On October 5, 2020, the Alaska Department of Fish and Game (ADF&G) released its “Section 12005 CARES Act Relief for Fisheries Participants Draft Spend Plan” which will distribute $50 million in fisheries disaster relief funds to eligible participants from the commercial fishing, seafood processing, charter fishing, aquaculture and subsistence sectors. ADF&G’s draft spend plan allocates nearly a third of the funds – 32 percent - to the charter sector. Commercial fishing and seafood processing sectors will also each receive 32 percent of the disaster relief funds.
ALFA had requested that the Department use the approach of other major fishing states such as Massachusetts, which evaluated 2020 fishery market trends and other fishery data while developing its spend plan and allocated its funds by sector using NOAA Fisheries’ formula for distributing the CARES Act funds to each coastal fishing state. Other coastal state spend plans also attempted to allocate fishermen’s funds fairly by identifying the number of license holders and businesses in each sector.
NOAA Fisheries allocated $50 million to Alaska based on multi-year revenue information from commercial and charter fishing sectors, aquaculture businesses, and processing/seafood sectors showing that nearly 60 percent of Alaska’s fishery revenue derived from seafood processors. Commercial fishermen generated 35.2 percent of the state’s fishery revenue, and charter operators generated the remaining 5.5 percent. ALFA requested that ADF&G should use these percentages as a primary basis for allocating disaster relief funds between the sectors.
Instead, ADF&G’s spend plan explains that the agency increased the charter allocation to 32 percent to mitigate losses caused by travel restrictions and health mandates. This approach diverts funding mostly from the seafood processing sector, which otherwise would have received $30 million in disaster relief funds instead of the $16 million allocated to the sector under the ADF&G plan. This approach ignores the fact that many Alaska-based processors have incurred significant expenses in order to operate under the state’s health mandates and travel restrictions, and despite precautions, some have shut down due to COVID-19 outbreaks. Alaska processors support many resident workers and are essential for our fishermen and many have also experienced significant revenue declines.
Alaska’s fisheries produce more seafood volume than all the other states combined - nearly 60 percent of all commercial fishery landings in the United States by volume, and one-third of the nation’s commercial fishery economic value. The seafood industry is second only to oil and gas in terms of state jobs, making it important to utilize the limited funds in a way that fairly allocates relief. ADF&G’s allocation does not reflect the relative importance of the seafood sector, which employs more workers than any other industry in Alaska. Available data from the McDowell Group’s 2017 report, “The Economic Value of Alaska’s Seafood Industry” identify a total of 16,500 Alaska residents and 9,400 home-ported fishing vessels that, combined with non-resident fishermen, generated $1.7 billion in ex-vessel value in 2016. The state’s seafood processing industry employs 26,500 Alaska residents and generated a wholesale value of $4.2 billion in 2016.
In contrast, according to a 2019 NOAA Fisheries report measuring economic contributions from the charter fishing sector, “the saltwater recreational charter fishing sector is small relative to the commercial seafood sector,” contributing a total economic output of $166 million, or 4 percent of the $4.4 billion total economic output to Alaska’s economy. ADF&G management reports identify 686 active saltwater businesses, split evenly between Southeast and Southcentral Alaska, which employ roughly 1,222 guides. This means that funds which would otherwise provide relief to processors in rural coastal fishing communities throughout the state will instead accrue to charter businesses concentrated in just a few communities. According to the McDowell Group, seafood processing is an “economic foundation of many rural communities” employing 15% of rural workers and over 21,200 rural Alaska residents.
ADF&G’s spend plan differs from the approach of other major fishing states in that it does not provide any data showing the relative economic contributions of the sectors or the number of affected businesses and workers. Most major coastal states evaluated changes in the ex-vessel values of their fisheries and compiled data identifying of the total number of eligible participants by sector to inform their spend plans. The ADF&G spend plan also does not explain why ADF&G assumes that the charter sector experienced more cumulative economic harm than commercial fisheries and seafood processors.
ADF&G is allowing a public comment period through 6:00 p.m. October 19, 2020. ALFA encourages commercial fishermen, processors and community members to comment on this unfair allocation. ADF&G’s press release and information for submitting comments is available here:
http://www.adfg.alaska.gov/index.cfm?adfg=pressreleases.pr&release=2020_10_05
A summary of eligibility requirements and other spend plan components for fishermen and processors is available on ALFA’s COVID-19 page.