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Asian carp problem offers opportunity for entrepreneurs

Thursday, January 21, 2010

ST. LOUIS -- The Asian carp many fear could destroy the Great Lakes' $7 billion-a-year fishing industry make up half of Mike Schafer's business, which in just over a year has turned 12 million pounds of the invasive fish into everything from fillets to fertilizer.

Schafer and entrepreneurs like him advocate aggressive fishing of Asian carp as a way to make money and save the Great Lakes, where environmentalists fear the voracious fish would starve native species by consuming their food. But several of them say such efforts can't get going without government help, and that's been in short supply as states face budget problems.

The question of how to fight the carp has become more urgent as the invasive species originally imported to cleanse ponds and sewage lagoons in the Deep South works its way north through waterways such as the Illinois River. The fish's DNA was recently found in Lake Michigan, although no Asian carp have been spotted there yet.

Schafer's family-owned business once dealt solely in Mississippi River catfish, but he expanded into carp about a decade ago and found it lucrative: In just the past year or so, he's upped his production by several million pounds.

Little goes to waste. About one-third of each carp is turned into fillets Schafer exports overseas. The rest get converted into fertilizer, much of it sent to California vegetable farms.

"We're up to using about a million pounds a month of Asian carp, and I think we're just getting started," Schafer said.

Aggressive fishing and processing does seem to reduce the carp population, he said: "In the areas we've taken those large quantities out, we're seeing a depletion of the species there."

Others are angling to get in, although they say government subsidies are likely needed to make it viable.

John Holden, a Rockford, Ill.-based reproductive endocrinologist and his business partner tested running a fish processing plant last year in Havana, Ill., that turned carp into a powdered protein supplement for animal feed and into Omega-3 oil. Now they'd like to build eight plants along the Illinois and Upper Mississippi rivers. Each one could process up to 2 tons of carp per hour, Holden said.

With the abundance of carp in the rivers, "I'm guaranteed to get my money back and then some," Holden said. "I just want to get rid of the carp. They don't belong here."

But Holden said he needs $20 million to build the plants and perhaps another $750,000 for a fishing fleet equipped with nets and power hoists to handle the carp, which can weigh up to 100 pounds. He and his partner, Tim Leeds, an Iowa-based obstetrician, met with Illinois lawmakers on Monday, telling them they need taxpayer help -- perhaps grants -- to get going.

That seems unlikely given Illinois' budget problems. In August, Gov. Pat Quinn signed into law a measure allocating up to $3 million to the state Department of Natural Resources for a one-year pilot study to see if overfishing the Illinois for carp could meaningfully shrink their numbers. But that money still hasn't been disbursed.

Jim Sneed's business received a $100,000 grant from Illinois a few years ago to see what it could do with the tens of millions of pounds of carp it said it could pull from Illinois rivers every year. One of the things Sneed learned is that more marketing is needed to convince Americans that carp aren't just bony bottom-feeders unfit for eating.

"You don't just go into a restaurant and say, 'Should I have salmon or the bighead carp?' The fish has an image problem," Sneed said.

Sneed, of Hollywood, S.C., had planned to build a processing plant to turn the fish into an extract used to make flavored seafood products common in Asia and elsewhere overseas. He believed he could get a $3 million to $6 million return on his investments. But the plans stalled, partly because the recession made investors more cautious about putting their money in what they saw as a risky venture.

Sneed suggested the government could get such efforts going again by putting a bounty on the fish, essentially subsidizing the harvest.

"It's a money issue," he said. "That's what's stopped me."


On the Net:

Schafer Fisheries, http://www.schaferfish.com


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