Bristol Bay Salmon
Fishery
Restructuring Study
Summary of Town Meetings to
Obtain Public Input
Naknek
and Dillingham, Alaska
June 18
and 20, 2002
Executive Summary
The Bristol Bay Economic
Development Corporation (BBEDC) is sponsoring a study to evaluate options to
improve the economic sustainability of the Bristol Bay sockeye salmon
fishery. The BBEDC hosted public
meetings in Naknek and Dillingham, Alaska, in June 2002, to describe the
Bristol Bay Salmon Fishery Restructuring Study, and to hear the public’s ideas
about improving the fishery.
The restructuring study will
evaluate the potential effects of six to eight options for restructuring or
improving the Bristol Bay fishery. It
will examine the economic and biological impacts of each option, as well as
social, legal and political implications.
The study will not recommend a “preferred” option or set of options, but
will provide information to BBEDC, people involved in the Bristol Bay fishery
and decision makers to consider. The
study will be completed in January 2003.
A total of 240 people
attended the Naknek and Dillingham meetings – including fishermen from all gear
groups and districts, processors, and community members. Meeting participants shared their views
about the current fishery (status quo) and about options for restructuring or
improving the fishery.
The
public is encouraged to provide comments on the study and restructuring options
through a questionnaire, email and the project web site at www.bbsalmon.com
Major points made at the
meetings include:
· Status Quo – There was agreement at both the Naknek and Dillingham meetings that the status quo is not an acceptable situation for people involved in the fishery. Many fishermen can no longer afford to fish. Concerns included the excessive number of permits, declining catches, low prices, poor marketing and quality, the need for improved infrastructure to lower costs, and low fish returns.
- Reducing the Fleet – Fishermen expressed general support for
reducing the number of vessels in the fleet to reduce costs and to
increase catch size and income for remaining fishers. If the fleet is reduced through a buy
back, fishermen want to be fairly compensated for the loss of equity and
fishing opportunity. A government
buy back was preferred over a fishermen-funded buy back that would create
more debt for fishermen.
Fishermen
were concerned that some options for restructuring the fishery (such as vessel
sharing or fishing alternate days) would reduce their opportunity to catch fish
and earn income, without significantly reducing their costs. The restructuring study should clearly show
how fleet reduction options would likely affect a fisherman’s equity, fixed
costs and net income.
- Fish Allocation by Quota – A number of people spoke in favor of using an
individual fishing quota (IFQ) system for salmon in Bristol Bay. If fishermen were more certain of their
share of the catch, it might be possible to fish less competitively,
improve fishing efficiency, and reduce costs. Some people were stated that quotas should not be based only
upon catch history and suggested other criteria, such as encouraging local
participation in the fishery.
People
questioned whether the Bristol Bay fishery could be effectively managed through
an IFQ system, given the short time period and uncertainty of annual salmon
returns. The study would need to
evaluate whether the fishery could be managed under an IFQ system, and discuss
possible criteria and options for allocating quotas.
- Marketing, Quality and Value-Added Processing – At both the Naknek and Dillingham meetings,
people emphasized that marketing, product quality and infrastructure must
be improved. Bristol Bay salmon
must be marketed as high quality, wild salmon in market niches not filled
by farmed fish. Consumers must be
educated about the superior quality of wild salmon, and product quality
must be consistently high. Infrastructure
that could lower fishermen’s costs and provide more options for those who
want to process and market their own fish was suggested.
- Increasing Fish Returns – While more fish, alone, will not create a
sustainable fishery in Bristol Bay, people expressed concerns about
improving fish runs and fishery management. In Naknek, people were especially concerned about the
decline in the Kvichak River run.
- Economic Subsidies or Protections – Government subsidies were suggested to help
fishermen make the transition to a restructured fishery. Tariffs on imported farmed salmon were
also suggested to reduce its price advantage.
- Precedents
– Meeting participants suggested that the restructuring study look at
other fisheries, to see which structures have been successful and which
have been problematic.
1.0 Introduction
The Bristol Bay Economic Development Corporation (BBEDC) is sponsoring a study to identify and evaluate options to restructure the Bristol Bay sockeye salmon fishery. The BBEDC hosted public meetings in Naknek, Alaska on June 18, and in Dillingham, Alaska on June 20, 2002, to:
· Describe the Bristol Bay Salmon Fishery Restructuring Study, and
· Hear the views of people involved in the fishery about the current situation and options for improving the fishery’s economic sustainability.
One hundred and sixty people attended the meeting in the Naknek school auditorium. Eighty people attended the Dillingham meeting at the Curyung Tribal Council building.
Robin
Samuelson, Director of BBEDC and a life-long Bristol Bay fisherman, welcomed
the public to both the Naknek and Dillingham meetings. Mr. Samuelson invited all parties –
including fishermen from all districts and gear groups, processors, community
members and others – to work together to create a fishery that will provide
long-term economic benefit to the people involved in the fishery and the
Bristol Bay region. The BBEDC, which
represents 17 communities, funded the $300,000 study to help the region analyze
options for improving the fishery and craft a plan that can be taken to the
Governor, Congress and other decision makers.
The BBEDC and study team have no preconceived idea about the result of
the study and will not recommend a preferred option. Instead, the study will analyze a number of options and present
the advantages and disadvantages of each.
The process is open and public input is needed and welcome.
2.0 Description of
the Restructuring Study
At each public meeting, Michael Link, Project Manager, described the Bristol Bay Restructuring Study, introduced the study team, and answered questions about the project’s intent and design.[1] The study, to be completed in January 2003, is being done in response to the problems facing the Bristol Bay sockeye fishery. The fishery has declined from a 20-year average landed value of $200 million received by fishermen, to an average of less than $40 million in the last five years. The projected landed value for 2002 is $24 million. The decline is due to recent low fish returns coupled with low prices for fish due to market forces, including competition with farmed salmon and other factors.
The study will evaluate the potential effects of six to eight options, including actions that could:
· Decrease the cost of catching and processing fish,
· Increase the price paid for fish, or
· Increase the amount of fish available to harvest.
The study will evaluate the economic and biological impacts of each option, and analyze the social, legal and political implications of each. The study will not recommend a “preferred” option or set of options. Instead, it will provide information for the BBEDC, people involved in the fishery and decision makers to consider as they decide what action to take, if any, to improve the fishery. The study team is working with an Advisory Panel, which includes representatives of each river system in Bristol Bay and government agencies that work with the fishery. Many of the options being considered would require changes in current statutes or regulations. Upon completion of the study, the BBEDC will decide what steps to take to improve the economic sustainability of the fishery.
The public is urged to
participate in the project, through public meetings, questionnaires, email, and
the project web site.[2] Public input is being requested in July
2002, to ensure that the study can be completed by January 2003. An executive summary of the report will be
mailed to all permit holders. The full
report will be posted on the web site.
3.0 Summary of Comments at Public Meetings
At the Naknek and Dillingham meetings, public input was taken through oral and written comments and informal, one-on-one conversations. People were asked:
· What is working and not
working about the existing situation (status quo)?
· What restructuring or other
options should be considered to improve the fishery, and why?
· What restructuring or other
options should not be considered, and why?
· What issues or concerns
should be addressed when options are analyzed?
The public discussions at the Naknek and Dillingham meetings are summarized below.
3.1 Status Quo – Comments on the
Existing Situation
There was agreement at both the Naknek and Dillingham public meetings that the status quo is not an acceptable situation for people involved in the fishery. Concerns included:
· There are too many boats competing for a reduced resource. The race for fish is costly, inefficient, and often unsafe and rancorous – and it leads to poor handling of fish and lower fish quality.
· Prices are too low for fishermen to make a living in the current fishery. Many people can no longer afford to fish.
· Marketing is very poor and has not responded to current conditions in the world salmon market – particularly the threat from farmed salmon.
· Product quality needs to be significantly improved.
· New infrastructure is needed to allow fishermen to more effectively handle and market their catch; support value-added processing; and lower costs.
· Fish returns are alarmingly low. Many people attending the Naknek meeting were especially concerned about the Kvichak River return.
3.2 Naknek Meeting –
Public Comments
A.
Comments on the Restructuring Study
People offered the following comments at the Naknek meeting about the intent and design of the Bristol Bay Salmon Fishery Restructuring Study:
· Several people asked why the Advisory Panel does not include representatives of fishermen and processors from outside Alaska. In response, Robin Samuelson committed that the study will comprehensively and fairly consider how the status quo and any restructuring options would affect all participants in the fishery – local and non-local. The analysis must be fair, or there will be no hope of support from the Governor, State Legislature or Congressional in its implementation. Michael Link stated that the study team members are independent professionals who are committed to conducting a complete and unbiased analysis.
· The study team should look at how restructuring has worked in other fisheries to find successful precedents and potential pitfalls.
· It is important that the results of the study be communicated to all decision makers in Alaska, to educate them about the problems in Bristol Bay and possible options for improving the situation.
·
The
study should list the references used in the analysis.
B. Comments on Restructuring Options
There
was strong interest at the Naknek meeting in changing the salmon fishery to
make it more sustainable and provide more economic benefit for those
involved. However, people emphasized
that simply restructuring or reducing the fleet would not be enough to ensure
the long-term sustainability of the fishery.
Product quality and marketing must also be improved to raise prices.
Reducing the Fleet
Meeting participants
expressed general support for reducing the number of vessels and fishermen in
the fleet. Consolidating the fleet
could reduce harvesting costs and increase catch size and income for remaining
fishermen. However, people noted that
fleet reduction would need to be equitable and provide compensation to those
leaving the fishery. Options discussed
for reducing the fleet included permit buy backs, and ways to reduce or
consolidate fishing effort of existing permit holders.
Buy Backs
It was recommended that the
study explain how a buy back could work, including how permits would be valued,
who would fund the buy back, and who would receive an offer. Participants in the fishery would need this
information before they could decide whether or not to support this option.
If a buy back is pursued,
there was strongest support for a government-funded buy back that would
compensate permit holders for lost equity.
Several people felt that the State of Alaska had issued too many permits
and had caused overcrowding in the fishery.
They felt the State has a responsibility to compensate permit holders if
they reduce the number of permits to a more sustainable level. One person questioned what the State had
done with the fee of $50 per permit that was intended to fund State buy backs
of unused permits.
People stated that a buy back
should fairly compensate fishermen for their loss of equity and opportunity –
not just buy permits at the current, low market price. One person suggested that permits be bought
back from outside fisherman first, to favor local involvement in the fishery in
the future. Another suggested that the
State retire permits that were purchased with state loans and have been in
default.
If government funding is not
available for a buy back, people were concerned that the fishermen would be
taking on further debt to fund a buy back program.
Permit Stacking or Exclusive Group Fishing
Meeting participants were
concerned about options that would reduce the fleet or fishing opportunities
without compensation. Permit stacking
(e.g., two permit holders sharing a vessel) or “exclusive group” fishing (e.g.,
fishing every other day)[3],
were viewed by many people as reducing equity and fishing opportunity without
fair compensation. Several members of
the audience fished in the San Francisco Bay “odd-even” herring fishery. In their view, the value of their permit and
their opportunity to earn money fishing had been cut by half, without
compensation.
In contrast, some people
spoke in favor of permit stacking or vessel sharing, noting that fishing
costs are reduced by sharing vessels, gear and labor. Vessel sharing would allow permit holders to team up on the
best-equipped boat, which could improve fish quality.
The restructuring study must
show how permit stacking or exclusive group fishing could affect the
fishermen’s costs and income, so that people can make an informed decision about
this option. The study team was urged
to look at other fisheries where these restructuring options have been
implemented, to see the long-term effects on the economics of the fishery and
individual fishermen’s net incomes.
Fishing Cooperatives
One person suggested that
villages or native corporations organize fishing cooperatives to reduce the
number of boats in the fishery and reduce costs. A cooperative could encourage and support local participation in
the fishery.
Fish Allocation by Quota (IFQs)
Several people spoke in favor
of establishing an individual fishing quota (IFQ) system for the Bristol Bay
salmon fishery. If fishermen were more
certain of their share of the catch, it would calm down the “race for
fish.” An IFQ system might make it
possible to change regulations that make the fishery inefficient, such as the
32’ boat limit and gear restrictions.
Removing these inefficiencies could reduce fishing costs. Allowing fishers to “stack” their IFQs and
share vessels could further reduce costs.
An IFQ might also make it easier for fishers to process their own
fish. Under the current system, fishers
have to fish competitively and have no time for processing.
In response, people questioned whether it
would be possible to manage the Bristol Bay salmon fishery through an IFQ
system, given the short time period in which fish return and the year-to-year
uncertainty of the returns. The study
team would need to look at other IFQ fisheries and consult with ADF&G
managers to determine whether an IFQ could work in Bristol Bay. Since the Bristol Bay fishery is a very
short intense season and returns are difficult to predict, it might be
necessary for ADF&G to update IFQs very frequently, thereby reducing much
of the benefits they offer.
People also questioned how
quotas would be allocated. If catch
history was used as the most important criteria for determining an IFQ, there
was a concern that many local fishermen who had participated in smaller fisheries
might not receive an adequate quota. Others
felt that basing quota shares on catch history rewards those who heavily
capitalized their fishing capacity and punishes those who managed to avoid the
temptation to overcapitalize. One
participant felt that IFQs make it difficult for younger fishermen to join the
fishery. Another was concerned that
corporations would purchase IFQs and individual fishermen would be driven out
of the industry.
Alternative Fishing Gear or Methods
A few meeting participants
spoke about fish traps. They noted that
fish traps would be a cost effective way to fish in Bristol Bay, and that high
quality, live fish could be delivered for processing. However, others felt that running a fish trap would not be a
satisfying job for most people now fishing in Bristol Bay.
Improve Economics With/Without
Changing Fishery Structure
Meeting participants were
emphatic that simply changing the structure of the fishery will not be enough
to sustain it. Improvements in
marketing, product quality and infrastructure are extremely important and
should be pursued – even if other restructuring options are never implemented.
Marketing
People spoke at length about the need to
market wild Bristol Bay sockeye salmon in new markets in the U.S. and
abroad. Consumers need to be
educated about the superior quality of wild salmon when compared to farmed
salmon. Since wild salmon is more
expensive, it must be marketed to people who are willing to pay more for high
quality, healthy food. Wild salmon must
be made available in markets throughout the U.S., where only farmed salmon in
now sold.
Quality
To command a higher price, Bristol Bay salmon need to be of the highest
quality. Fishermen stressed the need
for improved fish handling and storage (slush bags or refrigerated sea water). They suggested that processors should pay a
premium for high quality salmon.
Currently, processors pay premiums for high volume, which results in poor handling and lower quality.
Infrastructure for Value-Added Processing
It was suggested that a local
cold storage and ice machine be built to help fishermen improve the quality of
their fish, and process and market their own fish. One person suggested that the Alaska Seafood International (ASI)
facility might pick up fish from Bristol Bay for processing, if there was a
cold storage available.
New infrastructure could also
encourage value-added processing of fish.
One person complained that the Alaska Department of Environmental
Conservation’s (DEC) regulations regarding processing facilities make it very difficult
for a fisherman to process their own fish.
It was suggested that low
interest loans or grants be provided to improve boats (e.g., add RSW), build
infrastructure for storage and processing, and produce and market value-added
products.
Price
One person requested that the
study team show how wholesale prices compare with prices paid to fishermen, to
see if there are any options for increasing landed values.
Fishing Association
Several people spoke in favor of Bristol Bay
fishermen organizing and working together to support improvements in prices and
other aspects of the fishery.
Organization of a Bristol Bay marketing association was mentioned.
Increase Number of Fish Available to
Catch