Thursday, 16 June 2022

Fishing Fuel Costs at Tipping Point

 

Typical re-fuelling scene in Newlyn - boats of this size uses over 3,000 litres a day when fishing.


Many fishing vessels are facing a cruel choice between tying-up or going to sea to make a loss.

NFFO members are providing landings information that illustrate although reasonably healthy grossings are being made, after deductions for fuel earnings for crews are risible.

  • In one example a vessel in the south-west made a landing worth £11,0489 but fuel costs swallowed £10,416.
  • In another case, a landing of £44,176 and a fuel bill of £29,068 left £1516 to be shared amongst 8 crew.
  • A third example was an inshore vessel after eight days fishing made £8706 but faced a fuel bill of £5234, leaving £927 for the crew.

These examples illustrate that the current situation is unsustainable are at the point beyond which vessels will have to tie up.

The NFFO has made the case to ministers for a support package. Fuel costs are already supported in France and Spain through emergency measures.

The Government’s response so far has been that every economic sector is hurting because of high energy costs and there is no case singling out fishing for special treatment, despite the uneven playing-field with Europe. Whether the Government will sustain this hardnosed approach in the face of widespread tie-ups, with knock on effects for the whole supply chain, is for discussion.

Contingency Plan

Fishing is an area of primary production that is of enormous regional, economic and cultural significance but is beset by a wide range of challenges. The NFFO had to fight hard for a standalone support scheme when fishing was left out of terrestrial schemes during the covid lockdown. Markets have now largely recovered but high fuel costs are undermining the viability of the fleet. No doubt there will be a market correction at some point but by then the damage will be done. There is an urgent need for Treasury intervention now and in the longer term for a contingency plan to deal with these kinds of shocks. Simply put, unlike many other industries, fishing vessels are price-takers and cannot simply pass on higher costs to the consumer.

Repurpose Existing Funds

Many in the industry are of the view that at least some of the funds allocated to the fishing industry should be repurposed to deal with this crisis. The EU has unlocked funding support for member states under a crisis mechanism of the European Maritime and Aquaculture Fund (EMAMF) and are in the process of utilising unspent European Maritime and Fisheries Fund (active between 2014-2020) to deliver a second round of support. The UK contributed to the EMFF scheme when it was a member of the EU, so a second round of support would potentially make the UK eligible to claim funds. https://thefishsite.com/articles/eu-to-support-aquaculture-businesses-hit-by-russia-ukraine-war

The EFRA Parliamentary Committee is currently examining the effectiveness of the UK Fisheries and Seafood Fund and, depending on the Committee’s report there might be scope for repurposing some of the £100 million allocated to fishing for that purpose.

Spasm

We have witnessed these kinds economic of spasms before. But they can create lasting damage – first and foremost in recruiting crew – if the government adopts and maintains a laissez faire approach.

The NFFO will continue to make the case for financial support. We have learnt from experience that the Government always says no – until it says yes.

Full story courtesy of the NFFO website.