MercoPress. South Atlantic News Agency

Wild West spirit in Patagonia waters, says The Economist

Overfishing and high costs are floundering Argentine fishing industry

Under the heading of “Fishy business; Patagonia's troubled waters”, The Economist gives a realistic insight into the Argentine fishing industry and the Wild West mentality that prevails in the so-called Argentine Sea, which threatens the economic and conservation stability and future of this activity.

It is the conventional image of a grizzled gaucho lassoing cattle on the endless pampas that conjures up the notion of a still untamed frontier in Argentina. But if anywhere in the country resembles the Wild West it is the waters off its long eastern shore, especially the windswept Patagonian coast, where fishermen prowl for squid, shrimp and hake. A combination of over-fishing, weak regulation and belligerent unions has left the industry floundering, incidentally dealing a blow to Argentina's decades-long effort to populate and develop its desolate southern steppes. The country's biggest fishing fleet is based at Mar del Plata, in Buenos Aires province. Much of its workforce is employed informally, without legal contracts. The problems are of a different order at Puerto Madryn, the Patagonian home of the second-biggest commercial fishing fleet. Fishing businesses received subsidies in the 1980s and 1990s to set up there, as part of a government effort to develop Patagonia. These companies flourished after Argentina's big devaluation of 2002, because they export all of their catch but most of their costs are in pesos. Catches were plump and so were profits. But with economic recovery, trade unions have regained their bargaining power and begun pressing for higher wages. They staged a 45-day strike in 2005, occupying processing plants. In 2007 protesters burned down a processing plant in Puerto Deseado, further south. All this caused the companies to yield. In real terms, wages have risen 150% since 2003, according to company bosses. Since they compete in world markets with farmed shrimp and fish, the companies find it hard to pass on these costs in the form of higher prices. Argentines prefer beef to fish. Much of the catch goes to Spain. The unions have gained control over the hiring of labor. "There's no free market for port workers," says Martín Luis Olmo, president of the fishing council of the Puerto Madryn municipal government. "The unemployed know they can't get work here, because the union won't let them in." The result is that for every boat that unloads its catch, two others are waiting in the harbor". The biggest threat to the industry is its own rapacious over-fishing. Nationally, skippers pay some 2 to 3 million US dollars a year in bribes to inspectors, and routinely underreport their catches, according to the Centre for Development and Sustainable Fisheries, an Argentine NGO. The adult hake population has declined by 70% in the past 20 years, according to an investigation by La Nación, an Argentine newspaper. "You used to see yellow rivers of hake eggs in the water," says Mr Olmo. "But it hasn't been that way for years." Largely because Patagonia's politicians want to expand onshore fishing-industry jobs, quotas have been set unsustainably high for years. Enforcement has been halfhearted. The machines used to measure catches can easily be removed or tampered with, and inspectors are poorly paid. Belatedly, the government has reduced hake quotas in each of the past two years. They are now a third below their previous level. That looks like too little too late. The climate of lawlessness enveloping the industry goes further. In 2003, the owner of a big fishing company in Puerto Madryn, Raúl Espinosa, was shot dead when he opened the door of his house. Suspicion has focused on Mr. Espinosa's former business associates, who became competitors after he set up his own firm, though none of them has been charged. Five years later the case remains in limbo, having passed through the hands of 16 different judges. Disputes between rival unions have also claimed lives. Puerto Madryn's fishing entrepreneurs speak of crisis. Most companies have already started laying off workers, closing plants and selling boats to cover their losses, which reached around 15% of sales in 2007. They are counting on action from the governmentâ€"either the reinstatement of the long-expired subsidies that lured them to Patagonia in the first place or a reduction in the 10% tax currently levied on their exports. But they may be disappointed: the government is short of cash and the need to develop Patagonia may now seem a low priority. And having raped the fishing grounds, the industry may only have a long-term future if it gets smaller.