During the 1970's, commercial Alaskan salmon fisherman experienced sharp declines in their annual catch. Salmon runs were determined to be at alarming lows. In response, the state of Alaska set up government run hatcheries. In addition, several million of Alaskan resident tax dollars were allocated in the form of loans for hatchery production to stimulate growth among the private sector. In terms of legislation the plan is ideal. The state increases salmon stock and stimulates the fishing industry, boosts porcessing and marketing, and establishes a gradual pay back plan to ensure revenue return within private hatcheries.
Over the past twenty years the plan has been successful in terms of the increases in salmon stock. However, the hatcheries have not secured large enough profits to come clean on their loan installments, forcing the government to reevaluate their payment policy. To plague the legislation further, the world market over the past few years has seen a glut of salmon supply from the factory fish farms of Europe and Japan. Consequently, the saturated market has driven down salmon prices and reduced demand. This has left the state subsidized hatcheries producing an excessive amount of salmon whose numbers cannot be met by a struggling processing industry. In addition, due to their reduced niche in the world market, salmon processors are turning away salmon catches from Alaskan fisherman causing them to throw their excess to rot in the water.
Many people in the salmon industry are concerned about the effects of state funded competition within the industry. The central locale of Alaska's state funded hatcheries are in the Southeast and Prince William Sound at close proximity to processors. Coupled with the shrinking market, fishermen of northern and western Alaska are faced with an additional transportation costs of forty cents a pound (for chums and pinks) to reach processors and are consequently being forced out of the business. State funded hatcheries are enabling the southeastern fisheries to usurp a considerable advantage in a saturated industry. By this one piece of legislation, the state is stimulating unequal competition amongst the fisherman within its borders, as well as creating an overabundant stock of fish: driving down Alaskan salmon prices on the world market.
At this point, the state itself has little incentive to curb the poduction of its funded hatcheries. The private nonprofit corporations that run the hatcheries have borrowed more than $100 million in state money, and most of that ($96m) investment has not been repaid. The state has already extended loan holidays and deferred payments, delaying the return on investments much longer than initially anticipated. Last year, hatchery fish made up 11.5 percent of Alsaka's record statewide catch of 218 million fish and amount to 3 percent of the total worldwide supply of salmon. Hatcheries are still porviding marketable fish and precipitating marginal gains, however the state's salmon industry has become oversaturated with fish and fishermen. "Decreasing production in Alaska will only decrease our share of the market", said Larry Cambronero of Cape Cross Corp. If production is reduced the hatcheries believe they will see smaller returns, causing the state to sit and wait even longer for loan payments.
It is obvious that the Alaskan salmon industry is inevitably susceptible to international pressures within the market. However, to cope with these stresses, state and federal policy must be enforced to establish regulatory incentive amongst local competitors. Alaskan governor, Tony Knowles appointed a task force to review the hatchery system looking at the financial soundness and inpacts on other parts of the state. The state has created a valuable resource which is dying off and rotting in its waters. Many Alaskans believe the answer lies in research to expand the market to give processors more alternatives. Ultimately, Alaska's salmon problem lies in the hands of co-management. Only when the needs of all the industry's constituents have been satisfied will the problem be completely resolved. State policy must incorporate a colaborative medium fulfilling the needs and concerns of hatchery and processing operators, the fishing association, and representatives of local communities, Native and environmental organizations.
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