It is good news for a country that relies so much on fisheries. In 2003, total landings reached 1.98 million tonnes and fish products now represent 60 per cent of the country's export earnings. Cod holds pride of price and place, generating around 40 per cent of the total export value of seafood, and the up-beat situation is expected to continue into the 2004/2005 season*.
The importance of fishing to the Icelandic economy has meant that the key to success can only be good, strong management. Many believe that Iceland has the best managed fisheries in the world. No wonder a parentally-administered dose of cod liver oil is supposed to be good for you.
"If we fail on managing the fisheries, we all are going to suffer. Often, you don't take difficult decisions unless you are forced to take them and in the case of fisheries you are really forced to do something about the situation we are in," says Arni Mathiesen. After several years of overestimating the stocks, at the end of the 90s his ministry took the tough decision to reduce cod quotas.
Quota cuts
"The only way, if the stock is overfished, is to cut and that was our response when we realised that the stock was smaller than we thought before. I did that [cutting the quota] for three years running. For the whole period the only thing I did with regards to the quota was to cut it. It was only after the elections [June 2003], when I was re-elected and started my second parliamentary period in this ministry, that I was able to increase the quotas."
But Mathiesen says the industry understands all this. "They don't just think about this year, this season...They think about the year after and five years after and 10 years after.
"Many of the companies are answerable to shareholders, so they have to think about the [value of the] stocks. If people think that the stocks have been depleted, [then] the shares and the market will fall. So they are quite responsible in their attitudes and that's very important."
This year, however, four fishery companies have decided to delist from the Iceland Stock Exchange, leaving only seven listed compared to 17 in 2001.
Iceland's fisheries management system relies on scientific advice and follows the precautionary principle. Arni Mathiesen says that decisions are not taken unless there is the right information and the scientists have been quite active in trying to work with fishermen and get their advice. He believes the Icelandic tradition of following scientific advice is the right one. He also thinks the scientists are producing better estimates of stock today than they used to.
This year the strong (in terms of landings not value), capelin fleet had to halt operations in January. There were difficulties estimating the size of the capelin stocks, since the fish were behaving differently than in previous years. The result was that some 100 skippers had to tie their vessels up in port. Hence less capelin has been caught so far this year than would have been the case had they carried on fishing. "It was difficult for them, but this was precautionary. You don't take decisions unless you have the information," Mathiesen said.
Iceland's successful individual transferable quota system (ITQs), was introduced in 1984. Only a very small part of the industry, represented by 300 small boats, is still on a days-at-sea system. Out of a total catch of two million tonnes, just 10,000t of ground fish are outside the quota system.
History of rational cod
Summarising the cod stock situation, Arni says: "Our success in the last 20 years is that our stock hasn't diminished from the situation it was then, even though we fished quite heavily out of it. We fished more than we should have but still, with our reaction in the latter part of these 20 years, we manage to be in the same situation we were 20 years ago."
However, playing the precautionary card himself, Mathiesen describes the management of the stock as a 'modest success'.
Rationalisation
Rationalisation best describes the Icelandic fisheries industry at the moment. Just 10 companies hold 53 per cent of the total quota share.
Six years ago, half of the fishing quota was in the hands of 20 companies. It is the management system which has made this possible, allowing the transfer quotas.
Although one result, that Arni Mathiesen says was not anticipated, has been the positive effect of making companies stronger. However, he does not think that rationalisation always means linking [or merging] companies.
The industry decides itself whether to join forces or divide up into more profitable, smaller units. He gives the instance of Brim, which had the largest quota share in Icelandic waters. Earlier this year it subdivided into three parts.
Maybe, rationalisation is the key to cope with the new situation which confronts the Icelandic fishing industry at the moment.
Icelandic seafood exports, especially whitefish, are suffering from increased competition with cheaper product from China. To face this, the Icelanders need to be able to increase the quality of their products and to maintain stable price levels. At the same time, the strong Icelandic Krona (ISK) has had a negative influence on fisheries companies because the majority of their expenses are in ISK, while revenues are mainly in foreign currencies.
The other, shiny side of that foreign coin however is that many Icelandic companies have debts in foreign currency and so the strong ISK against the dollar has helped to soften the effect of the increase in the oil prices.
So how does Mathiesen handle the challenges which face his schools of fishermen and fish?
The 'greatest challenge' as he calls it, is the same one that worries all fishing nations: how to ensure sustainability and manage the resources so that the catch increases? Looking at the state of Icelandic stocks and quotas, it would seem the fisheries ministry has been very successful.
It is putting a lot of effort into running a programme with the industry which is aimed at adding value to the catch. At the moment, a large amount of pelagic catch ends up as fish meal and fish oil. But if more of the catch was processed for direct, human consumption its value could increase between five to ten times.
The ministry also has fish farming in its sights. Arni does not see aquaculture replacing wild catch, but he is sure it will play an important role in world fish production. In Iceland, aquaculture is limited by environmental constraints.
" If you manage to design cages that can survive the waves, then you will be assured of high-quality products," he says.
At the moment, there are projects to develop the production of cod, salmon (Iceland already produces around 5,000t of salmon), mussel, abalone, turbot and halibut. Arni says the country has the capability to farm.
It is just a question of balance of cost and selling price. Iceland is also successfully developing species of arctic char and wolfish for niche markets.
Referring to the state of aquaculture in the world, he considers that there is still a long way to go before solving the quality problems of fish meal and fish oil for feed. He also believes that part of the catch being used for animal feed can be transform into good quality products for human consumption. For him, wild catch from well-managed fisheries is still the key to the sector.
"If we manage our resources properly in the near future, it is unlikely that fish farming will be less expensive than catching wild fish."
The whale question and the EU
Last summer, Iceland ended its 14-year moratorium on whaling by taking a decision to catch 36 minke whales, a species 'definitely not endangered' Arni Mathiesen reassures World Fishing. He also explains that this is part of a scientific programme, 'a legal thing to do under the regulations of the IWC' .
The main purpose of the programme is to estimate the amount of fish eaten by the minke stock. "It is a very large research programme, and we have just started a very small part of it. We are quite sensitive to the fact of how controversial whaling is, even legal and justified whaling. We don't want to challenge people on this more than necessary and, therefore, we are going very slowly. We have to wait longer for the results."
He says the reason why the scientific whaling programme is important for Icelanders is that: "Whale stocks are very big around Iceland. They are definitely taking a large share of what we are catching. We need to know if they are catching more or less than we think. If they take more than previously thought, that will affect our management system."
Other useful results from this project have already shown that minkes around Icelandic waters have lower waste chemical levels in their body systems than minkes living in other ocean areas.
Most Icelanders do not want to be part of the European Union (EU). They fear that their wealthy, well-managed stocks would have to be shared with other fleets. On January 2003, the latest reform of the Common Fisheries Policy (CFP) came into force and Arni says: "It has improved in the last revision but it is a long way from how I would manage the fisheries in the EU if I could decide."
In September 2005, the 8th, triennial, Icelandic Fisheries Exhibition, will put this little country of 300,000 souls under the spotlight of the global fishing industry. "We will use the exhibition to focus more on foreign visitors and try, with the cooperation of the industry, to attract people in the fishing industry from the countries we would like to work with in the next few years."
*Iceland's fishing year starts from 1 September.
