How the mighty fallen are rising

The decline

I met Lech Kempczyski in his office in the massive stone building of the ministry. This is a man who knows the fishing world -- the Baltic, the Scottish lochs, the fish and fish-farming industry and he is a member of the commission for

the conservation of Antarctic marine living resources and national delegate to the International Council for the Exploitation of the sea.

What has happened to the big deepsea fleet sector which used to bring back vital raw material from southern Africa up to four or five years ago. I was stunned at the answer.

"Gone. Practically only two vessels [are left] which operate in the North and Northeast Atlantic."

But you had one of the biggest fleets in the world.

"Yes. Yes."

And what has happened to all the jobs?

"Unemployed." He said that meant roughly 3,000 men from the deepsea fleet.

"The [Polish] Baltic fleet is fishing herring, sprat, a little bit of flatfish, including in Bornholm. Today the Baltic is an internal sea of the EU with a little Russian fishing. According to our operational programme, we are scrapping….three years ago the Baltic fleet was 1,300 vessels and 416 vessels of those were more than 15m. At the last report 348 are in port and 190 have been scrapped, absolutely destroyed."

Today more than 80 per cent of Poland's wild catch comes from the Baltic. I asked if the money from Brussels was enough to cope with the impact and retraining and were the sailors happy?

"Yes. There are two questions -- the vessel owners and the fishermen. The fishermen today are happy because they got €10,000 without any work"[nurses just got a pay increase to zl.860 - (€150) per month].

As for vessel owners, US government analyses say that in 2004, 43 per cent of all

Polish ship owners applied for support from the EU and of those 46 per cent wanted to sell their vessels for salvage.

He said that about 800 of the Baltic fleet had lost their jobs. It was a lot. But I pointed out that three to four thousand people had also lost their jobs with the closure of the telephone cable factory in Warsaw, just near my hotel 10km from the city centre.

Cod and cash

Over the summer I had read that Polish fishermen were ready to break the Brussels Baltic cod controls and quotas because they had said they preferred to be fined or go to jail than be bankrupted and put out of business. If anyone was fined they said they would blockade ports. What happened in the end?

"If there were to be less vessels the quota was the same. So maybe, maybe it would be more profitable after this [EU] action. That was the intention of the action to improve profitability.

So did the fishermen act? Were there any fines?

"No. They were paid compensation. [They were told] 'If you fish, the restriction will be very hard'. And they did not fish."

So, if Poland was becoming more and more dependent on processing other people's catch, what was that going to do to the fishing industry in the long term?

"Good question. A very good question" he said laughing. "But the answer is very difficult. Let' say, by the end of 2006, after all the actions on the Baltic fleets, and second we can develop our domestic fish market. Absolutely - increase our domestic consumption (and we are doing that) because now it is very low, about 12kg per capita. Another solution is increasing domestic farming -- inland farming, and we are doing that.".

Indeed, land production is at least around 60,000 tonnes per annum now. Figures vary depending on how you add up their own farmed catch, plus wild catch, plus foreign imports of wild and farmed varies but can be estimated in total at around 300,000t.

For land production I thought Lech had meant traditional carp, eaten for centuries on high holidays like Christmas, in Poland. Carp, he said, was not attractive, but trout production was being developed in a big and fast way.

"We have a very good climate and conditions and traditions for inland fish farming. Because for us sea farming is absolutely impossible. Possible, but not convenient. We do not have Norwegian fjords!"

I asked about high-value river crayfish and he said production of that was developing very fast. Were they retraining fishermen and were they interested in land fish farming?

"Yes, yes! And we support them with Brussel's money. It is a very popular measure." So by focusing on landside they were also avoiding coastal fish-farming pollution. And there is plenty of spare land in Poland.

Cheap flights & fish hunger

We had a bit of a debate about whether the Poles really were amongst the lowest fish eaters in Europe, despite their history of smoked herring and sprats. But he insisted it was true, even though my hotel was serving stuffed pike, smoked salmon, stuffed mackerel, boiled and rollmop herring at breakfast.

"Normally Poland was the country of herring and carp," he said. However, there was a very simple answer to new fish-eating habits and it was about cheap flights and overseas holidays in the last few years. "People visit Italy, Spain, Greece etc.,etc., and they taste the Mediterranean kitchen - calamari etc. And when they come back to Poland they want the same."

But were the profits going to go to the French and other supermarkets which had shot up across Poland? He laughed wryly when I said the people of Warsaw seemed to be under French food occupation, a capitalist version of past Soviet occupation. That was too difficult a question to answers at this stage, he said.

However, the domestic seafood consumption market could be worth perhaps four billion Euros a year. The main focus of the ministry's action programme was now on more expansion of processing.

I said creative marketing was needed to increase fish consumption, I suggested and added that I was horrified to see that the brilliant creative, sophisticated design in Polish advertising of the 70s and 80s (little known in the 'West') had been wiped out by the incoming foreign companies. The big French and American ad agencies just wanted one ad to suit all.

"Yes, you are right. The top priority for us is our plan from 2007 to develop the fish market. The idea is to promote fish as an element of diet - not carp, not herring, not cod, but fish as an excellent element of the diet."

It was also interesting to hear that the fisheries department was masterminding the whole operation without needing support from the health ministry. Fisheries experts in government clearly still have a role to play at national level.

"We cannot support private enterprise but we can take action on fish -- fish in the national diet. We have our own money. The issue is so 'good' [in the consumer's mind] we do not need the health ministry. We have links with the Institute of Fishing in Gdynia and they have a department which focuses on fish processing."

Process not catch

The next surprise for me was to find out how advanced the processing industry had become, although it had always been good at making sure tins of Polish fish were on the shelves of empty 'supermarkets' across the former Soviet sphere of influence. Indeed they seemed to have made the great leap from the raw material economy into the money-earning value-added processing sector with export markets to match.

Not only has the Polish sector making equipment for freezing and processing fish survived. It was just such an equipment company which won the big prize at June's POLFISH 2005, the eight International Fair for Fish Processing and Fish Products, where Lech had been a member of the jury.

There is competition of course. When I examined a Canadian government analysis of the processing sector, while the big Polish names were dominant but there were also companies which were under Swedish, Spanish and UK ownership. Outsourcing for the latter has shown that cheaper Polish labour and traditional skills have been a target for money-makers from outside.

There are some 300 processing plants, employing maybe 50,000 people, mainly in the North but also some in the south and east. Many are small to medium firms and Lech pointed out that some 20 per cent still had to be brought up to EU regulatory standards. Indeed those uncertified factories might well close down.

Clearly force of circumstances through the decline of own-fleet, wild catch has meant the Poles had to decide whether to make the leap forward -- and they have succeeded in doing it. In recent years the seafood processing sector has boomed, at least quadrupled production and saw a 38 per cent increase in 2004 over 2003. Lech points out that they are producing the whole range of foods including readymade meals.

The latest figures were not immediately available but the value of products for export must be in the hundreds of millions with the main buyers being Britain, Germany, Denmark, and France. The cost of imports of raw material and other seafoods were significantly less than the cost of imports with the main raw material sources being Norway, Russia, China, and Germany. The U.S. market, with its traditional Polish émigré connections, is expected to do well in the future. The most popular seafood products for processing, according to the Canadian analysis are herring, Atlantic pollock, mackerel, sprat and hake.

But there is a warning for those wishing to emulate Poland's value-added leap. The issue of Norwegian salmon and EU anti-dumping duties contains a clear warning that you should not buy all your "fish from one basket".

The Poles have developed a strong relationship in the past half decade with Norway and they are not at all happy about being hit by heavy duties for the purchase of raw materials from there.

He said Norwegian difficulties with Brussels were not directly a problem should have to cope with. "For us it is a another very important thing. Thanks to very hard and long promotion, our industry has been working with Norwegian salmon as a raw material for about six or seven years. We [produce] very good quality [items] for the European market, working absolutely only with Norwegian salmon. So for our industry [the EU penalty regime on Norwegian salmon] is a problem. Our business is to have raw material relatively cheaply of course. So we are also against the Brussels regulation. Because it is a very simple chain. A higher price for the raw material means a higher price for the consumer, so the demand drops."

I asked him about substituting some of the 20,000t of Norwegian salmon each year perhaps with Chilean salmon. But he said it was not cheaper and transport was long compared to fast (almost fresh) trucking from Norway. "Price is one reason. But the second very important reason is that it is a tradition of the processors to use Norwegian fish. These guys have known the Norwegian suppliers for a very long time -- they have been cooperating and it is very difficult to change this chain."

The Poles have lost their giant fleets, but have turned their traditional processing skills massively to their advantage. The next issue is how they can get European consumers to demand Polish, branded seafood products, not anonymous packets under say a retailer's name.

They have support in high places. The new finance minister, following October's presidential elections was fast off the mark to attack foreign hypermarket chains, naming the UK's Tesco specifically, as being unproductive investment in Poland, with low-cost, service not manufacturing jobs, and which the country did not need and 'being unwelcome' in Poland. Teresa Lubinska told the UK's The Financial Times that she had tried 'to chase out' these supermarkets from her home town of Szczecin because they were destroying city centres and small businesses. "The problem of Poland is that we must produce more ourselves," she said. That will create an echo around the world in countries which have the stocks but not the markets. Fishermen who want local fisheries, local processing and local markets as opposed to giant fishery combines, might do well to watch the Polish value-added experiment with a keen eye, and especially what is going on in the green fields of Polanie.