Address by Icelandic Minister of Fisheries, Árni M. Mathiesen, in Berlin, 23 February 2005
Address by Icelandic Minister of Fisheries, Árni M. Mathiesen, in Berlin, 23 February 2005
Liebe Gäste!
Sehr geehrte Damen und Herren!
Es ist mir ein großes Vergnügen, hier beim Bundesmarktverband der Fischwirtschaft einige Worte sagen zu dürfen.
Die Handelsbeziehungen zwischen Island und Deutschland waren für unsere Länder schon immer von großer Bedeutung. In den letzten Jahren war Deutschland der zweitgrößte Exportpartner Islands, und auch bei den Importen stehen deutsche Waren an der Spitze.
As I will elaborate on later in my address, Iceland's trade with Germany is currently very considerable, and we would naturally like to see it increase still more. The history of trade between our two nations, however, goes back a long way.
The years 1262-1264 marked a fateful turning point in the history of the Icelandic nation, when it agreed to the treaty which has since been named the “Old Covenant”. This made Icelanders subjects of the Norwegian king, they agreed to tax levies and other obligations, in return for which they were to be ensured certain rights. Iceland and Norway shared the same king, in other words this was a personal union under a common monarch. Iceland was an independent tributary of the Norwegian monarch but was not integrated into the Norwegian kingdom. Nonetheless, Icelanders gradually lost their independence. The Norwegian monarchy was flourishing at this time, and reached the peak of its power during the latter half of the 13th century. The kingdom was one of the largest in Europe in the 13th century, but its infrastructure seemed to fail surprisingly quickly. The last king of this early Norway who ruled in an independent country was Hákon Magnússon, who ruled until 1380.
When the Icelanders agreed to the Old Covenant, their own fleet had become sorely depleted and a key clause in the agreement was that the Norwegian king would have at least six ships sail to Iceland yearly. To begin with, Norwegian merchants were not especially enthused about undertaking these trading voyages, since there was not much profit to be made. During the early medieval period of the Icelandic commonwealth, agriculture had complete priority and Icelanders thus were extremely conservative in maintaining homespun cloth as their principal export. But after 1300 this began to change, as fishing increased and changes were gradually set in motion; interest in trade with Iceland grew sharply. It was trade in stockfish which was the key factor at this time, and now the Germans entered the picture.
As early as 1250, a trade agreement was concluded between Norway and Lübeck. This was the first trade agreement concluded by a Hansastadt with an independent nation. The power of die Hanse, the Hanseatic League, grew steadily in Norway and in 1330 a Hansekontor or trade office was established in Bergen, on the west coast of Norway. From this time onwards, it was primarily merchants from Bergen who sailed to Iceland to trade. From 1350 until 1412 the city had a monopoly on trade with Iceland. There was no trading town in Iceland. Bergen was the transit harbour for the goods primarily traded in the Norwegian realm. Die Hanse Kaufleute had a solid base there, as we can still see today in the fine buildings of Bryggen, or the Docks, in Bergen. The fact that Hanseatic merchants had a base in Bergen made a vital difference to historical development, since they had connections with the countries south of the Baltic which had plenty of grain for sale. This meant that the Norwegian merchants trading with Iceland could purchase grain from them at favourable prices, which they then sold for stockfish, which had become a prime Icelandic export.
As the years passed Norwegian power waned and the influence of the English grew, to such an extent that we often refer to this as the “English era” in Icelandic history. The first mention of English fishermen in Icelandic waters is from 1412 and the first recorded landing by an English merchant vessel in 1413. Trade with the English flourished for quite some time, until disruptive conflicts arose, which we need not go into here. The long and the short of it was that in 1466 all permission for English mercantile vessels to sail to Iceland was revoked. Iceland had now come under the power of the Danes, who used their control of the Baltic sailing route through the Sound, Øresund, and their connections with die Hanse to best advantage. The ensuing period has often been referred to as the “German era”. Merchants from Hamburg began sailing to Iceland soon afterwards, in 1468 and, despite perennial and often violent clashes with the English during this period, the German influence dominated. It was not merely a question of trade but also a variety of other cultural influences.
One major indication of this is the printing press purchased by the Bishop of Hólar Jón Arason from Hamburg around 1530. His counterpart in South Iceland, Bishop Ögmundur Pálsson in Skálholt acquired a so-called “Orgelwerk” from Hamburg. These connections were also of major significance in spreading the Reformation to Iceland. Iceland’;s first Lutheran bishop, Gissur Einarsson, studied in Hamburg. Many other connections could be named, but the German influence eventually came to an end. Following the Reformation, the Danes sought to increase their power in Iceland. Danish Monopoly trade with Iceland was proclaimed in 1602, although the Hamburg traders still persevered for awhile. The last vessel from Hamburg sailed home in 1628, marking the end of this remarkable but unruly period in Icelandic history. The Hansa connection was maintained through their importance as trade partners with Danish merchants.
In more recent times, trade with Germans has been significant, although there were periods when this was difficult or even impossible. But there has been no repeat of the “German era”. Today exports of Icelandic marine products go primarily to continental Europe, the UK and the US. Germany is an important market, with a value of over EUR 80 million, which is a fair sum for a small nation. It is also a very varied market; this past year over 160 different types of products were exported to Germany. Based on last year’;s export figures, redfish was the largest single export, providing 34% of export revenues. This is followed by herring and herring products, which account for 17% and shrimp which are around 11% of exports. What is perhaps unusual about these figures is the low proportion of cod, which accounts for only around 8% of the value of marine products exported to Germany. As you perhaps are aware, cod is our most important export species. It is caught in great quantity in Iceland, with this year’;s catch quota 205,000 tonnes. It is also a very high-priced fish, which makes it the most important species in Icelandic waters.
Fish processing has undergone wide-reaching and rapid changes in recent years. Buyers grow ever more demanding, as witnessed by the increased and altered requirements concerning quality, traceability, grading and content analysis.
Production has to be continually modified to meet the new demands of buyers and respond quickly to market volatility. Expertise is the key to success in marketing and sale of marine products. Extensive development has taken place in exporting fresh fish from Iceland, which has made a major difference in the face of the changed competitive environment and the advent of Chinese products on European markets.
In many respects the export success has been achieved thanks to the organisation and infrastructure of the fisheries industry in Iceland. Fisheries companies are primarily business-driven. It is the initiative and determination shown by the companies themselves which has brought us to where we are today. At the same time, the authorities have built up a solid fisheries management system, with its point of departure and chief goal to ensure sustainable exploitation of the resource. This is, of course, a prerequisite for long-term utilisation.
However, it is not only market demands which are becoming ever more complex, but also official requirements both in Iceland and abroad. Added to these are actions and campaigns by various extremist groups, who often pay scant heed to fact and oversimplify the issues, taking advantage of people’;s desire to make a positive contribution to natural and environmental protection. They are most successful in getting people to support issues which are so far removed that the consequences do not affect them. Fisheries is, whether we like it or not, in this position in today’;s urban, hi-tech society. Endeavours by such organisations which are not based on a solid foundation generally bring limited results. They do, however, mean plenty of work for those who have to defend against their accusations. Those persons who serve the interest of Iceland and fisheries in general have, in recent years, devoted increasing efforts to making the facts known, both internationally and domestically, in their publicity efforts.
People who make their livelihood from fisheries must always be prepared for unexpected action from this direction, which could otherwise be very damaging for revenues from marine products. This makes it necessary to have access to effective and well-conceived information from recognised sources, and to be able to disseminate this information rapidly and securely. It can make all the difference in gaining access to world markets. Iceland was made acutely aware of this when a ban was imposed on importation of fishmeal used for animal feeds to the countries of the European Union. In this instance it was possible to mitigate the impact considerably by having reliable information at the ready. We now hope that, in view of the fact that testing and analysis of the meal from animal sources used in feeds has been substantially improved, the EU Commission will cancel its prohibition. This is an uphill battle, however, against so-called public opinion as exemplified by the views of several EU parliamentarians that the ban should not be revoked because it is not “normal” for cows to eat fish! To my mind such comments show ignorance of modern animal feeding practices.
Nonetheless, it can make all the difference for companies dealing in marine products to have appropriate information available at the right moment.
But it is not just governmental actions, or campaigns by environmental groups, which can have a major impact on fish markets. Large corporations increasingly set their own requirements concerning food safety. We must also be prepared for these to clash with the current demands made by public authorities. This presents a threat but also definitely a major opportunity. Multinationals such as Carrefour, McDonalds and Unilever have begun to demand of their own accord that the fish they purchase must be obtained from stocks which are sustainably utilised. My Ministry personnel have had to provide explanations as to why we have exceeded the catch quotas decided upon at the beginning of each fishing year. Companies also make high demands concerning food safety. All of these factors are linked together and directly affect the marketing of marine products.
If we fail to have suitable information and answers ready when the time comes, it can cost us dearly, of this the Ministry and related institutions are very well aware.
The Ministry of Fisheries has carried out a special project in measuring the quantity of undesirable substances in marine products. This information is intended not least to assist marketers of marine products, since it shows how our products comply with the limits set in Iceland, in the EU and in other trading partner countries, about which the authorities and product sellers need to be able to inform their buyers and consumers.
The results of these measurements have now been published on the Internet and can be accessed through the website www.fisheries.is.
Code of Conduct
Many parties involved in or connected to fisheries regard it as necessary to draft a fisheries code of conduct. The ministry of Fisheries has endorsed this viewpoint and decided several years ago to undertake the project. Its completion, however, has been delayed due to work on policy connected with ecolabelling. In view of developments in ecolabelling, where wholesalers, retail and restaurant chains have themselves adopted their own labels and standards, it is important to take up once more work on a fisheries code of conduct. The Ministry has begun by taking up where we left off in drafting such a code. It will be based on the FAO Code of Conduct for Responsible Fisheries, adopted by the UN Food and Agriculture Organisation in 1995. The FAO preface states that it “establishes principles and standards applicable to the conservation, management and development of all fisheries ... to ensure sustainable exploitation of aquatic living resources in harmony with the environment.”
I think it is important for fisheries in Iceland to agree on a code for the sector, based on the FAO Code of Conduct, and taking the circumstances and unique situation of Iceland into consideration. For this purpose we have a common forum, the Fisheries Association of Iceland (Fiskifélag Íslands). By so doing, the sector itself can adopt a position on a large number of important issues which the Code should cover, and which are increasingly the subject of discussion within fisheries throughout the world.
A Code of Conduct for Icelandic fisheries, adopted by the sector as a whole, would strengthen Iceland’;s position in discussions of marine issues. It would ensure to an even greater extent responsible treatment of marine resources and thus strengthen the fisheries sector.
Fisheries in an International Context
For centuries, fisheries has been the most important export sector in Iceland, and will remain so in the foreseeable future. Its relative importance will, however, continue to decline, which is a positive trend in view of the fact that having our eggs in more than one basket should improve the country’;s economic stability. While international research gives a fairly good picture of the overall situation in Iceland, it does not present the situation in fisheries very clearly.
The operation of fisheries enterprises becomes steadily more complex, partly as a result of globalisation. Company managers must always survey their own operations in a wider context. Competition with other countries is not merely a question of several neighbouring countries, but rather the world marked has become our home market. This makes it more important than ever before not to jeopardise the possibility of Icelandic fisheries companies to compete successfully. The Icelandic government will not follow the practices of other countries in subsidising or otherwise providing aid to the sector. The strength of Icelandic fisheries lies in not having taken this route. Having to operate on a commercially viable basis has strengthened the sector in competing with others. It gives it an advantage which may not necessarily remain in the future, as a growing number of countries are reviewing their fisheries management system with an eye to subjecting this sector to traditional market practices. These changes will mean stiffer competition for fisheries.
In order to better appreciate our own position in comparison to other countries in both the shorter and longer term, the Ministry is reviewing our competitiveness in fisheries. This is necessary in order to spotlight those aspects of prime importance for our fisheries to not only stay competitive but to increase their competitive advantage. We also need to show how competition in fisheries affects other sectors of the food and feed industries. It is my hope that this project will conclude next year.