Russian fishery head sends policy signals to domestic and foreign players. Full story.

August 13, 2008 12:57

In early August 2008 head of Russia's Federal Fisheries Agency Andrey Krainy participated in the circuit meeting of the resource committees of the Federation Council, where he has voiced the guidelines for the long term development of the nation's fishery industry, according to Kamchatskie Vesti.

Subsidies

Rising fuel costs is one of the most urgent issues for the fishermen as the Russian fleet is threatened to stay idle with the fishery to grow unprofitable.

The world history of fisheries has been facing the problem for the third time in the recent 40 years, Andrey Krainy said. With a steep rise of fuel prices the world catches would fall by 10 million metric tons in the past.

The Russian Government has already prepared an order on subsidies for the fishermen to get compensations for the rising fuel costs subject to those subsidies will be invested to renew the fleet. Andrey Krainy says that the above condition is also in the interests of the fishermen as the nation's current fleet is out-of-date and economically inefficient. More specifically, now the Russian fishermen spend more than 400 kilos of fuel per tonnes of harvested cod, which is twice as much as normally practiced in Norway. The high fuel expenses and growing fuel prices make the Russian fishermen's prices less competitive as compared to other countries.

Another measure on the Government's agenda is to subsidize two thirds of the rollover rates for the bank loans for the fleet refurbishment and renewal. In this case the fishermen will have to pay only 5% of the interest rates per year. Moreover, some Russian provinces have announced their eagerness to subsidize one third of the rollover rate. Thus, the fishermen will be exempted from paying the annual rates. (The above will not touch Kamchatka which lives on donations).

According to Andrey Krainy, the Federal Fisheries Agency has signed an agreement with Russia's Agricultural Bank Rosselkhozbank on its annual allocation of 50 billion RUB as bank loans for the fishery industry. A similar agreement is to be signed with the Development Bank (former Vnesheconombank).

Resumption of deepsea fisheries

In September 2007 Andrey Krainy spoke about establishing a state fishery corporation to be called Rosrybflot. This state joint stock company will be formed on the basis of Arkhangelsk Trawl Fleet and Murmansk Fish Port which are 100%-owned by the state. The project is now being considered by the Fisheries Commission of the Government.

The new entity will be commissioned to return the Russian fishing fleet to the World Ocean and to recover the nation's historic right for fish resources in the areas where the Russian fleets had been working in 1970-1980s.

Krainy is sure that the food crisis in the world will continue as the cheap food era has come to an end and in the near future only chemical food will remain cheap. By 2030 the Americans apprehend wars for domination over protein resources and sweet water. At the same time, the World Ocean together with aquaculture can yield about 115 million tonnes of seafood. In some 20 years at the utmost all its areas with abundant volumes of aquatic bioresources will be divided between nations and Russia has to restore its position which has been lost after a collapse of the Soviet Union.

According to Russia's fishery industry head, 27 vessels (filleting trawlers of the Sterkoder series and longliners) will be handed over to Rosrybflot. These ships have been constructed under the nation's guarantees and the right for their operational control has been given to Akros, Sakhalinleasingfleet and Sakhrybakkolkhozsoyuz.

After the state has transferred the right for operational control to the above companies, they have been supposed to pay the bank loan interest rates, but the companies have evidently neglected their liabilities. Therefore, the government has made a decision to get the fleet back to the state property after paying the debt to the bank.

Although, Krainy says that Rosrybflot will not send those vessels to the overseas grounds as they are of little use for operations on distant grounds. He has not disclosed for which purpose the vessels will be used, he has only promised that Rosrybflot will not claim capture quotas in the national waters.

Focus on domestic raw

In 2008 the nation's fishery industry has been enlisted as one of the strategically important sectors. As a result, the 200-mile zone has been closed for foreign fleets (except for those operating under the intergovernmental agreements).

Actually, many fishing nations have been also forcing foreigners out of their waters with joined stock ventures with foreign capital admitted to the wild stocks subject to landing catches for processing at home shores. If a foreign company wants to purchase a blocking pack of shares of a Russian fishing company, the government will define where to allow the deal or not.

In 2008 the Federal Fisheries Agency will approve catch quotas for the extended term of 10 years and Andrey Krainy says they are going to scrutinize the applicants for implicit control by foreign businesses. The new regulations are to break the current situation when the bulk (ca.60%) of Russia's harvest of Alaska pollock is controlled by companies beyond the nation's jurisdiction.

Andrey Krainy says he strongly opposes foreign expansion into the nation's fishing sector. Instead foreign investors are welcome to capitalize on the development of the Russian onshore fish processing sector by means of participating in refurbishment and construction of fish factories.

Along with the above measures, the Federal Fisheries Agency has offered the government to raise import duties for farmed fish. The idea is to clear the market for domestically produced fish. While the current capacity of own meat production accounts for 45% of the nation's need in meat, the capacity of own seafood production is estimated at 120%.

Salmon river masters

For the first time in the Russian fishery history in 2008 the salmon river sites have been allocated to companies for a period of 20 years and now the insiders are discussing the results of these allocations, the discussions being heated mostly by the unhappy rejected claimants.

There were 583 fishing sites put up for tender and only one suit was brought to court by the losing bidder Krasnyi Truzhenik fishing co-op which had reportedly forgotten to indicate its two marine fixed seines in the application form.

Andrey Krainy says that the new regulation of allocating the fishing sites for seine capture of salmons will be instrumental in avoiding extra red tape and business lubrication and it will help encourage the fishermen to fight poaching. In the current salmon season 2008 the fishermen have already been calling fishery police to inform about poachers and even paid the costs of the inspectors' flight by helicopter to the grounds. As a result, the level of poaching in summer 2008 has been so far reported as "times down than in the previous years".

To be destroyed

In May 2007 the Government of the Russian Federation ordered to destroy withdrawn and forfeit aquatic bioresources in order to wipe out corruption in this property turnover. However, the procedure and the place of such destruction have not been specified yet. As a result, the cold stores have been overflowing with forfeit products stored there for many months.

Another problem is absence of the government funding to pay for storage and destruction. Andrey Krainy says that the only way is to make the procedure easy and quick, though that implies a risk of raider attacks.

There are also proposals to send withdrawn and forfeit seafood to kindergartens and schools, but the nation's fisheries head is sure that such decision would result into illegal sales of seized seafood on the market. That is why, the Russian fishery head thinks that destruction is the best measure.

Marine salmon fishery

Andrey Krainy says that as per early August 2008 the salmon fishery in Kamchatka has been fairly good and the total salmon harvest in the Russian Far East through the season has been forecasted at ca.300,000 tonnes.

He thinks that Kamchatka's Commission on Anadromous Fishery Regulation has made only one mistake. Pressed by the fishermen, the Commission has left a very small reserve of unallocated quotas, while the river grounds have been either rich or poor in salmon runs. Thus, some of the fishermen have faced a lack of fish versus the approved quotas. And the procedure of quota transfer from one user to another has not been developed yet. Besides, the TAC has been approved not for particular rivers, but for the whole subarea.

However, Krainy says that this problem will be observed only in 2008, because starting from 2009 the salmon TACs will be abolished with only the fishing stock to be defined. The respective proposal has been already forwarded to the State Duma.

Sockeye

Along with the above new development, as of 2009 the drift net salmon fishery will fall under stricter control of the Federal Fisheries Agency. According to the information coming to the Agency from the grounds, in 2008 the Japanese fleets have overfished sockeye. While earlier the Japanese drift netters had Russian frontier guards observing the fishing process onboard, now the frontier officers have switched to another procedure: one fishery inspection vessel will approach the Japanese ships participating in drift net sockeye fishery to check it. Andrey Krainy thinks that it is more sensible to order that the Japanese fishing vessels should have one Russian scientist and one Russian inspector for onboard control.

Drift net salmon fishery has been conducted not only for research purposes in other countries, for instance in Canada and the USA. Krainy thinks that Russia should develop marine salmon fishery rather than prohibit as proposed by Kamchatka deputies concerned by a negative impact for the salmon stocks and the river fishery.

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