Fair salmon

A decision by the U.S. Department of Commerce to investigate dumping by Chilean salmon producers is an important, penultimate obstacle cleared in Maine aquaculture’s race to survive and perhaps to thrive.

Commerce last week found reasonable grounds in allegations by a coalition of Maine and Washington fish farmers that the increasingly powerful Chilean industry is attempting to kill them off with a lethal combination of government subsidies and below-cost dumping. The final step is a similar ruling by the International Trade Commission.

A mere blip in the marketplace just 10 years ago, Chile now is the world’s second-largest salmon producer, exporting nearly 60 million pounds to the U.S. last year, a 42-percent market share, at a price American growers say is more than 40 percent below the cost of production. Meanwhile, the Americans’ share of their own market is slipping. Their profit margin, if any, is counted in pennies per pound instead of dollars, and 13 Maine and Washington farms have closed up shop.

The point-counterpoint goes like this: Chile says it’s succeeding because it’s efficient; the Americans say Chileans may have a work ethic to beat the band, but nobody works that hard, that smart.

With Commerce on board, all that remains is for the ITC to agree that something is fishy in Chile and a full-blown inquiry is under way. Domestic and Chilean producers made their cases before the ITC last week and Joseph McGonigle, director of the Maine Aquaculture Association, is upbeat.

“We did an adequate job in our presentation, but the Chileans did a terrible job,” McGonigle says. “If they decide to investigate, this action will go forward and nothing can stop it.”

It won’t happen fast, such inquiries can take up to a year, but the result can be worth the wait: a similar action against Norway a few years ago ended in a 27-percent tariff.

All this international intrigue was the last thing on anyone’s mind when the first Maine salmon farms were born some 15 years ago. Optimism about an economic boom for Washington County was rampant: perfect water; a hardy, sea-faring, eager workforce; a marketplace that gobbled all the salmon it could get at caviar prices. Anybody and his brother could, and often did, throw a pen in the water and start raking in the profits.

That was then. In the now, Maine salmon aquaculture looks healthy — some 650 direct jobs, some $65 million in economic impact — but the cold reality is that fish farming is Big Business for the Big Boys. All the major Downeast sites are controlled by large Canadian corporations with more resources, more experience, more know-how, more government investment in research and infrastructure. The locals have gone from business owners to hired hands. That’s neither good nor bad, that’s just the way it is in a capital-intensive international business where a $2 million investment might get your foot in the door.

The action against Chile coincides nicely with a state study, initiated in response to concerns about Canadian control of Maine waters, now under way on the industry’s status and needs. What the industry needs, what it’s always needed, is not subsidies or handouts, but access to capital at reasonable terms. A favorable outcome on the trade front resulting in an attractive profit margin, combined with leadership from Augusta in steering investment dollars Down East, could help Maine aquaculture at long last fulfill its promise and Maine people back in the driver’s seat.