“The Russians are coming” is a phrase attributed to United States Secretary of Defense James Forrestal in 1949, at the beginning of the Cold War.
It is highly doubtful Forrestal was referring to modern-day Russian seafood when he allegedly uttered those famous words. He probably had something else on his mind.
And speaking of global politics, some might argue now that Russia should no longer politically be considered a world superpower in this day and age. As politicos and academics argue this point back and forth, one thing is certain, Russia is making its presence known now on a new global front — the international seafood export stage.
The fishery has always been important to Russia and all of its prior incarnations. The coastline of the Russian Federation is the fourth longest in the world, after Canada, Greenland and Indonesia. The Russian fishing industry has an exclusive economic zone (EEZ) of 7.6-million km², including access to 12 seas in three oceans, together with the land-locked Caspian Sea and more than two million rivers.
According to the Food and Agriculture Organization of the United Nations (FAO), Russia’s total capture production in 2017 was 4.87 million tonnes, the highest level reached since 1991. For aquaculture production, the Russian Federation reached an all-time high level of 185,000 tonnes in 2017, which was more than double of that in 2000. The Russian fishing fleet was estimated at 1,534 large fishing vessels (2017), all over 12 metres, with smaller boats excluded from the estimate.
In the past, the main focus of the Russian fishery was to supply its domestic markets. But suddenly, the former Soviet Union is touting itself as an emerging, global seafood exporter. So, what changed? In short, it has been the God-almighty dollar.
First, a brief history lesson.
In 1991, during the final days of the former USSR, the various member soviet republics saw the need for regulation and stabilization of trade. The representatives ratified the Law on Competition and Limitation of Monopolistic Activity in Goods Market in March 1991, which evolved into anti-monopoly policies within Russia after secession from the USSR.
Later, in 2006, The Law on the Protection of Competition was legislated to translate those policies back into law. Under this law, the Russian Antitrust Service (RAS) was formed to control the execution of antitrust and competition within the country, including that of the fishery.
The RAS has recently been proposing changes to the mechanism of Russian fishing quota distribution, leading to a major overhaul of how the country manages its seafood sector.
Since 2004, Russian journalist Ivan Stupachenko explained that “most quotas in Russia have been allocated on the so-called historic principle, which allocates quota based on the average of a company’s previous years’ catches, provided it fulfills all of its tax obligations, engages in sustainable fishing practices and uses its entire quota. The system was reimplemented for another 15 years in 2018, meaning if nothing changes, it will be in place through 2034. However, the RAS has proposed replacing its system of awarding fishing quotas based on historic catch averages with auctions, similar to the changes made in recent years to Russia’s crab fishery. In 2019, the Russian government moved 50 per cent of its crab quota into what it called investment auctions, which awarded quota in lots to the highest bidder, provided they build a new crab vessel at a Russian shipyard.”
RAS Director Igor Artemyev has emerged as a leading advocate in favor of moving all of Russia’s quotas into auctions, stating that it will increase transparency and federal income, not to mention spark a shipbuilding bonanza of the large, industrial fishing vessels needed for such expanded fisheries.
And it appears that the Russian government and President Vladimir Putin are both liking the results.
It has been estimated that the Russian government earned RUB 142 billion (USD 1.88 billion, EUR 1.71 billion) through the crab quota auctions and auctions for the remainder of Russia’s total allowable catch could bring in an additional RUB 8 trillion (USD 106.8 billion, EUR 96.5 billion) each year.
Not so long ago, the only worry those in this neck of the woods had about the Russians was the question of world hockey dominance and/or possibly them destroying the planet 10 times over with nuclear weapons.
But, with the rapid, Moscow-backed expansion of the Russian fishing industry, notably snow crab, the Russians are once again a real export market threat. Instead of skating and puck passing skills, we have to worry about traditional Canadian markets being flooded with Russian crab from its new industrial fleets, which will ultimately drive down the price fishermen will be receiving here for their hard-earned catches.
And where will it end?
According to Stupachenko, “Russia plans to increase exports of high added-value fish products and seafood this year, with the aim to compensate losses associated with the reduction of supplies of traditional pollock to the Asian market. For this purpose, particular attention will be on a search for alternative markets, where sales margins of Russian fish exporters could be higher than those in Asia. One of such markets could be the market of the U.S., where since 2013, the supplies of Russian fish have already increased from US$326 million up to US$550 million in value terms.”
If the Russian fishing industry is so bold as to target new markets in the U.S., right under the nose of President Donald Trump, who knows what is next?
With the Russians, it is just not about hockey dominance anymore.
