Maryland DNR Counteroffer for Commercial Limited Crab Catcher License Buy Back Program

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The Maryland Department of Natural Resources (DNR) has announced that it is revising the Commercial Limited Crab Catcher (LCC) License Buy-Back Program. The agency began the voluntary Buy-Back program in July in an effort to reduce the amount of latent (inactive) effort in Maryland’s commercial blue crab fishery.

The large amount of potential crabbing effort in the Maryland fishery poses a long-term biological and economic threat to the crab population, as an unknown number of inactive licenses may re-enter the fishery in any year. On July 8 the Department sent all (3,676) latent and active LCC license holders a letter offering to permanently buy back licenses through a process called a reverse auction. The reverse auction offered individuals an opportunity to submit a bid to the Department for the amount of money for which they would be willing to permanently relinquish their license.

DNR chose to use a reverse auction approach to help set a fair value for an LCC license. The goal of the Buy-Back Program is to buy and permanently retire 2,000 LCC licenses. The deadline to participate in the initial offer was July 31.

A total of 494 LCC-holders submitted bids to the Department by the deadline. While participation in the auction was less than the Department had hoped, the bids submitted did provide important data to allow DNR to determine a fair value for an LCC license. Based on the limited participation in the first wave, and the Department’s desire to acquire additional LCC licenses in the future, DNR is revising and extending its program offer.

All initial bids will be formally declined. Instead, the Department will immediately offer a fixed price of $2,260 to all LCC holders who may wish to sell their license. DNR used the 494 bids received through the reverse auction to determine a fixed, fair value for an LCC license.

“By establishing a fixed sales price for an LCC license we can now eliminate uncertainty for the license holder,” said DNR Secretary John Griffin. “In addition, we plan to extend this offer to LCC license holders until the funding for this project is exhausted. We feel that this course of action will ultimately get us closer to achieving our goal.”

Each LCC license holder that submitted a bid in July will be receiving a letter from DNR by August 21 with the fair value counteroffer of $2,260, regardless of the value of their original offer. This letter will contain the instructions necessary for a licensee to accept this counteroffer and surrender his/her license to the Department.

In the next few weeks, all additional LCC-holders who did not participate in the reverse auction will receive a similar letter, providing them another opportunity to accept the counter offer.

The National Oceanic and Atmospheric Administration (NOAA), through Federal Blue Crab Disaster Funds, is providing funding for the LCC Buy-Back Program. The funding was secured under the leadership of Governor Martin O’Malley, Senator Barbara Mikulski and the Maryland Congressional Delegation in 2008.

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