Anchorage Daily News

It is hard for me to see how the Alaska salmon troll fisheries will survive much longer in anything like a traditional form unless fuel prices fall dramatically.

With fuel prices even near where they are today, many troll fishers might soon be at the end of their lines, so to speak.

As I noted in my Sept. 14 column, consumer resistance to higher salmon prices might soon become an important issue, but higher prices will nevertheless be needed to offset the higher fuel costs that trollers are paying.

How big a problem is this? That depends on your point of view. From the aggregate Alaska economic point of view, not much.

Last year there were only 740 power-troll permits that were actually fished, of which 621 were owned by residents. That is about 0.2 percent of the number of nonagricultural jobs in Alaska that year. Gross revenue, before deduction of operating costs, was about $22 million.

So if the troll fishery disappears, or at least virtually disappears, hardly anyone will notice, unless, of course you happen to be a troll fisherman. From the point of view of those whose lives are intimately bound up with fishing, the demise of the fishery will mean much, much more.

Let me give you some numbers that you might not be aware of. They might help to frame the issue.

Average gross revenue for power trollers last year was just over $35,000.

From that amount one must deduct fuel costs, equipment and vessel maintenance, moorage fees and other assorted costs.

The $35,000 received on average represents a drop of just about 20 percent from 2006 and explains in part why the average price of power-troll limited-entry salmon permits has begun to fall in recent months. The downward trend in permit prices suggests a worsening situation.

Some rough data that I have seen show that operating costs absorb at least one-half of the average power troll fisher's gross revenue.

Given that the average vessel has a crew of at least two, the captain and a deckhand, it follows that the average captain and deckhand split something less than $18,000 last year.

Not much of a reward for the effort and risk involved.

I did a little statistical analysis of the way in which limited-entry permit prices react to average king and silver salmon prices.

For every 10 percent change in the average price received by the fisherman, limited-entry permit prices change about 8 percent in the same direction after two years.

In 2007 the average price came in at $1.81 per pound and the average permit sold for $36,200.

One way of looking at the effect of higher fuel costs is to treat them as a drop in the average price received by the fisherman.

If the average price calculated in this way drops back to the $1.32 per pound received in 2005, permit prices can be expected to fall to about $28,000, thereby bequeathing trollers an $8,200 capital loss.

So now you know why the salmon troll fishery is on the ropes and also why the United Fishermen of Alaska are looking for fuel subsidies from the state and federal governments.

Every benefit really does have its costs.

David M. Reaume is a Washington state-based economist who was based for many years in Juneau. His opinion column appears every fourth Sunday.

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