 Radio Script 2001 __________________ Insuring Alaska's Salmon Crop
STORY: Alaska is famous for salmon runs that set records one year, only to plummet the next. It's a natural boom-and-bust cycle about which fishermen have long complained, but until now couldn't really do anything about. That may soon change, as the U.S. Department of Agriculture—the same agency that helps farmers insure their crops against locusts, droughts, floods, and other disasters—looks to offer insurance to salmon fishermen in Alaska's Bristol Bay. Mark Herrmann is a fisheries economist at the University of Alaska Fairbanks. HERRMANN: "This has never before been applied to a wild fishery. If this were applied to Bristol Bay, it'd be the very first time." Herrmann and other university economists are conducting a feasibility study of the pilot insurance program. They'll hold a series of meetings with fishermen to explain the program and gather feedback from the seafood industry. HERRMANN: "The purpose of this is to protect against unforeseen run failures. It's to protect fishermen so they have at least some guaranteed income each year, and to more stabilize their income so they can make investment decisions." Herrmann says commercial fishing is too risky for insurance companies to offer protection by themselves. He says the federal government would have to subsidize both the premiums paid by fishermen and the overall costs borne by the insurance companies. Under the pilot program, fishermen could choose from several coverage options that have different premiums. Under one option being considered, all fishermen would receive basic coverage at a nominal fee in the event of a complete run failure. HERRMANN: "The catastrophic insurance is called the 50-55 plan. It will cover you once your run falls below 50 percent of what would be considered a normal run. Say if the entire bay or different districts come in at less than 50 percent. The damages would be figured on anything less than 50 percent of a normal run. And you would be covered at 55 cents on the dollar of what would be considered a normal price. So, if nothing came in, you'd be guaranteed about 27.5 percent of your normal income." John Fiorillo, vice president of Online Media for WorldCatch Inc., suppliers of seafood and a leading industry Internet information service, likes the idea of helping fishermen, but says there are lots of unanswered questions. FIORILLO: "It's just such a fresh program, the paint is still wet. It's tough to know what the program is going to look like." He says one of the biggest hurdles the USDA faces is defining exactly what constitutes a normal salmon run. FIORILLO: "My question is, so eventually will every wild-harvested species in the U.S. potentially carry this insurance? I would think you'd have failures every year in abundance all around the country, because fisheries are cyclical. Just because the crab fishery now is in what we would call the valley, I don't think it's a failure. It's a cycle. Some of the valleys are real dark, and deep, and scary. And some of the peaks are real high, and great, and mighty. So I get a little worried about redefining cyclical fisheries as failures or successes. Fiorillo also wonders whether crop insurance might actually hurt fishermen, by forcing those who can't afford the premiums to stop fishing. FIORILLO: "If this does become an insured crop, so to speak, is there any impact on a how a fisherman finances his operations? For a fishermen who doesn't buy the insurance, for example, is he limited then in his financing options for his operations? Does it become de facto mandatory at some point?" Last year, Congress mandated the USDA offer Bristol Bay salmon fishermen crop insurance in time for the 2002 season. Meetings to explain the program to fishermen in the Bristol Bay communities of Naknek and King Salmon are planned for mid-June. OUTRO: This is Arctic Science Journeys Radio, a production of the Alaska Sea Grant Program and the University of Alaska Fairbanks. I'm Doug Schneider. Audio version and related Web sites (sidebar at top right) Thanks to the following individual for help preparing this script:
John Fiorillo, Vice President, Online Media
Mark Herrmann, Professor Arctic Science Journeys is a radio service highlighting science, culture, and the environment of the circumpolar north. Produced by the Alaska Sea Grant College Program and the University of Alaska Fairbanks.
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