sea,'' sectors do not 
limit the amount of fish they may land in a day or on a particular 
trip, and are not permitted to discard legal-sized fish. For example, 
31 percent of Georges Bank yellowtail flounder total catch was 
discarded in 2009 compared to only 9 percent in 2010.
    In addition to the 2010 groundfish vessel performance report 
described above, the agency is working on a number of fronts to improve 
our socioeconomic reporting and analyses of fisheries. We are now 
completing a more comprehensive annual report on Groundfishing Year 
2010 that will help us to better understand performance at the vessel 
ownership level. The report will analyze vessel operating and sector 
membership cost and information about quota trading to better evaluate 
changes in fishery and financial performance. We are also working to 
support the Massachusetts Division of Marine Fisheries (DMF) in a study 
with the University of Massachusetts' School for Marine Science and 
Technology (SMAST) to better understand the challenges faced by the 
South Shore fishermen of Sector X. This is the work initiated in 
response to Governor Patrick's earlier request for a fishery disaster 
declaration.
    A separate ``break-even'' analysis of how the financial position of 
groundfish vessels was affected by the 2010 transition to catch-share 
and quotas-based management is also being conducted in a collaborative 
effort between NMFS, DMF, and SMAST. Vessel profiles using statistical 
averages for seven gear and vessel size categories have been compiled 
and the analysis was completed in mid-September and is currently 
undergoing peer review. We understand how important this analysis is 
and have had our economists working closely on this project, have met 
with this team bi-weekly, and given financial support to ensure its 
completion. Preliminary analysis shows that while a number of fleet 
segments performed better in 2010 relative to 2009, some segments did 
perform worse, including some of the smaller boat segments. NMFS is 
concerned about the impacts on these small boats and will continue to 
work with the Council to understand the root causes of the negative 
outcomes and identify corrective actions.

    Senator Kerry. Thanks very, very much, Dr. Lubchenco. I 
appreciate the directness and brevity of that and it's helpful 
to us.
    And we'll just begin with the question period. I think 
we'll do what, about a six-minute round?
    Let me begin by asking you this. For years, we have been in 
the Congress ready to respond to agricultural challenges around 
the country. And whether there's a drought or a flood or, you 
know, some kind of crop problem of one kind or another, 
billions of dollars have been allocated in emergency assistance 
to various parts of the country.
    I often link our fishing folks to the same industry, to 
farming. They live off the sea, live off the land, but they're 
really farming from the ocean. And when the government steps in 
and creates a dislocation rather than Mother Nature, and people 
are selling their boats or their homes, we have a disaster, an 
economic disaster.
    I know the Governor has submitted data. We've had a number 
of conversations about this. All of us have joined together in 
trying to urge the issuance of a disaster declaration to 
provide holdover assistance to fishing folks so that they can 
look to the day when the stocks are replenished but know that 
they're still going to have a part of that. And we're still, 
you know, locked in on sort of an effort to try to get that.
    We talked the other day about it, and you indicated, I 
think, at that time that the key here is, obviously, we have to 
meet the statutory requirements, we have to meet the standards. 
It's our feeling that we have, and we'd like to get a sense 
from you where we stand with respect to that. And will the 
department support our efforts to secure that disaster 
declaration?
    Dr. Lubchenco. Mr. Chairman, I've long supported providing 
assistance to fishermen when the circumstances warrant doing 
so. After the Governor's request to the secretary to declare a 
disaster for fisheries in the Commonwealth was denied because 
revenues were up, NOAA suggested that the Commonwealth focus on 
those regions that were suffering the most. And we have worked 
hard to assist the Commonwealth in multiple ways to pull 
together the requisite information to support such a request. 
We have not yet received that request at a smaller scale, more 
fine-grained level of analysis, which I believe----
    Senator Kerry. Who do you have to receive that from?
    Dr. Lubchenco. We are expecting to receive that from the 
Governor, which is why we have been working with him and with 
his staff to pull together information about changes in the 
economic status focused on those regions that are the most 
challenged. And once that request is in hand, the secretary 
makes a determination, and it needs to be approved by OMB.
    Senator Kerry. Are they aware of specifically what 
information is needed to sort of complete this, to round the 
circle?
    Dr. Lubchenco. We have made it abundantly clear multiple 
times. The Governor's staff, I think, is well aware of what is 
needed.
    Senator Kerry. So in what--give us a sense of a time frame 
here. What could we anticipate, in your judgment?
    Dr. Lubchenco. The time frame is up to the Governor.
    Senator Kerry. So if they got that to you----
    Dr. Lubchenco. We are waiting on the Governor.
    Senator Kerry. If you get that within a short period of 
time, how quick is your turnaround?
    Dr. Lubchenco. I can assure you that we will do everything 
we can to expedite a secretarial decision, which, as I 
mentioned, needs to be approved by OMB.
    Senator Kerry. Can you give me a ball park on that time 
line?
    Dr. Lubchenco. We could--as far as I'm concerned, we can 
turn it around quickly. I can't speak for the secretary, and I 
can't speak for OMB. But I can assure you we would do 
everything we can to move it as expeditiously as possible. As 
you are well aware, a disaster declaration does not 
automatically come with any funds. Then it would be up to 
Congress.
    Senator Kerry. We have to get the money. Look, we 
understand.
    Dr. Lubchenco. Absolutely.
    Senator Kerry. We know the battle we're in. But we want the 
ability to go get that, and we need the help in order to do it. 
But you underscore--I mean, what you've just said underscores 
part of the problem which I raised in my opening, which is--you 
said the technicality was that revenues were up.
    Dr. Lubchenco. Across the board for the region.
    Senator Kerry. Right. And I accept that. But that 
represents 80 percent of landings to--you know, to the 20 
percent of vessels. So 80 percent of the industry, of the 
vessels, are not seeing revenue up. Eighty percent is a pretty 
high figure to be hurting. And if the measurement--if we're 
stuck in those kinds of technicalities, I think that's the kind 
of thing that just drives everybody crazy.
    Dr. Lubchenco. Senator, I agree with you completely, which 
is why we have gone back to the state, to the Commonwealth, and 
said, ``This is what we need. Give us this so that we can move 
forward.''
    Senator Kerry. But what about the actual allocation? I 
mean, do you have an allocation--this is the catch share, so a 
downstream impact. If catch shares result in so much of the 
landings going to so few of the fleet, something is wrong, is 
it not?
    Dr. Lubchenco. Senator, the data that we have from the last 
year, of the first full year of implementation of the expansion 
of the sector program, shows that the changes that happened in 
that year are a continuation of changes that have been going on 
for a long time. If you look at changes from the year 2001 to 
2009, landings dropped by 40 percent, revenues fell by over 
one-half, and the number of vessels dwindled----
    Senator Kerry. In what--in the whole period?
    Dr. Lubchenco. From 2001 to 2009, landings dropped by 
nearly 40 percent, revenues fell by over one-half, and number 
of vessels dwindled to half their previous levels. So these 
changes have been ongoing for some time.
    Senator Kerry. Is that broken down? Could you get that to 
us on a year-by-year----
    Dr. Lubchenco. I would be happy to give you those data.
    Senator Kerry. On a year-by-year?
    Dr. Lubchenco. We have those by year.
    [The information referred to follows:]

    Provide year-by-year breakdown of the downward trends mentioned in 
Dr. Lubchenco's testimony in regard to landings, revenue, and number of 
vessels from 2001-2009.
    Data compiled and presented in the table below are taken from the 
Environmental Assessment prepared for Framework 45 to the Northeast 
Multispecies Fishery Management Plan.

                               Groundfish landed weight (lbs.), revenues (1999 dollars), and active permits; FY 2001-2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    Data                         2001        2002        2003        2004        2005        2006        2007        2008        2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Weight                                       103,418,293  83,477,219  81,023,479  77,281,552  64,269,318  48,387,002  58,924,437  66,644,624  63,477,001
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars                                       98,637,293  95,261,434  80,814,800  71,301,257  72,226,979  62,517,603  64,483,613  62,488,957  57,676,221
--------------------------------------------------------------------------------------------------------------------------------------------------------
Active                                             1,314       1,137       1,070         954         850         785         727         686         633
Permits
--------------------------------------------------------------------------------------------------------------------------------------------------------
From Tables 55 and 58 in the Environmental Assessment, Regulatory Impact Review, Initial Regulatory Flexibility Analysis for Framework 45, prepared by
  the New England Fishery Management Council in consultation with the Mid Atlantic Fishery Management Council and the National Marine Fisheries Service;
  January 21, 2011.

    Below is a graphic of the relative trends in groundfish landings, 
revenues and active permits between 2001 and 2010, where the values in 
2001 are set at a baseline of 1.0. The values used to calculate trends 
between 2001 and 2009 were taken from Tables 55 and 58 in the 
Environmental Assessment, Regulatory Impact Review, Initial Regulatory 
Flexibility Analysis for Framework 45 (New England Fishery Management 
Council in consultation with the Mid-Atlantic Fishery Management 
Council and the National Marine Fisheries Service; January 21, 2011). 
Trends between 2009 and 2010 were calculated from Tables 1 and 2 in the 
Report for Fishing Year 2010 on the Performance of the Northeast 
Multispecies Groundfish Fishery (May 2010--April 2011) \1\ (Kitts et 
al., 2011).
---------------------------------------------------------------------------
    \1\ The absolute numbers generated by the Framework 45, and 2010 
Year-end analyses cannot be directly compared due to a number of 
different characteristics of the analyses, including but not limited 
to: corrections/updates to the database between the analyses, slight 
differences in definitions of active permits, and revenues adjusted for 
inflation vs. nominal value. Additionally, Kitts et al., (2011) 
addressed missing data for all 4 years analyzed (2007-2010), such as 
vessel trip reports that did not have accompanying dealer data, by 
imputing data based on similar trips for that vessel. Relative trends 
between the years can be compared, however, because within each 
analysis the data were treated the same between years.


    Reference: Kitts A, Bing-Sawyer E, McPherson M, Olson J, Walden J. 
2011. Report for Fishing Year 2010 on the Performance of the Northeast 
Multispecies (Groundfish) Fishery (May 2010-April 2011). U.S. Dept 
---------------------------------------------------------------------------
Commer, Northeast Fish Sci Cent Ref Doc. 11-12; 44 p.

    Dr. Lubchenco. And so what we are seeing in the last year 
is, not surprisingly, a continuation of some of those changes. 
But there are also changes that are positive, specifically, 
that despite lower catch limits because of the requirements of 
Magnuson-Stevens, the changes were not as drastic as we would 
have predicted had they continued under the old Days at Sea 
program.
    So I believe we are beginning to turn the corner. It's not 
happening overnight. It won't happen overnight. And, therefore, 
the importance of addressing those sectors of the fishery that 
are not doing well is paramount. And we would be delighted to 
receive the information that we need to document the declines, 
to have the secretary declare a disaster.
    Senator Kerry. Thank you.
    Senator Brown?
    Senator Brown. Thank you, Mr. Chairman.
    Well, as you noted, and as you noted, Doctor, the decline 
of the New England fishing fleet from 2007 to 2010 is 17 
percent. One-third of the vessels are inactive by--declared 
inactive by NOAA in 2010; a 15 percent decline in crew 
positions; a 46 percent decline in groundfish trips from 2007 
to 2010.
    Since I've been working on this issue, I'll tell you what--
I've never seen--and I know Congressman Frank has been working 
on this a lot longer than I have--a complete lack of trust 
between any type of individual business and the Federal 
Government. It's, quite frankly, I think, beyond repair.
    And I know that we had a hearing back in May, and, you 
know, your office--we had the hearing in June. In May, we asked 
for documents. No documents were provided until a couple of 
days before, and that was about 15 percent. Most were outdated. 
And NOAA and your office took the last day of the QFR period to 
return a few more documents. In late August, NOAA agreed to 
provide our staff an unredacted copy of the special master 
report. It was still redacted. So 5 months later, we still only 
have 50 percent of the documents needed to address a lot of our 
questions--Senator Carper's and my questions from the hearing.
    And so, once again, the establishment--a reestablishment of 
trust and transparency--am I going to be getting the rest of 
the documents that we requested from our hearing any time soon?
    Dr. Lubchenco. Senator, it's my understanding that the 
General Counsel for the department is working to set up an 
appointment with you to brief you on the information that we 
have.
    Senator Brown. Yes, but that's not the request. The request 
was to have the documents for the hearing, and it's 5 months 
later and we still don't have them.
    Dr. Lubchenco. Senator, he will be discussing that very 
issue with you. That's not in my authority to do.
    Senator Brown. OK. I'll look forward to having that 
meeting. When Mr. Schwaab was here at the last hearing in lieu 
of you attending, I asked the question, you know, ``What does 
it take to get fired at NOAA?'' There was a shredding party; we 
know of the abuses at the--of New England fishermen by NOAA; 
mismanagement of asset forfeiture fund; and a $3,000 luxury 
yacht that was bought with fishermen's fines. And no one has 
really been held accountable, and those who broke that public 
trust are still working for NOAA. And since our hearing, have 
any disciplinary actions for these problems taken place?
    Dr. Lubchenco. Senator, there are two laws that--under 
which we operate to deal with disciplinary actions when 
warranted. One is the Federal Personnel Law, and it describes 
two ways of dealing with issues. One is performance based. One 
is conduct related. The second law that is relevant is the 
Privacy Act. And because of that Act, it's--I cannot talk 
publicly about disciplinary actions that have been taken.
    I can tell you that the people who were involved have been 
held accountable and that they have been dealt with to the 
extent possible under the authorities under which we operate.
    Senator Brown. Is that something the Counsel will be able 
to share with us as well?
    Dr. Lubchenco. What counsel?
    Senator Brown. The attorney that you were referring to 
earlier.
    Dr. Lubchenco. Oh. That's up to him to describe. I don't 
know what constrains what he can do. I'm telling you what 
constrains me.
    Senator Brown. I know that Attorney General Coakley made a 
9/28 request for the documents related to these personnel 
decisions. Will you be providing those to her?
    Dr. Lubchenco. Eric, can you answer that?
    Mr. Schwaab. Thank you. So, Senator, as you indicated, that 
was just recently that we received that request. We are 
reviewing that. I think many of the same constraints that have 
challenged our response on some of these personnel related 
issues to date will also be in play as we review an appropriate 
response.
    Senator Brown. The fishing disaster declaration must be 80 
percent revenue decrease for fishing failure, and that's 
internal NOAA policy guidance. It's not law or regulation. 
What's the basis for that 80 percent figure?
    Dr. Lubchenco. Senator, that is the determination--the 
policy that was agreed upon or decided by the secretary with 
OMB's concurrence. It's the policy that we operate under to 
have uniform criteria across all different parts of the country 
so that there can be some uniformity to making decisions 
instead of just an ad hoc decision, yes here, no there, 
whatever.
    Senator Brown. And I know you've had meetings with NGO's in 
Washington and NOAA's leadership team has met with those folks 
to discuss fisheries policy. Have you held, or are you planning 
to hold meetings of this sort with any industry representatives 
in New England or in Massachusetts, in particular?
    Dr. Lubchenco. Senator, after a report was issued about the 
meeting that I had with environmental groups on this issue, I 
asked my staff to go back through all of my records and pull 
together information about how many times I've met with 
fishermen and fishing groups versus environmental groups or 
individuals. And in the last year and a half, which is as far 
back as they got, I've spent 3 hours with environmental groups 
on fishing issues, and I've spent 40 hours with fishermen or 
fishing groups on fishing issues. So I think the story is 
actually quite the opposite----
    Senator Brown. I wasn't aware of a story. I was just 
wondering if you're going to be meeting with these folks and 
continue to meet with them, because as I said earlier, there's 
a complete lack of trust between your agency and the fishermen 
here in Massachusetts, not only based on the finding issues 
that the special master put out, but, you know, the lack of 
desire to take into consideration any additional science on the 
catch share--maybe modifications in Magnuson-Stevens as well.
    Dr. Lubchenco. Senator, I said when I first--in fact, in my 
very first hearing before the Senate Commerce Committee, I 
indicated that I thought the relationship that we had with 
fishermen in New England was pretty dysfunctional, which is why 
I invited the review by the special--by the Inspector General, 
and which is why we have requested a management review and a 
number of other things. This sounds like Twilight Zone or 
something here.
    So I think the point is simply that I take the relationship 
with fishermen in the region----
    Senator Kerry. I didn't tell you, but this place is haunted 
today.
    [Laughter.]
    Dr. Lubchenco. I take that relationship very, very 
seriously, and we have been acting very diligently to turn this 
relationship around and have implemented a large number of 
actions to do exactly that. I think that we are in a better 
place than we were, but we have a long way to go. I believe 
that we should be working together collaboratively with 
fishermen.
    And much of the actions that we have taken, especially with 
the expansion of the sector program, have been explicitly 
designed to simplify regulations, to get rid of unduly 
burdensome regulations, to give fishermen more flexibility and 
more control over their businesses. And that, we are seeing 
happen in just this 1 year in the expanded sector program.
    Many more fishermen are taking advantage of these 
opportunities, are much more in control of their businesses. I 
think that we are beginning to see the light at the end of the 
tunnel, but it's a very long tunnel. And I am committed to 
understanding why some portions of the groundfish fishery are 
doing better than others. We are collecting all the information 
that we can to better understand that, and we are committed to 
helping to make changes in that fishery so that it works for as 
many fishermen as possible.
    Senator Kerry. Thank you.
    Can you all hear back there? You can. Good. All right. 
Everybody keep their voice up.
    Senator Begich?

                STATEMENT OF HON. MARK BEGICH, 
                    U.S. SENATOR FROM ALASKA

    Senator Begich. Thank you very much.
    Dr. Lubchenco, thank you very much for also being here for 
today's hearing. Let me--I mean, I don't have to tell you from 
Alaska's perspective, you know, we have, as Senator Kerry said, 
an enormous relationship to the fishing industry across the 
country. We have very abundant, sustainable, and profitable 
fisheries in Alaska.
    About half the fish caught in this country come from 
Alaska. But that didn't happen overnight. It didn't happen 
easily. It was through a lot of shared sacrifice and a lot of 
issues. And why this intrigues me a little bit is because the 
struggle that the eastern seaboard is going through, which 
Alaska probably went through in the 1970s, is what I would 
describe. It wasn't easy. We walked through a lot, and I would 
say to Senator Brown back then we had a lack of NOAA and 
Federal agencies.
    But I wouldn't say it is beyond repair, because I can tell 
you I've been to many fishermen meetings. And back in those 
days, I was much, much younger, but heard plenty about them, 
and a lot of people thought it was beyond repair back then. But 
it was time that worked out the problems, but also 
communication and making sure that the agencies on a regular 
basis--and I appreciate the quantity of hours you spent. 
Sometimes quantity of hours is not as important as quality of 
time.
    And so as we experienced in one hour down in Halibut Cove 
over a small little issue over--down in Homer over halibut 
charter issues, that time you spent there, I think, was very 
valuable, and the hour before with commercial fishermen was 
very valuable.
    Let me ask you, if I can--because I recognize some of the 
challenges that are here in the New England area. But let me 
ask you some specific--kind of where you're headed. With the 
report that was done, the New England Fisheries Management 
Review, what is--there are several recommendations that were in 
that report.
    As you move through that, how are you communicating back to 
the fishermen of this area? I guess that's--because in order to 
create that trust, that long-term trust--it is about 
communicating, at times more than you would have ever 
anticipated, just because of the way the industry works and the 
small boat operators to large boat operators. But how are you 
taking those recommendations that you've done in that report--
and there's several on resources, on a variety of things. How 
are you communicating those back?
    Dr. Lubchenco. Senator, thank you again for the opportunity 
to be with you in Alaska with fishermen----
    Senator Begich. You say that with such a smile.
    Dr. Lubchenco. I did actually--you know, that's--an 
important part of my job is to learn----
    Senator Begich. You did a good job.
    Dr. Lubchenco.--and listen by talking to the people who are 
on the ground, who are affected by our decisions, understand 
what's working and what isn't working. We heard an ear full, 
and, you know, that's important, and that flags key issues for 
us. It's equally important that we hear what's working, not 
just what isn't working, and we got both of those.
    Senator Begich. Right.
    Dr. Lubchenco. But relative to the management report, this 
report was yet another indication of our commitment to this 
region to better understand what's working and what isn't 
working. Mr. Schwaab initiated the request to an independent, 
neutral, third party to give us a very hard-hitting assessment 
of what's working and what isn't with respect to management.
    The report flagged a large number of issues that are very 
serious with which we have already begun dealing. And one of 
them you hit squarely on the head, which is the need to 
significantly improve communications. We have initiated a 
number of efforts that I'm going to ask Mr. Schwaab to describe 
very briefly in terms of the communication aspects of our 
response to this report.
    But I want to simply flag the fact that there were two 
things: one, that we are making concerted efforts to improve 
communications in the region, to clarify roles and 
responsibilities, to have our regulations be in plain English 
and to simplify them. But if you would like to describe some of 
those----
    Senator Begich. Go ahead, Eric. I'm watching my time here. 
So, Eric?
    Mr. Schwaab. Thank you, Senator. Just then very quickly, 
one of the points that was made very clearly was that 
stakeholders, fishermen, others from industry did not know 
where to go for communications around various issues. So we 
stood up a unified communications team under the auspices of 
our regional office, and that team has worked much more 
aggressively to not only implement some of the steps that Dr. 
Lubchenco just spoke to, but also to provide a more cohesive 
and more transparent way to reach out and be available to the 
industry.
    Senator Begich. Let me try this, if you could. To help me 
and maybe other members here, could you put together a 
schematic that shows me the tools you're using to communicate, 
how often you're communicating, and then of the recommendations 
in that report, what exactly--and time tables--you're accepting 
or doing on those recommendations? Can you do that for the 
committee?
    Mr. Schwaab. Yes, absolutely.
    Senator Begich. OK.
    [The information referred to follows:]

    Provide (a) a Schematic of tools used to communicate with 
fishermen, (b) information on what, when, and how we are improving 
communications including (c) how NOAA is communicating actions to 
implement the management review recommendations.
    Over the past 2 years, NMFS expanded outreach and communication 
initiatives. to facilitate the transition of multispecies fishery 
management to the sector allocation program (Amendment 16 to the 
Multispecies Fishery Management Plan). The ``Review of the New England 
Fishery Management Process'' (Management Review) was issued in April, 
2011 at a time when NMFS's communication efforts had already improved. 
Outreach and communication initiatives continue to move forward, now 
informed by the findings and specific recommendations of the Management 
Review. This is an adaptive process and will continue to change as 
processes are identified, tested and evaluated as successful. Some of 
these tools were specifically developed for implementation of Amendment 
16. However, they are now available and applied to other NMFS programs, 
as appropriate.
    (a) Schematic of tools used to communicate with fishermen (items 
identified are specific to New England per the hearing subject):

------------------------------------------------------------------------
  Type on information                               Tools available and
      communicated               By whom                 examples
------------------------------------------------------------------------
Regulatory Development
------------------------------------------------------------------------
Notice of meetings       New England and Mid-     Federal Register, e-
 (Advisory Panels,        Atlantic Fishery         mail lists, website
 Committee Meetings,      Management Councils,     postings, mailings,
 public hearings,         or Northeast Regional    press releases.
 Council Meetings)        Office (Regional
 associated with          Office) for
 development of           Secretarial and
 regulatory actions for   protected species
 fisheries managed by     actions
 the Council.
------------------------------------------------------------------------
Requests for comments    Northeast Regional       Federal Register, e-
 on regulatory analysis   Office                   mail lists, press
 documents and proposed                            releases, website
 rules.                                            postings, mailings.
------------------------------------------------------------------------
New England Council      New England Fishery      Live streaming video,
 Meeting presentations    Management Council       website with links to
 and discussions                                   background and
                                                   discussion documents.
------------------------------------------------------------------------
Public hearings,         New England Fishery      Federal Register, e-
 scoping meetings         Management Council;      mail lists, press
                          Northeast Regional       releases, website
                          Office                   postings, mailings,
                                                   comments posted on
                                                   website.
------------------------------------------------------------------------
Notification of Final    Northeast Regional       Permit Holder
 Rules/Regulatory         Office                   Bulletins (formerly
 Actions                                           called small entity
                                                   compliance guides)
                                                   distributed by mail,
                                                   e-mail lists, posted
                                                   on Northeast Regional
                                                   Office website, and
                                                   press releases. As
                                                   needed, includes
                                                   compliance guides/
                                                   fact sheets.
------------------------------------------------------------------------
Implementation support and compliance enhancement outreach
------------------------------------------------------------------------
Quota monitoring         Northeast Regional       Fish-On-Line--allows
                          Office                   fishermen to track
                                                   landings per vessel
                                                   trip reports and
                                                   dealer reports.
                                                  Sector Information
                                                   Management Module to
                                                   allow sector managers
                                                   to monitor ACE
                                                   transfers, sector
                                                   allocation usage.
                                                  Website access to
                                                   quota monitoring
                                                   information.
------------------------------------------------------------------------
Data Review              Northeast Regional       Targeted data review
                          Office, Northeast        sessions with sector
                          Fisheries Science        managers.
                          Center (Science
                          Center)
------------------------------------------------------------------------
Targeted audience        Northeast Regional       Targeted telephone
 informational support    Office                   ``town hall''
                                                   meetings by NMFS
                                                   leadership and staff.
                                                  Sector member
                                                   meetings.
                                                  Sector manager
                                                   workshops.
                                                  Monthly Sector Manager
                                                   Calls.
------------------------------------------------------------------------
Implementation           Northeast Regional       Public Informational
 procedures               Office                   Meetings. Examples:
                                                  Public meetings held
                                                   for the May 1, 2010,
                                                   sector
                                                   implementation;
                                                  Protected Resources
                                                   gear modification
                                                   training workshops.
------------------------------------------------------------------------
Transition training for  Northeast Regional       Examples: Training
 fishermen, dealers,      Office                   workshops on
 sector managers                                   monitoring and
                                                   reporting for sector
                                                   managers for
                                                   implementation of
                                                   Amendment 16 to the
                                                   Multispecies FMP;
                                                  Dealer meetings with
                                                   port agents regarding
                                                   new reporting
                                                   requirements;
                                                  Dockside training for
                                                   protected species
                                                   gear modifications
                                                   (eg., pingers for
                                                   porpoise); and,
                                                   summary outreach
                                                   guides.
------------------------------------------------------------------------
Operational training     Northeast Regional       Training for sector
                          Office, Office of Law    managers and
                          Enforcement              fishermen:
                                                  Electronic Vessel Trip
                                                   Reporting (eVTR)
                                                   training workshops,
                                                   webinar, website, and
                                                   podcasts;
                                                  Vessel Monitoring
                                                   System training,
                                                   including onsite
                                                   support for fishermen
                                                   and port agents;
                                                   webinar for sector
                                                   managers.
                                                  Written operational
                                                   guidelines. Examples:
                                                  Checklist developed
                                                   for captains on
                                                   regulatory
                                                   requirements such as
                                                   monitoring and
                                                   reporting for 2010
                                                   and 2011 fishing
                                                   years;
                                                  Electronic Vessel Trip
                                                   Reporting (eVTR)
                                                   operational summary
                                                   guidance;
                                                  Operational guidelines
                                                   for protected
                                                   resources (marine
                                                   mammals and
                                                   endangered species)
                                                   regulations;
                                                  Annual protected
                                                   resources information
                                                   sheet summarizing
                                                   fishery-specific
                                                   requirements issued
                                                   to permit holders.
------------------------------------------------------------------------
Frequently Asked         Northeast Regional       Question and Answer
 Questions                Office, Northeast        sheets for
                          Fisheries Science        complicated or
                          Center                   controversial
                                                   regulatory actions,
                                                   scientific reports,
                                                   or other NMFS
                                                   products posted on
                                                   Northeast Regional
                                                   Office website.
                                                  Question and Answer
                                                   inserts prepared for
                                                   industry publications
------------------------------------------------------------------------
Specific Information Requests
------------------------------------------------------------------------
Permit histories,        Northeast Regional       Designated fisheries
 vessel upgrade           Office                   staff answer
 information, quota                                questions for sector
 monitoring                                        managers.
 information,                                     Developing designated
 regulatory                                        staff telephone list
 requirements                                      for all Northeast
                                                   Regional Office
                                                   actions and programs.
------------------------------------------------------------------------
General Information Regarding NMFS Programs
------------------------------------------------------------------------
Descriptions of          Northeast Regional       Website.
 programs, scientific     Office, Northeast       Industry outreach
 and regulatory           Fisheries Science        events (e.g., New
 documents, educational   Center                   Bedford Working
 materials, outreach                               Waterfront Festival,
 notices, materials,                               Maine Fishermen's
 compliance guides                                 Forum).
------------------------------------------------------------------------
Timely program           Northeast Regional       The NOAA Fisheries
 background               Office, Northeast        Navigator, a bi-
 information, program     Fisheries Science        monthly insert into
 and regulatory           Center                   Commercial Fisheries
 context, and notices                              News.
 of ongoing or upcoming
 issues
------------------------------------------------------------------------

    (b) What, when, and how is NOAA improving communications
    Improving communications and relationships with industry is a 
priority, and we continue to actively find ways to develop a more 
consistent and focused message. We formed a Communications Team and 
developed an updated communications plan to support all Regional Office 
program staff who work with industry and the public, and promote 
outreach and collaboration between the Northeast Regional Office, 
Northeast Fisheries Science Center, New England Fishery Management 
Council and Office of Law Enforcement. Additional specific improvements 
are listed below:

   Fish-On-Line is a web portal that was introduced in early 
        2010 to allow fishermen holding a Federal fishing permit to 
        access their vessel data and to track their landings 
        information, including information reported by seafood dealers. 
        Missing information or inaccuracies in the data submitted can 
        quickly be identified for correction. In September 2011, a 
        ``News'' feature was added to Fish-On-Line to provide an 
        additional directed mode of communication to vessel owners.

   Customer Service Training--February 2011. Over 60 Northeast 
        Regional Office and Office of Law Enforcement staff were 
        trained in best practices for communicating with stakeholders.

   Plain Language Campaign--Launched in the spring of 2011, the 
        Plain Language campaign is geared toward developing notices and 
        operational guidelines for specific audiences that provide 
        necessary information up front, rather than repeating technical 
        and regulatory language in correspondence. Documents are more 
        clear, concise, and specific for intended recipients. In 
        September 2011, plain language training was provided to over 70 
        people from the Regional Office, General Counsel for Fisheries, 
        New England and Mid-Atlantic Council staffs, and the Office of 
        Law Enforcement. The initiative's results can be seen in recent 
        permit holder bulletins and other outreach materials.

   We have hired a former commercial fisherman in New England 
        to serve as our first formal compliance liaison in the country. 
        He is working directly with the fishing industry in a non-
        enforcement capacity to improve communications and ensure all 
        can comply with needed conservation measures.

   An outreach survey of Sector Managers was conducted in 
        August 2011 to get their opinion on outreach tools and methods 
        that NMFS uses to distribute information and obtain feedback 
        from Sector Managers. Best practices for communication with 
        sector managers are being followed based on their response, 
        which supported a tailored approach to outreach and assistance, 
        including in-person and live venues such as workshops, monthly 
        conference calls, and one on one meetings with Northeast 
        Regional Office staff, as well as Sector Vessel Operating Guide 
        and Permit Holder Bulletins. For sector vessels, Sector 
        Managers believed that Fish-On-Line and brief messages sent via 
        the Vessel Monitoring Systems were the most efficient methods 
        of information distribution to fishermen.

   Evaluation of communication tools--During September and 
        October, 2011, we are informally discussing with fishermen 
        their preferred format and medium for receiving information on 
        regulations, the supporting science, notices of meetings, and 
        outreach and training materials. Preliminary industry response 
        suggests that fishermen find the NOAA Fisheries Navigator, a 
        bi-monthly insert in a trade publication, informative and 
        accessible. The development and distribution of new outreach 
        materials will be immediately adapted in response to feedback 
        from fishermen.

   A Website Working Group in the Northeast Regional Office is 
        being established to redesign the Regional Office website to 
        make posted information more understandable and easier to find. 
        New webpages are being designed for posting as soon as NMFS' 
        new website development system has been launched. In September, 
        2011, Northeast Regional Office staff were trained in the new 
        system in anticipation of its availability in the near future.

   Northeast Regional Office staff are developing processes to 
        reduce the number of duplicate letters sent to industry. A 
        mechanism for determining individual preferences is being 
        considered for vessels with multiple owners, owners with 
        multiple vessels, and permit holders with multiple addresses.

   A web page/pamphlet to direct fishermen and other 
        stakeholders to specific points of contact within the Regional 
        Office is being developed. The information should reduce the 
        number of times that calls are transferred before the 
        appropriate staff person is reached, making it easier for 
        people to get answers to specific questions.

   A method to document data requests and provide an 
        approximate time-frame for a response was developed for use 
        starting in late October, 2011.

    (c) NMFS Communication specific to implementation of the Management 
Review Recommendations.
    Week of April 26, 2011: New England Fishery Management Council 
meeting in Mystic, CT: This meeting kicked off a series of public 
meetings from Connecticut to Maine where NOAA's Assistant Administrator 
for Fisheries, Eric Schwaab, announced the specific steps the agency 
was taking immediately in response to the Management Review while a 
longer term plan was under development. The Review was made available 
for an informal 30-day public comment period, and the 23 comments were 
also posted online. A press release announcing the Management Review's 
availability and requesting comments was issued on the same day. 
Ongoing and short term actions identified by Eric Schwaab included 
commitments and procedures to:

   Improve collaboration with partners on science, cooperative 
        research with industry and reviews of science programs: 
        Collaborate with research and academic institutions and 
        fishermen to maximize research funding to address critical 
        questions facing New England fisheries. Prior to making FY12 
        research funding decisions, conduct an expedited mid-term 
        review of the 2009 Strategic Plan for Cooperative Research 
        involving all regional cooperating agencies and academic 
        institutions.

   Improve communications efforts: Enhance and integrate 
        communications staff at the Northeast Regional Office. Simplify 
        public information explaining NMFS programs and regulatory 
        actions through tools such as the Navigator. Investigate 
        opportunities for direct communication with fishermen and other 
        constituents such as Fisheries Information Centers and bi-
        weekly sector manager calls.

   Clarify roles and responsibilities of NMFS and the Councils: 
        Update the regional office and science center operating 
        agreement to reflect report recommendations. Through the 
        Northeast Region Coordinating Council (made up of the region's 
        fisheries executives from the New England and Mid-Atlantic 
        Councils, the Atlantic States Marine Fisheries Commission, 
        NOAA's Northeast Regional Administrator and Northeast Fisheries 
        Science Center Director) complete efforts to clarify NOAA and 
        Council functions and staff roles through new operating 
        agreements.

   Improve data management systems: Integrate and consolidate 
        fishery dependent reporting/collection systems and the 
        underlying data management systems within the region. Working 
        initially with voluntary multispecies sector participants to 
        transition from paper to electronic logbooks to speed data 
        processing, and reduce errors.

    April 28, 2011: Stakeholder Town Hall Conference Call: NOAA's 
Assistant Administrator for Fisheries, Eric Schwaab, presented the same 
information discussed at the New England Fishery Management Council 
Meeting, along with Preston Pate, the primary author of the Management 
Review, on a Town-Hall style conference call.The call included a 
question and answer period.
    June 23, 2011 Press Release: The NMFS Northeast Regional 
Administrator, Pat Kurkul, and the Acting Director of the Northeast 
Fisheries Science Center, Frank Almeida, issued a joint press release 
reviewing and lauding the New England Fishery Management Council's 
response to the Management Review and identifying NMFS ongoing efforts 
to respond to the Review.
    June 23, 2011 New England Fishery Management Council meeting in 
Portland, Maine: Regional Administrator Pat Kurkul presented the 
Northeast Region's preliminary response to the four priority areas, 
listed above, identified in the Management Review. An overview of the 
developing regional work plan was discussed.
    September 23, 2011, New England Fishery Management Council meeting 
in Danvers, MA: New England Fishery Management Council staff presented 
a straw man Communications and Outreach proposal to the Council and 
identified points supported by the Council Executive Committee. 
Regional Administrator, Pat Kurkul, presented an overview of the 
integrated Regional Office and Northeast Science Center Draft Work Plan 
responding to the Management Report. The Work Plan was developed by the 
Northeast Regional Office with input from the Northeast Fisheries 
Science Center and the New England Fishery Management Council. In this 
Work Plan, actions are identified to simplify the management process, 
improve communications with the public, broaden collaboration with 
stakeholders, consolidate fishery data management and improve 
communication and collaboration between staff at the Northeast Regional 
Office, Northeast Fisheries Science Center and New England Fishery 
Management Council. The Draft Work Plan is posted on the Northeast 
Regional Office website and was distributed with a cover letter by Pat 
Kurkul at the New England Fishery Management Council Meeting.
                                 ______
                                 
    Provide a detailed summary of how NOAA is implementing the 
management review's recommendations.
NMFS Response to the New England Management Review
    Over the past several months, NMFS and the New England Fishery 
Management Council have been working to address the priority 
recommendations identified by the Management Review: (1) simplify 
governance; (2) simplify communications; (3) improve science 
collaboration; and (4) maximize collaboration. As part of our response 
to the review, we have made significant progress toward addressing 
several of the concerns raised by the review, as summarized below, and 
are tracking progress through a detailed action plan. In addition, 
based on requests for more robust follow up and stakeholder involvement 
in the reforms, NOAA will contract with an independent group to 
initiate a participatory evaluation process of the management reforms 
underway.
    Simplify Governance--The report states that the fishery management 
process can be difficult and that in some cases regulations have become 
overly complicated and redundant. To address these concerns, NMFS 
developed a draft Operating Agreement with the New England Fishery 
Management Council and NOAA's Northeast Office of General Counsel, to 
clarify roles and responsibilities, strengthen collaboration, simplify 
the governance structure and process, and highlight opportunities for 
public input. We are also exploring ways to simplify/clarify 
regulations through a trial ``plain language approach'' for rulemaking 
and by addressing regulations that are known to need greater clarity.
    Simplify Communications--NMFS has made improving our communications 
and relations with industry a top priority. Please see the response to 
question 1(b) above for further details.
    Improve Science Collaboration--This category covers a range of 
topics such as analysis of our data systems, cooperative research, 
stock assessments, and social sciences and economics. In response to 
data challenges, NMFS requested a data system review which began on 
September 26, 2011 to find ways to improve and streamline data 
management and collection. This review should be completed by the end 
of November, at which time we will assess recommendations and begin 
making improvements to our systems. We are also seeking ways to improve 
the accuracy of vessel trip reports and speed data processing. To 
further this goal, in June we made electronic vessel trip reports 
available on a voluntary basis to members of the groundfish industry.
    NMFS is working with stakeholders to ensure that our Cooperative 
Research Program is responsive to industry, management, and scientific 
priorities. In September, we completed a series of outreach meetings 
with fishermen and scientists to gather input and improve the program's 
transparency. By the end of November we will update the program website 
to provide more information to stakeholders on funded projects and 
increase the transparency in the funding process. To improve stock 
assessments, we are now transitioning to a new assessment review 
process that has already been approved by regional leadership 
(including both the New England and Mid-Atlantic Fishery Management 
Councils). This process will take advantage of the expertise available 
in the Council Scientific and Statistical Committees and result in a 
more efficient and less redundant review system. We will also ensure 
that NMFS social scientists and economists are an integral part of the 
fishery management process by engaging them in the earliest discussions 
of proposed management actions. We are conducting new and expanded 
analyses of the impacts of regulations on regional fisheries and 
coastal communities and staff participated in a National Fishery 
Management Council Scientific and Statistical Committee Workshop during 
October 4-6, where one focus was on improving the integration of social 
science with the Council process.
    Maximize Collaboration (New England Fishery Management Council 
Lead). The Council is making progress on its pledge to take 
responsibility for findings in the report applicable to their process. 
Issues to be tackled by the Council include redesigning Council 
meetings to be more open and collaborative and creating a performance 
management system to track the progress of Council decisions and 
capture lessons learned.

    Mr. Schwaab. And if I could just quickly add one specific 
enforcement, as we've shifted to a compliance strategy, one of 
the breakthrough strategies we've employed here is the hiring 
of a compliance liaison within our office of law enforcement in 
the region to be available up front for fishermen.
    Senator Begich. Very good. Let me ask you on your stock 
assessments issue--I noticed in your testimony you had some 
challenges that--I know in Alaska, we--you know, if it's 20 or 
22--I can't remember the exact amount of stocks that you assess 
every single year. What's the stock assessment here--frequency 
on the different stocks? How often do you--because, as you 
know, without that proper stock assessment, you're not going to 
have the best numbers, and you'll take the lowest number in 
order to be more conservative in the analysis. So help me 
understand. On the stocks that are analyzed here in New 
England, how often do you do the assessments?
    Mr. Schwaab. Thank you, Senator. We're not on the annual 
cycle that they are in Alaska. We do have a relatively good 
picture to paint here in the region--generally, a two to three-
year cycle for the most important stocks. One of the things 
that we have been working on through the regional office--
through the science center here is a streamlined assessment 
process that will allow, for example, the SSC for the council 
to be engaged up front so that we can move through more quickly 
for some of the higher priority stocks.
    Senator Begich. So when you--if I can just take one more 
second.
    Senator Kerry. Please take extra time.
    Senator Begich. If you--in your comments again, under 
Challenges Remaining, you mention in the fiscal 2012 budget 
this is one of the challenges. So can you again prepare for us 
here--what are those specific requests that are necessary to 
have the frequency of the stock assessment or the additional 
accuracy that you need?
    Again, I think the reason we've been successful--again, I 
think it's 20 or 22 different stocks that you assess every 
year. That is huge, and that's why, you know, we take a more--
the halibut is the big challenge right now. I'm sure we'll have 
another challenge tomorrow in Alaska. But that helps us really 
understand, and it brings another trust level to the fishermen 
that's critical.
    So can you detail that out at some--obviously, we're in the 
middle of that budgetary process now. Could you prepare that, 
either one of you or both of you, for the Committee?
    Dr. Lubchenco. Senator, we'd be happy to do that. I would 
note that there are 20 stocks just in the groundfish fishery in 
New England, and then there are a lot of other stocks that are 
fished. So it is very complex. It is also, as I think you're 
alluding to, resource dependent. And so thank you for that 
invitation, and we will be happy to comply.
    [The information referred to follows:]

    Provide information on the amount of resources required to do stock 
assessments in the Northeast at an ideal frequency.
    NOAA has developed a revised approach for producing stock 
assessments that we have begun transitioning to. The new approach aims 
to provide managers the information to adjust annual or biennial catch 
limits in response to changing stock conditions, so industry can take 
advantage of healthy stocks faster and not overfish stocks.
    Thanks to additional funds provided by Congress, over the last 4 
years NOAA Fisheries has almost doubled the number of stocks assessed 
annually in the Northeast region, conducting an average of 21 stock 
assessments per year since 2008. At present, this means individual 
stocks are being assessed every 3-4 years. In the preceding 4-year 
period (2004-2007), the Northeast Fisheries Science Center conducted an 
average of 11 stock assessments per year. Over the past 4 years, the 
Center has received an average of $20.8 million to support stock 
assessments through surveys, at-sea observers, biological sampling, age 
determination of fish, stock assessment scientists, and the peer review 
process. NOAA Fisheries is continuing to plan for increasing the rate 
of assessments to a frequency of every 1-3 years, for an average of 
about 30 stock assessments per year. Based on the needs of management 
and the biology of the stocks, this is the optimal biological and 
regulatory frequency at which to assess the status of these stocks. To 
achieve this requirement and to continue to make research advances in 
the underlying stock assessment science, the funding increase proposed 
in the President's budget would be required, and this would help 
support the additional scientists necessary to meet both scientific and 
management needs for stock assessments in the New England and Mid-
Atlantic.
    Comparisons between the stock assessment process in Alaska and the 
Northeast are instructive. The assessment process in Alaska routinely 
updates the status of all 35 stocks per year. These stocks are managed 
under three separate Fishery Management Plans (FMPs) and one Council. 
All stock assessments are ``updates,'' and are prepared annually over a 
4-6 months period including 2 sets of meetings of the Plan teams and 
the Scientific and Statistical Committee to peer review the 
assessments, and then to provide Annual Biological Catch (ABC) advice 
to the Council. A strong and intensive internal review process ensures 
that the external review process is efficient and sufficient to answer 
the requirements for the Scientific and Statistical Committee (SSC) and 
managers.
    In contrast, the 56 stocks in the Northeast are managed by two 
Councils and the ASMFC under 14 separate FMPs, with the NMFS providing 
revised assessment advice for up to 21 stocks per year, including both 
benchmark assessments and assessment updates. The assessment process 
for benchmark assessments typically requires 2-3 weeklong meetings for 
each stock, plus a weeklong review by the Northeast Regional Stock 
Assessment Review Committee over a span of 4-6 months. Each benchmark 
assessment is first followed by meetings of the stock's Plan 
Development Team, and then by a meeting of the SSC to translate the 
assessment advice into annual ABCs. Only 4 to 6 stocks can be benchmark 
assessed per year under this schedule. An additional 10 to 15 stocks 
have annual assessment updates prepared, with the SSCs acting as a 
supplemental peer-review body.
    Much of the difference in the assessment schedule between Alaska 
and the Northeast is a result of the general differences in the status 
of fishery stocks in the two regions. Stocks that are overfished or 
where overfishing is occurring generally require implementation of 
different management measures, and the assessments require greater 
detail and peer review. Such measures increase the amount of time 
needed to conduct assessments to verify that the measures are 
sufficient or even necessary. Overfishing is an uncommon condition for 
the Alaska stocks; no stocks are listed as experiencing overfishing and 
two are overfished. In New England, on the other hand, only 1 
groundfish is experiencing overfishing, but 13 of the 20 groundfish 
stocks are currently overfished.

    Senator Begich. And, I guess, the last quick question on 
personnel issues--I understand as a former mayor how you have 
to manage that very carefully. But I would ask that, if 
necessary--and I don't mind doing it, and I'll just share it 
with the folks here--happy to do a closed meeting just to give 
us an accounting of what happened. And I'll leave that to your 
counsel to work maybe with the Subcommittee's counsel to make 
sure--so everyone can be satisfied with accountability issues 
on that. And I'll be happy to work with you.
    Dr. Lubchenco. That's exactly what the General Counsel has 
offered to do.
    Senator Begich. OK. We would be happy to assist the members 
who are interested.
    Thank you.
    Senator Kerry. Thank you very much, Senator Begich.
    Let me just emphasize this stock--and if you want to 
establish trust--nothing has frustrated us more over the last 
years--I mean, decades--than the science. And the fishermen 
will tell you that, that they're just--you know, they see 
something different. There's a huge doubt about the basis of 
some of the decisionmaking. And to have a difference of a 
three-year--or a two-year or three-year, but generally three-
year--versus every year is a huge deal. And I know it's 
resource dependent, and that's something that is--you know, 
we've got to join in the fight to get those resources.
    I just want to say--I really want to emphasize how 
important it is that the Chairman of the Subcommittee has come 
up here. I used to chair that committee, and I know it's 
critical to Maine, to California, to Washington, Alaska, all 
of--Louisiana, all of our coastal areas. It means travel and 
time out on the schedule of the Chair, but I am very, very 
appreciative to Senator Begich for coming up here to listen to 
us today.
    Congressman Frank?

            STATEMENT OF CONGRESSMAN BARNEY FRANK, 
     U.S. REPRESENTATIVE FROM MASSACHUSETTS (4th DISTRICT)

    Mr. Frank. Thank you. I want to say that I have to express 
my agreement with Senator Brown, not that I'm reluctant to 
agree with Senator Brown, but I wish it wasn't on this point--
mainly that there is a pretty complete sense on the part of the 
fishermen in Massachusetts that they face a hostile 
administration. And that--I have to say I share their view.
    And, Dr. Lubchenco, I want to be honest with you. In our 
interactions, you have given me the impression that you're 
almost resentful and resistant of what we want to do. And I am 
not the role model for warm and cuddly. I understand that. I'm 
not being--when we talked about the investigation into abusive 
law enforcement, I remember having to argue with you about 
including after a deadline some other people we thought were 
relevant, and I will get back to that at the end.
    But I--part of it has just come from your testimony. You 
say on page four, ``Revenues are up for some but not all 
fishermen.'' And then you say the average New England ground 
fishermen earned 16 percent more per pound. You then say in New 
Bedford, the increase was 20 percent. Is that per pound?
    Dr. Lubchenco. No.
    Mr. Frank. That's overall?
    Dr. Lubchenco. Overall.
    Mr. Frank. But in the report NOAA issued--oh, and the 
ground fishermen--is that for groundfish or for all their 
revenues?
    Dr. Lubchenco. The 12-month report was for groundfish.
    Mr. Frank. Because the report that NOAA issued that--
commissioned from the Northeast Fisheries Science Center says 
the total catch for groundfish was down to 81 million pounds. 
The drop in catch was partially offset by an average price per 
pound. So revenues fell 2 percent from $85 million to $83 
million. So overall revenues--but that's not in your testimony. 
Your testimony cherry-picks what looks good and leaves out 
what's not good, and that's not building trust.
    Why would you, in talking about revenue, not have noted, 
however, that revenues overall were down, and that the per 
pound increase was in gross offset so that we had a net revenue 
loss of 2 percent? Wouldn't that have been relevant to your 
part on revenues?
    Dr. Lubchenco. Congressman, the 12-month report has a lot 
of information in it, and it has--you can read it a lot of 
different ways.
    Mr. Frank. I'm sorry. I have to--this is your report, and 
it says revenues fell 2 percent. That's not--there are no two 
ways to read that. This is an example of what I mean. You 
highlight where revenues went up per pound, but the fact that 
revenues overall went down wasn't there.
    By the way, fishermen may be one of the few people who are 
prepared to work harder to get less per pound. I mean, I guess 
if they were purely selfish, they would say, ``Good. Cut the 
catch and we'll raise the price.'' But these are people who 
would prefer to be able to catch more.
    I also want to get back to the assessment issue, because we 
have an example of that. The one generally successful area of 
fishing we have here is in scallops. And that's an example 
where information that I was given by the fishing industry, the 
scallopers in New Bedford, Dr. Rothschild and the people at 
SMAST--we had to overcome resistance within the--you weren't 
there at the time--and get the Secretary of Commerce to use his 
authority to give us more scallops. And the fishermen were 
right, and some of the more extreme critics of the fishing 
industry were wrong. And what I'm hoping is we can try to do 
for groundfish what we did for them there, and that was partly 
because the science is weak.
    Now, one of the--because I think the catch is the essential 
issue. One of the key points is--in Magnuson-Stevens, which I 
in the end voted against--and part of it was this 10-year fixed 
rate for rebuilding. Now, with regard to the Canadian boundary, 
with your support, we amended that, right? So we do not have 
the 10-year fixed rate. You have the authority to make 
exceptions?
    Dr. Lubchenco. Correct.
    Mr. Frank. Is that working well, do you think, or is it too 
early to tell?
    Dr. Lubchenco. I haven't seen the latest information on 
that.
    Do you know, Eric?
    Mr. Schwaab. It did, Mr. Frank, provide us some increased 
flexibility----
    Mr. Frank. I understand. But is it working well?
    Mr. Schwaab. It is working well----
    Mr. Frank. All right. If that's working well, why don't you 
do it for the whole bill? Why do we have that exception, 
because--well, let me ask you--the 10-year with no exception, 
right--is there scientific justification for that that you can 
show me somewhere--10 years, fixed, no exceptions?
    Mr. Schwaab. No.
    Mr. Frank. OK. So we have--and you had previously 
acknowledged, Dr. Lubchenco, at a hearing we had on the 
waterfront that it's there because it's in the statute. In 
fact, we made an exception. We appreciated it. We had a 
bipartisan agreement--Senator Snowe and others in the Senate, 
Senator Brown, Senator Kerry. We got that changed for our 
Canadian boundary, and you say it's working well.
    Why wouldn't you then support giving yourself the same 
flexibility with regard to the 10-year period, in general, in 
our fishery that we have with the Canadian boundary?
    Dr. Lubchenco. Congressman, there are exceptions that are 
allowed. Those are specifically identified----
    Mr. Frank. But not the same as in the Canadian boundary.
    Dr. Lubchenco. That's correct.
    Mr. Frank. Would you support equating the overall with the 
Canadian boundary, that list of exceptions, which would still 
be under the jurisdiction of----
    Dr. Lubchenco. So I think the exceptions that are warranted 
are ones where the life history of the species----
    Mr. Frank. I'm sorry, Doctor. Can I get an answer to a 
fairly straightforward question? Would you support putting into 
the statute the same exceptions and the same flexibility with 
regard to 10 years, in general, that you have and that Mr. 
Schwaab says is working well on the Canadian boundary issue?
    Dr. Lubchenco. Where there is a legitimate biological 
reason, yes.
    Mr. Frank. No, no. But we have to amend the statute. So 
then you would support amending the statute, because, 
presumably, in the main--in the trans-Canadian boundary 
situation, are the exceptions appropriately limited?
    Dr. Lubchenco. I don't know what the basis is in that.
    Mr. Frank. You don't know the basis of the statute that 
you're administering?
    Dr. Lubchenco. So I--I do not. But I think Eric does.
    Mr. Frank. Well, Mr. Schwaab?
    Mr. Schwaab. Yes, thank you. So the basis there was not to 
disadvantage U.S. fishermen where through a transboundary 
agreement we were dealing with an international partner who was 
on a different rebuilding timeframe. So it was very explicitly 
intended----
    Mr. Frank. Does that time frame--but is doing that--is that 
going to be deleterious to the rebuilding?
    Mr. Schwaab. It flattens----
    Mr. Frank. No, I didn't intend----
    Mr. Schwaab. It certainly flattens the rebuilding 
trajectory----
    Mr. Frank. Is that deleterious to the overall preservation 
of the stock?
    Mr. Schwaab. It certainly could be deleterious to the 
ability to meet that objective.
    Mr. Frank. But it's working well, you say.
    Mr. Schwaab. I would say that--and, again, in a place where 
we have an international partner with a different rebuilding 
trajectory, we certainly did not want to disadvantage U.S. 
fishermen by putting them on a----
    Mr. Frank. I understand. But, again--and I'll give you--I'm 
trying to ask a fairly straightforward question. You seem to be 
reluctant to say things that might be advantageous to the 
fishery. And so I'm going to close with this, with a little bit 
of extra time, if I might. There has been some conversation 
about a task force. There were some recommendations that came 
from Pate and others.
    There is a lack of trust, and let's just be very clear. 
There aren't enough law enforcement officials in the world, 
fortunately, particularly in a free society, to enforce laws 
over the vehement objection--or not objection, but in the face 
of such distrust. Law enforcement would be better if we had 
more cooperation along those lines. I'm hoping we will go ahead 
with getting the Coast Guard ALJs replaced. We were promised 
that, and, apparently, it hasn't happened yet.
    But I think a task force to work with you of stakeholders 
would be very helpful. Would you be supportive of a task force 
being appointed of stakeholders who could take some of these 
areas of agreement, improving the science, and have some input 
into the process by which that is done on a regular basis?
    Dr. Lubchenco. We have consistently been reaching out to 
fishermen and creating mechanisms to do that.
    Mr. Frank. That's a straightforward question. Would you be 
supportive of a task force? Why can't you give me a straight 
answer? It could be no. It could be yes. But would you be 
supportive of a task force to do that? That's not a hard 
question. You don't have to hire somebody to take the SAT for 
you to answer it. It's very straightforward.
    Dr. Lubchenco. Congressman, we actually have such a 
mechanism.
    Mr. Frank. Is that a yes or a no, Dr. Lubchenco?
    Dr. Lubchenco. It says we already have it. That's what the 
Council is. That's what the Council is supposed to do.
    Mr. Frank. OK, yes. But there's some concern that it hasn't 
worked as well, and they would like to go beyond just this 
rigid appointment to the Council. So the answer is you would 
not be supportive of a task force that would be broader in 
scope to work out these----
    Dr. Lubchenco. I believe we have a mechanism. We need to 
make it work better. It's one that was created by Congress. 
It's one that works in other parts of the country. One of the 
things that we have committed to doing is to having better 
clarity about how the Council process works, bring even more 
transparency and openness to the Council process. That is the 
appropriate mechanism, and I'm totally supportive of it.
    We do need to make it work better. Fishermen need to have 
trust in it. They need to know exactly what they're doing. They 
need to participate in it, because that's the body that is 
developing the fishery management plans.
    Senator Kerry. Why is it not working?
    Dr. Lubchenco. The Council process could work better. I 
believe that one of the challenges in New England is how 
diverse the industry is. And with that diversity, there are 
always going to be individuals that don't agree with a 
particular decision. But I believe they need to have more 
confidence in the process and fully participate in the process.
    One of the challenges in New England has also been the 
complexity of the regulations, and that was the Council's 
doing, and we are working with the Council to simplify those 
regulations. I believe that the sector management program is 
actually helping significantly to simplify regulations and to 
give fishermen more control over their businesses.
    There are other arenas in which we need to simplify 
regulations further and make it clear what the regulations say. 
So some of the things that we have set in motion are mechanisms 
for individuals to know where to go to get the information. And 
Eric just described one of those in terms of having one-stop 
shopping, one easy place to go where you can get answers, 
having fishermen who are knowledgeable be able to help 
participate in sharing information.
    And these changes don't happen overnight. These are changes 
that I believe have been a long time in coming. I would much 
rather be in a situation where we have good collaborative 
interactions, even though I don't--I'm not naive enough to 
believe that everybody's always going to agree with 
everything--but if we can trust the process, and fishermen can 
trust the process.
    The fact that the economic situation is so serious, and it 
has been on the decline for so long puts us in a very, very 
challenging position. It's hard for people to trust a process 
where the economics stink for many of them. And I totally 
understand that. That's why we are committed to turning things 
around. And I believe that, finally, we are on a path to do 
that.
    For the first time ever, we have catch limits and 
accountability measures in place, and we have mechanisms to 
track those changes. And they are beginning to work. The stocks 
are beginning to be rebuilt. We have seen increases in catch 
limits in 12 of the 20 groundfish stocks this year because the 
rebuilding has begun. We're turning the corner, but we have a 
long, long way to go. And I would like us to be moving in a 
direction that works not just for a few, but for all of the 
fishermen.
    That's what we are committed to continuing to do, and part 
of that means rebuilding relationships with fishermen. We are 
on a path to do that. We have a long way to go, but we're 
committed to it.
    Senator Kerry. Congressman Tierney?

           STATEMENT OF CONGRESSMAN JOHN F. TIERNEY, 
     U.S. REPRESENTATIVE FROM MASSACHUSETTS (6th DISTRICT)

    Mr. Tierney. Thank you, Senator.
    Thank you to all the senators, for inviting us here to 
participate in this today and for coming yourselves on that.
    Dr. Lubchenco, I think the issue of lack of trust is 
foremost in the minds of many, particularly in the Gloucester 
region on that. The enforcement programs, the operations, and 
the way they've been exercised in the past have led to that. I 
think the Inspector General's report leaned heavily on the lack 
of transparency and accountability for the programs.
    It would have gone a long way for our fishermen if there 
had been more of a response in indicating whatever happened to 
the people that were responsible for, as the Inspector General 
said, common abuses and misuses of power, rampant mismanagement 
throughout the agency, specifically in the Office of Law 
Enforcement in the New England region. When they then turn 
around to find out that the former head of that division still 
is with NOAA, still is pulling down $155,000 of taxpayer money, 
and seemingly people cannot get an answer as to what 
disciplinary process was followed, if any, in that situation 
and why wasn't more done in terms of holding people 
accountable--I understand that you want to say that the Privacy 
Act sort of prohibits that. But you have been requested time 
and again by the Oversight and Government Reform Committee of 
the House, then Chairman of the Subcommittee, Dennis Kucinich; 
the Resources Committee in the House, Walter Jones, for that 
information, either in Executive Session or in documents if you 
thought they were classified for some reason, and there has 
been nothing forthcoming.
    So can you give us some assurance here today that you're 
going to accept Senator Begich's offer to make sure that your 
Counsel produces that information and those answers to the 
House and to the Senate?
    Dr. Lubchenco. Congressman, the information that the 
General Counsel for the department is able to provide by way of 
a confidential briefing, he will do so. That is not my choice. 
That's not my decision. This is up to him. And he has offered 
to do some confidential briefings.
    Mr. Tierney. When did he offer to do that? Because he 
didn't offer to Representative Kucinich, and he apparently 
hasn't offered it to Representative Jones, and he hasn't 
responded to their requests for it. And, obviously, the request 
through you--you've not been able to persuade him to do that 
because we've seen no action on that. So when is it that he 
supposedly did that, and when can we expect him to follow 
through?
    Dr. Lubchenco. Congressman, I don't know.
    Mr. Tierney. You know, part of the information issues--it 
was a good thing that you went up and apologized to some of the 
fishermen and entities that had been involved and the findings 
had been made by the judge as well as the Inspector General on 
that. But there was some disgruntlement, obviously, that they 
thought that you might also answer some of the questions that 
they presented that day, and there was disappointment that you 
apparently would not. I wasn't there. I only got the feedback 
from talking to the participants on that.
    But when they wanted to ask questions such as why weren't 
their legal costs--the fact that they don't like them, and do 
they get reimbursed for that. They weren't given the answers 
and any satisfaction. Can you, at least today, say that you 
will try to work to expedite their requests for an answer on 
whether or not they can be compensated for their loss of legal 
costs during that entire situation where the finding was made 
that there was mismanagement throughout the agency and where 
there were abuses or misuses of power?
    Dr. Lubchenco. Congressman, we will commit to clarifying 
what we can and can't do.
    Mr. Tierney. Well, that's real helpful.
    [Laughter.]
    Mr. Tierney. I mean, this is part of it. Let's be serious 
on this, you know. And you and I have had a thing going back 
and forth here like that and parts of that. That's not an 
answer that's very helpful or it doesn't seem very open. So we 
talk about openness and transparency, and then you give an 
answer like that. You know, you either agree that there ought 
to be--you know, somebody will look into that issue and try to 
be somewhat sympathetic to the fact that huge legal costs were 
incurred by these people, who in the end were found to have 
been rather poorly treated, and that you'll see and, you know, 
with affirmative action you'll try to see that there's some 
resolve or at least expedite their claims or you won't.
    So will you try to at least see that their assertions have 
an answer that'll be expedited and they'll get some 
satisfaction one way or the other?
    Dr. Lubchenco. Congressman, you asked if I would commit 
to--if I would find--if I would look into it, and I said yes. 
That's what I'm saying.
    Mr. Tierney. Well, yes is much easier to understand than 
what you said the first time, and I appreciate that, that you 
will. There's now a question about whether or not the 
rulemaking process itself in some of the agencies--in NOAA, in 
NMFS, in the New England Fishery Management Council--should be 
reviewed on that. A request has been made by Congressman Frank 
and by me that the Inspector General consider looking into 
that.
    Will you cooperate with somebody reviewing that situation 
so that we can have further confidence that the process itself 
is legitimate and is something that can be supported by people 
so we can rebuild some of the trust?
    Dr. Lubchenco. Of course.
    Mr. Tierney. Can you--just on the more positive side of the 
issue, you had mentioned that you were in favor of looking into 
better monitoring approaches and cost-effective ways to do that 
on the monitoring. Can you expand on that a little bit to let 
us know what the fishing community might expect for some relief 
in that area?
    Dr. Lubchenco. I think there are two issues with 
monitoring, Congressman. One is what does it cost, and, two, 
who pays? We have paid the first two months of the monitoring 
costs. We've also redirected funds to help minimize--to lessen 
those costs. I am supportive of finding ways to slow down the 
rate at which the industry is covering those costs in a way 
that is sensitive to the realities of the economic situation 
now.
    I'm also in favor of figuring out ways to lessen the total 
cost. And we have in progress now pilot projects to understand 
better the possibilities of using electronic monitoring, for 
example, to make the monitoring cheaper. This is a pilot that 
is still underway. I'm guessing that it's going to be easier to 
utilize approaches like monitoring--electronic monitoring for 
some fisheries, some gear types than others. For gill net, for 
long line, I think it's going to be easier to have a camera be 
capturing identity and size of fish as they go by than for a 
trawl where there's just a whole bunch coming in at once. So 
this has to be somewhat gear specific.
    But we are working to figure out how to bring those costs 
down, and we'll continue to do so. And this is a collaboration 
that is underway, and we believe that--we understand the 
urgency of moving ahead with this judiciously, which is why 
we've initiated these pilots.
    Mr. Tierney. Thank you.
    Senator Kerry. Just a comment quickly to the Congressman 
that in the conservation act that I'm working on with Senator 
Begich, Senator Snowe, and Senator Mikulski, we have the fee 
fairness act that I introduced a year ago as part of it, which 
will empower the reimbursement of legal fees. So I want people 
to know that we're trying to do that through the statutory 
process, and, hopefully, we can get that done.
    Dr. Lubchenco. Mr. Chairman, could I add one more quick----
    Senator Kerry. Yes, please.
    Dr. Lubchenco.--item to Congressman Tierney's question. I 
would note that our ability to help defray costs for monitoring 
is partly a resource issue for us, and the catch share line 
item in our budget is what we use to do that. And so if there 
is desire on the part of the New England delegation to help us 
cover those costs for longer, we need help making sure that we 
have the resources to do that.
    Senator Kerry. And I would remind everybody here that this 
comes into the discretionary portion of the Federal budget, 
which took $1 trillion worth of cuts over the course of the 
last few weeks. So people need to relate as they go out in 
their communities--this hue and cry about chopping away 
everything that matters to people, which is part of what's 
going on down in Washington.
    Congressman Keating?

          STATEMENT OF CONGRESSMAN WILLIAM R. KEATING,

             U.S. REPRESENTATIVE FROM MASSACHUSETTS

                        (10th DISTRICT)

    Mr. Keating. Well, thank you, Senator. And I'll just say, 
as someone that's fresh to Washington in respects, it's 
extraordinary, and I want to thank--there are three senators 
here, three House members. It's hard to do that in Washington.
    Why is that happening here? Because I don't think there's 
any inability from the fishermen communicating to us. We're 
hearing them, and that's why we're here. And that communication 
is being heard, and it's fundamental.
    Now, I just had a couple of thoughts, and one of them--I 
was just listening to the testimony so I could bring something 
new to the questioning, because when you're last in line here 
in talking, most everything has been addressed. But, you know, 
in the larger picture, when it deals with international issues, 
you're flexible, because you want to do the best for the 
fishermen that way. So you've adopted one policy.
    When it comes to the bureaucracy and your funding, well, 
that comes first. So you can't go to 1 year versus three, and 
maybe we should be dealing with having a hearing on how we get 
to monitoring every year.
    But one of my committees is the Small Business Committee, 
and what I'm finding, listening to the folks in my district 
that I represent, a broad array of people, some of them more 
amenable to the rules than others--but the one thing that's 
lost is where's the flexibility for a small business. And most 
of these people are small businesses. Our growth is going to 
be--65 percent of our growth has been through small businesses.
    And, you know, maybe there are things that can be worked 
out internationally, when you're working at it. Maybe there's 
things that could be done with funding to accelerate the 
monitoring. But I'll tell you what's gone forever. It's not 
just the stocks of certain fish have been depleted. Small 
businesses have gone.
    So the same flexibility that's there for something else 
isn't there when the stakes are small businesses going under 
and it's never coming back. That will be a permanent depletion, 
and that's something we can't afford to have here regionally. 
It's something that's going to hurt us economically.
    And I just want to make that point, because you were 
nodding your head when we were saying, well, you used the most 
conservative figures. Now, is that conservative based on the 
effect on the species, or is it the most conservative as to how 
it affects these small businesses? When you say conservative, 
are you being conservative to make sure you're not doing things 
so these businesses are depleted, or is it conservative based 
on the stock of a certain species?
    Dr. Lubchenco. Congressman, thank you for recognizing 
clearly that fishermen are the consummate small businessmen. 
They really are. And much of our approach in the last few years 
has been explicitly designed to give them more flexibility, to 
relieve them from overly burdensome regulations, so that they 
can be small businessmen without their hands tied. The sector 
program is designed to do that, and we are beginning to see 
fishermen respond.
    Mr. Keating. Could you--because my time is--sorry to 
interrupt, but----
    Dr. Lubchenco. When we----
    Mr. Keating.--I'm going to be cut short of time, too, but 
could you answer the conservative question first?
    Dr. Lubchenco. That's what I'm--when we set the limits, the 
catch limits, for different species, that is constrained by the 
legislation, the Magnuson-Stevens Act, and it is explicitly 
designed to ensure that overfishing doesn't happen. And so the 
limits are set on each stock with the idea of having as much 
fish as possible to fish now without undermining the ability of 
fish to have for later. So it's a balance between the present 
and the future.
    Mr. Keating. A balance.
    Dr. Lubchenco. Correct.
    Mr. Keating. Then where does the term, conservative, come 
from?
    Dr. Lubchenco. So I'm not sure in what sense you're using 
that. We conserve the stocks.
    Mr. Keating. Well, you were nodding your head when people 
were saying that when you're looking at the scientific data, 
you look at it with the most conservative lens, for lack of a 
better term. I was listening to that. Maybe I was not----
    Senator Begich. I asked that question, or made that 
statement.
    Mr. Keating. Thank you.
    Senator Begich. When you do a one to three-year spread--
when you do assessments every three years, your odds are you're 
going to take a much more conservative approach because you 
don't have enough assessments every year.
    Dr. Lubchenco. That's correct.
    Mr. Keating. Well, in the absence of more assessments, 
couldn't you just be balanced, the way you are with these other 
factors, just more in the middle?
    Dr. Lubchenco. So we are required to utilize the best 
available information, which--if you have a stock assessment 
that was done 2 years ago, that's what you use, unless there is 
new information to update it.
    Mr. Keating. So would you support a change in the law that 
gave you more flexibility? Instead of being the most 
conservative in the way you view that data, since there's such 
a lag time, and it may not be accurate in the first place, 
would you support something--a language change that would say 
something akin to, you know, a mean test or something in the 
middle?
    Dr. Lubchenco. Congressman, the law is designed----
    Mr. Keating. Would you support that? No, I'm not asking--
would you tell me----
    Dr. Lubchenco. No.
    Mr. Keating. You wouldn't support that.
    Dr. Lubchenco. No.
    Mr. Keating. OK.
    Dr. Lubchenco. The law----
    Mr. Keating. That's almost like I got a yes.
    Mr. Frank. Congratulations.
    Mr. Keating. Thank you. I am pretty good for--[Applause.]
    Mr. Keating. I'm learning fast. Now, the second question I 
have--we're getting information in the absence of that delay in 
getting scientific information--I should probably quit while I 
was ahead. What do you think, Senator? Yes?
    But the issue is in terms of collaboration, you know, we're 
getting information--if you're, again, limited in your 
scientific--wouldn't it be valuable to get some of the 
information from the fishermen themselves about what they see 
as trends? I'll give you an example. I don't know how accurate 
it is myself, but I heard it from fishermen. They're saying 
that, you know, with the dog fish, that they're becoming so 
plentiful, and everything's so slow in dealing with it, and 
they're predators, and they're hurting other species.
    Now, if you were collaborating closely, whether it's a task 
force--which is something I think would be valuable, where 
they're included more in the decisionmaking and don't have to 
go through us to communicate--wouldn't it be beneficial to 
collaborate more greatly with them? Are there ways to do that 
that could also reduce the capital cost, if you're using their 
boats, you know, for certain things and--to work in that 
respect with that?
    Is there a way to alleviate the capital burden and 
collaborate at the same time, using some of their resources, 
and also trying to gage the changes of the scientific data with 
what you're hearing from them? If they're telling you that this 
is what they're finding out, that this trend is there, since 
you want to help that lag time, wouldn't their input be--is 
there a mechanism--maybe the task force that has been addressed 
is that mechanism--to get their voice in there, what they're 
actually seeing firsthand, so that you can key in on that first 
and maybe react to it quicker and get scientific information 
quicker?
    Dr. Lubchenco. I'm completely supportive of cooperative 
research programs that allow us to get information jointly with 
fishermen. When the council develops the management plans, they 
utilize all the information that's available in doing so. So 
there is a process for utilizing information and having it feed 
into those decisions.
    Mr. Keating. Well, there's obviously a process. That's 
not--could the process be better by listening to them and 
having a mechanism where you're hearing, ``This is where--this 
is what we're seeing,'' and certain trends, and having a 
process, a different process, evidently, that allows you to 
have them have the input so you're checking the effects of 
these things more quickly, sort of prioritizing what they're 
seeing?
    Dr. Lubchenco. So I think Mr. Schwaab has a comment here.
    Mr. Schwaab. Yes, thank you. So one of the advantages, Mr. 
Keating, of the sector based management is much better and more 
timely information on what is being caught, both in directed 
catch and in bycatch. And those--that does present a very 
significant advantage in responding more quickly to what we're 
seeing on the water on the dependent side.
    On the fishery--on the survey side, we also do use 
fishermen as platforms in a number of cases to help with the 
gathering of what we call fishery independent data. Now, in 
those cases, the fishermen aren't fishing. They're conducting 
surveys. But we did, as a result of the management review that 
we conducted, accelerate a review of our five-year cooperative 
research plan, and we have had a series of meetings all up and 
down the coast to develop a refined cooperative research plan 
to get information from fishermen and from others, partner 
institutions and the like, to better deploy our limited 
cooperative research dollars more effectively.
    Mr. Keating. I harken back to having the process change 
more to a task force where that's formalized, because I'm 
hearing that you're listening or you're having that 
information, but it would be interesting to have that in a more 
formalized way so that the people that are giving that 
information can better gage a response, if they have to come 
back to us.
    But, frankly, I already feel like a referee in this, much 
more than a lawmaker, and we just have to do better in that. 
And if there are changes legislatively, if you can give us 
ideas where you think we can get revenues, that's helpful so 
that we're speeding up the process. But, clearly, I think one 
of the things worth looking at is maybe changing that statute 
so that you're not always forced to take the most conservative 
approach at a time when you don't know if that's a fact. No one 
knows with certainty.
    But these small businesses are dealing with certainty, and 
that certainty is the bottom line. And we can't afford to have 
them go out of business because we're not doing our job or 
you're not doing yours.
    So, Senator, I yield back whatever time I have.
    Senator Kerry. Well, actually, you've gone double time, and 
you have no time to yield back. But that's all right. The 
thought is really appreciated.
    Mr. Keating. Well, I wish that there were other 
bureaucracies that could give the same flexibility that you 
gave me, Senator.
    Senator Kerry. I'm delighted, honestly. I think the 
discussion is important, and everybody's had extra time, and I 
think that's been important. But the result is we are running a 
little bit behind.
    There is one last question I just wanted to ask you very 
quickly, if I can, before we--we're going to leave the record 
open so that all the members can submit any questions they 
want. There are two things I want to ask you very quickly. One, 
can I get a commitment from you today that both of you would 
come up here as soon as we could make the arrangement--I'd like 
to have a private, closed-door meeting with some of the 
fishermen and key stakeholders and us, and just have a 
discussion about this.
    I think it would be, obviously, a different kind of thing 
from the hearing, but I think a very important point of 
communication. Could we make that happen?
    Dr. Lubchenco. I'm sure--I'm happy to do that.
    Mr. Schwaab. Yes, sir.
    Senator Kerry. Mr. Schwaab? All right. I think if we can 
arrange that in short order, I think that could be even more 
profitable, and we can advance even further here.
    In defense of some of the answers you've given--and I'm not 
here to do either, you know, promote one side or the other, 
except that I want the truth and the fishermen want a better 
relationship. There are things statutorily and there are 
objectives stated by Congress that do have to also be looked at 
here. And there are constraints. There are constraints on the 
privacy. There are constraints on other things, and there is 
law in effect. And maybe some of it now has to be changed in 
order to try to adjust to some of this.
    The final thing is, I've asked a number of times whether or 
not we could take particular sectors of the fishing industry up 
here which didn't use their quota under Amendment 16 last year 
and roll over up to 10 percent of that quota into their current 
catch allowance. And I think if we could do that, that would be 
an important step forward. Is that doable, Dr. Lubchenco?
    Dr. Lubchenco. Mr. Chairman, I share the desire to roll 
over as much quota as possible. Currently, we can roll over up 
to 10 percent. The council----
    Senator Kerry. So the answer is we can. Yes, we could roll 
over----Brian J. Rothschild, Montgomery Charter Professor of 
Marine Science and Technology and Co-Chair, Massachusetts 
Marine Fisheries Institute, University of Massachusetts 
Dartmouth
    Mr. Frank. Senator, would you yield?
    It's 10 percent now, so you're saying you would agree to 
more than 10 percent, changing that regulation so more than 10 
percent could be rolled over?
    Dr. Lubchenco. I would like to see more than 10 percent be 
rolled over. The decision is the Council's, and we have 
repeatedly asked the council to move this up on their list of 
things, because----
    Mr. Frank. If they can set it up, it's very appreciated. So 
that if the Council were to do it, they would encounter no 
resistance from you. You would----
    Dr. Lubchenco. Absolutely.
    Mr. Frank.--approve what the council did.
    Dr. Lubchenco. Absolutely.
    Mr. Frank. Well, that's a target for----
    Dr. Lubchenco. What needs to be done--they need to do an 
analysis to make sure that rolling over--if you roll over too 
much, then you actually might cause problems down the road.
    Senator Kerry. Sure. We understand. You go backward down 
the road. We understand.
    Dr. Lubchenco. And nobody wants that to happen. So they 
need to do their analyses. We want them to do it sooner.
    Mr. Frank. I appreciate it, Senator, for yielding, but for 
once let's try to look at something that might be good without 
caveating it to death before we do it.
    Senator Kerry. Thank you. I think that's a positive note. I 
think that that's encouraging, and it's good that we can do 
that rollover, and I think we need to try to get that effected 
as rapidly as we can together with the emergency declaration.
    So on that note, Dr. Lubchenco, let's look forward to this 
next meeting which I will try to convene as rapidly as we can 
get it together. And if there are particular interested parties 
here that want to make sure they are part of that, you should 
see John Phillips right here at the--John, raise your hand--
or--Senator Begich, do you have a staff person here?
    Senator Begich. Jeff or Bob.
    Senator Kerry. Just the folks back there, and we'll make 
certain that we pursue that.
    So, Dr. Lubchenco, thank you. I think--I don't know if you 
can stay and listen. I think it might be helpful if you can.
    Dr. Lubchenco. I have another appointment. I will stay as 
long as I can.
    Senator Kerry. Great.
    Dr. Lubchenco. But I need to get to that appointment.
    Senator Kerry. We really appreciate it.
    Dr. Lubchenco. But I think I've got some time to stay, and 
I'm anxious to hear what others have to say.
    Senator Kerry. Good.
    So on that note, I call the second panel: Paul Diodati, the 
Director of the Massachusetts Division of Marine Fisheries; Rip 
Cunningham, the Chairman of the New England Fisheries 
Management Council; Dr. Steven Cadrin, who is an Associate 
Professor, Department of Fisheries, Oceanography School for 
Marine Science and Technology at UMass Dartmouth; Stephen 
Welch, Fisherman and Board Member of the Northeast Seafood 
Coalition; and Dr. Brian Rothschild, Montgomery Charter 
Professor within the Department of Fisheries, Oceanography at 
UMass Dartmouth.
    I hope this panel will help show the effects on our 
industry. I ask that each of the witnesses--I'm going to ask 
you each to just summarize in 3 minutes. Can you do that? I'm 
confident you can. You can give a pretty solid 3-minute summary 
of the predicament, what you see happening, and your full 
testimony will be placed in the record as if read in full. But 
I think it would be better, frankly, to get to the questions, 
and we'll get more out that way.
    So on that note, do you want to begin, Steve?
    Mr. Welch. Yes, that's fine.

  STATEMENT OF STEPHEN P. WELCH, FISHERMAN AND BOARD MEMBER, 
                  NORTHEAST SEAFOOD COALITION

    Mr. Welch. My name is Steve Welch, commercial fisherman 
from Scituate, Mass. I've been fishing commercially full time 
for 33 years, since a kid, probably about 46 years. I'm a 
member of Sector 10 on the South Shore of Massachusetts. Sector 
10 is fishermen from--basically from Boston south to the Cape 
Cod Canal. We have one member in Chatham and one member in 
Provincetown.
    I really appreciate you allowing me to speak today. My wife 
does also. We've been married 18 years and I finally bought a 
suit, so--and the kids had me wake them up this morning to 
watch.
    We were once a profitable small business entity in the 
South Shore--all the members of Sector 10. I myself was very 
profitable in 2008, 2009. Catch shares came in. For the first 3 
months, I realized that the way I was operating my business, I 
was losing money on catch shares.
    The ironic part about catch shares--this is a program that 
was supposed to promote economic efficiency, make us more 
profitable, and increase flexibility. It hasn't done any of 
those things. Catch shares from the beginning--when it was 
stated that we were going to go under catch shares, a 
significant fraction of the fleet is going to go out of 
business. In my view, catch shares is doing exactly what it's 
intended to do--is to put us out of business.
    We are fishing under a quota umbrella and disguising it 
under catch shares. Now, if we went to a straight quota system 
or a lap or something like that, there's checks and balances in 
the Magnuson Act that have to be followed--social and economic 
impacts, fair and equitable treatment. We are not getting this 
under catch shares. That's the biggest problem I see right now.
    And the big problem with the South Shore, to begin with--
and I'd like to say one thing. We've been rebuilding the fish 
stocks the last 15 years. They didn't start rebuilding in 2010. 
They've been rebuilding. But the sacrifices that we've made for 
the last 15 years with rolling closures, Days at Sea, large 
mesh--and I was a part of the management council while--a 
groundfish advisor, and I supported all these actions because I 
knew it was going to help, and it did help. That's why we have 
the stocks we're seeing today.
    We succeeded in achieving our objectives. The problem with 
the South Shore is that we were closed out of the fishery for 
up to six months a year, and during that time, we all found 
other jobs. When we were allowed to go fishing, we had three 
summer months when the dog fish were around and we couldn't 
even access our traditional groundfish stocks, and the other 
months were in the winter. So we got out very little. So we had 
small quotas.
    The guys in the South Shore--we worked together to keep us. 
We've learned how to fish sustainably and responsibly. You 
worked in a boat, you ran a boat, you bought a boat. We know 
all about sustainability and responsibility. I don't need 
anyone telling me how to do this, because it's in my own best 
interest and everyone's interest that fishes realizes that.
    You know, the bad side about going to this catch share 
system is the allocation from 1996 to 2006--we had very little 
allocation. Now that the stocks were built, we can't access 
them, and we are going to go out of business. It's cheaper for 
me to stay at home and lay off six employees between two boats 
than to actually go fishing under catch shares. And that's what 
I did last year, and I felt like I was--I'm not doing my 
responsibility as an American citizen to sit at home and lease 
out my quota. It's an injustice to the American people.
    The big--another problem with catch shares----
    Senator Kerry. I need to ask you--does that wrap----
    Mr. Welch. OK. Just the cost of sectors, to join them, to 
develop them, to operate them--the sector management staff--
vast amounts of people--we're leasing. It's costing me right 
now 45 percent of my gross revenues--45 percent is going to 
leasing.
    When we talk about revenues, let's not talk about gross 
revenues. Let's talk about net revenues. That's where the 
problem is. Nobody's netting. We're losing. We're going out of 
business. And if we have to pay for monitoring next year out of 
our own pockets, then I'm quitting fishing, and I will stay 
home and become a welfare armchair captain.
    Thank you.
    [Applause.]
    [The prepared statement of Mr. Welch follows:]

  Prepared Statement of Stephen P. Welch, Fisherman and Board Member, 
                      Northeast Seafood Coalition

    Mr. Chairman, members of the Committee, I am Stephen Welch. I own 
and operate the fishing vessel Holly and Abby, which is a 55 foot 
gillnet vessel, and Abby and Holly, a 45 foot trawl vessel, both of 
which operating out of Scituate, MA. I have been active in the NE 
groundfish fishery for over 35 years as a boat owner, captain and crew 
on inshore and offshore vessels using all of the major gear types 
including long-line, trawl and gillnet in Southern New England, Georges 
Bank and the Gulf of Maine.
    I am a member of Northeast Sector 10 established under groundfish 
Amendment 16 and I am also a Board Member of the Northeast Seafood 
Coalition. However, I want to be clear that my testimony today is on 
behalf of myself and no other organization. There are many different 
views within our industry today and so I am very grateful for the 
opportunity to present my own. Thank you.
    Despite my many years of experience and fishing success, today my 
fishing business is no longer viable under the new sector management 
system created under Amendment 16 to the groundfish plan. I am 
certainly not alone. Prior to Amendment 16, I had a very profitable and 
successful small business that employed six people full-time. Not 
anymore. Many other life-long fishermen in Sector 10 and other sectors 
share my plight.
    Three fundamental elements of Amendment 16 changed the world and 
contributed to the reality I face today.
    First and foremost, Amendment 16 changed the basic currency with 
which investments in the fishery were previously made. Prior to 
Amendment 16, investments in the fishery were based principally on the 
value of the permit as measured by its allocated Days at Sea. More 
days, more value--regardless of any catch history.
    Upon implementation, Amendment 16 immediately and completely 
changed that currency to the ``catch history'' of a permit and made 
instant winners and losers within the fishery. Although there were 
options available to the Council to mitigate the adverse impacts of 
this change by using a blended currency that accounted for both 
allocated Days At Sea and catch history, the Council chose to make the 
most drastic change possible. Was this arbitrary--or based on some form 
of insider information? I suppose we'll never know. But one thing is 
clear--some folks made out extremely well--and some of us didn't.
    For many like me, this had the dual consequences of stranding 
considerable investment in Days at Sea and substantially reducing the 
value and utility of permits under the new sector system. The Potential 
Sector Contributions (PSCs) allocated to my permits based on my stock-
by-stock catch history under the new sector system are simply far below 
what is needed to support a viable fishing operation under current 
economic conditions. That's because when I bought my permits, I wasn't 
buying them for catch history. This was arbitrary and unfair. The 
Amendment 16 sector system has virtually destroyed my fishing business 
at no fault of my own.
    The second aspect of Amendment 16 that has contributed to the 
demise of so many small vessel operators along the Gulf of Maine 
relates to the various closures designed to reduce mortality of 
sensitive stocks including especially Gulf of Maine cod. This 
dramatically and disproportionately reduced our access to certain 
traditional stocks and, by extension, reduced our catch history 
relative to those that were less directly affected by the closures--
and/or who found ways to continue to target cod and other stocks and 
increase their catch history notwithstanding the overfished condition 
of those stocks. In effect, this was double jeopardy. First we were 
disadvantaged under the old Days at Sea program for lack of access to 
our nearby traditional stocks--and then this was perpetuated and 
exacerbated when our lack of catch history of those same stocks became 
the new allocation currency under Amendment 16. We were denied access 
to our nearby stocks--and then punished for not having that access.
    Because the Amendment 16 sector system is a catch share, hard TAC 
``output control'' management system, there should be no place for 
continuing any of the ``input controls'' such as groundfish mortality 
closures in this new system. Yet, they exist in the plan today as a 
useless, counterproductive artifact of the old Days at Sea management 
system. And they are still hurting us. This needs to be fixed.
    The third aspect of Amendment 16 that threatens small operations 
like mine are the costs associated with the new sector system. Sectors 
themselves cost money to develop and operate--a lot of money we have 
found out. Sectors need a manager and staff to satisfy the vast amount 
of paperwork and reporting requirements thrust on them by Amendment 16. 
This is no small thing.
    In addition, the sector system has transferred traditional NMFS 
functions including especially catch monitoring--onto the private 
sector. Although mandatory requirements for dockside monitoring have 
recently been eliminated, we face the requirement to pay for At-Sea 
monitoring costs beginning in fishing year 2012.
    Another substantial constraint is the costs associated with leasing 
fish, to make up for the poor allocations and low ACLs. For me, this 
cost equates to up to 50 percent of my gross revenues. Small 
businessmen like me simply do not have access to the capital it takes 
to participate in the leasing market.
    Together, these staff, reporting and monitoring costs, and leasing 
costs represent completely new, unprecedented burdens that our 
fishermen have never faced--and I can assure you that neither the 
status of the stocks nor the financial condition within the fishery are 
at a level that can support these new costs. Not even close. The 
addition of At-Sea observer fees in 2012 would be absurd. If nothing is 
done, many other fishermen will be financially crippled by these new 
costs.In fact, I would venture that the entire sector system will 
collapse under the weight of these new costs in Fishing Year 2012.
    What can be done? It's not too late for some of us hanging on to 
our permits in hopes that Congress, NMFS and the Council can makes some 
serious changes and improvements to turn things around. At the same 
time, some things may not be possible at this point. Here are my views 
on what can and cannot be done at this point:

  (1) Allocation:

        While the sector system and some of its key elements are 
        greatly detested by me and many of my fellow industry members, 
        the system is here to stay for the foreseeable future. It could 
        have been done right; but it wasn't. Magnuson mandates are real 
        and now there are no real alternatives available to the 
        existing sector system. Therefore, it is critical to make the 
        existing sector system work and not pose unrealistic 
        alternatives that have the potential to strand more capital and 
        put more people out of business. Initiating programs that 
        assist fishermen with the capital needed to be active in the 
        fishery are essential for the fleet, especially for those that 
        have been adversely impacted by a hasty allocation formula 
        adopted by the Council through Amendment 16.

  (2) Access:

        With the strong encouragement of Congress, both the Council and 
        NMFS need to maximize fishery access by eliminating all 
        groundfish closures that are not critical for habitat 
        protection purposes. Increasing access to stocks in proximity 
        to small vessel fleets such as ours in Sector 10 will enhance 
        our cost efficiencies given high fuel and other costs and move 
        us toward financial viability.

        In addition, leasing additional quota of stocks in close 
        proximity will make a lot more business sense if that quota can 
        be more easily accessed in a cost efficient manner. For those 
        vessels that received very small catch-history based 
        allocations under Amendment 16, leasing is one of the few 
        options they have for improving their financial viability--but 
        again, only if that quota can be accessed in a more cost 
        efficient manner. Currently, the costs of leased quota coupled 
        with the cost of accessing that quota are prohibitive. Re-
        opening archaic near-shore groundfish mortality closures is a 
        critical step to addressing this problem.

        Finally to this point, please do not allow the Stellwagen Bank 
        Sanctuary staff to take yet another needless bite out of our 
        most important small- vessel fishing grounds. There are better 
        ways to achieve what they want by tapping into existing habitat 
        closures. They need to listen to the ideas of fishermen who 
        have spent generations on this Bank. Let's not forget 
        Stellwagen was established for the purpose of providing a 
        sanctuary for our centuries-old fishery.

  (3) At Sea Monitoring Costs:

        As described above, many groundfish stocks will have to rebuild 
        far more, our ability to more fully utilize those stocks will 
        have to increase substantially, and the overall financial 
        stability of the sectors will need to improve dramatically 
        before we can assume the costs of At-Sea Monitoring. This is 
        NOT going to happen in fishing year 2012.

        Notwithstanding the current requirement in Amendment 16 for the 
        industry to assume these costs next year, Congress and the 
        agency need to accept this reality and ensure that these costs 
        are fully funded in FY12 and probably FY13. We certainly 
        recognize the difficult budget climate you face in Washington 
        these days, but the consequence of not funding A-Sea monitoring 
        next year will be a collapse of the sector system and a whole 
        lot of New England fishermen contributing to the unemployment 
        rate.

        Based on findings from a report prepared by Marcus Hartley of 
        Northern Economics titled ``A Review of Observer and Monitoring 
        Programs in the Northeast, West Coast and Alaska,'' presented 
        to the New England Fishery Management Council on September 28, 
        2011, in 2010, the At Sea monitoring program for all sectors 
        cost $4.3 million, which equates to an average of 5.3 percent 
        of the ex-vessel revenue. However, in my vessel class, the 
        average amount was higher; 9.9 percent of the revenue--and my 
        business costs are even higher, 35 percent for one-day trip. On 
        top of all the other new costs associated with sectors, this is 
        simply unsustainable. My business can not afford this, nor can 
        any other business in the fishery. And, at a total cost of $4.3 
        million, the At Sea monitoring cost equates to $2.20 per pound 
        of discards--which is completely absurd in terms of cost/
        benefit.

        To this point, we are extremely grateful to Mr. Kerry and other 
        Senators for securing language in the Senate's bill to fund 
        NMFS in FY12 that makes it clear that NMFS must fully fund At-
        Sea monitoring of the groundfish fleet in fishing year 2012. We 
        can only hope and urge you to do everything you can to ensure 
        that this language will survive the difficult battles that lie 
        ahead in the FY12 appropriations process--and that this 
        monitoring is indeed fully funded next year.

  (4) ACLs:

        Thanks to you Mr. Kerry, and our other good friends in Congress 
        and the State of Massachusetts, an enormous effort was made to 
        get NMFS to adjust the initial ACLs for stocks managed under 
        Amendment 16. Even small upward adjustments to these ACLS that 
        would not have exceeded the overfishing limits could have made 
        a huge difference in several ways----

     reduce inflated leasing costs that prevent our small 
            vessel fleet from leasing our way out of the insufficient 
            initial allocations they received under Amendment 16;

     thaw the ``frozen'' sector trading system that is 
            essential for sector viability and greater OY utilization; 
            and

     increase the viability of individual fishermen with very 
            small PSC allocations.

        It seems there were two things that got in the way of the 
        agency using common sense. First were the National Standard 1 
        guidelines that have excess levels of precaution built into 
        multi-layers of buffers which results in ACLs being set far 
        below the Fmsy--the true overfishing limit. Congress should 
        look into what changes can be made to these guidelines--either 
        through statutory changes or otherwise--to achieve a greater 
        utilization of OY. We all know that science and management have 
        inherent uncertainties and risks, but these guidelines simply 
        went too far in trying to address those concerns.

        Second, it seems the agency was stymied by a pointlessly narrow 
        interpretation of its own guidelines for using its emergency 
        action authorities under the Magnuson-Stevens Act. Congress 
        should very seriously consider re-writing the emergency action 
        provisions in the statute to provide the agency with a more 
        useful level of flexibility when common sense dictates. There 
        should be a fail-safe mechanism built into the process when the 
        results of Council and/or Scientific and Statistical Committee 
        actions simply don't make sense and undermine the overarching 
        purposes of the Act. That is what we thought the emergency 
        actions provisions in the Act were meant to do--but clearly 
        they didn't work in the case of the groundfish ACLs.

  (5) Rebuilding:

        The bottom line is that we continue to under-harvest the 
        groundfish stocks at an alarming rate. The sector system has 
        not changed that and, in fact, the sector system will not 
        achieve its objectives unless we can fix this. More utilization 
        of the OY means more fish in the system--which will mitigate 
        most of the problems discussed at the hearing today.

        The current MSA provisions dictating arbitrary time-frames for 
        achieving a fully-rebuilt biomass has no basis in science and 
        has seriously undermined efficient fishery management and 
        caused immeasurable and needless financial harm to U.S. 
        fishermen. That is because we are leaving vast quantities of 
        sustainable yield in the ocean in order to rebuild a stock--not 
        according to nature--but according to an arbitrary deadline set 
        in a statute.

        The truth is, the only thing we can control is fishing 
        mortality. But that is only one component of what determines 
        if, how and when a stock achieves rebuilding. No one can 
        control the other 3 core components of recruitment, growth and 
        natural mortality--not Congress, not scientists and not 
        fishermen. And, as we see year after year in groundfish stock 
        assessments--not only are we completely unable to control those 
        aspects of population dynamics, we cannot predict them with 
        sufficient accuracy either.

        The rebuilding provisions of the Magnuson-Stevens Act need to 
        be reevaluated and revisited if we are ever going to be able to 
        solve this problem. But, even the most thoughtful efforts to do 
        this have been treated as if they are radioactive. We need some 
        real leadership in this arena. We are wasting our fish and 
        losing our fisheries. It's pointless.

        We understand that at the request of Congress, the National 
        Research Council may begin looking into this. We strongly 
        encourage this and hope that the right people will be appointed 
        to do this work, and that it will be a serious effort to find 
        improvements. We sincerely hope this will provide the basis for 
        Congress to take the difficult political steps needed to 
        improve the statute.

  (6) Financial Assistance:

        As mentioned above, through sectors our fishery has to absorb 
        unprecedented costs to establish and operate sectors. While 
        stocks have yet to rebuild and the sector system in its 
        infancy, it is extremely difficult if not impossible for 
        sectors to generate sufficient funds to meet these initial 
        start-up and operations costs. We have received some financial 
        support from the agency to date and frankly we could not have 
        made it this far without it. But we are far from solvency--at 
        least for my Sector 10. Additional direct financial support for 
        sector start-up and operational costs is desperately needed.

        Access to capital that is not readily available to the fleet is 
        also critical. While many of us have managed to hold onto our 
        permits this year, we literally cannot afford to fish. We 
        cannot afford the inflated quota leasing costs or the cost of 
        new permits with higher catch histories. We are stuck in 
        limbo--desperately wanting to fish and generate revenue, but 
        unable to buy our way out of port. While we hope and wait for 
        Congress or the Council to make changes that will improve our 
        circumstances, some form of financial assistance to those most 
        disadvantaged by the change in allocation currency from Days at 
        Sea to ``catch history'' will be needed to bridge that gap. We 
        ask you to seriously consider what Congress can do to help with 
        this.

    Thank you for the opportunity to present my views. I would be 
pleased to answer any questions.

    Senator Kerry. Mr. Diodati?

       STATEMENT OF PAUL DIODATI, DIRECTOR, MASSACHUSETTS

           DIVISION OF MARINE FISHERIES AND CO-CHAIR,

            MASSACHUSETTS MARINE FISHERIES INSTITUTE

    Mr. Diodati. Thank you, Senator. And I want to thank all of 
you Senators and Congressmen for having me here this morning. 
And I'm going to jump right to it, because 3 minutes is a very 
short time.
    I'm going to talk about a preliminary analysis that the 
Division of Marine Fisheries has conducted on Sector 10, which 
is the sector that Captain Welsh fishes out of. It's a day boat 
sector, operating out of the Plymouth-Scituate area. And for 
our gentlemen from Alaska, that's a mid-coast area for us. It's 
not only made up of small boats, but it could have been 
disproportionately impacted by this new program.
    Amendment 16 did allocate hard catch limits to comply with 
the MSA, to not only comply with MSA mandates but to achieve 
economic efficiency. Our conclusions from the case study 
suggest that there's been significant consolidation of revenues 
among fewer vessels. You've already heard that this morning. 
And it's caused severe economic strain among the majority of 
fishermen, most of whom are small vessels.
    Sector 10 began the 2010 year with 20 percent lower quota 
allocation, compared to its 2009 landings. They traded and 
leased quota but could not mitigate this difference. By the end 
of the year, their landings fell 60 percent below the previous 
year's level. Sector 10s reduction in landings contributed to a 
53 percent reduction in its groundfish revenue and a 23 percent 
reduction in its overall revenue.
    Reduced overall revenue occurred despite a significant 
shift into other non-groundfish fisheries--Steve mentioned dog 
fish, for instance--and higher prices paid for fish in 2010, 
the highest prices we've ever seen. A major point was large 
amounts of very valuable fish were left uncaught at the end of 
the year. And, Senator Kerry, you pointed out the matter of 
rolling over quota that's relevant to that. Other Massachusetts 
sectors also ended the year with uncaught quota. None, however, 
exceeded the amount left uncaught by Sector 10--nearly 50 
percent.
    We also did an analysis to determine that sector's 
breakeven points, where revenues equal total costs. And it 
shows an increase in number of permits not breaking even in 
2010. Nearly 50 percent of all active permits fell below the 
breakeven point. We haven't completed this for the fleet 
overall outside of Sector 10, but we expect similar results to 
show.
    So what's interesting is not only in 2010, but years prior 
to that, 2009 for instance, there were significant numbers of 
vessels not breaking even, suggesting that they're leaving 
their permits to be leased out. They're drawing on personal 
income, extending credit, shifting fishing costs to the crew, 
shrinking their crew size or postponing vessel maintenance. 
None of those are good deals for the fishing industry or the 
Commonwealth.
    A recent performance report that you spent a lot of time 
talking to Dr. Lubchenco about this morning was released by the 
National Marine Fisheries Service six months after the end of 
the season. It did show that one-third fewer boats have been 
operating in the fishery since 2007 every year. That report 
also increases--or illustrates an increase in the concentration 
of groundfish revenues among the top earning vessels, those 
over 75 feet.
    So these major shifts in distribution of quota or income 
into fewer fishing permits was noted five months into the 
fishing year by the Commonwealth's report that Governor Patrick 
forwarded to Secretary Locke back in November of 2010. So 
there's nothing new there.
    I'd like to offer a few solutions that might be helpful to 
mitigate some of the problems we're seeing. There's certainly 
need for liquidity and certainty in the lease marketplace for 
quota. A central database that tracks trading and provides 
real-time accounting of landings and quota balances would 
ultimately improve business planning for fishermen, and it 
would help fishermen build and better manage their quota 
portfolios.
    And while there are economic efficiencies that we're 
seeing, these benefits are not widespread throughout the 
industry and generally not enough to counter the high cost of 
monitoring. So we strongly recommend that NMFS continues to pay 
for monitoring of the fishery and administration of sectors 
beyond the year that they plan on stopping.
    A redistribution and concentration of revenue and less 
capital leaves smaller scale vessels disproportionately 
impacted. So we recommend government-funded loan programs to 
assist small business operators, in particular, with equity and 
opportunity to lease more quota.
    So I'll stop there, Senator, and answer----
    [The prepared statement of Mr. Diodati follows:]

Prepared Statement of Paul Diodati, Director, Massachusetts Division of 
Marine Fisheries and Co-Chair, Massachusetts Marine Fisheries Institute

    Good morning Chairman and other members of the Committee. My name 
is Paul Diodati, and I want to thank you all very much for the 
opportunity to share a few thoughts about how catch share management, 
in general, and sectors, in particular, have affected the health of the 
Massachusetts groundfish fishery.
    I am the Director of the Massachusetts Division of Marine 
Fisheries, and Co-Chair of the Massachusetts Marine Fisheries 
Institute. I am the Commonwealth's Administrative Member to the New 
England Fisheries Management Council and the Atlantic States Marine 
Fisheries Commission. For over thirty years I have trained and worked 
in fisheries science and management at the regional and national level.
    With the majority of sectors operating out of Massachusetts ports, 
the Commonwealth has a strong interest in promoting the effective 
transition to catch shares in New England, while minimizing any 
potential adverse social-economic impacts to fishing communities and 
businesses that are sometimes attributed to catch share programs. We 
understand the difficulty our industry is having adapting to the 
cultural change that accompanies sector management. At the same time, 
we can't forget the severe hardships endured by our fishermen under the 
former Days-at-Sea Program (DAS) that returned too little in 
conservation benefit. The Patrick-Murray Administration has voiced 
strong concerns with the sector program's implementation and urges 
applying the highest annual catch levels when alternatives are 
permissible and use of cooperative research to improve stock 
assessment.
    The Division of Marine Fisheries conducted a case study of 
Northeast Fishery Sector 10 (a day-boat sector operating out of the 
Plymouth-Scituate area) in order to identify major impacts posed by 
Amendment 16 (catch shares). I wish to thank the Sector 10 members and 
manager for their willingness to share confidential information with 
the Division to better enlighten us all about what is occurring within 
sectors. Amendment 16 initiated this catch share program with hard 
catch limits (quotas) in place of days-at-sea restrictions to meet the 
2006 MSA mandate to implement Annual Catch Limits (ACLs) and 
Accountability Measures (AMs), and to achieve economic efficiency. It 
is our conclusion from this case study that although vessel and permit 
consolidation have created some economic efficiencies it has not 
resulted in greater profitability.
    Our review does not consider the merits of an input vs. output 
control program to manage fisheries or if quota allocation was done in 
a rational way. Comparing fisheries performance between 2009 and 2010 
requires much more economic analysis and social research to accurately 
explain changes occurring in our fishing fleet, fishing communities, 
and seafood markets and to correctly identify the responsible causative 
factors.
    To put this daunting task in context consider some of the variables 
in play in 2010:

   Annual Catch Levels (ACLs) were reduced 30 percent from 
        2009;

   Total Allowable Catches (TACs) were enforced;

   assumed dead discards were newly applied to reduce ACLs;

   nominal daily trip limits were abandoned;

   closed areas were reopened;

   management and monitoring costs were shared by industry;

   stock areas were off limits to fishermen unless their sector 
        had sufficient amount of quota for that stock area;

   and an unrestricted market for sector Annual Catch 
        Entitlement (ACE) leasing was put in place with no central 
        system to track the exchange of quota between sectors available 
        to fisheries managers.

    The National Marine Fisheries Service is working to generate more 
information about fishery performance and the Division will continue 
cooperative efforts to assist in these analyses. The Sector 10 case 
study on which I will focus only considers Amendment 16's economic 
outcome. **
    Sector 10 began the fishing year with a 20 percent lower landing 
allocation compared to 2009 landings; reductions for some individual 
fishermen were even higher. Actual 2010 landings fell even lower--60 
percent below the previous year's level. Trading and leasing could not 
mitigate the general insecurity with new sector business practices. For 
example, there were unknowns about how discard mortality would affect 
an individual's share of quota, or Percent Sector Contribution (PSC); 
and concerns about lack of certain species in one's quota portfolio.
    Sector 10's reduction in groundfish landings contributed to a 53 
percent reduction ($1.5 million) in its groundfish revenue and 23 
percent reduction ($1.0 million) in its overall revenue. Reduced 
overall revenue occurred despite a significant shift into other non-
groundfish fisheries (such as dogfish, lobster, and squid) by some of 
its members and higher average prices paid for all fish than in prior 
years. A major point being, large amounts of valuable fish, including 
fish that were leased in by Sector 10, were left uncaught. Discussions 
with non-sector 10 fishermen suggest other Massachusetts sectors also 
ended the 2010 fishing year with uncaught ACE; but we cannot identify 
another sector that exceeded Sector 10 in the amount of relative 
uncaught ACE (50 percent).
    We conducted an analysis to determine break-even points, where 
total revenues equal total costs, which shows an increase in the number 
of permits that did not break-even. In 2010 nearly 50 percent of active 
permits fell below the break-even point. We haven't been able to 
complete a direct comparison of this with the entire fleet in time for 
this hearing, although we expect fleet-wide analysis is likely to show 
similar results. We also found a significant number of fishing 
businesses were operating below break-even points in years prior to 
2010. Many fishermen are trying to survive by drawing on personal 
income or extended credit, shifting more fishing costs to crew or 
shrinking crew size, or postponing vessel maintenance.
    A recent performance report of the 2010 groundfish fishery issued 
by NOAA Fisheries' Northeast Fisheries Science Center demonstrates that 
fewer boats, about one-third fewer each year since 2007, have been 
operating in the groundfish fishery. The Federal report also 
illustrates an increasing concentration of groundfish revenues among 
the top earning vessels, vessels greater than 75 feet. Only 20 percent 
of vessels accounted for about 80 percent of gross groundfish revenues. 
This sign of consolidation is confirmed by an earlier report prepared 
by the Massachusetts Marine Fisheries Institute (MFI), which Governor 
Patrick forwarded to Secretary Locke in November 2010. The MFI reported 
major shifts in the distribution of quota (income) as noted by as much 
as two-thirds of fishing permits that were allocated 50 to 60 percent 
less than their 2007-2009 average annual harvest levels.
    The transition to catch shares under Amendment 16 has been 
difficult in terms of the program's allocation determinations and 
socioeconomic impacts, and many of the challenges cannot be measured in 
a single fisheries science report. Looking to the future, I'd like to 
offer possible solutions to mitigate some of the impacts we identified.
    Solution 1--There is need for liquidity and certainty in the lease 
marketplace for ACE and a need for fishermen to have a better 
understanding of how to succeed under sector management. A central 
database that tracks all ACE trading activity and provides real-time 
accounting of ACE balances would assist in exchanging quota between 
sectors and ultimately improve business planning for individual 
fishermen. Additionally, I believe it would be of benefit for NOAA to 
implement training programs for sector fishermen to assist in building 
and managing their quota portfolios.
    Solution 2--While sector management created economic efficiencies 
for some members of the fishery, these opportunities were not 
widespread and generally not enough to counter high costs of monitoring 
and operating fishing businesses. NOAA should work to reduce at-sea 
monitoring costs while continuing to fund sector monitoring and 
administration. We believe such assistance will help push the balance 
of break-even points toward the black for more fishermen as they adjust 
to and learn how to prepare and implement annual sector business plans.
    Solution 3--Redistribution and concentration of revenue and less 
access to capital leaves smaller-scale vessels disproportionately 
impacted by sector management. Government assisted loan programs for 
quota leasing should be established throughout the Northeast to aid 
small-scale, owner-operated fishing businesses for those who lack 
sufficient valuation to obtain loans from conventional finance 
institutions. Additionally, more work needs to be done to allow a 
higher percentage of unused quota to reach the marketplace.
    Finally, in context of a new management system that presents a 
steep learning curve for both fishermen and managers, I would ask you 
to urge the Secretary of Commerce to instruct his staff to discourage 
adding large uncertainty buffers that may unnecessarily lower annual 
catch levels and to define overfishing limits from direct estimates of 
FMSY and BMSY when they are available and 
defensible. Maintaining ACLs at the highest level during the next few 
years will contribute toward economic viability of more segments of the 
fishery, particularly the small-boat segment. Increased amounts of ACL 
will become more valuable as fishermen adjust to new sector business 
practices and begin to make full use of their annual quota.
    The Commonwealth is committed to working cooperatively with the 
Federal agencies, fishermen, our Congressional delegation, and local 
officials to meet these challenges. I hope my testimony will assist the 
Committee formulate remedies to improve the operation of our groundfish 
fishery. I'd be glad to answer any questions.

    Senator Kerry. We'll get onto it--we'll get into it in the 
questioning.
    Mr. Diodati. OK.
    Senator Kerry. A lot of this will come out. So don't feel 
you're being shortchanged because there's time yet.
    Mr. Cunningham?

 STATEMENT OF COLIN McALLISTER ``RIP'' CUNNINGHAM, JR., ACTING 
        CHAIRMAN, NORTHEAST FISHERIES MANAGEMENT COUNCIL

    Mr. Cunningham. Senator, other committee members, and 
Massachusetts delegation, thank you.
    I have three areas of discussion. First is the management 
review report. The challenges and improvements detailed in the 
report are currently being implemented by the leadership of 
NOAA Fisheries, the Northeast Fisheries Science Center, and the 
Council.
    The Council agreed to take a lead on improving 
communication and collaboration with stakeholders, creating a 
regional vision and a strategic plan, and designing a cost-
effective performance management system. Based on work 
completed over the summer, the full Council approved a series 
of actions that will accomplish these initiatives, all of which 
we expect to be completed in the near future.
    First years of sectors--concerning NOAA's recently released 
sector economic report, the analysis did not include all key 
data. Additional work will be released later in the fall and 
will represent a more complete and useful picture. One unstated 
fact is that fewer days fishing has meant substantial savings 
in operating costs and benefits from reduced habitat impact. 
The new system has also allowed a redirection of fishing effort 
onto robust stocks.
    The report highlights consolidation, but it began well 
before the implementation of sectors. The increases in total 
revenues for vessels with groundfish permits happened at the 
same time that Magnuson mandated over 50 percent decreases in 
allowable catch for some species, showing the value of sectors.
    Until May 2010, the much-derided groundfish Days-at-Sea 
program was in effect, and the program made it very difficult 
to remain economically viable. There was simply no stability in 
management regime. In addition to limits on the number of 
available days to fish, there were a myriad of other rules 
depending on gear type, areas fished, species harvested. 
Management was by mandated inefficiencies.
    With implementation of sectors, many old rules were 
eliminated. Fishermen can respond to market conditions, weather 
concerns, and reduce wasteful discards. With greater 
flexibility, sectors can avoid any race to fish which results 
in lower prices to the fishermen.
    While sectors have remedied some problems in the fishery, 
others have emerged. So the Council scheduled a 2-day workshop 
in late October to hear directly from the 17 sectors about the 
performance of the system. The Council hopes to include any 
practicable solutions in follow up actions in 2012.
    Senator Kerry, I realize that you, along with Congressmen 
Frank and Keating, are concerned about the unused rollover. 
There was discussion about it here earlier. We do have the 10 
percent provision in there. But recognizing it's still an 
issue, we've put it back on the table because we realize it 
increases flexibility for fishermen.
    Our New England delegation has advised the Council of their 
concerns about the NOAA-funded, state-operated permit banks. 
The Council agrees that it's essential to ensure that outcomes 
match their intended purpose to preserve fishing opportunities 
for small owner-operated fishing businesses in the New England 
communities. Hopefully, we can get to some of the ACL things, 
but I see my time is running out.
    In summary, given the reductions in catch needed to meet 
the Magnuson requirements under National Standard 1, sectors 
emerged as the best viable option to replace the Days-at-Sea 
management regime that was slowly strangling the New England 
groundfish industry.
    Thank you.
    [The prepared statement of Mr. Cunningham follows:]

Prepared Statement of Colin McAllister ``RIP'' Cunningham, Jr., Acting 
            Chairman, Northeast Fisheries Management Council

    Good morning Senator Kerry and other members of the New England 
Congressional delegation. On behalf of the New England Fishery 
Management Council, I am pleased to respond to your invitation and hope 
that I can be helpful to you and the other members of the Committee, as 
well as any members of the fishing community who are present at this 
hearing.
    Before I begin, I would like to offer a few details about my 
background. I have served on the Council since 2004 and was just 
recently elected Chairman. I was elected to the Vice Chair position for 
each of the last 5 years. During this same period I chaired the 
Council's Northeast Multispecies or Groundfish Committee, which 
includes the time-frame in which the Council adopted the catch shares 
program known as sectors. I was the former owner, publisher and editor-
in-chief of Salt Water Sportsman, the world's largest sport fishing 
magazine, with approximately four million readers. I am privileged to 
have made a living by advocating for our region's valuable marine 
fisheries while also enjoying many years of recreational fishing.
    I have stated this before, but it I believe it is worth repeating 
to this committee. With 18 voting members on the New England Fishery 
Council, there often are 18 different opinions about the problems we 
face and their solutions. As a result, my comments may not represent 
the opinion of any individual member or the official position of the 
Council, but I will try to convey the sense of the Council as a body in 
this testimony and in my answers to any questions you might have.
    I would like to talk about several broad topics today:

        (1) The report authored by Preston Pate and the Touchstone 
        Consulting Group titled A Review of the New England Fishery 
        Management Process;

        (2) My views about the first year of sector management in the 
        New England groundfish fishery with some comments about 
        relatively recent and future Council actions; and

        (3) Issues identified by Members of Congress, including the 
        inability of vessels to harvest the groundfish annual catch 
        limits.

    Touchstone Report--Many of the challenges and needed improvements 
detailed in the report have already been discussed among the leadership 
of NOAA's Fisheries Service in Gloucester, the Northeast Fisheries 
Science Center in Woods Hole and the Fishery Management Council. During 
our talks, the Council agreed to take the lead on:

   Improving communication and collaboration with stakeholders, 
        including redesigning Council and other meetings to facilitate 
        this outcome;

   Creating a regional vision and strategic plan that will 
        incorporate collaboration with all stakeholders and set a 
        future direction for the fishery, more on that in a moment; and

   Designing a cost-effective performance management system to 
        track the progress of decisions, capture lessons learned and 
        incorporate best practices.

    Based on work completed over the summer, the full Council approved 
a series of actions that will accomplish these initiatives: (1) holding 
additional, less formal types of meetings to promote a more productive 
dialogue between the Council and the fishing industry; (2) establishing 
an ad hoc committee of stakeholders to advise the Council and its staff 
about the most effective types of outreach; (3) possibly convening 
listening sessions at which stakeholders will have an opportunity to 
query Council members about fisheries management issues rather than 
vice-versa; (4) simplifying and coordinating communications with the 
National Marine Service; (5) developing a vision and strategic plan 
with a core structure that evolves from an ecosystems-based approach to 
fisheries management; and finally (6) developing and implementing a 
system to track and evaluate the development and effectiveness of the 
Council's decisions, as well as document ``lessons learned.''
    Remarks About the First Year of ``Sectors''--I would like to 
discuss several of the findings in NOAA's recently released social and 
economic report, some, but not all of which have been covered by the 
media. First, we know the analysis that formed the basis of the report 
did not include all key data. Additional work scheduled to be released 
later in the fall will likely present a more complete and useful 
picture.
    Second, we also know that fewer days fishing has meant substantial 
savings in operating costs and benefits from reduced habitat impacts.
    Third, many of the changes that occurred between the earlier years 
analyzed and 2010 reflect trends that have been documented since 2007. 
I believe it is clear that consolidation began well before the 
implementation of sectors. Other changes include declines in the number 
of active vessels and crew and a gradually increasing concentration of 
revenues among top earning vessels. On the other hand, we also see that 
the most recent trends include increases in total revenues for vessels 
with limited access groundfish permits (generally full-time active 
vessels), as a result of increased prices for both groundfish and non-
groundfish species. The new system has allowed a redirection of fishing 
effort, or fishing pressure, onto robust stocks.
    While some of the findings are of concern, I would like to put them 
in context. You may recall that until May 2010, the much-derided 
groundfish days-at sea program was in effect for three out of the 4-
years evaluated in the report. Limited fishing days resulted in 
measurable stock rebuilding, but the program made it difficult for many 
businesses to remain economically viable.
    In addition to limits on the number of available days to fish, 
there were restrictions on the quantities of fish that could be 
harvested (daily or trip limits), the mesh sizes in fishing nets, the 
sizes of fish that could be caught, closed areas and a myriad of other 
rules, depending on gear type as well as the areas and species 
harvested. Most were mandated inefficiencies.
    With implementation of the new program, many of the old rules were 
eliminated. Under sectors fishermen could better respond to market 
conditions, weather concerns and reduce wasteful discards. With greater 
flexibility, sector members could avoid any ``race to fish,'' a 
circumstance that frequently produces a temporary oversupply in the 
marketplace, resulting in lower prices to fish harvesters. The 
increased economic performance in terms of higher revenues per unit of 
effort by sector vessels noted in the economic report may be reflection 
of some of the benefits of sector management.
    Even so, the Council remains concerned about the problems 
confronted by many New England groundfish fishermen. According to the 
NOAA economic report, the total groundfish catch, which includes cod, 
haddock and various flounders, was down to about 58 million pounds last 
year. Landings had ranged from 64 to 72 million pounds annually between 
2007 and 2009.
    From my perspective, the situation may have less to do with sectors 
than is assumed when viewed in the context of the health of our 
groundfish stocks. More than half of the 20 stocks in the groundfish 
complex are still overfished and therefore subject to strict rebuilding 
programs. Stocks are still required to be rebuilt as quickly as 
possible and within a period not to exceed 10 years, with few 
exceptions, according to the reauthorized Magnuson-Stevens Act.
    While sector management has remedied some problems in the fishery, 
others have emerged. As a step toward making improvements, the Council 
has scheduled a two-day workshop in late October to hear directly from 
the 17 sector managers and their members about the performance of the 
sector system and recommended changes that would help their businesses. 
The Council hopes to include any practicable solutions in a follow-up 
groundfish action in 2012.
    We also are aware that paying for monitoring may be out of reach 
for the average fishermen. Although the Council is not constituted to 
fund such programs, it has supported a new and hopefully constructive 
dialogue that will help resolve this very critical problem.
    Fears concerning the loss of fleet diversity and fleet 
consolidation have been expressed by many from within and outside the 
industry. Heeding those concerns, the Council has agreed to develop 
measures that will address both accumulation limits and fleet 
diversity. The Council also may create other incentives to maintain 
diversity and fishery infrastructure.
    I am also aware of additional issues that merit attention. Senator 
Kerry, I realize that you, along with Congressmen Frank and Keating, 
are concerned about the unused groundfish quota from fishing year 2010 
that otherwise might be rolled over into the next fishing year. Some 
additional information about the existing measure might be useful.
    The Council knows that carry-over provisions are common in other 
catch-share systems around the country and adopted a measure that 
limits the New England groundfish fleet to 10 percent of the 
allocations. This amount is in the mid-range of carry-over percentages 
that are included in other catch share programs that were reviewed by 
the Council.
    The Council is willing to revisit the issue, but must carefully 
examine the associated problem of increasing the risk of overfishing. 
As with any roll-over, the same number of fish may or may not be 
available in the following year, either because of natural mortality, 
potential over-harvesting or discarding. These possibilities are of 
particular concern with respect to the stocks in rebuilding programs. 
Nonetheless, the Council has already put the issue on the table, 
recognizing that carry-overs increase flexibility for fishermen and 
reduce potentially dangerous fishing practices such as a rush to catch 
all the available fish at the end of the year.
    I also realize that our New England Senators have advised the 
Service and Council of their concerns about the NOAA-funded, state-
operated permit banks. The Council agrees that it is essential to 
ensure that outcomes match their intended purpose--to preserve fishing 
opportunities for small, owner-operated fishing operations in New 
England communities that might otherwise be struggling with the 
transition to the groundfish sector catch-share program.
    At its Council meeting in June, concerns were raised that these 
permit banks could affect the market for groundfish permits. To enhance 
coordination with these entities, the Council has requested that state-
operated permit banks come to the Council for approval prior to using 
funds other than those provided by NOAA.
    Groundfish Annual Catch Limits--The Council has received comments 
to the effect that groundfish boats have had very limited success in 
harvesting the annual catch limits (ACLs) of the 20 Council-managed 
groundfish stocks. The biggest impediment is the potential to exceed 
the catch limits for some stocks, often referred to as ``choke 
stocks,'' before fishermen can catch the ACLs for other stocks.
    This is a problem common to all multispecies fisheries throughout 
the world. In some cases, weaker stocks have low ACLs because they have 
been overfished and rebuilding is required. Others are simply smaller 
and less productive than those that have traditionally supported the 
New England groundfish fleet.
    For example, in 2011 the ACL of Georges Bank yellowtail flounder, 
and to some extent cod, limited the fleet's ability to catch the large 
ACL of Georges Bank haddock. The uncaught ACL of Georges Bank haddock 
accounted for 68 percent of the total ACL of all stocks not caught.
    Also contributing substantially to the uncaught ACLs were redfish 
and pollock. To some extent the lack of markets and processing capacity 
limited the catch of redfish. As another example, the 2010 pollock ACL 
was about 36 million pounds, or more than twice the five-year average 
catch from 2005-2009. This very large increase, made available within a 
relatively short time frame because of a revised stock assessment, made 
it unlikely that the vessels would catch all of the ACL under any 
circumstances. Added together, the uncaught pollock, Georges Bank 
haddock, and redfish accounted for 93 percent of the total uncaught 
ACLs of all stocks.
    Another factor contributing to the large amount of uncaught fish 
may relate to the start-up aspects of the sector program. Under similar 
management systems that have been adopted in other fisheries, it has 
taken several years before the fleets land a high percentage of the 
available fish. The Council is keenly aware of this situation and will 
closely monitor progress toward reaching the groundfish ACLs. Current 
projections indicate that a higher percentage will be caught in this 
fishing year.
    Conclusions--Summarizing some of my earlier comments, given the 
reductions in catch needed to meet the Magnuson-Stevens Act 
requirements under National Standard 1, sectors emerged as the best 
option to replace the days-at-sea management regime that was slowly 
strangling the New England groundfish industry.
    This does not mean that the Council has lost sight of National 
Standard 8. It seems clear that one of the keys to sustaining fishing 
communities is to ensure the economic viability of our fishing fleets. 
Long-term success will not likely be achieved by simply raising fishing 
levels. New England fishermen have already lived through that 
expedient, but not very prudent course of action during the 1980s and 
early 90s.
    Based on our experience, sound science and working collaboratively 
with fishermen, the Council is intent on continuing the important stock 
rebuilding accomplished to date and maintaining stocks at sustainable 
levels. We also intend to improve the groundfish sector management 
program. The Council and many fishermen are working hard right now to 
adjust to changing resource and economic conditions. The problems we 
all confront are difficult but not insurmountable.
    Senator Kerry and members of the Massachusetts delegation, on 
behalf of the New England Council, I hope my comments are helpful to 
you as you continue to engage in discussions about the groundfish 
fishery. I am available now or in the future to answer any questions.

    Senator Kerry. Thank you very much, Mr. Cunningham.
    Mr. Cadrin?

STATEMENT OF STEVEN X. CADRIN, ASSOCIATE PROFESSOR, DEPARTMENT 
   OF FISHERIES OCEANOGRAPHY, SCHOOL FOR MARINE SCIENCE AND 
                   TECHNOLOGY, UNIVERSITY OF 
                    MASSACHUSETTS DARTMOUTH

    Dr. Cadrin. Thanks for the invitation to testify. I'm Steve 
Cadrin. I'm a Professor of Fisheries Oceanography at the 
University of Massachusetts School for Marine Science and 
Technology. I was asked to address the scientific aspects of 
fishery science in New England.
    In comparison to other systems throughout the world, 
fishery management in the United States is relatively 
inclusive, transparent, and science-based. However, the catch 
limit system and NOAA's catch shares policy are much more 
demanding than other alternatives. And from my perspective, the 
current fishery science system in New England is not meeting 
those increased demands.
    New England fisheries management has made great strides 
over the last decade to end overfishing and rebuild many 
stocks. However, there are major deficiencies in the quality 
and frequency of stock assessments and fishery statistics. The 
fishery management strategy needs to be reconsidered so that 
system requirements are more suited to the current scientific 
capacity.
    Specification of annual catch limits requires frequent 
assessments and projected catch over one to two years. Catch 
limits based on longer term predictions are based more on 
assumptions than on data. In addition to the need for frequent 
stock assessments, accuracy is also required to determine 
appropriate catch limits.
    Many assessments are data-poor and not informative enough 
to estimate catch limits that avoid overfishing while achieving 
optimum yield. Other stock assessments are more informative but 
still have substantial uncertainties that cannot be quantified 
or used to determine catch limits. A troubling feature of many 
stock assessments is the lack of consistency from one stock 
assessment to the next.
    Beyond the need for frequent and accurate stock 
assessments, scientific support for catch limits involves in-
season fishery monitoring that's timely enough to support catch 
share policy. Major components of total catch, such as 
commercial fishery discards, recreational fishery catch, and 
location of fishing effort are not well determined, and 
estimates are not available in a timely fashion.
    Many fisheries harvest a mix of species. When stock size is 
underestimated, catch limits are lower than they should be. And 
fishermen have difficulty avoiding the species that have 
artificially low catch limits. Furthermore, when some species 
are rebuilding, their catch limits remain relatively low while 
the stock rebuilds, thereby increasing the challenge of 
avoiding them while targeting healthy stocks.
    These problems are then intensified when accountability 
measures further reduce catch limits on rebuilding or bycatch 
stocks, thereby increasing the mismatch between the catch 
limits and the mix of species on the fishing grounds. As a 
result of the mixed stock problem, the groundfish fishery 
caught less than 40 percent of the allocated catch in 2010. 
Landings of haddock, plaice, pollock, and redfish in 2010 were 
less than half their catch limits.
    Ending overfishing is a great accomplishment. But we need 
to refine our fishery management plans to progress toward the 
mandated optimum yields. National Standard guidelines suggest 
that catch limits should be based on the council's desired risk 
of overfishing. However, risk management decisions require 
evaluation of economic costs and benefits that are not 
routinely provided.
    There are several potential solutions to help improve the 
scientific capacity for supporting annual catch limits. 
Scientific resources can be increased or reprioritized. The 
peer review process can be streamlined. NOAA's scientific 
capacity can be expanded by partnering with other institutions. 
And the scientific and statistical committee can serve peer 
review and problem solving roles.
    The demands on fishery science can also be reduced in 
several ways. Exemptions from annual catch limits should be 
considered when catch cannot be reliably monitored. The mixed-
stock exemption should be considered for bycatch and rebuilding 
stocks. And, more strategically, alternative management 
procedures should be considered that take advantage of the 
strengths of fishery science.
    In summary, the positive expectations of the catch limit 
system and NOAA's catch shares policy depend on greater 
scientific capacity than is currently being provided. Thanks 
again for the invitation to testify.
    [The prepared statement of Dr. Cadrin follows:]

Prepared Statement of Steven X. Cadrin, Associate Professor, Department 
 of Fisheries Oceanography, School for Marine Science and Technology, 
                 University of Massachusetts Dartmouth

    I thank the members of the Committee for the invitation to testify 
before you today. My name is Steven Cadrin. I am an Associate Professor 
of Fisheries Oceanography at the University of Massachusetts Dartmouth, 
School for Marine Science and Technology. I have over twenty years of 
experience as a quantitative fisheries scientist with expertise in fish 
stock assessment and fishery management. I was asked to address 
scientific aspects of fisheries management in New England.
    In comparison to other fisheries management systems throughout the 
world, the system in the United States is relatively inclusive, 
transparent and science-based. However, the catch limit system 
specified by National Standard Guidelines (NOAA 2009) and NOAA's catch 
shares policy (NOAA 2010) are much more demanding than other 
alternatives, because they require greater transparency in catch 
monitoring, more extensive inclusiveness in fishery management 
decisions and more frequent and accurate scientific products. As 
detailed below, the current fishery science and management system in 
New England is not meeting those increased demands.
    The New England fisheries management system has made great strides 
over the last decade to end overfishing and rebuild many stocks. 
However, there are several major deficiencies in our current fisheries 
science system that do not adequately support the requirements of catch 
limit and catch shares management policies. There are major 
deficiencies in the quality and frequency of stock assessments and 
fishery statistics, and National Standard Guidelines for implementing 
the Act pose unrealistic demands on the scientific system. The national 
strategy for fishery management needs to be reconsidered so that 
demands on the scientific system are more practically suited to the 
current scientific capacity and performance of the management system is 
more robust to the inherent uncertainties in fisheries science.
    My view is supported by two recent reviews that were commissioned 
by the National Marine Fisheries Service. A recent national review on 
scientific institution building concluded that ``NMFS needs more 
national scientific leadership, and better management, information 
systems and organizational structures, to plan and implement national 
programs,'' and ``this problem has ramifications with respect to the 
science based roots of the agency and science as the foundation for 
policy and management'' (Sissenwine and Rothschild 2011). An 
independent assessment of the fishery management system in New England 
identified problems and challenges and formed recommendations including 
``conduct a comprehensive analysis of all NMFS data systems to identify 
areas that will improve data gathering, data management, data analysis 
and data use'' (Touchstone Consulting Group 2011).
    New requirements of the 2007 amendment to the Act impose 
substantially greater demands on the fishery science and management 
system. The current scientific capacity was more adequate for meeting 
the requirements of the previous version of the National Standard 
Guidelines which focused on status determination (i.e., relative stock 
size, sustainability of harvest) and general management advice. Even 
state-of-the-art fishery science cannot fully support the risk-based 
catch limits with accountability measures suggested in the current 
Guidelines.
    Several examples demonstrate that the failure to effectively adapt 
to new requirements negatively impact fisheries, fishery resources and 
the Massachusetts communities that depend on them. National Standard 
Guidelines suggest that catch limits should be based on an estimate of 
the catch associated with overfishing and uncertainty in the estimate 
of the overfishing limit, or the catch that will allow rebuilding of 
overfished stocks; and fisheries should be held accountable for 
exceeding catch limits. Such implementation of the catch limit mandate 
requires frequent and accurate stock assessments, comprehensive and 
real-time fishery monitoring, as well as risk analysis for each 
fishery. Although the Act establishes National Standard 1 so that 
``Conservation and management measures shall prevent overfishing while 
achieving, on a continuing basis, the optimum yield from each fishery 
for the United States fishing industry,'' deficiencies in the 
scientific basis of fishery management decisions can result in either 
foregone yield or overfishing, both of which are costly to 
Massachusetts fisheries and fishing communities.
    As implemented in the National Standard Guidelines, specification 
of annual catch limits requires frequent stock assessments and 
projected catch over a short period (e.g., one to three years). Stock 
assessment involves an update of the most recent fishery statistics and 
resource surveys to evaluate stock status and provide a basis for catch 
forecasts. Catch limits that are based on recent stock assessments and 
short-term projections take advantage of the strengths of conventional 
fishery science, in which catch forecasts are almost entirely based on 
a synthesis of updated fishery and survey observations. Conversely, 
catch limits based on longer-term predictions (e.g., greater than 3 
years) are based largely on assumed population dynamics rather than on 
current data. Long-term predictions rely on the ability to predict 
annual recruitment of young fish and their future vital rates, which 
are the most challenging problems in fishery science.
    New England groundfish, our Nation's oldest commercial fishery 
resource and one of its most productive, serves as an example of the 
inadequate frequency and quality of stock assessments provided by NOAA 
for fishery management decisions. NOAA concluded that it did not have 
the capacity to provide annual stock assessments for all northeast 
fisheries (Northeast Fisheries Science Center 2009). As a result of 
this deficiency in scientific resources, the planned approach for 
specifying catch limits for the groundfish fishery from 2012 to 2014 
was medium-term catch forecasts, five to 7 years from the 2008 stock 
assessments. The New England Fisheries Management Council's Scientific 
and Statistical Committee advised the Fishery Management Council that 
``Projection of results from GARM III assessments to 2013-2014 were 
deemed to be too unreliable for setting ABCs'' (Acceptable Biological 
Catches). The Northeast Regional Coordinating Committee is in the 
process of revising its assessment and peer review process, and 
groundfish assessments are planned to be updated this winter. However, 
the process for updating groundfish assessments is still under 
development, and the current scientific basis for groundfish catch 
limits is insufficient.
    In addition to the need for frequent stock assessments, accuracy is 
also required to determine appropriate catch limits. Only a small 
portion of stock assessments can accurately project catch associated 
with overfishing and its uncertainty, which is the technical basis of 
the National Standard Guidelines for deriving annual catch limits. Many 
assessments are data-poor, and are not informative enough to reliably 
evaluate stock size, fishing mortality, maximum sustainable yield 
reference points or catch projections to determine catch associated 
with overfishing. National Standard Guidelines suggest that Councils 
should be more precautionary in the face of such uncertainty, leading 
to lower catch limits and potential economic impacts as a result of 
scientific uncertainty. Despite the obvious deficiencies of data-poor 
stock assessments, the National Standard Guidelines require annual 
catch limits for all stocks, with few exceptions.
    The New England skate complex offers an example in which fishery 
landings cannot be identified by species. Mixed-species catch limits 
are required to meet separate-species management objectives for ending 
overfishing and rebuilding overfished stocks. In such data-poor 
situations, catch limits are largely based on expert opinion, and their 
performance for meeting fishery management objectives is unknown. 
Requiring catch limits for data-poor stocks can result in fisheries 
constraints that are not consistent with the objectives of avoiding 
overfishing, rebuilding stocks or achieving optimum yield. For example, 
the two targeted species of New England skates rebuilt under a 20,000 
lb trip limit, but implementation of the catch limit system required a 
reduction to 500 lb per trip after the stocks rebuilt.
    Other stock assessments are more informative than those for data-
poor stocks, but still have substantial uncertainties that cannot be 
quantified or used to determine catch limits. A troubling feature of 
many stock assessments in each coastal region of the U.S. is the lack 
of consistency from one stock assessment to the next. Retrospective 
inconsistency is the change in perception of previous stock size or 
fishing mortality when new data are added to the assessment. Managing a 
fishery based on an assessment with retrospective inconsistency 
involves setting an apparently appropriate catch that in retrospect 
caused substantial overfishing or foregone yield.
    The fishery for Georges Bank yellowtail flounder, one of the 
principle groundfish stocks off New England, is an example of the 
frustrating and costly impact of retrospective inconsistency. From 1999 
to 2006, the fishery caught less than the catch limit advised by the 
scientific process in each year. However, the 2011 stock assessment 
indicates that those apparently appropriate catches produced 
overfishing each year, in some years more than five times the 
overfishing threshold (Transboundary Resources Assessment Committee 
2011). Despite efforts to correct the stock assessment, the 
retrospective problem continues to obfuscate perceptions of stock 
status and obstruct attempts to manage the fishery or rebuild the 
resource. After decades of overfishing, in the face of severe 
restrictions to the fishery, the assessment indicates that the stock 
cannot rebuild within the desired timeframe, even with no fishery.
    Beyond the need for frequent and accurate stock assessments, 
scientific support for catch limits involves in-season fishery 
monitoring that is timely enough to inform future catch limits and 
support fishery-dependent business decisions in a catch share 
management system. Several transitions to electronic monitoring have 
improved the timely collection and reporting of landings from 
commercial fisheries. However, other components of total catch such as 
commercial fishery discards, recreational fishery catch, and location 
of fishing effort are not well estimated, and estimates are not 
available in a timely fashion. Uncertainty and slow delivery of catch 
statistics precludes in-season management or adaptive fishing decisions 
to optimize catch allocations, incurring considerable costs to 
fisheries and fishing communities. In addition, accountability for 
overfishing is being implemented in a way in which fisheries ``pay 
back'' any catch that exceeds the annual catch limit in the form a 
reduced catch limit in the subsequent year. Such an implementation 
requires accurate in-season monitoring to allow fisheries to manage 
their own catch to avoid exceeding their catch limits and resulting 
accountability measures.
    Inadequate catch monitoring is demonstrated by estimates of 
discarded catch in New England. The Northeast Region adopted a 
Standardized Bycatch Reporting Method for commercial discards that is 
based on data from at-sea observers (Wigley et al., 2007). The 
stratification for observer sampling is stock area and fleet, which is 
too coarse to accurately estimate discards, often inferring `phantom 
discards' (i.e., estimates of discarded catch that are artifacts of the 
methodology rather than a reflection of actual catch). Many groundfish 
sectors are charged with discards against their allocation based on the 
Standardized Bycatch Reporting Method, because the stock-wide 
estimators assume that each vessel in the sector has the same discard 
patterns. Some vessels have rare discards that have been documented by 
NOAA observers and the NOAA study fleet, but these vessels are charged 
the fleet-wide stock-wide discard rate, and the sector is accountable 
for exceeding its catch allocation, even if the overage is an artifact 
of an inaccurate discard estimate. Furthermore, the Standardized 
Bycatch Reporting Method removes any incentive for individual fishermen 
to reduce their bycatch.
    The Standardized Bycatch Reporting Method for yellowtail flounder 
bycatch in the scallop fishery is both slow and biased. Final estimates 
of bycatch in the scallop fishery were not provided until 7 months 
after the fishing year ended. The estimate of yellowtail discards in 
the 2010 scallop fishery was biased, because observers were more likely 
to sample off southern New England, where there are more yellowtail, 
than in the Mid Atlantic Bight, where there are fewer yellowtail. The 
Standardized Bycatch Reporting Method, which is more influenced by the 
southern New England bycatch rate, indicated that the scallop fishery 
had exceeded its yellowtail allocation. The accountability for such an 
overage in bycatch is to close large portions of the stock area for the 
entire year. By contrast, when updated observer data were appropriately 
stratified by region, the estimate of yellowtail discards was much less 
and led to the conclusion that bycatch was well within the limit. This 
example shows that the slow and biased application of the Standardized 
Bycatch Reporting Method would have falsely triggered costly 
accountability measures in the Nation's most valuable fishery.
    Several aspects of scientific uncertainty exacerbate the mixed-
stock fishery problem. When stock assessments underestimate stock size, 
catch limits are lower than they should be, and fishermen have 
difficulty avoiding the species that have artificially low catch 
limits. Furthermore, when some stocks are rebuilding, their catch 
limits remain relatively low while the stock rebuilds, increasing the 
challenge to avoid rebuilding stocks while targeting healthy stocks. 
These problems are intensified when accountability measures further 
reduce the catch limits on rebuilding bycatch stocks, thereby 
increasing the mismatch between the catch limit and the species mix on 
the fishing grounds. Therefore, scientific uncertainty and catch limits 
with accountability prohibit mixed-stock fisheries from harvesting 
their allocated catch limits and form a wasteful management strategy 
with huge economic losses.
    The mixed-stock problem severely limits the New England groundfish 
fishery from landing its total multispecies allocation. For example, 
southern New England winter flounder are behind schedule in the agreed 
rebuilding plan largely because of scientific uncertainties in the 
stock assessment, and only incidental bycatch is allowed. If rebuilding 
is successful, the challenge of avoiding winter flounder will be 
exacerbated. Furthermore, if catch limits are exceeded, the fishery 
will be held accountable in the form of further reductions in catch 
limits of a rebuilding stock. The catch limit for southern New England 
winter flounder is based on an estimate of incidental bycatch, but the 
2010 fisheries exceeded the catch limit, and accountability measures 
are being considered for the overage. The fishery is being held 
accountable because the observed incidental bycatch exceeded the 
projected incidental bycatch.
    As a result of the mixed-stock problem, the groundfish fishery 
caught less than 40 percent of the allocated catch in 2010 (Kitts et 
al., 2011). If the catch limits were accurate, and discards remained 
low for these species, the groundfish plan appears to have successfully 
ended overfishing. However, preventing overfishing is only half the job 
that management plans are mandated to accomplish. The other half of the 
mandate is to achieve optimum yield. Landings of haddock, plaice, 
pollock and redfish in 2010 were less than half of the catch limit 
(Kitts et al., 2011b). Ending overfishing is a great accomplishment, 
but we need to refine fishery management plans to progress toward 
optimum yield.
    A recent analysis of groundfish catch limits concluded that 
scientific information is available to support increased catch limits 
that do not undermine conservation mandates of the Magnuson Act 
(Massachusetts Marine Fisheries Institute 2010). The review of 
scientific analyses used to derive catch limits found that several 
decisions favored relatively low catch limits, and scientifically valid 
alternatives are available for direct estimates of the maximum 
sustainable yield reference point, alternative stock assessment models, 
smaller uncertainty buffers, and revised rebuilding objectives. 
Alternative scientific decisions support increases in catch limits for 
all New England groundfish stocks, with substantial increases for 
``choke stocks.'' Increased catch limits for ``choke stocks'' would be 
more consistent with the availability of stocks on the fishing grounds 
and allow the fleet to achieve more of their allocation, thereby 
substantially increasing mixed-stock economic yield.
    National Standard Guidelines suggest that catch limits should be 
based on each regional Fishery Management Council's desired risk 
tolerance for overfishing. However, such risk management decisions 
require evaluation of economic costs and benefits that are not 
routinely provided by the scientific process. Although some economic 
data are collected from fisheries, the information is not comprehensive 
enough to evaluate costs and benefits of alternative catch limits, and 
economic analyses are limited to impact statements that are completed 
after management actions are decided. A broader approach to informing 
risk tolerance would be management strategy evaluation, which has only 
been applied to few U.S. fisheries in a cursory way. Ignoring economic 
aspects of alternative catch limits poses unknown costs to fisheries.
    Now that catch limit systems have been implemented, their 
performance should be retrospectively evaluated with respect to meeting 
all ten National Standards for fishery management (avoiding overfishing 
while achieving optimum yield, applying best science, managing unit 
stocks, fair and equitable allocation, considering efficiency, allowing 
for variations, minimizing costs, minimizing impacts on fishing 
communities, minimizing bycatch, and promoting safety). More 
specifically, each expectation of NOAA's catch shares policy 
(eliminating overfishing, achieving annual catch limits, producing more 
fish at lower costs, improving fishermen's safety and profits, and 
reducing the negative biological and economic effects) should be 
confirmed through analysis of fishery and resource monitoring 
information.
    In the context of inadequate scientific information for supporting 
New England fisheries management, there are several potential solutions 
to help improve the scientific capacity for supporting annual catch 
limits. Solutions can address both aspects of the problem: the adequacy 
of scientific information and the implementation of the catch limit 
mandate.

        (1) Scientific resources can be increased or reprioritized to 
        support more frequent and accurate stock assessments as well as 
        more timely and accurate fishery monitoring data.

        (2) The peer review processes can be streamlined, using 
        external expertise to solve scientific problems possibly by 
        applying alternative approaches.

        (3) NOAA's scientific capacity can be expanded and improved by 
        partnering with universities and research institutes that have 
        the human resources and infrastructure to help bear the burden 
        of the new requirements of catch limits.

        (4) Each regional Scientific and Statistical Committee can be 
        empowered to help serve the necessary peer review role and more 
        importantly help solve some of the major scientific problems in 
        stock assessments.

    The demands on fishery science can also be reduced in several ways.

        (1) Exemptions from annual catch limits should be considered 
        for stocks and fisheries for which catch cannot be reliably 
        monitored.

        (2) The mixed-stock exemption from catch limits and 
        accountability measures should be considered for bycatch and 
        rebuilding stocks to avoid the wasteful and costly consequences 
        of applying those approaches to mixed-stock fisheries.

        (3) More strategically, alternative management procedures, such 
        as data-driven catch limits that are regularly reconsidered 
        through management strategy evaluation, should be considered 
        that take advantage of the best of fisheries science rather 
        than emphasizing the worst of it (e.g., Butterworth and Punt 
        1999).

    In summary, I conclude that scientific information is insufficient 
to meet the needs of the catch limit system and catch shares policies 
in New England. Most stock assessments are too infrequent and too 
inaccurate to derive annual catch limits that avoid overfishing while 
allowing optimum yield. Major components of total catch, such as 
commercial fishery discards, recreational fishery catch, and location 
of fishing effort are imprecisely estimated and not monitored in a 
timely way to support in-season management and business decisions. 
Economic data and analyses are insufficient to evaluate risk-based 
catch limits. The scientific information required to support the 
fishery management system specified in the National Standard Guidelines 
and NOAA's catch shares policy is much greater than the current 
scientific capacity.
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Amendment: Sampling Design, and Estimation of Precision and Accuracy 
(2nd Edition). U.S. Dep. Commer., Northeast Fish. Sci. Cent. Ref. Doc. 
07-09; 156 p.

    Senator Kerry. Thank you, Mr. Cadrin.
    Dr. Rothschild?

               STATEMENT OF BRIAN J. ROTHSCHILD,

             MONTOMERY CHARTER PROFESSOR OF MARINE

              SCIENCE AND TECHNOLOGY AND CO-CHAIR,

           MASSACHUSETTS MARINE FISHERIES INSTITUTE,

             UNIVERSITY OF MASSACHUSETTS DARTMOUTH

    Dr. Rothschild. Thank you very much. I'm going to 
abbreviate my testimony. I want to begin by saying that the 
management system in place has resulted in losses of landings, 
revenues and jobs, a controversial reallocation of wealth, and 
a failure to eliminate costly over and underfishing. To 
demonstrate this point, I have outlined six metrics. I'm going 
to review three of them with you to save time.
    First of all, gross underfishing that has occurred under 
the Days at Sea system continues under the catch share system. 
Of the 70 kilotons that could be caught each year, only 31 
kilotons are actually caught owing to restrictive regulations. 
This underfishing costs industry and society nearly $132 
million at the dock or $520 million by the time the fish leaves 
the economy. There might be as many as 1,000 jobs that could be 
created by terminating underfishing.
    My next point involves the quality of information, which 
was touched on earlier. Crucial overfishing indices are 
questionable. The average date of stock assessments is 2008. 
Many assessments are outdated. In other words, it is really 
unknown whether stocks that were at a high level in 2008 are at 
a low level in 2011 or vice versa.
    And my third point of the six is that large overfishing 
buffers are costly and inhibit job creation. Overfishing 
buffers are set to ensure that the actual catches are less than 
the overfishing level so that there is low probability of 
overfishing. This is a measure of management performance since 
if the catch level is scientifically certain, then the buffer 
would be zero. But, in fact, the level of scientific certainty 
is evidently so low that the difference between the overfishing 
level and the annual catch is about 67 kilotons. This foregone 
yield has a value of $220 million. Is it worth foregoing a 
catch value of $220 million on the catch valued at $97 million 
to prevent overfishing, which isn't being prevented anyhow?
    In sum, we can see that these negative performance 
indicators cannot be consistent with the intent of Congress, 
that the cost of underfishing and buffers to prevent 
overfishing are far more important economically than the 
traditionally used indices such as revenues. The lessons 
learned is that it is not sustainable to implement fishery 
management plans in a rush, careless, ad hoc, piecemeal 
fashion.
    We need, consistent with the Touchstone-Pate report, a 
master plan that provides time-phased specifics on improved 
communications, revised data collections, conduct of 
cooperative research, and achieving optimum yield. Anything 
less than a master plan will lead to addressing the wrong 
questions.
    So let's, in conclusion, bring this all together. It 
appears that the prosecution of fisheries management is 
inefficient, is operating at a significant cost to the Nation 
in terms of jobs, food security, and welfare. There have been 
suggestions of ways to get the system back on track, but these 
suggestions have never seen the light of day.
    I conclude that the agency, when it does respond, 
reiterates problems rather than providing solutions. It does 
not provide a time-phased response with a date of completion 
and a concrete deliverable such as a sorely needed master plan. 
It is for this reason that Congress has to strengthen its 
oversight by establishing an ad hoc commission or task force 
that can work on a northeast master plan, outline the actions 
that need to be undertaken, establish priorities, and review 
the deliverables.
    It is crucial that this commission is populated with 
stakeholders, particularly the fishing industry. While we all 
recognize that the agency would be opposed to such a 
commission, we have to ask what the agency proposes as an 
alternative. After all, there is much at stake. We are 
squandering time, resources, and opportunity at a time of 
national economic stress.
    Thank you very much.
    [The prepared statement of Dr. Rothschild follows:]

Prepared Statement of Brian J. Rothschild, Montgomery Charter Professor 
  of Marine Science and Technology and Co-Chair, Massachusetts Marine 
       Fisheries Institute, University of Massachusetts Dartmouth

    The catch-share system has been in place for 17 months. NOAA 
promised that the catch-share system would: ``(1) . . . end the race to 
fish; (2) rebuild fisheries and sustain fishermen, communities, and 
vibrant working waterfronts; (3) increase conservation of species; (4) 
reduce the management costs; and (5) produce more and better data.''
    None of these promises have been fulfilled. In fact, the system has 
resulted in losses of landings, revenue, and jobs; a controversial 
reallocation of wealth; and a failure to eliminate chronic costly 
overfishing or underfishing.
    The problems associated with the catch-share system have been 
reviewed many times. This hearing provides an opportunity to review the 
problems and fashion a better way forward. In my testimony this 
morning, I would like to consider what it takes to move ahead. First, I 
look at past performance and show that disregard of the intent of 
Congress is associated with limiting fisheries-management performance. 
Second, I discuss solutions which relate to both substance and 
implementation.
    It is axiomatic that fishery management must follow the intent of 
Congress as spelled out in the Magnuson-Stevens Act (MSA) and supported 
by the National Environmental Policy Act (NEPA) and other legislation. 
If the fisheries do not follow the intent of Congress, then one would 
expect poor performance metrics. If we were from Mars and visited Earth 
and observed the fishery management system in New England, we would 
have to conclude that Congress intended to

        (1) create a management system in the northeast that wastes 
        100,000 tons of fish per year worth hundreds of millions of 
        dollars, while failing to create hundreds of jobs;

        (2) disregard the economic and social impact of fisheries 
        management;

        (3) unfairly allocate fish to some sectors to the disadvantage 
        of other sectors; and

        (4) ignore valid scientific findings, and suppress discussion 
        regarding the magnitude of fish stocks.

    Of course, Congress never intended to generate a fisheries 
management system that wastes huge quantities of fish, disregards 
fishing communities, is inherently unfair, and ignores science.
    If in fact the intent of Congress were followed, we would have a 
considerable improvement in performance metrics for fisheries 
management. The fact that management performance needs to be improved 
is reflected in management-performance statistics. These include: (1) 
magnitude of overfishing and underfishing, (2) quality of information 
necessary for overfishing determination, (3) costs of the overfishing 
buffer, (4) landings and revenues, and (5) vessels and jobs.
    For example, a large number of stocks are subject to overfishing or 
are overfished. In addition, there is gross underfishing. Of the 70KT 
that could be caught each year, only 31KT are actually caught owing to 
restrictive regulations. This shortfall costs industry and society 
nearly $100M at the dock, or $400M by the time the fish leaves the 
economy. There might be as many as 1000 jobs that could be created by 
terminating underfishing.
    The quality of information on crucial overfishing indices is 
questionable inasmuch as the average date of stock assessments is 2008. 
In other words, stocks at a high level in 2008 could be at a low level 
now, or vice versa.
    Additional costs are induced by an overfishing buffer. The idea of 
an overfishing buffer is to set the actual catch less than the 
overfishing level so that there is a low probability of overfishing. 
This is a measure of performance since if the catch level was 
scientifically certain, then the buffer would be zero. But in fact the 
level of scientific certainty is so low that the difference between the 
overfishing level and the annual catch limit (ACL) is about 70KT, which 
has a value of about $105M. The uncertainty is twice the level of the 
catch and results in forgone yield worth of $105M. Is it worth paying 
$105M to prevent overfishing which isn't being prevented anyhow?
    Important indicators of performance are landings and revenues. 
Groundfish landings have declined by 12MT under the catch-share system, 
while revenue has declined by $2M. However, the economic reports are 
inadequate because economic performance needs to be judged on the basis 
of revenues less costs. Cost data are not generally available and, so 
contrary to National Standard 8, even at this point in time, economic 
costs are not being monitored.
    The numbers of vessels and crew have been declining for years. The 
decline continues, and perhaps increases, under catch shares. The 
problem is that we cannot look at only the fishing or producing sector. 
Declining vessels and crew have a big impact on shore side businesses 
and welfare.
    In sum, we can say that the promises made by the agency have not 
been fulfilled; fisheries management is not consistent with the intent 
of Congress; and performance metrics are depressing. On top of this, 
trust has broken down. What can we do to move forward? There are 
substantive issues and implementation issues that need to be taken into 
account.
    A major problem with the implementation of the catch-share system 
is that its implementation was in many ways rushed and careless. A 
striking example is that any elementary economics course would tell us 
that the catch-share system, if left on its own, would result in hyper 
consolidation. Now, 17 months later, the council is dealing with caps 
to prevent hyper consolidation.
    The lesson learned is that we cannot afford to move into the future 
in an ad hoc piecemeal fashion. We need a master plan to improve 
communications, revise data collection, conduct cooperative research, 
and achieve optimum yield. Anything less than a master plan will lead 
to addressing the wrong questions. These observations are consistent 
with the Touchstone-Pate Report (TPR).
    There are critical issues that need to be addressed in the master 
plan. These relate to the measures of performance outlined above. How 
can we use the shortfalls in scientifically permissible landings to 
create jobs and economically improve our fishery output? Examples of 
critical issues include:

        (1) Reevaluate Closed Areas--Thirty percent (30 percent) of 
        Georges Bank is closed to fishing. The benefits of these 
        closures are not clear. Enormous costs are involved in keeping 
        the areas closed. An analysis of the efficacy of the closed 
        areas along with alternatives is needed.

        (2) Data--The entire data information system needs to be 
        upgraded as specified in the TPR. An analysis of the data 
        information system, along with costs and timing, is necessary.

        (3) The Bycatch Problem and Mixed Species Problems--Bycatch 
        issues constrain almost all fisheries from taking optimum 
        yield. The yellowtail flounder-scallop interaction is a 
        critical example.

        (4) Reevaluate Scallop Management--Scallops are our most 
        important fishery. Yet, concerns are voiced regarding whether 
        optimal yield is being taken and whether the closed area's 
        stocks are being effectively managed.

        (5) 2010 Year Class of Haddock--There is a rumor that the 2010 
        year class of haddock is very large. A plan needs to be tabled 
        for efficient utilization of the 2010 year class, particularly 
        taking into account the fact that poor utilization of the 2003 
        year class resulted in losses of hundreds of millions of 
        dollars.

        (6) Stock Assessments--The stock assessment settings have 
        become much more complicated owing to ACLs. In addition, 
        councils have a difficult task in evaluating recommendations 
        because they do not have a fully transparent analysis that 
        demonstrates all of the assumptions, assertions, and choices 
        made. This crucial topic needs extensive review for 
        incorporation into the master plan.

        (7) Flexibility--Many regulations are unnecessarily rigid. An 
        analysis needs to be undertaken to evaluate areas where 
        flexibility can be helpful.

        (8) Ocean Environment--It is becoming clear that environmental 
        variables are critical to increasing and decreasing stocks. A 
        white paper needs to be developed to incorporate a national 
        program on the relation of the ocean environment to stock 
        dynamics into the master plan.

    It is not enough to just produce a master plan. Management and 
communication skills are required to implement it. There are clearly 
shortfalls in management and communication skills. In fact, these were 
identified in the TPR. We basically agree with the TPR. However, two 
additional observations are necessary. First, TPR deals with 
interactions among the council, the center, and the regional office. It 
is striking that the industry is not explicitly included in this mix. 
Second, the response to the TPR, as reported to the council, did not 
fully cover the TPR's recommendations, particularly omitting a time-
phased action plan.
    One of the big difficulties in working with NOAA is its lack of 
responsiveness. Not only is NOAA not responsive to the people with whom 
it must work, it is also not responsive to Congress.
    For example, Congressman Frank met with Administrator Lubchenco and 
others in early October 2009 to discuss critical issues facing the 
fishing industry. Some have been overtaken by events, but others have 
not really been dealt with. Congressman Frank, in communicating with 
NOAA, stated that, ``. . . despite the importance of NOAA's fisheries 
mission, it seems fraught with a lack of responsiveness and a 
management process that is slow to react.'' Two years later, 
outstanding requests for crucial information on the closed areas, 10 
year rebuilding schedules, and economic data have gone unanswered. In 
his letter, Congressman Frank said, ``. . . the biggest fear I have is 
the real threat of significant consolidation.'' Only now, 17 months 
after the initiation of the process, fishery managers are beginning to 
worry about consolidation caps.
    So now let us bring this together. It appears that fisheries 
management is being prosecuted at a great cost to the Nation in terms 
of jobs, food security, and welfare. There have been many suggestions 
of ways to get the system back on track. But these suggestions have 
never seen the light of day. We conclude that the agency, when it does 
respond, reiterates the problems rather than provides solutions; it 
does not provide a time-phased response with a date of completion and a 
concrete deliverable such as a report or master plan. It is for this 
reason that Congress has to strengthen its oversight by establishing an 
ad hoc commission or other entity that can work on a Northeast master 
plan, outline the actions that need to be undertaken, establish 
priorities, and review the deliverables. It is crucial that this entity 
is populated with stakeholders, particularly the fishing industry. 
While we all recognize that the agency would be opposed to such a 
commission, we have to ask what the agency proposes as an alternative. 
After all, there is much at stake and we are squandering time, our 
resources, and opportunity at a time of National economic stress!
                                 ______
                                 
                          Supporting Material

                 Trends in the New England's Fisheries

               by Brian J. Rothschild and Emily F. Kelley

I. Stock Status
    According to the 2010 Report, ``The Status of U.S. Fisheries Report 
to Congress,'' ten stocks in the New England region are subject to 
overfishing, and sixteen stocks are overfished (see Table 1). These 
status determinations are based on the most recent assessment of each 
stock, or stock complex. It should be noted that for the stocks managed 
under the New England Fishery Management Council (independently or 
jointly with the Mid-Atlantic) the average year of the most recent 
assessment is 2008 (utilizing data through 2007). The most recent 
assessment occurred in 2010 utilizing data through 2009 and the oldest 
assessment in use is from 2003 (which utilized data from 2002).

                          Table 1. Overfished Stocks and Stocks Subject to Overfishing
----------------------------------------------------------------------------------------------------------------
                                                                                      Overfished Condition
     Council              FMP                  Stock             Overfishing   ---------------------------------
                                                                  condition        Overfished      Approaching
----------------------------------------------------------------------------------------------------------------
                   Atlantic salmon    Atlantic salmon *                                      x
                  ----------------------------------------------------------------------------------------------
                                      cod--Georges Bank                     x                x
                                     ---------------------------------------------------------------------------
                                      cod--Gulf of Maine                    x
                                     ---------------------------------------------------------------------------
                                      Atlantic halibut                                       x
                                     ---------------------------------------------------------------------------
                                      Atlantic wolffish                                      x
                                     ---------------------------------------------------------------------------
                                      ocean pout                                             x
                                     ---------------------------------------------------------------------------
                                      white hake                            x                x
                                     ---------------------------------------------------------------------------
New                                   windowpane--GOM/GB                    x                x
                                     ---------------------------------------------------------------------------
England            Northeast          windowpane--SNE/MA                    x
                    Multispecies
                                     ---------------------------------------------------------------------------
                                      winter flounder--GB                   x                x
                                     ---------------------------------------------------------------------------
                                      winter flounder--SNE/MA               x                x
                                     ---------------------------------------------------------------------------
                                      witch flounder                        x                x
                                     ---------------------------------------------------------------------------
                                      yellowtail flounder--                 x                x
                                       Cape Cod/GOM
                                     ---------------------------------------------------------------------------
                                      yellowtail flounder--                                  x
                                       Georges Bank
                                     ---------------------------------------------------------------------------
                                      yellowtail flounder--                 x                x
                                       SNE/MA
                  ----------------------------------------------------------------------------------------------
                                      thorny skate--Gulf of                                  x
                                       Maine
                                     ---------------------------------------------------------------------------
                   Northeast Skate    smooth skate--Gulf of                                  x
                                       Maine
----------------------------------------------------------------------------------------------------------------
Mid-Atlantic       Atlantic           butterfish                                             x
                    Mackerel,
                   Squid, and
                    Butterfish
----------------------------------------------------------------------------------------------------------------
* No fishing is allowed in this fishery or incidental harvest is limited to levels necessary to meet Endangered
  Species Act (ESA) requirements. A Final Recovery Plan for the Gulf of Maine District Population Segment of
  Atlantic Salmon has been developed under the ESA.

    Table 1 (above) depicts fish stocks in the Northeast Region that 
are subject to overfishing, are overfished, or are approaching an 
overfished condition. This table was obtained from the 2010 report; The 
Status of U.S. Fisheries Report to Congress.
II. Catch Limits--``A Costly Insurance Policy''
    In the United States requirements stipulated in the 2006 
reauthorization of the Magnuson-Stevens Fishery Conservation and 
Management Act (MSRA) have made the development of annual catch limits 
a priority. The MSRA strengthened the objectives of National Standard 
1, specifically the obligation to prevent overfishing, and rebuild 
overfished stocks. Regional Councils are now required to establish a 
mechanism for determining annual catch limits (ACLs) and accountability 
measures (AMs) for all federally managed fisheries (DOC, pp. 68). Table 
2 depicts the catch limits associated with the stocks managed under the 
Northeast Multispecies Fishery Management Plan.
    The Overfishing Limit (OFL) is the level of catch that corresponds 
to Maximum Sustainable Yield (MSY), from this reference point the 
Council is required to set an Acceptable Biological Catch Limit (ABC) 
and Annual Catch Limit (ACL). Between each of these levels are buffers 
to account for scientific and management uncertainty--an ``insurance 
policy'' against overfishing. In New England, for most stocks, the 
buffers were not based on any analysis of uncertainty or risk.
    The cost of precaution is significant. The annual catch limit, for 
groundfish, is 51 percent of the overfishing limit. The difference, 
based on the average price of groundfish in 2010, is worth 
approximately 220 million dollars. The actual realized catch is even 
less (about one third of the OFL).

                                              Table 2. Catch Limits
----------------------------------------------------------------------------------------------------------------
                                                 U.S. ABC      Total ACL   Groundfish Sub-ACL   2010 Groundfish
            Stock                 OFL (MT)         (MT)          (MT)             (MT)             Catch (MT)
----------------------------------------------------------------------------------------------------------------
GB Cod                                 6,272          3,800         3,620              3,430             2,829.7
----------------------------------------------------------------------------------------------------------------
GOM Cod                               11,089          8,530         8,088              4,567             3,843.1
----------------------------------------------------------------------------------------------------------------
GB Haddock                            80,007         44,903        42,768             40,440             8,340.2
----------------------------------------------------------------------------------------------------------------
GOM Haddock                            1,617          1,265         1,197                825               377.7
----------------------------------------------------------------------------------------------------------------
GB Yellowtail                          5,148          1,200         1,169                999               757.6
----------------------------------------------------------------------------------------------------------------
SNE/MA Yellowtail                      1,553            493           468                332               171.9
----------------------------------------------------------------------------------------------------------------
CC/GOM Yellowtail                      1,124            863           822                779               596.7
----------------------------------------------------------------------------------------------------------------
Plaice                                 4,110          3,156         3,006              2,848             1,536.4
----------------------------------------------------------------------------------------------------------------
Witch                                  1,239            944           899                852               725.3
----------------------------------------------------------------------------------------------------------------
GB Winter                              2,660          2,052         1,955              1,852             1,391.2
----------------------------------------------------------------------------------------------------------------
GOM Winter                               441            238           230                158               106.1
----------------------------------------------------------------------------------------------------------------
SNE/MA Winter                          1,568            644           605                520
----------------------------------------------------------------------------------------------------------------
Redish                                 9,899          7,586         7,228              6,846             2,151.2
----------------------------------------------------------------------------------------------------------------
White Hake                             4,130          2,832         2,697              2,556             2,259.8
----------------------------------------------------------------------------------------------------------------
Pollock                                5,085          3,293         3,148              2,748             5,601.1
----------------------------------------------------------------------------------------------------------------
N. Windowpane                            225            169           161                110
----------------------------------------------------------------------------------------------------------------
S. Windowpane                            317            237           225                154
----------------------------------------------------------------------------------------------------------------
Ocean Pout                               361            271           253                239
----------------------------------------------------------------------------------------------------------------
Halibut                                  119             71            69                 30
----------------------------------------------------------------------------------------------------------------
Wolffish                                  92             83            77                 73
----------------------------------------------------------------------------------------------------------------
Total                                137,056         82,630        78,685             70,358              30,688
----------------------------------------------------------------------------------------------------------------
% of OFL                                 100             60            57                 51                  37
----------------------------------------------------------------------------------------------------------------
Value (USD,$)                    435,105,731    262,321,873   249,797,852        223,362,487          97,423,861
----------------------------------------------------------------------------------------------------------------
Loss: OFL--X (USD,$)                       0    172,783,859   185,307,879        211,743,244         337,681,870
----------------------------------------------------------------------------------------------------------------

    Table 2 (above) depicts that Overfishing Limit (OFL), U.S. 
Acceptable Biological Catch (ABC), total Annual Catch Limit (ACL), the 
groundfish sub-component of the ACL, and the known groundfish catch. 
All weights are in units of metric tons (denoted by MT). Blanks in the 
under groundfish catch are stocks for which catch data is not yet 
publicly available. The value of each category was calculated utilizing 
the average price of groundfish in 2010 ($1.44). Loss is calculated as 
the difference between the OFL.
III. Landings and Revenue (Outputs)
    Tables 3 and 4 depict the groundfish landings and revenue from 2007 
to 2010.

                 Table 3. Groundfish Landings 2007-2010
------------------------------------------------------------------------
            Year                       Groundfish Landings (MT)
------------------------------------------------------------------------
                  2007                                   64,003,776
------------------------------------------------------------------------
                  2008                                   72,162,445
------------------------------------------------------------------------
                  2009                                   70,568,091
------------------------------------------------------------------------
                  2010                                   58,492,204
------------------------------------------------------------------------


                  Table 4. Groundfish Revenue 2007-2010
------------------------------------------------------------------------
            Year                       Groundfish Gross Revenue
------------------------------------------------------------------------
                  2007                                  $89,055,085
------------------------------------------------------------------------
                  2008                                  $90,131,938
------------------------------------------------------------------------
                  2009                                  $85,088,241
------------------------------------------------------------------------
                  2010                                  $83,293,667
------------------------------------------------------------------------

    Prices increased significantly for all species, including 
groundfish. The following excerpt is from the 2010 Sector Year-end 
report. ``Nominal yearly average prices of combined groundfish species 
declined from $1.43/lb in 2007 to $1.23/lb in 2009 (Figure 8). In 2010, 
the combined groundfish average price increased to $1.44/lb. The yearly 
average price for combined non-groundfish species also increased in 
2010 to $1.20/lb from $1.11/lb in 2007 and $1.00/lb in 2009'' (NMFS, 
2011).

IV. Industry Indicators




    Senator Kerry. Well, thank you all very much. I know you 
felt a little squeezed there, but I think we're going to have a 
productive time in the Q&A so we can get out a few things here.
    Let me kind of go to the core of something here if I can. 
You know, having been struggling with this Magnuson Act since 
the 1980s when I arrived there in 1985, we rewrote it in 19--it 
was originally written in 1976. We rewrote it again in a major 
way in 1994, passed in 1996. But it's pretty democratic, folks. 
It's one of the most democratic regulatory regimes we have in 
America.
    We created not just protecting the U.S. economic zone, 
three miles and then 200 miles offshore, but, quote--I'm 
quoting from the Act--``we created eight regional fisheries 
councils to manage the living marine resources within that 
area.'' And on that marine council, there's the National Marine 
Fisheries Service designator; there's the principal state 
official with marine fishery management responsibility for 
Maine, New Hampshire, Massachusetts, Rhode Island, and 
Connecticut; and then there are 12 members nominated by the 
Governors of the New England coastal states with 3-year terms; 
and then there are four non-voting members, stakeholders, the 
Coast Guard, the U.S. Fish and Wildlife, the U.S. Department of 
State, and the Atlantic States Marine Fisheries Commission.
    Now, Amendment 16 came from them. The Council manages 
itself, supposedly, and manages the fiscal--you know, the 
region. So I want to ask all of you what's happening here? I 
mean, why--is it the appointees? Are there too many diverse 
interests? It seems pretty--you know, I mean, I think 
Congressman Keating asked about having a task force to do this. 
I mean, that is a task force. It's a statutory task force. It's 
a management effort.
    So what's wrong here? Why can't this democratic, local 
input, managed effort work? And if it can't work, what will 
work?
    Mr. Cunningham, you're in the----
    Mr. Cunningham. In the hot seat at the moment?
    Senator Kerry.--first seat on that. Well, you're the 
beginning part of it. But I think everybody's got to weigh in.
    Mr. Cunningham. Thank you, Senator. First of all, I guess--
and I have stated this. I'm----
    Senator Kerry. Would you agree it's meant to be a pretty 
democratic process?
    Mr. Cunningham. It is an extremely democratic process. To 
some extent, it's one of the reasons it takes us a long time to 
get things done, because of the way the process has to work. As 
far as Amendment----
    Senator Kerry. Is it fair to say that sometimes the 
competing interests actually prevented things from getting 
done?
    Mr. Cunningham. No, it----
    Senator Kerry. Or slowed it down sufficiently that----
    Mr. Cunningham --it may have slowed it down. But it's also 
the process and the things that we have to deal with through 
NEPA, with the APA, with Magnuson, with the Marine Mammals 
Protection Act. There must be six or seven or eight statutes 
that we are required to adhere to. So, I mean, that whole 
process is fairly slow.
    Senator Kerry. Well, how do we make it work is the question 
everybody's asking.
    Mr. Cunningham. Well, from my standpoint----
    Senator Kerry. Do we have to change some of those? Do some 
of those eight guideline laws need to be changed? Does there 
need to be a more streamlined time-frame for decisionmaking? I 
mean, what are the inputs that could improve this?
    Mr. Cunningham. Well, I think a more streamlined time frame 
would be good. I think most of that probably comes down on 
issues, taking a serious look at NEPA.
    Senator Kerry. At NEPA.
    Mr. Cunningham. Yes.
    Senator Kerry. Anybody else want to weigh in? I know, 
Captain, you'd probably like to weigh in on that. Let me let 
our practitioner speak up.
    Mr. Welch. Thank you. In my opinion, you know, it took 10 
months--from the time Amendment 16 was voted in, we had 10 
months to get it up and running. It was not enough time to 
handle the issues that are very important to the fishermen, 
like allocation. Around the world, where you go to a quota 
system, the battle lasts three to 5 years.
    We didn't have the--you know, Amendment 17 after Amendment 
16 was supposed to discuss allocation. It has not been done. It 
was just discussing permit banks. And the allocation issue is 
not on the table.
    Senator Kerry. And is--I mean, is Washington to blame for 
that?
    Mr. Welch. You want to know what I--I feel that there are 
undue influences that affected the Council, outside sources 
that really controlled--got some control. And it was a person 
from one of these groups that got up and spoke to the fact that 
they can influence the Council. And that's----
    Senator Kerry. So, in effect, what we've really got to do 
is we've got to look at the functionality of the Council 
itself. Is that true?
    Mr. Welch. Yes.
    Senator Kerry. In your judgment.
    Mr. Welch. And that's why I like the idea of an 
independent----
    Senator Kerry. Mr. Diodati?
    Mr. Diodati. Thank you. I agree that it is a very highly 
democratic regulation. I think it's also very sophisticated and 
inelegant. And we have gone around many times over the years in 
trying to demonstrate intent of the law, and there's always 
various opinions about what the intent is. But I think it 
really depends on how the legislation is applied.
    I think that the Secretary of Commerce and NOAA Fisheries 
has a tremendous amount of latitude in taking the plans that 
are developed by the Council, but they approve--they implement 
them. There's another opportunity there to perfect what perhaps 
the Council didn't get right the first time around because it's 
not possible to do that in one or two boardrooms. It's not 
possible to decide a very difficult allocation procedure with 
stakeholders.
    But I think they have an opportunity to come back in. They 
do do the Federal Register Notice. But, you know, very often, I 
don't see them taking advantage of making----
    Senator Kerry. So unlike Rick Perry, you think you ought to 
look to Washington to solve the problem.
    Mr. Diodati. I don't--I'm not suggesting Washington, but 
NOAA Fisheries and through the Secretary of Commerce.
    Senator Kerry. NOAA Fisheries. Well, that's Washington, 
folks.
    Mr. Diodati. Well----
    Senator Kerry. Gentlemen, just quickly, do you want to 
wrap----
    Dr. Rothschild. Senator, thank you. I think there's a 
multiplicity of problems. And so I would pick one and point out 
that I don't believe that the intent of Congress, as written 
literally in the Magnuson-Stevens Act, is being dealt with. 
And, in particular, when you read the 10 National Standards, it 
tells you to do a whole variety of things, but there's a focus 
on only one of them, which is overfishing.
    And one of the reasons that we're having so many problems 
is because we ignore, for example, National Standard 8, which 
is the economic and social fabric of the industry. How are we 
going to monitor the performance of fishery management if we 
don't take into account the social and economic aspects? I 
could go on and on, but I'll leave it at that.
    Senator Kerry. Well, I understand that, and we've wrestled 
with that for a long time. Look, I--we're kind of going around 
in a circle, which is what bothers me about this entire thing. 
We don't have adequate science. We can't do this on a two and 
three-year basis. Senator Begich brought that up.
    But it takes resources to do it otherwise, and not a lot of 
people are adding resources. We're working these days. So this 
is a real struggle between common sense and day-to-day reality 
of peoples' lives. You know, if you want to take the 
socioeconomic--I mean, the fact is we almost lost--as many of 
you know, we almost lost the striper 20 years ago. We had a 10-
year ban on any fishing at all for stripers, correct? And it 
came back and came back way beyond peoples' expectations.
    Now, you know, everybody understands the challenge of the 
overfishing. A lot of it's from these big fleets that come from 
elsewhere, not here. You know, it used to be they came up the 
coast from North Carolina and places--massive numbers of very 
large boats and so forth. And so if you're going to have an 
industry, you have to preserve the stocks, correct?
    Dr. Rothschild. May I respond?
    Senator Kerry. Please.
    Dr. Rothschild. I'd like to respond, Senator. It's pretty 
clear that a very high priority is the annual assessment of 
stocks. So what we have to do is not say that we don't have the 
resources. What we have to do is examine the program and see 
whether we're applying our resources to the highest priority, 
which is annual assessment of stock. And it's not clear that 
that has been undertaken, and so that would be the next step.
    Senator Kerry. Oh, I agree. I agree with that, and I think 
Senator Begich and I are going to----
    Dr. Rothschild. That's why I wanted to----
    Senator Kerry.--and Senator Brown--we will do everything in 
our power to move to that as fast as we conceivably can, 
because I think that could be a key that helps to unlock a 
number of things here.
    Let me just take a moment to welcome--we've got--I should 
have done this earlier. But our Gloucester mayor, Carolyn Kirk, 
is here. Scott Lang, New Bedford mayor, is here. The former 
mayor is also here--John Bullard, and Angela Sanfilippo of the 
Fishermen's Wives sitting over here, Roger Berkowitz of Legal 
Seafood, who hosted our last meeting here. We welcome all of 
you. And I'm sure there are other stakeholders here, but I did 
notice them when they came in afterwards. I want to welcome all 
of them and, obviously, hope they will attend this next meeting 
we're going to have also.
    Senator Brown?
    Senator Brown. Thank you, Senator. You know, since I've 
been working on this for a year and a half, we've had many 
meetings. I've hired somebody from the Council. We've gone 
around and been on the boats, met with the fishermen. And, you 
know, Senator Keating and--I'm sorry--Congressman Keating and 
Congressman Frank, you know, hit it right on the head. There's 
a complete lack of trust. There's a lack of answering--can't 
even answer a simple question.
    And, Doctor, you're one of the foremost experts in this 
area, and you've already provided science, new science, to 
these agencies, and they've rejected it outright. Isn't that 
right?
    Dr. Rothschild. Well, it's pretty complicated--something 
like that.
    Senator Brown. Well----
    Dr. Rothschild. I want to be consistent with not providing 
a direct answer.
    Senator Brown. Well, based on the things that we've spoken 
about, I know that when we--in November, you and Mr. Cadrin and 
others provided Governor Patrick some information and Secretary 
Locke--evidence supporting increases in catch limits as well as 
fishery disaster declaration. The report showed approximately 
$19 million of fish not being caught as well as $21 million of 
direct economic losses. And you provided that to Secretary 
Locke and he rejected it, correct?
    Dr. Rothschild. That's correct.
    Senator Brown. And, in addition, I have found, just in my 
dealings with this agency, that, you know, Dr. Lubchenco--you 
know, her lack of attention to the questions, the failure to be 
honest and forthright with us has led to the devastation in the 
fishing industry in this state and making it harder, quite 
frankly, for fishermen like you to do your jobs. And when you 
hear kind of like all of the political kind of boogie-woogie up 
here, where they say one thing and do the complete other--the 
complete opposite--they say, ``Well, we need to make--the 
regulations are better. There's a light at the end of the 
tunnel.''
    Listen, the only thing that's coming at the end of the 
tunnel is a train that's shutting--that's going to shut down 
the industry, because I've seen absolutely--has it gotten 
better? Yes, a little better. But the overregulation and the 
continuous uncertainty and interference, the enforcement, is 
still there. They've hired more enforcement folks, yet we have 
fewer boats. I don't know how we--how do you justify that?
    But my--saying that, one of my main questions is also with 
the--Mr. Welch--the increased regulations and the regulatory 
burden. You indicated that if, in fact, certain things happen, 
you are not going to--you're going to be an armchair fisherman.
    Could you just describe to the Committee, given the law 
enforcement abuses over the last 10 years--is there significant 
concern by you and others that you know about this increased 
compliance burden? And, if so, what do you want us to try to do 
to help you?
    Mr. Welch. There's a lot more regulatory paperwork and 
rules to follow under catch shares. As far as compliance and 
enforcement, the problem, I believe, was not with the agents on 
the dock. I've never really had a problem with them. I'm a 
victim of the enforcement. I got shooken down by the lawyers at 
NOAA. They knew I wasn't going to hire a lawyer, and they--I've 
had a really bad experience with them.
    And the blame shouldn't go to the enforcement agents. It 
should go to the lawyers that shook people down, the lawyers 
that are still working for them. Dale Jones, who shredded 70 
percent of his documents, is still working for the government. 
That's insulting to the public. But--now I forget the question, 
but----
    Senator Brown. How is the regulatory burden affecting you 
and others in the fleet?
    Mr. Welch. The regulatory burden is just eliminating the 
small boat fleet. The game with catch shares is you have to 
have a lot of quota to make any amount of money, and a majority 
of the fleet does not have a lot of quota.
    Senator Brown. And, Dr. Rothschild, you know, I've been 
fascinated, you know, meeting you and understanding everything 
that you've been working on since you've been involved in this 
issue, not only your efforts with the scallops, but obviously 
providing the science and the information to NOAA and other 
agencies so they can make a better decision.
    In your opinion, is NOAA making fisheries policy based on 
science or something else?
    Dr. Rothschild. I think the answer to that question is that 
the regulations are based on science. But it's not generally 
recognized how fuzzy the science is, so that there is a high 
degree of latitude in interpreting the science.
    Senator Brown. So, I mean, I know that--since we've spoken, 
what's the relationship that you've observed between Dr. 
Lubchenco's office, any of the folks working for NOAA--what 
is--has it been cordial, has it been constructive, has it been 
antagonistic? Could you please describe to us your personal 
observations?
    Dr. Rothschild. Well, I would just reiterate comments that 
many people have made, that the people in the street have a 
great distrust and a feeling for a lack of transparency. And 
that's one of the reasons why the Preston Pate report was so 
important, because it focused on that. I read the presentations 
that were made to the Council, in terms of the agency's 
response to the Pate report, and I would have hoped that there 
would be one response rather than three separate ones, and that 
the response would have focused with a time-phased action plan 
on each one of the recommendations in the Pate report.
    And I would also add that in addition to the kinds of 
things that are discussed in the Pate report, there are 
scientific issues which were raised in the Governor's report 
which could stand a joint reexamination. And, of course, the 
law enforcement--so there's a three-pronged issue. It's the law 
enforcement, which I really don't have to go into--that's 
beaten to death; the science problem, which is very big; and 
the everyday management communication issues.
    And so there's really a lot to be done, and I am concerned 
that the agency itself can't do this by itself. It's not 
because anyone in the agency is bad or incompetent. It's just a 
huge task from within a bureaucracy to change the bureaucracy. 
And that's why I think that this task force or commission or an 
external group could work together with NOAA and end up with a 
result that we all desire, because if we don't do that, we'll 
be trapped in an endless morass of the bureaucratic operation.
    Senator Brown. Well, in closing, Mr. Welch and also Dr. 
Rothschild, it sounds like NOAA is well aware of how 
destructive, obviously, their policies have been. And we've 
talked--as you said, we beat them to death about the fining and 
also the lack of trust issue. Do you think it's time, Mr. Welch 
and Doctor, to turn the fisheries duties over to another 
agency, potentially, Fisheries and Wildlife or some other 
agency?
    Dr. Rothschild. Well, I'll turn it over to Mr. Welch, but 
there has always been talk of putting NOAA into Interior, and 
that has been common discussion in Washington for years. And so 
if----
    Senator Brown. Is it time now? Is it time? I mean, it seems 
like----
    Dr. Rothschild. Well, if they----
    Senator Brown. Well, how much time are we going to use 
reestablishing that trust?
    Dr. Rothschild. Well, that's up--it seems to me that 
there's a good answer to that, which is it sort of depends on 
the response to this hearing, because there are things that 
could be done, and we have to learn what they are.
    Senator Brown. Well, if it's anything like the response to 
the last hearing--we're still waiting 5 months later for 
documentation, sir.
    Dr. Rothschild. That's right. Right.
    Mr. Welch. Yes, I think that's an excellent idea. You would 
gain the trust of the fishermen again. I mean, you know how 
hard it is for you to get an answer. Imagine when I went up 
there. It's tough.
    Senator Brown. Well, thank you very much.
    Senator Kerry. Go ahead, Mr. Diodati.
    Mr. Diodati. I just want to say to the point, Senator, that 
there are many examples of excellent working relationships 
between members of our organization and the National Marine 
Fisheries Service. Our scientists do work very closely together 
on stock assessments and research projects and other things. 
But what happens when you come to a meeting like this today, 
and Dr. Lubchenco suggests that it's the Commonwealth of 
Massachusetts' responsibility to demonstrate the impacts that 
this Federal program has had on our fisheries--I think that if 
Microsoft was telling their stakeholders, ``Let us know what's 
wrong with our products and tell us how to fix it,'' they 
wouldn't be as successful as they are today.
    Senator Kerry. Senator Begich?
    Senator Begich. Thank you very much.
    Actually, Microsoft does do that. It's called product 
improvement. That's what they do. They get input from their 
customers. That's why they produce such an incredible product 
and control so much of the market.
    But let me go on to the broader issue. First, to the two 
professors, in your analysis here, did you do extensive 
analysis of the Alaska experience? Because I will tell you, 
we--well, let me have your response first. Either one.
    Dr. Cadrin. I'll draw on my experiences from the New 
England Scientific and Statistical Committee as well as 
interactions with all regional scientific and statistical 
committees, including the Alaskan one. The current National 
Standard guidelines were largely tailored to emulate what's 
happening in Alaska with the North Pacific Council, in which 
the Scientific and Statistical Committee is the peer review 
process for the annual stock assessments. They are integrated 
into that process much more so than in New England.
    There are many aspects to Alaska's--there are some that 
would carry over well here, in which there are annual catch 
limits that are set as defaults. They are modified by 
scientific information as it comes forward, and so what you 
have is a much more responsive system than we have. We're in 
the process in this region of retooling to come up with more 
frequent operational assessments, but that's slow coming. And 
until those are producing regular science, it's really the 
fishermen that are paying the price in the form of lower catch 
limits.
    Dr. Rothschild. I have some experience in Alaska. I worked 
on king crab and salmon in Bristol Bay, and I was also at the 
University of Washington for a number of years. And the 
difference between the Alaska experience and the experience 
here on the East Coast is like day and night. There's a greatly 
increased trust. People work together in the North Pacific. 
It's really a system that works well, even though there are 
problems with the crab rationalization and things like that.
    Senator Begich. But I would argue that that was not always 
the case.
    Dr. Rothschild. That's true. That's right.
    Senator Begich. I can tell you story after story where, you 
know, we hated Seattle.
    Dr. Rothschild. That's right.
    Senator Begich. We hated the Japanese that would steal our 
fish.
    Dr. Rothschild. I was in Seattle then and I felt the heat. 
Right.
    Senator Begich. So I guess here's my point, and that is--
and I'm glad I'm here in one aspect to hear a lot of the 
concerns in New England. But also I think there is a model or 
elements of a model that Alaska has that has worked 
successfully. I mean, that's why we now control over 50-plus 
percent of the market of this country, because sustainability--
we're having other challenges now, not overfishing in some 
cases--in most cases, actually. It is now because of climate 
change, like I said, a vacation of the waters.
    I mean, Senator Kerry, I can go on a lot on these issues, 
but I won't. But that's our challenge. But I guess I want to 
caution here--and I guess, Mr. Cunningham, the North Pacific 
Fisheries Council that we operate under works well. It has some 
tough spots. There's no question. I've been to those 3-day 
meetings--and the aspect of an issue that takes a year or two 
or, in some cases, 8 years to resolve, because fishermen have 
such, you know, issues with what might happen or the outcome or 
the fear of what might have happened.
    How much do you interact with other councils--and I'll use 
our council--in finding out best practices in order to succeed? 
In other words, at the end of the day, you know, I'm a believer 
in the Council process. Now, there are rough spots. Our 
Council, for example, has set up with the halibut issue a 
stakeholders group that works with them.
    What do you do to improve your system? Because it's clear, 
at least just in my limited time here already, there is--
between NOAA there's some distrust, but also between the 
process, because no one would be recommending a task force if 
you were doing your job 100 percent. So help me understand 
this.
    Mr. Cunningham. Well, first of all, to your question about 
do we interact with the other councils, in particular, the 
North Pacific Council, the answer is yes, we do. We have two 
meetings a year with them--essentially all of the councils----
    Senator Begich. All the councils.
    Mr. Cunningham.--councils getting together. If there are 
issues that we need help on that are something that they've 
already done, we've gone to them. We had people come from that 
council for workshops before we instituted Amendment 16 and the 
whole--that process. So, yes, we interact on an ongoing basis.
    Senator Begich. Do you use stakeholder groups at times set 
up around certain species in order to get input and utilization 
of that in your decisions?
    Mr. Cunningham. Yes. And, in fact, we had--it was over 60 
meetings with stakeholders in the process of putting Amendment 
16 together.
    Senator Begich. OK. One question that came up in our last 
panel--the rollover issue. You said you were going to move that 
into your agenda somewhere.
    Mr. Cunningham. That's correct.
    Senator Begich. When?
    Mr. Cunningham. We have a priority setting for all the 
actions that we will work on in 2012 coming up in November.
    Senator Begich. Will this be--when you say priority 
setting, that means you're setting an agenda. So is this like a 
December meeting? Is it a quarterly meeting? When will you go 
after this issue? It seems like there's some strong interest 
here, and it seems like the agency wants to do this.
    Mr. Cunningham. If it comes as a priority, a set priority, 
we will start to work on it immediately after the November----
    Senator Begich. Do you think it's a high priority?
    Mr. Cunningham. Yes, I do.
    Senator Begich. OK.
    Mr. Cunningham. That's why we already have the provision, 
but----
    Senator Begich. But you've got to move forward with it is 
what I understand.
    Mr. Cunningham. No, we already have it. It's a part of the 
law. They get a 10 percent rollover, but we're looking at the 
possibility of increasing it under certain species.
    Senator Begich. Right.
    Mr. Cunningham. Because as was indicated, somewhere around 
93 percent of all of the underages are concentrated in three 
stocks, and those are robust stocks.
    Senator Begich. And has the Commission taken a position on 
this before? It's my understanding you have and you rejected it 
to increase the capacity.
    Mr. Cunningham. Increasing the rollover?
    Senator Begich. Yes.
    Mr. Cunningham. It has been discussed and did not move 
forward.
    Senator Begich. So if you put it on the list, and it just 
goes on the list--but, I guess, here's my point. Let me be more 
direct here. It seems like there is agency support--which for 
NOAA to support something of this nature indicates they feel 
very confident of the science with certain parameters to 
increase it above 10 percent. That gives--should give you a 
great opportunity to make this happen rather than have it up on 
the agenda to discuss with no action that moves to a positive. 
Do you think you can move it to a positive? Do you feel 
confident you can move it to a positive outcome?
    Mr. Cunningham. I feel confident that we can move ahead 
with it somehow. I can't determine 18 different votes on there, 
and I can't sit here and say to you I can guarantee them.
    Senator Begich. But----
    Mr. Cunningham. It is something that will be discussed for 
certain.
    Senator Begich. I'll pause there. I just--I know the 
experience I've had with our Pacific--our council, and, you 
know, there are tough calls you have to make. And, you know, 
this issue seems so easy in a lot of ways--this 10 percent 
rollover issue, adding additional quota based on certain 
criteria--that it would be such a positive to the fishermen to 
help as you move forward to this larger--because I am a 
believer, just so Mr. Welch understands this--we have had 
success around these quotas, around catch shares--hard numbers 
too.
    We have had great success in our fisheries that was being 
devastated by overfishing. I can tell you the halibut--we had 
5,000 fishermen at one point. We've consolidated 2,500. They 
used to fish 2 days for 24 hours. That's it. Now they fish for 
10 and a half months. We get premium dollar, and it is sold 
around the world.
    We have to deal with a third element, which is subsistence 
hunting. So we not only have recreational, we have commercial 
and subsistence. So we have a complicated process more so than 
most communities. So I'm a believer in this, so I would just 
encourage you to make some--on this one, it seems such an 
easy----
    Mr. Cunningham. Could I make one just quick follow up 
comment?
    Senator Begich. Sure.
    Mr. Cunningham. Looking at the projections for the second 
year of sector operations, there's going to be a much smaller 
percentage of leftover tax. The projections look like they're 
going to get a lot closer to them this year. Some of that has 
to do with the second year of this operation. People are 
getting used to a new system and understanding how to make it 
work better for them.
    Senator Begich. Very good. Thank you.
    Senator Kerry. Thank you. Thank you very much, Senator 
Begich, for an important question.
    Congressman Frank?
    Mr. Frank. On the question of where this regulation ought 
to be, I am struck by this, and I have to say--and we have a 
serious problem here. Dr. Lubchenco obviously had to leave. But 
the contrast between her statement of almost self-
congratulation and what we hear from everybody else is stark. I 
mean, the industry is hurting, and she's--she cherry-picked the 
statistics. And I would have said this to her if she had still 
been here.
    You know, Senator Brown talked about changes. Most Federal 
agencies are somewhat advocates of the people in their name. 
The Veterans Administration, the Department of Veterans 
Affairs, the Small Business Administration, the Department of 
Agriculture--they're pro-farmer. The Veterans Affairs 
Department is pro-veteran. The Labor Department, even in a 
Republican administration, would have a good relation with 
labor. In a Democratic administration, Commerce is supposed to 
have a good relation with business.
    This is--there are only two regulatory agencies I can think 
of that have a genuinely sort of hostile attitude toward the 
people under their control, the National Marine Fisheries 
Service and the Drug Enforcement Administration, because 
there's almost the same degree of ``you're guilty'' on the part 
of NMFS toward the fishermen as there is in the DEA toward the 
drug dealers. And it's really very striking and it undermines--
again, we're a free society. You are not going to enforce 
everything. You need to have some cooperation.
    And I will say again we have asked--Congressman Tierney is 
taking a lead in this--that the Coast Guard administrative law 
judges not be the ones adjudicating Coast Guard prosecutions. 
And Commerce promised us they would change that and they 
haven't, and we have to get back to them. I know you know we 
have a secretary who moved, but that has to be done.
    Let me now ask Mr. Welch--you suggested a strong question. 
You said one of the agencies got up at the Council and talked 
about the influence over council decisions. What agency?
    Mr. Welch. Environmental Defense.
    Mr. Frank. Well, I think that's a very important point to 
make. Let me ask also--and, by the way, I think they have been 
wrong in the past about some of these issues, including, as I 
said, the scallop issue. Look, the key here is the amount of 
fish that can be caught. And it is overwhelmingly clear to me 
when we talk about every decision that is made--this is why I 
say that NMFS has the same relationship to fishermen as the DEA 
to drug dealers.
    Every decision is made with the interest of the fishermen 
almost considered to be adversarial. It's to let's make sure 
that there are enough fish, so that we get this point where, 
one, we acknowledge that the science isn't good. But with that, 
we take, as Mr. Keating brought out in his questioning, the 
most restrictive of the possible alternatives, even though it's 
probably outdated.
    Second, since that consistently leads to quota not being 
used, we limit the amount of quota we can reuse. I don't 
understand that.
    Mr. Cunningham, you said that you stopped with the 10 
percent at the Council. You didn't change it, and that next 
year you expect there to be less. Had there been--I'm sorry. I 
misstated you?
    Mr. Cunningham. I don't expect it to be less than the 10 
percent rollover.
    Mr. Frank. No, you expect there to be less unused catch.
    Mr. Cunningham. Correct.
    Mr. Frank. So, yes, I understand that. What that suggests 
to me is that the 10 percent was unnecessary originally. Let me 
ask you, if the 10 percent had been 20 percent last time, would 
that have had any deleterious effect on the fishery? Suppose 
instead of keeping it at 10 percent, the Council had voted to 
go to 20 or 25. Would that now have had any deleterious effect 
on the fishery?
    Mr. Cunningham. I don't have the information to make that 
determination.
    Mr. Frank. Well, I'm asking you to find out. My impression 
is the answer is obviously no, because if it were going to 
happen, you might have had a worse situation. And we have got 
to stop putting the--the reflex is, ``Let's say no.'' The 
reflex is, ``Let's not have a catch.'' And that especially 
indicates--because, look, I--and I am proud of my environmental 
record. We're not talking about permanently fouling anything. 
We're not talking about people dying from bad air or being 
poisoned by bad water. We're talking about the rate at which 
fish reproduce themselves.
    And we plucked this arbitrary 10-year number out of the air 
and put it into the statute. No one will defend that 10-years 
as scientifically valid. They say it's valid because it's in 
the statute. We ask people like Dr. Lubchenco, ``Will you help 
us change the statute?'' The answer is no.
    But then with this--and, yes, I agree we--and, by the way, 
the fishermen agree--I don't know a single fisherman who wants 
to be the last person to fish. I don't know a single fisherman 
who doesn't hope that fishing will go on for generations. So 
they want the fish to reproduce. But we take this arbitrary 
case of--not arbitrary, but inexact issue about reproduction, 
we freeze it at 10 years, and we freeze it here and we freeze 
it there.
    Let me ask all of you--if we were to--and I think this is 
critical. First of all, we say that the quota should not stay 
at 10 percent.
    Mr. Cunningham, I have to say I hope very much the Council 
will be willing to change that. A council which is going to 
stick with that rigid 10 percent figure, which no one justifies 
in scientific terms, will make me even more skeptical of the 
process.
    But, second, the 10-year in the Magnuson Act--we changed it 
in the Canadian boundary, and I see no evidence that that's 
endangering the fishing up there, or even the Canadians who are 
not living with the 10-years. My final question--can anyone 
tell me what the scientific justification is for a rigid 10-
year with very limited exemptions, and if not, would you 
support giving the same kind of flexibility in the basic 
Magnuson Act that we have with regard to the Canadian border? 
And let me start with Mr. Welch.
    Mr. Welch. I don't know where it came from. The conspiracy 
theory in me is that it gives environmental groups the ability 
to continually attack the fishing industry and say we're 
overfishing. From a harvester--and I really am concerned about 
the stocks--there is no reason we can't make that 15 or 20 
years, as long as we're not going backward and we're moving 
forward----
    Mr. Frank. Mr. Diodati?
    Mr. Diodati. Yes, I agree. I agree with that. I think the 
time line is irrelevant and it's really whether or not we're 
sustaining or moving forward.
    Mr. Frank. Mr. Cunningham?
    Mr. Cunningham. I concur. I've always said that the 10 
years does not have any scientific basis. But neither does 15 
or 20 years. So I think there needs to be some other mechanism 
for----
    Mr. Frank. No one is taking this away from them. See, we've 
got--I'd like to put you in the Department of Agriculture. 
That's where you'd really belong. We should call that the 
Department of Food Production. Maybe we can get them to throw 
us a subsidy every so often.
    But what we would do--no one is talking about taking away 
the discretion of the department to say, ``Wait a minute. 
There's too much fishing. We're going to run out of fish, and 
we've got to slow it down.''
    Mr. Cunningham. And as far as matching the Canadian model, 
those changes were made to keep us on an interactive basis----
    Mr. Frank. With the Canadians.
    Mr. Cunningham.--with the Canadians, rather than have them 
walk away from----
    Mr. Frank. I understand that. But with the Canadians not 
following the 10-year, were they depleting the stock to the 
point of no--non-reproduction?
    Mr. Cunningham. They don't manage in the same way we do.
    Mr. Frank. Were they depleting the stock to the point of 
non-reproduction?
    Mr. Cunningham. The stock numbers are down a little bit, 
but----
    Mr. Frank. You're not going to answer it? Were they 
depleting the stock to the point where we were worried about 
non-replenishment?
    Mr. Cunningham. Were they?
    Mr. Frank. The Canadians, the fishermen. Look, we----
    Mr. Cunningham. I don't----
    Mr. Frank. I'll give you the answer.
    Mr. Cunningham. I don't believe so.
    Mr. Frank. It's clearly no. The argument is we had to catch 
up with the Canadians, so we had to get to a situation where we 
didn't have the 10-year thing. They didn't have the 10-year 
limit, and no one has argued to me that because they didn't 
have the 10 years, they were at the point where they were 
depleting the stock.
    Mr. Cadrin?
    Dr. Cadrin. I would agree with the rest of the panel that 
the 10-year rebuilding deadline is not only arbitrary, but it's 
also auspicious if--as soon as the fishery management is 
completely determinant of fishery productivity, and we know 
that Mother Nature has a large role in this as well.
    Mr. Frank. Dr. Rothschild?
    Dr. Rothschild. I agree with everyone, particularly Cadrin.
    Mr. Frank. Well, that's one of the--what I plan to do--and 
I hope we can get this--is to amend that 10-year thing. That's 
the key. If we can amend the 10-year--and that's more 
flexibility to NMFS--I think a large part of this can then be 
resolved.
    Thank you.
    Senator Kerry. Congressman Tierney?
    Mr. Tierney. Thank you very much. You know, I don't really 
think this is an argument about do we regulate or do we not 
regulate.
    And, Mr. Welch, I'm almost positive that you didn't mean to 
infer that, that you really think the resource has to be 
regulated. It's all in the nature of the regulation and the 
enforcement and the openness that goes around it. Am I right?
    And, Dr. Rothschild, the same thing with you on that.
    So I was impressed, Dr. Rothschild, with three issues. 
Enforcement--and we've certainly been beating that. Somebody 
said we're beating a dead horse, really. If it was dead, we 
wouldn't still be beating it. But we're looking for the answers 
on that, and we're going to continue to press--I think 
everybody on this panel is--about accountability and about 
making sure we change the culture to one that tries to get 
civil cooperation before you start hammering down on the 
criminality aspect of it and treating everybody as if they're 
guilty before they're found to be violating.
    The management and communication part of it--Dr. 
Rothschild, I agree with you totally. I happen to be, I guess, 
maybe the only one on here, but I think others may be inclined 
to think that way--that could change rapidly with a change in 
leadership, and I've argued for that for some time. There has 
to be an urgency to this issue, and there has to be a certain 
empathy.
    I'm struck when you say, Dr. Rothschild and Mr. Welch, that 
maybe you want to change this to the Interior Department. One 
would think that the Department of Commerce would have more 
interest in small businesses and more empathy for them than 
perhaps you might expect out of Interior. And so that leads me 
to that point that maybe it's the leadership within NOAA or 
whatever that ought to be changed so that we get somebody in 
there who really does have empathy for it and understanding and 
wants to put some urgency into this and come down on the side 
of--err on the side of small businesses when there's a 
reasonable flexibility there, reasonable room to move on that 
than otherwise.
    And last is the science and the assessments, and I think--
you know, we've all talked about that, the need for resources. 
Senator Kerry is right on the button. You can't be, you know, 
whacking money out of one end of the discretionary budget, and 
then say, ``Gee, I wish we had money for that.''
    So the other two things of that are technology and cost. 
The cost--Mr. Welch, you indicated that, you know, the industry 
is not ready to absorb the cost of monitoring, particularly 
Days-at-Sea or whatever. Is there a time period where you think 
the monitoring would rightfully shift over to the industry? Is 
that a factor of time, or is there some other factor involved 
there? Mr. Welch?
    Mr. Welch. Based on the allocations that small boats are 
given, we're very frugal. We've always operated--we do our own 
maintenance, gear work. Everything we do ourselves. We cannot 
afford any more added costs to our business right now the way 
it is with the allocations we have.
    Mr. Tierney. And is that an immediate issue, or do you 
think that'll change over time, or do you think that's the way 
it's going to stay?
    Mr. Welch. It depends on where the science goes and how the 
stocks rebuild and all that. Currently, I don't see the stocks 
getting to the point where we're going to be able to catch 
enough fish to pay for this. We're all going to have to go out 
and buy bigger boats.
    Mr. Tierney. And I might ask, just generally, to the 
others, where is the technology on this, on the assessment 
issue and monitoring or whatever? Are we at a point where we 
expect there to be new technologies that are going to be 
helpful on that in the near future, or is this long-term?
    Dr. Cadrin. I think there are technologies that are not 
only being developed but are being implemented in other parts 
of the world, British Columbia and Alaska and others, where 
we're using electronic monitoring and electronic recording, 
transmission, and also getting into the incentive systems of 
fishermen-reported data. So the technologies are definitely 
there.
    It's a matter of operationalizing them and a willingness to 
solve problems from not only the Council but also from the 
regional office of NMFS and the Science Center to work together 
to solve these problems, use these technologies, rather than 
just maintaining status quo. And so there's no accountability 
in those parts. It's really the fisheries that are held 
accountable for lack of progress in implementing these 
technologies.
    Mr. Tierney. Doctor?
    Dr. Rothschild. One of the reasons that fishery management 
is so expensive is because we've created a management scheme 
that requires high technologies. And so what we need to do is 
go back to more simpler management schemes where you wouldn't 
need an observer on every boat, where you wouldn't----
    Mr. Tierney. Can you give us an example of that?
    Dr. Rothschild. Yes. Well, for example, the reason for an 
observer on a boat is to monitor, of course, what that 
individual fisherman does, and it would probably most likely 
have to do with discards. And so one technology that might have 
to do with discards is using a video recording, as people have 
suggested.
    But, really, the right way to do it is to take a step back, 
look at what our budget is, what the requirements are, and 
develop a systems engineering approach to coming up with the 
best system, just like Boeing does with an airplane or Lockheed 
Martin. It's as complex as putting a man on the moon, and we 
need to approach it from an engineering and cost-effective 
point of view.
    Mr. Tierney. Mr. Cadrin?
    Dr. Cadrin. To follow up to your other question about 
examples of simpler, more robust management systems, we've 
talked about striped bass here today. That was successfully 
recovered, not through catch shares and catch limits, but 
through other management implementations that were more suited 
to the fishery and the data collection there.
    And we talked about scallops. That was not rebuilt under a 
catch share system. There was observer coverage that was suited 
to the status determination similar to the 1996 authorization 
of the act and its requirements. Groundfish--we've talked about 
ending overfishing and rebuilding several of the groundfish. 
That all took place under relatively low observer coverage. 
It's these catch limits and catch share systems that require 
this more information. We can achieve the mandated conservation 
objectives without this data hungry requirement.
    Mr. Tierney. Thank you.
    Senator Kerry. Congressman Keating?
    Mr. Keating. Well, thank you. Thank you, Senator.
    I think it's clear that if we're looking at a bumper 
sticker for days here, in part, you know, one of those stickers 
any ways would be the fact that the science and data are slow, 
and as a result it's not accurate. But I think this, from my 
perspective, boils down to something Senator Kerry said, that 
we have to incorporate common sense here. And I like fish. I 
really like fish. I hope there's more fish. I like jobs. I 
really like jobs.
    And my question is to Dr. Rothschild. You said we could 
create 1,000 jobs or avoid losing 1,000 jobs. Could you give us 
a little more detail? And can part of that be what I talked 
about before with the--using the most restrictive, the most 
conservative way of looking at this imperfect data? If you just 
looked at it in the middle, a balanced approach to that, would 
that help?
    Dr. Rothschild. You don't have to look at--I mean, 
eventually, you want to look at imperfect data. But right now, 
know that 140,000 tons of fish could be caught without breaking 
any conservation regulations. But only a small fraction of that 
is caught because of the regulations. It is true that this 
relates to two or three species, like redfish and haddock.
    But if we could come up with some schemes--and we should be 
able to--to catch these fish, they're worth hundreds of 
millions of dollars and it's left in the water. And those 
hundreds of millions of dollars translate into a lot of jobs. I 
don't know how many, but it is a lot of jobs.
    The other issue is in the Governor's report--and Dr. Cadrin 
was instrumental in this--we pointed out that the catch level 
could be increased by approximately 30 percent. And we've never 
really had the kind of discussion we should have on that, but 
that would change 140,000 tons to about 180,000 tons. And so 
there are a lot of fish that are being wasted.
    So if you look at managing fish as if you were managing a 
department store, you would want to utilize everything, not 
conserve it. So, basically, there are hundreds of millions of 
dollars a year, to summarize, that would be available to the 
economy, but they aren't because of fishery management.
    And I have in my written testimony the rumor that the 2010 
year class of haddock is bigger than the 2003 year class of 
haddock, and if that's true, we should be gearing up right now 
to develop mechanisms so that fishermen can catch those, 
because the 2003 year class was worth about a billion dollars, 
and we only utilized a small fraction of that.
    Mr. Keating. OK. With that, Senator, I have time left, and 
this time, I'm going to yield it back while I have some to 
yield.
    Senator Kerry. Thanks a lot, Congressman. I really 
appreciate it.
    We're going to wrap up momentarily. Is there any--I want to 
ask Senator Begich to respond for a minute. He was commenting 
about the bycatch issue and the Alaska experience. I think it 
might be worthwhile just to----
    Senator Begich. Just a quick comment to Congressman 
Tierney--and you mentioned it, actually, Professor Cadrin--that 
Alaska is experimenting with some new technologies in order to 
manage the fisheries much better, and some of it is video, some 
of it is electronic. And in some cases, we've been able to 
reduce down bycatch. Even net sizes and techniques that we're 
utilizing there--which, of course, we think these will be 
helpful, not only, of course, for our fisheries, but around the 
globe.
    So I wanted to echo that and tell the Congressman there are 
some interesting ideas that are being pursued. I will underline 
this by saying one of the organizations within the Federal 
Government which is getting dramatically reduced is the one 
that expends money in this innovation. And we have to be very 
careful, but this innovation is critical for us to manage these 
fisheries better. But part of that play is with our folks in 
NOAA and within the fisheries.
    Senator Kerry. Thank you very much. As we wrap up, let me 
just make--I want to thank Sam Dallaire from the Senate 
President's staff, and I also want to thank Claire Saleski, 
Shawn O'Neal, and Amy Carrigan from my staff. And I want to 
thank the Commerce Committee staff for their cooperation and 
help in being able to come here today.
    Just a couple of comments, if I may, quickly. One, I don't 
know any fisherman who doesn't automatically understand--
certainly the fishermen in Massachusetts, the small fishermen--
sometimes you wonder about the factory and fleet folks who step 
out of the bounds, I think, sometimes. But I think the 
fishermen who are here, the ones who are struggling and 
fighting in that small business category that we're talking 
about here--there isn't one of them that doesn't understand the 
need to preserve the fisheries, to keep the stocks, and that 
isn't automatically a natural environmentalist. It just goes 
with the territory.
    As we think about this, we have to reflect on the dynamics 
of our fishery, which is complicated--a lot of different kinds 
of fishing folks with a lot of different competing tensions and 
interests. I know we can do a better job, because as a matter 
of common sense, we can find the sweet spot between 
preservation and protection and the right to fish. And, you 
know, Barney and others are absolutely correct. I mean, there's 
no glory or rectitude in an automatic 10-year deal, depending 
on what else you do and how you manage.
    So I look forward to this next meeting, and I'm going to 
ask Mr. Cunningham--I think it would be healthy if we could ask 
the members of the management council to come, all of them, 
from other states likewise, and I'm going to invite all of 
them. And I hope that we can have--you know, it's not a 
speechifying event, but a real discussion of how we're going to 
break through here and make some choices.
    And this delegation, I know, is united in its willingness 
to fight with the Commerce Department, with NOAA, with NMFS, 
with whoever it is that we need to in order to leverage common 
sense. We all understand our obligations to check the fishery, 
but we also just want to make sure we're basing choices on good 
science, good judgment, good input, good common sense.
    I would remind everybody here some of the biggest 
challenges that we face are not just--are not the overfishing 
challenge, but the pollution/acidification challenge. Nobody 
here should underestimate it. The levels of heavy metals that 
are showing up in our fish is really alarming.
    Professor, you're nodding your head. And the danger of 
acidification to spawning grounds, to crustaceans is gigantic, 
and it's already having an impact. So everybody here needs to 
recommit to efforts to deal with the climate change challenge 
that we're facing, and it is real with respect to our 
fisheries, enormously important.
    I don't know if anybody else wants to make a last- minute 
wrap-up comment.
    Senator Begich?
    Senator Begich. Mr. Chairman, thank you very much. And I 
just want to--I like--when I do meetings and participate in 
meetings like this, I will tell you a couple of things I want 
to do is to take away, as Chair of the Oceans Committee, a 
couple of things I heard that we need to make sure occur from 
the first panel and maybe the second panel.
    One from NOAA, we've asked for a report on their 
communication types to fishermen, what they're going to do, how 
they do it. The personnel issue, we will follow up, and if it's 
a required closed-door meeting, we will do that. The fisheries 
management process recommendations--we've asked NOAA to give us 
a detail of exactly how they're going to implement those and 
what the process will be, or what ones they're not going to 
implement. The rollover issue--you've heard the comments.
    The 10-year issue is interesting because I was just handed 
something. There are four incidents here that exceed the 10-
year, up to 41 years. So we have to look at why that is, what 
can we do to improve that so it's not just an arbitrary number 
that some have mentioned here. And I guess I would extract 
again, as much as I can, because I'm biased, of course, from 
Alaska, that we think we do all these things right up there. 
But maybe there are some other things we can extract out of 
that and share some more with the New England experience.
    But thank you, Senator Kerry, for holding this meeting. 
Thank you for the invitation to attend. It has been 
enlightening to me, and I will do whatever I can to assist in 
ensuring that as time goes on that all the fisheries, no matter 
what the stocks are, are sustainable. And the last thing I'll 
mention is the other piece is a budgetary item from NOAA on how 
do we ensure annual stock assessments. In order to do the 
assessments--may they be--I'll use the word, annual, but it may 
be a variation--but to make sure they are consistent and 
ongoing so you have a good way to manage. And I'll leave it at 
that.
    Senator Kerry. Yes.
    Mr. Frank. Senator, I'll pick up from there, and I--this is 
a pretty--actually, in part to our colleagues here in state 
government in Massachusetts--SMAST is well represented here by 
Mr. Cadrin and Mr. Rothschild. The Federal people acknowledge 
their good work. I have to say that I'm very proud--when we 
were still allowed to earmark, I will confess that SMAST was 
very high on my list of earmarks, and I think that that was 
helpful.
    I hope that the members of the legislature--and a lot of 
this is Federal, and I agree with Mr. Diodati that they 
shouldn't be bouncing this back to us. But the state, the 
administration, and the legislature can help us by fully 
funding SMAST, because we need to have science. We need good 
science to fight what we think is not good science, and that 
means adequate funding for SMAST. So I would put in that plea 
and acknowledge that those of us with a Massachusetts base have 
that responsibility.
    Senator Kerry. Folks, on that note, we thank all of you for 
coming. We look forward to this next meeting. We'll get back to 
you, as I said. Please--we'll put a pad over here. I want you 
to sign up on the pad--e-mails, telephones. We stand adjourned.
    [Whereupon, at 11:43 a.m., the hearing was adjourned.]


                            A P P E N D I X

     Response to Written Question Submitted by Hon. Mark Begich to 
                       Hon. Jane Lubchenco, Ph.D.

    Question. The Food and Drug Administration is currently considering 
approval of the first genetically engineered animal for human 
consumption, a transgenic Atlantic salmon created by AquaBounty 
Technologies. In the past, the escapement of non-genetically engineered 
farmed salmon and their contamination of wild salmon stocks has caused 
significant ecological and economic harm. Therefore, the prospect of 
the mass production of genetically engineered fish has raised alarm 
among the fishing industry, policymakers, and environmental groups, who 
are concerned about the potentially greater risks associated with the 
escapement of genetically engineered fish. Have the environmental and 
economic risks of the escapement of genetically engineered salmon or 
other marine fish been properly assessed? What are these risks?
    Answer. The U.S. Food and Drug Administration (FDA) has performed a 
comprehensive assessment of the environmental risks that could arise 
from the production of AquAdvantage Salmon. This assessment has 
included consideration of the potential environmental risks of 
AquAdvantage Salmon under the following specific conditions of use: 
production of eyed eggs in Canada, shipment of eggs to Panama, grow-out 
of functionally sterile fish in Panama, processing of fish in Panama, 
and shipment of food to the United States. As part of the agency's 
evaluation of AquaBounty's application for approval of AquAdvantage 
Salmon under those conditions of use, FDA has reviewed materials 
submitted to FDA by AquaBounty, including an Environmental Assessment 
(EA) prepared by the firm.
    FDA has been collaborating with other government agencies with 
expertise on issues associated with genetically engineered fish since 
2002. During the course of its review under the Federal Food, Drug, and 
Cosmetic Act and the National Environmental Policy Act, on August 5, 
2009, FDA sent a letter inviting NOAA Fisheries to consult with FDA 
regarding environmental issues related to AquAdvantage Salmon. A NOAA 
Fisheries Aquatic Animal Health Expert, along with FDA's aquaculture 
and environmental-risk experts, visited AquaBounty's grow-out facility 
in Panama on November 10-12, 2009. This site visit by FDA staff and 
NOAA Fisheries was conducted primarily to verify that the conditions of 
rearing and containment at the grow-out facility were as described in 
the materials submitted to FDA by AquaBounty, and to evaluate any other 
factors which could influence the potential for escape.
    The FDA also provided NOAA Fisheries a packet of reports including 
a draft EA prepared by FDA. NOAA Fisheries agreed to continue to work 
with FDA in providing technical guidance on FDA's draft Environmental 
Assessment. In addition to the draft Environmental Assessment and 
supporting documents, FDA also submitted its determination that the 
approval of the application for AquAdvantage Salmon will have no 
effect on the Gulf of Maine distinct population segment of Atlantic 
salmon listed under the Endangered Species Act of 1973 (ESA). Because 
NOAA Fisheries does not review no effect determinations, that letter 
fulfilled FDA's obligation under section 7 of the ESA.
    It is important to note that if FDA were to approve AquaBounty's 
application for AquAdvantage Salmon, these fish would be allowed to be 
produced and raised only under the conditions proposed in the 
application--including the specified locations of AquaBounty's 
facilities, which are limited to highly contained inland tanks, not net 
pens in the ocean. If, after approval, AquaBounty wanted to change the 
conditions of use in the application--for example, to add a new grow-
out facility--a supplemental application would be required, which 
would, in most cases, trigger a new environmental assessment.
    In September 2010, the FDA convened a Veterinary Medicine Advisory 
Committee to review science-based issues associated with AquaBounty's 
application. In advance of that meeting, FDA publicly released its 
review of AquaBounty's EA, as well as AquaBounty's EA itself, on August 
25, 2010. FDA stated that there was substantial, reliable information 
available in AquaBounty's EA to conclude that AquAdvantage Salmon are 
not expected to have a significant impact on the quality of the human 
environment.
                                 ______
                                 
Hon. John F. Kerry,
United States Senator,
Boston, MA.

Dear Senator Kerry,

    Enclosed please find the testimony of Mr. Herbert Crooks of 26 
Union Street, Newburyport, Massachusetts concerning problems he has 
encountered with the Federal Government in regards to scallop fishing. 
Mr. Crooks was unable to attend the Commerce Committee's field hearing 
at the State House on September 28th and asked for my office to submit 
comments on his behalf.
    Thank you for your prompt attention to this matter. If you have any 
questions, please feel free to contact my office directly.
            Regards,
                                         Steven A. Baddour,
                                                     State Senator,
                                                  First Essex District.
                      Testimony of Herbert Crooks
                                                    October 2, 2011
To whom it may concern:

    I have a twenty six foot boat, with this boat I jigged for ground 
fish (cod-pollack) in the Gulf of Maine for a number of years. When I 
reached retirement age I converted my boat so I could fish for 
scallops, at the time I had a four hundred pound (per day) permit. My 
scallop dredge was only four and a half feet wide. (the N.M.F.S. 
conciders a 10 Ft. dredge small) N.M.F.S. decided all scallopers would 
be monitored. (There is a monthly charge) In my case I could give up 
the four hundred lb. permit and drop down to forty lbs. a day. This I 
did because with my small dredge I would never catch 400 lbs in a day.
    Two years later they told me I would have to be monitored or loose 
my 40 lb. permit. I gave up. All I wanted to do is retire and do a 
little scallop fishing, nothing big, catch a few, pay my fuel, have a 
few to eat. The N.M.F.S. ruined my plans for retirement. I'm sixty 9 
years old, I'm not a big deal fisherman. The cost to convert to 
scallops has not been met. I'm hoping you can help me. I would like to 
have my 40 lbs a day permit back if possible. My health has not been 
good, shoulder surgery 2010, hip replacement surgery Oct. 6th, 2011. I 
just want to be able to catch a few scallops without being monitored.
            Thanks,
                                            Herbert Crooks.

    P.S. I know this doesn't mean much in the ``big picture'' but, it 
means a lot to me. Again I thank you for your time.
                                 ______
                                 
              Prepared Statement of Pew Environment Group 
                   and Conservational Law Foundation
    Chairman Kerry and members of the Committee:

    Pew Environment Group and Conservation Law Foundation submit this 
written statement for the record in today's hearing of the U.S. Senate 
Committee on Commerce, Science and Transportation. The Pew Environment 
Group, the conservation arm of The Pew Charitable Trusts, works 
throughout the world to foster a better understanding of environmental 
problems through research and to promote sound conservation policy. 
Conservation Law Foundation (CLF) is a New England-based conservation 
organization that works to promote a thriving New England through 
developing and implementing pragmatic, innovative solutions to the 
region's most challenging environmental problems. The headquarters 
office for the Pew Environment Group is in Washington, D.C. with 
regional offices in Boston. The headquarters office of CLF is in 
Boston, MA. CLF also has state offices in Rhode Island, New Hampshire, 
Vermont, and Maine.
    The purpose of this hearing is to examine the first year of 
implementation of Amendment 16 to the Northeast Multispecies 
(Groundfish) Fishery Management Plan, with a specific focus on the 
sectors program established by Amendment 16, including its social and 
economic impacts. The Committee also seeks advice on constructive steps 
forward for improving Amendment 16's outcomes. Both the Pew Environment 
Group and CLF have actively engaged in ending overfishing and 
developing a sustainable, thriving fishing economy in New England for 
more than fifteen years. We appreciate the opportunity to provide this 
testimony to the Committee to share our perspectives on these critical 
and timely issues.
    The following testimony comprises four sections: a summary; a brief 
history of groundfish management leading up to Amendment 16; the New 
England Fishery Management Council's objectives in developing and 
adopting Amendment 16 and the early outcomes of Amendment 16 based on 
the limited data set currently available from the first fishing year; 
and our recommendations on critical actions that need to be taken now.
I.Summary
    Amendment 16 has been in effect for 17 months. The amendment was 
the result of a three-year public process and was overwhelmingly 
approved by the New England Fishery Management Council. Contrary to 
many predictions and in contrast with the estimated $15.4 million in 
losses that were predicted if the 2010 fishing year took place under 
the existing ``Days-At-Sea'' management approach alone,\1\ gross 
revenues for the groundfish fleet in the 2010 fishing year for all 
species landed--$297.7 million--were $26.6 million more than gross 
revenues in the 2009 fishing year and only $500,000 lower than the 
banner 2007 fishing year.\2\ Groundfish permit sales, an important 
indicator of consolidation at an organization level, were extremely 
low. These outcomes show a healthy, adaptive fleet that has diversified 
to target multiple species beyond groundfish, particularly skates and 
monkfish, and that has begun to take advantage of the added flexibility 
that the sector system in New England provides even in the challenging 
start-up year. As annual catch limits available to fishermen increase 
in the 2011 and 2012 fishing years, an outcome that directly reflects 
the success of the New England Council's current management 
decisions,\3\ the economic picture in the New England groundfish fleet 
should continue to improve, building on these early Amendment 16 
successes. There remain important issues with respect to understanding 
net revenues across vessel classes, the loss of crew positions, the 
failure of the allocation formula to capture the 2007-2009 fishing 
years, concerns about sector transparency and potential monopoly 
practices, improving the ability to raise annual catch limits on 
rebuilding stocks in a timely manner, and consolidation. These issues 
are already being addressed in the appropriate venue--the New England 
Council. Amendment 16 is an important step in the right direction for 
New England and New England's fishermen. It should be supported in 
Washington, D.C., and efforts to improve the system should be 
spearheaded in New England as intended by Congress.
---------------------------------------------------------------------------
    \1\ Amendment 16 FEIS, Table 255. The Days-At-Sea (DAS) program was 
the indirect control management system that was in place before the 
sector/hard quota program was added to it as an option in Amendment 16.
    \2\ These calculations are from the data and analysis in the NMFS 
Report on the 2010 Fishing Year. They assume that the NMFS Report 
presented the revenue data in constant dollars. If the report reported 
the revenue data in nominal numbers, the analysis would show lower 
results for the 2010 fishing year.
    \3\ Additional quota over the 2010 fishing year limits are 
available in many species in the current 2011 fishing year and 
significant increases in quota for all but five stocks are projected to 
be available in the 2012 fishing year.
---------------------------------------------------------------------------
II. The Amendment 16 Context
    Amendment 16 was not written on a blank slate. Fishermen, 
conservationists, politicians, coastal municipalities, scientists, and 
fishery managers in New England have struggled with the multiple 
challenges of achieving the laudable fishery management goals of the 
Magnuson-Stevens Fishery Conservation and Management Act (MSA) since 
that law first went into effect in December 1976. What followed MSA 
enactment was a series of management actions later called ``an 
enormous, immensely complicated intervention.'' \4\
---------------------------------------------------------------------------
    \4\ Margaret Dewar, Industry in Trouble, (1983).
---------------------------------------------------------------------------
    Indeed, management chaos was the rule with New England groundfish, 
both in the years leading up to the passage of the MSA, when 
international fishing factory ships were anchored on Georges Bank, and 
in the years immediately following passage, when the offshore fishery 
was domesticated under U.S. law. Growing frustration with the ``hard 
quota'' groundfish management rules that were in place in New England 
after passage of the MSA led New England managers to introduce a system 
of ``indirect'' controls to control fishing mortality, such as limiting 
the numbers of days fishermen could be at sea (the days-at-sea, or DAS, 
program), changing mesh sizes and other attributes of fishing gears, 
closing areas where fish were aggregating, and setting low ``trip 
limits'' for landing some stocks.\5\
---------------------------------------------------------------------------
    \5\ Trip limits limited the amount of a particular fish species 
that could be landed at the dock, but this control did not limit the 
amount of that species that could be caught at sea. The trip-limit 
control practice produced significant and widespread discarding of dead 
or mortally injured fish that were caught at sea but could not be 
landed.
---------------------------------------------------------------------------
    The U.S. domestication of groundfishing off New England's coast 
post-MSA was also marked by a Congressional decision to grow the U.S. 
groundfish fleet by heavily subsidizing capital investments in a fleet 
of offshore boats through Federal loan, guarantee, and tax programs. No 
regard was paid at the time to how much fishing power a New England 
groundfish fleet could sustainably exert on the groundfish stocks, 
either in the short or long term. This regional capacity bubble that 
Congress was subsidizing was coupled with a policy of open access to 
the fishery for anyone with a boat,\6\ technological improvements that 
resulted in a rapid increase in the fishing power of each boat in the 
1980s and 1990s, poor assessment data that was often 4 years out of 
date by the time managers acted on it, and weak management by the New 
England Council and the National Marine Fisheries Service. These 
factors inevitably led to this century's second major collapse of New 
England's groundfish, this time accomplished by an overcapitalized, 
undermanaged U.S. fleet. Between 1994 and 1995, cod and haddock 
populations plummeted to the lowest estimates ever recorded.
---------------------------------------------------------------------------
    \6\ The fishery remained open to all entrants until 1995.
---------------------------------------------------------------------------
    The next period of groundfish management in New England, from 1995 
to the present time, reflects a different pattern of ``enormous, 
immensely complicated intervention,'' characterized by multiple, 
successful lawsuits brought by conservation groups, two major 
amendments to the Magnuson-Stevens Act,\7\ and multiple revisions to 
the Northeast Multispecies Groundfish Plan\8\. All these actions 
focused on the persistent failure to end and prevent overfishing in the 
Nation's fisheries more than 20 years after Congress first established 
that important national objective. Amendment 16 emerged out of this 
contentious and costly history and importantly reflected a commitment 
by the New England Council to fully meet its legal and policy 
objectives to prevent overfishing and produce healthy, thriving 
fisheries in New England.
---------------------------------------------------------------------------
    \7\ The Sustainable Fisheries Act, Pub. L. No. 104-297 (1996) and 
the Magnuson-Stevens Fishery Management Act Reauthorization Act, Pub. 
L. 109-479 (2007).
    \8\ In addition to the 15 amendments to New England's groundfish 
management plan that preceded Amendment 16, there have been more than 
45 less-comprehensive framework adjustments to the plan. With one or 
two non-controversial exceptions, all of these actions were taken on 
the authority of the New England Fishery Management Council.
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    The Council began to work formally on Amendment 16 on November 6, 
2006, roughly at the same time that the 108th Congress was in the 
process of overwhelmingly approving the Magnuson-Stevens 
Reauthorization Act.\9\ The New England Council had already made two 
decisions that served as major drivers of Amendment 16: first, that 
groundfish management would shift back to a hard quota, direct control 
approach and, second, that the New England sector management pilot 
program put in place in 2004 should be expanded as an option to all 
fishermen.\10\ Leadership at the Council publicly signaled their 
intention to put the fishery under hard quotas during the Amendment 13 
approval process, well before the accountability provisions of the 2007 
Magnuson-Stevens Reauthorization Act made hard quotas a virtual 
requirement of any fishery management plan. Moreover, the Council had 
already launched a sector management/hard quota pilot program in 
Amendment 13 with the intention of learning from that experience.
---------------------------------------------------------------------------
    \9\ The legislation passed the Senate on unanimous consent and 
passed the House of Representatives under suspension of the rules 
without a record vote.
    \10\ The Council was also locked into making its ``balloon 
payment'' on the overfishing it had allowed in the early years of the 
rebuilding programs for a number of the stocks. There was general 
awareness that Amendment 16 could require major catch reductions 
because of the flexibility that New England had already taken advantage 
of under Amendment 13.
---------------------------------------------------------------------------
    Notwithstanding efforts by some to rewrite this history to their 
own narrow purposes, the New England sector-based management program 
was designed and implemented first by the New England Council in the 
fall of 2003, almost 7 years before the 2010 fishing year started under 
Amendment 16 and 6 years before a draft NOAA Catch Share Policy was 
circulated for public comment in December 2009. The first groundfish 
sectors with hard quotas were proposed by smaller-scale, coastal boat 
operators from eastern Cape Cod, who were convinced that their future 
access to the groundfish would be eliminated by the Days-At-Sea 
management approach in effect at the time. That program put these boats 
in direct competition with the larger and more mobile trip boats for a 
limited amount of groundfish, a competition they knew they could not 
win. In return for accepting hard quotas on their catch, these Cape 
fishermen were given both protection in terms of having a set amount of 
quota they could catch over the year and some flexibility in terms of 
how they could catch that quota.
    This 2003 Council decision, coupled with the positive experience 
that the Cape fishermen had in their pilot sectors during the initial 
years, evolved into the more expansive sector program the New England 
Council implemented in Amendment 16. Quota-based sector management is a 
New England idea that was conceived and implemented first in 
Massachusetts by Massachusetts fishermen.
III. The Council's Amendment 16 Objectives
    The New England Council's major management goals for Amendment 16 
were relatively straightforward, albeit ambitious:

        1. Approve a groundfish management plan that could be in place 
        by May 1, 2010 that met the Council's objective of creating a 
        hard quota program and that also met the accountability and 
        annual catch limit requirements of the Magnuson-Stevens 
        Reauthorization Act to end and prevent overfishing.

        2. Adjust all fishing catch limits so that the rebuilding dates 
        set by the Council in Amendment 13 would be met based on 
        current stock assessments; in several cases this required 
        dramatic cutbacks from the 2009 fishing year mortality rates.

        3. Make the sector management/hard quota approach widely 
        available to groundfish fishermen throughout the region on a 
        voluntary basis so that the operational flexibility that was 
        available to Cape Cod fishermen under the pilot hard quota/
        sector approach would be available to others to reduce the 
        expected social and economic impacts of the required quota 
        reductions.

        4. Reduce the mortality allowed by indirect control measures in 
        the default program for fishermen not in sectors--the DAS 
        program--so that estimated fishing mortality goals would also 
        be met in this so-called ``common pool'' fishery through 
        overall catch limits.

    The New England Council approved Amendment 16 by a vote of 14-1-1 
after more than 3 years of intense public debate, with positive votes 
from all Massachusetts representatives on the Council. Amendment 16 
went into effect on May 1, 2010 with approximately 95 percent of the 
active groundfishermen \11\ ultimately electing to enter one of the 
multiple sectors that formed under the auspices of Amendment 16. 
Amendment 16 was to a great extent the first groundfish management plan 
since 1976 that could arguably be said to be in full compliance with 
the MSA's legal requirements.
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    \11\ The New England groundfish fishery has always had many more 
issued permits than active fishermen, an artifact of the open access 
period. Historically, the number of groundfish permits has always been 
more than double the number of actual, active fishermen on the water. 
Claims that only half the permitted vessels were actively fishing is 
hardly an outcome of Amendment 16.
---------------------------------------------------------------------------
    Notwithstanding the New England Council's authorship and strong 
endorsement of the plan, the predictions of social and economic chaos 
that seem inevitable with every management change in New England 
fisheries resurfaced again for Amendment 16, primarily from some in 
Massachusetts and New Hampshire. These dire predictions as well as the 
Council's objectives can now begin to be held up to the light of one 
full year of fishing under Amendment 16.
IV. Amendment 16 and the 2010 Fishing Year
    Initially, we want to make four observations. First, fisheries 
management produces ``winners'' and ``losers'' in the fishing 
community, as management actions do in any industry. Amendment 16 is no 
exception. While we believe the data so far leads to a conclusion that 
Amendment 16 was effective in accomplishing its larger purposes while 
minimizing a number of the impacts that managers identified during the 
plan development process, the Pew Environment Group and CLF recognize 
that some fishermen have suffered significant and potentially 
disproportionate losses as a result of Amendment 16. We share the 
obvious concern and commitment of members of this Committee that these 
negative outcomes from Amendment 16 should be documented, quantified, 
and taken into account in future management actions.
    Second, it is premature to draw firm conclusions from the 
preliminary data and analysis. Permit numbers, vessel activity shifts, 
shifts in gear types or active vessel sizes, landing port shifts and 
similar early results may or may not reflect real phenomena and may or 
may not be directly connected to Amendment 16. Current analyses are 
limited: they do not accurately reflect changes in economic activity at 
an ownership level; they do not reflect net revenues; they may reflect 
other regulatory drivers such as the ability to land lobsters from a 
groundfish boat in some states but not in others; they may reflect 
other relevant state-to-state regulatory or taxation differences; data 
on crew employment changes have always been notoriously difficult to 
collect and interpret; the 2010 fishing year was a start-up year for an 
entirely new management approach with a steep learning curve for 
fishermen and sector managers alike; and finally, there are a number of 
future costs associated with the observer program that are temporarily 
being subsidized by the Federal Government and are not currently 
reflected in fleet cost structure.
    Third, critical analytical information is not available to the 
public or, in some cases, this Committee. Legal restraints imposed by 
Congress on data releases to protect proprietary economic fishing data, 
coupled with the agency's conservative approach to releasing this 
confidential data, prevent the public from understanding a number of 
economic or social impacts, particularly at the level of a small port 
or individual fisherman. Another set of cost data--the direct or 
indirect internal costs that individual sectors may be imposing on 
their members through membership fees, operating charges, or other 
indirect internal ``regulatory'' costs--are not available to the 
agency, the Council, or this Committee based on our understanding. 
These costs could be very significant to the success or failure of an 
individual operation.
    Fourth, the 2010 fishing year (FY) cannot be analyzed in isolation. 
We anticipate that the gross 2010 FY groundfish revenues will grow over 
time for two reasons. First, because the Council was successful in 
virtually eliminating overfishing in the fishery, fish stocks continue 
to rebound in most cases. Accordingly, the specifications for the 
current 2011 FY and the 2012 FY are increasing the allowable catch. In 
the 2011 FY, the quota for many species has already been increased; for 
the 2012 FY (which starts May 1, 2012), the science recommendations 
before the Council for approval this fall in Framework 47 show 
substantial increases in quota over the 2010 FY catch for additional 
species, including a number of the flounder species that were in 
significant trouble previously. The total recommended allowable 
biological catch, which still must be reduced by the Council to account 
for management uncertainties, shows a total Acceptable Biological Catch 
(ABC) of approximately 98,800 metric tons available in the 2012 FY. The 
total 2010 groundfish catch was approximately 58,900 metric tons.
    The second reason we expect continued improvements in gross 
revenues is that we anticipate that sectors will continue to improve 
their ability to manage their member's fishing activities in real time 
to target their sector members toward areas with a high abundance of 
available species like haddock, redfish, and Pollock, and away from 
areas with relatively higher concentrations of species that have more 
limited quotas. In addition, the New England Council as part of its 
habitat protection work is looking at modifying some currently closed 
areas to allow new entry into areas with high haddock concentrations. 
Although it is too early in the process to draw any conclusions, some 
closed area modifications may make sense and could be in place by the 
2012 FY.
    Turning then to the social and economics outcomes of Amendment 16 
from a macro-level, the Amendment 16 outcomes look positive based on 
currently available information. Most active fishermen took advantage 
of the sector opportunity (some 98 percent) and the early information 
is that there may have been overfishing on only one sub-component of 
one stock--an important first for New England groundfishermen. For the 
entire fleet in the 2010 FY, gross all-species revenues were $297.7 
million on landings of 238 million pounds; groundfish revenues were 
$83.3 million on 58.5 million pounds.\12\ In 2007, a very strong 
revenue year in recent history, gross revenues were $298.2 million on 
259.5 million pounds of fish, of which groundfish were $89 million on 
64 million pounds of fish. Year-to-year, the fleet grossed $26.6 
million more in the 2010 FY than in the 2009 FY on 2.4 million fewer 
pounds of fish.
---------------------------------------------------------------------------
    \12\ See caution at footnote 2.
---------------------------------------------------------------------------
    The Massachusetts fleet and large ports were the primary 
beneficiaries of Amendment 16, recording one of the strongest years in 
memory with $12 million more in revenues than 2009 (+7.3 percent) and 
even $6 million more than the strong 2007 fishing year. New Bedford 
landed roughly $10.4 million of that (+12.2 percent from 2009). Boston 
also did remarkably well with roughly a $4 million increase over 2009: 
a 25.5 percent increase in gross revenues over the prior year.
    Many factors produced and maintained high prices over the course of 
the 2010 FY, but it is our view that Amendment 16 was an important one. 
We heard no reports this past year of the random market gluts that have 
reduced prices to the groundfish boats in New England in the past. The 
fleet seems to have caught fewer fish on fewer trips and made more 
money. Our view is that the fleet fished smarter in the 2010 FY by 
timing their harvests to times of the highest prices, by increasing 
cooperation within sectors, and by diversifying their species catch. 
Amendment 16 gave the active fishermen in the sectors the flexibility 
that allowed them to do that without jeopardy of overfishing, excessive 
regulation, or early closures.
    Active New England fishermen realized $26.6 million more in gross 
revenues in the 2010 FY than the 2009 FY. The NMFS 2010 FY Report 
concludes that ``[a]verage all-species [gross] revenue per vessel 
during the fishing year 2010 was greater than that in any of the three 
prior fishing years across all vessel size categories.'' \13\ That is a 
significant positive outcome after the first year of Amendment 16.
---------------------------------------------------------------------------
    \13\ NMFS 2010FY Report at 9 (emphasis in original).
---------------------------------------------------------------------------
    Perhaps even more significantly, some classes of vessels in the 
fleet appear to have landed these fish with only one-half the number of 
fishing trips that they had previously used. Fewer trips result in 
lower fuel and other variable costs and allowed some fishermen to spend 
more time in other fisheries without jeopardizing their catch limits. 
Each trip, therefore, was far more efficient and the catch-per-unit-
effort (CPUE) figure for the fleet, a widely recognized statistic used 
to measure the health of a fishery, is likely to rise significantly in 
the 2010 fishing year.
    On the flip side, the complete cost picture of Amendment 16 remains 
unknown at this point. Lower fuel costs and other variable operating 
costs, as well as the new revenues some fishermen realized by leasing 
their fishing privileges to others in their sectors, have to be offset 
against the new one-time and annual costs of joining and belonging to a 
sector, as well as costs associated with leasing fishing privileges 
from other fishermen in their sector.\14\ Anecdotally, it appears that 
some of the smaller, day boat operations have been disproportionally 
impacted by new costs and limited allocations, although it is 
impossible for us to attempt to quantify or understand the potential 
causes for this situation at this time. Variable sector cost structures 
may contribute significantly to this issue: some sectors seem to charge 
relatively modest entry charges and operating charges; others have 
significant up-front membership payments and other charges on fish 
landed through the sector. These costs and other sector practices could 
add considerable expenses to a sector member's operations that may not 
be proportionate to a vessel's size or allocation. As noted above, 
these costs are not controlled by the government and, to our knowledge, 
there is little information available that allows these costs to be 
comprehensively examined.\15\
---------------------------------------------------------------------------
    \14\ This intra-fisherman allocation leasing is not new with 
Amendment 16; fishermen already could lease days-at-sea before 
Amendment 16. Amendment 16 shifted this program to ``pounds of fish'' 
instead of ``days-at-sea'' and increased the flexibility available to 
sector fishermen using this existing tool.
    \15\ See the Port Clyde Community Groundfish Sector operating plan 
for example. http://www.nero.noaa.gov/sfd/sectordocs/
PortClydeFY10OpsPlan.pdf. The annual membership fees and poundage fees 
are referenced but no amounts are set or identified. See Section 2.06.
---------------------------------------------------------------------------
    In terms of the number of active boats and the claims by some that 
Amendment 16 has produced ``massive consolidation,'' there is only 
anecdotal information at this point to support those claims. While we 
remain concerned that the New England Council did not put numerical 
limits on the fishery that would prevent unintended consolidation in 
Amendment 16, that task is now underway under Amendment 18. Moreover, 
by its own specific terms and the stated intent of the Council, nothing 
in Amendment 16 is irreversible if the Council concludes that 
consolidation caps, new allocation formulas, or other controls are 
necessary to meet the national standards under the Magnuson-Stevens Act 
or the policy objectives of the New England Council. The Council has 
also passed a March 2011 control date on the fishery that puts the 
world on notice that fishing history developed after that date may not 
be considered by the Council in the future.
    Reviewing the available data from the 2010 FY, the number of active 
groundfish boats decreased under Amendment 16 at a slightly higher rate 
than the decreases recorded in the prior 3 years. There are a number of 
possible explanations for this result, and perhaps all of these 
mechanisms were operating together. First, individuals in sectors who 
owned multiple groundfish permits on separate boats were allowed to 
consolidate their permit histories onto one boat if their sector rules 
permitted that. There is little question that a number of the larger 
operations located in the larger ports like New Bedford and Gloucester 
took advantage of this new ability to re-configure their operational 
profile down to one or two boats. Such economic efficiency is 
encouraged by National Standard 5 (``consider efficiency in the 
utilization of fisheries resources'') in the MSA and not necessarily a 
negative outcome on its own.
    Second, under the older DAS system, the active groundfishermen 
tended to fish as hard as they could during the days they were allowed 
to fish, and many tended to frontload fishing to the earlier part of 
the season to avoid late season changes that could be implemented by 
NMFS if it looked like there were going to be too many landings. This 
behavior was unsafe, produced market supply gluts with low prices, and 
often resulted in unpredictable early closures or additional 
regulations at the end of a fishing year. Under the Amendment 16 
system, this has all changed. A fisherman can fish when the weather, 
prices, his health, and the availability of crew, and other factors are 
optimal for him or her. Or not, as there is no penalty for a fisherman 
who doesn't fish: it can be leased to someone else in the sector for an 
arm's-length fee. A number of fishermen undoubtedly took advantage of 
this new leasing opportunity for a variety of reasons: health, age, 
taking advantage of other non-groundfish fishing opportunities, and 
other personal issues. These vessels might choose to become 
``inactive'' during the 2010 FY while still retaining the right to 
become active again in the future if circumstances change. It is our 
understanding that the numbers of sales of groundfish permits with 
fishing history dropped significantly during the 2010 FY over prior 
years, suggesting that permanent shifts in fishing activities may not 
have occurred.
    Third, continued consolidation was one of the Council's objectives 
with Amendment 16. The New England Council had been aware for years 
that the groundfish fleet's fishing power significantly surpassed the 
ability of fish stocks to provide fish. They have been actively 
approving management plan amendments that reduced the fishing power of 
the New England fleet for some time. Amendment 16 was a continuation of 
that policy. Congress as well had recognized this overcapacity problem 
in New England and had earlier authorized tens of millions of Federal 
dollars to be spent to reduce fleet size through Federal buy-out 
programs in New England.
    For decades, the fleet's groundfish fishing power has been 
significantly greater than made economic or environmental sense, but 
this capacity bubble was always subsidized by overfishing and target 
quota overruns. The high number of permitted but inactive boats in the 
fleet during the prior DAS program is ample testimony to that 
overcapacity. The boats associated with these inactive permits had no 
regulatory impediment to fishing under the DAS program, yet the owners 
still chose not to fish those permits.
    More importantly, the current New England groundfish fleet is 
widely acknowledged as having too much fishing power even with fully 
rebuilt fish stocks. The economic inefficiency associated with that 
overcapacity is not consistent with a sustainable fishery, particularly 
with respect to the larger, commercial operations. A significant amount 
of the consolidation experienced in Amendment 16 will undoubtedly 
reflect a number of fishing operations moving their fish allocation to 
their more economically efficient boats.
    In point of fact, the old DAS program was far more brutal with 
respect to its consolidation effects than Amendment 16, falling most 
heavily on the coastal day boats that lacked the mobility of the larger 
fishing vessels to re-locate quickly to where the fish were 
congregating or to fish safely offshore year-round. The larger boats 
fished heavily both offshore and near shore, and the DAS program (which 
charged permit holders for steaming time when a boat wasn't fishing) 
ensured that the large boats fished inshore whenever they could to 
minimize the charges against the permit. This behavior both drove 
coastal boats into other fisheries and, by overharvesting inshore 
stocks, reduced the catch-per-unit effort and fishing history for these 
operations even when they were able to fish.
    In order to put Amendment 16's first year performance in context, a 
longer time period is necessary because a great deal of consolidation 
of permits had already occurred by the start of the 2007 FY. Between 
1996 and 2007, the number of active groundfish boats fell 42 percent 
from 1450 to about 820, the number of full-time groundfish fishermen 
fell by about 30 percent, and part-time groundfishermen declined by 50 
percent.\16\ Over that same period, overall groundfish landings fell by 
about 10 percent. The NMFS 2010 FY Report only analyzes data between 
the 2007 FY and the 2010 FY.
---------------------------------------------------------------------------
    \16\ www.caploggroup.com/publications/html: Memorandum re. Current 
Level of Consolidation of the Northwest Multispecies (Groundfish) 
Fishery at 3 (May 2010).
---------------------------------------------------------------------------
    With respect to the distribution of fishing privileges across the 
groundfish fleet, the data for the 2010 FY indicates that the top 20 
percent of the multispecies permitted vessels accounted for 65.1 
percent of the fleet's gross revenues for all species landed by those 
vessels and 80 percent of the fleet's groundfish stock gross revenues. 
In 2007, the comparable numbers for the top 20 percent were 61 percent 
for all species and 67 percent for groundfish alone. In 2010, the 
bottom 40 percent of the groundfish vessels accounted for 8.9 percent 
of all species gross revenues and 1.4 percent of groundfish stock gross 
revenues and 10 percent and 5.3 percent respectively in 2007.
    Year-to-year between the 2009 and the 2010 fishing years, the top 
20 percent of vessels increased their all-species revenue by 4.7 
percent and their gross groundfish revenues by 11.1 percent. The 2009-
2010 year-to-year gross revenue change for the bottom 40 percent of the 
groundfish fleet was -1.6 percent change for all species and a -1.9 
percent change for groundfish revenues. Thus, within this short 
analytical time period, there are some trends that indicate some 
consolidation in total revenues and a more significant increase in 
groundfish revenues in the largest 20 percent of the fleet. Most of 
this shift appears to have occurred by relative changes in the top 60 
percent of the groundfish fleet, not the bottom 40 percent.
    With respect to the number of vessels that were earning revenues in 
the fishery in the 2010 FY, there were 28 percent fewer vessels earning 
the top 50 percent of all species gross revenues in 2010 than 2007 (207 
from 249), but only a 9.7 percent change from 2009 to 2010 in this 
category. In the bottom 50 percent of active boats, all-species 
revenues decreased 18.9 percent from the 2007 FY to 2010 FY but only 
10.2 percent of that decline occurred after Amendment 16. Notably, none 
of these changes account for the changes at an ownership level, as 
opposed to a permit level. That information is obviously important to 
understand but will not be available until later this fall.
    While some of these fishing privileges distributional ratios may 
seem startling to someone new to fisheries, this ratio is quite 
consistent with patterns in this fishery in the past and in other 
developed fisheries around the world, which traditionally show 20 
percent of the boats catching 80 percent of the fish in a particular 
fishery. As the Cap Log Group reported: ``The Northeast Multispecies 
Fishery has approximately followed the 80-20 rule for over a decade, at 
least. From 1998-2007, the distribution of landings remaining fairly 
consistent with about 20 percent of the vessels harvesting around 80 
percent of the groundfish. In contrast, about half the vessels landing 
more than one pound of groundfish caught under 5 percent of the total 
catch annually across the same period.'' \17\
---------------------------------------------------------------------------
    \17\ Id. at 4.
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    Amendment 16's consolidation pressures and effects cannot be 
analyzed in isolation from either the trends that were already well in 
place in New England or from the Council's explicit intentions or on 
the basis of anecdotal or partial information. And these outcomes 
should not be measured on the basis of a single year, a year that was 
widely characterized by an array of start-up challenges in the sectors. 
What can't be answered quantitatively, and what is rarely, if ever, 
discussed by opponents of Amendment 16, is what the effects of the 
lower catch limits available in the 2010 FY would have been on the 98 
percent of the fleet that went into sectors--day boats and trip boats 
alike--if the sector program had not been available to them

V. Recommendations to the Committee
    The Committee seeks suggestions for constructive steps forward that 
improve Amendment 16's outcomes. In that spirit, the Pew Environment 
Group and CLF offer the following thoughts.
    Amendment 16 is an important step forward for groundfish management 
in New England and has a number of promising early results. It is not 
and cannot be the final answer; there is still critical work to be 
done. The following recommendations are not set forth in any particular 
priority and include items in which Congress may have a beneficial role 
and others where the New England Council should take the lead.

    1. Amendment 18, which has been specifically designed to look at a 
range of social and economic and operational aspects of Amendment 16, 
including its consolidation and distributional effects, should be high 
on the New England Council's priority actions for the coming year. It 
is of utmost importance that the Council balance the goals of National 
Standard 5 (improve efficiency) with National Standard 8 (minimize 
community impacts). Among the issues that PEG and CLF believe the New 
England Council has to analyze and respond to in Amendment 18 are:

   consolidation caps and stock control caps (percentage of a 
        stock that can or should be controlled by one entity), both at 
        an organizational level and at the sector level;

   disproportionate intra-state distributional effects, 
        although these may well be completely due to factors that are 
        extrinsic to Amendment 16;

   the social and economic impacts of the 1996-2006 allocation 
        time period set out in Amendment 16, particularly with respect 
        to the question of whether it has failed to capture increased 
        landings of some segments of the fleet during the 2007-2009 
        fishing years; and

   sector rules and member charges, with an objective of 
        establishing performance standards that ensure that entry and 
        exit rules of sectors are equitable, transparent and 
        reasonable, and that sectors do not operate in an anti-
        competitive or monopolistic manner within the fishery or act 
        unreasonably to bar dissatisfied members from transferring to 
        another sector. Sectors are now the principal way that 
        fishermen have to access the groundfish fishery; regulators 
        need more explicit oversight of their operations.

    2. Congress should provide targeted research and development 
funding for gear improvements and sector technology that will allow 
fishermen to catch higher percentages of target rebuilt fish 
populations without negatively affecting rebuilding programs of 
overfished stocks. The New England Council is already exploring other 
approaches to increasing access to rebuilt stocks without interfering 
with the trajectory of the stocks that are still being rebuilt. 
Additional research funding directed toward gear technology and sector 
management improvements would continue to pay multiple dividends over 
time.\18\
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    \18\ Congressional efforts to amend the Magnuson-Stevens Act to 
allow higher catch rates or overfishing on rebuilding fish populations 
like cod in order to achieve more of the available yield on haddock 
have failed to consider possible long-term impacts. Haddock is abundant 
today primarily because of two unusual and disproportionately large 
year classes of haddock. As those fish mature and are caught, the 
importance of rebuilding cod as rapidly as possible may become key to 
the profitability of future fisheries. A healthy ocean system has 
abundant populations of a mix of species. Such biodiversity of 
commercial species will become particularly critical as average sea 
temperatures rise and increased stresses are placed on fish species.
---------------------------------------------------------------------------
    3. Increased funding for data collection (fisheries-dependent and 
independent data) and analysis that could increase the accuracy of 
stock assessments and give New England fishermen the benefit of higher 
annual catch limits associated with rebuilding stocks on a more timely 
basis, as occurred with Atlantic sea scallops. Congressional budget 
lines for these areas remain a small fraction of what is needed and 
what could be used productively and profitably. There is a widespread 
sense that such Federal investments would be more than repaid through 
higher production in commercial fisheries, certainly in the long run 
but also in the short run for many species.\19\ Funding for research 
and development for new, more efficient approaches to and for data 
collection for stock estimation is also critical and could reduce long-
term fishery costs and support regional research that could generate 
business opportunities for monitoring technologies around the 
world.\20\
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    \19\ The assessment science and data analysis at NMFS and NOAA can 
also be improved at existing funding levels. Much of that work is 
already underway and more opportunities to streamline, re-prioritize, 
and re-conceptualize fisheries analyses are being advanced within and 
without the agencies every day. As far as we are aware, U.S. fisheries 
science is already a match for any government system in the world.
    \20\ As just one example, laboratories at Northeastern University 
and Massachusetts Institute of Technology have created an acoustical 
sensing approach that can quantify the population of Atlantic herring 
within 10,000 square kilometers of the device. The researchers compare 
their approach to ``looking at a whole movie'' as contrasted with 
current survey methods that they liken to looking a single pixel on a 
screen. They have no funding to complete their work in the Gulf of 
Maine. Herring harvests, for example, could potentially be set at 
significantly different levels and managed in real-time if data 
collection to support that were available.
---------------------------------------------------------------------------
    4. Congress needs to recognize the critical importance of continued 
Federal financial support for the monitoring program currently in place 
for the groundfishery. Funding for this monitoring program is currently 
scheduled to be shifted onto groundfishermen at the start of the May 1, 
2012 fishing season, which is right around the corner. More time is 
necessary for New England to refine effective, lower-cost monitoring 
programs (including electronic monitoring programs currently at a 
proof-of-concept phase in the region) before the Federal Government 
curtails this monitoring support.
    5. Congress should continue to support and fund permit banks, 
revolving loan funds, and other innovative social programs--including 
limits on such programs--as those programs are being developed in the 
region at a local or state level. These programs can be used to 
accomplish important social objectives, such as ensuring that there is 
a diversity of fishing operations in a state or creating a state-level 
``new entrants'' program that would allow young people to gain 
experience and history in the groundfish fishery without having to 
mortgage their families and their futures by having to buy permits.
    6. Conflicts of interest and data confidentiality requirements 
continue to be significant issues in the region, particularly with 
respect to public transparency but also for purposes of internal 
management analyses outside of NMFS. Given the fact that these 
activities occur with a public resource, Congress may want to revisit 
these issues in the next reauthorization to ensure that the national 
interests and the public's right to know are being served under the 
existing, highly-protective regime.

VI. Conclusion
    Amendment 16 is the result of a three-year process; there are over 
55,000 pages in the administrative record for the amendment. If there 
are any legal defects with Amendment 16, they will be identified and 
resolved by the First Circuit Court of Appeals, where the legal 
challenges of Amendment 16 by some of the commercial fishing interests 
are currently being processed for decision. With respect to the 
management policies underlying Amendment 16, those are the New England 
Fishery Management Council's policy decisions, including the shift to 
hard quotas and the decision to make hard-quota-based sectors available 
widely to the region's fishermen. These decisions were the product of 
extensive and sustained public debate and untold hours of analysis. 
Congress should be careful to harmonize its actions with the regional 
management decisions relating to this complex fishery. No one claims 
that Amendment 16 is perfect. We also acknowledge that Amendment 16 may 
well have impacted some of the region's best fishermen. However, for 
most fishermen, including all but one of the designated representatives 
of the fishing industry on the New England Council, Amendment 16 is 
working as designed. This system needs to be given a chance to show its 
promise.
    On behalf of the Pew Environment Group and Conservation Law 
Foundation, we want to thank Chairman Kerry and the members of the 
Committee for this opportunity to provide a statement on this important 
subject.
                                               Peter Baker,
                             Director, Northeast Fisheries Program,
                       Pew Environment Group/The Pew Charitable Trusts.

                                             Peter Shelley,
                                                    Senior Counsel,
                                           Conservation Law Foundation.
                                 ______
                                 
         Prepared Statement of Maggie Raymond on Behalf of the 
                     Associated Fisheries of Maine
    Senator Kerry, members of the Committee, thank you for taking the 
time to read this statement by the Associated Fisheries of Maine on the 
subject of the current state of the Massachusetts groundfish industry.
    Associated Fisheries of Maine is a trade association of fishing and 
fishing dependent businesses. Our membership includes harvesters and 
processors who land and process fish in the Commonwealth of 
Massachusetts. Our harvester members land over 19 million pounds of 
groundfish and monkfish annually in the ports of Gloucester, Boston, 
and New Bedford.
    In the 2010 fishing year, New England fishermen and fisheries 
managers faced mandates of the Magnuson Stevens Fishery Conservation 
and Management Act to set annual catch limits and accountability 
measures, to immediately end overfishing, and to reduce fishing 
mortality by

   50 percent on Georges Bank cod

   46 percent on witch flounder

   39 percent on Southern New England yellowtail

   37 percent on Gulf of Maine cod, and

   34 percent on Gulf of Maine yellowtail

    Amendment 16 imposed the required reductions in fishing mortality, 
along with annual catch limits, with the result of low catch limits for 
all groundfish fishermen. These low catch limits have negatively 
impacted the ability of fishermen to achieve profitability in their 
harvesting businesses.
    Additionally, overcapacity in the New England groundfish fleet has 
been a recognized problem for decades, has contributed to overfishing, 
and has challenged the efforts by fisheries managers to reduce fishing 
mortality as required by law. Fisheries managers have recognized the 
need for consolidation to address overcapacity and have made several 
attempts to encourage consolidation of the groundfish fleet, including 
a recent letter to the Secretary of Commerce communicating the need for 
a buyout.
    Amendment 16 has dealt another economic blow to New England fishing 
and fishing dependent businesses. There is also evidence that Amendment 
16 has ended overfishing and dramatically reduced discards of valuable 
groundfish, achieving important objectives of the Magnuson Stevens 
Fishery Conservation and Management Act and the New England groundfish 
management plan.
    In January 2011, the New England Fishery Management Council 
(Council) submitted Framework Adjustment 45 which, among other things, 
attempted to reverse the onerous requirement for the groundfish 
industry to pay for at-sea monitoring in 2012.
    Unfortunately, NOAA disapproved this recommendation by the Council.
    This week, again recognizing the significant financial burden of 
at-sea monitoring costs, the Council initiated a regulatory action to 
make changes to the requirement for the industry to pay for at-sea 
monitoring. We are not confident that this action can or will be 
approved before the industry is handed a monitoring bill that it cannot 
pay.
    The Associated Fisheries of Maine appreciates the continued 
interest you and all of our
    New England Senators have paid to the economic difficulties being 
experienced by fishermen. You have penned several letters to NOAA 
Assistant Administrator Schwaab expressing concerns about the 
significant cost of monitoring that the industry is expected to 
shoulder and the need for regulatory flexibility to allow fishermen to 
access healthy groundfish stocks. These are precisely the issues that 
require your continued advocacy on our behalf.
    We urge you to focus your attention on finding solutions to these 
problems, especially by assuring that NOAA's budget includes the 
funding necessary to adequately monitor the groundfish management 
program.

                                  
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