PROFITABILITY OF THE EU FISHING FLEET

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3 DIRECTORATE-GENERAL FOR INTERNAL POLICIES POLICY DEPARENT B: STRUCTURAL AND COHESION POLICIES FISHERIES PROFITABILITY OF THE EU FISHING FLEET NOTE

4 This document was requested by the European Parliament's Committee on Fisheries AUTHORS Joint Research Centre of the European Commission, Italy: Alessandra BORRELLO, Arina MOTOVA, Natacha CARVALHO RESPONSIBLE ADMINISTRATOR Irina POPESCU Policy Department B: Structural and Cohesion Policies European Parliament EDITORIAL ASSISTANCE Virginija KELMELYTE LINGUISTIC VERSIONS Original: EN ABOUT THE PUBLISHER To contact the Policy Department or to subscribe to its monthly newsletter please write to: Manuscript completed in July 2013 European Union, This document is available on the Internet at: DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorized, provided the source is acknowledged and the publisher is given prior notice and sent a copy.

5 DIRECTORATE-GENERAL FOR INTERNAL POLICIES POLICY DEPARENT B: STRUCTURAL AND COHESION POLICIES FISHERIES PROFITABILITY OF THE EU FISHING FLEET NOTE Abstract This briefing note is intended to provide the European Parliament with the latest information on the profitability of the European fishing fleet to be consulted for the current EP report on the reform of the European Fisheries Fund. Economic performance indicators for the EU fishing fleet are provided by Member State and main fishing technology for the year Additionally, estimates on the contribution of the fish catching sector to the national GDP and a quantification of the amount of direct income subsidies and the EFF financial support to the EU catching sector are provided. IP/B/PECH/IC/ July 2013 PE EN

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7 Profitability of the EU fishing fleet CONTENTS LIST OF ABBREVIATIONS 7 LIST OF TABLES 9 LIST OF FIGURES 10 EXECUTIVE SUMMARY BACKGROUND Background on profitability and economic performance indicators Data and limitations Study objectives and structure OVERVIEW OF THE EU FISHING FLEET EU fishing fleet structure EU fishing fleet socio-economic structure EU fleet fishing activity EU fleet fishing production ECONOMIC PERFORMANCE INDICATORS Economic performance indicators for the EU fleet by fishing technology Member State level economic performance indicators by fishing technology Contribution of the fish catching sector to national GDP and agricultural GVA QUANTIFICATION OF SUBSIDIES AT EU AND NATIONAL LEVEL CONCLUSIONS 77 REFERENCES 79 ANNEX 81 5

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9 Profitability of the EU fishing fleet LIST OF ABBREVIATIONS AER Annual Economic Report on the performance of the EU fishing fleet DCF Data Collection Framework DCR Data Collection Regulation DG MARE Directorate General for Maritime Affairs and Fisheries EFF European Fisheries Fund EMFF European Maritime and Fisheries Fund FTE Full Time Equivalents GDP Gross Domestic Product GT Gross Tonnage GVA Gross Value Added JRC Joint Research Centre of the European Commission kw Kilowatt MS Member State STECF Scientific, Technical and Economic Committee for Fisheries Fishing Technologies - DCF categories Drift and/or fixed netters DRB Dredgers Demersal trawlers and/or demersal seiners FPO Vessels using pots and/or traps HOK Vessels using hooks MGO Vessel using other active gears MGP Vessels using polyvalent active gears only PG Vessels using passive gears only for vessels < 12m PGO Vessels using other passive gears PGP Vessels using polyvalent passive gears only PMP Vessels using active and passive gears PS Purse seiners Pelagic trawlers TBB Beam trawlers 7

10 Policy Department B: Structural and Cohesion Policies European Member States BEL Belgium BGR Bulgaria CYP Cyprus DEU Germany DNK Denmark ESP Spain EST Estonia EU European Union FIN Finland FRA France GBR United Kingdom GRC Greece IRL Ireland ITA Italy LTU Lithuania LVA Latvia MLT Malta NLD Netherlands POL Poland PRT Portugal ROU Romania SVN Slovenia SWE Sweden 8

11 Profitability of the EU fishing fleet LIST OF TABLES TABLE 1 EU fishing fleet capacity indicators by fishing technology, TABLE 2 EU fleet employment by fishing technology 27 TABLE 3 Landings in live weight (thousand tonnes) by fishing technology, TABLE 4 Value of landings (million ) by fishing technology, TABLE 5 Belgium - Key economic indicators ( ) by fishing technology, TABLE 6 Bulgaria - Key economic indicators by fishing technology TABLE 7 Denmark - Key economic indicators by fishing technology TABLE 8 Finland - Key economic indicators by fishing technology TABLE 9 France - Key economic indicators by fishing technology TABLE 10 Germany - Key economic indicators by fishing technology TABLE 11 Ireland - Key economic indicators by fishing technology TABLE 12 Italy - Key economic indicators by fishing technology TABLE 13 Latvia - Key economic indicators by fishing technology TABLE 14 Lithuania - Key economic indicators by fishing technology TABLE 15 Malta - Key economic indicators by fishing technology TABLE 16 Netherlands - Key economic indicators by fishing technology TABLE 17 Poland - Key economic indicators by fishing technology TABLE 18 Portugal Key economic indicators by fishing technology TABLE 19 Romania - Key economic indicators by fishing technology TABLE 20 Slovenia - Key economic indicators by fishing technology TABLE 21 Spain - Key economic indicators by fishing technology TABLE 22 Sweden - Key economic indicators by fishing technology TABLE 23 United Kingdom - Key economic indicators by fishing technology TABLE 24 Contribution of the fish catching sector to the national GDP and the agricultural and fisheries GVA (million ) 68 9

12 Policy Department B: Structural and Cohesion Policies TABLE 25 EU fishing fleet direct income subsidies and its contribution to fleet profitability, TABLE 26 EFF implementation and its contribution to the fishing sector in , million 75 LIST OF FIGURES FIGURE 1 Structure of the EU fishing fleet: FIGURE 2 EU Fishing fleet capacity indicators by MS, FIGURE 3 Fishing fleet capacity indicators by Member State and fishing technology, FIGURE 4 EU fleet employment by MS and fishing technology 28 FIGURE 5 FTE to total employed by fishing technology at the EU level, FIGURE 6 FTE to total employed by Member State and fishing technology, FIGURE 7 Average wage by main gear type and Member State, FIGURE 8 EU fishing fleet effort (days at sea) by fishing technology and vessel length group, FIGURE 9 Fishing fleet effort (days at sea) by MS, fishing technology and vessel length group, FIGURE 10 Energy consumption in million litres, at EU level (top) and MS level (middle), and as a % of total energy consumption (bottom), FIGURE 11 Landings in weight and value by Member State, FIGURE 12 Landings in weight and value by the EU fleet ( ) by species, FIGURE 13 EU fishing fleet income and cost structure, FIGURE 14 Cost structure by fishing technology at the EU level, FIGURE 15 EU fleet economic performance indicators 41 FIGURE 16 Key economic performance indicators by MS 41 FIGURE 17 Key economic performance indicators by fishing technology 42 FIGURE 18 Direct income subsidies as a % of GVA and income, by Member State, FIGURE 19 EFF support distribution between priority axes by Member State 74 10

13 Profitability of the EU fishing fleet EXECUTIVE SUMMARY The European Parliament requested JRC to provide a briefing note with the latest information on the profitability of the European fishing fleet. Information used in the present note originates from the 2013 Commission s call for economic data through the Data Collection Framework (DCF). The data call is managed by JRC and feeds into the 2013 Annual Economic Report on the EU Fishing Fleet (AER) released by the Scientific, Technical and Economic Committee for Fisheries (STECF). The most recent data included in the present note relate to the year Additional data sources were used to complement the DCF data, including information held in the EU fishing fleet register and Eurostat. According to information held in the EU fleet register, there were 83,590 vessels in the EU fishing fleet in Over half of the vessels belonged to 3 Member States: Greece, Italy and Spain. Overall capacity of the EU fleet has decreased in recent years, decreasing by 2% in number, 1 in GT and 7% in kw between 2008 and The data submitted by Member States under the DCF covers almost 9 of the EU fleet in GT and kw but only 76% in terms of the total number of vessels. This lower coverage compared to EUROSTAT figures is mainly due to the fact the Greek and Cypriot fleets are not included in the DCF due to non-submission of data. Both national fleets are essentially small scale in nature, characterised by a high number of vessels with low tonnage and power. According to the DCF data, the estimated number of fishers employed in the EU fleet in 2011 (excluding Cyprus, Greece and Estonia) was 127,206, corresponding to 102,467 full-time equivalents (FTE). Five Member States, Spain, Italy, Portugal, France and the UK, contributed to the majority (85%) of the direct jobs generated by the EU fishing fleet in Average wage per fisher 1 in 2011 varies substantially across Member States, ranging from over 70 thousand for Belgian crew to less than 10 thousand for fishers in Bulgaria, Latvia, Lithuania, Malta, Poland and Portugal. In terms of fishing activity, fishing effort in number of days at sea and fishing days deployed by the EU fleet has increased over the years, while production in weight has decreased. According to EUROSTAT figures, total production by the EU fleet in 2011 was around 4.7 thousand tonnes of fish landed corresponding to 6.3 billion in landed value. While total landings have decreased in weight over the period, the total value of landings increased in This trend is somewhat observed in the DCF data, despite this being incomplete due to the non-submission of data by Greece and to a lesser extent Cyprus, and in some cases, due to confidentiality issues at the fleet segment level. Of the Member States that did submit data 2, landings weight amounted to 3.5 million tonnes and 4.9 billion in value in The Danish fleet was the top producer in terms of landed weight with 711 thousand tonnes, followed by the UK (almost 600 thousand tonnes) and France (464 thousand tonnes). However, the Italian fleet was the top producer in terms of landed value with 1.1 billion in landings, followed by France ( 1.05 billion) and then the UK ( 949 million). The top species landed by the EU fleet in terms of weight in 2011 included the pelagic species Atlantic herring (483 thousand tonnes), sprat (382 thousand tonnes) and Atlantic mackerel (360 thousand tonnes). In terms of value, the top species landed in 2011 were Atlantic mackerel ( 390 million) and Norway lobster ( 322 million), followed by common sole and Atlantic cod. 1 Excludes unpaid labour 2 Excludes Greece and Spain 11

14 Policy Department B: Structural and Cohesion Policies The total amount of income generated by the EU fishing fleet (excluding Cyprus and Greece) covered by DCF data was 7.26 billion, an increase of 7% compared to This amount consisted of 7.02 billion in fish sales (97% of the total), 131 million in nonfishing income, 12 million in fishing rights rental income and 98 million in direct income subsidies (less than of the total). Total costs incurred by the EU fleet (excluding Cyprus, Estonia 3 and Greece) amounted to 6.69 billion 4, around 92% of the total income. The main costs included: 2.13 billion in labour costs (32% of total operating costs); 1.5 billion in energy costs (23%); 1.02 billion in other variable costs; 571 million for repair and maintenance and 598 million in other fixed costs. The EU fleet spent 63 million in leasing fishing rights and 776 million in depreciation costs (reduction in capital value due to wear and tear). An additional 101 million in opportunity costs of capital were estimated for the EU fleet in The data available suggests that there has been an overall improvement in the economic performance of the EU fleet over the last four years ( ). The amount of GVA generated by the fleet (excluding Cyprus, Estonia and Greece) in 2011 amounted to 3.4 billion. Gross profit was estimated at 1.29 billion and net profit at 410 million. In absolute terms, the Spanish fleet generated the highest GVA in 2011 ( 839 million), followed by the French ( 591 million) and Italian fleets ( 583 million). The Italian fleet generated the highest gross profit ( 303 million), followed by the UK ( 202 million) and French ( 181 million) fleets. The UK fleet generated the highest net profit ( 158 million), followed by the French ( 107 million) and Italian ( 80 million) fleets. In relative terms, the Portuguese fleet generated the highest level of GVA in relation to income (64%), followed by the Danish (63%), Romanian (6) and Slovenian (59%) fleets. The Danish fleet generated the highest gross profit margin (34%), followed by the Latvian (33%) and Portuguese (29%) fleets. Malta was the only Member State fleet that had a negative gross profit margin, suggesting that in 2011 the fleet did not generate enough income to cover its operating costs. The Latvian fleet generated a net profit margin of 28%, followed by the Romanian (17%) and the UK (16%) fleets. Four EU fleets generated negative profit margins (Finland, Germany, Ireland and Slovenia), indicating that these national fleets did not generate enough income to cover their capital costs in Assessment of the EU fleet by main fishing technology (fishing gear) suggests that vessels using polyvalent passive gears only (PGP) were the most numerous, accounting for 2 of the vessels in the EU fleet in This segment however encompassed only 3.4% of the GT and 1 of the engine power. The EU demersal trawl/seiner fleet comprised almost 4 of the total GT, corresponding to 3 of the engine power and only 1 of the number of vessels. Purse seiners (PS) and pelagic trawlers () each contained 15% of the gross tonnage but combined, less than 2% of the number of vessels. The demersal trawl/seiner fleet generated between 22 and 26% of the total fishing employment, followed by the polyvalent passive gears only (PGP) fleet (17%) and vessels using active and passive gears (14%). On average, crew working on vessels using active/towed 5 gears receive higher wages. Towed gear segments are by far the most fuel intensive fleets, with the demersal trawl/seiner fleet consuming around 788 million tonnes of fuel in For 2011 Estonia provided only partial data, as concerns economic data only income was provided 4 Opportunity costs of capital are excluded from the total amount, as the data submitted by MS for calculating this variable may have some inconsistencies due to a methodology issue regarding the PIM method. 5 Towed gears include: dredgers, demersal trawlers and/or demersal seiners, vessel using other active gears, vessels using polyvalent active gears only, Purse seiners, Beam trawlers, Pelagic trawlers. 12

15 Profitability of the EU fishing fleet The data suggests that static (passive) 6 gear segments were generally more profitable than towed (active) gear segments. The PGP and PMP segments (vessels using polyvalent passive gears and vessels using passive and active gears) generated the highest GVA as a proportion of income (63% each) in Among the static gear segments, the most profitable were the DRB (dredges) (6) and PS (purse seiner) fleets (58%). The fish catching sectors contribution to national GDP is very low. At the EU level, the fish catching sector contributed to less than 0.03% of the EU GDP in At the Member State level, the Spanish fleet generated the highest GVA ( 839 million) but contributed to only 0.8% of the national GDP. Fisheries (primary sector) contribution to national GDP in fact amounted to less than 0.2% in all MS, ranging from 0.17% in Portugal to less than 0.0 in several MS, including Bulgaria, Germany, Romania and Slovenia. When compared to the agricultural GVA, the fish catching sector remains relatively small, only amounting to 15% of the agricultural GVA in Portugal and 1 in Malta. Chapter 4 provides a quantification of subsidies to the fisheries sector in each MS, based on two different datasets: direct income subsidies received by the EU fishing fleet in 2011, as provided by MS during the DCF data submissions and data on the implementation of the EFF It has to be noted, however, that the data on direct income subsidies submitted by Member States under the DCF is only of limited utility for analytical purposes since some data sets are incomplete and lack accuracy. In addition, the data available from the two sources used in the analysis are not comparable because definitions differ and overlap in some cases, and therefore were analysed independently. In summary, obtaining a comprehensive and accurate account of the total amount of government financial transfers to the EU fleet was not possible. The analysis provided can simply give an indication of the level of dependency of each Member States fleet, and for several fleet segments, on direct income subsidies. According to the DCF data submitted by Member States, the total amount of direct income subsidies 7 granted to the EU fleet in 2011 amounted to 98 million. The amount of direct income subsidies and indicators, which were estimated to assess the contribution of direct income subsidies to fleet profitability, fluctuate across MS and fleet segments. Furthermore, some fleets rely heavily on direct income subsidies, with subsidies amounting to more than 5 of their total operating costs. These include the Polish vessels using hooks (HOK), the Polish passive gear (PG) fleet and the Latvian polyvalent passive gear fleet (PGP). When implementing of the EFF each MS had the power to define its priorities in terms of support, distributing the total funding across five priority axes accordingly. The priorities differ from country to country and the level of support to the catching sector (mainly consisting of the sums allocated to priority 1 axis) varies from 4% in Romania to 82% in Ireland. Also the average EFF support 8 for the priority 1 axis compared with the average annual income from fisheries fluctuates highly and varies from of total income for France, Germany, The Netherlands and United Kingdom to 177% for Romania and 6 for Poland. 6 Static gears include: drift and/or fixed netters, vessels using pots and/or traps, vessels using hooks, vessels using passive gears only for vessels < 12m, vessels using other passive gears, vessels using polyvalent passive gears only, vessels using active and passive gears. 7 According to the DCF definition Includes direct payments, e.g., compensation for stopping fishing, refunds of fuel duty or similar lump sum compensation payments. Excludes social benefit payments, indirect subsidies, e.g., reduced duty on inputs such as fuel, investment subsidies. 8 Details on how the average annual EFF support has been estimated are provided in chapter 4. 13

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17 Profitability of the EU fishing fleet 1. BACKGROUND 1.1. Background on profitability and economic performance indicators Most management strategies aim at ensuring sustainable and efficient fisheries while improving income, employment and living standards of fishing communities. In trying to obtain these often conflicting objectives, policy-makers require information not only on the state of fish stocks but also on the profitability of the fishing fleet. To maintain an economically healthy fishery, management policies may include limiting fishing effort to sustain fish stocks at healthy levels or to safeguard reasonable rates of return to fishers in the fishery. When designing and implementing policy instruments that are more compatible with the goal of economic efficiency, fisheries managers and policy-makers should be able to know the answers to questions such as: is the fleet profitable?, do larger vessels perform better than smaller ones?, do vessels using a specific fishing gear perform better than others?, what is the average crew wage?. In practice, assessment of the economic performance of fisheries is derived from costs and earnings surveys aimed at collecting data on the operating performance of vessels. These surveys are usually based on a standard accounting framework and the outcome is a snapshot of the current economic status of a fishery from which various financial and economic indicators can be derived. Costs and earnings studies therefore provide useful information to policy-makers about the levels of financial and economic surplus generated at a given moment in time. In assessing financial performance, explicit costs are considered. While financial profit indicators view the industry in terms of its profitability to the owner, economic performance indicators evaluate the profitability of the industry to society as a whole. The main distinction between economic and financial performance estimates is that non-cash economic costs such as depreciation and the opportunity cost of capital are included in estimating the economic return of the fishery. Measuring profit in this way allows for the fact that the capital tied up in the vessel and the owner s labour both have an implicit (i.e. opportunity) cost by virtue of their alternative use value. Financial and economic performance indicators provide slightly different information and the distinction between the two profit measures is important for policy purposes. If the main policy concern is the livelihoods of fishermen and fishing communities, then measures of vessel income could indicate the degree of financial hardship faced by vessel operators. Policy-makers could use this information to assess the acceptability of management measures, such as quota reductions or subsidy withdrawals, whose short-term impact will be to reduce fishing income. Financial performance indicators may also provide some context to the driving forces behind observed fishing behaviours, for example, positive financial profits at the vessel level may reveal how owners continue to operate in a fishery that is experiencing economic loss. As a general rule, the financial profitability is the most appropriate measure for indicating the sector s short-term sustainability. If the policy question concerns the level of fishing effort, then economic performance indicators are more appropriate since positive economic profits may signal the entry of new vessels into a fishery, intensifying pressure on stocks and increasing the need for entry controls. Conversely, losses may foreshadow the withdrawal of labour and capital from a fishery, implying redundant capacity or else the allocation of effort to other fisheries. By taking into account all explicit costs and economic costs, the economic profit indicates the economic return to society associated with harvesting that fishery resource, and is most relevant to 15

18 Policy Department B: Structural and Cohesion Policies the needs of fishery managers and policy-makers. In simple terms, if the analysis is intended to provide an indication of the segment s or sector s ability to survive in the long term, economic performance is more appropriate Data and limitations Currently, the main source of economic data on the fishing fleet at the EU level is the data collected under the DCF and requested from MS through a data call issued annually by the European Commission (DG MARE). The JRC serves the data call, houses the DCF databases and provides quality checked data to STECF expert working groups. The current briefing note borrows heavily on the production of the STECF Annual Economic Report on the EU fishing fleet 9 (2013), which provides a comprehensive overview of the latest information available on the structure and economic performance of EU Member States fishing fleets. The AER report is prepared annually by STECF Expert Working Groups, consisting of independent external and JRC experts. The data used to compile the various analyses contained within the AER report, as well as the present note, are collected under the Data Collection Framework (DCF), cf. Council regulation (European Commission (EC) No 199/2008 of 25th February 2008). The current data call requested economic data for the years 2008 to Compiling a comprehensive European overview is not always possible due to the nonsubmission or submission of incomplete data sets from a number of Member States. EU level estimates in this briefing note are based on DCF submitted data only. They should be treated with care when drawing general conclusions about the structure and economic performance of the EU fleet as a whole. Member States that are missing from each analysis due to missing data have been highlighted throughout the note wherever necessary. Additionally, data limitations arise when the EU fleet is analysed at the level of fishing gear. For the EU and Member State analysis, national level datasets were used while for the fishing gear analysis, fleet segment level data were used. Some discrepancies exist between these two datasets. More details about this issue are provided in section 3.2. When evaluating the economic performance several key variables are required. Without these key elements, performance indicators cannot be calculated. While specific data issues are described in more detail throughout the note, a brief outline of the main data limitations includes: (1) Value of landings - Not all Member States submitted data on the value of landings. Therefore it was not possible to assess the total value of landings at the EU level. For those Member States who submitted data, the total level of landings value obtained by those fleets amounted to 4.9 billion in Furthermore, even for MS that submitted data on the value of landings at the national level, the homologous data is not always complete at the fleet segment level; (2) Income - Income includes not only the value of landings, but also income generated from other non-fishing activities, from leasing out fishing rights and direct income subsidies. As with the value of landings, not all Member States submitted data on income. Therefore, it is not possible to quantify the exact level of income generated by the EU 9 10 STECF AER and accompanying data tables can be found at: More information on the DCF and the data variables requested during the fleet economic data call can be found on the JRC data collection web site: 16

19 Profitability of the EU fishing fleet fishing fleet as a whole. For those Member States who submitted data, the total level of income generated by those fleets amounted to 7.26 billion in 2011; (3) Gross Value Added (GVA) and Gross Profit - These indicators are calculated using income and costs data submitted by Member States. In order to calculate GVA, data on income, energy costs, variable costs, repair costs and non-variable costs are required. If Member States did not submit any one of these DCF parameters, the calculation of GVA was not possible. In order to calculate gross profit, crew costs are also required, in addition to the costs required to calculate GVA. As with GVA, if Member States did not submit any one of these DCF parameters, the calculation of gross profit was not possible. Therefore, similar to the other economic indicators, it was not possible to quantify the exact level of GVA or gross profit generated by the EU fishing fleet. For those Member States who did submit the data required to calculate these indicators, the total amount of GVA and gross profit generated by those fleets totaled around 3.4 billion and 1.29 billion respectively in 2011; (4) Net Profit / Loss - Similar to GVA and gross profit, this indicator is calculated using income and costs data submitted by Member States. In order to calculate net profit/loss, data on income, energy costs, variable costs, repair costs, non-variable costs and capital costs (depreciation and opportunity costs of capital) are required. If Member States did not submit any one of these parameters, in particular capital costs, the calculation of net profit/loss is not possible. The amount of missing Member States from the analysis in some or all years makes it difficult to quantify the global level of profit/loss achieved by the EU fishing fleet for any of the years in question. Nevertheless, for those Member States who submitted the data necessary to calculate this indicator, these fleets achieved a combined total profit of around 410 million in In summary, while the overall profit from the data available is estimated, important Member States in terms of the size and output of their fleets are excluded from the analysis Study objectives and structure This briefing note is intended to provide the European Parliament with the latest information on the profitability of the European fishing fleet to be consulted for the current EP report on the reform of the European Fisheries Fund. The note aims to provide an overview of the latest information available on the economic performance of the EU fishing fleet as well as of each coastal Member State s fishing fleet. Additionally, a quantification of direct income subsidies and the EFF financial support to the EU catching sector based on the available data is provided for each Member State, as well as an estimation of the sector s contribution to the national GDP and agricultural GVA. In Section 1, the importance of assessing the economic performance of fishing fleets in the pursuit of sustainable fisheries and some of the main issues surrounding the DCF data, available for the analyses, was briefly discussed. Section 2 provides an overview of the EU fishing fleets capacity and socio-economic structure and production, which serves to provide an up-to-date description of the EU fleet and gives context to the following sections of the note. In Section 3, a quantitative assessment of the economic performance of the EU fishing fleet is provided, including results by Member State fleet segments for The contribution of the fish catching sector to the national GDP and agricultural GVA for each 17

20 Policy Department B: Structural and Cohesion Policies Member State is approached in Section 4 and Section 5 attempts to quantify the amount of direct income subsidies and government financial transfers to the EU fishing fleet in Under the DCF, fishing vessels are classified into fleet segments using a combination of the main gear type (fishing technology) and vessel length group. As requested, analyses have been performed at the EU level, by Member State and main fishing technology except when assessing the contribution of the catching sector to the total GDP and agricultural GVA and when quantifying EFF government financial transfers 11. Due to data limitations, both these analyses were conducted at the Member State level only. The note relies heavily on data relating to the year 2011, extracted from Member State s data submissions under the 2013 call for Economic data on the EU fishing fleet [MARE/A3/AC(2013)], housed at the JRC in the Data Collection Framework (DCF) database. This note also benefited extensively from analyses undertaken during the two expert working groups convened to produce the current Annual Economic Report on the EU fishing fleet (STECF 13-15, in prep.). All socio-economic data provided in this briefing note derive from Member States latest DCF data submissions. Additional information from the EU fleet register and EUROSTAT on fleet capacity and production was used to complement the DCF data and provide a more comprehensive overview of the EU fleet. Complementary data on national GDP and agricultural GVA were obtained from EUROSTAT for estimating the contribution of the catching sector to the market value of all (and agricultural) goods and services produced within each Member State. 11 Data disaggregated by main fishing technologies are available only for direct income subsidies and are collected thought the Data Collection Framework. 18

21 Profitability of the EU fishing fleet 2. OVERVIEW OF THE EU FISHING FLEET KEY FINDINGS In 2011, the EU fishing fleet comprised over 83 thousand vessels, a total gross tonnage of 1.74 million tonnes, engine power of 6.5 million kilowatts and directly employed over 127 thousand people. Overall capacity and employment has steadily decreased over the years. Average wage per fisher varies substantially between MS and fishing activity, with the mobile gear segments receiving slightly higher wages. Fleet composition in terms of fishing technology varies substantially across MS. Static gears dominate the EU fleet, contributing to over 6 of the fleet in number of vessels while mobile gear segments dominate the fleet in terms of GT and engine power. Static gears also generate more employment but have more part-time fishers. In 2011, the EU fishing fleet spent around 3.76 million days at sea, almost 4 of which are attributed to vessels using polyvalent passive gears only (PGP) and another 22% to demersal trawlers and seiners (). More than half of the total fishers were employed on vessels belonging to three main fleet segments: polyvalent vessels using only passive gears or both passive and active gears and demersal trawlers/seiners. Three segments (demersal trawlers/seiners, purse seiners and pelagic trawlers) contributed to about 8 of the total EU landings in weight and 63% in value in EU fishing fleet structure According to data in the EU fleet vessel register, the total number of vessels in the EU fishing fleet in 2011 was 83,590, with a combined gross tonnage (GT) of 1.74 million tonnes and total engine power of 6.52 million kilowatts (kw). Between 2008 and 2011, the overall capacity of the EU fleet decreased by 5% in vessel number, 9% in GT and 7% in engine power (Figure 1). The number of vessels in the EU fishing fleet according to Member States DCF data submissions was 64,861 in 2011, corresponding to a gross tonnage (GT) of 1.60 million tonnes and total engine power of 5.88 million kilowatts (kw) (Table 1). Coverage of the DCF data in relation to that held in the fleet register in 2011 was: 76% of the number of vessels and over 9 of the EU fleet s GT and kw. Discrepancies between the EU fleet register and DCF figures are mainly attributed to the lack of data for Greece, who did not submit data under the 2013 data call. According to Eurostat, the Greek fleet numbered 17,112 vessels in 2011 with a combined gross tonnage of 86.8 thousand tonnes and engine power of 503 thousand kw. 19

22 Towed Gears Static Gears Vessels thousands Policy Department B: Structural and Cohesion Policies Figure 1: Structure of the EU fishing fleet: GT / kw millions Fleet register GT kw No. of vessels Source: EU Fleet Register Table 1: EU fishing fleet capacity indicators by fishing technology, 2011 FISHING TECHNOLOGY NO. VESSELS VESSEL POWER (kw) VESSEL TONNAGE (GT) Drift and/or fixed netters () 4, % 329, % 45, % Vessels using pots and/or traps (FPO) 3, , % 23, % Vessels using hooks (HOK) 2, % 364, % 97, Vessels using passive gears only for vessels < 12m (PG) Vessels using other passive gears (MGO) Vessels using polyvalent passive gears only (PGP) Vessels using active and passive gears (PMP) 4, % 148, % 11, % % 16, % , % 582, % 54, % 9, % 295, , % Total static 38, ,000,486 34% 274,275 17% Dredgers (DRB) 1, % 202, % 32, Demersal trawlers and/or demersal seiners () Vessel using other active gears (MGO) Vessels using polyvalent active gears only (MGP) 6, % 1,794, % 629, % % 17, % 1, % 21, % 4, % Purse seiners (PS) 1, , % 236, % Beam trawlers (TBB) % 308, % 89, % Pelagic trawlers () % 365, % 232, % Total towed 11,353 18% 3,272,799 56% 1,226,483 77% Inactive vessels 14, % 602, % 100, % Total 64, ,876, ,601, Source: EU Member States DCF data submissions 20

23 Profitability of the EU fishing fleet Among the MS included in the analysis, Italy, Spain, Portugal and the UK had the largest number of vessels, each respectively with 23%, 17%, 13% and 1 of the total number of vessels (Figure 2). Italy s fishing fleet was the largest also in terms of engine power (2 of the total), followed by Spain (16%), France (15%) and the UK (14%). In terms of tonnage, Spain s fleet was the largest (26% of the total), followed by the UK (13%), Italy (12%) and France (1). In terms of fishing technology, static (passive) gears comprised around 6 of the EU fleet in number but only 34% of the engine power and 17% of the GT, indicating that the static gear fleet is composed of many smaller, less powerful vessels. The dominant fleet segments in number of vessels at the EU level comprised vessels using polyvalent passive gears (21.4% of the total), both active and passive gears (14.6%) and demersal trawl and seine vessels (10.4%). In terms of engine power, the demersal trawl and seine fleets dominated at 30.5% of the total, followed by polyvalent vessels using passive gears only (9.9%) and purse seiners (9.6%). Demersal trawlers/seiners were also the dominant category in terms of tonnage (39.3% of the total), followed by purse seiners (14.8%) and pelagic trawlers (14.5%) (Table 1). Figure 3 highlights that fleet composition, in terms of fishing technology, varies significantly across Member States. The French, Irish, Italian, Maltese, Portuguese, Spanish and UK fleets are very diverse, encompassing a broad range of fishing technologies, including both static and mobile gears. On the other hand, the Belgian, Dutch, Estonian, Finnish, Latvian, Lithuanian and Swedish fleets are less diverse, and generally comprise only a handful of fishing technologies, indicating more specialised fisheries. These usually include large demersal trawler/seines (), beam trawlers in the case of Belgium and Netherlands, and Pelagic trawlers (). The Finnish fleet, however, is mainly composed of small sized vessels using passive gears only (PG). Inactive vessels made up a large portion of the Bulgarian, Finnish, Maltese, Portuguese, Romanian and Slovenian national fleets in In fact, almost 9 of the vessels in the Romanian fleet were inactive in Denmark, Ireland and Lithuania also contain a high number of inactive vessels, but these do not contribute significantly to the overall fleet GT and engine power. Figure 2: EU Fishing fleet capacity indicators by MS, 2011 SWE 2% IRL 3% DNK 4% DEU 3% BGR 4% FIN 5% NLD EST FRA 9% MLT 2% LVA ROU SVN POL GBR 1 PRT 13% No. Vessels LTU BEL ESP 17% ITA 23% DEU 3% SWE 3% FIN 3% DNK 4% NLD 5% POL IRL 3% PRT 6% BGR LTU MLT GBR 14% BEL EST LVA FRA 15% SVN Vessel Power ROU ESP 16% ITA 2 POL 2% DEU 4% DNK 4% IRL 5% PRT 6% LTU 3% BEL FIN SWE 2% NLD 8% EST MLT FRA 1 LVA BGR Vessel Tonnage SVN ITA 12% ESP 26% GBR 13% ROU Source: EU Member States DCF data submissions (data for 2011) 21

24 Policy Department B: Structural and Cohesion Policies Figure 3: Fishing fleet capacity indicators by Member State and fishing technology, 2011 Belgium - No. Vessels 7% DRB 2% 1 7% Belgium - Vessel power 6% DRB 2% 9% 9% Belgium - Vessel tonnage 2% DRB 2% 9% 9% TBB 74% TBB 74% TBB 78% PMP 36% Bulgaria - No. Vessels 2% 2% HOK FPO 3% Bulgaria - Vessel power 12% FPO 3% HOK Bulgaria - Vessel tonnage FPO 2% 28% 34% HOK 57% PMP 37% 46% PG PG PMP 34% PG PMP Denmark - No. Vessels 3% DRB TBB 2% 12% PGP 42% PGP 2 Denmark - Vessel power TBB DRB 2% 3% PMP 6% 6% Denmark - Vessel tonnage TBB DRB 3% 2% PGP 8% PMP 5% 4 12% 57% 76% Estonia - No. Vessels 4% Estonia - Vessel power 28% 27% Estonia - Vessel tonnage 3 46% PG 94% PG 36% 9% PG 12% 12% 22

25 Profitability of the EU fishing fleet Finland - No. Vessels 2% Finland - Vessel power 16% Finland - Vessel tonnage 26% PG 47% PG 42% PG 23% PGO 5% MGP 2% MGO 3% France - No. Vessels PS 2% PMP 3% PGP 15% HOK 15% FPO 13% 13% 24% DRB 4% PGO 2% MGP 2% MGO France - Vessel power 3% PMP 2% PS 9% PGP 12% HOK 13% FPO 8% 25% 18% DRB 5% PMP PGP PGO MGP 2% MGO PS 24% HOK 4% France - Vessel tonnage FPO 3% 7% 13% 4 DRB 4% Germany - No. Vessels TBB 13% 6% 26% Germany - Vessel power 17% 3% 26% 43% Germany - Vessel tonnage 2% 32% PG 53% TBB 3 PG 15% 9% TBB 15% PG 4% 4% PMP PS PGP 37% HOK Ireland - No. Vessels 3% 12% FPO 25% TBB DRB 12% 9% TBB 3% PS PMP PGP Ireland - Vessel power 28% HOK FPO 16% 7% DRB 9% 35% TBB 2% PS PMP Ireland - Vessel tonnage 34% PGP 23% DRB 4% 29% HOK FPO 5% 3% 23

26 Policy Department B: Structural and Cohesion Policies PMP PS TBB 2% Italy - No. Vessels DRB 5% 18% TBB 2% PMP Italy - Vessel power PS 5% 4% DRB 6% TBB 2% PMP Italy - Vessel power PS 5% 4% DRB 6% 9% HOK PGP 26% 42% PGP 26% 42% PGP 63% 1 1 HOK 3% HOK 3% Latvia - No. Vessels 2% 16% 22% Latvia - Vessel power 7% 17% Latvia - Vessel power 7% 17% PGP 6 66% PGP 1 66% PGP 1 Lithuania - No. Vessels 8% 5% 12% Lithuania - Vessel power 2% 8% 1 PG 2% Lithuania - Vessel tonnage 5% 5% PG PG 35% 4 78% 89% PS FPO PMP Malta - No. Vessels PS 2% 4% Malta - Vessel power PMP 2% PGP 34% MGO 4% HOK 15% 42% MGO 8% PGP 2 34% 1 FPO HOK 2 PMP 3% MGO 4% Malta - Vessel tonnage 47% PGP 6% 24% HOK 15% PS FPO 24

27 Profitability of the EU fishing fleet Netherlands - No. Vessels DRB 2% 2% TBB 37% 8% 23% Netherlands - Vessel power DRB 6% 24% 8% PG 7% PGP Netherlands - Vessel tonnage DRB 5% PG 6% PGP 5 TBB 38% PGP PG 27% TBB 54% Poland - No. Vessels 2% PG 62% 8% 12% 12% HOK 4% 44% Poland - Vessel power 2% PG 18% 22% 9% HOK 5% Poland - Vessel tonnage 74% 14% HOK 3% 4% PG 4% Portugal - No. Vessels PS DRB 2% PMP 15% 7% FPO 5% 2% HOK 5% PMP 14% Portugal - Vessel power PS 8% 7% DRB 19% PGP 4% PMP 8% MGP Portugal - Vessel tonnage DRB PS 6% 4% PGP 2 PGP 14% FPO 6% 18% 4 MGP 43% MGP 18% HOK 13% HOK 17% FPO 2% Romania - No. Vessels PG 12% PMP Romania - Vessel power PMP 2 Romania - Vessel tonnage PMP 38% 87% PG 13% 66% 58% PG 4% 25

28 Policy Department B: Structural and Cohesion Policies Slovenia - No. Vessels PS 2% 33% PS 4% Slovenia - Vessel power 1 23% Slovenia - Vessel tonnage 3 17% 55% 9% 39% 23% PS 5% 23% 24% Spain - No. Vessels Spain - Vessel power Spain - Vessel tonnage PMP 64% PS 7% 1 HOK 7% 9% PGP MGP PMP 19% PGP 3% PS 26% MGP HOK 12% 2% 36% PGP 4% PMP 6% MGP PS 28% HOK 15% 45% Sweden - No. Vessels Sweden - Vessel power Sweden - Vessel tonnage 24% 13% 3 9% 12% 19% 57% 56% 79% United Kingdom PS - No. TBB Vessels PGP 2% 28% HOK 8% 1 FPO 32% DRB 4% 14% PGP United Kingdom - Vessel power HOK 4% PS 17% 15% TBB 4% FPO 17% 5% DRB 7% 3 United Kingdom - Vessel tonnage 3% PGP PS 3 9% HOK 2% TBB 5% FPO 6% DRB 6% 39% Source: EU Member States DCF data submissions (data for 2011) 26

29 Towed Gears Static Gears Profitability of the EU fishing fleet 2.2. EU fishing fleet socio-economic structure According to Member States DCF data submissions, the total number of fishers employed in the EU fishing fleet in 2011 was 127,206 (excluding Cyprus, Estonia and Greece), corresponding to 102,467 full time equivalents. More than half of the total fishers were employed on vessels belonging to three main fleet segments: polyvalent vessels using only passive gears (almost 17% of the total) or both passive and active gears (14%), demersal trawlers/seiners (26%). Also, purse seiners and netters were particularly important from a socio-economic point of view as they respectively accounted for around 1 and 8% of the total number of jobs (Table 2). Table 2: EU fleet employment by fishing technology Fishing Technology Full Time Equivalent Total employed Drift and/or fixed netters () 8, % 11, % Vessels using pots and/or traps (FPO) 6, % 8, % Vessels using hooks (HOK) 8, % 9, % Vessels using passive gears only for vessels < 12m (PG) 1, % 3, Vessels using other passive gears (MGO) % % Vessels using polyvalent passive gears only (PGP) 17, % 21, % Vessels using active and passive gears (PMP) 14, % 20, Total static 56, % 75, % Dredgers (DRB) 2, % 4, % Demersal trawlers and/or demersal seiners () 26, % 28, Vessel using other active gears (MGO) % Vessels using polyvalent active gears only (MGP) % % Purse seiners (PS) 11, , % Beam trawlers (TBB) 2, , % Pelagic trawlers () 3, , % Total towed 45, % 52, Total 102, , Source: EU Member States DCF data submissions (data for 2011) Figure 5 shows that the ratio between FTE and total employed was higher than 0.7 for most EU feet's segments, indicating that most fishers were full-time workers. Contrarily, in the case of dredgers (DRB) and vessels using other active gears (MGO) this ratio did not reach 0.6, suggesting that fishers worked mostly part-time. The value relative to the vessels using passive gears only for vessels <12m (PG) was exceptionally low (only 0.35), indicating that fishers employed in this fleet segment are, in most part, occasional crew, working sporadically on a part-time basis. In 2011, five MS (Spain, Italy, Portugal, UK and France), with an estimated number of 88,290 FTE, contributed to around 85% of the total jobs generated by the EU fleet. 27

30 Ratio FTE to total employed Policy Department B: Structural and Cohesion Policies Figure 4: EU fleet employment by MS and fishing technology Source: EU Member States DCF data submissions (data for 2011) Figure 5: FTE to total employed by fishing technology at the EU level, ,8 0,6 0,4 0,2 0 DRB FPO HOK MGO MGP PG PGO PGP PMP PS TBB Source: EU Member States DCF data submissions (data for 2011) From the socio-economic point of view, the segment represented a significant segment in Spain, Italy, UK and France, respectively providing 27%, 34%, 32% and 29% of the total FTE generated by each national fleet (Figure 4). For Spain and Italy, however, the most important segments in terms of employment were composed of vessels using active and passive gears (contributing to 28% of the FTE generated by Spain s fleet) and by vessels using polyvalent passive gears only (contributing to 54% of the FTE generated by Italian fleet). For Spain, Portugal and UK, the high values of the ratio FTE/total employed indicate that fishers were generally employed on a full time basis, regardless of the specific fleet segment. In Italy, the situation is very different among fishing technologies: while for demersal trawlers and seiners (), vessels using hooks (HOK) and vessels using polyvalent passive gears only (PG), this ratio is always above 0.7, for most other segments it was around 0.5, indicating that workers were generally employed part-time in this case. In France, the ratio FTE/total employed ranges from a minimum value of 0.48 (MGO) to a maximum value of 0.86 (PS) (Figure 6). Figure 7 shows the estimated average wage per full time equivalent 12 by MS. This indicator was always higher for towed gears than for static ones except for Belgium and varies substantially across Member States. Belgian fishers receive the highest estimated average wage per FTE with 82,646 and 70,567 per year, for static and towed gears respectively, followed by France with a value of 43,627 for static and 64,526 for towed gears, and by Denmark, whose corresponding values are 23,611 and 55, Calculated as "wages and salaries of crew"/total FTE 28

31 Aberage wage (Thousands) Aberage wage (Thousands) DRB TBB PG TBB PG PG PGP HOK MGO PGP PMP DRB PG PGP TBB HOK PG PG PMP PS Ratio FTE to Total employed HOK MGP PGP PMP PS DRB HOK PGP PMP PS TBB DRB FPO HOK MGP PGP PMP PS DRB FPO HOK PGP PS TBB DRB FPO HOK MGO MGP PGO PGP PMP PS DRB FPO PMP DRB PGP PMP TBB Ratio FTE to total employed Profitability of the EU fishing fleet Figure 6: FTE to total employed by Member State and fishing technology, ,6 1,4 1,2 1 0,8 0,6 0,4 0,2 0 ESP ITA PRT GBR FRA IRL BGR DNK 1,6 1,4 1,2 1 0,8 0,6 0,4 0,2 0 BEL DEU FIN LTU LVA MLT NLD POL ROU SVN SWE Source: EU Member States DCF data submissions (data for 2011) Figure 7: Average wage by main gear type and Member State, BEL FRA DNK NLD DEU IRL GBR ESP SVN SWE FIN ROU ITA MLT LTU POL PRT LVA BGR Static Gears Towed Gears BEL FRA DNK DEU NLD GBR IRL ESP FIN SVN PRT ITA SWE LVA MLT POL LTU ROU BGR Source: EU Member States DCF data submissions (data for 2011) 29

32 Days at sea (million) Policy Department B: Structural and Cohesion Policies 2.3. EU fleet fishing activity In 2011, the EU fishing fleet spent around 3.76 million days at sea, almost 4 of which are attributed to vessels using polyvalent passive gears only (PGP) and another 22% to demersal trawlers and seiners () (Figure 8). The fleet segments composed of netters (), vessels using pots and traps (FPO) and vessels using passive gears only for vessels <12m (PG) each contributed about 7% of the total number of days at sea, while all the other gears contributed less than 5%. Member States with the highest number of days at sea were Italy (47% of the total), France (13%), UK (1) and Portugal (1), while all the other MS spent less than 4% of the total number of days by the EU fleet (Figure 9). In 2011, Italian vessels smaller than 12 meters and using polyvalent passive gears only (PG) contributed 67% of the total days at sea of the Italian fleet. Demersal trawlers and seiners (between 12 and 24 meters) contributed another 2 to the total. In France and the UK, the demersal trawlers and seiners spent around 3 of their national fleet s total days at sea. Furthermore, for both Member States the share of days at sea were also high for netters (19% for France and 8% for the UK) and vessels using pots and traps (1 for France and 4 for the UK). The number of days spent at sea by Portuguese vessels in 2011 was around 376 thousand, 27% of which were attributed to vessels using polyvalent passive gears only and 22% to vessels using active and passive gears (PMP) (Figure 9). Figure 8: EU fishing fleet effort (days at sea) by fishing technology and vessel length group, ,6 1,4 1,2 1 0,8 0,6 0,4 0,2 0 PGP FPO PG PMP DRB HOK TBB PS MGP MGO PGO <12m 12m-40m >40m Source: EU Member States DCF data submissions (data for 2011) 30

33 <12m 12m-40m <12m 12m-40m <12m 12m-40m >40m <12m 12m-40m <12m 12m-40m >40m <12m 12m-40m Days at sea (thousand days) <12m 12m-40m >40m <12m 12m-40m <12m 12m-40m >40m <12m 12m-40m >40m <12m 12m-40m >40m <12m 12m-40m 12m-40m Days at sea (thousand days) <12m 12m-40m >40m <12m 12m-40m >40m <12m 12m-40m >40m <12m 12m-40m >40m <12m 12m-40m <12m 12m-40m >40m Days at sea (million days) Profitability of the EU fishing fleet Figure 9: 1,4 Fishing fleet effort (days at sea) by MS, fishing technology and vessel length group, 2011* 1,2 1 0,8 0,6 0,4 0,2 0 ITA FRA GBR PRT FIN DNK DRB FPO HOK MGO MGP PG PGO PGP PMP PS TBB DEU SWE POL IRL NLD MLT BEL DRB FPO HOK MGO PG PGP PMP PS TBB LVA BGR LTU SVN EST ROU FPO HOK PG PGP PMP PS * Note: In the graph at the top days at sea are in million while in the other two graphs they are in thousands Source: EU Member States DCF data submissions (data for 2011) 31

34 million litres Million Llitres Policy Department B: Structural and Cohesion Policies Figure 10 (top) provides information on the amount of energy consumed at EU level and by fishing technology. Data reveals that total consumption by the EU fleet (Cyprus, Estonia, Greece, and Spain excluded due to missing data) was 1.66 billion 13 litres in According to the data (Figure 10, middle), the Italian fleet had the highest absolute consumption, with over 400 million litres in 2011, while the French and UK fleets consumed 342 and 268 million litres respectively. In terms of fishing technology, the mobile gear segments (, TBB and ) consumed the greatest share of the total energy consumption (Figure 10 bottom). Figure 10: Energy consumption in million litres, at EU level (top) and MS level (middle), and as a % of total energy consumption (bottom), TBB PS PGP DRB HOK FPO PMP MGP PG MGO PGO ITA FRA GBR NLD PRT DNK IRL DEU SWE BEL LTU FIN POL LVA MLT SVN ROU DRB FPO HOK MGO MGP PG PGO PGP PMP PS TBB ITA FRA GBR NLD PRT DNK IRL DEU SWE BEL LTU FIN POL LVA MLT SVN ROU DRB FPO HOK MGO MGP PG PGO PGP PMP PS TBB Source: EU Member States DCF data submissions (data for 2011) 13 This value includes Bulgarian fuel consumption, which amounted to 1,07 million litres. However Bulgaria did not provide data by fishing technology and therefore, not included in the graphs. 32

35 Profitability of the EU fishing fleet 2.4. EU fleet fishing production According to Eurostat, the EU fleet landed a total of 4,669 thousand tonnes of fish in 2011, corresponding to 6.3 billion in landed value (Figure 11). The EU fleet (excluding Greece and Spain) covered by the DCF landed a total of 3,526 thousand tonnes and obtained 4.9 billion for their catch in 2011, indicating that the DCF data covers approximately 76% of the total EU landings. In terms of production in weight, the largest producers in 2011 were Denmark with almost 711 thousand tonnes of fish landed, followed by the UK with 597 thousand tonnes and France with about 464 thousand tonnes. The top producers in terms of value were: Italy with a total landed value of 1.1 billion, followed by France with 1.05 billion and then the UK with 949 million. These three MS contributed almost 65% of the landings value (Figure 11). DCF data submitted on weight and value of landings by species reveal that herring achieved the highest volume of landings by the EU fleet (Greece and Spain are excluded due to non-submission of landings data) in 2011 (2012 data are provisional). The total weight of herring landed in 2011 was 483 thousand tonnes, more or less stable compared to 2010 (- 3%), while the total weight of landed sprat, the second most important species in volume terms, was 382 thousand tonnes in 2011, a decrease of around 19% from The data also reveals that Atlantic mackerel achieved the highest value of landings, having overtaken Norway lobster. The total value of landings of mackerel in 2011 was 390 million, a very large increase of 36% from 2010, while the total value of Norway lobster landed was 322 million in 2011, an increase of around 8% from 2010 (Figure 12). Figure 11: Landings in weight and value by Member State, 2011 Source: EU Member States DCF data submissions (data for 2011) 33

36 thousand tonnes billion thousand tonnes millions millions Thousand tonnes Policy Department B: Structural and Cohesion Policies Figure 12: Landings in weight and value by the EU fleet ( ) by species, Atlantic mackerel Norway lobster Common sole Atlantic cod Atlantic herring European hake Atlantic herring European sprat Atlantic mackerel Sandeels European pilchard Jack and horse mackerels million tonnes billion Landings weight Landings value Table 3 and Table 4 provide landings information by MS fleet segment for the year The segment contributed to about 4 of the total EU landings in weight and 43% in value in This fleet segment accounted for 9 of the Danish and 97% of the Swedish total landings in weight in The pelagic trawlers () contributed to a significant amount of total landings in weight in the Dutch (77%), Polish (82%) Finnish (92%), Lithuanian (95%) and Latvian (92%) fleets. Overall, pelagic trawlers contributed about a quarter of the EU fleet s landings in weight in However, in terms of value, the segment accounted for 8% of the total value landed and only contributed significantly to the value of landings in the Lithuanian (93%) and Latvian (83%) fleets. 34

37 Profitability of the EU fishing fleet Table 3: Landings in live weight (thousand tonnes) by fishing technology, 2011 MS DNK GBR FRA NLD ITA IRL POL PRT SWE FIN LTU DEU EST LVA BEL BGR MLT SVN ROU Total 13,1 41,9 2,3 1,4 5,4 6,0 0,1 0,3 1,8 1,7 0,1 0,1 0,0 0,1 74,4 2, DRB 34,4 62,0 39,5 3,8 21,8 2,9 0,9 0,4 165,8 4,7% 641,5 164,9 155,8 10,7 71,3 52,1 20,1 43,5 167,4 5,6 51,2 2,2 0,2 0,1 1386,5 39,3% FPO 46,6 22,4 8,0 4,0 0,2 0,0 81,3 2,3% HOK 9,2 11,5 5,3 0,0 0,1 26,6 0,0 0,8 53,5 1,5% MGO 0,6 0,3 0,9 0, MGP 17,2 0,6 17,8 0,5% PG 0,6 11,4 10,1 0,3 6,5 10,3 0,0 39,3 1, PGO 7,3 7,3 0,2% PGP 13,6 1,0 2,1 0,1 44,0 0,0 6,6 3,3 0,4 71,2 2, PMP 14,5 17,0 0,7 0,8 3,7 3,2 0,1 0,1 40,1 1, PS 280,7 108,9 30,0 87,5 0,1 0,2 507,3 14,4% TBB 7,1 19,9 62,3 3,7 2,3 18,6 17,3 131,2 3,7% 39,5 261,9 35,5 131,1 146,8 109,5 108,5 53,0 58,1 4,0 0,3 948,4 26,9% Total 710,9 597,4 463,7 339,4 212,4 199,5 179,9 178,8 173,4 119,7 114,7 78,1 63,3 63,1 20,1 7,6 1,9 0,7 0,2 3524, ,2% 16,9% 13,2% 9,6% 6, 5,7% 5, 5, 4,9% 3,4% 3,3% 2,2% 1,8% 1,8% 0,6% 0,2% 0, 0, 0, 10 Source: EU Member States DCF data submissions (data for 2011) 35

38 Policy Department B: Structural and Cohesion Policies Table 4: Value of landings (million ) by fishing technology, 2011 MS ITA FRA GBR DNK PRT NLD IRL DEU SWE BEL LTU POL FIN LVA EST MLT BGR SVN ROU Total 176,6 35,5 19,8 3,8 7,5 15,3 1,0 0,4 1,7 0,2 2,5 0,0 0,2 0,5 264,9 5,4% DRB 62,6 60,5 71,4 7,5 2,0 12,0 20,2 1,1 237,4 4,8% 515,7 436,0 372,4 339,6 122,1 31,3 86,9 77,7 101,2 7,5 4,1 11,3 2,5 0,7 2109,0 43, FPO 51,2 108,4 17,5 11,1 0,0 0,1 188,3 3,8% HOK 39,1 51,9 23,0 78,9 0,0 0,7 4,4 0,0 198,0 4, MGO 3,5 1,5 4,9 0, MGP 24,7 0,3 24,9 0,5% PG 4,7 7,5 0,2 10,9 10,7 3,9 0,0 0,1 37,9 0,8% PGO 6,2 6,2 0, PGP 353,8 10,8 2,9 34,1 29,2 0,3 0,0 1,2 2,1 434,4 8,9% PMP 6,1 25,9 23,7 11,2 0,7 0,6 0,5 0,1 68,7 1,4% PS 63,7 149,5 281,6 63,1 0,3 0,5 558,7 11,4% TBB 17,4 53,5 7,9 175,3 6,8 32,8 69,9 363,6 7,4% 42,6 53,9 103,0 70,7 60,9 21,5 21,6 18,0 9,9 1,8 0,4 404,4 8,3% Total 1101,0 1050,7 948,7 412,7 344,2 326,6 200,3 125,5 116,5 79,4 65,6 46,0 32,5 21,8 13,8 11,4 2,6 2,0 0,2 4901, ,5% 21,4% 19,4% 8,4% 7, 6,7% 4, 2,6% 2,4% 1,6% 1,3% 0,9% 0,7% 0,4% 0,3% 0,2% 0, 0, 0, 10 Source: EU Member States DCF data submissions (data for 2011) 36

39 Profitability of the EU Fishing Fleet 3. ECONOMIC PERFORMANCE INDICATORS KEY FINDINGS Profitability analysis of the EU fishing fleet by main fishing technology was assessed from an economic perspective. The main performance indicators provided include: income, GVA, gross profit and net profit. According to the data provided, the total income from fishing in 2011 by the EU fleet amounted to 7.26 billion, consisting of 7.02 billion in landings income. The analysed EU fleet received around 98 million in direct subsidies. While total income equated to 7.26 billion, total costs incurred by the EU fleet amounted to 6.69 billion, representing around 92% of total income. The data suggests that the fishery as a whole was profitable in 2011, with the static gear segments generally more profitable than the mobile gear segments. However, of the 19 national fleets analysed, 6 generated net losses in The fish catching sector contributed 3.4 billion of GVA (excluding subsidies), or 0.03% to the EU GDP in As already mentioned, in profitability analyses, the performance of fisheries can be assessed from both a financial and economic point of view. Which of the two approaches is the most appropriate essentially depends on the purpose of the analysis. Financial performance is assessed by deducting only the explicit costs from the total income, thus providing an indication of the fishers capacity to cover their operating costs. On the other hand, economic performance also takes into account implicit costs (e.g. depreciation and the opportunity cost of capital and labour), thus estimating the difference between the value of output and the real cost of the inputs used to produce it. In very simple terms, what matters the most is the time horizon under reference: if the analysis aims at obtaining an indication of short-term sustainability, the financial profitability is the most suitable measure. Contrarily, if the analysis is intended to provide an indication of the segment s or sector s ability to survive in the long term, economic performance is more appropriate. For the purpose of this exercise, the economic approach has been used to assess the economic performance of fleet segments, national fleets and the EU fleet as a whole as the analysis is intended to provide scientific support for the on-going debate on the reform of EFF. Main indicators and calculation methods are briefly defined in the box below. More detailed information is provided in the Annex. It should be noted that direct income subsidies have been excluded in the calculation of the economic indicators. However, the estimation of net profit and net profit margin was conducted with and without direct subsidies for comparison (i.e. net profit vs. subsidised profit and net profit margin vs. subsidised profit margin). 37

40 Policy Department B: Structural and Cohesion Policies Income (excluding subsidies) (i.e. revenue)* = landings income + other income (non-fishing income) Income (including subsidies) = landings income + other income (non-fishing income) + subsidies Operating costs = labour costs (crew wages + imputed value of unpaid labour) + energy costs + repair and maintenance costs + other variable costs + fixed costs Capital costs = annual depreciation costs + opportunity costs of capital Gross Value Added (GVA) = income operating costs + labour costs Gross Profit (GP) = GVA labour costs Net Profit (Economic profit) = GP capital costs Net Profit with subsidies = income (including subsidies) (operating costs + capital costs) Net Profit margin = Net Profit/ Income (excluding subsidies) Net Profit margin with subsidies = Net profit with subsidies/ Income (including subsidies) * Note: for the profitability analysis, economic indicators were estimated excluding from the calculation income from leasing out of fishing rights because data was not considered reliable As the coverage of the data provided by Member States is not always complete for all income and expenditure variables by gear segments, a subset of the DCF data submitted was used in order to provide a comparable data set across indicators. For each MS, a sample was obtained by extracting from the DCF dataset only the segments for which all the essential income and cost items considered necessary to estimate the indicators were provided, namely: Income from landings, Crew wage and salaries and Energy costs. When one of these variables was not provided, the gear segment was excluded from the analysis to avoid over or under-estimating indicators if only income or costs items were present. The indicators Gross Value Added (GVA), gross profit and gross profit margin (%) were based on this sample, the coverage of which is indicated by sample coverage (expressed as percentage of the number of vessels in the population) in the tables provided for each Member State. For estimating net profit with and without subsidies (as well as the corresponding net profit margins, %), a sub-sample was used including only the gear segments for which annual depreciation and fixed tangible asset value (estimated from fleet depreciated replacement cost, required to calculate the opportunity costs of capital) were also provided. The subsample coverage value, expressed as percentage of the number of vessels in the population, gives an indication of the coverage of the dataset used to calculate net profit. The following analysis provides an overview of the economic performance of the EU fishing fleet by Member State and main fishing technology. A summary table with key economic indicators is provided for each Member State by fishing technology and at EU level as a whole (Cyprus, Estonia and Greece are not represented as insufficient data was provided during the DCF data call). 38

41 billion Profitability of the EU Fishing Fleet This chapter also contains an estimation of the contribution of the catching sector of each MS to the overall size of the national economy and to the value added produced by the agricultural sector (see section 3.3) Economic performance indicators for the EU fleet by fishing technology According to Member States DCF data submissions, the total amount of income generated by the EU fishing fleet in 2011 (excluding Cyprus and Greece) was 7.26 billion. This amount consisted of 7.02 billion in landed value, 12 million in fishing rights income, 131 million in non-fishing income, and 98 million in direct income subsidies (Figure 13). Total costs of the EU fishing fleet in 2011 (excluding Cyprus, Estonia and Greece) amounted to 6.69 billion. This amount consisted of 2.13 billion in labour cost ( 1.87 billion in crew wages and 257 million in unpaid labour), totalling 32% of total operating costs, and 1.5 billion in energy costs (23% of the total). Fixed costs equated to around 1.2 billion, consisting of 571 million in repair costs and 598 million in other fixed costs. In 2011, about 63 million was spent in leasing fishing rights and 776 million in depreciation costs (Figure 13). Additionally, opportunity cost of capital was estimated at 100 million in By fishing technology, static gears tend to spend more on labour costs (e.g., FPO, PGP, PMP), while for mobile gear segments, a larger portion of their cost structure is taken up by energy costs (e.g., TBB, ) (Figure 14). Figure 13: EU fishing fleet income and cost structure, ,4 7,2 7 6,8 6,6 Other income 2% Direct subsidies 6,4 6,2 6 5,8 Income from landings 97% Other 5, landings income other income Variable costs 15% Annual depreciation 12% Non variable costs 9% Rights income Repair costs 8% Energy costs 23% Other 13% Crew wages % Crew wage costs Energy costs Other variable costs Annual depreciation Non-variable costs Repair costs Unpaid labour Rights costs Source: EU Member States DCF data submissions (data for 2011) Unpaid labour costs 4% Rights costs 39

42 litres (million) Policy Department B: Structural and Cohesion Policies Figure 14: Cost structure by fishing technology at the EU level, Energy consumption TBB PGP PS DRB HOK FPO PMP PG MGP MGO 10 mobile gears passive gears DRB MGO MGP PS TBB FPO HOK PG PGP PMP Labour costs Energy costs Repair costs Other variable costs Other costs Source: EU Member States DCF data submissions (data for 2011) The data available suggests that there has been an overall improvement in the economic performance of the EU fleet over the last few years. The amount of GVA generated by the fleet (excluding Cyprus, Estonia and Greece) in 2011 amounted to 3.4 billion. Gross profit was estimated at 1.29 billion and net profit at 410 million (Figure 15). In absolute terms, the Spanish fleet generated the highest GVA in 2011 ( 839 million), followed by the French ( 591 million) and Italian fleets ( 583 million). The Italian fleet generated the highest gross profit ( 303 million), followed by the UK fleet ( 202 million) and the French fleet ( 181 million). The UK fleet generated the highest net profit ( 158 million), followed by the French ( 107 million) and Italian fleets ( 80 million). In relative terms, the Portuguese fleet generated the highest level of GVA in relation to income (64%), followed by the Danish fleet (63%), the Romanian (6) and Slovenian fleets (59%). The Danish fleet generated the highest gross profit margin (34%), followed by the Latvian (33%) and Portuguese fleets (29%). Malta was the only Member State fleet that had a negative gross profit margin, suggesting that the fleet did not generate enough income to cover its operating costs in The Latvian fleet generated a net profit margin of 28%, followed by the Romanian fleet (17%) and the UK fleets (16%). Six EU fleets generated negative profit (Bulgaria, Finland, Germany, Ireland, Malta and Slovenia), indicating that these national fleets did not generate enough income to cover their capital costs (Figure 16 top). Apart from the exclusion of Cyprus, Greece and Estonia, Bulgaria and 40

43 Profitability of the EU Fishing Fleet Malta have also been omitted from the estimation of profit margins (Figure 16 bottom) due to questionable data quality 14. Figure 15: EU fleet economic performance indicators Source: EU Member States DCF data submissions (data for 2011) Figure 16: Key economic performance indicators by MS Source: EU Member States DCF data submissions (data for 2011) 14 According to Bulgaria s data submissions, the national fleet generated a net loss as a proportion of total income of 12. According to Malta s data submissions, the national fleet generated a net profit margin of - 195%. 41

44 Policy Department B: Structural and Cohesion Policies When comparing the economic performance by fishing technology (main fishing gear deployed throughout the year), the data suggests that in 2011 the passive gear segments were generally more profitable than the mobile gear segments. Figure 17 shows that GVA, gross profit and net profit as a proportion of total income were consistently higher for the passive gears over the time period. GVA as a proportion of income varied between 53-64% for the passive gears, compared to 21-62% for the mobile gears. Gross profit fluctuated between 19-3 for passive gears, while mobile gears fluctuated between gross losses and profit of 3. All passive gears made net profits in 2011, with the exception of the PMP segment, while both the MGO and suffered net losses in Note that these calculations at segment level do not include all EU fleet segments due to missing or incomplete data sets. Figure 17: Key economic performance indicators by fishing technology Source: EU Member States DCF data submissions (data for 2011) 3.2. Member State level economic performance indicators by fishing technology The following section provides an overview of the economic performance of the main fleet segments in terms of fishing technology in each Member State for It is important to highlight that the information provided in previous section is not always comparable to results included in the following analysis. Both analyses should be considered as complementary and not substitutive. This refers in particular to the economic performance indicators when estimated at national level in comparison to the sum of the same indicators estimated by fishing gear. For Member State and fishing gear level analyses two different datasets were used. As some discrepancies exist between the two, due to missing data or confidentiality reasons, national totals do not necessarily correspond to the sum of those provided by fishing technology. Discrepancies may also result from the fact that, while national indicators refer to the entire fleet, fishing gear analysis is performed, as above mentioned, on subsets of the DCF data submitted used in order to provide a comparable data set across indicators, for example in the case for Spain and Ireland. Note also that although Bulgaria has been excluded in the MS analysis for questionable data quality, it was possible to perform a gear analysis for three out of six fishing technologies (, and PMP). 42

45 Profitability of the EU Fishing Fleet Belgium According to the data provided at segment level, income generated by the Belgian national fleet in 2011 was 82 million (excluding direct income subsidies). This consisted of 79 million in landings value and 3 million in non-fishing income. Total operating costs in 2011 amounted to 73 million, about 89% of total income. Crew costs (including unpaid labour) and fuel costs, the two major fishing expenses, were 26 and 25 million, respectively. The Gross Value Added (GVA), gross profit and net profit generated by the Belgian fleet in 2011 were 36 million, 9 million and 1 million, respectively. Table 5 provides a breakdown of the key economic indicators for the Belgian fleet segments in The beam trawlers (TBB), was the most relevant in terms of landings income, accounting for almost 9 of the total. In the same year, more than 86% of the total operating costs was generated by this segment. Table 5: Belgium - Key economic indicators ( ) by fishing technology, 2011 Variable (thousand ) DRB TBB Sample Coverage (%) Income from landings 1, , , ,862.2 Other income ,610.4 Direct income subsidies ,501.1 Total operating costs 1, , , ,897.4 Wages and salaries of crew , ,892.8 Unpaid labour value ,675.2 Energy costs , ,287.0 Repair & maintenance costs ,965.0 Other variable costs , ,857.7 Non-variable costs ,219.7 Annual depreciation costs , ,412.6 Opportunity costs of capital Gross Value Added (GVA) , ,143.3 GVA/FTE GVA/Asset Value (%) Gross Profit ,575.2 Net Profit (sample) ,764.3 Net profit margin (%) Net profit with subsidies (sample) ,265.4 Net profit margin with subsidies (%) Sub-sample Coverage(%) Source: EU Member States DCF data submissions (data for 2011) 43

46 Policy Department B: Structural and Cohesion Policies Bulgaria The amount of landings income generated by the part of the Bulgarian fleet covered by the analysis in 2011 was 1.9 million (excluding direct income subsidies). Table 6 provides a breakdown of the key economic indicators by fleet segments in The pelagic trawl () segment, which comprised around 40 vessels in 2011, was the most relevant in terms of landings income. This segment operates predominantly in Area 37, targeting a variety of species but in particular European sprat, Mediterranean horse mackerel and Picked dogfish. The amount of income generated by this segment (note: data coverage for this segment is less than 5) in 2011 was about 1.6 million, while total operating costs equated to almost 913 thousand, amounting to 58% of total income. The largest expenditures were crew wages (almost 300 thousand) and energy costs ( 200 thousand), together representing 55% of total costs (Table 6). This fleet segment was profitable, with a reported gross profit of around 0.65 million in Table 6: Bulgaria - Key economic indicators by fishing technology 2011 Variable (thousand ) PMP Sample Coverage( %) Income from landings , Other income Direct income subsidies Total operating costs 2, ,886.1 Wages and salaries of crew Unpaid labour value Energy costs Repair & maintenance costs Other variable costs ,113.8 Non-variable costs Annual depreciation costs Opportunity costs of capital Gross Value Added (GVA) ,244.9 GVA/FTE GVA/Asset Value (%) -2, ,273.0 Gross Profit -1, ,697.3 Net Profit (sample) -1, ,733.8 Net profit margin (%) Net profit with subsidies (sample) -1, ,733.8 Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 44

47 Profitability of the EU Fishing Fleet Denmark According to the data provided at segment level, the amount of income generated by the Danish fleet in 2011 was 395 million (excluding direct income subsidies) (note: almost full coverage for each segment). Total operating costs incurred by the national fleet equated to 260 million, amounting to 66% of total income in Crew and fuel costs, the two major fishing expenses accounted for 115 and 53 million respectively in Table 7 provides a breakdown of the key economic indicators for the Danish fleet segments in The Danish demersal trawlers/seiners are the most relevant fleet segment in terms of fishing income. Around 300 vessels make up this segment which operates predominately in the North Sea, North Atlantic and Skagerrak, targeting demersal species such as cod, plaice, Norway lobster and Northern prawn. The amount of income generated by this fleet in 2011 was 317 million. This consisted of almost 310 million in landings value, 7.2 million in non-fishing income and 0.2 million in direct subsidies (contributing less than of total income). Total operating costs incurred equated to almost 189 million, amounting to 6 of total income. The largest expenditures were crew wages ( 60 million) and energy costs ( 44 million). In terms of profitability, the amount of GVA, gross profit and net profit (excluding subsidies) generated by this segment were positive, amounting to 208 million, 127 million and 54 million respectively. This fleet segment made a profit margin of 17%. Table 7: Denmark - Key economic indicators by fishing technology 2011 Variable (thousand ) DRB PGP PMP TBB Sample Coverage (%) Income from landings 309, , , , ,868.7 Other income 7, , Direct income subsidies Total operating costs 189, , , , ,482.1 Wages and salaries of crew 60, , , ,022.4 Unpaid labour value 20, , , , Energy costs 43, , , ,541.1 Repair & maintenance costs 29, , , Other variable costs 22, , , Non-variable costs 13, , , Annual depreciation costs 72, , , , ,350.0 Opportunity costs of capital Gross Value Added (GVA) 207, , , , ,401.7 GVA/FTE GVA/Asset Value (%) Gross Profit 127, , , Net Profit (sample) 54, , ,934.3 Net profit margin (%) Net profit with subsidies (sample) 54, , ,934.3 Net profit margin with subsidies (%) Sub-sample Coverage( %) Source: EU Member States DCF data submissions (data for 2011) 45

48 Policy Department B: Structural and Cohesion Policies Finland According to the data provided at segment level, the amount of income (excluding direct income subsidies) generated by the Finnish national fleet in 2011 was almost 36 million. This consisted of 33 million in landings value and 2.5 million in other income. Gross profit margin was only 1, and insufficient to cover the estimated capital costs, generating a net loss in Table 8 provides a breakdown of the main economic indicators for the Finnish fleet segments in The Finnish pelagic trawl segment () was economically the most important fleet. The fleet operates in the Baltic Sea targeting herring and sprat. These vessels accounted for almost 7 of the landings income generated by the Finnish fleet. The amount of income generated by this fleet in 2011 was 23.2 million. This consisted of almost 22.4 million in landings value, 0.8 million in non-fishing income and 2.5 thousand in direct subsidies. Total operating costs incurred by the Finnish pelagic trawlers in 2011 equated to 20 million, amounting to 9 of total income. The largest expenditures were energy costs ( 8.6 million) and crew wages ( 4.6 million). In terms of profitability, GVA and gross profit generated by this segment of the fleet were positive, amounting to 7.6 million and 3 million respectively. The fleet experienced a net loss (excluding subsidies) of 182 thousand. Table 8: Finland - Key economic indicators by fishing technology 2011 Variable (thousand ) PG Sample Coverage (%) Income from landings , ,444.5 Other income ,623.7 Direct income subsidies ,515.8 Total operating costs , ,338.9 Wages and salaries of crew 2.1 3, Unpaid labour value , ,138.5 Energy costs , ,681.1 Repair & maintenance costs , ,963.5 Other variable costs , ,306.8 Non-variable costs 9.5 2, ,585.2 Annual depreciation costs , ,409.0 Opportunity costs of capital Gross Value Added (GVA) , ,531.5 GVA/FTE GVA/Asset Value (%) Gross Profit , Net Profit (sample) Net profit margin (%) Net profit with subsidies (sample) Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 46

49 Profitability of the EU Fishing Fleet France The amount of income (excluding direct income subsidies) generated by the part of the French fleet covered by the analysis in 2011 was almost 1.16 billion. This consisted of 1.14 billion in landings value and 19.5 million in non-fishing income. Total operating costs incurred by the analysed share of the fleet in 2011 equated to 975 million, amounting to 84% of total income. Crew and energy costs, the two major fishing expenses, were 410 and 213 million respectively. In terms of economic performance, the total amount of Gross Value Added (GVA), gross profit and net profit were 591 million, 181 million and 41 million (note: coverage less than 5 for many segments, PGO and MGO not included), respectively. Table 9 Table 9 provides a breakdown of the key economic indicators for the French fleet segments in The French fleet is highly diversified with a wide range of vessel types targeting different species predominantly in North East Atlantic Ocean. However, some fleets are also fishing in Mediterranean Sea and Other Regions. The demersal trawler/seiners constitute the most important segment in terms of value landed in The total amount of income generated by this fleet segment in 2011 was around 450 million (note: data coverage for this segment is 97%). This consisted of 440 million in landings value, 6.3 thousand in non-fishing income and 4.5 thousand in direct subsidies. Total operating costs incurred by the French demersal trawlers/seiners in 2011 equated to almost 397 million, amounting to 88% of total income. The largest expenditures were crew wages ( million) and fuel costs ( million). In terms of profitability, the total amount of GVA, gross profit and net profit (excluding subsidies) generated by this segment of the fleet were positive, amounting to million, 49 million and 9.4 million respectively. The fleet generated a positive profit margin of 2. in

50 Policy Department B: Structural and Cohesion Policies Table 9: France - Key economic indicators by fishing technology 2011 Variable (thousand ) FPO HOK DRB MGP PGP PMP PS PGO MGO Sample Coverage (%) Income from landings 208, , , , , , , , , , , ,433.5 Other income 4, , , , , Direct income subsidies , , Total operating costs 168, , , , , , , , , , , ,464.8 Wages and salaries of crew 88, , , , , , , , , , , ,830.0 Unpaid labour value Energy costs 19, , , , , , , , , , ,104.4 Repair & maintenance costs 11, , , , , , , , , , Other variable costs 20, , , , , , , , , , ,214.9 Non-variable costs 28, , , , , , , , , , , ,671.4 Annual depreciation costs 12, , , , , , , , ,236.2 Opportunity costs of capital 1, , , Gross Value Added (GVA) 133, , , , , , , , , , , ,112.0 GVA/FTE GVA/Asset Value (%) % 33.28% % 25.03% 44.56% 54.24% 74.69% 50.06% 31.14% 50.44% Gross Profit 44, , , , , , , , , , , ,282.0 Net Profit 12, , , , , , ,980.7 Net profit margin (%) 5.7% % 1.5% 0.9% 7.6% % % Net Profit with subsidies 12, , , , , , , , ,098.0 Net profit margin with subsidies (%) % 8.3% 9.7% 1.4% sub-sample coverage (%) Source: EU Member States DCF data submissions (data for 2011) 48

51 Profitability of the EU Fishing Fleet Germany According to the data provided at segment level, the amount of income (excluding direct income subsidies) generated by the German national non-pelagic fleet in 2011 was 131 million. This consisted of 126 million in landings value and 4 million in non-fishing income (including direct income subsidies). Total operating costs incurred by this fleet equated to 115 million, amounting to 89% of total income. Labour costs and fuel costs, the two major fishing expenses, were 43 and 26 million respectively. In terms of economic performance, the total amount of Gross Value Added (GVA), gross profit and net profit generated by the German non-pelagic fishing fleet in 2011 were 58 million, 15 million and -6 million, respectively. Table 10 provides a breakdown of key economic indicators by fleet segment in The German demersal trawlers/seiners were the most productive in terms of landed value. The total amount of income generated by this fleet in 2011 was almost 80 million. This consisted of almost 78.5 million in landings value, 0.7million in non-fishing income and 467 thousand in direct subsidies. Total operating costs incurred by this fleet equated to over 68 million, amounting to around 86.4% of total income. The largest expenditures were crew wages ( 25.6 million) and fuel costs ( 16.7 million). In terms of profitability, the total amount of GVA and gross profit generated by this segment of the fleet were positive, amounting to 36.6 million and 11 million respectively. The fleet generated a net (excluding subsidies) loss of 0.86 million, and a net subsidised loss of 0.4. Table 10: Germany - Key economic indicators by fishing technology 2011 Variable (thousand ) TBB PG Sample Coverage (%) Income from landings 7, , , ,328.7 Other income , ,293.4 Direct income subsidies Total operating costs 7, , , ,361.2 Wages and salaries of crew 2, , , ,813.5 Unpaid labour value , , Energy costs 1, , , Repair & maintenance costs , , ,631.9 Other variable costs , , ,090.4 Non-variable costs 3, , , ,100.1 Annual depreciation costs , , ,656.7 Opportunity costs of capital Gross Value Added (GVA) 2, , , ,930.2 GVA/FTE GVA/Asset Value (%) Gross Profit , , Net Profit (sample) -1, , ,403.7 Net profit margin (%) Net profit with subsidies (sample) -1, , Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 49

52 Policy Department B: Structural and Cohesion Policies Ireland In 2011 the total amount of income (excluding direct income subsidies) generated by the share of the Irish fleet covered by the analysis was million. This consisted of million in landings value and 6.7 million in non-fishing income. Total operating costs equated to 201 million, amounting to more than 8 of total income. Crew costs and fuel costs, the two major fishing expenses, were 66.3 and 49.8 million respectively. In terms of economic performance, the total amount of Gross Value Added (GVA), gross profit and net profit was million, 45.3 million and million, respectively (note: reduced coverage for most segments). Table 11 provides a breakdown of the main economic indicators by fleet segments in The Irish demersal trawler/seiner fleet were the most relevant in terms of landings value (note: reduced data coverage for the pelagic trawl segment). The amount of income generated by this fleet segment in 2011 was 95.5 million. This consisted of almost 91.6 million in landings value, 3.5 million in non-fishing income and 0.4 million in direct subsidies. Total operating costs incurred by the Irish demersal trawlers equated to almost 78 million, amounting to around 82% of total income. The largest expenditures were crew wages ( 21.7 million) and fuel costs ( 29.8 million). In terms of profitability, the total amount of GVA and gross profit generated by this segment of the fleet were positive, amounting to 38 million and 17 million, respectively. The fleet experienced a net loss of 0.9 million, generating a negative profit margin of almost in Table 11: Ireland - Key economic indicators by fishing technology 2011 Variable (thousand ) FPO DRB Sample Coverage (%) Income from landings 23, , , , ,770.2 Other income , , Direct income subsidies Total operating costs 14, , , , ,707.1 Wages and salaries of crew 1, , , , Unpaid labour value , ,603.8 Energy costs 2, , , , ,346.3 Repair & maintenance costs 1, , , , ,273.4 Other variable costs 3, , , , ,031.3 Non-variable costs 4, , , , ,294.2 Annual depreciation costs , , Opportunity costs of capital 1, , , , ,396.9 Gross Value Added (GVA) 10, , , , ,023.0 GVA/FTE GVA/Asset Value (%) Gross Profit 9, , , , ,261.1 Net Profit (sample) 7, , ,545.8 Net profit margin (%) Net profit with subsidies (sample) 7, , ,544.2 Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 50

53 Profitability of the EU Fishing Fleet Italy According to the data provided at segment level, the amount of income generated by the Italian national fleet in 2011 was 1.1 billion, exclusively composed of landings value. Total operational costs incurred by the Italian fleet in 2011 amounted to 798 million, equal to 72% of total income. Crew costs and fuel costs, the two major cost items, were 280 and 302 million respectively. In terms of economic performance, the amount of GVA, gross profit and net profit generated by the Italian national fleet in 2011 were 583 million, 303 million and 80 million respectively. Table 12 provides a breakdown of the main economic indicators by fleet segment in The Italian demersal trawl/seiner fleet was the most relevant in terms of value landed. The amount of income generated by this fleet segment in 2011 was 516 million. Total operating costs incurred by the demersal trawlers/seiners equated to almost 402 million, amounting to 78% of total income. The largest expenditures were crew wages ( million) and fuel costs ( 189 million). In terms of profitability, the amount of GVA, gross profit and net profit (excluding subsidies) generated by this segment of the fleet were positive, amounting to 226 million, 113 million and 3.5 million respectively. The fleet segment generated a positive profit margin of almost in

54 Policy Department B: Structural and Cohesion Policies Table 12: Italy - Key economic indicators by fishing technology 2011 Variable (thousand ) HOK DRB PGP PMP PS TBB Sample Coverage (%) Income from landings 515, , , , , , , ,440.4 Other income Direct income subsidies Total operating costs 402, , , , , , , ,790.9 Wages and salaries of crew 111, , , , , , , ,278.2 Unpaid labour value 1, , Energy costs 189, , , , , , , ,096.9 Repair & maintenance costs 18, , , , , , ,271.2 Other variable costs 62, , , , , , ,578.6 Non-variable costs 19, , , , , , Annual depreciation costs 98, , , , , , ,059.9 Opportunity costs of capital 10, , , , Gross Value Added (GVA) 225, , , , , , , ,927.7 GVA/FTE GVA/Asset Value (%) Gross Profit 113, , , , , , , ,649.5 Net Profit (sample) 3, , , , , , Net profit margin (%) Net profit with subsidies (sample) 3, , , , , , Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 52

55 Profitability of the EU Fishing Fleet Latvia According to the data provided at segment level, the amount of income (excluding direct income subsidies) generated by the Latvian national fleet in 2011 was 23 million, including 22 million in landings income and 1 million in non-fishing income. Total operating costs incurred by the fleet in 2011 were 15 million, amounting to 67% of total income. Crew cost and fuel costs, the two major fishing expenses, were 3 and 4 million respectively. In terms of economic performance, the amount of GVA, gross profit and net profit generated by the national fleet in 2011 were 11 million, 7 million and 6 million respectively. Table 13 provides a breakdown of the main economic indicators by fleet segment in The Latvian pelagic trawlers were the most relevant in terms of value landed. These vessels are based predominantly in the Baltic Sea and target pelagic species such as European sprat and Atlantic herring. The amount of income generated by this fleet segment in 2011 was 19.9 million. This consisted of almost 18 million in landings value, 0.7 million in non-fishing income and 1.2 million in direct subsidies. Total operating costs incurred by pelagic trawlers in 2011 equated to 13.6 million, amounting to 68% of total income. The largest expenditures were crew wages ( 2.9 million) and energy costs ( 3.8 million). In terms of profitability, the total amount of GVA, gross profit and net profit (excluding subsidies) generated by this segment of the fleet were positive, amounting to 8 million, 5 million and 4 million respectively. This fleet segment showed a good performance in 2011, with a net profit margin of 22%. Table 13: Latvia - Key economic indicators by fishing technology 2011 Variable (thousand ) PGP Sample Coverage (%) Income from landings 2, , ,220.0 Other income Direct income subsidies , Total operating costs 1, , Wages and salaries of crew , Unpaid labour value 21.2 Energy costs , Repair & maintenance costs Other variable costs , Non-variable costs , Annual depreciation costs Opportunity costs of capital Gross Value Added (GVA) 1, , ,164.9 GVA/FTE GVA/Asset Value (%) Gross Profit 1, , ,073.2 Net Profit (sample) 1, , ,032.0 Net profit margin (%) Net profit with subsidies (sample) 1, , ,136.6 Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 53

56 Policy Department B: Structural and Cohesion Policies Lithuania According to the data provided at segment level, the amount of income (excluding direct income subsidies) generated by the Lithuanian national fleet in 2011 was 47million (note: almost full coverage for all fleet segments). This consisted of 46.5 million in landings and 0.4 million in non-fishing income. Total operating costs incurred by the national fleet equated to 39.5 million, amounting to 84% of total income. Other variable costs and energy costs, as the two major fishing expenses, were 12.7 and 12.3 million respectively. In terms of economic performance, the amount of Gross Value Added (GVA), gross profit and net profit generated by the Lithuanian national fleet in 2011 were 12.9 million, 7.5 million and 4.7 million, respectively. Table 14 provides a breakdown of the main economic indicators by fleet segments in The Lithuanian fleet is highly diversified with a broad range of vessel types targeting different species predominantly in the Baltic Sea and in other fishing regions, particularly in CECAF. The pelagic trawlers are the most relevant in terms of landed value. This segment is mostly represented by big industrial vessels, mostly fishing in Mauritania and Morocco. The amount of income generated by this fleet segment in 2011 was million. This consisted of almost 42 million in landings value, 57 thousand in non-fishing income and 264 thousand in direct subsidies. Total operating costs incurred by the pelagic trawlers in 2011 equated to almost 35 million, amounting to 83% of total income. The largest expenditures were crew wages ( 4.4 million) and energy costs ( 11 million). In terms of profitability, the amount of GVA, gross profit and net profit (excluding subsidies) generated by this segment of the fleet were positive, amounting to 1.3 million, 491 thousand and 267 thousands, respectively. The fleet segment generated a net profit margin of 6% in Table 14: Lithuania - Key economic indicators by fishing technology 2011 Variable (thousand ) PG Sample Coverage (%) Income from landings , , Other income Direct income subsidies Total operating costs , , Wages and salaries of crew , Unpaid labour value Energy costs , Repair & maintenance costs , Other variable costs , Non-variable costs , Annual depreciation costs , Opportunity costs of capital Gross Value Added (GVA) , , GVA/FTE GVA/Asset Value (%) Gross Profit , Net Profit (sample) , Net profit margin (%) Net profit with subsidies (sample) , Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 54

57 Profitability of the EU Fishing Fleet Malta According to the data provided at segment level, in 2011 the amount of income generated by the share of the Maltese fleet covered by the analysis was 7.5 million. Total operating costs incurred in 2011 equated to 11 million, amounting to more than total income. Crew costs and fuel costs, the two major fishing expenses, were 6.3 and 1.9 million respectively. Table 15 provides a breakdown of the main economic indicators for the Maltese fleet segments in The Maltese fleet is highly diversified with a broad range of vessel types targeting different species in the Mediterranean (AREA37). Vessels using hooks (HOK) are the most productive segment. The fleet targets a variety of pelagic and demersal species mainly using surface and bottom long-liners. The total amount of income generated by this fleet segment (note: almost 8 coverage). In 2011 was 4.36 million. This consisted of almost 4.33 million in landings value 30.5 thousand in direct subsidies. Total operating costs incurred by the Maltese hook and line segment in 2011 equated to 6.4 million. The largest expenditures were crew wages ( 3.2 million) and energy costs ( 1.15 million). In terms of profitability, the amount of GVA generated was 1.2 million. The fleet was unprofitable in 2011, making a gross loss of 2 million and a net loss of 5 million. Table 15: Malta - Key economic indicators by fishing technology 2011 Variable (thousand ) HOK PGP PMP PS MGO Sample Coverage (%) Income from landings , ,458.0 Other income Direct income subsidies Total operating costs , , ,650.3 Wages and salaries of crew Unpaid labour value 2, , Energy costs , Repair & maintenance costs Other variable costs , Non-variable costs Annual depreciation costs 2, , Opportunity costs of capital Gross Value Added (GVA) , GVA/FTE GVA/Asset Value (%) Gross Profit , , Net Profit (sample) -2, , , ,064.7 Net profit margin (%) Net profit with subsidies (sample) -2, , , ,058.9 Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 55

58 Policy Department B: Structural and Cohesion Policies Netherlands According to the data provided at segment level, the total amount of income generated by the Dutch national fleet in 2011 was 328 million, while costs incurred equated to 324 million, amounting to almost 10 of total income. Crew costs and energy costs, the two major fishing expenses, were 78 million and 105 million respectively. In terms of economic performance, the amount of Gross Value Added (GVA) and gross profit generated by the Dutch national fleet in 2011 were 109 million and 30.8 million respectively. Table 16 provides a breakdown of the main economic indicators for the main Dutch fleet segments in The fleet is highly diversified with a broad range of vessel types targeting different species predominantly in the North Sea (demersal fleet) and in the North East Atlantic Ocean (pelagic fleet), around the UK and Ireland. Additionally, a part of the pelagic fleet operates in African waters and in the Pacific. The Dutch beam trawlers were the most productive in terms of landed value. The amount of income generated by this fleet segment in 2011 was million. Total operating costs incurred by the Dutch beam trawlers in 2011 equated to almost million, amounting to around 88% of total income. The largest expenditures were crew wages ( 37 million) and energy costs ( 61.5 million). In terms of profitability, the amount of GVA, gross profit and net profit (excluding subsidies) generated by this segment of the fleet were positive, amounting to 63 million, 22 million and almost 7.7 million respectively. Table 16: Netherlands - Key economic indicators by fishing technology 2011 Variable (thousand ) DRB PGP TBB PG Sample Coverage (%) Income from landings 31, , , , ,665.1 Other income Direct income subsidies Total operating costs 22, , , Wages and salaries of crew 6, , , Unpaid labour value ,179.5 Energy costs 5, , , Repair & maintenance costs 2, , , Other variable costs 2, , , Non-variable costs 3, , , Annual depreciation costs 2, , , Opportunity costs of capital Gross Value Added (GVA) 17, , , , ,398.7 GVA/FTE , GVA/Asset Value (%) 138.8% % 55.8% 238.3% Gross Profit 9, , , , ,373.5 Net Profit 4, , , ,324.6 Net profit margin (%) 13.2% -27.2% -38.5% 4.4% 92.7% Net Profit with subsidies 4, , , ,324.6 Net profit margin with subsidies (%) 14.7% -27.2% -38.5% 4.4% 92.7% sub-sample coverage (%) Source: EU Member States DCF data submissions (data for 2011) 56

59 Profitability of the EU Fishing Fleet Poland According to the data provided at segment level, the amount of income generated by the Polish Baltic fleet 15 (excluding direct income subsidies) in 2011 was 46.4 million (note: almost full coverage for all fleet segments). This consisted of 46 million in landings value and 0.37 million in non-fishing income. Total estimated operating costs incurred by this fleet in 2011 equated to 38 million, amounting to 8 of total income. Crew costs and fuel costs, the two major fishing expenses, were 13 and 10 million respectively. In terms of economic performance, the amount of Gross Value Added (GVA), gross profit and net profit generated by the Polish Baltic fleet in 2011 were 21.5 million, 8.8 million and 4.8 million, respectively. Table 17 provides a breakdown of the main economic indicators for Polish fleet segments in The Polish fleet is moderately diversified with a range of vessel types targeting different species predominantly in the Baltic Sea (few industrial vessels are also fishing in NE Atlantic, Mauritanian and Moroccan waters). The pelagic trawl segment is the most productive, with almost 21.5 million in landed value in The amount of income generated by this fleet segment in 2011 was 26.3 million, including almost 4.7 million in direct subsidies (almost 18% of total income). Total operating costs incurred by the Polish pelagic trawlers in 2011 equated to almost 19 million, amounting to 72% of total income. The largest expenditures were crew wages ( 5 million) and fuel costs ( 6.3 million). This fleet segment was profitable, with a reported GVA of 8 million, gross profit of around 2.6 million and net profit of 900 thousand in The net profit margin for the segment increases from 4% to 2 when considering direct income subsidies. Table 17: Poland - Key economic indicators by fishing technology 2011 Variable (thousand ) HOK PG Sample Coverage (%) Income from landings 1, , , ,925.4 Other income Direct income subsidies , , , ,997.8 Total operating costs 1, , , , ,920.6 Wages and salaries of crew , , ,756.9 Unpaid labour value Energy costs , , ,136.8 Repair & maintenance costs , , Other variable costs , ,123.2 Non-variable costs , , Annual depreciation costs , Opportunity costs of capital Gross Value Added (GVA) 1, , , ,322.6 GVA/FTE GVA/Asset Value (%) Gross Profit , , , ,102.4 Net Profit (sample) , , ,276.1 Net profit margin (%) Net profit with subsidies (sample) , , ,273.8 Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 15 Due to confidentiality reasons a distant water fleet was excluded from an economic performance analysis. 57

60 Policy Department B: Structural and Cohesion Policies Portugal According to the data provided at segment level, the amount of income generated by the Portuguese national fleet in 2011 was 425 million (excluding direct income subsidies). This consisted of 413 million in landings value and 11.4 million in non-fishing income. Total operating costs incurred equated to 302 million in 2011, amounting to 7 of total income. Crew costs and fuel costs, the two major fishing expenses, were 150 and 76 million respectively. In terms of economic performance, the amount of Gross Value Added (GVA), gross profit and net profit generated by the Portuguese national fleet in 2011 were million, 123 million and 40 million, respectively. Table 18 provides a breakdown of the main economic indicators by fleet segments in The Portuguese fleet is highly diversified with a broad range of vessel types targeting different species predominantly in the Portuguese Exclusive Economic Zone (including Azores and Madeira). The Portuguese demersal trawler/seiners were the most productive, with a total amount of income of almost 140 million in This consisted of almost 135 million in landings value, 2.8 million in non-fishing income and 1.2 million in direct subsidies. Total operating costs incurred by this segment in 2011 equated to 100 million, amounting to 72% of total income. The largest expenditures were crew wages ( 38.7 million) and energy costs ( 34.8 million). In terms of profitability, the amount of GVA, gross profit and net profit (excluding subsidies) generated by this segment of the fleet were positive, amounting to 77 million, 38 million and 13 million respectively. This segment reported a profit margin of around 1 in

61 Profitability of the EU Fishing Fleet Table 18: Portugal Key economic indicators by fishing technology 2011 Variable (thousand ) FPO HOK DRB MGP PGP PMP PS Sample Coverage (%) Income from landings 20, , , , , , , , ,368.6 Other income 1, , , , , ,299.7 Direct income subsidies , Total operating costs 16, , , , , , , , ,619.8 Wages and salaries of crew 8, , , , , , ,192.1 Unpaid labour value Energy costs 3, , , , , , ,455.5 Repair & maintenance costs 1, , , , , , ,586.7 Other variable costs 2, , , , , , ,150.9 Non-variable costs 1, , , , , , ,119.8 Annual depreciation costs 5, , , , , , ,416.2 Opportunity costs of capital 1, , , , , Gross Value Added (GVA) 13, , , , , , ,355.4 GVA/FTE GVA/Asset Value (%) Gross Profit 4, , , , , , ,048.5 Net Profit (sample) -2, , , , , , ,889.0 Net profit margin (%) Net profit with subsidies (sample) -2, , , , , , ,988.8 Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 59

62 Policy Department B: Structural and Cohesion Policies Romania According to the data provided at segment level, the amount of income (excluding direct income subsidies) generated by the Romanian national fleet from landings in 2011 was 1.42 million. Total operating costs incurred by the Romanian fleet in 2011 equated to 1.02 million, amounting to almost 72% of total income. Crew costs and fuel costs, the two major fishing expenses, were 463 and 256 thousand respectively. In terms of economic performance, the total amounts of Gross Value Added (GVA), gross profit and net profit were 862 thousand, 401 thousand million and 275 thousand respectively. Table 19 provides a breakdown of the key economic indicators by the fleet segments in The Romanian fleet is not very diversified and operates in the Black Sea only. In terms of productivity, vessels using active and passive gears (PMP) were the most relevant in The total amount of income generated by this fleet segment in 2011 was almost 990 thousand, consisting entirely of landings income. Total operating costs incurred by this Romanian fleet in 2011 equated to almost 640 thousand, amounting to 65% of income. The largest expenditures were crew wages ( 309 thousand) and fuel costs ( 88 thousand). In terms of profitability, the total amount of GVA, gross profit and net profit (excluding subsidies) generated by this segment of the fleet were positive, amounting to 659 thousand, 350 thousand and 262 thousand respectively. Table 19: Romania - Key economic indicators by fishing technology 2011 Variable (thousand ) PG PGO PMP Sample Coverage (%) Income from landings Other income Direct income subsidies Total operating costs Wages and salaries of crew Unpaid labour value Energy costs Repair & maintenance costs Other variable costs Non-variable costs Annual depreciation costs Opportunity costs of capital Gross Value Added (GVA) GVA/FTE GVA/Asset Value (%) 24% 2% 62% Gross Profit Net Profit (sample) Net profit margin (%) 4% -24% 26% Net profit with subsidies (sample) Net profit margin with subsidies (%) 4% -24% 26% Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 60

63 Profitability of the EU Fishing Fleet Slovenia According to the data provided at segment level, the amount of income (excluding direct income subsidies) generated by the Slovenian national fleet in 2011 was 2.7 million, consisting of 2.1 million in landings value and 0.6 million in non-fishing income. Total operating costs incurred by the Slovenian fleet equated to 2.7 million, amounting to almost 10 of total income. Crew cost and fuel costs, the two major fishing expenses, were 1.6 and 0.6 million respectively. In terms of economic performance, the amount of Gross Value Added (GVA), gross profit and net profit generated by the Slovenian fleet in 2011 was 1.6 million, 0.03 million and million, respectively. Table 20 provides a breakdown of the main economic indicators by Slovenian fleet segments in The Slovenian fleet is diversified with a wide range of vessel types targeting different species predominantly in the Adriatic sea/mediterranean area. The demersal trawler/seiner segment was the most relevant in terms value of landings. The total amount of income generated by this fleet segment in 2011 was 686 thousand. This consisted of almost 664 thousand in landings value and 21 thousand in direct subsidies. Total operating costs incurred by the Slovenian demersal trawlers in 2011 equated to almost 739 thousand, generating a negative gross profit of about 74 thousand. The largest expenditures were crew wages ( 394 thousand) and energy costs ( 198 thousand). In terms of profitability, the fleet generated 320 thousand in GVA but experienced a gross loss of 74 thousand and net loss (excluding subsidies) of 174 thousand. This fleet segment generated a negative (subsidised) profit margin of 22% in Table 20: Slovenia - Key economic indicators by fishing technology 2011 Variable (thousand ) PS Sample Coverage (%) Income from landings Other income Direct income subsidies Total operating costs Wages and salaries of crew Unpaid labour value Energy costs Repair & maintenance costs Other variable costs Non-variable costs Annual depreciation costs Opportunity costs of capital Gross Value Added (GVA) GVA/FTE GVA/Asset Value (%) Gross Profit Net Profit (sample) Net profit margin (%) Net profit with subsidies (sample) Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 61

64 Policy Department B: Structural and Cohesion Policies Spain According to the data provided at segment level, the amount of income (excluding direct income subsidies) generated by the Spanish national fleet in 2011 was 1.98 billion (note: almost full coverage for each segment). This consisted of 1.95 million in landings value and 35 million in non-fishing income. Total operating costs incurred by the fleet equated to 1.8 billion, amounting to 9 of total income. Crew costs and energy costs, the two major fishing expenses, were 658 and 440 million respectively. In terms of economic performance, the amount of Gross Value Added (GVA), gross profit and net profit generated by the Spanish fleet in 2011 were 839 million, 180 million and 18 million respectively. Table 21 provides a breakdown of the main economic indicators by fleet segments in The Spanish fleet is highly diversified with a broad range of vessels types targeting a wide variety of species predominantly in the Mediterranean Sea and the North East Atlantic Ocean. The Spanish demersal trawler/seiner was the most important segment in terms of landed value in The total amount of income generated by this fleet segment in 2011 was 806 million. This consisted of almost million in landings value, 11 million in nonfishing income and 12 million in direct subsidies. Total operating costs incurred by this fleet in 2011 equated to 750 million, amounting to 93% of total income. The largest expenditures were crew wages ( million) and energy costs ( 240 million). In terms of profitability, the total amount of GVA and gross profit generated by this segment of the fleet were positive, amounting to million and 43 million. However, the fleet made a net loss of almost 22 million in Direct income subsidies contributed to around 1.5% of total income, but the fleet generated a negative profit (subsidised) margin of -1.2% in

65 Profitability of the EU Fishing Fleet Table 21: Spain - Key economic indicators by fishing technology 2011 Variable (thousand ) HOK MGP PGP PMP PS Sample Coverage (%) Income from landings 25, , , , , , ,643.1 Other income 11, , , ,351.4 Direct income subsidies , , , ,988.5 Total operating costs 21, , , , , , ,570.4 Wages and salaries of crew 12, , , , , , ,548.6 Unpaid labour value , , , ,406.5 Energy costs 2, , , , , , ,805.1 Repair & maintenance costs 1, , , , , ,722.6 Other variable costs 3, , , , , ,163.0 Non-variable costs 1, , , , , ,924.6 Annual depreciation costs 1, , , , , ,915.5 Opportunity costs of capital , , , ,223.6 Gross Value Added (GVA) 16, , , , , , ,379.1 GVA/FTE GVA/Asset Value (%) Gross Profit 3, , , , , ,424.0 Net Profit (sample) 2, , , , , ,865.4 Net profit margin (%) Net profit with subsidies (sample) 3, , , , , ,853.8 Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 63

66 Policy Department B: Structural and Cohesion Policies Sweden According to the data provided at segment level, the amount of income (excluding direct income subsidies) generated by the Swedish national fleet in 2011 was 130 million. This consisted of 116 million in landings value and 14 million in non-fishing income. Total operating costs incurred by the Swedish fleet in 2011 equated to 98 million, amounting to 75% of total income. Crew costs and fuel costs, the two major fishing expenses, were 27 and 28 million respectively. In terms of economic performance, the total amounts of GVA, gross profit and net profit generated by the Swedish national fleet in 2011 were 59.8 million, 32.5 million and 2 million, respectively. Table 22 provides a breakdown of the main economic indicators by fleet segment in The Swedish fleet is somewhat diversified with a range of vessel types targeting different species predominantly in the Baltic Sea, Skagerrak, and Kattegat. The demersal trawlers/seiners segment was the most productive in Total income generated by this fleet segment in 2011 was 107 million. This consisted of almost 100 million in landings value and 6.8 million in non-fishing income. No direct subsidies were reported for this fleet segment. Total operating costs incurred by the Swedish demersal trawlers/seiners equated to almost 76 million, amounting to 7 of total income. The largest expenditures were crew wages ( 16.8 million) and energy costs ( 23.8 million). In terms of profitability, the total amount of GVA, gross profit and net profit (excluding subsidies) generated by this segment of the fleet were positive, amounting to 49 million, 32 million and 7 million respectively. This fleet segment was profitable, generating a net profit margin of 6.5% in Table 22: Sweden - Key economic indicators by fishing technology 2011 Variable (thousand ) Sample Coverage (%) Income from landings 15, ,969.2 Other income 7, ,779.7 Direct income subsidies Total operating costs 22, ,618.7 Wages and salaries of crew 1, ,294.5 Unpaid labour value 9, ,594.1 Energy costs 3, ,821.0 Repair & maintenance costs 3, ,026.3 Other variable costs 2, ,196.8 Non-variable costs 2, ,685.9 Annual depreciation costs 5, ,588.6 Opportunity costs of capital ,541.3 Gross Value Added (GVA) 10, ,018.9 GVA/FTE GVA/Asset Value (%) Gross Profit ,130.3 Net Profit (sample) -4, ,000.4 Net profit margin (%) Net profit with subsidies (sample) -4, ,000.4 Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 64

67 Profitability of the EU Fishing Fleet United Kingdom According to the data provided at segment level, the amount of income (excluding direct income subsidies) generated by the UK national fleet in 2011 was 972 million. This consisted of 949 million in landings value and 23 million in non-fishing income. Total operating costs incurred by the UK national fleet in 2011 equated to 670 million, amounting to almost 8 of total income. Crew costs and fuel costs, the two major fishing expenses, were 227 and 169 million respectively. In terms of economic performance, the total amounts of GVA, gross profit and net profit generated by the UK national fleet in 2011 were 430 million, 202 million and 162 million respectively. Table 23 provides a breakdown of the key economic indicators for the UK fleet segments in The UK fleet is diversified with a wide range of vessel types targeting different species predominantly in Bering Sea, North Sea, West of Scotland, English Channel and Western Approaches. In terms of productivity, the UK demersal trawlers/seiners are the most relevant, with around 373 million in landings value. The total amount of income generated by this fleet segment in 2011 was million, consisting of almost 373 million in landings value, 12 million in non-fishing income and 19 million in direct subsidies. Total operating costs incurred for this segment in 2011 equated to almost 320 million, amounting to 79% of total income. The largest expenditures were crew wages ( 82 million) and energy costs ( 88.7 million). In terms of profitability, the amount of GVA, gross profit and net profit (excluding subsidies) generated by this segment of the fleet were positive, amounting to million, 65.5 million and 48.6 million respectively. Direct income subsidies, contributing to almost 5% to total income, augmented the fleet s profit margin from 12.6% to almost 17% in

68 Policy Department B: Structural and Cohesion Policies Table 23: United Kingdom - Key economic indicators by fishing technology 2011 Variable (thousand ) FPO HOK DRB PGP PS TBB Sample Coverage (%) Income from landings 35, , , , , , , ,009.3 Other income 1, , , , Direct income subsidies , , , , ,966.8 Total operating costs 32, , , , , , , ,369.3 Wages and salaries of crew 10, , , , , , ,241.2 Unpaid labour value 2, , Energy costs 3, , , , , , ,450.2 Repair & maintenance costs 2, , , , , , ,607.5 Other variable costs 10, , , , , , ,915.6 Non-variable costs 2, , , , , , ,141.1 Annual depreciation costs 1, , , , , ,399.6 Opportunity costs of capital , , Gross Value Added (GVA) 17, , , , , , , ,301.1 GVA/FTE GVA/Asset Value (%) Gross Profit 4, , , , , , ,046.1 Net Profit (sample) 3, , , , , , ,998.9 Net profit margin (%) Net profit with subsidies (sample) 3, , , , , , ,965.7 Net profit margin with subsidies (%) Sub-sample Coverage (%) Source: EU Member States DCF data submissions (data for 2011) 66

69 Profitability of the EU Fishing Fleet In summary, in 2011 high profit margins (>25%) were obtained mainly in the static gear segments and included the following: the Finnish, Irish and Latvian segments; the Dutch PG segment and the Latvian PGP segment. In fact, all the Latvian fleet segments generated relatively high profit margins (>22%). Several mobile fleet segments also obtained high profit margins, these included: the Slovenian and UK PS; Polish and UK DRB. Fleet segments with good profit margins (>1) covered a mix of static and mobile gear segments, including: the Spanish, PGP and PS segments; the Italian and Portuguese HOK segments; Lithuanian ; the Danish, Dutch and UK. In fact, in the Danish fleet, was the only segment to make a profit in For the Maltese fleet, only the PS segment obtained a positive profit margin (14%), otherwise all the other segments, as with all German fleet segments, made losses in Contribution of the fish catching sector to national GDP and agricultural GVA In 2011, the fish catching sector (fishing fleet) contributed 3.4 billion (excluding subsidies) to the EU GDP (excluding Cyprus, Greece and Estonia). At the EU level, the fish catching sector contributed to less than 0.03% of the EU GDP in 2011, highlighting the insignificant role that fisheries plays in the European economy. The fish catching sectors contribution to national GDP is very low, with all member states fish catching sectors contributing to less than 0.2% of the national GDP (Table 24). At the Member State level, the Spanish fleet generated the highest GVA ( 839 million) but contributed to only 0.8% of the national GDP. Fisheries (primary sector) contribution to national GDP in fact amounted to less than 0.2% in all MS, ranging from 0.17% in Portugal to less than 0.0 in several MS, including Bulgaria, Germany, Romania and Slovenia. When compared to the agricultural sector, fisheries also play a minor role, never exceeding more than 15% of the GVA generated by the sector (Table 24). 67

70 Policy Department B: Structural and Cohesion Policies Table 24: Member State Contribution of the fish catching sector to the national GDP 16 and the agricultural and fisheries GVA 17 (million ) Fisheries GVA (a) Agricultural GVA (b) a/b (%) National GDP (c) a/c (%) Spain , % 1,063, % France , % 2,001, % Italy , % 1,578, % United Kingdom , % 1,746, % Portugal , % 171, % Denmark , % 240, Ireland , % 161, % Netherlands , % 601, % Sweden , % 387, % Germany , % 2,592, Belgium , % 369, Poland , % 369, Lithuania % 30, % Finland , % 189, Latvia % 20, % Malta % 6, % Slovenia % 36, Romania , , Bulgaria , , Total 3, ,364, ,737, % Source: EUROSTAT for Agricultural GVA and national GDP, Member States DCF data submissions for Fisheries GVA (data for 2011) 16 National Gross Domestic Production (GDP) at market price. 17 Gross value added (GVA) of the agricultural industry at producer prices. 68

71 Profitability of the EU Fishing Fleet 4. QUANTIFICATION OF SUBSIDIES AT EU AND NATIONAL LEVEL KEY FINDINGS The amount of direct income subsidies received by the fleet in 2011 was over 98 million (around of the total income generated by the EU fishing fleet) according to MS DCF data submissions. The amount of direct income subsidies and the contribution of direct income subsidies to fleet profitability vary substantially across MS and fleet segments. For several fleets direct income subsidies represent more than 5 of their total operating costs. The level of support planned for the fish catching sector (priority axis 1) was set at 28% of the total EFF budget. At MS level, this value varies according to the priorities of each MS, ranging from 4% in Romania to 82% in Ireland. Contribution of the EFF support to annual income fluctuates highly across MS and varies from of total income (e.g. France) to more than 10 (e.g. Romania). The use of subsidies in fisheries, as well as in many other sectors, is regulated by rules set by the European Union and the World Trade Organization so that subsidies paid by governments to private companies do not contradict the general rules of the common market and distort competition. Subsidies to the European fisheries sector fall under two main categories: the so called "de minimis aid" which does not have any significant impact on competition because of the small amount of money received by each firm and; the "block exemptions" that are considered not to distort competition. The de minimis aid (Commission Regulation (EC) No 1998/2006 of 15 December 2006) is allocated by Member States and from 2007 onwards should not exceed the payment of 30,000 to a single fishing enterprise over a 3 fiscal year period. Block exemptions are defined in accordance with the requirements of the EFF (Council Regulation (EC) No 1198/2006 of 27 July 2006), which will be substituted by the EMFF starting from In addition, European fishers can benefit from tax allowances on fuels as provided by the Directive 2003/96/EC, which are generally not considered as subsidies since they do not consist of direct transfers of money from governments to firms. The following analysis is based on two sets of data: (1) Data on direct income subsidies received by the EU fishing fleet in 2011, as provided by MS during the DCF data submissions and (2) Data on the implementation of the EFF Concerning the first data set, it should be noted that the data submitted on direct income subsidies by Member States under the DCF data call may be questionable in terms of 69

72 Policy Department B: Structural and Cohesion Policies completeness and accuracy. Furthermore, although the term direct income subsidies is defined under the DCF (see footnote 7), this definition is often interpreted differently from country to country. For example, some countries (e.g. Belgium, Germany, Ireland, Poland) consider permanent cessation of fishing activities and investment subsidies for fleet modernisation paid from EFF budget as direct subsidies, while others (e.g. France, Italy, the Netherlands) do not. Fuel tax exemptions are also considered by some countries, e.g. Poland and Finland, but not covered by others 18. Therefore, any comparison across MS should be avoided. In addition, the information available from the two sources of data used in the analysis is not comparable as definitions differ and in some cases overlap. Therefore, the two data sets have been analysed independently. In sum, obtaining a comprehensive and accurate account of the total amount of government financial transfers to the EU fleet was not possible. Hence, the analysis provided in this chapter simply gives an indication of the level of dependency of each Member State fleet, and for several of their fleet segments, on direct income subsidies. A breakdown of the amount of subsidies received by each MS and fishing technology is provided in Table 25. The contribution of direct income subsidies to fleet profitability was analysed using the following indicators: subsidies as a % of total operating costs, subsidies as a % of total income and subsidies as a % of GVA. Additionally, net profit margin with and without direct income subsidies are presented. According to MS DCF data submissions, the amount of direct income subsidies received by the EU fleet in 2011 was over 98 million, which represents about of the total amount of income generated by the EU fishing fleet in 2011 (excluding Cyprus and Greece). The amount of direct income subsidies received in 2011, as well as values for the indicators provided in the table, varied substantially across MS and fleet segments. For example, the ratio subsidies/total operating costs ranges from around zero for Denmark to almost 105 for Poland. The data indicates that some fleets rely heavily on direct income subsidies, with subsidies amounting to more than 5 of their total operating costs. These include the Polish vessels using hooks (HOK), the Polish passive gear (PG) fleet and the Latvian polyvalent passive gear fleet (PGP). In the case of the Polish HOK segment, direct income subsidies more than covered total operating costs (105%) in The Polish demersal trawler/seiner fleet () was also highly dependent on these subsidies, which amounted to 43% of total operating costs. However, it should also be noted that if the major support came from the permanent/temporary cessation, fleets activities were limited and the income and costs below the usual levels. Figure 18 shows the level of dependence of EU MS on direct income subsidies as provided by MS during the 2013 DCF data call. As shown in the figure, the highest values of income subsidies as a percentage of GVA and income were observed for the Polish fleet. These results are driven by numerous fleet adjustment measures, including the scrapping and temporary cessation of fishing activities in Polish Baltic fleet. This MS also has one of the highest supports planned under the EFF for priority 1 axis, as far as the measures for the adaptation of the Community fishing fleet are concerned (see Table 26). Other MS with high support rates in 2009 compared to total income (e.g. Estonia and Latvia), were half that of Poland. 18 For more information on the differences across MS in the types of direct subsidies covered by the DCF see table 2 p14-15 of the PGECON report of 16-19th of April 2013 at Salerno (Italy). 70

73 Profitability of the EU Fishing Fleet Table 25: EU fishing fleet direct income subsidies and its contribution to fleet profitability, 2011 MS Belgium Denmark Finland France Germany Ireland Latvia Fishing Technology Direct Income Subsidies (thousand ) Subsidies/ Total Operating Costs (%) Subsidies/ Total Income (%) Subsidies/ Gross Value Added (abs. Terms -%) Net profit margin (%) Net profit margin with subsidies (%) DRB TBB 2, PGP PG 1, DRB , FPO HOK 1, MGO MGP PGO PGP PMP PS PG TBB DRB FPO PGP , Lithuania Malta HOK MGO Poland Portugal 3, HOK 2, PG 6, , DRB , FPO HOK PGP PS

74 Policy Department B: Structural and Cohesion Policies MS Slovenia Spain United Kingdom Fishing Technology Direct Income Subsidies (thousand ) Subsidies/ Total Operating Costs (%) Subsidies/ Total Income (%) Subsidies/ Gross Value Added (abs. Terms -%) Net profit margin (%) Net profit margin with subsidies (%) PS , HOK 2, MGP PGP PMP 3, PS 6, DRB 1, , FPO 3, HOK PGP PS 5, TBB 3, * Note: This analysis covers only the segments for which information on Income from landings, Crew wage and salaries and Energy costs were provided by MS. For details, refer to the introduction to chapter 2 Source: EU Member States DCF data submissions (data for 2011) Comparison of direct income subsidies with the GVA (Figure 18) shows the rate of support compared to the value added of the sector. This value is dependent on production costs and in some cases countries with low GVA margin had comparatively high support (e.g. Malta and Bulgaria) in 2010, amounting to 15% of GVA. Additionally, the table shows that for several fleet segments, direct income subsidies substantially augment their net profit margins (e.g. Polish and, Portuguese PS and the UK HOK). Additionally, two fleet segment analysed (Belgium DRB and Finnish PG) move from a loss making position to posting a positive profit margin when direct income subsidies are accounted for. Additional to the direct subsidies data provided by MS, EFF implementation results were analysed in terms of comparison between annual programmed and committed funding and average income and GVA per country. The comparative analysis focused on the priority 1 axis as it includes the major fisheries support measures going directly to fisheries enterprises and fishers. This data set also represents the so called block exemptions. 72

75 Poland Latvia Finland United Kingdom Belgium Slovenia Spain Germany Lithuania France Malta Portugal Ireland Denmark Bulgaria Estonia Italy Sweden Poland Bulgaria Estonia Latvia Finland Ireland United Kingdom Slovenia Spain Belgium Italy Malta Sweden France Germany Portugal Lithuania Denmark Profitability of the EU Fishing Fleet Figure 18: 4 35% 3 25% Direct income subsidies as a % of GVA and income, by Member State, Direct income subsidies as % of total income % 1 5% Direct income subsidies as % of GVA Source: EU Member States DCF data submissions (data for 2011) The EFF, under shared management, is the main financial pillar of the CFP with a total budget of million for the period Funding is distributed across 5 priority axes and each MS has the power to define its priorities in terms of support. The five priority axes are: Priority axis 1: Measures for the adaptation of the Community fishing fleet; Priority axis 2: Aquaculture, inland fishing, processing and marketing of fishing and aquaculture products; Priority axis 3: Measures of common interest; Priority axis 4: Sustainable development of fisheries areas; Priority axis 5: Technical assistance The initial distribution of EFF funding defined by MS is presented in Figure 19. As shown in the figure, priorities differ from country to country. The support level to the catching sector for priority 1 axis varies from 4% in Romania to 82% in Ireland. 73

76 Policy Department B: Structural and Cohesion Policies Figure 19: EFF support distribution between priority axes by Member State Source: Interim evaluation of the European Fisheries Fund ( ), final report, February 2011 In Table 26, the average annual EFF support was estimated based on the assumption that support is foreseen over the period , while the average annual commitment was estimated on the assumption that the first EFF payments started in 2008 and the data for committed funding was available only up to the end of 2010, giving 3 years of implementation. The results show that the average EFF support for the priority 1 axis, defined by MS in the Operational Programs, compared with the average annual income from fisheries fluctuates highly and varies from of total income for France, Germany, Netherlands and UK to 177% for Romania and 6 for Poland. In certain cases the average foreseen support is much higher than the value added (see comparison between EFF support and GVA). However, on average the EFF funding amounts to around 3% of income and 5% of GVA produced by the fishing sector. It is also important to note that the data on EFF funding analysed in this section represents only the EU contribution and does not cover the obligatory MS share or private funding. MS national support can vary from 15% to 5, depending on the measure of the priority 1 axis. 74

77 Profitability of the EU Fishing Fleet Table 26: EFF implementation and its contribution to the fishing sector in , million MS EFF programmed for EFF priority axis 1 committed by Average income in Average GVA in Average annual EFF (axis 1) programmed, compared with: Average annual EFF (axis 1) comitted, compared with: Total EEF Priority axis 1 Income GVA Income GVA Belgium % % % 5% 6% 14% Bulgaria % -275% -2% Cyprus % % Denmark % % 3% 3% 5% Estonia % % % 34% 19% 43% Finland % % % 4% 2% France % 1, % 2% 3% Germany % 0.5 6% % Greece % Ireland % % % 5% 4% 9% Italy % , % 4% 2% 3% Latvia % % % 25% 22% 4 Lithuania % % 16% 3% 12% Malta % % 9% 3% 9% Netherlands % % % 2% Poland % % % 6 124% Portugal % % 3% 3% 4% Romania % % % 274% 49% 76% Slovenia % 26% Spain 1, % % 1, % 8% 4% 9% Sweden % % 3% 3% 7% United Kingdom % % TOTAL* 4, , % % 6, , % 5% 3% 6% * Including land locked countries (Austria, Check Republic, Slovakia and Hungary) Source: Interim evaluation of the European Fisheries Fund ( ), final report, February 2011 and EU Member States DCF data submissions 75

78 Policy Department B: Structural and Cohesion Policies 76

79 Profitability of the EU Fishing Fleet 5. CONCLUSIONS A complete analysis on the economic performance of the EU fleet was not feasible due to too many data limitations. Currently the only comprehensive source of economic data on the fishing fleet at the EU level is the data collected under the Data Collection Framework. Annually, a call for economic data on each coastal EU MS fishing fleet is issued by the European Commission. However, due to the non-submission, incomplete and/or erroneous data sets provided by some Member States, a complete picture of the EU fleet is not possible. Nonetheless, a substantial amount of data is available and main economic indicators and trends can be assessed at the EU, Member State and fleet segment levels. The data available suggests that there has been an overall improvement in the economic performance of the EU fleet over the last four years ( ). Overall, 2011 saw a decrease in the total volume of seafood landed by the EU fleet but an increase in the landed value. While total costs incurred by the EU fleet increased in 2011, total income increased more, and consequently the economic performance of the EU fleet showed improvements compared to 2010, with 6% of the income generated retained as net profit. However, the EU fleet is very heterogeneous, operating in diverse fishing regions and fisheries, using a wide variety of fishing techniques to target different species and this trend was not observed across all Member State fleet segments. While the EU fleet as a whole was profitable in 2011, six national fleets (Bulgaria, Finland, Germany, Ireland, Malta and Slovenia) out of the 19 national fleet analysed generated negative profit margins, indicating that these national fleets did not generate enough income to cover their capital costs. In absolute terms, the Spanish fleet generated the highest GVA in 2011 ( 839 million), followed by the French ( 591 million) and Italian fleets ( 583 million). The Italian fleet generated the highest gross profit ( 303 million) followed by the UK fleet ( 202 million) and the French fleet ( 181 million). The UK fleet generated the highest net profit ( 158 million), followed by the French ( 107 million) and Italian fleets ( 80 million). In relative terms, the Portuguese fleet generated the highest level of GVA in relation to income (64%), followed by the Danish (63%), Romanian (6) and Slovenian (59%) fleets. The Danish fleet generated the highest gross profit margin (34%), followed by the Latvian (33%) and Portuguese (29%) fleets. Malta was the only Member State fleet that had a negative gross profit margin, suggesting that the fleet did not generate enough income to cover its operating costs in The Latvian fleet generated a net profit margin of 28%, followed by the Romanian (17%) and the UK (16%) fleets. Four EU fleets generated negative profit margins (Finland, Germany, Ireland and Slovenia), indicating that these national fleets did not generate enough income to cover their capital costs. The data suggests that static (passive) gear segments were generally more profitable than towed (active) gear segments. In 2011 high profit margins (>25%) were obtained mainly in the static gear segments (e.g. the Finnish, Irish and Latvian segments and the Dutch PG segment). However, several mobile fleet segments also obtained high profit margins (e.g. the Slovenian and UK PS and the UK DRB). At the EU level, the PGP and PMP segments (vessels using polyvalent passive gears and vessels using passive and active gears) generated the highest GVA as a proportion of income (63% each) in Among the static gear segments, the most profitable were the DRB (dredges) (6) and PS (purse seiner) fleets (58%). 77

80 Policy Department B: Structural and Cohesion Policies Fleet segments with good profit margins (>1) covered a mix of static and mobile gear segments, including: the Spanish, PGP and PS segments; the Italian and Portuguese HOK segments; Lithuanian ; the Danish, Dutch and UK. In fact, in the Danish fleet, was the only segment to make a profit in For the Maltese fleet, only the PS segment obtained a positive profit margin (14%), otherwise all the other segments, as with all German fleet segments, made losses in The EU fleet is very heterogeneous also in terms of amount of subsidies received, with some fleets (e.g. Polish vessels using hooks and passive gear fleet) relying heavily on direct income subsidies. For several fleet segments, direct income subsidies substantially augment their net profit margins (e.g. Polish and, Portuguese PS and the UK HOK). Additionally, two fleet segment analysed (Belgium DRB and Finnish PG) move from a loss making position to posting a positive profit margin when direct income subsidies are accounted for. 78

81 Profitability of the EU Fishing Fleet REFERENCES Scientific, Technical and Economic Committee for Fisheries (STECF) The 2013 Annual Economic Report on the EU Fishing Fleet (STECF-13-15) (in prep.). Publications Office of the European Union, Luxembourg, (pending publication numbers). Printed in Italy 79

82 Policy Department B: Structural and Cohesion Policies 80

83 Profitability of the EU Fishing Fleet ANNEX From the data submitted by Member States, indicators were calculated in order to assess the economic performance of fleet segments at national and EU level. These indicators and calculation methods are described below: Income (excluding subsidies) (i.e. revenue) = income from landings + other income Income (including subsidies) = landings income + other income (non-fishing income) + subsidies Gross Value Added (GVA) = income operating Costs + labour costs Where Operating Costs = labour costs (crew wages + imputed value of unpaid labour) + energy costs + repair and maintenance costs + other variable costs + fixed costs Gross Profit (GP) = GVA labour costs Net Profit (Economic profit) = GP capital costs Where: Capital Costs = annual depreciation costs + opportunity costs of capital Opportunity cost of capital = Fixed tangible asset value * Real interest Real interest(r) = [(1 + i)/(1 + π)] - 1. i is the nominal interest rate of the Member State in the year concerned and π is the inflation rate of the Member State in the year concerned. Labour productivity = GVA/Full Time Equivalent (FTE) Capital productivity = GVA/tangible asset value (vessel depreciated replacement value) Net Profit with subsidies = income (including subsidies) (operating costs + capital costs) Net Profit margin = Net Profit/ Income (excluding subsidies) Net Profit margin with subsidies = Net profit with subsidies/ Income (including subsidies) Labour productivity = GVA/Full Time Equivalent (FTE) Capital productivity = GVA/Fixed Tangible Asset Value Net profit margin = Net Profit/Total Income 81

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