CDQ: Aleutian Pribilof Island Community Development Association

Hello Fishies!

Today I write to you with more definitive information regarding the CDQ system. As I noted in a prior post, there are six of these entities. I would like to explore each of them, some more in depth than others. I believe that as we look at the Aleutian Pribilof Island Community Development Association you will find them fascinating.

Each of these CDQ's must render a quarterly report and these are public documents available both from the state and on the internet. Please note that there are two versions, the public one that we have access to, and another, confidential report, that we do not. As these CDQ's are a governmental enterprise, and the government's actions should at least be transparent, if not conducted in public, I have some serious concerns.

The bulk of my gleanings come from the first quarter report of 2006 which was made available in May of 2006:

APICDA's employment goal for 2006 is to provide at least 80 jobs for APICDA residents. By
the conclusion of the first quarter, a total of 32 job positions (32 discrete individuals) had been
filled by APICDA residents, generating wages of $284,473 – over $8,890 per job. Based on
population, we employed just over seven percent (6%) of APICDAÂ’s community members

during the first quarter of 2006.

The above figure represents an average. They entered the 32 jobs into the wages figure and have given us the average. I wonder how many of these jobs are full or part time, family wage or year round jobs.

During the first quarter, sixteen individuals attended various vocational education or specialized training programs. APICDA invested $14,921 in vocational education scholarships for its residents this quarter.

Forty -one individuals used APICDA higher education scholarships during the first quarter of the year. Each scholarship is capped at $5,000 for the school year. A total of $102,500 in higher education scholarships were disbursed in the first quarter.

To whom? Where? Are these going to be degrees or skills that will be brought back to the comunity? Is the money for living expenses? Too many questions on this one!

The APICDA board, subsidiary boards, and committees were quite active in the first quarter. These various boards and committees conducted a total of ten meetings over the quarter.

Ahhh yes. Meetings...in the community or some where else?

Management and staff spent approximately 55 "person days" in the APICDA region in the first quarter. Project development, project maintenance, and community outreach were some of the activities/purposes for their trip(s) to the APICDA communities.

Excuse me. You don't live there??

It gets much more interesting. Don't forget that all the starting monies are from seafood, and there is a heavy presence in the processing and fishing vessel ownership.

Stay tuned!

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Community Development Quota

Hello Fishies!

Today's topic is a continuation of my last post regarding the government allocating the fisheries to itself.

From the Alaska Department of Commerce:

The Community Development Quota Program began in December of 1992 with the goal of promoting fisheries related economic development in western Alaska. The program is a federal fisheries program that involves eligible communities who have formed six regional organizations, referred to as CDQ groups. There are 65 communities within a fifty-mile radius of the Bering Sea coastline who participate in the program.

The CDQ program allocates a portion of the Bering Sea and Aleutian Island harvest amounts to CDQ groups, including pollock, halibut, Pacific cod, crab and bycatch species. There are no significant amounts of salmon allocated. Based upon its evaluation of the Community Development Plans submitted by the six CDQ groups, the State of Alaska and the National Marine Fisheries Service periodically allocates percentages of each species to CDQ groups. The CDQ program was granted perpetuity status during the 1996 reauthorization of the Magnuson-Stevens Act.

The program was modeled after the Alaska Native Claims Settlement Act (ANCSA). However, the CDQ program was created with three primary differences:

• Government oversight of all business activities
• Community based shareholders instead of individual shareholders
• Requirement that all investments be fisheries related

The six CDQ groups are:

• Aleutian Pribilof Island Community Development Association (6 communities)
• Bristol Bay Economic Development Corporation (17 communities)
• Central Bering Sea Fishermen's Association (1 community)
• Coastal Villages Region Fund (20 communities)
• Norton Sound Economic Development Corporation (15 communities)
• Yukon Delta Fisheries Development Association (6 communities)

And now for the spin:

Since 1992, over $110 million in wages, education, and training benefits have been generated for over 25,000 residents. As of 2003, the asset value of the six CDQ groups exceeded $260 million. Since 1992, over $500 million in revenues have been generated. The CDQ program has been successfully contributing to fisheries infrastructure in western Alaska by funding docks, harbors, and the construction of seafood processing facilities. The CDQ program has allowed CDQ groups to acquire equity ownership interests in the pollock, Pacific cod, and crab sectors which provide additional revenues to fund local in-region economic development projects, and education and training programs.

At first glance this sounds oh so lovely doesn't it? But consider this: would those dollars have better spent in the private sector? Government's inability to manage almost anything is legendary. This writer is of the opinion that in the right hands, that $110 million would have at least been doubled. Private investment and ownership always trumps any attempt at socialism.

Stay tuned!

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Community Protection Measures

Hello Fishies!

What follows is another slice of the crab pie where governmental entities actually OWN some of the IFQ! Unfortunately this has been upheld from it's earlier implementation in the halibut and sablefish IFQ.

What are Community Protection Measures?

These are primarily limits on the amount of PQS and IPQ that can be used outside of communities with historic reliance on the crab fisheries, which means that more than 3% of a crab fishery was processed there. There are nine Eligible Crab Communities (ECCs): Adak, Akutan, Unalaska/Dutch Harbor, False Pass, King Cove, Kodiak, Port Moller, Saint George, and Saint Paul. The three main protection measures are:

“Cooling off” Period
Right of First Refusal (ROFR), and
QS Purchase

What is the “Cooling Off” Period?

Until July 1, 2007, PQS and IPQ based on processing history earned in an ECC generally cannot be transferred from that community. The use of IPQ outside the community during this period is limited. Ten percent of the IPQs that are issued for a crab QS fishery or 500,000 pounds (226.7 mt), whichever is less, may be leased for use outside that ECC. The amount of IPQ that may be leased outside that ECC will be divided on a pro rata basis among all PQS permit holders issued IPQ for use in that ECC for that year. Four crab fisheries would be exempt from the cooling off provision: Eastern and Western Tanner crab, Western Aleutian Islands red king crab, and Western Aleutian Islands golden king crab.

Are there any exceptions to the “Cooling Off” restrictions?

Yes, if there is an “unavoidable circumstance” then the restrictions may be lifted for a specific processor in a specific ECC. The definition of an “unavoidable circumstance” is provided in the regulations.

What is Right of First Refusal (ROFR)?

Before NMFS issues any PQS, an ECC may establish a contract with that PQS holder which guarantees the ECC first rights to any PQS proposed for sale for use outside that community. Some requirements exist for IPQ as well. ROFR does not apply to Adak.

Can communities purchase QS?

Each ECC can purchase QS and lease the IFQ to community residents. Communities would need to submit an annual report to NMFS if they purchase QS.

What happens to CDQ crab?

The allocation to CDQ* groups increases to 10% of the TAC for the rationalized crab fisheries, except for Western Aleutian golden king crab, which has a 10% allocation specific to the community of Adak. This adds two new CDQ species, Eastern Aleutian golden king crab and Western Aleutian red king crab. The Norton Sound king crab CDQ allocation remains 7.5% of the TAC.

What specific community measures apply to Adak?

(1) Cooling off period applies.
(2) ROFR does not apply.

(3) Special allocation of 10% of the Western Aleutian golden king crab TAC. This allocation goes to an entity formed by the residents of Adak, or the Aleut Corporation if an entity doesn’t form for the first 2 years only. This allocation must be used for fishery development in Adak.

(4) QS can be held and IFQ leased to residents.

(5) 50% of the Western Aleutian golden king crab must be processed in Adak.

What specific measures apply in Non-CDQ ECCs?

Cooling off period applies.
Non-CDQ ECCs may enter a ROFR contract with a processor before the PQS application is submitted to NMFS. The governing body for each non-CDQ community must select the ECC entity to represent it for purposes of ROFR. The governing body of each ECC is:

Unalaska: City of Unalaska
King Cove: City of King Cove & Aleutians East Borough
Port Moller: Aleutians East Borough
QS can be held and IFQ leased to residents.

What specific measures apply to CDQ ECCs?

Cooling off period applies.

CDQ EECs may enter a ROFR contract with a processor before the PQS application is submitted to NMFS. The governing body for each ECC is the CDQ group for that community:

Akutan, False Pass, St. George: APICDA
St. Paul: CBSFA
QS can be held and IFQ leased to residents.

What specific measures apply to Kodiak?

Cooling off period applies.

The ECC entity of Kodiak may have a ROFR contract with any processor in any community in the North Gulf of Alaska before the PQS application is submitted to NMFS. The City of Kodiak and Kodiak Island Borough select the ECC entity.

QS can be held and IFQ leased to residents.

Is the CDQ crab fishery part of the Program? Do I need to have IFQ to fish in the CDQ fishery? How does IPQ relate to the CDQ crab fisheries?

Except for the CDQ fishery for king crab in Norton Sound, all CDQ crab is "rationalized" crab. However, you do not need Quota Share (QS) or IFQ for CDQ crab fisheries. You must fish under an authorized CDQ Group's CDQ crab allocation and all crab must be delivered to a Registered Crab Receiver (RCR). An RCR does not need IPQ to receive CDQ crab.

Is your head hurting yet? Sorry but we are just scratching the surface of this insane plan.

Stay tuned!

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*Community Development Quota which will be covered next.

Crab & Artichoke Croissants

Greetings Fishies!

This is another recipe that is entirely too tasty for you to miss!

1/3 pound crab meat
1/3 cup mayonnaise
¼ teaspoon dill
1 clove garlic, minced
Dash cayenne pepper
2 tablespoons chopped parsley
4 ounces cheddar cheese, shredded
1 (2 ¼ oz.) can ripe olives, sliced
1 artichoke heart, drained and cut up
3 croissants

In a small bowl, mix together the mayonnaise, dill, garlic, cayenne pepper and parsley. Add the crab, 3 ounces of the shredded cheese, artichoke heart and olives. Split the croissants in half, horizontally. Place them on a baking sheet, cut side up. Spread each half with crab mixture, then sprinkle on the remaining cheese. Broil the sandwiches about 4 to 6 inches from heat, until topping is melted, about 3 to 5 minutes.

Remember to check this blog's archives and-

Stay tuned!

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Who is the Fishwife?

Hello Fishies!

First let me thank you for taking the time to read and respond to this blog. In turn, I do read ALL of your different forums - from the Deadliest Catch, My Space and Fish-n-Chat to the F/V Northwestern. (More on that topic coming soon). While I do get a kick out of your speculation as to my identity, none of you know me. From the very beginning of the show I have been silent and this blog is the vehicle that I have chosen to get information out to you.

Yes I am a fishwife as defined in the very first blog post. I know the sides of the industry that never get mentioned: processor politics, government/enforcement and what fishermen and their families really are like. It is my intention to pass items along to you and help to educate you my dear Fishies, while dispelling rumor and inaccuracies. Rest assured that I will never ever knowingly post anything about the industry that is false or misleading.

Don'’t forget that true Alaskan King Crab is now on the market!

Stay tuned!

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Time Bandit Update

Hello Fishies!

This just in - at the last minute the Hillstrand brothers did lease some king crab quota. What this does or does not do for their standing in the Deadliest Catch I don't know. What I do know is that the brothers themselves crewed. What their real bottom line is remains to be seen.

Stay tuned!

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Permits and Licenses

Hello Fishies!

Here is another installment in our ongoing struggle to understand the Bering Sea crab fishery.

What Federal and State Permits do I need for CR Crab fisheries?

• Owners of vessels used in CR Crab fisheries must hold a Federal Crab Vessel Permit issued by NMFS, and use a VMS.* Vessels must be U.S. Coast Guard documented or State-registered, and also must have an ADF&G Number (issued by the Alaska Commercial Fisheries Entry Commission (CFEC).
  

• If you will be retaining any groundfish harvested from Federal waters (even Pacific cod caught for your own bait), the owners also must obtain a Federal Fishery Permit. Note that any harvest of "minor species" (scarlet king crab, grooved and triangle Tanner crabs and golden king crab from the Bering Sea) requires that the vessel be named on a valid Federal License Limitation Program (LLP) crab license, unless exempt from that requirement.
  

• CR Crab harvesters: Sellers of product (individual IFQ permit holders or their Hired Masters landing CR Crab) must each have a current CFEC permit for specific king crab fisheries, and for Tanner crab fisheries. An individual fishing on behalf of an IFQ permit holder other than him/herself is a Hired Master; and must be approved by NOAA Fisheries for the specific permit and vessel on which (s)he will fish the Permit holder's IFQ.
  

• CR Crab receivers/buyers/processors: To receive raw CR Crab from harvesters, and owners or operators of vessels that catch and process CR Crab at sea, must have a Registered Crab Receiver (RCR) Permit. Note that a business receiving crab on behalf of the actual crab purchaser (either for actual custom processing or as a receiving service) also must be a RCR. Additionally, RCRs receiving IFQ crab harvested under a Class A IFQ permit must have IPQ. Note that an RCR may only debit its own IPQ account(s).

• CR crab purchasers (which may be different from crab receivers): the State of Alaska requires that all buyers of seafood products obtain an annual Intent to Operate license, commonly referred to as the ADF&G Processor license code.
  

• Other State requirements (such as fishery registration or hold inspection) may be in effect. Please contact the local office of ADF&G in Dutch Harbor for specific information.

I especially like that last line...other requirements may be in effect. How would you like to call several government agencies every time you went to work?

Stay tuned!

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*Vessel Monitoring System - more on this little gem at a later date.

The F/V Time Bandit

Hello Fishies!

I am still hard at work trying to verify some most interesting information regarding one of the boats in the Deadliest Catch....here is what I know right now:

Some time back there was speculation brought on by a news story about the TimeBandit. That story indicated that both the boat and all of it's crab quota was for sale. None other than the Hillstrand brothers themselves vigorously denied that the boat or the quota was available.

If my information is correct, and I believe that it is, the Hillstrand brothers sold the bulk of their king crab quota. This writer can not argue with any business decision that some one makes. However, I most certainly would have told my crew well in advance of their arrival in Alaska.

The current crew of the Time Bandit is the three Hillstrand brothers plus one deck hand. The rest of the crew are out of jobs. It now makes perfect sense as to why the Discovery Channel chose to use them as a minor boat.

Stay tuned!

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Use Caps - Or Puttin' a Lid on It

Hello Fishies!

Tonight's topic is a bit on the short side, bet you are glad of that! By the time you get to the end of the "lesson" you will be grateful. And let me remind you here, that this information is directly from the government, and supposedly put into a language we can all easily understand....mmmmhmmmm. Alrighty then!

What are use caps?

Use caps limit the amount of QS and IFQ a person can hold, to prevent excessive share consolidation or control. The type of use cap that applies differs on the type of person that holds the QS or IFQ. Vessels use caps limit the amount of IFQ that can be fished on a vessel.

How are use caps calculated?

Use caps are calculated by adding up all of the QS or IFQ held by that person and their percentage of direct or indirect ownership in any entity that holds QS or IFQ. This is called the "individual and collective" rule and is similar to the way that we calculate use caps in the halibut and sablefish IFQ program.

As an example, for an individual who holds 100 pounds of IFQ and has a 5 percent interest in a company that holds 100 pounds of IFQ, the amount of IFQ that person would be considered to hold for use cap calculation is 100 pounds (his personal holdings) plus 5 pounds (5% of 100 pounds - his ownership interest in that company).

However, for a corporation, partnership, or other non-individual entity that holds QS or IFQ and also holds PQS or IPQ, NMFS uses a different calculation method - a 10 percent threshold rule. In this case, the use cap is equal to all of the QS or IFQ held by that person and all of the QS or IFQ held by any entity in which that non-individual has a 10 percent or greater direct or indirect ownership interest. As an example, a corporation that holds 100 pounds of IFQ and has a 15 percent interest in a company that holds 100 pounds of IFQ, would be considered to hold 200 pounds of IFQ for use cap calculation in 100 pounds (the corporations direct holdings) plus 100 pounds (the company's holdings). NMFS modified this calculation method from the proposed rule to better meet Council objectives.

Stay tuned - there will be some most interesting information coming out of the Bering Sea shortly. I won't engage in speculation and am awaiting confirmation.

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Processor Quota Share (PQS) and Individual Processing Quota (IPQ)

Greetings fishies!

The topic for tonight is the egregious and provision called Processor Quota Share (PQS) and Individual Processing Quota (IPQ). This little gem of an idea is what keeps the fishermen caught by the shorthairs. It is what makes them head to sea in dangerous weather - to make that processor imposed delivery deadline. Safer? Uh yeah right - I don't think so.

What is PQS?

PQS is a long-term privilege to receive a percentage of the crab harvest in a fishery. PQS annually yields IPQ.

What is IPQ?

IPQ is the pounds of crab that PQS yields each year. IPQ is needed to receive any amount of crab harvested under a Class A IFQ permit. The amount of IPQ issued every year is equal to the pounds issued as Class A IFQ.

How do I get PQS?

NMFS issued PQS to qualified applicants that submitted an application BEFORE the application deadline. Applications were accepted from April 4, 2005, until 5:00 p.m. Alaska local time on June 3, 2005. To receive PQS now you must obtain it by transfer from another PQS holder.

How do I get IPQ?

By August 1 each year a PQS holder must submit an application for IPQ to NMFS. All required fees and data reports must be submitted before NMFS issues you IPQ. If you do not hold PQS, you can receive IPQ by transfer. In addition, NMFS will not issue IPQ to any PQS holder that is required to participate in the Arbitration System until the Arbitration System requirements have been met.

Do I need IPQ to process crab?

No, you can receive crab harvested with Class B IFQ, CPO IFQ, CPC IFQ, and CVC IFQ (before July 1, 2008) without IPQ. You can also receive crab harvested under a CDQ allocation without IPQ. You must have IPQ to receive crab harvested with Class A IFQ. Anyone who is receiving crab (whether processing or not) must have a registered crab receiver (RCR) permit. That permit is necessary for data collection and fee assessment. That permit is available through NMFS (but will only be issued if fee payments and reporting requirements have been met).

I know, I know fishies, but you really do need to know this stuff.

Stay tuned!

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