(The Center Square) – Fishermen and shrimpers in the United States have been in a decades-long battle with the very institutions meant to protect them, specifically the U.S. Treasury Department and its World Bank delegation.
U.S. trade law bars the support of competing industries in which there is excess supply.
Despite such laws, U.S. taxpayers spent two decades funding “aquaculture” projects in Vietnam, India, Ecuador and Indonesia, countries that now supply the overwhelming majority of shrimp to U.S. consumers.
“There’s a law on the books that requires the United States, their directors that are at these international financial institutions, to use their voice and vote to oppose any project that where there’s a commodity that’s produced in surplus and where export to the United States would seriously injure a domestic industry,” Nathan Rickard, a trade lawyer who represents the Southern Shrimp Alliance, told The Center Square. “They just haven’t done it.”
Foreign industry is one thing, but having to compete with the World Bank and the United Nations is another. And shrimpers’ own tax dollars being used to facilitate their own annihilation adds insult to injury.
Since U.S shrimpers began making noise about the Treasury Department’s activity, the World Bank delegation has been voting against such proposed projects, but the damage is done.
According to the Southern Shrimp Alliance, there have been 70 foreign projects identified as shrimp and aquaculture related, 89% of which have secured a vote of support from the Treasury Department’s World Bank delegation.
According to the 2023 annual report from the United Nations Development Programme, the U.S. is the 8th largest source of funds for all UNDP projects at $215 million. The report also shows that the U.S. is the second largest contributor to “regular resources,” which are resources “without restriction.”
Many of the shrimp farms receiving aid are worth hundreds of millions of dollars, such as Promarisco, an Ecuadorian seafood conglomerate, who was granted $60 million. Most grants are awarded directly to the government, rather than private companies.
“For loans and grants financial assistance in Ecuador, the funds went directly to private shrimp exporters for the expansion of their agriculture and for their export capacity,” Rickard said.
Since 2005, India has received $371 million, with one grant amounting to $200 million. India is the leading shrimp importer for the U.S. by a wide margin.
According to Rickard, the idea is that the assistance of international financial institutions is meant for developing countries, meaning U.S. shrimpers are out of luck.
“The thinking is that you can get financing in the United States without having to rely on development assistance,” Ricard said.
In 2022, the U.S. Department of Agriculture announced $50 million in grants to “support seafood processors, processing facilities and processing vessels through the Seafood Processors Pandemic Response and Safety Block Grant Program.”
Grants totaling $50 million divided amongst the whole seafood industry might be a useful crutch, but not enough to compete against individual projects receiving $60 million.
Further, the projects receiving these massive grants are not shrimpers, but shrimp farms. Farms, unlike shrimpers and shrimp boats, have an endless supply not contingent on the season or the market conditions.
When a product is in massive supply, basic economic principles dictate that prices tend to drop as supply outpaces demand.
This can make it difficult for producers to cover costs, leading to business closures or industry consolidation. In the case of shrimp, large-scale foreign farms — backed by development funding — can flood the U.S. market with cheap shrimp, undercutting domestic shrimpers who face higher operating costs.
“So, even if the market conditions say, ‘Hey, you’re going to lose money if you harvest,’ they still have to harvest,” Dave Williams, founder of SeaD Consulting, told The Center Square.
Williams added that even tariffs don’t always evoke a meaningful result.
Duties, or tariffs, are typically imposed to level the playing field by making imported goods more expensive, but in this case, they may not be enough to counteract the fundamental problem: Oversupply from foreign shrimp farms.
This relentless supply can keep prices depressed, limiting the effectiveness of tariffs. Even with tariffs in place, U.S. shrimpers still face an uphill battle against an industry that isn’t constrained by seasonal harvests or natural stock limitations.
So, Williams argues that the sector’s struggles could be remedied by focusing on demand instead of supply constraints, pointing to widespread mislabeling of imported shrimp as domestic.
With imports making up 93% of the market, shifting just a small share toward authentic Gulf shrimp could significantly raise prices for local producers.
Reducing the mislabeling rate from 71% to 30% could generate an estimated $750 million annually for the industry, underscoring the push for stricter labeling enforcement to protect Gulf shrimp’s market share.
“Is it easier to deal with the 93% of imports or the 7% of domestic production?” Williams asked.
“It’s the artificial marketing of imported shrimp as Gulf shrimp is what is the major problem, and that’s what we’re dealing with,” Williams said.