Brussels, 09/03/2006 (Agence Europe) - On 8 March, the European Commission adopted a Communication on ways to improve the economic situation in the fishing industry, which has been in difficulty since the rise in fuel prices. It authorises Member States to provide national rescue and restructuring aid for companies on the verge of bankruptcy.
During a press conference, European Fisheries Commissioner Joe Borg explained that the paper was presented in response to requests from several Member States, MEPs and those working in the sector calling for a “Community response to what is seen as a European-wide problem”. Mr Borg said “many fleets are today struggling to meet their running cost”, and especially the “fuel bill”, which has gone up considerably in recent years - by 100% between 2003 and 2005, increasing from 0.30 to 0.60 euros for a litre of fuel. Over this period, the cost of fuel has increased from around 18% to 36% of the value of trawler catches and from around 9% to 18% for fleets with dormant engines. In its Communication, the Commission states that this rise in costs has really hit crew members hard as the amount they take home is a percentage of the revenue made from catches (after deduction of all operating costs, including the cost of fuel). In some cases, loss of revenue can be up to 25%. These economic difficulties mainly affect boats that use towed gear for demersal species (cod, haddock, hake, saithe and whiting), i.e. trawlers that consume more fuel.
Mr Borg explained the other causes why the income of fishermen is falling - above all the major reduction in certain Total Allowable Catches (TACs) and quotas due to declining stocks. Somewhat “paradoxically”, the Commissioner says, catch reduction is not offset by a rise in fish prices on the market. On the contrary, the price of many white fish remained the same or fell between 2000 and the first half of 2005. According to the Commission, this price stagnation, which affects fishermen severely, is due more to the concentration of sales in large distribution outlets and to heightened competition between fish and other foodstuffs than to the rise in the share of imports on the Community market for fish and the development of aquaculture.
In order to overcome the sector's economic difficulties, the Commission suggests short term measures (State aid to companies in difficulty and for temporary cessation of activity) as well as long term measures (Community fishing instruments to accompany necessary adjustments and to support the fishing industry). Mr Borg stressed that such measures must comply with EU law and that they must not give a competitive advantage to any part of the fleet to the detriment of the others, or threaten stock sustainability.
Short-term rescue and restructuring aid: Under the guidelines on rescue and restructuring aid, the Commission allows Member States to pay State aid to fishing vessels on the verge of bankruptcy during six months. The non-reimbursement of this aid is, however, conditional upon the submission and approval of a restructuring plan which defines how the enterprise in question will adapt in order to return to sustained profitability. The Commission is also prepared to consider certain types of aid for the modernisation and equipment of vessels, which would normally not be allowed under the rules of the Common Fisheries Policy (CFP), on the express condition that this does not result in any increase in overall fishing effort and capacity. Eligible measures will include: - a first change of fishing gear resulting in a less fuel-intensive fishing method; - purchase of equipment to improve fuel efficiency; - and one replacement of engine (although this must have at least 20% less power than the old one for vessels over 12 metres in length).
Long-term measures: The Council will seek to reach an agreement in May on the new European Fishing Fund, to cover the period 2007-2013. Although the possibility of Community aid to the fleet is limited (ban on funding the construction of new vessels and modernisation of engines and fishing gear from public funds), the Commission is prepared to show proof of flexibility in view of the crisis facing the industry. It contemplates authorising the financing of engines and fishing techniques that are less fuel-intensive. Furthermore, joint Community funding is foreseen for programmes for the destruction of fishing vessels and for social measures arising because of this. The Commission also suggests improving market mechanisms and devoting part of the 7th framework programme to promote research into fuel-efficient and more environmentally friendly fishing techniques.