Cod — Rebuilding the Past or Building the Future?

In the past couple of columns, I have discussed the increasing abundance of cod and what it may mean for our capture fishery.

Last month, I ended with the suggestion that we need to focus on the kind of future we want to build, not on the past we lost that really wasn’t as good as some people seem to think. This month, I will pick up from there.

As we contemplate what we will do in response to the return of cod, we need to ask ourselves, “are we rebuilding the past or building the future?” In my discussions with people about this issue, I have been amazed that most seem to think we will simply bring forward all the old assumptions about how a cod fishery should work — the size of the biomass needed to restart the fishery, how quotas will be set, the structure of the fishing fleet, the fishing gear we will use, the markets we will sell to, etc… And only a few are thinking about what we need to do to build a fishery likely to succeed in the modern world.

Maybe we will rebuild what we had in the past. But if we do, I think it will be a big mistake.

First, we need to acknowledge the cod fishery we had prior to the 1992 moratorium just didn’t work.

Within four years of getting the 200-mile limit in 1977, practically the entire fishing industry in Atlantic Canada was bankrupt or close to it. It took several more years and a lot of government money to turn that around. I know, because I was there, working to turn the situation around.

By the late 1980s, it was already apparent we were overfishing our cod stocks, but we couldn’t face drastic quota cuts, so we fished until a moratorium was the only way out in 1992.

Along the way, we built up way too much capacity for catching and processing. The moratorium left a lot of people without work, a lot of vessels and plants without a supply of raw material and a lot of communities without a viable economic base. Does that sound like something we should try to recreate?

Second, we also need to acknowledge the world is now a very different place than it was in 1992.

Back then, we sold practically all our output to the United States, where cod was one of the most popular fish species among consumers. Today, the United States represents about five per cent of the global market for cod.

On average, each U.S. resident consumes just 0.605 lb — about 2 servings — per year compared with 1.430 lb of tilapia, 1.154 lb of pollock, 0.771 lb of pangasius, and 0.566 lb of catfish. It’s worth noting that tilapia, pangasius and catfish are species farmed fairly cheaply, but have mild-tasting white flesh and are now used in place of cod.

In 1992, tilapia and pangasius were practically unknown in the U.S. market. It’s also worth noting that pollock, caught in a very efficient large-scale fishery in Alaska, is now the main species used for block products that get turned into fish sticks and breaded and battered fish portions, a niche once dominated by cod.

Does anyone seriously think we can just waltz back into the U.S. market with our cod and expect buyers to pay higher prices than they pay for products made from these other species?

Furthermore, the world is a different place because of aquaculture and free-trade agreements that have facilitated freer flows of seafood around the world, creating much more intense competition for the more desirable markets. That is how tilapia and pangasius have made big inroads into the market in the U.S., as well as Canada and other countries. Because of the increased intensity of competition, buyers’ and consumers’ expectations now differ from what they were in the past.

Aquaculture has conditioned them to expect year-round supply with consistent size and quality and stable prices. To stand up to that competition, capture fisheries elsewhere have tremendously improved their abilities to deliver high quality products customized to the particular needs of different buyers and consumers. We will need to do the same.

In addition to the reasons outlined above, we need to acknowledge we simply cannot rebuild the labour-intensive industry we had in the past. If we did, our costs would be too high for our products to be competitive. But the main reason is that the people are just not there. The baby-boom generation that has been the source of labour in the recent past is gradually moving into retirement.

Younger people are fewer in number and not many are being attracted to work in the industry. For the future, we are going to have to create an industry that employs fewer people but offers those people better wages and working conditions, to entice them into the industry.

Creating the new cod-based industry will require a lot of investment to build or modify fishing vessels and fish plants, buy fishing gear and processing equipment and establish a presence in attractive markets.

Where will that money come from? Fishers and plant owners nearing retirement age are not likely to want to make big investments. Younger people will likely have to borrow heavily to invest but will they find the industry sufficiently attractive to take on the risks?

Overall, we have to recognize we have not been in the business of harvesting, processing, and marketing cod in any major way for nearly 25 years. Because of that, we have not kept up with our knowledge of markets for cod products or with the technologies and operating methods used to supply markets with cod. We cannot simply pick up where we left off and carry on as before.

As I have said in this column before, it’s not what you know that gets you in trouble, it’s what you think you know but you don’t. That currently seems to be our situation with cod. Because we have had a long history with cod, we think we know a lot about it. But the world of cod has changed since we were a big part of it. What we now think we know will get us into a whole lot of trouble.

Fundamentally, what we need to do is build an industry based on cod that has a reasonable chance of being successful. By that, I mean a reasonable chance of being competitive in international markets, achieving economic viability, attracting the people and investment it needs, providing good incomes to the participants, and ensuring the resource is sustainable over time.

Because of the need to improve our knowledge of resources, markets, technologies, and operating methods, the Canadian Centre for Fisheries Innovation is planning a conference focused on cod and what we need to do to prepare for its return.

The conference will likely be held in late fall of 2015. If you are interested in attending, stay tuned for additional information about the time and place.