Forming a new company to sell resource
Lobster harvesters in Newfoundland took a giant leap of faith on April 22 as they decided, with the support of the FFAW/CAW and the Fogo Island Co-Op, to begin the process of forming a cooperative based company to sell their lobsters to mainland markets.
The move stems from the frustration harvesters have felt in the past few years about not having received a fair return of the market prices for their resource.
The final blow came recently when the Seafood Processors of Newfoundland and Labrador (SPONL) said they could not afford to buy lobsters based on the formula set by the provinces’s fish price setting panel.
George Joyce, the executive director of SPONL, said that a lot of processors lost money in 2011 based on the Urner Barry pricing formula and that they could not afford to continue this trend in 2012.
David Decker is the secretary-treasurer of the FFAW/CAW.
Decker said, “The last comment we heard from SPONL is that ‘we’re not buying lobsters in 2012 and we’re not negotiating any more in the pricing process’.
“Their stand is clearly about one thing – they are out to break harvesters as they want to be able to dictate what prices they will receive. Basically, they just want to sell the product into the marketplace, deduct their expenses and what they want for themselves and pass the rest on to harvesters.”
Decker said that harvesters had two choices based on SPONL’s decision – either to lose the 2012 lobster season or to cave in to their old way of doing things.
“We took a different approach based on our meetings in Marystown, Harbour Breton and Stephenville on Sunday (April 22). About 200 harvesters signed up to be members of a company that will be formed based on cooperative principles.
“We are aggressively working with Fogo Island Co-Op officials to put everything in place. We’re already talking with buyers on the mainland to move lobsters on behalf of the new entity.”
Decker said that the company has two main objectives in mind.
“Our short-term goal is to move lobsters into the marketplace as we want harvesters to start earning money for the 2012 season.
“The harvesters, for the long-term, want to enhance the value of Newfoundland lobsters and to brand our product as being one of the best in the world. We’ll also be concentrating on building a sustainable industry that will address issues such as MSC certification and traceability in the industry.
“It’s a long road ahead but, based on Sunday’s meetings, harvesters really want to see this work.”
Decker said that harvesters would receive a price for lobsters on Thursday, April 26 and on Tuesday, May 1 based on the Urner Barry pricing formula, which is set around lobster prices in the Boston area.
Phil Barnes, the general manager of the Fogo Island Co-Op said that the co-op was prepared to work with the FFAW/CAW on the issue as long as there was a long-term initiative to form a company that will help harvesters today and in the future.
Barnes said that, in the short-term, the FFAW/CAW will be using the Fogo Island Co-Op buyer’s licecne to purchase lobsters this year. The receipt the harvesters receive will say Forgo Island Co-Op but they FFAW will be buying the lobsters and taking all the risks associated with the venture in 2012.
He said that selling the lobsters on the mainland should not be a problem.
Barnes said, “Our sales official, who has good connections on the mainland, will be helping the harvesters move their product to the markets. We will be helping in these market situations and will be doing some of the basic leg work for the new company.”
Barnes said the direction the new company takes and how long a life span it may have depends on the harvesters.
“It’s up to fishermen to fix the situation for the long-term. If they’re going to stick with the plan and make a commitment to go forward with this cooperative initiative then that’s fine.
“However, if they back off and go back to where they were last year in having buyers come on the wharf to start purchasing again, then I’m afraid this will never work. The balls in the harvesters’ court now, and we’ll have to wait to see how it all plays out.”