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.