IftO Oim K INDllSIRI \l |)| \l I OI'MI M ItJlKIIS 



anu>i\g tirni-s in the iiulu.sln, aiul the o|icK)riiimly lor oth- 

 ers lo cuter it lhe\ led that thc> (.an sucLcsslully ann- 

 pctc, promotes economic ctlicicncy in the use of available 

 rcsi>urces. 



Furthermore. inde[">en(.lcnt fish buyers can perform 

 valuable serMces to the industry by mxitching available 

 raw prixlucts with the requirements of priKCSsors and 

 thus ensure that raw prtKluct will (low to those able to use 

 It most etticiently and hence who %vill pay the highest 

 price. This kind of competitive environment also ensures 

 maximum prices to the fishermen. 



The same holds true for fish processing. Some excess 

 capacity is bound to txrcur in certain .sectors at particular 

 times, as new firms enter or as one sector expands (such 

 as freezing) at the expense of another (such as canning) in 

 response to market trends. Parallel circumstances can be 

 expected in any manufactunng industry. 



Consequently, I endorse the province's policy of unre- 

 stricted entry for both fish buyers and processors. But 

 while new entrants should not be artificially restricted, I 

 see no need either for subsidizing them. The industry 

 appears capable of adjusting to and accommodating the 

 available supplies of fish; and artificial stimulus to 

 expand capacity will only prejudice the competitive posi- 

 tion of established firms. 



A related concern of some established processors is 

 that the smaller operators "high-grade" the harvest; that 

 is, they buy and process only the most profitable species 

 and grades offish: 



The existence of these "high-graders" is 

 predictably forcing traditional processors to 

 re-evaluate their role as a market for all fish 

 from all fishermen. . . . Standards cannot be 

 so onerous that they eflectively restrict all 

 new entries, but they should certainly be at a 

 minimum level requiring a serious investment 

 in processing facilities and a year-round com- 

 mitment to be a complete market for a distin- 

 guishable class of fishermen.-'' 



Public policy should not discourage specialized proces- 

 sors, however. If each processor were required to provide 

 a market for all fish from all fishermen, potential efficien- 

 cies of specialization in the industry would be lost. Pro- 

 cessors should be free to participate in any sector of the 

 industry and to specialize in any product. This competi- 

 tion helps to ensure that resources are used most 

 efficiently and will generate maximum net returns. 



However, the pricing arrangements for fish aggravate 

 the difliiculty the large producers face in competing with 

 the so-called independents. The negotiated prices for 

 more valuable species are apparently sometimes lower 

 than their value, to offset higher prices for low-valued 



species. And, as I explained above, pre-season bar).;aiiicil 

 prices tor net-caught saliiu)n do not discriminate among 

 grades, and the large buyers (who are traditionally com- 

 mitted to their best fishermen to never refuse any fish) 

 sometimes take poor-quality fish at a loss. I his suggests a 

 need for more discriminatory price negotiations and a 

 grading system for landed fish, as I propt)se below. 



PRODUCT QUALITY REGUIATION 



Primary re.sponsibility for maintaining standards of 

 quality offish products rests with the Inspection Division 

 of the Departmenf s Field Services Branch. Its role is to 

 ensure that fish products meet health standards and 

 requirements relating to grading and labelling, and to 

 promote improvements to industry practices." 



The Department's legal authority for much of this 

 work derives from the Fish Inspection Act,^* which pro- 

 vides for inspection of fish products that are traded inter- 

 provincially and internationally. But it administers other 

 related federal legislation as well."' As I explain in Chap- 

 ter 1 8, the province is responsible for standards of prod- 

 ucts produced and marketed entirely within British 

 Columbia; but its relevant legislation, the British Colum- 

 bia Fish Inspection Act,^* is also administered by the fed- 

 eral authorities. 



To ensure that fish products meet health standards, the 

 Department's Inspection Division routinely tests .samples 

 for bacteria and contaminants. A special coordinator is 

 concerned with controlling paralytic shellfish poison. All 

 imported fish products are subjected to rigorous inspec- 

 tion as well. 



The division also periodically inspects vessels licensed 

 to fish and pack fish and facilities for unloading, handling 

 and transporting fish to ensure they meet specified stand- 

 ards. 



Processing and packing plants in British Columbia are 

 licensed by the province, but since most export some of 

 their production, they require federal certification. The 

 Department enforces both federal and provincial regula- 

 tions relating to their construction, equipment and opera- 

 tions. 



The Department's fish quality improvement program 

 includes efforts to improve fish handling practices on ves- 

 sels, to upgrade the quality of fish frozen at sea, to 

 improve quality control in processing plants and to 

 design new regulations. In cooperation with the industry, 

 the Inspection Division is attempting to develop grade 

 standards for final products. And, to facilitate interna- 

 tional trade through establishing processing and product 

 standards, the division is participating in the Codex Ali- 

 mantarius Commission of the United Nations. 



