The organisation and stability of the market depends largely on matching supply with demand for the benefit of producers and consumers, and is a prime role of the POs. The objective is to avoid catching fish for which there is little or no demand, by encouraging better planning of fishing activity. To conserve fish stocks and remain competitive, producers must anticipate market needs in terms of quantity, quality and regularity of supply.
The setting up of POs has been encouraged by the EU since the creation of the first Common Market policy in 1970.
The UK Government has given POs the responsibility for managing the vast majority of UK TAC for quota species. The EU believes that giving POs greater responsibility for self-regulation in management of available resources ensures that market requirements are better met and that stocks are under less fishing pressure.
A detailed description of the roles and accountabilities of fish POs can be found at: http://ec.europa.eu/fisheries/cfp/market_policy/producer_organisations_en.htm
Because fishing is unpredictable, imbalance between supply and demand is inevitable, so the EU has created mechanisms to correct the worst effects of these fluctuations. One of these guarantees a minimum revenue for fishermen, by setting guidance prices for a number of species. POs may take fish and shellfish products off the market when prices fall below these. The withdrawal price is determined annually by the Commission and fixed by the Council of Ministers. When prices fall and intervention mechanisms are triggered, members receive compensation from the EU through their POs.
Products taken off the market are not automatically destroyed and may be sold for use in the production of animal feed.
Ref: The common organisation of the markets in fishery and aquaculture products ISBN 92-894-2125-8
POs in Scotland vary in terms of their size (number of members), the type of fleet segment making up the membership, and the stocks targeted. Three of the largest POs in Scotland, the Scottish Fishermen's Organisation, Shetland FPO and North East Scotland FO, have a combined turnover in excess of £160M.
In their quota management role, POs have to balance the profitability of vessels with the maximisation of quota uptake. POs in Scotland may use an Individual Quota system or a Pool system, and make use of swapping and leasing arrangements to gain access to additional quota for vessels.
The main aim is to stabilise price while meeting ongoing supply and demand pressures from the marketplace. However, uncertainties will always exist, and individual fishermen need to gauge market conditions and determine how they can optimise landings to maximise revenue on a trip by trip basis.
More detailed information can be obtained from: http://www.defra.gov.uk/fish/sea/manage/qmcp/pdf/060929-study.pdf