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Study Shows That Fishery Collapse Disaster Relief Funds Should Go To Wider Range Of Stakeholders
Posted on Friday, April 15, 2016 (PST)

How the economic impacts of a fishery collapse are determined will also determine who should be eligible for federal disaster relief.


After a chinook salmon fishery collapse in parts of Alaska resulted in curtailed fisheries, a recent study calculated the net economic impacts of the failure. It considered both the negative impacts of reduced salmon catches by commercial and recreational fishers, as well as the positive effects of federal relief payments.


It found that the initial payout by the government reduced the economic impacts of the disaster, but since payments were given only to commercial fishing permit holders they were too small to offset the full impact of the fishing collapse. In addition, the study found that the limited payments didn’t go to all the stakeholders who were also economically impacted.


Not compensated were boat crews, fish processors, the processing crews, or all the fishery suppliers, although they too were impacted.


“This particular study was completed after initial funds were distributed to permit holders,” said lead economist Chang Seung with NOAA Fisheries, Alaska Fisheries Science Center.  “The findings at the time were that this initial round of funds was sufficient to compensate the impact on permit owners, but not the broader group of stakeholders affected by the salmon fishery failure.”


However, the initial failure to compensate all who were hurt by the fishery collapse was corrected about two years later at about the same time the study was going to publication.


“A second pool of funds was approved to additional stakeholders including sport fishing guides and related businesses, commercial buying stations and salmon buyers in Cook Inlet and to the Yukon/Kuskokwim region for research, gear replacement/modification, education and outreach,” Seung said.  “While this additional compensation appears to be warranted according to our paper's analysis, it wasn't considered due to the staggered timing of the second set of payments.”


Seung said his study did not consider the economic impacts of the second payment to the wider range of stakeholders.


Chinook salmon runs that fell well below expected levels in 2010-2012 in the Yukon and Kuskokwim rivers, as well as in Cook Inlet, caused strict actions by fishery managers on commercial, sport and subsistence fishers, curtailing fishing for chinook, but also for other species in order to meet escapement objectives.


The average commercial exvessel revenue in Cook Inlet, 2007 – 2011, was $13 million. In 2012, the average had dropped to $2.5 million. It also impacted recreational anglers.


“The State of Alaska estimated that there was a reduction of 29,630 angler-days for guided and unguided sportfishing in fresh and salt water in the Cook Inlet region,” the study says.


In response, the governor of Alaska asked for fishery disaster determinations under the Magnuson-Stevens Act for commercial and subsistence fisheries in the impacted areas.


NOAA Fisheries announced the first round of payments in August 2014, giving commercial permit holders a total of $7.8 million. The allocation was based only on permit holders’ gross receipts, but “ignored income losses to crew members, input suppliers, and seafood processors in the affected communities,” the study says.


A second round of payments was announced in January 2015. This round was not evaluated by the economists. It amounted to $13 million to be distributed to the recreational fishing sector ($4.5 million), salmon disaster research, restoration, education, gear replacement and modification, and outreach ($6.4 million to the Yukon and Kuskokwim regions and $1.1 million for Cook Inlet). An additional $700,000 was given to commercial buying stations and salmon buyers in Cook Inlet.


The total adverse impacts, however, totaled $39.3 million without relief funds. The impact on jobs without the relief funds would have been a loss of 507 jobs.


“Although in general the net economic impacts of the salmon failures were smaller as a result of the federal relief payments, they were still significant,” the study concluded.


“The study indicates that organizations responsible for designing distribution plans for disaster relief funds should, to the extent practicable given the available data, consider the economic losses of a broader range of stakeholders from the salmon disasters,” Seung said.


He added that the findings are not just limited to failed salmon runs. 


“The methods used in our study could be useful to organizations responsible for designing distribution plans for disaster relief funds to estimate the amounts of relief allocated to the stakeholders affected by fishery failures caused by environmental reasons and natural disasters, not just salmon fishery failures, anywhere in the US,” Seung said.


“Net Economic Impacts of Recent Alaska Salmon Fishery Failures and Federal Relief,” was published online March 30, 2016, in the North American Journal of Fisheries Management,


Seung’s co-authors are Ben Muse, retired economist, NOAA Fisheries, Alaska Fisheries Science Center, and Edward Waters, economist, private consultant.

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