Legislature(2003 - 2004)
02/12/2004 10:05 AM House EDT
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HCR 28-STUDIES OF SALMON HARVESTING COOPERATIVES Number 0051 CHAIR HEINZE announced that the first order of business would be HOUSE CONCURRENT RESOLUTION NO. 28, Relating to the socioeconomic impacts of salmon harvesting cooperatives. Number 0073 REPRESENTATIVE PAUL SEATON, Alaska State Legislature, sponsor of HCR 28 by request of the Joint Legislative Salmon Industry Task Force ("Task Force"), explained that the Chignik cooperative is a restructuring of how fishing is done in Alaska. A percentage of the catch is allocated to each fisherman; the fishermen can join a cooperative and distribute their catch over time. It's a unique situation in Chignik, with a single gear type and only 100 fishermen, out of which 77 have joined the co-op; in addition, an open-access fishery has occurred alongside. Noting that this has been going on for two years, Representative Seaton said information has been insufficient to address all the public policy issues and how they affect the communities as well as the industry. Thus HCR 28 asks the university to conduct a socioeconomic study of the effects of the Chignik fishery. REPRESENTATIVE SEATON noted that committee packets contain a study that ISER [Institute of Social and Economic Research] conducted after the first year; however, it mainly deals with the economics of the fishery, the fishermen, and their feelings about how the fishery went. It doesn't address the Task Force's questions relating to social impacts to local communities from the consolidation and only using part of the fleet to catch the fish. For example, although there is an increased economic gain for fishermen, how does that weigh against the changes within the communities? Hence the resolution asks the university to have ISER - which has done some of this in the past and therefore seems the appropriate entity - to conduct a study to provide the data and answers for those questions. Number 0316 CHAIR HEINZE mentioned the Commercial Fisheries Entry Commission (CFEC) and the Board of Fisheries. With regard to the holders of limited entry permit holders in Chignik, she asked whether they must fish the permits or are just allowed a portion of the total catch. REPRESENTATIVE SEATON answered that the way the limited entry system works in the state, except for a rare exception, a person in a commercial fishery has a harvest privilege and must be there "at the operation of the gear." However, people in Chignik have been allowed to pool as a cooperative; they have distributed their money through a contract provision. He added, "Not everybody had to show up. Their permits actually were not fished." He continued: Now, you can have a co-op anywhere in the state anyway, where you voluntarily go together and one person may go fish and they may pay you for something else, but your permit was not fishing. The difference between the Chignik co-op and other co-ops which have been going on for a long time is that this ... resulted from [an] allocation of fish by the Board of Fisheries to ... those people that wanted to go into the co-op. ... The co-op actually had a percentage, 69 percent of the catch, and so they were able to distribute that catch over a long period of time, take fish slowly; actually, they were taking them live. ... [It] improved the quality, did a number of different marketing things, reduced costs, because instead of 77 boats fishing, I think they had 23 total permit holders involved in the harvest of their fish. Number 0480 REPRESENTATIVE SEATON said it was for economic efficiency, trying to reduce costs. However, fuel isn't being bought for 77 boats, and groceries aren't being bought for 77 boats that have five crewmembers each. Only 10 or 12 boats are fishing, and so there are downsides. Thus this study is to look at the effects on local communities in order to make the public policy call of whether this is something to go forward with or allow the board to look at elsewhere in the state. Representative Seaton explained that the Board of Fisheries has required strong majority support from fishermen in the area before it will consider doing one of these co-ops. This is the only co-op that has come forward with majority support from an area. Number 0546 CHAIR HEINZE asked whether the structure had been understood and approved in advance. REPRESENTATIVE SEATON answered in the affirmative and added: Through a number of meetings, they designed the structure, designed the percentage of allocation. And if they were over 80 percent of the participants, then it went to a 1 percent allocation for each participant; they were at 77, so it was nine-tenths of a percent of the fishery went to each permit holder, and then that was harvested by the co-op. That was to allow a little more of the catch to go to the people that decided not to participate in the co-op. Number 0602 REPRESENTATIVE CISSNA pointed out that while there is no fiscal note, the university is being asked to do much-needed research. She said public policy is better made if there is that kind of research. Highlighting the need to ensure the university is solvent and can actually do this kind of study, she recommended that legislators commit to supporting the university. CHAIR HEINZE offered her belief that Gunnar Knapp from the university [one of the authors of the ISER research summary provided in committee packets] was on teleconference. Number 0655 REPRESENTATIVE SEATON informed members that the Task Force acknowledges it takes money to do a study. There are some remaining funds and several different projects that need to go forward from the Task Force. If this resolution goes forward, he said, the Task Force will meet one more time, and one thing it will consider is directing some funds for the study. "That determination hasn't been made ... as to how much is allocated to what project, but it's our concern as well," he concluded. CHAIR HEINZE informed members that the teleconference connection to Mr. Knapp had been inadvertently disconnected. Number 0708 CHAIR HEINZE asked Representative Seaton to elaborate on page 2 of [the sponsor statement], which says opponents argue that "harvesting cooperatives unfairly disadvantage processors". REPRESENTATIVE SEATON responded that there has been a question as to whether, when fish are allocated through a cooperative, that cooperative then has more negotiating power because it controls a significant quantity of the fish. He said there were two processors in Chignik and two sides to every story: "One side is that they were offered fish, but didn't want to competitively pay the price that the other processor was willing to process [for], and the ... other side is that they couldn't buy enough fish to stay open, and so they were blaming the cooperative." He continued: Now, I don't know. ... If you're in business and you're wanting to buy fish, you're going to have to pay a competitive price or you don't get product. I don't know what the absolute (indisc.--coughing) for this was, but that's the concern as to whether, if a cooperative has an allocation ... of a specific percentage of the resource, if they then have marketing stature - negotiating stature - high enough that it could disadvantage the processing sector. The processor that was working with them did not have that problem; ... they reached an agreement. The other processor didn't feel that the price that was being paid was something that they ... could do, and so that processor ... has decided not to process in Chignik this next year. That, I'm sure, will be one of the things that will be looked at in the ISER report. Number 0828 REPRESENTATIVE DAHLSTROM moved to report HCR 28 out of committee with individual recommendations. There being no objection, HCR 28 was reported from the House Special Committee on Economic Development, International Trade and Tourism.
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