FUNDING THE COMMON FISHERIES POLICY THROUGH THE EUROPEAN FISHERIES FUND 2007-2013

The latest tranche of funding from the EU, the European Maritime Fisheries Fund (EMFF), will require collateral funding from the Irish state of almost €100 m. EMFF will dispense funds to the industry through state agencies in much the same way as its predecessor, the European Fisheries Fund (EFF). At the conclusion of EFF, the fleet which was supposed to have undergone decommissioning in 2008, was 13% more numerous while the removal of kW (engine power) and GT (fleet displacement) were less than had been expensively purchased. The fish resource, which is the basis of all wealth in the industry, showed no signs of recovery during the period of EFF. Fisheries-related employment had fallen by some 850. It is concluded that the EFF further depleted the resource base of the industry. It may have conferred some benefits on a minority of wealthy operators but it worsened the economic situation of the majority of those in the catching and processing sectors.

SHORTFALL IN THE REDUCTION OF FISHING CAPACITY

The Common Fisheries Policy (CFP) is generously funded by the European Union and national governments though a series of operational programmes (OP) designed, in theory, to implement successive revisions of the CFP; “in theory” because it is doubtful whether any of their objectives is actually achieved. The purpose of this article is to examine the consequences of these investments in Ireland during the recently concluded OP.

The European Fisheries Fund (EFF) was made available from 1 January 2007 for the six year period to the end of 2013, although in Ireland it took a little longer to wind up. The total value of the fund was, at current prices, €4.3 billion[i] of which Ireland received €42 m. The Irish taxpayer contributed a further €24 m to this, amounting to a total of €66 m and the funds were distributed to the fisheries sector via five “priority axes”.

The axes were intended to rectify and assuage problems and imbalances and facilitate efficiencies within the fisheries sector. Their terms of reference recognized the declining resource, the over-capacity of the fishing fleet and sought redeployment for traditionally fisheries-employed personnel in alternative fishing-related activities, like aquaculture, as well as securing better prices for fisheries produce[ii]. The allocation of funding through the five axes is set out in Table 1.

Table 1. Distribution of EFF monies among five priority axes.

Table 1. Distribution of EFF monies among five priority axes.

Priority Axis 1. Adjustment of the fleet through the EFF

The urgency to balance fishing effort with resource availability was prominent in this suite of measures. Landings by the Irish fleet peaked in 1995 but since then have tumbled at an average rate of 7,700 tonnes per year (regression to 2014). The composition of the catches has changed considerably in the interim; deep water resources have been exhausted, demersal stocks depleted and many of the pelagic species have reducing biomass. An expansion in Nephrops fisheries replaced disappearing whitefish for a time but now even shellfish landings are falling. And there is no longer promise of undiscovered terrain, unexplored depths or new fish stocks waiting to be exploited.

In terms of volume, Irish landings are at similar levels to those at our entry to the EEC and the formation of the CFP. But our fleet is considerably greater, thanks to contributions by the European Commission and the Irish taxpayer over more than forty years. At the beginning of the EFF, the fleet was three times larger, in terms of Gross Tonnage (GT – displacement) than at the commencement of the CFP; however it was considerably more powerful in terms of horse power (kiloWattage). Exactly how much more powerful is unknown because this criterion has been poorly recorded and monitored but difference between the fleet in the 1970s and in 2007 is likely to amount to multiples of the earlier total.

Decommissioning absorbed most of the funding dispensed through the European Fisheries Fund

Almost 60% of total funding in the EFF was spent on Axis 1[iii] (Table 1) (€38 m) and the majority of that (€36.6 m) was to buy out surplus “Gross Tonnage” and “kiloWattage” thus removing excess fishing capacity and lowering the ceiling values of permitted total tonnage and total kiloWattage which, supposedly, cannot be exceeded. The “pool” of GT and kW is managed by private brokers from whom both must be purchased by the operator of a fishing vessel, before a licence to fish is granted and both are tradeable commodities.

The fleet is divided into a number of “segments” and some of these are selected for decommissioning because their fishing capacity is deemed to be in excess of available resources. Once a segment is reduced in size by decommissioning it cannot recoup its decommissioned fishing power: the whitefish segment was targeted in EFF. Should a vessel owner have chosen to continue fishing after decommissioning a vessel, GT and kW would have to be purchased from the brokered market.

Within EFF decommissioning was confined to the year 2008. In the course of the process, 6,914 GT and 19,363 kW were removed. How successful was the exercise in reducing fleet size?

Table 2. The number of vessels, their Gross Tonnage and kiloWattage before and after decommissioning in 2008: the officially reported and actual change.

Table 2. The number of vessels, their Gross Tonnage and kiloWattage before and after decommissioning in 2008: the officially reported and actual change.

Reference to the European fleet register[iv] suggests that less was achieved from the exercise than was anticipated; it did not attract the intended number of applicants but that was not the only explanation. The results of two comparisons, made on 31 December 2007, before decommissioning commenced and on 1 January 2014, six years later, when the “irrevocable reductions to fleet capacity” had been put in place, indicate that the indicators of fleet size were not so small as planned and, on the contrary, the fleet had enlarged by some 13% in terms of numbers of vessels (Table 2) in the interim. Earlier it was remarked that fishing power, or kW, was not satisfactorily described. One of the deficiencies is specifying the figure for only the main engine on a vessel whereas its fishing power may be supplemented by a number of other (auxiliary) engines plus, in the case of dredging, hydraulic pumps. In this instance of decommissioning only the main engine was considered and supplementary sources of power were ignored. However, even by that more limited criterion, the removal of kW did not match up to its reported reduction.

Decommissioning outcomes of the European Fisheries Fund less than anticipated

The principal inadequacy of the scheme: the reduction of GT and kW by less than intended, was not a surprise to everyone. For one thing, not every segment of the fleet was considered “overloaded” so there was spare capacity to be purchased from brokers. Within the industry it had been widely noted that some/many (?) who had sold older, uncompetitive vessels for the high prices paid for decommissioned boats (decommissioning prices are paid for the GT and kW associated with a vessel plus the price of the boat itself, which is often considerably greater than would be realised in an open sale to the industry) had reinvested their payments, courtesy of the EU and the Irish taxpayer, in more modern fishing craft.[v] The Managing Authority for EFF, the Department of Agriculture, Food and the Marine (DAFM) was uncertain who had done so. A fishing vessel does not always have a readily identified owner which could be an individual, a family, a company or an informal arrangement among individuals. Press inquiries revealed that money might be claimed to decommission a vessel whose owner then purchased a more competitive boat and continued fishing. Of course, that activity could not necessarily be continued in the same segment of the fleet unless sufficient surplus capacity were available on the market to accommodate the new vessel. However, sufficient “dormant” or “latent” tonnage was available to make it a reality for some vessel owners. It had not occurred to the promoters of the decommissioning scheme to purchase surplus GT and kW from the brokered market before dispensing grants to take boats out of service. Then again, not all segments of the fleet were “capped”- only those exploiting species regulated by TAC are and DAFM was accommodating: a boat would be allowed to fish provided there were no restrictions on its pursuit of other species. Thus, expansion of boat numbers targeting razor clams, for instance, has continued without any consideration of the consequences for fishers already committed to that pursuit.

Value for Money assessment of decommissioning through the European Fisheries Fund unconvincing

Facilitating the expansion of fishing effort in the uncapped fleet is grossly unfair to those who already exploit these fisheries because they are obliged to share their diminishing resource among more operators. Secondly – and this refers to the failure of any scientific policy contribution to fisheries planning – the administrative segmentation of fisheries ignores the fact they are inter-related in the real world. For instance, dredging out mussel beds is administratively regarded as totally distinct from trawling whitefish whereas species like cod and plaice utilise mussel reefs as nursery territory. There are many instances also of substantially similar gears – unselective trawls of various mesh sizes, for instance – being used to target fish and Nephrops all of them taking a toll of a wide range of species, some as landings and others as by-catch.

In 2011 DAFM commissioned a Value for Money Review of the decommissioning scheme;[vi] in addition to DAFM there would be input from the Department of Finance and the various state agencies associated with the administration of the sector. The review evaluated the administration of the scheme but was uncertain about the extent of re-entry by owners of decommissioned vessels. The effectiveness of the exercise was evaluated as a desk calculation: fewer vessels in a particular segment, utilising theoretically greater quotas per vessel, boosting individual income with less serious environmental consequences and greater compliance with regulations – unsupported by any evidence.001 - Copy

Any fisheries policy is utterly dependent on the availability of fish stocks. Hence the implementation of Priority Axis 1, which absorbed the majority of EFF was critical to its outcome.

Priority Axis 2: Sought to boost industrial development of the industry through aquaculture, marketing and processing.

Priority Axis 3: Provided funding for measures of common interest, such as port development and conservation projects.

Priority Axis 4: Was a sop to inshore fishers, funding local projects. This programme was not launched until 12 June 2012, a year before the programme was due to conclude.[vii]

Finally, Priority Axis 5, funded technical studies associated with the other axes.

Beneficiaries of the European Fisheries Fund

There were two principal beneficiaries of EFF: Producer Organisations whose vessels make up 9% of the fleet by number, whose owners actively participate in the formulation of fisheries policies (quota species account for 90% of landings by volume and 70% by value), and the Irish Sea Fisheries Board, Bord Iascaigh Mhara (BIM), which implements the various measures and dispenses funds and is thus a critical arbiter of policy; unfortunately, its policies have not substantially altered over the 65 years of its existence during which the fisheries resource has progressively deteriorated. In its role, BIM decides the criteria for funding. For instance, its standards for “sustainable fishing” are devised by the agency itself rather than being adopted from the Marine Stewardship Council, which is not without its critics but has greater international recognition. The performance of BIM is rated on the number of projects it manages.

To ascertain what happened in the course of EFF two principal sources were consulted. The Cawley Report, published in 2006[viii], was the basis on which EFF was designed. The second, Consultation on Seafood Development Programme 2014-2020[ix] (the SDP report) was the foundation of its successor the European Maritime Fisheries Fund (EMFF).

Values for some of the indicators of outcome are provided in Table 3. Another long standing tradition in Irish fisheries reviews is the inconsistent way they are reported so that while both of these reports are long precise comparisons between them are problematical.October 2011 fisheries journalists meeting etc 017

Landings statistics were provided by the Sea Fisheries Protection Authority.

Deterioration of the resource base throughout the course of the European Fisheries Fund.

Starting with the yield of fish (Table 3) there is no evidence of an increase as a result of decommissioning which took place at the beginning of the programme (2008). The total value of the catch would, at first sight, appear to have risen in the interim but once inflation is factored in, it decreased by approximately 3%.

Table 3. Indicators of performance in the EFF: Landings, Aquaculture productivity, Processing output and employment before and after funding.

Table 3. Indicators of performance in the EFF: Landings, Aquaculture productivity, Processing output and employment before and after funding.

Thus, in its primary objective of adjusting demand with supply, the EFF was a failure and although there is no specific statement to that effect the SDP report tells us that the fleet barely breaks even (P 23) and that the rising price of fish as a raw material for processing (it increased steadily from 49% of turnover in 2008 to 69% in 2012) (P 58) contributed to a progressively more difficult manufacturing environment which stems from a dearth of raw material.

The creation of extra value and jobs are the other objectives of these programmes and the output of aquaculture appears to have increased in the period between publication of the two reports, otherwise the picture is not so favourable. Despite an increase in production, employment in aquaculture, as in the fisheries sector generally, declined.

Employment further declined throughout the period of the European Fisheries Fund

Total employment in the industry, according to the SDP Report is 11,000 which distilled down to 7,000 full time job equivalents (FTE). A comparison between the pre-and post- EFF is available in the Cawley report and the annual report of the implementation of the EFF for 2014.[x] (Table 3) Despite the funding injected to reform the industry, the loss of jobs, recognized by Cawley, has continued.

The situation in fish processing is noteworthy: data in Table 3 suggest the number of jobs provided was, at best, unchanged, whereas the number created between 2012 and 2014 is reported as 337. This raises a number of questions: were the grant-aided jobs temporary or did they displace other employees who might have been put at a competitive disadvantage because their employers did to receive similar funding?

There is a long standing practice in dispensing fisheries funding in Ireland: the application for grant aid is accompanied by a review of the industry and a favourable forecast of its outcome. The forecast is never revisited at the conclusion of a programme; instead another suite of optimistic forecasts looks ahead to its successor’s prospects. Perhaps the expression of jobs supported within the industry in the SDP report was pitched low in order not to disappoint in any successor report to EMFF, just in case somebody cares to make the comparison?

An ex-post evaluation of the EFF is imminent (due for completion in November 2016). The responsible unit is A3 (Structural policy and economic analysis) of DG Mare. Whereas such matters as the management of the Irish fleet register are for the member state to decide, dispensing funds in the knowledge of how such matters are managed is less than responsible. It will be instructive to discover how this issue is dealt with.

26 April 2016

REFERENCES

[i] http://ec.europa.eu/fisheries/documentation/publications/cfp_factsheets/european_fisheries_fund_en.pdf

Consulted on 31 March 2016.

[ii] http://www.eu4journalists.com/index.php/dossiers/english/C8/35/index.html# Consulted on 31 March 2016

[iii] Proposal to the Monitoring Committee: Modification of the Seafood Development Programme 2007-2013. Issued by the Department of Agriculture Food and the Marine.

[iv] http://ec.europa.eu/fisheries/fleet/index.cfm Consulted on 4 July 2014

[v] Payouts blamed for fish crisis by John Mooney, Sunday Times Irish edition, 8 July 2012

[vi] https://www.agriculture.gov.ie/media/migration/publications/2012/FishVFMFinal310112.pdf Consulted on 4 April 2016

[vii] Seafood Development Operational Programme 2007-2013. Annual Implementation Report 2013. Ireland Pp 53. Bord Iascaigh Mhara.

[viii] Steering a New Course: Strategy for a restructured, sustainable and profitable seafood industry 2007-2013. Report of the seafood industry steering review group. Pp. 196

[ix] Consultation on Seafood Development Programme 2014-2020. Published by DAFM, 2015 Pp 224 (the SDP Report).

[x] Seafood Development Operational Programme 2007-2013. Annual Implementation Report 2014. Ireland

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