May 10, 2012 | Vol. 39, No. 19

Southeast fishermen approve permit buyback plan

KETCHIKAN (AP) — Southeast Alaska commercial fishermen have approved a $13 million plan to buy back 64 state permits for purse seine fishing to boost market conditions.

The region's seine permit holders voted 215-54 in favor of the “capacity reduction program” aimed at improving the economic viability of the remaining 315 permit holders. They voted from March 30 to April 30 in a referendum conducted by the National Marine Fisheries Service.

The buyback will be financed with a federal loan to be repaid over time by remaining permit holders.

“We were thinking it was going to be close,” Dan Castle, president of the Southeast Alaska Seiners Association, told the Ketchikan Daily News.

Purse seiners, according to the Alaska Department of Fish and Game, capture salmon by encircling them with a long net. Fishermen draw the net bottom closed like an upside-down purse by tightening a line run through rings. The lines and net are pulled up and fish removed without lifting the net completely out of the water.

The 64 permits were selected through a reverse auction process. The association rejected the 10 highest bids, ranging from $248,000 to $350,000, and said they were an “excessive deviation” from the fair market value.

Payments to fishermen selling their permits will begin in June. Their values range from $175,000 to $240,000.

The remaining 315 permit holders will repay the loan over time through an assessment on their salmon harvests. Assessments will start at 3 percent of the value of their catch.

The National Marine Fisheries Service conducted the referendum but did not campaign for either side.

“It's not a federal fishery, so they really had no stake in it at all (beyond) handling the vote and doling out the money,” Castle said. “So it fell to us to educate people and try to convince them that this is going to be the way to secure our future.”

The buyback effort started in the early 2000s. Farmed salmon had entered the U.S. market, forcing down prices for wild salmon.

Some Southeast permit holders responded by not fishing, and participation fell to a low of 209 in 2004.

Active fishermen started looking for a way to reduce the number of permits, fearing that inactive fishermen would jump back in when the market improved.

In 2008, a $2.8 million federal program set up a pilot buyback program that bought back 35 permits.

The salmon has improved. The value of the Southeast salmon harvest by all fishermen, including seiners, trollers and gillnetters, rose from $50.3 million in 2002 to $147 million in 2010. Strong prices for pink and chum salmon last year help set a record high of $203.3 million.

The higher prices led to more people fishing, from 235 seine permit holders in 2010 to 277 last year.

Opponents of the buyback plan objected to paying for permits that were not being used.

“That's what is hard to sell people, I guess, paying (assessments) now to guard against a potential future problem,” Castle said.

The buyback is using $13.13 million of a $23.47 million federal loan, which leaves about $10.3 million remaining for future permit reduction.

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