Ilya Shestakov, Deputy Minister of Agriculture of the Russian Federation and head of the Federal Agency for Fisheries
Eurofish held a meeting with and Ilya Shestakov, Deputy Minister of Agriculture of the Russian Federation and head of the Federal Agency for Fisheries to discuss areas of cooperation both with the administration and the industry. Mr Shestakov also answered several questions about developments and priorities in the Russian fisheries and aquaculture sector and discussed some of the impacts of the sanctions and counter sanctions.
One of the tasks of a new state programme Development of the Fishery Complex for the years 2013-2020 is increasing the level of fish and seafood catches. How can growth in the fishing sector be conditioned? What are the plans to optimize the existing quota distribution mechanism? What are the main elements of this mechanism?
In 2014 and the beginning of 2015 some changes were introduced to the State Programme focusing on developmental support for areas such as resources research, aquaculture, and the development of fisheries infrastructure. The development of commercial fish culture is important as regards import substitution. The programme aims at encouraging private investment in construction of fish farms, fish processing and storage facilities, and fish feed and stock material factories. Sturgeon farming is a national priority and an area of special focus. One of the most important areas is enhancing research in order to increase catches and improve aquaculture.
By 2020 we intend the volume of catches of fish and seafood to grow to 4.46 million tonnes, and aquaculture production to double to 315 thousand tonnes. The volume of fish production will reach 3.97 million tonnes, and average per capita consumption of fish and fish products in Russia will be above 22.7 kilos a year. According to preliminary estimates, in 2014 it was 22.3 kilos.
Amendments to the Fishing Law under preparation now are also expected to increase catches. In 2008, fishing quota shares were distributed based on historical catches for a term of 10 years. We propose to introduce additional requirements for quota holders. The threshold for achieving quotas is planned to be raised from 50% to 70%. Non-compliance with this requirement for two consecutive years will be considered grounds for early termination of contracts. At least 70% of the quota volume will have to be utilised using own or leased fishing vessels. This will help getting rid of ‘quota rentiers’. Besides, starting in 2018 we propose to prohibit fishing on vessels that have not passed customs clearance. However, before it we will complete a tax amnesty programme for such ‘port avoiding’ vessels.
We are planning to introduce legislative measures facilitating the development of coastal infrastructure. The main task is to stimulate those who want to land fish on the Russian shore for processing and trading. With this view we propose to give them priority in getting quotas: those who want to bring the catch to our shore will get a bigger volume.
Imposition of a food embargo may be seen as a turning point for the sector optimisation and new opportunities for Russian companies. What are tendencies in the sector? Has a share of domestic raw materials grown in fish processing? What, in your opinion, is a positive effect of the embargo in the fishery sector?
Yes, the current situation has drawn attention to issues of import substitution and food security. Several administrative measures are being considered aimed at lowering logistics costs when fish products are delivered from fishing grounds to Central Russia; improvement of the quality of domestic production; popularization and increase in demand for domestic fish products; development of trading infrastructure; and promotion of commercial fish culture.
Russian companies annually harvest 4.2-4.3 million tonnes of fishing resources. Generally, without considering the assortment, it is enough to provide the population. Now with a decrease in imports a process began of refocusing domestic products to the home market. As of year-end 2014, the volume of Russian fish exports decreased by 9.5% compared to 2013 and equalled 1.7 million tonnes. Imports lowered by 12.8% to 885 thousand tonnes. Consequently the share of domestic fish products on the internal market increased to 79.4%. In 2013 the indicator was 78.2%. Speaking of this year’s trends, for the first three months the volume of fish exports decreased by 10.7%, and the catch volume by Russian fishermen grew by 3.3%.
As for raw material supply to fish processing factories, it was a difficult period when some processors had to quickly look for new procurement sources. The process began at the end of last summer and the share of domestic fish in supplies started growing. Countrywide the volume of fish production grew by almost 14% in January-February.
The logistic chain to deliver Far Eastern catches to the west of the country is the longest internal supply chain in the world as it corresponds to the size of Russia. Over recent years attempts have been made to optimize the infrastructure, to improve fish delivery conditions, etc. Which measures, in your opinion, have been most effective and what are the changes in the infrastructure and logistics of the fishery complex? Is it currently possible to create a single transportation chain from the Far East to the central regions of the country?
The first Fish Week festival that took place in Moscow in April 2015 showed that the problem to deliver Far Eastern fish to Central Russia can be solved – if only there were a demand. Before it fishermen would not even consider Western Russia as a sales market, they doubted that fish could be consumed here in volumes that would make transportation cost-efficient. Besides, they could not make their way to retail outlets that got used to working with suppliers of imported products. The festival demonstrated a different reality – the demand for Russian fish exceeded all possible expectations, retailers and restaurateurs started negotiating direct contracts with fishery companies. It certainly gives ground for optimism and motivates to move further on.
Today we are working in several directions. One of them is levelling railroad tariffs on fish transportation in reefers and general-purpose containers. The quality of fish is best preserved when the fish is transported in reefers. Lowering the tariff to the level of general-purpose containers might raise the competitiveness of the product and ensure high quality at a fair price.
Fish transportation from the Far East to Central Russia along the Northern Sea Route could be an alternative to railroad deliveries. The route could significantly reduce time and cost expenditures. As part of the development of the Arctic Regions it is planned to build new icebreakers, then the cost of ice-channelling must decrease. At the same time, it is important to organize interaction within the Arctic Regions along the route so that we could provide loading on the way back. The project realization will depend on the regions of the RF in this area. Now it is often more profitable for fish suppliers to bring their load sailing round Asia and Africa.
Besides, to make the fish logistics more economically viable it is necessary to develop infrastructural centres for product transshipment and storage, both in the Far East and in Central Russia where we need large hubs. A project design of a distribution centre like this is being prepared now in Vladimir Oblast. We have also chosen six sites for infrastructural centres on the basis of existing sea fish ports.
Traditionally the aquaculture sector in Russia has had a huge potential in terms of fish culture volumes. As you have mentioned, it is planned to increase the volume of fish culture to minimum 315 thousand tonnes by 2020. What, in your opinion, are the mechanisms to reach the planned figure? Which measures will be taken to consolidate the players in the sector (administration, production companies, research, etc.) in order to raise the performance?
It is true that a great variety of water reservoirs and a favourable environmental situation provide a good opportunity to culture various fishes and seafood. However, commercial aquaculture has been neglected for quite a period of time and now it only starts developing. The share of commercial aquaculture is about 3.5% in total catches. Now we have a classifier for fish culture and a form to collect statistical data on aquaculture throughout Russia. Meaning that when making economic evaluation we will be able to use comprehensive statistical data.
As I have already mentioned, a new separate sub-programme Development of Sturgeon Farming is aimed at increasing volumes of artificial reproduction and commercial aquaculture as well as tightening of control over illegal transactions with sturgeon products. Compared to last year, financing of aquaculture grew by 35%. We have developed a mechanism of subsidizing investment projects in the sphere of aquaculture to the tune of RUB400m in 2015 and 600m in 2016. We are also planning to upgrade processing and storage methods, and to develop pilot farms of a new generation. We intend to establish the lead aquaculture research centre on the premises of one of our research institutes. In universities and colleges within our jurisdiction we are developing special educational programmes on aquaculture. Besides, participants of workshops on aquaculture that we have held suggested establishing a field-specific association. We fully support the proposal and will discuss organizational policies at a special meeting in the near future.
Historically the Russian fishery sector has demonstrated a high level of research and development. What are the trends in the sphere of international relations? Which, in your opinion, are the most important directions of international cooperation including an exchange of best practices that might be of greatest use to the Russian fishery complex?
Currently Russia has fishing agreements with 52 countries and is a member of 16 principal regional and global organizations relating to fishery. An important trend in international relations is securing sustainable use of commercial fish and seafood resources. It is for this reason that bilateral and regional agreements are concluded. And they are working quite successfully now.
We pay great attention to the control over illegal, unregulated and unreported fishing. Poaching is a threat to international fishing sustainability, consequently the joint international effort to eradicate it is of the most immediate interest. Russia extensively participates in bilateral agreements against IUU fishing and regional forums like APEC to stem and in the long run fully eradicate all kinds of poaching. For example, the agency has completed bilateral agreements to fight against IUU fishing with some countries of the Asia-Pacific Region like the Republic of Korea, Japan, the DPRK, and China. Memoranda have been signed with Canada and Cambodia.
And certainly aquaculture is another major field of cooperation. Last year we held several conferences devoted to aquaculture, we invited our foreign colleagues and discussed many issues. We can see a keen interest in aquaculture proved by information from different regions about ongoing or planned investment projects. And we are ready to further develop international relations in the sphere of aquaculture.
What are your plans for popularising fish products on the domestic and international markets and at forming a positive image of the fishery sector? What new tools may be timely to raise the effectiveness of campaigns? Are you planning to revive specialized fish and seafood exhibitions (like former Interfish)?
As for measures to form a positive image of both the sector and the products, first of all it is participation of the agency and fishery companies in international exhibitions. Russian business also takes part in international certification programmes.
Speaking of product popularisation on the domestic market, this year we started a programme to promote Russian fish. The agency initiated the development of a national Russian Fish brand. For various reasons domestic fish – a wholesome and high quality product – had not been promoted properly. The Russian Fish is not a commercial brand and will not influence the production cost. We expect that focusing consumer preference towards domestic fish will make distributors and restaurateurs work more eagerly with Russian fishermen and will encourage the supply on the home market and fish consumption.