Louisiana under-prices its oyster leases and loopholes in state law have allowed individuals to exceed the limits, according to a performance review of the state Wildlife and Fisheries Commission conducted by the Louisiana Legislative Auditor.
The state could generate $1.29 million in additional revenue by increasing the oyster lease rate from $2 an acre to the $5.20 per acre average of five other states that harvest Eastern oysters. Legislators in 1902 set the lease rate at $1 per acre per year. In 1980, the Wildlife and Fisheries Commission, which manages the state’s water bottoms, put the lease rate at $2 per acre. Louisiana’s lease rate has not changed since 1980.
Louisiana leaseholders produced more than 10,000 pounds of oysters for restaurants and seafood markets for a total market value of $40.6 million in 2013, according to the audit. Louisiana leads the nation in oyster production.
Auditors also found that 36 people — using different corporations and partnerships — were able to circumvent state limitations of 2,500 acres leased to control more than half of the available water bottoms. That works out to 213,564 acres, or 53.1 percent or 402,579 acres currently being leased.
For instance, one individual used 12 corporations, all with the same address, to control 27,688 leased acres, which is about 11 times greater than the law allows. Another individual has at least 11,615 acres under lease.
“They’re not breaking the law,” said Karen LeBlanc, director of performance audit services for the Legislative Auditor. It’s just that the law allows such actions.
The auditors recommended that the Louisiana Legislature increase the lease rates and clarify the state law so that the leases would not be dominated by so few oystermen. Unlike Louisiana, Mississippi and North Carolina specifically define when and how a partnership or corporations can lease acreage.
Additionally, the state issued a moratorium on issuing new leases in March 2002.
At that time, the state was being sued for diverting freshwater from the Mississippi River into the brackish waters where oysters live. Since then, however, laws have been passed limiting the state’s exposure to such lawsuits.
The auditor pointed that if the moratorium was lifted, then another 667,000 acres or so could be leased, raising an additional $1.3 million per year — $3.5 million per year if the per acre lease rate also is increased.
Pat Manuel, chairman of the Wildlife and Fisheries Commission, which manages the state’s water bottoms, replied in writing that he couldn’t speak on behalf of the panel but would bring up the recommendations the next time it met.
Officials with trade associations for the seafood and restaurant industries, which would be most impacted by the changes, did not respond to requests for comment.
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