The Alaska Department of Fish and Game (ADF&G) submitted its “Section 12005 CARES Act Relief for Fisheries Participants Final Draft Spend Plan” on December 7, 2020 for approval by NOAA Fisheries. If approved, the Pacific States Marine Fisheries Commission will then develop and review applications and distribute over $49 million in fishery disaster relief funds as direct payments to fishermen who meet eligibility criteria, including greater than 35% loss in gross fishery revenue from March 1, 2020 to November 30, 2020 as a direct or indirect result of COVID-19 relative to average gross fishing revenue during qualifying time periods. The December spend plan draft makes changes to residency requirements, reduces the time frame used to calculate losses, and maintains the State of Alaska’s plan to divert roughly $10 million in seafood processor relief funds to the charter fishing sector.
The relief funds allocated to Alaska reflected multi-year revenue information from commercial and charter fishing sectors, aquaculture businesses and processing sectors. Seafood processors generated nearly 60 percent of Alaska’s fishery revenue. Commercial harvesters generated 35.2 percent of the state’s fishery revenue, and charter operators generated the remaining 5.5 percent. As explained in the Department of Commerce’s press release, the funds are to “support America’s fishermen and our seafood sector’s recovery” and “the men and women working to provide healthy and safe seafood.”
ALFA wrote several comment letters requesting that ADF&G use NOAA’s percentages as a primary basis for allocating disaster relief funds between the sectors. Other major fishing state spend plans allocated fishermen’s funds either by using the NOAA Fisheries formula or through a fair and proportional allocation based on the number of license holders and businesses in each sector.
ADF&G, however, allocated over a quarter of the funds – 27 percent ($13.2 million) - to the charter sector – or roughly five times their allocation under the NOAA formula. Commercial harvesters who are not processors will receive 35 percent ($17.3 million) of the relief funds. The seafood processing sector, which includes both shore-based processors and numerous commercial fishing vessels with processing permits that freeze, participate in dive fisheries or direct market their catch, will receive 32 percent ($15.8 million) of the disaster relief funds. There are well over 500 seafood processors permitted in Alaska, and most of the permit holders are community-based commercial fishing vessels. Subsistence households will receive $2.5 million and aquaculture businesses, such as shellfish farmers, will receive $500,000 and the remaining $700,000 will support administrative costs.
ADF&G justified the re-allocation based on the agency’s unexplained assumption that the charter sector experienced disproportionate losses caused by travel restrictions and health mandates. As explained in a comment letter from ALFA and the Alaska Troller’s Association (ATA), ADF&G ignored the significant travel restrictions placed on fishing workers and crew members entering the state. Even after Governor Dunleavy relaxed quarantine requirements for most travelers in June, he maintained an expensive two-week quarantine requirement imposed only on commercial fishing participants and seafood processing workers. Processors incurred an estimated $50 million in COVID caused costs needed to test, transport and quarantine employees and observe health protocols in seafood plants.
While every coastal state’s charter sector suffered significant economic harm and reductions in fishing trips due to health mandates, social distancing requirements and other COVID-caused factors, Alaska is the only state that re-allocated a significant amount of funds from one sector to another. Other fishing states, after recognizing the serious impacts on the charter sector still utilized the NOAA formula or made minor adjustments so that fund disbursement remained consistent with the CARES Act goal of supporting fishermen and seafood sector recovery. ALFA comment letter explained that restaurant closures and COVID-caused impacts on Asian markets resulted in 40-60 percent reductions in prices paid to our fishermen in 2020. Other fishing states considered these impacts in their spend plans, noting that prices for some seafood products, particularly those destined for restaurants as well as other harms to food supply and distribution chains caused “significant losses” and “sharp declines in demand” and “some of the lowest prices ever.” However, ADF&G did not consider these impacts as significant enough to warrant providing processors with their fair share of the CARES Act relief funds.
The new plan did respond to concerns about residency requirements which discriminated against commercial fishermen. ADF&G’s initial plan allowed charter operators residing in other states to apply for relief funds but excluded non-resident commercial fishermen. The second plan then effectively excluded non-resident commercial fishermen by requiring an Alaska business license. The final draft spend plan now allows commercial fishermen from other states who meet all other eligibility requirement to apply for relief funds so long as they do not apply for fisheries disaster relief in any other state.
This change affects many Alaska commercial fishermen who reside in Washington or other states. The state of Washington also submitted its draft plan in December and the agency’s press release indicates that Washington residents who fish in Alaska will be eligible for relief in Washington. Washington State’s plan has a shorter time period for calculating revenue losses, however, which reduces the program’s accessibility to many Alaska fishermen. Application periods for relief in California and Oregon have already closed.
The final draft also provided additional estimates related to the “share payment systems” for all sectors. Actual payment amounts will not be known until all applications are received. Each sector will have its total allocation divided by the total number of shares which will then become the base share value. For the $17.3 commercial harvester allocation, there will be one share per eligible permit - there are 18,926 Commercial Fisheries Entry Commission (CFEC) permits, 732 CFEC vessel permits and 5,301 NOAA Fisheries permits, or a total of 24,958 potential shares. If all 24,958 permits and vessel licenses were eligible for a share, the base share would be $692. For example, a commercial harvester who owned a vessel, a salmon troll permit and halibut quota would receive $2,076. All applications must be received before the actual per share value is known.
ADF&G developed a seven-tier system for distributing the $15.8 million allocated to Alaska’s seafood processing sector based on average wholesale revenues. The lower tiers include processors with revenues between $30,000 and $75,000 which would receive one share, and in tier 2, processors with revenues between $75,000 and $500,000 would receive 2 shares. At the top end of the scale, processors with larger revenues of between $20 million and $50 million would receive 6 shares, and processors with revenues above $50 million would receive 7 shares. If the entire pool of eligible processors submitted qualifying applications, ADF&G estimates there would be 1,150 total possible shares, making each share worth $13,729.
ADF&G will also implement a share system for the charter sector’s $13.3 million allocation, with one share per guide or business, one-half share per registered vessel, and 2 shares for holders of a combined Guide/business license. ADF&G estimates a total of 5,790 potentially eligible shares, with a base value of $2,301 per share.
There were over 200 public comments on the first and second draft plans. The final draft plan and public comments are available at: Ongoing Issues - Hot Topics and Issues, Alaska Department of Fish and Game
An updated summary of eligibility requirements and other spend plan components for fishermen and processors is available on ALFA’s COVID-19 page.
