The effects of Russia’s invasion of Ukraine on the aquaculture industry

The aquaculture industry in Europe is facing cost, supply and workforce challenges. The European Maritime and Fisheries Fund will help compensate the rapidly increasing energy cost. However, this is only a small and temporary fix. New solutions need to be found. Upskilling and reskilling solutions can help mitigate the issue.
Fish farm operator
25 May, 2022
By Bert Popping

Let’s start with Ukraine. While we mostly hear about shortages of sunflower oil and wheat when we talk about Ukraine, the country also has a small but notable aquaculture industry. Ukraine predominantly cultivates several carp species, including common carp (Cyprinus carpio). In addition, Ukraine cultivates catfish, pike, trout, sturgeon, seaweeds and mussels. And last but not least, Ukraine is the only producer of krill for human consumption! Aquaculture production in Ukraine has been stable over the past decade, employing approximately 8,000 people and producing an estimated 19,000 tons of farmed fish in 2019. And once the war is over and infrastructure and supply are restored, this industry segment may see significant growth.

However, at present, they are faced with the same challenges (and beyond) as Europe: shortages of raw materials and increasing energy costs that lead to shortages of animal feed as well as significantly higher production costs.

In Europe, the fisheries and aquaculture sector was already affected by rising energy prices during the corona crisis. The invasion of Ukraine by Russia has led to a further significant increase in energy costs. According to some, aquaculture and fisheries operations are only profitable when the cost of oil stays at or below 60 cents per litre. At present, the prices exceed the 1 Euro mark. And as primary industries are affected, the price-shockwave ripples through to secondary industries like the fish processing industry. And here, it is not only the increased prices that are a significant concern. It is also trading disruption and logistical challenges that they are faced with.

On March 16th of this year (2022), an exchange of views took place in Parliament’s Committee on Fisheries calling for support for operating costs, to prevent a severe disruption of the sector. On 25 March, the Commission triggered the European Maritime, Fisheries and Aquaculture Fund (EMFAF) Regulation crisis mechanism (Article 26(2)), by declaring the occurrence of an exceptional event causing significant disruption to markets.

Regulation (EU) 2021/1139 of the European Parliament and of the Council of 7 July 2021 establishing the European Maritime, Fisheries and Aquaculture Fund and amending Regulation (EU) 2017/1004

Article 26(2):

  1. By way of derogation from point (j) of Article 13, in case of exceptional events causing a significant disruption of markets, the support referred to in point (b) of paragraph 1 of this Article may cover:
  2. compensation to operators of the fishery and aquaculture sector for their income foregone or additional costs; and
  3. compensation to recognised producer organisations and associations of producer organisations which store fishery products listed in Annex II to Regulation (EU) No 1379/2013, provided that those products are stored in accordance with Articles 30 and 31 of that Regulation.”

This allows the Member States to compensate operators for lost income or additional costs, as well as producer organisations that store fishery products. Additional funds may become available from unused budget of the European Maritime and Fisheries Fund (EMFF).

Still, this is and can only be a temporary measure. And if/when the funds reach those most in need, e.g. small operations and cooperatives, is another question altogether. Here, technological solutions to reduce energy needs are vital to develop and implement in the mid and long term. This requires educated staff and technologists, which reskilling and upskilling services can significantly contribute to.

The bottom line for consumers is that sea and aquaculture products will get substantially more expensive in the months and years to come.

 

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