Tuesday, January 25, 2011

New loan funds for charters, mariculture proposed

Gov. Sean Parnell yesterday offered some interesting legislation for state lawmakers in Juneau to consider.

Introduced as Senate Bill 67 and House Bill 121, the legislation would establish a "commercial charter fisheries revolving loan fund" and a "mariculture revolving loan fund" within the state Department of Commerce.

These new funds would be capitalized initially with $5 million and $3 million respectively.

In a letter to legislative leaders, Parnell said mariculturists, who grow shellfish, have extremely limited access to start-up capital "because of the time needed for crop development and market readiness."

With respect to charter operators, Parnell cites the halibut charter fleet's impending shift to limited entry.

Beginning Feb. 1, charter operators in Southeast Alaska (Area 2C) and Southcentral Alaska (Area 3A) will need to have a new federal charter halibut permit onboard.

As with past Alaska fishery conversions to limited entry, we're hearing an outcry from marginal players who applied but didn't qualify for permits, which are awarded based on past participation in the fishery.

Or course, those who don't qualify for a free permit from the government can now buy one on the open market. And Parnell is looking to help them with that.

In his letter to the legislative leadership, the governor assets that the federal government's denial of up to 40 percent of permit applications will have the effect of "escalating permit prices."

SB 67 and HB 121 would authorize the Department of Commerce to make loans not only for buying charter halibut permits, but for the purchase or construction of charter fishing vessels.

Parnell said the charter loan fund would be similar to the state's existing commercial fishing revolving loan fund, which he characterized as "highly successful."

It appears that loans would be limited to $100,000, with a $300,000 cap on a borrower's total outstanding loan balances.

Only Alaska residents would be eligible for mariculture or charter loans.


Anonymous said...

loans to subsidize the Charter fleet to build more boats?! with the halibut resource down as it is, and a with existing overcapacity of Charter boats, this is the dumbest thing I've ever heard of....Nice work Gov'ner

Anonymous said...

Looks like loans to hype the stock market-like trading in halibut shares. This stuff is great both for ponzies. and for some small number of people owning all the fish in the sea.

Anonymous said...

Looks like the governor wants to create another commercial fishery with this legislation. What happened to the "sport" in sport fishing. Charter operators need to remember they are providing a good time to their customers, not guaranteed fish. Everyone thinks they are entitled to a chunk of the fish because they were in the right place at the right time just like IFQ's. It disgusts me as a lifelong resident and fisherman to watch these middle-aged primadonna's steal our nation's resources right from under the noses of the real Alaskans. Pollock rationalization failed, crab rationalization failed and halibut IFQ's are failing as we speak. No more programs need to be adopted or added until we remedy the mess that has been created since the early 90's.

Anonymous said...

Subsidize charter fleet to build more boats? How did you come to that bizarre conclusion? It's a loan to purchase the charter license. It's not for new boats and it's not a subsidy.

Halibut IFQ program failing? The program is doing what it was designed to do, the resource is what is currently "failing" or in decline. How has the IFQ program caused this?

Anonymous said...

Doing what it was designed to do? Lock out young individuals with no family ties to the industry from the fisheries by creating quota that is passed down for generations, and is far to expensive to purchase for anyone else. Pressuring the Commission to raise TAC's because quota holders believe they are entitled to "their" fish. We'll all see in a few more years how this program and others like were not the answer to saving the fish, but by then it will be too late. As far as the loan program for the charter fleet, they are going to yearn for more as soon as the state gets involved with them. It's only a matter of time before they are going to want access rights to the fish; they are just looking for another angle since charter IFQ were previously shot down.

Anonymous said...

So the alternative to IFQ was the derby; are you suggesting the derby style was superior to IFQ? I'm a young guy, I have no family ties to halibut, but am seriously considering purchasing halibut IFQ. You say it's too expensive for anyone to purchase, but that could be said of almost every business. Getting into commercial fishing is costly, no one ever said it would be cheap or easy. It takes money to make money, and I applaud those who are willing to take a risk for a shot at success.

Anonymous said...

Yes, I believe there were many other steps that could have been taken other than the present system of privatization in the halibut industry. Limited entry, skate limits, etc. I own about 10K lbs of halibut quota that was purchased from crabbing in Bering Sea before crab ratz (that's another argument); however, as the price of halibut increased it became too costly/risky to purchase more especially with the uncertain TAC's of the future. Even though I don't agree with the current system, I still realized the only way to try and make it in this industry was to buy in, even if it was only a small amount. Don't let these guys who were allocated 100K lbs of halibut or black cod give you advise because they were made millionaires overnight for an initial investment of $60 for a gear card and vessel they already had for seining or gillnetting. You or I will never own a boat cap of black cod or halibut because the initial invenstment is too great, and no bank is going to loan you millions of dollars just so you can default when the quota dips. Focus on salmon if you can; it's the only sector of the industry where the true highliners can still standout.

Anonymous said...

You mention limited entry as a better alternative to IFQ; but IFQ is a limited entry system. Whenever anything goes limited entry, the price of entrance naturally goes up. It is unfortunate that it costs so much to get into halibut, and it is unfortunate that the TAC goes up and down like a roller coaster. I wish it wasn't like that, but that's the facts of life and the free market allows us the choice to jump in with our money when we think it may be a good investment. I don't harbor ill towards fisherman who were given IFQ initially. They took the time, the risk, invested in gear, equipment, took a gamble on fishing in the derby and so good for them.

Anonymous said...

IFQ's are a form of limited entry, but complicated with a twist of privatization. Instead of limiting the fleet (like salmon), the resource is limited by allocating it to individual people. There is no competition, no skill and no finesse involved in catching fish that you already own; it's just a matter of catching them and to me and many of my friends it just doesn't feel right. I am involved in many different fisheries from the Bering Sea to the GOA and I see the same problems (actually worse) in the Bering Sea crab fisheries. Essentially, by jumping through the right loopholes we (the people catching the crab, halibut, etc.) are helping the same people that implemented these programs retire, and their not just getting by. They're laughing all the way to the bank as they receive their checks in Arizona, Hawaii, etc. after each season. They are reaping the benefits of someone else's labor which was never how the commercial fisheries operated. We are the morons for perpetuating this theft of Alaskan resources because we have to make a living, whether we agree with or not.