Figure 1. Old style Grand Bank cod schooner; crew at rails hand-line fishing. Drawing by H. W. Elliott and Capt. J. W. Collins (NOAA's Historic Fisheries Collection, National Marine Fisheries Service).

Fishing - America’s “first industry” - played major roles in the nation’s economy, society, and politics for roughly three centuries. Cod was the basis of great wealth in New England beginning in 1620 when King James I granted monopoly rights to New England’s salt-cod trade to a consortium of merchants from Plymouth, England (Figure 1). The Pilgrim government used rents from leases to harvest mackerel, bass, and other publicly-owned fishery resources to fund public projects in the colony, including “free schools” beginning in 1671. The treaty negotiations to end the Revolutionary War were conditioned on stipulations that Great Britain would not interfere with fishing. Finally, Spencer Baird, first U.S. Commissioner of Fisheries, reminded Congress in 1873 of the continued economic and social value of fisheries in the Northeast U.S. Continental Shelf Large Marine Ecosystem (NES LME) and the country:

Figure 2. U.S Fish Commission Schooner Grampus, designed specifically for fisheries research and launched in 1886.

“The importance to the United States of the fisheries on its coasts can scarcely be exaggerated, whether we consider the amount of wholesome food which they yield, the pecuniary value of their products, the number of men and boys for whom they furnish profitable occupation, the stimulus to ship and boat building which they supply, and, not the least of all, their service as a school for seamen, from which the merchant marine, as well as the Navy of the country, derive their most important recruits.”

The economic and social importance of the fisheries led to the establishment of the first permanent marine research laboratory in the nation in Woods Hole in 1885.  A fleet of specially designed research vessels was also commissioned to support fisheries research in the region, including the schooner Grampus (Figure 2), whose innovative design also served as a model for fishing vessels and reputedly was the inspiration for Rudyard Kipling’s fishing schooner in Captains Courageous.

Commercial fishing has waned in economic importance relative to other marine and coastal industries over the last half century, but has stayed on the national agenda because of its local importance and cultural influence. The arrival of foreign fleets of factory vessels and catcher boats in the early 1960s galvanized action to protect fisheries and fishing communities from the onslaught as the distant water fleets were “vacuuming the seas of precious life and economic value” (Figure 3). Congress extended U.S. jurisdiction over fish stocks out to 200 nautical miles in the Fishery Conservation and Management Act of 1976. In addition to the Fishery Conservation Zone, the act created a system of regional fishery management councils which were assigned the authority to develop management plans (see Management).

Figure 3. Processing vessel of the distant water fleet and catcher vessels on Georges Bank (NOAA Fisheries Archives)

To illustrate the importance of commercial fishing in the NES LME and adjacent slope waters, we report data on gross dockside revenues (in nominal dollars) and number of fishing permits held by vessels from the years 1964 to 2009.

Combined revenues from oceanic and estuarine commercial fisheries increased six-fold during this period, from less than $200 million when the Magnuson-Stevens Fishery Conservation and Management Act was implemented in 1976 to a peak in 2005 that still holds in 2010 of over $1.4 billion (Figure 4). Gross revenues from shellfish landings far exceed finfish payments dockside, but especially recently. In 2009, shellfish landed revenue was almost $950 million owing primarily to large gains in the Atlantic sea scallop fishery. In fact, sea scallops generated more revenue than lobster for the first time in 2005 when both species hit their highest value to date (Figure 5). The increased worth of scallops was due to access to dense beds of sea scallops inside the groundfish closed areas (first granted in 1999) and to an area management policy that includes scallop areas for growing out large sets of small scallops. Dockside revenue from sea scallops alone was $380 million in 2009, placing it first in the top-10 ranking: sea scallops, American lobster, blue crab, Atlantic salmon, surf clams, menhaden, hard clam, Atlantic cod, Atlantic herring, and ocean quahog. Two of these species are estuarine and, therefore, are not managed by FMPs (blue crabs and hard clams), and Atlantic salmon are cultured mostly in Maine.

Figure 5. Total value of Atlantic sea scallops and American lobster, two important invertebrate fisheries in the NES LME, from 1987 to 2010.

When considered by gear type, lobster pots and traps (high crab catch) produced the greatest amount of total revenue in 2004, followed by otter trawl (a multi-species groundfish fishery) and sea scallop dredges (primarily a single-species fishery). Given the above discussion of results by species, this ordering of gear revenues speaks to the unspecialized nature of fishing gear to catch a variety of species, which is problematical for the single-species approach and managing for economic and social benefits. These three gear types in particular accounted for over half of the region's ex-vessel revenue.

The number of vessels in the region is a rough indication of the amount of fishing capital in the fisheries. In 2009, there were around 5000 vessels actively fishing under federal fishing permits in our region. Combining vessels with their permit ownership provides information that is relevant to ecosystem based management. From the regulator’s standpoint, permit and related data on effort or harvest allocations are important for evaluating latent effort, harvest capacity, and total capitalization, as well as for tracking and measuring the impacts of policies such as limited access and vessel buybacks. However, harvesters see advantages in owning multiple permits which allow them to change gear seasonally or over much longer periods of time in response to income risks that arise from changes in the relative abundances and prices of species, and from regulatory actions to rebuild stocks and protect habitat and bycatch species that constrain some fisheries. The versatility afforded by multiple permits also facilitates adopting technological changes in gear efficiency that change profit options, preserve future options, and maintain qualifications for potential windfall profits in fisheries that adopt rights-based allocations.

The total number of FMP permits issued each year since 1987 is illustrated in Figure 6. The data begin with the year 1987 when permits were renewed annually instead of being issued in perpetuity. (Permits for Atlantic tuna are excluded from the figure because the scale overwhelms other categories.) The total number of permits peaked in the year 1992 at close to 6500 when the New England Council was deliberating qualification for limited access in both the multi-species groundfish and sea scallop fisheries. Although somewhat smaller now due to disqualifications and failures to renew, the total number of unique permits in the region remains around 5000.

Figure 6. Number of vessels issued permits in fisheries managed by the NOAA/National Marine Fisheries Service. The aggregation across fisheries excludes duplication caused by vessels with multiple permits.

This result warrants a closer look at the permit data. Within each permit, there are from 1 to 10 categories. Some indicate limited access versus open access, or recreational versus commercial. Other categories (e.g., lobster) are defined to allow vessels to fish in certain areas. Under some permits it is possible to hold multiple categories (e.g., both recreational and commercial in summer flounder, multiple areas in lobster). Under other permits, categories are mutually exclusive (e.g., Atlantic herring), so that any one vessel can have only one category of permit within that fishery. Counting the different categories as a separate permit we find that half of all permitted vessels (not necessarily active) held at least 7 different permit/category combinations, while 22% of all vessels held more than 13 different permit/category combinations.

To highlight more specifically the opportunities to switch target species, we counted multiple categories within an FMP as only one permit. It is noted, however, that squid, mackerel and butterfish are all grouped together because they are regulated as categories within the single Atlantic mackerel, squid and butterfish permit. More than 1500 vessels had only one permit when examined conservatively, but 2500 of the 6033 vessels were permitted in 2-9 fisheries, and the remaining 2000 vessels had permits in 10 or more fisheries.

The economic contribution of the seafood industry to the overall economy in the northeast extends well beyond simply measuring the income, employment, and dockside sales of commercial harvesting activities. Value-added businesses that distribute and process seafood and retail-level establishments that sell seafood also contribute to the regional economy’s employment and income base. Additionally, beyond these direct effects are the indirect effects that result through intersectoral linkages to non-fisheries sectors. For example, seafood processors purchase goods and services to maintain and operate their facilities, while businesses that provide the goods and services must purchase inputs from their suppliers in order to conduct these transactions. In turn, these suppliers must purchase inputs from their own suppliers, triggering a whole series of additional indirect multiplier effects. This cascading series of industry-to-industry multiplier effects and the cycle of consumption spending induced by all the incomes generated in these economic activities contribute to the economy’s employment and income base and continue until all of the multiplier effects are derived from outside the NES LME.

In an earlier analysis, the economic contribution of the seafood industry in the NES LME was estimated by applying the value of ex-vessel sales in 2003 for three production-based seafood sectors (commercial harvesters, wholesale seafood dealers, and seafood processors) by the appropriate model-generated multipliers. The estimated dockside value of commercial harvesting sales in 2003 was combined with information on applied commercial fishing sector multipliers, the value of wholesale seafood dealer sales, and the value of seafood processing sales. The sum of these three impact assessments is assumed to represent the economic contribution of the seafood industry in the NES LME.

Regional impacts were estimated for sales, personal income, and employment. Sales reflect total dollar sales generated from the production of seafood by commercial harvester, wholesale seafood dealers, and seafood processors. Personal income represents wages, salaries, benefits, and proprietary income generated from the sale of seafood by these three seafood producing sectors. Employment includes both full-time and part-time (including seasonal) workers generated from the production of seafood by the three producing sectors and is expressed as total jobs.

The economic contribution of the seafood industry to the economy in the northeast was estimated to be $5.1 billion in total sales by commercial harvesters. Wholesale seafood dealers and seafood processors in 2003 generated an additional $3.1 billion in indirect and induced sales in the northeast. The total sales of these three seafood producing sectors also resulted in an additional $2.2 billion in income for the NES LME. Of the total income, $1.1 billion was directly received by employees of the commercial harvesting sector, the wholesale seafood dealer sector, and the seafood processing sector. In terms of employment, approximately 76,530 jobs in the northeast were dependent upon the production of seafood by commercial harvesters, wholesalers, and processors (Figure 6).

Recreational fishing is a popular pastime and source of food for many people, and a business for the charter and party boat industry. According to preliminary data published by the NOAA Fisheries’ Marine Recreational Fishing Statistical Survey (Table 1), nearly 5 million anglers fished in the ocean during 2005, either from shore, on private (Figure 8) or rental boats, or by hiring the services of the party boat and charter boat owners. The 41 million pound harvest was led by the private/rental mode (26 million pounds), and split evenly between state and federal waters. Over 80% of the trips were to state waters (4.2 million on shore and 3.7 million on private boats or rentals). Over 90% of the total number of trips was “produced” by the anglers (shore trips and private boats and rentals).

Table 1. Recreational Fishing in the NES LME, 2005. Values are in millions. Data from NOAA/NMFS Marine Recreational Fishing Statistical Survey are preliminary.

Anglers caught bluefish most often (37% of total number of fish), followed by summer flounder (23%), striped bass and scup in equal amounts (13% each), and black sea bass, cod, and haddock (together about 15%). The private boat/rental group caught the majority of these fish (65%); the shore fishing and for-hire fishing caught approximately 17% each.

Species caught varied somewhat by mode. Party boats caught mostly bluefish (26%) and black sea bass (25%), followed by haddock (16%), scup (14%), and cod (11%). The private boat/rental segment targeted summer flounder (29%) and bluefish (27%) but also caught scup (17%) and striped bass (14%). Finally, charter boat passengers caught mostly the gamefish (31% bluefish and 25% striped bass), but summer flounder (18%), black sea bass (11%), and cod (10%) figured in, too.

Recreational fishing is a significant source of fishing mortality for some species, especially sport-fish and summer flounder.

Regional Economic Impacts of Recreational Fisheries

Economists distinguish between economic activity (such as revenues, expenditures, income, and employment) and economic value (a net benefit, or surplus, after accounting for certain types of costs). Estimates of the economic value of different uses and assets are presented in other sections of Human Dimensions.

Dealers’ expenditures on commercial landings and anglers’ expenditures on tackle, boats, or party/charter boat services initiate a chain reaction in a regional economy. Commercial landings are distributed and processed and then exchanged in wholesale and retail markets. These “direct effects” of landings add to the economy’s income and employment base. In addition, “indirect effects” stem from purchases of goods and services that are needed by each industry, such as ice, fuel, trucks, electricity, and retail space. Finally, “induced effects” result when workers and businesses spend their income on household needs, leisure, and any number of goods and services that have nothing to do with fishing.

Recreational fishing is plugged into the economy at the opposite end of a similar market chain. Anglers spend money on fishing gear, boats, travel, fees for party and charter boat fishing, and so on. Their expenditures stimulate similar series of direct, indirect, and induced effects which also contribute income and employment to the economic base.

The overall effect of commercial or recreational fishing on an economy can be summarized by a single number called a multiplier. All economies are “leaky”, meaning that savings and purchases of goods and services outside the boundaries of the town, state, or country economy reduce the money supply. Seafood imports and sport-fishing trips in the Caribbean are leaks from the U.S. economy. The average number of times that a dollar circulates through an economy before being saved or spent outside the boundary is the multiplier.

Anglers’ expenditures on fishing needs (bait, gear, equipment) and travel (fuel, lodging) impact the local and regional economies in the same ways the commercial sector does. In a recent study for the NES LME, the highest sales, income, and employment impacts were generated in New Jersey, even though recreational fishing expenditures in Massachusetts and Maryland were considerably higher. This was because Maryland and Massachusetts import a higher proportion of goods and services required to satisfy angler demands. Overall, the per-dollar amount of angler expenditures that remained within each coastal state ranged from a low of 44 cents in Rhode Island to a high of 64 cents in New Jersey. Unfortunately, the impacts of recreational fishing on the regional economy cannot be estimated in this study because state models are not additive. Summing at the state level would underestimate total impacts because the multiplier effects would be underestimated.