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.
The last systematic assessment of fleet overcapacity was made
in 1995 so it is difficult to assess the true degree of overcapacity.
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.
Several witnesses recognised the need for more effective and proactive
mechanisms to address the problem of overcapacity.
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.
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
on decommissioning, fishing capacity has continued to increase
by about 3% per year.
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
Commissioner explained to us that "payment for decommissioning
is not a solution to our overcapacity problem, so we have to stop
86. We received mixed views on the proposed ending
of decommissioning subsidies. The fishing industry were unsurprisingly
supportive of decommissioning schemes.
The NFFO questioned whether decommissioning schemes were necessary
for other market-based capacity reduction schemes to work.
The Scottish Cabinet Secretary agreed that decommissioning schemes
were a legitimate use of public funds.
The Minister implied that, if funding was available, Defra would
reinstate their decommissioning schemes.
However, some witnesses pointed out that funding for decommissioning
could instead be redirected towards 'public goods' such as data
collection or employment diversification.
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.
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.
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.
Additional suggested tools included other forms of rights-based
to help fishers exit the industry,
and clear and binding targets for fleet capacity reduction.
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".
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.
The Scottish Government said the impact on Scotland's fishing
communities would be "devastating"; 
Richard Lochhead MSP particularly referred to the loss of social
benefits delivered by the current system of family-owned businesses.
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.
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.
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.
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".
When a similar system was implemented in the British Columbia
halibut fishery it resulted in active fishermen holding less of
the quota. 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".
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.
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.
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
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
European Court of Auditors press release, 12 December 2011 Back
Including WWF (Ev 124), RSPB (Ev 121), ClientEarth (Ev w3), New
Economics Foundation (Ev 95), SWFPO (Ev 127) Back
Q 163 Back
European Commission non-paper, CFP Reform-Transferable Fishing
Concessions, December 2011 Back
COM(2011) 804, Article 13 Back
Q 162 Back
Including NFFO (Q 73), NUTFA (Q 107) Back
Q 73 Back
Q 227 Back
Q 388 Back
For example, New Economics Foundation (Ev 101), PEW Environment
Group (Ev w6), Professor Frid (Ev w20) Back
Q 163 Back
European Commission non-paper, CFP Reform-Transferable Fishing
Concessions, December 2011 Back
WWF (Ev 124), RSPB (Ev 121), ClientEarth (Ev w2) Back
Ev 121, Ev 124, ClientEarth, CFP reform proposal: transferable
fishing concessions, November 2011 Back
Ev w3, Q 107 Back
Ev w3 Back
Christopher Costello et al., "Can Catch Shares Prevent
Fisheries Collapse?", Science, vol 321 (2008), pp
CFP 18, CFP 14 Back
CFP 21 Back
Q 210 Back
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
Q 90 Back
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