The Problem

1. Catching and salting codfish is the main source of livelihood for over one third of the Newfoundland population. Annual production averages approximately 100 million pounds. Little can be done in a short time to reduce production, although plans for the eventual diversification of production are currently being worked out with the Provincial Government and the fishing industry.

2. In recent years, roughly one half of the Newfoundland production has been marketed in the Mediterranean countries. The balance shares the Western Hemisphere markets with the mainland production of approximately 40 million pounds. For the past several years, arrangements have been made with the U.K. for sales in Europe for sterling. This arrangement was continued for the 1949 production. Despite this fact, there remains in Newfoundland some 18 million pounds unsold from the 1949 production. Closure of the important Brazilian market in 1949 was an important factor in the development of the present carry over.

3. Faced with this carry over and no assurances respecting the marketing of the 1950 production, Newfoundland fishermen, merchants, finance agencies and the Provincial Government are greatly concerned over the prospect.

Considerations

It appears essential that some positive action be taken now to stabilize the situation in order to avoid serious unemployment and consequent relief payments and to provide time for the working out of a full solution to the 1950 marketing problem.

Alternative immediate solutions include:

(a) Action under the Fisheries Prices Support Act to guarantee prices to fishermen for 1950.

The Fisheries Prices Support Board would strongly recommend against the idea of an advance guarantee because of the effect that such action would have in impeding the normal marketing of the product and the impossibility of confining such action to the production of the province of Newfoundland.

(b) Action by the Government to arrange for sales in sterling to European markets for 1950.

Arrangements for sales in sterling may be possible and ultimately necessary, but such an arrangement appears impossible of completion in the immediate future.

(c) Action under the Fisheries Prices Support Act to purchase a portion of the carry over for disposal to the United Nations International Children's Emergency Fund.

The Fisheries Prices Support Board would recommend against a purchase by the Board of a portion of the carry over because:

(i) If the Board sought to buy at the lowest possible price in the interest of the United Nations International Children's Emergency Fund it would be accused of breaking rather than strengthening the market.

(ii) Since at least some of the fish to be purchased is already in the hands of merchants and exporters the Board would be establishing a precedent of giving aid to a secondary industry.

(iii) Purchase by UNICEF rather than the Board would have a beneficial rather than adverse effect on foreign buyers, regardless of the price paid.

(d) Action by the Government to make a grant to the United Nations International Children's Emergency Fund for the purchase and use of a portion of the carry over.

(i) Action along this line would be a strengthening factor in the market; it would give confidence to the Newfoundland interests without any implied guarantee for the future and would provide time for working out a more complete answer to the problem of marketing the 1950 production.

(ii) Invitations to offer to UNICEF could be sent to mainland as well as Newfoundland producers. While the mainland producers have no apparent carryover, there would be some political advantage in this procedure.

(iii) The United Nations International Children's Emergency Fund have indicated a strong desire to secure supplies of salted codfish for feeding in Italy and Greece where the product has been used previously with full satisfaction. The agency has no funds with which to make a commercial purchase.

Recommendation

It is recommended that an appropriation be provided through supplemental estimates to the Department of External Affairs amounting to $600,000, to provide for the purchase by the United Nations International Children's Emergency Fund of approximately 5 million pounds of salted codfish. Price to be determined by negotiation between UNICEF and the Newfoundland exporters.⁸⁴

R.W. MAYHEW

⁸⁴Approuvd par le Cabinet, le 31 mars 1950; détails h être arrêtés par les ministères des Pêcheries, des Affaires extérieures et des Finances.
Approved by Cabinet, March 31, 1950; details to be determined by the Departments of Fisheries, External Affairs, and Finance.