How the economic impacts of a fishery collapse
are determined will also determine who should be eligible for federal disaster
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
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
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
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
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, http://www.tandfonline.com/doi/abs/10.1080/02755947.2015.1120831?journalCode=ujfm20#.Vw2MnqQrLIU
Seung’s co-authors are Ben Muse, retired
economist, NOAA Fisheries, Alaska Fisheries Science Center, and Edward Waters,
economist, private consultant.