The millions invested in fish production have not put local fish on the table

Toomas Mattson | 5/25/2016 | 11:00 AM

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  • Millions have been spent to boost aquaculture, but the result is poor. Half of the money or ca 8 million euros remained unused as aquaculture support, and many projects were discontinued as the producers did not have money for self-financing.
  • There is ca 4,300 tons of fish production capacity in Estonia, but actual production is only 800-900 tons. Production in the new fish farms has not increased, because the loss of fish is high.
  • The companies that received support do not cope any better economically than those who received no support. The feasibility or substantive quality of the projects was not an advantage when the projects to be supported were assessed. The goal of the Ministry of Rural Affairs was to achieve production capacities. However, the success of aquaculture is demonstrated by the existence of actual fish on the dinner table, but there is hardly any local fish there.

TALLINN, 25 May 2016 – The National Audit Office is of the opinion that the support granted during the 2007-2013 financial period of the European Fisheries Fund has not helped increase aquacultural production in Estonia, i.e. growing more fish and crayfish in artificial conditions, to any significant extent. Irrespective of the increase in production capacity, the quantity of aquacultural production is poor and local fish does not reach consumers.

The Ministry of Rural Affairs supported the development of aquaculture via the European Fisheries Fund, helping companies establish modern production buildings and implement new technologies. However, fish farming has not managed to keep up with the demand or existing production capacities. The estimated volume of the Estonian internal aquacultural product market is 4,000 to 4,500 tons per year and the goal to increase production capacity, which would allow to farm considerably more fish, has been achieved (the total capacity of Estonia in 2015 was approximately 4,300 tons). But local production has only increased by 400 tons in 10 years (2004-2015) and remained around 800-900 tons. This is why Estonians still mainly eat fish imported from Nordic countries.

The National Audit Office found that the main reason of production volumes being so much smaller than production capacities is that new farms are not working to full capacity and the loss of fish in the farms is big. Although the fish farmer is responsible for the health of the fish, the Ministry of Rural Affairs has not contributed enough to the development of veterinary and consultation services in a situation where the relevant service is practically non-existent in Estonia.

The support paid by the European Fisheries Fund has motivated some companies to develop aquaculture projects even if they have lacked the ability to finance the project and the necessary experience. Half of the aquaculture investment support budget (ca 8 million euros from 2007-2013) remained unused due to the discontinuation of projects and the main reason of this was the lack of self-financing. Entrepreneurs themselves also name their limited experience in the implementation of new technologies and mistakes in design and construction as the reasons of the backlashes. The state’s role is to select the most successful projects by assessing the support. The National Audit Office found that the feasibility or substantive quality of the projects was not an advantage when the projects to be supported were assessed, because the assessment criteria given in the regulation of the measure were not related to assessing the potential success of the projects.

The analysis carried out by the National Audit Office indicated that the support has not yet had an impact on the economic success of aquacultural companies. When the companies that received support are compared to those that did not apply for it, no statistically significant impact was found in the case of any of the analysed economic indicators. Limited product development and the lack of cooperation that would help enter local and foreign markets has also prevented the companies from coping better.

The National Audit Office emphasises that in addition to the economic environment, the natural environment also restricts the development of fish farming significantly, which is why it is necessary to use production methods and technologies that allow to reduce the environmental burden of the farms as much as possible. This has also been considered in the allocation of support. However, the present system of environmental charges cannot be applied to fish farms that well and it does not motivate them to reduce the burden on the environment.

The existence of production capacities has created preconditions for increasing aquacultural production, but in order to benefit from the investments that were made and ensure that all aquaculture is competitive and sustainable, the National Audit Office advises the state, especially the Ministry of Rural Affairs, to give attention to the following aspects: what is money given to and on which conditions; how to help develop export and encourage the establishment of cooperative societies to make valuing and marketing the products; to specify how they want to develop new directions of aquaculture (e.g. organic and marine aquaculture), and to set suitable impact indicators for measuring efficiency.

Background
The National Audit Office audited whether the aquaculture support of the European Fisheries Fund from 2007-2013 has helped increase the volume of aquacultural production without damaging the environment.

The audit focused mainly on the 2007-2013 period of the European Fisheries Fund. During this period, 44 companies applied for aquaculture investment support for 64 projects. Two-thirds of these projects were implemented and the support paid out for them totalled 8.4 million euros. The Estonian Rural Development Foundation also granted loans guaranteed by the state for these projects, which amounted to 5 million euros.

There are 50 large aquacultural companies in Estonia that grow fish and/or crayfish. They mainly grow rainbow trout (70% of total sales of fish) and in smaller quantities also carp, eel, whitefish, Siberian sturgeon and Russian sturgeon; and small amounts of crayfish.

 

Toomas Mattson
Communication Manager
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toomas.mattson@riigikontroll.ee
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  • Posted: 5/25/2016 11:00 AM
  • Last Update: 5/31/2016 4:14 PM
  • Last Review: 5/31/2016 4:14 PM

Albino trouts in kennel. Mostly large rainbow trout is being farmed in Estonia (70% of the total sales of fish production)

Meelis Meilbaum / Virumaa Teataja / Scanpix Baltics

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