Low-interest federal loans available

By Laine Welch

Alaska’s halibut and sablefish fisheries include a built-in, low-interest federal loan opportunity to help new entrants buy shares of the fish.  The loans are funded by a fee of up to 3 percent of the dockside value of the catch. Seventy-five percent of the total goes to recover management and enforcement costs; 25 percent supports the loan program. Fishermen are eligible for 80 percent of the purchase price of quota shares, paid back for up to 25 years at a low interest rate; currently 6.5 percent.
The catch share plan for Bering Sea crab was designed the same way.  But five years later, loans to buy crab poundage aren’t even on the books.
What’s the hold up? Being near the bottom of the bureaucratic in-box in distant Washington, D.C.
“The rule-making, unfortunately, has taken considerably longer than we had initially thought,” said Leo Erwin, Chief of Financial Services at NOAA Fisheries headquarters. “We had the proposed rule, it’s been drafted, and it has been in the clearance process for some time. We believe we are pretty close to getting the rule actually published.”
Senator Lisa Murkowski is credited with obtaining $16 million for Alaska’s combined catch share loan programs, and the loan authority for crab is there. But before any cash can be cut loose, it has to go through the long federal lawmaking process before it is official.
“They will have to come out with a proposed rule, take comments from the public, go through the rule making, take more comments,” said fisheries aide Arne Fuglvog. “I mean, the money is there to do it and we would really like to see these loans coming out this year.”
Jim Stone, a lifelong Bering Sea crabber, said he is frustrated by the federal foot-dragging, adding that it has prevented crew from buying crab poundage.
“I find it especially disappointing when the existing crew loan program for halibut and sablefish has near a zero default rate,” Stone asked. “So why would a program with such a good track record of paying the government back not move forward as quickly as possible? We should have had this in place five years ago.”
Stone worked his way from deckhand to owner of the F/V Arctic Hunter. He said it is easier now to buy into the crab fishery.
“Back when I did it, you had to make a huge loan and buy a 100-foot boat and make an extremely big investment. Then you’d roll the dice and go out there with no guarantee you’d catch anything to pay for the fuel and the crew and your big bank loan,” Stone explained. “Now you can buy a little bit of quota and start buying in for as little as $1,000. You don’t have to start out buying a big chunk.”
Stone said he and other Bering Sea crab boat owners plan to offer their own loan program to their crews to get the ball rolling.
“We would ask them to pay 50 percent on a small amount and the other 50 percent we would loan over a 7-10-year period,” he said. “The idea is that they would lease it onboard our own boat.”
So when might the federal crab loan program be in place?
“Perhaps the earliest we would have a final rule in place — assuming we get this proposed rule published relatively soon — which we think will happen. Then we have the comment period, and then we respond to the comments in the final rule … and then that becomes effective,” said Leo Erwin. “But I think that process, at the earliest, would look like just before the end of the fiscal year, or perhaps go past the fiscal year, which for the government concludes Sept. 30.”

Halibut blows
For the second year in a row, icy winds and blizzards bit into the start of Alaska’s halibut season.
One week into the fishery, only 46 landings totaling 345,728 pounds had crossed the docks in Alaska. Homer scored the first landing – 42,500 pounds that fetched $5.95-$6.25 per pound at the online Auction Block.
“It’s the highest I ever heard of, a new record,” said auction owner Kevin Hogan. “It’s supply and demand!”
It’s not unusual for early fish prices to top $5 per pound, although last year’s prices dropped to $3.50 per pound. Hogan said halibut supplies are likely to remain tight for a week or two.
“There hasn’t been anything coming in from Canada or Southeast,” he added. “There is very little fish available and not much on the horizon.”
What is on the horizon? More blizzards and frigid temperatures throughout the Gulf this week.
Alaska supplies 80 percent of North America’s halibut — more than 42 million pounds this year. But even after the weather lays down, fishermen won’t be in a big hurry to flood the market.
To help maintain a stable price, Alaska longliners have learned to tickle the market, seldom delivering more than two million pounds each week throughout the eight month fishery.

Fish bits
Arni Thomson was elected president of United Fishermen of Alaska, the nation’s largest commercial fishing advocacy group. Thomson is 20-year director of Seattle-based Alaska Crab Coalition, and uber-fish policy wonk at state and national levels. Thomson said he is relocating to Anchorage and looks forward to getting up to speed on Alaska salmon fisheries. On the UFA radar: A national seafood marketing coalition, the sport charter halibut debate and marine spatial planning. UFA is not seeking to shift the fishery use hierarchy at Copper River or anywhere else and supports the state status quo.

Bone up on fish
All major candidates for Alaska governor say they will be at Kodiak’s famous fisheries debate: Berkowitz, French, Poe, Samuels, Walker and Gov. Sean Parnell.
“Kodiak is home to generations of fishing families, and I stand with them as a staunch advocate,” Parnell said via a campaign spokesperson. “I support increased marketing and streamlined regulations for small businesses so good jobs stay in Kodiak. And, I’m taking the fight against Endangered Species Act listings to Washington.: The fish debate is set for May 28 during the Kodiak Crab Fest and will be broadcast statewide.

Also on the Rock
ComFishAlaska, now in its 31st year, will spotlight: catch shares, Bering Sea crab/five years later, funding for new entrants, E-Stops, Pebble Mine, fishermen’s favorite PFD revealed, Fisher Poets, Off the Grid, more. April 15-17, Kodiak Harbor Convention Ctr. www.comfishalaska.com

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Posted by on Mar 17th, 2010 and filed under Fish Factor. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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