Program: Fish production

Appropriation:

Federal Funds:

$4,095,900

Special Revenue Funds:

$2,776,500

Total:

$6,872,400

Program Description:

This appropriation funds fish production programs. The line item for "fish production" describes a state program for collecting, growing and hatching eggs, and transporting fish both to the Great Lakes and to inland waters for deposit. Our state has been in the hatching business since 1873, when $1,200 was first appropriated for the construction of a hatchery in Cass County. The state owns and operates six fish hatcheries.

Program Recommendation:

State lawmakers should, at a minimum, outsource the production of fish to Michigan’s commercial fish hatcheries. As of 2000, Michigan was home to 65 private aquaculture facilities (licensed by the state to raise fish for sale), 33 of which are commercial trout operations. The value of fish stock produced in Michigan ranks 12th among states.

According to a survey conducted by Michigan Privatization Report, 19 other states currently supplement or intend to supplement their fish production by purchasing stock from private, for-profit businesses. The state of Oregon, which owns 34 hatcheries, is beginning a program to ensure that 10 percent of the state’s fish stock is obtained through private sources.

How much might outsourcing fish production save the state? It is impossible to tell precisely without actually contracting out the operations of at least one hatchery. But we can make a rough estimate based on public- versus private-sector costs. According to MDNR officials it costs the state $6.92 per pound to raise fish based on its "known costs." Sometimes, not every expense of running a government operation is easily identifiable. Expenses for electricity or pensions, for instance, may be charged to a different department, which make the true cost of providing a service seem smaller than it really is. Private-sector aquaculture officials say it costs private producers about $2.00, or 71 percent less. If the private sector could produce fish for just 25 percent less than it currently costs the state, the savings would come to $1,718,100. Savings: $1,718,100. Granholm’s 2005 proposal increases the gross appropriation to $7,610,600.