Benefits for fishermen are not caught
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The fishermen are asking the government to resume subsidizing rail transportation of pollock from the Far East to the center of the country, which was stopped due to the exhaustion of limits. The measure helps smooth out fluctuations in tariffs and support fish prices by stimulating supplies to the domestic market, industry participants point out. Regulators allow the allocation of additional funds.
The Association of Pollack Harvesters (ADM) has asked Deputy Prime Minister Victoria Abramchenko to increase funding for the program to subsidize railway tariffs for the transportation of pollock from the Far East to the central regions of the Russian Federation. Kommersant has a copy of the letter from ADM President Alexei Buglak dated May 30. The Deputy Prime Minister’s office said that the proposal would be considered and sent to the relevant departments.
A program to subsidize the rail transport of frozen pollock and fillets was launched in 2021 amid difficulties with exporting fish to China due to restrictions during the pandemic. According to Mr. Buglak, transportation of pollock from the Far East to the center costs an average of 20 rubles. for 1 kg – 20-25% of the selling price for frozen pollock, so subsidizing the tariff of 6 rubles. per 1 kg has a positive effect on the cost of fish in the domestic market. But, ADM points out, the Ministry of Agriculture has suspended the approval of requests for transportation due to the exhaustion of limits.
According to Aleksey Buglak, in the first quarter of this year, 71 thousand tons of pollock were delivered to the domestic market, the potential for the whole year is 200 thousand tons. In 2022, about 20,000 tons of frozen codfish fillets and 22,000 tons of frozen white fish were imported to Russia, and part of these volumes can replace Russian pollock, the ADM indicates. Aleksey Osintsev, President of the Association of Fishing Fleet Owners, adds that since July 15, after the start of the salmon season, the tariffs for transportation by refrigerated containers will increase by 15–30%, in 2020 the growth reached 75–100%, and subsidies help to smooth out the effect.
German Zverev, president of the All-Russian Fisheries Association (VARPE), clarifies that this year the limit for subsidized fish transportation in the amount of 51,000 tons was exhausted by mid-April. According to his estimates, at least 500 million rubles are required to subsidize the transportation of pollock, which will allow the delivery of about 70 thousand tons of products. For the time being, Mr. Zverev points out, the program is funded by the fishermen themselves. According to the expert, according to the data of the Federal Agency for Fishery, presented at a meeting of the public council at the agency on May 18, since the end of 2021, more than 1 billion rubles have been allocated for subsidies, which came to the budget in part from auctions for the sale of shares of quotas, including those withdrawn from users.
According to Dobroflot CEO Alexander Efremov, an increase in the cost of transporting pollock will affect the final price of fish, which may lead to a decrease in demand and, as a result, reduce the attractiveness of the domestic market compared to exports. Russian Railways says that subsidies have a positive effect on traffic volumes, although the company’s tariff in the retail price of fish is no more than 5-7%. They say that they continue to record an increased demand for the transportation of fish products from the Far East. In January-April, 250.6 thousand tons were transported, which is 11.5% more year-on-year, and the main volumes go to Moscow and the Moscow region, Russian Railways reported.
In mid-2022, the WARPE also reported that the Ministry of Agriculture was suspending applications for subsidies for pollock transportation. The ministry later restarted the process. The Ministry of Agriculture confirmed to Kommersant that applications for the transportation of pollock will not be accepted from December 30, 2022 due to the exhaustion of limits due to the large number of recipients. The Federal Agency for Fishery also notes the high demand for the subsidy program. In early May, the government allocated another 2 billion rubles to subsidize the rail transportation of all food, they added. In addition to fish, the subsidy applies to grain, vegetables, oilseeds and other products.
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