Do fish producer organisations work in the interest of their members?

“Are fish producer organisations acting in the interest of their members?” was one question raised at the UK Society for Co-operative Studies annual conference.

Co-operative development consultant Jim Pettipher of Co-operative Futures explained how fish producer organisations work.

Back in July 2013 the High Court decided in favour of the government’s decision to reallocate a small percentage of unused fishing quota from large-scale operators to smaller vessels.

The move had been contested by the UK Association of Fish Producer Organisations (UKAFPO), which claimed the re-allocation was unlawful and discriminatory. But Mr Justice Cranston ruled that nobody owns “the fish of the sea”, dismissing their arguments.

Around the same time, Mr Pettipher started researching the situation of small-scale fishermen after receiving an enquiry from a couple who owned a small-scale fishing boat in Brixham, Devon. Their boat is 11 metres long and the EU defines small-scale as 12m long and below.

The couple work as a team, with the fisherman going to sea and his partner selling much of their catch direct through social media to obtain the best price. They had been approached by other local fishermen about sharing this marketing service and they wanted to do this, working as a small-scale fishers co-op.

But the couple were already members of a then bona fide co-operative, as members of a recognised fish producers’ organisation (PO). The PO functions based on rules dating back to 1975 that were replaced in 1990 and further amended since.

Under these rules, members market all their catch through the PO and the failure to do so can result in a fine of £5,000. Furthermore, if a member wishes to leave the PO the member is required to give three years written notice.

Producer organisations were set up under the EU fruit and vegetable regime to strengthen producers’ position in the market. In the 1970s, overfishing was causing prices to crash and threatening the viability of the UK fleet.

By joining a PO, fishermen should also be able to reduce their costs and increase the overall viability of all members and achieve a more sustainable balance in the supply chain.

A PO must have at least five individual grower members, all of whom are separate legal entities, and a democratic structure that gives members an equal say in the PO’s management and operation via the one member, one vote rule.

Members of the PO or the PO itself finance the operational fund, which may qualify for EU financial assistance, under the EU fruit and vegetable regime.

The new common fishery policy came into force in 2014 by which time EU had agreed to UK increasing fishing quota but said it should share them between all of their boats, including those under 10m.

Societies were chosen as an apposite model given the eligibility criteria contained in the Common Fisheries Policy (CFP), many of which remain EU policy – set up by and run democratically for fishermen. The UK currently has 22 recognised fish producer organisations, 10 of them in England.

“These POs date back to the mid 1970s and in all the cases that I have seen, their objects have not been updated since,” said Mr Pettipher. “Of the 10 English POs the four largest (by number of fishermen in membership) are co-operative societies. The largest – and most recently granted recognised PO status – by share of the catch (quota) are limited companies.

“UK POs’ objects to this day are about the PO’s capacity to withdraw fish from the market and to recover ‘intervention and equalisation’ funds from the EU to keep their members afloat – literally and metaphorically.

“The 2014 CFP problem is that there are now not enough fish available, given 40 years development in the scale and capacity of industrial boats to
catch fish.”

Mr Pettipher’s research shows that in all English cases a very small minority of producer organisation members – sometimes as few as one member – have been able to gain majority control of its producer organisation’s fishing quota. They have undue influence over the PO, even in the case of co-operative societies, he says.

“Perhaps the worst example of this is when the Department for Food, Environment and Rural Affairs (Defra) did not know that, when the United Kingdom Association of Fish Producer Organisations took Defra to the High Court and lost in 2013 – running up huge and ultimately pointless legal fees for all involved – UKAFPO did not exist as anything other than an unincorporated association.

“UKAFPO’s registered status as a society had already been subject to a hostile cancellation by the FCA in September 2011 for failing to submit an annual return for 10 years,” he added.

Moreover, 96% of the UK’s fishing fleet – registered fishing boats less than 10 metres long – share between them only about 4% of the UK’s “total allowable catch” (TAC). Small boats under 10 meters make up almost 80% of the fleet but have a measly 4% of the fishing quota.

One example is the Cornelis Vrolijk vessel, the UK’s largest fishing vessel and one of the largest in the EU. While flagged to the UK, with Hull as its home port, it is in fact controlled by a large Dutch fishing company and lands all of its catch abroad.

The Cornelis Vrolijk employs 55 people in the UK and also pays taxes in the UK. It has almost four times more fishing quota (23%) than England’s entire local fleet (6%).

Last year, the government launched a consultation on setting fixed quota allocations for England’s 10m and under fishing fleet. DEFRA decided not to take forward the proposal but is in discussions with the fishing and shellfish industry.