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State Council Presidium meeting on developing the fisheries industry

October 19, 2015, Novo-Ogaryovo, Moscow Region

Vladimir Putin chaired a State Council Presidium meeting on developing Russia’s fisheries industry.

The meeting’s agenda included supplying high quality fish products to the domestic market, infrastructure projects in the fish processing sector, and shipbuilding for the fisheries industry’s needs.

* * *

President of Russia Vladimir Putin: Good afternoon, colleagues. Further development of our country’s fisheries industry is the subject on our agenda today.

I know that there was some quite fierce debate in the working group in preparation for today’s meeting. This was reflected in the media too, and at various meetings and conferences of public groups, industry associations and so forth.

What this shows is that a fair few problems have built up in Russia’s fisheries industry. Our task now is to make a thorough analysis of all of these problems and carefully examine all of the proposals from the business community and the agencies concerned, as well as from the regions, of course, which all have their own geographical and climatic particularities when it comes to catching and selling fish.

Let me stress that the main aim of today’s meeting is to decide measures that will help to ensure our domestic market is supplied with quality and affordable products. This is the result that people expect from us.

As you know, the State Council, meeting in 2007 on the fisheries question, took measures that had a positive overall effect on the sector's development and gave companies a stable work environment and the chance to make a decent profit.

Three quarters of Russia’s fisheries industry is based on our own marine resources. Overall, Russia is consistently in fifth or sixth place in terms of fishing catch volumes over the last years. But our shops are still filled with imported and rather expensive products, not all of them good quality, and in some cases they are artificial products rather than the real thing.

There are many reasons for this situation. It takes only a few hours to process the paperwork for a ship and its catch in foreign ports, for example, but it takes a whole day here. True, a few years ago, it took even longer and the time has been shortened since then, but even a day is still a long time. The Government needs to analyse this situation and take some urgent additional measures.

The bulk of our fish catch goes off as frozen, low-processed products to the export market. This means that other countries get not only our best fish species, but also opportunities for creating new jobs and developing their economies and the processing industries that create added value.

Of course business focuses on making a profit and works wherever it is most profitable to do so. But neither Russia nor its people can accept a situation when the range and price of fish on the domestic market is decided by foreign suppliers and retailers, the fisheries industry has spawned a whole host of rentiers living off our marine resources, and exports of raw materials account for nearly 70 percent of fisheries industry companies.

Let me remind you that it was the state authorities that took the decisions making fisheries the high profit sector that it is. Along with the historic principle of distributing long-term fishing quotas, the fisheries companies pay only a 15-percent fee for use of marine biological resources and have other preferential conditions too. The industry has certainly grown a lot more solid as a result, but the problem is that these achievements have not done much to bolster Russia’s food security and develop the coastal regions and related economic sectors.

I remember the discussions on this issue back in 2007. People said then that we should introduce the historical procedure of allocating quotas, and then we’d all be happy and everyone would do well. Some people have indeed done very well, but now we need to share this ‘very well’ with the whole country, and the tasks the state authorities must address regarding the use of our country’s biological resources remain as valid as ever.

We need to develop a modern coastal infrastructure, processing plants, effective logistics, and, of course, a high-tech fishing fleet. Today, we lag considerably behind our competitors in all of these areas. Coastal fishing has dropped by 10 percent over the last five years. Our processing plants, warehouses, wholesale distribution facilities and transport logistics are developing very slowly. Frozen fish accounted for 87 percent of our exports last year, while fish fillets and readymade products accounted for only 7 percent. Frozen fish accounts for 56.7 percent on the domestic market, and fillets only slightly more than two percent.

We need to resolve these issues. This is a task for the state authorities, but also for the fishing companies that have already built up solid foundations and capital and are more than capable of investing part of the money earned from using their fishing quotas in modernising coastal infrastructure and processing facilities and building a new fishing fleet.

Modernising the fishing fleet is a crucial task for developing the fisheries industry as a whole. Russia’s fishing vessels are a critical 90-percent worn out and are not only economically ineffective but are potentially dangerous for their crews.

This need to modernise the fleet was already very much on the agenda eight years ago, when we fixed in law the ‘historical principle’ of quota distribution. There was a lot of talk then about how this policy would give fisheries companies the needed incentive to invest in building new trawlers, but these hopes have not been fulfilled.

The question of what ships we will use for catching fish in five or ten years’ time is very urgent now. Will we continue to charter foreign ships, or wait for investors from abroad? There are projects for building new ships, but they often remain on paper for long, long years.

It is clear that we must build our own modern, high-tech trawlers. A number of fisheries companies have already expressed their willingness to take part in this work. Russia’s shipyards are waiting for orders from the fisheries companies.

We understand of course that people will invest in building ships and modernising processing plants and coastal fisheries infrastructure only if these projects can guarantee a return.

The State Council working group has drafted proposals that we will discuss today. Their basic purpose is to encourage the companies engaged in catching and processing fish into investing in modernisation by increasing their fishing quotas as compensation for their modernisation expenses.

This decision is long overdue. Let me stress that this scheme of quotas in exchange for investment will help to develop the related sectors and supply our domestic market, and it is in the interests of the fisheries companies themselves. This investment ultimately shapes their companies’ future development, after all.

Before we start the discussion, let me note that these proposed measures set the directions for the industry’s continued development. These are not simple decisions. They concern the interests of many people, thousands of people employed in the fisheries industry and related sectors. It is therefore essential to weigh up and examine thoroughly all of the mechanisms for implementing these measures. There is no question that we need to take all possible risks and consequences into account.

We do have some time at our disposal, but we cannot delay things. These changes might not be approved today or tomorrow, but we cannot draw the process out too long. We have had many years to observe the situation we see before us now and have had ample chance to study these matters. Overall, we know what we need to do.

Let me stress that these changes must produce positive and measurable results. In no circumstance can we destroy what has already been achieved and deal an administrative blow to our country’s fisheries market. It is essential to establish good coordination between all agencies that will be involved in implementing the decisions this State Council Presidium meeting takes.

Let’s start work.


Vladimir Putin: I want to come back to the remarks by Vladimir Kashin [chairman of the State Duma Committee for Natural Resources and the Environment]. Mr Kashin, many people will be eager now to promote their interests in the State Duma. This is perfectly normal and to be expected. Economic sectors have always lobbied their interests in parliament. This happens everywhere, here in Russia too. You certainly must listen to what people have to say, but in making your final decisions, I ask you to base yourselves on the coordinated views and interests of the people working in the sector and the products’ final consumers. This is most important. This is what you need to pay your greatest attention to, not the interests of a small group of people who are making use of loopholes in the law and are busy only with their own personal enrichment. This situation cannot continue under any circumstance. We need to close these loopholes, but do it in civilised fashion so that, as I said, we do not end up harming the sector. We need to improve the legislation to make the sector work in the interests of Russia’s people.

I want to thank the working group that prepared the documents for this meeting, and our colleagues from the Government and the Presidential Executive Office. Thank you very much.

October 19, 2015, Novo-Ogaryovo, Moscow Region