Director-General of DG MARE, Charlina Vitcheva has replied to the EAPO regarding the break-even price in the STEFC Economic Report

Director-General of DG MARE, Charlina Vitcheva has replied to the EAPO regarding the break-even price in the STEFC Economic Report

The Director-General of DG MARE, Charlina Vitcheva has replied to a letter sent to the European Association of Fish Producers Organisations (EAPO) regarding the break-even price in the STEFC Economic Report.

The EAPO had written to the head of DG MARE regarding the STEFC forecast over their estimated break0even process for European fisheries, which was a lot greater than expected.

The break-even price forecasted by Raúl Prellezo, principal researcher at the marine research division of AZTI, was given in a presentation at the Market Advisory Council on 19 September last, and which computed the break-even price at €1.17 per litre, which they called a step-increase from the 0.60 per litre used as the standard within the European Union.

The Director-General offer her clarification on the figures that were presented at the Council. She writes:

“First, this estimate is based on the gross profits indicator, as opposed to the net profits indicator. Gross profits are calculated by subtracting the operational costs from the revenues, and this shows the short-term private gains and therefore the short-term sustainability (viability) of the sector.

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“On the other hand, net profits are calculated by subtracting the capital costs from the gross profit. Capital costs comprise the depreciation of capital and opportunity cost of capital. This indicator is useful to inform on the long-term sustainability of the sector.

“Therefore, using the net profit indicators, the average break-even revenue for the overall EU fishing fleet is estimated in the region of EUR 0.6-0.7 per litre which coincides with the estimate that you referred to in your letter.

“Second, it should be noted that this estimate is an EU average of all fleet segments and fishing regions. If we consider specific fleet segments, there is a high variability for this indicator with marked differences across the small-scale coastal fleets, large-scale fleet and distant water fleets. These differences mirror the different cost structures and energy efficiency levels across the EU fleet segments.

“I am also grateful for your offer to produce additional data and your request for STECF to produce estimates of break-even revenue specific for each fleet segment level. During the planning for the 2023 AER, my team will again discuss with STECF a general prioritisation of the sections and topics to be included in the terms of reference. This planning will consider your request as well as requests from other ACs and stakeholders taking into account the available resources and policy needs for the 2023 AER.

“Furthermore, my team will continue to produce economic analysis and indicators to help to measure and monitor the progress on the economic sustainability and energy efficiency of the EU fishing industry.”

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Director-General responds to EAPO concerns over STEFC Report

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