NOAA Finally Getting It Right

Agency’s fisheries economics report more accurately reflects reality, to the dismay of some.

Posted on November 14, 2017 by Brad Gentner, President, Gentner Consulting Group LLC

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An editorial appeared in National Fisherman magazine recently entitled, “NOAA report reaches to compound the interest and rewards of sport fishing,” in which the author lamented NOAA’s annual fisheries economics report as “a paean to recreational fisheries.” National Fisherman is regarded as the publication for and about industrial fishing, and it took issue with the NOAA report for showing, at long last, that in 2016 recreational marine fisheries contributed $36 billion, in valued added, to the national economy each year while commercial fisheries landed $5.3 billion worth of product and contributed $46.7 billion in value added through the whole supply chain.

This is perhaps the closest to an apples-to-apples comparison the agency has ever done, and even though National Fisherman might disagree, the numbers are still not truly indicative of the disparity between the two sectors. If you remove imports and take out the species anglers don’t even fish for, commercial value added shrinks to $8.3 billion.

As the saying goes, we've come a long way.

Recreational fisheries have been marginalized in the national discourse for a long time and the recreational sector has lobbied NOAA hard in recent years to make sure the recreational sector’s true economic contributions are highlighted right alongside the commercial numbers in reports like this one. What the article doesn’t get right is the comparison is even less flattering to the commercial sector if you drill down into the estimates and actually examine the economics of the issue.

I served as a Senior Research Economist for the National Marine Fisheries Service (NMFS) for eight years and it was my job to construct the economic models and multipliers for both the commercial and recreational sectors. The $36 billion dollar recreational value added number is created using the same technique as the commercial value added number. I was the author of the value added table in the Fisheries of the United States (FUS) while I worked for NMFS, and I know that it uses the exact same methodology that all branches of the federal government use to estimate the economic activity generated by an industry. Value added, or contribution to GDP, is a time-tested tool that represents a scientifically agreed upon standard to represent economic activity and the importance of an industry. Both models are indeed “esoteric” economic impact models as derided by the National Fisherman.

While the National Fisherman editorial takes issue with the recreational figures as being too large, it ignores the fact that the value added estimate for commercial fisheries, $46.7 billion, in FUS contains imported seafood that does nothing to support the domestic seafood industry. The US imports 94 percent of the seafood it consumes and if you take out those imports from the value added figure, as is done in the 2015 FEUS publication, the multiplier estimate of value added from the harvester to the plate without imports drops by nearly half to $27.0 billion. Imported seafood supports things like shippers and warehouses and grocery stores, but it doesn’t quite get us to a true apples-to-apples comparison yet.

To get closer to making a true apples-to-apples comparison and to be completely intellectually honest, we have to return to FEUS in 2015. That’s where the recreational sector generates of $63.4 billion in total sales, including the multiplier effect. In that same year, the commercial sector, from the net to the plate and including only domestically harvested fish, generated $51.9 billion in total impact, including the multiplier effect. Only $13.9 billion of that is attributable to the commercial harvesting sector. The remainder is attributed to processors, dealers, wholesalers, distributors, super markets, fish markets and restaurants. Over half of that number, $26.1 billion, is attributed to the retail sector alone.

Honing the comparison down even further, only 30 percent of the value of commercial landings comes from fisheries shared by recreational anglers. This is a very conservative estimate of the commercial-only fisheries and that 30 percent figure is likely much lower. If you take shellfish, crab, lobster, mollusks, menhaden, Alaskan pollock, sablefish, scallop, industrial species, freshwater fish and shrimp out of that equation, commercial landed value drops 70 percent.

Looked at this way, the recreational sector is generating $63.4 billion in economic activity while the commercial harvesting sector is generating $4.3 billion in economic activity at the harvester level and the entire seafood sector, from the net to the plate, is generating $15.9 billion in total economic activity and only $8.3 billion in value added across those species that recreational anglers target.

The National Fisherman was also quick to drag out that old saw that recreational expenditures on food should not be included unless they wouldn’t have eaten anything if they stayed home instead of going fishing. That is completely right, but it fails to take into account that the same thing applies to the commercial supply chain. The economic impact estimates they cite and those detailed above include meals fed to crews aboard commercial fishing vessels. Additionally, NMFS includes the entire supply chain for seafood in their economic impact estimates of the commercial sector even when consumers could simply buy chicken instead. 

If National Fisherman wants only the multiplier effects of goods that do not have substitutes for consumers, their economic importance numbers shrink even more. Some might not like the agreed standard for economic impact analysis, but the inclusion of impacts regardless of the availability of substitute activities or substitute protein sources is the scientific standard.

No matter how you slice it, the recreational sector has a large and important economic footprint in this country and it is entirely appropriate that it is finally being recognized correctly alongside that of the commercial sector.