Sunday, 01 March 2015 00:00

Russian sanctions inspire search for new markets

The fisheries sector in Estonia comprises marine and inland fisheries, freshwater aquaculture, and a processing industry. The marine fishery is further subdivided into the catches from the high seas, and the Baltic Sea. The former are sourced in the North-West Atlantic (NAFO), the North-East Atlantic (NEAFC), and Svalbard. The Baltic Sea fishery has two main components, a coastal fishery and an offshore pelagic fishery. In terms of volumes of fish caught, around two thirds of the total Estonian landings come from the Baltic Sea pelagic fishery, where the main species are Baltic herring and sprat. This is followed by the distant water landings, the coastal fishery in the Baltic Sea, and finally the inland fishery.

Baltic herring and sprat are Estonia’s main fisheries in terms of volumes. Far more is caught than can be consumed at home so much of the catch is exported.

The distant water fleet has gradually reduced in size over the years from 10 vessels in 2005 with a total gross tonnage of 11.5 thousand tonnes to just 5 vessels in 2013 with a gross tonnage of 7,700 tonnes. Of the five vessels, three target primarily northern prawn (Pandalus borealis) but also catch fish, while the other two exclusively catch fish. The vessels are owned by three companies. In the Svalbard area the shrimp fishery is managed by limiting the number of fishing days but in NAFO and NEAFC areas the main fisheries are limited by the tonnage that may be caught. In the NAFO area Estonian quotas have hardly changed over the five years to 2015 at about 3,000 tonnes.


Redfish species dominate Estonian NAFO quotas

In 2015 too quotas have been maintained at the same level. The biggest quotas are for redfish species which at 2,085 tonnes in 2015 amount to 70% of the Estonian quotas in NAFO. In the NAFO convention area several zones have been identified as particularly vulnerable to gears with bottom contact and are closed to bottom fishing activities. These restrictions have been put in place mainly to protect seamounts, sponges, and sea pens (colonies of small polyps). Over the years the closed areas have been extended, and in addition their number has increased, so that today (2015) there are 19 such areas. These closures are due to be reviewed in 2016. The most important quotas in the NAFO area for Estonia are those for redfish species which in 2015 amounted to over 2,000 tonnes, or 70% of the total. Northern prawn (Pandalus borealis) has in the past been the most important species, and management of this fishery in the NAFO 3M fishing area was by the number of fishing days and in the NAFO 3L fishing area by quotas. Both stocks are in poor shape however and are not expected to improve in the near future. As a result, in 2015 Estonia has no quota in NAFO 3L for this species, down from 96 tonnes in 2013, and has no allocation of fishing days in NAFO 3M, which has been the case since 2011. In the NEAFC convention area Estonian quotas were 459 tonnes in 2014 a 25% increase over 2013. The increase was due primarily to an increase in the mackerel quota to 262 tonnes. The most important species are Atlantic mackerel and redfish species, which together accounted for over 75% of the quota in 2014.

Source: Ministry of Agriculture, Estonia
Estonian high seas catches, tonnes   
  2011 2012 2013 2014
North-West Atlantic (NAFO) 7,146 3,444 4,533 3,387
North-East Atlantic (NEAFC and
5,318 5,340 7,422 7,463
South-West Atlantic 2,126 3,206 0 0
Total 14,590 11,990 11,956 10,850

Total distant-water catches in 2014 fell by about 10% compared to 2013 to around 11,000 tonnes. For Estonian deep water catches the most important species in terms of volumes is the northern prawn (Pandalus borealis) followed by redfish species (Sebastes spp.) and Greenland halibut (Reinhardtius hippoglossoides). Small quantities of several other species are also caught by the fleet. In general as shrimp quotas have shrunk to nothing in the NAFO area, fishers are turning their attention to the Barents Sea where the Estonia North East Arctic cold water prawn fishery was certified to the Marine Stewardship Council sustainability standard in November 2013.


Herring and sprat catches in the Baltic Sea decline

The Baltic Sea fishery is divided into a coastal fishery and an offshore trawl fishery. The trawl fishery targets Baltic herring, sprat, and cod, of which sprat and Baltic herring are the most significant in terms of volume. Baltic herring (Clupea harengus membras L.) is a subspecies of Atlantic herring inhabiting the Baltic Sea and forming local populations. Herring can be either spring-spawning or autumn-spawning, though the numbers of the latter are less than 5% in all parts of the Baltic Sea. There are four herring stocks in the Baltic of which two are of interest to Estonia. These are the Central Baltic herring stock and the Gulf of Riga stock. In 2015 Estonia has herring quota of 18,363 tonnes in the Central Baltic and a further 17,908 tonnes in the Gulf of Riga. Between 2009 and 2014 Estonian catches of herring in the Central Baltic have fallen by 35% from 20,000 tonnes to 13,000 tonnes, while in the Gulf of Riga Estonia’s catches over the same period fell from 17,000 tonnes to 11,000 tonnes. In 2014 Estonia landed 40% of the catch while Latvia landed the remainder. In the Gulf of Riga herring is fished only by Estonian and Latvian fishermen.

Baltic herring and sprat frozen into blocks is an important export item from Estonia to countries in the east including Ukraine, Russia, and Belarus. Currency depreciation in the region and the tensions with Russia have affected supplies to the area.

Unlike Baltic Sea herring, Baltic Sea sprat is considered a single stock throughout the Baltic Sea. In 2015 Estonia has a quota of 25,000 tonnes of sprat or about 11.5% of the TAC. Poland (30%), Sweden (19%), and Latvia (14%) are the countries with the biggest shares of the 214,000 tonne TAC. Between 2008 and 2013 total catches of sprat in the Baltic Sea have declined from 381,000 tonnes to 272,000 tonnes though the catch in 2013 represented an 18% increase compared to the year before. Sprat abundance is linked to that of cod its main natural enemy so that if cod is abundant there will be fewer sprat and vice versa. Estonia also has a small quota of cod in the Eastern Baltic, which in 2015 is 1,150 tonnes or 2% of the TAC. Estonian catches of cod in 2013 amounted to 250 tonnes, an 11-year low, out of a total of 31,400 tonnes.

Among the most contentious reforms of the Common Fisheries Policy was the introduction of a discard ban. The idea behind landing all fish that is caught is to encourage fishermen to use more selective gear that would only catch the targeted species. The ban came into force at the beginning of 2015 and also applies to the Estonian mixed herring and sprat fishery as well to the cod and salmon fishery. The mixed herring and sprat fishery and the cod fishery are by and large clean, says Ain Soome from the Ministry of Agriculture, without any significant bycatch of other species. Salmon is mainly caught as a bycatch in coastal fishery. Estonia, even before the discard ban was imposed, had a regulation forbidding the discard of fish that was dead, so Mr Soome feels that for Estonian fishers the discard ban will not make a big difference.

Ain Soome, Head of Fishery Economics Department, Ministry of Agriculture, Estonia
Hannes Ulmas, Head of the Market Regulation and Trade Bureau, Department of Fisheries Economics, Ministry of Agriculture of Estonia

Estonian fishing companies buy vessels in neighbouring states

The Estonian trawling fleet comprises 36 vessels that catch primarily sprat and herring but also small volumes of other species. The number of vessels has declined steadily since 2008 when the fleet had 64 vessels. The vessels target sprat, herring, smelt and cod, of which the volumes of sprat are the biggest. Estonian companies have also been investing in vessels of other Member States in the Baltic Sea region, says Ain Soome and some catches of those vessels is landed in Estonia. The companies behind the Baltic Sea trawling fleet are grouped into three producer organisations, the Estonian Trawling Association based in Tallinn with 5 members, the Estonian Fishing Association PO in Audru with 6 members, and the Estonian Commercial Fishermen Association in Haapsalu with 5 members. Together they represent more than 90% of the Estonian fishing quotas for sprat and herring. All the three POs have processing facilities where the sprat and herring can be graded and frozen into blocks mainly for export markets in the east, Russia, Ukraine, Belarus, etc., or salted and marinated. Since already over 90% of the Estonian quotas for herring and sprat are covered by the POs, the only way to increase the volume of fish to Estonia, says Hannes Ulmas from the Ministry of Agriculture, is by having transnational POs, that have members from other member states, for example Finland or Lithuania, and, crucially, that they are represented in the annual production and marketing plans that the POs are expected to draw up.

Intervention mechanisms that support POs to store fish for human consumption, when, for instance, market conditions push prices below a threshold determined by national authorities in consultation with the POs, will be phased out at the end of 2018. Activities will then be fully implemented through the production and marketing plans. In Estonia there was a strong feeling among the authorities that public money should be available in case of crises in third countries, so that producers had a safety net if their market suddenly disappeared. We wanted a support level of 5% of the annual turnover of the PO for this storage mechanism, says Mr Soome, but finally it was decided to keep the level at 2%. The storage mechanism was particularly relevant with respect to the Russian market, which closed suddenly at the beginning of 2014, when restrictions were imposed on exports to countries of the Customs Union. These were then extended later in August 2014 as part of the counter sanctions imposed by Russia, a big importer of Estonian block-frozen pelagics, against the EU. Estonian processors have been exploring possibilities in other markets, but this is a long process and when a market disappears almost overnight then the storage mechanism is a measure that can be implemented very rapidly in support of the affected producers.


EFF brought several benefits to Estonian fisheries

Estonia is now in the process of finalising its operational programme and Mr Soome hopes that by the second half of the year it will be possible to open support measures foreseen in the European Maritime and Fisheries Fund (EMFF), the successor to the European Fisheries Fund (EFF). As the EFF winds down he sees the establishment of POs in general as one of its more notable successes. Another benefit has been the scrapping mechanism, which allowed Estonia to relatively quickly bring capacity in line with the resource. This probably would have happened in any case with the move to individually traded quotas (ITQs), but the support for scrapping enabled the fleet to be balanced with available fish resources faster. Mr Ulmas adds that the creation of the fisheries local action groups was another significant feature of the EFF as they contributed to local development along the coast. The EFF has also been used to support the interaction between scientists and fishermen with the creation of a Fisheries Information Centre. This centre can carry out research and develop projects that will add to knowledge of fisheries and ultimately benefit the fisherman. The centre has also organised several information meetings and meetings with certification bodies to discuss the possibility of having perch and pike-perch fisheries certified to the Marine Stewardship Council standard.


Fyke nets being landed in Lake Peipsi, the most important body of water for the inland fishery of perch and pike-perch.

Herring and perch are the most important coastal fishery species

The coastal fishery employs about 2,000 people a figure that has increased steadily since 2008, when it was about 1,500, and has some 1,470 vessels up to 12 m in length. The impact of the financial and economic crisis contributed to the increase in the number of coastal fishers, as the contracting economy pushed people into alternate occupations. However, only about 10% of these are full time coastal fishermen. The coastal fishery catches a huge variety of species, but only three or four of these, herring, perch, smelt, and pike-perch are important for the value they generate. The coastal fishery in the Baltic Sea is split between the Gulf of Finland, Gulf of Riga, Pärnu Bay, the Väinameri Sea and the Central Baltic area around the Estonian islands of Saaremaa and Hiiumaa. The fishing gear for the coastal fishery is mainly trap nets and gill nets, though in some areas longlines and seines are also used. Pärnu Bay is the most important area for the coastal fishery in terms of catch volumes and value, with herring and perch dominating the catches. Saaremaa Island has the highest number of coastal fishermen.

Many coastal fishermen sell their products as fresh fish and the administration would like to see a greater focus on value addition amongst the fishermen themselves as this will lead to higher incomes. This could, for example, be smoking, filleting, or marinating, but it could also be that fishermen get together and have a common processing facility, and joint marketing of the product. This would suggest that coastal fishermen should get together and form POs, but as Mr Ulmas points out, forming a PO also includes certain responsibilities. Some of these can be demanding such as the creation of production and marketing plans and the question is whether coastal fishermen can (or want to) meet all the requirements for a producer organisation. It may be more feasible for them to act collectively in these areas, particularly as the volumes are not very large. We are encouraging the fishermen, not necessarily to form a PO, says Ain Soome, but to come together and find joint solutions, such as a common processing plant, by offering them a higher rate of support than if they were to do it alone.


Total catch from the Lakes Peipsi, Lämni, and Võrtsjärv

First-sale prices of pike-perch, perch fall in 2014

Estonia’s inland fisheries are based primarily on the fisheries in the two lakes, Peipsi and Võrtsjärv. The overwhelming majority of the freshwater catch is from Lake Peipsi, and the adjoining body of water, Lake Lämmi, where catch volumes in 2014 were about 2,500 tonnes, a figure that has stayed more or less constant since 2009. Averaging the catch of the five years to 2014 by species shows that perch is about 40% of the volume followed by pike-perch (25%), bream (22%), and roach (8%). Trap nets, gill nets and Danish seines are the main gears used by the approximately 370 fishers, who use the lake. The fishing season is from January to October, though there are restrictions placed on the use of certain gears in some months. The highest catches are typically in September. The value of the catch in 2014 dropped by nearly a quarter to EUR3.8m from EUR5.3m in 2012, due to a fall in the average first-sale price of the most valuable species, pike-perch and perch. The lakes lie on the Estonian Russian border and are shared by both countries. Fisheries management on the lakes is decided at meetings of the Estonian-Russian Fishing Commission, where quotas for the different species are set. In 2014 quota uptake on the Estonian side of the three most important species perch, pike-perch, and bream, was 87, 80, and 74% respectively. Fisheries in Lake Peipsi are regulated both on inputs (number of gears, fishing period, mesh size, etc.) as well as on outputs (quotas), which are determined by the size and composition of fish stocks.

Catches in Lake Võrtsjärv amounted to 238 tonnes in 2014, a year-on-year decrease of 10%. The proportion of bream, pike-perch and pike has increased from about a third of the total catch in 2002 to 86% in 2014. The main fishing gears used are trap nets, which were responsible for 83% of the total catch, and gill nets. The most valuable fish in the lake in terms of its unit price is eel. However, catches of eel after declining by a third in 2009 to 13.6 tonnes were unchanged in 2014 at 13.3 tonnes. This drop is mainly due to a less vigorous restocking effort since the early 2000s, when the price of glass eels increased drastically. Pre-grown eels, and elvers are introduced each year into the lake though the number has been falling. Despite this the stock of eel together with stocks of most other species are assessed as being in a moderately good state in 2015 with the exception of perch, which is low. The pike-perch stock is assessed as high.


Ambitions to increase supply of farmed fish to the domestic market

The aquaculture sector in Estonia produces several species (eel, crayfish, carp, rainbow trout, surgeon, Arctic char), but the volumes though gradually increasing are still modest at less than 750 tonnes. Although this production represents an increase, some parts of the Estonian administration were hoping that there would be a more significant rise in production as several investments in technology, mainly in recirculation systems, have been made with support from EU funds. However, problems, such as disease, may have held back the increase in volumes. In the new (2014-2020) period the plan is not to support investments in capacity, but to support investments in quality and energy efficiency. Rainbow trout dominated farmed output accounting for almost two thirds, while the rest was made up of other species. However, in past years rainbow trout has accounted for four fifths of the total farmed production, so the overall increase in production can mainly be attributed to an increase in the volumes of other species produced.

Some fin fish farmers have joined together in a producer’s organisation that is experimenting with different products for the domestic market.

Altogether some 50 companies are involved in fish farming about half culturing finfish and the rest crayfish. Rainbow trout is grown both in raceways and more recently in recirculation systems. The Estonian aquaculture strategy 2014-2020 has a vision for the sector to build up a leading position on the domestic market and to successfully export species that suit local farming condition and have a high demand on export markets. Some of the fish farming companies have joined together to form a producer organisation (PO), Ecofarm, that will process, market, and sell the fish of its members, as well as develop new products. The products will be sold on the domestic market and will be accompanied by dissemination campaigns that inform consumers of the existence and benefits, such as extreme freshness, of Estonian farmed fish. While a PO can take care of the sales and marketing of the fish, what is interesting for buyers is the volumes that the PO can deliver. Increasing this, says Hannes Ulmas, is possible only if existing members increase their production or if the PO gains new members. According to Ain Soome it is probably more realistic for a PO to gain new members. For the individual farmer an increase in production is often tied to getting credit, which is not easy in the current economic climate, or it could depend on better knowledge about and management of the recirculation system, which is a sophisticated technology that calls for knowhow, training, and experience before it can be made to perform optimally around the year. In general though it would be better if more farms joined the PO, says Mr Soome, as having a common processing facility with high capacity is more efficient than each individual farmer having his or her own small facility. Also, the PO can probably get better prices for the production as well as better prices for inputs if it is dealing in large volumes. The government therefore supports the development of POs, in Ecofarm’s case, by supporting the processing plant with EU funds. The authorities would also consider further support if the PO produces a production and marketing plan for the year.

In general the administration in Estonia is keen to phase out support altogether, but is well aware that this will not work as long as some countries are keeping them. We would rather see a more competitive sector that can manage without support or at least make it more market based, says Mr Soome, but these conditions would have to be the same both across the EU and within countries and sectors.