THE SEA around Iceland is getting warmer. Since 1997 an increased flow of Atlantic waters has been observed around Iceland resulting in higher sea temperature and higher salinity. At present, however, this has not had any visible effect on cod recruitment. Cod being the most important fish species in Iceland, accounting for 41 per cent of the total value of catch last year, the low level of its recruitment for many years has been a matter of concern.
The changes in hydrographic conditions may have affected the distribution and abundance of capelin, the main food item of cod, or the spatial overlap between capelin and cod, according to a new report from the Marine Research Institute of Iceland. The mean weights-at-age for cod are observed to be declining and it is getting more difficult to locate the capelin stock and measure its size. The capelin seems to be moving further away from the north coast of Iceland in the summer time and its migration pattern around the country during the spawning season in winter is constantly changing.
Good news from haddock, herring & blue whiting
But there is also good news. The change in sea temperature and salinity seems to have caused an explosion in the haddock stock. Only five years ago the annual catch of haddock was 41,000 tonnes (t) but for the coming fishing year the allowable catch is 105,000t and has never been higher. Haddock is now in abundance all around Iceland, also off the northern coast which is something new. Other species such as monkfish and ling, which have until recently been confined to the south coast of Iceland are now also being caught further up the west and east coast.
Positive changes in the distribution patterns of pelagic fish have also been observed. The migration of blue whiting towards Iceland is on a much larger scale than before and it is now seen in the ocean all around the country. And, even more important, the Atlanto-Scandic herring (Havbruk describes this as Norwegian spring spawning herring, Icelandic spring spawning herring and Icelandic summer spawning herring) has now restarted its migration towards Iceland in the summer time and, to a certain degree, all the way into Icelandic fisheries' jurisdiction. This is of special interest to the Icelanders, historically speaking, since this herring stock was of the utmost importance to the Icelandic economy before the fishery collapsed almost 40 years ago. At one time it accounted for up to 40 per cent of the total export revenue of seafood.
Cod dines on dropping shrimp
Generally speaking, fish stocks in Icelandic waters are in fairly good condition with two exceptions, namely shrimp and scallop. The increased abundance of cod in the waters north of Iceland are estimated to be largely responsible for the decline of the shrimp stock which is at a very low level now. The cod is estimated to have eaten 80,000t of shrimp last year alone. The catch of shrimp has dropped from 75,000t in 1997 to 16,000t in 2004, not only because of declining stock but also due to declining world market prices. The scallop stock, however, has completely collapsed, probably caused by the effect of unusually high sea temperatures in recent years. At present, fishing for scallop is not allowed.
Rationalisation
Because fishing remains the cornerstone of Iceland's economy, every difficulty which the fishing industry faces now has to be met with rationalisation of the sector. For some time now the strong value of the Icelandic krona versus the US dollar and the euro has plagued the fishing companies and the fish processors. They are getting fewer krona for each dollar and euro they earn from the export of fish. This problem used to be solved by devaluing the Icelandic krona -- then everyone went on about his business as usual. Now times have changed. The fishing industry cannot ask the government for help anymore. The order of today is: "You have to adjust and rationalise", and sometimes this means you have to merge with other fishing companies. And that is exactly what has happened in recent years.
Reduction in the work force
Since the introduction of the Individual Transferable Quota System (ITQ) in 1984 the organisation of the Icelandic fishing fleet and the fish processing companies has changed dramatically. There are now 70 trawlers in operation compared with well over 100 in 1984. Similarly, the number of fishing boats has gone down, but those now working are much more effective due to new technology and more power. The total catch of the fleet is considerably greater than before, despite the fact that the number of fishermen has gone down from 6,400 in 1984 to less than 5,000 today.
The same applies to the fish processing industry. The total number of workers in the fishing plants now number around 5,000 compared with 1,000 some 15 years ago. New techology, together with the consolidation of fishing quotas, has made all this possible.
Through extensive mergers the fishing companies are now fewer but larger and each has much bigger quotas at their disposal. To give one an example a large fishing company, Thorbjorn-Fiskanes, was established by a merger of three smaller companies on the southwest coast in the fishing village of Grindavik. It now operates only eight vessels which are fishing quotas which belonged to 40 boats before.
The latest merger
The latest merger of fishing companies in Iceland is that of two large ones, Grandi in Reykjavik and HB in Akranes and there is to be another member of the group, Tangi in East Iceland, at a later stage. The new company, HB Grandi, manages the largest share of quotas on Iceland's fishing grounds, 48,300t in cod-equivalent (meaning all species mesured by the value of cod) which equals 11.26 per cent of the nation's total quota. Employees on sea and land number around 700. HB Grandi runs several fishing plants and fishmeal factories and its fleet consists of 15 ships for bottom and pelagic fishing. The latest addition to its fleet is the 105m Engey RE, a 7,800 BT factory trawler, built in Spain in 1994 but refitted with all the newest equipment for the processing of pelagic fish. The ship arrived in Iceland in May and has been fishing Atlanto-Scandic herring this summer. Engey RE is the largest ship in the Icelandic fishing fleet.
Samherji, an international fishing company
Samherji in Akureyri, for many years the biggest quota holder in Iceland, is now in second place with 33,500t in cod-equivalent and has a share of 7.81 per cent of the total, ational quota. Yet Samherji's influence and activities are much more extensive than these figures imply. The company has four subsidiaries in EU-countries (Germany and Scotland) and one in the Faroe Islands with a total fishing quota of 25,000t in cod-equivalent. In addition, Samherji is a dominant shareholder in other fishing companies in Iceland which have around 30,000 quota tonnes at their disposal. All in all, Samherji controls a quota of around 90,000t in cod-equivalent, making it the most powerful company in the Icelandic fishing industry.
Consolidation in the pelagic sector
The merger of fishing companies and fishing quotas is still very much in progress, not least in the pelagic sector (capelin, herring and blue whiting). More than 50 per cent of the allotted pelagic quota in Iceland is in the hands of three companies and Sildarvinnslan in Neskaupstadur in East Iceland is the largest with a share of 24 per cent. If the fishing companies connected to Sildarvinnslan are taken into account (Samherji is its largest shareholder) it controls 39 per cent of the total pelagic quota or over half a million tonnes.
Today, half of the total national fishing quota measured in cod-equivalent is owned by seven fishing companies.
According to Icelandic law no individual company is allowed to hold more than 12 per cent of the total national quota. Only HB Grandi with its 11.26 per cent share is close to the limit.
Not universally approved
Needless to say, not every one is happy about this development. Some small fishing communities lost a large part of their former fishing rights after vessel owners sold their ships and their quotas.
Those in favour of the quota system, however, maintain that Iceland, perhaps contrary to other countries, cannot afford to interfere with the total rationalisation of the fishing industry considering its central importance in the nation's economy.
When the ITQ system was introduced some 20 years ago, small boats were not included. They were put into an effort quota system and allotted a limited number of days each year for fishing. Gradually these boats became more powerful and techically advanced and fished a lot more than they were expected to do. This caused much dissatisfaction among the owners of the bigger boats.
Little by little the small boats have been pulled into a quota system and at the beginning of the current fishing year the effort quota system was finally abolished. Now every ship, large and small, has a fixed quota. However the small boats are still in a seperate system, can only fish with hooks (long line or reel) and are not allowed to sell their fishing quotas to bigger boats.
Less catches -- more value
Iceland's total catch of fish declined between 2003 and 2004 from 1,430,000t to 1,171,000t, primarily due to less catches in the pelagic sector. As mentioned before the capelin has behaved capriciously in recent years making it more difficult to catch than ever before. There was also a drop in the herring and blue whiting catch. On the positive side, the increased onboard production of pelagic fish has made the final product more valuable.
In 2004, the export of marine products from Iceland amounted to 828,000t, producing 121.7 billion Icelandic kronas (US$1.74 billion) in export revenue. That was an increase of 2.3 per cent in quantity and seven per cent in value compared with the previous year. Approximately half of seafood exports consisted in frozen products. But the single most valuable export item was salted cod which produced 13.3 billion Icelandic krona ($190 million). The European Economic Zone is the most important market area for Icelandic seafood with more than 77 per cent of the total value of exported fish.
