Good times for Danish ‘quota barons’

Isafold. Photo: / PmrA

67 meter Danish trawler Isafold holds quotas worth around €130 million. Photo: / PmrA

Transferable quotas have been good business for a small number of Denmark’s vessel owners.

In the European Commission’s CFP reform package, the proposal for transferable fishing rights has drawn criticism from several stakeholders. One fear, expressed by the French Minister for Agriculture and Fisheries, Bruno Le Maire, is that a market for quotas could lead to the concentration of fishing rights into the hands of a few large operators.

In fact, this is what has happened in Denmark. After a system of transferable catch shares was introduced there in 2003 for the pelagic fisheries, small-scale fishermen have been bought out by a handful of large companies, called ‘quota barons’ by the Danish press.

The Danish newspaper Jyllands-Posten has examined several of the largest fishing companies in Denmark. In July, according to the newspaper’s calculations, eight vessels accounted for a quarter of the value of all Danish fish landings, and the same eight vessels held quotas worth DKK 4.8 billion (€ 644 million).

Trawlers Ruth and Gitte Henning. Photo: / PmrA.

Trawlers Ruth and Gitte Henning. Photo: / PmrA.

Jyllands-Posten writes that three giant trawlers – Ruth, Gitte Henning and Isafold – each holds quotas worth around DKK 1 billion (€ 134 million). The company that owns the trawler Ruth made a profit of DKK 80.6 million (€ 1.15 million) from their two vessels.

Mogens Schou, advisor to the Danish Minister of Fisheries, confirmed to CFP Reform Watch that there is a concentration of quotas in Denmark. However, he said, this is only half the truth.

The quota concentration has primarily happened within the pelagic fisheries, which includes catches of small fish like herring and industrial species used for fish meal.

“Here, the concentration of fishing rights was actually a goal, as a way to achieve economic efficiency, and to compete in distant waters” Mogens Schou said.

For the Danish demersal fleet, which catches larger fish like cod and flatfish, the goal was another: reducing overcapacity while safeguarding the smaller coastal vessels. In this fleet segment, a different system of catch quotas was introduced in 2007. Coastal vessels below 17 meters receive a bonus as long as they conduct a coastal fishery and do not increase the size of the vessel or sell fish out of the segment.

“We have achieved an overall capacity reduction in the demersal fleet, this has together with a modernisation of the fleet resulted in some concentration at the same time. However, the coastal fleets share of catches has increased, due to the design of the premium and to the fact that small vessels may well compete in coastal demersal fisheries” Mogens Schou said.

In Denmark, the multimillion quotas were originally given away for free to the fishermen. Questions have been raised over why fishermen should not pay for using public resources in the same way as for resources such as North Sea oil or mobile phone frequencies.

“Politicians should consider whether it is time to impose a resource tax on fleet segments with good profitability, ensuring that the economic benefit beyond a normal level of profit also comes back to society,” Aalborg University professor Jesper Raakjær was quoted by Jyllands-Posten as saying.

Christian Olesen of the Danish Pelagic Producer Organisation said to Jyllands-Posten that if a resource tax should have been introduced, it should have been imposed on those who got the first quotas and then sold them. “In hindsight it was probably something that should have been considered. But now it is too late,” Jyllands-Posten quoted him as saying.

The European Commission’s CFP reform proposal contains no clause on whether the first generation of quotas should be auctioned or given away for free.

Axel Naver

Photos (c)

Further reading:
Danish government’s website about transferable catch shares

Read the articles in Jyllands-Posten (Danish):
Kvotebaroner scorer på havet
Gitte Henning er Danmarks nye kvotedronning
Søvejen åbnet for EU’s kvotebaroner

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