ESTONIA
In the case of the entrepreneurs described above, a small loan may be a significant impulse to help them launch or grow their companies or significantly improve their financial situation. Preliminary assessments of funding tools also revealed the greatest market failure in the case of this target group. The growth loan is also a practical option for a coastal fisherman who is currently only catching fish but would like to diversify the business and launch a smallscale fish processing unit, providing added value to the production and creating an opportunity to earn some additional income. As micro and small companies tend to be located in rural and coastal areas, they also have a special role in promoting the local life.
Commercial bank loans may also have drawbacks
fishery sector. This loan scheme is for up to medium-sized companies that usually need a single larger loan amount to make bigger investments, while their cash flows are not sufficient to earn the invested amount back quickly. As the productivity of companies in the fisheries sector is divided over a longer period, the payback period of investments is also longer in their case. This means that the entrepreneurs often need a longer repayment period for investment loans to avoid payment problems. The banks operating in Estonia offer loans, but the loan periods are often too short and their collateral requirements may be too stringent for entrepreneurs. For example, cooperative societies that wish to invest in large-scale joint projects but, as a rule, do not have any fixed assets and lack sufficient equity may struggle to obtain loans.
Thirdly, the long-term investment loan for companies starting or operating in the field of fish processing has been designed for large-scale investments in the
Estonia is currently mapping the market failures which could be alleviated with the help of funds from the next European Maritime, Fisheries, and Aquaculture
Fund (EMFAF) 2021–2027. Preliminary estimates show that the fleet used for fishing on the Baltic Sea requires modernisation and that fishermen have an actual need for financial instruments (loans and collateral). The trawlers used for fishing on the Baltic Sea are old and consume a lot of energy. Using financial instruments to upgrade the fleet would alleviate market failures which have arisen because the fisheries sector cannot get loans from providers of financial services because they lack specific knowledge of the sector.
Financial instruments could contribute to the achievement of green targets The European Commission recently presented the European Green Deal, which, among other things, intends to reduce the amount of greenhouse gases released into the environment. In future, financial instruments could provide one of the methods for contributing to the
achievement of such goals. This would preserve healthy fish stocks and would not increase catching capacities, as current catching capacity would be replaced with a more modern and environmentally friendly alternative. Financial instruments are not intended to compete with credit or financing institutions—the idea is to alleviate market failures. Taking into consideration the specifics of the fisheries sector, it would be possible to offer periods of grace to the loan-recipients or to delay repayment of the loan until the production has been realised, i.e. until the entrepreneur has an actual source of income. As financial instruments are a form of aid which is always repayable, the amounts repaid could be used to make further investments in the sector. This will, in turn, enable the use the same funds for the benefit of more entrepreneurs than the initial amount of money planned for the financial instrument would have actually allowed.
Fourth Baltic Sea Region Fisheries Forum, Autumn 2020, Tallinn
A sector dependent on trade
T
he fourth Fisheries Forum of the Baltic Sea Region will be organised by the Fisheries Information Centre of Tartu University in Tallinn, Estonia. Originally scheduled to be held in May the event has been postponed to autumn 2020 due to the situation caused by the coronavirus. The precise dates will appear later in the year on the website of the Fisheries Information Centre, http://www.kalateave.ee/en. The forum is aimed at the Estonian
fisheries sector including private industry, research establisments, NGOs, and the fisheries administration. Participants are expected from the Baltic Sea region and neighbouring countries. Previous editions of the forum have focused on the fishing industry, the fishing fleet, and coastal fisheries. This year, however, the main theme of the event will be fish trade. And with good reason: the vast majority of Estonian fish catches are exported, so
the international market plays an important role in the economic well-being of the Estonian fisheries sector. In recent years, Ukraine has been the main target market for sprat and Baltic herring caught by Estonian fishermen. The fisheries industry in cooperation with the Fisheries Information Centre has launched a marketing campaign to promote Estonian sprat and Baltic herring to Ukrainian
consumers. At the forum, there will be presentations on the fish trade in Ukraine and on fish exports in the Baltic states. Simultaneous interpretation will be provided for participants in English and Estonian. For more information about the forum, contact: Toomas Armulik, tel.: +372 503 9276, toomas.armulik@ut.ee, or visit the website http://www.kalateave.ee/en/ &VSPl TI .BHB[JOF