State oversight of the lucrative shellfish industry has fallen short of federal standards because of budget cuts, a public advocacy group said.

Public Employees for Environmental Responsibility, or PEER, a nonprofit group based in Washington, D.C., last week said cutbacks in inspections and patrols of closed fishing grounds put the public health at risk.

Shellfish is highly perishable and is subject to contamination from the time it is harvested to the time it ends up on the dinner plate next to a lemon wedge and a side of Spanish rice.

The group faulted the state Department of Environmental Protection, which monitors water quality and the harvest of shellfish, and the state Department of Health and Senior Services, which inspects shellfish dealers who export New Jersey's clams, oysters and mussels.

The U.S. Food and Drug Administration oversees New Jersey's shellfish programs to ensure they are protecting the public from health risks associated with eating tainted seafood.

The federal agency's 2009 evaluation faulted New Jersey for several shortcomings:

n The state had lax enforcement in 21 of 30 closed shellfish areas that are supposed to be patrolled by fishing regulators to keep poachers out.

n The state conducted inspections of processing plants and shellfish wholesalers infrequently.

n The state has taken 30 percent fewer water samples to classify shellfish grounds since 2008, when one of the state field employees retired.

The FDA report warned that fewer patrols of closed waters could harm public health.

DEP officials in September said $850,000 in cuts to the shellfish program would limit the agency's policing of closed shellfish beds, a target of poachers who harvest clams and oysters illegally for illicit sale.

In response to the FDA's evaluation, DEP Commissioner Bob Martin last month banned all research-related gardening of shellfish in closed areas. This put an end to marsh projects that used oysters for fear that people would illegally harvest them from waters the state could not afford to police.

On Thursday, the DEP issued a violation notice to the nonprofit group NY-NJ Baykeeper for not removing its shellfish project from Keyport Harbor in Monmouth County, where the group is doing ecological restoration.

"We have a high regard for research work done on shellfish by the Baykeeper," Martin said in a statement. "But there is a lot more at stake here. We cannot jeopardize an entire nationally recognized industry, with its many hundreds of jobs and great economic value to this state."

The FDA can prevent New Jersey wholesalers from selling Jersey Fresh shellfish out of state because of the state's continuing noncompliance. While that scenario is unlikely, the possibility is alarming, said Bill Wolfe, spokesman for PEER.

"The industry itself should be complaining loudest. The failure of the state to do this is not just undermining federal shellfish markets, it also affects the confidence of the consumer in the product. That's why it's shortsighted not to have the resources to do this," he said.

Wolfe said the state made similar cutbacks to marine enforcement in 1995 and 2003 before his group's protests persuaded lawmakers to restore funding for inspections and patrols.

"We're not talking about millions of dollars. We're talking about a couple hundred thousand dollars for a billion-dollar industry," Wolfe said. "They're making a big deal out of the flea on the tail of the dog."

Scot Mackey, spokesman for the Garden State Seafood Association, said the state is taking appropriate action by closing waters it cannot afford to patrol.

"We agree with the cautionary approach the state is taking," he said.

But Mackey said seafood, and shellfish in particular, is so carefully monitored that poachers would have trouble finding a market to sell illegal products in New Jersey.

"We don't believe anyone would be able to harvest shellfish from a closed area and sell it commercially anywhere in the state," he said.

New Jersey fishermen in 2008 landed nearly 100 million pounds of shellfish valued at $148 million on the wholesale market. But they are worth five times as much to seafood retailers and restaurants such as the Town & Country Cafe in Egg Harbor Township.

Owner Steve Thomas said it is important for local chefs to trust their ingredients, especially shellfish, as he stopped by Randall's Seafood in Pleasantville to pick up a bag of oysters.

"It can ruin you," he said. "It's rarely the purveyors who are to blame. The problems happen when restaurants don't prepare it properly."

DEP spokesman Larry Hajna said the agency is adding enforcement officers to patrol shellfish beds to comply with FDA rules.

"But we don't have nearly enough patrols to handle the shellfishing in contaminated waters," he said. That's why the commissioner moved to ban research projects using shellfish in closed areas, Hajna said.

"Our concern is with poaching of shellfish. We cannot allow for health incidents to occur and compromise an industry valued at $700 million," he said. "The idea is through closures and working with additional limited resources, we can comply with the FDA regulations."

The DEP said its enforcement officers arrest about 60 people every year for taking oysters in closed areas.

The state Health Department indicated in the FDA report that it, too, would hire additional staffing for inspections to meet federal rules in 2010.

"We've expanded our inspection staff," spokeswoman Marilyn Riley said Thursday. "We will be out in full force this summer inspecting shellfish harvesting and processing operations. The department expects to meet all FDA's inspection requirements this season."

Walt Canzonier, a shellfish scientist, said New Jersey's enforcement has consistently been understaffed, as have similar programs in other states. He said banning oyster research projects in closed waters does not address the larger problem of oversight.

"This just hides the fact that we don't have enough surveillance," he said.

Canzonier is president of the New Jersey Aquaculture Society and has conducted research at the Haskins Shellfish Research Lab on the Delaware Bay in Commercial Township, Cumberland County.

As strange as it sounds, Canzonier said, the fishing industry should be calling for greater state oversight.

"The shellfish industry should be screaming about it. The problem is without an appropriate program, we risk shutting down production in the entire state of New Jersey," he said. "I don't agree with industry people who try to ignore this."

He said shellfish poaching is a legitimate concern. Some fishermen illicitly harvest clams or oysters from closed waters and sell them to dealers or restaurants for a cheaper price. In some cases, fishermen steal oysters that were planted months earlier by fellow fishermen. The problem was so pervasive that the state once policed these oyster beds.

"There are some people out there - some pirates - who like to steal cultured shellfish and sell them as their own. The surveillance to inhibit that activity is close to zero," he said.

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