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Mixed up fishing numbers

Dear editor, The fishing industry's Report of the Independent Chair: MOU Steering Committee has concluded that in order to remain viable, Newfoundland and Labrador's inshore and nearshore fish harvesting sectors should be rationalized on average by more than 50 per cent and 30 per cent respectively.

But are these conclusions properly supported (not just by the short-term data used in the MOU process), but by long-term, economic life-of-the-vessel data?

The MOU report states, quite clearly, that the "viability (of a fishing fleet sector) cannot and should not be gauged on the basis of a single year's performance (and that viability) a state of affairs that must prevail, on balance, over a longer period (and that)...a suitable guideline would be the economic life of the enterprise's vessel...a 15- to 20-year period.”

Yet, notwithstanding the need for long-term, economic life-of-the-vessel analysis, and even though there were data available to support longer term (economic life) fleet sector viability assessment, the MOU process used (and relied on) short term 'proxy' employment measures --- and relied on data from only one full fishing year (2008), along with some very limited inshore/nearshore 2009 data.

Furthermore, while the MOU process used short-term proxy employment level measures to determine enterprise viability, the report actually states that not only is "viability fleet size" best determined by looking at the total gross earnings available to the fleet "over their economic life... (and that) on the revenue side... changes in the average level of gross earnings are the primary determinant of the number of viable operations that can exist in a given fleet,” but more importantly, the report states that when total gross earnings of the fleet are moving "in a positive direction, a larger (not smaller) number of viable vessels might be supported.”

So, while the MOU process did not utilize long-term, 15-year (economic life-of-the-vessel) gross earnings data, the 2007 Fishing Industry Renewal summit did provide some 15-year data that covers a desired economic life period of the enterprise vessel.

The DFO 15-year data shows that not only did the landed value of the NL harvesting sector increase from $280 million in 1990 to $510 million in 2005 (an increase of 82 per cent), but by 2005 the average landed value per fishing vessel had increased (over that 15-year period) by more than 250 per cent.

So, while some DFO 15-year data was available, it did not seem to support the MOU short-term analysis conclusion that a major rationalization or downsizing of the inshore/nearshore sector is warranted.

Instead, the long-term data seems to point toward the very opposite. That is, the long-term DFO economic data seems to show that over a 15-year period the inshore/nearshore sectors were moving "in a positive direction" (and that in such cases, as stated in the MOU report) such positive movement may in fact show that the harvesting sector, instead of needing to be downsized, could support "a larger (not smaller) number of viable vessels.”

While it is recognized that landed value does not equate to total gross earnings, a correlation would certainly seem to exist.

In comparison to the very short-term (and proxy employment level) viability measures used (and relied on) in the MOU process, it is suggested that the long term economic-life-of-the-vessel data that is available through DFO was (and is) in clear contradiction to the conclusions and recommendations put forth by and through the short term data analysis conducted during the MOU process.

For years now, rationalization has been repeatedly advanced as the necessary and first step towards restructuring the industry (an erroneous position based largely on short-term data analysis and short-term thinking). For years now, our coastal fishing communities have been paying the price.

It is now time to recognize that such short-term data assessment (and thinking) has been (and perhaps still is) pointing the industry (and our coastal communities) in the wrong direction.

By the MOU's own admission, long-term data (life-of-the-vessel economic analysis) is needed to determine enterprise viability.

What long-term data that is available, totally refutes the MOU's recommendation for rationalizing the inshore/nearshore harvesting sectors.

The question is — why the contradiction, and for who's benefit?

Maurice E. Adams



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