New England Fishery Management Council 50 WATER STREET | NEWBURYPORT, MASSACHUSETTS 01950 | PHONE 978 465 0492 | FAX 978 465 3116 John Pappalardo, Chairman | Paul J. Howard, Executive Director

MEETING NOTICE SCALLOP COMMITTEE MEETING (TWO DAYS)

Date: Wednesday, September 10, 2008 and Thursday, September 11, 2008 Time: 9:00 a.m. – Wednesday, September 10, 2008 8:30 a.m. – Thursday, September 11, 2008

Location: Hotel Providence 311 Westminster Street Providence, RI 02903 Phone: (401) 861-8000; Fax: (401) 861-8002 Agenda: • Review Section 7 Endangered Species Act Consultation for the Scallop FMP (Biological

Opinion) and develop potential management measures to comply with findings of biological opinion

• Review input from Scallop Advisory Panel on development of Amendment 15 alternatives to date

• Discuss additional measures for consideration in Amendment 15. The primary management topics include: implementation of annual catch limits (ACLs); measures to rationalize the limited access scallop fishery; revision of the overfishing definition; modifications to specific aspects of the general category limited entry program implemented by Amendment 11; measures to address EFH closed areas in the Scallop FMP if the EFH Omnibus Amendment is delayed; alternatives to improve the research set-aside program; and modifying the start date of the scallop fishing year.

• Other Business Directions: From the North or South - Take Exit 22A Downtown – Memorial Boulevard. Drive straight on Memorial Boulevard through four traffic lights. At the 5th traffic light, turn right on Westminister Street. Follow Westminister Street to the corner of Mathewson Street. Turn right on Mathewson Street for valet parking.

This meeting is physically accessible to people with disabilities.

The above schedule is subject to change. If you have questions, please call the Council office for final confirmation of meeting times, dates and locations.

TA# 08-120 cc: Scallop Interested Parties, Advisors and PDT Notice Date: August 15, 2008

Scallop Oversight Committee Meeting Hotel Providence - Providence, RI

Wednesday and Thursday, September 10-11, 2008 SCALLOP COMMITTEE MEMBERS

NEFMC Members MAFMC Members David Simpson, Chair Dennis Spitsbergen, Vice-Chair Rodney Avila Richard Robins Rip Cunningham Sally McGee Dana Rice Jim Salisbury AGENDA DAY 1 September 10 9:00 am Welcome and Introductions

9:15 Review meeting materials and update of recent meetings 9:45 Summary of 2008 ESA Section 7 Consultation for Scallop FMP (Turtle Biological

Opinion) (Lynn Lankshear – NMFS NERO Protected Resources) 10:30 Discuss potential Council response to turtle biological opinion 12:00 pm Lunch break 1:00 Review Amendment 15 Purpose and Need and Goals and Objectives 1:30 Presentation of overfishing definition alternatives (Dvora Hart – NEFSC)

Discuss alternatives for Issue #3 (overfishing definition) 3:00 Presentation and discussion of fishing year alternative – Issue #7 DAY 2 September 11 8:30am Consider input from Scallop Advisory Panel on A15 alternatives

• Issue #2: Address excess capacity in the limited access fishery • Issue #4: Specific adjustments to the general category limited access program • Issue #6: Adjustments to the research set-aside program (RSA) • Other issues raised by the Advisory Panel

12:00pm Lunch Break 1:00 Consider fishing power adjustment alternatives for stacking and leasing

(Demet Haksever - NEFMC) 2:00 Discuss potential framework for ACL’s and AMs in the Scallop FMP

(if time permits) 4:00 Other Business

MEETING MATERIALS

1. Updated timeline for A15 and FW21 2. Amendment 15 DEIS to date 3. PDT meeting summary (August 14) 4. Advisory Panel meeting summary (August 20) 5. Letter from Pat Kurkul regarding turtle biological opinion – August 1, 2008 6. PDT memo regarding turtle biological opinion 7. Draft “fishing power adjustment” alternatives

To be handed out: Presentation on turtle biological opinion Presentation on overfishing definition Presentation on fishing year

A15 – compliance with new requirements of the MSA (ACL’s / AM’s), rationalization of the limited access scallop fishery, revisions to the scallop overfishing definition, specific adjustments to the general category program, EFH areas if Phase II is delayed, adjustments to the research set-aside program, and changing the scallop fishing year.

FW21 – specifications for FY2010, adjustments to the observer program, and measure to comply with the turtle biop Two timelines for A15 presented – may be necessary to spend more time on A15 development primarily because resources spent on how best to comply with turtle biological opinion over summer rather than A15 development

A15- original A15-longer ETA / DEL Biomass Review FW21

Jan Develop scoping doc Develop scoping doc

Feb Council approve scoping doc

Council approve scoping doc

Mar NOI for scoping NOI for scoping Apr Scoping Hearings Scoping Hearings May June July Aug Sept PDT review

Oct Develop alternatives Council review (8/7)

Nov Council approve doc for analysis

2008

Dec Notice if necessary Jan Develop alternatives

Feb Council approve doc for analysis Initiate action - 2/10

Mar Apr Prepare DEIS and PH doc May ID pref. alts June Council selects pref July Staff submits DSEIS Prepare DEIS and PH doc Aug ID pref. alts Develop alts Sept Council selects pref Final action - 9/22 Oct Staff submits DSEIS Staff submits FW21 Nov NMFS publish NOA

2009

Dec Public hearings Jan Feb

Consider input - ID pref alts NMFS publish NOA

Mar Council Final action Public hearings IMPLEMENTATION Apr May Consider input - ID pref alts June Staff submits DSEIS Final action July Aug Sept Staff submits DSEIS Oct Nov

2010

Dec Jan Feb Mar IMPLEMENTATION IMPLEMENTATION Apr

2011

May

Scallop PDT Meeting

August 14, 2008 Falmouth, MA

PDT members in attendance: Erin Kupcha, Dvora Hart, Pete Christopher, Jim St. Cyr, Lynn Lankshear, Kevin Kelly, Sarah Pautzke, Deirdre Boelke, Cate O’Keefe, Demet Haksever, Bill DuPaul, Kimberly Murray, Rula Deisher, Julie Olsen. About 20 audience members were present. Meeting agenda included: summaries from scallop surveys conducted this year, analyses related to turtle biological opinion, and review of potential fishing power adjustment alternatives. The PDT delayed discussion of ACL alternatives until a future meeting. SCALLOP SURVEY SUMMARIES: Four PDT members participated in scallop surveys this summer and one member described survey results from the GOM Fall 2007 survey. Each member was requested to provide initial feedback and impressions to the PDT, recognizing that final results are not available yet. The PDT is going to meet again later this fall to integrate all available survey data. If time permits, the PDT will work on updated biomass estimates for all areas, but the primary need this year is to assess if biomass has decreased in Elephant Trunk and Delmarva based on a required provision from Framework 19 to review biomass in these two specific areas.

• William DuPaul – VIMS survey Dr. DuPaul and his research team completed surveys in CAII at end of July and in Delmarva during the first week of August. Their permit to be exempt from turtle chains did not come through before the start of the survey; therefore, turtle chains were used in the southern part of CAII, but not the northern area. Overall, Dr. DuPaul reported that CAII is “fine,” and there is no reason to suspect that the 18,000 lb allocation needs to be changed for 2009. He reported a fair amount of seed in deeper waters in the southern part of CAII, but the area will probably only support one trip opening due to yellowtail flounder bycatch. Dr. DuPaul noted that large YT were caught on this survey; not a great quantity, but many were over 40 cm. He noted that this could be a serious issue with a weight-based bycatch TAC. He and his team are planning to plot where YT were caught compared to scallop catch. Lastly, they did not see starfish in great numbers like previous years, so predation does not seem to be a concern in this area. The team completed 100 survey stations in Delmarva, all shallow of 50 fathoms. Overall, he reported that the area is not as prolific as the Elephant Trunk, but is doing alright. Dr. DuPaul is not convinced that the area can support two trips in 2010. The northern area looks like it was fished hard before it was closed and there is evidence of fishing or natural mortality due the large number of clappers found at particular locations in the north; this area may not be in the rotation schedule as long as people would like. However, there seems to be three year classes; one class that is currently 65-70 mm will be harvestable in 2009. Further, we will not be looking at an extended period of large quantities of scallops. The team did spot many turtles on the surface; however, none were caught by the survey dredge, which did not have chains.

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• Erin Kupcha – NMFS Observer Program Ms. Kupcha was on the first leg of the scallop survey. She shared several photos of the research vessel Sharp that will be conducting the federal survey for the foreseeable future. The survey started off Hatteras and went into DMV, Hudson Canyon, and most of the Mid-Atlantic. Of note were many small scallops in HC and just north in the tower area (~ 1 yr old). Many turtles were seen at the surface during this survey as well.

• Dvora Hart - NEFSC Dr. Hart was on the second leg of the scallop survey that completed a few stations in the Mid-Atlantic as well as all the GB stations. Particularly in HC, there is evidence of recruitment. In addition, there is evidence of above average recruitment on Georges Bank, closer to 2000 and 2001 levels. South of CAII and in the northern area of CAII there are very big scallops and also many small ones. Lots of seed was also seen in the Channel. Dr. Hart recommended that the PDT should keep two areas in mind for FW21 in terms of potential areas for rotation: north of HC and parts of the Channel. The data from both legs should be audited by the end of August and available September 1. The Albatross data should also be available at that time too. The PDT will focus first on updating biomass estimates for Delmarva and ETA, then other areas. The Center also has to work up data on calibration between the Albatross and the Sharp so the data sets can be compatible.

• Cate O’Keefe – SMAST Ms. O’Keefe reported on several surveys conducted by SMAST. From the broad-scale 3 NM survey they saw similar seeding in CAII and the HAPC, but a decline in larger scallops in the non-access portions of CAII and NL. They also saw scallop seed in the southern part of the CAI access area, DMV, the tower area, and the Great South Channel. Overall, the Mid-Atlantic estimated biomass has gone up, with ETA coming down slightly compared to SMAST results from 2007. On the finer 1.5 NM scale, biomass in the access portion of Nantucket Lightship seems fairly steady compared to last year. In the non-access part of NLS, there is a decline similar to the northern part of CAII – the larger scallops are pretty much gone (Note: Federal dredge survey did not seem the same trend and it was raised that some large scallops get “junked-up” with growth so may be difficult to identify via camera). Ms. O’Keefe also reported that their YT flounder tagging study in the closed portion of CAII revealed a large quantity of large YT. In addition, a habitat survey in the middle of Georges Bank revealed that the area is mostly sand with lots of sand dollars.

• Kevin Kelly – ME DMR ME DMR performed a state survey in November 2007 prior to their seasonal opening (Dec 1). Cobscook Bay was surveyed over ~85 stations. In 2006 the survey saw a large number of scallops that were not quite exploitable with 3.5-4” gear. While there are gear and possession limits in this area, it was probably growth overfished. About 90-100 boats fished in mid-December. This fall, ME DMR will be surveying the eastern portion of Maine, excluding Cobscook Bay. However, fishermen are reporting signs of seed in Cobscook Bay.

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DOCUMENT 1 – COMMITTEE MEETING SUMMARY Ms. Boelke described the different meeting materials. Document #1 was a meeting summary from the last Scallop Committee meeting (July 8). She highlighted parts of the discussion that covered new ideas for A15 alternatives. Related to RSAs, the Committee added an alternative that would include a list of items that research trips would be exempt from, such as crew size. In terms of measures to reduce capacity in the LA fishery, a new alternative to eliminate open area DAS was discussed. One question remains if this alternative qualifies as an IFQ or not. The Committee included several new general category alternatives and will meet on September 10/11 to continue development of other alternatives. DOCUMENT 2 – LETTER FROM PAT KURKUL ABOUT THE TURTLE BIOP Ms. Kurkul responded to the questions from the last PDT meeting and addressed some of the PDT’s turtle BiOp concerns. The PDT discussed this document in detail. DOCUMENT 3 – DRAFT MEMO FROM PDT TO COMMITTEE REGARDING TURTLE BIOP Document 3 contains a brief summary of the turtle BiOp, a summary of previous turtle BiOps for the scallop fishery, a summary from the last PDT meeting including major technical concerns and questions, and potential alternatives to consider. A few PDT members raised additional questions before the morning break. It was pointed out that the BiOp concludes that there are more confirmed takes in trawl gear type over dredge gear. It was asked if the PDT needs to consider a differential reduction by gear type and also what the next step should be if there is a gear shift. It was also pointed out that currently the BiOp does not suggest that different measures for different gears would be necessary and the required provisions are specific to limited access vessels so any increase in trawl effort by general category vessels would not need to be considered in this context. After a brief break, Ms. Boelke summarized the results of the “footprint” analysis. VMS and VTR data were pulled for 2004-2007 for any scallop trips that spent some time in the mid Atlantic at <= 5 knots. The goal of the exercise is to describe the level of effort that took place during this baseline so measures that limit effort in the Mid-Atlantic during the summer and fall can be identified. It was discussed that for the framework, total allocated open area DAS for 2008 and 2009 are needed from Mr. Pete Christopher and estimates of allocation for 2010 and 2011 are needed from Dr. Hart. The PDT discussed the implications of these analyses for some time. Due primarily to time constraints, the turtle BiOp developed the first RPM and Term and Condition based on “allocated” effort. However, the PDT discussed that in order to minimize impacts on turtles, assessing where effort actually took place is essential. This is exacerbated by the fact that the scallop fishery is managed under area rotation, so vessels are constrained to fish in certain areas and times, and each year varies greatly. For example, in 2006 no access area trips were allocated in the Mid-Atlantic and in 2007, three trips were allocated. In addition, there was a seasonal closure in ETA in 2007 such that no access area trips could take place during September and October, and access area trips on Georges Bank are restricted by a seasonal closure for YT spawning and do not open until June 15 each fishing year. The PDT discussed these issues in

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detail as they discussed how to comply with the effort-limit restrictions in the BiOp for open area DAS used and access area trips taken during the summer and fall in the Mid-Atlantic. Open Areas Overall, from 2004-2007, an average of about 19,000 open area DAS were allocated to the limited access fishery (46 per individual FT vessel). On average, about 15,700 DAS were used in open areas for this same time period. For trips that spent any time in the Mid-Atlantic, the average DAS used for the time period was 8,250 (3,505 during June-Oct and 5,353 for May-Nov). On average 42% of MA open area DAS were used during J-O and about 63% from M-N. If the BiOp requires a 50% reduction from average DAS used from J-O, that equals 1,753 DAS; a 30% reduction for the longer time frame (M-N) would be a total of 3,747 DAS used. In 2010, total open area DAS is estimated to be about 8,000 DAS (7,000 expected to be used in MA and 1,000 in GB). If the same usage percentages are applied (42% of MA DAS used during Jun-Oct and 63% during May-Nov) the expected DAS used for both scenarios in 2010 would be 2,940 MA DAS in J-O (42% of 7,000) and 4,410 MA DAS in M-N (63% of 7,000). Both these values are greater than the values generated from 50% or 30% less DAS used during the baseline years, 1,753 DAS and 3,747 DAS respectively. Originally the PDT did not think that open area DAS would need to be adjusted because much fewer DAS are being allocated in the fishery compared to years during the baseline (8,000 in 2010 compared to average of 15,700 from 2004-2007). But because the majority of open area DAS in 2010 are expected to be fished in the Mid-Atlantic, then other provisions may need to be considered. However, the PDT does not believe that comparing future effort to a specific baseline period is very useful in this case since the scallop fishery is managed under area rotation and fishing effort patterns vary from year to year, area, and season because of how the effort is allocated. The PDT did have a long discussion about what is “minor” and “major” and the Committee will need to discuss further whether measures that restrict DAS usage during certain times of year are more than a minor change as stipulated under ESA. Access Areas An average of 5.5 access area trips were allocated each year for the 2004-2007 baseline period; an average of 2.5 in the Mid-Atlantic and 3 in GB. However, it is very important to note that each year varied significantly in terms of where access area trips were allocated and where new access areas were closed. In 2010, the PDT projects that 7 access area trips will be taken; 3 in ET, 2 in Delmarva and 1 on GB. Five access areas is greater than the average of 2.5 MA trips by 50%. The number of access area trips taken were analyzed by summarizing the count of trips by access area code using VMS data. For example, about 900 trips were taken in ET during the baseline period (100 during shorter season June-Oct and 270 from M-N). About 921 non-compensation trips were taken in Hudson Canyon (478 from June-Oct and 702 from May-Nov). Therefore, for the ET area that was closed for most of the baseline (2004-2006) but opened in 2007, most trips were taken outside of the window when turtles are expected to be present (100 out of 900 trips). Assuming 300 vessels got 3 trips each in 2007, which equals 900 trips, this results in 11% taken during June-Oct and 30% during May-Nov. If that area is allocated 3 trips in 2010, and we have to reduce the number of trips taken by 50% (J-O) or 30% (M-N) based on the average from the

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baseline, then only 50 vessels would be permitted to take a trip from J-O or 80 vessels from M-N. Both of these scenarios are less than 325 – the equivalent of a one trip allocation per limited access vessel. Therefore, a restriction would have to be placed on the fishery that would restrict when access area trips could be taken to ensure that no more than 50 or 80 trips are taken within the respective J-O and M-N timeframes. However, it is not likely that the same number of trips will be taken during these windows of time in 2010 compared to 2007. In 2007, many vessels were anxious to get into that area because it was closed for three years, so there was substantial effort when the area opened in March. In 2007, 2 access areas were allocated on GB and vessels shifted to GB in the summer to get their trips in before the YT bycatch TAC was reached. Only one trip is expected on GB in 2010. The seasonal closure for September and October could remain in 2010; FW21 will have to consider that. The results for Hudson Canyon are different. There was no seasonal closure for that area. About 50% of the trips taken in HC were during J-O and about 76% during M-N. Therefore, reducing trips for that area during the summer and fall could be more workable because more effort was taken during that time period; however, that area is closed in 2010. How does that area changing from an access area with concentrated effort during the baseline period to a closed area with no scallop effort get factored in the BiOp? As written, it doesn’t. A lot of when access areas are fished in the MA is influenced by what areas are open on GB; in years with GB openings, access area effort will shift to GB in the summer after the areas open on June 15. But in years with less GB effort available like in 2010, more effort would be expected to stay in the Mid-Atlantic during the times before surface temperatures are high, meat weight relationships are greater and weather is better. These are just some of the issues the PDT discussed in terms of why it is complex to comply with the terms and conditions as written. After revisiting the end of agency’s recent memo, it was noted that on page 3 at bottom, there is an invitation to the Council about what to do with all the information. The second part of the paragraph directs us to conduct an analysis to determine if the first RPM is reasonable and prudent. Although the determination about whether the first RPM is reasonable and prudent is more a Council function, the PDT does have input. The PDT recognizes the need and requirement to adhere to the RPMs and minimize impacts on sea turtles, but has issue with how the first term and condition is currently drafted. The term and condition as written would allocate less than 1 trip in MA access areas, regardless of the two provided windows (May-Nov and June-Oct). The PDT agrees with the agency that this would be more than a minor change – therefore other options should be explored for a more reasonable term and condition that would minimize impacts and potentially limit effort during the summer and fall in the Mid-Atlantic. The PDT does not believe that comparing future effort to a specific baseline period is very useful in this case since the scallop fishery is managed under area rotation and fishing effort patterns vary from year to year, area, and season because of how the effort is allocated. The PDT discussed other “more reasonable” terms and conditions that could be used to implement the first RPM.

1) Use 2003-2004 used DAS data to match the baseline period used to estimate turtle takes for the scallop fishery and limit effort based on that time period

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2) Use the SAMS model approach – Summarize area swept from SAMS model and back calculate what change of DAS would be needed to reduce area swept by required amounts (50% and 30%)

3) Not focus on average DAS used from a certain baseline, but instead require the fishery to use 50% less allocated DAS in the Mid-Atlantic during that window of time, or 30% during the longer period of time

4) Try to address area rotation changes like Delmarva by summarizing data more specifically so it can be an open area for part of the baseline and an access area for another

If the Committee agrees that a different term and condition should be considered that will still comply with the first RPM but not cause more than a minor change in the fishery, the PDT can identify more specific alternatives during development of FW21. Sidebar Input As a side note, one PDT member pointed out that the charge is to minimize takes, not minimize takes from last year. Minimization is not linked to a previous number and is not compared to anything. The purpose of the baseline is to give a frame of reference, not to reduce takes compared to takes during those years. For example, if the number of allocated trips went up and we cut those in half to comply with the BiOp, that half may result in still more trips than the number of takes the BiOp is based on, i.e. if 600 takes happened over 4,000 trips and then we allocated 10,000 trips, halving 10,000 results in 5,000 trips, which is more than the 4,000 trips taken during the baseline. Thus, we’ll probably catch more turtles even though allocated effort cut in half. A discussion about what constitutes MINOR vs. MAJOR ensued. The PDT discussed that debating about what is major versus minor is not appropriate, but voiced that under area rotation a specific amount of effort is allocated to a particular area so that certain fishing mortality rates are achieved to prevent overfishing and optimize yield. If adjustments can be made so that overall F rates are still achieved but effort in the Mid-Atlantic during the summer and fall can be limited, the Council should focus on that. One PDT member voiced that in the MSA process, the Council can take an action that is major, not in order to comply with the BiOp under ESA, but for other Magnuson requirements to minimize impacts on bycatch. For example, the Council could close the mid Atlantic for a year. This would obviously meet the requirements of the BiOp and the Council could consider that under Magnuson. It was discussed that getting rid of the baseline may be the best thing to do, but there was concern that doing so would require a new incidental take statement. One PDT member responded that if the Council uses new measures in FW21 to replace the current RPM, then Protected Resources would be consulting on FW21 after it is submitted DOCUMENT #4 – FISHING POWER ADJUSTMENT ALTERNATIVES FOR A15 Dr. Demet Haksever summarized a document that assessed several fishing power adjustment alternatives based on vessel characteristics for permit stacking and leasing alternatives. There is a concern that if DAS are transferred from a vessel that has a lower fishing power to a vessel that has a higher fishing power with no adjustment, the capacity and fishing mortality in the fishery

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could increase. The first step was to determine factors that impact fishing power. A similar analysis was done over 10 yrs ago when the Council first considered consolidation. One of the main determinants of fishing power is horsepower (HP). Vessel characteristics and catch per DAS data was summarized back to 1994. Table 1 showed how landings per day-at-sea (LPUE) for vessels was not very different between 1994 and 1999, with the exception that vessels with more than 1000 horse power had a higher LPUE compared to vessels with lower HP. After 1999 when scallop abundances increased, the differences in the LPUE of vessels in different HP groups also increased. Table 2 and 3 show the ratios of LPUEs vary between vessel groups. For example, in 2004 highest HP group had an LPUE 39% higher than LPUE of smallest HP group. Horse power seems to be an important factor and a proxy variable for vessel’s capacity to fish in various conditions, larger holding and freezing capacity and highly skillful crews among other factors that overall affect the fishing power of a vessel. The take-home message is that if DAS are transferred from a smaller vessel (with a lower HP) to a larger vessel (with a larger HP), there will be an increase in fishing power and thus in fishing mortality. Table 6 and 7 show what happens if we want to adjust DAS based on 2006 data; Table 6 gives the adjustment factors and Table 7 shows the DAS adjustment factor for 100 DAS transferred from 1 vessel to another. The end result of the example is that if 100 DAS are transferred from one vessel at <600 HP to a vessel with >=1000 HP, the bigger vessel should be adjusted to have 72 DAS rather than 100 DAS to keep fishing power neutral. This document also includes results from a technical production model to measures the impacts of various factors, not only HP, that affect annual pounds landed by a vessel. The factors include: annual DAS used, HP, GRT, crew size, fishable abundance, dredge size, number of dredges, ring size, and percentage of landings from access areas. This type of model can be used to derive adjustment factors and for assessing economic impacts of adjustment factors. Dr. Haksever explained that this model provided a very good fit of the data. One suggestion was to drop gross tonnage to make the model less complicated. This is a static model that does not tell us what will happen next year. Table 10 demonstrated that 2006 data would result in adjustment factors for various HP groups after taking into account the impacts of the main factors that determine relative LPUE’s of vessels. As a result, if 100 DAS are transferred from one vessel at <600 HP to a vessel with >=1000 HP, the bigger vessel should be adjusted to have 78 DAS (compared to 72 days before) rather than 100 DAS to keep fishing power neutral. Table 12 shows a scenario analysis w/DAS using the conditions that existed in 2006 fishing year. It included DAS used, # FT boats, HP, and other factors. The model was used to estimate landings based on the number of boats and DAS used. It came close to the poundage actually landed in 2006. If smaller vessels transferred DAS to the next higher HP, there would be a 6.3% increase in landings. After applying the adjustment factor, landings would go down by 0.69% from the original 2006 poundage. Dr. Haksever said that she also analyzed what will happen to total profits with consolidation, but will not be presenting economic impacts. Table 14 shows another example of consolidation. In this example, 240 fulltime dredges were reduced to 129 dredges and demonstrated that landings will go up by about 7.6% if not adjusted.

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It was also suggested that we could also do a “transfer tax”, such that if you buy or lease you only get 90% of what you are asking for. The dynamics of the fishing industry is changing – people are buying smaller vessels because they are more fuel efficient. Crews now want to fish smaller vessels because they get just as much money. A question was raised about how we can quantify the quality of the crews. The PDT suggested that several “tax” alternatives be presented to the advisors as an additional alternative; they are more straight forward, but may not be as fair because similar vessels could be affected the same as permits from vessels with very different HP for example.

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Scallop AP Meeting

August 20, 2008 Warwick, RI

AP members in attendance: Gib Brogan, Ronny Enoksen, Jim Fletcher (on phone), Jim Gutowski, Gary Hatch, Peter Hughes (non-voting, sitting in for Danny Cohen), Bob Keese, Kirk Larson, Bob Maxwell, Mike Marchetti, Ray Starvish, Richard Taylor, Bill Wells Jr. (Chair) NEFMC Staff: Deirdre Boelke, Sarah Pautzke, Demet Haksever About 20 audience members were present, including people from industry, SMAST, VIMS, EDF, and GMRI. Ms. Boelke informed the audience and AP members that the AP members for 2008-2010 were just selected that represent limited access (LA) and limited access general category (LAGC) fishermen and a member from an NGO. She then provided a brief summary of all documents pertinent to this meeting, including a summary of all verbal and written scoping input, a summary of the Scallop Committee meeting, Amendment 15 DSEIS to date, a description of potential fishing power adjustment alternatives for permit stacking and DAS leasing, and a summary of the recent turtle biological opinion (BiOp). The goal of this meeting is to review A15 alternatives developed to date and provide input to the Committee on three of the seven issues under consideration. The panel also briefly discussed the turtle biological opinion since the Committee is scheduled to review it in September. TURTLE BiOp DISCUSSION Staff summarized the conclusions of the recent biological opinion as well as PDT input. The PDT is concerned about data from 2005-2007. NMFS did not feel that they could use data from when after turtle chains were implemented. The PDT feels that because 2005 data was not used, which showed zero turtle takes, that the estimate is biased high. Overall, the PDT is concerned with how the terms and conditions are drafted for the first RPM. The PDT believes that, as drafted, they would cause more than a minor change to the fishery. The PDT does not believe the baseline structure utilized by NMFS for the terms and conditions is appropriate under area rotation. A question was raised about whether the BiOp examined whether there is a correlation between dredge size and turtle takes. Staff did not believe that the BiOp discussed it, nor was data described in the BiOp broken down by dredge size. It was mentioned that the fact that no turtles have been seen in 10’ dredges may have to do with where those particular sized dredges are used. A member of the audience voiced that changes in the turtle population or migration patterns must be going on because takes never used to occur. He suggested that turtle populations have increased so interactions have increased, and decreased again since the use of turtle chains. Another speaker suggested that the BiOp is a “worse case scenario” estimate of takes to determine if there is jeopardy. He recommended that the PDT could develop a “realistic” estimate of takes which could incorporate other management measures that are not

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used in the BiOp (area swept, turtle chains, etc.) His advice was to identify management measures to minimize impacts based on that estimate. Overall, the advisors agreed not to discuss the BiOp in great detail, but felt strongly that as a group some input should be provided to the Committee for their meeting in September. Ultimately, a statement was approved – 11 in support and 2 not in support. Two advisors did not agree with the statement. One voiced that some measures specified in the statement could be beneficial, but they have to be considered in perspective. For example, turtle chains may have merit, but their effectiveness is not agreed on and has not been tested yet. They probably do reduce turtle bycatch – but a take is any interaction – so takes in the water are still a concern. Limiting effort does not have to be the only approach; he suggested hard limits on turtle takes or smaller closure areas for turtles. He argued that NMFS needs to clarify what the BiOp is trying to achieve and not leave so much open for interpretation. Another speaker felt that the statement by the AP does not recognize that the BiOp does not stand alone. It is just another way to further box the fishery in. He voiced that every year there are more time and area restrictions such as finfish bycatch and EFH and this issue is just another one that is crippling the effectiveness of area rotation. AP Statement (Jim Gutowski; 11:2): The AP is strongly opposed to the limiting scallop fishery during the summer when scallop yields are high, traditional markets are in place, and fishing conditions are safe. NMFS needs to recognize and credit the industry for measures that are already in place, including rotational management, reduced bottom time, RSA funded research, turtle chains, and overall effort reductions in both the limited access and general category fisheries. The AP recognizes that the PDT is struggling with this issue too, and the AP would like to continue working through the process to arrive at a sensible solution. AMENDMENT 15 DEIS To date the Committee has only focused on three topics for Amendment 15: LA rationalization, LAGC measures, and improvements to the research set-aside program. Therefore, the AP considered these topics in detail and will have the opportunity to discuss the other issues under consideration at future meetings. ISSUE #2: LA Rationalization (Section 3.3)

• Permit Stacking (3.3.2) One advisor commented that there is excess capacity in the fishery because at current allocations there are not enough DAS available per vessel to keep vessels busy all year. Another advisor seeked clarification about the difference between stacking and leasing; stacking is permanent, whereas leasing is on an annual basis. Staff explained that currently there is one alternative that restricts stacking to two permits and another alternative that is unlimited. A member of the audience suggested that the alternative that restricts stacking to two permits should be expanded. He believes that fishing power adjustment alternatives can be complex, so if more limits are put on which permits can stack and which can not, then adjustment alternatives are not as necessary. He suggested that the alternative that restricts stacking to two permits be expanded into three options: 1) two permits would have to be from vessels within the same vessel baseline (10:10:20

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for HP:LEN:GRT); 2) two permits would have to be from the same permit category (FT, PT, OCC) but would not necessarily have to be within the same vessel baseline, and 3) two permits of unlike permit category and unlike baseline could be considered as well. The advisors agreed with this suggestion and recommend that the Committee expand the “stacking of two permit alternative” to have three different options. Another member of the audience discussed the sideboard alternative under stacking. It was suggested that a placeholder be added to A15 in case A16 to the Multispecies FMP allows a vessel to have both scallop and multispecies permits. It is still unclear how these vessels would be permitted to use scallop and multispecies allocations; a change may have to be made to the scallop FMP as well as a result of A16. Lastly, an advisor asked if all permits have to be stacked under these alternatives – i.e., would the other vessel be left with nothing because all permits have to be transferred? The advisors suggest that the Committee clarify what happens to other permits, such as monkfish. Currently the advisors assumed that all permits would be transferred because NMFS prevents breaking apart limited access permits, but the Committee should clarify.

• Fishing Power Adjustments (3.3.2.3) The document currently has three alternatives for fishing power adjustments: Option 1: based on horsepower; Option 2: based on gear and wheel size; and Option 3: a “tax” that would be charged when any permit is stacked, regardless if within the same permit category or vessel baseline. One advisor originally suggested that an option based on gear and wheel size would be a more accurate measure of fishing power, but that advisor was not present at the meeting and the other advisors did not believe this option was worth developing further because horsepower is sufficient and NMFS does not keep track of information on gear and wheel size. By consensus the advisors recommend that the Committee remove Option 2. The alternative based on gear and wheel size should be removed from consideration. One advisor suggested that fishing power adjustments may only be necessary for open area DAS, since all permits are under a possession limit in access areas. Since catch is already restricted per trip in access areas, if a trip is moved to another vessel the total pounds removed is the same regardless of horsepower differences. One person argued against all power adjustments, asserting that horsepower is safety-related and should be “hands off” because there are other management restraints. In general, when these adjustments were termed as a “tax” most were against the idea. On the other hand, most speakers agreed that capacity should not increase as a result of stacking and so some adjustment may be necessary to prevent permits from 400 HP vessels being stacked onto 1500 HP vessels.

• Sideboard for bycatch (3.3.2.5) This alternative needs more development. An audience member questioned whether there has been any consideration allowing the stacking of a groundfish permit with respect to sideboards. The GF Amendment 16 has not really discussed if a GF permit could be used a different way, i.e. as a bycatch permit for the scallop fishery. It was pointed out that GF bycatch will impact the scallop fishery even more in the upcoming years and there is nothing in A15 to address that. However, the speaker was unclear whether both the SC and GF plans would need to be amended

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to allow a different approach to managing groundfish bycatch in the scallop fishery. One audience member explained that after A16 every GF permit will know exactly how many pounds of each species their permit gets on an annual basis. The question was whether someone with a GF permit could lease their allocation; for example, yellowtail flounder to a scallop vessel to use on a scallop trip. This general idea came up during development of FW19 as well. It was asked whether individual boat owners would then have the ability to obtain more bycatch separate from everyone else. An option offered was that perhaps the quota could go to a sector instead of an individual. The only problem with that is that the Council made a conscious decision NOT to address sectors in the LA scallop fleet in A15. Several constraints were discussed: currently GF vessels can only lease to other vessels with a multispecies permit; scallop vessels are prohibited from using GF DAS on a scallop trip, GF vessels are allocated DAS not pounds (unless in a sector).

• Status of stacked permits (3.3.2.4) The advisors tried to discuss some of the questions raised under the status of stacked permits section. First, how will permits that have been stacked or leased be counted toward the 5% ownership restriction? Should that restriction be revisited? One speaker voiced that the restriction should be based on 5% of allocation, not 5% of permits because that is not likely to ever be the same (i.e. 5% of full-time permits has a much greater allocation associated with them than 5% of part-time permits). One concern that was voiced was that if we combine two permits into one, we may not actually accomplish capacity reduction, we would just increase the number of permits a person can own. This led to a discussion of whether or not stacked permits can be de-stacked. Some members of the audience felt that once permits are stacked they should not be de-stacked. One voiced that administratively, stacking is allowed for groundfish DAS for one year, with de-stacking allowed after. Thus, if our concern is administratively feasibility, stacking and de-stacking can be done. One advisor questioned that if a vessel does de-stack, whether the permit has to find an existing vessel or if it could be put on a new vessel. Another raised the question about what someone would do if they had stacked multiple permits and allocations get above what one vessel can harvest. Lastly, several speakers questioned what the real goal of these alternatives is: are we trying to reduce costs, reduce the number of boats, or reduce capacity? Generally, the AP supports the ability to de-stack permits, although some audience members do not. Most advisors are in favor of retaining the identity of stacked permits such that a vessel has multiple LA scallop permits associated with it.

• Permit Leasing (3.3.3) These leasing alternatives allow an LA vessel to lease fishing effort from another LA permit. In terms of gear categories, we have only thought in terms of full-time, part-time, and occasional vessels so far. One speaker suggested that a “gear endorsement” may need to be added. If mortality is different between gear types for example, an adjustment may need to be added for leasing between dredge and trawl gears.

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Leasing in blocks was discussed briefly. One option is to lease in blocks, such as 5 days or 10 days for administrative reasons. One speaker mentioned that groundfish fishermen do not have to lease in a minimum block size, having the ability to lease just 1 day. It was suggested that we might want to leave leasing as flexible as possible in that regards, especially if there are no administration concerns. It was then asked of the AP whether people should be able to lease in increments less than a DAS (i.e. 0.3 DAS). The AP advice to the Committee is that the AP would prefer having the ability to lease as little as a single day, rather than blocks, to improve flexibility. A question was raised about whether to establish a cap on the amount a vessel can lease. At this time, no limit has been discussed. One voiced that the ownership cap may keep that in check; however, it was pointed out that as it is currently written, the restriction is based on ownership, so leased effort is not “owned.” The Committee will have to discuss if ownership caps are needed. Currently, leasing is being considered in terms of the LA fishery only, not including the ability for LAGC vessels to lease LA DAS or access area trips. One advisor asked whether that could be considered in this action. For example, could the LA effort be leased and put into a “permit bank,” convert that effort into pounds and then allow LAGC vessels to fish that catch? The idea raised many questions, but staff agreed to bring the idea forward to the Committee. It was pointed out that the allocation currencies are different between the LAGC fishery (IFQ) and the LA fishery (DAS and access area trips). In addition, A11 allocated 5% of the catch to the LAGC fishery, so how would this alternative affect that? Would it have to be factored into the overall ACL management program? Would the catch associated with that leased effort go against a LAGC IFQ and would it be counted toward the 5% catch for the LAGC fishery? Additionally, would that LAGC vessel be allowed to operate as an LA vessel for those leased days, or would they be restricted to the 400 lb possession limit of the LAGC fishery? On the other side, it was questioned if LA vessels could lease LAGC IFQ. Based on the list of questions raised, one advisor suggested that it was probably not a good idea to discuss leasing between the LA and LAGC fisheries.

• IFQ Management (3.3.4) One advisor suggested that based on scoping many people are against IFQs at this juncture and it was recommended that this item be removed. It was also argued that discussion of IFQs would probably delay this amendment. One member pointed out that it could make it more possible to lease between the LA and LAGC fisheries if both fisheries were under an IFQ. Ultimately, the advisors did not make a recommendation based on this alternative, but most that spoke felt it would delay the amendment.

• Conversion of open area DAS to access areas (3.3.5) This alternative would create two new access areas: open area New England and open area Mid Atlantic. This would replace DAS with trips to open areas (outside of access areas). The boundaries still need to be worked out, but this promotes the idea of going away from open area DAS to trips with possession limits. One major concern with this action is whether this represents a backdoor IFQ. It was also pointed out that this system should not prohibit the identification of any new access areas outside of the areas that have been under area rotation so

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far. The reply is that it should not prohibit new access area identifications; these trips would be for any areas outside of any access areas. One speaker voiced that this would be better considered under section 3.2, which is compliance with the reauthorized MSA. One of the reasons to switch this measure to the ACL section is because this item does not address capacity; it just converts DAS to trips. One AP member said that he supported this option if it is moved to the ACL section. An AP member pointed out that this approach may not need a fishing power adjustment because it would be allocated in trips with possession limits, so permits would be limited to total catch, not time at sea, meaning capacity per vessel is not as much of an issue. However, another advisor admittedly disagreed, and voiced that capacity would increase if we go from DAS to access area trips. One major concern with switching to “open access areas” was that DAS give the fleet flexibility. If, for example, there are allocations to the mid Atlantic and Georges Bank, but fewer scallops in the mid Atlantic, fishermen will have quota they will not be able to harvest or trade due to a lack of resource availability. It was clarified that the PDT has not yet seen this idea, but generally the allocations by area would fluctuate based on available resource. If there is more resource on Georges Bank, then more trips would be allocated there. Ideally, trips would not be allocated to areas with little resource. Another issue is that these two access areas may affect the overfishing definition, but this is unclear. Legally, we do need to provide an overall F for the resource. However, area mortality limits may be affected. The AP was supportive of leaving this alternative in the amendment to be fleshed out further, but there are differences of opinion about whether to pursue this or not. Some felt it was better placed in Section 3.2 under ACLs. FISHING POWER ADJUSTMENTS After lunch staff presented a discussion paper with some analyses for potential fishing power adjustment alternatives. There are three questions that the AP considered during the discussion: 1) do you agree that fishing power is a good measure, 2) is this scenario/model a good way to describe fishing power, and 3) should we explore different examples? The document generated by Dr. Demet Haksever was referenced for this discussion and her presentation. Her calculations (model) show that, except when resource conditions are poor, horsepower makes a difference in LPUE. One of the first points made was that we should use the words “fishing power adjustment” because many folks are wary of and do not support a “tax.” Three alternatives for fishing power adjustments have been identified: 1) Look at historical data and adjust to some degree based on the historical ratios of catch rates per day (LPUEs) of the 2 vessels in a given period, 2) base the adjustment on the model estimate which takes into account the impact of various factors (HP, crew, DAS, dredge size) and provides a corrected estimate of the impact of HP on catch per day and 3) apply a straightforward percent adjustment to everyone, such as, less 10% when stacking or leasing.

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The first question asked was whether the model assumes the transfer of DAS taking place from vessels with smaller HP to boats with a larger HP. The answer is no, the model is not based on that assumption, but the scenario examples provided in the document were. Other examples, such as transferring DAS from large to small boats, can be provided with the same model. The next question was whether you would gain allocation by downgrading to a smaller HP vessel. It was suggested that allocation could be gained if that is what the Committee decides. The alternative is maintaining the allocated DAS. One AP member voiced that they are in favor of a ratio no greater than 1 so that catch does not increase (i.e. by going to a smaller boat, allocation would not increase). It was pointed out by an AP member that during the development of Amendment 7, consolidation was talked about and a similar model was generated. Dr. Haksever agreed, but pointed out that while the theory is the same, this model is more sophisticated and the data has been updated substantially. One question was asked about if we put in a HP adjustment, allow the permits to separate later, AND a small and big permit were stacked together with a 20% adjustment, if we would give back the 20% if the smaller permit were split from the larger permit and paired with another small permit. The other option suggested to counter that was to have everyone give up 5% when stacking regardless of their HP such that even people with the same HP boats get the same stacking penalty as others. In addition to that, when the permits are un-stacked, they would not be given back the 5%. The last comment is similar to the flat rate % example shown in Table 15 of the document generated by Dr. Haksever. Whether to use tonnage in the estimate was questioned by an audience member who said that boats and HP did not match well. It was suggested that if we use HP, we should not use tonnage in the estimate. An AP member agreed. By consensus, the AP recommends not using tonnage in the fishing power adjustment. Advisors would like to see the model run so that there could be stacking between permits within the same baselines (10:10:20) with no adjustment, but an adjustment would be applied if permits were from vessels of different baselines. Most who spoke were not in favor of the alternative that reduced a stacked permit allocation by a flat rate, say 5%, but they did not decide as a group whether to leave it in or take it out at this point. Other discussion related to Issue #2 Several speakers spoke in favor of the No Action alternative in terms of leasing and stacking. One person voiced concern that these measures seem like we are still treating the scallop fishery like it is in a rebuilding phase. Another argued that managers should be spending time on other issues like bycatch, EFH and turtles and how they interact with area rotation. Staff responded that this amendment was initiated in response to requests from the industry for the last several years to rationalize the scallop fishery. It may not be all industry members, but a great number of participants have requested options to improve efficiency.

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ISSUE #4: LAGC Alternatives (Section 3.4) • IFQ by Area

A LAGC AP member spoke against this measure, although he was very supportive of it during development of A11 and FW19. The concern is that allocation will be given to places some fisherman will not want to go. One other major concern is that LAGC folks would be allocated pounds per area, which may result in being allocated 500 lbs in one area. With a 400 lb possession limit, it would not be economically feasible to return to an access area for 100 pounds. Overall the potential benefits to a few vessels that would want an allocation by area would be outweighed by the cost of setting up and monitoring this type of program. By consensus, the AP agreed that this item should be removed from further development.

• Other Items related to LAGC that are not presently in A15 One issue that was raised was whether there can be a separate YT bycatch quota for the LA and LAGC fisheries in access areas instead of an overall bycatch quota. The thought is that if it were separated by fishery, then each fishery would be held responsible for their own bycatch without affecting the other fishery. This came up during FW19 development, but did not get very far because NMFS was concerned about monitoring very small quantities of bycatch. Staff pointed out that if the Council does want to revisit this alternative we can do it in FW21; it does not have to be considered in an amendment. By consensus, the advisors request that this issue be considered in FW21. It was asked if this will be dealt with in the ACL discussion, but it was argued that the GF fishery probably will not care how the scallop fishery subdivides its received ACL. The GF fishery will have sub ACLs for other fisheries, like the scallop fishery as a whole, so it would seem that the Scallop FMP would include how the sub-ACL is divided out. ISSUE #6: Research Set-aside (3.4.4) The Committee developed about a dozen different alternatives in response to input from scoping and the PDT. John Hoey (NMFS, Director of Cooperative Research) attended the AP meeting to provide input and answer questions about the RSA program from the agency perspective. The AP provided several statements of support and made a few recommendations for changes. Publication of RFP as Early as Possible (3.4.4.2) The primary comment with regards to this measure is that the RFP is not delayed by any one particular group, so it is beyond our control. Ms. Boelke responded that this alternative does not need to be in the document, but sends a message to NMFS even though we cannot do anything about it. Extending the RSA Program to Multiyear (3.4.4.3) This idea was supported by an audience member because it would ease the burden of permit applications for exemptions. He agreed that the multiyear duration of 2 years would encompass the length of a framework action, but should not go beyond it. He would support considering even a longer period of time in the future. The AP is very supportive of extending the RSA program to be multiyear (to match FW for now).

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Modifying RSA from a Percent Allocation to Pounds (3.4.4.4) We can change RSA from a percent to a fixed poundage. This means that we’d fluctuate in the percent of allocation that would go to the RSA program, but the amount of pounds available to support research would be constant. An AP member suggested that we keep the fixed amount a frameworkable item so that we could increase or decrease the poundage as the resource varies. In addition, how RSAs fit into ACLs will need to be addressed. The AP supports the idea of utilizing pounds instead of a percentage for RSA allocations because the pounds will be known in the future and this measure will help with the timing of the RFP. Further, the AP endorses using a 1 million pound RSA to start, but recommended that this amount be included as a frameworkable item. RSA TAC Separation into 2 Subsets (3.4.4.6) The AP supports that survey related RSA go towards university/industry surveys, but not to fund the NMFS federal survey. In FW19 the PDT recommended (and Committee agreed) that survey/assessment work should be elevated above other research topics. The assumption is that project proposals would respond to that, but there is no guarantee. Going this route, the hope is that more proposals will come that focus on biomass assessment of access areas. However, one AP member pointed out that bycatch avoidance topics are important too. Additional 1% RSA for Survey Work in Addition to 2% Set-Aside (3.4.4.7) AP members voiced that 1% seems pretty high and they are not in favor of this alternative. One AP member said he was fine with where we are because there is usually some RSA left over each year. However, it was pointed out that the leftover is usually the result of an RSA allocation to an area that, in the end, does not receive any proposals. Although not supporting the measure, one AP member asked if it could be kept frameworkable. The AP advised that they do not support this measure, but it should be kept in the document for now. Rollover of RSA TAC (3.4.4.8) AP supportive of these alternatives, except for the one that moves unused TAC to the observer set-aside program. Several voiced that it is taking TAC for one purpose and using it for another purpose and that is not the solution. Ultimately, the AP recommends that the Committee remove alternative 3.4.4.8.4 – rollover of unused research TAC to help fund observer program. Extension of harvesting compensation TAC (3.4.4.9) A member of the audience explained that in the past they have requested an extension and it was rewarded, but it would be helpful if it was permitted in regulatory text. The AP does not have any objection to this alternative. Increase public input of RSA review process (3.4.4.10) Many spoke in favor of increasing public participation as much as possible and expressed concern that scallop resource is removed from the fishery and the fishery does not have as much say as they should in the process. One requested that it would be useful if the AP could see what is funded each year and what is not. Dr. Hoey from NMFS explained the grant process and why that is not possible. However, staff explained that the Council has decided to increase AP input

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in the management review process of proposals. Several were invited this past year, but declined. In addition, the AP can help identify research priorities in the future. Regulations from which RSA projects are exempt (3.4.4.11) AP agrees that it makes sense to identify a list of measures that research proposals should be exempt from, like crew size and turtle chains. It was noted that the vessel would not be exempt from these restrictions when on compensation trips. OTHER BUSINESS One advisor alerted the group to the increased use of nets in the Mid-Atlantic on the eastern side of the mudhole. Some vessels are switching from dredges to beam trawls and it is increasing mortality on scallops. In A11 the Council considered preventing a general category vessel from switching gears once it qualified for a LAGC permit, but that alternative was not selected. Several spoke in favor of revisiting that alternative in a future framework because they are concerned with smaller scallops being harvested and increasing mortality. Another agreed that loopholes like these undermine the conservation efforts of all and they should be addressed as soon as possible (FW21 or A15). One advisor asked about the status of A11 and the application/appeal process because there were some vessels in his port that clearly should not have qualified but are under an appeal. Staff responded that we can request an update for the Committee meeting in September, but all vessels are permitted to fish under an appeal.

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Scallop AP Meeting

August 20, 2008 Warwick, RI

CONSENSUS STATEMENTS AND INPUT RELATED TO A15

ISSUE #2: LA Rationalization (Section 3.3) • Permit Stacking (3.3.2) Section 3.3.2.1: The advisors agreed with this suggestion and recommend that the Committee

expand the “stacking of two permit alternative” to have three different options. Section 3.3.2.3: By consensus the advisors recommend that the Committee remove Option 2.

The alternative based on gear and wheel size should be removed from consideration. Section 3.3.2.4: Currently the advisors assumed that all permits would be transferred because

NMFS prevents breaking apart limited access permits, but the Committee should clarify.

Generally, the AP supports the ability to de-stack permits, although some audience members do not. Most advisors in favor of retaining the identity of stacked permits such that a vessel has multiple LA scallop permits associated with it.

• Permit Leasing (3.3.3) Section 3.3.3.1: The Committee will have to discuss if ownership caps are needed with leasing. Section 3.3.3.2: The AP advice to the Committee is that the AP would prefer having the ability

to lease as little as a single day, rather than blocks, to improve flexibility. The idea of leasing between the LA and LAGC fisheries raised many questions, but staff agreed to bring the idea forward to the Committee. • IFQ Management (3.3.4): Ultimately, the advisors did not make a recommendation based on

this alternative, but most that spoke felt it would delay the amendment.

• Conversion of open area DAS to access areas (3.3.5): The AP was supportive of leaving this alternative in the amendment to be fleshed out further, but there are differences of opinion about whether to pursue this or not. Some felt it was better placed in Section 3.2 under ACLs.

FISHING POWER ADJUSTMENTS: By consensus, the AP recommends not using tonnage in the fishing power adjustment. Advisors would like to see the model run so that there could be stacking between permits within the same baselines (10:10:20) with no adjustment, but an adjustment would be applied if permits were from vessels of different baselines. Most who spoke were not in favor of the alternative that reduced a stacked permit allocation by a flat rate, say 5%, but they did not decide as a group whether to leave it in or take it out at this point.

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ISSUE #4: LAGC Alternatives (Section 3.4) • IFQ by Area (3.4.2.2): By consensus, the AP agreed that this item should be removed from

further development.

• Other Items related to LAGC that are not presently in A15 Separation of YTF quota by LA and LAGC fisheries: By consensus, the advisors request that this issue be considered in FW21. ISSUE #6: Research Set-aside (3.4.4) • Extending the RSA Program to Multiyear (3.4.4.3): The AP is very supportive of extending

the RSA program to be multiyear (to match FW for now). • Modifying RSA from a Percent Allocation to Pounds (3.4.4.4): The AP supports the idea of

utilizing pounds instead of a percentage for RSA allocations because the pounds will be known in the future and this measure will help with the timing of the RFP. Further, the AP endorses using a 1 million pound RSA to start, but recommended that this amount be included as a frameworkable item.

• Additional 1% RSA for Survey Work in Addition to 2% Set-Aside (3.4.4.7): The AP

advised that they do not support this measure, but it should be kept in the document for now.

• Rollover of RSA TAC to help fund observer program (3.4.4.8.4): Ultimately, the AP

recommends that the Committee remove alternative 3.4.4.8.4. • Extension of harvesting compensation TAC (3.4.4.9): The AP does not have any objection

to this alternative. OTHER BUSINESS Revisiting the decision to allow GC vessels to switch gears once they qualify for an LAGC permit: Several spoke in favor of revisiting that alternative in a future framework because they are concerned with vessels switching from dredge gear to trawl gear. Trawl gear is capable of catching smaller scallops being harvested and increasing mortality.

New England Fishery Management Council 50 WATER STREET | NEWBURYPORT, MASSACHUSETTS 01950 | PHONE 978 465 0492 | FAX 978 465 3116

John Pappalardo, Chairman | Paul J. Howard, Executive Director

MEMORANDUM DATE: August 15, 2008

TO: Scallop Committee

FROM: Scallop Plan Development Team (PDT)

SUBJECT: PDT input on 2008 ESA Section 7 Consultation for the Scallop FMP and required reasonable and prudent measures (RPMs)

On March 14, 2008, NMFS completed an Endangered Species Act (ESA) Section 7 Consultation on the Atlantic Sea Scallop Fishery Management Plan.1 Under the ESA, each federal agency is required to review its actions to determine whether such actions may affect listed species or critical habitat. Five biological opinions have been completed for the scallop fishery to date. All five have had the same conclusion: the scallop fishery may adversely affect, but is not likely to jeopardize, continued existence of four sea turtles (loggerheads, green, Kemp’s ridley, and leatherback). Thus, NMFS is required to identify and implement reasonable and prudent measures (RPMs) necessary to minimize impacts of any incidental take. Five RPMs were identified in this biological opinion (BiOp). One RPM requires a limit of effort in the Mid-Atlantic during times when sea turtle distribution is expected to overlap with the fishery; the other four are related to ongoing research needs and identification of measures to reduce interactions. NMFS has requested that the Council develop measures in Framework 21 to meet the first RPM. Specifically, no later than the 2010 scallop fishing year NMFS must limit the number of open areas DAS that can be used and the number of access area trips that can be taken in the Mid-Atlantic during the time when turtles are expected to be in that area. However, the PDT raised several technical concerns with the report as well as overall questions about the report compared to biological opinions prepared in previous years and fisheries. This memo has been prepared to assist the Scallop Committee develop potential measures to comply with the first non-discretionary RPM of the recent biological opinion. It is broken into several parts: 1) brief summary of the recent BiOp with extractions of key sections; 2) summary of previous BiOps for the scallop fishery; 3) summary of the issues and questions the PDT has raised about the opinion; 4) PDT analyses of the footprint of the scallop fishery from FY2004-2007; 5) potential alternatives the Scallop Committee can consider for FW21 when developing alternatives to comply with the first RPM described in the biological opinion. Overall, the PDT has issue with how the first term and condition is currently drafted. The PDT did not focus on whether or not the RPM itself was reasonable and prudent – only the term and condition provided. The PDT does not believe that comparing future effort to a specific baseline period (2004-2007) is very useful in this case since. The scallop fishery is managed under area rotation; therefore, fishing effort patterns can vary substantially from year to year, area, and season because of how the effort is allocated. Therefore other options should be explored for a more reasonable term and condition that would minimize impacts and potentially limit effort during the summer and fall in the Mid-Atlantic. 1 The full biological opinion can be found at http://www.nero.noaa.gov/prot_res/section7/.

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1.0 2008 BIOLOGICAL OPINION NMFS NERO reinitiated formal intra-service consultation because new information on sea turtle takes “reveals that the continued authorization of the scallop fishery may affect turtle species in a manner or to an extent not previously considered.” In February 2007, NMFS released a reference document that included the first estimates of loggerhead turtle bycatch from scallop trawl gear. NMFS NERO determined that this is new information that warrants formal consultation.

• Section 6.0 of the BiOp – Effects of the Proposed Action on ESA Listed Sea Turtles This section identifies how the fishery affects the four turtle species. It provides information on the gear, number of turtles affected, how they are affected, and factors influencing risk of take. This section also describes the information used to determine the number of anticipated takes. The paragraphs below are extracted from the biological opinion. In general, the Scallop FMP is not likely to strike sea turtles and the fishery does not reduce the availability of prey for the 4 turtle species.

• Section 8.0 of BiOp – Conclusion

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• Section 9.0 – Incidental Take Statement

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The report also includes other requirements for monitoring as well as several conservation recommendations. Conservation recommendations are discretionary activities designed to minimize or avoid adverse effects of an action, to help implement recovery plans, or to develop information. They are recommendations, not requirements like RPMs. The figure below depicts the area that is referenced in the first Terms and Conditions. It is referenced as the “Mid-Atlantic” within this memo. Figure 1 – Area defined in the turtle biological opinion. Waters south of the northern boundaries of statistical areas 612, 613, 533, 534, 541, 542, and 543. In this memo this area is sometimes described as the “Mid-Atlantic”.

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2.0 PREVIOUS BIOLOGICAL OPINIONS This section will be provided at the Scallop Committee meeting as a separate handout.

3.0 PDT CONCERNS AND QUESTIONS REGARDING 2008 BIOLOGICAL OPINION

Two major technical concerns were voiced about the estimate of incidental takes: 1) only data from 2003-2004 were used, and 2) the effects of turtle chains have not been quantified in the estimate. Several PDT members voiced serious concern about throwing a year of data out (2005) because zero takes were observed. One commented that it is statistically valid to leave out data if something is wrong with it, but just because zero takes were observed is not a valid reason. If the zero is taken out, the estimate will be biased high; using all available data to make the estimate is better than ignoring a complete year of data. Specifically, it would have been better to use three years of data to project a two-year estimate of takes, rather than limit the input data to two years. Even though the impacts of turtle chains could not be incorporated quantitatively because there is no research to supply a value, the beneficial impacts should not have been ignored. One PDT member suggested that a small research project could easily help quantify encounters with turtles – one dredge with a turtle chain and one without. Another PDT member voiced that some of that work may be done on the federal survey this summer. Some felt the turtle chain issue could have been incorporated in the estimate somehow in the absence of a quantitative estimate of how they impact turtles. Other questions the PDT has are: 1) how this opinion compares to opinions for other fisheries and regions, 2) why this opinion is the first one with effort limit type of conditions when the estimate of takes is less than previous opinions, and 3) how should areas that have changes status over the baseline be considered (i.e. Delmarva). In the end, it was explained that even if additional years of observer data were used in the estimate (i.e. 2005) or if the estimate some how factored in the use of turtle chains, the end result would not be any different. The outcome of the biological opinion would be the same; that the action may adversely affect the four sea turtle species, and NMFS is required to provide reasonable and prudent measures to minimize impacts of the incidental take. The estimate of incidental take would be less, but according to the agency it would likely trigger similar if not the same RPMs. An agency representative from the Protected Resources Division for NMFS NERO responded to most of the questions and concerns at both PDT meetings. In addition, the agency responded to some of these concerns more formally in a letter to Paul Howard, dated August 1, 2008. The letter includes background on the “reasonableness” of the RPM related to fishing effort in the Mid-Atlantic and reasons behind the 50% and 30% options presented in the Terms and Conditions in the BiOp. To paraphrase, the agency, as required by ESA and regulations, identified RPMs that are necessary or appropriate to minimize, not reduce impacts on turtles, i.e. amount or extent of take. “Minimize” means to reduce to the smallest level possible. The letter also explains that the agency referred to the Consultation Handbook for guidance in identifying RPMs. Since no predictive variable has been defined yet that would help NMFS predict the number of future takes, NMFS took two approaches for identifying RPMs in the scallop fishery: 1) minimize the severity of interactions with scallop gear; and 2) minimize the number of interactions. Because NMFS was unable to identify any specific new gear that would constitute a minor change to the fishery, they identified that reducing effort in times and areas where sea turtles also occurred would meet the definition of an RPM.

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Based on fishing allocations in FW16 and FW18, NMFS believed that keeping at least one allocated trip in the Mid-Atlantic during the June-October time period would still be a minor to the fishery, while also minimize interactions. However, a longer time period was presented as a second option (May-Nov) as well due to uncertainties on when trips would be taken and other complexities in the fishery. For example, a 50% reduction may reduce the total number of trips available for some vessels so that no trips could be taken during that window of time. The letter explains that the same percentage reductions and time periods were applied to open area DAS as well because if a reduction in access area effort shifted effort to open areas the RPM would be less likely or not likely to achieve the goal of minimizing interactions. The letter suggests that the Council (a) determine whether the RPM and Term and Condition is “reasonable and prudent” in light of the regulatory and statutory guidance, and if not, then (b) identify what revisions are necessary to make it so or identify why there is no acceptable revisions that would make it meet the standard.

4.0 PDT ANALYSIS OF SCALLOP FISHERY FOOTPRINT Due primarily to time constraints the turtle BiOp developed the first RPM and Terms and Condition based on “allocated” effort. However, the PDT discussed that in order to minimize impacts on turtles assessing where effort actually took place is essential. This is exacerbated by the fact that the scallop fishery is managed under area rotation, so vessels are constrained to fish in certain areas and times, and each year varies greatly. Therefore, VMS and VTR data were pulled for 2004-2007 for any scallop trips that spent some time in the mid Atlantic. The total duration of time spent in statistical areas in the Mid-Atlantic has been calculated. The goal of the exercise is to describe the level of effort that took place in terms of days fished during this baseline period so measures that limit effort in the Mid-Atlantic during the summer and fall can be identified if necessary. Fishery Allocations

2004 2005 2006 2007 04-07 AVG 2008 20092010 Projected

Total Fleet Open Area DAS 22462 15344 20343 18577 19182 11410 13692 9,440*FT Open Area DAS 42 40 52 51 46 35 42 29**Total Access Areas 7 5 5 5 5.5 5 5 6Total MA AA 4 3 * 3 2.5 4 4 5Total GB AA 3 2 5 2 3.0 1 1 1CA1 0 1 0 1 0.5 0 0 0CA2 2 1 3 0 1.5 0 1 0NL 1 0 2 1 1.0 1 0 1HC 4 3 * * 1.8 0 0 0ET 0 0 0 3 0.8 4 3 3DEL N/A N/A N/A N/A 0.0 0 1 2*Based on estimate of 8,000 DAS used (8000 X 18% more to get DAS allocated)18% based on comparing average DAS used from baseline compared to average DAS allocated from baseline. ** Projected DAS for 325 full-time equivalent vessels (9,440 / 325 = 29 DAS) Open Area DAS used – MA and GB

2004 2005 2006 2007 04-07 AVG Total Fleet Open Area DAS 15,984 14,436 17,344 15,192 15739FT Open Area DAS(AVG) 52 44 54 46 49Total Access Areas 13,222 11,603 9,165 16,408 12599

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Baseline Average compared to estimated allocations for 2010 2004-2007

Baseline Average FY2010

Access Areas Total # of trips 5.5 6 ↑ 0.5 trip MA # of trips 2.5 5 ↑ 2.5 trips GB # of trips 3.0 1 ↓2 trips

HC 7 (1.75 avg) 0 – closed Benefit ET 3 (0.75 avg) 3 Same Del Open area 2 ?

MA Open Area DAS Total 8,250 7000 ↓1250 J-O 3,505 (42% of 8250) 2940 (42% of 7000) ↓565 (16% less baseline) M-N 5,353 (63% of 8250) 4410 (63% of 7000) ↓943 (18% less baseline) Open Area DAS Overall, from 2004-2007, an average of about 19,000 open area DAS were allocated to the limited access fishery (46 per individual FT vessel). On average, about 15,700 DAS were used in open areas for this same time period. For trips that spent any time in the Mid-Atlantic the average DAS used from 2004-2007 was 8,250 DAS (3,505 during June-Oct and 5,353 for May-Nov). On average 42% of MA open area DAS used during J-O and about 63% for M-N. If the BiOp requires a 50% reduction from average DAS used from J-O that equals 1,753 DAS and a 30% reduction for the longer time frame would be a total of 3,747 DAS used permitted for May-Nov. In 2010, total open area DAS is estimated to be about 8,000 DAS (7,000 expected to be used in MA and 1,000 in GB). If the same usage percentages are applied (42% of MA DAS used during Jun-Oct and 63% during May-Nov) the expected DAS used for both scenarios in 2010 would be 2,940 MA DAS in J-O (42% of 7,000) and 4,410 MA DAS in M-N (63% of 7,000). Both these values are greater than the values generated from 50% or 30% less DAS used during the baseline years, 1,753 DAS and 3,747 DAS respectively. Originally the PDT did not think that open area DAS would need to be adjusted because much fewer DAS are being allocated in the fishery compared to years during the baseline (8,000 in 2010 compared to average of 15,700 from 2004-2007). But because the majority of open area DAS in 2010 are expected to be fished in the Mid-Atlantic, then other provisions may need to be considered. However, the PDT does not believe that comparing future effort to a specific baseline period is very useful in this case since the scallop fishery is managed under area rotation and fishing effort patterns vary from year to year, area, and season because of how the effort is allocated. The PDT did have a long discussion about what is “minor” and “major” and the Committee will need to discuss further whether measures that restrict DAS usage during certain times of year are more than a minor change as stipulated under ESA. Access Areas An average of 5.5 access area trips were allocated each year for the 2004-2007 baseline period; an average of 2.5 in the Mid-Atlantic and 3 in GB. But it is very important to note that each year varied significantly in terms of where access area trips were allocated and where new access areas were closed. In 2010, the PDT projects that 6 access area trips will be taken; 3 in ET, 2 in Delmarva and 1 on GB. Five access areas in MA is greater than the average of 2.5 MA trips by 50%. The number of access area trips taken were analyzed by summarizing the count of trips by access area code using VMS data. They were further summarized by month. For ETA, most trips were taken outside of the two

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season windows suggested in the biop (100 out of 900 during J-O and 270 out of 900 for M-N). For HC, it varied more by year, but about half were taken during the shorter time window and over 75% of trips during the longer window. For 2010 there are more access area trips, but it is uncertain when those trips are expected to be taken. The PDT recognizes the need and requirement to adhere to the RPMs and minimize impacts on sea turtles, but has issue with how the first term and condition is currently drafted. The term and condition as written would allocate less than 1 trip MA access areas, regardless of the two provided windows (May-Nov and June-Oct). The PDT agrees with the agency that this would be more than a minor change – therefore, other options should be explored for a more reasonable term and condition that would minimize impacts and potentially limit effort during the summer and fall in the Mid-Atlantic. The PDT does not believe that comparing future effort to a specific baseline period is very useful in this case since the scallop fishery is managed under area rotation and fishing effort patterns vary from year to year, area, and season because of how the effort is allocated.

5.0 POTENTIAL ALTERNATIVES TO CONSIDER If the Committee and Council agree with the PDT that the first term and condition is NOT reasonable then other options can be explored. The first list below includes some ideas for different terms and conditions that would still comply with the first RPM – NMFS must limit the number of open area scallop DAS and the number of allocated access area trips that can be used in Mid-Atlantic waters within the action area during the months of June through October or May through November each year.

1) Use 2003-2004 used DAS data to match the baseline period used to estimate turtle takes for the scallop fishery and limit effort (DAS and AA trips) based on that baseline instead of 04-07

2) Use the SAMS model approach – Summarize area swept from SAMS model and back calculate what change of DAS would be needed to reduce area swept by required amounts (50% and 30%)

3) Not focus on limiting effort based on a baseline period; instead restrict the fishery to 50% or 30% less allocated DAS and AA trips in the Mid-Atlantic during a particular window of time

4) Try to address area rotation changes like Delmarva by summarizing data more specifically so it can be an open area for part of the baseline and an access area for another.

5) Consider allocating a certain number of “MA DAS” to each vessel and allow leasing. Then if one vessel wants to fish in that area during the window of time where there are limits on the total effort they could lease MA DAS from another vessel.

The PDT did not focus on developing alternatives to the first RPM. However, if the Council does not find the first RPM reasonable and prudent there are potentially other ways that impacts on turtles could be minimized that do not include limits on DAS and access area trips in the Mid-Atlantic during the summer and fall. For example, the seasonal closure in Elephant Trunk could be extended, a seasonal closure could be considered for Delmarva and Hudson Canyon, an overall cap on turtle bycatch for the fishery could be identified and once it is reached the fishery would close in that area and season until the following fishing year, etc. Additional measures would need to be developed in FW21 to implement any of these ideas.

1.1 FISHING POWER ADJUSTMENT FOR PERMIT STACKING AND DAS LEASING

Amendment 15 includes alternatives that will allow permit stacking and days-at-sea leasing to reduce capacity in the sea scallop fishery. There is, however, a concern that if DAS is transferred from a vessel that has a lower fishing power to a vessel with higher fishing power with no adjustment, the capacity and the fishing mortality in fishery could increase. As a result, it may be necessary to reduce DAS and/or trip allocations for all vessels to counteract such increase in fishing mortality to the disadvantage of the vessels that were not involved in permit stacking or DAS transfers. The following sections examine the factors that impact the fishing power and landings per DAS (LPUE) of a vessel, analyze the potential impacts of DAS consolidation and discuss method for adjusting DAS to prevent an increase in capacity and fishing mortality in the sea scallop fishery. The first section (Section 1.2) provides historical data on LPUE’s for the full-time limited access fleet by vessel horsepower: Four groups of vessels are identified according to the horsepower of the vessel:

1) Less than 600 HP 2) 600 HP to 825 HP 3) 850 HP-970 HP 4) Greater than 1000 HP.

According to the data for recent fishing years, there are roughly similar number of vessels in the third and fourth groups and slightly more vessels in the smaller HP groups. These are preliminary groupings for the purposes of exposition, however. Additional analyses could be conducted with scallop fleet divided into more (less) groups with different ranges of horse power and vessel characteristics. Table 1 indicates that average LPUE is higher for the group of vessels with a higher horse power. For example, average LPUE for the 70 vessels in the “>=1000 HP” group was 2,300 lb. per day-at-sea whereas average LPUE for the 93 vessels in the “<600 HP” group was 1,458 lb. per day-at-sea during the 2006 fishing year. Table 3 and Table 4 indicate that lower HP vessels also have a lower GRT than the vessels in higher HP groups. The same Tables shows that the ratio of LPUE of the higher group to the LPUE of the lower HP group was 1.58 in 2006 including small dredge vessels, and was 1.35 excluding small dredge vessels. Thus, if a transfer of DAS took place in year 2006 from small full-time boats (excluding small dredges) to the larger boats and if we use the ratio of LPUE’s of this group of vessels to estimate the landings, we would expect that total landings go up because larger vessels could catch 35% more during a day-at-sea. The historical Tables included in the Section 1.2 indicate, however, that the LPUE ratios for the different HP groups were not constant during 1994-2007. Until 1999 fishing year, there was little difference in the LPUE’s of the smaller HP groups since the low stock abundance restricted catches per day-at-sea for all vessels (Table 5). Therefore, in

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addition to the vessel characteristics, stock abundance plays a role in determining LPUE of vessels. Table 5 also shows that average DAS-used was different for each group of the vessels during the 1994-2007. There were also changes in the crew size, dredge size, number of dredges, ring size and area fished during the same period which altogether would have an impact on the average LPUE of the different group of vessels as well. These factors are taken into account in Section 1.3 of this document in determining the impacts of DAS transfers and adjustment factors. Section 1.3 presents a technical production model to measure the impacts of several factors that affect annual pounds landed by a full-time dredge vessel. These factors are annual DAS-used, HP, GRT, crew size, fishable abundance, dredge size and number of dredges, ring size, and percentage of landings from access areas. The model estimates have robust statistical results and statistically significant coefficients providing a close fit to the actual landings for the fishing years from 1994 to 2006 (Figure 2). This model will be modified in the next round of work by including better data for the access area landings and a variable to capture the differences in landings of small dredge boats. These changes are expected to improve the explanatory power of the model, but not expected to change the analytical results presented here in any significant way. The adjustment factor formula that is derived from the production function estimates is shown in Equation-4. According to this formula, the relative LPUE’s, thus adjustment factors could be determined from the relative HP, Crew size, DAS-used, dredge size and number of dredges of the vessels that exchange DAS. Using the results of the production model, Table 17 (Section 1.5) provides a scenario analysis where all 84 vessels in the “<600 HP” group and an additional 40 vessels in the “600-825 HP” group transfer all of their DAS to the 66 vessels in the “>1000 HP”. As a result of this transfer, the number of active full-time dredges declines from 240 vessels to 156 vessels, and day-at-sea used for the 66 vessels in the “>1000 HP” increase from 80 days to 189 days. Consequently, the fleet landings would increase by 6.3% because of the concentration of DAS in larger vessels without any DAS adjustment. On the other hand, if the DAS transfers were adjusted using the adjustment factors shown in Table 12 (and Table 13 in terms of DAS-used), the increase in landing could be prevented. Table 19 provides another scenario analysis, where the number of full-time dredge vessels decline from 240 to 129 after the transfers of DAS to the vessels in the largest HP group, resulting in a 7.66% increase in landings without adjustment and a negligible decline (0.84%) with adjustment to the DAS. Finally, Section 1.6 provides a scenario analysis using a 10% and a 15% tax on DAS transfers.

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1.2 DAS ADJUSTMENT BASED ON VESSEL CHARACTERISTICS FOR CONSOLIDATION/LEASING OF DAS

Since scallop landings per day-at-sea varies from vessel to vessel according to the vessel characteristics among other factors, DAS from one vessel must be adjusted for other vessel’s fishing power to prevent fishing mortality from increasing when DAS’s are consolidated or transferred. In other words, DAS must be adjusted with relative landings per DAS (LPUE). An adjustment factor in relative LPUE’s is expressed as follows: Aij= LPUE i/LPUEj where LPUE i= Landings per DAS for vessel ‘I’; LPUE j= Landings per DAS for vessel ‘J’; The adjustment formula could be applied either using ratios of LPUE’s of different vessels based on the historical data or using estimates of LPUE’s corrected for factors that affect the catch rates. The following results are from actual data and indicate that LPUE per vessel varies with HP. Based on the ratios of LPUE’s of different vessels grouped according to their HP, the DAS could be adjusted to prevent an increase in fishing mortality. An example for such an adjustment is provided in Table 8 and Table 9 using the data for the 2006 fishing year. Table 10 shows another example with DAS consolidation using estimates from a production model and scallop full-time fleet characteristics. This example shows the results of a transfer of DAS from 44 dredge vessels with less than 600 HP and 40 vessels with 600-825 HP to 66 vessels with more than 1000 HP. The results indicate that if DAS is not adjusted total scallop landings could increase by more than 6.9%. If the DAS is adjusted according to the average ratios of LPUE’s of these two HP groups, there could be a small decline in landings by about 3.0% compared to estimated landings in 2006. This is partly because, the empirical ratios do not take into account diminishing LPUE (or diminishing average returns to DAS) as DAS-used increased.

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Table 1. LPUE by fishing year and horsepower (all full-time vessels excluding 3 outlier values with LPUE>10,000 lb.)

Horse power FISHYEAR Data

<600 600-825 850-970 >=1000 Fleet

LPUE

1994 LPUE (lb./DAS) 464 429 386 472 437 Number of vessels 51 43 61 55 210 1995 LPUE (lb./DAS) 468 459 445 510 471 Number of vessels 52 43 59 58 212 1996 LPUE (lb./DAS) 414 409 458 594 474 Number of vessels 51 41 61 56 209 1997 LPUE (lb./DAS) 331 353 403 563 414 Number of vessels 51 40 59 50 200 1998 LPUE (lb./DAS) 403 371 395 490 416 Number of vessels 53 40 61 51 205 1999 LPUE (lb./DAS) 754 916 971 1,134 943 Number of vessels 54 44 61 53 212 2000 LPUE (lb./DAS) 1,230 1,453 1,558 1,712 1,487 Number of vessels 60 48 65 56 229 2001 LPUE (lb./DAS) 1,346 1,606 1,702 1,816 1,604 Number of vessels 70 52 66 57 245 2002 LPUE (lb./DAS) 1,335 1,669 1,717 1,928 1,627 Number of vessels 84 55 64 59 262 2003 LPUE (lb./DAS) 1,486 1,678 1,749 1,930 1,691 Number of vessels 88 64 62 65 279 2004 LPUE (lb./DAS) 1,739 2,093 2,203 2,425 2,083 Number of vessels 90 73 63 69 295 2005 LPUE (lb./DAS) 1,430 1,808 2,052 2,345 1,856 Number of vessels 98 77 67 70 312 2006 LPUE (lb./DAS) 1,458 1,839 2,020 2,307 1,868 Number of vessels 93 83 67 70 313 2007 LPUE (lb./DAS) 1,436 1,671 1,802 1,937 1,693 Number of vessels 89 87 68 71 315

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Table 2. LPUE by fishing year and horsepower (full-time dredges excluding small dredges and trawls and 3 outlier values with LPUE>10,000 lb.)

Horse power FISHYEAR Data

<600 600-825 850-970 >=1000 Fleet

LPUE

1994 LPUE (lb./DAS) 424 417 379 471 423 Number of vessels 37 37 58 53 185

1995 LPUE (lb./DAS) 441 457 438 510 464 Number of vessels 37 38 57 56 188

1996 LPUE (lb./DAS) 398 409 459 599 475 Number of vessels 36 39 59 52 186

1997 LPUE (lb./DAS) 325 352 404 569 420 Number of vessels 36 38 58 48 180

1998 LPUE (lb./DAS) 366 370 394 491 409 Number of vessels 37 38 60 50 185

1999 LPUE (lb./DAS) 719 916 971 1,134 949 Number of vessels 41 44 61 53 199

2000 LPUE (lb./DAS) 1,274 1,456 1,558 1,712 1,516 Number of vessels 44 47 65 56 212

2001 LPUE (lb./DAS) 1,488 1,611 1,702 1,816 1,667 Number of vessels 43 51 66 57 217

2002 LPUE (lb./DAS) 1,463 1,671 1,717 1,928 1,707 Number of vessels 45 54 64 59 222

2003 LPUE (lb./DAS) 1,692 1,711 1,749 1,933 1,776 Number of vessels 48 59 62 64 233

2004 LPUE (lb./DAS) 2,017 2,180 2,203 2,445 2,228 Number of vessels 45 62 63 68 238

2005 LPUE (lb./DAS) 1,699 1,860 2,053 2,392 2,024 Number of vessels 45 64 66 68 243

2006 LPUE (lb./DAS) 1,726 1,905 2,016 2,335 2,019 Number of vessels 46 68 65 68 247

2007 LPUE (lb./DAS) 1,554 1,717 1,817 1,963 1,785 Number of vessels 43 72 66 69 250

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Table 3. LPUE ratios for full-time vessels, average GRT and Fishable Mean Abundance (All sizes, millions)

Horse power FISHYEAR Data

<600 600-825 850-970 >=1000

Fishable Mean

Abundance1994 LPUE ratios 1.00 0.92 0.83 1.02 Average GRT 117 152 172 184

673

1995 LPUE ratios 1.00 0.98 0.95 1.09 900 Average GRT 122 152 172 184 1996 LPUE ratios 1.00 0.99 1.11 1.44 813 Average GRT 120 153 171 184 1997 LPUE ratios 1.00 1.07 1.22 1.70 722 Average GRT 123 151 171 183 1998 LPUE ratios 1.00 0.92 0.98 1.22 744 Average GRT 120 151 172 185 1999 LPUE ratios 1.00 1.21 1.29 1.50 1,147 Average GRT 117 154 172 184 2000 LPUE ratios 1.00 1.18 1.27 1.39 1,948 Average GRT 117 149 173 184 2001 LPUE ratios 1.00 1.19 1.26 1.35 2,677 Average GRT 114 150 173 184 2002 LPUE ratios 1.00 1.25 1.29 1.44 2,250 Average GRT 110 150 174 182 2003 LPUE ratios 1.00 1.13 1.18 1.30 2,399 Average GRT 111 148 173 182 2004 LPUE ratios 1.00 1.20 1.27 1.39 2,881 Average GRT 112 143 173 181 2005 LPUE ratios 1.00 1.26 1.43 1.64 3,258 Average GRT 109 143 170 180 2006 LPUE ratios 1.00 1.26 1.39 1.58 3,495 Average GRT 109 142 170 180 2007 LPUE ratios 1.00 1.16 1.25 1.35 NA Average GRT 106 142 170 180

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Table 4. LPUE ratios for Full-time Dredges (excluding small dredge, trawls and outliers), average GRT and Fishable Mean Abundance

Horse power FISHYEAR Data

<600 600-825 850-970 >=1000

Fishable Mean

Abundance1994 LPUE ratios 1.00 0.98 0.89 1.11 Average GRT 123 154 172 184

673

1995 LPUE ratios 1.00 1.04 0.99 1.16 900 Average GRT 124 153 172 184 1996 LPUE ratios 1.00 1.03 1.15 1.50 813 Average GRT 123 154 171 184 1997 LPUE ratios 1.00 1.08 1.24 1.75 722 Average GRT 125 152 172 182 1998 LPUE ratios 1.00 1.01 1.08 1.34 744 Average GRT 123 152 172 185 1999 LPUE ratios 1.97 2.51 2.66 3.10 1,147 Average GRT 119 154 172 184 2000 LPUE ratios 1.00 1.14 1.22 1.34 1,948 Average GRT 118 150 173 184 2001 LPUE ratios 1.00 1.08 1.14 1.22 2,677 Average GRT 121 151 173 184 2002 LPUE ratios 1.00 1.14 1.17 1.32 2,250 Average GRT 118 151 174 182 2003 LPUE ratios 1.00 1.01 1.03 1.14 2,399 Average GRT 118 150 173 182 2004 LPUE ratios 1.00 1.08 1.09 1.21 2,881 Average GRT 124 146 173 181 2005 LPUE ratios 1.00 1.10 1.21 1.41 3,258 Average GRT 123 146 170 181 2006 LPUE ratios 1.00 1.10 1.17 1.35 3,495 Average GRT 118 145 170 181 2007 LPUE ratios 1.00 1.11 1.17 1.26 NA Average GRT 115 145 170 181

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Table 5. LPUE ratios and DAS-used (all full-time dredges) Horse power

FISHYEAR Data <600 600-825 850-970 >=1000

1994 LPUE ratios 1.00 0.92 0.83 1.02 Average DAS-used 143 155 165 179 1995 LPUE ratios 1.00 0.98 0.95 1.09 Average DAS-used 133 153 160 171 1996 LPUE ratios 1.00 0.99 1.11 1.44 Average DAS-used 140 153 164 168 1997 LPUE ratios 1.00 0.99 1.11 1.44 Average DAS-used 135 149 150 155 1998 LPUE ratios 1.00 0.99 1.11 1.44 Average DAS-used 110 131 131 131 1999 LPUE ratios 1.00 1.21 1.29 1.50 Average DAS-used 97 103 100 107 2000 LPUE ratios 1.00 1.21 1.29 1.50 Average DAS-used 91 93 93 95 2001 LPUE ratios 1.00 1.19 1.26 1.35 Average DAS-used 106 110 105 113 2002 LPUE ratios 1.00 1.25 1.29 1.44 Average DAS-used 101 112 117 114 2003 LPUE ratios 1.00 1.13 1.18 1.30 Average DAS-used 105 107 115 114 2004 LPUE ratios 1.00 1.20 1.27 1.39 Average DAS-used 98 95 96 95 2005 LPUE ratios 1.00 1.26 1.43 1.64 Average DAS-used 76 85 79 78 2006 LPUE ratios 1.00 1.26 1.39 1.58 Average DAS-used 78 86 82 80 2007 LPUE ratios 1.00 1.16 1.25 1.35 Average DAS-used 101 95 94 90

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Figure 1. LPUE by HP group (full-time vessels)

LPUE and HP (full-time vessels)

-

500

1,000

1,500

2,000

2,500

3,000

2003 2004 2005 2006 2007

LPU

E (lb

/use

d D

AS)

<600600-825850-970>=1000

LPUEDAT OK DAS data YES GRTGRP (All)

Average of LPUE2-DASdat

FISHYEAR

HPGRPNEW

Table 6. LPUE by GRT and HP (Full-time vessels, 2005-06 data)

Horse Power GRTGRP <600 600-825 850-970 >=1000

<=50

1,244

51-100

1,405

1,776

101-150

1,566

1,844

2,044

2,135

>150

1,823

1,793

2,030

2,423

Based on the 2005-2006 fish year data, GRT doesn’t seem to have much impact on LPUE’s except at <600 hp level.

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Table 7. LPUE and HP of the Full-time vessels and biomass HPGRPNEW

FISHYEAR Data <600 600-825 850-970 >=1000 Grand Total

2005 Average of LPUE2-DASdat

1,442

1,808

2,052

2,376

1,866

Count of PERMIT 96

77

67

64

304

Average of FISHABALL 3,258

3,258

3,258

3,258

3,258

2006 Average of LPUE2-DASdat

1,546

1,839

2,020

2,404

1,918

Count of PERMIT 87

82

67

66

302

Average of FISHABALL 3,495

3,495

3,495

3,495

3,495

Total Average of LPUE2-DASdat 1,491

1,824

2,036

2,390

1,892

Total Count of PERMIT 183

159

134

130

606

Total Average of FISHABALL 3,371

3,380

3,377

3,378

3,376

Example A with Consolidation: Table 8. Adjustment factors of Full-time dredge vessels by HP groups (based on 2006 fishing year) Horsepower of

Horsepower of Buying Vessel

Selling vessel <600 HP 600-825 HP

850-970 HP

>=1000 HP

<600 HP 1.00 0.90 0.85 0.72 600-825 HP 1.11 1.00 0.94 0.80 850-970 HP 1.18 1.06 1.00 0.85 >=1000 HP 1.38 1.24 1.17 1.00

Table 9. DAS adjustment for buying/leasing/stacking 100 DAS (based on 2006 fishing year) Horsepower of

Horsepower of Buying Vessel

Selling vessel

<600 HP 600-825 HP 850-970 HP

>=1000 HP

<600 HP 100 90 85 72 600-825 HP 111 100 94 80 850-970 HP 118 106 100 85 >=1000 HP 138 124 117 100

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Table 10. Example A -Consolidation of DAS with and without adjustment for fishing power (Full-time dredge vessels). Adjustment is done using LPUE data for 2006.

FISAHABLE ABUNDANCE 3495

Landings in access areas

as % of total 0.58 2006 Actual land.2006 39,818,030

estimated

40,300,502 % difference 1.2% FISAHABLE ABUNDANCE 3495

Status Quo

HP Groups Total landings DAS-used Number of FT

boats SCLAN.EST LPUE-est <600 HP 6,436,949 84 44 146,294 1,742

600 -825 HP 11,171,964 87 67 166,746 1,917 850-970 HP 10,694,930 82 63 169,761 2,070

>=1000 HP 11,996,659 80 66 181,768 2,272

Total 40,300,502 19971 240

Consolidation Unadjusted DAS transfer

HP Groups Total landings DAS-used Num. of FT

boats SCLAN.EST LPUE-est

<600 HP - 84 0 146,294 1,742 600 -825 HP 4,502,135 87 27 166,746 1,917 850-970 HP 10,694,930 82 63 169,761 2,070

>=1000 HP 27,636,778 189 66 418,739 2,219

Total 42,833,843 19971 156

% Change 6.29%

Consolidation Adjusted DAS transfer

HP Groups Total landings DAS-used Num. of FT

boats SCLAN.EST LPUE-est

<600 HP - 84 0 146,294 1,742 600 -825 HP 4,502,135 87 27 166,746 1,917 850-970 HP 10,694,930 82 63 169,761 2,070

>=1000 HP 23,895,137 163 66 362,048 2,228

Total 39,092,202 18240 156

% Change -3.0%

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1.3 TECHNICAL PRODUCTION FUNCTION ESTIMATES DAS adjustments based on LPUE’s (by HP groups) obtained from the empirical data may not reflect accurately the differences in the fishing power’s of the vessels. The changes in the scallop stock abundance, DAS-used, crew size, ring size, dredge size and area fished could affect the difference in the LPUE’s of vessels with different HP or other characteristics. These factors could be taken into account by using a technical production model that takes into account the influence of these factors. The model coefficients could in turn be used to correct LPUE’s of various vessels for factors that affect the catch rates. The following annual production model estimates landings per full-time dredge vessel (excluding small dredges and trawls) characteristics, scallop abundance and DAS (Table 11): Table 11. ESTIMATION OF TECHNOLOGICAL PRODUCTION FUNCTION Dependent Variable: lnL Number of Observations Read 2863 Number of Observations Used 2602 Number of Observations with Missing Values 261 Analysis of Variance Sum of Mean Source DF Squares Square F Value Pr > F Model 8 750.90604 93.86326 1100.57 <.0001 Error 2593 221.14667 0.08529 Corrected Total 2601 972.05271 Root MSE 0.29204 R-Square 0.7725 Dependent Mean 11.68639 Adj R-Sq 0.7718 Coeff Var 2.49896 Parameter Estimates Parameter Standard Variable DF Estimate Error t Value Pr > |t| Intercept 1 -2.73538 0.22549 -12.13 <.0001 lnDAS 1 0.97232 0.02336 41.62 <.0001 lnHP 1 0.26476 0.02327 11.38 <.0001 lnGRT 1 0.05191 0.03097 1.68 0.0939 lnCREW 1 0.10846 0.02698 4.02 <.0001 lnAB 1 0.97827 0.01797 54.43 <.0001 lnDREGNS 1 0.03064 0.01047 2.93 0.0035 DO5 1 -0.38944 0.01996 -19.51 <.0001

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PCTAC 1 0.77369 0.05255 14.72 <.0001    

Variable Definitions and data sources L= Annual scallop landings per fish year in pounds (source: dealer data) DAS= Annual sum of DAS used by a vessel (source: DAS data) HP= Horse power (source: permit data) GRT = Gross Tonnage (source: permit data) CREW = Number of crew (source: permit data) AB= Fishable mean abundance (Whole stock, all sizes in millions,

source: SARC 47) DREGNS = Dredge gear size * Number of dredges in use (source: permit data) D05 = A dummy variable for proxy in change of ring size to 4 inches in 2005

(source: permit data, d05=1 for 2005-2006 and d05=0 for fish years<2005). PCTAC= Landings from access areas as a percentage of total scallop landings

from all areas (source: Various scallop frameworks for allocated number of trips and possession limit for the access areas)

The prefix “ln” indicates that logarithm of the variable is used as an explanatory factor. Figure 2. Actual and estimated landings from the production model

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Scal

lop

land

ings

(lb.

)

Estimated landings (total)Scallop landings (total)

DAS data YES NEWSAMP(All) PCTDASG (All) HPGRP (All) LPUEDAT (All) DREGSDAOK DREGNDAOK PERCATdeFT PERGRP (All) CREWDATOK

FISHYEAR

Data

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1.4 DERIVATION OF THE ADJUSTMENT FACTORS The production model presented above is a static model that could be applied only to changes in landings within a fishing year. This is due to the fact that the model does not take into account the impacts of landings during the present year on fishing mortality and scallop yield during the future years. Those impacts are estimated by the biological model. Within this static short-term framework, the technical production model could be used, however, to predict changes in landings under various consolidation scenarios assuming that allocated DAS are entirely used for directed trips. The landings will obviously be overestimated by the model if it is applied to all scallop trips.

1.4.1 Adjustment factor based on technical production model

The adjustment factor (Aij) for DAS exchanges between two vessels (vessel “i” and vessel “j”) are calculated using the production function estimates as shown below through Equations 1 to 4: (Equation-1) Li =LPUEi= ((-2.73 (HPi)0.26(GRTi)0.05 (DASi)0.97 (CREWi)0.11 (DREGNS) 0.03(AB)0.97

e -0.39(D05)* e0 .77(PCTAC)))/ (DASi) (Equation-2) LPUEi= ((-2.73 (HPi)0.26 (GRTi)0.05 (CREWi)0.11 (DREGNS) 0.03 (AB)0.97 e -0.39(D05)* e0 .77(PCTAC)))* (DASi)-0.03

(Equation-3) Aij= LPUE i/LPUEj

(Equation-4)

Aij=((HPi)0.26 (GRTi)0.05 (CREWi)0.11 (DREGNS) 0.03 (DASi)-0.03)/ ((HPj)0.26 (GRTj)0.05 (CREWj)0.11 (DREGNS) 0.03 (DASj)-0.03

Adjustment factors based on the estimates of the production model are shown below for 4 HP groups again using the full-time scallop fleet characteristics and fishable abundance for 2006 (Table 12 and Table 13). Using the same example (example A) provided above, the transfer of DAS from 44 vessels with less than 600 HP or less and 40 vessels with 600-825 HP to 66 vessels with more than 1000 HP results in an increase in landings by 6.29%. If DAS were adjusted,

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however, using the adjustment factors in Table 12, fleet landings would decline slightly by 0.69% compared to estimated landings in 2006. This decline is less than the 3.0% decline shown in Table 10, because the adjustment factors are higher this time compared to the empirical estimates. For example, adjustment factor for DAS transfer from a vessel in the smallest HP group (<600 HP) to a vessel with >=1000 HP was 0.72 before. Production model estimates result in an adjustment factor of 0.78 after correcting for the influence of other factors (such as crew size, DAS-used, GRT, dredge size) in addition to HP on scallop landings. Table 12. Adjustment factors for full-time dredges based on the production function estimates and including adjustments for crew size, GRT, DAS-used, and dredge size and number (Equation 4)

Horsepower of

Horsepower of Buying Vessel

Selling vessel <600 HP 600-825 HP

850-970 HP

>=1000 HP

<600 HP 1.00 0.91 0.84 0.78 600-825 HP 1.10 1.00 0.93 0.86 850-970 HP 1.19 1.08 1.00 0.93 >=1000 HP 1.30 1.19 1.07 1.00

Table 13. DAS adjustment for buying/leasing/stacking 100 DAS based on full prod.func.estimates (Equation 4) Horsepower of

Horsepower of Buying Vessel

Selling vessel

<600 HP 600-825 HP

850-970 HP

>=1000 HP

<600 HP 100 91 84 78 600-825 HP 110 100 93 86 850-970 HP 119 108 100 93 >=1000 HP 130 119 107 100

1.4.2 A simplified adjustment factor based on technical production model and ratios of HP only

The production function estimates showed that GRT doesn’t have a statistically significant impact on landings per unit effort, so that it could be dropped out of the equation 4 above. In addition, assuming that exchange takes place between vessels that employ same number of crew, use same number of days-at-sea, dredge size and number of dredges, the ratios of the CREW, DAS, DREGNS in equation 4 cancel out. As a result, adjustment factor could be expressed simply as a ratio of the HP of the exchanging vessels: Aij=(HPi)0.26/ (HPj)0.26 (Equation-5)

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For example, if full-time dredge vessels were divided into four HP groups as shown in Table 14, the adjustment factors could be derived from the ratio in Equation 5 as a function of the relative HP of the vessels. Table 15 shows these adjustment factors by Horsepower group. Table 16 shows an upward adjustment for DAS transfers from small to large vessels only. Table 14. Full-time dredge vessels by HP group

Horse power Number of

boats HP

(Average)

<600 44 498

600-825 67 689 850-970 65 872 >=1000 64 1,211

Table 15. Adjustment factors based on the simplified formula (function of the HP ratios) given in Equation-5

Horsepower of Buying Vessel Horsepower of

Selling vessel

<600 HP 600-825 HP

850-970 HP >=1000 HP

<600 HP 1.00 0.92 0.86 0.79 600-825 HP 1.09 1.00 0.94 0.86 850-970 HP 1.16 1.06 1.00 0.92 >=1000 HP 1.26 1.16 1.09 1.00

Table 16. Adjustment factors based on the simplified formula given in Equation-5: Adjustment is applicable only to transfer of DAS from small to large vessels.

Horsepower of Buying Vessel Horsepower of

Selling vessel

<600 HP 600-825 HP

850-970 HP >=1000 HP

<600 HP 1.00 0.92 0.86 0.79 600-825 HP 1.00 1.00 0.94 0.86 850-970 HP 1.00 1.00 1.00 0.92 >=1000 HP 1.00 1.00 1.00 1.00

1.5 SCENARIO ANALYSES WITH CONSOLIDATION AND DAS ADJUSTMENT

Table 17 and Table 18 provide two scenarios with consolidation. Table 17 provides an example where all 84 vessels in the “<600 HP” group and an additional 40 vessels in the “600-825 HP” group transfer all of their DAS to the 66 vessels in the “>1000 HP”. As a result of this transfer, the number of active full-time dredges declines from 240 vessels to 156 vessels, and day-at-sea used for the 66 vessels in the “>1000 HP” increase from 80 days to 189 days. Consequently, the fleet landings would increase by 6.3% because of the

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concentration of DAS in larger vessels without any DAS adjustment. On the other hand, if the DAS transfers were adjusted using the adjustment factors shown in Table 12 (and Table 13 in terms of DAS-used), the increase in landing could be prevented. Table 19 provides another scenario analysis, where the number of full-time dredge vessels decline from 240 to 129 after the transfers of DAS to the vessels in the largest HP group, resulting in a 7.66% increase in landings without adjustment and a negligible decline (0.84%) with adjustment to the DAS using the simplified formula given in Equation 5. Table 17. Example A: Consolidation of DAS with and without adjustment for fishing power (Full-time dredge vessels only); Adjustment is done according to the production function estimates.

FISAHABLE ABUNDANCE 3495

Landings in access areas as % of total 0.58

2006 Actual land.2006 39,818,030 estimated 40,300,502 % difference 1.2% FISAHABLE ABUNDANCE 3495 Status Quo

HP Groups Total landings DAS-used Num of FT boats

Estimated landings LPUE-est

<600 HP 6,436,949 84 44 146,294 1,742 600 -825 HP 11,171,964 87 67 166,746 1,917 850-970 HP 10,694,930 82 63 169,761 2,070 >=1000 HP 11,996,659 80 66 181,768 2,272 Total 40,300,502 19971 240

Consolidation Unadjusted DAS transfer

HP Groups Total landings DAS-used Num. of FT boats

Estimated landings LPUE-est

<600 HP - 84 0 0 1,742 600 -825 HP 4,502,135 87 27 166,746 1,917 850-970 HP 10,694,930 82 63 169,761 2,070 >=1000 HP 27,636,778 189 66 418,739 2,219 Total 42,833,843 19971 156 % Change 6.29%

Consolidation Adjusted DAS transfer

HP Groups Total landings DAS-used Num. of FT boats

Estimated landings LPUE-est

<600 HP - 84 0 0 1,742 600 -825 HP 4,502,135 87 27 166,746 1,917 850-970 HP 10,694,930 82 63 169,761 2,070 >=1000 HP 24,827,343 169 66 376,172 2,226 Total 40,024,408 18671 156 % Change -0.69%

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Example B: DAS consolidation by 129 vessels, Fishable abundance=2800 Table 18. Adjustment factors for full-time dredges based on the simplified formula

Horsepower of

Horsepower of Buying Vessel

Selling vessel <600 HP 600-825 HP

850-970 HP

>=1000 HP

<600 HP 1.00 0.92 0.86 0.79 600-825 HP 1.00 1.00 0.94 0.86 850-970 HP 1.00 1.00 1.00 0.92 >=1000 HP 1.00 1.00 1.00 1.00

Table 19. Example B: Consolidation of DAS with and without adjustment for fishing power (Full-time dredge vessels only); Adjustment is done according to the production function estimates.

Status Quo

HP groups Total landings DAS-used Num. of FT

boats Estimated landings LPUE-est

<600 HP 5,181,831 84 44 117,769 1,402 600 -825 HP 8,993,583 87 67 134,233 1,543 850-970 HP 8,609,564 82 63 136,660 1,667

>=1000 HP 9,657,473 80 66 146,325 1,829

Total 32,442,452 19971 240

Consolidation Unadjusted DAS transfer

HP groups Total landings DAS-used Num. of FT

boats Estimated landings LPUE-est

<600 HP - 84 0 0 1,402 600 -825 HP - 87 0 0 1,543 850-970 HP 8,609,564 82 63 136,660 1,667

>=1000 HP 26,317,438 224 66 398,749 1,778

Total 34,927,003 19971 129

% Change 7.66%

Consolidation Adjusted DAS transfer

HP groups Total landings DAS-used Num. of FT

boats Estimated landings LPUE-est

<600 HP - 84 0 0 1,402 600 -825 HP - 87 0 0 1,543 850-970 HP 8,609,564 82 63 136,660 1,667

>=1000 HP 23,662,248 200 66 356988 1,783

Total 32,271,813 18437 129

% Change -0.84%

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1.6 SCENARIO ANALYSES WITH CONSOLIDATION AND DAS TRANSFER TAX ON TRANSFERS

Table 20 uses the same example-B with consolidation, where the number of full-time dredge vessels decline from 240 to 129 after the transfers of DAS to the vessels in the largest HP group, resulting in a 7.66% increase in landings without adjustment. If a 10% tax was applied to the number of DAS transferred from one vessel to another, total landings would still increase by about 2.58% and but a 15% tax would prevent an increase in landings in this scenario. One important disadvantage of the DAS tax is that it is applied to all transfers of DAS even if it takes place between vessels with similar HP or from a larger vessel to a smaller vessel.

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Table 20. Example C: Consolidation with 10% and 15% tax applied to DAS transfers (Full-time dredge vessels only)

HP group Total landings DAS-used Number of FT boats

Estimated scallop

landings LPUE-est

<600 HP 5,181,831 84 44 117,769 1,402 600 -825 HP 8,993,583 87 67 134,233 1,543 850-970 HP 8,609,564 82 63 136,660 1,667

>=1000 HP 9,657,473 80 66 146,325 1,829

Total 32,442,452 19971 240

Consolidation Unadjusted DAS transfer

HP group Total landings DAS-used Number of FT boats

Estimated scallop

landings LPUE-est

<600 HP - 84 0 117,769 1,402 600 -825 HP - 87 0 134,233 1,543 850-970 HP 8,609,564 82 63 136,660 1,667

>=1000 HP 26,317,438 224 66 398,749 1,778

Total 34,927,003 19971 129

% Change 7.66%

Consolidation 10% Tax on DAS transfers

HP group Total landings DAS-used Number of FT boats

Estimated scallop

landings LPUE-est

<600 HP - 84 0 117,769 1,402 600 -825 HP - 87 0 134,233 1,543 850-970 HP 8,609,564 82 63 136,660 1,667

>=1000 HP 24,669,637 210 66 373,782 1,781

Total 33,279,202 19019 129

% Change 2.58% Consolidation 15% Tax on DAS transfers

HP group Total landings DAS-used Number of FT boats

Estimated scallop

landings LPUE-est

<600 HP - 84 0 117,769 1,402 600 -825 HP - 87 0 134,233 1,543 850-970 HP 8,609,564 82 63 136,660 1,667 >=1000 HP 23,844,573 203 66 361,281 1,783 Total 32,454,137 18542 129 % Change 0.04%

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