Salmon producers don’t want bailout

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When Norwegian farmers were hit by a drought last year, they quickly demanded financial aid from the government and got it, to the tune of around NOK 2.5 billion. Now another natural disaster has hit salmon farmers off the coast of Northern Norway, but they have no intention of asking for a taxpayer bailout.

Local workers on the salmon production line now face layoffs after an estimated 7.5 million salmon have been killed by a natural but deadly algae. PHOTO: Nordlaks/Marten Bril

“That’s not the way we’ll go,” Tom Jarle Bjørkly, manager of Mortenlaks, a small fish-farming firm at Lødingen in Nordland, told state broadcaster NRK. “We want to build up our local community and don’t want to be a subsidized business. We’ve never been that.”

Bjørkly’s fish-farming business is among those hit hard by a natural but deadly algae that suddenly blossomed in fjords off the northern coast this month. An estimated 7.5 million salmon swimming in fish farm enclosures called merder had been killed by it as of Monday, after it entered their gills and suffocated them. Wild fish can swim away from the algae. Those trapped in the merder can’t escape it.

Line Ellingsen of Ellingsen Seafood in Lofoten managed to move around 850,000 of her family firm’s salmon and save it from the deadly algae during the weekend. While she still faces huge extra expenses and some losses, she doesn’t want a bailout either.

“We have lived off and with the sea along the coast, we have experienced hard times earlier,” Ellingsen told NRK. “It would surprise me if you find a fish farmer who asks for money from the state. It’s fantastic that we have a business that’s subsidy-free.”

Relying on insurance and savings
Ellingsen and Bjørkly were responding primarily to a proposal from Robert Eriksson, a former fisheries minister for the Progress Party who now heads a trade association for the seafood business. Eriksson had told industry newspaper iLaks that he thought a crisis package for the salmon producers would be appropriate, not least since the farmers asked for and received drought compensation in addition to the other hundreds of millions they receive in subsidy and tariff protection every year. Seafood analysts have already estimated losses for the salmon producers at around NOK 2.4 billion (USD 276 million).

Bjørkly admitted that the deadly algae has wiped out his company’s production for the rest of the year, “and we’re lying with a broken back.” No small sense of pride and independence, however, along with insurance and money in the bank earned during the past several boom years, makes him resist asking the state for help. He and his fellow fish farmers would rather be granted permission to produce more than their current licenses allow, “to make up for what we’ve lost.”

Newspaper Dagens Næringsliv (DN) reported over the weekend that most salmon producers have insurance, but it will only cover a portion of their losses. Most must cover anywhere from 20- to 50 percent of their losses themselves.

Fisheries Minister Harald Nesvik with a farmed salmon before the crisis hit. PHOTO: NFD

Fisheries Minister Harald Nesvik, also from the conservative Progress Party, traveled to Nordland anyway on Monday to meet with stricken salmon producers. “I have a lot of sympathy for them in this situation,” Nesvik said. “I want to meet them, to see and hear how they’re handling this. I also want to make sure we contribute with practical measures that are necessary right now.”

Nesvik called the salmon deaths in Nordland and Troms “extremely serious, with huge economic losses.” Concerns are also rising that while the salmon farmers themselves are set to absorb their losses and carry on, salmon processing plants employing hundreds of people along the coast will shut down because there’s no fish to process. That in turn will likely lead to layoffs.

Large stocklisted salmon producers, meanwhile, saw their shares jump on the fish-farming crisis in the north, since salmon prices are likely to rise on the lower supply. Salmon companies including Salmar, Lerøy Seafood and Mowi (formerly Marine Harvest) were all trading up late last week, with share prices up as much as 4.5 percent at Salmar. Mowi was once again among the most active shares on the Oslo Stock Exchange Monday, up nearly 1.2 percent by mid-afternoon.

newsinenglish.no/Nina Berglund