The crisis in the crab industry took an unexpected twist Tuesday, with the Association of Seafood Producers (ASP) calling for an industrial inquiry into the province's most lucrative fishery.

The association has also once again gone to the fish price-setting panel, asking for another reduction in the price paid to fishermen for raw material.

The association, which represents most of the 30-plus crab plants in the province, requested the inquiry during a meeting Tuesday with Human Resources, Labour and Employment Minister Susan Sullivan.

Executive director Derek Butler said the association wants the province to abolish the price-setting panel and return to a system of final-offer selection and a single, independent arbitrator.

"We've got to get past the current crisis in the fishery and I think the big picture can only be addressed through a proper industrial inquiry," Butler said.

Butler said the panel is proving to be nothing more than a facilitator and mediator, rather than a body that determines fish prices based on market conditions.

"This is no reflection on their professional qualifications and their past histories, but in the nature of this I don't think we have straight-up arbitration," he said.

The fish price-setting panel is an arm's-length body of the provincial government under the Department of Human Resources, Labour and Employment. Members include chairman Joe O'Neill, Max Short and Bill Wells. It was established in 2006 to help address the many price disputes that plague the fishery.

Meanwhile, the ASP is now asking the panel to lower the price for crab to $1.12 per pound. The request came a day after the panel lowered the price from $1.55 to $1.40. Producers had initially asked for a price of $1.32, but say the market is continuing to slide.

The association wants the panel to bring back a formula that sets raw material prices based on conditions in the marketplace, including currency exchanges. The panel, under pressure from harvesters, abandoned the long-standing formula last year in favour of a seasonal price, but Butler said that was a mistake.

Butler said the market price for crab is roughly US$1 per pound lower than it was a year ago, yet prices for raw material do not reflect that reality. He blames the weakening market on a global economic recession and a declining demand for high-end food items like crab.

"We want the panel to make an urgent decision to revise the price again so the business can be sustainable," Butler said, adding he wouldn't be surprised if some producers stop buying crab while they await a new decision from the panel.

"Why for 10 years was it sustainable that we live under a model that would have produced a $1.12 price, and today we're supposed to pay $1.40? It's not in anybody's interest ... that the fishery not be sustainable for processors," he said.

Butler also challenged comments made this week by fisheries union president Earle McCurdy. McCurdy suggested that some of the problems in the industry were the result of some crab processing companies "dumping" product into the marketplace.

"It's incredibly naive to think a couple of producers could take down the crab market in the world," Butler said.

McCurdy said late Tuesday that he welcomed an inquiry, saying "the manner in which they conduct themselves could well stand some scrutiny."

As for the ASP's call for a return to final offer selection and the abolishment of the price panel, McCurdy called it a power play aimed at reinstating the two-week price adjustment formula that "puts the entire risk of the market on the shoulders of the harvester." He said processors want the panel dismissed because it's easier to "bamboozle" an independent arbitrator.

"This is about continuing the system of low-ball base prices so they can fool around under the table with big bonus payments," he added.

The union is advising its members to continue harvesting and selling for the new price announced Monday by the panel.

The issue also came up in the House of Assembly, with Liberal Leader Yvonne Jones saying she had learned that processors would no longer buy crab after 6 p.m. Tuesday.

She asked Fisheries Minister Tom Hedderson if he could confirm a shutdown and what the department was doing to sort out the dispute over the price of crab.

"It would be inappropriate for me to make any comment on that until the panel makes a decision," he said.

Jones asked Hedderson if the province has a contingency plan in place if the crab fishery was shut down. Hedderson said he wasn't aware of a planned shutdown and he wouldn't engage in "fear mongering."

Sullivan said she wouldn't be commenting until she receives a formal request for an inquiry from the ASP.

troberts@thetelegram.com dbartlett@thetelegram.com