Tuesday, 14 May 2013

Back Fishing Lobster- Now What

There will be  a lot of soul searching on PEI today, by the many fans of the Toronto Maple Leafs, and lobster fishermen and their families.  One of these matters a lot more than the other.

Both groups are at least disappointed, many angry at how things turned out. There will be finger pointing, a hunt for villains.  I'm a Canadiens fan, so I'll leave the hockey to someone else.

The food business is a tough racket, especially for primary producers. A large Idaho potato grower Albert Wada, who helped organize the United movement to improve prices, put it this way, and it's no different for lobster fishermen:

"They occupy the lowest position in the economy… above them in the marketing chain are processors, packers, sales organizations, marketers, brokers, transporters, wholesalers and retailers…

Farmers get paid after all of them subtract their expenses and margins…

Risk must be passed back to the farmer for those above them to remain healthy and viable…"

So was the lobster "strike" a failure?  Definitely not.  It was hard to see processors agreeing to a price increase, because even they are many hands and a long distance from the eventual consumer.  We only have to remember the Polar adventures,  Ocean Choice shutting down,  North Lake needing new owners,  Mariner going bankrupt, etc. etc.  to understand that PEI processors are not spinning gold in those plants. Processors here are more the price messengers, and yes for them to stay in business, they have to short-change fishermen (see Wada above).

It's not to say that the decisions PEI processors make don't matter.  I continue to think (see earlier post) that it's the Maine lobster fishery and it's relationship to PEI processors that's casting a shadow over PEI.  Fishermen there can harvest year around with up to 1200 traps (300 or so on PEI with clearly defined two month seasons). Maine landed more than a hundred million pounds last year (four times what PEI lands), and this cheap lobster was gobbled up by Maritime processors throughout last Fall and Winter, swamping the market with low-priced products, making a lot of the processed lobster produced earlier from the PEI catch,  uneconomic. My guess is processors don't want to repeat that this year and hence the low shore price, and (again refer to last post) at least two processors continue to bring the U.S. product into their plants, so the economics must still work (for these two processors if no one else).   If it hasn't happened yet,  Maritime fishermen need to at least speak to fishermen in Maine to get a better understanding of how this market works. If the off-season fishing (when lobsters are molting and poor quality anyway) isn't that important to Maine fishermen (it can't be  a money maker at last year's prices)  then maybe some fishermen solidarity is possible. (I know that sounds naive).

PEI Premier Ghiz has asked former auditor general Colin Younker to look into the lobster market,  and provide some clarity about what's going on. It's a worthwhile exercise. PEI's lobster industry, like so much else, is unique.  It's heavily dependent on a smaller lobster that gets taken to a plant and ends up frozen or in a can. (PEI harvests 80% of the world's production of "canner" lobster.) Some see that as a blessing (lots of plant jobs) others as a curse (a lower valued product that will always return PEI fishermen a little less.)

So yes the strike hasn't led to higher prices in the short term (and often there's a price slump after Mother's Day) but it's at least spurned Younker's report, port meetings,  a chance to ask better questions, and an understanding that fishermen can act together if pushed too far. That's important for both fishermen and buyers to understand.   Tignish fishermen will get the blame for ending the strike, but don't forget that Royal Star is a co-op, the fishermen benefit from any profits the plant makes. (this is important context that many in the media missed,  because it makes the story a little more complicated?)

There are no simple solutions. There will be more discussion about price setting before opening day ( a marketing board approach is a possibility, but that's complicated by the fact that more than half the catch goes to New Brunswick for processing).

Bottom line:  going out at the beginning of the season and catching as much lobster as possible clearly isn't working so maybe leaving a hundred traps on the wharf at the beginning, and only bringing them out as supply and price dictates is worth a  try.  The Liberals had promised developing more lobster pounds in the last election, that hasn't happened yet.  Some fishermen see using the courts to sue buyers and brokers for price fixing (that was done successfully  in the wild blueberry business in Maine).  And surely all of those trade missions to Asia and India will start paying off at some point.

 The lobster industry has been a bedrock for many rural communities,  so this really matters.  Fishermen have now moved beyond whining and complaining, and expecting others to fix the problem. Gaining some clout in what's become a very hostile marketplace won't be easy, but this past week fishermen made a start. 

No comments:

Post a Comment