EU proposals for reform of the Common Fisheries Policy - Environment, Food and Rural Affairs Committee Contents


7  Overcapacity

84.  Overcapacity of the EU fishing fleet, itself the result of past EU policies, is recognised as one of the main reasons for the failure of the CFP to ensure sustainable fishing.[185] The last systematic assessment of fleet overcapacity was made in 1995 so it is difficult to assess the true degree of overcapacity.[186] The current CFP requires Member States to take measures to adapt their fleet capacity to the available fishing opportunities and also sets fleet capacity ceilings. However, the European Court of Auditors concluded Member States' measures were not effective and that fleet capacity ceilings were not sufficiently restrictive.[187] Several witnesses recognised the need for more effective and proactive mechanisms to address the problem of overcapacity.[188] However, the Commissioner argued that, in the current economic climate, it was not politically feasible to put stricter targets for fleet capacity reduction in place.[189]

Decommissioning subsidies

85.  Since 1994, the EU has attempted to correct the overcapacity in the fleet by providing compensation for decommissioning vessels ("scrapping subsidies"). Despite spending over €2.73bn on decommissioning, fishing capacity has continued to increase by about 3% per year.[190] The draft regulation on the future European Maritime and Fisheries Fund explicitly removed the possibility of payment for decommissioning vessels, increasing vessel capacity, or temporary cessation of activities.[191] The Commissioner explained to us that "payment for decommissioning is not a solution to our overcapacity problem, so we have to stop it".[192]

86.  We received mixed views on the proposed ending of decommissioning subsidies. The fishing industry were unsurprisingly supportive of decommissioning schemes.[193] The NFFO questioned whether decommissioning schemes were necessary for other market-based capacity reduction schemes to work.[194] The Scottish Cabinet Secretary agreed that decommissioning schemes were a legitimate use of public funds.[195] The Minister implied that, if funding was available, Defra would reinstate their decommissioning schemes.[196] However, some witnesses pointed out that funding for decommissioning could instead be redirected towards 'public goods' such as data collection or employment diversification.[197]

87.  Decommissioning schemes have been unsuccessful thus far in reducing fleet capacity. Given constraints on funding, we do not think that continuing these schemes provides good value for money for the EU. Defra should ensure that measures to increase vessel capacity or to decommission vessels are not eligible for funding under the future European Maritime and Fisheries Fund.

Transferable Fishing Concessions

88.  The Commissioner envisages that transferable fishing concessions (TFCs) will provide a market-based mechanism to reduce fleet capacity without requiring public-funded compensation as the sale of the fishing concession can fund the seller's exit.[198] The Commission states that:

In a number of [Member States] TFCs have helped to rationalise the fleet. In Denmark TFCs were introduced in 2003 for the pelagic fleet, which had since decreased by 50%. For the demersal fleet TFCs were introduced in 2007 and this fleet has shrunk by 30% since. Profits for both segments increased. Estonia introduced a TFC system in 2001 and by 2009 the fleet has decreased by around 40%. In Spain the so called Gran Sol fleet decreased by 30% between 1992 and 1997 with the use of TFCs.[199]

The majority of evidence that we received accepted that TFCs could be a successful mechanism for reducing fleet capacity. However, it was felt that the Commission was overly reliant on TFCs as the sole means of reducing capacity.[200] Additional suggested tools included other forms of rights-based management,[201] funds to help fishers exit the industry,[202] and clear and binding targets for fleet capacity reduction.[203]

89.  Forms of rights-based management such as TFCs can improve environmental outcomes through removing one of the major drivers of overfishing and giving fishers a long-term interest in the health of fish stocks. A study of the implementation of rights-based management (catch shares) across global fisheries concluded that "implementation of catch shares halts, and even reverses, the global trend toward widespread collapse".[204]

90.  Several witnesses were concerned about the impacts of introducing TFCs on coastal communities, arguing that fishing rights would be consolidated in the hands of big businesses that might not have an economic or social link to coastal communities. The Northern Ireland Assembly and Welsh Government concurred that consolidation could be damaging to the inshore fishing fleet and to coastal communities.[205] The Scottish Government said the impact on Scotland's fishing communities would be "devastating"; [206] Richard Lochhead MSP particularly referred to the loss of social benefits delivered by the current system of family-owned businesses.[207] On the other hand, the continued depletion of fish stocks by overfishing also damages coastal communities: by 2009 the number of UK fisherman had fallen to a quarter of its level in the 1950s.[208]

91.  The Common Fisheries Policy should protect fishing communities as well as fish. The introduction of Transferable Fishing Concessions (TFCs) as a mechanism to reduce fleet capacity highlights a broader debate over the interaction between overfishing, fleet size and employment in coastal areas. We recognise that introducing TFCs can reduce fleet capacity and improve environmental outcomes. However, we are deeply concerned that introducing TFCs will damage the viability of coastal communities. Defra must decide what shape of fishing industry it wants in future. Therefore if Defra believes that a reduction in fleet capacity is needed, safeguards must be put in place to protect coastal communities and prevent excessive consolidation of the fleet in favour of larger operations.

92.  Under the current proposals, Member States can choose whether to extend the system of TFCs to the under 12 m sector. The New Under Ten Fishermen's Association (NUTFA), which represents the UK's under 10 m fleet, vehemently opposed the extension of TFCs to their sector, claiming that if TFCs have value, they will be sold to the highest bidder, which will "inevitably denude" small scale and low impact operations.[209] In order to protect coastal communities from the potentially negative impact of fleet consolidation, Defra should not extend a system of Transferable Fishing Concessions into the under 10 m sector. Additional safeguards could include a limit on the percentage of national fishing concessions that can be held by a single vessel, a one-way valve to prevent transfers from small scale operations to large-scale operations, and a facility to allocate additional concessions to vessels that provide additional social or environmental benefits.

93.  The Commission's proposal will enable TFCs to be transferred among fishers within a Member State, while individual fishing opportunities (IFOs), which are annual fishing rights derived from the Member State's annual quotas, can be leased among holders of TFCs.[210] Holders of TFCs that do not wish to fish themselves will be able to lease out their IFOs on an annual basis. This reduces the incentive for TFC holders to leave the industry as "leasing provides consistent high revenue with better income and tax implications than selling quota".[211] When a similar system was implemented in the British Columbia halibut fishery it resulted in active fishermen holding less of the quota.[212] Bertie Armstrong, Chief Executive of the SFF, argued that "instead of neatly removing from public finance one area of pension problems, you have in fact introduced a completely undesired reaction in removing the raw material from the operator".[213] We are therefore concerned that, as the Commission's proposals allow leasing of fishing rights, they do not constitute a meaningful capacity reduction mechanism; moreover allowing leasing of fishing rights could have unintended consequences for genuine fishermen.

94.  If a system of Transferable Fishing Concessions is introduced, Defra should implement a mechanism to discourage leasing of quota and to redirect unused quota towards more environmentally and socially sustainable fishing operators. We propose a siphon mechanism whereby if an operator chooses to lease his fishing rights rather than use them himself, a percentage of his allocation is returned to the national envelope. This can be reallocated to active fishermen in such a way as to restore traditional fishing activities in coastal communities and ensure the continuance of the socio-economic benefits that these activities provide. The Duchy Fish Quota Company, based in Cornwall, currently operates a similar mechanism for annual quota allocations to prevent quota being sold out of Cornwall and help young fishermen enter the industry.[214]

95.  We support the annual leasing of fishing opportunities among Member States. However we are not persuaded that the permanent transfer of TFCs to other Member States would benefit the UK's interests in the long-run.[215] Defra should not transfer the UK's fishing rights, such as Transferable Fishing Concessions, to other Member States.


185   European Commission Green Paper, Reform of the Common Fisheries Policy, COM(2009)163 final, April 2009, p 5; European Court of Auditors press release, 12 December 2011  Back

186   European Court of Auditors, Have EU measures contributed to adapting the capacity of fishing fleets to available fishing opportunities?, Special Report Number 12, 2011 Back

187   European Court of Auditors press release, 12 December 2011 Back

188   Including WWF (Ev 124), RSPB (Ev 121), ClientEarth (Ev w3), New Economics Foundation (Ev 95), SWFPO (Ev 127) Back

189   Q 163 Back

190   European Commission non-paper, CFP Reform-Transferable Fishing Concessions, December 2011 Back

191   COM(2011) 804, Article 13 Back

192   Q 162 Back

193   Including NFFO (Q 73), NUTFA (Q 107) Back

194   Q 73 Back

195   Q 227 Back

196   Q 388 Back

197   For example, New Economics Foundation (Ev 101), PEW Environment Group (Ev w6), Professor Frid (Ev w20) Back

198   Q 163 Back

199   European Commission non-paper, CFP Reform-Transferable Fishing Concessions, December 2011 Back

200   WWF (Ev 124), RSPB (Ev 121), ClientEarth (Ev w2) Back

201   Ev 121, Ev 124, ClientEarth, CFP reform proposal: transferable fishing concessions, November 2011 Back

202   Ev w3, Q 107 Back

203   Ev w3 Back

204   Christopher Costello et al., "Can Catch Shares Prevent Fisheries Collapse?", Science, vol 321 (2008), pp 1678-1681 Back

205   CFP 18, CFP 14 Back

206   CFP 21 Back

207   Q 210 Back

208   Q46 Back

209   Q111 Back

210   COM(2011)425,Article31-32 Back

211   Evelyn Pinkerton and Danielle N. Edwards, "The elephant in the room: The hidden costs of leasing individual transferable fishing quotas", Marine Policy, vol 33 (2009), pp 707-713 Back

212   ibid. Back

213   Q 90 Back

214   www.duchyfishquota.co.uk Back

215   Q 207, Q 87. Article 31 of the draft Regulation creates an additional possibility for Member States to authorise the transfer of TFCs to other Member States. Back


 
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Prepared 24 February 2012