Shrimp boat | Image credit: William A. Morgan/Shutterstock
Rep. Troy Nehls believes American funds are being used to endanger America’s shrimp fisheries, and he wants to stop this through the Protect Shrimp Fishers (SOS) Act.
“American companies are trying to compete with shrimp from Ecuador, which is just driving down prices,” said Sen. Neals (R-Texas).
He said he has heard from fishermen in his district and across the Gulf of Mexico that they have stopped shipping shrimp crawlers because foreign competition has driven prices down too much and inflation has driven up costs to the point where they can no longer make a profit.
“American shrimpers are being squeezed to the point where they’re losing their businesses, and many of these businesses are second, third and fourth generation,” he added.
The issue has been widely covered in fishing media, and has now become so big that many believe it poses an existential threat to the industry: Five Texas counties have issued disaster declarations over the threat facing their local shrimp farming industry, according to the Texas Observer.
“If you don’t do something to help us, we’re finished,” Nels recalls being told.
He also pointed to India as the country that produces much of the product that has caused shrimp prices to plummet to just a few dollars a pound in recent years.
Nels said India and Ecuador can do this in part because of the huge financial support they receive from U.S.-backed institutions such as the International Monetary Fund and the World Bank, which he believes are using U.S. taxpayer money to develop shrimp farming projects overseas.
“All they’re doing is giving money to these countries and supporting their shrimp companies and destroying our industry. It makes no sense,” he said.
This, he argues, gives foreign competitors a market advantage as well as an opportunity to circumvent health, safety and labor standards.
With Congress returning from its summer recess, Nehls said he hopes to pass the Shrimp Farmers Relief Act in 2024. According to a description of the bill on the Congressional website, the bill aims to “prohibit federal funds from being provided to international financial institutions for loans to foreign shrimp farmers and for other purposes.”
The authors believe this could be achieved by requiring investigations and annual reports by the U.S. Government Accountability Office to determine whether directors of U.S.-backed international financial institutions are fulfilling their responsibilities in opposing financing of foreign shrimp farming, processing, and export industries.
The bill also requires the Treasury Department to comply with other federal laws, such as 22 U.S.C. Section 262h, which would prohibit international financial institutions from providing “assistance to the production or extraction of any export commodity or mineral in surplus in the world market.”
Nels’ concerns are shared by the Southern Shrimp Fisheries Association (SSA).
“Free market principles keep U.S. shrimp boats out of port. Diverting taxpayer dollars to fund competitors through multilateral banks sinks our industry,” SSA Executive Director John Williams said in information the organization emailed to the Dallas Express.
When it comes to Ecuador, the SSA added some grim figures.
“Multilateral development banks have funded at least eight significant projects to increase shrimp production in Ecuador since 2012,” the report states. “These projects ultimately led to a surge in Ecuadorian shrimp imports to the United States, which increased by more than 50% (an additional 90 million pounds) between 2019 and 2020, and a further substantial 47% (an additional 125 million pounds) between 2020 and 2021.”
“As the U.S. shrimp market reaches a saturation point in 2022, Ecuadorian shrimp imports will continue to grow in 2023 despite lower prices for imports,” it added.
An accompanying chart shows how the SSA says loans have distorted shrimp fishing markets.
Nehls said the bill has bipartisan support from Republicans and Democrats in the Gulf states. The bill is currently awaiting consideration in the Financial Services Committee.
Neal’s full conversation with the Dallas Express, including why he wants Donald Trump to be elected president in November, can be heard on the Cowtown Caller podcast.