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Fishery and Aquaculture Country Profiles Iceland

 

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FISHERIES DATA

Commodity balance (2001):

FISHERIES SECTOR STRUCTURE

Overall fishery sector

Icelandic marine fishery landings account for 2.1 per cent of the world’s catches, making Iceland the 12-largest fishing nation worldwide. Domestically the industry is important, being the second most important industry and employing approximately 9% of the workforce. The Icelandic fishing grounds are very productive, yielding large amounts of redfish, herring, cod and capelin. The most important species landed into Iceland, both in terms of value and volume are cod, redfish and haddock. Atlantic salmon is an important species for recreational fishing, more so than commercially. While less important than the capture industry, aquaculture is a growing industry, with production dominated by Atlantic Salmon and Arctic Charr. Iceland is the world’s largest producer of farmed charr.

Marine fisheries

Resources and landings

Icelandic catch levels have increased from around 1.6 million tonnes in the 1980s to over 2.1 million tonnes in 2002, making Iceland the 12th largest fishing nation of the world. Particularly rich fishing grounds lie around the western fjords and off the south coast of Iceland in the winter. The cod landings at the beginning of the 21st century are similar to those in 1930, whereas the capelin fishery is many sizes larger. Almost all of the landings into Iceland (98 per cent volume) originate from Icelandic waters.

In 2001 the majority of the landings from the national fleet in domestic ports were pelagic species (1,435,701 tonnes). The next most voluminous group were groundfish (430,282 tonnes), which were more than four times more valuable than pelagic landings. The most abundant and valuable species of groundfish was cod, which accounted for 12 per cent (234,085 tonnes) of the total volume and 43 per cent (US$ 408.8 million) of total landings value. The remaining landings include herring (178,950 tonnes, nine per cent of total volume), flatfish (mainly Greenland halibut), crustaceans (predominantly shrimps), and molluscs (largely scallops).

Capelin provided approximately half of total landings in 2002. Since the 1950s this species has provided a large amount of the catch most of which is reduced to fishmeal and fishoil. However, there have been large crashes, approximately every ten years, possibly as a result of environmental factors. The last crash in the capelin fishery was 1991/92. While herring landings matched those of capelin until the 1950s, herring stocks and catches have not recovered since a crash in 1967. Since the 1980s, herring landings have remained relatively constant, unlike other species, including cod, haddock, saithe and redfish, which have all gradually declined since the mid-1980s.

The majority of landings from foreign vessels in domestic ports in 2001 were pelagic species (127,939 tonnes). These landings have increased rapidly since 1999, when 82,946 tonnes were landed. Over the same period the amount of cod landed by foreign vessels decreased from 10,739 tonnes to 2,801 tonnes. The ex vessel price for cod however increased so that it was approximately 15 per cent higher in 2001 than 1999.

Value

Iceland is heavily dependent on its living marine resources, with 63 per cent of the value of exported products in 2002 originating from fish. The catch value increased from US$ 800 million in 1996 to over US$ 960 million in 2002.

While pelagic species account for the largest proportion of catch volume, most of the value comes from demersal species such as cod and haddock. Cod is the major contributor to value, accounting for approximately 40 per cent of the value.

Volume and value of national landings in domestic ports in 2001

Landing sites

The two main landing sites in Iceland areNeskaupstaður (237,897 tonnes in 2003, 12 per cent of total landings) and Vestmannaeyjar (201,524 tonnes in 2003, 10 per cent of total landings).

Fishing units 

In 2003 the Icelandic fleet consisted of 1,872 registered vessels. While the majority of Icelandic vessels are coastal vessels with less than 10 GT (1,349 vessels in 2002, 70 per cent of the fleet), they account for less than three per cent of the catch. The majority of catch (approximately 68 per cent) is landed by pelagic trawlers and purse seiners (52 vessels in 2002), which represent less than three per cent of the fleet.

Vessel lengths range from less than six metres to over 75 metres, with the majority being between six and 11.9 metres. The average age of vessels increased between 1975 and 2002, standing at an averaging of 20 years in 2002.

The number of trawlers fell from 100 to 60 between 1990 and 1996, after which it remained relatively constant. However, the average engine power of trawler fleet decreased between 1996 and 2002.

Inland fisheries

Main resources

Major species of fish caught in freshwater environments are Atlantic salmon, brown trout and Arctic char. Commercially, the salmonids are the most important freshwater species. There are both stationary (permanently resident) and run (migrating to sea and returning to spawn) populations of brown trout and Arctic char. Rainbow trout was introduced to Iceland in the 1950s for aquaculture production, but has not established itself in the wild.

Commercially the most important freshwater species is Atlantic salmon. Although urbanisation is leading to stock declines in some places, stocks are generally reported to be stable in rivers. However, since the 1980s there has been growing concern about a shift towards an increased proportion of salmon spending one winter in the sea (grilse) because of a falling proportion of the salmon spending two years in the sea. It is thought that this could be a result of increased mortality of salmon while in the sea, possibly due to environmental factors, such as sea temperature changes.

Catch profile and value

Commercially net-caught salmon accounts for less than ten per cent of the total salmon catch. The salmon are only sold in Iceland. In 2002 a netted salmon could be worth up to US$ 6.5 per kg. This sets the value per net-caught salmon at approximately US$ 24, which is an average formed by grilse and two winter salmon. When the cost of netting and marketing are taken into account, each salmon is worth approximately US$ 14, which is significantly less than the salmon would be worth in the recreational angling industry (see below).

Recreational fisheries

Main resources

Atlantic salmon is the most important fish for the recreational sector, accounting for over 90 per cent of the recreational catch. Nonetheless, the number of fishermen targeting Arctic char and brown trout is increasing, possibly in response to the fact that the Arctic char and brown trout licence is cheaper than that for Atlantic salmon. Catches of salmon are reported to be reducing in some rivers because of stock decline resulting from increased urbanization processes and possibly by escapes from aquaculture.

Recreational angling is also important in the tourist sector, attracting foreign anglers. There has been an increase in 'catch and release' salmon angling over the recent years, accounting for approximately 16 per cent of the total angling catch in 2003.

Catch profile and value

It is estimated that the minimum direct and indirect annual revenue from salmon angling amounts to US$ 30 million. Each angled salmon is worth US$ 500 to the Icelandic economy. This figure includes river-related costs, such as fishing licenses, food, lodging and guiding on the rivers. Other costs may increase the value of each salmon up to US$ 1,000; these include bait, tackle and angling gear, airline costs and other costs associated with fishing trips. Seasonal variation in catches may also increase the value of salmon.

Catch may not be sold or financial profit be made in any other way. Annual fishing competitions, set by the Ministry, are not included in the commercial TAC although the catch may be sold on the basis that revenues do not exceed the cost of participation in the competition.

Aquaculture

Production

Aquaculture production has increased steadily over the past ten years. Total aquaculture production in 2003 exceeded 6,200 tonnes, mostly consisting of salmonid species (5,500 tonnes). Production is dominated by Atlantic salmon (3,700 tonnes) although Arctic charr production now exceeds 1,700 tonnes, which probably is the world’s largest production of charr. The production of marine species was about 600 tonnes in 2003, with Atlantic cod (380 tonnes) being the leader. Juvenile production is dominated by salmon smolts and fry with 850 thousand smolts being released into various salmon rivers in 2003.

Icelandic fish farming production 1994 – 2003 (metric tonnes)

Facilities

In 2003 there were 86 registered fish farms producing either salmonids or marine species. Of those 35 were producing juveniles, mostly for salmonid releases. Only six were producing juveniles of marine species. There were 21 marine cage farms, most of which are producing cod. Two large cage farms are engaged in salmon farming, both of which are located on Iceland’s east coast. There are 30 additional land-based farms, mostly involved in salmonid rearing with a few rearing marine species such as halibut, turbot, sea-bass and red abalone. Over 70 % of the landbased farming capacity is accounted for by the four largest land-based operations.

FISH UTILIZATION

Post harvest use

There is a high degree of vertical integration in the fishing sector, with companies typically owning both fishing vessels and processing plants. Salting is the largest processing sector in terms of number of operators, with over 150 licensed salting plants in 2002. This is closely followed by the freezing industry with 150 licensed plants. Other forms of processing include the lumpfish roe industry and the fish drying industry.

Most of the demersal catch is frozen. There has been a shift towards sea based freezing so that an equal amount is frozen at sea as on land (around 140,000 tonnes each in 2002). The second largest processing activity in terms of quantity is the salting industry (baccalau and herring), which remained constant between 1994 and 2000 at just under 100,000 tonnes. The smallest processing activity in terms of quantity is fresh exports, which amounted to 50,000 tonnes in 2002. Fresh exports include fish that are landed abroad, shipped in containers and fish that are chilled for air freight.

Approximately 90 per cent of the pelagic catch is processed into oil or fishmeal. Between 1999 and 2002 production increased by approximately 40 per cent to over 1,400,000 tonnes.

Fish markets

The Fishing Industry Price Determination Board (FIPDB) was established in 1962 and consists of representatives of the buyers, the fishermen and the fishing industry, as well as of the government. The FIPDB set the minimum price for fish in Iceland until 1987. Before this first hand sales were conducted between vessel owners and buyers. The first fish auction market was opened in 1987. The individual auction markets are connected via a computerized auction network, which operates in Icelandic and in English, for use by national and international buyers. There are two types of bidding systems: Dutch bidding (Islandsmarkadur, decreasing bid) and English bidding (Reiknistofa Fiskmarkadur, increasing bid). While more than eighty per cent of the auction markets are in rural locations around the Icelandic coastline, bidding over the internet has been possible since April 2004. The auction market is owned by four fish auction companies and two investing companies. The government is not involved in providing facilities for auction markets, which operate under the Fish Auction Market law 1989 Nr 123/28.

FISHERY SECTOR PERFORMANCE

Economic role of fisheries

Between 1997 and 2002 the fisheries sector of Iceland, including both fishing and fish processing, was responsible for 12 per cent of the total GDP of Iceland. This figure changed little between 1997 and 2002. At the end of 2002 the fisheries sector was worth US$ 1,122 million at the Iceland Stock Exchange (ISE). This made the fisheries industry the second most important industry in Iceland, after the Finance and Insurance sector, which was worth US$ 2,243 million in 2002.

Supply

Although the majority of fish production is exported, fish and fish products play an important role in the national diet. Fish is the third largest food group in terms of annual per capita supply, after milk (249 kg per year, excluding butter) and fruit (114.1 kg per year). Iceland has an annual per capita supply of 91 kg of fish and seafood. Fish is also the third largest source of protein in the Icelandic diet, accounting for 21 per cent of total daily protein supply (124.4 g). The majority of fish consumed are demersal species (64 per cent), with the second largest source of seafood being crustaceans (20 per cent).

Trade 
Exports
The most important export markets for Icelandic fish and fish products are in Europe, with major markets in the United Kingdom, Denmark and Spain. Japan also has a large market for Icelandic exports, mostly for frozen fish.

In 2002 742,233 tonnes of fish and fish products were exported from Iceland, the value of which amounted to US$ 1.4 billion. Both the value and volume has increased gradually since the mid-1990s (610,690 tonnes and US$ 1.2 billion in 1995).

While fishmeal accounts for approximately 37 per cent (258,595 tonnes in 2001) of export volume, it accounted for approximately ten per cent of the total export value. The second most important export in terms of volume is fish fats and oils (88,262 tonnes in 2001). The most valuable export product in terms of total value is frozen fish fillets. Although only 85,858 tonnes (13 per cent of total volume) of frozen fish fillets were exported in 2001, they were the largest single source of income from exported fish and fish products, accounting for 28 per cent (US$ 484 million) of total value. While cured and smoked cod is the most important single species for human consumption in terms of export value (US$ 250 million in 2001), accounting for 14 per cent of total export value, the export volume equals five per cent (33,916 tonnes in 2001) of the total export volume.

Since the mid 1990s the relative importance of frozen products has been decreasing as other exports, notably iced products, fishmeal and oil have become more important.

Aquaculture exports

In 2003 Iceland exported about 3,286 tonnes of whole salmon equivalents and 1,100 tonnes of trout, mostly charr. Most exports are whole salmon and trout fillets, with some salmon processed. Domestic consumption of salmon is estimated to be 500 tonnes and almost 50 % of the charr production is marketed in Iceland (800 tonnes). The largest markets for whole salmon are the United States (50%), France (20%), Germany (13%), Denmark (9%) and Holland and other EU countries. The most important market for charr are the United States (59%).

Ancillary services and technology

In addition to the fishing industry itself, Iceland has a strong international presence in fisheries related products. These include computer software packages, electronic and digital equipment, such as scales for on-board and land-based weighing, and also tubs, boxes and packaging for handling, storing and retail of fresh and frozen fish products. Iceland also manufactures a large amount of fishing equipment, including trawl nets, doors and fishing boats.

Employment

There is relatively high employment (approximately four per cent of the total population, 11,900 in 2001) in the fisheries sector. Of this, around one third are employed in the harvest sector (4,400), two thirds in the processing sector (7,200) and a small amount, approximately 300 people in 2001, in the aquaculture sector. The level of employment in the harvesting sector remained constant over a ten-year period up to 1999 at around 6,000, after which employment dropped to 4,300 in 2000. However, employment in the processing sector reduced by approximately 3,000 in this period to around 7,000 people in 2001. In total, approximately 12,000 people were employed in the fisheries sector in 2001.

FISHERY SECTOR STATUS TRENDS

State of the resources

During the mid to late 1990s it was estimated that the state of the marine fish stocks in Icelandic waters was generally poor. Some species, such as saithe had reached a historically low value, not reached since the 1940s. Stocks have since recovered, manifested by higher recruitment and spawning stock sizes. The haddock stock, for example, more than doubled in size between 2000 and 2003. However, more recent trends (1999-2001) suggest that the size of demersal stocks on the Icelandic banks is decreasing, in particular the cod stocks. However, the large decrease in cod stocks may be accounted for by over-estimations of stock sizes in the 1990s. The mean weight of cod (weight at age) decreased between 2002 and 2003, which led to a low abundance of older and larger cod in the spawning stock, upon which the Marine Research Institute (MRI) recommended a closure of important spawning areas and gear size restrictions to prevent further deterioration of the stocks.

FISHERIES SECTOR DEVELOPMENT

Constraints

The ultimate constraint the Icelandic fishing industry faces is the size and state of fishery resources. In addition to this, however, there is an ongoing debate over the reliability of the scientific stock assessments. This debate is fuelled by the over-assessment of the cod stocks in the 1990s.

Any further deterioration of the marine fish resources will have a noticeable effect on the fisheries industry, resulting in the need for further management strategies and industrial growth. Iceland is also dependant on the EU export market. Duty tariffs will therefore continue to play an important role in terms of production and trade.

Development strategies and plans

The Ministry of Fisheries is responsible for the management of fisheries in Iceland, and is supported by the Directorate of Fisheries, the Marine Research Institute and the Icelandic Fisheries Laboratory. The Icelandic fisheries management system is underpinned by the 1990 Fisheries Management Act (No 38/1990), which defines the management objectives as protecting marine resources while economically and efficiently utilising fish stocks and securing employment in the fisheries sector.

The exploitation of commercially important marine fish species is regulated under a system of tradable catch-quotas allocated to individual vessels (ITQs, Individual Transferable Quotas). These quotas assign a right to catch a specific proportion of the annual TAC of a specific species during a given year, as well as a more permanent right to a specific percentage of the national TAC for each fishing-year. The quotas can be bought and sold freely.

A number of stocks, including cod and capelin, are managed under long-term management plans. These take the form of harvest control rules (HCR), which set maximum and minimum limits on catches with respect to the previous year.

ResearchCapture fisheries

The Marine Research Institute (MRI) assesses the size and condition of exploited stocks as the basis of TAC (Total Allowable Catch) recommendations. Pelagic stocks are assessed using acoustic methods, while demersal species are assessed though groundfish surveys conducted each spring. These surveys are supported by data from landings reports.

The MRI also undertakes research to provide the processing industry with information on good practices, such as improving catch utilization. Other MRI research areas include are the marine ecosystem, fishing gear, fish behaviour, fish migration, and species interactions, feeding and growth patterns.

The Icelandic Fisheries Laboratories (IFL) aim to increase the value, quality and safety of marine catches through consulting and research into development and dissemination of knowledge. Research areas are mainly in the processing and aquaculture sector.

The Institute for Freshwater Fisheries carries out research into the freshwater environment and freshwater assessments. The University of Iceland and the University of Akureyri also carry out research into fisheries and environmental issues.

Mariculture

The Marine Research Institute (MRI) currently concentrates mariculture research on the farming potential for halibut, cod, turbot and abalone. This includes the production of juveniles, selection of brood stock and selective breeding. Such research is undertaken in cooperation with private companies and other research centres. The MRI also seeks to identify the most favourable areas for mariculture in terms of maximising production and minimising environmental impacts.

Whaling

In 2003 Iceland initiated research into the role of whales in the environment, especially their interactions with fish stocks. As part of this, Iceland reopened their whaling industry, which had been closed since 1989. A reassessment of this research stated that of the planned three species of whales, only one species, the minke whale, was caught. The low numbers of whales that were caught, 36 as opposed to the planned 100 annually, led to a revised target of 25 minke whales (no other species) in 2004. In 2003 the International Whaling Committee (IWC), of which Iceland has been a member since October 2002, agreed that the revised number of whales taken would represent less than 0.01 per cent of the population of minke whales found in the Icelandic coastal waters.

LINKS

Information Centre of the Icelandic Ministry for Fisheries:http://www.fisheries.is

Ministry for Fisheries:http://eng.sjavarutvegsraduneyti.is

Marine Research Institute:http://www.hafro.is

Directorate for Freshwater Fisheries:http://www.veidimalastjori.is/EnglSuma.htm

Institute for Freshwater Fisheries:http://www.veidimal.is

Icelandic Fisheries Laboratories:http://www.rfisk.is

Fisheries Association of Iceland:http://www.fiskifelag.is

Statistics Iceland:http://www.hagstofa.is