TRI CITY, Ky. - A group of Western Kentucky farmers thought harvesting catfish might prove to be a lucrative alternative to raising tobacco.

        But now, competition has unexpectedly come from overseas - specifically, Vietnam - and the farmers are worried their idea could be short-lived.

        Two years ago, farmers in eight Western Kentucky counties formed the Purchase Area Aquaculture Cooperative with funding from $1.5 million in grants and subsidies, including $481,000 from Kentucky's share of the national tobacco settlement.

        The co-op not only raises fish, but also processes them at a plant in Graves County.

        Now, the 54 co-op members, the majority of the catfish growers in the state, and other American growers say cheaper fish from Vietnam is overwhelming the U.S. market.

        In May, President Bush took steps to protect American catfish growers by signing a bill that prevents the fish imported from Vietnam from being labeled as catfish. The Catfish Farmers of America also said last month that Vietnam began dumping fish into the United States below market price. A U.S. Department of Commerce hearing on the issue was held Friday, and a report is due Aug. 19.

        In Kentucky, farmers have gotten help from the General Assembly, which passed a law requiring state facilities to buy Kentucky catfish if it is available.

        Even after the recent legislative changes, Kentucky's catfish growers say they have a wait-and-see attitude about the industry's future.

        “We didn't have a clue it (the foreign competition) was coming,” said Dan Bonk, a grower who serves as the co-op's marketing agent. “We did not know (imports) would cause the market price to slide.”

        But it did, dropping 25 percent, from 80 cents a pound to 60 cents, a figure near the cost of production. The resulting market glut, combined with the recession, drove down prices that distributors and restaurants were willing to pay for the Kentucky-grown fish. Between 1998 and 2001, imports of the Vietnamese version — called basa — surged nearly 700 percent to take a 20 percent market share.

        “We knew we would have competition from the big guys down south,” said Joe Currin, Purchase Area Aquaculture Co-op's vice president, who raises 12 acres of catfish on his farm and 12 additional acres of fingerlings in nursery ponds on the co-op's grounds.

        “Never did we think it (the competition) would be from an import. Prices now are almost break-even, and that's not what you're in it for.”

        Mr. Currin said in an effort to stay afloat, the co-op temporarily has deferred payments to growers, and that has caused a ripple effect.

        “Growers are trying to hold on, but banks are wanting their money, too,” he said. “The situation for some growers is not good, but they are staying with it. Some have stopped buying new fish to raise because of the feed bills.”

        Prices have stopped declining, Mr. Bonk said, and he predicts an upswing, possibly with the price reaching 85 cents a pound or higher.

        “At that price, growers can make money,” he said. And Bill Green, Graves County extension agent, predicts the 281 acres of ponds run by the co-op's growers will increase to 450 by the end of 2003.

        More than half of the state's estimated 500 acres of catfish ponds belong to members of the Purchase Area co-op. They are also the only group in the state mass-producing the fish for market. The remainder of the state's acreage is hatcheries or pay lakes, according to the state Department of Agriculture.

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