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Food Crisis: Urgent Restructuring Proposed

EU - Yesterday, the European Commission has adopted a package of emergency measures to promote the restructuring of those segments of the European fishing fleet which have been hardest hit by the current fuel crisis, while cushioning its short-term social and economic impacts for those who commit to taking long-term action.

The Commission has singled out the fisheries sector upon a clear mandate from the European Council because of the unique situation that fishers are facing due to a unique combination of constraints on operations due to sustainability considerations, difficult market conditions and high fuel costs.

These actions were first announced on 17 June, when the Commission agreed on the approach it would take to support the industry during this difficult period. The core of the proposal consists of a regime of temporary derogations to the European Fisheries Fund (EFF), allowing funds to be targeted quickly where they are needed most to address the underlying causes of the crisis, and provide short-term support to the hardest-hit segments of the fleet.

The package adopted today takes the form of a Communication outlining the measures and the rationale behind them, and a proposal for a Council Regulation which would establish the necessary changes to EFF rules for a period of two years.

European Commissioner for Maritime Affairs and Fisheries Joe Borg said: "High fuel prices and chronic overcapacity mean that European fisheries are in a time of crisis. The Commission recognises the need to help the sector adjust to the new realities. That is why the action the Commission is proposing rests on three main principles: that we must focus aid on reducing overcapacity, on reducing fuel dependency, and on market measures which can help fishermen raise the first-sale value of their fish. Only in this way can we help establish a truly sustainable future for the industry."

Since 2002, marine fuel prices in the EU have increased by some 240%, and are now in many cases above 0.7/litre. This has led to a severe economic crisis in certain segments of the EU fishing fleet, where fuel costs make up an extremely high proportion of revenues, in particular for vessels using towed gears (trawlers).

Commissioner Borg continued: "The current crisis is very painful for those sections of the EU fishing industry where fuel makes up a large part of costs sometimes, as much as 60% of revenues. However, first sale fish prices have stagnated for the last decade and hence fishermen have not been able to pass their cost increases down the chain."

The package outlined today therefore proposes a multi-dimensional approach to the current crisis, incorporating:

  • emergency measures, consisting principally of temporary cessation aid, to help fishermen cope with short-term pressures while the sector prepares a longer-term strategy;
  • a whole new range of restructuring measures for fleet segments which sign up to Fleet Adaptation Schemes, to be adopted at national level;
  • horizontal measures which fall outside the Fleet Adaptation Schemes, including increased EFF aid-intensity for fuel-saving equipment, expertise in relation to energy audits and restructuring plans, expanding the rank of beneficiaries eligible for early retirement under the EFF, and promoting research on fuel-saving technologies;
  • market measures under both the EFF and the Common Organisation of the Market, including a new price-monitoring observatory, and additional financial support for stakeholder-led initiatives, and
  • measures designed to facilitate the use of the EFF, so as to ensure fast and targeted action by Member States.

In addition, the Communication also examines possible changes to the de minimis rules for the fisheries sector, social aid in the form of decreased social security contributions, and the scope for additional funding outside of the EFF.

The overall objective of sustainable fisheries remains the foundation for all actions under the Common Fisheries Policy. The Commission is also concerned to ensure that any action taken is non-discriminatory and does not lead to a distortion of competition between fishers from different Member States. The EU financing tool for realising the strategy will be the EFF.

In addition to the EFF the Commission has pledged up to another 600 million to fund this temporary specific action to help the fishing industry to adapt to high fuel prices. The Commission anticipates that the Council of Ministers will be able to discuss the package adopted today in the course of the month of July, with a view to ensuring its rapid entry into force.