COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 22.07.1997 
COM(97) 388 final 
REPORT ON THE APPLICATION OF THE SYSTEM OF COMPENSATION FOR 
THE ADDITIONAL COSTS INCURRED IN THE MARKETING OF CERTAIN 
FISHERY PRODUCTS FROM THE AZORES, MADEIRA, THE CANARY ISLANDS 
AND THE FRENCH DEPARTMENT OF GUIANA AS A RESULT OF THEIR VERY 
REMOTE LOCATION 
(presented by the Commission) 

CONTENTS 
PREFACE 
Introduction 3 
Specific case of support for marketing certain fishery products 4 
Subject of the present report 5 
Application of the system in the regions concerned 
I. THE AZORES 6 
II. MADEIRA 16 
III. THE CANARY ISLANDS 25 
IV. GUIANA 40 
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PREFACE 
Introduction 
By its Decisions 89/687/EEC1, 91/314/EEC2and 91/315/EEC3 the Council set up programmes 
of options specific to the remote and insular nature of the outermost regions. These have 
provided an appropriate framework for the adoption of measures in the various sectors of 
activity that require special attention as regards increasing Community support to reduce the 
permanent constraints suffered by these regions (POSEIDOM, POSEICAN and 
POSEIMA Programmes). 
The programmes aim to take account, in the application of Community policies, of the special 
characteristics and handicaps of these regions resulting from their remoteness and isolation. 
Their economic dependence on a few products, the smallness of their markets and their 
twofold nature as both Community regions and territories situated in a developing country 
environment determine the economic and social situation of these regions. 
Symbols of Community solidarity with its most distant regions and essential for their 
integration in the internal market, the programmes were intended as reference frameworks for 
the application of Community policies in these regions. 
The Joint Declaration on the Outermost Regions of the Community annexed to the Treaty on 
European Union acknowledges that special measures have to be adopted to assist these 
regions in order that they can achieve the average economic and social level of the 
Community4. The Council has adopted a series of programmes covering various sectors of 
economic activity, including fisheries, which plays a particularly important role in the socio­
economic development of these regions. 
l OJNo L 399 of 30 December 1989. 
OJNoL 171 of 29 June 1991. 
OJNoL171 of 29 June 1991. 
The full text of the Declaration is as follows: 
"The Conference acknowledges that the outermost regions of the Community (the French overseas 
departments, Azores and Madeira and Canary Islands) suffer from major structural backwardness 
compounded by several phenomena (remoteness, island status, small size, difficult topography and 
climate, economic dependence on a few products), the permanence and combination of which severely 
restrain their economic and social development. 
It considers that, while the provisions of the Treaty establishing the European Community and 
secondary legislation apply automatically to outermost regions, it is nonetheless possible to adopt 
specific measures to assist them inasmuch and as long as there is an objective need to take such 
measures with a view to the economic and social development of those regions. Such measures should 
have their aim both the completion of the internal market and a recognition of the regional reality to 
enable the outermost regions to achieve the average economic and social level of the Community". 
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Several factors, in particular the extent of the exclusive economic zones and the jobs created 
by the activities related to this sector justify an approach at Community level which takes 
account of both the importance of the sector and the constraints resulting from the remoteness 
of these regions. 
In this context, the programmes of specific options constitute an appropriate framework for 
the implementation of a set of measures which allow these regions to be gradually integrated 
into the dynamics of the internal market and to enjoy the advantages of their economies 
reaching levels of development closer to those of the rest of the Community. 
Specific case of support for marketing certain fisheries products 
The absence of regional markets and the additional transport costs already referred to 
constitute permanent constraints regarding access to markets. This is a situation common to 
the three outermost regions. 
It was precisely for this reason that the Community decided to take action to assist "the 
producers in these regions regarding the marketing of fishery products. A system was 
introduced in 19925, which met with considerable success. It was extended in 1994 by 
Council Regulation (EC) No 1503/946, which provided support for the marketing of the 
species most concerned by making possible external marketing activities in conditions 
comparable to those of economic operators in mainland Europe. 
In the regions of the Azores and Madeira, local canning industries account for a volume of 
production equivalent to almost half of exports and employ a sizeable proportion of the 
working population. Nevertheless, the specific conditions of these regions resulting from 
their small size and geographical situation mean additional production and marketing costs, 
which weaken their competitive position compared with similar activities in mainland Europe. 
Consequently, the levels of pay in the sector are much lower than the Community averages. 
The factors determining this lie in the industry's operating conditions: additional transport 
costs and financial charges resulting from the capitalisation of the factors of production (in 
particular salt, oil and cans); additional energy costs and the cost of transport insurance. The 
situation is the same in the Canary Islands, where the additional costs are also linked to raw 
materials, energy and transport. This is also true of the department of Guiana where, in 
addition to the above-mentioned factors, there are special circumstances which worsen the 
operating conditions (e.g. absence of maritime credit for financial charges, need to create large 
stocks of spare parts for ships, difference in the purchase price of ships in continental 
shipyards, given the absence of local supply, and competition of exports from certain 
countries in South and Central America, which enjoy advantageous conditions under 
Community legislation). This situation cannot be overcome in the short term. It was 
therefore necessary to follow-up the measures undertaken with a legal instrument to introduce 
a stable reference framework for the economic operators concerned. This took the form of 
Commission Decision of 30 July 1992 on the grant of Community aid for certain specific measures 
implementing the programme of options specific to the remote and insular nature of Madeira and the 
Azores (Poseima). OJ No L 248 of 28 August 1992. 
OJNoL162of30June 1994. 
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Council Regulation (EC) No 2337/957, which provides for the continuation of the system until 
31 December 1997. 
Subject of the present report 
In accordance with Article 6 of Council Regulation (EC) No 2337/95 of 2 October 1995 
establishing a system of compensation for the additional costs incurred in the marketing of 
certain fishery products from the Azores, Madeira, the Canary Islands and the French 
department of Guiana as a result of their very remote location , the Commission has to submit 
to the European Parliament, the Council, the Economic and Social Committee and the 
Committee of the Regions a report on the application of the measures provided for 
accompanied by the appropriate proposals if necessary. 
In accordance with that provision, the present report provides a description of the results of 
the application of the system of support for marketing certain species produced in the regions 
concerned (tuna in the Azores and Madeira; tuna, sardines and mackerel'm the Canary 
Islands; prawns in Guiana). It also reports on the constraints currently faced by the fishery 
sector regarding the species which are marketed in significant quantities and outlines the 
prospects for Community action in this field. 
OJNo L 236 of 5 October 1995. 
See footnote 7. 
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APPLICATION OF THF SYSTEM IN THE REGIONS CONCERNED 
1. AZORES 
1 General economic situation 
The Azores archipelago consists of nine islands in three groups - Western (Flores and Corvo), 
Central (Terceira, Graciosa, Sâo Jorge, Pico and Faial) and Eastern (Sâo Miguel and Santa 
Maria) - spread along a WNW-ESE band measuring approximately 630 km by 130 km 
between 39° 43' 23" and 36° 55' 43" N, and 24° 46' 15" and 31° 16' 24" W in the southern 
part of Division X of the International Council for the Exploration of the Sea (ICES). 
The Azores are a geographically isolated region, lying 1600 km from the coast of mainland 
Portugal and 4 000 km from the Eastern coast of the United States. 
This isolation is further compounded by the marked dispersion of the islands themselves. Faial 
and Pico are the closest to each other, some 6 km apart, while Santa Maria and Corvo are the 
most distant, at a distance of almost 630 km. 
The islands' dispersion and isolation from others and from the continents have led to the 
definition of an extensive Exclusive Economic Zone (EEZ) of approximately 938 000 km2. 
Population and employment 
The population of the Azores, in marked decline since 1960, totalled 237 795 inhabitants as of 
31 December 1991 (the date of the last census). At the end of 1994, the resident population 
was estimated at approximately 240 520. 
The population of working age in the Region at the end of the third quarter of 1996 was 
approximately 94 121, 89 184 of whom were in employment. 
The unemployment rate in the Region in the third quarter of 1996 was 5.2% of the active 
population. 
As a result of the considerable distance from the continents, geographical and population 
constraints and limited Gross Domestic Product, the islands' economy has all the essential 
features of small island economies. 
The concentration/specialisation of production is focused on primary-sector products, some of 
which undergo industrial processing. The primary sector clearly exhibits the best levels of 
productivity. 
Its island location gives the Region an Exclusive Economic Zone of approximately 938 000 
km2. The Region has to make the best use of this economic potential by efficient and rational 
exploitation of the sea's resources for its own supply and for processing and sale beyond its 
shores. 
2. The importance of the fisheries sector in the region 
Two sorts of fishing are pursued in the Region. On the one hand, thunidae are almost entirely 
exploited for industrial canning and export to mainland Portugal and some other European 
countries; on the other hand, various pelagic and demersal species are fished on a much 
smaller scale for consumption on the islands or export fresh or refrigerated. 
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The balance of trade in fishery products shows a marked surplus in the regions' favour which 
has grown. Exports of fishery products accounted for almost 60% of the Region's total 
exports, and Italy is the Number-one customer. 
Balance of trade (ESC 000) 
PRODUCTS 
Fish, molluscs 
and crustaceans 
Food industry 
products 
(canned tuna) 
Other products(*> 
TOTAL 1994 
Imp. 
486 922 
253 820 
63 
740 805 Exp. 
756 031 
2.203 308 
0 
2 959 339 Balance 
269 109 
1 949 488 
-63 
2 218 534 1995 
Imp. 
618 893 
2 435 
621 328 Exp. 
2 015 619 
1 549 646 
0-
3 565 265 Balance 
1 396 726 
1549 646 
-2 435 
2 943 937 
External trade 
PRODUCTS 
Fish, molluscs 
crustaceans and canned 
products 
Other products 
TOTAL IMPORTS 
1989 
ESC 000 
234 500 
9 637 300 
9 871 800 % 
2.4% 
97.6% 
100.0% 1994 
ESC 000 
740 805 
13 432 143 
14 172 948 % 
5.2% 
94.8% 
100.0% EXPORTS 
1989 
ESC 000 
"2 413 000 
1 889 000 
4 302 000 % 
56.1% 
43.9% 
100.0% 1994 
ESC 000 
2 959 339 
2 105 207 
5 064 546 % 
58.4% 
41.6% 
100.0% 
General description of the fisheries sector 
Fishing areas 
Fishing in the Azores concentrates on exploiting fishing grounds less than 500 m deep 
(inshore and banks), usually designated as potential fishing areas, which yield virtually all the 
demersal and the bulk of the pelagic species, and the thunidae in particular, which are landed 
in the ports of the Region. 
(*) Including the import of fishing vessels 
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As regards the potential of the Azores Exclusive Economic Zone (EEZ), the following factors 
should be borne in mind: 
The wealth of the Azores EEZ is disproportionately small for its scale, because it is 
conditioned by a series of factors which greatly reduce its potential (particularly by 
comparison with the areas of the continental shelf): 
- the lack of a continental shelf; 
- the existence of fishing banks scattered across the ocean plateau but separated by vast 
depths which are an obstacle to the migration of demersal species and the probable 
existence of sub-stocks; 
- the morphology of the ocean bedr rugged and, typically, deep, determines the conditions of 
the ecosystem to the disadvantage of the region; 
- the geographical situation of the archipelago exposes the area to the effects of natural 
imbalances; 
- -the movement of masses of Mediterranean waters makes for an unstable environment; 
- the low primary productivity of this zone in relation to the continental shelf. 
- The exploitation of the wealth of the Azores EEZ by its fishermen could, however, be 
greatly increased by modernising the various components of the sector. 
Fishing fleet 
Vessel types and their characteristics 
The Region's fleet is still inadequate in view of the area of the EEZ. 
At present, the fleet numbers approximately 1 747 vessels totalling some 13 063 GRT. 
The Azores fishing fleet - tonnage and engine power 
AREA 
AZORES 
TOTAL Coastal zone 
and Community 
waters 
International 
and third-
country waters Multi­
purpose 
Deep-sea ZONE 
Number 
1 745 
2 
1747 SEGMENT 
GRT 
11480 
1 583 
13 063 SITUATION AS 
OF 30.06.96 
Engine power 
(kW) 
44 766 
2 354 
47120 
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The vast majority are small craft with engines of less than 75 kW which fish small demersal 
species, scad and chub mackerel along the coasts or in inshore waters, landing catches of the 
order of a few hundred kilos, and which therefore pursue what is designated as "local fishing". 
There are some 268 slightly larger craft with greater autonomy, classed as "inshore fishing 
vessels". They generally fish close to the coast, but the larger vessels in this category work 
grounds located within the 200-mile zone, where they fish thunidae and other migratory 
pelagic and demersal species. 
The tuna fleet currently numbers 34 vessels, 15 of which are independently-owned while 19 
are directly or indirectly linked to canning firms. Most of these vessels have chilled water 
facilities for storing fish, permitting trips of 8 consecutive days. 
Main fishing gear 
The local and inshore fishing vessels use a great variety of fishing gear, often in combinations. 
These can be divided into three categories: lines, nets and traps. 
Fishing with lines, surrounding nets, gill nets and traps is practised all along the coast. Drift 
lines are also in evidence, albeit in specific areas. 
The gear used varies with specific techniques: e.g. veranda netting is especially geared to tuna 
fishing, and trolling to demersal species like hake, wreckfish, seabream, boca negra and pargo 
bream. 
Employment 
The fishing fleet provides direct employment for some 4 400 seamen, including fishermen and 
other categories. Of the economically active population of 87 888 in 1995, an estimated 5% 
are directly linked to fishing. 
Most of the fishermen are engaged in local fishing, often part-time. Virtually all the inshore 
fishermen are full-time professionals. 
Registered fishermen 
YEAR 
NUMBER 1992 
4 436 1993 
4 433 1994 
m — 
4 081 1995 
4 420 
Considerable efforts have been brought to bear on vocational training in recent years. 
Fishing ports 
Scale and location 
The geographical dispersion of the Azores archipelago means that there are fishing ports all 
along the coast. 
There are currently 49 working ports, most of them small or extremely small. Only three -
Ponta Delgada (Doca), Santa Cruz (Horta) and Praia da Vitôria (still under construction) -
provide a permanent safe birth for large-draught vessels, behind man-made breakwaters. 
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The fisheries cannot be expected to develop in the absence of working ports with the requisite 
facilities. There is therefore a pressing need for very considerable investment in port 
infrastructures. 
Main species landed 
The fishing of thunidae and similar species is crucial in the Azores, in that these account for 
approximately 57% of the species landed. Catches have oscillated over the years, due to 
abnormal environmental conditions in the North Atlantic, as shown in the following table. 
The Azores are also one of the regions where most tuna is fished in Community waters. 
Demersal species account for 26% of fresh fish, the commonest being hake, boca negra, 
wreckfish, seabream, kitefin shark, peixâo and scabbard fish, with landings of the order of 
3 200 tonnes. By far the commonest small pelagic species is the horse mackerel, 
approximately 2 000 tonnes of which are landed every year. 
Of molluscs and crustaceans only squid are significant, and 250 tonnes were landed in 1995. 
Fish landings in the Azores 
Unit: Ton. 
SPECIES 
TUNA 
Bigeye tuna 
Bonito 
Long-fmned tuna 
Other 
MOLLUSCS 
Squid 
Other 
CRUSTACEANS 
OTHER 
Hake 
Boca Negra 
Mackerel 
Wreckfish 
Horse mackerel 
Conger 
Swordfish 
Seabream 
Kitefin shark (Gata) 
Peixâo 
Scabbard fish 
Other 
TOTAL 1992 
6 216 
2 439 
2 554 
1 209 
14 
89 
76 
13 
42 
7 550 
442 
575 
304 
234 
1 255 
339 
344 
611 
761 
431 
255 
1 998 
13 897 1993 
10 676 
4 158 
2 243 
4 275 
0 
117 
108 
9 
34 
7 808 
327 
652 
265 
309 
1739 
320 
404 
357 
591 
430 
264 
2 149 
18 635 1994 
6 591 
1 895 
3 360 
1 335 
1 
124 
113 
10 
22 
8 012 
284 
698 
353 
428 
1781 
312 
288 
388 
309 
520 
373 
2 278 
14 749 1995 
11 689 
4915 
592 
6 183 
0 
261 
250 
11 
24 
8 482 
290 
581 
474 
240 
1 820 
266 
461 
450 
321 
573 
778 
2 229 
20 457 
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Cold stores 
There are three public cold stores in operation in the Azores, in the ports of Vila do Porto (on 
Santa Maria), Santa Cruz (on Faial) and Madalena (on Pico). 
Virtually all the fish frozen in these stores supplies the regional industry. 
Processing and marketing 
Processing 
In the Azores, processing of fishery products means, virtually exclusively, tuna canning. 
Set up in the Archipelago around 60 years ago, the tuna canning industry today comprises four 
firms which own five factories located on four different islands - Sâo Miguel, Sâo Jorge, Pico 
and Faial. 
These firms compete on the national and international market on specific conditions dictated 
by the special features of the activity pursued in the Azores: 
- the raw materials are seasonal and can be caught close to the factories. Virtually all of the 
output is absorbed by local industry; 
- the other physical factors of production (oils, salt, packaging, etc.) are more expensive due 
to the costs of transport and storage over long periods; 
- power is expensive, and the supply is irregular, necessitating the installation of 
autonomous generators, which are costly and tie up capital which could be better put to use 
in direct production. 
The following table summarises the quantity of fish used by the canning industry in the 
Region over the last five years: 
Quantity offish processed 
1992 
9 985 697 1993 
9 509 682 1994 
7 568 760 1995 
8 592 646 1996 
8 597 635 
Increased production capacity and the modernisation of some factories has enabled the 
canning companies to maintain their exports. High-quality canned products from the Azores 
easily find an external market, primarily in Italy. 
Labour-intensive by its very nature, tuna processing is a major employer in the Region, and 
more particularly a large employer of female labour. 
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Marketine 
The marketing sector consists of small and medium-sized businesses which essentially export 
fresh or refrigerated fish and canned tuna. 
Other than thunidae, which are virtually entirely used for canning in Azorean factories (albeit 
with the exception of the long-fmned tuna, all of which is exported), the bulk of the fish 
caught in the waters off the Azores, particularly that with the greatest commercial value, is 
sold on the national and intentional market. 
Prospects for the development of the fleet and catches 
The Azorean fishing fleet has seen changes, as new vessels are commissioned and others laid 
up. 
This effort is intended to provide the Region with vessels which can guarantee an 
improvement in the conditions in which fish are stored on board and rationally exploit the 
sea's resources for own supply and the external market. 
Rising numbers of working vessels obviously increase the volume of catches and landings \A 
the Region. Catches are forecast to progress as follows: 
Changes in catches 
DEMERSAL 
THUNIDAE 
TOTAL 1997 
9 000 
11 500 
20 500 1998 
9 500 
12 500 
22 000 1999 
10 000 
13 500 
23 500 2000 
10 500 
14 500 
25 000 
The effectiveness of application of the compensation system 
The situation before the system was introduced 
Council Decision No 91/315/EEC of 26 June 1991 set up a programme of options specific to 
the remote and insular nature of Madeira and the Azores. 
Subsequently, by Decision No 92/448/EEC, in granting financial support for specific 
measures to overcome the remoteness of the Azores and Madeira, the Commission recognised 
the difficulties faced by the two archipelagos which prevented them from fully participating in 
the dynamics of the internal market and their economic backwardness in relation to other 
European regions. 
In fact, the specific conditions of the Azores archipelago, dictated by its small size and remote 
location, give rise to obvious extra costs in the production and sale of canned products which 
distort the conditions of competition with similar activities in continental Europe and have 
clear negative repercussions on the levels of remuneration of the tuna fishing sector. 
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In the interests of harmonious growth in the sector and with a view to complementing 
investment in other areas, it was important to create the conditions so that the existing 
industrial units and any to be set up could increase their production capacity, becoming more 
cost-effective and capable of absorbing all the fish caught by the vessels of the region. 
3. The consequences of the application of the system in terms of employment, export 
flows and market behaviour 
The support granted under the system to offset the extra costs incurred in marketing certain 
fishery products due to the islands' remote location has provided lasting stability in the sector, 
affording ship owners and industrialists acceptable margins for their activities. 
Under this arrangement, 240 new jobs have been created in the existing four firms, one of 
which was replaced by a new unit located in an area that is heavily dependent on fishing. 
The fact that these firms can place all their production on the external market at prices similar 
to those of their Portuguese and European rivals guarantees Azorean ship-owners that all their 
catches will be absorbed by industry. 
Ship owners and industrialists may be said to be generally satisfied with the application of the 
scheme in the Azores. 
4. Identifying the beneficiaries under the scheme and the administrative mechanisms 
Beneficiaries 
The beneficiaries of the compensation system are the owners of tuna fishing vessels registered 
in ports in the Region and pursuing their activities in the EEZ of the Azores and Madeira 
archipelagos as well as the tuna processing industries. Charterers of foreign fishing vessels 
pursuing their activities in the EEZ of the Azores may also receive aid. 
Administrative measures 
Further to the publication of Decision No 92/448/EEC of 30 July 1992, Council Regulation 
(EC) No 1503/94 of 27 June 1994 and Council Regulation (EC) No 2337/95 of 9 October 
1995, the Regional Secretariat for Agriculture and Fisheries of the Autonomous Region of the 
Azores drew up orders defining the rules for the application of Community aid to the canning 
sector which were then published in the Official Journal. 
Every quarter, ship owners and industrialists submit applications for aid payments to the 
Regional Secretariat for Agriculture and Fisheries. After checking the applications, the 
Regional Secretariat sends the files, to the Institute for Financing and Supporting the 
Development of Agriculture and Fisheries (IFADAP) for payment in due course. 
Payments in respect of quantities of tuna from chartered vessels and imported tuna are made 
only at the end of each year, after final balancing of the deliveries made in that year. 
The IFADAP is responsible for the supervision and financial management of the measure. 
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CONCLUSION 
The situation described above indicates that the application of the system set up in 1992 
concerning tuna has been fairly satisfactory as regards the average annual quantities laid down 
and the consequent benefits for the economic operators concerned. On the other hand, it has 
to be borne in mind that the situation which gave rise to the extra costs providing the grounds 
for this scheme still obtains. This means that the considerable distance from the market still 
entails extra costs which local operators have no chance of overcoming. This being so, there 
are grounds for applying the compensation mechanism to this product. 
5. Demersal species in the Azores 
In recent years, the production and sale abroad of demersal species has achieved significant 
proportions within local activities in the Azores. 
In 1996, demersal species represented 29% of the fresh fish, the commonest being haker red 
bream, boca negra, wreckfish, conger, seabream, alfonsino, kitefin shark, peixâo and scabbard 
fish. Landings of these species were of the order of 3 900 tonnes. 
A substantial proportion of the Azores fishing fleet catches demersal species. Most are small 
craft working along the coast. Some 268 larger vessels with greater autonomy work fishing 
grounds within the Exclusive Economic Zone. 
These vessels directly employ 4 000 fishermen, around 90 % of the seamen registered in 1995. 
The bulk of the fish caught off the Azores, and particularly that with the greatest commercial 
value, is sold on the national and international market. 
The following table shows the quantities of fish exported (gross weight = fish + ice + 
container) by air in 1995 and 1996, and the main destinations: 
Exports of fresh fish 
DESTINATION 
USA 
Canada 
Mainland Portugal 
Madeira 
Europe 
Other 
TOTAL 1995 
Tonnes 
127 
260 
3516 
101 
381 
118 
4 503 % 
2.82% 
5.77% 
78.08% 
2.24% 
8.46% 
2.62% 
100.00% 1996 
Tonnes 
155 
236 
2 950 
463 
32 
123 
3 959 % 
3.92% 
5.96% 
74.51% 
11.69% 
0.81% 
3.11% 
100.00% 
Exporting demersal species generates extra costs for air freight (the sole means of ensuring 
that the fish reaches the consumer without quality suffering): a minimum freight rate is 
imposed by the airline with the monopoly on links with the continent, and for packing and 
packaging (insulated containers and ice). 
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To offset this situation, intervention should be approved under the POSEIMA programme to 
offset the extra costs and disadvantages suffered in exporting fish to the outside world 
occasioned by the islands' remoteness. 
The species to be covered should be those with the greatest commercial value and for which 
demand is greatest on consumer markets, such as seabream (including peixâo), wreckfish, red 
bream, alfonsino, boca-negra and scabbard fish. 
Average annual exports are of the order of 3 500 tonnes. 
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II. MADEIRA 
1. The general economic situation of the region 
Productive activity in the Autonomous Region of Madeira exhibits a marked dependency on 
the outside world. 
Madeira is located in the North-East Atlantic, between the parallels defined by latitudes 
30° 1' 38" and 33° T 34" N and iongitude 15° 51* 11" and 17° 15' 52" W. 
Taking the far points of the Island of Madeira and the farthest points of the geographically 
closest regions, the island of La Palma in the Canaries archipelago is closest, at approximately 
400 km, followed by Cape Sin, on the coast of Africa, at approximately 625 km, and Lisbon at 
approximately 950 km. The distance from Brussels is some 2 700 km as the crow flies. 
In view of these distances, Madeira can not only be defined as the island region it is but as-one 
of the outermost regions of the European Continent and of the European Community. 
The region is an archipelago consisting of the islands of Madeira and Port Santo, which are 
inhabited, and a group of islets which make up the Désertas and the Salvage Islands 
(Selvagens). 
The archipelago has an area of approximately 779 km . All the islands were formed by 
volcanic activity, have steep irregular coastlines, rugged terrain and precipitous slopes. 
Madeira is the largest island in the archipelago, and is home to nearly the entire population of 
the region. Approximately 34% of the total area serves agricultural and human needs. 
Natural constraints 
- extremely steep relief, with marked gorges caused by pronounced erosion; 
- generally poor-quality land; 
- a coastline consisting mainly of huge cliffs; 
- a sudden drop in the ocean floor. 
Main effects 
- increased time and costs required for any work and structures, due to the rugged terrain; 
- limited feasibility of work entailing land movement because of the complexity and 
variability of the rock formations in some parts of the region; 
- reduced tourist potential for beach or inland holidays in the region because the coastline 
does not afford easy access to the sea; 
- relative scarcity of fishery resources, due to the drop-off of the ocean floor and resulting 
poverty of the waters in plankton. 
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factors of location 
Identification 
- island location; 
- great distance from the continent, outermost situation. 
Main effects 
- isolation; effects with multiple repercussions on the whole region (economy, social fabric, 
labour-force skills, education, etc.); 
- specific regional problems; some difficulties in monitoring and coordinating certain 
national and Community policies and programmes. 
Factors associated with the past (pre-autonomy) 
Identification 
- reduced investment; 
- centralism. 
Main effects (after the process of autonomy) 
- underdeveloped, vulnerable economic fabric; 
- poor intra-regional access, requiring subsequent heavy investment; 
- the quality of life enjoyed by the population is decidedly inferior to that of the rest of the 
country; 
- marked dependence on the outside world. 
Population and Employment 
Although it has always been borne in mind throughout the process of development of Madeira 
and Port Santo that every measure and undertaking of any kind has to be geared to the 
population, there can be no doubt that a visibly low standard of living is still typical of the vast 
majority of the inhabitants of both islands. 
Particularly in terms of pay, education, vocational training and various welfare indicators, 
there is still a very long way to go to attain a quality of life which would put the population of 
the Region on the level of other countries, even the least developed countries in the European 
Community. 
In the last five years, the population of the Region has increased slightly (0.7%) to the current 
figure (1996) of approximately 255 100 inhabitants, giving a population density of 327.5 
inhabitants per km2. 
The unemployed population is 5 238, a rate of 4.68%. 
The employment rate is 43.9%. 
Employment breaks down by sector as follows: the tertiary sector employs 60.6%, the 
secondary sector 27.7% and the primary sector 11.7% of the active population. 
p:\uper\projet\005en.doc 17 
It should be mentioned that the population of Funchal, representing almost half the total of the 
archipelago, is mainly employed in the services sector. It will therefore be easy to separate out 
the relative weight of the primary sector in the rural municipalities of the Island of Madeira. 
Exclusive Economic Zone (E.E.Z.) 
The region has an Exclusive Economic Zone of around 110 000 square miles, over 500 times 
the land area, which is physically characterised by the absence of a continental shelf, limited 
continental talus and an ocean floor at an average depth of some 4 000 metres and a maximum 
of approximately 5 400 metres, interrupted only in little areas where some underwater heights, 
popularly known as "banks", rear up from the abyss. 
2. The fisheries sector in the region 
Local importance of this activity for each island within overall economic activity 
The vast majority and core of the fisheries sector is concentrated on the two decidedly rural 
municipalities of Câmara de Lobos and Machico. 
Between fishermen, merchants, factory employees and government officials, approximately 
2 150 people are directly linked to the sector, representing nearly 2% (sic) of the population in 
employment. 
Comparison with other sectors of activity 
Due to the constraints mentioned above, Madeira's economy is heavily dependent on the 
outside world, and the balance of trade shows a pronounced deficit. Both the primary and the 
secondary sector are predominantly built on fragile structures. Bearing the permanent 
difficulties of some areas of production in mind, fish processing plays a leading role in exports 
as well as generating added value, with consequent advantages for the economy as a whole 
and for the sector in particular, especially as a focus for production, employment and income. 
Description of existing infrastructures 
Fishing ports 
The main port for landings is in Funchal, and handles around 10 000 tonnes of fresh fish every 
year, or some 95% by volume of the fish landed in the Region. 
Porto Santo, Caniçal and Câmara de Lobos deserve mention by virtue of the volume of 
landings made there. 
Another quay, in Porto Novo, in Santa Cruz municipality, has recently been extended and 
modernised, essentially for the purposes of direct landings to the fish factories in that area. 
Cold stores 
Only five of the twelve ports in the region have cold stores. In addition to these, the Regional 
Government also bought a cold store in the municipality of Santa Cruz which, after upgrading, 
came into operation in 1993. The cold stores provide freezing, storage, and refrigeration 
services, and sells ice. 
Virtually all the frozen fish supplies regional industry, while any surplus goes to industry in 
the Azores and mainland Portugal. 
p:\uper\projet\005en.doc 18 
Fleet and fishing gear 
The regional fishing fleet consists of 538 small craft. 
Most of these are wooden vessels, with limited range, insufficient ancillary navigation and 
detection equipment and poor accommodation, safety and on-board storage facilities. 
The small craft mainly catch various species by line fishing. The vessels which fish black 
scabbardfish are slightly larger (8-15 metres) and use longlines. Surrounding nets are used to 
catch small pelagic species, and vessels are authorised to use this technique. Tuna boats are 
larger (18-30 metres in length), and use veranda nets. 
Nearly all the vessels operate inshore and in the Portuguese exclusive economic areas. 
Fish landings 
The following table shows the relative weights of thunidae and black scabbardfish landings 
within the totals for the ports of the region. 
Fish landings in Madeira 1992 - 1996 
SPECIES 
Thunidae 
Black scabbardfish 
Other 
TOTAL 1992 
Weight 
8 095 
2 812 
2 261 
13 168 (%) 
61.5 
21.4 
17.1 
100 value 
1068 
676 
426 
2 170 (%) 
49.1 
31.2 
19.5 
100 1993 
Weight 
4 725 
3 466 
2 151 
10 342 (%) 
45.7 
33.6 
20.7 
100 value 
567 
640 
400 
1607 (%) 
35.3 
39.9 
24.8 
100 1994 
Weight 
5 245 
3 132 
1968 
10 345 (%) 
50.8 
30.3 
19.1 
100 value 
709 
683 
467 
1859 (%) 
38.2 
36.8 
25 
100 
SPECIES 
Thunidae 
Black scabbardfish 
Other 
OTAL 1995 
Weight 
8 851 
3 432 
1484 
13 767 (%) 
64.1 
25.0 
10.9 
100 value 
1205 
634 
380 
2 219 (%) 
54.4 
28.6 
17.0 
100 1996 
Weight 
6331 
3 279 
2 116 
11726 ' (%) 
54.0 
28.0 
18.0 
100 value 
1 180 
662 
429 
2 271 (%) 
52.0 
29.2 
18.8 
100 
The canning industry 
The canning industry in the region currently boasts four factories. These have capacity for 
roughly 40 tonnes of raw materials per day and take in an average of around 4 000 tonnes 
every year, although they exceeded 6 200 tonnes in 1992. It should be pointed out that two of 
these factories began production in early 1997, for which reason the values given above are 
bound to change significantly as of the current year. 
Virtually all the processed product is caught in the region by vessels registered in local ports. 
The raw materials used are basically thunidae and the like, and the finished product is sold on 
the Community market. 
This industry employs a total of 395 people. 
p:\uper\projet\005en.doc 19 
Application of the POSEIMA Programme 1992/1996 (TUNA) 
YEAR 
1992 
1993 
1994 
1995 
1996 
TOTAL Production kg. 
Regional 
6 270 893 
3 408 040 
3 036 512 
5 538 966 
2 387 872 
20 642 238 Imports 
0 
- 0 
772 076 
0 
112 460 
834 536 TOTAL 
6 270 893 
3 408 040 
3 758 588 
5 538 966 
2 500 332 
21 476 774 ESC 
Industry 
203 804 023 
22 152 260 
27 888 723 
41054 816 
21 867 012 
316 766 834 Ship owners 
0 
88 609 040 
90 123 676 
164 235 881 
70 802 793 
413 771 390 TOTAL 
203 804 023 
110 761 300 
118 012 400 
205 290 697 
88 505 868 
730 538 224 
The fish processing Industry 
Beyond any doubt, the tuna fishing industry as a whole was the leading component of 
Madeira's fisheries sector in 1992. 
Direct and indirect employment in this sector is estimated at around one thousand jobs. At 
present, there are four firms processing this type of product, all of which goes to the 
Portuguese and Italian markets. 
The underlying assumptions for setting up the Community aid scheme for the tuna sector still 
hold, given that the specific conditions of the archipelago continue to obtain, entailing extra 
costs in producing and marketing products, with negative repercussions on the remuneration 
of economic operators in the sector. 
The case made in 1992 at the time of the initial study which led to the aid scheme for this 
sector being set up is still valid. 
There is also one plant in this sub-sector which fillets black scabbardfish. 
It completed its production trials in early 1997. Its fully operational capacity will be 7/8 tonne 
of raw material every day, for 3/4 tonne of finished product. The industrialists are relatively 
satisfied "with the uptake on their product on the regional market and on external markets on 
which the product has been launched, and have excellent business prospects. 
This factory has created some 45 jobs, mainly for female staff. 
Other initiatives with smaller-scale production are also contributing to the progress of this 
sub-sector. 
Other initiatives on these lines are forecast for the near future. 
p:\uper\projet\005en.doc 20 
The effectiveness of application of the Community system to offset extra costs 
The situation before the system was introduced 
In 1991 when, pursuant to Council Decision No 91/315/EEC, a programme of options specific 
to the remote and insular nature of Madeira and the Azores was instituted, and subsequently, 
in 1992, when, pursuant to Commission Decision 92/448/EEC, Community aid was granted 
for specific measures to overcome the remoteness of Madeira and the Azores, this recognised 
not only the development difficulties faced by the two archipelagos which prevented them 
from fully participating in the dynamics of the internal market but also the specific 
disadvantages entailed in their geographical situation, their specifically mountainous terrain, 
serious shortcomings in infrastructure and their general economic backwardness 
With regard to Madeira and the fisheries secfor in particular, the positive effects of the fleet 
modernisation policy have been manifest since the late 1980s and the early 1990s in increased 
catches, mainly of thunidae. As a result, for lack of industrial infrastructure,_surpluses have 
begun to emerge which have made it seriously difficult for producers to sell their product at 
adequate prices. 
In the interests of harmonious growth in the sector and with a view to complementing 
previous investment in other areas (port infrastructures, cold store facilities and the fleet), it 
was important to create the conditions for setting up industrial units with the principal 
objective of absorbing all the thunidae which the fleet was capable of catching. 
For this development strategy to succeed, it was necessary to create the conditions for 
industrial units to achieve cost-effectiveness despite operating costs, dictated by the remote 
island location, which had to be offset. The growth of the sector, which in 1991 had only a 
single factory in operation and could boast four factories by 1996, is tied to the application of 
POSEIMA to create conditions equivalent to those faced by other rival units in continental 
Europe. 
3. The consequences of the application of the system in terms of employment, export 
flows and market behaviour 
As stated above, it was no coincidence that the creation of canning factories working regular 
hours throughout the year dates back to the application of POSEIMA. 
This aid has created lasting stability in the sector, giving ship-owners and the canning industry 
acceptable margins for their activities. 
Under POSEIMA, some 300 jobs have been created in the three companies which began 
operations in the 1990s. 
If these firms can place their product on the external market, they will need to obtain raw 
materials, which means that all fish not consumed locally will go to industry and, on 
occasions, quotas will even have to be exchanged with the Azores when local production turns 
down momentarily, which guarantees vessel owners a market for their entire thunidae catch. 
Briefly, exports of canned tuna quadrupled between 1990 and 1996; employment in the sector 
grew at the same rate and, more importantly, has remained stable. The course of the thunidae 
market has been steadied to the satisfaction of ship owners, fishermen and the local canning 
industry, to the extent that one of the working factories, the oldest, has just begun to build a 
new unit to replace its existing one. 
p:\uper\projet\005en.doc 21 
4. Identifying the beneficiaries under the system and the administrative mechanisms 
The beneficiaries and the administrative mechanisms are identical to those in the Azores (see 
above). 
CONCLUSION 
The situation described above shows that the application of the system set up in 1992 
concerning tuna has been fairly satisfactory as regards the average annual quantities laid down 
and the consequent benefits for the economic operators concerned. 
On the other hand, it has to be borne in mind that the situation which gave rise to the extra 
costs which provide the grounds for this scheme still obtains. This means that the 
considerable distance from the market still entails extra costs which local operators have no 
chance of overcoming. This being so, there are grounds for applying the compensation 
mechanism to this product. 
5. The Madeira black scabbardfish 
Fishing the black scabbardfish is an ancient tradition in Madeira, and around 40% of 
professional fishermen currently depend on it. 
Landings of this species are in the area of 3 500 tonnes per annum, and represent 
approximately one-third of all the fish landed in the ports of the region. Scientific monitoring 
of the fishing of this species indicates no decline in stocks, as proved by the fact that the 
average weight/size ratio of catches has remained stable for 15 years. This species may be 
considered underfished. 
In fact, fishing has changed considerably in recent years. The fleet has declined, as has the 
number of days' fishing per year. Fishing activities have therefore contracted since 1992, and 
these activities are not influencing stock numbers. Furthermore, appropriate measures for this 
type of fishing have been taken by the regional government, in monitoring the number of 
days' fishing and the number of trips in the spawning season. It should, however, be pointed 
out that only adult fish are caught, for the simple reason that juvenile specimens are not found 
in the deep waters fished. 
In terms of regional consumption, this species is part of the staple diet of Madeira, and is also 
appreciated on external markets. 
This product is mainly aimed at external markets, and exports account for 90% of the raw 
material used by the processing industry. 
Until the current year, catches of black scabbardfish were limited to what the regional market 
could absorb fresh, because there was no other type of industrial processing. 
Because the resources held out the potential for stepping up fishing, three plans were approved 
for industrial units to process and market this species, (these projects, approved and co-
financed by the European Community are of considerable importance: the creation of some 60 
jobs, mainly taken up by young women, made a decisive contribution to settling population 
groups in their community of origin). 
p:\uper\projet\005en.doc 22 
Overall, these three projects involve a maximum processing capacity of 2 000 tonnes of black 
scabbardfish as raw material every year. 
These industrial units, two of which are already working while a third is in the final stages, 
fillet and freeze fish, primarily for the markets of Europe and some third countries. 
Nevertheless, the specific conditions of the archipelago, dictated by its small size and 
remoteness, give rise to obvious extra costs in the production and sale of products which 
distort the conditions of competition with similar activities in continental Europe and have 
clear negative repercussions on the levels of remuneration and employment in this sector in 
the region. 
CONCLUSION 
The extra costs incurred in marketing this species are generated by the conditions which the 
economic agents concerned have to face. The costs arise from charges for sea transport 
(including insurance), the difference in energy costs and the immobilisation of stocks of raw 
materials and finished product. 
These circumstances justify Community intervention to offset the extra costs incurred in 
selling this species. Calculations indicate that this would entail using approximately 1 800 
tonnes of raw material in product for export. 
6. Outlets for Madeira chub mackerel 
Chub mackerel {Scomber Japonicus) has been fished in Madeira for generations, and there is a 
long tradition of mackerel processing, although, for several reasons, it has not be used for 
canning since 1985. 
Five small surrounding netters are licensed to fish chub mackerel, and some 90 fishermen are 
dependent on this activity. 
In recent years, annual catches have been in the region of 1 000/1 200 tonnes, representing 
gross value of the order of ESC 100/120 million. 
Relatively little fresh mackerel is eaten; it has to be exported. 
The commissioning of a new cannery employing 170 people will increase the volume of fish 
caught, since resources are abundant. It should also be pointed out that the processing and 
marketing conditions are entirely identical to those in the tuna sector. Industrial processing of 
chub mackerel increased significantly in the first quarter of 1997, complementing industrial 
tuna processing and thus maintaining or increasing these factories' activity levels, which is 
vital for safeguarding jobs, the product, value added and the competitiveness of this industry. 
Catches during the current year should be of the order of 2 000 tonnes. All industrial 
production goes to Italy. 
However, the specific conditions of the archipelago, determined by its small size and 
remoteness, clearly generate extra costs in producing and marketing the product which distort 
the conditions on which it has to compete with similar activities in continental Europe and 
have clear negative repercussions on levels of remuneration and employment in the region. 
p:\uper\projet\005en.dec 23 
The extra costs incurred in selling this species arise from transporting ancillary materials and 
one unladen leg of a round trip, the immobilisation of stocks, electricity and insurance and the 
delivery costs associated with transport. 
CONCLUSION 
The conditions on which this species is produced and marketed justify Community 
intervention to offset the extra costs incurred in terms of the quantity processed and exported 
(2 000 tonnes), which is insignificant in absolute terms but is of considerable socio-economic 
importance with particular regard to employment. 
p:\uper\projet\005en.doc 24 
III. THE CANARY ISLANDS 
Introduction 
Fishing has traditionally been a major economic activity in the Canary Islands, given their 
situation and highly favourable climate. 
The easternmost point of the archipelago is 115 km from the coast of Africa, while its 
northernmost point is 1 100 km from Cadiz, the nearest port on the Iberian peninsula. Madrid, 
the largest market for fish in Spain (172 000 mt/year), is 1 600 km away. 
The archipelago is made up of seven islands divided into two provinces, Las Palmas and 
Santa Cruz, with a total area of 7 273 km , representing 1.44% of the total area of Spain. 
For more than three hundred years, non-industrial and coastal fishing has coexisted with deep-
sea fishing on the Saharan fishing bank The latter has to some extent overshadowed the 
former, which is much more limited and has fewer resources. Fishing has thus been of great 
importance to the islands and is one of their basic economic activities. On some islands such 
as Lanzarote, it is second only to tourism as an economic activity. 
Most of the coasts on the islands are steep, with few interruptions, inlets or bays. There are no 
shallows between the islands, with sea depths sometimes exceeding 3 000 metres. The seabed 
is composed of basic rocks and lava and is full of craters which prevent trawling, as practised 
in other sea areas. 
Like the seabed and the underwater geology, the marine species inhabiting the waters around 
the islands are highly distinctive. 
There are more than 350 species offish around the islands - an unusually high figure for the 
Atlantic. Because of the microclimates in the deep waters between the islands, these species 
are well adapted to the rugged underwater topography of the archipelago. 
This proliferation of species in the oligotrophic waters and the deep-sea microclimate of the 
islands derives from two factors: 
1. Marine species native to northern Europe, the Mediterranean and tropical America 
which reach the islands because of the meeting between the cold Canary Current and the 
current from the Straits of Gibraltar. 
2. Species from the coast of Africa which reach the islands because of the trade winds. 
These constant winds from the Atlantic are diverted by the winds from the Sahara and 
push the ocean current to the west of the Canaries. 
The waters off the Canaries are inhabited by two types of marine species: 
a) Various demersal species inhabiting the deep waters but not in sufficient 
quantities to justify industrial-scale fishing. 
b) Pelagic or surface species such as tuna, bogues, mackerel, jack mackerel and 
sardines, which reach the islands in large numbers. 
The salinity and temperature of the waters of the Canary Islands are distinctive, in that they 
rise as a function of the distance from the African coast, and the temperature can be up to 6°C 
p:\uper\projet\005en.doc 25 
higher than that of the water off the coast. The result of this is that the marine fauna of the 
islands differ considerably from that off the coast of continental Africa, particularly below a 
depth of 200 m, because of the meeting of the underwater currents from the Mediterranean 
and the Atlantic. 
As a result of the uniqueness of the marine topography and the lack of resources in the waters 
of the Canary Islands, only 5% of catches are strictly speaking from these waters. The rest has 
traditionally come from the Canary-Saharan bank. 
When these fishing grounds came under Mauritanian and Moroccan jurisdiction in 1975, the 
fleet based in the islands was obliged to engage in periodic negotiations on the size of the 
catches, reduce the numbers in the fleet and pay royalties for fishing rights, as well as to 
conduct technological, vocational and industrial cooperation with those countries. These 
developments introduced an element of uncertainty into the fishing industry in the Canaries. 
Of the fishing resources mentioned above, it is mainly the pelagic species which support the 
non-industrial fishing. Their presence off the islands is seasonal and can even vary from one 
year to the next. The main pelagic species are bigeye tuna {Thunnus obesus), skipjack 
(Katsuwonus pelamis), long-finned tuna (Thunnus alalunga), bluefin tuna (Thunnus thynnus) 
and yellowfin tuna (Thunnus albacares). 
A large part of the fishing fleet based in the islands plies the waters off West Africa, catching 
mainly cephalopods but also sardines, black hake, shrimps, anchovies and other species. 
Cephalopods are the main catch in the northern area off West Africa in terms of both volume 
and economic value. The fishing grounds for cephalopods lie between Gape Bojador and Cape 
Verde (Senegal). The main species of cephalopods are octopus, cuttlefish and squid. 
The octopus belongs to a single species, Octopus vulgaris, while the cuttlefish belongs to the 
genus Sepia, with its varieties officinalis, hieredda and berttheloti. The squid, finally, are 
represented by the species Loligo vulgaris and Loligo forbesi. 
Socioeconomic data on the sector 
In 1995 the Canary Islands had a population of 1601498, of whom 647 200 were 
economically active, with 518 000 in employment and 129 200 unemployed. The activity rate 
was 50%, the employment rate 40% and the unemployment rate 23.73%. 
GDP breaks down into 5% for agriculture and fisheries, 9% for industry, 7% for construction 
and 79% for services. 
In pesetas at current prices, GDP per capita per year is Ptas 1 719 167. 
The fisheries sector accounts for 2% of the islands' GDP. 
p:\uper\projet\005en.doc 26 
According to the data available to the Secretariat-General for Maritime Fishing, the Canary 
Islands fleet is currently as follows: 
Trawlers, multi-purpose vessels 
and dredgers from EEC waters 
Seine netters, pelagic trawlers, 
drifters, etc., in EEC waters 
Trawlers and multi-purpose 
vessels in waters • of third 
countries and international waters 
Trawlers, pelagic trawlers, 
drifters, etc. in the waters of third 
countries and international waters 
TOTAL No of vessels 
2 
1353 
142 
57 
1554 GRT 
472.10 
5 148.65 
35 503.09 
7 251.86 
48 375.70 TOTAL kW 
1 220.10 
27 078.13 
94 239.49 
19 792.08 
142 329.81 
Employment in the non-industrial fleet represents 53% of the total economically active 
population in fishing, although production accounts for only 23%. The remainder are 
employed in the industrial fleet. 
According to the data for 1996, landings of fresh fish amounted to 74 946 mt and frozen fish 
153 053 mt. 
ANACEF's industrial fleet, as registered with the OPP43, comprises 156 vessels of an 
average of 280 GRT and a total crew of 2 550, with an induced employment of some 12 000 
workplaces. Its catches of cephalopods come to about 50 000 mt per year, except for 1995, 
because of the problems caused by the signing of the Agreement with Morocco. 
These catches have the following destinations: 50% to Japan and 50% to EU countries (60% 
to continental Spain and 40% to Italy, Portugal and Greece). 
The sardine fleet based in the port of Arrecife on Lanzarote comprises eight vessels of some 
4 500 GRT and a total crew of 184. Catches in 1996 were 122 000 mt, broken down as 
follows: 93% for fishmeal and oil, 5% for canning and 2% for freezing. The Iberian Peninsula 
is the final destination for 90% of canned and frozen sardines, and of 100%» of the fishmeal 
and oil produced by the island of Lanzarote. 
The tuna fleet comprises some 60 vessels with a total of 3 000 GRT and 400 crew. Catches 
come to 20 000 mt per year. Most of this is sent fresh to the Iberian Peninsula, followed by 
Japan and the other EU countries, apart from catches intended for preserving. 
The two land-based factories are situated on the island of Lanzarote. 
One of them is the company AGRAMAR which, apart from fishmeal and oil, produces fresh 
and frozen tuna in a refrigeration plant with a freezing capacity of 750 mt/day and a storage 
capacity of 3 000 mt. It also has an ice production plant with a capacity of 140 mt ice per day. 
AGRAMAR employs 315 persons directly and indirectly. 
p:\uper\projet\005en.doc 27 
This year its processing capacity is 750 mt of raw material per day, and it has built a drinking-
water plant. 
Another of AGRAMAR's activities is the marketing of tuna, most of which is sent fresh to the 
Iberian Peninsula or, if there is no demand, frozen for sale later. Trials were started last year 
on cleaning and filleting the fish, which were wrapped in plastic and sold mainly in Las 
Palmas. The results of these trials were successful. 
The other factory is owned by. the company GARA VILLA, which preserves sardines and 
tuna, with a production in 1996 of just over 200 000 tins of sardines, of which 50% were 
consumed in the European market. The rest went to third countries. GARA VILLA employs 
45 persons directly or indirectly. 
Consumption of preserved sardines is relatively high in Spain, although it is difficult to 
compete from the Canary Islands because of the high additional transport costs per kilogram. 
To these must be added the transport of other necessary but uncompetitive inputs: tin plate 
from the Iberian Peninsula, the cartons from Tenerife are relatively expensive, the high price 
of water on Lanzarote, etc. 
Due to the seasonal nature of the catches, which are concentrated in the months September to 
November and practically vanish between January and May, freezing is an essential 
requirement involving high costs. 
The Iberian Peninsula takes 10% of the production of fishmeal, the'EU accounts for 40% and 
the remaining 50% goes to the Far East. The main competitors are1 Chile and Peru. 
20% of the fish oil is sold in the Iberian Peninsula. The remainder goes to the EU and the 
Nordic countries, where it is used in medicines, cosmetics and foodstuffs. Quality (as 
measured by the iodine index and the degree of acidity) is highly important in those markets. 
Aquiculture - an activity for which the Canary Islands were judged a suitable area by the EU 
because of its climatic and meteorological characteristics - has been facing great difficulties 
for ten years. It has already has to abandon the production of turbot and shrimps, and only sea 
bream and bass remain. At this stage, production is only 20% of what was aimed for in the 
MGPs. 80% of this production goes to the European market, essentially Italy. 
In some ports there is also a need for fish-landing cranes and weighing scales on the landing 
quay, so as to avoid transport losses and the resultant lowering of the quality of the fish, 
which has to be taken far from the landing point for weighing. 
Despite these infrastructural weaknesses, there has been a very considerable increase in 
refrigeration facilities in recent years, although even now the refrigeration capacity of Santa 
Cruz de Tenerife is below what is needed, and this forces the tuna fleet to land its catches at 
other ports. 
In 1995 the port of La Luz on Las Palmas saw the arrival of 2 490 vessels with a total of 
1 640 347 GRT and landings of 225 950 mt offish. 
p:\uper\projet\005en.doc 28 
Assessment of competition from neighbouring countries in this sector 
In the last few years exports to Spain from Morocco - which is the Canary Islands' main 
competitor - have increased continuously, going from 25 859 mt in 1986, with Oa value of 
Ptas 5 509 million, to 54 887 mt, with a value of Ptas 23 501 million. 
The main item in this is 16 000 mt of frozen cephalopods per year in direct competition with 
the deep-sea fisheries of the Canary Islands. 
Morocco's situation, with the total freedom from customs duties on its exports to the EU since 
the cooperation agreement in 1987, gave ,its products preferential treatment over Canary 
Islands products until their total integration into, the customs system in 1993. 
The Japanese market, which is one of the main destinations for Moroccan products, applies a 
more advantageous scheme to the Moroccan products than to Canary Island products, since 
the latter are covered by the scheme applied to the EU. 
On the other hand, it must be pointed out that production costs are generally much lower in 
Morocco than in the EU and, hence, in the Canary Islands. 
The conclusion is that, because of the favourable conditions for its products on the world 
market, combined with the lower production costs, the Moroccan fisheries sector has greatly 
damaged the Canary Islands sector in recent years. 
In 1995 Mauritania was still denying access to its waters for EU vessels. However, it allowed 
18 vessels to fish for cephalopods in its waters in the month of November, and this to some 
extent made good the reduction imposed in the first year of the agreement between the EU 
and Morocco. 
FINAL CONCLUSIONS 
If there is one negative characteristic which, amongst others, springs to mind in the fisheries 
sector of the Canary Islands, it is its permanent state of dependence. 
- Dependence, above all, on Morocco for its fishing grounds. 
- Dependence on very few markets, essentially in Japan. 
- Dependence on limited means of transport - an inherent result of their island situation. 
- Dependence on one single factory for packaging materials. 
- Dependence on one single preserving factory. 
This dependence is not the only adverse circumstance, however, since a whole series of 
changes have taken place in consumer behaviour, and the result of these is that the primary 
sector has to "produce" with higher quality and less presentation. 
The improvements in quality and presentation always involve an increase in costs, and these 
costs are also much higher due to the geographical isolation and great distances involved. 
The industrial fisheries sector in the Canary Islands has been gradually shrinking, and has now 
nearly succumbed to competition from third countries which are protected by virtue of their 
socioeconomic features (developing countries, countries with cooperation agreements, etc.). 
p:\uper\projet\005en.doc 29 
We are therefore talking about a European economic sector which, because of its geographical 
location, is obliged to compete strongly with developing countries which it can match only 
through compensation for its isolation and distance from the centres of activity. 
ANALYSIS OF THE ADDITIONAL COSTS BY SECTOR 
Frozen and fresh tuna 
Fishing for tuna, catches of which are very large in terms of volume, is carried,out solely 
using non-industrial hook-based methods which are nevertheless highly efficient. On the 
development of this form of fishing - and mainly on the ease of marketing tuna in general -
depends much of the future of fishing activity in the Canary Islands, tfecause its importance 
may determine whether the resQurces of the fund are utilised more or less intensively. 
The additional costs derive essentially from the costs involved in transport, including the costs 
for insurance, handling and port or airport dues. This expenditure comes to J33.61% of the 
total cost for fresh tuna and 13.08% for frozen tuna. It should be borne in mind that air 
transport is the only way in which the islands can ensure that their fish reaches consumers 
without any deterioration in quality. 
The tables below show the quantities produced in the last few years and the aid paid in 
application of Regulation 2337/95 for both fresh and frozen tuna. 
POSEICAN aid 
1. - Applications for aid (tonnes) 
YEAR 
1992 
1993 
1994 
1995 TUNA 
No of applications 
194 
174 
186 
172 Fresh 
4 095 
4 903 
11 185 
11703 Frozen 
7 184 
2 746 
1420 
872 TOTAL 
11 279 
7 649 
12 605 
12 575 
2 - Aid granted (tonnes) 
YEAR 
1992 
1993 
1994 
1995 TUNA 
No of 
applications 
194 
174 
186 
172 Fresh 
4 095 
4 903 
10 400 
10 400 Frozen 
7 184 
2 746 
1420 
872 TOTAL 
11279 
7 649 
11 820 
11272 
p:\uper\projet\005en.doc 30 
AMOUNT OF AID PAID 
1) Tuna for marketing fresh 
Year 
1992 
1993 
1994 
1995 No 
applic. 
125 
149 
190 
149 mt 
4 095 
4 903 
10 400 
10 400 ECU/mt 
150 
150 
125 
151 Total 
ECU 
614 250 
735 450 
1300 000 
1 570 400 Exchange 
rate 
Ptas/ECU 
149 
158 
193 
167 Total Ptas 
91 697 547 
116185 276 
250 947 312 
263 020 883 
2) Tuna for marketing frozen 
Year 
1992 
1993 
1994 
1995 No 
applic. 
192 
151 
43 
23 mt 
7 184 
2 746 
1420 
786 ECU/mt 
50 
50 
45 
54 Total 
ECU 
359 200 
137 300 
63 900 
42 444 Exchange 
rate 
Ptas/ECU 
149 
158 
192 
168 Total Ptas 
53 625 849 
21 692 228 
12 287 932 
7118 993 
ANALYSIS OF THE ADDITIONAL COST BY SECTOR 
Sardines and mackerel, frozen and canned 
Because of the life cycle of the sardine, its fishing season lasts only seven months - from June 
to December - which means that it is necessary to store both the raw material and the finished 
product in order to meet sales commitments during the rest of the year. This results in higher 
financial expenses for maintaining stocks compared with factories in continental Spain, which 
can work all year round with a much wider range offish products. 
Frozen sardines and mackerel 
These -higher financial expenses are accompanied by additional costs for energy and 
packaging, both of which are more expensive in the Canary Islands than in mainland Spain. 
The result is a 15% increase in the price of the product. To this must be added the 
aforementioned sea transport costs1 which apply only to the Canary Islands, as well as the 
insurance and handling charges and the harbour dues, which come to 42.22% of the total FOB 
cost. 
The tables below give the quantities and the amount of aid granted in recent years in 
application of Regulation 23 3 7/95. S 
p:\uper\projet\005en.doc 31 
Canned sardines and mackerel 
The difference in costs between the Iberian Peninsula and the Canary Islands affects 
practically all the inputs needed for production. AjDart from the cost of the raw material, which 
is lower in the islands (by way of example, one kilo of product is currently some 219 pesetas 
cheaper in the Canary Islands), energy, packaging, depreciation on the plant and the financial 
expenses are all more expensive in the archipelago. 
As can be seen from the table below, there is a difference of up to 9 pesetas for energy, 297 
pesetas for packaging, 5 pesetas for depreciation on plant and 325 pesetas for the financial 
expenses. 
CANARIES PENINSULA 
Energy 114 ÏÔ5~ 
Packaging 1 847 1 550 
Depreciation 71 66 
Plant 
Financial expenses 1200 875 
Depreciation 
The additional costs for depreciation derive from two factors: 
a) The higher cost of machinery and installations as a result of transport to the islands and the 
expenses for the engineers and mechanics who install the plant. 
b) The effect of imputing the annual depreciation to only six months of activity. 
General and financial expenses 
The general and financial expenses incurred are higher than those for any factory in 
continental Spain because of the seven-month season (June to December) and, particularly, 
the islands' situation (obtaining supplies of auxiliary raw materials such as packaging, oil, 
etc.). All this involves holding stocks to cope with production, as well as maintaining stocks 
of finished products to cater for twelve months of production. 
a) General costs 
The factors involved in such costs are as follows: 
- Repair and maintenance of the plant and installations, because of the additional cost of 
replacement parts, as well as technical assistance from labour from other islands or from 
continental Spain. 
- Insurance. Additional costs because of the higher value base for calculating premiums, 
affecting fixed assets as well as stocks, replacement parts, raw materials and finished 
products. 
- Communications. Increased consumption because of more intense use of telephone and 
fax, as well as the sending of documents and small spare parts. 
p:\uper\projet\005en.doc 32 
b) Costs for administration and travel to continental Spain. Additional costs for internal 
auditing and in-house administrative and technical services, as well as travel by head office 
staff to continental Spain. 
Financial expenses 
Additional costs for extra stocks of raw materials (cans, packaging, oil, sauces, seals and other 
components), finishes products and spare parts for machinery and installations, with a view to 
ensuring that the state of the production plant, the production process and market monitoring 
are all satisfactory. 
To all these costs must be added the added cost of sea transport, which is even more onerous 
in the case of this production chain because of the effects of the so-called "double insularity" -
the fact that the production is located one island, Lanzarote, whereas-the port of consignment 
is located on another, i.e. either Gran Canaria or Tenerife. 
The tables show the volume (in metric tonnes) and the amount of aid applied for and granted 
in application of Regulation 2337/95. 
Production of sardines in the years 1993 to 1996. in mt 
FOR CANNING FOR FREEZING 
1993 = \ 6 634 2 530 
1994 6 694 3 583 
1995 -- 677* 
1996 6 501 2 563 
* Because of difficulties with Morocco 
POSEICAN aid 
1) Applications for aid (mt) 
SARDINES / MACKEREL 
Year 
1992 
1993 
1994 
1995 No of appl. 
3 
3 
4 
3 Processing 
5 984 
6 506 
9 721 
1 000 Freezing 
1 077 
2 630 
3 616 
676 TOTAL 
7 061 
9 136 
13 337 
1 676 
p:\uper\projet\005en.doc 33 
2) Aid granted (mt) 
SARDINES / MACKEREL 
Year 
1992 
1993 
1994 
1995 No of appl. 
3 
3 
4 
3 Processing 
5 984 
6 506 
9 721 
1000 Freezing 
1077 
2 630 
3 616 
676 TOTAL 
7 061 
9 136 
13 337 
1676 
AMOUNT OF AID GRANTED 
3) Sardines/mackerel for processing 
Year 
1992 
1993 
1994 
1995 mt 
5 984 
6 506 
9 721 
1000 ECU/mt 
100 
100 
85 
103 Total ECU 
598 400 
650 600 
„ 826 285 
103 000 Pta/ECU 
exchange 
rate 
149 
158 
. V 192 
160 Total Ptas 
89 336 735 
102 790 289 
158 912 089 
16 521 075 
4) Sardines/mackerel for freezing 
Year 
1992 
1993 
1994 
1995 mt 
1077 
2 630 
3 616 
676 ECU/mt 
50 
50 
45 
54 Total ECU 
53 850 
131 500 
162 720 
36 504 Pta/ECU 
exchange 
rate 
149 
158 
192 
167 Total Ptas 
8 039 803 
20 773 308 
31 293 818 
6 098 440 
SARDINES 
Processing 
Freezing 
TOTAL 1992 
mt 
5 984 
1 077 
7 061 Ptas 
89 336 735 
8 039 803 
97 376 538 1993 
mt 
6 506 
2 630 
9 136 Ptas 
102 790 289 
20 773 308 
123 563 597 1994 
mt 
9 721 
3616 
13 337 Ptas 
158 912 089 
31 293 818 
190 205 907 1995 
mt 
1 000 
676 
1 676 Ptas 
16 521 075 
6 098 440 
22 619 515 
p:\uper\projet\005en.doc 34 
CONCLUSIONS 
The situation described in the preceding pages shows how application of the scheme set up in 
1992 has operated extremely satisfactorily for all the species involved, as regards both 
calculation of the production benefiting under the scheme and the actual operation of the 
scheme. In the same way, the benefits deriving from application of the scheme for the 
economic operators involved have allowed the various sectors to maintain an adequate level 
of production and development. 
Bearing in mind that the specific situation lying behind the existence of the additional costs 
analysed above and affecting production in1 the archipelago has not changed and is unlikely to 
do so in the near future, since it derives' from the difficulties posed to Canary Islands 
producers by the islands' ultraperipheral location, it is evident that marketing of the products 
involved will continue to face the extra costs analysed above. Producers in continental Spain 
do not have to bear these additional costs, nor can the islands' producers bear them 
themselves. 
For all these reasons, continued application of the compensation scheme for the additional 
costs, with a view to facilitating marketing of the products in question on the European 
market, is fully justified, so as to allow the islands' producers to access the internal market in 
conditions similar to those applying to mainland producers. Such similarity of conditions 
would be impossible to achieve without the support given to the sector by the present scheme. 
Aquiculture 
The first research in aquiculture in the Canary Islands started in 1978. 
The Autonomous Community of the Canary Islands established the development of 
aquiculture as one of its priorities, once it had established this activity's viability and 
importance for diversifying the region's highly inflexible economy based on only a few 
activities and products and with a fishing sector showing serious structural problems and in 
the throes of recession. 
The first aquiculture programme submitted by Spain to the Commission, for the five years 
from 1987 to 1991, was approved by the Commission Decision of 11 December 1987 (OJ No 
4, 7.1.1988). For Spain - and within Spain for the Canary Islands - the objective was to 
achieve the following annual rates of production by the end of the period: 
MT 
SPECIES TOTAL SPAIN TOTAL CANARIES 
Sea bream 7 500 1 400 
Sea bass 6 000 5ÔÔ" 
Turbot 4 700 2ÔÔ~ 
p:\uper\projet\005en.doc 35 
At the end of this first MGP for aquiculture, the Commission Decision of 20 December 1991 
(OJ No 29 of 5.2.1992) approved the second MGP which Spain had presented for the period 
1992-1996. This maintained the same target, in terms of annual production volume, as the 
previous MGP for sea bream and turbot, while reducing the production target for sea bass to 
just half the previous figure. These three species were considered of most interest to the 
Canary Islands. 
In the present decade there has been hardly any movement in aquiculture, except for transfers, 
divisions and conversions of some of the initial projects. The results reveal a clear slowing-
down in the promotion of new projects and a marked delay in the implementation of the 
projects approved. The sector is thus far from achieving the production targets set out in the 
MGP, ten full years after the commencement of official support for aquiculture from the 
European Union, Spain and the Autonomous Community. 
Nevertheless, those firms which set up in the sector with help from FIFG and national funding 
have managed to put production on a stable footing, with tonnages rising each year despite the 
fact that they suffer from a serious competitive disadvantage in that they have not yet been 
compensated for the additional costs borne by aquiculture because of the insularity and 
remoteness of the Canary Islands. 
We discuss below a number of social, economic and technical factors which demonstrate the 
effects of the remoteness and peripheral situation in this sector. 
1 Social and economic factors 
All aquiculture installations in the Canary Islands are located in areas which are "highly 
dependent on fishing", as pointed out in a 1992 Commission report. It is precisely in those 
areas that the conversion of the fishing industry is affecting the social fabric most seriously. 
One of the measures for retraining the population dependent on fishing, the Community's 
"Pesca" initiative (OJ No C 180 of 1.7.1994), aims to promote diversification of fishing 
activity, since aquiculture is highly labour-intensive and is thus a suitable activity for 
absorbing many of those who are unemployed after the cessation of fishing activities. 
Of the twelve projects presented between 1986 and 1989 in the Canary Islands, only four 
succeeded in developing. This initial failure did not affect all the firms because of the high 
prices being paid at the start of the 1990s and which attenuated the impact of the costs of 
distance and remoteness. Unfortunately, prices - and hence margins - have fallen, leaving 
transport costs as a factor which is limiting competitiveness. 
The Canary Islands are home to Spain's largest industrial producer of fish meal, one of the 
main components of animal feeds. The sector is in the middle of being restructured, and the 
development of a viable aquiculture in the islands will be a positive factor in this difficult 
process. 
The present fishing agreement between the Kingdom of Morocco and the European Union 
expires at the end of 1999. If, as seems likely, its renewal runs into serious difficulties, the 
fishermen on the more than 170 boats based in the Canaries and totally dependent on the 
fishing grounds involved will have to be laid off. Against this background, winding down a 
fisheries subsector such as aquiculture does not appear a sound move. 
p:\uper\projet\005en.doc 36 
2 Technical factors 
The following additional costs affecting fish farming undertakings in the Canary Islands can 
be easily quantified: 
l.Fiy 
The additional costs for importing fry derive essentially from transport and insurance. 
Although shipments are insured in the usual way, the breeding cycle is interrupted in the event 
of massive mortality, leading to months-long breaks in production. Because of the keen 
competition between producers, any temporary absence from the market can mean losing it. 
If such accidents occur, installations in mainland Spain can receive replacement fry within a 
few days. In the Canary Islands, however, the minimum time for obtaining replacements is 
two months. 
On the other hand, the long supply lines cause mortality of around 10% (in mainland Spain it 
is normally below 2%) and high rates of deformity and morbidity, the effects of which have to 
be borne entirely by the firms, since they are not observed at the moment of delivery of the 
fty. 
2 Feedstuffs 
Because of the slowness of delivery to the islands, minimum stocks are several times higher 
than for similar installations in the rest of the Union. This leads to competitive disadvantages 
because it requires increased financial resources to maintain these stocks and lowers the 
quality of the highly perishable feedstuff. The difference in transport costs is another source of 
additional costs. 
3 Transport 
Quality is of fundamental importance in the market for sea bream and sea bass. To ensure it, 
producers in the Canary Islands have to incur costs which are minimal for producers 
elsewhere. More ice is required (up to 20% of the weight of produce), for instance, at an 
average cost of Ptas 8 000/tonne, to which must be added the transport costs. Other examples 
have to do with the resistance of the packaging, maintenance of the cold chain during the 
various transhipments, etc. Air safety standards stipulate an additional plastic packaging 
which is not required for land transport. 
There is also the problem of transport between islands, which has to be effected by sea at 
costs much higher than those incurred by operators in mainland Spain. 
4 Other costs 
In addition to the operating account, the remoteness and isolation of the islands also affects 
the costs of fixed assets and other costs which cannot be quantified in monetary terms, such 
technology transfer, publicity, opening-up of new markets, etc. 
Within the fishing sector in the Canary Islands, aquiculture is the activity which is most 
dependent on inputs supplied from abroad. 
p:\uper\p~rojet\005en.doc 37 
5 Non-tariff barri ers 
Since the advent of the single market, products from mainland Spain are not subject to any 
duty in either the country of origin or the country of destination. 
V 
All shipments from the Canary Islands, on the other hand, have to go through Customs, with 
all the attendant administrative costs. Nowadays, a tin of fish can go from Cadiz to Rome 
without being subjected to checks, whereas a tin from the Canary Islands has to be checked 
several times and be accompanied by the relevant SAD. 
6 Packaging 
An extra cardboard box and a plastic bag for each tin are required for shipments by air to the 
European market, while for mainland Spain only the plastic bag is required. 
3. Conclusion 
The POSEICAN programme, as devised at the time, can and must cater for fish farming 
products from the Canary Islands. These are fully in line with the thinking of the programme, 
since they are affected by the competitive disadvantage caused by the distance from the main 
sources of supply for raw materials and from the main markets for the products, to the same 
extent as all the agricultural and fishing products from the Canary Islands. 
ANALYSIS OF THE ADDITIONAL COSTS BY SECTOR 
Cephalopods, sole and sea bream 
At the time when the Canary Islands were integrated fully into the Community in 1991, most 
of the exports of the islands' industrial fishing fleet (mainly cephalopods, but also some sea 
bream and sole) went to the Japanese market. Once the islands were totally covered by the 
common policies, Japan started levying duties on these exports which were much higher than 
those applying to the islands' competitors, and in particular Morocco. In view of this 
situation, the Council introduced a transitional measure intended to compensate for these 
differences in duties. 
Two Council Regulations laid down this aid between 1993 and 1997, with an annual budget 
of ECU 3.6 million, for subsidising 30 000 mt at the rate of ECU 108/mt. 
In addition, for the same period and under the POSEI programmes, there was another Council 
Regulation establishing a scheme for compensating for the additional costs deriving from their 
remote situation, applying also to the French department of Guyane. This Regulation has been 
extended on various occasions, most recently by Council Regulation No 2337/95. 
Production of cephalopods, the percentage share of which in exports to the European market 
was low, was never the subject of a Spanish request for inclusion in this scheme for 
compensating for the additional costs involved in marketing certain fisheries products from 
the Canary Islands. 
However, in recent years there have been changes in the market trend for cephalopods, to the 
point that such exports to the European market currently account for nearly half of production, 
and it is expected that this trend will continue upwards in future at the expense of the Japanese 
market. 
p:\uper\projet\005en.doc 38 
In this context, the situation is that, in recent years, the Japanese market has taken only small 
octopus, while the remaining production is exported to the countries of the European Union. 
This turnround in exports is demonstrated by the volume currently sold on the European 
market, amounting to an average of 22 000 tonnes in the last six years, including sales of 
cephalopods, sole and sea bream. This is very close to the 30 000 tonnes exported to the 
Japanese market. Within the Union, exports go mainly to Spain, Italy, Greece, the Netherlands 
and the United Kingdom. 
In the immediate future this volume will increase, since the number of licences to fish in 
Moroccan waters is expected to decline by about 10% per year, and this will deflect part of the 
fishing fleet into Mauretanian waters, where the composition of catches is completely 
different and catches of species which are exported to the Community market will rise. 
Therefore, we can expect the sales volume in the EU to reach 25.000 Tm. 
It must be added that the fleet is very large, comprising 135 vessels employing 2 300 
fishermen and some 10 000 persons on land. It operates in the waters near the islands and in 
Moroccan and Mauretanian waters. 
It is this new situation in the sector which prompts the request that these species (which suffer 
from the same additional costs for transport, packaging, services, depreciation, etc.) be 
included in the new Regulation to replace Council Regulation 2337/95 after 31 December 
1997. 
Since both Council Regulation 712/97 "setting up a specific measure in favour of cephalopod 
producers permanently based in the Canary Islands" and Council Regulation 2337/95 
establishing a system of compensation for the additional costs in the marketing of certain 
fishery products from the Azores, Madeira, the Canary Islands and the French department of 
Guyane as a result of their very remote location" expire on 31 December 1997, this would 
mean terminating the transitional system set up in 1993 by means of a specific measure for 
cephalopods and incorporating the sector into the POSEI system set up for fishery products. 
This inclusion would result in greater consistency in the aid granted to the sector and would 
reflect faithfully the current situation in the sector, in which exports have been profoundly 
affected by the full integration of the Canary Islands into the European Union, to the point that 
the Community markets are now the islands' main source of income, and this trend is set to 
continue in future. 
p:\uper\projet\005en.doc 39 
EL GUIANA 
General socio-economic <ifinti"1 
The French department of Guiana is situated in the equatorial zone between Surinam and 
Brazil and covers an area of 83 534 km2. 
The population of Guiana is currently estimated at 160 000 inhabitants. 
Apart from its considerable growth, the population is also characterised by its youth, with 
more than one in two inhabitants under 25 years of age in 1990 and one m three under 15. The 
bulk of the population lives on the coast and on the large frontier rivers, with over half the 
population living in Cayenne. ' 
Between 1982 and 1990, the working population rose from 31 200 to 48 700, an increase of 
56%. However, the unemployment rate is still very high (21%); GDP per capita is 39% of that 
of metropolitan France. 
The fishery sector in Guiana 
The sector in the Guianan economy 
The exclusive economic zone of Guiana covers an area of 130 140 km2. 
Guiana has a straight, low coastline which consists mainly of mangroves broken up by river 
outlets of varying size. 
The continental shelf is enormous (40 000 km2) and descends gently out to the open sea. 
The coastal environment is favourable to the presence of rich fish stocks, which are linked to 
the presence of fresh water brought in by the large estuaries. There are also areas which can be 
trawled. 
There are two types of fishery resource in these waters: 
- prawns, which are the department's main fishery product given their abundance on the 
continental shelf; 
- fish, which are mainly exploited on a non-industrial basis with "white" fish as the target 
species. 
The fishery sector is very important to the department's economy. It is one of Guiana's main 
activities, with an estimated production of around FF 250 million a year. With exports worth 
FF 200 million, it accounts, mainly because of prawns, for a quarter of Guiana's total revenue 
from exported goods. 
p:\uper\projet\005en.doc 40 
The following table shows the volume of the main products exported by Guiana. 
EXPORTS tonnes 
Sub-total 
main products 
Fish 
Prawns 
Rice 
Timber 
Gold and alloys 
of unrefined gold 1991 
19.660 
918 
4.068 
9.625 
5.049 1992 
29.369 
781 
3.801 
19.451 
5.335 
1 1993 
23.845 
1.078 
3.038 
16.844 
2.884 
2 1994 
22.702 
1.187 
3.813 
10.868 
6.385 
1 1995 
23.221 
1.161 
3.597 
13.619 
4.843 
2 
Jobs related to prawn fishing 
With 146 fishing vessels, including 65 prawn trawlers, the Guianan fisheries sector employed 
around 614 people at the beginning of 1997, almost 400 of whom worked on prawn boats. 
Of these 614 workers, 57% were at sea and 43% were on land. Fifty were directly sub­
contracted local workers working as refrigeration technicians, welders, chandlery employees, 
etc. 
At the beginning of 1996, with a total population of 160 000, the working population was 
estimated at 56 140. This indicates the importance of the prawn industry, which accounts for 
1.1% of the working population. 
Infrastructure 
The port of Larivot is the fifth French fishing port in terms of value on landing (sales by 
auction). The prawn boats work from this port, modernisation of which began in 1996. 
Catches are either sorted and frozen on board or factory processed. The bulk of the catch is 
then put on the export market frozen. 
The trade is organised through a number of structures. The Regional Sea Fisheries Committee 
is the organisation which represents the sector. It groups together industrial shipowners, 
owner masters, ship crews, fish processors and wholesale traders, co-operatives and 
employees. It has its own powers which enable it, in its territorial waters, to take measures 
strengthening Community or national provisions. 
In 1996 two nationally recognised producers' organisations were set up in Guiana, in 
accordance with Community legislation, on the organisation of the market in sea products for 
action concerning the prawn and fish sector. 
Apart from the. fisheries cooperative, Guiana has cooperatives on the coast which help with 
the organisation of the trade by gradually assuming responsibility for collective services' (e.g. 
supply of ice to vessels, fuel, fish distribution, etc.). 
p:\uper\projet\005en.doc 41 
Prawn fishing a regnlgfrfl artjvity 
Prawn fishery resources consist of four main stocks in tiers off the coast, but most fishing 
takes place on the continental shelf. In order to ensure the renewal of the species, total 
allowable catches (TAC) of prawns have been determined annually since 1985. Since 1988 
some boats have extended their fishing activity to non-TAC species from the continental 
slope, the sales prices of which are higher on the European markets. 
Production of prawn fisheries 
The average number of boats actually working each year is considerably lower than the 
number of equipped boats. Of the 67 equipped trawlers at the beginning of 1995, the average 
number of boats in the zone over the year as a whole totalled 51 (compared with 46 in 1994). 
Prawn fishing activities 
Number of authorised 
prawn boats 
Average number of 
boats in the zone 
Total catches 
(in tonnes) 1991 
72 
56 
3.653 1992 
72 
58 
4.208 1993 
70 
57 
3.431 1994 
66 
46 
4.241 1995 
68 
51 
<• 4.343 1996 
68 
62 
4.344 
Guianan production in 1995 accounted for 0.16% of world prawn production (0.2% if only 
wild prawns are considered). 
Demand on the world market is growing, but there is also a rapid increase in the production of 
aquaculture prawns. Located mainly in South-East Asia and South America, aquaculture 
farms enjoy relatively low production costs. Consequently, sales prices on the world market 
have fallen considerably, obliging Guianan shipowners to reduce their profit margins in order 
to be able to continue marketing their production. 
However, in 1995 the average prices of prawns continued to rise to some extent. The increase 
meant that Guiana's prawn exports fell by only 1% in value terms in 1995, whereas they fell 
by 6% jn terms of volume. 
p:\uper\projet\005en.doc 42 
Geographical distribution of exports in terms of volume 
tonnes 
Metropolitan 
France 
West Indies 
of which: 
Guadeloupe 
Martinique 
Spain 
Italy 
United Kingdom 
Miscellaneous 
Total 1991 
3.258,9 
143,4 
21,0 
122,4 
80,6 
327,0 
173,6 
0,3 
3.983,8 1992 
3.443,0 
180,8 
39,^ 
141,1 
41,6 
6,7 
50,2 
79,1 
3.801,4 1993 
2.712,8 
228,8 
52,6 
176,2 
74,1 
13,5 
0,0 
8,5 
3.037,7 1994 
3.376,7 
339,9 
74,8 
265,1 
93,8 
0,0 
0,0 
3,1 
3.813,5 1995 
3.039,0 
349,0 
9,7 
289,3 
191,0 
0,0 
" 0,0 
18,1 
3.597,1 
In the 1993-1996 period, the volume of exports rose by 24%. In Europe, the main markets 
were metropolitan France and, in the form of re-exports, Spain, Portugal and Italy. Of the 
main local products exported (sea products, rice, timber, gold and fruit), prawns are the most 
important in value terms, accounting for 44.5% in 1995 and 38.7% in 1996. 
Prices in metropolitan France are subject to pressure from imports from Asian and South 
American countries. The Guianan prawn is also subject to competition from high-quality 
fished prawns from, for instance, Madagascar, where shipowners have much lower production 
costs. 
Note should also be taken of the effects of the Community's Generalised System of 
Preferences (GSP), which involves reductions in customs duties or even zero tariff rates. This 
is the case of prawns from Andean Pact and Central American countries, as aid against drugs. 
The Community has also recently introduced an autonomous zero-duty import quota of 6 000 
tonnes of prawns. This system is tending to reduce prices on the European market. 
In view of the above, the situation can be assessed as follows: 
- since 1992, production has increased then levelled off; 
- between 1993 and 1996, exports increased by 24% in terms of volume and 17% in terms of 
value; destinations diversified, particularly as from 1994 (Spain, Portugal, Italy, etc., in 
addition to metropolitan France); the medium-term trend appears quite favourable in this 
respect. The annual volume stabilised at around 4 200 tonnes; 
- alongside this, however, competition became tougher on the international market, with 
increased production by the countries of Central and South America, South-East Asia and 
Madagascar, where production costs are of course much lower; the retailing and 
distribution industry of metropolitan France is putting pressure on prices by bringing these 
new possibilities of supply into play; 
p:\uper\projet\005en.doc 43 
- the Community has itself made it easier for competing products to enter its market by 
introducing an autonomous tariff quota of 6 000 tonnes at zero duty in 1997 for a period of 
12 months; 
- the far-reaching restructuring of businesses, which began in 1994, is continuing, which 
shows the sector's ability to start afresh on an improved basis; 
- nevertheless, the number of jobs has not fallen, standing on a long-term basis at over 600 
including sailors, the land staff of the shipowning companies and the employees of direct 
sub-contractors; 
- finally, the activity of the fleet has increased, with the proportion of boats at sea rising from 
81% to 91% between 1993 and 1996. 
This description of a situation both dynamic and fragile should not underestimate the role 
played by the Community's marketing support system. It has provided businesses with vital 
aid in most cases, whilst still allowing competition and competitiveness to have a stimulating 
effect. 
There is little doubt that if this support had not been provided many jobs would have 
disappeared and several businesses would have been taken over by foreign interests. 
Moreover, from the biological point of view, the system is improving resource management. 
Without it, the search for economic viability through the tonnage produced, rather than by 
fishing focused on the categories most popular on the export market, would have increased the 
proportion of small prawns in the total catch, to the detriment of the sustàinability of the 
resource. * ' '• • • 
Assessment and updating of additional costs 
Tropical shrimp fishing in Guiana has no equivalent in the European Union, which is why 
assessing the additional costs encountered by businesses in that department has to be based on 
an analysis of the charges which a comparable activity would incur in metropolitan France. 
In previous years the estimate drew a distinction between industrial and non-industrial fishing. 
However, in updating the additional costs for 1997, account has had to be taken of the effects 
of the restructuring of the non-industrial sector, which began at the end of 1995. The 
restructuring plan provides for a semi-public company to buy up, by 1998, non-industrial 
trawlers previously exploited directly by their owner-masters. 
In the near future all of the Guianan fleet will be exploited industrially. This means in general 
that a more heterogeneous fleet should be counted on, with average production costs different 
from those of the previous industrial fleet. 
Beneficiaries of the system and aid distribution mechanism 
Community aid is managed by the Fonds d'intervention et d'organisation des marchés des 
produits de la pêche maritime et des cultures marines (FIOM - Fund for Intervention and 
Organization of the Markets in sea fishing products and sea products), a public body whose 
aim is to improve and regulate the markets in fishery and marine aquaculture products. 
Annual instructions define the conditions and methods of payment for aid introduced under 
the compensation scheme. They define the beneficiaries, the level of aid, the conditions of 
eligibility, the breakdown of compensation between the beneficiaries and the lay-out of the 
application for aid. 
p:\uper\projet\005en.doc 44 
Each beneficiary must submit to FIOM, via the Departmental Director for Maritime Affairs: 
- an application for payment; 
- a table showing production according to the production statements used for the calculation 
of crew pay and according to the export declarations submitted to the customs' services; 
- a table summarising sales; 
- a copy of each of the prawn sales invoices. 
« 
The payment of aid is carried out after local inspections by the Maritime Affairs services and 
central inspections by «the FIOM before the expenditure is authorised. As the representative of 
the EAGGF-Guarantee Fund for France in the Sea Fisheries Sector, the FIOM also has four 
inspectors who may, on the basis of a defined programme, carry out a priori inspections of 
aid. 
This framework for the payment of aid provides strict guarantees regarding the observance of 
Community regulations. 
p:\uper\projet\005en.doc 45 

ISSN 0254-1475 
COM(97) 388 final 
DOCUMENTS 
EN 03 08 07 13 
Catalogue number : CB-CO-97-390-EN-C 
ISBN 92-78-23038-3 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
Dch