ADF&G’S SECOND SPEND PLAN MAINTAINS DISPROPORTIONATE ALLOCATION OF CARES ACT FISHERY RELIEF FUNDS TO CHARTER SECTOR
On November 9, 2020, the Alaska Department of Fish and Game (ADF&G) released its second “Section 12005 CARES Act Relief for Fisheries Participants Second Draft Spend Plan” which will distribute $49 million in fisheries disaster relief funds to eligible participants from the commercial fishing, seafood processing, charter fishing, aquaculture and subsistence sectors. ADF&G’s second draft spend plan allocates over a quarter of the funds – 27 percent ($13.2 million) - to the charter sector. Commercial fishing vessel owners who are not processors will receive 35 percent ($17.2 million) of the allocation. The seafood processing sector, which includes both shore-based processors and numerous commercial fishing vessels with processing permits that freeze, participate in dive fisheries or direct market their catch, will receive 32 percent ($15.7 million) of the disaster relief funds. There are well over 500 seafood processors permitted in Alaska, and most of the permit holders are community-based commercial fishing vessels. The spend plan allocates most of the remaining funds to the aquaculture and subsistence sectors while leaving an unexplained omission of $1 million from the plan.
ALFA and other fishery stakeholders have repeatedly 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 27 percent to mitigate losses caused by travel restrictions and health mandates. This approach deprives commercial fishermen who hold processor permits and shorebased processors from access to over $10 million in CARES Act relief funds allocated to Alaska’s processing sector under NOAA’s formula. ADF&G ignores the fact that many Alaska-based processors have also 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. The ADF&G spend plan does not provide any explanation for the state’s assumption that the charter sector experienced more cumulative economic harm than commercial fisheries and seafood processors.
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 fishery economic output to Alaska’s economy. Most saltwater charter businesses are concentrated in portions of Southeast and Southcentral Alaska. This means that funds which would otherwise provide relief to processors and the numerous commercial fishing vessels with processor permits that operate in rural coastal fishing communities throughout the state will instead accrue to charter businesses concentrated in just a few communities – or even to residents of other states.
ADF&G’s initial draft spend plan allowed charter operators residing in other states to apply for relief funds but excluded non-resident commercial fishermen. The second plan now allows commercial fishermen who are residents of other states to apply, but only if they have a business license issued by Alaska Department of Commerce, Community and Economic Development (DCCED). Alaska exempts most commercial fishing businesses from the DCCED business license requirement. As a result, the second plan effectively excludes non-resident commercial fishermen from the program – but includes non-resident charter businesses.
Most major coastal fishing state spend plans reflected an evaluation of data showing the relative economic contributions of the sectors or the number of affected businesses and workers. Their spend plans evaluated changes in the ex-vessel values of their fisheries and compiled data identifying of the total number of eligible participants by sector. But Alaska’s spend plan uses hypothetical examples based on “back of the napkin math” to illustrate how the state will calculate direct payments rather than using readily available data to assess the number of total shares or estimate payment amounts.
ADF&G is allowing a public comment period through 5:00 p.m. November 15, 2020. ALFA encourages commercial fishermen, processors and community members to comment on this unfair allocation. The second draft plan is available at: https://www.adfg.alaska.gov/static/home/news/hottopics/pdfs/cares_act_spendingplan_110920.pdf
Fishermen can send comments to dfg.com.caresact@alasak.gov.
An updated summary of eligibility requirements and other spend plan components for fishermen and processors is available on ALFA’s COVID-19 page.