01/27/1995 03:30 PM Senate RES

 SRES - 1/27/95                                                                
          SB   3 ANTITRUST EXEMPTION FOR FISHERMEN                         
                                                                               
 Number 001                                                                    
                                                                               
 CHAIRMAN LEMAN called the Senate Resources Committee meeting to               
 order at 3:30 p.m. and announced SB 3 to be up for consideration.             
                                                                               
 SENATOR DUNCAN, sponsor, said the bill will allow fishermen to form           
 associations to collectively negotiate raw or processed fish prices           
 with processors.  It does not authorize processors to agree among             
 themselves on the prices they will pay fishermen.                             
                                                                               
 Senator Duncan explained that once the State Legislature has                  
 approved this legislation the state fishermen and processors would            
 be in a position to request a federal exemption and said that the             
 attitude in Congress is favorable now that the Alaska delegation is           
 in the majority.                                                              
                                                                               
 Number 102                                                                    
                                                                               
 ED CRANE, Commercial Fishing and Agriculture Bank, said he didn't             
 see any immediate interest for CFAB with this legislation.  He has            
 personal views based on his considerable experience with producers            
 and marketers of agriculture commodities of all kinds.  He said               
 that a producer of commodities is greatly disadvantaged by his or             
 her isolated status within what may be a huge conflagration of                
 economic forces.  They are further made vulnerable by the limited             
 life nature of most commodities.  There has probably been no more             
 positive statutory force affecting commodities producers than the             
 limited antitrust exemptions in federal and most state statutes.              
 These are the cornerstones of the stability which is critical to              
 any food production and distribution system.                                  
                                                                               
 Mr. Crane reiterated that SB 3 establishes and clarifies this                 
 important exemption for harvesters, producers, and marketers of               
 Alaska seafoods' great resources.                                             
                                                                               
 Number 154                                                                    
                                                                               
 DORNE HAWXHURST, Cordova District Fishermen United, supported SB 3            
 because it clarifies ambiguities in existing law, it might remove             
 inconsistencies between state and federal laws, and it might remove           
 negative obstacles to negotiating a higher price per pound for                
 producers of consistently good quality fish.                                  
                                                                               
 Number 201                                                                    
                                                                               
 RICK LAUBER, Pacific Seafood Processors Association, said the                 
 members of his association have had significant difficulties in               
 dealing with fishermen who wish to discuss matters with them and              
 the state of Alaska who would like to bring together fishermen and            
 processors to help in price negotiations where there have been                
 price disputes.  Because of the state and federal antitrust laws,             
 it has been very difficult to do this.                                        
                                                                               
 Currently, Mr. Lauber said, the federal sentencing guidelines for             
 antitrust violations have a minimum sentence of 18 months in a                
 federal penitentiary.  So this is obviously treated as a very                 
 serious matter.                                                               
                                                                               
 This bill is very clear that it would not allow processors to get             
 together outside of fishermen being present and discuss prices or             
 any kind of price fixing, he said.  It would allow fishermen and              
 processors to be in the same room when price is discussed.                    
                                                                               
 He thought it more likely if we changed the state law that we would           
 get some relief from the federal law.                                         
                                                                               
 Number 284                                                                    
                                                                               
 DEAN PADDOCK, Bristol Bay Driftnetters Association, strongly                  
 supported SB 3 as a constructive piece of legislation.  Fishermen             
 need more tools like this.  He supported Mr. Lauber's remarks.                
                                                                               
 Number 297                                                                    
                                                                               
 JERRY MCCUNE, United Fishermen of Alaska, supported SB 3.  He said            
 it is impossible to have a discussion on price with any processors            
 present.  He used the example of the Exxon Valdez oil spill where             
 fishermen had many discussions with the processors about the                  
 perception of the seafood and effect on price, but on the mention             
 of the word "price" the room clears out.                                      
                                                                               
 Number 317                                                                    
                                                                               
 DONNA PARKER, Fisheries Specialist, Department of Commerce and                
 Economic Development, strongly supported this bill.                           
                                                                               
 She said a couple of years ago Governor Hickel appointed a Salmon             
 Strategy Task Force which was specifically designed to look at the            
 price declines of salmon.  She said the Department of Law                     
 recommended this legislation as a possible way to better position             
 ourselves in the marketplace.                                                 
                                                                               
 The market strategy was to expand marketing efforts, increase                 
 product options to consumers, improve consistency of quality, and             
 reduce the cost of production, Ms. Parker said.  This legislation             
 addresses the component of increasing the value of our salmon by              
 increasing the options we provide to consumers with products they             
 want, specifically frozen convenience style foods - a market which            
 requires a stable price, a stable supply, and quality.                        
                                                                               
 The DCED undertook a study of a comparison of Canadian and Alaskan            
 salmon prices to find out why Canadian producers were getting more            
 money for their salmon.  There were several reasons, but one of               
 them was that they negotiate 3-year price agreements.                         
                                                                               
 Ms. Parker said the DCED offers an 11-minute video describing the             
 salmon strategy that was developed and how the legislature and                
 other agencies might facilitate that.                                         
                                                                               
 SENATOR LEMAN thanked everyone for the testimony and said the                 
 Committee would take SB 3 up at the next meeting.