Buy-back programs for fishing vessels in Norway

Abstract

In Norway, buy-back programs have been in force since 1979. Grants have been given to scrap fishing vessels or to sell them out of the country. These programs have been most successful for the purse seine fleet. Since the early 1970s the purse seine fishery has been controlled by boat licenses denominated as volume of cargo capacity. The government used the decommissioning grants in part to withdraw licenses and in part to stimulate accumulation of licenses on fewer boats, thus achieving both restructuring of the fleet and a reduction in total capacity. For many years the total cargo capacity of the fleet has remained roughly constant while the profits per vessel have increased. After a short break in the mid-1990s buy-backs were resumed. Since then the program has been mainly directed at smaller boats (shorter than 28 meters). The number of boats has declined substantially since the program was put into effect and the profitability of the fleet has trended upwards. The success of the buy-backs depends critically on measures being in place for preventing new boats from entering the fishery instead of the ones that have been removed. In the purse seine fishery this was accomplished through limiting the total cargo capacity of the fleet. For the so-called traditional vessels this has been accomplished through assigning fish quotas to certain groups of vessels and closing the entry to these groups. This scheme has now developed into individual vessel quotas (so called unit quotas) which can be bought and sold with the vessel. This system has greatly facilitated the restructuring of the vessel groups affected by this arrangement.