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Judgement rendered: finfish farming banned.

Judgement Rendered

IT'S THE RANGE WARS ALL OVER again. The cowboys and their free-spirited brand of high plains economics are pitted against the fenced-farm sodbusters who would carve the frontier into parcels. Only this time the battle isn't taking place on the wide sea of wheatgrass and yucca that makes up the Great Plains. It's the high prairies of the North Pacific we're talking about, the bays and estuaries along Alaska's 47,000 miles of shoreline, plus a few freshwater lakes thrown in for good measure.

For the past two years, Alaska's lee waters and legislature have been the fighting ground for the fish farming debate. Alaskans have been trying to decide if it should be legal to raise fish in pen farms in Alaska. In the recent legislative session, one group of 200 or so fish farm supporters and a few legislators supported the idea. Most of Alaska's commercial fishermen, and a few more legislators, didn't. This time, the sea cowboys won.

Finfish farming was permanently banned in Alaska this year. Culture of mussels, oysters and other shellfish was not included in the ban. A compromise that would have allowed for freshwater farming of non-salmon species in inland tank farms was taken hostage by a Senate committee. It died without getting any air. But the legislature said it may consider allowing freshwater farming in the future.

It may seem cavalier to speak of an issue that would indelibly affect Alaska's fisheries in terms of sodbusters and sea cowboys. But many of the concerns that surround the fish farming issue in Alaska probably also should have been considered when the prairies a hundred years ago were fenced off and wild buffalo were replaced with domesticated Angus. Among questions asked:

How would fish farming affect the habitat for wild stocks? How would the corralling and concentration of great numbers of fish contribute to estuary pollution? What about disease control? And a more nebulous question: Does Alaska, provider of 40 percent of the nation's wild Pacific salmon, want to become known for pen-raised, antibiotic-fed fish?

"When you start putting money into finfish farming, even in upland tanks, you start to lose control over the biology of a region," says Ken Castner, executive director of United Fishermen of Alaska (UFA). "If we didn't have so much to lose, everybody's attitude would be very different. But we do have the largest salmon runs in the world here."

UFA has been one of the strongest opponents to fish farming in Alaska. The group is concerned about damaging the wild stocks of Alaska, and doesn't want to see the state turn its most important fishery into a biological boondoggle.

Says Castner, "UFA believes that some of the biggest mistakes ever made by mankind have been fairly reckless transferral of species from one habitat to another in the belief that it was going to help economically. There's just no going back on some of these biological mistakes. And if that's protectionist, we have a real good reason to be protectionist. We have $2 billion invested in the salmon industry in this state."

UFA and other opponents of fish farming don't want to see Atlantic salmon or other non-local species imported to Alaska for farming. They fear what would happen if fish escaped from tanks or net pens and interacted with the wild species. But there are objections to farming Pacific salmon, too, because of the possibility of disease among fish who spend their lives crowded into pens where diseases can spread quickly.

Rodger Painter, executive director of the Alaska Mariculture Association, says his group has conceded defeat for salmon farming in Alaska. "For all practical purposes, the issue of salmon farming in marine waters is settled. The fishermen simply have too much political power for that ever to occur. What we want to do is to be able to work with other species. We do hope one day to be able to convince the legislature to allow us to work in marine net pens. That could be with non-salmon species," he explains.

Painter, a former commercial fisherman from Ketchikan, used to be the head of UFA. It was in the 1970s that Painter started studying finfish mariculture. "It caught my interest, and it came attendant with a growing frustration with the seafood industry in Alaska for being so conservative and so far behind what's happening in the rest of the world in marketing, and particularly in quality," he says.

"I was also frustrated with the whole attitude of fishing as a lifestyle rather than a business. I saw aquaculture as a way to continue the seafood industry but to approach it from a different angle."

Painter says he understands the opposition to salmon farming, but feels the legislature went too far banning farms for non-salmon species. "It's totally unjustified. The ban on upland tank farming is a tremendous overreaction to the concern that commercial fishermen had about net-pen rearing of salmon. I believe that Alaska is the only place in North America that does not allow upland tank farming. It's probably one of the few places--if not the only place in the world--that has that kind of prohibition," he says.

But many salmon fishermen fear that allowing one kind of fish farming would just open the door for salmon farming in the future. Now they can breath a collective sigh of relief that the doors are secured.

Here, in a nutshell, are the concerns surrounding fish farming:

Health of wild salmon stocks. Opponents of farming fear that salmon could escape and introduce diseases and undesirable genetic traits into the wild stock. A problem for Norwegian and British Columbian salmon farms, disease has resulted in hundreds of tons of fish being destroyed.

But Norway doesn't have abundant wild salmon stocks to worry about, as Alaska does. Until more is understood about fish diseases and how they breed in farm situations, fishermen want to keep farms out of Alaska's waters.

Fish farm supporters say Alaska's productive hatchery program has handled the disease problem successfully so far. State-supported hatcheries also encounter diseases, and sometimes have had to destroy large numbers of fish. But those diseases have had little effect on the wild stocks, even though hatchery fish are released into the wild. Salmon farmers elsewhere have said that most diseases are introduced into the farm from wild stocks rather than the other way around.

Little is known yet about the genetic interaction between wild and farmed salmon. Most farmed salmon, including that in British Columbia and Washington, is Atlantic salmon, which is really a kind of trout and not related to Pacific salmon. While nobody's said it's impossible for the two to interbreed, most biologists will tell you it's pretty unlikely.

Pollution of habitat. Fish farmers say they are of necessity more concerned than anyone about the habitat surrounding a farm. If too much anaerobic material (settled feed or feces, for example) collects on the sea bottom, the fish in the farm would be the first to be harmed. Strict regulations could ensure maintenance of water quality standards at Alaska fish farms, proponents believe.

The Marine Environmental Consortium in Washington state estimates that the waste generated by a two-acre salmon farm would equal that of a town of 5,000 people. Waste buildup under salmon farms in Washington and British Columbia, even just a few inches of it, in many cases has decreased the diversity of plants and sea bottom creatures nearby. Fish farms keep water circulating through the pens to flush away waste materials, but usually these materials are just dispersed into the surrounding waters or into the water table.

Profits would leave Alaska. It takes $1 million to $2 million to start a 250,000-ton fish farm, say British Columbia farmers. About 40 percent of the investment capital in B.C. farms came from Norway, and some of those Norwegian investors insist that their B.C. farms use Norwegian equipment, technology and supplies.

Farm opponents protest, "Why should Alaska invest in an industry that will send most of its profits Outside?" Many fishermen and processors are struggling to develop value-added products to keep seafood profits in Alaska. Alaskans are tired of running a raw material pantry for Outside interests, they say.

A three-year-old study by the House Research Agency said it would cost only $342,000 to start a mom- and pop-sized salmon farm. Fish farm supporters emphasize more strongly, though, that salmon farms would create year-round jobs, bring in year-round income, and keep salmon processing plants open through the winter.

One expert estimated that a 20,000 ton-per-year salmon farming industry in Alaska would create 1,900 direct jobs, a $48 million payroll, and $130 million in gross sales. An industry that size also would consume 100,000 tons of raw fish processing waste, which would benefit all Alaskan processors.

The regulatory burden. Fishermen are concerned that money would have to come from the already-underfunded Alaska Department of Fish and Game to oversee a fish farming industry. To adequately protect the biosphere from diseases or pollution from the fish farms, strict regulations would have to be enforced.

Argues UFA's Castner, "Fish and Game already is underfunded by about $4 million. We're not even funding the department that does have a proven track record as far as fish management. We thought that any money from this new industry would just come out of that budget. It didn't seem like there was much willingness to expend the funds to regulate this new industry." Fishermen would feel that they're indirectly paying for a fish farming industry that competes with them, he adds.

Fish farm proponents, however, say the industry could be self-sustaining, and fish farmers could pay a tax that would cover the cost of developing and enforcing regulations.

Market competition. The world salmon market has many segments. Farmed and wild salmon compete directly in some of them and don't compete at all in others. For example, East Coast restaurant-goers prefer the mild-tasting farmed Atlantic salmon. On the West Coast, most people prefer the stronger flavor of wild Pacific salmon.

In Europe, fresh farmed salmon from Norway has an obvious advantage over frozen salmon from Alaska. But wild salmon producers already face so much competition from farms-190,000 metric tons of farmed salmon were produced last year, most of it in Norway and Chile--that an increase in U.S. production would not tip the balance too much.

Marketers of Alaska seafood say their biggest advantage is the image of fresh, wild salmon from the cold, pristine waters of Alaska. They don't want to see this image diluted to include farmed species. And they don't want the state of Alaska adding its marketing clout to the increasing force of fish farmers who represent decreased profits and increased competition to fishermen.

The question of market competition is a barbed one and bears looking into. In 1989 the world harvested 970,000 metric tons of salmon, pen-reared and wild. That means there were 780,000 tons of wild salmon, of which Alaska produced 320,000 tons (an all-time record).

There's a glut on the salmon market right now, and prices are relatively low. Fish farmers have the advantage: They can harvest their fish whenever the market needs them, regardless of season.

They can deliver fresh year-round. They can afford to sit out the summer season and wait for fresh prices to rise. But fishermen know the value of their trump card, too--nothing beats the flavor of an ocean-caught Pacific salmon.

In some markets, the competition is tough, says Ken Talley, editor of a weekly fish marketing newsletter Seafood Trend. "There's no doubt that farmed salmon affects Alaska salmon on the European frozen market," he says.

"Five or six years ago, wild Pacific salmon had 80 percent of the European smoker market, and farmed Atlantics had 20 percent. Now that's completely turned around. What really turned the tide was when Pacific prices went sky-high in 1988. Now that prices are back down again, Pacifics may gain some of that market back. But I don't think anyone expects that wild Pacifics will ever regain the dominance they had before."

Japan is the top world market for salmon, though, and here Pacifics are king. Though 3,000-4,000 tons of farmed salmon were imported into Japan last year, they went to a specialty market that didn't compete with wild salmon.

Says Talley, "No matter how you inflate or deflate the numbers, wild still is the predominant category of salmon. The problem is that farmed salmon compete directly against chinook and cohos, most of the pinks are canned, and in that segment there's probably more farmed salmon than wild. The competition is real. Even in the frozen markets, fresh farmed Atlantics still affect the prices just because they put parameters on prices in every market."

To gain an edge, fish farmers in Norway are developing value-added products that they will introduce to the U.S. market this fall. At recent food shows, several producers introduced skinless/boneless salmon fillets, ready-to-cook items, and other further-processed salmon. But if producers of Alaskan wild salmon can keep up in the value-added market, they may have an advantage.

Atlantic salmon are fattier, have a shorter shelf-life and are likely to go bad quicker than Pacific salmon. That's an important market advantage for the wily wild salmon.

With prices down around producers' ankles, fish farms in British Columbia have proven to be less profitable than they'd hoped; several are on the verge of bankruptcy. "For right now, I don't think it makes any difference whether Alaska bans salmon farming or not. Anybody who went into salmon farming right now would be stupid, because there's so much salmon on the market," says Talley.

Other Species? Fish farming isn't limited to salmon, though, and there's the rub. Plenty of other species can be farmed: cod, halibut, blackcod, flatfish, and the lovely Arctic char, for example. Char is a northern Dolly Varden. Some live in the sea and migrate into riverbeds to spawn, as salmon do; some live their lives in cool, deep lakes where their ancestors got stuck after the last Ice Age.

Arctic char are successfully farmed in freshwater tanks in Whitehorse, Yukon Territory, and a few Alaskans hoped to set up tank farms for char in Fairbanks and Southeast. The Fairbanks operation was stymied in the permitting process. The Southeast project, run by Thorne Ferguson (see accompanying article) was dealt a death blow by the legislature's fish farming ban.

Castner says that UFA probably would not object to upland tank farms raising Arctic char. "We'd want to see a demonstration of the regulations they would use to protect the biological balance. But I believe there probably will be an exception (to the ban) for that kind of activity," he explains.

According to Painter, there are no developed markets for farmed species other than salmon, trout and catfish. "When salmon is eliminated from the equation, most of the species that have ready-made markets are eliminated. That does limit the opportunity. And heavy regulations would increase the costs of operation up here. So just how viable non-salmon fish farming would be remains to be seen," he says.

Mussels, oysters, kelp and sea urchins were not affected by the finfish farming ban. There are several small-scale mussel and oyster farms in Southeast and Southcentral Alaska. Prince William Sound hosts a few kelp pounds, where giant kelp is set up to attract spawning herring. The kelp is then harvested after it's covered with herring roe. The Japanese market eats this stuff up.

The Roadblocks. Fishermen may be outraged at the idea of salmon farms encroaching on their markets and marine estuaries. But would-be fish farmers are equally miffed that one industry could put the brakes on a competing industry at a time when Alaskans are seeking economic diversity.

"This issue has been treated like a fishing issue, but it's really an economic development issue," says Painter. "In essence, one industry has vetoed a potential competitor. I think that's a very dangerous precedent. I also think it doesn't reflect a real wise, sound management of the state's natural resources for the maximum potential benefit."

From a marketing standpoint, industry analyst Talley notes, "It's a little ridiculous. I don't believe in banning anything. I believe that independent forces should work in the marketplace. Alaska claims to be this rugged individualist, when they're trying to keep somebody from competing with them."

But Castner says even more outrageous is the idea of starting fish farms in Alaska before all the questions are answered. "What this ban really means is that if there's ever a fish farming industry in Alaska, it's going to have to be well thought out and justified," he adds.

"In a lot of the testimony in favor of fish farming, people said don't regulate us out of the business. But there's a high degree of regulation needed to protect the other ecosystems. People have said, 'Let the economic free market express itself, let us try and fail.' But trying and failing in this thing could cost us a lot more than money."
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Title Annotation:includes related article
Author:Holmes, Krys
Publication:Alaska Business Monthly
Date:Jul 1, 1990
Words:2855
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