October 12, 2011

Economic transition in Western Alaska communities; traditional salmon fishery dependence and emerging groundfish fishery dependence.

Scott A. Miller, NOAA Fisheries Industry Economist, Alaska Region Analytical Team

Diana Stram, Nicole Kimball, Council Staff

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Chinook Salmon Bycatch Management History

•  In the mid-1990s, NMFS implemented regulations recommended by the Council to control the bycatch of Chinook salmon taken in the Bering Sea pollock fishery. Chinook Salmon Savings Areas, and mandated year-round accounting of Chinook salmon bycatch in the trawl fisheries (29,000 Chinook salmon trigger)

•  The Council started considering revisions to salmon bycatch management in 2004, when information from the fishing fleet indicated that it was experiencing increases in Chinook salmon bycatch following the regulatory closure of the Chinook Salmon Savings Areas.

•  In 2002, participants in the pollock fleet started the VRHS ICA for Chinook salmon. The exemption to area closures for the VRHS ICA was first implemented through an exempted fishing permit in 2006 and 2007 subsequently, in 2008, through Amendment 84 to the BSAI FMP

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Record Chinook Bycatch

From 1992 through 2002, the annual average Chinook salmon bycatch in the pollock fishery was 32,665 Chinook salmon.

Chinook salmon bycatch numbers increased substantially from 2003 to 2007. The average from 2003 to 2007 was 74,067 Chinook salmon, with a bycatch peak of approximately 122,000 Chinook salmon in 2007.

In light of the high amount of Chinook salmon bycatch through 2007, the Council and NMFS began analysis of new measures to minimize bycatch to the extent practicable while achieving optimum yield.

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Council Problem Statement

The Council intends to develop an adaptive management approach which incorporates new and better information as it becomes available. Salmon

bycatch must be reduced to address the Council’s concerns for those living in rural areas who depend on local fisheries for their sustenance and livelihood and to contribute towards efforts to reduce bycatch of Yukon River salmon under the U.S./Canada Yukon River Agreement obligations. The Council is also aware of the contribution that the pollock fishery makes in the way of food production and economic activity for the country as well as for the State of Alaska and the coastal communities that participate in the CDQ [Community Development Quota] program; and the need to balance tensions between National Standard 1 to achieve optimum yield from the fishery and National Standard 9 to reduce bycatch.

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Outreach Meetings

Bering Sea Elders Advisory Group:

“Our subsistence practices and, specifically, ties to salmon go beyond commercial value or the monetary replacement cost of food. The English language term “subsistence” is not in our Yupik language and does not describe the totality of our ties to salmon.

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Bering Sea Elders Advisory Group

Traditionally, Alaska Native peoples derive t their food, nutrition, ethics, and values of stewardship, languages, codes of conduct,

stories, songs, dances, ceremonies, rites of passage, history, and sense of place and spirituality from the lands, waters, fish, and wildlife they have depended on for millennia. Many White persons imagine that subsistence is merely the act of an individual going hunting or fishing. Subsistence, in actual fact, is a complicated economic system and it demands the organized labor of practically every man, woman and child in a village. There are countless tasks, such as maintenance of equipment…, preparing the outfit for major hunting and fishing expeditions…dressing thousands of pounds of fish….sharing harvest of meat and fish with other communities.

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Public Testimony at Final Action

•  Subsistence Lifestyle •  Pollock Industry •  Individual Fishermen •  Fishery Dependent Community Representatives •  Community Development Quota Representatives

•  The surprise: A CDQ Program Perspective, the Coastal Villages Region Fund of the coastal Kuskokwim area.

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April 2009 - 100+ Residents support Pollock and Chinook Anchorage - North Pacific Fishery Management Council Meeting (CVRF 2010 Benefits Catalog)

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Community Development Quota Program

• The Western Alaska Community Development Quota (CDQ) Program designates a portion of the fishery quotas for exclusive use by eligible western Alaska villages. • The purpose of the program is to provide western Alaska communities the opportunity to participate and invest in BSAI fisheries, to support economic development in western Alaska, to alleviate poverty and provide economic and social benefits for residents of western Alaska, and to achieve sustainable and diversified local economies in western Alaska.

The CDQ Program

• A total of 65 villages are authorized under section 305(i)(1)(D) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) to participate in the program. • These communities participate in the CDQ Program through six nonprofit corporations (CDQ groups) including the Aleutian Pribilof Island Community Development Association (APICDA), the Bristol Bay Economic Development Corporation (BBEDC), the Central Bering Sea Fishermen’s Association (CBSFA), the Coastal Villages Region Fund (CVRF), the Norton Sound Economic Development Corporation (NSEDC), and the Yukon Delta Fisheries Development Association (YDFDA). CDQ groups use the revenue derived from the harvest of their fisheries allocations to fund economic development

The CDQ Program

• Currently, the CDQ Program is allocated portions of the groundfish fishery that range from 10.7 percent for Amendment 80 species and 10 percent for pollock to 7.5 percent for most other species.

• NMFS further allocates pollock, other groundfish, crab, and prohibited species quota among the six CDQ groups based on recommendations made by the State of Alaska in 2005. The 2006 revisions to the Magnuson-Stevens Act fixed the percentage allocations for each fishery at the 2006 levels. A review of each CDQ group’s continued eligibility for these allocations will occur in 2012 and every 10-year period thereafter.

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CDQ Royalties

•  CDQ groups receive royalty payments on each allocation harvested by a partnering firm. Since the CDQ program was implemented, individual groups have used royalty revenue to support the goals of the CDQ program.

•  Royalty revenues support CDQ projects, which encourage sustainable fishery-based economic development in the region or promote the social development of a community or group of communities that are participation in a CDQ Program.

•  Pollock royalties have historically represented about 80 percent of the total annual royalties from the CDQ allocations, and the value reached $50 million in 2007.

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CDQ Revenue From Investments

• Large capital investments in vessels, infrastructure, processing capacity, and specialized gear. Local programs purchase limited access privileges in a fishery and acquire equity position in existing fishery businesses including halibut, sablefish, and crab.

• In 2008, the six CDQ groups had total revenues of approximately $190 million, of which approximately 65 percent, or $123 million, were derived from revenue sources other than royalties (WACDA 2008).

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Kuskokwim River Stock Status

• The Kuskokwim area Chinook and Chum runs and harvests declined significantly through the late 1990s. • In 2000, the State of Alaska Board of Fisheries designated Kuskokwim River Chinook and chum salmon as stocks of yield concern because of the chronic inability to maintain near average yields despite specific management actions taken annually. (Burkey et al. 2000). • However, in the following years, more restrictive management and perhaps improved ocean survival resulted in near record runs from 2005 through 2007, which led to the stock of concern finding being lifted, for both Chinook and chum in January 2007

Borough/Census Area Local Residents Who Bought Commercial Crew Licenses

2004 2005 2006 2007 2008 2009

Bethel Census Area 583 654 536 582 524 609

Wade Hampton Census Area 526 643 447 727 557 477

Local Resident Total 1,109 1297 983 1,309 1,081 1,086

Region's Harvest Total 2,733 2,738 3,134 3,045 2,707 2,986

Source: Commercial Fisheries Entry Commission

Borough/Census Area Residents Who Fished Their Permits

2004 2005 2006 2007 2008 2009

Bethel Census Area 676 693 658 691 662 621

Wade Hampton Census Area 520 547 545 539 472 408

Local Resident Total 1,196 1,240 1,203 1,230 1,134 1,038

Region's Harvest Total 1,055 1,092 1,048 1,006 897 987 Notes: "Region's Harvest Total" represents total fishermen who fished in the region's fisheries. Permit

holders do not necessarily work in their local fisheries.

Source: Commercial Fisheries Entry Commission

Year Gear Type Total Estimated Workforce1

Total Gross Earning of Permit Holders2

Percent of Gross Earnings Earned by Nonresident Permit Holders

2003 Set-net 1,713 $1,890,795 ND 2004 Set-net 2,214 $3,240,140 ND 2005 Set-net 3,226 $2,908,123 ND 2006 Set-net 3,108 $4,384,238 ND 2007 Set-net 3,099 $3,557,034 ND 2008 Set-net 2,830 $2,686,837 ND 2009 Set-net 2,517 $2,155,988 ND

2003 Total 1,919 $2,939,374 ND 2004 Total 2,805 $4,517,680 ND 2005 Total 3,814 $3,576,085 ND 2006 Total 3,327 $4,404,286 ND 2007 Total 3,721 $4,786,208 ND 2008 Total 3,366 $3,552,485 ND

2009 Total 3,020 $5,941,948 ND

ND: Nondisclosable 1'Workforce' refers to the number of fisherman fishing permits plus the requisite crew members needed for the permit(s) they fish. Regional crew member counts are estimates derived by applying a crew factor to catch data. For more, see the Methodology section. 2Gross earnings, or revenue, are currently the most reliable data available, but are not directly

comparable to wages as expenses have not been deducted.

Source: Commercial Fisheries Entry Commission.

Fish harvesting employment and gross earnings by gear type, 2003-2009, Yukon Region.

All Species1

Year Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

Monthly Average

2003 0 0 0 0 118 1,302 1,100 992 216 0 0 0 311

2004 0 0 0 0 108 1,396 1,264 914 438 0 0 0 343 2005 0 8 0 0 90 2,034 1,783 1,329 338 26 0 0 467 2006 0 0 0 0 120 1,655 1,342 1,416 108 0 0 0 387 2007 0 0 0 40 48 1,720 1,438 1,576 322 0 8 0 429 2008 0 0 0 0 0 845 1,556 1,749 612 24 0 0 399 2009 2 0 0 0 0 1,262 1,812 1,314 172 0 14 4 382

Salmon

Year Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Monthly Average

2003 0 0 0 0 0 1,302 1,100 992 216 0 0 0 301

2004 0 0 0 0 0 1,396 1,264 914 438 0 0 0 334 2005 0 0 0 0 0 1,776 1,482 1,242 338 0 0 0 403 2006 0 0 0 0 0 1,630 1,342 1,416 108 0 0 0 375 2007 0 0 0 0 0 1,376 1,044 1,478 290 0 0 0 349 2008 0 0 0 0 0 594 1,236 1,540 582 0 0 0 329 2009 0 0 0 0 0 1,078 1,480 1,182 124 0 0 0 322

1A small number of fishermen in unknown or other fisheries are included in the totals; however, they are not listed separately in this exhibit.

Source: Commercial Fisheries Entry Commission; National Marine Fisheries Service and ADOLWD, Research and Analysis Section

Fish harvesting employment by species and month, 2003 - 2009 Yukon Delta Region

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Kuskokwim Area Processing Constraints

Over this time, real Chinook value peaked in 1989 at $538,052, when it represented 10 percent of the overall real value. The decline in catch, combined with declining salmon prices since the early 1980s, have depressed Chinook fishery value below $1,000 in 2001, 2002, 2003 and 2007. The low of the period was $350 in 2002.

In 2007, a lack of processing capacity and commercial interest, and continued poor chum salmon market conditions resulted in no commercial openings in June and July during the bulk of the Chinook, sockeye, and chum salmon runs.

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CVRF Investments and Programs

•  Scholarship and Training Program, Internships, Youth to work. •  16 Community Centers: Welding, fabrication, small engine

repair, general maintenance, and community gathering place. •  Employment training •  Processing Capacity: Goodnews Bay ($4.7 million spent) •  Local Fish buyer. •  Tender Fleet •  Marine Safety Program •  Local Employment: Salmon, halibut and herring harvesting

and processing •  Fishermen’s advances

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CVRF Investments and Programs

•  Youth Leadership Program •  Heating Oil Assistance Program •  Tax Assistance •  Project Management Assistance •  Funding and Technical Assistance

Source: CVRF Annual Reports, CFRF Benefits Catalogs available at http://www.coastalvillages.org/

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Important Salmon Fishery Impacts

•  Consistent Salmon processing, and tendering

•  Locally based employment in Salmon harvesting and Processing

•  Locally based workforce development •  Building business experience and knowledge through CDQ

operations, for nearly two decades!

•  Providing for rejuvenation of the local commercial salmon fisheries infrastructure.

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The Questions?

Are the CVRF communities transitioning from traditional commercial salmon dependence to dependence on CDQ groundfish fisheries?

Is the commercial salmon fishery declining in importance relative to other fishery revenue?