The Seafood Producers of Newfoundland and Labrador (SPONL) reached an agreement with the FFAW/CAW on May 4 that ended the two-week long dispute in which many lobster buyers refused to purchase lobster at the beginning of the 2012 season.
The agreement continues to tie prices for lobster to market conditions, adjusted on a weekly basis, using the Urner Barry commercial market reports. However, both sides made a compromise in the agreement in that while the Urner Barry formula is still in play, the amended formula effectively reduces raw material prices by 10 to 12 cents a pound - roughly two and a half percent.
The amended formula came into effect on Sunday, May 6.
Earle McCurdy, the president of the FFAW, said that harvesters twisted SPONL’s arm with their co-op venture and made them want to get back to the bargaining table.
McCurdy said, “I think SPONL thought we would fall flat on our faces with the co-op venture where we said we would partner w3ith the Fogo Island Co-Op in moving lobsters to the marketplace3.
“When it became clear we were able to move lobster we really forced their hand and, as a result, we have this agreement in place.”
McCurdy said that the agreement was very timely for the FFAW/CAW.
“Our reasoning fro accepting this agreement now is that the Northern Peninsula is about to open with hundreds of lobster harvesters. We also have other areas of the Northeast Coast opening the lobster season soon so it was really beyond our capacity to organize and pout trucks through to all those areas in addition to the areas that were already open.
“I think the bulk of sales in the lobster industry for 2012 will be through the traditional buyers because of the volume of resource and the sheer logistics of putting everything in place for us in such a short time frame. In addition, some harvesters fish in areas where it is difficult to hold lobsters fro any period of time.
Co-Op idea still very much alive
McCurdy said that while the bulk of sales in 2012 may go the traditional buyers’ route, the idea of a lobster co-op by and for harvesters is still on the table.
He said, “This deal will certainly help us in 2012, but the message we want to send to our members, to our members, who have been tremendously supportive, is that the co-op idea is here to stay. We are looking forward to our options for buying fro the rest of this year, which will probably be restricted to areas where there may be shortfalls in terms of marketing.
However, we survived our baptism by fire, and I think we now have a really firm foundation in place to be able to say that 2012 was a turning point in the evolution of the lobster fishery in this province. We are looking forward to working with our elected board members and officials from a Prince Edward Island lobster co-op who will be helping us move forward in 2103 and beyond.
George Joyce, the president of the SPONL said that in order to salvage the 2102 lobster season both sides realized that a change was needed to be made to the Urner Barry formula fro pricing lobsters.
Apparently, the amended formula recognizes that a portion of the sales from Newfoundland realizes a lower price in the market because it does not meet the specifications for the premium price.
As for the ongoing process of forming a lobster co-op among harvesters Joyce said. “I wish the FFAW and the harvesters good luck in the project. Any group, other than the SPONL, buying lobster has the same restrictions and obligations we do in purchasing the resource.
“There are still structural issues that remain unresolved in the industry, and we will be sitting down as soon as this season is over to make sure we don’t position ourselves (both parties) in the same impasse in 2013.
“The onus is on everybody involved to sit down and put a long-term plan in place for all stakeholders in the industry. I think the last thing anyone wants is to be back facing the same issue at the start of the 2013 lobster fishery.”