Local dimensions of fisheries remain critical for continued prosperity and societal development—with investments in fishing communities forming part of the backbone of economic life, as per Faroe Fishermen’s Union.
Despite the significant investments in key sectors of the Faroe Islands fishing fleet that have taken place over recent years and continue to this day, policymakers are urged to place fleet renewal at the top of their agenda to prevent stagnation in parts of the fish industry.
“We’re obviously pleased with the substantial investments in new vessels that we’ve seen in recent years,” said Jan Højgaard, chairman of the Faroe Fishermen’s Union a.k.a. FF (Føroya Fiskimannafelag). “At the same time, regrettably, there are some important sections of the fishing fleets that are in no good shape and need replacement.”
Indeed, the majority of the pelagic fishing fleet alongside most of the freezer trawlers have been replaced with newbuilds in recent years or are currently in the process of being replaced. Some of the longliners have likewise seen renewal or refurbishment, with freezing capacity fitted on most to bolster economic viability. On the other hand, some domestic trawlers and longliners plus a few other classes of fishing vessels are generally in declining condition with bleak prospects.
According to Mr. Højgaard, the current legislative and regulatory environment essentially prevents investment in parts of the fishing fleet, in particular due to a rigid or disproportionate antitrust regime.
“The framework needs to be adjusted and this is an urgent matter,” Mr. Højgaard said. “An adjustment to the current set of antitrust rules is necessary because it’s excessive and unfit for the tiny socioeconomic reality of the Faroe Islands.”
If the problem persists and is not dealt with appropriately and in time, it may force much of the less fortunate fishing fleet out of business, Mr. Højgaard added.
“In fact,” he said, “that’s already happening and we’ve seen too many examples of it in recent years. We support the idea behind the antitrust legislation and much of its substance. However, it needs to be reviewed with the aim of making sure no parts of the fishing fleet are blocked from investment.”
Societal issue
In other words, for antitrust law to function in accordance with its stated purpose, there’s a critical balance to strike between, on the one hand, a legitimate concern over the formation of business monopolies and, on the other, due regard for the requirements of business finance. What policymakers may tend to neglect or ignore is that there are extremely few sources of investment capital actually available for fishing businesses, especially smaller operators.
In result, ownership of fishing enterprises gets consolidated into fewer and fewer hands.
When it comes to fishing, the business environment is in general highly unpredictable, so much so that managing uncertainties often takes exceptional skills. Most financial institutions make every effort to avoid getting exposed in any significant way, whereas industry insiders as a rule are more confident and knowledgeable about the particular risks and requirements involved.
“Bottomline is, fishing vessels need to be kept in good shape and up to date,” Mr. Højgaard said. “This is crucial—they must be regularly refurbished or replaced; otherwise, deterioration and decline are guaranteed. On top of that, maintaining aging vessels becomes increasingly expensive over time. And remember, the vessels are workplaces and substandard conditions in the workplace is bad for recruitment. Much the same goes for environmental issues and emissions—newer vessels generally means less and cleaner combustion and more efficient engines with technologies more geared toward electric-powered machinery and equipment.”
With fleet renewal critical for every fishing operation, allowing for it likewise becomes a societal issue in a broader sense.
“The government’s fisheries policy should take into account the full spectrum of the fishing fleet and make sure the antitrust legislation is correctly calibrated,” Mr. Højgaard added. “As things stand, the legislation too often hurts where it should not hurt.”
