Norwegian Fishery Policy and Industry /
Export Challenges
The
Norwegian-American Chamber of Commerce
Minister
of Fisheries, Mr. Svein Ludvigsen - 4th
February 2003
Slide-presentation (powerpoint)
Ladies and gentlemen:
It is indeed a pleasure for me to be back in America and to be
invited to this meeting with the Norwegian-American Chamber of Commerce. The
purpose of my present visit to the USA and Canada is to discuss key issues in
fisheries and aquaculture, trade matters and items related to safe vessel
traffic and prevention of pollution of the marine environment.
As of January 1st this year my Ministry has taken
on the responsibility of oil pollution prevention in Norwegian waters. A
serious and important responsibility as we are preparing for increased traffic
of oil tankers along our rough and vulnerable coast.
Oil
pollution prevention
I have already - on February 1st - discussed US
experiences with experts in Seattle, knowing that Americans have made painful
experiences with oil spills from accidents such as the "Exxon Valdes"
back in 1989. Also in Europe we have seen similar accidents. The last major one
happened off the Spanish coast few months ago, involving the 25 years old oil
tanker "Prestige" with a cargo of about 77,000 tons crude oil.
But, such matters are not on my agenda for this meeting,
although prevention of pollution and a clean environment are important elements
in our efforts to secure and supply safe seafood products to consumers world-wide.
In this introduction I will focus on the following topics:
- sustainable resource management,
- sustainable aquaculture management,
- industry, trade and market access, and finally
- food safety and the marine environment
Norwegians have made a living from fishing, whaling and
sealing, since time immemorial. This has, as you probably know, been the very
basis of life and culture on the coast, and the fishing industry is still one
of Norway’s most important export industries. Efforts to steadily improve the
management of marine resources therefore have high priority, in order to ensure
that commercial fishing and aquaculture remain a major industry in Norway for
all time.
The reason why fisheries have always been such a central
component of Norwegian business and industry is that Norway controls some of
the richest fishing grounds in the world. The North Sea, the Norwegian coast,
the Barents Sea and the polar front in the Norwegian Sea are all highly
productive areas, and major fish stocks spawn right off our coast.
The coastline is also particularly well suited to
environmentally friendly fish farming. The aquaculture industry has grown
tremendously in recent years, becoming a new, valuable industry for coastal
areas. Last year - in 2002 - Norway exported farmed salmon and trout worth
about NOK 11billion (or about USD 1.4 billion).
Since Norway’s economy is heavily dependent on the
exploitation of living marine resources, sustainable management of fish stocks
is essential to safeguard the future of our fishing industry. Nature will of
course always play a key role in defining fishing possibilities. But despite
the whims of nature, I believe that it is both possible and necessary to pursue
a policy of sustainable management of the living marine resources.
During the last 30 years Norwegian fisheries, once virtually
free and open for all, have been transformed into an industry, regulated by
quotas and licences, but highly profitable and sustainable. This industry, once
heavily subsidised is now basically without subsidies.
At the end of the 1960’ies, the total fishing capacity had far
exceeded the reproductive ability of available resources. At the same time
there were still very few limitations on fishing efforts. It gradually became
obvious that severe action had to be taken. The present Norwegian quota
allocation system has evolved over time, and currently applies to all our major
fisheries and vessel groups.
Today the Norwegian model for sustainable marine resource
management rests on a set of key principles. These are:
- scientifically based advice,
- an ecosystem multi-species approach,
- economically viable and biologically sustainable harvesting
strategies,
- adequate regulations and
- efficient control and enforcement schemes.
The challenge to day is to develop future fisheries management
regimes with an absolutely new concept in mind. The concept of long-term
sustainability is not new. In present day's Norwegian fisheries management we
have, however, added strategies to meet our common responsibilities to maintain
marine biodiversity. The ecosystem
approach, as it is called, requires new thinking, new knowledge and new
policies.
Management
of whales and seals
Norwegian whaling and sealing, presently on a very
limited scale, are both results of Norwegian multi-species considerations and
the ecosystem approach. Whaling and sealing have always been important means of
livelihood for Norwegian coastal communities.
We are hunting minke whales, harp- and hooded seals. These
species, together with other marine mammals, are top predators in the
ecosystem. They consume large volumes and a great variety of fish and
crustaceans.
Scientific
research show that the Northeast Atlantic and North Atlantic Central stocks of
minke whales are in a healthy state and in no way threatened with extinction.
Quotas are set by applying the Revised Management Procedure (RMP), which has
been developed and adopted by IWC - The International Whaling Commission's
Scientific Committee. This is a highly conservative management procedure, and the Norwegian
quotas are well below the reproduction level of the stocks concerned.
International
resource management
Before I turn to aquaculture I would also like to add a few
words on the international dimension
of Norwegian management of living marine resources. This will in many ways
constitute an inseparable part of our resource management policy.
Despite the introduction of Exclusive Economic Zones (EEZ) of
200 nautical miles in the late 1970’s, fish continue to swim and migrate
without respecting zones or other similar limitations.
In fact, as much as approximately 90 % of the fish stocks that
occur in waters under Norwegian fisheries jurisdiction are shared with other
countries. Consequently, co-operation with other countries to ensure the sustainable
management of these resources is essential to Norway.
Our basic position is that resources are to be managed
prudently and that those countries that shoulder the burden should also be the
ones that harvest the benefits. However, the realities of international law and
politics often dictate a more pragmatic course, and compromises may have to be
made to secure long-term viability of the resources.
Norway has negotiated a series of bilateral and multi-lateral
framework agreements with our neighbouring countries that provide for annual
negotiations to identify and decide on management measures and division of
quotas on shared stocks.
Let me then turn to Norwegian aquaculture.
A
little more than thirty years have passed since the first attempts to grow
salmon in net cages in the sea. The history of Norwegian aquaculture is so far
basically a history of Atlantic salmon and Rainbow trout. The total export
value of these two species amounted in year 2002 to about 1.4 billion USD. For
a small country like Norway this represents a substantial value.
When explaining this successful development, a number of
different factors will be of key importance:
To begin with, nature has provided Norwegians with a long and
fertile coastline - with a huge potential for marine production.
There is also good public infrastructure in our coastal
regions.
Also, Norway has access to major fishing resources. This is
especially important for production of feed for aquaculture.
We have long traditions in fisheries. This has given important
knowledge and experience in processing, sales, exports and marketing.
Finally, the Norwegian tradition of openness and willingness
to share information, has been instrumental in securing rapid aquaculture
development in nearly all coastal areas.
Resources
allocated to aquaculture research have been substantial. It has resulted in lower mortality rate,
more efficient breeding, faster growth and better fish health. Today our focus is on new species in aquaculture, and
considerable efforts are directed especially at farming of cod and halibut.
So, how does the government intend to meet the future?
Our ambition is clear: we wish to see a marine sector, which is in the
forefront when it comes to acquisition of knowledge and expertise.
Most of us acknowledge the fact that governmental resources
are limited, and this means that we need to target our effort.
I am heading the Cabinet's Committee on Marine Development,
consisting of seven Ministers of the Cabinet. The Committee is focusing on measures
to increase the value creation in the marine sector and to utilise the huge
growth potential embedded in this sector in Norway.
Industry,
trade and market access
Norway's seafood exports consist to a large degree of whole
fresh, chilled or frozen products. But,
of course, we also supply a number of processed products.
These days the processing industry, especially whitefish
(basically cod) fillet production, is facing major challenges and the situation
looks bleak. Last year we saw a number of bankruptcies, especially in the
whitefish sector, and for most cases in our northernmost counties.
The globalisation of the seafood sector has created a
different situation with increased competition for fish caught in our waters.
Fish has indeed become a global commodity.
Also, today our industry is struggling with a very strong
Norwegian currency as well as high interest rates. Lately we have seen positive
signs with reduced interest rates, but our competitive force is still
suffering.
We now face serious competition from processors in Eastern
Europe, such as the Baltic States, but also from companies in far away China.
When producing cod fillets based on Norwegian raw materials, the production
costs in China amounts to about NOK 3 per kilo while similar costs in Norway
will, at best, be five times as high - NOK 15 per kilo.
Still, my Ministry maintains its vision of the marine sector
as a vehicle for a secure future for coming generations.
And we see proof that at least some investors and businesses
representatives share our belief and vision. Only last fall I had the pleasure
of opening Norway Seafoods new fish processing plant.
This is located in the city of Hammerfest in Finnmark, our
northernmost county. Behind this new
plant are investments amounting to more than NOK 150 million. And Norway
Seafoods will not stop at that - major investment schemes are also made for new
vessels and upgrading of older ones. The business strategy includes increased
use of available resources, including utilisation of by-products - and,
importantly - production 364 days a year.
The government's policy for value adding in our marine sector
has a long term perspective, catering more for todays youth, than for our
generation. The sea - or what I like to call the blue field - can
provide the basis on which we can build a future. A future for coastal
communities that will serve to halt, and hopefully also reverse, the present
urbanisation.
To achieve our goal we need to focus on research and
competence. We need to further develop our seafood product range using our
first class raw materials to produce high quality, "ready to cook"
products for homes, food-service stores or restaurants.
Norway Seafoods, as I already have referred to, is but
one of many Norwegian producers of consumer products. It is, however, one of
Norway's major players in the seafood sector - and one with a strong focus on
product development and a market oriented productions.
Based in Oslo with processing plants and vessels located in
various regions, and abroad, the company is well known to many in the US
seafood sector. As all major Norwegian
seafood companies, Norway Seafoods, offers a large variety of products. One
such product - the "Lutefisk" is a true Norwegian delicacy and
favourite.
A key ingredient in preparing this dish is caustic soda.
Please try it you ever get a change. I guarantee you that this experience will
never be forgotten. Either you will love this dish - or hate it, there is no in
between ! Also remember that this dish dates back to the Viking age - it really
is historical (or hysterical).
We need new products for a new millennium and we are moving in
the right direction. At the end of the last millennium our attention turned
more and more to resources wasted. We utilised only a limited part of each
single fish in our value creation. Looking to Asia we saw quite a different
picture. Everything was put to use.
Now, we have made a few steps towards increased use of
by-products. But still, we have much to gain and a long walk ahead. But this is an interesting avenue to travel -
although risky and challenging. We see a need for long term investments and
patient investors. We also need research, creativity and innovation.
I am, of course, talking about biotechnology.
A special and already a commercially successful product is
marketed by the Norwegian company Biotec Pharmacon. The company is based in my home town -
Tromsø - in the northern part of Norway.
It is an excellent example on how to commercialise results
from research and science. The company offers a variety of products, many based
on marine raw materials, such as this ultra-pure enzyme product. This unique
product has opened up new markets for marine based products and it is marketed
world-wide.
It is practically a standard enzym used by scientists in
genetic research and diagnostics and also in DNA forensics. During the last
years sales world-wide have increased by 30-40% annually, and it is among the
"best sellers" in this product category here in the US.
Believe it or not, this very, very expensive product is
produced from processing water in the shrimp industry ! Actually from the
thawing water. It is not many years ago since absolutely no-one would even
dream of finding much of value in this !
A lot of research has, as you can imagine, been put into this
product -since the first tests in 1993. It is really rather fascinating and
even more so when we are told that 4,000 litres of thawing "shrimp
water" is necessary to produce 30 kilo dry substance which in the end will
yield 1 gram of ultra-pure enzym. From
4,000 litres to just 1 gram !
Already we see a number of other Norwegian biotechnology
products based on marine by-products finding customers in many different market
segments - such as cosmetics, pharmaceuticals and telecommunication. The list
could have been made much longer. The point is, however, that by grasping such
new possibilities and focussing on research and innovation, we can achieve our
goal, our vision to create a secure future for new generations.
Market
access
The globalisation process that has taken place since the
Second World War has, as I have mentioned, also affected the fisheries sector,
resulting in a significant increase in trade with seafood products, especially
during the last decades.
Fisheries and aquaculture products are important as sources of
food, employment and revenue in many countries and communities. The fact that
the potential for growth in traditional fisheries is very limited makes
aquaculture increasingly important.
In my opinion there is a great potential for a further growth
in trade with seafood products world-wide. Despite several rounds of
negotiations, previously in GATT (General Agreement on Tariffs and Trade) and
presently in WTO (World Trade Organisation), average tariff rates on fish and
fish products are still rather high. In addition the large number of non-tariff
barriers such as standards, licences and import quotas are also severe
restrictions on trade.
For both USA and Norway trade in seafood is of major importance.
We therefore work together in the ongoing WTO-negotiations in order to secure
improved market access for seafood products. It goes without saying that the
US-proposal in WTO negotiations to phase out all tariffs on industrial
products, including seafood, within the year 2015, was applauded by the
Norwegian fishing industry.
As well as being a major seafood exporter, Norway also has
substantial imports from countries such as Russia, EU member states and
USA. The import from USA is mainly cod used in the production of dried salted
fish exported to Brazil and EU.
Until 1991 the USA was an important market for Norwegian
salmon. Norway’s market share of Atlantic salmon in USA was as high as 60%.
This situation changed dramatically in 1991 when exporters of Norwegian salmon
were accused of dumping, and the import of whole Atlantic salmon from Norway
was subject to a 26 % dumping duty.
Today the Norwegian export of whole Atlantic salmon to the USA
is limited, and Chile has taken Norway’s place as a major supplier of salmon on
the US market. At the same time we have experienced positive developments in
the export of frozen filets of cod, fresh and frozen salmon filets and smoked
salmon, products not subject to dumping duties. This places USA as the 9th
largest export market for Norwegian seafood in 2002 with an export value
amounting to approximately 160 million USD.
Being a small country, Norway is vulnerable for arbitrary
actions and unilateral measures, such as anti-dumping measures. It is therefore
important for Norway to strengthen the international trading system to ensure
equitable and predictable conditions for competition. We strongly support negotiations in the WTO in order to clarify
and improve the relevant rules and regulations.
Let me, on the subject of market access, add that the US has a
great potential as a market for additional Norwegian seafood exports.
With its 280 million inhabitants, consuming only about seven
kilo seafood per capita a year, opportunities should clearly be available. More
predictable trade conditions for the Norwegian exporters could pave the way for
increased seafood export from Norway.
Food
safety and the marine environment
Finally, I will turn
to matters that are becoming increasingly important to the seafood industry and
to us all as consumers - food safety and the environment.
In recent years
consumers have become increasingly focused on the quality of the products they
are eating. I, as well as everyone else in the Norwegian seafood sector, want
consumers to perceive Norwegian seafood as safe and delicious to eat. We
must therefore ensure that the marine environment is clean, and we must have
systems that ensure that products are safe to eat. These basic requirements can
only be met by means of active efforts from both the authorities and the
industry.
A healthy marine environment is an essential basis for
harvesting marine resources. Coastal and marine environments are under increasing pressure throughout
the world. Norway is no exception. The
Norwegian Government has therefore recently submitted a White Paper, which
outlines a new comprehensive strategy for the management of our coastal and
marine environment.
In the White Paper we identify four issues as main challenges
facing both authorities and industry. These are:
- improvement of the knowledge base,
- application of new management principles like the ecosystem
approach and the precautionary principle,
- more efficient enforcement of the regulations, and
- reduction of by-catches.
Concerning aquaculture the White Paper focuses on items such
as the need to reduce the number of escaping salmon from fish farms.
Furthermore, the establishment of guidelines for environmental testing of
medicine used in the aquaculture industry is increasingly important.
In aquaculture Norwegian technology and equipment producers
found a large and quality focussed home marked. Gradually this industry has
become more and more international and today Norwegian technology is known
world-wide.
Chain of traceability information (AKVAsmart)
One of our major companies in this industry - AKVAsmart
is supplying a variety of products such as feeding systems and software
programmes in accounting, feeding control and monitoring.
Also, based on increased market demands for knowledge and product
safety, as well as new demands in legislation, AKVAsmart has developed
electronic based traceability systems.
These systems collect data from the entire value chain, from
spawning, production of fry, feeding of the fish through the on-growing phase,
from harvesting and logistics to the buyer.
Traceability
in the marine sector - Tracefish
Traceability in the marine sector has been given priority for
several years and Norwegian expertise is widely recognised. A major EU-funded
research project called Tracefish (or more precisely "Traceability of Fish
Products") has been running from year 2000 till 2002 and was headed and
co-ordinated by the Norwegian Institute of Fisheries and Aquaculture.
Also, I might add, located in Tromsø.
Let me then return to what I started off with.
Vessel traffic along the Norwegian coast is, as I mentioned,
expected to increase, resulting in a higher risk of accidents and associated
pollution. We therefore wish to strengthen control and surveillance of the
coastal traffic, particularly regarding high-risk maritime transport.
Let me end by pointing out that sustainable management of fish
and aquaculture products requires continued effort and willingness to establish
new principles based on knowledge and experience.
It is my hope for the future that we through international
co-operation can contribute to a proper global resource management as well as
an increased production of aquaculture products.
Both Norway and the USA - with our long coastlines - can play
an important role in order to fulfil such ambitions.
Thank you for your attention
