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.
Comparing Catfish to Catfish
In Bangladesh, catfish growers cultivate their fish in pits a couple feet wide and about six foot deep, with about 50 frye to a pit. Growers feed them snails, bivalves, termites, ants and slaughter waste and the like, according to the Food and Agriculture Organization of the United Nations.
In Mississippi and across the catfish farming regions of Alabama, Arkansas and Louisiana, growers cultivate their fish over acres of aquaculture ponds and feed them commercially prepared feeds, including grains whose rising prices have strained the bottom lines of growers across the region and forced wholesale prices upward.
Growers in the Magnolia State say they see vastly more differences than similarities in the way catfish are cultivated in Bangladesh and Mississippi. “They pick a surrogate country they know is not going to do us any good,” said Bill Battle, owner of Tunica’s Pride of the Pond catfish farm and processing plant.
“I can’t figure out why the Vietnamese have more clout than we do.”
If aquaculture farmers in the U.S. catfish growing region had sufficient clout, they would convince the Commerce Department designate Indonesia or the Philippines as the surrogate country. Both of these countries have catfish farming industries and production costs much more similar to Vietnam than Vietnam’s to Bangladesh, said Val Slater, a Washington, D.C., trade attorney who has argued antidumping cases for the U.S. aquaculture industry for many years.
Indonesia gets from 78 cents to 80 cents a pound for frozen pangasius fillets, while the Philippines gets around 83 cents for the same product, according to Slater.
The result of designating Bangladesh as the surrogate for Vietnam year after year, Slater said, is “that they are calculating a fair market value so low that the law is not working.”
Slater said the U.S. industry gives the Commerce Department “lots of great data” each year from Indonesia and the Philippines pertaining to cultivation of pangasius, the same catfish species the Vietnamese cultivate.
“Every year they are getting back to Bangladesh,” she said.
New Surrogate Decision Due
Commerce is scheduled to decide March 14 whether to continue designating Bangladesh as Vietnam’s surrogate or select another country.
Slater said she can always hope for a different outcome, but conceded: “Every year we hit this battle hard and the Commerce Department comes back to where they are in favor of Vietnam.”
For the last two years, a preliminary decision favored dropping Bangladesh as the surrogate only to be reversed in the final ruling.
The U.S. catfish industry prevailed in a 2003 anti-dumping complaint against Vietnam and China. Each year since, however, the Asian nations have persuaded Commerce to do a review. The domestic growers are stymied annually by Bangladesh’s designation as the surrogate country for the two communist nations.
Senators in the Frey
Like Slater, U.S. Sen. Thad Cochran of Mississippi has been trying to get Commerce to change its mind for years. “We’ve had hearings and brought all this out” about the Asian subsidies undercutting U.S. catfish farmers, Cochran said in a recent phone interview.
Restraints should be imposed, but “we can’t force them (U.S. trade officials) to obey the law,” Cochran said.
“The Executive Branch has to hold those [agencies] responsible,” he insisted.
In a joint letter to be used as part of the administrative review leading to the Commerce Department’s March 14 surrogate country decision, Cochran and fellow senators from Arkansas, Alabama and Louisiana said the department’s previous reviews have led to a “tremendous surge in the volume of low-priced imports.”
Since 2008, Vietnamese imports have tripled and now control 75 percent of the U.S. market. That compares to 80 percent market share held by U.S. producers when they won their antidumping case in 2003, the senators noted.
Cochran and company made particular note of the Commerce Department’s continued selection of Bangladesh as the surrogate for Vietnam. “We are very concerned with the department’s surrogate country and surrogate value choices, which appear to have been made in recent years so as to favor imports to the extreme detriment of our industry.”
Vietnam says catfish provide a living for three million farmers in its country and makes it clear it won’t shy away from a fight. In the past, it has enlisted the help of such powerful senators as former GOP presidential candidate John McCain to ward off trade sanctions.
In August, a catfish import inspection program so angered Vietnam’s ambassador to the United States that he warned of a free trade battle that could cause curtailment of U.S. farm exports to the Southeast Asian nation.