The Overproduction of Alaskan Salmon

The cause of the economic problems associated with the Alaskan salmon fishery is overproduction. The salmon fishery, for a long time, has been one of the largest fisheries in Alaska. Salmon enhancement programs have increased stocks, helping to over-saturate the market. About 20-25% of all salmon harvested are from hatcheries. In addition to this, the worldwide production of salmon has also increased. Foreign fisheries whose markets were once limited are now expanding, coming in direct conflict with U.S. fisheries, and Alaskan fisheries in particular. The Russian Far East fisheries, which once exported salmon mainly to Eastern Europe, is now expanding their exports to include Western Europe, and Japan. This will result in a greater number of Russian salmon entering what was once U.S. dominated markets. This puts the U.S. in direct competition with Russia which has resulted in the decrease of profits for the U.S. salmon fisheries. Other reasons could include unfavorable exchange rates, and the recent U.S. economic recession.

Hatcheries, as mentioned above, play a big role in the production of salmon. Through the use of a model created at the University of Alaska, researchers tried to predict the results of four different scenarios to determine how to better manage the fishery. The first situation was to leave the present salmon harvests and salmon enhancement production at the present levels. This result would serve as a standard to measure the other three scenarios by. The second one involved increasing the salmon enhancement production by 15%. The overall result in this test was a loss of roughly 1.8 million dollars. The third scenario was to decrease the production of salmon by 15%. The result was an increase in revenues by about $817,000. Finally, the researchers eliminated the production of salmon completely. This resulted in the loss of about 14.5 million dollars. In the second case, too much fish was being harvested, therefore the price fell. The third case seemed to create a balance between supply and demand which is reflected in the estimated growth of revenue. In the last scenario, not enough fish is being harvested due to the small numbers available. By completely removing the salmon enhancement program, harvest greatly decreases along with revenue.

A possible solution then is to decrease the total input of salmon enhancement programs without completely eradicating them. This will create a balance between the amount of fish harvested by the fishery, and the demand of the consumers.

Other economic case studies:
Chesapeake Bay Fishery
Massachusetts Groundfishery

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