The state of prices in the state’s most valuable salmon fishery/ADF&G data

The costs of social engineering salmon harvests

Part II of II

To begin to understand how Alaska has so devalued salmon – once one of the state’s most valuable resources – one must return to the socially well-intentioned leaders of a state born at the end of the 1950s with the U.S. only beginning to embrace major technological changes.

Color TV was then just arriving on the scene with a reported 98 percent of Americans lucky enough to own a TV still watching on black and white.  In the nation’s offices, people were still typing on mechanical typewriters. The IBM Selectric, an electric device, was about to be introduced the next year, but it would take it and the electronic typewriters that followed almost a decade to become the norm.

Computers had moved beyond theory into reality, but you had to know a computer language – primarily Fortran or Cobol – to communicate with the behemoth machines of the day. The state-of-the-art IBM 7094 powering the fledgling American space program was so big that IBM warned that “a structural engineer should be consulted to ensure that the floor in an installation is capable of supporting the system layout.”

Any sort of computer one could pick up and carry was still a dream. The laptop computer was a fantasy, an iPad an idea for science fiction, and a watch on your wrist with which you could communicate nonsense reserved for the Dick Tracy comic strip.

It would have been hard for anyone in those days to imagine a giant, salmon farming industry built on feeding fish in pens like cattle in feedlots.

As late as 1963, in fact, Norway’s Institute of Marine Research was on record with the opinion that “fish farming is being advocated by fanatics who want to create an industry that doesn’t have the ability to survive,” according to history at Norwegian fish distributor Seaborn.

Salmon at this time came almost solely from the waters of the North Pacific Ocean where production was largely controlled by Japan, Alaska and the now-gone Union of Soviet Socialist Republics (USSR). The records of the North Pacific Anadromous Fish Commission (NPAFC) reflect that in 1960, these three entities accounted for about 90 percent of the Pacific harvest.

The Japanese – who pioneered open-ocean salmon farming shortly after World War II  – were then the biggest players in the game. But nearly all of their harvest was consumed in Japan, leaving the global market largely to Alaska and the USSR.

Norwegians had begun experimenting with raising salmon in net pens like feed-lot cattle, but there was no global, salmon farming industry. None. There were only the “fanatics” chasing an idea.

Sadly for Alaska, they would turn out to be a lot like the Apple computer fanatics of 1980 who predicted computers would one day replace typewriters and then spread into all aspects of life. Apple boldly underlined the historical reality that one should never bet against tech.

It might not change things immediately, but it has always changed things. As Microsoft co-founder Bill Gates once observed people “always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.”

With farmed salmon, the underestimation lasted for more like 20 years, but then the industry exploded to life and just kept growing and growing and growing. Today the production of net-pen-farmed, Atlantic salmon in Norway alone dwarfs the catches of wild and hatchery-produced salmon from Alaska, Russia (formerly the USSR) and Japan combined.

And net-pen salmon farming has spread from Norway at the northern end of the planet to Chile and New Zealand at the southern end, in the process becoming a big, big business.

Norway-based Mowi, the world’s largest salmon farming company, just reported 2024 annual revenues of 5.62 billion Euros ($5.88 billion) on a 2024 record volume of 502,000 tons (1.12 billion pounds) of salmon. Headquartered in Norway, Mowi now has farms in Scotland, Canada, the Faroe Islands, Ireland and Chile.

This is one company on its own producing about 20 percent more salmon by poundage than Alaska’s 2023 harvest of 919.7 million pounds, which just happened to be the third-largest catch in state history. 

Loss of control

Alaska was once at war with these farmers.

As the 20th Century drew to a close, Alaska tried to sell the world the idea that Alaska wild-caught salmon was tastier and healthier than any farmed fish. This pitch is still heard, but it holds about as much water today as France’s claim to dominance of “fine wine.”

The farmers managed to produce a fish that tasted as good, some declared better, than that caught in Alaska and bring it to market at a lower price. The farmers won the war, and as a result, approximately three out of every four salmon consumed around the world today are farmed fish of which Alaska produces none.

This change played a big role in making Alaska pay the price for decades of well-intentioned social engineering aimed at mandating inefficiency in state salmon harvests in the name of job creation.

In fairness to Alaska politicians now largely gone and buried, it was admittedly impossible to see this future coming back in the 1950s, ’60s, ’70s and into the early ’80s. Back then, salmon fattened on the pastures of the North Pacific looked like they would dominate the world market forever.

In the ’70s and ’80s, Alaska salmon were cash cows just as newspapers were then cash cows. And everything appeared to point to Alaska and the USSR enjoying a global market largely free from serious competition forever. This promised control of a perpetual, high-value resource.

Given this situation, there was a legitimate argument to be made for spreading the wealth among as many Alaskans as possible by banning traps and mandating a variety of other inefficiencies, such as boat and net size limits, once the traps were gone.

Unfortunately, the first thing the state ban on traps did was cause a rush to sea by small-boat fishermen wanting to cash in on salmon. The number of licensed commercial fishermen in the state more than doubled from 10,000 in 1960 to more than 20,000 in 1970.

All of this led to new problems.

With the ocean productivity of salmon low due to cold Pacific waters and returns to Alaska further reduced by interceptions of salmon in high-seas fisheries in the late ’60s and early ’70s, state fishery biologists soon faced difficulties in controlling in-state harvests due to the large volume of fishing gear so many fishermen could put in the water.

Fishermen, meanwhile, complained no one could make much money due to all the competition.

This led to an effort to limit the number of commercial fishing permits, an effort that stalled at first due to Alaska’s constitutional stipulation that “wherever occurring in their natural state, fish, wildlife, and waters are reserved to the people for common use.

The courts ruled that Constitutional provisions entitled everyone to the opportunity to go commercial fishing. As a footnote here,  it is this little bit of history that now has some journalists with no understanding of the development of the Alaska fishing industry writing about an imaginary, old “right to fish commercially.” 

Any “right” to fish commercially in Alaska or elsewhere in the U.S. ended in 1871 when Congress passed and President Ulysses S. Grant signed a law recognizing “a national interest in fisheries conservation” and creating the Office of Commissioner of Fish and Fisheries, to stop the “decrease of the food fishes of the seacoasts and lakes of the United States, and to suggest remedial measures,” according to a NOAA history.

The roots of NOAA and the U.S. Fish and Wildlife Service now trace back to that law. Those two agencies from the start of the 20th Century on worked to ensure hunting and fishing were maintained as regulated privileges, not rights, in the name of fish and wildlife conservation.

A century later, Alaska took regulation to the extreme after voters were convinced the state’s iconic commercial fishing industry, once the territorial cash cow, was near death. Fear of a fishing industry collapse led voters to approve a 1972 amendment to the constitution to limit entry into the fisheries.

Limited entry was not a bad thing or a good thing. An argument could be made that it was little more than an extension of a tried and true system dating back to colonial America when early white immigrants to the New World were given ownership of grants of land.

The U.S. Homestead Act of 1862 followed this precedent only to add the requirement that people given land by the government be required to live on it, build a home and staty some sort of business to “prove up” on their ownership claim.

Limited entry was different only in that it gave the original fishing permits to fishermen who’d already “proved up,” as the old Homestead term put it. Once people obtained a permit, they were largely free to do with it as they wished – fish it, sell it, hand it down to children, will it to some other fishermen, or just sit on it to see if appreciated to become more valuable in the future.

The consequences of this simple permit system were both good and bad and sometimes both, all depending on the perspective from which the permits were viewed:

• Limits on the number of fishermen did make many fisheries easier to manage.
• The original selection of permittees put some fishermen out of business but ensured others the opportunity to make enough money to support themselves and their families solely by fishing.
• Over time, some permits became virtually worthless as fisheries faded.
• Other permits became so valuable they allowed fishermen to sell them to create a nest egg for retirement.
• Permits in the state’s most valuable fisheries created new fish barons to rival the old owners of the traps.
• Self-interests tied to permit ownership drove the formation of a powerful, new political entity, the United Fishermen of Alaska organized in 1974.
• Cooperation between the Pacific Seafood Processors Association, formed in 1914 by the same interests that owned the traps, and Alaska fishermen now driven by the desire to protect the value of their permits created a political power block that would largely dictate state salmon management policy for the next 50 years.
• That political coalition would in some cases prevent the state from shifting harvests from low-value commercial fisheries to much higher-value, tourist-attracting sport fisheries as business in Alaska evolved into the 21st Century or tried to do so.
• And there was more.

Not long after limited entry, the commercial salmon industry convinced then income-tax-paying Alaskans to approve $74.3 million dollars in bonds, the equivalent of about 378 million 2024 dollars, to fund industrial-scale, salmon production hatcheries. About 15 years after that, the same interests talked the Alaska Legislature into banning net-pen salmon farming for fear in-state farming might spawn yet more competition. (Net pens are, ironically, now the norm at Alaska hatcheries, too. But they are only used to feed and fatten hatchery fish before their release to give them a better chance of survival at sea than wild fish.)

Come the mid-1990s, the salmon industry successfully lobbied the state to turn over to commercial fishermen-run associations the voter-funded hatcheries of the ’70s and ’80s so commercial fishing interests could increase production.

And throughout all these years, the industry managed to maintain state subsidies – first covered by income taxes and then by oil revenue after the Alaska income tax was eliminated – that bridged the shortfall between the minimal taxes paid by the industry and the substantial costs of managing and policing the commercial fisheries.

Evermore salmon

As for the salmon themselves, the main focus of both fishermen and state biologists prior to the 21st Century was always on increasing the volume of the Alaska harvest. Only later in the game, with prices paid for Alaska salmon crashing, did discussions begin about the quality of the fish being brought to market, a problem that was devaluing Alaska salmon.

That situation became such that by 1999, in his historical perspective, Steve Colt, a researcher at the University of Alaska Anchorage Institute of Social and Economic Research (ISER), actually found the nerve to suggest “it may be time for Alaskans to reconsider the fish trap.

“In this paper I have considered a fundamental question that was barely asked and never
answered during half a century of political debate about the costs and benefits of fish traps in
Alaska. How much more efficient are the traps relative to the best alternative competing gear, the purse seine?”

Needless to say, no consideration was given to Colt’s proposal despite traps, no matter how old, being a technological innovation far superior to chasing salmon with boats and nets. Traps remained politically unthinkable given a decades long misinformation campaign that painted them as the cause for weak Alaska salmon runs from the ’50s into the ’70s.

The traps were no more to blame for that than the nets some bandit fishermen used to close off the mouths of Alaska streams to scoop up all fish trying to get to the spawning grounds. Technology is never good or bad. The good or bad is in how people use it.

That said, technology is not something that can be ignored forever either, as one-time ISER researcher Gunnar Knapp, the dean of Alaska salmon economists, warned Alaska fishermen six years ago.

“Can’t we think of a better way to catch Bristol Bay wild salmon than gillnets?” he boldly asked at a fisheries conference in Seattle. “Fish are bruised as they are caught in and removed from gillnets.”

It wasn’t hard to think of better ways to harvest Alaska salmon, but there was no way to pursue a better way in a state where the last thing desired by the commercial fishing interests largely in control of salmon management was any sort of change.

The lifestyle

Nowhere has this been more historically obvious than in the massive bay known as Cook Inlet at the doorstep of Alaska’s largest city. Early efforts to save declining populations of Chinook salmon that return to the Inlet ran into rabid opposition from commercial fishermen arguing that changes in the way they fish would damage their lifestyle.

As late as last year, the Kenai-based Peninsula Clarions was headlining “Unprecedented closures threaten setnet way of life; Setnetters have been vocal about their opposition to the way their fishery is managed.”

Through the 1990s and into the new millennium, commercial fishing interests pounded away at this need to protect their historic “way of life” and fought any attempts to alter how Inlet salmon were harvested – even when those alterations would have increased the value of the fish they caught.

One of the big problems in Alaska salmon fisheries in general is that large numbers of fish are caught in short periods of time, which seriously hampers quality control. Salmon – unlike beef – don’t age well.

“After fish are caught, spoilage starts rapidly,” according to the authorities on this subject, who say that with every minute that passes between the time the fish is pulled from the water, bled, gutted and super-chilled or frozen, the quality of its flesh declines.

Thus, while a commercial fisherman might want to fish two or three days per week, especially a part-time fisherman as most are now in Cook Inlet, with a lengthy net or nets and catch hundreds or thousands of fish in a day, the salmon themselves are more valuable if caught in fewer number in shorter nets with time provided to bleed, gut and chill them before delivery to a processor.

This might require fishermen to work five or seven days per week to catch the same number of fish, but it would improve quality on the fishing grounds and at the processing plant where the salmon would arrive in a steadier stream rather than in a glut after each limited fishery opening.

But fishing this way would require a shift from how things have traditionally been done in Alaska, and limited entry instilled in the minds of Alaska fishermen a couple of  thoughts that linger to this day:

1. The belief the amendment to the constitution granted commercial fishermen ownership of much of the state’s salmon resource and,
2. The feeling that because the fish were theirs, they should be able to harvest them in the same way they haf always harvested them.

Set gillnet fishermen in the Inlet held to these beliefs until the state finally shut them down because they couldn’t keep struggling Chinook salmon, the Alaska “king salmon” and state fish, out of their nets.

Forming collectives of permit-owning fishermen to own and run traps like those that once existed in the Inlet would have been the perfect solution to the setnet bycatch problem, but no one dared even suggest the idea.

Thus with the king salmon returns to the Kenai River depressed and state biologists trying to rebuild the run, fishery managers didn’t have much choice but to close the setnet fishery entirely even though traps would have allowed their operators to pass Chinook safely and retain sockeye, the Inlet’s money fish.

Not only that, traps would have encouraged onsite bleeding, gutting and superchilling or freezing of the fish to maximize quality, and put Inlet fishermen pretty much on the same footing as salmon farmers who can move salmon directly from net pens into processing plants to maximize quality control.

One hundred twenty to more than 250 traps operated in Central Alaska from 1930 until 1953 when they began to be phased out due to objections from territorial officials, according to a 1968 Fish and Wildlife Service report.

It noted the “salmon trap is a highly efficient and specialized type of commercial fishing gear used to catch and impound Pacific salmon. The first salmon trap (in the territory) was built in Cook Inlet about 1885.

“The first trap was so successful that traps soon were built in other fishing areas of Central Alaska.”

Then along came a state government committed to rolling back efficiency. Little could anyone have guessed at the start of that move what cost the state would pay for its leaders thinking like a tribe of well-intentioned Luddites.

A perfect storm

One could almost consider some of the consequences poetic justice for those who participated in a system that a pair of modern-day ISER researchers now accuse of undermining the economics of rural communities. disrupting cultural practices and driving migration from rural Alaska to the state’s cities.

In a study prepared for The Nature Conservancy, anthropologist Courtney Carothers and economist Brett Watson say that 80 percent of the people living in small communities in Southeast Alaska and on Kodiak Island now “report that limited access to fisheries has led to significant community crises. Since the introduction of limited entry in the 1970’s, permit ownership in key fisheries has declined by 32 percent, with the Koniag (Kodia) region experiencing a more severe decline of 63 percent.

“Halibut quota ownership (a federal limited entry plan that copied the state’s limited entry law) has also fallen by 69 percent. The Community Quota Entity (CQE) program, aimed
at restoring some access, has had limited success.”

The loss of permits in rural communities might in some ways be considered the cost of success that came in the early years of limited entry. There were consequences to the system putting more money in the pockets of  fishermen and providing them a saleable asset:

• Many low-income, rural fishermen who sold their permits early when in need of cash could never afford to buy back into the system.
• Some older fishermen who hung onto their permits found they became valuable enough that their sale could provide a nest egg for retirement someplace warmer and more comfortable than Alaska and so they left rural Alaska.
• Other rural fishermen who suddenly found their fishing efforts more profitable opted to move to Alaska metropolitan areas, where life is more comfortable for much of the year, or even relocate Outside, as Alaskans call the Lower 48 states.
• And Lower-48 fishermen with money and a desire to diversify their operations began to buy permits so they could come north to fish the short summer salmon season in Alaska.

In Bristol Bay, the site of not only the state’s but the world’s largest sockeye salmon fishery, more than half of the permits left the region. Some were sold to fishermen living elsewhere, but many departed with people who decided there were better places than the Bay to spend the bulk of the year.

This brought big changes to that part of Alaska as it did to other parts of the state that lost local permit holders, but this was and is only part of a bigger picture that now confronts not just rural Alaska communities and Alaska commercial fishermen, but the entirety of the Alaska fishing industry.

One might even add all Alaskans into the mix given a group of fishing-industry-backed legislators lobbying for a massive and costly bailout of the the state fishing industry. This is an idea on which the state has already gambled once.

The Alaska Permanent Fund in 2021 funneled $21 million to Alaska’s McKinley Capital Management to help it partner with Rodger May, a man with a colorful past in the Alaska fishing business, to purchase the Peter Pan Seafood Co. from Japan’s Maruha Nichiro, one of the largest fishery, aquaculture, and food processing companies in the world and one with a long history of financial success. 

Though some, maybe many, familiar with the Alaska salmon business questioned the wisdom of that investment, the purchase was pitched at its birth as the start of “a fully vertically integrated global seafood powerhouse,” or so McKinley McKinley CEO and Chief Investment Officer Rob Gillam told National Fishermen, a fisheries trade publication, at the time.

“You’re going to see a lot of announcements from us in the coming couple of months as we execute on what we think is really a fantastic platform for growth,” Gillam told Seafood Source, another industry publication.

Only three years later, Wells Fargo Bank, to which Peter Pan owed tens of millions of dollars, demanded the company be put in receivership, and the powerhouse imploded. 

The Northern Journal and ProPublica are now reporting the Permanent Fund lost a total of $29 million on the deal, but compared to the tens of millions of dollars the state has spent subsidizing the commercial fishing industry through the decades and the hundreds of millions of dollars in value state salmon have lost since fish traps were banned, $29 million seems like sort of small potatoes.