History of fisheries
From the era of settlement of Iceland in the late 9th century, until the 20th century, Iceland‘s economy rested on farming and fisheries. The fishing season was defined by movement of the fish and the limitations of fishing from open rowing boats. The main species spawn off the south coast in early spring and then move up along the west coast. The main fisheries took place from late January until early May and so the southern and western parts of Iceland became the predominant fishing regions. By 1300 fisheries had become more prominent than agriculture in terms of foreign exchange earnings, initially with stockfish and fish oil being the main products.
The advent of sail-powered vessels in Iceland in the early 1800s brought about major changes in the Icelandic fisheries with increased export of commodities. Cod was caught with handlines and the bulk of the catch was salted. The salt had to be imported and the salting process was labour-intensive. A shark fishery also became highly profitable in the 1830s due to a rising demand in Europe for shark liver oil to fuel street lighting lamps. As a result of this development communities started to grow considerably around the best harbours such as Reykjavik and Ísafjördur in the Westfjords.
The introduction of motorized vessels at the beginning of the 20th century revolutionized Icelandic fisheries. As the fishing capacity grew so did the total catch. In only two decades, Iceland acquired a modern fishing fleet, technically second to none in Northern Europe. A mere decade after the first motorized vessel went fishing in 1902, there were roughly 400 small (12 GT or less) motorized vessels. Yet, in 1912, only eight vessels had surpassed the size of 12 GT but in 1930 this number had reached 224. The number of smaller vessels had more than doubled and stood at 787.
Following the First World War, Icelanders also acquired a number of steam-powered fishing vessels, the so-called longliners. These were mostly second hand North Sea trawlers used for longline fisheries during the winter and for herring fisheries in summer while also being used as transportation vessels. The overall catch for demersal species amounted to 62,500 tonnes in 1905, 80,400 tonnes in 1920 and 216,700 tonnes in 1930. The Great Depression hit fisheries in Iceland hard and in 1939 the total catch was only 113,800 tonnes.
While the operations of motorized boats and trawlers were initially a success, international market conditions for fishery products after the First World War became unfavourable and products piled up. Icelanders were relative novices to marketing and their fish exports were somewhat chaotic. In 1925 the local currency had to be sharply devalued, domestic debt rose sharply and the number of bankruptcies hit an all-time high. With the Great Depression prices for seafood plummeted and sales dried up. Trade barriers were widely introduced as well as bilateral agreements based on equal-trade. In 1932, the national debt of Iceland amounted to almost 82% of asset value in the fishing industry. That situation persisted until the Second World War when business conditions improved dramatically.
British steam-trawlers were first noted in Icelandic waters in the 1890s and soon vessels from other nations followed suit, mainly German and Dutch. The first steam-trawler operation in Iceland was launched by an English merchant in 1899 but in 1905 the first Icelandic steam-trawler arrived. By 1930 some 40 trawlers were operated by Icelandic companies. These vessels were an addition to the existing fishing fleet and thus had a significant impact on the overall catch figures as well as a rising share of the demersal catch. However, declining demand for fish on the international market resulted in painful adjustments and reduced fishing effort. Salted products were the backbone of the industry but the first steps towards quick-freezing were about to be taken.
Iceland became an important base for the Allied Forces during World War II. Many find it hard to belive that Iceland suffered relatively higher casualties during the war than the United States, particularly due to attacks on vessels at sea. Yet, the war proved to be a boom for the Icelandic economy. Fishing was excellent and demand was high.
Driven by the wartime bonanza in fisheries, an ambitious programme was launched for the renovation of the motorized fishing fleet. As a result Iceland had one of the most modern fishing fleets in the world at the dawn of the 1950s.
The trawlers acquired after the war were sidewinders 500-600 GT in size. Initially operated from fishing towns around the country, by 1960 the trawlers were almost entirely confined to the larger ports of Reykjavík, Hafnarfjördur and Akureyri. The sidewinders lasted until 1978 when the last of them was permanently docked. These were replaced by a generation of larger and more powerful stern-trawlers icing all the catch. Long fishing trips had evidently put the shelf live of the iced fish to the test, fish that then had to be processed in land based factories. However, by the new Millennium most Icelandic trawlers had become large factory vessels, processing and freezing the catch on-board, with products ready for export at premium prices due to the extra freshness.
With rising fuel prices and high labour costs for processing on board (fishermen´s share system) as well as improved handling systems and shorter fishing trips by the ice fish vessels price premiums for “processed at sea” declined. As a result, much of the processing was taken back to land based plants where cheaper hydro-electric power was available and salaries were lower. Improvements in handling and processing allowed the land based plants to develop high value specialized products that could increasingly be transported fresh to the markets both by aeroplanes as well as using highly interlinked surface transportation.
Herring fisheries were not conducted in Icelandic waters until the late 1870s when Norwegian fishermen set up bases in Iceland. Using seine nets, laid out close to the shore, the fishing technique of the Norwegians soon caught the eye of Icelanders. Entrepreneurs in the northern town of Siglufjördur established the first Icelandic herring operation for exporting barrel salted herring in 1891.
Gill-nets were introduced for the herring fisheries in 1894 but a breakthrough came in the early 20th century with the more effective purse-seine and drift nets. The bulk of the herring was caught relatively far out at sea off the north coast. Herring being a particularly delicate fish to store and process made short delivery times crucial for producing good quality products.
As a result distant “herring towns” and villages rose to prominence. Siglufjörður in East-Iceland presents a prime example of how the herring fisheries affected urban development in Iceland. Close to the main fishing grounds with excellent harbour facilities, this small village grew into a town of 2,000 inhabitants in just two decades.
Most of the herring was processed by traditional salting in wooden barrels, but spice-salting also became popular. Key markets were in the Baltic countries, Scandinavia and Russia. Herring also became important for the production of fish meal and oil particularly herring that was not fit for salting. The first fish meal plant was built in 1911 with many more being built over the next three decades.
Herring fisheries were slack following the Second World War but hit new heights in the early 1960s. That herring boom was aided by two important technological developments, the electronic fish finder and the power-block. After very successful developments of the herring industry with heavy investiments in fishing and processing capacity as well as infrastructure the herring stock collapsed spectacularly in 1968 not to recover until the 1990s. This had very serious economic consequences for Iceland and later provided an important background when devising a new fishery management system.
Having been idle after the herring crash, the herring fleet turned to develop capelin fisheries in the 1970s. Initially the capelin was exclusively processed into fish meal and oil. Eventually, with a highly focussed research and development programme and targeted marketing ever more of the capelin catch was processed for direct human consumption. The fish was whole frozen with roe filled females as well as separated roes being produced for the Japanese market where they are used for making various delicacy products including capelin roe caviar.
Extension of the EEZ
Until the Second World War Iceland had been among the poorest countries in Europe. During the war Icelanders were catching and shipping demersal fish with trawlers to Britain. After the war trawlers from many European countries flocked to the Icelandic fishing grounds and resumed fishing. Iceland, having declared full independence in 1944 soon relalized the importance of sensible ocean harvesting policies and overfishing became a hotly debated political issue.
In 1952 Iceland unilaterally claimed a 4 nautical mile Exclusive Economic Zone (EEZ), and then further extended it to 12 nautical miles in 1958. This latter extension was fiercely contested by the countries that had established fisheries interests around Iceland. Warships were sent to Iceland by Britain to keep the Icelandic coastguard at bay. The resulting skirmishes were dubbed the Cod War but eventually the dispute was settled in 1961.
A decade later, Iceland was reeling following a sudden and spectacular failure of the herring fisheries in the late 1960s, now one of the best examples of classical overfishing. More reliant than ever on the demersal fisheries (particularly cod), the Icelandic government announced in early 1972 its decision to further extend the EEZ to 50 nautical miles. Again, that decision was received with hostility by Britain and to a lesser extent by Germany. A truce was called in 1973 but it proved short lived.
Two years later when the Icelandic government announced its decision to extend the EEZ to 200 nautical miles as of 15 October 1975 hell broke loose. During the UNCLOS negotiations where Iceland was an active participant, the idea of a 200 nautical mile limit had been in the cards for some time. As before, it was primarily Britain that sternly refused to acknowledge the 200 nautical mile limit and once again called upon her navy to protect British fishing vessels while trawling in Icelandic waters. The dispute soon reached an international level but was eventually settled in Oslo in May 1976. The 200 nautical mile limit became internationally adopted during the 1982 UN Convention on the Law of the Sea (UNCLOS).
The fisheries management system
Before the extension of the EEZ to 200 miles at the end of 1975, effective management of the fisheries, especially the demersal ones, was impracticable due to the presence of large foreign fleets on the fishing grounds. Since then all Icelandic fisheries have come under extensive management restrictions. During the period since the mid-1970s there was a trend towards vessel catch quotas in the management of most fisheries which led to a uniform system of individual transferrable quotas being adopted in 1990. The essential feature of the quota system is the TAC (Total Allowable Catch) which is annually issued for each stock, based on scientific research and formal advice. While the TAC defines the overall catch quantity over one year the catch quotas are primarily distributed through the fixed share of the TAC the individual vessel has.
The whole fishing industry began to change with the allocation of the vessel quotas. The message was clear: To minimize cost and maximize revenues from the fisheries resource. An opportunity emerged to focus on saving fuel by making use of various new technologies, more economical fishing gear as well as changing operational patterns of the vessels. Simultaneously, demands were made for increased product yields, increased productivity of staff, enhanced quality and eventually higher product value. Today the Icelandic fisheries are among the most efficient in the world in terms of catch and value per manpower.
While proximity to fishing grounds are still important, many other factors now define the competitiveness of a fishing company. A catch may be landed in one port but subsequently processed in a neighbouring community or even in an altogether different part of the country. Consequently, some fishing communities have lost the relative advantage that comes from being close to good fishing grounds, while others have benefitted from being close to export harbours or international airports.
The quota system has led to more concentrated vessel ownership and fishing quotas. Around 75% of the quotas now belong to 25 of the largest vessel operators and fishing companies in Iceland. Yet, the fisheries legislation has restrictions in place aimed at preventing excessive concentration. No single company or vessel operator may control more than the equivalent of 12% of the value of the total quotas allocated for all species, and 12% to 35% for individual species.
Fisheries outside the EEZ and species distribution
While Icelandic waters have been the main source of the Icelandic fish catch, there is a long history of fisheries in distant waters. To begin with these were exploratory in nature, e.g. in the Barent Sea and off the coast of Newfoundland in the 1930s and Greenland in the 1940s. However, these fisheries only became significant after 1950. In the late 1950s, redfish was caught in North American waters and redfish and cod in Greenlandic waters. In the late 1960s and through mid 1970s, Icelandic vessels conducted herring and mackerel fisheries in the North Sea while the Flemish cap was a big attraction for catching shrimp in the 1990s. Distant water fisheries have become less important in the last few decades.
The pelagic fisheries are much affected by ocean temperatures and the availability of zooplankton. Pelagic fish migrate in huge shoals, often following known routes but sometimes take unpredictable paths inside and outside the national EEZs. This applies to capelin and the Atlanto-Scandian herring, blue whiting and Atlantic mackerel. The coastal countries around the North-Atlantic have for decades been negotiating their fair share of these pelagic stocks and how that can be done. Many criteria besides the catch history have been developed as the basis for the division, such as where the spawning grounds are, where the fish feed and what they feed on.