The interaction - The fishing fleet's contribution to the industry on land

The National Association for the Fisheries and Aquaculture Industry, Seafood Norway, believes that we as a nation should have greater ambitions for Norwegian value creation than selling whole fish to customers around the world.

More activity along the coast

We asked CEO Gunnar Haagensen of Jangaard Export how he thinks the interaction between the fishing industry and the land-based seafood industry works. He has served on the board of Sjømat Norges since 2021, and was elected as the new chairman at the general meeting in March 2023.

- It is a stated goal of the Minister of Fisheries to create more activity along the coast. The Tveiterås Commission's report aims to convey a common desire for more processing in Norway, and not least to create jobs in the north. Activity in the north is crucial for the future of Finnmark, says Haagensen.

Jangaard Export has production in Ålesund and on Averøy in Møre og Romsdal, on Gjesvær in Finnmark, and in Henningsvær, Andenes, Stamsund, and on Røst in Nordland.

The Tveiterås Commission's report "Green value creation and increased processing in the seafood industry" was published in March 2022, and was then sent for consultation.

Want more raw materials

The export statistics from the Norwegian Seafood Council for seafood in February 2023 show another month with a new record. For the eighteenth month in a row, exports from Norway have exceeded 10 billion in a month. Norway exported seafood worth 12.8 billion kroner in February. This is an increase of 1.6 billion kroner, or 14 percent, from the same month last year.

However, Seafood Norway says that high export figures and good prices for some seafood products do not show an accurate picture of earnings and activities in the seafood industry. The industry along the coast is still struggling to keep its wheels turning because they are not sure of getting enough raw materials for their plants.

- We are calling for more mandatory auctions. This is because we want access to the raw material at an equal price. We are concerned that we should be able to bid on the fish. This is something that of course takes time to get started, but as long as most of the cod goes unprocessed to Norway's largest export market, Poland, it is negative for the land-based industry, says Haagensen and adds;

- This is also seen in the profits of the companies; the fishing boat sector has a 23 percent profit, while the land industry has a three percent. That says everything about the competitive situation and the balance of power.

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Want more auctions

We ask Gunnar Haagensen whether mandatory auctioning contributes to more predictability and better results for the agricultural industry?

- It clearly has. The Minister of Fisheries has stated that making fish available to everyone is a social mission that the fleet has. A social mission that goes towards creating more jobs on land.

- The Raw Fish Act was indeed introduced to protect fishermen. Today, it is the industry that is in trouble and needs protection.

- There is no open system today. That is what we want to introduce. The Participation Act was created to protect fishermen. It was not created to give shipowners a monopoly. The way it works without an auction, it is doomed. A forced auction can save it.

Gunnar Haagensen does not want to enter into the discussion about the distribution of quotas between the sea and the coast, but says that the clipfish industry is ready to compete against fresh fish buyers abroad, and must only accept it when small fishing villages that do not have the capital for their own production sell the fish at a higher price.

- We don't want any trade barriers, but we want to be able to bid on the fish and get it without there being a takeover outside the market.

- Ideally, we want the fish to be available to the industry, and if the industry is not able to compete on price, the fish can be exported. In principle, all fish should go to auction. We should not have it cheaper - but we should have access to buy it.

"If the fleet does not know its visiting hours and acknowledge its social mission, they risk that there will be a land rent tax or other obligations sooner or later. If I were a fisherman, I would have the fish at auction, they have nothing to lose from that," says Haagensen.

We are calling for more mandatory auctions. This is because we want access to the raw material at an equal price. We are concerned that we should be able to bid on the fish.

Customs barriers

He says that in the "old days" 75 percent of whitefish went to clipfish. Now that proportion has fallen to less than 50 percent.

- The clipfish industry has traditionally been the one that has been able to pay the highest price, and I think that will continue in the future, but that assumes that we have access to the raw material.

- So we probably have common interests in achieving a higher price. What we don't agree on is that the fleet sells the fish cheaper than we can pay for it, and then we don't get access to buy it.

What do you mean by that?

- We see from the export prices that fish from Norwegian boats is being sold at prices below what we have been willing to pay. So you could say that we have not bought that much, but it takes a long time for the industry to adapt. It is not done in one year to start buying frozen fish, when we have not had the opportunity to do so in the past.

Seen from the eyes of the Norwegian clipfish industry - has a wrong image been created in society that there is little further processing in Norway?

- What has been a misunderstanding is that clipfish is not processed much. It is in practice a cured ham, but overall there is too little processing in Norway. We would like to be able to buy the fish at the same price from the fleet instead of the fleet exporting it directly to Europe - or China, and then we could process it further in Norway.

- We would also like to see better framework conditions and duty-free market access for further processed products. If we could avoid the 20 percent duty that is on further processed products from Norway and into the EU, it would create more jobs and more activity in Norway. And I think we have a common goal there.

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Coincident interests

Norwegian clipfish producers want to buy a larger share of the fish landed in Norway and then process it more here at home. What is stopping you?

- What is hindering us today is market access to the EU for further processed products, as well as the fact that larger players who both have quotas and are on the land side - take over their own fish and often sell it on cheaper than we could have paid for it.

What concrete steps should be taken to achieve more profitable and sustainable value creation from the raw materials we already extract from the sea today - in Norway?

- In general, I believe that both the fleet and the industry have overlapping interests. The most important thing of all is auctioning – it may force itself to happen. The biggest problem is not in Surofi, but in the Råfisklaget district. The discussion came up when the proportion of auctions decreased to 30 percent nationwide.

- The second is market access, and thirdly, the Norwegian authorities must start playing nice with us, says Gunnar Haagensen.

- We are facing an emissions directive from the EU that states that all process water discharged from land-based industry must be treated. It must be so clean that you can drink it. This requires investments in treatment plants of four to 40 million kroner per plant. In practice, a pelagic boat can be located and producing right outside your plant – and not have the requirement, while on land you do have the requirement. If we do not get an exemption, half of the land-based industry will disappear within ten years.

The newly elected chairman of Sjømat Norge is in favor of landing:

- The market is not free. Large players have been allocated quotas and they operate both at sea and on land. The deep-sea fishing fleet has been granted a monopoly and they must therefore be aware of their social responsibility.  

- The rice behind the mirror is the land rent tax. We will probably never get that on the coastal fishing fleet, but you could risk getting it on the deep-sea fishing fleet if the industry and the deep-sea fishing sector do not find a compromise where we can have a solution together. It is about getting the most out of the raw material.

- The position of Seafood Norway is 50 percent on auction, but as a clipfish exporter I believe that all parties benefit from a 100 percent auction, concludes Gunnar Haagensen, CEO of Jangaard Export.

Also read the answer from Sveinung Flem, CEO of Surofi: For the benefit of both parties .