Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 1 -
Public Responses to Salmon Task Force Questions
As of December 3, 2002
Table of Contents
Responses by…
Geoffrey Orth (S04T) 12/1/02 ..........................................................................................2-4
Curt Herschleb (S03E) 12/1/02 ........................................................................................5-7
Bruce Jolma (S03T) 12/1/02.............................................................................................8
Shirley Kelly (S03T) 12/1/02............................................................................................9-11
Joseph Faith (S03T) 12/1/02...........................................................................................12
Alaska Independent Fishermen's Association (S03T/S04T) 12/1/02 .............................13-21
Adelheid Herrmann 11/30/02 .........................................................................................22-25
Richard Hendricks (SO3T/S03M) 12/1/02.....................................................................26-29
Alaska Manufacturers' Association 11/30/02 .................................................................30-33
Duff Mitchell (Kake Tribal & Foods) 11/30/02 .............................................................34-61
John Bocci (S03E) 11/30/02...........................................................................................62-64
Winston Gillies (S03H) 11/30/02 ...................................................................................65-67
Stephen Braund (S04H) 11/30/02...................................................................................68-73
Tim Keohane (S03H) 11/30/02 ......................................................................................74-77
Charles Crapo (Univ of AK) 11/30/02 ..........................................................................78-79
Peter Knutson (S03A) 11/29/02......................................................................................80-82
Gulf of Alaska Coastal Community Coalition (GOAC3) 11/27/02................................83-97
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 2 -
Name: Geoffrey Orth
Email: gcorth@mosquitonet.com
Address: P.O. Box 22 Ester, AK 99725
Phone: 907.479.0014
Fish Area: Bristol Bay (Egegik)
Gear Type: Salmon Setnet
Quality Subcommittee
1. What does the Alaska salmon industry need to achieve a higher quality product?
Exposure to markets demanding, and paying, for a higher quality product. The economic incentive is
there, we’re just not getting the exposure to it. The canned market does not require a higher quality
product!
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
No
3. Should the state have a quality education program for industry participants?
No
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
Higher grounds price.
Marketing Subcommittee
1. Do we use existing state salmon promotional entities or do we change the entities? If changed, what
changes should be made? (e.g. ASMI; Division of International Trade & Market Development, other)
Existing entities are adequate but are in need of a massive infusion of capita (i.e.: $$$$). The capture of
the “salmon” market by farmed salmon and strong US dollar has destroyed our market share. Increased
product marketing is the is critical component to the survival of our industry.
2. Who or what entity or entities should be paying for the promotion and/or marketing of Alaska’s wild
salmon? (e.g. salmon harvesters, processors, federal government/USDA; state general fund; other
federal funds; other sources)
Under normal conditions, harvesters and processors should bear the cost of funding the public agencies.
Unfortunately, until recently this industry has been in a position where the buyer came to the seller, and
both the harvesting and processing sectors were blind to the concept of advertising a product. We’re
behind the curve on this one, and because of the amount of funding required to save this industry, state
and federal assistance is required.
3. Should the state help individual fishermen promote and market their wild salmon? If so, how?
No. We need $$$$$ in a concentrated effort!
Production Subcommittee
1. How can we remove or reduce costs from the harvesting sector in a way that allows regional selfdetermination?
IFA’s, cooperatives and a look at fish traps all deserve serious attention.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 3 -
2. How can we remove or reduce costs and aid the processing sector?
No comment.
3. In addition to the removal or reduction of costs, are there statutory/regulatory changes that can help
the harvesters and/or the processors?
ADF&G is doing a great job…. Increase their budget, don’t cut it!
Finance Subcommittee
1. Are there better ways in which the state can use existing fishing industry taxes to assist the salmon
industry?
No comment.
2. Do current State of Alaska loan practices address the needs of the salmon industry? If not, what
changes would you suggest?
No comment.
3. Should the State of Alaska provide for the permanent retirement of limited entry permits in your
fishery? If salmon limited entry permits were retired in your fishery, what incentives would you suggest
for retirement? If funding is needed, who should pay?
I don’t believe that a buy-back of permits is required at this time. While its obvious that the Bristol Bay
salmon setnet fishery is not profitable for many individuals, if condition or regulations change it may not
be necessary. The concept of over-capitalization is often misunderstood. It is not a fixed point on an
economic scale, rather a fluid relationship between different factors: production costs, competition,
resource levels and resource price. Any one factor can influence an industry’s existence… a
combination of forces can kill it. We need focus on marketing and regulation changes (to reduce
operating costs).
Governance Subcommittee
Hatcheries
1. Would you support legislative development of a State of Alaska hatchery policy and/or performance
standards for hatcheries, and/or changes to the state’s relationship with all hatchery owners?
Hatcheries should survive on their own economic merits.
Education
1. What role should the State play in providing fisheries education (K-12, post-secondary, and voc/tech)
in order to promote Alaskans in the fishing and seafood industry?
No comment.
2. Does Alaska’s university system adequately meet the research and post secondary educational needs
of the Alaska salmon industry? If not, what changes would you suggest?
No comment.
3. If you are displaced by changes in the salmon industry, what could the state do to provide retraining
and/or alternative employment?
No comment.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 4 -
Agency Oversight
1. Apart from the Board of Fish decisions, are there other state agency regulations that could be
changed to benefit Alaska’s salmon industry?
State and federal legislation needs to be amended to allow fishermen to collectively negotiate price at
the regional level.
2. Do you support Alaska’s board of fish process? If changes are necessary, what would you suggest?
Yes.
3. Do you support a task force created by the legislature to review the Alaska Board of Fish?
No, not at this time.
Seafood Commission
1. Should the State of Alaska develop an Alaska Seafood Commission to annually advise the legislature
on the needs of the seafood industry?
No, not at this time.
Economic Development
1. As Alaska’s salmon industry changes, what are the economic development issues, community and
individual concerns that should be addressed by the State Legislature?
No comment.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 5 -
Name: Curt Herschleb
Email: Salmo@ctcak.net
Address: PO Box 1622 Cordova, Ak. 99574
Phone: 907-424-3632
Fish Area: E
Gear Type: Drift Gillnet and Longline.
December 1, 2002
Quality Subcommittee
1. What does the Alaska salmon industry need to achieve a higher quality product?
The needs of the industry vary greatly by area and fishery. Solutions should be sought on a regional
level. The discussion of quality needs to include best practices for tenders, processors, and transporters
as well as harvesters. I believe that quality is generally improving. For quality to improve at a faster
rate would require either a strong, market-driven demand for quality or some form of subsidies for
infrastructure.
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
I believe the state should only impose very minimum quality standards to prevent extremely low quality
product from entering the marketplace. The need to reduce costs for all sectors of the industry is often
identified. It is not reconcilable with imposing more stringent quality standards
It would be helpful to change wanton waste laws so that a fish with high roe value and low flesh
value need not be wholly utilized. The low quality carcass sets a benchmark and reduces the overall
value of the pack. .
3. Should the state have a quality education program for industry participants?
I believe there is dearth of information available to catchers regarding improving quality. The state
could offer education to harvesters who want to process their catch for adding value and direct
marketing.
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
Personally I have invested a great deal of capital in my operation for improving quality and have not
been compensated. I believe low quality fish set the benchmark for what I am paid and I won’t be
compensated until 1. All harvesters raise quality to my level or 2.I direct market my catch into high end
markets and create a demand for higher quality. Those who are currently not producing high quality
will not do so unless they perceive a direct and clear incentive to improve quality. I have seen no
evidence that the processors have a problem with the overall quality of our catch. Therefore, don’t
believe that incentives for quality will be offered. Nor do I believe that the processors can be mandated
to provide incentives or disincentives. Once again, it must be market driven.
Marketing Subcommittee
1. Do we use existing state salmon promotional entities or do we change the entities? If changed, what
changes should be made? (e.g. ASMI; Division of International Trade & Market Development, other)
I oppose the application of ASMI tax to hatchery cost recovery sales
3. Should the state help individual fishermen promote and market their wild salmon? If so, how?
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 6 -
The state should streamline the permitting process for direct marketing activities. The 3 agency
permitting results in confusing tax requirements and unclear definitions of activities. The net result is
that direct marketing is discouraged. There should be one comprehensive permit with clear definitions
and tax laws.
Finance Subcommittee
1. Are there better ways in which the state can use existing fishing industry taxes to assist the salmon
industry?
I strongly support the current structure of the Commercial Fishing Revolving Loan Fund.
Governance Subcommittee
Hatcheries
1. Would you support legislative development of a State of Alaska hatchery policy and/or performance
standards for hatcheries, and/or changes to the state’s relationship with all hatchery owners?
No. There already are some state policies regarding hatchery production. We continue to work hard to
formulate our aquaculture policies in area E according to our needs. Our production plans laid out by
stakeholders and approved by ADF&G on an annual basis. Despite dismal times in the world salmon
market our hatcheries are operating a balanced budget and are returning 65 percent of production to
common property harvest. The importance of hatchery production to the communities of area E is
impossible to overstate.
Agency Oversight
1. Apart from the Board of Fish decisions, are there other state agency regulations that could be changed
to benefit Alaska’s salmon industry?
Streamline the permitting for processing and direct marketing.
2. Do you support Alaska’s board of fish process? If changes are necessary, what would you suggest?
I support the board process in theory. I support House Bill 283. Designated seats would help to ensure
balance in the represented interests. It would also relax the conflict of interest laws restricting Board
members from voting on issues affecting the very people who supported said board members
appointment. I support strengthening the Advisory Committee process. A strong Ac with much local
participation should decrease the workload of the Board by avoiding redundancy and fringe proposals
with little or no support. AC positions with broad public input and support should carry more weight
with Board decisions.
BoF authority with regard to restructure needs to be clearly defined. A high degree of support
from affected stakeholders in given areas should preclude any restructuring imposed by the board.
3. Do you support a task force created by the legislature to review the Alaska Board of Fish?
I support a one time public panel to review board process.
Seafood Commission
1. Should the State of Alaska develop an Alaska Seafood Commission to annually advise the
legislature on the needs of the seafood industry?
I strongly support the continuation of the task force’s work in some form. The process will be a waste of
time and money if these issues are not revisited after this task force is adjourned.
Economic Development
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 7 -
1. As Alaska’s salmon industry changes, what are the economic development issues, community and
individual concerns that should be addressed by the State Legislature?
The impacts of any restructure schemes on communities and fleets should be scoped by DCED prior to
the implementation.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 8 -
Bruce Jolma
460 NE Alder St
Clatskanie, OR 97016
A little note expressing my view of the Dangerousness of this little Task Force. What they are trying to do, in
theory, is really quite noble. In reality it could be compared to a witch hunt. If you fail any of the tests (i.e. not in
favor of permit stacking, A-B fractionalization, relaxing 32' limit) you are to be shunned or BURNED AT THE
STAKE!
Quality Subcommittee.
#1..Alaska Salmon industry., needs a higher quality product, but it cannot be achieved by only the harvesters.
Tendering and especially processing have to retool to produce a product to compete in the Domestic market
(U.S.) with farmed. If processors continue to due minimal processing in Alaska (head, gut, & freeze) , and
REPROCESS in Japan or some third world shit hole, Harvesters will never get a fair percentage of the real worth
of Bristol bay sockeyes. So with that said, harvesters could bleed, hand deliver individual fish in Styrofoam reefer
bags, and never see a fair % of the final market price. Abusive Transfer Pricing has to END!
#2 State Quality Standard, etc., HELL NO!
#3 Voluntary only
#4 Incentives, etc., The biggest one for me would be for the State to put a bug up the IRS's ass to once and for
all go after the transfer pricing issue. I feel the quality of 95% of the sockeye I deliver are #1's. I have flush
decks, small brailers and deliver my fish while they are still in rigors (4 to 5 hours) . They could compete with
farmed in the Domestic market, IF the foreign owned processors would make them AVAILABLE to the domestic
market. Foreign owned processors WILL NEVER put BB sockeye in the domestic (U.S.) market, at least not in
any meaningful quantity. That would establish a price comparison of what BB sockeye are really worth. This is
turn could be used against foreign owned processors in a transfer price investigation by THE STATE OF ALASKA
AND THE IRS!!!
Marketing Subcommittee.
#1. ASMI cannot market what is not available. Everyone bitches in Bristol Bay that ASMI doesn't market "our"
fish. How can they?
#2 All of the above.
#3 Yes, Streamlining of existing law's,USDA & bond requirement's, etc., to make it possible for fishermen to be
their own wholesale outlets.
Production Subcommittee.
#4. Here comes the push for relaxing the 32' foot limit!!!! Leave the goddamn statute's and reg's alone in Bristol
Bay. For Christ sake, concentrate on the REAL problem........The Price. The old theories of making up the
difference in production make work for factory trawlers but not salmon fisheries. Questions like this make me
very skeptical of the long term goals of organizations like UFA. The State and the IRS should be ENFORCING
the statutes and regulations against abusive transfer pricing. Perhaps your committees should be helping them.
Finance Subcommittee.
#1. Shut them down in areas where they DIRECTLY compete with native run harvest.
#3. Yes per manently retire permits.Offer a fair market price based on average permit price over the years they
have been freely transferred (i.e. average price from 1974 to 2002) A long-term, low interest ,Federal Loan,
repaid by a 1 to 2% raw fish tax on remaining fleet.
Governance Subcommittee.
Agency oversight.
#1. Here's the slippery slope. Just what are your long term goals???
#2. YES.
#3. NO.
Seafood Commission.
#1. Not a bad idea. Where would the funding come from?
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 9 -
Name: Shirley Kelly
Email: bristolbaygold@hotmail.com
Address: 2909 Arctic Blvd #203, Anchorage, AK 99503
Phone: (907) 561-4777 message
Fish Area: Area T
Gear Type: Drift Gillnet
Quality Subcommittee:
1. What does the Alaska salmon industry need to achieve a higher quality product?
Improved transportation infrastructure.
Value-added processing infrastructure.
Lower freight costs.
Implement accepted national and international quality norms:
Careful handling of salmon
Temperature Control
Vessel, Plant and Product Sanitation
Implementation of ASMI quality recommendations.
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
Yes, with a mechanism to ensure all harvesters and processors marketing salmon adhere to the
standard, yet without adverse or insurmountable financial impacts to resident rural fishers.
3. Should the state have a quality education program for industry participants?
Yes, a program that is continually and fully funded. Through this program industry
participants will know what is expected of them to market under the quality program.
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
Increased, stable salmon prices, recognition for a quality product.
Marketing Subcommittee:
1. Do we use existing state salmon promotional entities or do we change the entities? If changed, what
changes should be made? (e.g. ASMI; Division of International Trade & Market Development, other)
Use existing entities with increased funding. and allow entities regional marketing capabilities.
2. Who or what entity or entities should be paying for the promotion and/or marketing of Alaska’s wild
salmon? (e.g. salmon harvesters, processors, federal government/USDA; state general fund; other
federal funds; other sources)
Harvesters, processors, state and federal funds.
3. Should the state help individual fishermen promote and market their wild salmon? If so, how?
Yes, Re-access the taxation structure, small processors should not be penalized for marketing valueadded
products.
Production Subcommittee:
1. How can we remove or reduce costs from the harvesting sector in a way that allows regional selfdetermination?
Transportation infrastructure should be funded; lower freight costs and an assessment of the tax
structure.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 10 -
2. How can we remove or reduce costs and aid the processing sector?
Make it easier for small scale processors, they should be able to go to one entity to apply for the
licenses and permits that are needed.
3. In addition to the removal or reduction of costs, are there statutory/regulatory changes that can help
the harvesters and/or the processors?
Finance Subcommittee:
1. Are there better ways in which the state can use existing fishing industry taxes to assist the salmon
industry?
The current tax structure needs to be reviewed, value-added processors should not have to pay higher
taxes. Hatchery cost recovery and state conducted test fisheries should also pay taxes on their fish
that they harvest.
2. Do current State of Alaska loan practices address the needs of the salmon industry? If not, what
changes would you suggest?
Hatcheries are subsidized by the state and don’t pay taxes on the cost recovery fish that is harvested;
fisherman are not subsidized by the state, they pay taxes on the fish they harvest; if the state
institutes loan forgiveness for hatcheries, fishermen should be able to pay on the loan principle
without being penalized for not being able to pay for the interest.
3. Should the State of Alaska provide for the permanent retirement of limited entry permits in your
fishery? If salmon limited entry permits were retired in your fishery, what incentives would you suggest
for retirement? If funding is needed, who should pay?
Yes, a fair retirement program should be instituted.
Governance Subcommittee:
Hatcheries
1. Would you support legislative development of a State of Alaska hatchery policy and/or performance
standards for hatcheries, and/or changes to the state’s relationship with all hatchery owners?
Yes. Included the hatchery policy development process should be a study that minimizes the
economic and biological impacts that the hatchery fisheries have on natural wild fisheries.
Education
1. What role should the State play in providing fisheries education (K-12, post-secondary, and voc/tech)
in order to promote Alaskans in the fishing and seafood industry?
Fishery education should be taught at all levels of education.
2. Does Alaska’s university system adequately meet the research and post secondary educational needs
of the Alaska salmon industry? If not, what changes would you suggest?
The production and business management of the fishing industry should be taught
along with science and research.
3. If you are displaced by changes in the salmon industry, what could the state do to provide retraining
and/or alternative employment?
Adequately fund existing entities that provide training. Award locally owned organizations who
have the ability to construct economic development projects, which utilizes the local labor force.
Agency Oversight
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 11 -
1. Apart from the Board of Fish decisions, are there other state agency regulations that could be changed
to benefit Alaska’s salmon industry?
Make it easier for fishers to become catcher/processors, one stop application process.
2. Do you support Alaska’s board of fish process? If changes are necessary, what would you suggest?
Yes.
3. Do you support a task force created by the legislature to review the Alaska Board of Fish?
No.
Seafood Commission
1. Should the State of Alaska develop an Alaska Seafood Commission to annually advise the legislature
on the needs of the seafood industry?
No, use existing entities.
Economic Development
1. As Alaska’s salmon industry changes, what are the economic development issues, community and
individual concerns that should be addressed by the State Legislature?
Funding transportation and value-added infrastructure, lower freight cost, review of the existing
tax structure
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 12 -
Name: Joseph Faith
Address: PO Box 1316
Phone: 907-842-1200
Fish_area: (SO3T)
Gear_type: Drift
Finance
3. Should the State of Alaska provide for the permanent retirement of limited entry permits in your
fishery? If salmon limited entry permits were retired in your fishery, what incentives would you suggest
for retirement? If funding is needed, who should pay?
I. I ask that any permit buyback for Bristol Bay be established with the number of fishermen who fished
during the early l970s. Additionally, it seems that a permit buyback will accomplish little without an
increase in price. A buyback will presumably increase volume for fewer fishermen. However, I
understand that pinks in Southeast bring 5 cents/lb. You have to catch a million pounds to make that
pay. In Bristol Bay in 2002, chums paid 7 cents/lb. Whatever reasons are given for these low prices
could also be given to reduce the price of reds down to 10 cent/lb. It may take a few years to lower the
price but it could easily be reduced.
As I expressedin my November 8 letter, I believe that aggressive marketing by everybody can make a
difference in meeting the farm-fish competition head on and increase the price for quality wild salmon in
the long run. In the short run, fishermen should be given subsidies, just like the farmers, auto
manufactures, and bankers. The disaster money that has been given to the municipalities and local
organizations doesn’t really seem to help get fishermen back on their feet.
II. I ask that the benefit of the resource be made available to as many people as possible. Historically, in
England, the King and his royal men received the grant of right to fisheries. In the United States, the
people own the right to the resource. The government, however, holds the rights in trust for the benefit
of the people, and not as a prerogative for the advantage of government as distinct from the people. In
short, the King and his royal men do not have an exclusive right to the resource, nor as a pretext for the
public good. The framers of the Alaska constitution recognized the importance of providing the benefit
of the resource to the people in enacting its “common use” and “no exlcusive fishery” sections.
Limited entry by itself has been found consistent with these two principles. However, I ask that these
principles be kept in mind when any further limiting is done. The fisheries should not be just for the
“well to do.” They should not be structured to ensure the wealth of only a few permit holders and their
permit values. We should not regress to having princes and their families own the fisheries. A poor
man from a coastal village should not have to stand on the beach and watch while others who come from
miles away catch the fish off his doorstep. The benefit of the resource should reach the coastal
communities.
III. I also ask that any restructuring be done to leave enough flexibility to take into consideration future
generations. Young Alaska Natives have become known as “after-borns” because they were born too
late to become shareholders of any ANSCA corporation. Similarly limited entry created “after-borns”.
Young people who wanted to fish couldn’t do so because o the high price of the permits and boats.
Additionally, limited entry allows permit holders to pass permits down to people who do not even know
how to fish or run a boat simply because of wealth, lineage, or happenstance. Reissuance of all or some
permits could be accomplished through an apprenticeship system, or a lottery, or both.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 13 -
Name: Alaska Independent Fishermen’s Marketing Association (AIFMA)
Email: aifma1@seanet.com
Address: P.O. Box 178, Naknek, AK 99633, or P.O. Box 60203, Seattle, WA 98160
Phone: (206) 542-3930
Fish Area: Bristol Bay
Gear Type: Drift gillnet and some setnetters
AIFMA is the largest fishermen’s association in Bristol Bay and has been in existence for over thirtyfive
years. AIFMA owns property in Naknek for the purpose of one day operating and basing a
fishermen’s cooperative there. Our mission is to protect the renewable salmon resource and promote
economic sustainability for commercial salmon permitholders in Bristol Bay.
Quality Subcommittee
1. What does the Alaska salmon industry need to achieve a higher quality product?
Alaska needs to achieve a significant change in the underlying buying structure for salmon in key
fisheries, such as in Bristol Bay. The market should be the driving force with regard to quality standards
of Alaskan salmon products. This is the only logical way that a workable structure can evolve to
accomplish a goal of higher quality products.
In order to analyze quality problems, Alaska needs to examine the production-driven buying structure in
fisheries such as Bristol Bay, starting with the Japanese parent company, to its U.S. subsidiary and to the
fleet. The vast majority of sockeye leaves Bristol Bay, either as a frozen H&G product on a Japanese
freighter, or in a can on a container barge—in other words, with high volume primary processing at low
prices. This is the underlying structure of our production-driven model and is a significant problem.
Bristol Bay sockeye salmon are purchased as a bulk commodity and are treated accordingly at all stages
of harvest and production. Fishermen simply comply under these guidelines as prescribed by the
processor/buyer structure. Conversely, fishermen would fish for quality, if the structure was high
quality, high price driven.
Bristol Bay fishermen sell the bulk of the sockeye harvest to a few, very large, multi-national
corporations. To bring balance to this existing structure, Alaska needs to promote and support new
wholly–owned U.S. seafood companies. This could accomplish three things. First, competition for
sockeye would be increased. Second, the basic structure for secondary processing of salmon products
would more likely occur. And third, markets for these products would be diversified and become more
durable.
Note: According to the 1993 Forbes Report, Bristol Bay Salmon Investigation, (File No. 661-91-046)
conducted by the State of Alaska, Dept. of Law: “Our investigation found that the processor level of the
Bristol Bay market is very much an oligopoly because the same few firms consistently control fifty
percent or more of the annual production.”
“…fishers are told that only if the final market demand for salmon is increased (by, say, the actions of
the Alaska Seafood Marketing Institute) can they expect to receive a higher price per pound for their
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 14 -
efforts. The policy recommendations forthcoming from the Supply/Demand school of thought are then:
(1) develop new products, (2) improve product quality, and (2) develop new markets. The
Supply/Demand school never recommends that Alaska take direct action to improve the bargaining
position of fishers vis a’ vis processors or processors vis a’ vis their Japanese customers.
In contrast, if the Japanese buyers of Alaska salmon wield collusive market power in their dealings with
processors, or if the processors do so in their dealings with fishers, then direct action to level the
playing field becomes a priority. The improvement of product quality and the development of new
products and new markets remain important goals but in addition two new goals are added: (1) to
extract the maximum dollar return from Alaska’s salmon resources by actively intervening to
counterbalance Japanese market power, and (2) to eliminate practices that artificially and illegally
reduce the price paid to fishers.”
B) Should chilling at point of harvest of commercially harvested salmon be mandatory statewide?
If the ice is available, should it be mandatory statewide?
AIFMA does not favor mandatory chilling standards at the point of harvest, but supports continued
efforts to improve product quality. The salmon market should be the driving force to the chilling of
salmon onboard harvester vessels. A “one-size-fits-all” law would not be appropriate for all regions of
Alaska. For example, a large percentage of the Bristol Bay sockeye harvest is canned and may not
require onboard chilling.
The current schedule of short openings (6-10 hours) in Bristol Bay allows for the fish to be chilled
immediately upon delivery to RSW salmon tender vessels.
Salmon standards and grades need to be further developed and should be important links to quality
controls. For example, bacteria counts and propagation are critical to the freshness of salmon. How do
you compare the quality of a Bristol Bay fish that is not iced onboard, but delivered to a RSW tender
within hours of being harvested, to a salmon that was caught and chilled, but held onboard for five days
or longer, before processing? These important quality factors need to be quantified and identified
along the entire market cycle from harvest to consumer plate. This includes steps from tendering,
processing, shipping, cold storage, secondary processing to retail sale.
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
ASMI may be the appropriate agency to address developing potential quality standards and/or a state
quality seal. Alaska should not create a state quality commission.
3. Should the state have a quality education program for industry participants?
ASMI has a quality education program for industry participants.
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
Fishermen will continue to improve the quality of their harvest, as higher values (prices) are paid to
them. Market diversification and new product forms are also incentives for quality improvements.
Marketing Subcommittee
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 15 -
1. Do we use existing state salmon promotional entities or do we change the entities? If changed,
what changes should be made? (e.g. ASMI; Division of International Trade & Market
Development, other)
In theory ASMI could be capable of accomplishing the task of promoting Alaska salmon in ways that
would help generate economic benefit to the fishing industry. We feel that some adjustments in the
structure of ASMI may need to be implemented before the appropriate promotional goals can be
achieved.
For example, AIFMA has recognized that corporations operating in the wild salmon industry have
conflicting ties and/or ownerships with the corporations operating in the farmed salmon industry.
Successful marketing strategies for farmed salmon may be detrimental to marketing efforts for wild
salmon. Processors with interests in farmed salmon operations or brokering/sales of farmed salmon
should be disallowed from a voting seat on the ASMI board.
ASMI has been unable to effectively market sockeye salmon to alternate markets, such as the United
States, because current salmon processors/buyers have chosen not to sell sockeye into these markets.
Until this situation changes ASMI will be unsuccessful in developing diverse and competitive markets.
State laws should be changed to allow ASMI to help develop and support regional marketing programs.
This effort will assist new companies in Bristol Bay, and in other regions of Alaska, to promote
competition and market diversity for our fish.
2. Who or what entity or entities should be paying for the promotion and/or marketing of Alaska’s
wild salmon? (e.g. salmon harvesters, processors, federal government/USDA; state general fund;
other federal funds; other sources)
Salmon harvesters, processors, federal government/USDA, state general fund, and other sources should
all pay for the promotion and/or marketing of Alaska’s wild salmon.
AIFMA will support the 1% assessment, if processors with conflicting interests in, or brokering of,
farmed salmon are disallowed from the ASMI Board.
3. Should the state help individual fishermen promote and market their wild salmon? If so, how?
We support regional marketing efforts that may include individual fishermen. These marketing efforts
will naturally help build new, small companies. New companies are the essential ingredient in helping
solve our market and pricing problems.
Production Subcommittee
AIFMA feels the production committee is particularly vital because it deals with potentially changing
the legal structure of fishing permits and rights. We would like to point out a conflict of interest that may
exist on this committee. Don Giles, represents Icicle Seafoods, a defendant in the Bristol Bay anti-trust
price fixing case.
1. How can we remove or reduce costs from the harvesting sector in a way that allows regional
self-determination?
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 16 -
AIFMA and the majority of Bristol Bay drift permitholders support a permit buyback program.
Problem: The Bristol Bay salmon drift net fishery faces a chronic economic downturn.
• There is overharvesting capacity in Bristol Bay.
• ADF&G management practices have dictated that the fleet fish in smaller fishing areas to achieve
management goals. This has led to congestion that has created unsafe conditions for the fleet and a
poor work environment.
• There is a long-term decrease in the economic value of the fishery due to:
1. Chronic decrease in run size, and
2. Chronic decrease in ex-vessel prices.
Other problems that are causing a downward economic trend for driftnet harvesters include:
• Increase in number of permits from the initial level (1975) of about 1,416 permits, when limited
entry was put in effect, to the nearly 1,900 permits in the fleet today,
• Unmitigated Bristol Bay sockeye interceptions outside of U.S. jurisdiction,
• Increased subsistence and sports demands have decreased the common property harvest during any
given season, and
• Under regulated Bristol Bay sockeye interceptions in the North Aleutian Peninsula fishery.
Discussion:
AIFMA supports Alaska’s current Limited Entry Law. Under Limited Entry drift permitholders in
Bristol Bay can fish all openings permitted by gear type, with the allowed complement of gear and sell
their harvest to the market of choice.
After careful review of all proposed consolidation plans AIFMA supports a permit buyback plan as the
best alternative to decrease harvesting overcapacity of the Bristol Bay driftnet fleet. A buyback would
increase permitholder’s harvest, decrease congestion, increase safety and simplify management, without
changing the legal structure of Alaska’s limited entry law.
A buyback would allow for excess permits/harvesting capacity to be removed from the fishery
quickly and costs of the program would be spread out fleet-wide and paid back gradually over a
twenty-year period. A buyback would not change the legal structure of harvesting rights that are
currently held, one group or another would not be advantaged or disadvantaged and remaining
fishermen would retain equal access to the fishery.
A buyback is supported by fishermen in Bristol Bay. The Commercial Fisheries Entry Commission
(CFEC) surveyed Bristol Bay drift permitholders about their support of a buyback in Bristol Bay (CFEC
Report Number 02-4N, November 2002). Permitholders were asked how they felt about a buyback
program to reduce the number of entry permits in the Bristol Bay salmon drift gillnet fishery, if permit
holders were taxed a percentage of their earnings from the fishery to fund the buyback program. Sixty
percent of respondents favored such a program. In comparison, 81% of all respondents favored a
buyback program if funded by an alternative funding source, and not by fishermen.
The CFEC is currently conducting an optimum number survey for Bristol Bay and final results will be
released within a year. An optimum number study is very important under Alaska law and critical for a
buyback effort to be carried out. If the CEFC determines that the optimum number of permits is less
than the number of permits currently outstanding in the fishery, then the CFEC will be in position to
defend a buyback program
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 17 -
Recommendations:
• AIFMA recommends that the Alaska Limited Entry Law be left intact.
• AIFMA recommends that the number of Bristol Bay drift permits be reduced to the optimum
number as determined by the Optimum Number Study now being carried out by the Commercial
Fisheries Entry Commission. The results of this study will be finalized in 2003.
• AIFMA recommends that the National Marine Fisheries Service Fishing Capacity Reduction
Program be selected as a leading choice of buyback and consolidation options. In our discussions
with NMFS it has been stated that the Bristol Bay salmon fishery can qualify for the plan,
either as a fishermen-financed program or as a subsidized program with an appropriation from
Congress without jeopardizing Alaska’s sustainable fishery designation.
(Excerpt from e-mail (9/27/00) from Michael Grable, Chief, Financial Services Division,
NMFS): “…the three elements of the “necessary” requirement are disjunctive rather than
conjunctive. Buyback proposals need, consequently, meet only one of the three elements.
Generally, the last element (achieving measurable and significant improvements in conservation
and management”) will be the easiest to meet in most fisheries, but the other two elements might
also be involved in some fisheries. Each buyback request must make its own case on the merits
of the specific circumstances involved in the buyback fishery, but significantly reducing
capacity in a fishery that demonstrably has too much fishing capacity for the sustainable
resource can hardly help but measurably and significantly improve the fishery’s conservation
and management. I believe that meeting the last element should be mostly a matter of
reasonable analysis, evaluation, and exposition.”)
• AIFMA recommends that equal opportunity be preserved in the Bristol Bay driftnet fleet.
AIFMA is opposed to any proposed plans that would restrict or take away time, area or gear
from an individual permitholder.
• AIFMA does not support consolidation/rationalization plans that would lock up production to
certain salmon buyers and/or restrain or lock out competitive/alternate buyers. A free and
competitive market is essential for a strong economy statewide and for the communities of
Bristol Bay.
2. How can we remove or reduce costs and aid the processing sector?
• Encourage dock-side deliveries whenever possible. This would reduce tender costs, handling of
fish and improve quality.
• The State of Alaska, with the assistance of the IRS, needs to study the effect of abusive transfer
practices in the salmon industry with respect to the loading in of costs and the marginalization of
processor profits.
The following article is reprinted from the AIFMA Leader, September 1995 and addresses the issue of
abusive transfer pricing.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 18 -
Transfer Pricing—Does it Affect Bay Sockeye Prices?
North Pacific fishermen wonder why fish prices seldom seem linked to final market prices. And in
recent years, the increased strength of the yen has not translated to higher grounds prices. You may have
asked, “How do these large gaps occur and who really ends up with the profits? Are other forces at
work?”
Japanese ownership of U.S. processors is increasingly suspect as an anti-competitive force. After all,
Japan is the leading consumer of much of Alaska’s seafood products. Suspicion runs high that U.S.
managers are under some type of foreign “directive and control” when it comes to setting fish prices
paid to fishermen. The recent Bristol Bay salmon price-fixing lawsuit reflects these concerns.
What it boils down to is whether or not these U.S. subsidiaries are dealing with their foreign parent firms
“fairly” when it comes to establishing sales prices for products shipped to Japan. Wisely, fishermen
know that, if those international product sales occur at low values, it will be reflected in lower fish prices
to fishermen.
But as AIFMA previously reported, Gunnar Knapp of the Salmon Market Information Service, stated
last year, “There is nothing written that says prices paid to fishermen need to be fair.”
Is Mr. Knapp correct? Well, the U.S. has had laws on the books for many years regarding such
intercompany transfers. These transfers are covered under IRS Tax Code Section 482—known as
Transfer Pricing.
Transfer pricing is a complex issue of great magnitude. It is the leading tax issue for international
business. Let’s see if we can define it and show how it influences fish prices.
A transfer price is the price charged by one company to a related company, whenever they allocate
income and expenses among themselves. This can be the price an affiliate charges for product obtained
and processed in the U.S. and then transferred to its foreign parent for management services or technical
know-how (and labor) provided.
Whenever these “intrafirm exchanges” take place among affiliates across our national borders in such
multi-national corporations (MNC’s), U.S. tax jurisdiction becomes a huge concern. The bottom line is
whether or not the U.S. company properly reflects income attributable to its operations within the U.S.,
or whether its foreign parent is using pricing strategies to avoid higher effective U.S. taxes.
The Transfer Pricing powers of the IRS are large. These powers are based on the concept of whether or
not such controlled transfers among related companies take place under the same market influences as
uncontrolled transactions between separate firms. That is, “Are prices determined ‘at arm’s length’ to
clearly reflect the income of any such organization?” The IRS can simply reallocate the “correct” level
of profits to the U.S. side, but it seldom recaptures the full amount of taxes unpaid. Meanwhile, the netof-
tax revenues also remain overseas.
In the Alaska seafood industry, we can ask if a foreign parent company is “milking profits” away from
its U.S. subsidiary by Abusive Transfer Pricing. At the least, this means the U.S. processor has less cash
when it comes to setting prices paid to U.S. fishermen.
As the IRS pursues U.S. processors who send out national resources overseas, an underlying concept is
the establishment of a “fair and economically justified price” for those resources. The cost of fish
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 19 -
landings is a key part of the price for U.S. seafoods. So, the fairness of fish prices is directly tied to
whether or not transfer prices were indeed fairly determined or “abused” U.S. transfer pricing tax laws.
The IRS is currently investigating at least one of the industry’s leading foreign-owned processors on
matters of Transfer Pricing.
However, the IRS and a MNC can agree to establish “advanced pricing agreements” (APA’s) which
address IRS section 482 audit issues. This can severely influence future fish values, as a component of
these processors’ costs when they establish such formula-based APA’s with the IRS.
“Who is representing U.S. fishermen during APA-setting, and putting the legs back on the bargaining
table for fish prices?” Also, “Who is representing the U.S. when it comes to Americanization—as
defined by the highest overall taxable profits from our fisheries—to obtain the greatest overall benefit
for our nations?”
The tax strategies of MNC’s can prevent their U.S. subsidiaries from reflecting fair market prices. These
strategies can keep currency rate changes and other forces from influencing your fish price as they use
Transfer Pricing for their strategic tax goals.
So, as fishermen, you must become increasingly concerned and educate yourselves on the modern
complexities where tax and trade issues work together against you. Transfer Pricing is a key issue to
consider when you evaluate how the legs have been cut off the fish price bargaining table.
In addition, if policy-making boards are staffed by members of MNC-subsidiaries, can there ever be
“fairness” in the light of when you now know about their strategies of Transfer Pricing?
3. In addition to the removal or reduction of costs, are there statutory/regulatory changes that can
help the harvesters and/or the processors?
Finance Subcommittee
1. Are there better ways in which the state can use existing fishing industry taxes to assist the salmon
industry?
The State should consider giving tax incentives to new companies that meet secondary processing and
alternative market criteria.
2. Do current State of Alaska loan practices address the needs of the salmon industry? If not, what
changes would you suggest?
Alaska loan practices have led to the overcapitalization of some of Alaska’s salmon fisheries. In other
words, past loans for permits and boats were granted that would not have met private banking/loan
standards. A fine kettle of fish!
Alaska should consider a loan program for new companies that meet secondary processing and
alternative market criteria.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 20 -
3. Should the State of Alaska provide for the permanent retirement of limited entry permits in
your fishery? If salmon limited entry permits were retired in your fishery, what incentives would
you suggest for retirement? If funding is needed, who should pay?
AIFMA supports permanent retirement of limited entry permits as supported by an optimum number
study of the Bristol Bay driftnet fishery. See Production committee Question #1 for AIFMA’s full
discussion of this issue.
AIFMA supports permanent retirement of permits that have been repossessed by the state when loans
are defaulted.
Governance Subcommittee
Hatcheries
1. Would you support legislative development of a State of Alaska hatchery policy and/or
performance standards for hatcheries, and/or changes to the state’s relationship with all hatchery
owners?
The State should develop a comprehensive hatchery policy with performance standards. There are many
issues concerning hatcheries that directly affect the commercial fishery and the salmon resource. A
careful analysis regarding the detrimental affects of current hatchery policy should be prepared. This
analysis could be the basis for policy and ownership changes that would benefit the industry as a whole.
Education
1. What role should the State play in providing fisheries education (K-12, post-secondary, and voc/tech)
in order to promote Alaskans in the fishing and seafood industry?
The State should provide fisheries education to students on all related subject material on fisheries and
how economic forces shape them.
2. Does Alaska’s university system adequately meet the research and post secondary educational
needs of the Alaska salmon industry? If not, what changes would you suggest?
Apparently Alaska’s university system has not adequately met the required research to help the salmon
industry based on the current state of affairs. Research needs to be focused on two issues.
First, research should be focused on the detrimental effects of foreign ownership on the Alaskan salmon
industry as laid out in the 1979 Jeremiah Sullivan and Per Heggelund Pacific Rim Research study
“Foreign Investment in the U.S. Fishing Industry”.
Second, the problem of interceptions of Alaska salmon resources within the Russian Maritime EEZ
needs to be fully understood and acknowledged. Only then will we understand the economic impacts
these interceptions have had on Western Alaska’s fisheries.
3. If you are displaced by changes in the salmon industry, what could the state do to provide
retraining and/or alternative employment?
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 21 -
A permit buyback program would allow for fishermen to leave the distressed salmon industry with
reparation for retraining.
Agency Oversight
1. Apart from the Board of Fish decisions, are there other state agency regulations that could be
changed to benefit Alaska’s salmon industry?
AIFMA supports rigorous enforcement of the existing State of Alaska’s antitrust provisions.
Enforcement of these provisions is essential to help new companies restore competition and evolve to a
mature market structure.
2. Do you support Alaska’s board of fish process? If changes are necessary, what would you
suggest?
AIFMA supports the Alaska Board of Fish process.
3. Do you support a task force created by the legislature to review the Alaska Board of Fish?
We do not support a task force to review the Alaska Board of Fish process.
Seafood Commission
1. Should the State of Alaska develop an Alaska Seafood Commission to annually advise the
legislature on the needs of the seafood industry?
Alaska should not develop an Alaska Seafood Commission. ASMI can provide this service.
Economic Development
1. As Alaska’s salmon industry changes, what are the economic development issues, community
and individual concerns that should be addressed by the State Legislature?
Any infrastructure that would aid in the development of new companies and market diversification is
important and would create the economic engine vital to the future success of communities and the
fishing industry.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 22 -
Name: Adelheid Herrmann
Email: herrmann@gci.net
Address: 1501 W. 11th Ave. #15, Anchorage, Ak. 99501
Phone: (907) 279-6138
Fish_area: Bristol Bay
Gear_type: Salmon Drift Gillnet
November 30, 2002
Quality
1. A) What does the Alaska salmon industry need to achieve a higher quality product?
The industry needs the ability to change to achieve a higher quality product.
B) Should chilling at point of harvest of commercially harvested salmon be mandatory statewide? If the
ice is available, should chilling at point of harvest of commercially harvested salmon be mandatory
statewide?
No, nothing should be mandatory until the processing and fishing industry can comply. The salmon
fishery in western Alaska does not have the infrastructure in place to meet any new standards set for
chilling. Some regional hubs may be able to have ice machines but many of the smaller areas do not
have minimum infrastructure such as a dock. There are many small boats, wooden and other, that will
not be able to hold much ice.
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
Yes, the State should be involved but there should be an extensive public process as well.
3. Should the state have a quality education program for industry participants?
Yes, the State should have a quality education program but could work in partnership with ASMI, FITC
and the Marine Advisory Program.
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
A decent price for the produc so that the harvestors can be sustained in the industry.
Marketing
1. Do we use existing state salmon promotional structures or do we change the structures? If changed,
what changes should be made?
The Alaska Seafood Marketing Institute does a good job of advertising and promoting our salmon but
the current structure has barriers. The barriers need to be identified, listed and a process or action plan
needs to be developed in order to have a more effective organization. If this does not happen, a new
structure needs to be developed that can
take our product to market and sell it.
2. Who or what entity or entities should be paying for the promotion and/or marketing of Alaska’s wild
salmon?
A partnership between the State, Processors and the fishermen. This partnership should exist now
through ASMI and ASMI goes after Federal grants to supplement State and fishermen monies.
3. Should the state help individual fishermen promote and market their wild salmon? If so, how?
Yes, the State should give fishermen the access to tools that the State develops. Fishermen's Direct
Marketing Handbooks and Guides, ASMI's research on foreign markets. The State should provide miniPublic
Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 23 -
grants for marketing and promotion and keep it as a consistent program.
Production
1. How can we remove or reduce costs from the harvesting sector in a way that allows regional selfdetermination?
Allow regions to do regional economic development and economic recovery plans. Have the State work
with them in these recovery plans. In addition, utilize resources such as the Denali Commission. These
processes are being formulated now in the State but could use some polishing with more coordinated
efforts among economic development and workforce development providers. Long-term plans need to
be developed and then a plan of action with follow through.
2. How can we remove or reduce costs and aid the processing sector?
Bring back the tax incentive plans for processors. Fred Zharoff's old legislation.
3. In addition to the removal or reduction of costs, are there statutory/regulatory changes that can help
the harvesters and/or the processors?
Examine the $10,000 bonding requirement for small processors and eliminate it if necessary.
Finance
1. Are there better ways in which the state can use existing fishing industry taxes to assist the salmon
industry?
100% of the State Fisheries Business Tax should be given back to the communities to invest in the local
community. The impact the fishing and seafood industry has on small communities is phenomenal,
paying the communities to adjust and cope with these impacts is a good way to spend State money.
2. Do current State of Alaska loan practices address the needs of the salmon industry? If not, what
changes would you suggest?
Fishermen need as much financial help as they can get, anything that sustains them in the way of loan
forgiveness etc. and helps sustain them and the industry should be examined.
3. Should the State of Alaska provide for the permanent retirement of limited entry permits in your
fishery? If salmon limited entry permits were retired in your fishery, what incentives would you suggest
for retirement? If funding is needed, who should pay?
An optimum numbers study is being done for Bristol Bay. We should see the outcome of that before
we talk about retiring permits. An Alaska resident fishery should be researched. Who should pay for
the retirement? The State should, since the permits are a privelage granted to the fishermen by the State.
Hatcheries
1. Would you support legislative development of a State of Alaska hatchery policy and/or performance
standards for hatcheries, and/or changes to the state’s relationship with all hatchery owners?
Yes, there should be a State hatchery policy developed with extensive public input. More public
educational information should be developed on the hatchery system in the State.
Education
1. What role should the State play in providing fisheries education (K-12, post-secondary, and voc/tech)
in order to promote Alaskans in the fishing and seafood industry?
The State of Alaska should provide existing resources for curriculum development for degrees or
certificates. Degrees could easily be developed in Fisheries Public Policy, Seafood Business and
Marketing, Roe Technician training, etc. The resources are there to develop these degree programs the
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 24 -
information needs to be pulled together and there needs to be committment from the Higher Education
systems to provide the programs.
2. Does Alaska’s university system adequately meet the research and post secondary educational needs
of the Alaska salmon industry? If not, what changes would you suggest?
I would suggest that a process be examined that would begin conversations on cooperation,
collaboration and coordination between the State of Alaska, the University of Alaska system and
potential users of the education system. There are many opportunities in the SFOS programs in the
degree programs and research programs that young Alaskan Natives and Native Alaskan people could
take advantage of but there the networking is not being done. This could be done more effectively with
little effort. The Fishery Industry Technology Center (FITC) in Kodiak needs to provide internship
programs and the CDQ groups need to work with FITC to make this happen.
3. If you are displaced by changes in the salmon industry, what could the state do to provide retraining
and/or alternative employment?
Develop an Urban/Rural partnership tha offers training and employment at the end of the training. A
person could live in rural Alaska and commute to urban Alaska for work. Job sharing should also be
examined.
Agency Oversight
1. Apart from the Board of Fish decisions, are there other state agency regulations that could be changed
to benefit Alaska’s salmon industry?
The rapid response program that is supposed to respond to economic and natural disasters needs to be
overhauled so that it works for people that are in need.
2. Do you support Alaska’s board of fish process? If changes are necessary, what would you suggest?
I do support the Board of Fish process. There are many changes that could be examined and pursued.
One might be the continuation of a layman's board that would have paid commissioners much like the
CFEC Commissioners, in addition, the Board would also have a Resource Economist, that takes a closer
look at the economic impacts of BOF decisions. The Advisory Committee process is a good system but
should have the new "Stakeholder" committee process examined to see if it deletes the power of the
elected advisory committee process.
3. Do you support a task force created by the legislature to review the Alaska Board of Fish?
Yes, but I do not agree with any kind of legislative oversight of the BOF process other than the current
legislative confirmation process.
Seafood Commission
1. Should the State of Alaska develop an Alaska Seafood Commission to annually advise the legislature
on the needs of the seafood industry?
Yes, but it needs to be as non-political as possible. The trouble we have with appointments to such
commissions is there is too much self-interest and not enough Statesmanship that looks at all needs of
the State.
Economic Development
1. As Alaska’s salmon industry changes, what are the economic development issues, community and
individual concerns that should be addressed by the State Legislature?: The State Fisheries Business Tax
needs to be examined to help communties that are being devastated by fishing disasters. When disasters
are declared there has to be some financial help behind it - the current process of declaring disasters with
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 25 -
no money behind it helps the individual very little. The Federal Government needs to step up to the
plate as well – The Magnuson-Stevens Act that addresses disasters needs to have an implementation
plan developed. Someone needs to take a leadership role to begin helping communities address the
many social problems and build good coping models that can be shared between regions. The leasing of
permits by elders to younger people should be examined.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 26 -
Richard A. Hendricks
bearh@gci.net
HC02 Box 7586F
Palmer, AK 99645
(907) 746-2265
Bristol Bay, 18 years
Aleutian Penn. 12 years
December 1, 2002
Quality
Gillnet fish: Vessels towing nets against current at line in Naknek River and other district lines. While
ADFG and State Troopers watch with video camera running on bank of river, fish are mutilated before
even getting aboard vessel . Crewmen jerk and slam fish out of nets, without regard to quality . Get this
fishery back to a drift net fishery and quality will improve markedly.
Ice or RSW? Ice is often overlooked as maybe a better solution than RSW, it lasts longer and
does not add prohibitively to the vessel weight, draft and maneuverability of the vessel. Also, tanked
boats lose a lot of speed when traversing the district to get to fish. Ice could be more readily available on
barges, tenders, dock, and floats. Flake ice makers or disc ice machines on vessels as an option to RSW.
2. NO. Too involved and not cost effective
3.Yes handling of fish and cleaning, hygiene and sanitation of vessel holds.
4. Markets could be more involved in finding out who produces which quality and grade product and
price accordingly.
Production
1. BB limit vessel to 2 participants only. This reduces the effort substantially without undue impact
on owners.
Fish farming is not viable economically with our wage and cost structure and its potential to
harm wild Alaska Salmon runs is very real. Fish escaping and waste and biological diversity are
being greatly impacted already. It also only compounds the problem of crowded markets and does
not in any way help the cause already at hand. As a visitor of the Chilean fish farms in ’95 (ON MY
OWN DOLLAR) I returned and warned of many of these problems today. Fish farming is an
industry of itself and does not in any way really accommodate the catcher fleet.
2. Work with agencies on a priority basis to facilitate permiting.
3. The use of salmon as a welfare fund is detrimental to those who should and could help the
industry forge ahead; examples of this are boat an permit holders restricted few options. Very
high capital costs and risks, flexibility in marketing approaches are lost due to the fear of run
fluctuations and lack of alternatives today. In the past , one could use a vessel in other fisheries,
such as halibut to help recover from a poor salmon run. Now he has to capitalize further in
another risky venture to participate, negating any benefit of that option, whereas he already has
the necessary equipment and experiences to participate in other salmon fisheries.. Its like any
business and should be allowed to operate like others under state and federal laws.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 27 -
Finance
1. Taxes.
2. Commercial Fishing loans. The state should examine the limited entry program and see what it
has created. For many years the state managed based on sound scientific and conservation
principles. Staying out of allocating the resource to user groups. Fishermen invested in what the
opportunity was; like any other business venture. When allocation changes the status quo, the
opportunity for some is either reduced or enhanced. The individuals with reduced opportunity
then finds themselves unable to produce and operate a viable business. Is this what was intended
when he purchased his permit? Was not the permit system in itself a solution to allocation? With
equal opportunity for all willing to invest and work in the fisheries? What do you have left if half
your production is eliminated and allocated to another user group in your area or another area
altogether? Does the state not have the responsibility to safeguard or protect the individual in this
situation? Conservation and natural run fluctuations are inevitable obstacles, but damages from
allocations and political scheming are beyond the control of fishing business operators. They
should be compensated for losses just as anyone who might lose half a farm or other business
entity to a Highway or some other public acquisition of property or use. Even though the state
says the permit is not a right, but a privilege it should remain a viable entity as it was when
bought or why would any one take such an enormous risk if he knew his life savings and
investment would be allocated away. Few people today received their permits free, many have
had to invest enormous sums to participate. Values were arrived at in a free market based on
historical catches and opportunity. If the state allocates away the opportunity then it should also
absorb the loss or transfer the liabilities to the recipient of the gain in opportunity. It can not
morally work any other way.
3. Do not retire permits. They are another constant. They provide opportunity on an equal basis. No
more should be issued either. By the same token. Let the market work it out.
Marketing
1. As an longtime Alaska fisherman, I have heard far to much from the marketing people and
economists we pay fish taxes to about how poor our quality is. For the last ten years we have
heard over and over again that we need to improve quality and that our fish are poor. Well guess
what? The market has also.. As one who has invested large sums in RSW and NOMAR brailers
and timely deliveries and all other care and handling techniques I see it only has further reduced
my proceeds. I would be better off today had I done nothing like so many others. I feel they have
done more to ruin our reputation of quality worldwide by publicizing this repeatedly in all forms
of press and advertising. I thing the food and drug should ensure quality and marketing people
should create demand. I strongly doubt Ford or Firestone emphasize safety hazards when
marketing their leading brands. Marketing is all about creating an image people want and
convincing them they can’t do with out your product. Quality alone is not going to sell anything.
We also need to have some protection for our products in this country. Laws in employment and
many other areas are either more relaxed or nonexistent in other countries..
2. The farmed and imported salmon should pay a marketing tax to promote all products especially
those they displace
3. The state has many informational agencies that could help provide for the needs of individual
marketers such as the trade center in Anchorage.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 28 -
Governance
1.Hatcheries have been beneficial to many fishermen. However they have not been fairly treated.
Whereas; they all use the same ocean resources, sometimes at the expense of others. Political
opposition by some groups jeopardized hatcheries in some parts of the state while others continue to
use the same resources.
Education
1. It is hard to create a program in the secondary schools that could prepare one for the fishing
industry.. Other than the basic skills, which are needed in any occupation, the changing nature of
the business tends to lend itself to higher education programs. I would certainly like to let them
know at an early age that the industry should not be used as reason to not pursue an education or
skills to be used in other fields.
2. I have participated in educational programs by the university and vo tech and found them
helpful.
3. They could fund education opportunities and training for those who are willing to pursue other
careers and the state would most likely benefit greatly by their life experiences and the greater
gain of society would be enhanced.
Agency oversight
1. Salmon fisheries in some areas are known as battlezones, I for one often have wondered why no
one has been killed. Many fisheries operate lawlessly as far as rules of the road , coast guard regs
obusive fishing practices, reckless operation of vessels including raming and running over and
into fishing gear which are already prohibited in statute. The State troopers have sat idly by and
let these practices multiply, especially in BB. Vessels should observe safety rules of the road and
safe speeds in congested fishing areas. There should be no physical contact of vessels or gear
tolerated.
2. The Alaska board of fish process is out of control. The quality of board members is atrocious.
The selection of board members should be like the depolitized judicial appointments that work so
well in the state.
3. A task force should review all work of the board for the last 6 to 10 years. Allocation based
decisions should be recinded. The politics removed and conservation and scientific data brought
back in as the prevailing guidance on board decisions. Too many people have been destroyed by
the recent board actions. I have participated in many board meetings over the last 20 years and I
have seen decisions made that altogether reject the will of the people participating in the process
and the scientific evidence presented. Decisions have been handed downs that were not even in
the proposal booklet, or given a chance to be discussed. Board members and third parties have
had an agenda and created policy outside the board process. Please do change and oversee this
board.
Seafood commission
1. A good idea if the board is not politically motivated. How do you insulate the members from
undue influence.
Economic development
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 29 -
The changes proposed in harvesting coops and other means will tremendously affect local
communities and individuals involved in off peak fishing ventures. The demise of viable
experienced crewmen jobs in communities is already evident in chignik. The skills needed are not
going to be passed on as in the past. Fewer opportunities in other fisheries, such as halibut as well. I
see many people looking for alternative fisheries, but not much is available for salmon equipment, or
is it viable for use in other areas or open ocean ventures. Vessels are too specialized to the areas and
gear types they salmon fish. Whether it be length , draft or capacity for areas away from established
centers for fuel, repairs or markets. Also safety concerns in areas most of the rest of the year.
Thank You For this chance to participate.
Richard A. Hendricks
bearh@gci.net
HC02 Box 7586F
Palmer, AK 99645
(907) 746-2265
Bristol Bay, 18 years
Aleutian Penn. 12 years
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 30 -
Name: David R. Arnsdorf, President,
Alaska Manufacturers' Association, Inc.
Email drarnsdorf@alaskamfg.com
Address: Suite 406, 3201 "C" Street, Anchorage 99503
Phone: (907) 565-5655
Fish Area: statewide seafood quality certification
Gear Type: all species, all gear types, all regions
November 30, 2002
Quality
1/a. What does the Alaska salmon industry need to achieve a higher quality product?
It is mainly a matter of attitude. While there are certainly some logistic and financial problems to solve,
they can be solved with coordinated, persistent, pro-active effort. Above all, this effort must be driven
by a clear, objective understanding of the demands of the marketplace.
1/b. Should immediate chilling at point-of-harvest of commercially harvested salmon be mandatory
statewide?
Prompt, proper chilling is a good idea, and does indeed improve quality. However, at least in the short
run, this is an unattainable goal. First, it will be so hard to accomplish that either (a) many harvesters
will disobey the rule, thus making it useless, or (b) if the rule is strongly enforced, then many harvesters
will be forced out of the market. Second, seafood quality is a complex issue, and depends on several
other factors in addition to chilling. As we explain in our answer to #2, AKMA thinks that the myriad
quality-related issues should be addressed together.
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
No, absolutely not. Quality, and the attendant value, is determined by the marketplace. A quality
standard and seal are necessary, but they must be designed by the private sector, and managed by the
private sector. It is very hard to set up a standard that will satisfy all customers and suppliers and that
can be adjusted as customer requirements change. With that in mind, the State should --
* Require all fishers and processors to have a quality plan covering temperature control, holding time,
processing methods, handling, and other factors affecting quality.
* Use ISO 9000-1996 code as a format
* Require this plan to be a public document
* Plan must cover how fisher or processor will handle fish, how they will chill fish, how they will verify
fish temperature, and how long it will take to get the fish to their customers
* The goal should be consistent grading and long shelf life so require a specified shelf life and
appearance performance after the customer receives it but do not specify how to meet the shelf life and
appearance performance.
In all cases, require standard grading, 3rd party certification, and metrics to ensure performance.
3. Should the state have a quality education program for industry participants?
Yes. In fact, it already has one. For over 20 years, ASMI has educated all participants in the "boat-tothroat"
seafood chain on quality handling practices. This valuable service must continue, and, in fact,
expand greatly. Quality training should be mandatory, for all permit holders and crew, tender captains
and crew, and processing workers and managers
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 31 -
AKMA improves the quality of Alaska salmon throughout the state through a voluntary, market-driven
program of third-party inspection and certification. The harvesting and processing sectors of the
industry already recognize their strong existing incentive to (a) improve quality, and (b) deliver that
quality to the marketplace. That is why AKMA program attracts a rapidly growing number of
participants every year. This approach is far more realistic and effective than any government-imposed
program could be.
Marketing
1. Do we use existing state salmon promotional entities or do we change the entities? If changed, what
changes should be made? (e.g. ASMI; Division of International Trade & Market Development, other)
ASMI is doing a fine job, given its funding and regulatory restrictions. ITMD, which often works at
cross-purposes to ASMI, should be prohibited from marketing seafood, or, at minimum, ITMD's seafood
marketing work should be directed by ASMI.
2. Who or what entity or entities should be paying for the promotion and/or marketing of Alaska’s wild
salmon? (e.g. salmon harvesters, processors, federal government/USDA; state general fund; other
federal funds; other sources)
ITMD's seafood-related budget should be given to ASMI, plus ASMI should get a guaranteed stream of
substantive state funding. This funding should come from: (a) the state general fund, and (b) increased
mandatory contributions from industry.
3. Should the state help individual fishermen promote and market their wild salmon? If so, how?
Yes, in two ways: (a) increased support for ASMI, and (b) education in markets, market research, sales
techniques, etc. The state should not ever buy, sell, or own seafood; nor should it arrange sales; nor
should it provide financing for sales.
Production
1. How can we remove or reduce costs from the harvesting sector in a way that allows regional selfdetermination?
This Task Force is a good first step. The next step will be to set up regional task forces, to address this
very question. The third step will be to make sure that the Board of Fisheries allows each region to
experiment. At present, the salmon fishery by its very design reduces quality and limits the potential
efficiency of fishers. All of the following suggestions will be difficult to implement, but will all result in
a significant increase the overall quality of the salmon catch --
* Encourage fish for commercial sale to be caught in the ocean far from fresh water.
* Change gear laws to allow and encourage gear that is best at producing high quality fish such as
trolling or purse seining in all Alaskan waters.
* Change openings so that boats and processors are not overwhelmed by too much fish in too small a
time.
2. How can we remove or reduce costs and aid the processing sector?
If they are allowed to cooperate without being accused of anti-trust violations, processors could share
tenders. Some tenders could take fish from high-quality fishermen, while other tenders would take fish
from the rest of the fleet. Handling practices would be the same on both types of tenders. The
advantage is that high-quality fish are kept separate from lesser-quality fish.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 32 -
3. In addition to the removal or reduction of costs, are there statutory/regulatory changes that can help
the harvesters and/or the processors?
No comment.
Finance
1. Are there better ways in which the state can use existing fishing industry taxes to assist the salmon
industry?
Yes, buy out permits.
2. Do current State of Alaska loan practices address the needs of the salmon industry? If not, what
changes would you suggest?
No comment.
3. Should the State of Alaska provide for the permanent retirement of limited entry permits in your
fishery? If salmon limited entry permits were retired in your fishery, what incentives would you suggest
for retirement? If funding is needed, who should pay?
The State should simply buy permits at the current market rate, under a "willing seller, willing buyer"
model. If this does not attract sufficient sellers, then pay a 2.5% premium in the second year, a 5%
premium in the third year, and so on. Another incentive could be that sellers, and only sellers, are
allowed to pool investments in salmon farming. Funding could be from (a) fish taxes, or (b) a one-time
bond sale.
Governance
Hatcheries
1. Would you support legislative development of a State of Alaska hatchery policy and/or performance
standards for hatcheries, and/or changes to the state’s relationship with all hatchery owners?
The regional aquaculture associations are doing fine, and should not be held to any higher standards than
those already imposed by ADFG, ADR, and their stakeholders.
Education
1. What role should the State play in providing fisheries education (K-12, post-secondary, and voc/tech)
in order to promote Alaskans in the fishing and seafood industry?
No comment.
2. Does Alaska’s university system adequately meet the research and post secondary educational needs
of the Alaska salmon industry? If not, what changes would you suggest?
No comment.
3. If you are displaced by changes in the salmon industry, what could the state do to provide retraining
and/or alternative employment?
First develop other natural-resource-based industries, then train former fishermen to work in those
industries.
Agency Oversight
1. Apart from the Board of Fish decisions, are there other state agency regulations that could be changed
to benefit Alaska’s salmon industry?
Mandatory quality plans and quality education, as outlined in our Quality comments.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 33 -
2. Do you support Alaska’s board of fish process? If changes are necessary, what would you suggest?
The BoF process is, in general, a good one. The problem has arisen in recent appointments of people
who have no intention of solving the problems of our industry, and instead, simply seek to impose more
demands upon finite natural and fiscal resources.
3. Do you support a task force created by the legislature to review the Alaska Board of Fish?
Yes, but only it is composed mostly of commercial fishing and seafood processing people, rather than
sport-fishing or personal-use people. Notice that the sport fishing and personal use industries (an
accurate term!) are not in trouble; the commercial fishing industry is indeed in trouble.
Seafood Commission
1. Should the State of Alaska develop an Alaska Seafood Commission to annually advise the legislature
on the needs of the seafood industry?
No, this task should become a permanent responsibility of a joint working group from ASMI and CFEC.
Economic Development
1. As Alaska’s salmon industry changes, what are the economic development issues, community and
individual concerns that should be addressed by the State Legislature?
The high cost of electric power in rural Alaska.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 34 -
Name: Duff W. Mitchell
Email: duff@alaskafoods.com
Address: Box 23000 Juneau, AK 99802
Phone: (907) 586-3333
Fish Area: SE Processor & SE Permit Holder Kake & Pelican AK
I would like to thank the Task Force members for their time and contributions to the pressing needs of
our fishing industry. I think that it is long overdue for the legislature to become active at solving some
very pressing issues in the fish patch. I respect you for your willingness to dive into some contentious
issues. I also commend you on our mutual desire to re awake our sleeping industry and to look toward
our fisheries future. Our industry employs so many of our citizens and is so vital to the coastal
community economies that it is with great hope that these task force proceedings will result in “real”
change for the better. Alaska makes up over 1/3 or more of the total coastline of the United States and
we are truly blessed with the abundant resources that our seas provide. Our fisheries are the envy of the
world. Many countries and regions were forced into farmed salmon due to over fishing, pollution, and
wasteful practices. Alaska is truly the last bastion of a seafood breadbasket left in the world. We,
collectively as citizens of Alaska are the custodians of a great resource. With this god given abundance
comes responsibility to do what is not only right today, but what is right for the generations of Alaskans
who will follow our footsteps and participate in our Alaskan fishing industry.
I use the word “Alaskanize” often. Make no mistake, I love many who hail from the lower 48 and call it
home. However, it is Alaskans that should be in control of our destiny, and our fishery industry, not
outside interests. “Alaskanization” can be defined as the long-term strategy to take over and control of
our fishing industry by Alaskans to be run by Alaskans for the benefit of Alaskans. Alaskans respect one
another and work together to find Alaskan solutions. Outside interests and control over fish traps is the
very reason that we became a State. Maybe some have forgotten the history of 1958 and 1959. Some,
like myself, only see today and our current dilemmas as one step toward the eventuality that our industry
will one day be controlled and operated by Alaskans for Alaskans.
We have many regions and each region has many parochial issues. We also have many issues that
overlap our various regions. It is important to respect the desires and direction that each region wants to
collectively pursue. It is also important that people and fishermen in Region A do not hold hostage or
harm fishermen in Region B. It is too easy to speculate and come up with superficial solutions to
someone else’s problem. It is too easy to get engaged in the Alaskan game of “fratricide” where we
blame one region for the fishery failure of another region. I ask that you rise above this fratricidal and
divisive tendency because when we are divided, we are easily picked off by outside interests who take
advantage of our disorganization. Each fishermen and Alaskan processor of a particular region should
set out to “correct” market deficiencies, quality issues, infrastructure, and market issues in their own
region first before embarking on a know all, fix all mentality. As such, my focus is on Southeast Alaska.
I have lots of opinions on other regions, but I know less and have little first hand knowledge in these
regions. I strongly feel that nobody except those living and fishing in a particular area can truly “feel”
the issue like those personally involved. It is for that reason that I do not feel it is appropriate that policy
from Bristol Bay or the Yukon should impact Southeast Alaska and vice versa. Solutions for one region
could very well be disastrous in another. Our elected leaders need to have the Wisdom of Solomon to
see the difference. Baby splitting is never fun.
These written responses and recommendations that I am providing are additional to the previous
submitted recommendations and public testimony given at the Petersburg, Alaska hearings. It is in this
train of thought that I am not just raising problems, because anyone can point out problems, I am taking
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 35 -
the risk to offer rational solutions to some disturbing but easily definable problems in the format of the
questions that you posed. My words my raise some ire, but my heart is in what is best for my regions
fishermen and Alaska. Please excuse me where my words are blunt as I am an Alaskan. I have not held
back any punches, but I have not thrown any blows where they are unwarranted. I walk through life
reserving the right to change my opinion based upon the light of new facts and information. Whenever I
am proven wrong, I admit it. I ask that you try and do the same.
Quality
1. What does the Alaska salmon industry need to achieve a higher quality product?
Fish start to deteriorate (like all living creatures) the very second they die. The enzymes in their stomach
begin the process of leaching into the meat and roe. In addition to enzymes, their cell structure begins to
break down with time and this is compounded by the presence of bacteria, that is present in the slime
that covers their skin. The cell breakdown is even further accelerated and exacerbated with warmer
temperatures.
Any activity which either slows this natural decaying process down (lowering temperature) or speeds
their delivery to a plant for processing (time) assists the fishermen, the processor and the reputation of
Alaskan salmon in achieving a higher quality product. Processors also must be able to quickly process
their volumes. Plants that sit on fish for three days do just as much a disservice to the overall reputation
of Alaska quality as the worst fisherman.
The standard for salmon quality is set by the farmed fish industry. There is no doubt in anyone’s mind
today that it is difficult and in some cases impossible to match this “world class” benchmark standard in
a “wild fishery environment”. However there are many actions that we can collectively take that can
bring us close to this standard. Furthermore, we should do everything reasonable to achieve the basics
for quality and then develop more advanced ways and actions to methodically bridge our quality gap.
Admittedly it will be impossible to match farmed fish freshness, but nonetheless strides should be made
to condense the bridge between our “third world” handling of fish and the standard set by advanced fish
farms. Although the actions below are not in any way exclusive or exhaustive, they will, if implemented,
drive quality up.
Some of these actions are:
• Adjust openings so there is no incentive to “hold” fish for multiple days. Institute openings
policies that assist and encourage quality fishing.
• Require all processors (as a condition of operating permits) participating in the fishery that they
have adequate tenders to handle the amount of boats they have fishing for them. That way
unprepared processors cannot use “quality” issues as an excuse to create trip limits or fleet
cutbacks against fishermen.
• Consider every other day fishing that forces deliveries at the end of each day. 24 hour on, 24
hours off will allow tenders to deliver product timely to the processors, keep processors on an
even keel and this will allow fishermen to dock deliver without fear of losing fishing time.
Quality improvements and value must exceed the additional expenses incurred for fuel.
• Provide real and determinable economic incentives that encourage twice a day tender deliveries
by rebating all state fuel taxes to boats and tenders and processors that follow a rigid set of
guidelines. Provide tax rebates for fishermen and processors that institute and document twicePublic
Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 36 -
daily deliveries from fishermen.
• Allow fishermen to get a small fish tax rebate for RSW and ice purchases on their fish tickets.
• Provide Zero percent interest loans for processors and fishermen boat improvements to enhance
salmon product quality by purchasing or upgrading refrigeration systems, ozonated ice,
modifying decks to meet ADEC regulations, installing soft vacuum salmon pumps on tenders,
and other quality improvements.
• Build infrastructure (roads and freight ferry systems) and invest public capital to move fish faster
to plants for processing and to transport fish to markets for distribution and sales.
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
I do not think this is a wise idea because all the discussion has been focused on voluntary participation.
Voluntary seals are meaningless to the consumer and are ripe for abuse. Are the Norwegian quality seals
of farmed fish “voluntary” or do they have enforceable grades? I suggest that we research and learn
from others. I will argue that it is better to copy others in this area rather than reinvent the wheel.
The “Good Housekeeping” seal is a “voluntary” seal and is completely and unquestionably worthless.
There is not one product on the US market that can state that it sells its product more to the American
consumer with the “Good Housekeeping Seal of Approval” than without it. Why? Because voluntary
seals have no enforcement and therefore they mean nothing to the consumer. It may have meant
something years ago (at a time when consumers were less informed) to separate shoddy or unwholesome
products from good products, but it is meaningless today.
However, if you or I go to a grocery store to buy US beef and we buy US “Prime”, it means something
different from US “Choice” which again means something different from US “Select”. These are legally
defined and objective quality designations from the US Department of Agriculture. The standards are
enforceable and there are serious fines and enforcement proceedings for slaughterhouses that sneak
lower graded beef into higher grades. Not only are there criminal charges for cheating and lying on
grades, but also a cheating slaughterhouse runs the risk of ruining their reputation and could lose
governmental contracts. Should we not have the same responsible standards in our industry? How else
are we going to combat farmed fish? It should surprise no one that there are similar legal grade
differentiations with pork and chicken. Our industry sells pale meated chums and put terminal area pinks
in a can, yet we would not feed the same meat to our children. How many processors would
“voluntarily” mark their product as “dog food?” Enforceable grades mean something; voluntary seals or
commissions will waste our taxpayer’s (fishermen’s) time and money.
Now lets explore for a moment a scenario that we had enforceable grades and that there were penalties
enforceable by law for those that cheated or abused these enforceable grades. Under this scenario if a
processor had mushy, warm fish (or twice frozen value added products) that would only make the
“select” grade (as opposed to “Prime” or “Choice”) they would and should get a lower price in the
market. After all, they should get a lower price for shoddy goods that were not “prime”. But if a
processor worked with his fishermen, invested in a first class tendering system and or paid incentives for
timely deliveries, then he would have fresher, colder, and more firm fish that would meet the higher
“Choice” and “Prime” grades. Since this or any enforceable quality criteria would be enforced
throughout the Alaska industry on all “Alaskan” harvested salmon (including deliveries of Alaskan fish
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 37 -
taken to Canadian plants owned by Seattle processors-which is another whole can of worms); it is very
likely that the “quality producing” processor could and would charge more and profit more from an
“enforceable” quality salmon. The processor can therefore recoup his quality improvement investment
and he can afford to pay fishermen more that deliver a “quality” product.
Therefore, enforceable quality gives the fishermen an economic incentive (not lip service) and more
negotiating power to get more money from processors. This is no different of a concept that occurs when
a farmer delivers higher quality beef to the slaughterhouse: he gets paid more! This is a pretty simple
capitalist concept that does not take a fisheries biologist to figure out.
Currently, superior quality fishermen (through processor cost averaging the values of quality) who take
great pride in their fish “subsidize” the poorer quality fishermen or processors who put out inferior
product. Enforceable quality standards and objective benchmarks are a means to extract more value
from the same pound of fish and is a means to professionalize our industry and bring more money to
Alaskan fishermen.
In quality, you are only as strong as your weakest link. Any “quality” policies must solidify and
strengthen the weak links that are reinforced through economic incentives paid to fishermen.
My point is that only through enforceable quality standards can quality be enumerated and objectively
determined through quality specifications that are market related. Otherwise, quality to one voluntary
standard is junk to another. A completely subjective and voluntary quality standard is bunk and
meaningless because it is like hitting a moving target that never stops moving…. Today saumon
sauvage, tomorrow salmon garbage. Quality grades must be objective, simple and enforceable. Anything
less can’t and won’t work and is a waste of time and money and provides NO economic incentive to our
fishermen. Voluntary quality seals do not work in other food industries so I am perplexed why Seattle
processors and their supporters think that it can work in our industry? The bottom line is that if
fishermen were able to deliver “prime” and it was graded as “prime” they would have more negotiating
power to demand a “prime” price from these same Seattle processors. This is something these processors
do not want to pay our fishermen for because they are already getting it for free from the superior
fishermen!
Let me drive home and explain an example. At present, dock prices are paid on the average “quality” of
fish. Sure temperatures are taken at the dock, sure fish are inspected, but there is no economic incentive
to be above average or to deliver “prime”.
Enforceable market related quality seals mean something to the consumer and they pay for themselves
through higher sales prices by differentiating the grades (Grade A “prime” sells for a higher price than
“dog food” grades). This consumer differentiation eventually means that the higher grades provide more
money to pay the fishermen more at the dock (Capitalist economic incentives to promote enforceable
quality designations) rather than voluntary (lets feel good) quality lip service. At present, there is no
economic incentive for one boat to take care of his fish when it is all mixed in a tender or plant with fish
from poor quality boat or tenders. Therefore our quality in each region is determined by the lowest
common denominator (worst boat-worst tender-worst processor) and that is not good for the reputation
of our entire wild salmon industry. By providing enforceable grades, we can offer “economic” reasons
to reach quality benchmarks and standards.
A prime example of an unenforceable quality seal was our defacto quality label produced by ASMI for
Europe, “Saumon Sauvage” or Wild salmon in French. Hey, it was cute and ASMI spent a small amount
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 38 -
of money promoting it. Unfortunately every watermarked hump backed pink salmon soon had “Saumon
Sauvage” all over its boxes and totes. The “market” took our label and in one season our cute “Saumon
Sauvage” label was transformed and became synonymous with “Salmon Garbage” because it was
perceived as poor quality fish. Again unenforceable standards are taken to the level of the lowest
common denominator, which ultimately “hurts” all of us more than it helps.
Seattle based processors generally do not support “enforceable” quality standards (at least they haven’t
yet on ASMI or in any public forum) nor do they want the intrusion into their plants like all of our
Nation’s food industries have. However, homeland defense and accountability for our Nation’s food
safety could very well change this. These same processors have been processing fish in the same
“production” manner for over 75 plus years and they do not want to put more capital or grading expense
into their plants. Enforceable Quality standards will allow smaller Alaskan and more skillful processors
to pay their fishermen more and that would upset the current status quo. Therefore, I believe there is
serious opposition to enforceable and verifiable grading standards from the large outside interests that
fear changes to our current system (no enforceable grading standards) because they would lose
economic y control over fishermen (and would have to pay them more) who produce quality. Besides
some of these processors may find themselves with large amounts of “dog food” grade product if we
had enforceable quality grades.
I understand this economic fear of the unknown (look at the fines and product recalls these processors
already get) and would also be wary of any potential overzealous enforcement. However, objective
grade selection based on time and temperature is not subjective and has no room for manipulation or
abuse by unscrupulous processors. Therefore NO quality seal is better than an unenforceable or
voluntary one. It is similar to when fishermen go on strike. It does no fishermen any good to have a scab
cross the picket line.
I also want to throw something out for consideration. Do you personally eat twice frozen prime rib?
How about twice frozen pork chops? How about a twice frozen fillet of King salmon? Have you tried a
twice frozen pink salmon processed in Seattle? If you have, you will notice that it is watery; in fact some
processors inject more salt water into the fillet to increase the weight (nice trick, huh?). However, if an
American consumer eats a value added Alaskan salmon product made in Seattle, it is always TWICE
FROZEN. Why does our industry have such low standards? I think our State should encourage value
adding and value added jobs in coastal communities that take fresh fish, value add it, and only freeze it
once. I think a law should be passed that only once frozen fish can be called “Alaskan” salmon. Twice
frozen salmon can be called “Seattle Salmon”. A perfectly caught, perfectly tendered, perfectly
processed salmon is ultimately ruined and becomes a vastly inferior product when it is thawed, slacked
out, cut, value added and then refrozen. If we encourage once frozen, made in Alaska products because
the quality is better, then we can start giving processors an economic and market based incentive to quit
selling the public twice frozen poorer quality value added salmon products that ruin our collective
reputation.
I think it makes more sense to put these jobs in the coastal communities of Alaska where they belong.
Twice frozen salmon is one of the largest causes of poor quality of Alaska Salmon in the value added
consumer market. If anyone has noticed, our Chilean competition is selling once frozen salmon. Is this
wake up call?
3. Should the state have a quality education program for industry participants?
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 39 -
I already thought there were programs. Are you asking if they can be improved? The answer is yes. I
think anyone applying for a processor permit must already demonstrate that they have a HACCP plan; a
sanitation plan and a DEC approved facility. In order to accomplish these items, a processor must
demonstrate a basic knowledge of food safety, which is in many ways tied to quality.
I think our loan programs for fishermen should require as a condition of a new loan or a refinance that
fishermen attend an 8-hour class (or some other type of formal training) on handling and icing fish as a
professional development requirement. The curriculum should include how time and temperature
degrades salmon quality. Something in this manner would provide a way that the State could assist and
ensure that new fishery participants (including deckhands) understand what “quality fish handling
techniques” are. I also think that processors should be required to provide professional development and
quality training for their fleets as a requirement to operate. I also think that every “new” deckhand
licensee should receive a videotape instruction designed to assist “crewmen” on what they can do to
properly handle fish and keep them cold. The cost of the videotape can be added to their license and it
would require that they pass a simple test from questions obtained from the video to get their license.
The goal of all this training would be to improve the message of quality through professional
development and professional training.
Every industry whether it is accounting, electrical, diesel repair or medical; all have professional
development courses. I think it is time that our industry does the same. Our State institutions do not offer
very much professional development for fishermen or processing employees. However, I will point out
that the Marine Advisory program and the Fisheries Industrial Technology center do a very good job on
the courses they offer.
Other states that have pork, beef and poultry industries require that their institutions of higher learning
provide educational resources to their industry. Our state neglects the fishing industry in this area and
also in fisheries Research and Development areas. Do not get me wrong. I am fully aware of the UAF
School of Fisheries and the Kodiak Fisheries Technology Center, but it quite simply is not enough when
compared to what “fishing” provides to this State. As the “major” fishing state, our universities should
rank far ahead of Maine, Rhode Island, North Carolina, Washington, and British Columbia in fishery
science and fish processing technology, but we don’t. Again this is indicative of legislative neglect in
fueling and “Alaskanizing” our important industry with future educated “Alaskan” leaders and
managers.
I think the creation of a scholarship investment fund from fish taxes should assist Alaskans that want to
learn and become processing plant managers and leaders in this important industry. In return for these
scholarships, I believe we could require that the up and coming Alaskans work in our industry for a set
period of time. I know that I would gladly hire college educated fish process technicians and managers
to work in our Native Company. I believe in this manner of promoting fish technology and education
that we can collectively groom our collective future like other states promote education in their primary
industries. This is another step toward the eventual “Alaskanization” of our industry.
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
Tax credits and low interest loans for investing in quality improvement technologies and equipment.
Marketing
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 40 -
1. Do we use existing state salmon promotional entities or do we change the entities? If changed,
what changes should be made? (e.g. ASMI; Division of International Trade & Market
Development, other).
ASMI does a great job when you realize what constraints they have. Some of these constraints are
regulatory, others are self-imposed by their own board of directors. Their employees are enthusiastic and
dedicated to their mission of marketing our wild salmon. There is room for improvement in any
organization, but the employees and managers are committed to what they are doing, are professional,
and are creative in their pursuit to market and regain market share for Alaskan salmon. I do not think
there needs to be another entity or to create a “new” competitive entity. I do think that all entities should
work together in unison and in a synergistic fashion.
However, we need to remember that the “A” in ASMI is “Alaska” not Seattle or Tokyo. The fact that
farmed fish companies can sit on our ASMI board causes ASMI’s direction to become contaminated
with farmed fish interests and therefore their marketing is less effective. Any change in ASMI, needs to
be directed at the Board of Directors, not the organization itself. I will explain more on this as I address
this issue under the Governance questions.
2. Who or what entity or entities should be paying for the promotion and/or marketing of Alaska’s
wild salmon? (E.g. salmon harvesters, processors, federal government/USDA; state general fund;
other federal funds; other sources).
Fishermen and processors already are the only personal income tax payers in this state! A fact that is too
conveniently ignored by an Anchorage/urban controlled House and Senate. For too long our Alaskan
Legislature have conveniently avoided the fact that Alaskan Fishermen contribute substantially more to
the General Fund than what they take back. Salmon harvesters and processors cannot afford more taxes.
In fact, in the depressed economy of the salmon market, we should reduce all salmon taxes until the wild
fish market is stabilized. However, the question above is how to provide funding for promotion and
marketing.
The answer is all of the above-suggested sources. WE should match funding with federal entities to the
maximum extent possible. We should take direct funding from the general fund (the fishermen paid into
it, why not give some back?)
3. Should the state help individual fishermen promote and market their wild salmon? If so, how?
Yes, but it should be through ASMI and the Division of Trade. I think both entities could set up a “how
to” market and cover basic marketing so that fishermen that know nothing about marketing and
distributing can follow some general guideline. I believe the Marine Advisory program has already
taken steps to producing a guideline on how to market your catch. The State should support the “small”
guy because he usually has fabulous quality because it is his “personal” catch and reputation. Promoters
of high quality salmon help all of us in the industry because it lifts our reputation. As JFK stated, “a
rising tide lifts all boats”.
Production
1. How can we remove or reduce costs from the harvesting sector in a way that allows regional
self-determination?
We need fishery managers to consider economic considerations and add, “fishermen economics” as a
secondary consideration when making decision on establishing season openings, policies etc. Nobody is
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 41 -
advocating anything that would harm or impair a resource, but too many times, economics are ignored
and then the ultimate decision adds costs to the harvesters and robs their income due to decisions that do
not account for harvester impacts. We need to look at the big picture when making decisions and those
decisions need to include the economic impact on fishermen and local processors.
The above question is confusing because “regional self-determination” means different things to
different people. Any action that reduces costs to the harvester is a no-brainer. How that plays into
regional self-determination is another issue that may or may not be mutually exclusive to reducing costs.
The Chignik experiment is a stab at regional self-determination? I personally think that I have no right to
comment on Chignik or any other region that does not affect me. I do believe that regions should have
control on how business is conducted in their region and only in their region.
2. How can we remove or reduce costs and aid the processing sector?
This is an important area. Our overseas competition in Chile has very cheap labor. Value added plants in
China pay workers as low as between $1 and $2 a day. Many Seattle processors ship fish to China or
Thailand to be value added and then sell the fish to Europe or re-import the product back to the United
States. This twice frozen fish is sold as an Alaskan salmon product. As Alaskans we have a much higher
standard of living, we must fly workers in from urban areas to rural areas, house them, feed them and
run large housekeeping and food service operations. Our competition does not have these expenses and
any unnecessary expenses imposed on processors take away from the processor’s bottom line and ability
to pay a higher dock price to Alaskan fishermen. Therefore, anything we can do to lower overhead costs
allows more profit or money available to pay for raw material (fishermen’s dock prices).
Our current labor laws for seafood workers are skewed against the employer. These laws that originally
set out to protect the employee have become abusive and expensive for the employer who is creating
jobs in Alaska. For example, if a processor hires a worker from Seattle or some other urban center and
that person receives airfare and then quits on the first week, the current law does not even allow the
airfare to be deducted from his pay. (Hey buddy, want a free trip to Alaska?) If the same employee
vandalizes the bunkhouse because he hates his job (or for other reasons), the employer cannot deduct
those costs from his wages unless he agrees to them (yeah, right).
I am not advocating that we eliminate laws. I am advocating that we review these seasonal worker laws
and make them fairer for the employer. If an employee quits, he must receive all pay in 72 hours. We
have had employees quit because other processors have hired them away. We should be able to pay
quitting employees on the next scheduled payroll instead of within 72 hours as provided by law.
Processing employers should not be administratively burdened with laws that unnecessarily add
bureaucratic expense to these employers. I have had to have office staff work overtime and expend large
amounts of administrative labor to comply with laws that force us and other processor to have larger
administrative staffs than we otherwise would need. These burdensome, and I will argue unnecessary
regulations cost this industry money that could be spent more productively.
Unfortunately, we are the only state that has such arcane and unreasonable laws. Many of our seasonal
labor laws are outdated and were created in a bygone era when everything was just fine in the fishing
industry… and processors could afford to suck up airfare. As a start to remedy this situation, I suggest
that the legislature do a thorough review of how other states treat and compensate seasonal seafood and
agricultural workers. Then these laws need to be discussed and then we need to pass legislation that
reforms our seasonal labor laws so that they are reasonable and in synch with the rest of the country.
Therefore, I will suggest that reasonable room and board needs to be recouped by the employer.
Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
- 42 -
Reaso