Geert Hoekstra has been working as a fisheries economist at Wageningen Economic Research, part of Wageningen University & Research, since January of this year. He is engaged on economic monitoring projects and policy analyses of current issues in the fisheries sector, such as pulse fishing, the landing obligation and fish processing and trade. Geert, from the Urk fishing community, is no stranger to life at sea, but nevertheless thinks that it is important to talk with entrepreneurs during their daily work. He feels that this offers ideal opportunities for discussions on the implementation of policy and sustainability of the sector with authorities and entrepreneurs. In this article we follow his reflections on board a cutter.
This week I was the guest of skipper Johan Romkes, on board the Scots cutter BCK-40. Johan and his brother Jurie run the family business. The more than 42-metre-long cutter fishes for plaice for most of the year.
The media talks about it all the time: is it going to be a hard or a soft Brexit? Many think it's a question of reading the tea leaves. Brexiteers, the advocates of a Brexit, think that the United Kingdom should not only regain the exclusive rights to the 12-mile zone around the coast, but also the rights to the 200-mile zone. This results in a very tense situation for the fishing companies that fish in the Southern North Sea and have to wait and see what Brexit will bring them.
Plaice is the main catch in the Northern North Sea, so the direct consequences of Brexit will be less pronounced. I'm on a cutter that is owned by a Dutch family business but which sails under the Scottish flag. Johan Romkes states that his business is already largely future proof, as various Brexit scenarios have been taken into account. Carefully considered investments have, for example, been made in providing for an adequate quota for plaice and quota for other fish species in various fishing waters. Consideration has also been given to a hard Brexit scenario in which import levies are introduced on fish landed in the EU. An alternative would then be to land and process the fish in the UK. However, it is doubtful whether this would be an acceptable solution from a social and economic point of view, as preference is given to processing the catch as close as possible to home, the source of the local knowledge.
The Scottish economy is highly dependent on the revenue from national fishing companies. Wageningen Economic Research carried out studies of the possible consequences of a variety of Brexit scenarios (European consumers pay the price for fish when hard brexit occurs). The researchers, Heleen Bartelings and Zuzana Smeets-Kristkova, concluded that a hard Brexit would result in a lose-lose situation for all parties: prosperity would decline significantly due to increasing protectionism and the misallocation of resources.
The BCK-40 can not only fish by beam trawling, but also by pulse trawling. Pulse fishing is based on the use of pulses to disturb flatfish or shrimps so that they can be caught in the trawl net. The technique has been developed from beam trawl fishing because of the relatively high fuel consumption of the traditional beam trawl technique.
Wageningen Economic Research has carried out a number of studies into the economic impact of pulse fishing on Dutch fishing companies. The first efforts to make commercial use of pulse fishing gear date from around 1986 (Platform voor kennisuitwisseling in de visserij, Vist ik het maar). The lower fuel consumption and often fewer discards both offer perspectives for this innovative technique (discards are catches that are not retained on board but thrown back into the sea). However, the technique was not commercially implemented, as the European Union decided to prohibit electric fishing in 1988.
Nevertheless, at the beginning of the 1990s, the technique was taken up on a small scale for further development and testing purposes. In around 2005, this ultimately resulted in the first exemption for experimental pulse trawling that the European Union granted to a Dutch cutter. The greatly reduced fuel consumption rapidly awakened the interest of other Dutch cutters (Taal & Klok, 2014). A request submitted by the Dutch Ministry then resulted in the grant of a further 21 exemptions for experimental pulse trawling, equivalent to 5% of the cutter fleet. As the interest amongst cutter owners was much greater, the European Union subsequently agreed to grant a further 20 exemptions, which brought the total number of exemptions for experimental pulse trawling to 42.
The European Union, in conclusion, agreed to grant a further 42 exemptions on the basis of two objectives that were already laid down in two sections of European law, namely to contribute to an improved selectivity and thereby bring the consequences of the implementation of the landing obligation to an acceptable level, and to collect knowledge and data on the effects of pulse fishing on the North Sea.
This brought the total number of exemptions for experimental pulse trawling to 84, the last 42 of which were granted on a temporary basis (Haasnoot et al., 2016). Pulse fishing has played a role in diversification in fishing waters: the target species for pulse fishing is sole, which is most prevalent on sandy seabeds in the Southern North Sea, whilst the main target species for beam trawl and twin rig fishing is currently plaice, which is most prevalent in the Northern North Sea.
Many initiatives have been taken over the years to improve the sustainability of the fisheries sector. The Dutch cutter fisheries’ CO2 emissions have been greatly reduced by the introduction of innovative fishing techniques and the contraction in the number of vessels (source: Fisheries in figures). Cutters that meet stringent sustainability requirements can also be granted several forms of certification. Johan Romkes's company, for example, has been granted the MSC label (Marine Stewardship Council (www.msc.nl). Johan Romkes wonders whether many consumers understand the significance of an MSC label. Over the years, his business has participated in several sustainability certification programmes.
About 123 cutters take part in Fishing for Litter, a programme in which fishermen voluntarily collect refuse on deck and bring it back to port with them for recycling. ‘At the end of the day it's all about the future of those currently on board, your nephews and sons: the new generation. Sustainability is focused both on taking care of nature today and on protecting nature for tomorrow so that the new generation can continue to earn a living close to and by virtue of the nature around them.'
Family business and upscaling
Johan Romkes says that he, as one of the owners of the fishing business, was brought up in a commercial and entrepreneurial environment. This is also the case in many family businesses.
'I'm the second generation in the family business and the third generation is being readied to take over. The knack lies in making time in all the bustle of the day to conduct a strategy that will be of benefit to all family members in the business. As a member of the family and the owner I always want to set my shoulder to the wheel. Everything I've got is in the business – my pension, but also the future of my sons and nephews. I want to transfer a profitable business to my successors so that they can continue to make a living.
Loyalty and responsibility are essential, both in the good and the bad times: this is the strength of the family business. It's much less apparent in listed companies. Every member of the family has grown up with the ins and outs of the business, which results in a continual transfer of knowledge. The challenge confronting the family business is to always make rational choices that are in the financial interest of the business – which sometimes requires making sacrifices. As we are all members of the same family, emotions often play a major role in important decisions.'
Almost all businesses in the fisheries sector are family businesses. The large majority of the active Dutch cutter fleet consists of family businesses with one cutter. However, there has been a trend towards consolidation in recent years, towards fewer businesses that have more than one vessel. See also Agrimatie.
Until 2014, the Common Fishing Policy prescribed that undersized juvenile fish or out-of-quota fish were to be thrown back into the sea so that they stay alive or serve as food for other animals in the ecological chain. However, this has changed on the gradual introduction of the landing obligation since 2015, which is the converse of the previous policy. As from 1 January 2019, undersized juvenile fish of all fish species controlled by quota and out-of-quota fish must be landed to promote more selective catches: fishers who catch too many undersized fish or out-of-quota fish ultimately have less of their quota available for marketable catches.
Many fishers say that separating other fish species from your target species is still too complex, in particular with mixed flatfish fishing, as various species live together on the seabed. More information about the landing obligation is available on Agrimatie.
The authorities and fisheries directors of the states bordering the North Sea cooperate in the Scheveningen Group. In 2018, the European Commission decided to defer the landing obligation for plaice by one year to provide fishing companies a little more time for innovations in more selective catches. However, some companies are then required to cooperate in the on-board CCTV registration of discards.
This cutter is beam trawl fishing for plaice throughout the week. Johan Romkes usually fishes for plaice using 100-110 mm mesh size. This week he decided to fish with 135 mm mesh size. It was impressive to see just how many of these large plaice were being caught.
Several Member States are planning to build an artificial island with wind turbines on the Dogger Bank. Various Dutch parties are also currently reviewing the available options. The Offshore Wind Energy Roadmap 2030 posted on www.noordzeeloket.nl shows multi-year plans for the construction of wind parks in the years up to and including 2030. The Dogger Bank is an important fishing area (Hamon, et al., 2017). For this reason, fishing companies think that the plans to build wind parks in their most important fishing areas ignore their interests (Trouw).
Johan Romkes says that the current wind parks are not much of a nuisance, as his business fishes fairly far to the North. Most wind parks have been built around the coastal areas, but the plans for the future are now the major question. Johan Romkes explains that ‘The shrimp and sole fishing sector is already concerned about the loss of income that will result from the construction of wind parks’.
The crew tell me that they fully understand the sustainability ambitions Europe has set down in the Sustainable Development Goals (SDGs). However, the question is whether wind parks will actually achieve the required effect. Many fishers see that large grants are required for the construction of wind parks and that they need an expensive infrastructure. Fishers see, every week anew, just how large the spatial impact of the construction of wind parks in the North Sea actually is.
The cable laying for some wind parks was delayed for many years as a result of legal issues about the area. This then imposes increasing pressure on the payback period due to the corrosive effect of seawater on the wind turbines. The maintenance costs and depreciation period of wind turbines, like those of cutters, need to be taken into account. The crew say that they have little confidence that enough consideration will be given to the fishers’ interests. 'The financial interests of the wind parks are too great.'
New earning models and the future of the fisheries
I ask the crew for their vision of new earning models for the fisheries. The crew think that multifunctional vessels will become more important, that further sustainability improvements will be required, that entrepreneurs will have to be able to explain why they deserve their licence to produce and that the fisheries will need social support. The family business began to make investments in various fishing techniques many years ago and, as I mentioned above, the business can use both beam trawling and pulse trawling techniques. The cutter is also equipped for twin rigging.
Policy and entrepreneurship
Johan Romkes says that he, in his role as entrepreneur, wishes to innovate and make continual developments to build up his company. He also says that this requires a long-term vision and balanced policy decisions. 'We had some major policy changes in the past that impacted our operations.'
Johan Romkes continues, 'I, as an entrepreneur, am always thinking of the future of the company and the financial and emotional stability required for continued growth. Am I going to make some replacement investments, or bring an overhaul forwards to ready the cutter for the coming years? How can I innovate and further improve our sustainability? Are we going to expand our fleet? Are we going to invest in new or alternative fishing methods? Expanding the fleet increases the debt obligations with the bank, but also increases income and reduces the business’s dependency on just one vessel. A new cutter easily costs six million euros – and then the cost of licences and rights, such as the fishing licences for specific waters and quota for each fish species, come on top of that.'
What will the fisheries look like in 2030?
'There will still be fisheries!', the whole family says. Global demand for fish as a healthy food is increasing. According to the FAO, the Food and Agriculture Organisation of the United Nations, the global consumption of fish was less than 10 kg per capita in 1960. In 2016, this had doubled to 20.2 kg (FAO study). However, at the same time social questions about the fisheries are increasing.
The Dutch fisheries fleet has made relatively large investments in alternative fishing techniques. Sustainability will become an increasingly important social issue. Flexibility to accommodate developments will also become increasingly important for fishing companies, for example with respect to the available quota and the ability to make use of various fishing techniques. The crew of the BCK-40 is pained by the negative publicity that fishers often receive. The crew is, as a business, open to initiatives that will make the operations more open and transparent to society:
Fishing entrepreneur Johan Romkes and I, as researcher, rapidly agree on one thing: a practical knowledge of the background to the figures ensures that we all understand each other better – and that this understanding in turn lays the foundations for a good relationship between the authorities and the business community.
I thank the crew of the BCK-40 for their hospitality and openness.