Saturday, May 27, 2006

Chicken in the Fisheries

In light of the recent fish symposium/town hall/Premier's meeting/summit or whatever other name you wish attached to this event, I thought it might be appropriate to briefly look what happened and where the province is going now.

By way of review, it might be worthwhile for the gentle reader to reread my post from March 28 (Of socks, lighters, chicken and fish).

Premier Danny Williams, at the close of the meeting, articulated a widely held (and obvious) consensus that there are too many plants, plantworkers and fishers for the amount of fish available. Rightly, but unhelpfully, he stated that the status quo cannot be maintained.

Right on his heels, Gerry (Problem? What problem?) Byrne, the MP for the west coast, offered a dissenting and frighteningly vacuous* point of view. He stated that the real problem was not lack of resource or industry structure; the real problem is all about marketing. "We need to be price-makers, not price-takers", he says, all the while reassuring us that no more plants would close.

Keep whistling in the dark, Gerry. I'm sure no one will be more surprised than you when the plants along the Northern Peninsula start closing. I bet you'll be able to calm your constituents with that clever "price-maker" line.

In a similar vein, but even more self-delusional, was the response from the Honorable Minister of Fisheries and Oceans for Canada Loyola (no need to panic) Hearn. His position was:

  1. Don't hold your breath for federal buy-out money;
  2. There's no resource crisis, just marketing problems;
  3. Some people may have to commute because some plants might close but it will all work out; and
  4. People who say there's a resource problem are out of touch and clearly don't have the information that he has.
On that last point, maybe this is not the best time for the practice of Gnostic politics where only the anointed ministers have access to revelations from divine sources while the rest of us have to struggle in the darkness of abject informational ignorance. If you know something we don't, Minister Hearn, fess up and enlighten us please.

I suspect Hearn is more than happy to sit on the issue and just look concerned until the Conservatives form their majority. Then he can explicitly ignore the problem and not even have to act like he might do something. After all, in this case, time is his friend. As more plants close and more workers leave the industry on their own or just retire out (average age for plantworkers is in the mid-50's) his problem gets smaller and smaller all the time.

Meanwhile, the Premier has said that he believes the federal government has not ruled out money for a federal bail-out and that something can be arranged. My advice to the Premier: push Hearn to the wall until he squeals and produces the cash and do it quickly.

But the real result of the summit is the formal start of the game of Chicken in the Fishery. The rules are simple: everybody continues what they were doing and tries to survive the best they can. The players who blink (runs out of money, closes down or otherwise goes under) are the chickens!

So far, FPI and Daley Brothers are the first two chickens. Daley Brothers went out in a spectacular blaze of glory owing the Bank of Nova Scotia $32 million! And make no mistake: they are just the first. Many more plants will close from mountains of debt and lack of resource to process.

In the end, unless the weak plants are closed sooner than later, all operations will be dragged down and weakened. This will continue until a critical mass of operations shut down leaving sufficient resource for the remainder. The question is whether what's left will be healthy enough to survive.

On Open Line on Friday, the Premier made it clear that he wanted a controlled shrinkage of the industry. He said (my paraphrase) that he does not want to see collapses happening willy-nilly where government is left just to follow around and pick up the pieces after the fact.

With all due respect, I suggest that there can be no controlled shrinkage of the industry unless players are bought off or otherwise compensated to close their operations. Even then, if government was to decide who was to close and when, it puts the politicians in the position of choosing which communities live and die through deciding industry winners and losers.

There are two problems with that. First, politicians (and government in general) are miserable at picking winners and losers in any industry let alone the fishery. Second, so far the government has show itself very reluctant to see any plant close anywhere in the province. Every time a plant starts to head that way, government does everything it can to keep it open including throwing money at it (see Arnold's Cove).

So what's the solution? Well, in the western world we already have mechanisms in place to select viable operations from the hopeless ones: the market. All government has to do is stay out of the whole thing and let the weak shops go under. Contrary to the Premier's thoughts, it is Government's job in this case to follow along and pick up the pieces afterward. Government's role is to make sure that people are offered supports to help reach other employment opportunities wherever they may be.

It's a tough thing to do, to stand by and watch commercial operations close with all the resulting collateral social and economic damage that comes from that. It's the kind of situation that can make government the toughest job in the world. However, to economically interfere in the way government already has in this industry for too many years causes even more damage over the long term.

Is the fishery an industrial/commercial sector concerned with viability and growth or a social program engineered to produce the maximum stamps for the maximum number of people? It can't be both.

But when you can decide the answer to that question, then the solutions become obvious.

* I've heard some complaints that some officials don't like their remarks characterized as "vacuous". May I suggest, therefore, that you not issue empty and meaningless public statements (aka vacuous) in favour of substantive comments that actually address the issues at hand. Only then will my conscience allow me to retire the "v" word.

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