In 1981-82 the Inspection Division was allocated 64 

 person years (not all of which were filled) and a budget of 

 $1.8 million. 



Product Inspection and Quality Control 



The Department and the fishing industry recognize the 

 extreme sensitivity of fish markets to the product's repu- 

 tation for high health standards. The industry is particu- 

 larly vulnerable to deficiencies in the quality of canned 

 salmon products. Thus, the Department's role in ensuring 

 that standards of quality and health are consistently met 

 is important to the whole fishing industry. Moreover, 

 many countries require that imported fish products be 

 certified by a recognized authority as having met 

 specified processing and quality standards. The Depart- 

 ment meets this requirement by certifying exports (which, 

 incidentally, enables exporters and importers to proceed 

 with financing arrangements). 



The Department's performance in protecting product 

 quality appears to have been very good, and its product 

 inspection and certification arrangements are widely 

 respected. In 1981 export certificates were issued for fresh 

 and frozen fish products valued at more than $100 mil- 

 lion and canned salmon valued at $40 million. The 

 Department's certification of quality undoubtedly helps 

 to ensure this continuing access to valuable foreign mar- 

 kets. 



My investigations suggest that the commercial fishing 

 industry would benefit from the Department's efforts in 

 maintaining quality standards being extended in a couple 

 of respects. The most important relates to the grading of 

 fish landed, especially salmon. At present, salmon are 

 roughly graded in some cases by size and colour. A 

 significant distinction is made between troll-caught and 

 net-caught fish, but this distinction is becoming obsolete 

 with changes in technology and fish handling: fish caught 

 in nets and handled carefully are now often sold as troll 

 fish (which bring a higher price). As a result, the statistics 

 on landings by sectors of the fleet are misleading, and 

 grade distinctions are inconsistent. 



The problem is complicated by the present pricing 

 arrangements for net-caught salmon, in which pre-season 

 bargained prices provide for a uniform price for each 

 salmon species. This provides no reward for fishermen 

 and vesselowners who strive for higher quality standards. 



In other primary food-producing industries, such as 

 wheat and livestock, governments play a valuable role in 

 supporting quality grading that serves as a basis for pric- 

 ing. A similar system for grading raw fish, in which varia- 

 tions in fish quality are recognized, would provide incen- 

 tives for achieving higher standards. This would benefit 

 the fishing industry and also serve the broader public 



OTHER INDUSTRIAL DEVELOPMENT POLICIES 167 



interest by encouraging the most beneficial use of 

 resources. Accordingly, I recommend — 



7. The Department, in close consultation with the fishing 

 industry, should explore the feasibility of establishing 

 quality grades for fish landed, with special attention to 

 salmon. 



I emphasize the importance of close cooperation with 

 the industry in this matter. I do not intend that the gov- 

 ernment become heavily involved in dockside grading or 

 interfere with private marketing processes; it should pro- 

 mote the establishment of grades and leave the industry 

 itself to administer them to the maximum extent possible. 



The second opportunity for constructively extending 

 product grading relates specifically to the small food her- 

 ring industry. In Chapter 10 I noted the sensitivity of 

 foreign markets to the grade of food herring products, yet 

 there are no international standards for them. Although 

 markets for food-herring products are currently weak and 

 while herring bring much higher returns in the roe 

 fishery, this may change in the future especially if foreign 

 buyers can be a.ssured of high-quality food herring from 

 this region. 



I therefore recommend — 



8. The Department should investigate the possibility of 

 establishing product quality standards for food-herring 

 products. 



This investigation should be directed toward establish- 

 ing standards recognized in international trade, which in 

 this case involves mainly sales to Japan. Thus, it should 

 be conducted in consultation either with the Codex Ali- 

 mentarius Commission or directly with Japan. 



Export Regulation 



My major reservation about the Department's 

 approach to quality control in exported fish products is 

 its attempt to use its regulations to restrict export oppor- 

 tunities in the interest of promoting local processing: it 

 apparently restricts exports of frozen sockeye and pink 

 salmon to protect the canning industry; it applies pro- 

 cessing requirements on roe and food herring and herring 

 spawn-on-kelp in an efibrt to increase "labour content"; 

 and it imposes parallel regulations on pollock and certain 

 shellfish.-" 



These objectives are quite separate from the Depart- 

 ment's responsibilities in setting and enforcing product 

 quality standards, and indeed conflict with the objective 

 of enhancing export opportunities. Although pressure 

 from established processors and plant workers to restrict 

 exports of less highly processed products is understand- 

 able, to do so is inconsistent with fishermen's interest in 

 high prices and with the pubhc interest in generating the 

 highest returns from resources. 



