The fishing industry is the mainstay of the Faroe Islands economy. Approximately 94 percent of its exported goods (exclusive of services and intellectual property) were fish related products in 2005thats dkk 3,365m out of dkk 3,579m total. Wages and salaries amounted to dkk 6,133m in all, of which dkk 834m were paid out to fishermen and dkk 380m to seafood processing workers. Total wage payments in the fishery sector came to dkk 1,214m i.e. 20 percent of all wage and salary payments in Faroe.
So the fishery sector dominates Faroe economic thinking, and a protracted stagnation in the sector will lead to a crisis in the whole economy, as happened in 1992-93 and resulted in high emigration. The Faroe fishing industry has now benefited from a 10-year upswing. Reduced subsidies, the establishment of a fish auction, and the implementation of a fishing days system (instead of tradable quotas) combined with a system of technical conservation measures has resulted in better times for the home fleet. So the fishing fleet has been through a good cycle lately.
Faroe Fisheries: Faroe fishing can be divided into three main sections:
1) The catching of bottom species, cod, haddock and coley, in home waters for onshore processing and exported as fillets in fresh iced condition.
2) The catching of sea frozen fish, mainly in the Barents Sea, for the industry, catering and retail market.
3) Pelagic fishing, which takes place in EU, Faroe and international waters.
Competitive situation: In general one may say that the Faroe factory trawlers and purse seiners are first-rate ships, producing quality products at competitive prices. Quotas determine their catching and earning prospects. When it comes to the fresh fish fleet catching mainly off Faroe (and partly in Iceland waters), the condition of the boats varies more. There are many older vessels, long-liners and fresh fish trawlers.
The high fuel prices impact heavily on the whole fleet, but in particular the trawlers have suffered from the oil spikes, as their catching method relies much on horse power. The line vessels are less dependent on bollard pull.
At present the combined purse seiners/pelagic trawlers in particular and secondly the filleters/freezer trawlers are the most profitable categories of vessels.
The earning capacity of the fresh fish fleet is slightly lower. These vessels are in terms of quality a mixed lot, mainly older ships, and they sell to the local fish market or processing plants. Some of the catches go to fresh fish buyers abroad.
The fresh fish fleet has for years now turned a reasonable profit, though rarely sufficient for investment in new ships. But a few newly built additions have arrived and been looked upon as particularly positive renewals.
Most ship owners, however, have bought used fishing vessels, 10-20 years old, or have rebuilt existing boats. So the fresh fish (or home) fleet has been upgraded and is now regarded as well kept with good navigational equipment and catching gear.
Fishing future: Total Faroe fish catches in 2005 came to approximately 537,904 tonnes, of which Faroe vessels fished 284,438 tonnes in the Faroe EEZ (exclusive economic zone). Our ships caught 60,603 tonnes around Iceland, of which 5,123 tonnes were cod, haddock and coley (saithe). 192,864 tonnes were caught in other foreign waters.
Total catches in Faroe waters amounted to approximately 674,000 tonnes, of which foreign vessels caught 389,000 tonnes.
The future looks propitious for the big purse seiners and trawlers, provided they get big enough quotas and dont suffer too unreasonable oil prices.
The home fleet, which relies mostly on cod, haddock and coley and is less profitable than the larger ships, is sensitive to the pinch from falling catch rates or low fish prices. Then crewing gets more difficult. So many factors play a role in its prospects. The home fleet landed 134,000 tonnes in 2005 at a value of dkk 1,149m. So this part of the fleet is very important for the onshore fish industry and its supporting service sector.
Fishing Days: The home fleet operates under a system of fishing days allocated to each group of vessels in the fleet and then subdivided to individual ships and boats in each group. Unused days are tradable (within limits and upon conditions) between boats.
The fishing days system must be the best method devised to date to ensure a sustainable industry and safe conservation of fish stocks in a multi-species fishery. The fishing days system put an end to the discharge of fish and seems to be in harmony with nature.
But even if the fishing days system is an excellent alternative to the quota system, it is subject to criticism for its perceived inherent drawbacks. This perception is shared by some fisheries scientists, some politicians, the press and other opinion formers; bastions of social power harbor this inbuilt way of thought as a matter of ideology that the fresh fish fleet gets more efficient by the year. The theories are loosely founded, and one wonders why this focus is so heavy on the least efficient and profitable part of the fishing industry, namely the home fleet, which largely consists of 30-40 year old line boats, pair trawlers and smaller, elderly fresh fish trawlers. So the 130,000 tonnes of demersal fish from the home grounds come under disproportionate scrutiny.
This heavy focus on the catches of the small vessels seems to indicate that communities whose economy depends heavily on natural resources fix their attention on the resources they are most familiar with and leave alone the less known resources such as the international pelagic fisheries in which big ships and big business engage in.
We observe the same tendency in other fishing nations, where the coastal fleet is also under scrutiny. The reason why this part of the fleet is under such social pressure may be that these boats do not have sufficiently strong organizations behind them to communicate their interests to society and fail to prove their relatively limited impact on the environment. This imbalance means that the coastal fisheries are under irresistible pressure from public opinion.
One side effect of this is that the home fleet does not have optimal conditions under which to operate. In the long run this imbalance may lead to further constrictions of its freedom of operations and income. This also looks like being the case in the Faroe public debate on fishing.
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