CANADA: Government of Nova Scotia "invests" CAD 25 million in aquaculture company

The Government of Nova Scotia is providing some subsidies to Cooke Aquaculture, a Canadian fish farming company.

The "investment" includes a CAD 16 million (USD 15.6 million) interest-bearing loan and a CAD 9 million (USD 8.8 million) forgivable loan through the Nova Scotia Jobs Fund and jobs. Of the CAD 16 million interest-bearing loan, CAD 4 million (USD 3.9 million) can be forgiven based on research, development and commercialization of innovation in the aquaculture industry.

COLOMBIA: Subsidies to aquaculture, contingent on export

Aquaculture seems to be spared (at least from now) from new disciplines on subsidies to fisheries.

Fish farming has become, over the years, an important source of supply of fish products. This is the case in developed countries (e.g. Norway) and in developing economies (e.g. China, Chile, Vietnam, etc). The growth in this industry is such that we could witness very soon aquaculture overtaking capture  fisheries in terms of supply of fish products for human consumption.

Some countries do realize the key importance of this sector and are providing financial help to fish farmers. A few days ago I stumbled upon a Colombian scheme whereby fish farmers involved in the production of shrimp, tilapia and trout receive subsidies for “inputs”, on condition that they export their produce.

According to the information posted in the website of Colombia’s  “Ministerio de Agricultura y Desarrollo Rural” the programme is funded with COP Colombian Peso 5,000 million (USD 2.8 million).

Here is the link to the aforementioned website (in Spanish) announcing the scheme:

http://www.minagricultura.gov.co/07presupuesto/07a_cin_acuicul.aspx

And here the link to the full text of the scheme:

http://www.acuiculturaldia.com/Documentos/reglamento_tecnico_iae_mayo21_2010.pdf

CHILE: subsidies for the salmon farming sector

Even if the titled of this blog is fisheries subsidies the readers will have noticed that, from time to time, posts appear on subsidies granted to the aquaculture sector.

Needless to say that fisheries and aquaculture have cross-linkages. These linkages may be weaker or stronger depending on a number of factors, e.g. the famed species. The nature of the linkages may also differ, in some cases it is through the environment that the linkage exists (e.g. fishing down the food chain to produce fish feed, escapes of farmed fish, etc.) in other cases the linkages might be of through the market (e.g. famed species competing with wild catch species).

Now, after with this introduction, let’s have a look at the subsidies provided by the Chilean government to the salmon farming industry, the second world’s largest producer of salmon after Norway. This industry suffered a major set-back in 2009 because of the outbreak of Infectious Salmon Anemia (ISA).

To help companies survive the crisis the Chilean government is providing through an agency called CORFO (Corporación de Fomento de la Producción), the Chilean Economic Development Agency, government backed guarantees to banks so that they can loan funds to companies in the salmon farming industry.

According to the information published in CORFO’s website the government is providing guarantees up to USD 8 million per company (producers or suppliers). The trade press has mentioned that around USD 400 million in guarantees will be available.

Here is the link to COFO’s website with the information (in Spanish) on the above guarantees:

http://www.corfo.cl/lineas_de_apoyo/programas/cobertura_para_el_cluster_del_salmon

Here is an article of the Diario Financiero on the subject:

http://www.df.cl/portal2/content/df/ediciones/20090805/cont_118516.html

NORWAY: fisheries subsidies in political parties' manifestos. Part I the Centre Party

On 14 September 2009 general elections took place in Norway. It is likely that the left wing coalition in power before the elections will stay and govern for the next four years.

I write "likely" on intent because one of the parties, the Socialist Left Party (Sosialistisk Venstreparti or SV), has pledged to voters that it would oppose the opening of the fishing grounds around the Lofoten and the Vesterålen islands for the exploitation of oil. At the time of writing this post negotiations among the concerned parties (Ap, SV and Sp) for the continuation of the coalition are still ongoing.

Fisheries, even though of very modest importance when compared to other economic sectors (e.g. energy) is still an importance constituency for most political parties in this country.

I went through the election programmes of some of the main parties looking for their pledges in fisheries and aquaculture. I must confess that it was a fishing (for subsidies!) expedition. Here is the catch for the Senterpartiet (Sp). This party, with farmers as its main constituency, participated in the previous government. These are some of the proposals

• With the help of increased "economic means" stimulate the growth in harvests and catches of populations of seals and whales so that stocks of edible fish can grow and pay due consideration to Norwegian hunting traditions and hunting environment.
  

As my translation might not reflect all the nuances of the Norwegian origional I copy here the Norwegian text:

"Gjennom økte økonomiske virkemidler stimulere til økt høsting og fangst på bestandene av sel og hval, for igjen å kunne øke bestandene av matfisk og ta vare på norske fangsttradisjoner og fangstmiljø."

• Uphold the "Råfiskloven" (whereby fishermen's sales organisations act as monopolies for the first sale of some fish species, see my post of 26 June 2009 "NORWAY: sales monopolies - supporting fishermen without subsidies?") and the "Deltakerloven" "Particpants law"),
  
  Ensure a decentralised landing structure through the allocation of budgetary resources to the "Transport Regulation" and to landing sites where there is no other alternative to land [or deliver].

On aquaculture the Senterpartiet is proposing to:

• Establish a compensation mechanism for the cleaning and restoration of sites where serious (fish)illness has occurred. The cost of the compensation would have to be shared among, stakeholders, the state and insurance companies.

And concerning the strengthening of the competitiveness of the fishing industry:

• Abolish the yearly fee for the fishing vessels' register and the yearly fee to be paid by aquaculture companies to local authorities.
  
  Oppose the introduction of a "control fee" for the fishery and aquaculture sectors.

The above proposals are noteworthy.

First of all the one related to encouraging, with the help of economic resources, the "harvest" of seals and whales. With the EU banning almost all trade in seal products it seems only logical that subsidies will be the only way to keep this "harvest" alive.

Furthermore, the Senterpartiet wants to maintain the monopoly of the sales organisations and the barriers to the entry in the profession as set-out in the "Participants' law (Deltakerloven). This is perfectly in line with the tradition of a party which has farmers as its main constituency.

The proposal to subsidise the construction of landing sites and the transport of fish is not a surprising one. Indeed, the previous government had launched a vast subsidy programme for fishing infrastructure (see my post of 21 March 2009 "NORWAY: hundreds of millions of krona for fisheries specific infrastructure").

Such policy explains Norway's defence at the WTO of subsidies to fisheries infrastructure. In Norway's written submission to the WTO fisheries subsidies negotiations (TN/RL/GEN/144 of 26/01/2007) we can read "OECD figures on transfers demonstrate that, on average, around 70 per cent of the transfers are used to finance either biological research and fisheries management systems or are measures financing infrastructure, such as harbours and fishing community installations. These are all measures that the majority of WTO Members agree should fall outside the scope of the new discipline."

So, it seems that according to Norway, subsidies to fishing infrastructure do not have negative impacts on fisheries resources.

Finally, it is more than clear that the Senterpartiet would have serious problems with the introduction of "cost-recovery" fisheries in the fisheries and aquaculture sector. The proposals to abolish fees and to oppose the introduction of a "control fee" are a clear illustration of this. This is in stark contrast with the positions of some key members of the WTO "Friends of Fish" group that consider that the non-recovery of fisheries management costs (including control) is a substantial subsidy.

Here are links with the proposals (in Norwegian) of the Senterpartiet for the fisheries sector:

http://produksjon.senterpartiet.no/article.php?articleID=34280

http://www.fiskebat.no/files/documents/spfiskeri.doc

NORWAY: loan from government agency to ailing cod farming company

Sponfish ASA, a company active in cod farming in North Norway, obtained in June 2009 a loan amounting to NOK 40 million (USD 6.6 million) from Innovation Norway. The loan has first instalment of NOK 11 million is payable in January of 2011 and the balance, NOK 30 million, in October 2012.

Sponfish ASA has experienced, like other cod farming companies in Norway, serious financial difficulties in the past months.

Innovation Norway (Innovasjon Norge in Norwegian) is a state owned company that “promotes nationwide industrial development profitable to both the business economy and Norway’s national economy, and helps release the potential of different districts and regions by contributing towards innovation, internationalisation and promotion.”

Here is the link to a webpage (in Norwegian) of Sponfish ASA announcing the loan:

http://www.sponfish.no/Sponfish+ASA+sikrer+finansiering+fra+Innovasjon+Norge.9UFRzU0T.ips

The financial report for the first quarter of 2009 can be dwonloaded from this page:

http://www.sponfish.no/Rapport+for+1.+kvartal+2009.9UFRzU1U.ips

And here a link to a webpage in English presenting Innovation Norway:

http://www.innovasjonnorge.no/system/Global-toppmeny/English/

NORWAY: communal subsidies to aquaculture

Fish famers in North Norway are experiencing difficulties in getting the money needed to purchase licenses for farming salmon. The price for such a license is NOK 8 million, except in Finmark , where the price for a license is NOK 3 million (see my post of 30 November 2009).

In the commune of Ballanagen, the local authorities have decide to grant a “soft loan” (interest free) amounting to NOK 400.000 to Ballangen Sjøfarm. The reimbursement of the loan will start after two years after the payment to Ballangen Sjøfarm with 5 years to effect the reimbursement.

Here is a link to a press article on this (in Norwegian):

http://www.fremover.no/lokale_nyheter/article4270381.ece

USA: more subsidies for catfish farmers

The U.S. press is reporting about stimulus and recovery funds being provided to the embattled U.S. catfish fish farmers.

In the framework the American Recovery and Reinvestment Act of 2009, USD 50 million has been earmarked to subsidise aquaculture. Baitfish growers and catfish farmers are eligible if their 2008 feed costs were at least 25 percent of their total operating cost. They also are eligible if their feed costs are 25 percent above the average cost of feed from 2003-2007.

Here is a link to an article in the "Arkansas News":

http://arkansasnews.com/2009/05/06/stimulus-money-available-for-catfish-industry/

And here is a link to the Act (see Sec. 102. Agricultural Disaster Assistance Transition. (d) 2008 Aquaculture Assistance):

http://en.wikisource.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009/Division_A/Title_I

NORWAY: cheaper salmon farming licenses in the North of Norway

The Norwegian Minister for Fisheries and Coastal Affairs, Ms Pedersen, announced early November 2008, 65 additional licenses for salmon farming in Norway.

The cost of the license will be 8 million Norwegian Krona, except for Finnmark in the North of Norway where the price for a license will be 3 million Norwegian Krona.

Ms Pedersen, who is from Finnmark, said that she was very happy to be able to make such announcenement.

Here is the offcial press release in English:

http://www.regjeringen.no/en/dep/fkd/Press-Centre/Press-releases/2008/new-licences-for-the-farming-of-salmon-t.html?id=535012

For those understanding Norwegian here is a link to news coverage by NRK, the Norwegian public broadcaster, of the announcement by Ms Pedersen:

http://www.nrk.no/nyheter/distrikt/nordland/1.6299730

CHILE: subsidies for the salmon farming industry

President Bachelet announced on 27/11/2008 a package of measures for the ailing salmon farming industry in Chile.

Among the announced measures Ms Bachelet mentioned financial support for the industry that will take the shape of a new bank guarantee in the framework of the CORFO programme. The government’s sponsored bank guarantee is intended so that salmon farming companies can buy equipment such as recirculation systems, wellboats, waste management but also for to move cages in other sites.

The ceiling of the guarantee will be raised from 50% to 60% of the loans with a maximum of US$ 8 million per loan. The specific guarantee programme should cover a total amount of US$ 120 million. The government expects that the guarantee will generate a total investment of US$ 400 million. According to industry sources a substantial amount of the money will be used to change the production methods so as to eradicate the control the spread of and eventually eradicate the Infectious salmon anaemia (ISA) virus.

Other measures announced by Ms Bachelet concerned additional spending in Research and Development to finance, together with Norway and Canada, activities such as the conclusion of the sequencing of the salmon genoma. Other R&D initiatives include research to assess whether the ISA virus has affected other areas.

Finally Ms Bachelet suggested measures to make sure that “workers in the salmon farming industry do not pay the price as they are not guilty of what is going on in the industry”. Among the suggested measures Ms Bachelet mentioned a system to monitor the level of employment in the industry.

The full text of the speech of Ms Bachelet with the announcement of the measures can be found here:

http://www.prensapresidencia.cl/view/viewArticulosGeneral.asp?codigo=4967&tipo=Discurso