Public Questions Background Reports
Please print and read the following report before answering the
public question. The Subcommittees of the Alaska Salmon
Industry Task Force appreciates you taking the time to share your thoughts
on these topics.
Quality Subcommittee Report
The Quality Subcommittee of the Alaska Salmon Industry Task Force has
been charged with looking into ways to improve the quality of Alaska’s
wild salmon. In order for Alaska to be competitive in this global
market, we must improve the quality of our salmon. Survey after survey
has shown that the quality of the product is one of the most important,
if not the most, important factor consumer’s use when choosing which
product to buy. Although, there were many items that the subcommittee
discussed in relation to quality, they felt the three major areas were
best practices, education, and cost/benefit. The Salmon Industry Task
Force developed four key questions based on our work.
1. A) What does the Alaska salmon industry need to achieve a higher
quality product?
B) Should chilling at point of harvest of commercially harvested salmon be
mandatory statewide?
Quality of Product: The subcommittee discussed items such as;
chilling, handling practices, infrastructure improvements, time lines
for delivery and processing, bag limits, vessel inspections, and
processor/tender requirements. In addition, the subcommittee discussed
the possibility of making these standards region specific. They
recognized the fact that what may work for region, may not necessarily
work for another.
The subcommittee heard presentations from experts in the field and
the common theme among them was that chilling is by far the most
important factor in improving the quality of our salmon. The
subcommittee discussed the use of slush bags and the possibility of
placing ice barges on the fishing grounds. Understanding that there
would be a cost associated with chilling standards, the subcommittee
discussed the possibility of an industry assessment and/or low interest
loans.
2. Should the state be involved in creating a
quality standard, state quality seal, and a state quality commission?
Best Practices: The subcommittee discussed the value of state
involvement in creating quality standards, and the state providing some
sort of “quality” seal that would be similar to the “Good Housekeeping
Seal of Approval”, for those individuals who do comply. In addition,
the subcommittee discussed the establishment of a State Quality
Commission to implement the standards.
3. Should the state have a quality education program for industry
participants?
Education: Another issue that the
subcommittee felt was very important is education. If the state is
going to move towards implementing “best practices”, should the state
have a quality education program for industry participants? The
subcommittee discussed the importance of providing education to the
fishermen, processors, distributors, and retailers to ensure quality
product all the way to the end user.
4. What incentives do you need to improve the quality of your
harvested and/or processed salmon?
Cost/Benefit: The subcommittee realizes
that there needs to be some sort of incentive or benefit for complying.
The subcommittee discussed incentives such as creating an “A” list for
those that comply and giving their fish preference over other fish,
and/or paying more for higher quality fish, and less for lower quality
fish.
Marketing Subcommittee Report
The Marketing Subcommittee of the Alaska Salmon Industry
Task Force has been charged with addressing the opportunities and
impediments to making wild Alaska salmon more competitive in domestic
and global markets. In order for Alaska salmon to compete in the world
market, regain lost position, and have a better economic return for the
industry and state, an examination of what factors have contributed to
our present situation were examined by the subcommittee.
Presentations were given by Laura Fleming, Alaska Seafood Marketing
Institute (ASMI); Greg Wolf, Division of International Trade and Market
Development (ITMD); and, Pat Shanahan and Dale Kelley on the Troll King
Program. An overview of ASMI’s history, funding sources, promotions and
public relation activities put the state’s marketing/promotion efforts
in perspective for the subcommittee. The ITMD representative stated half
of all Alaska’s exports are seafood and that they are largely involved
with fresh and frozen product. Additionally, the Marketing Subcommittee
received presentations from Chris McDowell, ASMI Salmon Market
Information Service; Terry Gardiner, NorQuest Seafoods; and, Mark
Hermann, UAF Department of Economics, on the history of the salmon
industry, its present market status worldwide, and its future view. The
dramatic expansion of farmed salmon has reduced seafood prices and
redesigned the market place with new products and attributes. The strong
US dollar has allowed lower cost seafood to enter the US market and
compete while our seafood export prices have been decreased by the weak
buying power of overseas customers. Market experts consistently hold the
belief that competition from farmed salmon is perhaps our biggest
difficulty and that the Alaska salmon industry is overcapitalized. As a
result of all the hours of discussion and information presentation, the
following questions were developed for public consideration and comment.
1. Do we use existing state salmon promotional entities
or do we change the entities? If changed, what changes should be made?
(e.g. ASMI; Division of International Trade & Market Development, other)
Promotion: The broad question of who should be
marketing Alaska’s salmon was widely discussed. This discussion entailed
a description of ASMI’s statutory structure and the limitations imposed
upon ASMI through its enabling legislation.
ASMI was established twenty-one years ago as a partnership of the public
and private sectors. Its purpose is to further the goal of fostering a
stable seafood industry in Alaska through promotion of Alaska seafood
products, education, and research. Its structure and duties are detailed
in Alaska Statute 16.51. The governor appoints the 25-member board of
directors: 12 seafood harvesters, 12 processors (including 4 small
processors) and one layperson.
ASMI promotes all species of Alaska seafood, with salmon as the lead,
under the “Alaska” brand. The brand is widely used in retail and
foodservice sectors in the U.S. and overseas. (Alaska-branded fish and
seafood rank 3rd on menus of the nation’s top 500 restaurant chains.)
ASMI also conducts market research in the U.S. and overseas, and
operates a quality assurance program with training and materials
available for every link in the chain from harvest to plate, including
harvesters, processing workers, shippers, retailers, and foodservice
operators.
AS 16.51.110, relating to prohibited promotions, reads, “ASMI may not
promote or make a contract that promotes seafood by (1) geographic
origin other than from the state generally; (2) geographic region of the
state; or (3) specified brand name.” However ASMI may provide
literature, research, and information resources to regional branding
efforts and private companies that are available to all industry
members.
2. Who or what entity or entities should be paying for
the promotion and/or marketing of Alaska’s wild salmon? (e.g. salmon
harvesters, processors, federal government/USDA; state general fund; other
federal funds; other sources)
Funding: ASMI is funded through taxes on the
seafood industry: a seafood marketing assessment paid by Alaska seafood
processors (.3% of the value of the seafood they purchase) and a 1%
salmon marketing assessment paid by Alaska commercial salmon harvesters.
The 22nd Legislature changed the rule to allow ASMI to use the 1%
harvester’s assessment in either the foreign or domestic market. The
last general fund contribution from the state was in FY 97. The USDA
Market Access Program federally funds the export marketing activities of
ASMI, with a 22% match from the processor portion of ASMI revenue. The
USDA funds are spent in specific export markets according to federal
guidelines. Salmon fishermen and Alaska seafood processors fund domestic
marketing activities for salmon. The downturn in salmon revenue the last
couple of years has been partially offset during the last couple of
years by a grant from the Economic Development Administration, matched
equally by the salmon marketing tax. In the current fiscal year, FY 03,
ASMI is having difficulty coming up with the matching dollars, and grant
funds are in jeopardy. ASMI anticipates a 40% drop in its funding
between FY 00 and FY 04, based on current projections. The 1% salmon tax
and .3% processor tax contributed about equally to the ASMI budget in FY
00, however the value of the 1% salmon marketing tax revenue is expected
to decline 69% by FY 04, when the total budget for all ASMI operations
is expected to decline to $6.4 million (includes $2.4 million federal
funds that must go to export marketing).
3. Should the state help individual fishermen promote
and market their wild salmon? If so, how?
The subcommittee also discussed how closely quality is
tied to promotion and marketing success. The Quality Subcommittee
developed the questions for quality but the Marketing Subcommittee did
not believe it could have a successful discussion on marketing and
production apart from addressing the quality issue. It concluded that
the quality of our salmon must be improved.
Production Subcommittee Report
The Production Subcommittee of the Alaska Salmon Industry
Task Force has been charged with looking into ways to help the harvesting
and processing sectors of the salmon industry. In order to examine how the
salmon industry might operate more cost effectively, the subcommittee
gathered information for review from fishermen, processors and the
state/federal government. The subcommittee considered the needs of
fishermen and processors separately and covered topics affecting both
sectors. After hearing a report from the subcommittee, the Task Force
framed the following questions for public consideration and comment:
1. How can we remove or reduce costs from the
harvesting sector in a way that allows regional self-determination?
Harvesting/Fleet Reduction: The subcommittee discussed
fleet reduction with the goal of giving fishermen tools they can use in
their fishery to help them remain/become economically viable into the
future. To the greatest extent possible, the subcommittee felt that
fishermen should have regional self-determination in shaping the future of
their fishery. The subcommittee developed two specific proposals: permit
stacking incentives and fractional entry permits as a way to start the
public discussion on fleet reduction. The subcommittee did not intend to
limit public comment to these two proposals, but wanted to highlight them
for public discussion. The subcommittee also discussed fishermen
cooperatives as a way to restore economic health in fisheries. One example
of how a cooperative for fishermen might be organized would be to gather a
certain number of vessels together that would pool their harvests for
either direct marketing or for custom processing. The subcommittee did not
have extensive discussion of a ‘Chignik’ style cooperative, as the jury is
still literally out as to whether or not that style of cooperative is
legal. The Task Force asked the subcommittee to look into a ‘white paper’
addressing the question of whether or not fish farming would be
economically viable in Alaska. The subcommittee is not addressing whether
or not to allow fish farms in Alaska, but looking into whether or not it
would even be economically viable in our state considering we are 20 years
behind the rest of the world in this area.
2. How can we remove or reduce costs and aid the
processing sector?
Processor: The subcommittee also discussed ways to
reduce costs at the processing level. The topics discussed included
escalating insurance costs; state raw fish taxes as they apply to all
industry segments; deductibility of worker food and housing costs; EPA/DEC
and seafood waste water discharge; reduction of fresh seafood air freight
costs; employment tax credits; and, hatcheries.
3. In addition to the removal or reduction of costs,
are there statutory/regulatory changes that can help the harvesters and/or
the processors?
Harvesters/Processors: During the discussions of the subcommittee
particular statutory and regulatory issues were raised.
Finance Subcommittee Report
The Finance Subcommittee of the Alaska Salmon Industry Task Force has
been charged with evaluating the State’s financial structure that
supports its salmon fisheries and to make recommendations for positive
change. In order to frame questions for the public, the subcommittee
received presentations from several state agencies regarding the current
tax regime for the industry; the status of the state loan program for
commercial fishermen and hatcheries; and, past legislative finance
measures designed to assist the salmon industry. In reviewing the
history of fisheries tax and loan structures, the Subcommittee is
examining what might be done legislatively to offer programs better
geared to the salmon industry of today. Involved in these discussions
was the concept of permit retirement and “repatriation” (access to and
utilization of permits by Alaska residents) through loan retirement. The
subcommittee categorized the information and discussion into three major
areas: Taxes, Loans/Financing, and Permit Retirement. The Salmon
Industry Task Force developed three key questions based on our work.
1. Are there better ways in which the state can use existing fishing
industry taxes to assist the salmon industry?
Taxes: This discussion included streamlining security
requirements for processors; incentives for processors capitalizing
value-added processing equipment and new product development; raw fish
taxes; and, the seafood marketing and enhancement assessments.
2. Do current State of Alaska loan practices address the needs of
the salmon industry? If not, what changes would you suggest?
Loans/Financing: This discussion included forgiveness of state
loans for commercial fishermen; refinancing/restructuring of state loans
for commercial fishermen; permit “repatriation” through financing
structure; value-added incentive loans; and, permit consolidation.
3. Should the State of Alaska provide for the permanent retirement
of limited entry permits in your fishery? If salmon limited entry permits
were retired in your fishery, what incentives would you suggest for
retirement? If funding is needed, who should pay?
Permit Retirement: This discussion involved incentives for
permit retirement that may or may not be tied to state loans.
Governance Subcommittee Report
The Governance Subcommittee of the Alaska Salmon Industry Task Force
has been directed to review several industry issues that cross two or more
of the other subcommittees focus areas - hatcheries, education and agency
regulatory oversight. The governance subcommittee will consider whether or
not to recommend the creation of an Alaska Seafood Commission and will
seek to address community economic development and social concerns. Pubic
comments may result in additional items being considered by the Governance
subcommittee. In addition, the Governance subcommittee has formed three
focus groups to address the hatchery, education and regulatory oversight
issues. After hearing a report from the subcommittee, the Task Force
framed the following questions for public consideration and comment:
Hatcheries
Use and management of salmon hatcheries will play an important role in the
future of Alaska’s wild salmon industry. Public comment regarding Alaska’s
hatcheries should be directed toward the mission of the Salmon Industry
Task Force - to evaluate statutory framework for hatcheries and to review
current industry practices. The task force’s question regarding hatcheries
seeks input on suggested changes to the statutory framework, current
industry practices, and addresses the overarching concern about Alaska’s
lack of a hatchery development/management policy.
1. Would you support legislative development of a State of Alaska
hatchery policy and/or performance standards for hatcheries, and/or
changes to the state’s relationship with all hatchery owners?
Education
There are several distinct educational issues that arise when
considering the future of Alaska’s salmon industry. The Task Force
understands the importance of encouraging Alaskans to participate in the
salmon industry and to inform Alaskans, especially young residents, about
the importance of the salmon industry to the State’s economy. In addition,
as the industry changes, there will be re-education needs. A changing
salmon industry will have current and ongoing research needs and the
retention of post-graduate expertise in the operations and management of
the industry. The Task Force’s questions regarding education solicit
comment on both the role of education for the industry as well as whether
or not our university system is meeting industry needs.
1. What role should the State play in providing fisheries education
(K-12, post-secondary, and voc/tech) in order to promote Alaskans in the
fishing and seafood industry?
2. Does Alaska’s university system adequately meet the research and post
secondary educational needs of the Alaska salmon industry? If not, what
changes would you suggest?
3. If you are displaced by changes in the salmon industry, what could the
state do to provide retraining and/or alternative employment?
Agency Oversight
Numerous state statutes and regulations directly or indirectly impact
Alaska’s salmon industry. The Task Force is interested in information
regarding statutes and regulations that, if changed or modified, would
benefit the salmon fishery. Most salmon industry stakeholders have
experience with the Alaska Board of Fisheries; however, Board of Fish
decisions are outside the scope of the Alaska Salmon Industry Task Force.
Nevertheless, the Task Force is interested in stakeholder support for our
current Board of Fish process; changes that might be implemented and
whether or not stakeholder concerns about the Board of Fisheries merit an
issue specific task force to review our Board of Fisheries system. Again,
responses to these Board of Fisheries question should be focused on Board
process and not Board decisions.
1. Apart from the Board of Fish decisions, are there other state
agency regulations that could be changed to benefit Alaska’s salmon
industry?
2. Do you support Alaska’s board of fish process? If changes are
necessary, what would you suggest?
3. Do you support a task force created by the legislature to review the
Alaska Board of Fish?
Seafood Commission
Two final questions from the Governance Sub-Committee seek both opinion
and information. In 1986 the Alaska Legislature developed the Alaska
Minerals Commission. The minerals commission is composed of industry
representatives and provides annual recommendations to the legislature. A
parallel Alaska Seafood Commission may be able to continue the work of the
Alaska Salmon Industry Task Force and annually advise the Legislature.
1. Should the State of Alaska develop an Alaska Seafood Commission
to annually advise the legislature on the needs of the seafood industry?
Economic Development
Ongoing changes in the salmon industry will impact coastal communities.
The Task Force is interested in impacts that stakeholders can anticipate
and identify with the goal of trying to address community needs.
1. As Alaska’s salmon industry changes, what are the economic
development issues, community and individual concerns that should be
addressed by the State Legislature?
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