Less boats. more fish? Socio-economic consequences of fleet capacity reduction programmes in the Baltic Sea

Transcription

1 Less boats more fish? Socio-economic consequences of fleet capacity reduction programmes in the Baltic Sea

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3 Less boats more fish? Socio-economic consequences of fleet capacity reduction programmes in the Baltic Sea October 2009 WWF Poland

4 Less boats more fish? Socio-economic consequences of fleet capacity reduction programmes in the Baltic Sea Authors: Dr. Emil Kuzebski, Dr. Bogusław Marciniak Sea Fisheries Institute in Gdynia Kołłątaja 1 Street Gdynia Graphic design: Przemysław Miłosz Editing: Ewa Milewska, Piotr Prędki Publisher: WWF Poland Wiśniowa 38 Street Warsaw Phone: Fax.: WWF Poland WWF Poland would like to express its gratitude to the dockyard Parsęta S.C. T. Jawdyk & M. Cieślak with headquarters in Kołobrzeg, Stoczniowa 14 Str. for the permission to use the photographs free of charge. Cover photos: WWF / E. Kuzebski, G. Okołów The publication is also available at: WWF Poland is solely responsible for the content of this publication.

5 Table of contents Executive summary Introduction The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries Fishing fleet capacity management in the framework of the Common Fisheries Policy Changes in the fishing capacity of the Baltic countries between Impact of the FIFG on the changes in fleet size in the Baltic countries between Financing the Baltic fleet restructuring programmes The fishing capacity reduction in the framework of FIFG Age of the fleet withdrawn under FIFG Impact of scrapping on the size of Baltic catches...32 Chapter s summary Results of the vessel decommissioning under FIFG in Poland Conditions for the functioning of the Polish fleet in the Baltic Sea between 2004 and Impact of structural funds on the reduction of fishing capacity of the Polish Baltic fleet Principles of the fleet reduction programme Impact of FIFG on the changes in fishing capacity of the Baltic fleet between Changes in the number, tonnage and power of the fishing fleet Impact of fleet restructuring on the fishing intensity Impact of fleet restructuring on the size of Polish catches in the Baltic Socio-economic effects of fleet scrapping...54 Chapter s summary Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries Introduction Research methodology Opinions of fishermen who took part in the programme of vessel decommissioning as well as representatives of local administration authorities of coastal districts. Research report The opinions of representatives of local administrative authorities on the decommissioning programme The programme of fishing capacity reduction through permanent withdrawal of fishing vessels from fishing operations in the opinion of representatives of the Sea Fisheries Institute in Gdynia, regional office of the Agency for Restructuring and Modernisation of Agriculture, representatives of fishermen s organisations and a representative of a regional museum located in a coastal district Conclusions...91

6 5. Description of the vessel withdrawal plan in the framework of the European Fisheries Fund Operational Programme Reduction of the fishing capacity of the Polish Baltic fleet The costs of reduction of the fishing effort of the Polish Baltic fleet Assessing the efficiency of fishing effort reduction Chapter s summary Conclusions List of graphs List of tables Bibliography

7 Executive summary Between 2000 and 2007, the fishing capacity adjustment programme, carried out through the scrapping of fishing vessels, was continued. 9% of the tonnage was withdrawn in the old EU member states that conduct fishery in the Baltic Sea (Germany, Denmark, Sweden and Finland). The fleet reduction in the new member states (Poland, Lithuania, Latvia and Estonia) amounted to 15% of GT of the vessels registered in The above changes were possible by spending considerable funds from the EU budget and national budgets, in total amounting to 187 million euro, that equalled to about 1/5 of the value of annual catches of these countries. The fleet reduction programmes implemented in the new member states were particularly expensive. The costs of fishing capacity adjustment of the Polish fleet were almost double the annual income generated by fisheries. Similarly high costs could be noted in Lithuania and a bit lower in Latvia (approximately 80% of the value of annual catches). The expenditures related to scrapping of fishing vessels were one of the highest cost positions in the structural programmes under the FIFG implemented in these countries. Generally the highest costs of compensations were incurred in the new EU member states. The amount of compensations was not correlated to the actual income generated by different fishing fleets. The funds spent on scrapping of Polish fishing vessels were almost twelve times higher than the increase of the value of cash flow noted between 2004 and 2007 and at the same time six times higher than the GCF (Gross Cash Flow) of the fleet achieved in The adoption of the maximum compensation rates allowed by the European Commission, far from the economic reality of the national market caused an increase in the cost of invested capital, a decrease of the capital flow and therefore the effectiveness of the invested capital and an increase of expectations in relation to future compensations. 5 The highest level of fishing fleet reduction, achieved by scrapping, occurred in Poland. Until the end of 2008, the fishing fleet reduction in Poland resulted in the removing of 440 fishing vessels that had conducted fishing activities in the Baltic Sea, of a power of 59 thousand kw and a tonnage of 17.5 thousand GT from the register. This equalled to 34% of the number, 43% of the power and as much as 47% of the tonnage of Baltic vessels registered at the day of accession of Poland to the EU. The reduction of fishing capacity, to the extent that had far never occurred in the history of the Polish Baltic fishery, was the biggest such programme carried out in recent years in countries that conduct fishing activities in the Baltic Sea and in the entire EU. New member states, including Poland, were granted a considerable independence in setting the objectives of fleet restructuring as well as in their implementation with the use of the EU structural funds. Experience shows that the fishery administration was not always well prepared to accomplish the objectives set in the framework of the FIFG. The main problem facing the Polish fishery was an excess in the fishing capacity of the cod fleet. After the the programme completion, the problem has remained unsolved. If part of the money were used for scrapping the pelagic fleet were used for scrapping the cod fleet the focus of decommissioning would be more rational. The lack of clear division of the Polish fleet into vessel segments and lack of focusing the fleet reduction on particular segments (cod vessels) was the basic mistake made in the implementation of the FIFG between 2004 and On the other hand, the unjustified reduction of the capacity of pelagic fleet resulted in an impossibility to fully utilise the catch limits of herring and sprat allocated to Poland.

8 The programme aimed at restructuring of the fleet through the reduction of fishing capacity will be continued in the coming years. The funds planned under the EFF between for measures aimed at adapting the Baltic fleet to the available resources amount to approximately 370 million euro. Poland has a dominant share in the total funding for the Baltic countries amounts - as much 61%, much more than for Denmark (11%) or Sweden (6%), two other countries with the biggest fleet in the Baltic Sea. The amount of the average financial aid for sea fisheries in in Poland is twice higher than the value of the income generated by the sector in The planned amount of funding for measures aimed at fishing fleet adaptation in is 225 million euro (Priority Axis I). Half of this amount consist of funding allocated to permanent as well temporary withdrawal of vessels from fishing activities. Relatively permissive access criteria to funding applied in the selection of vessels for scrapping between 2004 and 2006 have been further softened in the programme for the years Among others, the criterion establishing the minimum fishing activity of a vessel has been surrendered (75 days per year in the previous programme). The possible scrapping scenarios in the coming show that the so adopted permissive, unrestricted access to the programme for every vessel is neither effective from the point of view of the programme s costs nor for the reduction of the cod effort. It shall not remarkably contribute to the decrease of the average age of vessels. It may however have important negative social consequences (excessive reduction of workplaces). 6 Social costs of the fleet reduction, although difficult to quantify, should not be omitted in the assessment of fishing capacity reduction programmes. This publication presents, among others, the results of the research project, carried out in the Sea Fisheries Institute, aimed at assessing the implementation of the programme of permanent withdrawal of fishing vessels from fishing activities by those fishermen who had voluntarily decided to use the opportunity to scrap their vessel and also by those for whom this decision meant a temporary or permanent cessation of work in fisheries. The publication also presents the socio-economic impact of programme s implementation for the inhabitants of coastal fishing communities for whom the fishery has been an important source of income and an important element of their culture.

9 1. Introduction Dr. Emil Kuzebski, Dr. Bogusław Marciniak Photo: WWF / A. M. Bieniecka

10 1 During the period of unlimited access to the fishing grounds, fishery restricted only with technological measures, developed at the rate permitting to double the volume of catches over ten years. Such expansive exploitation lasted until the beginning of the seventies. The introduction of the new law of the sea (UNCLOS -1982) finally established the division of the world s fishing grounds and created the basis for the new management regime of fish resources. Approximately 90% of the fishing grounds had gained an owner and part of the fleets had to leave the grounds so far exploited or leave fishery for good. This has not resolved the problem of overcapacity. The problem of overcapacity has even become more severe in some countries, especially where the fishing fleets had developed disproportionately to the available resources. The Polish fishery could serve as an example. The Baltic fishery, exploited by a restricted number of fleets from coastal states, has concentrated the problems of excessive fishing capacity that existed in the world s fishing grounds. The existence of expansively developed fleets from the East European socialist bloc, managed far beyond economically sound principles and not free from political goals made the problem of the excessive fishing capacity especially severe in the Baltic. Low effectiveness of fishing on one side and fisheries subsidies on the other caused its rapid expansion. Another factor influencing the lack of balance between the fishing effort and the size and state of the resources was related to sometimes very rapid changes of the environmental conditions, to which fishing capacity could hardly be adapted. 8 For many years the problem of excessive fishing capacity in the Baltic remained unresolved, causing new problems (e.g. illegal and unreported catches). The accession of four Baltic countries to the European Union (Poland, Lithuania, Latvia and Estonia) in 2004 and thus the adoption of the principles of the Common Fisheries Policy by these countries caused a systematic approach to the problem of fleet overcapacity mainly through vessel scrapping programmes. The reduction of excessive fleet capacity through buyback programmes (the state buys back the vessels from the owners) is a well known method widely used in the world (e.g. in the United States, Canada, Taiwan and Japan) 1, aimed at reducing the number of vessels engaged in fisheries. The fishing capacity of the Polish fleet fishing in the Baltic Sea is too high in relation to the available resources, which makes exploitation of the living marine resources a threat to the environment and substantially reduces the effectiveness of fishing. 2 Such situation does not guarantee the stability of income to fishermen. In order to make responsible fisheries possible in the Baltic Sea 3, it became necessary to create a lasting balance between the available resources and the fishing effort. Among many measures guaranteeing such balance, the most important is the reduction of the fishing capacity through scrapping of fishing vessels. The objective of this publication is to evaluate the socio-economic consequences of vessel scrapping programmes in the Baltic Sea, in particular in Poland, carried out with the use of the FIFG funds and to assess the effectiveness of this process both in economic terms and in delivering the goals (adjustment of the fleet to the available resources). 1 FAO, Fisheries Management 3. Managing Fishing Capacity, Technical Guidelines For Responsible Fisheries, Rome J. Horbowy, E. Kuzebski, Impact of the EU structural funds on the fleet and fish resources in the Baltic fisheries sector, WWF Poland, Sea Fisheries Institute, Gdynia Code of conduct for responsible fisheries, FAO, Rome, 1995.

11 Introduction 1 The publication presents the results of withdrawal of vessels that conducted fishery in the Baltic Sea, including an overview of the impact of scrapping programmes on the actual reduction of fleet capacity in the Baltic EU Member States. The effectiveness in spending the funds in particular countries is presented together with the impact of scrapping on the general condition of fisheries (catch volume and the technical condition of the fleet that remains in exploitation). The publication also encompasses a detailed analysis of the effects of the scrapping programme in Poland. Considering that the fleet reduction programme was just one of the factors influencing the results of fishery activities, other factors having an impact on the functioning of fisheries were also analysed. A detailed characteristics of the fleet capacity reduction programme and its impact on the changes in technical parameters of the fishing fleet, fishing intensity, catch volume as well as socio- -economic consequences of fleet reduction are also presented. The publication also includes the results of sociological studies covering the assessment of the programme of permanent withdrawal of fishing vessels from fisheries between 2004 and 2006, made by those fishermen who had decided to use the opportunity offered to them at that time, the opinion of local authorities on the socio-economic consequences of the programme, as well as its assessment made by people who occupy high ranking posts in the Polish fishery administration. An important element of these studies was the presentation of the mistakes made during the programme implementation and proposed changes that would prevent these mistakes from happening again in the future. 9 In evaluating the so-far implemented measures aimed at adjusting the fleet size to the Baltic fish resources, it seems inevitable to assess further attempts aimed at resolving this problem. Therefore the publication also includes the characteristic of the plans to adjust the fishing capacity in the Baltic in , in particular the Polish plans to adjust the fishing capacity. Particular attention was paid to the expected results of the programme of further fishing fleet reduction, adopted by the government. Photo: A. Wiliński / OIRM Gdynia

12 1 The nature of this publication required the use of materials from different sources. The analysis of changes that had occurred in fishing fleets of the countries around the Baltic was made on the basis of detailed analysis of the vessel register of the European Community between Similarly to the previous publication on this subject (WWF Poland, Impact of the EU structural funds on the fleet and fish resources in the Baltic fisheries sector), a problem of identification of Baltic fishing vessels became apparent. 4 The analysis of the excessive fishing capacity is also based on several international publications mentioned at the end of this publication. Detailed analysis of the effects of vessels scrapping programme in Poland is based on the catch database of the Fisheries Department in the Ministry of Agriculture and Rural development, as well as on the information collected in the framework of the National Programme for Collection of Fisheries Data. However, the responsibility for data compilation, obtained results and formulated conclusions lies within the authors Although it does not concern some countries, like for a example Poland, where deep sea vessels, fishing outside the Baltic, have completely different technical parameters and thus can be easily identified, whereas in other countries such as Sweden, Denmark and Germany they are not so distinct. It results from the fact that part of the fleet is fishing both in the Baltic Sea as well as outside (e.g. the North Sea). Therefore the fleets in these countries have a more uniform size structure. As a result, it is difficult to classify a vessel into the Baltic or deep sea fleet according to the vessel size or tonnage. Finally, similarly to the previous WWF publication, the 500 GT has been assumed to be the upper tonnage limit for the Baltic fishing vessels. Although it is not a perfect solution, yet it still permits to correctly subdivide the fleet of the new Member States of the EU, whereas in the case of the old Members, it excludes the industrial deep sea trawlers. Photo: WWF / G. Okołów

13 2. The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries Dr. Emil Kuzebski Photo: WWF / E. Kuzebski

14 Fishing fleet capacity management in the framework of the Common Fisheries Policy European Commission document published in , 20 years after the launch of the first multiannual guidance programme for fishing fleets (MAGP I) reads: A number of fish stocks have been in decline for some years now. The main reason for this is the overfishing of resources mainly as a result of the imbalance between the fishing effort of the Community fleet and the quantity of fish actually available. This shows the lack of effectiveness of the measures taken by the European Commission with a view to stop a decline of the stocks or aimed at recovery of the already overfished stocks. The next part of the document reads: Overcapacity which leads to overfishing is generally considered as one of the main causes of the depletion of fish stocks. This has not only caused damage to the fisheries resources and the marine environment but has also made fishing activity economically unsustainable and has led to substantial job losses in recent years. 12 Between , the catch volume in the EU member states decreased by 1.7 million tonnes or 25% (Eurostat data), whereas the import value of fish and fish products increased by nearly 5 times (according to FAO). A visible decline of the EU fisheries was connected to increasingly overfished fishing grounds and less and less profitable catches for an overdeveloped fishing fleet. According to the FAO s estimates from the late nineties, to restore the balance between the available resources and the fleets exploiting these resources, it would be necessary to reduce the number of fishing vessels by at least 30%. 6 The measures undertaken by the European Commission to improve the situation in fisheries were diversified. The first task consisted of assessing the actual fishing fleet size in the EU Member States and therefore required an establishment of a detailed tool to register the fishing fleets of the EU countries. To this end, in 1989, the fishing vessel register of the Community has been set up. It includes the basic technical characteristics of fishing vessels registered in different UE countries. According to the Council Regulation 2930/86, the fishing capacity indicator is the engine power calculated in kw and the gross vessel tonnage calculated in GT. Any change in the vessel characteristics, withdrawal of a vessel from the national register or entrance of a new one should be recorded in the database of the EU register. The establishment of the Community Fishing Fleet Register as well as the unification of vessel tonnage recording (unified measurement of vessel tonnage) has contributed to the improvement of fishing capacity management in the framework of multiannual fleet guidance programmes (MAGP). These programmes (four editions between ) set out long term targets for fishing capacity reduction in all the EU countries, in relation to the type and condition of the fish stocks exploited by these fleets. 7 Most of the objectives set by the MAGP were met but their impact on the actual fishing capacity reduction was hardly noticeable. 8 Reasons for this had been quite modest levels of fleet 5 COMMON FISHERIES POLICY COMPLIANCE SCOREBOARD, Communication from the Commission (COM(2003)344) of on compliance with the rules of the Common Fisheries Policy. 6 FAO, Report of the Technical Consultation on the Measurement of Fishing Capacity, Fisheries Report No More on MAGP in the WWF Poland publication, Impact of the EU Structural Funds on the Fleet and Fish Resources in the Baltic Fisheries Region, page E. Lindebo, Role of subsidies In EU fleet Capacity Management.,Marine Resource Economics, vol 20.

15 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 reduction (which, as noticed at the start of MAGP IV, were even higher than the output level) as well as difficulties in defining the actual level of overcapacity and therefore the required level of reduction. A serious shortcoming of the policy applied to the fishing fleet is sought to be the fact that subsidies were available not only for permanent withdrawal of fishing vessels but also for construction of new vessels and modernisation of the existing ones. According to the now existing opinion both measures are considered to be contradictory and therefore in subsequent years the subsidies for constructing new vessels were removed and those for modernisation restricted. Technological progress in the fishing fleets is regarded to be another factor influential with regard to the failure in reaching the objectives of adjusting fishing capacity to fish resources. It may undermine the effect of reductions in nominal capacity through an increase in productivity of the remaining fleet. Therefore, this factor should be considered when addressing the required need for capacity reduction. 9 Between , the fleet of the EU member states was reduced by approximately 20%. However, taking into account an annual 2% increase of fishing capacity due to technological creep, it needs to be corrected by 22% and therefore it can hardly be called a decrease. 10 When evaluating the impact of the technological progress on fishing capacity of the fleet, one should unquestionably consider its diversity, both in relation to specific types of vessels (fleet type), as well as the time of implementation. The economic condition of the sector and its investment ability as well as the existing legal framework, restricting the introduction of some technological advances in relation to fishing vessels, are also of importance. Such restrictions had appeared in the EU legislation after the reform of the CFP in They consisted of restrictions applied to granting subsidies for modernisation and prohibited any investments causing tonnage increase and thus resulting in higher fishing capacity R. Banks, S. Cunningham, W. Davidse, E. Lindebo, A. Reed, E. Sourisseau, J.W. de Wilde, The impact of Technological Progress on Fishing Effort, EC, E. Lindebo. op.cit. Photo: WWF / E. Kuzebski

16 2 The CFP reform in 2002 has ended the functioning of the MAGP in response to the fairly modest results it managed to deliver. However, fishing capacity continued to be managed according to two vessel parameters, the engine power and the gross tonnage. On the basis of results obtained in MAGP IV, new capacity reference levels of fishing fleets of the EU member states were determined. These reference levels formed a maximum ceiling to fishing capacity of fishing fleet (expressed in GT and kw), which constituted the basis in relation to further fleet reduction. 11 In addition, a restrictive control of registration of new vessels was implemented, the so-called entry/exit regime. The entry of any new vessel required a withdrawal of a vessel or vessels of comparable tonnage. 14 Discontinuation of management in the framework set by the MAGP ended the top-down objective setting by the European Commission for different types of fishery and fleet segments depending on the condition of exploited stocks. It was a subsequent change in relation to the earlier centralised system of fishing capacity management. Therefore the problem of guiding the objectives of fleet capacity adjustment was left to the member states for individual consideration. It will be possible to judge whether this was the right decision after the execution of a tender announced by the European Commission in May 2009 for an assessment of the overcapacity in the EU fisheries. 12 Unquestionably, setting of a uniform level of reduction for different fleet segments (engaged in the exploitation of a given stock) would make sense if the excess of fishing capacity would be equally distributed among all countries engaged in the exploitation. When comparing the present situation in pelagic fishery in Sweden and Poland, it is evident that both countries face an unbalanced fleet capacity with regard to the resources. Whereas Sweden has no problem to catch the available herring and sprat quota, Poland utilises only half of the available quota for these fish. Therefore, it is right to treat the EU member states separately with regard to adjusting the fish resources to the fishing capacity of the fleets. The role of the European Commission in this matter is limited to setting the restrictions which have an indirect impact on the fishing fleet management in the member states, i.e. through long-term management plans for fish stocks. Such the multiannual plan for the cod stocks in the Baltic Sea has been implemented in It sets, among others, the top-down limits in the number of fishing days and the TAC in accordance with the actual fishing mortality level (more on the plan in chapter 3.1.). The scale of fleet 11 Council Regulation (EC) No 1438/2003 of 12 August 2003 laying down implementing rules on the Community Fleet Policy as defined in Chapter III of Council Regulation (EC) No 2371/ Call for tenders ref. MARE/2009/03, Lot 1 Assessment of the overcapacity in EU fisheries. Photo: Stocznia PARSĘTA s.c. T. Jawdyk & M. Cieślak

17 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 reduction is also a matter of negotiations between the European Commission and the member states, and the strategic plans for adjusting fishing effort are required to receive the funds for fishing fleet restructuring in the framework of the European Fisheries Fund (article 22.1 of the Council Regulation (EC) No 1198/2006). In 2008, the fishing capacity of the EU fleet amounted in total to approximately 1.9 million GT (87 thousand vessels), which constituted about 7% of the entire global fleet. These countries have approximately the same share (approx. 6%) in the total volume of catches. It proves that the EU fleet is only to a limited extent responsible for a global fleet overcapacity and it does not mean that the existing fishing capacity is adjusted to the available resources. As a result, among others, of measures implemented by the European Commission, aimed at decreasing the EU fishing capacity between , the tonnage of the EU-15 fishing fleet was reduced by 330 thousand GT (-16%), whereas the tonnage of the enlarged EU-25 decreased in 2008 r. by 245 thousand GT (-12%). The answer to the question whether the achieved reduction of the fishing fleet is sufficient to balance the fishing capacity to the existing resources is given by the European Commission itself. Another report on this issue published in 2009 reads: Considering the constant technological improvemnts that neutralise the effects of capacity reduction, the net reductions of the EU fleet are still insufficient and the poor state of most Community fisheries, particularly for demersal species which require further drastic reductions in fishing fleets Detailed data on the changes in the fishing capacity of the EU member states can be found in annex 1 and 2. 10% 0% Belgium Cyprus* Denmark Estonia* Finland France Greece Spain The Netherlan Ireland 2% Lithuania* Latwia* Malta* Germany Poland* Portugal Slovenia* Sweden Great Britain Italy EU15 EU25-10% -20% -30% -40% -18% -28% -32% -23% -11% -17% -12% -31% -33% -9% -3% -7% -10% -9% -16%-16% -19% -22% -12% -50% -45% -55% -60% Source: Eurostat, New Cronos database, * for new member states the change in the tonnage was calculated for the years Graph 1. Relative changes in the tonnage of the fishing fleet of the EU member states in Annual Report From The Commission To The European Parliament And The Council on Member States efforts during 2007 to achieve a sustainable balance between fishing capacity and fishing opportunities, Brussels, COM(2008) 902 final/2.

18 Changes in the fishing capacity of the Baltic countries between Between 2000 and 2008, the fishing capacity of the EU -15 fishing fleet (expressed in GT and kw) was reduced by 16% and at the same time the fleet of the old member states that have access to the Baltic Sea (Germany, Denmark, Sweden and Finland) was reduced by 20%. A similar reduction scale was reached over a period of (a period twice shorter) by the new member states (Poland, Lithuania. Latvia and Estonia). The table below (Table 1) presents data on the number of vessels, tonnage and engine power of the fishing fleet of countries that have access to the Baltic Sea. Table 1. State of the fishing fleet of the Baltic countries EU members between Countries Country No. of vessels GT kw No. of vessels GT kw No. of vessels GT kw Denmark Old EU Finland Germany Sweden Old EU total New EU Estonia Lithuania Latvia Poland Old EU total Total Source: Eurostat, New Cronos database, State as per end of the year. Photo: A. Wiliński / OIRM Gdynia

19 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 Among the Baltic countries, the greatest reduction of the tonnage of the fishing fleet took place in Lithuania. Between 2004 and 2008, 1/3 of the vessels disappeared from the vessel register of this country (Graph 2). To a great extent, such reduction scale was achieved by the withdrawal of big deepsea vessels fishing outside the Baltic. These vessels were withdrawn with public aid. A similar scale of fishing fleet reduction was obtained in Denmark. Between , the Danish fleet decreased by as much as 32%. -22% New EU -10% -9% Poland Latvia -33% Lithuania -28% Estonia -20% -19% Old EU Sweden -3% Germany -23% Finland -32% Denmark -35% -30% -25% -20% -15% -10% -5% 0% Source: own estimations on the basis of Eurostat, New Cronos database, Graph 2. Relative changes in the tonnage of the fishing fleet of the Baltic countries in (old EU member states) and (new EU member states). 17 Table 2. State of the fishing fleet of the Baltic countries EU members between (vessels <500 GT) Countries Country No. of vessels GT kw No. of vessels GT kw No. of vessels GT kw Denmark Old EU Finland Germany Sweden Old EU total Estonia New EU Lithuania Latvia Poland Old EU total Total Source: Eurostat, New Cronos database, State as per end of the year. In order to exclude the vessels that are not operational in the Baltic fisheries from the table below (Table 2), only vessels with the tonnage below 500 GT were taken into account. The so-

20 2 estimated total tonnage of the Baltic fleet amounted to 174 thousand GT in 2008, which equalled 10% of the total EU fishing fleet. The old EU member states accounted for 75% of the Baltic fleet tonnage, with Denmark having the greatest share amounting to almost 1/3 of the total tonnage. Among the new member states Poland had the greatest fishing fleet capacity (11%) followed by Latvia (7%) and Estonia (4%). The total tonnage reduction of the Baltic countries, members of the EU between (old EU members) or (for new members states) amounted to 33% (Graph 3). The fishing capacity of the new member states decreased by almost 40%, whereas the old EU member states decreased the fleet s tonnage by approximately 30%. The greatest relative change in the tonnage took place in the Polish fleet where the fishing capacity decreased by as much as 45%. Equally high reduction of the Baltic fleet occurred in Denmark (-43%), and Lithuania (-39%) as well as Estonia (-37%). The German fleet suffered relatively smallest losses as it was decreased by 5%. -33% Total -39% New EU -45% Poland -26% Latvia 18-39% -37% Lithania Estonia -30% Old EU -25% Sweden -5% Germany -23% Finland -43% Denmark -50% -45% -40% -35% -30% -25% -20% -15% -10% -5% 0% Source: own estimations on the basis of Eurostat, New Cronos database, Graph 3. Relative changes in the tonnage of the fishing fleet of the Baltic countries EU members between (old EU member states) and (new EU member states) vessels <500 GT. The relative change in the fishing fleet size resulted from the number of withdrawn fishing vessels (in the framework of national scrapping programmes or due to fortuitous events such as sinking) as well as the number of vessels entering the fishery. The FIFG share in the total fishing capacity reduction of the fleet in the old EU countries between amounted to 34%, whereas in the new EU countries it reached 67% (between ). The graph below (Graph 4) shows the structure of the fishing fleet (in length classes) of the old EU countries operating in the Baltic Sea. It is clear that notwithstanding considerable reduction of the number of vessels and their tonnage, the relative share of different segments of vessels in the entire fleet has not visibly changed. Taking into account the number of vessels, small fishing boats (smaller than 12 m) dominated both in 2000 as well as in 2008, reaching as much as 85%. In general, this segment is dominated by vessels with the lowest fishing activity or even inactive.

21 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 3% % 49% 11% 48% 3% Number of vessels 35% 36% 0 5,9 m 6 11,9 m 12 17,9 m 18 23,9 m 24 29,9 m 30 35,9 m 36 41,9 m % 17% 15% 19% 11% 12% GT 15% 14% 19% 18% 18% 19% Source: own estimations on the basis of Eurostat, New Cronos database, Vessels above 42 m in length excluded (generally fishing outside the Baltic). Graph 4. Structure of the fishing fleet of the old EU member states operating in the Baltic Sea between Similarly, four years after the implementation of the fleet reduction programmes, the fleet structure in the new UE member states has remained unchanged. The only visible difference is the increase of share of the smallest boats, up to 6 meters, from 32% to 39%, whereas the share of vessels up to 12 m increased in these countries to 82% (from 74% in 2004). Therefore, the fleet structure of the new EU member states has become similar to the fleet structure in the old EU member states. The tonnage structure is, however, considerably different as compared to the old EU member states. In such comparison, the visibly dominating segment comprises vessels in length (mostly bottom and pelagic trawlers) 57-61%. In the old EU member states no length group has a share of more than 20% in the total tonnage % 11% % 2% 43% 8% 12% Number of vessels 42% 32% 39% 0 5,9 m 6 11,9 m 12 17,9 m 18 23,9 m 24 29,9 m 30 35,9 m 36 41,9 m % 57% 3% 7% 11% 6% 3% 9% GT 13% 14% 7% 6% Source: own estimations on the basis of Eurostat, New Cronos database, Vessels above 42 m in length excluded (generally fishing outside the Baltic). Graph 5. Structure of the fishing fleet of the new EU member states fishing in the Baltic Sea between It is interesting to compare the structure of the fishing fleet size in different countries. The graph 6 illustrates this structure in Among the fleets of 8 EU countries that operate in the Baltic fishery, it is difficult to find two fleets of similar vessel length structure. It obviously results from the historical background of fishery, as well as the exploited fish species. However, in terms of structure, the most similar are the fleets of the former USSR countries (Lithuania, Latvia and Estonia) that inherited the fleet from the years of the centralised planning in vessel construction and have very similar types of fishing vessels.

22 2 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Denmark Finland Germany Number of vessels Sweden Estonia Latvia Lithuania Poland 36 41,9 m 30 35,9 m 24 29,9 m 18 23,9 m 12 17,9 m 6 11,9 m 0 5,9 m 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Denmark Finland Germany Sweden GT Estonia Latvia Lithuania Poland Source: own estimations on the basis of Eurostat, New Cronos database, Vessels above 42 m in length excluded (generally fishing outside the Baltic). Graph 6. Structure of the fishing fleet of the Baltic member states in 2008 according to the length classes. 20 In terms of the number of vessels in different length groups, the Polish fleet is characterised by a smallest number of fishing boats up to 12 meters. Finland is by far the leading country with the greatest relative number of fishing boats, with 96% share in the total number and 41% share in the total tonnage. It should however be noted that out of 3000 Finnish vessels present in the EU register only approximately half of them are active. A big number of inactive fishing boats can also be found in the Danish and Swedish registers. The graph below (Graph 7) compares the age of fishing fleets of different Baltic countries in 2000 (for the old EU member states) and in 2004 (for the new member states) as well as in ,0 25,0 [age] 20,0 15,0 10, ,0 Denmark Finland Germany Sweden Estonia Lithuania Latvia Poland New EU The average age of fishing vessels in the EU member states fishing in the Baltic Sea was 25.4 years in 2008 and was higher by 2 years when compared to 2004 and by 4 years when compared to the year 2000 (for the old EU member states), therefore the average rate of ageing of the fishing fleet was lower than the natural time flow. Among the countries that conducted fishery in the Baltic Sea in 2008, the oldest fishing fleet belonged to Sweden (29.5 years), followed by Denmark (28.6 years) and Poland (27.2 years). The youngest fleet belonged to Estonia (19.2 years). Between the Swedish fleet aged by 2.2 years, the Danish fleet by 1.6 years, whereas the Polish one by 1.3 years. The vessels in the Old EU Source: own estimations on the basis of the Community Fishing Fleet Register, July Graph 7. Age of the fishing fleet of the Baltic countries (vessels <500GT).

23 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 Estonian fleet aged by 3 years. In general, the youngest fleet with, at the same time, the lowest share in the catches is constituted by fishing boats. In 2008, their average age amounted to 24 years, whereas that of other vessels reached 32.7 years. The graph below (Graph 8) presents a comparative study of the age of the fishing fleet in different EU member states in the already mentioned years, excluding the vessels below 12 meters (as mentioned earlier, they are considerably younger than other vessels). 40,0 35,0 30,0 [age] 25,0 20,0 15, ,0 5,0 Denmark Finland Germany Sweden Estonia Lithuania Latvia Poland New EU Old EU Source: own estimations on the basis of the Community Fishing Fleet Register, July Graph 8.. Age of the fishing fleet of the Baltic countries (vessels <500GT and longer than 12 m). Undoubtedly, such comparative study places the Polish fleet at the very end, with the average age of the vessel in 2008 amounting to 36.6 years and, as compared to 2004, aged by 1.7 years. Cutters of all the old EU member states were similarly old (although with a little lower average age). Vessels above 12 meters registered in Lithuania, Latvia and Estonia were on the other hand noticeably younger. 21 Photo: S. Skibior / IRM Świnoujście

24 Impact of the FIFG on the changes in fleet size in the Baltic countries between Financing the Baltic fleet restructuring programmes The overall amount of funding allocated to all member states under the Financial Instrument for Fisheries Guidance between amounted to 4.1 billion Euro (including 272 million Euro earmarked to the new member states) of which approximately 15% of funds were allocated to scrapping of the fishing fleet. 14 The planned amount of funding from FIFG allocated to scrapping in the old member states that conduct fishery in the Baltic Sea amounted to approximately 32 million Euro (approximately half being allocated to Denmark). It was considerably lower than the funding foreseen for co-financing the construction of new vessels (56 million Euro) as well as fleet modernisation (67 million Euro) 15. In this context, the budget for vessel scrapping in Poland, as foreseen to be co-funded from FIFG in 2004, was impressive and amounted to 107 million Euro (including 80 million Euro z FIFG). Only a very small amount of funding was allocated for the construction and modernisation of vessels. 22 The amount of funds actually spent on scrapping and construction of vessels (due to subsequent budget modifications and shifts between different allocations) differed from the planned amount. The table below (Table 3) presents the funds actually spent in the framework of the fleet restructuring programme in the Baltic countries between Table 3. The amount of funds spent on scrapping and construction of new vessels in the Baltic countries under FIFG in (from to ). Countries Country Total Scrapping FIFG National contribution Total Construction of new vessels FIFG National contribution Balance scrappingcontribution Denmark Old EU Finland Germany Sweden Old EU total Estonia New EU* Lithuania Latvia Poland New EU total Total Source: own estimations on the basis of data from: Information, communication, inter-institutional relations, evaluation and programming unit Directorate General Maritime Affairs and Fisheries, June Data covered also the vessels conducting fishery outside the Baltic Sea. * data for the period from to Third Edition Of The Common Fisheries Policy Compliance Scoreboard, ec.europa.eu/fisheries/press_corner/press/fifg%20allocation.pdf

25 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 Between 2000 and 2007, the funding used for scrapping of fishing vessels in the Baltic countries amounted to million Euro, including million of EU funds and 66 million Euro of own contributions of the EU member states. Considerably less funding than previously planned was spent on investments related to the construction of vessels due to the revised, much stricter criteria for spending these funds. Public aid for the renewal of vessels could only be applied to vessels smaller than 400 GT, was available only until the end of 2004 and was subject to restrictions stipulated by entry / exit scheme. 16 Also the rate of assistance, requiring a minimum of 60% of own contribution from the investor could discourage potential beneficiaries of these funds. Between fishing vessels of total tonnage of 4.6 thousand GT were built with co-financing. These were mostly small fishing boats, not exceeding 12 meters in length. The amount of funds spent on scrapping of fishing vessels in the new EU member states reached million Euro and thus constituted almost 60% of all funds spent on fleet scrapping in the Baltic countries. The highest costs were incurred for restructuring of the Polish fishing fleet. between they amounted to 81 million Polish zlotys, i.e. 43% of total funds spent on this measure in the Baltic countries (Graph 9). Denmark 32,5% Poland 43,2% 23 Latvia 9,0% Lithuania 4,0% Estonia 2,3% Source: own estimations on the basis of data from Table 3. Germany 0,4% Sweden 6,3% Finland 2,2% Graph 9. Share of different Baltic countries in the funds spent on scrapping between The cost of scrapping of the Danish fleet was 61 million Euro, equalling to 32% of funds allocated to the withdrawal programme. The programmes of fishing capacity reduction implemented by other Baltic countries were considerably less costly and ranged from 0.4% (Germany) to 9% (Latvia) of total funds spent on this measure in the Baltic countries. The compensations granted for fishing capacity withdrawal differed in particular EU member states. The graph 10 presents an average price for 1 GT of a vessel withdrawn between using the public aid in the Baltic countries. In general, the highest compensations were paid in the new EU member states. Latvia was the most generous country with respect to compensations. The Latvian government paid on average 4240 Euro 16 Financial Instrument for Fisheries Guidance, Instruction for use, European Commission, 2003 edition. ISBN

26 compensation EUR/GT average GT of scrapped vessel [EUR/GT] [average GT] 0 Latvia Denmark Poland Lithuania Finland Germany Sweden Estonia Old EU New EU Total 0 Source: same as Table 3. Graph 10. Average compensations paid for a GT of a scrapped vessel and average tonnage of withdrawn vessels. 24 for a GT of a scrapped vessel. Average compensations paid to the owners of scrapped vessels in Poland and Lithuania were a little smaller (on average Euro/GT and Euro/GT respectively). High compensations were paid also in Denmark (4 230 Euro/GT). Similarly to Poland and Latvia, it resulted indirectly from the size of scrapped vessel (according to the EU legislation the compensations paid for smaller vessels, calculated in GT, were on average higher than compensations paid for big vessels). These countries had a relatively low average tonnage of withdrawn vessels. Much smaller compensations were paid by other countries, namely Finland, Germany, Sweden and Estonia. However, in these countries (except for Germany) withdrawn vessels were even twice bigger than vessels withdrawn in other countries. Interesting results are shown in a comparative study of the funds spent on vessel scrapping and the income generated by the sector in different countries (Graph 11). This comparison shows to what extent the fishing fleet is dependent on public aid and how little chance it would have to function if it were to bear the management costs (in this case vessel scrapping). 17 The least favourable relation between the scrapping costs and the income generated by fishery can be found in Poland. The reduction of fishing capacity of the Polish fleet incurred the cost almost double the average annual income generated by fishery. Similarly high indicator could be noted in Lithuania and a bit lower in Latvia (approximately 80% of the value of annual catches). By far more correct figures in the context of economic calculation were spent on the fleet withdrawal in the old EU member states and Estonia. One of the main objectives of fishing fleet restructuring programmes, apart from adjusting the fishing capacity to the available resources, was to improve the economic condition of the sector. However, when evaluating the capital invested in vessel scrapping only from the point of view of economic efficiency, the fishing fleet restructuring programme in the Baltic countries members of the 17 Participation of fishing vessel owners in the costs of fishery management is a system widely used in New Zealand and Australia as well as Iceland. More on the costs of fishery management E. Kuzebski, Koszty zarządzania rybołówstwem, Wiadomości rybackie 1-2/2009.

27 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 250% 200% 150% 100% 50% 0% Poland Lithuania Latvia Finland Denmark Sweden Estonia Germany average total average old EU member states average new EU member states Source: estimations on the basis of the same data as Table 3 and The 2008 Annual Economic Report on the EU Fishing Fleet (SGECA 09-01), Ispra, 9-13 March For the new EU members states average for the years , Finland and Germany for the years , Denmark Graph 11. Ratio of the value of funds spent on vessel scrapping and average annual income generated by fishery between EU cannot be considered as profitable. The theory of economics says that the effect of each investment (cost of capital) should be an increase of the profit in the future (or eventually increase of cash flow, production, competitiveness etc.). 18 When we scrap vessels and in fact reduce the production means, we cannot expect to increase the income. There is no doubt that money spent should in particular contribute to the reduction of permanent functioning costs of fishery and therefore increase the overall profitability of fishery. If we treat fishery as a firm, the efficiency of the investment capital in particular countries can be measured by comparing the indicator of return on invested capital. The shorter the time for the return of invested capital, the more effective the investment. The return of invested costs can be measured by means of the cash flow value (profit plus depreciation). The time to balance the costs by the amount of income is the rate of investment return. 25 This can be expressed by means of a formulae: OZ = where: I investment capital; CF net cash flow 19 I CF The lower the value of the indicator calculated above, the higher the investment efficiency. Data on gross cash flow (GCF calculated as profit + depreciation + costs of invested capital) in the fishery of particular EU countries is given by the report of SGECA-STECF. 20 The investment value is the value of 18 Z. Leszczyński, Analiza ekonomiczno-finansowa spółki, PWE, Warszawa Idem. 20 The 2008 Annual Economic Report on The EU Fishing Fleet (SGECA 09-01), Ispra, 9-13 March (AER 2008).

28 2 financial means spent on scrapping of fishing vessels. As mentioned earlier in this publication, it is hard to state what was the impact of the fleet reduction programmes on the economic results obtained by the fishing fleet. The economic efficiency is influenced also by several other factors independent from changes in fishing capacity. Therefore, the indicators of investment return shown on the graph below (Graph 12) can only be an approximate measure of efficiency of scrapping programmes. Nevertheless, considering that all fleets of Baltic countries function in a similar economic environment (similar relative changes in TAC, changes in fish or fuel prices), the so calculated indicator can be useful in a comparative evaluation of the effects of fishing fleet scrapping programmes in particular countries Denmark Finland Germany Sweden Estonia Latvia Poland Source: own estimations on the basis of data found in AER 2008 on the value of funds paid for vessel scrapping. The rate of the return of invested capital is a quotient of the difference of the annual gross cash flow (GCF) achieved in (For Finland and Germany in 2006) as well as the value of GCF in 2002 (or 2004 for the new member states). The calculations do not include Lithuania due to a negative GCF in Graph 12. Rate of the return of capital invested in vessel scrapping programmes (in years). The longest period for the return of the financial means spent on the fleet reduction programme can be observed in Poland. Funds spent on fleet scrapping were almost twelve times higher than the increase of the cash flow value in and at the same time almost six times higher than the GCF of the fleet achieved in The return indicator of money invested in the reduction programme was twice lower (6 years) in Latvia (funds spent on vessel scrapping were twice bigger than the GCF in 2007). In other countries it did not exceed 2 years and the ratio of fleet reduction costs to GCF did not exceed one. The costs of scrapping programmes more or less corresponded to the results achieved by particular countries, measured in terms of total withdrawn tonnage and the number of scrapped fishing vessels The fishing capacity reduction in the framework of FIFG The main objective of the fleet reduction programmes was to decrease the fishing capacity with the measurable effect being the reduction of tonnage, power and number of fishing vessels engaged in fishery. The earlier chapter (2.2 Changes in the fishing capacity of the Baltic countries in ) presented the relative changes in the capacity of the fishing fleets in the Baltic countries that occurred

29 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 in the last eight years. Some of these changes resulted from reduction programmes, realized with public aid, however part of the fleet was withdrawn without any aid funds. As mentioned earlier, the FIFG financed approximately 1/3 of the fleet reduction, executed between in the old member states and approximately 70% (between ) in the new member states. The table below presents the number, tonnage and power of fishing vessels scrapped in the framework of compensations cofinanced from the FIFG. The total number of fishing vessels withdrawn in the framework of FIFG in the Baltic countries between 2000 and 2007 amounted to 900 vessels of total tonnage equal to 49 thousand GT and power of 161 thousand kw. Out of this, 388 vessels with tonnage of 22 thousand GT and power of 86 thousand kw were withdrawn in the old EU member states and 512 vessels with tonnage of 27 thousand GT and power of 74 thousand kw in the new EU member states (Table 4). In the case of the old EU members states it equalled to the reduction of approximately 9% and in the case of the new members a reduction of 15% of the vessel tonnage registered in 2000 or in The balance of the tonnage of vessels constructed with the FIFG subsidies and vessels scrapped with the support of public aid amounted to 44 thousand GT. This is in fact the net real impact of the EU funds on the reduction of fishing capacity of the Baltic countries fishing fleet between Notwithstanding a shorter time of functioning of FIFG, the new EU member states withdrew more net fleet potential than the old members. Between , all old EU member states introduced new vessels co-financed with the EU funds to exploitation, and in two countries namely Finland and Germany more vessels were constructed with the EU support than actually withdrawn. However, only one new EU member Estonia co-financed vessel construction with the EU funds. 27 Table 4. Number, tonnage and power of vessels withdrawn and constructed in the framework of the public aid with co-financing from the FIFG in the Baltic countries, Scrapping Construction of new vessels Balance Countries Country Country number GT kw Country number GT kw Country number GT kw Denmark Old EU Finland Germany Sweden Old EU total Estonia New EU Lithuania Latvia Poland New EU total Total Source: same as Table

30 2 Interesting and more detailed information on the structure of scrapped fishing vessels can be derived from the analysis of the Community Fishing Fleet Register. 21 Although the data from the register may be somehow divergent from data presented earlier in the tables, the scale of these divergences is not significant enough to change the overall conclusions. The table below (Table 5) presents the number and tonnage of the fishing fleet in the Baltic countries withdrawn in with the public aid, subdivided by length classes. Table 5. Number and tonnage of vessels withdrawn in the Baltic countries in with the public aid from FIFG. Number of vessels GT Countries Country mm mm <12m 24m 40m >40m <12m 24m 40m >40m Denmark Old EU Finland Germany 1 8 Sweden Old EU total Estonia New EU Lithuania Latvia Poland New EU total Total Source: own estimations on the basis of the Community Fleet Register, July The analysis of data from the table above shows that the length structure of vessels withdrawn with the FIFG support between in the new and the old EU member states was distinctly different. The graph 13 presents it clearly. In the old member states, vessels of 12 to 18 meters in length (with average length of 14.4 m) had the greatest share (39%) in the number of scrapped vessels. Among the countries, members of the EU since 2004, vessels of 6-12 m in length or average length of 8.7 meters had the dominant share (42%) in the scrapped fleet. Taking into account the tonnage of withdrawn fishing vessels, in the new EU member states a definitely dominant share of vessels meters in length and average tonnage of 100 GT (as much as 63%) can be observed, which can easily be explained by the high representation of these vessels in 2004 in the entire fleet (compare with Graph 5). Such high share of a segment of vessels cannot be found among vessels registered in the old EU member states, however among the withdrawn vessels there is a clear domination of two vessel segments, namely meters and meters in length, respectively corresponding to 26% and 29% of the withdrawn tonnage. It does not completely correspond to the overall fleet structure, in which these two vessel segments had respectively 18% and 19% of share in

31 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 8% 5% 4% 5% 42% 29% 27% 7% 20% Number of vessels 19% 39% old EU new EU 0 5,9m 6 11,9m 12 17,9m 18 23,9m 24 29,9m 30 35,9m 36 41,9m 13% 29% GT 5% 9% 26% 63% 13% 18% old EU new EU 9% Source: own estimations on the basis of the Community Fleet Register, July Vessels above 42 m excluded. Graph 13. Length structure of vessels withdrawn in the Baltic countries under FIFG (old EU member states between , new EU member states between ). In this context, the overall fleet structure at the start of the fishing fleet reduction programmes and the structure of withdrawn vessels may suggest that the scrapping programmes implemented by particular countries targeted particular vessel types, exploiting specific fish species. Detailed examination of this issue would be possible only through meticulous analysis of the catch structure of withdrawn vessels, which due to the lack of access to this type of data is not possible, neither at the level of particular countries nor at the level of a group of countries. Such analysis for the Polish fleet is presented in chapter Impact of fleet restructuring on the size of the Polish catches in the Baltic. 29 The graph below (Graph 14) presents the structure of tonnage structure of withdrawn vessels, divided by length classes and individual countries. It can be observed that the already mentioned rules concerning the share of particular length classes in the entire scrapped fleet prove correct for most of the Baltic countries. Although the vessel register is a rather imperfect source of information on the type of withdrawn vessels targeting a given fish species, it is the sole accessible source of information on the issue. The 100% 90% 80% 70% 60% 50% 40% 30% 20% 36-41,9m 30-35,9m 24-29,9m 18-23,9m 12-17,9m 6-11,9m 0-5,9m 10% 0% Denmark Finland Germany Sweden Estonia Lithuania Latvia Poland Source: own estimations based on of the Community Fleet Register, July Vessels above 42 m excluded. Graph 14. Structure of the fishing fleet withdrawn with FIFG support between 2000 and 2009 (expressed in tonnage).

32 2 graph below (Graph 15) presents the tonnage structure in the new and the old Baltic member states divided according to the fishing gear. The calculations were based on data on the main (first) fishing gear as registered for a given vessel in the Community Fleet Register. 100% Fleet structure in 2000 or % Structure of withdrawn fleet 90% 90% 80% 80% 70% 60% 50% 40% 30% others nets pelagic trawl bottom trawl 70% 60% 50% 40% 30% 20% 20% 10% 10% 0% Denmark Finland Germany Sweden Estonia Lithuania Latvia Poland 0% Denmark Finland Germany Sweden Estonia Lithuania Latvia Poland Source: own estimations on the basis of the Community Fleet Register, July 2009, excluding vessels >500GT. Graph 15. Structure of the fishing fleet registered in 2000 (old EU member states) or in 2004 (new EU member states) as well as the fleet withdrawn with the FIFG funding between 2000 and 2009 divided by fishing gears (expressed in tonnage). 30 The picture of the structure of the fishing fleet presented on the above graphs confirms the thesis that the structure of withdrawn vessels in particular countries (new EU member states) corresponds more or less to the structure of the entire fleet registered at the start of withdrawal programmes (which confirms the thesis that the programme was not targeted to concrete vessel segments). However, a visible difference can be seen in the old EU member states, especially in the Swedish fleet. In this case, the scrapping visibly targets vessels fishing with bottom trawl (gears commonly used in cod fishery). The tonnage of pelagic vessels was considerably lower in relation to the fleet structure in Age of the fleet withdrawn under FIFG One of the objectives of the CFP was to improve the competitiveness and efficiency of the fishing fleet. In the context of recent problems in fisheries caused by the fuel crisis, the European Commission decided to apply measures aimed at decreasing the energy consumption of fishing fleets, among others subsidies for the exchange of engines for less energy consuming. In this context, the scrapping targeting the oldest vessels, in theory the least technically efficient, should be the right measure to reach this objective. However, the EU legislation awarded premiums to younger vessels. According to the EU legislation, the premium paid for vessel scrapping was degressive in relation to the age of vessels (owners of the youngest vessels could get the highest compensations) and therefore were not an incentive to withdraw the oldest vessels. Nevertheless, the national regulations were not bound to stick to this rule and the guidelines for the national scrapping programmes could contain such programme selection criteria that constituted an incentive to withdraw older vessels.

33 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 As presented in the previous chapter, the fishing fleet of the EU member states that conduct fishery the Baltic Sea is in general old. In 2004, the average age of vessels from the old EU member states was 24 years and for the cutters longer than 12 meters, as much as 31 years. The age of the fleet from the new EU member states was similarly advanced and amounted to respectively 21 and 30 years. The graph 16 presents a comparative study of the average age of the fish fleet from the old and the new EU member states in 2000 and 2004 as well as the average age of vessels withdrawn with the support of the FIFG funds. For all countries, both for the old and the new EU members, the average age of withdrawn vessels was higher than the average age of the entire fleet at the start of the scrapping programme. For the old EU member states this difference amounted to approximately 20 years and for the new members almost 10 years. Taking into account that the EU legislation did not permit to scrap vessels below 10 years, even such difference in the age of the withdrawn fleet and the vessels remaining in exploitation should be considered as relatively small. 50,0 40,0 30,0 20,0 10,0 0,0-10,0-20, ,0 Denmark Finland Germany Sweeden total old EU Estonia Lithuania Latvia Poland total new EU age of with drawn vessels age in 2000 or 2004 difference Source: own estimations on the basis of the Community Fleet Register, July 2009, excluding vessels >500GT. Graph 16. A comparative study of the average age of the withdrawn fleet and the average age of the entire fleet at the start of withdrawal programmes (2000 old EU member states, 2004 new EU member states). The most visible elimination of the oldest vessels from the entire fleet took place in Finland and Sweden. In Finland, at the start of the programme, the difference between the average age of vessels and the average age of withdrawn vessels amounted to 22 years.. The scrapped Swedish vessels were the oldest vessels among all vessels in the remaining Baltic countries. Their average age was 45 years, whereas the overall fleet age amounted to 25 years. The estimations for the new EU member states are definitely less favourable. In Poland, the average age of scrapped vessels was 31 years whereas the average overall age of vessels in 2004 was 26 years. In this context, the estimation of the average age of Estonian and Lithuanian vessels looks better. The average age of fishing vessels in the Estonian fleet in 2004 was 16 years, whereas scrapped vessels were by approximately 28 years older. The difference in the age of scrapped vessels in the Lithuanian fleet in relation to the overall fleet amounted to 13 years and in the Latvian fleet to approximately 10 years.

34 Impact of scrapping on the size of Baltic catches Changes in the volume and structure of catches are an indirect effect of vessel scrapping. In theory, a reduction in the number of vessels should in consequence result in a reduction of catches (volume of catches). However, in the case of existence of excess fishing capacity such simple relation cannot function. The impact of fishing fleet reduction on the volume of obtained catches depends on the earlier engagement (participation) of withdrawn vessels in fishery. As described in more detail further in the publication (Chapter 5.4. Assessing the efficiency of fishing effort reduction), even the reduction of the most active vessels may contribute to an increase of activity of the less active part of the fleet and therefore eliminate the effect of capacity reduction. Moreover, one should take into account the fact that most fish species fished in the Baltic are subject to TACs, that set the maximum limit of catches. Also other changes in the surroundings such as the introduction of species recovery plans, limits of fishing effort and technical protection measures, market conditions (as described in chapter 3.1 Conditions of functioning of the Polish fleet in the Baltic in ) may have a direct impact on the volume of catches. Therefore, the changes in catch volumes shown below are not necessarily the direct effect of the already presented changes in the size of fishing fleets in the Baltic countries. 32 In 2007 the fleet of the EU countries caught 762 thousand tomes of fish in the Baltic, which constituted a decrease by 12% as compared to the year Reduction of catches was particularly visible in the old EU member states and its scale evidently differed between particular countries. Between 2000 and 2007, total catches taken by the old member states decreased by 17%. The highest decrease, as much as 46% was noted in the case of the Danish fleet. High (28%) decrease of catches took place in the Swedish fishery, whereas Finland and Germany increased their catches. Landings of the Finnish fleet increased by 5% and the German fleet by as much as 159%. The scale of catch reduction in the new EU member states was considerably smaller than the reduction in the old EU countries and amounted to 3%, both in relation the year 2000 and Also in this case, evident differences between countries occurred. The highest decrease of catches took place Denmark Finland Germany Sweden Estonia Lithuania Latvia Poland Source: own estimations on the basis of data from FISHTAT+ database, FAO, ICES Graph 17. Baltic catches in according to the EU member states (in thousand tonnes).

35 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 in the Polish fishery (-24% in the years ). Catch reductions were less visible in other countries. Even increases occurred. In Estonia the landings decreased by 4%, whereas in Latvia and Lithuania the catches significantly increased, respectively by 11% and even 216%. Two periods are distinct in the analysed years; the period of a definite decrease in catches until 2003 and the period of increase in catches between 2003 and 2007 (Graph 17). This situation was caused by a considerable reduction of catch limits, practically for all fish species, between 2000 and The cod catch quota were reduced by approximately 30%, whereas the herring TAC decreased by as much as 60%, from 380 thousand tonnes to 160 thousand tonnes. Between 2003 and 2007, catches increased in parallel to the increase of catch limits (mostly herring). The graph 18 presents the relative changes in catch volumes of three most important species fished in the Baltic Sea (sprat, herring and cod) between for particular EU member states that conduct fishery in the Baltic Sea. As shown on the graph, the range of changes in the catch volume was highly differentiated. Most countries noted an increase of sprat catches, in Lithuania by as much as 200%, which resulted both from the changes in the fleet structure of this country as a consequence of the scrapping programme as well as higher catch limits. In , the Lithuanian pelagic fleet increased from four to seven trawlers, parallel to a considerable reduction in the fleet of bottom trawlers and the fleet fishing with set nets % 150% 100% 50% 0% -50% Denmark Finland Germany Sweden Estonia Lithuania Latvia Poland Denmark Finland Germany Sweden Estonia Lithuania Latvia Poland Denmark Finland Germany Sweden Estonia Lithuania Latvia Poland Sprat Herring Cod Source: own estimations on the basis of data from FISHTAT+ database, FAO, ICES Graph 18. Relative changes in catch volume of most important Baltic fish species, years (division by the EU member states). Sprat catches decreased only in Denmark (possibly as a consequence of the ITQ system introduced in the pelagic fishery) and in Poland, as a result of a reduction of an important part of the pelagic fleet. Similar regularities could be observed in the herring fishery. 22 The 2008 Annual Economic Report on The EU Fishing Fleet (SGECA 09-01), Ispra, 9-13 March 2009.

36 2 120% 100% 80% 60% % 20% 0% Denmark Finland Germany Sweden Estonia Lithuania Latvia Poland Source: own estimation on the basis of: Yearbook of Fishery Statistics 2007, Fiskeristatistisk Årbog Quota utilisation calculated after exchanges. Graph 19. Utilisation of available TAC for Baltic sprat in the EU countries. 34 The presented changes in the volume of catches had a direct impact on the level of TAC utilisation. The graph 19 illustrates this problem with the example of the caught sprat quota. For majority of countries, both old and new EU members, sprat catches were attractive enough to result in the TAC utilisation, both in 2004 and 2007, of 100% or close to 100%. In 2007, a major deviation from this regularity was visible in Poland and Lithuania, where sprat catches were lower by 53% (in the case of Poland) and by 33% (Lithuania) than available catch limits. In the case of Lithuania it resulted from the disproportionately high increase of the sprat TAC in comparison to other Baltic countries (due to resigning from exchange of sprat quota, which had decreased the available sprat quota in 2004), however in the case of Poland it was solely the side effect of the just completed scrapping programme.

37 The effects of the vessel decommissioning programme implemented in the framework of FIFG in the Baltic countries 2 Chapter s summary The process of limiting the fishing capacity (MAGP I), initiated by the European Commission in the beginning of the eighties, aimed at adjusting the fleet size to the available (still decreasing) fish resources has lasted already almost 30 years and its effects are still not satisfactory. In the 2009 document the Commission underlined that further drastic reductions of the fishing fleet are needed. The Operational Programme directed most efforts and financial means aimed at reducing the fishing capacity at scrapping of fishing vessels. Public expenses for scrapping of fishing vessels constituted one of biggest budget items in structural programmes. This refer mostly to the new member states (Poland, Lithuania, Latvia) where the costs of scrapping were disproportionately high in relation to the income generated by fishery. In this context, the programme implemented by Poland was the least effective from the economic perspective. New member states lacked experience in the implementation of the vessel scrapping programmes. In general, the compensations paid in these countries for withdrawn vessels were higher than compensations paid by the old EU member states. It seems however, that due to a great interest in the money offered (lack of earlier fleet withdrawal programmes) they should have been be considerably lower. The structure of withdrawn vessels in different countries new EU members corresponded more or less to the structure of the entire fleet registered at the start of withdrawal programmes. This could be a proof for the thesis that the programme did not target specific vessel groups, and therefore types of fishery. However, in the old EU member states, the programmes visibly targeted vessels fishing with the use of bottom trawls, that means vessels fishing for cod. In the case of these countries a reduction targeting older fishing vessels could also be noticed, whereas the new member states withdrew relatively younger vessels. A particularly unfavourable relation of the average age of vessels registered at the start of the scrapping programme to the age of withdrawn vessels could be noticed in Poland. Between 2000 and 2007 catches taken by the Baltic countries decreased by 12%. In the same period, reduction of catches in the new member states amounted to only 3%. Particularly negative impact of vessel scrapping on the volume of catches and the rate of utilisation of pelagic quota could be noticed in Poland. Apart from Poland only Denmark noted a decrease in landings of sprat and herring, however in this country, contrary to Poland, high level of available quota utilisation was preserved. 35

38 3. Results of the vessel decommissioning under FIFG in Poland Dr. Emil Kuzebski Photo: WWF / E. Kuzebski

39 Results of the vessel decommissioning under FIFG in Poland Conditions for the functioning of the Polish fleet in the Baltic Sea between 2004 and 2008 Accession to the EU The accession of Poland to the EU was definitely the most important factor determining the possibilities and directions of future development of Polish fisheries after The signing of the Accession Treaty was followed by formal implementation of the entire EU legislation, including the rules regulating the functioning of fishery. In the case of Baltic fishery, the implementation of the Common Fisheries Policy was related to the transfer of competence in decisions related to the national catch quota of particular fish species as well as technical measures to protect the resources from the International Baltic Sea Fishery Commission (IBSFC) to the European Commission. The total allowable catch for 2004 was for the last time decided upon by the IBSFC at its 29th Session. The size and the conditions of utilisation of the quota allocated to Poland as well as other Baltic countries in 2005 were decided through negotiations in the European Commission. It should be underlined that the accession of Poland and other Baltic countries to the EU did not change the allocation principles of the TAC for particular countries that conduct fishery in the Baltic. The distribution of shares of the overall TAC was included in the Accession Treaty guaranteeing that they remain constant over time under the Community principle of relative stability. Illegal, unreported and unregulated fishing (IUU) Undoubtedly the greatest expectations and also fears at the time of the accession of Poland to the EU were related to cod fishery mostly concerned by the problem of illegal fishing. Excess of fishing capacity of the cod fleet in relation to the still decreasing fish resources had remained unsolved for years and the EU structural funds created a good opportunity to undertake an effort to cope with this problem. The most important mechanism used to this end was the reduction of fishing capacity through vessel scrapping (described in more detail further in the publication). Equally important, especially from the point of view of unreported catches was the strengthening of landing controls. In 2004, fishery control at sea and in fishing ports was carried out by three regional inspectorates, located at the western (Szczecin), central (Słupsk) and eastern (Gdynia) coast of the Baltic Sea. Since after the accession to the EU, most of Polish fishing grounds have become part of the Community waters, the control in this area became also a competence of inspectors from other Community member states. Joint control activities in cod fishery in the Baltic Sea were formalised in October 2006 through the adoption of a co-ordinated joint deployment plan in the framework of the Community Fisheries Control Agency. 23 These activities turned out to be painful for the Polish fishery. In consequence, in 2007 and 2008 Polish cod fishery was closed earlier in view of revealed overfishing or full quota utilisation. 37 In 2007, on the basis of inspections, the European Commission came to the conclusion that Polish cod catches in the eastern stock were in reality three times higher than the catches officially reported by Poland. 24 Therefore, in conformity with the EU legislation, catch quota allocated to Poland for the coming years was decreased by the amount overfished in Commission Regulation (EC) No 804/2007 of 9 July 2007 establishing a prohibition of fishing for cod in the Baltic Sea (Subdivisions 25-32, EC Waters) by vessels flying the flag of Poland.

40 3 In accordance with the Council Regulation of the EC, in 2008 the Polish cod quota was reduced by 10% (800 tonnes) of the amount overfished and in subsequent years, , the TAC was to be reduced by 30% of the amount overfished (2 400 tonnes each year). 25 A similar threat of overfishing happened in 2008, however the Polish administration did not allow for quota overshooting by extending the summer ban for cod by one month. On 26 September the European Commission announced that Poland had exhausted its cod quota for the eastern stock. 26 Vessels fishing for cod were granted financial compensations (similarly to 2007) for the lack of possibility to conduct fishery. Financial compensations The accession of Poland to the EU created a possibility for the fisheries sector to use financial resources in the framework of structural funds. Compensations for the temporary cessation of fishing activities, so far inaccessible, were among them. 27 These appropriations gave financial security to the vessel owners who were obliged to completely stop their fishing activity as a result of the implementation of extraordinary measures for the protection of resources. Until April 2009, in the framework of this assistance, the Polish government paid approximately 25 million Polish zlotys or approximately 15% of the annual value of Baltic catches. The amount of financial assistance constituting a compensation for cessation of fishing activities was in general dependent on the vessel length and the number of days Council Regulation (EC) No 338/2008 of 14 April 2008 providing for the adaptation of cod fishing quotas to be allocated to Poland in the Baltic Sea (Subdivisions 25-32, EC Waters) from 2008 to COMMISSION Regulation (EC) No 1012/2008 establishing a prohibition of fishing for cod in Baltic Sea subdivisions (EC waters) by vessels flying the flag of Poland. 27 Article 16, Council Regulation (EC) No 2792/1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector. Photo: S. Skibior / IRM Świnoujście

41 Results of the vessel decommissioning under FIFG in Poland 3 closed to fishing. In 2007, the amount of compensation for the shipowner who did not conduct fishery during the additional 26 days in sub-division or 24 days in sub-division reached in the case of a fishing boat up to 15 meters in length 24,633 Polish zlotys. The biggest vessels above 25 meters received 33,440 PLN. In addition, 3,565 PLN was paid for each crew member. In 2008, the compensation for the cessation of cod fishery from 22 May until 30 June and between 1 and 30 September amounted to, for the respective length segments, 23,675 PLN and 32,125 PLN and 3,425 PLN for each crew member. Shipowners who did not respect the ban on cod fishing introduced on 9 July 2007 were excluded from this financial aid. 28 Payments of compensations for the cessation of fishing activities were a measure that had never been used in the fishery management in Poland. Release of payments from the funds of the Sectoral Operational Programme Fisheries and Fish Processing permitted to alleviate the current negative effects of overcapacity in cod fleet. Nevertheless, parallel to these measures, a process of permanent withdrawal of fishing vessels was ongoing. Fishing capacity management, technical protection measures Until the accession of Poland to the EU, the only measure aimed at regulating the size of the fishing capacity consisted of limiting the maximum number of vessels in every length groups that were granted the permission to fish in the Baltic Sea. In 2003, the total number of fishing vessels authorised to fish in the Polish Sea Zone amounted to 994 vessels, including 8 vessels over 30 meters in length and power of 611 kw (fishing trawlers), 408 vessels from 15 to 30 meters in length (cutters) and 578 vessels up to 15 meters in length (fishing boats). 29 In May 2004, Community fishing effort limitations entered into force in Poland. A reference level and the so-called entry / exit scheme, permitting the introduction of any new vessels on the condition of prior withdrawal of a vessel of similar size without public aid were introduced. Limiting fishing capacity through permanent withdrawal of fishing vessels, commonly called scrapping, was undoubtedly an active form of fishing effort management. 39 In accordance with the provisions of the Sectoral Operational Programme of 2004, the planned objective of the fleet reduction programme was a withdrawal of 30-40% of the fishing capacity. 30 Funds foreseen for this objective amounted to million Euro, out of which 83.5 million Euro originated from the EU budget. Apart from regulations on fishing capacity, between 2004 and 2008 fishing activities were restricted by several technical measures, that defined the principles for conducting fishing activities. Among the most important were the fishing quota, decided upon annually (TAC Total Allowable Catch) as well as individual fishing quota allocated to particular fishing vessels. Regulations on the minimum allowable landing sizes of fish as well as mesh size and constructions of fishing gears used in fishery are important from the point of view of resource protection. Rules on closed seasons and protected areas are similarly important measures for resource protection. These measures are aimed at restricting fishing activities during spawning seasons or in spawning areas. 28 Regulation of the Minister of Agriculture and Rural development of 29 April 2002 concerning fleet fishing effort (Journal of Laws of 14 May 2002). 29 Journal of Laws, No 55, item 486 of Sectoral Operational programme Fisheries and Fish processing , Annex to the directive of the Minister of Agriculture and Rural development of 11 August 2004 (item 2027).

42 3 The fishing quota of limited species (cod, herring, sprat, salmon, plaice) allocated to Poland have been established since 2005 in accordance with the regulations of the European Commission. 31 Polish fishing quota allocations of particular fish species in are presented in Table 6. Table 6. Fishing quotas of Baltic fish allocated to Poland in (in tonnes). Species sprat herring cod salmon (number of individuals) plaice Total Source: see footnote 30, data corrected by overfished amounts or underutilised amounts in previous year, that have an impact on the fishing quota in the subsequent year. Exchange of quotas between countries not included. The Total includes salmon recalculated to tonnes according to a conversion rate 1 individual = 5 kg. 40 Data collected in the table shows that Poland s fishing quota allocations between was subject to changes, however the fluctuations referred mainly to pelagic species (herring and sprat) and salmon. Low level of utilisation of available limits of these species (except for 2004) could mean that the quota allocations for pelagic fish did not hamper the fishing possibilities. A contrary situation happened in the case of cod quota allocations. As presented in the graph below between (similarly also to previous years) their utilisation was close to 100%. It should be remembered that the actual catches, including the unreported catches could exceed the established limits. According to the information given by the European Commission, in 2007 the catches were also higher than available limits. Between 2004 and 2008, low efficiency of fleet management through catch limits moved more and more the importance of measures applied to protect the resources towards restrictions in the fishing effort (input control) rather than catches (output control). The basic measure applied to this end consists of placing limitations on the number of days, in which vessels are allowed to conduct fishery. Closed seasons applied to protect cod during spawning had been used in the Baltic since many years, however in fact for the first time in 2007, as a result of the need to limit the fishing effort, additional days with a ban on fishing have been introduced. The graph 21 presents the number of days in subsequent years closed to cod fishing introduced in accordance with the existing legal provisions. The total number of days closed to cod fishing set in 2004, before the accession of Poland to the EU, amounted to 61. In the following years the number has systematically increased up to 164 days in the Western Baltic and 205 days in the Eastern Baltic in of 22 December 2004 fixing for 2005 the fishing opportunities and associated conditions for certain fish stocks and groups of fish stocks, applicable in Community waters and, for Community vessels, in waters where catch limitations are required. Council Regulation (EC) No 52/2006 of 22 December 2005 fixing the fishing opportunities and associated conditions for certain fish stocks and groups of fish stocks applicable in the Baltic Sea for Council Regulation (EC) No 1941/2006 of 11 December 2006 fixing the fishing opportunities and associated conditions for certain fish stocks and groups of fish stocks applicable in the Baltic Sea for Council Regulation (EC) No 1404/2007 of 26 November 2007 fixing the fishing opportunities and associated conditions for certain fish stocks and groups of fish stocks applicable in the Baltic Sea for Council Regulation (EC) No 1322/2008 of 28 November 2008 fixing the fishing opportunities and associated conditions for certain fish stocks and groups of fish stocks applicable in the Baltic Sea for 2009.

43 Results of the vessel decommissioning under FIFG in Poland 3 100% 90% 80% 70% 60% 50% 40% sprat hering cod salmon 30% 20% 10% 0% Source: own estimations. In 2007 and 2008 cod fishing quota utilisation calculated on the basis of official catch reports (without overfished amount estimated by the Commission). Data takes into account fishing quota after exchanges between other Baltic countries. Graph 20. Level of utilisation of the Polish fishing quota Source: same as footnote 31, own estimations. Additional closed days, resulting from an earlier full utilisation of the cod quota not included. Graph 21. Number of days closed to cod fishery in In the beginning of 2008, the Council Regulation (EC) (1098/2007) establishing a multiannual plan for the cod stocks in the Baltic Sea and the fisheries exploiting those stocks has entered into force. The aim of this Regulation is to ensure the sustainable exploitation of cod stocks from the economic, environmental and social point of view. The adoption of the Regulation will permit to avoid political bargaining that took place every year to change the TAC level recommended by ICES (negotiations between the member states and the European Commission). The implementation of the provisions of this regulation is also aimed at reaching biologically safe level of the eastern cod stock population and ensuring full reproductive capacity of both stocks (eastern and western). The level of TAC for cod defined in the regulation depends on the level of fishing mortality and cannot change from one year to another more than +/- 15%. The multiannual plan for the protection of cod stocks introduces also permanent closed seasons (in the Western Baltic from 1 to 30 April and in the Eastern Baltic from 1 July to 31 August) and strengthens the rules on reporting of cod catches, transport and landings.

44 3 Although most measures taken by the fishery administration that had an impact on the functioning of Baltic fisheries referred to the cod fishery, it is worth to remember about the conditions required for the functioning of other fleet segments. Undoubtedly one of the most painful consequences for a part of Polish fishery after the accession to the EU was the necessity to gradually withdraw from fishing for salmon with the use of drift nets. Due to the reporting of incidental catches of harbour porpoise with drift-nets the Council of the European Community decided that from 2005 the use of drift-nets shall be gradually limited (by limiting the number of vessels authorised to use them) until the total ban for drift-nets from January In addition, the Council Regulation also introduced the obligation to use in certain areas acoustic deterrent devices when fishing with gill-nets and entangling nets (mostly cod nets). The requirement to adapt to the Community legislation with regard to the protection of sea mammals caused almost complete elimination of the segment specialised in salmon and sea trout fishery, in 2004 composed of approximately 30 vessels that employed approximately 120 fishermen. In 2004 drift-nets had a dominant share in the Polish catches of salmonid fish (approximately 70%). The share of the catch value of these fish in total Baltic catches amounted to approximately 5% (10 million Polish zlotys). The total ban of drift-net fishery has caused a dramatic decrease in the catches of salmon and sea trout. In 2008, they constituted only 20% of catches in Part of the protective rules that entered into force after the accession to the EU were strengthened, part remained unchanged and some became less strict. Such was the case with the regulations concerning the flounder fishery. Along with the adoption of the EU legislation, the closed season for flounder (from 15 February to 15 May), earlier obligatory for the Polish fishermen, has ceased to cover the statistical ICES sub-division 25 (central coast), where 60% of flounder catches takes place. In consequence, after 2004, the flounder catches increased and in 2005 reached a record high level of over 11 thousand tonnes, almost by 30% higher than in the preceding year [tonnes] Source: own estimations on the basis of data from Sea Fishery Information System (SIRM) and the Ministry of Agriculture and Rural Development. Graph 22. Catches of salmon and sea trout between Council Regulation (EC) No 812/2004 of laying down measures concerning incidental catches of cetaceans in fisheries and amending Regulation (EC) No 88/98.

45 Results of the vessel decommissioning under FIFG in Poland 3 Individual catch limits Individual catch limits are an important element for ensuring the profitability of fisheries. Contrary to the TAC, they are allocated on the basis of national regulations and pertain to individual fishing vessels. The level of available limits depends to a great extend on the level of the available, national TAC (higher TAC, higher limits). The principles of allocation to individual vessels result from the governmental policy which may, by allocating higher quota, favour a certain group (types) of vessels or, through smaller limits, decrease their share in a given type of fishery. Four fish species are among the most economically important species exploited by Polish fishery: sprat, herring, cod and salmon are subject to the TAC, and cod and salmon in addition to individual catch limits. Sprat and herring catches are conducted within one limit for all vessels. Since many years, the limit of cod and salmon allocated to a given vessel depend on the size of a vessel (total length of a vessel). The allocation principles of salmon quota between 2004 and 2009 were subject to certain small changes. The general principle was to divide the salmon vessels into two groups. The first group was composed of fishing boats (vessels up to 15 meters or since 2005 up to 10 meters), which were given a certain part of the national quota (approximately 10%) at their disposal, for joint use. The rest of the fishing quota was divided between fishing cutters having historical rights to salmon fishery, in equal parts (independent of the vessel length). Whereas the way of dividing the salmon catch quota was rarely questioned (due to relatively small importance of this type of fishery), the division of the cod quota was always a subject of difficult negotiations of the government and fishermen. The principle of dividing cod quota into individual fishing limits, as applied in the years resulted from a system created still at the time of IBSFC, based on division of vessels into length classes. In general, bigger vessels received bigger individual limits (due to a bigger fishing capacity) and fishing boats (at first up to 15 meters in length, since 2005 up to 10 meters) used a common fishing quota. In 2003 and 2004 this rule was changed and all cutters, 43 Photo: Stocznia PARSĘTA s.c. T. Jawdyk & M. Cieślak

46 3 notwithstanding the size, received the same fishing limit. In 2005, due to a substantial decrease in the TAC for cod along with high quota for pelagic fish, it was decided to allocate smaller individual limits to big vessels. It was assumed that they could compensate the decrease of the cod quota by higher catches of herring and sprat. Similar situation took place in 2006, when 25-meter and bigger vessels received the same quota as cutters between 15 and 19 meters in length. In 2007, the highest fishing quota was allocated to all vessels above 19.5 m in length (the same amount, including big trawlers). In 2008, due to a further considerable decrease of the TAC for cod, individual limits allocated to vessels above 27 meters were substantially decreased and the highest limits were given to vessels between 15 and 24 meters in length. In 2009, a considerable change has been introduced into the system of division of individual limits for cod. Under this system, 2/3 of the cod fleet from fishery are excluded from fishing (and paid a compensation instead) and higher limits are allocated to the rest of the fleet. Therefore, for some vessel groups the cod limit, notwithstanding a lower TAC, was over three times higher than one year before. The changes of principles for fishing quota allocations paradoxically permitted to ensure better stability in conducting cod fishery. It concerned in particular the biggest (in numbers) group of vessels between 10 and 20 meters in length (Graph 23). The least stable fishing limits were allocated to big vessels above 25 meters in length, included mostly trawlers conducting directed pelagic fishery. The fishing quota in this group of vessels could vary from one year to another by as much as 40%. 120, ,0 [tonnes] 80,0 60,0 40, ,0 0, ,99a 15-19,49b 19,5-24,99c 24,99- d TAC [lenght classes] (thousands tonnes) Length classes in 2009.: a) 12-14,99 m; b) 15-18,49; c) 20,50-25,49; d) 25,5- Source: own estimations. Graph 23: Individual catch limits for cod in different vessel length classes Impact of structural funds on the reduction of fishing capacity of the Polish Baltic fleet Principles of the fleet reduction programme In accordance with the principles of the Sectoral Operational Programme Fisheries and fish processing , the Polish fleet was to be reduced between 2004 and 2006 by 30-40%, i.e. approximately 120 fishing vessels of the tonnage of GT, power of 30 thousand kw, fishing

47 Results of the vessel decommissioning under FIFG in Poland 3 approximately 25 thousand tonnes of fish. 33 The sum foreseen for the implementation of this objective amounted to 110 million Euro, including a contribution of 80.1 million Euro from the Financial Instrument for Fisheries Guidance (FIFG). The funds for fishing capacity reduction constituted the biggest part of expenditures foreseen in the framework of sectoral policy (approx. 40%). The rest of the planned budget was allotted to the renewal and modernization of the fishing fleet (77 million Euro) as well as other measures (66 million Euro) first of all for premiums paid to fishermen for losing their job. As a result of difficult negotiations with fishermen, the Polish administration decided not to introduce too many restrictions concerning the use of funds for fleet scrapping. In order to use the available funds, only a few basic crirteria required by the Community legislation had to be fulfilled. (Council Regulation (EC) No 2792/1999). Firstly, permanent withdrawal concerned only vessels which had carried out a fishing activity for at least 75 days at sea in each of the two 12 month periods preceding the date of the application for permanent withdrawal. Secondly, a vessel owner who applied for compensation for vessel scrapping could not withdraw a vessel younger than 10 years. From the perspective of time, one can say that the application of such principle was not favourable. Although it permitted to achieve the objectives of fleet reduction in a rather short time (reduction of GT), this measure did not target the group of vessels, in which the excess of potential was particularly acute (demersal fleet). In the case of too many applications for scrapping, vessels fishing in the Baltic Sea had the priority. One of the criteria taken into account in the selection procedure was the number of years of operation in fisheries the priority in granting the financial compensation was given to vessels that had been used in sea fishery for the longest period of time. The last selection criteria concerned the ownership time of fishing vessels priority was given to applicants who had owned a vessel for the longest period of time. In practice, however, due to a very big amount of available funds, all vessels that fulfilled the basic eligibility criteria (number of fishing days and age) were accepted in the programme. 45 The decision on whether to scrap a vessel was taken independently by the vessel owner. Very high compensations for vessel withdrawal constituted an incentive for leaving fishery. These compensations depended on the size (tonnage) of the vessel as well as its age and ranged from several dozen thousand zlotys up to over 3 million zlotys. These sums, calculated on the basis of maximum limits allowed by the EC, exceeded by far the market and the insurance value of fishing vessels, applicable at that time. The fourth multiannual fleet guidance programme (MAGP) had started in 1997 and lasted until As a result, the tonnage and engine power of vessels from the EU-15 member states were reduced, respectively, by 107 thousand GT (5.3%) and 929 thousand kw (11.8%). 34 After the completion of the programme, the competences for fishing fleet reduction were transmitted to particular EU member states, thus limiting the competence at the EU level to setting reference levels (i.e. estimating the 33 See footnote WWF Poland, Impact of the EU structural funds on the fleet and Fish resources in the Baltic fisheries sector.

48 3 maximum fishing capacity for particular countries) and to the implementation of the so-called entry / exit regime. In accordance with the principles of this regime, the member states of the EU were forbidden to register new vessels, unless other vessels with the same or bigger fishing potential (measured in GT and kw) were withdrawn from fishery (without public aid) Impact of FIFG on the changes in fishing capacity of the Baltic fleet between Changes in the number, tonnage and power of the fishing fleet Changes in the Baltic fleet occurred after the year 2004 almost entirely resulted from the existing programme of fishing capacity reduction. Only approximately one thousand GT were withdrawn without public aid (in majority in order to be replace by new capacity). Between 2004 and 2008, the capacity of the Polish Baltic fleet was reduced by 17 thousand GT 46% (Table 7). This corresponds approximately to the number of vessels withdrawn in the framework of the fishing fleet reduction programme. 46 Until the end of 2008, the fleet reduction resulted in deletion of 440 fishing vessels that had conducted fishing activities in the Baltic Sea, with a power of 59 thousand kw and tonnage of 17.5 thousand GT from the register. This equalled to 34% of the number, 43% of the power and as much as 47% of the tonnage of Baltic vessels registered at the day of the accession of Poland to the EU. The reduction of fishing capacity, to the extent that had never occurred in the history of the Polish Baltic fishery, was the biggest such programme carried out in recent years in countries that conduct fishing activities in the Baltic Sea and in the entire EU. Photo: A. Wiliński / OIRM Gdynia

49 Results of the vessel decommissioning under FIFG in Poland 3 Table 7. Changes in the Polish Baltic fleet in the years (division by vessel length groups). Lenght groups No. of vessels Difference 2008/2004 GT kw No. of vessels GT kw No. of vessels GT kw Boats up to 8 m Boats 8-12 m Boats 12-14,9 m Cutters 15-17,9 m Cutters 18-19,9 m Cutters 20-22,9 m Cutters 23-24,9 m Cutters 25-25,9 m Cutters 26 m and more Total Source: own estimations based on data from the Fishing Fleet Register, Ministry of Agriculture and Rural Development However, it should be remembered that until the accession of Poland to the EU there were no national fleet reduction programmes of fleet and only regulations limiting the increase of fishing capacity were in force. The scale of overcapacity can be illustrated by the fact that the tonnage of the Baltic fleet just before the accession of Poland to the EU was comparable to the tonnage in 1980, whereas the catches were lower by almost 40%. Also the structure of catches in the 1980s with dominating cod catches (56%), was by far more favourable than the structure of catches in the first years of the 21 st century, when cod had a share of only a dozen percent in overall catches. 47 Due to the already mentioned, relatively easy aid granting procedures, the measures aimed at fleet reduction were executed quite fast. In just a few months of 2004, 180 applications for vessels scrapping were submitted. In 2005, another 260 applications were submitted. Wide interest in the offered funds resulted in their full exhaustion already in March Until June application for vessel scrapping were submitted for a total sum of 411 million zlotys. Apart from vessel scrapping, the operational programme had also foreseen the possibility of permanent withdrawal of a vessel by permanent transfer to a third country or by permanent reassignment of the fishing vessel for other purposes. Since the start of the programme, 79 applications for reassignment of fishing vessel for other purposes for a total sum of co-financing equal to 28 million zlotys (the possibility to export a vessel outside the EU was not used due to a less favourable form of financing of such operation). Physical destruction of vessels and removal of vessels from the register begun a few months after the submission of applications had started. In January 2005, almost 60 fishing vessels were permanently withdrawn from the fleet (Graph 24). In subsequent months, the dynamics of vessels scrapping was considerably lower. From March 2006 (when the submission of new applications was closed) the number of vessels that were each month withdrawn from fishery did not exceed 10 vessels.

50 3 [Number of vessels] No. of vessels GT [GT] Source: own estimations based on data from the Fishing Fleet Register, Ministry of Agriculture and Rural Development. Graph 24. Number and tonnage of Baltic vessels withdrawn with the public aid (cumulatively). 48 In the first place among vessels that had applied to the scrapping programme were the oldest side trawlers with the highest maintenance costs (B-25 type), specialised in cod fishery. Their number decreased by over 70%. The number of vessels in the biggest and the oldest, of 45-years in average, group of cutters of 16 to 18 meters in length, specialised in cod and salmon fishery with the use of set nets also decreased considerably. In over 40% of these vessels were withdrawn from fishery. The decommissioning of some of the youngest vessels, specialised in herring and sprat fishery, was one of unexpected effects of the fleet reduction programme. As compared to May 2004, in 2008 the number of these vessels decreased by one third (25 vessels). The table below presents the data on the Polish fleet that operated in the Baltic Sea between 2004 and 2008, according to the groups of vessels conducting fishery with the use of a given fishing gear (EU segmentation). It can be seen that the highest reduction occurred in the group of vessels of 12 to 24 meters in length that conducted fishery with the use of bottom trawls (24-40 DTS). This segment is directed mostly at cod fishery and other demersal fish, in particular flounder. These vessels may also conduct pelagic fishery in some periods of the year (spring and autumn). The tonnage of the vessels, between 12 and 14 meters in length, that conduct fishery directed in particular at cod, flounder and salmonid fish with the use of set nets decreased by half (12-24 DFN). Relatively smaller reduction as compared to other groups of vessels occurred in the group of big trawlers targeting pelagic fish (24-40 PTS).

51 Results of the vessel decommissioning under FIFG in Poland 3 Table 8. Changes in the Polish Baltic fleet in (division by vessel segments). Segment No. of vessels Difference 2008/2004 GT kw No. of vessels GT kw No. of vessels GT kw PG % -34% -31% DFN % -50% -45% DTS % -37% -31% HOK % -32% -14% DTS % -75% -72% PTS % -32% -34% inactive % -50% -53% Total % -47% -41% Source: own estimations based on data from the Fishing Fleet Register, Ministry of Agriculture and Rural Development Legend: PG Fishing boats up to 12 meters that conduct fishery with set nets DTS Fishing boats up to 12 meters that conduct fishery with active gears DTS Bottom trawlers 12 to 24 meters in length DFN Vessels 12 to 24 meters in length that conduct fishery with set nets HOK Vessels 12 to 24 meters in length that conduct fishery with longlines PTS Pelagic trawlers over 24 meters in length DTS Bottom trawlers over 24 meters in length 49 The already mentioned trawlers, 24 to 40 meters in length, constituted by far a dominant group in the structure of withdrawn vessels 40%, followed by pelagic trawlers over 24 meters in length, that is vessel segments that have a dominant share in the overall fleet composition. Fishing fleet reduction had a varied impact on harbours and fishing ports. The fleet reduction plan did not specify any regional objectives therefore fleet reduction in particular ports and harbours depended PTS 24,4% PG 7,1% DFN 10,8% DTS 17,3% DTS 40,0% HOK 0,3% Source: own estimations based on data from the Fishing Fleet Register, Ministry of Agriculture and Rural Development. Legend: as above. Graph 25. Structure of the Baltic fishing fleet tonnage withdrawn in the framework of public aid (division by vessel segments as of 31 December 2008).

52 3 on the individual assessment of the chances to continue fishing activity, done by vessel owners based in particular ports or coastal regions. The structure of the fleet based in particular ports or fishing harbours (fishing vessel types) had also an impact on the spatial differentiation in the number of withdrawn vessels. As a result of the vessel scrapping programme the fleet in some of the ports was considerably reduced. In 2004, approximately 70 ports or landing sites were registered in the Polish coast. In in 6 fishing harbours (among others in Gdynia) the number of vessels decreased by over 75%. In 12 fishing harbours and ports (among others in Dziwnów, Górki Wschodnie and Górki Zachodnie) the number of vessels remaining active in fishery decreased by 50-75%. In 26 fishing harbours and ports the number of fishing vessels decreased by 2-50% and in 27 harbours the fleet was reduced by less than 25%. The fleet reduction was followed by a decrease in landings in particular fishing ports and harbours, another factor having a negative impact on the importance of fishery in a given region. Changes in the fishing capacity of the fleet were the direct cause of the changes in fishing intensity (fishing effort) and therefore the catch size Ustka Kolobrzeg Wladyslawowo Darlowo Jastarnia Dziwnów Świnoujście Łeba Trzebież Hel (No. of vessels) 2008 (No. of vessels) % reduction Source: own estimations based on data from the Fishing Fleet Register, Ministry of Agriculture and Rural Development. Graph 26. Changes in the number of fishing vessels registered in the main ports from 2004 (May) until One of the main objectives of fleet restructuring was the improvement of technical condition of vessels. Apart from the funds available for modernisation, it could be achieved through scrapping first the oldest and economically least effective vessels. In this context, fleet restructuring programme did not achieve the desired effects. The average age of the Baltic fleet in 2008 (27.5 years) remained almost unchanged as compared to May 2004 (26 years). After excluding the fishing boats which are considerably younger than the cutters, the average age of the cutters amounted to 40 years in 2008, whereas in May 2004 it had reached 36.5 years Impact of fleet restructuring on the fishing intensity In the context of effectiveness evaluation of the fleet reduction programme, the fact that the fishing effort of vessels (number of days at sea) was reduced together with the reduced number of vessels should be regarded as positive. The decrease of fishing pressure was along with the increase in rentability the most important objective of the fleet reduction programme.

53 Results of the vessel decommissioning under FIFG in Poland 3 In 2008, the number of fishing days of the Baltic fleet was by half smaller than the number of fishing days in However, it should be remembered that the reduction achieved in the fishing effort was a result of both the restrictions implemented through the multiannual plan aimed at rebuilding the cod stocks and the earlier closure of fishery as well as the vessels scrapping itself. The table below presents the impact of the programme for the reduction of the fishing fleet on the decrease in the fishing effort in particular fleet segments. The biggest reduction in fishing effort, by 70%, was noted in the case of the DTS group, directed mainly at cod fishery. A similar decrease occurred in the effort of DTS, also directed at cod fishery. An undoubtedly, as already mentioned, negative result was the decrease by almost 40% in the fishing effort of the PTS segment - vessels specialised in herring and sprat fishery. The fishing limits of these two fish species have remained underutilised since many years (mainly due to insufficient capacity and low demand). Table 9. Fishing effort of the Baltic fleet in 2004 and fishing days of vessels withdrawn with the public aid. Segment Fishing effort * Capacity reduction PG % DFN % DTS % HOK % DTS % PTS % Total % *Fishing days in 2004 of vessels withdrawn with the public aid in , segment codes as in Table 8. Source: own estimations. Taking into account the critical sate of cod fishery in the Baltic Sea, the main objective of the fleet reduction should be to reduce the effort directed at cod fishery. Although the fleet reduction programme eliminated a large part of the effort directed at this fishery (approx. 38% as compared to 2004), the situation that had occurred after 2006 (the need to introduce early closures of fishery in and temporary withdrawal of 2/3 of vessels from fishery in 2009) shows that the reduction has still not been sufficient. The effort withdrawn with the public aid from herring fishery, amounting to almost 40% in comparison to the 2004 effort as well as high reduction of the sprat effort (31%) seem redundant and the funds allocated to this objective could have been used better, i.e. for further reduction of the cod effort Impact of fleet restructuring on the size of Polish catches in the Baltic In the catches of Baltic fish decreased by 30%. The decrease in catches was the most visible in the cutter fishery (vessels over 15 meters). In , the landings of this vessel group fell by over 30%. The decrease in the boat fishery was less visible, however the catches diminished by 16%. In 2008, the Polish catches in the Baltic were by almost 40% lower than in The noted relative decrease

54 3 differed between fleet segments. It was the highest among vessels fishing with longlines (12-24 HOK) and the smallest in the group of vessels between 12 and 24 meters, fishing with bottom trawls (Graph 27). Both segments were engaged mostly in cod fishery, however their share, similarly to the share of other vessel groups in overall catches in comparison with the pelagic vessels (24-40 PTS) is considered as relatively small (below 10%). Big pelagic trawlers were responsible for over 70% reduction in the landings of Baltic fish in Their catches decreased by as much as 45 thousand tonnes in four years. VL2440 PTS VL2440 DTS VL1224 HOK VL1224 DTS VL1224 DFN VL0012 PG 52-80% -70% -60% -50% -40% -30% -20% -10% 0% Source: own estimations o the basis of data from Sea Fishery Information System (SIRM) and the Ministry of Agriculture and Rural Development, segment codes as in Table 8. Graph 27. The decrease in catches in particular fleet segments in It is difficult to judge to what degree the fleet reduction programme has been responsible for the decrease in catches. The volume of landings is influenced by several other factors, independent from fleet capacity (i.e. the catch quota, the fishing efficiency, changes in the markets, the economics of fishing). Data on the volume of catches of scrapped vessels is useful to assess the measurable effects of the fleet reduction programme, however it has never been published. An attempt to assess the impact of the fleet reduction programme on the decrease in the catches is presented below on the basis of historical catches of vessels withdrawn with the public aid. To this end, the catches of different species were added up for each withdrawn vessel in the year preceding the year of its scrapping. The total catches for subsequent years ( ) show the annual fishing capacity of the fleet (measured in the actual volume of fish available for fishing) withdrawn with the public aid. The catches taken by scrapped vessels were dominated by pelagic fish sprat and herring in total 35.1 thousand tonnes or 75% of annual catches taken by withdrawn vessels. The fishing capacity in cod fishery decreased by 5.6 thousand tonnes annually and for flounder by 4.5 thousand tonnes. The presented data show the scale of the reduction of fishing capacity and the fish species at which it was directed. However, the actual reduction of the fishing capacity of the Polish Baltic fleet cannot be assessed on this basis nor the prognosis of catches of particular fish species be formulated, because they depend also on several other factors, not related to the fleet capacity (as mentioned earlier).

55 Results of the vessel decommissioning under FIFG in Poland 3 Table 10. Catches taken by vessels withdrawn with public aid in the year preceding the scrapping (in tonnes). Species Total sprat hering cod flounder others Total Source: own estimations o the basis of data from Sea Fishery Information System (SIRM) and the Ministry of Agriculture and Rural Development Socio-economic effects of fleet scrapping The basic objective of vessel scrapping is to establish a balance between the resources and the fishing effort. Too many vessels cause excessive exploitation of the living marine resources and result in low profitability of fishery. Therefore, the adjustment of the fishing capacity to the available resources should contribute to the increase of economic effectiveness of fishery and to ensure stability for those vessel owners who remain in the fishery. The economic results of the Polish vessels fishing in the Baltic Sea in 2007 show that their efficiency improved in comparison to The profitability indicator in 2004 amounted to approximately 2%, whereas in 2007 it reached over 20%. 53 Photo: S. Skibior / IRM Świnoujście

56 3 It resulted from considerable (by approximately 1/3) increase of individual income of fishing vessels, whereas the individual costs remained at almost the same level. The improvement of economic results also resulted from the increase of fish prices after the accession to the EU(mainly cod and salmonid fish). Compensations paid to fishermen (not available to them before) for days closed to fishery also contributed to the increase of incomes. 200,0 150,0 100,0 [mln. zł] 50,0 0, ,0 54 Income Added value Cash flow Economic profit Source: THE 2008 ANNUAL ECONOMIC REPORT ON THE EU FISHING FLEET (SGECA 09-01) ISPRA, 9-13 MARCH 2009 (recalculated at exchange rates EURO-PLN: ; ; ; ). Graph 28. Economic results of the Polish Baltic fleet, The most important factor was, however, the increase of individual catch limits (mainly cod, the most important species from the economic perspective). Withdrawal of a considerable number of vessels with cod fishing permits permitted to increase individual catch limits for these species in the years following the start of the programme notwithstanding a decrease in the overall catch quota. In 2007 the TAC for cod was lower than the 2004 quota by 12%, whereas the average individual limits allocated to cutters increased in average by almost 60% (compare with the graph 23).

57 Results of the vessel decommissioning under FIFG in Poland 3 The loss of work places in fisheries constituted the negative impact of fleet restructuring. Until the end of compensations were paid for lost work places on fishing vessels. Therefore, the number of fishermen who lost their job on a fishing vessel as a result of the implementation of the fleet restructuring programme could be estimated at this level. It constituted approximately 40% of the total number of persons employed in the Baltic fleet in Chapter s summary The accession of Poland to the EU drastically changed the conditions of functioning of the Polish fishery. The obligation to adopt the Community legislation as well as transfer of some competences related to the management of fish resources to the European Commission has set some order in the principles of functioning of the fishing fleet. The grey zone (unreported catches) has diminished considerably as a consequence of a warning, earlier closure of fishery in 2007 and imposing of sanctions for overfishing of the cod quota. The introduction of additional control measures in fishery as well as restrictions imposed on cod landings consequently resulted in further decrease of illegal catches. Structural funds became an additional measure contributing to the management of the fishing fleet, so far inaccessible for Polish fishery. Financial compensations for temporary ban on fishing permitted to alleviate economic consequences of overfishing of resources and could also indirectly postpone the necessity to scrap a bigger number of fishing vessels. Increase of the number of days closed to cod fishery brings the management model applied to this fishery towards a scheme based on effort management. However, the management based on limiting the size of catches (harvest control rule) still remains an important measure to control resource exploitation. Making the TAC level for this species dependent on the fishing mortality level, as stipulated by the multiannual plan to protect cod stocks, permitted in 2008 to limit the political pressure on the final quota levels recommended by ICES. The cod quota allocated to Poland in 2004 had a decreasing tendency, whereas the herring quota increased and the sprat limit fluctuated. In any case the changes were not important in relation to the preceding year. A decline in the cod quota was compensated by bigger flounder catches due to cancellation of the closed season after the accession to the EU (in ICES subdivision 25). Big reduction of the fishing fleet contributed in addition to the increase of individual catch limits for this species. Salmon and sea trout catches were gradually reduced due to the restrictions in the use of drift-nets, until a complete regression of this fishery in New member states were granted a considerable independence in setting the objectives of fleet restructuring as well as in their implementation with the use of the EU structural funds. Experience shows that the fishery administration was not always well prepared to accomplish the objectives set in the framework of the FIFG. The main problem facing the Polish fishery since the end of the eighties was the declining state of cod stocks and in consequence the condition of the fishery sector. The lack of adequate funds postponed the solving of the overcapacity problem. It resulted in the necessity to drastically reduce the fishing fleet at the moment of the accession of Poland to the EU. At present it can be seen that the reduction has not been directed in the right way since the problem of the excessive capacity still exists in the most important segment of the fleet the cod fishery.

58 3 In , the fleets of the old EU member states were centrally managed by the MAGP, which focused fleet restructuring on particular fleet segments depending on exploited stocks, the state of these stocks and the level of accomplishment of the planned objectives. 35 The lack of clear division of the Polish fleet into vessel segments and focusing the fleet reduction on particular segments (cod vessels) was the basic mistake made in the implementation of the FIFG in the years Unjustified reduction of the capacity of pelagic fleet was the side effect of these measures which resulted in ineffective utilisation of catch limits allocated to Poland. Adoption of maximum compensation levels allowed by the EC in separation from the economic reality of the Polish market caused an increase of costs of the invested capital, a decrease in mobility and in consequence the efficiency of the invested capital and growth of expectations with regard to the future compensations. However, smaller competition in fishery resulted in an improvement of the basic economic indicators of the fishing fleet. 35 WWF Poland, Impact of the EU structural funds on the fleet and Fish resources in the Baltic fisheries sector. 56 Photo: S. Skibior / IRM Świnoujście

59 4. Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries Report on the research carried out among fishermen, fishing vessel owners, representatives of local administration and fishery organisations. Dr. Bogusław Marciniak Photo: WWF / B. Marciniak

60 Introduction The research project, carried out in the Sea Fisheries Institute, was aimed at assessing the implementation of the programme of permanent withdrawal decommissioning of fishing vessels from fisheries by those fishermen who had voluntarily decided to use the opportunity to scrap their vessel and also by those for whom this decision meant a temporary or permanent cessation of work in fisheries. Another objective focused on presenting the socio-economic impact of programme s implementation for the inhabitants of coastal fishing communities for whom the fishery was an important source of income and an important element of their culture. The research results should permit to state whether the objectives and measures set by the authors of the vessel decommissioning programme have been accepted by fishermen and inhabitants of fishing villages, to what purpose have the compensations received for the decommissioning been spent and if fisheries is still an attractive source of earning money for those who have decided to practice this profession. We shall also try to present the opinions on mistakes committed during the implementation of the programme as well as changes in the implementation procedure proposed by respondents with a view to avoiding similar mistakes in the next edition of the programme. 58 The main objective of this part of the study was to verify the most often presented statements related to the Sectoral Operational Programme Fish: The conditions for fishing vessel scrapping established by the authors of the SOP Fish only partly decreased the fishing effort directed at cod fishery. Considerable decrease of the number of vessels active in fishing only to a small degree decreased the number of persons for whom work in fisheries constitutes one of the sources of income; The criteria that qualify vessels to scrapping were not appropriate and as a result many scrapped vessels could have been used for other purposes than fishery; Many substantial organisational mistakes were made during the implementation of the Sectoral Operational Programme Fisheries and Fish Processing , mainly in the information policy related to the programme s guidelines and the methods of implementation; The funds obtained through participation in the programme had a very limited impact on the changes in the socio-professional structure of local fishing communities. The research work was carried out in coastal fishing villages where: Work in cutter fishery has multi-generation traditions and constitutes an important, but not the only source of income for many inhabitants; Boat fishery is carried out in one or two basins, e.g. the Gdańsk Bay, the Vistula Lagoon; Work in the fishing sector is in many cases linked with professional activities in other sectors, in particular tourism. The research was to cover the following issues: Social impacts of the decision on vessel scrapping for the vessel owner, his family members, members of the crew and their families; Social impacts of the decision on vessel scrapping for other members of the community;

61 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 Analysis and assessment of vessel scrapping procedure; Analysis of the information sources and the information policy of the national administration authorities responsible for the scrapping programme; Assessment of the vessel scrapping process; Analysis of the purposes for which the compensations obtained for permanent withdrawal of vessels from fishing operations were used; Assessment of co-operation between the beneficiaries and the regional offices of the Agency for Restructuring and Modernisation of Agriculture (ARMA) as well as local administration authorities; Analysis of problems and difficulties in the programme implementation; Drawing up a list of amendments proposed by respondents which improve the functioning of the Sectoral Operational Programme for the years Research methodology The research was carried out with the use of different research methods and techniques, which were aimed at conducting a multilayered analysis of social situation. Especially important were the materials gathered with the use of: Deepened unstructured interviews with fishermen and persons having important social functions in places where the research was carried out; Paper and pencil interviews; Analysis of official documents; Focused group interviews. 59 Inhabitants of localities in the Polish coast such as: Tolkmicko, Krynica Morska, Piaski, Sztutowo, Mikoszewo, Jastarnia, Hel, Władysławowo, Darłowo, Kołobrzeg took part in the research. Respondents fishermen who took part in our research were part of the older or middle age group. 56% of respondents belonged to the age group years, 9 respondents (39%) were part of the age group 50 and over 50. Only one fishermen among those who participated in the research was younger than 29 years old. 83% of fishermen who took part in the research had at least vocational secondary education, and as many as 35% of them were graduates of secondary and high schools. In majority, they received education in professions directly linked to fishery, e.g. they were graduates of the College of Sea Fishery. All respondents had over six years experience as sea fishermen, and 65% of them had worked in this profession for 21 and more years. 78% of respondents fishermen were owners of a cutter or fishing boat and at the same time worked as fishermen. 14% of respondents were owners of a boat or a cutter and at the same time a crew member. Only two respondents, owners of a scrapped vessel did not work as fishermen. Foto: imię i nazwisko autora

62 4 For 89% of respondents fishermen their work as fishermen was the main source of income for the whole family. Four respondents (17% of interviewed fishermen) had other sources of income that brought more money than work in fishery. These persons were most often employed in tourism or worked abroad during the bans on fishing imposed by legislation Opinions of fishermen who took part in the programme of vessel decommissioning as well as representatives of local administration authorities of coastal districts. Research report Main sources of information on the Sectoral Operational Programme Fisheries and Fish Processing (SOP FISH) Many respondents mentioned difficulties in the access to the information on the programme, pointing in particular to incomplete information and inadequate presentation. Regional offices of the Agency of Restructuring and Modernisation of Agriculture were responsible for informing fishermen on the conditions for the implementation of the decommissioning programme. They reached directly 48% of respondents with their information programme. A little less 39% of respondents were informed through the regional sea fishery inspectorates. Surprisingly, as many as 35% of respondents were obliged to use the information provided by friends fishermen and also through the media (30%). This confirms the opinion that information provided by responsible institutions did not reach all fishermen or reached them in a way that made proper access to the programme difficult or even impossible. It was therefore necessary to use other sources of information such as friends, media, fishermen s association or Internet. It is surprising to note the very low rating given to the administration authorities of coastal districts in this matter. Only one respondent fishermen mentioned district authorities as being a responsible source of information on the programme. District Photo: WWF / B. Marciniak

63 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 authorities should be interested who and on what conditions wants to take part in the programme and also what would be the consequences of the programme implementation to socio-economic condition of the district. 2. Assessment of the access to information on the Sectoral Operational Program Respondents evaluated the degree of accessibility of the information on the programme as very low. Most respondents fishermen (78%) evaluated the received information on the programme as incomplete or insufficient. According to the respondents it was not reliable without further consultations with other institutions or persons. Only 12% of respondents were satisfied with the quality of the information on the programme and the presentation. 3. Co-operation of fishermen and regional offices of the Agency of Restructuring and Modernisation of Agriculture (RO ARMA) Many negative opinions were related to the co-operation of fishermen and RO ARMA. 57% of respondents fishermen expressed the view that the assistance of RO ARMA in preparing the application was insufficient. The respondents often underlined that as a result of the incompetence of the Agency s employees they were obliged to come to ARMA several times to correct the documentation delivered earlier or to submit additional documents. 43% of respondents expressed their dissatisfaction with the delayed payment of money, often done on the very last day foreseen in the provisions. The interviewed fishermen stated that regional fishery inspectorates should be included in the programme implementation process, in particular in delivering information as well as in preparing the applications. 61 The opinions of respondents fishermen: Cutter fisherman, aged between 30-39, work experience in fisheries between 6 and 20 years: The entire process should be monitored by a local fishery inspector. We know him and see him almost every day. He is a concrete man and not an anonymous office worker. We can always count on his assistance and he is present here. Then nobody will lose time to go the Agency in a big city. People there have no idea about the sea and work in fisheries. Many changes to the SOP programmes and the programme implementation proposed by respondents prove the dissatisfaction with the co-operation between fishermen and the Agency. Respondents fishermen propose: The information on the required procedure should be translated from the legal language to the language understandable for most fishermen; The Agency should recognize the documents from other institutions, e.g. the Maritime Chamber; The co-ordination of work should be improved in order to avoid a situation where fishermen are obliged to complete over and over again the documentation required by ARMA; The time for application processing should be radically shortened; Foto: imię i nazwisko autora

64 4 One and always the same representative of the agency should be delegated to monitor the vessel scraping process from the beginning to the end; Unambiguous interpretation of legal provisions should be secured so that other office workers do not interpret the provisions in any other way; People responsible for the project s implementation should be adequately prepared in terms of know-how and should not be moved from their posts too often, because in such case they cannot gain the required experience; Methods and provisions should be secured in order to avoid permanent destruction of vessels withdrawn from fishery. The opinions of respondents: 62 Boat fisherman, aged 40-49, work experience in fisheries - 21 years and more: The Agency should reach fishermen with information on the programme several months before its start. It should organise a training on how to fill the applications and should monitor each fisherman in applying for a compensation. In reality the service was very bad. They gave us some documents and then we had to do everything ourselves. No question about assistance. We were faced with incompetence and arrogance of office workers. The Agency should employ people who want to help us and who have the knowledge about the sea and fishermen. Cutter fishermen, aged 40-49, work experience in fisheries - 21 years and more: The number of documents required by the Agency should be limited. The validity period of documents should be prolonged in order to avoid situations that after a refusal of one document the remaining ones lose their validity. The Agency should be responsible for the whole process since it disposes of adequately trained personnel and monitors the entire programme. The Agency representatives should understand that I am a fisherman and know a lot about fishery but have no knowledge on the constantly changing legal provisions. 43% of fishermen who participated in the research expressed an opposite opinion. They underlined that they faced no difficulties in relations with the representatives of the Agency. Many of them expressed their recognition of the readiness of the Agency s representatives to help in the right interpretation of legal provisions and patience in direct contacts with fishermen. The respondents stated that such relations with the Agency are possible if the same office worker is responsible for a given application from the start to the end of its processing. 4. The opinions of fishermen on the proposal for decommissioning enclosed in the SOP FISH Owners applying for vessel scrapping and the crew members of these vessels were asked to express their opinion on the possibility offered in the programme to withdraw vessels exploited by them from fishery: 68% of respondents gave positive opinions to the possibility offered in the programme to withdraw their vessels exploited from fishery. Respondents who presented such opinion had the following arguments behind:

65 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 There is less and less fish because the fishing grounds are overfished to such an extent that fishery cannot guarantee at present adequate resources to make the living of the family; The vessel owned by them is so old that any modernisation would not be profitable and they cannot afford to buy a new one; It is a good solution for older fishermen, retired or too ill to be able to continue working in this profession. 52% of respondents (part of respondents expressed positive opinions as well as negative opinions, therefore after adding up the number of respondents we get more than 100%) have a different opinion. They think that this solution is not favourable for the Polish fishery although they had benefited from it themselves. The respondents underlined that withdrawal of a certain number of fishing vessels will not diminish the problem of an excess in the fishing effort in the Polish fishery. Part of the money obtained as compensation for scrapping a vessel is again invested into fishery. Fishermen use this money to buy new fishing gears, equip their vessels with modern navigation devices, install new, better engines and therefore increase the fishing capacity of the remaining fishing fleet. Great dissatisfaction, causing negative attitude towards the programme, resulted from scrapping of vessels in good technical condition, which could continue to fish for many years. The opinions of respondents: Boat fisherman, aged lat, work experience in fisheries between 6 and 20 years: It is wrong to destroy good vessels. Many laminated boast used in the Lagoon were scrapped. They could have been used for various purposes for many years. It was also wrong to destroy many old, wooden boats that had their history and could have been placed in museums. 63 Photo: Foto: imię WWF i nazwisko / G. Okołów autora

66 4 Cutter fisherman, aged 60 and more, work experience in fisheries - 21 years and more: Lack of economic perspectives for the work in fisheries forced this decision. Not a single authority of the national administration helped or expressed interest in the situation we are in. Also the Sea Fisheries Institute did not express interest in our fate and the future of fishing vessels. The vessels in the worst condition should be scrapped and not those that could be used for many years. Where were the people from the Sea Fisheries Institute when this criminal decision was taken? Is our country so rich to tolerate such a wastage? The opinions on the possibility to transfer vessels withdrawn from fishery to a third country, non member state of the EU. 61% of respondents who participated in the research confirmed that they were aware of the possibility to transfer a vessel withdrawn from fishery in Poland to a third country, non member of the EU. No one from among the respondents used this possibility. As the reasons behind they mentioned the fact that: At the moment of taking the decision on the withdrawal of their vessel from fishery they did not have adequate information on who and on what conditions can do that; The procedure of such transfer was according to fishermen too complicated and required a much longer process of vessel transfer than the owners of boats or cutters could accept; The transport of a boat to a third country would be very expensive and the transfer procedures presented to fishermen did not guarantee that the costs would be covered by the new owner; The Agency s workers suggested not to use this opportunity due to very complicated and lengthy transfer procedures; This offer had appeared after the signing of scrapping decision by the fisherman; The scrapped vessels were not suitable for use in deep sea fishing. According to an unanimous opinion of fishermen, this unrealistic opportunity to transfer a vessel to a third country was offered to them merely to defend in front of the public the unjustified process of permanent, physical destruction of vessels that could have been exploited for years. This proposal, according to many fishermen, only highlighted morally reprehensible process of the programme implementation. 6. Reasons for taking a decision on the scrapping of a fishing vessel The decision on the withdrawal of a fishing vessel from active fishing operations was not an easy decision for most of respondents. It meant leaving permanently or temporary the profession practiced for years, with the acquired skills and experience, as well as the necessity to revise the plans for the nearest and distant future. As the main reason for the decision the respondents fishermen mentioned lack of professional stability and the lack of real perspectives for guaranteeing an income adequate to make the living of a family out of fisherman s profession. This reason was pointed by 57% respondents. The reason pertaining to inadequate income was chosen by 48% respondents who also mentioned that the character of fisherman s profession does not permit to undertake any other permanent job. A similar reason, which

67 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 Table 11. Reasons for the decisions on the scrapping of a boat or a cutter taken by respondents fishermen. Reasons Number % Lack of stability and good perspectives for the future Income from fishery not sufficient Exploitation costs too high 9 39 Necessity to obtain financial means to improve equipment and modernise other vessels 5 22 Necessity to pay off debts for investments in fishery 3 13 Limitations of catches 3 13 Pension age of the vessel owner 3 13 Lack of compensations for obligatory stay in the port imposed by administrative rules 2 9 Good price offered for scrapping 2 9 Lack of people willing to work as crew members 2 9 Bad health (rheumatism) 2 9 Vessel age 2 9 Vessel size 1 4 Note: the total percentages equal to more than a hundred, because every respondent could choose more than one answer. is according to the respondents too high cost of the exploitation of fishing vessels versus too low prices offered for fish, was mentioned by 39% respondents. 21% fishermen pointed to the necessity to obtain additional financial means for modernisation or equipment in fishing gears and navigation devices other cuter and boast that remain in exploitation. 13% respondents mentioned the approaching pension age of the vessel owner, very old age of the vessel not allowing any further renovation, too small size of the vessel not permitting to differentiate the catches and to go fishing to more distant fishing grounds as the main reasons for scrapping. 9% of respondents mentioned the following reasons for scrapping: Lack of compensations for obligatory stay in the port imposed by administrative rules; Climate conditions not allowing to continue fishing; Attractive prices offered for vessel scrapping; Bad health (in particular progressive rheumatism) not allowing to continue work at sea 65 In addition 9% of respondents recalled the lack of people willing to work as crew members. The lack of possibility to guarantee permanent jobs for the crew members by the vessel owner and to guarantee the payment of financial compensations for days closed for fishing were given as the main reasons for the lack of willingness to work in the fishery sector. The opinions of respondents: Cutter fisherman, aged 30-39, work experience between 6 and 20 years: Lack of certainty how the situation in fishery will look like in the coming years. The prices for fish have not changed for years and the exploitation costs of the cutter grow systematically, mostly because of the Foto: imię i nazwisko autora

68 4 increasing fuel prices. Restrictions imposed on fishery by the introduction of new and new limits are also a reason behind the fact that money received for fish are not sufficient to cover the fuel costs and remunerations of the crew. I would like to ask why a good employee can get good money everywhere but not in fisheries? Work in fisheries does not guarantee any stability and one cannot make the living out of it if he does not have an additional job. Boat fisherman, aged 50-59, work experience - 21 years and more: The lack of fish in the Lagoon was the reason behind the decision. Household and boat maintenance costs increase systematically and the incomes from fisheries are smaller and smaller. There are no adequate facilities for handling fish in the port and no local processing. Two wholesalers buy as much fish as they want and do not care what happens to the rest of the catch. There is no minimal price. Only wholesalers set the prices. Boat fisherman, aged 50-59, work experience - 21 years and more: I decided to scrap my vessel due to the money offered by authorities. I will go to pension soon and I know that nobody will pay me as much money if I decide to sell my boat to other fishermen Difficulties in the implementation of the SOP FISH vessel withdrawal component Among elements that caused difficulties in smooth and correct implementation of the programme respondents mentioned in particular a considerable amount of obligatory annexes (86% of fishermen) that required a lot of time to collect (travelling to various institutions located in big towns was especially time consuming). 69% of fishermen who participated in the research complained about complicated, multi-stage application procedure, never experienced by most fishermen. The same percentage of fishermen mentioned the lack of professional information on the project. The legislative provisions regulating the principles for fishing vessels scrapping were subject to changes during the functioning of the programme and were differently interpreted by different office workers. Respondents claimed the incompetence of office workers and many mistakes made by them. These mistakes very often necessitated frequent visits to the offices of the Agency. In consequence the travels lasted sometimes the whole day, forcing fishermen to take a break in the work. The respondents pointed to the need to employ well trained consultants in district offices who could help fishermen in the correct preparation of applications and give information on the principles of programme implementation. The opinions of respondents: Cutter fisherman, aged 50-59, work experience - 21 years and more: Nobody was interested in my situation. I had to make debts in order to be able to pay the exploitation costs of the vessel. The rentability of catches systematically decreased. I was left all by myself. At present it is the same. I am unemployed with no right for unemployment benefit and health care. The authorities do not care because they think I have so much money that I do not know what to do with them. 61% of respondents fishermen pointed to the problem of the language used in formulating the proposal for fishing vessel withdrawal that was incomprehensible for fishermen. According to them, the

69 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 Table 12. The opinion of respondents about the difficulties in the implementation of the vessel withdrawal programme. Type of difficulty Number % Number of requested annexes Lack of professional information on the project Complicated (multi-stage) procedure Consultation centres located too far away Incomprehensible language of proposals (difficulties in understanding the presented information materials) Small interest or lack of interest from the district authorities Excessive distance to consultation centres Others 2 9 Note: the total percentages equal to more than a hundred, because every respondent could choose more than one answer. What is your opinion on the selection criteria for scrapping of fishing vessels as specified by the SOP? no opinion 17% good criteria 17% 67 bad criteria 66% Graph 29. Opinion on selection criteria for scrapping of fishing vessels specified in the SOP FISH. programme was written in a legal language, completely incomprehensible for most fishermen. They had a lot of problems not only to understand the meaning of many applied terms but also with the legal interpretation. 61% of interviewed fishermen mentioned small interest or lack of interest from the district authorities as a considerable obstacle and 57% of respondents mentioned also the difficulties in swift payment of compensations. 8. Evaluation of the selection criteria for scrapping of fishing vessels as specified in the Sectoral Operational Programme FISH One of the conditions of success of the vessel withdrawal programme was to set the right criteria for selecting fishing vessels for permanent withdrawal. These criteria determined whether the programme reached its main objective a decrease of fishing effort of the Polish fishery, in particular cod fishery and at the same time if it gained social approval among the people concerned. 66% of respondents fishermen assessed the selection criteria for withdrawal of fishing vessels from fishery as bad. The respondents who were of this opinion declared that: Foto: imię i nazwisko autora

70 4 The selection criteria were set by the authorities, with almost no consultation with fishermen. Most fishermen had no influence on these criteria (this opinion was not shared by representatives of fishermen s organisations who took part in meetings organised by the Fisheries Department of the Ministry of Agriculture and Rural Development); It was wrong to propose high financial compensations for scrapping vessels which could continue to fish for many years. As a result of such selection, also fishing vessels that could have been reassigned to other uses and exploited for many years were scrapped; Collecting documents required for withdrawal of an old vessel from fishery was much more difficult than for a new vessel; As a result of such selection not only a number of good vessels were withdrawn from exploitation, but also the inhabitants of coastal localities were greatly dissatisfied with this procedure and called the destruction of such vessels as unprecedented wastage of national wealth. The opinions of respondents: 68 Boat fisherman, aged 40-49, work experience - between 6 and 20 years: It is a scandal to promote scrapping of vessels, practically new and fully fit for long exploitation. This is a crime done by the bureaucrats from the European Union and seconded by the Polish government. If the vessel age is taken as a criteria, then old vessels that are falling apart should be scrapped and not, as it is happening now, new ones, still ready for long exploitation. Photo: WWF / G. Okołów

71 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 Cutter fisherman, aged 40-49, work experience - 21 years and more: The overall principles are good but the final effect disastrous. The scrapped vessels were not the oldest ones. On the contrary the youngest were scrapped, usually well equipped and with a better fishing efficiency than the others. 17% of respondents fishermen described the selection criteria for scrapping of fishing vessels as good. They underlined that they had planned to sell or scrap their vessels much earlier. The sums of money received as compensations within the scrapping programme were higher than the sum they could have received for selling the vessel. The same share of interviewed fishermen abstained from expressing their opinion and stated that the programme has had both positive and negative aspects and its evaluation depends on the individual socio-economic situation of every fisherman (age, incomes, successors willing to take over the job). 9. The level of satisfaction with the received financial compensation Vessel owners received financial compensations for permanent decommissioning of a vessel. Their amount depended mostly on the tonnage and the age of the scrapped vessel. Crew members who were not owners or co-owners of a vessel were eligible for financial compensations equalling to 10 thousand Euro each. The compensations were granted on condition that they committed themselves not to take another job in the fishery during one year. Not all fishermen were satisfied with the amount of financial compensations offered to them in the framework of the programme, but more fishermen were satisfied than dissatisfied % of fishermen who participated in the research expressed their satisfaction with the amount of received financial compensation. They stated that they would not be in a position to get a sum comparable to the compensation when selling the vessel on the market. Also those respondents who had planned to end their work in fisheries expressed satisfaction with the compensation and had tried to sell the vessel since a long time. They could not however find a person willing to purchase their vessel, mainly because boat fishery does no longer guarantee a stable job that can make the living of a family, due to various restrictions imposed on fishing and smaller and smaller number of fish. Are you satisfied with the amount of received financial compensation? no opinion 9% not satisfied 39% satisfied 52% Foto: imię i nazwisko autora Graph 30. Satisfaction with the amount of received financial compensation.

72 4 The opinions of respondents: Boat fisherman, aged 40-49, work experience - between 6 and 20 years: Never and nowhere I would sell the vessel for such money. Frankly speaking, there was no one interested in buying. Who would like to work I fishery today? It is an unstable job with no future. And the vessel is too old to find a good client. I did it now, because I have to pay my debts. 70 However, 39% of respondents fishermen were not satisfied with the amount of received financial compensation. As to the reason for their dissatisfaction, part of them mentioned the fact that they quite recently they had spent a lot of money on complete renewal of their vessel. Lack of earlier information on the programme makes them think at present that they had invested this money for nothing. Earlier information on the conditions and methods of programme implementation could have prevented it. Quite a big group of fishermen boat and cuter owners had decided to scrap their vessels mainly because they had to pay their debts from earlier investments in fishery. Others were dissatisfied due to the wrong evaluation of the technical condition of their vessels. Notwithstanding the old age, the vessel was, according to them, still in very good technical condition. Almost all dissatisfied fishermen complained that prolonged administrative procedures along with still decreasing exchange rate of the Euro caused the amount of received compensation to be much lower than expected. Big dissatisfaction was also caused by inadequate levels of compensation, according to respondents, paid to the crew members of scrapped vessels. Other reason for dissatisfaction with the amount of received financial compensation was the necessity to start another job, that, according to respondents, did not correspond to their professional skills and did not bring the same satisfaction as work in fishery. 10. The analysis of purposes for which the financial means received for scrapping were spent One of the key aspects of our research was to find the answer for what purposes the beneficiaries of the programme spent the money received as compensations. The biggest group of respondents fishermen (48%) invested the money, entirely or partly, in shares on stock exchange and in stable growth investment funds. 10 out of 11 respondents, who invested the money in such a way were cutter owners and the compensations they received were much higher than in the case of boat fishermen. 35% of respondents fishermen invested the received money into an economic activity related to fishery. The money were spent on equipment (mainly navigation devices and security equipment) for boats and cutters that remained in exploitation. Part of this money was spent on the development of land infrastructure, such as the transport of landed fish, smoking or other forms of fish processing. 26% of respondents fishermen devoted this money to financially assist other members of the family mainly children. Financial means were used to pay for the education in secondary and high schools, located in towns distant from coastal localities. Part of this money was given to children as a dowry for marriage or financial assistance in the first years of professional carrier. Also 26% of respondents fishermen spent the money on economic activity not related to fishery. Money were invested in particular into the tourist infrastructure belonging to the family by building additional rooms for tourists, improving the sanitary conditions of premises rented to tourists or establishing homemade food services. In some cases money was invested in buying land for the construction of buildings, mainly new houses. 22% of

73 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 Table 13. Purposes for which the money obtained from the SOP FISH were spent. Purpose Number % Savings Economic activity related to fishery 8 35 Financial assistance to other family members 6 26 Economic activity not related to fishery 6 26 Payment of debts 5 22 Purchase of consumer goods 2 9 Others 3 13 Note: the total percentages equal to more than a hundred, because every respondent could choose more than one answer. respondents used the compensation to pay off debts made for the renewal of fishing vessels and purchase of new fishing gears. These respondents stated that without the possibility to withdraw a vessel for such a big amount of money, they would be faced with great difficulties to pay back the rash loans. At the same time they underlined that if it were not for their difficult financial situation they would never take a decision to sell their boat or cuter. Only 2 respondents purchased luxurious goods (a car, audiovisual equipment). This fact debunks a widely spread opinion that most of the programme beneficiaries spent the received money solely on purchase of goods that were redundant for them. At the time of research, three respondents supported themselves and their family with the money. 71 Equally important information consists of the fact that money from compensations were spent mostly in the district inhabited by the respondents. 65% of interviewed fishermen proceeded that way. 35% spent the money obtained as compensation in the voivodeship they inhabited. These money was invested in local banks to be in the future allocated to their children - to their education or purchase of flats. 11. Evaluation of the implementation efficiency of the fleet reduction programme As a result of the implementation of the Sectoral Operational Programme the Polish fishing fleet was reduced by 40%. A question arises whether the main goal of the programme - the adjustment of the size of the Polish fishing fleet to the available fish resources - was reached. In consequence, an answer to another question should be sought whether the implementation of the programme s objectives permitted the other, professionally active fishermen to conduct fishery in such a way as to guarantee themselves and their families that this professional activity would be the source of income permitting them to maintain a normal standard of living. 78% of fishermen who participated in the research were of the opinion that the above mentioned goals had not been reached. According to these respondents, it was proved by the implementation of new and new restrictions in fishery. Also the technological progress stands behind the constant increase of the fishing capacity of the fishing vessels remaining in exploitation, thus eliminating the temporary decrease in the fishing capacity achieved through fleet reductions. The respondents underlined that the programme and especially the ways of implementation had also severe negative social consequences Foto: imię i nazwisko autora

74 4 such as a feeling of socio-economic degradation of some fishermen, an increase of unemployment in coastal districts, loss of social status and prestige by fishermen without a job as well as a feeling of helplessness in relation to the national administration. Has the reduction of the fishing fleet permitted to adjust it to the available fish resource? Yes 22% No 78% Graph 31. The opinions of respondents on the effectiveness of the fleet reduction programme. 72 Only five respondents boat fishermen stated that as a result of the programme implementation the number of boats fishing in the same basin was considerably reduced, therefore increasing the number o fish that could be caught by the still active boats. Maybe it would be possible to undertake some other measures to effectively protect fish resources without reducing the size of the fishing fleet and the number of employed fishermen. According to the respondents, this goal could be reached with the following measures: Table 14. Measures that could be undertaken to protect available resources without reducing the size of the fishing fleet and the number of employed fishermen. Specification Number % Permanent compensations for temporary fishing restrictions imposed on particular fish species or temporary limitations of the fishing days Change in the price structure of landed fish Introduction of a subsidies system to fisheries Introduction of a new types of fishing gears allowing for a better selectivity in catches and less disturbing the sea bottom Shorter fishing seasons 6 26 Introduction of a fleet segmentation system 4 17 Smaller differentiation of targeted fish 0 0 Others 7 30 Note: the total percentages equal to more than a hundred, because every respondent could choose more than one answer. All respondents fishermen proposed the introduction of permanent financial compensations for temporary fishing restrictions imposed on particular fish species or temporary limitations of the fishing days. The introduction of these compensations would permit, according to the respondents, to secure

75 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 stable income to the crew members, regardless of new and new fishing restrictions. The introduction of permanent compensations should also considerably limit the emigration of fishermen in search of work. Also 100% of respondents fishermen propose to change the price structure of fish, thus supporting the implementation of economic measures instead of time and quantitative limits and fishing restrictions. 83% of respondents fishermen were in favour of the need to immediately start subsidizing the fisheries sector, pointing to the fact that it is a widely used system in many other countries of the European Union. 48% of interviewed fishermen proposed to introduce on wide scale new types of fishing gears, allowing for a better selectivity of the gears and less disturbing to the sea bottom. According to fishermen, it will permit to considerably reduce the losses in fish resources caused by unwanted by-catch or catch of unwanted and undersized fish species. 26% of respondents fishermen proposed to further shorten the fishing seasons and 17% were in favour of the introduction of fleet segmentation, i.e. a declaration as to the targeted fish species. Other measures were also mentioned (by 7% of respondents-fishermen), such as: Introduction of the power restrictions imposed by the law on engines installed in fishing vessels; Introduction of a ban on pelagic fishery during spawning; Permission to fish for cod with the use of bottom nets of a given height; Establishment of more transparent legal regulations, not permitting any circumvention and protecting against the influence of lobby groups; Establishment of a good port facilities to handle landed fish as well as processing facilities and introduction of an obligation to deliver landed fish to authorised licensed purchase points The opinions of fishermen on the possibility to continue the programme for the withdrawal from fishery. When asked whether the programme the programme for the withdrawal from fishery, the respondents who took part in the research answered as follows: Do you think that the programme of permanent withdrawal of vessels from fishery should be continued? Yes 32% No 68% Graph 32. The opinions of fishermen on the possibility to continue the vessel withdrawal programme. 68% of interviewed fishermen are of the opinion that the withdrawal of vessels from fishery should not be continued. Those presenting such opinion gave the following reasons: Scrapping of fishing vessels should be stopped because it contributes to a general destruction of the Polish fishery, in particular coastal fishery. Already now, in some coastal localities there is not a single fishing vessel and not a single fisherman;

76 4 Scrapping of fishing vessels in practice reduces many work places directly or indirectly linked to fisheries; Crew members, deprived of work, sooner or later will leave their places of residence and will migrate in the search of new jobs to other localities or abroad. According to the respondents, it will be a one way migration. The opinions of respondents: Cutter fisherman, aged 40-49, work experience between 6 and 20 years: This process should be stopped to preserve the profession of fisherman. Fishery is on its way to extinction. We lose more and more work places, whereas a fisherman is a multi-generational profession. Polish fishermen will soon become slaves working under foreign flags. However, some of them will stay here and make their living by fishing. If things continue to go that way, all cutters will be destroyed an there will be no cutter fishery. There should be more assistance from the state, e.g. a forced stay in the port should be compensated with a fair financial compensation. What state is that, where a man who wants to work cannot do so? 74 32% of respondents fishermen were of the opinion that the decommissioning programme should be continued. This programme is particularly attractive for those who had planned or plan to terminate their work in the fishery sector. The reasons for such a decision could be: health of the vessel owner and crew members, not permitting to continue working as fisherman, pension age or a decision to start working in a new profession, i.e. in tourist services. Some fishermen in favour of the programme s prolongation are of the opinion that this programme should at all times give the possibility for a fair termination of work in fisheries. According to them, due to the systematic aging of fishermen s population as well as the lack of candidates willing to work as fishermen, very soon there will be no one willing to work on the fishing vessels that have remained in exploitation. They also pointed to the very advanced age of a great part of the fishing fleet and the necessity to gradually reduce it due to the impossibility to meet the security requirements. However, those in favour of continuing the vessel withdrawal process recommended the following: The officials who are responsible for the programme and who monitor its implementation should be much better prepared to execute their tasks and should respect much more fishermen, who have the right not to know all legal provisions as well as their legal interpretation; The contracts and applications should be simplified; The amount of a compensation for vessel scrapping as well as the compensation for temporary cessation of work in fisheries should be increased; The declaration on permanent resignation from work in fishery should be replaced by a temporary resignation. 13. The opinion of fishermen on the impact of financial means obtained for vessel scrapping and retirement to fishermen s pension on the recovery of localities dependent on sea fishery The administrative authorities of coastal districts and the authors of the Sectoral Operational Programme Fisheries and Fish Processing assumed that the financial means obtained for

77 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 vessel scrapping as well as retirement to fishermen s pension would have an impact on the recovery of localities that depend on sea fisheries. According to most of respondents this has not been the case. 65% of respondents fishermen think that the financial means obtained as compensations are too small to have a considerable impact on the improvement of economic conditions in coastal districts and localities. They had changed, for a short period of time, the financial strategy of some families but not the entire localities. This was in particular the opinion of fishermen from localities where boat fishery dominates. Opinion of respondents on the impact of financial means received for vessels scrapping and retirement to fishermen s pension on the recovery of localities dependent on sea fishery. Yes, they had impact on the recovery 35% No, they had no impact on the recovery 65% Graph 33. Impact of financial means, obtained as a result of vessel scrapping and retirement to fishermen s pension on the recovery of localities dependent on sea fisheries % of respondents have noticed a certain economic recovery in their localities, caused by the inflow of money received by fishermen as compensations for leaving the profession. According to the respondents, the inhabitants of those localities purchased much more (than previously) household equipment, cars and even travelled abroad. A considerable part of received financial means was invested into the development of tourism and purchase of land for future investments. These tendencies were observed mainly in those coastal localities where the scrapping programme beneficiaries came from among cutter fishermen. The financial compensation for scrapping of a cutter was much higher than a compensation for a small fishing boat The opinions of representatives of local administrative authorities on the decommissioning programme A very important part of the research consisted of gathering the opinion of political and administrative authorities of coastal districts, where the process of the withdrawal of fishing vessels from fishing activities was executed. The representatives of district authorities from: Sztutowo, Darłowo, Frombork, Władysławowo, Jastarnia, Stegna and Puck took part in this part of the research. The Director of the Puck Region Museum, who since many years gathers information on the boat and cutter fishery in the Kaszuby region was also asked to express his opinion. He is also the author of concrete initiatives aimed at protecting against destruction those boats and cutters, which due to their age should be preserved in a museum, thus confirming a great importance of boat and cutter fishery for the inhabitants of coastal regions. Foto: imię i nazwisko autora

78 4 The representatives of the authorities from coastal districts were asked if the district authorities have shown any interest in: Decisions of local fishermen on scrapping fishing vessels; Possibilities to transfer fishing vessels to third countries; Possibilities to reassign fishing vessels for purposes other than fishing; The purpose on which the money received by fishermen for scrapping their vessels or for cessation of work in fisheries for the period of one year (10 thousand Euro); Whether the funds received as a result of scrapping fishing vessels were invested in the district, from which the scrapped vessels originated. 1. The degree of interest of the authorities of chosen coastal districts in the Sectoral Operational Programme According to the representatives of the authorities of fishery districts, they showed quite a lot of interest in the decisions taken by fishermen on scrapping fishing vessels. Four out of seven district representatives stated that they monitored this process along its way and dispose of the information on how the money received by fishermen were used. Three out of seven representatives of district authorities noted that the decisions were taken by fishermen themselves and that the district authorities were not informed on their decisions from the start of the scrapping programme. 76 Only two out of seven representatives of district authorities were informed on the possibility to transfer vessels withdrawn from fishery to third countries. This information reached them when the vessel scrapping programme was already under way. In addition, neither the details on how this can be done, to which countries these vessels could be transferred and who would bear the costs of transport were given nor the information on the existence of such a possibility. Due to this fact this possibility was treated as a purely theoretical solution, without any chances for its realisation. Almost all representatives of district authorities knew about the possibility to reassign a vessel for purposes other than fishing. This decision did not, however, belong to the district offices and their representatives did not see any possibility to intervene in this matter. At that time, the district offices did not dispose of sufficient funds to purchase some of the vessels assigned for withdrawal, in order to use them for educational programmes or place them in a museum. 2. Assessment of the Sectoral Operational Programme by representatives of local administrative authorities The representatives of all districts confirmed that they were aware of all assumptions and objectives of the programme of withdrawal of fishing vessels from fishing activities. However, the representatives of district authorities differed considerably in the assessment of the programme. Those who evaluated it negatively (four out of seven), underlined that the process will cause fast social impoverishment in their district. According to them, most fishermen after scrapping the vessel, their current work place, will be faced with enormous difficulties in finding themselves a place in the new socio-economic reality. They stressed that the fishermen who took such a decision are mostly persons of very advanced age, with no other professional skills that would permit them to continue to work.

79 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 In the case of boat fishery it was underlined that the fishing capacity of this fishery is too small to have a considerable impact on the constant decrease of the size of fish resources in the Baltic Sea region. However, cutters and fishing boats guaranteed work places for a considerable number of inhabitants of coastal localities, in particular those who did not have any other professional skills to do another job. The representatives of district authorities who presented a negative opinion also stated that the reduction in the number of cutters and boats considerably decreased the number of work places in the district and also had a meaningful impact on the decrease of the income of coastal districts and any companies, which co-operate with coastal fishermen and have their seats in the district. A special concern was given to the members of the crews of fishing vessels who received a relatively small financial compensation, on the forced condition that they accept to leave the profession for one year. Work places, liquidated on the decision of vessel owners, in most cases could not be replaced by new ones that would guarantee the income stable enough to constitute the main source of maintenance for former fishermen and their families. According to the district representatives, these people in a very short period of time will ask the district authorities for social aid and will become an additional burden to relatively small district budgets. Special socio-cultural importance of coastal fishery was also underlined. This fishery is not only a place of work for a considerable number of inhabitants of coastal localities but constitutes the core of local culture, that sets the customs and social norms, establishes the hierarchy of social prestige and organises social life of inhabitants. For many tourists coastal fishery was the main tourist attraction of coastal localities. The disappearance of fishery, in particular boat fishery, will certainly cause a loss of appeal of these localities and in consequence a decrease in the number of tourists and in parallel the income of the district coming from tourism. 77 The opinion of respondents: A representative of a district in the West Pomeranian voivodeship, where both boat and cuter fishery exist: Scrapping of fishing boats and cutters does not have a big impact on the decrease of the fishing effort. I evaluate the scrapping process negatively, since together with the reduction of fishing vessels the fishery sector, so-far economically important for the district, loses very much in importance or even vanishes. A smaller fishing fleet means smaller income to the district and many firms active in the sector. A representative of a district in the Pomeranian voivodeship, where only boat fishery exists: Scrapping of vessels will cause impoverishment of a part, not negligeable, of our district society. Fishermen were always among inhabitants with the smallest wages in the district. Not all of them, who scrap their vessels will be able to find themselves a place in the new reality. Not all of them will change the profession. Part of them will consume the received funds immediately and will purchase luxurious goods, some will live on this money like rentiers, which means a total cessation of professional activities. Only the young ones need to be active and wisely invest the received money. The older fishermen want to keep this money only for themselves and do not envisage to undertake any group investment activities. Foto: imię i nazwisko autora

80 4 A representative of a district in the Pomeranian voivodeship, where only boat fishery exists: I evaluate the programme of fishing vessel withdrawal from fishing activities rather negatively. This fishery has never had any economic importance in our region. Small amount of fish taken by boat fishermen cannot have an impact on the stock decrease. We do not need fishery for economic reasons but for cultural reasons in our region. Since the beginning of the nineties only some fishing boats have remained and fishing villages have no longer any fishing activity. However, this activity was an attraction for tourists coming from the country s interior. Although the representatives of coastal districts authorities evaluated the programme of fishing vessels withdrawal negatively, nevertheless they stated that boat fishery has never been the only source of maintenance for fishermen and their families. For older fishermen, in particular those who did not have any other professional skills, as well as those who did not have any younger successors ready to work in the fishery sector, the possibility of scrapping a vessel for such a big sum of money constituted an unexpected opportunity. It is therefore not surprising that they eagerly used this opportunity. However, the fact that boats and cutters were permanently destroyed although many of them could be exploited for many years constituted the reason to present a negative opinion. 78 Three out of seven representatives of district authorities evaluated the programme of vessel withdrawal as definitely positive. They fully agreed to the argument given by scientists who pointed to the excess of the fishing capacity in the Polish fishing fleet in relation to the fish resources that exist in the Polish waters. This disproportion is systematically deepened by faster and faster technical progress that permits to fish more and more fish in a shorter period of time. According to them, the Baltic Sea is too small to allow any overfishing of the existing resources. Irrevocable destruction of fish resources will bring much greater economic, cultural and environmental losses than the losses caused by the reduction of the fishing fleet and considerable restrictions of the volume of catches. The respondents also underlined the need to consider offering some of vessels allotted to scrapping to local museums, to permit them to prove the long fishing traditions of local populations. However, the supporters of fishing fleet reduction are not in favour of a complete liquidation of cutters and boats. They would like their localities to be still inhabited by fishermen, who would work on much better equipped fishing cutters and boats. Moreover, a reduction of the number of active fishermen shall cause an increase of the individual fishing quota, that shall in turn contribute to an increase of rentability of fishing activities conducted by fishermen and in consequence a reduction of illegal catches. Such situation shall help to maintain the fish stocks at the level that guarantees their survival. The opinion of respondents: A representative of a district in the Pomeranian voivodeship, where both cutter and boat fishery exist: I took part in the work of the Monitoring Committee of the Sectoral Operational Programme FISH on vessel scrapping. I have a very positive opinion on this programme. It should be followed by a decision to further modernise the remaining fleet. It is a good decision, because the Baltic Sea requires special

81 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 protection as fish resources are more and more limited. The so far achieved reduction of the fishing effort should give those who remain in the profession a chance to work for many years. Other Baltic countries should also actively participate in this process. It is regrettable that the scrapped vessels were not always the oldest ones, in the worst technical condition. Some Kashubians were tempted by the money and scrapped vessels in good condition. The programme of vessel scrapping should be terminated and the vessels withdrawn from fishery should be reassigned for other purposes such as tourism given to local museums. Gradually, the Hel Peninsula will no longer be associated with fishermen but with very good standard of pension houses. The reduction in fisheries does not limit the chances for the young generation. Already now, 90% of the local business is in hands of Kashubians. Those young people who emigrated to work in foreign fishing fleets will come back in a few years to work mainly in tourism and not as fishermen. A representative of a district in the Warmia-Mazury voivodeship, where boat fishery exists: In my opinion the programme of withdrawal of a part of fishing vessels is necessary and fully voluntary. Most of fishermen benefited economically from the programme. They scrapped the vessels that required a general renovation. In most cases, the decision to scrap a vessel was taken by retirees and pensioners and those fishermen who did not have any successors ready to work in fisheries. It is therefore good to have such a programme, since these vessels would have to be scrapped anyhow. They could not be sold due to a very bad technical condition. If it were not for this programme, no one would pay such big money for them. 79 A representative of a district in the Pomeranian voivodeship, where both cutter and boat fishery exist: The reduction of a number of fishing vessels had to take place due to an excessive fishing capacity of our fleet. Unfortunately, the selection mechanism did not favour the withdrawal of the oldest vessels. On the Foto: Photo: imię WWF i nazwisko / B. Marciniak autora

82 4 contrary the scrapping of vessels that could take active part in fisheries for many years was the best rewarded. The money obtained from vessel scrapping shall permit fishermen to raise their standard of living since most of the money goes to the development of local tourist infrastructure and better equipment for fishermen s households. A considerable number of fishermen devotes the obtained money to the modernisation of the remaining fishing vessels. 3. New money in the district the opinions of representatives of local administrative authorities on the use of money obtained from the withdrawal of fishing vessels active in their district from fishery. The right use of money obtained from vessel scrapping or from temporary cessation of professional activities in fishery is a very important problem. In this context, the representatives of district authorities were asked: 1. Do the district authorities dispose of any information for what purposes are the funds obtained from vessel scrapping used? and 2. What are the measures taken by district authorities to secure that the money obtained from vessel scrapping are invested in the district itself? 80 The representatives of district authorities confirmed that they dispose of some information on the purposes for which the money obtained from vessel scrapping or temporary cessation of profession activities in fishery are used. These information is however very limited, since it is based only on the information obtained during informal meetings with district inhabitants as well as on observation on every day behaviour of former fishermen. Due to formal restrictions, in districts where the research was carried out, there was no documentation that would permit to precisely indicate the purposes for which money obtained from these measures were spent and the actual sums. On the basis of observations and private conversations with fishermen, the representatives of district authorities stated that: 1. The money were in great part devoted to improve the living conditions of fishermen and their families. They were used for renovation of houses and flats belonging to fishermen, to purchase new furniture and in some cases to construct additional living premises. 2. Many fishermen invested the money in the modernisation of local hotel infrastructure. Additional floors were constructed with rooms for rent. Rooms for tourists were equipped with new furniture and TV sets, new sanitary facilities were constructed, access to properties modernized. A considerable number of sport equipment for tourists use was also purchased, among others: bicycles, balls, tennis and badminton rackets etc. Fishermen who offered food services for tourists invested the money in new furniture, kitchenware and other equipment. 3. Some fishermen invested the obtained money into the purchase of land, on which they plan to build tourist infrastructure or a house for children. 4. A comparable number of fishermen (estimated to more than 50%) used the money received from vessel scrapping to buy new cars and other luxurious goods (e.g. widescreen TV set).

83 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 5. Those fishermen who were boat and cutter owners invested the obtained money in modernising the remaining fishing vessels. They bought mainly the equipment to ensure security at sea such as: radars, sonar finders, GPS, or modern fishing gears. Almost all fishermen also decided to carry out a complete renovation of the hull and engine in fishing vessels that remained in exploitation. 6. A small group of fishermen, in particular older fishermen decided to put the money in a bank account and make the living of their families on interest rates of savings. 7. Many fishermen who had grown up children used the money from scrapping to buy flats for them in town, put some money away for a dowry or decided to pay for university studies of their children in a distant city. 8. A small group of fishermen went on holidays to the mountains with their families and in some cases even abroad. These were very rare cases, that prove the lack of tradition to spend holidays away from the place of residence. 9. The representatives of district authorities sadly concluded that a considerable amount of money received by fishermen were spent on alcohol in local shops and bars. The representatives of district authorities underlined that especially cutter fishermen who received economically important financial compensations in great majority invested the money into the development of the local tourist infrastructure and modernisation of boats and cutters that remained in fishery. Therefore, the vessel scrapping process has positively influenced not only the modernisation of fisheries but also the development of tourist infrastructure in coastal areas, thus creating solid sources of income for many inhabitants and many years. However, the interviewed persons underlined that fishing vessels scrapping process was not always carried out as planned by the authors of the programme. Particular doubts are raised by the fact that vessels in good technical condition were scrapped. Many of them could still be used in fisheries or fishing tourism for many years. 81 Photo: Foto: imię WWF i nazwisko / B. Marciniak autora

84 4 The representatives of district authorities also stated that local authorities could not in any way intervene in how and on what fishermen spent their money. Only in some cases fishermen were offered a possibility to buy land for development or were given a chance to invest money in the development of local tourist infrastructure. The opinions of respondents: A representative of a district in the Pomeranian voivodeship, where boat fishery exists: The money were almost entirely invested in the development of local tourist infrastructure, to buy new houses for tourist accommodation and the necessary equipment. Tourism has been the main source of living since some time. After the reductions in fisheries, the unemployment rate has not gone up too much, because a considerable number of crew members are still active in fisheries, however this time illegally. 82 A representative of a district in the Pomeranian voivodeship, where both cutter and boat fishery exist: Among boat fishermen who decided to scrap their vessels older fishermen constituted the majority. They did not always have successors willing to work in fishery. This problem has become even more acute at present, due to uncertain future of this type of fishery. Under the present fisheries management boat fishermen have no chance to survive. Vessel owners who had other vessels could invest the money received for scrapping into fishing gears and modernisation of vessels that remained in exploitation. Our district could not for formal reasons interfere in how and on what fishermen spent the money obtained for scrapping. I think, that great part of this money was spent in the district itself. Quite a lot of money was invested into the processing industry, especially fish processing, because it guarantees stable jobs for the whole family. If there is no fish from the Baltic we can always count on imports from abroad. A representative of a district in the West Pomeranian voivodeship, where both boat and cuter fishery exist: Money were spent mainly to buy real estate allotted for tourist infrastructure. Quite a lot of money was spent for buying land for development, allotted in the future for the accommodation of children. This is a very good capital investment because the prices of land and real estate continue to grow very fast. Some fishermen decided to stop any professional activity and live on interest rate from the savings put in a bank account. These are however very rare cases because it requires a very big sum of money in the bank account. In addition, such attitude does not get the approval of other inhabitants of the district. Equally important was the issue whether the district authorities had taken up any measures as to assure that the funds obtained for vessel scrapping were invested in the district itself. The representatives of districts that were included in the research could not directly interfere in how and on what fishermen spent the money obtained from scrapping. The existing legal provisions do not allow for taking such measures. In six out of seven districts that participated in the research, some measures aimed at assuring that the funds obtained by fishermen for vessel scrapping were invested or spent in the district itself have been taken. Special meetings were organised for fishermen with a view to present the conditions and possibilities of purchase of land for development. In five districts new spatial development plans

85 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 were prepared in five districs. In the meetings, the district inhabitants were informed on new possibilities of investing into the development of tourist infrastructure. Local newspapers also informed on such possibilities to invest money. Only one district did not take any measures in this context and explained that it was due to the lack of formal permission and also because the compensations received by fishermen were so small that they could not considerably affect the economic condition of the district. The opinions of respondents: A representative of a district in the Pomeranian voivodeship, where both cutter and boat fishery exist: No preferences should have been created for fishermen. We elaborated a new spatial development plan for the district, so as to permit fishermen as well as other inhabitants to purchase land for development. There are no documents that would permit to state for what purposes the money was spent. I can see, however, that vessel owners bought new cars or constructed pension houses. Only a few of them allocated the money to the modernisation of the remaining vessels. In my opinion, most of the money were spent or invested in the district itself. A representative of a district in the Warmia-Mazury voivodeship, where boat fishery exists: Fishery continues to lose its economic importance in our district. Neither the vessel owners, nor the fishermen received sums of money big enough to cause any visible changes in their standard of living. Most of the money were spent on modernising the remaining boats or renovating the flats. The crew members who were not boat owners simply used this money for food or drinks. Now, they neither have money nor a job. Young people can still go abroad but what can we do with the people in their fifties?. 83 Photo: WWF / B. Marciniak

86 4 It can be concluded that the district authorities had sufficient information on the programme of permanent withdrawal of fishing vessels from fishery, on the number of fishermen who took part in the programme and on the amount of money allocated to them. They were also relatively well informed (although informally) for what purposes money received for scrapping was spent. However, they did not taken any special measures aimed at helping fishermen in the finding the best way to invest the obtained money in the district where they live The programme of fishing capacity reduction through permanent withdrawal of fishing vessels from fishing operations in the opinion of representatives of the Sea Fisheries Institute in Gdynia, regional office of the Agency for Restructuring and Modernisation of Agriculture, representatives of fishermen s organisations and a representative of a regional museum located in a coastal district The opinion of dr. Zbigniew Karnicki, a representative of the Sea Fisheries Institute in Gdynia: The scrapping process should be a wilful element of the fishery policy and should not be left uncontrolled. Therefore, clear guidelines for its implementation should be established. Unfortunately, the necessary political and legal instruments had not been set. Scrapping should in the first place cover the oldest fishing vessels, in the worst technical condition and mostly from the cod fishery. Unfortunately, the scrapping in majority covered the vessels form the pelagic segment and, to an inadequate extent, vessels fishing for cod. Fishermen received the information on the rules on the scrapping of fishing vessels from the Agency of Restructuring and Modernisation of Agriculture, which organized and monitored the whole process. Fishermen submitted their reservations on the principles and methods of the programme implementation, among others, to the Sea Fisheries Institute in Gdynia, from where they were transferred to the Ministry of Agriculture, the authority represented by the Agency of Restructuring and Modernisation of Agriculture. Especially many reservations appeared at the beginning of the programme implementation. They were related mainly to the different interpretation of programme regulations as well as different forms of their application by particular offices of the Agency. In substantial part, these reservations were caused by the lack of experience of the Agency s employees in dealing with such issues. According to the Sea Fisheries Institute, fishermen decided to scrap their vessels because it was an excellent opportunity to get a financial compensation, that would not be possible to achieve if the vessel were sold on the market. Advanced age and bad health of fishermen, as well as the lack of successors to continue the profession had also a considerable impact on the decision. The possibility to transfer a vessel to a third country, non EU member, was not used, because the technical condition of vessels was inadequate and also because a fisherman could get much more money for scrapping his vessel in Poland. The money received for scrapping of fishing vessels were to a great extent spent on the modernisation of local tourist infrastructure and also on the modernisation of vessels remaining in operation. In most cases, these money were spent in the district, the place of residence of a fisherman. No formal criteria forcing to scrap a given type of vessels were applied and the decision was left to every fisherman.

87 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 The problem of vessel withdrawal from fishing operations should be continued, in particular in relation to the cod fleet, because the 20% reduction of this fleet, notwithstanding the recovery of the stocks, still does not create the necessary conditions for the economically profitable functioning of this fleet segment. The reduction of the fleet size should not include the pelagic fleet and coastal fishery (boat fishery). In setting the reduction criteria, the experience from the implementation of the Sectoral Operational Programme FISH between 2004 and 2006 should be considered and critical opinions of fishermen on the implementation of the programme should be taken into account. The co-operation between the authorities of coastal districts and fishermen in the programme implementation was very varied. Most of the districts did not show much interest in how fishermen plan to use the possibilities offered by the programme and left this to their individual decisions. However, some districts regarded fisheries as an important economic element, that, among others, increases the district s attractiveness for tourists. These districts had used the possibility to get the pre-financing and invested the funds into the modernisation of the port infrastructure, and thus created better working conditions for fishermen and to some degree made the decision on leaving the profession more difficult for them. 2. The opinion of a representative of one of the regional offices of the Agency for Restructuring and Modernisation of Agriculture (ARMA): The opinions on the technical condition of withdrawn fishing vessels and boats have always been divergent. In general, there is an opinion that the technical condition of our (Polish) fleet is bad due to the use of old technologies, the lack of investments for several years and the lack of financial means for modernisation. It should, however, be underlined that the Sectoral Operational Programme Fisheries and Fish Processing (SOP FISH) favoured the withdrawal of relatively new vessels, in potentially good technical condition. The eligibility criteria for granting the financial aid were elaborated in such a way that a beneficiary could get a much bigger compensation for a relatively new fishing vessel or a boat than for an old fishing vessel of the same vessel tonnage (GT). 85 The access to the information on the SOP FISH was very limited. There was no publicity campaign during the whole programme. It appeared only at the end of the programme and had a very small and weak impact mainly of informational and educational nature. From a time perspective, one can say that the only information on the programme could be found on the web pages of the Agency and the Ministry of Agriculture and Rural Development and directly in the regional offices of ARMA. The opinion on the co-operation between the applicants applying for financial aid from the SOP FISH and the Agency should be considered in the context of the past and the present. From my observations, perhaps subjective, although I try to avoid the subjectivity of an employee, since 2005 there has been a considerable improvement in this area, with a smaller and smaller percentage of unsatisfied applicants. The growing mutual understanding, experience acquired during the programme implementation (both by the Agency s employees and fishermen) as well as better and better skills in the common problem solving Foto: imię i nazwisko autora

88 4 have undoubtedly contributed to an improved co-operation. If possible, as the head of a small unit, I would like the Agency, even in this single unit, to be regarded as a modern firm, far from an image of a heartless institution. On the other hand, I realise that due to weak legislation and not always perfect procedures, it can sometimes be very difficult to achieve and it does unfortunately happen at the expense of potential beneficiaries. The co-operation between the districts and the regional offices of the Agency for Restructuring and Modernisation of Agriculture is sometimes very weak. In fact, only two districts from the Pomeranian voivodeship have showed some initiative in relation to granting aid to their coastal fishermen, either by pre-financing (loan) or by investing in the port infrastructure (construction or modernisation of fishing harbours). Among the reasons for the decisions on scrapping of fishing vessels were the willingness to get a quick and considerable financial compensation or the willingness to leave the profession due to the lack of motivation to continue the work in fisheries. The programme created the possibility to realise both objectives. 86 In our regional office of the Agency no application for co-financing for transferring a vessel to a third country had been submitted. The measure 1.2 Transfer of the vessel to a third country and permanent reassignment of fishing vessel for non-profitable purpose other than fishing implemented in the framework of SOP FISH was not popular, especially in the beginning of the programme. One of the reasons was the fact, Photo: WWF / E. Kuzebski

89 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 that most fishermen who had decided to withdraw their vessels did not know about such possibility and were interested only in scrapping as a much simpler solution of the problem. The second reason was a problem in the transfer of vessel to third persons; the responsibility for non-return of vessel to fishery has always lied on the applicant, and in such a case he was not in a position to always control the transferred vessel. The reassignment of a fishing vessel to other non-profitable purposes (museums, foundations) or to recreational purposes (own activity) usually referred to smaller vessels. The objective of the programme was to decrease the fishing capacity of the fishing fleet by scrapping fishing vessels and to adjust the fishing capacity of the fleet to the existing, renewable marine resources. The selection criteria for vessels were as follows: the vessel had to be a Polish-flag vessel, registered in the National Fishing Vessels Register (RSR), have valid documents - permitting to navigate and fish and be younger than 10 years. The granted financial compensation depended on the age of the vessel and its tonnage in GT. The effectiveness of the fishing fleet reduction process in the framework of the SOP FISH was high. It is however regrettable that it covered a considerable number of new vessels. In Poland, 439 vessels were withdrawn (188 in the Pomeranian voivodeship). Out of this number 380 vessels were scrapped (167 in the Pomeranian voivodeship), 59 vessels were reassigned to other purposes (21 in the Pomeranian voivodeship). The continuation of measures related to permanent withdrawal of fishing vessels finds support among those vessel owners who wish to end their activity in fishery due to the pension age or low fishing quota and at the same time receive high financial compensation for scrapping of the vessel. The continuation of the measures aimed at fleet reduction has also its opponents who think that the capacity of the Polish fishery is being destroyed with the use of this measure The opinion of a representative of boat fishermen organisation: The implementation of the programme aimed at withdrawal of fishing vessels of less than 20 years from operation was a simple negligence on the side of the Fisheries Department. The age of scrapped vessels was too low. The scrapped vessels could have been active in fishery for many more years. The programme was simply incomprehensible for a majority of fishermen. Fishermen have no adequate education to be able to read correctly a text written in legal language. Special trainings should be organised to explain the meaning of legal provisions of the programme. Sometimes I have an impression that it was done on purpose to prevent fishermen to fully control the implementation of this process. About 70% of fishermen, members of our organisation, had problems in the right interpretation of regulations. I accuse the ARMA for intentional spreading of misinformation that was humiliating for fishermen and prevented an adequate implementation of the programme. A group of incompetent employees of the Agency, who were not in a position to interpret the regulations took part in the programme implementation. An office worker should help a fisherman and should not persecute him by frightening with new and new restrictions. These people forgot that they have a job only because fishermen exist and not the contrary. There was no co-operation with the Agency. The reasons for benefiting from the proposal to scrap fishing vessels offered by the programme were, among others, the old age of fishermen and their bad health. The lack of market for fish and advanced age of fishing vessels had also considerable impact on fishermen s decisions. Foto: imię i nazwisko autora

90 4 Our fishing fleet was allowed to fall into ruin. It is necessary to safeguard some of these vessels for our fleet, because soon there will be no one to fish and our grounds will be taken by fishermen from Denmark and Sweden. No one had informed us (it was done later) that there is a possibility to transfer the fleet to a third country and to establish a joint venture company in that country, just like Latvia did by transferring a part of its fleet to Senegal. The money obtained from scrapping of fishing vessels did not contribute to raise the standard of living of inhabitants in coastal localities. It ended up like for the coal miners. The money was quickly eaten up and since most fishermen do not have any other professional skills, at present they have no idea what to do in the future. The problem has not been solved comprehensively, neither with regard to vessel scrapping, not the management of available funds. It just so happened that people who took part in programme consultations in great majority did not have the mandate from their communities. This process should be stopped because it does not take into account the required fleet segmentation. Why is the fleet being systematically reduced on one hand and on the other hand much bigger vessels with much bigger fishing capacity (due to the equipment on board) are allowed to enter the fleet? The demands of fishermen should be taken into account in the continuation of the programme that should have a very restricted scope in order to avoid the destruction of the Polish fishery The opinion of a representative of an association gathering cutter and boat fishermen: When taking a decision on permanent withdrawal of a cutter or a fishing boat from operation fishermen took into account, above all, the technical condition of a vessel. The next factor taken into account was the lack of successors to continue their fathers profession. Continuously worsening state of the fish resources in the Baltic Sea has also become one of the important factors for the decision to scrap the vessels and leave the profession of fisherman. Photo: WWF / G. Okołów

91 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 The fishermen from our association received a full range of information on the principles for vessel scrapping. Two meetings were organised one with the participation of cutter fishermen and the other for boat fishermen. All possibilities of withdrawing vessels from fishery and leaving the profession in the fishery sector were presented. The association also offered help in filling the application forms. Fishermen evaluated the programme of decommissioning of certain number of vessels rather positively. Complicated bureaucratic procedures related to the programme raised some doubts, in particular a considerable number of required documents. We did not consider the possibility to transfer vessels to a third country, because such proposal had not been presented to us. The financial compensations obtained from the scrapping programme were spent mainly on the improvement of the technical condition of vessels that remained in operation. The fishing fleet of the private sector has been established with vessels from former state-owned enterprises and liquidated fishing cooperatives and therefore it is not a new fleet. The programme s mistake was not to apply any selection criteria for vessels according to their future usability in fishery. The manager of the resources should have an idea on the size and type of the feet needed. As a result, many vessels not really useful in our fishing zone, e.g. mainly directed to cod fishery, have remained. One should seek a solution aimed at decommissioning of cutters that are no longer suitable for modernisation or to fish other fish species. Another mistake was the fact that most of the money went to people not engaged in fishing. Further reduction is forced by the regulations of the European Union, however, if implemented on the so far applied conditions, it could lead to a development of the cod fleet segment and liquidation of the pelagic fleet The opinion on the scrapping process of fishing vessels presented by Mirosław Kuklik, Director of Florian Ceynowa Museum of the Puck Region : In the regions with long fishing tradition of a few hundred years the number of scrapped vessels is so small that it did not weaken the importance of fishery for the inhabitants of these regions. In particular in the Kashubian coast this process took place on a very small scale. In my opinion, every fisherman should be guaranteed the right to scrap his vessel. On the other hand, it is hard to imagine places like Kuźnica or Chałupy without fishing boats, fishermen and fishing gears in the courtyards. In particular, coastal fishery should be supported because of its huge cultural importance. The fishing villages without fishing boats and cutters will become the same holiday resorts as in the interior of Poland. Boat fishery is currently in great part conducted by fishermen who are at the same time pensioners. It is such a small scale fishery that it should not have any restrictions. The same rules should apply as in agriculture, where every farmer has the right to cultivate his allotment. The process of vessel scrapping should not be continued. However, fishermen should not be deprived of the possibility to leave the profession. In such cases their boat should be given to a local museum or transferred to those fishermen pensioners who are willing to continue the work in fisheries to a limited extent. In such a way, the tradition will be preserved and the locality will keep its fishing character. The opinions presented here are quite divergent. These divergences result from a different location of these institutions in the overall organisational structure of the Polish fishery, different objectives and different possibilities to implement these objectives. Foto: imię i nazwisko autora

92 4 The Sea Fisheries Institute in Gdynia recommends in the nearest possible future the establishment of reliable implementation principles for the process of adjusting of the Polish fishing fleet to the fish resources available in the Baltic. This process should lead to achieving a considerable decrease of the fishing effort (fishing capacity) of the Polish fleet operating in the Baltic Sea that will match the size of fish stocks and the exploitation of the living resources will not endanger the environment. To this end, it is necessary to create adequate legislative measures and to procure the acceptance of fishermen, local administrative authorities and scientists as well as to conduct a successful political lobbying. Vessel decommissioning programme should cover above all the oldest vessels in the worst technical condition, mainly in the cod segment. A representative of the Agency for Restructuring and Modernisation of Agriculture underlined that the implementation of measures is very restricted by legislative provisions and that fishermen who take part in the programme do not understand this problem. He also stressed that weak legislation (established outside the Agency s structures) and not always perfect procedures could cause divergences that are difficult to solve and bear additional costs to potential beneficiaries. 90 The representatives of fishermen s organisations presented very divergent opinions, underlining both the positive and negative aspects of the decommissioning programme. The possibility of permanent or temporary cessation of fishing activities for an adequate financial compensation was judged positively. Considerable number of restrictions were raised in relation to the applied criteria that permitted to scrap vessels in good technical condition as well as the fact that the programme had been established without any consultations with cutter and boat fishermen. Considerable number of Photo: Quentin Bates / WWF-Canon

93 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 restrictions were also put forward in relation to the principles for programme implementation by the Agency for Restructuring and Modernisation of Agriculture, in particular the almost non-existent cooperation of the Agency and fishermen in the information campaign. The representatives of fishermen s organisations also presented doubts as to the scale of fleet reduction and the methods of continuing this reduction under the Programme In their opinion, the scale and the principles of the reduction should differ according to the fleet segment (the size of the fishing effort for particular segments), the size of fish resources and the specific character of a geographical region, where the reduction is to take place. Particular attention should be drawn to the opinion given by a museologist who underlined the cultural importance of fishery in local coastal communities and the right of each fisherman to decide on scrapping of his vessel. Fishery has a very important symbolic role for these localities, a symbol without which they would become the same as many other similar holiday villages. It is also worth to note the proposal to give vessels allotted to scrapping to local museums and memory chambers as important elements that confirm the existence of a long tradition of fishery in these places Conclusions The research has fully confirmed the hypotheses that: 91 - the conditions established by the authors of SOP FISH for vessel decommissioning only partially decreased the fishing effort of the fleet. A considerable reduction in the number of vessels operating in fishery has to a smaller degree than expected limited the number of persons, for whom work in fisheries is one of the sources of maintenance. A considerable number of crew members of the decommissioned vessels, after leaving the profession for one year as required by the provisions, have started to work in the fishery sector again, most often as seasonal employees. In the case of owners with more than one vessel, the money received for scrapping a boat or a cutter were very often invested in the modernisation of boats and cutters that have remained in exploitation, considerably increasing their fishing capacity; - the criteria for qualifying vessels to scrapping were not rightly set and in consequence many vessels that could have been used for other purposes than fishery were scrapped Too many scrapped vessels were not very old, in good technical condition and represented the pelagic segment of the fleet which the government would like to preserve (due to underutilised fishing quota allocated to Poland). The fleet specialised in cod fishery was reduced to a much smaller degree than expected although the protection of cod is one of the main objcetives of the Common Fisheries Policy of the European Union and cod is the species on which the programme should be focused; Foto: imię i nazwisko autora

94 4 - many organisational mistakes were committed in the implementation of the Sectoral Operational Programme Fisheries and Fish Processing , mainly in the field of the information policy related to the programme s objectives and the ways of its implementation; - financial means granted by the programme only to a small degree influenced the changes in the socio-professional structure of local fishing communities, especially those dominated by boat fishing. Financial means received by boat fishermen as a compensation for the withdrawal of fishing vessels from operation permitted to improve the living standard of their families only for a short period of time. Much higher financial compensations were granted to cutter fishermen and many of them have increased the share of other sources in the income of their families, mainly through investments in tourism. Other inhabitants of coastal fishing communities have not remarked any considerable changes in their standard of living and life style. The results of the conducted research permit to state as follows: - fishermen had very big problems with getting complete and reliable information on the SOP FISH. Most of them finally received the information through the media or from fishery inspectors; 92 - information on the possibility to apply for money for vessel decommissioning reached fishermen quite late and it was not quite clear how to apply for these funds; - information on the SOP FISH were presented by a representative of the Agency or fishermen s association in a way that made them partly incomprehensive. They were written with the use of Photo: Hartmut Jungius / WWF-Canon

95 Discussion on the socio-economic aspects of the implementation of the fishing capacity reduction programme through permanent withdrawal of fishing vessels from fisheries 4 legal language, not familiar to most potential beneficiaries. Problems of different interpretation by different office employees of the Agency related to the submission of applications to different ARMA employees were very frequent; - it was very problematic to contact the ARMA employees. The language used by them, too little time spent with the fisherman and the necessity to travel from the places of residence to a distant office of the Agency resulted in the fact that fishermen obtained most information through the media, from friends from other coastal localities and from family members living in bigger towns (where ARMA office are located); - fishermen asked to simply the bureaucratic procedures of application submission, to organise more information meetings and to send well trained employees to their localities who could help in filling the applications; - in most cases the district authorities did not show any interest in the programme that was so much expected by fishermen and no assistance could be expected from these authorities. In many cases the authorities presented the opinion that the money was granted to fishermen unjustly and thus justified their passive attitude; - due to the lack of a long term and clearly defined fishery policy in Poland that could guarantee the stability of work in the fishery sector, those fishermen who plan to return to the profession after one year break fear to invest too much of their own money into fisheries, because in many cases, in most ports and coastal localities, the property status has not been settled; 93 - most of respondents who took part in the research expect that the vessel decommissioning programme will not be continued. In their opinion, the scrapping of fishing vessels should be stopped or considerably limited, because it contributes to a total destruction of the Polish fishery, especially the coastal fishery. Already now, there is not a single fishing vessel and not a single fishermen left in a number of coastal localities. In the opinion of fishermen and representatives of local administrative authorities the reduction of fishing vessels actually reduces many work places directly or indirectly related to fisheries. Scrapping of a vessel means a loss of job for most of the crew members. Coastal localities do not offer many alternatives for those who have not been vessel owners and therefore could not expect any financial compensations, that could permit to start a new, independent economic activity. In most cases they have joined a group well represented in these localities, of temporary unemployed who are ready to take any temporary job and wait for a vacancy on board fishing boast or cutters still operating in fishery; - local authorities are afraid that the currently unemployed crew members will sooner or later leave the place of their residence and at the same time major reduce the human resources in these localities; Foto: imię i nazwisko autora

96 4 - many of the crew members of scrapped vessels have moved to the so-called grey zone and started illegal work in the fishery or tourist sector or various services. Only those fishermen who due to their age or health could go to retirement or pension have permanently left the profession; - boat and cutter owners who in many cases received very high financial compensations plan to invest them in their place of residence (mostly in tourism), in buying luxurious goods such as very expensive cars or in enlarging houses. Some of them wants to locate the money in the bank, so as to be able to invest them in the nearest future or help the grown up children; - owners of scrapped vessels and those crew members who after one year suspension of professional activities planned to go to pension or retirement expressed their satisfaction with the amount of received financial compensation. Dissatisfaction was expressed by those crew members who after the one year suspension of professional activities will be obliged to continue their professional carrier; - it is necessary to immediately implement other measures aimed at effective protection of the existing fish resources. The reduction should cover the segment of the Polish fleet where overcapacity still exists changes proposed by fishermen were as follows: introduction of permanent compensations for temporary fishing restrictions of particular fish species or for temporary reductions in the number of fishing days, introduction of an amended structure of prices for fish, introduction of a subsidies system into fisheries, introduction of new types of fishing gears permitting more selective fishing and less disturbing for the sea bottom, shortening the fishing seasons and introduction of segmentation for the fleet which is subject to reduction; - all fishermen should be included in the process of establishing the rules for the utilisation of fishing quota allocated to Poland, the rules for temporary restrictions in fishing and in the rules to fight with illegal catches and illegal market of fish. Only the so-called participatory democracy shall guarantee the compliance of most fishermen with the principles of protection of marine resources, established with their participation. The achievement of this objective requires the acceptance of long term protection plans of the marine environment by all stakeholders, so as to permit the whole society and in particular fishermen and the inhabitants of coastal communities to exploit it.

97 5. Description of the vessel withdrawal plan in the framework of the European Fisheries Fund Dr. Emil Kuzebski Foto: Photo: imię WWF i nazwisko / P. Prędki autora

98 5 5.1 Operational Programme The Operational Programme Sustainable Development of the Fisheries Sector and Coastal Fishing Areas is the basic document that establishes the directions of the use of structural funds in Poland in The general objective of the Programme: to achieve a competitive, modern and dynamic fisheries sector through a sustainable exploitation of resources emphasizes the establishment of effective, broadly understood fishery sector (fishery, aquaculture and processing), as well as safe exploitation of resources. The achievement of this general objective is supported by, among others, the adjustment of the Polish Baltic fleet to the available resources with the necessary socio-economic accompanying measures. The whole programme is divided into five main priority axes: I. Measure for the adaptation of the Baltic fishing fleet to the available resources; II. Aquaculture, inland fishing, processing and marketing of fishery products; III. Measures of common interest; IV. Sustainable development of fisheries areas; V. Technical assistance. 96 The total planned budget for programme implementation amounts to million Euro, including the EU contribution through the EFF million Euro. The biggest share of funds is to be used in Axis IV, that is sustainable development of fisheries areas (313 million Euro), measures for the adaptation of the fishing fleet constitute the second biggest share of the budget and are estimated at 225 million Euro, i.e. 23% of total funds (Graph 34). The implementation of the objective: 1.1 The adaptation of the Polish Baltic fleet to the available resources shall be pursued through two basic measures permanent cessation of fishing activities (through vessel withdrawal by scrapping or reassignment of the fishing vessels) as well as temporary cessation of fishing activities. The funds available under Axis I shall also be used for modernisation of fishing vessels, coastal fishery and social compensations. Priority Axis IV 32% Priority Axis V 5% Priority Axis I 23% Priority Axis II Priority Axis III 20% 20% Source: own elaborations on the basis of the Operational Programme Sustainable Development of the Fisheries Sector and Coastal Fishing Areas , page 117. Graph 34. Allocation of financial resources per priority axis (public funds EU and states budget).

99 Description of the vessel withdrawal plan in the framework of the European Fisheries Fund The detailed guidelines for the measures aimed at reducing the fishing capacity of the Polish Baltic fleet are specified in the document entitled Fishing Effort Adjustment Plan. 36 The planned costs of the Polish Operational Programme are the highest among the Baltic countries, whereas in the entire EU only the Spanish Programme is more expensive than the Polish one. The funds foreseen in the framework of the Operational Programme Sustainable development of the Fisheries Sector and Coastal Fishing Areas are almost four times higher than the value of the investments planned in the second most expensive programme, which is to be implemented in the Baltic Sea region by the Danish government. The public funds available under the Priority Axis I (funds for the adaptation of the Polish Baltic fleet to the available resources) are also much higher than in other Baltic countries. The share of funds available to Poland in the total funding for the Baltic countries amounts to as much 61%, much more than for Denmark (11%) or Sweden (6%), two other countries with the biggest fleet in the Baltic Sea. Lithuania 4% Estonia 5% Poland 61% Latvia 7% 97 Denmark 11% Germany 4% Finland 2% Sweden 6% Source: own elaboration on the basis of data from national operational programmes , Graph 35. The shares of the Baltic countries in the funding planned for in Priority Axis I. The new EU member states have the highest average funding for the adaptation of the fishing fleet (Axis I) expressed per fleet tonnage among the Baltic countries. It results from the fact that this is only the second round of structural funds made available to the new EU member states. In Poland, it amounts to approximately 11.5 thousand Euro/GT, an incomparably higher indicator as compared to other countries that conduct fishing activities in the Baltic Sea (Graph 36). This indicator is 4 to 5 times higher than in other countries new members of the EU (Lithuania, Latvia, Estonia) and a dozen times higher than in Sweden and Denmark. Evidently, one of the reasons is a lower own contribution required to co-finance the investments under the EFF. For the new member states it amounts in general to 25%, whereas the old EU members states are required to co-finance on average 40-50% of the investments. 36 Plan dostosowania nakładu połowowego, (Fishing effort adjustment plan) Ministry of Agriculture and Rural Development, Warsaw, January Foto: imię i nazwisko autora

100 Poland Lithuania Estonia Latvia Denmark Sweden Finland Germany Source: own elaboration on the basis of data from national operational programmes , Graph 36. The amount of funding available under Priority Axis I in relation to the tonnage of the Baltic countries (EUR/GT, vessels under 500GT). 98 In the correct economic calculation, the justification behind each investment should be an adequate return of the invested capital in the shortest period of time. The graph below (Graph 37) presents the ratio of average annual expenditure under the priority axes aimed at investments in the sea fishery sector and the income generated by fishery in particular Baltic countries. 239% op 1,2,4 op 1 168% 73% 54% 93% 20% 28% 25% 4% 7% 12% 1% 6% 2% 6% 2% Poland Lithuania Latvia Finland Estonia Germany Denmark Sweden Source: own elaboration on the basis of data from national operational programmes , and THE 2008 ANNUAL ECONOMIC REPORT ON THE EU FISHING FLEET (SGECA 09-01) ISPRA, 9-13 MARCH Graph 37. The ratio of average annual amount of funding planned in the Priority Axes I, II and IV and the annual income of the fishing fleet in Since the real beneficiaries of the fleet reduction programme are those remaining in fisheries, then according to certain opinions, these programmes should be financed (or co-financed) by them. In the contrary case, the cost of the programme may be higher than the economic rent generated by the vessel scrapping programme. 37 In such case, there would be a need to elaborate a method for own contribution of the sector in such a programme which would in turn give a justification for the use of 37 R. Hannesson, 2004, Do Buyback Programs Make Sense? Workshop on Fishing Vessel and License Buy-Back Programs, La Jolla, CA, USA.

101 Description of the vessel withdrawal plan in the framework of the European Fisheries Fund public funds. 38 The data presented in the graph show that in the Polish reality the implementation of such solution would not have the slightest chance for success the sector would not be in a position to bear the costs of the possible co-financing of the programme. The amount of the average financial aid for the sea fisheries in in Poland is twice higher than the value of the income generated by the sector in The implementation of investments only in the Priority Axis I would require annually 70% of the annual value of catches, whereas the financing of the capacity reduction programme would use annually for seven years almost half of the value of the sector s income. A similar situation, although less drastic, can be found in other new member states Lithuania and Latvia. In case of the countries with the biggest fleets in the Baltic Denmark and Sweden - the ratio of the investment value and the annual income generated by the fishery sector is at a much more reasonable level 2-6%. 5.2 Reduction of the fishing capacity of the Polish Baltic fleet A presented in earlier chapters, between 2004 and 2008, the Polish Baltic fleet was reduced by approximately 40-47%. Quick utilisation of the cod quota in 2008 and quota overfishing in 2007 have proved that there is still an excess of the fishing effort, in particular in the segment of bottom trawlers. However, the fishing quota for the pelagic species (herring and sprat) have remained underutilised for many years. This proves the lack of balance in the fishing capacity of the fleet which in consequence leads to ineffective, from the economic perspective, use of the capacity of the fishing feet. Taking into account the above mentioned shortcomings as well as the tendencies observed in the growth of the cod biomass in the coming years, it has been decided to implement measures aimed at adapting the fishing effort to the resources. These measures, planned for shall include: - reduction of the number of special permits for cod fishing, - permanent withdrawal of cod vessels from exploitation, - modernisation and permanent transfer of vessels to the pelagic sector, - introduction of property rights, - other measures. 99 Among these measures, the three first ones shall have a direct impact on the reduction of the fishing effort targeting cod. In 2009, with a view to use the possibility to finance the temporary cessation of fishing activities from the EFF funds, for the first time, the number of cod fishing permits has been reduced by 2/3. The vessels that did not get a cod fishing permit received financial compensations. The number of vessels authorised to fish cod in 2009 and their fishing capacity are shown in the Table 15. The planned individual fishing quota shall permit the vessels in particular length groups to carry out an economically profitable activity and therefore eliminate the problem of illegal, unreported 38 W.E. Foto: Schrank, imię R. i nazwisko Arnason, R. autora Hannesson,2003, The cost of Fisheries Management.,UK, Ashgate Publishing.

102 5 Table 15. Number of cod fishing permits in Lenght classes Fishing quota [tonnes per vessel] kw GT Number of vessels 8-11,99 m ,7 601, ,99 m ,0 449, ,49 m , , ,5-20,49 m ,0 335,0 5 20,5-25,49 m 102, , , ,5 m i więcej , ,0 14 Average/Total 69,1* , ,5 147 Source: own elaborations on the basis of Fishing effort adjustment plan, Ministry of Agriculture and Rural Development, Warsaw, January and unregulated caches. The allocated individual cod limits are much higher (2 to 3 times) than the limits available to particular vessel groups a year ago (Graph 38). It is however difficult to say whether this increase will be sufficient to persuade the vessel owners to completely abandon illegal catches. The real cod catches, estimated by the European Commission in 2007, were 3 times higher than the officially reported ones, therefore the proposed scale of increase in relation to the fishing quota for cod corresponds roughly to the scale of unreported catches [tonnes] ,99 m 12-14,99 m 15-18,49 m 18,5-20,49 m 20,5-25,49 m 25,5 m and more Source: own elaborations on the basis of regulations of the Ministry of Agriculture and Rural Development (Journal of Laws of 2008, No 5 item 30, Journal of Laws of 2008, No 225 item 1497). Graph 38. Individual fishing quota for cod in 2008 and The first measure of the Fleet Restructuring Plan until 2013 is to ensure economically profitable exploitation of resources (within the available fishing quota) for fishing vessels that conduct fishery. The second measure covers granting financial compensations to fishing vessels which did not receive cod fishing permits. According to the Fishing Effort Adjustment Plan, between 2009 and 2011 the number of vessels that will be excluded from cod fishery and instead granted financial compensations shall depend on the cod fishing quotas available in the future. The higher the cod quota, the more vessels shall fishing permits and their number can be calculated with the use of the following formulae:

103 Description of the vessel withdrawal plan in the framework of the European Fisheries Fund NTAC N= X where: N number of special cod fishing permits; NTAC national TAC for cod in tonnes; X average economically profitable cod quota A results from the above formulae, the fishing effort in the coming years will depend mainly on the level of TAC allocated to Poland. During these years, the average fishing quota for cod (69 ton) shall be kept at the same level. The table below presents the simulation of the level of the cod quota (number of vessels) under the assumption that the state of the resources will improve and the TAC will increase by 15% annually. It can be seen from the calculations (assuming the optimistic version, i.e. in accordance with the long term cod management plan the annual increase of the TAC by 15%) that the number of vessels that would be authorised to fish cod in 2013 amounts to 347 vessels of the roughly estimated tonnage Table 16. Simulation of the level of fishing quotas and the number of cod fishing vessels in Data TAC Repayment for overfishing TAC for boats <8 m Available TAC Cod quota (X) 69,1 69,1 69,1 69,1 69,1 Number of vessels (N) Source: own estimations on the basis of data from the Fishing Effort Adjustment Plan, under the assumption that the cod TAC will increase by 15% annually in the years Photo: Päivi Rosqvist / WWF-Finland

104 5 of approximately 14 thousand GT. This constitutes approximately 75% of the present fishing capacity of the cod fleet above 8 meters in length. Therefore, in the next four years the excess fishing capacity in cod fishing equal to approximately 25% (i.e. 5 thousand GT, 17 thousand kw or 113 vessels average value) will still exist. The fleet will be reduced by the same excess of capacity through permanent decommissioning. In accordance with the Adjustment Plan, permanent decommissioning of vessel fishing for cod shall constitute the most important measure aimed at adapting the effort to available resources of this species. The objective of the plan is to reduce the tonnage by 6 thousand tonnes and power by 20 thousand kw until The third planned measure of the Adjustment Plan aimed at limiting the fishing effort directed to cod fishery is the modernisation of a number of vessels that conduct multispecies fishery (with dominating share in herring and sprat fishery) with a view to specialise these vessels solely in pelagic fishery. To this end, between 2009 and 2013, 51 big trawlers need to be modernised (among others, reconstruction of the hold, adaptations of the storage and transport systems on board). These vessels, after the modernisation, will not be used in cod fishery and will therefore decrease the capacity directed to this fishery. The overall tonnage of this fleet segment amounts to 7.8 thousand. GT and the power 21.7 thousand kw. 102 All presented measures aimed directly at reducing the fishing effort of the cod fleet will be to a great extent financed with the funds available under the EFF The costs of reduction of the fishing effort of the Polish Baltic fleet As mentioned in the previous part of the publication, the total cost of fishing capacity reduction in the framework of funding available under the FIFG in amounted to approximately 365 million zlotys (105 million Euro). The planned amount of funding for measures aimed at fishing fleet adaptation in is 225 million Euro (1 billion zlotys). Due to a different structure of the priority axes of the FIFG and EFF, only a part of these funds will be allocated to fishing effort reduction. The graph below (Graph 39) presents the financing allocated to particular measures in the framework of the Priority Axis I. It can be seen that the total funds allocated to the reduction of the fishing effort amounts to approximately 110 million Euro, that is almost the same as spent in the first edition of the fleet restructuring programme. The planned amount of funds allocated to permanent withdrawal of fishing vessels totals to 53.3 million Euro and to temporary cessation of fishing activities to 58.6 million Euro. Similarly to the previous operational programme, the amount of compensations granted for withdrawn fishing vessels depends on the size (tonnage) of the fishing vessel. The initial compensation rates have remained the same in relation to the previous period and reflect the maximum amounts of premiums allowed by the European Commission as laid down in the Council Regulation (EC) No 2792/1999 (in force during the FIFG operation).

105 Description of the vessel withdrawal plan in the framework of the European Fisheries Fund permanent withdrawal investments on vessels socio-economic competitions [mln euro] temporary withdrawals coastal fishery Source: own elaborations on the basis of the draft regulation of the Ministry of Agriculture and Rural Development on the allocation of funds for the implementation of the Operational Programme Sustainable development of the Fisheries Sector and Coastal Fishing Areas Graph 39. The funds allocated to the fishing fleet adaptation under the EFF (public contribution national and the EU contributions). Table 17. The amount of premiums paid for permanent withdrawal of vessel by scrapping. Tonnage groups for 1 GT Plus for a vessel 0< < < < < and more Source: Regulation of the Ministry of Agriculture and Rural Development of 26 June 2009 (Journal of Laws of 29 June 2009). To encourage a quick withdrawal of vessels in the first year of the operation (2009) the granted premiums shall be increased by 10%, in the second year by 5%, whereas in the third and the following year shall be decreased by 10%. The availability conditions for granting funds for scrapping do not contain any special restrictions or selection criteria and therefore repeat the mistake made in the previous fleet scrapping period (as the measures are not directed at concrete fleet segments, i.e. vessels fishing for cod, for which the reduction is most needed). A fishing vessel, qualified for the scrapping programme, shall comply with four basic criteria: 1. it should have a Polish nationality, 2. it should be registered in the fishing vessel register before 1 January 2007, 3. it should be more than 10 years old, 4. it should have a valid fishing licence. Similarly to the previous fishing capacity reduction programme, there exists a possibility to reassign a vessel to another profitable or non-profitable activity outside fishing. In this case, however, the amount of premium will represent respectively 70% and 90% of the level of premium paid for scrapping the fishing vessel. Foto: imię i nazwisko autora

106 5 The amount of compensation paid to vessel owners for the temporary cessation of fishing activities has been established proportionately to the level of the cod quota that would be allocated to the vessel if it were among the 1/3 of vessels authorised to fish cod. The level of public support for temporary cessation of fishing activities for particular groups of vessels is presented below: 1. from 8 to 12 m 132,000 PLN, 2. from 12 to 15 m 156,000 PLN, 3. from 15 to 18.5 m 204,000 PLN, 4. from 18.5 to 20.5 m 216,000 PLN, 5. from 20.5 to 25.5 m 246,000 PLN, 6. from 25.5 m 231,000 PLN. In addition, the premiums shall be increased by 15 thousand zlotys for each person employed on board. This sum includes 11 thousand zlotys paid to the vessel owners for each employee and 4 thousand zlotys paid directly to fishermen. 104 The financial support for temporary cessation of fishing activities is granted on the basis of some fundamental principles: the owner of the vessel should be authorised to fish for cod, the owner of the vessel has not been given any cod fishing quota in a given year, the owner of the vessel has ceased any fishing activities in the period up to 120 days, the owner of the vessel has not been punished for violation of the principles of the Common Fisheries Policy during the year for which the premium is to be paid. 38 Rozporządzenie MRiRW z dnia 26 czerwca 2009 r., (Dz. U. z dnia 29 czerwca 2009 r.). Photo: WWF / P. Prędki

107 Description of the vessel withdrawal plan in the framework of the European Fisheries Fund The amount of financial support shall be paid proportionately to the number of days a vessel stays in port (e.g. half of the sum mentioned above for a cessation of activities lasting 60 days). 5.4 Assessing the efficiency of fishing effort reduction In accordance with the EU regulations, in order to facilitate the implementation of the fishing effort adjustment plans, the member may call for tenders or offer submissions. The member states may also determine the level of public support, by taking into account the best cost-effectiveness ratio on the basis of objective criteria, such as: a. the price of the fishing vessel recorded on the national market or its insurance value, b. the turnover of the fishing vessel, c. the age of the fishing vessel and its tonnage expressed in GT or engine power expressed in kw 40. From the European Commission recommendations presented above, the Polish administration decided to use only one criterion the tonnage of the vessel (GT) as a factor determining the level of financial support paid for vessel scrapping. Such measure can be judged as effective, both when preparing the programme s principles (no need for laborious analyses), but also during the implementation phase, because it permits to radically simplify the system of premium calculation and payment. However, the effectiveness from the point of view of reducing the administrative burden does not in fact mean the effectiveness in terms of reaching the objectives. The effectiveness of the spent public funds may be similarly low, if the funds are used for decommissioning of vessels only to a small degree active in cod fishery. In this case, there is an additional threat to carry out unnecessary decommissioning of vessels directed at the fishery of the species whose resources remain underutilised (herring and sprat) or vessels only to a small degree threatening the cod resources (coastal fleet). 105 From the point of view of the effectiveness of the fishing effort reduction programme, vessels, top the largest degree engaged in cod fishery, should be decommissioned first. According to the definition, the fishing capacity means a vessel s tonnage expressed in GT and its power expressed in kw, whereas the fishing effort is defined as the product of the fishing capacity and the activity of a fishing vessel. 41 The fishing effort of vessels that conduct fishery with passive gears is usually defined as product of the GT and the fishing days, whereas the fishing effort of vessels that use the active fishing gears the product of the kw and the fishing days. The table below presents (Table 18) the hypothetical options of the reduction of the fishing effort of the Polish Baltic fleet through permanent cessation of fishing activities, fulfilling the objective set in the Fishing Effort Adjustment Plan to permanently reduce the tonnage by 6 thousand GT as well as the threshold conditions for the access to the programme (scrapping of vessels older than 10 years). The presented estimations are approximate and the goal is to present the possible results of a reduction directed at some other options. 40 Council Regulation (EC) No 1198/2006 of 27 July 2006 on the European Fisheries Fund (article. 23). 41 Article 3 of the Council Regulation (EC) No 2371/2002 of 20 December 2002 on the conservation and sustainable exploitation of fisheries resources under the Common Fisheries Policy. Foto: imię i nazwisko autora

108 5 Table 18. Hypothetical results of decommissioning of the Baltic fleet (reduction by 6 thousand GT) in different options. Data for scrapped vessels Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Total fleet 1 Number of vessels Power of vessels (kw) Average age of a vessel Premium (meur) /2 Cost of 1 GT (in thousand EUR) 4,4 5,1 5,5 7,4 6,1 6,0 8,9/3 Employment Catches (in tonnes) Value of catches (in thousand PLN) 4 GT*days (cod) GT*days (pelagic) Source: own elaborations based on average data on fishing effort in and the fleet size at the end of fleet registered as of may 2009; 2 planned amount of funds for scrapping; 3 average value for fleet older than 10 years; 4 average value in Options: 1 minimising of the costs of the programme, 2 maximising the reduction of the cod effort, 3 as in option 2, plus limiting the reduction of pelagic effort (at the expense of a greater number of decommissioned vessels), 4 minimizing the reduction of the pelagic effort and the costs of the programme, 5 maximising the reduction of the cod effort and at the same time minimising the reduction of the pelagic effort, 6 random selection of vessels for decommissioning. In the option 1, the achievement of the objective is foreseen with the lowest possible costs, whereas other aspects are not taken into account (such as for example vessel scrapping). The option 2 assumes that the reduction will be focused on vessels with the biggest share in the effort (GT*days) directed at cod fishery. The option 3, similarly to the option 2, assumes that scrapping will in the first place cover the vessels directed to cod fishery (vessels of the highest value of GT*days for these fish), excluding however vessels with the high pelagic effort (over 10 thousand GT*days). In the option 4, all vessels fishing pelagic species are excluded from scrapping and vessels with the lowest cost of scrapping were chosen from other vessels. In the option 5, on the basis of a ranking, vessels with the highest cod fishing effort and at the same time the lowest pelagic effort as compared to other vessels were selected. In the option 6, vessels were selected at random, so as to achieve the total tonnage of 6 thousand GT. Therefore, the selected vessels represent the whole population (average tonnage and engine power of selected vessels correspond approximately to the average tonnage and engine power of the entire fleet). One can expect that the so-selected community is the closest to the possible scenario which will take place if the present, permissive selection criteria shall be applied to vessel scrapping. As seen from the presented calculations, one of the worst options (for many reasons) is to chose a random selection of vessels for scrapping (option 6). In this option, the number of decommissioned vessels (to achieve the objective) will amount to approximately 200 vessels with engine power of 21.8 thousand kw. Permanent withdrawal of these vessels would reduce the fishing effort directed to cod fishery by o 238 thousand GT*days, that is by approximately 30% of the total effort. The side effect of scrapping in this option would be the decommissioning of as much as 328 thousand GT*days of the pelagic effort (about

109 Description of the vessel withdrawal plan in the framework of the European Fisheries Fund % of the average annual value in ). The average catches of vessels decommissioned in this option in amounted to 35 thousand tonnes and the value 43 million zlotys. The amount of premiums paid for scrapped vessels would amount to approximately 36 million Euro, that is almost 70% of the total foreseen funds. Evidently, one of the most negative side effects of a random selection of vessels is that many fishermen will lose their job (approximately 780 persons). This results directly from the fact that many smaller vessels will be scrapped (such situation took place in the first edition of the scrapping programme). The only worse option would the option 4, which is one of the three options (apart from option 1 and 6) not directed at the cod effort withdrawal. It assumes in the first place to minimise the reduction of the pelagic effort, and then to minimise the scrapping costs. It would direct the programme on this part of the fleet (mainly boats), which does not conduct pelagic fishery. The implementation of this option would lead to a loss of employment by almost thousand fishermen. Taking into account the fact that scrapping should first of all contribute to the reduction of the effort directed at cod fishery, the most optimal choice out of the suggested options would be the options 3 and 5. In the option 3, which is somewhere in between option 2 and 5, the selection of vessels for scrapping was done on the basis of their engagement in cod fishery, excluding the most effective pelagic vessels from the so selected vessels. Such interference permits to limit the negative side effects found in the option 2 (excessive pelagic effort withdrawn). As compared to the option 5, this option also limits the total number of withdrawn vessels and therefore the number of liquidated workplaces. The effort directed at cod fishery withdrawn in the option 3, considered as optimal, amounts to 415 thousand GT*days, thus constituting over 50% of the average effort in Such reduction can be achieved along with a relatively small, 10% reduction of the effort directed at pelagic species and 15% reduction of the number of workplaces and permits to save in addition 2.8 million Euro as compared to the option 6 which does not define the selection criteria for scrapped vessels. 107 The presented elaborations show that the foreseen funding for fishing capacity reduction through permanent cessation of fishing activities (53.3 million Euro) in is considerably higher than the hypothetical costs of effort withdrawal. If 6 thousand GT were to be withdrawn with these funds, the cost of 1GT would amount to approximately 8.9 thousand Euro, whereas the average cost of 1 GT of the fleet older than 10 years amounts to about 6 thousand Euro. Therefore, it can be expected that some of the funds foreseen for the permanent withdrawal will not be used and will be transferred to other measures in the Axis I. Another possibility would be to continue the scrapping until the full utilisation of foreseen funds (as it was the case in the SOP ), which could result in a withdrawal of over 8 thousand GT instead of the planned 6 thousand. It is worth asking whether the rates of compensation for scrapping have been established by the Polish administration at the optimal level, whether they are too high or too low to reach the set objectives. The experience from the previous scrapping programme vessel withdrawal was done very fast and there were many people interested to take part in the programme show that the programme was very attractive financially for vessel owners.

110 5 The data presented in the chapter Financing the Baltic fleet restructuring programmes show that premiums for scrapped vessels paid in Poland were among the highest premiums paid in the Baltic countries. The premiums adopted in the present edition of the programme have been increased by 10% in relation to the programme. Notwithstanding a smaller number of potential beneficiaries of the public aid, it permits to assume that there should be no problem in withdrawing the planned amount of capacity. The example of Sweden proves that the objective to withdraw cod vessels, set in the operational programme, was achieved relatively fast. The withdrawal of 6 cod trawlers of the tonnage amounting to 1040 GT cost the Swedish budget 49 million Euro, which gives an average cost of 4.7 thousand Euro/GT. 42 It is a sum close to the compensations foreseen in the Polish Operational Programme for this group of vessels. 108 The decision to scrap a vessel is always a sovereign decision of the owner and the attractiveness of this measure, similarly to the previous edition of the scrapping programme, shall depend on how much attractive the rates of compensations shall be for vessel owners or how little attractive it appears to them to continue the fishing activity. The improving state of the cod stocks and higher fishing quotas will undoubtedly discourage fishermen to withdraw from fishery, on the other hand, however, high premiums for vessel scrapping, the generally advanced age of vessels and the ageing of fishermen will constitute an incentive to benefit from the proposed compensations. An additional factor encouraging to benefit from the programme would be the fact that it is the last such programme financed from the EU budget. The future Common Fisheries Policy may to a great extent be deprived from subsidies, so widely used nowadays in fisheries. 43 This will be a factor encouraging to quickly benefit from funds available in the current programme. Taking into account the experience from other countries in conducting fleet reduction programmes, the basic weakness of the fishing vessel scrapping programme adopted by the Polish government is the lack of targets towards concrete types (segments) of vessels, specialised in fishing a given fish species. The reduction of the Swedish fishing fleet targeted particular vessel types, depending on the type of fishery they conduct (Table 19). Table 19. Objectives of fishing fleet reduction in Sweden. Types of vessels Baseline Shrimp trawlers GT -3% (-144 GT) -10% (-481 GT) Pelagic trawlers and seiners GT -8% ( GT) -30% ( GT) Bottom trawlers GT -13% ( GT) -50% ( GT) Source: Operational Programme for the fisheries sector in Sweden , REV V, The FAO publications suggest that the capacity reduction should target the vessels that are the most dependent on fishery, among others through the introduction of new minimum threshold effort values that qualify for the programme, e.g. fishing days during the year. 44 In every fishing fleet there 42 Successful Swedish scrapping campaign,14/01/2009, 43 Green Paper, Reform of the Common Fisheries Policy, Brussels, COM(2009)163 final. 44 FAO, Fisheries Technical Paper. Management of Fishing Capacity: a Review of Policy and Technical Issues, Rome 2001.

111 Description of the vessel withdrawal plan in the framework of the European Fisheries Fund are vessels that conduct fishery either in more active or less active way. The programme effectiveness shall depend on which vessels from these two groups will be targeted by the scrapping programme. The experiences from other countries prove that scrapping of less active vessels does not bring effects proportional to the withdrawn capacity, although it can bear smaller implementation costs (depending on the adopted criteria). On the other hand, granting premiums first of all to vessels most actively engaged in fishing activities may give an incentive to the less active vessels to increase the activity and benefit from higher premiums for scrapping in the future. 45 Therefore, the fishing effort reduction process should be accompanied by measures aimed at limiting further increase of the effort. Undoubtedly, in the case of Polish fishery, the exit/entry system is the measure that prevents the possibility to enter a new vessel to fishery without an earlier withdrawal of an old vessel (without public aid). Also setting limits on the number of fishing days may effectively prevent an excessive growth of the vessels activities. An effective measure that may restrict the incentive to increase the fleet capacity is based on the fishing rights system, e.g. individual transferable quota (ITQ). 46 The Danish fishery administration has decided to abandon the fishing capacity reduction through scrapping, leaving the adaptation of the fleet size to market mechanisms. The ITQ system, introduced in 2003 to the pelagic fleet, has proved to be successfull in solving the problem of excessive fishing capacity. 47 The plan to introduce individual transferable quota to Polish Baltic fisheries is one the objectives of the currently implemented effort adjustment plan. A wider introduction of the system to the European fisheries is one of the proposals for the reform of the Common Fisheries Policy. Chapter s summary 109 In the coming years, the fisheries sector will benefit from the public support in the framework of the European Fisheries Fund, in the amount of almost 1 billion Euro. In the perspective of seven years the support equals to approximately 140 million Euro per year. These funds are mainly allocated to sea fisheries (priority axes I, III and IV) in the amount of 730 million Euro (on average 100 million Euro per year). These 100 million Euro are worth over twice more than the average value of landings of the Baltic fleet in recent years (about 40 million Euro). Approximately 14% of the funds have been foreseen for the measures aimed at reducing the activity of the fishing fleet (permanent and temporary cessation of fishing activities and social compensations). Scrapping of fishing vessels will cost 53 million Euro, that is approximately half of the sum spent in the previous scrapping programme ( ). The fishing capacity foreseen for permanent withdrawal amounts to 6 thousand GT, that is approximately 34% of the size of the fleet withdrawn in the previous edition of the scrapping programme and 30% of the present size of the Baltic fleet. The previous edition of the scrapping programme achieved much more than the planned reduction objectives, but was not free from mistakes. Lack of clear selection criteria caused unnecessary withdrawal of too many pelagic vessels, the average age of vessels that remained in fishery did not change and the cod effort was not balanced with the available resources of this species. Lack of these criteria in the present edition of the programme makes it repeat the mistakes made in the SOP op. cit. 46 Holland S. Daniel. On Direct and Indirect management of Capacity. Marine Resource Economics, Volume 14, Operational Programme for development of the Danish fisheries and aquaculture sector , December Ministry of Food, Agriculture and Fisheries.

112 5 The hypothetical scrapping scenarios for the coming years presented in this chapter show that the adopted permissive, unrestricted access to the programme for every vessel (on the sole condition that it is older than 10 years) is neither effective from the point of view of the programme s costs nor for the reduction of the cod effort. It shall not remarkably contribute to the decrease of the average age of vessels. It may however have important negative social consequences (excessive reduction of workplaces). 110 The premiums granted for vessel scrapping in this edition of the programme have been increased as compared to previously paid premiums by 10%. The interest in the previous programme and the speed of its implementation show that supply (that is the interest in the premiums) was higher than the demand for scrapped vessels, therefore it could suggest (according to the economic laws) that the price, that is the premium for scrapping was not balanced should have been lower. The adoption of very high premiums in the previous programme will make at present any reduction in the premiums rather difficult, mainly due to already established demands from the fishery sector as well as the desire to achieve the objectives very quickly. The introduction of the fishing rights to the Polish fishery individual transferable quota system (ITQ ) would be an important element sanctioning the success of the fishing capacity reduction programme. The experience gathered so far in other places in the world, in particular the experience of the Danish fishery prove that such system efficiently reduces the pressure of the excessive growth in capacity and may successfully replace the costly reduction of the fleet through scrapping.

113 Conclusions Dr. Emil Kuzebski, Dr. Bogusław Marciniak Photo: Quentin Bates / WWF-Canon