20th Century Salt Fish Marketing Organizations
Throughout the late 19th and early 20th centuries, the Newfoundland salt fish industry faced marketing problems. Exporters competed against each other and rushed to get their fish to market first, since fish shipped early in the season fetched higher prices. Eventually, recognizing that they were competing against each other as well as foreign fisheries, some Newfoundland exporters began to form voluntary marketing groups.
Commodities broker George Hawes established a salt fish brokerage in Spain in 1909, and between 1909 and 1911 many Newfoundland exporters retained Hawes to represent them in the Spanish markets. By the 1920s Hawes and Company operated similar brokerages for Newfoundland exporters in Italy, Greece, and Portugal. There were also attempts to cooperate in the Brazilian and Barbadian markets. However, less than half of exporters took part in these organizations, and as a result they were largely ineffective. They were, however, the first attempts at organized marketing that would develop into much more powerful marketing groups throughout the 20th century.
The Newfoundland Fisheries Board and Exporters' Groups
The Commission of Government (as well as the Amulree Report) recognized the need to consolidate marketing efforts, prevent competition between local producers and improve fish quality, and in 1936 created the Newfoundland Fisheries Board. The Board was mandated to oversee the landing, processing, and storage of fish, and was responsible for appointing overseas sales brokers. The Fisheries Board consolidated the marketing of Newfoundland fish and actively sought out new markets, sending a representative to Cuba to research export opportunities in 1937, for example.
Importantly, the Board granted exclusive export licenses to specific groups for specific markets. The Portugal Exporters Group Ltd. was the first of these, established in 1936. Group membership was required for a merchant to export salt fish to Portugal, which allowed the Board to avoid market gluts, take advantage of price increases, and implement an inspection system. Similar exclusive marketing groups were formed for Puerto Rico, Jamaica, Spain, and Brazil.
The role of these groups expanded during the Second World War, when food shortages and increased demand led the Allies to establish the Combined Food Board (CFB) in 1943. The CFB controlled the distribution of food, including Newfoundland salt fish, among Allied nations and friendly neutrals. For convenience, it gave wider market control to the exporters' groups that were already established. The Portugal and Spain exporters' groups, for example, were given control over all European markets by the CFB, further validating the exporters' group model. After the war, the CFB's Fisheries Post-War Planning Committee recognized the value of organized group marketing. Although it failed to anticipate the degree to which frozen fish would supplant salt fish and undermine group marketing efforts, its recommendations led to the creation of a wider exporting authority in 1947.
NAFEL and Confederation
That authority was the Newfoundland Associated Fish Exporters Limited (NAFEL), established by the Newfoundland Fisheries Board primarily on the advice of the Post-War Planning Committee. NAFEL was intended to bring all Newfoundland's salt fish markets under the control of a single marketing organization, and was granted an exclusive export license for salt fish. All exporters had to be NAFEL members, which required a $10,000 membership fee. Each month, exporters reported stocks on hand and NAFEL allocated shipments among its members accordingly. This assured stable prices and markets, and prevented direct competition between merchants.
In 1949 fisheries came under the control of the federal government. By 1954, the Newfoundland Fisheries Board had been absorbed by the federal Department of Fisheries. NAFEL survived, but experienced severe problems in the 1950s, mainly because of price fluctuations and the growing dominance of frozen fish. NAFEL's exclusive right to market Newfoundland salt fish ended in 1959, though it continued to operate as a voluntary organization until 1970, when the creation of the Canadian Saltfish Corporation rendered it redundant.
The Canadian Saltfish Corporation
The Canadian Saltfish Corporation (CSC) was established in 1970 by the Canadian government to deal with major problems in the salt fish industry. The British pound sterling had been devalued several times since the end of the war, most recently in 1967. Newfoundland fish, often priced in sterling, was therefore less profitable when the exchange rates were taken into account. The federal government was forced to buy up unsold salt fish stocks and set up a deficiency payment program for fishermen in the wake of the 1967 devaluation. Post war food shortages had been overcome, and the market preference for frozen fish was becoming overwhelming. All of these factors created a crisis in the salt fish industry which NAFEL, largely ineffective by this time anyway, was unable to overcome.
This spurred the federal government to take a more active role in the salt fish industry. The CSC was to be a self-sufficient marketing and regulatory organization whose ultimate goal was to increase and stabilize the incomes of fishermen involved in the salt fish industry. The CSC was given the exclusive right to purchase, process, package, and market salt fish in participating provinces, of which Newfoundland was one. The CSC initially had some success in re-establishing export markets for Newfoundland salt fish. For example, Portugal, which had been wholly lost as an export market, was regained in the early 1970s.
In 1980 more than 50 percent of salt fish was being sold in European markets, largely due to the efforts of the CSC in improving quality and accessing overseas markets. However, in 1991 an economic report on the CSC found that it was no longer viable or able to accomplish its mandate, and the findings of a federal/provincial consultation group largely supported this position. Improvements in refrigeration technology and transportation made it possible to send most cod to market as frozen or fresh fish, and in 1990 the salt fish industry accounted for under nine percent of the codfish landed in Newfoundland.
By the time of the cod moratorium in 1992, most fish plants were processing groundfish into fresh or frozen fillets and other products, in addition to species such as capelin, herring and mackerel and smaller amounts of shellfish. Cod continued to make up a large portion of seafood catches, ranging from approximately 240,000 to 295,000 metric tons from 1983 to 1990, which accounted for approximately three-quarters of all groundfish catches and from 50 to about 65 percent of total seafood catches. Very little of this was salted, however, and the CSC was shut down in 1994, by which time the moratorium had made it superfluous anyway.
The Newfoundland salt fish industry continually suffered from declining quality and loss of markets in the 20th century. Subsequent attempts to maintain or recover these markets through organized marketing boards did have some success, but in the end they were only successful in slowing the decline and could do little to reverse it. The Newfoundland Fisheries Board and NAFEL especially experienced some success in improving quality and regaining overseas markets in the 1940s.
However, Confederation firmly tied the salt fish exporting industry to the Canadian economic sphere, which in the 1950s and 1960s was increasingly turning away from Europe and focusing on building economic ties in the western hemisphere, primarily with the United States. This Canadian reorientation of economic outlook towards U.S. markets came at the expense of overseas markets, and as a result there was a lack of initiative on the part of the Canadian government towards developing overseas salt fish markets and a lack of support for organized marketing efforts. While Confederation may have harmed organized marketing attempts, it is impossible to deny that market preferences were irrevocably and overwhelmingly shifting towards fresh and frozen fish at this time, and that the salt fish industry was in a decline that could only be slowed, not stopped. The decline in salt fish production and exports reflected both the changing tastes of the marketplace, and the ecological crisis which would lead to the virtual cessation of the codfishery in 1992.