Fishing: the drive to be 'cod king' of the world

This tiny enclave, couched on a rocky finger off the east coast of Newfoundland, has worn the same face for generations. Brightly colored clapboard houses cling to the pitches and inclines of a fjordlike peninsula overlooking the chilly waters of Conception Bay.

For much of the year, weather-hardened fishermen work the craggy coves up and down the coast, pitching their long lines and seine nets for cod and other species.

But this year fewer fish have been flopping in the holds of some boats, and a near-breadline gloom has swept through many of the tiny fishing villages dotting the province, one of the world's major fish suppliers.

''It's not so rosy,'' says Bill Morgan, the skipper of a crab boat and a third generation Port-de-Grave fisherman. ''Nobody can help it. There's no fish and only bad markets.''

A clam-tight US market and drastic drop in the catch of the all-important northern cod has thrown Newfoundland's fishing industry into its worst slump in years.

The crunch has aggravated a high unemployment rate and poses challenges to a government trying to buttress the economic status of the ''pauper province.''

Fishing remains the setscrew of the economy. It was what first drew settlers to the area shortly after 1497, the year explorer John Cabot proclaimed the fish were so bountiful ''they could be caught by merely dropping a basket from the side of a ship.'' Today as many as one-half the province's 580,000 residents depend in one way or another on fishing.

More than 8,000 small boats ply the inshore areas of the inlet-etched province, while some 85 deep-sea trawlers fish the Grand Banks and other offshore areas. The $400 million-plus industry accounts for about 12 percent of Newfoundland's gross domestic product. When it comes to cod, Newfoundland's granite-carpeted shores are cloaked in some of the most productive waters in the world.

But this year fishermen have been buffeted from many sides. Particularly hard hit have been the 15,000 or so inshore fishermen, who cast their nets for fish during warm summer months when they move inshore to feed.

This year the cod just didn't show up. Scientists theorize a freakish cold water barrier enveloping much of the island prevented the fish from coming in. Below certain temperatures, cod don't huddle in large numbers.

For the province's fish processors, trouble has come in the form of fewer fillets being eaten in the United States. Close to 70 percent of all Newfoundland's seafood exports go to the US. Any pinch in the line can severely choke Newfoundland's entire industry. Over the past year high interest rates have prompted US fish processors to reduce inventories and order less from Canada.

Perhaps more worrisome to Newfoundlanders in the long run is that Americans are losing their taste for frozen fish. Instead, they are are eating fresh seafood mostly supplied by US fishermen. ''Everything went against us this year, '' says William Wells, president of the Fisheries Association of Newfoundland and Labrador Ltd. ''The industry couldn't take a third bad year.''

All this has reminded the province of the perils of being too dependent on one market. In recent years, officials have been trying to find new customers. One idea is to ship more fresh fish to the US.

Another option: send more products to Western Europe, which now takes about 13 percent of the province's seafood exports. But provincial officials complain about the high tariffs they face on products entering Europe. Efforts are under way to bat down the high duties.

A proposed treaty between Ottawa and the European Community would give EC countries extra fish allocations in Newfoundland waters - mainly cod and squid - in exchange for lower tariffs on Canadian fish entering Europe. But the treaty has spawned hard feelings on both sides of the Atlantic. Newfoundlanders in particular are mad. To them, granting foreign fishermen access to northern cod stocks is like Texas cattlemen opening their herds to rustlers.

''Ottawa wants to trade fish for markets. That's wrong,'' says James Morgan, Newfoundland fisheries minister.

With stocks of cod rebuilding as a result of the 200-mile limit, Newfoundland wants to make sure its fishermen are the ones casting nets. Yet federal and provincial fishery officials face tough tasks ahead in balancing the number of fishermen and processors to handle the expanding stocks.

What's more, many small inshore fishermen are in need of new equipment, and many of the nation's processors and boat operators still work only part of the year. In the longer run there is another element of uncertainty: offshore oil. A big spill could damage the rich Grand Banks fishing area. Many worry, too, about the oil industry siphoning off skilled workers from other trades, including fishing.

''You don't have to lose too many skilled people to have it hurt in a country where a shortage already exists,'' says Denis W. Monroe, chairman and chief executive officer of Fishery Products Ltd.