The Annual Economic Survey of Federal Gulf Shrimp Permit Holders: Report on the Design, Implementation, and Descriptive Results for 2006

This technical memorandum documents the design, implementation, data preparation, and descriptive results for the 2006 Annual Economic Survey of Federal Gulf Shrimp Permit Holders. The data collection was designed by the NOAA Fisheries Southeast Fisheries Science Center Social Science Research Group to track the financial and economic status and performance by vessels holding a federal moratorium permit for harvesting shrimp in the Gulf of Mexico. A two page, self-administered mail survey collected total annual costs broken out into seven categories and auxiliary economic data. In May 2007, 580 vessels were randomly selected, stratified by state, from a preliminary population of 1,709 vessels with federal permits to shrimp in offshore waters of the Gulf of Mexico. The survey was implemented during the rest of 2007. After many reminder and verification phone calls, 509 surveys were deemed complete, for an ineligibility-adjusted response rate of 90.7%. The linking of each individual vessel’s cost data to its revenue data from a different data collection was imperfect, and hence the final number of observations used in the analyses is 484. Based on various measures and tests of validity throughout the technical memorandum, the quality of the data is high. The results are presented in a standardized table format, linking vessel characteristics and operations to simple balance sheet, cash flow, and income statements. In the text, results are discussed for the total fleet, the Gulf shrimp fleet, the active Gulf shrimp fleet, and the inactive Gulf shrimp fleet. Additional results for shrimp vessels grouped by state, by vessel characteristics, by landings volume, and by ownership structure are available in the appendices. The general conclusion of this report is that the financial and economic situation is bleak for the average vessels in most of the categories that were evaluated. With few exceptions, cash flow for the average vessel is positive while the net revenue from operations and the “profit” are negative. With negative net revenue from operations, the economic return for average shrimp vessels is less than zero. Only with the help of government payments does the average owner just about break even. In the short-term, this will discourage any new investments in the industry. The financial situation in 2006, especially if it endures over multiple years, also is economically unsustainable for the average established business. Vessels in the active and inactive Gulf shrimp fleet are, on average, 69 feet long, weigh 105 gross tons, are powered by 505 hp motor(s), and are 23 years old. Three-quarters of the vessels have steel hulls and 59% use a freezer for refrigeration. The average market value of these vessels was $175,149 in 2006, about a hundred-thousand dollars less than the average original purchase price. The outstanding loans averaged $91,955, leading to an average owner equity of $83,194. Based on the sample, 85% of the federally permitted Gulf shrimp fleet was actively shrimping in 2006. Of these 386 active Gulf shrimp vessels, just under half (46%) were owner-operated. On average, these vessels burned 52,931 gallons of fuel, landed 101,268 pounds of shrimp, and received $2.47 per pound of shrimp. Non-shrimp landings added less than 1% to cash flow, indicating that the federal Gulf shrimp fishery is very specialized. The average total cash outflow was $243,415 of which $108,775 was due to fuel expenses alone. The expenses for hired crew and captains were on average $54,866 which indicates the importance of the industry as a source of wage income. The resulting average net cash flow is $16,225 but has a large standard deviation. For the population of active Gulf shrimp vessels we can state with 95% certainty that the average net cash flow was between $9,500 and $23,000 in 2006. The median net cash flow was $11,843. Based on the income statement for active Gulf shrimp vessels, the average fixed costs accounted for just under a quarter of operating expenses (23.1%), labor costs for just over a quarter (25.3%), and the non-labor variable costs for just over half (51.6%). The fuel costs alone accounted for 42.9% of total operating expenses in 2006. It should be noted that the labor cost category in the income statement includes both the actual cash payments to hired labor and an estimate of the opportunity cost of owner-operators’ time spent as captain. The average labor contribution (as captain) of an owner-operator is estimated at about $19,800. The average net revenue from operations is negative $7,429, and is statistically different and less than zero in spite of a large standard deviation. The economic return to Gulf shrimping is negative 4%. Including non-operating activities, foremost an average government payment of $13,662, leads to an average loss before taxes of $907 for the vessel owners. The confidence interval of this value straddles zero, so we cannot reject, with 95% certainty, that the population average is zero. The average inactive Gulf shrimp vessel is generally of a smaller scale than the average active vessel. Inactive vessels are physically smaller, are valued much lower, and are less dependent on loans. Fixed costs account for nearly three quarters of the total operating expenses of $11,926, and only 6% of these vessels have hull insurance. With an average net cash flow of negative $7,537, the inactive Gulf shrimp fleet has a major liquidity problem. On average, net revenue from operations is negative $11,396, which amounts to a negative 15% economic return, and owners lose $9,381 on their vessels before taxes. To sustain such losses and especially to survive the negative cash flow, many of the owners must be subsidizing their shrimp vessels with the help of other income or wealth sources or are drawing down their equity. Active Gulf shrimp vessels in all states but Texas exhibited negative returns. The Alabama and Mississippi fleets have the highest assets (vessel values), on average, yet they generate zero cash flow and negative $32,224 net revenue from operations. Due to their high (loan) leverage ratio the negative 11% economic return is amplified into a negative 21% return on equity. In contrast, for Texas vessels, which actually have the highest leverage ratio among the states, a 1% economic return is amplified into a 13% return on equity. From a financial perspective, the average Florida and Louisiana vessels conform roughly to the overall average of the active Gulf shrimp fleet. It should be noted that these results are averages and hence hide the variation that clearly exists within all fleets and all categories. Although the financial situation for the average vessel is bleak, some vessels are profitable. (PDF contains 101 pages)

National Centers for Coastal Ocean Science (NCCOS) research highlights in the Chesapeake Bay

The Chesapeake Bay is the largest estuary in the United States. It is a unique and valuable national treasure because of its ecological, recreational, economic and cultural benefits. The problems facing the Bay are well known and extensively documented, and are largely related to human uses of the watershed and resources within the Bay. Over the past several decades as the origins of the Chesapeake’s problems became clear, citizens groups and Federal, State, and local governments have entered into agreements and worked together to restore the Bay’s productivity and ecological health. In May 2010, President Barack Obama signed Executive Order number 13508 that tasked a team of Federal agencies to develop a way forward in the protection and restoration of the Chesapeake watershed. Success of both State and Federal efforts will depend on having relevant, sound information regarding the ecology and function of the system as the basis of management and decision making. In response to the executive order, the National Oceanic and Atmospheric Administration’s National Centers for Coastal Ocean Science (NCCOS) has compiled an overview of its research in Chesapeake Bay watershed. NCCOS has a long history of Chesapeake Bay research, investigating the causes and consequences of changes throughout the watershed’s ecosystems. This document presents a cross section of research results that have advanced the understanding of the structure and function of the Chesapeake and enabled the accurate and timely prediction of events with the potential to impact both human communities and ecosystems. There are three main focus areas: changes in land use patterns in the watershed and the related impacts on contaminant and pathogen distribution and concentrations; nutrient inputs and algal bloom events; and habitat use and life history patterns of species in the watershed. Land use changes in the Chesapeake Bay watershed have dramatically changed how the system functions. A comparison of several subsystems within the Bay drainages has shown that water quality is directly related to land use and how the land use affects ecosystem health of the rivers and streams that enter the Chesapeake Bay. Across the Chesapeake as a whole, the rivers that drain developed areas, such as the Potomac and James rivers, tend to have much more highly contaminated sediments than does the mainstem of the Bay itself. In addition to what might be considered traditional contaminants, such as hydrocarbons, new contaminants are appearing in measurable amounts. At fourteen sites studied in the Bay, thirteen different pharmaceuticals were detected. The impact of pharmaceuticals on organisms and the people who eat them is still unknown. The effects of water borne infections on people and marine life are known, however, and the exposure to certain bacteria is a significant health risk. A model is now available that predicts the likelihood of occurrence of a strain of bacteria known as Vibrio vulnificus throughout Bay waters.

Channel Islands Deep Water Monitoring Plan Development Workshop Report April 26-27, 2005 University of California, Santa Barbara

In 2003, twelve marine protected areas were established in state waters (0-3 nmi) surrounding the Channel Islands. NOAA is considering extending this network (3-6 nmi) into deeper waters of the Channel Islands National Marine Sanctuary (CINMS). In order for effective long-term management of the deep water reserves to occur, a well-structured monitoring program is required to assess effectiveness. The CINMS and the National Marine Sanctuary Program (NMSP) hosted a 2-day workshop in April 2005 to develop a monitoring plan for the proposed federal marine reserves in that sanctuary. Conducted at the University of California at Santa Barbara, participants included scientists from academic, state, federal, and private research institutions. Workshop participants developed project ideas that could answer priority questions posed by the NMSP. This workshop report will be used to develop a monitoring plan for the reserves. (PDF contains 47 pages.)

Approaches and frameworks for management and research in small-scale fisheries in the developing world

Commonly adopted approaches to managing small-scale fisheries (SSFs) in developing countries do not ensure sustainability. Progress is impeded by a gap between innovative SSF research and slower-moving SSF management. The paper aims to bridge the gap by showing that the three primary bases of SSF management--ecosystem, stakeholders’ rights and resilience--are mutually consistent and complementary. It nominates the ecosystem approach as an appropriate starting point because it is established in national and international law and policy. Within this approach, the emerging resilience perspective and associated concepts of adaptive management and institutional learning can move management beyond traditional control and resource-use optimization, which largely ignore the different expectations of stakeholders; the complexity of ecosystem dynamics; and how ecological, social, political and economic subsystems are linked. Integrating a rights-based perspective helps balance the ecological bias of ecosystem-based and resilience approaches. The paper introduces three management implementation frameworks that can lend structure and order to research and management regardless of the management approach chosen. Finally, it outlines possible research approaches to overcome the heretofore limited capacity of fishery research to integrate across ecological, social and economic dimensions and so better serve the management objective of avoiding fishery failure by nurturing and preserving the ecological, social and institutional attributes that enable it to renew and reorganize itself. (PDF contains 29 pages)

Developing effective restoration plans to tackle the widespread impairment of coastal swimming and shellfishing waters

Congress established a legal imperative to restore the quality of our surface waters when it enacted the Clean Water Act in 1972. The act requires that existing uses of coastal waters such as swimming and shellfishing be protected and restored. Enforcement of this mandate is frequently measured in terms of the ability to swim and harvest shellfish in tidal creeks, rivers, sounds, bays, and ocean beaches. Public-health agencies carry out comprehensive water-quality sampling programs to check for bacteria contamination in coastal areas where swimming and shellfishing occur. Advisories that restrict swimming and shellfishing are issued when sampling indicates that bacteria concentrations exceed federal health standards. These actions place these coastal waters on the U.S. Environmental Protection Agencies’ (EPA) list of impaired waters, an action that triggers a federal mandate to prepare a Total Maximum Daily Load (TMDL) analysis that should result in management plans that will restore degraded waters to their designated uses. When coastal waters become polluted, most people think that improper sewage treatment is to blame. Water-quality studies conducted over the past several decades have shown that improper sewage treatment is a relatively minor source of this impairment. In states like North Carolina, it is estimated that about 80 percent of the pollution flowing into coastal waters is carried there by contaminated surface runoff. Studies show this runoff is the result of significant hydrologic modifications of the natural coastal landscape. There was virtually no surface runoff occurring when the coastal landscape was natural in places such as North Carolina. Most rainfall soaked into the ground, evaporated, or was used by vegetation. Surface runoff is largely an artificial condition that is created when land uses harden and drain the landscape surfaces. Roofs, parking lots, roads, fields, and even yards all result in dramatic changes in the natural hydrology of these coastal lands, and generate huge amounts of runoff that flow over the land’s surface into nearby waterways. (PDF contains 3 pages)

Charts for the rapid estimation of percentages of plants and/or animals in samples

The need to estimate percentages and/or numbers occurs frequently during practical research work; accurate but rapid estimates can be useful when planning research programmes. Charts are provided that may be used as a visual aid to estimating numbers of animals/plants in a specific situation, for example, the number of fish fry in a subsample from a hatchery tank, or the percentage composition of a sample such as the percentage algal cover in a pond.

The Steamer Albatross and Early Pacific Salmon, Oncorhynchus spp., Research in Alaska

The U.S. Fish Commission Steamer Albatross made its first cruise to Alaska in 1888 primarily to research the Pacific cod, Gadus macrocephalus; however, Pacific salmon Oncorhynchus spp., was also to be studied, if time permitted. In 1889, concern for salmon overharvesting prompted Congress to authorize an investigation into the habits, abundance, and distribution of Alaska’s salmon, and in 1890 the Albatross returned to Alaska. Over the next 20+ years the Albatross made many other productive and pioneering research voyages to Alaska, the last in 1914.

Collaborative governance assessment

This Guidance Note presents a simple approach to analyzing the governance context for development of aquatic agricultural systems; it is intended as an aid to action research, and a contribution to effective program planning and evaluation. It provides a brief introduction to the value of assessing governance collaboratively, summarizes an analytical framework, and offers practical guidance on three stages of the process: identifying obstacles and opportunities, debating strategies for influence, and planning collaborative actions.

National summary of NOAA's shallow-water benthic habitat mapping of U.S. coral reef ecosystems

Coral reef ecosystems are some of the most complex and important ecosystems in the marine environment. They are also among the most biologically diverse and economically valuable ecosystems on earth, producing billions of dollars in food, as well as providing a suite of ecological services, such as recreation and tourism activities and coastal protection from storm and wave action. Yet, despite their value and importance, these fragile ecosystems are declining at an alarming rate (Waddell and Clarke (eds.) 2008) due to a myriad of threats both natural and manmade, including climate change, fishing pressure, and runoff and sedimentation. In response, the Unites States Coal Reef Task Force was established in 1998 by Presidential Executive Order 13089 to lead U.S. efforts to preserve and protect the nation’s coral reef ecosystems. In order to better understand the current state of coral reef ecosystems and successfully mitigate the impacts of stressors, informational products, such as benthic (or sea floor) habitat maps, are critical. Benthic habitat maps support the ability to prioritize areas for further study and protection, and offer a baseline to evaluate the changes in ecosystems over time. In 2000, the United States Coral Reef Task Force charged NOAA with leading federal efforts to produce comprehensive digital maps of all U.S. shallow-water (approximately 0 to 30 m in depth) coral reef ecosystem habitats.

Scientific assessment of freshwater harmful algal blooms

In 2004, Congress reauthorized the Harmful Algal Bloom and Hypoxia Research and Control Act of 1998 with the Harmful Algal Bloom and Hypoxia Amendments Act (HABHRCA 2004). The 2004 legislation required the generation of five reports, including this "Scientific Assessment of Freshwater Harmful Algal Blooms." HABHRCA 2004 stipulates that this report 1) examine the causes, consequences, and economic costs of freshwater HABs, 2) establish priorities and guidelines for a research program on freshwater HABs, and 3) make recommendations to improve coordination among Federal agencies with respect to research on HABs in freshwater environments. This report is divided into five chapters: Chapter 1 provides the legislative background and process for developing the report, Chapter 2 describes the problem of freshwater and inland HABs in the United States, Chapter 3 outlines the current Federal efforts in freshwater and inland HAB research and response, Chapter 4 discusses the future research priorities, and Chapter 5 delineates opportunities for coordination to advance research efforts. The document is based, in large part, on the proceedings (Hudnell 2008) of the International Symposium on Cyanobacterial Harmful Algal Blooms, a meeting convened by EPA and sponsored by a variety of Federal agencies, to describe current scientific knowledge and identify priorities for future research on CyanoHABs. This report offers a plan for coordinating the important research that is currently ongoing in the United States and for guiding future research directions for Federal programs as well as for state, local, private, and academic institutions in order to maximize advancements. To this end, the Interagency Working Group on Harmful Algal Blooms, Hypoxia, and Human Health (IWG-4H) identifies seven priorities, all of equal weight, for freshwater HAB research and response. These priorities represent research areas where there is the greatest potential for progress in freshwater HAB research. This report does not attempt to assess the relative importance of freshwater HAB research compared to other research areas or other priorities for Federal or state investment.