MercoPress. South Atlantic News Agency

Argentine fishing industry warns about excessive costs

The Argentine fisheries industry and unions have warned that the coming squid and prawn seasons are imperiled because of the drop in international prices and rising domestic costs.

"Prices have fallen up to 50% in the last six months. This leaves industry in a very precarious situation, to which we must add domestic costs, a pincer that is threatening the coming season", said Alfredo Pott head of the Pesel group and president of the Capeca fisheries industry chamber. "I we don't reach an agreement we could face a social rupture of unexpected consequences which no government subsidies will solve", warned the chairman of the Maritime Workers Union, a trade union aligned with the Kirchner administration. According to Mr Pott several Argentine fishing companies operating from Puerto Deseado, Puerto Madryn and Comodoro Rivadavia took loans last year to address fixed and operational costs, and with current prices "there's no way they can make it back to sea". And if this happens "only foreign companies operating in Argentina with their main offices overseas will be catching". Capeca argues that the current crisis has been caused by "the excessive increase in domestic costs which annulled the positive effects of the 2002 devaluation; loss of fiscal incentives for Patagonia ports; the hike in fishing licenses and labor costs that ballooned from 33% to 50% of our costs structure". Faced with this situation the four main fishing chambers addressed a letter in early November to the federal government in Buenos Aires requesting help to face the situation. In the letter the fishing companies explain that the southwestern Atlantic fisheries "has become the main Illex fisheries and the numerous fleet operating on mile 201, next to our exclusive economic zone has become our main competitor in international markets, helping to depress prices, with the difference they don't have to pay export duties, they are not forced to unload ashore but rather tranship in the high seas and because those vessels don't respect international labor agreements and their crewmen earn significantly less than our crews". This year has been particularly complicated for Argentine fishing activities with a long conflict in Puerto Deseado that included the torching, --and total loss--, of six plants in the Industrial Park of that city mostly belonging to Spanish investors and which the Kirchner administration has promised to compensate. According to Capeca in spite of several months since the incident, "companies have yet to receive assistance". Furthermore exports so far this year compared to 2006 dropped 12.3% in volume and hake once again seems to be undergoing a recessive cycle with insufficient catches. Companies concluded the letter requesting an end to export duties (in the range of 5 to 10%); the re-implantation of fiscal benefits for operating in Patagonia ports and for added value to exports; lower port fees and fishing licenses, flexible loans to help finance operational costs and to insist with the 201plus mile issue in international forums.