Efforts continue to look at new pricing formula

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While lobster prices are on the upswing for the first time in several years, there still seems to be support for the idea of looking at a new formula for determining the shore price.

Like their counterparts throughout North America, Prince Edward Island fishermen are now trying to recover from the low prices experienced for the last several years due to a decline in the global economy.  During that period, many within the industry began calling for a new formula to determine the price paid by buyers.

That system has changed little since lobster became a commercial species.  The price doesn’t usually get set until a few weeks into the season and fishermen have little input into the formula. All too often they have expected  strong prices based on what has happened in other areas, only to be  taken by surprise when the shore price came in considerably lower.

Both Fisheries and Aquaculture Minister Ron MacKinley and the president of the PEI Fishermen’s Association have been exploring some alternatives. MacKinley is wondering whether a model used in the potato processing industry might be adapted to the lobster fishery. A committee of producers and processors negotiate a contract which is then voted on by processors.  If the two sides fail to reach a contract, even with the help of a mediator, one is imposed on them through behind arbitration. Either way, farmers know the price they will be getting before they plant.

Mike McGeoghegan said another idea that could be looked at is the creation of a marketing board.  Both men said the lack of a price set before the start of the season is costing the industry sales. MacKinley said he talked to a store owner in Calgary who would carry island lobster if he could purchase at a set price throughout the season. McGeoghegan said he had a similar experience while participating in a trade mission to China earlier this year.

When the price is low, it is always relatively easy to get fishermen talking about alternatives. When the price starts to rise, many of those same fishermen are more reluctant to rock the boat.  Last year, prices were up to $5 a pound by the end of the season and there was hope this year would pick up right where it left off.

When the price was finally announced just after Mother’s Day, it came in at $4-$4.50 for canners (Island fishers land a greater percentage of smaller lobsters than their counterparts in most of the other Maritime fishing regions) and $4.25 and $4.75 for markets. Those prices were competitive with what is being paid to fishers across the region.

McGeoghegan hopes talks towards a revamped marketing system will continue, not just in PEI but throughout the region.  Even with higher prices, he said fishermen are still playing catch-up as repairs and upgrades to boats and equipment have been delayed for the past several years and bait and fuel costs continue to climb.

“On lobster sales alone, our Fishery contributes over $80 million per year to the PEI economy and 1300 independent fishing businesses buy goods and services in their local communities,” he said. “It is critical for the PEI economy that strong prices are paid.”


Geographic location: Prince Edward Island, North America, PEI Fishermen Calgary China

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