06 April 2012

Patronage and seals… #nlpoli

Thursday’s announcement by fisheries minister Darin King should give you a pretty big reminder that the local political scene remains mired in the past.

The provincial government is giving a private sector company a $3.6 million.  They are calling it a loan.  In effect, the provincial government is going to pay a cash subsidy directly to fishermen to kill twice as many seals as the company involved could buy. That’s according to a company official at the news conference on Thursday. 

Interestingly enough, this is exactly the type of subsidy that helped to decimate the cod stocks since it encourages fishermen to over-harvest the resource.  The excuse for it is much the same as well:  it is supposedly just bridge financing to help the industry get through some difficult times now. Things will get better in the future.

There’s no truth in it of course.  There never has been.  Those are just the official excuses the politicians need to avoid the decisions that are tough but that would actually improve the fishery.

Even more interestingly, there’s a growing international effort to wipe out these subsidies. Yet while people around the world are trying to change the behaviour that led to the loss of our fish stocks, the locals are just carrying on as if everything was just peachy.

This looming change in the fishery and the fish markets is part of the story behind the more recent fisheries crisis, by the way, but that’s another issue. 

One sentence in the seal subsidy release leaped out.  it’s down towards the bottom. It’s vague and written in the passive voice, which likely means the person who wrote the release was just filling up space.  Here’s the claim:

The value of the industry to the provincial economy has been estimated at close to $100 million in total in recent years.

“has been estimated”.

By whom?

Well certainly not the provincial government.  The fisheries department website gives information for three years.  They are from a time before the most recent collapse of the markets:

The Sealing Industry contributed on average approximately $16 million to harvester’s income, and approximately $37 million to the provincial economy in the last three years:

  • 2006: approximately $30 million in landed value and approximately $55 million to the provincial economy.
  • 2007: approximately $11 million in landed value and approximately $32 million to the provincial economy.
  • 2008: approximately $7 million in landed value and approximately $24 million to the provincial economy.

From $30 million in landed value and $55 million in total in 2006 to a mere $7.0 million in landed value and $24 million total value two years later.

So $100 million in total value to the economy?  Only, if you add up a bunch of years and that doesn’t seem to be what they meant.

This province won’t have a viable, local fishing industry in the future as long as the provincial government sticks with bad policy ideas like doling out cash to fishermen and local companies as they did in the seal announcement on Thursday.

- srbp -

2 comments:

Judy Snow said...

Hi, Ed. Great analysis as always. Just one thing - seals are plentiful. So this may be patronage, and the value of the seal hunt may have been completely misrepresented, and similar actions may have endangered other fish stocks, and this action may have given artificial life to a dying industry, but this particular action does not threaten the survival of seals. Judy Snow

Edward Hollett said...

Using that as a justification, Judy, the thing would be called a bounty and we'd be spending 10 times as much.

This is pretty nakedly nothing more than a cash pay-out to fishermen in certain parts of the province who participate in the seal fishery. Flowing it through the company is simply a variation on flowing it through the FFAW.

Carino appears to be financial vulnerable (can't raise the funds in the marketplace on its own) so they are susceptible to this sort of enticement. If there were real markets for seal products and if this was just a temporary slow-down, Carino would be able to get cash from the usual sources.