Fishing bonuses work

The authorities want more fresh cod outside the intensive winter season. This will provide a more stable supply and predictable situation for the fish processing industry and better utilization of the well-paying fresh fish market.

To achieve this, two different schemes have been implemented to motivate fishermen to change cod fishing: the fresh fish scheme and the live storage bonus. Both schemes use extra quotas as incentives, to change fishermen’s behaviour.

Now, under commission from the Ministry of Industry and Fisheries, Nofima researchers have investigated a number of aspects of these schemes, and have concluded that they primarily function in accordance with the authorities’ expectations.

The researchers have studied changes in catch patterns, reviewed critical media articles and interviewed both managers, fishermen and fish processors, to find out how the schemes work.

The fresh fish scheme

The scheme was introduced in 2013 and means that vessels that deliveries of fresh fish outside the main season yield not only revenue, but also extra cod quota. Thus, a part of the coastal fleet’s cod quota has been set aside for this scheme.

There is also an ambition to get the smallest fleet to catch more of its allocated saithe and haddock quotas, while also delivering fresh cod during the summer and autumn.

The scheme is reserved for vessels that supply fresh fish. A vessel that has only landed cod during the week, deducts the catch partly from its own quota, and partly on a variable quota supplement on the fresh fish scheme.

“All our informants agree that the fresh fish scheme is the best scheme we have had to improve off-season landings of fresh fish. The scheme is also helpful in preventing discards and unreported landings,” says researcher John R. Isaksen.

This is because, the scheme makes it less attractive to under report a catch or to throw  unwanted catch overboard.

It is Finnmark in particular that benefits from the fresh fish scheme. When the main season is over, the cod migrates north to the coast of Finnmark, where the fillet industry gains more access to fresh fish. Lofoten and Vesterålen receive a smaller proportion of this, as cod is less abundant here outside the season.

“The fact that long line fishermen do well out of this scheme is encouraging for quality,” says Isaksen.

Long line is a gear appropriate for achieving optimal quality in the fish.

The report indicates that some vessels are benefiting very well from the scheme, while the majority of vessels that “give up” quotas to this scheme, do not participate in bonus generating fishing activities.

The live fish bonus

Another option for supplying the market with fresh cod outside the main season is live storage. For cod, capture-based aquaculture represents a new way of fishing, which requires new knowledge and development. To encourage this, the authorities have created a scheme called “live storage bonus”.

Fishermen who store the catch in cages for more than a week, less than the actual catch is subtracted from their quota..

When the scheme was introduced in 2008, this reduction was 20%, while since 2013 it has been at 50%. The scheme is intended to be temporary, to help the industry get going. The figures show that it is working. More fishermen are storing their cod catch live, and the volume of live-stored fish has also increased significantly.

In 2017, 4,000 tonnes from the total cod quota has been set aside for the scheme, and about 5,750 tonnes were stored live

“The cod is stored live for an average of around three months. Also, live-storage fishing takes place around one month later than traditional fishing. This means that we get more fresh cod, especially during the summer. But the effect for the rest of the year is minimal, and the vast majority of players have chosen to store the fish for a relatively short period,” says researcher Øystein Hermansen.

Thus far, the incentive scheme has not provided much knowledge regarding storage over longer periods – in particular about the market opportunities.

Adjustment proposals

Industry representatives believe the scheme should last another three to five years before sufficient knowledge has been gained for the practice to continue without the live-storage bonus. There isa degree of uncertainty among industry regarding the continuation of the incentive scheme, and this has negatively influenced their willingness to invest in this way of storing the catch.

In the evaluation report, the researchers propose a number of adjustments to improve the schemes.

“The fresh fish scheme should start at the earliest at the beginning of May. It may also be relevant to improve enforcement of the quality regulations, so that we avoid major poor-quality supplies,” believes Isaksen.

“In order to deliver cod via the fresh fish scheme, some species have been caught that the fish processing industry is unable to use. This can be countered by demanding that the species that provide the basis for the quota addition of cod must be fish that is fit for human consumption,” he says.

To prevent illegal landings, the authorities could consider stricter requirements for documentation, and use sanctioning options, for example, exclude players from the live storage scheme if regulatory violations are uncovered. Documentation and sharing of information about the conditions during the catch and survival at different stages may also increase the learning effect for other players.

Researchers also believe that a system that would provide incentives also for storage plants.

A major reason why few plants have chosen long- term storage of fish are the requirements for both permits and the location of such businesses. Both the distance requirements for other aquaculture operations and the requirements associated with risk assessments related to infection have proven difficult to fulfil. The researchers recommend that the authorities review the regulations to establish if the risk assessments are reasonable.

Do the schemes result in greater value creation?

The overall objective of the schemes is to contribute to increased total value adding in the seafood industry. In the report, the researchers clarify the economic advantages and disadvantages of the schemes.

Fishermen increase their catch costs by fishing outside the main season, while the processing industry benefits by having more frequent access to fresh cod, and other types of fish, throughout the year. There are many examples of coastal communities – especially in Finnmark – where both fishermen and the fishing industry benefit from the fresh fish scheme.

“Live fishermen” also have greater catching costs associated with this type of fishing activity than with traditional fishing, and storing the fish is an additional cost. However, the sales price is also higher and the fish can be used in more products.

“We see both positive and negative effects of the schemes, but do not have a good enough basis upon which to draw any final conclusion about the net effect of them, when it comes to value adding,” says researcher John R. Isaksen.

Nevertheless, feedback from industry players is unanimous – they want the schemes to continue, preferably in an improved form.

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