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Guest Column: Maritime Lobster Panel sign of political will

First published in Landings, September, 2013.

When the creation of the current Maritime Panel to Review Pricing Structure of Canadian Lobster was announced by the three provincial Ministers of Fisheries in June, virtually all members of the Canadian lobster fishery let out a combined gasp: “Have we not studied this industry enough in recent years?” You could include this writer in this incredulous reaction. The Lobster Council of Canada has been at the forefront of this type of analysis since our inception in 2010 and has been involved in the two major studies of the sector since that time, “From Trap to Table – A Long Term Value Strategy for the Canadian Lobster Industry” and the follow-up report on the working groups which focused on issues highlighted in that report, “Building an Integrated Plan for the Canadian Lobster Industry.”

After that initial reaction, however, I began to think about where we are today in this complex and fragmented North American lobster industry and how far we have come in a few short years. I realized that the latest review by three well-known industry veterans could be the most important piece of the puzzle and just what we need. Let me explain.

In many ways the panel’s focus on pricing – how prices are established, who controls what, how the “shore price” market system works and what the options are for reform – is a natural step in the process being undertaken by the lobster sector in Canada. After convening extensive working groups in 2012, the Lobster Council of Canada made a conscious decision to focus its efforts on quality and branding, leaving the challenge of price for action at a later date. Our analysis showed that changing the way lobster is priced on the shore will take dramatic structural change and we felt (and still do) that action on brand and quality should happen first. As such our priority for 2013 is establishing quality grading standards and a Canadian lobster brand.

Coffee shop talk every morning in ports from Point Sapin to Souris, however, does not focus on quality and branding – it focuses on price. What will it be for this season, next season and why isn’t it higher? A Canadian dollar on par with the U.S. dollar and 80% more Homarus americanus coming into the market during the past ten years certainly have a lot to do with those questions.

Fast forward to the Maritime panel which is comprised of three bright and capable industry veterans, Lewie Creed from Prince Edward Island (a former senior provincial government official), Gilles Theriault from New Brunswick (a consultant and former harvester organizer) and John Hanlon from Nova Scotia (retired from a career with the federal Department of Fisheries and Oceans). The panel has been tasked with bringing forward recommendations on pricing options that will augment the work recently completed but, most importantly, it will bring acute political focus to the issues at hand today. This is the key difference between the current “study” and those of the recent past. This panel was appointed by three Ministers of Fisheries and is being watched carefully by everyone who relies on lobster for a living. Recommendations made through this process will receive attention at the highest political and industry levels, both provincially and federally, and therefore have a very good chance to lead to positive action.

The Maritime panel will conclude its work in late September, with a report to be submitted to the provincial governments in October. I would expect that these governments as well as the Federal government are preparing themselves for how they will respond to expected recommendations since action taken then will be the most important outcome from this process.

As part of the consultations the Lobster Council of Canada presented a brief to the panel focused on four action areas with six recommendations:1. Lobster sector discipline (tighten up loose talk in the media about prices and volumes, better co-ordination of trade missions, the establishment of a market research mechanism and options to decrease the paralyzing effect of cheap selling and giving product away); 2. Understanding the lobster value chain (internal education to ensure that all industry participants understand the value chain, their position in same, varying qualities of lobster in different areas and historical percentage of market price shared by all in the value chain); 3. Marketing and promotion (the importance of a co-ordinated and professional marketing and promotion campaign for Canadian lobster – not Nova Scotian or Prince Edward Island lobster – Canadian lobster - to drive demand in all markets in both processed and live forms); 4. Options for a mechanism to fund marketing and promotion (how we levy the sector to fund a marketing campaign and other key industry priorities).

I am certain that all stakeholders engaged with the process are weaving these themes throughout their discussions and that some consensus will emerge.

The political and industry focus on shore price setting in 2013 may be just what the sector needs to make changes occur that are necessary for real reform and for better ways to share the value of this rich resource with shippers, processors and harvesters. The real challenge will occur when the panel makes its report: will the lobster industry sector finally agree to try something new or simply go back to the old ways once again? It will take courage and leadership on the part of all industry leaders and politicians to bring meaningful change to the way that lobster is priced from harvester to first buyer – I hope that 2013 brings that change.

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