McCurdy dismisses processor proposal, slams government inaction
Continuing discontent in the province’s fishery reached new heights last week when efforts to find a solution to a price dispute in the crab industry collapsed.
He said it wanted the province to provide inventory financing of up to $100 million to hold about 35 per cent of the crab quota. Doing so would help avoid the practice of dumping all the product into the market at the same time and driving the price downwards, as has been the case in recent years.
Government would assume the risk, and hope the market would remain strong enough to recoup its investment.
Jackman said a legal opinion from an international trade lawyer warned the government that doing so would pose a risk.
“ If we open that door, we don’t know where it could lead,” Jackman said.
The minister seemed to suggest the ball was clearly in the court of producers and harvesters.
“ We, as a government, can’t set a price. This is incumbent on the parties here to get a price and get the fishery started,” he said.
Meanwhile, ASP executive producer Derek Butler also provided details of its offer to harvesters.
He said producers were prepared to offer $1.19 per pound, but under a new formula that would see harvesters paid a “ fishing price” of $1.09, and another dividend at the end of the year, based on returns in the market.
It’s a formula similar to the one used in the Alaskan crab industry.
Jackman also seemed to endorse such a formula.
Butler said producers would open their books for an audit at the end of the year to ensure transparency.
Butler said the union rejected the offer, saying they would stick with the $1.35 price set by the province’s price-setting panel, and turn to the government to bridge the gap.
“ That’s a huge change for us, and I would have thought that would have gotten us further,” Butler said.
Butler said producers are also sympathetic to the government’s position.
“ They don’t want to run these countervailing risks, and neither do I. All that does is ensure we shut down the fishery next year when we get this huge countervail hit and have to pay fines in the millions of dollars on a go-forward basis because of what we’ve done,” he said.
According to government figures, more than 20,000 people work in the crab fishery, and it’s worth hundreds of millions of dollars to the economy each year.
But the industry’s viability is being challenged by factors such as a strong Canadian currency, and a worldwide economy that is still recovering from recession.
The price-setting panel recently set the price for crab at $ 1.35, a decision that prompted producers to refuse to buy any raw material.
The harvest was scheduled to open April 1, but so far there’s been only limited activity, and hundreds of fishing enterprises and nearly three dozen plants are idle.
FFAW president Earle McCurdy speaks with reporters at a late afternoon news conference in St. John’s Thursday.