The core of the Icelandic culture has always been securely hooked to the end of their metaphorical fishing rod. The fishing industry is the life blood of the Icelandic economy, and is the sole reason many of the tiny, isolated coastal towns came into existence. The system currently operates on a quota system in which companies or individuals have the right to catch, process and sell a predetermined amount of fish each year.
The individual transferable quota (ITQ) system was first introduced in 1984. The system was originally intended to be a short-term experiment, but was made permanent by the Icelandic Parliament in 1990. The legislation allocated Iceland's fishing allowance among fishermen who were boat owners when the system was introduced in the early 1980s.
After much debate, the quota was split up amongst the boat owners based on their fishing records during the three years preceding the system’s debut. Talk about being in the right place at the right time. Successful Icelandic fishermen that had peaked production for the previous 3-4 years in the early 1980s now had an intangible resource which they could sell for a tangible profit.
After 1984, if you wanted to start your own fishery, you had to buy or rent quota from the folks with the allowance. This essentially created a “fishing stock market” in which each part of the fishing quota could be mortgaged, rented or sold on the free market. Fish went from being a common good to a private good.
And while there is no controversy surrounding conversation efforts to ensure the prosperity of the aquatic population, the debate gets heated regarding the method in which the quota was, and still is, divided up. In addition, there is passionate contempt toward the individuals and corporations that currently control the fixed fishing resources and have been driving the consolidation of the industry.
In the current fishing environment, large Icelandic seafood companies that enjoy a significant portion of the quota are starting to buy up the smaller pieces of the pie, causing small fishing towns to essentially shut down as the primary employment options shrivel up. Furthermore, many small town fishing companies have opted to take their quota elsewhere, leaving the work force paralyzed by the lack of jobs available in these isolated, fishing-centric villages.
Take the small town of Djúpivogur, located on Iceland's east coast, as an example. They have a population of around 400 people with a workforce of 250 people. One hundred of those individuals work in the fishing industry. Recently, the largest fishing company stationed in their town, Vísir, threatened to take its quota to Grindavík in search of greener pastures. The people of the town rose up and fought the decision, which has successfully postponed Vísir's decision to leave. However, this is an all-to-common occurrence that calls into question the morality of the quota system.
Much like the American broadcast and cable company Comcast, the large fishing firms have been accumulating market share in an effort to slowly oligopolize the fish market. The consolidation efforts have created enormous barriers to entry that are almost impossible to overcome for small players in the business. These large fishing conglomerates are known as 'quota-kings' or 'lords of the sea' because they are taking over the fishing landscape and there is nothing the general public can do about it.
The reason the larger firms are able to acquire such significant portions of the quota is the core of the problem. Essentially, fishermen that came into the quota received this intangible gift as personal property. In turn, the fishermen, workers and community who played an instrumental part in the success that helped earn these individuals the quota in the first place are left out in the cold – they receive no equity in the system. Thus, the owner of the quota can simply sell off his portion of the system to the large fishing corporations and spend his time vacationing with his new found wealth, while the rest of the key players in the system are left jobless.
So what can be done to stop the growing inequality resulting from the conglomeration of the Icelandic fishing industry? Everyone agrees there needs to be limitations on the number of fish that are caught each year, however, the distribution of wealth seems to be the point of discontent.
Legislation is the best bet for limiting the quota trading that has resulted in the accumulation of large fisheries. Some sort of restriction on small town quota trading would help keep Iceland´s coastal fishing villages intact. Realistically this is unlikely to happen due to the amount of money the larger corporations are producing. The story of Djúpivogur town provides hope for small towns attempting to preserve their economy and way of life, however cash is king, and smaller companies will continue to sell their quota if the larger corporations continue to pay the big bucks to accumulate the small pieces of the quota pie.
The core of the Icelandic culture has always been securely hooked to the end of their metaphorical fishing rod. The fishing industry is the life blood of the Icelandic economy, and is the sole reason many of the tiny, isolated coastal towns came into existence. The system currently operates on a quota system in which companies or individuals have the right to catch, process and sell a predetermined amount of fish each year.
The individual transferable quota (ITQ) system was first introduced in 1984. The system was originally intended to be a short-term experiment, but was made permanent by the Icelandic Parliament in 1990. The legislation allocated Iceland's fishing allowance among fishermen who were boat owners when the system was introduced in the early 1980s.
After much debate, the quota was split up amongst the boat owners based on their fishing records during the three years preceding the system’s debut. Talk about being in the right place at the right time. Successful Icelandic fishermen that had peaked production for the previous 3-4 years in the early 1980s now had an intangible resource which they could sell for a tangible profit.
After 1984, if you wanted to start your own fishery, you had to buy or rent quota from the folks with the allowance. This essentially created a “fishing stock market” in which each part of the fishing quota could be mortgaged, rented or sold on the free market. Fish went from being a common good to a private good.
And while there is no controversy surrounding conversation efforts to ensure the prosperity of the aquatic population, the debate gets heated regarding the method in which the quota was, and still is, divided up. In addition, there is passionate contempt toward the individuals and corporations that currently control the fixed fishing resources and have been driving the consolidation of the industry.
In the current fishing environment, large Icelandic seafood companies that enjoy a significant portion of the quota are starting to buy up the smaller pieces of the pie, causing small fishing towns to essentially shut down as the primary employment options shrivel up. Furthermore, many small town fishing companies have opted to take their quota elsewhere, leaving the work force paralyzed by the lack of jobs available in these isolated, fishing-centric villages.
Take the small town of Djúpivogur, located on Iceland's east coast, as an example. They have a population of around 400 people with a workforce of 250 people. One hundred of those individuals work in the fishing industry. Recently, the largest fishing company stationed in their town, Vísir, threatened to take its quota to Grindavík in search of greener pastures. The people of the town rose up and fought the decision, which has successfully postponed Vísir's decision to leave. However, this is an all-to-common occurrence that calls into question the morality of the quota system.
Much like the American broadcast and cable company Comcast, the large fishing firms have been accumulating market share in an effort to slowly oligopolize the fish market. The consolidation efforts have created enormous barriers to entry that are almost impossible to overcome for small players in the business. These large fishing conglomerates are known as 'quota-kings' or 'lords of the sea' because they are taking over the fishing landscape and there is nothing the general public can do about it.
The reason the larger firms are able to acquire such significant portions of the quota is the core of the problem. Essentially, fishermen that came into the quota received this intangible gift as personal property. In turn, the fishermen, workers and community who played an instrumental part in the success that helped earn these individuals the quota in the first place are left out in the cold – they receive no equity in the system. Thus, the owner of the quota can simply sell off his portion of the system to the large fishing corporations and spend his time vacationing with his new found wealth, while the rest of the key players in the system are left jobless.
So what can be done to stop the growing inequality resulting from the conglomeration of the Icelandic fishing industry? Everyone agrees there needs to be limitations on the number of fish that are caught each year, however, the distribution of wealth seems to be the point of discontent.
Legislation is the best bet for limiting the quota trading that has resulted in the accumulation of large fisheries. Some sort of restriction on small town quota trading would help keep Iceland´s coastal fishing villages intact. Realistically this is unlikely to happen due to the amount of money the larger corporations are producing. The story of Djúpivogur town provides hope for small towns attempting to preserve their economy and way of life, however cash is king, and smaller companies will continue to sell their quota if the larger corporations continue to pay the big bucks to accumulate the small pieces of the quota pie.
