Legislature(2019 - 2020)GRUENBERG 120
03/19/2019 09:45 AM House FISHERIES
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| Audio | Topic |
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| Start | |
| Presentation: Hatcheries by the Regional Aquaculture Associations & Mcdowell Group | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
March 19, 2019
9:48 a.m.
MEMBERS PRESENT
Representative Louise Stutes, Chair
Representative Bryce Edgmon
Representative Chuck Kopp
Representative Jonathan Kreiss-Tomkins
Representative Sarah Vance
MEMBERS ABSENT
Representative Geran Tarr
Representative Mark Neuman
COMMITTEE CALENDAR
PRESENTATION(S): HATCHERIES BY THE REGIONAL AQUACULTURE
ASSOCIATIONS & MCDOWELL GROUP
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
TINA FAIRBANKS, Executive Director
Kodiak Regional Aquaculture Association (KRAA)
Kodiak, Alaska
POSITION STATEMENT: During the presentation on hatcheries, co-
provided a PowerPoint presentation titled "The Alaska Salmon
Hatchery Alliance."
STEVE REIFENSTUHL, General Manager
Northern Southeast Regional Aquaculture Association (NSRAA)
Sitka, Alaska
POSITION STATEMENT: During the presentation on hatcheries, co-
provided a PowerPoint presentation titled "The Alaska Salmon
Hatchery Alliance."
DAN LESH, Senior Analyst
McDowell Group
Juneau, Alaska
POSITION STATEMENT: During the presentation on hatcheries,
provided a PowerPoint presentation titled "Economic Impacts of
Alaska's Salmon Hatcheries."
ACTION NARRATIVE
9:48:10 AM
CHAIR LOUISE STUTES called the House Special Committee on
Fisheries meeting to order at 9:48 a.m. Representatives Kreiss-
Tompkins, Vance, and Stutes were present at the call to order.
Representatives Edgmon and Kopp arrived as the meeting was in
progress.
^PRESENTATION: HATCHERIES BY THE REGIONAL AQUACULTURE
ASSOCIATIONS & MCDOWELL GROUP
PRESENTATION(S): HATCHERIES BY THE REGIONAL AQUACULTURE
ASSOCIATIONS & MCDOWELL GROUP
9:49:24 AM
CO-CHAIR STUTES announced that the only order of business would
be presentations on hatcheries by Alaska's regional aquaculture
associations and by McDowell Group on the economic impacts of
hatcheries.
CHAIR STUTES noted that today's presentations are part two in a
series of presentations on hatcheries. There is much focus
statewide surrounding salmon hatcheries and science, exploring
the potential effects of hatchery straying. She shared her
opinion that the previous week's presentations by the Alaska
Department of Fish and Game (ADF&G), followed by today's
presentations, would provide a holistic view for committee
members and the public on the need for hatcheries, as well as
what they are, and what they provide to fishermen and the state.
9:51:00 AM
TINA FAIRBANKS, Executive Director, Kodiak Regional Aquaculture
Association (KRAA), provided a PowerPoint presentation titled
"The Alaska Salmon Hatchery Alliance." Displaying slide 1, she
began her testimony by noting that today she is representing
KRAA as well as the Alaska Salmon Hatchery Alliance. She stated
her presentation would provide a view of the hatchery programs
as well as the contributions these programs make to their local
communities and the economy of the state. Showing slide 2, she
explained there are eight private nonprofit (PNP) hatchery
associations throughout Southcentral and Southeast Alaska
[Kodiak Regional Aquaculture Association, Kodiak; Cook Inlet
Aquaculture Association, Kenai; Prince William Sound Aquaculture
Corporation, Cordova; Valdez Fisheries Development Association
Inc., Valdez; Northern Southeast Regional Aquaculture
Association, Sitka; Southern Southeast Regional Aquaculture
Association, Ketchikan; Douglas Island Pink and Chum, Inc.,
Juneau; Armstrong Keta Inc., Juneau].
MS. FAIRBANKS moved to slide 3 and related that each hatchery's
mission is to increase the abundance and enhance fisheries while
protecting wild stocks. Fisheries enhancement projects are not
permitted if they are anticipated to have significant negative
effect on natural production. They are meant to provide added
opportunity rather than supplement it or replace existing
populations or fisheries. The hatchery program [in the Alaska
Department of Fish and Game] and the PNP hatcheries were
established in response to depressed salmon fisheries across the
state. Many of the associations began with directed efforts at
rehabilitation of wild stocks.
MS. FAIRBANKS turned to slide 4 and related that a large part of
the rush to statehood was predicated on the desire to assume
management of Alaska's fisheries within state waters. Following
statehood, the Division of Fisheries Rehabilitation, Enhancement
and Development (FRED) was created within the Alaska Department
of Fish and Game (ADFG), and the statutory and regulatory
framework for the PNP hatchery program was created soon after.
During a period of budgetary contraction and fiscal challenges
the PNP hatchery program assumed many of the state's hatchery
facilities as well as many of the rehabilitation duties of the
FRED division.
MS. FAIRBANKS addressed slide 5, pointing out that since that
time Alaska has enjoyed a period of abundance in its salmon
harvest that is unmatched in the history of the fishery. Prior
to the PNP program and the FRED division, commercial harvest of
salmon had been in decline and were at an all-time low.
Following establishment of the enhancement programs and
favorable climate regime shift, the average harvest of both wild
and enhanced stocks increased and have remained high for a
sustained period.
9:54:13 AM
CHAIR STUTES commented that its been said hatchery programs
only benefit the commercial fisheries. She asked whether any
other groups benefit from hatcheries.
MS. FAIRBANKS replied that the PNP hatchery programs are
mandated to benefit all user groups. She said the programs
benefit the common property fishery, which includes sport,
personal use, subsistence, and commercial fishing. For example,
[KRAA] has several lake stocking projects for sockeye where
hatchery fish are located into barren lakes near villages that
have no anadromous salmon populations. Those fish return to
those villages and salmon is put on the people's plates.
9:55:18 AM
REPRESENTATIVE KREISS-TOMKINS asked Ms. Fairbanks to describe
where funding for the enhancement programs comes from.
MS. FAIRBANKS responded that the PNP hatchery programs are self-
funded by the industry. The commercial salmon permit holders in
each region with an active aquaculture association have levied
upon themselves a salmon enhancement tax, with the tax rate of
from 1-3 percent determined by vote. In addition, through
statute, [the PNPs] are provided the opportunity to offer a
licensing agreement on an annual basis on the adult salmon
returning to their projects, a process called cost recovery.
Those cost recovery activities allow [the PNPs] to recoup their
operational expenses.
REPRESENTATIVE KREISS-TOMKINS observed that the graph on slide 5
shows a jump in the return of wild salmon from 40 million to 75
million on average post enhancement programs in Alaska, not
counting hatchery returns. He asked whether there is a
biological explanation for why wild salmon stock nearly doubled
circa 1975 and how that would be associated with or caused by
the hatchery program.
9:57:26 AM
STEVE REIFENSTUHL, General Manager, Northern Southeast Regional
Aquaculture Association (NSRAA), answered that primarily it was
the good state management that came into play in 1960 and that
took some time to catch up following the fish traps. Also, in
1977 there was a regime shift, called the Pacific Decadal
Oscillation. This period of time has been identified in science
as when North Pacific Ocean productivity increased. The graph
is showing the benefits of that regime shift to both hatchery
and wild fish. When there are regional downturns, like there
has been in Southeast Alaska recently for pink salmon, it is
seen in both the hatchery and wild fish at the same time.
9:59:02 AM
MS. FAIRBANKS displayed slide 6 and resumed her presentation.
She shared that much of the success of the PNP program was due
to emphasis on pink and chum salmon production. She explained
that because of their short hatchery residency, pink and chum
salmon are ideal for Alaska's hatchery production. While those
programs are most cost effective and represent over 90 percent
of enhanced production, the smaller numbers of coho, sockeye,
and chinook, though more costly to produce, generally return at
higher rates and at a higher value. The smaller scale of coho,
sockeye, and chinook production is dictated primarily by their
longer freshwater residence time, but they are often the
greatest contributors to enhanced fisheries for subsistence,
sport, and personal use. The larger scale pink and chum
production offsets the costs of the smaller programs and makes
production of the other salmon species possible.
10:00:19 AM
REPRESENTATIVE VANCE observed slide 6 states that most non-
commercial hatchery sockeye were harvested by personal and
subsistence fishermen. She inquired about the ratio of
commercial versus noncommercial hatcheries.
MS. FAIRBANKS replied there are two state operated sportfish
facilities. Facilities operated by PNP hatchery associations
typically are a combination of projects that benefit both
commercial and other common property users; none of the PNP
hatcheries are simply sport fish or commercial fish directed.
REPRESENTATIVE KREISS-TOMKINS observed from slide 6 that there
is substantial non-commercial harvest. He asked whether there
was any thought or discussion regarding the sport fishing
sector, particularly guided sport fishers, helping finance
hatchery programs in a proportional and equitable way.
MR. REIFENSTUHL responded there has been discussion in Southeast
Alaska about having sport charter groups contribute. That
hasn't taken place because other political issues are at play
with the split of treaty salmon in Southeast, so the boards have
decided not to accept money, although not much has been offered.
Because of the mechanism had for doing cost recovery there is
not really a need to bring in additional money. Seventy to 75
percent of the returning fish go to common property fisheries,
which includes personal use, commercial, sport, sport charter,
and subsistence.
CHAIR STUTES asked whether there have been any discussions in
Southcentral Alaska concerning sport fisheries contributing.
MS. FAIRBANKS answered she is unaware of any discussions taking
place in Southcentral, mainly for the reasons identified by Mr.
Reifenstuhl.
REPRESENTATIVE VANCE commented she was happy to hear about the
PNP hatcheries having adequate funding. She thanked the
fishermen for their contributions and making it sustainable.
10:04:52 AM
MS. FAIRBANKS moved to slide 7 and resumed her presentation.
She said Alaska's PNP hatchery programs represent one of the
most successful and consistent public-private partnerships in
the state's history. Whether state or privately owned, these
facilities produce salmon for the common property, which
includes sport, subsistence, personal use, and commercial
fisheries, at no cost to the State of Alaska. The program is
entirely self-funded through cost recovery of returning adult
salmon as well as the self-assessed Salmon Enhancement Tax that
salmon permit holders levied on themselves in each region with
an active aquaculture association. The revenues generated
through commercial harvests, landing, and fish taxes go back
into the communities and into the state's coffers and represent
a great return on the state's initial investment in these
programs.
MS. FAIRBANKS turned to slide 8 and explained the bar graph
depicts the varying overall production levels for each of the
four associations in the Southcentral area, as well as, for a
given year, how the releases of juvenile salmon compare to the
overall permitted capacity. However, she noted, the programs,
production, and species vary from region to region and hatchery
to hatchery. She said ADF&G monitors hatchery performance and
reviews programs and permit requests for compliance with
management, pathology, genetics, and the policy for sustainable
salmon fisheries.
MS. FAIRBANKS addressed slide 9, reporting that the projects
established in Southcentral Alaska are operated by Kodiak
Regional Aquaculture Association (KRAA), Cook Inlet Aquaculture
Association (CIAA), Prince William Sound Aquaculture Corporation
(PWSAC), and the Valdez Fisheries Development Association
(VFDA). Collectively they contribute $365 million in annual
economic output, 2700 annualized jobs, $76 million in annual ex-
vessel value, and $125 million in annual labor income. These
are impressive figures for nonprofit organizations operating
with a collective budget of about $25 million, she remarked. At
a minimum that is a 3:1 ratio in terms of ex-vessel value versus
the cost of operations.
10:07:30 AM
MS. FAIRBANKS discussed each of the individual associations in
Southcentral region. Showing slide 10, she related that KRAA
was formed in 1983 and has a 15-member board composed of purse
seine, set gillnet, and beach seine commercial salmon permit
holders, as well as subsistence, sport fishing, processing, and
marketing representatives. The boards of other associations,
she added, are similarly comprised, though they vary in size and
may include municipal, borough, tribal, and personal use
representatives, as well as those representing state and federal
agencies as either voting or nonvoting members. She said KRAA
operates two state owned hatchery facilities and produces all
five species of Alaska's Pacific salmon as well as rainbow
trout. The KRAA hatcheries provide large numbers of coho and
sockeye that are available to subsistence and sport anglers
around Kodiak and surrounding villages and partners with ADF&G
Division of Sport Fish to provide chinook and rainbow trout
fishing on the Kodiak road system. The KRAA has a long history
of partnering with local ADF&G staff to conduct rehabilitation,
research, and monitoring projects throughout the archipelago.
These partnerships extend to limnology and water quality
monitoring on sockeye nursery lakes on Kodiak and Afognak
islands, and monitoring returning adult salmon as well as smolt
operations. The KRAA research and monitoring staff conduct
activities related to oversight of KRAA's projects in every life
stage, including otolith collection, reading, and analysis; weir
monitoring for adult counts; effluent water monitoring; and data
collection and research for potential future projects. Also,
KRAA partners with local tribal entities on data collection and
internships to promote capacity building within those tribal
entities and conducts outreach and educational programs within
the local school systems and public events. However, it is
still commercial production and contributions that drive the
bulk of activities at KRAA. On average, KRAA's projects
contribute over 4 million fish to the common property fisheries
of Kodiak each year and KRAA's programs provide a vital
contribution to the community and economy of Kodiak in both good
and bad years. For example, in 2018 KRAA suspended its cost
recovery operations for pink salmon in favor of putting as many
fish as possible into the nets of fishermen, contributing over
half of the pink salmon caught in the Kodiak Management Area.
In 2019 KRAA estimates a contribution of over 7 million adult
salmon at an estimated value of $12 million. This equates to
just under 25 percent of the projected pink salmon harvest and
15 percent of the projected sockeye salmon harvest in the Kodiak
Management Area for 2019.
10:10:37 AM
REPRESENTATIVE KOPP asked why some hatcheries have opted to
produce pink and chum versus higher value salmon like sockeye
and coho.
MS. FAIRBANKS replied that in terms of cost effectiveness the
residence time in a hatchery for pink and chum salmon allow for
producing larger numbers. Sockeye, coho, and chinook have a
longer freshwater residence time and require greater freshwater
resources, longer periods of rearing, and more dedicated staff;
but they do return at higher rates and have a higher dollar
value at return. In terms of input/output, the pink and chum
projects constitute the bread and butter of an association and
allow for offsetting the cost of the smaller and more costly
production of the other species. She deferred to Mr.
Reifenstuhl to address the other reasons that Alaska's salmon
hatchery production has mainly focused on pinks and chums.
MR. REIFENSTUHL explained that some of the pink and chum
production is done based on niche availability in the ocean. In
Southeast Alaska there is very little or almost no pink salmon
production whereas there is a lot of chum salmon production
because there is a good ocean niche, whereas in Prince William
Sound and Kodiak there is a niche for the pink salmon. Boiling
it down to numbers, the cost of raising chinook on a cost to
benefit basis is 1:1 to 1:2, if lucky, and coho might be 3:1
benefit to cost, while pink and chum are 8:1 or higher.
10:13:54 AM
MS. FAIRBANKS resumed her presentation, stating that each of the
PNP salmon hatchery associations in Alaska has a similar story
to KRAA's. Moving to slide 11, she discussed the Cook Inlet
Aquaculture Association (CIAA), headquartered in Kenai. She
said CIAA provides harvest opportunities for the Kenai Peninsula
and waters of Cook Inlet stretching up to the Matanuska and
Susitna drainages as well as the western and lower portions of
Cook Inlet. The CIAA operates three salmon hatcheries at Trail
Lakes near Seward, Tutka Bay Lagoon, and Port Graham. These
facilities produce pink, sockeye, and coho salmon for users
throughout the Cook Inlet region. Many of CIAA's projects
contribute to, and are specifically directed at, sport, personal
use, and subsistence fisheries. In some areas of the region,
hatchery produced salmon are the only source for those
fisheries, such as silver and sockeye salmon that are caught in
Resurrection Bay. During the recent five-year period, CIAA
produced more than 26,000 sockeyes annually for sport anglers.
Also, CIAA's stocking projects provide additional opportunity in
many locations throughout the region. Further, CIAA has an
active research and evaluation division which dedicates time to
otolith reading and analysis as well as smolt and adult
enumeration projects and evaluation. In addition, CIAA has long
been involved in evaluation and eradication efforts related to
invasive species on the Kenai Peninsula and other areas in its
region.
10:16:22 AM
MS. FAIRBANKS turned to slide 12 and spoke to the Prince William
Sound Aquaculture Corporation (PWSAC), which is headquartered in
Cordova and which has logistic and laboratory facilities in
Anchorage. Three of the five hatcheries operated by PWSAC are
owned by the State of Alaska. Four are located within the
Prince William Sound and the fifth is located on the Gulkana
River. The Main Bay and Gulkana facilities are focused on
sockeye salmon production, while the Wally Noerenberg, Cannery
Creek, and Armin F. Koernig hatcheries produce primarily pink,
chum, and coho. On average, 70-80 percent of PWSAC's goes to
the common property fisheries of the Copper River in Prince
William Sound and provide an average common property harvest
value of $49 million. Over 16,000 fish were contributed by
PWSAC's projects directly to sport fishing harvest in the
communities of Cordova, Whittier, and Chenega and elsewhere
where coho are stocked annually. The Village of Chenega also
received stocked chinook through a cooperative agreement with
ADF&G. Salmon harvesters of all user groups that benefit from
PWSAC projects represent residents from across the state. In
2018 over 30 percent of the Chitina dipnet harvest on the Copper
River was provided by fish returning to the Gulkana hatchery and
annually that hatchery contributes approximately 25 percent of
the famed Copper River red run.
MS. FAIRBANKS showed slide 13 and discussed the Valdez Fisheries
Development Association Inc. (VFDA), which operates the Solomon
Gulch Hatchery to produce pink and coho salmon for the common
property fisheries of Prince William Sound. Solomon Gulch is
currently the largest single pink salmon facility in the state
and is unique its utilization of an early pink salmon stock for
production. The returns of VFDA pink salmon provide early
season harvest opportunity for the Prince William Sound salmon
seine fishery and for the last decade have contributed more than
15 million fish annually to the common property fisheries of
Prince William Sound and Valdez, about 33 percent of seine
harvest in the region overall. In addition, VFDA generates an
annual average of 83,000 returning adult coho salmon, which
represents more than 80 percent of the sport caught coho
harvested in Valdez Arm. The VFDA's coho program also targets
local subsistence opportunity through a small release in the
Valdez area and more than 15,000 VFDA pink salmon are harvested
by sport anglers each year.
10:19:34 AM
MR. REIFENSTUHL began his presentation by following up on an
earlier question regarding sport fish. He explained that the
hatchery programs by statute are supposed to provide a public
good. So, in the sense of providing fish to all Alaskans -
sport fish, subsistence, personal use - the hatcheries are
providing a public good at the expense of commercial fishermen,
which the hatcheries as a group are happy to do. He pointed out
that the hatcheries in Juneau and Ketchikan are received money
from the Division of Sport Fish to produce king salmon for the
local sport fishers in those areas. Responding to Chair Stutes
he confirmed that money is from ADF&G's Division of Sport Fish.
MR. REIFENSTUHL offered his appreciation for the opportunity to
explain the economically important public/private partnership of
hatcheries with the State of Alaska. He stated that hatchery
programs dovetail with the constitutional mandate for
sustainable fisheries management, protection of wild stocks, and
providing a public benefit. The PNP program was signed into law
by Governor Jay Hammond in 1974 and since then has contributed
nearly $2 billion to the common property [commercial] fisheries.
This is without any assessment or evaluation of what the value
is to the sport fisheries.
10:22:10 AM
MR. REIFENSTUHL displayed slide 14 and provided a brief overview
of the aquaculture associations in Southeast Alaska. He noted
slide 14 shows the permitted capacity for each of the four
associations in Southeast Alaska: Northern Southeast Regional
Aquaculture Association (NSRAA), Southern Southeast Regional
Aquaculture Association (SSRAA), Armstrong Keta Incorporated
(AKI), and Douglas Island Pink and Chum (DIPAC).
MR. REIFENSTUHL turned to slide 15 and pointed out that
collectively the four Southeast Alaska PNP hatcheries contribute
$237 million in annual economic output, 2000 annualized jobs,
$44 million in annual ex-vessel value, and $90 million in annual
labor income.
MR. REIFENSTUHL moved to slide 16 and spoke to NSRAA, which
operates one hatchery in Kake, two hatcheries in Sitka, and a
state-owned facility at Hidden Falls on Baranof Island. He
noted NSRAA has a contractual arrangement with ADF&G to operate
the Hidden Falls facility, which was built by the state in 1978-
1980, and NSRAA entered this relationship in about 1988 when the
legislature decided to have all the PNPs run the hatchery
programs.
10:24:25 AM
REPRESENTATIVE KREISS-TOMKINS offered his compliments for
NSRAA's administration of the Kake hatchery. He said NSRAA is
one of the best administered nonprofit organizations he knows in
Alaska.
CHAIR STUTES interjected that she would say all the PNPs are
"right up there," including Southcentral.
MR. REIFENSTUHL quipped he is glad to see that there is partisan
"bickering" in this regard.
10:25:38 AM
MR. REIFENSTUHL resumed his discussion of the Kake hatchery,
which has been putting fish in the water for about four years.
He said 2019 is the first year that the hatchery is going to
have common property openings in or near Kake. It is a big deal
for this small community that is struggling economically. The
expectation is for 1.7 million fish, which will bring in a lot
of boats as well as provide fishing for the locals. He stated
NSRAA has 35 full-time employees and NSRAA operates on an annual
budget of $8 million.
MR. REIFENSTUHL turned to slide 17 told the committee that SSRAA
operates two state-owned facilities, one located in Crystal Lake
near Petersburg and the Klawock hatchery in Craig. It operates
four other hatcheries at Neets Bay, Deer Mountain, and Whitman
Lake near Ketchikan, and Burnett Inlet near Wrangell.
MR. REIFENSTUHL showed slide 18 and stated that DIPAC, the
Macaulay Hatchery, is a premier facility in Juneau. It was
built with fine architecture and lots of art around it because
it is representing Juneau, the capital of Alaska. Ladd Macauley
was a Juneau visionary who began the program in a cave in Kowee
Creek across the bridge from Juneau in the late 1970s and he
grew it into the facility of today. Mr. Macauley was killed by
a drunk driver in a tragic accident nearly 20 years ago, but his
legacy lives on as an outstanding example of what a private
nonprofit can do and what a visionary can accomplish in his
lifetime. Mr. Reifenstuhl noted that DIPAC also operates the
state facility at Snettisham where Juneau gets most of its
power. This facility produces sockeye and some of these smolt
are planted in Sweetheart Lake, which is a program done
specifically for sport and personal use fisheries. Part of the
sockeye program is tied to the Pacific Salmon Treaty and flown
to Canadian lakes each summer. All the programs in Southeast
Alaska are making some contribution based on demands of the
Pacific Salmon Treaty, primarily with chinook and coho
production.
10:29:25 AM
MR. REIFENSTUHL moved to slide 19 and described AKI as a small
PNP near the southern tip of Baranof Island that produces coho,
chum, and pink salmon. He said AKI is the only facility that
produces pink salmon in Southeast, all the other facilities have
chosen not to produce pinks.
MR. REIFENSTUHL noted there are two other hatcheries that
haven't yet been mentioned, both operated by National Oceanic
and Atmospheric Administration (NOAA) Fisheries in its research
facilities, one in NOAA's Auke Bay facility in Juneau and one in
Little Port Walter that has operated since the 1940s.
MR. REIFENSTUHL concluded with slide 20. He invited committee
members to visit any of the fish hatcheries discussed today.
10:30:25 AM
CHAIR STUTES noted the huge Crawfish Inlet return [of chum
salmon] and inquired whether the hatcheries had any
participation in that return.
MR. REIFENSTUHL replied that the chum salmon return to Crawfish
Inlet was from an NSRAA program that was initiated four years
ago. He explained the large return numbers were an unusual
phenomenon never seen before because most of these fish were
three-year-old and chum normally only come back as 3 to 15
percent of a return and there were 3 million of them. It was
permitted by ADF&G in a place that does not have wild stocks.
It was unexpected so NSRAA had to act fast to get a commercial
fishery on it. That project alone was worth about $15 million
to the commercial fishery. If it hadn't been for that program
there would have been dozens of trollers and seiners that would
not have made their season.
CHAIR STUTES asked whether the hatcheries participate in the
NOAA hatchery research program.
MR. REIFENSTUHL responded with his belief that Chair Stutes may
be conflating two different things. He explained that the
hatchery wild investigation is done through the State of Alaska
and has a science panel that includes some retired NOAA
scientists. However, what he specifically mentioned were the
NOAA programs in Auke Bay and Little Port Walter, which are
salmon and other fish research facilities. He surmised that of
these two programs the one this committee would be most
interested in is the one that Mr. Bill Templin testified about
last week.
CHAIR STUTES inquired how hatchery fish stabilize otherwise wild
commercial fisheries.
MR. REIFENSTUHL answered that, because of the low productivity
of wild fish in the mid-1970s, these programs were designed from
the inception to enhance fisheries, not to mitigate habitat
loss, human encroachment, industrial encroachment, agriculture.
None of those things are present in Alaska to any large degree
and the hatchery programs were simply designed to supplement
fisheries for an economic benefit while protecting wild stocks
and being careful with the management of wild stocks during the
prosecution of wild stock fisheries and hatchery returns.
10:34:13 AM
REPRESENTATIVE KOPP asked whether there any research is being
done to see if hatchery produced pink salmon could be displacing
other species.
MR. REIFENSTUHL replied that there has been ongoing research for
over 20 years. Research is primarily being conducted by the
North Pacific Anadromous Fish Commission, which includes members
from Russia, Japan, Canada, the United States, and Korea, and
which has a huge staff. The commission has research vessels
that are associated with universities and some of the individual
countries. He noted that tomorrow he will be delivering a paper
at a meeting of the American Fisheries Society on ocean carrying
capacity, and he can speak quite a bit on the interaction of
specifically Alaska fish near shore with wild stock or in the
greater North Pacific Ocean. Salmon have been studied in the
near shore areas in Juneau and in Prince William Sound. When
studying that to understand the impact, one must know the prey
species is primarily zooplankton and understand the biomass of
that zooplankton and the consumption rate of the fry going out
for both wild and hatchery. That has been done in Icy Strait
and near Juneau and the results are that on a one-day period
when the fish come through and their density has been measured,
they are consuming less than one-half a percent of the
zooplankton available. Generally, the near shore survival is
tied to predators - and that is Alaska's king salmon problem
right now. The best understanding is that it's predators as the
salmon come out of the river into the near shore area and that's
where predation occurs. When there are low survivals, that is
generally where most of the mortality occurs. Research shows
between 50 and 90 percent of salmon die in the first 30-45 days
of their life in the ocean.
10:37:14 AM
REPRESENTATIVE VANCE inquired whether comparisons have been made
on the quality of meat between hatchery fish versus wild stock.
MR. REIFENSTUHL responded that comparisons have been done
between the meat quality of farmed fish and wild chinook and for
the most part people could not tell the difference. He said he
unaware of any experiments with hatchery fish, but he would bet
that people would not be able to tell the difference. The fry
are going out at 2-20 grams, so they are very small and are
going out in the ocean competing for life for 2-4 years. When
they return, they have multiplied in biomass by 20 times. They
are having to swim fast to avoid predators, are having to find
prey, are eating the same kind of prey as their wild cohorts
with which they are mixed, and it would be remarkable for there
to be a difference.
REPRESENTATIVE VANCE clarified that hatchery fish are not farmed
fish.
MR. REIFENSTUHL confirmed Representative Vance is correct and
pointed out that farm fishing is illegal in Alaska. That was
pushed through because commercial fishermen didn't want fish
farming in the state of Alaska.
REPRESENTATIVE VANCE requested Mr. Reifenstuhl to describe the
difference between farmed and hatchery fish.
MR. REIFENSTUHL replied there is a huge difference. He said
[hatchery] fish are small and [the hatcheries] have them for a
short period of their life and then they go into ocean and must
compete for two to four years before they return as adults.
Farmed salmon are kept in raceways or net pens their entire life
and harvested in those pens. Farmed salmon do not have
predators going after them and are fed for their entire life.
They are fed a color dye at the end to bring color to their
meat. One might think there would be a taste difference or that
a consistency difference could be felt because all those fish
must stay upright in their net pens since they aren't avoiding
predators and there possibly could be a difference. But in the
tests that he is aware of not everybody could tell the
difference.
REPRESENTATIVE VANCE remarked that she thinks Alaskans could
tell the difference.
10:40:13 AM
REPRESENTATIVE KREISS-TOMKINS asked whether there is any
research into adult hatchery salmon returning from the ocean
preying on wild and hatchery salmon fry, given adult salmon are
known to eat salmon fry.
MR. REIFENSTUHL confirmed there has been such research. He
shared information from a recent paper that speculates there
could be a negative relationship between Southeast Alaska pink
salmon - so not hatchery fish - and coho. He said he would
dispute the data and thinks it is a correlation that may have
been teased out. He stated he thinks the research shows that
there is more of a positive relationship on large pink salmon
years, general there is large coho returns as well. He agreed
there is cannibalism - larger fish eat smaller fish, so
undoubtedly some hatchery fish like a coho that is going to feed
on some pink, chum, or king salmon fry. Another way to look at
it is that the large release of hatchery fish can actually be
predator shelters in that when large numbers of pink and chum
salmon are released as fry and there are predators out there,
and comparatively there are small numbers of king or coho fry
mixed in, there is going to be more hatchery fish picked off,
called predator sheltering, than there would be the wild fish.
He qualified that that has not been proven but has been
speculated on.
10:43:24 AM
DAN LESH, Senior Analyst, McDowell Group, provided a PowerPoint
presentation titled "Economic Impacts of Alaska's Salmon
Hatcheries," a project completed in 2018 and for which he was
the project manager (slide 1). Addressing slides 2-3, he noted
the McDowell Group was founded in 1972 and studies the economic
impacts of nearly every major industry in Alaska. He said
McDowell Group has conducted well over a dozen economic impact
reports for the various hatchery associations over the years,
though this is the first time to look at all the groups together
collectively. As well, McDowell Group does dozens of other
projects looking at other aspects of the seafood economy in
Alaska every year.
MR. LESH turned to slide 4 and stated that McDowell Group has
very good data from the Alaska Department of Fish and Game
(ADF&G) on the fish as they are harvested both in sport and
commercial fishing in terms of their hatchery origin. He said
four types of economic impacts were added up to come to the
total number that he will present at the end: commercial
fishing income, value added in seafood processing, nonresident
spending on sport fishing, and the economic impacts of the
hatchery operations themselves. Businesses in these four
sectors, as well as the employees, will spend money they earn
from hatchery fish in the economy, which is called by several
different names - secondary effects, multiplier effects,
indirect effects, or induced effects. McDowell Group uses its
40 years of experience conducting studies, along with an
economic modeling program called IMPLAN, to look at those
secondary effects. This specific study conflates a 6-year
period and takes an average across those years to account for
the fluctuations in salmon returns. There are many ways in
which the estimates are conservative, including a focus on new
money. For example, the focus is on nonresident spending
because an argument could be made that a lot of the spending by
residents on hatchery fish would be happening anyway.
MR. LESH showed slide 5 and discussed hatchery funding sources.
He recalled a question about sport fish money that comes to some
of the PNPs to support chinook development and said some of that
money did come from ADF&G. However, he explained, that money is
a pass-through from the federal Dingell-Johnson funds. He noted
that 79 percent of the collective budgets of the hatcheries
comes from cost recovery fisheries and [11 percent] comes from
the Enhancement Tax.
MR. LESH moved to slide 6 and reported that the combined ex-
vessel value to fishermen from the harvest and sale of hatchery-
originated salmon is $120 million. Continuing to slide 7, he
explained that $120 million is the average per year and that the
value varied from year to year during the six years of the
study. The $120 million represents 22 percent of the total
value of all Alaska salmon harvests.
10:46:53 AM
MR. LESH displayed slide 8 and provided more details regarding
commercial fishing earnings. He specified that the $120 million
goes to pay crew, expenses, taxes, and the owner's income or
profits. Between the crew and the owners, about 60 percent, $71
million, is [direct] labor income. Through multiplier effects,
an additional $24 million in labor income is created in support
sector businesses, such as marine services and grocery stores.
About 8,000 fishermen earn some income from the harvest of
hatchery fish. Because not all the fishermen's income is from
hatchery fish and because many are seasonal jobs, that figure
when condensed down to annualized jobs tied only to hatchery
fish comes to 1,040 annualized commercial fishing jobs and 1,540
annualized jobs including multiplier effects.
MR. LESH turned to slide 9 and noted that fishermen sell their
harvested fish to processors where the fish are converted into
various products, such as canned salmon, fillets, "H&G" products
that are sold for additional processing outside the state, roe
products, which total into a first wholesale value of $361
million. Continuing to slide 10, he explained that the $361
million is the average per year and that the value varied from
year to year during the six years of the study. In 2013 it was
nearly $500 million in wholesale value from hatchery fish. The
$361 million represents 24 percent of the total value of all
salmon products produced in Alaska.
MR. LESH moved to slide 11 and pointed out that hatchery fish
are available for anyone to catch and some hatcheries are set up
particularly to benefit sport, personal use, and subsistence
fishermen. He noted that the photograph on this slide was taken
at the very popular Sweetheart Creek near Juneau, which benefits
many households in Juneau, including his own. He related that
across the state over the six-year study period, an average of
10,000 chinook, 100,000 coho, and 138,000 sockeye of hatchery
origin are harvested annually in sport, personal use, and
subsistence fisheries. Displaying slide 12, he pointed out that
the report provides information on individual communities and
their sport fisheries that are supported by hatcheries. One
example is the thriving recreational fishing industry in Valdez,
with nearly 30 charter operators, three fishing derbies, and a
bustling harbor. In 2019 Valdez is going to open a new harbor
for the commercial salmon fishing fleet, but still anticipates
having 200 people, mostly recreational boaters, on the wait list
for slips. To a large degree, this activity is driven by the
coho production in Valdez. He reminded the committee that this
is only the spending by nonresidents on such things as charter
fishing and boat rentals.
10:50:12 AM
MR. LESH displayed slide 13 and specified that when commercial
fishing, seafood processing, hatchery operations, and sport
fishing are added up it comes to [an annual economic impact] of
4,700 jobs across the state tied to hatchery production, $218
million in labor income, and $600 million in economic output.
Continuing to slide 14 and elaborated that about two-thirds of
the $218 in labor income is direct labor income and one-third is
the secondary impacts. Commercial fishing and seafood
processing are roughly equal in the labor income [43 percent and
38 percent, respectively,] hatchery operations is 11 percent,
and sport is 8 percent.
MR. LESH showed slide 15 and explained that a total of 16,000
jobs are impacted by the harvest of hatchery salmon in some way.
When condensed for seasonality and other issues, it is 4,700
annualized jobs. Annualizing of these jobs is done to make
these numbers more comparable with other industries.
MR. LESH turned to slide 16 and elaborated that the $600 million
in economic output is the combination of the labor income and
the spending in the economy. He further elaborated that the
harvest and sale of hatchery fish generates an annual tax
revenue, on average across the study period, of $3.6 million in
Fisheries Business Tax revenue; and a large portion of the
Kodiak Island Borough raw fish taxes which total $1.3 million.
He further elaborated that the sales, property, fuel, and other
taxes that are [generated] by the hatchery fish are very
important across the state and are the topic of a current study
that is being conducted.
MR. LESH concluded by stating that it is clear from his and the
previous presentation that hatchery production is a cornerstone
of Alaska's seafood industry. He pointed out that 4,700
annualized jobs are about 13 percent of the total jobs in
Alaska's seafood industry.
10:53:08 AM
REPRESENTATIVE KREISS-TOMKINS commented on the positive indirect
benefits of hatcheries. He noted that the commercial fishing
industry pays its own way in raw fish tax and Commercial
Fisheries Entry Commission (CFED) licensing fees in relation to
the cost of ADF&G's Division of Commercial Fisheries. He stated
it seems the commercial fishing industry is also paying out
millions of dollars through foregone revenue with cost recovery
and/or direct enhancement revenues that benefit Alaska
collectively. It is paying CFEC, the State of Alaska, as well
as all Alaskans in certain sense by underwriting this common
benefit.
MR. LESH concurred.
10:54:44 AM
REPRESENTATIVE KOPP inquired whether the study was able to
identify jobs and the economic benefit breakdown that could be
tied back to the percent of fish that are hatchery versus wild.
MR. LESH answered yes and explained that the study assessments
accounted for this [when calculating the benefits of hatchery
caught fish].
REPRESENTATIVE KOPP asked whether the commercial sport operators
were looked at as being in the commercial fishing category for
income or the sport fishing category.
MR. LESH replied that commercial sport operators, such as
charter boat captains, were reported in the sport fishing
category and were the bulk of that income that he mentioned.
REPRESENTATIVE KOPP inquired whether the figures for seafood
processing sector came just from the commercial seafood
processors or also included processors of sport caught fish.
MR. LESH responded that that is one of the ways the study is
conservative - it didn't capture any of the sport specialized
processors in its economic impacts; it is an additional impact.
REPRESENTATIVE KOPP remarked that on the Kenai Peninsula there
are a dozen shops in a mile of road [that process sport caught
fish].
10:58:07 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 10:58
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Koniag-Letter of Opposition Transfer of Hab. and Subsist. Division Directors.pdf |
HFSH 3/19/2019 9:45:00 AM |
|
| Statewide Hatchery Economic Impacts by McDowell Group.pdf |
HFSH 3/19/2019 9:45:00 AM |
|
| Regional Aquaculture Assoc. Presentation on Hatcheries print.pdf |
HFSH 3/19/2019 9:45:00 AM |