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Fair seas: What threatens small, medium Arctic fishing companies

July 14, 10:06 UTC+3 MOSCOW

The government has introduced supporting measures in order to cope with the problem of outdated vessels but they are not applicable to the light-duty fleet

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© Yuri Smetyuk/TASS

MOSCOW, July 14. /TASS/. Outdated vessels are typical for most companies and regions in Russia, including the Arctic zone, where most fish is produced. The federal government already addressed the subject by offering investment quotas and "utilization" grants. However, experts and businesses say those supporting measures are not applicable to the light-duty fleet. This article by TASS will shed light on the decision.

Vessels transmitting support calls

The federal government has offered two basic methods for supporting fleet renovation. The law on fishery and water biology resources, which the president inked on July 3, 2016, touches upon quotas for investment purposes. For constructing a new fishing fleet at Russian shipbuilding facilities as well as building modern fish processing plants, the law has reserved 20% of the quotas from produced water biology resources, the production of which is regulated.

The second direction is the decision to subsidize new civil vessels - the so-called "utilization" grant. This is a lump sum payment to compensate for a share of expenses for construction of new civil vessels in case an old vessel (which worked for more than 30 years) is utilized.

The two directions to support vessels are to solve the problem of the outdated fleet. But, mostly, they are applicable to big vessels, and the regions and businesses are pointing to the fact.

Experts say: light-duty fishing fleet also requires renewal.

Deputy speaker of the State Duma Olga Yepifantseva told TASS the Northern fishing fleet is worn out and 86% of the vessels there are more than 20 years old. "Without urgent stimulation for building new fishing vessels, we may remain without any fleet," she said. In the Arkhangelsk region, the vessels' average age is 27 years, she added.

In the Murmansk region practically every other vessel should be utilized because of the age. Head of the North's Fishers Union Vladimir Grigoryev said those are vessels more than 30 years old. "As of now, out of 230 fishing vessels in the region, 99 are at the age of due utilization," he said.

Karelia's experts note certain improvement of the situation at the region's companies. The republic's representative at the Federation Council (Senate) Igor Zubarev says the state of fleet in the Northern

basin is better than that in the Far East. Head of the Karelian Fishers Union Ilya Rakovsky agreed with the opinion, saying "our companies even without the investment quotas have been investing heavily in modernization of the fleet, and now its state and opportunities are better than they were back in the Soviet times."

Effective size

Rosrybolovstvo, the country's fishing authority, calls limits in the vessels' size, depending on which quotas are possible, the question of effectiveness and security, especially in the Arctic.

"The light-duty fleet, which now is in the Northern basin, is for morequiet conditions and for fishing along the shores, but when we speak about the Arctic, distance from the shore is what matters in terms of security, thus those should be big vessels of the ice class. Our task is not just to have more vessels, but to guarantee better conditions for people working at sea and to raise security there," the agency's head Ilya Shestakov said.

Earlier, he said about the requests to include low-duty vessels in the list of objects, for which investment quotas would be allocated. "But neither we, nor big associations supported those requests, as thus we would be unable to raise the quality of the fishing industry," the official said.

This is why the supporting measures were offered for bigger vessels. "In fact, as for the Northern basin, fishing here is most for cod, haddock, capelin - they are produced mostly from the medium-duty

fleet. Those vessels are more autonomous and have bigger cargo holds," he said. "The requirements are that the medium and high duty vessels, applying for investment quotas, should have processing facilities on board."

What about the small ones?

The lack of support for light-duty vessels has a social component as well. The new initiative does not consider the specific conditions in the North, the parliament's deputy speaker said. Thus, she continued, the new regulations outlaw renovation of fishing companies in the Arkhangelsk and Murmansk regions and in the Nenets Autonomous District.

"This is almost 60% of companies, involved in fishing in Russia's western part of the Arctic zone," she said. "Moreover, all those companies are supplying the domestic market."

Light and medium-duty fleets are playing most important roles in the regions' both economy and social development. "In the Arkhangelsk region, it is so historically, that fishing companies are bases of

settlements along the shores. They have only light and medium-duty vessels, and we all understand how old they are. It is most important those companies could use the offered investment benefits in the form of additional quotas, as it is a matter of those settlements' survival, of keeping the people there," she said.

Small and medium businesses share this opinion. Head of the Belomor fishing company (Arkhangelsk region) Sergei Samoilov stresses the offered support would be available for big vessels only. "We cannot use it, we lack the quota to use for a guarantee to the government, and similar situations are in other companies," he told TASS. "Some have to reform the companies, merging them into a big company. We have to close old companies, merge then into a big one; no other way out here."

Development stimulus

Rosrybolovstvo calls the merger processes normal. The authority's head told TASS quote often small companies receive the quotas they are unable to use. "Quite often, all those small companies are either rentiers, or anyway they have to merge and to unite those quotas, using one or two vessels to have the process effective," he said. "And here we, of course, can see certain consolidation may be there, thus in fact they could organize industrial unions, build a vessel for a few companies and thus work more effectively."

The format of support will stimulate development of the fishing industry, including deep processing, the authority said. "In most cases, now we fish, freeze and paralyze the raw material. It is important we have a longer chain, a processing, do that we sell and also export products with high value added cost," the official said.

Thus, the authority plans, investment quotas would be available only for the vessels, which will be effective. At the same time, the bill suggests investment quotas also to slighter smaller vessels, which will deliver fresh fish.

As for light-duty vessels working along shores, certain support for them would be also available. "The companies, which will be involvein fishing near shores, also will have a raising ratio to their quotas," he continued. "Meaning the quotas for allowed production - they would be able to fish by 20% more." 

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