The situation has resulted in a decline in total official catch for Russian boats of 56 percent over the two past decades. Despite these hurdles, many of the more sophisticated traders say they remain optimistic. They believe recent government reforms, particularly 10-year vs. five-year quota allocations, will help revive the industry.

And the forecast for 2009 is optimistic. Many observers now believe prices will remain strong and demand will continue to grow in Russia and overseas.

Russia's fishing fleet is woefully outdated. In the next decade, the situation will be critical when approximately 90 percent of vessels will be over 20 years old and not equipped with modern navigation and tracking technologies, and will be unable to fish extensively in international waters.

Most banks are unwilling to finance fleet modernization, as they consider the industry too big a financial risk. In addition, the old fleet results in increased fuel consumption. Fishermen report that fuel now amounts to 30 percent of the cost of their catch, and Russia's ability to supply Pollack could not exceed 40,000 tons of fillets, due to a lack in capacity.

The government has acknowledged the challenges and credit problems, but it has so far taken no action to provide alternative funding sources. Still, industry is hopeful that the new quota system with longer-term allocations will increase certainty and help ensure credit.

Poaching remains a serious problem in Russia. While there has been some improvement in pollock and cod, the situation remains dire for crab and sea cucumber and mussels. Illegal fishing of protected species, unlicensed foreign boats in Russian waters, and catches exceeding quotas continue to deplete fisheries and impact legitimate fishermen.

Although Russia banned the export of live crab in May 2007, large amounts continue to be smuggled out of the country, primarily to Japan, South Korea and China. More than 30,000 tons of crab were taken from Russian waters during the first half of the year and sold to Asian markets. The amount is already triple the legal quota for the year.

Russia also lacks fish processing facilities, which reduces the potential for adding value to the fish caught. Almost all Russian pollock will be processed into fillets in China. It is not in a fishing boat captain's interest to haul his catch back to Kamchatka or Sakhalin when he could take it directly to processing plants in China, Japan or Korea. Currently, exports of unprocessed frozen fish make it back to Russian shores.

During the Soviet era, the government operated both on-shore fish processing facilities and maintained giant processing ships offshore. Recent changes in federal fishing law will require all ships to return to a Russian port prior to export.

While traders view this change as adding costs and time, overall they are supportive as the end result likely will be a reduction in poaching.

More than 40 federal agencies regulate the fishing industry, often unpredictably, overstepping their mandates and issuing contradictory regulations.

One bureaucratic disagreement over the interpretation of a new fishery law turned the 2008 Sea of Okhotsk pollock season into a disaster for many Far East fishing companies. The Northeastern Border Guard Directorate narrowly interpreted the new regulations and accused nearly all of the fishermen in the area of poaching and other violations, detaining dozens of boats for weeks pending investigation and court decisions.

The RFE Military Prosecutor's Office eventually stepped in and found the directorate's actions inappropriate, ruling in favor of the fishermen. By then the season had been disrupted, companies were unable to meet their quotas, and they suffered heavy financial losses due both to lost productivity and un-refunded fines.

Within the framework of a recently enacted national program, Moscow has pledged to allocate 62 billion rubles (2.5 billion USD) to support and encourage Russia's fishing industry. Some 30 percent of the program's budget will be allocated to the Russian Far East to build 27 new research and fishing vessels, 50 fish farms, and to expand fishing port facilities in Vladivostok, Petropavlovsk-Kamchatskiy, Nevelsk, and in a number of smaller towns.

The GOR has also set up a fisheries protection program through 2020. Federal fish hatcheries in the Russian Far East are also meant to increase production and guard against precipitous declines in fish stocks.

The Pollock Association is taking significant steps to safeguard the future of the fishing industry in Russia. Pollock, once severely over fished with the catch estimated to be three times over quota, is reportedly now contained to only 20 percent over quota.

The association is working for sustainable fishing by pursuing Marine Stewardship Council certification.