04/13/2006 Sub-Committee Meeting
GOA Groundfish Rationalization Task Force Sub-Committee Meeting
April 13, 2006
Kodiak Chamber of Commerce Conference Room
Purpose: To review existing rationalization programs and determine pros and cons of each program.
Sub-Committee Members Present: Jeff Stephan, Alexus Kwachka, Jay Stinson, Oliver Holm (sitting in
for Theresa Peterson)
Others: Chris Holland, Jerry Bongen
Halibutlsabelfish IFQ
Pros Cons
1 ) Increased ex-vessel value because of access 1 ) Costs for new entrants - I FQs
to fresh market and competitive marketplace 2) Loss of jobs - crews/skippers, support
2) Management efficiencies industries
- Feds 3) Disenfranchisement of some traditional
- Processors -less capital required to keep stakeholders
smaller frozen inventories 4) Out migration of capital - royalties, rents,
3) Safety - harvester sector leasing
4) Market timing 5) Absentee ownership
5) Freedom to chose - harvesters and processors 6) Lower percentage of harvest coming to Kodiak
6) Product quality 7) Inconsistent buyers and markets with the
7) Creation of equity - financial institutions - IFQs established processing entities
are a tangible asset 8) Initial allocation of IFQ equity not shared by
8) Skipper/crews wages increased for those left in skippers and crew
the fishery 9) Percentage of fish value IFQ right holder rents
9) Able to fish closer to the quota (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
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BOROUGH CLERK'S OFFICE
KODIAK ISLAND BOROUGH
CLERK'S OFFICE
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American Fisheries Act - Bering Sea Pollock
Pros Cons
1) Ability to manage by-catch 1 ) Circumvention of the Council process
2) Ability to work within Steller sea lion regulations (program dictated by Congress)
3) Balancing harvesting with production 2) Created an uneven playing field for
4) Increased value - roe bearing pollock processors and harvesters (those who had
5) Facilitated vertical integration rights vs. those with no rights)
- increased efficiencies - processors 3) Facilitated integration (processors buying
- lower raw product acquisition costs independent vessels)
6) Increased recovery 4) Crew wages decreased - shares to salaried
7) Increased technology and automation reduces employees, stacked leases, cooperative
costs to processors and vessels both offshore costs
and inshore 5) Competitive disadvantage for non-
8) Asset value provides financial leverage rationalized pollock industry
(processors and boats) 6) Artificial restriction limited harvester ability to
9) Competitive advantage vis a vis non-rationalized choose processor
pollock industry - harvesting, production, 7) Artificial restriction limiting processors ability
marketing to choose harvesters
10) Improved data collection - observers 8) Forced processor affiliations
11) Ability to develop an annual fishing plan - 9) Artificial restrictions on the entry of new
boats/processors processing entities
10) Lack of transparency within coops
Bearing Sea Aleutian Island Crab Rationalization
Pros Cons
1 ) Consolidation of fleet - reduction of 1 ) Circumvention of the Council process (program
over-capitalization dictated by Congress)
2) Asset value for processors and 2) Artificial restrictions on the entry of new processing
harvesters entities and harvesters - high cost of entry
3) Vessel owners able to stack IFQs 3) IPQs are incentive for consolidation in the processing
4) Vessel owners can use other vessels sector
for other fisheries 4) Negative impact on communities - reduced number of
5) Ability to develop an annual fishing crew, impact on support industries
plan - harvesters, processors, brokers 5) Negative impacts on other Alaska fisheries -
6) Safety 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