The hatchery for the few/Wikimedia Commons
Alaska salmon farming ripoff
With the Cook Inlet Aquaculture Association (CIAA) now nearly $20 million in debt to the state of Alaska with no signs of future solvency, the time has come for someone to ask why the state continues to allow this business to run the state-owned Trail Lakes and Tutka Bay hatcheries purely for the benefit of a tiny handful of commercial fishermen.
As with all the state-owned hatcheries now run by private, nonprofit associations comprised of commercial fishermen, these Trail Lakes and Tutka facilities were turned over to CIAA under the auspices of a state law governing hatchery permits that, among other things, says this:
When CIAA was stocking sockeye salmon in Hidden Lake, which is part of the Kenai River system, it could at least make a case, albeit a weak one, that it was benefiting “the common property fishery” and the “best interests of the public.”
But CIAA stopped stocking Hidden Lake because adding a few thousand hatchery sockeye, or even a few tens of thousands of hatchery sockeye, to a river system producing millions of wild sockeye is pretty much pointless.
Most years, the return of adult, hatchery sockeye to Hidden Lake was smaller than the margin of error in the sonar that counts the number of sockeye entering the Kenai.
With Hidden Lake sockeye gone, the contribution of the CIAA-run hatcheries to the “common property” and the “best interests of the public” amounts to the few sockeye salmon that anglers are able to snag in Resurrection Bay as the fish return to Bear Lake near the city of Seward.
And CIAA’s board of directors has been talking about how to eliminate that harvest because CIAA’s failed ocean-farming business needs to harvest every single salmon it can via “cost-recovery fisheries” to keep from sinking ever farther into debt.
How we got here
Cost-recovery hatcheries are those set up by the state after the original funding mechanism for the so-called private-nonprofit (PNP) hatcheries failed. The original funding was to have come in the form of an “assessment” on commercially caught salmon.
The assessment was intended to cover the costs of operating hatcheries and paying back loans the state had offered private, commercial-fishermen-controlled aquaculture associations if they could demonstrate schemes to build hatcheries in “the interest of the public in fostering salmon enhancement efforts.”
The PNP hatchery law was then rewritten to make the assessment a true assessment, something the state Legislature can use as general-fund revenue or forward to the hatcheries for their use. The Legislature has alway since forwarded the money to the hatcheries in the supposed “interest of the public in fostering salmon enhancement efforts.”
Unfortunately, the funds have never come close to providing enough revenue to cover the costs of operating the free-range salmon farms that Alaska hatchery-backers prefer to call “ranches,” because “salmon farming,” per se, is banned in Alaska.
As a result of the cash shortfall, the private hatcheries were allowed to conduct “cost-recovery” fisheries to generate the dollars necessary to cover their costs of operation. Those costs grew substantially when the state-owned hatcheries were in the 1990s turned over to the PNPs to operate.
This came after the state decided it couldn’t afford to operate commercial, production hatcheries. Cost-recovery fisheries solved the money problem for both the state and the PNPs in most of Alaska.
These days, PNP-built hatcheries and still-state-owned hatcheries run by PNPs usually and generally produce enough salmon to split harvests between the cost-recovery take and the common-property harvest in the commercial fisheries, with the commercial fishermen usually hauling in the majority of the catch.
CIAA is an exception. Nearly all of the salmon now produced by CIAA hatcheries are caught in its cost-recovery fisheries by a handful of commercial fishermen contracted to conduct the harvest.
CIAA thus provides even less “public benefit” than the states’ other PNP hatcheries, which, in point of fact, produce tens of millions of salmon for a few thousand commercial fishermen but provide very few fish for the general Alaska public.
Little public benefit
The actual contribution from these hatcheries was even smaller, however, because a still-state-owned, “sportfish” hatchery in Anchorage accounted for about 10,000 Chinook (king) and coho (silver) salmon. Then, too, the state paid some of the PNP hatcheries to produce these angler-favored species elsewhere in Alaska.
This hidden subsidy meant that the actual, general, “common property” benefit that could be credited to the hatcheries originally funded by Alaska taxpayer support of bonds (yes, Alaskans once paid income taxes to cover this sort of thing) amounted to something less than 0.2 percent of the state harvest of hatchery salmon.
Or, to look at this another way, sport, personal-use, and subsistence fishermen in Alaska received about 1 percent of the benefit of the hatcheries that last year harvested 15.6 million cost-recovery salmon, and about 0.04 percent of the benefit accruing to commercial fishermen who harvested about 50.4 million hatchery salmon.
What little benefit the majority of Alaskans who fish salmon saw was also largely attributable to two regional aquaculture associations operating in the Alaska panhandle. Were CIAA to provide a 1 percent benefit for Cook Inlet-area sport, personal-use and subsistence fishermen, it would be a huge improvement.
As it is, the state aquaculture report credited all Cook Inlet-area hatcheries with providing approximately 38,400 salmon for sport, personal-use dipnet and subsistence fisheries in and around the Inlet last year, but the report failed to specificy that about 9,900 of the king and coho salmon included in that total came from the still state-owned hatchery in Anchorage.
Thus CIAA’s contribution came to about 28,500 salmon for the general public, of which approximately 15,500, or 54 percent, were sockeye. This is fewer sockeye than personal-use dipnetters catch in the Kenai and Kasilof rivers on an average day in July.
The Alaska Department of Fish and Game does a lousy job of reporting dipnet harvests in a timely fashion, despite dipnetters now filing their catch reports online, so the newest figures on dipnet harvests are for 2024, which, by all indications, had a smaller harvest than 2025.
Given the numbers here, it would be more than fair to conclude that CIAA’s contribution to the peoples’ common-property, fisheries – fisheries sometimes described as a “food security” fishery – was less than pathetic.
But it was a big contribution compared to CIAa contributed to the Inlet’s common-property, commercial fisheries limited to less than 2,000 permit holders.
“From available data,” the state report says, “about 3,200 hatchery fish were caught in the Cook Inlet commercial common property (CCP) fisheries, (and were) worth an estimated exvessel value of $34,000,(or) 0.1 percent of the exvessel value for CCP salmon fisheries in the region.”
The bulk of the CIAA hatchery fish caught in 2025 were netted in CIAA cost-recovery fisheries. They numbered 214,000, and at today’s prices for Alaska salmon they here generated merely a fraction of CIAA’s present operating costs of about $3.5 million per year.
Do the math
Even if CIAA’s cost-recovery fisheries had caught every single salmon produced by the hatcheries it manages – thus adding the 3,200 salmon that commercial fishermen caught to the 15,500 sockeye caught by non-commercial fishermen plus maybe half the coho catch attributable to the state hatchery and CIAA – the harvest of a total of less than 250,000 salmon wouldn’t have come close to covering the costs associated with CIAA-run hatcheries.
Were this a one-year problem, it might be possible to ignore it. But CIAA has been operating this way for years, with the state regularly propping the business up with loans. Only twice in the last 12 years has CIAA produced revenues exceeding costs, and the only once has CIAA turned a significant profit.
That happened way back in 2014. A then financially slimmer CIAA that year exceeded its revenue goal of $1.1 million by selling $1.7 million worth of salmon to Inlet processors. Unfortunately, CIAA operating costs went up the next year and in the years that followed, and its salmon production failed to keep step.
The last time CIAA met its revenue goal was in 2018 when the sale of $4.61 million worth of salmon just topped the goal of selling $4.52 million worth. By 2019, given increasing costs, the goal was up to $5.2 million, and CIAA fell 61 percent short.
That pattern has continued ever since, even as CIAA shrank its operating costs to try to solve the problem. By 2023, its cost-recovery goal was down to $4.3 million, but its cost-recovery fisheries produced only $2.6 million worth of salmon.
Depending on the number of salmon returning to the Inlet and the price of those fish in any given year, CIAA continued to collect up to $800,000 in “assessment” revenue from commercial fishermen. But even with those funds added, it fell far short of its breakeven point year after year.
And last year can only be called a disaster, with assessments bringing in more money than CIAA’s cost-recovery fisheries.
Ironically, most of that assessment revenue comes from commercial fishermen in Upper Cook Inlet who mainly catch sockeye bound for the Kenai and Kasilof rivers. These fishermen, who comprise the majority of commercial fishermen in the region, subsidize harvests for the tiny catch of CIAA common-property salmon landed by a handful of fishermen in the Lower Inlet, and the cost-recovery operations CIAA conducts in the Lower Inlet and in Resurrection Bay, where CIAA harvests basically all of the returning sockeye.
Why they have put up with being taxed for years to pay for hatcheries to produce salmon for others is hard to understand, but then again, Upper Inlet fishermen have for so long been engaged in a salmon allocation battle with personal-use and sport fishermen that they might have overlooked who has been lifiting money from their pockets.
Be that as it may, the big picture here is pretty simple.
The state has helped to prop up CIAA as a business benefiting only CIAA management, CIAA employees and a half-dozen or so fishermen under contract to conduct cost recovery fisheries for CIAA, while providing no real “benefit (to) the common property fishery” and no “public benefit” as originally intended when the state jumped into the hatchery business.
This is not how things were supposed to work. And the situation only looks worse when you consider that the state continues to loan money to CIAA when there is no reason to believe its ocean-farming business will ever break even.
Basically, the state appears to be funding CIAA to throw money in the ocean and watch it wash away. Someone really needs to ask why?
Categories: Commentary, Outdoors
One also has to wonder how the PNP hatcheries for pink salmon are being justified, given they are spreading like wildfire across not just the north Pacific but also the north Atlantic.