There will be no bite: Russia's salmon catch may drop
Russia's salmon catch may fall and the price of this species of fish - pink salmon, salmon, sockeye salmon and others - may change. According to the new draft law of the Cabinet of Ministers, business will have to renegotiate agreements with Rosrybolovstvo for the use of fishing grounds by December 30, 2025 and pay a total of about 200 billion rubles. Otherwise, the plots will be put up for auction and companies may lose them. But businesses do not have such money, industry representatives claim. On the contrary, Rosrybolovstvo believes that the bill will allow responsible enterprises to have a long planning horizon and will increase the responsibility of business. Meanwhile, the Federation Council Committee on Agrarian Policy in its response to the bill has already deemed it advisable to postpone the renegotiation of contracts until 2026. The State Duma is also ready to support the senators, where the governors of fishing entities have appealed to.
What factors may affect the growth of salmon fish prices
Prices for salmon fish may rise in Russia. We are talking about the most accessible today for Russians pink salmon, as well as other species - seal, silver salmon, salmon, chinook and chum salmon. This "Izvestia" was told in the Association of salmon producers of Kamchatka and the Association of fishing enterprises of the Sakhalin region. The reason may be the adoption of a government bill that changes the conditions of salmon fishing in the country.
The government submitted the document to the State Duma on December 24, 2024, and its developer was Rosrybolovstvo. According to the draft law, all companies that harvest salmon fish in Russia must renegotiate contracts for the use of fishing grounds by December 30, 2025. In the explanatory note to the document, budget revenues from this process are estimated at almost 200 billion rubles. However, as industry representatives reported, they may lack the financial capacity to fulfill these requirements.
There are 2175 fishing grounds for salmon production in Russia, the All-Russian Association of Fishery Enterprises, Entrepreneurs and Exporters (VARPE) reported. Their lease terms range from 10 to 25 years and in most cases expire in 2027-2028.
To enable companies to keep these plots and the fishing infrastructure built during this time, Russia passed a law in 2023, according to which fishermen will be able to extend their agreements for the use of plots without an auction if they are in good faith.
In doing so, they must fulfill a number of conditions:
- make a payment for the plot, which is calculated according to a government-approved formula;
- conclude an agreement on the socio-economic development of the region where they operate (for example, to build social infrastructure facilities at their own expense) and production control (protection of the site from poaching).
- This year's contract renewal date specified in the bill, unfortunately, raises the question of the termination of the existence of a significant part of companies in Kamchatka Krai, which today is the leader in salmon production in the Russian Federation. We account for up to 80% of the catch," Vladimir Galitsyn, head of the Kamchatka Salmon Producers Association, told Izvestia.
At the same time, according to him, the companies that have been working in these areas for the last 20 years have invested hundreds of billions of rubles in the infrastructure and achieved serious results, which today are higher than in the USSR.
- However, today we are offered to extend the land plots for 20 years, but we have to pay for 40 years at a double coefficient. And if we take another 20%, which in addition we pay to the regional budget, we have to pay the rate of the fee as for 50 years in advance, - explained the business representative.
In his opinion, the situation may affect the reduction of catch and increase in the cost of salmon.
- Most companies do not have money to pay for these contracts. Therefore, they will have to go to banks and take loans at the high rate we see now. Obviously, this will affect the cost of fish, as fishermen will have to compensate for their expenses," said Vladimir Galitsyn.
This opinion is shared by Maxim Kozlov, President of the Association of Fishing Enterprises of the Sakhalin Region.
- For the Far East the issue of finalizing the bill is extremely important. Today, the formula for calculating the cost of land plots is such that the catch for the last four years is considered. But 2021, 2022, 2023 were the most catchable years in the history of salmon monitoring. But that's unlikely to happen again in the 20 future years for which these contracts are scheduled. Already in 2024 the catch amounted to about 235,000 tons, while in 2023 it was more than 600,000 tons," he explained to Izvestia.
According to him, in order to find funds to renegotiate contracts, companies will have to apply for loans. But if there is not enough fish, they will not be able to repay the loans.
The difficulties are also confirmed by the All-Russian Association of Fishery Enterprises, Entrepreneurs and Exporters.
- The main financial burden will fall on the enterprises of the salmon sector, their payment is the highest, as salmon is one of the most valuable fish species. The total amount of payment for the use of these areas will amount to 198.76 billion rubles. Another 19.9 to 39.8 billion rubles will have to be paid by enterprises under agreements on participation in the socio-economic development of regions," German Zverev, president of the association, explained to Izvestia.
According to him, taking into account the current payment procedure, the companies are obliged to pay 40% - 79.5 billion rubles - already in 2025. At the same time, the industry is now in a difficult financial situation: there is a decline in profitability and a drop in revenue.
The Rosrybolovstvo "Izvestia" did not answer the question about the revision of the terms. At the same time, they said that the bill will allow responsible enterprises of the fishery complex to have a long (20 and more years) planning horizon, will increase the responsibility of business through participation in measures for the conservation of aquatic biological resources, and will allow the executive bodies of the coastal subjects of the Russian Federation to continue the consistent socio-economic development of their regions.
"Izvestia" sent a request to the Cabinet of Ministers with a request to assess the proposals to finalize the initiative.
Why some fishermen may leave the market
The Federation Council Committee on Agrarian and Food Policy shares the industry's concerns - in their response, the senators propose to finalize the bill. They draw attention to the fact that taking into account the projected growth of production costs and reduction in the volume of catch of Pacific salmon in 2025-2031, the gross profit of salmon sector enterprises will decrease.
In these conditions, the norms of the bill, when businessmen will have to pay 40% of the fee for renegotiation of contracts as early as 2025, contain risks for the industry.
"Even under more lenient conditions of payment for the use of fishing grounds in the first years of their use, the number of operating enterprises will decrease by 38%, to 60 companies, 30% of which will remain unprofitable," the document emphasizes.
In this regard, the senators propose to postpone the start date of the procedure for reissuance of contracts to 2026 and finalize the bill.
Vladimir Kashin, head of the State Duma Committee on Agrarian Issues, told Izvestia that the deputies share the opinion of the senators and are on the side of the industry and consumers, who will not support the increase in salmon prices.
- Our committee recommended its adoption in the first reading, but, of course, we believe that for the second reading it is necessary to take into account the proposals of the industry representatives in order not to aggravate the situation with the financial condition of mining companies, taking into account the high key rate of the Central Bank," the deputy explained to Izvestia.
In the conclusion of the committee, which is available to "Izvestia", it is said that the State Duma received appeals from the governors of Kamchatka, Khabarovsk, Primorsky Krai, Magadan Oblast, Chukotka Autonomous Okrug, which indicate high risks to the sustainability of fishing enterprises and the fishing industry as a whole.
In this regard, the committee proposes to consider the advisability of changing the date of reissuance of contracts to December 30, 2026. Other comments include unreasonable requirements to withhold payment for the site if the contract is terminated early on the initiative of the public authority.
According to Izvestiya, the bill may be adopted by the State Duma in the first reading on February 25.
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