6 percent." The value of the total fish catch in 1993 

 will be about 0.5-percent lower in real terms than in 

 1992.^ In spite of quota reductions and reduced 

 revenue from the fishing sector, most stocks around 

 Iceland are in good shape. However, the cod 

 resource, which accounts for approximately half the 

 marine fishing industry's income, has diminished 

 during the past years. Recent research by the MRI, 

 based on 1993 recruitment, suggests that cod stocks 

 are now stronger than during the past seven years. 

 This might result in improved catches in the future, 

 depending on other external factors, such as weather 

 and oceanographic conditions.* The fishing industry 

 is the backbone of the Icelandic economy, providing 

 about 75-percent of the nation's export revenues. 

 Cod accounts for about half the industry's earnings.^ 

 In 1991, the cod catch was 307,000 tons worth $368 

 million; in 1992 the cod catch declined to 266,000 

 tons worth $320 million.* Icelandic fishermen are 

 now switching to ocean perch, capelin, and shrimp to 

 offset the reduction in cod quotas. Diversification into 

 new areas (especially capelin) helped increase the size 

 of the Icelandic catch, but not the value; the catch 

 increased from 1 . 1 million tons worth $863 million in 

 1991 to 1.6 million tons worth only $844 million in 

 1992.' An overview of the Icelandic fishing industry 

 can be seen in tables 1-3. 



2. Fleet Background 



Iceland is an island nation with a tradition of 

 fishing dating back hundreds of years.'" Iceland 

 declared a 50-mile fisheries limit in 1972." This 

 resulted in the "Cod War" in 1973 with British 

 fishermen who had regularly fished these lucrative 

 grounds. The Icelanders eventually won the fight to 

 manage fishery resources off their coasts, which 

 helped to spur the development of a fleet of large 

 fishing vessels able to operate in the harsh conditions 

 of the North Atlantic.'- Iceland's first stem trawlers, 

 mostly under 500-Gross Registered Tons (GRT), 

 were purchased from Norwegian and Japanese'^ 

 shipyards shortly after 1970. The first high-seas 

 vessels, ranging from 700- to 1,000-GRT, were built 

 in Poland'" and Spain." Some second-hand vessels 

 were also purchased from Norway and the UK during 

 this time.'* Many of these large Spanish and Polish 

 vessels were plagued by frequent breakdowns. 

 Iceland's declaration of a 200-mile Exclusive 

 Economic Zone (EEZ) in 1975'^ spurred further 

 purchases of vessels from abroad. However, most 

 of the vessels in the 1 ,000-GRT class were sold in 



1975; only one vessel in the 1,047-GRT class 

 remained in the Icelandic fleet inventory between 

 1977 and 1982. Icelandic shipyards began building 

 mostly small stem trawlers in 1981 when the first 

 stem trawler was delivered. '* The Icelandic high-seas 

 fleet expanded so quickly during the 1970s, that by 

 1979, the National Research Council reported that the 

 fleet was 40 percent over capacity for available stocks 

 and that a reduction was needed. The number of 



Figure 1. Iceland's high-seas fleet, 1975-92. 



vessels has since decreased from approximately 1 ,000 

 vessels in 1980 to about 950 vessels in 1993." The 

 high-seas fleet remained stable at approximately 30 

 vessels between 1981 and 1986. The decline in 

 vessels was due in part to an increase in the cost of 

 diesel fuel.^*^ Many vessels built after 1980 were 

 designed to conserve fuel. The Icelandic high-seas 

 fleet expanded from 33 vessels in 1987 to 61 

 vessels registering 52,000 tons in 1992. The high- 

 seas fleet, included 13 vessels over 1,000-GRT. 



In 1993, the Icelandic Company, Utgerdarfelag 

 Akureyringa, a member of the Icelandic Freezing 

 Plants Corporation, recently purchased 60 percent of 

 the shares in the former East German fishing 

 company Mecklenberger Hochseefischerei fleet in 

 Rostock.^' The company operates a fleet of 8 

 processing trawlers. This arrangement does not 

 allow the German vessels to operate as Icelandic 

 fishing vessels and their home port is still Rostock, 

 Germany." The vessels will fish for redfish beyond 

 200-miles off the southwestem coast of Iceland." 

 The Icelandic fishing fleet is currently fishing for 

 redfish using newly designed deepwater trawl gear 

 (600 to 700 meters deep) off southwest Iceland in 

 intemational waters.'^" 



214 



