I found a departmental hair on an investment stone. This is exactly what happened with the draft law on the second stage of investment quotas in the fishing industry – Soviet Sakhalin

Recently, the State Duma of the Russian Federation held parliamentary hearings on the draft law on the second stage of investment quotas. After many long debates, the controversial document was sent for revision.

The interests of the drafters of the bill and those who will implement this document did not converge. There is a very important reason for this. Three years ago, when the first stage of the investment quotas was launched, the program for the development of the fishing industry envisaged two separate types of investment: in the construction of a fleet and in the construction of fish processing enterprises. The fishermen were very happy about it. Starting a business is much cheaper and most importantly much faster than building a fishing boat, even if it is not too big.

It was like that in the first stage. But the second stage of the investment quotas did not provide for the division of investors – shipbuilders and investors – builders of enterprises. The question was put categorically: either the investor builds both at the same time, or modestly withdraws and does not rely on quota shares.

That’s how I found the scythe on a stone.

No hedgehogs

According to the plan of the Ministry of Agriculture and the Federal Fisheries Agency, the second stage of the investment quotas foresees the distribution of 24 percent of the allowable catch of pollock and herring exclusively for investments – in the fishing fleet and processing plants. As the above percentages will be drawn directly from the total allowable catch (TAC), the shares of companies not involved in investment projects will decrease by tens of thousands of tons of herring and pollock.

Another innovation for fishermen concerns crab auctions. Their participants will include only those companies that plan to build … well, of course, factories and a fleet. Rosrybolovstvo proposes to auction 50 percent. crab quotas. At the same time, only half of the fishing volumes they had before will fall to other companies.

As for sea urchins, clams, trepangs and trumpets, according to the intention of the authors of the bill, all 100 percent of the quotas for extraction of these types of aquatic biological resources (ABR) should be distributed only among investors. He who does not want to build factories and steamships will not see sea urchins like his ears. It will no longer be possible to retrieve trepangs, trumpets and all other WBR on Sakhalin and the Kuril Islands as before.

This is the second stage of the investment quotas that have been developed for the next few years. It is clear that the proposed innovations, to put it mildly, did not go down well with the fishermen.

All that has gone before…

Until the end of the 1980s, at the expense of state subsidies, the then Sakhalinrybprom regularly received brand new seiners and trawlers from domestic and foreign stocks. Then the shipyards of Poland, Germany, Holland worked for the Soviet fishing fleet … And this is not counting the local shipyards – for example, in Nikolaev, Yaroslavl, Klaipeda. Not surprisingly, the USSR had the largest fishing fleet in the world. And it held the 2nd-3rd place in the world in terms of fish production.

Then came the tumultuous 90s. The Sakhalin fishing fleet, privatized by entrepreneurs, was mostly closed, sold abroad, written off for claws or even simply abandoned in ports and port points. Until now, the remains of old MRS and BMRT are rusting on the shores of Sakhalin and the Kuril Islands. According to the most modest estimates, their number reaches 80 units.

This is only the visible part of the abandoned fishing fleet that was once the pride of Sakhalin fishermen. But there are also ships that perished at sea. One BATM “Far East” that sank in 2006, what is worth …

Some love a schooner

In the last few years, 4 fish processing plants have been built on Sakhalin. But when it comes to the fishing fleet, there are only a few who want to invest in vessels. There’s only one reason: it’s painfully expensive. And the scale of most Sakhalin fishing enterprises is such that building their own fleet is simply unrealistic for them.

He is in no hurry to build a fleet and those few enterprises that feel afloat. It is much easier for them not to build a ship from scratch, but to rent it. Or buy a suitable second hand or even third hand seiner. No problem with that. Literally in five minutes on the Internet you can get a cheap fishing vessel. For example, BMP-74-U for only 17 million rubles. Or a Japanese fishing schooner built in 1989 for trap, longline and net fishing for only 13 million (not dollars!). And you can buy again a Japanese crab hunter born in 1992. Gave 46 million rubles. and go crab fishing in peace. Unless, of course, there is a quota for it.

However, Sakhalin’s fishing fleet, although small, is still being built. For example, in August 2022, the trawler “Vladimir Nikora”, built in China by order of the North Kuril base of the Seiner fleet, worth 1.5 billion rubles, came to the Kuril Islands.

And just that day, another trawler, Captain Vdovichenko, began field trials off the coast of the northern Kuriles. The ship was built in a shipyard in St. Petersburg, the investor is JSC “Russian Fishing Company”, which, by the way, very actively supports the second stage of the investment quotas.

The supertrawler “Captain Vdovichenko” can produce up to 80 tons of fish fillets per day. The objects of fishing for him are herring and pollock. It is not yet known what fishing volumes for this vessel will have to be allocated by the OCA in the future.

Big plans

Proposing new rules for allocating investment quotas to fishermen, the drafters of the bill expect to build at least 65 additional fishing vessels and crabbers and up to 20 processing complexes. It is planned to build another 36 facilities to ensure the harvesting of crabs, as well as the processing and storage of sea urchins, clams and other shellfish.

Overall, the financial prospects for future innovation in the fishing industry appear to be quite significant. The cost of developing the second stage of investment quotas, according to preliminary estimates, will amount to at least 500 billion rubles. Of these, at least 300 billion will be spent directly on the construction of fish processing plants and fishing fleets.

Is it possible to create and build so much in the next few years? The Department of Agriculture and the Federal Fisheries Agency are sure: of course it is possible! The main thing is that fishermen have a good incentive. And what better than the opportunity to get investment quotas for mining the currency-intensive king crab, which almost all goes overseas?

The fisheries department believes that the fleet needs to be built and it needs to be done quickly. In 2019, in the first stage of investment quotas, local fishermen committed to build up to 105 vessels in just 5-7 years! And that doesn’t include more than 30 fish processing plants.

According to the Federal Fisheries Agency, 21 plants and 7 vessels have already been built. MPT specifies: not 7, but 10! And another 69 trawlers, seiners and crabs are in varying degrees of readiness. True, 26 ships have not even been laid yet, but this does not bother the officials. The Ministry of Industry and Trade is confident that the entire planned fleet will be launched in the next 3-4 years.

What do we have – we don’t store?

Plans to modernize the inland fishing fleet look quite impressive. However, in the Far East, and in particular in Sakhalin, as already mentioned, the optimism of the industry is not shared.

Shortly before the parliamentary hearings in the Old Square, the issue of the second stage of investment quotas was discussed by the deputies of the Sakhalin Regional Duma. In particular, the following figures were announced: 35 Sakhalin enterprises are engaged in fishing for sea urchin, clams and other things. Of these, 19 are engaged only in producing and selling mussels exclusively. Deprived of their quota shares, businesses could easily go bankrupt and the regional fishing industry would lose around 500 jobs.

“In 2018, contracts were renegotiated for shares of quotas distributed according to the so-called historical principle,” says Maxim Kozlov, president of the Sakhalin Fisheries Association (ARSO). “Despite the fact that the contracts were concluded for 15 years, a year later some of the crab quotas changed hands: the quotas were put up for auction. Thus, the very first stage of the investment quotas reduced the volume of crab production from Sakhalin enterprises from 22 to 16 thousand tons. And how many ships have been built in the fishing industry in the last three years? Units!

The possible losses that the second stage of investment quotas could bring to the regional fishing industry were outlined in his appeal to the State Duma by the governor of the region Valery Limarenko. In particular, the head of the region drew the attention of the main legislators of the country to the fact that due to insufficient development of the document, the regional budget risks losing about 1.7 billion rubles of annual tax revenue.

* * *

As a result, State Duma deputies did not consider the controversial bill. It was decided to create a conciliation commission, which will include the authors of the bill and representatives of the regions – governors, chairmen of legislative assemblies and fishermen.

Will the commission find a compromise solution? Maybe he’ll find it. It must be found.

Sergey Chevgun.

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