Department of Marine Resources
Lobster Advisory Council Meeting Minutes
Natural Resources Service Center
6 Beech Street, Hallowell
July 1, 2009 4:00 pm
A meeting of the Department of Marine Resources’ Lobster Advisory Council was held on this date at the Natural Resources Service Center, 6 Beech Street, Hallowell, Maine. Council members attending this meeting included: Chair Bob Baines (Non-Zone Lobsterman), John Drouin (Zone A), Jon Carter (Zone B), Dan MacDonald (Zone C), Ted Hoskins (General Public Member), Gerry Cushman (Zone D), Larry Knapp (Zone E), Jeff Putnam (Zone F), Jim Henderson (Zone G), Peter McAleney (Western Dealer Member) and Elliott Thomas (Non-Zone Lobsterman.) Members not present included: Dana Rice, (Eastern Dealer) and Nick Lemieux (Non-Zone Lobsterman), Commissioner George Lapointe, Deputy Commissioner David Etnier, Deirdre Gilbert, Sarah Cotnoir, Colonel Joe Fessenden, Carl Wilson, Melissa Smith, Kathleen Reardon, Linda Mercer and Donna Hall of the Department of Marine Resources were also present. Others present were: David Cousens, Patrice McCarron, Gina LeDuc, John Norton, Jim Wotton, Ernest Wallace, Doug McLennan, Wayne Canning, David Black, Hanna Wheeler, Michael Dawson, Robert Morris, Donald Young, Dan Staples, Jay Trenholm, John Higgins, Tik-sang Liu, Jim Acheson, Rep. Bruce MacDonald, Senator Dennis Damon and Dane Somers from the Maine Lobster Promotion Council.
The meeting convened at 4:10 p.m.
1. Welcome and Review of Agenda
2. Approval of Minutes (May 28, 2009)
MOTION: (E. Thomas and J. Carter) To accept the minutes of the May 28, 2009 meeting as written. Unanimous
3. New Business
a. Update on Tiered License System Sub-Committee
The Lobster Advisory Council Chairman Bob Baines read aloud the report from the Tiered License System Sub-Committee as follows:
At the October 27, 2008 meeting of the Lobster Advisory Council, the Council voted to create a subcommittee to explore the concept of a tiered license system for the Maine lobster fishery. The subcommittee met several times between November 2008 and June 2009.
A tiered license system would result in different trap limits (perhaps as many as three) for license holders, based on either their past participation in the fishery (tags purchased and/or landings) or their dependence upon the fishery for their livelihood (income). The subcommittee reviewed all the methodologies that could be used as the criteria to decide into which tier existing license holders would be placed, before developing their recommendation.
The subcommittee thoroughly investigated the idea of using income earned from lobstering or commercial fishing as the basis for their tiers. For example, the criteria could be that an individual would have to document that at least 50% (or 66%) of their income came from lobstering/commercial fishing in order to qualify for the highest tier. The subcommittee discussed using DMR, Maine Revenue Services (MRS), or a Certified Public Accountant (CPA) to verify the information that a license holder provided. The subcommittee met with Sara Lewis and Dennis Hopkins of Maine Revenue Services, and Pete Dufour, a CPA to determine how this could work.
Using an income based criteria that was verified by a state agency (either DMR or MRS) would require additional staff to review and make determinations for 5700+ license holders. License holders could have their eligibility checked and verified by a CPA, but the CPA would charge an additional fee. Not all license holders have their taxes done by a CPA; some do them themselves, others use other tax preparation services. Regardless of who was doing the verification, it was acknowledged that the complexity of how people file their taxes would in many instances make this determination difficult. For instance:
• Separating spouse’s income
• Separating other sources of income (investments, etc)
• Fishermen filing as corporations
• Fishermen catching similar poundage may have very different profit/loss statements
At one point, the subcommittee considered allowing alternative ways to qualify for the top tier – either by proving the income qualification, or by proving the landings qualification. However, the difficulties of administering two potential avenues for qualification, coupled with how complicated the income determination would be, led the Subcommittee to ultimately dismiss the income criteria.
As a result, the subcommittee focused on developing a framework for a tiered system that uses landings information from DMR’s dealer reporting (initiated in 2008) to determine the placement in tiers. At their final meeting on June 11, 2009, the subcommittee came to agreement that if a tiered license proposal should move forward, the following framework is the preferred structure.
Tier A: No landings Eligible for up to 50 tags
Tier B: 1-9,999 lbs Eligible for up to 400 tags
Tier C: 10,000 lbs Eligible for up to 800 tags
Based on the landings data for 2008, the number of license holders in each tier would be as follows:
Tier A: 1580 (28%)
Tier B: 1940 (34%)
Tier C: 2180 (38%)
Total: 5700
The figure of 10,000 lbs was used because it was felt that approximately 50% of the active license holders should be captured in Tier C. However, the threshold to capture 50% of the license holders is different in each zone (see Table 2). In Zones A, B, C, and D, it is higher than 10,000 lbs (therefore a larger percentage of the fishermen in these Zones are captured in the highest tier); in Zones E, F, and G, it is lower than 10,000 lbs. It was suggested that there could be different thresholds for the 2 regions – 10,000 lbs for A, B, C, and D, and 6,500 lbs for Zones E, F, and G.
There was concern that 10,000 lbs may not be a reasonably achievable goal for LCUs – commercial license holders under the age of 18, who may only be fishing in the summer months. The subcommittee recommended that LCUs be placed in Tier C without meeting the landings requirement as a means to address this.
If 10,000 lbs were to be used statewide, nearly 40% of the licenses would be placed in Tier C. These 40% of licenses account for 91% of the landings. By placing current license holders in these tiers, the amount of tags purchased would decrease 21%, and the maximum potential of tags would decrease by 43% from 4.3 million to 2.4 million tags.
There was a concern raised that without some additional measures, individuals in Tier B would automatically ask to be placed on a Tier C waiting list. It was discussed that placement in Tier C could come with greater responsibility in terms of 100% mandatory reporting, as well as higher fees for licenses and/or tags. This would also address data needs raised by the assessment and ensure adequate funding for administrating the tiered system.
The methodology for transitioning between tiers was not finalized. Several subcommittee members felt strongly that the existing entry system should remain intact. This would mean that in the new system, new license holders coming off the waiting list would enter Tier C. In this scenario, it is not clear how individuals would move from Tier B to Tier C.
Alternatively, entry into the fishery could be based on tags retired, as it currently is, with new license holders entering Tier B. Movement to Tier C could occur on a 1:1 basis as individuals currently in Tier C retire their licenses, or drop to a lower Tier. However, subcommittee members had concerns about the impact of two waiting lists on individuals wanting to enter the fishery.
Chair Baines said we are looking to float this out to the industry and see what they think; this plan leaves the entry system in place, if we use either of these systems, plan B is a freeze where you are right now. This is the report we have been looking for and now the Lobster Advisory Council needs to decide what to do with this report. Jon Carter said I missed the last sub-committee meeting, are we using a control date? I think it would almost be necessary. Bob said there is no control date; people could only buy another 100 tags. John Drouin said you either need a control date or do it with a percentage; we need to be careful with a control date because of all the different situations going on out there.
Commissioner Lapointe said if you put a proposal together, the legislature can change it but it does put a stake in the ground. Bob said this is complex; we are looking to get this out and see if the LAC supports the concept; there are a lot of other issues that we haven not thought about. George said if you want legislation in this year you need take it out to the Zone Councils and get back here and make a decision about moving forward. Elliott Thomas said this needs to get industry support. George said we have been discussing this for years. Bob said what we are attempting to do is to look at what we want this fishery to look like in 5 years; some people want no changes, others want changes. Jon Carter said when go out to the Zone Council some fishermen have no concept of what we are trying to do or what are intent was. Gerry Cushman said when we do take this down to the zone level and we don’t get a control date; we are taking a big gamble because the Legislature doesn’t always agree with us.
MOTION: (J. Carter and L. Knapp) To take the Tiered License Proposal out to the industry for feedback, Unanimous.
Jeff Putnam asked who the point person is at DMR for people to check on their landings. Carl Wilson said to call Heidi Bray. Bob said it is up to fishermen to check on there landings reported by dealer. Larry Knapp asked if when we have Zone Council meeting can we have data. Sarah Cotnoir said licenses are going down but tags are going up. Larry asked why the tags aren’t going down. David Etnier said looking back to 1997- licenses sales had gone down 8% but tags are up by 20%. Gerry said this data shows that 1580 licenses not being used. Larry suggested we give this information to the whale people.
Ted Hoskins said I have many questions; if we take this out to the Zone Councils you need to be prepared to answer people’s questions at these meetings. Gerry said that is our job; I called people and they are here. Jon Carter said I don’t think we have to have all the answers; we just need to see if we have support to move this ahead to the Legislature, I would rather see something Statewide than zone by zone. Donnie Young asked if the sub-committee considered college students; we should not send a signal to take time off from college to get their landings up.
John Norton asked if the current system going to stay in place; if not this could have a big impact in this industry.
Commissioner Lapointe said we had a meeting yesterday and one of the questions was; what do we want this fishery to look like in 5 years. We may possibly be looking at reductions from 800 to 600, looking at real effort reduction, people have mentioning the whale rules. If we wait for NMFS we will be in trouble, we need to consider this it as it will be discussed in 2011.
George said he had some other proposals as well that he would like to discuss along with the recommendations from the tiered license subcommittee that he would like to also put out:
Proposal C (DMR)
o Create a tiered license framework as described in Proposal A
o Reduce the trap limit for Tier B from 400 to 300 and the trap limit for Tier C from 800 to 600, over 5 years.
Proposal D (DMR)
o Create a simplified, 2-tiered system.
o Individuals with no landings eligible for 50 tags
o Individuals with landings eligible for 800 tags, building down to 600 in 5 years
o All new entrants can only build to 600
Conversations about methods to reduce effort in the fishery have included people’s ideas about how this could be done most equitably. One such idea is through a tiered license system. A tiered license system is intended to address the concern that any future trap reductions don’t just impact those who rely on lobstering for their income (example, individuals fishing 800 traps are forced to reduce, while other individuals can continue to build up.) Tiered license systems are also viewed as a way to address latent effort in the fishery (licenses and tags not currently being used) that could become active. A tiered license system would result in different trap limits for license holders, based on their past participation in the fishery.
George said our goal is to keep people’s eye on the goal of the real issues out there so we can get input so we don’t continue this discussion forever. John Drouin asked what about people that have no landings what happens to them?
George said they will be stuck there forever. John said now that is clarified, you know that fishermen are creative; I fear that we could have a watered down landings program. George said we will never have an iron clad system; those kinds of things are going to happen; it will move politically for sure, we will not cover every scenario. Jon carter asked the Commissioner with your proposal to take people down to 600 traps; do you think we will get credit from the whale people if we do this, we know they want a reduction.
MOTION: (E. Thomas and J. Carter) To take the Commissioner’s trap reduction proposal out to the industry for feedback. 10 in favor, 1 opposed.
b. Lobster Task Force Update
Commissioner Lapointe said the Governor’s Task Force on the Economic Sustainability of Maine’s Lobster Industry held their last meeting on today just a few hours ago, to discuss their final recommendations to the Governor’s office. Their recommendations were drawn from the report prepared for them by the Moseley Group, and submitted to the Task Force in its final form in June 2009.The full report is available on DMR’at:http://www.maine.gov/dmr/council/eslobster/index.htm
Highlights of the Task Force recommendations include:
New Lobster Marketing and Research Entity – Maine must develop a new public-private institution with significant funding at $10 million annually that focuses on broad industry marketing and research priorities. Currently, the success of the Maine lobster industry is hindered by fragmentation amongst the various sectors. The existing marketing arm of the Maine lobster industry has been chronically under-funded and its governance structure is ineffective due to the strong rivalries within the industry. Research into critical questions about the future sustainability of the resource are similarly scattered among many organizations with little coordination. This new entity would consolidate the efforts of existing fragmented support organizations within the lobster industry and provide a unified vision to implement a business plan for the benefit of the industry as a whole. This entity would manage the investments in marketing and prioritize scientific research required for developing the Maine lobster brand.
Strategic Innovation Investment Strategy – Maine must develop a strategic investment strategy to encourage innovation for the Maine lobster industry and ensure that the Maine lobster brand is able to effectively compete in the increasingly competitive world marketplace. Investments should be geared towards the establishment of a new marketing institute; protecting, developing and nurturing and the Maine lobster brand; research and development aimed at product innovation and differentiation; and the development of new infrastructure in transportation and holding. This strategy must leverage commitments from Maine lobster harvesters, dealers and processors, the state of Maine and the federal government.
Many have raised the issue of strategic investment in increased Maine-based processing capacity to stem the sales of upwards of 50% of Maine’s annual lobster harvest to Canadian processing plants, thereby keeping jobs in Maine, and preventing Maine lobster from becoming “Product of Canada.” However, there currently exists considerable idle capacity in Maine and Canadian plants. The road to enhancing and expanding Maine-based lobster processing is through building demand for Maine Lobster branded products and developing innovative, distinctively new products.
Creation of a new Marketing and Research entity will require Legislative action, so the Department will be bringing a bill forward this coming Legislative session, for their review.
Also for this fall, the Task Force has recommending doing a pilot of the Maine Lobster Harvest campaign, also recommended in the Moseley report. The idea is that Maine must immediately engage in penetrating new markets in East coast metropolitan areas to bolster demand in order to stabilize the price. This campaign will educate consumers on Maine’s peak harvest season which occurs during the fall months and emphasize themes critical to the Maine brand.
In addition, the Task Force has recommended some additional work on other concepts to increase harvester profitability. This will include further research on such topics as implementing best practices for product handling, trap limits, shifting lobster supply to gain market advantage, establishment of a pilot co-op program, and contract pricing in addition to other reforms which may be identified in the course of this research.
The Lobster Research, Education, and Development (RED) Board has recommended making up to $300,000 from the RED fund (capitalized through the sale of the lobster license plates) to advance the Task Force recommendations. The Governor will name a Transition Team, working in partnership with industry advisors, to oversee the implementation of the Task Force recommendations.
Patrice McCarron, Executive Director of the Maine Lobstermen’s Association (MLA) and a member of the Lobster Task Force said the only thing she would add is, it emphasized about Maine branding their lobster. Jon Carter asked there was any mention of transparency within the dealer/harvester relationship. George said there was some discussion. Jon said it was brought up on the RED conference call. It was mentioned that you could go get contracts, so you would know what you will get; there is not a lot of trust between the two.
Pete McAleney said they started this talk in Canada; we need to get this business back on an even keel. They talked about Father’s Day-to push lobster, a lot of supermarket chains to move lobster, then the price went up but that is just business; the thing that bothers me the most is, unless there is a holiday people don’t buy lobster, we had a good meeting in Canada. George said the Lobster Task Force looked at big ideas. Patrice said it is one of the concepts that were listed under the harvester profitability.
4. Reports and Updates
a. DMR Updates
o Legislative Update
Deputy Commissioner David Etnier gave the Lobster Advisory Council an update on pending DMR Legislation that was enclosed in their handouts and stated that the new laws go in to effect on Sept 12th. LD 246 has many changes to lobster violations; the Owner Operator piece will go into effect in January 2010. There will be a Lobster Newsletter coming out and it will include all the new laws; Marine Patrol will use its discretion.
Col. Joe Fessenden said violations after September 12th will have the new penalty. With the Owner Operator part of the law, we will make contact with those people and tell them they can’t do this anymore. We are working on a pretty significant new policy and will get that out to Officers. Marine Patrol in Hallowell will deal with more difficult issues.
David said the Salt water bills were carried over until next session. The key things to remember there is; there are over 200, 000 people that will have to be registered in 2010 that will now have a law that will apply to them. Marine Patrol will have to enforce this and if we do not get more money for enforcement it will take away from time spent on work done on lobster enforcement.
David also reported that LD 1009, "An Act to Allow Lobster License Exemptions to Fishermen with Certain Medical Criteria," passed with language being added that the condition of MS during certain years and the bill has a sunset clause. LD 1128, "An Act to Allow Family Members of an Island Community to Share a Lobster and Crab Fishing License," did not pass. David thanked council members and fishermen who came to the Marine Resource Committee to testify during this session.
George said that the consolidation issue is not going to happen this year but it will be back; we have been asked to look at efficiencies and come up with 30 million in savings. Patrice stated the Department of Marine Resources does good work with the MRC and needs to be thanked for their efforts.
o Patrol Update
Col. Joe Fessenden said he wanted to thank the LAC and members of the industry for their support with the license fee increase; without it we would have to lay off 3 people. He also praised the good work of the Marine Resource Committee and Senator Damon.
Fessenden reported that the Maine Marine Patrol was in the process of educating lobstermen about sink line compliance. Marine patrol officers are seeing compliance, but some lobstermen are concerned they put in the effort to switch over while other lobstermen have not. We will be turning boats around who are not in compliance. We have issued some tickets; we have seen 100% compliance in some areas and less than that in other areas.
Joe said we are taking enforcement action about compliance issues with trap tags and working with fishermen with trap tag loss.
David Etnier said we had a meeting last week with Marine Patrol, Jeff Rushlow from the Attorney General’s Office and our staff about the fall out of a bad case in Friendship that upset the fishermen. Marine Patrol and the DMR we are working on all options, reviewing of licensing boards and flushing things out the best we can. We are going to take the ideas to the MRC; we will give you updates as they come along.
o MSC Update
Commissioner Lapointe said the Maine Stewardship Council will be issuing a preliminary report within the next couple of months.
o Rulemaking
David Etnier said in your packets you have some proposed rule-making on Chapter 25.45 Dragged Crab as a By-catch. This regulation would impact commercial fishing license holders who use an otter trawl in the exclusive economic zone by allowing the take and landings of crab species by-catch. The DMR seeks to implement these measures to insure biological sustainability of these crab species.
5. Set Next Meeting Date and Agenda
The date for the next Lobster Advisory Council meeting will be after all Zone Councils meet to discuss the Tiered License Proposal; sometime in early August.
Meeting adjourned 7:20 pm
