Salmon fishermen stay in port in price protest From Chicago Tribune wires ANCHORAGE – Thousands of salmon fishermen stayed in port Thursday to protest low prices they blame on the Japanese, and the governor delayed the opening of fishing in one area to prevent violence. Representatives for processors and fishermen were to meet in the Bristol Bay village of Naknek Thursday to discuss the strike, involving about 3,000 fishermen. Alaska’s salmon catch was worth more than $500 million last year. Fishermen in the Bristol Bay area started the strike Tuesday, at the beginning of the brief Bristol Bay harvest, to protest prices that tumbled from more than $1 a pound last year to about 47 cents this year. Processors paid more than $2 a pound. Bristol Bay is in Alaska’s southwest, just north of where the Aleutian Island chain begins. Nearly all its harvest is shipped in Japan. The strike spread Wednesday to Kadiak and Cook Inlet, and Gov. Walter J. Hickel postponed the opening of red- salmon fishing in the Egegik district of Bristol Bay for 24 hours to prevent violence between striking and non-striking fishermen. “I think the Japanese are just trying to find out how cheap we will fish,” said Drew Sparlin, a fisherman from Kenai. “I assume somewhere along the line if Bristol Bay went fishing for 50 cents and we went fishing for 75 cents or a dollar, next year we would have to fish for 50 cents, and they would have to fish for 25.” But Alec Brindle, president of Seattle-based Ward Cove Packing, said prices are low because “there’s just a pile of fish around.” “This is just the operation of the law of supply and demand,” he said. “Anybody who’s been reading the statistics would now that there’s a worldwide surplus of salmon. Alaska’s no longer the sole source.” Ownership of the 10 major seafood processing plants in the Bristol Bay region is dominated by Maurbent, according to a state legislative study. Other Japanese companies with controlling ownership shares in Bristol Bay area processors are Nichiro G.K., Ltd. And Yuasa-Funashoku, according to the study. Local government offices and businesses shutdown Tuesday for 24 hours in solidarity with the fishermen, according to borough manager Ed Peffermen. “The community is dependent on fishing, so the borough is very sympathetic to the strike,” he said. Low salmon prices hurt the borough, which collects its revenues from a raw fish tax, he said. Salmon fishermen throughout the state have been disappointed with this season’s prices, depressed by high inventories worldwide of frozen and farmed salmon, officials said. “We want to focus national attention on what is happening out in Bristol Bay,” said salmon fisherman Fred Pike, mayor of the Bristol Bay Borough and an organizer of the strike.   (Source: “Salmon Fishermen Stay in Port in Price Protest,” The Chicago Tribune.) Answer the following question: 1. On the government side, is it necessary to intervene in this situation? If no, justify your reason.  If yes, what government interventions would you suggest?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Question

Salmon fishermen stay in port in price protest

From Chicago Tribune wires

ANCHORAGE – Thousands of salmon fishermen stayed in port Thursday to protest low prices they blame on the Japanese, and the governor delayed the opening of fishing in one area to prevent violence. Representatives for processors and fishermen were to meet in the Bristol Bay village of Naknek Thursday to discuss the strike, involving about 3,000 fishermen. Alaska’s salmon catch was worth more than $500 million last year. Fishermen in the Bristol Bay area started the strike Tuesday, at the beginning of the brief Bristol Bay harvest, to protest prices that tumbled from more than $1 a pound last year to about 47 cents this year. Processors paid more than $2 a pound. Bristol Bay is in Alaska’s southwest, just north of where the Aleutian Island chain begins. Nearly all its harvest is shipped in Japan. The strike spread Wednesday to Kadiak and Cook Inlet, and Gov. Walter J. Hickel postponed the opening of red- salmon fishing in the Egegik district of Bristol Bay for 24 hours to prevent violence between striking and non-striking fishermen. “I think the Japanese are just trying to find out how cheap we will fish,” said Drew Sparlin, a fisherman from Kenai. “I assume somewhere along the line if Bristol Bay went fishing for 50 cents and we went fishing for 75 cents or a dollar, next year we would have to fish for 50 cents, and they would have to fish for 25.” But Alec Brindle, president of Seattle-based Ward Cove Packing, said prices are low because “there’s just a pile of fish around.” “This is just the operation of the law of supply and demand,” he said. “Anybody who’s been reading the statistics would now that there’s a worldwide surplus of salmon. Alaska’s no longer the sole source.”

Ownership of the 10 major seafood processing plants in the Bristol Bay region is dominated by Maurbent, according to a state legislative study. Other Japanese companies with controlling ownership shares in Bristol Bay area processors are Nichiro G.K., Ltd. And Yuasa-Funashoku, according to the study. Local government offices and businesses shutdown Tuesday for 24 hours in solidarity with the fishermen, according to borough manager Ed Peffermen. “The community is dependent on fishing, so the borough is very sympathetic to the strike,” he said. Low salmon prices hurt the borough, which collects its revenues from a raw fish tax, he said. Salmon fishermen throughout the state have been disappointed with this season’s prices, depressed by high inventories worldwide of frozen and farmed salmon, officials said. “We want to focus national attention on what is happening out in Bristol Bay,” said salmon fisherman Fred Pike, mayor of the Bristol Bay Borough and an organizer of the strike.  

(Source: “Salmon Fishermen Stay in Port in Price Protest,” The Chicago Tribune.)

Answer the following question:

1. On the government side, is it necessary to intervene in this situation? If no, justify your reason.  If yes, what government interventions would you suggest?

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