Story last updated at 3:10 p.m. Friday, August 9, 2002

Processor quotas close free markets, turning fishermen into sharecroppers
by Michael Brooks and John Pappalardo
Point of view

Massive fish processing companies are pushing Congress to give them exclusive rights to control fish markets. The idea is promoted under different names, such as crab rationalization, the two-pie system and processor quota shares. The bottom line is always the same -- giant corporate interests dominate our fisheries, relegating independent fishermen to sharecropper status.

Many of these corporate interests are foreign-owned, like Nippon Suisson (a.k.a. UniSea, a.k.a. Gorton's), Nichiro Corporation (a.k.a. Peter Pan Seafoods), and Maruha Corporation (a.k.a. Westward Seafoods) all from Japan. In fact, under the crab rationalization plan promoted by the North Pacific Fisheries Management Council, 50 percent of our crab harvest would go to foreign processors -- by law.

We have seen big corporations do this in other industries. The poultry, pork and beef industries are all dominated by a few big corporations to the exclusion of entrepreneurs and to the detriment of the farmers, ranchers and consumers. In fact, 80 percent of America's beef goes to just four companies.

As a result, a 1,200-pound steer brings $30 less to the rancher than it did in 1996, yet it costs the consumer $300 more. Five companies hold more than 60 percent of the pork market, and just one company controls more than 30 percent of the poultry market.

Now, some of these same multinational food conglomerates are asking Congress to give them control over our American fisheries.

But, Congress doesn't have to sell fishermen down the river to help the processing sector. There are other ways to go about it.

For example, if the problem with competing for market share is driven by freight costs, let's find the right way to level the playing field between ports on and off the road system. If the problem is stranded capital, let's find a way to relieve plants of unnecessary investments that they made to compete in the race for fish.

At the very least, we should have an environment in which small operators and new innovative business people can enter the market without needing additional capital to buy in.

The state of Alaska and the federal government need to be proactive in assisting processors without closing down free markets for fishermen. This would allow councils to focus on managing fisheries for conservation rather than spending time managing the processing sector and all the economic complexity that will undoubtedly accompany a two-pie quota program.

Processor quota is a highly controversial issue from coast to coast. Fishermen from all over the country have gone to Washington, D.C., in recent months to educate Congress about the devastation processor quotas would cause for America's fishermen and for our coastal communities.

The August edition of National Fisherman magazine has a letter from 45 fishing groups from coast to coast that oppose processor quota. Five hundred Alaska citizens, 11 Alaska processors and nine Alaska communities have written to Gov. Knowles and the congressional delegation in opposition to processor quota. No single issue has created such unity among America's fishing community since the EEZ was created in the 1970s.

Congressional action is required to allow processor quota, as it is currently illegal under the Magnuson-Stevens Act. Furthermore, an exemption to our antitrust laws would be needed to implement the two-pie system. Our antitrust laws were put in place for a good reason: to stop big corporations from dominating markets and creating monopolies to the detriment of consumers and working people.

By granting big corporations the exclusive rights to buy our fish, Congress would assure that family fishermen are forced off the water while a powerful few processor-company executives get filthy rich. Processor quota has nothing to do with fish and everything to do with money.

If processor quotas are allowed, there will be no more free markets, no more auctions and no more independent fish buyers. Big Japanese fish companies like Nippon Suisson call processor quota the "two-pie" system. They call it "two-pie" because words like "sharecropping" and "feudalism" are not considered politically correct these days. American fishermen deserve better than to become sharecroppers for foreign conglomerates.

Michael Brooks is a quota holder in the Alaska halibut fishery as well as a fish processor. He lives in Homer.

John Pappalardo is a commercial fisherman and an appointee to the New England Fisheries Management Council. He lives in Chatham, Mass.

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