Public Responses to Salmon Task Force Vol. 8 December 3, 2002
Compiled by UFA
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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?
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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
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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.
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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
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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.
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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?
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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.
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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
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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
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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
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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.
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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.
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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.
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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
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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
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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?
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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.
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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.
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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.
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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
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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
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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
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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
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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?
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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
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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
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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.
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Reasonable air fares needs to be recouped. Vandalism and any property theft need to be recouped. The
key is “reasonable”. Currently our laws are unreasonable and are out of line with the rest of the country.
With the industry in turmoil we deserve to have more “reasonable” seasonal employment laws.
Now some of my Seattle competition may believe that watering down DEC and EPA waste discharge
rules is a way to reduce costs (and reduce fines). I have heard their arguments and I disagree. For one
point they and their children do not live here in our communities. Secondly, it is bad business to “dump”
anything. Third, we use the pollution and other “unclean” issues when we differentiate our salmon from
farmed. Why should we talk out of both sides of our mouths? As an alternative, I think that the State
should provide economic incentives for processors who mitigate waste through the purchase and
development of fishmeal plants, hydrolysate plants, and compost operations that turn seafood waste into
useful and profitable products. The reason waters around plants are polluted is that there is already too
much grinding going on. When rotten fish particulates float to the surface, it is nature’s way of telling
you that what you are doing is wrong. Efficient and effective utilization of the resource dictates that you
find the highest and best use of each component of the fishery resource. I personally think some of my
competitors should take the money they are spending on lobbying for relaxation of DEC/EPA laws and
spend it on real solutions. The best public interest is served with clean waters and clean environments.
3. In addition to the removal or reduction of costs, are there statutory/regulatory changes that can
help the harvesters and/or the processors?
Biologists and fishery managers must have the resources to open fisheries. Excuses that the legislature
did not provide money to manage must be replaced with proper funding and a proactive attitude that we
“can” determine if there should be additional openings and if there is adequate resource there, we will
open it (full funding of commercial fish budgets). A lot of fishing is not going on (and resulting losses of
fish tax revenue) due to budget constraints or for political agendas hiding behind budget constraints to
not open up certain fisheries. There are a lot of developing fisheries that need to be opened up. These
can and should be opened up with the funding to adequately research and determine the biomass and the
sustainable yield.
Processors should not be asked to post bonds to open areas for fishing. This is the State’s responsibility
to manage the resource.
DEC and EPA water quality regulations should not be watered down. The same environment that we
take fish out of must be protected from over dumping of fish wastes going back into the marine
environment. Processors who have invested in fish meal plants and compost facilities should not be
harmed and given a competitive disadvantage to processors who now advocate for law changes to water
down waste discharges. Instead, these law change advocates should invest into fish meal and compost
operations like their competition has.
Institute regulations that allow fishermen the right to more effectively engage in a form of collective
bargaining against processors in regions that do not have very many processors. Do not allow processors
to harvest or engage in openings until the processor agrees on a minimum dock price. Currently, the
fishermen have no bargaining ability whatsoever in the dock price determination. They either take the
price offered or they can leave their boat at the dock (if they do not have loans to make).
Farmers organized long ago to keep from being financially abused by grain companies; our fishermen
need the same rights. At least farmers can look to grain futures and determine if they are getting ripped
off or if they are getting paid fairly. In addition, the Federal government oversees and protects US
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farmers, why doesn’t our State protect its fishermen? Compound this fact that many plants (in SE
Alaska) only need a hatchery contract to meet minimum production economies of scale so individual
fishermen become expendable. Fishermen have been cut off for reasons other than economics. A
fisherman can be dropped for having the “wrong” attitude or expounding on viewpoints that I have
illustrated. Another practice is to put Fishermen into A lists (the good guys, high boats, loyal, don’t
rock the boat, etc.) and B lists (others). Some boats get trip limits, some don’t.
Many fishermen are afraid to speak out since they have loans and other issues with processors. Right
now the deck is stacked to keep our fishermen submissive. If fishermen are allowed to organize, they
become more in control of their own destiny. Right now they have no negotiating power in determining
dock prices. Alaskan fishermen are in a 100% submissive role and that means their dock price is
substantially lower than what it would be with a fair playing field.
Finance
1. Are there better ways in which the state can use existing fishing industry taxes to assist the
salmon industry?
Yes. The current tax system was set up when we had a vibrant and profitable fishing industry. Permits
were worth double to 5 times or more what they are worth now. Now fishermen are going broke, losing
their boats and permits and the only processors making money are those that are engaged in lucrative
bottomfish and crab fisheries. There is no wonder why many processors engaged in these fisheries are
advocating for Processor IFQ’s in those fisheries to lock in their competitive advantage like state run
processing operations do in China. But that is another story.
Our current tax system can be depicted as the Sheriff of Nottingham tax system where the Sheriff is
accustomed to taxing the rich fishermen and processors in the only form of personal income tax this
state has. For those missing the point- the fish tax taken out of fishermen’s fish tickets is a personal
income tax since it is based on “income”. This tax is even more punitive since it is collected
immediately just like the good old days of Robin Hood. Now we need to shoot or replace our “Sheriff”
system of taxation with a Robin Hood taxation system where we give tax relief to fishermen and
processors and also give them more services for their parochial needs: ASMI, Commercial Fish
Management, permit loan programs, pack loan programs to Alaskan owned processors, etc We as an
industry contribute more than enough to cover these programs and more. A study being put together by
ASMI shows that fishermen and processors contribute over 40 million annually in tax revenues and
fiscal benefits to the State. That is far more than what we receive in return. I wouldn’t feel so bad, but I
do not see a 3% gross tax being levied on tour operators, gift shops, gas stations, charter boat operators
and other Alaskan entrepreneurs. Therefore, I want to ask why is the State so parasitical (Sheriff of
Nottingham) towards the fishing industry? Is it not time that our industry start pulling a Jerry McGuire,
“show me the money!” especially when other industries do not come close to carrying their own weight?
Is it not time to start re-investing the tax money generated from this industry back into fishery future of
this State? Frankly, the cash cow (our industry) is sick and is tired of having her blood sucked, its time
to start feeding her for the milk she has been delivering for all these years so she can keep producing.
2. Do current State of Alaska loan practices address the needs of the salmon industry? If not, what
changes would you suggest?
Yes and No. The current State of Alaska loan practice addresses some of the needs, but they could be
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improved to fulfill more needs.
For fishing permits, interest rates are legislatively regulated. The Division of Investments should be
allowed to make market based interest rates for fixed loan rates and refinances.
Currently only CFAB and the Division of Investments can make permit loans. This should be expanded
to allow coastal Native Corporations to loan and lien permits through Alaska commercial banks so that
there are more bonafide lenders. This action has the following benefits: creates a new lending source to
buy permits. More lending sources allows more buyers to enter the market. The more buyers there are in
the market, the more demand there is. The more demand there is, then permit values rise.
Secondly, this action encourages permits to be owned in coastal communities whereby the economic
benefits of our fishing industry are best targeted. Small Native coastal communities that expand their
permit holdings, add economic value to their local economies by providing additional direct (deckhands)
and indirect jobs (welders, boat mechanics, suppliers) to their local economy. The stronger a small
economy is, the less dependent it becomes on social and other services. Therefore, there are no net losers
with this proposition, only winners.
The Division of Investments (they seem to be the best likely agency) should be able to make pack type
loans to bonafide “Alaskan” (Alaskan owned, Alaska headquartered) processors at competitive or below
interest rates. Currently financial institutions will not loan to salmon processors in depressed areas. The
fact that our fisheries are declared “disasters” is the equivalent of putting a sign on the banks doors that
read “fishermen and processors-no need to apply”. No bank is willing to risk loans in an industry that
our own government declares as a “disaster”. If you are going to declare our fisheries as a “disaster”
have the decency to give us resources to mitigate the disaster.
Also, most financial institutions want to see the processor in more lucrative bottom fish and crab areas
where the profit margins are higher. Salmon processors are left without good lending sources and
opportunities. Annual Pack loans would really help, no only the processor, but it would help local
communities that these processors operate in by securing the knowledge that a processor can continue to
operate season after season and pay their fishermen timely. This year we operated without any lending
sources and it is not fun.
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 of Alaska already has a legislative mandated way to reduce permits through the limited entry
commission. This is an area that should be taken up on a specific fishery-by-fishery basis. As a result, I
do not wish to comment on the merits or mistakes of this issue. My only concern is that young Alaskans
need an opportunity to grow in this business and any program must make “access” to permits for our
younger generations.
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?
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Yes. All hatchery loans must be forgiven as an aspect of any hatchery re-engineering and reform. The
State just forgave all the loans to ASI and the Healy Coal project, so why all the excitement at doing the
same for the hatcheries that are the lifeblood of our Southeast and South-central fisheries? . Hatchery
loan forgiveness would benefit all the Southeast Alaskan fishermen because it would raise their annual
dock price and permit values. Our hatcheries are working and creating fish like they were intended to
do. In this regard they are successful. The longer hatchery loans are not forgiven, the longer our
fishermen will be predated against by the economic forces at work and the more the State risks
becoming a party to a lawsuit.
The hatchery business model created decades ago is flawed. The business loan model had assumptions
that Chum salmon would one day (now) be worth a dollar a pound and pinks would be worth .50 a
pound. The advent of farmed fish destroyed these assumptions. However, the hatcheries kept their end
of the bargain and produced the required volumes of fish. They have made the fish they said they would.
Now (due to a failure of the business model and correlated to the advent of farmed fish) it takes far too
many fish to pay off loans when this money should be going into fishermen’s pockets.
So here we sit, despite the change in the market environment (advent of farmed salmon), we have not
changed our hatchery policy for political reasons (Yukon-Kuskokwim, Trout Unlimited hatchery
bashing). These (some well meaning, some not so well meaning individuals and organizations) are
engaging in a form of fishermen fratricide against Southeast and South-central Alaskan fishermen who
depend on hatchery-reared salmon. These so-called hatchery bashers also unwittingly play into the
hands of Seattle processors who profit just fine off the current set up. As such, our State hatchery policy
must be brought out of the 1980’s mindset and brought forward to the reality of today.
To continue to ignore hatchery reform adds fuel to the fire that the State has become a party to price
manipulation that prevents fishermen from receiving their fair market value for their salmon. Processors
that have plants in many regions use low dock prices in one region are used as the justifications to force
lower prices on another region. Therefore, this hatchery issue does not just affect Southeast and Southcentral
Alaska fishermen and their dock prices as some may ignorantly assume, but this issue transcends
into the non-hatchery regions.
In order to remedy this triangle (Seattle processor, government, hatchery) of predation on fishermen,
hatchery loans must be forgiven and completely written off for the public good. In return hatcheries (all
non-profits and associations) should publish and fully disclose their financial statements, compensation
schedules, reserves, as well as their production records to ensure that the public investment (loan write
offs) are protected and money is being spent wisely and for the benefit of fishermen. Through this
openness and public scrutiny process, the state can reserve the right to appoint board members to any
state hatchery if the Division of Investments demonstrates that a hatchery is not being operated
efficiently and effectively. Once the hatchery returns to efficient and effective operations the state could
then remove its appointed board members. In this manner, the public interest is protected with financial
controls and board oversight.
I would also suggest that each hatchery be allowed to keep a reserve in the event of a run failure. Or as
an alternative the hatcheries all contribute 5% (or some other appropriate figure) of their gross earnings
for a pooled “run insurance”. This way, all hatcheries are self insuring themselves as a group and
spreading the risk among all the areas for a run failure. This suggestion has the long-term feature of
securing not only the public investment, but also staving off a financial disaster for local economies and
fishermen who depend on reliable and sustainable hatcheries.
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Hatcheries must be evaluated on objective criteria to demonstrate their public worth:
1. Cost per fish and cost per pound. Total Annual fish return/ Total operational cost = cost per fish
and cost per pound. These need to be made public and published in every fishermen’s journal and
newspaper so fishermen, the government and the public can see for themselves who is efficient and who
is not and who needs improvement. Some may call this airing dirty laundry. I call it a wise use of public
funds.
2. Annual fish return made available to fishermen.
This is a sticky area because some hatcheries are mature and others are building their runs. This criterion
must be different on “developing” hatcheries vs. “mature” hatcheries. Mature hatcheries should and
must provide more fish to fishermen. Their driving goal must be to get as much fish to the lowest
common denominator (the small boat owner fishermen). This can be best accomplished in several ways.
Some hatcheries provide lucrative cost recovery contracts to a select few boats. Others are more open
and provide revenue to a larger number of boats. Hatcheries must be encouraged to “share” the wealth
on cost recovery operations to a broad audience creating more benefit from cost recovery programs to
more fishermen. This may mean that any one single boat may only harvest a couple days of fishing on
Association type hatcheries, but the extra income could very well be the difference between making a
boat loan or not.
The key goal is to have the “extra” revenue flow into the pockets of more fishermen. After all, these
hatcheries that are not financed by private investment groups, but with public monies and fishermen
assessments that have built and sustained these very hatcheries. Therefore it is commonsense that these
same hatcheries should be run with public scrutiny to provide the maximum benefit to the most
fishermen.
In this cost recovery sharing approach, even developing hatcheries (that need more money at their ramp
up stages) can still have a “high” annual fish return made available to fishermen if they open up cost
recovery harvests to many local “Alaskan” boats rather than a select chosen few. Mature hatcheries must
not only open up their cost recovery to all boats in their association on a lottery or some other fair
apportionment, but must incrementally increase the amount of fish made available to the public
annually.
Obviously less efficient hatchery operations that pay excessive or above market salaries are taking away
fish (and money) that should be going to fishermen. Therefore hatchery expenditures must be publicly
watched to ensure that they are cost effective and are in the public interest. It is only through the
thoughtful and methodical business practice of analyzing all costs and keeping them in line by slashing
any excessive overhead and operating costs (as demonstrated on their public reports) and by making
more fish at a cheaper cost through technology, proper investments in infrastructure can more fish and
fish income go to more fishermen. Hatchery reform therefore cannot reward inefficiencies by
continually allowing high cost recovery volumes and prices. Each hatchery needs a plan to turn more
and more fish over to fishermen while simultaneously lowering their operating costs. Which leads to the
next criterion.
3. Administrative and overhead costs as a percentage of expenses. Every charity and non-profit
corporation that takes money from the public is required under IRS regulations to publish these costs so
the public can tell if the charity is using its funds to “feed its machine and administrators” or “feed its
children”. The public of Alaskans and the fishermen of this State need to see the same data from
hatcheries on an annual basis so that we know that excessive salaries and expenses are not being lauded
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on hatchery administrations or providing huge reserve bank accounts. Please note, that I do not believe
any hatchery has exorbitant or higher than market costs for its personnel, but nobody can provide this
information in a comparative format between all the hatcheries in an easy to read format either. The
administrative and overhead costs as a percentage of expenses will show the public (and legislators) if
the hatchery is being run frugally or if it is not.
4. Hatchery recovery price vs. local grounds price. This publicly published criterion will determine
how much premium a particular hatchery receives for its fish over the local regional dock price. This
criterion will allow the public to see if there is a reasonable “volume” premium or if the hatchery is
unwittingly a participant to processors practicing in regional predatory tactics. In an oligopolycontrolled
market where there are limited “volume” buyers (large processors), and limited “volume”
sellers (hatcheries) it is not uncommon to see market manipulation.
By the very fact that these oligopolies dominate the fish producing and fish buying market creates a
situation that is too tempting for profit-motivated (and some not so profit) companies to resist. The
scenario is simple: Get your volume from a hatchery and pay a high price. In fact, pay as high a price as
you can to obtain the bid or worse, be so stupid as to bid way too much. But its not the processor paying
for the bid, it is their fishermen.
Let me explain. The processor offsets these high hatchery bids against low grounds price paid to
fishermen so low that the processor can cost average the overall volume down to a price that they can
maximize profits on. If any one of the major players establish a low price, it is very infrequent that
another major player will bump the price. If a processor only needs 40% capacity to break even and they
have a hatchery bid, they now are in a very good position to offer a very low dock price to force its fleet
(its other 60% capacity) to pay for the processor’s “cost averaging”. They can be so bold as to make a
“take it or leave it” attitude. It’s a no risk situation…. as long as each major processor has at least one
hatchery bid, they all fall in line like dominoes and collectively they keep all fleets submissive.
According to State reports approximately 1/3 of all fish caught from hatcheries go to cost recovery.
In 2001 cost recovery salmon represented 42% of the total catch in Southeast Alaska.
The current hatchery policy provides no incentive to buck the trend. In this manner, high price hatchery
fish volume is diluted with lower than true market dock prices with volume from regional fishermen.
This cost averaging “spread” allows a processor to artificially (from a market perspective) pay higher
prices to hatcheries and still be profitable when they spread their total cash outlay for salmon over their
total volume (hatchery salmon + fishermen caught salmon). The trick is to get enough volume from the
hatchery(s) to keep the processor from needing too much open access salmon and therefore not be
dependent on fishermen for a break-even volume.
Now if the collective fishermen from the Association or PNP received the fish from the hatchery and
then the fishermen sold it to the individual processors then the fishermen would be able to spread the
fish out to many processors-large and small so they could break up this predation by larger players.
Fishermen could then sell “blocks” of hatchery fish to multiple processors, thereby breaking up the
oligopoly power. This is only one recommendation to put the power back to the fishermen and away
from the processors. There are many others and they all should be combined to offer the most fair
system and provide the highest economic return to our fishermen.
If a processor is not dependent on fishermen (plenty of hatchery fish), then they can afford to (and do)
arbitrarily introduce trip limits and other fleet cutbacks to keep their fleet in a “submissive” position. In
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this current economic model, the winners are the hatcheries that get high prices, the State who gets their
hatchery loans paid back, and these large processors who get the guaranteed volume to make their
break-even point (no risk for processor-all risk for fishermen) and profits. The losers in this current
economic model are: the fishermen who unwittingly subsidize this predatory price arrangement that
results in lower dock prices; smaller Alaskan processors who cannot afford several hundred thousand to
million dollar hatchery contracts; and the public who has an interest to see that business conducted in
this State is fair and non-predatory manner. This current scheme forces even smaller processors to
follow this predatory game in order to survive competitively against larger better-financed competitors
that make up the rules in the oligopoly game.
The public at large also loses because it is in the public good to ensure that fisheries and fishermen
income remains vibrant and fair, coastal economies remain vibrant, and that fishermen can pay “their”
State loans. The State also loses when a fisherman caught in this predation trap cannot make his State
loan payments. The State also has an obligation and a public interest to ensure that monopolies and
oligopolies (acting as a large monopoly) do not engage in predatory tactics against smaller players
(small Alaskan processors and Alaskan fishermen).
For those that are not accustomed to understanding oligopolies, let me divert for a moment with a
parallel example. American coffee companies buy a lot of coffee beans from Columbian coffee farmers.
However, they do not compete against each other in price to the farmer (that is economically stupid),
they split the volume of production according to their needs. In fact they know that if they work together
on the resource end of competition (against the farmers) that they will enjoy more profits when they sell
to the consumer. Therefore, Folgers and Maxwell House slug it out against each other for the consumer
market share with advertising, marketing etc., but never for the raw material. Oligopolies in the coffee
industry do not need to have written plans or strategies to take advantage of Columbian farmers, it is
how business works under very simple economic models. With very few parties competing for the
resource, it comes naturally to predate against the weaker party because it provides more economic
benefit to the coffee buyer. Economics is as simple as understanding nature. Is anyone surprised that the
same predatory tactics are being reaped (dare I use the word, economically raped) against Alaskan
fishermen?
The State has asked hatcheries to pay back loans and therefore to charge as much as they can for their
fish at the expense of driving fishermen’s income and permit prices down. I have attempted to explain
this oligopolistic predation in a simple Economics 101 fashion.
The net effect of the current hatchery/big processor economic model is that that we are taking money
that should be left in our State and in our coastal communities in fishermen’s incomes (that would be
present in higher grounds prices) and sending it to Seattle processors and banks. This cycle will continue
as long as larger processors can and will continue to “force” lower grounds prices on “submissive”
fishermen in order to cost average down the processor’s true cost per pound. The bottom line loser in
this equation is the fishermen and the coastal economies dependent on fishermen that fail to obtain a
decent living as a result of this dock price manipulation.
Lastly, not one person can economically and effectively argue that any hatchery can justify a 250% to
400% higher cost recovery price over grounds price (many hatcheries have much smaller spreads). The
fact that these gross distortions even “exist” categorically proves that predation and predatory forces are
at play. The circumstantial evidence that I have presented is clear and convincing. The proof can be
verified by publishing all 2000, 2001, and 2002 hatchery prices (and what processor paid them) and then
correspond those hatchery prices with what the price that processors paid their fishermen for the same
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years. An argument that there is not manipulation defies common sense and is an insult to the fishermen
and to the Alaskan public. The Attorney General’s office should have been on these years ago.
We need our legislature to fix this situation in the same manner, spirit, and tenacity that Teddy
Roosevelt took to bust up the same predatory tactics that were being used by the powerful steel and
railroad industries over 100 years ago. History will also recall that he too had to go against many of his
own Republican party who were in favor of ignoring his demand for “fair” play. Unlike the Bristol Bay
lawsuit, it is the very hatchery policy of the State of Alaska that has sown the seeds for this predation
being waged against our Southeast fishermen. Therefore, this time it will be much harder for the
legislature to stick their collective head in the sand and ignore the problem because our very own State
policy is the very root of this problem
I think that many would agree that money should be made by being innovative, creating products that
the consumer demands, efficiently producing and processing the resource, value adding salmon and
marketing value added salmon (true capitalism). I think most will also agree that money should not be
made by being market manipulative, predating and thereby taking the limited market money out of the
pockets of fishermen or the mouths of their families (predatory capitalism). The part that some of us
resent is that the current State hatchery policy condones this predatory behavior and through its policies
and the State has become a silent party to this predation. I ask the State to move quickly on this action,
because now that I have exposed it, it will only be a matter of time before these predatory tactics will
end up in some court being reviewed and that will not be good for any of us: The State, the Fishermen,
the processors or the hatcheries. I am sure that my competition will resent the fact that these practices
are being exposed, but if we are going to fix this industry and our state of affairs, we need to honestly
analyze what is going on in our own back yard before we fight the farmed salmon industry. I believe in
making money that is based on trust and mutual respect for our fishermen. I cannot idly watch and keep
my mouth shut when I see predation and then I see fishermen struggling to pay off loans. We can talk
about “unifying” and we can talk about “teamwork”, but teamwork is built on trust, responsibility, and
accountability. It is difficult to trust large processors who sell farmed fish, predate against our fishermen,
and then talk out of the other side of the mouth that they are “here” for our industry. We must get our
“own” house in order first and treat our own fishermen fairly and increase their dock prices that they
deserve in the current market, before we can be unified in our approach to combating farmed salmon,
regaining market share, and increasing our fishery wealth (higher dock prices) through effective
marketing.
I will add that unfortunately our PNP hatcheries have no choice in this predation scheme; they need high
prices because the state holds a loaded gun to their heads to pay off their high loan balances. Hatcheries
without loan balances have no excuse for participating in the predation. PNP’s cannot be blamed for
taking higher bid prices unless they knowingly are involved in an act to conspire (or knowingly use
excessive hatchery bids to subsidize excessive expenses or pad bank accounts). Therefore if you take the
loaded “loan” gun away from the hatcheries (forgive all State hatchery loans), regulate oligopolies when
they engage in predatory tactics, turn more control of the resource to fishermen, then we will have more
fish for fishermen at a higher grounds price. We will stabilize fish prices by taking away predation that
is rampant and lessen the impact of forcing fishermen to subsidize high hatchery contracts. I am
advocating that we spread our collective fishery wealth out in a fairer, less predatory manner where the
balance of power becomes “Alaskan” driven for the benefit of Alaskan fishermen, not controlled or
dominated by Seattle processors that use and abuse our current hatchery policies.
You see, this is a fish eat fish world, only the fishermen is one notch over the specie and the processor is
one notch over the fishermen. However, the processor is using the hatchery fishhook to stick it to our
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fishermen. Salmon predates herring, fishermen predate salmon, and processors predate fishermen. Call it
a life cycle or call it what you want. Bigger fish always want to get fat. Luckily the salmon resource has
“sustainable yield” and fishery biologists to protect it. The fishermen have no protection from our
legislature or our Attorney Generals office from predatory tactics and the hatcheries are caught in the
middle.
Now I would like to shift topics and add an area to the Governance Committee for serious thought and
consideration.
I originally submitted a suggestion to “Alaskanize” the Alaska Seafood Marketing Institute to the
marketing committee, but I then realized that any change in ASMI would have to come from a
legislative change and that would require the Governance committee to support. There have been many
legislators in the past and there are many current legislators and politicians who do not financially
support ASMI because they feel the money supports non-Alaskan businesses who use this money to fuel
their own corporate interests. They, like many of their constituents do not see ASMI as a marketing
vehicle to increase the value fishermen are paid. They see it as a Seattle controlled organization wearing
pajamas and parading as “if” it were Alaskan. I do not necessarily agree with this perception, but
perceptions are realities that must be dealt with.
However, that is only one part to the equation. Forget the money that the Seattle Seven contribute to
various political campaigns for a moment (after all, they are big business and this is a free country), but
lets focus a moment on what is good for Alaska, Alaska citizens (voters) and Alaskan fishermen. We
can all rationalize that these Seattle based corporations provide jobs, contribute taxes, etc. etc. However,
that is window dressing and is not the point we are discussing. Now add a more important dimension
that rocks to the very core of our salmon situation. Our single, most concerning threat to our industry
(not counting our disorganized selves) is farmed salmon.
I do not need to go into a litany of how farmed fish has forever changed how Alaska Salmon is marketed
and sold and I do not need to go into the various aspects of economic analysis to show that the advent of
farmed salmon has led to lower fish prices and permit values. If we can agree that farmed fish has and
continues to affect the marketability of Alaskan salmon, then why do we allow companies to sit on our
ASMI board who trade, value add, process, market and sell farmed fish? To steal a line from an older
Alanis Morrisette pop tune “Isn’t it a little ironic”? What other marketing organization or public entity
would put up with such a conflict of interest? Does the California Almond Growers have board members
who import and market foreign grown almonds? In military terms we would not allow a bonafide,
recognized Al Quada member to be in our Pentagon planning our anti-terrorism strategies. So why
should we be so naive to allow those profiting from fish farming planning our “wild” strategy to
increase market share and prices paid to our fishermen? Why should our Alaskan standards be anything
less? Why do we allow these companies to make fools of us? As an Alaskan, not in any leadership
position, I am ashamed that I have to be the one to bring this to your attention.
Be that as it may, lets go one step further. The ASMI board has passed a policies and procedures manual
that outlines the conduct of employees, use of logos, procurement, etc. On page 55 they have a policy
pertaining to Conflicts of Interest. In this policy, conflict of interest is defined,
”First, there is a private or personal interest, often a financial interest. Example-representing any farmed
seafood product for reimbursement at the same time that the contractor is under legal contract for
ASMI”.
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“The second feature of the definition, an “official duty”- quite literally the duty the contractor has
because he/she has an office or acts in an official capacity as a representative of ASMI”.
“Third, conflicts of interest interfere with professional responsibilities in a specific way, namely, by
interfering with objective professional judgment. A potential conflict of interest involves a situation that
may develop into an actual conflict of interest.”
”Fourth, the appearance of perception of conflict of interest. Contractors must avoid conduct that creates
a reasonable impression that any person associated with the farmed/aquaculture seafood industry can
improperly influence or unduly enjoy their official favor, or that they are likely to act (or fail to act)
because of kinship, rank, position or undue influence by any party or person associated with the
farmed/aquaculture seafood industry.
Now as a common man would read this, it is clear that we do not hire contractors or employees who
represent any “farmed seafood product” at the same time as they represent ASMI. Does not our ASMI
Board member represent ASMI? Do they not have an official capacity? Do they not have a fiduciary as
well as an “ethical” responsibility to our industry? Is it proper for ASMI Board members to pass conflict
of interest policy or resolutions onto subordinate’s behavior and then not have the decency to follow
their own conflict of interest policy? Leadership requires setting the example. I do not think we should
have any ASMI Board of Directors who will not set the example in this important area. Our industry is
under siege from the farmed fish industry yet we allow board members who develop policy and
strategies to market wild salmon, to engage in the farmed fish trade. It is obvious that they have a
financial interest in farmed salmon so their personal and corporate interests are contaminated and are at
odds with their ASMI directorship. There is a clear conflict of interest and this is tearing down the
credibility of ASMI until it is remedied by legislative action. ASMI board members who have a conflict
of interest should have already resigned or spun off farmed fish interests long ago. Since they have
refused to do the honorable and right thing, legislation should be passed giving farmed fish ASMI
Board members 90 days to disengage from the purchasing, trading, processing, marketing and or selling
farmed fish or they should immediately resign their seat. I also think that every ASMI director must sign
an oath that they do not and will not produce, trade, process, market or sell farmed fish.
I would further ask that no member of ASMI (director or other) that purchases, trades, processes,
markets or sells farmed fish can receive any trade trips, remuneration, travel, or officially represent
ASMI in any manner at any function. This will include any and all membership in committees and
subcommittees of ASMI. I would also ask that any marketing monies that are spent on “parochial”
clients (grocery store chains, restaurants, foodservice, etc) be done so they are not done for the sole or
primary benefit of ASMI members who currently engage in the farmed fish trade. For example, lets say
Grocery Store chain XYZ receives large canned salmon promotions (big bucks) from ASMI, but
Grocery Store chain XYZ buys fish exclusively from an ASMI member who engages in farmed fish
trade and has an ASMI board member (Processor Q). Grocery Store chain XYZ currently buys not only
its canned salmon but also (because of ASMI promotional money) all of its fresh and frozen salmon
(wild and “farmed”) and possibly its surimi and farmed tilapia too from processor Q. This is unfair to
use ASMI canned salmon funds to leverage farmed salmon sales. There is not only an appearance of a
conflict of interest with ASMI promotional monies; this is a conflict of interest. The ASMI Board of
Directors has failed to set up an audit committee and now you see why.
By immediately demanding that farmed fish sellers resign from ASMI, we can effectively preclude
Processor Q from piggybacking farmed fish sales while using ASMI marketing and promotion monies
or clout to increase their non-Alaskan fish business. This “cleansing initiative” not only gives the true
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Alaskan company an incentive to not engage in farmed fish, but also provides consequences for the
quasi-ASMI member that sells farmed fish from leveraging their ASMI relationship and profiting from
limited ASMI funds to promote their farmed fish business with parochial clients. This action will get rid
of any real or perceived corruption that currently exists in ASMI promotions. Like the old saying goes,
“you are either with us or you are against us”. You are either purely supporting wild fish or you are
against us. We need to start fresh and get rid of what is “contaminating” our policies and strategies as we
move forward in marketing our wild salmon against the non-ending onslaught of farmed fish. Fact of
the matter is that we need everyone rowing in the same direction and we cannot afford to have a “farmed
fish” director rowing the other way or punching holes in our boat while we bail. This is how we unify
the industry by ensuring that everyone is rowing the same direction by getting rid of those that compete
against our industry.
Lastly, I will point out that the ASMI board of directors only meets twice a year. Many in this industry
feel this is woefully inadequate and that more meetings should be held until ASMI regains market share
for Alaskan fishermen. Sure we all are busy, but that is the cost of commitment. Some would argue that
we are in a crisis. However, these meetings “fly” people in so out of a two-day meeting, a full day is
spent flying in and out (to Seattle). The Alaskan fishermen deserve better from their ASMI board. The
word I want to use is “accountability”. ASMI is not broken, its Board of Directors are.
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 ensure that every Alaskan school child understands that what is good for Alaskan
fishermen is good for the State. I am not advocating expensive curriculum changes, only
acknowledgement of the facts! I also think that each Alaskan school child should be able to eat high
quality (not twice frozen) Alaskan salmon because some urban parents cannot afford it.
No public high school in the state offers fishing related curriculum on marine safety, navigation (math
and geography), boat repair, salmon biology, etc. Yet farming states have robust high school Vocational
Agriculture programs integrated into their curriculums. It seems that our education system is geared to
get our citizens “out” of coastal communities rather than offer curriculum that keeps our citizens “in”
coastal communities. Our state educational system is developed and operated by well meaning folks
who do not live nor understand what fishing means to this State. We live in two worlds: Coastal
communities and urban centers. The educational needs of the two worlds are different but they should be
respectful of each other. The more educated a person is (whether it is book learned or experienced) the
more money he or she makes and catches more fish when compared to a less experienced and less
learned fishermen.
Fishing is not pushed as a viable occupational choice when State mandated educational curriculums are
developed and implemented. Fishing is and should be respected as a viable occupation in our schools.
After all, the oil patch is going to run dry some day.
At a minimum, there should be some acknowledgement that fishing is a viable occupation and
curriculum over time could be geared to reinforce the fact that fishing is a viable occupation for
Alaskans.
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?
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My experience with the Marine Advisory Program and the Fisheries Industrial Technology Center in
Kodiak has been first rate. However, research is an investment in the future and I do not think fisheries
research gets enough funding. We need to know how to farm raise cod and black cod (technology
development). We need an answer for the Arrowtooth flounder problem. We need viable, deployable,
and cost effective hydrolysate technology. We need to know how to farm raise crab. We need to find
faster and smarter ways to process fish (cut labor costs) in order to make processors more profits and so
there is more money to pay fishermen and fish processing workers. Norway and Denmark pay a very
high rate of labor, yet they use technology to overcome this cost.
If we want to be on the cutting edge of seafood technology, we need to invest in research and compete
against the rest of the world. If we do not invest, we will continue to be the dinosaur and the village
idiots of the seafood processing industry. We need to extract the technology and the power it brings back
to Alaska rather than depend on Washington and BC universities for cutting edge developments.
In addition, our Universities offer Marine Science degrees. It is time we look at, recruit and support
Food Science and Seafood processing technology degrees so we can home grow the future leaders of our
seafood processing industry here at home.
3. If you are displaced by changes in the salmon industry, what could the state do to provide
retraining and/or alternative employment?
FOR MOST FISHERMAN-FAILURE IS NOT AN OPTION. Our people, Native and White have been
fishing long before Alaska was a State and we will still be fishing for generations as long as our species
are managed on the principle of sustainable yield. Some fishermen may get their ass kicked in some
fisheries, and many our struggling to make permit and boat loans, but resiliency is a hallmark of the
Alaskan fishermen. In fact, I think many “real” fishermen would take re-training as an insult. (However,
I can only speak of fishermen that I associate with in Southeast). I also think this is a very poor option
to use public money because it legitimizes our elected leaders failure to fix the fishing problem and
instead attempt to only fix the symptoms.
I do not want to sound like I am attacking and I do not want to be condescending but the only problem
we have had in this State with total fish run failures is in the Yukon and Kuskokwim river systems. The
truth of the matter is that the Yukon and Kuskokwim failure was avoidable, but nobody wants to listen
or admit it because it is not politically correct. The river people (they had reasons) made a very vocal
and collective decision to not have river-based hatcheries. Many of these same vocal opponents to
hatcheries do not have the wherewithal to admit they were wrong…now. Instead, they steadfastly attack
areas that do have fish (Southeast and South-central) yet they fail to admit that they are responsible for
their own problem (after all it is easier to blame others rather than take responsibility). These same
people continue to hold onto the misguided belief that now SE hatcheries are their sole problem with the
mistaken belief that if all hatcheries were miraculously shut down, their fish would miraculously return.
It may not be politically correct to admit you are wrong, but these folks are just plain wrong. It was not
politically correct to argue that world was round and not flat at one time too. The river fishermen
collectively didn’t want hatcheries then and now they have depressed economies and no fish runs.
Maybe training money can be better spent to retrain these river fishermen into farmers so they quit
complaining about the hatcheries that are thousands of miles away from their fishery. I have no right to
say how Bristol Bay and the Yukon fisheries are managed. Likewise, these folks have no right to say
how ours is managed.
Agency Oversight
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1. Apart from the Board of Fish decisions, are there other state agency regulations that could be
changed to benefit Alaska’s salmon industry?
Fish and Game is tasked with managing our resources based on sustainable yield. The legislature fails to
adequately fund and earmark monies toward developing species and even mature fisheries. Managers
shut down or sometimes do not even open fisheries when they have no data to base a decision on.
Therefore, due to poor funding some fisheries do not get harvested or even investigated for fishing. This
shortsightedness keeps fishermen’s incomes lower than they should be and robs the state of taxes that
could be paid on these resources if managers had adequate funding to manage fisheries for sustainable
yields.
All administrative regulations in every department should be reviewed so that they support our fishing
industry. For example procurement regulations should encourage the purchase of Alaskan seafood for
State institutions such as the Marine Highway, the Pioneers homes, the Universities, the Correctional
Institutions and any other state owned and state funded institution should do more at buying and using
Alaskan seafood from Alaskan companies.
Alaska needs to support its primary employing industry with an attitude that what is good for Alaskan
fishermen is good for Alaska.
2. Do you support Alaska’s board of fish process? Yes
If changes are necessary, what would you suggest? Lessen the politics. Appoint individuals that have
demonstrated open minds and who are willing to look at a problem from all angles rather than be
selected because they have a premeditated agenda. Appointments to the Board of Fish have become
more political than appointments to the US Supreme Court. It will take leadership to lessen the politics,
but that is what we elect people to do: to do the right thing.
I think regional issues that do not have an effect or overlap into other regions should be taken up
regionally. As a Southeasterner, I really do not think it is my business to tell the Yukon and Kuskokwim
fishermen how to run or manage their fisheries, just like I do not think that a representative from that
area has any right to tell me or other SE fishermen how to run SE fisheries. Especially when an issue or
a decision’s impact is only felt in one region. We are a big state. There are too many local and regional
issues for the Board of Fish to manage and listen to. There are more and more proposals at every BOF
cycle. The BOF seat is not a full time job, but it seems that it is becoming one. If there is not a change,
then it will become a full time job. Regional problems deserve regional solutions with little to no
interference from other regions attempting to dictate their parochial interests into another regions issue.
We would all get along better if we did not have some overzealous people always trying to swim in
someone else’s pool. Regionalization of issues keeps highly opinionated and overzealous political types
from other regions from selfishly urinating in my pool.
3. Do you support a task force created by the legislature to review the Alaska Board of Fish?
I am naturally leery at any new task force, board, etc. for the simple reason that too many appointments
are political positioning and too many task forces accomplish anything but spend money and get hopes
high that they will do something. In addition, leadership and ability of the members is usually the only
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ingredient that either makes success for a task force or ends in mediocrity and indecisiveness. For
example, the production committee of this Legislative Task Force had two prominent Seattle based
processors that market and sell farmed fish scooping out production issues. Their financial interests
(despite any emotions the contrary) are different than Alaskan owned and Alaskan managed processors
and their viewpoints in the process reflected the difference. A task force to review the board of fish only
throws another political layer on an already politicized process. What would this task force become? The
Supreme Court Board of Fish to overrule unpopular or politically incorrect decisions? Without the
benefit of more information, this appears in my opinion to be a bad idea.
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?
Again, I am leery and skeptical of boards and task forces because quite frankly, they have not succeeded
in doing very much in the past. However, as I read this question the key word is to “advise” so the onus
would be on the legislature to act. As such, a very important question arises, who decides who the
advisors are? The legislature… or the industry? Again, parochial interest advisors will advise for
parochial purposes. If the commission advisors were determined by fishing groups and Alaskan owned,
Alaskan managed processors, I think it has some merit. Especially since these advisors would have the
interest of “Alaskans” as their focus and interest. However, if the advisors are legislatively selected and
Seattle based processors are advising the legislature, I am against it. Any advice for this industry must
come from the people that vote and live here, not outside interests that have headquarters in Seattle or
Tokyo. Alaskan problems must be Alaskan solved and we already have too many advisors from Seattle
and lower 48 who seem to know more than we do. It is time to debunk this myth.
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?
I will try and break down the question as it has different parts even though they are mutually inclusive.
Economic Development Issues: Key mission- How does the legislature grow more money and upgrade
local sustainable economies through government intervention, laws or policies?
1. Support capital improvements in building upgrades (safety, fire protection, etc.) at rural and
urban Alaskan plants by offering legislatively mandated incentives (loans, tax credits, grants) to
companies to invest in Alaskan plants.
2. Support value added equipment, quality improvement equipment, and seafood technology
equipment capital improvements by offering legislatively mandated incentives (loans, tax credits,
grants) to companies to invest in Alaskan plants.
3. Mandate that State Ferry Systems develop and implement a “fast freight” ferry service to move
“fresh” fish to road systems. Processors make more money on fresh fish and in return fishermen
will make more money on fresh fish that can get to the market in a fast turn around.
4. Mandate that all road-building analyses take into account the impact that it will have on
improving and moving “fresh fish” to the market. Our road infrastructure and transportation
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infrastructure is holding small processors from competing in the world markets. The road out of
Juneau to Haines and Skagway would allow Kake Foods to move its fish to Juneau and have it
trucked to Seattle in 30 hours. We would gladly invest in a high-speed landing craft to move our
20,000 to 40,000 fish at a time to a road head. Currently we cannot move fresh fish by Ferry,
barge or by other commercial means. Chile who is a second world nation can, but Alaska is third
world when it comes to transportation.
5. That the State develop a transportation plan that incorporates air, waterway, roadway and
railroad transportation corridors that allows the fishery resources of this state to go to the market
at the same cost as the rest of the world. Currently it is cheaper to ship frozen fish from Seattle to
Japan than it is to ship the same pound from SE Alaska to Seattle. In addition, Chilean airline
companies charge less to move Chilean salmon to Miami than what it cost to move Alaskan
Salmon from Anchorage to Seattle. Until the State does something in this critical logistical arena,
we will not be able to compete on price. Our fishermen and industry suffer from a third world
transportation infrastructure. Even China has massive high-speed ferries to move people and
freight.
6. Encourage coastal Native corporations to invest in their local fishing industry by allowing them
to loan and lien limited entry permits. This act will allow Native corporations the ability to invest
in their own people for the betterment of their coastal community and to help stem the flow of
limited entry permits out of coastal communities.
7. The Attorney General’s office should prepare an annual report on fish prices paid throughout the
state to give the industry a clean bill of health that it all regions are being operated fairly and
without undue or unnatural influences.
8. The State needs so investigate analyze and report to the public why freight rates are more
expensive in Alaska than in the rest of the world on a pound per mile basis. The public needs to
know why it is more expensive to ship fish to Seattle than it is to ship the same fish from Seattle
to Japan. The public needs to know why the barge company makes more money per pound than
the fishermen who caught the fish.
9. The State needs to investigate how Chile and its various airline companies can ship fish fresh
from Patagonia to Miami cheaper than what it costs fish from urban airports from Alaska to
Chicago
Community concerns that need to be addressed by the legislature.
1. Coastal communities need access to funds and infrastructure that allow them to promote and develop
their fishing economies.
2. The State needs to maximize its use of Federal matching dollars for rural community development of
harbors, docks, and transportation infrastructure.
3. Communities dependent on Ferry service need to have ferry service expanded to move “fast” fish to
markets so smaller communities can effectively compete in the fresh fish market. Roads need to be built
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where roads can improve access. These roads would free up ferry service to provide better ferry service
to communities that cannot physically have roads.
Individual concerns that need to be addressed by the legislature.
1. Fishermen need to feel and know that they can depend on their legislative leaders that they are
genuinely interested in bettering Alaskan fishermen’s lives. Right now, fishing issues and fishermen are
treated like second-class citizens despite the fact that they are the only citizens that pay a personal
income tax. Fishermen need a reprieve on their fish tax or more services need to be provided to
fishermen for the payment of these fish taxes.
2. Fishermen need to know that when they sell their catch that they are getting paid what the market will
bear and not be suspicious that unnatural or non-market forces are at play.
3. Fishermen need loans to be able to upgrade their boats in order to make quality improvements.
4. The state needs to vigorously protect permit values by analyzing future management decisions and
then considering how these decisions affect permit values. Permit values are reflective of expected dock
price values and expected volumes. The goal of increasing volumes and simultaneously increasing dock
prices must be at the forefront of non-biology related fishery decisions.
5. Provide easier methods for fishing boats to become DEC certified so that they can become
catcher/sellers and therefore allow fishermen to sell directly to the public, restaurants, etc. if that is
something the fishermen desires to pursue.
6. Reinstate IRS payment loans.
7. Market and make all loan programs more accessible to coastal communities by allowing
fishermen/deckhands to apply on line. We should establish a goal of increasing permits into coastal
communities by 10% every 5 years and then develop programs to meet these goals.
Conclusion.
It is with great hope that our legislators work with the new administration and this next legislative
session to take up issues and make the needed progressive changes for our fishing industry. The power
balance in our industry must be tilted toward our fishermen and away from outside fishing interests that
control, dominate and skillfully exercise their power to keep our fleets submissive and taking home less
monetary share of the income pie.
Our fishermen have quietly watched their permits lessen in value, their dock prices shrink, but now a
sleeping giant of discontent is stirring. Our fishermen are not fools and are getting tired of being
mistreated and without respect. That respect must begin with the legislature. Not only are our fishermen
taxed at up to 3% of their gross income. But insult is added to injury when the State of Alaska
legislature through its outdated hatchery policies have become a party to an impropriety whereby
Southeast fishermen are receiving a minimum of 25% less on their dock price because the current State
of Alaska hatchery policy has forced them to become unwilling participants in subsidizing very high
hatchery bids. Has it ever occurred to you why Seattle processors and their lobbyists have not asked for
hatchery reform before or loan forgiveness? I went to the hill last year and was told that nothing could
be done about hatchery loans that a refinance was all they were going to get…to forget about loan
forgiveness. I ask you to take 28% (3% tax plus 25% lower dock price) out of your pay and see how
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you would feel about it. Hatchery loan forgiveness and more state control is an essential component to
righting a devastating wrong occurring against our Southeast fishermen.
There is no justifiable economic reason why so many fishermen cannot afford to fish and leave their
boats tied to the dock. There is no justifiable (on free market based grounds) why dock prices are so low
yet hatchery prices are so high in Southeast Alaska. Seattle based processors have used the volume
differential (justification for the higher prices) excuse for too many seasons as a convenient mechanism
for fishermen manipulation. This price disparity between hatchery salmon and the price paid at the dock
has become the mechanism to “manipulate”, “control” and dare I use the word, “domesticate” our
Alaskan fleet economically. Hatchery volumes and processor control of these volumes has tilted the
balance of power against the “voting Alaskan” fishermen to work for lower settlements than what the
“true” market is willing to pay for their salmon. Fishing permit values as a result are also artificially
lower. The whole idea about permit stacking and buying up permits would be eliminated if “true”
economics in our fishery replaced the “manipulated” economics that currently exist. It is all related and I
have attempted to connect the dots for you on a simple and concise basis to complex issues.
We need Alaskan leadership because outside based leadership is what got us where we are at and they
have proven that their leadership is only good for the banks and processors in Seattle, not our fishermen.
My recommendations would change that and would provide more of “our” money staying in our coastal
communities providing better livelihoods for our Alaskan coastal families.
I have waited for the right time and place to present these thoughts, analysis of the situation, the
problems and the solutions. This task force, I hope was the right forum. Some very powerful people do
not share or appreciate that I give you my frank opinions and that I “connect the dots” for you. It is
because I believe (possibly vainly) in this remote possibility of a better future for our fishermen that I
have taken the risk to reveal what is going on. I would rather not have to expose problems, but I have
waited for the right time and place where these problems would be listened to and more importantly
acted on. It is that reason and hope for problem resolution that I have spent not only my time, my
reputation, but I have opened myself up for personal attack for the recommendations that I have made in
my reply to you. I expect some repercussions from a hatchery or two that may be making more off of
fishermen than they should and I expect some retaliation from my some Seattle competition that see my
statements as an attack on their status quo and my unwillingness to go along with the “defacto” program.
I know there are many in the processing industry that would not like to wake up the skipper who has
apparently fell asleep at the wheel or who are ignorant to ways in which this or any oligopoly industry
works. You are that skipper and I hope that you are now awake.
Teddy Roosevelt who was known as a “conservative” (some even called him a radical before they too
went to jail) monopoly and oligopoly buster because he saw how they destroyed initiative, creativity and
enslaved common hard working people to the evils of unbridled corporate power, greed, and predation.
He said it best:
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the
doer of deeds could have done them better. The credit belongs to the man who is actually in the arena,
whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short
again and again; because there is not effort without error and shortcomings; but who does actually strive
to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy
cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he
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fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid
souls who know neither victory nor defeat.”
Theodore Roosevelt (1858 - 1919), "Man in the Arena" Speech given April 23, 1910
I personally think that Teddy Roosevelt was describing an Alaskan fisherman. As such, everyday I, like
many other Alaskans are in the seafood arena, trying to make a living for ourselves and our families, for
our Alaskan employees, increasing the economy of our small coastal villages, and bringing more permits
into the citizens of our coastal communities. Although I may be ridiculed and attacked by my opponents,
and have the financial deck of cards stacked against me, I shall be comforted with knowing full well
how hard that I, and many others in our Alaskan fishing industry have fought and how we have tried to
do what is right for this industry. I will never suffer the same fate as those cold and timid souls who see
harm, yet do nothing. I am only asking that the business “arena” that our fishermen must deal with is
“fair”, nothing more. I think we deserve nothing less.
I firmly believe that after all the oil is gone, there will be many of us Alaskans left. Many Alaskans like
myself will be making our livelihood from the sea, like generations have gone before us. Therefore, I
ask you, our elected officials to take some risk, to get in your legislative arena and do what is right for
the fishermen of this State. I ask that you be tenacious, creative and constructive for this industry that is
made up of rugged Alaskan individualists who get in the arena every time they pull away from the dock.
If nothing else, I ask you to prove to the Alaskan fishermen and the small Alaskan processors that this
legislative task force was not a waste of taxpayer (remember fishermen are the only personal income
taxpayers of this state) money and that you truly do something for our future.
I would like to share with you a thought regarding change written in the 1500’s. Although written 497
years ago, it is still true today:
“It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct,
or more uncertain in its success, than to take the lead in advocating and introducing change. The
innovator has for enemies all those who have done well under the old conditions, and lukewarm
defenders in those who perceive that they may do well under the new system”.
Nicolo Machiavelli, 1505, The Prince.
I firmly hold that until this industry is “Alaskanized”, we will always be subservient to outside interests.
Change, therefore is not necessary, it is mandatory.
I would like to mention something on predicting change and why I feel that my words that I have
illustrated before you should be listened to and that some serious consideration be given to the changes
that I have recommended. In January 1993, I wrote a 14-page white paper titled, “Commercial Fisheries
2000- The Dream, The Mission, The Path”. This small 14-page copyrighted paper had an introduction
written by Governor Jay Hammond (I believe there are a few copies still at the State Library). This small
white paper called for the then current politicians to implement steps to “Alaskanize” the Alaskan
Seafood Industry through policy and legislative changes. In this paper, I advocated procedures as well as
plans to bring more permits into more Alaskan hands and to grow and nurture our homegrown
processors who respect their local fishermen rather than see our fishermen as opportunities to be
financially abused.
In addition, the paper described in simple laymen’s terms how price fixing was occurring in Bristol Bay.
Later the same year, the Alaska Attorney General’s Office issued a report regarding findings of price
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fixing in the Bay. Our 1993 and 1994 legislature had the knowledge and ability to act on Bristol Bay
price fixing issue but the legislature failed to act. In 1995, two years after this paper was published, a
lawsuit was filed based on the same premises that were formulated in that simple 14-page paper.
Unfortunately previous legislative sessions inaction resulted in this issue being taken up by the courts
(what I call the Pontius Pilot effect). The suit (avoidable by the legislature) has divided this industry and
has thus far cost millions of dollars and it still is not resolved. I ask that you to not repeat the same
mistakes of your predecessors in the previous legislature and to act responsibly and accordingly on the
issues that I have brought forward today.
Today, even more circumstantial evidence exists that price manipulation is occurring in Southeast
Alaska than what existed in Bristol Bay in 1993 and I cannot blame this one on Japanese buyers.
Furthermore, our industry is on hard times so the prudent and wise course of action would be to quickly,
proactively and without hesitation introduce hatchery reform to keep this issue from ever seeing daylight
at a courthouse. I will make the prediction that you have only this upcoming session to resolve hatchery
reform before the courts become involved. There are a lot of fishermen who resent that their dock price
and permit values are being manipulated through the present cost averaging scenario. Once a problem or
an idea (like I have illustrated) is exposed (through the Task Force proceedings), it is like a genie that
came out of a bottle. The ideas cannot be stuffed and shoved back into the bottle where we can politely
ignore them and pretend to go back to our previous ignorance. I have exposed for you something that
you must act on. I firmly believe that our industry through legislative action must overcome its
problems internally with wise men, with wise legislative leaders and without court intervention.
However, the ball is really in your court to either succeed or fail in this matter.
I mention the “Bristol Bay Price Fixing lawsuit” in this response to your questions because they are
similar situations that will bear parallel consequences. I will not use the word “price fixing” today as I
did in 1993 because “price fixing” is too strong of a word and my goal is to avoid litigation. I will not
use the word, “conspiracy” today as I did in 1993 because that is too strong of a word and I do not want
to polarize. However, I will state that where there is smoke, there is fire and upon investigation we will
need a fire truck (legislative action) to put the fire out and protect this fishery from continued
manipulation and an immediate correction made to avoid another embittered lawsuit.
Additionally, I fervently believe that ASMI policies would be substantially improved and our marketing
more “Alaskan” strategic if ASMI director’s viewpoints were not contaminated with profits from farmed
fish interests. However, if the Legislature fails to act on three problems (hatchery reform, taxation of
fishermen without providing adequate services, and the Alaskanization of ASMI) and again pulls a
Pontius Pilot on this industry, then in due time these issues will be taken up in the courts to make
corrections. Your leadership demands that you are held accountable on this prediction.
You asked for responses. Colin Powell, once stated, “Be careful of what you ask for as you might get
it”. You asked for input, and I have given it to you. Good luck. After this is printed, I will need some
luck too as I am sure that I will get many phone calls, e-mails and smart ass comments from my
competitors and certain hatcheries for speaking my mind and convictions on these matters. I am sure
my competition thinks I am a pain in the ass, but then I am an Alaskan and I do not belong to their
Seattle country clubs or have fat bank accounts made from exploiting my fishermen brothers. As an
Alaskan, I must do what is right for the fishermen that I live, work and am proud to associate with. It is
in this same spirit that my words are not intended to offend anyone, but to expose what is right and what
I perceive as the truth. I have identified problems, and not only provided a paradigm shift, but more
importantly I have identified “solutions” to these problems.
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As a free capitalist system that encourages competition, we should allow the free market system to work
without price manipulation, loan manipulation, and farmed fish interests contaminating how we market
salmon. To those making it big on the status quo, my ideas sound radical. To everyone else they are
common sense. The real question is where does our newly elected Governor and our 2003 legislature
stand?
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Name: John Bocci
Email: bocci@ctcak.net
Address: Box 1312 Cordova, ak
Phone: 907-424-5182
Fish_area: PWS/COPPER RIVER
Gear_type: gillnet
November 30, 2002
Quality
1. A) What does the Alaska salmon industry need to achieve a higher quality product?
The few quality incentive programs in place only serve a small portion of the fleet. Whats needed is a
mechanism to bring the bottom up, wider use of ice, bleeding, rsw, early delivery and a cash incentive to
encourage use, but it's up to the tendermen and processors to make sure they use the incentives
correctly. Would the loosening of wanton waste laws keep some of the bottom end product off the shelf
and eliminate some of the costs' associated with processing and holding that product, thereby adding to
profitablity?
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?
Tough to enforce, again, cash works best. Seems improbable that a blanket statement such as that could
be applied statewide.
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
The differances in fisheries and infrastructure vary greatly from region to region. Maybe adopt area
standards that would fit or comply with some sort of state seal qualifications. I'm not too sure how it
would work or be enforced and would be hesitant to create another level permiting etc.. Private sector
agreements still work best.
3. Should the state have a quality education program for industry participants?
Deep down everyone knows what they have to do to deliver a better product.
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
The continued ability to fish and compete in the global economy should be incentive enough but again it
comes down to those few extra pennies to make it happen.
Marketing
1. Do we use existing state salmon promotional structures or do we change the structures? If changed,
what changes should be made?
ASMI, by its public/private status, is a strange beast. There should be a way to untie their hands to
enable them to operate more like a private sector corporation and still keep them accountable for their
actions. Without more $$$$ from the state or the industry to spend on marketing, ASMI will need more
tools, not fewer, to get the job done.
2. Who or what entity or entities should be paying for the promotion and/or marketing of Alaska’s wild
salmon?
The industry should continue to fund ASMI through assessment and in addition I'd like to see
the state appropriate funds to ensure the consistant funding that’s needed for a successful marketing
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program. Our competition already has that advantage over us. If the legislature is willing to fund tourism
marketing then they should be willing to help our industry as well. The numbers that show the economic
contribution to the state are there.
Production
1. How can we remove or reduce costs from the harvesting sector in a way that allows regional selfdetermination?
The conversation seems to lead to fleet reduction, a possible solution that I'm not completly comfortable
with. Who pays for it? Will it be an added cost to those that want to stay in the business? Economic
attrition seems to be doing it right now without costing me a dime. What will the impacts be on the
coastal communities? Whats to keep all the remaining permits from leaving the state? If such a program
is put in place then it should be developed on a regional basis by the active participants in the particular
fishery. Personally, I'd like to exhaust all options to keep everyone employed and contributing to the
states economy before going there.
2. How can we remove or reduce costs and aid the processing sector?
Revisit the wastewater discharge laws, they dont work as they are and are costly. Insurance pool? The
creation of a revolving loan fund for pack loans? Loosen the wanton waste laws but be aware that that
could be a public relations black eye.
Finance
1. Are there better ways in which the state can use existing fishing industry taxes to assist the salmon
industry?
Tax incentives for the developement of new products and market developement and value
added processing equiptment. More funding for ADF&G comm fish, continuation of the revolving loan
program.
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 current system is working well, I do not endorse a statewide policy. Although there may be some
issues that need resolving they are best left to the regions to deal with. The fishing industry is in a
constant state of flux and as a result the hatchery program is a constantly evolving operation, whether its
species, production levels or cost recovery methods. The board process currently in place at the regional
corporations is a good one. They have the ability to respond to the previous seasons issues while trying
to anticipate the coming seasons problems. I see no way a legislative mandate could improve upon that.
Perhaps some sort of performance standard could be set but it would need to reflect a long term average
if it were to have any meaning, but what's the con! sequence and who enforces it?
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 industry suffers from a serious brain drain, from ADF&G to our hatcheries. The university
system could could provide more and better programs in fish culture, biology, and management.
3. If you are displaced by changes in the salmon industry, what could the state do to provide retraining
and/or alternative employment?
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I dont want to be a mechanic.
Agency Oversight
2. Do you support Alaska’s board of fish process? If changes are necessary, what would you suggest?
Yes I support the board process. Up until recently it was a "relatively" apolitical process. Aside from the
agendas and politics of the participants, part of the problem has to lay with ADF&G. Few things are
more frustrating than to sit in a board meeting for days on end only to see staff stare at their shoes while
the board completly bastardizes their work to achieve their goal. I place part of the blame on dept.
veterans and the commissioner who allow this to happen. Without their support staff has no one to back
them up. We need leadership at ADF&G. Perhaps more involvment of the adisory boards and maybe
split the board, say statewide finfish as one and all others as the other.
3. Do you support a task force created by the legislature to review the Alaska Board of Fish?
Perhaps on a five or ten year cycle the board process could be reviewed.
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?
Redundunt. UFA,Seafood council,ASMI,Board of Fish,Fish Caucus. They already exist and any new
process would probably be made up of most of the same individuals who already have too much work to
do. We need a legislature who is willing to work with the forums already in place. However, a process to
follow up on this task force's recommendations might not be a bad idea.
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 for infrastructure, ice plants,community processing facilities, meal plants. If nothing else, just
basic support of this industry thats so important to the state and coastal communities
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Name: Winston Gillies
Email: seafoods@alaska.net
Address: PO Box 1486, Kenai, Ak. 99611
Phone: Global Seafoods business phone 907-283-9646
Fish_area: Cook Inlet
Gear_type: Drift
November 30, 2002
Quality
1. A) What does the Alaska salmon industry need to achieve a higher quality product?
Public Ice machines at each River dock for any fisherman to use for is days catch. Grant money to
inlarge my fish hold. It's required on my boat for days of over 3K pound catch days. It takes bigger area
to store ice, sort fish, bleed and ice. On big catch days, the fish come in so fast, we may have a limited
time to get the fish out of the net before going over a line, leaves no time to stop and ice fish before they
get too deep in a bag.
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?
Yes, but it cost to insulate fish holds and I have too many loans now.
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
Yes, it would/could become known world wide. And if it's from the state - there would be only one
certification known by the world for any Alaskan fish to pass and not a different certification per area of
state. Same test / same quality no matter what area a fish is coming from.
3. Should the state have a quality education program for industry participants?
Yes
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
Grant money to enlarge my fish hold and insulate it.
Marketing
1. Do we use existing state salmon promotional structures or do we change the structures? If changed,
what changes should be made?
A fisherman has no way of knowing the results of how he is handling his fish because they are mixed
with all others sold to a processor. A fisherman does not know if his processor is doing all he can to
handle the fish correctly and marketing the best possible. I would like all fishing and processing to be
co-op'ed, that way we all are shareing in the bottom line.
2. Who or what entity or entities should be paying for the promotion and/or marketing of Alaska?s wild
salmon?
If the state is paying for tourest attraction and oil industry encentives, then why not help commerical
fishing just as much as any of these other industries.
3. Should the state help individual fishermen promote and market their wild salmon? If so, how?
Yes! Set up Co-Op's like "Leaders Creek" in the bay and have grant money tied to help from
Development Dept.s in the area. Cheaper shipping for the small guy.
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Production
1. How can we remove or reduce costs from the harvesting sector in a way that allows regional selfdetermination?
Set up Co-op's like "Leaders Creek" and anyone that can not make it - goes under.
2. How can we remove or reduce costs and aid the processing sector?
Again, set up Co-ops like "Leaders Creek" in the bay. Grant money buying out processors interest to the
level of fishermens investment and keep managemanet on hand if Co-op agrees. Put each on same level
of interest so common goal can be reached.
3. In addition to the removal or reduction of costs, are there statutory/regulatory changes that can help
the harvesters and/or the processors?
Yes, removing of fish from a net before going over a line, does stop fish from being layered correctly
with ice. Bigger boats/fish holds would allow me to later reorganize the catch for bleeding and icing.
Finance
1. Are there better ways in which the state can use existing fishing industry taxes to assist the salmon
industry?
Agressive promote the difference of Wild vs Farmed.
2. Do current State of Alaska loan practices address the needs of the salmon industry? If not, what
changes would you suggest?
I can not get a boat loan because I have a loan for my drift permit through the state. Unless that has
changed in the last few years.
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?
No.
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
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?
None, the industry is doing too bad to talk someone into it.
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?
None
3. If you are displaced by changes in the salmon industry, what could the state do to provide retraining
and/or alternative employment?
Pay me the $85K for the drift permit & $40K for my boat & $20K for gear and we can walk away form
each other.
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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 BOF has been too much as it is. Too many dept. for a person to deal with to process his own fish /
too much cost.
2. Do you support Alaska’s board of fish process? If changes are necessary, what would you suggest?
Do away with the BOF and let the Bioligest run the fisheries.
3. Do you support a task force created by the legislature to review the Alaska Board of Fish?
Yes - If only they could put Coffee & Penny & the ex govenor in jail for stealing from commercial
fisherment and sportsmen alike. The guides have ruled too long.
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
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?: Fishing is a why of life. Just
today one of my grandson's (8 years old) and I was taking about him fishing with me next year. He was
saying that one day the boat would be his and it would stay in the family. I have 7 grandkids and most
will fish wiht me as they get bigger - IT'S A GREAT WAY FOR US TO SHARE IN ADVENTURES
AND TIME TOGETHER. KEEP THE INDUSTRY ALIVE for the future. Next to farming and hunting
- It is one of the oldest ways of making a living.
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Name: Stephen R. Braund
Email: srba@alaska.net
Address: P.O, Box 1480 Anchorage, Alaska 99510
Phone: 907-276-8222
Fish Area: Northern District, Upper Cook Inlet
Gear Type: Set Net
November 30, 2002
Quality
1. What does the Alaska salmon industry need to achieve a higher quality product?
Quality begins with individual fishers who initially handle live fish. Fishers can treat each fish
carefully, bleed and chill fish, not throw salmon, and deliver frequently. Limiting the number of salmon
in a brailer at one time also improves quality. Careful fisher handling is often difficult due to the
compressed run timing of salmon, but it is not impossible.
To encourage better quality fish coming from catchers, processors could pay more for these higher
quality fish. Processors need to be fair. In 2001, I made an agreement with a processor to receive an
extra $.05/lb for bled salmon. The following the week, the price decreased by $.05/lb and the
expectation was for bled salmon from all fishers delivering to this processor.
At the same time, processors could pay less for poor quality salmon.
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
Quality standards and a quality seal would not only encourage high quality fish, it would also serve to
educate a broader public that there is Alaska wild salmon. An Alaskan quality seal would help to
promote the distinction between Alaska wild salmon and farmed salmon in the marketplace. This is not
a readily apparent distinction a present. Fishers are not in a position to ensure that Alaska salmon is
marketed as such and a state seal could ensure that all Alaska salmon is indicated as Alaskan in the
market.
3. Should the state have a quality education program for industry participants?
I think both fishers and processors know how to achieve and increase high quality salmon. There needs
to be incentive to improve quality (e.g., higher price).
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
Consistently higher price for higher quality fish..
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)
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I have little faith that ASMI will address the farmed salmon issue. It seems quiet on this front and
farmed salmon is the primary reason for low Alaska salmon prices. Any marketing entity will have to
tackle the farmed fish issue as one of its primary goals.
Are any board members of ASMI also processors of farmed fish? If so, that would appear to be a
conflict of interest if ASMI accepts any funds from Alaska salmon fishers.
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)
Alaska fishers and producers.
3. Should the state help individual fishermen promote and market their wild salmon? If so, how?
Yes, in three ways.
First, a State of Alaska salmon seal that is mandatory for all Alaska salmon and illegal for non-Alaska
salmon.
Second, revise antiquated, illogical, and inflexible existing regulations that make it difficult for Alaska
fishers to market their salmon (discussed below).
Third, eliminate the requirement that individual fishermen have to pay 1% to ASMI and allow that
money to be paid to a local marketing organization.
Production
1. How can we remove or reduce costs from the harvesting sector in a way that allows regional selfdetermination?
First, ensure that any decision affecting a fishery is made on a local basis and do not apply a “solution”
from one locale to another without local approval.
Second, I am not an advocate of the “cooperative” model in that, for me, participation is at the core of
the commercial fishing experience. Why would I want to be a commercial fisher person who did not
fish? Furthermore, the members of the cooperative who do not fish could, over time, move away from
the community and thus take the commercial fishing benefits away from the community and region.
It is a guise to think that “we” (whomever that is) will allow “regional self-determination” with any top
down administrative construct that in reality, inhibits self-determination.
By and large, the Alaska salmon industry is facing a market and price problem, not a production
problem (with isolated exceptions).
2. How can we remove or reduce costs and aid the processing sector?
Distinguish between Alaska wild salmon and farmed salmon, including making advertising farmed
salmon as Alaska salmon illegal.
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3. In addition to the removal or reduction of costs, are there statutory/regulatory changes that can help
the harvesters and/or the processors?
Yes, current Department of Environmental Conservation regulations inhibit harvesters from marketing
salmon. Under the present regulations, an individual fisher can acquire a ADF&G Catcher/Seller license
and market their catch to entities other than a processor. This “niche” marketing brings a substantially
increased price to the harvester, and, in some cases, makes a marginal fishery under present exvessel
prices, an economically viable fishery. The primary ADF&G requirement is that a fish ticket is
completed so ADF&G can keep accurate harvest counts.
ADF&G does not monitor where the Catcher/Seller sells the fresh salmon, but I believe there is a law or
regulation that requires it to be marketed within three days of harvest. That is fair.
DEC has regulations that allow individual commercial fishers to sell their catch “{at the dock.”
However, under DEC regulations, commercial fisheries are prohibited from moving their catch away
from the dock without having a processors license. Even though the fisher only wants to drive the fish
across town, without doing any processing, DEC requires a processor license and the associated waste
disposal, warehousing, cooler/freezer, etc. as though the individual fisher were a processor. This puts
unnecessary hardship on fishers trying to niche market salmon.
This Alaska DEC regulation needs to be revisited and modified to allow fishers reasonable access to
fresh markets. This is an existing regulation that could be easily modified and greatly enhance
harvesters to market their catch for a much higher amount.
Of all of my comments, I believe this is the most important one and represents an area that could easily
be changed with a minor regulatory adjustment.
Finance
1. Are there better ways in which the state can use existing fishing industry taxes to assist the salmon
industry?
Yes, allow the 1% paid to AMSI to be paid to a local marketing organization.
2. Do current State of Alaska loan practices address the needs of the salmon industry? If not, what
changes would you suggest?
The current loan program seems flexible. I understand, and favor, that the program provides reduced
interest rates over time for timely payments and adjusts rates and/or payment schedules during times of
distress. These are positive features for loans to Alaska’s salmon industry.
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 do not view funding permit retirement as a State of Alaska function. Individual fishers, either because
of a history of fishing in an area or based on an assessment of the social and economic characteristics of
a fishery, entered into each fishery. I support a permit retirement program that is paid for by fishers
(with one condition described below). Tax fishermen 1% to build a permit retirement fund.
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The condition is that if permits in a fishery are retired and bought out, then the Board of Fisheries cannot
reduce the allocation to that fishery/gear type just because there are fewer fishers left. This defeats the
purpose of the permit retirement.
Governance
Hatcheries
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, I support a State of Alaska hatchery policy with performance standards with management through
ADF&G and allocation of surplus stocks through the Board of Fisheries.
Education
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?
Little state role at K-12 level; post-secondary and voc/tech fisheries education through the statewide
university system.
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 do not know.
If you are displaced by changes in the salmon industry, what could the state do to provide retraining
and/or alternative employment?
As long as I decide to fish (as long as the Board of Fisheries does not close my fishery for biological
reasons), I do not understand how I could be “displaced.” This question appears to have some “big
brother” overtones to it. I assume that as a permit holder, I will have the self-determination and
prerogative to determine if I want to fish or not (provided my fishery is not closed for biological
concerns). I do not favor any activity that would eliminate individual or local self-determination in
fishery participation.
Agency Oversight
Apart from the Board of Fish decisions, are there other state agency regulations that could be changed to
benefit Alaska’s salmon industry?
Yes, current Department of Environmental Conservation regulations inhibit harvesters from marketing
salmon. Under the present regulations, an individual fisher can acquire a ADF&G Catcher/Seller license
and market their catch to entities other than a processor. The primary ADF&G requirement is that a fish
ticket is completed so ADF&G can keep accurate harvest counts.
ADF&G does not monitor where the Catcher/Seller sells the fresh salmon, but I believe there is a law or
regulation that requires it to be marketed within three days of harvest.
DEC has regulations that allows individual commercial fishers to sell their catch at the dock. However,
under DEC regulations, commercial fisheries are prohibited from moving their catch away from the
dock without having a processors license. Even though the fisher only wants to drive the fish across
town, without doing any processing, DEC requires a processor license and the associated waste disposal,
warehousing, cooler/freezer, etc. as though the individual fisher were a processor.
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This Alaska DEC regulation needs to be revisited and modified to allow fishers reasonable access to
fresh markets. This is an existing regulation that could be easily modified and greatly enhance
harvesters to market their catch for a much higher amount.
Do you support Alaska’s board of fish process? If changes are necessary, what would you suggest?
Proposed changes to Board of Fisheries Process:
Scientific Staff to Board of Fisheries
One of the most important changes to the Alaska Board of Fisheries process that I favor is giving the
board a paid, full-time scientific staff to advise the board. Currently, the board is comprised of lay
member who have an enormous amount of scientific and other information given to them for each board
meeting. ADF&G provides scientific reports and information (often seemingly conflicting between
divisions), user groups present scientific information that they have summarized or have hired
professional biologists or economic firms to prepare for Board of Fisheries meetings, and individuals
and fishing associations also prepare scientific reports based on fisheries data. The Board of Fisheries is
often faced with deciding “whose science is accurate?” A professional, paid scientific staff is needed to
assist and advise the Board of Fisheries.
30 Day Public Comment on proposal regulation after Board of Fisheries meeting:
Under the existing process, the Board makes a decision and produces “intent language” during the
public hearing. Then, by some method (board member[s], ADF&G staff, interest group[s], public?), a
regulation appears sometime after the Board meeting that, in many instances, does not represent what
the public thought they heard at the Board of Fisheries meeting. This “behind closed door”
interpretation of “board intent” and “regulation crafting” needs to become more visible and accountable
to the public. Publish the exact regulation language for public review and comment for 30 days.
Merge the Divisions of Sport Fish and Commercial Fish and create a Division of Fisheries Research.
Too often the public is confused as by information presented by two different ADF&G divisions making
the “best case scientifically” for their “constituents.” A Division of Fisheries Management would focus
on just that – holistic fisheries management based on the most current biological information and the
Board of Fisheries allocation policies.
A Division of Fisheries Research could focus on research without being muddled by “sport fish
research” as opposed to “commercial fisheries research.” Salmon rear in the ocean and go through a
gauntlet of harvesters to the spawning grounds. There is no need for bureaucratic confusion (sport
versus commercial) in research. One Division of Research would also be more efficient and costeffective.
Do you support a task force created by the legislature to review the Alaska Board of Fish?
I support doing whatever it takes to implement the changes discussed above.
Seafood Commission
Should the State of Alaska develop an Alaska Seafood Commission to annually advise the legislature on
the needs of the seafood industry?
For salmon, anyway, the problem is price. I am not sure how a seafood commission could address that.
Economic Development
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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?
Do not allow processor quotas. Provide legal and financial means for local or regional organizations to
provide fisheries infrastructure (e.g., Anchorage has no public facility for offloading salmon from
tenders). Other needed infrastructure includes ice machines and cold storage.
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Name: Tim Keohane
Email: cohocoal@whidbey.net
Address: 35555 Spur Hwy #290 Soldotna Ak 99669
Phone: 907-394-1948
Fish_area: "H" Cook Inlet
Gear_type: Drift Gillnet
November 30, 2002
Quality
1. A) What does the Alaska salmon industry need to achieve a higher quality product?
A management scheme that directly targets quality in the harvest sector. An "IFQ" type season spread
out over several months (and runs) with trip limits will allow the industry to focus on Quality. The
Alaska fishermen/women are smart and innovative enough to achieve quality standards well beyond
what is presently in place. The marketplace can and will provide incentives. It is the Alaska's
responsibility to allow the atmosphere of "quality" to dictate harvest patterns
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?
I believe the marketplace should determine this issue. I agree that this is the correct procedure, however
too much gov't regulation can become a liability. In some instances, if innovative approaches to
management were implemented, I see myself at the dock with my fish in a "live tank" being
killed/processed under highly controlled conditions. Mandatory icing would inhibit this type of direction
for "quality" enhancement
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
Yes!!! I am loath to create another bureaucracy. However a State Seal, and quality standards would help
in the marketplace. We, Alaskan Fishermen/women, have a unique product. We can and should promote
ou Fish for that very uniqueness. The world consumer is becoming aware of the food they eat, and there
is a separation started that differentiates between healthy and inexpensive. There are plenty of
discriminate consumers that want "clean and healthy" food.
3. Should the state have a quality education program for industry participants?
Yes. As in all endeavors new and innovative ways are constantly popping up. Education is a lifelong
experience, and as an industry in Alaska we stopped in the early to mid 80's when it comes to quality.
Not only will we be providing a better product, we will also be able to market the "Quality Education"
programs to assure new consumers that we do indeed have the finest product available.
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
Money. I have carried ice for years, and recieved no compensation. I do it because I know my fish are
the best under the management policies, and I also know that the fish I take home, and give as gifts to
family members is the best from the get-go. The marketplace will provide the incentives (money) to all
fishermen/women within 1-2 years if allowed to move in that direction.
Marketing
1. Do we use existing state salmon promotional structures or do we change the structures? If changed,
what changes should be made?
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I was a supporter of ASMI, until the makeup of the board was composed of people with ties to farmed
fish....... We have an existing structure that is serviceable, but restrictions and guidelines need to be in
place to prevent future aberrations in the promotions. All promotions should be limited to fish that was
harvested in Alaska, not processed in Alaska, or by Alaskan companies, or companies with business in
Alaska. Harvested in Alaska is where my tax dollars should be limited.
2. Who or what entity or entities should be paying for the promotion and/or marketing of Alaska’s wild
salmon?
The present structure for funding is in place, and widely excepted. We should
refrain from shifting the funding liability. All budgets are tight, and the fishing industry is no exception.
In the future the burden may shift, but for the present we should maintain the status-quo.
3. Should the state help individual fishermen promote and market their wild salmon? If so, how?
Yes. Buy creating quality guidelines and promoting those guidelines, and establishing a "Wild Alaskan"
brand for all Alaska harvesters then individuals will have basis in the marketplace for their product.
Production
1. How can we remove or reduce costs from the harvesting sector in a way that allows regional selfdetermination?
By putting the management decisions back into the hands of the area managers we can begin. Buy
putting people on the Board of Fish that want to ensure resource health first, and industry/user health
second we can then allow each region to experiment and explore ways to reduce costs. Allow that most
fishermen/women are intelligent, and give them the room to make their particular business successful.
2. How can we remove or reduce costs and aid the processing sector?
I suspect that most processors have shaved costs as much as possible. I believe they would be better
suited if a greater value for the fish were created. Anti-dumping laws, or import tarrifs on farmed fish
would help in re-newing the value that is in our fish. I don't think that cost reduction is the only answer.
Increasing the value to realistic levels is another alternative.
3. In addition to the removal or reduction of costs, are there statutory/regulatory changes that can help
the harvesters and/or the processors?
By recognizing the true value in the wild salmon and promoting it back to that level the entire industry
can achieve profitability. Longer seasons with trip limitations will ensure harvester quality. A fixed cap
on fise into the plant will ensure no fish sit for extended periods prior to processing. Ensured quality to
the consumer will encourage the profitability. Cash flow and costs will change, but we (the industry) can
and should be flexible and innovative.
Finance
1. Are there better ways in which the state can use existing fishing industry taxes to assist the salmon
industry?
By providing financing/incentives for programs/ideas to maintain/enhance quality for
the harvester the initial product is better. When the fish dies the sooner the temperature is lowered the
better the quality. 32-33 degree fish delivered to the dock provides the best opportunity for the best
Quality.
2. Do current State of Alaska loan practices address the needs of the salmon industry? If not, what
changes would you suggest?
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It would be in the best interest of the state to maks sure all fishermen/women are sucessful. Lowered
interest rates, more flexible loan programs, flexibility in re-payment schedules are some thoughts. My
expierence is that the state has been hard ass on those that have the depth to pay and skipped out on
those that don't. That inequity created hardships and imbalance, and detracted from the ones that had a
chance for sucess.
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?
Only if the aim is to remove the fishery altogether. Then pay a lump sum to all equal to 12 times the 10
year average. The state should pay as they first created Limited entry and the concept of an on-going
business/industry. They then created loans and promoted stability, only to curtail access and sucess in
the Cook Inlet area. If the state wants the fishery terminated they should pay and it should hurt the state
financially.
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 guidelines and polices that hatcheries should be made to adhear to.
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?
By making the industry a profitable one the interest in fishing will re-surface. As it is noe there are few
if any new entrants into the salmon fisheries because there is no apparent future.
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 educational system can't overcome the public image of no future, and no "living". Untill that image
is changed there will be no need for education or research.
3. If you are displaced by changes in the salmon industry, what could the state do to provide retraining
and/or alternative employment?
Give me the opportunity to displace a state employee at a salary range commensorate to my best 10 of
20 years fishing past.
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?
If the BOF can be changed to promote the health of the resource, and not personal agendas the industry
could start to re-vitalize itself. Other agencies can and would be called upon to assist in increasing to net
value of the fish. I believe the channels and willingness exist, the BOF is the sour apple.
2. Do you support Alaska’s board of fish process? If changes are necessary, what would you suggest?
The blatent conflicts that exist on the board have got to go. The individuals chosen to sit on the board
must not have financial ties to the fisheries in any region.
3. Do you support a task force created by the legislature to review the Alaska Board of Fish?
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Yes. I am sceptical that it can happen without personal agendas being pushed.
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. It is shameful that the legislature is viewed as being un-interested in an industry that has been and
could be vital to all of Alaska.
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?
Viability of the individual harvesters, the communities they reside in and the maintenence of a viable
renewable resource
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Name: Charles Crapo
Email: dfcac@uaa.alaska.edu
Address: 118 Trident Way, Kodiak, AK 99615
Phone: 907-486-1515
November 30, 2002
Quality
1. A) What does the Alaska salmon industry need to achieve a higher quality product? Everyone in the
handling chain for Alaska salmon have to recognize their role in quality. One mis-step from fishermen
to consumer is enough to destroy the quality of the product and make the ultimate consumer unhappy.
That said, the first handler - the fishermen - need to practice what they know about handling fish.
Good handling practices, quick chilling and delivery will go a long way to improving the quality.
Processors also have a role to play in the quality issue. They must instruct and monitor their employees
on good handling. I see the use of fish pumps, while necessary for volume production, an inherent
quality compromiser. There are lots of ways to improve quality, but they all require some attention to
detail that has often been lacking.
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?
Its a good idea to make chilling mandatory, although difficult to achieve economically in certain areas of
the state. But chilling is the best thing that you can do for the initial quality of the product. The closer
to 32F you get the less the spoilage potential, easier handling cold fish.
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
I have always believed that quality standards should be between processor and buyer. For the most part
that has produced good quality salmon. State seals with ASMI have been unsuccessful over the long
term. Quality standards, as one size fits all, is very difficult to establish for all Alaska fisheries. If you
get a standard, it is usually so generic that it is of little use. The market place is where quality standards
should be set.
3. Should the state have a quality education program for industry participants?
I have been providing a salmon quality handling workshop through the University of Alaska Marine
Advisory Progam and the Alaska Seafood Marketing Institute since the mid 1990's. For the interested
processor, it has been useful to give a quick rules of handling that can be used by foremen and lead
people to reinforce good techniques. Every year I have presented anywhere from 15 to 25 workshops
right before the salmon processing season. All the processors I visit have requested this service. So in a
lot of cases I am reaching those processors concerned with quality. There remains a lot of people that
would probably benefit from some quality education. And in my estimation, the best way to deliver this
program is through presentations and one to one meetings. Using videos and CD's might work if the
processors and employees are motivated.
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
It would be great if there was additional money for better quality, but that is rarely the case. The state of
competition with farmed salmon and other foods requires high quality or your product does not
compete. I think the reality is that to maintain markets, quality must improve even though prices will
not substantially increase.
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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 University has the Marine Advisory Program (MAP) and the Fishery Industrial Technology
Center (FITC) that are providing programs for the Alaska salmon industry. MAP provides a lot of
training and hand on assistance to the industry. FITC has done many applied research projects for the
salmon industry. However, FITC has not widely publicized these efforts. The University is preparing
future fishery managers through the School of Fisheries and Ocean Sciences in Juneau. However, there
is probably much more the University could do.
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Name: Peter Knutson
Email: peterknutson@attbi.com
Address: 4602 SW Frontenac, Seattle, WA 98136
Phone: 206-937-1048
Fish_area: SE Alaska
Gear_type: Gillnet
November 30, 2002
Quality
1. A) What does the Alaska salmon industry need to achieve a higher quality product?
Higher prices. At the current very low ex-vessel prices there is little incentive for the fisher to expend
time and money. Prices for dressed, chilled coho were as low as 10 cents a pound in se alaska. You get
what you pay for. It is unrealistic to expect fishers to altruistically produce a beautiful product when
being paid cat food prices.
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?
In general it's a very good idea. However, if this becomes a state reg, then the state has an obligation to
require that ice be sold to all comers by major processors. Ice could not, in other words, be used as a
means to control fishermen. In the absence of that requirement, the state must insure that public ice is
available. However, i can imagine skiff fisheries where this may be impossible.
2. Should the state be involved in creating a quality standard, state quality seal, and a state quality
commission?
In theory it sounds good. In reality, good fish will sell itself if properly marketed.
3. Should the state have a quality education program for industry participants?
That's always a good idea. Somehow it needs to be linked to price incentives for fishers who meet
guidelines.
4. What incentives do you need to improve the quality of your harvested and/or processed salmon?
Since I direct market (since 1980) I have all the incentive I need. What we really need is basic
infrastructure which allows fishermen to move their own product across docks and which allows fishers
access to public ice/cold storage facilities.
We also need a direct road connection into Wrangell to give us better
access to markets, and hence more incentives to enhance our product.
Moreover, State programs which encourage small, value-added independent
, custom processors would be a great help. That way I can do more
value-added with my fish locally, instead of having it done at a remove
down South.
Marketing
1. Do we use existing state salmon promotional structures or do we change the structures? If changed,
what changes should be made?
ASMI needs be much more aggressive in clearly differentiating wild from farmed salmon. It hasn't done
this because some of its board is invested in the farmed salmon industry. The ASMI board should only
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be open to individuals who have no conflicts of interest vis a vis farmed salmon.
Actually, I think it would be a very good idea to create a Commodities Commission structure such as
exists in Washington State. For example, the Puget Sound Salmon Commission is funded by a selfimposed
tax upon the gillnet fleet. To be on the Commission Board one must be a licensed permit
holder. This requirement eliminates the conflict of interest which we see at ASMI. It also the local group
to spend the money best as it sees fit. It's a much tighter match with the needs of the fishermen.
2. Who or what entity or entities should be paying for the promotion and/or marketing of Alaska’s wild
salmon?
Fishers should pay for the promotion/marketing so long as they have control over the expenditures.
3. Should the state help individual fishermen promote and market their wild salmon? If so, how?
Most critically, the state should invest in basic infrastructure such as public over-dock access,
road connections, cold storage and ice.
Specifically, in terms of promotion/marketing, generic materials targeted to the emerging healthconscious
market would be helpful, if made easily available. Perhaps a state web site with connection to
individual fisher web sites.
Also, the state should be thinking about supporting/creating demonstration/sales sites in the lower 48
where fishers could directly auction and promote their product. I could see, for example, an Alaska/Port
of Seattle collaboration to create an auction house/sales/demonstration site at Fishermen's Terminal
(where several Alaskan fishers are already selling their product off the boat to consumers)
Production
1. How can we remove or reduce costs from the harvesting sector in a way that allows regional selfdetermination?
The problem lies not with costs in the harvesting sector. The problem is that the value of the fishery has
been siphoned away from fishers and their communities. The salmon resource, at retail, is as valuable
today as it ways 20 years ago. If fishers can again realize fair value for their product, harvesting costs
will fade away as an issue.
2. How can we remove or reduce costs and aid the processing sector?
As stated above, the state needs to aid the processing sector by encouraging the development of small,
independent businesses through construction of basic infrastructure. Free enterprise and competition is
good. It is not in the fishing community's interest to allow the current monopoly on salmon processing to
continue.
3. In addition to the removal or reduction of costs, are there statutory/regulatory changes that can help
the harvesters and/or the processors?
We must not go down the British Columbian road of fisheries management: massive fleet reductions,
direct ownership of fishing permits by corporations, centralization of harvesting opportunity in the hands
of a few corporate-controlled purse seiners, remendous reductions in employment, and permit stacking.
Such a program quickly leads to the introduction of salmon farming as the community seeks an
economic base with greater employment opportunities.
We must absolutely maintain the owner/operator provision. Legislated inefficiences such as a vessel
length limits need to be understood as social efficiencies which maintain equitable distribution of
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resource. They should also be maintained.
The Board of Fish proposal from Sitka which would permit purse seine permit holders to convert their
purse seine license to a gillnet license and then fish purse seine areas is very interesting. It would
maintain fishing families (many purse seine permit holders had no market last year), reduce total fishing
capacity and allow selective harvest. Fishers would would not otherwise have a market would be able to
fish, albeit at a reduced level.
This is a creative outside-the-box idea which would have the added benefit of eliminating much of the
overhead burden associated with a capital-intensive fishing operation such as purse seining. It would
reduce fleet capacity without requiring state funding.
Finance
1. Are there better ways in which the state can use existing fishing industry taxes to assist the salmon
industry?
Yes, require that a significant percentage of the fish taxes returned to local communities be reinvested in
infrastructure for the fishing industry.
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?
No. This question goes down the wrong path. Buy-backs do not reduce effort. We do not need to reduce
employment; we need to open up buying and marketing opportunities to return value to our
communities.
We have an incredibly valuable resource which could easily support the existing number of limited entry
permits if fair value was actually returned to harvesters.
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?
I don't see a pressing need for this.
Agency Oversight
2. Do you support Alaska’s board of fish process? If changes are necessary, what would you suggest?
It's a pretty good process, given some of the alternatives used in other Western states.
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?
We have a number of existing fishing organizations which can and should be doing this job.
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?: I've stated these above.
Infrastructure! Help independent fishers and companies move product to market.
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GULF OF ALASKA COASTAL COMMUNITIES COALITION (GOAC3)
P.O. Box 201236, Anchorage AK 99520
Phone: 907-561-7633 FAX: 907-561-7634
E-mail: goaccc@alaska.net
The Joint Legislative Salmon Industry Task Force
GOAC3 RESPONSE
November 20, 2002
Name: Gale K. Vick, Executive Director
Gulf of Alaska Coastal Community Coalition (GOAC3)
Email: goaccc.Alaska.net
Address: P.O. Box 201236, Anchorage, Alaska 99520
Phone: 907-561-7633
Web site: goac3.org
Fish Area: Gulf of Alaska
Gear Type: all types
The Gulf of Alaska Coastal Communities Coalition (GOAC3) is a non-profit organization dedicated to
the principle that Alaskan coastal communities should receive maximum benefit from sustainable
adjacent marine resources. We represent community organizations in the Gulf of Alaska.
The GOAC3 is obviously concerned about salmon policy. We are willing to assist in whatever capacity
we can to improve the net return for our communities.
______________________________________________________________________________
INTRODUCTION
Salmon is the lifeblood of Alaska coastal communities. Alaskans are the stewards of this
resource. It is this stewardship that has created a culture of salmon going back thousands
of years. However, we are in danger – as we were with company owned fish traps predating
Statehood – of selling out that culture to a process that may not understand the
cultural and economic value that salmon brings to our Alaskan coastal communities.
Salmon affects almost everything in coastal communities. Subsistence, commercial fishing,
processing, vendors, tourism, and related infrastructure all sustain our communities and
families.
The PRIMARY consideration we should be having in how we revitalize our salmon
industry is how any new structure will be impacting our salmon-dependent communities.
No one can emphasize enough what salmon means to coastal community residents.
Any discussion we have increasing “efficiencies” should always consider the question:
“WHO are we being efficient for?” If that answer is not Alaskan coastal communities and
their fleets, we are on the wrong trail.
Commercial fishing depends on the health of our salmon markets. We have neglected our
potential influence on those markets for so long we are now in crisis. Our answer is not
simplistic – it is obvious. Increase market value – like everyone else must do in order to
stay in business. We have the best product in the world. Let’s treat it that way.
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Increasing market value isn’t our only goal. Making sure we benefit from that increase
is the other. If we “save the industry” but kill off our coastal communities in the process,
we have not saved anything. 1 Saving the industry, saving our coastal communities and
increasing market value are not mutually exclusive concepts. We can, and should, be
doing all three simultaneously. What’s good for our coastal communities is also good for
the state of Alaska. To keep us focused on the right things:
We should consistently utilize the “Four Way Test for Salmon Policy”
Does it promote sustainability of the resources?
Does it serve Alaskans and Alaskan communities?
Does it provide the maximum opportunity to the independent entrepreneur and does it encourage new
product form and market development?
Does it provide opportunities for future generations of Alaskans?
The State of Alaska’s Mission Statement regarding salmon policy should reflect its commitment to
Alaskan salmon-dependent communities and recognize the need to keep those communities healthy in
order to also keep the rest of the state healthy.
The Governor’s office should have a strong Fish Advisor position that has the ability to coordinate all
state agencies, work with the Legislature, work with fishing communities and fishing associations,
processors and marketing groups toward increasing the market value (and thus ex-vessel value) of our
salmon and the long-term benefit to Alaskan salmon-dependent communities.
The State of Alaska should develop an overall plan for transportation and other infrastructure that will
encourage and assist new processing and marketing efforts
The State of Alaska should also develop an over-all plan for better cooperation among salmon users,
including subsistence, sports, tourism and commercial
Let us not treat each other with disrespect. The decisions we make now are going to
shape the future of our communities. Let us act like we think Alaskan fisheries dependent
communities are important.
1 To borrow a phrase from Arne Fulgvog, Petersburg
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RESPONSE: Gale K. Vick & Dick Lowell, F/V Silverload
November 27, 2002
Name: Gale K. Vick, harvester and
Executive Director, Gulf of Alaska Coastal Communities Coalition2
Email: gkvsons@alaska.net
Address: P.O. Box 220221, Anchorage, AK 99522
Phone: 907-248-4264
Name: Richard L. Lowell, harvester and President, Ribelin Lowell and Company
Email: r.lowell@ribelinlowell.com
Address: 3111 C Street, Anchorage, AK 99503
Phone: 907-561-1250
Fish Area: Prince William Sound / Area E
Gear Type: F/V Silverload - drift net / bowpicker
________________________________________________________________________
INTRODUCTION:
There is no question that our entire salmon industry needs to be turned upside down in order to survive
but that we will survive. However, in order to do this, the most important question we should be asking
ourselves: Do all our policy decisions reflect our intent to stabilize our coastal community economics
and stabilize a sustainable industry? Remember – what is good for our communities is also good for
Alaska. Conversely, what devastates our communities devastates Alaska. Our strongly held belief: Use
this “four way test” for our new salmon policy:
FOUR WAY TEST FOR NEW SALMON POLICY
1. DOES IT PROMOTE SUSTAINABILITY OF THE RESOURCE?
Kissing the fish at the beginning of each new season is not a quaint custom. It is the way we
recognize that the return of the fish is a gift. We don’t own this resource. We are borrowing it.
We are stewards of it. Our objective should be to share this gift among the maximum number of
Alaskans.
2. DOES IT SERVE ALASKANS AND ALASKAN COMMUNITIES?
We need to narrowly define our objectives. Too much talk about “efficiency” diverts our
attention from the real need – increasing value. The discussion of “efficiencies” never connotes
who we are truly being “efficient” for. If we are not being “efficient” for Alaskans – don’t go
there. Social engineering, quality product and markets and higher prices are not mutually
exclusive concepts.
a. Let us increase value instead of reducing capital!
b. Let us keep our salmon boats (gear regulations) small.
Increased boat sizes / costs increases the stress level and the need to consolidate gear –
which is where we are now. Our small boats (limit seiners on down) are already more
“efficient” than they have ever been. What they need is increased value through
increased ex-vessel prices. If we increase boat size, we will price the small harvester out
of the market entirely.
2 These are my personal comments as a harvester; full Coalition comments follows.
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c. Eliminate the discussions of fish farms and fish traps now and forever
They are not in the best interests of the resource, of markets, of Alaskans, Alaskan
communities and the State of Alaska.
3. DOES IT PROVIDE THE MAXIMUM OPPORTUNITY TO THE INDEPENDENT
ENTREPRENEUR AND DOES IT ENCOURAGE NEW PRODUCT FORM AND
MARKET DEVELOPMENT?
a. Does it allow or prevent new entries into harvesting, processing, marketing?
b. Does it encourage economic support to innovative new processing?
c. Does it provide opportunity for increased transportation support?
d. Does it make every possible effort to support the small entrepreneur who wants to create
a better product and better market
4. DOES IT PROVIDE OPPORTUNITIES FOR FUTURE GENERATIONS OF
ALASKANS?
a. Does in significantly increase or decrease the future opportunities for Alaskan
participation in buying permits, being their own processor and marketer, etc.
b. Does it reflect the increased / decreased infrastructure that exists in smaller coastal
communities especially and the subsequent socio-economic impacts
c. Does it reflect Alaska’s philosophy in keeping our future generations in Alaska while
offering them new and innovative and challenging opportunities at all levels?
i. OR: does it systemically eliminate future generations by consolidating too much
effort and sending too much raw product at too cheap a price Outside of Alaska?
QUALITY SUBCOMMITTEE
1. What does the Alaska salmon industry need to achieve a higher quality product?
A. Manage for quality: ADF&G
a. Alaska Department of Fish and Game has heard countless times from harvesters that
they often wait too long on an opener to allow for the harvesting of “bright” fish.
ADF&G manages by weir count for each opener. The suggestion is to allow for
earlier harvesting in an opener – based on educated presumption - on the premise that
the weir count before the next opener will meet their target. This is especially
important for sockeye going into short stream runs and /or hatchery fish. If ADF&G
waits too long, the fish turn black and serve no good purpose for anyone, except,
perhaps, processors looking for cheap chum to reduce the cost of roe.
B. Inquire into current processing practices related to quality control and assurance
a. Do processors maximize their opportunities and responsibility for producing a higher
quality product?
b. Do processors provide appropriate infrastructure for transferring a quality product
from harvesters?
c. Are there market incentives for processors in increasing their quality production?
d. What are the disincentives to processors for increasing quality production?
e. If processors are able to get a better wholesale price for a better quality fish will they
pass along some of those revenues to the harvesters?
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C. Work out transportation systems that encourage the transport of quality product at an
affordable rate.
D. Create a quality control component to an on-going “Salmon Think Tank”
E. Provide independent processing education, support and incentives through
a. Promotion of our existing programs – many of which are excellent
b. Comprehensive information package and connections to other education and training
institutions in Alaska and around the country
c. Seminars
d. Web site and linkages
e. research
2. Should the state be involved in creating a quality standard, state quality seal, and a state
quality commission?
a. Quality standard – YES
b. Quality Commission – possibly – needs a lot of discussion. We do NOT need more
governance on this. Incorporate through ADF&G if necessary in conjunction with ASMI.
c. Quality seal – NO
Point: Stamps of approval are only as good as the way they are perceived in a specific
market. A private non-profit currently offers seals of approval for organizations that meet
their standards for quality production. But that same organization also supplies seals of
approval to farm-fished operations, since the standards apply to production environment
and not necessarily to finished product or original product form. A wild stock Alaskan
processor would then find themselves in the same “approval” category as a farm
operation.
In Norway and Scotland different associations represent different groups of salmon
farms. The in-country markets have gotten to be quite discerning so that a certain label
from one association might be able to claim a much higher market value than those of
another association. The point? It might be far more important for Alaskan salmon to
simply have a “country of origin and state of origin label that identifies it as verified
Alaskan wild stock.
3. Should the state have a quality education program for industry participants? Yes.
a. Encourage policy development between fish managers, harvesters and processors at all
levels
b. Create web links to all QC information
c. Provide laminated cards for basics for all harvesters, and others, including info on
HAACP training, etc.,
d. Enhance existing programs, such as DEC’s “Seafood Processing and Development” and
provide links to the Sea Grant programs, and others
e. Provide an “All things salmon” link page, include every possible connection –
government, NGO, markets, etc., especially links to educational institutions regarding
processing, marketing and distribution
4.What incentives do you need to improve the quality of your harvested and/or processed salmon?
a. Significantly better ex-vessel price per pound **
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b. incentives (tax, subsidized loans) for on-board RSW
c. continually available tender/buyer on grounds
d. continual education
e. knowing that fish will be treated as quality on tender
f. ADF&G cooperation on openers – re: See “manage for quality”
g. Let harvesters have a percentage of roe 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)
We need to market Alaskan wild stock salmon only and to do things we have never done to educate the
world markets. ASMI is our only available marketing tool and it is been grossly underutilized. We
recommend keeping ASMI with the following changes:
1. Market Alaska wild stock ONLY
a. Have a specific policy @ AMSI to promote Alaskan wild stock salmon and not a
“generic” marketing. We’ve tried this approach and we spent a lot of Alaskan
fishermen’s money to help increase domestic salmon consumption but decrease Alaska
market share
b. Create a division of ASMI that tracks informational resources for consumers on wild
stock vs. farmed stock
c. Create “salmon” snobs in domestic and world markets. The success of the Copper River
Sockeye marketing effort should teach us a lot:
i. People want a better quality fish
ii. People are willing to pay for a better quality fish
iii. Marketing works
iv. Transportation is key
d. Promote Alaskan wild stock as a sustainable resource
e. Coordinate with private marketers in the promotion of wild stock and try to ensure that
everyone has their facts correct
i. Have a guideline fact sheet for the industry
2. Educate the general public:
a. Have a comprehensive fact sheet about Alaskan wild stock which can be distributed to
markets, tourists, family, schools, etc.
i. educate people to equate “Alaskan wild stock” with healthy fish and healthy
stocks – that our fish on markets are not endangered!
ii. work toward a “state of origin” labeling which lets people know what to look for
in both sustainability and health benefits
iii. work in the schools!
b. Provide continual information on separate web site. Educate people on different species.
Connect information resources for people – re: web connects and other informational
resources
c. Do a “wild thing” booth at trade shows
d. Promote continual market research
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e. Educate Alaskans to be good ambassadors of Alaskan wild stock , as well as different
species and product forms, so they can educate people in their contacts
f. Promote Alaskan salmon fishermen so people know these are individuals, fishing
families, small coastal community folks. And, even though not all salmon fishermen are
Alaskans,, they may have been once or be generational – the point being that the fish is
still caught within Alaskan waters and that all the fishermen are “owner on board”, small
boat fleet
g. Provide for public feedback. An inter-active web site is a perfect way to hear what
people are saying about Alaskan wild salmon. Create chat rooms. Provide for other
opportunities for people to send in their comments.
i. Work with informational services around the world
ii. Show health benefits of wild vs. farmed
3. Join the politics going on around the world. Fish farm issues in other countries (as well
as our own) deserve our attention. These days, a lot is happening every day. The market
predictions we have can very well be contingent on the world’s reaction to the growing
finfish farm problems.
a. Have a resource listing – via web site – continually updated – so that people can do their
own research about what is happening the farm vs. wild markets and politics.
b. Know the facts about lack of trace chemicals and minerals in Alaskan wild stock – do we
track this well enough?
4. Split processor seats on ASMI board into the following:
a. 50% traditional processors
b. 50% “independent” processors, including harvesters who have done a lot of innovative
processing and marketing and
c. continual dialogue between processors and harvesters (as much as allowed by anti-trust
laws)
d. have full disclosure- with the intent to reflect possible conflict of interest - on all
processor activities or connections in
i. Alaska
ii. Continental U.S.
iii. International
5. Increase harvester participation on the board – specifically by region
a. create a mechanism for harvesters to report conditions on the grounds as they occur
i. Ask the Gulf of Alaska Coastal Communities Coalition about their proposed
ACCOS (Alaska Coastal Communities Observer System) project
ii. More education to our harvesters about markets
iii. Provide more information to fishermen about where their product goes!
6. Increase funding to ASMI
a. Other countries around the world have seafood marketing programs that far exceed ours
and yet we have not only the premium product but the largest biomass of wild stock.
This basically comes down to us being outgunned by finfish-farming nations. The only
reason this makes any since whatsoever is because our marketing effort still seems to be
dominated by processors who have finfish farm investments elsewhere. We need to
change this practice, obviously, before we get more serious about the amount of money
we put into ASMI.
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b. Processors currently only contribute 0.3% tax to ASMI vs. the harvester 1.0%, although
their total dollar contribution is higher. Is there room for any additional processor
contributions here? The harvester dollar contribution will obviously be higher as the exvessel
price increases, so the objective is to increase the ex-vessel price by encouraging
better market conditions.
c. Harvesters in a given hatchery district contribute 2% of their ex-vessel ticket price to
their hatchery area. This relates to the discussion of hatcheries (a difficult one to be sure)
and the “what if” some of the hatcheries are discontinued.
d. Matching funds by the state legislature and the feds are always a big issue – what is really
going on here and how can we get the matching funds we need to get the bigger dollars?
7. Create a “product forum” that has processors, especially the independents and harvesters
doing their own, talking with ASMI on their product forms and how ASMI might help
promote these – given legal and proprietary constraints.
a. If we are going to keep ASI around – for heaven’s sake – get ASMI talking with them on
a regular basis! It is ridiculous to have two state-financed institutions who do not work
with each other.
8. Continue the ASMI “fishermen in stores” program – not only is it good marketing but it
is a terrific educational tools for harvesters on what the markets want and need
9. Vigorously market Alaskan wild stock canned salmon in Alaska and other places
10. Get serious about offering incentives, alternatives, sanctions, whatever, to in-state
retailers (Costco, Fred Meyers, Safeway, et.al.) to sell ONLY Alaska wild stock in Alaska.
Why aren’t stores selling “fresh frozen” Alaskan salmon during the off-season? Same for
restaurants. What kind of message are we sending Alaskans and visitors and tourists when
our markets are flooded with Chilean and other farmed salmon?
11. Have a ‘state of origin” labeling similar to “country of origin” for product being sold /
imported into Alaska and exported out of Alaska. A label like this will alert everyone – an
“Alaskan origin label means wild stock only with no ambuguity.”
12. Do more investigation on how we can re-process frozen pinks and chum in Alaska and be
competitive on the canned markets rather than have our fish flown somewhere else and reprocessed
because of much cheaper labor. This situation may be one or convenience to
foreign-owned processors rather than an argument against our own labor costs.
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 currently contribute 1% of their fish ticket price toward state marketing efforts
a. Make certain these are DEDICATED monies to ASMI
b. Have processors contribute an additional 1% from their gross revenue (an increase over their
current contribution)
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c. Make sure we don’t miss out on federal matching fund options - meaning the state has to
contribute their share
d. Show a comparison (annually) of ASMI’s budget compared to other country / state fish
marketing budgets and some comparison of results – where possible
3. Should the state help individual fishermen promote and market their wild salmon? Absolutely.
If enterprising harvesters are going to make any money at all, they cannot rely on the current or expected
ex-vessel prices in the traditional processing markets to survive. Therefore, if the State of Alaska cares
for its fishermen and fishing communities, it will see the investment of education and support
infrastructure for harvesting, quality control, processing and marketing and distribution for its coastal
community residents as a top priority.
1. Through grants or subsidized loans
2. Definitely through education. Provide as much assistance as possible with sound business
development, through seminars and educational links
3. Through transportation infrastructure
4. Through connections / subscriber service
5. Through processing and marketing support mechanisms and seminars
6. Through flexible permitting transfers within families
7. Through incentives for Alaska residents that does not violate constitutional laws – the
objective being to keep as much of the fishing effort in our coastal communities as
possible
8. Assistance with education related to marketing co-ops
PRODUCTION SUBCOMMITTEE
1. How can we add value to increase both our ex-vessel and processed product return?
Look at the markets. Then look at our primary processing. Then look at the incentives /disincentives
that our primary processing has for making changes. Then look at the opportunity to assist
independent processing efforts to increase market share through specific product form. Then look at
our world competition. Then look at the shifting world perceptions of farmed-fish products.
Chile has just announced the opening of a state-of-the-art smoked salmon processing plant. They
expect this plant to employ 400 people and increase raw product value by 42% on an initial
production of 1500 tons. While this could glut the smoked salmon market with a potentially cheaper
product (Chilean labor costs are very low) it could also increase the world taste for smoked salmon,
providing us with the same opportunity we have for fresh/frozen market competition: we are wild
stock, they are not.
The European smoked market is having a tough time these days because of burgeoning reaction to
farmed-fish product. Is this an opportunity for us? No question. We did not climb on the finfish
farm band wagon years go for all the right reasons, but we can certainly capitalize on the public’s
increasing reaction to not want farmed product.
We have many small processors (and some large) who produce a multitude of added-value product,
such as smoked and pickled salmon. We need to support them in their marketing efforts while at the
same time support new product from new independents. If we dramatically increase our market
share in high-end product, the concept is that we will dramatically increase our ex-vessel price to
fishermen.
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The one thing that forecasters have been consistently telling us – the world’s need for fish protein is
increasing all the time. How we supply that protein in a sustainable manner is a legitimate argument
for us to pursue. If Norway, Ireland, Scotland, Canada and Chile are planning to increase their
production of farmed salmon (and halibut and cod) during a time when they are losing money, what
do they know that we don’t know about future market potential? And, if they plan to sell cheap
farmed protein to the hungry world, what significance does this have for Alaska to create world class
recognition for high-end wild stock for kings, reds and silvers? And what impacts will the increasing
anti-farmed fish efforts have on our markets?? How can we capitalize on this?
At the Tskiji Ichiba in Tokyo, the value-added product forms for each species is mind-boggling. Not
only are there product forms that a person would normally never imagine (flattened dried squid) but
the presentation and packing of these products is visually stunning, which makes the retail prices
also visually stunning. The moral – our raw product goes to Japan at an ex-vessel price that is totally
inadequate and is transformed – in a sterile environment - into an edible work of art that is
subsequently wholesaled and retailed at prices that take our breath away.
It is worth it to us to know what our markets want and in what form, but maybe more important, it is
incumbent on us to educate our markets
It is also worth it for us to know (a) how a product is going to get to the designated market (is it
going to be direct or waylaid through vendors that could alter the product form or quality?) (b) how
the product is going to be handled, (c) how the product is perceived.
There is a direct line to be followed from quality control @ harvesting level to QC @ processing
level to market distribution to retail value. From the beginning - ADF&G working with harvestors
for optimal harvest level –to new market initiatives and support for our independent processors to
getting ASMI to market wild stock to actually getting our product to market. If we zig-zag too
much, as we always do, we will never gain real value.
2. How can we remove or reduce costs from the harvesting sector in a way that allows
regional self-determination?
a. Analyze / increase transportation infrastructure
b. Create support for a “two-tier” processing effort
i. Traditional
ii. Independent, new and creative
3. How can we keep our salmon production from actually hurting us?
Example: A current discussion centers around selling Alaskan pinks as feed to the growing fish farm
need for protein as a good solution for both groups. In this scenario, hatchery-raised (subsidized by
Alaska fishermen) Alaskan pink salmon that sell at an extraordinarily cheap ex-vessel price could
wind up growing competitors for silver and red salmon wild stock.. In addition, this pink-fed farmed
salmon might actually claim a higher percentage of Omega-3 oils than it would normally have
because it is being fed Alaskan wild pinks.
4. Why does the issue of “finfish farming” in Alaska keep cropping up?
There are, perhaps, hundreds of reasons not to engage in the discussion of finfish farming in Alaska.
Not the least, of course, is our constitutional ban. The law aside, even if we could overcome some of
the immediate-vicinity environmental problems that plague places like British Columbia, or the
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basic health problems, or escapement, or the cost of production problems, adding to the world glut of
cheap salmon, we would still have a long list of other essential problems, including the most
important – the competition and threats to our Alaskan wild stock.
Our wild stock is simply a superior quality product and probably will remain so as long as we
improve our quality control. We also probably have the ONLY remaining viable wild stock of
Pacific salmon in the world. So, why, even under optimal conditions, would Alaska want to have
finfish farms? Because some people think we could then have better market share of the “fresh”
market? Doubtful. We would still be competing against cheaper product from other places with
fewer cheap transportation problems. If we can’t figure out how to get our wild stock to market at a
decent price, how could we possibly do this with a cheaper product?
Instead, we should be:
(1) educating the domestic and international public on health benefits of wild stock
(2) improving our product-form on a regular basis to fit world needs
(3) educating public on benefits of fresh-frozen sockeye, coho and /or king salmon
(4) improving our quality products and product form on chum salmon
(5) solving our transportation problems
FINANCE SUBCOMMITTEE
1. Are there better ways in which the state can use existing fishing industry taxes to assist the
salmon industry? YES. See “Marketing”
2. Do current State of Alaska loan practices address the needs of the salmon industry? If not, what
changes would you suggest? Not completely– and this issue deserves a lot of discussion from people
who have new loans as well as old loans. We do not, so it would be unfair to 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?
NO. We fish Prince William Sound (Area E.) There are 500 driftnet permits in Area E, probably
at least 400 operating in the season. Of those, there are probably a few, such as ourselves, who
fish the “Old Man’s Fishery,” meaning the Western side of the Sound and not the Flats. So,
essentially, we do not significantly impact the take but it provides us a way to pay expenses and
make some money for future investment. What this means to the industry is that we are one
notch above a latent permit, the intent being that at some point, when the prices come back up,
one of our grandchildren might take over and be able to make a decent living at it- as was once
the case - utilizing a somewhat larger boat (still limited to 32’ for bowpicker but utilizing the
same amount of gear – 3 shakles or 900’) and perhaps multiple permits and definitely RSW.
This is the hope of many who have latent permits or / are minimal harvesters because they might
also have a number of varied permits which then, combined, become a sustainable living. In this
case, even the limited use of a driftnet permit becomes even more important as it is an intregal
part of the overall plan.
The multi-permit, multi-use concept is probably more indicative of small Alaska coastal
community need. It is such a critical need that any discussion we have of buy-backs or
consolidations of any kind should thoroughly analyze the impact on combination users. What
this really means is being aware of what we do with latent permits or what we perceive as “extra
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capital.” I.e. If we retire a permit from someone who wants to get out of the business but thus
take it off the market for someone who wants to add it to a multi-fishery venture, or simply get
into the market during a time they can afford it - we may be artificially raising the cost of the
remaining permits which creates an additional financial burden for small boat fishermen that
cannot be recovered on the existing market. This can then have a spiral-down effect that
exacerbates the small coastal community economic plight.
We all want value for our permits but we already have value based on the market. As we
increase the ex-vessel prices (another point here for re-focusing our effort) those values will
naturally go up.
Bristol Bay may be the exception. The Bay seems to be overcapitalized even under optimal
conditions. Our suggestion: buy permits as they come on the market up to X % of total, retire
them permanently (or consider a long-term re-release) and then leave the rest alone for a free
market system. If we get hung up on buy-backs, too many of our folks will not be able to enter
or re-enter the fisheries and we will be forced into unwarranted defacto situations, such as
justification for further consolidation, corporate ownership, and those bugaboo discussion on
fish traps, etc.
We, personally, do not believe in buy-outs, only buy-backs, and those with extreme caution. We
think most of us entered the fish business knowing it was risky and there were no guarantees. If
we want to sell our permit and the State wants to buy on the open market to temporarily retire
the permit (up to a very limited number) that seems to be the most equitable way to approach
this. Otherwise, with a buy-out, there are too many factors which can not only be enormously
expensive, but might also encourage people to sell when they are really looking for a way to
hang on to the permit for future use.
Thus, the concept of having a “latent permit banking system” where latent permits are
specifically kept out of the fishery on an alternating schedule – might be something to consider.
Here again, we do not want to take so many permits permanently off the market that we have
created such a closed class of permit-holders that we have seriously unintended consequences.
As an alternative to buy-outs – consider a system which allows a seller who has a large mortgage
on his/her boat to sell a particular size boat – a 32 x 14’ sternpicker for example - for a smaller
boat with the same amount of gear but reduced carrying capacity, with the state paying the
difference in price between the two boats and/or mortgage as a sort of transfer of loan with a
forgiveness amount. What this does is reduce the operating cost to the harvester, allowing
him/her to stay in business, but simultaneously reducing the fishing effort which acts as a sort of
permit reduction. This also could increase quality potential, which, hopefully, would bring the
vessel owner a higher ex-vessel price. The larger vessel could then be sold to another fishery or
buyer at fair market value but, in the event that there are no buyers, the state could assume the
cost of storing or scrapping the vessel.
Where should the money come from? Buy-back dollars should NOT come from other fishermen.
No matter what the formula, this negates the intent of the program, which is to bring more value to
fishermen by either reducing the effort in order to increase quality control (for higher ex-vessel
price) or increase potential fishing opportunity. This leaves only government
Which gets us right back to where we started. Why are we even thinking about buy-backs?
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GOVERNANCE SUBCOMMITTEE
Hatcheries
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?
This is a huge issue with many regional implications and complications and is really
deserving of a stand alone discussion. Most of us have problems with (a) production of pinks
(no value), (b) cost recovery of chum up to 60% or more of the TAC, (c) declining benefit to
harvesters who still must pay 2% of their fish ticket
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? A BIG role. K-12
schools should have mandatory salmon components in their science curriculum. Alaskan kids
should be learning about their state’s natural resources period. They should be so knowledgeable that
it enables them – by high school – to make informed consumer decisions and informed career
decisions.
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
sure. Worthy of more discussion.
5. If you are displaced by changes in the salmon industry, what could the state do to provide
retraining and/or alternative employment?
We don’t want (nor expect) “displacement.” We want good ex-vessel price. We really need to
focus on the right thing here. It is too easy to use this a subterfuge for fixing the real problems.
People really want to stay in the business.
If there is to be any “training” it should be
a. for harvesters to be their own buyers, processors and marketers or ways to develop
processing / marketing co-ops (based on private ownership.)
b. related fields – such as providing additional marketing jobs and training
c. training for marine-related tourism
d. help with developing business plans and making good long-term financial decisions
or running marine-related businesses
e. mentoring programs
f. training and education on quality control, HAACP and international requirements
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?
Probably, but not sure about detail yet.
2. Do you support Alaska’s board of fish process? If changes are necessary, what would
you suggest? Absolutely. Don’t mess with this process – it is the best in the world for all its
faults. Consider, however,
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a. Increasing size of board from 7 to 15 members with appropriate regional
considerations
b. Have full disclosure on potential conflicts of interest – and have guidelines as to when
a Board member should vote or abstain
c. Increased support to the Advisory Committees
d. “issues” papers with each proposal – i.e, more dialogue and research on consequences
of proposals outside of the BOF arena
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?
Yes... but this could be an outgrowth of all our other processes – not a stand-alone committee. I.e.,
this could be a part of the new “fish advisor” position in the Governor’s office.
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?
a. Complete focus on how all policies are affecting Alaska’s coastal communities and
finding ways to support their economies rather than continually supporting
“independent” pieces of legislation that could have an accumulative adverse affect.
b. Invest in some good socio-economic research – most of our s/e research is outdated or
garbage
c. Find out where the effort is going – to large Outside/out of country interests or to
Alaskans?
d. Listen to those communities – they will come up with good ideas
e. Help with undue impacts of national environmental initiatives
CLOSING: When we instituted the limited entry system for salmon in the ‘70’s, we designed it to
help the maximum number of Alaskans. It still hurt some people along the way but hopefully those
lessons have taught us what not to repeat. What we should definitely not repeat is a defacto (or
otherwise) return to the pre-Statehood days when Seattle owned our fisheries.
1. Utilize the “Four Way Test for Salmon Policy”
a. Does it promote sustainability of the resources?
b. Does it serve Alaskans and Alaskan communities?
c. Does it provide the maximum opportunity to the independent entrepreneur and does it
encourage new product form and market development?
d. Does it provide opportunities for future generations of Alaskans?
2. Develop a mission statement at the state level that puts the economic health of Alaskan
communities first and provide for the appropriate mechanisms to ensure that this happens
3. Consider “efficiency” a four-letter word until we have clearly defined what we mean and for
whom. Ditto for fish traps and finfish farming under any circumstances. These words should
have signs that read “ Do NOT enter.”
4. Create a “Salmon Think Tank” that interacts through a web site, gets every one talking to
each other, seeks public feedback
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5. Have “fish summits” twice a year
6. Dramatically improve quality and quality incentives at all levels
7. Dramatically improve our marketing of “Alaska wild stock”
8. Don’t reduce capital – increase quality and marketing
9. Create a “State of Origin” labeling to identify Alaskan stock as wild and sustainable
10. Utilize and enhance existing programs for education, research and marketing – we have a
wealth of resources that many people do not know about
11. Utilize our coastal community networks and fishing associations
a. Utilize resources such as the “Alaska Report”
12. Have a strong support system within our state government!!!!
We have the best RAW fish product in the world. Let’s act like it. Let’s also act like WE care about each
other as Alaskans, care about our future generations, care about our communities.