Market Competition Policies

Posted in Industry News

The Green Shirts Movement Qld re-published a post by Tom Marland’s Facebook page ‘Tom Marland – food for thought and thought for food, 2 Aug 2019‘ and I thought there might be some value to run a commercial fishing lens over some of the points raised by Tom. Of course, I will take a Queensland commercial fishing perspective (quotes from the article are highlighted in red).

Under the auspice of “microeconomic reform” Australian government policy over the last 30 years has been aimed at achieving economic efficiency either by eliminating or reducing distortions in individual market sectors – From a commercial fishing lens the shift to microeconomic reform has led to a down grading of the requirements of import risk assessments for seafood so that imported seafood has less hurdles to enter this country which has allowed exporters to dump massive quantities of seafood into this country.

The impact of marine park development has led to significant loss of commercial fishing grounds. The discussion around the public’s right to Australian seafood has always been trumped by the hysteria drummed up by conservation groups – without these parks we will lose things like charismatic megafauna (not my term) or animals like whales, dolphins and turtles.

Economic reform usually refers to deregulation or reduction in the influence of government, to avoid distortions leading to apparent market failures – My industry has faced increases in regulation particularly around monitoring and the environment. The rise in regulation is an amalgam of the advocacy of special interested groups, State agencies and political parties.

Adam Smith’s “invisible hand” has been replaced by a very “visible fist”, thumping the table, demanding unregulated markets. Those markets are now dominated by monopolies that control almost every segment of not only Australia’s but the world’s domestic economy – This has played out a little differently in the Queensland commercial fishing sector. The current State Government seems hell bent on introducing zoning (geographical restrictions to commercial fishing) and quota management (reduction in seafood harvests). An additional outcome will be the corporatisation and monopolisation of commercial fishing. This seems crazy at a time where COVID-19 has raised a range of discussions around the critical nature of food production not only at the macro/national level but food production that ensures supply at the local level.

If we are learning anything as a result of the COVID-19 situation is that businesses across the agriculture sector are re-evaluating how they engage with the public. The public is more attuned than ever to buying local and supporting local food producers.

The unfortunate policy space in the commercial seafood industry now finds itself is that (1) we are seeing increased regulation and (2) an increased importance placed on non-elected extreme groups and their views.

Tom also provided an interesting set of agriculture statistics and here are some that are worth noting from a commercial fishing perspective. In summary, the Queensland wild harvest fisheries include the net, line, crab and trawl fisheries. Using Fisheries Queensland’s QFish data regarding commercial fishing licenses:

  • Net licenses in 1990 = 668 / Net licenses in 2019 = 333 – a 50% decrease.
  • Line licenses in 1990 = 660 / Line licenses in 2019 = 348 – a 47% decrease.
  • Crab licenses in 1990 = 469 / Crab licenses in 2019 = 355. – a 24% decrease
  • Trawl licenses in 1990 = 993 / Trawl licenses in 2019 = 338 – a 66% decrease.

Over a 30 year period commercial fishing licences have been reduced by approximately 49%

The loss of these licenses is almost entirely a product of non-market forces. Think on this for a few minutes, the market is not the key driver of change.  Reasons underlying significant falls in commercial fishers include but are not limited to:

Marine Parks

  • Implementation of the Great Barrier Reef marine park, the Great Sandy Marine and Moreton Bay marine parks.
  • More recently the introduction of a Commonwealth marine park network.

All of these parks have restricted commercial fishing activity not through fisheries but marine park legislation. It should also be noted that post-harvest business (retailers and wholesalers) reliant on commercial fishers have also dwindled as a result of the introduction of marine parks.

Net Free Zones

  • Banning of commercial net fishing.
  • Displacement of commercial fishers to other fisheries.

We need a proper competition policy not one that is aimed at allowing the big to get bigger and the small to keep getting screwed over – A difficult conversation but one that is needed. A market with business of varying sizes has significant benefits for the community as opposed to shrinking the pool of businesses in an industry. My industry is comprised of micro, small, medium and large business enterprises at both the harvest and post-harvest level. My industry’s diversity means you can access seafood at dozens of price points.

Think about this – the introduction of net free zones has not led to massive increases in recreational fishing tourism. You might hope governments don’t back one industry segment over another and let the market work. What can be seen in Queensland is a State Government that is more than happy to back charter fishing and of course back the growth of the aquaculture sector.

In the current structure, it certainly isn’t going to the farmer or Australian small businesses – Reaching a situation where commercial fishing businesses don’t have to be concerned regarding ongoing, regulatory change and threats from bad faith stakeholders would be amazing. However, governments need to make a call, a very big call that commercial fishers will keep the access they have without a future threat of more closures such net free zones.

Tom’s article is well worth a read: Tom Marland – food for thought and thought for food Facebook page

Author: Eric Perez, CEO – Queensland Seafood Industry Association (QSIA)

Image: QSIA

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Where has the moral compass gone?