Friday, August 12, 2005

Processor quota shares

Here we go again. Oregon's Senator Gordon Smith is forwarding a Bill that the whiting processors wrote to give them a secure share of the fish resource. I hate it when a special interest group can do that. I thought our representatives in government were supposed to think for themselves, and on a more altruistic plane than the rest of us scrambling to put food on the table.

And there's a bunch of draggers in Oregon that supposedly like the idea. Although I suspect that they might be like the guy in the Bible who sold his birthright for a bowl of soup. Short term gain, long term pain. If the draggers in Oregon were all in an association like the "growers association" model, it would be fitting for them to decide how to get the most for their "crop." And if that's giving "crop land" to the processing plant, then so be it. It's their kids that will have to live with their decision, not anybody else's.

Personally, I think the Justice Department got it right. Giving processors a chunk of the resource stymies competition and innovation. There's enough of that kind of thing going on already. It just isn't free enterprise. Besides going straight to Mommy goes over the heads of the folks that are charged with forwarding this kind of legislation if needed, the regional management councils. Not that they are so altruistic either, ie. crab plant owner shares in Alaska.

So where does giving out shares of the resource stop. To be fair you would need to give some shares to not only the couple of owners of a big processing plant, but to the owners of the trucking companies that haul the products away from the plant and everyone else down the supply chain. What makes the secondary processor so special? Nobody twisted their arms to make their investments in their plants.

The most important person in the whole supply chain, besides the fishermen,is probably the sales people in the fish section of the grocery store, or the chef in the restaurant, or next level processing plant that develops consumer friendly products for mass consumption, the second tier processors sure aren't doing much in those regards. The same one pound can of salmon since 1868? The same whole frozen fish?

The owners of fish processing plants have traditionally coasted at the expense of their business partners, the fishermen, who mostly get maneuvered into a corner so they can't do anything about anything. In practical terms, it looks like they keep the ex-vessel prices down with outmoded products so fishermen can't afford to organize. You ever see fishermen get together and mount an ad campaign?

The owners of the big processing plants really aren't so bad though. They make sure fishermen have jobs: Just Over Broke. I just think an organization like Tree Top, a production association of 1700 growers, could do a better job of eking the most value out of the fish and choosing business partners, not the government.


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