Sunday, March 19, 2006

"Processors" deserve a return?

The Gubernatorial candidates at the recent ComFish debate all agreed on one thing, that "processors don't qualify for quota shares."

In my 50 plus years in the Alaskan fishing business, I've never seen a fish demonstration before. Kodiak had one last week to show the Gubernatorial candidates and the Administration they are serious about not letting "processors" and the ADF&G ruin their livelihoods.

The 300 people in attendence broke into applause at that point. But one candidate went on to say about processors, "They deserve a return but we have not picked the right method." Another one said "fishermen and processors should work together." One quick comment on the latter quote. There has been 125 years of opportunity for them to work together.

You aren't going to legislate, or force, fishermen and processors to work together in the Gulf or the salmon fisheries, especially by using the State Troopers or Federal RAM Division folks. Since none of the candidates said anything more than what we've been saying for a long time in AlaskaReport, we are like the fisherman who stood up and said that "they are still in a wait and see mode." Since none of the candidates could speak on fisheries without setting off at least one alarm bell, we'll just have to look into the records for the answers. Not to worry boys, we'll just keep on educating them. A bunch of you readers of this column have passed on invaluable intelligence too.

We know one thing, the current administration is still pushing to increase the "processors" return. I don't know if you can say "they deserve a return." What makes a processing plant owner any more deserving of a return than a boat owner. Nobody is talking about insuring a return for fishermen, crewmembers included. We have a free enterprise system that rewards good work. That ain't broke, so don't fix it.

I talked to a chef last week who said a big Alaska processor, who delivers seafood around Oregon, will drop off fish at the back of a restaurant and then just leave. The chefs will find it sometime later when they have to start looking for the delivery. You know, temperature abuse. That same company fired their president a couple of years ago for using the company plane to "fly his daughter to school and then back again."

Some of the other big plants are Japanese owned. You know one way they hide profits to justify low ex-vessel prices? They pay many hundreds of thousands of dollars to executives by sending checks to their relatives every month. Compensation to management of other processors runs into the upper six figures. Their lobbying arm, the Pacific Seafood Processors Association, has a lobbyist on the North Pacific Fisheries Management Council as Chairman, or maybe I should say Chairwoman. The last I saw, they were using about $3 million a year to get their point across. And I'm not even scratching the surface.

Trident just bought a division from one of the worlds leading food conglomerates, ConAgra. So, this all begs the question, do the "processors" need any more help? Especially when hundreds of fishermen are going broke. Last summer, 125 gillnetters in Southeast tied up for a few weeks in the middle of the summer. And the only options on the NPFMC table include "processor linkages"? Meaning you have to sell to the processor they tell you to sell to, and take it up the tailpipe for the priveledge.

Another couple of examples, since so many politicians and community leaders don't have the hands-on experience to adequately deal with the "processor issue." First, keep your eyes open for future information on Abusive Transfer Pricing. As an aside too, there is one County Commissioner on the Oregon coast that now is saying that the local governments are going to have to speak up on fisheries management issues. He should know, he was an author of the MSA.

"Processors" aren't the shining knights they make themselves out to be when they donate to the local salmon derby or fisheries conference. And when you say "processor" make sure you make the distinction between the physical plant and the owner(s) of the equipment. The owners (the processors) change like musical chairs. Icicle Seafoods almost sold out entirely a little while back to a foreign corporation. The Brindels sold all their plants a few years ago. Norquest sold out to Trident, and on and on. If they want to "cooperate" let them ask for it, but I'd be willing to bet they will be content to get uninformed politicians to hand them exhorbitant returns on investment under the guise of "cooperatives" and "cooperation."

The current owners of processing plants would dearly love to get their hands on either quota shares, or second best, lock the fishermen into having to sell to them(linkages). It makes the value of their stock go through the roof. That is ALL they care about. Linkages have the following effect. The processor can then dictate any price. When too many go broke, they could just adjust the price to get the right number of boats of the right kind. Then they could finance boats for these survivors and then you're back to before limited entry, with the company owned fleets.

The first to be bumped off would be the small scale cod fishermen. And you could conceivably end up with salaries on the company boats like before the Depression. Now we're making progress. Not. Even though one attendee of the Debate said 98% of the audience was anti-rationalization, this Administration is all for it, so you can't wait to vote them out. Folks better write the NPFMC full bore and then maybe some honest staffer will tell us how all the comments stacked up. Remember the Pacific Council got 6000 nays and one yea on krill fishing and that killed that.

If anyone is thinking of getting ahead by helping or cooperating with the "processors", heed the old adage, "Be very careful what you wish for." You could get a genie out of your bottle that will be your worst nightmare. Just ask the Southwest Alaska Municipal Conference.