11/07/2013 02:30 EST | Updated 01/23/2014 06:58 EST

Panel releases report in effort to put a pinch on plunging lobster prices

AMHERST, N.S. - An independent panel set up to examine slumping lobster prices in the Maritimes is calling for a levy on each pound caught to pay for a marketing campaign aimed at boosting the fishery's profile.

The three-person panel was set up by the Maritime provinces to look at the erosion of lobster prices that has harmed processors and harvesters in an industry that is crucial to rural areas and injects about $1 billion into the region's economy.

The report released Thursday recommends a levy of one cent per pound to be paid by fishermen, and another cent per pound to be paid by the onshore side of the industry, including buyers and processors.

Panel member Lewis Creed estimates this would raise approximately $2.5 million annually.

The report recommends 85 per cent of the funds raised by the levy go to advertising campaigns run by the Lobster Council of Canada. The remaining amount would go to support an institute that would provide fishermen with timely information on the prices being offered to harvesters before they land their catch.

The report also suggests the creation of a joint marketing board for the Maritimes and calls on the industry to set up standards that would allow for prices to be linked to the quality of the catch.

Ron MacKinley, the fisheries minister for Prince Edward Island, said he believes the lobster industry can increase demand for its product if it follows the lead of other businesses.

"Just look at the amount of money spent on advertising by General Motors, Ford or Toyota trying to hold markets or break into new markets," he said in an interview.

"There's advertising in everything you do."

The report says fishermen and the various processing and buying groups lack information, concentrate on quantity over quality, and don't co-operate with each other.

As a result, Canadian fishermen have been losing market share to better-organized competitors in Maine, says the report.

Creed, a former P.E.I. deputy minister of fisheries, said fishermen often are on the water for a week before they realize what prices might be. He said if fishermen are aware of catch prices before they go to sea, they could improve planning on expenses such as crew, bait and fuel.

A minimum price-setting mechanism agreed to by industry groups and enforced by provincial governments would also help, he said.

Michael Olscamp, the New Brunswick minister of fisheries, said fishing seasons have recently started with a glut of lobster that causes prices to plummet.

"Too much lobster arrives in the plants and the industry can't process all of it at once," he said. "As a result, the quality of the product suffers immensely."

If the industry had stable prices and joint marketing efforts, the chaotic rush to be first to fish for lobster may decline, he said.

The Nova Scotia fisheries minister said he foresees working with the industry to set minimum standards for catch quality.

But the industry has to unite and co-operate on the panel's findings first, Keith Colwell said.

"If people want to continue to make a living, we're going to have to work together on it," he said.

- By Michael Tutton in Halifax