Russia considers expanding investment quotas to tackle pollock export crisis

The Russian government is continuing to seek solutions to address an excessive supply of pollock stemming from the near-closure of the Chinese market.

In January, Chinese customs authorities announced a tightening of inspections after they claimed to have found live strains of COVID-19 on the packaging of seafood imported from Russia.

Even though Russian watchdog government bodies have upped their own inspections of companies and ships delivering seafood to China according to the demands imposed by Chinese customs authorities in late 2020, China has not eased its own restrictions and has moved to reduce the list of Russian producers eligible to export seafood to the country.

The new list of 800 companies and vessels, released in early February, included 59 additional entities now banned from exporting to China.

Responding to the crisis, which has caused a glut of pollock to collect in Russia's ports and cold storage facilities, Russian Federal Agency for Fisheries Head Ilya Shestakov backed the idea of providing investment quotas for building more processing plants and cold-storage facilities to handle the output.

The investment quota program – launched two years ago – has encouraged businesses to build new processing plants, storage facilities, and fishing vessels in exchange for additional fishing quotas. Processing facilities with total output of 1.8 million metric tons (MT) a year are now under construction, including 530,000 MT of land-based facilities, and 1.27 million MT of vessel-based procesing facilities, to be completed by the end of 2023. At a press conference at the end of February, Shestakov has called for the expansion of the program to add another 470,000 MT of capacity.

The proposal will be considered by Russia's State Duma in late March. Russian Presidential Envoy to the Far Eastern Federal District Yuri Trutnev, who conducted a special meeting with fisheries of Russia’s Far East in early February seeking ways to tackle the mounting crisis, has backed the initiative. But he asked the government to make the approval process for investment projects easier than it is now.

“We [must] reduce the time needed for a fish plant project to get permissions, [and] provide land and benefits,” he told media. Combined, these steps will make it possible to build enough facilities to process all of Russia's domestic catch in just two years, he said.

The initiative will likely gain support from leaders of Russia's Far Eastern regions, who are eager to revive their economies amid Russia’s ongoing economic turmoil. Sakhalin Deputy Prime Minister Anton Zaitsev backed the plan in a meeting with Russian Federal Agency for Fisheries Deputy Head Vasily Sokolov, saying it will add jobs in his region.

But any expansion of the investment quota program will take time to achieve results, and short-term solutions remain elusive. The country's pollock season A is now well underway and Russian fishing vessels, after being deterred from making a full effort due to the problems with the Chinese market, have started to narrow the gap. Roughly 408,500 MT of pollock was caught in 2021 through 28 February, the agency said in a press release, 121,100 MT less than in the corresponding period of 2020, or down 22.9 percent. As of 14 February, the gap had been 28.6 percent.

But problems with Russia's inspection control regime remain.  Russian Federal Agency for Fisheries, joined by other watchdogs, announced they had discovered that some fishing companies were failing anti-COVID rule compliance. The agency’s press service reported that stricter measures are now under consideration and may be applied immediately. Those rules include an immediate halt to all fishing activity in case of violations of the rules and the introduction of a 14-day quarantine when changing crews. 

Photo courtesy of Russian Fishery Company