Irish fisheries and Europe

I thought the issue was important enough to start a new topic.

So, to start with, is it true or not that Ireland lost in fish value what it gained in subsidies?

There's a thread on p.ie on this where returning officer has been very strident lately and very open for a Fianna Failer
http://www.politics.ie/viewtopic.php?f=77&t=37221&st=0&sk=t&sd=a

The Sinn Fein party are one of the few who make discussion of this a part of their manifesto. I'm sorry but I honestly know little else besides the fact that Irish people hardly ever eat fish.

Should we try to get em back, those fishing rights ? If that's something we signed up to Europe for at the time whenever it was - would people have voted for it if they had known the full implications ...?

This is from two posts on politics.ie - the first is my own appraisal of what Irish fisheries were worth, and the second is a look at Tom Prendiville's article in Magill, in which he claims they were worth €200 billion.

returning officer wrote:

ibis wrote:

The only actual factual basis I've seen for such a calculation is by taking the estimated value of fish caught in the Irish EEZ for a given year, and projecting it back over the 35 years.

Here is an estimate of the value of fish caught in the Irish EEZ in 2004:

Irish catch: €140m
Total catch: €460m
Irish proportion: 30%

If we simply project the €460m figure backwards over 35 years, we arrive at the suspiciously familiar-sounding figure of €16.1 billion - the first figure I remember seeing floated as a value for this. If you were to take the higher figure of €800m/year landed from "waters around Ireland" you get €28 billion - but that includes British and Norwegian waters.

So, the value "the EU" has "taken from us" - well, let's say we lost the value of 70% of that €16.1 bn - €11.27bn worth of fish at 2004 prices. Never mind that the Irish fleet has been in relative decline since 1973 (this being part of the complaint I'm sure no-one will quibble), or that fish used to be relatively cheaper.

How much of a loss does that represent to Irish government finances? Well, for a start, that €11.27 bn is just the value of the fish, not the net earnings of fishing. We can be generous, and assume a 50% margin - and an overall tax rate of 25% on the net earnings. That gives us 25% of €5.635 bn = €1.4 billion lost to the Irish state, over 35 years (€40m per year).

In the same period as the Irish state lost €1.4 billion in revenues from fishing, it gained €17bn in structural funds, and while it lost €11.27bn of fish from its economy (much of which would have gone on imported oil), it gained a total of €55bn from the EU.

The first comparison is probably the more important, since it meant that we didn't have to pay for infrastructure out of our own tax take, which meant lower taxes, which meant encouragement of both indigenous and multinational business. The knock-on effects of a domestic fishing industry would not have provided any such thing.

I appreciate this is slightly back of envelope, but it starts from a solid expert estimate, whose source I have provided. If someone can even begin to provide the calculations behind the other figures, work away.

Many thanks for the above analysis. I wasn't so much thinking in terms of lost revenue to the State, but rather the value of the economic opportunity we provided to the EEC/EC/EU (to be valued in a similar way to an intellectual property franchise). Access to the waters has a value - albeit one very difficult to quantify (eg they was an economic loss in allowing largely unfettered access by joining the community).

It may not equate to our CAP/Cohesion benefits (and indeed the access to markets and relatively stable currency), but the fact that we were contributing to the EEC when we were on our knees economically should not be discounted and the argument that we took the money and are now running away, is undermined.

Undoubtedly there was a quid pro quo. However, it really isn't as if it's been hidden away the whole time - the arguments over the opening of the "Irish Box" were ferocious in their day, and successive governments did their best to limit such access.

Having said all that, I think the Common Fisheries Policy is an absolute disaster area. I don't think the Irish Box would have necessarily have been better managed by design under purely Irish government, but it probably would have wound up less fished by default - although, thinking about that, we probably would have come to some kind of agreement with the EU for access...

cactus flower wrote:

ibis wrote:

Fear Dorcha wrote:

ibis wrote:

So, to drag the thread back on-topic a little - has anybody a credible alternative set of calculations? Has anyone a set of calculations to back up the Sinn Fein claim of €36 billion as opposed to the calculations (given on the first page) which suggest €1.4 billion?

This is from an article by Tom Prendiville printed in Magill:

STATISTICS BLOW MYTH OF IRELAND AS EU BENEFICIARY

- Because of fish supply, nation is second biggest indirect contributor to EU coffers
by Tom Prendiville, Daily Ireland, Wednesday 28 March 2006


Official European Union statistics reveal that Ireland's past image as one of Europe's largest financial beneficiaries is largely a myth.

Statistics indicate that, year on year off, Ireland has consistently been one of the biggest net financial contributors to Europe as a result of fish supply.

Official figures from the EU's statistical gathering agency, Eurostat, reveal that Ireland is second only to Germany as an indirect contributor to EU coffers.

Although Ireland did well in extracting almost E40 billion (£27.8 billion sterling) in transfer funds from the EU, the fish extracted from Irish territorial waters has been worth almost E200 billion (£139 billion sterling) in comparison.

The EU fish wars have raged in Irish waters for decades, and have now left Ireland facing a massive crisis with the prospect of the extinction of many fish species.

Statistics covering the period from 1974 to 2004 throw some light on the true cost of Ireland's EU membership to date, and the enormous financial contribution Ireland has made to the European Community.

Since 1974, the accumulated value of fish taken from Irish territorial waters,"the second most important in the EU", amounts to a E200 billion (£139 billion).

The EU fishing industry is worth almost E20 billion (£13.9 billion) per annum.

On average, more than five million tonnes of edible fish varieties, valued at E7 billion (£4.8 billion), are fished from EU waters every year, 40 per cent of which originates from Irish waters.

The true commercial value of the haul, according to David Cross, who compiled earlier Eurostat reports into the fishing industry, is double that again after processing has been considered.

He said: "The value of the output of the processing industry is nearly twice the value of the catching sector. In other words, for every euro generated in fish sales another two are generated in processing."

The most important fishery in Europe are the seas west of Ireland, the so-called Irish Box, which produce over 40 per cent of all the edible fish consumed in Europe. In monetary terms, the seas off Ireland are worth E8 billion (£5.5 billion) a year to the EU.

Every year, roughly two million tonnes are fished in Irish coastal waters. However, Ireland's share of the catch is miniscule and therein lie the current difficulties. While Ireland produces 40 per cent of the edible fish, the country's fishermen are only entitled to catch less than ten percent of
that. The rest is fished by foreign trawlers.

In recent weeks, the government has been involved in a showdown with Irish fishermen, some of whom have been flaunting the conservation quotas. Meanwhile, in the midst of the acrimonious dispute, ten Dutch factory ships, each one the size of Croke Park, have been hoovering up fish with apparent impunity in international waters 12 miles off the coast near Cork.

"The situation with foreign boats is even worse, as our naval service does not even know what the quota is," said Eamonn Ryan, Green Party spokesperson for maritime and natural resources.

"This flawed system has allowed what is in effect the open fishing of our waters. They are hunting to extinction most of the fish stocks in Irish waters."

In terms of importance, the once teeming Mediterranean produces less than 500,000 tonnes of fish yearly.

The Irish zone which extends out 200 miles into the West Atlantic is also the second most important in terms of Europe's edible fish stocks.
Adjusted Eurostat estimates for all fishing activity in Irish territorial waters since the mid-1970s indicate that over forty million tonnes of fish have been extracted

OK, so Prendiville's calculations are calculating something entirely different - the value of the landed fish plus the value of the processing - in other words, a rough measure of the total value in the economy of the possible fishing industry, assuming we had a fleet the size of the whole EU and had done all along, plus processed all the fish caught ourselves. He is also using a high value for a tonne of fish - €1320 for all species including luxury/aquaculture as opposed to the average €736 for the species caught in North Atlantic waters - which nearly doubles his estimate. Further, the idea that fish processing is worth twice the original catch - and adding it as Prendiville has done - rather ignores the way that the catch has to be paid for by the fish processing industry.

However, if we are going to do that kind of total-economic-value comparison, then the value of the CAP payments to farmers must include the correct proportion of the downstream industries that rely on farming - the meat processing industries, milk and dairy industries, etc etc - which in turn runs into hundreds of billions of euros. The structural funds paid by the EU would be augmented by the value of the subsidiary industry they created, as well as the industry and business they facilitated. A modest estimate of that added-value as per Prendiville might rise to well over a trillion euro over the period.

If on the other hand, we take what the value of that would have been to the state, and available to spend on our infrastructure and in supporting our farming industry, we again wind up with a smaller figure than the EU money - because assuming 25% of the €200 billion is taxable net earnings, and 25% of it will wind up as tax, you get €12.5 billion as opposed to the €55 billion the EU gave us.

Whichever way you pan this one out - either by taking the high estimate of the whole downstream value of the fishing industry and comparing it to the whole downstream value of the EU money - or by comparing the direct value of the fish versus the EU money to the Irish state as spendable revenues - you still wind up with a far smaller figure on the fish side of the balance.

Are you talking about total gross receipts or annual only, Ibis?

The receipts over the 35 years - so total gross receipts.

In summary, my own calculation of the value suggests a total value of €11.27 billion worth of fish "lost to the EU" - which is to say, fished from what would have been exclusively Irish waters by other EU nations.

That's a high estimate, because it neglects the fact that some of the other EU nations have not had access to the Irish Box all along (Spain, for example, only joined the EU in 1986). However, as a reality check, it shows that the approximate value in fish per square kilometre of Irish waters is similar to the value in Irish waters (€705/sq km as opposed to €730/sq km), which gives me rather more confidence in my calculations than Prendiville's.

My estimate is also based purely on the landed value of catch.

Prendiville's estimate, on the other hand, is based on the assumed value of fish plus the assumed value of fish processing - which is a slightly simplistic version of what's called the 'multiplier effect', which is an attempt to measure the value of something to the whole economy.

If we make the same assumptions for my figures - that the processing of the fish is worth roughly twice again the landed catch value - we wind up with a figure of approximately €34 billion, which is close to the Sinn Fein estimate.


Sadly, Prendiville makes no attempt to do the same for the CAP & structural
payments - he simply measures them as a single input, rather than
looking at the multiplier effects of them on the economy - so he is
comparing apples with bananas.

If we consider the multiplier effect of the EU's €55 billion in direct payments to Ireland, we would wind up looking at a figure of at least a trillion euros, because the direct value of the farm produce produced by farms reliant on CAP payments needs to be multiplied by the various farm-produce processing industries, and the value of the structural funds spent on infrastructure needs to be multiplied up by the value of the companies that supplied the expertise and materials, and the companies that supplied them, etc.

That is without considering the value to the Irish economy of being given access to the EU market of hundreds of millions, for which we exchanged free access to our three or four million customers. I'm sure Ard-T can put some kind of rough value on that for us - it will be rather large.

On balance, then, the claim that Ireland is not really a net beneficiary from the EU is completely unsustainable. It relies on pretending the values of our fish would have been maximal, that building up our industry would have been cost-free, that fishing itself would have cost nothing. It is, quite frankly, a grotesque exaggeration, designed purely to encourage people to believe that the EU has "put one over on us", and that we haven't really benefited - when, clearly, even those organisations peddling it, like SF, believe no such thing.

Good feckin work again ibis. I wonder if one of the multiplier effects is the assumption that we would have eaten a lot of fish too, replacing our tastes for imported goods thereby offsetting the ...

200 billion is way way over the top so? And this is since when? Some treaty in the early nineties ?

No, Consumption of fish by the Irish doesn't seem to me relevant. You can be a carpenter for me and do nothing to your house, you will still earn money.

About what Ibis says, of course I admit that Ireland's farming gained a lot through PAC, and if you go that way you can add industrial goods as well. Which in the big picture makes Ireland hugely beneficiary of the common market of course.

But I'd rather stick in this thread to fisheries only. Fisheries are a separate European administrative department, and there are specific technical dimensions which deserve a separate discussion. For those who are interested I mean.

Personally I'm trying to get better at understanding European fisheries policies, and you are an excellent case study.

I would have thought that it is clear that unless Ireland again at some stage becomes a net recipient of EU funds, the fisheries have to win as, properly managed, they would remain a valuable resource indefinitely, where as the EU funding was for a few short decades.

The industry has a massive future potential too, I forgot that one - how do economists and bean counters see that ?

Did we really sell Ireland's Box forever ?

Just as a reminder, here is a picture of the national zones, taken from Wikipedia. Of course it doesn't tell you the value of the catches in those areas.

cactus flower wrote:

I would have thought that it is clear that unless Ireland again at some stage becomes a net recipient of EU funds, the fisheries have to win as, properly managed, they would remain a valuable resource indefinitely, where as the EU funding was for a few short decades.

That, of course, is true - plus there's the fact that the EU money and market access, properly managed, have got us to the point where we're net contributors.

The fisheries, unless exploited at an even more unsustainable rate than they have been, would not have achieved that, because even in Prendiville's exaggerated calculations, the tax take (thus the value to the State, and available for infrastructure and farm support as the EU moneys were) over the 35 years still amounts to only €12.5 bn - €357m per year. At that rate, the tax take from our fishing will catch up with the EU subsidies in 2092 - by which time they will have been utterly dwarfed by the tax take from the businesses generated by EU funding and access to the EU markets.

Still...what are you betting that Ireland fisheries would have been properly managed? Aftre all, when we extended the Irish Box to its current size, we had 3 ex-British minesweepers - the EU paid for us to build and buy 7 new ships to police the vastly extended Irish waters (extended from 12 mile limit to 200 mile limit).

And while we're at it, pity the Brits, who gave up exclusive control of nearly 4 million sq km of sea, and the French, who gave up 11 million sq km - and who have also been net contributors all along.

Really, I'm amazed anyone is claiming this with a straight face.

ibis wrote:

That is without considering the value to the Irish economy of being given access to the EU market of hundreds of millions, for which we exchanged free access to our three or four million customers. I'm sure Ard-T can put some kind of rough value on that for us - it will be rather large.

In terms of other sources of investment into Ireland which are derived from our membership of the EU and the other economic benefits of Ireland joining the EU, here are two headings:

Foreign Direct Investment

Ireland, through the Government, IDA, Enterprise Ireland and so on all point to EU membership as a key reason for our outstanding success in attracting FDI. It is, however, only one reason why we receive FDI. Educated workers, low corporate taxes, propitious legal environment, an English-speaking population are other reasons why we attract so much FDI. Therefore, let us estimate that 10% of our FDI is derived from our membership of the EU.

According to the CIA World Factbook, we have a $173.9 billion stock of FDI in our country. Therefore, by using our 10% rule, $17.39 billion of that has been invested as a result of our EU membership. At current EUR/USD rates, that equates to 11.2193 billion euro.

Import/Export Tarriffs

Ireland has saved significant sums in terms of import/export tarriffs between ourselves and Europe. We trade in billions with the rest of the EU, and we would face significant costs of trade if we were outside the EU. Assuming we would have to pay an average 5% levy on our exports to the EU and taking the 5% away from our imports from the EU, we begin to gain an idea of the savings EU membership causes.

According to the CSO, we exported €56.075.2 billion to the EU in 2007. We imported €38.315 billion in the same period. Using the 5% figures above, we saved €888 million in tarriffs in 2007 alone. Over 35 years of EU membership, this saving would run into many billions.

Adding the two figures together and we see that tens of billions more in terms of economic benefits have flowed from EU membership, aside from direct structural funds receipts.

One thing that I regret is the growing gap between, on the one hand, scientists who recommend fishing restrictions but enjoy safe quangos jobs, and on the other hand fishermen who are forced to plunder the seas to make a living.

Ideally, fishermen paid organizations should tackle the problem of resources themselves.

I see this gap in other fields of ecology too, btw. For instance in green building.

arnaudherve wrote:

One thing that I regret is the growing gap between, on the one hand, scientists who recommend fishing restrictions but enjoy safe quangos jobs, and on the other hand fishermen who are forced to plunder the seas to make a living.

Ideally, fishermen paid organizations should tackle the problem of resources themselves.

I see this gap in other fields of ecology too, btw. For instance in green building.

I wonder why they can't get the equivalent of the "set-aside" for farmers under the CAP scheme. Farmers are basically paid not to farm and leave fields idle. If we can do that for farmers, why can't we do it for fishermen? Pay them not to fish while we wait for fish stocks to recover.

arnaudherve wrote:

One thing that I regret is the growing gap between, on the one hand, scientists who recommend fishing restrictions but enjoy safe quangos jobs, and on the other hand fishermen who are forced to plunder the seas to make a living.

I have to take issue with that. Fisheries scientists have been recommending severe restriction of fishing for decades. The politicians do not implement the required quotas.

arnaudherve wrote:

Ideally, fishermen paid organizations should tackle the problem of resources themselves.

I see this gap in other fields of ecology too, btw. For instance in green building.

Frequently the same problem. I graduated form UCD science, and many friends are expert scientific employees of the Irish civil service - I have done my own brief stints as a temporary contractor.

Government scientists do their best to do scientific work as they were trained. If they are asked to estimate appropriate quotas to avoid depletion of fish stocks, they will provide the most accurate scientific estimate they can.

Those estimates are then handed over to the politicians to turn into quotas, which is not unlike handing over your children to a backstreet organ transplant clinic ('organleggers') - you're unlikely ever to see your figures again, and if you do it will only be bits of them turning up heavily embedded in complete strangers.

In turn, the fishermen, having no incentive to conserve stocks, concentrate on catching their quotas with as little effort as possible - bigger vessels, up to ten times as much bycatch, destructive harvesting.

It's a standard phenomenon - look up "tragedy of the commons".

arnaudherve wrote:

Ideally, fishermen paid organizations should tackle the problem of resources themselves.

I find that an astounding view from a French man when the french fishing industry has been decimated as a result of over fishing. The Bay of Biscay is a marine wasteland. I saw a fantastic french documentary on it on TG4 where they interviewed many fishermen and watched them getting a hard time from inspectors. I wish I had a link to it. The way some of the fishermen were brutally honest about overfishing was incredible - they were all depressed because their whole way of life was gone and many blamed themselves. In fairness, the evolution of fishing technology meant they were pretty much forced into it.

The idea that the Governments of the world should leave their precious national resources exclusively in the hands of those who make all their money out of exploiting that resource is some hard-core ideological free-marketeering if you ask me.

Zhou_Enlai wrote:

I find that an astounding view from a French man...

I'm not sure I have a responsibility whatsoever in what my government or the fishermen of my country do. I think they don't know that I exist.

And BTW I'm not interested in the results of the European football championship either. I hardly watch TV I'm into Japanese anime.

Zhou_Enlai wrote:

The idea that the Governments of the world should leave their precious national resources exclusively in the hands of those who make all their money out of exploiting that resource is some hard-core ideological free-marketeering if you ask me.

I wrote about organizations, which will supervise individual businesses and care for the long term.

Ard-Taoiseach wrote:

arnaudherve wrote:

One thing that I regret is the growing gap between, on the one hand, scientists who recommend fishing restrictions but enjoy safe quangos jobs, and on the other hand fishermen who are forced to plunder the seas to make a living.

Ideally, fishermen paid organizations should tackle the problem of resources themselves.

I see this gap in other fields of ecology too, btw. For instance in green building.

I wonder why they can't get the equivalent of the "set-aside" for farmers under the CAP scheme. Farmers are basically paid not to farm and leave fields idle. If we can do that for farmers, why can't we do it for fishermen? Pay them not to fish while we wait for fish stocks to recover.

It was suggested today, by an EU person speaking on RTE radio (didn't catch the name). So far as I remember from reading news on fisheries over the years is that the EU has encouraged and given some grant aid to people buying much bigger trawlers: ghastly factory ships now going out to reek havoc around Africa.

If fishermen are to believed the quotas are achieved by throwing back a lot of dead fish and the system is craziness.

It is a real problem, we are heading to fish out many species. Too many people for the number of fish is the bottom line. It is my personal bench mark for overpopulation.

I agree with Arnauld that ultimately its the fishermen themselves who will have to take on full responsibilty for the future or lack of , of their industry.

Problem is that the lawless of the Sea and all maritime rules will have to be changed and the fishermens mentality itself will have to move from hunters to ranchers and stewards of the martime ecology and a full understanding of how the chain of life works in the ocean - otherwise Jellyfish will take over the world (Im not taking the piss - at the rate the "top" predators and the rest of the higher up of the fishworld are being depeleted - that is a very possiblitiy)

Unfortunately - going on their abysmal record in all of the above - where you would be hardpushed to leave them in charge of the petting pool in an aquarium - it will be an uphill struggle to carve out a New Deal Arrangement for the Fishermen - which is badly needed.

Its an example of where competition doen't work. If there was a monopoly, public or private, there would be rationing, or prices would be higher and either way the stock would be maintained.