In late November, one of the biggest seafood industry meetings in years took place in Gander, Newfoundland.
Close to 200 harvesters, processors and industry experts discussed the options available to the province as the historic Northern cod stock rebuilds.
The meeting, entitled Cod — Building the Fishery of the Future, was put together by the Canadian Centre for Fisheries Innovation (CCFI) housed at the Marine Institute in St. Johns.
Alastair O’Rielly (Chair of the Board for CCFI), opened the meeting by outlining a three-stage process where first, facts about the market and production in the global cod industry would be laid out. Then, in a follow-up meeting, ideas to improve and shape the fishery would be taken up and after, a third meeting to shape industry recommendations around the preferred option for development.
This initial meeting was designed to layout the facts about the global cod industry and featured a number of international speakers. It successfully avoided coming apart over the elephant in the room, which is the question of allocation of future cod quotas.
The pitfall in Newfoundland is to avoid allowing the conflicts between inshore harvesters and processors, who buy inshore fish but also hold some offshore quota, to spiral out of control and lead to a situation where cod cannot economically sustain the rural fishery.
The Canadian Fisheries Minister, who has discretion in assigning quotas, has committed the first 115,000 tonnes of Northern cod quota to the inshore fishery.
In addition, companies such as Icewater Seafoods and Ocean Choice International are the current holders of offshore quota rights which in the past allowed Fishery Products International vessels to land hundreds of thousands of tonnes of offshore cod. At present these quota rights would kick in once the quotas rise over 115,000 tonnes.
Despite a trajectory of resource growth, the first science presentations showed that with a stock biomass of around 300,000 tonnes, there is still considerable uncertainty about when the stock will reach its biological reference point of 650,000 tonnes, at which fishing can sustainably be done on a large scale.
Some had hoped to see this within five years, but a poor 2016 survey has created doubt and the more pessimistic outlook is that it may take 10 years for the stock to grow to this point.
The DFO will soon begin annual surveys of Northern cod (it had only been doing it every other year) and the results of the 2018 survey will be known in March, 2018.
The current cod fishery is largely done by small boats, under 35 feet, using mainly gillnets, in the summer months.
The debate is whether this fleet can provide the quality necessary for a premium single frozen or fresh Atlantic cod product.
There was a lot of consensus that selling cod at the low end of the current market, competing with twice frozen Chinese product for example, would not provide anywhere near the income needed to support a rural fishery. To even think about replacing a significant fraction of the income now earned from snow crab and shrimp, the province would have to sell a premium cod product similar to Iceland.
But selling premium products on a large scale is not easy.
Todd Clark, who presented the Groundfish Forum outlook on cod and also spoke to food service industry cod demand, said “It’s important to set a specification that is hard to meet. Otherwise it won’t be done consistently.”
Representatives of the cod industry in both Iceland and Norway detailed both the way in which these industries operate today and also how they had to overcome a number of problems to reach the value they currently have.
CCFI has been sponsoring numerous trips to Iceland and Norway and has found both countries extremely cooperative in sharing information. No one wants a new player to come in and wreck the cod market.
In Newfoundland, one issue is whether the industry could focus on fresh cod loins similar to Iceland. The logistics out of Newfoundland for fresh fish are far weaker than those in Iceland.
However, Ross Butler, a Newfoundlander now running Cooke Aquaculture’s U.S. operations, detailed how his company is shipping tonnes of fresh salmon from its operations in Newfoundland and also from its remote operations in region X in Chile.
Butler said distribution issues can be overcome if the quality and volume is there to support it.
O’Rielly opened the conference saying it would not be the venue to discuss the political issues currently being fought out in the cod industry.
There are two competing industry associations, two separate fishery improvement projects and a general divide between the union-friendly association and one supported by the processors who also have offshore quotas. The groups mirror the divide over whether the inshore gillnet fishery using current vessels will be sufficient to support a premium product in the market, or whether the fishing methods, handling, and even type of vessel, may have to change to meet what customers expect today.
There is also a new cod fishing industry advisory committee that includes all stakeholders and this group is likely to be where major differences are hashed out and recommendations about how rapidly to increase quota and other issues will be made.
The conference was largely successful at avoiding this discussion and met the goal of getting the facts on the table for everyone.
The overall conclusions were:
- The cod stock is recovering more slowly than thought and all parties are awaiting the next survey before arguing over the best precautionary approach.
- Pricing for premium fresh and single frozen products is the only source for the revenue needed for any investment and upgrades to the fishery. Any thought of returning to the block and salt fish and cello market is simply not practical, because the revenue would not support the rural communities and processing operations that all sides in the industry hope to preserve.
- To produce the premium product, all aspects of the fishery, from type of vessel to seasonality, onboard handling, transport, product selection and volume all have to be on the table.
- Finally, the hopeful note at the conference was that the two other major cod countries, Iceland and Norway, also started from a position where their fisheries were in trouble and they developed into economic powerhouses by taking actions that preserved value.
The theme was that Newfoundland did have an opportunity to rethink its cod fishery and that there is at least a possibility that a resurgent Northern cod stock, which once was at four million tonnes, can once again be the long-term economic engine of the province as it has been for most of the last 500 years.
The next step in this process will be announced by CCFI and will likely include a mechanism for discussing various proposals and ideas for transforming the fishery, or the arguments for keeping it as it is today, where there is a summer and fall seasonal inshore fishery that gets a premium price for its Grade A fish.
This article was republished with permission of John Sackton and seafood.com.
