Purpose and Need

The allocation of pollock TAC to the CDQ program from 1992 through 1998 had been instrumental in providing the revenues, employment, and training benefits to achieve the Council's goals of helping western Alaska communities to develop and support commercial fishery activities that result in ongoing, regionally based commercial fisheries or related businesses. The 1996 amendments to section 305 of the Magnuson-Stevens Act require the Council and the Secretary to “establish a western Alaska community development quota program under which a percentage of the total allowable catch of any Bering Sea fishery is allocated to the program.” An amendment to the FMP was necessary to continue the allocation of pollock to the CDQ program. Amendments 18 and 38 authorized the allocation of 7.5% of pollock total allowable catch (TAC) in the Bering Sea and Aleutian Islands (BSAI) to the Western Alaska Community Development Program for the groundfish and crab fisheries for three years periods between 1993 and 1998. Amendment 45: 1) permanently extended the CDQ allocation which was to sunset December 31, 1998; 2) removed the pollock CDQ program from the inshore/offshore section of the FMP and reorganized three separate CDQ-related sections of the FMP; 3) increased the pollock allocation to 10% through December 31, 2004 to comport with the provisions of the American Fisheries Act of 1998.

Analysis

A 146-page analysis (Secretarial review draft dated December 1, 1998) considered the economic impacts of the first 6 years of the pollock CDQ program in western Alaska. The analysis estimated that 249 entities are affected by regulations governing the BSAI pollock fishery, of which 130 are small entities. Sixty-five Alaska villages near the Bering Sea formed six CDQ groups and established partnerships with fishing corporations. Five communities whose residents participate in the BSAI pollock fisheries but are not eligible for the CDQ program, 140 trawl catcher vessels, 31 trawl catcher/processors, three motherships, and eight shoreside processing plants were also affected. The EA/RIR/IRFA estimates that in 1997, over 200 people from CDQ communities were employed directly in the pollock harvesting and processing industry, and a total of about 1,200 CDQ program related jobs had been created. These jobs are in CDQ program management (6 % of jobs), pollock harvesting and processing (27 %), other fisheries harvesting and processing (50 %), and other employment (17 %). NMFS considered two alternatives to minimize economic impacts on the small entities negatively affected by this action. The first alternative would be to allocate 3.5 % of pollock TAC to the CDQ reserve. Although this alternative would benefit the small entities not receiving CDQ allocation, the benefits accruing to the (then) 56 CDQ communities would have been considerably less. Those communities have limited opportunities for generating income and investment such that the reduction from 7.5 % to 3.5 % reserve would have likely produced significant negative economic impacts on these small entities. The second alternative would have let the present reserve of 7.5 % of pollock TAC expire at the end of 1998. This action would result in a further shift of impacts from one set of small entities to another. It would benefit the non-CDQ participants in the fishery while cutting revenues of the CDQ groups.

Regulation Summary

Ten percent of pollock and 7.5% of all other groundfish and crab TACs are set aside for the Western Alaska CDQ program.

Results

The pollock CDQ allocations have led to training and employment opportunities for community residents. Since the inception of the program in 1992, the program has provided approximately 1,000 jobs annually for Western Alaska residents. Total wages exceeded $30 million during the 1992-1999 period. The CDQ program has also contributed to infrastructure development projects within the region as well as loan programs and investment opportunities for local fishermen. Through 1998, the six CDQ groups earned over $20 million per year from contracts with their industry partners that harvest the pollock CDQ quotas on behalf of the CDQ groups. The value of the CDQ groups' equity ownership in fishing vessels, on-shore development projects, loan portfolios, and Individual Fishing Quota holdings increased an average of 37 % per year since 1992, and totaled approximately $64 million in 1997.