Legislature(2003 - 2004)

02/21/2003 08:33 AM FSH

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB  89-FISH HANDLING AND DELIVERY STANDARDS                                                                                   
CHAIR SEATON announced  that the next order of  business would be                                                               
HOUSE BILL  NO. 89,  "An Act relating  to standards  for chilling                                                               
and delivery of commercially caught  salmon; and providing for an                                                               
effective date."  [The bill  was sponsored by then-Representative                                                               
Gary Stevens, who'd been appointed as Senator on February 19.]                                                                  
Number 2215                                                                                                                     
SENATOR GARY  STEVENS, Alaska State Legislature,  speaking as the                                                               
sponsor  of  HB 89,  introduced  the  bill by  acknowledging  the                                                               
problems  the salmon  industry is  facing because  of competition                                                               
from  farmed  salmon.   He  said,  to  that  end, last  year  the                                                               
legislature  established the  Joint  Legislative Salmon  Industry                                                               
Task  Force ("Task  Force"), and  as the  appointed chair  of the                                                               
quality subcommittee, he  has listened to people  from around the                                                               
state - experts as well as  people involved in the industry - and                                                               
it has  become clear that  if there were  one single thing  to be                                                               
done that  could improve the quality  of the salmon, it  would be                                                               
chilling the salmon  as soon after they were  caught as possible.                                                               
He  said  that  fish  farms  chill fish  more  readily  and  more                                                               
conveniently than is currently being done with wild salmon.                                                                     
Number 2337                                                                                                                     
SENATOR GARY  STEVENS continued that many  improvements have been                                                               
made to  the handling of fish  but there are still  problems that                                                               
can  lead to  damaged, bruised,  or gaping  fish.   He explicitly                                                               
told  the committee  "not all  the answers  are here"  in HB  89,                                                               
emphasizing that  there are a  lot of difficulties  involved with                                                               
mandatory chilling.   He  referred to  the cost  and difficulties                                                               
accompanying  the installation  of refrigeration  equipment.   He                                                               
reiterated that the  main problems include the  cost of mandatory                                                               
chilling and the  issue of "staging."  In  addition, he mentioned                                                               
other  problems such  as the  possibility  that perhaps  products                                                               
like canned salmon don't need to be chilled.                                                                                    
SENATOR GARY  STEVENS told the committee  that fishermen wondered                                                               
whether going to this great  expense of chilling their fish would                                                               
result in  receiving more  money for the  fish.   He acknowledged                                                               
that  HB 89  addresses  enormous problems  and  that it  involves                                                               
adding additional costs to the processing  of fish at a time when                                                               
the industry is  in crisis, the markets are in  jeopardy, and the                                                               
prices  are low.    He  concluded by  saying  that  in the  final                                                               
analysis,  in  order to  be  competitive  with farmed  fish,  the                                                               
product must  be the highest  quality product it can  possibly be                                                               
in order that the markets can be retrieved.                                                                                     
Number 2517                                                                                                                     
REPRESENTATIVE  WILSON  asked  for  a  definition  of  "staging."                                                               
SENATOR  GARY STEVENS  replied that  as "we  move westward"  this                                                               
process may  have to  take place  over a period  of years,  or in                                                               
stages.   To mandate that  every delivered fish must  be chilled,                                                               
as of  today, would cause  enormous problems.   Although chilling                                                               
could  probably be  done in  Southeast Alaska  and in  Kodiak, in                                                               
Western Alaska there is less  equipment, less infrastructure, and                                                               
less access to ice.  Staging  means recognizing that it's best to                                                               
accomplish the goal in stages.                                                                                                  
Number 2589                                                                                                                     
REPRESENTATIVE HEINZE asked if there  is currently a standard for                                                               
mandatory chilling.                                                                                                             
SENATOR GARY STEVENS  replied that there is not  such a mandatory                                                               
standard; however,  many processors require chilling  in order to                                                               
accept the fish.   Standards have been established,  but there is                                                               
not a mandatory requirement.                                                                                                    
REPRESENTATIVE  HEINZE  referred  to  a video  that  was  watched                                                               
several  weeks ago  that showed  salmon being  placed into  fresh                                                               
water  and  then  delivered  directly   to  the  processor;  this                                                               
resulted in  the grading going  up, perhaps  by 80 percent.   She                                                               
asked  what the  link  was  between the  icing  of  fish and  the                                                               
resultant grading of fish.                                                                                                      
Number 2633                                                                                                                     
SENATOR GARY  STEVENS replied  that this was  the video  from the                                                               
Chignik  Cooperative [meeting  of  1/31/03],  and confirmed  that                                                               
from what  he had  seen, the  quality of  the product  was higher                                                               
this year than  it has been in  years past.  He  said the Chignik                                                               
Cooperative was  able to deliver  the fish more quickly  and also                                                               
to deliver  it alive; it  would be problematic to  implement this                                                               
procedure  throughout Alaska,  although it  was possible  in that                                                               
particular location.                                                                                                            
REPRESENTATIVE HEINZE  asked about the correlation  between using                                                               
more ice and having a higher grade of fish.                                                                                     
SENATOR GARY STEVENS confirmed that  to a certain extent, there's                                                               
a direct correlation between chilling  and the quality of the end                                                               
product, although "you wouldn't want to go too far," he added.                                                                  
CHAIR  SEATON  informed the  committee  that  there had  been  an                                                               
increase  in  quality   in  fish,  not  only   from  the  Chignik                                                               
Cooperative, but  also from the  common-property fishery  in that                                                               
area.  He  suggested that this was related to  the short duration                                                               
of the fishery, resulting in  the fish being delivered in smaller                                                               
batches.     He  pointed  out   that  there  were  a   number  of                                                               
complicating factors contributing to the equation's end result.                                                                 
Number 2743                                                                                                                     
REPRESENTATIVE  GUTTENBERG referred  to the  goal of  producing a                                                               
higher quality  product and asked,  "Why doesn't the  market take                                                               
care of this?"                                                                                                                  
SENATOR GARY STEVENS  replied that in many places  the market has                                                               
requirements and  will not buy  fish unless it has  been chilled;                                                               
it's  a  standard that  many  processors  have established.    He                                                               
referred   to  a   meeting  in   Seattle  with   quality  control                                                               
representatives  from  different  processors  who  expressed  the                                                               
ensuing  difficulty   that  would   be  involved  in   saying  to                                                               
fishermen, "If  you don't chill your  fish, we won't buy  it, and                                                               
you'll have  to go elsewhere."   The obvious difficulty  would be                                                               
that those  fishermen might  then take their  business to  a more                                                               
available processor.                                                                                                            
REPRESENTATIVE GUTTENBERG  asked what assurances  fishermen might                                                               
have  that  increased quality  would  result  in an  increase  in                                                               
SENATOR GARY  STEVENS replied that  this question hit upon  a key                                                               
issue and that  there were no assurances.  But,  he cautioned, if                                                               
care wasn't  taken to  ensure that  Alaskan fish  were of  a high                                                               
quality, there  would be no  assurance of a market  continuing in                                                               
the future.                                                                                                                     
Number 2865                                                                                                                     
CHAIR SEATON commented  that one issue was whether  the result of                                                               
making additional efforts would result  not in more money, but in                                                               
less  money.   He said  that if  a product  form, such  as canned                                                               
fish, was such that the canner  could not retrieve any more money                                                               
for the  product that  he is selling,  then icing,  chilling, and                                                               
special handling  would result in just  bearing additional costs.                                                               
He  said that  in working  with product  forms such  as filleted,                                                               
fresh, or frozen  fish, [people have found  that] chilling offers                                                               
a qualitative difference at the wholesale end.                                                                                  
SENATOR GARY  STEVENS said  there are  both short-  and long-term                                                               
issues to be  addressed, that is, looking at  this year's fishing                                                               
season versus  looking ahead to  years down  the road.   He noted                                                               
that the high  quality standards are now being set  by the farmed                                                               
fish and  asked, "What is going  to happen to our  industry if we                                                               
are not competitive with farmed fish?"                                                                                          
REPRESENTATIVE WILSON  commented that  the Alaskan  product won't                                                               
be bought unless it matches  the farmed fish product, saying that                                                               
although  it's not  necessarily  a win-win  situation right  now,                                                               
down the road it will become so.                                                                                                
TAPE 03-9, SIDE B                                                                                                             
Number 2956                                                                                                                     
CHAIR SEATON  offered that  he was  not sure  about this  idea of                                                               
competing  with  farmed  salmon  because  consumers  buy  Alaskan                                                               
salmon for  reasons such  as the  flavor or  because the  fish is                                                               
wild and  not inoculated.   He reiterated  that farmed  fish have                                                               
changed the  market, but  this doesn't mean  that Alaskan  red or                                                               
silver  salmon fillets  should necessarily  be sold  at the  same                                                               
price that Costco is selling farmed fish.                                                                                       
SENATOR GARY  STEVENS offered that  what he meant  by "competing"                                                               
was not to be interpreted as  competing at the same price, but as                                                               
competing  in  the  marketplace.    He said  he  thought  it  was                                                               
important to  recapture a share  of the market that's  been lost.                                                               
He pointed out  that the Alaskan salmon are in  the best possible                                                               
condition and  freely arrive  on our  shores, whereas  fish farms                                                               
have to  breed, raise, feed,  and contain the fish  until they're                                                               
ready to  be processed.   He  said that  there are  many positive                                                               
aspects and  qualities to wild  Alaskan salmon, such as  the high                                                               
content of omega-3s [omega-3  fatty acids], being environmentally                                                               
friendly, and not being drugged in order to be disease-free.                                                                    
REPRESENTATIVE  HEINZE   agreed  that  the  niche   would  entail                                                               
marketing  the  salmon as  wild  salmon  and also  educating  the                                                               
public as  to the antibiotics  and other aspects involved  in the                                                               
processing of farmed fish.   She said that this marketing effort,                                                               
combined with  producing a higher-grade  salmon, would be  a two-                                                               
pronged effort that would afford Alaska an even better shot.                                                                    
Number 2793                                                                                                                     
SENATOR  GARY STEVENS  agreed and  said that  there's a  need for                                                               
awareness  of what's  occurring in  the farmed  fish market.   He                                                               
said that today in Juneau,  at Costco, there are beautiful farmed                                                               
fish fillets, individually  frozen in bags, that just  need to be                                                               
thawed and  cooked.  He said  the market has changed  in the last                                                               
10 years  and that, hopefully, people  will pay more money  for a                                                               
quality wild fish.                                                                                                              
REPRESENTATIVE  WILSON said  she agreed  100 percent,  mentioning                                                               
that society  wants convenient and  quick products, but  will pay                                                               
more for a  quality product if it's desired;  she emphasized that                                                               
it was important for the quality of the product to remain high.                                                                 
SENATOR GARY  STEVENS said the  quality subcommittee of  the Task                                                               
Force thought  this issue to  be enormously important  and wanted                                                               
to bring  it forward  to the legislature  to discuss  and address                                                               
Number 2627                                                                                                                     
CHAIR  SEATON questioned  what  enforcement  mechanism was  being                                                               
envisioned by  the Task  Force to  ensure that  quality standards                                                               
would be met.                                                                                                                   
SENATOR GARY  STEVENS replied  that he didn't  have an  answer to                                                               
that question.                                                                                                                  
CHAIR SEATON  said that  the two  options for  mandatory chilling                                                               
that he could envision would be  to either penalize the person by                                                               
price  or by  preventing  participation; he  said  he didn't  see                                                               
either of  these options  as being within  the structure  of what                                                               
the legislature would be inclined to do.                                                                                        
SENATOR GARY STEVENS  confirmed this as a  conundrum, saying that                                                               
the  Task   Force  hopes  that  the   legislature  could  provide                                                               
assistance regarding enforcement, should  the decision be made to                                                               
pass the bill.                                                                                                                  
Number 2467                                                                                                                     
CHERYLL SUTTON,  Staff to the  Joint Legislative  Salmon Industry                                                               
Task Force,  Alaska State Legislature, introduced  Phelan Straube                                                               
as the staff  person assigned to the Quality  Subcommittee of the                                                               
Task Force.  She reiterated  that there is clear recognition that                                                               
the bill, in  its current form, should not be  adopted because of                                                               
issues  that still  need to  be solved.   She  reported that  the                                                               
processing  sector  had  similarly questioned  the  logistics  of                                                               
enforcement and  that at this point  in time the subject  has not                                                               
been  adequately  addressed.    She   said  that  there  is  some                                                               
confusion relative to mixing [U.S.  Food and Drug Administration]                                                               
Hazard  Analysis and  Critical  Control  Point (HACCP)  planning-                                                               
process standards  with chilling  standards, explaining  that the                                                               
HACCP program is a safety-based  program within the Department of                                                               
Environmental Conservation  (DEC) and  is not designed  for these                                                               
issues; it is  a marketing tool in that people  ask, "Do you have                                                               
a HACCP  program in place?"   And, of course, now,  everyone does                                                               
have one in place.                                                                                                              
Number 2290                                                                                                                     
CHRISTINE  RYAN,  Acting   Director,  Division  of  Environmental                                                               
Health, Department of Environmental  Conservation (DEC), said the                                                               
division oversees seafood processing  and food safety inspections                                                               
for  the state.    She  said the  division  has similar  concerns                                                               
regarding how  enforcement mechanisms  would be encouraged.   She                                                               
pointed out that  the division's focus was on  matters of safety,                                                               
whereas the  issues of quality  were more often addressed  by the                                                               
Alaska Seafood  Marketing Institute  (ASMI).  She  explained that                                                               
the division's only mechanism of  enforcement would be to issue a                                                               
ticket or  a fine  and that  at this  time, the  division doesn't                                                               
interact with  fishing boats in any  way, but does work  with the                                                               
processors.  She questioned the  standard for prompt delivery and                                                               
wondered  how  setting  this standard  for  promptness  might  be                                                               
CHAIR SEATON asked if the  division interacted with direct market                                                               
MS. RYAN confirmed that this was the case.                                                                                      
Number 2141                                                                                                                     
JAMES  SHULWALTER, Commercial  Fisherman, testified  that he  has                                                               
been involved with  fishing for his entire life and  is now semi-                                                               
retired and  draws social  security.   He strongly  expressed his                                                               
opinion that  this issue of  getting the  best quality of  fish -                                                               
and  therefore the  best  price  - should  be  determined by  the                                                               
processors  and the  fishermen rather  than the  Task Force.   He                                                               
testified in  opposition to HB  89, repeating that it  wasn't the                                                               
job of  the Task Force  to make regulations that  would interfere                                                               
with private business.                                                                                                          
Number 2047                                                                                                                     
CHRIS GARCIA,  Cook Inlet Fishermen's  Fund, testified  in strong                                                               
opposition  to HB  89.   He  said the  state doesn't  need a  new                                                               
department to enforce  a law that doesn't need to  be enforced in                                                               
the  first  place, and  that  it  would  be  very costly  to  all                                                               
involved.   He  said  that if  this  issue were  left  up to  the                                                               
industry,  it would  be taken  care  of, pointing  out that  some                                                               
areas in the state already require  chilling.  He stated that the                                                               
industry  is  already  "crippled"  and  doesn't  need  additional                                                               
restrictions.  He added that even  with regard to the offering of                                                               
loans,  the  paying  back  of   those  loans  would  add  another                                                               
unnecessary burden for  fishermen.  He emphasized  that this bill                                                               
would help  to kill the  industry and that  the best thing  to do                                                               
with HB  89 is  to "kill  this before it  becomes a  monster" and                                                               
before a bigger  bureaucracy and budget are created.   He said to                                                               
accomplish mandatory chilling, some of  the vessels would need to                                                               
be replaced because necessary modifications  would cost more than                                                               
the worth of  the vessel.  He said that  the farmed-fish industry                                                               
would  die  on its  own  if  it  wasn't  being supported  by  the                                                               
CHAIR  SEATON repeated  that the  intent was  not to  move HB  89                                                               
out of committee at this time.                                                                                                  
[Elise Hsieh  of the  Department of Law  was available  to answer                                                               
Number 1782                                                                                                                     
LAURA   FLEMING,  Public   Relations  Director,   Alaska  Seafood                                                               
Marketing Institute  (ASMI), Department  of Community  & Economic                                                               
Development (DCED), told  the committee that last  year the board                                                               
met, looked at the results of  quality surveys - surveys that had                                                               
been conducted every five years for  the past fifteen years or so                                                               
-  and acknowledged  that voluntary  education  efforts were  not                                                               
working.  She  testified that the quality of the  product was not                                                               
improving  fast  enough  to remain  competitive  with  the  world                                                               
market.   A  Quality Symposium  was established,  and after  this                                                               
issue was  addressed last spring,  a list of  recommendations was                                                               
forwarded  to the  ASMI board  that was  then reviewed  this past                                                               
September.   She  said that  those  quality recommendations  were                                                               
adopted  and  could  be  found  in the  committee  packet.    She                                                               
explained  that ASMI  is  a marketing  agency,  not a  regulatory                                                               
agency, but  has recognized that  something further must  be done                                                               
and suggests that all of the standards be adopted.                                                                              
MS.  FLEMING   continued  that  the   Task  Force   reviewed  the                                                               
recommendations  and  then selected  one  item  to move  forward,                                                               
which was  "chilling."   She encouraged  the committee  to review                                                               
ASMI's  "Quality Recommendations"  in the  committee packet,  and                                                               
she distributed  pictures of  fish that  demonstrated gaping  - a                                                               
separation  of  the  tissue  -   which  is  a  common  occurrence                                                               
resulting from fish  not being properly chilled.   In conclusion,                                                               
Ms. Fleming said that 25 years  ago when she moved to Juneau, the                                                               
produce at  the market  was not  of the  same quality  as today's                                                               
produce, and  that similarly,  today's consumers  do not  need to                                                               
buy fish of a lesser quality for a premium price.                                                                               
Number 1488                                                                                                                     
REPRESENTATIVE  BERKOWITZ  said  that  although  this  was  being                                                               
considered solely  as an  Alaskan problem,  Alaskan salmon  are a                                                               
large percentage  of the entire  American salmon production.   He                                                               
said  it  seems that  the  federal  government should  bear  some                                                               
responsibility in  assisting Alaska in transitioning  to a higher                                                               
quality product and  asked if there were  any initiatives through                                                               
which  the federal  government might  be  in a  position to  help                                                               
Alaskan fishermen to  upgrade the quality of  the product, either                                                               
through loans or otherwise.                                                                                                     
MS. FLEMING responded that she  believes that the majority of the                                                               
federal government's  focus is  on food safety  rather than  on a                                                               
quality product.   However, she said she believed  that there are                                                               
funds that could  potentially be directed to this  effort - funds                                                               
that pertain to the disastrous salmon market conditions.                                                                        
REPRESENTATIVE BERKOWITZ stated that  this wasn't just an Alaskan                                                               
problem, but was  an American problem as well, and  that if there                                                               
was any  way to  encourage the federal  government's involvement,                                                               
that should  be done because  this was too  big of a  problem for                                                               
"us to fix by ourselves."                                                                                                       
Number 1464                                                                                                                     
REPRESENTATIVE WILSON expressed her  concern that the offering of                                                               
additional  loans  to  fishermen   may  not  be  helpful  because                                                               
currently, there  are fisherman who  are struggling just  to stay                                                               
current  on   their  present  loans,   and  that   offering  them                                                               
additional loans might only be contributing to their struggle.                                                                  
Number 1404                                                                                                                     
GREG FISK, Fisheries Development  Specialist, Office of Fisheries                                                               
Development,  Division  of  Community and  Business  Development,                                                               
Department of Community &  Economic Development (DCED), commended                                                               
Senator  Gary Stevens  for encapsulating  the need  for elevating                                                               
the  quality of  Alaskan fish  as  well as  for highlighting  the                                                               
problems   involved  with   implementation.     In  response   to                                                               
Representative Heinze's previous question  as to whether there is                                                               
a direct  link between chilling  and quality, he said  that there                                                               
is actually a  quantifiable link.  He referred to  Bristol Bay as                                                               
the state's  largest sockeye  fishery and  said that  without any                                                               
real  changes happening  in the  handling of  fish over  the past                                                               
decade,  the  grading of  "number  one"  fish  has slid  from  an                                                               
average  of  above 70  percent  to  the  mid-30 percentile.    He                                                               
explained  that there  has not  been  any actual  changes in  the                                                               
fish,  but rather,  this is  a  market response,  based on  world                                                               
standards.  He mentioned John  Lowrance, a Bristol Bay processor,                                                               
who only  uses chilled  fish and  has a  grading of  "number one"                                                               
fish that are in the mid-70s.                                                                                                   
Number 1257                                                                                                                     
MR.  FISK  continued that  beyond  the  scope of  enforcement,  a                                                               
chilling mandate could assist with  setting a focus and achieving                                                               
a goal  of producing a  higher quality  fish.  He  referenced the                                                               
codfish industry in the eastern  United States in which fish used                                                               
to be unloaded with pews, or  sticks, that were inserted into the                                                               
fish  in order  to  throw them  aboard.   For  years, there  were                                                               
attempts to  eliminate this practice by  voluntary standards, but                                                               
that didn't  work because "habits  are hard  to break."   He said                                                               
that now,  since it's against  the law, nobody pews  fish anymore                                                               
and the quality of the fish has  gone up.  He said that setting a                                                               
standard for  chilling sets  a goal that  can be  worked towards.                                                               
He acknowledged  that this  is a national  problem and  said that                                                               
currently,  monies are  available,  principally through  agencies                                                               
like  the Economic  Development  Administration (EDA).   He  said                                                               
that  identification of  this as  a major  problem could  help to                                                               
provide the  necessary clout to  be used  in working with  EDA to                                                               
focus their funding on solving this problem.                                                                                    
REPRESENTATIVE BERKOWITZ  expressed his concern that  the overall                                                               
problem lands disproportionately in different  parts of the state                                                               
and also according to the differing fisheries.                                                                                  
MR. FISK responded that cost is  a big issue and that fortunately                                                               
there is no need to go to  RSW [refrigerated sea water].  He said                                                               
that the  cost in  areas such  as Bristol  Bay for  small gillnet                                                               
vessels for a  modern system ranges from $17,000 to  $30,000.  He                                                               
mentioned the slush-bag system,  an interesting solution that had                                                               
been developed  in Homer that has  been tried in Bristol  Bay and                                                               
seems to  work very  well, noting that  vessels can  be converted                                                               
for  as  little as  $2,000  per  boat.    He said  the  Community                                                               
Development Quota  (CDQ) Program in  Bristol Bay is  working hard                                                               
on this  and is trying  to convert the  local boats so  that they                                                               
won't be  left behind if a  mandate like this is  put into place.                                                               
He  referred to  ASMI's survey  which relates  progress that  has                                                               
been made in chilling,  and referenced the Arctic-Yukon-Kuskokwim                                                               
Region (AYK), saying  that progress in this area  was due largely                                                               
to  the outfitting  of  skiffs, small  vessels,  and even  setnet                                                               
sites with bag  systems that allowed for the use  of ice - adding                                                               
that this process could be done relatively inexpensively.                                                                       
Number 1027                                                                                                                     
CHAIR  SEATON asked  whether there  were further  questions.   He                                                               
then  said the  bill  would be  held over  and  the record  would                                                               
remain  open if  people  wanted to  submit  anything in  writing.                                                               
[HB 89 was held over.]                                                                                                          

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