Shell Game

Aaron
Aaron Beswick
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Inshore shrimp fleet faces rough waters ahead

Dan Genge and his crew are fishing for less than minimum wage. It was a hard thought to stomach for the owner of the 65-foot Newfoundland Storm as he watched 68,300 pounds of shrimp come from the hold of his dragger.

He and his crew had spent 141 hours off the Labrador coast in late September, daring rough weather and averaging four hours sleep a day to return with a hold full of shrimp.

The draggers of the inshore fleet face rough waters not only brought on by fall winds but by tight financial margins as well. They are pictured at the wharf in St. Anthony. Photos by Aaron Beswick/The Northern Pen

St. Anthony -

Dan Genge and his crew are fishing for less than minimum wage. It was a hard thought to stomach for the owner of the 65-foot Newfoundland Storm as he watched 68,300 pounds of shrimp come from the hold of his dragger.

He and his crew had spent 141 hours off the Labrador coast in late September, daring rough weather and averaging four hours sleep a day to return with a hold full of shrimp.

"Nobody's making money and it's rough when you can't give your crew what they deserve," said Genge. "This can't last."

At the wharf in St. Anthony, two per cent of the weight of his catch was subtracted for shrimp bags and water. The final settling weight - for which he received 37.3 cents a pound, was 65,394 pounds.

From that he paid his four crewmembers their share - which worked out to $10.50 per hour for the 141 hours at sea. As owner and skipper of an enterprise worth over a million dollars, Genge made $13.50 an hour for his time at sea.

"But that doesn't count their time on land repairing trawls, equipment or their time away from home - factor that in and these skilled fishermen are making less than minimum wage," said Genge. "The fishery is going to shut down because we can't get men for the boats. These are people with marine emergency duties courses, experience on the water and other training. You can't go out with an inexperienced crew - if you get into trouble out there you can't have people running around like chickens with their heads cut off."

From what the boat grossed on the trip, $6,500 was spent on fuel, and further subtractions will be made for food, insurance, boat payments and taxes.

Halfway through the thought, Shawn Dempster arrived in Genge's wheelhouse. The skipper of the 65-foot dragger Straits Stream had just been towed into St. Anthony Harbour with a full load of shrimp, but with a busted transmission and a torn trawl. The transmission will require $16,000 worth of parts, not including labour.

"For an independent fisherman, that means more loans - I busted a cable and I had to put it on my Visa," said Genge.

It hasn't always been this way.

Genge started fishing shrimp in the 1980s with his family from their 55-foot dragger, the Straits Star. Cod was their mainstay, but by the end of the decade, shrimp was becoming a nice income. Their quota was only for 14,200 pounds a week, but diesel was 18 cents a litre and shrimp fetched 92 cents a pound.

Then came the 1992 cod moratorium and the industry retooled for shrimp - the price of which had gone up to $1.15 a pound.

"We got the Nordmore grate (which reduces bycatch) then - that kept groundfish out of the trawls and catches seemed to increase."

Communities like Port au Choix, Black Duck Cove, Anchor Point and St. Anthony got large plants employing hundreds of people processing shrimp. Money poured in to shrimping communities.

"Times were good," said Genge.

So what happened? This year may be exceptionally bad due to the world financial crisis, but shrimp prices had been declining steadily before, while fuel prices rose.

"It's a product that's losing market share - that's why production goes down, but price goes down as well," said seafood analyst John Sackton, owner of www.seafood.com.

"Coldwater shrimp has always been an old-fashioned type product that you keep in a little plastic tub in your fridge and you put on salad."

For the price to go up, more people need to eat more coldwater shrimp. The coldwater shrimp industry, the backbone of the Northern Peninsula and Southern Labrador economy, is losing market to warm water shrimp - larger shrimp farmed in Southeast Asia.

After this year's market collapse, the provincial government, seafood processors and the Fish, Food and Allied Workers' union agreed to look for solutions. They started off by agreeing to a terms of reference:

There needs to be a new way of marketing the province's seafood.

Both the processing and harvesting sector need fewer people making more money.

Based on these assumptions, working groups will reach conclusions on harvesting, processing and marketing. The conclusions will come back to government by the new year to be combined into a larger report, which industry and government have said they'd use to make changes.

"I'm not expecting miracles, but I am expecting good, informed opinions on how to make this industry sustainable," Fisheries Minister Tom Hedderson told The Northern Pen.

"On the Northern Peninsula we have plants that never opened this year, fish brought in and never sold. Bridging is not cutting the mustard for any of our workers or harvesters. We need to begin to make serious changes for the 2010 season."

How do you get Europeans and Americans asking for Newfoundland and Labrador's coldwater shrimp at the restaurant and grocery store?

"People eating our shrimp don't know where it came from, don't know it's the top quality in the world," said Genge, running his hand over the Newfoundland Storm's wheel.

"Our shrimp is sent over in bulk by the processors - more needs to go into marketing."

Newfoundland has heard plenty about marketing - with the shutdown of Fishery Products International (FPI), the province offered to buy the company's marketing arm, but their offer was shot down by processors. A more recent offer of $5 million by the province to set up a marketing board was also voted down by members of the Association of Seafood Producers (ASP).

"In other places where they've pushed marketing, such as New Zealand and Alaska, they're trying to help local companies rather than market things for the companies," said Sackton.

Wild salmon prices bottomed out for Alaska during the 1980s, as the market was being taken over by farmed salmon. The Alaska Seafood Marketing Institute (ASMI) was created to brand wild Alaska salmon. It started an advertising campaign to put the idea of wild salmon into people's heads and make them consider it a better food. They provided chefs and retailers with support materials on Alaskan salmon, held cooking demos and sent out free posters for stores and restaurants.

"They started it when the salmon industry was pretty much dead in the middle of the road," said Sackton.

"From $1-$2 lb., the price had dropped to 30-40 cents. Over time they built it back up and now there's a big market presence for wild seafood."

Has our shrimp been branded?

"Absolutely not."

Could it be?

"I don't think there's a silver bullet," said Sackton. "It takes a lot of years and a lot of money. In the case of ASMI, a lot of the cost was shouldered by processors themselves. A retailer would say that if they wanted so much shelf space, they'd have to pay a few hundred thousand dollars."

And what worked for salmon might not work for coldwater shrimp.

"You don't serve a dinner to someone that's just coldwater shrimp," said Sackton.

"There's very little product development in coldwater shrimp - you cook it and peel it and that's it. I think none of the plants in Newfoundland are set up to produce value-added. That's part of the solution. There are a lot of things you can do with it that would divert some of the product and raise the price for that which remains."

Association of Seafood Producers executive director Derek Butler, however, pointed out that secondary processing isn't a silver bullet either.

"In order to secondary process you have to have an industry that has the margins to grow their business - Newfoundland has never been a place that has those margins," said Butler.

"Plus, you have to keep in mind that just because you do something more to the product, doesn't necessarily make it more desirable. If someone wants to eat cod, they want a fillet - they don't want something you squished into a can. Then there are the issues of tariff barriers - the more processing you do to a product the more tariff you pay for it to get into the EU. It won't be enough just to get the market to pay more for product, the industry also needs to be more efficient."

Genge has two quotas - one allowing him to catch 200,000 pounds of shrimp in the Gulf of St. Lawrence and another for 500,000 pounds of northern shrimp in Area 6, off the Labrador coast and the east side of the peninsula.

That's a busy summer and weather keeps the Newfoundland Storm from fishing much past October.

So it's not that his boat is sitting idle.

New regulations allow him to build a boat up to 85 feet long that could hold more shrimp and fish longer into the fall, but other regulations, coming from Transport Canada, would reclassify his boat as a "large fishing vessel" and add new safety requirements that would further eliminate his profit margin. Plus, he can't really afford the $44,000 in annual payments he has on the Newfoundland Storm.

Genge and other members of the inshore fleet are worried that they'll be pushed out and replaced by factory freezer trawlers that catch shrimp more efficiently but aren't independent from processing companies or owned by the fishermen who use them.

"The solution is not necessarily factory trawlers," said Butler. "Gulf boats (from Quebec and New Brunswick) have much larger quotas in the Gulf of St. Lawrence than Newfoundland boats."

Gulf of St. Lawrence quotas are much more profitable for fishermen. Genge can catch his 200,000-pound Gulf quota close to the wharf, burn less fuel and spend less time on the water. For his 400,000-pound northern quota, however, he has to steam up to 200 miles and fish late into the fall - often facing rough weather.

So fewer boats with larger Gulf quotas could be a partial solution for a few fishermen.

For whether or not the industry working groups will come up with more ideas, we'll have to wait until next spring.

In the meantime, Genge is wondering how he's going to keep making the $44,000 in annual payments on his boat through the winter after such a bad year.

He looked out across the harbour at the line of brightly coloured draggers, each the pride of some cove, and said, "You cannot go to the store and pay anything less for this shrimp, none of the prices has drooped to the consumer. There's something wrong here. I think there should be able to be a living come from the sea. If we can scrape up all that dirt form the tar sands in Alberta and pay all those workers all those thousands of dollars, and here we are we can't take something out of ocean that's food to put on someone's table and get by, there's something wrong there, b'y. Something's not right."

Organizations: Visa, Straits Star, Alaska Seafood Marketing Institute Fishery Products International Association of Seafood Producers Allied Workers EU Transport Canada

Geographic location: Newfoundland and Labrador, St. Anthony, Northern Peninsula Alaska Port au Choix Anchor Point Southern Labrador Southeast Asia New Zealand Quebec New Brunswick Alberta

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Recent comments

  • Tom
    July 02, 2010 - 13:21

    If you are making less than min wage then the smart thing to do is find a job that pays more. Local shrimp are of poor quality, and if you business is worth over a million dollars, your best bet is to sell it while it is worth something and move on.

  • Taxpayer
    July 02, 2010 - 13:09

    The problem with Mr. Genge's analogy is that people desparately want that black stuff contained in the Alberta tar sands, and will pay darely for it, however very few want the type of shrimp we have here, too small. Time to get out, while you still can.

  • Tom
    July 01, 2010 - 20:05

    If you are making less than min wage then the smart thing to do is find a job that pays more. Local shrimp are of poor quality, and if you business is worth over a million dollars, your best bet is to sell it while it is worth something and move on.

  • Taxpayer
    July 01, 2010 - 19:44

    The problem with Mr. Genge's analogy is that people desparately want that black stuff contained in the Alberta tar sands, and will pay darely for it, however very few want the type of shrimp we have here, too small. Time to get out, while you still can.