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NW Fishletter #285, March 1, 2011
 New Report Says WDFW Lowballed Value Of Commercial Fishing Industry
A new report says a 2008 study commissioned by the Washington Department of Fish and Wildlife undervalued the economic value of the state's commercial fishing industry by 25 times.
The new analysis, written by independent economist Hans Radtke, was commissioned by the Seattle Marine Business Coalition. Radtke is a well-known Northwest resource economist and former chair of the Pacific Fishery Management Council. He also served for nine years on the Independent Economic Analysis Board that advises the Northwest Power and Conservation Council.
His report, "Washington State Commercial Fishing Industry--Total Economic Contribution," takes a much more expansive view of the industry than the WDFW study, which was written by Sacramento-based TCW Economics.
The latest study pegs the industry's annual economic contribution at $3.9 billion, while the earlier study said non-tribal commercial fisheries contributed $148.3 million in personal income and 3,520 jobs in 2006.
The new study says the WDFW report left out some very significant elements, including personal income generated by commercial tribal fisheries ($260 million), other West Coast offshore fisheries for Washington-based vessels ($85 million), aquaculture ($60 million), and the value of Alaska distant-water fisheries to the state's economy--a whopping $3.5 billion.
The WDFW report said recreational fishing generated a larger share of impacts, supporting more than three-quarters of the 12,850 fishing-related jobs in 2006.
It also said sporties spent $904 million on food, lodging, transportation, and equipment, generating an estimated $424 million in net economic value (over and above expenditures), while the non-treaty commercial fisheries contributed an estimated $38 million in net economic value.
According to the WDFW report, the net economic value for recreational fishers "measures an angler's willingness to pay over and above actual out-of-pocket costs to fish." For commercials, it means net income.
The WDFW report acknowledged other important elements on the commercial side were not included. It said "this study focuses on the fisheries in Washington waters only," and noted "that it is not sufficiently comprehensive and the values are not estimated with adequate precision to warrant a comparative analysis of the two fisheries."
The report was commissioned during a time when sport and commercial groups were at odds over allocations of spring chinook in the Columbia River, with some sportfishing groups arguing that their activities should get more state support because they produced more economic value to the region than commercial fishing.
The earlier study was sparked by Gov. Chris Gregoire, who asked the state's F&W commission for it, "to allow us to fully educate the public on the importance of fishing," she said at the time. "I would like the Commission to summarize the economic benefit that our commercial and recreational fisheries provide the state. While sustainable fishing practices must be consistent with conservation needs of the fish, both fisheries have an important economic role, particularly in our rural communities."
The battlefield extended to a fight over one of Gov. Gregoire's appointments to the state's F&W commission in 2005. Commercial groups said it gave recreational interests the upper hand.
Washington and Oregon agreed that year to split the overall 2-percent impacts on Columbia River spring chinook by non-Indians a bit more in favor of the sport side--61 percent to 39 percent. Before, it was a 57-to-43 split.
In 1999, supporters of Washington's net ban initiative, I-696, lost another attempt to gut what was left of the state's commercial salmon industry, which spent $500,000 to defeat it. Commercial fishermen spent $1 million to beat a similar initiative in 1995.
I-696 would have ended all commercial fishing with nets in the state--except for a bait fishery that supplied sports fishermen.
In late 2009, Oregon sport groups began an initiative drive that would have outlawed the use of gillnets and tanglenets by non-Indian fishers, but it was later dropped.
According to a briefing document from the Coastal Conservation Association--which had nearly 3,500 members in Oregon at the time--the proposed law would have helped commercial fishermen with funding to transition from traditional net fishing to more selective fishing gear like beach seines or fish wheels.
Chris Philips, managing editor of the Seattle-based Fisherman's News, whose parent publishing group is a member of the Seattle Marine Business Coalition, said the coalition sponsored the new study after several stakeholders pointed out discrepancies in recent WDFW reports.
Philips told NW Fishletter that it's clear the agency has been massaging the numbers to make the sportfishing industry look better compared to the commercial sector. Radtke's new report should change that, he said.
In a Feb. 23 column, Philips wrote, "Radtke's study is a clear condemnation of the slipshod, albeit publicly funded, report on which Washington State bases its economic decisions."
Philips also said the state is guilty of sending mixed messages. In a 2009 report called "Fish, wildlife and Washington's economy," WDFW used 2006 data from NOAA Fisheries to estimate that Washington's commercial fishing industry generated about $3.8 billion in economic benefits. Using data from other sources, the state agency estimated that recreational fishing generated $1.1 billion, wildlife viewing generated $1.5 billion and hunting $313 million.
In its 2010 version of the report, WDFW said the commercial sector generated only $1.4 billion in economic activity, with sport fishing still producing $1.1 billion in activity. WDFW personnel did not respond by the time this story was posted.
However, a closer look at the data, and NOAA's own analysis, shows that the state had only counted commercial harvest and wholesale activity in its latest report, leaving out economic impacts of the entire retail sector's that were included in the 2009 report.
Economist Radtke said the numbers used by the state in its 2010 report are a better way at gauging the economic value, even though they are still far from complete.
"No responsible economist who does economic base modeling will include retail," he told NW Fishletter. "It just doesn't work." He cited the thorny problem of how to deal with imports at the retail level when about 75 percent of the seafood sold in the country is imported.
He said his analysis only includes harvest and primary processing. "I've gone round and round with NOAA about their numbers and asked them to explain. I've asked them to show me their model. They haven't."
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