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Cheap Lobster: Great For Tourists, Bad for Business

Lobsters
Photo by: Keven Law
Lobsters

Maine lobster is a bargain this summer. Prices for the seafood delicacy are tumbling to under $2 a pound in some areas amid a supply glut. And tourists are eating it up.

But the good news is lost on the small businessowners in eastern Maine. The rock-bottom price is hurting community fishermen. Boat prices — or what lobstermen fetch for their catch — are so low fishermen can't cover expenses, including fuel, and are operating at a loss. The state's dependence on lobster and lack of fish diversity have created a cascade effect, reducing the types of jobs and small businesses in the region.

"The whole coast is in shock right now," says Robin Alden, a longtime fisheries management expert. "The prices vary all over the place but I have heard as low as $1.50," per pound.

Information — and misinformation — about lobster prices is rampant in east Maine, along with anger and frustration. Just check the Facebook pages of local groups like the Maine Lobstermen's Association. On Monday, Marine Resources Commissioner Patrick Keliher released a statement, hoping to defuse tensions.

"We have heard that fishermen are seeking to impose a de facto shutdown of the fishery and coercing others into complying by threatening to cut off their gear," said Keliher in the release. "Any such actions will be met with targeted and swift enforcement." Keliher added state officials are working on ways to combat low lobster prices.

Meantime, Alden, — a former Maine Commissioner of Marine Resources — along with community leaders, are seeking long-term economic solutions. They're crafting unique partnerships that create incentives for fishermen to catch a variety of seafood, not just lobster. They’re removing river dams to allow fish — including the endangered Atlantic salmon — to return to historic spawning grounds for the first time in generations. These efforts will boost fish diversity, give fishermen options and create a lift for local businesses.

It can’t just be about lobsters anymore. That focus — as this summer's collapse in lobster prices shows — is unsustainable. Says Alden, “I’m worried because if you’re fishing one part of the ecosystem, the one thing you know is — it’s going to change.”

Reviving Native Fish Populations

Removal of the Great Workers Dam, Penobscot River, Maine
Penobscot River Restoration Trust | Facebook
Removal of the Great Workers Dam, Penobscot River, Maine

Last month north of Bangor, workers in Old Town, Maine began demolishing the Penobscot River’s Great Works Dam. The dam removal is part of a larger project to improve fish access along the nearly 1,000 miles of historic fish habitat, and support nearly a dozen species of fish, including Atlantic salmon. The entire project, to be phased in over several years, will also help maintain existing hydropower production and create hundreds of jobs spanning fishing, energy production, water sports and recreation.

Supporters of the restored Penobscot River project include a varied group of small-business owners — salmon anglers, fishing guides and outdoor recreational companies. They're hopeful the restored river will support the regional economy, which includes fishing, paddling, canoeing and other kinds of outdoor tourism.

“People book campsites, hotel rooms. They’ve got to eat and buy food and gas,” says Scott Phillips of Northeast Outdoor Sports, a sales representative based in Old Town. “It does have a ripple effect.”

Phillips has been in the outdoor recreation business for more than 20 years and remembers when fishermen came for salmon. “We want to see the river come back to its natural state,” he says.“Right now the river isn’t being used to its potential.”

The dams have prevented fish from swimming upstream to native habitats, subsequently reducing biodiversity over the years. Removing dams will restore the free flow of fish. “The river will become healthier because more fish and nutrients float through,” says Karen Francoeur, owner of Castine Kayaks. “Nothing is able to go upstream. The only thing you’re going to catch is a sunfish."

Lessons in Diversification



Last U.S. Sardine Cannery Closes in Gouldsboro

If you need another lesson in fish diversity and its ripple effect on local economies, consider Gouldsboro, a coastal town in eastern Maine. In 2010, San Diego-based Bumble Bee Foods closed thelast U.S. sardine cannerythere.The U.S. government had been lowering the catch quota for years.With little fish inventory to process, Bumble Bee shuttered the plant, and about 130 jobs were moved to Canada.

Gouldsboro has struggled to recover since the cannery’s closing, a journey chronicled in the documentary “Downeast.” The film, which premiered at the Tribeca Film Festival, reveals a town caught flat-footed by the disappearance of canning jobs — and the fact that it had few other thriving industries to cushion the blow.

“We don’t need an empty tin building in the middle of town,” says Gouldsboro town selectman Dana Rice. “We’d like to create some jobs.”

Commercial lobster fishermen
Jeff Greenberg | Photolibrary | Getty Images
Commercial lobster fishermen

What Next After the Lobster Run?

Just as U.S. sardine canneries have disappeared, some ecologists and fishing experts are wondering what happens if and when the lobster run ends. During the past 20 years, the economic diversity of marine resources harvested in Maine has tumbled by nearly 70 percent,according to Robert S. Steneck, a marine biologist at the University of Maine.

Today, more than 80 percent of the value of Maine's fish and seafood landings comes from lobsters.In research published last year,Steneck suggested Maine's economy is a "gilded trap," where short-term gains are overshadowing long-term ecological and social risks.

The fear is if something like disease or other stress hurts Maine's lobster abundance, the state's fishing and broader economy could be devastated.

"Everyone is concerned about the fragility that this lack of diversity is causing," said Alden in a recent TED lecture. Forget lobsters for a moment. "Where are the groundfish [such as flounder and cod] that are so important to the ocean and the economy?"

Alden and her nonprofit group, the Penobscot East Resource Center, are creating a permit bank that allows fishermen to share the cost of groundfish permits. The ultimate goal is an ecosystem that promotes thriving businesses; and ensures high quality marine food — including lobster — at a fair price, for the long haul.

Says Alden, "We need to think through 21st-century fishing."

Email us at SmallBiz@cnbc.com and follow us on Twitter @SmallBizCNBC and @heesunwee.

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