Despite Newfoundland and Labrador’s Standing Fish Price Setting Panel siding with the price put forth by harvesters this year, the 2020 season will still be a challenging one.
The panel recently accepted the Fish Food and Allied Workers’ (FFAW-Unifor) price recommendation of $1.18/pound for Northern shrimp landed at the plant and $1.15/pound for trucked shrimp.
Last year, fishermen were paid a minimum price of $1.78/pound. At the time, it represented an 18 per cent increase over the 2018 price and the highest minimum price ever for the spring shrimp fishery. The 2018 price was $1.46/pound, up from the 2017 level of $1.25.
The Association of Seafood Producers (ASP), which represented processors at the panel hearing, had offered $0.70/pound, which amounted to a 57.6 per cent reduction from the minimum price in summer 2019.
Along with a price reduction, inshore harvesters in shrimp fishing area (SFA) 6 are also up against 2020 quota cuts.
Earlier this year, the Department of Fisheries and Oceans (DFO) announced that the 2020 total allowable catch (TAC) in SFA 6 would be reduced by 7.5 per cent to 8,290 tonnes to maintain a 10 per cent exploitation rate.
Last year, DFO actually announced that the total allowable catch in SFA 6 would be increased by 2.6 per cent to 8,960 tonnes to maintain a 10 per cent exploitation rate. The first increase in several years. SFA 6, off the northeast coast of Newfoundland is the only shrimp fishing area in that region where inshore harvesters are permitted to catch shrimp. The more northern shrimp fishing areas (SFA 4 and SFA 5) are only open to offshore vessels.
In 2018, DFO imposed a 16 per cent cut to the inshore Northern shrimp quota in fishing area 6 — meaning the total allowable catch for SFA 6 went from 10,700 tonnes in 2017 to 8,730 tonnes in 2018.
DFO said the reduction was needed to achieve a 10 per cent exploitation rate.
The cuts in SFA 6 have been dramatic over the last few years. In 2017, the TAC was cut by 63 per cent — from 27,825 tonnes in 2016 to 10,400 tonnes. In 2015, the TAC was 48,196 tonnes.
In its written decision, the panel stated that it appeared both parties presented “aggressive” offers given the realities of the COVID-19-impacted marketplace.
“The panel feels the right price is clearly somewhere in-between. The question for the panel is which offer is closest to the 2020 market reality?”
“The panel has on previous occasions noted that season to season comparisons are most appropriate, but it does appear that the harvesters’ share in 2019 was in their favour. ASP makes the case for a recalibration of sharing, that was in place in 2014, when the minimum price was set at $0.87. However, there is no conclusive analysis that demonstrates the 2014 minimum price level represents the appropriate sharing of return for the current year. The panel notes that the three panel decisions in 2015 were in favour of the FFAW, which indicates some readjustment of sharing in favour of harvesters occurred in 2015. This was supported by the panel at the time. However, in 2016, the parties reached agreement on summer pricing. Since 2016, the panel decisions and agreements between the parties have been more balanced.”
The panel noted that it felt that sharing has likely tilted in favour of harvesters over the past five years. “However, the appropriateness of a full adjustment of sharing to 2014 levels is not substantiated in the ASP submission. It is the panel’s view that ASP has overreached by seeking a 57.6 per cent reduction in harvesters’ prices, which would, at the same time, significantly improve their share relative to recent years. This suggests much lesser sharing by processors of the current market downturn while harvesters would have a significant reduction. At the same time, the panel recognizes that the FFAW offer will likely put considerable pressure on the viability of shrimp processors in 2020, particularly if bonus payments continue to be in play in the competitive port market environment. However, bonus payments are at the discretion of processors.”
The more northern SFA 4 and 5 also took significant quota cuts this year.
DFO has reduced the TAC in SFA 4 for Northern shrimp by 20.2 per cent to 8,658 tonnes (18 per cent exploitation rate (ER) using a two-year average), which includes a 1,500 tonnes allocation for Use of Fish under Section 10 of the Fisheries Act.
The TAC in SFA 5 suffered an even bigger hit with a reduction of 34.6 per cent to 14,450 tonnes (20 per cent ER using a two-year average).
