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2006-05-30 Work SessionJOINT BOROUGH ASSEMBLY /CITY COUNCIL WORK SESSION May 30, 2006 — 7:30 p.m. High School Commons AGENDA CITIZENS' COMMENTS (limited to three minutes per speaker) ITEMS FOR DISCUSSION 1. Impacts of BSAI Crab Rationalization on Kodiak BSA' Crab Fishing Employment, Compensation and Expenditures - Research Results/Presentation (Gunnar Knapp, ISER) 2. Report From the Ad Hoc City of Kodiak/Kodiak Island Borough Gulf of Alaska Groundfish Rationalization Task Force 3. Bayside and City Fire Departments PLEASE PRINT YOUR NAME LEGIBLY �< o// /9rn t i S► Evtr l SevAc S .joHe/ Wfl'rrIE R a P - ; e ms { s€ f /69 L r' 0A) nJ fS 0 rz AID o�NV 1 ck (7 2 Xrn _r k l "IJ d7-4a-,e 0.19_4-At 4 ,wrect , et /(6-,/4,7 JOINT ASSEMBLY /CITY COUNCIL WORK SESSION DATE: lLPE rrf ae,A rv� SrPpAQ ✓ am J o h v450r— -nn' • ..% 4 -I:: -pads i:u3Pc+irpq Gunnar Knapp Professor of Economics Institute of Social and Economic Research University of Alaska Anchorage 3211 Providence Drive Anchorage, Alaska 99508 907 - 786 -7717 (telephone) Gunnar.Knapp@uaa.alaska.edu May 22, 2006 To: Linda Freed From: Gunnar Knapp Re: Potential Further Research on Economic Effects of Crab Rationalization Purpose of this Memorandum As you know, in my initial proposal to the City of Kodiak responding to your request for an analysis of economic effects of crab rationalization on Kodiak, I recommended that the study be divided into two phases: Phase I: Preliminary Analysis. This phase of the project will address the research questions as best possible based on existing studies and data, and a relatively small number of interviews (put differently, without conducting large numbers of interviews and /or surveys) Phase I will focus on the King Crab fishery. Phase II: Interviews and Surveys; Opilio Season Analysis. This phase of the project will extend the preliminary analysis by conducting additional interviews and/or surveys to obtain more reliable and more detailed information. Phase II will also include analysis of the Opilio fishery. I indicated that ISER would "prepare a proposal for Phase II of the research at a later date, after considering what kinds of interviews and /or surveys would be most useful and cost- effective for obtaining additional information about the research questions." This memorandum discusses some general options for the City of Kodiak with respect to further economic research on economic effects of crab rationalization —not all of which necessarily involve ISER. I recommend that the City first consider these general options. If you are interested in additional research by ISER, I can then prepare a more detailed proposal outlining options for and costs of this research 1 General Overview of Options for Further Research In planning any kind of research, the first step is always to think carefully about what you want to know, how you plan to use the information, and how much information you need and how good it needs to be. For the research I've done to date, you requested that I focus on three issues: • Effects of crab rationalization on crab fishing jobs for Kodiak residents • Effects of crab rationalization on earnings of Kodiak captains and crew • Effects of crab rationalization on Kodiak businesses As I indicate in my report, not enough information is presently available to measure these effects of crab rationalization on Kodiak with any great degree of precision. More information about these specific effects could be developed through surveys. Below I describe three different survey options. In addition to the three issues listed above, there are numerous other potential other effects of crab rationalization that may be important to Kodiak. It may be more useful or cost - effective for further research (by ISER or others) to focus on these other issues. Much of the interest in crab rationalization relates to concerns that Kodiak residents have about potential effects of Gulf groundfish rationalization. It may be more useful or cost - effective for further research (by ISER or others) to focus on these issues. I believe that the best option for developing good information about past and potential future effects of rationalization is to have the responsible federal state and management agencies collect the necessary data and conduct or fund the necessary research themselves. The effects of crab and Gulf groundfish rationalization are of significant statewide and national interest. Local governments such as Kodiak should not have to fund this research, nor do they have financial capacity to undertake the necessary long- term studies. The most cost - effective way for you to get the answers you need may be to lobby for federal and state agencies to do the research. Again, the most important step in planning further research is to think carefully about what you want to know and how you plan to use the information. Surveys There are three kinds of surveys which could provide more reliable information about effects of crab rationalization on Kodiak jobs, crab fishing earnings, and businesses than I have been able to develop for my preliminary report. Each of these surveys would probably cost between $5,000 and $15,000, depending on the scope of the survey. If you are interested in considering any of these options, I can prepare more specific survey proposals and cost estimates. 2 1. A survey of Bering Sea crab fishery 2004 and 2005 permit holders who listed Kodiak as their residence address. Probably the best way to get better information about how crab rationalization affected Kodiak crab fishing jobs and earnings would be to survey those BSAI crab permit holders who are crab permit holders. There are two reasons for surveying this group: • They know about the fishery. They are on board the vessels while they are fishing. They know about the fishery and about the crew and about the vessel operations. • It is easy to identify them. Their names and addresses are publicly available in the CFEC permit holder database. • They are a relatively small group. As discussed in my report, 39 Kodiak residents were permit holders for the Bristol Bay Red King Crab fishery in 2004. I have done surveys of permit holders before, and have had reasonably good response rates —which is critical for getting statistically reliable information. A permit holder survey could ask these individuals about (I) how their own fishing employment and income had been affected; (b) how employment and income of crew on vessels they had worked on had been affected; and (c) how compensation and other fishing costs were changing; and (d) how vessel expenditures changed. The survey would be a mail survey, with follow -up phone calls to those individuals who didn't respond to the mail survey. Because of the interest in these topics, I think there would be a fairly good response rate to this kind of a survey, increasing its reliability and credibility. I think this would be the most cost - effective survey in terms of providing useful information about economic effects on Kodiak and the kinds of changes that have occurred with rationalization; it is the survey I would be most inclined to recommend doing —if you want the kind of information it could collect. 2. A survey of Kodiak crab vessel owners. This would be harder to do because we don't know exactly which vessels are Kodiak vessels; because there are often multiple owners, and because the owners are less likely (based on my experience) to be willing to share what they might consider sensitive information from a business or political point of view. The survey would ask similar questions to that of a permit- holder survey. I think this would be a less cost - effective survey, and I would be less inclined to recommend it. 3. A survey of Kodiak businesses. This would be a mail survey of (a) all identifiable businesses that clearly derive a significant amount of their income from supplying services and supplies to the fishing industry; and (b) a random sample of other Kodiak businesses. The survey would 3 specifically ask for information about how the business had been affected by rationalization. The survey would be done first by mail with follow -ups by phone or in person for those businesses that did not respond to the mail survey. This kind of survey could provide more systematic information about how Kodiak businesses have been affected by rationalization. However, there are significant challenges in carrying out this kind of survey. It is difficult to design a survey which asks for enough information to be useful without the survey being so long and/or detailed that business owners become disinclined to answer it. In addition, many businesses may not know how they have been affected by crab rationalization, and/or may not choose to respond. I think this survey would be the most expensive and perhaps least reliable and useful of the three options. Again, in considering whether you wish to support any of these surveys, I recommend that you think carefully about what kind of information you want and how useful it would be to you. Research on Other Effects of Crab Rationalization My preliminary analysis has focused on the effects of crab rationalization on Kodiak residents' crab fishing jobs and earnings and on Kodiak businesses. In addition to, or instead of, more research on these issues, the City might wish to consider funding research (by ISER or other organizations) on other effects of crab rationalization. As noted in my preliminary report, other important questions which my report did not address include: • How has rationalization affected crab markets? • How has rationalization affected wholesale and ex- vessel prices? • How has rationalization affected fishing costs? • How has rationalization affected processing costs? • How has rationalization affected economic efficiency and profitability of the crab fishery and processing industry? • How has rationalization affected income and profits of vessel owners? • How has rationalization affected safety of the crab fishery? • How has management affected costs of management and enforcement? • How has rationalization affected other fisheries? • What factors have affected the extent and speed of consolidation of the crab fleet? • What factors have affected quota lease rates? • What have been the economic effects of processor quotas? Research on some of these other questions, as they specifically relate to Kodiak, may be more useful than more research on the same questions that I have looked at so far. Research on Potential Economic Effects of Gulf Groundfish Rationalization 4 It appears to me that much of the interest in crab rationalization relates to concems that some of the proposed alternatives for Gulf groundfish rationalization could have similar effects as occurred with crab rationalization. To the extent that the real issue for Kodiak is potential effects of Gulf groundfish rationalization, then it may be more useful for further research to focus on those issues than on the effects of crab rationalization. Research could be focused either on: (a) what does experience with crab rationalization imply for the potential effects of Gulf groundfish rationalization (e.g. extent of potential consolidation, effects of eimployment, economic effects on businesses, or (b) more generally, what are anticipated economic effects of different groundfish rationalization alternatives? I Getting Federal and State Agencies to Fund and Do Research Rationalization of the crab and groundfish fisheries has very significant implications for our communities, state and nation. We ought to be thinking very carefully about what we're doing and paying close attention to what these effects are— before and after we adopt management changes. After undertaking preliminary analysis of crab rationalization issues for the City of Kodiak, I believe even more strongly that much of the research about past and anticipated effects of rationalization should be done by the government agencies responsible for our fisheries, including the NPFMC, the NMFS RAM Division, the NMFS Alaska Fisheries Science Center, and the ADFG. All of these agencies have responsibility, to varying extents, for the management of our crab and groundfish fisheries. They all have staff capable of doing research, and funds available for research. Unlike ISER, they have access to confidential data, in particular fish tickets and the economic data reports being collected from the crab fisheries. I believe that local governments such as Kodiak should not have to fund this research, nor do they have financial capacity to undertake the necessary long -term studies. The most cost - effective way for you to get the answers you need may be to advocate for federal and state agencies to do the research. In particular, I believe you should advocate for the federal government to start using the data it has been collecting in the "Economic Data Reports" filed by crab vessel owners. Given the importance of the issues and the extent of public interest in them, I cannot understand the rationale for waiting three years to begin studying the information in these reports —given that this information could directly address most of the questions you asked ISER to address, and far more reliably than any survey that ISER or others might undertake. Whatever research Kodiak may choose to sponsor on its own, I recommend that you make as strong a case as you can to federal and state agencies that THEY study the economic issues of concern to you - -and give them a lot more attention than they have to date 5 Economic Impacts of BSAI Crab Rationalization on Kodiak Fishing Employment and Earnings and Kodiak Businesses A Preliminary Analysis Prepared by Gunnar Knapp Professor of Economics, ISER 3211 Providence Drive Anchorage, AK 99508 -8180 907 - 786 -7717 (telephone) 907 - 786 -7739 (fax) Gunnar.Knapp @uaa.alaska.edu (e -mail) May 2006 Draft To be Revised June 2006 to Address Review Comments and Questions Type of measure Measure 2005 2005/06 Change % Change Harvest (000 pounds) 14,112 16,467 2,355 17% Total catch, value Assumed ex- vessel price ($/lb) $4.71 $4.30 -$0.41 -9% Estimated ex- vessel value ($ million) $65.7 $70.5 $4.8 7% and effort Number of pots pulled 90,972 103,337 12,365 14% Number of landings 270 263 -7 -3% Use of vessels and pots in fishing Average pots registered per vessel 197 177 -21 -10% Catch per unit of effort (CPUE) 23 24 1 4% Vessel participation Number of vessels registered 251 89 -162 -65% Number of pots registered 49,506 15,713 - 33,793 -68% Average effort, harvest and value per vessel Average pots pulled per vessel 362 1,161 799 220% Estimated avg. days fished per vessel 3 26 23 767% Average landings per vessel 1.1 3.0 1.9 175% Average harvest per vessel (pounds) 56,225 185,024 128,799 229% Average ex- vessel value per vessel ($) $261,806 $791,858 $530,052 202% EXECUTIVE SUMMARY This study was requested by the City of Kodiak to analyze how crab rationalization has affected crab fishing jobs and earnings of Kodiak residents and sales of Kodiak businesses. The study is limited to these issues. It does not address many other important issues raised by crab rationalization. There are significant challenges in studying economic effects of crab rationalization on Kodiak. There are important differences between crab fisheries, and within each fishery there are differences in boat sizes, vessel ownership, quota allocation, and many other factors which affect how quota is fished. Many factors besides rationalization affect crab fisheries, and many factors besides crab fisheries affect Kodiak's economy — making it difficult to identify the specific effects of crab rationalization on Kodiak General Economic Effects of Crab Rationalization Rationalization began very recently. It is far too early to know what the long -term effects of crab rationalization will be on how many boats fish, on crab fishing jobs and earnings, on quota lease rates, on crab markets and prices, and on communities. Since rationalization began in the 2005/06 season, there have been very rapid and dramatic changes in the crab fisheries. Between the 2004/05 and 2005/06 seasons, vessel registration declined by about two- thirds for the Bristol Bay Red King Crab (BBR) fishery and by about one -half for the Bering Sea Snow Crab (BSS) fishery.' Red Kin ¢ Crab Fishery Between the 2005 and 2005/06 Seasons There has been a corresponding dramatic decline in the number of crab fish ng jobs, with a decline of about 900 BBR jobs and about 450 BSS jobs. Not all of the decline in vessel participation and jobs is due specifically to crab rationalization. About 15% of the 2005/06 decline for the BBR fishery was due to the crab vessel buyback program I Throughout this report I refer to the Bering Sea Opilio Crab fishery as the "Bering Sea Snow Crab" fishery, following ADFG practice. The remaining crab fishing jobs are a different kind of job, generally with longer seasons, more total income (for those working), lower earnings per day fishing (but not necessarily per day worked), more certainty about income (for those working), and a decline in the share of fishing income in total ex- vessel value. Rationalization has cut into sales of businesses which sell to crab boats and crab fishermen— particularly those businesses whose sales depend on the number of boats and people fishing. Economic Effects of Crab Rationalization on Kodiak Not enough information is presently available to measure economic effects of crab rationalization on Kodiak with any great degree of precision. Between 2004/05 and 2005/06, the number of Kodiak boats which fished for Bristol Bay Red King Crab fell from about 54 to about 23, or by about 57 %. Kodiak residents probably lost between 100 and 180 Bristol Bay Red King Crab fishing jobs and between 60 and 105 Bering Sea Snow Crab fishing jobs due to rationalization. Rationalization probably reduced the total earnings of Kodiak residents working in the Bristol Bay Red King Crab fishery by between $1.0 million and $1.6 million. Rationalization has cut into the sales of some Kodiak businesses which supply and service the crab fleet —but there has been no obvious major decline for marine supply and service companies since rationalization began. Total sales of Kodiak businesses declined slightly in the fourth quarter of 2005 and the first quarter of 2006, compared to the corresponding quarters of the previous year —but it is unclear to what extent this was caused by crab rationalization or other factors. Kodiak is a relatively large and diversified community that depends on many fisheries and other activities. This tends to dampen the relative economic effects of crab rationalization on Kodiak. The number of vessels participating in the Bristol Bay Red King Crab fishery declined dramatically during the first year of rationalization. A "best guess" estimate is that in 2005/06 Kodiak residents lost 106 Bristol Bay Red King Crab fishing jobs and 59 Bering Sea Snow Crab fishing jobs due to rationalization. Upper - bound estimates would be that Kodiak residents lost 179 Bristol Bay Red King Crab fishing jobs and 105 Bering Sea Snow Crab fishing jobs. Estimates based on a model of costs and payments for a hypothetical fishing vessel suggest that as crab vessel leases more quota, the share of ex- vessel value paid for quota royalties increases while the shares paid to vessel owners and crew decline. 300 250 200 150 100 50 0 900 800 — 757 700 600 651 500 400 300 — 200 — - - — 100 -- 0 106 2002 Bristol Bay Red King Crab jobs Bering Sea Snow Crab jobs Estimated Distribution of Taal Yeast Revenues or Different Levels of Quota Leasing: Bristol Bay Red King Crab Fisher Derby Bristol Bay Red King Crab Fishery, 2002 -2005: Total Vessels Registered 2003 Estimated Crab Fishing Job Losses due to Crab Rationalization 59 2004 457 1FQ IFQ IFQ IEQ IFQ Lase O% Lease 0.5% Lease IO% Lease L 5% Lease EOM Quota Share Lased by she VesseL Expressed as % ofTAC 2005/06 ❑Non- Kodiak Residents • Kodiak residents 0Quotamyawes B Fuel, bad A gmcetia' Taxes Mid fees ❑Payment to owner • Payments to crew Key Asmmptlone: Quota lase rate= 70% Cons share of net value= 41% Table of Contents Executive Summary Table of Contents I. INTRODUCTION 1 II. OVERVIEW OF CHANGES IN BSAI CRAB FISHERIES IN 2005/06 6 III. EFFECTS OF RATIONALIZATION ON KODIAK VESSEL 14 PARTICIPATION IN BSAI CRAB FISHERIES IV. EFFECTS OF RATIONALIZATION ON KODIAK CRAB FISHING JOBS 21 V. EFFECTS OF RATIONALIZATION ON CRAB FISHING EARNINGS 29 OF KODIAK CAPTAINS AND CREW VI. EFFECTS OF RATIONALIZATION ON KODIAK BUSINESSES 44 I. INTRODUCTION In the fall of 2005, significant changes were implemented in the management of Bering Sea Aleutian Islands (BSAI) crab fisheries. These changes are referred to as "Crab Rationalization." According to the National Marine Fisheries Service: The Crab Rationalization Program allocates BSAI crab resources among harvesters, processors, and coastal communities. The North Pacific Fishery Management Council developed the Program over a 6 -year period to accommodate the specific dynamics and needs of the BSAI crab fisheries... Program components include: quota share allocation, processor quota share allocation, IFQ and individual processing quota (IPQ) issuance, quota transfers, use caps, crab harvesting cooperatives, protections for Gulf of Alaska groundfish fisheries, arbitration system, monitoring, economic data collection, and cost recovery fee collection. With the implementation of crab rationalization, major changes occurred in BSAI crab fisheries during the 2005 -06 season, including a dramatic consolidation in the number of vessels participating in BSAI crab fisheries. The changes in the crab fisheries during the first season of crab rationalization raised concerns in many coastal Alaska communities, including Kodiak. Among these concerns were losses in crab fishing jobs, changes in compensation for crab fishing captains and crew, and effects on businesses selling services and supplies to vessels and fishermen. The early experience with crab rationalization also raised concerns about the potential implications of proposals for rationalization of Gulf of Alaska groundfish fisheries.' Origins of this Study In order to get a better understanding of how Kodiak had been affected by crab rationalization, in December 2005 the City of Kodiak invited the Institute of Social and Economic Research (ISER) to prepare a study addressing these three questions: How has BSAI crab rationalization affected employment of Kodiak residents as skippers and crew in BSAI crab fisheries? How has BSAI crab rationalization affected compensation paid to Kodiak residents participating as captains and crew in BSAI crab fisheries? How has BSAI crab rationalization affected Kodiak businesses? 2 Detailed information about crab rationalization may be found at the "Bering Sea and Aleutian Islands (BSAI) Crab Rationalization Program" website of the National Marine Fisheries Service Alaska Regional Office, at: http: / /www.fakr .noaa.gov /sustainablefisheries /crab /crfaq.htm#CRreports. 3 Not all Kodiak residents share these concerns. As with any fisheries policy issue, Kodiak residents have widely varying perceptions of and attitudes towards crab rationalization. 1 In response to this invitation, I prepared a proposal for a study addressing these questions. In the proposal, I recommended that the study be divided into two phases: Phase I: Preliminary Analysis. This phase of the project will address the research questions as best possible based on existing studies and data, and a relatively small number of interviews (put differently, without conducting Large numbers of interviews and/or surveys.) Phase I will focus on the King Crab fishery. Phase II: Interviews and Surveys; Opilio Season Analysis. This phase of the project will extend the preliminary analysis by conducting additional interviews and/or surveys to obtain more reliable and more detailed information. Phase II will also include analysis of the Opilio fishery. I noted that the proposal was for Phase I of the study, and suggested that I should "prepare a proposal for Phase II of the research at a later date, after considering what kinds of interviews and/or surveys would be most useful and cost - effective for obtaining additional information about the research questions." The City of Kodiak accepted the proposal and I began work on this project in January 2006. This document is the report for Phase I of this project (Preliminary Analysis). In the final chapter, I describe options for further analysis. My Background and Objectives in Undertaking this Study As a Professor of Economics at the University of Alaska Anchorage Institute of Social and Economic Research (ISER), I have been actively involved in research and teaching about the Alaska economy and Alaska resource management and markets for the past twenty-five years. For the past fifteen years, most of my research has focused on the Alaska seafood industry, including seafood markets, fisheries management, and the role of the seafood industry in the Alaska economy. I have worked primarily on issues related to the salmon industry, but I have also studied markets for and management issues related to the halibut, herring, and pollock fisheries. Until this study, I had done relatively little work related to Alaska crab fisheries. I was not involved in any way with the development of the crab rationalization program. I did not advocate for or against the program or any elements of the program. I undertook this study because I was asked to by the City of Kodiak and because it addresses issues of importance to Alaska. My goal in this study has been to develop the best possible objective answers to the three questions the City of Kodiak asked me to Preliminary ADFG data for the Bering Sea Snow Crab fishery became available in early May. As a result, s was able to include some analysis of the Bering Sea Snow Crab fishery in this preliminary analysis. My resume and copies of selected publications and presentations are available on my website: www.iser.uaa.alaska.edu/iser/people/Imapp. 2 study, given the limited available data and the limited time and resources available for the research. My goal in this study is not to argue for or against crab rationalization or any component of the crab rationalization program I do not offer or intend any conclusions about whether crab rationalization is good or bad or should or shouldn't have been done differently. Questions Not Addressed by this Study This study focuses on three specific questions related to effects of crab rationalization: • How has crab rationalization affected employment of captains and crew? • How has crab rationalization affected compensation of captains and crew? • How has rationalization affected fishing support businesses? These are important questions. But —as is clear from reading the newspapers, listening to public testimony, or talking about rationalization with Kodiak residents, fishermen, vessel owners and processors —they are by no means the only questions raised by crab rationalization. Other important questions raised by crab rationalization include (but are not limited to): • How has rationalization affected crab markets? • How has rationalization affected wholesale and ex- vessel prices? • How has rationalization affected fishing costs? • How has rationalization affected processing costs? • How has rationalization affected economic efficiency and profitability of the crab fishery and processing industry? • How has rationalization affected income and profits of vessel owners? • How has rationalization affected safety of the crab fishery? • How has management affected costs of management and enforcement? • How has rationalization affected other fisheries? • What factors have affected the extent and speed of consolidation of the crab fleet? • What factors have affected quota lease rates? • What have been the economic effects of processor quotas? • What does experience with crab rationalization imply about potential effects of rationalization of other fisheries? In the course of this study many people talked to me at length about these other questions and why they are important. I agree that they are important and should be studied. But I have not studied them, because I was not asked to study them —and because studying them would have vastly expanded the scope of this preliminary analysis. In short, this report is not a comprehensive analysis of economic effects of crab rationalization on Kodiak, much less a comprehensive analysis of the effects of crab 3 rationalization. It is, rather, a start towards examining a few of the many complex questions raised by crab rationalization An important policy question for fishery managers and the many stakeholders in Alaska fisheries is when, how, and by whom the many other questions raised by crab rationalization should be studied. Challenges in Studying Economic Effects of Crab Rationalization on Kodiak There are significant challenges in studying economic effects of crab rationalization on Kodiak. These challenges have limited my ability to answer the three questions the City of Kodiak asked me to address for this study. More generally, these challenges confront, to varying extents, any potential study of effects of crab rationalization. 1. Rationalization began very recently. The effects of crab rationalization will happen over a long period of time. Crab rationalization has been in place for less than a year. Crab rationalization is a learning experience for everyone involved. The crab fisheries will most likely not stay the same as they were in the first year of crab rationalization. It is far too early to know what the long -term effects of crab rationalization will be on how many boats fish, on crab fishing jobs and earnings, on quota lease rates, on crab markets and prices, and on communities. It took far longer than one year to begin to understand the long -term economic effects of salmon limited entry, halibut and sablefish IFQs, the CDQ program, and the American Fisheries Act. A practical challenge is that only limited data are available for what has happened during the first year of rationalization, and these data have become available only recently. I did not receive data for the Bering Sea Snow Crab (opilio) fishery until the middle of May. 2. There is wide variation between and within BSAI crab fisheries. There are differences between crab fisheries. Within each crab fishery, there are differences in boat sizes, vessel ownership, quota allocation, and many other factors which affect how quota is fished. Some vessel owners own only one vessel, while others own multiple vessels. Some quota holders leased out their quota, some fished only their own quota, while others leased additional quota. Boats vary in how long they fished and how crew were paid. Boats also vary in the extent to which they participate in other fisheries. Historically, of course, there was also great variation in vessel catches and earnings prior to rationalization. This variation makes it difficult to generalize about 6 Although the first season can't show all the effects of crab rationalization, it is useful to study the effects of crab rationalization from the beginning. It's only by beginning to study these effects that we will begin to understand the challenges involved in studying them. If we wait three years we may discover that we haven't collected the information we need to answer the questions that we now wish to ask. In addition, people are very interested in the effects of crab rationalization, and will discuss and debate these effects based on the information they have. 4 what is happening in the crab fisheries and about how boats, crew, and communities have been affected by rationalization 3. Many factors besides rationalization affect crab fisheries. Not all of the changes in the crab fishery in the 2005 -06 season were due to rationalization. Nor will all future changes be due to rationalization. Crab resource conditions and quotas change from year to year; world crab market conditions change from year to year; and fuel prices change from year to year. It is difficult to separate the effects of rationalization from the effects of these other factors on the crab fishery. This year's crab fisheries —and how people perceive the effects of rationalization —would have been different if the total crab quota had been larger, prices had been higher, or fuel costs had been lower. 4. Many factors besides crab fisheries affect Kodiak's economy. Not all of the economic changes in Kodiak this year or in future years have been or will be due to crab rationalization. Economic conditions in other fisheries and other industries change from year to year. Federal spending and state spending change from year to year. Permanent fund dividends change from year to year. Old businesses close and new businesses open. It is difficult to separate the effects of rationalization from the effects of these other factors on Kodiak's economy. 5. The crab fisheries would have changed even without rationalization. We can't assume that if rationalization hadn't happened, the same number of boats would have continued to fish for crab, providing the same number of crab fishing jobs. It is likely that some consolidation would have happened in the crab fishery without rationalization —as has occurred, for example, in Kodiak seine fisheries. The true effects of rationalization can't be measured by the changes we observe over time. They are, rather, how the fisheries differ from what they would have become without rationalization —which we can't know exactly. 6. Crab rationalization affects more fisheries than crab. Different Alaska fisheries are economically linked in many ways. Changes in one fishery affect other fisheries. For example, captains and crew may work in a lower - paying fishery or tendering to gain the opportunity to fish in a higher paying fishery (like crab). If crab fishing job opportunities decline, this may affect availability of crew for other fisheries. As another example, boats and fishermen that stop fishing for crab may participate in other fisheries —creating more jobs in those fisheries (but probably not more value). Crab boats often participate in multiple fisheries. A change in one of these fisheries may affect the profitability of the entire operation. Put simply, we can't understand the effects of crab rationalization by only looking at the crab fishery! 5 Fishery code Fishery description Allocation (lbs) BBR Bristol Bay red king crab 16,496,100 BSS Bering Sea snow crab 33,465,600 BST Bering Sea Bairdi Tanner crab 1,458,000 EAG Eastern Aleutian Islands golden king crab 2,700,000 WAG Western Aleutian Islands golden king crab 2,430,000 otal TOTAL 56,549,700 II. OVERVIEW OF CHANGES IN BSAI CRAB FISHERIES IN 2005/06 There are several different BSAI crab fisheries affected by crab rationalization. As shown in Table II -1, the two fisheries which account for most of the harvest volume are the Bristol Bay Red King Crab (BBR) fishery and the Bering Sea Snow (Opilio) Crab fishery (BSS). This report focuses on these two fisheries. It focuses particularly on the Bristol Bay Red King Crab fishery, since the Bering Sea Snow Crab fishery was still under way while I was writing this report. Table 11 -1 BSAI Crab Individual Fishing Quota (IFQ) Allocations August 15 2005 - J une 30 2 006 Source: c ted Access Management Division, NMFS Crab IFQ Allocations and Landings Report, www.fakr. noaa.gov /ram/daily /cratland.htm. Data downloaded May 18, 2006. Harvest volumes have been higher in recent years for the Bering Sea Snow Crab fishery, but ex- vessel prices and ex- vessel value have been higher for the Bristol Bay Red King Crab fishery (Table I1 -2). The Bristol Bay Red King Crab fishery opens in October while the Bering Sea Snow Crab fishery opens in January. Prior to and after implementation of rationalization, the average number of days fished has been longer for the Bering Sea Snow Crab fishery. Table II -2 Comparison of the Two Major BSAI Crab Fisheries, 2002/03- 2005/06 Bristol Bay Red King Crab Bering Sea Snow Crab (Opilio) Harvest (million pounds) Ex- vessel price ($ millions) Ex- vessel value ($ millions) Opens in Days Harvest (million pounds) Ex- vessel price ($/lb) Ex- vessel value ($ millions) Opens in Days 2002 -03 8.9 $6.14 54.2 3 26.3 $1.83 47.0 b 2003 -04 14.5 $5.08 72.7 5 22.2 $2.05 45.0 2004 -05 14.1 $4.71 65.7 October 3 23.0 $2.05 46.8 2005 -06 -- 16.5 $4.30 70.5 26 30.8 NA NA January 9 8 5 42 Note: 2002 -03 refers to the Bristol Bay Red King C ra season which began in October 2002 and the Bering Sea Snow Crab season which began in January 2003. Data for the 2005 -06 season are preliminary. Sources are listed in Tables 1I -3 and 11 -4. 6 Tables II -3 and II -4 provide summary data for the Bristol Bay Red King Crab and the Bering Sea Snow Crab fisheries. Note that all of the data for the 2005/06 are preliminary and subiect to change, particularly data for pot lifts, days fished, ex- vessel price and ex- vessel value, Bristol Bav Red Kin e Crab Fishery Summary Data 1996- 2005/06 Table II -3 Notes: A112005/06 data are preliminary and subject to change, particularly data for pot lifts, average days fished, ex- vessel price and ex- vessel value. Catch per unit of effort (CPUE) is defined as numb 'r of legal crabs retained per pot lift. A. Review of major BSAI crab fisheries, 2005/06. Powerpoint presentation prepared by Forrest R. Bowers. ADFG, May 2006. B. ADFG 2004 Shellfish Management Report, Table 2 -2. C. ADFG Preliminary Alaska Shellfish Summaries, posted at www.rfadfg. state. ak. us / geninfo /shelifsh /shellfrsh_harvestphp. • Calculated from data in table. Table II-4 Notes: All 2006 data are preliminary and subject to change, particularly data for pot lifts and average days ft hed. Catch per unit of effort (CPUE) is defined as number of legal crabs retained per pot li /t. No 'x- versel price data far 2006 were available when this report was prepays() A. Review of major BSA! crab fisheries, 2005/06. Powerpoint presentation prepared by Forrest R. Bowers, ADFG. May 2006. B. ADFG 2004 Shellfish Management Report, Table 2 -29 C. ADFG Preliminary Alaska Shellfish Summaries, posted at www.cfadfg. state. akus / geninfo /shellfsh /shel(ftsh_harvestphp. • Calculated from data in table. 7 Changes in the management of the BSAI crab fisheries impose a need for corresponding changes in the collection, analysis, and reporting of data for these fisheries, requiring extra time and work for ADFG in this first season. I appreciate the assistance of ADFG in providing these preliminary data in order to make this analysis possible. 7 Sourcr 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005/0! Harvest (000 pounds) A 8,406 8,756 14,233 11,091 7,546 7,786 8,857 14,530 14,112 16,46 Deadloss (000 pounds) A 24 14 54 44 76 57 32 228 161 7 Estimated live deliveries (000 pounds) • 8,381 8,743 14,179 11.047 7 470 7,729 8.825 14 302 13 952 16,39' Number of vessels registered A 196 256 274 257 246 230 242 252 251 8• Number of landings A 198 265 284 268 256 238 254 275 270 26 Number of pots registered A 39,461 27,499 56,420 42,403 26,352 24,571 25,833 46,964 49,506 15,71 Number of pots pulled A 76,433 90.510 141.707 146.997 98.694 63 242 68 328 129.019 90 972 103 33 Catch per unit of effort (CPUE) A 16 15 15 12 12 19 20 18 23 2' Estimated ave. days fished per vessel A 4 4 5 5 4 3 3 5 3 2 Ex- vessel price(Sdb) B $4.01 $3.26 $2.64 $6.26 $4.81 84.81 $6.14 $5.08 $4.71 Ex- vessel price (5/16) C $4.00 $3.25 $2.60 $6.27 54.80 $4.92 $6.27 $5.15 $4.70 54.3' Assumed ex- vessel price (5 /Ib) • $4.01 $3.26 $2.64 $6.26 $4.81 $4.81 $6.14 $5.08 $4.71 $4.31 Estimated ex- vessel valve (S million) ' $33.6 $78.5 537.4 $69.2 535.9 $37.2 554.7 $72.7 $65.7 570. Average pots registered per vessel • 201 107 206 165 107 107 107 186 197 17 Average pots pulled per vessel • 390 354 517 572 401 275 282 512 362 1,161 Average harvest per vessel (pounds) ' 42,886 34,205 51,945 43,155 30,675 33,854 36,598 57,660 56,225 185,02' Average ex- vessel value Der vessel ($) • 5171.478 $111,333 $136,619 $269,078 $146,057 8161.640 5223.898 5288,310 $261,806 $791 85: Average landings per vessel • 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.1 1.1 3.1 Average live deliveries per landing • 42.331 32,991 49,927 41.219 29.179 32 475 34.743 52,007 51 674 62.31. Tables II -3 and II -4 provide summary data for the Bristol Bay Red King Crab and the Bering Sea Snow Crab fisheries. Note that all of the data for the 2005/06 are preliminary and subiect to change, particularly data for pot lifts, days fished, ex- vessel price and ex- vessel value, Bristol Bav Red Kin e Crab Fishery Summary Data 1996- 2005/06 Table II -3 Notes: A112005/06 data are preliminary and subject to change, particularly data for pot lifts, average days fished, ex- vessel price and ex- vessel value. Catch per unit of effort (CPUE) is defined as numb 'r of legal crabs retained per pot lift. A. Review of major BSAI crab fisheries, 2005/06. Powerpoint presentation prepared by Forrest R. Bowers. ADFG, May 2006. B. ADFG 2004 Shellfish Management Report, Table 2 -2. C. ADFG Preliminary Alaska Shellfish Summaries, posted at www.rfadfg. state. ak. us / geninfo /shelifsh /shellfrsh_harvestphp. • Calculated from data in table. Table II-4 Notes: All 2006 data are preliminary and subject to change, particularly data for pot lifts and average days ft hed. Catch per unit of effort (CPUE) is defined as number of legal crabs retained per pot li /t. No 'x- versel price data far 2006 were available when this report was prepays() A. Review of major BSA! crab fisheries, 2005/06. Powerpoint presentation prepared by Forrest R. Bowers, ADFG. May 2006. B. ADFG 2004 Shellfish Management Report, Table 2 -29 C. ADFG Preliminary Alaska Shellfish Summaries, posted at www.cfadfg. state. akus / geninfo /shellfsh /shel(ftsh_harvestphp. • Calculated from data in table. 7 Changes in the management of the BSAI crab fisheries impose a need for corresponding changes in the collection, analysis, and reporting of data for these fisheries, requiring extra time and work for ADFG in this first season. I appreciate the assistance of ADFG in providing these preliminary data in order to make this analysis possible. 7 a - 1997 1998 •9' nl 001 2002 01 004 2005 Jd /4 Harvest (000 pounds) A 119,543 243,341 184,530 30775 23,382 30,253 26,342 22,170 23,036 30,84C Deadloss (000 pounds) A 2,352 2,894 1,828 338 430 583 665 224 224 295 Estimated live deliveries (000 pounds) • 117 191 240 447 182.702 30.437 22 957 79.670 75 677 21 946 72.817 30.541 Number of vessels registered A 226 229 241 229 207 191 192 189 164 8C Number of landings A 1127 1767 1630 287 293 403 230 240 196 274 Number of pots registered A 47,036 47,909 50,173 43,407 40,379 37,807 20,452 14,444 12,930 13,73 Number of Dots pulled A 754 140 891.268 899 043 170 064 176.930 307 666 139 903 110 087 69 617 114 161 Catch per unit of effort (CPUE) A 133 209 159 137 97 76 155 157 240 18C Estimated ave. days fished ner vessel A 65 64 66 7 30 24 9 8 5 42 Ex- vessel price (5/Ib) B $0.79 $0.56 $0.88 51.81 51.53 $1.49 $1.83 52.05 Ex- vessel price (546) C $0.75 $0.55 $0.98 51.85 51.55 51.40 $1.84 $2.05 $1.80 Assumed ex- vessel price ($/Ib) • $0.79 50.56 50.88 51.81 $1.53 $1.49 $1.83 52.05 52.05 NA Estimated ex- vessel value (5 million) • 592.6 5134 7 8160 8 555.1 $35.1 544.2 $470 $45.0 $46.8 NA Average pots registered per vessel • 208 209 208 190 195 198 107 76 79 172 Average pots pulled per vessel • 3,337 3,892 3,730 743 855 1,611 729 582 424 1,427 Average harvest per vessel (pounds) • 528,951 1,062,626 765,684 134,388 112,957 158,390 137,198 117,302 140,465 385,495 Average ex- vessel value per vessel (5) • $409,652 $587.994 5667.126 8240.570 5169,646 $231.456 5244 732 $238 036 $285,151 NA Average landings per vessel • 5.0 7.7 6.8 1.3 1.4 2.1 1.2 1.3 1.2 3.4 tverage live deliveries per landing • 103 985 136 077 112,087 106 057 78 335 73 623 111.638 91 441 116 388 111.46' Tables II -3 and II -4 provide summary data for the Bristol Bay Red King Crab and the Bering Sea Snow Crab fisheries. Note that all of the data for the 2005/06 are preliminary and subiect to change, particularly data for pot lifts, days fished, ex- vessel price and ex- vessel value, Bristol Bav Red Kin e Crab Fishery Summary Data 1996- 2005/06 Table II -3 Notes: A112005/06 data are preliminary and subject to change, particularly data for pot lifts, average days fished, ex- vessel price and ex- vessel value. Catch per unit of effort (CPUE) is defined as numb 'r of legal crabs retained per pot lift. A. Review of major BSAI crab fisheries, 2005/06. Powerpoint presentation prepared by Forrest R. Bowers. ADFG, May 2006. B. ADFG 2004 Shellfish Management Report, Table 2 -2. C. ADFG Preliminary Alaska Shellfish Summaries, posted at www.rfadfg. state. ak. us / geninfo /shelifsh /shellfrsh_harvestphp. • Calculated from data in table. Table II-4 Notes: All 2006 data are preliminary and subject to change, particularly data for pot lifts and average days ft hed. Catch per unit of effort (CPUE) is defined as number of legal crabs retained per pot li /t. No 'x- versel price data far 2006 were available when this report was prepays() A. Review of major BSA! crab fisheries, 2005/06. Powerpoint presentation prepared by Forrest R. Bowers, ADFG. May 2006. B. ADFG 2004 Shellfish Management Report, Table 2 -29 C. ADFG Preliminary Alaska Shellfish Summaries, posted at www.cfadfg. state. akus / geninfo /shellfsh /shel(ftsh_harvestphp. • Calculated from data in table. 7 Changes in the management of the BSAI crab fisheries impose a need for corresponding changes in the collection, analysis, and reporting of data for these fisheries, requiring extra time and work for ADFG in this first season. I appreciate the assistance of ADFG in providing these preliminary data in order to make this analysis possible. 7 w••zco ••• tam 131 nun Dar neu ning trap risnerx tsetween the 2004 and 2005/06 Seasons Type of measure Measure 2004 2005/06 Change % Change Total catch, value and effort Harvest (000 pounds) 14,112 16,467 2,355 17% Assumed ex- vessel price ($/lb) $4.71 $4.30 -$0.41 -9% Estimated ex- vessel value ($ million) $65.7 $70.5 $4.8 7% Number of pots pulled 90,972 103,337 12,365 14% Number of landings 270 263 -7 -3% Use of vessels and pots in fishing Average pots registered per vessel 197 177 -21 -10% Catch per unit of effort (CPUE) 23 24 1 4% Vessel participation Number of vessels registered 251 89 -162 -65% Number of pots registered 49,506 15,713 - 33,793 -68% Average pots pulled per vessel 362 1,161 799 220% Average effort, Estimated avg. days fished per vessel 3 26 23 767% harvest and value Average landings per vessel 1.1 3.0 1.9 175% per vessel Average harvest per vessel (pounds) 56,225 185,024 128,799 229% , Average ex- vessel value per vessel ($) _$261,806 $791,858 $530,052 202% Table II -5 provides an overview of changes in the Bristol Bay Red King Crab fishery between the 2004 season and the 2005/06 season. I have divided Table II -5 into four types of measures of the fishery. Table 11 -5 There was relatively little change in total catch, value and effort in the fishery. The total `✓harvest was up 17% and the total ex- vessel value was up 7 %. The total number of pots /pulled was up 14% and the total number of landings (vessel deliveries to processors) was down 3 %. By themselves these measures do not reveal major changes in the fishery. Similarly, there was relatively little change in how vessels and pots were used in fishing. The average number of pots registered per vessel was 10% lower, and the catch per unit of effort (number of legal crabs per pot lift) was 4% higher. By themselves these measures also do not reveal major changes in the fishery. However, there were dramatic changes in vessel participation. The number of vessels registered for the fishery fell from 251 to 89—or by almost two- thirds (65 %). Correspondingly, the number of pots registered fell by more than two- thirds (68 %). With the decline in vessel participation there was a dramatic increase in average effort, harvest, and ex- vessel value per vessel. The average number of pots pulled per vessel more than tripled from 362 to 1161. The average landings per vessel almost tripled from 1.1 to 3.0. The average harvest per vessel more than tripled from 56 thousand pounds to 185 thousand pounds. The average ex- vessel value per vessel more than tripled from $262 thousand to $792 thousand. These changes are summarized in Figures II -1 through II -8 on the following page. They clearly show a dramatic consolidation in the number of vessels participating in the Bering Sea Red King Crab fishery—with a corresponding dramatic increase in average catches and ex- vessel value per vessel. 8 18,000 16,000 14,000 12,000 - 10,000 - 8,857 8,000 6,000 ._. 4,000 2,000 _. - -- 0 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 300 250 200 150 50 0 300 250 200 150 100 50 0 Figure 11 - 1 Figure 11 - 5 Bristol Bay Red (Ling Crab Fishery, 2002 -2005: Total Harvest (pounds) 14,530 2002 2003 2004 Figure 11 - 2 Bristol Bay Red King Crab Fishery, 2002 -2005: Total Pots Pulled 254 2002 275 2003 14,112 2004 2002 2003 Figure 11 - 3 Bristol Bay Red King Crab Fishery, 2002-2005: Total Landings 270 2002 2003 2004 Figure 11 Bristol Bay Red King Crab Fishery, 2002 -2005: Total Vaseh Registered 2004 16,467 400 1,200 1,000 800 600 400 200 0 200,000 180,000 - 160,000 - 140,000 - 120,000 - 100,000 - 80,000 - 60,000 - 40,000 20,000 - 0 Bristol Bay Red King Crab Fishery, 2002 -2005: Average Pots Pulled per Vessel 2005/06 2002 2003 2004 Figure 11 Bristol Bay Red King Crab Fishery, 2002 -2005: Average Harvest per Vessel (pounds) 2005/06 2002 2003 Figure 11 - 7 Bristol Bay Red King Crab Fishery, 2002 -2005: Average Landings per Vessel 263 2005/06 2005/06 9 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 30 25 20 15 10 5 0 2002 2002 2004 2003 2004 Figure 11 Bristol Bay Red King Crab Fishery, 2002 -2005: Average Days Fished per Vessel (2005/06 estimate is pre/iminary) 2003 2004 2005/06 2005/06 2005/06 2005/06 Almost all of the 2005 Bristol Bay Red King Crab fishery took place during a ten -week period from the middle of October to the middle of December. The number of participating vessels peaked at 72 during the second and third weeks and declined to less than 30 by the seventh week. Catch per unit of effort (CPUE) declined from 41 in the first week to 22 by the fourth week and 15 by the eighth week. I did not have data on which vessels fished in which weeks. However, available preliminary ADFG data suggest that most of the fleet fished for 2 -3 weeks near the beginning of the season, with relatively high catch per unit of effort (CPUE) compared to historical averages. A smaller number fished much longer seasons, with CPUE declining as the season progressed. Data in Figures 11-9 through 11-11 are from "Review of major BSAI crab fisheries, 2005/06," a powerpoint presentation prepared by Forrest R. Bowers, ADFG, May 2006. The data are preliminary estimates. Figure 11-9 80 70 60 50 40 30 20 10 0 Figure 11 -10 Figure 11 -11 10 Bristol Bay Red King Crab Fishery 2005 Estimated Fleet Size, by Week z ° ° ° ° ° , 5 Week ending date Bristol Bay Red King Crab Fishery 2005 Weekly Average Catch per Unit of Effort Bristol Bay Red King Crab Fishery 2005 Weekly Harvest (thousands of pounds) Week ending date Type of measure Measure 2004 2005/06 Change % Change Total catch and effort Harvest (000 pounds) 23,036 30,840 7,803 34% Number of pots pulled 69,617 114,161 44,544 64% Number of landings 196 274 78 40% Use of vessels and pots in fishing Average pots registered per vessel 79 172 93 118% Catch per unit of effort (CPUE) 240 180 -60 -25% Vessel participation Number of vessels registered 164 80 -84 -51 % Number of pots registered 12,930 13,734 804 6% Average effort, harvest and value per vessel Average pots pulled per vessel 424 1,427 1,003 236% Estimated avg. da s fished per vessel 5 42 37 740% Average landings per vessel 1.2 3.4 2.2 187% Average harvest per vessel (pounds) 140,465 385,495 245,030 174% Table II -6 provides an overview of changes in the Bering Sea Snow Crab fishery between the 2005 season and the 2006 season. Table II -6 • the Berine Sea Snow Crab Fishery Between the 2005 and 2005/06 Seasons The 2006 harvest was 34% higher than the 2005 harvest, and the total number of landings was 40% higher. The total number of pots pulled was 64% higher (reflecting a 25% decline in catch per unit of effort). Note that these changes were much greater than for the Bristol Bay Red King Crab (BBR) fishery, for which harvests and pots pulled increased by only 17% and 14 %, respectively, and the number of landings stayed about the same. The average number of pots registered per vessel was more than twice as high, again in contrast to the BBR fishery for which average pots registered per vessel declined. The number of vessels registered fell dramatically from 164 to 80 or by about one -half. However, the relative decline was less dramatic than for the BBR fishery, for which vessel participation fell by almost two- thirds. With the decline in vessel participation and CPUE, there was a dramatic increase in average effort per vessel. The average number of pots pulled per vessel more than tripled from 424 to 1427. Similarly, there was a dramatic increase in average landings and catches per vessel. Average landings per vessel almost tripled from 1.2 to 3.4, and average harvest per vessel almost tripled from 140 thousand pounds to 385 thousand pounds. These changes are summarized in Figures II -12 through II -19 on the following page. 11 250 200 150 100 50 0 35, 30,000 25,000 20,000 15,000 10,000 5,000 0 160, 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 300 250 200 150 100 50 0 2003 Figure 11 - 12 Bering Sea Snow Crab Fishery, 2003 -2006: Total Harvest (pounds) 2003 2004 Figure 11 Bering Sea Snow Crab Fishery, 2003-2006: Total Pots Pulled 2004 2005 2005 2005 2005/06 2003 2004 2005 Figure 11 - 14 Bering Sea Snow Crab Fishery, 2003-2006: Total Landings 2005/06 2003 2004 Figure 11 - 15 Bering Sea Snow Crab Fishery, 2003 -2006: Total Vessels Registered 2005/06 192 189 164 80 2005/06 12 40 3.5 3.0 25 2.0 1,5 1.0 0.5 0.0 45 40 35 30 25 20 15 10 5 0 1,600 1,400 1,200 1,000 800 600 400 200 0 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Figure 11 Bering Sea Snow Crab Fishery, 2003 -2006: Average Pots Pulled per Vessel 2003 2004 2005 Figure 11 - 17 Bering Sea Snow Crab Fishery, 2003 -2006: Average Harvest per Vessel (pounds) 2005/06 137,198. 117,302 140,465 385,495 9 2003 2004 Figure 11 - 18 Bering Sea Snow Crab Fishery, 2003 -2006: Average Landings per Vessel 2004 2005 Figure 11 - 19 Bering Sea Snow Crab Fishery, 2003 - 2006: Average Days Fished per Vessel (2005/06 estimate u preliminary) 8 5 2005 2005/06 2005/06 42 2003 2004 2005 2005/06 Almost all of the 2006 Bering Sea Snow Crab fishery took place during a fifteen -week period from the middle of January to the end of April. The highest weekly participation was 43 vessels. The seasons lasted longer and vessel participation, average catches per unit of effort, and weekly harvests were distributed more uniformly across the season than for the Bristol Bay Red King Crab fishery. Participation and harvests peaked twice, in late January and mid - March. I did not have data on which vessels fished in which weeks. However, available preliminary ADFG data suggest that individual vessels participated at different times during the season, for more weeks on average than for the Bristol Bay Red King Crab fishery. Data in Figures 11-20 through 11-22 are from "Review of major BSAI crab fisheries, 2005/06," a powerpoint presentation prepared by Forrest R. Bowers, ADFG, May 2006. The data are preliminary estimates. Figure 11 -20 50 45 40 35 30 25 20 15 10 5 0 Figure 11 -21 300 250 200 150 100 50 Figure 11-22 Week tattling dale A 2 13 Bering Sea Snow Crab Fishery 2006 Weekly Average Catch per Unit of Effort Bering Sea Snow Crab Fishery 2006 Estimated Fleet Size, by Week W eekmNngdae Bering Sea Snow Crab Fishery 2006 Weekly Harvest (thousands of pounds) Year and Fishery Participation Combinations Percent of vessels BBR BSS BBR BSS Number of vessels 2004/05 2004/05 2005/06 2005/06 X X X X 67 26% X X 79 31% X 73 29% X X X 11 4% X X X 9 4% X X X 3 1% X X 8 3% X X 1 0.4% X 3 1% Total number of vessels 254 100% III. EFFECTS OF RATIONALIZATION ON KODIAK VESSEL PARTICIPATION IN BSAI CRAB FISHERIES In this chapter, I discuss the extent of fleet consolidation in the BSAI crab fisheries which occurred in 2005/06, and in particular changes in Kodiak vessel participation in these fisheries. As noted above, the extent of consolidation in the first year of BSAI crab rationalization was dramatic. For this study I have not analyzed why consolidation occurred, nor am I concluding that the extent of consolidation was good or bad or too much or too little. My general understanding from talking with vessel owners is that high fuel prices and high quota lease rates probably contributed to the extent of consolidation. Note that the number of vessels which fished in 2005/06 is not necessarily an indication of how many may fish in the future. As quotas, prices and costs change, the number of vessels participating in the fishery in the future could increase or decrease compared with this year. The analysis in this chapter is based upon lists provided by the Alaska Department of Fish and Game of the vessels which registered for the Bristol Bay Red King Crab fishery and the Bering Sea Snow Crab fishery in 2004/05 and 2005/06. There were 259 vessels which registered for at least one of these fisheries in at least one of these years. Table III -1 summarizes the combinations of vessel registration in these two fisheries for these two years. There were 67 vessels (26%) which registered for both fisheries in both years. There were 79 vessels (31%) which registered for both fisheries in 2004/05 but in neither fishery in 2005/06. There were 73 vessels (29 %) which registered only for the 2004/05 Bristol Bay Red King Crab fishery. Other registration combinations accounted for the remaining 40 vessels (14 %). Table III -1 Combinations of Vessel Registration in the Bristol Bay Red King Crab and Bering Sea Snow Crab Fisheries in 2004/05 and 2 005/06 14 Between 2004/05 and 2005/06, the total number of vessels registering for at least one of the two major BSAI crab fisheries fell from 254 to 99 (a decline of 61 %). Only 39% of the vessels which registered for at least one fishery in 2004/05 registered for at least one fishery in 2005/06 (Table III -2 and Figure III -1). Between 2004/05 and 2005/06, the total number of vessels registering for the Bristol Bay Red King Crab fishery fell from 251 to 89 (a decline of 65 %), and the total number of vessels registering for the Bering Sea Snow Crab fishery fell from 169 to 80 (a decline of 53%). Note: A total of 254 vessels registered for at least one fishery in 2004/05. All oI the vessels which register in 2005/06 had registered for at least one fishery in 2004/05. 300 250 200 150 100 - - 50 Table III -2 Number of Vessels Which Registered for the Bristol Bay Red King Crab and Berine Sea Snow Crab Fisheries in 2004/05 and 2005/06 Figure III - Number of Vessels Which Registered for the Two Major BSAI Crab Fisheries, 2004/05 & 2005/06 254 r 185' 166 2004/05 to 19 70 15 99 2005/06 ❑Only Bering Sea Snow Crab ® Only Bristol Bay Red King Crab • Both Fisheries 8 Note that fishery participation may be slightly smaller than the number of vessels which registered. For both fisheries and years, the number of vessels which registered in both years is identical to the "number of vessels" reported in "Review of major BSAI crab fisheries, 2005 /06" (powerpoint presentation prepared by Forrest R. Bowers, ADFG, May 2006), except that for the Bering Sea Snow Crab Fishery in 2004 /05, the number of vessels which registered was 169 while the "number of vessels" in "Review of major BSAI crab fisheries, 2005/06" was 164. 2004/05 2005/06 2004/05 2005/06 Change % Change Either Fishery: TOTAL 254 99 100% 39% -155 -61% , Bristol Bay Red King Crab: TOTAL 251 89 99% 35% -162 -65% Bering Sea Snow Crab: TOTAL 169 80 67% 31% -89 -53% Both Fisheries 166 70 65% 28% -96 -58% Only Bristol Bay Red King Crab 85 19 33% 7% -66 -78% Only Bering Sea Snow Crab 3 10 1% 4% 7 233% Neither Fishery 0 155 0% 61% _ 155 Between 2004/05 and 2005/06, the total number of vessels registering for at least one of the two major BSAI crab fisheries fell from 254 to 99 (a decline of 61 %). Only 39% of the vessels which registered for at least one fishery in 2004/05 registered for at least one fishery in 2005/06 (Table III -2 and Figure III -1). Between 2004/05 and 2005/06, the total number of vessels registering for the Bristol Bay Red King Crab fishery fell from 251 to 89 (a decline of 65 %), and the total number of vessels registering for the Bering Sea Snow Crab fishery fell from 169 to 80 (a decline of 53%). Note: A total of 254 vessels registered for at least one fishery in 2004/05. All oI the vessels which register in 2005/06 had registered for at least one fishery in 2004/05. 300 250 200 150 100 - - 50 Table III -2 Number of Vessels Which Registered for the Bristol Bay Red King Crab and Berine Sea Snow Crab Fisheries in 2004/05 and 2005/06 Figure III - Number of Vessels Which Registered for the Two Major BSAI Crab Fisheries, 2004/05 & 2005/06 254 r 185' 166 2004/05 to 19 70 15 99 2005/06 ❑Only Bering Sea Snow Crab ® Only Bristol Bay Red King Crab • Both Fisheries 8 Note that fishery participation may be slightly smaller than the number of vessels which registered. For both fisheries and years, the number of vessels which registered in both years is identical to the "number of vessels" reported in "Review of major BSAI crab fisheries, 2005 /06" (powerpoint presentation prepared by Forrest R. Bowers, ADFG, May 2006), except that for the Bering Sea Snow Crab Fishery in 2004 /05, the number of vessels which registered was 169 while the "number of vessels" in "Review of major BSAI crab fisheries, 2005/06" was 164. A starting point for my analysis for this report was to estimate the changes in participation in these fisheries by Kodiak vessels. However, there isn't any clear definition of a "Kodiak Vessel." Potential definitions of a "Kodiak Vessel" might be based, for example, upon where the owner lives, where the vessel is usually docked when it is not fishing, or whether the vessel rents a slip in the harbor. Any of these indicators may change over time if the owner moves, the vessel is sold, or the vessel's fishery participation change. In order to get a general sense of which crab vessels might be "Kodiak Boats," I showed the 2004/05 Bristol Bay Red King Crab fishery vessel registration list to a number of Kodiak residents involved with or knowledgeable about Kodiak fishing (the harbormaster, vessel owners, captains and crew members). These individuals were generally in agreement about (a) which boats were definitely "Kodiak boats" and (b) which boats were definitely not "Kodiak boats." There were a few boats —about five—on which individuals had differing opinions. Generally these were boats that were in Kodiak only some of the time, that were in Kodiak less now than they had formerly been, or that had been formerly owned by a Kodiak resident but which had been sold. Based on these individuals' opinions, I developed the list shown below of those vessels which had registered for the Bristol Bay Red King Crab fishery in 2004/05 which I assumed —for the purposes of the analysis in this report—to be "Kodiak Boats." Table III -3 Vessels which Registered for the 2004/05 Bristol Bay King Crab Fishery Which I Assumed to be "Kodiak Boats" for this Preliminary Analysis ALASKA CHALLENGER HANDLER MELANIE ALASKA SPIRIT ICE LANDER MIDNITE SUN ALICIA JEAN INCENTIVE NORDIC VIKING ALPINE COVE IRENE H NORTH POINT AMERICAN WAY ISLAND MIST NUKA ISLAND ARGOSY JEANOAH OBSESSION ATLANTICO KATHERINE OCEAN BAY BIG BLUE KATRINA EM PACIFIC STAR BIG VALLEY KODIAK PACIFIC VENTURE BOTANY BAY LADY ALASKA PERSEVERANCE BUCCANEER LADY ALEUTIAN PROVIDER CHISIK ISLAND LADY HELEN RUFF & REDDY CORNELIA MARIE LADY KISKA SAGA COUGAR LADY KODIAK SEABROOKE DETERMINED LUCKY LADY SILVER SPRAY ELIZABETH F MAR DEL SUD STORM BIRD FOUR DAUGHTERS MARCY J TRAIL BLAZER GUARDIAN MARY J VIEKODA BAY I emphasize that this is not a "scientific" list. Nor can I claim any personal expertise at all as to which boats are "Kodiak Boats." (There are probably hundreds of Kodiak residents more qualified to make this kind of judgment.) Probably many readers of this 16 Year and Fishery Participation Combinations Number of vessels Percent of vessels BBR BSS BBR BSS 2004/05 2004/05 2005/06 2005/06 X X X X 16 30% X X 156 254 13 24% X 15 28% X X X 6 11% X X X 3 6% X X 1 2% Total number of vessels 54 100% report might suggest a few boats which should be left off or added to this list. However, I believe that the list is reasonable for the purposes of this preliminary analysis. Changing the list slightly— adding or removing a few boats —would not significantly change any of the conclusions of this analysis. Table III -5 summarizes the combinations of vessel registration for the 54 "Kodiak Boats" in the two major BSAI fisheries in 2004/05 and 2005/06. There were 16 vessels (30 %) which registered for both fisheries in both years. There were 13 vessels (24 %) which registered for both fisheries in 2004/05 but in neither fishery in 2005/06. There were 15 vessels (28 %) which registered only for the 2004/05 Bristol Bay Red King Crab fishery. Other registration combinations accounted for the remaining 10 vessels (19 %). Table III -5 Combinations of "Kodiak Boat" Registration in the Bristol Bay Red King Crab and Bering Sea Snow Crab Fisheries in 2004/05 and 2005/06 9 I had originally planned to base my list of "Kodiak Boats" based upon the "home ports" listed in the Alaska Department of Fish and Game's 2004 vessel database. However, upon talking with Kodiak residents it quickly became clear that they did not consider the "home port" listed in the ADFG 2004 vessel database to be an accurate indicator of which boats were "Kodiak Boats." As shown in the table, for 5 of the vessels considered "Kodiak Boats" by Kodiak residents, the ADFG vessel database listed home ports in other Alaska communities, and for 9 of these boats the ADFG vessel database listed home ports in other states. In addition, the ADFG vessel database listed Kodiak as home port for 5 vessels not considered "Kodiak Boats" by residents. Comuarision of "Kodiak Boats" with Home Port in ADFG 2004 Vessel Database 17 Home Port in ADFG 2004 Vessel Database Total Kodiak Other Alaska Community Other State Kodiak Boats 40 5 9 54 on- Kodiak Boats 5 48 147 200 Total 45 53 156 254 report might suggest a few boats which should be left off or added to this list. However, I believe that the list is reasonable for the purposes of this preliminary analysis. Changing the list slightly— adding or removing a few boats —would not significantly change any of the conclusions of this analysis. Table III -5 summarizes the combinations of vessel registration for the 54 "Kodiak Boats" in the two major BSAI fisheries in 2004/05 and 2005/06. There were 16 vessels (30 %) which registered for both fisheries in both years. There were 13 vessels (24 %) which registered for both fisheries in 2004/05 but in neither fishery in 2005/06. There were 15 vessels (28 %) which registered only for the 2004/05 Bristol Bay Red King Crab fishery. Other registration combinations accounted for the remaining 10 vessels (19 %). Table III -5 Combinations of "Kodiak Boat" Registration in the Bristol Bay Red King Crab and Bering Sea Snow Crab Fisheries in 2004/05 and 2005/06 9 I had originally planned to base my list of "Kodiak Boats" based upon the "home ports" listed in the Alaska Department of Fish and Game's 2004 vessel database. However, upon talking with Kodiak residents it quickly became clear that they did not consider the "home port" listed in the ADFG 2004 vessel database to be an accurate indicator of which boats were "Kodiak Boats." As shown in the table, for 5 of the vessels considered "Kodiak Boats" by Kodiak residents, the ADFG vessel database listed home ports in other Alaska communities, and for 9 of these boats the ADFG vessel database listed home ports in other states. In addition, the ADFG vessel database listed Kodiak as home port for 5 vessels not considered "Kodiak Boats" by residents. Comuarision of "Kodiak Boats" with Home Port in ADFG 2004 Vessel Database 17 Between 2004/05 and 2005 /06, the total number of "Kodiak Boats" registering for at least one of the two major BSAI crab fisheries fell from 54 to 26 (a decline of 52 %). Only 48% of the "Kodiak Boats" which registered for at least one fishery in 2004/05 registered for at least one fishery in 2005/06 (Table III -2 and Figure Il1-1). Between 2004/05 and 2005 /06, the total number of "Kodiak Boats" registering for the Bristol Bay Red King Crab fishery fell from 54 to 23 (a decline of 57 %), and the total number of vessels registering for the Bering Sea Snow Crab fishery fell from 38 to 19 (a decline of 50 %). o a o i oats re for at l east one f in 2004/05. 60 50 - 40 30 - 20 - - �38 10 - 0 Table III - 6 Number of "Kodiak Boats" Which Registered for the Bristol Bay Red King Crab and Berin Sea Snow Crab Fish i n 2004/05 and 2005/06 16 Figure III - 2 Number of "Kodiak Boats" Which Registered for the Two Major BSAI Crab Fisheries, 2004/05 & 2005/06 54 2004/05 r3 I7 16] 18 26 tCr 2005/06 O Only Bering Sea Snow Crab ® Only Bristol Bay Red King Crab • Both Fisheries 2004/05 2005/06 2004/05 2005/06 Change % Change Either Fishery: TOTAL 54 26 100% 48% -28 -52% Bristol Bay Red King Crab: TOTAL 54 23 100% 43% -31 -57% Bering Sea Snow Crab: TOTAL 38 19 70% 35% -19 -50% Both Fisheries 38 16 70% 30% -22 -58% Only Bristol Bay Red King Crab 16 7 30% 13% -9 -56% Only Bering Sea Snow Crab 0 3 0% 6% 3 Neither Fishery 0 28 0% 52% _ 28 Between 2004/05 and 2005 /06, the total number of "Kodiak Boats" registering for at least one of the two major BSAI crab fisheries fell from 54 to 26 (a decline of 52 %). Only 48% of the "Kodiak Boats" which registered for at least one fishery in 2004/05 registered for at least one fishery in 2005/06 (Table III -2 and Figure Il1-1). Between 2004/05 and 2005 /06, the total number of "Kodiak Boats" registering for the Bristol Bay Red King Crab fishery fell from 54 to 23 (a decline of 57 %), and the total number of vessels registering for the Bering Sea Snow Crab fishery fell from 38 to 19 (a decline of 50 %). o a o i oats re for at l east one f in 2004/05. 60 50 - 40 30 - 20 - - �38 10 - 0 Table III - 6 Number of "Kodiak Boats" Which Registered for the Bristol Bay Red King Crab and Berin Sea Snow Crab Fish i n 2004/05 and 2005/06 16 Figure III - 2 Number of "Kodiak Boats" Which Registered for the Two Major BSAI Crab Fisheries, 2004/05 & 2005/06 54 2004/05 r3 I7 16] 18 26 tCr 2005/06 O Only Bering Sea Snow Crab ® Only Bristol Bay Red King Crab • Both Fisheries Not all of the decline in vessel participation in the 2004/05 BSAI crab fisheries is attributable to rationalization. As shown in Table III -7, of the vessels which registered for either of the two 2004/05 major BSAI crab fisheries, 155 did not register for either fishery in 2005/06. Of these 155 vessels, 23 were "bought out" under the buyback program, one of which was a Kodiak Boat. In addition, one "Kodiak Boat," the Big Valley, was lost at the start of the 2004/05 Bering Sea Snow Crab season. The remaining 131 boats which did not register left the crab fishery for other reasons —which were presumably associated with crab rationalization. Based on this reasoning, crab rationalization accounted for about 85% of the decline in the number of vessels registering for the Bristol Bay Red King Crab season, and 99% of the decline in the number of vessels registering for the Bering Sea Snow Crab season. Similarly, crab rationalization accounted for about 94% of the decline in the number of "Kodiak Boats" registering for the Bristol Bay Red King Crab season, and 95% of the decline in the number of "Kodiak Boats" registering for the Bering Sea Snow Crab season. our ves "Kodiak Boats." Table III -7 Reasons for Changes in Fishery Participation Between 2004/05 and 2005/06 19 Registered in 2004/05 Also registered in 2005/0( Did not register in 2005/06 Total Bought out Lost during 2004/05 season Other reasons (presumably rationalization; % bought out or lost %other reasons (presumably rationalization) All vessels Either fishery 254 99 155 23 1 131 15% 85% Bristol Bay Red King Crab 251 89 162 23 1 138 15% 85% Bering Sea Snow Crab* 169 76 97 0 1 96 1% 99% "Kodiak Boats" Either fishery 54 26 28 1 1 26 7% 93% Bristol Bay Red King Crab 54 23 31 1 1 29 6% 94% Bering Sea Snow Crab 38 19 19 0 1 18 5% 95% Non- Kodiak Boats Either fishery 200 73 127 22 0 105 17% 83% Bristol Bay Red King Crab 197 66 131 22 0 109 17% 83% Bering Sea Snow Crab* 131 57 78 0 0 78 0% 100% -_ .. T., e__... A - ..1.noh.... in mrns)na whirl, had not reerstered in 2064/05. None of these were Not all of the decline in vessel participation in the 2004/05 BSAI crab fisheries is attributable to rationalization. As shown in Table III -7, of the vessels which registered for either of the two 2004/05 major BSAI crab fisheries, 155 did not register for either fishery in 2005/06. Of these 155 vessels, 23 were "bought out" under the buyback program, one of which was a Kodiak Boat. In addition, one "Kodiak Boat," the Big Valley, was lost at the start of the 2004/05 Bering Sea Snow Crab season. The remaining 131 boats which did not register left the crab fishery for other reasons —which were presumably associated with crab rationalization. Based on this reasoning, crab rationalization accounted for about 85% of the decline in the number of vessels registering for the Bristol Bay Red King Crab season, and 99% of the decline in the number of vessels registering for the Bering Sea Snow Crab season. Similarly, crab rationalization accounted for about 94% of the decline in the number of "Kodiak Boats" registering for the Bristol Bay Red King Crab season, and 95% of the decline in the number of "Kodiak Boats" registering for the Bering Sea Snow Crab season. our ves "Kodiak Boats." Table III -7 Reasons for Changes in Fishery Participation Between 2004/05 and 2005/06 19 Vessel Name ADF &GA 2004/05 _. 200 /06 Bay Red King Crab Benng Sea Snow Crab Bristol Bay Red King Crab Benng Sea Snow Crab Atlantico 37 X X X X Provider 58 X X X X Nordic Viking 8500 X X X X Mar Del Sud 21652 X X X X Trailblazer 33704 X X X X Obsession 34374 X X X X Determined 35306 X X X X Seabrooke 36800 X X X X Big Blue 37241 X X X X Four Daughters 41444 X X X X Stomr Bird 46854 X X X X Cornelia Marie 59109 X X X X Silver Spray 60860 X X X X Lady Alaska 61351 X X X X Island Mist 61791 X X X X Handler 62436 X X X X Kodiak 3525 X X X Alaska Challenger 4100 X X X Melanie 20363 X X X Nuka Island 35640 X X X Botany Bay 45066 X X X Incentive 63000 X X X Alaska Spirit 35949 X X X Viekoda Bay 57971 X X X 1'Juardian 61571 X X X Big Valley** 23460 X X Icelander 2 X X Lady Helen 16 X X Pacific Venture 986 X X Saga 11022 X X Lady Kiska 35522 X X Katrina Em 38972 X X Mary 1 40217 X X Lady Aleutian 41715 X X Pacific Star 59521 X X Alicia Jean 60865 X X Lady Kodiak 61352 X X Perseverance 63219 X X Elizabeth F 14767 X X American Way* 47839 X Buccaneer 25 X Ruff &Reddy 53 X Marcy) 55 X Midnite Sun 65 X Lucky Lady 6485 X Cougar 6700 X Irene H 6710 X Chisik Island 12512 X Jeanoah 14963 X Alpine Cove 30100 X Argosy 38547 X North Point 53800 X Katherine 58133 X ocean Bay 68008 X Table III -8 below summarizes the data on which the analysis in this chapter of "Kodiak Boat" registration for major Bering Sea crab fisheries is based. Table III-8 "Kodiak Boat" Registration for M 10 In June 2006 I plan to revise this draft preliminary analysis to address review comments and questions. I invite comments on the list of "Kodiak Boats," as well as corrections to any errors this table may contain. I may be contacted at 907 - 786 -7717 or Gunnar.Knapp @uaa.alaska.edu. 20 g 2004/05 Benng Sea now Crab season. Step Key Assumptions tjuauty of rnmrmauon on wmcn to Base Assumptions Estimate total changes in jobs on Kodiak Boats and other boats Average jobs per boat before and after rationalization Medium: No data are available on average crew size before or after rationalization,but anecdotal evidence is fairly consistent. It is uncertain whether average crew sizes have changed. Estimate change in jobs for Kodiak residents Percentage of jobs held by Kodiak residents on "Kodiak Boats" and on Non - Kodiak Boats Low. We don't have any reliable data on where crew live. We do have data however on where crab permit holders (usually captains) live. Estimate changes in days worked Days worked per crab fishing job Low. Available ADFG data on "average fishing days" are preliminary. No data are available on average days spent in transit, in port between landings, or working in Kodiak before and after the season. IV. EFFECTS OF RATIONALIZATION ON KODIAK CRAB FISHING JOBS In this chapter, I estimate effects of rationalization on Kodiak crab fishing jobs and days worked in crab fishing. This involves several steps, which are summarized in Table IV -1. Each step requires making assumptions. Some of these assumptions are uncertain because the information on which to base them is limited. Table IV -1 In this chapter, I begin by using "best guess" assumptions for each step in order to develop "best guess" estimates of effects of rationalization on Kodiak jobs. Then I show how changing different assumptions changes the estimated effects of rationalization on Kodiak jobs and hours worked. For this study, I use the term "job" to refer to working on a crab fishing boat for a season for a particular BSAI crab fishery. The job includes not only days spent fishing but also work done in port before and after the season as well as transit time to the Bering Sea. In previous seasons these were relatively short-term jobs, lasting a few weeks of very hard work. With rationalization crab fishing jobs last longer (and vary considerably in how long they last, because boats vary in how much quota they catch and how long they fish for it). I did not have any data on how many people work on Bering Sea crab boats. Most people I talked with told me that most Bering Sea crab boats fish with either 5 or 6 people working on board (captain and crew total). As a starting "best guess" I assumed an average of 5.5 crab fishing jobs per vessel. To estimate total crab fishing jobs before and after rationalization, I multiplied the number of vessels fishing by 5.5. During the 2005/06 season, some boats which had fished for BSAI crab in earlier seasons participated in other fisheries —in effect creating new jobs in those fisheries. I haven't estimated how many of these new jobs were created because I did not have any data on With rationalization, the number of people working on some boats declined. Later in this chapter, I show how assuming a lower average crew size after rationalization would affect the estimated loss in jobs. 21 how many boats which left the crab fishery participated in other fisheries. To the extent that new jobs were created in other fisheries, my analysis overstates fishing job losses clue to rationalization. Note, however, that earnings from working in other fisheries were probably less than earnings had been in the crab fisheries. Assuming an average of 5.5 jobs per vessel, the decline in the number of boats fishing between 2004/05 and 2005/06 resulted in a loss of 891 total jobs in the Bristol Bay Red King Crab fishery and 462 jobs in the Bering Sea Snow Crab fishery. Adjusting for the percentage of the decline in vessel participation attributable to rationalization (rather than buyback and vessel losses), rationalization resulted in an estimated loss of 757 total jobs in the BBR fishery, of which 160 were on "Kodiak Boats," and an estimated loss of 457 total jobs in the BSS fishery, of which 99 were on "Kodiak Boats." (Table IV -1, Figure IV -1) Estimated Job Losses in Major BSAI Crab Fi Note: Assumes average of 5.5 jobs per vessel. *Based on percentage of vessels not registering in 2005/06 for reasons other than buyback or vessel loss (see Table 111 -7 for derivation). Totals may not add exactly due to rounding. 9011 800 700 600 500 400 300 200 100 0 Estimated Crab Fishing Joh Losses due to Crab Rationalization Table IV -2 Figure IV -1 22 457 Bristol Bay Red King Crab jobs Bering Sea Snow Crab jobs ❑ lobs on other boats • Jobs on 'Kodiak boats' Bristol Bay Red King Crab Fishery Bering Sea Snow Crab Fishery Total "Kodiak Boats" Other Boats Total "Kodiak Boats" Other Boats Number of vessels 2004/05 251 54 197 164 38 126 2005/06 89 23 66 80 19 61 Change -162 -31 -131 -84 -19 -65 Estimated fishing jobs 2004/05 1381 297 1084 902 209 693 2005/06 490 127 363 440 105 336 Change -891 -171 -721 -462 -105 -358 % of job losses attributable to rationalization* 85% 94% 83% 99% 95% 100% Estimated job losses due to rationalization 757 160 598 457 99 358 how many boats which left the crab fishery participated in other fisheries. To the extent that new jobs were created in other fisheries, my analysis overstates fishing job losses clue to rationalization. Note, however, that earnings from working in other fisheries were probably less than earnings had been in the crab fisheries. Assuming an average of 5.5 jobs per vessel, the decline in the number of boats fishing between 2004/05 and 2005/06 resulted in a loss of 891 total jobs in the Bristol Bay Red King Crab fishery and 462 jobs in the Bering Sea Snow Crab fishery. Adjusting for the percentage of the decline in vessel participation attributable to rationalization (rather than buyback and vessel losses), rationalization resulted in an estimated loss of 757 total jobs in the BBR fishery, of which 160 were on "Kodiak Boats," and an estimated loss of 457 total jobs in the BSS fishery, of which 99 were on "Kodiak Boats." (Table IV -1, Figure IV -1) Estimated Job Losses in Major BSAI Crab Fi Note: Assumes average of 5.5 jobs per vessel. *Based on percentage of vessels not registering in 2005/06 for reasons other than buyback or vessel loss (see Table 111 -7 for derivation). Totals may not add exactly due to rounding. 9011 800 700 600 500 400 300 200 100 0 Estimated Crab Fishing Joh Losses due to Crab Rationalization Table IV -2 Figure IV -1 22 457 Bristol Bay Red King Crab jobs Bering Sea Snow Crab jobs ❑ lobs on other boats • Jobs on 'Kodiak boats' The number of jobs lost by Kodiak residents is different from the loss of jobs on "Kodiak boats " — because not everyone working on a Kodiak boat is a Kodiak resident, and some Kodiak residents work on non - Kodiak boats. To estimate job losses for Kodiak residents, I had to adjust for percentage of jobs held by Kodiak residents. There are no data where crab fishing crew live, or the extent the people who work on Kodiak Boats are Kodiak residents. However, data are available on where crab permit- holders live. I used the percentage of 2004/05 permit- holders who were Kodiak residents (Tables IV -3 through IV -6) as "best guess" assumptions for how many crab jobs were held by Kodiak residents. Table IV -3 Residence of Bristol Bay Red King Crab Fishery Permit Holders, 2004/05 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2004. Table IV-4 Residence of Bristol Bay Red King Crab Fishery Permit Holders, 2005/06 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Table IV -5 Residence of Bering Sea Snow Crab Fishery Permit Holders, 2004/05 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Table IV -6 Residence of Bering Sea Snow Crab Fishery Permit Holders, 2005/06 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Note: Actual permit holders may have differed for this fishery, which took place in 2006. a Every vessel delivering crab must have an ADFG permit holder on board, who signs the fish ticket. The permit holder is usually the vessel captain. 23 "Kodiak Boats" Other Boats Total Permit holder residence Kodiak 35 4 39 Other communities 19 191 210 Unknown 2 2 Total 54 197 251 % Kodiak residents 65% 2% 16% The number of jobs lost by Kodiak residents is different from the loss of jobs on "Kodiak boats " — because not everyone working on a Kodiak boat is a Kodiak resident, and some Kodiak residents work on non - Kodiak boats. To estimate job losses for Kodiak residents, I had to adjust for percentage of jobs held by Kodiak residents. There are no data where crab fishing crew live, or the extent the people who work on Kodiak Boats are Kodiak residents. However, data are available on where crab permit- holders live. I used the percentage of 2004/05 permit- holders who were Kodiak residents (Tables IV -3 through IV -6) as "best guess" assumptions for how many crab jobs were held by Kodiak residents. Table IV -3 Residence of Bristol Bay Red King Crab Fishery Permit Holders, 2004/05 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2004. Table IV-4 Residence of Bristol Bay Red King Crab Fishery Permit Holders, 2005/06 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Table IV -5 Residence of Bering Sea Snow Crab Fishery Permit Holders, 2004/05 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Table IV -6 Residence of Bering Sea Snow Crab Fishery Permit Holders, 2005/06 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Note: Actual permit holders may have differed for this fishery, which took place in 2006. a Every vessel delivering crab must have an ADFG permit holder on board, who signs the fish ticket. The permit holder is usually the vessel captain. 23 "Kodiak Boats" Other Boats Total Permit holder residence Kodiak 10 2 10 Other communities 9 60 69 Unknown 1 '. Total 19 61 80 % Kodiak residents 53% 0% 13% The number of jobs lost by Kodiak residents is different from the loss of jobs on "Kodiak boats " — because not everyone working on a Kodiak boat is a Kodiak resident, and some Kodiak residents work on non - Kodiak boats. To estimate job losses for Kodiak residents, I had to adjust for percentage of jobs held by Kodiak residents. There are no data where crab fishing crew live, or the extent the people who work on Kodiak Boats are Kodiak residents. However, data are available on where crab permit- holders live. I used the percentage of 2004/05 permit- holders who were Kodiak residents (Tables IV -3 through IV -6) as "best guess" assumptions for how many crab jobs were held by Kodiak residents. Table IV -3 Residence of Bristol Bay Red King Crab Fishery Permit Holders, 2004/05 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2004. Table IV-4 Residence of Bristol Bay Red King Crab Fishery Permit Holders, 2005/06 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Table IV -5 Residence of Bering Sea Snow Crab Fishery Permit Holders, 2004/05 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Table IV -6 Residence of Bering Sea Snow Crab Fishery Permit Holders, 2005/06 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Note: Actual permit holders may have differed for this fishery, which took place in 2006. a Every vessel delivering crab must have an ADFG permit holder on board, who signs the fish ticket. The permit holder is usually the vessel captain. 23 "Kodiak Boats" Other Boats Total Permit holder residence Kodiak 19 2 21 Other communities 19 126 145 Unknown 3 3 Total 38 131 169 % Kodiak residents 50% 2% 12% The number of jobs lost by Kodiak residents is different from the loss of jobs on "Kodiak boats " — because not everyone working on a Kodiak boat is a Kodiak resident, and some Kodiak residents work on non - Kodiak boats. To estimate job losses for Kodiak residents, I had to adjust for percentage of jobs held by Kodiak residents. There are no data where crab fishing crew live, or the extent the people who work on Kodiak Boats are Kodiak residents. However, data are available on where crab permit- holders live. I used the percentage of 2004/05 permit- holders who were Kodiak residents (Tables IV -3 through IV -6) as "best guess" assumptions for how many crab jobs were held by Kodiak residents. Table IV -3 Residence of Bristol Bay Red King Crab Fishery Permit Holders, 2004/05 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2004. Table IV-4 Residence of Bristol Bay Red King Crab Fishery Permit Holders, 2005/06 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Table IV -5 Residence of Bering Sea Snow Crab Fishery Permit Holders, 2004/05 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Table IV -6 Residence of Bering Sea Snow Crab Fishery Permit Holders, 2005/06 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Note: Actual permit holders may have differed for this fishery, which took place in 2006. a Every vessel delivering crab must have an ADFG permit holder on board, who signs the fish ticket. The permit holder is usually the vessel captain. 23 "Kodiak Boats" Other Boats Total Permit holder residence Kodiak 12 12 Other communities 11 65 76 Unknown 1 1 Total 23 66 89 % Kodiak residents 52% 0% 13% The number of jobs lost by Kodiak residents is different from the loss of jobs on "Kodiak boats " — because not everyone working on a Kodiak boat is a Kodiak resident, and some Kodiak residents work on non - Kodiak boats. To estimate job losses for Kodiak residents, I had to adjust for percentage of jobs held by Kodiak residents. There are no data where crab fishing crew live, or the extent the people who work on Kodiak Boats are Kodiak residents. However, data are available on where crab permit- holders live. I used the percentage of 2004/05 permit- holders who were Kodiak residents (Tables IV -3 through IV -6) as "best guess" assumptions for how many crab jobs were held by Kodiak residents. Table IV -3 Residence of Bristol Bay Red King Crab Fishery Permit Holders, 2004/05 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2004. Table IV-4 Residence of Bristol Bay Red King Crab Fishery Permit Holders, 2005/06 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Table IV -5 Residence of Bering Sea Snow Crab Fishery Permit Holders, 2004/05 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Table IV -6 Residence of Bering Sea Snow Crab Fishery Permit Holders, 2005/06 Source: Based on permit holder residency reported in CFEC Permit Holder Database 2005. Note: Actual permit holders may have differed for this fishery, which took place in 2006. a Every vessel delivering crab must have an ADFG permit holder on board, who signs the fish ticket. The permit holder is usually the vessel captain. 23 During the 2004/05 season, about two- thirds (65%) of the permit holders on "Kodiak Boats" in the BBR fishery were Kodiak residents, and half (50 %) of the permit holders in the BSS fishery were Kodiak residents. Only 2% of the permit holders on other boats were Kodiak residents. Assuming similar Kodiak residency shares for all the jobs on crab fishing vessels, rationalization resulted in an estimated loss of 104 jobs for Kodiak residents in the BBR fishery and 59 iobs for Kodiak residents in the BSS fishery (Table W-7 and Figure IV -2). Estimated Crab Fishing Job Losses of Assumes average of 5.5 Jobs per vessel. *Based on residency of vessel permit holders calculated 'n Tables IV -2 and IV-4. ** *Based on percen age of vessels not registering in 2005/06 for reasons other than buyback or vessel loss (see Table I11 -7 for derivation). Totals may not add exactly due to rounding. 900 800 700 600 500 400 300 200 100 0 Table IV -7 Figure IV -2 Estimated Crab Fishing Job Losses due to Crab Rationalization 457 399 159 1 Bristol Bay Red King Crab jobs Bering Sea Snow Cr bjobs 24 ❑Non-Kodiak Residents • Kodiak residents Bristol Bay Red King Crab Fishery Bering Sea Snow Crab Fishery Total "Kodiak Boats" Other Boats Total "Kodiak Boats" Other Boats Number of vessels 2004/05 251 54 197 164 38 126 2005/06 89 23 66 80 19 61 Estimated fishing jobs* 2004/05 1381 297 1084 902 209 693 2005/06 490 127 363 440 105 336 Assumed residency (% ** Kodiak residents 65% 2% 50% 2% Non- Kodiak residents 35% 98% 50% 98% Estimated fishing jobs in 2004/05, by residency Total 1381 297 1084 902 209 693 Kodiak residents 215 193 22 118 105 14 Non - Kodiak residents 1166 104 1062 784 105 679 Estimated fishing jobs in 2005/06, by residency Total 490 127 363 440 105 336 Kodiak residents 89 82 7 59 52 7 Non - Kodiak residents 400 44 356 381 52 329 Estimated loss of fishing jobs, by residency Total 891 171 721 462 105 358 Kodiak residents 125 111 14 59 52 7 Non - Kodiak residents 766 60 706 403 52 350 Estimated job losses attributable to rationalization * Percentage * ** 85% 94% 83% 99% 95% 100% Total 757 160 598 457 99 358 Kodiak residents 106 104 12 59 50 7 Non - Kodiak residents - 651 56 586 399 50 350 During the 2004/05 season, about two- thirds (65%) of the permit holders on "Kodiak Boats" in the BBR fishery were Kodiak residents, and half (50 %) of the permit holders in the BSS fishery were Kodiak residents. Only 2% of the permit holders on other boats were Kodiak residents. Assuming similar Kodiak residency shares for all the jobs on crab fishing vessels, rationalization resulted in an estimated loss of 104 jobs for Kodiak residents in the BBR fishery and 59 iobs for Kodiak residents in the BSS fishery (Table W-7 and Figure IV -2). Estimated Crab Fishing Job Losses of Assumes average of 5.5 Jobs per vessel. *Based on residency of vessel permit holders calculated 'n Tables IV -2 and IV-4. ** *Based on percen age of vessels not registering in 2005/06 for reasons other than buyback or vessel loss (see Table I11 -7 for derivation). Totals may not add exactly due to rounding. 900 800 700 600 500 400 300 200 100 0 Table IV -7 Figure IV -2 Estimated Crab Fishing Job Losses due to Crab Rationalization 457 399 159 1 Bristol Bay Red King Crab jobs Bering Sea Snow Cr bjobs 24 ❑Non-Kodiak Residents • Kodiak residents The estimates shown in Table IV -7 of crab fishing job losses due to rationalization are based on several "best guess" assumptions. Table IV -8 shows how changing some of these assumptions changes the estimates of job losses due to rationalization. Table IV -8 Effects of Different Assumptions on Estimated Job Losses due to Rationalization Those assumptions which are different from the "best guess assumptions are shown in bold. Alternative Assumptions A. If we assume that the average jobs per vessel decreased from 6.0 to 5.0 (rather than staying constant at 5.5) then the estimated Kodak resident job loss due to rationalization increases from 106 to 116 for the BBR fishery and from 59 to 64 for the BSS fishery. Alternative Assumptions B. If we assume that the share of crab jobs held by Kodiak residents in 2005/06 was equal to the share of permit holders on vessels in 2005/06 (rather than to the share of permit holders on vessels in 2004/06), then the estimated Kodiak resident job Loss increases to 127 for the BBR fishery and 62 for the BBS fishery. Alternative Assumptions C. If we assume higher Kodiak resident shares of crab fishing jobs of 75% of jobs on Kodiak boats and 5% of jobs on other boats, for both fisheries in both years, then the estimated Kodiak resident job loss increases to 139 for the BBR fishery and 95 for the BSS fishery. Alternative Assumptions D. If we assume that 100% of job losses are due to rationalization, then the estimated Kodiak resident job loss increases to 125 for the BBR fishery but stays the same for the BSS fishery. 25 "Best guess" Alternative Assumptions assumptions A B C D F Assumptions* Average jobs per vessel 2004/05 5.5 6.0 5.5 5.5 5.5 6.0 2005/06 5.5 5.0 5.5 5.5 5.5 5.0 Kodiak resident share of jobs on Kodiak Boats, BBR 2004/05 65% 65% 65% 75% 65% 75% 2005/06 65% 65% 52% 75% 65% 75% Kodiak resident share of jobs on Kodiak Boats, BSS 2004/05 50% 50% 50% 75% 50% 75% 2005/06 50% 50% 53% 75% 50% 75% Kodiak resident share of jobs on other boats, BBR 2004/05 2% 2% 2% 5% 2% 5% 2005/06 2% 2% 0% 5% 2% 5% Kodiak resident share of jobs on other boats, BSS 2004/05 2% 2% 2% 5% 2% 5% 2005/06 2% 2% 0% 5% 2% 5% %ofjob losses attributable to rationalization Kodiak boats, BBR 94% 94% 94% 94% 100% 100% Other boats, BBR 83% 83% 83% 83% 100% 100% Kodiak boats, BSS 95% 95% 95% 95% 100% 100% Other boats, BSS 100% 100% 100% 100% 100% 100% Estimated job losses due to rationalization Kodiak Residents BBR 106 116 127 139 125 179 BSS 59 64 62 95 59 105 Non - Kodiak Resident BBR 651 710 631 618 766 793 BSS 399 435 395 362 403 399 Total BBR 757 826 757 757 891 972 BSS 457 499 457 457 462 504 The estimates shown in Table IV -7 of crab fishing job losses due to rationalization are based on several "best guess" assumptions. Table IV -8 shows how changing some of these assumptions changes the estimates of job losses due to rationalization. Table IV -8 Effects of Different Assumptions on Estimated Job Losses due to Rationalization Those assumptions which are different from the "best guess assumptions are shown in bold. Alternative Assumptions A. If we assume that the average jobs per vessel decreased from 6.0 to 5.0 (rather than staying constant at 5.5) then the estimated Kodak resident job loss due to rationalization increases from 106 to 116 for the BBR fishery and from 59 to 64 for the BSS fishery. Alternative Assumptions B. If we assume that the share of crab jobs held by Kodiak residents in 2005/06 was equal to the share of permit holders on vessels in 2005/06 (rather than to the share of permit holders on vessels in 2004/06), then the estimated Kodiak resident job Loss increases to 127 for the BBR fishery and 62 for the BBS fishery. Alternative Assumptions C. If we assume higher Kodiak resident shares of crab fishing jobs of 75% of jobs on Kodiak boats and 5% of jobs on other boats, for both fisheries in both years, then the estimated Kodiak resident job loss increases to 139 for the BBR fishery and 95 for the BSS fishery. Alternative Assumptions D. If we assume that 100% of job losses are due to rationalization, then the estimated Kodiak resident job loss increases to 125 for the BBR fishery but stays the same for the BSS fishery. 25 Alternative Assumptions E. If we use the A, C and D assumptions together, then the estimated Kodiak resident job loss increases to 179 for the BBR fishery and 105 for the BSS fishery. I would consider this a maximum or upper -bound estimate of the Kodiak crab fishing job losses attributable to rationalization. Many people have pointed out to me that, although rationalization caused a dramatic decline in the number of crab fishing jobs, it was important to keep in mind that the remaining jobs lasted longer. Clearly the total amount of work being done in the crab fishery, as measured by the number of pots pulled and the volume of the crab harvest (shown in Tables I1 -5 and II -6), has not declined with rationalization. As an alternative measure of the effects of rationalization on crab fishing employment, I estimated how the number of days worked in the fishery changed. To do this, I multiplied the estimated number of crab fishing jobs in 2004/05 and 2005/06 by "best guess" assumptions about the average days worked in 2004/05 and 2005/06. The Alaska Department of Fish and Game has estimated that the average number of "days fished" in the BBR fishery increased from 3 days in 2004/05 to 26 days in 2005/06, and that the average number of "days fished" in the BSS fishery increased from 5 days in 2004/05 to 42 days in 2005/06. Note, however, that these estimates are preliminary and may change. Note also that the number of days fished varied widely for different vessels, reflecting variation in the total crab quota which they harvested. The number of days worked in the crab fisheries is considerably higher than the number of days fished, if we include days working on the boat in port before and after the season, days transiting from Kodiak or other ports to the Bering Sea, days spent in Dutch Harbor or other Bering Sea ports delivering crab and loading or unloading pots, and days traveling between these ports and the fishing grounds. However, no data are available on how many days are spent in these other activities that are an integral part of crab fishing. Table IV -9 (on the following page) shows the total days of work for BBR and BSS fishing jobs under alternative assumptions about days spent in these different crab fishing activities. For example, depending upon which assumptions we use, the total days worked per job in the BBR fishery may have been between 11 and 17 days in 2004/05 and between 34 and 44 days in 2005/06. I used the numbers shown in bold font as "best guess" assumptions about average days worked in each fishery —but these should not be considered "precise" or "accurate." 1- Under these assumptions, in the BBR fishery days worked per job increased from 14 in 2004/05 to 39 in 2005/06, and in the BSS fishery days worked per job increased from 16 to 55. The ratio of days worked per job in 2005/06 to days worked per job in 2004/05 was 2.8 for the BBR fishery and 3.4 for the BSS fishery. 13 Note that for purposes of estimating how rationalization affected total days worked, what really matters is what we assume about how the relative number of total days worked per job changed. For example, if the number of jobs decreased by two - thirds, the number of days worked would stay the same if the number of days worked per job tripled. 26 Table IV - 9 Estimated Total Days of Work for Bering Sea Fishing Job , Under Alternative Assumptions Based on ADFG estimates from Tables 11 3 and 11 -4. 2005/06 estimates are preliminary. Estimates shown in bold are used for Table 1V -8. 27 Total days worked Average days fishing* Days working in port before and after season Days in transit to and from Dutch Harbor Days traveling to and from fishing grounds and unloading Average number of landings* Days traveling to and from fishing grounds and unloading per landing 11 3 4 4 0 1.1 0 12 3 4 4 1 1.1 1 13 3 4 4 2 1.1 2 Bristol Bay Red King Crab Fishery, 2004/05 13 3 6 4 0 1.1 0 14 3 6 4 1 1.1 1 15 3 6 4 2 1.1 2 15 3 8 4 0 1.1 0 16 3 8 4 1 1.1 1 17 3 8 4 2 1.1 2 Bristol Bay Red King Crab Fishery, 2005/06 34 26 4 4 0 3.0 0 37 26 4 4 3 3.0 1 40 26 4 4 6 3.0 2 36 26 6 4 0 3.0 0 39 26 6 4 3 3.0 1 42 26 6 4 6 3.0 2 38 26 8 4 0 3.0 0 41 26 8 4 3 3.0 1 44 26 8 4 6 3.0 2 Bering Sea Snow Crab Fishery, 2004/05 13 5 4 4 0 1.2 0 14 5 4 4 1 1.2 1 15 5 4 4 2 1.2 2 15 5 6 4 0 1.2 0 16 5 6 4 1 1.2 1 17 5 6 4 2 1.2 2 17 5 8 4 0 1.2 0 18 5 8 4 1 1.2 1 19 5 8 4 2 1.2 2 Bering Sea Snow Crab Fishery, 2005/06 50 42 4 4 0 3.4 0 53 42 4 4 3 3.4 1 57 42 4 4 7 3.4 2 52 42 6 4 0 3.4 0 55 42 6 4 3 3.4 1 59 42 6 4 7 3.4 2 54 42 8 4 0 3.4 0 57 42 8 4 3 3.4 1 61 42 8 4 7 3.4 2 Table IV - 9 Estimated Total Days of Work for Bering Sea Fishing Job , Under Alternative Assumptions Based on ADFG estimates from Tables 11 3 and 11 -4. 2005/06 estimates are preliminary. Estimates shown in bold are used for Table 1V -8. 27 Based on these assumptions about days worked per job, the total days or years worked by Kodiak residents in the BBR and BSS crab fisheries stayed about the same in 2005/06 as in 2004/05. Put differently, the loss in jobs was approximately offset by the increase in days worked per job. A smaller number of people worked at crab fishing jobs which lasted longer, and did about the same amount of work in about the same number of total days. Table IV -10 Estimated Change in Years Worked in Major BSAI Crab Fisheries Between 2004/05 and 2005/06 ( Very Rough A for Purposes of tllusiradon) From Table I V -2. Based on assumptions shown m bold in Table IV -7 ** *Assumes 48 5 -day work weeks per year. Note: Estimates of changes in work years for Kodiak residents in the bottom half of the table are based on the same assumptions used in Table IV -7. 28 Bristol Bay Red King Crab Fishery Bering Sea Snow Crab Fishery Total "Kodiak Boats" Other Boats Total "Kodiak Boats" Boats Estimated fishing jobs* 2004/05 1381 297 1084 902 209 693 2005/06 490 127 363 440 105 336 Work days per job ** 2004/05 14 14 16 16 2005/06 39 39 55 55 Total work days 2004/05 19327 4158 15169 14432 3344 11088 2005/06 19091 4934 14157 24200 5748 18453 Change -237 776 -1012 9768 2404 7365 Total work years* ** 2004/05 81 17 63 60 14 46 2005/06 80 21 59 101 24 77 Change -1 3 -4 41 10 31 Assumed residency ( %) Kodiak residents* 65% 2% 50% 2% Non - Kodiak residents 35% 98% 50% 98% Estimated work year losses, 2004/05 to 2005/06 Total ** -1 3 -4 41 10 31 Kodiak residents 2 2 0 6 5 1 Non - Kodiak residents -3 1 -4 35 5 30 Estimated work year losses attributable to rationalization *i Percentage * ** 85% 94% 83% 99% 95% 100% Total ** -1 3 -3 40 10 31 Kodiak residents 2 2 0 6 5 1 Non - Kodiak residents -3 1 -3 35 5 30 Based on these assumptions about days worked per job, the total days or years worked by Kodiak residents in the BBR and BSS crab fisheries stayed about the same in 2005/06 as in 2004/05. Put differently, the loss in jobs was approximately offset by the increase in days worked per job. A smaller number of people worked at crab fishing jobs which lasted longer, and did about the same amount of work in about the same number of total days. Table IV -10 Estimated Change in Years Worked in Major BSAI Crab Fisheries Between 2004/05 and 2005/06 ( Very Rough A for Purposes of tllusiradon) From Table I V -2. Based on assumptions shown m bold in Table IV -7 ** *Assumes 48 5 -day work weeks per year. Note: Estimates of changes in work years for Kodiak residents in the bottom half of the table are based on the same assumptions used in Table IV -7. 28 V. EFFECTS OF RATIONALIZATION ON CRAB FISHING EARNINGS OF KODIAK CAPTAINS AND CREW The previous chapter looked at the crab fishing jobs which were it due to crab rationalization. This chapter looks at the crab fishing jobs which remain after crab rationalization. As shown in Table V -1, in the first year of crab rationalization, the number of crab fishing jobs declined significantly. However, as was discussed in Chapter II, the total amount of work being done in the crab fisheries —as measured by the total harvest and the number of pots lifted— stayed about the same. This is reflected in the estimates of crab fishing work -years shown in Table V -1, which stayed about the same for the Bristol Bay Red King Crab fishery and increased for the Bering Sea Snow Crab fishery. These work -years estimates should be considered highly approximate. The important point to be drawn from them is that rationalization did not lead to a significant decline in work years. Table V -1 "Best Guess" Estimates of Jobs and Work Years in Bering Sea Crab Fisheries, 2004/05 and 2005/06 *Assumed work days per job, and the estimates of work -years which are based on them, are as on lrnvte preliminary information and should be considered highly approximate. * *Estimated work -years are calculated based on the assumption that one work -year has 48 5 -day weeks. Source: Estimates derived in Tables IV -7 and IV -9. With much longer fishing seasons, most BSAI crab fishing jobs lasted much longer. In addition, there were other important changes in these jobs, particularly in how captains and crew were paid and what they earned. To understand these changes, it is important first to understand how crab fishermen were typically paid prior to rationalization. On most boats, captains and crew were paid a share of net eamings after deducting taxes and costs of fuel and bait. After calculating individual shares, costs of groceries were also deducted from what fishermen were paid. The specific details of how payments were calculated varied from boat to boat, with regard to what costs were deducted before calculating net earnings, and the shares paid to individual captains and crew. Typically, however, the total share paid to the "deck" (everyone working on the boat) was about 40%:—somewhat higher on some boats, and somewhat lower on others. 29 Estima ed Number of Jobs Assumed work days per job* Estimated Work- Years ** Kodiak Residents Non- Kodiak Residents Total Kodiak Residents Non - Kodiak Residents Total 2004/05 Bristol Bay Red King Crab 215 1166 1381 14 13 68 81 Bering Sea Snow Crab 118 784 902 16 8 52 60 Total 333 1949 2283 20 120 141 Change Bristol Bay Red King Crab -125 -766 -891 25 2 -3 -1 Bering Sea Snow Crab -59 -403 -462 39 6 35 41 Total -185 -1168 -1353 8 32 40 2005/06 Bristol Bay Red King Crab 89 400 490 39 15 65 80 Bering Sea Snow Crab 59 381 440 55 14 87 101 Total 148 781 930 28 152 180 V. EFFECTS OF RATIONALIZATION ON CRAB FISHING EARNINGS OF KODIAK CAPTAINS AND CREW The previous chapter looked at the crab fishing jobs which were it due to crab rationalization. This chapter looks at the crab fishing jobs which remain after crab rationalization. As shown in Table V -1, in the first year of crab rationalization, the number of crab fishing jobs declined significantly. However, as was discussed in Chapter II, the total amount of work being done in the crab fisheries —as measured by the total harvest and the number of pots lifted— stayed about the same. This is reflected in the estimates of crab fishing work -years shown in Table V -1, which stayed about the same for the Bristol Bay Red King Crab fishery and increased for the Bering Sea Snow Crab fishery. These work -years estimates should be considered highly approximate. The important point to be drawn from them is that rationalization did not lead to a significant decline in work years. Table V -1 "Best Guess" Estimates of Jobs and Work Years in Bering Sea Crab Fisheries, 2004/05 and 2005/06 *Assumed work days per job, and the estimates of work -years which are based on them, are as on lrnvte preliminary information and should be considered highly approximate. * *Estimated work -years are calculated based on the assumption that one work -year has 48 5 -day weeks. Source: Estimates derived in Tables IV -7 and IV -9. With much longer fishing seasons, most BSAI crab fishing jobs lasted much longer. In addition, there were other important changes in these jobs, particularly in how captains and crew were paid and what they earned. To understand these changes, it is important first to understand how crab fishermen were typically paid prior to rationalization. On most boats, captains and crew were paid a share of net eamings after deducting taxes and costs of fuel and bait. After calculating individual shares, costs of groceries were also deducted from what fishermen were paid. The specific details of how payments were calculated varied from boat to boat, with regard to what costs were deducted before calculating net earnings, and the shares paid to individual captains and crew. Typically, however, the total share paid to the "deck" (everyone working on the boat) was about 40%:—somewhat higher on some boats, and somewhat lower on others. 29 Figure V -1 shows where gross earnings went for two Kodiak vessels for the 2003 Bristol Bay Red King crab season, based on copies of the crew settlement sheets provided by the vessel owner. Note that on these boats the "deck" received about 40% of net earnings. After deducting costs of taxes, fuel and bait, the payment to the "deck" was about 34% of the gross earnings. $250,000 $200,000 $150,000 Net income was shared between the vessel owner and the crew. (The crew was charged for groceries.) $50,000 $0 Vessel A 2003 Figure V -1 Where Gross Earn'ngs Went for Two Kodiak Vessels in 2003 Taxes, fuel and bait were deducted from gross to calculate net income The "deck" was paid 39% of net income on VesselA and 41 %on Vessel B. Payment to the "deck" was divided between the captain and four crew members. Captains got about twice as much as an experienced crewman. 30 \ \\ \ \ \ \\ \ \\ \ \\ \ \ \ \ \\ \ \ \ \ Vessel B 2003 O Bait and groceries ® Fuel LS Taxes ❑ Payment to owner • Payments to crew An obvious but important point illustrated by this graph is that the fishermen on Vessel B earned only about half as much for their season as those on Vessel A— because they only caught about half as much. Put simply, not all crab fishing jobs are the same. Fishermen on some boats earn much more than fishermen on other boats. This makes it more difficult to summarize how fishermen's eamings have been affected by rationalization. Figure V -2 (on the next page) makes the same point in a different way. It shows average earnings in the BSAI crab fishery prior to rationalization, by quartile group. Boats in each of the four quartile groups had approximately equal total earnings. This means that the 37 boats in the top quartile group in 2004 had average earnings almost three time as high as the 105 boats in the bottom quartile group. 5500,000 $700,000 5600,000 5500,000 5400,000 5300.000 5200000 - 5100,000 - SO Average Earnings per Permit in the Bristol Bay Red King Crab Fishery, by Quartile 8 8 8 - a-First quartile --Second quartile -o- Third quartile -a -Fourth quartile Number of permit holders in 2004: First quartile: 37 Second quartile: 47 Third quartile: 62 Fourth quartile: 105 As a rough approximation, a "typical" crab fishing crewman might have been paid about 6% of a vessel's net earnings or about 5% of a vessel's gross earnings. Figure V -3 shows the implied average earnings for a "typical" crewman in each quartile group. Note that fishermen working on the boats in the top quartile group would have earned much more than those working on boats in the bottom quartile group. Figure V -2 Fi ure V -3 Approximate Average Earnings per Crewman in the Bristol Bay Red King Crab Fishery, Assuming that the Average Crewman was paid 5% of Gross Value, by Quartile 31 -6- First quartile boats --Second quartile boats - 0- Third quartile boats -n -Fourth quartile boats Number of boats in 2004: First quartile: 37 Second quartile: 47 Third quartile: 62 Fouts quartile: 105 Note also that fishermen's earnings in the BSAI crab fisheries prior to rationalization varied widely from year to year, depending upon catches and ex- vessel prices. In addition, fishermen's earnings were uncertain or "risky." Before the season, crab fishermen did not know how much money they were going to earn. If they boat caught a lot of crab, they might earn a lot. If the boat didn't catch a lot of crab, they might not earn much money at all. Reflecting this financial risk, as well as the physical difficulty and danger of the work, average earnings for BSAI crab fishermen were high for the few weeks of work, both compared to earnings in other fisheries as well as jobs on land. In the first season of rationalization, the share system remained in place on most crab vessels, but with one important change. Of those vessels which fished, many fished for not only their own quota, but also additional quota leased from other vessel owners. On most vessels the lease payments to other vessel owners were deducted from gross earnings before calculating share payments to captains and crew. In the Bristol Bay Red King Crab fishery, the typical quota lease rate was about 70% of ex- vessel value after taxes. In the Bering Sea Snow Crab fishery, the typical lease rate was about 50% of ex- vessel value after taxes. Deducting this large share of ex- vessel value before calculating share payments meant that captains and crew received a much smaller share of ex- vessel value for that portion of the vessel's catch for which the quota was leased. On most vessels there was no corresponding deduction for that part of the vessel's catch for which the quota was owned by the vessel owner. In effect, that meant that crew were paid differently for fishing quota owned by the vessel owner than for fishing leased quota. It also meant that their share of the total value of the boat's catch depended on the relative share of the catch for which the quota was leased. How much quota leasing occurred, why it occurred, and what determined quota lease rates are important and complicated issues that are all well beyond the scope of this preliminary analysis. In the remainder on this chapter, I discuss in greater detail the implications of fleet consolidation and quota leasing for crab fishermen's earnings. In considering the effects of rationalization for fishermen's earnings, it is useful to distinguish between boats in terms of the relative share of three kinds of quota in the boat's total catches. The greater the share of leased quota in the quota fished by the vessel, the greater the share of lease payments in the total value of the boat's catch, and the lower the share of value likely to be paid to fishermen. Type of quota A. Quota awarded for the boat's historical catches B. Other quota owned by the same vessel owner C. Quota leased by the vessel owner Implications for deductions before calculating fishermen's shares Imputed lease payment least likely to be deducted Imputed lease payment may be deducted Lease payment very likely to be deducted 14 Keep in mind, as pointed out in the first chapter, that there is wide variation within the crab fisheries. What was deducted before calculating crew payments varied between vessels. On some vessels owners may have deducted imputed lease costs for their own quota. No data are currently available which would make it possible to quantify the extent to which deductions for different kinds of quota were made before calculating crew payments. 32 If a boat fished only for quota awarded to the owner for the boat's historical catches, and the vessel owner didn't deduct an imputed lease payment, then there may have been relatively little change in the boat's costs or the compensation paid to crew. Some crab vessel owners own more than one boat. Rather than fish each vessel's quota separately, they used one boat to catch all of their own quota —but didn't lease any additional quota. This was done by the owner of the two Kodiak vessels for which the distribution of earnings in 2003 was shown above in Figure V -1. As shown in Figure V -4, in 2005 the vessel owner chose to have one boat fish for boat boats' quota. The owner chose to continue to pay the crew for that boat the same shares, calculated in the same way. As a result, the crew continued to receive approximately the same share of ex- vessel value. The only change in the crew's share resulted from changes in taxes and fuel costs, which are discussed in greater detail below. If the only fleet consolidation occurring with rationalization had been of this type, with no quota lease payments and deductions, the smaller number of crab fishermen would have continued to receive a similar share of the total ex- vessel value. $500,000 $450,000 - $400,000 - $350,000 - $300,000 - $250,000 - $200,000 - 5150,000 - $100,000 - 550,000 - $ 0 Figure V -4 Comparison of Bristol Bay Red King Crab Earnings and Payments for an Owner of Two Kodiak Crab Vessels: 2003 and 2005 Vessel A 2003 Vessel B 2003 33 Both boats' quota stacked on one boat 2005 B Bait and groceries ES Fuel El Taxes O Payment to owner • Payments to crew In 2005, there were only half as many crew jobs. The crew was still paid 41% of net income. They worked a longer season but they earned more. To examine the implications of quota leasing for crew earnings, I developed a simple "crab fishing model" of revenues and costs for a hypothetical crab boat. The model calculates the vessel's revenues, costs and payments with and without rationalization, and how revenues, costs and payments changes as the vessel leases more quota and catches more crab. I based the model's assumptions on estimates provided by the owner of a large crab vessel of the historical relationship between his vessel's total catch and costs of fuel, bait and groceries. Table V -2 summarizes the model's assumptions. Tables V -3 and V -4 (on the following pages) show how the model calculations work, referring to the rows in Table V -2. Table 1 Summary of Crab Fishing Model Assum ti I • • 34 wa a without rational- ization ,xamp t - izaiton es m tma With rational- ization a,napter Row Total quota for the fishery (pounds) 16,496, A Ex- vessel price ($/lb) $4.30 B Fuel price ($ gallon) $2.14 C Fuel gallons/day Fishing S00 D Running 1100 E Transit 1100 F Port 300 G Fuel cost/day (= fuel price x Fishing $1712 H Running $235q 1 Transit $2354 J Port $642 K Other costs/day Bait (per fishing day) $650 L Groceries (per day) $200 M Repair & Maintenance (per operating day) $1,000 N Other (per operating day) $300 Vessel's fixed costs $200,000 Total number of boats fishing for quota 251 Average boa catch/day for fleet 15,000 Days Running 2 2 Transit 4 4 In port 9 9 Vessel's catch per day (pounds) 20,000 20,000 Number of c ew working on vessel 8 Crew share of net earnings Total 41.0% Captain 15.0% r Crewman 6.0% Taxes Fisheries landings tax rate 2.0% 2.0% Buyback tax L9% , i.9 io Rationalization tax 1.5% Arbitration fee per pound $0.01 Ratio of vessel owner's quota share to owner's catch share without 1.00 Royalty charge for leased quota 70% Leased quota, expressed as % of TAC (varies) To examine the implications of quota leasing for crew earnings, I developed a simple "crab fishing model" of revenues and costs for a hypothetical crab boat. The model calculates the vessel's revenues, costs and payments with and without rationalization, and how revenues, costs and payments changes as the vessel leases more quota and catches more crab. I based the model's assumptions on estimates provided by the owner of a large crab vessel of the historical relationship between his vessel's total catch and costs of fuel, bait and groceries. Table V -2 summarizes the model's assumptions. Tables V -3 and V -4 (on the following pages) show how the model calculations work, referring to the rows in Table V -2. Table 1 Summary of Crab Fishing Model Assum ti I • • 34 Variable Value Formula Row* Total fleet catch per day (pounds) 3,765,000 Q * R a Fleet fishing day 4.4 A / a b Days Fishing 4.4 b c Running 2.0 S d Transit 4.0 T e Port 9.0 U f Operating days (Fishing, Running, & Transits 10.4 c + d + e g Total days (Fishing, Running, Transit & Port) 19.4 c + d + e + f h Vessel's catch per day (pounds) 20,000 V Vessel's total catch (pounds) 87,629 V * c Vessel's share of total catch 0.53% j / A k Vessel's gross revenue $376,803 j * B 1 Total tax rate 3.9% AA + AB m Total taxes $14,695 m * 1 n Vessel's fuel costs $27,403 C * [ D*c+E*d + F*e + G*f ] o Vessel's bait costs $2,848 L * c p Vessel's net earnings after taxes, fuel and bait costs $331,857 I - (n + o + p) q Crew payments Total $136,061 X * q r Captain $49,779 Y * q s Crewman $19,911 Z * q t Grocery costs Total grocery costs $3,876 M * h u Grocery costs per crew $485 u / W v Crew payments after grocery cost deduction Total $132,185 r - v w Captain $49,294 s - v x Crewman $19,427 t - v v Payment to vessel $195,796 q - w z Vessel costs Repair & maintenance $10,381 N * g as Other $3,114 O * g ab Fixed costs $300,000 P ac Total $313,496 as +ab +ac ad Vessel owner's p ofit - $117,700 _ z - ad ae Table V -3 shows the model's calculations for the vessel without rationalization: what its catch, gross revenues, and costs would have been, and what the resulting share payments to the crew and the vessel owner would have been. The model calculations are complicated. I have included the formulas for the benefit of those readers who may wish to work through the details of the calculations, but most readers may wish to skip over these. In brief, without rationalization, the vessel's catch and its costs are driven by the number of days that the fishery is open. The longer the fishery is open, the greater the vessel's gross and net earnings, the greater the corresponding share payments to the crew and the vessel owner, and the greater the chance that the payment to the vessel owner will be sufficient to cover the owner's fixed costs, so that the operation is profitable. Table V -3 Rationalization *Lower case letters refer to rows in the "calculations" tables; UPPER CASE letters refer to rows in the assumptions table. 35 Table V -4 shows the model's calculations for the vessel with rationalization, assuming that the vessel leases quota equal to 0.5% of the TAC. In brief, with rationalization, the vessel's catch and its costs are driven by the amount of quota that it fishes, and how much of that quota is leased. The more quota the vessel fishes, the greater the vessel's gross and net earnings, and the greater the corresponding share payments to the crew and the vessel owner —even though a large share of the value of leased quota goes to pay quota royalties. Table V-4 Crab Fishing Model Calculations for the Vessel With Rationalization, Assuming the Vessel Leases quota Equal to 0.5% of the TAC Value Variable Owner quota (share of TAC) Leased quota (share of TAC) Pounds harvested Owner quota Leased quota Total Vessel's catch per day (pounds) Days Fishing Running Transit Port Operating days (Fishing, Running, & ransit) otal days (Fishing, Running, Transit & Port) Ve,ssel's gross revenue otal tax rate Arbitration fee per pound otal taxes and fees O uota royalties Vessel's fuel costs Vessel's bait costs Vessel's net earnings after taxes, royalties, fi,el R. halt Crew payments Grocery costs rew payments after grocery cost deduction �Payment to vessel Vessel costs Vessel owner's profit Total Captain Crewman Total grocery costs Grocery costs per crew Total Captain Crewman Repair & Other Fixed costs Total 0.53% 0.50% 87,629 82,481 170,109 20,000 8.5 2.0 4.0 9.0 14.5 23.5 $731,469 5.4% $0.01 $41.200 $5.529 $402,011 $4,701 $8 $588 $4,701 $588 $160,123 $59,714 $23,533 $237,186 $14,505 $4,352 $300,000 $318,857 - $81,671 Formula Assumed to be equal to the vessel's catch share without rationalization Assumed af•A ag * A ah + ai V j S T U c +d + c +d +e +f i *B AA + AB + AC AD m * 1 +al *i ai * B * (1 - m) - ai * ai C * 1D *c +E•d +F *e +G *f1 L *c 1- (n +o +p +ak) X *q 5 ' * q Z * q M *h u/W r -v s - v t - v q - w N *g n *.. F as +ab +ac Row* of ag ah ai c d e f g h 1 m n $248,266 $34,463 ak 0 0 q r s t u v x v z as ab ac ad ae 1 *Lower case letters refer to rows in the "calculations" tables; UPPER CASE letters refer to rows in the assumptions table. 36 The vessel catches, revenues, costs and payments calculated by the crab fishing model are not necessarily representative for vessels in the BSAI crab fisheries. They are more likely to be representative for large vessels. However, the general nature of the effects of rationalization on payments illustrated by the model is likely to be similar for vessels of all sizes. Figure V -5 shows the model calculations for how the vessel's revenues and payments change as it leases progressively greater amounts of quota. Note that the model assumes that the vessel owner's own quota is equal to what he would have caught in a derby fishery before rationalization. Although this is probably not the case for most vessel owners, it allows the model to focus specifically on the effects of quota leasing. The model also assumes that the vessel owner pays crew in the same way as before rationalization for fishing his own quota. (This was not necessarily the case for all boats). If the vessel doesn't lease any quota, its costs and payments are almost the same as in the non - rationalized ( "derby ") fishery. The only difference is that its taxes are higher, because of the new rationalization tax (1.5% of ex- vessel value) and the arbitration fee of $0.01/lb. The more quota share the vessel leases -- expressed as a share of the TAC —the more crab it catches and the higher its total revenues. Quota royalties increase because 70% of the revenues from leased quota go to pay for royalties. Payments to crew and the vessel owner also increase, but by much smaller amounts. $2,000,000 $1,800,000 - $1,600,000 - $1,400,000 - $1,200,000 $1,000,000 $800,000 - $600,000 - $400,000 - $200,000 $0 Distribution of Total Vessel Revenues for Different Levels of Quota Leasing: Bristol Bay Red King Crab Fishery Calculations shown in Table V-3 1 Calculations shown in Table V -4 1 1 Figure V -5 Derby IFQ IFQ IFQ IFQ IFQ Lease 0% Lease 0.5% Lease 1.0% Lease 1.5% Lease 2.0% Quota Share Leased by the Vessel, Expressed as % of TAC 37 ▪ Quota royalties ® Fuel, bait & groceries ® Taxes and fees ❑ Payment to owner • Payments to crew Key Assumptions: Quota lease rate = 70% Crew share of net value = 41% Figure V -6 shows how the percentage shares of different kinds of payments in the vessel's total revenue change as the volume of quota leased increases. As the vessel leases more quota, the share of quota royalties in total revenues increases, and the shares of payments to crew and payments to vessel owners decline. If the vessel leases no quota, the total crew share is 34% of ex- vessel value. If the vessel leases quota equal to 1% of the TAC, the total crew share falls to 18% of ex- vessel value. Figure V -6 Percentage Distribution of Total Vessel Revenues for Different Levels of Quota Leasing: Bristol Bay Red King Crab Fishery Derby IFQ IFQ IFQ IFQ IFQ Lease O% C=ase0 % Lease 1.0% Lease l.5% Lease2.0% Quota Share Leased by the Vessel, Expressed as % of TAC o Quota royalties ® Fuel, bait & groceries 0 Taxes and fees ❑ Payment to owner • Payments to crew Key Assumptions: Quota lease rate = 70% Crew share of net value = 41% Figures V -7 through V -12 (on the following two pages) illustrate other projections of the model for how payments in the fishery change as the volume of quota leased by the vessel increases. 38 As a vessel leases and fishes more quota, a crewman's total earnings increase. (Table V -7) As the vessel leases and fishes more quota, the total days worked by a crewman also increase (Figure V -8). Under the assumptions of this model, as a vessel leases and fishes more quota, a crewman's earnings increase by about the same relative amount as the number of days worked —so that his earnings per day worked remain about the same (Figure V -9). If we made different assumptions about the number of days spent working in port and in transit, earnings per day worked could increase or decrease. Figure V -7 540,000 535,000 530,000 525,000 520,000 515,000 $10,000 $5,000 40 35 30 25 20 15 10 5 0 So Figure V-8 Figure V -9 51,200 51,000 - 5800 - 5600 - 5400 - $200 SO Derby Total Earnings of a Crewman who Receives a 67 Net Share (Bristol Bay Red King Crab Fishery) Key Assumptions Quota lease rate = 70% [Crew share of net value = 41% Derby 39 IFQ IFQ IFQ IFQ Lease 0% Lease05% Lease 10% Leasel.5% Quota Share Leased (percentage of TAC) Number of Days a Crewman Works (Bristol Bay Red King Crab Fishery) IFQ IFQ IFQ IFQ Lease 0% Lease 0.5% Lease 10/ Lease 1.5% Quota Share Leased (percentage of TAC) Earnings per Day Worked of a Crewman who Receives a 6a Net Share (Bristol Bay Red King Crab Fishery) IFQ Lease 20% Key Assumptions Quota lease sate — 70% C rew share of net value =41 % IFQ Lease 2.0% Key Assumptions: Quota lease rate = 70% c rew share of net value — 41% Derby IFQ IFQ IFQ IFQ IFQ Lease 0'/ Lease 05% Lease I.0% Lease 1.5% Lease 2.0% Quota Share Leased (percentage of TAC) If all boats which fished owned and leased identical amounts of quota, then the more each individual boat leases, the smaller the fleet and the fewer the total jobs in the fishery (Figure V -10). The number of boats and jobs projected by the model would be roughly similar to what occurred in the 2005/05 fishery at an average quota lease share between 0.5% and 1.O% of TAC. If all boats which fished owned and leased identical amounts of quota, then the more each individual boat leases, the greater the share of the total quota which would be leased, the smaller the share of total value of the fishery which would be paid to crew, and the smaller total crew earnings (Figure V -11) As the vessel owner leases more quota, the payments to the vessel owner (net of royalties, taxes, fuel and bait and grocery costs, and payments to crew) increase at a faster rate than the vessel owner's costs. As a result, the vessel owner's profits increase (Figure V- 12). In this example the vessel owner loses money if he doesn't lease quota. It is only by leasing at least some quota that he is able to make a profit Note that the estimated profit is highly sensitive to what we assume about the vessel owner's fixed costs. Figure V -10 Boats 200 180 160 140 120 100 80 60 40 20 0 Figure V -11 Total Crew Earnings for Fishery if All Boats Lease Identical Quota Shares (Bristol Bay Red King Crab Fishery) 530,000,000 525,000,000 520,000,000 515,000,000 $10,000,000 55,000,000 Figure V -12 150,000 100,000 Key Assumptions' Quota lease rate = 70% Crew share of net value = 41% 0 Number of Boats and Jobs If All Boats Lease Identical Quota Shares (Bristol Bay Red King Crab Fishery) Derby so Derby Key Assumptions: Quota lease rate — 70% ,Crew share of net value= 41.1 Nose: Vessel owner's costs and Imps are highlysensinve m whar is h assumed about cos. 300,000 t 250,000 1- 200,000 1- 40 IFQ IFQ IFQ IFQ Lease 0% Lease 05% Lease 10% Lease 1.5% Quota Share Leased (percentage of TAC) IFQ IFQ IFQ IFQ Lease 0% Lease 05% Lease 10% Lease 15% Quota Share Leased (percentage of TAC) Vessel Owner's Earnings, Cosh and Profit for Different Levels of Quota Leasing 400,000 _ (Bristol Bay Red King Crab Fishery) Derby e' IFQ IFQ IFQ IFQ -50, 000 - -- Lease - 0%-- Lwseo.S % Lease- 0%- {,ease 5%. Lease20% Q ota Share Leased (Paten age of TAC) IFQ Lease 2.0% IFQ Lease 2.0% • Total payment to vessel O Vessel owner costs (excl. deducted costs) Jobs 1,600 L400 1,200 1,000 800 600 400 200 0 As noted above (discussion of Figure V -10) the total number of boats and jobs projected by the crab fishing model would be roughly similar to the actual total number of boats and jobs in the 2005/06 Bristol Bay Red King Crab fishery at an average quota lease share between 0.5% and 1.0% of TAC. We may use the crab fishing model's projections of the distribution of revenue in the fishery for these two average quota lease shares to derive a rough estimate of how rationalization may have affected total payments to captains and crew in the 2005/06 Bristol Bay Red King Crab fishery. Table V -5 shows the model's projections for the percentage distribution of ex- vessel value for these two average quota lease shares, and the corresponding projected payments from the 2005/06 Bristol Bay Red King Crab fishery ex- vessel value of $70.9 million. At an average quota lease share of 0.5% of TAC, total payments to captains and crew would have declined from $24 9 million (without rationalization) to $15.5 million (with rationalization). At an average quota lease share of 1.0% of TAC, total payments to captains and crew would have declined from $24.9 million (without rationalization) to $12.5 million (with rationalization). Table V -5 Model Projections of the Distribution of Bristol Bay Red King Crab Revenues With and Without Rationalization, Under Alternative Assumptions About the Average Quota Lease per Vessel 41 Payment to Share of Ex- Vessel Value Payments (5 millons) % change in payments Without rational- ization With rational- ization Without rational- ization With rational- ization Change Assuming average quota lease share of 0.5% of TAC Total Ex- Vessel Value 100.0% 100.0% 70.9 70.9 0.0 0% Taxes & fees 3.9% 5.6% 2.8 4.0 1.2 44% Quota Share Holders 33.9% 24.1 24.1 Costs (Fuel, Bait & Groc.) 9.1% 6.1% 6.4 4.3 -2.1 -33% Vessel Owners 52.0% 32.4% 36.9 23.0 -13.9 -38% Captains and Crew 35.1% 21.9% 24.9 15.5 -9.4 -38% Assuming average quota lease share of 1.0"/ of TAC Total Ex- Vessel Value 100.0% 100.0% 70.9 70.9 0.0 0% Taxes & fees 3.9% 5.6% 2.8 4.0 1.2 44% Quota Share Holders 45.7% 32.4 32.4 Costs (Fuel, Bait & Groc.) 9.1% 5.1% 6.4 3.6 -2.8 -44% Vessel Owners 52.0% 26.0% 36.9 18.4 -18.4 -50% Captains and Crew 35.1% 17.6% 24.9 12.5 -12.4 -50% As noted above (discussion of Figure V -10) the total number of boats and jobs projected by the crab fishing model would be roughly similar to the actual total number of boats and jobs in the 2005/06 Bristol Bay Red King Crab fishery at an average quota lease share between 0.5% and 1.0% of TAC. We may use the crab fishing model's projections of the distribution of revenue in the fishery for these two average quota lease shares to derive a rough estimate of how rationalization may have affected total payments to captains and crew in the 2005/06 Bristol Bay Red King Crab fishery. Table V -5 shows the model's projections for the percentage distribution of ex- vessel value for these two average quota lease shares, and the corresponding projected payments from the 2005/06 Bristol Bay Red King Crab fishery ex- vessel value of $70.9 million. At an average quota lease share of 0.5% of TAC, total payments to captains and crew would have declined from $24 9 million (without rationalization) to $15.5 million (with rationalization). At an average quota lease share of 1.0% of TAC, total payments to captains and crew would have declined from $24.9 million (without rationalization) to $12.5 million (with rationalization). Table V -5 Model Projections of the Distribution of Bristol Bay Red King Crab Revenues With and Without Rationalization, Under Alternative Assumptions About the Average Quota Lease per Vessel 41 Table V -6 shows projected payments to Kodiak and non - Kodiak residents, assuming that payments were distributed in proportion to the number of jobs. At an average quota lease share of 0.5% of TAC, total payments to Kodiak captains and crew would have declined from $3.9 million (without rationalization) to $2.8 million (with rationalization) -a decline in total Kodiak crab fishing earnings of about $1.0 million. At an average quota lease share of 1.0% of TAC, total payments to captains and crew would have declined from $3.9 million (without rationalization) to $2.3 million (with rationalization)--a decline in total Kodiak crab fishing earnings of about $1.6 million. Table V -6 Estimated Effects of Rationalization on Earning: of Captains and Crew in the Bristol Bay Red King Crab Fishery, Under Different Assumptions About Average Quota Lease Share Estimated number ofjobs (from Table V -1) Total payments to captains and crew ($ millions) Assumed average quota lease share of 0.5% of TAC Assumed average quota lease share of 1.0% of TAC Kodiak Residents Non - Kodiak Residents Total Kodiak Residents Non- Kodiak Residents Total Kodiak Residents Non - Kodiak Residents Total 2004/05 215 1166 1381 3.9 21.0 24.9 3.9 21.0 24.9 2005/06 89 400 490 2.8 12.7 15.5 2.3 10.2 12.5 Change -125 -766 -891 - 1.0 -8.3 -9.4 -1.6 -10.8 -12.4 Note: Estimates approximate. are based on crab fishing model assumptions and should be considered only These estimates suggest an approximate range for the effects of crab rationalization on crab fishing earnings of Kodiak residents in the 2005/06 Bristol Bay Red King Crab fishery As discussed at the beginning of this chapter, the total number of hours worked by Kodiak residents in this fishery probably stayed about the same, with a smaller number of fishermen working longer seasons. However, because the share of vessel earnings paid to fishermen declined, rationalization may have reduced the total earnings of Kodiak residents working in the fishery by between $1.0 million and $1.6 million. As I discussed at the beginning of this report, the 2005/06 crab fishing season is not necessarily representative of how the BSAI crab fisheries may change over time with rationalization. Over time, it is likely that quota lease rates, the extent of quota leasing, and how crab fishermen are paid will change. Economic theory suggests that what crab fishing crews are paid is driven by labor market forces of supply and demand. For a given set of working conditions, the payment for a crab fishing season will tend towards the level at which the number of fishermen vessels owners want to hire (demand) is equal to the number of fishermen willing to work (supply). The dramatic consolidation of the crab fishing fleet in the first year of rationalization greatly reduced the demand for crab fishermen without any corresponding reduction in supply. Under these conditions, it is not surprising that the total payment to 15 A number of vessel owners have told me that the 70% royalty share paid to lease Bristol Bay Red King Crab quota this year was too high to be profitable, and that they expect the royalty share to be lower in the future. 42 crab fishermen for a similar amount of total crab fishing work would decline. With hundreds of crab fishermen out of crab fishing jobs, it is not surprising that vessel owners would be able to find crew willing to work for lower average earnings (per day worked or crab pot pulled) than in earlier seasons. But this situation is not necessarily permanent. As former crab fishermen find other jobs, fewer will be looking for crab jobs, and this may put upward pressure on average crew shares or daily earnings. Crab fishing has become a different kind of job than it was prior to rationalization. With vessels fishing for known quota volumes, crew can be more certain about how much money they will earn for a season than they could before rationalization. Economic theory suggests that with lower financial risk, people may be willing to work for lower total pay if there is less financial risk about how much they will be paid. With vessels fishing for known quota volumes, it is less important to catch crab fast. That may tend to reduce what vessel owners are willing to pay for highly skilled crab fishermen. Crab fishing seasons are longer — meaning that crew can earn more total income, but also have to give up more alternative work opportunities to go crab fishing. Over time, all of these factors and others may affect what crab fishermen are paid for what have become fewer and different jobs than they were prior to rationalization. 43 Significance of effect Type of Business Examples What the Effects of Rationalization Depend on Most affected Businesses which sell to fishing boats, and for which sales depend on the number of boats fishing Pot storage and loading Weldin g Marine supplies Change in number of crab boats fishing Crab boats as % of total sales Businesses which sell to fishing crews Fishing clothing Fisherman bars Change in number of crab fishermen working Crab fishermen as % of total sales Somewhat affected Businesses which sell to local residents Grocery stores Restaurants Auto dealers Change in crab fishing income Crab fishing % of total resident income Least affected Businesses which sell to fishing boats, and for which sales depend on the number of days fished Fuel sales Bait sales Change in total crab fishing days Crab boats as % of total sales Businesses which don't sell to fishing boats or local residents Tourism businesses No change VI. EFFECTS OF RATIONALIZATION ON KODIAK BUSINESSES Kodiak is a fishing community. Many Kodiak businesses provide a wide variety of supplies and services to fishing vessels. Many Kodiak residents are fishermen. Thus a major change to the fishing industry has the potential to significantly affect Kodiak businesses by affecting purchases by fishing vessels and fishermen. As shown in Table VI -1, we would expect crab rationalization to affect different kinds of businesses in different ways. Those most likely to be affected are those that derive a large share of their business from sales to crab boats and crab fishermen, and for which those sales depend on how many boats and fishermen are fishing, such as pot storage and welding businesses. Table VI -1 How Different Types of Busi Businesses which store crab pots are directly affected by how many pots are fished. The number ofpots registered in the 2005 Bristol Bay Red King Crab tshery fell by 68%. 44 Some crab fleet purchases —such as fuel, bait and groceries — depend more on the total days spent fishing than on the number of boats fishing or fishermen working. For example, if one -third as many fishermen work for three times as many days, they will still need about the same amount of groceries. However, rationalization may have caused some of these sales to shift from Kodiak communities closer to the fishing grounds, such as Dutch Harbor, to the extent that boats buy more fuel, bait and groceries when they deliver crab, rather than buying supplies for their entire season in Kodiak. A number of Kodiak business owners have told me about specific ways in which their sales were harmed by crab rationalization. Below are examples: "I own a life raft inspection station, so I sell and service life rafts, EPIRBS and other marine safety equipment. Of course I do business with most all the fisheries. The mainstay of my business is life raft servicing, so if a boat doesn't go fishing I don't get to service their rafts. Additionally, depending on the way the boat operates the crew sometimes buy safety gear for themselves if the boat doesn't (i.e., survival suit personal lights or personal EPIRBS). I can't nail down specific numbers as far as percentages of loss until last year taxes are filed ... However, when halibut was turned into an IFQ based fishery I lost over 30% of my business due to high attrition in the fishing fleet. While I hope the crab impact is not so severe it will still loom large." "We own a boat yard in Kodiak. Previous to this year we had 5 boats that came up to store in the yard for a couple of months before crab season until a month after the season because their owners or operators also fished other fisheries with those boats and ran a crabber for the crab season. This year we had none... There is no other reason for boats to come out of the water and store at that time of year. What did not occur as it has in the past 23 years is the cross -over owners with smaller boats that also fish crab did not fish this year because of Crab Ratz, so there was no need to store the smaller boat out of the water." "We have several rental units ... One of renters was a crab fisherman and he moved back to Seattle as his skipper told him in September that the boat would no longer fish and he no longer had a job as skipper. So I was out a renter at $950 per month for the last 5 months for a total of $4750." "I spoke with [operator of a bunkhouse] this morning and he told me that he usually had the same 3 or 4 guys rent from him each year for a couple of months before crab when they mended pots and got gear on board the boats and then again when they cleaned gear and stacked pots for a month. This year none of them showed up or called. Four guys at $300 each per month for 3 months equals $3600 for those rooms." 45 Accounts like these suggest that the effects of crab rationalization are real and important for some Kodiak businesses. However, they don't provide a basis for estimating how significant the total effects may be. Some of the Man Kodiak Businesses Which Supply and Service the Fishing Industry 46 One indicator of the potential general magnitude of the change in vessel expenditures due to rationalization is this list, provided to me by a Kodiak crab vessel owner, of separate purchases made from Kodiak businesses in preparing the vessel for the 2005 Bristol Bay King Crab season: Alaska Hydraulics $ 925.91 Alaska Hydraulics $ 20.24 Are & Spark Welding $ 1,406.85 Breakwater Plumbing $ 69.61 Crescent Electric $ 505.88 Crescent Electric $ 386.37 Island Hydraulics $ 3,726.82 NAPA Parts Supply $ 170.32 Kodiak Marine Supply $ 2,909.01 Kodiak Metals $ 767.00 Kodiak Service $ 547.69 Radar Alaska $ 100.70 AIMS (Industrial Marine) $ 143.06 Sutliff s True Value Hardware $ 3,067.24 Nets Pacific $ 1,776.71 Petro Marine $ 374.37 Total Supplies & Related $ 16,897.78 Extrapolating very roughly, if every vessel had spent this amount, then the 54 "Kodiak Boats" which fished the Bristol Bay Red King season in 2004/05 would have spent $912,000, and the 23 "Kodiak Boats which fished the Bristol Bay Red King Crab season in 2005/06 would have spent $389,000. The decline (not all of which would be attributable to rationalization) would be about $523,000, or about half a million dollars. Note that this estimate does not include expenditures made by fishing crew (as opposed to the vessel). As another potential indicator of the effects of crab rationalization on Kodiak businesses, I looked at business sales data collected by the City of Kodiak each quarter for the purpose of calculating sales tax obligations. The sales data are confidential for individual businesses, but the City can release combined data for a group of businesses. I asked the City to calculate total sales by quarter for twelve Kodiak businesses that supply or service the crab fleet, shown in Table VI -2 on the following page. These twelve companies are not (by any means!) the only businesses that supply or service the crab fleet, or necessarily the largest. However, they were regularly mentioned by crab vessel owners that I talked to, and their sales may be representative of trends for these types of businesses. 47 Quarter Year % change from previous year 2004 2005 2006 2005 2006 1st quarter 2,367 2,657 2,951 11% 10% 2nd quarter 3,004 3,650 NA 18% NA 3rd quarter 2,590 3,086 NA l6% NA 4th quarter 2,128 2,480 NA 14% NA Change F Fourth Quarter 2005 F First Quarter 2006 Decrease 3 3 4 4 Big decrease 1 1 2 2 Increase 9 9 7 7 Big increase " "several " 6 6 ource: ity o on. a es ax et nirian p Table VI -2 Twelve Kodiak Marine Supply and Service Businesses Alaska Hydraulics, Inc Alaska Industrial and Marine Services Arc N Spark Welding Island Hydraulics Kodiak Marine Supply Kodiak Metals & Supply Inc Kodiak Ocean Safety Services Kodiak Service Company Kodiak Welding & Supply Nets Pacific Radar- Alaska Marine Electronic Sutliffs Hardware Inc Table VI -3 shows combined quarterly sales data for these twelve businesses. We would expect to see effects of crab rationalization in sales for the fourth quarter (October - December) of 2005 and the first quarter (January- March) of 2006, compared with previous -year sales for the same quarters. Total sales for these twelve businesses increased by 14% in the fourth quarter of 2005 and by 10% in the first quarter of 2006. Total Sales of Twelve Kodiak Marine Supply and Services Bus• O. Ctty of Kodak Sales Tax ice Table VI -3 Sales trends are not the same for all of these businesses. According to the city sales tax technician, compared with the previous year, during the fourth quarter of 2005, sales were down for three businesses, and one business reported a big decrease in sales. During the first quarter of 2006, sales were down for four businesses, and two businesses reported a big decrease in sales. Table VI - Change in Sales Compared with the Previous Year for Twelve Kodiak Marine - �•••r•�•about Supply and Service Companies com s y' sales presumably _ably fn�wmca . m _ m �� e same the first quarter of 2006. In contrast, the majority of these businesses are doing well. During the fourth quarter of 2005, sales were up for nine businesses, and "several" business reported a big increase in sales. During the first quarter of 2006, sales were up for seven businesses and six businesses reported a big increase in sales. 48 From this limited evidence, it is difficult to find any clear evidence of any major effect of crab rationalization on Kodiak marine supply and service businesses in general. Some marine supply and service businesses have experienced declining sales since rationalization began. However, as a group these twelve businesses have not experienced any dramatic or obvious decline in sales, and the majority have experienced growth in sales. This does not, of course, mean that they weren't affected by rationalization or didn't experience a loss in sales to the crab fleet and crab fishermen. It does suggest that —for most of these particular businesses —the effects of crab rationalization have been outweighed by other factors affecting their sales. Tables VI -5, VI -6 and VI -7 (on the following three pages) are based on total reported quarterly sales of Kodiak businesses since 2002 for the 27 "business types" for which the City regularly compiles quarterly sales information. Table VI -5 shows total reported sale. Table VI -6 shows the percentage change in sales compared to the corresponding quarter of the previous year. Table VI -7 compares the average of fourth- and - first - quarter sales for 2004/05 and 2005/06. These data also do not provide any conclusive evidence about the effects of crab rationalization on Kodiak businesses. Sales for some business types were down in the fourth quarter of 2005 and the first quarter of 2006, while sales for other business types were up. There is no obvious relationship between rationalization and the types of businesses for which sales were up or down. For several of the business types for which sales were down, including taxi cabs, communications, rentals /leases, personal services, business services, health services and legal services, sales had been declining before the fourth quarter of 2005 -- suggesting that other factors were driving the decline. The business type which experienced the largest absolute reported decline for the combined fourth and first quarters was "contractors." However, according to the City sales tax technician, these data may not be reliable since contractors as a group tend to turn in their reports late. 49 tn odo O h Z60 E £06' Ill COS OSI 18LS'1 I tl I N, 1L1ob "9 I ILb9 1 < V O N In S en - M 00 N 00 V N 1` C - 1961 1 1 86! 6I_7� JO Q V' - - N 11---,, •--. N In 00 M ON t K. a - ten r AI I E9Z'£ £6L`L • 8IE £9S 191 1Z1£'I 1 1£80'1 1 1 1 11917 1 s 00 h M T l� N lin M D en N K O 1£11 IBLI IZE 1 68 r- • O\ T 00 - el N S�9 294 1,495 75,882 SOOZ 111 • . Z98'S 1'178`8 P06 OOL 161 £61'1 1 181'1 1 IZZ6'S 1945 In 00 DD 0 r N N O oo 00 N 1 o M N v In \C - 1661 1681 10 1101 T tel - 1 ` O .- r b - ON N ■ 1101 - 86£` 101 ZZO`Z Z81 r L11`00! 11 I 9L9'S I 959`8 l 09Z 8171 P91 0£1'1 1 10 1 1901`5 1 1605 1 co N M M v O\ - b a N N V N e. - - 1561 1181 I0- 1Z8 T V V - O .- V t` N . 19Z1 427 2,087 82,418 81,308 11 • _ s12`£ OLL`L L£ £LZ S 761` I I 011'1 I ISL6`S 1ZS£ N N .-• N M In 1 - -N - 00 00 00 V 00 W h 1£81 1 1001 1 IE 1 18E 1 00 T O N 00 O V .-. 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N t� N J£0l 287 1,831 78,729 77,638 17001 T n 95£'E £84'L 88 I OLS 181 1Z1`I 1'£Z` I l 'PlL'S I 109E I M n t t _. \O N CO - N N 00 IS8! 1 Isz u 161 1 a 1 - - •Pt - !` N JlZI - 275 1,232 64,098 _ 798`19 • AI 1 610`E ££6 18 961 191 WI 19L1`I 1 I 1 to 11' O N \O \c N V \D 00 -- \O 00 M N O v) M N - M 00 1881 1581 Io 1617 N W - R - 00 00 1178 243 1,298 69,902 • 9ZL`89 £OO1 I1I 5££`8 £179 b17L 101 1 090`1 030 1 0 8£`5 1617 1 t� \O 00 00 NNN- N O\ O N r O\ V v) N • to ttoz loot Jo J79 n1 Cr, J O a 00 N Cl I` .-. 00 In — J£8 015'58 199'1 SZ£ 84,208 £OO1 I� • - 8,044 5,421 99 61£ 851 6Z1`I 191`1 66`17 1 9117 1 In M - M 'O \O a0 T O\ O N O \O M N- 00 \O O 1801 £8l Its l . V 00 \O r .- ]911 - _ 9P9';8 989`1 1781 _ 84,484 £001 • T7 E `£ 9SL`L 61' I 819 SS' : 1 27171 811'1 L69`S 961 In to M N W - — - - — C M N CO \O £LI L9l r! LI Ot • 00 on 1- M - — on .-. L£ L01'19 LOL I£Z 59,889 • 2001 Al I 81'9`£ OWL OLI Z1£ P81 1 111`1 78Z`S Z9£ r - N M r — M M N 00 V N \D r SOZ SSI Io — 68 \ ) r \p - - N O0! 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City Utilitiesil sn,irrp• ri..,narr..a:,t, tn odo O h 900Z 1%SI' 1 rob °Aobl 1 84 %I % %ZZ VN %L %b8 %8' /? /00 /00 /o6Z %L Ao1 %8Z %8 %£ °A°98 %1 I /001 /oZv /061 /09l VN %I SOOZ 1 AI 1 %8Z- %9 %LZ %ZI %£$Z %b£ /001 /°b /00l I%Ls %Z' %L % 1' °i°8 %£1 Fr %9l I 187 %I °io t %I 1 F71 l %b' % 9£' %Ib /oZ SOOZ III 1 %£' °rub %I 1' °ro7' %8P %b %LV 1 %b %t I %IZ %0£ %L %b 1%L- 1 %11 1 %S 1 %7l I %SE 1 %bZ % 6 1 %11- 1 %Z1- 1 %8' %9' %L l 1 %01 1 %0 1 SOOZ Q I %1 1 %SZ %91 %SZ % £ %Z %Z %Z %1 %Z 54 %1 1 %61 1 %1' %I I %L °A° 1' %ZZ 1 %6b 1 %bl Ivor 1 500Z !°robs 1 1 %b 1 1 %r- 1 1°!°b- 1 I % 1 °lose %Z' %b 1 %Z- J I %LZ 1 1 %Z- 1 1 % £ %£ %I' %I1 I %SOT 1 1 %6 1 FIZT1 % S %1 %8Z 1 %81 ___J 1 %OZ 1 1 %sT 1 %9I b00Z 1 Al 1 %9Z I %L- 1 I%681 /oLZ /0 1 1' %O 1 %SZ- 1 %1Z 1 %1 1 %O I %£ 1%£ 1 %8_ pr 1 %18 1 %s 1 %1 J 1 %6_ I %6 1 %60Z pro9z 1%b0I pio£1 1 %z1 1 Vol I b00Z 1 1II 1 %L1- 1 %Z I %S1 1 %0 1 %51 I %SE 1 %s£ 1 %9- 1 %6 1 %8- 1 %ZZ 1 1 %Z 1 %Z 1 %O 1 1 %Z- 1 %9- 1 %O1 %LI %6l 1 1 %8 1%9 I 1 %b 1 %L8 1 %E£ 1 %79 %7 1 1 %8 %8 b00Z 1 II 1%5E- 1%t 1 %9 1 - I %bZ 1%1 I %60£ 1 %81 1 %9 1 %Z 1 %£1 ' 1 %8- I 1 %9 1 1%t- 1%g I %b- 1 %8 1 %9Z I %L- %61 1 %8 1 %6 % 1 %0I l 1 %8l %I %6 1 %8' b00Z 1 %91 1 %b 1 %L 1 %SI 1 %8 I %08 1 I %8 1 1 %1 1 1 %o 1 °% ZZ %9 I %ls I %s %6 I %L %b£ I %8 1 1 %b1 %ES %8 %61 %IZI 1 232% %61 1 %tL I %S %S £00Z 1 AI 10 /o8£ 1%01 p/oL1- prozl- I%s- 1 %1- Kg I %E I 1 %b 1%9 pros pro£ 1%0l hot- 1%61 _.... 1%5V 1%z 1 I %b pros _ p/oZZ- I -27 %1 S91 1 %6- 1 I%s 1 has 1 /oS £0OZ 1 III 1 %ZZ 1 %Z 1 %1 £ 1 %O 1 %LZ rhos 1 %9 1%s 1 %0 1 %Z 1 %Z 1 1 %8 1 %OI 1 I %L 1 1 %0t 1 %01 1 %9Z 1 %£6Z 1 1%8 1 1 %£ 1 1 %6 1 1 %9- 1 I %8- 1 1 %9 Z- 1 1 %8- 1 % 1 1 %8 1 %8 £OOZ 1 II I %Zbl 1 %0 1 %£ I 1%L. 1- 1 %11- 1 %s£- 1 %6 I %1' 1 %O 1 %01 1 %8 1 %1 I %£ 1 1 %1 1 %91 I %EI I %IE 1 %8 1 %b 1 %91 1 %Z %6 %6 %IZ %IZ %Z9 1 %9I I %L[ £0oZ 1 I %IOl 1 I %L 1 1 %L£ 1 1 %z l- 1 1 %8I I 1 -18 %1 1 %1 1 1 %E- 1 1 %9 1 1 %6£ 1 1 %9 1 Iva. 1 %EZ- 1 1 %o 1 1 %£b 1 I %b 1 1 %9E 1 I %L- 1 1 %b- 1 I %L- 1 1 %b 1 I °A °l £ 1 %9 1 %89- 1 % 0Z- %9 1 % I I 1 %Z 1 Business Type Contractors 1 saints &moll L sauauueD1 !— sgED prey iogrel wog 401 srapegj 1eo (Communications sam0n L1!D1 I_ sam19111 !Beverage Distributors 1_ saws «elaxl (Restaurants L swots ionbgys.inu1 !_ s s ea 7 1— uvu/slaloYwslaloHl !Beauticians !Personal Services 1 — 8utspranpV! ) lArtists/Photographer : l ) L saai,ua8 ssauisnul !Vehicle Repairs suo animas! !General Repair Services !Amusements 1 1 saawas 41IEaH1 !Legal Services s !Miscellaneous Service Total !Total, excl. City Utilities • id CI Z. I in O Ill O CO al ea AI 7 Business Type Average sales, 4th & 1st quarters ($000) 2004/05 2005/06 Change % Change* Contractors 9,965 7,655 -4,620 -23% Retail Sales 32,232 30,524 -3,417 - 5% Rentals/Leases 2,459 2,364 -192 -4% Restaurants 1,782 1,692 -180 - 5% Legal Sery ices 410 339 -141 -17% Health Services 97 60 -75 -38% Vehicle Repairs 993 958 -69 -3% Taxi Cabs 179 156 -46 -13% Business Services 1,179 1,156 -46 -2% Amusements 272 252 -39 -7% Personal Services 205 188 -35 -9% Bars/Liquor Stores 2,283 2,268 -30 -1% Artists/Photographers 63 69 11 9% Advertising 7 16 18 124% Beauticians 193 204 24 6% Communications 1,380 1,445 131 5% Boat Charters 138 214 153 56% General Repair Services 1,580 1,708 258 8% Miscellaneous Services 1,473 1,602 259 9% Hotels/Motels/B&B 823 992 338 21% Beverage Distributors 323 554 463 72% Canneries 2,902 3,177 550 9% Grocery Stores 7,556 7,848 584 4% City Boat Harbor 216 533 633 146% Service Stations 862 1,268 813 47% Utilities 5,494 5,954 921 8% City Utilities 1,126 NA NA NA Total 76,190 NA NA NA Total, excl. City Utilities 76 73 -4,706 -3% The only business types for which sales declined in the fourth and first quarters of 2005/06 but not for the third quarter of 2005 were retail sales, restaurants, and bars /liquor stores. The decline in retail sales of 5% is important because it represent by far the largest component of total sales. We may speculate that the decline for these three sectors may have been due to reduced spending by crab boats which didn't fish and crab fishermen who lost jobs and income. But without a much more detailed examination of the Kodiak economy and all the other factors which may have affected sales, we can't know how important a factor crab rationalization was or wasn't. Table IV -7 Comparison of Average Fourth and First Quarter Sales, 2 source: �tty or 1Coatax, Sates Tax U ice • business types for which sales decline in the fourth and first quarters of 2005/06 but not for the hird quarter of 2005 are shown in bold. More generally Kodiak has a relatively large and diversified economy that i based _ o „ . .. _.. _ .�. „ ... .. .� . b .. ... ua. vawu�.0 �.eviaviu t y uaaa is based on many different fisheries, a large fish processing industry, a large Coast Guard base, a rocket launch facility, and state spending (including Permanent Fund dividends). This diversity tends to reduce the relative economic impact of changes in any one fishery, and makes it difficult to measure these impacts using aggregate economic data such as City sales data. 52 GULF OF ALASKA (GOA) GROUNDFISH TASK FORCE Progress Report to the Kodiak Island Borough Assembly and City of Kodiak Council May 30, 2006 The GOA Groundfish Task Force was appointed by the City of Kodiak and the Kodiak Island Borough in response to a proposal by the North Pacific Fishery Management Council (NPFMC) to rationalize the groundfish fishery in the Gulf of Alaska. There was widespread concern in the broad community following the implementation of the Bering Sea/Aleutian Island Crab Rationalization fishery. The GOA Groundfish Task Force was charged with presenting elements, options and /or alternatives to the North Pacific Fishery Management Council (NPFMC) GOA Groundfish Rationalization motion that better protects the interests of Kodiak Island harvesters, crewmen, skippers, processors, processor workers, and businesses. The Task Force has met on the following dates: March 22 March 29 April 12 April 13 (sub - committee) April 19 April 26 May 3 May 10 May 16 May 24 The following Peter Allan Al Burch Oliver Holm Linda Kozak Cecil Ranney Joe Stevens John Whiddon Mission Statement: Kodiak residents have served Jerry Bongen Duncan Fields Donna Jones Alexus Kwatcha Dana Reid Jay Stinson Norm Wooten on the Task Force Julie Bonney Kent Heligso Julie Kavanaugh Matt Moir Gabriel Saravia Joe Sullivan as appointees or altemates: Steve Branson Chris Holland Debora King Theresa Peterson Jeff Stephan Charles Thompson It is the purpose of the Kodiak City /KIB GOA Groundfish Task Force to work toward a community consensus regarding what is best for the Kodiak Island community and GOA groundfish fishery in the context of the NPFMC considering a rationalization (motion plan) for GOA groundfish. Recommendation #1 advanced March 29th: The Gulf of Alaska Rationalization (GOA) taskforce recommends to the City of Kodiak and the Kodiak Island Borough that they address the North Pacific Fisheries Management Council (Council) and request that the Council acknowledge the recommendation of sharing the fish (National Research Institute Report on JPQ_) and - .�„ =� ter, IF Qs) wid uie evaluation of the February 2006 GAO report regarding rationalized fisheries and respond as follows: a) Continue to provide opportunities for the Kodiak GOA Rationalization taskforce through the City of Kodiak and the Kodiak Island Borough consensus building process to impact in a meaningful way the Council's GOA rationalization process Received by email from Norm Wooten 05/30/2006 Page 1 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages b) Not schedule GOA rationalization items at the Dutch Harbor October 2006 Council meeting c) Schedule a NPFMC meeting in Kodiak during the 2007 (February or April) meeting cycle. The K113 and City of Kodiak endorsed the Committee's recommendation as outlined above. The request was presented to the NPFMC by both government bodies at the April Council meeting. The NPFMC took two actions during the April meeting that were responsive to the request. The NPFMC took GOA rationalization off the October Council agenda in Dutch Harbor and postponed any further action on GOA rationalization until December of 2006. Since the April Council meeting the Kodiak task force committee has developed several work products that were used to educate the different harvesting, processing and community interests across the Kodiak fishing spectrum. The following work products are attached: Attachment 1: A list of problems that the Kodiak fishing community faces. Attachment 2: A timeline of fishery regulation changes that cumulatively affect GOA groundfish fisheries and a listing of the present groundfish regulations for the GOA fisheries. Attachment 3: A review of present federal rationalization plans with a list of pros and cons of each. Attachment 4: A proposal that was considered for advancement to the KIB and Kodiak city Council that was tabled. Attachment 5: A list of issues that have been raised by the public during the committee process. The cumulative work product by the Task Force represents the Kodiak concems, problems and issues that the Task Force has been able to identify at this time, and that the Task Force believes need to be examined within the context of the inventory of GOA Rationalization Alternatives, Options and Elements that are currently under consideration by the NPMFC. The Task Force will continue to review these concerns, problems and issues as they apply within the context of the present GOA rationalization plan, and may make recommendations to add, delete or otherwise modify such Alternatives, Options and Elements in a manner that attempts to address Kodiak concerns, problems and issues. The committee will not meet for the summer due to conflicts with the State salmon fisheries for many of the task force members. �tTY OF K.DO047'KO9II 'n9 boecu6, p pt : r ex IDENTIFIED KODIAK PROBLEMS/ISSUES Community Protection Mechanisms 1. Absentee ownership of rights 2. Fleet consolidation — cooperatives 3. Processor consolidation 4. Community protection mechanisms • regionalization • phase out of off -shore sector • CFQs 5. Establish an economic baseline Received by email from Norm Wooten 05130/2006 Page 2 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages • need a snapshot 6. Access to capital by those in rationalized fisheries 7. Impacts of processor linkages 8. Impacts of processor licensing 9. Impacts of differential licensing of processors (restrictions on processor licenses) • limitation of processor capacity • limitation to fixed gear only licenses • some with combined fixed gear and trawl licenses 10. Preclusion of new processor entries 11. Impacts on agencies and support industries 12. Operating in a global environment Harvester Protection Mechanisms 1. Rent extraction by harvest share holders 2. Rent extraction by harvest share holders 3. Potential loss of fair market pricing for fishermen • artificially low prices • result from processor linkages • result from processor licensing 4. Skipper /crew employment opportunities • compensation reduction 5. Fleet consolidation - cooperatives 6. High - grading on grounds and in canneries (economic discards) • put negative pressure on price • pose conservation issues 7. Processor consolidation 8. Establish an economic baseline • need a snapshot 9. Access to capital by those already rationalized 10. Impacts of processor linkages 11. Impacts of processor licensing 12. Impacts of differential licensing of processors (restrictions on processor licenses) • limitation of processor capacity • limitation to fixed gear only licenses • some with combined fixed gear and trawl licenses 13. Preclusion of new processor entries 14. Impacts on service agencies and related support industries 15. Conservation • high- grading • incentive fisheries Processor Protection Mechanisms 1. Processor consolidation Received by email from Norm Wooten 05/30/2006 Page 3 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages 2. Establish an economic baseline • need a snapshot 3. Access to capital by those already rationalized 4. Impacts of processor linkages 5. Impacts of processor licensing 6. Impacts of differential licensing of processors (restrictions on processor licenses) • limitation of processor capacity • limitation to fixed gear only licenses • some with combined fixed gear and trawl licenses 7. Preclusion of new processor entries 8 Impacts on service agencies and related support industries 9. Conservation • high - grading • incentive fisheries Establish Entry-level harvesting and processing opportunities 1. Cost of entry and quota share for future participants 2. Fleet consolidation — cooperatives 3. Access to capital by those in rationalized fisheries 4. Preclusion of new processor entries 5. Conservation • high- grading • incentive fisheries Solutions to the parallel fishery and the federal and state jurisdictional issues 1. Community protection mechanisms • regionalization • phase out of off -shore sector • CFQs 2. Access to capital by those in rationalized fisheries 3. Consideration for impacts on state fisheries 4. Consider limited entry for state water groundfish fisheries Conservation Concerns 1. High - grading on grounds and in canneries (economic discards) • put negative pressure on price • pose conservation issues 2. Conservation • high- grading • incentive fisheries Received by email from Norm Wooten 05/30/2006 Page 4 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages Attachment 1 Kodiak Problem Statement Potential problems were identified by Task Force members (Note: no consensus was reached. All points were offered by individual members): 1. The economic viability of the harvester and processor sectors is dependent upon: a) minimization of by -catch discards b) maximization of allowable biological catch of groundfish stocks c) access to the fisheries by the next generation 2. The "process" needs to impact critical timelines 3. Ability to access NPFMC in a meaningful way — LIO, teleconferencing, etc. 4. Economic benefits must be diversified throughout the community — harvesters, processors, entire community 5. Employment management measures that would slow down some elements of the GOA fisheries to increase prices to fishermen and value to processors: a) without encouraging consolidation of harvesters or processors b) without economically disadvantaging crew, skippers, boat owners, processing workers or processor owners c) provide real by -catch reduction benefits without encouraging hygrading or by -catch targeting d) Maintain or expand business opportunities for local support businesses e) Maintain fisheries access across the economic spectrum 6. How to balance broad based benefits of regulated inefficiencies with the need to maximize value of global markets 7. How to slow down harvests so processors can maximize value 8. The need for utilization of the resident labor force prior to any outsourcing of labor requirements 9. Should not be a process of reallocating fish between sectors 10. Trawlers and processors seem unwilling to separate pollock from other groundfish 11. Need to address fundamental flaws of past rationalization programs prior to proceeding down path to privatization a) inflated value of quota shares b) entry level opportunities c) flight of capital out of coastal communities due to leasing d) consolidation 12. Attempting to address many different gear groups and species in a comprehensive manner 13. All sectors to be rationalized concurrently if rationalization takes place. Options for fixed gears not be linked to processors 14. Stop the continued erosion of processor workforce and crew member pool 15. GOA rationalization can't happen via gear sector because it doesn't address the problem 16. No net loss to Kodiak through the process of rationalization 17. Consolidation is not necessarily the goal of rationalization of our fisheries 18. Access opportunities for entry level. "Changing rules while playing the same game" 19. Current economic model encourages absentee ownership /decision - making 20. Rationalization has typically meant privatization Received by email from Norm Wooten 05/30/2006 Page 5 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages 21. Each species has its own specific problematic issues 22. Two sets of problems 23. Species specific management problems 24. Systemic problems 25. Species harvesting and processing overlap each other 26. There are gear specific problems 27. How the benefits are distributed 28. Creating barriers to employment 29. Passive rent extraction 30. Value of fishery flowing out of community 31. Instability in employment - harvesters and processors 32. Operate in a global environment 33. Job loss due to consolidation 34. Anti- competitive nature of processor linkages 35. Must remain in a competitive position relative to other rationalization programs 36. All sectors need to be economically viable through partnerships 37. Job loss, vessel loss, infrastructure loss due to rationalization 38. Cumulative impact of multiple programs 39. Meeting conservation measures 40. Lack of state water protection 41. Broad problems of changing to a new system 42. Broad problems that create change 43. Failure to extract maximum (optimum) value from resource. 44. Increase volume of fish across the dock 45. Increase number of jobs in Kodiak 46. Protection from other rationalization plans 47. Tools for fisheries to deal with regulatory environment, e.g. SSL, EFH, IRIU 48. Because of diversified interests the community of Kodiak can't get along. Can this be changed? Our problem is ourselves. 49. Sectors want to wipe each other out. We need to reach consensus between sectors in order for the council/assembly can present a solution/proposal to the Council. We all need to give up something. 50. Fussing/fighting in response to Council's proposal for rationalization 51. Lack of cohesion due to no grassroots input/lack of communication 52. Increase ex- vessel value of harvested species 53. Because of approach to rationalization it's a net loss to Kodiak if we lose fisheries infrastructure in rural communities 54. Competition between sectors leads to problems/blocks of any form of rationalization Received by email from Norm Wooten 05/30/2006 Page 6 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages 0 . 0 N 'O 0 a ^� 0 U b 0 G2-1 cn N -.O s E (3 7 rn 00 00 ON 0 kr, 0 0 n rID ti CID f — i 0 c .X N- _ :J a 0 co a 3 E w m 0) 0 w L _ E 0 m m a Input Controls Output Controls Open Moratorium State /Operator Federal /OwnerRationalization Access Limited Entry LLP GOA LLP CGOA WGOA Gear Inshore /Offshore Split 100% Pollock 90% + pocket CP (Pacific Cod) Federal Pacific cod Fishery Pacific cod Total Allowable Catch 60% "A" season (Jan) and 40% "B" season (Sept) Jan 1 — Fix Jan 20 — Trawl Sept 1— Trawl and Fixed Federal Pollock Fishery Pollock — trip limit 300,000 pounds Areas 610, 620, 630, 640 Trawl seasons — Jan 20, Mar 10, Aug 25, and Oct 1 Federal Flatfish Fishery Halibut Mortality release for the trawl fleet — 5 Seasons Jan 20, Apr 1, July, Sept 1, Octl Management Input IRIU (Improved Retention/Improved Utilization) requires 100% pollock and 100% pacific cod to be delivered MRA (Maximum Retainable Allowance) requires regulatory discards when fisheries are closed to directed fishing and incidental catch excesses allowable amounts Pollock Input Controls by federal regulatory area Received by email from Norm Wooten 05/30/2006 Page 8 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages Attachment 3 Present Federal Rationalization Plans Halibut /sabelfish IFQ Pros 1) Increased ex- vessel value because of access to fresh market and competitive marketplace 2) Management efficiencies - Feds - Processors — less capital required to keep smaller frozen inventories 3) Safety — harvester sector 4) Market timing 5) Freedom to chose — harvesters and processors 6) Product quality 7) Creation of equity — financial institutions — IFQs are a tangible asset 8) Skipper /crews wages increased for those left in the fishery 9) Able to fish closer to the quota Cons I) Costs for new entrants — IFQs 2) Loss of jobs — crews /skippers, support industries 3) Disenfranchisement of some traditional stakeholders 4) Out migration of capital — royalties, rents, leasing 5) Absentee ownership 6) Lower percentage of harvest coming to Kodiak 7) Inconsistent buyers and markets with the established processing entities 8) Initial allocation of IFQ equity not shared by skippers and crew 9) Percentage of fish value IFQ right holder rents (50 % +) reduced amount of proceeds to crew, boat owners 10) Difficulty enforcing rules of program — ownership — some holders controlling more than the quota cap (excess shares) 11) Excess shares — harvesting and processing American Fisheries Act Bering Sea Pollock Pros Cons 1) Ability to manage by -catch 2) Ability to work within Steller sea lion regulations 3) Balancing harvesting with production 4) Increased value — roe bearing pollock 5) Facilitated vertical integration increased efficiencies — processors lower raw product acquisition costs 6) Increased recovery 7) Increased technology and automation reduces costs to processors and vessels both offshore and inshore 8) Asset value provides financial leverage (processors and boats) 9) Competitive advantage vis a vis non- rationalized pollock industry — harvesting, production marketi 10) Improved data collection — observers 11) Ability to develop an annual fishing plan — boats/processors 1) Circumvention of the Council process (program dictated by Congress) 2) Created an uneven playing field for processors and harvesters (those who had rights vs. those with no rights) 3) Facilitated integration (processors buying independent vessels) 4) Crew wages decreased — shares to salaried employees, stacked leases, cooperative costs 5) Competitive disadvantage for non - rationalized pollock industry 6) Artificial restriction limited harvester ability to choose processor 7) Artificial restriction limiting processors ability to choose harvesters 8) Forced processor affiliations 9) Artificial restrictions on the entry of new processing entities 10) Lack of transparency within coops Received by email from Nome Wooten 05/30/2006 Page 10 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages Western Gulf Kodiak 630 620 300,000 pound trip limit • no tenders 610 600,000 pounds tender limit 300,000 trip limit tenders Received by email from Norm Wooten 05/30/2006 Page 9 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages BearinE Sea Aleutian Island Crab Rationalization Received by email from Norm Wooten 05/30/2006 Page 11 of 14 Page 6 from the original Email was blank, reformatted from 15 to 14 pages Pros Cons 1) Consolidation of fleet — reduction of over- capitalization 1) Circumvention of the Council process (program dictated by Congress) 2) 3) Asset value for processors and harvesters Vessel 2) Artificial restrictions on the entry of new processing 4) owners able to stack IFQs entities and harvesters — high cost of entry Vessel owners can use other vessels for other fisheries 3) IPQs are incentive for consolidation in the processing sector 5) Ability to develop an annual fishing plan — harvesters, processors, brokers 4) Negative impact on conununities — reduced number of crew, impact on support industries 6) Safety 5) Negative impacts on other Alaska fisheries — processing and harvesting 6) Artificial restrictions on the ability of Kodiak to freely compete for the benefits of BSAI crab rationalization — IPQs, regionalization 7) Uneven playing field between processors and harvesters — fishing season, delivery requirements 8) Potential hygrading of more valuable crab 9) Rent extraction by rights holders not being shared by crew 10) Crew job loss BearinE Sea Aleutian Island Crab Rationalization Received by email from Norm Wooten 05/30/2006 Page 11 of 14 Page 6 from the original Email was blank, reformatted from 15 to 14 pages Attachment 4 The Task Force discussed the issue of the need to limit effort in the groundfish fisheries that take place in state waters and achieved unanimous consensus at their May 16 meeting to propose the following course of action to the City of Kodiak and Kodiak Island Borough: "The community of Kodiak should encourage the state of Alaska to initiate limited entry for groundfish vessels in state waters groundfish fisheries." Further discussion at the May 24 Task Force meeting resulted in an unanimous consensus that the proposed course of action should be tabled for future discussion, and until the Task Force has developed a complete package. Received by email from Norm Wooten 05/30/2006 Page 12 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages Attachment 5 Public Comments We need to slow down the process Pots only for gray cod leads to more money for community Need to focus on the overarching problem of value extraction — vessel trip limits, processor Limits Need to address Bering Sea pollock and cod Need to have entry opportunities for all 4 gear types Push for jig and pots outside 3 mile limit Opportunities are available for crews and skippers to access the fisheries Need increase public education on the issues and processes The ocean is a public resource that should stay in the public's hands. Our issues are national in nature and our focus should be directed at that level. Representatives from the City/Borough will have an impact at the Council We need to recognize that the Council process is flawed (conflicts of interest, not representative of all gear groups, do not meet GAO standards) 90/10 split already agreed upon Cod allocation for entry level or pot groups Need to get letters to the Council regarding the efforts of the taskforce — adds credibility to the process Meaningful discussion, good work by the taskforce Task force needs to interject into Council's plans Can the Council address the issues presented by those testifying at the meeting Should the task force represent the majority of the community or sector groups Need to represent the under - represented issues of jiggers, crewmen, etc. Need to recognize importance of observers and costs associated with observer program. Tony Lara: "Independent Economic Overview Bering Sea Crab Vessel Structure ". Tony made this presentation to the North Pacific Fisheries Management Council in April. (see attached) Differences between crab rationalization and proposed GOA groundfish rationalization need to be identified and addressed. Loss of crew shares seems to be the common denominator of rationalization plans. Need to look at existing tools for management. We should be looking at existing management tools Supports 300,000 pound catch limits Assembly /council members were voted in to lead, not to waffle. Need to represent the community of Kodiak as a whole. Your decisions affect one of the largest public resources. Lead or step down. We should have a town meeting to determine how the community feels about rationalization. If we have a referendum need to include _ _ li a referendum, ........... ::.. ..e,,,. to .u�iuuc au of the U.S. as we are talking about a public resource. If there is no strong message one way or the other, it's the same as no message at all and the Council will proceed as they wish. Received by email from Norm Wooten 05/30/2006 Page 13 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages Would like to see a bio of each taskforce member to determine his or her positions on the issues — wants disclosure. The taskforce committee needs to prioritize topics in A and B lists. 60/40 split negatively impacts pot fishermen More recent years should be used to determine history Need to determine who is for and against rationalization and what management tools are in place already As a participant in both federal and state fisheries I am against the state taking management of fish being caught beyond the 3 -mile limit. Received by email from Norm Wooten 05/30/2006 Page 14 of 14 Page 8 from the original Email was blank, reformatted from 15 to 14 pages