Legislature(1995 - 1996)
04/05/1995 06:06 PM House FSH
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 265 - EXPORT OF DUNGENESS CRAB PETE ECKLUND, Administrative Assistant to Representative Bill Williams, testified, "Plain and simple HB 265 is an economic development bill. Representative Williams introduced this bill in response to a constituent who was struggling to develop a live crab market in British Columbia. Currently, if you have an established out-of-state live dungeness market, you are required by law to ship your product through the air. Air transportation of live crab is tricky and, in many cases, cost prohibitive. As we all know, there are frequent weather and other delay problems associated with flying in Alaska. These problems don't particularly lend themselves to crab surviving the journey to the marketplace. Despite these obstacles, air transportation is the only way to get live crab to markets which are many miles away. There are markets which are much nearer to Alaska that could be developed if the cost of air transportation wasn't involved." Representative Williams has constituents that are trying to make in-roads into the British Columbia live dungeness market. Requiring them to airfreight their catch to either Prince Rupert or Seattle has a crippling effect on their ability to capture a place in the growing B.C. market. HB 265 would remove the air transportation only restriction when shipping live dungeness crab out of state. This would allow entrepreneurs to use other means when transporting dungeness crab to the nearby markets of B.C. Lifting the restriction is beneficial for a couple of different reasons. First, it would lower costs. Second, it could improve the survivability of the product on its way to market. Passage of HB 265 is just one small step we can take to help Alaskans better compete in the international marketplace." REPRESENTATIVE KIM ELTON asked, "I noticed in the position paper they said, `If you're doing this for dungeness, why not do it for king and tanner?' Did the sponsor think about that?" MR. ECKLUND responded, "We were, first of all, concerned just with the dungeness crab because that's who our constituency was, that's the market that they can access is the dungeness crab market. And B.C. is close. So there's an advantage by maybe doing it by vessel transportation or road through Hyder, possibly. So we didn't feel necessarily that we had to lift the other restrictions also. But, Fish and Game did recommend that possibly doing that, they didn't see any problem with it. We've been checking around trying to see if there will be any opposition to that and it's my understanding that there may be some processors that have some initial apprehension with that but I don't know, if we lifted the ban on king crab, if somebody in the Aleutians would necessarily be able to transport by boat to Japan, or to wherever. I don't know if that is feasible, just because of the miles that would have to be traveled. So I don't know if some of those processor's concerns are valid or not." Number 300 MR. ECKLUND continued, "Our office got a call from the Department of Law last Friday and I believe there's a memo in your packet from the Department of Law that kind of deals with that. I guess the statute in the books pertaining to the restriction is from the late 60s and there's interstate commerce laws that came into effect after that and the whole statute may be in conflict with the interstate commerce laws that are on the books. I guess up to this date, nobody has challenged that law in court and in the Department of Law's memo they state that the state of Alaska may have a defense if it wants to continue the restriction, may have a defense in the area of health and safety concerns. But they recommended, it kind of seems the Department of Law stated that dungeness crab possibly has the most concern for PSP and other health and safety issues and if we lifted the restriction for dungeness crab only would weaken the possible defense for health and safety reasons." Number 328 REPRESENTATIVE OGAN expressed concern that not all crab would be reported by an exporter. MR. ECKLUND indicated that there is a monitoring procedure in place "and if somebody wanted to skirt around those, they would take the risk of getting caught." GERON BRUCE, Legislative Liaison, ADF&G, "I really don't think this is any different than the situation we have now where you have people air freighting salmon, for example, out of the state to markets in Seattle or other places during the season. They're required, before you directly market fish out of the state, you have to comply with a number of steps and we've had very good compliance with that. In fact, the Department of Revenue, I believe in 1991, did an actual study of the fish tax and found that the compliance was extremely high. And one of the things they have to do is file with the Department of Fish and Game. We have to get the fish tickets. They have to prepay a certain amount of tax. There are a number of protections in place. And in the case of the export of salmon from the state by catcher-processors, which has become very common in the last ten years because of the poor salmon prices in some seasons, so some fishermen are trying to go directly to markets." Number 374 REPRESENTATIVE OGAN asked if a crab fisherman couldn't simply sell crab off the dock in British Columbia. MR. ECKLUND indicated that crab fisherman would have to obtain a processor's license and meet a bonding requirement to sell that way. REPRESENTATIVE ELTON asked if the intent was to sell the crab to processors or "grocery stores" in Canada. He added, "Are we displacing product that would otherwise go to Alaska processors?" MR. ECKLUND deferred to the teleconference participants and added that there are currently no crab processors in Ketchikan and some prevailing reluctance to participate in the live crab market due to high air transportation costs and the mortality risk. Number 414 REPRESENTATIVE ELTON asked, "Is there no live market because DEC is requiring that the crab be sectioned because of PSP?" MR. ECKLUND said he didn't believe DEC was the problem, just economics. REPRESENTATIVE ELTON pursued, "So if in fact DEC had restrictions on the export of live crab due to PSP concerns, those restrictions would apply whether the live crab were being sent to Prince Rupert or being sent to Seattle?" MR. ECKLUND replied, "It's my understanding that the way the process works with DEC and PSP reporting is that fishermen send in samples from the fishing grounds to DEC. They test for PSP. They test for other things other than PSP also. It takes less than 24 hours. They get that information back to the fishing grounds whether that area is acceptable or not. (Indisc.) And if it comes back that it's not acceptable, then the fishermen are not supposed sell crab from that area." MR. BRUCE concurred and said, "The problem with PSP and dungeness crab was only recently identified as a problem and it exists only in certain parts of the crab and it's on an area specific basis the way it's been handled as far as prohibiting the sale of live crab. They sample the crab, find out if there is a problem and then prohibit live sale." Number 436 REPRESENTATIVE MOSES said shipping live crab out of Dutch Harbor has been a real problem because the only place they can be tested is a lab in Palmer. CHERYL SUTTON, Administrative Assistant to Representative Moses, interjected, "They do test. They test by different species and it's broken out by area, in the state. They take, from vessels, directly and they've a very small sample base and it's a little bit of a problem right now for live shippers because they sample in, the product goes to Palmer, it is not turned around in 24 hours. Frequently, it's delayed sometimes up to several weeks. In the meantime, as you know, a fishery is a short execution." She added, "One person we're dealing with in particular, is a shipper who does not have a processing license so she is not able to take crab she has purchased live with the intent to ship live. (Indisc.) So for her, it's a matter of commerce but it's not because of the cost of shipping live crab which she has a huge market in Japan for live crab. It's because the PSP margin program and the inadequacies of the data collection and the turnaround for the data collection. I'm working on this now. DEC is attempting to change the program but I can see that they could have problems with live vessel transports with the current monitoring program but they're hoping to work some of these things out." Number 470 CHAIRMAN AUSTERMAN said these issues should be addressed by DEC, although there was not an agency representative present, and voiced concern about the contents of the Attorney General's letter. DON MUNHOVEN testified via teleconference from Ketchikan saying, "I'm a licensed processor and I've developed some markets here in town for live shrimp and live crab down in Canada, down in British Columbia and this is a problem we've run into. The last two years we've been shipping live, running our own live shrimp or prawns down to Prince Rupert and then they truck them down to Vancouver. And they also truck crab down from Prince Rupert down to Vancouver. So that developed a different idea here. We're trying to develop different markets for fishermen here in Ketchikan and so we looked into it and looked into it and ran into a little glitch here on this law that we're trying to change to be able to transport or be able to buy crab from the local fishermen and create markets and be able to transport them live by boat." He then cited the expense of packaging materials and mortality problems. He added, "Before you even take any fish out of the state, you have to go through customs and then you go and go through customs through British Columbia, or through Canada and they give you an inspection. They check your vessel and you have to have a landing permit before you can even deliver crab, or any kind of seafood and then when you come back, you come back to customs, deliver your fish tickets, your permits, the whole nine yards so they really keep a close eye on how many pounds you deliver, how many pounds you pick up or buy. If I buy crab, I have to check with customs here before I even go to Rupert." Number 545 PAT KRISTOVICH, testified via teleconference from Ketchikan, he said, "They don't have a DEC problem down there (Canada) with the testing of crab. (Indisc.) We don't have a market, we're a limited market here. One year we came in here and Silver Lining was supposed to buy our crab. We came in with 1800 crab and they said they're not going to buy them. We ended up putting 700 back loose, overboard. (Indisc.) We have one market here and you can flood that. You can't take care of two boats with any amount of crab. Right now the Canadians are fishing on the grounds that we were fishing at. In fact I picked up 70 Canadian pots on the American side a week ago and they had 690 softshell and female crab that the Vietnamese are fishing down and them people don't throw anything back. So apparently the Canadian government doesn't care about undersides or softshell. We're limited, we can't do this. Our season closes the 28th and they don't have a season over there. All I'm trying to say is, we're not looking for a longer season, we're just looking for another market." Number 574 REPRESENTATIVE OGAN asked if shipping crab on a boat would be less ideal than airfreighting. MR. KRISTOVICH explained the cost of the boxes, shipping material, handling and travel to the airport and the odds of getting the crab "bumped." He said, "From where I'm fishing on the grounds, it's only a five and a half to six hour run to Prince Rupert." REPRESENTATIVE ELTON asked about the time when Mr. Kristovich brought 1800 crab into Ketchikan but the processor wouldn't buy them. He said, "When that happened, do you know whether there were DEC regs in place that required sectioning because of PSP? MR. KRISTOVICH said it was because of the DEC-PCP scare up north that the processor did not want to purchase the crab. He added, "They still won't have anything to do with them down here (in Ketchikan.)" Number 612 REPRESENTATIVE DAVIS pointed out that for the Ketchikan area, this legislation makes more sense due to its proximity to the Canadian market versus other areas where nothing but air transport would be viable. CHAIRMAN AUSTERMAN said he did not want to open "pandora's box" by isolating dungeness crab. REPRESENTATIVE ELTON voiced concern that all crab transported by boat need and might not get the PCP tests by DEC. Number 642 MR. ECKLUND said he thought that samples are sent in from each open crabbing grounds. MR. BRUCE added, "There is also preseason testing of (crabbing) areas that occurs." CHAIRMAN AUSTERMAN pointed out this bill could move to Resources for further scrutiny. REPRESENTATIVE MOSES asked if this restriction was removed on king crab, if it would be difficult to control in the Bering Sea "where they were hauling to Japan." Number 696 MR. BRUCE said, "If a catcher vessel were marketing its own product and taking it directly to Japan. They would have to have to go through the same hoops that Mr. Munhoven described earlier. They would have to get a processors license, they would have to file all this paperwork, and they would have to report. They would have to go through the same hoops. Whether or not there would be a greater margin for someone to not report in that kind of situation where they're taking it to Japan, I can only speculate." REPRESENTATIVE MOSES said, "I can just envision a little black market starting up," and asked if this was a far-fetched notion. MR. BRUCE said, "I think administratively you could develop some of them (controls) if you felt it was necessary. He then described the differences between the king and dungeness crab fisheries. TAPE 95-21, SIDE B Number 005 REPRESENTATIVE OGAN suggested HB 265 not move but be fully explored here in the Fisheries Committee.
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