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Residents of small Alaska fishing communities are dealing with the hard economic realities that have come with the first wave of federal crab rationalization.
Alaska communities adjust to reality of crab rationalization 012306 state 1 JuneauEmpire Residents of small Alaska fishing communities are dealing with the hard economic realities that have come with the first wave of federal crab rationalization.

Alaska communities adjust to reality of crab rationalization

ANCHORAGE - Residents of small Alaska fishing communities are dealing with the hard economic realities that have come with the first wave of federal crab rationalization.

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The management plan was touted as a way to end the frantic race for crab on the high seas by assigning quota shares to harvesters and processors. In communities like Kodiak and King Cove, officials said the economic impact continues to be brutal, with the loss of jobs and business in their communities.

"When they went from 250 to 88 vessels in one year, that's not a reduction. That's a collapse. That's a wipe-out," said Kodiak Borough Mayor Jerome Selby.

At King Cove, a fishing town of 760 people on the Alaska Peninsula, Mayor Henry Mack said crab rationalization has stripped 75 percent of income for local businesses, along with a number of skipper and crew jobs.

Mack, who earns his living storing and loading crab gear onto boats, said Jan. 4 he expects work loading about 15 vessels this year, compared to the usual 75 to 80 boats.

"I knew there would be less boats, but not to this extent," he said. "They're not here any more."

During the king crab season, there were 11 boats working out of King Cove, compared with the usual 80, he said. Each of those 80 boats had five crew members, who shopped and ate out in King Cover restaurants, waiting for the season to start.

King Cove got the same percentage of the overall allowable king crab harvest that it usually does, and the tax base derived from those deliveries will remain the same, he said.

The problem is King Cove's $11 million boat harbor, which the community worked on for years to attract more crab vessels. "It was successfully drawing people into our harbor," Mack said. "Then crab rationalization came along.

"We used to bill out $40,000 to $50,000 just for transit moorage. This last year, we billed $7,000 for those two months," he said. "Now we are going to take a lot of that tax we get for crab just to keep the harbor running, and we are still going to go in the hole."

Arni Thomson, executive director of the Seattle-based Alaska Crab Coalition, argues that nobody should have been surprised at what happened when crab rationalization went into effect. "It was well known for years by everyone ... in the industry that many jobs would be lost due to vessel consolidation, and from vessel owners stacking licenses and quota shares," Thomson said. "This is what occurs in modern-day industries that are struggling to remain competitive in world markets, and Alaska crab is no different."

Just how much the federal plan to privatize crab fisheries off Alaska's coastline has affected fragile local economies is the focus of a study now underway at the University of Alaska Anchorage by fisheries economist Gunnar Knapp. Knapp has a contract with the city of Kodiak to pinpoint exactly what happened to the local economy when crab rationalization began. Knapp said the study was designed to show the effects on employment, compensation and spending in Kodiak. A similar study for the Aleutians East Borough is being negotiated, he said.

Veteran fishermen like Dave Woodruff, who operates a processing plant in Kodiak, are not waiting for any studies to form their own conclusions. "When you privatize a common-property resource and hand it to a few individuals, you have taken private free enterprise right out of the picture," said Woodruff, vice president and operating manager of Alaska Fresh Seafoods.

As a processor, Woodruff got 30,000 pounds of king crab in processor shares - an amount he deemed "a tiny dab." Those 30,000 pounds were what are referred to as "A-shares," which made up 90 percent of the total harvest and had to be delivered to specific processors. Woodruff said he then found enough B shares, the 10 percent of the harvest fishermen could deliver to the processor of their choice, to make his processing worthwhile.

"We did over 100,000 pounds of crab, but it isn't enough," Woodruff said. "My plant is capable of running 1.5 million pounds of crab."

An unexpected bonus was an additional 70,000 pounds of king crab delivered by a vessel initially destined for another plant. "The only reason that second load was allowed to come here was because the other plant they were delivering to shut down, saying they had enough crab," Woodruff said. "I had to get permission from the National Marine Fisheries Service (to take the delivery)."

Woodruff, who began fishing in Kodiak in 1978, said he thought crab rationalization has cost Kodiak millions of dollars in lost jobs, fuel and grocery sales. For the Safeway supermarket in Kodiak, October is usually one of the biggest months of the year, he said. This year, half the usual fleet sailed out of Kodiak, and the local merchants didn't get their usual sales, he said.

According to Thomson, many vessel owners simply chose not to fish because they have incurred tremendous risks and liabilities for marginal returns on their investments the last three years.

Despite Kodiak residents' concerns about losing market share in the crab rationalization program, Thomson said preliminary landing reports show that Kodiak has maintained its historic share of Bristol Bay king crab deliveries, with a delivery of 74,045 pounds of red king crab.

Thomson also argued that one of the most important benefits derived from the new crab rationalization program is improved safety. Under the new plan, many vessels who had assigned quota shares were able to remain in port until storms had passed, he said.

"In all, there were no deaths, only one minor injury, and no capsizings or sinkings from the 89 vessels participating in the red king crab fishery," he said. "Under the old derby-style system, crabbers would have been forced to prosecute the fishery despite the weather."

Many fishermen said that's just what a lot of crabbers did anyway, because of deadlines imposed by the processors.

Woodruff was scornful of the safety issue. Since 1978, crews aboard his five vessels have had sprains, bruises and cuts, but none have ever been lost at sea, he said. "It probably made old men out of them years before their time, but they had the right to do it, and they did," he said. "I would never ask one of my fishermen to go out and risk life and limb."

Woodruff said he felt crab rationalization had nothing to do with safety. "It's had everything to do with personal greed and how much money they were going to make on the fishery," he said.

Woodruff sees a proposed Gulf of Alaska groundfish rationalization program as more of the same.

"We are all competitors vying for the same product, but you've got a graying fleet of trawlers out there, and the only way to have retirement is to get the fishery rationalized, so they can sell their boats and shares." A guaranteed quota share enhances the value of the vessel.

What worries King Cove's Mayor Mack even more is further job losses.

"Several individual fishing quota owners through the years purchased four or five boats, knowing this was coming," he said. "Today, those boats they own, they fish one or two and stack quotas, and the owners are saying they are probably going to have to get rid of experienced crew members and get Filipinos and Mexicans in who are willing to work for $100 a day."

Mack said he is close enough to a lot of skippers who know the boat owners are saying this. "They are scared they will have an inexperienced crew on deck, and people are going to get hurt. These men and women who have been working there for years, they love what they do, but they are going to end up with nothing," he said.


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