Our View: Buying Back Crab Licenses Is A Sound Investment -- But Only A Start

August 19, 2009

First, let us offer these two words of response to that unknown waterman who recently offered to sell his license to catch Chesapeake Bay blue crabs to the Maryland Department of Natural Resources for $425 million:

Nice try.

Whether submitted in protest or humor, the bid only underscores the peculiar dynamics of the state attempting to buy back limited commercial crabbing licenses. Crabbing on a commercial level is a privilege, not a right. The state could just as easily stop renewing them and then 3,676 license-holders would be out of luck - and taxpayers would save about $3 million.

But the reality is more complicated. The reason why $3 million in emergency federal aid for the buy-back program will be well-spent can be summarized in two other words, "latent effort."

The preservation of the blue crab is in the economic interests of all Maryland residents. It is to Maryland what the lobster is to Maine, not just a local seafood delicacy but a recreational and tourism draw. The humble creature is tied to our very identity.

If government is to be busily (and expensively) engaged in programs to restore crab habitat, improve water quality or enforce catch limits to restore the crab population, the last thing we need is for those shellfish to all be caught the moment any rebound begins.

Yet the fact that there are so many inactive license-holders suggests that very possibility. Right now, the estimated 1,200 or so people with limited commercial crab licenses who actually go out each day to run trot lines or set up to 50 crab pots already account for 18 percent of an annual 29 million pound harvest. If the other 2,500 or so inactive license-holders were to suddenly join in, the impact could prove devastating. That's the so-called latent effort.

DNR's recent attempt to buy them back by reverse auction was not particularly successful. Too few bids were received. But the results do suggest there are hundreds of licensees willing to sell at the agency's now-established price of $2,260.

Purchasing them outright allows the state to diminish latent effort in a reasonable way. Rescinding inactive licenses is not practical (unless DNR starts breeding enforcement personnel as fast as sooks produce larvae, the agency will never have the manpower to check each licensee's status).

Of course, buying back licenses can't be the only way the state attempts to revive the blue crab. The DNR will need to continue restrictions on the harvest of females, for instance, until there are sufficient signs that juvenile crabs have become more abundant.

It would also be reasonable to set stricter catch limits on the limited license holders. Another possibility is to raise their $60 renewal fee substantially - and thereby give crabbers an even greater incentive to sell their licenses back to the state.

In the meantime, license holders would be wise to pay heed to the federal cash for clunkers program and apply for the buy-back sooner rather than later.

Future funding is uncertain at best. The federal grant can pay for 1,327 buybacks, and after that the tide of taxpayer generosity is likely to ebb in these challenging economic times.

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