An assesment of the De Minimis Exemption in the CFP discarding regulation: for Scottish Fleets

Implementation of de minimis

In recent years, trials of catch-quota management in the North Sea have been undertaken in Scotland and the rest of the UK. This has been a voluntary scheme designed to inform and lead towards the implementation of the CFP Reform discard regulation. The main features for vessels participating in the scheme and fishing in the North Sea are that:

a) all caught fish are recorded;
b) all species specified in the scheme caught shall be landed and count against quota;
c) all participating vessels are exempted from effort controls; and
d) if a vessel's quota for species specified in the scheme is reached it must stop fishing.

The framework that de minimis must fit into is likely to be based on such an approach, even if not exactly the same.

For a vessel to be allocated de minimis, as already discussed, several conditions must be satisfied, in particular ensuring in the management plan that stocks outside or close to being outside safe biological limits have clearly defined limits of acceptable bycatch. This must be done in collaboration with stock assessment scientists.In addition, other conditions that could be considered in an application de minimis include activity, market and economic based conditions.

As discussed, unwanted catch adds little to no economic value to a vessel's income. Even if the unwanted catch is sent for fishmeal, the value received is unlikely to be offset by the costs of sorting, recording, storing (at the potential expense of wanted catch), landing and transporting the unwanted catch. Any catch sent for fishmeal will be below market value for consumer bound fish. Therefore, all costs relating to the unwanted catch are disproportionate compared to wanted catch. ^[13] In the current situation, the cost of unwanted catch is subsumed within the landings as a whole. However, if the landing obligation limits landings to a level lower than quota allocated then the cost of the unwanted catch becomes an explicit cost (see STECF reports on landing obligation exemptions)

For example, simplistically in the new transparent conditions a vessel receives income for its allowable catch but no income for non-allowable catch, but costs of crew and handling relate equally to allowed and non-allowed catch. The net profit from the unwanted catch element will always be negative unless quota can be obtained enabling landing and an income greater than costs. It can therefore be argued that there is an immediate case for disproportionality with regard to unwanted catch.

To measure whether a vessel / fleet is eligible for de minimis a technical criterion should be developed to ensure de minimis eligible unwanted catch is identified correctly. Priority for de minimis should be to stocks and fleets where quota is not readily available. For example, the TR1 fleet indicates very low landings of pelagic species ^[14] and could apply for de minimis exemption when catching herring and mackerel over their assigned quota. Similarly, for pelagic trawlers catching whitefish.

The main operational test therefore would be based on a percentage of catch made by a fleet against total catch of the fleet or against total quota. The following test results with a percentage of 10% applied ^[15] :

De minimis inclusion criteria:

Is the catch of a stock ( i.e. stated speciesin stated area) by a fleet less than 10% of all catch in the Area ( e.g. IV or VI) by that fleet OR is the catch of the fleetless than 10% of total UK quota? ^[16]

This test is designed to cross-check fleets and stocks:

CHECK 1: Calculate the percentage of each fleet's catch of a stock against the total catch of the fleet.

This provides the importance of a given stock to a fleet. (Note that value would indicate economic importance butvolume indicates the biological importance)

CHECK 2: Calculate the percentage of each fleet's catch of a stock against quota.

This provides the impact that a fleet has on a stock.

The following example considers 3 fleets and 3 stocks, and landings volume is used:

LANDINGS	Fleet1	Fleet2	Fleet3	TAC
Stock1	247	14	73	0
Stock2	1	435	31	507
Stock3	475	198	36	900
TOTAL fleet landings	723	647	139

The two checks are applied in turn:

CHECK1	Fleet1	Fleet2	Fleet3	CHECK2	Fleet1	Fleet2	Fleet3
Stock1	34%	2%	52%	Stock1	100%	100%	100%
Stock2	0%	67%	22%	Stock2	0%	86%	6%
Stock3	66%	31%	26%	Stock3	53%	22%	4%

The importance of stocks to fleets (CHECK1) shows that there is 1 stock of little importance to fleet1 and 1 stock of little importance to fleet2 (as highlighted above).

The importance of the fleet on the stock (CHECK2) shows that fleet1 has little impact on stock2 and fleet3 has little impact on stocks2&3 (as highlighted above).

These checks work together (as long there are a representative number of stocks). In this simple example, only stock2 for fleet1 would be eligible for de minimis under this test as it meets both checks. Stock1 for fleet1 exceeds the max Quota (Zero in this example) but is of little importance to the fleet, and stocks2&3 are important to fleet3 but that fleet takes a low proportion of the stock.

So, ifthe test is satisfied for a fleet then that vessel/fleet can apply for de minimis against a specific species in a specific area. Encompassed within this test is the assumption that there is a market for a species in landing port ( i.e. first part of the test) and that the unwanted catch is of low economic importance to a vessel / fleet ( i.e. second part of the test).

Related tests of assessing if quota is available to land a species from an area and ensuring that a stock remains within safe biological limits are tests that should be applied through the management plan as time of allocation stage of de minimis.

Implications of inclusion criteria

The dimensions for evaluation of whether de minimis is applicable is suggested at the metier level, that is by fleet (or sub-fleet) using a specific gear, fishing in a certain area for a (set of) given species. The stocks applicable for de minimis exemption are naturally those where quota regulation applies as they are biologically assessed on an annual basis.

It should be kept in mind that the purpose of de minimis is commonly agreed to keep the fleet fishing. That implies that is not designed to allow an increase in vessels quota and/or days at sea, they should remain within their yearly allocation.

Applying the de minimis inclusion criteria above for the three main mobile gears in the 2 main areas to which de minimis applies for the Scottish fleets results in the following ( Table 1 and Table 2). The first criterion is shown in Table 1 and the second criterion in Table 2. The status of inclusion is then dependent on both being met, i.e. first that landings of a stock by a fleet are less than 10% of the total landed for that fleet and second that landings of a stock by a fleet are less than 10% of the UK quota. ^[17] Those stock/fleet combinations that are shaded in both tables are suitable for inclusion subject to the stock conditions in the management plan. The key species indicated are those that dominate the indicated landings in 2012for the gear groups used ( e.g. TR1, TR2 and pelagic)

Note that a 5% Vs 10% threshold results in few differences between stocks that are identified as de minimis. Pelagics have the same stocks identified, TR1 have 1 stocks different ( i.e. cod) and TR2 have 2 stocks different ( i.e. cod and haddock).

Table 1. Identification of de minimis metiers: orange<= 10% landings Vs total landings

10% Threshold	Pelagic gear		TR1 gear		TR2 gear		UK Quota 2013
Species	Area IV	Area VI	Area IV	Area VI	Area IV	Area VI	NS	WOS
Whitefish
Cod	16	-	9,615	122	232	9	12,381	45
Haddock	71	-	19,379	3,672	1,676	540	30,408	4,870
Hake	18	-	2,467	413	35	39	1,245	-
Monks	2	-	3,003	1,462	561	126	7,871	2,107
Saithe	18	-	6,709	4,226	129	10	10,968	4,486
Whiting	7	-	6,043	140	1,508	56	11,773	167
Pelagics
Herring	54,865	12,370	2	0	1	0	58,991	16,315
Horse Mackerel	623	2,844	6	8	0	-	4,692	14,489
Mackerel	73,375	72,876	40	3	8	0	64,908	97,332
Flatfish
Lemon sole	1	-	561	47	209	4	3,935	-
Megrim	0	-	1,220	579	23	68	2,044	1,179
Plaice	1	-	6,271	29	1,211	9	22,836	388
Sole	-	-	31	0	176	3	1,163	11
Shellfish
Nephrops	0	-	737	408	8,312	11,503	16,310	17,699
TOTAL ALL	130,133	89,652	60,212	13,199	14,832	13,133

Table 2. Identification of de minimis metiers: blue <= 10% landings Vs UK quota

10% Threshold	Pelagic gear		TR1 gear		TR2 gear		UK Quota 2013
Species	Area IV	Area VI	Area IV	Area IV	Area VI	Area IV	NS	WOS
Whitefish
Cod	16	-	9,615	122	232	9	12,381	45
Haddock	71	-	19,379	3,672	1,676	540	30,408	4,870
Hake	18	-	2,467	413	35	39	1,245	-
Monks	2	-	3,003	1,462	561	126	7,871	2,107
Saithe	18	-	6,709	4,226	129	10	10,968	4,486
Whiting	7	-	6,043	140	1,508	56	11,773	167
Pelagics
Herring	54,865	12,370	2	0	1	0	58,991	16,315
Horse Mackerel	623	2,844	6	8	0	-	4,692	14,489
Mackerel	73,375	72,876	40	3	8	0	64,908	97,332
Flatfish
Lemon sole	1	-	561	47	209	4	3,935	-
Megrim	0	-	1,220	579	23	68	2,044	1,179
Plaice	1	-	6,271	29	1,211	9	22,836	388
Sole	-	-	31	0	176	3	1,163	11
Shellfish
Nephrops	0	-	737	408	8,312	11,503	16,310	17,699
TOTAL ALL	130,133	89,652	60,212	13,199	14,832	13,133

In the real data presented in the report, Cod in Area VI taken by TR1 and TR2 is a good example. This stock is indicated to have little economic importance to both fleets based on landings in 2013 however there is a very low Quota. Similarly, Horse mackerel for the pelagics. There appear to be no examples where CHECK1 dominates CHECK2, that is landings of a species compared to quota rather than total fleet landings, for this case study, however it doesn't mean that there couldn't be as shown above in the example.So CHECK2 might be viewed as the dominant check for the fleets, stocks evaluated, but CHECK1 is required to ensure that levels are established in both dimensions.

Note that if transfer of de minimis across species types is required then suitable conversion rates could be considered using a similar principle to some situations of quota transfer currently

Note also that de minimis is part of a toolkit of approaches to enable practical implementation of the discard ban. Other approaches are available ( e.g. quota transfer) for instances that are not deemed applicable for de minimis under the agreed management plan.

The question of how much of a given stock is allowable under de minimis depends on the status of the stock and how much unwanted catch is caught by vessels applying for this exemption. It is important for biologists and policy makers to understand the impact that discarding currently has and will have in the near future on stocks. In most cases, the level of discarding for a fleet is reported to be the relationship between the volume of fish landed and the volume of fish caught. Discarding is zero when these are equal and high when catch is significantly greater than landings. However, a simple percentage (as inferred in the Paragraph 3(c)) does not necessarily tell the whole story as the volumes caught by fleet must have reference to all other fleets and to the stock biomass.