Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Salmon Task Force Proposals
From the Public
As of September 17, 2002
Table of Contents
1. Finance
a. Division of Investments Permit Debt (Jerry McCune) .........................................3
b. Division of Investments Hatchery Debt (Jerry McCune) .....................................4
c. Hatchery cost recovery and debt paydown (Robert B. Moss)...............................5
d. On salmon price supports (Buck Laukitis) ............................................................6
2. Governance
a. Singular Mission Statement for ADF&G (Sue Aspelund) ....................................7
b. Labor issues that keep our industry from being competitive (Duff Mitchell).......8
c. The high cost of transportation of moving product from Alaska (Duff Mitchell) 9
d. Representation (Mitchell Seybert).......................................................................10
e. Not enough plain old fishers on your committees (Mitchell Seybert) ................11
f. Alaska Seafood Commission (Tom Gemmell)....................................................12-13
g. Income taxing fishermen and then not providing required services for the industry (Duff
Mitchell)..............................................................................................................14-16
3. Marketing
a. Funding for Export Marketing/Bristol Bay regional problems (Mitchell Seybert)17
b. Our marketing strategy hasn’t worked (Buck Laukitis) ......................................18
c. Establish an Alaskan “Salmon Technical Support Group (STSG)” (Gail A Marshall,
PhD) ...................................................................................................................19-21
d. Establish and Fund the Alaska Seafood Promotion Foundation (Bruce Schactler)
.............................................................................................................................22-23
e. Alaskanization of ASMI voting Board of Directors (Duff Mitchell)..................24
f. Simplifying Regulations Pertaining to Fisherman Direct Marketing (Erin Harrington)
.............................................................................................................................25-26
g. In State Marketing Program (Duff Mitchell).......................................................27-28
h. Proposal for a new Alaskan salmon marketing organization devoted solely to
differentiating wild salmon from farmed salmon (Robert Lebovic) ...................29-31
4. Production
a. Restrictions on Permit Holders (Ted and Kathy Whip) ......................................32
b. Bristol Bay fishery: keeping young Alaskans in the fishery (Judy Burtner)......33
c. Sink or Swim (Dean Anderson)..........................................................................34-39
d. On fleet reduction (Buck Laukitis)......................................................................40
e. On Efficiency (Buck Laukitis) ............................................................................41
f. Permit Retirement Proposal (Roger Bergquist) ..................................................42-43
g. CFEC -Optimum Number/Buyback (Jason Miller) ...........................................44
h. Alaska Wanton Waste laws and processor dumping (Duff Mitchell) .................45
i. Hatchery Price Setting at the detriment of dock prices and relationships with fishermen
(Duff Mitchell) ....................................................................................................46-47
j. Bristol Bay drift permit holders support a buyback (David Harsila) .................48-52
k. Legalization of salmon traps (Jason Pryor)........................................................53
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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l. Permit Stacking in Bristol Bay (Chris White).....................................................54
m. Discarding Salmon Carcasses (Bruce Schactler)................................................55
n. On Production (Buck Laukitis)............................................................................56
5. Quality
a. Expansion of high grade and custom salmon products (Mark Vinsel) ...............57
b. Bristol Bay Quality (Mitchell Seybert) ...............................................................58
c. On Quality (Buck Laukitis) .................................................................................59
6. Miscellaneous
a. Attempting the Salmon Turnaround (Kate Troll) .............................................60-75
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Finance
Title: Division of Investments (Permit Debt)
Problem: Many Alaskan residents can’t make their loan payments. Many will never be able to pay off
their debt, at current salmon prices. The problems are created by low salmon returns, markets, and flat
price.
Discussion: Division of Investments are saying this will be a "make it or break it year" for many with
state loans. It will be sad to loose resident fishermen and have boats and permits sold at low prices.
These residents will be saddled with all the debt for the rest of their lives. Permits and boats will be sold
for pennies on the dollar. This is going to be a huge problem this year.
Recommendations: As a form of fleet reduction, forgive permit debt and the permit goes away. Or if
they pay one interest payment the permit goes away. We need to think of a way to keep residents in the
game until we can get the fisheries turned around. Some people just want out and start something new,
but they can’t with the huge debt over their heads. If a permit was bought at $150,000 and is worth
$17,000 now what is the point. Division of Investments will sell the permit for hardly nothing and the
resident is in debt forever in some cases. Most likely the Division of Investments will never recoup all
the debt from many borrowers that are having problems. Every case is different. This is just one of many
scenarios that could be looked at by the Committee.
Name: Jerry McCune
Email: ufa2@ufa-fish.org
Address: Box 372, Cordova, AK 99574
Phone: (907) 424-7488
Fishery/Area: Area E Salmon Drift Gillnet
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Finance
Title: Division of Investments (Hatchery Debt)
Problem: The Hatcheries are suffering from the same problems as fishermen. Low price which causes
them to take more fish for cost recovery to make their payments. This is a catch 22 for the Fishermen,
Hatcheries, and the Communities.
Discussion: The Hatcheries have contributed to the economic stability of many communities in the
State. Hatcheries contribute to communities, sport fishermen, and subsistence users. They also provide
jobs for many people. We need to think this through and come up with some creative ideas.
Recommendations:
1. Forgive debt to jump start the fisheries.
2. Lower interest rates more than the Legislature did.
3. Prince William Sound Aquaculture Corporation has their Exxon claim already sign of to
Division of Investment.
4. No interest until we can get pink salmon prices back up.
Name: Jerry McCune
Address: PO Box 372 Cordova AK 99574
Phone: (907) 424-3447
Fishery/Area: Area E Salmon Fishery
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Finance
Title: Hatchery cost recovery and debt paydown.
Problem: Cost recovery bidding for hatchery fish takes place early in the year effectively setting the base
line price for the product, the fish.
Discussion: The bid process, early in the season effectively sets the price for the entire industry from the
fishers to the brokers long before the fishing season. Precluding taking changing market conditions into
consideration. In addition any price negations with the processors by the fishers and any price
negotiations with brokers or anyone buying from the processors is severely constrained. The fact that a
price is already in place for a very significant percentage of the states production prior to the season and
a guaranteed quantity in place for the processors serves to severely effect the market in general. This
hurts not only first tier prices to the fishermen but also effects the entire chain of those involved in
getting the product to the consumer.
Recommendations: First, forgiving the hatchery debt loads would free up the production for common
property use. The problem with this is it would disadvantage those areas and fishermen that don't need
assistance. If this approach were used all areas of the state would have to receive equal compensation,
not fiscally feasible. What might be considered is making all hatchery production common property.
This common property production would then be taxed at a rate equal to hatchery expenses including
debt paydown. It would probably be necessary to establish a revolving fund into which the taxes would
be collected. Initially this would be funded and the taxes established at a rate to pay back this funding
over a period of years in addition to hatchery expenses. This would guarantee hatchery operation
expenses at least a year in advance. Tax on production could be held back at a level that would be sure
to cover the coming years expenses. This might also serve to increase involvement by fishermen in the
actual production and efficiency policies of each hatchery. Thank you for your consideration.
Name: Robert B. Moss
Email: moss@xyz.net
Address: P.O. Box 3428 Homer AK. 99603
Phone: 907-235-8304
Fishery/Area: Kodiak Seine and Cook Inlet Seine
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Finance
Title: On salmon price supports
Problem: We need to work on a price support program for Alaskan salmon similar to what the American
farmer enjoys for corn and soybeans. When ex-vessel prices fall below the target price the Federal
program would pay the balance.
Discussion: The rationale for the program is the same as for the American, EU or Japanese farmer.
Besides the benefit of the subsidy, we would be able to determine commodity pricing statewide for the
various species and product forms. This is already the case in canned salmon. Bristol Bay vs. local
frozen sockeye would need to be determined, etc. Fishermen’s ex-vessel prices would be directly linked
to the statewide wholesale market for that product form by a formula based on a fishermen’s historical
share of the value derived from that fish.
Recommendations: I’d like to explore the possibility of a federal price support program similar to the
current Farm Bill. When ex-vessel prices for salmon fall below the target price the Federal program
would pay the difference to the fisherman.
Name: Buck Laukitis
Email:zmagicfish@aol.com
Address: PO Box 33 False Pass, AK 99583
Phone: 907-548-2210
Fishery/Area: Area M
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Governance
Title: Singular Mission Statement for ADF&G
Problem: Differing mission "statements" between the Sport and Commercial Fisheries Division result in
conflict and confusion.
Discussion: Whereas Comm Fish seems to focus on management of the resource, Sport Fish seems to
manage and advocate for people. This differing, and often contradictory goal, results in conflict within
ADF&G and engenders confusion by regulators, managers and the public.
Recommendations: To develop a singular mission statement for both Divisions within the Department
that acknowledges the resource first, protection of its habitats, and its various values to the public.
Name: Sue Aspelund
Email: fishbiz@ptialaska.net
Address: P.O. Box 1715, Cordova, AK 99574
Phone: 907.424.4339
Fishery/Area: T
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Governance
Title: Labor issues that keep our industry from being competitive.
Problem: We are confronted with cheap labor in Chile and that affects the competitiveness of our wild
salmon. Other States assist their seasonal agricultural and seafood industries with less restrictive labor
laws.
Discussion: Processors have limited funds to pay fishermen, plant costs and labor and still sell into the
world market at a competitive price. Alaska has higher requirements for seasonal processing workers
than other states. If our industry is going to be competitive, we need to examine and trim down some
excessive and onerous State Labor requirements. Overzealous and unnecessarily expensive labor laws
equate to less money that can be paid to Alaskan fishermen.
Recommendations: Processors should be allowed to charge Room & Board to offset costs in all
processing locations.
Processors should be allowed to charge airfare (including return air fare) and other personal deductions
from the pay of any processing worker who quits or is fired before the worker receives the balance of
funds owed to them. Current law only allows the processor to deduct the difference between their rate of
pay and minimum wage.
Processors should be allowed to deduct reasonable damages for any vandalism caused by any worker.
Alaska labor laws should be more consistent with other pro-industry states and less restrictive to the
employer trying to provide jobs in Alaska.
Name: Duff Mitchell
Email: duff@alaskafoods.com
Address: PO Box 23000 Juneau, AK 99802
Phone: (907) 790-2722
Fishery/Area: Statewide
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Governance
Title: The high cost of transportation of moving product from Alaska.
Problem: Chilean salmon can move from the Southern Tip of the Patagonia Peninsula to Miami “fresh”
than what it costs to move wild salmon from Anchorage to Chicago.
Barge lines charge more to move a pound of pink salmon from any port in Alaska to Seattle than what
the fishermen make.
The result is that we are not competitive and our high cost of transportation that is a result of monopolies
means that our fishermen and processors are less competitive.
Discussion: It is ironic when it costs just as much to move salmon from Southeast Alaska as it does to
move the same container of fish from Seattle to Japan. The reason is that there is monopolistic collusion
to keep transportation costs high, to limit foreign competition from our market place and to cannibalize
seafood related freight for transportation company profits. It is time that the Alaskan Seafood Industry
be given competitive freight rates that are in line with what the rest of the world pays.
Recommendations: Institute price controls through an Alaskan controlled regulatory commission on
barge, air and freight companies such that they cannot charge seafood freight rates higher than what is
charged in the rest of the world on a mile to mile basis. This will immediately bring Alaskan freight
costs in line with the rest of the planet.
This is something our State can do without even messing with contentious Jones Act and National
Security issues.
I know that these industries lobbyists (Alaska Air, Northland, Tote, AML) are too powerful for this to
even be considered, but it needs to be put on the table.
Name: Duff Mitchell
Email: duff@alaskafoods.com
Address: Box 23000 Juneau, AK 99802
Phone: (907) 790-2722
Fishery/Area: Statewide
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Governance
Title: Representation
Problem: Possible bias decision making from task force committee`s
Discussion: There are fishers in Bristol bay that traditionally fish in one district. In Bristol Bay there is a
heated battle on interception from one district to another. There are members on the task force
commette`s that have in the past, submitted harsh proposals to the board of fish concerning these
unrepresented fishing districts. The egegik, ugashik and togiak district have no traditional fishers on the
task force committee’s.
Recommendations: Conflict of interest laws on certain issues, reps from these districts.
Name: chairman , Mitchell Seybert, L.L.B.B. fish and game advisory
Email: sockeyeman@aol.com
Address: PO Box 55 Port Heiden AK. 99549
Phone: 907 837 2207
Fishery/Area: T
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Governance
Title: Not enough plain old fishers on your committees
Problem: There is alot of people with political knowledge on the committees, however to do a good job
on the task before you, more ordinary fishers should be considered.
Discussion: Local knowledge has at times been the best available info used in management. It is another
tool available that is not beening utilized
Recommendations: Get more unpoliticalized people on your committees.
Name: Mitchell Seybert
Email: sockeyeman@aol.com
Address: pob55 port heiden ak 99549
Phone: 907 837 2207
Fishery/Area: Bristol Bay
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Governance
Title: Alaska Seafood Commission
Problem: The state has no effective body responsible for and capable of coordinating state agencies and
industry (see attached list) so that the Alaska Seafood industry has an effective, integrated plan for the
promotion of Alaska seafood and ensuring that that all sectors of the industry are socially,
environmentally, and economically viable.
Discussion: There several agencies that have a piece of the piece in the seafood industry, however there
is no effective, ongoing coordination; nor is there a mechanism to periodically assess the health of the
industry, assess threats facing the industry, and develop a strategic plan for the future. Continuous
improvement and market awareness are vital to the survival of Alaska’s seafood industry in a
competitive, globalized protein market.
In the past there have been sporadic attempts to bring segments of the industry and government together,
such as the Salmon Forums, and this Legislative Task Force. Interest in the viability of the seafood
industry ebbs and flows on political whim, and the state of the economy. What has been lacking is an
institution to plan strategically, coordinate, and follow-up on the implementation of actions necessary to
make the seafood industry economically vibrant.
The State will benefit if we fully develop the resource and bring in the highest level of tax revenue to the
state; in addition to increased economic activity.
Recommendations:
1. Establish an Alaska Seafood Commission modeled after the Alaska Minerals Commission which
was established by the 14th Legislature (see attachment).
2. Encourage the next Governor to establish a Seafood Cabinet with seafood industry representation
as an interim measure until the Legislature establishes the Commission.
Name: Tom Gemmell, Stephanie Madsen, Heather McCarty
Email: ufa1@ufa-fish.org
Address: 211 Fourth St Ste 110, Juneau, AK 99801
Phone: (907) 586-2820
Sec. 44.33.431. Alaska Minerals Commission established.
(a) The Alaska Minerals Commission is established in the Department of Community and
Economic Development.
(b) The commission is composed of 11 members. The commission shall be composed of individuals
who have at least five years' experience in the various aspects of the minerals industries in the state. The
governor shall appoint five members of the commission, one of whom must reside in a rural community.
The president of the Senate shall appoint three members of the commission. The speaker of the House of
Representatives shall appoint three members of the commission. Each member serves at the pleasure of
the appointing authority.
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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(c) The commission shall make recommendations to the governor and to the legislature on ways to
mitigate the constraints, including governmental constraints, on development of minerals, including
coal, in the state.
(d) The commission shall report its recommendations each year to the governor during the first 10
days of the regular session of the legislature. The commission shall notify the legislature that the report
is available.
Organizations with a Role the Alaska Seafood Industry
Agencies with responsibility for pieces of the seafood industry include: Legislature (Finance, Resource
Committees), University of Alaska (Institute for Social and Economic Research, Marine Advisory
Program, Sea Grant, Fisheries Industry Technology Center, and the School of Fisheries), Department of
Fish and Game (Commercial Fisheries Division), Department of Labor, Department of Natural
Resources, Department of Revenue, Department of Community and Economic Development (Division
of International Trade & Market Development, Alaska Industrial Development and Export Authority,
Division of Community & Economic Development, Division of Investments), Department of
Environmental Conservation, and Governors office. There are over 50 commercial fishing or processing
organizations in the state and over 50 communities that receive raw fish tax.
Report of the Alaska Minerals Commission
http://www.dced.state.ak.us/cbd/minerals/pub/miningreport01_02.pdf
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Governance
Title: Income taxing fishermen and then not providing required services for the industry.
Problem: Alaskan fishermen and fishermen processors are the only citizens of Alaska that pay an
“income tax”. The fishery tax is levied on the value of harvest and is therefore a gross income tax. In
addition, these funds are not dedicated or earmarked in anyway to fishermen or the fishing industry but
is paid to the general fund and for municipal sharing. This is in fact an income tax by the very definition
of the word. “A tax on the income of an individual or business”. Fishermen and the Alaskan fishing
industry is the only citizenry that have an income tax, yet our need for State services is not respected and
has been continually cut back by urban/non-fishing community representatives. Even though we are the
only industry and citizenry that pays its own way through an “income tax”, we are made to feel like
second-class citizens in legislative budget sessions. Instead of being portrayed as an industry that is
paying its own way, we are tagged with suggestions that we should pay more user fees, more self
imposed marketing assessments and other insulting suggestions during legislative budget hearings that
defy the facts that we, as an industry fully pay for all services we use and more.
Discussion: These two laws, AS 43.75.015 and AS 43.75.130 when combined constitute a bona fide
income tax that fishermen pay not only our state government, but also then the State channels
fishermen’s income taxes into borough and local government funding as well. This dependency hook for
local government revenue sharing is not fair since other industries and individuals, say in the tourist
industry, does not pay an income tax. It is if everyone in our elected State government forgets that
fishermen and processors “pay” for their services. Yet there are continual cuts in commercial fisheries
management, DCED- IRS loans and other programs used by commercial fishermen. These shortsighted
actions actually decreases fishermen’s ability to earn an income (and pay taxes) on species less studied.
Our rightfully conservative harvest guidelines error on the side of the resource when no data exists to
open a fishery or extend a season. Budget constraints impair the ability to properly manage our fishery
resources. In addition, no Alaskan legislator or Senator has gone on record attesting that the Alaskan
Fisheries Business Tax is a defacto “income tax” with just a pretty name. Our tax practices and system
were developed when our industry was healthy and did not have farmed fish competition. Now times
have changed and fishermen and the processing industry is overtaxed for the services they receive.
I have included these two laws for review:
AS 43.75.015. Fisheries Business Tax.
(a) A person engaged in a fisheries business is liable for and shall pay the tax levied by this section on
the value of each of the following fisheries resources processed during the 7year at the rate set out after
each:
(1) salmon canned at a shore-based fisheries business - four and one-half percent;
(2) salmon processed by a shore-based fisheries business, except salmon for which the tax is due under
(1) of this subsection, and all other fisheries resources processed by a shore-based fisheries business -
three percent;
(3) fisheries resources processed by a floating fisheries business - five percent.
(b) Instead of the taxes levied by (a) of this section, a person who processes a developing commercial
fish species is liable for and shall pay a tax equal to
(1) one percent of the value of the developing commercial fish species processed by a shore-based
fisheries business during the year; and
(2) three percent of the value of the developing commercial fish species processed by a floating fisheries
business during the year.
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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(c) A person engaging or attempting to engage in a fisheries business who first actually and physically
processes the fishery resource, or a person who purchases a fishery resource that is frozen from a person
excluded by AS 43.75.017 from liability for the tax, is liable for and shall pay to the department the
entire tax imposed by this section. In determining this tax liability, the person may deduct from the value
of the fishery resources processed the value of fishery resources that are canned or processed for other
fisheries businesses. A person taking the deduction authorized by this subsection shall report all
information relating to the deduction in accordance with regulations adopted by the department.
AS 43.75.130. Refund to Local Governments.
(a) Except as provided in (d) of this section, the commissioner shall pay
(1) to each unified municipality and to each city located in the unorganized borough, 50 percent of the
amount of tax revenue collected in the municipality from taxes levied under this chapter;
(2) to each city located within a borough, 25 percent of the amount of tax revenue collected in the city
from taxes levied under this chapter; and
(3) to each borough
(A) 50 percent of the amount of tax revenue collected in the area of the borough outside cities from
taxes levied under this chapter; and
(B) 25 percent of the amount of tax revenue collected in cities located within the borough from taxes
levied under this chapter.
(b) For purposes of this section, tax revenue collected under AS 43.75.015 from a person entitled to a
credit under AS 43.75.032 shall be calculated as if the person's tax had been collected without applying
the credit.
(c) [Repealed, Sec. 7 ch 79 SLA 1986].
(d) Notwithstanding the provisions of (a)(2) and (a)(3)(B) of this section, the commissioner shall pay
(1) to each city that is located in a borough incorporated after June 16, 1987 the following percentages
of the tax revenue collected in the city from taxes levied under this chapter:
(A) 45 percent of the taxes collected during the calendar year in which the borough is incorporated;
(B) 40 percent of the taxes collected during the first calendar year after the calendar year in which the
borough is incorporated;
(C) 35 percent of the taxes collected during the second calendar year after the calendar year in which the
borough is incorporated; and
(D) 30 percent of the taxes collected during the third calendar year after the calendar year in which the
borough is incorporated; and
(2) to each borough that is incorporated after June 16, 1987 the following percentages of the tax revenue
collected in the cities located within the borough from taxes levied under this chapter:
(A) 5 percent of the taxes collected during the calendar year in which the borough is incorporated;
(B) 10 percent of the taxes collected during the first calendar year after the calendar year in which the
borough is incorporated;
(C) 15 percent of the taxes collected during the second calendar year after the calendar year in which the
borough is incorporated; and
(D) 20 percent of the taxes collected during the third calendar year after the calendar year in which the
borough is incorporated.
(e) Notwithstanding the provisions of (d) of this section, a city may adopt an ordinance to transfer a
portion of the funds received under (d)(1) of this section to the borough in which the city is located.
(f) In this section, "tax revenue collected" includes the amount credited against taxes under AS
43.75.018 .
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Recommendations: That laws be modified protecting, expanding, and fully funding fishermen and
processor programs such as ADF&G commercial fisheries budgets, Limited Entry Commission, ASMI,
DCED fishermen, processor, and hatchery loan programs (now you have the funds to forgive hatchery
loans!), CFAB funding, ASTF fisheries funding, UAF Fisheries Technology programs and any other
program that directly affects our seafood industry, processors and fishermen. Further that only after full
funding of these programs, can the legislature spend fishery business taxes (fishermen and processor
income tax) on the general fund or give funds to local government revenue sharing. This will alleviate
the unfair taxation issue because for once Alaskan fishermen and processors will not be made to feel that
they must beg for their programs, when after all, they have in fact been paying for them all along.
In addition, should anyone in the future forget, the Fishery Business Tax should be changed to reflect its
true name: Fishery Income Tax. I would also add that our industry be exempt from any future proposed
income taxes until the rest of the general public catch up to the tax rate that fishermen currently pay.
Name Duff Mitchell
Email duff@alaskafoods.com
Address Box 23000
Juneau, AK 99802
Phone (907) 790-2722
Fishery/Area Statewide
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Marketing
Title: Funding for Export Marketing/Bristol Bay regional problems
Problem: marketing dollars for export sockeye is under funded.
Discussion: There are many facets to this industry, and each has to be fine tuned. Good marketing in the
export market is the fine tune that is needed for sockeye. Fixing of the sockeye market(which is
90%export) would eliminate half of the industries problems, and head off sockeye over production
before it happens.
Recommendations: provide funding for export marketing.
Name: Mitchell Seybert
Email: sockeyeman@aol.com
Address: P.O. Box 49055 Port Heiden AK.99549
Phone: (907)837-2207
Fishery/Area: T/ Bristol Bay
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Marketing
Title: On Marketing
Problem: Our marketing strategy hasn’t worked.
Discussion: Most of the problem is we are being outspent. The Alaska legislature won’t provide needed
funds and taxing a shrinking industry won’t provide much to work with. We were caught off guard.
The last decade was wasted believing we enjoyed market share and we didn’t need to differentiate our
wild product. Our fish have become irrelevant by not admitting that we are a niche food product and we
need to market accordingly. People love salmon in America – the fish farmers have proven that for us.
We send most of our good salmon over to our parent companies in Japan. The makeup of the existing
marketing organization’s board has been unwilling to take off the gloves and factually differentiate the
healthy, wild product that we harvest here, because many of the processing representative companies
also sell farmed salmon.
Recommendations: The ASMI board needs a shakeup. It is seen by many fishermen in western Alaska
as processor dominated and ineffective. Why not get some board members who have been successful
selling primary and secondary food products other than seafood who might be more insightful regarding
niche marketing
Name: Buck Laukitis
Email: zmagicfish@aol.com
Address: PO Box 33 False Pass, AK 99583
Phone 907-548-2210
Fishery/Area: False Pass setnet
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Marketing
Title: Proposal for a recommendation by the Salmon Task Force: Establish an Alaskan “Salmon
Technical Support Group (STSG)”
Problem: For years, Alaska has continued to spend tens of millions of dollars marketing [mostly] the
same minimally processed products. While this effort certainly is of benefit to the industry, it has not
enabled AK wild salmon to even begin to “hold its place” in the market. Declining use, demand and
prices have, on the whole, continued at an alarming pace, despite non-stop marketing efforts to promote
the industry’s products (see attachment 1).
There is clearly a need for new tactics. Among potential new tactics applied – new technology and new
product forms needs to be high on the list. This concept seems to have escaped most thoughts on what
the industry needs (see attachment 2), though some have seen the value in product creativity (see
attachment 3) and [what I call] a “chickenizing” of our salmon industry.
There is a significant technological gap between the majority of AK salmon as currently processed, Vs
more user friendly types that would be in demand and enjoyed by food service and retail markets.
Making this technology, and many additional resources, available at no or low cost to processors and
fishers, is a needed approach not previously taken by the state government to assist the severely
depressed salmon industry in Alaska. Following is a brief proposal on some ways this assistance might
be achieved.
Discussion: In Alaska and beyond, many people recognize the superior innate qualities, e.g., flavor,
texture, appearance and nutrition of AK wild, Vs foreign, farmed salmon species. This quality is no
longer enough for AK salmon to compete successfully in global commodity markets where cost and
convenience reign supreme, and the year round supply of consistent quality farmed salmon continues to
grow in volume. Furthermore, there is an increasing amount of farmed salmon being moved into more
convenient, value added forms, including canned and frozen – the very areas AK wild salmon has more
or less dominated for decades. Beyond salmon, the global increase in all seafood production, both
farmed and wild catch is increasing at a significant rate (see attachment 4), creating even more
competition for center of the plate.
Improved cost, convenience, and consistent year round quality of AK wild salmon should not only help
stabilize the industry, but also grow the markets and demand for products. Cost issues can, in part, be
addressed by increased efficiency of harvests, and a growing demand for, and therefore value of, AK
wild salmon. Regarding convenience, more AK wild salmon needs to be processed into product forms
that are more “user friendly” than the decades-old products produced from the majority of fish
harvested, such as canned, and fresh/frozen H&G and fillets. Consistent quality of a year round supply
of perishable frozen salmon can be achieved with some added food technology.
Recall how the US consumption of chicken grew significantly when more “user friendly”, convenient
cuts, and ready-to-cook or eat products were added to the whole bird offerings. The quick and easier
preparation, among other factors, resulted in significant increases in the consumption of chicken in retail
and food service settings (see attachments 5, 6 and 7).
The availability, nutrition and versatility of salmon could make it the next “chicken” for many
consumers; AK wild salmon could be, and should be, a leader in accomplishing this. Furthermore,
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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lower cost, abundance, and potential increased production of hatchery salmon, make them great targets
for new cost effective, user friendly products.
Recommendations: Provide no & low cost technical support to the Alaska salmon industry to help it
achieve sustained growth and stability.
Note: In the following projects proposed, work with individuals, fishers and processors are completely
confidential. General information (i.e., not specific to any individual, group, or business) and results of
research projects done to meet needs of the industry would be available to all interested participants in
the AK salmon industry. Information applicable to other AK seafood industries would be available to
them as well. Access to this information must be carefully restricted, to prevent foreign and farmed fish
competitors from benefiting from the work.
1. Evaluate cost scenarios (e.g., ingredients, processing, packaging and transportation) of the
production of various product forms (e.g. natural or formed portions, breaded, canned, pasteurized,
prepared entrees, soups, etc.). Determine products that make sense to manufacture in AK.
2. Research potential uses of AK salmon in various US and global ethnic cuisines. Work with
processors to prepare products for test and evaluation in regions, such as US, Eastern and Western
Europe, China and Korea; also work with potential customers in these regions to discuss new
product concepts (ours and theirs), uses, and “what AK salmon processors could do for them”, in
producing user friendly products that they would purchase.
3. Assist the industry in generating greater global demand and revenues for wild Alaskan salmon, via:
a. Improved handling and holding methods on boats and in plants, to produce initial higher quality
and value.
b. Improved and more consistent frozen quality and stability for year round production and supply
of consistent quality products.
c. Testing and development of new “convenience added” product forms suitable for retail and food
service sales in current and new, US and global markets.
d. Given an interest and opportunity, develop prototype salmon products and package systems that
would make it suitable for distribution and use in foreign cuisines. Manufacture products for
purchase by US Federal Government, UN Organizations, etc., for distribution in food aid
programs. (Let George W. know that he can help AK, and provide foreign aid with the same
dollar).
4. Introduce processors to a number of potential suppliers of ingredients, equipment, packaging
materials, etc.; these suppliers will be able to provide additional support in product, process and
package development … much of it free.
5. Assist processors in developing new product forms and products; proprietary formulations would
require a nominal fee for service.
6. Assist processors in developing the process requirements to produce new products, and estimates on
cost to manufacture specific finished, packaged product.
7. Other services as needed or desired by the industry, and feasible for the Tech group.
The program should be:
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 21 -
o Fully funded for two years, with quarterly or bi-annual reviews for increased funding, as needed
by the industry to serve its needs. At least two years is required to determine if positive results
are being generated.
o Accountable to the industry it serves, therefore the AK salmon industry should vote on whether
funding should be continued after two years, and every year thereafter.
CONTACT INFORMATION:
Respectfully submitted by:
Gail A Marshall, PhD
Phoenix Food Consulting, Ltd.
(An Alaskan Corporation)
PO Box 110981
Anchorage, Alaska 99511-0981
phoenixak2000@aol.com
Phone: 907-345-9912
Fax: 907-345-9913
Mobile: 907-351-9004
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Marketing
Title: Establish and Fund the Alaska Seafood Promotion Foundation
Problem: The stream of funds needed for the promotion of all Alaska Seafood is inadequate and not
stable. This leads to inconsistent promotion and less marketing when prices are depressed.
Discussion: At present, the Alaska Seafood marketing Institute depends on processor and harvester taxes
on the value of seafood as their primary source of funds and occasional federal grants; general funds
from the state of Alaska were cut off in 1997. Other elements in the Department of Community and
Economic Development receive some state and federal funds. Federal funding for seafood marketing
has been diverted from the Saltonstall-Kennedy program to uses other than originally intended.
While an immediate infusion of marketing funds is needed, we also need to be thinking of the long term
so that our message is there for the long haul.
An endowment, funded from multiple sources and inflation-proofed will provide some degree of
stability so that marketing can be planned years into the future and that the funds will be there when it is
time to carry out the plan. A properly funded endowment should also provide for a substantial increase
in marketing funds so that we are in the same league with farmed salmon competitors who are funding at
levels substantially higher than Alaska.
Recommendations:
1. Establish a private foundation to manage a marketing endowment. The foundation board of
directors should represent a broad range of seafood industry representatives and should cover all
species of Alaska seafood. Private foundation status should enhance the ability of the
endowment to compete garner both public and private funds.
2. Fishermen should determine if they want to increase their self assessment and designate the
funds for the endowment.
3. Examine existing pools of funds (e.g. Fishermen’s Fund, revolving loan funds, etc) controlled by
the state to determine if any excesses could be transferred to the endowment.
4. For a set period of time, divert any state fines from marine pollution incidents to the endowment.
5. If any changes are made to assessments on hatchery cost recovery fish, a significant portion of
the new revenues should be dedicated to the endowment.
6. Support federal legislation to:
a. Appropriate any “windfall” taxes from the EXXON VALDEZ settlements to the
endowment.
b. Designate any federal fines and settlements from marine pollution in Alaska to the
endowment for a period of ten years (Note: as a minimum share equally with
environmental groups presently receiving these funds, e.g. national Park Foundation).
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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c. Designate a portion of tariffs on imported seafood to the endowment for a period of ten
years.
Name: Bruce Schactler
Email kvrg@ptialaska.net
Address: PO Box 2254, Kodiak, AK 99615-2254
Phone: (907) 486-4422
Fishery/Area: Kodiak/Southeast seine
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
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Marketing
Title: Alaskanization of ASMI voting Board of Directors
Problem: We have major processors who buy, market, process, and trade in farmed fish from Chile,
Maine, and Western Canada that sit on our Alaska Seafood Marketing Institute. Some processors openly
display the fact that they sell farmed Atlantic salmon in Seafood directories outside of ASMI. Others are
a little more secretive about it. The fact is that many will market and sell farmed fish if that is what their
customer wants. That is fine for business and everyone should be expected to earn a profit at whatever
legal means he or she can. However, it is unfair to the fishermen and the voting public of Alaska to have
our Alaska Seafood Marketing Institute board members contaminated with the farmed salmon conflict
of interest.
Discussion: ASMI was created for marketing “Alaskan” seafood. Over time, many major processors
have added trading arms, value added processing firms, import businesses, and etc. that actively import,
market, process and sell farmed salmon. These same companies through the virtue of their ASMI board
seats, the direction, focus, and strategic planning of “Alaskan” wild salmon. The contamination of
interests and the blatant conflict of interest has not gone unnoticed among fishermen. Fishermen will
display bumper stickers stating, “Friends don’t let friend eat farmed fish”, yet their processor is making
a buck off the farmed fish trade.
Recommendations: That any company desiring to have a seat on the ASMI board of directors must not
engage in the farmed salmon trade in any manner. An oath must be signed under penalties of perjury by
the CEO or President of any company having a board seat that their company does not engage in
importing, marketing, processing or trading in farmed salmon either directly or indirectly through their
subsidiaries, divisions, trading arms, joint venture or controlled business relationships.
Companies that currently engage in farmed salmon will have 90 days to disengage from the farmed
salmon business in order to maintain their ASMI board seat, but will lose their voting rights while in the
process of disengagement.
Name: Duff Mitchell
Email: duff@alaskafoods.com
Address: Box 23000 Juneau, AK 99802
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 25 -
Marketing
Title: Simplifying Regulations Pertaining to Fisherman Direct Marketing
Problem: The current regulatory structure as it relates to fishermen direct marketers includes permitting
processes through three different state departments (ADF&G, DOR, DEC) and represents a significant
barrier to fishermen interested in pursuing entrepreneurial direct marketing efforts.
Discussion: As the exvessel value of Alaska salmon continues to erode, more and more fishermen are
turning to direct marketing as a way to replace or supplement their traditional earnings. Direct marketing
of salmon (and other commercial species) contributes to the diversification of our industry through the
creation of new markets and new methods of bringing salmon product to customers. In addition, the
personal interaction that typifies direct marketing activities gives fishermen or their agents the
opportunity to inform consumers about the unique attributes of Alaska's salmon resource.
Currently, however, the regulatory structure relating to direct marketing is such that it creates a
significant barrier to those fishermen interested in marketing their own seafood product. The result
of this barrier is twofold. Either (a) fishermen do not pursue direct marketing as an alternative to selling
fish to traditional markets or (b) fishermen do so without going through the proper permitting process,
resulting in a loss of revenue to the State and a climate that discourages the growth of the direct
marketer's business.
In particular, the permitting process required by the Department of Revenue for fishermen whose
product is processed by custom processing facilities is daunting. Under current regulations, fishermen
who contract with a custom processing firm for their processing needs are required to apply for a
Processing License from the DOR, although the fisherman is NOT processing his own fish. The purpose
of this license is to assure that the state receives the taxes owed on the seafood product, but the
application process responds to the needs and activities of the traditional processing structure, and not to
the small direct marketer.
The permitting requirements can be bypassed to a certain extent by conducting a paper transfer of the
product, in which the fisherman "sells" his product to the custom processing outfit, and then "buys"
that product back. However, this arrangement is somewhat shadowy and is not the route preferred by the
DOR.
Various reporting requirements of the processing license also contribute to the challenges that current
regulations pose.
In all, it is my experience that the majority of those fishermen who are pursuing direct marketing
avenues and are working to establish new and innovative markets for their product are doing so outside
of the state regulatory structure, resulting in liability on behalf of the fishermen and a revenue loss to the
state. However, I also find that most fishermen would like to hold the proper permits and be on the upand-
up with the State, if the process were not so daunting or so confusing.
The licensing and permitting packet currently distributed by ADF&G, DEC, and DOR is more than 15
pages long, and includes forms from all three departments. Fishermen must pick and choose the
schedules they must complete, often in a counterintuitive manner (applying for a processing license
when you do not intend to process your own fish). State statute should be designed to encourage
business growth, not dissuade it.
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 26 -
Recommendations: Statutes outlining the permitting process required to process, export, sell, or
purchase seafood product should be reconsidered with an eye to facilitating the direct marketing process.
It is possible that a separate category of harvest/processing/sale should be created in order to answer to
the needs of this growing segment of the industry and to streamline the permitting process.
Fostering the development of direct marketing will help Alaskans diversify our salmon industry and will
provide a critical component in the future health of our communities. Current statute was designed with
our traditional processing structure in mind, and is not compatible with current entrepreneurial activities.
Creating a separate class of fisherman/marketer and adapting existing regulations to their needs will
assure that this important sector of our industry can grow freely.
Name: Erin Harrington
Email: kodiak@unitedsalmon.org
Address: PO Box 762, Kodiak, AK 99615
Phone: 907-486-6899
Fishery/Area: Kodiak Salmon
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 27 -
Marketing
Title: In State Marketing Program
Problem: We have a weak “in-state” Alaska Seafood Marketing strategic presence. We could do a better
job of promoting and encouraging eating food service pink and chum salmon as well as higher quality
Alaskan salmon and seafood “in state” to tourists, through private industry as well as through our public
schools, pioneer homes, institutions, and on our Alaskan ferries. We should have in-state promotions
where citizens are encouraged to purchase Alaskan seafood in all restaurant and retail outlets. These “instate”
private and public market opportunities should be vigorously promoting Alaskan Seafood with
guidance and assistance from ASMI as well as from other State entities.
Discussion: When people visit Maine, they look for lobster. When people visit Louisiana they want to
eat Shrimp or Crawfish. When they come to Alaska, they want Alaskan Seafood, but our ferries serve
very little seafood although they have improved recently. Our public institutions do not demand value
added seafood products from their distributors and therefore they do not serve Alaskan seafood at least
once a day in our State institutions. Our schools and institutions serve fish sticks rather than demand
low cost Alaskan seafood products. We need to create demand for Alaskan produced seafood products at
the grass roots level to set a national example for wild seafood consumption. We need to raise our urban
children and urban brothers the virtue of traditional “boil fish” a simple recipe of chicken bouillon,
potatoes and pink salmon. This should replace chicken soup at every public institution. In fact, it is
cheaper and better for you. Because our state is so diverse and the urban population does not eat as much
seafood as the rural population, the availability of seafood must be promoted in our urban public
institutions. Public seafood food service contracts should go to firms that provide exclusively caught and
produced Alaskan seafoods. If current food service providers cannot sell exclusively Alaskan seafood,
then the seafood supply portion of food service contracts should be separated and given to somebody or
firm that will. In addition, institutional buyers should be allowed to purchase Alaskan seafood in-season
from any source that meets or beats contract prices. This escape clause in food service contracts not only
drives the cost per plate serving down, but it economically encourages more meals to be served using
Alaskan seafood.
On the private level, ASMI should spend necessary funds to create a grass roots tourist and restaurant
promotional supporting the small mom and pop, as well as corporate establishments that cater to
residents and tourists alike. We have more tourists arrive in Alaska than probably any other state and we
miss this huge marketing opportunity to have tourists taste and enjoy our wonderful seafood and then to
go back home and continue to eat what they enjoyed in Alaska.
Recommendations: Require State Institutions to serve Alaskan produced (not Seattle value added)
seafood at least once a day and make purchases from Alaskan produced seafood products. All
departments of the State: Education, Corrections, Health and Social Services, Transportation (ferries)
should be legislatively required to vigorously place Alaskan produced seafood on daily institutional
menus. This will create the incentive to value add products in Alaska.
ASMI should be given “state” funds or marketing grants from State coffers to develop and implement an
“in-state” marketing program that vigorously promotes and educates our tourist and urban population to
eat our Alaskan seafoods. Lastly, we should be serving Alaskan seafood every day at the legislative
kitchen and governor mansion as well. With all the Omega Three fatty acids going through legislative
brains, we will have better laws passed. In addition, our elected leadership should be setting the example
for others to follow in promoting our States “cash crop”.
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 28 -
Name: Duff Mitchell
Email: duff@alaskafoods.com
Address: Box 23000 Juneau, AK 99802
Phone: (907) 790-2722
Fishery/Area: Statewide
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 29 -
Marketing
Title: Proposal for a new Alaskan salmon marketing organization devoted solely to differentiating wild
salmon from farmed salmon.
Problem: AK salmon fisheries are in a desperate state. The exponential increase in worldwide salmon
farming has lowered prices paid fishermen to insupportable levels. Whatever other changes we make in
the industry; improved quality, different harvest methods, etc., while important, still leave our fish
competing with the ever-increasing supply of farmed fish. As long as our product has to compete
directly with beautiful $1.99/lb farmed fillets, the outlook is grim, UNLESS the salmon-consuming
public learns the difference between a wild and a farmed salmon.
1. We MUST differentiate our product from farmed salmon if we are to survive as an industry.
2. The salmon consuming public knows little about salmon issues---some consumers buy farmed
salmon thinking it is wild; some know the salmon they buy are farmed but think they are doing a good
thing for the earth, protecting wild stocks by not eating them, but the majority of salmon consumers
know almost nothing about what they are
buying.
3. ASMI, for all the good work they have done, is not in a position to wage an aggressive campaign
in our favor. They are constrained in their criticism of farmed salmon by the fact that they have to deal
with wholesalers and retailers that also sell farmed salmon.
Discussion: Our beloved salmon industry will have to undergo many changes to survive. Better and
increased marketing is critical. Our markets have steadily eroded as retailers would rather deal with the
more predictable, uniform, farmed product A new strategy would be to directly target consumers,
encouraging them to make the right choice at seafood counters and to ask for wild salmon in
restaurants. When more consumers ask if the salmon is natural or farmed, supermarkets and restaurants
will begin to respond.
As an industry, we have powerful arguments in our favor which we can use to convince the public
to choose wild salmon. Thus far, we have barely utilized them. This needs to change. We cannot
simply rely on the occasional newspaper or magazine article to espouse our cause----we must as an
industry take on our competition in an aggressive way. Our marketing strategy should concentrate on
these basic categories,
particularly the first three.
1) Environment: Consumers will make decisions based upon environmental concerns. The tuna
and swordfish industry are examples of this. Unfortunately, the majority of consumers mistakenly think
that salmon farming is good for the environment. If we can change this one misconception alone, our
markets will be greatly strengthened. We should fully take advantage of the environmental
organizations that have come out in our favor.
2) Health: Consumers will also make decisions based on health. Our fish is free of all the
dubious chemicals that go into farmed meats The knowledge that farmed fish is artificially colored is
enough to turn most consumers off. An aggressive campaign can contrast wild salmon, not just with
farmed salmon, but as an alternative to all other industrially grown meats. Most of the public has little
access to natural protein. We can benefit greatly by promoting our product as such. (ie, 'Alaskan Wild
Salmon, the natural alternative' or 'Alaskan Wild Salmon, food as Nature intended) As an industry we
have missed out on enormous opportunities in recent years (hoof and mouth disease, Mad Cow disease)
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 30 -
to position our salmon as a healthful alternative to 'factory meat' lets not continue to make the same
mistake.
3) Taste: Wild Salmon consistently beats farmed salmon in taste tests. We should promote this
fact and arrange more taste tests at fairs and public events, supporting small fisherman/marketers who
work them, and also having permanent teams working such events.
4) Community Impact: A handful of multinational corporations displacing thousands of smallscale
American fishermen
This is not meant to be a criticism of ASMI. I believe they should have more funding and not less.
They produce high quality materials and do what they can with a relatively small budget. However, it is
important to recognize that the policy of not taking on the salmon farmers has failed. Our markets have
steadily eroded for more than a decade and will continue to erode. Its time to try a different approach.
A new organization that is willing to directly challenge the aquaculture industry that is willing to work
in non-conventional ways to get attention, can do much to convince consumers that wild salmon is a
superior product and to permanently establish wild salmon's niche in the marketplace. Such a new
organization would complement ASMI's work.
Some still maintain that we cannot afford to poke a giant in the eye, that is to provoke a well
funded response from the salmon farmers. However given the desperate situation that we face, I believe
that we have little to lose and much to gain. With respected organizations like the Audobon Society and
Friends of the Earth on our side and all the facts in our favor, any response by the aquaculturists will
only serve to further our cause by differentiating wild from farmed salmon. Industrial fish farming has
brought the Alaskan salmon industry to its knees and its time for us to fight back. With financial
support, vision, and a creative marketing campaign, its a fight that we can win.
Recommendations: Fund an organization with the sole purpose of educating the public about the
differences between farmed and wild salmon. Such an organization should be completely independent
from ASMI so that salmon distributors face no backlash from retailers of both wild and farmed salmon.
Hire a professional advertising firm to design aggressive ads that catch the public’s attention.
Concentrate the limited marketing resources on areas where people are more environmentally and health
minded, and target such people thru sports, health and outdoor magazines. Make sure that marketers
know which areas will be targeted so they can concentrate sales efforts in these places. The organization
should work to support fisherman/marketers as a cost-effective way to isseminate information in
communities around the U.S.
The state of Alaska and the Federal Government have spent tens of millions on disaster relief caused
by low salmon prices. It would serve the state well to try a new proactive approach. If it is effective, it
can then be expanded and other funding sources can be found.
Name: Robert Lebovic
Email: rdlebovic@yahoo.com
Address: PO Box 967 Lemont PA 16851
Phone: 814 237-6895
Fishery/area: Bristol Bay gillnet, salmon and herring
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 31 -
Production
Title: Restrictions on Permit Holders
Problem: Commercial Fisheries Limited Entry Commission’s increasing restrictions on the commercial
fisherman as a small businessman.
Discussion: Because a permit holder may not activate more than one permit at a time and the emergency
transfer system is inflexible and excessively prolonged, the permit holder is forced to speculate, gamble
and risk economic success months in advance of the actual commercial fishing season. We regard
commercial fishing as a legitimate business entity, yet the State of Alaska does not recognize this fact.
The limited entry system was initiated to limit the number of fishermen in a given area, not to limit,
hinder, or curtail the business aspects of the commercial fisherman. Emergency transfers are prohibited
for economic reasons although in any business, economics is the main decision-making factor.
Recommendations: The solutions to ease the business decision-making process for the permit holder are
as follows: (1) to add an alternate name on the permit card (i.e., husband and wife or partner), in
addition to the permit holder, would allow the permit holder to market their catch either whole or as a
value-added product in season, while the same boat and alternate continues providing product for the
business; and (2) the permit holder should be able to fish same gear type in two administration areas
(i.e., Cook Inlet gillnet permit and PWS gillnet permit). This would provide the permit holder the ability
to continue his business when one area is closed or the price per pound offered in either area is below
cost of operation.
Name: Ted and Kathy Whip
Email: tkwhip@gci.net
Address: PO Box 92377, Anchorage, AK 99509-2377
Phone: (907) 248-9501
Fishery/Area: Cook Inlet Set Gillnet/Prince William Sound Drift Gillnet
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 32 -
Production
Title: Bristol Bay fishery: keeping young Alaskans in the fishery
Problem: Lower catches and lower prices mean that many salmon fishermen cannot afford to leave other
jobs for the full salmon season.
Discussion: I would like to see permit transfers among immediate family members facilitated during the
fishing season. Younger people cannot afford the full-time commitment, but a family could share the
season duties.
Recommendations: I am under the impression that a person has to go to Anchorage to transfer a salmon
permit. Could this again be facilitated in King Salmon?
Name: Judy Burtner
Email: seafood@alaska.com
Fishery /Area: Bristol Bay
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 33 -
Production
Title: Sink or Swim
Problem:
1. We as fisherman are stuck in our old ways because we still desire to race for the fish. This makes it
difficult to implement the needed changes that could help us through this crisis.
2. Fishermen do not agree on how to fix the problem because too many think if my neighbor goes out of
business I can catch his fish too.
3. The salmon industry is grossly overcapitalized as it is and for fisherman to spend money they don’t
have on some thing that will only bring pennies/lb is senseless.
4. In reference to house bill 286, the fleet reduction and/or buy out program adds another layer of
capital to the already high cost of doing business. This is certainly a help but it’s far from the answer.
Besides, how do we fund this program? Do we wait for more hand-outs from the federal government,
and how long will that take?
5. Fisherman spend too much time working on their fishing equipment to fish competitively. Their
efforts should be directed at when to catch the fish, how to handle the fish, and under what weather
conditions, logistical locations, processing conditions or market conditions. Would a controlled harvest
help the picture?
6. Fishing is fun, we love what we do and don’t want to do anything else. However, we need to
understand the world market could care less about tradition.
Have we hit many home runs lately, as far as the world salmon market is concerned?
7. The viability of salmon is making it increasingly difficult to get an experienced crew interested. They
can make a better living at a day job or get a job on a halibut or black cod I.F.Q. boat and make 3-5
times as much money. How do we compete with those kind of crew shares?
8. Processors in general, lack the profit from salmon that would justify spending money to successfully
market wild salmon.
9. Processors pay the fisherman for their salmon by betting on what the market will bare. Much is
directly related to the previous buying season, but not limited to run timing, volume purchased, specie,
size and quality. The following season they have to make adjustments in the x-vessel price or maybe not
even buy fish depending on what the future holds and sales in the previous year.
Discussion:
History and present:
The spiraling price of salmon started about 13 years ago, it was the beginning of the end of premium
salmon prices as we know it today. Today, we are looking at 40 to 60 cent/lb grounds price for sockeye
and next to nothing for other species. Imagine the price of salmon falling even more. The problem of
low x-vessel prices are compounded by what farm salmon offers and what Alaska wild salmon lacks,
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 34 -
not to mention the low cost of wild salmon from Russia. If we wanted to actually compete with the
average wholesale price of farm salmon today, we would have to put fish traps in tomorrow. However,
there’s still a little room in the market for sockeye and other value added products but things are getting
obviously questionable for other salmon species. How much more time do we have to salvage what we
have left?
Salmon is a Commodity:
Supply and demand, is what drives the market. When it gets oversaturated the price drops and so on. In
some cases, it’s not cost effective for agriculturists to plant and for some in the salmon industry it’s
getting less cost effective to put the gear in the water. Like agricultural products much of what we do is
directly related to the inability to compete with production costs of other countries. The commodities
world is a numbers game and high costs are our problem.
The posted price by Trident Seafoods is 8.5 cents for RSW Pinks, 10 cents for Chums and 13 for Silvers.
We made more money on them thirty-five years ago not counting inflation. In fact, the eggs are worth
more than the carcass. That’s if they have eggs. The farm salmon industry is now producing salmon roe
with some success making one think there’s no end in sight. Can we get more money for our fish and cut
costs at the same time?
Protein Share:
Salmon in general, is expensive compared to other protein products. There is an oversupply of protein
on the world market and the bottom line is we are competing for stomach share. If that be the case, how
can we lower our production cost or spend more on marketing so we can prevent the huge inventory
carryover’s that have such crippling effect on the processing sector which trickles down to low x-vessel
prices?
Farm Salmon, is it healthy or not?
Slam that farm salmon because it makes you feel good. The average consumer doesn’t hear you because
even if it’s not as healthy as wild salmon the price difference outweighs in their favor. Besides, how
many people care about all the ingredients that go into the feed pellets that farm salmon consume. If you
were to stop and think for a minute about the agricultural industry, do they use all natural ingredients in
raising their crop or livestock? Maybe about 1% of them, if that. That 1% (natural foods) cost the public
about twice as much as the run of the mill production. There are a large portion of the public who are
willing to pay the difference for wild salmon, as long as it’s fresh. What about the other 9 months? The
sales of frozen sockeye fillets seem to be growing but not fast enough.
Environmental issues with raising farm salmon: Concerns throughout the world, have pushed the issue
of using land based facilities for farm salmon production. They are already using it for a number of other
seafood items with proven success. Most of the environmental population live in the United States and
Europe, not Chile or China and other third world countries. China produces aquaculture products in epic
proportions and Chile is Alaska’s reoccurring nightmare. These two countries along with Norway are a
big part of why there’s an overabundance of seafood on the world market. Are the kelp huggers going to
have significant impact on the overall production of farm salmon.
Environmental Issues with Wild salmon;
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 35 -
How much fossil fuel do we burn just to harvest the salmon? How much raw material do we use? Does
wild salmon really deserve a better grade than farm salmon when it comes to environmental impact?
Can we half the impact?
Profit from salmon:
Cutting costs equals more profits for fisherman and processor alike. This will only come by making
drastic changes in the current way we do business. Some feel that more profit from salmon will come
through survival of the fittest approach. This attitude that seems to be apparent among some fisherman is
unacceptable behavior in the road to progress. Why watch more of your friend’s relatives or neighbor
struggle needlessly, well knowing the other options. People need to remove themselves from the picture,
then look back and ask what would make it better. Proportional profit for most everyone comes through
small sacrifices for those that resist sacrificing anything. Creativity is what will set an example for future
generations. Being stuck in the same old ideology is the reason why many successful corporations have
gone broke. Is that what’s happening in this industry?
Other fisheries:
We need to diversify into other fisheries other than salmon. We might want to venture into the
possibilities of raising other aquatic products. After looking at the coastline of Alaska, one thinks of the
many potentials. Inshore operations deserve some serious attention. (not salmon farming) Creating
fisheries resources that don’t require big boats with expensive equipment and all the costs that go with
them could provide almost perfect opportunities for jobs closer to home. Are we going to create any new
jobs by driving down the same road?
Higher quality standards:
Can we simulate frozen at sea product as opposed to the current run of the mill production. Fisherman
and processors need to work together to become a driving force in the market place. We need to start at
the market place and work backwards and not produce a product we don’t have a place for. This will
help ourselves sell more salmon in a more timely manner. If we stop the race to fish could it help the
quality?
Perfect solution does not exist;
We must pull together if we want something that will lend itself to the needs of the many long standing
fisherman, surrounding communities, and processors. There is financial pain on both sides of the coin so
we need to place ourselves in someone else’s shoes and try out the view. The world market doesn’t care
about tradition, way of life, our harvest costs, processors costs, transportation costs or any other internal
issues that negatively effects us. It would be nice to preserve a way of life but it’s starting to look like a
way to go broke.
Management of Individual Fishing Allocations (I.F.A’s) to harvesting groups:
The question of, how to manage the fishery with an allocation to a co-op was raised at the B.O.F. this
winter. The answer is taking place as we speak. With the formation of Chignik Area Salmon
Management, there is no reason why the department can’t manage three or more groups. Keep in mind,
it would be in the co-op’s or fishing groups best interest to harvest the harvestable surplus of salmon in
the most efficient and easiest manor for all user groups. Whether there be one or more groups in addition
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 36 -
to the open fishery it should make for little difference from a management standpoint. Those groups
would be sanctioned to work together as far as the harvest of their respected allocations in relation to
escapement. The management of these allocations to groups would be very similar to what is happening
now in Chignik. Therefore, those that argue the point that more than one allocation would be hard to
manage is simply not true.
Socio-Economic issues that concern villages that rely on salmon:
This is certainly one of the hardest issues to deal with but is of great importance especially for the
people that live in the villages. There is much concern for the loss of jobs and the family lifestyles that
surround commercial fishing. Will the current path we’re on, improve the villages Socio-Economic
picture?
Non competitive Harvesting of a salmon Run as opposed to a Quota.
There’s certainly a big difference but it’s not as big as some think. The main reason some criticize the
issue so often is because of a knee-jerk reaction to change. The real issue here is how to harvest salmon
according to escapement needs. Chignik’s co-op is early proving grounds for the positive aspects of
controlled harvest. By controlling the harvest level, this enables the department to open the fishery much
earlier as opposed to opening it to everyone in the competitive fishery which could require a build up of
salmon. In other words, fishing groups would be ordered to harvest the resource subordinate to
escapement. This could increase the number of fishing days in a season which in effect provide a longer
processing window, especially during peak times of each run.
Is everyone created equal in a fishery?
Some feel that due to the price of permits, all permit holders are entitled to an equal share of the
resource, however the limited entry system was not formed to provide equal shares of the resource, only
equal access. When an individual purchases a permit they are betting on harvesting a percentage of the
available resource based on the amount of participation, investment in equipment, knowledge,
experience and effort put forth.
Given these facts, it would unduly penalize those that have invested their heart, life, and soul to be
presented with an allocation less than their recent past.
The long standing limited entry system for salmon has demonstrated that you seldom find two fish
tickets alike. This runs contrary to the current co-op in Chignik, which encourages the investor as
opposed to fisher to purchase a permit and effectively grab an equal share of the resource. Due to the
states structure of the co-op and the majority within the co-op it discriminates against those that would
like to enjoy the benefits proportional to their past history. Do all those Years of hard Work and
Investment mean anything?
Recommendations: Amend the limited entry laws to accommodate or allow one to convert limited entry
permits into Individual Fishing Allocations. I.F.A.’s
The I. F.A. would effectively be a catch history generated allocation of the salmon resource involving a
percentage of available harvest of each specie of salmon.
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 37 -
Qualifying years would be the average collective fishing history for the recent seven years in any area
that one holds a permit. Qualifying years 1995-2001.
Only allow allocations to groups of 20% or more of permits in each area.
Including the open fishery their shall be no more than five allocations in a specific management area
amongst gear type, one to open fishery and four to groups.
Terms and Conditions:
1. One must currently hold a limited entry permit in that area.
2. Individual Fishing Allocation is defined as taking ones average historical catch for each specie.
Therefore, one would have an I.F.A. for each specie.
3. Due to the many inactive permits in the state of Alaska it is important to start this program by
initiating a buy back program in each area.
4. An allocation to any permit holders is dependent on the formation of a "Harvesting Group". This term
would be defined as an organized group of fisherman with the sole intent to harvest the available surplus
of salmon in a management area in direct accordance to the groups allocation.
a. This group must consist of the joinder of 20 percent or more of the currently active permits in that
area. Thus limiting the number of allocations in a fishery will make it much easier to manage for the
state.
b. The group could not dictate where any one permit holder wanted to sell their I.F.A. of salmon
harvested unless that permit holder chooses to relinquish that right.
c. The I.F.A.’s to the permit holders shall not be compromised by any majority vote amongst permit
holders in the group. However, permit holders in the group who choose not to participate, will leave the
harvesting of that I.F.A. up to the remaining, they must arrive at harvesting fee relevant to the duties
performed. Therefore all members in the group through a majority vote must decide on the harvest fee.
d. All fishing groups are to work together with the open fishery and A.D.F.G. to effectively harvest the
resource in the best interest of all users.
5. Any permit holder not in a "Harvesting Group" will be deemed to be in the open fishery.
6. The sum of allocations to groups shall be neutral in respect to the history in the open fishery.
7. Permit holders may only be fishing groups for as long as they were in the open fishery. This will keep
an open fishery in place for the future and also allow those that have little or no fishing history to harvest
salmon in the open fishery.
This takes care of the investor issue.
8. The people that have been running the permits for those with medical transfers or for special
circumstances need to be compensated.
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 38 -
9. All long standing shore base processors must be given first right of refusal on the product harvested
in those regions throughout the state. When new regulations take place it’s important to give the
processor a chance to make needed adjustments to their business.
10. If permanent permit holder does not have significant history that justifies holding a permit, they
may have a one-time opportunity to sell their permit back to the majority (permit stacking or buy back
program) at fair market value. An independent appraisal would decide the sale price of permits in each
area based on recent permit sales and any changes to the salmon market that would normally effect the
price of permits between now and when the new regulation is put in place. There would be no
accommodation for interim use permits because they cannot be sold.
11. Allow regional or village Community Development Allocation (C.D.A.’s) programs to be
developed. Regional meaning all villages in that fishing region, and village meaning one village in that
region. They may purchase a permit holders I.F.A. which would in effect convert to a Community
Development Allocation.
12. Allow I.F.A.’s to be sold to people that have previous fishing history in that area. Those would
consist of existing permit holders, individuals that own tenders and crewman that have fished in the area
for a given length of time. There should be allocation caps imposed or restrictions of sort that would
lend to the needs of many as opposed to a few.
Name: Dean Anderson
Email: sierragale@ak.net
Address: PO Box 41, Chignik Lagoon, AK 99565
Phone: 907-840-2230
Fishery/Area: Chignik seine
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 39 -
Production
Title: On fleet reduction
Problem: In a nutshell: it will be impossible to “save” every participant in the salmon industry. There is
not enough money in the fishery to allow fishermen and past participants to exit gracefully.
Discussion: In 1992 the market capitalization of the major Alaska salmon permits (not including some
AYK set net permits and not including boats or gear) was on the order of $850 million. In 2000 the
same permits were valued at approximately $260 million. Today using asking prices of permits for sale
the current market cap of the state’s salmon permits is only about $160 million. (And you thought the
Nasdaq was performing poorly!) Any buyback or retirement programs created would need between $80
million and $425 million to remove half of the permits in the state – depending on what degree of permit
investment would be compensated. Fishermen are currently holding about 19 pennies for every dollar
they had in permits in 1992. Permit values are roughly proportional to earnings. Many single fishery
salmon boat values have followed suit. There is not enough money in the fisheries to have fishermen tax
themselves to reduce the fleets in a meaningful way. In some areas (PWS, Kodiak, Cook Inlet seine)
fleet attrition has largely kept up earnings for the remaining fleet despite lower prices and runs. In False
Pass, however, half the seine fleet is fishing for a third of 1992 average boat gross. In fact it is safe to
say that the Cook Inlet, False Pass, Bristol Bay and AYK fisheries are basically bankrupt. If we assume
that most fleets are entirely overcapitalized and there are too many permits to operate profitably given
current market and ocean conditions, then a massive subsidy of outside money would be required to
solve that single problem. Lost investments in boats and gear and what to do with displaced fishermen
from coastal communities, are additional, separate problems.
Recommendations: I do not believe that the fleet reduction and buyback legislation passed this year will
work. A bankrupt industry cannot tax itself out of this problem. There are simply not enough earnings in
many fisheries to do meaningful fleet reductions this way.
I used CFEC report “Permit Statistics for Alaska’s Limited Entry Salmon Fisheries: 1992-2001”. I
would like to see CFEC do these same numbers officially and also provide the amount of debt service
associated with limited entry salmon permits.
Name: Buck Laukitis
Email: zmagicfish@aol.com
Address: PO Box 33 False Pass, AK 99583
Phone 907-548-2210
Fishery/Area: False Pass setnet
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 40 -
Production
Title: On Efficiency
Problem: The task force needs to recommend that the Board of Fish, Department of Law, and
Legislature remain open to rather major harvesting restructuring proposals if these are brought forward
and supported by the majority of fishermen in a region – e.g. the Chignik co-op proposal.
Discussion: Chignik enjoys a unique situation. Other areas may want to put forth proposals for gear
changes to currently undefined or currently unallowed gear, or conversions to more efficient already
legal gears. For example, I would like to be able to convert my deep water set gill net site for a portion
of the season into a stationary lead and call it a fyke net or live holding pen. Live fish could be
delivered and several permit holders could cooperatively tend the site. I would expect the BOF to
deliberate such proposals with the help of the various agencies and make a decision after considering
public comments and the state’s conservation mandates. But too often we see no action on proposals
that could be beneficial to the industry, because the BOF considers too much to be outside of their
mandate. Hopefully, their willingness to “try something new” as they did for Chignik will continue, but
without a mandate to do so, a new board could see things differently and many needed changes will stall
out for year
Recommendations: It is essential that fishermen be allowed to form harvesting co-ops and to be able to
market their own fish. It is essential that fishermen always have a regulatory environment that allows
open and competitive markets for all of their fishery products.
Fishermen can either allow the processors to rationalize the fleet outside the BOF process, such as
happened this year in Southeast, or has happened in the northern herring fisheries, or they can try to
become proactive efficient harvesters through regulatory changes. Either way things will change
Name: Buck Laukitis
Email: zmagicfish@aol.com
Address: PO Box 33 False Pass, AK 99583
Phone 907-548-2210
Fishery/Area: False Pass setnet
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 41 -
Production
Title: Permit Retirement Proposal
Problem: When Limited Entry was initiated in 1975, existing laws and economic viability allowed for
the approximately a level of permits that was supposed to be viable for each fishery in the State. Since
that time, Federally-mandated subsistence rules have created new heavy user groups. Proposals under
Federal law are now being contemplated to allow sales of subsistence-caught fish (in other words, a new
commercial fishery). In addition, when permits were issued, this country had tariffs on imported
products to help protect U.S. producers from subsidized foreign fish products. Now, Federal policy
allows this country to be flooded with cheap subsidized fish protection for domestic commercial
fishermen.
Federal protection is being given to some industries: steel, farmers, and Maine farmed fish companies.
However, there is absolutely no help to Alaska wild salmon fishermen. The Federal government has
provided funds to various commercial boat and permit buyout programs. Yet, Alaskan wild salmon
fishermen are offered no Federal help, though many of the problems are largely within the control of the
Federal government to help solve.
Discussion: Using Area E as the example for the recommendations, the solution can be extrapolated for
any fishery: a fisherman 65 years old who fished for 25 years would be vested. The fisherman would
receive 25 years credit based on the median 25 year Federal retiree times a percentage of that Federal
retiree’s income. I’d like to set that percentage at 50%. Spousal survival rights should be included as in
the Federal system.
This would mitigate Federal policies that have damaged our fishery. It would reduce the number of
permits to allow a viable income for remaining fishermen. Older fishermen, many of whom have
invested a lifetime developing our fisheries, could retire with some dignity, and younger fishermen
would have a better opportunity for economic viability.
Under this program, the Federal government could decide if it wants just the permit to retire, or both the
boat and permit.
The program could be phased in over time, perhaps over 4 or 5 years.
Recommendations: Reduce the number of permits to whatever number the CFEC’s optimum number is).
The solution to a largely Federally-caused problem should be largely funded by the Federal government.
Rather than a straight Federally-funded buyout of boats and permits, I’d like to see a voluntary
retirement of older fishermen loosely based on the Federal civilian retirement system.
Fishermen 60 years or older would qualify if they have enough qualifying years fishing to reach the
vested interest stage, the same as Federal employees. This could be phased in, with the oldest having
first priority. In most cases, older fishermen are those that have the most invested in establishing and
building the fisheries (and often the most productive) so should be first in line for buyout options.
The median in the Federal (civilian) retirement value would be the base in figuring this retirement
program. Each year fished would add to the basis for retirement. Since we do not fish year around, the
fishermen would receive a percentage of the median Federal retirement program.
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 42 -
Name: Roger Bergquist
Email: c/o cdfu@ptialaska.net
Address: P.O. Box 2205, Cordova, AK 99574
Phone: 907.424.5155
Fishery/Area: Area E
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 43 -
Production
Title: CFEC -Optimum Number/Buyback
1. Establish an Optimum number of entry permits for all Alaska Salmon Seine, Gillnet, and Troll
Fisheries. (IE. Chatham Blackcod Fishery)
2. Initiate/Amend the existing Buy-Back program to retire excess Entry Permits for Alaska Salmon
Seine, Gillnet, and Troll Fisheries.
Problem: 1&2. The harvesting of salmon needs to be more efficient. In order to be more efficient we
need less harvesters.
Discussion: As a Southeast Salmon Seine Permit Holder I would like to see these two concepts put in
place.
1. The establishment of an optimum number will help the current economic hardships the industry is
facing.
2. The Buy-Back gives a harvester an additional opportunity to sell their permit and retire it from the
fishery.
Recommendations:
1.
a) State will initiate Optimum Number Study based on current economical, historical, and
biological information.
b) State will then establish the Optimum Number on those findings.
2.
a) State will Buy-Back permits to permanently retire that permit from that fishery.
b) State will Buy-Back permits at market value established by State.
Name: Jason Miller
Email: jmiller@mitkof.net
Address: PO Box 1473, Petersburg, AK 998
Phone: (907) 772-2988
Fishery/Area: Southeast Alaska
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 44 -
Production
Title: Alaska Wanton Waste laws and processor dumping.
Problem: Processors dump and waste millions of pounds of usable gurry and ground fish annually. Other
states have outlawed and limited dumping to encourage fuller utilization of the valuable waste stream to
encourage local economic development and to improve the marine environment. Alaskans complain
about tour ship waste, but some processors and hatcheries over saturate local marine environments and
create dead zones from their waste streams. Furthermore, farmed fish lobbies are now mentioning
processor and hatchery waste as an argument that our fish are not as pristine as we say they are.
Discussion: Our laws should encourage responsible and thorough utilization of plant discards and
processing waste for economic, wild salmon marketing and environmental reasons. Other states laws
like Oregon, Washington and the Atlantic seaboard should be reviewed and there should be a discussion
of the environmental problems that are occurring in many locations in Alaska (like Ketchikan and
Petersburg). The committee should also review the changes in EPA laws that seem to get stricter as time
marches forward. As a result the State should provide proactive incentives that encourage land and
floating processors to develop alternatives to dumping waste back into their local marine environment.
Seattle based processing companies do not have to live here and see waste steam management as a
“cost” and a governmental annoyance rather than a source of revenue production and job creation for
Alaskans.
Recommendations: That there be legislative and administrative mandates set forth to encourage full
utilization of the waste stream for processors and hatchery brood stock when a viable, land based
dumping alternative exists in a 100 mile road or vessel radius from the processing or hatchery facility.
In the lower 48 they truck waste literally hundreds of miles.
That the state encourage full waste utilization for processors by providing by reducing their fish tax by
one-half for fishermen delivering to companies that utilize 50% or more of their waste stream for
valuable fertilizer or hydrolisate. This will encourage fishermen to patronize companies that responsibly
protect the marine environment for a reduction in their fish tax and encourage full utilization of the
waste stream.
That up to a $50,000 corporate income tax credit be provided to companies either developing and fully
using their own waste recovery system or delivering to another waste recovery operation within a 100
mile road or vessel radius from their plant or floating processor operation.
Name: Duff Mitchell
Email: duff@alaskafoods.com
Address: Box 23000 Juneau, AK 99802
Phone: 907-790-2722
Fishery/Area: Southeast Alaska
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 45 -
Production
Title: Hatchery Price Setting at the detriment of dock prices and relationships with fishermen.
Problem: Most SE Hatcheries need high prices for their fish to pay off their loans and operational costs.
Many processors will pay double the per pound price to hatcheries than what they will pay to their seine
fishermen. Some will argue that this is fair since a guaranteed volume demands a better price. The
processor then receives a known volume from the hatchery, but then is able to low-ball the dock price to
fishermen in order to subsidize the payment to the hatchery. Fishermen lose clout and income because
they are now the ancillary and not the primary volume that the plant needs to operate. In essence the
fishermen subsidize the true price paid to hatcheries. This marriage of convenience between hatcheries
and processors not only lessens the dock price, it erodes the collective fishermen’s ability to get a better
dock price from all processors. Processors with hatchery contracts do not critically need the supply from
fishermen, therefore the demand and willingness to pay more is severely impacted, thus not only do you
have low prices, but you have trip limits and other restrictions placed on fleets. Small processors without
hatchery contracts are not willing to raise the price because they have hired and set up their operation for
a smaller volume. Because all major processors must have at least one hatchery bid to operate, there are
very little pure processor/players dependent on fishermen in the market. In essence, there is a defacto or
even unintentional systemic collusion to keep hatchery prices high and to keep fishermen prices low.
Discussion: The current system is flawed because it skews the onus and impact of the current system
onto the Alaskan fishermen and their dependent families. The State holds a gun to the hatchery to make
loan payments and the hatchery attempts to create a bidding war in pre-season to make as much money
as possible. The Economic model creates an environment where the processor will pay high prices to
hatcheries and then purchase fish off the fishermen to subsidize the overpayment to hatcheries. A perfect
model would have the fishermen only making slightly less than the hatcheries who can provide a larger
volume and opportunity for the processor. As it is right now, fishermen have no power in the equation to
extract higher prices. They are unwittingly subsidizing the hatchery and processor price scheme at the
detriment of their negotiating power and income.
Recommendations: That processors cannot pay seine fishermen less that 75% of what they pay the
highest and final price they pay to any hatchery in the same geographical area. This will keep processors
from overbidding hatchery fish and then posting lower prices for seine fishermen to subsidize their
overbid contracts. In addition, a 25% premium paid to the hatchery is fair for the volume that they
produce. Presently, hatcheries receive close to double or 100% greater price than seine fishermen. The
committee should review prices paid to hatcheries (and make these public!) versus what fishermen have
been paid for the last 5 years. It is shocking to see the disparity that has gone unchecked for too long.
This recommendation would preclude Processors from paying high prices to hatcheries at the detriment
of the regional fishermen. This change will also improve the relationship between processors who have
been cutting their fleet so they can concentrate on hatchery fish.
That a loan forgiveness program be initiated in tandem with the above so that hatcheries are not harmed
by the change in the economic model. Hatcheries cannot be blamed for wanting higher prices. Loan
forgiveness can have many criteria: production efficiency (cost per pound returned); community
dependence and job creation are just a couple of criteria recommendations. The intent of this is not to
put hatcheries out of business, but to improve the industry by leveling the playing field so that fishermen
are given a place at the bargaining table.
Name: Duff Mitchell
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 46 -
Email: duff@alaskafoods.com
Address: Box 23000 Juneau, AK 99802
Phone: (907) 790-2722
Fishery/Area: Southeast Seine and Gillnet fisheries
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 47 -
Production
Title: Bristol Bay drift permitholders support a buyback.
Problem: The Bristol Bay salmon drift net fishery faces a chronic economic downturn.
• There is overharvesting capacity in Bristol Bay.
• There are too many boats/permitholders fishing in shrinking fishing areas.
• 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.
• 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 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,
• Unregulated Bristol Bay sockeye interceptions in the North Aleutian Peninsula fishery, and
• Increased subsistence and sports demands have decreased the common property harvest during any
given season.
Discussion: AIFMA supports Alaska’s current Limited Entry Law. Under Limited Entry drift permit
holders 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 permit holder’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 widely supported by fishermen in Bristol Bay. AIFMA has twice surveyed all Bristol Bay
drift permit holders. During the winter of 1998 AIFMA surveyed nearly the 1,900 permit holders by
mail. Permit holders were asked what their level of support for a fishermen-funded buyback program, on
a scale of one to ten was. Those responding were very favorable to a buyback with an average vote of
“nine” on a scale of one to ten, with a “ten” being a vote of total support. During the winter of 2000 we
again surveyed 1,900 permit holders by mail. Ninety three percent of respondents supported a voluntary
permit reduction program. Forty nine percent of those responding stated they would consider selling
their permit under such a program.
CFEC Optimum Number Study: The Alaska Commercial Fisheries Entry Commission (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
Proposals Submitted to Joint Legislative Salmon Task Force September 17, 2002
Compiled by UFA
- 48 -
permits currently outstanding in the fishery, then the CFEC will be in position to defend a buyback
program
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 Fishing Capacity Reduction Program by selected as a
leading choice of buyback and consolidation options. (Overview of program is attached.) 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.
• 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
permit holder.
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, as in the Chignik cooperative. A
free and competitive market is essential for a strong economy statewide and for the communities of
Bristol Bay.
AIFMA is the largest fishermen’s association in Bristol Bay and has been in existence for over thirtyfive
years. Our mission is to protect the renewable salmon resource and promote economic sustainability
for commercial salmon permit holders in Bristol Bay.
We would like to offer any possible assistance to the Task Force’s efforts. Feel free to contact me, or
any of our Alaska Board members, for further information or input.
Name: David Harsila, President, AIFMA
Email: aifma1@seanet.com
Address: P.O. Box 60131, Seattle, WA 98160
Phone: (206) 542-3930
Fishery/Area: Bristol Bay Driftnet
Proposals Submitted to Joint Legislative Salmon Task Force September 13, 2002
Compiled by UFA
- 49 -
NMFS Fishing Capacity Reduction Program Review
Interim Final Buyback Rule Published in Federal Register on May 18, 2000
Review prepared by AIFMA, P.O. Box 60131, Seattle, WA 98160, (206) 542-3930, aifma1@seanet.com
NMFS published framework regulations for a fishing capacity reduction program in May of 2000.
AIFMA has prepared the following overview of this program.
A fishing capacity reduction program will pay harvesters in fisheries with too much harvesting capacity
to surrender their fishing permits and/or withdraw their vessels from fishing. Reduction costs can be
paid by post-reduction harvesters, taxpayers, or others.
The intent of reducing excess harvesting capacity in a fishery is to increase harvesting productivity and
help conserve and manage the fishery’s resources.
Terry Garcia, former assistant secretary of commerce for oceans and atmosphere and deputy
NOAA administrators states: “We are creating general guidelines that will allow the U.S.
fishing industry to voluntarily set an example of reducing excess fishing capacity in our waters.
Reducing extra fishing capacity:
Increases earnings,
Simplifies management, and
Improves conservation efforts.”
To provide for fishing capacity reduction, congress amended the Magnuson-Stevens Fishery
conservation and Management Act by adding a new section. To finance reduction costs, Congress
amended Title XI of the Merchant Marine Act, by adding new sections to portions applicable to capacity
reduction loans.
Under the Magnuson Act, A reduction program’s objective is: “to obtain the maximum
sustained reduction in fishing capacity at the least cost in the minimum period of time.”
Reduction costs can be funded in several ways:
1. A loan from the federal government,
2. Federal appropriations, and/or
3. Contributions from states or other public or private sources.
Federal Government Loan
A loan program cannot exceed $100 million,
Repayment maturity may be no longer than 20 years, and
The annual repayment interest rate is set at two percent of the principal amount outstanding plus the
interest rate the Federal government is obligated to pay the U.S. Treasury for borrowing the money
that they in turn loan to the fishermen.
The loans involve no promissory notes, mortgages, or other contractual loan documentation or
security.
Fishers remaining in the fishery will repay the loan through a loan-repayment fee deducted by the
first ex-vessel purchaser. Such fees cannot exceed five percent of the ex-vessel value of all fish that
the harvesters deliver.
Proposals Submitted to Joint Legislative Salmon Task Force September 13, 2002
Compiled by UFA
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Referendum -- Fees for a reduction program must be voted on by permit holders in a fishery. Two
thirds of the votes cast in a referendum of the fishing permit owners in the proposed reduction
fishery must first approve the fee system.
The Magnuson Act requires that a reduction program:
Be cost-effective and capable of repaying any debt obligations,
Be necessary to prevent or end overfishing, rebuild stocks of fish, or achieve measurable and
significant improvements in the conservation and management of the reduction fishery1; and
Be consistent with the Federal or state fishery management plan in effect.
The Magnuson Act also requires that the management program in effect for the reduction program
fishery:
Prevent the replacement of capacity that the reduction program removes through a moratorium on
new entrants, restrictions on vessel upgrades, and other effort control measures (taking into account
the reduction fishery's full potential fishing capacity); and
Establish a specified or target total allowable catch or other measures that trigger closure of the
reduction fishery or adjustments to reduce catch when fisheries conservation and management so
require. These requirements (and other reduction program aspects, such as post-reduction allocation)
generally require an amendment to the controlling management program. The Bristol Bay fishery is
already managed under such and changes to regulations may not be necessary.
By Governor’s Request
The Governor of the State of Alaska must make a request for a reduction program before the reduction
program can begin. The Governor must hold a public hearing on his request before sending the request
to the Federal government.
For each reduction program the NMFS will prepare a program plan for adoption and propose program
regulations, and after 60-days opportunity for public comment, issue final program regulations and
adopt (subject to approval of a referendum in a financed program) a final program plan.
Pre-Referendum Activities
Inviting bids,
Bidding,
Receiving the bids, and
Accepting, subject to a subsequent referendum approving the fee system, those bids meeting the
criteria for bid acceptance.
1 Excerpt from e-mail (9/27/00) from Michael Grable, Cehief, 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.”
Proposals Submitted to Joint Legislative Salmon Task Force September 13, 2002
Compiled by UFA
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Financed Program – Business Plan2
A program financed by the Federal government requires the Governor to submit a final business plan
with the request for a reduction program. A business plan is a complex undertaking.
A business plan must specify:
How the potential post-reduction harvesters propose that the NMFS accomplish reduction,
The minimum amount capacity that must be reduced,
The maximum reduction cost the harvesters are willing, in the form of a loan, to repay.
The plan must also justify the proposed reduction program by demonstrating:
The program’s cost effectiveness,
How it will enable post-reduction earnings sufficient to repay the loan, and
The likelihood both that the required amount of capacity can be reduced at the reduction cost
proposed and that a subsequent referendum will approve the industry fee system required to repay
the loan.
A business plan must also propose specific provisions for all other technical aspects of the reduction
program as listed in the NMFS proposed reduction program plan.
A business plan not broadly supported by harvesters in Bristol Bay would have little chance of
producing a successful referendum. The NMFS plan state that business planners must, consequently, be
responsive to the practical necessity that their business plan reflects fairly the needs of most harvesters
in Bristol Bay. Business planners should conduct surveys designed to ascertain needs and extensively
coordinate business plan preparation with all affected harvesters.3
Until the NMFS invites bids, receives them, and decides which ones to accept, no one really knows how
much capacity can be reduced for what cost.
For a financed program a final implementation plan involving industry fees or debt obligation is
prohibited unless an industry fee system has been approved by a referendum. In order to make an
informed decision, the referendum voters must know how much capacity will be reduced and how much
that reduction will cost. So bids are invited, received and accepted before the referendum is conducted.
The bid process cannot be conducted without knowing what the final program plan will be and without
having the program regulations governing the bidding process in effect.
The NMFS has established proposed framework procedures that would allow the NMFS to determine
the amount of reduction and the cost of such reduction and to disseminate that information to the fee
referendum voters before they vote, while complying with the statutory prohibition against adopting a
final program plan before the industry approves, by referendum, the fee system needed to repay the loan.
Under framework rules, NMFS would not conduct a referendum on the fee system until NMFS first:
Approves a reduction amendment,
2 Excerpt from e-mail from Shawn Barry, NMFS, (8/28/02)
“…the Saltanstall Kennedy (SK) grant program considers grant proposals to finance the cost of business planning and
surveys as a priority. For more about SK, contact Alicia Jarboe at 301-713-2358, ext. 199. Further, the Senate version of the
Magnuson Stevens Act reauthorization contains provisions that will simplify and speed up the buyback process.”
3 Note: The Alaska Commercial Fisheries Entry Commission is in the process of conducting an Optimum Number Survey for
the Bristol Bay fishery. Preliminary results of the survey should be available in the fall of 2002. Final results are expected
during the summer