The Challenges and Economics of Local Seafood (Local Anything)

Photo by Moyan Brenn | Flickr | CC license
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A little while back Civil Eats ran a story on local efforts in North Carolina to bolster the incomes of local fishermen by connecting them with local markets that would sell their fish as a value added product rather than a commodity traded in a global market.

Can North Carolina’s Local Seafood Movement Help Save its Fishermen?

“In response to the factors working against commercial fishermen in North Carolina, a number of operations promoting local seafood have emerged in recent years. These operations give independent fisherman a much-needed additional avenue by which to do their business and share their stories.

“We’re not the solution to everything,” Peterson says, “but we’re doing the best we can to bring truly local product inland, to connect people to the resource and the people catching it, and to give them a high-quality product they can feel good about eating and enjoy.”

While traditional supply chains ship North Carolina seafood north to New York, Boston, Philadelphia, or Maryland or south to Atlanta to be sold or exported, one main goal of North Carolina’s local seafood advocates is to build new supply chains that stretch west across the state and give North Carolinians access to the coastal resource.

Before moving on engage in what I would call the Eeyore school of explainer journalism, let me say that I think this is all great stuff. I’m all in favor of fishermen and other small food producers banding together, marketing, processing and doing whatever they can to shift the balance of power from price taker to price maker in their own direction. I also think that building local food cultures around local food products is a welcome and valuable endeavor in our McHomogeneous McWorld. That said, let take this story as an opportunity to lay out some thoughts about the challenges this kind of project faces in the hopes of contributing to whatever crisp, strategic thinking I can.

This kind of fishing is about owner operators

Running a fishing boat is an endeavor that skews heavily towards owner operators. The combination of the risks involved and the operation of the boat as a basic unit of management has made the owner/skipper a (un)surprisingly persistent feature of this industry even after 500 years of ever increasingly corporatized global economy. The work is risky. The market is risky. It takes a ton of specialized, local knowledge that can’t be learned through typical forms of training or transported easily from one labor market (fishery) to another. This means it’s not the kind of jobs Fishing Corp Inc. can just hire a middle management of interchangeable skippers to operate a fleet of fishing boats for a mid level salary and a 401k. In a world dominated by corporations, there’s a reason why fishing still runs in families.

  This has a number of implications:

• There is always a greater sense of cultural loss when local owner operator industries are put at risk by technological change and/or globalization.
• The barriers to entry for global competitors are very low. If you can get your hands on a boat and some nets in Thailand and you are willing to put in the kind of work and risk to succeed at fishing, you can start competing in the global seafood market.
• Commercial fishing is the kind of labor intensive, physically demanding work that inexorably migrates to developing countries. Like I said, it’s no surprise that the operators still in business are generationally bound to the work; it’s work few Americans want to do at current income levels if it’s not in their blood already.

photo by John Buie | Fishing trawler – Wanchese Harbor, Roanoke Island, NC | Flickr CC license

Where labor intensive work has been portable, it’s moved to where the cheap labor is. To take an example from North Carolina, look no further than the apparel and textile industries . Where the means of production weren’t portable, as in fruit and vegetable production where the US has highly productive farm land, but local labor costs are above internationally competitive rates, we import labor in the form of migrant workers – the only way for US growers to compete with growers in the global South on labor costs is to recast those jobs as global South jobs located in the North.  I’d be curious if these family fishermen are hiring immigrants from Mexico and Latin America.

It’s the things that “don’t make sense” that are the hardest to change

When you see trade that doesn’t seem to make good horse sense, like tons and tons of seafood being exported from a region that imports tons and tons of seafood from thousands of miles away, it’s almost a certainty that you are dealing with powerful economic incentives that may not be obvious, but are going to be really hard to mitigate against at a meaningful scale.

North Carolina’s commercial fishermen—who work primarily in independent, small-scale operations—landed 66 million pounds of fish last year, but rather than ending up on North Carolina plates, the majority was whisked out of state to markets where it could fetch a higher price.

“I think more New Yorkers eat North Carolina seafood than North Carolinians,” says Ann Simpson, who grew up in a small town on the coast and currently directs North Carolina Catch, a partnership of smaller organizations working to strengthen the state’s local seafood economy.

To fill the void created by the export of its catch, North Carolina—like most states—ships in seafood from abroad. Today, around 90 percent of the seafood Americans eat has been imported from places like China, Thailand, Canada, Indonesia, Vietnam, and Ecuador, and the average fish travels more than 5,400 miles between the landing dock and point of sale.

“People come to the coast looking for fresh seafood, and for the most part, they’re getting seafood from halfway around the world, which they’re eating in a local setting,” says Noelle Boucquey, assistant professor of environmental studies at Eckerd College, who studied North Carolina’s fisheries while at Duke University. Patronize a vendor at the Outer Banks Seafood Festival in Nags Head, and you’ll face the same conundrum.

When a product traveling 5,400 miles is more economical for the local consumer than a similar good produces 54 miles way, that may seem “crazy”, it’s more likely that it makes sense for reasons that aren’t immediately apparent. Global supply chains don’t grow on trees, they are hard to build and maintain. Make sure you have a good understanding of the logic and incentives of the supply chain that you aim to reform.

Unsurprisingly, clearing out the regulatory underbrush is in order. Try not to replace it with more.

One of the things fisherman in North Carolina see getting between them and making a living is an overly prescriptive regulatory regime.

Secondly, state and federal regulations place size and catch limits on the certain types of fish to protect stocks, like summer flounder, in danger of being depleted. While commercial fishermen acknowledge a certain amount of regulation is necessary to promote the health of the state’s fisheries, many feel the regulations are not based in science, and that they’re getting regulated out of business.

Compounding that trouble, the politically powerful recreational fishing sector in North Carolina has tried to exclude commercial fishermen from being allowed to catch certain species, including red rum, the state fish, as well as speckled trout and striped bass, to “nurture the potential” for recreational fishing by eliminating competition.

“There isn’t really an ecological argument for [the exclusions] at all,” says Boucquey, who wrote her dissertation on the tension between commercial and recreational fishermen in North Carolina. While commercial fishermen are not always perfect in their methods, Boucquey says, they hold a deep knowledge of the state’s fisheries and economically help balance the more volatile recreational fishing sector. “It’s just not reasonable to restrict a resource for one demographic or the other,” she says.

photo by John Buie | Flickr CC license

There’s a real problem here that is endemic in a lot of places and industries. Instead of trying to shape incentives, lawmakers take the shortcut of trying to legislate outcomes – You can only catch this many of this many fish …. THESE FISH are for THIS INDUSTRY and not THAT INDUSTRY. In the case of fisheries, it has been far more productive to set standards that create incentives that point towards the outcomes you want rather than trying to mandate them. With “catchshare”, a property right to the total catch in a fishery is allocated among fisherman. A board made up of scientists and stakeholders determines the legal size of the total catch for the season in that fishery. If the fishery is thriving the size of the catch can increase each year and each boat’s share increases. This removes all sorts of perverse incentives that come with trying to reduce over fishing by mandating short seasons or banning specific fish.

Cultural and economic displacement is one of the major issues of our time.

We tend to deal with this in two opposite but equally unproductive ways. The first is to simply let the market steamroll the losers as innovation and globalization charge forth. The second is to start trying to maintain the status quo by enacting a Rube Goldberg set of prescriptive policies meant to mandate tradition or prohibit innovation (although it’s rarely put so bluntly). The problem with the first approach is the human cost of those capsized in the wake of progress, both the tragedy of privation, but also the lost contributions from people who lose their ability to work productively. The problem with the second is that overly prescriptive regulation quick (or slowly) leads to economic sclerosis as businesses strategize to work the rules rather than the market and local businesses simply become more antiquated and inefficient as they are insulated from the discipline of the market. The way Greek economy became a cautionary tale was not through too much debt, but from overly prescriptive regulatory regime built on codicil after codicil to protect traditional ways of doing things from competition with more modern economies.

What I think tends to work better is either to just give people money, resources, assistance when their livelihood is swamped by global trade and technological innovation – a robust universal safety net, access to adult vocational education, relocation assistance – AND/OR – take an inventory of what traditional economies need to compete – new infrastructure, access to credit, connections with new markets, new coops or trade associations among producers.

The groups in North Carolina working to remake the local fishing industry to compete in the 21st century are working squarely in that second framework. For their sake, I hope it’s enough, give the powerful forces they are up against.

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