CVRF calls to fix CDQ allocations, NSEDC disagrees

Representatives from the Community Development Quota group Coastal Villages Regional Fund – comprised of 20 villages along the Bering Sea coast from Platinum in the south to Scammon Bay in the north— came to Nome last Friday to convince the public of the need to seek a change to quotas for pollock, crab and cod per the Magnusson-Stevens Act, the federal law that enacted the CDQ program.
About 30 people attended the meeting that was advertised per direct mailing letters to PO Box holders. Several senior officials and board members of the local CDQ group, Norton Sound Economic Development Corporation, sat in the back, not as participants but as witnesses to the meeting.
Richard Jung, president of Coastal Villages Regional Fund, CVRF for short, held the presentation, supported by several CVRF staff, board members and a video cameraman, recording the entire meeting. Door prizes were given out, Subway sandwiches drew a steady stream of youngsters to the side tables and CVRF t-shirts with the meeting’s message were for the taking.
Jung brought the argument that the allocation formula of the CDQ program is broken as it disproportionately allocates fish quota to the six CDQ programs witout using population numbers or economic need as guiding principles.
Jung quoted from a report that states that although 35 percent of the entire CDQ population live in the CVRF region, they only receive 24 percent of the program’s Bering Sea pollock quota, 17 percent of the opilio crab quota and 18 percent of the Bering Sea cod quota. The report also states that NSEDC, as the second largest CDQ group population-wise, has 31.6 percent of the CDQ program population, but only receives 22 percent of the pollock allocation, 18 percent of opilio crab and red king crab allocations. In contrast, the Aleutian Pribilof Island Community Development Association has only 1.6 percent of the CDQ population, but is allocated 14 percent of the pollock. The report also highlights that there are a lot of communities in economic distress, saying that nearly half of all individuals in the CDQ program live in CVRF communities identified as “distressed”, with the lowest per capita income and the second highest living below the federal poverty line.
This is perceived in CVRF as an inequality that needs to be fixed.
Jung stressed that the CDQ program had been doing great things for their region. He said that the program allowed the region to build community centers, to invest in scholarships, safety training programs, mechanic training and repair programs, tax assistance, elder assistance, funeral assistance and Youth-to-work programs. CVRF owns six boats that fish successfully for pollock, crab and cod and also have a partnership with NSEDC on five in-shore pollock boats. “We are so lucky we are in this thing,” Jung said. “but the allocations need to be more equitable.”
He explained that the allocations do not reflect the population or the economic needs of the CVRF or NSEDC regions. “This is a federal program and every federal program is based on population and need — this is not,” he said.
Jung argued that the current CDQ allocation is skewed towards the least people — Aleutian Chain, APICDA, with a population of 387 and Central Bering Sea, CBSFA, with a population of 322 people — reaping most of the benefit. “We need a mechanism to correct the imbalance,” he said.
Jung recounted visits to Washington D.C., where he said Senators Lisa Murkowski and Dan Sullivan were sympathetic to CVRF’s cause and listening. The same could not be said about Representative Don Young, who was not responsive to listening to CVRF’s plight. “He became very angry and walked out of the room,” said Jung.
“We are here to ask people to help us out,” he said. Jung expanded on the reason of their Nome visit by saying that their focus is on getting the vote out in this fall’s midterm elections, where Alaska’s House of Representatives’ seat is up for election. He pointed to the back of his business card, which states in yellow letters on blue background “VOTE”.
Jung repeatedly stressed that the CDQ program is working wonderfully for his region, but in their opinion, it needs to be made more fair and just to allocate fishing quota based on population and need, not on the current formula.
When it came to the question and answer part of the meeting, former NSEDC employee Sterling Gologergen stood up and asked why CVRF is showing up at NSEDC’s turf without having met with the NSEDC board of directors to iron things out. I don’t try to criticize you, but it creates division within in the CDQ program and I highly recommend you work with the NSEDC board on this,” she said. “You are jumping over the hoops, culturally its not good to try to go over their heads.”
Jung responded that he was admiring what NSEDC had accomplished but he wants to see the issue fixed, claiming that NSEDC would financially benefit from a bigger, more equitable allocation.
So, why don’t we join them and what would be the disadvantage by doing allocation based on per capita, asked Louie Green, turning around and addressing the NSEDC leadership sitting in the back of the room.
NSEDC CEO Janis Ivanoff responded, “If you have a question, please come and see us in our office, our doors are open, but we are not going to engage here with video cameras rolling.”
While the gist of CVRF’s message was “Enough is enough, we want to be treated fairly” with the pitch that NSEDC could benefit from different quota allocation mechanisms, NSEDC is not convinced. In a position paper, NSEDC said that “through thoughtful deliberation our Board of Directors have decided to not join CVRF in their approach to seek a change to the existing allocations.”
The Nugget sought to clarify NSEDC’s position. NSEDC board of directors chairman Dan Harrelson responded that although CVRF informed the board that they are coming to Nome, they declined a NSEDC invitation to discuss this with the board.
Asked if allocations were to be adjusted by population, what would NSEDC gain in terms of quota percent and approximate dollar value, Harrelson answered, “It is difficult to pin a value with any certainty since any effort to reallocate would be an extremely divisive and hard fought battle between the groups – just as it was during the years prior to 2006 when reallocation was a constant process.  From the start, the CDQ allocations were based on a number of factors, not just population.  To reallocate on population alone would be a complete paradigm shift of the program.  These factors make CVRF’s numbers a bit of a fairytale in that their farfetched approach is virtually unattainable.  I wouldn’t want to do the same and put any misleading numbers out there, but would speculate that it would fall far short of what CVRF is pitching. More importantly, there are approaches on a few different fronts that could bring NSEDC just as much and more income than reallocation would, and could do so without any harm to any other group.  Some of these approaches could indeed benefit all groups and still address the imbalance when considering allocations and population levels. “
What risk would NSEDC run if an allocation by population were to be renegotiated?
 “The risk could be to the CDQ program as a whole, whether that is missed opportunities for all CDQ groups to work together to further benefit the program, or the loss of focus on working on our programs to benefit our residents to rather concentrate on a destructive campaign that has a highly uncertain outcome,” Harrelson answered.
According to NSEDC, the 2006 inclusion of amendments to the Magnusson-Stevens Act brought an end to the annual fighting for allocations between CDQ groups. It included that CDQ groups can grow into non-fisheries areas, that allowed NSEDC to begin programs such as the Consolidated Bulk Fuel Program, Small Business Initiative, Growing Our Own Teachers, Large Infrastructure Program, Outside Entity Funding, Community Energy Fund and Energy Subsidy. “These are all funded by our CDQ activity and, in growing amounts, the IFQ in which NSEDC has invested,” noted Harrelson. “If allocations were to be based solely on population, NSEDC would of course gain at the expense of other groups.  There are more constructive means to bring in more income for our programs without harming other groups.”
The Nugget asked if the position by NSEDC is final, or would NSEDC be open to ask for population based allocation if other 2006 Magnusson-Stevens Act amendments are left untouched? Harrelson said that it is not as clear-cut as simply holding steady on one portion of the amendments and only seeking allocation changes.  “The NSEDC Board’s position has been revisited a few times over the past years, and NSEDC will certainly continue to evaluate our position on what is best for our region and the CDQ program,” he answered. “Although population was a factor in the original allocation process prior to 2006, NSEDC was not satisfied with the weight placed on that criteria.  The package that was passed by Congress was something we agreed that we could work with, and we have and have done well.  So we understand the desire to have greater weight placed on population as we made the argument for years.  But the success and growth of the company since 2006 is indicative that the compromise we agreed to is working, and the board has decided to pursue other means for further growth.”