SeafoodSource spoke with Ilya Shestakov, head of Russia’s Federal Agency for Fisheries, at Seafood Expo Global in Brussels, Belgium on 24 April.
SeafoodSource: Can you give an overview of how Russia performed in regard to seafood production in 2017?
Shestakov: In 2017, the volume of catch was 4.9 million tons, and the volume of aquaculture … was 220,000 tons. The main species for wild catch was pollock, with Far East [the leading region], Barents Sea second, and Black Sea region third.
Major stocks we are now focused on are mackerel and sardines. We now catch around 70,000 tons of these species, but we could increase it in next three years up to 300,000 tons. So we are very excited about these stocks and we are now [making] a lot of effort to organize the process. We are working with our fishermen, who are buying new vessels and building new production facilities for this work, to process this fish.
SeafoodSource: What are the priorities for your agency for 2018? New investment quota policy?
Shestakov: Concerning policy, we have adapted a new investment program offering additional fishing quota for enterprises that construct new vessels in Russian shipyards or who build new processing factories in Russia. We just finished our work about this issue, and we expect that this issue will result in about USD 2 billion (EUR 1.7 billion) of investment [over] the next five years – 33 new vessels … and about 18 to 20 new processing factories. Most of them will be on the North Basin, on the Barents Sea, but there will be nine new vessels in the Far East, with six of them to [be built] by Russian Fishery. Their range more than 100 miles, and they will be equipped with processing factories on board, with capabilities to produce all the different products from fillets to the full fish.
SeafoodSource: Can you give an update regarding snow crab catch and relations between Norway and Russia regarding Svalbard?
Shestakov: We have good cooperation with Norway concerning snow crab. Three years ago, we decided to jointly divide the stock. I believe this measure was very correct, as we are now putting in a mutual effort to ensure other countries, which have no relationship to this stock, do not get access. By this, therefore, we define the usage or utilization of this stock could be only by Russian or Norwegian vessels. As for regulation concerning snow crab in the Russian shelf area, this year we’re going to implement research of snow crab stock but we’re already aware that the growth there is very active. Currently, this stock is already higher than the red king crab. Tentatively, we can already state that in the next year, the quota could be increased [twofold]. Based on this scientific point of view, the possible intake could reach 40,000 tons of snow crab. We already know that Norway has specific difficulty with E.U. regarding catches of snow crab. Hopefully they will sort out these issues, with benefits for both parties.
SeafoodSource: At last year’s Seafood Expo Global, you discussed Russia’s desire to maximize its yields from its wild-catch fisheries. Which species offer you possibilities for doing that?
Shestakov: We don’t want to maximize catches if it means harming stocks. All catches will obviously be scientifically based. We certainly we have stocks of mackerel and sardine in our territory. We already have unutilized catches of squid, shrimp, and the possibility to increase the [total allowable catch] for pollock. On the whole, we have unutilized stocks in the Caspian Sea and the Azov and Black seas. In addition, this year we hope that we have a very good approach to catches of salmonids.
SeafoodSource: How do you view Russia’s progress in aquaculture development?
Shestakov: We have already developed 500,000 hectares for aquaculture and trends are very good. Where we are taking a very important direction is in the Primorye region, where over 60,000 hectares has been developed. We subsidized the development of plants creating fish-feed plants. So now we [are revising our] supporting measures to develop a program of compensation of costs for all aquaculture enterprises. As for the participation of government in selection work, we are now finishing the projection of a factory for rainbow trout farming, for producing stocking material. We have plans for two more factories, one in Tomsk and the other in the south - the first is for white hake and the second is for sturgeon. We think that’s enough and we don’t plan any additional works.
We have a goal to increase aquaculture production to 700,000 tons by 2030. We think, concerning all the limits we have in Russia regarding weather, other conditions, we think that’s a comfortable amount of production for us. We don’t think that we will produce a million tons like in China. We don’t expect to rapidly increase production of trout and salmon. Aquaculture for us, it’s a main priority, but of course we understand it can’t be a very big part of the production of fish overall in Russia.
SeafoodSource: Does the Russian fleet have plans to expand into the Faroe Islands, following changes in the Faroese constitution that affect foreign ownership of fishing companies and quota exchange?
Shestakov: We have a good relationship with Faroe Islands, but frankly, we don’t expect any changes of our vessel activity after the changes from the Faroese legislation. And we haven’t received any concerns official from our fishermen so far. Hopefully, we can continue in the same manner as we have now. Moreover, we will authorize Faroese vessels in a fishery for shrimp northwards to a certain degree, based on a request they made previously. We have a very constructive relationship and will look forward to continue to work together.
SeafoodSource: Do you have any concerns over the current high prices of fish in Russia?
Shestakov: As for prices, we should always consider prices fishermen receive and prices in shops differently. We shouldn’t have this problem, as our production price is always lower than retailing price. We have rather big volume of exports – out of 4.9 million tons caught, 2.1 million tons was exported. Almost 87 percent of our exports are raw material. This year, we plan to partly amend our tax code in terms of payment for the usage of the resource. We plan to differentiate the system so that enterprises that do supply and production of raw materials for export pay 100 percent of tax. For those who supply processed production or who supply the domestic market, they will have a special discount of 85 percent. We believe this measure, along with other measures, will allow us to lower the cost of business, and to make our domestic market sufficiently supplied with fresh fish, and to make sure that the cost of fish in Russia is the same as the cost of fish all over the world.
SeafoodSource: Given the heightened political tensions between Russia and the European Union, Great Britain, and the United States, is there concern about possible future sanctions being imposed on Russian exports?
Shestakov: We don’t expect sanctions. [In the past], the species on which sanctions were imposed, we substituted with other species. Actually, we felt no positive or negative effect on fisheries sector because Russia’s sector has been integrated for a long time into global markets. So we are more concerned about the supply of raw material and processed material to other countries, rather than sanctions.
SeafoodSource: Russia’s fish exports have been steadily growing, but the majority goes to a limited number of countries, and the majority of Russian exports are of low-value products. What are the measures the government is now taking to get more from the country’s fish exports?
Shestakov: Our traditional partners in the Far East are Korea, Japan, and China, and of course, the European Union. We understand that now we are very dependent on pollock. We need more diversification, which is why started a new program for investment costs. We understand most of the vessels in the Russian Federation are very old, with an average age of 28 years. They’re in need of modernization, and we also need to improve our ability to produce products with added value. So that’s why started this program – we are hoping that when the program will be finished, we will have increase our value-added value by up to 40 percent in the Far East region and up to 80 percent in the north. After that, we can diversify our sales and markets.
SeafoodSource: Are you pleased with the response to the government’s investment program designed to encourage more domestic investment in locally-built vessels and processing plants?
Shestakov: I wasn’t expecting such a demand from the North Basin – from fishing companies in the Barents Sea. It was two times more than expected for factories, one-and-a-half more than expected for vessels. Maybe I’m a little bit disappointed with how the program is going concerning the vessels for the Far East because we have not too much approach. For the factories, it’s enough, but for the vessels, it’s not enough. We hope now with the second stage [of the program] to see more interest.
SeafoodSource: Federal spending for the fishing industry’s science is decreasing which makes the agency reach more with less resources. What are the priorities in the agency’s efforts to develop the fishing science in Russia? What are the most important tasks you want the science to focus on?
SeafoodSource: What are the priorities in the agency’s efforts to develop the fishing science in Russia? What are the most important tasks you want the science to focus on?
Shestakov: Last year, we invested more money into research, so we now have possibilities to do research on all stocks that are necessary. I think it’s no problem now to do that, including monitoring of stocks. Also now this year, we will finish the project of the new research vessel, the big, modern one. We are planning to make three [more] vessels, one for the Atlantic region and two for the Far East region, and we hope that from 2019, we will start to construct them in Russian shipyards. And, from 2019, we are planning to [do] research with the Science Academy of Russia of the Antarctic region.
SeafoodSource: What’s in the program of the development of sea fishing terminals?
Shestakov: We have a good opportunity to increase our cold storage. There is one million tons of cold storage in South Korea, but in Vladivostock, we have only 18,000 tons and in all the Far East, we have a capacity 140,000 tons. So for us, it’s a very important opportunity to increase [that] capacity. We are now collaborating with port owners so we now have agreements on investment plans to build new refrigerated storage. This is the small plan, but we have also a big plan. We need to build a new fish port in the Far East and Primorsky region. We just had one company build a port in the Kamchatka region – it’s not very big, but it shows the see logistics of fish moving to containers more. In the Primorsky region, we are now thinking to build a new fish port, with [the goal] of taking fish from the Asian market, store it there for eventual distribution into Russia. We are also thinking with this new project, we can organize the auctions for valuable species like crab and pollock. That’s the idea that we’re working on now.
SeafoodSource: What is your agency’s view of the potential of the Arctic?
Shestakov: In the west part, in the Barents Sea, we are making research every year and we manage the stocks together in cooperation with Norway. In this area, we already understand well in which way move stock of different species. In more eastern areas, we made last research trip three years ago, and concerning this [research], we haven’t found stocks which could be useful for fishing. We found some different species, crabs and others, but they’re not big stock and there is really no economic value there now. Probably, when it will be warmer, stocks will spread there, but for now, there is not much of value.
SeafoodSource: Speaking of auctions, is there any news about the upcoming decision on how to handle expiring crab quota contracts?
Shestakov: No, there is nothing new at this point.
