Alaska’s biggest home port, Seattle/Joe Mabel, Wikimedia Commons
News Analysis
The United Fishermen of Alaska (UFA) has issued its annual report on who got the fish of the 49th state, and the winner is?
Outside fishing interests.
Of the 6.4 billion pounds of seafood harvested in Alaska in 2017, UFA’s 2018 Alaska Commercial Fishing and Seafood Processing report lists 4.6 billion pounds – almost two-thirds – harvested by permit holders from Washington, Oregon or California.
Alaska became a state in large part to break the chokehold Seattle-based interests held on state fisheries. The late George Rogers, a Juneau economist and consultant to the Alaska Constitutional Convention in a recorded history at 360North.org noted the resentment Alaskans of an earlier time held toward Outside fishing interests and the fish traps they operated.
“The fish trap…is looked upon by most Alaskans as the dipper with which the large absentee owner appeared to skim with relative ease the cream of one of the region’s most valuable natural resources and then carried away to the outside the fullest part of the wealth so guarded,” he said. “That’s pretty poetic.”
The poetry killed the trap, though Rogers noted traps were the ideal way to harvest salmon.
“…It was the only way that salmon should have been harvested because the fish worked out to the runs,” he said. “You could manage. You knew what was coming and going. You could control the escapement of the fish. You could then control the harvest. You didn’t have to chase mobile gear all over the place. And it was just perfect, but the trouble with the fish trap was that it was owned by the processors, the canners, and they were all Outside interests.”
With Statehood, the traps disappeared, but somehow the Outside interests hung onto the fisheries.
Statehood failure
Oil made Alaska after Statehood, and Alaskans were lucky for it because the idea they were going to take back the fisheries clearly failed as the situation circa 2018 underlines:
- “Washington residents who fished an AK commercial fishing permit: 1,526,” the UFA report says.
- “Washington resident AK commercial crew-member license holders: 5,181.
- “Washington resident permit holders who fished plus crew: 6,707.
- “Alaska commercial fishing vessels registered to Washington owners: 1,713.
- “Alaska fisheries ex-vessel earnings by Washington-based permit holders: $873 million.
- “Estimated harvest by Washington-based permit holders: 3.9 billion pounds.”
Take that $873 million, divide it by the 1,526 Washington residents who fished an Alaska permit, and you get a number almost too big to believe: $572,083.
Compare that to the Kenai Peninsula Borough where 1,101 of 1,422 permit holders who actually fished were reported to have collected an ex-vessel value of $98.8 million for their catch.
That works out to $89,736 per permit. It appears in line with other Alaska communities.
Two-hundred-eight-six of 323 Cordova permit holders fished and collected $25.1 million or about $77,709 per permit. The 475 of 597 permits fished by Alaskans who call Fairbanks home brought in $66.6 million or about $140,210 per permit fished.
The 617 of 688 permits fished by residents of the Kusilvak Census Area, a huge swath of Western Alaska north of Bethel, earned $5.1 million or $8,266 per permit fished. The 301 of 386 permits fished by residents of the Matanuska-Susitna Borough produced $19.4 million or about $64,452 per permit fished.
The highliners – the go-getter fishermen who earn the big bucks – appear to have decamped for the Lower 48 shortly thereafter. Along with the Washington permit-holders netting large revenue, the UFA reports shows an average $409,638 in ex-vessel value for the 332 permits fished by Oregon residents.
Outside stakeholders
The southward shift of successful fishermen has long been known to the fishing community. Gunnar Knapp, a former director of ISER and an authority on Alaska fishery economics, in a 2010 report on Alaska’s permit system observed that “in general, the more profitable a limited entry fishery, the greater the share of permits that will be owned by non-local residents.”
If that’s the criteria, he said, “we might hold those (Bristol Bay) meetings in Seattle.”
The Environmental Protection Agency (EPA) actually did that. In 2012, it met in Seattle to give Bristol Bay fishery “stakeholders” a better opportunity to comment on plans for the Pebble Mine about 1,500 miles to the northwest. That’s a distance greater than from Seattle to Minneapolis.
But Seattle sort of considers Alaska a suburb.
“Among them is Ben Blakey, who runs a gill netter out of Seattle. He’s worried that the Pebble Mine would destroy the largest sockeye salmon fishery in the world – and the livelihood of nearly a thousand commercial fishermen like him.”
The hearing was reported to be standing room only and overwhelmingly opposed to any mining in the 49th state. The financial interest of Washington-state fishermen is in the non-development of Alaska, not the development.
UFA is the state’s biggest commercial fishing interest group. Its biggest business supporters are Seattle-based commercial fishing interests. Its annual report and “community fact sheets” are intended to help commercial fishermen make the case for commercial fishing in the state.
“As Alaska’s largest private-sector employer, commercial fishing and seafood processing is a vital component of the Alaska and U.S. economies,” the 2018 report says. UFA claims “64,000 direct jobs in Alaska,” although how that figure was arrived at is unclear.
The report says 24,863 of those jobs are in processing, but the footnote on the claim is from a state Department of Labor website that lists the annual monthly average employment at 8,273. The larger number is the peak employment.
More than 70 percent of the processing workers were reported to be non-residents, according to the Labor data. They earned an average $16,628 for their work in Alaska before they left.
Alaska benefits
Though a lot of fishery money flows south, a lot of Alaskans also benefit from the state’s commercial fisheries.
Nearly two-thirds of the fishery poundage in the state is linked to two booming, fishing-dominated communities – Dutch Harbor and Kodiak. Nearly 85 percent the state’s poundage comes ashore in four areas – the two previously mentioned communities plus Bristol Bay and the Lake and Peninsula Borough.
How much of the revenue generated by the fisheries stays in the latter two areas is a question mark. A University of Alaska study concluded the Bristol Bay region had lost 50 percent of its local permits.
Most of the people who fish there now pocket their money and leave after a few intense weeks of activity in summer. Processors, meanwhile, struggle to find people willing to come to the remote region to work for the short salmon season.
Those temporary workers, like most of the fishermen, take their money – what there is of it – and leave before the end of summer. It doesn’t make for the sort of robust economy that has developed in Norway where year-round jobs now cluster around fish farms and associated processors.
Fish farm production in Norway, Chile, Canada, Scotland, and elsewhere has grown steadily over the decades – it now accounts for more than seven out of every 10 salmon sold globally – because the economic model is more stable.
Alaska was the first U.S. state to ban salmon farming, but then invested heavily in salmon ranching – a similar but different form of aquaculture. Instead of holding fish in pens until they are big enough to eat, ranchers use hatchery facilities to grow fish only big enough to go to sea.
The little salmon are then released, and everyone crosses their fingers in hopes of a good return of bigger salmon to be netted by commercial fishermen in the traditional way as if the fish were wholly wild.
Rosy picture
The UFA is an organization dedicated to maintaining commercial fishing industry control of the state’s fisheries. It emphasizes commercial fishing industry jobs in Alaska, and the noble nature of individual fishermen.
Its “key statistics” point out that “8,988 permit holders fished in 2017 – 6,274 resident (69.8 percent), and 2,714 non-residents,” and “21,671 commercial crew licenses (were) purchased in 2017 – 10,710 resident, 10,534 non-res.”
The percentages – 50.6 percent resident, 49.4 non-resident – are not listed for crew.
How the revenues are split between residents and non-residents was not reported, either. But it’s clear the 30 percent of non-resident permit holders get more than 30 percent of the money pie.
UFA’s “key statistics,” list an “Alaska total seafood export value (of) $3.27 billion” on which the state, local and federal governments collected $245 million in taxes and fees.
The state share is about $70 million. About a third of that is what an exhaustive, 2015 study of state fisheries, mining and tourism taxes described as “pass-through taxes.”
By the time the state distributes money to the municipalities and pays the costs of managing, policing, enhancing and promoting the fisheries, the report concluded, the state is close to $27 million in the red.
“This report is not an economic cost-benefit analysis of fisheries management by the state,” authors Bob Loeffler and Steve Colt added. “Many Alaskans may think about resource taxes by considering the oil
industry.
“Thinking of the two in the same terms confuses the discussion. The industry return on investment, level of profit, and management costs are
fundamentally different. Further, the State of Alaska has different taxing and management objectives for the commercial fishing industry than it has for other industries.
“For oil, the state’s objective is arguably to maximize long-term revenue.
For fish, the objective appears to be to maximize employment, fishing incomes, community health, and other social objectives. Indeed, the state restricts efficiencies in the fishing industry by prohibiting boats or nets above a certain size. The goal of these restrictions appears to be to increase employment.”
Loeffler and Colt made no attempt to determine how big of a subsidy the state provides the Outside interests making the most money off the state’s fish. They did note that the finding of state losses on commercial fisheries is nothing new.
‘The Legislative Research Agency’s report for fiscal year ’94 found that commercial fishing revenue was 70 percent of expenditures including federal funds,” they wrote. ”If one revises the report’s calculations to eliminate federal funds, the agency found that revenue was 64 percent of expenditures. These conclusions are similar to those of this report. There were a few differences in methodology, but the overall approach was very similar.”
The ISER report did not address the cost of managing non-commercial fisheries in Alaska where there are also subsistence, personal-use and sport fisheries. The management of the latter is almost wholly financed by federal taxes on fishing gear and revenues from the sale of state fishing licenses.
The state collected almost $23 million in fees for sportfishing licenses and stamps in fiscal year 2017, according to Fish and Game figures. About $18.4 million, or 80 percent, came from non-residents.
Some of those tourist fishermen ship salmon home, which irks Alaskans who see coolers being dragged through the Ted Stevens International Airport in Anchorage. The commercial fishing industry ships more than 100 times as much fish south unseen.
The vast majority of salmon caught in Alaska leave to be eaten elsewhere. UFA sees that as a good.
“Virtually every U.S. state benefits from commercial fishing in Alaska!” it trumpets.
That might be good for other U.S. states and for the UFA, but what would seem to be best for the state of Alaska is to manage the fish to ensure the extraction of the greatest profit per pound from the resource before it is gone forever.
That, for some reason, has never been a state management goal. Or at least it hasn’t been a management goal since the state outlawed fish traps and declared victory in the effort to break the chokehold of Seattle-based processors.
And yet, almost 60 years later, pretty much the same interests control state fisheries as in the 1950s.
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