normal template - agricultural policy...

An EU-funded project managed by the European Union Delegation to Montenegro

MINISTRY OF AGRICULTURE,AND RURAL DEVELOPMENT

Sustainable Management of Marine FisheryRef. No: EuropeAid/128947/C/SER/ME

Report 34Fishery Sector Study for the IPARD Programme

October, 2011

Ian ScottTeam Leader


Project Ref. No. EuropeAid/128947/C/SER/ME

1. Project Title

Sustainable Management of Marine Fishery

2. Details

Sector Fisheries Beneficiaries Ministry of Agriculture, Forestry and Water ManagementInstitute of Marine Biology

Project No. Europeaid/128947/C/SER/ME Contract value: €558,930 Signature of project contract 11th August 2010

Effective start of activities 13th September 2010 End of activities 12th March 2012

Disclaimer

The opinions expressed in this report are those of the authors and do not necessarily reflect the opinions of the European Delegation in Montenegro or any other organisation mentioned in the report.


Project Synopsis

Project Title Sustainable Management of Marine FisheryPublication Ref. No. EuropeAid/128947/C/SER/ME

Contracting Authority European Union Delegation to Montenegro Beneficiary

OrganisationsMinistry of Agriculture, Forestry & Water ManagementInstitute of Marine Biology

Country Republic of MontenegroContractor Agrotec SpA in association with Tragsatec

Project Duration September 13, 2010 – March 12, 2012Overall Objective To promote sustainable management of the Montenegrin marine fishery

sector in the context of the Acquis Communautaire.Project Purpose The strengthening of Montenegrin capacity to effectively manage the

harvest of marine fishery resources within the context of the Common Fisheries Policy and full stakeholder participation.

Project Components Component 1. To strengthen the capacity of the FSU to administer and manage Montenegrin marine fisheries according to the CFP.Component 2. To strengthen the capacity of the Fisheries Inspectorate to monitor and control marine fishing activity and enforce the Fishery Law (2009) and related regulations.Component 3. To strengthen the capacity of IMB to provide scientific advice on the status of marine fishery resources in Montenegrin waters on an on-going basis. Component 4. To strengthen the participation of fishermen in fisheries administration and management.Component 5. Visibility activities and procedures to ensure effective and efficient implementation of the project.

Project Director Marco Girelli, AgrotecKey Expert Team KE1 Team Leader Ian Scott

KE2 MCS Expert Richard ThomassonKE3 Resource Expert Francesco Colloca

Working Days Key experts: 300 Senior Non-Key Experts: 220Junior Non-Key Experts: 50 Total: 570

Budget €558,930

List of Abbreviations Used by the Project

CARDS Community Assistance for Reconstruction, Development & Stabilisation

CFP Common Fisheries Policy

EC European Commission


EFF European Fisheries Fund

EU European Union

FIS Fisheries Information System

FMP Fisheries Management Plan

FSU Fishery Sector Unit

GFCM General Fisheries Commission for the Mediterranean

ICCAT International Commission for the Conservation of Atlantic Tunas

IE Incidental Expenses

IMB Institute of Marine Biology

IPA Instrument for Pre-accession Assistance

IPARD Instrument for Pre-accession Assistance Rural Development

IT Information Technology

IUU Illegal, Unregulated and Unreported

JSTTE Junior Short Term Technical Expert

KE Key Expert

MAFWM Ministry of Agriculture, Forestry and Water Management

MCS Monitoring, Control & Surveillance

MFDS Montenegrin Fisheries Development Strategy

MOU Memorandum of Understanding

NSS National Sector Study

NMFMC National Marine Fishery & Mariculture Council

PMG Project Management Group

PO Producer Organisation

PSC Project Steering Committee

SAA Stabilisation & Association Agreement

SME Small and Medium Enterprises

SOP Standard Operating Procedures

SSTTE Senior Short Term Technical Expert

TA Technical Assistance

TAC Total Allowable Catch

TL Team Leader

ToR Terms of Reference


VMS Vessel Monitoring System

Table of Contents

EXECUTIVE SUMMARY / IZVRŠNI REZIME...............................................................................I

1 INTRODUCTION.........................................................................................................................1

2 BACKGROUND............................................................................................................................2

2.1 MARINE FISHING AREA............................................................................................................22.2 USE OF MARINE AREAS...........................................................................................................52.3 INLAND FISHING AREA.............................................................................................................62.4 POPULATION.............................................................................................................................72.5 TOURISM...................................................................................................................................82.6 MACRO-ECONOMY...................................................................................................................92.7 GENERAL FEATURES OF THE FISHERIES SECTOR..................................................................102.8 OVERVIEW OF FISHERIES PRODUCTION AND PROCESSING....................................................11

3 FISH PRODUCTION..................................................................................................................13

3.1 MARINE..................................................................................................................................133.2 LAKE......................................................................................................................................243.3 RECREATIONAL......................................................................................................................283.4 AQUACULTURE.......................................................................................................................303.5 MARICULTURE........................................................................................................................34

4 THE FISH PROCESSING SECTOR........................................................................................39

4.1 OVERVIEW..............................................................................................................................394.2 STRUCTURE............................................................................................................................404.3 IMPORTANT CONSTRAINTS AND AREAS FOR INTERVENTIONS...............................................41

5 GOVERNMENT POLICY.........................................................................................................42

5.1 OVERVIEW..............................................................................................................................425.2 GOVERNMENT FINANCIAL ASSISTANCE.................................................................................435.3 FISHING STRATEGY: 2009 - 2013...........................................................................................435.4 FISHING AREAS......................................................................................................................445.5 FRESHWATER FISHERIES........................................................................................................455.6 RECREATIONAL FISHERIES.....................................................................................................455.7 AQUACULTURE.......................................................................................................................465.8 MARICULTURE........................................................................................................................465.9 FISH MARKETING & PROCESSING..........................................................................................475.10 PRODUCER ORGANISATIONS..................................................................................................475.11 ENVIRONMENT........................................................................................................................485.12 GOVERNANCE.........................................................................................................................485.13 FOOD SAFETY.........................................................................................................................495.14 STAKEHOLDER PARTICIPATION..............................................................................................49

6 THE MARKET FOR FISH AND FISH PRODUCTS.............................................................49


6.1 SUPPLIES.................................................................................................................................496.2 CONSUMPTION........................................................................................................................526.3 DISTRIBUTION........................................................................................................................536.4 MARKET OUTLETS.................................................................................................................556.5 PRICES....................................................................................................................................57

7 LEVEL OF ATTAINMENT OF RELEVANT EU STANDARDS.........................................57

7.1 POLICY ON FLEET...................................................................................................................577.2 FOOD SAFETY STANDARDS....................................................................................................587.3 ENVIRONMENTAL ASPECTS....................................................................................................617.4 IUU FISHING..........................................................................................................................617.5 OCCUPATIONAL SAFETY........................................................................................................62

8 PAST TRENDS AND FUTURE DEVELOPMENTS IN TERMS OF INVESTMENTS.....62

8.1 FISH CATCHING......................................................................................................................628.2 RECREATIONAL FISHING........................................................................................................638.3 AQUACULTURE & MARICULTURE..........................................................................................648.4 PROCESSING & MARKETING..................................................................................................64

9 IDENTIFICATION OF POTENTIALS AND NEEDS OF THE SECTOR..........................65

9.1 SWOT ANALYSIS: COMMERCIAL MARINE FISH CATCHING..................................................659.2 SWOT ANALYSIS: SMALL SCALE MARINE FISHERIES..........................................................669.3 SWOT ANALYSIS: COMMERCIAL FRESHWATER FISHERIES..................................................679.4 SWOT ANALYSIS: RECREATIONAL FISHERIES......................................................................689.5 SWOT ANALYSIS: MARICULTURE.........................................................................................689.6 SWOT ANALYSIS: AQUACULTURE........................................................................................699.7 SWOT ANALYSIS: FISH PROCESSING....................................................................................699.8 SWOT ANALYSIS: FISH MARKETING....................................................................................70

10 IDENTIFICATION OF TRAINING NEEDS IN THE SECTOR...........................................71

10.1 TRAINING NEEDS FOR FISHERS..............................................................................................7110.2 AQUACULTURE.......................................................................................................................7210.3 MARKETING............................................................................................................................7210.4 CONSUMERS...........................................................................................................................72

11 OUTCOME..................................................................................................................................72

11.1 GENERAL RECOMMENDATIONS FOR DEVELOPMENT OF THE FISHERIES SECTOR..................7211.2 RECOMMENDATIONS FOR THE PREPARATION AND IMPLEMENTATION OF IPARD.................7911.3 PROPOSED MEASURES UNDER IPARD AXIS ONE..................................................................8111.4 PROPOSED MEASURES UNDER IPARD AXIS THREE..............................................................83


Page

7

EXECUTIVE SUMMARY / IZVRŠNI REZIME


1 INTRODUCTION As a candidate country, Montenegro may benefit from the “Instrument for Pre-accession for Rural Development” (IPARD). This is Component 5 of the European Union’s (EU) Instrument of Pre-accession (IPA), the overall aim of which is to increase the “efficiency and coherence of aid through a single framework, thereby strengthening institutional capacity, cross-border cooperation, economic and social development and rural development”.1

This sector study presents findings and recommendations on the use of IPARD funds to strengthen the competitiveness of the Montenegrin fishery sector under the three pre-defined axes (Axis 1: restructuring and modernisation of the catching fleet and fish farms; producer organisations; development of processing sector related to the processing of fish and fish products; Axis 2: the environment and support to local rural development strategies; Axis 3: fisheries infrastructure, diversification of rural economic activities; training; and technical assistance).

For the purposes of this report, the term “fishery sector” covers a number of production sub-sectors (marine capture fisheries, fresh water capture fisheries, aquaculture, mariculture and recreational fishing) together with distribution, marketing and processing of domestic production and imported fish. Other areas of interest are support infrastructure, supply and services, and representative organisations. Where appropriate, cross cutting issues with other sectors are identified.

The fish catching sector and aquaculture make a relatively small contribution to Montenegrin Gross National Product (GNP). However, in common with the fishing sectors in EU member states, the economic benefits of all fisheries’ related activities are significant in a local context and, if developed correctly, have the capacity to generate substantial multiplier benefits.

As domestic fish landings will never be enough to meet national demand (from Montenegrin consumers and tourists) the supply gap has to be reduced by increased aquaculture production and/or imports. The growing importance of aquaculture is recognised internationally as the catch from many wild stocks has diminished due to decades of over fishing while the demand for seafood has continued to increase. If international trade is used to fill the supply gap, the appropriate business model is one that maximises benefits to Montenegro with the development of domestic secondary processing capacity based on the import of frozen raw material directly from the catching country.

Historically, the fishery sector of Montenegro when it was part of Yugoslavia had little priority, with emphasis given to the potential in Serbia, Croatia and Bosnia Herzegovina. Currently, as an independent country that is applying for membership of the EU, the Government of Montenegro is confronted by two related issues: firstly, how to develop the potential of the Montenegrin fishery sector in order to maximise its benefit to the national economy; and secondly, the nature of the development of a sector that in the near future will have to compete with production from other member states in both domestic and export markets. Montenegro is a young country and significant work remains to be done in both the public and private sector; however, at this stage of the process, it is considered that IPARD funds could be used effectively to increase the size and efficiency of production units and improve the quality of the outputs.

This report has been prepared by the EU financed IPA project “Sustainable Management of Marine Fishery”. It was completed in conjunction with a socio-economic study that aimed to: (i) improve Ministry of Agriculture & Rural Development (MARD) understanding of the fishery sector; (ii) provide baseline information for the development of strategies to assist stakeholders; and (iii) establish a basis to measure and evaluate the impact of those strategies. The work programme from January to September 2011 covered: desk research of existing literature and policy documents; the design of questionnaires, including test interviews to refine prepared templates; the completion of 308

1 http://europa.eu/legislation_summaries/agriculture/enlargement/e50020_en.htm

http://europa.eu/legislation_summaries/agriculture/enlargement/e50020_en.htm


questionnaires; the tabulation and analysis of the data and information covering the various sub-sectors (table 1); and the preparation of this report.

Table 1: Respondents to the socio-economic survey by sub-sectorMarine Inland Both Total

Fishing vessels - large scale 23 23Fishing vessels - small scale 16 16 32Aquaculture 13 12 25Processors 1 1 2Wholesalers 6 1 7Retailers 5 5 10Restaurants /hotels 11 11Angling Clubs 18 18Anglers 38 142 180

101 172 18 308

The results of the IPARD Sector Study are the identification and prioritisation of key areas for potential intervention. Such interventions will: (i) contribute to the up-grade of the sector to EU standards; (ii) strengthen the overall competitiveness and performance of the sector; and (iii) contribute to the sustainable development of the sector.

2 BACKGROUND 2.1 Marine Fishing Area

Montenegro is situated on the eastern coast of the Adriatic Sea which opens to the Mediterranean Sea in the south. The country’s coast is about 200 km from the closest point in Italy. Many of the fish stocks in the Adriatic are shared by the coastal countries meaning that effective fisheries management requires a regional approach as the fishing effort by the fleets of other nations affects the potential sustainable catch of Montenegro.

In general, access to fisheries in the Adriatic is exclusive to the coastal state out to 12 nautical miles from base lines; outside 12 nautical miles there are international waters.1 The national waters of Montenegro are shown in Figure 1.

While the northern part of the Adriatic is a relatively shallow shelf that rarely exceeds 46 m. in depth, off Montenegro the South Adriatic Pit has depths of up to 1,200 m. (figure 2). This affects the nature and type of Montenegrin marine capture fisheries, and has led relatively small and unsophisticated Montenegrin vessels with limited autonomy to concentrate fishing effort in a fairly small coastal area. In turn, this has added to the pressure on the stocks found in that area. It is recognised that Montenegro needs to develop catching capacity to benefit from the harvest of resources found in deeper waters, while relieving the pressure on in-shore stocks.

1 In October 2003, Croatia declared an 'Ecological and Fisheries Protection Zone' in the Adriatic Sea. However, in June 2004 Croatia decided to delay the implementation of that Zone to European Union member states. Then, in December 2006, it decided to fully implement the Zone from 1 January 2008 – while eventually, on 13 March 2008, to again postpone the implementation on EU countries See http://www.fni.no/publ%5Cmarine.html


Figure 1: Montenegro’s coastal & marine fishing zones

Source: IMB


Figure 2: Depths in the Adriatic

Source: http://www.google.com/imgres?imgurl=http://mseas.mit.edu/archive/DART05/index_files/AdriaticMap.jpg&imgrefurl=http://mseas.mit.edu/archive/DART05/&h=694&w=600&sz=62&tbnid=1V8uQ0wZjSY7IM:&tbnh=241&tbnw=209&prev=/images%3Fq%3Dadriatic%2Bmap&zoom=1&q=adriatic+map&usg=__t1mqlYKiFfeqWQTLs3RwlTmp7mY=&sa=X&ei=ufEqTbftKc-p8AO595WiCw&ved=0CBYQ9QEwAA

http://www.google.com/imgres?imgurl=http://mseas.mit.edu/archive/DART05/index_files/AdriaticMap.jpg&imgrefurl=http://mseas.mit.edu/archive/DART05/&h=694&w=600&sz=62&tbnid=1V8uQ0wZjSY7IM:&tbnh=241&tbnw=209&prev=/images%3Fq%3Dadriatic%2Bmap&zoom=1&q=adriatic+map&usg=__t1mqlYKiFfeqWQTLs3RwlTmp7mY=&sa=X&ei=ufEqTbftKc-p8AO595WiCw&ved=0CBYQ9QEwAA




A large part of the Montenegro’s 294 km coastline is comprised of precipitous rocky cliffs interspersed with a few small beaches that become more prevalent to the south, culminating in a relatively long stretch of sandy beach (12 km) extending to the Albanian border at the mouth of the Bojana River. The rugged coastline limits the number of landing sites for fishing vessels. An exception is Boka Kotor (the most southerly fjord in Europe located to the north west of Montenegro) that provides shelter for commercial and small scale fishing boats.1 The ports of Herceg Novi and Tivat are located towards the mouth of the fjord and at its base lies Kotor. None of these have dedicated fish landing facility.2

2.2 Use of Marine Areas

A review3 of Marine Spatial Planning (MSP) in Mediterranean countries funded by the EU notes that sea fisheries are a minor activity and that the national priority is tourism. At present, the needs of the local fishing industry in terms of berthing, storage and catch landing facilities have not been assessed, nor the potential of a local working fishing industry as a tourist attraction.

Coastal zone matters in Montenegro are the responsibility of Morsko Dobro. Established in 1992,4 this enterprise holds responsibility for a range of issues from the enforcement of the terrestrial spatial plan for property development to the quality of bathing water.

The “Spatial Plan for Special Purpose Coastal Zone”5 was adopted in 2007.6 7 Inter alia the Institute of Marine Biology (IMB) reports that the Bay of Kotor and other coastal areas have suitable conditions for mariculture by rope culture (mussels and oysters) and cages (fin fish). The capacity for mussel cultivation is estimated at 300 mt a year, for lagoon fish breeding 3,000 mt and cage breeding 2,000 mt a year.8

Presently, there are no designated Marine Protected Areas (MPAs) in Montenegrin waters although one is proposed for an area north of Bar.9

1 For the purposes of this study, commercial fishing boats are defined as those of 12 m + length; small scale boats are those of less than 12 m.2 The Association of Professional Fishermen, South Adriatic is reported in in the process of gaining planning permission for a fishery harbour to be located to the south west of Igalo.3 PRC, 2011. “Exploring the Potential of Maritime Spatial Planning in the Mediterranean Sea” Framework contract FISH/2007/04. Specific contract No 6, Policy Research Corporation report to DG MARE, February 2011, 129p and annexes.4 http :// www . morskodobro . com / 5 “A Spatial Plan for the coastal zone / Public Maritime Domain as a Special Purpose Area was adopted by the Parliament of Montenegro in 2007. It was the first step Montenegro took towards an integrated view of the zone, encompassing both the land and the sea area of the entire region: a marine part: the area of the territorial sea; and a land part: a narrow coastal strip that makes a functional unit with the sea”. See European Study at http://ec.europa.eu/maritimeaffairs/studies/msp_med/montenegro_en.pdf6 “Public Maritime Domain as a Special Purpose Area”7 http :// ec . europa . eu / maritimeaffairs / studies / msp _ med / montenegro _ en . pdf 8 It is not clear what is meant by the term lagoon,9 See Ministry of Spatial Planning and Environment 2010. Management Plan Pilot Marine Protected AreaMontenegro. PART II – MPA: Management Recommendations, Goals, Objectives and Targets, MPA Zoning, MPA Management Structure, Start Up Programme. (Draft).

Ian Scott, 03/10/11,

This is wrong

http://ec.europa.eu/maritimeaffairs/studies/msp_med/montenegro_en.pdf

http://ec.europa.eu/maritimeaffairs/studies/msp_med/montenegro_en.pdf

http://www.morskodobro.com/


2.3 Inland Fishing Area

Montenegro has land borders with Bosnia and Herzegovina, Serbia and Kosovo.1 Away from the narrow coastal strip that almost disappears in the area of the Bay of Kotor, the geography is mountainous apart from two plains that are the location of the two main cities (Figure 3).

Figure 3: Montenegro: Main settlements and neighbouring countries

Source: http://upload.wikimedia.org/wikipedia/commons/f/f1/Montenegro_Map.png

While the total area of lakes is 376 km², 99 % of this is accounted for by Skadar Lake, which is the largest in the Balkans and shared between Montenegro (60 %) and Albania (40 %). The l ake is an ecosystem of international importance for numerous species of unique fauna and flora, particularly birds. However, a recent report finds it under tremendous pressure from pollution and uncontrolled fisheries.2 The World Bank is currently funding a joint Albania-Montenegro Ecosystem Management

1 Known as the Autonomous Province of Kosovo and Metohija in the 2006 Constitution of Serbia

http://upload.wikimedia.org/wikipedia/commons/f/f1/Montenegro_Map.png


Project1 for the lake2 coordinated in Montenegro by the Ministry of Spatial Planning and Environment3.

There is commercial fishing on Skadar Lake, while some is reported on the small Sasko Jezero close to the border with Albania. There are also a number of reservoirs of which Pivsjo Jezero close to Plužine is the largest at 112.5 km². In addition, there are 26 rivers.4 There is recreational fishing on these water bodies. although some of the catch may be sold informally to restaurants, retailers and consumers (see below).

There is a strong potential for freshwater aquaculture with a plentiful supply of fresh, clean, water allied with favourable climatic conditions. However, there are issues with fish farms located adjacent to rivers due to seasonal low flows.

2.4 Population

In 2008, the total population of Montenegro the country’s 13,812 km² was 622,344 (46.3 per km²). 5 6 The population breakdown between urban and rural areas was approximately 60:40. The country is divided into 21 municipalities. While the six coastal municipalities occupy 2.8 % of the area, they account for 24.2 % of the population. Figure 4 shows population density. The 2003 census reports inter alia: (i) 78 urban settlements had a population >200 of which 63 had >1,000 inhabitants; and (ii) 10 settlements had >10,000 inhabitants with six7 located inland and four8 on the coast. The low concentration of population in a large part of the country has implications for the distribution of fish especially when it is fresh.

Over the past two decades, people have migrated from the north of the country and rural areas to the cities and the coast in search of jobs and higher incomes. Between 1991 and 2003, populations decreased in all inland municipalities with the exception of Danilovgrad, Pljevlja, Niksic and Podgorica, but on the coast the only decline was in Ulcinj.

2 Ramsar, 2010. Assessment on current situation of Skodra/ Skadar Lake Ramsar Site. Regional Environmental Center, Albania report, 52p.1 This will consist of three key components: fisheries assessment; development of a five-year Management Strategy; and National Fishery Management Plans.2 Lake Skadar-Shkoder Integrated Ecosystem Management Project (LSIEMP) has three components 1. Capacity Building for Improved Understanding and Joint Management of the Lake, 2. Promoting sustainable use of the lake, and 3. Catalyze water pollution investments3 See http://www.mse.gov.me/en/sections/lake-skadar-ecosystem-management-project4 http :// en . wikipedia . org / wiki / List _ of _ rivers _ of _ Montenegro 5 http :// www . tradingeconomics . com / montenegro / population - density - people - per - sq - km - wb - data . html 6 This compares to 83.5 per km² in Croatia, 111 per km² in Albania and 200 km² in Italy. 7 Podgorica (136,473), Niksic (58,212), Pljelva (21,337), Bijelo Polje (15,833), Cetinje (15,137) and Berana (11,776). 8 Bar (13,719), Herceg Novi (12,739), Budva (10,918) and Ulcinj (10,828).

http://www.tradingeconomics.com/montenegro/population-density-people-per-sq-km-wb-data.html

http://en.wikipedia.org/wiki/List_of_rivers_of_Montenegro


Figure 4: Montenegro: Population density

Source: http://www.stockmapagency.com/Population_Map_Montenegro_C-Mont-2007-Pop.php

2.5 Tourism

Montenegro’s is popular with tourists with 1.2 million of them spending 7.6 million nights (96 % on the coast) on vacation in 2009. This compares to the 9 million nights of 1990. The peak tourist months are from May through September. The number of visitor nights is expected to grow with a strategy based on a tripling in the number of beds to 100,000 (compared to 2006),1 the targeting of higher income earners, and the promotion of tourism in inland areas. By 2020 the aim is for the sector to account for 22.5 % of GDP.

There are a number of cross cutting issues between the tourist and fishing sectors due to: the seasonal high demand for seafood especially fresh product; competition for available space both on-shore and off-shore; competition for workers; the risk of pollution especially in the Bay of Kotor and the potential and perspectives for an increase in recreational fishing. 1 http://www.ens-newswire.com/ens/jun2006/2006-06-28-05.html

http://www.stockmapagency.com/Population_Map_Montenegro_C-Mont-2007-Pop.php


2.6 Macro-economy

2.6.1 GDP

In 2010, GDP was about €3.03 billion, or €4,797 per capita, with an annual growth rate of 0.5%. Compared to neighbouring countries, the per capita figure is about the same as Bosnia Herzegovina, significantly more the Albania but less than both Croatia and Serbia.

In official statistics, fishing and aquaculture, together with hunting, beekeeping and water management are considered under agriculture which accounts for about 10 % of GDP. No disaggregated data are available for fishery related GDP. Despite the relatively small contribution to GDP, the fishery sector contributes significantly to the diversified earning strategy of many Montenegrins.

2.6.2 Employment

In 2009, total employment in Montenegro was 174,152, with 13.8 % engaged in agriculture, forestry and fishing. In May, 2011 unemployment was 11.6 % (table 2).1 This does not take account of under employment and data are not available on any regional variations. It is perceived that unemployment is very much higher in the northern towns and inland rural areas compared to the major cities and the coastal belt and this very much affects household incomes and spending patterns (see below). At the same time, tourist dependent employment will have a strong seasonal bias.

According to official figures, between 2006 and 2009, employment in marine capture fisheries was stable at 120 FTE,2 with 65 full-time and 97 casual jobs in marine fisheries, with respective numbers for freshwater fisheries of 103 and 25.3 It is not clear if these figures include mariculture and how they account for seasonal employment. Overall, fisheries and aquaculture production provides about 10% of total employment in the agriculture sector.

However, taking into account the number of vessels operating in marine and fresh water, together with mariculture and aquaculture, it seems highly likely that the numbers are considerably understated. Moreover, official figures do not reflect the real importance of fisheries to the national economy as they do not take into account activity in the “black” economy with the sale of fish by a small scale and “recreational” fishermen who gain some or part of their income from fishing. In addition, it is probable that the catch of fish for home consumption makes a significant but unreported contribution to the household economy.

Finally, in considering the importance of a particular sector to a nation’s economy, account has to be taken of related on-shore employment in up-stream and down- stream activities. While it may be concluded that due to the nature of the sector, the multiplier benefits from the production phases (catching and farming) are not high in the overall context of the Montenegrin economy, with better planning and implementation of a considered strategy they could be significantly increased.

Table 2: Montenegro: Employment by sector 2006 – 2009

1 Montenegro Employment Bureau. http://www.balkans.com/open-news.php?uniquenumber=107789 2 Full time equivalent.3 MONSTAT, 2010. Montenegro Statistical Office. 2010 Statistical Yearbook, Podgorica, 345 pp. from www.monstat.org/ userfiles/file/publikacije/Statisticki godišnjak CG.-2010, za WEB.pdf


Sector 2006 2007 2008 2009Agriculture, Forestry and Water Management 2,607 2,586 2,651 2,700Fishing 115 112 129 119Mining 4,159 3,753 3,721 3,178Manufacturing Industry 26,065 25,697 24,335 21,824Electricity 5,627 5,594 6,042 5,456Construction 6,853 6,647 8,831 9,997Wholesale and retail trade, repair 29,602 30,750 31,854 36,117Hotels and restaurants 10,928 11,307 14,641 16,678Transport, storage and communication 12,133 11,358 12,798 13,858Financial intermediation 3,114 3,143 3,476 3,748Activities related to real estate 5,905 5,354 5,631 7,356Public Administration and social Insurance 10,345 17,575 18,643 18,860Education 12,846 12,687 12,892 12,992Health and Social Security 12,012 12,004 12,356 12,238Other community, society and personal services 8,489 7,481 8,221 9,031Total 150,800 156,408 166,221 174,152

Source: Monstat (2010)

2.6.3 Income & Expenditure

MONSTAT data (2009) shows: (i) average income in Montenegro was €643 compared to €213 for the fisheries sector; (ii) the average number of persons per household in Montenegro was 3.43; and (iii) there is a strong variance in average household incomes between rural and urban areas. The inequality between household incomes leads to a Gini coefficient1 of 0.36. This led one author to conclude2 that “Montenegro is among the most unequal countries in the western Balkans, and there are indications that the large gap between rich and poor may be widening”.

Limited income affects the demand for fish and fish products and emphasises the importance of supplying cost competitive products in the retail market. Further, away from the touristic areas, limited household incomes restricts the money available for restaurant dining and this is a factor when considering the potential to target that market segment.

2.7 General Features of the Fisheries Sector

The fisheries sector consists of a number of production sub-sectors: marine capture fisheries; freshwater capture fisheries; aquaculture; mariculture; and recreational fishing. In turn each sub-sector can be further divided, for example into industrial and small scale fishing. Individual sectors present different characteristics including production systems, investment needs, marketing and required infrastructural support.

There are, however, some common points. Firstly, all the sectors can be characterised by their small scale nature and the limited size of the enterprises. Secondly, there is a large degree of informality in each sector and that makes it difficult to gain reliable statistics. Such informality includes the black economy with many of the smaller operators working outside any form of governmental control including the implementation of hygiene and quality standards. Recreational fishermen will often sell

1 The Gini coefficient is a measure of the inequality of a distribution, a value of 0 expressing total equality and a value of 1 maximal inequality2 http://www.bertelsmann-transformation-index.de/1399.0.html?L=1


their catch, while a large part of all sales are through informal channels. Illegal fishing practises (e.g. the use of dynamite and electricity) continue. Thirdly, the income from fisheries is in many cases additional to other income generating activities. Fourthly, there is limited capital available for new investment and this leads to technical inadequacy. Boats, engines and gear are old, and inefficiency is especially of concern when fuel costs are high. There are only limited examples of technical innovation. Fifthly, there is a lack of trained personnel, which goes some way (along with lack of capital) to explain the lack of technical innovation. Sixthly, while there are representative associations, analysis indicates that while there are exceptions these have limited objectives and activities and the main driver for change is companies and individuals that represent their own interests. Finally, a large part of the industry appears to lack respect for the rules and regulations promulgated to provide a firm basis for their own development.

In summary, the structure and competitiveness of the fishery sector may be characterised as weak. Moreover, there is a strong potential for informal activities (e.g. non-application of food safety standards and overfishing) to threaten the livelihoods of those associated with formal enterprises that have the most to lose from any deterioration in business conditions.

A more formal approach to sector planning and development that reduces uncertainty and risk could lead to robust growth and stronger economic benefits. While the potential for higher landings from the marine fishery in areas currently being harvested are limited, a policy aimed at sustainable management would provide the basis for long term health of the sector, without reducing the potential for growth in currently under-exploited fisheries. At the same time, it is clear that not only in Montenegro but worldwide, increased production from aquaculture will be the source of increased supply of fish. Montenegro has substantial water resources that could form the basis for significant development if production is more efficient; unit costs are reduced and sales price are competitive.

In addition, a healthy fish production sector is the root for multiplier benefits in reacted economic activities. The potential for this could be enhanced if consideration was given to cluster development based on such as dedicated landing sites for the fishing fleet.

2.8 Overview of Fisheries Production and Processing

The Montenegrin market for fish and fish products is supplied from national production (marine fisheries, freshwater fisheries, aquaculture, mariculture and “recreational” fisheries) and imports.As described in greater detail below:

Marine fisheries consist of two main sectors: (i) the commercial fleet comprises of 23 vessels (by end-June 2011, 18 were licensed to operate in 2011) greater than 12 m overall length (LOA), which in turn can be sub-divided into trawlers targeting demersal (bottom swimmers such as hake, red mullet) species, and the two vessels geared to harvest small pelagic species such as anchovy and sardine. The autonomy of the vessels is limited due to their age and the size of the engines; (ii) the small boat fleet of 100 to 150 (many of the boats are not licensed) open decked boats usually powered by small outboard motors. This fleet segment uses a variety of gears, mainly set nets, to catch a range of species.

In addition there is some fishing for shellfish while beach seining targets small pelagic fish that shoal close to shore.

Freshwater commercial fishing is by-and-large restricted to the effort of 175 to 200 small boats working Lake Skadar. In addition, the fish processing company, Ribartsvo, has fishing rights for bleak using gear deployed from fixed fishing stations.


It is widely reported that illegal methods, dynamite and electricity, are used to catch marine and

lake fish. Almost 8,000 people are licensed for recreational fishing in the sea, lakes, reservoirs and rivers.

Again, it is widely reported that a part of the catch is sold directly to consumers or to restaurants and some commercial fishermen take out a recreational license that is cheaper than a commercial license.

There is freshwater aquaculture for rainbow trout. The 13 licensed production units are small. National annual production of 300 mt to 450 mt compares to the reported output of one Bosnian farm in excess of 1,000 mt.

Mariculture is restricted to the Bay of Kotor. Here, mussels (120 mt – 180 mt per year produced by 12 licensed producers), oysters (two pilot projects) and sea bass and sea bream (about 70 mt per year produced by one company) are farmed. While cage mariculture in the 1open sea is technically feasible, investment costs are prohibitive.

The value added chain for national production is short with most sales made directly between the vessels and farms to restaurants, retail outlets and consumers with no value added. There is a high first hand sales price for fresh marine fish as restaurants are prepared to pay a high price for top quality fresh product. Accordingly, the pricing point of fresh marine fish and farmed sea bass and sea bream is beyond the reach of the majority of national consumers. There are no auction or wholesale markets. There are limited fish retail outlets; indeed away from the coast and the two main cities the socio-economic survey identified a single retail outlet selling fresh marine fish. It is interesting to note that the major part of the limited sales at this shop was cooked fish as it was said consumers did not know how to prepare fish dishes. The number of retail outlets selling fresh trout is higher, especially in population centres close to farms.

Two companies process fish for sale in the domestic and export markets. Ribartsvo is a canning and smoking factory located in Rijeka Crnojevica on Lake Skadar. Its primary material is lake fish plus trout from the company’s own trout farm, although in the past consideration was given to processing imported product such as sardine from Morocco. Ahileas is a newly constructed smoking facility near Podgorica airport that sources its raw material of trout and carp from Bosnia and Serbia.

Some fishermen may freeze their catch if demand is weak but this is done in household freezers and the quality is poor.

Imported fish and shellfish in a variety of presentations is the major source of supply for domestic consumption with sales in restaurants, supermarkets and other retail outlets throughout the country. There may be some repacking from wholesale to retail packs. However, a significant part of imports is of retail packs including convenience products (fish sticks, fish cakes etc) and canned fish and paste. This sector of the market is competitive with about eight main importing companies. As described below, some of these have made significant investments and are interested in further expanding their businesses, including the secondary processing of frozen raw material imported directly from the harvesting country.

1


3 FISH PRODUCTION 3.1 Marine

3.1.1 Overview

Marine fisheries off Montenegro take place in three distinct areas: (i) “inshore” out to 3 nautical miles (nm) from base lines; (ii) “off-shore” waters extending from 3 nm to the limit of territorial waters at 12 nm;1 and (iii) international waters outside the 12 nm zone. “Large-scale fishing” is not allowed in “inshore” waters or within the baseline, including the Bay of Kotor. More than half of the territorial waters have a depth > 100m. Due to the characteristics of the vessels, the Montenegrin fleet is unable to fish for demersal fish and shellfish in deeper waters.

A summary of marine resources available to Montenegrin fishermen is:

Demersal fish and shellfish. The most important species are hake (Merluccius merluccius), striped mullet (Mullus barbatus), monkfish (Lophius budegassa), picarel (Spicara flexuosa), cephalopods (species of squid, octopus and cuttlefish the most important of which are Illex coindetii, Todaropsis eblanae, Octopus vulgaris, Loligo vulgaris and Sepia officinalis), prawns (Nephrops norvegicus) and deep water rose shrimp (Parapaeneus longisrostris). IMB analysis, currently in the process of being up-dated, points to an annual maximum sustainable yield (MSY) of 606 mt2 for these species.

Pelagic species. The most important species are anchovies (Engraulis engrasicolus), and sardines (Sardina pilchardus). Resource assessments indicate a potential annual catch of up to 3,000 mt. To-date this potential has not been realised due to the limited catching capacity for pelagic fish. Factors such as limited experience in purse seine fishing and the lack of on-shore facilities to handle large volume fisheries combine to increase the risk of any new investment.

AdriaMed surveys have indicated the presence of a variety of commercial species at depths of 200 m. to 500 m.,

The official estimated total marine catch in 2009 was 773 mt, a reduction of 65 mt compared to the previous year. This was split 26 % pelagics, 38 % demersals and 36 % shellfish (table 3). On the face of it this indicates that a further 74 mt of demersal fish and 2,800 mt, with an estimated landing value of about €4 million, could be available for harvest. However, given the lack of log books and official catch records, together with the informal nature of fishing and uncertainty about the number of active boats and related fishing effort, this data must be treated with caution.

Table 3 : Seafish Catch (mt) by Species, 2008 and 2009

1 Territorial waters are defined by the 1982 United Nations Convention on the Law of the Sea is a belt of coastal waters extending at most 12 nm from the baseline. The baseline may be measured from the low-water line along the coast but usually consider straight lines that encompass within baselines fringing islands, the mouths of rivers, or the mouths of bays, where the line across the entrance to the Bay is no longer than 24 nm. 2 IBM, 2010. Report to MAFWM on national monitoring of demersal resources on the continental shelf in the territorial waters, the assessment of pelagic resources of anchovy (Engraulis encrasicolus), using daily production of eggs and larvae (DEP) and collection on biological data of the catch of small coastal fisheries on Montenegrin coast 2010, 44p.


Species 2008 2009 Pelagic species Sardine Sardela 32 30 Sprat Papalina 48 38 Anchovy Inćun 15 19 Atlantic mackerel Skuša 12 10 Scad Plavica 21 12 Horse mackerel Šnjur 17 13 Tuna Tuna 9 14 Other pelagic fish Ostala plava riba 87 63 Total Blue fish Plava riba 241 199 Demersal species Hake Oslić 34 24 Red mullet Trlja 21 14 Dentex Zubatac 10 4 Grey mullet Cipal 39 34 European eel Jegulja 1 1 Picarel Gira 16 15 Bogue Bukva 27 30 Salpa Salpa 11 7 Dogfish Pas 7 5 Catfish, shark Mačka 10 5 Ray Raža 13 9 Other fish species Ostale vrste ribe 84 143 Total Other fish Ostale ribe 273 291 Cephalopod species Squid Lignja 19 10 Cuttlefish Sipa 15 7 Octopus Hobotnica 23 15 Horned octopus Muzgavac 21 15 Total Cephalopods Glavonošci 78 47 Total Shellfish Školjke 205 215

TOTAL UKUPNO 838 773

Source: Monstat 2011

3.1.2 Regional Distribution

As previously noted, with the exception of the Bay of Kotor the configuration of the Montenegrin coast line limits locations for the safe berthing of large vessels. The major fishing port is Bar. While large fishing boats currently uses the outer basin of the marina, there are strong concerns that these will be displaced to increase the area available for leisure craft. While there are outline plans to develop a fishery specific area in the adjacent harbour, to- date this has not received any official support and there are no plans with related cost estimates.

In Herceg Novi and the Bay of Kotor there is no specific landing place, and boats have to make do with available facilities. The potential to increase the multiplier benefits stemming from fish catching is limited as activity is spread along the coast. A dedicated landing site could provide a basis for a business cluster that would group together related activities (e.g. ship building, repair, sales and service, marketing, storage) while facilitating monitoring of landings and enforcement of regulations.


There are outline plans for a designated fish landing close to Herceg Novi, but as with Bar these have not received Government approval and, as far as the consultant is aware, there are no detailed plans and related costs.

Due to their less specific requirements (the major need is for shelter in poor weather), small vessels operate from a number of locations along the coast. Apart from around the Bay of Kotor, other places are the mouth of the Boja river south of Ulcinje, Ulcinje, Dobra Voda, Bar, Sutomore, Canj, Petrovac, Przno, Becici and Budva. However, fishery specific investment on landing infrastructure is limited to small harbours at Ulcinje and Petrovac.

3.1.3 Structure

Commercial Fleet

As noted above, the commercial fleet > 12 m LOA is comprised of about 23 vessels of which by end-June 2011, 18 were licensed to fish in 2011. The overall picture is not clear as vessels were not licensed in 2009 and 2010. Inactive vessels do not take out a license.

Most vessels are trawlers that target demersal fish and shellfish. It would be possible to use non-traditional gears such as long line and gill nets, but the potential is currently limited due to lack of expertise and the investment required. However, given the high cost of fuel there is some interest in diversifying operations with static gear such as gill nets. Long lining is used to target higher valued species such as tunas and billfish. The choice of gear depends on a range of factors such as target species, ocean conditions and fishing area, allied with the skill and knowledge of the vessel skipper. Two vessels are geared to harvest small pelagic species such as anchovy and sardine.

The main characteristics of the 18 vessels sampled (not all responded to all questions) (table 4) are a mean average LOA of 18.4 and a mean average age of 28 years (although most were bought used by their current owners over the past decade). Reflecting their age, the majority are constructed from wood. The mean average current value of the vessels (as estimated by the owners) is €104,000 and the average replacement value is €271,000.

The same basic characteristics hold true for the engines. During the life time of a vessel the engine may be replaced several times. As shown by table 5, survey results show that larger boats fleet have engines with an average age of 19 and a mean average size of 346 hp (the latter figure is influenced by the size of the engines of two larger vessels and the median average is lower). The mean average current value of the engines (as estimated by the owners) is €42,000 while the replacement value is a mean average of €65,000.

These characteristics limit the autonomy of vessels to fish in poor weather conditions and they do not have the power to harvest deeper waters. Accordingly, the estimated replacement values may be too low if the fleet is to be up-graded to have the capacity to fish deeper waters; larger vessels with more powerful engines would be required and this would increase investment costs.

Under normal conditions, fishing gear does not last long not only due to usage but it is lost once or twice a year due to bad weather or snagging on rocks or other objects on the sea floor. Gear replacement and maintenance is usually considered as an operating cost. The mean value of gear was €10,400 with a mean average replacement value of €33,000 (table 6). In the past it has been commented that Montenegrin vessels do not use modern gear technology and this has the twin effects of reducing catch efficiency and increasing fuel costs due to “drag”.


Table 4: Characteristics of surveyed vessel s

Vessels > 12 m

Vessels < 12 m


Table 5. Characteristics of the engines of surveyed vessels Vessels > 12 m

Vessels < 12 m


Table 6: Value of Gear of the surveyed vessels

Vessels > 12m.

Vessels < 12 m

The survey found that the majority of vessels are limited to day-trips to fishing grounds within 12 nm of the coast with fishing time of 6 to 12 hours. In 2010, the number of fishing days ranged between 50 and 230 days, with a median of 83 days. Small-scale vessels use a combination of non-trawling gear (gillnets, long-lines, trammel nets, seines, traps). Monthly days-at-sea are lowest from October to March and higher in the remaining months with a peak in June and July; reflecting both weather and market demand. Annual catches could increase if vessels had greater autonomy to be at-sea in poorer weather and venture further from shore to fish in deeper waters and if market demand was to improve. This is a circular argument: market demand will increase if the price is reduced; the price will only reduce if the vessels become more efficient and catch more fish. The caveat is that effective fisheries management is needed to ensure that vessels with greater fishing power operate outside 12 miles and do not overfish resources closer to shore. The strategic aim should be to replace and not add to the existing fleet, and maintain in-shore stocks at a healthy sustainable level and available to a fleet of smaller boats that are also subject to rigorous and effective management. .

From 2006, two associations, one based in Herceg Novi and the other in Bar, represented the interests of the majority of the owners, including those of some small boats. Recently new associations have been formed in Herceg Novi and Bar.

The survey indicates that average employment per vessel is 3.9; implying total employment in this part of the catching sector of about 70. Given the low number of days-at-sea, few will be employed full time. There is no information on other sources of employment and income for the crews. The crew may include some owners who also skipper their vessels. Most owners have one boat, although a one enterprise owns two.


Small Boat Fleet

The small boat vessels are usually powered by small outboard motors and use a variety of gears, mainly set nets, to catch a range of species. There is limited knowledge of the activities of the small boat fleet, and in the past limited attention has been paid to them by MARD. It may be the case that their catch and associated employment and income is equal to if not greater than the commercial fleet. The small vessels have limited autonomy. Many will fish part time and effort may be opportunistic according to weather, demand and alternative work options. Not all the vessels are licensed, so the 82 that are (until end June, 2011) can only be taken as an indicative number of the active fleet, and it is thought that between 100 and 150 may work within the year.

The survey found that small boats fish within 20 nm of the coast and most inside 5nm on day trips. Fishing days are slightly higher in the small-scale fleet, between 30 and 260 days in 2010 (median 110 days), but the fishing hours are likely to be less. Static gear such as gill nets is set and left with the fishermen returning to check for catch. Activity is restricted by the weather and the market.

One of the new associations recently formed represents the interests of small scale fishermen.

Depending on their size, target fishery and length of trip, small boats will be manned by one or two people. If it is assumed that there are 120 small boats and the average crew is 1.5 this would indicate total employment of 180. However, for the majority this would not be full time employment and it is seasonal, although such as retired people may largely depend on fishing for income.

Other Marine Fishing Activities

There are currently four shellfish collection licences (Kotor – 2, Bar - 1, Tivat – 1). In addition, beach seining targets small pelagic fish that shoal close to shore. As mentioned previously, it is reported that there is the illegal use of dynamite to harvest fish.

3.1.4 Production Systems & Technology

See above.

3.1.5 Input Supply and Services

Commercial Fleet

To operate effectively, large fishing vessels require landing facilities that allow: (i) the effective discharge of the catch; (ii) ease in the supply of services such as fuel, ice and victualing; and (iii) safe berthing. While facilities are available to the Montenegrin > 12 m fleet, these are far from satisfactory. In the case of Bar, since its privatization the long term availability of one basin in the marina for the use of fishing vessels at an economic rent is unsure and this adds uncertainty to the sector. Elsewhere, larger vessels discharge and berth at various points in the Bay of Kotor. This is unsatisfactory from a number of viewpoints including cost, insecurity and the limitations associated with lack of a focus for cluster development that could reduce costs while increasing the benefits of the catching sector to the Montenegrin economy.

Vessels need a number of services. To reduce costs, vessel owners may undertake their own maintenance work but on occasions specialist tradesmen will be contracted to repair and maintain vessels, gear and electronic equipment. New nets and fish boxes are imported from Italy. There are local suppliers of fuel, oil, ice, provisions, insurance and administration.


Small Boat Fleet

Small boats have limited on-shore needs apart from safe berthing and a place to land. In many parts of the world small vessels are left on the beach, but this can lead to damage to the hull and may not be an option in Montenegro with pebbly beaches and competing use by tourists. The vessels tend to be powered by simple two-stroke engines.

3.1.6 Costs and Earnings

Commercial Fleet

Given the lack of data and the wide variation in the size and type of vessel, it is difficult to develop reliable costs and earnings (C&E) data for this size of vessel. Indicative figures are contained in table 7, using data provided in the survey and a number of simplifying assumptions.

Average annual earnings per vessel are €77,980. It should be noted that typically fishermen in any country will understate earnings. Fuel is the major spend, averaging 49 % of average operating costs and 27 % of earnings. Other main operating costs are fishing gear, engine repairs and harbour dues. Clearly, if vessels have newer, more efficient engines, considerable savings could be made on the fuel costs. Overhead costs total €3,505 with the main items being insurance, cost of fish sales and the fishing license.

In Montenegro, the normal practise is to pay crew either by: (i) a share (after deducting vessel operating costs for earnings, the remainder is divided between the crew (with a higher amount for the skipper) and the boat according to agreed proportion, with the vessel share used to pay overhead costs and allow for profit); or (ii) a daily wage. The average number of crew per vessel (including the skipper who may also be the owner) is 3.9 – and the indicated average annual income from fishing is €3,000. It is anticipated that this amount will be supplemented by other employment generating activities.

Earnings before interest, tax and depreciation (EBITD) are €19,785. However, as in other countries averaged fishing vessel C&E mask a wide variation in performance and it is likely that many of the vessels have a limited return on capital employed. Limited profitability reflects a low number of days-at-sea and high operating costs. Accordingly, vessels need to increase their fishing effort and this will only be possible by introducing new (or second hand) vessels to the fleet with greater autonomy and the ability to fish deeper waters beyond 12 nm from the coast. It is important to consider ways of reducing the fuel costs, through either investment in more efficient engines or shifting effort from static to mobile gear. At the same time, as noted previously it is vital not to over invest in the fleet so that the catches required to meet financial targets are not above the sustainable harvest of what is a renewable natural resource. Also, increased days-at-sea would imply greater effort in the winter months and this has implications for marketing and on-shore facilities


Table 7: Pro-forma costs and earnings of the surveyed vessels

Vessels > 12 m


Vessels < 12 m

Small Boat Fleet

As may be expected, the financial picture for smaller boats is considerably different. Using information gained from the survey together with a number of simplifying assumptions, it is possible to construct some pro-forma C&E (table 7).

Average earnings are €5,666 while the main spend is on fuel at €2,300 (41 % of earnings and 79 % of operating costs). Other operating costs are limited, leaving an operating profit of €2,751. After taking into account overhead costs of €689 (mainly the license and insurance), this leaves EBITD €2,062 that covers payment to crew, although in many cases the owner will fish by himself.

As with the larger boats, there will be a wide variation in the performance of boats, to a large part reflecting the level of activity. Given the relatively low investment cost, the barriers to entry to the sector are low. However, if fishing is not profitable then it is not sustainable – the owners have to earn enough to pay for the fuel.

3.1.7 Important Constraints and Areas for Intervention

The fishing catching sector in Montenegro faces many practical and institutional challenges as the country progresses towards EU accession.


The important constraints identified are:

One of the biggest threats to the long-term economic viability of the fleet is the low profitability of fishing enterprises that restricts investment opportunities and reduces the sub-sector’s competitive position. The use of obsolete boats and engines that need continual maintenance while lacking autonomy to fish in poor weather and deeper waters are the main factors limiting the annual number of days-at-sea that results in low annual catches. The position has worsened in recent years with a substantial increase in the real price of fuel used by old and inefficient engines. It is justifiable to conclude that a large part of the existing fleet is not fit-for-purpose. Accordingly, a key part of any strategy must be a renewal and restructuring of the fleet that will allow boats to increase the number of days-at-sea, harvest deeper waters and reduce running costs.

An initiative that could increase the profitability of the commercial fleet could be diversification of the type of gear used, with investigation of the potential for less fuel intensive techniques such as offshore gill and tangle netting, lining and trolling. If it was concluded that these gears could be usefully introduced, there would need to be analysis of the costs of any new gear and modifications to vessel, together with the needs for any training.

There is strong concern about the limited on-shore infrastructure supporting the catching sector, especially the larger vessels operating from Bar and the Bay of Kotor including Herceg Novi. While detailed planning including options analysis and cost benefit analysis have not been completed, there would appear to be strong arguments to develop two fishery specific landing places. The main objectives of any new investment would be to reduce the operating cost of the fleet, provide for cluster development including better handling and marketing facilities, and allow for better enforcement.

It is clear that the small boat fleet makes a significant contribution to the Montenegrin economy; giving income and food for a large number of households while supplying high quality fresh fish. At the same time, it may have strong sustainability credentials. In a cash business with no formal (e.g. banks) or informal (e.g. buyers) credits, when the value of the catch is insufficient to cover running costs (i.e. fuel) the boats will be unable to fish. In addition, small boats are unable to operate in poor weather. However, with low barriers to entry (low investment costs) there is the temptation to regard fisheries as an employer of the last resort with small boats allowed to operate without regulation. This approach is mistaken. The operation of too many small boats will lead to over fishing and fishermen will not be able to achieve a reasonable income. This emphasises that the small boat fleet must be effectively managed with effort by unlicensed boats prevented..

There may be room to improve working practises on-board fishing vessels, with the introduction of HACCP to bring about quality improvements. The initial approach would be to assess fish handling practices on-board and provide advice on how to improve quality.

Any increase in total catch supply throughout the year requires market development, especially for pelagic species such as sardines and anchovy. Consideration should be given to: (i) a promotional campaign to increase consumption of fish, especially in the north of the country; and (ii) support in developing the distribution chain to the final consumer. There is a caveat. Any marketing programme has to be carefully designed and only implemented when there are sure prospects for increased domestic landings, otherwise the impact could be to simply increase imports that at the moment bring limited benefit to the Montenegrin economy in terms of value added (see below).

The qualification about the potential for fleet modernization and restructuring is that the options must be considered within the context of sustainable yields with the risk of overfishing reduced by improved and effective fisheries management. Improved fisheries management requires


considerable strengthening of the institutional capacity to manage the fisheries, enforce regulations and complete the resource assessments needed as a basis for rigorous scientific advice that lies at the basis of fishery management planning. Given the nature of fish stocks, with many of them being trans-boundary, there is the related need for on-going cross border cooperation to develop stock assessments and a regional fishing plan for Adriatic fisheries.

Another issue is the availability of skippers and crew for larger vessels, especially those using new gear and new fishing techniques. This concern has arisen in finding crew for vessels targeting small pelagic fish. This problem is common to many EU member states, with people unwilling to fish due to the danger, work conditions and unsocial hours, especially if more attractive options are available on-shore. In turn, the lack of available trained manpower may act as a further disincentive for the modernisation of the fleet. On that basis there should be an assessment of how to provide a training programme in fisheries.

Given the age of the vessels and their sea worthiness, there is concern that the safety equipment should be of the standard required; if it needs to be improved then financial assistance would be required.

While it had been hoped that fishermen’s representation would be concentrated in a single body that could provide the basis for a functioning producer’s organisation, the recent trend is for fragmentation with the formation of two new associations. While the EU project is attempting to strengthen stakeholder participation in the fisheries management process with the establishment of the National Marine Fishing and Mariculture Council, it has concluded that the conditions are not appropriate for development of a producer’s organisation. It would be useful if additional support could be given to strengthening sectoral organisations.

3.2 Lake

3.2.1 Overview

Lake Skadar has important commercial fisheries, particularly for bleak (Alburnus arborella) and carp (Cyprinus carpio). Freshwater commercial fishing is by-and-large restricted to the effort of small boats, although the fish processing company Ribarstsvo does have rights to fish bleak from fixed fishing stations. There is no representative association for fishermen.

Lake Skadar “despite its shallowness … has a number of crypto-depressions (up to 63 m in depth) which … yield almost one-half of the lakes' commercial fish harvest, even though they occupy only 1 % of its area”.1 Potential annual lake production has been estimated at some 50 kg/ha of fish,2 including vulnerable and threatened species of sturgeon, eel, lamprey, guppy and flounder. Assuming a total minimum area of 350km2,3 this would imply potential annual fish catches of 1,750 mt with 60% available to Montenegro and the remainder to Albania. However, available information suggests that Montenegrin catches are substantially less than historic levels of more than 1,000 mt. While there are no reliable official catch statistics (MONSTAT reports 887 mt in 2009), current annual catches are estimated at between 100 mt – 500 mt. 4

1 http://www.fao.org/docrep/009/t0798e/T0798E01.htm2 World Bank, 2007. Project brief on a proposed grant from the Global Environment Facility Trust Fund in the amount of US$ 4.55 million to the Government of Albania and the Government of Montenegro for a Lake Skadar-Shkoder Integrated Ecosystem Management project, WB Sustainable Development Unit Europe and Central Asia Region (ECSSD) Report, 99p. and annexes 111p.3 This is in summer. In winter the area may be almost double at 690 km².

http://www.fao.org/docrep/009/t0798e/T0798E01.htm


Ribartsvo reports 2010 inputs of 30 mt of bleak, 20 mt of common carp, 15 mt of “Chinese carp”, 2.5 mt of perch (Perca fluviatilis) and 2 mt of roach (Rutilus sp. and Rutilio sp.) On the basis of survey results, the project suggests (assuming a fleet of 175 vessels) a total estimated vessel catch of 222 mt valued at €732,000 (Table 9), with a weighted average value of €3.30 / kg. This would indicate a total catch of about 250 mt (assuming Ribarstvo only catches bleak on its own account).

Whatever its scale, the reasons for the undoubted decline in availability of fish stocks are not understood. There is likely to be an interplay of factors including overfishing, illegal fishing (small nets and electricity), climate change and the introduction of non-native species of Chinese carp that compete for food with native species.

The figures suggest that inadequate management and subsequent over fishing together with other factors have led to foregone earnings compared to possible annual maximum sustainable yield (see above) of €2.6 million. This “loss” has strong implications for employment and income, not only in fish catching but also related fish processing. The potential level of rewards from a healthy fishery are sufficient to suggest that an annual spend of about €160,000 (5 % of potential earnings) would be justified to respond to the urgent need for implementation of strong management of the lake fishery, that includes (i) cross border cooperation with Albania; (ii) rigorous scientific assessment of the resource base and calculation of the annual MSY; and (iii) effective monitoring and enforcement.


The Lake Skadar National Park includes parts of the territories of three municipalities in the Central and Coastal regions (Podgorica, Bar and Cetinje). In 2007, an estimated 12,500 people lived in 40 settlements inside or at the edge of the National Park. Rijeka Crnojevica and Virpazar (with estimated populations of about 500 and 350 respectively) are the largest urban areas on the Montenegrin side.

There are fish landing points around Lake Skadar, although options are limited due to the topographical nature of the surrounding area with the road only approaching the water at a limited number of points. There is no on-shore infrastructure providing landing facilities with services such as water and fuel supply, gear stores, fish stores and marketing support. Some fishermen who live by the lake have facilities to keep their boat, engines and gear.

3.2.3 Structure

Vessels are licenced by the National Park and registered at the Port Authority office in Virpazar. While the final results of the 2011 annual licensing round were not available at the time of the socio-economic survey it would appear that there are a minimum of licensed 175 fishing vessels.

The sampled vessels have a length varying between 4.5 m and 7.5 m, with an average of 6.75 m. (table 8). In the sample, the age of the vessels ranged between 1 and 15 years, with an average of 8 years. Most were bought new, although some were purchased second hand. The estimated average current value of the vessels was €450 with an average replacement value of €860. Assuming a total fleet of 175 vessels, respective total values are €78,750 and €150,500.

Table 8: Lake Skadar: Vessel characteristics of the vessels

4 As reported in the strategy “A. Raznatovic, Senior Fishery Advisor, National Parks reports that catches could be as low as 100 mt. The University of Podgorica estimates that catches have fallen from an historic 1,000 mt to 500 mt”


Vessel characteristics Skadar LakeVessels surveyed 18LOA (m) 6.75Engine power hp 4.0Vessel age (years) 8Hull material Wood, plasticMain gears Nets, lines

The engines used are small, usually about 4 hp, although some boats have larger ones. Conditions on the lake conditions do not require large engines to operate and speed to arrive to and return from the fishing area does not appear to a major factor. This decision is probably influenced by the cost of fuel. Curiously, the engines are older than the vessels, possibly reflecting that they are more expensive. Individual fishermen may own several engines, perhaps showing that the work is full time and they cannot afford the down time resulting from an engine under repair. The estimated average current value of the engines was €580 with an average replacement value of €1,290. The previously favoured Tomas outboard motor is no longer available. Assuming a total of 250 engines, respective total values are €145,000 and €322,500.

While there are exceptions if another family member is available, most boats are operated by a single person. This would indicate total direct employment of up to 200.

Fishermen use a range of gear, with the main ones being set gill nets and lines. The survey indicated an estimated average current value for the gear of €1,260 with an average replacement value of €1,570. Gear may be relatively new; indeed fishermen report that they have to buy their gear back from thieves, or buy new, up to 5 times per year. Assuming gear for 175 vessels, respective total values are €220,500 and €274,750.

The indicative total investment in the fleet at current values is about €450,000 with a replacement value of €750,000.

Fishing trips last between 6 hours and 10 hours, with vessels operating from 10 km to 25 km from their base. The number of fishing days per year ranges between 75 and 280, with a median of 175. This indicates that in contrast to marine fishing, activity on the lake is a mainly a full time occupation. There is however a two month closed season in April and May.

Fish are most often sold live. No ice is used.


See above.


Available figures suggest that fishing on the Lake is profitable (table 9). There is some scepticism about the first hand sales values reported in the survey that indicate average gross annual earnings of €2,750 (other data shown above indicates an annual average catch per boat of 1.26 mt which at an average value of €3.30 would provide an average gross income of €4,186). With total expenses of €1,200 the average annual income is about €1,500 once low overhead costs are taken into account. While fuel is the major cost, profitability reflects the low use of fuel (< €5 per day). Fishing gear is the second most significant cost. At the same time, while the vessels are profitable, incomes are low


and this emphasises the importance of strengthening the resource availability to provide higher catches.

Table 9: Lake Skadar: Total estimated fish catch & earnings from survey results

Species 2010Factory

MT

175 * FV MT

2010€/kg

100 * FV

‘000 €Carp 20 116 3.13 426

Grass carp 15 61 0.50 38Grey mullet 0 18 3.52 63

Bleak 30 11 1.67 68Eel 0 16 7.69 123

Other fish 4.5 0 3.00 14Totals 70 222 3.30 732


A healthy Lake ecosystem presents an extraordinary opportunity to Montenegro on a number of levels.

Recovery of the stocks will improve incomes and potential employment. This would not be in fishing, where a higher catch per unit effort would benefit existing fishermen, but indirectly particularly through value added at the fish canning factory and other forms of related on-shore employment.

An increase in the national supply may allow for substitution of imports. For example, canned bleak is similar to canned sardine (although pricing needs to be taken into consideration).

Improved stocks would benefit tourism: an active fishing fleet is an attraction; the availability of locally caught fresh fish is a strong marketing tool for restaurants; and a healthy ecosystem will encourage environmental and ornithological tourism. As described in the WWF web site,1 “Lake Skadar is a critical wintering and staging site for migratory birds and European waterfowl and the western most nesting site for the rare and elegant curly or Dalmatian pelican; in all, more than 280 species of birds have been recorded here” and “The Montenegrin part of Skadar and its surrounding area were declared a National Park in 1983, got the Important Bird Area status in 1989 and in 1996 it was included in the Ramsar2 list of wetlands of global importance”. Expressed simply, the fewer the fish the lower will be the number of birds.

It is important to establish joint projects between Montenegro and Albania aimed at delivering a robust scientific assessment of fish resources and related management measures. In 2008, the World Bank approved a $4.55 million Global Environment Facility grant ($1.99 million for Albania, and $2.56 million for Montenegro) for the joint Albania-Montenegro Lake Skadar-Shkodra Integrated

1 http://mediterranean.panda.org/about/med_freshwater/skadar/2 “The Convention on Wetlands (Ramsar, Iran, 1971) -- called the "Ramsar Convention" -- is an intergovernmental treaty that embodies the commitments of its member countries to maintain the ecological character of their Wetlands of International Importance and to plan for the "wise use", or sustainable use, of all of the wetlands in their territories”. See http://www.ramsar.org/cda/en/ramsar-about/main/ramsar/1-36_4000_0__

http://www.ramsar.org/cda/en/ramsar-about/main/ramsar/1-36_4000_0__

http://www.ramsar.org/cda/en/ramsar-about/main/ramsar/1-36_4000_0__

http://mediterranean.panda.org/about/med_freshwater/skadar/


Ecosystem Management Project. In October, 2010, the Ministry of Sustainable Development and Tourism sought expressions of interest in three projects relating to development of a data base, a resource assessment and a fishery management plan.

Support is needed to add to the competitiveness of the fisheries, most notably with on-shore infrastructure (services and storage facilities for live fish) and improved capacity for direct marketing to limit the length of the distribution chain. Preferably, marketing should be undertaken by the fishermen and their families in order to maintain as much of the sales value as possible within the fishing households and communities.

Given the nature of lake fisheries it would be interesting to establish the potential to restock the Lake with native species. As was noted above, the Albanians are reported to have introduced the non-native Chinese carp in the nineteen-seventies and this may have contributed to the current status of the ecosystem; any new attempts to restock the lake must consider the implications of any initiative. If successful, restocking would benefit commercial fishers, recreational fishers and the bird life.

3.3 Recreational

3.3.1 Overview

A large number people fish the sea, lakes, reservoirs and rivers using rod and line. While this is supposedly a recreational pastime, it is likely that a significant part of the catch is sold informally to restaurants and consumers, or used for home consumption.

Recreational fishermen are organised into clubs and associations. This reflects the experience in other countries where sports fishermen are proactive in influencing policy and supporting their interests through strong representative organsaitions..

There are two active angling national federations, corresponding to four groups at national level; the Federation of Sea Angling of Montenegro, that brings together sea angling and casting competitions; and the National Association of Freshwater Anglers for coarse fishers and fly fishers. The Associations are well organised, with annual general meetings, regular networking activities between local associations and international events.

The national associations and clubs are registered with the Sports Ministry. A club needs a minimum of 5 members to be registered. MARD issues angling licences and fixes the annual fee, including a part that the club has to pay to the Ministry.


The survey covered fishermen from 19 municipalities who fished a wide range of water bodies – the sea, lakes, reservoirs and rivers.

In 2010, 2,881 sea anglers were registered in 19 sea angling clubs covering the entire coast including the Bay of Kotor. The national federation organises national and international championships. In 2009 it hosted the shore angling world championship which attracted 230 international competitors. In addition, there will be some marine sport fishing by international tourists but no data is available on the extent and nature of this activity.

A total of 25 clubs represent around 5,000 anglers in fresh waters. In addition to cooperative activities of networking and competitions, freshwaters angling clubs are active in environmental management while some clubs contribute to local school awareness and education campaigns. The bigger clubs


hire wardens, which are partly paid by the Ministry, who report pollution, help control poaching and organise re-stocking and ecological management of their local water bodies.

3.3.3 Structure

The 24 clubs that contributed to the survey had more than 2,400 members in 2010. About 80% of these paid a membership and licence fee between €10 and €60, providing an annual income of more than €50,000. All club officials work on a voluntary basis.

The typical recreational fisher is male and aged between 30 and 60. Most fish between 50 and 100 days per year, although a surprising number are active for more than 250 days. The level of activity depends on work commitments and available budget. Given the opportunity, most would fish more days.

In fresh waters, fishers target trout and a range of “coarse” fish while in marine waters a variety of species are pursued.


Recreational and sport fishing describe fishing primarily for pleasure or competition. Recreational fishing has conventions, rules, licensing restrictions and laws that limit the way in which fish may be caught; typically, these prohibit the use of nets and the catching of fish with hooks not in the mouth. The most common form of recreational fishing is done with a rod, reel, line, hooks and any one of a wide range of baits or lures such as artificial flies. The practice of catching or attempting to catch fish with a hook is generally known as angling. In angling, it is sometimes expected or required that fish be returned to the water (catch and release). Recreational or sport fishermen may log their catches or participate in fishing competitions.

3.3.5 Economics of the Sub-sector

In the past decade the contribution of recreational fishing to national and local economies has been increasingly recognised in member states of the EU. Indeed, in some cases it has been concluded that this sector can contribute more to the economy than commercial fishing without risking the sustainability of the stocks and this is increasingly reflected in fishery management planning for specific species. There is a clear potential to develop both sea and freshwater (rivers and lakes) angling activities in Montenegro, through links with sports and rural tourism and local environmental management initiatives.

As noted previously, anglers often take some fish home and this can make an important contribution to the household economy. Fishermen make expenditures on licences, competition fees, fishing tackle and equipment (either locally or internationally via the internet), food and transport. Altogether of people surveyed the annual median spend was €300 per person, varying between nil and several thousand Euros. If the median spend applied to all 8,000 anglers, the annual angling spend would be €2.4 million.


The main issues identified by surveyed clubs were the lack of adequate enforcement to reduce poaching and illegal fishing, the risk of contamination and pollution and the need to restock.

Given the potential benefits to tourism, it seems incumbent on the authorities to implement a strategy to use recreational fishing to increase the offer of leisure activities for national and international


visitors. This could be of particular significance in inland areas, especially where the current tourist season is limited to the winter months. Lakes well stocked with native species such as brown trout could prove to be of strong interest. Increased numbers of visiting recreational fishermen benefit local economies with expenditure on accommodation and food.

Many fishermen spoke of the need to import their fishing gear, with purchases made on the internet. The project does not have the resources to review the number and location of retail outlets for recreational fishing equipment, but it may be the case that financial support could be provided to develop this activity and increase the benefit to Montenegro from any value added.

Strong consideration should be given to including recreational fishing in any fishery management plans prepared for the marine and Lake Skadar fisheries. This would reflect the importance of recreational fisheries to the national economy and reduce the risk that over fishing limits the resources available to sports fishermen. Also, account must be taken of the recreational catch when assessing the status of the resources. While data is not available, 2,881 recreational fishermen fishing an average of 80 days per year with an average daily take of 1 kg amounts to 230 mt of marine fish per year. This is significant when compared to official landings of 500 mt of demersal and pelagic fisheries.

It is reported that many recreational fishermen sell their catch. However, there should be a clear separation between recreational and commercial fishermen and recreational fishermen fishing for commercial gain should be subject to appropriate licensing with an adequate catch reporting system. This is not only to strengthen management of the fisheries, but also to ensure the traceability of fish offered for sale in retail outlets and restaurants. Bona fide recreational fishermen should implement “bag limits” and in some areas of water, particularly inland, a policy of “catch-and-release”. This is particularly important when there is limited understanding of the resource status and there is no restocking, with the required approach being to limit-the-kill rather than kill-the-limit.

3.4 Aquaculture

3.4.1 Overview

In Montenegro, fresh water aquaculture has a long history and is based on the rearing of rainbow trout (Oncorhynchus mykiss), an introduced species more suited to farming that the native brown trout (Salmo trutta morpha fario). In the past there was some production of carp (Cyprinus carpio) at a farm close to Podgorica but this is now closed. In addition, there has been some interest in the farming of other species, including sturgeon, arctic char (Salvelinus alpinus) and hybrid “baster” (Acipenser ruthenus and Huso huso) but no investments have been made.

Articles 22 to 26 of the “Law on Freshwater Fisheries” regulate the establishment of fish farms in fresh waters. Article 25 of the “Law on National Parks defines the terms of developing commercial activities in national parks. There is one fish farm on Lake Skadar and it would appear to be significant potential for more.


As shown by table 10, trout farms are distributed throughout the mountainous area, where conditions provide a supply of clean water while space is available close to the river to allow construction of the raceways. The issue is seasonal shortage of water. It is assumed that there are many suitable sites in Montenegro; what is not known is the potential to increase the capacity of the farms currently


Need to confirm this – does Ribartsvo really have a trout farm on the Lake?


operating. Lakes and reservoirs present an option for appropriately located cage operations that would not have issues with continuous water supply.

Table 10: Montenegro: Trout Farms

Name of farm Location Area (m2) Production (mt/year)

Capacity Actual

Mareza Podgorica 4,000 100 100Veruša Podgorica 400 10 10Veruša Podgorica 550 15-20 10Rastovac Nikšić 50Vir Nikšić 15-20Aqua d’Or Plužine 1,000 (22 cages) 250 130Krupac Nikšić 1,000 (14 cages) 50 25-30Šavnik Šavnik 10Bistrica Bijelo Polje 550 20 15Buče Berane 6,000 200 40Trebaljevo Kolašin 600 30 10Bistrica Bijelo Polje 500 20 15Vrela Ribnička Podgorica 1,000 25-30 15Grujičić (Owner) DanilovgradRadenko (Owner) MojkovacMarić (Owner) ŽabljakCrmnica CetinjeNovaković (Owner) MojkovacVukojičić (Owner) PljevljaRabrenović (Owner) MojkovacRabrenović (Owner) AndrijevicaMarković (Owner)Milinčić (Owner) Opasanica

3.4.3 Structure

There are two types of trout farm in Montenegro. The majority are small, family run, companies with limited investment and low production capacity. In addition, there are two large multi-site vertically integrated companies with total production capacities of 250 mt and 200 mt. This compares to one farm in Bosnia with a reported annual output in excess of 1,000 mt (in a country with 4,000 mt annual production of trout and about 2,300 mt of carp). Most are raceways sites, some with hatcheries, and there are 2 cage sites, one on Lake Krupac near Niksic, and one on Lake Pivsko near Pluzine.

There is a licensing scheme for trout farms. While the socio-economic survey was completed before the end of the 2011 process, until end June 2011 there had been 23 licence applications (table 9). However, field visits and survey interviews indicate that 30 enterprises are operating.


10 companies responded to the socio- economic survey, including one with two production units (one raceway and one cage, and a hatchery). Respondents provided a number of details including the area of the production site size, production capacity and actual production.

In the survey, 8 farms reported annual production of between 1mt and 50 mt, one with between 50 mt and 100 mt and one with between 100 mt and 150 mt, leading to a total of 372 mt. More than half of the sites produce between 10 and 15mt. Overall capacity utilisation was 51 %. This would imply that total annual production in Montenegro (assuming the non-responding farms are small scale) is about 600 mt, with a total capacity of about 1,200 mt.

Smaller farms only employ one or two people. The largest farms employ 8 to 10 people. From the survey responses it is not clear if this includes the owner. The data implies that total direct employment in the sector is less than 100.


Trout grow best within a temperature range of 10º c to 21º c. The most commonly used method for trout farming is a series of concrete raceways that have different design and characteristics depending on the area and topography of the land and the owner’s requirements. Typically they are 1 m. deep, 1.5 m to 6 m wide and 15 m to 30 m long. These dimensions can vary widely, depending on the size and shape of the area the farmer has available.

Trout farms require a continuous supply of flowing water that is pumped into one end of the raceway, where it flows down to exit at the outlet either by gravity or pump. Water passing through the farm is contaminated by waste and should be cleaned before re-entering the river.

The capacity of the farm is based on the volume of the raceways (m³ of water) and the density of stocking. Full cycle production involves the growth from roe to consumption size fish, and the production area is divided between fingerlings, juveniles, grow-out and brood stock. Most farms in Montenegro are limited to the grow-out of trout to a marketable size. Other factors that affect actual production are the market, finance and the availability of brood stock and juveniles.

An alternative to race ways is cage farming with net cages located in freshwater lakes.

Typically trout need 8 months to grow from fingerlings to a market size of 300 g – 400 g. (although larger fish are now being sold in the Montenegrin market).

Trout are highly susceptible to diseases and this leads to the application of medicinal products that most often are mixed with the feed. Stocking at too high a density increases the risk of diseases. One finding of the EU fisheries project (2007 to 2008) was that there was insufficient understanding of the correct doses of medicine to apply and this led to concern that marketed trout could be harmful to consumers.

Farmed trout are fed a pelletized commercial feed which is high in protein and fat. Mechanical feeders are preferred because the fish should be fed small amounts many times a day rather than a large amount once or twice a day. This maximises feed conversion rates (FCR) and reduces waste. Most farms import their feed from Italy, either directly or indirectly through a bigger farm, while two trout farms import some from Serbia.

The majority of the trout farms in Montenegro can be characterised as low technology. If competitiveness is to improve (reducing the average first hand sales price from about €3.80 / kg towards the €2.25 reported in Bosnia) the size of farms has to increase with more effective utilisation


of productive capacity. Modern technology with such as feeders and aeration could improve the product while reducing costs by ensuring a more effective FCR (i.e. less food required to increase the weight of fish by 100 g). Also important is to increase market demand, either through wider distribution of fresh product or increasing the range of products e.g. smoked trout, canned trout, frozen fillets etc. It may be the case that the national taste for smoked pork products and smoked bleak indicates a potentially strong market for smoked trout, although much would depend on the pricing point.

Briefly, the technology used in carp farms is more extensive than intensive, with ponds constructed with earth walls and a suitable system for pumping water. If juveniles are available carp farming is suitable for small scale operation, and in some countries may be integrated with the rearing of livestock.


The average investment cost for the 8 small sized trout farms reporting in the survey was €218,125, or about €20.5 / m². Only one company, which has two grow-out systems and a hatchery, reported substantially higher investment costs.

Analysis of the available data, which is somewhat restricted, shows average annual sales of about €57,500, with total costs of €37,000, leaving EBTD of about €15,000 after deducting overheads that mainly comprise of financial costs.

Feed (33%) is the highest cost for trout farms followed by labour (20 %) and transport (6 %) (for supplies and product delivery). The cost of feed has increased dramatically over recent years, largely due to higher demand from China that have pushed up the commodity price of fish meal that is the main ingredient of fish meal. Fuel costs have also increased. Such cost increments in farming operations with limited production both reduce profitability and further limit the capacity to compete in the national and regional markets. While labour inputs are minimal, the need for qualified staff may increase their unit cost.


The major constraints to development are: the high unit costs of production that limit the ability of local companies to compete with producers in neighbouring countries; a small national market (in part because of the high sales cost); and lack of investment capital to increase production capacity.

The apparent per capita consumption of trout in Montenegro is less than 1 kg per person. Market opportunities are limited due to sparse populations close to production units and the high cost of transport to the major cities and the coast. The only trout processor (smoked product) uses lower priced Bosnian fish with more consistent quality as raw material (see below)

The EU fisheries project (2007 – 2008) identified a range of other limiting factors such as the lack of trained personnel, variable quality with high mortality, old brood stock, insufficient water at certain times of the year and the non-application of HACCP standards that would reduce the risk of, for example, overuse of medical products.

This leads to the conclusion that there is the opportunity for intervention in a number of areas.

A major need is financial support to allow efficient farms to increase production and reduce costs. Respondents to the survey noted; (i) the lack of financial resources and government support; (ii) their


interest in increasing production capacity; (iii) improved capacity for each farm to produce eggs and fingerlings; and (iv) interest in developing value added processing.

Respondents to the survey did not mention the need to improve national capacity to promote sustainable and healthy aquaculture production for domestic consumption and trade. It may be lack of experience and/or technical expertise that leads farmers not to consider issues related to policy and national aquatic animal health (AAH) strategy, marketing including AAH requirements, risk analysis in aquaculture, product safety and quality assurance, and diagnostics, surveillance and reporting of aquatic animal diseases. A national AAH management strategy would consider such issues as a national reference laboratory, a disease diagnostic manual for workers and a veterinary inspector’s checklist for aquaculture farms and related processing facilities. The objective would be to improve food safety and to develop productive capacity based on a market strategy that encompassed targeting of specific export markets.

As with other sub-sectors, one issue is the lack of a functioning association that represents members’ interests. There is also a need to identify how technical expertise needs to be strengthened in order to provide the basis for sustainable development of the sector.

3.5 Mariculture

3.5.1 Overview

Articles 68, 69 & 70 of the Fisheries Law (2009) define administrative responsibilities, eligible companies and the licensing procedure for mariculture operations.

A number of conditions are used to indicate the suitability of an area for mariculture including the risk of contaminants, hydro-dynamics, the presence of eutrophic1 areas with risks for mucilage phenomenon,2 the intensity of marine traffic, the location of special protected areas, areas reserved for tourism and recreational activities, and special-purpose areas (e.g. military areas and archaeological sites). This has led to the classification of the Montenegrin coast into three categories: category 1 for mariculture and complementary activities; category 2 for mariculture and other business activities that do not have a negative impact on mariculture; and category 3 where mariculture is not allowed. The areas are well defined by location.


Mariculture is currently restricted to the Bay of Kotor which is sheltered and suitable for small scale developments.

3.5.3 Structure

Activity is currently restricted to the farming of mussels (Mytilus galloprovincialis) sea bass (Dicentrarchus labrax) and sea bream (Sparus aurata). Two sites are licensed to produce oyster (Ostrea edulis) with a combined capacity to produce 130,000 oysters/year. While the first test production of oysters was in October, 2011, there is currently no commercial production. Historically, the open nature of the Montenegrin sea that by-and-large lacks shelter from islands, bays

1 Eutrophication is “the process by which a body of water acquires a high concentration of nutrients, especially phosphates and nitrates. These typically promote excessive growth of algae. As the algae die and decompose, high levels of organic matter and the decomposing organisms deplete the water of available oxygen, causing the death of other organisms, such as fish”. See http://toxics.usgs.gov/definitions/eutrophication.html2 Surface mats of mucus

http://toxics.usgs.gov/definitions/eutrophication.html


and inlets, has precluded consideration of mariculture operations. However, recent technological advances make open sea mariculture an option, albeit at a high capital cost due to the infrastructure and support services required.

Mussel cultivation in Montenegro has a history of about two decades during which time small scale operations have been developed in suitable locations around the Bay of Kotor around the Bay of Kotor, usually but not exclusively close to the owner’s place of residence or business. Thirteen sites are currently licensed for shellfish farming with 12 in production (Table 11). Of these, one is a mixed fish and mussels site with the remainder for mussels. There is a substantial variation in the enterprises in terms of investment, area and productivity. None, however, match the scale of competitors in neighbouring Croatia (2,000 mt of mussel production in 2009).

Data show that the annual production capacity for mussels is about 400 mt, but actual production is about 110 mt, or about 28 %. The largest farm could produce up to 100 mt per year, but is currently doing about 20 mt. Only one company reports producing to its capacity.

In addition, the limitations of supervisory institutions has allowed the establishment of a number of small grow-out locations dotted along the Bay, the annual production of which is expected to be limited to a few kilos. This gives rise to the concern that the lack of phyto-sanitary controls will increase the risk of contamination and the subsequent intoxication of consumers. While progress is being made in developing a depuration centre, it is important that in the future all mussels sold are certified as being treated there or that they come from farming in Class A waters with effective monitoring systems.

A single company produces sea bass and sea bream for which the initial investment cost in cages is relatively high, as are the operating costs especially for brood stock and feed that are imported. Production is 70 % utilised with annual production of 35 mt for both species.

Table 11: Mariculture Farms

Name of farm Location Size (ha)

Annual Production Capacity

(mt)1

Actual Production

per year (mt)

Uzgajalište Svetlane Šupice Donja Jošica, Herceg Novi 1 70-100 20

Uzgalište Gorana Bige Lipci, Kotor 0,5 15 8

Uzgajalište Miloša Grubačevića Dražin Vrt b.b. Kotor 0,02 10 7


Uzgalište Slava Svilanovića Donja Jošica, Herceg Novi 1 10-12 4

Uzgajalište Sretena Krivokapića Orahovac, Kotor 0,8 15 10-12

Uzgajalište Vasa Dubravčevića Đuraševića obala, Tivat 1,5 20-22 10-12

Uzgajališe Gojka Živkovica„Ljuta“ Ljuta b.b. Kotor 0,6 30 7

Uzgajalište Radević i Vukasović Dražin vrt b.b. Kotor 0,9 50 30

Uzgajalište Nevresa Đerića„Školjke Boke“

Orahovac, Kotor 0,5 80 ?

Uzgajalište Sloba Vujovića Kukoljina b.b. Tivat 2,1 100 5

Uzgajalište Duška Vlahovića „Ostrvo cvijeća“

Brda, Tivat 3,0 30 30

Uzgajalište „COGI“ Brbat, Kotor 1(incl.

Oysters)

30 14

50 000 pieces

Oysters

?

1.5 50 sea bass 35

50 sea bream

35

The major constraint is the size of the domestic market and much higher production prices that Greece and Turkey that supply export markets throughout Europe. In 2008, the Greeks sector produced 450 million juveniles in 2008 and 120,000 mt of sea bream and sea bass (about 47% of total European product), with 106 companies employing 10,000 people.1 directly or indirectly. Three- quarters of the production is exported.

Most of the mussel farmers belong to the Association; however they characterize this as being weak with limited function. From observation, it is known that the President of the Association is active, but there is limited on-going input from members.

One oft mentioned possibility for new investment Montenegro is in the ranching of blue fin tuna (Thynnus thynnus) with small bluefin tuna captured in the Adriatic and Mediterranean, transported live to cages and grown-on until market size for subsequent slaughter and sale for the Japanese market. On-growing facilities have been developed in a number of countries, such as Turkey, Croatia and Malta. However, initial investment needs are extremely high while demand from this lucrative has led to the overfishing of the resource to the point where the species may be declared in danger of extinction. New investment is not recommended.

1 http://www.aquark.gr/index.php?option=com_content&view=article&id=157:article-on-greek-mariculture-2011-in-aquaculture-europe-vol-36-2-june-2011&catid=71:sector&Itemid=276


The survey indicates staffing at farms of between one and 9 people. Average employment is 2.9 per farm (excluding the owner) and there is limited part time and casual work. Making assumptions about the size of farms, this would indicate employment of about 40 people.


The system of culture (long line) used in Montenegro is common to all individual operations which share the same oceanographic, bathymetric and biological conditions. Essentially mussel spat are attached to a rope and covered by a mesh, and the ropes are suspended between plastic floats. They use no more than 3 m of the water column in costal zones and are at a maximum depth of approximately 25 m. to 35 m. The growing period is between 15 to 18 months. There is limited mechanization with almost all the procedures are carried out manually. Small variations in technique reflect individual preferences or trials being carried out in individual farms. However, such variations do not explain significant differences in productivity between farms. Studies have demonstrated that between 74 % and 86 % of the variance in productivity between different culture zones reflects environmental conditions. The most favourable areas have good food availability and strong currents, where mariculture can take place in harmony with other activities such as fishing, marine traffic, recreation and tourism.

In intensive production of sea bass and sea bream, on-growing units are supplied with fry from hatcheries and controlled diet is provided. Juveniles are bought at a size of 1.5-2.5 g and reach a marketable size of 400-450 g in 18 to 24 months. On-growing can take place in tanks or in cage systems; the latter technique is used in Montenegro. While cages can be of different designs they work on the same principle with the natural exchange of water through the pens. The quality of a site for on-growing depends on local conditions such as tide and current. In Montenegro, cages are circular and made of plastic.

Most farms report interest in widening the area of their present facility. While on the face of it this would not appear to be rational in the context of low use of actual capacity, this issue is likely related to the seasonality of market demand (tourists) and the wish to increase production in those peak months.


Some data on the costs and earnings of mussel farms were provided by the survey respondents; however the information is of variable quality and only allows broad conclusions to be reached.

The total investment in dedicated mussel farms is €570,000, or an average of €52,000 per ha and €47,500 per farm. Indicative average annual earnings are €17,000 (variation between €6,000 and €41,000) compared to operating costs of €10,400. In the survey, three respondents reported that the farm was their only source of income. The major cost was wages (56 %), followed by repairs and maintenance (14 %) and transport (11 %).

In 2010, feed and juveniles (including transport from Italy) were the major operating costs (64% and 29% respectively) for sea bass and sea bream. Other costs are marketing and delivery (4%) and labour (2%). The low level of production and high unit costs restrict market potential in the face of the competition from Greece and Turkey, especially given the nature of the national market. If investment capital was available the private sector could consider diversification to open sea mariculture and


other species,1 however this is expensive and there are many issues concerning the development of farming of new species.


Respondents to the survey identified a number of issues. They point to the environmental conditions and high product quality as strengths. Weaknesses include inadequate equipment, predation (by sea bream) on mussel seeds reducing productivity, poor marketing, an ineffective association and limited space for growth in existing locations. There is a strong opportunity for greater involvement if the public sector, including administrators and inspectors, and for the expansion of the species and product range. Identified threats include the discharge of waste from cruise ships with the Bay of Kotor and illegal imports of mussels from Croatia, in addition to lower sales due to the weak economy. They anticipate the need for public sector input in strengthening regulations and their subsequent enforcement, providing financial assistance, technical assistance and support in strengthening the association.

While the area allocated to mussel farming in the Bay of Kotor is considered sufficient to significantly increase production, individuals lack the capital. Moreover, interest in expansion is largely limited to expanding the production area in the existing locations rather than developing new sites that have a higher investment cost or introducing improved techniques designed to increase productivity per hectare.

While mussels are usually consumed in the cooked form, so reducing the risk of bacteria affecting consumer health, other shellfish, such as oysters and some types of clam, are consumed fresh. There is a need to establish and apply norms to regulate the quality and safety of bivalve molluscs and provide the facilities to purify the production of all bi-valves and reduce the potential for food poisoning; an event that if leading to a fatality could prove catastrophic for the tourist industry. Since 2008, with the aid of MARD financial assistance amounting to about €140,000, a depurification unit has been in construction and is now close to completion. It will be important that restaurants offering bi-valves for sale are required to only buy product that has been treated or has been produced in Category A water. This will require cooperative action by the Association and rigorous control by the authorities. The operation of unlicensed mussel farms must be stopped.

However, it is important to note that marine bio-toxins are not eliminated by depurification and a competent authority must realise controls to prevent harvests when toxic phyto-planktons is present in production areas.

The costs of purification will add to the uncompetitive position of the small producers, implying the need to increase production and reduce unit costs; in turn this would require market development. To a certain extent this is a vicious circle – limited and seasonal market demand reduces capacity utilisation and increases the unit cost of production, increasing sales price and limiting market potential.

Low capacity utilisation results in high unit production costs and the price of the mussels is too high to compete in export markets or to be used as a raw material for added value processing e.g. frozen, canned and smoked product. It is interesting to note that while frozen product is available in

1 Possibilities would include Red porgy (Pagrus pagrus), Sharpsnout sea bream (Puntazzo puntazzo), Red pandora (Pagellus erythrinus), White sea bream (Diplodus sargus), Sole (Solea solea, Solea senegalensis), Mullet (Mugil cephalus), Common dentex (Dentex dentex) and Brown meagre (Sciaena umbra).


Montenegrin supermarkets and frozen mussels are used as an ingredient is such as seafood pizzas and pasta, this product is imported. In addition, lack of price competitiveness leads to the reported illegal import of mussels from Croatia.

In 2008, the EU CARDS project looked to improve productivity per m² of operations or by m of cord by reviewing the potential to apply methods used in Galicia. This would increase benefits from the water column, with higher production at a profitable level encouraging new investment while higher production per m² would allow for the mechanization of the process. As far as can be ascertained, the results of two pilot projects are not known and there has been no new investment.

Clearly, if mussel production and the range of species produce by farms are to increase, considerable emphasis has to be placed on marketing to ensure that the output can be sold profitably throughout the year. Only then will investment in farms increase with production growing from current levels to those believed attainable in the area available for cultivation.

Improved training and information with stronger awareness on the part of the sector, both individually and as a whole, are basic to the creation of a strong, organized and competitive domestic mussel growing activity. The strengthening of the sectoral organization, which represents its members and informs them of, for example, new legislation will help to achieve these aims. Also important is to present a strong, common voice to public institutions in order to ensure that the interests of the members are well presented.

4 THE FISH PROCESSING SECTOR 4.1 Overview

In line with Commission Recommendation 2003/361/EC1 that defines small and medium scale enterprises in the Montenegrin fish processing sector there is one small enterprise (Ribartsvo) and three micro enterprises (Ahileas, Montefish, Montepesca, Rozafa and Cogi) (table 12). None of the companies provided financial data.

Table 12: Montenegro: Fish Processors

Name of firm Address Name of owner Type of processingRijeka Crnojevica Rijeka Crnojevića Petar Ražnatovic Canning & Smoked

Ahilies Golubovci b.b Ljuba SmokedMontefish Trg magnolija Tivat Dejan Krstović Fillets and repackaging

Montepesca Luka Bar Danilo Lakić Frozen fishRozafa Luka Bar Ljubo Djokaj MarinatedCogi Kotor Repackaging

It is understood that Rozafa is not working.

1 The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewerthan 250 persons and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million. Within the SME category, a small enterprise is defined as an enterprise which employs fewer than 50 persons and whose annual turnover and/or annual balance sheet total does not exceed EUR 10 million. Within the SME category, a microenterprise is defined as an enterprise which employs fewer than 10 persons and whose annual turnover and/or annual balance sheet total does not exceed EUR 2 million.


Note that the distinction between importers, wholesalers and processors is hazy as some enterprises may freeze products, while others repack bulk shipments into packs for retail or use in restaurants, mostly usually mixed packs of shellfish as an ingredient for pasta dishes or pizza.

A large part of processed fish (frozen, value added, canned and pastes) on sale throughout Montenegro is imported after value has been added in an intermediary importing country, most usually in the Balkans.

4.2 Structure

Ribartsvo is a canning factory established at the northern edge of Skadar Lake, in Rijeka Crnojevica, with a fishing concession for bleak in Lake Skadar. Its annual input from the Lake used to be well in excess of 1,000 mt but this has now substantially reduced to about 100 mt. The company fishes bleak from three points on the Lake (with set nets that catch the fish which is then pumped into carrying vessels); in former times it had up to 18 fishing points. Also, the company has a trout farm. The investment value of the company is €3.7 million.

On the basis of 208 working days per year with one shift and a daily capacity of 32,000 to 40,000 cans (dependent on the need to prepare raw material), annual production capacity is 7.8 million to 11.8 million cans. This could be increased with a second shift of workers. Potential production is based on canned smoked lake fish (950,000 cans), with the remainder composed of imported fish such as sardine, mackerel and tuna. There is interest in developing a carp farm.

As current production is limited to canned smoked lake fish (carp and bleak) and trout, capacity utilisation is low and this affects the financial performance of the enterprise.

Ribartsvo identifies the following issues:

The need to increase domestic production of small pelagic species such as sardine, mackerel and anchovy to make full use of potential production possibilities from Montenegrin waters.

The need to assess Lake Skadar resources to determine the status of the stocks and introduce fisheries management planning to achieve recovery towards a maximum sustainable yield that would allow the factory to annually source 300 mt – 400 mt of bleak, carp and other fish.

Make better use of installed capacity with target production of 13 million cans, increasing competitiveness and reducing the sales price. About 10 % of this production would be for the national market with the remainder exported.

Extension of the product range to: pates of different marine and lake species; salting and marinating of anchovy; and vacuum packing of smoked lake fish.

To achieve these targets the company would require financial assistance to provide working capital.

Ahileas is a recently established carp and trout smoking facility near Podgorica that is well designed and meets HACCP standards. Total investment is about €500,000. Due to costs, trout is imported from Bosnia where the farm gate price is about two-thirds of that in Montenegro. The main issue is to increase capacity utilisation to reduce unit costs and make the final product more price competitive in the market; down from the €8 per kg for trout and €7.20 per kg for carp. Sales are made through a number of national retail outlets while exports are planned to Russia. A limiting factor is the size of the local market. There are prospects of expanding the product line to produce smoked salmon from imported whole fish.


Montefish in Tivat repacks some of the seafood it imports (total 70 mt – 100 mt per year) and processes some locally caught fish. The company has a modern high standard retail outlet to international standards. Investment to date is about €350,000. The company’s premises are too small for a viable fish processing operation, but it does have plans for a new facility close to Tivat airport that would allow for value added production. The estimated investment cost is about €1 million. The main issues facing the company are lack of capital, the poor quality of local fish, lack of continuity of supply and limited quantities.

Cogi near Kotor is a horizontally and vertically integrated company with fish farming, fish importing, repacking and retail outlets not only in its own premises but also in the green market in Kotor and in-store of a major supermarket in Podgorica.

Other companies that are contemplating investment in cold storage or packing facilities are Mesopromat, Bonesa, Legisystem and Pima.

Given lack of supply, employment in the sector is small. A fully operating Ribartsvo could provide full time employment to more than a 100 people, mainly females from Podgorica and Cetinje. It is estimated that current employment in processing is less than 20.

4.3 Important Constraints and Areas for Interventions

The major issue is supply and the first hand sales price off fish. If the fishery sector in Montenegro is to develop with the creation of on-shore income and employment based on locally supplied raw material, the local supply industry, whether from catch or farming, must become more price competitive and seafood has to be available continuously and be of a consistent quality. In the two processing establishments with the most investment, actual capacity utilisation is low and this reduces market competitiveness.

Another major factor is the small size of the domestic market. To benefit from economies of scale, processing companies have to target export markets and this means they must compete with producers in neighbouring countries. In turn, this requires modern production facilities that meet the exacting quality standards of importers in other countries.

While Montenegro is a small country and despite the limitations imposed on the foodstuffs budget due to low household incomes allied with low per capita consumption of fish, as shown by trade data there is a meaningful demand for fish with a range of value added frozen and canned fish. To a large part these products are manufactured in third countries using raw material imported from a range of catching countries. This presents an opportunity for investment in Montenegro and could provide the basis for capacity utilisation that would contribute to international competitiveness. Under the right conditions, frozen fish could be imported from producing countries as raw material for value added production. The strategic approach would be to add to the competitiveness of existing companies with interest in new investment, rather than attract new entrants into the sector.

5 GOVERNMENT POLICY 5.1 Overview

In the past six years, two policy documents1 prepared by EU projects have been adopted by the Government of Montenegro.

1 MAFWM 2006 “ National Fisheries Strategy”; MAFWM 2008 “ Development of the National Fisheries Sector 2009 – 13”


In the foreword to the 2006 document, the Minister wrote:

Fisheries are of particular importance for economic development of coastal countries including Montenegro, which has valuable but under-utilized resources in the sector.

It is necessary to establish and enforce the principles of responsible fisheries and fishing efforts, taking care of all important aspects: biological, ecological, technological, economic and social.

Illegal and unregulated fishing, jeopardizing the efficient enforcement of measures in management and protection of fish resources, must be controlled.

The resources require proper management. The biodiversity and integrity of marine ecosystems must be protected. Montenegro needs to harmonize and improve its legislation, and improve the monitoring system

through collecting of data in compliance with international standards. Administrative capacities must be strengthened. There should be a focus on improvement of the product traceability and quality and consumer

protection with strong food safety legislation as well as upgrading of laboratory facilities for analyses.

An important objective is to establish an investment environment favourable for renewal of the national fishing fleet.

Research and scientific assessment of fish stocks needs to be improved.

As pointed out in the 2008 document, the previously prepared Strategy focussed on Montenegro meeting EU requirements in terms of the acquis communataire rather than being a policy document that incorporated, but was not restricted to, elements related to possible future EU accession.

The 2008 document presented a comprehensive analysis of the situation in the fisheries sector and identified potential areas for development. However, it only covered the first two parts of a three-step process. It defined a National Fisheries Policy (NFP) and the related National Strategic Plan (NSP). However, it lacked the final step which was a National Operating Plan (NOP) that would identify application procedures, projects, costs and possible sources of finance with a prioritised approach to required actions by axes. At the time it was acknowledged that it was difficult to develop an operational plan as there was no funding available to finance the estimated cost of €17 million (excluding funds for the construction of dedicated fishing landing facilities in Bar and Herceg Novi).

In 2008, MAFWM made a small amount of funds available to finance small projects for stakeholders, and each year since there has been a small budget.

5.2 Government Financial Assistance

Historically, limited financial support has been provided to the fish catching sector with a fuel subsidy available for 20 boats, each with an allowance of €0.27 for 20,000 litres. As none of the fishing vessels licensed in 2009 and 2010 this scheme was discontinued. No assistance was provided to the small boat fleet. If the aim is to maximise the economic benefit from fisheries, economic theory indicates that fuel subsidies are inefficient as they lead to a higher level of effort while they reduce the incentive to invest in more fuel efficient investments (new engines) and fishing methods that use less fuel (i.e. static gear as opposed to mobile gear).

From 2008, the Ministry provided financial assistance to help sector development, while at the same time proving the approach for project identification, design, monitoring and evaluation. In the first year, three projects were assisted with varying degrees of success.


In Bar, assistance was provided to the fisheries association to refrigerate the holds of a number of vessels and to build a small cold store and ice maker. This project was fully implemented although the results have not been evaluated.

In the Bay of Kotor, assistance was provided to the mussel association to construct a depurification unit. Further amounts were provided in 2009 and 2010 but the project is incomplete although new Government assistance in 2011 will allow it to be finished. However, regulations are not in place to require bi-valves offered for sale are purified,

In Herceg Novi assistance was provided to the fisheries association for a refrigerated van and a chill store. The van was purchased and is in use, although its help to the intended beneficiaries has not been evaluated. It is understood that while the cold store was purchased it has not been constructed.

The 2011 MARD budget provides assistance for the fish catching fleet with the objective of aiding its modernisation over a period of 5 years. Potential beneficiaries are owners of commercial fishing vessels > 15 m<24 m, fitting with the concept of improving the autonomy to fish in deeper waters and relieve the perceived pressure on stocks within Montenegrin national waters. The proposed terms were 50 % of eligible costs per vessel up to a maximum of €75,000 per boat with a budget of €150,000. However, due to budgetary constraints the total budget is €80,000.

The assessment above highlights two areas of concern. Firstly, the capacity of MARD to effectively monitor and evaluate projects and ensure that beneficiaries meet with financing conditions. Secondly, low levels of financial assistance are unlikely to be a driver for the required developments.

5.3 Fishing Strategy: 2009 - 2013

5.3.1 Marine Fisheries

The vision for marine fisheries was a modern and profitable fish catching sector harvesting resources on a sustainable basis to land top quality fish for direct consumption, export and value added processing. Projects would be based on rigorous resource assessments, effective fisheries management and financial support for investment in new vessels in the context of sustainable use of available national resources. This would result in the harvesting of deeper waters, reduced pressure on inshore stocks, continuity of supply in the domestic market and higher fisher incomes.

Modernisation of vessels that would not be replaced by more powerful boats would be aimed at making them more competitive by lowering repair and maintenance costs and improving fuel efficiency, product hygiene and working conditions and safety.

Given the uncertainties of the pelagic resource, allied with a short season and the GFCM policy of not adding to catching capacity for small pelagics in the Adriatic, it was proposed that the best approach to increase Montenegro’s benefit from these resources would be to encourage joint ventures with catches landed into Montenegro and creating jobs on-shore.

Over recent years it has become clear that the small boat fleet makes a valuable contribution to local economies, providing employment and income while maximising the value of the catch by supplying high quality product to restaurants. In 2008, the strategy focussed on the protection of resources harvested by these vessels, with strict enforcement of the fishing zones excluding larger vessels from within the 3 nm limit. Also identified was the need to strictly differentiate between small scale commercial fishing boats and licenses for recreational fishermen that have been taken out by fishermen catching to provide an income due to their lower cost.


The 2008 report listed a number of expected results of the strategy to be achieved by 2013.

Although work is still required, with the support of the IPA project (2010 – 2012), it is expected that in 2011 an assessment of the fish resource available to the Montenegrin fleet will be sufficient to form a basis for a fisheries management plan. However, target and limit reference points needed to implement and guide management strategy are likely to be based on effort (e.g. number of boats, number of fishing days) rather than stock biomasses.

With the expected inauguration of the National Marine Fisheries and Mariculture Council (NMFMC) in late 2011 the membership of commercial fishermen will provide a formal basis for stakeholder input into the fisheries management process. This includes inputs into a draft FMP to be prepared by early 2012.

While there is a delay in the supply of equipment to support effective and efficient MCS of fishing activity in Montenegrin waters, this should be fully implemented by mid-2012. It is planned to have VMS on all vessels > 12 m and an effective log book system, supported by a trained and equipped fishery inspectorate and the coast guard, complete with a fishery monitoring centre.

Due to lack of finance, Montenegrin vessels have not been modernised. It is reported that there has been interest by foreign vessels to reflag and fish off Montenegro.

5.4 Fishing Areas

Connected to the fish catching sector is the concept of cluster development at a selected location or locations to increase the economic benefits from the harvesting sector while reducing fishing costs. MAFWM policy was to support cluster developments at two locations – Bar and Herceg Novi - to provide the fishing fleet with dedicated landing and berthing facilities at low user costs, with additional support for fishery related businesses in the cluster - up-stream (e.g. vessel repair, gear, ice and electronics) and down-stream (marketing, processing and distribution). At the same time as improving the competiveness of the catching sector, this approach would increase on-shore income and employment while supporting efficient administration of the sector including the implementation of EU market regulations for larger vessels.

The strategy recognised that given the high cost of capital investment it was unlikely that much progress would be made by 2013. It was anticipated, however, that outline plans would be developed for the location and design of the two fishing harbours with pro forma costs for submission to interested financing agencies.

At the moment there are proposals for a specific landing place in Bar but the options have not been fully assessed, while the Fisherman’s Association in Herceg Novi is reported to have developed basic plans and received outline permission for development.

5.5 Freshwater Fisheries

The vision for Lake Skadar fisheries was that the annual commercial harvest of fish be based on a thorough understanding of its long term productive capacity. This would require research to assess the sustainable level of catch by species and an FMP for the Lake that would be developed in cooperation with Albania. In the meantime, fishery management on the Lake would be based on the precautionary principal. As in marine fisheries, all vessels fishing on a commercial basis would be licensed with the


product traceable back to capture. Improvements in fish handling would be needed to guarantee quality and food standards.

It appears that no consideration has been given to the recommendation of successive EU projects that IMB take responsibility for the stock assessments, thus maximising the benefits of the investments made to strengthen that institution. This recommendation does not imply that existing freshwater specialists based elsewhere in the University of Montenegro would be replaced, rather they work under the aegis of IMB. In this way, the country would make best use of the limited financial resources available for fisheries research.

As previously mentioned, the World Bank Global Environment Facility is looking to improve fishery management on the lake. It is understood that there has been no progress in implementing the three projects. If that is the case, it is unlikely that the expected results (a resource assessment and an FMP) will be delivered by 2013.

There is no indication that there are any plans for restocking the Lake as included in the strategy. Improved enforcement is part of the activities of the EU IPA project.

5.6 Recreational Fisheries

The 2008 document’s vision for recreational fishing centred on a strategic approach to attract international tourists and provide for the leisure activities of Montenegrins with the fishing of autochthonous species. It was emphasised that recreational activities must respect the licensed activities of commercial fishers and not compete in the market. It was also recognised that recreational fisheries account for a significant proportion of the catch in marine and fresh waters.

Ministry budget is available to support the Faculty of Mathematics and Science at the University of Podgorica to develop a fishery master plan, and recreational fishing clubs to restock and improved enforcement.

Financial assistance has not, however, been directed to support infrastructure with identified investment supportable under the Ministry financial aid programme.

In marine fisheries, assistance has not been provided to convert existing fishing vessels to support recreational fisheries. Fishery regulations have not been implemented on bag limits, catch-and-return and a prohibition on the sale of retained fish in the recreational fishery.

While the Fisheries Law (2009) did not provide for formal representation of the recreational sector on the NMFMC it is contemplated that they will be involved with participation in sub-committees.

5.7 Aquaculture

The vision for aquaculture was a technologically modern and environmentally friendly fish farming sector, in both fresh and salt water, with new developments based on the farming of autochthonous species. The objective was for total annual freshwater production of 1,000 mt to supply the domestic market, export to neighbouring countries and provide raw material for added value production. Success in this area depended on the availability of finance, the extension of cage culture, renewed brood stock, better production planning, a more efficient FCR, continuous availability of water at raceway sites, improved environmental protection measures with all new investments requiring an environmental impact analysis, a training programme and added value production.


To improve marketing and food safety, it was proposed that trout, similar to other fish and fish products, be fully traceable. Trout producers needed to implement codes of practice to improve food safety and fully document source of fish fry, feed and the use of medicines.

A key part of the policy was to improve market competitiveness by reducing the cost of production to a level which approximates to that in neighbouring countries. While the scale of production affects unit costs, other issues are reduced mortality, shorter production times and improved FCR.

Finally support was to be provided to extending the species range with particular interest in the potential for Arctic Char.

Little appears to have been done to implement this strategy. The monitoring programme (water quality, medicines, feed and the distribution chain) has not been improved. The income of fish farmers has not been augmented by the extension of their activities into tourism.

Financial support will be needed to implement other elements of the strategy: reduced unit costs, water treatment, modernisation of farms and increase in production.

5.8 Mariculture

A key factor for mariculture development is spatial planning in Kotor Bay, with the definition of areas set-aside for mariculture. Another is the licensing of all growing facilities and the implementation of all regulations.

The stated aim was to increase annual mussel production to 2,500 mt, and to reduce unit costs and improve competitiveness. It was planned to designate 50 hectares within the Boka Kotor Bay for mussel growing, with licenses in one hectare lots. Preference would be given to existing licensed mussel growers and new entrants with annual production greater than 10mt. Increased competitiveness would result from lower transaction costs (e.g. by simplifying the licensing structure), technical assistance to increase productivity, and support for the Association. The Ministry looked to strengthen the Association while improving food safety by providing financial assistance to construct the depurification centre. But this is not yet working and the indications are that the Association remains weak. Traceability, to restrict sales by unlicensed farms, has not been introduced.

There has been no promotion of mussels in the domestic market.

Given the costs of producing sea bass and sea bream in Montenegro which lacks critical mass to benefit from economies of scale, and the size of competing Greek and Turkish industries, the potential for growth was considered limited. This led to the conclusion that producers should look to reduce their costs and sales price while concentrating on the domestic markets with the freshness of local production commanding a premium price. Identified priorities were to reduce FCR to the level achieved in other producing countries (2:1), to increase labour productivity to between 18 mt and 19 mt per full time employee, reduce mortality and shorten the grow out period to 15 months.

5.9 Fish Marketing & Processing

The strategy was to increase annual per capita consumption to 8 kg. This would imply total market supply of about 5,000 mt plus the amount consumed by tourists – a potential total of 7,000 mt to 8,000 mt. The market would be supported by a modern post-harvest sector with the required infrastructure (cold chain, chill chain and processing facilities).


A major focus of the strategy was to enable exports of Montenegrin fish and fish products by ensuring that their sanitary and health condition is in accordance with EU and international market requirements.

To maximise the benefit of the fishing sector to the national economy, it was recognised that on-shore activity should develop, with the main opportunity identified being the manufacture of value added products, in part resulting from the competitiveness of Montenegro’s relatively low wages.

Quality issues figured in the strategy, with improved product freshness with investment in ice machines (on-board vessels, at landing places, on fish farms and in markets), refrigerated transport and modern retail outlets including specialist stalls in green markets.

Little progress has been made in meeting these strategic objectives. Fish has not been promoted, the food safety regulations are not enforced, and there is not a fully developed chill chain from catch through to consumption, mainly because of the lack of facilities in the catching sector. There is a new retail market in Podgorica (part of an overall recent development), while most of the larger supermarkets opened in recent years have a fresh fish counter. There is more value added production and considerable private sector interest in expanding the possibilities.

5.10 Producer Organisations

The 2009–13 strategy foresaw the development of financially viable national and local representative organisations for fishery sector stakeholders to allow full implementation of EU regulations, provide the basis for a public – private partnership and reduce the cost to the public sector in implementing management measures. The Ministry would provide financial support, with the focus being on the creation of a single PO to reflect the size of the country and reduce the overhead costs of membership.

To-date no progress has been made in establishing a PO and there is no national enabling regulation. A recent report1 by the IPA project found that “providing price support intervention, market stabilisation, and co-management of fishery resources were the main rationales for establishing POs in other countries. Evidence collected suggests that there is no demand from the fishery sector in Montenegro to stabilise market prices either through direct price intervention or through the matching of supply to demand. The study finds that due to the absence of a quota (or effort) management regime in Montenegro, currently there is no role for a potential PO to play in the co-management of fisheries. The study also finds that the representational role of the existing fishery associations would not be enhanced through the formation of a PO”. As matters now stand it is unlikely that there will be a functioning PO by 2013.

5.11 Environment

The 2009 strategy emphasised the importance for any development to take into account their potential impact on the environment. It was proposed that all investments in the fish sector should include an EIA, with those related to investments > €100,000 to be completed by an approved environmental expert. The Ministry would only provide licenses for the operation of aquaculture and mariculture facilities that meet environmental and other regulations.

1 Assessing the Potential to Develop a Producer Organisation (PO) within the Montenegrin Fish Catching and Aquaculture sectors.


5.12 Governance

The 2008 strategy emphasised the need for a public sector with the capacity to enable, administer and monitor activities in the private sector through legislation, government departments, laboratories, fisheries research and enforcement.

The legal framework (laws and regulations) would provide the basis for sustainable marine and freshwater, capture and farming, fisheries while applying EU and international standards. However, since the passing of the Fisheries Law in 2009 there has been continued delay in bringing in the necessary secondary legislation and at the moment about 39 regulations remain to be promulgated after the passing of an initial 10 in early 2011. The lack of regulations makes it difficult to effectively manage the sector and implement any strategy.

Institutional weakness is visible at most levels, with lack of human and financial resources affecting the performance of the administrators, fish inspectors and IMB. In the recent World Bank MIDAS project inspired restructuring of MARD, the Fisheries Directorate identified in the 2008 document was not created; indeed the organisation of the fishery related public sector offices was potentially made more complicated by the separation of functions between different divisions, complicating the chain of responsibility and effective decision taking with related man management. Further, it now appears that the fisheries inspectorate will be taken from the Ministry and incorporated into a General Inspectorate. It is not clear what work was completed in the Ministry in the two-year period between the closing of the EU CARDS project and the start of the EU IPA project. As examples, contrary to the specific areas of administrative activity defined in the 2008 document, no vessels were licensed, the Fishery Information System was not populated and regulations requiring the provision of certain data had not been enacted, fishery regulations had not been implemented, the small projects financed by the Ministry had not been adequately monitored and the fisheries inspectorate continued to be ineffective in enforcing regulations. In short, there appears to have been little consideration of the need to develop and implement policy. Instead emphasis appears to have been place on reacting to issues rather than proactively developing management of the sector. Similarly, there appears to have been no change in the working of the IMB, to large part due to continued lack of adequate finance. Improvements to the IMB buildings and equipment to be financed by the World Bank and the EU have yet to be started; and equipment to be supplied under the IPA project is unlikely to be delivered before April 2012. The situation is similar for equipment needed to strengthen enforcement capacity and the collection of data.

5.13 Food Safety

The 2008 strategy recognises the importance of food safety issues while that for 2006 presented a detailed analysis of the steps that would need to be taken to meet the acquis communautaire. A large part of the resources of both previous EU projects were dedicated to food safety issues including HACCP and the strengthening of the capacity of veterinary and other laboratories in diagnostics and monitoring. IMB is the competent authority for water quality, but its work programme has been affected because they do not have a boat; it is proposed to provide one under the EU IPA supply contract. There has been no activity related to improved microbiological monitoring by industry and regulators, the monitoring of bivalves for the presence of algal bio-toxins, improved capacity to detect and diagnose fish disease, the provision of advanced fish disease diagnosis facilities, notably molecular biological techniques to identification and serotyping of viruses and bacteria, the designation of official veterinarians to control establishments, food inspectors controlling the safety of foodstuffs in the market, the ability to undertake microbiological and chemical analysis of fish and


fish products, a comprehensive residue control programme and surveillance and monitoring programmes. The concept was food operators to ensure food safety with the Veterinary Inspectorate adapting its role of auditing and advising on food safety rather than carrying out direct checks.

5.14 Stakeholder Participation

The 2008 document identified a cornerstone of the long term development strategy as the formation of a public sector private sector partnership. This includes fisheries ‘co-management’ between government, local resource users (fishers), and other fisheries and coastal resource stakeholders (NGOs, boat owners, fish traders, tourism establishments, etc.). The vehicle for this was a Fishery Management Council (FMC), supported by advisory groups, comprising members with appropriate backgrounds and expertise. A complementary approach was the organisation of fishers into representative groups (e.g. POs).

The process is underway to form the National Marine Fishery and Mariculture Council allowed for by the Fisheries Law (2009). In retrospect it would have been better to develop a National Fisheries Council, but this would be difficult given the division in management and responsibilities between marine and fresh water fisheries.

6 THE MARKET FOR FISH AND FISH PRODUCTS 6.1 Supplies

6.1.1 Domestic Supplies

Given uncertainty about the reliability of the data it is difficult to put a figure on the total supply of fish from the various catching and farming operations. A guestimate is 1,680 mt (marine commercial 600 mt; recreational: 300 mt; trout farming 600 mt; mussels 110 mt and sea bass / sea bream 70 mt).

6.1.2 International Trade

Trade Balance: 2007 - 10

As shown in table 13 Montenegro has a substantial deficit trade balance in fish and fish products, averaging over 3,000 mt per year valued at €9 million in the period 2007 to 2010. In 2010, total imports were 3,122 mt (product weight) and have been more or less stable over recent years, presumably due to the prevailing economic conditions that have affected tourist numbers while restricting household expenditures.

Exports: 2009

In 2010, only 13 items were exported by Montenegro (table 14). While the amounts are not large, care must be taken in the interpretation of the data as some may be re-exports of previously imported product.

Table 13: Montenegro: International Trade in Fish and Fish Products 2007 - 10


Table 14: Montenegro: Exports of Fish & Fish Products 2009


Table 15: Montenegro: Imports of Fish & Fish Products 2009


Imports: 2009

In weight terms the most significant import items were frozen whole fish with the main species being sardine (372 mt) and hake (359 mt), frozen fillets (with hake (188 mt) the most important species), molluscs (with the major item being frozen squid (354 mt)) and canned tuna (607 mt) and canned sardine (213 mt) (table 15). Detailed trade data shows that a wide range of species and product presentations are imported.

Conclusions to be drawn from this data are:

While there are exceptions, it is largely a low value market with hake, the most popular species, having an average CIF price of €1.42 / kg whole and €2.19 /kg for filleted. This reflects the perception that frozen fish for consumption by Montenegrins has a maximum retail pricing point of about €5 / kg.

The import of small pelagics such as sardines and mackerel shows that there is a domestic market for oily fish and this could be targeted by the national fleet if it could catch these types of fish and there was the on-shore infrastructure to handle these types of landing.

There is a large amount of live trout imported but it is not known if this is for consumption or to supply farms with fingerlings.

While the data does not indicate the country of origin, observation shows that significant quantities of fish on sale in the Montenegrin market are produced in other Balkan countries that add value to bulk frozen product imported from such countries as Argentine and Vietnam. This is a potential business opportunity in Montenegro, with fish imported directly from the producing country for secondary processing.

It is understood that Ribartsvo assessed the potential to import frozen sardines for local canning that would make better use of the installed capacity.

6.1.3 Total Supplies

On the basis of the above figures, the net supply (product weight) of fish and fish products to the Montenegrin market is estimated at about 4,680 mt.

6.2 Consumption

6.2.1 Per capita Consumption

In 2009, the European average per capita annual seafood consumption was 23.5kg (live weight equivalent).

FAO1 reports that in the period 2004–2006 the apparent consumption of aquatic products in Montenegro was 9,888 mt with a yearly average of 3,296 mt, implying average per capita consumption of fish and fish product of 3.75kg. Average annual imports in the same three year period were 1,660 mt, while exports averaged 153 mt.

A more realistic estimate of national per capita consumption should take into account all sources of supply and demand from tourists.

1 http://www.fao.org/fishery/countrysector/naso_montenegro/en


The most recent data available indicates a net annual supply to the Montenegrin market of about 4,680 mt (product weight), implying annual per caput consumption of about 7.4 kg (product weight). While data on consumption by tourists is not available, if one considers a scenario that on average each one has two fish meals during a stay (a reasonable assumption given that 95 % of international tourists are to the coast) and the average serving is 300 g. product weight, annual consumption by tourists is about 720 mt.

Under this scenario, annual per capita consumption in Montenegro is 6.3 kg. This is higher than previous estimates as it takes into account the catch from recreational fisheries.

6.2.2 Consumer Preferences & Seasonality

Generally speaking, Montenegrins prefer meat, particularly lamb and beef although a lot of cured pork is also consumed. The main factors dictating consumer demand for fish are price and familiarity with how to prepare and cook it. While restaurants serve a wide variety of high priced fish dishes, and the fish counters in the large modern supermarkets have a range of fresh fish on display, by-and-large domestic consumer demand reflects the economic reality of low disposable incomes.

Given the lack of a fish eating tradition, it seems that many housewives are not familiar with how to prepare and cook fish and this increases the preference for frozen fillets and a range of value added dishes. The retail outlet in Pljevlja reported that the majority of his customers bought cooked fish.

6.2.3 Seasonality

All importers of marine fish supply the tourist trade and report monthly demand between June and September being up to four times higher that between October and May.

6.2.4 Regional Variations

As may be expected fish consumption is higher on the coast where historically there has been ease of access to marine species. It is anticipated that Montenegrins who live away from the coast consume fish on vacation and weekend visits. Consumption is also affected by availability. Apart from trout, access to fresh fish is limited to none existent in many inland areas with the market dependent on frozen and canned product. In addition, there are less hotels and restaurants in the interior except at tourist centres. Distribution to inland urban centres adds to the cost of fresh product in a price sensitive market.

Although supporting data is not available it is highly likely that coastal residents consume significantly more fish than those from the interior.

6.3 Distribution


Commercial Fleet

There is little or no value added to seafood landings. There is no auction or organised fish selling facilities. The main market segments are: fresh sales to restaurants; fish stalls in the green markets located on the coast and in some cities; and directly to consumers. Part is sold to wholesalers for subsequent retail sale. This summary is supported by the survey findings. The most prevalent strategy of commercial vessels is to sell through one or several fresh fish markets, although individual boats sell 30% to 80% of their landings to hotels and restaurants. About half of the vessel owners negotiate an annual contract price with buyers, the rest negotiate daily to adjust price according to demand.


In the past some exports of fresh fish have been made to Italy using the ferry from Bar to Bari, but this trade is intermittent. In addition, given EC Regulation No 1005/2008 on illegal, unreported and unregulated (IUU) fishing that came into force on 1 January, 2010 it is difficult to see how Montenegro can export fish to a European member state when there is no product traceability, no log books and, until mid-2011, no vessel licensing.

Small Boat Fleet

In common with the commercial fleet, and as confirmed by the survey, the distribution chain is short with the main outlets for the catch of small boats, apart from own consumption, being sales to green markets (80 %) and restaurants and direct to consumers (20 %). Small-scale vessel owners lament the lack of formal selling facilities that would provide hygienic, refrigerated and safe fish storage. They are also concerned about the market influence from unfair price competition from larger vessels, sales by recreational anglers, illegal fishing and “undocumented” imports.

6.3.2 Lake

It is thought that about 80 % of the Lake catch is sold on the informal market. Carp is usually sold live in green markets or along the side of the road. Bleak is canned; in addition there is a good demand for smoked bleak but the survey only identified Ribarstvo as a producer.

Investment in market infrastructure is a bare minimum. Fishermen lack formally organised fish sales and facilities to store fish and reduce market risk e.g. chill stores and market stalls.

6.3.3 Recreational

No data is available on the quantity of fish sold by the recreational sector or on the channels of distribution. Recreational fishermen may sell some or all of their catch to restaurants and consumers, while a certain amount will be for home consumption. It is reported that some commercial fishermen take out a recreational license rather than a commercial one that is more expensive.

6.3.4 Aquaculture

Survey results show that the main markets for trout are retail shops (33 % with an average sales value of €3.79 / kg); direct to consumers (30 % and €4.10 / kg); wholesalers (25 % and €3.59 / kg) and restaurants (12 % and €4.06 / kg). None of the farms add value to the product and only two in the survey reported ownership of chill rooms and refrigerated transport. Only one company had vertical integration with a retail shop. There are no exports.

6.3.5 Mariculture

As reported by survey respondents, 41 % of sales are made to wholesalers, 28 % directly to consumers, 22 % to restaurants and the remainder to retail outlets. All product is sold fresh; only three companies reported ownership of equipment to maintain the chill chain (ice maker, chill cabinets and refrigerated transport). One company exports limited quantities of mussels to Serbia.

6.3.6 Imports

No information is available on all the companies involved in the trade of fish products, or the quantities involved. It is sure that the import sector is competitive and in recent years long standing companies have been confronted with new entrants.


In 2009, the Veterinary Office lists 55 companies (not counting IMB) registered to import fish and shellfish, with data on location, types of products and countries of origin. Of these, 10 imported aquaculture-related products, 9 of them exclusively. Of the remaining 46 companies, two are the main processing companies described above and the rest are either wholesalers / distributors who may repack some products. A list of the main importers of fish and fish products is in table 15.

Table 16: List of Importers

Company LocationMontefish Tivat

Pima KotorIce Megan TivatLegasistem Herceg Novi

Pamex KotorOlio Prom Bar

Bonesa BarTazex Herceg Novi

Cogi Kotor

The reported sales margin of importers was reported to be about 20 %.

Not all importing companies own their own cold storage space.

The most common foreign brands for frozen fish are ESVA, Ledo, Vici and Fratello. Each brand has Montenegrin agents for distribution. One of these reported that foreign owned supermarket groups may import frozen and canned fish on their own account. Typically, independent importers each bring in between 75 mt and 250 mt of fish products per year.

6.4 Market Outlets

6.4.1 Roadside Sales

One of the main outlets for lake caught fish is informal sales by the road with live fish kept in buckets. There are also some road side sales close to Herceg Novi, with fish sold off the back of vans with the minimum of hygiene standards. One operator said that this was the only option due to the high cost of stalls.

6.4.2 Green Markets

In each town there are green markets where farmers and others sell their produce, with specific market days in the week. In Berane it was reported that fresh fish was available on Saturdays. In Podgorica, Kotor and Bar there are dedicated areas for the sale of fresh fish with a number of sellers. In Bar the meat, fish and cheese markets date from 2006 with construction financed by USAID. In Podgorica, there is a new fish market that forms part of a totally new market / commercial centre. In Kotor there are only two fish stalls, one belonging to one of the main importers / fish farmers (Cogi).

The number of sellers increases at weekends, with fishermen or their representatives selling fresh fish directly to consumers.


6.4.3 Retail Shops

Only two dedicated fish retail shops were identified in the survey; one in Herceg Novi and the other in Pljelva.

6.4.4 Supermarkets

The Montenegrin supermarket sector is in a process of rationalisation, with new investment by a number of non-local companies leading to concentration (table 16) of ownership.

Table 17: Supermarket Chains

Name Local Head Office

Maxi PodgoricaAlbona Podgorica

Novito PodgoricaMerkator Mex Podgorica

Voli PodgoricaRoda Podgorica

It is reported that there are plans for new investment by several more.1 New large scale supermarkets in Podgorica, Herceg Novi, Tivat and Bar that have dedicated fish counters with a wide range of high quality fresh fish.

One supermarket reports having grown from 4 to 22 stores over recent years. The fish buyer noted that consumers did not have the habit of buying fish in supermarkets. As the character of the retail sector continues to change so may consumer buying habits.

Some supermarkets sell fresh trout and this is usually found on the cooked meat counter. The quantities per store are low.

Away from the main urban centres, retailing in towns with up to 30,000 inhabitants is based on small supermarkets and convenience stores. These lack the consumer demand and space for dedicated fish counters, although all sell a range of frozen and canned products.

In some supermarkets, Montenegrin packed frozen product is on sale; usually hake but sometimes sardine. In contrast to imported product that is well presented in printed retail vacuum packs that contain all the required information, by-and-large Montenegrin product is of poor quality packed lose in a plastic bag with little or no information on product name, production date etc.

6.4.5 Restaurants

The survey gained limited information on the demand for fish in restaurants, mainly because the timing of the interviews (March, April) was out of season. Fish is included on the menus of many restaurants. Where available, fresh marine fish is a high priced item; at least double the price of trout, and with a premium over farmed sea bass and sea bream.

Fisheries inspectors report that they regularly find frozen sea fish and shellfish in restaurants without delivery/ sales notes. This may represent significant quantities on the coast during the summer, but was also picked up in the central (Danilovgrad) and northern (Berane) regions.1 Planning for opening in 2015 - BILLA, Kaufland, Interspar & LIDL see http://en.wikipedia.org/wiki/List_of_supermarket_chains_in_Montenegro

http://en.wikipedia.org/wiki/List_of_supermarket_chains_in_Montenegro


As supported by information from importers, the demand from restaurants declined from 2008 due to the economic crisis.

In the limited survey coverage (8 restaurants), the reported sales margins on fresh fish varied between 30 % and 120 %, which was generally higher than meat. The proportion of sales accounted for by fish varied between 10 % and 90 %. A main issue was price, price variability and continuity of supply of fresh fish.

6.5 Prices

Historically, the preference of inland consumers for meat and meat products has limited the demand for fish. In addition the spread of the inland population increases the costs of distribution, especially of fresh products.

As previously noted, low household incomes impact the Montenegrin market for fish and fish products. Many consumers do not have the disposable income to buy relatively high priced products for home consumption, nor to eat at restaurants on a regular basis. The author of this report concludes that low household incomes lead to a maximum retail pricing point for fish in the north of the country of €5 per kg. This is to compete with chicken which is retailed at about €6.25 / kg for breasts and €3.50 / kg whole. Frozen hake fillets may retail at about €3.65 / kg, while trout is usually at about €4.80 / kg. Cooked product has a price premium e.g. cooked trout at €8 / kg and cooked whole chicken at €5.00 / kg.

There is limited demand for fresh fish in restaurants unless they are located in tourist destinations.

Two findings are pivotal in any analysis of the fisheries sector. Firstly, demand from tourists sets the first hand sales price for marine fish. Secondly, imported low value frozen fish supplies domestic demand for low value protein. At the same time, the market for low cost protein highlights an opportunity if the Montenegrin fleet can increase the catch of low valued pelagic fish such as anchovy and sardine.

7 LEVEL OF ATTAINMENT OF RELEVANT EU STANDARDS 7.1 Policy on Fleet

While it is not a standard, EU policy on the fishing fleet has to be mentioned as it has a strong bearing on the possibilities of IPARD support being used to restructure and modernise the existing fleet. Presumably this would not prevent Montenegro using its own resources to achieve any fleet related objective prior to accession.

In general, the fishing fleets of EU member states are much too big compared to the available fish resources. This has led the EU introduce policies to reduce the pressure on fish stocks by limiting the overall size of the fleet as well as the amount of time different segments of the fleet can spend fishing (e.g. by limiting the number of days at sea).

The main policy is the “entry/exit scheme” under which capacity, measured in vessel tonnage, is not allowed to rise above the level of 1 January 2003 (or 1 May 2004, for countries that joined the EU on that date). As reported1 “any new capacity entering a Member State’s fleet must be matched by the withdrawal of capacity of at least the same amount. At the same time, as a general rule, capacity leaving the fleet with public aid (i.e. decommissioning schemes) cannot be replaced. This ensures that

1 http://ec.europa.eu/fisheries/documentation/publications/cfp_factsheets/fleet_en.pdf

http://ec.europa.eu/fisheries/documentation/publications/cfp_factsheets/fleet_en.pdf


the capacity reductions brought about through decommissioning programmes are definitive. However, it is permitted for Member States to rebuild 4 % of the tonnage that had been decommissioned with public aid if the increase is designed to improve on-board safety, working conditions, hygiene or product quality. Member States have to give priority to small-scale fishing vessels when applying this derogation”.

7.2 Food Safety Standards

The main food safety standards for the fishery sector are contained in three main regulations.

Regulation (EC) No 852/2004 on the hygiene of foodstuffs in all stages of production, processing and distribution. This includes the standards of moveable or temporary facilities such as mobile sales vehicles. The primary responsibility for food safety rests with food business operators (FBO) with the implementation of procedures based on HACCP principles together with the application of good hygiene practices should reinforce FBO’s responsibility.

Regulation (EC) No 853/2004 lays down specific hygiene rules for food of animal origin. It includes requirements for the production, harvesting and marketing of live bivalve molluscs such as mussels and oysters. It also covers the needs for FBOs engaged in fish processing including fishing vessels and forms of transport. The requirements for fishing boats are very specific and aimed at reducing the risk that fresh fish can be contaminated after capture and on landing at the dockside. Requirements are more comprehensive for vessels that preserve fresh fishery products for more than 24 hours. Among the specifics are the maximum temperature at which fresh fish must be stored (the melting point of ice). After capture, fish must be protected from the effects of the sun and undergo chilling as soon as possible after landing. When part processing takes place on-board, the product must be washed with potable water. The unloading of the fish must be such as to maintain product quality and avoid contamination. The fish quay must be clean and free from fumes (such as vehicle exhaust) and product must be placed as quickly as possible in a protected environment. There must be lockable facilities for the refrigerated storage of unsold fish. Animals should not have access to the areas where fish is handled. These areas must be well lit to facilitate official controls. If chilling is not possible on-board landed product must be chilled as soon as possible after landing.

Regulation (EC) No 854/2004 lays down specific rules for the organisation of official controls on products of animal origin intended for human consumption.

Commission Decision No 2006/766/EC establishes provisional lists of third country establishments from which EU Member States are authorized to import fishery products. Countries wishing to export fish to the European Union have to be mentioned on these lists and each fishing vessel needs an approval number designated by the Food and Veterinary office of DG Sanco.

The 2007 Strategy document1 found that “core EC Food Safety Regulations (852/04, 853/04 and 854/04) have not… been fully implemented to all fishery and agriculture products. Specific weaknesses also need to be removed in relation to other fishery related regulations. 2 …These also

1 ibid2 Health conditions for the production and placing on the market of fishery products (268/15), The monitoring of biotoxins in bivalve molluscs (L75/62, 2002), basic nitrogen (TVB) (L97/84, 2002), lead and cadmium (L77/14 2001), and dioxins and dioxin-like PCBs in foodstuffs (L321/45, 2004).


require support legislation to ensure that appropriate laboratory testing facilities are introduced. Institutional changes required relate, first of all, to adoption of Standard Operating Procedures. In a number of cases, where legislation exists (although not to appropriate levels which are compliant with the EU standards), industry practices are not appropriate and there is insufficient awareness within the sector of the need for self-monitoring, such as HACCP. Further education and training of the Veterinary Inspectorate is necessary. Laboratories should be upgraded to be accredited for full chemical and micro biological analysis. Support is necessary in introduction of the required changes to domestic legislation covering food safety for fishery products .. and training in HACCP in respect to satisfying quality and traceability issues for producers and processors… Despite the technical and production inefficiencies within the aquaculture sector, there is considerable potential for expansion in output, and it is not unreasonable to assume that improvements in farm practices, particularly in the mussels sector, would result in the creation of a competitive industry”.

The 2006 Strategy identified a number of key food safety issues.

In bivalve growing areas, there was a need for microbiological monitoring at least weekly complete with a system to trigger closures or reclassification of shellfish waters as soon as they are found to be out of compliance.

There was a need for regular water quality sampling to check for the presence of toxic algae. Sampling for contaminants (notably heavy metals) is also needed.

There was a need to monitor bivalves (weekly or more often) for the presence of algal bio-toxins and to take appropriate (where necessary pre-emptive) action to close or reclassify bivalve growing or holding sites.

In trout farms, HACCP systems had to be applied. There was continued use of malachite which is a prohibited substance under the EU Law.

In landing sites fish was kept whole or eviscerated, boxed in 5kg polystyrene boxes with ice, with a plastic cover between fish and ice. Vessels do not have space for a packaging room. There is limited access to ice.

Metabisulphite was applied to shrimp (no type of control is followed). Storage rooms in the vessels had poor insulation (degraded in some cases) and surfaces are not

easily cleanable. In some cases the wooden deck where fish is handled after opening of the trawl net, was in poor condition;

Chilling in some cases was deficient, with vessels not taking ice. In landing sites there were no covered area; storage facilities were only adequate in some

establishments; animals were present in the surroundings; sanitary and hand washing facilities for staff are not easily accessible; and there was no dedicated water supply for vessels.

Aquaculture products were not able to be exported to the EU market due to lack of Residue Monitoring Programme for products of animal origin (Directive 96/23/EC) and of veterinary medicines in line with the Annexes to Council Regulation 2377/90, “laying down a Community procedure for the establishment of maximum residue limits of veterinary medicinal products in foodstuffs of animal origin”. This requirement applies to “aquaculture animals” but not other fishery products.

Fish landing sites needed: a lockable facility for the inspectors; a covered area to avoid exposure of the fish to direct sunlight; lockable facilities for the refrigerated storage of fishery products detained or declared unfit for human consumption; supply of potable water or clean sea or fresh water; adequate sanitary and hand washing facilities for staff; exclusion of animals; restricted access to the areas where fish is handled or displayed; potable or clean water for washing fish.


For aquaculture and mariculture there was a need to implement a regulatory framework to ensure

compliance with EU requirements covering legislation, organization, monitoring plan, implementation measures and results for submission to the European Commission for consideration for the approval of residue monitoring plans submitted by third countries in accordance with Council Directive 96/23/EC.

For mussel culture the competent authorities needed to organize a specific operational scheme for the exports of bivalves and request approval from EU DG SANCO. This includes the designation, classification, monitoring of production areas for bivalve molluscs (e.g. mussels) with associated related controls.

Since that date little seems to have changed.

The nature of the commercial fishing vessels is such that it is difficult for the existing fleet to meet the standards required by EU (Reg) No 852/2004. While all commercial vessels have refrigerated holds and a small cold store have been introduced in Bar with Ministry support, the state of the vessels and the lack of dedicated landing facilities precludes them from meeting the overall standard. Ice is infrequently used on small vessels and that may be an issue given the high ambient temperatures in summer. The chill chain between landing and consumer / sales outlet is poorly developed.

The situation is the same in fish farming; as noted previously there is limited investment by trout farms in facilities to maintain the chill chain between the farm and the retailer.

While no incidences have been reported, mussel growers continue to present potential hazard as even after 3 years the depurification centre is not working, regulations requiring its use have not been introduced and there is no regular monitoring of the parameters identified in the 2006 strategy.

Progress can be reported in the fish processors with Ribarstvo, Cogi, Montefish and Ahileas all having developed HACCP systems. While some issues can be identified and it appears that the competent authority does not revise HACCP plants and related procedures, certainly potential food safety issues have been addressed and the companies have shown an awareness of the responsibilities of FBOs.

As identified in the socio-economic survey, only one of the respondents in the aquaculture and mariculture sectors reported implementing a HACCP plan. The limited number of restaurants interviewed acknowledged HACCP standards but had limited understanding of the concepts. Observation of a wide range of retail outlets emphasised their limited understanding of the need to lower the risk of cross contamination of food products. In contrast modern retail outlets observed in Tivat, Podgorica and Niksic are of a high standard.

Another issue is labelling, especially of fish that is frozen or repacked in Montenegro, including trout. Observation shows that in many retail outlets such product is presented in plastic bags, sometimes not sealed, that may or may not have a small label. In contrast, imported frozen fish has the required labelling and is well presented. The canned and smoked fish produced in Montenegro has the required labelling and is well presented.

7.3 Environmental Aspects

A number of environmental issues relate to the fishing sector, from an ecosystem based approach to fishery management planning, to the operation of farm units, to the discharge of waste from fish processing.


The FMP that will be prepared in draft form by end February 2012 will take into account all relevant environmental aspects, and the eco-system implications of the Montenegrin catch of fish.

In a GFCM meeting in 2010,1 IMB, which is the national laboratory reference for the monitoring of water quality in fish and mussels farms, noted that there are two fish farms in Kotor Bay and it considered that fish farms have a negative interaction with the marine environment. The recommendation was that in the future this type of farming should be located at suitable localities i.e. in the open part of the Montenegrin Sea in presence of currents. As noted above, this option is technically feasible, but if any growth is expected in the open sea and in the absence of any subsidies.

In the trout farming sectors of member states of the EU, the driving forces behind the current changes in production of are strict environmental legislations and the implementation of the EU Water Framework Directive, which sets water quality standards. It aims to restore the biodiversity and functioning of all surface freshwater bodies, including; lakes, streams, rivers, groundwaters, groundwater dependant ecosystems, estuaries and coastal waters, out to one mile from low-water. Member States must identify and analyse their waters and on the basis of individual river basin and district they then must adopt management plans and programmes of measures adapted to each body of water. Action on this is required in Montenegro. In March 2011 there was a workshop in Herceg Novi held by MARD in cooperation with the SWG GTZ SEF Project: “Strengthening of the regional cooperation and networking in the forestry and water management sector and sustainable development in the river basins of the South-Eastern European countries” with a technical discussion on EU Water Framework Directive.

7.4 IUU Fishing

Council Regulation (EC) No. 1005/2008 of 29 September 2008 established a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing. In order to ensure that no products derived from IUU fishing appear on the Community market or on markets supplied from the Community, the Regulation seeks to ensure full traceability of all marine fishery products traded with the Community, by means of a catch certification scheme. The scope of the IUU Regulation to prevent, deter and eliminate IUU fishing covers infringements to rules on management and conservation of fisheries resources in national and international waters.

For processed products imported into the EU and obtained from imported raw materials, EU importers have to submit a statement issued by the processing company of the exporting country providing information establishing the link between the processed products and the fish used as raw material. This raw material should be accompanied by the catch certificates validated by the flag state of the fishing vessel. The number of the health certificates and the approval number of the processing plant will be mentioned on the statement to ensure a link with the implementation of health legislation. S yet Montenegro does not have a working system to monitor catches through log books and dock side monitoring, while 2011 was the first time since 2008 that fishing vessels have been licensed. On that basis therefore Montenegro is unable to export fish to the EU.

1 http://151.1.154.86/GfcmWebSite/CAQ/7/GFCM_CAQVII_2011_Inf.13-e.pdf


7.5 Occupational Safety

An EC report1 analyses the implementation of two Health and Safety Directives2 dealing with fishing vessels and medical treatment on board. The report highlighted that: (i) Directive 93/103/EC does not apply to vessels of less than 15m in length, but between 60 % and 90 % of the EU fleets is made up of vessels that are less than 12m in length; and (ii) the high cost of safety equipment discouraged small ship-owners from acquiring it. Similar problems existed for the implementation of Directive 92/29/EEC. The medicines required on board under the Directive were considered suitable on large vessels, but posed a problem for medium-sized and small vessels.

The Commission concluded that Directive 93/103/EC posed the greatest problem requiring certain changes in line with Member State and social partner’s suggestions:

More information on accidents and cases of disease particularly recording less serious accidents and creating a list of frequent diseases and their causes;

The Commission wants the development of new systems for communicating particularly communication at grassroots level;

The Commission concentrates on the need for better training, adapted to fishermen profiles and possibilities and not just in the event of maritime disaster;

The Commission also calls on Member States to improve inspections. The Commission suggests that national labour inspectorates could focus on the sector and cooperate with other inspectorates

In regards to small vessels the Commission felt that extending the scope of the Directive to bring these vessels under the Directive might lead to an in increase costs for small vessels. The Commission therefore suggests drawing up a practical, non-binding guide for vessels under 15m in length at EU level.

8 PAST TRENDS AND FUTURE DEVELOPMENTS IN TERMS OF INVESTMENTS

8.1 Fish Catching

As can be concluded from the analysis above, in recent years there has only been limited investment in the fish catching sector. This has led to the catching sector in both marine and freshwaters to become old and inefficient. In one instance there has been concentration of ownership in the marine sector with one owner now having three vessels.

From the outset, it is important is to emphasise that any new investment in the catching sector must be in the context of an effective FMP that allows for the sustainable use of available resources. While the FMP has not been defined, it is likely to recommend a substantially different approach to fisheries management in Montenegro, with one potential objective of diversifying effort away from the traditional inshore waters. The successful implementation of such a plan would require financial support to allow new investment in vessels with capacity to fish in deeper waters and the modernisation of vessels allowed to catch in areas closer to shore. This would be in addition to other investment aimed at making the fishing operations more fuel efficient so reducing fishing costs. The aim will be to have a viable fish catching sector in the long term that provides a fair income to the participants with full and sustainable use of available catch opportunities.

1 http://www.euissuetracker.com/en/focus/Pages/Fishing-Vessel-Safety.aspx2 Council Directive 93/103/EC on safety requirements on board fishing vessels and Council Directive 92/29/EC on safety requirements for medical treatment on board vessels


The socio-economic survey found considerable interest on the part of boat owners in the potential for new investment, with about three-quarters of the respondents in the commercial fishing survey expressing an interest in acquiring new vessels and fishing gear, including new types of gear, or modernising vessels.

Many variables dictate the price of a new vessel. Survey respondents’ estimates of required investment ranged from €80,000 to €1.2 million, with a median average of between €150,000 and €200,000. Similarly the cost of a new engine was put at between €20,000 and €250,000, with a median average of between €20,000 and €30,000. For gear the range was €7,000 to €150,000, with a median average of between €20,000 and €40,000

About one-half of the small scale fishermen who responded to the socio economic survey reported an interest in new investment with eight planning to replace their vessel and engine within two years while others wanted to increase the amount of gear. Investment in small boats is substantially less than for the commercial vessels. New boats may cost between €5,000 and €30,000 (median €12,000 to €20,000), engines €1,300 to €14,000 (median €5,000 to €8,000) and gear €4,000 to €6,000.

Similarly about half of the lake fishermen were considering new investment in boats and engines, the total cost of which is about €2,000. The gear used for lake fishing costs substantially less than in the marine fishery; depending on type, replacement gear is said to cost between €150 and €2,000.

There is a need to improve fish finding equipment and vessel safety, while access to ice could be improved with ice makers on-shore or on-board larger vessels.

Fishermen report two main problems in making new investments; absence of own capital and the lack of land based collateral as a guarantee for bank loans. Fishermen are unwilling to use capital assets such as houses as guarantees.

8.2 Recreational Fishing

It is understood that the only investments in recreational fishing have been in restocking. There is no indication of the extent of these nor the success. Nor are there any indicators of any new investment in support services such as motor boats or gear supply shops. The socio economic survey mainly identified the need for improved controls rather than new investment to develop the potential of the sector, although some mention was made of restocking programmes.

8.3 Aquaculture & Mariculture

The most recent new investments are in the pilot projects to produce oysters. While one of these farms provided an indication of the investment cost, given the ease of identifying the enterprise this information must be treated as confidential.

There does not appear to have been any significant new investment in the production of mussels, sea bass and sea bream over the past 5 years.

Ten of the twelve mariculturalists responding to the survey indicated an interest in undertaking new investment to increase the area under production and to farm new species. To meet strategic targets and reduce average production costs to compete in the market, new investment is needed in the mussel sector to increase the area under production. The investment cost per hectare is put at between €20,000 and €40,000.


As noted previously, it is technically feasible to develop an open-sea mariculture sector. However, investment costs are high while there is limited technical capacity in Montenegro to develop alternative species. Market demand and limited potential scale are major constraints to development prospects especially when the bulk of supplies, including fingerlings and juveniles, have to be imported.

Almost without exception, trout farmers interviewed commented on their financial problems. At the same time there was an interest in new investment if funds were available for such as regulating water flow, introducing brood stock, constructing spawning areas, producing juveniles, adding to grow-out capacity, developing cage farming and diversifying market opportunities with value added production.

8.4 Processing & Marketing

In the past 3 years, Ribartsvo has invested substantial amounts to up-grade its facilities, with a modernised production area, cold stores and canning lines together with safeguards to ensure the treatment of waste water. The issue at the moment is not one of capacity, rather it is capacity utilisation due to lack of raw material at a workable pricing point.

The main issue facing Achileas is market development.

A number of companies are planning new investment, with the construction of cold stores and processing areas. With the prospect of increased landings of small pelagic fish, one company is contemplating investment in a new freezer and cold storage capacity.

A range of investments have taken place at the retail level, with new facilities at Montepesca in Tivat and new fish counters in large supermarkets being of high quality.

However, especially in the north of the country there is a lack of retail outlets and support in this area could improve the distribution and consumption of fresh fish. The sale of fresh fish along the road on the coast is a valid marketing strategy but more consideration has to be given to food safety requirements. While no one had considered the potential, there may be an opportunity for fully equipped mobile retail fish vans that could change location during the day and attend weekly markets in a range of towns.

Finally, there is potential investment in production facilities to add value to frozen fish consumed in Montenegro as value added products. Currently, the benefit to Montenegro from this type of product is limited.

9 IDENTIFICATION OF POTENTIALS AND NEEDS OF THE SECTOR 9.1 SWOT Analysis: Commercial Marine Fish Catching

Strengths Weaknesses1. Existing fishermen have a strong interest in new

investment in the catching sector if provided with adequate support.

2. In the context of overall opportunities for the national catching sector, the fleet is not overcapitalised and there is potential for expansion into non-traditional waters. Such new investment would reduce the pressure on inshore stocks.

3. The fleet lands high quality fresh fish which is in

1. The fishing fleet can be characterised as old, inefficient and to a large extent obsolete. Operating expenses are high and potential days-at-sea are reduced due to the recurrent need to repair old vessels, engines and gear.

2. Fishing operations are restricted due to the limited autonomy of vessels (in inclement weather and in deeper waters) and this leads to lack of continuity in supply.

3. The first hand sales price of landed fish is high and


high demand.

4. The Government of Montenegro is in the process of strengthening management controls and reducing the opportunity for IUU fishing; looking to reduce the risk of over fishing and provide for sustainable use of the available resources.

demand falls outside the tourist system. This limits the days-at-sea.

4. The sector is characterised by small enterprises with limited finance to improve the fleet with the introduction of modern technology e.g. multi-purpose vessels (i.e. able to use a variety of gears), better designed fishing gear (more effective catching and greater fuel efficiency) and better engines (greater fuel efficiency and ability to fish deeper waters).

5. There is a lack of private sector liquidity and limited access to credits on acceptable terms (guarantees, term, grace period, leverage and interest rate). Fishermen are unwilling to provide guarantees based on on-shore assets such as houses.

6. The uncertainty about the quantity of fish available for harvest on a sustainable basis increases the risk and uncertainty related to any new investment.

7. There is limited organisation of the sector with no producer organisation.

8. Stakeholders have a negative view of government institutions and this is an obstacle to cooperation.

9. To-date there is limited stakeholder input into the fisheries management process.

10. Many fishermen expect a paternalistic approach from Government and fail to contribute adequately to the effective management and administration.

11. There is inadequate support infrastructure for the commercial vessels and this increases costs while reducing competitiveness. The main gaps are specialised landing places and lack of a slipway to carry out repairs and maintenance.

12. The cost of inputs such as berthing fees, slippage and vessel repairs are high. Due to the lack of a critical mass, a large part of the inputs to the sector have to be imported and this increases the costs of operations.

13. Larger vessels require trained manpower. Local fishermen do not have the experience to work on large boats and there are no training facilities to up-grade their skills.

14. There is a problem attracting new entrants into marine fishing.

15. There is no market for fish all year round and no on-shore facilities to allow for the production of quality frozen products.

Opportunities Threats1. New investment in a different type of vessel

replacing existing vessels > 12 m, alleviating 1. Some stocks may be overfished and management

does not recognise the need to limit the potential


fishing pressure on stocks found less than 12 nm from shore while allowing Montenegro to benefit from deep sea fisheries and pelagic fisheries.

2. With new technology, increase the number of fishing days to add to the profitability of vessels and reduce the average first hand price of fish landings.

3. GoM has the opportunity to establish new regulations and new patterns of activity. The implementation of fisheries management plans supported by rigorous scientific analysis, reduces the risk of over exploitation of marine fisheries and provides a stronger basis for new investment in the sector. For trans-boundary stocks this should be done in cooperation with other Adriatic countries.

4. To make fuller use of its renewable resources to generate sustainable opportunities for employment and income.

5. Support the development of on-shore handling facilities to maintain product quality and meet EU hygiene standards.

for this. International practise increasingly emphasises the need for sustainable use of natural resources and where information is uncertain or unavailable then the precautionary principle should be implemented.

2. Limited knowledge of the resource base increases the risk and uncertainty associated with any new investment.

3. Entry to the EU will increase competition in the domestic market and there is a need to ensure that domestic producers may respond.

4. There is limited government support for the sector.

5. The National Fishery Strategies have not been implemented.

6. Competition from low priced product from the EU and neighbouring countries.

9.2 SWOT Analysis: Small Scale Marine Fisheries

Strengths Weaknesses1. Small scale fishing is appropriate for in-shore

waters off Montenegro.2. By its nature, the potential number-of-days at sea

are limited and if correctly managed hold less threat to the sustainability of natural resources than larger vessels.

3. The small boat fleet has limited needs in terms of investment on-shore support facilities.

4. Investment on vessels, engine and gear are substantially less than for larger vessels and running costs are lower.

5. The operating bases of small boats are close to the main markets, especially local restaurants and markets.

6. There is a strong interest by current owners to renew their investments if government support is forthcoming.

1. The sector is characterised by individuals with limited finance to improve the fleet (vessels, gear and engines). The existing vessels and engines are old.

2. Off season there is limited demand for the product and this reduces the potential to improve earnings.

3. Fishermen have limited means to store unsold fish, with no support infrastructure on-shore. The market does not provide an outlet for sales throughout the year.

4. Input costs (berthing (when in a marina), fuel and license) are high.

5. Historically there has been no government support for the small boat sector and until recently there was no representative organisation.

6. There is a problem attracting new entrants into marine fishing.

Opportunities Threats1. To renew the fleet with modern more fuel

efficient GRP vessels, new engines and a wider range of better gear.

2. Support the development of on-shore handling facilities to maintain product quality and meet EU hygiene standards.

1. Some stocks may be overfished. 2. Illegal fishing activities and lack of traceability on

fish supplied in the market. 3. Limited knowledge of the resource base increases

the risk and uncertainty associated with any new investment.

4. Entry to the EU will increase competition in the


domestic market and there is a need to ensure that domestic producers may respond.

5. There is lack of government support for the sector.6. The National Fishery Strategies have not been

implemented. 7. Competition from low priced product from the EU

and neighbouring countries.

9.3 SWOT Analysis: Commercial Freshwater Fisheries

Strengths Weaknesses1. Lake Skadar has long established commercial

fishery.2. The local resource is mainly highly prized

indigenous species such as carp and bleak for which there is a strong demand.

3. There is a strong interest by current owners to renew their investments if government support is forthcoming.

1. The sector is characterised by small enterprises with limited finance to improve the fleet with the introduction of modern technology (see above).

2. Lack of knowledge of resource base and the sustainable level of catch with a fishery management plan designed to recover stocks to maximum sustainable yield.

3. In the past non-native species (Chinese carp) have been introduced into the lake and this has affected the balance of the ecosystem.

4. Lack of adequate fishery management has led to a reduction in the annual catch.

5. Lack of respect for regulations6. Limited budget for monitoring activity7. Fishing techniques have low species selectivity.8. There is no on-shore support infrastructure (landing

places, stores, fish handling).9. There is no restocking programme for the Lake10.Limited market outlets.

Opportunities Threats1. Development of a lake fishery that is more cost

effective and provides higher incomes to licensed participants.

2. Improved fisheries management and related stock assessments in cross border cooperation with Albania.

3. Restocking of the lake with fingerlings able to grow to harvestable size under natural conditions.

4. Improved marketing.5. The integration of fishing as a tourist attraction in

locations such as Vizpazar.6. To develop a Lake fisheries brand.

1. Overfishing associated with weak fisheries management.

2. Environmental degradation.3. Illegal fishing.4. The introduction of non-native species5. Local population migrating to more economically

developed areas6. Unregulated fish sales7. Eutrophication and pollution (industrial and urban)

of Lake Skadar

9.4 SWOT Analysis: Recreational Fisheries

Strengths Weaknesses1. Attractiveness of Montenegro as a destination for

high end tourists (recreational fisheries).2. Benefits of recreational fisheries to the national

and local economies can be more than

1. Lack of a strategy to develop the recreational fishing sector with appeal to international tourists.

2. Lack of policing.3. Lack of policy aimed at clear differentiation


commercial fishing. between recreational and commercial fishing

activities.Opportunities Threats

1. Recreational fisheries developed as a market segment for development by the Montenegrin tourist authorities.

2. Support infrastructure.3. A targeted restocking programme.

1. Overfishing.2. Unregulated fishing.

9.5 SWOT Analysis: Mariculture

Strengths Weaknesses1. Geography, climate and water quality favour

mariculture.2. Good amount of surface & ground water.3. Good potential sites to expand mariculture4. Kotor Bay has high production of mussel spat.5. Freedom from major diseases6. Strong tourist demand for good quality local

products.7. Potential growth in domestic demand for fish8. Mussel growing can be a profitable occupation,

especially in the Bay of Kotor, and mussels can play a part on the cleansing of the water in the fjord.

1. The mussel growing sector is rustic with low levels of productivity and unit production.

2. Small unit production capacity of individual farms.

3. Unlicensed operators present a risk to the long term health of the formal producers.

4. The opportunities for growth in the culture of sea bass and sea bream are limited due to the high cost of inputs and the consequent problems of competing with major market suppliers.

5. High production costs.6. The need to import a large part of the required

inputs 7. Competition with other users.8. Limited number of species.9. Limited technical capacity. While training has

been undertaken on-the-job in the development of existing operations, this does not provide a strong basis for a widening of the species base.

10. None of the farms have an EIA.11. Limited opportunity to diversify the market base

by targeting export markets.12. Access to credit is limited.13. Expensive inputs.14. No common marketing strategy.15. Weak representative organisation.16. Environmental considerations must include

visual aspects and any mariculture facilities must fit in with the characteristics of the Bay of Kotor.

Opportunities Threats1. Global recognition that aquaculture is the only

way to fill the gap between supply and demand for fish and fish products.

2. New production systems and species3. Improved marketing.4. Confirmation of the zonification of the coastal

zone to allow implementation of long term strategy for development of mariculture.

5. EU membership will expand potential markets

1. Mariculture may be threatened by the negative impacts of other activities particularly where this adds to pollution e.g. discharge from cruise ships

2. Conflicts in the use of the coastal zone with competing claims on use of water areas.

3. High fish meal prices.4. New laws on environmental controls.5. Concern on future quality of water.

6. EU membership will increase competition


6. The European market for mussels is

undersupplied.7. Increased capacity to monitor water quality8. Increasing demand from tourism

7. On-going development in tourism and housing without proper sanitation.

8. Unlicensed farm sites.9. Competition from low priced product from the

EU and neighbouring countries.

9.6 SWOT Analysis: Aquaculture

Strengths Weaknesses1. Plenty of good water.2. Good local market.3. Low labour cost.4. Almost no disease.5. Growing domestic demand for fish6. Family run farms.

1. Limited recent investment in the trout growing sector.

2. Lack of integrated farms adds to production costs.3. Limited technical staff.4. Inefficient FCR.5. No production planning6. A weak sector organisation7. No training or expert assistance to support

innovations.8. Lack of affordable finance.9. Expensive inputs.10.Limited application of HACCP.

Opportunities Threats1. Opportunities for cage culture.2. Diversification of species.3. Unique local market.4. The potential to integrate with tourism.

1. The potential negative impact of trout farms on the riverine environment, especially reducing flows along the natural river course, especially in the dry season , the entry of feeds and medicines into the river system; and the escape of farmed fish in the wild.

2. Competition from low priced product from the EU and neighbouring countries.

3. Disease

9.7 SWOT Analysis: Fish Processing

Strengths Weaknesses1. Competitive cost of labour inputs2. Strong interest in developing processing capacity.3. Strong interest in HACCP procedures.4. Short distribution chain.5. Close proximity of major domestic markets to

coastal landing places6. Close proximity to European markets for high

quality fish products, including land locked countries with a market for marine fish.

7. Strong tourist demand for seafood.8. Growing domestic demand for competitively

priced fish products.

1. Small national population with low per capita consumption of fish and fish products.

2. Low and discontinuous supply from domestic landings.

3. High first hand sales price.4. Limited investment in value added production.5. Under-utilised existing processing capacity

(canned and smoked products)6. Competition from established competitors in

other Balkan countries.7. Problems in smaller processing operations to

meet EU quality standards with poor implementation of health & sanitary regulations and limited understanding of required marketing standards.

8. Poor infrastructure for post harvest handling


9. Lack of facilities for first hand sales.10. Limited promotion of fish products.11. Lack of finance to fund investments.

Opportunities Threats1. Increased national manufacture of added value

fish products based on imported raw material.2. Better utilisation of installed processing capacity

leading to increased competitiveness in the market.

3. Processing capacity for increased national landings of small pelagic species.

4. With lower first hand sales price, added value production of trout (smoked / frozen / fillets) and mussel products

5. Further development of the cold and chill chain

1. Competition from imported products.2. Ownership of supermarket chains by groups

based in third countries that source supply on the international market.

3. Dependence on the supply of imported raw materials.

4. More strict conditions to export to the EU

9.8 SWOT Analysis: Fish Marketing

Strengths Weaknesses1. Short distribution chain for fresh fish between

landing and consumers.2. Well developed distribution channels on the coast.3. New larger supermarkets in major population

areas with fresh fish counters. 4. Modern market outlets in some cities.5. Good quality competitively priced frozen fish

products from international suppliers

1. Low per capita consumption of fish and fish products.

2. Supply gap between national fish production and domestic demand.

3. Limited purchasing power.4. High price of national product.5. Limited retail outlets and opportunities to buy. 6. Small markets inland limiting opportunity for

development of larger supermarkets.7. Lack of formal market outlets for lake fish. 8. Montenegrin housewives are not accustomed to

preparing fish.9. Any promotional campaigns for fish could just

result in increased imports.10. Increased urban population requires a renewal

of distribution networks.11. While there are notable exceptions, some

domestic fish products are not of the required standard.

12. No traceability.13. Lack of food inspection and enforcement of

regulations.Opportunities Threats

1. Entry into the EU requires incorporation into national law EU laws and regulations governing food standards and inspection.

2. Strengthened institutional capacity for monitoring and enforcement.

3. Increase in the number of retail outlets with modern market stalls in green markets and mobile retail shops.

4. Stronger consumer preferences for fish and fish

1. Poor application of food safety regulations leads to fish based health issues that lead to reduced market demand.


products as consumers become more aware of the health benefits.

5. Growing population and increased number of tourists adds to demand.

6. Improved roads improve the potential to penetrate the domestic market with lower unit transport costs.

7. Stronger associations and/or producer organisations to strengthen the approach to marketing.

8. A functioning depurification centre for bi-valves.9. Improved on-shore infrastructure leads to

improved quality.

10 IDENTIFICATION OF TRAINING NEEDS IN THE SECTOR 10.1 Training Needs for Fishers

The general complaint by owners of commercial vessels relates to the lack of skilled and experienced crew. In turn, this relates to: (i) a perceived unwillingness of Montenegrins to work on fishing boats, with a preference for cleaner and safer work on-shore; and (ii) the lack of skills in non-traditional fishing such as purse seining. If new gears are to be introduced into the fishery, this will have to be supported by training in the required skills. The option is to bring in experienced fishermen from elsewhere e.g. Turkish to man purse seine vessels. The specific needs for the sector will become more clear with the introduction of a fisheries management plan that should confirm the status of the fleet in the medium to long term. As pointed in the Strategy (2008), it would be impracticable for Montenegro to establish a fisheries training school, and MARD must assess how to provide more formal training to skippers and fishermen.

To improve product quality, there should be some training of fishermen in the application of HACCP procedures on –board and on landing.

To ensure that the correct approach is adopted to safety, some training will be needed. This should be related to implementation of Directive 93/103/EC and the contents of any manual that is developed for vessels < 15 m LOA.

10.2 Aquaculture

The potential for growth in aquaculture should not be limited by skill gaps. Specific training needs will depend on the nature and extent of any expansion. For example, if there was to be renewed interest in carp farming, the extension of trout production through cage systems, the scale of any mussel farms and the whether or not it is considered feasible to develop mariculture in the open sea.

The availability of trained technicians will provide a platform for development of an aquaculture sector that responds to all he needs to ensure access to the EU market. Under the CARDS project, conversations were held on developing a post graduate aquaculture course at the University of Montenegro, similar to the one at the University of Belgrade, but it appears that no steps have been taken.


True?


The scale of the existing farms makes it difficult; but the need is to provide training to stakeholders on the application of the required standards, including HACCP and Good Operating Practices which is a system made up of a collection of procedures that set out how to operate an FBO to produce safe and suitable food.

10.3 Marketing

Under Regulation (EC) No 852 FBOs are to ensure:

that food handlers are supervised and instructed and/or trained in food hygiene matters commensurate with their work activity;

that those responsible for the development and maintenance of the procedure referred to in Article 5(1) of this Regulation or for the operation of relevant guides have received adequate training in the application of the HACCP principles; and

compliance with any requirements of national law concerning training programmes for persons working in certain food sectors.

There appears to be specific needs in retail outlets and restaurants for training in the handling of fish products. It is clear that newer businesses are embracing HACCP.

10.4 Consumers

A potential barrier to increased consumption is lack of consumer awareness in how to prepare product. If domestic production increases, consideration may be given to a promotional campaign that includes some form of training in how to prepare fish dishes.

11 OUTCOME 11.1 General Recommendations for Development of the Fisheries Sector

11.1.1 Introduction

Section 5 reviews Government strategy in relation to the fisheries sector. Given the relatively short period of time since the preparation of the most recent document there has been limited change in the vision, policy and strategy. However, as previously noted the financial resources have not been available to implement the related National Operating Plan. At that time it was estimated that a total of €17 million would be required, excluding the cost of developing designated fish landing facilities.

At the same time, preparation of this document has led to a much better understanding of a number of issues facing the sector as a whole, and there is now a wider appreciation of the role of small scale and recreational fishing and the nature of the national market for fish.

Consideration of the potential to develop the fisheries sector must start with an understanding of a number of basic issues:

No matter how well they are managed, capture fisheries will never supply sufficient fish to meet national demand consisting of the combined consumption of Montenegrins and international tourists;

While per capita consumption levels in Montenegro are not as low as previously estimated (due to the importance of recreational fisheries), they are less than the majority of other European countries and should, for health reasons, increase towards the EU average. Given the economic conditions in Montenegro, such increase will only occur if fish is competitively priced.


One way to supply any increased demand from national sources is through augmenting

production from aquaculture. Such growth would reflect the global trend. FAO stresses the increasingly important and complementary role of aquaculture and inland capture fisheries in fish production for human nutrition and poverty alleviation in rural areas.1

The other way to meet demand is through imports. An option to the current model of importing value added product is to support development of a domestic processing sector that allows the national economy to benefit from the value added in the secondary processing of fish directly imported from the harvesting country.

The competitive position of national industry will improve if it can source inputs more efficiently and more cost effectively. There is also the need to contribute to development of the Montenegrin economy by increasing the multiplier benefits from national production. One way of achieving this for the fish catching sector is to promote cluster development around dedicated landing places.

Whatever the initiatives taken to promote private sector development and promote its competitive position in the context of future membership of the EU should be in the context of a capable and efficient public sector that has the ability to fulfil its own role in partnership with the private sector. Montenegro is a young country and many institutions require strengthening so that they can meet this role. Given the scarcity of public sector finance, the roles of public institutions should be rationalised wherever possible to avoid duplication of effort.

The proposed approach to IPARD funding should be consistent with EU policy for member states with any assistance provided consistent with EU policy aims. This should allow for the IPARD process to be considered a first step with further progress achieved in the future using new financial instruments that may be available to Montenegro. For example, although it is not yet a member, Croatia has prepared documentation for aid under the European Fisheries Fund (EFF).

The aim of the EFF (2007 – 13)2 is to improve the sector’s competitiveness and help it become environmentally, economically and socially sustainable. To achieve this, it has a budget of €3.8 billion (or € 4.3 billion in current prices) for the seven-year period 2007- 2013. Funding is available for all sectors of the industry: sea and inland fishing, aquaculture, and processing and marketing of fisheries products. It follows the previous the Financial Instrument for Fisheries Guidance (FIFG).

Compared to the FIFG, the EFF contains several innovations. These include assistance to fishermen to move towards more selective fishing methods, increased emphasis on sustainable fishing and measures of common interest, including pilot projects, finance for local development strategies and support for aqua-environmental measures. No funding is available for the construction of new vessels or to increase the size of the holds of existing vessels. In common with the other EU structural funds, EU financing cannot be used alone, but only to complement national, regional or local expenditure.

The EFF targets five priority areas.

1 http://www.fao.org/focus/e/fisheries/sustaq.htm2 See http://ec.europa.eu/fisheries/documentation/publications/cfp_factsheets/european_fisheries_fund_en.pdf

http://ec.europa.eu/fisheries/documentation/publications/cfp_factsheets/european_fisheries_fund_en.pdf

http://www.fao.org/focus/e/fisheries/sustaq.htm


Adjustment of the fleet (axis 1). If a Member State decides to cut fishing opportunities, aid may

be available for vessels permanently or temporarily ceasing their activities. Aid can also be given for a range of other operations: on-board safety and working improvements, more selective gear, small-scale coastal fisheries, socio-economic measures including early retirement, and retraining. Vessels in certain fleet segments may receive aid to replace their engines to make them more energy efficient, but not more powerful.

Aquaculture, processing and marketing, inland fishing (axis 2). Aid is available for diversification into new aquaculture species and species with good market prospects, environmentally-friendly aquaculture, public and animal health measures, processing and marketing of fisheries and aquaculture products, and lifelong learning. Special provisions exist for inland fishing, reflecting its importance in central and Eastern Europe.

Measures of common interest (axis 3).These are activities not normally supported by the private sector and whose overall importance goes beyond the commercial interests of individual companies. They can include protection and development of aquatic fauna and flora, ports, shelters and landing sites, development of new marketing and promotional campaigns, pilot projects and other collective actions.

Sustainable development of fisheries areas (axis 4). Funding in this category is based on local development strategies, reflecting a bottom-up approach. It aims to help local communities reduce their economic dependency on fish catches. Coastal communities, and those near lakes and ponds with a significant level of employment in the fisheries sector, are eligible for EU aid to strengthen their general competitiveness, add value to fisheries products, develop tourism infrastructure and services, protect the environment, and encourage interregional and transnational cooperation.

Technical assistance (axis 5). This category covers items such as studies, reports, information activities and other actions relating to the implementation of the operational programmes.


The weakest point of the supply chain for fresh fish is continuity of landings and the sustainability of fish stocks. Another issue is fish quality while a third is infrastructure. This is in the context of an old and technically inefficient fleet.

The foundation of any new investment in the marine fish catching sector is the implementation of a fisheries management plan based on a strong understanding of the fishery resources available on a sustainable basis, with licensed fishing capacity and related effort linked to the medium to long term harvest possibilities.

There should be no public financial support for new investment in the fish catching sector unless it is in the context of an FMP that has been agreed and implemented by all stakeholders.

The effective implementation of an FMP will require continuing support for the four different entities that have roles and responsibilities for marine fisheries management planning: MARD administrators with duties as fishery managers; MARD fish inspectors charged with enforcement of the laws and regulations; IMB to provide advice on stock status; and something like the National Marine Fishery and Mariculture Council to represent stakeholder interests.

Current understanding indicates that inshore stocks of demersal and shellfish species targeted by commercial and small scale vessels are close to or beyond their maximum sustainable yields (although there may be exceptions that present new fishing opportunities e.g. clams (vongole) (Veneridae)). The situation will be confirmed in late 2011. However, IMB findings must be regarded


as indicative and the Institute will have to continue its research for several years in order to establish rigorous scientific assessments. In the meantime the precautionary approach must be taken to fishery management.

If inshore stocks (i.e. stocks within 8 miles of the baseline) are overfished or close to the limit of their annual maximum sustainable yield, it is advisable to diversify effort with the introduction of larger boats that have the autonomy and capacity to fish deeper waters, including those outside the 12 nm national limit. These should replace and not be in addition to existing commercial fishing vessels and they should only be licensed to fish in waters outside a defined limit within the Montenegrin fishing zone. The number of vessels required will depend on estimates of sustainable resource availability in the context of competing efforts of neighbouring countries in international waters and international policy on national fleet capacity. The FMP will advise on the possibilities taking into account GFCM and EU policy.

Commercial fishing vessels that are not replaced by larger vessels should be more efficient in order to reduce fishing costs and improve profitability. Old engines should be replaced by more fuel efficient modern ones, while a modification in fishing methods with use of static as opposed to mobile gear would lead to reduced use of fuel.

Any modernisation of the fleet should consider the resulting increase in fishing power i.e. modernised and new boats have a greater harvesting capacity than the current fleet. Any changes that led to more fishing days or more effective fishing in the same number of days would have to be reflected in the fisheries management plan, with consideration of reducing the number of licensed vessels. The needs for this and the mechanisms for doing so will be considered in the FMP (e.g. the leasing of fishing rights providing fishermen with the option of fishing or selling their “quota”, with safeguards to ensure concentration of fishing rights so as to limit the consequential social effects i.e. reduced employment).

New investment in the commercial fleet is also required to maintain product quality and ensure compliance with EU regulations. In addition, there should be an examination of on-board safety and investment needs related to Directive 93/103/EC.

The incomes of small scale boats are relatively low and may reduce once they have to compete in a Montenegrin market that is fully open to imports from EU and EFTA countries. Earnings could be increased by catching more fish e.g. with vessels working more gear. At the same time, it is important to recognise that similar to larger boats the activity of small scale fishing boats must be regulated; it is the same as commercial boats; too much effort by small boats can challenge the sustainability of the resources. Appropriate management measures should be included in an FMP that would look to restrict annual effort commensurate to sustainable yields.

Improved fuel efficiency could lead to higher net incomes and this may achieved by the introduction of new engines.

To meet EU regulations a number of actions are required including the effective implementation of VMS for larger vessels, the completion of log books etc.


Currently, there is uncertainty as to the future availability of the only area provided for landings by the commercial fleet which is in Bar marina. Given the need to develop infrastructure for tourism it appears to be only a matter of time before this space is unavailable or user fees are too high for the fishing fleet. In the Bay of Kotor there are no dedicated landing facilities.

It is an understandable and legitimate aspiration of the fish catching sector to have modern landing and berthing facilities, the creation of which would have the additional benefit of providing a base for cluster development that would promote multiplier benefits accruing from the fish catching sector.

Commercial fishing vessels could operate more efficiently in dedicated fish landing sites which offer required services while providing safe berth for vessels. Designated landing sites for commercial vessels would also facilitate more effective management, with for example 100 % dockside monitoring of landings. The facilities (e.g. lighting, fencing and cold stores) would allow fishing boats to meet Regulation (EU) No. 853/2004.

Port design is based on a number of factors, the most important of which is the number and size of vessels that may use the facilities. Required new investment may be relatively high and there must be a clear identification of needs to minimise spend while maximising efficiency. Accordingly, in the context of potential fleet restructuring, a major issue is the nature and characteristics of the any facility(ies). The needs of any support infrastructure are uncertain; for example how many fish landing places are needed in Montenegro, where should they be located, what is the most cost effective solution to the identified problems, what is the length of quay required etc. This would indicate that any decision on fish landing infrastructure should be based on a study to; (i) define a strategy for fishery related infrastructure;(ii) identify options; (iii) provide outline costs; and (iv) complete a techno-economic cost benefit analysis.

Fishery organisations remain weak and it is important that efforts continue to strengthen them.

11.1.3 Freshwater Fisheries

The problems in the main freshwater fishery (Lake Skadar) are similar to those in the marine fishery i.e. apparent past overfishing has led to a drastic reduction in the annual harvest. While the reasons for declining catches are not clear, a priori reasoning would lead to identification of the main culprit being too many boats harvesting too few fish, exacerbated by illegal fishing, lack of understanding of the maximum sustainable yields in a well-managed fishery, poor enforcement of the law and associated regulations, and no fishery management plan developed in cooperation with the Albanian authorities.

No support for new investment in the fish catching sector should be considered unless it is in the context of an FMP that is agreed between all stakeholders.

This FMP should be based on a strong understanding of the sustainable yields from the fishery. This will require support for the different entities that have roles and responsibilities for Lake Skadar fisheries; the National park, MARD, enforcement officers, the University of Montenegro to provide advice on stock status and a body to represent stakeholder interests.

An FMP would define the level of fishing effort required and whether or not the number of active boats is appropriate to the scale of fishing opportunities in the medium to long term.


Within the context of an FMP, the objective would be to support new investment to make the sector more competitive and increase the incomes of fishermen. This may imply a reduction in the total number of boats operating. Similar to the policy for the marine catching sector, fishery administrators should recognise that the formal fish catching sector cannot be used as a proxy for welfare support to the general population, using it to provide employment while allowing recreational fishermen to sell fish commercially in order to supplement low incomes from other activities. While such a policy is workable in the short term, as experience has shown in other parts of the world, the end result is over fishing and reduced incomes.

In the assumption that total effort of the fleet is in line with the annual sustainable yield, a number of areas may be considered for new investment. There is need for consideration of support for on-shore infrastructure (stores for fish and gear), direct marketing and restocking, while there should be investigation of how to improve security for nets to reduce the incidence of theft.

11.1.4 Recreational Fisheries

There are two main issues related to the recreational fisheries sector.

The first is to limit the maintained catch and reduce competition for commercial fishermen who work in the sector as a means of livelihood. In effect this implies that license requirements and related enforcement have to be strengthened and those that wish to sell their catch must take out a small fisherman license. For marine fisheries, this will be covered in the up-coming fisheries management plan. It is important that a similar approach is taken to the management of Lake Skadar fisheries.

The second issue is how to develop the offer of the recreational fishing sector to widen the range of activities open to international tourists and further spread the benefits of such tourism away from the coast.

The major fishery related issues are enforcement and, for fresh waters, a restocking programme, with preference for autochthonous fish species. Also related is the need to improve regulations and limit the potential for poaching. It would be useful to assess the potential to increase the local supply of imported inputs; one possibility is to assist clubs to import on the account of their members. One feature of recreational fisheries is the strength of the representative organisations.

11.1.5 Aquaculture

It is widely accepted that the importance of aquaculture in supplying protein is growing and will continue to do so in the coming decades. Recent data illustrates that the production of 1kg of finfish protein requires less than 13.5 kg of grain, compared to 61.1kg of grain for beef protein and 38 kg for pork protein. This is significant when taken in the context of the issues affecting the rest of the Montenegrin agriculture sector and the need for food security.

There are substantial development prospects for freshwater fish farming in Montenegro if the sector can develop to the stage where it will be able to compete in the medium to long term with producers from neighbouring countries. Development needs have been well analysed. Firstly, to make the sector more competitive the scale of operations will need to increase and better use has to be made of production capacity. The initial aim should be to increase the current annual production from the estimated 600 mt to 1,000 mt. This indicates the need to support farms that may develop vertical integration providing facilities for broodstock, fingerling production and grow-out. Secondly, any new


investment in inland fish farming must be in areas where there is continuity of water supplies within the context of a management plan as required by the EU Water Directive. This implies the introduction of measures to maintain water quality and these would have to be respected by all farms. Given the seasonal flows of riverine waters, intuitively this would infer concentration on cage culture in lakes but the final decision on this would be dependent on the techno-economic study included in any business plan prepared in support of investment proposals. Thirdly, there should an analysis of the potential to expand the range of species. Fourthly, there should be new investment in increasing productivity and improving the FCR. Lastly, there should be support for the adequate marketing of the product, including consideration of the potential to extend the range of product beyond gutted fresh fish. Any increase in the scale of the farms would require trained personnel.

Construction and modernization of fish and aquaculture farms includes:

Re/construction of breeding basins and facilities; Re/construction of and purchase of equipment for hatcheries; Purchase of feeding equipment; Purchase of specialized transport facilities; Construction and modernization of facilities for primary processing – cleaning, cooling or

refrigerating of the fish/aquaculture produced by the farm; Purchase and installation of treatment facilities for waste waters from the farm Purchase and installation of equipment for monitoring and control of water quality for the farm Construction and modernization of storage facilities.

Increased output should lead to price competitiveness of national aquaculture product, with lower prices leading to increased consumption. At the same time, there would be an opportunity for added value products such as smoked trout. Similar to other products, locally produced trout can be branded as part of the marketing strategy. The price of local products is less affected by any increase in the cost of transport.

There may be opportunities for developing the culture of species in warm waters, for example the cage production of carp in Lake Skadar. However, any initiative in this sphere would require a full feasibility study.

Similar to the marine catching sector, the representative organisation has to be strengthened.

11.1.6 Mariculture

Despite efforts, development of mariculture in the past 5 years has been limited to test production of oysters and work towards completing the depurification centre. Institutional support and monitoring by the authorities have not improved. This provides a poor basis for any further development from current estimated annual production of 110 mt of mussels towards the target of 2,500 mt. Simply put, if mariculture is unable to become more competitive in terms of farm-gate price and guaranteed quality, its future prospects are limited.

New cages for sea bass and sea bream have an investment cost of about €25,000, while each additional tonne of mussels needs an investment of about €12,500. The investment cost for the location of mariculture facilities in the open sea is substantially more and is not considered viable at this stage.


The aim is to increase growing area for bivalve molluscs from the current approximate 15 hectares to 50 hectares, within the terms of a defined and approved marine spatial plan for the Bay of Kotor to ensure long term stability of the enterprise. Given the limited financial means of the owners of current farms, financial support must be provided; however this should only be given to those farms where significant expansion is possible in the existing growing area. A pre-requisite of support for any new investment is the establishment of the procedures needed to allow export of product to the EU.

Similar to the marine catching sector, the representative organisation has to be strengthened.

11.1.7 Fish Processing

As stated in the 2008 strategy, a main opportunity is the manufacture of value added products, in part resulting from the competitiveness of Montenegro’s relatively low wage structure. The potential for this has been emphasised after further analysis of trade data and recognition that a major part of fish consumed in Montenegro is imported value added product manufactured by secondary processors located in regional countries using fish caught in other countries. Support should be provided to enterprises that wish to invest in added value production in Montenegro. This would provide processing capacity for fish caught by the domestic fleet outside the tourist season and add to the potential for developing the harvest of small pelagic species.

Some of the locally produced and packed frozen fish currently on sale in retail outlets is not of the required quality and is not packed and labelled according to standards.

11.1.8 Fish Marketing

While recent years have seen strong progress in improving facilities available for fish marketing (dedicated fish markets in Bar and Podgorica, a modern fish retail outlet in Tivat and fresh fish counters in the newly introduced large supermarkets), substantial work remains to be done to: (i) improve access to fish; and (ii) improve food safety. The potential for improved market access could be explored though a number of mechanisms: (i) assistance to municipalities to provide dedicated fish stalls at existing green markets; (ii) support to enterprises who want to develop their own retail outlet; and (iii) support for the introduction of mobile retail shops that would serve a number of markets.

11.2 Recommendations for the Preparation and Implementation of IPARD

11.2.1 Introduction

Support for the fisheries sector from IPARD funding can be considered under three axes:

Axis 1o Assist the production sector to restructure and to upgrade to Community standards. o Setting-up of producer groups. o Support the food industry to restructure and to upgrade to Community standards.

Axis 2o Actions to improve the environment and the countryside.o Support of local rural development strategies.

Axis 3o Rural infrastructure.o Diversification and development of rural economic activities.o Improvement of training.o Technical Assistance.


Reflecting the advice of the consultants who prepared the IPARD sector strategy for the meat sector, it is considered that successful implementation of the IPARD programme will need advisory services to potential beneficiaries in the preparation of sound investment proposals and applications and facilitate the access to bank services to ensure the pre-financing and private co-financing needed under IPARD (e.g. guarantee funds).

Consideration of the proposed use of IPARD funds to support development of the fishery sector and strengthen its competitive position is based on a number of important premises.

There is a limited total budget and the part allocated to the fishery sector will probably be limited to the extent that it reflects its current proportionate contribution to the GNP attributable to the agricultural sector.

A range of issues have been identified that will contribute to the development of the fishery sector. The proposed programme should not be over ambitious and aim to provide financial assistance for all possible activities and all participants; rather it should be selective so that the level of funding can make a real difference to development prospects.

IPARD funding is not a source of social welfare; care has to be taken to identify and implement actions that contribute to efficiency rather than maintain the status quo and, where it exists, inefficiency.

Preference should be given to those with the capacity for change and development and to take the steps needed to modernise the Montenegrin fishery sector. It may be argued that this is inequitable. This is not the case – the reality is that if development and changes do not take place the whole sector will suffer from the inability to compete as full members of the EU. The successful implementation of individual projects that make the participating enterprises more efficient should act as drivers for change in other enterprises that may subsequently be eligible for assistance from other financial instruments.

Prioritisation that will lead to selective IPARD funding means that there will be “winners” and “losers”. However, the aim should be that the changes resulting from IPARD funding result in a net benefit to the Montenegrin economy i.e. higher total employment and income and greater efficiency. The aim is to ensure sustainable enterprises with the capacity to compete in an open market while providing fair and equitable incomes to the employees.

It may be that some of the existing agents in the sector will chose not to participate for a variety of reasons such as the owner’s age, the current location of their business being unsuitable for expansion, lack of interest etc.

IPARD funding should be seen as a starting point for implementation of the National Fisheries Strategy; additional funds may become available later to further develop the operational programme.

Recommendations made below relate to Axis 1 and Axis 3; there are no recommendations for Axis 3.

11.3 Proposed Measures under IPARD Axis One


The situation regarding assistance to the marine fish catching sector is complicated due to the EU policy of not supporting new capacity in the fleet. While this position will be clarified in the FMP, at this stage it is not proposed that IPARD support new build, however strong the case may be for


renovation of a technically obsolete fleet. It is suggested that if the concept of developing a new fleet segment of larger boats with greater autonomy is accepted, the Montenegrin government provides its own funds when this does not lead to an increase in the total number of boats licensed by the Montenegrin authorities.

IPARD funding should be made available to making some of the existing vessels more efficient with new engines and new and improved fishing gear (including the introduction of new types of gear as allowed by Montenegrin regulations) that are designed to reduce fishing costs and improve profitability. At the same time, assistance should be given to modify vessels so that they can meet EU food safety regulations, with functioning systems to chill fish and reduce the potential of contamination from dirt and diesel, while protecting the product from the elements during unloading. This approach fits with EFF axis 1.

For new engines the minimum criteria should relate to the age and seaworthiness of the vessel and the age of the engine. Once the concept is accepted the actual criteria may be defined in greater detail e.g. the replacement of engines over a certain age. Not all vessels would be assisted. It goes without saying that vessels provided with a new engine will also need to satisfy other requirements related to food safety and on-board safety.

Figures above indicate there is a wide variation in the estimated cost of a new engine (€10,000 to €250,000) with a mean average of €65,000. Respective figures for replacement gear are €5,000 to €150,000 with an average of €46,000.

No information is available on the cost of maintaining the quality of fish and on-board safety equipment.

Further funds should be available to support on-shore investments to maintain and store the foish, such as cold stores, ice makers and refrigerated transport.

11.3.2 Lake Fisheries

IPARD support should be limited to developing on-shore infrastructure for storage of boats, equipment and product. If fish is caught and sold live, this could include investment in holding tanks.

There should be no support for the catching sector in terms of boats and engines until there is a clearer idea on the maximum sustainable yield of fish resources found in the lake and an agreed trans-boundary fisheries management plan with Albania.

11.3.3 Recreational Fisheries

The potential for IPARD funds is limited to assisting the recreational fishing sector in the restocking of lakes and rivers.


11.3.4 Aquaculture

While there a number of issues related to the development of the fish farming in fresh waters, given the limited IPARD funds it is suggested that assistance be limited to expanding production at a select number of farms and making them more efficient with the intention of reducing production costs. In turn, this will lead to the sector becoming more cost competitive. Assistance should be provided within the context of a water management plan that meets the needs of the EU Water Directive.

Given the issue of continuity of fresh water supplies, assistance should only be provided for investment at those sites that can guarantee continuous supply and should be restricted to enterprises with existing investment in the sector. The types of investment to be supported are: new or increased grow-out capacity; improved brood stock and increased vertical integration with the production of ova, fish fry, fingerlings and juveniles. Farms that are supported will be expected to meet all other standards with the implementation of HACCP and Good Operating Practices, while introducing measures to increase profitability such as improved FCR, and further IPARD support should be available to meet those objectives.

Complementary action is needed in the public sector to support development in the private sector with the aim of improving national capacity to promote sustainable and healthy aquaculture production for domestic consumption and trade. This will require the design and implementation of a national AAH strategy (see above).

11.3.5 Mariculture

Similar to aquaculture, emphasis should be on increasing production of specific enterprises with the aim of creating economies of scale and reducing costs and first hand sales prices. Assistance should be provided within the context of Marine Spatial Planning for the Bay of Kotor and the implementation of public sector activities designed to facilitate the export of product e.g. monitoring water quality and residues, which could form part of national AAH strategy.

The enterprises that receive IPARD assistance must also implement HACCP and Good Operating Practices to reduce the risk of compromising food safety. IPARD support should be available to meet these objectives.

11.3.6 Fish Processing

In recent years, individual companies have undertaken significant investment to increase processing capacity for lake fish, trout and carp. At the moment, however, the utilisation of installed capacity is low due to supply and/or marketing problems. These companies could receive further assistance to increase capacity utilisation, with a policy designed to encourage value added production of imported frozen fish for sale in the domestic and export markets, substituting for the imports from other countries in the region. The potential for this is related to the buying policies of the supermarket chains that through the on-going rationalisation process in the retail sector hold an ever growing market share. If this business proposition is to be successful, the quality and pricing of products must be competitive with currently established market leaders.

11.3.7 Fish Marketing

If fish consumption is to be increase, consumers have to be provided with the opportunity to buy. While towns on the coast and in the major cities are served by direct purchase from boats, retail shops, green markets and supermarkets this is not the case in smaller inland towns. At the same time,


the size of population in the individual towns and their relative isolation limits the potential for large supermarkets with the floor space necessary to justify contemplation of a fresh fish counter. On that basis, it is proposed that IPARD funding should be available to fund new retail outlets with support to municipalities for specific stalls in existing green markets, enterprises interested in opening shops and mobile shops with the capacity to serve a number of markets.

11.4 Proposed Measures under IPARD Axis Three

Three interventions are proposed for Axis 3 and these relate to technical assistance.

1. A priority is the preparation of a detailed fish harbour strategy, with an options analysis, identification of needs, outline plans and a techno-economic feasibility study. The output will be recommendations on development of fishery specific landing facilities together with on-shore complementary assistances in support of a cluster development.

2. Assistance in the design and implementation of a national AAH strategy. 3. Assistance in the valuation of prospects for aquaculture on Lake Skadar.

The outputs will form the basis for new proposals with the context of any future financial packages for the fishery sector in the future.

normal template - agricultural policy...

Documents