The Caviar Game Rules

An incredible thing has happened: under the pressure of international environmental organizations, seeking to halt rampant sturgeon poaching in the Caspian Sea, Russia stopped its caviar export.

By Konstantin Volkov, The Reuters - IUCN Environmental Media Awards 2001, Winner - Europe.

Caviar, a unique product, which used to bring gold to the Tsar’s treasury, and dollars to the Soviet budget, will no longer be officially exported from Russia. Moscow has to put up with a one year ‘voluntary’ embargo on sturgeon catch. But most likely it won’t help the Caspian sturgeon. Russian caviar will continue to be smuggled to the West via Turkey and Iran, as hitherto.

Khrushev, Sturgeon’s Enemy

In 1958, under Nikita Khrushev’s rule, the Volgograd hydroelectric power plant (HPP) was constructed, preventing the Caspian sturgeon from migrating to its spawning grounds up the stream. As a result, Volga lost 100% of Beluga’s natural spawning grounds, 80% of Russian sturgeon’s spawning grounds, and 40% of Stellate sturgeon spawning grounds. In attempt to counter the catastrophic drop in sturgeon populations, all commercial catch, deadly for young fish stocks, was banned in 1962. Approximately at the same time the first fish farms for artificial breeding of sturgeon species started to be built. All these measures helped to increase the Caspian sturgeon stocks. The 1977 hit the records, when the catch was as high as 27 700 tons as against 461,1 tons in 2000. The annual catches remained stable until the early 80s, when they went down again: the reason was that the sturgeons born before the construction of Volgograd HPP were caught out, while existing fish farms were unable to compensate for the loss. The drop in the Caspian sturgeon population took a dramatic pace in the late 90s: the paralysis of the power led to outrageous poaching. Experts estimate the volumes of poaching to exceed the levels of legal harvesting by eleven times. The situation in the Azov Sea region is even worse: poachers cast up to 40 thousand fishnets every year, harvesting 50 times more sturgeons than fishermen with official licenses.

On top of that, sturgeon has been overtaken by another disaster. The females’ share has been shrinking in Sturgeon populations. The normal sex ratio in a population should be equal, whereas the actual ratio is approximately 12 female to 88 male sturgeon species. All this due to the fact that sturgeons are caught primarily for caviar, the value of which is far and away higher than that of sturgeon meat. A few male species are therefore left for fish soup, while the rest of the male catch is released. Furthermore, the fish processing farms would only buy the catch in the 1:1 proportion, and there’s no reasoning with them. Half of females, that’s it! According to experts, the status of sturgeon species generally, as well as in specific basins may be described as catastrophic. In the Caspian Sea, the main sturgeon basin, the catches over the two last decades dropped by 17 to 20 times, in the Azov basin the decrease is 36 times compared to 1936 and 17 times compared to 1952. The catch in Siberian sturgeon in the Ob River has dropped disastrously as well. Over 60 years, from 1935 to 1994, it dropped by 122 times, and over 9 years from 1985 to 1994, by 7 times.

The UN and the Fish

On 3 March, 1973 the UN Convention on International Trade in Endangered Species (CITES) was signed in Washington. CITES is the main mechanism that controls and regulates trade in rare and endangered species of wild animals and plants worldwide. The Convention has a number of Appendices, which list all those endangered species. At the moment, 152 states, including Russia, have signed the Convention.

Last June the Convention Secretariat warned the four Caspian states (Russia, Azerbaijan, Kazakhstan and Turkmenistan), that it would seek to apply an embargo on caviar expert unless these four states enforce their sturgeon stock protection measures. The warning apparently took effect, since at the Paris meeting the countries assented to one-year embargo on sturgeon catch. Now that’s how it looks like in practice. The countries are authorized to sell the spring spawning stock caviar until the 2001 quotas set by CITES will have been exhausted.

CITES embargo warnings shouldn’t be taken as idle threats. Obviously, we are used to weak enforcement of western market regulations in Russia. But the force of CITES is in its ability to regulate the western market itself. Any inspection there that has doubts about the authenticity of the product license has the right to put a fine on the retailer and confiscate the goods. Yet, another problem arises: how to identify the origin of the sturgeon?

That’s what Dr. Ruben, leading ichthyologist, has told ITOGI Magazine: "Let’s assume that according to the papers the caviar originates from the Persian sturgeon. To prove it, one should make a lab analysis. Each of the sturgeon species has a unique sequence of nucleotides that form the DNA. But the US lab analysis uses a pat of B cytochrome gene, whereas it is proved that the B cytochrome of the Russian, the Siberian and the Persian sturgeon is identical. So from the scientific point of view, such analysis cannot be validated, especially in the absence of samples collection."


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Still in spite of the failures of lab analysis, western retailers are cautious about buying caviar on the side. As the story goes, once Russian tourists brought a few cans of caviar each to the US, with no certificates, of course, expecting to get a bargain. To their surprise, no one wanted to buy a single can of caviar from them. Finally, one retailer yielded: "The hell with you, I’ll take five of those at 5 bucks each! And that’s for personal consumption." This is on CITES enforcement in the West.

However, as for CITES’s imperative request to enforce anti-poaching measures, most experts consider it impossible to fulfill. "CITES urges us to develop anti-poaching measures, says George Ruben, which we’ have already elaborated plenty, but what’s the good of it? They are all left on paper. Fish police should chase poachers, confiscate fishing equipment, impose penalties. However, given the rampant corruption, the police are inoperative. The rivers are netted in broad daylight, and the fish police just bypass those areas.

The Volga Delta and Dagestan are known as distressed regions, with high unemployment. That’s why everyone depends on fishing. Stellate Sturgeon suffers from the economic collapse. In Dagestan, sturgeon business is a throwback of the feudalism. All catch goes to "the master". A few fishermen have boats on their own and sell their catch themselves; others work for "the master" for food.

Sea trawling is another common way of sturgeon commerce in Dagestan. Usually trawlers are owned by high-ranking officials. A trawler owned, for instance, by a "Dagryba" fishery company, puts out to sea absolutely legally, with a license for some smaller fish. Evidently, nobody cares to trawl this fish, what’s trawled is sturgeon. Frontier guards are either fled or bribed. While coastal fishing is somewhat of an amateur activity, trawling is already a serious business. They say, once a similar trawler discharged about two KamAz trucks of sturgeons. A fish police boat wished to inspect the cargo. Suddenly, a local water police boat appeared out of nowhere. Rifles from both sides, the game ended in a draw. The trucks smoothly drove away…

As a result the illegal catch volumes exceed those reported to the state by far. It is also noteworthy, that according to the Russian Fisheries Committee, the legal catch quotas for caviar are not taken up completely. Thus, the 1999 export quota was 162 tons, whereas the official catch was reported as 42 tons. The question of how much was caught illegally may be considered rhetorical: who counted it? According to the CITES, the yearly illegal catch is about 1100 tons, equivalent to US$100 million.

The Caviar Route

The reasonable question is where do these zillions of illegal caviar go? Experts say about 10 per cent of the total illegal catch goes abroad. At the CITES meeting in Paris, the representatives of Russia, Azerbaijan, Kazakhstan and Turkmenistan argued that the ban on legal export would not stop caviar smuggling in the region. By saying this, they hinted at Iran, immune from CITES sanctions. "A substantial share of Azerbaijani caviar is being smuggled via Iran at the moment," gives his opinion Vyacheslav Mironov, Director General of the ‘Russian Caviar’ Trading Company. "Nobody assessed Iran’s sturgeon resources. The existing Persian sturgeon is known to spawn in Volga and Ural rivers. Iran has only one spawning river, up in the mountains. How come this only spawning river may produce 82 tons of caviar, just as much as the remaining Caspian States altogether? Unfortunately, to prove that, a large-scale tagging program should had been carried out years ago, but this had not been done," adds George Ruben.

It is worth mentioning though, that the major caterer of illicit caviar to the world market is Turkey, not Iran. Turkey is the destination of the illicit caviar floods from all CIS Caspian States. That’s where the caviar is packaged and given the ‘made in Turkey’ label, and then re-exported to other countries. Given the fact that Turkish sturgeon resources are not enough to swear by. Still, until 1997 Turkey had been declaring the annual catch quotas of 120 tons, which is 30% higher than Russia’s bid. It went so far that the CITES session in Harare, Zimbabwe put forward a proposal to embargo caviar re-export and reserve the right of the trade in caviar to the sturgeon-producing countries exclusively.

Yet the caviar has first to reach Turkey somehow. One of the major routes is Black Sea Ports, first of all Novorossiysk. When a ship is about to set off for Turkey, Russian and Ukrainian salesmen are approached by some people who insist to buy caviar from them. Aggressively enough not to dare to refuse. And the salesmen are eager to take it, knowing that on the Turkish embarcadero, other people, who would buy the caviar from them at a higher price, would meet them.

The Turks make an effort to legalize the imported caviar. To do that, Turkish middlemen buy out the lists of Russian and Ukrainian salespeople from small hotels, and sign over legal import of five cans of caviar by each of the salesmen appearing in those lists. No import tax is therefore paid. Caviar import via land border is cleared likewise. Salesmen are just about enough for every transaction. Only 10% of the illegal caviar goes abroad, the rest (90%) is consumed domestically.


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"Everyone knows where the illegal caviar concentrates, in what cities; how it is being shipped to Moscow, by what routes, in what warehouses it is being stored. The starting points are Volga Delta and Dagestan. If the caviar originates from Makhachkala, it is shipped up north, to a town called Artesian. Then it may go two ways: one along the Volga River, by trucks, via Nizhny Novgorod; the other directly to Voronezh city. Voronezh cold storages are Russia’s main terminals. Moreover, everyone knows how much one should slip at each of the block posts, it is also of general knowledge that the containers in the refrigerators only have a thin layer of vegetables concealing caviar underneath, and that’s how the customs are cleared. Then the caviar is expedited to Moscow region, as a rule. All markets fall within a certain sphere of influence. Mytishi market, for instance, is where Ukrainians trade in Azov Sea caviar, whereas Cheremushki market specializes in Caspian Sea caviar. Practically all Moscow cold storages are involved in illicit caviar trade. They sub-lease their premises to some shady companies storing unidentified goods. Some time ago, the Moscow Fish and Water Inspection initiated an investigation, which did not succeed. As for the State Fisheries Committee, it could apparently be one of the beneficiaries. Some private sources testify that even legal fish brigades sell to the State no more than 20–25% of their catch," says Alexey Vaisman, coordinator of TRAFFIC (Trade Records Analysis of Flora and Fauna in Commerce) – Russia, an organization that monitors illegal trade in wildlife.

Strangle the trade?

The aforesaid suggests a dark forecast. "Banning the legal export will not help to bring to an end illegal business," grieves George Ruben. "The total catch will decrease by 10%, but 90% will remain. That’s why the export embargo is pointless."

TRAFFIC ecologists suggest a different approach. "Trade, that’s what should be strangled. Once there’s no demand from salesmen, the poaching problem is resolved," advocates Alexey Vaisman. "TRAFFIC opposes to the embargo idea. If Russia is shut off from the caviar export, the country will lose money necessary for subsidizing fish processing farms, whereas poaching will persist. TRAFFIC suggests to keep caviar export as is, but to embargo domestic trade. We realize this measure will not be popular, but Russia’s market is entirely illegal from fancy boutiques to fish markets." TRAFFIC proposes to ban street market trade in sturgeon species.

"Russian police are unable to process any papers, due to their venality and clumsiness. Here’s a simple decision for simple people: no trade, that’s it. It doesn’t matter whether the caviar is legal or not. One of the examples where such scheme works is weapons: you cannot trade in weapons on the street, right? Same thing with caviar: a complete embargo on domestic trade," says Alexey Vaisman. Alas, it is not that clear how to implement such a ‘simple’ decision. Caviar is nonetheless neither drugs nor weapons. The Penal Code does not stipulate caviar trade. Formally, in Moscow (and the capital is the largest consumer of the product) caviar trade in city markets is prohibited, according to a city regulation. However, the caviar does not seem to disappear from Moscow street markets. The reason is that violating the caviar trade regulation would only entail administrative penalty, i.e. a fine.

AquaUNcultural Russia

In fact, there’s another way to improve the situation. At the present time, seven fish restocking farms operate in the Volga Delta. Almost all Beluga sturgeons, about 60% of Russian sturgeon, and 40% of Stellate sturgeon are being re-stocked artificially. Besides, there’s an option called "aquaculture", a farm where sturgeons are bred exclusively for sale, thus easing the pressure on natural population. Vendible sturgeons should weight about 1.5 to 2 kg. Sturgeons put on the necessary weight before too long and hence the expenses are quite moderate. In 2000, the "aquacultures" produced around fifteen hundred tons of fish, whereas the overall catch in Russia, including Siberia, did not exceed eight hundred tons. This year, the State Fisheries Committee is planning to produce in ‘aquacultures’ up to two thousand tons of fish. On the other hand, artificially bred fish does not produce caviar. To get the caviar, a female should be grown for 12-15 years, and the costs are forced up. And yet, the State Fisheries Committee considers the options of artificial breeding for caviar.

As a side note, artificial caviar breeding has been tested long ago in France, and French caviar is now competing with Russian caviar. In 1970s, France accepted as a gift from the Soviet Union some Lena River sturgeons. The French created a fish farm with caviar producing females. The caviar is fertilized, then incubated, and that’s how the young fish is born. The young fish is leased to small fish farms for growth. France has about 50 tons of fish meat every year as a result. Two years ago France was producing one ton of caviar as well, and the plan for the next few years is to increase the artificially produced caviar volumes up to five tons.

Unfortunately, "aquacultures" are far from being a popular business in Russia. The investments are high, and the payoff is expected no earlier than after 5 to 10 years. Not profitable. "I’ve talked to some businessmen suggesting to create an ‘aquaculture’ using the outlets of a power plant," says George Ruben. "No, the answer was, we want a net profit ratio of 40 per cent and up, with no long-term investments."

So, it looks like while the grass grows, the horse starves. Kenneth Stancell, CITES Committee chair assures that the limiting measures regarding caviar exports from CIS adopted in Paris are right and will be efficient for addressing alarmingly plummeting sturgeon stocks in the Caspian basin. Russia, unwilling to fall out with international organisations, signed a compromise agreement on export ban. The result, however, may prove to be counter-productive.