Three decades of spectacular development

The take-off period

The Polish fishery industry started with modest catches in the southern Baltic. The International Council for the Exploration of the Sea (ICES), established in 1902 in Copenhagen, Denmark, reported the total landings in 1903 of all countries surrounding the Baltic to be 50,000 metric tons. By 1908, landings had increased to 113,000 mt. It would be a very speculative (and arbitrary) task to separate out the pre-World War I catches of Polish fishermen, as Poland was not independent at that time. Polish landings were included either in German or in Russian data reported to ICES. The first officially reported Polish marine catches in 1921 amounted to 1,307 mt. The average annual Polish catch in the Baltic Sea, between 1921 and 1930, accounted for 2,490 mt, compared to about 120,000 mt taken by other countries. Initially, the activities of Polish fishermen were entirely restricted to inshore areas. In the 1930s, however, the introduction of motorized cutters expanded their operations with otter trawls to offshore grounds and, as a result, catches of herring, sprat and cod gradually increased (Thurow, 1978). Simultaneously (from 1931), some Polish enterprises began to operate in the North Sea. As a consequence, during the four years prior to World War II, the first signs of progress in the Polish fisheries were noted. From a global or regional viewpoint, this progress was rather inconspicuous. The average annual Polish catch in the years 1935-38 accounted for 18,000 mt compared to 177,000 mt taken by seven countries in the whole Baltic Sea. Polish national catches did not keep up with the constantly growing local demand for fish products, mainly for salted herring and canned sprat or sardines. Because of the scarcity of distant-water fishing vessels and the relatively poor fishing grounds in the Baltic Sea, demand was met mostly by imports ranging from 61,000 to 104,000 mt (product weight) per year, at a cost of US$6 to 13 million (1920 dollars). So, fish consumption in Poland - measured in product weight - exceeded by six to ten times the levels of national catches.

The ambitious plans of some Polish companies aimed at expanding the national fishery were destroyed during World War II (1939-45), together with the entire fleet of 180 offshore fishing boats that was in operation in 1939, in addition to the loss of more than 500 small motorized boats.

When the war ended, Poland inherited a southern Baltic sea-coast which resembled a scorched desert. Fishing vessels were sunk, processing plants ruined and harbors devastated. The reconstruction of the fishing sector and the shipbuilding industry took two years. In 1947, Polish catches in the Baltic Sea had doubled, compared to the pre-war level. From 1948, the shipbuilding industry was steadily growing, which was very important for the development of the rudimentary Polish fishery. Before Poland mastered the construction of ocean-going vessels, the then-fledgling shipyards in Gdansk and Gdynia were operating at their fullest capacity to support, first and foremost, the national fishery. Within the three-year period from 1947 to 1949, there were 383 small side-trawlers with 80-150-HP engines completed in Polish shipyards to be operated on the Baltic Sea. To exploit the North Sea resources, 24 bigger, medium-sized trawlers with 900-HP en gines were constructed locally and 40 second-hand trawlers were acquired from the UK. In this way, during the late 1940s, Poland suddenly came into possession of a relatively excessive fishing fleet in comparison to the number of skilled crews of Polish nationality. The inadequate capacity for training sea-going personnel became a bottleneck. For this reason, more than 300 Dutch skippers and engineers were hired for a three-year period (from 1948 to 1950) to catch fish and simultaneously to train unskilled Polish fishermen. This on-the-job training turned out to be extremely successful and much needed before the first three schools for fishermen were established in 1950-53. The total catch jumped from 39,000 mt in 1947 to 66,000 mt in 1950 to 107,000 in 1955. From then on, the Polish fishery advanced rapidly during the next 30 years; an increase in tonnage, catches and market supply was evident almost every year. It appears that the years 1947-50 could be considered a take-off period for this sector of the economy, to use a classic economic term. As a matter of fact, this take-off dates back to the late 1930s, but it was brutally destroyed by World War II. Its development was thus delayed by ten years.

Growing catches and market supply

Following the first boost into the late 1940s, the uninterrupted flow of newly built fishing vessels and growth of landings continued into the 1950s and 1960s. It is worth noting that in 1960, only one-half of the total catch was extracted from the southern Baltic, while the other half was taken from the North Sea. Afterward, however, the share of catch taken outside the Baltic Sea increased at a considerable pace. The resources of the Baltic Sea were considered by planners to be poor and fishing grounds of the North Sea were overcrowded with different foreign fishing vessels operating there. So, the Polish fishing fleet began to search for new fishing grounds on the Atlantic Ocean and to evaluate the feasibility of exploiting them. For some time, the managers of Polish enterprises were quite interested in the results of the impressive British venture (in the late 1950s) involving the operations of the first fishing and factory vessels Fairtry I and Fairtry II (owned by Salvesen Co.). The ability to catch and process fish on remote fishing grounds was attractive. The same type of venture as that of Salvesen Co., although on a larger scale, had been launched by the Tralflot, a Soviet enterprise in Murmansk. In the late 1950s the Polish shipyards put forward a tender to construct the first 15 sophisticated fishing and factory vessels for Polish fishing companies. The shipyards were, at that time, primarily export-oriented, constantly designing new vessels for both shipping and fishing. They were very anxious to use the Polish fishery as an experimental ground for testing their ability to construct good vessels which would make them more competitive against other European companies (mainly UK, West Germany, and Spain). The economic justifications of the projects that were carried out pointed to the likelihood of a beneficial expansion of the Polish fishery to the Newfoundland and Labrador (Canada) fishing grounds.

Eventually, all three parties (government planners, shipyards, and fishing enterprises) came to accord, and the first fishing factory trawler, Dalmor /, completed its maiden voyage at the end of 1960. This began the noticeable presence of Polish vessels in the Northwest Atlantic. From 1960 to 1988, as many as 300 different sizes and types of fishing and factory vessels were constructed in long or short series. They became involved in the exploitation of vast - at that time - underutilized resources in the Atlantic and Pacific Oceans, achieving high catch rates and a good quality of processed and frozen fish. Their operating distances ranged as far as 8,000 nautical miles from the ports of registry. It is no wonder that from 1960 until 1980 Polish catches grew almost five times from 168,000 to 781,000 mt. Figures 13.1 and 13.2 illustrate the dependence of the catches on the tonnage of fishing vessels.

JOINT VENTURE CATCHES

DISTANT WATER DIRECT CATCHES

BALTIC CATCHES

1950 55 60 65 70 75 80 85 88 YEAR

Fig. 13.1 Total Polish catches.

JOINT VENTURE CATCHES

DISTANT WATER DIRECT CATCHES

BALTIC CATCHES

1950 55 60 65 70 75 80 85 88 YEAR

Fig. 13.1 Total Polish catches.

DISTANT WATER FISHING AND SUPPORTING VESSELS

BALTIC FISHING TRAWLERS

DISTANT WATER FISHING AND SUPPORTING VESSELS

BALTIC FISHING TRAWLERS

1950 55 60 65 70 75 80 85 88 YEAR

Fig. 13.2 Polish fishing fleet in the years 1950-88 (in thousand gross registered tonnes).

The increase of demand in the local market was actually lower than the increase in catches counted in live weight. The reason for this disparity lies in the worsening economic position of the Polish fishery and, in particular, in the dramatic increase of that part of the costs which have been expended in foreign currency. Until 1963, imports of fish products exceeded exports. From 1965 onwards, the surplus of export over import grew continuously. Its magnitude, calculated in five-year intervals, together with the catch in live weight, is shown in Table 13.1.

Table 13.1

Fishery production and local market supply 1965-88 (in thousands of metric tons)

1965 1970 1975 1980 1985 1987 1988

Catch 230.1 451.3 816.7 781.7 735.1 750.4 732.4

Final production 152.8 230.2 256.8 317.0 312.5 316.2 310.6 Surplus of export over import 6.0 42.3 33.1 43.7 55.6 93.5 110.1 Domestic market supply 146.8 187.9 223.7 273.3 256.9 222.7 200.5

The Polish fishery had been subsidized by the government. The subsidies generally accounted for six to 19 percent of the value of domestic market supply. Beginning in 1987, the companies were left entirely to their own devices and had to deal with steep increases in unit cost resulting from three factors: (1) sharp increases in fuel prices in the 1970s, (2) increasing distances to the fishing grounds, and (3) higher royalties assessed by foreign exclusive economic zones. Thus, the Polish distant-water enterprises were compelled to export each consecutive year more fish straight from the fishing grounds (using fish carriers) in order to earn enough foreign exchange to cover their operating costs.

As shown in Table 13.1, in 1988 about 35 percent of the total final net production (surplus of export over import) had to be exported to keep the Polish fishery machinery working, whereas in 1980, the figure was 14 percent. In the late 1980s, catch composition and the profile of the final production had changed considerably. In brief, the Polish distant-water trawlers searched for species of fish which brought the best export price instead of those for which there was local demand (squid is exported and herring is imported). The terms of trade for the Polish distant-water fishery in the 1980s were much worse than in the 1970s, to say nothing of the 1960s. The development strategy of the Polish fishery was reviewed by the 15th session of FAO's Cooperative Oceanic Fisheries Investigations (COFI) in the following manner:

The opportunities for greater catches are generally offshore, where catch rates may sometimes be higher. Some of the largest unexploited stocks are to be found in remote areas of the ocean far from centers of human population. It often pays to exploit more distant fishing grounds if the catch rates are sufficiently high, but comparison of near- and distant-water options by straightforward cost-and-earnings calculations are valid only if the skill, supporting services and infrastructure necessary for the operation of off-shore fleets are already in place or if the time and cost of establishing them are accepted as justifiable in terms of general development (UN FAO, 1983).

For Poland, the cost of distant-water fishing was entirely justified in the national economy of the 1960s and 1970s. It still appeared favorable as a whole in the 1980s, although some operations in some areas brought losses. The 1990s will provide an answer to the crucial question about whether and to what degree it pays to roam the remote seas under conditions restricted by the establishment of the EEZs.

Factors of development

On the basis of a number of analyses, we can identify four explicit factors which have been contributing to the development of the Polish fishery within the last decades, and they are as follows: (1) demand for fish, (2) well-trained and cheap human labor, (3) high input of technology, and (4) open access to all living resources. Each is briefly discussed in the following paragraphs.

(1) Demand. A strong potential demand has its roots not only in increasing personal income and in a very high income elasticity of demand but also in the sociocultural features of the nation. Ethnic background and religious beliefs, generating consumer preferences, converged with the government propaganda launched in the 1950s through to the 1970s, advocating high consumption of fish for purely dietary reasons. This propaganda was combined for some time with subsidies for the fishery, particularly when meat was scarce on the local market. Fish was rated as a substitute for meat, the supply of which often fell short of the government's plans. Furthermore, most of the species caught by Polish distant-water trawlers were also attractive for export opportunities. All these circumstances generated a wider market outlet (local and foreign) for Polish fishing enterprises than they were in a position to fulfill, due to limited access to fishing areas.

(2) Trained manpower. An extensive education system was set up in the 1950s and 1960s by the government to train a large number of sea-going and other personnel. First of all, it embraced occupations required to operate fishing vessels, such as master fishermen, mates, engineers, radio operators, etc. Likewise, thousands of food technologists, plant foremen, and freezer and cannery operators were trained in secondary schools. Separately, managers, government administrators, and development personnel were educated in four-year courses in the College of Fisheries, or other schools. As a result of this training, about 18,000 fishermen and 23,000 inland workers held relevant certificates of proficiency or competency. Over 1,400 employees were ranked as diploma-level personnel. Most of them were attached to state-owned enterprises, earning only a small remuneration compared to that paid in the US or West German fishing industries.

(3) Technology and capital. Ambitious development plans obviously called for heavy investments, mainly in the form of large and sophisticated vessels. They were financed chiefly from the government budget and contained technical innovations from all over the world. It is worth mentioning briefly the following cornerstones of development: (a) the use of synthetic fibers in the manufacture of nets, (b) the introduction of processing and freezing at sea, (c) the use of electronic aids facilitating the location of the concentrations of fish shoals, (d) the mechanical hauling and stern trawling permitting use of large nets, and (e) an impressive increase in the size, versatility and operational range of fishing vessels (UN FAO, 1987). In the 1980s, however, investment declined seriously. The construction of new vessels was lagging behind the scrapping of old ones. The total number of distant-water catchers in operation dropped from 115 in 1980 to 86 in 1988. The number of freezer carriers supporting the fishing operations increased because of the growing distances to fishing grounds. Eventually, the total net value of fixed assets in fisheries declined as shown in Table 13.2. This process of the decline of investment propensity which started in the 1980s may continue in the 1990s.

Table 13.2

Net value of fixed assets involved in the Polish fisheries 1970-88 (in millions of US dollars)

Component 1970 1975 1980 1985 1988

Fishing and auxiliary vessels 180 271 405 360 325

Inland processing plants and cold stores 43 95 137 120 115

Total net value of capital out 223 366 542 480 440

(4) Open access. For more than three decades, starting from the late 1940s, the Polish fisheries enjoyed practically free access to all abundant living marine resources in the world oceans which, according to the economic calculations of the planners, were worth exploiting. The only restrictions as to the rate of stock exploitation were those imposed by the recommendations of international fishery regulatory bodies. This comfortable period of open entry ended definitely in some areas in the late 1970s and in others in the early 1980s. The establishment of EEZs were acknowledged internationally in December 1982, when most governments signed the UN Convention of the Law of the Sea (UNCLOS). The freedom of the seas was gone and the new legal regime constituted a serious challenge to the very foundations of the then-existing model of the Polish fishery.

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