CANADA: no more subsidies for Newfoundland and Labrador?

Canadian fishermen in Newfoundland and Labrador have been carrying protest actions against provincial government officials as they consider that no sufficient help has been provided to the fishing industry to overcome the crisis.

Another issue that has been raised by fishermen organizations is that harvesters are restricted to sell their produce to a limited number of buyers.

In an article published in “Coaster” on 7 July 2009, David Decker, the secretary-treasurer of the FFAW/CAW (Fish, Food and Allied Workers, affiliated with the Canadian Autoworkers), stated that:

"Right now the provincial government puts restrictions on harvesters hat say you can only sell to a certain group of people. There is no onus on processors to maximize the value of the catches, so in the end, they ell it in the marketplace and fishers are left with the residual. This can't work any longer and has to change"

In the same article, on possible (further) public money for fishermen, Provincial Minister Hedderson said on 30/6/09:
"Our government has taken a long-term approach to addressing the underlying structural issues in the industry that continually plague us every fishing season. In the midst of a difficult year, the fishing industry is resorting to suggestions of quick fixes such as subsidies, which do not deal with long-term structural issues and would violate international trade agreements. In addition, the industry has presented no financial evidence to verify the need for government intervention.”

With regard to Mr. Decker’s statement, I was intrigued by the words “…you can only sell to a certain group of people…”. This reminded me of another post I made on Norway’s legislation obliging fishermen to deliver their catch to certain areas (for example in Northern Norway).

In this case, i.e. in Newfound and Labrador, it appears that only a limited number of buyers are allowed into the market.

I decided to do some research on Newfoundland and Labrador’s legislation on fish markets. Well, these are some of my findings:

- If you want to buy shrimps in the Province you have to be registered as a “Licensed buyer”. These licenses are delivered by the Minister of Fisheries and Aquaculture, upon recommendation by the “Fish processing Licensing Board”.
- Prices for shrimps (raw material) are “negotiated” between harvesters and processors. Harvesters can carry out a so called collective bargaining, i.e. they can act as a group vis-à-vis their counterparts.
- To facilitate the process of bargaining a STANDING FISH PRICE-SETTING PANEL “is to identify, in consultation with the stakeholders, particular fish species for collective bargaining, annually, and to ensure that binding collective agreements containing price and conditions of sale are in place prior to the normal opening date for these particular fish species.”

So, we got, on the one hand, the harvesters, being able to form a group and act in a concerted manner when confronting demand, and on the other hand, processors having privileged access to the supply of raw materials. No wonder that in such market set-up, with basically two players, the likelihood is high that deadlocks arise, specially at times of economic difficulties.

The above system reminds me also of another Norwegian fisheries policy feature, i.e. “sales organisations”. These organisations are made up fishermen and are in fact sales monopolies, allowing for the setting of minimum prices for the sale of some fish species. I will come back on these organisations in a later post.

Here are a few links to recent press articles on the crisis in Newfoundland and Labrador:

Rally for shrimp fishermen at Anchor Point (Northern Pen) 22/6/09

Protesters get meeting with Hedderson (The Coaster) 7/7/09

Here is the link to Newfoundland and Labrador Fisheries and Aquaculture Department website:

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