Sunday, January 26, 2014

Catfish and it's future in Bangladesh

Catfish, mostly farming in Bangladesh.
Most Mississippians can tell you in detail how often farm-raised catfish end up on their dinner tables or the value of catfish farming to their state’s economy. But you’ll likely draw a blank stare if you ask them what Bangladesh has to do with Mississippi catfish farming.

The real answer is that the tiny country on the Indian Subcontinent has plenty to do with it. In a logical world, Mississippi catfish growers say, whatever is going on in Bangladesh would have nothing to do with catfish farming in Mississippi. After all, the insect-fed African catfish Bangladesh’s peasant farmers grow in mud holes around their homesteads are hardly the same as the grain fed channel catfish grown in thousands of acres of man-made, highly regulated aqua ponds across the Delta.

Different they may be, but the U.S. government sees them as quite comparable when determining whether cheap imported catfish is undercutting struggling catfish farmers in Mississippi, Arkansas, Alabama and Louisiana.

Mid South catfish producers do not actually compete with Bangladesh’s catfish growers. They do, however, compete with Vietnam’s producers.

Vietnam being a communist, or “nonmarket,” country whose catfish industry is heavily subsidized by the central government, the U.S. government can’t put a monetary value on how subsidies from Hanoi influence the cost of a pound of Vietnamese catfish fillets sold in the United States. Consequently, a “surrogate” country is needed on which to base a fair market value. The fair market value is key because an exporter found to be pricing a product below that value could be deemed guilty of dumping and thus subject to extra import duties. Settling on a fair market value is where Bangladesh comes in, and the frustration of Mississippi’s producers begins.

Bangladesh catfish, the African variety known as Clarias gariepinus, sell for around 42 cents to 43 cents a pound, a price that does not reflect any subsidies from the Bangladesh government . Vietnamese catfish fillets, or pangasius, go for around $1.50 a pound in U.S. markets, while catfish made in America wholesale at around $3.90 to $4 a pound.

Accordingly, in deciding whether the Vietnamese are dumping their government-subsidized catfish, the U.S. Commerce Department looks at the price Bangladesh exporters are getting. Selling for $1.50 a pound isn’t dumping – not when Commerce designates 42 cents to 43 cents as a fair market rate based on the wholesale price for Bangladesh’s African catfish product.