Øystein Hermansen has carried out research to develop an economic model that provides improved knowledge of the costs and earnings related to catches and live storage of cod. The incentive system with the quota bonus makes live storage profitable, but only marginally. Photo: Jon-Are Berg-Jacobsen/Nofima

Higher sales prices outweigh increased catch expenses

The researchers at Nofima estimate that the higher sales prices will to a certain extent outweigh the increased expenses for live catches of cod. The quota bonus is important for vessel economy.

Contact person
Portrettbilde av Øystein Hermansen
Øystein Hermansen

Scientist
Phone: +47 918 09 421
oystein.hermansen@nofima.no

The Catch research project will be concluded this autumn. Over the last five years, researchers and partners have developed new knowledge of live storage of Atlantic cod. Keeping fish alive after it is caught allows for deliveries of fresh cod outside of the typical cod season. If correctly handled, the fish will retain a high quality and can therefore be sold at good prices even outside the high season.

Improved knowledge

The project has given rise to improved knowledge of the costs and earnings generated by catches of live cod. This knowledge has been applied to develop an economic model for future work.

The conclusion is that the higher sales prices partly outweigh the increased costs, but that the value of the quota bonus has been of importance for ensuring that live catches are economically attractive. The most significant cost components are reduced catch efficiency resulting in increased catch time and share, according to Øystein Hermansen, who goes on to add:

“The costs are also affected by fuel costs, duties, insurance, maintenance and depreciation.” If a vessel has to reduce another type of operation due to increased time spent on live catches, then this new operation will soon become unprofitable. Crew availability is also an important issue.

The incentive scheme developed by the authorities with the quota bonus has been effective in increasing the volume of live cod landed and has laid the foundations for good knowledge development about catches, acclimatisation and short-term storage. There are significant values here, with a cod quota of more than NOK 3 per kg allocated to vessels.

Important quota settlement

The method applied to settle quotas is highly significant for the value of the incentive scheme. At present, a vessel may own the fish throughout a major part of the storage process and the quota is settled according to the gutted weight of the fish when removed from the cage after storage. As a result, the biomass reduction caused by mortality and reduced individual weight is not deducted from the vessel’s quota.

The Directorate of Fisheries has proposed a settlement of the quota based on the live weight of the fish placed in the cages. Øystein Hermansen is of the opinion that this will impair the value of the quota and the live catches.

Economic storage is essential for those enterprises planning to make live catches and store the fish in cages. We therefore need improved knowledge of the bio-economic implications of storage. These include biological factors such as mortality and weight development, workforce requirement and the costs of a storage facility and its operation.

Last, but not least, the sales prices that can be achieved are all important. The latter depends on the quality and size of the fish and the timing of slaughter. An economic model of the storage phase has been developed and is available to all business enterprises and other stakeholders.

Short-term storage

During the Catch project, storage trials mainly involved short-term storage. As a result, business enterprises and researchers have not gained much knowledge of long-term storage, which will likely be a decisive factor for profitability with this concept.

With short-term storage, the businesses involved do not have much capacity to slaughter fish during periods when the supply from wild catches is low, the quality is not satisfactory and there is no growth. This correlates with the companies’ perception of risk, not available effective feed, but also the fact that the requirements for permit allocation for such operations have been difficult to meet.

It has proven difficult to find attractive localities for storage operations. The businesses involved would prefer localities close to the fish processing plants, but these are deemed to be insufficient biologically or unsatisfactory in relation to contamination. Large areas have also already been occupied by other farming operations, primarily salmon farming.

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