Journal of Commerce

Protectionism Won't Help Shrimpers

By Wally Stevens
President, American Seafood Distributors Association
December 20, 2004

As Alan Field's recent story, "Shrimp Producers Cast Wider Net," (DJC, December 6, 2004) points out, "U.S. shrimp producers have been struggling with low prices, rising costs, and stiff competition from imports, which now supply 88 percent of the market." In fact, imported shrimp has had a very positive impact on both U.S. consumers and the broader U.S. economy that deserves to be more fully explored.

Imported shrimp is now a cornerstone product of "the other domestic industry" — seafood importers, processors, truckers, distributors, restaurants, and retailers — that together account for twenty times as many U.S. jobs as the domestic shrimp industry. As a direct result of access to affordable, high-quality imported product, shrimp is now America's favorite seafood for the second year in a row, and its consumption is only growing. Last year, Americans consumed a record 4.0 pounds of shrimp per person, up from 3.7 pounds in 2002.

Once thought of largely as a luxury for the rich, shrimp is now found at a wide range of family-style and quick-service restaurants. It has also become an increasingly important product offered for sale to American families by grocery stores, specialty food stores, and even "big box" retailers that sell food products for home consumption. According to a report released this summer by the Trade Partnership, purchases of shrimp at grocery stores and other retail outlets doubled between 1995 and 2002, the last year for which data is available. In fact, the report found that shrimp consumption as a share of total food consumption has increased 45 percent among Americans with household incomes of less than $15,000 per year. Imports are responsible for these positive trends.

U.S. businesses that process and add value to shrimp have come to rely on imports thanks to three essential attributes: quality, consistency of size, and year-round availability. Aquaculture techniques allow producers to efficiently harvest a virtually unlimited supply of shrimp in an extremely efficient manner, on an as-needed basis.

U.S. shrimpers face uncertain weather conditions, high fuel, labor, and equipment costs, and a finite resource. The U.S. shrimp industry simply cannot meet more than about ten percent of total U.S. demand. The U.S. industry filed a dumping case in the mistaken belief that imports are the problem and limiting imports will save U.S. shrimpers. The reality is that that the U.S. industry needs to learn how to compete in a global marketplace, where success depends on furnishing consistent, high-quality, at reasonable prices.

Rather than rely on government protectionism, U.S. shrimpers should be spending their time and money on constructive steps necessary to restructure their industry. A recent report on the domestic shrimp industry put out by the U.S. government, written at the request of U.S. shrimpers themselves, makes clear that to regain economic health, the industry must reduce the size of the domestic shrimp fleet, reorganize into cooperatives, and improve product differentiation from imported shrimp.

The industry has so far acted only on the latter point. The domestic industry's new "Wild American Shrimp" campaign is a step in the right direction to help create a unique brand identity that consumers may find appealing — and may even be willing to pay a bit extra to obtain. The entire industry would be better off working together to promote shrimp sales rather than attempting to erect legal roadblocks that will not provide the kind of market share gains that U.S. shrimpers have been promised…

Domestic shrimpers need to confront the fact that legal action is little more than a short-term panacea at best. International competition is here to stay, and duties will not end the technological advantage that aquaculture provides producers throughout the rest of the world. Instead of trashing the competition and letting themselves be misled into thinking that legal action is the way to take control of the marketplace, U.S. shrimpers need to take a long, hard look at how their industry can stay viable — and perhaps even prosper — in the years to come.