MercoPress. South Atlantic News Agency

No panic in Falklands as “disastrous” fishing season continues.

?There is absolutely no question of going to the British Government to ask for money, we are a million miles away from that??our objective is to retain internal self-government and internal self-sufficiency'. These were the defiant words of Falkland Islands Councillor Mike Summers in response to a possible revenue loss of many millions of pounds, from the normally lucrative Falklands fishing industry.

Since the Falklands Government, with the backing of Britain, officially declared a Fisheries Zone in 1985/6, revenue derived from license fees has allowed the Islands to become financially autonomous from Britain, in all aspects of daily life, except for the presence of around 1,500 British troops who defend the Islands.

Income from foreign fishing vessels, which are licensed to catch two types of ?Squid' in Falklands waters, generates around £23 millions ($US35 millions) annually. However this amount is reliant on regular levels of fish being caught, and worryingly for the Falklands population, the current season seems as if it will yield an all-time low in catch rates. According to the Director of Fisheries, John Barton, ?by mid-April we would expect to have caught at least 50,000 tones of squid, in a good season it could even reach 100,000, but to date, in 2002, the figure is less than 4,000 tonnes'.

Loligo Squid (Calamares), which is extremely popular in Europe generates around £6 millions annually in license fees, and catch rates of this species is, ?a little low, but not exceptional ?it is not too desperate', said Mr. Barton. While Councillor Summers noted that, ?last season huge catches of Loligo were recorded which caused a stockpile, and the price went down, so lower catches this year may not be such a bad thing'.

However it is the present non-existence of the more profitable species, ?Illex Argentinus', which mainly finds its way to the Far Eastern Countries, and which brings in annually £17 millions ($US25 millions) to the Falklands Government, that is causing the greatest concern. ?There are some vessels out there that have not caught a kilo of Illex so far this season', said Hamish Wylie, Manager of Seafish Ltd, which has nearly 300 Islander share-holders who are anxiously monitoring the ?rather desperate' situation. Seafish holds about one third of all the license allocations for vessels to catch Illex, and last year the company was able to pay a healthy dividend of 10p for each share. ?If the season does not improve then everyone will suffer. Not only the Government loses out, but the private sector too, including the local fishing companies and the fishing agencies who rely heavily on a busy trans-shipping season', said Mr. Wylie.

The pessimists, and these are reported to include several foreign fishing company executives, have been heard whispering that this so-far disastrous season could signal the end of the Falklands squid fishing industry, but John Barton does not hold that view, and he offered a possible scientific explanation. ?The Falklands current seems a bit weaker than it has been in some years, so there are differences in water temperatures, and early in the season where the Falklands current interacts with the warmer water, this sometimes results in eddying areas where the squid tends to congregate, and for whatever reason that does not seem to have happened this year'. He also was quick to point out that, ?there still seems to be squid on the high seas, and in the Argentine fishing zone, and squid do produce quite a lot of eggs, so you do not necessarily need too many squid to produce next years stock. Hopefully things will return to normal for the 2003 season. It is always possible with squid because they such volatile animals with huge fluctuations of biomass from year to year', he concluded.

The Falklands Financial Secretary Derek Howatt is well aware of the financial implications that may well occur as a result of a poor fishing season. ?The Government recognizes that the vessel owners will be in some difficulty and those who have arranged to pay by installments will be looking for some concessions and further deferred payments. It is possible that the Government will close the season early, in which case refunds will be arranged to those who have already paid. The situation is more serious for the future and if we have a repeat of the situation next year, then we will have to have a re-think on Government expenditure and do some re-phasing there'. Mr. Howatt went on to point out, ?The Government is not going to introduce any major financial restraints on spending and we are able to do that because of the healthy reserves we have put aside over the good years.

The reserves in all total a staggering £165 millions ($US 247.5 millions) - for a population of just 2,500 people - a figure which is the envy of most countries worldwide. The £165 millions has accrued as a result of the prudent management of revenue from the fishing industry over the past 15 years. £92 millions ($US 138 millions) sits comfortably, earning interest, in the Consolidated Fund, and is readily available if needed, in a crisis. The remaining £73 millions ($US 110 millions) is tied up in schemes such as Pension, Insurance and Currency funds. Ten years ago the total reserves totaled just £58 millions ($US 87 millions).

Mr. Howatt totally dismissed suggestions that a continuation of the present fishing ?crisis' could lead to redundancies in the Government work-force ? an unnecessary and totally ill-managed situation which occurred 10 years ago, when a major drop in fisheries license revenue was forecast. ?We learnt from mistakes made 10 years ago when there was over-reaction. Some people have mentioned a wage freeze but I haven't. It will be an issue that Councillors will be considering during the budget session next month. It is possible that as an interim measure we might defer some capital expenditure, but there are no plans to make major cutbacks in expenditure on Government services. If the down-turn in Illex revenue persists over several years then we would have to take a drastic view of the way the Government operates, but at the moment it is not necessary to introduce any panic measures'.

The local fishing company owners are understandably keeping a close and careful watch on the daily reports of fishing activity. Stewart Wallace, a director of the Fortuna Company was in no doubt that, ?it is going to be a desperate season for the Falkland Islands'. However he recalled that, ?a similar situation occurred in the early 1980's but the fishery recovered quickly the following year'. Mr. Wallace also feels that the Falklands Government has been ?too reliant' on revenue from fishing, and that, ?during the past 14 years more money should have been spent on fisheries related projects like an adequate port which offers considerable potential'.

Asked if an early closure to the Illex season might be imminent, John Barton warned that this was a distinct possibility. ?We will probably wait until the end of April to see if anything happens?.but if there is no sign of any improvement by that date then I think it is unlikely that there will be much caught this year'.

Councillor Summers is optimistic that things will improve and the Illex will congregate within the Falklands zone before the declared end of season on 15 June. ?The whole issue for us is what sort of attitude the Far Eastern companies have after this season'. The biggest danger is that they can't afford to come to the Falklands next year, or they can't afford to take the fishing risk'. Asked if the loss in revenue will greatly affect the 2002/3 Islands Government budget, he replied, 'It is bound to make us take a cautious approach, but again does depend on what happens in the next 4-5 weeks, because that will determine what the revenue is expected to be next year. If we anticipate significantly reduced income next year then we will have to take a more cautious approach'.

Patrick Watts - Port Stanley.