Rep. Seaton’s bill breaks up scallop monopoly

• Board of Fisheries to decide on how to allocate scallop permits
By Naomi Klouda
Homer Tribune

New opportunities should open for commercial fishermen interested in expanding to the scallop industry since the passage of a bill that eliminates a monopoly currently held by a single Washington state operator.
Rep. Paul Seaton has long been an opponent of the vessel limited entry program for Weathervane Scallops and Korean Haircrab, two fisheries lumped together, though very little haircrab exists in state waters. Mostly his objection centered on scallops, a $4.5 million industry in the hands of just two operators. He says it’s inconsistent with the approach taken in the rest of the state water fisheries where the limited entry permit is allocated to a person. 
In 2002 the Legislature adopted the temporary permit vessel limited entry program.
“That policy led to a rapid and extreme consolidation,” Seaton said, “leaving 90 percent of the scallop fishery in the hands of a Washington-based corporation.”
The F/V Kilkenny, based currently out of Kodiak, but making frequent trips to Homer, is the only Alaskan scallop operation in state waters, Seaton said. A monopoly on the majority of the $4.5 million fishery is held by the Alaska Scallops Association, a group of partners from Washington.

The weathervane scallop industry is $4.5 million annually, currently in the hands of one Alaska permit holder and five out-of-state, representing a monopoly that Rep. Seaton believes may be unconstitutional.

The association is led by Jim Stone of Lakewood, Wash., and has come to control virtually the entire scallop harvest. Including American Seafoods, that core group now controls six of nine state and federal permits for the scallop fishery. Since 2009, the 88.5-foot factory trawler Ocean Hunter has harvested scallops in state waters on behalf of the Alaska Scallop Association members with “lease fees” paid to the permit holders who do not associate their permits with a vessel.
Sen. Cathy Giesel, R-Anchorage, proposed SB 54 to allow the fishery to continue on in its current permitting practice. It proposed to extend “the termination date of the authority of the Commercial Fisheries Entry Commission to maintain a vessel-based limited entry fisheries system for the weathervane scallop and Bering Sea hair crab fisheries” for another 10 years to 2023. Seaton’s action on the bill proposed to end the program.
Information during Fisheries Committee meetings, which Seaton chairs, revealed that according to a 2006 federal report on the scallop fishery, about $244,000 in “lease fees” were paid from Stone’s Ocean Fisheries LLC and Mark Kandianis’ Provider Inc. in 2003 to permit holders who were not actively fishing.
The scallop limited entry program is administered by the Commercial Fisheries Entry Commission. Because some of the scallop beds around Alaska criss-cross the three-mile boundary between state and federal waters, the state limited entry program operates in conjunction with the federal program, Seaton said.
But the federal program allows individual fishing quotas while Alaska law does not. One way to break the monopoly is to offer the permits to individual vessel owners, Seaton said. Another is to limit the size of the vessels to 80 feet and under in length. Whatever the outcome, the issue is to be decided by the Board of Fisheries.
“This means more people will be able to participate. You could have four or five smaller vessels operating over a longer period of time. You won’t have a couple of big boats coming in and closing down the fishery as soon as they are full,” Seaton said. It also will be good for the environment because the big vessels use gear that’s three times that of smaller operators, they are more powerful and cause more bycatch destruction, Seaton aruges. Since scallops are managed for sustainability, the amount allowed for catch would continue to be limited by Fish and Game quotas.
Seaton says there is a strong possibility that the consolidation of the state water fishery to essentially two working vessels may be in violation of the constitutional prohibition on the special right of fishery. The Alaska Department of Fish and Game will need to move rapidly to implement a program for the state water scallop fishery such as that they proposed to implement in 2008, Seaton said.
Concerns and questions in the House arose because since that time, a small group of partners from Washington led by Jim Stone of Lakewood have come to control virtually the entire scallop harvest. Including American Seafoods, that core group now controls six of nine state and federal permits for the scallop fishery along with the F/V Ocean Hunter, one of the two vessels that still fish in state waters. According to a table outlining ownership of state and federal scallop limited entry permits, Stone is joined by shareholders Glenn Mikkelsen, Egil Mikkelsen, John Lemar and Stein Nyhammer.
The Korean Haircrab, or spider crab, was a viable fishery in the federally-regulated waters of the Bering Sea near the Pribilof Islands in the late 1970s-90s. But currently, the fishery is closed in state waters, defined as the three miles from land. The same body that governs scallops, the Commercial Fisheries Commission, oversees haircrab regulations.
Korean hair crab is called “kegani” by the Japanese and is said to be a highly sought seafood and similar in taste to Tanner crab.

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Posted by on Apr 24th, 2013 and filed under Headline News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

1 Response for “Rep. Seaton’s bill breaks up scallop monopoly”

  1. Johnnie the K says:

    It’s about damn time somebody broke up the scallop monopoly and returned this fishery to its rightful owner — individual fishermen who live and work in Alaska.

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