Lots of blame floating around as inshore harvesters and plant workers calculate what they've lost

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The Lone Wolf is lying idle at the wharf in Hickman’s Harbour, Trinity Bay.

The only sound is the lap of water against hull, the occasional screech of sea gulls flying past, hunting for food.

Owners Richard and Melanie Marsh clewed up their crab fishing season in early June.

After that they started gearing up for capelin.

Earlier this year the Department of Fisheries and Oceans (DFO) set a quota of around 15,000 metric tonnes for fishing zones from the south coast (area 3Ps) to the North East coast (2J, 3K and 3L zones).

For the Marshes, and the owners of a dozen other inshore enterprises in this harbour, the capelin fishery is important for their seasonal income, especially for those who don’t have a lot of crab to catch.

Inshore licenses, like the one the Marshes have, grant them just 12,000 pounds of crab.

“This year we landed $82,000 worth,” she said.

And that’s not a whole lot of money to pay a crew and cover the expenses of running a boat.

“Last year I could fuel up my boat for $800,” she noted. “This year it costs $1600.”

Capelin could have added another $30-40,000 to their seasonal revenue, making it the second most important fishery for their enterprise.

But they’re not fishing it.

Read more Newfoundland and Labrador seeking consultations with fishing industry as part of fish pricing model review NL Seafood Producers Association go to court over price setting panel, FFAW

Newfoundland and Labrador seeking consultations with fishing industry as part of fish pricing model review

NL Seafood Producers Association go to court over price setting panel, FFAW

The dominoes started falling when the province’s fish price setting panel made its decision on capelin prices on June 15.

The Association of Seafood Producers (ASP), offered 18 cents a pound for Grade A capelin (catches of 80 percent female fish, valued for the roe), a drop of nearly 50 percent from last year.

The group, which represents most processing companies in the province, cited several impacts on capelin markets for 2022, including the “zero COVID” policy in China that is forcing mass lockdowns in major cities.

The ASP also said Japan is shifting back to getting its capelin from the Barents Sea, from Iceland and Norway, countries that are back to fishing capelin again after a two-year shutdown.

According to the seafood trade publication The Fishing Daily, the capelin quota for the Barents Sea was set at 70,000 metric tonnes this year, with Iceland and Norway taking over half that quota. Russia gets the rest of the quota.

In Japan, where the roe-filled female capelin is a highly valued commodity, buyers also tend to prefer Icelandic and Norwegian capelin over the Canadian product, due to quality, according to a market report by Meros, cited by the price setting panel.

“The increased volumes of Canadian imports in Japan in 2020 were ‘an emergency purchase’ due to the fishing ban in the Barents Sea and the market gap, according to the Meros report.

“The Japanese industry’s assessment of Canadian capelin is having lower quality (mainly in terms of freshness) compared to the other two suppliers, due to smaller fishing vessels, freezing taking place at factories and shipping occurring during summer months,” the price setting panel wrote in their decision.

While there is a market for male capelin, it’s usually at lower value as zoo food.

Even there, customers are touchy.

According to the ASP, zoos in the US are looking to alternative products like lower-cost sardines and small herring to feed their marine critters.

All of these factors, said the ASP, point to a lower demand for Canadian capelin.

They predict the value of Atlantic Canada capelin will fall from approximately $3350 per tonne in 2021 to, at most, $1500 per tonne this year.

The Fish Food and Allied Workers (FFAW) union, which represents inshore fish harvesters, suggested 35 cents a pound was a “realistic outlook” for Grade A capelin, citing, among other things, reports by American-based seafood publication Undercurrent News that suggested while the war in Ukraine was creating market uncertainty, trade was continuing in Eastern Europe and prices were high.

The union acknowledged there are challenges in the capelin market in 2022 that will result in price declines overall, but suggested the declines will be “much more modest” than those predicted by the ASP.

As for that Japanese market, the FFAW contended there is nothing to indicate there will be a major price decline in that market.

“They point out that to date in 2022, prices for Icelandic and Norwegian product in Japan have risen from 2021 levels and note that the decline in price for Canadian product has been based on a small volume of product left over from the 2021 fishery,” noted the price setting panel report.

After weighing both arguments the panel said while market information available is “less comprehensive” than they would like, they did not see “compelling evidence” that would warrant such a large decline in market prices suggested by the ASP.

And because the panel, under provincial regulations, cannot suggest a middle-ground price, they had to choose one or the other offer.

They chose the price offered by the FFAW, 35 cents a pound for Grade A capelin.

The result was a stalemate.

Derek Butler, executive director of the ASP, said he advised FFAW president Keith Sullivan that if the union wasn’t willing to re-negotiate the price, it would not be feasible for some processors to buy capelin.

Sullivan said in an email “companies did not commit to purchasing from all harvesters and people are not willing to sell this valuable resource for pennies and less than fair market value.”

Despite the disagreement, some companies were willing to buy at the price set by the panel.

The Marshes had a buyer lined up — Terra Vista Fisheries of Glovertown.

Company president Rhonda Verge told SaltWire, “We were definitely going to buy at the negotiated price, but we couldn’t get anywhere with it.

“We wouldn’t be able to buy from every fish harvester,” she added, “but we were prepared to buy from fish harvesters that normally sold to us.”

Meanwhile, Butler said even if some ASP members could not agree to buy capelin at the settled price, they would not have stood in the way of any companies that wanted to.

“If someone wanted to buy and the union was prepared to let one company buy, that could have worked,” he said. “But it appears the union was not prepared to have a limited fishery for only a few producers because not all harvesters would get to fish.”

Rod Butt is manager of Golden Shell Fisheries in Hickman’s Harbour.

They are also members of the ASP.

He told SaltWire that the company has been buying capelin for years, and was all ready to buy again this year.

He says no one from the ASP warned him not to, adding they might not have bought as much capelin as they did in previous years to fill their markets, but they would have bought some.

“We had all our crab processed over four weeks ago. And we should have been at capelin for four or five weeks, like every other year,” said Butt. “But we didn’t have the opportunity to do anything.”

With the capelin fishery dead in the water for hundreds of fish harvesters from the southern bay of Placentia to the northeast coast, the accusations are flying.

Fingers are being pointed in every direction and you don’t have to look far to find out who’s blaming who.

Let’s start with Ryan Cleary, who is executive director of Seaward Enterprises Newfoundland and Labrador (SEA-NL), a group representing some inshore fishing enterprise owners.

He lays the blame squarely at the FFAW’s doorstep.

In a July 20 blog post, Cleary said harvesters on the east coast were ready to fish, and buyers were standing by to purchase, but the Fish Food and Allied Workers are standing in the way.

Before the fishery can begin, he explained, random samples have to be taken from the schools of capelin in each fishing zone to determine whether the capelin are commercially viable — fish the right size, and with a high percentage of the more valuable roe-filled female capelin in the mix.

DFO issues permits to allow the sampling to take place, but the permits only come if the FFAW requests them, said Cleary.

He said the union did not ask for permits to conduct sampling on the east coast because not all processors were prepared to buy.

Cleary also took a swipe at DFO’s capelin policy for Atlantic Canada, saying “it’s all over the map.”

“In other Atlantic provinces, once a capelin fishery is opened the fish don’t have to be sampled. Same goes with capelin caught off western Newfoundland in the Gulf, where the fishery has wrapped up for the season,” he said.

Vaden Oram, former owner and now operations manager at Terra Vista Fisheries, also blames the DFO for making the protocols around the capelin fishery too complicated.

He’s been involved in the business of capelin since the 1980s.

“In other fisheries, like herring . . . they don’t ask how many buyers want to buy. DFO just announces a quota and if fishermen want to go fish it they can go, and if a buyer wants to buy it they can buy.

“But for some reason they make the capelin fishery complicated. A lot of stakeholders have to say, yes.”

“In other fisheries, like herring . . . they don’t ask how many buyers want to buy. DFO just announces a quota and if fishermen want to go fish it they can go, and if a buyer wants to buy it they can buy. But for some reason they make the capelin fishery complicated. A lot of stakeholders have to say, yes.”

He blames the FFAW for “holding everyone hostage” just because not all fishermen want to fish and not every buyer will want to buy.

The FFAW, meanwhile, blames the ASP and its member companies for “refusing to pay fair market prices to fish harvesters.

“In their bid to drive down harvesters’ share in the market they are holding the economy of our province hostage. This affects plant workers, fish harvesters and regional economies,” Sullivan said.

And, of course, the ASP blames the union for not being willing to budge on the price, and for expecting all companies to agree to buy, regardless of whether or not that price was feasible for each individual business.

The logic that if all fish harvesters can’t sell, then none should sell, doesn’t hold up for east coast fish harvesters or processors when they look to Newfoundland’s west coast.

There was a capelin fishery in the western region (zone 4R), starting mid-June and ending July 21.

The Barry Group, a member of the ASP, was one of the main buyers.

So why did that fishery go ahead?

FFAW president Sullivan said that’s because it involves fewer harvesters and buyers and operates under an individual quota for seiners and a cap system for fixed gear. There were no reports of Grade A capelin and processors paid the panel price.

With no capelin fishery across much of the province, there’s a financial fallout for many.

Last year Golden Shell paid $30,000 - $40,000, or more, to some east coast inshore boats for their capelin catches, said the manager.

The shutdown is also hurting plant workers, said Butt.

In a normal season, he said, Golden Shell processes about 300,000 ton of capelin.

It means steady work for about three or four extra weeks for the 65 employees

Instead, said Butt, they had to split their crew into two groups and have them work alternating weekly shifts — one week on, one week off — processing cod, sea cucumber and some whelk.

At Terra Vista, they managed to get some capelin from the west coast of the province, where the fishery did go ahead.

“We ended up going to the northern peninsula to buy capelin and truck it down,” said Rhonda Verge.

It meant extra trucking costs but Verge said it was crucial for them to be able to get capelin so they could supply their usual customers, and give their employees additional hours of work to help them qualify for EI benefits at the end of the season.

There’s also a trickle-down effect for the provincial economy.

In 2021, according to statistics from DFO, the landed value of capelin was just over $17 million, on landings of 22,000 metric tonnes.

That year’s export value of frozen capelin products from this province, according to data from Statistics Canada, was nearly $40 million.

Up to July 22 this year, only 4,900 metric tonnes of capelin been landed. The landed value so far is about $3.7 million.

Long-term impacts are also on the minds of processors.

In this business holding onto customers means being able to deliver consistent supply at competitive prices.

When you can’t deliver, and someone else can fill the gap, customers can grow cold.

Oram has seen it happen before.

“In 1994, for instance, when we had no fishery, it took three years before Asia would consider buying from us again.”

This year Norway and Iceland are back in the capelin business with high quotas and Oram says buyers will get their supply there if they think Canada can’t fill the orders.

“When you’re out of the market, people move on. . . .Next year we’ll have to fight to get our customers back.”

While fish harvesters contemplate the money they’ve lost this year because of the “no go” capelin fishery on Newfoundland’s east coast, one organization sees a silver lining in the gloom.

The fact that 15,000 tonnes of capelin won’t be fished this year, means hundreds of millions of egg-bearing female capelin will be able to lay trillions of eggs that would otherwise have been caught in the roe fishery.

“Some proportion of those will survive and contribute to the stock next year,” said Robert Rangeley of Halifax, science director of the environmental organization Oceana Canada.

That group has frequently called on Fisheries and Oceans ministers for a moratorium on capelin fishing, arguing the stock has not rebounded since its collapse in the 1990s.

Rangeley said current data suggests the capelin stock is deep in the critical zone, compared to its historical biomass.

“This lack of a fishery in 2022 will definitely contribute to future spawners,” he said.

Still, said Rangeley, price negotiation failures are not the way to manage the capelin fishery.

Proper management, he said, would be to invest in the future of the fishery by stopping it long enough to allow it to rebuild and create a sustainable fishery for years to come.

Earlier this year DFO minister Joyce Murray decided to shut down the mackerel fishery in Atlantic Canada and limit the spring herring fishery.

Both those fisheries have limit reference points,

Rangeley said he was very surprised, and disappointed, that she didn’t follow suit with capelin.

“All indications were that would set a bit of a precedent,” he said.

The appropriate management approach for capelin, he said, would have been to close it.

“I just don’t understand why she didn’t do it.”

Back at the Hickman’s Harbour wharf, in a harbour that’s been pretty quiet since the crab fishery ended, Marsh said most just can’t believe there is no capelin fishery this year.

“We’ve always landed capelin here in Hickman’s Harbour,” she said.

Even a couple of years when the fishery was a bust, it wasn’t because people didn’t try, she said.

There’s not much left to catch for the rest of this season, beyond cod and, hopefully, some squid.

Last year there was an abundance of that fish, the likes of which had not been seen in about 20 years.

But there are no guarantees the squid will show up this year.

She said none of the local harvesters had imagined a season without capelin.

“We didn’t know this was going to happen until we started calling DFO to request (sampling) permits.”

Marsh said she spent “hours and hours” on the phone trying to convince people at the FFAW office to allow sampling to go ahead, to carry on so at least some enterprises could go fishing.

“We don’t’ want to sit home and not fish. That’s what we got a fishing enterprise for,” she said.

Golden Shell manager Butt said he also called the FFAW, hoping to get a capelin fishery opened.

“They told me they can’t open the capelin and to call DFO. I called the area chief for DFO in Grand Falls and he told me to talk to the union.

There’s a very small window of opportunity to catch capelin — two to three weeks at most before the roe-bearing females have dropped their eggs and lost their value.

With July waning and the calendar turning to August, it’s already past the prime time of the season.

The biggest frustration, said Marsh, is that a fishery could be shut down only because some processors were not prepared to buy.

If you apply that logic to other fisheries, she added, where does it end?

“In any fishery, buyers aren’t going to buy at certain prices … and fishermen aren’t going go to fish for a certain price.”

Oram shares Marsh’s angst.

He said Terra Vista has a market for male capelin, and was willing to take a gamble on it, even though the negotiated price was “too high.”

Oram said it’s wrong to hold everyone hostage just because not all fishermen want to fish and not every buyer will buy.

“That’s not the way it happens with other species, like herring, or mackerel, or cod and crab,” he said.

“If there are willing buyers and willing sellers, why do they have to punch everyone, to keep everyone down?” he asks.

“If there are willing buyers and willing sellers, why do they have to punch everyone, to keep everyone down?” — Vaden Oram

Butt points out that at one time the capelin fishery was controlled by DFO, from setting of quotas to the sampling process to the decision to open.”

“I think it has to go back to something like that,” he said.

Marsh says as a fishing business owner, she lost money, and choices, because of a decision made by someone else.

“If they opened the capelin fishery and I didn’t like the price and didn’t want to fish, that’s my choice,” she said. “But the FFAW has taken away our choices.”

There’s no possible solution for this year.

Marsh is adamant, though, that the same scenario can’t be allowed to happen next year.

“What in God’s name do we have to do to change this? I really don’t know,” she said. “But we got to do something.”

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