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Financially pinched lobstermen get federal assist

But lobster-economy experts say a new relief package leaves out those hit hardest by the trade war
Published: Sep. 15, 2020 at 1:41 PM EDT
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WASHINGTON (Gray DC) - The country is set to help Maine lobstermen trapped in a trade war claw back lost cash. But, those in the industry feeling the biggest pinch, don’t qualify for aid.

The men and women who hauled 100-million pounds of Maine lobster ashore in 2019 could soon net another $50-million for their trouble.

“We’re really glad that some of this money is going to make it right to the boats,” said Kristan Porter. He’s a lobsterman in Cutler, Maine, and president of the Maine Lobstermen’s Association.

Porter is planning on applying to the newly-created Seafood Trade Relief Program, and if approved, he’ll pull in 50 cents for every pound he harvested last year. He wouldn’t say exactly how big his 2019 catch was or how much he stands to gain.

“Oh that’s top secret,” he quipped.

Kristan Porter is a lobsterman from Cutler, Maine, and president of the Maine Lobstermen's Association.
Kristan Porter is a lobsterman from Cutler, Maine, and president of the Maine Lobstermen's Association.(Gray DC)

While lobstermen received record prices last year, Porter said it was a bit of a wash, as the industry harvested 20-million fewer pounds. He expects most of his peers will apply for assistance, adding, “they’re still wondering if it’s real.”

The federal payout is calculated to compensate for Chinese taxes on imported American seafood. “We probably would have seen a bigger price [in 2019],” Porter said of the impact tariffs had on his sales.

China’s tariffs are retaliation for economic attacks launched by the U.S. in the on-going trade war between the two countries.

When asked when lobstermen could expect to receive their checks, White House Economic Policy Advisor Peter Navarro promised speed but did not offer an exact timeline. "We’re going to get folks the money as quickly as possible,” he said.

White House Economic Policy Advisor Peter Navarro promises aid will reach Maine lobstermen soon.
White House Economic Policy Advisor Peter Navarro promises aid will reach Maine lobstermen soon.(Gray DC)

The lobster industry enjoyed largely smooth-sailing over the last few decades, with prices and production steadily trending upward, before getting caught up in the trade war in 2018. But, Navarro said blame for the trade war fallout should fall on past administrations, not the president.

“What President Trump had to do when he came into office was standup to China’s economic aggression,” he said, arguing the Chinese had previously bullied America into accepting bad deals.

While the administration portrays itself as standing behind the lobster business, Colby College economics Professor Michael Donihue said the new federal aid leaves out those hit hardest.

A large network of more than 300 lobster dealers buy from harvesters like Porter at the docks. They process the catch and sell to each other, restaurants next door, and distributors overseas.

“The dealers got pinched, really badly,” he said, “because they’re the ones who actually have to deliver the product to market, and they’re the ones who get the final price.”

The dealers are paying the usual price at the docks, but fetching far less than they used to on the open market. Donihue said while general economic principles would predict lower prices to trickledown to the docks, the lobster market plays by its own rules, and he doesn’t see evidence of that happening any time soon.

Beginning in 2017, Donihue worked with the state and industry to compile an economic analysis of the lobster distribution supply chain. Dealers he surveyed reported international trade agreements as the third biggest challenge to their operations, behind ‘slim profits and labor shortages’ and ‘quality of product’.

Colby College Economic Prof. Michael Donihue said leaving lobster dealers out of the relief program is baffling, “that’s where a lot of us are scratching our heads.”
Colby College Economic Prof. Michael Donihue said leaving lobster dealers out of the relief program is baffling, “that’s where a lot of us are scratching our heads.”(Gray DC)

Helping the harvesters but leaving out the dealers is puzzling to Donihue. “That’s where a lot of us are scratching our heads,” he said, “it feels a bit political”.

An economist by trade, Donihue didn’t want to dive too deeply into questions about politics. But he said, it’s not hard to see why the administration would want to ingratiate itself to the state’s iconic, highly-visible industry.

Maine’s elections this year could have a substantial impact on national politics.

The state’s two districts split between President Donald Trump and Hillary Clinton in 2016. Navarro spent much of his interview linking the trade relief package to the upcoming elections, and suggesting only President Trump can handle diplomacy with the Chinese.

Just down the ballot, Sen. Susan Collins' (R-ME) re-election bid could determine which party controls the U.S. Senate in 2021. And, a tight race is expected in the 2nd Congressional District between incumbent Rep. Jared Golden (D-ME) and Republican challenger Dale Crafts.

In a joint statement, Sen. Collins, Sen. Angus King (I-ME), and Rep. Chellie Pingree (D-ME) applauded the U.S.D.A.'s new funding for lobster harvesters but also called for expanding the program to include dealers.

Donihue said many lobster dealers have waded into new markets, partially making up for lost overseas revenue. He said those who manage to stay afloat should recover quickly once there’s a trade war truce and restaurants recover from the pandemic.

Porter said the impacts of low restaurant traffic due to the pandemic are felt at the docks, estimating a 20-25 percent drag on prices. While the federal assistance is technically designed as relief from the trade war, he said it will help navigate through the pandemic. Assistance will help balance the books, pay workers, and keep food on the table.

But even in the midst of a trade war and pandemic, Porter’s biggest concern is the potential for new regulations to better protect whales. “It’s what could put us out of business or change our business completely.”

The U.S.D.A will accept applications for relief from lobstermen through mid-December. Payouts will come shortly after they’re approved.

Copyright 2020 Gray DC. All rights reserved.

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