by John T. Koegler
(from Jersey Coast Anglers Association June 2004 Newsletter)
In the January 2004 issue of Saltwater Sportsman, Page 14, the magazine asks NMFS,
“Why are we still managing most of our fisheries primarily for the commercial sector?” Given the huge difference in the stated economic value difference between commercial valuation of $27 billion, and recreational of $50 billion, this was a great question. Rarely are anglers given an opportunity to read NMFS response to this important issue.
NMFS answer was: “Expenditures are not the correct way to measure economic impact of commercial vs. recreational fishing values….From an economist’s standpoint, value to the economy is really measured by the level of net benefits generated by the fishery resource, not the expenditures by commercial or recreational fisherman. Responding to your question, then, the higher level of expenditures by recreational anglers does not necessarily, on its own, support an allocation increase. Comparable estimates of net benefits for commercial versus recreation fishing are the best tool in determining which group should be allocated more of the resource.”
Was that answer hard to understand? Was the above a government smoke and mirrors reply? Can the commercial dollar values being used by NMFS be validated from their own reports to the Nation?
NMFS 2001 report states: “In 2001, U.S. commercial fisherman landed 9.8 billion pounds of fish and shellfish valued at $3.3 billion (ex-vessel).” This raised the question of how much of $3.3 billion is fish and how much is shellfish? NMFS commercial ex-vessels dollar amount for the entire U.S. was reported as $3,247,537,905 earned on the sale of 9,522,668,919 pounds of seafood. The finfish dollar totals were $1,478,845,546, or only 45% of the total. Atlantic Menhaden were included in this amount. They are an industrial fish and are processed into bone meal and fish oil. Its value is $102,635,632 which must be subtracted from the fish total. In addition, the biggest commercial finfish landing state is Alaska. Most do not consider Alaska part of their domestic fishery management. The commercial finfish sales for Alaska are $ 746,330,471 in 2001.
The math is as follows:
Total US commercial seafood ex-vessel sales $3,247,537,905. Minus commercial sales of all non-finfish sales $1,768,692,359. Total US commercial ex-vessel finfish sales $1,478,845,546. Less Atlantic menhaden industrial fish sales $ 102,625,632. Total US commercial ex-vessel finfish sales 1,376,219,914. Less Alaska commercial ex-vessel finfish 746,330,471. Commercial ex-vessel finfish sales in 49 states $629,890,443
The commercial ex-vessel finfish sales are $629,890,443 where the fishery management system allocates fish quotas between recreationals and commercials. This is less than 20% of the reported commercial values being used.
But a huge question remains: How can NMFS report a value-added valuation of $27 billion from domestic commercial seafood sales of less than $3.3 billion dollars?
The added dollar values are calculated using a multiplier to account for how money moves through the economy. Accepted economic theory limits this multiplier to 2 or less. This agrees with the January question that states, $30 billion of angler spending created an additional $20 billion in related expenditures. This is a value added multiplier of less than 2.
How can NMFS report a commercial value of $27 billion? $27 billion is 8.2 times the seafood value NMFS reported at $3.3 billion! As noted above, economists state that any “value added multipliers” used that are over 2 are invalid.
What is the correct commercial seafood valuation? Economists would state that no more than twice $3.3 billion or $6.6 billion would be appropriate. If only 20% of the commercial $6.6 billion of seafood dollars is finfish, then the corrected finfish value comparison is $1.3 billion commercial vs. $50 billion dollars for recreational fishing.
NMFS response to the question continues with: “Allocating fish between commercial and recreational sectors is never easy, especially given the large number of laws and regulations put in place to make marine fisheries ‘equitable’ to all users.”
Please note, when it comes to the subject of allocation, NMFS response uses fish, not seafood. But NMFS did not use finfish when it comes to value comparisons. They used total seafood value added dollars in their dollar value comparison.
There is a vast dollar difference between the estimated $1.3 billion “finfish only” dollars vs. $50 billion in recreational dollars. NMFS “fish only” valuation from their own report is $629,680, 443. Does not such a difference in dollar values mandate quota allocation revisions? Are not such changes required under the Magnuson/Stevens Act?
Is the ‘fair and equitable’ mandate in the Magnuson Act National Standard #4 the ‘equitable’ NMFS is referring to in their answer? The Magnuson Act states in National Standard #4: “If it becomes necessary to allocate or assign fishing privileges among various United States fishermen, such allocation shall be; (A) fair and equitable to all such fishermen; (B) reasonably calculated to promote conservation; and ( C) carried out in such manner that no particular individual, corporation or other entity acquires an excessive share of such privileges.”
The Magnuson/Stevens Fisheries Act also requires that the fisheries be managed for “The greatest overall benefit to the Nation, particularly with respect to food production and recreational opportunities.” (page 9 MS act)
The new Ocean report uses the same incorrect and invalid $27 billion commercial dollar values to support their changes. This report must also be corrected and changed.
This nation is governed by laws. The Magnuson/Stevens Fisheries Act is one of those laws. Clearly, recreational anglers are being duped by government using commercial fishery dollar valuations that have no basis in fact or in truth. Aren’t they totally ignoring the MSA as congress wrote it? It is time to fight!
NMFS answer stated that: “The industry contributed an estimated $ .6 billion (in value added) to the U.S. gross national product (GNP).” That was based on selling 9.8 billion pounds of seafood. The magazine article reported only 9.1 billion pounds of seafood sales. That explains the dollar difference between 28.6 billion reported by NMFS source and 27 billion used in the magazine question.
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