As costs rise, Walker signs bill to increase fishing loan limits
Alaska fishermen now have a little more leeway to borrow money from the state to pay for new permits, boats, licenses and other equipment.
House Bill 56, primarily sponsored by Rep. Dan Ortiz, I-Ketchikan, rewrites sections of the state’s Commercial Fisheries Revolving Loan Program to change the cap on allowable amounts of certain types of loans. Fishermen who want to buy individual fishing quotas, or IFQ, limited entry permits or gear can now borrow up to $400,000, an increase from $300,000.
Gov. Bill Walker signed the bill into law Aug. 31. Ortiz — who represents a district with a high proportion of commercial fishing and seafood processing jobs — said in a release from the Alaska House Majority Coalition that the bill helps resident fishermen get over the cost hurdle to enter commercial fisheries.
“By clearing away bureaucratic and economic hurdles, this bill moves us one step closer towards the goal of helping Alaskans reap the benefits of our sustainable commercial fisheries,” Ortiz said.
The House passed the bill in 2017, but it sat in the Senate Finance Committee for the remainder of the contentious and lengthy session before the Senate passed it in May 2018. Ortiz credited Sen. Gary Stevens, R-Kodiak, with pushing the bill through the Senate this year, despite most of the Legislature’s attention being focused on fiscal issues.
The Commercial Fisheries Revolving Loan Fund is coordinated through the Alaska Department of Commerce, Community and Economic Development and is only available to people who have lived in Alaska for at least two years. Fishermen can take out low-interest loans for up to 15-year terms to finance fishing-related expenses like vessel upgrades, gear purchases or permit purchases.
The $300,000 amount was set in 1982, Ortiz wrote in a sponsor’s statement to the Legislature. Adjusting for inflation in the 36 years since, that would be about $746,000 today.
Alaska fishermen have been facing steeper and steeper thresholds to entry in commercial fisheries over the years. Because of concerns about stock sustainability and overharvesting, Alaska established the limited entry system in 1972 for state-regulated fisheries.
The value of permits goes up and down depending on the value of the fishery, but can cost as much as $190,800 for a set gillnet permit in Prince William Sound or as little as $3,300 for a set gillnet permit for salmon in the Upper Yukon River, according to the Commercial Fisheries Entry Commission. That’s not counting boats, gear and fuel.
In 1992, federal regulators implemented a quota system for halibut that created IFQ for a similar reason — to preserve the stocks and slow down the fishery while still allowing harvest opportunity. The season now lasts from March until November compared to the “race for fish” in the past when the total harvest could be taken in just days.
However, the market-based value of those quota shares has increased so much that small, rural Alaskan fishermen have been pushed out by the cost of purchasing quota, causing significant disruption in those rural fishing communities even two decades later.
IFQs have been implemented in a variety of fisheries in Alaska including Bering Sea crab and pollock to achieve the goal of sustainability through limited entry. While that may work for some fisheries, it has shown negative consequences for smaller ones, according to a paper published in the Proceedings of the National Academy of Sciences in August.
Courtney Carothers, a University of Alaska Fairbanks College of Fisheries and Ocean Sciences professor who co-authored the study, said in a news release from the university that the study was meant to question whether a broadly applied fishery management tool like the IFQ system, also known as ITQ (individual transferable quotas) works for all fisheries.
“Social scientists have been frustrated by the assumption that ITQs are a simple solution for fisheries management across the world,” Carothers said. “We were excited to come together and evaluate some examples of where ITQs work, why sometimes they don’t work, and who is being impacted when an ITQ isn’t the right option for a fishery.”
She cited the halibut fishery in Alaska as an example, where some quota shares can cost up to $70 per pound. The paper suggests developing an “institutional diagnostics toolkit” to help fisheries regulators and officials gauge the impact of a measure before implementing it, based on the context of the fishery.
“Toolkits like this could be used in many governance settings to challenge users’ understandings of a policy’s impacts and help them develop solutions better tailored to their particular context. They would not replace the more comprehensive approaches found in the literature but would rather be an intermediate step away from the problem of panaceas,” the paper states.
The Legislature was considering another bill, HB 188, to address the same entry-cost problem. HB 188, sponsored by Rep. Jonathan Kreiss-Tompkins, D-Sitka, would allow up to three regions in Alaska to establish commercial fisheries trusts which would hold permits and temporarily transfer those permits to fishermen, essentially providing a middle step between being a deckhand and laying out a small fortune to buy an entry permit.
Introduced in 2017, the bill was last heard in February 2018 and referred to the House Labor and Commerce Committee.
Elizabeth Earl can be reached at [email protected].