Corporate Welfare for the U.S. Shrimp Industry

Petitioners from the domestic shrimp industry allege that “a variety of financial incentives provided by national governments and international institutions over a number of years have over-stimulated the infrastructure and production of farm-raised shrimp in these [targeted] countries.” However, upon closer examination, it is the domestic shrimp industry that has enjoyed numerous U.S. government subsidies, yet it is still unable to be globally competitive.

These subsidies include:

• The Consolidated Appropriations Resolution passed by Congress in February 2003 awarded $35 million in “disaster assistance” to the domestic shrimp industry (see attached excerpt from the Congressional resolution). The subsidies were made available for the regular needs of shrimpers and marketing and promotion of domestic shrimp. According to an August 10, 2003 story posted on www.houmatoday.com, and a December 19, 2003 article in the New Orleans Times-Picayune, these federal grants funds were used to seek additional subsidies by funding the shrimp antidumping petitions.

• Members of the Southern Shrimp Alliance reportedly received an estimated $1.3 million in funding from the Mexican shrimp industry to support the legal costs of a dumping petition in exchange that Mexico would not become a respondent in the case.

In addition, members of the Southern Shrimp Alliance have petitioned, and in some cases (Georgia, South Carolina, Texas, and Alabama), have been approved to apply for trade adjustment assistance (TAA) in the form of technical assistance and cash payments. TAA for shrimpers will be awarded based on dollars per pound of shrimp marketed during a specified timeframe. Under the TAA for farmers program, individuals (including fisherman) who are approved to apply can receive up to $10,000.

The small group of domestic shrimp processors and fishermen who filed the antidumping petitions also hope to receive millions in subsidies under the so-called Byrd Amendment. If dumping duties of 15% were imposed and shrimp imports were cut in half, each of these U.S. processors and shrimpers would collect an astounding $829,493 in direct U.S. Government cash payments every year for as long as the dumping duties were in effect. In short, trade protection for shrimp will not simply maintain U.S. ocean shrimping, but will dole out millions of dollars to a select group of U.S. businesses.

(2) $17,500,000 shall be made available for assistance to the shrimp industries in the States of Mississippi, Texas, Alabama, Louisiana, and Florida in proportion to the percentage of the shrimp catch landed by each State for economic assistance to the Gulf shrimp fishery:

Provided further, That 2 percent of funds received by each State shall be retained by the State for distribution of additional payments to fishermen with a demonstrated record of compliance with turtle excluder and bycatch reduction device regulations, and that the remainder of the funds may be used only for: (A) personal assistance with priority given to food, energy needs, housing assistance, transportation fuel, and other urgent needs; (B) assistance for small businesses including fishermen, fish processors, and related businesses serving the fishing industry; (C) domestic product marketing and seafood promotion; (D) State seafood testing programs; (E) development of limited entry programs for the fishery; (F) funding or other incentives to ensure widespread and proper use of turtle excluder devices and bycatch reduction devices in the fishery; and (G) voluntary capacity reduction programs for shrimp fisheries under limited access.

Note: This funding was not reauthorized for FY2004.