June 7, 2006

Fishermen rake in profits while seafood processors suffer in Norway

Fishermen have been the main beneficiaries of the over NOK5 billion (US$0.82 billion) in catches for species such as herring and mackerel in Norway. 

However, the profits have stayed with the fishermen rather than filtering down to the rest of the industry.

A new report from Fiskeriforskning shows that the fishermen are left with the majority of the profits while the processing industry winds up with none. Scientists Audun Iversen and Bjørn Inge Bendiksen believe several factors can help explain this.

Critics say the system with closed, one-time auctions is pushing up prices. The auction system only allows the industry to make only one bid on the fish that is put out for sale, and each buyer does not know what the other is bidding, says Iversen.

Thus, processors put up high bids to secure their own production and thus the situation favours the fishermen, who get a good price for the catch.

Good quality herring and mackerel are only available in the autumn and early in winter. This makes for a short season but large catch volumes.

The fishing boats have also gotten bigger and can take upwards to two thousand tonnes of fish at a time. Thus, the processing factories has therefore increased its capacity in order to receive larger loads.

This large production capacity stands idle the rest of the year, says Iversen. For fishermen, the money they make in the few months they were out at sea is enough to last, but not for the processors, he said.