The Norwegian experience with a TFC-like system

(Structural Quota System)

Fish for the Future

Transferable fishing Concessions - the solution to overfishing or a

problem in itself?

Brussels, 6. December 2011

Per Sandberg

The Norwegian Directorate of Fisheries

Subsidies to Norwegian Fisheries (1962-2010)

Source: Norwegian Seafood Export Council

Vessels scrapped during the period 1960 - 2002

1960-1968 1969-1978 1979-1988 1990-1993 1998-20020

200

400

600

800

1000

1200

1400

1600

1800

2000

Coastal vesselOcean-going vessels

Norwegian catch, fishermen and their efficiency during the period 1945 - 2010

* Preliminary figures

Marine life– our common responsibility

Objectives and target fleets for TFC-like instruments

• Objectives

- A fleet size more in balance with sustainable yields from fish stocks- A diversified fleet, being able to harvest in various parts of the ocean- A fleet that provides activity along the various municipalities along the coast

• Target fleets

- Multiple fleets of ocean-going vessels holding a license to fish- Coastal vessels holding annual license to fish

• Non-target fleets

- Small-scale, coastal vessels

Instruments and safeguards

• Instruments

- Stability in quota allocation- Duration of TFC in adequate period

• Safeguards

1. Avoid concentration of quotas in geographical areas2. Avoid concentration of quotas on fleets3. Avoid concentration of quotas on individual owners

Current Instruments

* 1. December 2011

** Individual Vessel Quotas

***Structural Quota System

1231

963

259

Number of vessels*

(Finished)XXCoastal vessels; 0-11m

XXXCoastal vessels; 11-28m

XXXOcean-going vessels

SQS***(TFC-like system)

Buy-back programsIVQ**

Licences/Annual permits

Denomination

OutputInput

Management instruments to adjust harvest capacity

Management instruments to regulate the fisheries

Quota

+

100%

Structural Quota System – Offshore Fleet• Structural quota; 20 years duration• Only for vessels holding a valid license• One vessel must be scrapped

Have the TFC-like instruments had the desired effects with respect to:

• Profitability ?• Fleet capacity ?• To avoid concentration of fleet in geographical areas ?• To avoid concentration of fleet in specific segments ?

ProfitabilityAverage operating margin, vessels above 8 metres

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

0

2

4

6

8

10

12

14

16

18

20

Average operating margin, 1980-2010

Operating margin Trend driftsmargin (lineær*)

Perc

ent

*Minste kvadraters metode

Fleet capacityStructural Quotas as share of total quota in various fleet segments (30. Dec. 2010)

Fleet Quota Species SQ as share of Total Quota

Ocean-going vessels

Purse seinersLong-line, netsCod trawlers

Coastal vesselsCoastal purse seinersCoastal vessels

MackerelCodCod

NSSH (Herring)Cod

18%57%58%

42%24%

Distribution of fishermen in various counties in 2000 and 2010

County (from North to South) 2000 2010

Finnmark 10% 9%

Troms 15% 13%

Nordland 24% 24%

Nord-Trøndelag 2% 2%

Sør-Trøndelag 3% 4%

Møre og Romsdal 24% 22%

Sogn og Fjordane 6% 6%

Hordaland 7% 9%

Rogaland 4% 4%

Others 5% 6%

Total 100% 100%

Value of Norwegian catch on various fleet segments (% of total)

2003 2004 2005 2006 2007 2008 2009 20100.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Above 28 metresBetween 11 and 28 metresBelow 11 metres

Value of catch, as registered on vessels from Northern and Southern Norway

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

Value of catch, as registrered on vessels from Northern and Southern Norway

Value of Catch-North NorwayValue of Catch-South Norway

The Norwegian capacity reduction programme: Some concluding remarks• Reduction in numbers of fishermen and vessels has been inevitable

• For TFC-like system in Norway to work;

- Stability in allocation of quota between fleet segments as well as between vessels in a fleet- Duration of programme for a certain number of years

• Safeguards

- Delimitation of markets with regard to fleet groups and geographical areas- Ceiling on licenses on individual vessels

• Consequences

- Increased profitability for remaining fleet- Still a diversified structure, both with regard to fleet and geographical areas- Increased barrier to enter fishery, increased investment costs

Thank you for your attention

Marine life – our common responsibility