The Scottish Fishing Industry - The Royal Society of Edinburgh

March 2004

Inquiry into The Future ofthe Scottish Fishing Industry

Financial support for the RSE Inquiry into The Future of the Scottish Fishing Industry

Aberdeenshire Council Scottish Enterprise GrampianAberdeen City Council Shell U.K. Exploration and ProductionClydesdale Bank Shetland Islands CouncilJ Sainsbury plc Western Isles CouncilHighlands and Islands Enterprise

Our visits were also facilitated by local authorities and other bodies in the fishing areas where we held meetings.

The Royal Society of Edinburgh (RSE) is Scotland’s National Academy. Born out of the intellectual fermentof the Scottish Enlightenment, the RSE was founded in 1783 by Royal Charter for the “advancement oflearning and useful knowledge”. As a wholly independent, non-party-political body with charitable status,the RSE is a forum for informed debate on issues of national and international importance and draws uponthe expertise of its multidisciplinary Fellowship of men and women of international standing, to provideindependent, expert advice to key decision-making bodies, including Government and Parliament. The multidisciplinary membership of the RSE makes it distinct amongst learned Societies in Great Britainand its peer-elected Fellowship encompasses excellence in the Sciences, Arts, Humanities, the Professions,Industry and Commerce. The Royal Society of Edinburgh is committed to the future of Scotland’s social,economic and cultural well-being.

Foreword

The fishing industry is of much greater social, economic and cultural importance toScotland than to the rest of the UK. Scotland has just under 8.6 percent of the UK population but lands at its ports over 60 percent of the total UK catch of fish.Many of these are ports with relatively remote communities scattered along anextensive coastline and which, for centuries, have looked to fishing as the mainsource of employment.

Restrictions imposed under the Common Fisheries Policy (CFP) affect all Europeanfishing fleets, but they have proved particularly severe for the demersal or whitefishsector of the Scottish fishing industry – with the potential to inflict lasting damageon the communities concerned.

There have been a number of recent or ongoing inquiries into the UK fishingindustry, but none has specifically focused on the particular problems for Scotland.The Royal Society of Edinburgh (RSE) believed there was an urgent need for such aninquiry. Given the differing views and disagreements amongst the various groupsinvolved in the fishing crisis (including fishermen, fishery scientists, regional andgovernment authorities and the European Commission) the RSE also believed suchan inquiry should be independent. As Scotland’s National Academy, it has access to arange of high quality scientific and non-scientific expertise appropriate for such anindependent inquiry. Further, while recent inquiries have been directed to analysingthe causes of the crisis, few have attempted to outline the realistic options fordeveloping fisheries which are genuinely sustainable and economically viable in thelong term.

As with previous inquiries, it would have been impossible to carry out our taskwithout the generous financial support and help of those organisations listed on theopposite page. The RSE is most grateful to them. The response to the Committee’srequest for evidence met with an equally generous response with written evidenceforthcoming from a very wide range of bodies and individuals. This input wasabsolutely essential to the work of the Committee and we are again most grateful toall who made this contribution.

The Committee worked extremely hard to accommodate the widespread views put toit. A particular debt of gratitude is owed for the efforts of Dr Marc Rands as theSecretary to the Committee.

Sir David SmithChairman of the Inquiry

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Executive Summary

Introduction1. The Scottish fishing industry has been managed under the Common Fisheries Policy (CFP) of the EuropeanUnion for the last thirty years. The policy has failed to achieve adequate conservation of certain key fish stocks, sothat an important part of the industry and the livelihoods of many in Scotland’s fishing communities are nowunder threat.

2. The catching industry is divided into three principal sectors. The pelagic sector for fish living in the upperlayers of the sea, such as herring and mackerel; the shellfish sector for prawns, shrimps, lobster, crabs and molluscs;and the demersal sector for fish living near the sea bottom, such as cod and haddock. The pelagic and shellfish sectors are currently profitable and stable. It is the demersal (or whitefish) sector that is in deep trouble;several of its stocks are below safe levels and in risk of collapse, with cod stocks, in particular, seriously depleted.

Common Fisheries Policy (CFP)3. The development of the CFP is described in the main report. This clarifies some common misunderstandingsabout the original negotiations in forming the CFP and highlights in particular the agreement to give memberstates exclusive coastal zones. The agreement on this was revised in 1983 to give protected 12 mile limits aroundthe coasts of all member states and this gave Scotland one of the most extensive areas of inshore fishing in theEuropean Union. However this agreement is subject to renewal every ten years. While we do not anticipate anychange, because of the importance of its coastline to Scotland, we recommend Ministers endeavour to have theexisting 12 mile limits made permanent instead of being subject to renewal every ten years. (para. 2.10).

4. Total Allowable Catches (TACs) and quotas were introduced in 1983, both to conserve fish stocks and as abasis for their allocation between nations. These were based on each country’s historical share of the total catchbut this principle of ‘relative stability’ also aimed to give preference (‘The Hague Preferences’) to coastalcommunities dependent on fishing, such as those in Scotland. The North Sea is by far the most important fishingarea for Scotland, and although there are other nations with a North Sea coastline to share this resource, the UKhas much the largest share, with Scotland having the preponderant part.

5. A potential threat to coastal communities and the principle of ‘relative stability’ arises if the quotas on whichthey depend are sold to fishermen and/or fishing enterprises from other countries. This has not so far been aproblem for Scotland and anyone purchasing quota from a Scottish skipper would have to acquire a UK licence,register their vessel in a UK port, base their operation there and be subject to UK rules on inspection, employmentand social security regulations. Nevertheless worries about this remain in Scotland’s fishing communities andthere have been cases of quota purchase in England by fishing interests from other member states.

6. European Union (EU) Structural Funds, in particular the Financial Instrument for Fisheries Guidance (FIFG),can assist the fishing industry by helping to fund training, de-commissioning and infrastructure (such as harboursand marketing facilities). But FIFG is also able to provide resettlement grants for fishermen leaving the industryand to fund early retirement; the European Regional Development Fund can be used to support new businessventures. Little has so far been used for these latter purposes and, given the current crisis, we recommend thatMinisters review the arrangements for use of the Structural Funds in order to make maximum use of FIFGand the other Funds for the economic diversification of fisheries dependent areas. (para. 2.31).

7. Unlike almost all other activities, the conservation of marine biological resources is an ‘exclusive competence’of the EU so that most important decisions about the CFP lie exclusively with the Council of Ministers. A majorshortcoming of the CFP is that it is far too centralised, and too remote from those that are affected by it. With theimminent enlargement of the EU to 25 members, the problems of overcentralisation and the difficulty of reachingrapid and satisfactory decisions are likely to get worse. We therefore recommend that Ministers reconsider theirposition over the EU’s exclusive competence for conservation of marine biological resources, with a view togetting this deleted from the proposed EU constitution so that the principle of subsidiarity may apply tofisheries, as it does to other matters. (para. 2.44).

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8. Many Scottish fishermen have told us they would like the UK to withdraw from the CFP. We see no prospectof this without the UK trying to renegotiate the terms of its Treaty of Accession. It is unlikely that new terms forremaining in the EU could be negotiated or that they would allow withdrawal from a policy that all othermember states accept. Withdrawal altogether from the EU would have major and damaging consequences for theScottish economy (e.g., it would impact on the 60% of Scotland’s manufactured exports that go to the EU, itwould deter inward investment. and the substantial aid that Scotland receives from the EU Structural Fundswould no longer be available). Withdrawal would have to be followed by negotiations with the EU on behalf ofthe member states with whom Scotland has traditionally shared fisheries as well as with countries outside the EUsuch as Norway, Iceland and the Faroe Islands. Even for fishermen, it is doubtful this would lead to any bettersituation than currently exists under the CFP.

Economic and Social Impact9. Scotland has 8.6% of the UK population, but landed 62% by value of the total fish catch in 2002. Fishing is ofmuch greater importance to Scotland than to the UK as a whole. Direct employment in catching, aquaculture,and processing amounts to 19,800, just under 1% of total Scottish employment; if indirect effects are taken intoaccount, the total employment dependent on these industries rises to 48,000, roughly half the direct and indirectemployment dependent on North Sea oil at its peak. (para. 3.2).

10. Viewed as a business, the overall commercial performance of much of the fishing industry has been good. Inthe catching industry, the pelagic sector successfully survived the acute crisis of the late 1970s when the herringfishery had to be closed for some years. It subsequently modernised, reorganised and is now very profitable, withits fleet of 33 vessels generating gross earnings of £98 million in 2002. The shellfish sector is also profitable, butthere is concern that it is approaching over-capacity, requires modernisation, and that whitefish vessels mightdivert their effort into catching shellfish.

11. In the whitefish sector, there has been a collapse in profitability as a result of quota restrictions. Although itcatches a diversity of species, its difficulties have been dominated by cod and haddock, which now contributeonly 40% of the total value of the landings. Earnings from cod declined from £45 million in 1998 to £24 millionin 2002. Landings of all demersal fish by the Scottish fleet declined from 300,000t in 1982 to 130,000t in 2002.

12. The whitefish sector now depends on public intervention in one form or another. The decline in profitabilityplaces increasing pressure on vessel owners who have typically used debt finance for the purchase of vessels.Hence, much of the government money for decommissioning passes to banks, with relatively little left for owners,although in the absence of these funds the banks would stand to lose much of their money through bankruptcies.The situation would be alleviated, and decommissioning money could be put to more constructive use, if amoratorium on debt servicing could be arranged with the financial institutions and steps taken to ensure that theremaining vessels are the most modern in the demersal fleet. We therefore recommend that Ministers and thefinancial institutions should seek to negotiate an arrangement for debt rescheduling and restructuringunder which the demersal fleet is granted a debt service moratorium for an agreed period. (para. 3.69).

13. For the longer term, the financing of the Scottish fleets as a whole should be based on terms that are betterable to withstand the fluctuations in earnings that are characteristic of this industry. We recommend thatMinisters and the financial institutions should examine the case for establishing a Fishing Industry FinanceCorporation. (para. 3.69).

14. The traditional Scottish system of shared ownership, or owner skippers, while having many advantages, maynot be well suited to an industry that requires to raise so much capital. The case for reforming into a corporatestructure needs to be considered. It could make it easier to raise capital for investment, without the problems ofhuge personal debt, and to buy quota to prevent them moving to other nations. We recommend that theScottish Executive and the Scottish fishing industry should jointly examine the industry’s ownershipstructure to establish whether a regrouping into a corporate structure would strengthen its ability tocompete in the future. (para. 3.69).

15. There would be much advantage if the institutions representing the fish catching industry could develop amore cohesive structure. This would enable the industry to take a more responsible and effective role inmanagement issues and in discussions with government. We recommend that the Scottish Fishermen’sFederation (SFF) and other representative bodies in the catching industry should consider how they cancome together most effectively to discuss issues of stock conservation with government scientists andnegotiate effectively on management and regulatory issues. (para. 3.69).

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16. Much of the fish catching industry is concentrated in coastal areas and islands where there are few prospectsof alternative employment. Whereas the shellfish sector is distributed right round the Scottish coast, the pelagicand demersal sectors are concentrated in the North East and in Shetland with sizeable landings also in Caithnessand Sutherland. Employment in the industry has already declined over the last 10 years by 40 per cent. This is notjust because of the crisis in the demersal sector, but as a result of technological advance throughout the industry.We expect this to continue, with technological advance, in the face of a finite resource, resulting in furtherreductions in employment in all three sectors. The impacts of the present and future reductions in the fleet arediscussed as they relate to the industry as a whole but with particular attention to the North East Coast (paras. 3.54 – 3.58), Shetland (paras. 3.59 – 3.61) and Caithness and Sutherland (paras. 3.62 – 3.64). Despite thejob loss that has already occurred, both the North East and Shetland have unemployment rates below thenational average (2-3% and 1.5% respectively). (para. 3.57).

17. We recommend that consideration be given to early retirement schemes for fishermen wishing to leavethe industry and to resettlement grants, both of which are eligible for FIFG funding; and that the resourcesof Highlands and Islands Enterprise and the Scottish Enterprise network as well as the EU Structural Fundsbe used to the maximum extent possible to help retraining and the promotion of new small business infisheries dependent areas. (para. 3.69).

18. The processing industry in Scotland represents 49% of the UK total, employs more people than the catchingindustry and much of it is currently in a healthy state. A substantial proportion of the fish it processes is imported(e.g. for the UK as a whole only 8% of the cod used is from home sources). Although this figure will be higher forScotland, availability of imported supplies can protect it at least to a considerable extent from the current crisis inthe whitefish sector.

19. Priority should be given to exploiting the proposed introduction of traceability as a means of aligning thecatching and processing industries with retail trends and consumer preferences. It could also assist with highquality branding. We therefore recommend that the Scottish Executive Process and Marketing Schemeshould be enhanced and greater effort put behind broadening the scope of traceability and branding. (para. 3.88).

20. Public expenditure (via the Scottish Executive, UK Government and EU) to pay for enforcement, fisheryscience, FIFG grants and decommissioning provided around £70m in 2002 in Scotland, in support of the fishingand processing industries (Table 3.9 in main report). Most went to the catching sectors, (total turnover £329m),and in particular the demersal sector (turnover £137m). But if the industry is well managed in future so thatstocks recover and are sustainable, the contribution it can make to the Scottish economy would be well beyondthe cost of any support it may be given.

The Science of Stock Assessment and its Role in Fisheries Management21. The assessment of fish stock sizes for the setting of Total Allowable Catches (TAC) is based upon collation offishery landing statistics from the different EU nations by the International Council for the Exploration of the Sea(ICES). The principal method used for calculating stock size is Virtual Population Analysis (VPA). This has been inuse for over 30 years, but is subject to error if misreporting, illegal landings and unrecorded discards occur to asignificant extent; stock sizes may then be overestimated and TACs set too high for sustainable stockconservation. Much more accurate records of true landings and discards are needed but changes in the scienceused are also necessary. We recommend that ICES should consider new statistical approaches as alternativesto VPA for management of the fisheries, particularly methods in which uncertainty (and hence businessrisk) can be quantified. (para. 4.24).

22. Trends in recruitment (e.g. the process of adding new individuals to a population by reproduction),abundance and distribution of fish stocks can be studied by methods that are independent of commercialfisheries. The International Bottom Trawl Survey (IBTS) and associated plankton sampling – in which Scotlandplays a major role – provide valuable data on the state of North Sea fish stocks.

23. While survey techniques, such as IBTS, provide valuable information on recruitment that cannot be obtainedfrom commercial vessels, we recommend that Fisheries Research Services (FRS) should begin to developmethods for the use of commercial vessels to aid fishery surveys and also how accurate recording ofcommercial catches can best be achieved. (para. 4.38).

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24. We also recommend ICES should convene a forum to review IBTS design, fishing gear and methodology.Industry advice should be sought, especially with respect to gear improvement, trawl operation and how best tosample hard ground. Greater standardisation across nations should be pursued. Assuming new procedures areadopted, calibration should be addressed. (para. 4.38)

Review of ICES scientific advice on major fish stocksNorth Sea Cod

25. Cod stocks have declined to historically low levels. Excessive exploitation of the cod fishery has resulted in areduction in landings from more than 200,000t in 1985 to only 50,000t in 2001 by all countries fishing in theNorth Sea. Had fishing mortality been sustained at 1960s levels and not been allowed to rise, through moreeffective conservation policies, the Scottish fleet’s share of this would have been an additional 50-60,000t, wortharound £80-100 million a year. The main cause of the decline has been high fishing mortality, with the removal of over 60% of the stock each year. Adverse environmental conditions for the recruitment of cod since 1990 have made a minor contribution. The high fishing mortality has resulted in a stock comprised of mainly smallyoung fish that cannot generate the level of recruitment that older fish can achieve. This also impedes stockrecovery.

26. Unrecorded landings and discards have played a part in this, but it is not only fishermen who are to blame.Calls by scientists for reduction in fishing mortality since 1990 have been rendered less effective by a persistenttendency to set TACs that were too high, partly as a result of errors in scientific methods that over-estimated stockabundance. This resulted in fishing mortality that was too high. A major strategic error was made in themanagement of the abundant 1996 year-class in the North Sea, when scientists recommended increases in TACsinstead of recommending low fishing mortality that would, if accepted, have averted the current crisis. In general,cod stocks have been over-fished in compliance with erroneous advice from ICES Advisory Committee on FisheryManagement (ACFM) until the last few years when advice was to reduce fishing for cod to the lowest levels andthen to close the fishery altogether.

27. In the light of the above, we recommend that the EU manage demersal fish stocks so that fishingmortality is much lower than over the past 15 years, aiming for a value of fishing mortality (F) less than 0.4, corresponding to removal of less than one third of the stock each year. (para. 4.82). This strategy has been successfully applied to mackerel and herring over recent decades and it will require modification of the 1999 EU-Norway agreement that specified a target F=0.65 for cod.

28. Also, ICES recommendations should aim to promote and sustain recruitment so that there is a goodspread of age classes of females up to age 5 years old and over in demersal stocks. (para. 4.82). Without fitand older mother fish, prospects for stock recoveries are severely compromised.

The EC Cod Recovery programme

29. The European Commission has proposed a cod recovery programme with the aim of restoring the North Seacod to 150,000t in a time span of 5 – 10 years. At the time of writing, this programme has still not been agreedeven though it was first proposed three years ago. It is also flawed because it gives no indication of how to achieverecovery of the stock from its present low level, (around 50,000t), to 70,000t, the level below which the stock isconsidered to be in danger of collapse (Limiting Biomass – Blim). The subsequent rebuilding to 150,000t dependson continuing to set low annual TACs and ensuring that they are adhered to.

30. We consider that the low TAC of 27,300t agreed for cod in the North Sea as a whole in 2004 may be lowenough to permit recovery. The theoretical minimum time for recovery of cod stocks is 5 years, with 10 years forfull recovery more likely. A well managed cod stock in the North Sea should sustain landings of ca. 200,000t evenwith recent environmental changes. However, it is unlikely, even if a full recovery of cod stock is achieved, that allof the existing demersal fishing capacity can be fully employed.

31. Since a recovery plan is necessary, we recommend:

• The current TAC of 27,300t for cod in the North Sea should be used as the starting point for a recoveryprogramme and should be fixed until Bpa (the safe minimum spawning stock biomass) of 150,000t isattained. (para. 4.82).

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• The by-catch of cod in other fisheries should be minimised by ensuring the use of species selective fishinggears; TACs should be supplemented by limits on effort and designation of closed areas. (para. 4.82).

• Demersal stocks should be managed as a mixed fishery with a single overall limit on effort and nodiscarding, coupled with measures such as selective gears, protected areas and real-time temporaryclosures to prevent over-exploitation of individual species and immature fish. After the cod recoveryprogramme, TACs should be retained only to guide regulation of effort and ensure relative stability. (para. 4.82).

32. It should be acknowledged that setting of TACs is not always possible, owing to lack of data, or the nature ofsome demersal species. Management should be free to regulate by other means such as effort and closed areas,without depending on precautionary TACs which often have little meaning.

33. Restriction of fishing activity through TACs and catch quota has failed in recent years and is unlikely to besuccessful owing to fundamental shortcomings in both science and enforcement. If indicators of stock status,spawning stock biomass (SSB), size composition, age composition or catch per unit effort (CPUE) require thatfishing mortality be reduced, management measures must therefore include other means to reduce effort on thetarget species.

North Sea Haddock

34. Scotland has the largest share of haddock landings from the North Sea and it accounts for a larger share of thefleet’s income than cod. Both west coast and North Sea haddock stocks are in a healthy state and can sustain 2003levels of exploitation. In recognition of this the Council of Ministers agreed a substantial increase in the haddockTAC for 2004. However, there is concern that this is a volatile stock and its current healthy state is due to the single 1999 year-class. Subsequent year-classes in the North Sea are amongst the weakest on record. We recommend that Ministers should aim to restore haddock landings from the North Sea to long-termaverage values of 250,000t, given the importance of this stock to Scottish demersal fisheries. (para. 4.88).

Whiting

35. The status of whiting, both in the North Sea and off the west coast of Scotland, is very uncertain. Landingshave steadily declined. Although it has the potential to be the most abundant whitefish species, it is thereforepresumed to be below safe biological limits. Fisheries Research Services (FRS) and ICES should urgently seek avalid method for assessing whiting in the North Sea and the EU should initiate a whiting recoveryprogramme. (para. 4.93).

Monkfish

36. Monkfish depend on recruitment from unknown sources of spawning females presumed to be located in deepwater. Landings peaked in 1997 and there is no logical reason to suppose that increased landings are possible fromthis species. It is now widely captured in small numbers as a valuable by-catch. Management by TACs isproblematic for this species. Monkfish around Scotland should be managed through limitations on demersalsector effort rather than catch quotas. (para. 4.96).

Nephrops

37. Nephrops (Nephrops norvegicus: e.g Norway lobster, Dublin Bay prawn or langoustine) fisheries make a majorcontribution to Scottish landings. The stocks are in a healthy state, and current levels of exploitation aresustainable. The Council of Ministers has now also agreed a substantial increase in the TAC for 2004. Innovativeuse of video surveys and catch per unit effort data has provided a good basis for management. We recommendthat the EU Commission and Scottish Ministers should ensure that Nephrops fishermen adopt selective gearsthat do not capture white fish. Management should be vigilant against diversion of effort from the whitefish sector into Nephrops. (para. 4.101).

Pelagic fisheries (herring and mackerel)

38. Following the crises in the 1970s, management of pelagic fisheries has adopted a policy of low fishingmortality values, removing less than 25% of the stock each year. Errors in stock assessments are small, so thatTACs are reliable. Production is now high and sustainable given good recruitment, so that management of pelagicfisheries has been a success – especially since it is simplified because these are single species fisheries.

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Industrial fisheries

39. Industrial fisheries, predominantly of short-lived sandeels and Norway pout, are a negligible part of theScottish fishing industry, but are a major activity by certain other nations such as Denmark. Indeed, they accountfor more than 50% of all fish landings from the North Sea – ca 1,000,000t. ICES believes it is sustainable at itspresent level when considered in isolation, but there are three matters for concern: 1) the fishery has not beenable to land its TAC in recent years; 2) the ecosystem effects on other fishes and birds of the removal of largequantities of sandeels each year is poorly understood; and 3) because industrial fisheries are so large, even a smallpercentage of by-catch could have substantial effects on other species. We therefore recommend the EUCommission should ensure that the industrial fishery TAC should be decreased below the recent reportedlandings and take account of interannual variation in abundance of sandeels. (para. 4.117). We alsorecommend that FRS should direct research at the potential ecosystem effects of the fishery. (para. 4.117).

Deep-Sea Fisheries

40. These fisheries make only a small contribution to landings by Scottish vessels. They are slow-growing speciesand take long to reach maturity; TACs did not come into force until 2003. The EU Commission should recognisethe vulnerability of deep-sea species and seek to regulate deep-sea fisheries by effort control, asrecommended by the ICES Advisory Committee on Fishery Management (ACFM). (para. 4.121).

The Structure of Fisheries Science

41. The annual requirements for numerous stock assessments place great pressure on the small body of Europeanfishery scientists available to participate in ICES. The European Commission itself recognises that the scientificresource is not organised or used in the optimal way. Additionally, ICES working groups are not open to the widerscientific community (or the fishing industry or environmental groups) and this may contribute to the apparentreluctance to modernise their methods. Within Scotland, the national intellectual resource could be betterdeployed if non-governmental scientists could participate in ICES assessments, and if exchanges betweengovernment and non-government research centres could be facilitated. Opening a portion of FRS research fundingto competition, and allowing FRS to use grant-in-aid to lever research funds from other sources (as with ResearchCouncil Institutes) would further improve the situation.

Fisheries and the Environment42. The marine environment is important for a variety of reasons besides fisheries, and its stewardship is of highpriority. This has been recently recognised in the CFP by its support for Ecosystem-Based Fisheries Management.

43. The impact of fisheries on the environment is poorly understood. Fishing usually targets species at the top ofthe food web since they tend to be larger and of higher market value. As these species are wiped out, attention isshifted to species lower down, but the effect on the complex dynamics of marine food webs is little known.Particularly vulnerable are the long-lived, less abundant species of deep-water fisheries. Land-based industries are required in advance to carry out Environmental Impact Assessments of new ventures, so we thereforerecommend that the Scottish Executive should consider some form of Environmental Impact Assessmentfor new ventures by the fishing industry. (para. 5.6).

44. Because marine ecosystems are very poorly understood, we recommend the Scottish Executive and therelevant funding bodies should provide increased investment in the science required to understand marineecosystems and to develop realistic models of the marine ecosystem. (para. 5.6).

45. Fishery regulators in the past have failed to address adequately the impact of fisheries on the environment.Although requirements for setting up a network of Marine Protected Areas (MPAs) is initially derived from the1992 convention on biodiversity, there has been little progress on their establishment so far. In order to integratefishing with wider environmental concerns, we recommend that the Scottish Executive should ensure that forums (e.g. RACs and inshore management committees) established for regional fisheries management should be tasked with helping to implement environmental policy relevant to their region. This would include the establishment of marine protected areas (para 5.12)

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46. Environmental factors also affect fishing. It is known that there has been a rise in temperature in the NorthSea, and a recent article in Nature 1 has shown this has affected the distribution of plankton species which are partof the food for juvenile cod – although this article also states that over-fishing is nevertheless the primary cause ofthe decline in cod stocks. A variety of marine predators also feed on fish: birds, seals, porpoises and othercetaceans – which eat just as much fish as seals. They target non-commercial as well as commercial species, andthe preferred food of seals, for example, is sandeels. Culling of seals is sometimes advocated to alleviate pressureon fish stocks, but there is no evidence that this would have the desired effect.

The Role of Aquaculture47. Aquaculture has sometimes been viewed as being able to replace the shortfall caused by declining capturefisheries. It is currently a major sector of the fishing industry and has grown at about 10% per annum in the tenyears up to 2002. It is dominated by the production of salmon – yielding 145,000t in 2002. It accounts for ca. 50%of Scotland’s food exports and directly employs 2,000 (and a further 4,500 in associated support activities).

48. Cod farming in Scottish aquaculture is in its infancy. Significant investment has taken place in Norway, withthe most optimistic estimates suggesting a production of 400,000t in the next 10 – 15 years. The British MarineFinfish Association suggests that 30,000t annually may be produced by 2013. However, there are current problemsin the areas of early maturation, slow growth, and lack of effective bloodstock selection programmes.

49. Although there is a clear role for aquaculture in cod production, it is likely to remain a ‘niche’ product for theforeseeable future and will not be able to substitute significantly for wild-caught cod in the short to medium term.Also, aquaculture production of both salmon and cod relies heavily on the use of fishmeal and fish oil, derivedmainly from Southern hemisphere industrial fisheries. We recommend that further research should be carriedout into the substitution of fish oil in farmed fish diets with plant oil as a means of promotingsustainability of industrial fisheries. (para. 6.29). While there is public concern over theenvironmental impacts of aquaculture, the impact in Scotland is very strictly controlled.

50. The Scottish Executive’s recently launched Strategic Framework for Scottish Aquaculture envisages that anessential feature of future development will be diversification into species additional to the current mainstays ofsalmon, rainbow trout and mussels. We recommend that Scottish Ministers should consider how researchwith new species such as cod can be supported to enable the diversification of Scottish aquaculture

production. (para. 6.29).

Management of Scotland’s Fisheries for Sustainable Development51. Under the current CFP, the highly centralised process by which policy is determined and decisions madesuffers from a number of serious weaknesses:

• lack of clear long-term vision for the future of European fisheries;

• reactive rather than proactive approach to fisheries management;

• non-transparency;

• lack of involvement of stakeholders in policy formation;

• lack of timeliness in decision-making;

• distortion of rational policy proposals; and

• lack of any accountability for bad decisions.

52. Against this background, the decision to establish Regional Advisory Councils (RACs) is welcome. This fallsshort of what is ultimately needed, and the proposed regions (such as the North Sea) are too large for efficientmanagement, but it offers the opportunity to begin the process of decentralisation and greater involvement offishermen. We recommend that Ministers should press the EU Commission to set a timescale for the reviewof the RACs so that transfer of some management responsibilities to them can be considered. The fishingindustry should seize the opportunities presented by RACs to demonstrate a responsible role in fisheriesmanagement. (para. 7.18).

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53. The Cod Recovery Plan proposed under the CFP is analysed. While we recognise that the exceptionallyserious condition of cod stocks requires regulation targeted at cod, we consider that, in a multispecies fishery,there are difficulties in trying to manage a single stock. If the principal aim is to have a sustainable whitefishsector, the better option in the longer term may be to focus on maximising the harvesting potential from the fullrange of demersal fisheries in Scottish waters.

54. We consider that illegal landings and discards are always likely to be problems so long as regulation of thedemersal sector is based on catch quotas and single species TACs. We therefore recommend that the EU Commission should replace the present system of catch quotas for the demersal sector and Nephropstrawl fisheries with effort control (days at sea) and closed areas. The present system of catch quotas would,however, continue for the pelagic sector. (para. 7.62). We envisage TACs continuing for relative stability and asa guide for setting effort control.

55. We recommend that the EU Commission should phase in this new system over the lifetime of the codrecovery plan; during this time the current system of catch quotas should continue alongside the evolvingeffort control system. Thereafter TACs should be set only as guidelines for these sectors. (para. 7.63).

56. Transferability and ownership of fishing rights is an issue to which the Committee attaches importance, butthe present situation needs clarification. We recommend that the UK fisheries departments, in collaborationwith the fishing industries, should undertake a wide-ranging review of the existing system of quotamanagement having regard to the state’s responsibilities for the conservation and management of the fisheries on the one hand, and the financial viability of the industry on the other. (para. 7.54).

57. We were favourably impressed by the system of ‘community quotas’ which is emerging in Shetland as a resultof investment by the local Producers Organisation and the Shetland Islands Council, through their subsidiarybody Shetland Leasing and Property Development Ltd. But we recognise that Shetland is in a unique situationwith its oil revenues and that this course could not be readily followed by other local authorities that aredependent on tax revenues.

58. The management of Scotland’s inshore fisheries is in need of reform, and they face a distinct threat ofoverexploitation. A recent study2 has analysed the strengths and weaknesses of the existing system, and identifiedthree guiding principles for future management which would be best achieved by the introduction of regionalinshore management committees. Namely, that they should be conducted at the local scale; they should bestakeholder led; and that they should be based on an integrated approach to fisheries and the marineenvironment. The Committee recommends that Scottish Ministers should establish inshore managementcommittees on a local scale, led by the industry and should follow an integrated approach to fisheries andthe environment. (para. 7.70).

59. The systems of governance for Scottish fisheries needs re-appraisal and the present gulf in understandingbetween fishermen and scientists needs to be bridged. The industry needs to be more closely involved in its ownmanagement, with a responsibility for collaborating with the scientists and enforcing compliance and policymeasures. As far as possible, technical issues relating to fisheries management should be removed from the directconcern of the Executive.

60. We offer three suggestions that should help to meet these objectives. (1) A new body governed by a boardappointed by the Scottish Fisheries Minister with members drawn from the industry and other lay members withrelevant expertise. The body would take over FRS and Scottish Fisheries Protection Agency (SFPA) and advise theMinister on policy and management issues. (2) Establish separate boards for the management of FRS and SFPA,also appointed by the Minister and with industry representatives on them. (3) A forum should be established,chaired by the Minister, with membership drawn from the industry, science and those with expertise in fishingmatters. This would be a deliberative body but provide an opportunity for all those concerned to debate the issuesconfronting the industry and try to reach a shared understanding. This third suggestion could of course becombined with either of the other two.

61. We recommend that Scottish Ministers should seek to bridge the gulf between fishermen and scientistsand should consider our alternative proposals for restructuring the institutional arrangements for fisheriesmanagement as set out in Chapter 7. (para. 7.88).

ixRSE Inquiry into The Future of the Scottish Fishing Industry

Building a Sustainable Future62. A successful fishing industry has to be both profitable and sustainable; only then can it ensure the futureviability of fishing dependent communities. Although the pelagic and shellfish sectors meet this requirement, thewhitefish sector does not. Most stocks in this sector are in a serious condition and even the current relativeabundance of haddock is due to a single year-class. White fish stocks therefore need to be rebuilt and thenconserved with a fishing mortality that allows maximum sustainable yield to be maintained. It will require severalyears of severe restraint, but, if this is done, the prospects of recovery in cod and other demersal stocks are good.

63. Apart from the problems with demersal stocks, we envisage that continuing technological advance will causefurther decline in employment in all three sectors of the catching industry. This would simply continue the trendof the last decade, but it needs to be recognised, and the various development agencies and local authorities needto do all they can to diversify the economies of the fishing dependent communities.

64. But provided the industry is well managed and on a basis that is sustainable, we envisage a good future forthe industry. It should continue to play a key part in Scotland’s economy and providing a livelihood for thefishing dependent communities.

References1Beaugrand, G., Brander, K.M., Lindley, J.A., Souissi, S. & Reid, P.C. (2003), Nature 426: 661-664.2Symes, D. & Ridgway, S. Inshore Fisheries Regulation and Management in Scotland: Meeting the Challenge ofEnvironmental Integration. University of Hull, 2003.

x RSE Inquiry into The Future of the Scottish Fishing Industry

Glossary

Term MeaningBenthic Fish and other organisms that live on the sea bed.Biomass The amount of living matter (as in a unit area or volume of habitat).Blackfish Fish landed illegally, often at night or in small unregulated harbours (fish that are typically

undersized or from quotas that have already been exceeded).By-catch Any organism that is caught in addition to the target species. Some by-catches are

marketable although much is discarded.Demersal Fish living near the sea bottom (e.g. cod, haddock, halibut, ling and turbot) (cf Pelagic).Eutrophication The process by which a body of water becomes enriched in dissolved nutrients that

stimulate the growth of aquatic plant life.Gadoid Fish of the cod family (Gadidae), e.g. cod, haddock, whiting, saithe and Norway pout.Helminth A parasitic worm.Industrial fishing Large-scale fishing for low-value fish (e.g. sprat, pout and sandeel) to produce fish meal, oils

and fat.Keystone Species whose loss from an ecosystem would have a disproportionately large effect on other

species populations or ecological processes in that system.Nephrops Nephrops norvegicus: Norway lobster, Dublin Bay prawn or langoustine.North Atlantic The North Atlantic Oscillation (NAO) is a phenomenon associated with winter fluctuations

Oscillation in temperatures, rainfall and storminess over much of Europe. It is measured by the wintersurface air pressure difference between Iceland and the Azores. When the NAO is ‘positive’,westerly winds are stronger or more persistent, northern Europe tends to be warmer andwetter than average, and southern Europe colder and drier. When the NAO is ‘negative’,westerly winds are weaker or less persistent, northern Europe is colder and drier, andsouthern Europe warmer and wetter than average.

Norway lobster See Nephrops.Pelagic Fish and other organisms living in the upper layers of the sea (e.g. herring, mackerel and

pilchard) (cf Demersal).Phytoplankton A flora of freely floating, often minute organisms that drift with water currents. Plankton Marine and freshwater organisms, which, because they are non-motile or because they are

too small or too weak to swim against the current, exist in a drifting, floating state.Prawn Generic term, but generally applied to Nephrops.Processors Fish processing companies.Recruitment The process of adding new individuals to a population by growth and reproduction.Round fish Round fish (such as cod, whiting, mackerel) as opposed to flat fish, (such as plaice or dabs).Shellfish Generic term for Nephrops, lobster, all prawns, shrimps, crabs, molluscs (including scallops,

mussels, razor shells and cockles).Spawners Egg-producing fish.Technological creep Increased productivity with less manpower as a result of investment in more and better

capital equipment.Whitefish Fish with white flesh (mostly demersal) as opposed to oily fish such as herring and mackerel

(mostly pelagic).Zooplankton Small floating or weakly swimming planktonic animals that drift with water currents and,

with phytoplankton, make up the planktonic food supply.

xiRSE Inquiry into The Future of the Scottish Fishing Industry

AbbreviationsACFA Advisory Committee on Fisheries and

AquacultureACFM Advisory Committee on Fishery ManagementBlim Limiting BiomassBpa Precautionary BiomassCBD Convention on Biological DiversityCFP Common Fisheries PolicyCITES Convention on International Trade in

Endangered SpeciesCPUE Catch Per Unit EffortDEFRA Department of the Environment, Food and

Rural AffairsEBFM Ecosystem-Based Fisheries ManagementEcoQOs Ecological Quality ObjectivesEEA European Environment AgencyEEC European Economic CommunityEEZ Exclusive Economic ZoneEIA Environmental Impact AssessmentERDF European Regional Development FundESC Economic and Social CommitteeESF European Social FundEU European UnionEUR EurosF Fishing MortalityFAO UN Food and Agriculture OrganisationFDC Fisheries Dependent CommunitiesFIFG Financial Instrument for Fisheries GuidanceFlim Limiting Fishing MortalityFpa Precautionary Fishing MortalityFRS Fisheries Research ServicesFU Functional UnitGDP Gross Domestic ProductGOV Grande Ouverture Verticale trawlHIE Highlands and Islands EnterpriseIBTS International Bottom Trawl SurveyICES International Council for the Exploration

of the SeaIFQ Individual Fishing QuotaIFREMER Institut français de recherche pour l’exploitation

de la mer (French Research Institute forExploitation of the Sea)

LPUE Landing Per Unit Effort

ITQ Individual Transferable Catch Quotalim Limiting ValueM Natural MortalityMAGP Multi-Annual Guidance ProgrammeMPA Marine Protected AreaMSY Maximum Sustainable YieldN The number of fish in each yearNAO North Atlantic OscillationNFFO National Federation of Fishermen’s OrganisationsNGO Non-Governmental OrganisationNPV Net Present ValueNTZ No Take ZoneOSPAR Oslo and Paris ConventionOST Office of Science and Technologypa Precautionary LimitPO Producer OrganisationRAC Regional Advisory CouncilRIMC Regional Inshore Management CommitteesRSA Regional Selective AssistanceRSE Royal Society of EdinburghSAC Special Areas of ConservationSEERAD Scottish Executive Environment and Rural

Affairs DepartmentSEPA Scottish Environmental Protection AgencySFF Scottish Fishermen’s FederationSFPA Scottish Fisheries Protection AgencySHOAL Shetland Oceans AllianceSIC Shetland Islands CouncilSLAP Shetland Leasing and Property Development Ltd.SSB Spawning Stock BiomassSTECF Scientific, Technical and Economic Committee

on FisheriesSURBA Survey-Based Assessment software package TAC Total Allowable CatchTCM Technical Conservation MeasuresTTWA Travel To Work AreaUN United NationsVCU Vessel Capacity UnitVPA Virtual Population AnalysisWGDEEP ICES Working Group on Deep-sea Fisheries

ResourcesWWF World Wide Fund for Nature

xii RSE Inquiry into The Future of the Scottish Fishing Industry

Contents

1 Introduction 1

Background 1The Role of Scientists in Fisheries Management 3The Marine Environment 3Scottish Fisheries 3Structure of the Report 4

2 The Origins of the Common Fisheries Policy 5

Six and Twelve Mile limits 5Relative Stability: TACs and Quotas 6Quota Hopping 7EU Grants for the Fishing Industry 8Withdrawal from the CFP? 9Is EU Exclusive Competence Necessary? 10

3 Economic, Industrial and Social Impacts 12

The Scottish Fishing Industry 12The Fish Catching Industry 12

The Catching Industry as a Business 17(a) Pelagic Sector 17(b) Shellfish Sector 17(c) Demersal Sector 17

Aspects Influencing Commercial Success 18(a) Control and Regulation 18(b) Finance 18(c) Technology and Competitiveness 19(d) Ownership Structure 20(e) Involving Industry in Policy Decisions 20

The Social Impact of the Decline in Employment 20(a) Pelagic Sector 21(b) Demersal Sector 21(c) Shellfish Sector 21(d) Support Services Industry 22

Overall Employment Impact in the Catching Sector and its Supporting Services Sector 22Impact by Area 22

(a) The North East Coast 22(b) Shetland 23(c) Caithness and Sutherland 24(d) Other Areas 24

The Processing Industry 25Conditions of Success in the Processing Industry 26The Outlook for the Processing Industry 27

xiiiRSE Inquiry into The Future of the Scottish Fishing Industry

4 The Science of Stock Assessment and its Role in Fisheries Mangement 29

Assessment Methods and their Reliability 29Fishery Dependent Methods 30

Age-Structured Stock Assessment Methods: Virtual Population Analysis 30Alternatives to VPA 31Conclusions on Age-structured Stock Assessment Methods 33Indices of Catch per Unit Effort (CPUE) 33Unrecorded Catch 33Data from fishermen 34

Fishery Independent Methods 34International Bottom Trawl Surveys (IBTS) 34Surveys of Fish Larvae 35Egg Survey Method 36Acoustic Surveys 36Video Surveys 36

Setting of Total Allowable Catches 37Review of ICES Scientific Advice on the Major Fish Stocks 37Demersal stocks 37

North Sea Cod Area IV 37Spatial Considerations 40History and Causes of Decline in the Cod Stock 40Recruitment 41Precautionary Limit 42

West Coast Cod (Sub Areas VIa and VIIa) 42Future Prospects for Cod 42

The Cod Recovery Programme 43An Assessment of Recovery Strategies for Cod 43

North Sea Haddock 45Whiting 46Monkfish 47Nephrops 47

Pelagic Fisheries 49North Sea Herring 49Mackerel 50Management of Pelagic Fisheries 51

Industrial Fisheries 51Deep-Sea Fisheries 53Overall Comments on Fisheries Science 53The Structure of Fisheries Science 54

5 Fisheries and the Environment 56

Introduction 56Ecosystem-based Management 56Environmental Policy and Fishing 56The Impacts of Fishing on the Environment 57Could Other Factors Influence Fish Populations? 58Impacts on Other Species 59Marine Mammals and Fisheries 60Seabirds and Fisheries 60

6 The Role of Aquaculture 62

xiv RSE Inquiry into The Future of the Scottish Fishing Industry

7 Managing Scotland’s Fisheries for Sustainable Development 66

Introduction 66Allocation of Management Responsibility 66The Policy Process 67Regional Advisory Councils 68Reforming the Management System: the Cod Recovery Plan 69Managing for Sustainability 71Balancing Capacity and Resources 72The Regulatory System 73A New Approach 73

(a) The Demersal Sector 73Effort Control 73Technical Conservation Measures 74The Transferability of Fishing Rights 76

(b) The Pelagic Sector 77Enforcement 77

A Timetable for Change 77Inshore Fisheries Management 78An Ecosystem-Based Approach to Fisheries Management 78Taking the Politics out of Fishing 79

8 A Sustainable Future for the Industry 83

What has Been Wrong with the Policy? 84What Needs to be Done Now? 84Remedial Measures within Scotland 85

Appendices Appendix 1: Membership of the RSE Inquiry into the Future of the Scottish Fishing Industry 87Appendix 2: Oral and written evidence submitted to the Inquiry and visits made 88Appendix 3: List of Recommendations 93Appendix 4: An Overview of the Demersal Scottish Fisheries 96Appendix 5: FRS Sampling Area between 1997 and 2003 101Appendix 6: FRS Sampling results for cod, haddock and whiting between 1997 and 2003 102Appendix 7: ICES IBTS Sampling Area between 1997 and 2000 105Appendix 8: ICES IBTS survey, numbers caught at age for cod, haddock and whiting, by year 106

xvRSE Inquiry into The Future of the Scottish Fishing Industry

xvi RSE Inquiry into The Future of the Scottish Fishing Industry

1 Introduction

Background1.1 The Scottish fishing industry has been managed under the European Union’s Common Fisheries Policy(CFP) for several decades. It is now almost universally accepted that the CFP has failed to give adequate protectionto important fish stocks. In consequence, an important part of the Scottish fishing industry is in serious trouble.

1.2 For Scotland, and especially for the communities that depend on fishing, the reduction in quota for codand the restrictions on fishing for whitefish generally are the cause of much distress. But the overriding concernmust be to ensure that Scotland has a strong and sustainable fishing industry for the future. We are convincedthat it is possible to achieve this, but only if the right steps are taken. This report sets out the importance of thisindustry for Scotland, critically appraises the science that underlies management decisions, discusses alternativepolicies for conservation and makes recommendations for the future.

1.3 The current situation should be seen first in the context of how and why fishery management systems havehad to evolve. Most of the world’s commercial fisheries are currently being exploited at or beyond their ability tosustain themselves. The overwhelming problem faced by fishermen, fisheries and environmental managers,scientists and politicians everywhere is how to achieve an effective system of management. It should keep thefishing industry and its activities to a level which successfully conserves fish stocks, minimises environmentalimpacts, and gives fishermen confidence of reasonable economic stability; this is what we understand by‘sustainability’.

1.4 Sea fishing is one of the few industries remaining where the resource on which it depends is in commonrather than individual ownership. Where a resource is owned in common, it is not in the interests of any oneperson seeking to exploit it to try to conserve it. Rather, there will be a chronic tendency to over-exploitation anda race by all those trying to use it to maximise their share. This situation has been referred to as the ‘Tragedy ofthe Commons’3 and failure to address it has been a major flaw in fisheries management.

1.5 The fishing industry, like others, increases its efficiency as a result of technological progress year by year. Inmost industries this is seen as something worth striving for, because it raises productivity and hence wealth. Morecan be produced with less manpower, as a result of investment in more and better capital equipment. But infishing, this ‘technological creep’ means that an industry that was once exploiting its natural resource well withinthe limits of sustainability will sooner or later cease to do so.

1.6 Investment in expensive capital equipment, which is a feature of the modern fishing industry, increases thepressure on fishermen to catch as much as they can. A fisherman’s primary concern will be to meet the interestand repayment obligations on the loan that financed this investment. It is hardly surprising if this were to takeprecedence over any anxiety about the sustainability of the stock he is exploiting.

1.7 Before such over-exploitation of fisheries became evident, management was somewhat ad hoc and basedupon limited knowledge of fish stocks. It was known that fish catches fluctuated, and this was at first explained bynatural events such as changes in temperature, currents and migration patterns. The picture became morecomplex when research showed that stocks were structured in terms of sizes and ages of fish, and that fluctuationswere related also to spawning and recruitment. These could not be controlled, but it was hoped to understand theinfluence of the environment and describe for each species how spawning and recruitment were related to the sizeof the fish population. There were also reasonable assumptions that certain fishing practices should be avoided;such as harvesting immature fish, spawning females or moulting crustaceans.

1.8 As it became recognised that intensive fishing could be a major factor in reducing catches, the currentphilosophy emerged whereby management is focused on controlling the catching activity of fishermen. Thisapproach was developed over the decades following the Second World War. Recognition of the impact of fishingon catches led to quantitative stock assessment by fishery scientists becoming the main factor in guidingmanagement decisions. This was underpinned by studies of population dynamics and the concept of maximumsustainable yield, which predicted that, in theory, a population would be most productive when harvested to a

1RSE Inquiry into The Future of the Scottish Fishing Industry

level that sustained it somewhat below maximum natural size. It was further assumed that stocks would notdecline to the point of collapse because the fishery would become unprofitable long before this happened.

1.9 Unfortunately, these assumptions – pivotal to management philosophy – were not upheld in practice. The reasons, largely due to human ingenuity, were varied: technological advances which enabled fishing tocontinue under increasingly difficult circumstances; increased knowledge of the areas favoured by fish; subsidieswhich skewed the economics towards more fishing even as stocks declined. Occasional increases in fishpopulation stimulated increases in fishing capacity, but subsequent stock reductions did not lead to correspondingreductions in capacity. This ratchet effect generated a mismatch between the effort available (vessels, fishermen,processing capacity) and the resource. In order to gain the immediate economic survival of the industry,emergency measures were introduced to reduce fishing mortality: vessel decommissioning, increased mesh sizes,closure of whole fisheries, regulations restricting the fishing capacity of new vessels, and the introduction of quotaschemes to share out the amount of fish to be caught.

1.10 On the biological side of fisheries management, since excessive fishing reduces the number of spawners andwill reduce at some stage the recruitment of new fish, objectives switched from seeking maximum sustainableyields to maintaining a spawning stock biomass that was believed to be sufficiently large to ensure adequatefuture recruitment. Although spawning is clearly related to recruitment, the relationship is not exact, so there areinevitable statistical uncertainties which affect predictions of future fish population size. As with any importantprocedures which involve risks, precautionary approaches become involved in setting safety margins, and this canresult in catch limits sometimes appearing to be set unreasonably low. In some cases the work of scientists hasfailed fully to reveal the gravity of the threat to fish stocks, in others those responsible for management havetaken the risk of paying insufficient regard to scientific advice because of short-term objectives such as alleviatingimmediate economic or political problems. However, if risks are taken continuously, some form of stock collapseis sooner or later inevitable.

1.11 There is a variety of methods by which management can attempt to control the catching activity offishermen. When the conservation measures in the CFP were introduced in 1983, the method was to set TotalAllowable Catches (TAC) for each species in each fishing area. The TACs formed the basis for allocating catch tothe different fishing nations on a fixed percentage basis (‘relative stability’). A major problem in implementingTACs in a multi-species fishery is that when the quota for one species runs out, fishing for others still withinquota can continue, but the first species will still be caught and so will either be discarded back into the sea orlanded illegally. If the level of discards and illegal landings is significant, the accuracy of stock assessmentcalculations is inevitably weakened.

1.12 Other types of management methods that aim to counter the ‘race for fish’ are used in other parts of theworld. Some employ a rights-based approach, which confers ownership of the resource on individual fishermen,and so encourages its rational exploitation and conservation. Several forms of Individual Fishing Quotas (IFQs),sometimes fully tradable, are in successful use, and their advantages and disadvantages are discussed in a latersection of this report.

1.13 An unfortunate consequence of prolonged imposition of TACs under the CFP is that this traditionalmanagement system focuses simply on individual target species. However, such species are a part of a complexecosystem and ideally they should be managed in a way which takes into account their position and importancewithin that ecosystem – and especially when they are part of a multi-species fishery, as is typical for fish such as cod and haddock. Belatedly, the CFP has begun to take this into account with its recent recommendation of Ecosystem-Based Fisheries Management (EBFM) – even if it is not yet clear exactly what this implies in practical terms.

1.14 Scotland’s geography means that its fishery resource has historically been shared with other nations aroundthe North Sea and on the west coast. This inevitably adds complexity to any management system, but theintroduction of the CFP brought different complexities. The involvement of other nations in the European Unioninevitably increased both the difficulty and the slowness of decision-making. The centralisation of the CFP inBrussels markedly increased the sense of the remoteness of the Scottish fishing industry from the decision-makingprocess, especially since the European Commission receives scientific advice from ICES but does not seek paralleleconomic advice or advice on the state and future prospects from the industry. As fish stocks declined and TACsbecame more restrictive, discontent with the CFP has led to widespread demands in the Scottish fishing industryfor the UK to withdraw from it.

2 RSE Inquiry into The Future of the Scottish Fishing Industry

The Role of Scientists in Fisheries Management1.15 Most systems of conservation work well when fish stocks are buoyant. The real test comes when theydecline and fishing effort has to be curtailed. Fisheries managers under the CFP rely upon scientists for advice onsetting TACs. As fish stocks declined and cuts were recommended, scientists and the Council of Ministers at theirannual meeting were seen by fishermen to be unfairly restricting the industry, destroying their profits and cuttingtheir incomes. Fishermen felt their experience was being ignored. Misunderstandings arose because of thedifferences between what fishermen perceived as the state of the stocks and the assessments and predictions madeby scientists. Such differences may be expected in this kind of management system, especially where theprecautionary approach must include a safety margin to avoid the risk of stock collapse. Unfortunately, littleattempt was made to reconcile these differences of view, nor did a mechanism exist to do so. The distrust that hasgrown between scientists and fishermen has been exacerbated because scientists have a poor reputation atexplaining themselves to the general public, who often have little understanding of the concept of risk. Weformed the view early in our investigation that this gulf in understanding between scientists and the fishermen isimmensely damaging to the industry and we try, later in this report, to suggest ways in which it might be bridged.

1.16 Stock assessment is not an exact science and in this report we indicate some of its weaknesses, but it has toprovide the basic biological information for management if proper conservation of the stocks and a sustainablefishery are to be achieved. While the fishing industry criticises science, the lack of accurate data about the totalamount of fish actually caught (i.e., including discards and illegal landings) makes it very difficult to assesspresent and future stock sizes within manageable limits of uncertainty.

The Marine Environment1.17 Environmental issues also affect the fishing industry. Chemical pollutants used to be regarded as asignificant threat to marine organisms, but experience has shown that fish are surprisingly resilient, and concernis now more for their market quality. Toxic algal blooms which can contaminate shellfish have become a major problem for our inshore fisheries. More generally, marine ecosystem structures can be damaged by nutrient enrichment, leading to eutrophication, while the implication of global climate change has yet to beproperly assessed.

1.18 The extraction of over one million tonnes of fish annually from the seas around Scotland is likely to haveimportant consequences for the structure of marine ecosystems. There is evidence of changes in the populationsize of unexploited fish, and of changes in the genetic structure of exploited populations. The degree to whichsuch changes are undesirable or detrimental is a matter for debate, and is currently being examined by the RoyalCommission on Environmental Pollution. It is notable that environmental impact assessments have never beenformally applied to fisheries.

1.19 The increasing recognition of fishing impacts on the environment has generated a range of legislativeinitiatives. Conservation legislation introduced under the EU Habitats Directive has led to the designation ofSpecial Areas of Conservation (SAC) which may restrict fishing activity within particular regions. These will addan additional layer of complexity in management, and may also introduce objectives which might differ fromthose of the CFP.

Scottish Fisheries1.20 It is against such a background that this RSE Inquiry focuses on Scottish Fisheries. Scotland has always hada major involvement with the sea, with fishing centred on near and middle-distance waters – the North Sea, thewest coast and further afield in Norwegian and Faroese waters. More distant grounds were left mainly to Englishboats designed for such trips, which landed their catch at ports such as Hull, Grimsby and Leith. Scottishfishermen also landed distant-ground catches at Leith and Aberdeen. The pattern changed in the mid-1970s whencountries began to declare Exclusive Economic Zones (EEZ) extending to 200 miles and, in consequence, thedistant grounds became closed to British fishermen. The large deep-sea vessels could not operate economically inhome waters, but the Scottish fleet was much less affected. Today, in the league table of UK landings, Scottishports make up eight of the top twelve by weight, and nine by value.

1.21 Of the three broad sectors that make up the Scottish fishing fleet, the pelagic (gross earnings in 2002 of£98m)4 and shellfish (£94m) are generally considered to be in good shape. It is only the demersal sector (£137m)that is currently in crisis. The marked decline in some stocks, especially cod – and their possible collapse – has led


to severe reductions in TACs, with damaging socio-economic consequences, especially for certain ports and themore remote communities which are heavily dependent on fishing. In 2002 the total employment in sea-fishingin Scotland was 5,707 (Table 3.6).

Structure of the Report1.22 In the course of our investigation for this report we have focused particularly on the catching sector, andvisited many of Scotland’s fishing communities in the North East, Fife, the Highlands, Shetland and the WesternIsles. We have had discussions with those responsible for fisheries policy in Iceland and the Faroe Islands, as wellas visiting ICES in Copenhagen and the European Commission and Parliament in Brussels.

1.23 The report begins with an account of the establishment of the CFP and attempts to allay some widespreadmisunderstandings. The following chapter looks in detail at the economic, industrial and social consequences ofthe current situation in the Scottish fishing industry. Two chapters then examine the science behind fisheriesmanagement: the first deals especially with stock assessment and the current state of key stocks, and the secondwith various environmental aspects. Chapter 6 explores the potential role of aquaculture, and Chapter 7 the keyissues of necessary changes in fisheries management. The final chapter, Chapter 8, examines the sustainable futurefor the industry.

References3Garret Hardin, The Tragedy of the Commons, Science, Vol. 62, pp. 1,234-8.4Scottish Fisheries Statistics 2002.


2 The Origins of the Common Fisheries Policy

2.1 The Treaty of Rome refers only briefly to fisheries. Article 38.1 says:

“The Common Market shall extend to agriculture and trade in agricultural products. ‘Agricultural products’ means the products of the soil, of stockfarming and of fisheries and products of first stage processing directly related to these products.”5

2.2 Fisheries policy was seen, therefore, as an extension of the arrangements for agriculture, and the EuropeanCommission interpreted this as requiring a common policy also for fisheries.6 It is somewhat curious, especiallyfor countries where fishing is an important industry, that it should be dealt with as a subset of agriculture in theTreaty. But in practice this is not important, as a quite distinct fisheries policy has evolved.

2.3 In 1968 the first proposals were put to the Council of Ministers for a Common Fisheries Policy. These wereembodied in two Regulations, one on the common organisation of the market and the other on structure7. TheMarket Regulation required fixed quality standards for fish to ensure that price regulations applied to the sameproduct throughout the Community. Producers’ Organisations (POs) were to be established to regulate marketsupply and assist in stabilising fish prices; and a price support system was to be introduced. When the price fellbelow the intervention price for three successive days the product would be withdrawn and fishermencompensated by the member state drawing on Community funds8.

2.4 The Structural Regulation provided for European funding to be available for modernisation and new vesselconstruction to remedy the differences in age of vessels and efficiency between the fleets of the original sixmember states and put them into a state where there was fair competition. Article 2.1 of the same regulationrequired that Community fishermen be given equal access to all fishing grounds within the jurisdiction of the sixmember states. There was provision, exceptionally, under Article 4.1 to reserve the use of certain fishing groundsto local fishermen. But this exception was to be limited in time and to apply only to a three mile coastal zone.

2.5 Implementation of the CFP was delayed by the difficulty in reaching agreement on these provisions. Butagreement on the two Regulations was eventually reached on the night of 30 June 1970, the day that negotiationswere due to start for the accession of the UK, Ireland, Denmark and Norway. This was obviously not purecoincidence: the six existing members were clearly keen that a CFP should be in place before negotiations began and should therefore become part of the acquis communitaire, which new members would have to accept assettled policy.

2.6 Fishing was of much greater importance to the four candidate countries than to any of the six original EECmember states. Norway would have been the largest fisheries nation had she entered the EEC; but the UK,Denmark and Ireland also had substantial fisheries interests of major political importance9. The four, andespecially Norway, found the principle of equal access ‘up to the beaches’ unacceptable. Each of them had, at thattime, exclusive rights for its own fleet within six miles of shore and exclusive rights, subject to the maintenance ofhistorical rights for other countries that traditionally fished there, between 6 and 12 miles of the shore. None ofthe waters beyond this had been claimed by any of these states and the same applied to the six member statesof the EEC. Those who now assert that Britain should recover control of its own waters up to the 200 mile limit

are therefore mistaken in thinking that Britain had such control before its accession to the EEC.

Six and Twelve Mile Limits2.7 The entry negotiations for the four candidate countries raised many problems, and fishing was one of themost difficult. It absorbed a great deal of time and much skilled negotiation10. The applicants were mostly united

7The market arrangements were set out in Council Regulation (EEC) No. 2142/70 and structural policy in (EEC) No. 2141/70.8This was to be financed by the guarantee section of the European Agricultural Guarantee and Guidance Fund (EAGGF).


in their stance, but Britain’s position was complicated by the conflicting interest of the inshore and distant water fishermen. The Scottish fleet had a strong interest in seeing the 12 mile limit retained; but the UK Governmentwas also pressed by the distant water fleet, mainly but not solely based in England, which wanted to continuefishing off Iceland, Norway and the Faroe Islands. The fishermen in this fleet were, of course, strongly opposed toany extension of territorial waters of any country. The drama of the ‘cod war’ with Iceland was still to come, withBritain’s vain attempt to protect the interests of its distant water fleet.

2.8 Eventually, it was agreed that the applicant countries would retain their 6 mile exclusive limits, and their12 mile limits subject to existing historical rights, for substantial parts of their coastline. In 1983 these limits wererenewed and the 12 mile limit extended to the whole coastline of member states; they were renewed on this basisin 1993 and again for a further 10 years in 2003. Although these rights are not a permanent feature of the policy,it is unlikely now that they will ever be extinguished, especially in the light of the need to conserve fish stocks.

2.9 This outcome of the negotiations was considered by fishermen’s representative bodies at the time to be asuccess11. The 1983 extension of the 12 mile limit to the whole coastline (including St Kilda and North Rona andenclosing the Minch) gave Scotland one of the largest areas of inshore fishing in Europe, and the same limits asbefore entry to the EEC.

2.10 Technically, however, this is in the form of a derogation from the Treaty and, however unlikely it may be,there are those who fear that these limits will ultimately be lost. We therefore recommend that Ministersendeavour to have the existing 12 mile limits made permanent instead of being subject to renewal everyten years.

2.11 In January 1977, at the behest of the EEC, the UK and other member states extended their ExclusiveEconomic Zones (EEZs) to 200 miles or to the median line with other countries. This followed the extension ofexclusive fisheries limits by Iceland, Norway, the United States and Canada to 200 miles. By this time Norway haddecided by referendum not to join the EEC, as had the Faroe Islands, which, as a Danish dependency, had theoption to join but did not do so. This extension of the EEZ, although under British sovereignty, is subject to CFPrules under the terms of the Treaty of Accession.

Relative Stability: TACs and Quotas2.12 In 1983 a conservation policy was included in the CFP. ‘Total allowable catches’ (TACs) and quotas wereintroduced based on the principle of ‘relative stability’. This principle restricted competition in the interests ofgiving each member state a fair share and providing some stability for coastal communities dependent on fishing,many of which were in areas where there were few alternative sources of livelihood. Quotas were allocated tomember states in accordance with a key based on their historical share of the total catch; but these shares weremodified under agreement reached at The Hague to give some preference for the special interests of some coastalcommunities dependent on fishing, including Scotland, and to provide an element of compensation for loss ofdistant water fishing12. The distribution of quota within member states was a matter for the internal arrangementsof each state.

2.13 Since its introduction, the principle of relative stability, including The Hague Preferences, has beenmaintained. There appears to be support for it throughout EU member states, though some might wish itrenegotiated to their own advantage. There is some persistent anxiety in fishing communities that it might beabandoned, but this would certainly be opposed by most, if not all member states, and could be done only withtheir agreement. We therefore consider this highly unlikely.

2.14 The present CFP, therefore, bears little relation to the policy conceived at the time when Britain started itsaccession negotiations. This is partly due to the changes made during those negotiations and partly to the realitiesfacing the industry that have brought about substantial changes in policy. Furthermore, the extension of eachcountry’s EEZ to 200 miles under the auspices of the CFP enabled the Commission to exclude non-member states,such as Russia and east European countries, from fishing in the North Sea and other territorial waters, whichsubstantially reduced pressure on fish stocks for a time. But in the years following the adoption of the policy therewas a major expansion of the fishing fleet in EEC countries. By 1987 estimated gross registered tonnage hadexpanded by twice its 1970 value and by three times in terms of engine power (kW)13.

12These arrangements, known as ‘Hague Preferences’, were agreed at a Council meeting in The Hague in October 1976. They aredescribed in detail in Mike Holden, ‘The Common Fisheries Policy’, Fishing News Books, 1994, pp 41-50.


2.15 The TAC and quota system created difficult problems for the regulation and management of fisheries. Thereare three reasons for this: (a) effective enforcement of TACs is difficult and costly; (b) fish caught in excess ofquota may be discarded back into the sea – although legal, such discards are unacceptable from a conservationstandpoint; and (c) fish caught in excess of quota may be landed illegally. If the amount of fish discarded and/orillegally landed is at all significant, estimates of the proportion of fish stock removed by fishing becomeunreliable. This in turn weakens the scientific process of stock assessment and the statistical procedures thatunderpin the setting of TACs for future years (see paras 4.21 and 4.22). There is no reliable estimate of the amountof fish discarded but it is acknowledged that the practice is widespread among EU fleets and, in the course of ourInquiry we have heard anecdotal evidence giving very high volumes of illegal landings by Scottish demersalfishermen; sometimes this has been put at 50% of legal landings, and sometimes for certain species 100% or evenmore. TACs have therefore proved ineffective as a regulatory tool, and failed to prevent serious decline in stocks.

2.16 The sharp reduction in demersal TACs by the Council of Ministers in 2002, following advice from ICES thatthe cod fishery should be closed completely, was however, the immediate cause of the crisis that led to thisInquiry. This cut profits, threatened the viability of the demersal fleet, and required a reduction in fleet capacity.While illegal landings might soften the immediate effect of this, they threatened the existence of the industry inthe longer term, because they undermined the conservation policy.

2.17 The CFP has therefore neither preserved stocks nor maintained a healthy demersal fishing industry. Thescientific advice of ICES, which forms the basis of the proposals put by the Commission to the Council ofMinisters, is not balanced by economic advice on how to maintain the industry, its size or its shape, or how it canbe adapted to a viable role in the longer term. The result is maximum exertion of political pressure on Ministersand an end result that is based more on horse-trading than on any vision of the future of the industry.

2.18 Within Scotland, although the complex issues are not widely understood, there is a perception that the CFPhas failed. This view, though often inaccurate, does serious and profound damage to Scottish support for the EUmore generally.

Quota Hopping2.19 It has sometimes been suggested to us that there is a threat to Scottish fishermen from EU nations that donot have a North Sea coastline, such as Spain, who may acquire resources that should be available to the Scottishfleet. It is important to make clear that Spain does not have quota in the North Sea, while Scotland has about halfthe quota for demersal species in this area, and that the remainder is shared only by the other states that haveNorth Sea coastline.

2.20 A threat to the principle of relative stability does however arise if fishing enterprises in one member stateacquire licence and quota in another; and if they then neither employ persons resident in that state nor land theircatch there. This can be done only if the foreign fishing enterprise registers a vessel and acquires both licence andquota from fishermen in the state in whose waters it proposes to fish. It is not possible, under the terms of the EUTreaties, for one state to discriminate against a business or persons of another on grounds of nationality. But it isopen to it to require operators of vessels holding licence and quota to have real and continuous representation onshore, and to be responsible for technical and commercial management of vessels. The state will also beresponsible for allocation of quota between different types of vessel; it may require its vessels to be inspected atregular intervals, though not more than three times a year; and it may require crews to be subject to its rules asregards working conditions, wages and social security obligations14.

2.21 ‘Quota hopping’ is a recognised problem and there are some vessels with Spanish crews or other EUnationalities fishing in UK waters on this basis. This has happened mainly in England, where it dates from theyears before Spain was an EU member. So far it has not been a major issue in Scotland. The EU obviously does notwant to see the principle of relative stability eroded by this practice, and the conditions set out above constitute aconsiderable restraint, even if they cannot prevent the practice entirely.

2.22 If the Scottish fishing industry is to continue and thrive, it is important that the principle of relativestability in its present form should not be circumvented in this way. It is also important that the purchase ofquota by Scottish industry, much of which consists of owner partnerships, should not be disadvantaged bycompetition from fishing companies from other countries with stronger financial resources at their disposal. Thisis especially the case when seeking to buy quota from fishermen leaving the industry. This may have implicationsfor the structure of the Scottish industry, a subject that is discussed later in this report.


EU Grants for the Fishing Industry2.23 Assistance is provided to the fishing industry by the Financial Instrument for Fisheries Guidance (FIFG),one of the four Structural Funds of the EU15. This has been used in all countries, although not in recent years inthe UK, for new vessel construction. It is also available to part-finance decommissioning, to provide increasedsafety measures and for modernisation. It may be used to retrain fishermen to improve their fishing skills and forsocial measures. These last can take the form of early retirement schemes for fishermen aged 55 with at least 10 years experience, who opt for retirement less than 10 years before the statutory retirement age. Grants of up toEUR 10,000 may be given to fishing hands with at least 12 months experience, who lose their jobs when theirvessel is withdrawn; and grants may also be given to fishermen with at least 5 years experience to cover trainingcosts, if they wish to diversify and leave the industry16. The European Social Fund (ESF) may also help withtraining for other occupations and the European Regional Development Fund (ERDF) can be used to grant aidnew businesses.

2.24 Support from ERDF is available only in qualifying areas, but Peterhead, Fraserburgh and the other NorthEast fishing ports in Aberdeenshire and Moray qualify as an Objective 2 area and Shetland may receivetransitional aid until 2006 as a former Objective 1 area17. This is in contrast to the situation under UK regionalpolicy where the Aberdeenshire and Moray coast are not eligible for regional selective assistance (RSA) grants,although projects in Shetland still qualify or may be assisted by Highlands and Islands Enterprise.

2.25 FIFG grants for new vessel construction have been rightly opposed by the UK Government as being bothwasteful and damaging when fish stocks are endangered. They are to be ended in 2004, but it may be several moreyears before all the vessels aided under this scheme are added to fishing fleets. The UK has not made use of FIFGeither for retraining fishermen for other occupations or for early retirement. For the period 2000 to 2006 the UKhas an allocation from FIFG of EUR 215.6 million including: EUR 63 million for decommissioning; EUR 47million for processing and marketing; EUR 30 million for ports and harbours; EUR 1 million for inshore fisheries.

2.26 There may be some inhibition preventing maximum use of the Structural Funds because of the ratherbyzantine financial arrangements which apply to their use in the UK. Here the issues seem to be ‘additionality’and the implications for the UK budgetary rebate under the Fontainebleau agreement.

2.27 The EU requires a balancing contribution, either private or public, from the member state. The EU grantwould not normally exceed 50%, except in Objective 1 areas where it can be higher. This means that the ScottishExecutive would have to provide matching funding. Furthermore, money from any of the EU Structural Fundswould be available only if the proposed project accorded with a priority set out in the member state’s SinglePlanning Document approved by the EU for the period up to 2006. The EU requires the principle of ‘additionality’to be satisfied – that is to say that the EU funds lead to a project going ahead that would not otherwise do so. EUfunds are not intended simply to be in substitution for national aid.

2.28 However, the UK Treasury is not prepared to increase public expenditure just because funds are receivedfrom the EU. Such funds are included within the public expenditure totals that it controls. The Scottish Executivehas a budget line for EU funds but, since the Scottish Departmental Expenditure Limit is not increased if more EUfunds are received than expected, the more success there is in obtaining EU funding, the less the Executive canspend on other items within its responsibility.

2.29 The other aspect of this matter is that, under the terms of the agreement reached by the European Councilin 1984 at Fontainebleau, UK contributions to the EU budget are subject to an abatement equal to two thirds ofthe difference between its contributions and its receipts under Community programmes18. Receipts from theStructural Funds therefore reduce the abatement to the extent of two thirds of any money received. Thisabatement is of major importance to the UK’s EU budgetary contribution, but, not surprisingly, it blunts anyenthusiasm the Treasury may have to secure additional money from the Structural Funds.

2.30 These conditions are clearly very restrictive. But whatever the requirements of rules set by the Treasury, itdoes not seem right that qualifying areas, which are clearly threatened economically, should not be able to make

15The four Structural Funds are: the European Regional Development Fund (ERDF), the European Social Fund (ESF), the EuropeanAgricultural Guarantee and Guidance Fund (EAGGF) and the Financial Instrument for Fisheries Guidance (FIFG).17Aid from EU Structural Funds is given in accordance with three ‘Objectives’ which set out priorities. Objective 1 is for areaswhere GDP per head is less than 75 % of the EU average and is the highest priority; Objective 2 is for areas undergoing industrialreconversion or for disadvantaged rural areas; Objective 3 applies only to the ESF and is available throughout the EU.


maximum use of EU funds intended for this purpose; funds which, after all, would be available to theircounterparts in other EU countries.

2.31 We therefore recommend that Ministers review the arrangements for use of the Structural Funds inorder to make maximum use of FIFG and the other Funds for the economic diversification of fisheriesdependent areas.

Withdrawal from the CFP?2.32 Many fishermen we met, and those who supported them, believe that the United Kingdom shouldunilaterally leave the Common Fisheries Policy. This view was particularly strongly held in Shetland, where theshortcomings of the CFP were very apparent and could be contrasted with the apparent success of theindependent fisheries policy in the neighbouring Faroe Islands. Faroe, because it is a self-governing dependencyrather than an integral part of Denmark, was able to remain outside the EU when Denmark joined19. While ourInquiry was in progress, both the Scottish National Party and the Conservative Party committed themselves to leaving the CFP and a Private Member’s Bill was introduced to the House of Commons with the aim ofachieving this.

2.33 Despite the United Kingdom’s sovereignty over its EEZ, we believe it cannot simply withdraw from the CFPwithout also withdrawing from the EU, something the Government has made clear it will not do. Under the termsof its Accession Treaty the UK undertook full participation in the Common Fisheries Policy, subject to the verysubstantial amendments made to that policy during the accession negotiations and subsequently20. The UKtherefore cannot leave the CFP without renegotiating the terms on which it is a member of the EU. If it tried toact unilaterally, there would be a very grave crisis which would not only involve infringement proceedings beingtaken against the UK at the European Court of Justice, but could well degenerate into a trial of strength betweenEU fishermen and the UK’s fisheries protection service. In practice the UK would almost certainly have to leavethe EU.

2.34 Neither is renegotiation to leave the CFP a realistic option. Membership of the EU involves participation inits common policies and only in the case of monetary union, and for a short time social policy, have Britain orother member states negotiated opt-outs. Such opt-outs were for new policies that Britain and other memberstates did not feel able to join when they started and were, of course, subject to the opt-outs being agreed by othermembers. There is no example of a member state negotiating an opt-out from a common policy that alreadyapplied to it. A proposal to opt out of the CFP would be strenuously resisted by other member states, who wouldsee it as a means of excluding their fishermen from parts of the sea in which historically they have always fished;or at the very least a means of reducing their entitlement to fish in such waters. They would almost certainly takethe view that the UK would have to leave the EU; and, whether it did or not, they would feel entitled to takediscriminatory measures against the UK, which could be gravely damaging to the UK’s interests as a whole.

2.35 It is worth noting that between 60% and 70% of Scottish manufactured exports go to markets in the EUand associated countries21. Scotland’s economy exports more per head than the average for the UK and istherefore heavily dependent on these markets. Moreover, foreign direct investment, which accounts for much ofthese exports and about a third of Scottish manufacturing output, has chosen to locate in Scotland because itprovides a good base from which to serve the European market. No course of action which put this at risk, even ifit offered some benefit for the fishing industry, could be in the interests of the Scottish economy as a whole.

2.36 Nor would such a course provide a straightforward benefit to the fishing industry. The UK could not expectto reject the parts of the CFP it does not like and continue to benefit from the remainder. Access to Europeanmarkets is important for the industry and especially for the produce of aquaculture; support prices and EUmarketing arrangements provide further benefit.

2.37 Whether in or outside the EU, British assertion of control over its EEZ would have repercussions over Britishaccess to the EEZs of other EU countries. If Britain tried to solve its problems over fish stocks by excluding thevessels of other countries, they could be expected to retaliate in kind. Fish pay no regard to which nation isclaiming jurisdiction over the water they swim in; if depletion of the stock is to be avoided, conservation policieswill be more effective if they are applied in a consistent way across the North Sea and in the waters to the west

19Faroese representatives participated in the Danish negotiating team, but although Denmark had the right to include Faroewhen it joined the EU, this was resisted in the islands and never implemented. (see Sir Con O’Neill, op. cit.).


and south of the British Isles. In the absence of an EU or a CFP there would probably be bilateral negotiationsbetween all the states that have a North Sea coastline, just as there are at present between the EU and Norway. Butgiven the number of countries that would be involved and the complexity of such negotiations, it might not belong before it was realised that it would be better to manage the North Sea as a common resource with some kindof common policy.

Is EU Exclusive Competence Necessary?2.38 Elsewhere in this report changes needed to the CFP are set out. Many involve major changes and they willnot be easily carried through.

2.39 But an issue which lies at the centre of these difficulties was the initial decision to treat fisheries resources asan exclusive EU competence rather than a shared competence between the Council of Ministers and nationalgovernments. The proposed European constitution, if approved in its present form, entrenches this situation.22

Article 12 lists only three subject areas for exclusive competence: monetary policy for those countries which haveadopted the Euro; commercial policy and the customs union; and ‘the conservation of marine biological resourcesunder the common fisheries policy’. Article 13 then goes on to list among the areas of shared competence: ‘agricultureand fisheries, excluding the conservation of marine biological resources’. This means that responsibility for devisingmeasures to conserve fish stocks rests with the EU alone and the role of nation states is limited to carrying thosepolicies into effect.

2.40 It is surprising that marine biological resources, alone of conservation issues, should be given this degree ofprominence alongside monetary policy and commercial policy. The logic might seem clear enough: thatconservation of fish stocks requires a uniform approach rather than a patchwork of different policies pursued byindividual member states. But there are many other instances of policies being harmonised across the EU –regional aid for example – without being picked out as an exclusive competence in a treaty or the proposedConstitution.

2.41 We understand that the view taken by UK Ministers is that the text of the proposed Constitution onfisheries makes no change to the present position. That does not seem to us a valid reason against trying to get italtered. We believe such an alteration is desirable: first, because the CFP in its present form is much toocentralised; and, second, because the effect of enlargement to an EU of 25 members (many of whom have nointerest in the North Sea but are members of the Fisheries Council) will make it even more difficult to reachsensible and speedy decisions.

2.42 The principle of subsidiarity was first articulated in EC law by the Maastricht Treaty, but strengthened by aProtocol in the Amsterdam Treaty, and taken forward in the draft Constitution which further strengthens thedefinition. Yet it does not apply to fish stock conservation, since the EU is given exclusive competence23. Were it ashared competence, or not listed at all, the principle of subsidiarity would apply. Decisions should then be taken,wherever possible, by the lowest appropriate level of government and only those decisions that could be justifiedas better taken at a higher level would be taken there. Yet much of what is wrong with the CFP, as this reportargues later, arises from over-centralisation and decisions taken without sufficient input from the industry or fromthe areas that are dependent on fishing.

2.43 In reality there is no need for measures taken in the North Sea to be the same as those taken in the Atlantic,the Irish Sea or the Mediterranean, so long as they are effective. In the end fisheries policy will only succeed ifthose whose livelihood depends on it make it so; this requires consultation and some sense of ownership by theindustry locally. This is what the principle of subsidiarity is about and we believe that it should be applicable tofisheries. The proposed Regional Advisory Committees (RACs), which are discussed later in this report (seeChapter 7), are a step in this direction but their role is advisory rather than executive; furthermore, it remains tobe seen how they will operate and how much influence they will have. The Committee therefore believes that thisaspect of the proposed EU constitution is unsatisfactory and should be reconsidered by Ministers.

2.44 We therefore recommend Ministers should reconsider their position over the EU’s exclusivecompetence for conservation of living marine resources with a view to getting this deleted from the proposed EU constitution so that the principle of subsidiarity may apply to fisheries, as it does to other matters.


References5Treaty Establishing the European Economic Community. 6Mark Wise, The Common Fisheries Policy of the European Community, London: Methuen 1984 pp 85ff.7The market arrangements were set out in Council Regulation (EEC) No. 2142/70 and structural policy in (EEC)No. 2141/70.8This was to be financed by the guarantee section of the European Agricultural Guarantee and Guidance Fund(EAGGF).9Sir Con O’Neill, Britain’s Entry into the European Community, Report on the Negotiations of 1970-1972, London: Whitehall History Publishing and Frank Cass, 2000.10A good account is given of these problems in Sir Con O’Neill, op.cit.11Sir Con O’Neill, op. cit.12These arrangements, known as ‘Hague Preferences’, were agreed at a Council meeting in The Hague in October1976. They are described in detail in Mike Holden, ‘The Common Fisheries Policy’, Fishing News Books, 1994, pp 41-50.13Mike Holden, op.cit, p. 22.14See Article 5(2) of Regulation 170/83. This is set out and explained in Munir, A. E., Current EC Legal Developments:Fisheries after Factortame, London: Butterworths, 1991.15The four Structural Funds are: the European Regional Development Fund (ERDF), the European Social Fund(ESF), the European Agricultural Guarantee and Guidance Fund (EAGGF) and the Financial Instrument forFisheries Guidance (FIFG).16European Commission, Financial Instrument for Fisheries Guidance: Instructions for Use, 2003 updated edition.17Aid from EU Structural Funds is given in accordance with three ‘Objectives’ which set out priorities. Objective 1is for areas where GDP per head is less than 75 % of the EU average and is the highest priority; Objective 2 is forareas undergoing industrial reconversion or for disadvantaged rural areas; Objective 3 applies only to the ESF andis available throughout the EU.18Memorandum by HM Treasury submitted to House of Lords European Communities Committee (Subcommittee A), Session 1998-99, paper HL 36, paragraph 8.19Faroese representatives participated in the Danish negotiating team, but although Denmark had the right toinclude Faroe when it joined the EU, this was resisted in the islands and never implemented. (see Sir Con O’Neill,op. cit.).20Treaty Concerning the Accession of the Kingdom of Denmark, Ireland, the Kingdom of Norway and the United Kingdomof Great Britain and Northern Ireland to the European Economic Community and the European Atomic Energy Community,London: HMSO, January 1973, Cmnd 5178-I21Scottish Council for Development and Industry, Surveys of Scottish Sales and Exports in 2000/2001 and earlier years.22Draft Treaty Establishing a Constitution for Europe. The European Convention, July 2003.23Council of the European Communities, Treaty on European Union, Luxembourg, 1992, see especially Title ICommon Provisions, Articles A and B, and Title II Provisions amending the Treaty establishing the European EconomicCommunity etc, Article G section B Article 3b.


3 The Economic, Industrial andSocial Impacts

The Scottish Fishing Industry3.1 It is sometimes asserted that the fishing industry is not of major importance to the economy. This may betrue in UK terms, where the output of the fish catching sector amounts to only 0.05% of GDP, though this figurewould probably have to be approximately doubled if aquaculture and fish processing are included24. But inScotland its importance is much greater. Although Scotland has only 8.6% of the UK population, the Scottish fishcatching sector accounted for 62% of the value of fish landed in the UK in 200225. Scotland has 2,513 fishingvessels, 36% of the total UK fleet in December 2002, but 827 vessels were over 10 metres, 47% of the UK total inthis category and 60% by tonnage.

3.2 The direct employment in the three sectors – catching, aquaculture and processing – was 19,800, or about0.9% of Scottish employment in 199926. Of this, the catching sector accounted for 7,800, aquaculture 1,600, andprocessing 10,40027. This still does not suggest that it is anything other than a fairly minor component of the totalScottish economy. But these figures do not take account of jobs dependent on the fishing industry in activitiessuch as ship repair, equipment supplies, marketing and transport, nor do they take account of the secondaryeffects of income spent by the sector, known as the multiplier. When these indirect and induced effects areincluded, the total for fisheries dependent employment is estimated by the Scottish Executive at 48,000 in 1999.To put this into perspective, it amounts to about half the direct, indirect and induced employment dependent onNorth Sea oil when that operation was at its peak. Moreover, like agriculture and unlike many other industriesthat are more transient, it is an industry that has contributed to the Scottish economy since the earliest times and,if properly managed, should continue to do so.

3.3 A particularly important feature of this industry is its concentration in coastal areas and Scottish islands,many of which depend heavily on it and have little prospect of alternative employment opportunities on a scalethat could replace it. Figure 3.1 shows the direct employment in the three fishing industry sectors by coastalTravel To Work Areas (TTWA) and Figure 3.2 the total fisheries dependent employment (direct, indirect andinduced) by TTWA in 1999. Fraserburgh has the highest direct employment, amounting to 29% of the localworkforce, followed by Peterhead 14%, and Shetland 11%; and the same percentage figures, though lower totals,apply in Keith and Buckie and in Berwickshire. Employment in the Western Isles is also substantial, amounting toabout 10% of the workforce. Annan has about 17% of the local workforce dependent on the industry, but this isalmost entirely because of a heavy concentration of the processing industry. Aberdeen also has a substantialconcentration of the industry, but mainly in processing and, because of the large size of Aberdeen’s labour market,accounting for only a small proportion of the total labour force.

3.4 The figures for fisheries dependent jobs (direct, indirect and induced) in Figure 3.2 give a similar picturebut, as might be expected, indicate a much higher local dependency on the industry. In this case over half theemployment in Fraserburgh TTWA is dependent on the fishing industry, while Annan, Peterhead, Shetland,Berwickshire and Buckie depend on the industry for between 20% and 35% of their employment.

The Fish Catching Industry3.5 This report is mainly concerned with the catching industry and because the pelagic and shellfish parts ofthe industry are relatively profitable, with catching at present roughly in sustainable balance with stock levels,attention has focused on the demersal sector. It should be emphasised, however, that the present balance in theshellfish sector could be easily upset if whitefish boats for lack of demersal quota turned to shellfish. Table 3.1shows fish landings by the principal ports in 2002. Almost all of the pelagic landings are in the North East ports ofPeterhead and Fraserburgh, and in Shetland. Demersal landings are concentrated in the same ports but with theaddition of Aberdeen, Lochinver, Scrabster and Kinlochbervie. Shellfish, by contrast, are spread much more widelybetween these ports and those on Scotland’s west coast and the Western Isles28.


Figure 3.1: Percentage of Direct Local Employment in the Fisheries Sector, by Coastal Travel To Work Areas inScotland, 1999.

Note: Table shows the TTWAs with more than 1 per cent of local employment in fish production. The otherTTWAs each have less than 1 per cent of their local employment in the fisheries sector.

Source: Annual Business Inquiry; Scottish Executive

3.6 Lochinver is the main port used for landings by non-UK vessels. The total value of fish landed here in 2002was over £40 million, of which 74% was from foreign vessels (Table 3.2); this makes it by value, after Peterhead,the second port for fish landings in Scotland. Lochinver, Kinlochbervie and Scrabster are also used extensively byeast coast fishermen who base their boats there when fishing in the waters west of Scotland. The localemployment dependent on the demersal sector in these ports is therefore quite small and much less than thefigures for fish landings might suggest. The main impact of a scaling down in the demersal sector will therefore befelt in the North East fishing ports, in the Black Isle, where many fishermen live who fish on the west coast, andin Shetland.

3.7 As Table 3.3 shows, the total number of Scottish-based fishing vessels in November 2003 was 2,447 ofwhich 1,668 were 10 metres or under, and therefore mainly inshore vessels, and 779 over 10 metres29. Thenumber of vessels under 10m has increased by about 100 in the ten years since 1993. The vessels over 10m, on theother hand, fell by 554 since 1993, or 42%, most of this fall having taken place in the second half of the decade.The number of pelagic boats fell from 52 in 1993 to 27 in November 2003, a reduction of 48%, and shellfish boatsover 10 metres from 640 to 412, a reduction of 228 or 36%. In the demersal sector there were 641 vessels in 1993,


St. Andrews

Elgin and Forres

North Ayrshire

Lochgilphead

Thurso

Girvan

Stranraer

Wick

Sutherland

Dunoon and Rothesay

Orkney Islands

Dingwall

Lochaber

Oban

Kirkcudbright

Newton Stewart

Banff

Skye and Ullapool

Western Isles

Campbeltown

Argyll Islands

Berwickshire

Keith and Buckie

Shetland Isles

Peterhead

Annan

Fraserburgh

0 5 10 15 20 25 30 35

Percentage of Employment in Fisheries Sector

falling to 340 by November 2003, a reduction of about 47%. The Committee understands that in thedecommissioning rounds of the last two years, 170 vessels left this sector, not all of which may yet be accountedfor in these figures. By the time this report is published this sector may therefore be down to about half thenumber of vessels it had in 1993.

Figure 3.2: Percentage of Total Fisheries Dependent Employment in the Fisheries Sector by Coastal Travel ToWork Areas in Scotland, 1999.

Note: Figures include direct, indirect and induced jobs. Source: Annual Business Inquiry; Scottish Executive

3.8 The number of boats, however, does not necessarily give an accurate picture of the amount of fishing effortor the number of fish landed. Over the ten years since 1993 there has been considerable technological advance, sothat a vessel can catch substantially more than it did then and vastly more than 30 years ago. In the pelagic sectorthere has been a move to highly sophisticated very large vessels so that although the number has fallen thetonnage of the fleet and horsepower have both increased30. It is hardly surprising, therefore, that the tonnage offish landed in 2002 was substantially greater than in 1997 (Table 3.4). In the shellfish sector there was littlechange. In the demersal sector, however, the recorded tonnage landed in 2002 was only about half that landed in1997. This was a consequence of substantial reductions in quota since 1999, and probably increasing scarcity ofresource; but whether it gives a true indication of the fall in fishing effort must be open to doubt, in the light of the high numbers of illegal landings referred to elsewhere in this report.


Brechin and Montrose

Inverness

Aberdeen

Elgin and Forres

St. Andrews

Lochgilphead

North Ayrshire

Thurso

Girvan

Wick

Stanraer

Sutherland

Dunoon and Rothesay

Orkney Islands

Lochaber

Dingwall

Oban

Kirkcudbright

Banff

Newton Stewart

Skye and Ullapool

Western Isles

Campbeltown

Argyll Islands

Keith and Buckie

Berwickshire

Shetland Isles

Peterhead

Arran

Fraserburgh

0 10 20 30 40 50 60 70Per cent

Table 3.1: Fish Landings into Scottish Ports 2002 by UK Vessels.

£ million

Demersal Pelagic Shellfish TotalPeterhead 36.9 17.4 5.5 59.8Shetland 10.0 24.9 .7 36.3Fraserburgh 10.0 5.4 14.9 30.2Wick/Scrabster 17.6 – 6.1 23.7Aberdeen 13.3 – 2.7 16.1Ullapool 6.9 0.1 4.2 11.2Lochinver 8.0 – 2.7 0.8Kinlochbervie 8.2 – 1.3 9.5Stornoway 0.4 – 8.7 9.1Mallaig 1.9 0.3 6.3 8.4Oban 0.6 – 7.7 8.2Campbeltown 0.2 – 7.3 7.6Ayr 1.0 – 6.4 7.4Portree 0.4 – 6.6 7.0Others* 3.9 0.2 10.0 14.3Total 119.3 48.2 92.1 259.6

*Harbours where landings were less than £5 million a year. These include Orkney, Eyemouth and Pittenweem.Source: Scottish Fisheries Statistics 2002

000 tonnes

Demersal Pelagic Shellfish TotalPeterhead 37.5 53.4 2.0 92.9Shetland 10.5 69.1 1.1 81.0Fraserburgh 12.8 16.4 6.7 36.0Wick/Scrabster 16.1 0.1 4.9 21.1Aberdeen 15.4 1.0 1.2 17.6Ullapool 6.5 0.2 1.8 8.5Lochinver 6.4 0.1 0.9 7.4Kinlochbervie 6.9 0.2 0.6 7.6Stornoway 0.6 – 3.7 4.3Mallaig 2.3 2.7 3.1 8.0Oban 0.6 – 4.3 5.0Campbeltown 0.3 0.2 4.1 4.5Ayr 0.8 – 8.4 9.3Portree 0.4 0.1 2.1 2.6Others 4.9 – 5.9 10.5Total 122.0 143.4 50.8 316.3


Table 3.2: Landings into Caithness and Sutherland 2002.

Percentage

Local Rest of Scotland Rest of UK Foreign TotalKinlochbervie 20 80 0 0 100Lochinver 6 12 8 74 100Scrabster 9 43 11 37 100Wick 94 6 0 0 100

By value in £000

Kinlochbervie Lochinver Scrabster WickCod 847 454 7,948 43Haddock 1,356 685 8,145 144Whiting 145 54 500 15Monkfish 2,537 2,034 3,829 13Other Demersal 3,253 34,860 9,914 24Pelagic 37 18 30 0Nephrops 762 2,486 688 152Other shellfish 297 333 3,915 929Total 9,234 40,924 34,969 1,320

Source: Grangeston Economics, Economic Impact of White Fishing Quota Cuts in the Case Area, Draft report forCaithness and Sutherland Enterprise, Inverness, 2003.

Table 3.3: Active Scottish Based Vessels.

Over 10m 10m & under TotalDemersal Pelagic Shellfish Sub-total

1993 641 52 640 1,333 1,562 2,8951995 543 49 576 1,168 1,588 2,7561997 544 45 522 1,111 1,659 2,7701999 481 40 460 981 1,604 2,5852001 473 36 441 950 1,645 2,5952003* 340 27 412 779 1,668 2,447

* As at 13 November Source: Scottish Fisheries Statistics

Table 3.4: Fish Landings by Species Type.

000 tonnes £ million1997 2002 1997 2002

UK vessels into Scotland Demersal 225.1 122.0 168.3 119.3Pelagic 107.0 143.4 21.4 48.2Shellfish 54.7 50.8 89.3 92.1Total 386.8 316.2 279.0 259.6

Scottish vessels into UK Demersal 223.1 117.4 166.9 114.9Pelagic 130.0 150.3 25.1 49.9Shellfish 54.6 51.7 90.0 92.5Total 407.7 319.4 282.0 257.3

Scottish vessels abroad Demersal 35.8 15.3 27.5 21.7Pelagic 162.2 110.8 48.6 47.9Shellfish 0.4 0.4 1.2 1.3Total 198.4 126.5 77.3 70.9

Source: Scottish Fisheries Statistics 2001 and 2002


The Catching Industry as a Business

(a) Pelagic Sector3.9 The commercial performance of this sector suffered a near terminal setback during the 1970s, when theherring fisheries had to be closed. As stocks recovered and as it became possible to separate the catching of herringand mackerel, the sector recovered, and mackerel became the dominant source of earnings. These trendsencouraged a number of enterprising fishermen to set about investing in the modernisation of the fleet throughthe commissioning of new, state-of-the-art vessels.

3.10 By 2002, a Scottish fleet of some 33 vessels (down to 27 towards the end of 2003) generated gross earningsof £98m (see Table 3.5), which compares with 45 vessels and gross earnings of £74m in 199731. Although financialdata on this fleet are not available, the general view is that substantial profitability and excellent returns oninvestment are being achieved.

3.11 The fleet is efficiently managed, as is its quota regime. This means that for the immediate future, earningsappear to be sustainable and may even be increased. Current prices also look to be sustainable, in large partbecause of the growing market into Northern Europe. Against this background, reasonable projections of incomeup to at least three years ahead can be made. This in turn will assist in encouraging further investment tomaintain the efficiency and competitiveness of the fleet. Even if stocks should decline at some time in the future,the management of this group is now fairly compact and should be able to take appropriate action.

(b) Shellfish Sector3.12 Since 1998, this sector has experienced growth of around 2% a year; higher levels were obtained over theperiod 1985 to 1995, but there was then a sharp decline until 1998. The recent growth has been sustained by amodest increase in unit prices (15% from 1998 to 2002) across the sector32.

3.13 Recent financial surveys have shown the profitability (net profits excluding depreciation and interest) of the Scottish fleet to be around 23% of turnover in 2001. Rates of return on capital were also high with a range of30% to 40%. UK Survey results do not show separate data for Scottish creelers/potters but the profitability of thesevessels on a UK wide basis was also high – ranging from 19% to 24% – and with rates of return around 20%. An exception to these financial results arose amongst Scottish vessels of less than 10 metres, which incurred losses33.

3.14 There is, however, concern that there may be over-capacity within the inshore fisheries; and also thatwhitefish vessels that are short of quota are diverting their efforts towards catching shellfish. The potential of thehigher value species suggests that it is reasonable to project a growth in earnings at a modest rate of 2% to 4%over the medium term; but profitability of individual enterprises will depend upon appropriate rationalisationand modernisation of the large inshore fleet. At the same time, there is a pressing need for improvements inquality and service, especially now that higher value products are being handled.

(c) Demersal Sector3.15 This sector has a diversity of species and, although cod and haddock are important components, togetheraccounting for 40% of the total, in absolute amount they represent only a modest turnover of £55m (see Table3.5). Commercial performance of the sector has been dominated by the difficulties especially over cod, but thesehave also affected haddock, and other demersal species landed by Scottish vessels have not fared well.

3.16 In contrast, landings by foreign vessels comprise a range of species which, by and large, are of little interestto the British consumer and therefore to Scottish vessels. But this mix of species has led to an increase in the valueof their landings of 74% between 1998 and 200234. Ironically, these landings are sent directly for processing topoints nearer their end-markets in Europe.

3.17 In 1982, the Scottish demersal fleet landed some 300,000 tonnes of fish. By 2002, that total had come downto 133,000 tonnes (see Table 3.4). Such a decline has severely affected commercial performance. By 1998, arelatively good year but when the slide had already been under way for some time, the earnings from cod andhaddock amounted to £97m and in 2002 they were down to £55m, as just mentioned. Earnings from cod alonedeclined from £45m in 1998 to £24m in 200235.

3.18 Not surprisingly, financial surveys have shown a correspondingly serious decline both in net profitability(excluding depreciation and interest) and return on capital. The latter fell from a range of 17% to 21% in 1998 to –1% to +10% in 200236.


3.19 It is evident that the quota levels for cod and haddock in 2002 made a significant proportion of the demersalfleet no longer viable. The 1998 results indicate that if earnings were around £100m, reasonable returns could beachieved. This means that the proposed increase in the North Sea haddock quota for 2004, which will add some£16m, even with decommissioning, will not be enough to restore viability to the fleet, although this decisionshould enable gross earnings to increase. Although we believe that, if the cod recovery is effectively managed, it will be possible to increase quota again, it is impossible to predict either when or by how much this might be.

Table 3.5: The Catching Industry in 2002.

Earnings £m % Employment %Pelagic sector 98 330 6

Mackerel 83 85Herring 10 10Other 5 5

Shellfish sector 94 3,650 64Norway lobster (prawns) 56 60Scallops 18 19Crabs 6 6Other 14 15

Demersal sector* 137 1,727 30Haddock 31 23Cod 24 17Monkfish 24 17Plaice 9 7Ling 6 4Whiting 5 4Other 38 28

Note*: Out of this total, Scottish vessels landed £22m in foreign ports of which plaice accountedfor £8m and monkfish £3m. In addition to the total above, foreign vessels landed £50m inScottish ports which included scabbard fish (£9m), grenadiers (£8m), cod (£6m), haddock (£5m),blue ling and hake (£4m each).

Source: Scottish Fisheries Statistics 2002 and 2003 Economic Survey North Sea and West ofScotland Whitefish Fleets, Sea Fish Industry Authority

Aspects Influencing Commercial Success

(a) Control and Regulation3.20 The operation of the CFP means that earnings in the catching industry depend on the interaction betweenregulation and market forces. Moreover the regulatory decisions based on fish stock assessments have not beeneasy to predict. This uncertainty complicates decision making, especially in relation to capital investment and theadoption of new technology. So far this has made the catching industry commercially unstable.

3.21 Within this overall environment, the UK Government and the Scottish Executive have sought to supportthe catching industry. The cost of these support policies is set out at the end of this chapter (see Table 3.9), butwhat emerges is that, despite a disproportionate cost in relation to the earnings of the industry, especially asregards the demersal sector, the earnings of that sector have mainly reflected variations in stock assessment. Forthe present at least, the demersal sector has become dependent on public intervention in one form or another.

(b) Finance3.22 The way in which the fishing fleet has been financed raises several problems. First, the asset base forlending by the institutions has generally been taken to include as collateral a valuation of a vessel and of thequota associated with it or acquired for it. In good times, the value of the vessel will be well underwritten by itsresale potential, while the value of a quota will enjoy considerable appreciation to reflect the entitlement toexpanding earnings. In bad times, however, these features operate in reverse: the vessel loses its resale value; thequota value falls; and, the sharp decline in earnings savages the ability to service debt. Hence the financialsituation in which the demersal fleet finds itself now.


3.23 Secondly, as conditions deteriorate, financial institutions become increasingly concerned about therecovery of their loans. In the case of overdrafts, which are a prevalent instrument in this industry, theyprogressively cut back the limits set, often at short notice. Working capital and other essential expenditures arethen constrained. At the same time it is a feature of overdrafts that personal assets are included as collateral. Theresult is that vessel owners/partners come under severe domestic pressure.

3.24 Even where term loans have been applied, the term in most cases does not reflect the life of the asset (thatis principally the vessel) and indeed may only represent half or less of it. As a consequence, the debt servicingrequirement becomes more onerous just when conditions facing the industry worsen.

3.25 The outcome is that, when government pays for decommissioning, the main beneficiaries are the banks,who recover the loans that would have been largely lost if the vessel owners had gone bankrupt. Often the ownersare left with relatively little. One may say that this demonstrates the imprudence of the banks in lending underthese conditions and that they ought at least to have met some of the costs that are borne by government infinancing decommissioning.

3.26 These shortcomings are primarily a product of conventional lending practices. The stark contrast betweenthe success now being enjoyed by the pelagic and some components of the shellfish sectors on the one hand, andthe demersal sector on the other, demonstrates what can happen over a relatively short time. This problemapplied also to the pelagic sector in the 1970s and it follows that if the pelagic or shellfish sectors were to enter aperiod of declining fish stocks in the future, they too would experience the exacerbating effects of current lendingpractices.

3.27 In our view the immediate debt service problem could best be resolved by a moratorium on debt servicingwithin the demersal fleet. This would allow for an orderly rescheduling of debt on terms that would permit thefleet to avoid bankruptcy, survive the present constraint on catching and permit a more orderly restructuring toenable the best equipped vessels to be retained for the longer term. In this process, overdrafts, excluding workingcapital requirements, should be converted into appropriately structured term loans.

3.28 In order to achieve this, we propose that the financial institutions involved, together with the UKGovernment/Scottish Executive, should examine whether an arrangement can be negotiated. We think that thebanks should be pressed to bear part of the cost of delaying interest payments, since if the industry was left to gobankrupt they would have to bear substantial loss. The UK Government/ Scottish Executive, however, will need tobe prepared to underwrite some of the risk, if support from the private sector institutions is to be obtained. Wethink this could be a good deal for government, as well as the banks, especially if the policies for stock recoveryare successful; it could cost them much less that allowing the sector to be reorganised through bankruptcies.

3.29 For the longer term, we would like to see the financing of the Scottish fleet based on terms that are betterable to withstand the fluctuations in earnings that are a feature of this industry and are caused by the naturalvolatility of fishstocks, as well as by the regulatory system of the CFP. We therefore urge the Scottish Executive to examine the case for establishing a Fishing Industry Finance Corporation to manage whatever financialarrangements come to be agreed; it might, for example, be enabled to raise some of its funds as equity, therebyreducing the industry’s reliance on debt finance. One of the objectives of such a corporation should be to fundthe application of the latest technology in the industry.

(c) Technology and Competitiveness3.30 The purpose of decommissioning is to reduce capacity in the demersal sector so that the permitted amountof catch distributed among the remaining vessels is enough to produce a profitable industry. So far it appears thatmany of the vessels being decommissioned are modern, rather than the older ones in the fleet. It may be that theremaining fleet will have more manageable debt service requirements, since it is those with unmanageable debt that are most likely to opt for decommissioning. But this may not leave a fleet best able to face a competitive future.

3.31 The pelagic fleet is now at the forefront of technology and efficiency. Indeed, its standards comparefavourably with anything available in other EU fleets. But in the shellfish sector the standards are more variableand substantial investment may be needed, if it is to achieve the best levels of efficiency and productivity.However, competition from other countries’ fleets is not a factor in the inshore waters, so it may not be so urgent,especially for the smaller vessels fishing in these waters. While investment would raise the productivity of theinshore fleet, the manpower required would probably be sharply reduced.


3.32 If investment is to be undertaken, whether in the demersal fleet or the shellfish sector, some stability isrequired in the regulatory regime. At present the attempt to manage by quota for single species in a mixed fisheryhas resulted only in instability. This is not a good climate for investment and is one more reason for trying to finda better regulatory system than the TAC and individual species catch quota system.

(d) Ownership Structure3.33 The traditional Scottish system of shared ownership, or owner skippers, though having many advantagesand part of the way of life in fishing communities, may not be well suited to an industry that requires to raise somuch capital. The Scottish fishing industry is in competition with the fishing industries of other countries withinthe EU and cannot rely just on the principle of relative stability for protection. If it does, the pressure from foreignfishermen to buy UK quota could become a more serious threat. Consideration therefore needs to be given to theadvantages of reforming into a corporate structure. This would not be welcome to the industry, which feels muchattachment to its traditional ownership structure. But it would make it easier to raise capital for investmentwithout the problems of huge personal debt and to buy quota (whether catch or effort quotas) from fishermenthat retire. It would put the Scottish industry onto a similar basis to the fishing industries of many EU countries.

3.34 Alternatively, quota could be held by Producers Organisations (POs) and rented out, if they could raise thenecessary funds. This type of scheme is operated in Shetland by the Shetland PO and the Shetland Islands Council(SIC) through its subsidiary Shetland Leasing and Property Development Ltd. (SLAP). The scheme seems to havemuch to commend it, especially in facilitating the entry of young fishermen to the industry. But we recognise thatSIC had the advantage, not available to other Councils, of funding from its oil revenues. We also recognise thatthere would be difficulties in using taxpayers’ money for this purpose, especially if competition between publicbodies was involved, and that such schemes must not involve subsidy, if they are to avoid transgressing the EUrules on fair competition.

(e) Involving Industry in Policy Decisions3.35 The environment essential for a successful industry also requires the industry to have a bigger part itself indetermining the regulatory framework of the CFP. An example of how this should not work is provided by somerecent decisions in the Council of Ministers: it was only after these were taken that the industry complained theywould be unable to catch the allowed quota of haddock in the time available and with the area restrictions.Whatever the truth of this, it is a matter that should have been thrashed out before decisions were taken andwhich required the industry’s expertise to do so. Other features essential for success include a high level ofcompliance, once a regulatory regime is established, achieved as far as possible through co-operation andconsensus. A public sector-led forum, which is suggested later in this report (see Chapter 7) might have a role toplay in helping to achieve these ends.

3.36 If the fish catching industry is to assume more responsibility in determining management issues, thisrequires a more cohesive structure. At the moment the industry’s representative bodies are fragmented. If theindustry were able to come together under a single representative body and that body were to equip itself withsome scientific expertise and to be well informed about management issues, we could see it entering into fruitfuland helpful discussion with government scientists and with Ministers. The example of the National Farmers’Union, especially in the days of the annual price review for agriculture, gives an indication of what this mightachieve. This would not only help to bridge the gulf between the fishermen and scientists but also lead to betterinformed policies being adopted. We therefore urge the representative bodies in the catching industry to considerhow an overall representative organisation might be constructed.

3.37 Later in this report we make some proposals for the Fisheries Research Laboratory in Aberdeen and theScottish Fisheries Protection Agency to be given management boards for which some of their members would bedrawn from the industry (see Chapter 7). This move would also help to bring the industry and scientists togetherin constructive dialogue and at the same time give them some responsibility for compliance with the catchingregulatory system.

The Social Impact of the Decline in Employment

3.38 Employment has already fallen in the catching sector as a whole from 9,420 in 1993 to 5,707 in 2002, a fallof 40% (Table 3.6). Much of this is due to increased efficiency resulting from technological improvements.Employment is related quite closely to the number of vessels so that where, as in the pelagic sector, the number ofvessels has fallen but fish landings and catching capacity have increased, productivity has risen. Productivity willalso have risen in the demersal sector. But the loss of jobs in this sector also reflects the reduction in fishing effort


as a result of reduced quotas and the vessels taken out of the fleet through decommissioning. In the shellfishsector the landings seem to be fairly stable but the number of large vessels fell by 47% and vessels under 10 metres(most of which will be fishing for shellfish) rose by 7% from 1993 to 2003 (Table 3.3). It would seem that therehas been a significant increase in productivity in this sector. Clearly the scale of the reduction in vessel numbersin this sector means that there has been a substantial loss of jobs.

3.39 This is a severe contraction in areas of Scotland that are very dependent on this industry; and if it provesnecessary to have any further reduction in the number of demersal vessels to secure a sustainable and profitablefuture for the sector, that will reduce employment further. But it is important to recognise that, even without this,employment would have declined in the past and will decline in future through the combination of a finiteresource and increased productivity per vessel and per man in catching it. In this respect the fishing industry is no different from agriculture where, despite an expansion in output, employment has declined steadily over thelast century.

Table 3.6 Employment in Sea Fishing in Scotland 1993-2002

1993 1995 1997 1999 2001 2002

Total employed 9,420 8,395 8,194 7,330 6,637 5,707As a % of 1993 100 89.1 87.0 77.8 70.5 60.6

Source: Scottish Fisheries Statistics 2002

3.40 The following paragraphs attempt to assess the likely impact over the next three years on employment andfisheries dependent communities (FDCs) of the changes that will stem from further modernisation to make thecatching sector a successful industry. It should be emphasised that such predictions are inevitably subject to awide margin of error.

(a) Pelagic Sector3.41 Despite the reduction in vessels from 54 to 27 in the years 1991-2003, aggregate tonnage and powerincreased by 106% and 34% respectively37. The fleet is the most modern in the catching industry with an averageage of 12 years. Therefore, the size of the fleet may not change much by 2006. But the trend associated with technological progress will continue to have some impact and could generate further job losses of up toaround 3% a year. If that were so, with employment of 270 at the end of 2003, job losses of up to 27 or so couldoccur by 2006.

(b) Demersal Sector3.42 If it is assumed that multi-species management with a larger haddock quota assists in stabilising grossearnings, changes in employment over the next three years are still likely to arise from commercially drivenadjustments to capacity and technological progress. The average age of vessels is 14 years.

3.43 If the cod recovery programme is successful, there should be a prospect of increased earnings, but it is notpossible to predict when this may occur. It is unlikely to happen in less than five years. Significant newinvestment in modernisation, along with more efficient and powerful vessels, could be encouraged by thisprospect, but is unlikely in the next few years. Despite this, some technological progress and increasedproductivity will still occur.

3.44 The employment in this sector in 2002 was 1,727. But a significant adjustment has to be made for the 2003round of decommissioning, which involved some 70 vessels and would equate to around 350 jobs. As a result, thefigure may be around 1,325 at the start of 2004. If technological creep reduced the manpower required by afurther 10% during the period to 2006, a further 132 jobs could be lost.

(c) Shellfish Sector3.45 This sector is much the largest in manpower and number of vessels. The greatest number of them, 1,668,are under 10 metres. As already noted, these vessels have slightly increased in number and they account forslightly under half those employed, a fair amount of whom will be part time. Between 1992 and 2002, thenumber of vessels over 10m in length declined by 36% to 412; yet, despite this, the average age of these vessels,which has steadily increased to 20 years, is substantially greater than in the other two sectors38. Meanwhile,although many of these vessels continue to be commercially viable, profitability has declined39.


3.46 All of this suggests under-utilisation of capacity and a lack of investment. Success for this group ispredicated on reversing these trends and on significant modernisation. The consequence could be a decline inemployment and if this were to amount to 10% or so up to 2006, the loss of jobs from an estimated workforce in2003 of 3,468 would be 346. If, in addition to this investment, technological progress continued as normal, onthe same basis as with the pelagic fleet, the loss of jobs could be even higher. However, this estimate is particularlydifficult to make, as the small vessels and those over 10 metres may experience different trends. It is possible thatthe former may be less affected by competition or the pressure to modernise, and this may be why their numbershave been growing. If that proves to be the case, the decline in employment for the shellfish sector may be lessthan the 346 estimated.

3.47 The 2004 decision by the Council of Ministers to increase the prawn quota could add some £17m to thegross earnings of this group and should permit more vessels to improve their profitability. But, it is unlikely toaffect the underlying trends just mentioned. While the margin of error on all these predictions needs to beemphasised, it does seem likely that the reduction in employment in the shellfish catching industry over the nextthree years could be on a similar scale to that in the demersal sector, even without the problems with stocks thataffect that sector.

(d) Support Services Industry3.48 These services comprise a diversity of activities: fishing agents, chandlers, engineering, electronic andsoftware services and repair. Management and technological changes are resulting in reduced employment for agiven number of active vessels. Yet, at the same time, the number of vessels is also falling, except for those under10 metres.

3.49 Modernisation in the catching industry will generally result in larger and more powerful vessels, althoughthere will still be a large number of small vessels. This can be expected to have some impact upon supportservices, but increased technical requirements associated with more sophisticated vessels will at the same timeincrease work for support services.

3.50 This makes it difficult to make predictions, but the support industry is quite large and even a small increasein productivity, combined with fewer vessels to support could have quite an impact. For example, if the combinedeffect of these changes plus some allowance for increased productivity were 3% a year, some 329 jobs might go (at 1.5% it would be 164) out of employment estimated for 2003 of 3,291.

Overall Employment Impact in the Catching Sector and its Supporting Services Sector

3.51 The assessment thus far suggests that employment loss in the catching industry might be of the order of856 in the period up to 2006; and, if support services are included, this could rise to 1,18540. The loss in thecatching sector amounts to 17%; a figure closely corresponding to the loss of jobs in the three years up to 2003.

3.52 Whilst this assessment has of necessity had to be speculative, it reflects the Committee’s view of thechanges that are likely to stem from necessary modernisation of the fleets – some 70% arises from technologicalprogress. This should not be viewed negatively but rather as a means of securing commercial success. Indeed, theassumption underlying these figures is that by the end of 2006, the fleets will be stabilising close to a sustainablecatching capacity.

The Impact by Area

3.53 The landings in Table 3.1 show that the shellfish sector is spread around the Scottish coast. The demersaland pelagic sectors on the other hand are heavily concentrated in the North East and Shetland, but withsubstantial landings, mainly from vessels from other areas, in Caithness and Sutherland. The heaviest impact ofthe present and any future reductions in these two fleets will therefore fall in these areas.

(a) The North East Coast3.54 In the North East there were 239 boats in the demersal sector in 2002 with a direct employment of 1,31541.When the local indirect employment and the assumptions for the effects of the multiplier are added to this, thetotal for jobs dependent on the demersal fishing sector comes to 3,338.

3.55 The decommissioning round of 2003 reduced the demersal fleet in Scotland by a further 70 vessels and themajority of these will be based in the North East. It is likely therefore that the total number of vessels will now bewell below 200. And if the demersal fleet is not yet profitable, because it still proves too large for a sustainableresource, some further reduction in the number of vessels may occur.


3.56 The irony of this situation is, however, that the fish catching industry does not find it easy to recruit labourat present. Indeed there are vessels with less than a full complement of crew. In part this is because with lowmorale, the industry does not seem attractive to many young people starting out their careers; in part it may bebecause skippers in a desperate attempt to cut costs do not recruit their full complement. But it is also the casethat unemployment is low in most of the fishing communities as Table 3.7 shows. Aberdeen, Fraserburgh andPeterhead all have unemployment rates below the Scottish average and so do Buckie and Banff.

3.57 Nevertheless, the contraction that has already taken place in the catching industry, mainly in the demersalsector, has been substantial and it is remarkable that the impact on unemployment seems to have been contained.Many of those who have lost their jobs may either have found places in other vessels or, especially in the NorthEast, left the immediate area in search of jobs in the wider region or elsewhere.

Table 3.7: Unemployment by Claimant Count at December 2003 by Travel To WorkArea (TTWA).

All persons Males% Unemployment Rate

All Persons

Scotland 96,166 74,622 3.7

Aberdeen 3,394 2,655 2.0Peterhead 398 305 2.3Fraserburgh 235 178 2.0Keith and Buckie 359 265 3.0Banff 337 229 2.4

Shetland 190 157 1.5

Sutherland 357 242 5.9Thurso (Scrabster) 243 189 2.6

Lewis and Harris 527 433 4.1Uist and Barra 138 105 3.0

Source: Scottish Executive

3.58 While there will, nevertheless, be knock-on effects on local incomes and unemployment of any further joblosses, there would seem to be a reasonable prospect that this too can be contained without a major rise inunemployment. The North East coast is a scheduled Objective 2 area, but even with the maximum help fromthese bodies the prospects for providing alternative employment in the North East coastal towns is not good. Itseems inevitable that there will be some population loss, with young people moving to other parts of theGrampian region and beyond in search of better employment prospects. Taking the area as a whole, it at least hasthe advantage that the Grampian region has the highest GDP per head in Scotland and one of the highest in theUK. It should be able to generate enough new job opportunities, even if these are only to a limited extent in thecoastal fishing towns themselves.

(b) Shetland3.59 Demersal fish landings in Shetland in 2002 were comparable to Fraserburgh and exceeded only byPeterhead. There were 27 demersal fishing boats in Shetland in 2003 employing about 180 fishermen.42 The fleet issaid to have shrunk already by 40% over the last 13 years (approximately in line with the reduction in thedemersal fleet generally) with the loss of about 80 jobs, 30% of Shetland’s catching employment. But improvedcatching efficiency can be expected to raise productivity and reduce further the number of vessels the fishery cansupport; some further reduction may also be necessary to bring the fishing capacity into line with the resource.

3.60 The Shetland economy is remote from the main markets, and is narrowly based, depending heavily on fishcatching, fish farming, fish processing, oil related activities and knitwear. There is much less opportunity todiversify the economy than in the North East, especially if that region is taken as a whole. However,unemployment is at present very low, only 1.5% (see Table 3.7). Admittedly, with a small and narrowly basedlabour market, it would not take much to change that. But Shetland is within the area of responsibility ofHighlands and Islands Enterprise, which has special powers of assistance including grants, and has its own localenterprise company, Shetland Enterprise. The whole Highlands and Islands region was an EU Objective 1 area (i.e. eligible for the highest priority aid from the EU Structural Funds) until 2000, and therefore can benefit from transitional assistance up to 2006.


3.61 In recognition of the gravity of the situation for the islands, Shetland Islands Council has itself proposed apackage of measures to meet the crisis. These include: (1) increased purchase of quota through Shetland Leasingand Property Development Ltd. (SLAP), a subsidiary company controlled by the Council and financed by oilrevenues, in addition to the quota already held by the local PO (see para 3.34) – this is to ensure that quotaavailable to island fishermen is increased rather than lost, as some fishermen leave the industry; (2) takingresponsibility for local management of fisheries within the 6 and 12 mile limits; and (3) a greater role for theNorth Atlantic College in scientific stock assessment.

(c) Caithness and Sutherland3.62 As noted already, the fisheries harbours of Scrabster, Kinlochbervie and Lochinver are among the majorfisheries ports in Scotland (see Tables 3.1 and 3.2)43. All three ports have substantial landings of demersal fish,amounting to 78% of their landings by value in 200244. Kinlochbervie accounted for 24% of these demersallandings, Lochinver a further 24% and Scrabster 51%. But the quantities of cod, haddock and whiting were greatlyoutweighed by ‘other demersal species’. These included megrims, saithe, ling and dogfish. There was a significantamount of deepwater species from the Atlantic. There is concern, however, about the sustainability of thesestocks, especially if reduced cod quotas cause more boats to switch to this deepwater fishing.

3.63 These three ports are unlike the main fisheries ports on the east coast or Shetland in that only a relativelysmall proportion of landings are from local boats (Table 3.2). All three harbours are used by vessels from the restof Scotland, mainly from the east coast, and to some extent the rest of the UK; foreign vessels also make extensiveuse of Lochinver and Scrabster, though not of Kinlochbervie. In consequence the impact of any further cut indemersal fishing affects directly only small numbers of jobs in the local area and would probably be mainlythrough the impact on support services. The main impact is therefore likely to be outside these areas; but in viewof the small population, any local impact, however small in absolute numbers, is likely to be keenly felt.

3.64 It is estimated that the impact of the December 2002 quota cuts would lead to the loss of 10-16 jobs inLochinver, 11-22 in Kinlochbervie and 9-14 at Scrabster45. This gives a total of between 30 and 52. However, thelarge number of foreign vessels landing at Lochinver and Scrabster make such calculations especially hazardous,since their behaviour is difficult to predict. Scrabster is used by the Faroese, who land fish here from their ownwaters for the British market. On the whole, Kinlochbervie seems the most vulnerable of the three, because of itsisolation; and the absence of foreign vessels makes it entirely dependent on UK quota.

(d) Other Areas3.65 Elsewhere, the effects of job loss in the catching industry are likely to be fairly widely spread, because of thenature of the shellfish industry. But the Western Isles deserve mention, since total landings amount to nearly £10million, almost entirely from the shellfish sector, and some vessels from the Isles are also likely to land at westcoast ports on the mainland. Here some loss of jobs is likely, as the industry modernises, and that will not be easyto handle. Lewis and Harris TTWA has an unemployment rate of 4.1% (see table 3.7) and the other main industry,tweed, has been in long term decline. The area has had generous aid from the EU and, like Shetland, is eligibleuntil 2006 as a transitional Objective 1 area. It also has the benefit of much assistance, including grants fromHighlands and Islands Enterprise. In the long run, however, much will depend on the successful management ofthe shellfish sector, and of inshore fishing in the Minch and elsewhere. These matters are dealt with later in thisreport (see Chapter 7).

3.66 In all of the above areas, considerable efforts have been made and continue to be made by local authoritiesto mitigate the impact of job loss. The Committee has been impressed by their efforts and would stress theimportance of continued support.

3.67 The Committee also strongly supports the efforts of the Scottish Enterprise network to promote smallbusiness development and to encourage inward investment from other areas. However, the creation of smallbusinesses is a slow and very uncertain process and its impact is most likely to be felt well after the adjustmentsthat will have to have been undertaken over the next three years.

3.68 We urge Ministers to make as much use as possible of the EU Structural Funds for which all of the mainfishing dependent communities are eligible. In the last chapter of this report we propose the use of resettlementgrants and early retirement schemes, both of which may be funded by FIFG. We also attach importance totraining and retraining, which may be part funded by the Structural Funds. These measures could go some waytowards mitigating the impact of the job losses in the fishing industry.


3.69 Recommendations:• That Ministers and the financial institutions should seek to negotiate an arrangement for debt

rescheduling and restructuring under which the demersal fleet is granted a debt service moratorium foran agreed period.

• That Ministers and the financial institutions should examine the case for establishing a Fishing IndustryFinance Corporation.

• That the Scottish Executive and the Scottish fishing industry should jointly examine the industry’sownership structure to establish whether a regrouping into a corporate structure would strengthen itsability to compete in the future.

• That the SFF and other representative bodies in the catching industry should consider how they can mosteffectively come together to discuss issues of stock conservation with government scientists and negotiateeffectively on management and regulatory issues.

• That consideration should be given to early retirement schemes for fishermen wishing to leave theindustry and to resettlement grants, both of which are eligible for FIFG funding; and that the resources ofHIE and the Scottish Enterprise network as well as the EU Structural Funds be used to the maximumextent possible to help retraining and the promotion of new small business in fisheries dependent areas.

The Processing Industry3.70 The Scottish processing industry accounts for 49% of the turnover of UK industry. Geographicaldistribution of the turnover of the Scottish industry is 65% around Aberdeen; 24% in central and southernScotland; and 11% in the Highlands and Islands46 (see Table 3.8).

3.71 The industry forms an integral part of the fishing-based economy. It accounts for more jobs than thecatching industry and aquaculture combined, with the added significance that it provides employment forwomen in otherwise male-dominated labour markets. Closure of a major processing plant could have a moreserious impact on the local community than the direct effects of decommissioning. Processing also creates theessential element of value-added production; without access to local processing facilities, there is the risk that thelocal fleet would bypass the local quayside market and land its catches elsewhere.

3.72 Two distinct sub-sectors make up the processing industry: (a) the primary processors involved in thefilleting (and freezing) of fresh fish for onward distribution to fresh fish retail and catering outlets or for furthervalue added processing; (b) secondary processors producing chilled, frozen and canned products for theretail/catering trades. At present a significant share of Scottish fresh fish landings is trucked south to Humbersidefor value-added processing.

3.73 Overall, the structure of the industry is highly fragmented with large numbers of small, mainly primary,processors and a relatively small number of large, mainly secondary, processors. This fragmented structure makesfor difficulties in quality control. Some rationalisation and downsizing of the industry has taken place. Forexample in Shetland, employment in whitefish processing has fallen from around 150 to 50 in five years. Todayonly one major firm survives, together with half a dozen smaller businesses supplying the local market. Here, aselsewhere in Scotland, the decline in whitefish processing is not related solely to the shortage of raw materials butalso to competition in a global market from overseas processors with much lower labour costs.

3.74 The current situation to some extent reflects the fortunes of the catching industry. Those involved inprocessing pelagics and shellfish (together with farmed fish) are expanding their operations. Some of thoseengaged in whitefish processing are in difficulty. However, the processors have been less affected by the reductionof whitefish landings than the catching sector. Although a few smaller primary processors have closed and anumber of larger plants have downsized, many of the larger secondary and mixed plants have begun importingsupplies of frozen fish from overseas to replace scarce local supplies. For example, only 8 % of cod processed in theUK is from home sources, and, while figures for Scotland are not available and are probably higher, the ease ofimporting cod blocks highlights the independence of many of these facilities.

3.75 Imported supplies have contributed to low quayside prices for whitefish on Scottish auction markets,despite scarce local supplies. Where major processors have established regular contracts with overseas suppliers,they may be unwilling to buy local fish, when conditions in the whitefish sector improve. A repeat of thesituation in the 1980s could occur, when a lack of pelagic processing capacity in Scotland led to the sale ofScottish catches to overseas processors.


3.76 Meanwhile, the smaller processors, less well-placed to purchase supplies abroad, are enjoying the benefit oflower prices (but irregular supplies) for locally landed fish. It is alleged that a number of smaller primaryprocessors remain viable only on the basis of handling illegal landings, a situation likely to end with theregistration of processing firms and the introduction of systems of traceability of fish ‘from the fishing grounds tothe retail outlet’ in the near future.

3.77 Although the sourcing of raw materials is clearly an issue, some of the more immediate problems facing theprocessing sector relate to non-resource costs (increased water charges, higher insurance rates, inter alia), thescarcity of labour and the absence of government support. Difficulties in attracting local labour reflect the lowpay, the seasonal or casual nature of employment and the poor work environment compared with office orsupermarket jobs. The high turnover of labour and high levels of absenteeism experienced in some plants addssignificantly to labour costs. As a result, firms are now turning increasingly to agency labour and the employmentof unskilled immigrant workers.

Table 3.8: Processing Industry – Business Turnover and Employment 2000.

Turnover (£ million) % Employment %Secondary & Mixed 577 80 6,661 84Primary 143 20 1,228 16Total 720 100 7,889 100

Source: 2000 Survey of Sea Fish Processing Industry, Sea Fish Industry Authority; and UK Seafood Industry AnnualStatistics 2002, Sea Fish Industry Authority

3.78 There is also international competition in fully prepared foods, especially those using shellfish. At themoment Scotland is a significant exporter of prepared shellfish, but it is also a substantial importer. It follows that,if the Scottish shellfish industry should falter for any reason, imports can be expected to extend their foothold.

3.79 Finally, there is outsourcing of certain stages of fish processing, whether sea fish or aquaculture, to othercountries, most prominently to China. At the moment, competition has most impact on primary processing butthe fact that it can take place at all will intensify competition in the future throughout the processing chain.Related to this is the landing of Scottish fish abroad. In particular, the pelagic sector lands between 50% and 75%of its catch abroad, much of in Russia and northern Europe, and the consequence of this is that processing hasbeen moving out of Scotland.

3.80 While the directions of international competitiveness are a threat to the Scottish industry, this has to becountered by good management and innovative approaches to product development and marketing. Ofoverriding importance will be relationships with the retail sector and we would expect most of the currentfacilities to make a success of exploiting these opportunities.

3.81 In the primary processing sector the position is rather different. But, even here, the economics of locationaldependency on landings has been weakening with consolidation, especially through the merging of this stage ofprocessing with secondary processing. Moreover it is often difficult to get labour for this type of work. This trendhas been accelerated with the exporting of much of the pelagic catch and the difficulties of supply with cod and haddock.

Conditions of Success in the Processing Industry

3.82 As the processing industry is moving progressively away from dependence upon local supplies and as it canbe regarded as capable of competing at the international level, most of its issues should be capable of beingresolved within the framework of the market.

3.83 However, two areas where there is a role for the public sector through the Scottish Enterprise networkdeserve attention. One stems from the policy to introduce traceability. This requirement will not only affectprocessors, but will stretch back into the catching industry where it is expected to make it easier to control illegallandings. Apart from this, and from food safety considerations, traceability has significant potential as amarketing tool. Priority should be given to exploiting it as a means of aligning the catching and processingindustries with retail trends and consumer preferences. It could also assist with high quality branding. Efforts overa number of years have been made to brand Scottish sourced fish but with only partial success. Theinternationalisation of supplies on the one hand will impose increasing limitations on the effectiveness ofbranding; on the other hand, it opens up opportunities to exploit niches where branding can be crucial.


3.84 Both these areas fall within the Scottish Process and Marketing Scheme which is handled through theScottish Enterprise network, whose efforts we commend, and we propose that they should be further enhanced.

The Outlook for the Processing Industry

3.85 The industry has the advantage of growing consumer demand, while the Scottish part of it has theopportunity, if it competes effectively, to secure a greater share of the UK domestic and export markets.

3.86 The process of consolidation, which is likely to continue, may lead to gradual relocation to main centres.The centres which can be expected to gain will be in the North East and in central and southern Scotland. The latter, in particular, experienced a significant expansion between 1995 and 2000. If this continues, theHighlands may lose further jobs, but some of these will be retained elsewhere in Scotland. In primary processing,commercial and supply factors are more likely to lead to an accelerating rate of decline in employment, both asthis activity is rationalised with secondary and mixed processing and because of overcapacity in relation to futurelevels of supply.

3.87 The employment in the processing industry is estimated to have been 7,870 in 2003. On balance it seems atleast possible that the net effect of all these changes could be a small increase rather than a loss in jobs, but thiswill depend on the industry’s competitive ability. If this happens the primary sector would be likely to lose andthe secondary and mixed sector to gain.

3.88 Recommendation: • That the Scottish Process and Marketing Scheme should be enhanced and greater effort put behind

broadening the scope of traceability and branding.

Support from Public Sector Sources for Fish Catching and Processing

3.89 The Scottish Executive, the UK Government and the European Union between them provide around £70ma year in support of the fish catching and processing industries. In addition to the £68m set out in Table 3.9, thereis the cost of price support under the fish withdrawal scheme, when landings fail to get the minimum price in the auction market. This will be a net amount and we understand that it is small, as the fish are then resold as fishmeal. The FIFG money is spent principally on decommissioning, processing and marketing, and oninfrastructure, such as ports and harbours (see para 2.25 above).

Table 3.9: Public Sector Support 2002 – in £ million.

Area £ million Notes:Enforcement 12.2 Cost of SFPA. In addition there is planned capital expenditure of £7m.Science 23.8 Cost of FRSFIFG grants 16.0 Averaged over the 6 years 2000-2006 and on the assumption that 70% of

the expenditure comes to ScotlandDecommissioning 15.0 2001 round of £25m, 2003 round of £40m and transitional aid of £10m all

spread over 5 yearsAdministration 1.0Total 68.0

Source: Scottish Executive

3.90 The greatest part of the total expenditure is related in one way or another to the catching industry; andwhile it is not possible to give a wholly accurate attribution, it is clear that the amount spent represents a highpercentage of this industry’s £329m turnover in 2002 (Table 3.5). Moreover, within this industry, much of thisexpenditure has been related to the demersal sector, which has a turnover of £137m. This support in part reflectsthe efforts made to mitigate the impact of the decline in this sector, mainly through decommissioning.

3.91 Inevitably the value for money of this level of expenditure will be questioned. The Committee has notattempted such an analysis; we do not consider that much would be gained from it. What matters is that theindustry should have a sustainable and commercially successful future. That is clearly possible, if the rightmanagement decisions are taken. The industry should then make a valuable and positive contribution to theScottish economy, well beyond the cost of any support it may be given. We would therefore like to see a strategyfor future support developed that aims to achieve this. In the long run, if the industry is restored to fullprofitability and is stable, it should be possible for it to absorb some of the costs of enforcement and scientific


research, presently borne by the public sector, just as it does in some other parts of the world. As well asencouraging inputs from the financial institutions and others into the industry, as we have recommended, itshould also be an aim to share some of the risk, much of which has ended up as a cost borne by the public sector.

3.92 In addition to the expenditure set out above, the public sector also deploys considerable resources,primarily through local authorities, Highlands and Islands Enterprise, Scottish Enterprise and the local enterprisecompanies, to assist the fisheries dependent communities adjust to change. This is part of general support forregional development and we have not attempted to estimate how much has been directed to fishing dependentcommunities. It does, of course, apply to fishing and other communities all round the Scottish coast. Suffice it tosay that this will have helped to achieve the low levels of unemployment in many of these fishing communities.

3.93 Our predictions in this chapter have shown that further job loss can be expected as the industry continuesto modernise and productivity rises. This will produce an efficient, though smaller, industry. Continuing effort bythe public sector will be necessary; but there needs to be a change in emphasis to give higher priority to theresettlement of those wishing to leave the industry and to re-training for those able to take advantage of otheropportunities in the economy.

References24DEFRA, United Kingdom Sea Fisheries Statistics 2002.25Seafish, Vital Statistics Winter 2002, June 2003.26Michael Thomson, The Regional Employment Contribution of the Fisheries Sector in the Scottish Economy, Scottish Economic Report, June 2002.27The contribution of aquaculture is more fully explained in Chapter 6.28Scottish Fisheries Statistics, 2002.29Scottish Fisheries Statistics 2002.30Economic Survey of the UK Fishing Fleet 2001, Seafish, Edinburgh June 2002, pp18-19.31Scottish Fisheries Statistics 2002.32Scottish Fisheries Statistics 2002.332001 Economic Survey of the UK Fishing Fleet. SeaFish Industry Authority.34Scottish Fisheries Statistics 2002.35Scottish Fisheries Statistics 2002.362003 Economic Survey of the North Sea & West of Scotland Whitefish Fleet. Sea Fish Industry Authority.372001 Economic Survey of the UK Sea Fishing fleet, Sea Fish Industry Authority.38Scottish Fisheries Statistics 2002.39Economic Survey of the UK Sea Fishing fleet, Sea Fish Industry Authority, 2001.40Estimated from Scottish Fisheries Statistics 2002.41AB Associates Ltd, Economic and Social Impact of CFP Fisheries Management Measures in North East Scotland, Final Report, March 2003.42SHOAL, The Future of Shetland’s Whitefish Fleet? Lerwick, 2003 and SHOAL, The Whitefish Plan, August, 2003.43Evidence from Highland Harbours.44Economic Impact of White Fishing Quota Cuts in the Case Area, A Draft Report for Caithness and SutherlandEnterprise. Grangeston Economics, June 2003.45Grangeston Economics, Economic Impact of White Fishing Quota Cuts in the Case Area, Draft Report for Caithnessand Sutherland Enterprise, Inverness, 2003.462000 Survey of Sea Fish Processing Industry, Sea Fish Industry Authority.


4 The Science of Stock Assessmentand its Role in Fisheries Management

Assessment Methods and their Reliability4.1 Modern fisheries science originated in the late 19th century amidst concern about over-fishing. TheScottish Fishery Board, established in 1882, and the Aberdeen Marine Laboratory in 1898, were at the forefront ofdevelopment of fishery statistics. The International Council for the Exploration of the Sea (ICES) was founded inCopenhagen in 1902. Scottish records of herring landings since 1810 were amongst the most comprehensive dataavailable, and by 1908 the Scottish Fishery Board was collecting data on catches in cwt/100hours fishing47 instatistical squares (1° latitude by 2° longitude) across the North Sea for every month. This system was consideredexemplary and was adopted internationally by ICES in 190948, thus setting the foundations for management offisheries in European waters based on collation of data by ICES. With the advent of the CFP in 1976, ICES wascharged with providing advice for setting TACs. Whilst fishery science is a vast subject area, including studies ongrowth, reproduction, diseases, genetics, migrations, behaviour, oceanography and all aspects of fish biology,much concern is currently directed at how TACs are defined.

Figure 4.1: ICES Fishing Areas. Most Scottish landings are from Area IV (North Sea) and Area VI (West of Scotland) with a smallercontribution from Area VIIa (Irish Sea).


47Cwt , hundredweight = 50.8kg.

4.2 Derived from 1960s and 1970s fishery science, the Law of the Sea gives coastal states rights to define TACs,and it is this mode of management that is implemented by the European Commission. However, it is nowquestionable whether single species TACs are an appropriate way to manage mixed fisheries.

4.3 ICES splits the European seas into statistical areas (Figure 4.1), and attempts to set TACs for each specieswithin each area, e.g. North Sea cod in Area IV. Thus species that may occur throughout large areas of Europeanwaters are divided into recognised regional stocks or management units. Ideally within a stock, the fish shouldmove freely throughout the designated area, and there should be no emigration or immigration across theboundaries of the area.

4.4 For the major species, TACs are based on estimates of the quantity of the fish in each stock.Recommendations on the quantity to be harvested are then made each year. For each stock, ICES seeks to estimatethe spawning stock biomass (SSB), defined as the combined weight of male and female fish that have reachedsexual maturity. Two fundamentally different approaches are used to estimate stock abundance:

(a) Fishery dependent methods. These are based on analysis of landings by commercial fisheries. This has theadvantage that it uses the fishing fleet itself as the sampling tool and is therefore potentially most powerfuland efficient.

(b) Fishery independent methods. These are surveys done by fishery research vessels and the information isgenerally used to supplement the fishery dependent methods. Fishery research vessel techniques includesampling for eggs, larvae and juveniles as well as acoustic and trawl surveys of the adult stock.

Fishery Dependent Methods4.5 These are the most important methods of stock assessment. Two basic kinds of data are used:

(a) Record of landings. This is the total quantity of fish landed each year. It depends on accurate reporting from all the nations around theNorth Sea that are involved: Belgium, Denmark, England, France,Germany, Netherlands, Norway, Scotland and Sweden. The data arereported by national representatives to the appropriate ICES workinggroup. Within ICES, Scotland is treated separately from England(because of Scotland’s long history of data collection). The data aresubdivided into catches from different gears: bottom beam trawl,bottom otter trawl, seine net, gill net, long line, other gears. Netcatches are recorded for each mesh size in use. The ICES working groups also add estimates of unreportedlandings and discards to the official landings, but for most fleets, these estimates lack scientific rigour (see 4.8(a) below).

(b) Age, size and sex composition of the catch. Each month, fish are sampled from the official catch and recordsmade of length, weight and age. Age is obtained by counting growth rings on scales or on the otoliths (earstones) removed from fish heads. Additional samples are taken to determine the mean weight andproportion of sexually mature fish at different ages. The latter is based on examining the gonads inside thefish (most species show no external sign of sex or maturity). The catch is then divided into numbers atdifferent ages: age one, age two, etc. For cod, two-year-old fish are generally most numerous from landingsin Scottish waters, as this is the age when fish have grown to the minimum size for capture. There is usuallya progressive decrease in numbers with older ages, as fish either die naturally or are captured.

Age-Structured Stock Assessment Methods: Virtual Population Analysis (VPA)

4.6 The data are then used in statistical calculations called Age-Structured Stock Assessment Methods, to produce estimates of theSpawning Stock Biomass (SSB). The best known of these is VirtualPopulation Analysis (VPA), originally developed in the 1960s and is thecore method used by ICES today.

4.7 VPA uses the data on landings and their composition to arrive atan estimate of SSB. The first stage is to estimate the proportion of fish ineach year-class from last year that survive until this year (e.g. if there


Box 4.1. The dominant positionof Scotland in North Seademersal fisheries is exemplifiedby ICES landings statistics for2002. Scottish vessels’ share ofthe main species was: cod 35%,haddock 74%, Nephrops 62%and whiting 49%.

Box 4.2. Stock size can beestimated from total landings if theproportion of stock captured isknown. e.g. catch 10,000 tonnes, 50% ofstock, SSB = 20,000 tonnes. Thissimple concept underlies methodsused by ICES for stock assessment.

were 1000 two-year-olds last year and 200 three-year-olds this year, this indicates that 80% of fish died betweenthe ages of two and three). The estimates are summed across year-classes within each year, to give an estimate ofSSB by year.

4.8 It is important to understand the nature of additional inputs to the calculations and the effects they haveon the reliability of VPA. They include the following:

(a) Estimates of unreported landings and discards (see paras 4.5 (a) above and 4.21 below). These have to bebased on intuitive guesswork, and the greater the extent of illegal landings and discards, the lower thereliability of VPA. ‘High grading’, or targeting smaller fish for discards, will add further distortions.

(b) Values for fish mortality between age classes are divided into naturalmortality (M) and that due to fishing (F). Although M is initially aneducated guess, with each succeeding year it becomes less problematic(see 4.9 below). Box 3 illustrates how F relates to the annualpercentage of stock caught (this relationship is analogous to thedifference between daily compound interest and annual rate ofinterest in financial accounts).

(c) Tuning’ of the statistical processes in VPA is required to account forchanges in the catchability of fish with age and changes in fleetbehaviour. Effort data for the commercial fleet are necessary for this‘tuning’.

(d) Recruitment into the stock varies with each year and this variationneeds to be included. In practice, the extent of each annual variationbecomes reasonably clear only after a number of years.

4.9 The range and nature of the uncertainties surrounding these inputsmeans that the stock assessment produced by VPA can at times beparticularly inaccurate for the most recent year. However, the longer thetime-series over which back-calculations can be made, the more reliable itbecomes at showing historical trends in the stock sizes of each species offish. Changes over periods of five to ten years shown by VPA are therefore tobe trusted, even if the value of SSB for the most recent year is not. It isperhaps for this reason that VPA has remained the principal method used byICES for many years. The science of statistics and modelling has advancedconsiderably since VPA was originally developed, but there is little externalevidence that ICES has considered changing its methods in the light of these advances.

4.10 A particular problem with VPA, which creates difficulties for effective fisheries management, is that it failsto quantify adequately the levels of uncertainty in its estimates of stock sizes. This is exacerbated by the way inwhich levels of uncertainty seem in any case to be either misunderstood or ignored by those who make theultimate decisions in setting TACs.

4.11 Another disadvantage of VPA is that numerous parameter values must be specified to run it, and thefavoured values have often been selected subjectively, or on the basis of inadequate data. The implications for anyparticular stock assessment are poorly understood, so that VPA tends to be treated as a ‘black box’ when ICESstock assessments are carried out, and its failings are not fully recognised.

Alternatives to VPA

4.12 Cohort curves. We define cohort curves to be catch-curvesapplied to catch, Catch per Unit Effort (CPUE) or IBTS data by cohort.(Catch-curves applied to a single season’s catch data assume that thestock is in a steady state, and therefore perform poorly.) Cohortcurves exploit the fact that there tends to be a linear relationshipbetween the log of the catch weight and the age of the cohort. Figure 4.2 illustrates this for North Sea cod. The slope of the linesindicates the rate of depletion of each year-class, so allowing direct


Box 4.3.F – Fishing Mortality is theinstantaneous fraction of fishremoved from the stock eachyear. It is expressed in terms ofdecimal values such as 0.2, 0.5,1.0 & 1.2 and is calculated as:

N2003 = N2002 x e–F

where N is the number of fish in each year and e is theexponential constant.

F Annual percentageof stock caught

0.1 100.2 180.3 260.4 330.5 390.6 450.7 500.8 550.9 591.0 631.1 671.2 701.3 73

Box 4.4. Fisheries could be managedwithout estimating SSB or setting TACs.It is scientifically more logical to definedesirable levels of F (i.e. the fisheryshould remove no more that a certainfraction of the fish in the sea). TACs arenecessary only to share out the catchbetween nations and to provide quotasas a basis for sharing between boats.

estimation of total (fishing and natural) mortality, avoiding the ad hoc tuning of VPA. The major shortcoming ofcohort curves is that they do not provide absolute estimates of SSB. They cannot be used as the sole method iffisheries are managed by TACs, but they would be far more satisfactory for other methods of management, such asthose based on F (fishing mortality). (See Box 4.4).

4.13 State-space models. These model the populations of fish as two time series running in parallel. The firsttime series defines how ‘states’ or categories (e.g., sex, age or size classes) change from one year to the next inrespect of processes such as mortality (natural and fishing) and recruitment – and it can also take into accountenvironmental factors and other variables. The second time series uses data such as CPUEs and research surveyestimates of stock size, and relates them to the various ‘states’. The significant advantage of state-space models isthat they can be used to fit flexible models for fish population dynamics, while accounting for the major sourcesof uncertainty.

Figure 4.2: North Sea cod: cohort curves for selected year-classes of North Sea cod fitted as parallel regressionlines to (a) landings, 2 years and older; (b) total catch (i.e. landings + estimated discards), 1 year and older; (c) International Bottom Trawl Survey indices, 2 years and older.

(a) Cohort curves fitted to landings; 2+ years old

(b) Cohort curves fitted to total catch; 1+ years old

(a) Cohort curves fitted to IBTS indices; 2+ years old


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4.14 State-space methods are able to model the complexities of fish dynamics without requiring the ad hocadjustments of VPA. They can accommodate multi-species fisheries, where for example recruitment rates for onespecies may depend on abundances in given age classes for other species. Unlike VPA, they can be used forecosystem modelling, which will be necessary when the CFP adopts the ecosystem-based approach tomanagement, which it currently favours (see paras 5.3 and 7.73). A disadvantage is that, because they quantifyuncertainty more reliably, they tend to reveal just how little is known about ecosystem interactions.

4.15 Management by TACs and quotas has so far depended heavily on VPA. Yet management by TACs andquotas, especially when stocks are declining, stimulates the practices of discards and illegal landings which thensharply decreases the reliability of VPA. The annual work of stock assessment in support of TACs places heavyburdens on the limited number of fishery scientists available.

4.16 If an alternative method of management such as by effort control based on F (fishing mortality, see Box 4.3)was employed, the burden on fishery scientists would be reduced, and their efforts could be redeployed intoimportant areas of research such as that needed to develop ecosystem based approaches. The input data requiredto determine F would be far less exposed to the kinds of errors and uncertainties which afflict VPA.

Indices of Catch per Unit Effort (CPUE)

4.17 Whilst analysis in ICES assessment working groups is largely directed to VPA, information on changes inthe effort required to catch an amount of fish is useful if it is recorded by vessels. It is termed catch per unit effort(CPUE). Between 1889 and 1898, the catch of plaice per sailing smack out of Grimsby was shown to have declinedfrom 60 to 32 tonnes per annum49. Measure of effort was subsequently incorporated into early ICES work butappropriate measures of effort and accurate reporting by fishermen are problematic. To account for change intechnology, even in the 19th century a conversion factor of ‘one steam boat equals four smacks’ was required forthe plaice time series. CPUE methods are useful if time series data can be established and effects of improvementin technology can be eliminated.

4.18 A good current example of the use of CPUE is the management of the Nephrops fishery on the Fladenground in the North Sea. Scottish boats return data on landings and hours spent trawling. The landing per uniteffort (LPUE) has remained constant at 30-50 kg/hour trawling since the early 1980s, giving confidence that thestock is in a healthy state. It is not possible to apply a conventional VPA to Nephrops stocks since these animalscannot be aged. Management is therefore based on the LPUE and fishery-independent methods of stock sizeestimation.

4.19 Although not an EU requirement, ICES encourages fishing vessels to record effort in their log books. Greatcaution is necessary in applying CPUE methods where fishermen are capable of targeting their fishing activity andmembers of the target species tend to congregate together. Pelagic trawlers for mackerel, for example, only deploya trawl when a shoal of mackerel is visible on the sonar and the trawl is steered to enclose the shoal. CPUEexpressed in catch per hour of trawling would give no indication of the underlying abundance of fish; the trawlercatching the last shoal of fish in the sea would report a CPUE just as high as a trawler operating in conditions ofhigh fish abundance. This problem to a greater or lesser extent now applies to exploitation of all round-fishspecies; new technology has removed the direct link between effort and catches. Depending on methods used tomeasure effort, this will pose a fundamental problem in proposed methods of fishery management throughregulation of effort.

4.20 The behaviour of the fish can also contribute to failure of CPUE. Mobile species may have preferred areas. If these are known to the fishery, CPUE may be maintained by concentrating effort in these preferred areas, eventhough abundance in less favoured areas may be in decline. Once few fish are left in the less favoured areas, a sudden collapse in CPUE may occur with little warning, as the remaining aggregations are fished out. This occurred during the collapse of cod on the Grand Banks.

Unrecorded Catch

4.21 All of the fishery dependent methods are compromised by illegal landings and by unrecorded discards (seepara. 2.15). FRS has monitored discards for many years by placing observers onboard fishing vessels. In fact, thispolicy allows estimation of retained catch as well as of discards, and by noting discrepancies between total


estimated retained catch and total recorded landings, and with the co-operation of the industry, it is possible toestimate the scale of illegal landings. However, there can be no guarantee that the level of illegal landings onobserved trips is representative of that on all trips. Because the scale of illegal landings and of discards variesthrough time, depending on changes in economics, policy and enforcement, it is essential to estimate thesecomponents of the catch, if stock assessment is to be reliable.

4.22 A common observer scheme is required across all North Sea fleets. To date, only Scotland has devotedsufficient resources to discard sampling but it does not follow that only Scotland has a discard problem. However,the Scottish sampling strategy is not very well designed and should not be adopted as the standard. In a givenyear, each fishing trip is allocated to one of well over 100 categories (called strata) corresponding to differentareas, quarters and gear types. The number of trips per stratum is very variable, but resources allow not more thanone trip to be surveyed per stratum, so that the sampling rate is very variable. A revision of this scheme couldyield improved precision on estimates of discards at no additional cost.

Data from fishermen

4.23 In addition to landings data collected by statutory authorities, the association of National FisheriesOrganisations (Europêche) has, under the auspices of the North Sea Commission Fisheries Partnership, organisedsurveys amongst fishermen of their perceptions of changes in stock abundance. Reporting in the North sea is forten areas and records are collected to show whether abundance is: much less, less, same, more or much more thanthe previous year. Reports on sizes (categories of: mostly small, all sizes, mostly large) and discard trends (less,same, more) are also collected. These data are now included in the ICES Advisory Committee on FisheriesManagement (ACFM) reports on each stock. Both haddock and cod abundances are reported to have increased inthe North Sea between 2002 and 2003, which could be consistent with the VPA.

4.24 Summary:• International collation of fishery landings statistics provides the basis for estimation of sizes of different fish

stocks and hence total allowable catches.

• Scotland accounts for a large proportion of North Sea fish landings.

• Misreporting, illegal landings and unrecorded discards jeopardise the accuracy of stock size estimates andcalculation of TACs.

• Simple means of logging catches accurately and reliably need to be developed.

• The method used for calculating stock size (VPA) is prone to error which cannot be readily quantified.

Recommendation:• ICES should consider new statistical approaches as alternatives to VPA for management of the fisheries,

particularly methods in which uncertainty (and hence business risk) can be quantified.

Fishery Independent Methods4.25 Whilst fishery dependent methods provide the core methods for stock assessment for most stocks,independent methods are used to check trends in recruitment, abundance and distribution of fish stocks.

International Bottom Trawl Survey (IBTS)

4.26 This is the primary means by which a regular check is kept on demersal fish abundance in the North Sea(see Appendices 4 to 8).

4.27 The IBTS is a joint survey undertaken by eight nations around the North Sea working in concert with astandardised technique: Denmark, England, France, Germany, Netherlands, Norway, Scotland and Sweden. Overan agreed ICES grid covering the whole North Sea, a trawl sample is taken from the centre of each rectangle. Since1991 work has standardised on the use of a GOV (Grande Ouverture Verticale) trawl design by IFREMER, theFrench marine research institute. This is an otter trawl, which replaces a previous Scottish design, the Grantontrawl. The GOV trawl is designed to catch species that tend to escape by swimming above the head rope of thetrawl. The net is rigged in a standard way, is towed at a standard speed, and in recent years the shape of the nethas been controlled by telemetry from the net. The cod end has a 30mm mesh lining to retain young fish. Thestandard tow has a duration of 30 minutes.


4.28 Bottom trawl surveys have a long history and considerable care has been exerted in keeping datacomparable. Whenever a new research ship is commissioned or a new net adopted, calibration trials are carriedout. The IBTS aims to survey the North Sea twice per year, but in recent years surveys have been done in each ofthe four quarters of the year.

4.29 The catch is divided into species, ages, sizes and maturities. Important points to note regarding the IBTS are:

• In contrast to the VPA, the results of the IBTS are very easy to understand. The results are presented in terms ofnumbers of fish caught per hour and raw data are published on the web sites of the major fishery institutes50.

• The results do not represent an absolute measure of fish numbers per unit area of the sea floor. The way thatfish are caught in otter trawls is complex, involving herding of fish in front of the net, with importantdifferences in behaviour and stamina between species and different sizes of fish. Thus if the catch of twospecies, e.g. haddock and cod, is the same, it does not mean that their population size is the same. Research onfish behaviours involving video monitoring of fish reactions in and near the net may in future allow absoluteabundance of demersal stock to be assessed using IBTS data.

• The IBTS provides information on spatial distribution of fish and relative abundance over time.

4.30 Common criticisms of the IBTS from the fishing industry are that:

• The GOV trawl is inefficient and would not be used by commercial fishermen. The aim of the GOV trawl isconsistency and its adoption for survey work was governed by aiming for low selectivity across species and sizesof fish, whereas a commercial fisherman would be aiming to select certain species. The GOV trawl also catchesundersized fish in an effort to assess the size of the age one class. Whilst industry strives for improvements inefficiency each year, the survey aims for no change unless absolutely necessary.

• The research vessels do not deploy the net where the fish are concentrated. The survey tows are not targeted atshoals of fish. They simply tow at the same set of locations every time. This can seem perverse to commercialfishermen, particularly if the research vessel tows where the commercial fleet has just removed fish. However,by sampling a large number of locations spread throughout the management area, trends in fish stockabundance are tracked more reliably than would be possible if areas of high abundance were preferentiallytargeted.

• The net is not fished in an optimal way (e.g. not towed for long enough or fast enough). The aim is simplyconsistency; the same speeds and tow times have been used for decades. The inquiry received some anecdotalevidence that the GOV net was not always fished correctly by all vessels participating in the survey.

• Why can commercial boats not do the survey? This may be possible, but current research vessels are built to bevery quiet so as to not disturb fish. Candidate commercial boats would have to be calibrated (at some expense)against the research vessels and would have to use the GOV trawl strictly in accordance with instructions (e.g. the tow must not be targeted at marks on the sonar).

4.31 The IBTS results provide the most direct evidence for changes in abundance and distribution of fish.Caution is required since these data cannot be currently be transformed into biomass estimates. However, the datacollected are used to inform the VPA. In order to generate time series of trends in spawning stock biomass, asoftware package known as SURBA is used. It models fishing mortality F, allowing for differences by age and byyear. The parameters of this model are estimated using the IBTS data on relative abundance by age and year. Dataon mean weight at age and on the proportion of sexually mature fish by age are then used to provide estimates ofrelative SSB. The IBTS provides data on eight species: herring since 1965; haddock and whiting since 1967; codsince 1971; Norway pout since 1972; and saithe, sprat and mackerel since 1974. For herring only, day-time haulsare used because it is then that these fish are near the bottom and susceptible to capture by the GOV trawl.

4.32 Although the North Sea IBTS is entirely based on the GOV trawl, there are differences between nations inhow the trawl is operated. Trawl speed (4 knots) is also faster than optimal (probably between 2 and 3 knots), the‘semi-random’ design is arguably not optimal, and hard ground is under-sampled.

Surveys of Fish Larvae

4.33 The larvae of many fish float in the water column feeding on plankton, and have only limited capability forescaping capture by nets. As part of the IBTS, in the first quarter of each year, additional tows are done using a small-mesh ring net deployed at night time to catch herring and sprat larvae; so called 0-ringers, fish that arenot yet one year old. The net is towed obliquely downwards and upwards to sample the complete water column.


It is assumed that at night, the net catch is 100% efficient, and density of larvae per m2 of the sea surface iscalculated from the distance towed, the area of net opening, and the depth. This can be summed to give anestimate of the total number of larvae in the North Sea. This gives a very good index of potential recruitment,independent of the VPA.

Egg Survey Method

4.34 Some fish species, including mackerel and cod, produce eggs that are neutrally buoyant and float freely inthe surface layers of the ocean. The eggs are transparent and are about 1mm in diameter. They can be sampledusing fine mesh nets that filter the eggs and other planktonic particles out of the water. For quantitative sampling,a conical net is used, often enclosed in a torpedo-like device that is towed behind the ship. The volume of waterfiltered is measured using a flow meter and hence the number of eggs can be calculated per cubic metre of seawater. As for the larval surveys, the results can be expressed in numbers of eggs per unit area of the sea and henceto calculate the total egg output by an entire fish stock. Such an approach is used for estimation of SSB ofmackerel, sardines and anchovies. If estimates of fecundity (number of eggs per female) and sex ratio (proportionof fish that are female) are available from a fish survey, then the estimated egg production divided by the productof estimated fecundity and sex ratio gives the estimated size of the spawning stock. Sorting the net catches andcounting has to be done by specially trained staff using microscopes.

4.35 The egg survey method is expensive in terms of ship time required. In the case of the western mackerelstock, it is only applied once every three years. For mackerel, this provides important opportunities for checkingthe VPA. Cod eggs are generally too low in abundance for the method to be usefully applied on a routine basis inthe North Sea.

Acoustic Surveys

4.36 Using echosounders and running a survey vessel along predetermined sampling tracks, it is possible withmodern computer techniques to count the total amount of echo returns from fish beneath the ship. This can betransformed into charts indicating numbers or biomass of fish in the survey area. The method works particularlywell for some pelagic species such as herring and anchovies, and progress is being made in applying the methodto mackerel. Since cod live near the sea floor, there is considerable difficulty in quantifying the echo returns fromthese fish, and it is not yet possible to distinguish cod from other species. Thus this method is not currentlyconsidered practical for cod.

Video Surveys

4.37 This method is applied to surveys of Nephrops abundance in Scottish waters. A video camera is towed overthe sea floor and the number of Nephrops burrows per m2 is estimated along sample transects. The total abundance in terms of number of individual Nephrops on the Fladen ground in the North Sea has been estimated each year since 1992 (apart from 1996) using this method. The technique is only applicable to relativelyimmobile species.

4.38 Summary:• The International Bottom Trawl Survey and associated plankton sampling provide valuable data on the state

of North Sea fish stocks that are independent of reporting of commercial landings. Scotland plays a major rolein this activity.

• Survey techniques provide valuable information on recruitment that cannot be obtained from commercialvessels.

Recommendations:

• FRS should begin to develop methods for the use of commercial vessels to aid fishery surveys and alsohow accurate recording of commercial catches can best be achieved.

• ICES should convene a forum, to review IBTS design, fishing gear and methodology. Industry adviceshould be sought, especially with respect to gear improvement, trawl operation and how best to samplehard ground. Greater standardisation across nations should be pursued. Assuming new procedures areadopted, calibration should be addressed.


Setting of Total Allowable Catches4.39 During the 1940s and 1950s fisheries science developed the concept of “Maximum Sustainable Yield” (MSY)based on the theory that a moderate level of fishing on a stock removes older fish, thus stimulating recruitment,growth and hence production. It was shown that there is an optimum level of fishing effort that results in themaximum yield from the stock and that yield is sustained by new growth in the stock. Indeed, Article 61 of theUnited Nations Convention on the Law of the Sea states that coastal states must pursue conservation andmanagement measures designed to maintain or restore populations of harvested species to levels which canproduce the MSY. It was on this basis that coastal states were granted the rights to define TACs which initiallywould have been directed to achieving MSY.

4.40 Knowing the spawning stock biomass, it is possible to estimate a TAC that will in theory result in eitherincrease, decrease or maintenance of the stock size. World-wide it has proved impossible to manage fisheries togain the MSY. Generally fishing effort has been too high, reducing SSB and resulting in lower yields. Also, sincethere is considerable uncertainty as to where the MSY level is for a stock, scientists were unable to give clearadvice. As SSBs have declined, sudden collapses have occurred, notably North Sea herring in the 1970s, and GrandBanks cod around 1990. This has resulted in a precautionary approach which was adopted by ICES formanagement of fisheries in European waters. This is expressed in setting thresholds for each stock:–

4.41 A Limiting value (lim) is defined, below which the stock is considered to be in imminent danger ofcollapse. This can be expressed as the limiting biomass Blim below which the stock must not fall, or the fishingmortality Flim above which the stock cannot survive. For several stocks Blim is the lowest historical SSB from whichthe stock has successfully recovered, or there may be a more formal scientific analysis.

4.42 A Precautionary limit (pa) is the value to aim for that will ensure 95% probability of avoiding the (lim)value. Thus Bpa is the “safe” minimum value for SSB and Fpa is the “safe” target value for fishing mortality. ThusTACs should be set to ensure that the SSB and F are on the right side of the precautionary limit and if for somereason the limiting value is reached then the stock is in imminent danger of extinction.

4.43 For most major fish stocks the EU51 sets Analytical TACs which are based on advice from ICES where areasonably reliable VPA has been carried out, and it is possible analytically to calculate forward from the knownstate of the stock, what the outcome of different proposed TACs is likely to be. Analytical TACs can be set with aview to adjusting F and SSB in relation to the precautionary principle.

4.44 In the case of a stock in which data are inadequate or it is impossible to run a VPA, often a PrecautionaryTAC is set. Either this can be based on advice from ICES, or the Scientific, Technical and Economic Committee onFisheries (STECF), will recommend such a TAC. Such precautionary TACs may be based on catch per unit effortinformation or on simple records of landings on which an increase or decrease may be proposed, based onopinions of those concerned regarding the state of the stock and management objectives. For example, a decreasein average size of landed fish may indicate depletion of the stock.

Review of ICES Scientific Advice on the Major Fish Stocks4.45 The most important demersal fish stocks (see Appendix 4) for Scottish vessels are haddock, cod, whiting,monkfish and Nephrops. The status of each of these is considered in this section, together with information onherring and mackerel, the major pelagic species. It should be noted that amongst the demersal species, cod hasthe most comprehensive data set and best implementation of the VPA. For all the other species, uncertainty ismuch greater.

Demersal StocksNorth Sea Cod Area IV

4.46 Although not the most important fish species by tonnage or value to the Scottish fleet, cod is considered inmost detail since it is the source of the current crisis in fishery management. The ICES scientific advice for cod isbased on estimates from VPA and the IBTS.


4.47 From 1965 to 1985, the average landings of cod recorded by ICES ACFM for all North Sea fleets were justover 250,000 tonnes per annum (Figure 4.3). Following that time, there was a decline to a low of 102,000 tonnesin 1991, and then a sharp decline from 1998 to the lowest recorded catch in 2001 of less than 50,000 tonnes. Therecorded catch for 2002 showed a modest increase to 54,400 tonnes. These data do not include all illegal landings.

Figure 4.3: North Sea Cod, Area IV, ACFM Estimated Landings.

Figure 4.4: North Sea Cod, Area IV, Spawning Stock Biomass, Solid blue line- Blim, Dashed blue line – Bpa. ICES ACFM 2003 VPA.*

4.48 The average spawning stock biomass in the North Sea from 1965 to 1985 was 193,000 tonnes. This declinedto an estimated low of 33,300 tonnes in 2001* (Figure 4.4). There is an estimated increase to 53,000 tonnes in2003, possibly associated with stock recovery measures, but estimates for the last two years are believed to bebiased upwards, caused by unquantified black landings.

4.49 The 1960s to the 1980s were characterised by a steady increase in fishing mortality F (ages 2-6) from 0.45 in1963 to 1.07 in 1983 (Figure 4.5). Since that time, F remained high until the recent fall in 2001 and 2002associated with cod recovery management measures. The data for the last two years however are considereduncertain.

4.50 The average recruitment of one-year-old fish into the North Sea during 1965 to 1985 was 483 million perannum (Figure 4.6). Since 1990, this has fallen to an average of less than 200 million, with a good 1996 year-class,yielding an estimated 408 million one-year-olds in 1997, followed by the worst year-class on record of 59 millionone-year-olds in 1998. Since that time, there has been very low recruitment.

*All outputs from VPA are subject to errors which are particularly high in the terminal (most recent) years. When F is high,errors also tend to be high. +/– 50% in the terminal year is the approximate accuracy.


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Figure 4.6, North Sea Cod Area IV, Recruitment. ICES ACFM 2003 VPA*.

4.51 Since the 1980s, there has been a loss of fish aged three and over from the North Sea, so that landings arenow dominated by two-year-old fish.

Figure 4.7: SURBA output for the Scottish Ground Fish Survey, relative SSB of North Sea Cod.


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4.52 Figure 4.7 shows the relative spawning stock biomass in the North Sea, based on the Scottish ground fishsurvey undertaken by FRS Aberdeen. This mirrors closely the decline shown in the VPA.

Spatial Considerations4.53 A weakness of the ICES North Sea cod management model is the assumption of complete mixing and unityof the entire cod stock within Area IV. It is known that there are separate spawning areas and the cod can almostcertainly be divided into southern, central and northern components. There may be further localised spawningunits (e.g. off Shetland) that may merit localised management. It is a matter of concern that a Southern Bight sub-stock, which was previously abundant off the coast of Netherlands and Germany, has all but disappeared. Thisdoes not preclude the possibility of recolonisation, but there is a concern that a unique genetic component of theNorth Sea cod resource has already been lost. It is encouraging that there are at least some residual spawning areasin the northern area off Scotland.

4.54 Information on spawning areas is poor, but management as part of a recovery programme should seek toprotect known spawning areas. Studies on genetics and cod migration are necessary; unfortunately, stocks over alarge area of the North Sea are so low as to preclude meaningful studies.

History and Causes of Decline in the Cod Stock4.55 Taking into account the consistency between the VPA, IBTS and other indices of stock abundance, there isno doubt that there has been a decline in cod stocks in the North Sea since 1981. During this time, the fishingmortality F has been consistently high with an average value of 0.95 until 2000. In a stock with a natural life spanpotential of 10 years, this rate of removal means that, of fish that survive to two years old, only one in 20 survivea further three years to five years old, even if there is no natural mortality.

4.56 Despite uncertainties in the data and the calculations, the level of F has been so high as to beunsustainable; fishing mortality has been the major factor in the decline in spawning stock biomass. This isfurther emphasised by calculations indicating that if F had been sustained at 1960s levels (ca. F=0.5), currentlandings would be in excess of 200,000 tonnes per annum52. The loss to the Scottish economy of allowing F to beso high over a period of 20 years, resulting in landings as low as 50,000 tonnes, has been enormous. SinceScotland takes 35% of North Sea cod the current loss is approximately 50,000t – 60,000t of landings, worthroughly £80-100 million each year.

4.57 Tolerance of high values of F seems to have been endemic in management of cod in the North Sea (Table 4.1). In 1988, ICES recommended that F should be reduced to 0.68 (70% of F in 1986), followed by 0.7 in1996, 0.6 in 1999 and 0.55 in 2000. From 2001, recommendations have been lowest possible catch, progressing toclosure and zero catches for 2003 and 2004.

4.58 It is clear that from 1988 onwards, scientists within the ICES working groups and ACFM wanted lowerfishing mortality rates in order to restore the cod stock to its lowest desirable level of 150,000t SSB. The fisheryhowever was managed in terms of TACs, and there seem to have been persistent problems in translating a needfor a lower F into a TAC that would achieve the desired result. This can be seen in Table 4.1.

4.59 For example, in 1990 the target F was set as 0.8. The predicted catch corresponding to advice was given as113,000t. ACFM estimated the true landings to be 105,000t. The agreed TAC was 105,000t and the officiallandings were 99,000t. This is partly accounted for by unreported catch (e.g. discards), not accounted for byACFM, and also by overestimates of the SSB by the VPA. The management appeared to comply with advice but the outcome was F=0.912. During 1991 to 1995, ACFM did not give advised TACs and F remained highthroughout these years.

4.60 In 1997 scientists published a warning that North Sea cod stocks were near to collapse53, stating “There isnow an urgent need to ensure that the exploitation rate is reduced either through the use of effective catchcontrols or by a direct reduction in fishing activity”. The 1996 year-class had by 1997 produced the largestrecruitment of North Sea cod for ten years; indeed, in the first quarter IBTS, the estimated number of one-year-oldcod in the North Sea was the highest since 1971. This provided a remarkable opportunity to save the stock andICES ACFM stated “Explicit measures to prevent targeting or wastage of this year-class should be implemented”.However in that year, ICES ACFM recommended a TAC of 135,000t. Taking into account concern about stocks,the TAC was set at 115,000t and the resultant F was 0.848. In 1998, on the basis of the VPA (which was influencedby the abundant 1996 year-class), ICES ACFM recommended an increase in TAC to 153,000t. Thus despite clear


warnings in the previous year and a target F of 0.6, 140,000t was adopted by management and the highest F for15 years ensued, resulting in the most rapid removal of any year-class in the available records for this stock, andthe SSB has since continued to decline.

Table 4.1: North Sea Cod (Area IV) Comparison of ACFM Advice and Outcomes. (Units of landings are thousandsof tonnes).

Advised Catch to Agreed Official ACFM Actual*Year F Achieve F TAC Landings Landings (+) F

1988 0.68 148 160 142 157 0.9891989 Halt SSB decline 124 124 110 116 1.0101990 0.8 113 105 99 105 0.9121991 70% 89 effort – 100 87 89 0.8741992 70% 89 effort – 100 98 97 0.8661993 70% 89 effort – 101 94 105 0.9211994 Reduce effort – 102 87 95 0.8771995 Reduce effort – 120 112 120 0.8751996 0.7 141 130 104 107 0.7971997 0.65 135 115 100 102 0.8481998 <F(96) 153 140 114 122 1.0611999 0.65 125 132 80 78 1.0372000 <0.55 <79 81 62 59 1.2102001 Lowest possible 0 48.6 42.3 41 0.747#2002 Lowest possible 0 49.3 44.2 43.9 0.612#2003 Closure 0 27.32004 Zero catch 0

*F = Mean F Ages 2-6 Areas IV, VIId and IIIa, # = considered uncertain +ACFM landings are those agreed by ACFM and used in calculations. These are usually higher than the officiallandings since an attempt is made to adjust for unreported landings. ACFM landings however may be lower than theofficial figure if provisional data are used which are subsequently revised in official statistics, or ACFM reallocatesmisreported landings from one area to another, or reallocates miscoded landings.

4.61 It is now acknowledged that the recommended TAC of 153,000t was based on a bias in the scientificmethods. During the late 1990s, it seems that the VPA persistently overestimated SSB and underestimated fishingmortality in the terminal year of the assessment. This bias in VPA is known as retrospective patterning. Precisionof the VPA stock assessment in the terminal year is low (perhaps only to within +/–50%), but a persistent biastowards overestimation of SSB is of particular concern.

4.62 In general, the TACs have been set lower than the predicted catch corresponding to advice. Officiallandings have been within the agreed TACs. Unofficial landings and discards may partly explain higher thanexpected F values, but there seems to have been a major failure of the ACFM to give correct scientific advice.

4.63 There is a fundamental problem in trying to regulate F through TACs. If there is an error in estimation ofSSB (e.g. +/– 50%) and a similar error in estimation of catch, then F could vary considerably from the desiredvalue. Management of the fishery through TACs is then doomed to failure; indeed, it appears to have consistentlyfailed over two decades.

Recruitment4.64 There is concern that since 1990 recruitment has been low. There is no doubt that there have beenenvironmental changes in the North Sea that may have contributed to this low recruitment. However, removal ofalmost all the older fish from the stock is likely to be a major contributory factor54. There is new evidence showingthat small young female fish:

(a) produce fewer eggs;

(b) produce eggs that are smaller and have lower chance of survival;

(c) are inexperienced in spawning and are less effective in mating and producing healthy eggs; and

(d) produce fewer batches of eggs over a shorter period of the spawning season, so that they are less likely tohit optimum conditions for survival of the eggs and larvae.


4.65 It has not been widely appreciated until recently that a SSB comprising mostly young fish is much lesscapable of generating new recruitment. To ensure survival of fish to age 5+ when they can more effectivelycontribute to spawning requires much lower levels of fishing mortality. To give two-year-old fish a 20% chance tosurvive to five years, and assuming natural mortality of M=0.15, requires a fishing mortality of just under F=0.4.The percentage of mature fish that are of age five or more would then be nearly 20%.

4.66 The level of recruitment achieved by the cod stock in the North Sea during the 1970s was very high andcorresponds to a possible “gadoid outburst” in the North Sea when conditions were particularly favourable55. Therate of recruitment during 1990-97 however was comparable to the long-term average for the 20th century (it hasbeen lower since 1998, see Figure 4.6) and conditions in the North Sea do not preclude a sustainable cod fishery.Physical conditions are well within tolerance limits for the species and cod in the North Sea grow relatively fastcompared with other stocks such as those in the Barents Sea.

4.67 Fishery management theory has depended on deriving a predictive relationship between the SSB andsubsequent recruitment, enabling calculation of maximum sustainable yield (MSY) and other criteria forestablishing yield targets. The major problem with this method is that the relationship can be determined onlyafter the stock has been fished for many years and a wide range of SSB values have been observed.

4.68 In recent years there has been a loss of confidence in the application of this principle. Given environmentalchange and change in stock composition, some believe that North Sea stocks may have ‘flipped’ to an alternativestable state, characterised by much lower recruitment than previously predicted.

4.69 Low recruitment, whilst providing at least a partial explanation for decline in stocks, does not absolvemanagement of responsibility for the fishery. The correct response to a lower rate of recruitment is decrease in F soas to achieve a higher yield from each recruit. The aim should be to achieve comparable landings by weight byharvesting larger but fewer fish.

Precautionary Limit4.70 In 1999 the precautionary biomass (Bpa) for North Sea cod is set at 150,000 tonnes and limiting biomass(Blim) at 70,000 tonnes. 70,000 tonnes was close to the lowest observed SSB in 1992, from which the stock hadrecovered, and it was considered that the SSB should never be allowed to drop so low again. For goodmanagement, the aim is to keep SSB above 150,000 tonnes. Then, even with a period of poor recruitment, the SSBis unlikely to fall below 70,000 tonnes.

4.71 The precautionary fishing mortality (Fpa) is set at 0.65 with the limiting value (Flim) at 0.86. If F is greaterthan 0.86, the number of fish removed is so great that there is direct impairment of recruitment. Fpa is calculatedso that if management aims at 0.65, there is a 95% chance that the actual mortality will be less than Flim.

West Coast Cod (Sub Areas VIa and VIIa)

4.72 The West of Scotland cod stock (Division VIa) with a Bpa of 22,000t is only 16% of the size of the North Seastock. Annual landings since 1990 have averaged over 13,000t; F has been very high, averaging over 1.0, resultingin a decline in estimated SSB to only 2,600t out of which official landings in 2002 were over 10,000t! This isclearly an unsustainable situation. This stock is relatively in a worse state than the North Sea stock.

4.73 The Irish Sea cod (Division VIIa) is a small stock with a Bpa of 10,000t and average landings since 1990 of4,500t. Average F however has been over 1.3 and the SSB is below Blim. There are some signs of a recovery.

Future Prospects for Cod

4.74 The current estimated SSB of North Sea cod is 54,000t. There is a high degree of uncertainty in thisestimate. It is very likely that the stock is below Blim (70,000t) and hence liable to collapse. A number ofinternational bodies have expressed concern over other environmental and conservation issues, includingecosystem alterations associated with disappearance of an important species, such as cod, from European waters.Non-Governmental Organisations (NGOs) such as WWF and Greenpeace have also become involved in thedebate. With potential for species extinction, the Convention on International Trade in Endangered Species(CITES) has drawn attention to the plight of North Atlantic cod, triggering demand for conservation measuresoutwith the normal range of management measures. Publicity has created consumer resistance to purchase of fishfrom non-sustainable sources and some leading food retailers guarantee not to sell North Sea cod. Prices areadversely affected as long as North Sea fisheries are perceived to be in crisis. There are therefore special market andpolitical pressures to reverse the decline of North Sea cod.


The Cod Recovery Programme4.75 The European Commission56 has proposed a cod recovery programme with the aim of restoring the NorthSea cod57 to 150,000t in the time span of 5-10 years (see Chapter 7, Box 7.1) by increasing the SSB by 30% eachyear. Thus if all goes well, starting, at Blim = 70,000t, at 30% growth, theoretically SSB would reach 150,000t in lessthan 3 years, but there is an inevitable 2 year delay before fish hatched in the first year enter the fishery, so 5 yearsis a realistic minimum for such a recovery. SSB is unlikely to grow smoothly but would tend to increase stepwisewhenever a good year-class is produced. There is no means of predicting when good year-classes may occur. Thusthe target of 30% growth per annum can be only an average target over a number of years, and depending onwhen a good year-class materialises, the recovery period might be appreciably longer. The programme will becomplete when the SSB exceeds 150,000t for two consecutive years.

4.76 If the SSB is well below 70,000t, then more severe measures are proposed. The proposed regulation gives noindication of what those more severe measures might be. The recovery plan has not been adopted and cod stockscontinue to be managed by ad hoc modification of routine management procedures.

An Assessment of Recovery Strategies for Cod4.77 Recovery strategies can be considered at several levels of severity of limits on catches: (a) zero catch of cod;(b) zero directed fishery for cod; and (c) restricted cod TAC:

(a) Zero catch of cod. In October 2003, ICES58 recommended “zero catch until the estimate of SSB is above Blim orother strong evidence of rebuilding is observed”. This advice was rejected by the European Commission FisheriesCouncil59 although it would have produced the most rapid recovery to Blim. Strict application of thisstrategy would entail closure of all demersal fisheries in the North Sea for a minimum of 12 months. Thisstrategy has the advantage of simplicity in enforcement since all boats should be tied up. There is adisadvantage that no fishery data would be available so a small-scale sentinel fishery might be organisedwith 100% observer coverage in order to check status of stocks. Other species, e.g. plaice and whiting whichare also below safe biological limits, would benefit from a moratorium on fishing. But there is concernregarding indications that the 2002 cod year-class is one of the lowest on record, providing a poor basis forquick recovery. This measure however would be very damaging to the fishing industry and is not deemedacceptable.

(b) Zero directed fishery for cod. Nephrops stocks in the North Sea are in a healthy state and form the basis fora profitable fishery. Continuation of this fishery could be allowed in designated areas and by-catch of codminimised through encouragement of selective fishing gears. Haddock fishing also can be allowed in theNorth Sea so long as properly selective gear are used. We understand that FRS have been able to design suchgear but fishermen require an incentive if they are to make proper use of it. By combining a policy of closedareas related to cod distribution with limits on effort, reasonable Nephrops and haddock fisheries should bepossible with modest cod by-catch.

(c) Restricted cod TAC. In the absence of a formal cod recovery programme, this is the strategy that wasadopted by the Council of Ministers with a TAC of 27,300t for 2004. It is contrary to ICES advice, whichwas based on calculations indicating that no recovery can take place in the presence of any fishing for cod.However ICES had indicated elsewhere that a TAC of 12,700t would be expected to return the stock to a Blim

within one year60. This may be an optimistic view, but the lowering of the TAC to less than 50,000t in 2001and 2002 appears to have decreased F and there are some signs that the decrease in SSB may have reversed.The VPA output is very uncertain and these values may be misleading. A TAC of 27,300t may be lowenough to allow stock recovery to 70,000t, possibly over two years instead of one, so long as this issupported by the industry and not distorted by illegal landings. This would, however, depend on sufficientcod recruitment. Status quo TAC until the ACFM output is available in October 2004 is a reasonable strategy;if there is no sign of recovery then more stringent measures may then be considered. Area restrictions andlimitation of effort will help avoid discards and overshooting of quotas with the associated tendency forillegal landings. Since Scottish boats land by far the largest directed haddock catches, measures to avoid codby-catch are being largely directed against the Scottish fleet. This is creating resentment within the Scottish fleet.

4.78 The restricted quota strategy may result in an SSB in excess of 70,000t by 2005 or 2006. The question thenarises as to what strategy to adopt to rebuild the stock to Bpa: 150,000t. A major criticism of the EC recovery planis that it depends on the ability of scientists to provide good estimates of SSB and predictions in order to adjustthe TAC each year. The track record of ICES ACFM has been poor in this respect and at low SSB values withtruncated age distributions in the stock, errors are likely to be high. A review of successes and failures of fishery

57Also, cod in the Kattegat, West of Scotland and Irish Sea.


recovery plans around the world61 indicates that such adjustments of TACs are not successful and a simple fixedlow precautionary quota is recommended. A fixed quota of 27,300t or similar precautionary amount until the SSBreaches 150,000t is likely to be an optimal strategy for North Sea cod. This should be supplemented by closedareas and restrictions on effort. Purely effort controlled management, whilst arguably an optimal way ofmanaging the fishery in the future, is not appropriate for a recovery period. Limitation of effort creates incentivesto target fishing at the most valuable species, which in the case of the North Sea is cod.

4.79 It is important to note that, even if successful, a recovery plan cannot be expected to provide fullemployment for existing fishing capacity in the Scottish fleet. When Canadian fisheries were reopened followingmoratoria, stock gains were rapidly dissipated62 owing to failure to remove fishing capacity from the fleet. Fullrecovery of the stock with all fish age classes adequately represented will take a decade, by which timetechnological advance will require further fleet reductions and modernisation.

4.80 North Sea cod are managed under a 1999 agreement between Norway and the EU that TACs should be setconsistent with F=0.65. For recovery to occur F must be lower than this very high reference value, compared withother stocks of cod where values of 0.2 to 0.3 are typical63. The high F value for North Sea cod might be defendedon the grounds that this stock lives at higher temperatures than other North Atlantic cod stocks; but herring andmackerel with similar life spans in the fishery are currently managed very successfully with F values less than 0.3.The basis for the target F value for cod in the North Sea, west of Scotland and Irish Sea needs to be urgentlyreviewed.

4.81 Recovery of the North Sea cod stocks to a landings potential of 100,000t per annum after 10 years isprobable under this restricted quota strategy. 200,000t is possible, 300,000t unlikely.

4.82 Summary:

• There is no doubt that cod stocks have declined to historically low values. They are currently below safebiological limits.

• Mismanagement of the North Sea cod fishery has resulted in a loss of 50,000t – 60,000t of landings to theScottish fleet worth £80-100 million each year.

• High fishing mortality with F values close to 1.0, indicating removal of over 60% of the stock each year, hasbeen the main cause of the decline.

• Adverse environmental conditions for recruitment of cod in the North Sea since 1990 contributed to thedecline but could have been countered by reduction in fishing mortality.

• High fishing mortality has resulted in a stock comprised of mainly small young fish that cannot generate therecruitment that older experienced fish are capable of. This is impeding stock recovery.

• Calls by scientists for reduction in fishing mortality since 1990 have been rendered ineffective by methods thatover-estimated stock abundance and set TACs that were too high. This resulted in increase in fishing mortality.

• Unquantified discards, illegal landings and misreporting of catches have increased uncertainty in fish stockassessment.

• Following the abundant 1996 year-class in the North Sea, scientists recommended increases in TACs. Had theyrecommended lower values, the current crisis in North Sea cod could have been averted. In retrospect, thiswould appear to be a major misjudgement in management.

• The EU cod recovery programme is flawed since it gives no indication of how to achieve recovery of the stock toBlim (70,000t) and the subsequent rebuilding to 150,000t depends on setting annual TACs which have provedinaccurate in the recent past and contributed to decline of the stock.

• A cod recovery programme is necessary for the future of the fishing industry and for ecological andenvironmental considerations. It is a matter for concern that no longer term cod recovery programme has been agreed.

• A zero catch of cod is impractical to implement in a multi-species fishery.

• The low TAC of 27,300t proposed for North Sea cod in 2004 may be low enough to permit recovery if it issustained until the SSB exceeds 150,000t for two consecutive years.

• The theoretical minimum time for recovery of cod stocks is 5 years with 10 years for full recovery a more likely scenario.

• A well-managed cod stock in the North Sea could sustain landings of ca. 200,000t even with recentenvironmental changes.


Recommendations:

• The EU Commission should manage demersal stocks so that fishing mortality is much lower than over the past 15 years, aiming for a value of F<0.4 corresponding to removal of less than one third of the stockeach year.

• ICES recommendations should aim to promote and sustain recruitment so that there is a good spread ofage classes up to 5 years old and over in demersal stocks.

• The current TAC of 27,300t for cod in the North Sea should be used as the starting point for a recoveryprogramme and should be fixed until Bpa (the safe minimum spawning stock biomass) of 150,000t isattained.

• The by-catch of cod in other fisheries should be minimised by ensuring the use of species selective fishinggears; TACs should be supplemented by limits on effort and designation of closed areas.

• Demersal stocks should be managed as a mixed fishery with a single overall limit on effort and nodiscarding, coupled with measures such as selective gears, protected areas and real-time closures toprevent over-exploitation of individual species and of immature fish. After the cod recovery programme,TACs should be retained only to guide regulation of effort and to ensure relative stability.

North Sea Haddock

4.83 Haddock comprises over half of the Scottish landings from the North Sea by tonnage and by value and assuch is more important than cod to the Scottish fleet. The history of haddock since the 1960s is dominated by anextraordinary recruitment of almost 400 billion 0-group juveniles in 1967, which resulted in landings of almostone million tonnes in 1969 out of a SSB that peaked at 900,000 tonnes in 1970 (Figure 4.8); this is over threetimes the highest observed SSB for North Sea cod.

Figure 4.8: North Sea haddock. Area IV. Landings, SSB, Recruitment and Fishing Mortality. Solid blue lines = Blim

or Flim , dashed blue lines = Bpa or Flim. ICES ACFM 2003 VPA*.

4.84 At this time, F increased from 0.59 to 1.13 in the space of one year between 1968 and 1969, implying amassive increase in effort on this species. Fishing mortality remained high throughout 1970-2000, but hasdecreased in the last two years due to the combined effects of reduced effort under the cod recovery plan, and ofgood recruitment from the 1999 year-class.

4.85 Haddock is characterised by a much more volatile pattern of recruitment than for cod. Since the 1967cohort, there have been peaks of 0-group fish in 1971, 1974, 1979, 1984, 1994 and 1999. Spawning stock biomassis currently around 400,000t, well above the Bpa of 140,000t, but this is composed mostly of the 1999 year-class.Recruitment in 2001 and 2002 has been the lowest and second lowest since 1963. Unless another good


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recruitment is detected soon, the current apparently healthy condition of the stock could prove ephemeral.Haddock is characterised by greater swings in SSB than for cod. Fishing mortality on haddock has beenconsistently high over the last 20 years; the aim is to reduce it below 0.7 to avoid a collapse, and for optimalproduction we would argue for F<0.5. There are good prospects for growth in landings if more good year-classesappear and are well-managed.

4.86 The west coast haddock stock is one tenth of the size of the North Sea stock, with a current SSB of 46,000t, well above the Bpa of 30,000t. Current levels of TAC should be sustainable subject to decisions on cod management.

4.87 The Irish Sea haddock stock (VIIa) is even smaller, with estimated SSB of 2,729t; with total landings of lessthan 2,000t, it makes only a small contribution to Scottish landings.

4.88 Summary:

• Both west coast and North Sea haddock stocks are above the precautionary level and can sustain current levelsof exploitation, but there is concern that the most recent year-classes in the North Sea are amongst the weakest on record.

• Scotland accounts for the largest share of haddock landings from the North Sea.

Recommendations:

• Ministers should aim to restore haddock landings from the North Sea to the long-term average of250,000t given the importance of this stock to the Scottish demersal fisheries.

Whiting

4.89 There is great uncertainty regarding the status of whiting in the North Sea. The precautionary biomass Bpa

is set at 315,000t, compared with 150,000t for cod and 140,000t for haddock, so whiting is potentially the biggestsingle demersal fish resource in the North Sea. Currently, ICES makes no estimate of the SSB other than tocomment that it “reached a historic low in 1998”. There is disagreement between different methods of estimatingstock size. The 2002 total catch in Area IV was 40,000t, of which 16,000t was for human consumption, 7,000tindustrial by-catch, and 17,000t discards. Scotland takes over half of the human consumption landings.

4.90 Management is largely based on effort reductions necessary for the cod recovery plan. There is no explicitmanagement objective for whiting in the North Sea. Because they are thinner than haddock and cod, their meshselection characteristics are different, so management of the mixed fishery is difficult; use of the optimum meshsize to protect haddock would almost eliminate the whiting fishery.

4.91 Landings of West Coast whiting (Division VIa) have steadily declined from 17,000t in 1979 to 1,700t in2002, with an average F of 1.0. This stock has clearly been overfished and is below safe biological limits. There hasbeen a recent decrease in F and recovery measures may be taking effect.

4.92 Whiting in the Irish Sea (VIb) are in a very similar state, with landings declining from over 20,000t in 1981to 1,500t in 2002. This stock is also outside safe biological limits.

4.93 Summary:

• There is great uncertainty regarding the status of whiting in the North Sea although it is potentially the mostabundant whitefish species.

• West coast and North Sea stocks are presumed to be below safe biological limits.

Recommendations:

• FRS and ICES should urgently seek a valid method for assessing whiting in the North Sea and the EUCommission should initiate a whiting recovery programme.


Monkfish

4.94 Management of this species is problematic. These fish do not shoal and occur at low densities. They areoften caught in bottom trawl fisheries as by-catch. A directed fishery has developed mainly on immature fish. It isnot possible to estimate spawning stock biomass. The mature females occur offshore in waters over 200m deepand are probably rare. Each female produces a large buoyant gelatinous raft of eggs which drifts near the seasurface. Less than ten such rafts have been recorded in the last 100 years. The production of young is thereforeenigmatic and may depend on remarkably few large adult females which will be courted by smaller mature males.There is widespread mis-reporting of landings, and data for management is poor. Landings peaked at 35,000t in1997 and have since declined. The stock is presumed to be below safe biological limits as indicated by high Fvalues, but given the lack of data, estimation of F is likely to be unreliable. A TAC of 6,700t is proposed for 2004.Scotland takes 70% of the North Sea catch. Off the west of Scotland, France and Ireland take a large proportion,and Scotland takes 44%.

4.95 No major increase in landings is plausible over the coming decades, as the stocks have probably been fullyexploited. Since these fish do not shoal and are generally caught as part of a larger catch of other species, settingsingle-species TACs for monkfish is particularly inappropriate. If demersal fishing effort can be reduced, then TACscould be removed.

4.96 Summary:

• Monkfish depend on recruitment from unknown sources of spawning females presumed to be located in deep water.

• Landings peaked in 1997 and there is no logical reason to suppose that increased landings are possible from this species.

• Widely captured in small numbers as a valuable by-catch, management by TACs is problematic for this species.

Recommendations:

• Monkfish around Scotland should be managed through limitations on demersal sector effort rather thancatch quotas.

Nephrops

4.97 These prawns live in burrows in muddy-sandy areas of the sea floor. As a species, they are relatively staticand confined to areas of suitable ground. Functional units (FUs) (see Figure 4.9) are recognised and these canessentially be managed separately from one another. Each FU is generally fished by one nation and the Fladenground (FU7), which is the largest Nephrops fishery in the North Sea, is 95% Scottish.

4.98 For scientific assessment, there is a problem that prawns cannot be aged; there are no hard parts withannual growth rings. This means that cohort analysis or VPA cannot be applied in the conventional way, so thatanalysis is based on size frequency distribution. Assessment however is aided by TV camera surveys in whichburrows are counted on the sea floor. There are no strong trends in landings per unit effort, which for Scottishboats on the Fladen ground have been quite constant at about 40kg per hour trawling since the build up of thefishery in the 1980s.

4.99 In general, Nephrops stocks are healthy, and it seems that current production is sustainable. Landings are at,or close to, historical maxima, and major growth in this sector is unlikely. The decline of Nephrops stocks off WestGalicia and Portugal indicates that management should not be complacent and should guard against diversion offishing effort from the demersal whitefish sector to Nephrops.

4.100 On the west coast of Scotland, significant quantities are creel-caught, but most are caught in trawls, andmanagement as part of a mixed fishery is a major consideration. If gear could be improved so as to catch onlyNephrops, this would aid management considerably.


Figure 4.9: ICES Statistical Areas Around Scotland and the Nephrops grounds important to Scottish vessels, IV= North Sea, VIa = Scotland West Coast, VIIa = Irish Sea. Nephrops Grounds (diagonal shading), “FUs” FunctionalUnits: 6 – Farn Deep, 7 – Fladen, 8 – Firth of Forth, 9 – Moray Firth, 10 – Noup, 11 – North Minch, 12 – South Minch, 13 – Clyde.

4.101 Summary:

• Nephrops fisheries make a major contribution to Scottish landings.

• Stocks are in a healthy state and current levels of exploitation are sustainable.

• Innovative use of video surveys and CPUE data has provided a good basis for management.

Recommendations:

• The EU Commission and Scottish Ministers should ensure Nephrops fishermen adopt selective gears thatdo not capture whitefish. Management should be vigilant against diversion of effort from the whitefishsector into Nephrops.


Pelagic Fisheries4.102 The pelagic species, herring and mackerel, represent the largest fishery resources in Europe. Exploitation of both species expanded greatly in the 1960s and 1970s. North Sea mackerel landings reached a maximum of 1 million tonnes in 1967 and the stock collapsed by the late 1970s and has never recovered. Catches during thelast five years from this stock are estimated at 10,000 tonnes per annum. Large catches now are derived fromwestern mackerel that spawn to the west of Britain and Ireland. North Sea herring also suffered a collapse, andclosure was declared in 1976; the stock subsequently recovered from extremely low values. Against this history ofthe experience of the worst stock collapse in living memory, these pelagic fisheries are managed much morecautiously than the demersal fisheries.

North Sea Herring

4.103 During the 1960s, North Sea herring landings peaked at over one million tonnes, and then showed asteady decline until the fishery was closed in 1976 (Figure 4.10). Landings then reached a peak of almost 900,000tonnes by 1988, but this was not sustainable, and landings have now stabilised at around 350,000 tonnes.

4.104 Bpa is now set at 1.3 million tonnes (Figure 4.11) and Blim is 800,000 tonnes. Currently the stock isconsidered to be within safe limits and plans are in place for a decrease in fishing mortality if SSB should fallbelow Bpa again. There is concern that the 2003 recruitment (Figure 4.12) is the lowest for over 20 years. It isinteresting to consider the fishing mortality (F) that peaked at 1.468 in 1975 (Figure 4.13), corresponding to aremoval of 77% of the fish in the sea during that year, and resulting in a catch of 312,800 tonnes in that year.Currently, higher catches are being achieved with a fishing mortality of only F=0.24, and the Fpa has been set at0.25. The fishery has been totally transformed by a revolution in management since the collapse in the 1970s.


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Figure 4.12: North Sea Herring, Recruitment. ICES ACFM 2003 VPA*.

Figure 4.13: North Sea Herring, Fishing Mortality.Dashed blue line = Fpa. ICES ACFM 2003 VPA*.

4.105 The restoration of herring stocks can be considered a success for the CFP and the use of VPA. Severalfactors have contributed to success. The herring fishery is seasonal and is not mixed, so there is little problem ofinteraction with catches of other species. The VPA is supported by results from the IBTS for adult herring and thelarval herring surveys, so data quality and quantity are high. Following the collapse of the fishery, the modernfleet is small and easily managed to ensure compliance.

Mackerel

4.106 Mackerel in the north-east Atlantic are regarded as belonging to two different stocks, the North Seamackerel, and Western mackerel. Outwith the spawning season these two stocks mix together in waters aroundthe British Isles but at spawning time they separate into the two stocks and congregate in their respective areas.

Figure 4.14: Western Mackerel. ICES ACFM trends in landings, SSB, Recruitment and Fishing Mortality. Dashed blue lines = Fpa and Bpa. Solid blue line = Flim.

4.107 The North Sea mackerel were virtually fished out in the 1970s but some spawning still takes place in thearea of the Ekofisk oil field. Since that time, a fishery has developed based on the western mackerel that spawnalong the European continental shelf edge from the west of Scotland, west of Ireland, Celtic sea and into the Bayof Biscay. Spawning occurs in the spring to early summer. During autumn and winter, these fish migrate widelyinto the North Sea and north and west of the British Isles at which time they are exploited by the fleet.

4.108 Fishing exploits 4 to 8 year-old fish and a reserve area known as the “mackerel box” is maintained off thewest of Cornwall to conserve juveniles. Targeted mackerel fishing is banned within that area. The box iscontroversial since juveniles are often caught in other areas, but currently it is recommended that the closed areabe continued.

4.109 Landings have remained constant at approximately 700,000 tonnes per annum for 25 years (Figure 4.14)and spawning stock biomass is about 3 million tonnes, well above the Bpa of 2.3 million tonnes. Fishing mortalityis currently 0.2, lying between the Flim value of 0.26 and Fpa of 0.17. This very conservative approach takes accountof uncertainties in the assessments. VPA is used in the standard way, but is supplemented by stock assessmentsfrom egg surveys every three years.


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Management of Pelagic Fisheries

4.110 The scientific advice and management of the pelagic species since the crises of the 1970s has been muchmore successful. A major feature is the establishment of a low F regime. Indeed negotiations between Norway,Faroe Islands and the EU in 1999 agreed to set a “TAC consistent with a fishing mortality in the range 0.15-0.20” for mackerel. Such a low F value means that errors in VPA and predicted catches are less critical, and the TAC system works well for these species.

4.111 Management of herring is particularly well served by three sources of information, landings and VPA, theIBTS, and the larval fish surveys. For mackerel, only the egg survey every three years provides any fishery-independent data.

4.112 The catch of herring comprises 2 to 6 year-olds, and mackerel up to eight years old are caught. This issimilar to the life span of North Sea cod, and there is no theoretical reason why cod should not also be managedat similarly low F levels, to the long-term advantage of both the stocks and the fisheries.

4.113 Summary:

• Following crises in the 1970s, management of herring and mackerel has adopted a policy of low F values (<0.3),removing less than 25% of the stock each year.

• Production is high and sustainable.

• Low F values mean that errors in VPA, and hence TACs, are small.

• Management of pelagic fisheries under the CFP has been a success.

• Management is simplified since these are single species fisheries.

• The fisheries can continue to be managed under TACs but multi-annual plans can be initiated.

• Particularly for mackerel, research is required on additional fishery independent survey methods, such as eggsurveys or acoustics.

Industrial Fisheries4.114 Industrial fisheries account for more than 50% of landings by weight from the North Sea. Landings aresampled to estimate the percentage of by-catch, and to gather data needed for stock assessment. The sandeelfishery is by far the largest of the industrial fisheries. No relationship has been observed between the spawningstock biomass of sandeels and subsequent recruitment, making prediction of the future state of this short-livedspecies problematic. The reported by-catch is surprisingly low. The strategy of sampling landings to assess by-catchrates is sensible, and it is unlikely that the estimates are substantially biased. The fishery appears to be able tominimise by-catch a) by towing the net along the bottom at slow speed, allowing larger fish to escape, and b) by repeatedly fishing a small number of locations with a sandy habitat, high sandeel densities, and lownumbers of immature fish of other species. Fisheries for Norway pout and sprat have higher by-catch levels, butacross all industrial fisheries, the by-catch is currently estimated to be just 2%, which is a substantial reduction onearlier years.

4.115 ICES considers that sandeel fishing mortality is well below natural mortality but they also admit touncertainty over the state of the stock. It concluded that the stocks were able to sustain current fishing mortalitylevels for the period 1995-2002, and set TACs at or above 1,000,000 tonnes from 1998-2002, with a smallreduction to 918,000 tonnes in 2003. Only in 1998 was the industry able to achieve the TAC.

4.116 Concerns over ICES advice include the following:

(a) ICES advice is based largely on a single-species perspective, despite some attempts to allow for multi-species issues. A high take of sandeels (especially if many 0-group sandeels are taken, as can occur late inthe year) in a poor sandeel year may not do long-term damage to sandeel stocks, whose populationsrecover quickly. However, it may have a larger impact on longer-lived species that rely on sandeels forfood, at least in some locations at some times of the year. There has been some circumstantial evidencethat the sandeel fishery can adversely affect kittiwakes, and much conjecture that it has a wider impact onseabirds; certainly, a lack of sandeels leads to breeding failures in several species, whether or not thefishery is to blame. As a result, one area has been closed to the fisheries to protect seabirds. The impact ofa year with very low sandeel availability on other fish species such as cod cannot be observed, but may besignificant. Measures to protect 0-group sandeels might ameliorate such effects.


(b) Because the catch of industrial fisheries is so great, even a low by-catch rate may lead to a substantialeffect on those species most impacted. For example, in 2002 it was estimated from data provided by ICESworking group members that 2% of the industrial catch was of whitefish (haddock, whiting and saithe),which corresponds to around 20,000 tonnes; although this is only around one tenth of the whitefishbycatch in the 1970s, it nevertheless represents a very significant number of immature whitefish.Percentage of whitefish bycatch in the Norway pout fishery is much greater than for sandeels, so measuresto protect immature whitefish should be targeted at this fishery.

(c) In 2003, ICES has stated that the spawning stock biomass in 2004 will be low, and that it is unable to set a TAC. It suggests that ‘exploitation at the beginning of the 2004 sandeel season should be kept below theexploitation in the 2003 season. This restriction should apply until the strength of the incoming year-classhas been evaluated . . . ’. For several years, TACs have been set at levels (around 1,000,000 tonnes) wellabove the landings achieved by the sandeel fishery (700,000 to 800,000 tonnes). There are now conflictingindications on the state of the stock. Much of the difficulty is that recruitment shows little if anycorrelation with spawning stock biomass, and as the fishery targets primarily 1-group fish, there is verylittle warning of a poor year-class. Nevertheless, the precautionary principle would suggest that the TACshould be reduced to well below the takes of recent years.

(d) Little is known about the ecosystem effects of industrial fisheries. The availability of sandeels to predators,especially seabirds, has received much attention. This work highlights the adverse effect on predators oflow local recruitment. Because of the low correlation between spawning stock biomass and recruitment,the effect of industrial fisheries on recruitment can be argued to be either positive (removal of older fishfrees up resources so that more are recruited) or negative (removal of 0-group fish in the fishery reducesrecruitment; the effect is likely to be proportionally much greater in a year of low sandeel abundance).ICES notes that ‘further analysis of the ecological impacts of these fisheries is required’.

(e) There is a widespread belief that extraction of species on such a scale must be damaging to the ecosystemand to larger predator fish. The evidence to date suggests that this belief may be unfounded. However,much of the evidence has not been subjected to external review, and is not readily available forindependent scrutiny.

4.117 Summary:

• Industrial fisheries, predominantly sandeels, account for more than 50% of landings by weight from the NorthSea with TACs of ca. 1,000,000t.

• Industrial fishery landings have been very constant for over 20 years and ICES advise that the fishery issustainable.

• It should be noted that in recent years the fishery has not been able to land the TAC.

• The ecosystem effect on other fishes and birds of removal of large quantities of sandeels each year is poorlyunderstood.

• Sandeels are short-lived and vary in abundance from year to year. There is concern that in low sandeel years thefishery could be removing too great a proportion of production from the North Sea.

• The industrial fisheries are so large that small percentages of by-catch could have substantial effects on otherspecies.

• It is widely recognised that the Norway pout fishery has a large by-catch of juvenile whitefish and shouldtherefore be strictly controlled.

Recommendations:

• The EU Commission should ensure the industrial fishery TAC should be decreased below the recentreported landings and take account of interannual variation in abundance of sandeels.

• FRS should direct research at the potential ecosystem effects of the industrial fishery.


Deep-Sea Fisheries4.118 This report has not considered offshore fisheries in ICES areas VIb, XII, VIIc to the West of Scotland, sincethe tonnage taken by Scottish vessels is not large and indeed the total size of these fisheries is small comparedwith those in the North Sea. Nevertheless, new deep water demersal species are often cited as having potential fordevelopment as an alternative to depleted shelf fishing resources.

4.119 The demersal deep-sea fish are characterised by slow growth and long delayed maturity, leading to a lowreproductive rate and low productivity. Demersal deep-water fisheries are based on species such as roundnosegrenadier (Coryphaenoides rupestris), black scabbardfish (Aphanopus carbo), blue ling (Molva dypterygia), deep-watersharks and orange roughy (Hoplostethus atlanticus)64. These species were first exploited in the North Atlantic byRussia and other eastern European countries in the late 1960s and early 1970s. The roundnose grenadier is themost important species in reported landings from waters off Scotland (Table 4.2) and are mainly caught by Frenchvessels. When the UK ceased to claim a 200 mile fishery zone around Rockall, large parts of the Rockall Plateauand Hatton Bank became open to international fleets, not simply those of the EU. This has increased effort andreversed a trend of declining catches. It is probable that some landings are unreported.

Table 4.2: Reported landings (tonnes) of selected deep-water species by all countries from ICES Sub-areas VIand VII (West of Scotland and Ireland).

Species 1996 1997 1998 1999 2000 2001 2002Blue ling 6928 7361 8004 9471 8522 11070 6096Black scabbard fish 3689 2995 1967 2166 3712 4620 5947Orange roughy 995 1039 1071 1337 1887 3692 5765Roundnose grenadier 7095 7070 6364 6538 9790 14907 8950Smoothheads 7 978 4684 1

ICES WGDEEP 2003 (Data for 2002 provisional)

4.120 It is interesting to note that ACFM considered that TACs were not an appropriate method to manage thedeep-water fisheries and instead recommended effort limitations. This was supported by the UK industry but itwas rejected by the Council of Fisheries Ministers in 2001. TACs came into force on 1 January 2003 based largelyon track records of reported landings. France received the highest proportion of the TAC, and UK and Irelandreceived only small allocations. The opportunities for UK vessels for expansion of deep-water fisheries are likely tobe limited. The effects of trawling on the fragile deep ecosystem are largely unknown and there is concernregarding the destruction of recently discovered habitats such as the Darwin Mounds for which the EuropeanCommission Emergency Regulation (1475/2003) has been put in place to protect them. Such areas may provideimportant refuges for juvenile fish and spawning monkfish/anglerfish that are also important in shelf fisheries.

4.121 Summary:

• Deep-sea fisheries make only a small contribution to landings by Scottish vessels and scope for expansion is unlikely.

Recommendations:

• The Commission should recognise the vulnerability of deep-sea species and seek to regulate this fishery by effort control as recommended by ACFM.

Overall Comments on Fisheries Science4.122 Scotland has a long history of involvement and leadership in the science of fishery management inEuropean waters. Under the CFP, Scotland takes a large share of North Sea and adjacent fishery resources. There isa contrast between the successful management of the pelagic and shellfish sectors under the CFP compared to thefailure in the demersal sector. Technological creep results in an inexorable increase in fishing capacity of the fleetand the underlying need to remove 30-40% of vessels per decade even under favourable fishing conditions wasnot addressed. During the 1990s science set excessive TACs that failed to curtail fishing mortality. Much of thedifficulty in managing the demersal sector arises from the endemic high F values, these magnify the effects ofscientific errors and lead to instability in fish stocks. Lowering F values, as was done in the pelagic sector, mayremove many of the problems that have arisen.


4.123 Table 4.3 summarises the TACs set for the main stocks in 2003 and 2004.

Table 4.3: Comparison of 2003 and 2004 TACs for the main stocks.

Stock TAC 2003 tonnes (ICES ACFM) TAC 2004 tonnes(19 December 2003

EU Proposals for catches)Cod North Sea 27,300 27,300Cod West Coast 1,808 848Haddock North Sea 51,735 77,000Haddock West Coast 8,675 7,205Whiting North Sea 16,000 16,000Whiting West Coast 2,000 1,600Monkfish North Sea 7,000 7,000Monkfish West Coast 3,180 3,180Nephrops North Sea 16,623 18,987*#Nephrops West Coast 11,340 11,300*Herring 400,000 460,000Mackerel 556,607 545,500

*precautionary TACs#To be revised to 21,350t when Council of Ministers decides on appropriate management arrangements in mixedNephrops/cod fisheries.

The Structure of Fisheries Science 4.124 Fisheries science in Scotland is supported primarily by Fisheries Research Services (FRS) which is an agencyof the Scottish Executive. However other input comes from the Scottish Association of Marine Science, the NorthAtlantic Fisheries College in Shetland, and the Universities of Aberdeen and Stirling. FRS is publicly funded and itsprincipal duty is to provide advice to government. FRS provides Scottish representation at ICES.

4.125 FRS has a pivotal role in the process of fisheries management in Scotland and is a leader in its field inEurope. We consider that fisheries science in Scotland is currently at full stretch and that it would be appropriateto find ways of expanding the input to it. There is concern that the current funding and organisational structurefor fisheries science do not bring sufficient of the national intellectual resources to bear on the problems being tackled.

4.126 We recognise that the time schedules associated with annual stock assessments are very tight and thatinclusion of debate about new methods and running new methods in parallel may strain the system to breakingpoint. This is one reason for our earlier recommendation that there should be a move away from the annualround of stock assessments. There does not appear to be sufficient capacity in fisheries science across Europe toservice the annual stock assessments and to carry on a debate about the development and implementation of newmethods. Problems in the organisation and resources for fisheries science have been recognised by the EuropeanCommission65, but with little evidence so far of effective remedies for these problems.

4.127 We suggest that solutions to this problem in Scotland could include:

• Government funds to support the participation of non-FRS scientists in the ICES process of stock assessment.

• The secondment of some of its scientists into university departments where they should be free to compete forOST and other highly competitive sources of research funding, and where they should also be free to teach andspeak with an independent voice. This could also be achieved by the use of sponsored academic positions.

• Opening a portion of FRS research funding to competition as a means of: (1) encouraging its own scientists torise to the challenge of international competition; (2) enabling non-FRS scientists to engage with the scientificproblems being tackled by FRS; (3) encouraging interest in fisheries science within the wider sciencecommunity; and (4) encourage greater exchange of personnel between FRS and the academic community.

• That FRS should be able to use government funds to lever unlimited funds from other sources in order tosupport its research.


References47Cwt , hundredweight = 50.8kg.48Cushing, D.H. (1988) The Provident Sea. Cambridge University Press. ISBN 0 521 25727 1.49Garstang, W. (1900) The impoverishment of the sea. Journal of the Marine Biological Association of the UnitedKingdom. NS6: 1-69.50http://www.cefas.co.uk/fishinfo/cod_all_ages.htm 51Brussels 3.12.2003 COM(2003) final. Proposal for Council Regulation Fixing for 2004 the Fishing Opportunities etc. Brussels 03.12.2003 COM (2003) 746 Final.52Dr M. Heath, FRS Aberdeen.53Cook, R.M., Sinclair, A. & Stefansson, G. (1997) Potential collapse of North Sea cod stocks. Nature 385: 521-522. 54Scott, B, Marteinsdottir, G. & Wright, P. (1999) Potential effects of maternal factors on spawning-stock-rectruitment relationships under varying fishing pressure. Can.J.Fish.Aquat.Sci. 56: 1882-1890.55Cushing, D.H. (1984) The gadoid outburst in the North Sea. J.Cons.Int.Explor.Mer. 41: 159-166.56Proposal for a Council Regulation establishing measures for the recovery of cod stocks. Commission of theEuropean Communities Brussels 6.5.2003 COM (2003) 237 Final 2003/0090(CNS).57Also, cod in the Kattegat, West of Scotland and Irish Sea. 58ICES ACFM 2003 page 53 section 3.5.2. Cod in Subarea IV (North Sea), Division VIId (Eastern Channel), andDivision IIIa (Skaggerak). 59Proposal for a Council Regulation fixing for 2004 the fishing opportunities . . . Brussels 03.12.2003 COM (2003)746 Final. 60Request from the European Commission regarding recovery plans and management measures for cod. (page 511)ICES ACFM\2003\October\Cod & Hake.61Caddy, J.F. & Agnew, D.J. Invited Plenary Lecture. Recovery plans for depleted fish stocks: and overview of globalexperience. 62Rice, J.C. et al. (2003) Recovering Canadian Atlantic Cod Stocks: The Shape of things to come? ICES. CM 2003/U: 06. 63Rosenberg, A.A. (2003) The recovery plan for cod in the North Sea, Irish Sea and West of Scotland: more of thesame and far too little. University of New Hampshire & MRAG Americas.64Gordon, J.D.M., Bergstad, O.A., Figueiredo, I., & Menezes, G. (2003) The deep-water fisheries of the NortheastAtlantic: I Description and current trends. Journal of Northwest Atlantic Fishery Science. 31: 137-150. (Available onwww.nafo.int/publications/frames/PuFRJour.html).65Communication from the European Commission: Improving scientific and technical advice for Communityfisheries management (2003/C 47/06).


5 Fisheries and the Environment

Introduction5.1 The marine environment is important to Scotland. As well as being an important source of food from bothcapture fisheries and aquaculture, it contains much of Scotland’s mineral wealth, it processes effluent outflow andis a sink for pollutants. It is also an increasingly important part of personal enrichment for the people of Scotland,and for visitors, because of its outstanding seascapes and wildlife, and for recreation.

5.2 Stewardship of the marine environment as a whole is a high priority. There is increasing recognition bygovernment and the public of the need to change the primary focus for management of the marine ecosystemtowards a more balanced consideration of all environmental functions.

Ecosystem-based Management5.3 This change is reflected in the recent move towards ecosystem-based approaches to management in theCommon Fisheries Policy. There has been much debate about the definition and meaning of ecosystem-basedapproaches to management. This debate recognises explicitly the complexity of ecosystems and the interactionsbetween their component parts. In certain areas of management, mainly including fisheries, there has been areluctance to embrace this cultural change, perhaps because of the implications there are for the economicviability of many fisheries.

5.4 Examples of the way in which fisheries appear to be unable to adapt to the new culture come from thecontinued move to exploiting new fishing grounds and species (e.g. deep-sea fish) without appropriate assessmentof the potential impacts of these moves. Other industries are required to carry out environmental impactassessments of their activities in advance, and it is not clear why the fishing industry should be exempt from suchprocedures. Moreover, it would be normal for other marine-based industries to meet the costs of these types ofassessments from within their own resources.

5.5 Marine ecosystems are more dynamic but much less understood than terrestrial ecosystems. There is anurgent need for improved knowledge and understanding of the marine environment, including fish populations,through additional science.

5.6 Further consideration of management aspects of the ecosystem-based approach is given in paras. 7.73-7.78.

• We recommend that the Scottish Executive should consider some form of Environmental ImpactAssessment for new ventures by the fishing industry.

• We recommend that the Scottish Executive and the relevant funding bodies should provide increasedinvestment in the science required to understand the marine ecosystem and to develop realistic models.

Environmental Policy and Fishing5.7 As a result of the failure of fisheries regulators to adequately address the impacts of fishing, over the pastdecade there has been growing pressure from the ‘environmental wing’ of governments and NGOs to ensure thatfish species and the ecosystems of which they are part are adequately protected by applying the same standards asapply to other wildlife.

5.8 There are many ways in which environmental policy may have an impact on fish. Currently, a major focusis on intergovernmental agreements to set up a network of ‘Marine Protected Areas’ (MPAs) intended to ensure(among wider objectives) that currently depleted fish species are restored to levels where they play their historicfunctional role within the wider food webs of which they are part.

5.9 A marine protected area can be considered as any area of the intertidal or subtidal terrain, together with itsoverlying water and associated flora, fauna, historical and cultural features, which has been reserved by law, orother effective means, with the aim of protecting species, habitats, ecosystems or ecological processes of themarine environment.


5.10 MPAs raise a number of challenges, not least of which are knowing how to set restoration targets in systemswhose species can fluctuate enormously due to natural causes (and now potentially due to anthropogenic factorssuch as climate change); and how to apply a concept of fixed protected areas to those marine species that arehighly mobile. Another major problem is a ‘turf war’ between the fisheries and environmental wings ofgovernment, which has meant that, while the concept of MPAs has been well discussed, and commitmentsentered into, as yet there has been relatively little movement on implementation.

5.11 The requirement for the setting up of a network of MPAs within Scottish waters is derived from the 1992Convention on Biological Diversity (CBD) and the associated 1995 Jakarta Mandate. These emphasise site-basedapproaches to marine conservation. Under International Law enshrined within the OSPAR Convention and theEU Habitats and Wild Birds Directives, MPAs will be established in Scottish waters during the next decade. Thesewill include representative networks of MPAs involving time/area closures of fisheries for the protection of nurserygrounds, marine habitats for non-target species and spawning grounds. They could lead to the cessation of fishingwithin some of the richest fishing grounds.

5.12 There remains considerable lack of awareness amongst those involved in fisheries about these requirementsand their implications. However, they are unavoidable, and will have an increasing impact on fisheries policy inthe coming years.

• We recommend that the Scottish Executive should ensure that forums (e.g. RACs and inshoremanagement committees) established for regional fisheries management should be tasked with helpingto implement environmental policy relevant to their region. This would include the establishment ofmarine protected areas.

The Impacts of Fishing on the Environment5.13 The impacts of fishing on the environment include physical damage to the seabed, destruction of non-target organisms, and, when overfishing occurs, alterations to the balance of the ecosystem by extraction of largenumbers of commercial species. In simple terms, over-fishing occurs when a species is taken by a fishery inquantities that cause declines over several fish generations. Many of the fish stocks exploited by the Scottish fleetshow the signs of over-fishing.

5.14 A major problem when assessing the effects of fishing is that we generally do not know how marineecosystems should appear when there is no fishing, so it is difficult to set objectively targets for the reduction ofthe impact of fishing on the environment. Lack of information about how marine ecosystems were oncestructured is an obstacle to making value judgements about the future conduct of fisheries. Setting objectivesbased upon subjective concepts of biological diversity is equally difficult and suggests that, after appropriateconsultation, the Scottish Executive needs to provide clear policy objectives for marine environmentalmanagement and these must include fisheries. In this respect, it is important that Scotland embraces the approachadopted by OSPAR involving the establishment of Ecological Quality Objectives (EcoQOs).

5.15 Food webs are manifestations of who eats whom within the marine ecosystem, and they also represent howenergy flows from the phytoplankton at the bottom of the food web through to predators like fish, seabirds, seals,cetaceans (porpoises, dolphins and whales) and turtles at the top of the food web. Although food webs can bevery complex we know that energy is dissipated as it moves from the bottom to the top. Animals at the top of thefood web are less abundant and have lower potential to recover from harvesting. In general, fishing has tended totarget species at the top of the food web because they tend to be larger and of higher market value.

5.16 As these species have declined, fishermen have gradually shifted attention from the larger species to smallerspecies further down the food web66. It is debatable if this has happened in Scottish waters but the shift of fishingeffort from demersal whitefish to Nephrops indicates declines in fishing opportunities for whitefish as a result over-exploitation.

5.17 Evidence from Scotland suggests that efforts to decommission fishing capacity in the demersal whitefishsector and to restrict quotas has resulted in a shift towards fishing for shellfish. Because different regulations are inplace for vessels of 10m and under, and they are generally fishing nearer to shore, an unintended consequence ofthe decommissioning schemes for the demersal fleet may have been to increase the pressure on the inshorefishing region and, therefore, to increase the near-shore impacts of fishing.


5.18 This progression from the exploitation of one group of species to others illustrates the current andhistorically unsustainable nature of fisheries. This is not a modern phenomenon but it has accelerated in the pastfew decades. Pressure to retain levels of employment and profitability in the face of increasing industrial efficiencyhas led to inevitable pressure to find more fish resources. Most indicators suggest that this pressure is invidiousbecause it reduces the possibility of recovery of already over-exploited fish stocks.

5.19 In contrast to the land-based ecosystems where exploitation will often involve removing the primaryproducers (i.e. plants), in the oceans there is little evidence that fishing affects the phytoplankton, which are theplants of the oceans. In circumstances where fish populations have declined because of fishing, the energy thatthese populations once consumed is likely to be absorbed by other parts of the food web. Energy could bechannelled into species that are of no commercial importance and it could encourage the growth of populationsof non-human predators such as seals (see below). The whole ecosystem can be driven into another stateinvolving reduced species diversity and, perhaps, reduced stability as a result of the removal of keystone species.Ecosystems in these altered states are likely to be less useful to fishermen and they may also have reduced value inthe provision of vital ecosystem services.

5.20 In some circumstances fishing threatens the biological extinction of populations. Fish near the top of thefood web, such as cod and many deep-sea fish (e.g. orange roughy) are particularly vulnerable, as are those thathave predictable spawning aggregations or occupy specific habitats that are known to fishermen. Sustained fishingof these types of species has led to changes in their genetic structure that are likely to have reduced their capacityto overcome natural environmental cycles such as the North Atlantic Oscillation.

5.21 The way in which fishing often selects only certain individuals from fish populations will be detrimental tothe populations’ resilience to exploitation. Ironically, technical measures used to conserve fish stocks, ofteninvolving increasing the mesh size of nets so that only the largest fish are captured, could have a long-termnegative impact on the stocks. Selection for fish that become reproductively mature at a small size and young ageprobably leads to lower egg quality and production. This points to the need for refuges, possibly in the form ofMPAs, for the large, old fish together with an overall reduced mortality rate through greatly reduced fishing effortin order to ensure that enough fish mature to reach an old age.

5.22 Even in the absence of fishing, some of the impacts of fishing could take centuries to resolve. Recovery ofthe genetic structure will be a slow process if indeed it will ever occur.

Could Other Factors Influence Fish Populations?5.23 There is increasing evidence that, even in the absence of fishing, marine ecosystems are highly dynamicwithin quite broad boundaries. This means that we would expect fluctuations in the balance of speciesabundances both geographically and through time. Declines in fish populations resulting mainly fromenvironmental processes can be made worse as a result of fishing at times when the population is at a low ebb.

5.24 Environmental change, that may affect reproduction, growth and survival, has been suggested as a possiblecause of fluctuations in the North Sea cod stocks67. It is suggested that the period from the early 1960s to the early1980s may have been particularly favourable for cod recruitment but recently conditions for recruitment havebeen much less favourable. This type of fluctuation in the fortunes of fish stocks also probably applied to othercommercial species68.

Figure 5.1: IBTS North Sea Location 1, 1st quarter trends in Bottom Temperature.


60°N 2°E Bottom Temperature

5

6

7

8

9

1960 1970 1980 1990 2000 2010Year

Tem

pera

ture

°C

5.25 The international bottom trawl survey (IBTS) has recorded bottom temperature at 10 locations in the North Sea since 1970. The data in Figure 5.1 show that mean temperature before 1990 was 6.67°C, whereas for 1990 onwards the mean is 7.67°C, and these results are typical of data available from a number of sources, indicating varying amounts of warming in the North Sea. One suggestion is that cod are moving further north in order to avoid warm conditions. However in winter, the North Sea is warmer in the north and the coldest temperatures occur in the Southern Bight. The relationship between temperature and fish distributionor abundance is clearly complex. There are cyclical trends in temperature which are linked to the North Atlantic Oscillation (NAO) so any effects observed in the North Sea may be part of a general phenomenon innorthern hemisphere69. The temperatures observed in the North Sea remain within the limits of tolerance of cod.

5.26 Biological change in the North Sea is evident from changes in plankton distribution in recent decades.These provide food for various life history stages of fishes and it is reasonable to expect an effect up the food web.Since the mid 1980s there has been a clear shift towards fewer carnivorous zooplankton and fewer copepods of the species Calanus finmarchicus. Conversely, abundances of benthic invertebrate larvae and phytoplanktonhave increased.

5.27 Since a strong year-class of cod in 1987, there has been a trend towards lower recruitment which could belinked to environmental change. It is possible that changes in plankton availability have precluded optimalgrowth of cod larvae. However, these values are not very different from those prevailing in the 1960s and early1970s when the cod stocks were increasing but fishing pressure was lower.

5.28 It is clear that the current problems with the major whitefish stocks arise because of high levels of fishing70 but this is exacerbated by unfavourable environmental conditions. This suggests that the expectation for the future will be reduced productivity of whitefish stocks and levels of fishing pressure will have to be reduced accordingly.

Impacts on Other Species5.29 Fishing can often be highly precise with respect to which species are captured. This is generally true ofpelagic fisheries but more often fishing also catches species that were not the target of the fishery. Depending onthe level of this by-catch, the effects on the population of non-target species will be similar to the direct impactson the target species. This could involve reduced population size, selection of particular sizes of individuals fromthe population and, through time, genetic modification of the population. Unlike the target species, there isusually very little information available about the populations of non-target species because information isusually only collected about species that are of commercial importance. Consequently, it is very difficult to knowwhat effect fishing has on the populations of some of these species. Since some species may be extremely rare andhave low resilience to fishing, it is already possible that fishing has caused local extinctions of populationswithout us ever knowing. In such circumstances, the establishment of MPAs may help to promote the survival ofsuch species.

5.30 Indirect impacts of fishing can also occur on non-target species. These are impacts that occur through theeffect that fishing has on the food web. Marine ecosystems are recognised as being highly dynamic, non-linear(meaning that their responses are not predictable using most accepted forms of mathematical theory) andcomplex (meaning that they contain many interacting components). Managing fisheries along the lines of currentand historical practice is like attempting to manage the function of one organ of the human body in isolationfrom, and with virtually no knowledge of, the activities in the rest of the body.

5.31 The ecosystem-based approach to management (see para. 5.3) does not necessarily mean the abandonmentof single species population dynamics models, especially where appropriate alternatives do not exist. Instead, itadvocates that the results of these models should be subject to modification by including the ecosysteminteractions at a higher level in the assessment process. Sometimes this can include formal integration of datafrom other species into multi-species assessments (e.g. as in multi-species VPA) but the assessment process also hasto include other indicators of ecosystem status and health which can be used to modify output from formal stockassessment models.


5.32 The understanding of the factors that produce stability in marine food webs is improving. For example, theexistence of webs within webs is seen to be a stabilising influence, and disruption of this sub-structure could leadto rapid evolutionary change in the whole food web. What is not understood in any detail is the elasticity(capacity to return to its original state when disturbed) of food webs. This can best be understood by a metaphorcomparing the capacity of a boat to right itself when hit by a wave with the capacity of an ecosystem to withstandthe strain of fishing. In most circumstances, the boat is able to withstand waves but, when hit by a large enoughwave, the boat will roll to a point when it will capsize and will not return to the upright. The indirect effects offishing on ecosystems could act in a similar catastrophic manner. In the same manner as the responsible boatskipper will avoid compromising the stability of his boat, ecosystem managers should take a cautious view aboutthe effects of fisheries on ecosystems.

Marine Mammals and Fisheries5.33 Marine mammals have the potential to compete with the industry for resources. The actual number ofcetaceans in Scottish waters is not well known but the numbers are substantial. They include 200,000-300,000harbour porpoises in the whole North Sea71 and 150,000-200,000 seals throughout Scottish coastal waters72.However, some species of cetaceans, including dolphins and porpoises, are rare and there is a general concern overthe by-catch of these species in some fisheries. But this appears to be less of a problem in Scottish-based fisheriesthan some others in Europe and, in general, the fishing industry is working hard to introduce technical measuresthat can reduce this type of by-catch.

5.34 Marine mammals eat fish and increasing numbers of seals in Scotland mean that they will be eating morefish. Although seals, and other species of marine mammals, are often viewed by fishermen as competitors for fish,the interaction between marine mammals and commercial fisheries is complex. Overall, marine mammals inScottish waters are likely to eat between 0.5 and 0.75 million tonnes of food each year but it is known that muchof their diet consists of non-commercial species.

5.35 It is not tenable to argue, as some do, that seals are the cause of the decline in fish stocks, because there isno evidence that seals are short of food at a time when the overall level of fish stocks is very low. Increasingpopulations of seals may be a consequence of changes in the structure of the marine ecosystem resulting mainlyfrom fishing. Seals may have been rather better than fishermen at exploiting these structural changes (see 5.19).Regular calls for control of seal numbers represent a deep-felt belief on the part of fishermen that this will helptheir cause but culling seals is unlikely to be a practical solution. It is most unlikely that the costs of undertakingcontrol of seals would be balanced by comparable economic benefits to the fishing industry. Such an approach tomanagement can lead to highly emotive responses on the international scene and could put Scotland at oddswith many of its major trading partners. There are also plausible scenarios in which removal of seals would reducethe fish available to fishermen because seals may eat some of the predators of young cod and other whitefish.Therefore, there is sufficient uncertainty, both biological and economic, surrounding a policy of seal control tomake it an unattractive option at this stage.

Seabirds and Fisheries5.36 Seabirds can also be major consumers of juvenile fish and sandeels, which form the major part of the diet ofmany seabirds around Scotland. The total consumption of sandeels by seabirds in the North Sea is likely to beabout one-fifth of the commercial harvest73. Concerns over the effects of sandeel fisheries on seabirds mean thatthe breeding success of some seabird species has been used as an indicator of the status of sandeel stocks in theNorth Sea. However, there is still uncertainty about the extent to which seabird populations have been influencedby the sandeel fishery74.

5.37 Seabirds may have benefited from fisheries by feeding on discarded fish and offal. For some time it wasthought that this may have been a factor in the increases in the fulmar populations in Scotland during the past 50 years, but recent calculations have played down the significance of the fishing industry as a major source offood for seabirds.


References66Caddy, J.F. & Garibaldi, L. (2000). Apparent changes in the trophic composition of world marine harvests: theperspective from the FAO capture database. Ocean & Coastal Management 43, 615-655.67Beaugrand, G., Brander, K.M., Lindley, J.A., Souissi, S. & Reid, P.C. (2003). Nature 426, 661-664.68Platt, T., Fuentes-Yaco, C. & Frank, K.T. (2003). Nature 423, 398-399.69Anon (2003) Scottish Ocean Climate Status Report. Fisheries Research Services, Report 05/03, Scottish Executive,20pp.70Cook, R.M., Sinclair, A. & Stefansson, G. (1997). Potential collapse of North Sea cod stocks. Nature 385, 521-522.71Report of the ICES Advisory Committee on Ecosystems, 2001.72Report of the UK Special Committee on Seals, 2003. Natural Environment Research Council.73Furness, R.W. & Tasker, M.L. (1997). Seabird consumption in sand lance MSVPA models for the North Sea, andthe impact of industrial fishing on seabird populations dynamics. In: Forage fishes in marine ecosystems. Alaska SeaGrant College Program, AK-SG-97-01, pp 147-169.74Tasker, M.L., Camphuysen, C.J., Cooper, J., Garthe, S., Montevecchi, W.A. & Blaber, S.J.M. (2000). The impacts offishing on marine birds. ICES Journal of Marine Science 57, 531-547.


6 The Role of Aquaculture

6.1 The Aquaculture industry in Scotland is currently dominated by the production of Atlantic salmon(145,000 tonnes in 2002). The industry grew at approximately 10% per annum over the 10 years to 2002 (Figures 6.1, 6.2). About 5,000 tonnes of rainbow trout are also produced each year but this has remainedrelatively stable. A developing halibut industry currently produces 300 tonnes per annum. Cod farming is in theearly stages of development.

6.2 Shellfish are also farmed in Scottish coastal waters, notably mussels, oysters and scallop. Of these, onlymussel farming has developed to any significant scale, with a production of 3,236 tonnes in 2002.

Figure 6.1: World and UK salmon production 1990-2002.

6.3 The Scottish salmon industry is worth over £230 million at first sale values and Scottish Atlantic salmonnow accounts for approximately 50% of Scottish food exports. It directly employs of the order of 2,000 people,with a further estimated 4,500 jobs in associated support activities such as processing and supply. Much of thisemployment is based in remote fishing-based communities along the West Coast and in the Scottish Islands. In Shetland, for instance, aquaculture provides about 10% of total direct employment.

Figure 6.2: Scottish Aquaculture Production (major species) 1991-2002.

6.4 The Scottish Executive has recently launched a new “Strategic Framework” for the Sustainable Developmentof Aquaculture in Scotland and the EU has also recently launched an Aquaculture Strategy. Both initiativesenvisage further expansion and consider diversification into other species to be an essential element of futuredevelopment. In Scotland the species at the heart of the diversification process is the Atlantic cod, though Atlantichalibut, haddock and a variety of shellfish species also have a significant role.


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6.5 The EU Strategy envisages an increased aquaculture production within the member states by 4% per annumwith particular attention given to molluscs, new species (e.g. cod), organic production and environmentallycertified production.

6.6 The vision of the Strategic Framework for Scottish Aquaculture is the development of a sustainable, diverse,competitive and economically viable aquaculture industry. Central to this development is the environmentalsustainability of the industry.

6.7 Impacts from organic wastes are limited to the areas immediately adjacent to net-pens and the area ofseabed affected in this way by aquaculture is considered to be insignificant in terms of the total coastal resources75.Such affects are also transient and controlled through the use of fallowing and by appropriate site-selection.

6.8 Concerns exist over nutrient enrichment in poorly flushed areas and regulation is used to control risks frommedicines residues. Strict control of such risk is currently exercised by the Scottish Environmental ProtectionAgency (SEPA) through a consenting approach under the Control of Pollution Act 1974. This utilises modernmodelling techniques backed by on-site measurement to restrict local fish production and the site-specificapproach is the first of its kind among the fish farming nations.

6.9 Cod farming would fit directly into such an assessment, with the expectation that total biomass of cod in agiven site at the present time would be considerably less than that of salmon because of the dramaticimprovement in food conversion efficiency of salmon achieved through dietary improvement in recent years.Current research being carried out into cod nutrition, backed by the experience of developments in salmon,should rapidly result in modification of cod diets with improved food conversion efficiency and reduced wasteproduction.

6.10 In the case of salmon aquaculture, the issue of possible genetic interaction with wild stock is beingaddressed through the Tripartite Working Group which includes representation from the Scottish Executive, the Aquaculture industry and wild fishery interests. The possibility of relocating fish farms to reduce the risk ofsuch interaction is also being examined by the Location/Relocation Working Group recently established by theScottish Executive.

6.11 The benefits of synchronous fallowing and common management regimes are also being exploited throughArea Management Groups and Area Management Agreements coordinated through the Tripartite Working Group.Aquaculture development will in this way be controlled within the context of integrated coastal zonemanagement.

6.12 It is recognised that synchronous fallowing in a Management Area may not be possible as new species areintroduced. Until improvements in diet development and fish growth take place, it is likely that the time takenfor new species (e.g. cod) to reach market size will be greater than that for salmon.

6.13 In many cases, to gain experience of growing the new species, farms may well on-grow a net-pen of codalongside existing salmon stocks. The Strategic Framework recognises that such multiple species sites may have tobe utilised for the first 3 to 6 years of development of a particular sector. As the cod aquaculture industry matures,single species sites will be the norm.

6.14 There is also the possibility of cross-infection between fish species and the emergence of new diseases. The Aquaculture Health Joint Working Group, established by the Scottish Executive and with representatives fromthe Executive and industry, is actively developing Codes of Practice which will take account of this risk and allowrapid investigation and early application of control measures to effectively manage this risk.

6.15 Competition for Scottish farm-produced cod is likely to come from Norway. Significant Norwegianinvestment has taken place, especially in the area of hatchery development and technology. An estimated 4 million fingerling cod were produced in 200376 and it is suggested that fingerling production in Norway couldsoon reach 80 million fish per annum.

6.16 However, the on-growing of cod juveniles to market size is being carried out by the major salmon growingcompanies in Norway, usually backed by Norwegian bank finance. The current low profitability of farmed salmonhas led to a lack of risk capital in Norway for cod grow-out farms, such that demand for juveniles was significantlyless than the volume produced.


6.17 The most optimistic Norwegian estimates suggest a production of 400,000 tonnes in 10-15 years time. This would require the bulk of the product to be sold as frozen fillets and blocks, the lowest-value commodity.Should this occur, it is suggested that profitability could only be achieved through the use of large-scaleoperations and significant operational improvements. Clearly, such economic forecasts are also significantlyaffected by eventual sales price.

6.18 It is thus considered more likely that smaller scale development will occur, aiming to produce fish for thehigh-end price segment of the market in fresh products.

6.19 Estimates by the British Marine Finfish Association suggest that 30,000 tonnes of cod may be producedannually in Scotland by 2013. Two commercial cod hatcheries have now been established in Scotland and earlyon-going trials have commenced. Both species produce extremely small eggs and the growth of hatched larvaecommences with a range of live feeds before weaning juveniles onto dry diets. The process is technically complexand costly and takes place in on-shore facilities using pumped seawater and very strict hygiene control. Yearround production of juveniles is also being achieved through light and temperature control in on-shorebroodstock units so that year-round supplies of farmed fish can be produced.

6.20 Further growth of cod juveniles from 50gm or larger takes place in floating net pens in the sea in facilitiesvery similar to those used for salmon production.

6.21 The more cautious projections of the Scottish industry also take account of the need for research anddevelopment in problem areas such as early maturation (likely to be controlled by light manipulation in marinepens), relatively slow growth (dietary development for cod is still in its infancy) and lack of effective broodstockselection programmes which would improve disease resistance and growth rates.

6.22 It is recognised that site availability for marine aquaculture in Scotland is limited. In-shore sites withlimited water exchange have largely been replaced with sites in more exposed locations which have increasedcarrying capacity.

6.23 In view of the restricted number of new sites suitable for aquaculture, there is a clear role for thesubstitution of existing salmon farming by cod rather than by a major expansion of the size of the industry. Growing of cod can take place in existing facilities designed for salmon. This may be particularlybeneficial where relocation of existing salmon farms is being considered in important areas for wild salmon stocksor where there may be concerns about possible genetic interaction with wild stocks. Cod could also provide a useful alternative in lochs prone to high salmon sea lice infections as they are not infected by the salmonid sea lice Lepeophtheirus salmonis, but a smaller species, Caligus elongatus, which is seldom linked to significantdamage in salmonids.

6.24 It is also possible that cod-farming developments may take place in fisheries dependent areas on the eastcoast, where there has previously been a presumption against salmon farming because of perceived risk toimportant wild salmonid stocks. Farmed cod produced to date have attracted premium prices and futureexpansion of cod will depend on a quality product with year-round availability, freshness and traceability and freedom from helminth infection. Though there are some new financial backers entering the cod aquaculture industry, it is expected that existing salmon farmers and their financiers will be the main source ofdevelopment income.

6.25 The Scottish Aquaculture industry has been successful in developing a strong brand image with thedevelopment of numerous quality standards (e.g. Label Rouge, Scottish Quality Trout, Shetland and Orkney).

6.26 Farmed cod in the foreseeable future is likely to remain a ‘niche’ product supplying top quality product tothe restaurant trade and will not satisfy even the UK demand for cod. It will compete directly with top qualityline-caught cod rather than the bulk of Scottish landed or imported cod. It is thus unlikely that Scottishaquaculture-produced cod will significantly substitute wild-caught fish in the short to medium term. Futureaquaculture production of cod will be very dependent on market conditions and competition with otheraquaculture producers (e.g. Norway). There is the possibility of future expansion (beyond a 15-year timetable) butthis is only likely if attempts to produce a sustainable international cod fishery fail.


Figure 6.3: Global fishmeal and oil production compared with aquaculture production using fishmeal-basedfeeds (fish and crustacea).

6.27 Aquaculture production of both salmon and cod currently relies heavily on the use of fish meal and fish oil.World fishmeal production has changed very little over the last 15 years despite the dramatic 10% annual growthin aquaculture production (Figure 6.3). Variations in fishmeal production have generally been related to El Niñoevents. Northern hemisphere aquaculture feeds are manufactured using raw material principally sourced fromindustrial fisheries in the southern hemisphere, especially from Peru and Chile, and there has been a gradualtransfer of fishmeal from traditional animal feed use to aquaculture feeds. Aquaculture feed production currentlyutilises some 35% of world fishmeal production and 70% of fish oil. Fish oil requirements for growing cod aremuch less than for salmon production.

6.28 Any expansion of aquaculture will have to include substitution of fish products with those of vegetableorigin. Recent research has led to approximately 30% substitution of plant oils in salmon diets and this trend isset to continue. Substitution of fish oils with plant oils also allows a practical means of reducing the content ofoil-associated environmental pollutants such as dioxins and PCBs. Trials have demonstrated significant reductionsby allowing a degree of plant oil substitution during the ongrowing phase followed by feeding a finishing dietcontaining fish oil pre-harvest to ensure adequate Omega-3 content and maintenance of the human healthbenefits of eating such food77.

6.29 With these developments in mind and the increasing production by aquaculture of plant-eating speciessuch as carp in freshwater, FAO predict that by 2030, 50% of fish production will come from aquaculture.

Recommendations

• Further research should be carried out into the substitution of fish oil in farmed fish diets with plant oilas a means of promoting sustainability of industrial fisheries.

• Scottish Ministers should consider how research with “new species” such as cod can be supported toenable the diversification of Scottish aquaculture production.

References75Review and Synthesis of the Environmental Impacts of Aquaculture. The Scottish Association of Marine Science andNapier University; Scottish Executive, Central Research Unit, 2002.76Winther, V., Hemple, E. & Rønning, J.E. (2003). KPMG Centre for Aquaculture and Fisheries, Trondheim,Norway. In: Fish Farming International 30 (7), 36-39.77Bell, J.G., Tocher, D.R., Henderson, R.J., Dick, J.R. & Crampton, V.O. (2003). Altered fatty acid composition inAtlantic salmon (Salmo salar) fed diets containing linseed and rapeseed oils can be partially restored by asubsequent fish oil finishing diet. Journal of Nutrition 133, 2793-2801.


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7 Managing Scotland’s Fisheriesfor Sustainable Development

Introduction7.1 The CFP has recently undergone a major review and some important changes have been introduced. It istherefore unlikely that the Commission and Council of Ministers will be willing to consider major change so soonafter the last review. Nonetheless we believe that there is scope within the existing framework for far reachingimprovements that can help to rebuild a strong, viable and sustainable future for all of Scotland’s fishing industry.There is also a need to reassess the responsibilities of the UK and Scottish administrations if the industry is toachieve its full potential in Europe. The industry itself has a key role to play. We wish to see it adopt a positive andproactive role in policy development and adopting a partnership approach to management.

7.2 While it was the crisis in cod stocks and the consequential effect of the measures imposed on the industrythat gave rise to this Inquiry, our report must look beyond this to ensure that Scotland can have a stable andsustainable fishing industry, capable of providing a livelihood for future generations of fishermen. This cannot beachieved without some painful decisions.

Allocation of Management Responsibility7.3 Exclusive competence for formulating policy on fisheries conservation in the EU is vested in theCommission and Council of Ministers. Policy decisions are published in the form of EU Regulations which themember states are required to adopt. Member states are responsible for the enforcement of Community rules inrespect of vessels flying the member state’s flag, fishing in the member state’s waters and landing their catches in the member state’s ports. In the UK, responsibility for enforcement is shared between the Sea FisheriesInspectorate for England and Wales and the Scottish Fisheries Protection Agency.

7.4 Member states, however, still retain major areas of responsibility for management. The most important ofthese is the internal allocation of fishing entitlements through the mechanisms for quota management and theregulation of inshore waters. As already explained in Chapter 2, the Council of Ministers annually decides theTACs for all major stocks and these are allocated to member states in accordance with the principle of ‘relativestability’78. It is the role of each member state to determine how the quota should be allocated among thenational fishing fleet. Significant differences occur across Europe. In the UK, day-to-day management has beendevolved to Producers’ Organisations (POs) with the UK fisheries departments jointly agreeing the allocations tothe 19 POs on the basis of fixed quota allocations held by the member vessels. Roughly 5% of the total UK quotais allocated under two other systems: one for vessels over 10 metres not in PO membership and the other forvessels under 10 metres.

7.5 Responsibility for inshore fisheries management within the 12 mile zone, lies with the member state.Following the revision of the CFP in 2002 the member state is empowered to introduce regulations binding on allvessels, including those of other states with historic rights, fishing in the 0-12 mile zone. Since the base line usedto define inshore waters runs to the west of the Western Isles, encloses all sea lochs and the Minch, and providesprotected zones around St Kilda and North Rona as well as around the Northern Isles, Scotland has one of themost extensive inshore fishing zones of any country in the European Union. Inshore waters thus constitute one ofScotland’s most valuable natural assets.

7.6 A third area where member states have responsibility is fleet structure, where the Commission sets referencepoints for reducing fleets; but it is left to the member states themselves to determine how these targets will bemet. Successive rounds of decommissioning in Scotland, including that in 2002, have been managed by theScottish Executive Environment and Rural Affairs Department (SEERAD).

78See chapter 2, para 2.12-2.13, relative stability and The Hague Preferences are explained.


The Policy Process7.7 The procedure for decision-making in fisheries policy within the EU is outlined in simplified form in Figure 7.1. Two main routeways can be identified. The first, which is relatively direct, applies to the annual roundof stock assessments and TACs. Scientific advice is provided by ICES to the Commission and recommendations arethereafter put to the December Council meeting. The second involves consultations with the industry and otherstakeholders through the Advisory Committee on Fisheries and Aquaculture (ACFA), and with external bodies,including the Economic and Social Committee (ESC) and the European Parliament, before the proposals aresubmitted to the Council of Ministers. Although this process is intended to take account of technical and non-technical advice, it is liable to impose serious delays in decision-making and, on occasion, makes decisionsunintelligible in the eyes of the fishing industry.

Figure 7.1: The CFP: a simplified view of the current formal decision-making system.


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7.8 A more serious area of concern for this Committee is that decisions taken in Brussels often depart from thescientific advice received from ICES, usually without any clear explanation of why this should be so. TheCommission’s own influential Scientific, Technical and Economic Committee on Fisheries (STECF) – comprisingmainly scientists, many of whom will have been involved in the stock assessment exercises – provides the initialfilter, evaluating the advice from ACFM in the context of the CFP. Despite its name, STECF offers little by way ofeconomic advice, principally because of the dearth of comparative economic data. Moderation of the scientificadvice may occur within the Commission whose task is to balance the scientific advice against the economic andsocial objectives of the CFP. In this they are inevitably attempting to balance the risks to the sustainability of thestocks and the economic viability of the fishing industry. Only rarely will the Commission’s recommendationsdepart very significantly from the scientific advice. A notable exception occurs in the case of cod, where it hastwice refused the scientists’ advice of zero TACs. Less measured departures from the scientific advice may occurduring the Council of Ministers’ December meetings, where the decisions are more overtly political. The mostrecent example was their decision in 2003, taken in the context of the cod recovery plan (see 7.19 et seq) to raisethe North Sea haddock quota by 50%.

7.9 Overall, therefore, the policy process is subject to the following weaknesses:

• a lack of any clear long term vision of the future for Europe’s fisheries;

• an essentially reactive rather than proactive approach to fisheries management;

• preference for single species rather than multi-species management;

• short term, annual manoeuvres over TACs that take precedence over strategic planning;

• non-transparency;

• lack of involvement of the main stakeholders in the formative stages of policy;

• lack of timeliness in decision-making;

• distortion of rational policy proposals; and

• a lack of respect for, legitimacy of, and commitment to the outcomes of the policy process.

7.10 This highly centralised policy process fails to provide for adequate involvement by the fishermen. Where the industry has been consulted, it has usually been in the end stages and about implementation ratherthan formulation of policy. The only formal representation of fishing interests is through the Advisory Committeeon Fisheries and Aquaculture (ACFA). Otherwise, to make their views known the industry has to rely onrepresentations through member state fisheries departments and contacts with the Commission (DG Fisheries); or through the European Federation of Fishermen’s Organisations (Europêche) and pressure groups representing fishermen throughout the Union. It is, therefore, easy to understand the frustration of the Scottishindustry and the sense of despair felt in fishing communities at their exclusion from the process, the apparentlack of urgency in dealing with the industry’s problems and the absence of concern for the fate of the fishingcommunities.

Regional Advisory Councils7.11 Against this background, the decision in December 2002 to establish Regional Advisory Councils wasparticularly welcome. This stemmed from proposals put forward jointly by the Scottish Fishermen’s Federation(SFF) and the National Federation of Fishermen’s Organisations (NFFO)79. The Commission’s proposals fall wellshort of what the industry had been looking for, mainly because their functions will be advisory rather thanexecutive. But despite scepticism about the extent to which the regional advice will influence policy, the industryin Scotland must hope that RACs can bring management decision making closer to the people most affected.

7.12 The effectiveness of the RACs is likely to be limited by several aspects of the proposals80. The size of theregions is seen by many as too large for the benefits of subsidiarity to be properly realised and to undermine anygreatly increased stakeholder participation. The composition of the Councils, limited to 18 members representingboth fishing and non-fishing interests, may make it difficult to get the full benefit of the industry’s knowledge andexperience. Separate Scottish representation on the North Sea or Western Waters Councils cannot be guaranteed.Moreover, the exclusion of fisheries scientists from formal membership of the Councils makes it doubtful whetherthe conditions for the much needed constructive dialogue between industry and the scientists will be created.

7.13 While there is scope to enlarge the membership of the councils through the setting up of sub-groups forspecific fisheries, or indeed sub-regions, the Commission is anxious to limit the proliferation of regional advice.


7.14 It may now be too late to alter the present structural arrangements for RACs, though these may be expectedto evolve over time. But, despite the limitations, it will be up to those on the Councils to develop a sense ofpartnership between the industry and non-industry representatives in order to ensure that they work to achievesustainable fisheries and healthy marine ecosystems. The Councils will be required to respond to policy proposalsfrom the Commission and/or member states. But the greatest test for the RACs will be in setting out their ownstrategies for the development of their regions’ fisheries. If these are to be credible, they must satisfy the need forprotection of the marine environment and the conservation of endangered habitats and non-commercial species,as well as the development of commercial fisheries.

7.15 The establishment of RACs, despite their lack of executive function, does offer the opportunity for majorimprovement, because it adds an important new source of advice on which policy should be based. They shouldbe seen as the first step towards incorporating the industry’s knowledge and experience into the policy processand, it is to be hoped, ultimately devolving responsibility to the regions. There is, however, a long road to travelbefore the ultimate goal of regionalised management can be achieved. Only if the RACs can add clear value to theexisting process and demonstrate the industry’s potential for management responsibility can there be any realhope that they will eventually be given such a role. It would help if the Commission were to set a date for thereview of RACs, say 5 years from their implementation, with a view to extending their functions. Such a prospectwould add greatly to the sense of purpose of those participating in the RACs.

7.16 The Commission and Council of Ministers will also need to demonstrate that they take RACs seriously andsee them as part of reforming the substance, rather than simply the image, of the management process. Theycould offer the Commission valuable regional intelligence on fisheries and their management, which has beenlacking in the past. Council Regulation 2371/2003 makes no commitment on the part of the Commission to actupon the advice received. However, it must be assumed that where the advice is based on a consensus of RACmembers it will normally be adopted. Otherwise, the frustrations of the fishing industry (and others) will beincreased, with damaging consequences to relations between the European institutions and the Scottish fishingindustry. RACs would then become what the sceptics already anticipate – an empty talking shop.

7.17 The Committee therefore welcomes the establishment of RACs. We see them as an important first steptowards devolution of fisheries management.

7.18 We recommend that Ministers should press the EU Commission to set a timescale for a review of theRACs so that the transfer of some management responsibilities to them can be considered. The fishingindustry should seize the opportunities presented by RACs to demonstrate a responsible role in fisheriesmanagement.

Reforming the Management System: the Cod Recovery Plan 7.19 The most pressing issue facing the Scottish fishing industry today is the cod crisis and the proposals for its solution in the cod recovery plan. Scientific aspects of this plan are discussed in paragraphs 4.75-4.76. The recovery plan has eclipsed the wider debate over the reformed CFP. It demonstrates many of the weaknessesassociated with fisheries management in Europe, including its focus on single species management. It hasheightened the dispute between industry and science over the adequacy of stock assessment methods, anddismayed many in the industry as a result of the seemingly dismissive attitudes on the part of both scientists andadministrators towards empirical evidence provided by fishermen. Furthermore, the delays in bringing forwardand agreeing the recovery plan only add to the belief, widespread within the Scottish industry, that theCommission and Council of Ministers lack a sense of urgency over the cod crisis and that the CFP cannot dealswiftly and effectively with it. All of this feeds the industry’s demands for a fundamental change in the system ofmanagement for Scotland’s fisheries.

7.20 The recovery plan is a high risk strategy. It fails to set a clear time frame for recovery; indeed it offers noguarantee that cod stocks will recover. Moreover, there are serious doubts over the wisdom of adopting singlespecies recovery plans. Cod has been singled out as the key species and management policy in the northern NorthSea, West of Scotland and Irish Sea is now being driven very largely by concern for the future of this one species,in a context where the regional fisheries no longer cast cod in such a strong leading role. An alternative optionmight be to focus management on maximising the potential from the full range of demersal fisheries in a genuinemulti-species approach (see para, 7.42 et seq below).


7.21 Following dire warnings from ICES in 1999 about the future of cod stocks, emergency measures, involvingsharply reduced TACs and an 11 week closure of the cod spawning grounds, were introduced in the northernNorth Sea and West of Scotland in 2001. Draft recovery plans were laid before the Council of Ministers in 2001and again in 2002, only to be rejected in favour of interim measures for the introduction of days at sealimitations. Finally, in May 2003 a revised plan was tabled by the Commission (see Box 7.1). At its Decembermeeting the Council approved a series of measures for regulation of the cod fisheries, effective from 1 February2004, but left detailed proposals for the long term recovery plan, embracing the notion of multi-annualmanagement, to be decided at a later date. Some of these measures are at variance with the latest proposals for thecod recovery plan.

Box 7.1. Outline of the proposed cod recovery plan: COM (2003) 237 final

The proposals published in May 2003 apply in respect of cod stocks in the following areas (i) Kattegat (ii) Skagerrak, North Sea and Eastern Channel (iii) West of Scotland and (iv) Irish Sea. The plan establishes targetlevels for SSB in the North Sea of 150,000 tonnes (Article 3) and the plan will be deemed to have fulfilled itsobjectives when this target has been reached in two successive years (Article 4).

Chapter II details procedures for the setting of TACs viz: (1) where the SSB is equal to or above the minimum levelof 70,000 tonnes, TACs will be set with the aim of achieving a 30% increase in SSB in the following year (Article6.2); (2) TACs should not generate a fishing mortality rate for cod in the North Sea greater than 0.65 (Article 6.3);(3) TACs may be adjusted upwards or downwards by no more than 15% from one year to the next (Article 6.5); (4) where the SSB falls below 70,000 tonnes certain (unspecified) exceptional rules may be introduced (Article 7).

Chapter III contains the proposals for the management of fishing effort (Articles 8-13). It establishes procedures for(a) calculating total fishing effort expressed in kilowatt-days (b) distributing the total fishing effort across memberstates and (c) translating this into equivalent days absence from port [making no allowance for steaming time toand from the fishing grounds]. Days at sea allocations should be fully transferable and usable at any time duringthe fishing year.

Chapter IV lays down measures for monitoring, inspection and control of vessels involved in the recovery plan.These measures include prior notification (Article 17), requirements to land at designated ports (Article 18) and thestowage and transport of cod (Articles 19 and 20). Significantly, no provisions are made in the proposals fortechnical conservation measures (gear regulations and closure of fishing grounds).

Source: Commission of the European Communities, Proposal for a Council Regulation establishing measures forthe recovery of cod stocks, COM (2003) 237 final, Brussels, 2003.

7.22 The latest package of measures marks a significant advance towards adopting effort control as a principalmanagement tool, though still within a framework of TACs and quotas. The Commission and Council ofMinisters have not adopted the extreme solution favoured by ICES – closure of the cod fisheries – at least for thetime being. Linkages between cod and other species, notably haddock, have been broken and a 50% increase inthe North Sea haddock quotas for the UK has been agreed. The principle of spatial management, advocated bySFF81, has been acknowledged with the designation of two distinct zones in the northern North Sea. 80% of thehaddock quota requires a special permit, and can be taken only outside of a cod protection zone. The remaining20% does not require a special permit and can be taken anywhere. In all zones there is a limit of 5% on cod by-catch. Finally, a measure of flexibility is given to the member states to determine the way in which theymanage days at sea, permitting the aggregation of monthly allocations into periods of up to 11 months. This willallow POs and fishermen to plan the most effective use of their allocations. Days at sea allocations are subject tolimited transferability: they can be transferred within the same management period, area and gear type to vesselswith the same or lower engine power.

7.23 The value of these concessions is, however, greatly reduced by the size and location of the zone withinwhich UK vessels may take no more than 20% of their haddock quotas. Wrapped very tightly around theNorthern Isles and extending south to 57º30' N, it negates the locational advantages enjoyed by Shetland, Orkneyand North East coast fishermen in proximity to their fishing grounds. It remains to be seen whether, as a result ofthese constraints, the Scottish whitefish fleet is able to fish the increased haddock quota to the full. Theseregulations apply only to UK fishermen; those from other member states are free to take all of their haddockquotas without this restriction. But this is because the UK haddock quota has been increased and is now 78% ofthe total for the EU, whereas there was no increase for other member states. Meanwhile, days at sea restrictionsnow apply throughout the whole of Area VIa (West of Scotland). Here, TACs for cod, haddock and whiting havebeen further reduced and an area to the north and west of Orkney has been closed to all fishing by EC vessels.


7.24 The success of the cod recovery plan – the details of which are still to be worked out – must be in somedoubt. A number of potential threats, which have not been addressed within the plan itself, have beenidentified82. They include the under-reporting of catches, as a result of discards and illegal landings, and technicalcreep; the latter over a period of 5-10 years can be quite formidable. Moreover, commitment to the plan on thepart of industry could be jeopardised by unresolved points of disagreement between the fishing industry and thepolicy makers viz:

• the need for a recovery plan in its present form, arising from doubts over the extent of the cod crisis and thedegree to which it is caused by overfishing or by ecosystem effects;

• conflicting evidence of stock recovery resulting from the original emergency measures, with some in theindustry expecting signs of recovery to be rewarded with increases rather than further decreases in TACs;

• the lack of a clear operational framework for the plan in appropriate time frames and contingency plans, shouldthe evidence point to eventual failure, and an exit plan should the targets be met;

• uncertainty over financial compensation in the form of continuing transitional payments; and

• the question of whether the proposed plan could be influenced by political manoeuvres under the qualifiedmajority voting system.

Managing for Sustainability7.25 Even more important than finding a lasting solution to the current crisis over cod stocks is the need tosecure the long term sustainability of the Scottish fishing industry. Never again should the industry be placed injeopardy by overexploitation. While continuing to focus mainly on the future of the whitefish sector, the pelagicand shellfish/inshore sectors must not be neglected and we recognise that these may require different systems ofmanagement to achieve sustainability.

7.26 A sustainable fishing industry is a difficult concept to define. Sustainability is more readily applied to thebiological resources, where it means guaranteeing the renewal of fish stocks on an annual basis while ensuringthat the underlying structures of the stocks are sufficient to maintain renewal over the longer term; and to themarine ecosystem where it implies the maintenance of the essential diversity and integrity of the system. But it isalso appropriate to apply the principle of sustainability to the fishing industry itself, its economic and socio-cultural systems on which it is based, and to ensure that these are not subjected to severe policy induced shocksthat may lead to their breakdown. At the same time, strategies for sustainable development must remainsufficiently flexible and adaptable to take account of the effects of changes to the ocean environments and/or theglobal and regional economies.

7.27 Each of the different applications of sustainability can be expressed in the form of policy objectives. Butdefining the objectives is one thing; prioritising them and mediating between the potentially conflictingeconomic (efficiency) and social (equity) objectives is quite another. In looking to define the objectives forsustainable Scottish fisheries, we believe that the systems of management will need to ensure that:

1) stocks of commercial species in Scottish waters are maintained in a sufficient condition to provide high,sustainable yields for the foreseeable future;

2) the diversity, productivity and functional integrity of the marine ecosystems are at least maintained andwherever feasible strengthened;

3) a strong, efficient and economically viable fisheries sector, embracing both harvesting and processing, iscapable of being maintained without recourse to long term subsidies;

4) the fisheries sector continues to generate sufficient secure, well paid and rewarding forms of employment tomaintain dynamic and vibrant fishing communities, especially in the remoter areas of Scotland;

5) the cultural value systems which underpin the ethos of sustainability are not undermined; and

6) the systems of management are themselves seen to be efficient, cost effective, transparent and enforceable.


Balancing Capacity and Resources7.28 A reduction in the harvesting capacity of the Scottish whitefish fleet in line with harvestable resources inthe North Sea and West of Scotland is a prerequisite for long term stock recovery and for a profitable, sustainableindustry. While capacity remains above the level required to harvest the allowable catch, there will always beinducements to overexploit the resources.

7.29 Four generations of Multi-Annual Guidance Programmes (MAGPs) have failed to bring the growth infishing capacity throughout Europe under effective control. Part of the problem lies in the cumulative effects of new technology, so that while the number of vessels may decline, the overall growth in fishing capacity continues. In Scotland the number of over-10m vessels fell by 42% in the ten years up to 2003 but theaverage size of the vessel (engine capacity) increased by almost a half in the same period. In an attempt to limitincreases in fishing capacity, a system of vessel capacity units (VCUs) attached to the fishing licence wasintroduced in the UK in 1990; when licences were aggregated to allow the building of a new and larger vessel, a10% penalty was imposed on the combined value of the VCUs83. But the principal tool for achieving capacityreduction was a series of annual decommissioning schemes (1993-97) based on competitive tendering by thevessel owners84.

7.30 Across much of Europe, the main thrust of structural policy to reduce fishing capacity was beingundermined by rules governing the Financial Instrument for Fisheries Guidance (FIFG), which provided grants forthe building of new capacity – an anomaly which will end in December 2004. However, this bizarre situationcannot account for the growth in capacity of the Scottish fleet: over the past 15 years or so, the UK governmenthas not used FIFG for new vessel building85. As a consequence, the renewal of the Scottish fleet has been lessmarked than in many European countries.

7.31 Currently, the Commission is to set reference points for national fishing fleets but leave it to the memberstates to decide how to achieve their targets. The UK has initially opted for decommissioning as the principallever, focusing on the segment of the whitefish fleet primarily engaged in the beleaguered cod fisheries. In practicethis means removing a significant number of modern efficient vessels. Many believe this to be shortsighted,assuming recovery of whitefish stocks at some future date. But there is also concern that this latest round ofdecommissioning is falling behind its target for capacity reduction, as a number of approved bids havesubsequently been withdrawn. SEERAD has therefore been forced to turn to its reserve list to secure the requiredcapacity reduction through decommissioning older, less effective vessels.

7.32 The real problem, however, is what happens next. It is estimated that the 2002 and 2003 decommissioningrounds should remove some 35% of the whitefish fleet (see table 3.3) in Scotland, but this needs to be set againstoriginal estimates of 40% or more overcapacity at the European level86. But how will any remaining excesscapacity be removed? The Committee recognises that Ministers have already said there would be no moredecommissioning rounds and the Treasury may be reluctant to fund them. Leaving it to market forces, on theother hand, will be slow and painful and it will not be possible to manage a planned reduction to achieve apreferred fleet size or structure.

7.33 Individual transferable quotas (ITQs) have been successfully introduced in Iceland, where they have made asignificant contribution to the rationalisation of the fishing fleet87. For the UK, a report commissioned by DEFRAconcluded that ITQs would offer the most economically efficient means of securing a further reduction incatching capacity88.

7.34 However, it would still be subject to the disadvantages of the existing single species TAC system. Theindustry faces a deepening financial crisis with high levels of indebtedness and little prospect of an immediateupturn in quota entitlements. It is therefore not well placed to face open competition for quota. Although thereare persuasive economic arguments for a market-led solution, there are serious issues arising from the socialimpacts on fishing dependent areas in the more remote parts of Scotland and the future viability of the Scottishwhitefish industry. Market-led structural rationalisation would almost certainly lead to further structural andspatial concentration of the whitefish fleet.

7.35 Were such assets to become part of the investment portfolios of financial companies, they could in futurebe traded without reference to the best interests of Scotland’s fishing industry. Under conditions of a commonmarket they could be acquired by fishing (or non-fishing) interests in other member states, so long as those who

83Calculated on the basis of (length in metres x breadth in metres) + (engine power in kW x 0.45).85The issues that affect the UK’s use of EU Structural Funds are explained in Chapter 2.


bought them had a presence in the UK, registered their vessels in the UK, were subject to UK inspection andadhered to other conditions, such as labour market legislation to which UK vessels must adhere. Despite theseconditions, purchase of UK quota by interests in another member state could put at risk the principle of relativestability to which we attach over-riding importance.

7.36 There is at present no clear indication of what would constitute an appropriate fleet size to maintain fishingmortality at sustainable levels, though it would seem that the capacity of the existing fleet is still likely to exceedthe resources available if these are to remain sustainable. We believe that the industry should discuss this with theScottish Executive and that, if any further reduction in the number of vessels proves necessary to achieveprofitability, funds should be made available to assist this process on a voluntary basis. Any resulting strategyshould make provision for ongoing modernisation of the fleet.

The Regulatory System7.37 Rebuilding the management system for fisheries in the EU is essential; to keep the present system in placewould be to abandon hope of sustainable fisheries in the future. Ironically, the opportunity to lay the foundationsof sustainable fisheries in European (and Scottish) waters is created by the cod crisis. In its approach to the codrecovery plan, the Commission is moving broadly in the right direction. The timeframe of the cod recovery planseems to us an appropriate one for the transition to a new approach to fisheries regulation.

7.38 Although the new system must be robust, it must also distinguish between the different fisheries –demersal, pelagic and shellfish – applying the style of regulation that will work best. Clear cut choices will need tobe made between different modes of regulation and also in relation to the nature of the harvesting rightsconferred on the fishing industry, notably whether their ownership is vested in the state, the community or theindividual fisherman.

7.39 Almost all forms of fisheries management in the developed world deploy a mix of input restrictions, outputlimitations and technical conservation measures. In most cases the emphasis has been placed on outputlimitations in the form of TACs and catch quotas; and in Europe only the Faroe Islands have abandoned thissystem in favour of effort controls based on days at sea.

7.40 Although most systems may be made to work quite well when stocks are buoyant – as in the early years ofthe CFP – it is when stocks are in decline and fishing effort has to be reduced that the effectiveness of a system of stock conservation is put to the test. Clearly the system applied to whitefish stocks in EU waters has failed this test.

7.41 Single species TACs and quotas are flawed as a means of regulation in a mixed fishery, since scientific stockassessments are unable to deliver the level of specificity required to set appropriate TACs and, anyway, fishermencannot fish for a single stock. They have, therefore, lost credibility in the eyes of the fishing industry. Inadequacyof enforcement has rendered the system open to abuse. Indeed, illegal landings are thought to have increasedsharply in recent years, when quotas for cod and haddock have been set at very low levels.

A New Approach7.42 In the following sections we set out our preferred schema for regulation. As indicated in Figure 7.2, wedistinguish between: (a) the whitefish sector, where the mixed fisheries are best regulated through a combinationof effort controls and a more developed use of technical conservation measures; (b) the pelagic sector which,because of its leaner structure, targeted fisheries and seasonality of harvesting, would retain a TAC and quotabased system; (c) the shellfish sector where, especially in inshore waters, technical conservation measures withsome limitations on catch and/or effort are more suitable.

(a) The Demersal Sector

Effort Control7.43 Throughout the Scottish whitefish sector there is growing but qualified support for replacing the presentsystem by one based on effort quotas. The principle of effort control is already acknowledged in the revised CFPand is being applied in the cod recovery plan. With effort control, the system of management is based not onrestricting the outputs from the fishery but on restraining levels of fishing mortality through restrictions on thenumber of days allowed for fishing. Under normal conditions, days at sea allocations would not be attached to


specific species but would apply to the harvesting of any species in the mixed fishery. Theoretically, the systemoffers a number of advantages over catch quotas:

• it reduces the burden on fisheries science because it is no longer necessary to estimate the stock sizes fordifferent species – stock assessments would be updated annually but TACs would not be set on an annual basis;

• it would be subject to more effective monitoring and enforcement through modern forms of satellitesurveillance; and

• effort control would be combined with a requirement to land (and sell) all fish caught irrespective of size orspecies, thus removing the pretext for discarding and minimising any incentive for illegal landings.

7.44 There are, however, several drawbacks to the introduction of effort controls. Fishing effort is difficult tocalibrate for widely differing types and sizes of vessel and different gears. It would be necessary to setsustainability objectives for a days at sea regime that would apply to the fishery as a whole rather than forparticular species in particular areas. Effort entitlements would be established for well defined fleet segments andallocated to individual vessels taking account of the vessel size (kW), specifying the gears to be used and the areasto be fished with the given days at sea. This would not preclude the vessel from building a portfolio of effortentitlements using different gears and fishing different areas. But the main challenge of the new system would befinding a means of holding fishing capacity and effort in check. There are several ways of increasing de factofishing effort without altering the specifications of the vessel – fishing for more hours of the day, longer tows,larger gears etc. It would be necessary to impose compensating reductions in effort allocations to take account of‘technical creep’.

7.45 Effort entitlements would be transferable, as days at sea allocations are at present. Initially, effortentitlements would be allocated to segments of the whitefish fleet defined by size and type of vessel and also forspecific fishing areas (e.g. North Sea, West of Scotland, Irish Sea etc). Subsequent transfers of entitlements wouldonly be permitted within fleet segments and not across segment boundaries. Where transfers were negotiatedbetween vessels operating in different fishing areas, the requirement would be for the transferred entitlements tobe used only in the area of origin.

7.46 The initial allocations could prove problematic. They would have to take account of the value of existingcatch quota holdings, including quota that has been purchased; and a system for converting existing catch quotas as a percentage share of the allowable catch into effort allocations as a percentage of the total allowablefishing time (days at sea) would be necessary. The scheme will also have to make allowance for landings of non-quota species.

7.47 There is a danger that an effort control system could result in disproportionate effort being directed at thehighest value species, resulting in selective overexploitation. Suggestions that effort and catch quotas be used intandem to preserve high value stock, as at present under the cod recovery plan, would be expensive to enforceand recreate the problems of discards, high grading and illegal landings. We therefore recommend that catchquotas be phased out over the duration of the cod recovery plan; but their use as the principal means ofregulating the fishery should not be discontinued before the cod stocks have recovered to target levels.

7.48 It will still be necessary to set notional TAC targets for all major species as a means of maintaining ‘relativestability’ and to which effort quotas should broadly conform but not with the spurious precision of detailedannual stock assessments. Any tendency to concentrate too much fishing effort on particular high value speciescan be countered by technical conservation measures (protected areas, real time closures and gear restrictions)combined with the threat of major penalties on future allocations of days at sea for those who transgress the effortcontrol rules.

Technical Conservation Measures7.49 Reductions in the fleet through decommissioning are intended to bring harvesting capacity more into linewith resource availability, and effort control should ensure that the deployment of the surviving capacity remainsin balance, so maintaining a sustainable level of fishing mortality. However, fish stocks are naturally volatile, bothin size and distribution, so that effective management also requires adaptability, spatial and temporal sensitivityand flexibility. The introduction of an effort control system offers the opportunity to reclaim some of theflexibility that was once a feature of fishing practice.


Figure 7.2: Summary of Management Proposals


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7.50 Spatial sensitivity and flexibility can be provided through technical conservation measures which have nothitherto been used to the fullest extent in the CFP. Gear regulations in general provide the key to regionalsensitivity. A greater emphasis must be placed on the selectivity of fishing gears in terms of mesh size, theintroduction of square mesh panels, and selector grids to control both the size and species of fish taken. Ways andmeans must be found to overcome the natural resistance of fishermen to investing in technology that is likely toreduce rather than increase the short term returns from fishing. Financial incentives to offset the initial costs ofinstalling more selective gear and penalties in reduced allocations of days at sea for those that fail to comply withgear regulations may both be necessary.

7.51 Flexibility in management can best be catered for through use of closed areas. In some circumstances, itwould be desirable for closed areas to coincide with marine protected areas. Closed areas can be deployedseasonally to safeguard spawning stocks or permanently to protect specific types of habitat. They can exclude alltypes of fishing activity or be applied selectively to prevent the use of certain types of fishing gear. They can alsobe used for economic and social reasons to protect locally based, small scale inshore fishing fleets. The one type ofclosure that has so far been missing from the CFP is the so-called ‘real time closure’ used as a short termemergency measure to suspend fishing activities when, for example, abnormally large populations of juvenile fishare present in an area.

7.52 It is essential that RACs should have a major role in developing and applying these measures. They canprovide the missing intelligence on which an appropriate and regionally sensitive use of gear restrictions andclosed areas can be based. In particular, decisions on real time closures should be devolved as soon as possible toRACs, as the present machinery is far too cumbersome and centralised to do this effectively. Their effectivenessdepends on immediate action taken in hours rather than days or weeks which, even under the new provisions foremergency actions (Regulation 2371/2002: Articles 7 and 8), the CFP cannot deliver.

7.53 Technical conservation measures can be both beneficial and detrimental. They can assist fish stockconservation by increasing the selectivity of gear, thereby reducing by-catch, and they can also reduce damage tomarine habitats. However, these measures can also exacerbate genetic selection for smaller-sized fish and this mayhave an impact on the resilience of the population to fishing. In the widest sense, technical measures can alsoinclude seasonal regulation of fishing and the use of closed areas. Through the activities of OSPAR and the NorthSea Ministerial Council, a network of marine protected areas will be implemented over the next ten years andthese could include the use of a variety of technical measures to control the impact of fishing. It is important thatRACs have a central role in the process of designating and managing these areas.

The Transferability of Fishing Rights7.54 The Committee shares the industry’s concern over the lack of clarity regarding the ownership of fishingrights and believes that the uncertainty may hamper future progress towards a more efficient structure of thecatching sector. Accordingly, we recommend that the UK fisheries departments, in collaboration with thefishing industries, should undertake a wide ranging review of the existing system of quota managementhaving regard to the state’s responsibilities for the conservation and management of the fisheries, on theone hand, and the financial viability of the industry, on the other. The review should examine, inter alia, thepresent method of allocating fishing rights, conditions of transfer and the holding of quota by non-fishinginterests. It should pay particular attention to the likelihood of replacing existing catch quotas by effort allocationand the need to ensure that effort allocation is transferable between vessels. The findings from the review will have considerable relevance for the proposals in paragraphs 3.22-3.29 concerning the financing of thecatching sector.

7.55 The Committee was favourably impressed by the system of ‘community quotas’ which is emerging inShetland, as a result of investment by the PO and the Shetland Islands Council through its subsidiary SLAP inpurchasing additional quota for the Islands’ whitefish sector, thereby helping to retain the industry in Shetlandand to make it possible for new entrants to acquire existing quota. We consider this to be a proper and responsiblecourse of action to secure the Islands’ fishing future, although we recognise that it is the particular circumstanceof funds being available from Shetland’s oil revenues that make this possible. It is not an example that couldeasily be followed by other local authorities entirely dependent on revenues from Council tax or general taxation.


(b) The Pelagic Sector

7.56 Scottish pelagic fisheries based on mackerel and herring are reasonably buoyant at present. The fleet of 27vessels – all over 30 metres in length and based mainly in Fraserburgh and Shetland – is among the most modernin Europe. The sector is relatively easy to manage, partly because of the small number of vessels involved; it alsoshows good discipline in resisting the opportunity to increase its catch, even when stock assessments arefavourable, in order to support market prices. Although the major markets lie overseas, there is growingintegration between the catching fleet and the expanding processing industry. Confidence in the sector is high.

7.57 Because of its lean structure and the seasonality of harvesting, the sector is suitable for regulation by TACsand catch quotas. We would not wish to see that change. But management needs to bear in mind the long historyof boom and bust that has affected herring fisheries in particular. Fish stocks by their nature are volatile and thepresent upswing is unlikely to remain indefinitely. Irrespective of fishing pressure, fish stocks may fall sharply atsome time in the future. Those responsible for management therefore need to prepare for this by guarding againstovercapitalisation and inflexibility. Attempts to expand overseas markets and the ongoing build up of capacityneed to be carefully monitored.

Enforcement

7.58 No fisheries management system can expect to succeed unless it can be properly policed and enforced. A severe blow to the UK’s reputation for legal fishing and good enforcement was dealt by the EuropeanCommission’s recent formal letter of notice concerning failings in the obligation to enforce CFP rules. The textidentifies misreportings by area in pelagic fisheries, by species in demersal fisheries, and under-recording oflandings resulting from the practice of overfilling boxes with demersal fish. It also notes the low ratio betweenrecorded infringements and prosecutions, commenting that sanctions do not meet the level of deterrencerequired. This follows earlier reports by the National Audit Office drawing attention to the low level ofprosecutions and inadequate penalties meted out by UK courts for illegal fishing.

7.59 Effective policing depends on three factors: first, the vast majority of fishermen must accept the need forthe chosen system of regulation; second, the regulations need to be sufficiently clear to be easily understood bythe fishermen; and they must be fully implemented. Finally, the enforcement agency must have sufficientresources to undertake the task with rigour.

7.60 Enforcement should be made easier by a switch from TACs and catch quotas to effort controls, especially ifmodern satellite monitoring systems are in place for all vessels over 12 metres and there is a tariff of penalties fordeliberate tampering with on board transponders. But the main benefit is that the incentive to land illegallywould disappear since all fish caught could be legally landed. On larger vessels the use of electronic logbooks andpaper trails of catches from fishing area to final point of sale – intended as part of quality auditing – can also assistin the monitoring of landing data. Indeed, it is possible to envisage a shift in the emphasis of enforcement frominspections at sea to the auditing of logbook and landing data. In some instances, however, the deployment offisheries inspectors on board fishing vessels can help to monitor the ways in which fishermen perceive, interpretand respond to particular conservation measures.

A Timetable for Change7.61 The changes we propose for the whitefish sector involve not simply new regulations but a shift in the basicnature of the system from a reliance on TACs and catch quotas to one based on time management. This will haveimplications for all parties – scientists, administrators, fishermen and enforcement agencies. At the same time,new steps will need to be added to the decision making process, if RACs are to be given a worthwhile role.

7.62 We recommend that the EU Commission should replace the present system of catch quotas for thedemersal sector and Nephrops trawl fisheries with effort control (days at sea) and closed areas. The presentsystem of catch quotas would, however, continue for the pelagic sector.

7.63 We recommend that the EU Commission phase in this new system over the lifetime of the codrecovery plan; during this time the current system of catch quotas should continue alongside the evolvingeffort control system. Thereafter TACs should be set only as guidelines for these sectors.

7.64 We expect that this time frame should be sufficient to allow for the extension of satellite monitoringsystems to all whitefish and pelagic vessels over 12 metres and for appropriate methods of scientific assessment tobe developed in support of the effort control system.


Inshore Fisheries Management7.65 Although the Inquiry has focused attention mainly on the whitefish sector, the inshore fisheries must notbe ignored, especially as the severe downturn in the whitefish industry could displace effort towards shellfish. Theinshore waters are one of Scotland’s most valuable and enduring assets, not only for commercial fisheries but fortheir diverse natural heritage and contribution to tourism. As already noted, they are among the most extensiveinshore waters of any EU member state.

7.66 Ensuring that the delicate balance between man and nature is not disturbed and guaranteeing that thesevaluable assets are in no way diminished in value for future generations is a responsibility shared between theScottish Executive, the local authorities and the local fishing communities. While it is difficult to put a precisevalue on the revenue generated by the inshore fisheries, their importance to the regional and local economies inareas like the Highlands and Islands is undeniable. In these areas, the traditional inshore fisheries usually involvedseasonal participation in the whitefish, pelagic and shellfish sectors, often on a part time basis, in the croftingeconomy. Today, inshore fishing is focused largely on exploitation of shellfish stocks and undertaken mainly on afull-time rather than part-time basis.

7.67 Management of inshore fisheries in Scotland is in need of reform and is under review. The present system,based on the Inshore Fishing (Scotland) Act 1984, is outmoded, reactive and better adapted to resolving gearconflicts than conserving shellfish stocks. The Scottish Executive needs to make some critical decisions over therole of inshore waters and the sustainability of inshore fishing, notably whether the 6 and 12 mile zones shouldremain open to Scottish vessels of all classes and ports of origin or be reserved mainly for the use of locally basedvessels. A particular issue is how to maintain or restore traditional flexibility that allows switches between species,while being able to control fishing effort.

7.68 Inshore fisheries are facing a distinct threat of overexploitation from both within and outwith the sector.There are suggestions of redeployment of capital investment and fishing effort from the whitefish to the shellfishsector. Moreover, several parameters of inshore fisheries management are now being shaped by externalconsiderations. These include marine nature conservation, in particular the creation of Special Areas ofConservation under the European Habitats Directive, and, in future, by the implementation of the WaterFramework Directive with implications for water quality management in inshore waters.

7.69 The strengths and weaknesses of the existing system have been analysed in a recent study89. The authorsidentify three guiding principles for future inshore fisheries management in Scotland: it should be conducted atthe local scale; it should be stakeholder led; and it should be based on an integrated approach to fisheries and themarine environment. These principles are best achieved by the introduction of regional inshore managementcommittees to provide for comprehensive management of fisheries and mariculture within the 12 mile zone andwith powers to recommend the introduction of local bylaws concerned with living marine resources withininshore waters. Funding should come from central and local government sources. Membership of the committeeswould comprise a wide range of local interests in fishing and mariculture, processing and selling organisations,environmental agencies, local councils and enterprise boards, together with an independent chairperson.

7.70 These recommendations are fully consistent with the approach to fisheries adopted elsewhere in this report(see 7.77 et seq below). The Committee recommends that Scottish Ministers establish inshore managementcommittees on a local scale, led by the industry and should follow an integrated approach to fisheries andthe environment.

An Ecosystem-Based Approach to Fisheries Management7.71 An ecosystem-based approach to fisheries management is now widely canvassed as the way forward. It iscautiously accepted by the scientific establishment and by a fishing industry chary of its precise implications.And, significantly, it is endorsed by the European Commission as a defining characteristic of the revised CFP andis promoted by the FAO. It is, therefore, not so much a new approach as an emerging feature of fisheriesmanagement.

7.72 Article 2.1 of Council Regulation No 2371/2002, describing the objectives of the revised CFP, states that“. . . the Community shall apply the precautionary approach in taking measures designed to protect and conserve livingaquatic resources, to provide for their sustainable exploitation and to minimise the impact of fishing activities on marineecosystems. It shall aim at a progressive implementation of an ecosystem based approach to fisheries management . . .”


7.73 Yet there is no agreed definition of what an ecosystem-based approach means and this goes a long way toexplaining hesitancy in embracing the concept by most of those concerned. It is a concept, still in its infancy,which is exploited by different interest groups in support of their own agendas and thus it assumes a wide rangeof meanings in different contexts.

7.74 It is a truism in fisheries management that one cannot manage the fish stocks per se but only the activities of fishermen. Man does not yet have the ability to manipulate the marine environment, modify theecosystem or alter fish populations to suit his own interests. Yet, unwittingly, through fishing activity, man hasan impact on the physical environment of the sea bed, alters the structure of the ecosystem and modifies the behavioural characteristics of fish populations in ways that have affected and may degrade the marineenvironment.

7.75 Adopting an ecosystem-based approach to fisheries management, therefore, implies no more than using ourdeveloping knowledge and understanding of marine ecosystems to tune our systems of management forconservation of fish stocks to try to ensure that the biodiversity of the marine ecosystems are not furtherimpaired. As our understanding of marine ecosystems increases, it should be possible to rely less on the ‘bluntinstruments’ of single species TACs and quotas and put greater trust in technical conservation measures. But toattain such a position will require more investment in the marine sciences in general and a realignment offisheries science from its preoccupation with stock assessment to more emphasis on species interaction. In comingto understand the dynamics of the food chains and flows of energy within the ecosystem, we should be able toprovide a more reasoned response to a number of issues, such as industrial fisheries and seal populations, thatpresently trouble the industry.

7.76 Reflecting also the issues raised in Chapter 5 (paras. 5.3-5.6), an ecosystem based approach to fisheriesmanagement should, inter alia:

• aim to secure a reduction in the capacity to fish to a level commensurate with the long term regenerativecapacity of the stocks;

• ensure that damage to the benthic habitat and bycatches of non-target species are minimised through the useof more environmentally sensitive and selective fishing gears;

• make provision for the introduction of Environmental Impact Assessments (EIAs) in respect of all new fisheries;

• recognise the potential role of marine protected areas (MPAs) in the conservation of both commercial and non-commercial species in the marine ecosystem; and

• develop a closer integration between fisheries management and marine environmental management atEuropean, national and regional levels, so that fisheries are managed by bodies with a sufficient understandingof the environmental impacts of fishing.

An ecosystem based approach should be supported, where appropriate, by the provision of financial incentivesthrough FIFG to assist the adoption of environmentally responsible fishing methods.

Taking the Politics out of Fishing7.77 We have noted the widespread wish of the fishing industry ‘to take the politics out of fishing’, in otherwords to remove decision making on what are essentially technical measures from the highly politicised policyprocess. Although this plea was most commonly made in reference to the behaviour of the Council of Ministers, italso has relevance for decision-making in a national context. While we recognise the strength of this view, andmake some recommendations below to try to deal with it, it has to be said that it is unrealistic to imagine thatarrangements to govern or control any form of economic activity or employment can be divorced altogether fromthe political process.

7.78 We were also concerned to note the apparent unwillingness of the Scottish fishing industry to face up to,and in some cases even to accept, the problems of diminishing fish stocks. With a few notable exceptions, therewas a failure of the industry to work together to find solutions to the problem and to provide workablealternatives to the CFP measures that are so widely disliked. In part, this may be because fishermen’sorganisations, having been denied an active role in management, see themselves principally as lobbyists for the industry.


7.79 It is essential that the decision-making process should marry the expertise of the scientists with theprofessional experience of the fishing industry. It causes us dismay that the gulf that appears to separate fishermenand scientists is so great. No doubt there are faults on both sides but there is an urgent need to bring the two sidestogether in discussions that could be of benefit to both. We were particularly encouraged by the recent success ofthe North Sea Commission in achieving closer understanding between the industry and the fisheries scientists.

7.80 We have reviewed the scope for reducing the role of government – whether in Brussels, London orEdinburgh. The objective would be to ensure that the formative stages of policy-making, including the collatingand interpretation of scientific, technical and economic information, takes place in a less politicised arena; thatthe major stakeholders share responsibility with the state for management decisions; and that, as far as possible,the implementation of those decisions rests with them.

7.81 We consider the CFP to be too centralised. It is cumbersome and unable to show the flexibility or speed ofdecision making necessary for effective management.

7.82 Removing the conservation of marine biological resources from the exclusive competence of theCommission and Council of Ministers would make the policy subject to the principle of subsidiarity and open theway for RACs, and possibly more local organisations, to have a significant role in decision-making andmanagement. Properly constituted and with a true sense of responsibility for management, there is no reason whythe advice of the RACs should not become the proposals of the Commission. In due course we would hope thatthey might evolve into management organisations rather than simply advisory committees.

7.83 We have given much thought to how these difficulties might be resolved and especially to how theindustry might be given a greater role in its own management. We recognise that there may be opposition insome quarters to the setting up of another quango. But we have three options to propose:

(1) An authority governed by a Board appointed by the Scottish Minister with members drawn from the industrybut with other lay members with relevant expertise or interest. It would advise the Minister on all mattersrelating to fisheries and their management in Scottish waters, including policy formulation, monitoring andassessment; surveillance and enforcement; and scientific research. Similar authorities exist elsewhere in Europeboth within and outwith the EU. The new authority would take over the existing agencies, FRS and SFPA, andit would be for consideration how it should relate to Seafish (economic analysis, marketing advice) andSeafood Scotland. Funding would come principally from the Scottish Executive, rolling up the current budgetsfor FRS and SFPA and with an element of direct funding from the fishing industry.

(2) To establish separate Boards for the management of FRS and SFPA, which are presently semi-independentagencies. The Minister would be responsible for appointing these Boards and membership would be drawnfrom the industry and from other persons with relevant interests. The chairperson should be independent andthe Executive should continue to provide funding.

(3) To establish a forum, chaired by the Scottish Fisheries Minister, with membership drawn from industry,science and persons with expertise in fishing matters. This would be a deliberative body, but would provide anopportunity for all those with relevant interests and experience in the catching sector to debate the issuesconfronting the industry and to advise the Minister.

7.84 The Committee attaches great importance to a better understanding being achieved between the industry,scientists, environmental NGOs and Government. These options are ways in which this might be done. Option 3could be combined with either Option 1 or 2.

7.85 The industry must be encouraged to take greater responsibility for its own development. A number ofimportant industry initiatives can be identified including those in the Shetland Islands (see Box 7.2), the nascentClyde management scheme, the North East Scotland Fisheries Development Partnership, the HighlandsRegulating Order and the Torridon Nephrops management plan, inter alia. Significantly, in a number of instancesthe local authority provided the initial catalyst for integrated action.

7.86 At a regional level we believe that more onus should be placed on Scotland’s nine Producers’ Organisations(POs) to develop fishing plans, and harmonise catching, processing and marketing activities so as to maximise theeconomic value of limited fishing opportunities for their members and for the wider fishing community. POs havealready succeeded in their limited function of sectoral quota management. They are well placed to engage inmarket planning and development; this was, after all, the original purpose of POs. A few POs have already gone


some way towards closer integration between the catching and processing sectors. Others might find it useful tocollaborate in this task with regional associations and local authorities. But such developments would depend onthe willingness of fishermen to submit to the disciplines of providing advance landing information and scheduledtimes of landing. With fewer resources at their disposal, the 30 Scottish fishing co-operatives (with some 330member vessels) mainly engaged in fish selling and chandlery could possibly undertake a similar role for theinshore sector. We note the recent decision by the Stornoway Fishermen’s Co-operative to acquire processingcapacity on behalf of its 28 vessels.

7.87 It is possibly at the local level – and in relation to inshore fisheries – that the most pressing need to createthe conditions for participative governance arises. Co-operation and self-reliance begin with the local community;if they cannot flourish at this level, there can be little hope for their success at higher scales. The arrangements forinshore management in Scotland lag behind those in England and Wales in that there are no devolved structureswithin which these attributes can grow. While the existing system may suit the need to regulate access to specificinshore waters to avoid gear conflicts, it does not satisfy the conditions for resource conservation so well. Nordoes it fit the requirement for environmental integration. We would therefore reiterate our earlier conclusion ofthe need to put in place regional inshore management committees with a broad remit in relation to both fisheriesand mariculture.

7.88 We recommend that Scottish Ministers should seek to bridge the gulf between fishermen andscientists and should also consider our alternative proposals for restructuring the institutionalarrangements for fisheries management as set out in this Chapter.

Box 7.2. Laying the basis for sustainable fisheries in the Shetland Islands.

The Shetland Islands – the most northerly outpost of the Scottish fishing industry – comprise a fishing dependentregion par excellence. Today, around one fifth of the Islands’ employment and GDP is linked to fishing andaquaculture. Although the region’s economy has been greatly enhanced in recent years by oil-related revenuesnow in decline, its long term future rests on the careful management of the living resources in the seas around theislands and on providing strong community based support for the fishing industry’s continued development. Jointaction by the Shetland Islands Council (SIC) and the Islands’ fishing interests – in part supported by oil revenuesinvested in the Shetland Development Trust – have resulted in a range of initiatives intended to guarantee thefuture sustainability of the fishing industry. These initiatives include:

• the building of the North Atlantic Fisheries College, providing the basis for education, research and training infisheries related disciplines, inter alia;

• the adoption of the Shetland Islands Regulating Order (1999) for management of shellfish resources within the 6 nm limits by a local partnership (Shetland Shellfish Management Organisation Ltd);

• quota purchase schemes funded by the Shetland Fish Producers’ Organisation and by Shetland Leasing andProperty Development Ltd (SLAP), a commercial investment agency of SIC;

• the creation of Shetland Oceans Alliance (SHOAL), a partnership between SIC and the fishing industry whichserves as a think tank and lobby group for the fishing industry;

• the drafting of The Whitefish Plan – Developing a Long Term Sustainable Fishery for Shetland (2003) by SHOAL;and

• several schemes offering financial assistance to the local fishing and shellfish industries including:

– Fishing Vessel Shareholders Loan Scheme (to help purchase shares in vessels/quotas).

– First Time Shareholders Grant Scheme (grants to buy shares in vessels).

– Fishing Vessel Modernisation Scheme (matched funding to access FIFG grants).

– Fish Factory Improvement Scheme (loans to modernise processing operations).

– Shellfish Growers Loan Assistance Scheme (development of the shellfish sector).

– Shellfish Vessel Improvement Scheme (development of inshore fleet).


References78See Chapter 2, paras. 2.12-2.13, relative stability and The Hague Preferences are explained.79Scottish Fishermen’s Federation and National Federation of Fishermen’s Organisations, Zonal Management: A New Vision for Europe’s Fisheries, Aberdeen and Grimsby, 2000.80Written consultation to the Advisory Committee of Fisheries and Aquaculture on the establishment of Regional AdvisoryCouncils. Brussels, 23 July 2003.81Scottish Fishermen’s Federation, An Alternative Cod Recovery Plan: The Spatial Management Approach. Aberdeen: 2003.82MRAG, Review of the Commission proposal (COM (2003) 237 final) for a Council Regulation establishing measures for the recovery of cod stocks. A report for WWF. London: 2003).83Calculated on the basis of (length in metres x breadth in metres) + (engine power in kW x 0.45).84Hatcher, A. and Read, A., Fishing rights and structural changes in the UK fishing industry, pp 1-14 In Shotton, R. (ed). Case Studies on the Effects of Transferable Fishing Rights on Fleet Capacity and Concentration of QuotaOwnership. FAO Fisheries Technical Paper 412. Rome: FAO, 2001.85The issues that affect the UK’s use of EU Structural Funds are explained in Chapter 2.86Report of a Group of Independent Experts to Advise the European Commission on the Fourth Generation of Multi-annualGuidance Programmes (The Lasson Report), 1996. Brussels: European Commission.87Runolfsson, B. and Arnason, R. (2001). The effects of introducing transferable property rights on fleet capacityand ownership of harvesting rights in Icelandic fisheries pp 28-43 In Shotton, R. op cit.88Pascoe, S., Tingley, D. and Mardle, S. (2002). Appraisal of Alternative Policy Instruments to Regulate Fishing Capacity.Final Report. Portsmouth. CEMARE.89Symes, D. and Ridgway, S. Inshore Fisheries Regulation and Management in Scotland: Meeting the Challenge ofEnvironmental Integration, University of Hull, 2003.


8 A Sustainable Future for theIndustry

8.1 A successful fishing industry has to be profitable. It must also be sustainable if it is to provide a livelihoodfor future generations. Scotland’s fishing dependent communities contain a wealth of knowledge and experiencewhich will be invaluable to rebuilding confidence in the future of the industry.

8.2 The pelagic and shellfish sectors are currently profitable (as is the processing industry), but the whitefishsector is not. Despite successive rounds of decommissioning, parts of it are threatened with bankruptcy. Successivecuts in TAC and quota have been the immediate cause – but these cuts were not made without reason. Theevidence points clearly to declining trends in most demersal species and a critical situation in the case of cod. Thiscannot continue if the whitefish sector is to have a sustainable future.

8.3 The fundamental problem is that the level of fishing mortality for the past two decades has been too highfor the whitefish sector to be sustainable (it is over twice as high as that in the profitable pelagic sector). If appropriate steps had been taken earlier to conserve the cod stock so that fishing mortality had remained at1960s levels, current annual landings of cod from the North Sea as a whole might be of the order of 250,000tonnes. The Scottish share of this could have been worth between an extra £80 – 100 million to the industry.

8.4 This Inquiry has attempted a careful and independent evaluation of the science which underlies stockassessments and their use in setting TACs (see Chapter 4). Although there are some defects in the scientificmethods used, the conclusion is unavoidable that most whitefish stocks have been over-fished. Even haddock,where stocks are at present relatively abundant, owes this to the single 1999 year-class – recruitment insubsequent years being poor. It is therefore important to conserve this stock. We conclude that fishing effort hasbeen too high for much of the last twenty years.

8.5 European fishery scientists are not without some responsibility for the present situation. In 1997, after thebest year for cod recruitment for ten years, ICES raised the TAC and the stock was fished out in record time. Amore conservative policy on fishing effort would have meant that the recent draconian reductions in TAC andquota would have been unnecessary. But the industry cannot escape blame either. Fishing has been excessive andno reliable estimate of illegal landings is available, but informal estimates given to us in the course of our Inquiryindicate that they have been quite substantial. No policy to conserve fish stocks will work if it is socomprehensively disregarded.

8.6 We conclude that there is a reasonable prospect of recovery in cod stocks and those of other demersalspecies. However, successful recovery will require a policy that is both stable and adhered to by the industry. Itwill also require severe restraint, and for a period which cannot be predicted with certainty. Since this industry isimportant to Scotland it is essential to secure its future despite the pain that restraint is already causing. Theeconomic and social consequences facing Scotland’s fishing dependent communities are potentially serious.

8.7 Profitability and sustainability require a fleet that is both modern and matched to the available resource(conditions already fulfilled in the pelagic sector). This balance has not yet been achieved in the demersal sector,despite the substantial decommissioning that has already occurred. Unfortunately, many of the vesselsdecommissioned in the last two rounds were among the most modern. The demersal fleet must not only be of theright size, but also modern and efficient if it is to be profitable and competitive. It will be for the industry todiscuss with Ministers the further steps that are needed. Funds should be made available if any further reductionin the fleet on a voluntary basis proves necessary.

8.8 Even if there were no crisis in the demersal sector, technological progress would in due course graduallyreduce the size of the fleet that the resource can sustain. The pelagic sector illustrates this clearly. The fleet fellfrom 54 to 27 vessels over the last decade, but without any reduction in catching power. Reductions in fleet sizeinevitably reduce employment opportunities – indeed, employment in the fish catching industry has fallen by 40 per cent in the last ten years. The situation resembles that in agriculture, where the numbers employed havebeen in continuous decline over many decades.


What has Been Wrong with the Policy?8.9 One of the main faults of the CFP is that decision-making is much too centralised. It is often difficult to getagreement on important issues, and decision-making can be very slow. The cod recovery programme exemplifiesthis. Although first proposed in 2001, some key elements have still to be agreed and others are only now beingimplemented. The problem of over-centralisation will worsen as the EU enlarges in 2004 from 15 to 25 nations.Given the undoubted failings of the CFP, we doubt if the EU’s continued exclusive competence in this field iseither necessary or appropriate.

8.10 Another defect in the CFP is that it takes little account of the social and economic consequences of itsdecisions. Its action plan for this90 provides little insight into how such issues might be tackled, although it drawsattention to some of the deficiencies in information and understanding. The CFP also takes little account ofadvice from the industry. The events following the latest Fisheries Council illustrate this, when the Scottishindustry claimed that the increased haddock quota could not be caught with the area and effort restrictions thatwere also imposed. Such advice might also go some way to making the deliberations of the Council less prone topolitical pressures.

8.11 TACs and catch quotas have proved unsatisfactory as regulatory methods for the demersal sector. Discardsare inevitable where catch quotas are allocated for individual species in a mixed fishery, and although legal, theyare unacceptable especially when a resource is becoming scarce and in need of conservation. The situationbecomes exacerbated when quotas are reduced in response to declining stocks, and the consequently depressedprofitability and threats of insolvency cause marked increases in illegal landings.

8.12 There is no hard evidence that the problems faced by the Scottish industry are caused by other countries.Quotas based on relative stability give the Scottish industry by far the largest share of the North Sea stocks and agood share of those on the west coast. Other countries discard and probably land illegally, but there is noevidence that they transgress any more than our own fishermen. The problem is not Europe, or other memberstates, but a depleted fish stock. The industry will have to come to terms with this, no matter from where itsfisheries policy is managed.

What Needs to be Done Now?8.13 Decision-making must be decentralised so that it is more flexible, rapid, and takes better account of localcircumstances both in the industry and in stocks. We therefore recommend that: (1) the Regional AdvisoryCouncils must be made effective and, as they gain experience and prove their value, progress towards an overtlymanagement role; and (2) inshore waters, which within the 12 mile limit are the responsibility of the memberstate, should be managed locally wherever possible.

8.14 The demersal sector needs a regulatory system that works and gives it some sense of ownership. The bestapproach would be effort control, based on effort quotas that are tradable, coupled with gear regulations,protected areas and the ability to designate ‘real-time’ closures at short notice. Discards should be made illegal andthe fleet should land whatever it catches in the time permitted, thus removing the incentive to land illegally. Allthis would have the added benefit of making the science of stock assessment, which depends heavily on theaccuracy of landings statistics, more reliable. There would be no need to change the system for the pelagic sector,where TACs and quotas seem to be work well.

8.15 The industry should be much more involved in management, and be able to argue its case effectively withMinisters. The present gulf in understanding between scientists and the industry must be bridged, and theindustry should be more directly involved in stock assessment exercises. Also, we suggest that the FRS in Aberdeenand the SFPA be responsible to Boards on which the industry would be represented. The Minister might alsoconsider chairing a Fisheries Forum, the aim of which would be to bring the various parties together to discussissues of common concern.

8.16 The shellfish sector, although profitable, requires some investment in modernisation since many of itsvessels are old. There is also concern that the diversion of vessels from the demersal sector might undermine thecurrent balance between catching capacity and the resource.

8.17 Consortia of local interests should be formed to give closer integration to harvesting, quality assurance,processing and marketing of shellfish, in order to achieve the highest possible value from the resource.


8.18 We favour separate allocation of fishing rights for vessels of less than 10 metres, such rights not to betradable to other fleet segments. We would also like to see access limited by size (VCUs) in the inshore zone up to6 nautical miles.

8.19 Although there is no immediate crisis, the effect of modernisation and continuing technical progress willaffect employment in the shellfish sector, which is the mainstay of the fishing industry in the Western Isles. It isalso important in both Shetland and Orkney and in the many communities on the west coast of Scotland, as wellas in Fife and Berwickshire.

Remedial Measures within Scotland8.20 The industry must have constructive discussions with Ministers to agree the size of the demersal fleet andthe longer-term strategy needed for it to return to profitability and sustainability. There must be recognition onboth sides that this will inevitably lead to further loss of employment, and that there must be concerted efforts tominimise the damage this may cause to fishing dependent communities (FDCs). There is a risk that lack ofconfidence in the future viability of the harvesting sector may precipitate even stronger outflows of young well-qualified people, stimulating the familiar cycle of rural deprivation as falling populations are unable tosustain essential local services.

8.21 This is not to argue for protection of the remoter FDCs at the expense of more urban fishing centres likeFraserburgh and Peterhead, but for action which will allow areas like Shetland, Orkney, the Western Isles and partof the Highland region to retain sufficient fishing opportunities to provide the basis for viable and sustainablecoastal communities. The harbours of Caithness and Sutherland will also be affected, where the impact on jobswill be significant in relation to the small size of the local communities.

8.22 It would help the process of readjustment if those leaving the industry were made eligible for resettlementgrants. The EU’s FIFG fund makes provision for early retirement schemes and for grants of up to 10,000 euros forthose leaving the industry. This has not been used by the UK but could be of value for this purpose. If the UK hasalready committed its allocation of FIFG money in the present period that extends up to 2006, the funds shouldbe found from Scottish Executive sources.

8.23 The North-East and Shetland are both eligible for funding from the EU Structural Funds. The FIFG and theEuropean Social Fund (ESF) should be used to finance retraining and the European Regional Development Fund(ERDF) should be used to assist the funding of new businesses. Scottish Enterprise Grampian, Highlands andIslands Enterprise and Shetland Enterprise should give the highest priority to the areas affected by the problems inthe demersal sector. Elsewhere, the Western Isles and many of the fisheries dependent communities on the westcoast are also eligible for assistance from the Structural Funds.

8.24 In view of the likely decline in employment as the shellfish sector modernises, there should be a properlydeveloped plan of adaptation in these areas. As with Shetland, many of these communities, particularly theWestern Isles, are fragile economically but make a distinctive contribution to Scotland. Building a sustainablefuture for such areas is a collective responsibility. The industry, local authorities and community associationsshould all work together.

8.25 The potential of community-based investment in fishing entitlements (including the purchase of additional quotas) by local authorities and/or Producer Organisations should be fully explored to promote thesustainability of FDCs.

8.26 The problems with the fishing industry are closely connected with how it is financed. The reliance on debtfinancing is particularly unsuitable for an industry where stocks of the resource are volatile. Whenever there is adownturn, the parts of the industry most affected are threatened with insolvency. If decommissioning money isfound, it allows the banks to avoid the losses they would otherwise incur on their loans, but leaves the fishermenwith very little.

8.27 We therefore recommend that Ministers should discuss with the banks the possibility of a debt moratoriumas a way of handling the immediate crisis. Not only would this give much needed relief, but it would also be inthe banks’ interest and might well cost the Government less in the long run than a series of bankruptcies.


8.28 For the future, Ministers should consider establishing a Fishing Industry Finance Corporation, empoweredto raise equity as a way of providing more flexible finance for the industry. Ministers, together withrepresentatives of the industry, should consider the ownership structure in this industry. The system of sharedownership and owner skippers that has been a distinctive feature of the Scottish industry has many advantages.However, it may not be appropriate for the challenges of the future, where a new pelagic vessel can cost around£10 million and vessels in the other sectors with modern sophisticated equipment are also becoming veryexpensive. It is important that the Scottish industry, even if it has to reduce in size, should be modern andefficient. Only in that way can it face the challenge of a highly competitive future.

8.29 There is a good future for this industry. However, catching capacity must be matched to the resource on abasis that is sustainable. Never again must key stocks be allowed to be depleted in the way that has happened inthe demersal sector, where fishing effort has had to be cut back far below the levels that might otherwise havebeen sustained. As with agriculture, husbandry is as important as harvesting. If the right policies can now beadopted within the CFP and by Government within the UK and Scotland, the fishing industry should continue tomake an important contribution to the Scottish economy and the lives of its fishing dependent communities.

References90Communication from the Commission to the European Parliament and the Council: Action plan to counter the social,regional and economic consequences of restructuring the EU fishing industry. COM(2002) 600 final. Commission of theEuropean Communities: Brussels


Appendix 1:

Membership of the Royal Society of Edinburgh Inquiry into the Future of the Scottish Fishing Industry

Sir David Smith FRS FRSE, (Chairman) former Principal and Vice-Chancellor of Edinburgh University and former

President of Wolfson College, Oxford

Professor Ian Boyd FRSE, Director of the NERC Sea Mammal Research Unit, University of St. Andrews

Professor Stephen Buckland, Professor of Statistics and Director of the Centre for Research into Ecological and

Environmental Modelling, University of St. Andrews

Mr Edward Cunningham CBE FRSE, Chairman, Business Options Ltd

Professor Gavin McCrone CB FRSE, (Vice-Chairman) Vice-President of the Royal Society of Edinburgh and Visiting

Professor at the University of Edinburgh Management School

Dr Malcolm MacGarvin, Environmental Consultant & Company Director

Professor Alasdair McIntyre CBE FRSE, Former Chief Scientific Officer, DAFS Marine Laboratory, Aberdeen

Professor Monty Priede FRSE, Professor of Zoology, University of Aberdeen

Professor Randolph Richards, Director of the Institute of Aquaculture, University of Stirling

Mr David Symes, Reader Emeritus, University of Hull


Appendix 2:

Oral and written evidence submitted to the Inquiry and visits made

Written Evidence Received by the RSE Scottish Fishing Inquiry from:

Aberdeen City Council, Mr Andrew Stephen, Senior Business Development Executive

Aberdeen Fish Producers’ Organisation, Mr Hamish Gordon, Chief Executive

Angus Council, Mr David Valentine, Assistant Chief Executive

Buckland Foundation, Mr John Ramster, Clerk

Centre for Environment, Fisheries & Aquaculture Science, Dr P Greig-Smith, Chief Executive

Clyde Fishermen’s Association, Mr Patrick L M Stewart, Secretary

Clydesdale Bank PLC, Lord Sanderson of Bowden, Chairman

Croan Seafoods Ltd, Mr Pat Croan

Danish Institute for Fisheries Research, Mr Niels Axel Nielsen

Dawnfresh Seafoods Limited, Mr A E H Salvesen, Chairman

European Association of Fisheries Economists, Mr Philip Rodgers, President

European Commission, Mr Willem Brugge

Faroe Islands Fisheries Institute, Dr Hjalti Jakupsstovu, Director

Faroe Islands, Ministry of Fisheries and Maritime Affairs, Mr Kaj P. Mortensen, Permanent Secretary

Fisheries Committee of the European Parliament, Mr Struan Stevenson MEP, President

Fisheries Research Services, Dr Robin Cook, Chief Executive

Fishermen’s Mutual Association, Mr Bill Hughes, Manager

Highland Council, Mr George Hamilton, Fisheries Development Manager

Highland Harbours, Mr Derek Louden, Business Analyst

Highlands and Islands Enterprise, Mr Sandy Cumming, Chief Executive

Iceland, Ministry of Fisheries, Snorri Runar Palmason, Head of Department

International Committee for the Exploration of the Sea, Mr David Griffiths, General Secretary

International Fishmeal and Fish Oil Organisation, Dr. Ian H. Pike, Technical Director

Member of the European Parliament for Scotland, Mr Bill Miller MEP

Member of the European Parliament for Scotland, Mr John Purvis MEP

Member of Parliament for Angus, Mr Mike Weir MP

Member of Parliament for Banff & Buchan, Mr Alex Salmond MP

Member of Parliament for Linlithgow, Dr Tam Dalyell MP

Member of Parliament for North East Fife, Rt Hon Sir Menzies Campbell MP

Member of the Scottish Parliament for Inverness East, Nairn & Lochaber, Mr Fergus Ewing MSP

Member of the Scottish Parliament for Mid-Scotland and Fife, Mr Ted Brocklebank MSP, Fisheries Spokesperson

Member of the Scottish Parliament for North East Fife, Mr Ian Smith MSP

Member of the Scottish Parliament for Orkney, Rt Hon Jim Wallace QC MSP

Member of the Scottish Parliament for Shetland, Mr Tavish Scott MSP

Moray Council, Mr Mark Cross, Principal Planning Officer

Natural Environment Research Council, Professor John Lawton, Chief Executive

Nautilus Consultants, Tristan Southall

North Atlantic Fisheries College, Dr Lesley Ann McEvoy, Head of Marine Science & Technology

North East of Scotland Fishermen’s Organisation Ltd, Mr Mark Dougal, Chief Executive

Orkney Fisheries Association, Mr Alan A Coghill, Secretary

Peterhead Harbours, Mr Jim Patterson, Chief Executive

Royal Society for the Protection of Birds, Mr Darren Kindleysides, Marine & Coastal Policy Officer

S & J D Robertson Group, Mr J D M Robertson, Chairman

Scottish Association for Marine Science

Professor Graham Shimmield, Director

Dr John Gordon

Scottish Coastal Forum, Mr Martyn Cox, Coastal Project Officer

Scottish Enterprise, Mr David Wilson, Knowledge Management

Scottish Fishermen’s Federation, Dr Ian Duncan

Scottish Fishermen’s Organisation Limited, Mr Iain M MacSween, Chief Executive

Scottish Food and Drink Federation, Mr Steven Park, Executive

Scottish Natural Heritage, Mr Ian Jardine, Chief Executive


Scottish White Fish Producers’ Association Ltd, Mr George MacRae, Association Secretary

Sea Fish Industry Authority

Ms Hazel Curtis, Chief Economist

Mr Philip MacMullen, Marine Technology Manager

Scottish Executive Environment and Rural Affairs Department, Mr Donald Carmichael, Head of Sea Fisheries Division

Shetland Islands Council, Mr Alexander J Cluness, Convenor

The British Marine Finfish Association, Mr Richard Slaski, Executive Director

The Fishermen’s Association Limited, Mr Roderick McColl

The Royal Society, Professor Lord May of Oxford OM AC Kt PRS, President

The Scottish Parliament European and External Relations Committee

West of Four Fisheries Management Group, Mr G Hamilton, Secretary

West of Scotland Fish Producers’ Organisation Ltd, Mr Robert Stevenson, Chief Executive

Woods Hole Oceanographic Institute, Marine Policy Centre, Professor John Steele, President

WWF (Scotland), Helen McLachlan, Marine Policy Officer

Mr Peter Bruce, Skipper, Budding Rose PD4I8

Mr Graham Lebeter

Mr Ian Main

Dr Andrea Nightingale, School of Geosciences, University of Edinburgh

Mr C Noble, Pelagic crew member

Mrs Donna Polson, Fishing SOS (Shetland Branch)

Mr Rob Reid

Mr Neil Wilson

Oral Evidence heard by the RSE Scottish Fishing Inquiry from:

Aberdeen City Council, Mr Andrew Steven

Aberdeen Fish Producers’ Organisation, Mr Hamish Gordon, Chief Executive

Aberdeenshire Council, Mrs Ann Bell

Buckland Fisheries Professor, Mr John Goodlad

Clydesdale Bank plc

Mr Ron Fulton

Mr Charles Leggat

EU Commission DG Fisheries

Mr Eskild Kirkegaard, Fisheries Scientist

Mr Ken Patterson

European Commission, Mr Jorgen Holmquist, Director General – Fisheries

European Commission DG Fisheries, Research and Scientific Analysis

Mr Willem Brugge

Mr S. Bogason

Mr J. Fuchs

Mr T. Jakobsen

Mr M. Lopes dos Santos

European Parliament Fisheries Committee

Mr Struan Stevenson MEP, President

Frau Brigitte Langenhagen MEP, Vice-Chairman

Mr Ian Hudghton MEP

Ms Catherine Stihler MEP

Mr Alberto Rodas, Chef de Division

Faroe Islands Fisheries Institute, Dr Hjalti Jakupsstovu, Director

Fife Fish Producers’ Organisation Ltd, Mr James Fyall, Chief Executive

Fife Fishermen’s Association, Mr John Davidson, Committee member

Fisheries Research Services

Dr Nick Bailey, Director of the Fisheries Management Programme

Dr Doug Beare, Fisheries Survey Data Analyst

Dr Fero

Dr Alejandro Gallego

Dr Phil Kunzlik, Group Leader: Fisheries Advisor

Dr Bill Turrell, Director of the Marine Ecosystems Programme

Dr Peter Wright, Group Leader: Population Biology


Fishermen’s Mutual Association (Pittenweem) Ltd, Mr William Hughes, President

Highland and Islands Fishermen’s Association, Mr Peter Davidson, Secretary

Highland Council

Mr Richard Durram, Councillor, Environment Committee

Mr Michael Foxley, Vice-Convenor

Mr George Hamilton, Fisheries Development Manager

Mr Graeme Smith, Councillor and Chairman of Wick Harbour

Highland Harbours, Mr Tony Usher, Harbour Manager

Highlands and Islands Enterprise, Mr Iain Sutherland

International Council for the Exploration of the Sea

Dr David Griffith, General Secretary

Dr Hans Lassen, Fisheries Advisor

Dr Henrik Sparholt, Fisheries Assessment Scientist

Joint Nature Conservation Committee, Mark Tasker

Member of Parliament for Banff & Buchan, Mr Alex Salmond MP

Member of Parliament for North East Fife, Rt Hon Sir Menzies Campbell MP

Member of the Scottish Parliament for Angus, Mr Andrew Welsh MSP

Member of the Scottish Parliament for Inverness East, Nairn & Lochaber, Mr Fergus Ewing MSP

Member of the Scottish Parliament for Moray, Mrs Margaret Ewing MSP

Member of the Scottish Parliament for North East Fife, Mr Iain Smith MSP

Member of the Scottish Parliament for North East Scotland, Mr Richard Lockhead MSP, Shadow Deputy Environment

and Rural Affairs Minister

Moray Sea Foods, Mr James Eckersley, Managing Director

North Atlantic Fisheries College

Dr Sue Mars, Fishery and Sea Food Sciences Co-ordinator

Dr Lesley Ann McEvoy, Head of Marine Science & Technology

Dr Ian Napier

North East of Scotland Fishermen’s Organisation

Mr George McRay

Mr John Watt

North East Scotland Fisheries Development Partnership, Raymond Bisset, Provost

North Sea Commission Fisheries Partnership, Professor A D Hawkins, Chairman

North Sea Foods, Morrice Taylor, Managing Director

Northern Producers’ Organisation Ltd, Mr Gary Masson, Chief Executive

Scottish Association for Marine Science, Professor Graham Shimmield, Director

Scottish Enterprise Grampian, Ms Lorna Duguid, Competitive Business Manager

Scottish Executive Environment and Rural Affairs Department, Mr Paul Brady, Head of Fisheries and Rural

Development Group

Scottish Executive Environment and Rural Affairs Department, Mr Donald Carmichael, Head of Sea Fisheries Division

Scottish Fish Merchants’ Federation, Mr R H Milne, Secretary

Scottish Fisheries Protection Agency, Mr Paul Du Vivier, Chief Executive

Scottish Fishermen’s Federation, Mr Hamish Morrison, Chief Executive

Scottish Fishermen’s Organisation Limited, Mr Iain MacSween, Chief Executive

Scottish Fishing Service Association, Mr Alfred Cheyne

Scottish Netmakers’ Association, Mr William Hepburn

Scottish Pelagic Fishermen’s Association, Mr Alex West, Vice-Chairman

Scottish Ship Chandlers’ Association, Mr Scott Skinner

Scottish White Fish Producers’ Association, Mr Mark Dougald

Sea Fish Industry Authority

Mr John Rutherford, Chief Executive

Mr Philip MacMullen

Seafood Shetland

Mr Dave Hammond, Chairman

Miss Ruth Henderson, Chief Executive

Shetland Fish Processors’ Association, Mr Brian Isbister

Shetland Fishermen’s Association

Mr Hansen Black

Mr Josie Simpson


Shetland Islands Council

Mr Marvin Smith

Mr Leslie Angus

Shetland Ocean Alliance, Mr Alexander J Cluness, Convenor

Shetland Salmon Farmers’ Association, Mr David Sandison

Scottish Natural Heritage

Mr David Donnan, Senior Marine Fisheries Advisor

Mr John Thompson, Director Operations & Strategy (Western Area)

Stornoway Fishermen’s Co-operative Ltd, Mr Alex John Murray

The 10 Meter and Under Association, Mr David Tod, Chairman

The British Marine Finfish Association, Mr Richard Slaski, Executive Director

The Fishermen’s Association Limited

Mr Tom Hay, Chairman

Mr Roderick McColl, Secretary

Trawlpack, Linda Cross, Managing Director

University of Aberdeen

Dr Tara Marshall, Lecturer, School of Biological Science

Ms Beth Scott, Research Fellow, School of Biological Science

Dr Selina Stead, Director for Marine Resource Management

University of Southampton, Professor John Shepherd, Southampton Oceanography Centre

West of Four Fisheries Management Group and Orkney Fisheries Association, Mr Alan Coghill, Secretary

Western Isles Council

Mr Calum Ian Maciver, Head of Economic Development

Mr Iain Macleod, Fisheries Development Officer

Western Isles Fisheries Joint Consultative Committee

Mr Archie Campbell

Mr Neil Campbell

Mr Alexander M Macintosh

Mr Donald Macdonald

Mr Norman L Macdonald

Mr John Mackay

Mr Donald Manford

Mr Martin C Taylor

Western Isles Fishermen’s Association, Mr Duncan MacInnes, Secretary

Westside Fishermen Ltd, Mr Eddie Sinclair, Manager

Woods Hole Oceanographic Institute, Marine Policy Centre, Professor John Steele, President

WWF Scotland, Ms Helen McLachlan, Marine Policy Officer

Young’s Bluecrest Seafood Limited, Mr John Nicolson, General Manager

Professor Roger Crofts, Former Chief Executive, SNH

Mr Angus Campbell, Prawn trawl skipper

Professor Sir Neil MacCormick MEP

Mr Norman D MacLeod, Static gear skipper

Mr J H Milne, White Fish Merchants/Processor, Peterhead

Mr Iain Murray, Prawn trawl skipper

Mr John Tait, Shetland fish processor


Visits undertaken

12 June Highlands and Islands Enterprise seminar on "Fisheries-dependent communities –

what future?", Inverness

4 August Sea Fish Industry Authority, Edinburgh

11 August Committee Meeting at Aberdeenshire Area Office, Peterhead

12 August Visit to Peterhead Fish Market and Fraserburgh harbour and International Fish Canners

(Scotland) Limited, Scofish Limited Processors (Pelagic) (Fraserburgh) and Scottish

Fishermens Organisation (Fraserburgh)

29/30 September/ The Shetland Seafood Centre and the North Atlantic Fisheries College, Shetland,

1 October as well as the Island of Whalsay

1/2 October North Atlantic Conference, Shetland

8 October Committee meeting at Highland Council Office, Inverness.

Moray Firth Partnership and Association of Salmon Fishery Boards seminar on Salmon

Fisheries in the Moray Firth, Inverness.

9 October Lochinver harbour

10 October International Council for the Exploration of the Sea, Copenhagen

13 October Fishermen's Mutual Association (Pittenweem) Ltd, Pittenweem and Pittenweem Fish

Market

23 October Foundation for Science and Technology workshop on Scotland and the Common Fisheries

Policy, Edinburgh

3 November Committee Meeting at Scottish Enterprise Grampian, Aberdeen

4 November Fisheries Research Services Marine Laboratory, Aberdeen

5 November United Fishing Industry Alliance conference, Edinburgh

21 November Western Isles Council, Stornoway

10 December European Commission Fisheries Directorate and European Parliament Fisheries

Committee, Brussels


Appendix 3:

List of Recommendations

The Origins of the Common Fisheries Policy

We recommend that:

1. Ministers endeavour to have the existing 12 mile limits made permanent instead of being subject to renewal every

ten years. (para. 2.10)

2. Ministers review the arrangements for use of the Structural Funds in order to make maximum use of FIFG and the

other Funds for the economic diversification of fisheries dependent areas. (para. 2.31)

3. Ministers should reconsider their position over the EU’s exclusive competence for conservation of living marine

resources with a view to getting this deleted from the proposed EU constitution so that the principle of subsidiarity

may apply to fisheries, as it does to other matters. (para. 2.44)

Economic and Social Impact

We recommend that:

4. Ministers and the financial institutions should seek to negotiate an arrangement for debt rescheduling and

restructuring under which the demersal fleet is granted a debt service moratorium for an agreed period. (para. 3.69)

5. Ministers and the financial institutions should examine the case for establishing a Fishing Industry Finance

Corporation. (para. 3.69)

6. The Scottish Executive and the Scottish fishing industry should jointly examine the industry’s ownership structure

to establish whether a regrouping into a corporate structure would strengthen its ability to compete in the future.

(para. 3.69)

7. The SFF and other representative bodies in the catching industry should consider how they can most effectively come

together to discuss issues of stock conservation with government scientists and negotiate effectively on management

and regulatory issues. (para. 3.69)

8. Consideration should be given to early retirement schemes for fishermen wishing to leave the industry and to

resettlement grants, both of which are eligible for FIFG funding; and that the resources of HIE and the Scottish

Enterprise network as well as the EU Structural Funds be used to the maximum extent possible to help retraining and

the promotion of new small business in fisheries dependent areas. (para. 3.69)

9. The Scottish Executive Process and Marketing Scheme should be enhanced and greater effort put behind broadening

the scope of traceability and branding. (para. 3.88)

The Science of Stock Assessment and its Role in Fisheries Management

We recommend that:

10. ICES should consider new statistical approaches as alternatives to VPA for management of the fisheries, particularly

methods in which uncertainty (and hence business risk) can be quantified. (para. 4.24)

11. FRS should begin to develop methods for the use of commercial vessels to aid fishery surveys and also how accurate

recording of commercial catches can best be achieved. (para. 4.38)

12. ICES should convene a forum, to review IBTS design, fishing gear and methodology. Industry advice should be

sought, especially with respect to gear improvement, trawl operation and how best to sample hard ground. Greater

standardisation across nations should be pursued. Assuming new procedures are adopted, calibration should be

addressed. (para. 4.38)

13. The EU Commission should manage demersal stocks so that fishing mortality is much lower than over the past

15 years, aiming for a value of F<0.4 corresponding to removal of less than one third of the stock each year.

(para. 4.82)


14. ICES recommendations should aim to promote and sustain recruitment so that there is a good spread of age classes

up to 5 years old and over in demersal stocks. (para. 4.82)

15. The current TAC of 27,300t for cod in the North Sea should be used as the starting point for a recovery programme

and should be fixed until Bpa (the safe minimum spawning stock biomass) of 150,000t is attained. (para. 4.82)

16. The by-catch of cod in other fisheries should be minimised by ensuring the use of species selective fishing gears; TACs

should be supplemented by limits on effort and designation of closed areas. (para. 4.82)

17. Demersal stocks should be managed as a mixed fishery with a single overall limit on effort and no discarding,

coupled with measures such as selective gears, protected areas and real-time temporary closures to prevent

over-exploitation of individual species and immature fish. After the cod recovery programme, TACs should be

retained only to guide regulation of effort and to ensure relative stability. (para. 4.82)

18. Ministers should aim to restore haddock landings from the North Sea to the long-term average of 250,000t, given the

importance of this stock to the Scottish demersal fisheries. (para. 4.88)

19. FRS and ICES should urgently seek a valid method for assessing whiting in the North Sea and the EU Commission

should initiate a whiting recovery programme. (para. 4.93)

20. Monkfish around Scotland should be managed through limitations on demersal sector effort rather than catch

quotas. (para. 4.96)

21. The EU Commission and Scottish Ministers should ensure Nephrops fishermen adopt selective gears that do not

capture whitefish. Management should be vigilant against diversion of effort from the whitefish sector into Nephrops.(para. 4.101)

22. The EU Commission should ensure the industrial fishery TAC should be decreased below the recent reported landings

and take account of interannual variation in abundance of sandeels (para. 4.117)

23. FRS should direct research at the potential ecosystem effects of the industrial fishery. (para. 4.117)

24. The Commission should recognise the vulnerability of deep-sea species and seek to regulate this fishery by effort

control as recommended by ACFM. (para. 4.121)

Fisheries and the Environment

We recommend that:

25. The Scottish Executive should consider some form of Environmental Impact Assessment for new ventures by the

fishing industry. (para. 5.6)

26. The Scottish Executive and the relevant funding bodies should provide increased investment in the science required

to understand the marine ecosystem and to develop realistic models. (para. 5.6)

27. The Scottish Executive should ensure that forums (e.g. RACs and inshore management committees) established for

regional fisheries management should be tasked with helping to implement environmental policy relevant to their

region. This would include the establishment of marine protected areas. (para. 5.12)

The Role of Aquaculture

We recommend that:

28. Further research should be carried out into the substitution of fish oil in farmed fish diets with plant oil as a means of

promoting sustainability of industrial fisheries. (para. 6.29)

29. Scottish Ministers should consider how research with ‘new species’ such as cod can be supported to enable the

diversification of Scottish aquaculture production. (para. 6.29)


Managing Scotland’s Fisheries for Sustainable Development

We recommend that:

30. Ministers should press the EU Commission to set a timescale for a review of the RACs so that the transfer of some

management responsibilities to them can be considered. The fishing industry should seize the opportunities

presented by RACs to demonstrate a responsible role in fisheries management. (para. 7.18)

31. The UK fisheries departments, in collaboration with the fishing industries, should undertake a wide ranging review of

the existing system of quota management having regard to the state’s responsibilities for the conservation and

management of the fisheries, on the one hand, and the financial viability of the industry, on the other. (para. 7.54)

32. The EU Commission should replace the present system of catch quotas for the demersal sector and Nephrops trawl

fisheries with effort control (days at sea) and closed areas. The present system of catch quotas would, however,

continue for the pelagic sector. (para. 7.62)

33. The EU Commission should phase in this new system over the lifetime of the cod recovery plan; during this time the

current system of catch quotas should continue alongside the evolving effort control system. Thereafter TACs should

be set only as guidelines for these sectors. (para. 7.62)

34. Scottish Ministers should establish inshore management committees on a local scale, led by the industry, and should

follow an integrated approach to fisheries and the environment. (para. 7.70)

35. Scottish Ministers should seek to bridge the gulf between fishermen and scientists and should also consider

our alternative proposals for restructuring the institutional arrangements for fisheries management as set out in

Chapter 7. (para. 7.88)


Appendix 4:

An Overview of the Demersal Scottish Fisheries

Introduction

Reports of landings at different ports do not make it clear from where the Scottish fisheries derived their wealth.

The purpose of this appendix is to analyse the top five demersal species, cod, haddock, whiting, monkfish and Nephrops

in terms of the origin of landings from the three main ICES zones around Scotland: Subarea IV- North Sea, Division VIa

West of Scotland, and Division VIIa Irish Sea. Nephrops is included since it is mainly captured by trawls that also catch the

whitefish species. This analysis is based on abstraction of Scottish data from ICES ACFM data (October 2003) and

co-operative research reports.

Long term averages have been calculated for each stock based on the full ICES time-series for each stock. Thus for cod in

the North Sea this covers 1963-2003, whereas for other stocks, such as Irish Sea haddock and Nephrops, the data series

only goes back to 1993. The results do not therefore represent a real set of landings that may have occurred in any one

year. The analysis, however, does give an overview of the general importance of different species to the Scottish economy.

Landings have been converted to relative values using the following indices: cod=100, haddock=63 , whiting=48,

monkfish=177, Nephrops=187, based on 2001 prices. (The index for Nephrops was inferred from total landings and total

earnings in 2001).

Different Nephrops grounds are defined as Functional Units for purposes of management and only the FUs relevant to

Scotland have been analysed. Unfortunately ICES does not separate Scottish landings of Nephrops, but it is assumed that

in the Irish Sea the UK landings are by Northern Ireland, England and Wales, but there may be a small Scottish

component. On the Fladen ground it is assumed that UK landings are Scottish; the only other country fishing there

regularly is Denmark which takes less than 3%. Scottish boats also visit the Norwegian deep but their take is less than 5%

of the fishery dominated by Norway and Denmark. For all species, Scottish boats also visit the Rockall area, but since

quantities are small this has not been included in this analysis. Saithe are not included since Scottish landings are small

and similarly other minor species, flatfish etc., are excluded.

Scottish average landings off the west coast are 35,000t (Figure 1) dominated by Nephrops. Landings from the East coast

are ca. 10 times greater and are dominated by haddock, followed by cod (Figure 2). The Irish Sea makes only a small

contribution to Scottish fisheries of 560t per annum. The North Sea provides 90% of Scottish demersal fish landings

(Figure 4). Over 60% of long term average landings are haddock (Figure 5). In the North Sea and off the West Coast,

Scotland takes a large share of the total landings (Table 1):

Table 1. Scottish share of long term average landings (by weight)

Cod Haddock Whiting Monkfish *Nephrops

North Sea 34% 74% 50% 72% 100%

West of Scotland 49% 54% 65% 44% 100%

Irish Sea 3% 4% 2% 0% 0%

*Only Nephrops grounds fished by Scottish boats are included in this analysis.

Transforming these figures into monetary values, a clear contrast between east and west coast emerges. Off the west coast

over 50% of value is accounted for by Nephrops (Figure 6), whereas in the North Sea over 50% of value is in haddock

(Figure 7). In the Irish Sea, cod makes the largest contribution (Figure 8). The high value of Nephrops increases the

importance of the West Coast to 15% of long term average value (Figure 9). Haddock followed by cod are the two most

important species by value to the Scottish fleet (Figure 10).


Long Term Average Annual Landings

Figure 1: Area VIa West Coast Figure 2: Area IV North Sea

Figure 3: Area VIIa Irish Sea Figure 4: Scottish Landings by Area

Figure 5: Long Term Average Scottish Landings 325,000t


35,000t

20%

25%

16%

7%

32%

Cod

Haddock

Whiting

Monkfish

Nephrops

290,000t

23%

65%

5%

4%3%

Cod

Haddock

Whiting

MonkfishNephrops

Irish Sea 560t

45%

18%

37%

Cod

Haddock

Whiting

89%

11%0%

North Sea

West CoastIrish Sea

22%

62%

6%

4%6%

Cod

Haddock

Whiting

MonkfishNephrops

Long Term Average Value

Figure 6: Value of West Coast Landings Figure 7: Value of North Sea Landings

Figure 8: Value of Irish Sea Landings Figure 9: Value of Scottish Landings

Figure 10: Average Value of Total Scottish Demersal Landings


17%

14%

7%

10%

52%

Cod

Haddock

Whiting

Monkfish

Nephrops

29%

53%

3%

9%

6%

Cod

Haddock

Whiting

Monkfish

Nephrops

61%15%

24%

CodHaddock

Whiting

85% North Sea

West Coast 15%0% Irish Sea

27% Cod

46% Haddock

Whiting 4%

Monkfish 10%

Nephrops 13%

2001-2002

The balance between different fisheries has clearly changed in recent years. Total North Sea landings in 2002 have

declined to 83,000t and haddock is now less than 50% of this (Figure 12). West Coast landings were 24,000t and are

dominated by Nephrops (Figure 11). The Irish Sea has declined to 143t (Figure 13). (NB: for some species/areas, data for

2002 are not yet available; in these cases 2001 figures were used). The west coast has increased in relative importance

(Figure14). Nephrops has increased to overtake cod as the second most important species to Scottish demersal boats

(Figure 15).

Translating the 2001/2 species into values, Nephrops accounts for 85% of the value of west coast demersal fisheries

(Figure 16) and is almost equal to cod in the North Sea (Figure 17). With the high value of Nephrops, the west coast now

accounts for 34% of value of Scottish demersal landings (Figure 19) and is now the most valuable species (Figure 20).

Monkfish has overtaken cod in the species rankings.

Analysis 2001/2001

Figure 11: West Coast Landings (24,000t) Figure 12: North Sea Landings (83,000t)

Figure 13: 2002 Irish Sea Landing (143t) Figure 14: 2001/2 Scottish Demersal Landings (110,000t)

Figure 15: Total Scottish Demersal Landings (110,000t)


6% Cod5% Haddock

7% Whiting

6% Monkfish

Nephrops 76%

19% Cod

47% Haddock

Whiting 13%

Monkfish 12%

Nephrops 9%

22% Cod

Haddock 61%

Whiting 17%

78% North Sea

0% Irish Sea

West Coast 22%

16% Cod

38% Haddock

Whiting 11%

Monkfish 11%

Nephrops 24%

Figure 16: 2001/2 Value of West Coast Landings Figure 17: 2001/2 Value of North Sea Landings

Figure 18: 2001/2 Value of Irish Sea Landings Figure 19: 2001/2 Scottish Demersal Value

Figure 20: 2001/2 Scottish Landings by Value


4% Cod

2% Haddock

2% Whiting

7% Monkfish

Nephrops 85%

20% Cod

32% Haddock

Whiting 7%

Monkfish 23%

Nephrops 18%

33% Cod

Haddock 55%

Whiting 12%

66% North Sea

West Coast 34%

0% Irish Sea

15% Cod

22% Haddock

5% Whiting

Monkfish 17%

Nephrops 41%

Appendix 5:

FRS Sampling between 1997 and 2003


Appendix 6:

FRS Sampling Results for cod, haddock and whiting between 1997 and 2003

Cod (Total number of fish caught of all year-classes aged 1 and older)


1997 1998 1999 2000

2001 2002 2003

Log Scale/Linear Scale

86431

298122361492747

3


Haddock (Total number of fish caught of all year-classes aged 1 and older)

1997 1998 1999 2000

2001 2002 2003


1411841

15135981135199796800378401

3

Whiting (Total number of fish caught of all year-classes aged 1 and older)


1997 1998 1999 2000

2001 2002 2003


1411852

806130604600403069201539

9

Appendix 7:

ICES International Bottom Trawl Survey (IBTS) Sampling Area andsampling points between 1997 and 2000

Sampling by IBTS between 1997 and 2000


Appendix 8:

ICES IBTS survey

Total numbers of cod caught at age, by year


1997 Age=0 1997 Age=1 1997 Age=2 1997 Age=3 1997 Age=4 1997 Age=5




9.02.5

–4.0

81034052

0

Total numbers of haddock caught at age, by year






11.03.5

–4.0

5967429937

0

Total numbers of whiting caught at age, by year






124

–4

16275581378

0

Designed and typeset by McKinstrie Wilde, Edinburgh. Printed by Allander, Edinburgh.

Copies of this report, and of the report summary are available from the Royal Society of Edinburgh or on its website (www.royalsoced.org.uk).

For further information, please contact Dr Marc Rands, Policy Officer:

22-26 George Street, Edinburgh EH2 2PQ

Tel: 0131 240 5000Email: [email protected]

ISBN: 0 902198 09 2 ©2004 The Royal Society of Edinburgh

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