Russia’s fishing industry is making a push against the possible return to the distribution of crab quotas through open auctions.
Currently, crab quotas in Russia are allocated by a history catch principle based on the results of auctions held in the early 2000s. Contracts, expiring in 2018, were expected to be prolonged in 2019 for another 15 years. However, in late 2017, anonymous investors contacted Russian President Vladimir Putin to propose the return to auctions, which they said will bring much more money to the national federal budget. The proposal received a largely negative reaction across the industry.
A decision was expected by the middle of 2018, but Russia’s government does not yet appear close to choosing a path forward. Discussions that took place within the Russia’s government and in public forums revealed that regulators are choosing between a few options: Either a full return to auctions, a mix of auctions and the historic principle, or keeping the existing system in place.
The Russian Association of Fisheries, Entrepreneurs, and Exporters (VARPE), the biggest nongovernmental industry body related to Russia’ seafood industry, in late July called for a special emergency conference to voice fisheries’ concerns on the subject. The attendees will be chosen by delegates of the IV Fishermen Congress held in Moscow in February this year. Such a mechanism for election of delegates from all key fishery regions and all ranks will raise the event’s profile.
Businesses’ reaction to the VARPE’s proposal was strongly positive, with a few regional association not just confirming their participation, but having already selected their representatives.
Maxim Kozlov, chairman of the Sakhalin Fisheries Association, confirmed to Russian media that the organization will take part in the special conference.
“We think the return to auctions will wreck financial stability of fisheries,” Kozlov told Fishnews.
Mikhail Kotov, chairman of the Magadan Association of Fishermen, said that the organization received numerous nervous calls from fisheries regarding the auctions, which he said will bring the industry to collapse. Kotov said in an interview with a Russian TV channel that the crab quotas issue should not be analyzed separately from the fishing business as a whole. Kotov serves as CEO of Tikhrybkov, a company that fishes for several species including crab, and Kotov said revenues from catching and selling crab make it possible for the company to invest in other areas of the business.
A decision can’t come too soon, Kotov said, as the seafood industry has already felt a negative impact on profitability.
“Right now, banks loans have become more expensive; rates have increased by several percent. Many investment projects are frozen,” Kotov said in the association’s address to VARPE, published on the VARPE’s website.
Sergey Nesvetov, the executive director of the North West Fishery Consortium, said that his company has temporarily stopped investment projects of 350 million USD (EUR 299 million) to build 10 crab vessels and two processing plants.
“Contracts had been signed, but now we’re not sure we will implement these projects,” he told Fishnews.
The date of the special conference has not yet been announced, but media reports in Russia have said it may possibly be held in September.
Photo courtesy of VistaNews
