The Russian Ministry for Industry and Trade recently published a draft of a governmental decree on subsidies intended to defray the costs of construction of small and medium vessels, refrigerated ships, and fleets for aquaculture.
In 2016, Russia introduced investment quotas, giving larger catch allocations to companies constructing new vessels inside Russia to stimulate fisheries to upgrade their fleets. But the program is limited to certain types of vessels, missing small- and medium-ranged ships and a number of species.
The investment quotas were allocated to fisheries operating in the Far Eastern and Northern basins, while the Azov and Black Sea basins, the Western Basin, and the Caspian Basin have been left out of the program.
While these basins don’t yield a great amount of catch – producing in total 20 percent of the national five-million-metric-tons harvested in 2018 – their stocks of cheap fish are important both in terms of employment and supply of cheap seafood for customers. Cost of seafood is an issue of increasing importance for officials amid decreasing consumption of fish, linked to growing prices.
The newest incentive program is designed to fill the gap by providing public financial aid to any fishery willing to build a new vessel of small or medium size.
The subsidy applies to five types of vessels depending on length and functionality: 15 to 20 meters, 20 to 30 meters, 30 to 39 meters, a refrigerated vessel of longer than 100 meters with holds of no less than 2,000 cubic meters, and a vessel for aquaculture of no shorter than 13 meters.
The subsidy does not apply to the whole prices of construction, and is calculated based on a price limit for each vessel type and region where it will be deployed.
The federal budget will provide a reimbursement of up to one-third of the price-limit the government has set for each vessel type.
The document details price-limits for three types of regions: the Far Eastern Basin, the Republic of Crimea, or any other region. For example, the price ceiling for a vessel of 20 to 30 meters in length, to be used in the Far Eastern basin, is RUB 350 million (USD 5.4 million, EUR 4.8 million). This means the ship owner can get at maximum RUB 115 million (USD 1.8 million, EUR 1.6 million) as a reimbursement, regardless of the final price of the ship.
The limit for the same ship to be deployed, for example, in the Baltic fishery basin is RUB 350 million (USD 5.4 million, EUR 4.8 million), while for the Crimean peninsula it’s RUB 420 million (USD 6.5 million, EUR 6.0 million).
To be eligible for the compensation, the owner must order the ship at a Russian shipyard after 1 January, 2019. The ship must be registered in one of the Russian vessel registers – i.e. operate under the Russian flag. The reimbursement is provided only upon putting a vessel into operation.
Officials said a total of 120 vessels of all types are planned to be built under the program through 2024, creating 1,700 new jobs and adding 200,000 metric tons of fish a year to the country’s catch.
