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Tug of war

Domestic catfish industry combats claims of protectionism as switch to USDA looms

By John Snyder
December 01, 2009

U.S. fish farmers and importers are finding themselves at opposite ends of the table regarding domestically produced catfish and imported swai and basa, Vietnamese "catfish-like" species belonging to the pangasius family.

Pangasius has taken a foothold in the U.S. seafood industry over the past decade as importers position the plentiful, economical whitefish alternative to U.S. seafood buyers. The finfish is now a regular item in ethnic markets and buffets on the Vegas strip. But what happens in Vegas rarely stays in Vegas: Catfish inspections and oversight could be moving to the U.S. Department of Agriculture, which may change the definition of "catfish" and effectively halt all pangasius imports as early as next year. To follow this political cat fight one needs to go back to 2002, when the domestic catfish industry lobbied the Food and Drug Administration to ensure that any catfish sold in the United States as catfish must be in the taxonomic family of Ictaluridae, the species produced by U.S. catfish farms and also farmed and imported from China.

Fast-forward six years to a provision of the 2008 Farm Bill supported by domestic catfish producers that would move catfish oversight from the FDA to the USDA. At the same time, USDA Secretary Tom Vilsack is considering expanding the definition 
of catfish to include pangasius species, which would flip the 
2002 ruling on its backside and 
allow imports to once again 
be labeled catfish.

Why would the domestic industry support a measure that's the complete opposite of what it requested beforehand?

Although the USDA and the FDA are both responsible for food safety, each agency has different quality-control criteria, processing facility standards and import guidelines. The regulation of fish products would be a new endeavor for the USDA, which now oversees meat, poultry and other farm products.

In an April 2009 letter to the USDA's Vilsack, congressman Barney Frank (D-Mass.), whose district includes many seafood processors that use pangasius, expressed his opposition to the potential changes in the definition of catfish. Frank contends that if the definition is expanded to include pangasius fish, the USDA inspections would have to occur in the country of origin.

"The problem is that all indications are that it would not be possible at present for these countries (Vietnam or other nations in East Asia) to meet current USDA inspection standards, which would in turn end the ability of U.S. processors to import any of these fish," Frank said in the letter 
to Vilsack.

The USDA rule was supposed to be published this month and followed by a public comment period. A decision on the reclassification of catfish species from Secretary Vilsack is expected sometime in January.

The gloves come off

The 2002 law was passed in direct response to the domestic catfish farmers' argument that pangasius imports, which are primarily produced in Vietnam and are a mainstay of the Mekong Delta economy (Vietnam produces more than 2 billion pounds of pangasius each year, generating 2.1 percent of the country's gross domestic product), provided the marketplace with a cheaper substitute for domestic catfish. The industry claimed imports were undercutting the price of domestic farmed fish and were eroding U.S. farmers' market share. In 
response, U.S. catfish farmers also successfully petitioned the U.S. Department of Commerce to impose tariffs between 36 percent and 64 percent on all pangasius imports.

In spite of the duties and labeling restrictions, U.S. importers have continued to successfully develop markets for the catfish-like species, refraining from calling it catfish and promoting it as swai, basa, bocourti, tra, striped pangasius or simply pangasius.

According to John Dillard, a former president of the Catfish Farmers of Mississippi, "The mislabeling [of Vietnamese catfish] has severely impacted the farm-raised catfish industry. Vietnamese fish have taken about 20 to 25 percent of our market."

The Catfish Institute in Jackson, Miss., contends moving catfish oversight to USDA is a food-safety concern, not a protectionist measure. "We are farmers and not fishermen," says Roger Barlow, president of the institute, the U.S. catfish industry's marketing and public relations arm. "The charges of protectionism [by the importers] are unfair. This issue is all about food safety, protecting the American consumer and improving sanitation and quality."

TCI contends that catfish and catfish-like species should now all be treated equal. The institute claims that imports of catfish and catfish-like species "…have a much easier time of getting into our country."

Barlow charges that the FDA only inspects 2 percent of the 5.2 billion pounds of seafood imports, suggesting that consumer safety is being compromised despite programs like HACCP (hazard analysis critical control points). "There have been lots of rejections of pangasius and Chinese catfish," says Barlow, although he could not cite any specific numbers.

In October the Catfish Farmers of America launched a major advertising campaign in the Washington Post and on Web sites such as Politico.com urging Congress to have the USDA reclassify the fish.

Joey Lowery, president of the Catfish Farmers of America, says that importers "…just don't have a good record. This is a food-safety issue - the last 14 shipments from Vietnam have been turned down," he says, but he could not say why. Lowery insists that if imported catfish are going to be substituted for U.S. catfish, the standards must be the same.

"I just don't think that the FDA has done a good job in regulating imports. The USDA would be a more natural fit [for the catfish industry]. All I want is a level playing field," adds Lowery.

Fighting back

Jim Bugbee, managing director of QVD in Bellevue, Wash., says that if domestic catfish farmers get their way, USDA oversight of catfish could ultimately have serious consequences for all aquaculture products. QVD sells swai to some of the nation's largest retailers.

"Eighty-five percent of all our seafood is imported and of that about 50 percent comes from aquaculture," says Bugbee. "If these imports were banned [under USDA oversight] our seafood supermarket shelves would be empty. Tilapia, mussels, salmon from Canada, shrimp, you name it; they all could be affected."

Not only could supplies be affected, forcing USDA inspections overseas could set off a trade war with Vietnam.

"A trade war would have serious consequences for U.S. soy bean farmers and the U.S. beef industry," says Bugbee. The impact would be huge, he adds, affecting large U.S. companies like Cargill that manufacture fish feed in Vietnam. "This is simply about the U.S. catfish industry stopping the import of a whitefish from a country that they don't like."

In a May letter to Sen. Tom Harkin (D-Iowa), Vietnamese Ambassador Le Cong Phung urged the senator to stand by the 2002 ruling.

"For the United States to now reverse itself to prevent Vietnamese product from entering the market appears to developing nations hypocritical and counter to the new direction we all seek from the United States. It also runs counter to the recent commitment by the G-20 to refrain from raising new barriers to trade in goods and services for restored global growth," he wrote.

Jim Wallace of C&S Wholesale Grocers in Keene, N.H., a major retail distributor, weighs in on the ramifications for the retail sector. "If pangasius could no longer be imported it would be a great disservice to the consumer. The fish has found a niche in the market. Call it what you will - basa, swai, tra - right now, in these tough economic times, it's a value priced about $1 below fresh domestic catfish."

Matthew Fass, president of Maritime Products International (MPI) in Newport News, Va., disagrees with reclassification of the fish and the proposed move from FDA to USDA. As a major importer of pangasius and Chinese catfish, MPI never considered calling pangasius catfish and markets the product as swai or striped pangasius.

Fass says the U.S. domestic catfish industry has been protectionist in its turnaround after getting what it wanted in 2002. Imports are safe and the domestic catfish industry lacks any evidence to prove otherwise, he says. Fass also notes that the domestic catfish industry has been short on supply and in some instances has actually been using imported fish.

"Some of the domestic guys have even been using Chinese fish and are my customers," says Fass.

Another reason the U.S. catfish industry is pressing for USDA oversight is that it might be in a better position to receive federal marketing funds and other government aid that the FDA hasn't been able to provide, he adds.

Just the beginning?

U.S. fish farmer Australis Aquaculture raises barramundi in Turner, Mass., and also imports swai for retail distribution. Josh Goldman, Australis founder and managing director, says that less inexpensive fish on the market could presumably help him as a producer of barramundi, but he does not want to see any 
trade barriers.

And yet trade barriers for catfish and other farmed fish are exactly what could happen in the near future, contend National Fisheries Institute officials.

NFI also feels that the catfish brouhaha is a trade issue and not a food-safety issue, says spokesperson Gavin Gibbons, who adds that the domestic catfish industry has no data to back up its food-safety claims. He says that the USDA and the FDA have very different regulatory structures, adding that the FDA's HACCP program has worked well for the seafood industry in contrast to USDA's equivalency based programs. 
Gibbons notes that the USDA is "new to dealing with fish."

And catfish may only be the starting point, he adds.

"If the USDA and the domestic catfish industry succeed in getting control of farm-raised catfish species like pangasius, we have absolutely no doubt species like tilapia, and tilapia specifically, will be targeted with these kinds of [protectionist] efforts," says Gibbons. "If pangasius ends up being regulated by USDA the question isn't will tilapia be targeted by a similar effort, the question is when will tilapia be targeted by a similar effort? The ramifications for other farmed fish are very real and should not be ignored."

NFI President John Connelly agrees with the Catfish Farmers of America's claim that "all catfish should be treated equally," but that is where it ends. He says that the FDA has done a great job regulating seafood imports and opposes moving regulation to the USDA under the guise of food safety. While not coming right out and calling the tactics protectionist, he pointed to the fact that the catfish industry's Washington lobbyist was a trade lobbyist and not a food-safety lobbyist.

"What does that tell you?" 
asks Connelly.

John Snyder is a writer and 
photographer in Fryeburg, Maine

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