Economic sustainability of the European Seafood industry

Transcription

1 Economic sustainability of the European Seafood industry Advanced Lessons in Fisheries and Aquaculture Economics. 3rd edition Santiago de Compostela, 2015 Bertrand Le Gallic AMURE University of Brest - France

2 Who I am? (Fisheries) Economist a the Unit Research Group AMURE (University of Brest / UBO+ Ifremer) President of the European Association of Fisheries Economists (EAFE).

3 Structure of the presentation 1. The challenges faced by the EU Seafood sector (fisheries and aquaculture) - Global picture - Specific challenges 2. The H2020 project SUCCESS project: a project to consolidate the Competitiveness and Economic Sustainability of the European Seafood sector 3. Some preliminary examples of what SUCCESS is doing (according to the timing)

4 1. The challenges faced by the EU Seafood sector (fisheries and aquaculture) The Global Picture (see the other presentations) State of the stocks (environmental sustainability) Source: DG MARE, 2014

5 Economic sustainability: the EU Member States economic performances indicators Source: DG MARE, 2014

6 Economic (& social) sustainability: EU Member States economic performances indicators February 2014: vessels Around fewer than in 1995 Source: DG MARE, 2014

7 The Big Picture Shortage of (qualified) labor in (some) European countries (Social sustainability) Europe (especially the EU) consumption depends on imports The demand for seafood products is increasing worldwide and in Europe, and should continue to increase opportunity European Seafood producers (capture fisheries and aquaculture) are competing on the global markets: inputs And outputs Under current trade agreement, European Seafood producers are not able to reap the full benefits of the seafood market

8 Revenue Side Specific Challenges Quantity 1: limits for the supply from marine fisheries (despite improvements in some stocks e.g. Hake, Plaice, Sole in some places ) Quantity 2: (some) limits for the supply from aquaculture inshore (e.g. space & quality of the marine environment) Offshore (e.g. cost and risk) Inland (e.g. regulatory constraints)

9 Revenue Side (cont.): price Competition with imports products (esp. aquaculture see Gunnar s speech again) AND the difficulty to differentiate (European) products wild (see Gunnar s talk) aquaculture State of the general economic situation and disposable income for seafood products Market power of the retailing groups (in some countries)

10 Cost Side Fuel cost (esp. fisheries) Energy cost (aquaculture) - Luz Feed cost (SOME type of aquaculture) - Regulatory costs (social and environmental standards; adjustment costs e.g. Landing Obligations)

11 Need for improving competitiveness of the European seafood sector Concern for local / National / EU administrations European focus; could apply to other places (see Gunnar and Frank; talks) EU Level: H2020 program Blue Growth (BG) agenda The H2020 SUCCESS project aims at improving the competitiveness and the economic sustainability of the European Seafood sector.

12 SUCCESS Strategic Use of Competitiveness towards Consolidating the Economic Sustainability of the european Seafood sector Coordinator Bertrand Le Gallic AMURE University of Brest - France This project has received funding from the European Union s Horizon 2020 research and innovation programme under grant agreement No

13 Note: what is competitiveness Ragnar Arnason, 2015, SUCCESS Working Document Basic economic theory does not offer a clear definition of competitiveness (Spence and Hazard 1988, Aiginger 2006). As a result the concept is used in various connotations and there is considerable obscurity as to its precise meaning. This obscurity, not surprisingly, has sometimes been exploited by politicians prompting the Nobel laureate, Paul Krugman, to talk about the "dangerous obsession with competitiveness" (Krugman 1994)

14 Note: what is competitiveness In general ability of to produce a commodity at a lower cost or sell it at a higher price than a competitor (see Gunnar Knapp talk about the salmon competition ) Short run: minimum profitable level Long run: necessitate appropriate investment Capital (skilled) Labor (see Training Centers in Galicia + age of the captain Roy / José-Luis) Innovation Market Natural resource

15 Consortium overview 4 Universities 7 National Fisheries / Marine Institutes (data provision) 8 Industry partners (producers fisheries and aquaculture; trading companies - tests) 5 Consultancy companies (market analysis; value chain; software / web development) + Stakeholders (External Experts Advisory Board - EEAB; End-Users and Stakeholder Group - EUSG) Website:

16 Project general description 5 m - 3 years What is the project about? Improving the competitiveness of the European fisheries and aquaculture industries Increasing the value of European fisheries products Increasing the demand for European fisheries products What are the main objectives? analyse the present and expected future bottlenecks for competiveness of European fisheries and aquaculture sectors (= the challenges). investigate the potential for new markets and marketing tools to increase revenue identify innovations to improve efficiency and reduce production costs

17 Tracks for improving competitiveness of the European seafood sector - 1 Improving the awareness (what is a fish?) Consumer: Understanding and informing about the origin of the product Understanding and informing about the quality of the product (see Roy story about surimi crab products) Knowledge of how to use the product (e.g. Spider crab story; trials in Greece for testing new mussel products - vs the artificially colored Alaska Salmon) Understanding the impact of collective representation on consumption patterns Retailers; Out-of-Home consumption (e.g. schools; army; canteens)

18 Tracks for improving competitiveness of the European seafood sector - 2 Alternative / innovative markets: Direct selling ( niche markets but big one) Export markets (e.g. Middle and Far East):

19 Local illustration of the Context Emirates Mall King scallops 170 AUD - 34

20 Local illustration of the Context Emirates Mall Queen scallops 152 AUD 30

21 Other examples

22 Other examples

23 Tracks for improving competitiveness of the European seafood sector - 2 Alternative / innovative markets: Direct selling ( niche markets but big one) Export markets (e.g. Middle and Far East): Investigating new European markets for (local) traditional products (e.g. plaice; mussels)

24 Tracks for improving competitiveness of the European seafood sector - 3 Certifications schemes (UC) remember Jackye s group activity Denomination of origin Organic product MSC (sole, sardines ); Friends of the Earth; Global G.A.P (for trout farms?), ASC Label Rouge (salmon; scallops) Local labelling schemes (

25 Tracks for improving competitiveness of the European seafood sector - 4 Improving / promoting production methods Netherlands: new pulsing vessels Switch in gear (sole netters) Aquaculture (trout, carp, mussel, seabream & seabass, shrimp - recirculation) Stock enhancement / Hatcheries (scallops; abalone in France; 4 in Galicia for mollusc? Arturo Sylva)

26 Tracks for improving competitiveness of the European seafood sector - 5 Identifying and popularizing innovations Technical innovations: UNIPA (processing / lifespan), Poland (aquaculture / fileting), Flash Codes; innovating raft for mussel? (Ursula / Rodrigo) Institutional Management: Cooperation: UNISA (market power) Quota management: PMA Market Oriented management Reform of the Common Market Organisation production & marketing plans Marketing: acceptance of new products

27 Tracks for improving competitiveness of the European seafood sector - 7 Improving (the efficiency of) regulatory frameworks / conditions Fisheries: inflexible regulations still exist is some places (Gunnar) identifying the cost of such regulations identify / propose some alternative strategies (Best Practices) Aquaculture : unlevelled playing field (Luz) identifying the cost of such regulations identify / propose some alternative strategies (Best Practices)

28 Tracks for improving competitiveness of the European seafood sector - 8 Understanding and capitalizing on the Non-Market Values General definition: values generated by the seafood sector for the benefits of the society BUT not captured (=internalized) by the seafood sector; Positive External effects or Externalities E.g. values associated with the preservation / management of biodiversity see José-Luis speech about ecosystem services

29 Non-use values Use values The starting point: The concept of Total Economic Value The direct use value is the value associated with the direct use of fishing vessels The indirect use value is the value of fishing vessels as a support to other associated economic activities Induced value= Jobs created by the consumption of households receiving income through direct and indirect jobs in the fishing industry option value: Keeping a fishing fleet may also be valued for its potential to be available in the future The existence value reflects benefits from simply knowing that a certain good or service exists. The bequest value results from individuals placing a high value on the conservation of the good or service considered for future generations to use

30 The Total Economic Value (TEV) framework applied to a fishing fleet Use value Non-use value Direct use value Indirect use value Option value Existence value Bequest value Food production Education support Maintain of local upand down-stream fishing sector Tourists attractiveness Keeping a fishing fleet (and the know-how) to have the possibility to use it in the future Satisfaction to know that there are fishing vessels in the territory Preservation of the cultural heritage Pescatourism Guided tours Maintaining a social link in Collect of marine Artistic activities fishing debris (painting, pictures, ) communities Safety at sea Information on the marine environment Values associated to the spending of the incomes generated by direct and indirect fishing activities within the local economy Education Support Image of the territory

31 One example: Assessing the Economic Contribution of Fishing to Tourism + additional work on the relationships between the fishing and the tourism sector how could the presence of fishing activities in a place be better used to attract tourists Opportinities for Territorial Branding

32 Induced economic effects of fishing activities to the tourism sector Aim To assess expenditures from people coming in an area because of the coastal fishing identity in order to measure the positive externality : If coastal fishing activity disappears in an area, how much would be the economic losses to the local economy?

33 Induced economic effects of fishing activities to the tourism sector Methodology DGCIS methodology fitted to our research issue «Measure of the economic effect of tourist event», April 2012 Use of a survey to assess : - Expenditures realised in the city - by outside visitors coming because of the fishing identity

34 Induced economic effects of fishing activities to the tourism sector Methodology 1. Surveys results academic use Exp total annual number of tourists in the area x % of tourists present because of the area fishing identity x average number of present because of staying the area days of fishing tourists identity x daily exp. per tourist present because of the area fishing identity

35 Induced economic effects of fishing activities to the tourism sector Methodology 2. Practical information about the survey Use of quotas to ensure sample representativeness Statistics on city s tourist population needed Questionnaire divided into 4 steps : 1. Interviewee s features 2. Stay Description 3. Stay Motivation 4. Stay Expenditures 2 key questions to identify tourists motivated by the area fishing identity

36 Induced economic effects of fishing activities to the tourism sector Are you on the sea port to see fishing boats? Methodology YES NO If they weren t fishing boats here any more, would you still be here today? If they weren t fishing boats here any more, would you still be here today? YES NO NO Restrictive scenario Lax scenario YES NO

37 Induced economic effects of fishing activities to the tourism sector Results French Case o Le Conquet Sample : 385 surveys Daily expenditures per tourist Number of staying days % of tourist coming because of the fishing identity Annual number of tourists Economic losses to the tourism sector Restrictive scenario 53 surveys , % Lax scenario 71 surveys , %

38 Induced economic effects of fishing activities to the tourism sector Results French Case o Port-en-Bessin Sample : 392 surveys Daily expenditures per tourist Number of staying days % of tourist coming because of the fishing identity Annual number of tourists Economic losses to the tourism sector Restrictive scenario 85 surveys % Lax scenario 122 surveys %

39 Induced economic effects of fishing activities to the tourism sector Results English Case o Hastings Sample : 480 surveys Daily expenditures per tourist Number of staying days % of tourist coming because of the fishing identity Annual number of tourists Economic losses to the tourism sector Restrictive scenario 22 surveys % Lax scenario 35 surveys %

40 Other links between the seafood sector and tourism Fisheries and Tourism synergies in Cornouaille (Bro Kernev) in Brittany Potential for developing a Galician Case Studies?

41

42 Territorial Marketing: Finistère case study Emblematic feature of Cornouaille through Appelation and Labels :

43 Case study : Fisheries and Tourism synergies in Cornouaille (Bro Kernev) in Britanny

44 Concarneau : La Transat Ag2r-La Mondiale

45 «La Douëlannaise restaurant» Éric Grobsheiser converts his «creperie» to a seafood restaurant Cook only with fresh fish or organic fish Original recipes : line-caught sea bass filets dive in the rosemary, cassolette of lobster, etc. The chief cook relies on fresh food it s a happiness to prepare fishes caught the same day: let us not miss on that!

46 «Toques et bus» Anne Tréguer leads cooking workshops aboard a bus Anne Tréguer : «France Filière Pêche» ambassador In her bus, she teaches culinary workshop Promotion of a healthy and a creative cooking Bus : closer from targeted public and a atipical place to cook Events (May 2014) : cook fish and seaweeds for enjoying different flavours She tries to have some partnerships with Audierne s and Guilvinec Fish auctions for her business

47 Cultural Center of Loctudy Cook workshop with a «top Chef» Cultural program : discover the cooking of seafood products, M. Eric Simon (a top chef) : share his passion of cooking fresh fish and seafood during this culinary workshop This event allow to value the seafood products through the coming of this top chef

48 AOCD «La Mer par Excellence» («Tipically Sea») It s a local agency aims to bring tourist information updated on the West Cornouaille area scale La Mer par Excellence : to value this strong identity, to receive visitors in more comfort at a maritime level This network : Create a real economic, social, cultural gateway, between the tourist stakeholders and the maritime sector Tourist : to arouse the desire to live a "maritime experience in this specific maritime area ("qualified people" & Partners ) In 2015 Eductours to promote the La Mer par Excellence network

49 HALIOTIKA- «La Cité de la Pêche» A modern and interactive discovery centre to see the real fishing universe Located over the Guilvinec s Fish auction Visits: fish markets, port visits, fishermen exhibitions, board visit Worshops : tasting workshops, cooking workshops, seaweed workshops A seaview terraces from where you can leisurely watch the unloading of the catch A range of partners

50 Conclusion (now?) SUCCESS: a tool for improving the competitiveness of the European Seafood sector For the benefits of European producers consumer traders and retailers Not against non-european countries Importation will be still needed Matter of market differentiation (= classic economic process wine; clothes)

51 Thank you for your attention And special thanks to the organizers for this opportunity FAO Government of Galicia Cetmar Partners from the University of Cantabria