Canada’s Atlantic Fisheries A big business for small communities
$1.8 billion in landed value 2011
Lobster 34%
Crab 25%
Shrimp 17%
Groundfish 10%
Pelagics 5% Other shellfish
9%
Big three = $1.4 billion or 76 %
Distribution of landed value
Owner operators
75%
Corporate 25%
Why do owner-operators have so much of the value?
Lobster 99%
Crab 100%
Shrimp 60%
Groundfish ?
Pelagics ?
Other shellfish
?
It wasn’t always this way.
Big Three = 38% of total value in 1990
Lobster 25%
Crab 5%
Shrimp 8%
Groundfish 42%
Pelagics 10%
Other shellfish
10%
Who are the owner-operators?
Not the same everywhere
Setting day Newfoundland
Setting day Sou’West Nova
• Region ’s largest private sector employer
• 10,000 individual enterprises
• Employing 20,000 crew
• Almost entirely rural based
• All independently owned & operated
Common policy framework
Owner-Operator: have to fish licences personally
Fleet seperation: processors can’t hold o-o licences
Common policy framework
Main threats Weak policy enforcement
• Corporate predation
High investment costs for new entrants
• licences and quotas
Low return on investments
• increasing operating costs
(fuel, bait, management)
• weak markets
DFO promoting concentration
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
NS NB PEI QC NL
Ind Core
Core
Age profile 2004
0%
5%
10%
15%
20%
25%
30%
35%
40%
< 35 35 - 39 40 - 49 50 - 59 60 +
Atlantic
Pacific
New entrants face higher investment costs
1973-1983 1989-1998 2005-2011
Profits at least 25% lower for new entrants Low profitability
• Drives out fishermen • Requires higher efficiency…. builds pressure for concentration & vertical integration
Fleets opposed to vertical integration
Reduces dock-side competition & owner-operator bargaining power – Lower prices paid to independent harvesters
– Reduced resources to other processors / wholesalers
– Leads to concentration
Results in lower employment
– Less jobs in some communities
– Conflicts between communities
– Conflicts between provinces
Today’s Globe and Mail
Productivity overrated as a key to growth “…focussing on efficiency at the expense of jobs and hours worked could lead to ‘greater unemployment, income loss and reduced well-being’.”
- Andrew Sharpe, Editor International Productivity Monitor
Fleets seeking alternatives
Major fleet managed buy-backs in last 2 years
Looking at fleet managed initiatives to facilitate intergenerational transfers
Exploring marketing and branding to increase revenues/incomes
Can social finance help?
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