The European Commission has introduced a new reform package to fisheries management in Europe. The plans are ambitious and the new tone set in the reform package is important. But there is an important element missing. Even though the EU is duplicating some of the core ideas behind the market principles in the Icelandic fisheries management structure such as the transferable quota system, more needs to be done.
Iceland was one of the first to adopt the individual transferable harvesting quotas (ITQ) system in its fisheries and has significant experience of the system’s impact. The EU reforms emphasize a science-based fisheries management system, transferable catch shares and better governance. The mission of the EU is bold; to make fisheries profitable.
Mentioning fisheries to Europeans seldom creates excitement. Europe is somehow embarrassed about its fisheries. This is even harder for Icelanders to understand as Cod is still our pride. There needs to be work done regarding the image of the European seafood industry. The image of fisheries in the EU is awful; endemic overfishing, inefficiency, government support and rent seeking. Changing this image needs to be an important part of the reform package if reforms are to be successful.
The Icelandic Experience: Lessons Learned
The EU can learn from Iceland in this respect. Iceland takes great pride in its fisheries, being a seafood nation which is slowly changing a natural resource based industry into a knowledge based industry.
The Icelandic seafood sector is profitable and large Icelandic firms have extended their activities into various markets around the globe. Iceland has never considered its fisheries business as a „welfare package“ or a „problem“ as many European countries and the European Union have treated this sector – with bad management and significant government support. Due to the importance of seafood in the Icelandic economy, Icelanders have no choice but to manage it as a profitable and competitive sector based on market principles. This has probably had more influence on the development of the Icelandic seafood sector than anything else.
The EU can learn from the Icelandic experience - how to develop a seafood industry which uses new innovation to manage fisheries in a sustainable way. New technologies can also be harnessed to safeguard the environment and use more of the product. The Icelandic seafood industry has developed innovative health-, pharmaceutical- and even fashion products from the wild fish stock.
How Iceland has done it?
In the past fishing was relatively easy. Fish stock resources were fluctuating but rich. The fish was caught and sliced, the best parts sold to the highest bidders and the liver often used for liver oil. The rest of the fish was thrown away. As stocks declined, the EU issued rules which required boats to be tied up for a required number of days and developed a system which obligated fishermen to throw perfectly good fish over board. Icelanders took a different route.
The quota system in Iceland is based on transferable quotas. The quotas represent shares in the national total allowable catch. They are permanent, perfectly divisible and freely transferable. The marketable quota system in Iceland introduced a more efficient system where the quota trading became an important vehicle to create more value from each fish, not least since this resource was becoming scarce. This system soon led to a dynamic relationship between innovators and fishermen.
These relations soon led to innovative technologies which increased the efficiency of the fisheries themselves, in the processing of the fish and in marketing and sales. When it came to fish processing, various new ideas were developed in close cooperation between fishermen and technicians. These were ideas concerning how to process the fish efficiently, how to preserve the fish and how to use various by-products from the fish such as enzymes, liver oil, etc. There were also developments in fish packaging. These new innovations in seafood have been realised in over 70 technology manufacturers in the seafood industry in Iceland which all provide new tech products to the seafood industry around the world. Among those firms are some of the global leaders in high tech equipment for the seafood industry such as Marel and Hampiðjan.
There were also various innovations in fish surveys, fishing gear equipment, boat design and green technology on board ships. Recently, this development has also been realised in a number of small biotechnology firms in Iceland, which have ambitious plans to further develop fish products into proteins, health products and pharmaceuticals.
The criteria for success relies on a certain mindset; a mindset which is willing to test new avenues in fisheries and fish processing, which sees fisheries as a business and a fisheries society which prides itself on being excellent in everything regarding seafood. There are four criteria for increasing the value and the image of the seafood industry using the Icelandic experience that should be applied to the current reform package being discussed by the EU.
1. Create a market of fishing quotas
This is the step already taken in the EU reform package. The Icelandic quota fisheries management system, established in 1990, has become well known globally for its efficiency and it has been shown to increase profitability and lead to sustainable fisheries management which is now showing positive results as the cod stock for instance is strengthening in our seas different from many other regions. Fisheries are a source of strength for Icelandic society and the economy. The prerequisite for this strength is a profitable industry which encourages clever seafood firms to expand and innovate.
2. Increase the awareness of the „whole“ industry
The EU needs to present a fuller picture of the marine industry than it has done in the past. People need to make a connection between a strong seafood sector and potential developments of various small firms in seafood technology, green technology, super foods, pharmaceuticals, etc. Various countries have been working actively on presenting a clearer picture of the marine sector and it’s wide ranging activities from fisheries to seabed research, green technology and health products from the sea. Ireland has announced its Ocean Smart programme, Norway has various clusters which have been successful such as Omegaland and New Foundland/Labrador has shown considerable growth in its marine high tech sector after initiating the Ocean‘s Advance cluster project. The Iceland Ocean Cluster is also a similar initiative which has increased awareness of the marine sector as a whole and how different sectors within the marine industry are interconnected.
3. Increase R&D
Nations rich in natural resources tend to be volume driven and suffer from resource blindness. This has also been partly the case in Iceland where a lack of private investment and government support for new industries in the marine sector has been evident. This is slowly changing due to the emergence of large high tech global firms focused on research and development, many of which originated in Iceland. The EU should concentrate on creating incentives and challenge seafood firms to invest in new technologies. This should be aided by concrete measures that support R&D institutes and educational training focused on the sea. The key to a successful R&D programme in the marine sector is to make the seafood firms themselves profitable and willing to invest. Better awareness raising of ocean opportunities among R&D funds will also help in this respect.
4. Get young people – and financiers - involved
There needs to be a programme to encourage young people to get more involved with the ocean sector. Research institutes, private high tech firms and universities should be encouraged to bring young researchers into ocean research and maritime entrepreneurship. We need also bankers and financiers interested in the ocean sector. Bankers have for long treated the seafood industry similar to the EU, as a periphery industry. A part of the EU reforms should be to educate the financial system about the new opportunities in the ocean sector.
The paradigm shift
Somehow, Iceland is one of the few countries in the world which prides itself on being a seafood nation. While fisheries is at best a „subsidized semi-business“ in many countries and awkwardness for others, Icelanders pride themselves on their fisheries heritage and the continued success of Icelandic seafood being a profitable business which is continuously developing. Developed seafood nations have a long way to go to develop further the ocean sector and increase the awareness of the opportunities in ocean innovation. The EU fisheries reforms are clearly a step forward but a comprehensive plan to change the image of the ocean sector by both increasing the awareness of the ocean opportunities and by investing in innovation can lead to a paradigm shift – greatly needed in the EU.