Russia’s fisheries authority is considering a proposal that would have it subsidize small-sized fishing vessel construction in order to spur investment and renovation of the country’s fleets.
The proposal still must be approved by by Russia’s Federal Agency for Fisheries (Rosrybolovstvo) and the Ministry for Industries and Trade before it comes into effect. If it gets the go-ahead, funding for the project will be allocated beginning in 2019, Rosrybolovstvo Deputy Director Pyotr Savchuk said.
To qualify for compensation of up to 25 percent of the cost of a vessel’s construction, the ship must be built in a Russian shipyard and be used to fish in a Russian fishery, according to the proposal. Savchuk estimated that up to 100 new vessels will be built under the proposed new program, including 30 in the Baltic Sea region, 20 in the Volga Caspain basin, and 40 in the Azov Black Sea region.
According to data provided by Rosrybolovstvo , Russia’s fishing industry will need 70 to 100 small-capacity ships by 2030, requiring an investment of RUB 16.5 to 23.3 billion (USD 235 to 332 million, EUR 203 to 287 million). Thus, at a 25 percent subsidy rate, the state’s support would total RUB 4.1 to 5.8 billion (USD 58.5 to 82.7 million, EUR 50.1 to 71.6 million).
The proposal is akin to a separate policy adopted in 2017, which involved investment quotas given to Russian companies in exchange for them building processing facilities or ordering ships at Russian shipyards. The first phase of the program took place in 2018 and resulted in 33 new ships being ordered for delivery within the next five years, worth an estimated RUB 150 billion (USD 2.14 billion, EUR 1.9 billion).
The previous incentive program was limited both in geographic range (it applied only to certain fishery basins) and in the species the fishing vessels were allowed to target. The result was an emphasis on construction of medium- and long-range ships – the state’s efforts missed the owners of ships of small capacity, which typically focus on fishing less-valued species.
In August 2018, senior-ranking administrators from Rosrybolovsto and the Ministry for Industries and Trade announced they would address this gap with the help of other incentive instruments.
