Crab License Buyback Fails

Sun Exclusive

Bids Too Few, Prices Too High, State Says, Planning Take-it-or-leave-it Offer

August 17, 2009|By Timothy B. Wheeler | Timothy B. Wheeler,tim.wheeler@baltsun.com

Maryland's pioneering effort to conserve Chesapeake Bay blue crabs by buying back commercial crabbing licenses has come up short, state officials say. Too few crabbers were willing to sell, they say, and too many of those who were asked for too much - up to $425 million in one case.

"We didn't get the participation we wanted, so we're well short of the goal we wanted to achieve," said Lynn Fegley, assistant fisheries director at the Department of Natural Resources.

So state officials have decided to reject all 494 bids they received in the state's first-ever Priceline-style "reverse auction." Instead, the state plans to counter with a firm offer of $2,260 - take it or leave it.

Worried that a sudden resurgence in commercial crabbing could jeopardize the recovery of the bay's crab population, state officials want to reduce the number of people able to catch large quantities of them for sale. The DNR mailed notices last month to all 3,676 holders of "limited crab catcher" licenses, asking them to name the price at which they'd be willing to sell their annual, renewable permits.

Though such reverse auctions have been used in a few other states to buy back fishing licenses or gear, this was the first attempt in Maryland.

The DNR had hoped to be able to retire roughly 2,000 licenses. But the state received fewer than 500 responses by its July 31 deadline. And after evaluating the bids, state officials concluded that only about a fourth had quoted prices the department was willing to pay, said Fegley.

The quoted prices ranged from $30 - half the annual fee for the permit - to the multimillion-dollar offer, Fegley said, which officials regard as a joke or a protest.

"I think a certain percentage get upset with any attempt by DNR to restrict what is perceived as a right to fish," said Douglas Lipton, a University of Maryland economist who specializes in the fishing industry. He and Geret DePiper, a graduate student, helped the DNR with the auction.

State officials say they're not sure why more crabbers didn't respond to their buyback offer. Lipton said his graduate student hopes to survey crabbers over the next month to get a better idea.

The economist suggested that active crabbers who didn't want to sell might have submitted high bids they knew wouldn't be accepted, or simply didn't respond.

Even so, Lipton said there were only a few bids he considered "exceptionally high."

"Some probably didn't understand or trust the auction process, and some stayed away in protest," Lipton said in an e-mail.

State officials say that although there are 6,000 commercial crabbing licenses of all types, only about 1,800 are actively fished.

Lipton said some license holders may be hanging onto them to give or sell to a relative or friend. Others may be waiting for retirement or to see if crabbing becomes more reliably lucrative again.

That's just what state fisheries officials fear, as the bay's crab population recovers from several years of dangerously low levels. Although a survey last winter found crab numbers had rebounded significantly in the wake of stringent catch restrictions put on commercial crabbers in Maryland and Virginia, scientists say the population has not fully recovered and remains vulnerable to overfishing again should there be a sudden upsurge in fishing activity.

The DNR had proposed "freezing" more than 1,000 unused commercial crabbing licenses last winter, but withdrew that after being confronted with protests.

Fegley said the auction wasn't a waste, because the responses let the DNR and its consultants settle on what it considers a fair market value for the limited crab catcher license. The renewable permit, which costs $60 a year, allows the holder to deploy up to 50 wire-mesh "pots" or an unlimited amount of baited line to catch crabs for sale.

Earlier, state officials had said if they didn't get enough bids, they'd move to put new restrictions on the remaining inactive commercial licenses - freezing them as proposed before, perhaps, or barring the catch of female crabs and the practice of transferring licenses.

For now, though, the state intends to send out a new batch of letters offering $2,260 to all of the nearly 3,700 license holders targeted by the auction, Fegley said. Letters are to go out by Friday. The state has $3 million in federal funds it plans to use to buy back licenses, Fegley said.

"By establishing a fixed sales price for an LCC license we can now eliminate uncertainty for the license holder," DNR Secretary John Griffin said in a statement. "We feel that this course of action will ultimately get us closer to achieving our goal."

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.