business
Pago Fishermen Suffer Through Price Drought
Governor’s Tuna Tax Plan Causes Cannery Opposition
The drastic drop in the world market price of tuna, the lowest it’s been in 34 years, has fishing vessels by the dozen packing Pago Pago harbor, anchored idly. Carlos Sanchez of StarKist Samoa's purse seine fleet said that vessels are not going fishing because the price of tuna is just too low and not worth the effort. Skipjack and yellowfin prices, normally between $700-$1,100 per ton, have plummeted to about $400. By the end of February, however, prices began inching up lending some needed optimism to the fishing fleet, which for the first time in months began unhooking lines and heading out to fish.
Some vessels have only made one trip in the past year, said American Samoa Purse Seiner Services official Tony Grey. Southwest Marine, operator of the territory’s only dry-dock service, is also facing hardship for lack of business. Company general manager Jim Fones said that the workforce at was reduced from 100 in 1998 to the 55 employees.
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The ongoing price crisis affecting the tuna industry has prompted American Samoa Governor Tauese Sunia to propose legislation for a 20 percent import tax on the purchase price of light meat off-loaded by fishing vessels not registered in the U.S. The administration says the plan is aimed at stimulating the industry. But the proposal has caused a vigorous opposition from both canneries and the U.S. Tuna Foundation (USTF).
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Lt. Governor Togiola Tulafono, who submitted the legislation to lawmakers, said “this legislation is intended to stimulate use of our port by the U.S. purse seiner fleet, which is currently lying idle due to the depressed prices. As long as the fleet remains idle, we lose fuel tax revenues and the many other economic benefits.”
But StarKist Samoa and COS Samoa Packing flatly oppose the legislation. USTF executive director Dave Gurney argued that it will result in lost revenue in American Samoa. Although the group supports the government’s aim to use the U.S. fleet, Gurney said an import duty is no way to stimulate the tuna sector. He said the canneries require constant production and with the U.S. fleet not fishing, they purchase fish from non-U.S. suppliers. He said the import duty would deal a serious blow to tuna produced in the territory that must compete with low-cost canneries in Asia and South America.
About 175,000 tons of light meat tuna is off-loaded in American Samoa annually, 30 percent of which is from foreign flag-caught fish, totalling $25 million in 2000. The United Tuna Cooperative (UTC), however, supports the proposed legislation noting that U.S. flag purse seiners based in American Samoa can provide nearly all the light meat needed. UTC, which represents independent U.S. boat owners, said bringing in fish from foreign sources only serves to diminish the need for the local fleet. “If the canneries purchase foreign flag fish, Samoa should receive some additional benefit since it is either from vessels not based in Samoa, or it is fish that is substantially processed in other locations with no Samoan involvement,” said a UTC official.
But StarKist Samoa officials testified in Feburary to the American Samoa Senate that if the legislation is passed it would result in the loss of more than 500 jobs at StarKist Samoa. StarKist Vice President of North America Operations Barry Mills also branded the legislation “unconstitutional” because it violates the company’s tax exemption. He said the company would not buy foreign-caught fish if the legislation passes because it would be too expensive so the government would not earn any new revenue. And without access to foreign fish, the cannery would reduce its production, leading to a layoff of close to 20 percent of its workers, he said.
