SEAFOODNEWS.COM — September 19, 2014 — Newfoundland's seafood industry is on the cusp of major changes.
More than 20 years after the historic collapse of Northern Cod, not only is cod returning, but conditions are in place for a radical transformation of the industry over the next five years.
But like any major change, the experience will likely be wrenching.
Earlier this week I attended a meeting called Fishery of the Future hosted by The Canadian Center for Fisheries Innovation, which brought togther many of the active participants in the fishery – from fish plant owners to vessel owners and aquaculture companies – all focused on how the fisheries are going to change and how best to use the $400 million in funds allocated for this transformation.
As part of Newfoundland's agreement to end its requirements for processing all seafood in the Province as part of the Canada – EU free trade agreement, the Canadian federal government and the Province have pledged $400 million in funding, to be paid out over three years starting in 2015.
At the same time, the plant workforce is aging rapidly, and is becoming a limiting factor for current fish processing practices.
On the water, many of the younger harvesters are eager to expand their quota shares and invest in modern state of the art vessels, but need a consolidation plan to do so.
The result is an opportunity not to compete with China – which has a major advantage in producing low cost commodity fish – but to transform the fishery to look much more like fisheries in Iceland and Norway, where the industry is supported by production of the highest value products, has the world's best technology, and still is vital to many rural communities.
It all starts with cod.
Dr. George Rose is the world's foremost expert on the Northern Cod. He is the Scientific Director, Centre for Ecosystems Research, at the Marine Institute, and he presented a series of fascinating slides.
First, cod is coming back to Newfoundland. The Northern cod stock, still under moratorium, is just a few years away from passing the spawning stock threshold to allow a fishery to restart. The age structure of the stock is phenomenal, with very good percentages of huge older fish. Dr. Rose can count fish size and age structure using acoustic methods. The latest DFO survey results, though not yet released, are again expected to show growth in the spawning stock.
Second, capelin – the reason for the huge cod stock – are back with a vegence. You can now steam 150 miles across the Grand Banks, and be continuously over capelin.
The recent DFO trawl survey has found the highest capelin abundance ever, said Dr. Rose. And this is born out by the Provincial acoustic surveys.
While environmental groups hold up the Newfoundland cod collapse as the poster child of fisheries disaster caused by overfishing, the actual situation was much more complicated.
Dr. Rose compared Newfoundland cod to an old growth forest. It has a huge biomass, but once established, it has low productivity, so the relationships between biomass and fisehery removals which might hold in faster growing stocks don't apply to Northern Cod. So fishery removals were too high.
But the bigger factor was a regime shift to a cold water regime. Water temperatures in the Labrador Strait dropped to where they were simply inhospitable for cod and capelin. The result was movement of cod out of the area, and recruitment of crab and shrimp – both cold water loving species.
For the past six or seven years, that temperature regime has reversed. That is why the cod stock is explosively growing, and the age structure is stabilizing. Dr. Rose said that six or seven years ago, they found almost no large cod over five years old. Now they are plentiful.
He also looked historically at Newfoundland cod stocks compared to Iceland and Norway and the Barents Sea. The Newfoundland stocks are much larger, and their robustness was what brought European fishers from their home grounds to Newfoundland. Over time, he says, this dominance will reassert itself, and the growth potential for the stock is huge.
So, crab and shrimp, the two money fisheries in the province, are declining. Although they won't disappear totally, they will represent a smaller and smaller proportion of the Provincial fisheries, to be replaced by cod and flatfish.
In the past, many have dismissed fresh fish from Newfoundland as not profitable, but Ross Butler, from Cooke Aquaculture, who also spoke at the meeting, talked about how they get fresh salmon from their remote site in Cupquelan Fjord in Chile. It is a 12 hour trip from Santiago; but with the right logistics, fresh salmon can be shipped out several times a week.
Newfoundland is closer than either Iceland or Norway to the huge fresh cod market on the US East Coast.
Also participating in the meeting were Norwegian and Icelandic fisheries business experts. The key trait, agreed by all the speakers, was the need to concentrate on high value products. Iceland sells about 20% of its cod fresh. Norway sells fresh, but also high quality salt cod, plus single frozen loins and blocks.
If Newfoundland is going to compete with a high value cod fishery, it wil have to have a product mix that allows for maximizing the highest value products – fresh, and single frozen portions. Working back from there means changes in processing plant design, vessels, and quota systems – so that a reliable high quality year round fishery can develop.
The transformation also needs to face significant social issues – a fishery built around 8 weeks of seasonal work and unemployment cannot provide the return needed for all the investment to produce high value products. Instead, a change to a year round fishery with fewer harvesters and plant workers, but year round employment and scale to invest in technology is going to be necessary.
This is where the $400 million in compensation from the trade agreement comes in. This type of transformation would likely not get off the ground without external payments to catalyze some of the changes.
On its own, the market and the status quo of small distributed processing plants and small part time quotas for harvesters will mean inertia is too great, and the danger is that the money will be spent on compensation without generating the changes needed for long term global competitive excellence.
That was why the intitial meeting called by CCFI was so positive – it brought all the industry players together, and after two days, did instill a spirit of optimism that a chance truly existed for such a major transformation.
Newfoundland as the center of a globally important profitable high quality cod fishery? Lets check in again in 2025.
This story originally appeared on SeafoodNews.com, a subscription site. It has been reprinted with permission.