SHRIMP TASK FORCE WELCOMES U.S. GOVERNMENT ANALYSIS
THAT DOMESTIC SHRIMP INDUSTRY MUST DOWNSIZE AND
RESTRUCTURE TO SURVIVE

Washington, DC — The Shrimp Task Force today welcomed the long-anticipated release of a National Marine Fisheries Service (NMFS) paper on Shrimp Industry Issues and Options. The report, written at the request of U.S. shrimpers, offers an assessment of the domestic shrimp industry that makes clear that to regain economic health, the U.S. shrimping industry needs drastic restructuring, not trade protection or massive subsidies.

The government report, incorporating data and economic modeling based on years of research into domestic industry practices and conditions, offers a number of solutions to industry problems. Foremost among the NMFS proposals are reducing the size of the domestic shrimp fleet, reorganizing shrimpers into cooperatives, and improving product differentiation from imported shrimp, with which the domestic industry has so far failed to compete effectively.

"We are glad these proposals are finally public, and we hope the industry takes to heart the report that they themselves requested," said Wally Stevens, Chairman of the Shrimp Task Force. "The NMFS report confirms that domestic shrimpers need to stop pointing fingers and begin working constructively to help themselves. They have serious long-term problems that need to be faced directly, including high costs, poor product marketing, and sheer overcapacity — too many boats chasing too few shrimp."

Thanks largely to high quality, reasonably priced imports, shrimp has become America's most popular seafood, with imports accounting for nearly 90 percent of all shrimp consumed in the U.S. Yet despite the enormous popularity of shrimp among American consumers, the report makes it clear that inefficiencies inherent in the domestic industry have prevented shrimpers from benefiting from the increased demand, leading them instead to seek trade protection and government subsidies in an effort to paper over their problems.

"The domestic industry has received a laundry list of government handouts to date that have gotten them nowhere," Stevens explained. "Last year, the federal government handed out $35 million to domestic shrimpers in the form of 'disaster assistance,' some of which was then utilized to fund their antidumping petition. Earlier this year, the government of Louisiana authorized $350,000 in federal funds to help foot the legal bill for this case, and just last week, Louisiana officials openly urged shrimpers to apply for federal handouts in the form of Byrd money."

Stevens added: "Even Mexico has reportedly funneled money to U.S. shrimpers. According to the press, the Southern Shrimp Alliance received roughly $1.3 million from the Mexican shrimp industry to support the legal costs of the dumping petition in exchange for leaving Mexico off the list of respondents in the case. All this for a group that likes to allege that its foreign competitors are the ones relying on subsidies."

"We are concerned that under blatant domestic industry and political pressure, the NMFS has tried to put the best face it can on U.S. shrimpers' problems. The report cites 70,000 shrimp producing jobs in the U.S. This number is twenty years old, and grossly overstates U.S. industry employment. According to a brand new report by the Dallas Federal Reserve Bank, the four largest shrimp producing states employ a total of less than 10,000 workers. In 2001, one major shrimp producing state, Texas, counted just 2,183 jobs in processors and wholesalers of all fish products," said Stevens. "These current jobs numbers are consistent with the Shrimp Task Force's estimates of 20 shrimp consuming jobs for every one shrimp producing job."

"It's easy to see why the Southern Shrimp Alliance issued a press release attacking the NMFS report before it even became public. The U.S. Government itself has concluded that there is no justification for demands by U.S. shrimpers for more subsidies or trade protection, and that closing the market to imports will not make the industry's problems go away. We are only surprised that on July 26, NMFS granted SSA almost $4 million to market wild caught shrimp. We question giving further subsidies to a group that rejects the whole idea of addressing its own problems and literally bites the hand that feeds it," Stevens concluded.

The DOC recently announced preliminary margins on imported shrimp from Brazil ranging from zero percent to 67.8 percent, from Ecuador ranging from 6.08 percent to 9.35 percent, from India ranging from 3.56 percent to 27.49 percent and from Thailand ranging from 5.56 percent to 10.25 percent. Earlier, the DOC announced preliminary margins on shrimp imports from China ranging from 0.04 percent to 112.81 percent, and from Vietnam ranging from 12.11 percent to 93.13 percent.

Due to the threat that duties pose to both consumers and to the consuming industries that serve them, the Consuming Industries Trade Action Coalition (CITAC) has formed an alliance with the American Seafood Distributors Association (ASDA), bringing together concerned grocers, restaurants, processors, distributors, business councils, and U.S. exporters to form the CITAC/ASDA Shrimp Task Force. The goal of the Shrimp Task Force is to assure that the U.S. government considers all the facts, applies the law, and exercises its discretion in the case fairly and objectively, with a full understanding of the national ramifications of any decision.

For more information on the Shrimp Task Force, contact George Felcyn at (202) 466-6210 or .