1. 



CHAPTER VIII 



SUMMARY AND CONCLUSIONS 



Summary 

 The Industries 



The New England groundfish industry 

 has been of historic importance to the 

 growth of this region. It was a major 

 source of the capital which built the 

 manufacturing economy which today charac- 

 terizes the area. In recent years the 

 fishing industry has declined in impor- 

 tance to the area as a whole, although 

 certain port cities are still dependent on 

 the fishery for their continued economic 

 health. 



New England's chief competitors in 

 the groundfish market are the Atlantic 

 Provinces of Canada, which account for 

 more than two-thirds of the iirports of 

 groundfish fillets into the major markets 

 of this country. The industry in the At- 

 lantic Provinces differs in a great many 

 respects from that of New England. 



The Canadian industry is centered in 

 relatively underdeveloped areas heavily 

 dependent on primary industries. They are 

 in an vinfortunate geographic location rela- 

 tive to maricets. But they are very favora- 

 bly located relative to the fishery re- 

 soxirces, and have been able to overcome 

 unfavorable market location by building an 

 industry desiling in a frozen product. Thus 

 the Canadian industry, unlike the New Eng- 

 land industry, is dominated by the proces- 

 sor rather than the trawler operator. Al- 

 so, because of its location and structure 

 the Canadian industry derives definite cost 

 advantages. Since there is a great deal of 

 underemployment, especially in the fishing 

 industry, and the standard of living is 

 lower than that of New England, the labor 

 cost is much lower. Another factor working 

 to keep costs low is the presence of a few 

 large vertically-integrated firms which 

 own the trawlers that catch the fish, own 

 the processing plants, and maintain whole- 

 sale and retail outlets where their prod- 

 ucts are sold. Vertical-integration also 

 enables the Canadian producer to achieve 

 economies of scale which are unknown in the 

 New England industry. 



A major characteristic of the New Eng- 

 land industry is port specialization. Bos- 

 ton is a haddock port; Gloucester and the 

 Maine ports are ocean perch ports. Such 

 specialization is unknown in the Atlantic 

 Provinces, where diversification is the 

 rule. Heavy dependence on one species can 

 have disastrous effects when the resource 

 declines in abundance. As evidence of this^ 

 the direct relation between the decline in 

 abundance of haddock on Georges Bank and 

 the decline in the Boston haddock fishery 

 may be noted. 



In an effort to raise living stand- 

 ards in the Atlantic Provinces, the Cana- 

 dian government has initiated and will 

 continue schemes to raise incomes by in- 

 creasing labor productivity. In the fish- 

 ing industry this has taken the form of 

 subsid for construction of small vessels, 

 and loan funds for vessel construction. 

 These plans, while not completely success- 

 ful, have acconplished the immediate ob- 

 jectives set out for them and will contin- 

 ue in the foreseeable future. 



Although these subsidized vessels 

 land groundfish which competes in the mar- 

 ket with groundfish landed in New England, 

 no direct cost comparisons can be made be- 

 tween the subsidized vessels and New Eng- 

 land trawlers because the former are too 

 dissimilar in types and sizes, and in all 

 cases are much smaller craft than those in 

 the New England fleet. The processors to 

 whom these subsidized vessels sell their 

 catch do, however, derive an advantage in 

 that -they can buy much of their require- 

 ments from 'these boats and thereby save 

 the overhead costs of additional trawlers 

 of their own. To the extent, therefore, 

 that the subsidy is used to cover costs 

 \rtaich the processor would otherwise have 

 to bear, and to the extent that the sub- 

 sidy permits the independent fisherman to 

 accept a price lower than would otherwise 

 be possible without it, the Canadian proc- 

 essor has a distinct and very real compet- 

 itive cost advantage over his New England 

 rival. 



2, The Resources 



Biological studies of the haddock re- 

 source on Georges Bank indicate that the 

 yearly catch will stabilize at between 90 



89 



