Attendance: Leo Byrnes, S. Edwards, Chris Gaynon, C. Goudey, H. Halvorson, K. Harrison, R. Karney, D. Kimball, A., D. Leavitt, R. Lovett, J. Pearce, R. Smolowitz, R. Taylor.

Welcoming Remarks. Dr. Harlyn Halvorson welcomed the group and expressed the regret that Scott Soares had an emergency which precluded his attendance, however he has submitted a report which will be given later. Dr. Halvorson commented that in view of the cooperative program between Massachusetts, Hokkaido, Japan and Chile, discussed earlier, that SSWG may well be involved. Accordingly we would be very interested in visiting with Dr. Ed Rhodes on the basis of his previous experience with scallops in Chile and with his new role with aquaculture in NOAA. He had a commitment for today but would be happy to join us for our next meeting if we can find a suitable date. Mr. Jack Wiggens has a last minute conflict and will join us in a later meeting.

Area Management Options for Sea Scallops. Dr. Steve Edwards reiterated that these were his own opinions and do not represent the views of NMFS. He described himself as an economist, and a member of Sea Scallop PDT, was involved in the analysis of management plans. He is in a position to offer up economic analysis of where we could be if we managed somewhat better. He described the problems of the present system which requires reduction of effort quotas to regulate overfishing. In attempting to find an alternative which could lead us out of the box imposed by the present system, he proposed an alternative based on area management options for sea scallops (see attachment). To be successful we need to make the industry profitable.

To set the stage, Steve Edwards analyzed the effort and fishing capital in the US Sea Scallop Fishery since the introduction of the Magnuson-Stevens Act of 1976 (Figure 1). As shown since 1996 there was a tremendous (>500%) increase in both the number of vessels and in days at sea (effort). However when one considers the average income / vessel (Figure 2) there is an average decrease of ca. 80% in the landings and income / vessel since the Act was introduced. During this period there was additional financing for new vessels while at the same time profitability per vessel declined. There was no increase of scallop collections from the increased number of vessels. Figure three shows that the gross profit (corrected for vessel financing) declined while at the same time the financing of new vessels increased. At the same time there was no increase in scallop collections from the increased number of vessels. Figure four charts the individual vessel effort quotas in the limited access sea scallop fishery. The period of 1985 to 1990 was used to determine the individual quotas. Over the next 7 years there was a 45% reduction in individuals quotas. In the period of 1985 to 1996 only 40% of the vessels could break even with 142 days at sea allocated. If one considers the sustainable yield, only 40 days would be allocated. This is not sufficient for the fishermen to survive. The industry has been overcapitalized.

In recent months there have been serious discussions in the Council to following the example of closing areas in the Georges Bank to catching ground fish. In particular areas may be subdivided (i.e. Georges Bank and Mid-Atlantic) to generate spawning areas. Dr. Edwards proposed a 5 step approach:
1. Determine geographic boundaries of scallop resource areas.
2. Estimate area-specific initial Total Allowable Catch quotas and corresponding Total Allowable Effort (TAE) quotas.
3. Use area-specific TAEs to prorate Individual Vessel Effort Quotas (IVEQs) to each area. . 4. Individual fishermen barter Days-at-Sea until they have their portfolio.
5. Within each area, fishermen negotiate management plans with each other and NMF/Councils.

Steve Edwards argued that this scheme would provide essential incentives for long term harvest strategies, making this industry more similar to agriculture. Bartering would permit portfolio management and realize the benefits of property rights. Business practices could be done for lobsters for example. Consideration would have to be given to a number of factors, including mineral rights, transportation, etc. He reminded us that area management is not new but is practiced elsewhere in the world.

In the discussion which followed Richard Taylor noted "once the stakeholders are identified for an area the existing management plans would go out the window - they would put together whatever works for them". Steve Edwards agreed but stated that you would have to involve the biology of the resource and habitat requirements the same type of information used at present. In response to Harlyn Halvorson's query as whether he would consider exclusive use of space, Steve Edwards replied yes; large area of the harvest fisheries would be divided for use by several companies. Ron Smolowitz noted that in the wild capture fisheries, fishermen move to areas with promise. He considered the conclusion of too many vessels as too simplistic. It would be more appropriate to enhance the population of marine animals. Richard Taylor said you should confine people to an area and then have your business decision based upon your perception of what is going on and with the results of your activities. Rick Karney called attention to the paper by Dr. Hiroshi Ito (see attachments) which showed that the effective improvement of manpower founded on a science was the essential element for the successful improvement of scallop culture. Dale Leavitt agreed that the nature of the beast is fisheries, and asked how does this concept come up through the ranks for decisions? Steve Edwards noted that the Scallop Advisory Sub-committee was asked to consider this. Eventually the decision will be driven by industry. This is the way property rights evolve. There is some support in the sub-committee. Ron Smolowitz agreed that the first priority is to define areas and force people to look at geography. The habitat process is driving this at the moment. The Fisheries assessment does not identify the important spawning and seeding areas. What are the areas that have traditionally good production? The rubicon was crossed in the Westport Project by establishing a framework of management areas. Your program to subdivide allows a number of different entities to try different methods independently. Everyone sees what works and can sign into these. If you give them some co-management they now will have some ownership of the area. Steve Edwards responded that management is now considering closing of some areas for short periods to obtain fishing goals. Jack Pearce reminded us that large populations of marine animals exist because of large amounts of nutrients. Significant research exists to relate oyster and mussels populations to phytoplankton. He predicts that some day we will be managing according to what is being carried into an area by currents. However this can vary, and every few years something like El Nino could change this. Soon we will need fences in the ocean, as we had for agriculture, and these will be controlled by scientific management. Kim Harrison compared sea scallops fishing as more akin to fencing birds than bison. Scallops move. Jack Pearce agreed but it was the young - not adults - that moved. He further suggested that when we had significant expenditures for scallop seed that in agriculture we will need advisors.

Request to NEFMC to Extend Lease for Seastead Site. Mr. Ron Smolowitz pointed out that the closed areas is part of the amendment to the sea scallop plan of Feb. 13, 1997 and ends in October 1998. A letter has been sent to the Council recommending extension of the lease for the site (now called Seastead) for 3 years to complete research on aquaculture and habitat sites. Its governance would be by a committee similar to the present project and involve SSWG or some similar body. This request would open up a simplified permitting process for investigators to use the site. This request is on the agenda for the DPT Committee meeting on Thursday March 13th. The only concern was that this would open the door for future continuations. Since there is no objection from the Vineyard fishermen, and none of the original concerns were valid, extension would be expected. One advantage is that for scientists to get research grants, they first need a permit. Also there is nothing to prevent proprietary research being carried out on the site. The next step would be to go to the Corps of Engineers (COE) for a blanket general permit, the next level for opening up the process. The industry is not against this process. Harlyn Halvorson inquired about the status of a hatchery for sea scallops. Ron Smolowitz replied that there is a problem with spat collecting. Mark Simonitsch got his permit from the COE but had to stay within 1 mile of shore. NMFS commented that they were against any lines in the water so that the spat collectors have to be on the bottom as there are known to be sea turtles in the area. The catch 22 is how do you propose to put spat collectors in the water in Nantucket Sound - which is not an area for right whales? It was also pointed out that COE can shut down the project at any time. The critical need, and this is worldwide, is to get the permits to do the experiments to demonstrate that these concerns are not valid.

Report on Sea Scallop Aquaculture Workshop at WAS Meetings. Dr. Dale Leavitt distributed a program of the session (see attachments). He reported that there were a number of interesting presentations - all the invited paper were excellent. The Canadians are making progress with sea scallop aquaculture. Their hatchery is showing promise and students are working on grow out techniques. A large bottom spat collection is underway. P. magellanicus shows promise of replenishment of wild fisheries. He will be summarizing this information in light of our Blueprint and point out where advances were made and where there are still problems in the next few months. About 100 people attended. It concluded with a good discussion.

Dale Leavitt reported that a new federal initiative for aquaculture ($1.6M in 1999) was announced by Sea Grant in Los Vegas. This will involve a National Competition and already a committee of Sea Grant Directors is deliberating how this will be allocated. One possibility is that this may be restricted to two species, one of which could be sea scallops. Sea Grant is looking for $20M / year for 4-5 years. Kim Harrison that to be more competitive the sea scallop effort should become more regional. Several pointed out that the $1.9M pork appropriation to the Univ. New Hampshire may lead to exclusion of the region from more federal funding.

Mass. State Aq. Update. Mr. Scott Soares was unable to attend. His report is attached.

Boston Public Market. Dr. Harlyn Halvorson reported the plans for the Boston Public Market (see attachments), developed by a NY firm funded by USDA, has identified a preferred 40,000 sq. ft. waterfront site with alternate sites in the Central Artery Parcels 19 and 21. Commissioner Jay Healey has invited anyone interested in serving on a committee to implement outdoor market festivities this summer to phone Janet Christensen at (617) 727-3000 X273.

NOAA Aquaculture Position Paper and Dept. of Commerce Mission Statement. NOAA has requested comment. Dr. Cliff Goudey briefly reviewed both which are included in the appendix. He noted that the NOAA document was preferable to previous versions. However, NOAA recommends a cautionary approach, which has led to previous problems. Ron Smolowitz commented that in his experience the effective goals were established at the local levels. The onus is to develop regional goals. Deirdre Kimball agreed and thought the Dept. focus was on the national rather than the regional level. It was agreed for SSWG to submit comments and Cliff Goudey was selected to chair a subcommittee to bring a draft response to our next meeting.

Vessel Set-aside Days. Mr. Ron Smolowitz reported on his recent proposal to NEFMC. The largest cost in the Westport Project was vessel expense (worth $5,000 per scallop fishing day). If only a portion (1%) of the 40,000 days at sea were set aside for research this would liberate 400 days. Any vessel participating in scallop research would be compensated with a fishing day. Since at present many of the days at sea are not used, this is a method to reduce the cost of research and could be applied to each management plan. He considered the priorities in the Scallop Management Plan to be: seeding strategies, spawning feed protection and new harvest technologies. Rich Karney noted that W. Coast fishermen used bycatch to support research.
Legal Considerations. Mr. Leo Byrnes called attention to the recent article in the Cape Cod Times (see attachments) about flounder aquaculture. This success story follows many lawsuits and threat of law suites to obtain the permissions for this aquaculture project. He went on to a conversation with Ted Brady of CZM concerning an intertown task force Management Plan for Pleasant Bay Area Critical Environment Concerns that would ban any new aquaculture ventures in this area. He was concerned that other critical concern areas, which are also prime sites for aquaculture as Barnstable Harbor, coastal areas of Wellfleet and Eastport, etc., would also be closed. Truman Hansen of CZM reported that the moratorium will be in place for one year until the assessment is complete, then for another year for implementation. While the argument is given that in the long run this will help aquaculture by showing that there are no significant impacts, Leo Byrnes is concerned over delays in order to complete the study. He reports that the agency is aware of the conflict of this protection to the stated objectives of CZM.

Jack Pearce called to our attention the enclosed article from the New York Times in which aquaculture via hydroponics can be conducted on suburban wastelands.

Coming Meetings.
March 12, 1998. NEFMC Meeting Marriott, Peabody. Discuss lease extension on Seastead Project.
June 22-27, 1998. Marine Aquaculture Emerging Technologies Stanford, Connecticut.
November 17-18, 1998. Joint NRAC - Maine Aq. Innovation Center Meeting at Rockport, Maine
Kim Harrison said that this would be an opportunity to address priorities for NRAC funding. SSWG may want to meet here. There will be a trade show at the same time, followed (Nov 20th) by a NRAC Industry Summit Meeting.
November 1998. International Shellfish Conference on Shellfish Restoration. Helsinki.
1999. International Shellfish Association Meeting. Halifax, Nova Scotia.
Spring 2000. National Shellfish Association Meeting Seattle.

Next Meeting The next of SSWG will be held at 9:30 AM Tuesday April 24th. at CCEDC, Hyannis. Dr. Ed Rhodes will joining us. Agenda to follow.

Harlyn Halvorson
March 9, 1998