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Artificial Production Review Economics Analysis Phase I
July 8, 2002 | Council document IEAB 2002-1
Comments received
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Summary (as letter from IEAB to Chairman Cassidy)
Dear Chairman Cassidy:
I am pleased to provide the Independent Economic Analysis Board's Phase
I study of hatchery cost effectiveness. As you will recall, our main
objective was to establish a basis for assessing the cost-effectiveness
for artificial production projects proposed to the Council. To accomplish
this, we developed an analytical framework for the economic cost
assessment, held a workshop with hatchery program managers (August 2001),
collected and compiled budget cost information from eight projects, and
selected three hatchery performance measures as indicators of
effectiveness: fish released, adult returns, and adults harvested. In the
process of collecting and interpreting this data we corresponded with a
number of hatchery program personnel from the States of Washington,
Oregon, Idaho, the US Fish and Wildlife Service, Grant County Public
Utility District, and the Yakima and Nez Perce tribes.
Overall, we found that the cost data for such an analysis were
reasonably well documented and available. Some performance data (fish
released, fish returned, and fish harvested) were also available, with the
fish release data being the most complete. The adult return/harvest rates
are estimated from tag release-return data, which are not available for
all stocks released. Despite the gaps in hatchery return estimates, we are
optimistic that an expanded version of this study could provide a
reasonable basis for cost-effectiveness analysis of artificial production
proposals. Based on the information assembled to date, the costs per
release varied among the eight projects from $0.14 for Spring Creek
hatchery fall chinook to $2.60 for Nez Perce spring and fall chinook. The
costs per returning adult varied from $12 for Priest Rapids fall chinook
to $1,615 for Winthrop hatchery spring chinook to $3,707 for Nez Perce
hatchery chinook. The costs per adult fish harvested varied from $14 for
Clatsop County Economic Development Council coho releases in Youngs Bay,
to $23 for Priest Rapids fall chinook, to $68,031 for Entiat hatchery
spring chinook. We find that the costs per harvested fish are strongly
influenced by specific survival rate factors and harvest patterns. These
relationships can provide useful guidance in assessing the
cost-effectiveness of both current hatchery operations and proposals for
new projects.
The major remaining gap concerns performance measures for restoration
or supplementation hatcheries, which aim to boost the rebuilding rate for
naturally-spawning fish stocks that have under-utilized spawning habitat.
We would need to consult further with the APAC and hatchery managers in
order to establish appropriate performance criteria for such projects.
We propose that the Council consider a Phase II of this analysis which
would (a) incorporate a wider range of projects in order to support a
statistical analysis of cost-effectiveness, (b) develop an effectiveness
measure for restoration hatcheries, and (c) provide some application of
the resulting cost-effectiveness assessment to specific NPPC sponsored
projects. The cost would be around $150,000 and would involve an outside
research organization under guidance and review of the IEAB.
Sincerely,
Daniel D. Huppert
Chair, Independent Economic Analysis Board
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