Miljø- og Fødevareudvalget 2019-20
MOF Alm.del Bilag 20
Offentligt
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Financial consequences for Danish
fishermen following reductions in the
Baltic Sea cod and herring quotas
Jesper Levring Andersen
Peder Andersen
2019 / 17
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IFRO Commissioned Work 2019/17
(IFRO Udredning 2019/17)
Financial consequences for Danish fishermen following reductions in the Baltic Sea cod and herring quotas
Authors: Jesper Levring Andersen, Peder Andersen
Internal scientific quality control: Ayoe Hoff has commented on the manuscript. The responsibility of the
published content, however, lies entirely with the authors.
This work is commissioned by the Danish Ministry of Environment and Food under a common agreement
between the ministry and IFRO.
Note: This version is not an officially issued report and it is not proof-read. Therefore, it should not be cited.
Find the full series IFRO Commissioned Work (mostly in Danish: IFRO Udredning) here:
http://ifro.ku.dk/publikationer/ifro_serier/udredninger/
Department of Food and Resource Economics
University of Copenhagen
Rolighedsvej 25
DK-1958 Frederiksberg
www.ifro.ku.dk/english/
 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
Contents
Introduction ....................................................................................................................................................... 3
1.
2.
2.1
3.
4.
Description of the Danish fishery for cod and herring in Baltic Sea .......................................................... 4
Financial consequences for the fishermen .............................................................................................. 11
Consequences of other cod quota levels in subdivision 25-32 ........................................................... 16
Consequences for the onshore services and processing industry .......................................................... 19
Possibilities for adapting the fishery ....................................................................................................... 20
Conclusion ....................................................................................................................................................... 21
Annex 1 Map of the Baltic Sea with subdivisions ............................................................................................ 23
Annex 2 Danish quota exchanges .................................................................................................................... 24
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Introduction
The end of August 2019
1
, the European Commission put forward a proposal for the fishing
opportunities in 2020 of cod (Gadus
morhua)
in subdivisions 22–24 (western Baltic Sea), cod in
subdivisions 25-32 (eastern Baltic Sea) and herring (Clupea
harengus)
in subdivisions 22-24 (western
Baltic Sea). See Annex 1 for the location of subdivisions.
For cod in subdivisions 22-24, the proposal sets the Total Allowable Catches (TAC) to 3,065 tonnes,
which will result in a Danish cod quota of 1,337 tonnes in 2020. Furthermore, the proposal forbids
catches of cod in subdivision 24, thus implying that the quota can only be caught in subdivision 22
or subdivision 23. For cod in subdivisions 25-32, a TAC
of zero (‘no TAC’)
is proposed in 2020, thus
resulting in a zero Danish cod quota. Finally, the TAC for herring in subdivisions 22-24 is proposed
set to 2,651 tonnes, resulting in a Danish quota of 372 tonnes in 2020.
The development in the three quotas allocated to Denmark can be seen in Table 1. For the years 2016-
2019, the quotas includes any quota exchanges undertaken during the respective years, see Annex 2
for the quota exchanges undertaken during each year.
Table 1 Danish quotas including quota exchanges 2016-2020 (1,000 tonnes)
Quota species Subdivisions
2016
Cod
22-24
6,751
25-32
9,940
Herring
22-24
6,227
Source: The Danish Fisheries Agency.
Note: * Proposed Danish quotas for 2020.
2017
3,211
8,081
7,041
2018
2,592
7,348
4,550
2019
4,474
5,565
1,819
2020*
1,337
0
372
Based on the proposed TACs, the Danish Ministry of Environment and Food has requested an
analysis of the financial consequences for Danish fishermen of these proposed quotas for 2020, the
possibilities for the fishermen to adapt their fishery to this situation, the possible implications for the
onshore services and processing industry and the impact on the employment in the fishing sector.
The Department of Food and Resource Economics, University of Copenhagen has addressed these
questions through the research-based consultancy contract that the Department has with the Ministry
of Environment and Food.
The requested analysis will be undertaken in this note using the same data sources and approach as
used in Andersen, Frost and Andersen (2016)
2
.
1
European Commission (COM_2019_380_1), Proposal for a Council Regulation fixing for 2020 the fishing
opportunities for certain fish stocks and groups of fish stocks applicable in the Baltic Sea and amending Regulation
(EU) 2019/124, as regards certain fishing opportunities in other waters.
2
Andersen, J. L., Frost, H. S., & Andersen, P., (2016). Financial consequences for Danish fishermen following a
reduction in the cod quota for the western Baltic Sea, 15 p., (IFRO Commissioned Work; No. 2016/16).
3
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1. Description of the Danish fishery for cod and herring in Baltic Sea
Based on data from the Danish Fisheries Agency, the Danish fishery for cod and herring in the Baltic
Sea is described below based on the latest available year, 2018.
By the end of 2018, the Danish fishing fleet consisted of 2,157 vessels. Overall, 322 vessels registered
in the fleet register by the end of 2018 landed cod and/or herring caught in either subdivisions 22-24
and/or subdivisions 25-32. Of these 322 vessels, 32 vessels landed herring caught in subdivisions 22-
24, 298 vessels landed cod caught in subdivisions 22-24, while 43 vessels landed cod caught in
subdivisions 25-32.
The distribution of the 322 vessels on length, gear and commercial groups is shown in Table 2. There
were 124 commercial vessels having a total yearly landings value above 270,000 DKK (36,000 €)
from their entire fishery, while the remaining 198 vessels were less active-commercial having a
landings value below 270,000 DKK, but above 0. These less active-commercial fishermen are
primarily part time fishermen, who have registered landing values so low that they most likely also
have another income in order to sustain a reasonable living standard.
Table 2 Number of vessels landing cod and/or herring from the Baltic Sea, 2018
Commercial vessels**
Total
32
144
6
59
24
57
6
6
68
198
266
12-15m
7
7
10
10
17
17
15-18m
7
7
22
22
29
29
18-40m
10
10
10
10
Total
124
198
322
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
Note: * For discretionary reasons, all fleets with less than 5 vessels have been included in other fleet with
the most similar characteristics. The following changes have been made for the commercial vessels: 1)
Gillnet/hook and seine 12-15m has been included in seine/gillnet/trawl 12-15m, 2) Gillnet/hook 11-18m
has been included in seine/gillnet/trawl 15-18m, 3) seine and trawl 18-24m and trawl 24-40m have been
included in trawl 18-40m, and 4) mussel fishery has been included in seine/gillnet/trawl less than 12m. For
the less-active commercial vessels, trawl less than 12m, seine/gillnet/trawl, seine and trawl 12-15m have all
been included in seine/gillnet/trawl less than 12m.
Note: ** A commercial vessel has an yearly landings value above 270,000 DKK, while a less active-
commercial vessel has an yearly landings value below 270,000 DKK.
Length
<12m
Primary gear*
Gillnet/hook
Dory/trap
Seine/gillnet/trawl
Trawl
Total
Seine/gillnet/trawl
Trawl
Total
Seine/gillnet/trawl
Trawl
Total
Trawl
Total
Less active-commercial
vessels
112
53
33
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How the economic dependency on the fishery in the Baltic Sea was in 2018 for the 322 vessels
registered in the fleet register by the end of 2018 is shown in Table 3. The table shows the overall
dependency of fishing in the Baltic Sea, and not only the dependency on cod and herring. The reason
is that the fishery, especially for cod, can give rise to bycatches of a range of other species, thus a
reduction in these quotas can imply a reduction in the landings of these other species as well. Herring
is caught in directly targeted fisheries.
Out of the 322 vessels, 253 vessels had a 90-100% economic dependency (measured by landings
value) on fishery in the Baltic Sea. For the commercial vessels, 65 of these had a dependency between
90-100%, thus comprising approximately 50% of the 124 commercial vessels active in the Baltic Sea.
The remaining commercial vessels had a lower dependency, and 32 had a dependency below 30%.
For the less active-commercial vessels, 188 vessels out of 198 vessels had a dependency above 90%.
Table 3 Vessel economic dependency on fishery in the Baltic Sea, 2018
Commercial vessel
Less active -
commercial vessels
<12m
Total
188
188
2
2
Total
253
4
2
6
7
7
10
11
6
16
322
Interval
<12m
12-15m
15-18m
18-40m
Total
90-100%
52
10
3
65
80-89%
1
1
2
70-79%
2
2
60-69%
4
1
5
1
1
50-59%
1
4
5
2
2
40-49%
2
1
2
1
6
1
1
30-39%
3
4
7
3
3
20-29%
3
1
6
1
11
10-19%
2
1
3
6
0-9%
1
3
3
8
15
1
1
Total
68
17
29
10
124
198
198
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
Note: See note to Table 2 regarding adjustments for discretionary reasons.
Table 4 and Table 5 show the total landings weight and value of cod in the Baltic Sea divided between
subdivisions 22-23, 24 and 25-32. In total, 5,193 tonnes of Baltic Sea cod was landed in 2018 at a
value of 55.3 million DKK. It is the commercial vessels, which lands the majority of the cod caught.
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Table 4 Total landings weight of cod in the Baltic Sea per fleet (tonnes)
Less active-commercial
Total cod
Sub 22-
Sub 25- Sub 22-
Sub 25- Baltic Sea
Length Primary gear
23
Sub 24
32
23
Sub 24
32
<12m
Gillnet/hook
522
102
4
118
70
35
850
Dory/trap
16
13
35
4
1
68
Seine/gillnet/trawl
175
51
325
33
29
13
626
Trawl
89
47
76
213
12-15m
Seine/gillnet/trawl
74
1
75
Trawl
26
175
150
351
15-18m
Seine/gillnet/trawl
123
222
600
944
Trawl
188
404
946
1,538
18-40m
Trawl
21
76
431
527
Total
1,233
1,090
2,532
186
103
49
5,193
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
Note: See note to Table 2 regarding adjustments for discretionary reasons.
Commercial
Table 5 Total landings value of cod in the Baltic Sea per fleet (1,000 DKK)
Less active-commercial
Total cod
Sub 22-
Sub 25- Sub 22-
Sub 25- Baltic Sea
Length Primary gear
23
Sub 24
32
23
Sub 24
32
<12m
Gillnet/hook
8,897
1,007
35
1,853
730
312
12,833
Dory/trap
205
100
480
33
4
821
Seine/gillnet/trawl
2,544
432
2,279
480
329
92
6,156
Trawl
1,339
362
597
2,297
12-15m
Seine/gillnet/trawl
1,239
13
1,252
Trawl
366
1,522
1,105
2,993
15-18m
Seine/gillnet/trawl
2,573
2,531
5,087
10,191
Trawl
3,009
3,654
7,662
14,326
18-40m
Trawl
338
886
3,249
4,474
Total
20,509 10,506 20,015
2,813
1,091
409
55,343
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
Note: See note to Table 1 regarding adjustments for discretionary reasons.
Commercial
The landings of herring in the western Baltic Sea comprised in total 4,095 tonnes in 2018, giving a
landings value of 12.4 million DKK, cf. Table 6 and 7.
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Table 6 Total landings weight of herring in the western Baltic Sea per fleet (tonnes)
Less active-commercial
Total herring
Length Primary gear
Sub 22-23
Sub 24
Baltic Sea
<12m
Gillnet/hook
2
72
Dory/trap
3
0
17
Seine/gillnet/trawl
1
10
11
12-15m
Trawl
4
4
15-18m
Trawl
65
2,901
2,966
18-40m
Trawl
1,026
1,026
Total
143
3,937
5
10
4,095
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
Note: See note to Table 2 regarding adjustments for discretionary reasons.
Commercial
Sub 22-23
Sub 24
70
8
6
Table 7 Total landings value of herring in the western Baltic Sea per fleet
(1,000 DKK)
Less active-commercial
Total herring
Length Primary gear
Sub 22-23
Sub 24
Baltic Sea
<12m
Gillnet/hook
6
272
Dory/trap
13
0
53
Seine/gillnet/trawl
4
27
31
12-15m
Trawl
14
14
10
15-18m
Trawl
192
8,726
8,918
18-40m
Trawl
3,100
3,100
Total
482
11,856
23
27
12,388
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
Note: See note to Table 2 regarding adjustments for discretionary reasons.
Commercial
Sub 22-23
Sub 24
266
23
16
The distribution of the landings value by fleet in the western and eastern Baltic Sea is shown in Table
8 and Table 9. The dependencies vary a lot. While cod is observed to be of high importance for many
fleets, only two fleets (trawlers 15-18m and 18-24m) obtain a high landings value from herring.
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Table 8 Distribution of landings value on species in the western Baltic Sea, 2018
Other
round
fish
Flatfish
Her-
ring
Primary gear
Cod
Gillnet/hook
42%
0%
46%
1%
0%
11%
Dory/trap
8%
0%
25%
1%
0%
65%
Seine/gillnet/trawl
25%
0%
73%
0%
1%
1%
Trawl
65%
1%
33%
0%
0%
1%
12-15m
Seine/gillnet/trawl
25%
0%
71%
0%
0%
3%
Trawl
26%
0%
62%
0%
12%
0%
15-18m
Seine/gillnet/trawl
62%
0%
37%
0%
0%
0%
Trawl
24%
0%
30%
32%
13%
0%
18-40m
Trawl
25%
1%
10%
64%
0%
0%
<12m
Gillnet/hook
37%
0%
43%
0%
0%
20%
Dory/trap
14%
0%
20%
0%
0%
66%
Seine/gillnet/trawl
37%
0%
55%
1%
2%
5%
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
Note: See note to Table 2 regarding adjustments for discretionary reasons.
Length
<12m
Total landings
Reduc-
value
tion
Other
species species
(1,000 DKK)
23,686
3,691
11,895
2,616
4,916
7,336
8,199
27,538
4,849
7,031
3,667
2,199
Table 9 Distribution of landings value on species in the eastern Baltic Sea, 2018
Other
round
fish
Flatfish
Her-
ring
Less
active-
comme
rcial
Commercial
Primary gear
Cod
Gillnet/hook
4%
0%
0%
0%
0%
96%
Seine/gillnet/trawl
89%
0%
8%
0%
0%
3%
Trawl
89%
0%
10%
0%
0%
0%
12-15m
Trawl
91%
0%
9%
0%
0%
0%
15-18m
Seine/gillnet/trawl
93%
0%
3%
0%
4%
0%
Trawl
66%
0%
12%
4%
18%
0%
18-40m
Trawl
72%
0%
28%
0%
0%
0%
<12m
Gillnet/hook
38%
0%
34%
0%
0%
28%
Dory/trap
100%
0%
0%
0%
0%
0%
Seine/gillnet/trawl
84%
0%
16%
0%
0%
0%
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
Note: See note to Table 2 regarding adjustments for discretionary reasons.
Length
<12m
Total landings
Reduc-
value
tion
Other
species species
(1,000 DKK)
922
2,568
670
1,213
5,482
11,634
4,536
829
4
110
The geographical location of the vessels landing cod and/or herring from the Baltic Sea is shown in
Table 9, where the vessels are registered according to the regulatory district they belong to. Most of
the vessels are as expected located around the Baltic Sea or close to, i.e. Roskilde (primary harbours
Gilleleje
,
Næstved, Nykøbing Falster, København, and Korsør), Fredericia (primary harbours
Svendborg, Odense and Sønderborg) and Bornholm. In these municipalities, the fishing activities
Less
active-
comme
rcial
Commercial
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contribution to a varying degree to the local economy through the use of the local harbours and their
facilities. The importance increases with increasing distance to larger cities.
Table 10 Distribution of vessels between districts, 2018
Commercial vessels
12-15m
15-18m
7
5
3
1
1
Less active-
commercial
<12m
93
69
31
1
1
3
Total
140
109
56
6
6
3
2
322
District
<12m
18-40m
Roskilde
29
9
2
Fredericia
26
8
1
Bornholm
9
10
3
Esbjerg
3
1
Nykøbing Mors
4
Randers
Frederikshavn
1
1
Total
68
17
29
10
198
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
Note: See note to Table 2 regarding adjustments for discretionary reasons.
A more detailed description of where the cod and herring are landed, is presented in Table 11, where
the distribution of the cod and herring landings value from subdivisions 22-24 divided on
municipalities is shown, while Table 12 shows the landing distribution for cod in subdivisions 25-32.
Only the 10 municipalities with the highest landings value from cod and herring in subdivisions 22-
24 and 25-32 respectively, are included in the tables, which for cod in subdivisions 22-24 covers 81%
of the total landings value of cod in this subdivision, while the percentage for herring in subdivisions
22-24 is 100% and for cod in subdivisions 25-32 likewise is 100%. By comparing the landings value
of cod and herring from subdivisions 22-24 and 25-32 to the total landings value in the respective
municipalities, an impression of the dependency originating directly for these fisheries is obtained.
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Table 11 Distribution of cod and herring landings value by municipality in
subdivisions 22-24 for the municipalities with highest value of landings of cod and
herring, 2018
Landings of cod from subdivisions 22-24
Landings of herring from subdivisions 22-24
Value
Municipality
Value
Municipality
Municipality
(1,000 DKK) dependency (%)
Municipality
(1,000 DKK) dependency (%)
Langeland
6,097
31
Vordingborg
5,459
40
Lolland
4,440
42
Stevns
3,332
45
Bornholm
3,698
17
Gribskov
3,279
5
Vordingborg
2,968
22
Fredensborg
259
10
Poland*
2,952
17
Slagelse
23
0
Ærø
2,359
38
Middelfart
11
3
Gribskov
1,936
3
Aabenraa
7
1
Dragør
1,807
79
Faxe
7
2
Rudersdal
1,305
45
Fredericia
4
1
Kerteminde
994
15
Bornholm
3
0
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
Note: Poland is included to show that landings here are also important.
Table 12 Distribution of cod landings by municipality in subdivisions 25-32, 2018
Landings of cod from subdivisions 25-32
Municipality
Value (1,000 DKK)
Municipality dependency (%)
Poland
12,726
74
Bornholm
7,698
35
Stevns
0
0
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
Note: Poland is included to show that landings here are also important.
However, as mentioned previously especially the cod fishery can give rise to bycatches of various
other species. It is therefore also relevant to describe the municipality dependency on landings from
the Baltic Sea.
Table 13 therefore shows how much the vessels potentially affected by cod and herring quota
reductions in subdivisions 22-23 and 25-32 land to each municipality and compares this to the total
landings value in each municipality. Dependency levels are generally high, except for one
municipality Gribskov with the primary harbour Gilleleje. The relatively low dependency of 10%
may be surprising, and will therefore be explained further. In 2018, approximately 55 million DKK
of the landings value in Gribskov were from fishing in Kattegat (primarily Norway lobster 41 million
DKK and plaice/sole 6 million DKK), the remaining 6 million DKK were from fishing in the western
Baltic Sea (primarily herring 3 million DKK and cod 2 million DKK).
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Table 13 Municipality dependency for the ten municipalities with highest landings
from vessels affected by quota reductions, 2018
Total Danish landings value all
Total landings value from the
Municipality
fishing areas to municipality
Baltic Sea
dependency
Municipality
(1,000 DKK)
(1,000 DKK)
(%)
Bornholm
22,018
21,966
100
Langeland
19,446
19,359
100
Vordingborg
13,511
13,511
100
Lolland
10,683
10,637
100
Stevns
7,358
7,312
99
Gribskov
61,617
6,421
10
Ærø
6,225
6,225
100
Kerteminde
6,751
5,211
77
Slagelse
4,649
4,625
99
Sønderborg
5,282
3,877
73
Source: The Danish Fisheries Agency Vessel Register and Sales Notes Register 9
th
August 2019.
It is not possible from the available data to analyse the importance of these landings for specific
processing firms. For some of these firms, even small changes in landings might have significant
economic implications,
if the firm’s economy is fragile.
2. Financial consequences for the fishermen
Assessing the financial consequences for the fishermen following the reductions in the cod and
herring quotas in the Baltic Sea will be done as a static-comparative analysis. The approach is that
the calculations answer the question, what could have happened in 2018, if the cod quota in
subdivisions 22-23 had been 1,337 tonnes, no targeted fishing allowed for cod in subdivision 24, a
zero cod quota in subdivisions 25-32 and a herring quota in subdivisions 22-24 of 372 tonnes. The
analysis will thus not consider long term effects on the profitability of the vessels/fleets following
any changes in fish stocks and fleet capacity.
The calculations are based on data from the Vessels Register and Sales Notes Register hosted by the
Danish Fisheries Agency and the Cost and Earnings Database hosted by Statistics Denmark. From
these registers, landings data from 2018 and estimated cost data for 2018 are derived.
The financial consequences will be addressed with two scenarios indicating the expected minimum
and maximum effects on the profitability of the vessels. In some situations, it might be possible for
the fishermen to change their behaviour, including fishing pattern, thus reducing some of the negative
effects. It is possible that some types of changed behaviour potentially can result in reduced fishing
options for other fishermen, who are not fishing in the Baltic Sea. However, because the majority of
the Danish fishing quotas are managed with individual transferable rights, this potential is considered
limited, see also Section 4.
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In the minimum repercussion scenario, it is assumed that the reduced cod and herring quota in
subdivisions 22-24 and the zero cod quota in subdivisions 25-32 will only result in reduced or no
landings of cod and herring respectively, and not any reductions in the potential bycatch species.
Furthermore, it is assumed that cod cannot be fished in subdivision 24. However, it is assumed that
the cod and herring quotas are utilised 100% in 2018. For cod in subdivisions 22-24, the observed
quota utilisation was 100% in 2018, for herring it was 90%, cf. Table 14. For cod in subdivisions 25-
32 quota utilization was 35%, but given that the quota is set to zero, the assumption about 100% quota
utilisation does not have an effect on the landings.
In this minimum repercussion scenario, it is assumed that catches of cod can be avoided, which will
require a change in fishing patterns. There are some differences in fishing seasons for the various
species, with the season for cod peaking in winter and spring. However, even outside the cod season
by-catches of cod cannot be completely avoided. It is therefore assumed that part of the cod quota is
reserved for by-catches in other fisheries and seasons.
Table 14 Development in quota utilisation
Quota species Subdivisions
2016
2017
2018
Cod
22-24
81.2%
85.7%
100.9%
25-32
67.8%
73.0%
35.1%
Herring
22-24
92.4%
83.1%
73.6%
Source: The Danish Fisheries Agency.
Note: * by the 6
th
September 2019, ** assumed quota utilisation.
2019*
65.7%
18.5%
76.2%
2020**
100%
100%
100%
In the maximum repercussions scenario, it is assumed that not only the landings of cod are reduced,
but also the landings of other consumption species are reduced as well and proportional to the reduced
activity in the main fishery, except species caught with no or little expected bycatch of cod, i.e.
herring, sprat, sand eel, salmon and eel. Thus, the applied reduction of bycatch species is calculated
as the proportion between the estimated cod landings following from the proposed quotas in 2020,
and the landings value of cod in 2018.
Comparing to the baseline, i.e. the registered landings value in 2018, Table 15 shows the expected
level of landings value in the minimum and maximum repercussions scenario. In the baseline, a total
landings value of 286 million DKK was observed for the included vessels in 2018, reducing to 241
million DKK with only reduced quotas, and to 228 million DKK with reduction of other relevant
species also.
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 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
2086807_0014.png
Table 15 Total landings value (1,000 DKK)
Lower landings of the
Baseline
Only lower landings of
reduced quotas and
Length
Primary gear
2018
reduced quotas
other species
25,943
24,148
23,141
<12m
Gillnet/hook
3,691
3,543
2,991
Dory/trap
19,915
17,058
16,013
Seine/gillnet/trawl
6,456
5,420
5,080
Trawl
56,005
50,170
47,224
Total
8,363
8,279
7,962
12-15m
Seine/gillnet/trawl
17,023
14,362
12,536
Trawl
25,386
22,641
20,498
Total
21,740
13,974
13,076
15-18m
Seine/gillnet/trawl
98,583
78,985
74,238
Trawl
120,323
92,960
87,314
Total
69,379
62,406
60,933
18-40m
Trawl
69,379
62,406
60,933
Total
271,092
228,176
215,969
Total
8,445
7,291
6,173
<12m
Gillnet/hook
3,730
3,653
3,556
Dory/trap
2,577
2,100
1,906
Seine/gillnet/trawl
14,752
13,044
11,636
Total
14,752
13,044
11,636
Total
285,844
241,220
227,604
Total
Source: Own calculations based on data from the Danish Fisheries Agency Vessel Register and Sales Notes
Register 9
th
August 2019.
In order to calculate the financial repercussions for the vessels involved, this can only be done for the
commercial vessels for which Statistics Denmark collects account statistics for. The financial effect
for the less-active commercial vessels could in principle also be calculated, but due to their low
activity such calculations will have to be based on strong assumptions about their cost structure.
Therefore the financial analysis is limited to cover only the commercial vessels.
Description of the financial repercussions at the vessel level will be based on three indicators in form
of 1) landings value, 2) gross profit: earnings defined as landings value minus operating costs, and
thus portrays the surplus available for payment of crew and capital, and 3) net profit: defined as gross
profit minus crew payments, and thus portrays what is left to pay off the invested capital. The gross
profit is regarded the best indicator of the financial development of small vessels of less than 12
meters and some of the vessels 12-15 meters. This is because hired crew is small for these vessels,
and hence the proportion of crew payments can be overestimated.
Following the reduction in landings will entail a reduction in days at sea, as well as a reduction in
landings value and, consequently, have an impact on some of the operating costs undertaken, i.e.
Less active-
commercial
Commercial
13
 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
2086807_0015.png
lower activity gives rise to lower cost. These costs are fuel costs, provision and ice costs, sales costs
and crew payments, which is reduced with the same proportion as the landings value. The remaining
costs, i.e. insurance costs, maintenance costs, various other costs and capital costs are considered to
be fixed and therefore independent of the activity level.
Table 16 shows the effect on landings value per vessel, while Table 17 and Table 18 shows the gross
and net profit per vessel in the two scenarios. All indicators show that the financial performance for
the various fleet will deteriorate, even if only the minimum repercussion scenario is considered.
Looking first at the landings value in Table 16, it is observed that those fleets affected mostly in the
minimum repercussion scenario are those with a high dependency on cod and herring, for instance
trawl below 12 meters and trawl 18-40 meters. For fleets with a lower dependency on cod and herring,
these are mostly affected in the maximum repercussion scenario, for instance dory/trap below 12
meters and seine/gillnet/trawl 12-15 meters.
Table 16 Landings value per vessel (1,000 DKK)
Lower landings of the
Baseline
Only lower landings of
reduced quotas and
Length
Primary gear
2018
reduced quotas
other species
<12m
Gillnet/hook
811
755
723
Dory/trap
615
591
499
Seine/gillnet/trawl
830
711
667
Trawl
1,076
903
847
12-15m
Seine/gillnet/trawl
1,195
1,183
1,137
Trawl
1,702
1,436
1,254
15-18m
Seine/gillnet/trawl
3,106
1,996
1,868
Trawl
4,481
3,590
3,374
18-40m
Trawl
6,938
6,241
6,093
Source: Own calculations based on data from the Danish Fisheries Agency Vessel Register and Sales Notes
Register 9
th
August 2019.
The effect on the average gross profit is shown in Table 17. This indicator is preferred used for fleets
below 12 meters, because these fleets are primarily handled by one single fisherman. This has
implications on how Statistics Denmark calculates the crew payments, which generally implies that
the crew payments are overestimated compared to, what the fishermen obtain in reality. For the fleets
below 12 meters, the reductions are again related to the dependency on cod and herring. The dory/trap
fleet is primarily affected in the maximum repercussion scenario, while for instance the trawlers are
affected mostly in the minimum repercussion scenario.
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 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
2086807_0016.png
Table 17 Gross profit per vessel (1,000 DKK)
Lower landings of the
Baseline
Only lower landings of
reduced quotas and
Length
Primary gear
2018
reduced quotas
other species
<12m
Gillnet/hook
385
341
316
Dory/trap
219
200
127
Seine/gillnet/trawl
299
214
183
Trawl
500
372
330
12-15m
Seine/gillnet/trawl
415
406
374
Trawl
859
649
505
15-18m
Seine/gillnet/trawl
1,582
734
635
Trawl
2,675
1,954
1,779
18-40m
Trawl
3,693
3,157
3,048
Source: Own calculations based on data from the Danish Fisheries Agency Vessel Register and Sales Notes
Register 9
th
August 2019 and cost information from Statistics Denmark.
Net profit shows what is left to pay off the invested capital, and for the fleets above 12 meters, large
reductions are observed. For trawlers 12-15 meters, the net profit is reduced to one-third in the
minimum repercussion scenario, and becomes negative in the maximum repercussion scenario. For
the seine/gillnet/trawl fleet 15-18 meters, net profit becomes negative already in the minimum
repercussion scenario, while it for the trawl fleet 15-18 meters are reduced to one-half from the
baseline level to the level in the maximum repercussion scenario.
Table 18 Net profit per vessel (1,000 DKK)
Lower landings of the
reduced quotas and
Baseline
Only lower landings of
relevant bycatch
Length
Primary gear
2018
reduced quotas
species
<12m
Gillnet/hook
-71
-83
-90
Dory/trap
-266
-266
-267
Seine/gillnet/trawl
-47
-81
-94
Trawl
130
61
38
12-15m
Seine/gillnet/trawl
-69
-73
-87
Trawl
171
69
-2
15-18m
Seine/gillnet/trawl
394
-47
-98
Trawl
1,012
621
526
18-40m
Trawl
1,471
1,159
1,094
Source: Own calculations based on data from the Danish Fisheries Agency Vessel Register and Sales Notes
Register 9
th
August 2019 and cost information from Statistics Denmark.
Based on the calculations above, it is likely that the quota reduction and limitations on access to
fishing grounds will result in a financial situation, which is not sustainable in the longer run for several
15
 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
fleets. If the time perspective of a positive development in the stock abundance and quota levels are
years ahead, especially the fleets below 15 meters do not have the financial robustness to cope with
the rather substantial negative financial repercussions in the years until this happens. Thus they will
expectedly leave the fishery and sell their fishing rights to other vessels that are not necessarily located
in the same area, and which have a fishing pattern distributed on a more diverse range of fishing
grounds.
Furthermore, there are the 198 less active-commercial vessels, for which it is not possible to calculate
any financial performance indicators. As shown in Table 15, their total landings value will be reduced
from 15 million DKK to 12 million DKK in the maximum repercussion scenario. Despite that these
vessels does not fish for a commercial purpose, it is likely that such a reduction will make it so
unattractive to be a less active-commercial fisherman, and many of them will have to stop fishing.
2.1
Consequences of other cod quota levels in subdivision 25-32
The proposal for the fishing opportunities in 2020 by the EU Commission the European Commission
of cod in subdivisions 25-32 (eastern Baltic Sea) implied a TAC and thus a Danish quota of zero.
However, in order to illustrate the potential effects of having various quota levels, a sensitivity
analysis is undertaken, assuming a cod quota in subdivisions 25-32 of 500 tonnes, 1,000 tonnes, 1,500
tonnes and 2,000 tonnes respectively.
The financial consequences of the various cod quotas are shown in Table 19, Table 20, Table 21 and
Table 22 including the three economic indicators, i.e. average landings value per vessel, gross profit
per vessel and net profit per vessel for the baseline 2018 outcome, scenario 1 being the minimum
repercussion scenario and scenario 2 being the maximum repercussion scenario.
16
 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
2086807_0018.png
Table 19 Financial indicators with a cod quota of 500 tonnes in subdivisions 25-32
(1,000 DKK)
Landings value per
vessel
Gross profit per vessel
Net profit per vessel
Base-
Base-
Base-
Length Primary gear
line Scena- Scena- line Scena- Scena- line Scena- Scena-
2018 rio 1
rio 2
2018
rio 1
rio 2
2018
rio 1
rio 2
<12m Gillnet/hook
811
755
723
385
341
317
-71
-83
-90
Dory/trap
615
591
499
219
200
127
-266
-266
-267
Seine/gillnet/trawl
830
729
687
299
227
197
-47
-76
-89
Trawl
1,076
923
868
500
386
346
130
69
47
12-15m Seine/gillnet/trawl
1,195 1,183 1,137
415
406
374
-69
-73
-87
Trawl
1,702 1,458 1,277
859
666
524
171
77
7
15-18m Seine/gillnet/trawl
3,106 2,137 2,014 1,582
842
746
394
9
-41
Trawl
4,481 3,658 3,454 2,675 2,008 1,843 1,012
650
561
18-40m Trawl
6,938 6,304 6,181 3,693 3,204 3,113 1,471 1,186 1,132
Source: Own calculations based on data from the Danish Fisheries Agency Vessel Register and Sales Notes
Register 9
th
August 2019 and cost information from Statistics Denmark.
Table 20 Financial indicators with a cod quota of 1,000 tonnes in subdivisions 25-32
(1,000 DKK)
Landings value per
vessel
Gross profit per vessel
Net profit per vessel
Base-
Base-
Base-
Length Primary gear
line Scena- Scena- line Scena- Scena- line Scena- Scena-
2018 rio 1
rio 2
2018
rio 1
rio 2
2018
rio 1
rio 2
<12m Gillnet/hook
811
755
724
385
341
317
-71
-83
-90
Dory/trap
615
591
499
219
200
127
-266
-266
-267
Seine/gillnet/trawl
830
748
707
299
240
211
-47
-71
-83
Trawl
1,076
942
890
500
401
362
130
76
56
12-15m Seine/gillnet/trawl
1,195 1,183 1,137
415
406
374
-69
-73
-87
Trawl
1,702 1,479 1,301
859
683
542
171
85
17
15-18m Seine/gillnet/trawl
3,106 2,278 2,159 1,582
949
857
394
65
17
Trawl
4,481 3,725 3,533 2,675 2,063 1,907 1,012
680
596
18-40m Trawl
6,938 6,366 6,269 3,693 3,251 3,178 1,471 1,214 1,171
Source: Own calculations based on data from the Danish Fisheries Agency Vessel Register and Sales Notes
Register 9
th
August 2019 and cost information from Statistics Denmark.
17
 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
2086807_0019.png
Table 21 Financial indicators with a cod quota of 1,500 tonnes in subdivisions 25-32
(1,000 DKK)
Landings value per
vessel
Gross profit per vessel
Net profit per vessel
Base-
Base-
Base-
Length Primary gear
line Scena- Scena- line Scena- Scena- line Scena- Scena-
2018 rio 1
rio 2
2018
rio 1
rio 2
2018
rio 1
rio 2
<12m Gillnet/hook
811
755
724
385
342
317
-71
-83
-90
Dory/trap
615
591
499
219
200
127
-266
-266
-267
Seine/gillnet/trawl
830
766
727
299
253
225
-47
-65
-77
Trawl
1,076
961
911
500
415
378
130
84
64
12-15m Seine/gillnet/trawl
1,195 1,183 1,137
415
406
374
-69
-73
-87
Trawl
1,702 1,500 1,324
859
700
561
171
93
26
15-18m Seine/gillnet/trawl
3,106 2,419 2,305 1,582 1,056
968
394
121
75
Trawl
4,481 3,793 3,613 2,675 2,118 1,972 1,012
709
630
18-40m Trawl
6,938 6,429 6,357 3,693 3,297 3,243 1,471 1,242 1,210
Source: Own calculations based on data from the Danish Fisheries Agency Vessel Register and Sales Notes
Register 9
th
August 2019 and cost information from Statistics Denmark.
Table 22 Financial indicators with a cod quota of 2,000 tonnes in subdivisions 25-32
(1,000 DKK)
Landings value per
vessel
Gross profit per vessel
Net profit per vessel
Base-
Base-
Base-
Length Primary gear
line Scena- Scena- line Scena- Scena- line Scena- Scena-
2018 rio 1
rio 2
2018
rio 1
rio 2
2018
rio 1
rio 2
<12m Gillnet/hook
811
755
724
385
342
317
-71
-83
-90
Dory/trap
615
591
499
219
200
127
-266
-266
-267
Seine/gillnet/trawl
830
784
747
299
266
240
-47
-60
-72
Trawl
1,076
980
933
500
429
394
130
92
73
12-15m Seine/gillnet/trawl
1,195 1,183 1,137
415
406
374
-69
-73
-87
Trawl
1,702 1,522 1,348
859
717
579
171
102
35
15-18m Seine/gillnet/trawl
3,106 2,559 2,450 1,582 1,164 1,079
394
177
133
Trawl
4,481 3,860 3,692 2,675 2,172 2,036 1,012
739
665
18-40m Trawl
6,938 6,492 6,445 3,693 3,344 3,308 1,471 1,269 1,248
Source: Own calculations based on data from the Danish Fisheries Agency Vessel Register and Sales Notes
Register 9
th
August 2019 and cost information from Statistics Denmark.
If the cod quota in subdivisions 25-32 is not reduced to zero, but to other levels, this will consequently
reduce the negative financial consequences for fleets fishing on this quota. Logically, the more quota
that becomes available, the negative financial consequences will be reduced. The tables only reflects
18
 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
the implications for an average vessel in a specific fleet, but for the individual vessel, even a small
quota of cod could make an important difference depending on the ability to change their fishing
behaviour, cf. section 4.
3. Consequences for the onshore services and processing industry
The consequences outlined above in the minimum and maximum repercussion scenarios are expected
also to have consequences for the onshore services (upstream services) and processing industry
(downstream services). From the available data and modelling tools it is, however, too uncertain to
calculate the impact on employment and profit for the processing industry and fishery related service
industry.
In relation to the processing industry, it is complicated to analyse the effect for a specific municipality.
Landings of fish to a specific harbour does not necessarily imply that it is also processed there. In the
small harbours around the Baltic Sea, there is only minor processing taking place. Some of the landed
fish might be sold to local fish mongers and small processing firms, but most of it is sold to larger
processing firms located in other areas of Denmark or abroad. These trade-flows are impossible to
describe with the current data available, and this will furthermore demand a detailed geographical
economic model to capture the derived effects in relation to local, regional and national effects. Thus,
the description of the potential consequences for the municipalities will therefore have to be based on
the changes in landings value with the above warning in mind. Therefore, it is assumed that each
vessel continues to have the same distribution of its landings to the various municipalities, and as a
consequence the landings to each municipality is reduced proportional with the reduction in landings
for each vessel.
Table 23 shows, which municipalities will be most influenced in the two scenarios. Especially,
Bornholm, Vordingborg and Stevns will be highly impacted. These municipalities are highly
dependent on landings from subdivision 24 and subdivisions 25-32. Thus, reduced fishing
opportunities in these fishing areas will impact these municipalities directly. The other municipalities
obtains most of their landing from subdivisions 22-23, and despite a reduction in the cod quota in
these subdivisions, this will only have a limited effects on the landings value.
19
 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
2086807_0021.png
Table 23 Change in landings value at the municipality level (1,000 DKK)
Total Danish
Total landings
Total landings
landings value
value with
value with
all fishing areas reduction only
Change
reduction in
Change
to municipality
in quotas
compared to
quotas and
compared to
Municipality
(1,000 DKK)
(1,000 DKK)
baseline 2018
other species
baseline 2018
Bornholm
22,018
10,625
-52%
6,555
-70%
Langeland
19,446
19,032
-2%
18,294
-6%
Vordingborg
13,511
5,593
-59%
2,577
-81%
Lolland
10,683
10,428
-2%
10,082
-6%
Stevns
7,358
3,668
-50%
2,480
-66%
Gribskov
61,617
58,521
-5%
58,454
-5%
Ærø
6,225
6,090
-2%
5,868
-6%
Kerteminde
6,751
6,694
-1%
6,464
-4%
Slagelse
4,649
4,589
-1%
4,396
-5%
Sønderborg
5,282
5,239
-1%
5,096
-4%
Source: Own calculations based on data from the Danish Fisheries Agency Vessel Register and Sales Notes
Register 9
th
August 2019.
The onshore service industry in form of ship yards, fuel and ice suppliers etc. will likely also be
affected by the lower fishing activity. Lower activity gives rise to less use of these services for
maintenance and repair. The data availability for analysing these questions is almost non-existent and
furthermore in the small harbours these industries is not solely dependent on the activity within the
fishery, but also services provided to other types of vessels, such as leisure boats, harbour service
boats, ship building etc. These other types of activities also generates an income to the harbours and
to the onshore service industries.
Furthermore, some harbours may be attractive to visit for tourists, because there are activity around
it, also including activity from the fishery. Reduced fishing activity and potentially fewer vessels
might imply that the harbours are not so interesting to visit. This will the lead to less hotel stays, fewer
meals served, less shopping etc., thus giving to even lower activity in the harbour and the town around
it.
4. Possibilities for adapting the fishery
Quota reductions are made in order to recover fish stocks over time, and thus increase quotas in the
future. In the long run, fleet adjustments can take place gradually in order to be at a capacity level
matching the available fishing opportunities. However, in the short run, reductions in quotas will in
most situations have a negative economic effect on the financial performance of the fishing vessels
concerned. In order to reduce such financial effects, fishermen will try to adapt fishery and activity
level in order to generate income in another way or reduce costs, i.e. they will change their behaviour
if possible, given the various restrictions they are subject to.
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 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
For some of the larger vessels, an option could be to start fishing in other areas and thus other quotas,
but this is not considered to be possible for smaller vessels located in the harbours around the Baltic
Sea. Given the Danish management system based on individual fishing rights, such changes are only
an option if these vessels buy quota from the vessels that are currently fishing in the area they would
like to switch to. Changing fishing activity towards quotas not currently owned by these vessels, will
imply that there is a supply at reasonable prices, which is not considered to be the case.
Cod is as mentioned often caught in the fishery conducted in the Baltic Sea and it is almost
unavoidable to catch cod. Cod will thus often be a choke species that restricts the utilisation of the
other quotas in the Baltic Sea. Fishermen will most likely try to adapt their behaviour to reduce the
catch of cod. If this is possible the situation will be close to the minimum repercussion scenario and
not the maximum repercussion scenario. Such behavioural changes might imply using other gears,
fishing in other seasons, fishing in other areas of the Baltic Sea. Depending on the fisherman and the
characteristics of the vessels such changes will incur a cost , else it would probably have been done
already. This means that is not likely that such a change in fishing behaviour will take place. However,
it is not possible based on current information to estimate the costs and gains by such a change.
Based on the above, it must be concluded that it will be difficult for these vessels to change their
behaviour in a way which can counteract the negative financial repercussions of the reduced cod
quota. For some, there might few possibilities, but a reduction in the number of fishing vessels must
be expected quite rapidly during the coming years, if the proposed quotas for 2020 are kept at this
level for several years.
Conclusion
Reducing the possibilities in the Baltic Sea for fishing cod and herring in subdivisions 22-24 and
setting a zero quota for cod in subdivisions 25-32 will have financial consequences for the vessels
involved in these fisheries. In 2018, the total landings value for the vessels fishing cod and herring in
subdivisions 22-24 and cod in subdivisions 25-32 was 286 million DKK. If only the landings of cod
and herring are reduced to the new quota levels, this will imply that the total landings value is reduced
to 241 million DKK. This will then be reduced further to 227 million DKK, if landings of relevant
bycatch species are also reduced together with the cod landings. The estimates show that the reduction
in landings value will be between 45 and 59 million DKK, i.e. -16% and -21% respectively.
These reductions in landings value will also imply reductions in variable costs, however these will
not be proportional to the reduction in landings value. Therefore, net profit will be reduced especially
the smaller vessels below 15 meters, making up the majority of vessels fishing in the Baltic Sea. The
repercussions will be larger, if it is not only the cod and herring landings that are affected, but also
relevant bycatch species.
Maybe the consequences can to some extend be counteracted by changed behaviour, but for especially
the smaller vessels it can be problematic to shift to other fishing areas or start going further to sea, if
it becomes possible for them to purchase quotas in other areas. Also such behavioural changes can be
costly to undertake, i.e. buying other gears, fishing on other grounds further away etc.
21
 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
For onshore services and processing industry there will also be a negative effect following the quota
reductions. However, it is only to a limited extend possible to analyse these effects. The amount of
data and information about trade flows, processing structure, generation of work in the onshore
service industry, derived effects on tourism etc. are relevant to consider, but the possibilities are
currently limited to address.
For the fishing fleets, the onshore service and the processing industry, the short and long run
consequences are dependent on how fast the stock situation improves. If it does not improve fast, a
large number of vessels, primarily small vessels below 15 meters, are expected to leave the fishery
fast, thus also having a derived effect on the onshore services and processing industry. A vessel
leaving the fishery will imply a significant capital loss, because these vessels still carry a substantial
amount of fixed costs.
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 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
2086807_0024.png
Annex 1 Map of the Baltic Sea with subdivisions
23
 MOF, Alm.del - 2019-20 - Bilag 20: IFRO rapport om Østersøkvoter
2086807_0025.png
Annex 2 Danish quota exchanges
Exchange type
Quantity Received
Quantity Given
25-32
Quantity Received
Quantity Given
Herring
22-24
Quantity Received
Quantity Given
Source: The Danish Fisheries Agency.
Note: * includes exchanges until August 2019.
Quota Species
Cod
Subdivisions
22-24
2016
756
0
0
-786
2,151
0
2017
92
0
0
-2
2,588
0
2018
150
0
30
-11
1,970
-550
2019*
108
-3
50
-24
581
-24
24