As COVID impacts continue to hurt US fisheries, CARES Act funding still stuck in limbo

Published on
December 7, 2020

Almost exactly seven months after USD 300 million (EUR 247 million) in funds were released to U.S. fisheries through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), over one-third of the money slated for distribution hasn’t even had its method of distribution decided on.

The funds, released on 7 May, were announced by the U.S. Secretary of Commerce for disbursement in state-by-state amounts. The funds were to be distributed through NOAA, with each state charged with creating and executing its own individual spend plan.

So far, of the 32 states or tribal entities granted funds by the CARES Act, 22 have successfully had spend plans approved. The two largest recipients of funds – Alaska and Washington – have still received no approval on spend plans. Combined, the two states have yet to disburse one-third of the total distributed, or USD 100 million (EUR 82 million) in funds.

Approval goes through NOAA, and once a spend is approved it is up to the individual states, tribes, or territories to disburse the funds.

“Spend plans must describe the main categories for funding by state, territory, and/or Tribe as applicable (e.g., direct payments, fishery-related infrastructure, fishery-related education) that address direct and indirect COVID-19 impacts to commercial fishermen, charter businesses, qualified aquaculture operations, subsistence/cultural/ceremonial users, processors, and other fishery-related businesses,” NOAA Fisheries Director of Public Affairs John Ewald told SeafoodSource in August. “Spend plans must be consistent with the requirements of the CARES Act and comply with the terms and conditions of the grants awarded by NOAA Fisheries to the commissions.”

But approval of a spend plan does not mean that funds have been distributed. Each state has created its own method of distributing funds, with some states creating more complex equations and processes than others for ensuring the funds reach those in need.

In the initial fund disbursement, NOAA separated out three different sectors within the overarching fisheries designation: charter fishing, commercial fishing and aquaculture, and “seafood sector” – which covers things like wholesalers and distributors. NOAA, in its initial allocation, offered rough estimates on what percentage of total business each sector represented for each state – which could have served as a backdrop for determining how to distribute the funds. While some states used that initial estimate, others used their own.

That differentiation state-by-state is just one example of how the distribution process was complicated, as each state also came up with different methods for determining how much money each applicant would receive – with differing amounts of complexity.

For example, Oregon has come up with a relatively simple method for distributing its funds in its approved spend plan. Every applicant was required to detail the relative and absolute dollar amount of lost revenue resulting from COVID-19. Then, the total loss from all applicants is totaled. If that total loss is greater than the amount of funds available, the disbursements are scaled. If the funds only represent 30 percent of the total loss, applicants receive 30 percent of the funds they requested.

In contrast, California came up with an 11-tier method of funding disbursement based on the amount of fees paid by applicants to the state, coupled with self-certification of losses. Massachusetts, as well, came up with a tiered system for harvesters, based on annual income, and a separate system for commercial fishing businesses and wholesalers based on a number of factors, including number of employees.

Between delays in approving the spend plans, and delays in processing applications, the funds are still lagging. A recent Government Accountability Office (GAO) report found that as of 23 October, only USD 16.5 million (EUR 13.6 million) in funds had been disbursed to fishery participants.

That amount is paltry compared to the losses fisheries have faced as a result of the COVID-19 pandemic. Even in the early months of the pandemic, when Massachusetts was first submitting its spend plan in early August, the state determined that the state’s scallop fishery, its largest fishery by value, had seen a 36 percent drop in ex-vessel value. That means the fishery dropped in value from USD 102 million (EUR 84 million) to USD 65 million (EUR 53 million), or a decrease of USD 37 million (EUR 30 million) in just one fishery in one state. Two months after that, the GAO determined less than half of the losses of that one fishery had made it into the hands of fisheries participants – and that money represented compensation for losses for the entire industry nationwide.

In Alaska, the state was still accepting comments on its second draft of a spend plan until 15 November – six months after the funds were first disbursed. No spend plan approval for the state had been announced as of 7 December on NOAA’s website, and several of the state's fisheries have struggled this season. The state’s salmon season performed poorly, with regions across the state seeing drops in numbers of chum, sockeye, and other species. That, compounded with lower prices, made for a relatively dismal season in value terms.

Preliminary data from the Alaska Department of Fish and Game indicates that the value of the harvest was down 56 percent in 2020 compared to 2019 – decreasing from USD 673.4 million (EUR 555.5 million) to USD 295.2 million (EUR 243.5 million). That represents a drop of USD 378.2 million (EUR 311.9 million), and while not all of those losses are attributable to COVID-19, the pandemic didn’t help.

Meanwhile, Alaskans are waiting on the relief.

“I get it that it’s complicated,” charter fishing company operator Stacy Corbin told Alaska Public Media. “You got, you know all different levels of businesses on both sides of it. The commercial and the sport fishing side of it and the charter side of it. But, you know, our bills come due every month. That money has been allocated for quite a while. We need it now.”  

Photo courtesy of photomatz/Shutterstock 

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