On May 7, 2020, the Secretary of Commerce announced the release of $300 million in relief funds appropriated for fishery participants under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). Alaska and Washington State will be the two largest recipients of CARES Act fisheries relief, each receiving $50 million – twice as much as any other state except for Massachusetts. NOAA Fisheries established a cap of $50 million and then used revenue information from commercial and charter fishing sectors, aquaculture businesses, and processing/seafood sectors of coastal state to proportionally allocate the funding. Fishery participants who qualify for relief payments must incur, either directly or indirectly, a loss in revenues exceeding 35 percent compared to the prior 5-year average.
The funds will be available to mitigate direct or indirect fishery-related losses and impacts to subsistence, cultural and ceremonial fisheries. The CARES Act does authorize direct payments. There is a large pool of eligible “fishery participants,” including commercial fishermen, charter fishing operators, privately owned marine aquaculture businesses such as shellfish farmers, subsistence and cultural users, processors and other fishery related businesses. Businesses such as vessel repair operations, bait and tackle shops and seafood retailers generally will not be eligible for this fisheries disaster relief package.
There has been some concern that, in the absence of appropriate oversight, big seafood firms and aquaculture businesses could consume most of the relief package, and smaller businesses may not receive funds in a proportionally fair manner. $300 million is not a large sum given the diversity and scale of eligible commercial, charter, and aquaculture businesses and Tribal fisheries across the country.
For example, $50 million is half the amount anticipated by Alaska based on its highly productive fisheries, which 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. 15,592 Alaska residents participate in the state’s commercial fisheries. A recent McDowell Group report reviewing the state’s fishing industry identified 27,738 skippers and crew and 9,000 vessels participating in Alaska’s fisheries and harvesting 5.6 billion pounds of seafood worth $1.6 billion. 38 percent of this value accrues to Alaska residents.
Many of the details of the fund allocation are unknown and delegated to states and interstate marine fisheries commissions. NOAA Fisheries will provide the $134 million in funds allocated to Alaska, Washington, Oregon and California to the Pacific States Marine Fisheries Commission (PSMFC) for distribution. The PSFMC will also distribute an additional $1 million to Alaska Tribes and $5.1 million to West Coast tribes. The PSFMC will review applications and disburse funds after states and Tribes develop “spend plans” for approval by NMFS. The spend plans will need to describe funding categories, including direct payments, fisheries infrastructure and fisheries-related education to address direct and indirect COVID-19 impacts.
NOAA Fisheries has delegated state marine fisheries management agencies with initial responsibility to work with fishery participants to understand the fund distribution process. For Alaska fishermen, this means the Alaska Department of Fish and Game (ADF&G) will likely be the lead agency. ADF&G is currently working on a “spend plan” for allocating $24.5 million in disaster relief funds for fishermen and communities affected by the Gulf of Alaska cod crash. The agency provided a brief initial comment period and intends to release its plan for a second comment period later this spring, revise the spend plan and allow for a final public comment period prior to submitting it to NOAA Fisheries for approval. Notably, the state has proposed to allocate a third to half of the disaster funds for research projects rather than direct relief to fishery participants.
While the specifics of spend plans are uncertain at this time, the recent fishery disaster relief fund distribution for the 2016 Gulf of Alaska pink salmon crisis may foreshadow challenges with distributing a smaller amount of CARES Act relief funds to a larger and much more diverse pool of fishery participants. There were $56.4 million in funds allocated for the pink salmon fishery disaster. The PSFMC distributed $31.8 million to fishermen and $17.7 million to processors. There were significant differences in regional allocations – Prince William Sound and Kodiak fishermen received over $29 million in disaster relief, while southeast Alaska fishermen received $176,427 – less than Lower Cook Inlet, South Alaska Peninsula, and Chignik, which cumulatively are less than 15% the size of the southeast Alaska pink salmon fishery. Some southeast Alaska permit holders reported receiving checks for a few hundred dollars, while some Prince William Sound crew reported receiving checks exceeding $10,000.00.
ADF&G and the PSFMC will have to address the challenge of adding charter and qualifying aquaculture operations such as southeast Alaska’s oyster farms into the pool of eligible fishery participants. According to a 2015 NOAA Fisheries study, charter fishing is a $180 million contributor to Alaska’s statewide economy. In a recent letter to the North Pacific Fishery Management Council, charter industry representatives explained that they are facing significant cancellations and additional challenges association with the cancellation of large cruise ship sailings and travel restrictions. Some operators have already cancelled their seasons. Others have cancelled trips at least through May and are awaiting decisions from the Governor’s office on visitor quarantine requirements before deciding whether to cancel operations in subsequent months. All will experience significant revenue declines.
If the Pacific States Marine Fisheries Commission were to allocate the entire $50 million to Alaska’s 15,592 resident skippers and crew, the relief package would amount to slightly more than $3,200 per fisherman. If ADF&G and the PSFMC decided to divide the funding in thirds between charter fishing and processing sectors and Alaska resident commercial fishermen, direct payments to Alaska’s 15,592 resident skippers and crew would be roughly $1,100.00.
Given the small amount of relief funds relative to the size of Alaska’s fisheries, ALFA has concerns about whether this aid package will adequately help southeast Alaska fishermen weather this storm. Other national fishery stakeholders share these concerns. Other CARES Act relief packages for small businesses have been difficult for commercial fishermen to access. Washington State Senator Maria Cantwell has explained that “due to the unique nature of fishing businesses, many have been left without federal assistance until now.”
According to Robert Vanasse, executive director of Saving Seafood, the $300 million allocated for fisheries disaster relief pales in comparison to the $9.5 billion allocated for livestock and other crop production. In 2017, U.S. consumers spent $102.2 billion for fishery products - $70 billion at restaurants and food service, and $33 billion in grocery and retail sales for home consumption. As explained by Vanasse, economic downturns could force thousands of commercial fishermen into bankruptcy with serious adverse effects on coastal communities throughout the country. Regions like southeast Alaska that produce high value seafood products for restaurant markets may be particularly vulnerable.
In a recent letter to NOAA Fisheries, Senator Elizabeth Warren of Massachusetts, which has the nation’s second largest commercial fishing economy, explained that the coronavirus has caused restaurant closures and disrupted export markets in major seafood consuming countries such as China, leaving the U.S. seafood and fishing industries “under serious financial duress.” Massachusetts received $28 million in CARES Act relief funds. Senator Ed Markey stated that the $28 million in aid “should only be the beginning,” noting that his state hosted the highest valued port in the country, New Bedford, and $28 million would not adequately address the needs of the state’s fishing economy.
Southeast Alaska is one of the most important fishing regions in the state, with more fishery workers than any region other than the Bering Sea. According to the Alaska Sustainable Fisheries Trust’s 2019 SeaBank Annual Report (pending, in press), seven of the top 100 fishing ports by value in the entire country are Southeast Alaskan communities. There are roughly 2,700 commercial fishing permit holders and 2,400 crew members living in southeast Alaska communities. Their harvests supported over 4,500 processing jobs, generating $50 million in wages – or an amount equivalent to the State of Alaska’s share of the CARES Act fisheries disaster relief.
ALFA will monitor progress on Alaska’s efforts to develop its spend plan and update its website as more information becomes available.
NOAA Fisheries’ press release, including fund allocations by state is available here:
The Pacific States Marine Fisheries Commission and information about distribution of the pink salmon disaster relief funds are available at these links:
https://www.psmfc.org/;http://www.psmfc.org/wpcontent/uploads/2019/08/FAQsForGOAPinkSalmonDisaster_8_05_19.pdf
Information about U.S. fisheries, including commercial fishery production by state, recreational fishing effort and aquaculture production is available in this report:
https://www.fisheries.noaa.gov/national/commercial-fishing/fisheries-united-states-2018.
Below are links to recent media reports on the relief package:
https://www.washingtonpost.com/business/2020/04/08/commercial-fishing-coronavirus/