The fishing industry has traditionally lagged behind farming in Irish trade negotiations – and now, as part of the Brexit withdrawal deal, it has been hardest hit in the EU, losing €43 million worth of its annual quotas in British waters.
Killybegs man Karl McHugh, the chief executive of the Atlantic Dawn group and Ernst and Young Entrepreneur of the Year Finalist 2021, is in fighting mod.
He says “The industry is resilient and has faced many challenges over the years, we’re going to try and weather the storm. We have the motivation and enthusiasm and the commitment to keep going”.
Karl McHugh is in his office thinking of the fish he won’t be allowed to catch. As Chief Executive of the Atlantic Dawn company.
He has overseen the delivery of a new multimillion-euro trawler called Ella, and has three more new hybrid-propulsion fishing vessels being built in shipyards in Istanbul in Turkey.
But the Irish fishing industry has lost €43 million-worth of its annual quotas in British waters to British fishermen as part of the Brexit withdrawal deal.
McHugh says that this 15 per cent reduction in fishing quotas is threatening the long-term future of an industry that his family and many others had worked hard to build.
The nightmare scenario of Irish boats losing all access to British waters was avoided in the Brexit negotiations, with the EU retaining 75 per cent of its fishing quotas.
But a recently-published report from the seafood sector taskforce established by the government noted that Ireland was hardest hit in the EU by the sharing out of the quota loss. It said that Ireland’s 15 per cent quota reduction “compares unfavourably with other EU member states which, proportionally, contributed far less”. This, it said, had led to a “deep sense of grievance” in the Irish fishing industry.
The financial hit to the fishing sector is so severe that the government is to pay vessel owners to “tie up” their boats for a month to compensate them for the lack of quota. The move will be funded from Ireland’s €1 billion share of the EU’s Brexit Adjustment Fund, and could be worth up to €88,000 per month for larger boats. But it will be a temporary scheme lasting up to two years.
While McHugh did not rule out some of Atlantic Dawn’s boats availing of the scheme, he said that it would not cover the €43 million annual quota loss that will be felt by the Irish fishing industry “in perpetuity” unless other EU countries agree to hand over more of their quotas.
“Our first and top priority is there’s absolutely nothing that will replace trying to restore the fish and catching opportunities that we have lost. All other measures are short term,” he said.
The frustration in the industry was manifested by two fishing flotilla protests, one in Cork in May and another in Dublin in June. This type of action had not been seen for more than two decades.
There is intense political focus on the sector too with Charlie McConalogue, Minister for Agriculture and Fisheries, continuing his tour of fishing ports last week. At the same time, Pádraig MacLochlainn, the Sinn Féin fisheries spokesman, is on his own rival tour of the ports.
The Irish fishing industry lost out on valuable fishing rights in Irish waters when the country joined the EU in 1973 because government policy at the time was to concentrate on getting the maximum European funding for the much bigger agricultural sector. Now there are concerns that the government’s campaign to get other EU states to give up some of their fishing quotas to Irish boats will be lost in the wider diplomatic effort to sort out the row about the Northern Ireland protocol.
McConalogue will lead Ireland’s negotiations for the next review of the common fisheries policy, which will begin next year, finish in December 2022 and then apply until 2030. However, as he noted, the share of the fishing quotas between EU member states has remained largely unchanged since 1983. “It will be a challenge we will meet head on in terms of taking that battle to European level to try to get an improved situation,” he said.
It is not just the loss of fishing quotas that is exercising the fishing industry. There is also the change to the policing system for measuring fish catches for white fish and shellfish.
Inspectors from the state’s Sea Fisheries Protection Authority (SFPA) have long wanted to weigh fish catches themselves at the piers where boats land, rather than waiting until the catch is shipped to processing plants further away.
They have previously complained that fish factory weighing systems are “highly susceptible to manipulation”, and that there are “strong indications of widespread and serious under-reporting of catches”. Last April, the European Commission ordered that all fish catches must be weighed at the pier to ensure that there is no illegal overfishing by Irish boats.
Sean O’Donoghue, the Chief Executive of the Killybegs Fishermen’s Organisation (KFO), described this as a “second tsunami” for the industry, after the “first tsunami” of the Brexit quota loss. “We’re being held to ransom by this crazy thing of having to weigh your fish at the official point of landing. Can you imagine, with the recent temperatures we had, taking fish out of an ice box, putting them into a box that’s un-iced, weighing it and then putting them back in again?” he said.
Weighing fish at the point of landing is standard practice in many other EU countries, but their fish processing plants are located at the harbour. The fishing industry is incensed by the fact that the EU has ordered the change while refusing to publish its 2018 audit into fish landings here that prompted it.
Brendan Byrne, the chief executive of the Irish Fish Processors and Exporters Association (IFPEA), said it was a “big body blow” for the 4,500 people who worked full and part time in the fish processing sector.
“The fact that there has been a total lack of any political drive or political leadership to take this issue by the scruff of the neck and solve it means that you could potentially see multiple job losses across coastal communities,” he said. Byrne is a former Fianna Fáil councillor who served as mayor of Donegal and worked closely with Charlie McConalogue, who was also a Fianna Fáil councillor at the time.
He and other fishing sector representatives were unhappy with McConalogue saying that the issue of weighing fish at piers was a matter for the SFPA. He said that McConalogue had the power as Minister to give policy directions to the SFPA.
McConalogue visited fishers in Howth, Kilmore Quay, Dunmore East and Killybegs earlier this month. Last week, he was in the key Cork ports of Casteltownbere and Union Hall.
McConalogue said that the new control plan for landing fish at harbours was required because the European Commission had found that the current system was not sufficient to prevent manipulation.
“The SFPA has been engaging with sectoral representatives in relation to putting a new control plan in place, and it’s important that we do see one put back in place that gets European approval soon,” he said. The SFPA briefed fishing industry representatives last week and said it was planning to return to a system of weighing fish at factories for practical reasons, but with new checks to reassure the European Commission.
McConalogue is working on setting up the tie-up compensation scheme for whitefish boats from September to December, in line with the seafood task force recommendations. However, there are 23 larger boats fishing for valuable herring and mackerel for around 100 days per year, and the task force has said that having a tie-up scheme for them would be problematic.
McConalogue is waiting for further recommendations from the taskforce about how to compensate those boats, which have lost €25 million of the €43 million of fishing quotas. “I think that’s the appropriate way to do it, to have representatives of the fishing industry themselves very much informing and shaping that discussion,” he said.
Fianna Fáil traditionally had strong support from the fishing community at election time, but it is now being challenged aggressively by Sinn Féin. Pádraig MacLochlainn, the party’s fishing spokesman, arrived in Castletownbere and Union Hall last week a day before McConalogue. His promise to fishers was that his party would “stand up” for them by demanding bigger fish quotas in the common fisheries policy negotiations.
The Killybegs Harbour Development Group (KHDG) is an ambitious and hardworking group of companies working collaboratively within the Blue Economy and located in Killybegs, Co. Donegal. The KHDG is comprised of 20 companies and together they represent combined annual revenues in excess of €300 million with exports reflecting circa 95% of this turnover. These companies employ between 2 and 250 full time staff and collectively provide sustainable employment for more than 1,000 locals throughout the entire calendar year.
A spokesperson for the KHDG says the group is urgently seeking Government support for enabling infrastructure to support the current and future Blue Economy Marine Industries in Killybegs.
The spokesman stated “this is really about sustaining the vibrancy of our rural coastal community. The industry’s resilience and entrepreneurial spirit has been proven time and again, but political inaction or delay at this critical juncture will decimate the local economy and lead to significant job losses – we have created something unique in southwest Donegal but Government support funded from the Brexit Adjustment Reserve is now urgently needed to ensure we can sustain it’.
This critically important infrastructure requirement is highlighted in an independent Technical Study Report carried out by ByrneLooby Consultants which highlights two significant urgently required capital investment projects:
1. A new larger Syncrolift (Boatlift) with 90-meter lifting capacity requiring a capital investment of €35 million. This attractive capital investment provides opportunities for sustainable employment for 375 new full-time jobs resulting in a 9-year Economic Payback Period (EPP).
2. A 250-meter pier extension and breakwater requiring a total capital investment of €65 million.
The impact of this capital investment will support not only the current marine industries and sustain existing employment but will also provide enabling infrastructure for emerging marine industries and significant future employment opportunities in key growth sectors including offshore wind, renewable energies and bio-marine industries.
As a result of the dramatic and negative implications for Killybegs following the Brexit deal with reference to Fisheries, the KHDG, earnestly requests that the above-mentioned capital be included within the 2022 Budget Estimates and funded from the Brexit Adjustment Reserve (BAR) fund.
The Brexit Adjustment Reserve is a special one-off emergency instrument. It will be spent on, among other things, compensating businesses for lost trade, preserving jobs, helping fishing communities and building customs facilities on ports. The main condition for reimbursing authorities as well as private companies is that the costs incurred must be directly linked to countering the adverse effects of the UK’s withdrawal from the EU. The co-legislators agree that the reserve will cover in full or in part measures introduced by Member States between 01 January 2020 and 31 December 2023. This time frame considers the need for mitigating actions before the expiry of the transition period.
Brexit has an uneven impact on Member States, regions and sectors. Bearing this in mind, the co-legislators agreed that the allocation method should be based on three main factors.
1. The value of fish caught in the UK Exclusive Economic Zone (EEZ)
2. The importance of trade with the UK
3. The population of maritime border regions with the UK
Overall, €600 million will be allocated on the basis of the factor linked to fishing. €4.150 billion based on trade, and €250 million under the factor linked to maritime border regions. Ireland is expected to benefit from over €1 billion of the available €5.34 billion.
The direct implications following Brexit for Fisheries are catastrophic, particularly for the seafood sector in Killybegs, which accounts for 82% of the economic activity in Killybegs (GDP).
The disproportionate burden share has resulted in Ireland transferring €40 million out of the EU transfer of €184 million to the UK.
Mackerel represents €26 million out of this €40 million, which results in Donegal being the most negatively affected county with an 81% loss in tonnage and a 70% in overall value. The Brexit deal will have the following negative impact on Donegal with combined losses in both processing and ancillary industries equating to €675 million over a short 10-year period. The first sale losses are €270 million over 10 years, with an estimated 1,150 job losses.
The Killybegs Harbour Development Group strongly urges our Government to prioritise the two urgent investments highlighted by the independent Byrne-Looby Report, requesting that this capital investment is provided as part of the BAR funding which is specifically designed to cover losses from Brexit.
Some parts of this article were adapted from a previous article in the Sunday Business Post.