STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS AT REGIONAL AND COMMUNITY LEVEL

Socio-economic Review of Community Fisheries
MegaPesca Lda, Portugal

Strengths
Weaknesses
Opportunities
Threats

Strengths
The fishing industry has proved responsive to capacity reduction incentives of CFP, broadly resulting in the achievement of targets set under MAGPs I to IV. There has been substantial fleet investment to improve handling, quality and safety at sea, and many fleet segments are highly competitive.

Northern European countries such as Denmark, UK and Netherlands are regarded as having good port and market infrastructure, and well-trained fishers. Production of bivalve mollusca (which is an important source of employment in regions such as Spain, Portugal  France and Italy) is stable and appears not to be threatened by over exploitation.

There is a concentration of processing activity in key regions e.g. in Humberside in UK, Galicia in Spain, Bremerhaven in Germany, and Boulogne in France, resulting in economies of scale and benefits of industrial clustering. The processing sector is highly competitive and well capitalised, with substantial cross border investment. There is widespread compliance with hygiene requirements and product quality and safety are considered to be high. There are good contacts and skills in international sourcing for supplies of raw material to the EU processing sector.

Many EU member states have generally good conditions for aquaculture development, with adequate marine and freshwater resources, and a number of species of fish and mollusca suitable for cultivation. Marine aquaculture is well established in Scotland, Greece, Ireland and Spain and highly efficient production systems have been developed. There is spare capacity for increasing production should market demand permit. Inland aquaculture is well established throughout many regions the EU.

The EU market is a high-income stable market, showing good growth in demand. In many regions there is a positive income elasticity of demand for fish, so consumption is stimulated as income grows. Tourism development in the Mediterranean region provides good market potential for regions such as Greece and Spain, although seasonal. In Northern European countries such as Belgium, UK and Netherlands the transparency of auction markets results in market efficiency and good price information communicated to producers.

Weaknesses
Marketing of fish is problematic, with the products drawn from three phyla of the animal kingdom, and with production subject to biological variables. Generally, primary production of commercial species cannot be increased except through aquaculture. There is a great diversity of fisheries activity in the EU, ranging from Baltic, North Sea, Atlantic and Mediterranean basins. The Baltic region is characterised by highly fluctuating catches and short fishing seasons. The Mediterranean is characterised by a wide diversity of commercial species. Both mitigate against efficiency in production and marketing.

In most regions there is a chronic over-capacity in the fishing fleet and many economically important stocks are considered to be under pressure from non-sustainable levels of effort. The situation is considered to be critical in the case of demersal fisheries in the North Sea, especially in some stocks pursued by the beam trawl segment of the Netherlands and Belgian fleets. There is a progressive reduction of Total Allowable Catches and application of CFP management to non-quota stocks. Fishing in the North Sea and the Baltic is especially dependent on species subject to quota. Some segments of the EU fleet (especially in Spain, but also in Portugal and Netherlands) are dependent on access to third country fisheries. Reduction of yields and opportunities to fish has had an impact on profitability, and landings are declining in some regions and static in most. Low levels of fleet investment result in a downward spiral of aging fleet, reduced efficiency and higher costs. Other effects of low profitability are also manifested as shortages of skilled crew and a low level of new entrants to the industry (felt particularly in Belgium, Ireland, the Portuguese Islands and France).

Coastal resources are particularly threatened by a proliferation of the small scale fleet, affecting particularly the Mediterranean where, in addition, there is a wide variety of gear types, only four out of 20 bordering maritime nations are EU members, and coastal resources are subjected to environmental pressures such as pollution.

There is a low value added to EU landed fish, with most fish entering consumption directly or undergoing only primary processing, thus reducing the income for fishing communities. The lack of continuity of supply of whitefish to primary processing results in an under utilisation of capacity (especially in the UK). The processing sector has relatively high labour costs compared to third country suppliers, especially of canned tuna, sardine and anchovy conserves. There are finite limits to compensatory improvements in productivity and quality that can be obtained. Some segments of the Southern European processing sector (e.g. canning of anchovy and sardine in France, Spain and Italy) lack investment, and have difficulty upgrading to EU hygiene standards. They are approaching obsolescence.

Except for salmon, marine aquaculture has not realised its full potential, largely constrained by limited market acceptance of a narrow range of species which are amenable to culture technology. Expansion of aquaculture production is also limited by regulatory burdens, environmental concerns and conflicts with tourism and other coastal uses. In the two main producing regions (Scotland and Greece) aquaculture companies are largely dependent on a single species.

Some productive regions (such as Scotland, the Portuguese Islands, Brittany and France Exterior) are distant from main markets, resulting in increased difficulties and costs in reaching markets, and depressed prices to fishers. Some regions e.g. France, Greece and Spain have very long coastlines with dispersed production and landings, increasing costs and difficulty of distribution. Marketing infrastructure in such regions tends to be weak. Although Producer Organisations have had a significant impact in some regions, in others such as Greece they are poorly organised and have little impact. Even where POs do exist, there may be a lack of co-ordinated marketing arrangements, such as in Germany where there are only weak links to processing. Lack of marketing linkages in the chain results in poor co-ordination between demand and landings, and a lack of linkage between quality and price. In some regions e.g. around the North Sea orderly marketing is undermined by so-called "black fish".

The EU markets for small pelagic fish are not well developed and producers (such as Ireland, Netherlands, Denmark) rely heavily on unstable markets in Russia and Africa. The low demand for small pelagic fish means that much potentially good quality fish is used for reduction, for example sprat in Sweden and sardine in the Canary Islands. The North European food markets are dominated by oligopolistic supermarket chains, with strong buying power and leverage over the supply chain. Quayside marketing in the UK continues to be limited by reluctance to use metric measures.

Opportunities
Given the political will, there are substantial opportunities for improved resource management, to ensure a more sustainable fishery sector with higher economic yields. This can be delivered by a reduction of the fishing effort applied to the main commercial species. The opportunity will be strengthened by improved management structures, both within the EU's Common Fisheries Policy, and by strengthened regional bodies in which the EU participates such as the GFCM (General Fisheries Council of the Mediterranean) and the IBSFC (International Baltic Sea Fisheries Commission). Enlargement of the EU will provide an opportunity to strengthen Baltic Sea and Mediterranean management. New management measures (such as marine protected areas applied in Italy) provide opportunities to improve stock conservation in some areas.

The introduction of new ways of managing quota (for example by the use of individual transferable quotas in Belgium) may improve profitability and permit fleet renewal in some segments. There are some, albeit limited, opportunities for the exploitation of presently unexploited fish resources. In particular Ireland and Portugal (Azores) have access to deepwater fish species with potential for market development. Current research into the marine farming of demersal fish for which there is a high demand (such as cod and grouper) could provide new growth opportunities for marine aquaculture. The use of artificial reefs, open sea ranching, and offshore farming may also provide opportunities for increased production without the negative environmental consequences and coastal use conflicts of conventional aquaculture systems.

Better marketing and distribution opportunities are available through modern processing technology and through multiple retail outlets. There are new possibilities for market segmentation and eco-labelling e.g. the Marine Stewardship Council initiative, organic fish and niche markets. There is considerable potential for development of markets for under utilised fish resources such as small pelagic fish, blue whiting and ling, particularly if the new distribution opportunities presented by supermarkets can be utilised.

The availability of EU structural funds provides a means to stimulate better productivity and marketing, thus breaking the downward investment spiral. Promotion and consumer information to link quality to price may provide a boost to demand. The unification of auction systems across national boundaries (e.g. through the Marsource project) could provide better price information to fishers, thus encouraging better co-ordination throughout the marketing chain.

Threats
Fishers, particularly of demersal stocks, in all regions are under threat in the short-term from the decline in the condition of many stocks. Opportunities to fish are being reduced by the progressive fall in Total Allowable Catches, the application of quota (or pre-cautionary quota) to current non-quota species and the loss of access to some key third country fishing grounds (such as Morocco). Furthermore in the longer term, there is the risk that chronic over-fishing may result in permanent damage to stocks.

Fleet capacity and effort reduction measures under the Multi-annual Guidance Programme may also limit the opportunities to fish. On a Community level and in most cases, the MAPG IV targets have been met, with tonnage 16% below target and power 7% below target. In the short term, capacity reduction measures will impact most on France and Netherlands, which have not met their objectives under MAGP IV, and where further capacity reductions may be anticipated during the remaining period of MAGP IV (until 2002).

Reduced opportunities to fish threaten reduced revenues, and increasing costs from an ageing fleet threaten profitability. Lack of investment could result in obsolescence, increased safety risks and poorer quality. The low interest expressed by young people in many regions in entering the sector could result in a critical lack of skilled fishers, accelerating withdrawal of vessels from the fleet and causing hardship in fisheries dependent areas.

Tariff reduction initiatives via the WTO will, if successful, eliminate tariff barriers on fishery products supplied from third countries, threatening the viability of processors, especially in the canning sector where the labour cost forms a high proportion of the total. There are finite limits to improvements in productivity and quality, which can be obtained, thus threatening the retention of the EU base of operations. Many less viable sectors of the EU processing industry e.g. anchovy and sardine canning in S.European countries are in any case threatened by the cost of upgrading to comply with EU hygiene standards.

Environmental concerns (in Scotland) and conflict with tourism (in Greece and Southern Spain) may halt or set back coastal aquaculture development, especially in regions where the optimal sites have already been developed. Disease (such as infectious salmon anaemia) and a possible link with harmful algal blooms also threaten the stability of salmon aquaculture in Scotland. The viability of aquaculture is further threatened by a divergence of market prices between farmed and wild fish, reported in Greece, and a growing consumer resistance to the lower quality of farmed fish compared to wild fish of the same species. Given the rapid growth in production capacity compared to demand, there is a danger of oversupply of all of the main aquaculture products (trout, salmon, seabass and seabream) to market.