Report no. 51 to the Storting (1997-1998)

Perspectives on the development of the Norwegian fisheries industry

THE ROYAL NORWEGIAN MINISTRY OF FISHERIES

Report no. 51 to the Storting

(1997–1998)

Perspectives on the development of the Norwegian fisheries industry

Recommendation of 18 June 1998 by the Ministry of Fisheries, adopted on the same day by the Council of State.

1 INTRODUCTION AND SUMMARY

The fisheries industry in Norway has developed encouragingly over the past few years. The export value of Norwegian fish has almost doubled over the past decade, while trade subsidies have been reduced and in many parts of the fishing fleet profitability has improved, at the same time as the industry has succeeded in orientating output towards the market to a greater extent. As far as natural resources are concerned, the situation of most major stocks has been good in recent years. The aquaculture industry has increased output volumes several times over in the course of 10 years, and has now affirmed its position as an internationally competitive industry with a huge potential.

This report provides a basis for fisheries policy founded on a value chain. Improvements to the value chain, structural issues, the distribution and monitoring of resources, and research and development are all discussed in the light of the market challenges facing the industry. The main emphasis of the report is sea fisheries policy, although the discussion of market-related issues, research and skills also touches on the fish farming industry.

2 PARAMETERS AND OBJECTIVES FOR FISHERIES POLICY

The Norwegian fisheries industry is heavily dependent on its international environment, not least since most of our fish stocks are shared with other countries, calling for close cooperation on the management of resources. In addition, most of the fish landed in Norway is exported. Consequently, developments in various markets and in international trade policy have a direct effect on us.

The fisheries policy chosen must aim for commercially viable development of the fisheries industry. Sustainable management of resources is absolutely essential if we are to achieve this. Through market orientation and increased added value, the industry must help create and sustain stable employment opportunities and settlement in coastal areas.

This report will provide guidelines for all the relevant authorities involved in Norwegian fisheries policy over the next few years in terms of formulating regulations and applying economic policy instruments.

3 MARKET CHALLENGE

Norwegian fish products come from clean waters with a sound environmental bill of health. This, coupled with the fact that Norwegian seafood consists of tasty and healthy natural products, is an advantageous starting point for marketing.

Trade in foodstuffs is one of the most highly protectionist areas of world trade. Efforts to reduce trade barriers which restrict the export of Norwegian seafoods must therefore be intensified. Through the WTO, the Norwegian government will do all in its power to draw up international norms which result in predictable conditions for trade and non-discriminatory access to markets.

Since the fisheries industry is an export-oriented industry, it is vital that the Norwegian system for quality control of fish and fish products inspires confidence and complies with quality assurance requirements in our major export markets. There is a clear need for ongoing export drives in new markets in order to spotlight the industry and the Norwegian regulatory and supervisory frameworks at an early stage.

As far as the relationship between trade and environmental issues is concerned, and in particular the labelling of environmentally sound products, our aim is to influence developments in line with Norwegian interests in this sphere. The Norwegian authorities are working closely with the other Nordic countries and the EU with the aim of ensuring that the authorities and the industry have a say in these developments.

The Ministry of Fisheries sees it as especially important to award top priority to market research, product development and processing technology and to establish the parameters for an efficient infrastructure.

4 THE VALUE CHAIN

The market holds the key to the industry’s profitability. All stages of the industry therefore depend on efforts throughout the entire value chain being focused on market opportunities and demands. The Norwegian fisheries industry has an advantage in the form of access to large quantities of high-quality fresh fish. The high price potential of these natural products provides a basis for increased added value.

In recent years, the industry has become subject to new operating conditions. Internationally, cooperation on trade policy has helped dismantle trade barriers and resulted in freer flow of capital. Nationally, export legislation has been amended, the price subsidies for the industry have been removed and the purchaser approval scheme under the Norwegian Act relating to unprocessed fish (Unprocessed Fish Act) has been repealed and replaced by a public registration system.

Market developments demand a greater degree of cooperation between the processing part of the industry and the fishing fleet. Concentration on the consumer market and focus on quality and reliable delivery present major organisational challenges in terms of processing and distribution. In order to be competitive in markets with a high concentration of retail outlets, Norwegian players need to devise forms of cooperation that have a greater impact. The Ministry of Fisheries is committed to policy instruments which promote such cooperation within the industry.

The government recognises the importance to a competitive fisheries industry of a well-oiled primary market for selling fish. The Unprocessed Fish Act lays down the basic parameters for this kind of market. Minimum prices help maintain stability in the unprocessed fish market. The Ministry feels that the current regulations provide ample opportunity for the fishing fleet and processing industry to agree on effective, long-term solutions for primary sale. The Unprocessed Fish Act does not generally prevent enterprises and vessels from entering into long-term supply agreements, but [such agreements] can conflict with certain provisions under the Act. The Ministry sees a need for clarification in these matters, and, as part of a process designed to encourage greater dialogue and cooperation, the Ministry will invite the producer organisations and the Federation of Norwegian Fishing Industry (FNL) to take part in a project whose aim is to consolidate the criteria and regulatory conditions for long-term contracts of this kind.

The number and capacity of so-called purchaser vessels purchasing fish directly from vessels at sea is on the increase. This may compete to some extent with the land-based processing industry's requirement for raw materials. At present the Ministry does not consider it appropriate to implement restrictive measures against these purchaser vessels, but we shall be monitoring the situation, and, should the volume of sales at sea increase, it is conceivable that restrictions on this kind of trading may become necessary. The balance between production at sea and on land must not be skewed towards increased on-board production.

Foreign landings of fish in Norway increased heavily in the 1990s, helping to improve the raw material base for Norwegian fisheries in the pelagic and white fish segments. The large volume of unprocessed fish landed from Russian vessels is due to circumstances which cannot be expected to continue for long. As the Russian fisheries industry undergoes modernisation, Russian vessels will start to land more and more of their catches at Russian ports. This will affect the supply of raw materials to parts of the Norwegian processing industry. This may be offset in part through increased emphasis on aquaculture and production employing alternative raw materials. There may also be possibilities for strengthening ties with the Russian fisheries industry. In this connection, there is a clear need to adapt existing guarantee schemes to enable them to take greater risk. An assessment will be carried out to investigate how public resources can be used to actively encourage expanded cooperation between the national fisheries industries in the Barents Sea region.

Market-based harvesting strategies mean adapting fish catches to the market through a regulatory system. By allowing various fishing activities at different times of year, the authorities seek to spread catches throughout the year, primarily in view of the industry's need for a regular supply of raw materials. Such regulation is also increasingly founded on bio-economic assessments. Demands as to quality and reliability of supply of raw materials increase the need to incorporate marketing considerations in the evaluatory basis for such regulation.

The forecasts for cod stocks in the Barents Sea vary widely. There are several reasons for this, and much can be ascribed to the fact that existing marine fish stock assessment models are not sufficiently reliable. The Institute of Marine Research has therefore been commissioned to develop improved modelling tools, and it is hoped that these will be available for use from 1999. The Ministry of Fisheries will help develop long-term stock management strategies, but cannot allow the objective of stable quotas to take precedence over the need for sustainable management of resources. Quotas lasting for several years are not realistic, given the existing level of knowledge in this field.

From the perspective of players in the fisheries industry, the regulatory framework may often appear to hamper efficient operation and to reduce the potential for profitability. From society’s point of view, however, and seen on a larger time-scale, it is necessary to set parameters for operations in the industry, not least to protect the resource base and to prevent the build-up of excess capacity in the industry. Regulations which lead to loss of operational time, place restrictions on the design of vessels or prescribe the use of certain types of gear should be considered very carefully in terms of overall socio-economic benefit. Management of fishing capacity is an overarching consideration, given the objective of protecting the resource base and ensuring profitability in the industry. The Ministry of Fisheries will continue reviewing the licensing and fleet renewal regulations, with a clear emphasis on aspects such as safety, working environment, crew amenities, efficiency and handling of by-products. It is also necessary to consider whether it is feasible to control on-board production indirectly through vessel design.

At the Third Conference of the Parties (Climate Convention) in Kyoto in December 1997, a protocol was accepted which contained a range of measures for reducing greenhouse gas emissions. Under the terms of the Kyoto Protocol, Norwegian emissions of greenhouse gases are permitted to be 1% higher in the period 2008–2012 than in 1990. Please refer to Report no. 29 to the Storting (1997–1998) concerning Norway's implementation of the Kyoto Protocol, for a discussion of issues related to emissions from the fishing fleet.

The total annual volume of by-products in Norwegian fishing is approximately 600,000 tonnes. These by-products can increase the yield from natural resources and contribute to a sustainable industry. Global forecasts for raw materials indicate that they are becoming increasingly scarce, and it is therefore expected that there will be a growing demand from the Norwegian fish farming industry for the by-products from sea fishing.

5 STRUCTURAL ISSUES

On account of the long Norwegian coastline, the many, scattered coastal communities and the existence of a great many small business enterprises, the fisheries industry has an important socio-economic function along the coast. At the same time, it is essential that the processing industry and fishing fleet are appropriately structured, in order for the processes in the value chain to function as smoothly as possible in relation to the market, thereby resulting in increased added value, stable employment opportunities and a steady population in coastal communities. A key factor in this respect is better organised production at all stages of the industry. The aim is to encourage a structural framework for the industry which enables the players to make the most of market opportunities for increasing the value of unprocessed fish.

Given the limitations imposed by the resource base on the industry's access to raw materials for production, it is essential that the industry's production capacity is tailored to the resources available in order to improve profitability in the processing industry. If businesses coordinate production and warehousing, the joint capacity of the cooperating businesses can be exploited to the full. Caution is needed in allocating public-sector funding to increase production capacity in the fish industry. Public grants for investment will be channelled primarily into upgrading production plants to equip them to meet market demands in respect of plant and products.

The players in the fisheries industry must deal with the trend towards centralisation and the formation of chains in the retail trade by forming cooperative alliances, not least in the area of marketing. Through joint sales organisations, distribution networks and marketing activities, businesses can cut costs significantly. The Ministry is keen to link public-sector funding with an obligation to form such alliances in order to become a more powerful force in the market.

Increasingly the fisheries industry's main customers are foodstore chains, and producers are required to guarantee large quantities and reliable delivery under long-term supply agreements with these customers. For this reason, these businesses are interested in owning part of the fleet, to secure a supply of raw materials. Another factor is that the industry wishes to increase profitability by linking operations to the harvesting of fish resources. The Ministry of Fisheries believes this objective is attainable within the current regulatory framework, through cooperation between the various players in the industry.

Ownership of fishing vessels should generally remain solely in the hands of the fishermen. Confining ownership of vessels to the fishermen is felt to be the surest way of maintaining a diversified fishing fleet with local ownership. The proposals for the amended Act relating to the right to participate in fishing, whaling or sealing suggest that a licence to trade can be granted if the applicant has carried out commercial fishing, whaling or sealing on or with a Norwegian vessel for at least three of the past five years. It is proposed that the existing authority to grant exemption from the activity requirement should continue to apply, and that it should be possible for other parts of the sea fishing fleet to be owned by the fisheries industry where this is deemed necessary to ensure local ownership and a good geographical distribution of commercial fishing licences. The Ministry of Fisheries plans to appoint a committee to draw up proposed amendments to current legislation where this is deemed necessary in order to bring the rules governing ownership of the fishing fleet up to date.

In several categories the age of the all-year-round fleet is extremely advanced. An ageing fleet is inevitably accompanied by problems related to operating costs, complying with environmental requirements, quality of raw material, utilisation of by-products and recruiting new personnel. The rate of renewal of the fleet must be seen in the context of profitability, the vessel owners' risk assessments and the availability of public grants and subsidies. Normally, the single most important prerequisite for ongoing renewal is long-term profitability. The government plans to make provision for the existence of an all-year-round coastal fleet. Newbuilds in the 15–34 m range will be given highest priority, which will do much to ensure a stable supply of raw materials to the fish processing industry.

The authorities are responsible for ensuring that renewal of the fleet does not lead to an increase in catch capacity which conflicts with the objective of profitability, or other objectives of fisheries policy. Growth in capacity increases the industry's total costs and thus undermines the potential for renewal. The central factors for stimulating renewal and capacity control are regulation of access to carry out commercial fishing, regulation of technical parameters for vessels, tax-related measures and measures concerning credit policy and funding. Since the quota base for the various categories is fixed, newly established businesses and vessel renewals lead to reductions in profitability within entire categories, since the total catch capacity in the form of invested capital – and therefore operating costs, etc. – is increased. Regulatory measures to reduce capacity must therefore be considered when paving the way for renewal. Because of the need to limit the growth in capacity, it may be deemed necessary to introduce a licensing system for larger vessels over 28 m fishing with conventional gear.

In order to secure renewal, at the same time as preventing total capacity within the different categories from increasing, it is essential that some existing capacity is withdrawn from fishing. Unit quota schemes make it the responsibility of the individual vessel to adjust catch capacity to the quota allocated, and thus represent a dynamic measure promoting fleet renewal and preventing excess capacity. Unit quota schemes are an effective method of restricting capacity within those categories of the fishing fleet which are regulated by licensing. The Ministry of Fisheries intends to continue the existing unit quota schemes and to assess the viability of such schemes in relation to other categories regulated by licensing.

The Ministry is considering imposing restrictions on fishing within the fishing zone for large vessels with conventional gear, as is already the case for trawl fishing.

To a large extent the catch quotas are what determines the potential profitability of vessels. The question therefore arises of whether newbuilds within high-priority categories should be awarded supplementary quotas, to encourage renewal. If so, a proportion of the total quota must be set aside for allocation to newbuilds, at the expense of others in the same category. A supplementary quota of this nature would have to be for a fixed term, and in order to minimise the impact on other vessels, it would have to be covered by withdrawing quotas. Existing legislation would have to be amended for this type of scheme to come into effect, and, in conjunction with the fisheries industry, the Ministry of Fisheries will consider a pilot project along these lines for coastal fishing vessels in Finnmark.

The normal parameters regulating renewal of vessels are maximum length and gross tonnage. This can have an adverse impact on the design and functional requirements for newbuilds, since shipowners in general will seek to achieve the greatest possible catch capacity within the statutory restrictions on length and gross tonnage. The Ministry will therefore focus its review of the licensing regulations on allowing vessel owners greater flexibility with respect to design – without increasing catch capacity – with the aim of promoting safer, more serviceable vessel design.

The Ministry is in favour of abolishing controls on the rate of renewal through the renewal scheme for vessels of over 34 m which are subject to licensing, while retaining control through public financing schemes. In this way, it will be possible to bring more projects to fruition, provided that project finances are healthy enough to allow completion without public funding.

In the ring-net and trawl fleet, considerable sums have been spent on decommissioning older vessels. Starting in 1998, a decommissioning scheme for the coastal fleet has been introduced under the terms of the Basic Agreement. The aim of the scheme is to bring about renewal in the coastal fleet by taking older vessels out of use permanently. The cost of decommissioning in 1998 amounts to NOK 25 million. The Ministry of Fisheries aims to continue the scheme as a means of renewing the fleet and reducing capacity.

The increasing average age of the fishing fleet means that the fleet is becoming less efficient and increasingly out of date, not least in the sphere of environmental and safety regulations. One of the major reasons for the low rate of renewal may be insufficient capital. Because of the uncertainties surrounding the resource and income base, coupled with the restrictions on ownership of fishing vessels, lending institutions tend to demand particularly high capital adequacy in respect of fishing vessels.

An adequate capital base is a precondition for retaining ownership of the fleet by fishermen in the long term. One possible means of strengthening the capital base could be to alter tax legislation in relation to the fishing fleet, for instance by deferring capital gains tax on the sale of vessels and allowing allocations to reserves earmarked for future investment in newbuilds. Another approach would be to assess whether the schemes for public funding are in line with needs. The government wishes to encourage increased renewal of the fishing fleet, so work will continue on evaluating appropriate measures to this end.

6 DISTRIBUTION AND MONITORING OF RESOURCES

Norway’s fish resources represent a valuable part of the natural basis on which the national economy is based. Sound resource management is a prerequisite for continued growth of wealth creation. Provided that they are regulated solely with a view to economic efficiency in relation to harvesting, the fisheries are capable of providing a substantial yield for the common good. However, this will depend on extensive structural changes to the fleet, with consequences for settlement and employment along the coastline. By means of the regulatory framework, the yield on resources is to be ploughed back into the industry and the communities along the coast. This use of the yield on resources may be regarded as society's investment in the further development of outlying regions.

Since the fish resources are a valuable national asset, distribution of the benefits must necessarily be a matter of political resolution. The current distribution system, which has evolved over a long period, attempts to strike a balance between various factors to achieve holistic solutions, nationally, regionally and at local level.

When reviewing the matter of distribution, it is vital to consider the industry in context, and from the perspective of a value chain. The industry's demand for raw materials is therefore a critical factor in the context of distribution policy. The fishing, processing and exporting stages are all vital to the creation of added value, and it is important not to maximise profitability in one stage of the industry if this is to the detriment of the other stages or at the expense of the overall creation of added value.

The quota allocation system has evolved over time, and currently applies to around 15 fisheries. Several of these fisheries include a mixture of vessel types. The clearest distributional trends in the cod fleets between 1980 and 1998 are that (i) the North Norwegian fleet has reduced its share of the overall volume of cod slightly, and (ii) vessels under 10 m have reduced their share of cod to a significant degree. The main trend within Norwegian spring-spawning herring is that a larger proportion of the catch was caught using purse seine nets and a smaller proportion was caught by the coastal fleet, with less being caught in Northern Norway than in Western Norway.

The reason why the fisheries industry has been concerned to achieve a stable distribution of fishing opportunities between the various groups is in order to ensure corresponding stability in the distribution of income among the various groups. Sharp fluctuations in fish stocks and dramatic rises or drops in prices often distort the assumptions underlying the distribution of assets. The government therefore attempts to base the annual quota allocations on an overall assessment of the harvesting potential and profitability for each category within the fishing fleet.

The current regulations governing cod fisheries distinguish between two types of vessel fishing with conventional gear. The right of group I vessels to participate in commercial fishing is subject to restrictions. In group II, only those with significant income from other types of work, who are thereby disqualified from inclusion on the list of professional fishermen, are excluded from participation. Participation in group II is therefore pretty much open to all, but with limits on the catch, for reasons of resource management and distribution.

The government aims to devise a regulatory policy which takes into account the smallest vessels' need to harvest various species according to natural distribution and availability. Given the potential consequences of amendments to the current regulatory system on smaller vessels of less than 10 m, particularly in Nord-Troms and Finnmark, the Ministry of Fisheries intends to prepare a consultation document inviting organisations in the fisheries industry and other interested parties to participate in a debate on this issue.

It is incumbent upon the authorities of the state under various international law agreements and Article 110 a of the Constitution of the Kingdom of Norway to create conditions enabling the Sami people to preserve and develop their language, culture and way of life. The report from the Sami Fisheries Committee represents a valuable contribution to the formulation of fisheries policy in line with Sami interests. In all policy relating to fisheries in Sami-populated areas, it is essential to take a long-term view, based on dialogue between Sami organisations, organisations in the fisheries industry and the Ministry of Fisheries. An overall national strategy for managing fish resources must provide a basis for holistic resource management. The Ministry of Fisheries wishes to continue cooperating with representatives of Sami interests, not least through the Regulating Council. All policy measures should in general cover the geographical area proposed in the report, to reflect the needs of coastal and fjord fishermen in Sami areas. However, this will not be appropriate in absolutely all areas.

Within the parameters of the existing regulatory system, the Ministry of Fisheries will continue the scheme by which cod quotas are guaranteed for vessels under 11 m in group I and vessels under 10 m in group II in Nord-Troms and Finnmark, the resource situation permitting. This scheme was established in part to reflect fishing interests in Sami coastal and fjord areas. The fisheries authorities are of the opinion that it would be wise to make it easier for people who so wish to combine fishing with other occupations. The maximum permissible income from other employment for those wishing to take part in fishing operations is at present four times the national insurance base rate (4G = NOK 42,500) in municipalities covered by the Sami Development Fund, and three times the national insurance base rate in all other municipalities. The Ministry proposes raising these limits to five times the national insurance base rate in Nord-Troms and Finnmark, and in municipalities in the counties of Troms and Nordland covered wholly or partially by the Sami Development Fund, and to four times the national insurance base rate in the rest of the country.

In order for fishing in fjord areas to be viable, facilities for landing catches need to be secured. The Ministry has contributed towards establishing a support fund for fish depots in Troms and Finnmark. The Ministry also supports coastal and fjord fishermen by means of grants for transporting fish from depots to larger processing plants. In the policy guidelines for the allocation of funds from the Norwegian Business and Regional Development Fund (SND), the county councils and the local councils to fisheries and aquaculture, the Ministry stresses the importance of awarding high priority to joint ventures for setting up fish depots.

The regulatory bodies have ultimate responsibility for ensuring compliance with the regulations on fishing and the sale of fish and fish products. Landing checks will continue to play a central role in the monitoring system, and these checks can be rationalised by disseminating information about fishing, catch reports and landing ports to the fishing fleet. At the same time, there needs to be extensive monitoring of the flow and sale of goods, since this provides an overview of large output volumes. In future, international agreements will commit Norway and other countries to monitoring the way in which all marine resources are used, not just those species which are most commonly used for commercial purposes or those about which we have the most knowledge. Since most of the fish caught by Norway comes from stocks which are shared with other countries, emphasis must be placed on coordination and cooperation between the monitoring activities of the respective countries.

In Proposition no. 58 to the Odelsting (1997–1998) on amendments to Act no. 40 of 3 June 1983 relating to saltwater fishing etc., the Ministry of Fisheries proposed to the Storting that the aforementioned Act should be amended to grant the relevant bodies the authority to instruct fishing vessels to have satellite tracking equipment on board, and to set up a register for use in this connection. It is also proposed that vessels may be directed to have observers on board, with all costs connected with satellite tracking, inspection and observation to be borne by the vessel owners.

7 RESEARCH, DEVELOPMENT AND SKILLS

The Norwegian seas represent an enormous asset in resource and environmental terms, and it is our responsibility to ensure sustainable management of these seas. Knowledge about the fish stocks is a prerequisite for the regulatory bodies to be in a position to offer sound advice, and thus help frame regulatory measures that produce a high yield from the stocks in the long term. There is a real need for more basic and applied research in a number of fields related to fish stocks. The Ministry of Fisheries wishes to stress the importance of international research cooperation.

The total annual allocations from the Ministry's 1998 budget for fisheries research, including aquaculture, amounted to approximately NOK 547 million. The level of publicly funded marine R&D has remained constant over recent years, while there is only a modicum of privately funded R&D in this sphere. The fishing industry, with its many small and medium-sized businesses, is among those sectors in which there is little tradition of R&D-based innovation through private enterprise.

It is the government's intention to maintain marine R&D at a high level over the next few years. The main focus of this research should be on how to achieve increased added value from marine resources. High-priority topics of research will include product and process development, better overall use of raw materials through the development of marine biotechnology and the use of by-products, and the assimilation of market know-how. The principal challenge for research on resources is to reduce the uncertainty in scientific circles concerning the status and development of fish stocks.

The Ministry considers it important that, within the fisheries sector, the Norwegian Business and Regional Development Fund (SND) awards high priority to projects dedicated to innovation and market orientation. Particular emphasis should be placed on encouraging more small and medium-sized units in the fisheries industry to engage in R&D activities.

Given the dependence of the industry on R&D and the lack of private funding for such activities, the Government intends to produce a report on the possibility of levying an R&D duty on the industry. The Ministry of Fisheries feels that this should be conditional on the players in the industry having the final say on what type of research should be funded by a duty of this kind.

In an open economy in which competitiveness can no longer be secured through cheap input factors, knowledge is an important competitive advantage. The challenges associated with skills development and recruitment in the Norwegian fisheries industry must therefore be taken into serious consideration when devising strategies for developing the industry. Given the low birth rate from the late 1970s onwards, recruiting qualified personnel is a major task facing the fisheries industry.

Skills development and network building are crucial if new businesses and employment opportunities for women in the fisheries industry are to be created in outlying regions. If the industry is to attract more women, there needs to be vocational training available for women, tailored to their situation and requirements. Improving the situation of women in the fisheries industry through training courses and network building is a high-priority task.

8 CONSEQUENCES FOR OUTLYING REGIONS

The guidelines which have been drawn up for fisheries policy will strengthen the industry and its significance to regional policy. This will be achieved partly through a continuation of the existing allocation policy, and partly through new guidelines and proposed measures whose aim is to strengthen the fisheries industry as the backbone of the coastal economy. The government wishes to emphasise that the best guarantee for achieving these objectives of regional policy lies in preserving the resource base and making the industry economically viable.

The government's strategy of expanding harbours and infrastructure is aimed at improving logistics and reducing costs associated with distance from the market, thereby making the industry in outlying regions more competitive.

The Ministry of Fisheries will concentrate on renewal of the fishing fleet in its efforts to develop a modern, diverse industry capable of meeting future challenges. It is vital that the industry has the necessary operating conditions, including tax benefits, to allow ongoing renewal of the fishing fleet. In order to fulfil these regional policy objectives, the Ministry feels it is important to create favourable conditions for various combinations of industries along the coast. In terms of regional policy, it is particularly important to develop the industry in such a way that it can offer interesting employment and attract well-qualified personnel at all levels. This is dependent on high priority being given to skills development and further training opportunities for employees.

9 ECONOMIC AND ADMINISTRATIVE CONSEQUENCES

Implementing the measures described in this report will require administrative resources within bodies involved in managing the fisheries industry. In particular, keeping the capacity of the fishing fleet under greater control may create extra work.

There is a tendency towards more stringent regulation of fishing to ensure better resource management, which creates new tasks for the regulatory bodies. This type of regulatory task is likely to increase in future.

Generally speaking, the economic and administrative consequences of amendments to legislation and regulations will be assessed as part of these processes. In the final instance, the requisite allocation of funds for these purposes will be evaluated as part of the annual budget negotiations.

10 TRADE COMMISSION

The Trade Commission has put forward proposals which touch on several aspects of the content of this report, including technical legal clarification of the Act relating to the right to participate in fishing, whaling or sealing, abolishing the catch capacity regulations, extending the unit quota scheme, amending the Unprocessed Fish Act (not least by prohibiting the producer organisations from intervening in long-term supply agreements), extending the right to engage in on-board production of by-products, and changes to the way in which the producer organisations and the authorities monitor the industry. Where these issues are discussed in this report, reference is made to the Commission's proposals. The Commission's report on fisheries will be distributed for consultation at a later date.

Tables and figures

Figure 3.1 Value of Norwegian fish exports by type of fish 1988–1997 (krone at 1997 value)

Source: Norwegian Seafood Export Council

NOK million

Other

Pelagic

Crustaceans

White fish

Salmonids

Figure 3.2 Value of exports to the main markets for Norwegian seafood (krone at 1997 value)

Source: Norwegian Seafood Export Council

JAPAN

DENMARK

FRANCE

UK

GERMANY

SWEDEN

PORTUGAL

RUSSIA

ITALY

BRAZIL

Table 3.1 Direct employment in the fisheries industry. Provisional figures for 1997

Year-round fishermen

Secondary occupation

Fish farming

Fish processing

Total

Change 1985–1997

Source: Directorate of Fisheries and Statistics Norway

Figure 3.3 Trends in industrial subsidies

NOK million

Figure 3.6 Volume and value of Norwegian fisheries catch (1,000 tonnes/krone at 1996 value, 1995–1997 provisional figures)

Source: Directorate of Fisheries and Norwegian Institute of Fisheries and Aquaculture

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