Crab deal will pay dividends this year: union
Delayed snow crab fishery has finally started, but there are still challenges and rifts to overcome
CORNER BROOK — The new pricing system for snow crab is a significant step in addressing problems in the contentious fishery, FFAW president Greg Pretty says.
The most lucrative fishery in Newfoundland and Labrador has been in turmoil since pandemic-driven market highs crashed from having a value of about $775 million a two years ago to being worth about $230 million last year.
Harvesters fighting for their fair share of the market price led to a six-week delay in the start of the 2023 crab fishery and, despite efforts to avoid such a scenario from repeating, there was a nineday tie-up this year before Ffaw-unifor — the harvesters’ union — and the Association of Seafood Producers (ASP) finally agreed on a pricing formula.
That deal sees crab harvesters guaranteed to be paid $3 per pound for their catch during the season. After the season ends, an independent review of market fluctuations will determine a sum each harvester should receive in addition to what they made during the season.
‘SETS A PATH’
Pretty has called the deal historic.
“I think it’s one of the best deals that have come forth from collective bargaining and it’s something I think sets a path for the future,” he said. “There are some really good elements of this deal that will pay off to all sectors of the crab fishery.”
For example, said Pretty, harvesters who fished for crab on Tuesday, April 16, without this deal and without yet having any Newfoundland and Labrador crab graded and priced in the market, would have received only $2.83 per pound for their catch.
“So, that $3 is an incredibly important source of income for our members, whether you’re on the deck of the boat or if you own the thing,” said Pretty.
As fresh crab from the province begins entering the market, the price is expected to rise and those accumulations will be tallied and shared later in the year.
“The important part is that, it makes no difference if you fish this week or next month, the $3 will be there, plus your share, depending on what comes out of the market analysis at the end of the season,” said Pretty. “We haven’t seen that before. It’s a much better sharing arrangement and it’s a great first step towards a fishery that has more stability and a more balanced share between harvesters and processors.”
APPREHENSION UNDERSTANDABLE
Critics of the deal say the $3 per pound is less than what harvesters in the Gulf of St. Lawrence are getting.
Pretty said this is not comparing apples to apples, as those harvesters have about 30 per cent of their quota landed and that has an impact on the value of their product.
“Once we get crab in the market, we expect the price to rise. … People will be looking for Newfoundland crab, so it’s very positive,” he said. “Have another look at this when we get our crab in the market and I think people will be surprised.”
Pretty said he understands why some would have apprehensions about this new approach to pricing, but this was the target the union had during bargaining for a pricing formula.
From what harvesters were telling him, $3 seemed to be the magic point to get the fishery started. A higher price would be even better, but it may take some time for the market to rebound to the level harvesters would be happier with, he said.
“Harvesters tell me $4.50 to $5 would be the range we
inn,bdut need to be it’s going to
take a couple of years to climb back to that spot,” he said. “We’re working towards that.”
ALREADY EYEING 2025
While the new formula has gotten the 2024 season started, Pretty said there’s still work to be done to get a system in place that doesn’t result in last-minute negotiations and delays in 2025.
“We’ve had that discussion internally already because we really need to start early,” he said. “I couldn’t predict last year that we would have another tie-up this year based on price because I thought we were on a good path with this. We need to get going on that.”
One thing Pretty wants looked at is whether the province’s Standing Fish Price-setting Panel is capable of doing a proper job on pricing. The lack of agreement between the FFAW and the ASP in both 2023 and 2024 resulted in the price being set by the panel, but both of its decisions only resulted in disgruntled harvesters who refused to fish for the set price.
The panel has been required to choose either the proposal submitted by the union or the one from the processors in what is known as final-offer selection.
Pretty said there needs to be a truer arbitration system than that.
“(Final-offer selection) was supposed to move both parties closer to the market situation and we’ve kind of gotten away from that,” he said. “We need a more judicial, fairer system for arbitrating those prices.
“We will be looking at that.”
JUST ANOTHER COMMODITY
Pretty said it may take two or three years to fine tune a formula-based pricing system both sides agree with, but it’s not impossible.
“It’s a commodity, it’s no different than pork or eggs,” said Pretty. “Once you establish what costs are and the currency issues are, you can land where you should be on a pricing formula.”
Having an established pricing formula would mean stability for the industry, he said.
“I’ve talked to a lot of harvesters who said this is awful, that they should be getting ready instead of protesting,” Pretty said. “There’s no stability in that. Harvesters need that stability to move forward and get ready for these seasons.”