retrospective evaluation of scrapping and temporary ... · source: annual fleet report 2011...

DG MARE

Lot 2: Retrospective and prospective evaluation on the common fisheries policy, excluding its international

dimension

Ref. No MARE/2011/01

Estonian Case Study Report

for

Retrospective Evaluation of Scrapping and Temporary Cessation Measures in

the EFF Specific contract no.4 – SI2. 639813

November 2013

Cessation Measures Evaluation – Estonian Case Study Report Page i

Project no: ZF1455_S03

Issue ref: V3

Date of issue: 03/12/13

Prepared by: TC

Checked/Approved by: SR


Contents

1 Structure of the fisheries sector ....................................................................................................... 2 1.1 Structure of industry ................................................................................................................. 2 1.2 Management structure .............................................................................................................. 2 1.3 Interviews ................................................................................................................................. 3

2 History of fleet capacity and cessation measures in the MS ........................................................... 4 2.1 Trend in fleet capacity .............................................................................................................. 4 2.2 Permanent cessation funding ................................................................................................... 4 2.3 Temporary cessation funding ................................................................................................... 4

3 Results of stakeholder interviews .................................................................................................... 5 3.1 Strategy and approach ............................................................................................................. 5 3.2 Implementation and Administration .......................................................................................... 5 3.3 External factors ......................................................................................................................... 5 3.4 Impact and Effectiveness ......................................................................................................... 6

4 Results of vessel owner survey ....................................................................................................... 8 4.1 Vessel and vessel-owner information ....................................................................................... 8 4.2 Owners that scrapped their vessel(s) with support ................................................................... 8 4.3 Owners that scrapped their vessel(s) without support .............................................................. 9 4.4 Owners not scrapping any vessels ........................................................................................... 9 4.5 Owners engaging in temporary cessation with and without EU aid .......................................... 9

5 Discussion ..................................................................................................................................... 10 5.1 Relevance ............................................................................................................................... 10 5.2 Effectiveness .......................................................................................................................... 10 5.3 Efficiency ................................................................................................................................ 12 5.4 Coherence .............................................................................................................................. 13 5.5 Acceptability ........................................................................................................................... 13

6 Summary and conclusions ............................................................................................................ 14 6.1 Trends in fleet structure & capacity ........................................................................................ 14 6.2 Extent of cessation measures contribution ............................................................................. 14 6.3 Opinions on cessation measures ........................................................................................... 14 6.4 Vessel owner Survey findings ................................................................................................ 14 6.5 Evaluation conclusions ........................................................................................................... 14 6.6 Conclusions for the counterfactual analysis ........................................................................... 15 6.7 Recommendations .................................................................................................................. 15

APPENDIX 1: References ................................................................................................................... 16


Tables

Table 1: Capacity and number of vessel by fleet segment (2011) ......................................................... 2 Table 2: Evolution of the Estonian fleet capacity between 2008 and 2012 ........................................... 4 Table 3 Scrapped fishing capacity and EFF granted by gear and adjustment plan .............................. 4 Table 4 Scrapped fishing capacity and EFF granted by fleet segment and adjustment plan ................ 4 Table 5: Estonian quotas between 2007 and 2012 ............................................................................... 6


Acronyms AER Annual Economic Report NAFO North Atlantic Fisheries Organization NEAFC North East Atlantic Fisheries Commission FAO Food and Agriculture Organisation of the United Nations FTE Full Tim Equivalent MSY Maximum Sustainable Yield

Cessation Measures Evaluation – Estonian Case Study Report Page 2

1 Structure of the fisheries sector

1.1 Structure of industry

In 2011, there were 919 vessels registered in Estonia, in three fleet segments:

• Baltic trawlers, with 46 vessels, accounted for almost two thirds of catches, targeted species are Baltic herring, sprat and cod;

• Long distance fishery: with 6 vessels, accounting for a quarter of catches or more than half of the national gross tonnage. Targeted species are northern prawn, red fish and Greenland halibut;

• Coastal fishery: accounts for 94% of vessels but for only 12% of catches. Targeted species are Baltic herring, perch and flounder.

Table 1: Capacity and number of vessel by fleet segment (2011)

No vessels kW GT Catches (t)

Baltic Sea trawling (>12m) 46 11,605 4,286 52,998

Long distance fishery (>24m) 6 12,670 8,281 19,610

Coastal fishery (<12m) 867 14,496 1,692 10,353

Total 919 38,771 14,259 82,961

% No vessels % kW % GT % Catches

Baltic Sea trawling (>12m) 5% 30% 30% 64%

Long distance fishery (>24m) 1% 33% 58% 24%

Coastal fishery (<12m) 94% 37% 12% 12%

Total 100% 100% 100% 100%

Source: Annual fleet report 2011

Trawlers and coastal vessels fish in the Baltic Sea. Long distance vessels operate in NAFO and NEAFC areas. According to the annual fleet report, Estonian fleet crew represented 521 full time equivalent (FTE) in 2011.

1.2 Management structure

The Managing Authority is the Ministry of Agriculture. There are two professional organisations at national level:

• Estonian Fishermen Association (members are mainly trawlers but also coastal fishermen), there are 9 members with 16 vessels which account for 4,800 kW and 2,250 GT (respectively 18% of the kW and 38% of the GT of the considered fleet segments, the association representativeness being higher on trawling segment than on coastal segment);

• Long Distance Fishing Association (which represents all the vessel owners of the long distance fleet segment).

There are three producer organisations, which handle 91% of the marketing of the Baltic quotas. The Ministry of Agriculture and the two national professional organisations were interviewed.


1.3 Interviews

Table 2: list of interviews

Name Department/Function

Juhani PAPP Ministry of Agriculture – Head of the Bureau of Fisheries Department

Ain SOOME Ministry of Agriculture – Head of the Fishery Economic Department

Mart UNDREST Estonian Fishermen Association

Mati SAREVET Estonian Long Distance Fishing Association

Toomas TAMME Estonian Long Distance Fishing Association


2 History of fleet capacity and cessation measures in the MS

2.1 Trend in fleet capacity

The fleet capacity decreased significantly over the period 2008-2011: -4.5% for the number of vessels, -19.6% of GT and -15.1% of kW.

Table 2: Evolution of the Estonian fleet capacity between 2008 and 2012

2008 2009 2010 2011 % change

Number of vessels 962 946 931 919 -4,5%

Gross tonnage (1000 GT)

17808 14541 14683 14309 -19,6%

Power (kW) 45974 40575 40234 39039 -15,1%

Source: Estonian fleet reports

2.2 Permanent cessation funding

The scrapping scheme under EFF mainly concerned Baltic Sea trawlers (22 vessels of the 23). The other fleet segment covered is the long distance fishery with one vessel only.

Table 3 Scrapped fishing capacity and EFF granted by gear and adjustment plan

Gear category No. of vessels GT EFF Granted

(k€) €/vessel €/GT

Trawls 21 2,209 4,323 205,845 1,956

Gill nets and entangling nets 2 153 312 155,785 2,036

Total 23 2,362 4,634 361,629 3,993

Proportion of total fleet (at 2011) 2.5% 16.6%

Source: Art. 40 data provided by the Estonian Managing Authority

Table 4 Scrapped fishing capacity and EFF granted by fleet segment and adjustment plan

Adjustment plan No of vessels GT

EFF Granted

(k€)

EFF paid (k€)

National contr. (k€) MS Share

Baltic trawlers 22 1,644 3,672 3,672 1,224 25%

Long distance fishery 1 718 963 963 321 25%

Total 23 2,362 4,634 4,634 1,545 25%

Source: Art. 40 data provided by the Estonian Managing Authority

2.3 Temporary cessation funding

Temporary cessation has not been implemented in Estonia.


3 Results of stakeholder interviews

3.1 Strategy and approach

The strategy was defined by an expert group including the separate Ministries of Agriculture, Environment and Finance, scientists, professional organisations and environmental organisations. A study by the Marine Institute on overcapacity was carried out before the implementation of each scrapping round. These studies highlighted the impact of Baltic trawlers on the resource compared to the other fleet segments and, to a lesser extent, the impact of the long distance fishery.

The fleet segments targeted by scrapping were:

• Trawlers: covered by each scrapping round, • Long distance fishery: covered by the last scrapping round only.

The coastal fishery segment was not covered by scrapping schemes because it was considered that overfishing was not linked to vessel capacity of this segment due to the use of passive gear.

3.2 Implementation and Administration

Individual transferable quotas (ITQ) have been implemented in Estonia since 2000-2001. The quota allocation system is based on historical records (3 years) for the different species. The quota is allocated to a company and not to a vessel. Furthermore, all commercial fishermen must hold a fishing permit and have to pay a fishing fee. According to the Ministry of Agriculture important restructuring of the sector has been achieved thanks to the combination of the different tools available: ITQ and scrapping. However, it is not possible to fully assess the specific impact of each of these schemes with the data available.

The scrapping subsidy is linked to the quota. If a vessel owner sells his quota, he cannot apply for a scrapping subsidy. The quota is allocated to a company, not to a vessel; this means that the quota can be kept if a boat is scrapped without subsidy.

Under the EFF, the implementation of scrapping schemes is based on call for tenders. A maximum amount of € / GT is defined. Each tenderer can ask for a lower €/GT and applications are ranked from the lowest €/GT requested (the most efficient) to the highest €/GT requested (the least efficient). In case of over-subscription, applications ranked last would be rejected. In fact, all applications in compliance with the established rules (number of active days…) were accepted.

3.3 External factors

Impact of Fuel crisis

The two main fleet segments (trawlers and long distance fishery) have been impacted by the fuel crisis. However, the fuel package was not implemented in Estonia. According to the National Authority, there have been no requests from the professional organisations to put in place a fuel package.

Resource and quota

The main species targeted are sprat, herring and northern prawn. The quota allocation has decreased significantly between 2007 and 2012 on these main species (-50% on sprat, -29% on herring, -45% on northern prawn)

For the long distance fishery, fishing opportunities have largely decreased in 3L and 3M areas (NAFO) and vessel owners have been seeking new opportunities.

According to the National Authority, there have not been any significant changes in fish stocks since the drafting of the NSP and the OP for the EFF. There has been an improvement of cod and herring stocks, and a decrease of sprat stocks, thought to be caused mainly by the recovery of cod stock.


Table 5: Estonian quotas between 2007 and 2012

2007 2008 2009 2010 2011 2012 2007/12

Sprat 52,060 52,060 45,813 43,522 33,077 25,800 -50%

Herring 32,227 33,816 32,247 31,007 28,877 22,930 -29%

Atlantic salmon 10,609 9,255 8,104 7,778 6,848 4,162 -61%

Redfish 1,781 1,571 1,571 1,954 1,868 2,017 13%

Cod 1,171 1,054 1,156 1,380 1,613 1,828 56%

Skates and rays 546 546 554 492 491 348 -36%

Greenland halibut 327 327 325 324 347 330 1%

Mackerel 135 124 165 156 137 137 1%

Northern prawn 245 278 334 334 214 134 -45%

Roundnose grenadier 67 67 57 49 43 38 -43%

Blue ling 4 3 3 3 5 5 25%

Total 99,172 99,101 90,329 86,999 73,520 57,729 -42%

Source: European Commission

Shared fisheries

The Polish fleet is also active in the Baltic Sea with the Polish fleet being twice as large as the Estonian one (in terms of total fleet capacity). Thus, according to the National Authority, the scrapping in Poland may have had more impact on the resource than the scrapping in Estonia.

3.4 Impact and Effectiveness

Because of the influence of USSR rule, the Estonian fleet was considered, by the National Authority and professional organisations, to be inefficient before joining the EU.

The scrapping measures allowed the Baltic trawler segment to be restructured and so at present, the fleet is considered to be profitable. According to the professional organisations, without the scrapping scheme there would be more vessels remaining, with lower levels of catches and turnover/profitability.

Furthermore, scrapping schemes contributed to the fleet modernisation thanks to the possibility of re-investment of the subsidy for vessel owners with more than one vessel. This was expected and intended by Estonian authorities as most companies have more than one vessel, but no data is available on the number of vessel owners who re-invested the subsidy.

The long distance fishery fleet segment has moderately benefited from the scrapping measure but the number of vessels decreased by around 50% since 2004. This fleet segment was not covered by the first two scrapping rounds and some vessels that may have looked to apply were not active enough in the last round. Furthermore, the value of the premium was not considered as attractive for vessel owners for this segment as compared to trawler owners.


The use and the impacts of the scrapping measure are very different in these two fleet segments and is due to the economic context of each fleet (type of companies, value of the vessels on the second-hand market) and to the evolution of the stocks of the targeted species.

The coastal fleet segment has not been restructured because it has been considered that the reduction of capacity had no impact on the resource as this fishery uses passive gears. This segment accounts for only 12% of catches but represents 37% of vessels. According to the Estonian Fishermen Association, measures to help fishermen to find other job opportunities (both within the fishery sector and outside it) should be implemented in order to help the restructuring of this segment and improve economic performance..

The Estonian system is considered to be effective and efficient by stakeholders thanks to the combination of:

• a scrapping scheme based on call for tenders, • individual quotas based on historical records, • a selection of the segments with the highest impact on the resource, • controls.

According to the National Authority, the capacity is now in line with the resource [despite the quotas for most species other than cod still reducing].


4 Results of vessel owner survey

4.1 Vessel and vessel-owner information

Nine interviews were conducted with Estonian vessel owners, two of them were conducted with the same vessel owner concerning two different vessels.

The total fleet of vessel owners amounts to 23 vessels (including 5 non active) and the total number of employees in these companies is 92 (average 2012).

Among the interviewees:

• 5 vessel owners scrapped vessels with subsidy, • 1 vessel owner scrapped a vessel without subsidy, • 3 vessel owners did not scrapped vessel.

4.2 Owners that scrapped their vessel(s) with support

Five of the vessel owners scrapped vessels with support; they currently own 11 vessels, all active. This group scrapped / reassigned / transferred a total of 11 vessels in the last 10 years.

Each of the vessel owners has invested in the fleet since 2008, in vessel equipment (except gear and other operational investment) and other aspects of the fishing sector (processing, marketing…).

Among the reasons for scrapping vessels:

• 4 owners mentioned the limited fishing opportunities due to a lack of quota or other regulatory restriction;

• 2 owners mentioned the cost of vessel-overhaul; • 1 owner indicated that he had to scrap a vessel to build a new one; • 1 owner indicated it was an old out dated vessel.

The selection of the vessel to scrap was based on the facts that:

• it was the most technically out-dated one for all of the owners; • it had the fewest fishing entitlements/ opportunities for four of them.

One owner scrapped his three technically out dated vessels to buy a newer larger one.

Two of the five owners have had costs for scrapping and only one could sell some equipment. For each of them, the licence has been re-allocated to another vessel they owned.

The evolution of catches after the scrapping is different among owners: it reduced for two of them, remained stable for one and increased for one (one of the vessel owners gave no indication).

For four of the vessel owners, the amount of the subsidy was about the same as the market price of the vessel, the fifth owner did not know. The subsidy allowed four of the owner to invest in the modernisation of another vessel, one owner invested in another aspect of the fishing industry and another one bought a new vessel.

Without cessation funding, two owners indicate they would have continued fishing but didn’t know for how long and two owners would have sold the vessel and kept the fishing entitlements (the last owner did not indicate what he would have done without funding).


4.3 Owners that scrapped their vessel(s) without support

Only one vessel owner scrapped a boat with no EU support. He no longer works in fishery catching side but now in the fish processing industry.

The owner decided to scrap his vessel because it was inactive due to limited fishing opportunities and it was the least profitable vessel among the owner fleet. The scrapping led to costs for the vessel owner and no specific equipment was sold.

The owner scrapped another vessel with subsidy; the catches decreased approximately the average yield of the scrapped vessels.

4.4 Owners not scrapping any vessels

The group of three vessel owners who did not scrap vessel control twelve vessels, including five inactive (all owned by the same person). Two of these owners scrapped / reassigned / transferred vessels (six vessels scrapped in the past ten years) but were interviewed concerning vessels not scrapped.

All of these vessel owners had invested in their boats since 2008 (this did not include gearboxes but instead overhauls and modernisation of hydraulic equipment).

The evolution of the profitability of the vessels is different for each owner: it decreased for one of them, increased for another and remained stable for the third. The main factors influencing this profitability were fuel price and fish prices, labour costs, other operating costs and technological improvement.

The vessel owner who considered that his profitability remained stable uses his vessels to fish, but also for tourism and scientist research work.

4.5 Owners engaging in temporary cessation with and without EU aid

Temporary cessation has not been implemented in Estonia.


5 Discussion

5.1 Relevance

5.1.1 Are measures other than EU-funded cessation measures (e.g. the market, transferable quotas) capable of addressing overcapacity in the Estonian fishing fleet? If not, to what extent are they insufficient and why?

The quotas appeared to be the main measure capable to address overcapacity. Scrapping helped the adaptation of the fleet in the context of quota implementation.

There were some resources issues on fisheries targeted by scrapping schemes in 2008 (spawning stock biomass on long distance fishery and fishing mortality on Baltic trawlers and long distance fishery).

Scrapping measures allowed the trawler segment to be largely restructured and so at present the fleet is considered to be profitable. According to the National Organisation, without the scrapping scheme there would be more vessels, with lower levels of catches and lower turnover.



5.1.2 To what extent are the objectives of permanent and temporary cessation measures appropriate to address overcapacity in the Estonian fishing fleet?

A study from the Marine Institute on overcapacity was carried out before the implementation of each scrapping round in order to focus the scrapping measure on the fleet segments with the largest impact.

All stakeholders agree on the fact that scrapping helps the fleet to adapt and reduce its capacity.

5.2 Effectiveness

5.2.1 To what extent have permanent cessation measures contributed to a reduction in the size of the Estonian fishing fleet?

On the period 2008-2011, according to the Estonian fleet reports the total number of vessels decreased by 4%, the GT by 20% and the KW by 15%. Permanent cessation measures are seen to have removed 2.5% by number and 16.6% by GT.

However, this hides large differences between fleet segments:

• Baltic trawlers (64% of catches in 2011): -35% of vessels, -25% of GT and -23% of KW • Long distance (24% of catches in 2011): -25% of vessels, -18% of both GT and KW • Coastal boats (12% of catches in 2011): -2% of vessels, -4% of GT and -5% of KW

Previously to 2008, the fleet capacity had already decreased significantly: -79% GT and -77% KW.

Between 2008 and 2011, the decrease of GT on the two fleet segments covered by scrapping scheme was 1,406 GT on Baltic trawlers and 1,886 GT on long distance vessels. The GT scrapped under EFF were respectively 1,644 and 718. Concerning Baltic trawler, the difference between the


global evolution of GT and the GT scrapped highlights that there have been some entries of vessels on this segment.

The operational program planned a reduction of 2,916 GT and 6,946 KW between 2006 and 2010. According to the fleet register, the reduction/decrease was actually larger over this period: 6,035 GT and 12,808 KW.

The difference between the objectives of the operational programme in terms of GT and KW scrapped and the global evolution of GT and KW shows the importance of scrapping without support.

The maximum amount of the subsidy was considered attractive for trawlers compared to the value of vessels on the second-hand market. This was not the case for long distance vessels; the market value (about 20 M€ per vessel on the second hand market) was higher than the value of the subsidy, notably because of the value of on-board processing equipment.

5.2.2 To what extent have permanent cessation measures led to a sustained reduction in Estonian fishing capacity (the overall catching capacity of the fleet)?

Between 2008 and 2011, the decrease of GT on the two fleet segments covered by scrapping scheme was 1,406 GT on Baltic trawlers and 1,886 GT on long distance vessels. The GT scrapped under EFF were respectively 1,644 and 718, thus scrapping scheme played an important role in the reduction of the capacity.

According to vessel owner survey (5 answers of owners who scrapped their vessel with subsidy):

• two owners indicate they would have continued fishing without cessation funding but didn’t know for how long;

• two owners would have sold the vessel and kept the fishing entitlements, • the last owner didn’t indicate what he would have done.

This suggests that fleet capacity would have not decreased as fast without subsidy. Because of the influence of USSR rule, the Estonian fleet was considered, by National Authority and professional organisations, to be inefficient before joining the EU. The Estonian system has allowed the trawler segment to be highly restructured in the last decade.

5.2.3 To what extent have permanent cessation measures contributed to the modernisation of the Estonian fishing fleet?

The Estonian system has allowed the trawler segment to be highly restructured in the last decade. Scrapping schemes contributed to the fleet modernisation thanks to the re-investment of the subsidy for vessel owners with more than one vessel.

Scrapping measure allowed the trawler segment to be largely restructured. At present, the fleet is considered to be profitable from an economical point of view. According to the professional organisation, without the scrapping scheme there would be more vessels, with lower levels of catches and turnover.

5.2.4 To what extent have temporary cessation measures led to temporary drops in fishing activity?

Not applicable in Estonia

5.2.5 To what extent have temporary cessation measures assisted vessel owners to adapt to emergencies and other shifting conditions?



5.2.6 To what extent have temporary cessation measures contributed to the maintenance of jobs in the fishing sector?


5.2.7 Have the effects of permanent and (to a lesser extent) temporary cessation measures contributed to environmental, economic and social sustainability in the Estonian fishing sector?



According to the National Authority, the capacity is now close to being in line with the resource. However, the National Authority, suggests another scrapping round may be needed in order to reach the objectives of maximum sustainable yield (MSY).

5.3 Efficiency

5.3.1 Have the effects of permanent and temporary cessation measures been achieved at a reasonable cost? Could similar effects be achieved in a more cost effective way?

Under EFF, the implementation of scrapping schemes is based on call for tenders. A maximum amount of € / GT is defined (see table 12 below).

Maximum €/GT for scrapping subsidy under the EFF

Fishing vessel category according to gross tonnage (GT) Euros

0<10 11,000/GT + 2,000

10<25 5,000/GT + 62,000

25<100 4,200/GT + 82,000

100<300 2,700/GT + 232,000

300<500 2,200/GT + 382,000

500 and up 1,200/GT + 882,000

Source: Estonian operational programme of the EFF

Each tenderer can ask for a lower €/GT. All applications are ranked in function of the efficiency (assessed through the value of premium asked per GT), from the lowest €/GT requested (the most efficient) to the highest €/GT requested (the least efficient). In case of over-subscription, applications ranked last would be rejected. In fact, all applications in compliance with the established rules (number of active days) were accepted.


According to vessel owners survey, the amount of the subsidy for scrapping was considered to be the same as the market price of the boat.

According to National Associations, the maximum amount of the subsidy was considered attractive for trawlers compared to the value of vessels on the second-hand market. This was not the case for long distance vessels; the market value (about 20 M€ for A vessel on the second hand market) was higher than the value of the subsidy, notably because of the value of the processing equipment on board.

According to National Associations, scrapping without subsidy had been done when the application didn’t match with the regulation criteria or in the case of selling individual quota.

5.3.2 Are the procedures, processes and rules of the cessation measures conducive to enabling Member States to fulfil their respective roles cost effectively?

No specific problem has been indicated by National Authorities and Professional Organisation on this topic.

5.4 Coherence

5.4.1 To what extent do the cessation measures complement other initiatives at EU and national level? Are there any areas of duplication that could be avoided? Could similar initiatives be expected by the Member States or other actors without EU support?

The different schemes have been used with coherence to reduce the number of vessels and to increase profitability of the remaining ones:

• individual quotas based on historical records pushed fishermen to adapt their means of productions (and costs) to their fishing opportunities, thus they increased their efficiency,

• the scrapping scheme provided an opportunity for fishermen to leave the sector when profitability was not sufficient (which was partly linked to the amount of quota),

• implementation of controls to ensure that different rules were respected.

If a scrapped vessel has already benefited from the modernisation measure, the first subsidy has to be reimbursed (on a pro rata basis).

5.5 Acceptability

5.5.1 What are managing authorities’ views of the current system for cessation measures in relation to other potential ways to reduce fishing capacity?

The scrapping scheme is perceived positively by Managing Authority as a method to reduce the fleet capacity, which in their view remained excessive. Overall fishing capacity was reduced through a combination of fleet reduction, quota reduction and other controls. As mentioned previously, scrapping scheme has been a major tool in Estonia to decrease the fleet capacity.

5.5.2 To what extent do vessel owners rely on the current level of funding for cessation measures and are there other interventions that could fulfil a similar role?

Scrapping scheme is perceived positively by Managing Authority and National Organisations, notably in combination with quotas and controls. Scrapping scheme is also perceived positively by vessel owners.


6 Summary and conclusions

6.1 Trends in fleet structure & capacity

Evolution of the Estonian fleet 2008-2011:

• -4.5% of vessels, • -19.6% of GT • -15.1% of KW

6.2 Extent of cessation measures contribution

• 8,239,515 € spent on scrapping during EFF • Capacity removed on EFF period: 1,644 GT for Baltic trawlers and 718 GT for long distance

vessels.

6.3 Opinions on cessation measures



6.4 Vessel owner Survey findings

• 9 interviews performed : o 5 vessel owners scrapped vessels with subsidy o 1 vessel owner scrapped a vessel without subsidy o 3 vessel owners did not scrapped vessel

• Vessel owners scrapped their boats because of limited opportunities of fishing • The vessels selected for scrapping were the most technically out-dated

6.5 Evaluation conclusions

• Relevance: a survey by the Marine Institute was undertaken before each scrapping round to ensure scrapping schemes were relevant by focusing on the fleet segment with the most impact on the resource.. The coastal coastal fishery (using static gear) has not been targeted in a scrapping scheme due to this perceived lack of a connection between fleet capacity and fishing capacity.

• Effectiveness: the capacity of the fleet had been largely decreased during the previous decade (partly without subsidies when the vessels didn’t match the regulatory criteria); the combination of quota, scrapping and controls is considered to have been effective.

• Efficiency: the implementation is considered to have been efficient under EFF, the scrapping scheme was based on a call for tenders with the selection of the application asking for the less €/GT, even if no application was rejected

• Coherence: scrapping has been used in coherence with other measures, mainly the introduction of individual transferable quotas and effort controls.

• Acceptability: National Authority and Professional Organisations perceived the implementation of scrapping positively.


6.6 Conclusions for the counterfactual analysis

In the counterfactual analysis, we took into account that targeted species of Baltic trawlers and long distance vessels are covered by quotas (Baltic herring, sprat, cod, Northern prawn, Redfish and Greenland halibut) and that quotas regulate the fishing pressure on the stocks more than the fleet capacity. However, a fleet capacity larger than fish opportunities may lead to shifting of fishing effort on to other species, illegal fishing and a lack of competitiveness of fishing companies.

In the framework of vessel owners survey, four vessel owners (all operating on Baltic trawler fleet segment) who scrapped their boat with subsidy indicated what they would have done so without support:

• Two owners indicated they would have continued fishing but didn’t know for how long

Considering the answer of these vessel owners, the capacity would have decreased more slowly without subsidy, even if the level of catches would have remained the same because of quotas. Furthermore, as vessel owners indicated that they selected for scrapping the vessels which were the most outdated, inefficient vessels would have remained in activity. This would have had direct effects on the competitiveness of the companies.

• Two owners would have sold the vessel and kept the fishing entitlements for other vessels

For these vessel owners, there would have been minor changes compared to the present situation. However, without support, the vessels that were scrapped with subsidy would have stayed in the fleet and the capacity would not have decreased.

The evolution of catches following the scrapping varies among vessel owners: it dropped for two of them, remained stable for one and increased for another one. Thus, there is no direct link between capacity and level of catches. In Estonia, most of vessel owners own more than one vessel and scrapping allows them to increase the efficiency of the fleet (and competitiveness of the sector) with a concentration of the catches on a smaller number of vessels.

6.7 Recommendations

There are three fleet segments in Estonia. Scrapping schemes have mainly focused on Baltic trawlers and to a lesser extent on long distance vessels. The selection of the fleet segments was based on a survey on overcapacity by Estonian Marine Institute. The coastal fishery has not been the subject of scrapping, as the Institute reasoned that there was no link between capacity and catches because of the use of passive gears.

The Baltic trawler segment has been highly restructured in the last decade and scrapping schemes played an important role in this. The number of vessels decreased substantially and the remaining capacity is considered appropriate and companies are profitable. According to the National Authority, another scrapping round may be needed for this segment to be able to transition towards with MSY. Furthermore, the efficiency of the scheme increased thanks to a system of call for tenders.

Thus, scrapping schemes should be used in Estonia:

• to a limited extent, since capacity is almost in line with MSY fishing level, • with specific criteria to target fleet segments which have the most impact on resource, • with a call for tender system which increases efficiency.


APPENDIX 1: References

Operational programme of the European Fisheries Fund 2007-2013 - Ministry of Agriculture of Estonia

The Annual Report on the Fishing Fleet of Estonia 2008 - Ministry of Agriculture of Estonia




European Commission - Fleet Register on internet - Entry-Exit Regime - Available from URL:: http://ec.europa.eu/fisheries/fleet/index.cfm?method=RES1.Stat&country=EST&graph_type=line (accessed on the 24/07/2013)

JRC, 2004, The 2011 Annual Economic Report on the EU Fishing Fleet (STECF-11-16)

retrospective evaluation of scrapping and temporary ... · source: annual fleet report 2011...

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