Last chance? Cook Inlet setnetters look to buyback as a way to save the fishery

Editor’s note: This article is the second of a three-part series about the Upper Cook Inlet commercial fishery. Click here for the first part. The next article will be about the proposed closure of the federal waters to salmon fishing in Cook Inlet.

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In some ways, Cook Inlet’s East Side setnet fishery is the most desirable of commercial fisheries to get into: instead of having to fish remote sections of muddy beach, far from roads or towns, commercial fishermen can finish their sets for the day, jump up to the top of the bluff, and go to town for the night.

The ones who live on the Kenai Peninsula can even go home, if they want to.

In other ways, it’s one of the worst fisheries to be in. With unexpected closures and constant conflicts over salmon allocation, it’s not uncommon to find fishermen poring over the specific wording of management plans or frantically checking fish counts in the nearby Kenai River to see if they’ll be open. Many of them also listen in to the Board of Fisheries meetings, asking the members and department for changes or adjustments to management.

That’s where Ken Coleman has found himself every three years since the 1980s: in the chairs at the Board of Fisheries meetings. A north Kalifornsky Beach, known as K-Beach, setnetter, Coleman said he’s watched the fishery ratchet back, with setnetters losing first the early season, then the late season, then gear, then time.

“It just boggles your mind,” he said.

Over time, it’s resulted in a fishery that can barely sustain itself.

In 2020, the 468 permits that fished in the setnet fisheries around Cook Inlet earned a total of $3.1 million, or about $6,742 per permit, according to the Commercial Fisheries Entry Commission.

Last year was the worst year in recent memory; in 2019, average gross earnings came back around $22,831 per permit, and at $10,886 in 2018. That includes all setnets in Cook Inlet, though, not just the East Side.

With the seasons cut short and seemingly no management fix in sight, some of them are looking to a more long-term fix: asking the state to buy them out.

Shortened seasons, shortened earnings

Like the rest of Alaska, many of the fishermen are aging, and they’re working with their children and hired crew to man their sites each year. This year in particular was expensive; crew were harder to find, COVID-19 mitigations had to be put in place, gear to supply the sites was more expensive, and fuel prices had increased.

Then, the entire fishery had an early closure on July 20. Despite plenty of sockeye jumping in the waters and entering the Kenai and Kasilof rivers, not enough large late-run king salmon are returning to the Kenai River.

The setnet openings are tied to the in-river sportfishery restrictions on king salmon, so when the Alaska Department of Fish and Game closed the king salmon sportfishery, setnets closed, too.

Two setnetters petitioned the board to reopen them on a limited basis, but the board denied the petitions on the grounds that they did not qualify as emergencies.

Coleman says north K-Beach, which stretches from the mouth of the Kenai River southward, had nine openers this year, none of which had a full complement of gear.

Chris Every, who also fishes on north K-Beach, was one of the petitioners to the board. He said the board and Commissioner Doug Vincent-Lang ignored data showing that the limited fishery the setnetters argued for caught very few kings and chose to keep them closed anyway.

The late run of king salmon has missed its optimum escapement goal in the Kenai River three years running, and with the management structure for setnets pinned to that goal, many of the commercial fishermen fear this year is a harbinger of seasons to come.

Every points to the declining number of processors in Cook Inlet. The once-competitive market of processors at the mouth of the Kenai has dwindled to two major players: Pacific Star Seafoods and Copper River Seafoods. Seattle-based E&E Seafoods, which owns Pacific Star, purchased Inlet Fish Producers from North Pacific Seafoods in 2020, adding that Kenai plant to its existing facilities there.

“That’s the future of this fishery,” Every said.

Coleman said he bought into the fishery when it was productive and has paid off his permits and lived off the earnings from the fishery for years. It’s hard to watch the young fishermen struggle by on the meager earnings from the fishery today, he said.

“Paying my sites off were something I readily did because all my future was before and it seemed like the right thing to do,” he said.

Dean Osmar, who has been fishing setnet sites near Clam Gulch for nearly five decades, said he remembers opening in late May and fishing into October, when there was no defined end to the season.

“Because of the early ending of the set net season the past couple seasons, we have lost (approximately) 50 percent of our catch,” he said.

A buyback plan

There are approximately 440 setnet permits registered to the East Side out of the 732 setnet permits Inlet-wide. Though the East Side is a distinct subdistrict, a Cook Inlet setnet permit can be fished anywhere in the area.

That means that, given the chance, setnetters can move their operations to regions which are more productive within Cook Inlet. The Kenai and the Kasilof rivers are the most productive sockeye systems other than the Susitna River, and after they started spiking in production in the 1980s and ‘90s.

Some setnetters have been looking at possibilities of a permit buyback since the early 2000s. The first effort through the Cook Inlet Revitalization Association fizzled out, but a more recent effort is working its way through the Legislature now under Senate Bill 29.

The bill, sponsored by Sen. Peter Micciche, R-Soldotna, does a few things to set up the opportunity for a buyback.

First, it splits off the Upper Subdistrict—the official management name for the East Side setnet fishery—into an exclusive zone. Other Cook Inlet setnetters would not be eligible for the buyback.

Second, it sets up a program that would allow qualifying permit holders to enter a lottery to have their permits bought back. That lottery would allow about half of the permits to be bought back at a fixed price of $260,000 per permit. To prevent speculation, permit holders have to have owned the permit since at least Jan. 1, 2018, and fished the last two years. The bill proposes using federal funding to finance the program.

Coleman, who has been working closely with Micciche and advocating for this program for the past six years, said that number was derived from an average of several years of earnings for setnetters. The state is buying out businesses, which benefits the other participants in the fishery, he said, and gets the fishermen out “with a little monetary dignity.”

On average, permit values have dropped since the fishery’s heyday in the early 1990s. Data from the CFEC shows that the value of Cook Inlet setnet permits peaked at about $100,000. They bottomed out in 2004 at about $7,000 and have inched back up to just less than $18,000 as of April 2021.

The last thing the buyback program would do is close the tidewater lease associated with the purchased permit. The intent is to prevent other permit holders from just moving into the spot and defeating the purpose.

The program has garnered support from some sportfishing groups, including the Kenai River Sportfishing Association, in the past. Setnets are not perfectly efficient; with gear reduced, more salmon will likely pass the commercial fishery and escape into the river. That benefits the sportfishery and personal use fisheries on the Kenai, which target both kings and sockeye.

There are constitutional questions from past efforts, though. In 2008, the CFEC issued a memorandum outlining some potential legal ramifications about a salmon permit buyback program under the Limited Entry Act.

Specifically, it notes that buybacks should be focused on the sustainability and economic health of a fishery, as well as the long-term well-being of its participants. However, it notes that “if the fishery were to become too exclusive under the Alaska Constitution, the State would have an obligation to put more permits back into the fishery.”

SB 29 is currently in the Senate Finance Committee, and does not have a companion bill in the House.

To go or to stay

The buyback program is entirely elective. The fleet has to approve it, and entering the lottery is optional.

The cabin on Sarah Frostad-Hudkins’ site on the Salamatof beach north of Kenai is a work of history. The cabin itself is built partially from wood reclaimed from the fish traps that lined the Cook Inlet coast in the 20th century; on the rafter hangs every commercial fishing permit the site has used for decades.

Family pictures include one of her grandfather Ole Frostad who immigrated to Alaska and started fishing the site in the 1920s with a determined look on his face as he makes sourdough pancakes on a small stove. The same stove stands in the corner of the kitchen.

Frostad-Hudkins said setnetting is a major part of her family’s lives; they have spent every summer for generations on the beach, hauling up salmon. They haven’t decided, but they don’t think they’ll go for the lottery themselves if it were approved.

“We’ll probably just keep fishing,” she said.

South of the Kenai, Every said he probably will.

“Do you want to be bought out, or do you want to walk away one day and let it all rot on the beach?” he said.

Not everyone in the fleet supports the program in its current form. Paul Shadura II, who fishes in the Kasilof region, said he was involved in the early 2000s effort and said he doesn’t care for this version of the buyback with the closed waters and the exclusivity of the Upper Subdistrict.

“If that wasn’t in this bill particularly, I would be 100 percent supportive of it,” he said.

Coleman said he’s heard a lot of support among the fleet for the buyback, though there are still a few who oppose it for various reasons. Without it, though, there doesn’t seem to be much of. future for the fleet. A gear reduction would allow the ones who stay to be more prosperous, supporting a commercial fishery in the future, he said; without it, they’ll have to struggle on the way they are and likely be starved out.

“I want to see this survive into the future,” he said. “It has a rich history. It’s one of the oldest organized fisheries in the state. It’s highly emotional to me; I want to see my sons be able to fish it.”