The Potential Economic Impact on Selected Fishing Fleet Segments of TACs Proposed by ACFM for 2004 (EIAA-model calculations)

Transcription

1 COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, SEC(2004) 61 COMMISSION STAFF WORKING PAPER REPORT OF THE SCIENTIFIC, TECHNICAL AND ECONOMIC COMMITTEE FOR FISHERIES Subgroup on Economic Assessment (Brussels October 2003) The Potential Economic Impact on Selected Fishing Fleet Segments of TACs Proposed by ACFM for 2004 (EIAA-model calculations) This report has been evaluated and endorsed by the Scientific, Technical and Economic Committee for Fisheries (STECF) in the plenary session of 3-7 November It does not necessarily reflect the view of the European Commission and in no way anticipates the Commission s future policy in this area.

2 Scientific Technical and Economic Committee for Fisheries Subgroup on Economic Assessment The Potential Economic Impact on Selected Fishing Fleet Segments of TACs Proposed by ACFM for 2004(EIAA-model calculations) TABLE OF CONTENTS I. INTRODUCTION TO THE EIAA REPORT FOR Introduction and list of participants The Economic Assessment TAC proposals for Long-term TACs and SSBs Mixed Fisheries...7 II. ASSESSMENT OF THE ECONOMIC IMPACT OF PROPOSED 2004 TACs BY FLEET SEGMENTS...10 SUMMARY. Economic impact of five scenarios for SUMMARY. Economic impact of five scenarios for 2004 cont Beam trawl over 24 m Beam trawl under 24 m DENMARK Trawlers 200 GT Trawlers < 200 GT Danish seine Gill net FINLAND Trawlers < 24 meters Trawlers > 24 meters Gill netters Coastal vessels FRANCE Atlantic bottom trawlers Atlantic netters NETHERLANDS Beam trawlers <= 24 m Beam Trawlers > 24m SWEDEN Pelagic trawlers/purse seiners >= 24 m Shrimp trawlers Trawlers >= 24 m Trawlers < 24m Nephrop trawlers Gill netters >= 12m UNITED KINGDOM Scottish Demersal Trawlers over 24 metres registered length Scottish Demersal Trawlers under 24 metres registered length Scottish Demersal Seiners UK Beam Trawlers

3 7.5 Scottish Nephrops Trawlers...56 SUMMARY TABLES...58 APPENDIX...65 The EIAA Model Methodology Definitions Presentation and interpretation of results Specification of the biological data required for the EIAA model Selected model features...73 Example of effort calculation with the EIAA formula

4 I. INTRODUCTION TO THE EIAA REPORT FOR Introduction and list of participants The SGECA was convened from 27 to 31 October to evaluate the short and long term economic impact of the ACFM advice. The group was expected to run the EIAA-model taking into consideration the latest ACFM advice of October The meeting was attended by the following experts: STECF members Jos Smit (LEI) Invited experts Jim Watson (Sea Fish Industry Authority) Hans Frost (Danish Research Institute of Food Economics), chairman Joacim Johannesson (The Swedish National Board of Fisheries) Olivier Guyader (IFREMER) STECF Secretariat Franco Biagi (European Commission) The model used in this Report was developed from that set out for the Economic Interpretation of ACFM Advice 1 originated under FAIR CT Most of the data presented was collected under the current EU funded project Economic Assessment of European Fisheries (Q5CA ) under the 5 th Framework Programme Quality of Life and Management of Living Resources, and provided by economist at a working group meeting in Salerno (I) October The biological information presented in section I.2-4 forms basis for the economic assessment. This information was provided by the SGRST (subgroup on Reviews on Stocks) that met in Brussels October. The used quotas for the Baltic Sea are those adopted by the IBSFC (International Baltic Sea Fisheries Commission) in Autumn Concerted Action: Promotion of Common Methods for Economic Assessment of EU Fisheries (2001) Economic Interpretation of ACFM Advice, Specimen Report No. 3, LEI, Den Haag,

5 2. The Economic Assessment This report gives an assessment of the expected economic impact of the TACs proposed by the ACFM for The EIAA Model used for the calculations is described in an Appendix which is intended to throw light on some bio-economic features of the model that will help non-economists and that dovetail with the conventional bio-economic advice. To carry out an assessment of the financial impact of ACFM advice, the fleet segments examined need to be subject to quotas, and knowledge of the catch composition for the national fleet and each fleet segment is also required. The costs and earnings information is from the Annual Economic Report (AER). The segments included are those for which necessary information is available. The economic information is generally reliable. In this report it has been possible to include segments from each EU member state as follows: Belgium Denmark Finland France Netherlands Sweden United Kingdom 2 segments 4 segments 4 segments 2 segments 2 segments 6 segments 5 segments The assumptions for the calculations for these 7 countries are: The TACs for each species are caught adjusted with an up-take-ratio calculated from the base period s landings relative to the allocated quotas. Future prices are base period prices adjusted with a flexibility rate of 0.2 based on the whole TAC for the EU for the relevant species. The stock-catch flexibility rate is 0.6 for demersal species, reflecting their spatial density, and 0.1 for pelagic species owing to their shoaling behaviour. Hence, an increase in stock abundance lowers the amount of effort. The change in effort is proportional to the change in the quotas for the relevant segment. Costs are calculated at fixed prices (base period) but adjusted proportionally with the change in effort for future years. For the United Kingdom fleet segments, landings have been valued at the national average price reigning in each year. 5

6 The format of the analysis presented includes text and diagrammatic information. A glossary and explanation of the indicators used are set out in Sections 2 and 3 of the Appendix. The calculation about the long term economic consequences use information about spawning stock biomasses and long term yield. The members of the SGRST-working group provided that information during the meeting, which is greatly appreciated. The EIAA-model is constructed to work with a list of TACs for the management areas as complete as possible. For the member states and the included fleet segments this list should be as complete as possible as well implying that if the landing value is composed of a large share of non-quota species or no information is available about the quota species for the pertinent fleet segment, the model will produce very little or no change in the economic results because landings of non-quota species are assumed constant in the model. 3. TAC proposals for As far as possible, the estimated TACs for 2004 were taken from the ICES single stock summary advice. This specifically ignores the advice given by ICES in a mixed fishery context and was used to demonstrate the effect of the single stock advice on the economic performance of the fleets. It is worth noting that for some stocks, the single species advice is for zero catch in 2004 and in such cases the TAC input to the EIAA was therefore zero. In other cases the ICES advice did not imply a specific TAC for 2004 and in such cases, the group set the TAC for 2004, either as being equal to the 2003 TAC or estimated a TAC using an existing management objective. For example, the TAC for North Sea plaice was estimated using the fishing mortality of 0.3 agreed as a management objective between the EU and Norway. For the Baltic Sea, the already decided quotas for 2004 by the International Baltic Sea Fisheries Commission have been applied in all scenarios. For many stocks the assessment area encompasses more than one management area. In such cases the TAC for the stock was partitioned according to the allocation of the 2003 TACs to the different management areas. In the absence of SSB estimates in the ICES advice, SSB for 2004 was either derived from the appropriate working group catch forecast management option table Or set equal to SSB for Long-term TACs and SSBs The long term TAC s were calculated by taking the yield per recruit (Y/R) at the precautionary fishing mortality (F pa ) and multiplying this by the average (arithmetic) recruitment for the assessment time series as it appears in the ACFM summary table. This figure was then adjusted to reflect the likely EU share by applying the 2003 total TAC to EU share ratio [EU share long term=tac long term *(EU Share 2003 /TAC 2003 )]. In some cases (e.g. blue whiting) these were then further subdivided into TACs for each sub-division by applying the 2003 TAC to sub-division ratio. The long term SSB s were calculated by taking the SSB per recruit (SSB/R) at the precautionary fishing mortality (F pa ) and multiplying this by the average (arithmetic) recruitment for the assessment time series as it appears in the ACFM summary table. In most cases, values of Y/R and SSB/R were derived by eye from the plots in the ACFM report; this is clearly not very precise, but essential in the absence of the comprehensive data. In cases where information was missing from the ACFM 6

7 report (e.g. yield per recruit plots) data were taken from either working group reports, or from previous ACFM reports. In cases were F pa was not available, an appropriate fishing mortality (e.g. F sq ) was chosen. 5. Mixed Fisheries At the meeting on Mixed Fisheries (Subgroup on Resource Status (SGRST) of the STECF), held in Brussels from October 2003, the Commission requested the group to make mixed species/fishery model (MTAC) runs with specific targets for the North Sea and for the Irish Sea stocks. Table I.1 Targets for MTAC Targets for the North Sea: Target A Target B Decision weight Cod 0.2*C sq 0.35* C sq 0.5 Haddock C sq C sq Whiting C sq C sq Plaice 0.3* C sq 0.6* C sq 0.5 Sole Advice: Fpa Advice: Fpa Saithe Advice: Fpa Advice: Fpa Nephrops F sq F sq Table I.2 Targets for MTAC Targets for the Irish Sea: Target A Target B Decision weight Cod F for +30% SSB F for +30% SSB 0.5 Haddock Fpa Fpa Whiting 0.2*Fsq 0.35*Fsq 0.5 Plaice Fpa Fpa Sole Advice = 0.9* F sq Advice= 0.9* F sq Nephrops F sq F sq Where C sq is the level of catches corresponding to F sq. At the Mixed Fisheries meeting, for the North Sea, two different runs were made for each scenario, differing in the way the proportion of the catches were waited. Prop = 1: Species-specific fleet effort reduction will be in proportion to the ratio of the catch in weight of that species by that fleet to the total catch weight of all species by that fleet Prop = 2: Species-specific fleet effort reduction will be in proportion to the ratio of the catch in weight of that species by that fleet to the total catch weight of all species by all fleet For Irish Sea, only prop=1 was used in the model for both Targets. The results of the mixed species evaluations, requested by the Commission, form the inputs to the EIAA evaluation and are summarised below. 7

8 Because Target A for both areas is more restrictive than Target B, four scenarios where run on the EIAA model as Mixed fishery scenarios. Next to these scenarios, a additional scenario, based on the ICES stock specific advice for 2004 was executed. Settings for the 5 scenarios are listed below: Table I.3 Scenarios assessed in the EIAA model North Sea Targets - Calculation Irish Sea Targets - Calculation 1 ICES stock specific advice Mixed Fishery A Prop 2 A Prop 1 3 Mixed Fishery B Prop 2 B Prop 1 4 Mixed Fishery A Prop 1 A Prop 1 5 Mixed Fishery B Prop 1 B Prop 1 Based on these settings listed above, the Multi-species TAC from the MTAC model are as follows (in tonnes): Table I.4 Scenario 1, the ACFM proposal North Sea ICES Advice 2004 TAC Irish Sea ICES Advice 2004 TAC Cod 0 0 Haddock Whiting Plaice Sole Saithe Nephrops Table I.5 Scenario 2 Mixed fishery. Target A Prop 2 North Sea Mixed Fishery 2004 TAC* Prop 1 Irish Sea Mixed Fishery 2004 TAC* Cod Haddock Whiting Plaice Sole Saithe Nephrops

9 Table I.6 Scenario 3 Mixed fishery. Target B Prop 2 North Sea Mixed Fishery 2004 TAC* Prop 1 Irish Sea Mixed Fishery 2004 TAC* Cod Haddock Whiting Plaice Sole Saithe Nephrops Table I.5 Scenario 4 Mixed fishery. Target A Prop 1 North Sea Mixed Fishery 2004 TAC* Prop 1 Irish Sea Mixed Fishery 2004 TAC* Cod Haddock Whiting Plaice Sole Saithe Nephrops Table I.6 Scenario 5 Mixed fishery. Target B Prop 1 North Sea Mixed Fishery 2004 TAC* Prop 1 Irish Sea Mixed Fishery 2004 TAC* Cod Haddock Whiting Plaice Sole Saithe Nephrops * TAC represents predicted catch at target F 9

10 II. ASSESSMENT OF THE ECONOMIC IMPACT OF PROPOSED 2004 TACs BY FLEET SEGMENTS The economic consequences of the five scenarios described above are presented in this chapter. The chapter is organised in the following way. First summary results for the five scenarios are presented for all the included segments. The selected economic indicator is the operating profit margin defined as the net profit relative to the value of landings. Theoretically, net profit relative to the value of the invested capital would be a more appropriate measure, but because of the uncertainty about the estimated value of the invested capital it is concluded that this economic indicator is not so useful. The net profit is defined as the value of landings minus all costs. If the net profit is negative the operating profit margin is negative. In the summary table the profit margin for the five scenarios for 2004 is related verbally to the profit margin for 2003 in the following way: Impact = Impact of 2004 TAC on operating profit margin compared to 2003 Worsened = Segment was making losses, losses now greater. Improved = Segment was making losses, losses now smaller. Lower = Segment was making profits, profits now lower. Higher = Segment was making profits, profits now higher. The situation of the included segments of each country is the described by the characteristics of the segments followed by the the economic results of the five scenarios relative to the base line and The results are presented in diagrammes, and in teh end of the chapter summary tables are included. 10

11 SUMMARY. Economic impact of five scenarios for 2004 Country Segment Scenario 1 ACFM Advice Scenario 2 Mixed Fishery Target A, Prop 2/1 1) Scenario 3 Mixed Fishery Target B, Prop 2/1 1) Belgium Denmark Operating Profit Margin Impact Operating Profit Margin Impact Operating Profit Margin Impact Beam trawlers <=24m -1,5% Worsened -1,7% Worsened -0,6% Worsened Beam trawlers >24m -4,7% Worsened -3,0% Worsened -2,7% Worsened Trawlers 200 GT -3.0% Improved -3.3% Improved -3.0% Improved Trawlers < 200 GT -16.4% Worsened -16.5% Worsened -14.9% Worsened Danish Seiners -15.1% Worsened -18.2% Worsened -14.0% Worsened Finland Gill Net -44.6% Worsened -47.0% Worsened -41.2% Worsened Trawlers< % Improved Trawlers> % Improved Gillnetters -26.4% Worsened France Netherlands Sweden Coastal vessels 27.5% No impact Atlantic bottom 11.9% Higher 10.5% Lower 11.7% Lower Atlantic netters 12.0% Lower 12.0% Lower 11.9% Lower Beam trawlers <=24m -2,2% Worsened -16,4% Worsened -9,4% Worsened Beam trawlers >24m -10,8% Worsened -30,6% Worsened -16,4% Worsened Pelagic trawlers/purse 20.8% Higher 19.4% Higher 19.4% Higher Shrimp trawlers 31.9% Lower 32.4% Lower 32.5% Lower Trawlers>= % Lower 12.5% Lower 12.2% Lower Trawlers< % Lower 17.9% Lower 18.2% Lower Nephrop trawlers 27.6% Lower 27.8% Lower 27.7% Lower UK Gill netters>= % Lower Scottish Demersal -1.9% Lower -1.9% Lower 4.2% Higher Scottish Demersal -10.3% Improved -10.3% Improved -6.3% Improved Scottish Seiners -11.3% Lower -11.3% Lower -0.9% Lower Beam Trawl -44.2% Lower -43.9% Lower -34.9% Lower Scottish Nephrops 7.2% Higher 7.2% Higher 7.7% Higher 1) See section I.4. 11

12 SUMMARY. Economic impact of five scenarios for 2004 cont Country Segment Scenario 1 ACFM Advice Scenario 4 Mixed fishery Target A, Prop 1/1 1) Scenario 5 Mixed fishery Target B, Prop 1/1 1) Belgium Denmark Operating Profit Margin Impact Operating Profit Margin Impact Operating Profit Margin Impact Beam trawlers <=24m -1,5% Worsened -1,5% Worsened 0,3% Lower Beam trawlers >24m -4,7% Worsened -3,1% Worsened -2,4% Worsened Trawlers 200 GT -3.0% Improved -3.2% Improved -2.9% Improved Trawlers < 200 GT -16.4% Worsened -15.9% Worsened -14.4% Worsened Danish Seiners -15.1% Worsened -17.6% Worsened -13.7% Worsened Finland Gill Net -44.6% Worsened -45.4% Worsened -39.2% Worsened Trawlers< % Improved Trawlers> % Improved Gillnetters -26.4% Worsened France Netherlands Sweden Coastal vessels 27.5% No impact Atlantic bottom 11.9% Higher 11.5% Lower 12.0% Lower Atlantic netters 12.0% Lower 11.8% Lower 11.3% Lower Beam trawlers <=24m -2,2% Worsened -12,3% Worsened -2,3% Worsened Beam trawlers >24m -10,8% Worsened -21,5% Worsened -7,0% Worsened Pelagic trawlers/purse 20.8% Higher 20.7% Higher 20.7 Shrimp trawlers 31.9% Lower 31.8 Lower 31.5% Lower Trawlers>= % Lower 10.1% Lower 9.8% Lower Trawlers< % Lower 16.3% Lower 16.3% Lower Nephrop trawlers 27.6% Lower 27.7% Lower 27.6% Lower UK Gill netters>= % Lower Scottish Demersal -1.9% Lower 1.7% Higher 7.0% Higher Scottish Demersal -10.3% Improved -8.2% Improved -4.1% Improved Scottish Seiners -11.3% Lower -4.9% Lower 3.8% Higher Beam Trawl -44.2% Lower -43.2% Lower -32.5% Lower Scottish Nephrops 7.2% Higher 7.4% Higher 8.0% Higher 1) See section I.4. 12

13 1. BELGIUM 1.1 Beam trawl over 24 m Segment The segment comprises 60 vessels that combined 19,000 GT and 52,000 kw in It employs 450 fishermen. In 2003, the size of the fleet was stable. The segment contributes to 76% of national landings value. The main target species are sole, plaice and cod. Economic performance of these vessels was stable over the period though they made some loss in The potential value of landings in 2004 proportional to TACs as advised by ACFM, amounts to 62 m which is 11% lower than the average value realised in and about equal to the value expected for Correspondingly, also the earnings of the crew would be 11% lower than during the base period. The owners could expect a gross cash flow that is 15% lower than realised in Mixed fisheries scenarios In all mixed-fisheries scenarios, the economic results are lower compared to the potential results of ACFM-advice. The differences between the results of the 4 scenarios are substantial. The tight Mixed-1 scenario would result in 23% lower landings value and crew share, and the gross cash flow left for the vessel would drop 5% compared to the result in With the much higher TACs in scenario Mixed-4, landings value and crew share would drop 12%, and gross cash flow 3% compared to It was assumed that landings of non-quota species would remain on the level of the base period. If these landings would decline with the reduction of effort applied to the six species considered in the mixed fisheries scenarios, all indicators would show substantially lower results. E.g. the Mixed-1 scenario would result in 34% reduction of landings value and crew share instead of 23%. Scenario 1: ACFM Advice 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 STABLE STABLE STABLE STABLE -1,6% -3,2% -4,7% -0,1% 13

14 Scenario 2: Mixed fishery 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 STABLE STABLE STABLE STABLE -1,6% -3,2% -3,0% -0,1% Scenario 3: Mixed fishery 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 STABLE STABLE STABLE STABLE -1,6% -3,2% -2,7% -0,1% Scenario 4: Mixed fishery 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 STABLE STABLE STABLE STABLE -1,6% -3,2% -3,1% -0,1% Scenario 5: Mixed fishery 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 STABLE STABLE STABLE STABLE -1,6% -3,2% -2,4% -0,1% 14

15 1.2 Beam trawl under 24 m Segment The segment comprises 32 vessels that combined 3,000 GT and 7,000 kw in It employs 96 fishermen. In 2002, one vessel left the fleet. The segment contributes to 15% of national landings value. The main target species is sole. Economic performance of these vessels was stable over the period. The potential value of landings in 2004 proportional to TACs as advised by ACFM, amounts to 11.7 mln which is 12% lower than the average value realised in and 8% lower than the value expected for Correspondingly, also the earnings of the crew would be 12% lower than during the base period. The owners could expect a gross cash flow that is 17% lower than realised in Mixed fisheries scenarios In all mixed-fisheries scenarios, the economic results would be lower when compared to the potential results of ACFM-advice. The differences between the results of the 4 scenarios are substantial. The tight Mixed-1 scenario would result in 24% lower landings value and crew share and the gross cash flow left for the vessel would drop by 17% compared to the result in With the much higher TACs in scenario Mixed-4, landings value and crew share would drop 14%, and gross cash flow would decrease 10% compared to It was assumed that landings of non-quota species would remain on the level of the base period. Scenario 1: ACFM Advice 16,0 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0 STABLE STABLE STABLE STABLE 2,3% 0,5% -1,5% 3,9% 15

16 Scenario 2: Mixed fishery 16,0 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0 STABLE STABLE STABLE STABLE 2,3% 0,5% -1,7% 3,9% Scenario 3: Mixed fishery 16,0 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0 STABLE STABLE STABLE STABLE 2,3% 0,5% -0,6% 3,9% Scenario 4: Mixed fishery 16,0 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0 STABLE STABLE STABLE STABLE 2,3% 0,5% -1,5% 3,9% Scenario 5: Mixed fishery 16,0 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0 STABLE STABLE STABLE STABLE 2,3% 0,5% 0,3% 3,9% 16

17 2. DENMARK 2.1 Trawlers 200 GT. Segment The fleet segment of trawlers over 200 GT comprises only about 125 vessels, but has a 66% share of the total tonnage of the active Danish vessels. The fleets share of the total value of the Danish fishery is above 35%. Up to 70% of the total revenue for the big trawlers came from industrial fishery, and 90% in terms of volume. The most important industrial species are sandeel, sprat, blue whiting and Norway pout, whereas in human consumption fishery, the species of major importance in terms of gross value were: herring and mackerel, northern prawn, plaice, cod and hake. Scenarios The landings of industrial species in volume were stable in , but the revenue increased in 2002 due to good prices. The price of herring, the second most important species for the segment, increased from 2000 to and remained high leading to an overall good profitability for the period Recorded prices of herring in 2003 have decreased substantially relative to the base period, which is not fully foreseen in the model. The situation is expected to become worse for the segment in 2003 relative to the base period. Landing of industrial species in 2003 are recorded to be below last years landings caused by lower catches of sandeel in the first part of the year. The ACFM advice for 2004 will not influence the segment much. The proposals about mixed fisheries management do not influence the segment much as the species subject the mixed species management are not target species for the segment. The fishery is still profitable. The very high landing value for the recovered stock scenario is caused by much higher herring stock abundances in the long run given that the herring stock is allowed to grow. Scenario 1: ACFM Advice STABLE STABLE STABLE STABLE -2.7% -4.3% -3.0% 2.6% 17

18 Scenario 2: Mixed fishery STABLE STABLE STABLE STABLE -2.7% -4.3% -3.3% 2.6% Scenario 3: Mixed fishery STABLE STABLE STABLE STABLE -2.7% -4.3% -3.0% 2.6% Scenario 4: Mixed fishery STABLE STABLE STABLE STABLE -2.7% -4.3% -3.2% 2.6% Scenario 5: Mixed fishery STABLE STABLE STABLE STABLE -2.7% -4.3% -2.9% 2.6% 18

19 2.2 Trawlers < 200 GT Segment The number of vessels in this fleet segment comprises approximately 30% of the economically active Danish vessels and about 23% of the gross tonnage. More than half of the vessels in the segment are smaller than 20 GT. The fishery is mostly for human consumption, with 17-19% of the total value from industrial fishery, however about 70% in volume comes from industrial species. The most important species used to be cod with a 30% share of the total value in the late 90 es but only 20% in Norway lobster is now the most important and account for 31% of the total value of the landings in Fisheries for cod, plaice and Norway lobster have shown a decrease in gross output from has decreased over the last three years, contrary to the 3-years period before. Scenarios The average net profit for the three years period is negative. The forecast for 2003 shows a deteriorating situation relative to the base line period The gross cash flow is only 6 mln, which is far less than required to cover depreciation and interest payments. The ACFM advice for 2004 will deteriorate the situation for the segment relative to 2003 and even more relative to the base period The mixed fisheries proposals will not change the situation much relative to the initial ACFM advice, but still the situation in general has become worse with an expected decline in revenue to approximately 85% of the revenue in The gross value added i.e. the return to labour and capital will drop to a level at around 80% of the period Scenario 1: ACFM Advice UN UN UN STABLE -8.3% -14.0% -16.4% 2.2% 19

20 Scenario 2: Mixed fishery UN UN UN STABLE -8.3% -14.0% -16.5% 2.2% Scenario 3: Mixed fishery UN UN UN STABLE -8.3% -14.0% -14.9% 2.2% Scenario 4: Mixed fishery UN UN UN STABLE -8.3% -14.0% -15.9% 2.2% Scenario 5: Mixed fishery UN UN UN STABLE -8.3% -14.0% -14.4% 2.2% 20

21 2.3 Danish seine Segment The segment is small and accounts for only 7% of the total number of economically active vessels, and only for 3% of the total GRT. The segment fishes solely for human consumption. Plaice and cod are the most important species with a little more than 80% of the total landings in value and in volume. The average size of the seiner is The average size of the seiner is 36 GT which is smaller the average size of trawlers in the segment trawlers < 200 GRT (46 GT). Scenarios The situation for is characterised as stable. But the situation is deteriorating in 2003 mainly due to the worse situation for cod. The plaice quota has increased, but not sufficiently to counterweigh the declining cod fishery. Danish seine will be strongly affected by the ACFM proposal for 2004 and the mixed fisheries proposals. The decline in revenue relative to the base period is around 20%, and the decline in the return to labour and capital (gross value added) is more than 35%. It is worrying that the cash flow (value of landing minus variable costs) is very close to zero. In that case it cannot pay to continue fishing not even in the short run. The negative impact on the segment is strong. Scenario 1: ACFM Advice STABLE UN UN -2.5% -7.1% -15.1% 11.0% 21

22 Scenario 2: Mixed fishery STABLE UN UN -2.5% -7.1% -18.2% 11.0% Scenario 3: Mixed fishery STABLE UN UN -2.5% -7.1% -14.0% 11.0% Scenario 4: Mixed fishery STABLE UN UN -2.5% -7.1% -17.6% 11.0% Scenario 5: Mixed fishery STABLE UN UN -2.5% -7.1% -13.7% 11.0% 22

23 2.4 Gill net Segment The segment is composed of small vessels at approximately 15 GT in average size. The segment constitutes 31% of the total number of economically active vessels, but only 6% in tonnage. The gill netters fish only for human consumption and target a variety of species. Cod is however the most important with around 60% in value in In 2000 constituted cod around 70 % in volume but the share has decreased to around 60% in Plaice, common sole and turbot have become more important increasing from around 20% to 30% in value and from around 15% to 25% in volume. The economic performance of the segment is very poor. In the baseline period the segment has hardly been able to cover the variable costs. The segment has been subject to a 25% reduction in number of vessels in Scenarios It is estimated that the situation for 2003 will become even worse for this segment. This is mainly due to the low cod quotas. The increased flatfish quotas have not been sufficient to alleviate the situation. The segment operates with negative cash flow which means that the variable costs are not covered, and basically it cannot pay to go fishing. Many of the gill netters are operated by only one fisherman the owner, and it is reasonable to assume the he in the short run is willing to accept a lower remuneration of his effort. The negative impact on the Danish gill net fleet of the proposed ACFM advice and the mixed fisheries proposal is very strong. is expected to fall to around 60% of the value of landing for the base period The return to labour and capital is expected to fall to around 50% of the result of The gross cash flow is significantly negative. The vessels are small and the crew is normally 1-2 persons including the owner. The sector as such is not able to continue without significant reduction in the number of vessels. The magnitude of that reduction will be determined by the willingness of the owner to accept much lower income. The calculations are carried out under the assumption that all the quotas allocated to the segment could be exploited. In case the mixed fisheries management puts further restriction on the sector in terms of limiting effort the economic result for the sector will become even worse. Scenario 1: ACFM Advice UN UN UN STABLE -19.6% -31.8% -44.6% 0.5% 23

24 Scenario 2: Mixed fishery UN UN UN STABLE Scenario 3: Mixed fishery -19.6% -31.8% -47.0% 0.5% UN UN UN STABLE Scenario 4: Mixed fishery -19.6% -31.8% -41.2% 0.5% UN UN UN STABLE Scenario 5: Mixed fishery -19.6% -31.8% -45.4% 0.5% UN UN UN STABLE -19.6% -31.8% -39.2% 0.4% 24

25 3. FINLAND 3.1 Trawlers < 24 meters Segment The segment comprised 65 vessels with a gross tonnage of 2.9 thousand GT and engine power of 17.8 kw. The vessels employ some 108 fishermen. The vessels target herring and sprat in the Baltic Sea. It accounts for 40% of total national landings in volume and 25% in value. The economic performance has improved during the last couple of years and in 2002, but not enough to generate a positive net profit. Scenario results for 2004 The scenario used is based on the proposed quotas for the Baltic Sea. Other scenarios for the mixed fisheries are not presented, as the vessels do not participate in that fishery. The performance is expected to improve slightly in 2004, but still be negative in terms of net profit. Scenario 1: ACFM Advice UN -7.1% 2003 UN -26.6% 2004 UN -23.9% Recovered st. UN -24.9% 25

26 3.2 Trawlers > 24 meters Segment There were 21 vessels in this segment with a total capacity of 4.2 thousand GT and 14.1 thousand kw. The vessels employ some 71 fishermen including the skipper-owners. The segment mainly targets herring and sprat in the Baltic Sea, but the segment also includes some demersal trawlers catching cod. The segment accounts for more than 50% of total national landings in volume and 40% in value. has increased during the last years and amounted to 9.6 mln in The net profit was however negative. Scenario results for 2004 The scenario analysed is based on the proposed quotas for the Baltic Sea. Scenarios for the mixed fisheries are not presented, as the vessels do not participate in that fishery. The net profit is expected to be negative also in The performance will however improve slightly. Scenario 1: ACFM Advice STABLE -2.2% 2003 UN -13.7% 2004 UN -12.2% Recovered st. UN -14.6% 26

27 3.3 Gill netters Segment The segment comprised 18 vessels with a total gross tonnage of 0.5 GT and engine power of 3.7 kw in The segment provides employment to 34 fishermen. Main species are salmon and cod caught in the Baltic Sea. has increased the last years. Reported net profit for 2002, however, was negative like in the previous years. Number of vessels has been decreasing for many years, reflecting the bad economic performance for this segment for a long period of time. Scenario results for 2004 The scenario used is based on the proposed quotas for the Baltic Sea. Scenarios for the mixed fisheries are not presented, as the vessels do not participate in that fishery. The operating profit margin is expected to be even more negative than in Scenario 1: ACFM Advice UN -19.6% 2003 UN -23.4% 2004 UN -26.4% Recovered st. UN -19.3% 27

28 3.4 Coastal vessels Segment The segment comprised 253 vessels with a total gross tonnage of 1.3 GT and engine power of 19.5 kw in The segment provides employment to 369 fishermen. The segment is very heterogeneous, catching various species most important being whitefish and pike-perch. In addition quota species like herring and salmon are also caught. The net profit has been rather stable the last years except for 2002 when there was a marked decrease in revenues, but the profitability deteriorated proportionately less. Scenario results for 2004 The scenario used in the analysis is based on the proposed quotas for the Baltic Sea by the IBSFC. Scenarios for the mixed fisheries are not presented, as the vessels do not participate in that fishery. The value of landings and the net profit margin will stay more or less the same in 2004 as in the year before. Scenario 1: ACFM Advice % % % Recovered st. 26.4% 28

29 4. FRANCE 4.1 Atlantic bottom trawlers Segment The bottom trawlers represent the most important segment of the French fleet. This fleet consisted of 581 vessels with a total engine power of 229,000 kw at the end of This represents a decrease of -11% in vessel number and -9% in terms of kw compared to Total employment of this segment was around 3600 persons in The fleet provided an estimated 40% of the national landings by value. Target species are mainly anglerfish (12%), nephrops (11%), cod (7%) and saithe (6%) but also cephalopods for 10% of total revenues. However, targeted species are very different between vessels because the fleet is distributed along the French Atlantic coast. The economic performance of this segment is considered as profitable and has improved until 2003 because of the increase in gross revenues and the decline in fuel costs. Scenario results for 2004 The ACFM advice leads to an increase in national quotas for anglerfish (+34%) and haddock (+56%) but significant decreases for whiting (-43%), hake (-55%) and cod (-89%). The nephrops quotas remain stable compared to The implementation of such quotas would probably lead to different economic effects amongst bottom trawlers, depending on the vessels capacity to switch from an area or a targeted species to another. This is questionable when trawlers operate in mixed fisheries. The economic impact of quota changes is limited according to the simulation. The changes in quotas would lead to a slight decrease in gross revenue (-2%) but the increase in gross cash flow would reach 4% due to the reduction in variable cost. The effort of the fleet would have to decrease according to quota adjustment and because of SSB recovery especially for anglerfish. There is a limited number of bottom trawlers operating in the North Sea and Irish Sea which are concerned by the mixed scenarios. Their economic impact could be high depending on the adjustment of cod, sole, and plaice quotas. The overall effect would be quite limited for the entire fleet compared to the ACFM advice. Recovered Stocks In a situation of recovered stocks there would be a 22% improvement in the value of fleet landings and crew share compared to A 92% improvement in net profit would provide an operating profit margin of 17.9%. Scenario 1: ACFM Advice % 11.3% 11.9% 17.9% 29

30 Scenario 2: Mixed fishery 450,0 400,0 350,0 300,0 250,0 200,0 150,0 100,0 50,0 0,0 12,7% 11,3% 10,5% 17,9% Scenario 3: Mixed fishery 450,0 400,0 350,0 300,0 250,0 200,0 150,0 100,0 50,0 0,0 12,7% 11,3% 11,7% 17,9% Scenario 4: Mixed fishery 450,0 400,0 350,0 300,0 250,0 200,0 150,0 100,0 50,0 0,0 12,7% 11,3% 11,5% 17,9% Scenario 5: Mixed fishery 450,0 400,0 350,0 300,0 250,0 200,0 150,0 100,0 50,0 0,0 12,7% 11,3% 12,0% 17,9% 30

31 4.2 Atlantic netters Segment Atlantic netters are the third most important fleet in France. 433 vessels were involved in the fleet at the end of 2002, for a total engine power of 76,000 kw. This represents an increase of 5% in vessel number and total engine power compared to The total employment of the segment was around 1590 crew members in The fleet provided an estimated 12% of the national landings by value. Sole was the main species harvested by netters in 2002 and accounted for about one third of the value of landings. Hake and anglerfish represented each 7%. Many other various species such as bass, pollack or turbot constitute the rest of the value. The most important fishing areas are located in the Bay of Biscay (VIIIab) and in the English Channel (VIIde). The economic performance of this segment is reported as profitable and has improved until Scenario results for 2004 The ACFM advice leads to sharp reduction in the national quotas of sole (-22%), hake (-55%) and cod (-89%) and to a significant increase for anglerfish (+34%) compared to The implementation of such quotas would probably lead to different economic effects amongst this fleet, depending on the vessels capacity to switch from an area or a targeted species to another. Moreover, the quota reductions are not spread homogenously between management areas. As the 100% rate of quota consumption is not reached for all species, the economic impact of quota reductions on the netters fleet considered as a whole is limited. The ACFM single stock scenario would result in deterioration in gross revenue to -15% but the fleet would have to decrease effort and consequently running costs. Despite a decrease in the level of activity, crew share, gross cash flow and net profit indicators would remain at satisfactory levels. Around 8% of the netters vessels operates in the North Sea and are concerned by the mixed scenarios. The economic impact of the mixed scenarios could be high for this part of the fleet according to the adjustment of cod, sole, and plaice quotas. The overall effect would be quite limited for the entire fleet compared to the ACFM advice. Recovered Stocks In a situation of recovered stocks there would be a 10% improvement in the value of fleet landings and crew share compared to A 35% improvement in net profit, would provide an operating profit margin of 19.3%. Scenario 1: ACFM Advice % 15.8% 12.0% 19.3% 31

32 Scenario 2: Mixed fishery 120,0 100,0 80,0 60,0 40,0 20,0 0,0 18,3% 15,8% 12,0% 19,3% Scenario 3: Mixed fishery 120,0 100,0 80,0 60,0 40,0 20,0 0,0 18,3% 15,8% 11,9% 19,3% Scenario 4: Mixed fishery 120,0 100,0 80,0 60,0 40,0 20,0 0,0 18,3% 15,8% 11,8% 19,3% Scenario 5: Mixed fishery 120,0 100,0 80,0 60,0 40,0 20,0 0,0 18,3% 15,8% 11,3% 19,3% 32

33 5. NETHERLANDS 5.1 Beam trawlers <= 24 m Segment The segment comprises 173 Eurocutter vessels that combine 13,600 GT and 38,000 kw in It employs 575 fishermen. In 2003, 10 vessels joined this fleet, kws increased by 5% and employment by 11%. The segment contributes 15% to the national landings value. The main target species are shrimp and sole. Economic performance of these vessels was stable over the period though it made some loss in The potential value of landings in 2004 proportional to TACs as advised by ACFM, amounts to 57 m, which is 8% lower than the average value, realised in and about equal to the value expected for Correspondingly, also the earnings of the crew would be 8% lower than during the base period. The owners could expect a gross cash flow that is 28% lower than realised in Mixed fisheries scenarios In all mixed-fisheries scenarios, the economic results are lower when compared to potential results of ACFM-advice. The differences between the results of the 4 scenarios are substantial. The tight Mixed-1 scenario would result in 30% lower landings value and crew share, and the gross cash flow left for the vessel would drop 80% compared to the result in With the much higher TACs in scenario Mixed-4, landings value and crew share would decrease 13%, and gross cash flow would go down 30% when compared to It was assumed that landings of non-quota species would remain on the level of the base period. Scenario 1: ACFM Advice 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 STABLE STABLE STABLE 3,5% -1,4% -2,2% 7,4% 33

34 Scenario 2: Mixed fishery 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 STABLE STABLE UN 3,5% -1,4% -16,4% 7,4% Scenario 3: Mixed fishery 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 STABLE STABLE UN 3,5% -1,4% -9,4% 7,4% Scenario 4: Mixed fishery 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 STABLE STABLE UN 3,5% -1,4% -12,3% 7,4% Scenario 5: Mixed fishery 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 STABLE STABLE STABLE 3,5% -1,4% -2,3% 7,4% 34

35 5.2 Beam Trawlers > 24m Segment The segment comprised 141 large beam trawlers that combine 61,100 GT and 233,000 kw in It employs 991 fishermen. In 2002, 12 vessels left the fleet, kw dropped by 8% and employment by 6%. The segment contributes 48% to the national landings value. The main target species are sole and plaice. Economic performance of these vessels was stable over the period, though loss-making in ACFM advice for 2004 The potential value of landings in 2004 proportional to TACs as advised by ACFM, amounts to 175 m, which is 15% below the average value, realised in and about equal to the value expected for Correspondingly, also the earnings of the crew would be 15% lower than during the base period. The owners could expect a gross cash flow that is 55% lower than realised in Mixed fisheries scenarios In all mixed-fisheries scenarios, the economic results are lower when compared to potential results of ACFM-advice. The differences between the results of the 4 scenarios are substantial. The tight Mixed-1 scenario would result in 60% lower landings and crew share, and the gross cash flow left for the vessel would drop by 70%. With the much higher TACs in scenario Mixed-4, landings value and crew share would be 30% lower, and gross cash flow would fall 55% compared to It was assumed in the calculations that the landings of non-quota species will remain on the level of the base period. If these landings go down with the reduction of effort applied to the six species considered in the mixed fisheries scenarios, all indicators would show substantially lower results. E.g. the Mixed-1 scenario would result in 75% reduction of the landings value compared to , instead of 60%. Scenario 1: ACFM Advice 250,0 200,0 150,0 100,0 50,0 0,0 STABLE UN UN 0,3% -8,7% -10,8% 11,2% 35

36 Scenario 2: Mixed fishery 250,0 200,0 150,0 100,0 50,0 0,0 STABLE UN UN 0,3% -8,7% -30,6% 11,2% Scenario 3: Mixed fishery 250,0 200,0 150,0 100,0 50,0 0,0 STABLE UN UN 0,3% -8,7% -16,4% 11,2% Scenario 4: Mixed fishery 250,0 200,0 150,0 100,0 50,0 0,0 STABLE UN UN 0,3% -8,7% -21,5% 11,2% Scenario 5: Mixed fishery 250,0 200,0 150,0 100,0 50,0 0,0 STABLE UN UN 0,3% -8,7% -7,0% 11,2% 36

37 6. SWEDEN 6.1 Pelagic trawlers/purse seiners >= 24 m Segment In 2002 there were 58 pelagic trawlers in this segment. They comprised only 3% of the Swedish fleet by numbers, but accounted for close to 50% of total gross tonnage and 30% of the engine power. The segment provided work for 348 men at sea, which is 15% of the total employment in the Swedish marine fishing fleet. The segment contributed to almost 90% of total volume of landings and little less than half of the value in The value of landings reached 54 mln in 2002, which was more than 10% lower than the year before. The gross value added as share of value of landings was reasonably high, 50%, and amounted to 27 mln. Scenario results for 2004 Based on the TAC:s for herring, sprat and cod in the Baltic Sea proposed by the IBSFC, value of landings and gross cash flow are expected to rise slightly in 2004 compared to In relation to the base-period , however, there will be a deterioration of more than 40%. Scenario 1: ACFM Advice % % % Recovered st. 26.7% 37

38 Scenario 2: Mixed fishery % % % Recovered st. 26.7% Scenario 3: Mixed fishery % % % Recovered st. 26.7% Scenario 4: Mixed fishery % % % Recovered st. 26.7% Scenario 5: Mixed fishery % % % Recovered st. 26.7% 38

39 6.2 Shrimp trawlers Segment In 2002 the segment comprised 56 vessels with a total capacity of 4.6 thousand GT and 17.9 thousand kw. Capacity was reduced by 18% due to a scrapping campaign in 2001, leading to an increase in value of landings per vessel by 22% in The segment provided work for 168 men at sea. The fishery mainly targets shrimp (pandalus borealis) but catches also include nephrops, cod and other demersal species. Shrimp constituted 76% of total revenue in The value of landings reached 12.1 mln in The gross value added as share of value of landings was reasonably high, 50%, and amounted to 6 mln, which was lower than in the previous years Scenario results for 2004 Catches and revenues are expected to decrease compared to the base period due to the situation for cod in the Skagerrak and Kattegat. Catches of prawn (pandalus borealis) are expected to remain at the same level as in previous years. Scenario 1: ACFM Advice % % % Recovered st. 33.7% 39

40 Scenario 2: Mixed fishery % % % Recovered st. 33.7% Scenario 3: Mixed fishery % % % Recovered st. 33.7% Scenario 4: Mixed fishery % % % Recovered st. 33.7% Scenario 5: Mixed fishery % % % Recovered st. 33.7% 40

41 6.3 Trawlers >= 24 m Segment In 2002 there were 18 vessels in this segment with a total capacity of 3.9 thousand GT and 11.3 thousand kw. The segment provided work for 81 men at sea. The most important species is cod representing 62% of total volume and 69% of total value. Other important species are saithe and haddock. In 2002, value of landings reached 9 mln, which was a decrease by 25% compared to the year before. The lower volume of landings was also reflected in gross value added in 2002, amounting to 4.8 mln, a decrease by more than 30% compared to Scenario results for 2004 Net profit is expected to decrease further due to the proposed quotas for cod in the Baltic Sea by the IBSFC. If the advice from the ACFM is followed as regards the North Sea, the Skagerrak and the Kattegat the economic performance for the segment as a whole will deteriorate further. Operating profit margin will vary from 16.3% up to 19.2% depending on scenario. In all cases net profit will be lower than in the base-period Scenario 1: ACFM Advice % % % Recovered st. 33.1% 41

42 Scenario 2: Mixed fishery % % % Recovered st. 33.1% Scenario 3: Mixed fishery % % % Recovered st. 33.1% Scenario 4: Mixed fishery % % % Recovered st. 33.1% Scenario 5: Mixed fishery % % % Recovered st. 33.1% 42

43 6.4 Trawlers < 24m Segment In 2002 there were 61 vessels in the segment with a total capacity of 4 thousand GT and 18 thousand kw. The segment provided work for 183 men at sea. The most important species is cod representing 75% of total volume and 66% of landed value. Other species are nephrops, saithe and haddock. Total value of landings reached 12 mln and gross value added 6 mln in The vessels could, to some extent, in 2002 replace the reduced quotas in the Baltic Sea, by catches of other species. Prices were also favourable. Scenario results for 2004 Net profit is expected to decrease due to the proposed quotas for cod in the Baltic Sea by the IBSFC. If the advice from the ACFM is followed as regards the Skagerrak and the Kattegat the economic performance will deteriorate further. Operating profit margin will vary from 9.8% up to 12.5% depending on scenario. In all cases this figure will be substantially lower than in the baseperiod Scenario 1: ACFM Advice % % % Recovered st. 28.8% 43