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The Economic Impact of Algal Toxin Closures on Shellfish Dependent Communities on the Scottish Coast and Implications for the Sector's Future Structure

3 RESPONSE TO THE SCALLOP BANS

3.1 INTRODUCTION AND HISTORY OF CLOSURES AROUND SCOTLAND

This Chapter reviews the range of responses by the industry and associated sectors to the bans on scallop fishing. This analysis is based on published data, the consultations undertaken as well as a review of previous analyses of the impacts of the bans.

The majority of the closures around the Scottish coast have been caused by the presence of ASP toxins. The majority of these closures have been on the West Coast, around Orkney and within the Moray Firth area. The extent and intensity of the bans are represented in Maps 1 - 7 which report the closures over the period 1997 to end-March 2002. The final map shows those areas that were closed as at end-March 2002.

The first closures occurred in 1997 for a limited period around Orkney. In 1998 more intensive closures occurred to the east of Orkney lasting between 200 and 300 days. However, it was during 1999 that extensive harvesting bans were applied around the Scottish Coast, with the West Coast of Scotland from Cape Wrath down to the Northern Irish Coast severely affected in terms of both the area covered by the bans and the length of the bans. The area from Orkney down through the Moray Firth was also affected although these closures were less extensive and in force for a much shorter duration than occurred on the West Coast.

Some of the closures on the West Coast lasted from September 1999 through to the end of May 2000. In some cases areas were only open for two months before being closed again in August 2000. Despite this, the extent and duration of the bans were less than in 1999 with areas around Orkney and along the West Coast being most affected but with the number of days that areas were closed often being only half that of 1999.

During 2001, while the geographic extent of closures further reduced with only 35 boxes being affected compared to 43 in 2000 and 66 in 1999 the intensity (i.e. number of days closed) of the ban increased in a number of areas. The evidence for 2002 (to end-March) shows further reductions with only 18 boxes having been affected so far and currently bans are in operation in only six boxes.

The evidence to date therefore suggests that the intensity and spread of ASP was dramatic and very rapid, but since its height in 1999 there has been a clear downward trend to the current situation, barring any further flair up this year, perhaps reflecting something more akin to 'normal' levels of impact of ASP. However this conclusion is tentative until a longer period without further outbreaks is observed.

3.2 POTENTIAL RESPONSES TO CLOSURE

The ways in which the different segments of the scallop harvesting sector respond to the closures will interact to create potentially complex results. For example, the fishing of inshore areas by dredgers previously favoured by divers is likely to both create conflict and the depletion, perhaps long-term, of scallop resources in certain areas. Because the divers are restricted in the areas they harvest, such an impact is likely to have consequences for the future viability of the affected divers ¹.

Each of the participants in the sector has a number of possible options available to them. For vessels, and to a lesser degree divers, there are a limited number of responses to closure of the scallops fisheries. These include:

• Stop fishing;

• Fish in other areas; and/or

• Fish for other species.

These responses are not mutually exclusive and may be either temporary or permanent responses. The first option will have a direct impact on the sector in terms of employment and income as well as knock-on effects on suppliers and their customers, whether processors or final users.

If vessels move to other areas to fish they will compete with 'local' vessels and, depending on the area, with divers ². Increased activity could potentially conflict with any attempts at stock management and at the very least will put pressure on unaffected areas perhaps compromising the longer-term sustainability of the fishery.

Investment in vessels is significant and the dredging equipment used cannot easily be used for other fisheries. Previous research by Ekos ³ suggests that the cost of gear to allow vessels to switch to nephrops is in the region of 9,000. Unless the vessel already has this dual capability, as is the case in Mallaig for example, where of the 20 Mallaig and North West Fishermen's Association member vessels involved in scalloping (1999), 16 of them are also involved in nephrops, then to a large degree the long-term viability of vessels relies on being able to return to sufficiently high levels of scallop fishing. In addition, the ability of vessels to switch to other species will also depend on whether they have the appropriate licence and the quota to do so ⁴.

In addition, the move to a prawn fishery places greater pressure on these stocks which already face quota-related difficulties. The increased effort in prawns will also reduce the grossings of vessels already involved full-time in the fishery.

Divers face similar choices although their room for manoeuvre in terms of fishing in other areas is restricted, not least because they operate from small vessels and RIBs that would be unsuitable for fishing further offshore or in travelling to other open grounds. In addition, if divers were to move to other areas they would face additional costs including, for example, accommodation and storage costs. Divers also tend to have other sources of income, including part time work on fish farms, and so could not easily leave their home areas for diving for scallops.

Scallop farmers have similar options in the long run but they do not readily have the option of switching to other species. The fixed nature of farmers' capital input constrains their response in the short run to delaying harvesting until their stocks are clear of the toxin. Although the stock in hand is not lost, a closure imposes the serious and potentially terminal risk of creating cash flow difficulties. In this case the key issue is one of funding the scallop farmers' cash flows until they were able to re-present stock to the market. However, there will be longer-term issues in timing and extent of restocking. Effectively the farmers would suffer a loss proportionate to the delay in harvesting and any reduction in price if the actual or perceived quality of their produce were consequently reduced. In addition, there are longer-term consequences for the viability of the sector if consumer preferences are adversely affected. Whatever happens to the farmers will also impact on the divers, many of whom rely on part time work with the farmers.

Finally, processors have the choice of either establishing new supply sources from elsewhere in Scotland, UK and abroad or reducing their level of activity. Security of supply is an issue for processors and they will often buy all they can from regular suppliers even if this is excess to their requirements just to ensure that the vessel continues to supply them. It is uncertain whether processors contracting with new suppliers will have a longer-term negative impact on Scottish vessels.

In summary, the choices facing the different parts of the industry vary. For vessels these include moving to other areas, targeting other species, or laying-up (permanently or temporarily). For divers the options include moving to other areas or leaving the industry. For farmers they include accepting the loss of sales or closing. For processors they include reducing the scale of operations, sourcing from elsewhere in Scotland, the UK, or perhaps abroad, or closing.

3.3 FISHERMEN RESPONSE TO CLOSURE

Table 3.1 presents data for the years 1997 to 2000 on the location and landings into Scotland of all Scottish vessels of 10m and over registered length and shows that there have been few changes in the general numbers of vessels involved in the fishery.

¹ These vessels may also have landed whitefish or nephrops

Source: SEERAD

Only about two-thirds of active vessels licensed to fish scallops actually did so. The remainder did not use their entitlement but fished for whitefish or nephrops instead. Most vessels landing scallops or queenies landed only king scallops but between 20 and 28 fished for both scallops and queenies and a few landed only queenies. (Many of these vessels may also have landed whitefish or nephrops at some time during the year. For example, 20 of the 34 vessels landing queenies did so.)

Table 3.2 reports the annual percentage change in these vessel numbers.

¹ These percentage changes are based on very small vessel numbers and thus very small changes in vessel numbers results in a very high proportionate change.

Source: SEERAD

This data suggests that between 1997 and 1998 there was growth in the number of vessels both licensed to fish for scallops and actually landing king scallops. There was a decline of 14.3% in vessels landing only queenies but this actually translates into one less vessel. The change into 1999 is more revealing and appears to reflect the extended coverage and intensity of fishing bans around the coast of Scotland. Specifically, there was a 10.3% decline in vessels landing only king scallops and a further 12.3% decline between 1999 and 2000 reflecting the continuation of the bans into the early part of 2000. Interestingly, the number of vessels licensed to fish for scallops did not fall until 2000 when it was still almost 1% greater than the level for 1998.

The data was analysed to ascertain whether and how the sector responded to the widespread closures of the scallop fisheries in 1999 compared to 1998 (used as a benchmark when the closures were much fewer in area, duration and frequency).

Hence the objective was to determine whether vessels:

• Left the fishery;

• Were sold and continued in the fishery;

• Moved area by chasing the open grounds; or

• Switched to fishing for other species.

Table 3.3 reports the activity of vessels and suggests that there was no immediate large decline in the number of vessels, 10 metres and over, actually prosecuting the fishery (as opposed to holding a licence). There only appears to have been some switching between supporting activities.

Source: SEERAD (Compared to Table 3.1, less vessels are identified because only those vessels landing more than 1 tonne p.a. are recorded)

Table 3.3 reflects the apparent discreteness of the scallop fishery and the barriers to entry to other fishing activities built by the quota and licencing systems, their associated costs to vessels, and the cost of learning new techniques. It may also suggest that there were sufficient grounds open for the stocks to sustain vessels at their current levels, at least in the short run.

Analysis of the base districts reported for the vessels and shown in Table 3.4 indicates whether vessels may have been sold. While within the data there are a several vessels which changed their base district and almost all continued to fish for scallops, there does not appear, intuitively, to have been the inordinately high change in numbers that would have suggested a flight of capital from the fishery. Such changes as there have been have tended to cancel each other out.

Source: SEERAD

Figures 1a and 1b show base districts declared by percentage of vessels. A comparison of the two Figures does not indicate any significant move away from particular ports except perhaps the minor ones. In addition, the distribution of the base ports around the length of the Scottish coast persisted.

Figure 1a: Base Districts of Scottish Vessels >10m, 1998

Figure 1b: Base Districts of Scottish Vessels >10m, 1999

Given that the cost of fuel is an important single component of costs faced by fishing vessels in general, including scallopers, for whom it represents around 7% of grossings, vessels may be expected to minimise their costs by landing into the nearest port. This assertion may be less true for scallopers who tend to supply specific processors. However, a shift in area might appear as an increase in the average number of landing ports used per vessel. For 1998, the average number of landing districts reported per vessel was 2.45 and for 1999, 2.46. This suggests that either vessels tied up during closures with the implication that has for fixed costs and profitability, or they extended their range of travelling, which has implications for variable costs and profitability.

Thus the data rule out a widespread departure from the fishery and where there were sales of vessels others appear to have been willing to take them over. Similarly, it appears that there has been no shift in the base location of the fleet though it may well have been fishing in a different pattern dictated in part by the closures.

It is suspected that these figures do not reveal the true extent of the impact on the catching sector and consequentially on the downstream sectors. Most business enterprises faced with unfavourable trading conditions will soldier on, despite making losses, for as long as they can in order to preserve their trading links, sources of supply and customer goodwill, until times improve.

In this respect fishing enterprises are no different from others and as a rough general rule they appear to be able to run with losses for about two years before their position becomes untenable in large numbers. Thus the impact of the 1999 closures would not be expected to show significantly until the 2001 figures. The amelioration of the difficulties in subsequent years will have staved off the most damaging results for all but the more marginal enterprises without allowing them any recovery of strength, but nevertheless will have left most enterprises in a precarious position should they have to face another year like 1999.

Although there are more than 200 Scottish vessels licensed to fish for scallops in UK waters, in practice only about 135 do so. The Scallop Association represents about 70 vessels, 65 of these are vessels of 10m and over overall length and the remaining 5 are under 10m vessels. The larger vessels represent an itinerant fleet which moves its fishing location according to the fishing opportunities, fishing anything up to 200 miles off the coast, while the smaller vessels are more restricted both by the absence of living accommodation aboard and by safety factors.

Some vessels are dedicated to scallop fishing while others fish for nephrops during the summer. For example, the vessels from Mull, which is the hub of the West coast fishery with small vessels, small processors, divers and farmers, fish only for scallops.

Vessels prevented from fishing for scallops have turned to fishing for nephrops if they have a licence to do so, and if they have quota. A TAC and national quota is set for nephrops by the EU. The UK nephrops quotas for 2001 totalled 30,680 tonnes, 13,410 tonnes for ICES Areas IIa and IV, 11,070 tonnes for Areas Vb and VI, and 6,200 tonnes for Area VII. The comparable figures for 2002 are 14,398, 11,072, and 5,836, totalling 31,306.

There is no TAC or quota imposed by the EU or UK on either King Scallops or Queenies. The Queenies fishery is small with landings in Scotland worth only 1.77m in 2000 compared to the King Scallop fishery which had landings of 13.93m. This understates the importance of the industry in that several Scottish vessels fish off the SW coast of England and land there, but nevertheless earn profits and crew share for the Scottish economy. Total landings by Scottish vessels were 15.56m for scallops and 1.81m for queenies.

In the face of closures, vessels may lay up, fish for scallops elsewhere or fish for another species.

Laying up has cost implications in that the fixed costs of the vessel continue to have to be met. These include basic maintenance, mooring fees, and repayments on loans and ship mortgages. Thus laying up is by definition a loss-making strategy. Based on one example in 1999 the losses to vessels tied-up appeared to be in the region of 12,000 per month although this figure can really only be taken as indicative of the situation today.

If however, the variable costs of fishing are not met by grossings then laying up will be a loss minimising strategy. It does not appear that this is a strategy that has been followed where the vessel has been capable, by virtue of size and location, of moving to open grounds. Thus it has been restricted as a strategic response to the smallest vessels.

Moving elsewhere is not necessarily an easy solution, however, as it has both cost and conservation implications. There are two principal costs. First, the fuel costs and loss of fishing time associated with travelling further afield. Secondly, the effect of having to learn the fishing characteristics of unfamiliar grounds. Both of these are potentially significant.

Closing a sea area to scallop fishing can be expected to have specific behavioural responses observed from time to time elsewhere. Open areas face increased fishing pressure. As the closures become more extensive so the pressure on open areas becomes more intense leading to undesirable effects on the future of the fishery arising from over-fishing and damage to the habitat.

In the closed areas, however, the stock may continue to grow thus creating a more than usually valuable fishery in the area if the closure is of sufficient duration. When the area re-opens this invites not only vessels displaced from closed areas but also extra fishing activity attracted by the enhanced quality and scale of the fishing. The effect on stock conservation for the future of the fishery is thus potentially disastrous as the apparent equilibrium is seriously disturbed.

While vessel owners can react to the economic implications of increased costs, they can do little individually to reduce overfishing for the same reasons that permit overfishing in other fisheries. This makes it difficult for the amount of fishing to be controlled in a crisis.

The consultation with industry representatives suggest that such behaviour has occurred as a result of vessels being displaced from closed grounds although there is some question as to whether there have been noticeable increases in the stocks in the closed areas during the closures. It might have been expected that the scallops would have been allowed to grow during the closures only to provide a better harvest when the fishery was re-opened. However, the length of some closures has been insufficient for a noticeable increase in size of individual shellfish, which have done most of their growing by the time they reach the minimum landing size of 100mm for the UK, except for 110mm for scallops from the Irish Sea (ICES sub-area VIIa). Both these impressions are supported by the landings figures for scallops for 1998 to 2000. The decline in each year after 1998 suggests that the closures reduced fishing rather than created an incentive to increase activity by virtue of larger stocks. It also suggests that fisheries which were open sustained some damage due to over-fishing which reduced the potential for future landings. There is some fear that the damage may be, if not permanent, at least long-lasting as the ground may be damaged.

Although overall levels of landings declined there was a clear shift in 1999 to landings on the East Coast, as the West was closed and a shift back towards the West Coast in 2000 as the bans became less extensive. In addition, evidence from 1999 suggest that vessels from Mull tended to move southwards to other grounds, initially in the Clyde and then into the Irish Sea, with landings being made into ports on the Cumbrian coast. In the past the Orkney vessels, which tend to be of a smaller length than others in the Highlands and Islands, have been constrained in where they could fish as an alternative and there was a greater likelihood of vessels having to tie-up.

It is normal for several Scottish vessels seasonally to work the English Channel but ASP forced more vessels to fishing there. However, this strategy does not necessarily provide the same returns. Returns for some of these vessels were poorer because of unsuitability of the vessels and a lack of knowledge of the grounds. It does not appear that all fishermen can simply move to other waters or other species and be confident that the same levels of return will be made.

Tables 3.5 and 3.6 analyse the volume, value and broad location of landings by Scottish vessels in Scotland and into the rest of the UK. As noted above, one strategy to fishing bans is to move elsewhere to fish and there is evidence from this data that in 1999 and 2000, in particular, this was the strategy adopted by a part of the sector.

Scottish vessels landed over 21% less scallops by weight and 11% less by value into the UK in 1999 compared to 1998. The reductions were higher for landings into Scotland (23.3% by volume) compared to landings by Scottish vessels in the rest of the UK (7.2% reduction). Scottish landings into the rest of the UK as a percentage of all Scottish landings into the UK was 13% in 1999 compared to 11% in 1998. This suggests that although there was relatively more effort put into fishing elsewhere in the UK the volume of landings still fell. Another indicator of increased effort by Scottish vessels outside of Scottish waters is revealed in the number of districts in the rest of the UK that reported Scottish landings. These stood at 15 Districts in 1998 rising to 16 in 1999. Overall this evidence suggests that although the intensity and extent of the bans were worse in 1999 the sector did not seem to respond by increasing their effort elsewhere. Alternatively, the sector did try but was not particularly successful in new waters.

This picture changes in 2000 when the volume and value of landings by Scottish boats into Scotland was still in decline (by 5% in volume terms and 4% in value terms) but there was a significantly greater effort by Scottish vessels in rest of UK areas with volumes landed by Scottish vessels in the rest of the UK increasing by 26% and values growing by over 45%. At the same time the number of Districts reporting landings by Scottish vessels increased from 16 in 1999 to 27. Similarly in 2001 there was a further increase in activity by Scottish vessels in rest of UK areas with landings of scallops worth over 4.5m, more than double the value in 1998 and 1999.

1. Lower implied price in 2001 reflects the balance shifting from king to queen scallops and thus reducing the implied average price per tonne.

Many vessels hold scallop licences but do not use them, despite this fishery being untrammelled by quotas. This suggests that the fishery is operating at an economic equilibrium (which need not imply a permanent conservation equilibrium with steady stocks). For those vessels which fish for other species for some part of the year, or for those people for whom fishing is a part-time activity, it may be that scalloping provides the marginal return that keeps both activities viable. As such the implications of a loss of scalloping will be more severe that the size of the fishery suggests.

There are now reported ⁵ to be some 150-200 divers compared to 300 or so only a few years ago. In Orkney the numbers have dropped from 60 to around 20. The divers have been the first to leave the industry as they have a low level of investment and are often part-timers with incomes from other sources. Often they have moved away from the area.

Certainly there is anecdotal evidence to support this with a number of divers in the Mull area moving away over the past two years and examples of existing diver operations scaling down to smaller vessels that support less divers. Similarly, in the Western Isles, divers have had to sell their product to processors rather than direct to the live market where higher prices would have been paid.

However, they have benefited from the shucking operation as they would have had no return for their product had the fishery been completely closed. Shucking, retrieval of the white meat and roe from the discarded shell and offal, has been permitted in some cases where provision of the entire shellfish has been prohibited. This is because, when the shellfish is affected by toxins, the white meat and roe are generally less toxic than the offal.

3.4 SURVEY OF FISHERMEN

Nine fishermen/skippers were interviewed by telephone. The respondents were based from Orkney to Campbeltown. Vessel sizes ranged from 12m to 26m with anywhere between 10 and 20 dredges. Crews ranged from 3 on the smaller boats to a minimum of 5 on the larger boats. Most of the vessels had a crew of 3 or 4. Larger boats seemed to be more likely to be dedicated to scallops whereas a number of the smaller boats also fished for prawns. In general scallops were essential to the viability of the vessel providing a steady income over winter.

The fishermen responded to the bans by either spending more time at sea travelling around trying to find open fishing areas or by switching species if they had the necessary licences. In general, the larger the vessel the further afield they were able to go. In some areas, smaller vessels were not able to travel too far afield and then when their areas were re-opened they were overrun with stranger vessels who effectively 'hammered' the grounds.

Estimates of reductions in earnings associated with the bans varied from 15% to 30% depending on whether they were able to recoup some of their losses by fishing for other species. It was also suggested that the larger vessels, in particular, were able to maintain their earnings by being able to travel further afield and because they would be fishing 24 hours a day, seven days a week.

While there was evidence of a number of vessels either switching to other species or leaving the sector, in general, the bans affected crews through reduced earnings rather than unemployment.

Although imposing the bans allowed a number of areas to increase their stock, when the bans were lifted the general view was that the grounds would attract 30-40 boats and be subjected to 'saturation' fishing that effectively destroyed the stock. In part this was because the boxes were being opened one at a time and therefore became the focus for fishing effort. A number of areas were described as being fragile with little evidence of younger scallops developing.

In terms of tiered testing the general view was that fishing for the whole scallop and white meat with roe were viable. However it was believed that a white meat only fishery would not be viable for the majority of vessels - only the very largest commercial boats would be viable. Basically the product loses around 30% of its value without the roe. Therefore to maintain the viability of the vessel would either require a 30% reduction in crew costs or a 30% increase in effort. It was felt that increasing the effort by 30% was not viable and would certainly put pressure on the stocks. Where possible (i.e. where the boat had the appropriate licence) white meat would be pursued but in conjunction with a greater effort on prawns. Obviously with a total ban vessels would either have to switch species or tie-up.

Finally, there were a number of views expressed about the desirability for introducing some form of stock conservation and management. This is especially important for the smaller vessels that fish 4/5 days a week in local waters and would be essential for the long term sustainability of local fishermen and small local communities.

3.5 PROCESSORS RESPONSE TO CLOSURE⁶

The reaction of processors to the closures has been mixed. Some of the smaller processors have been forced to close as their supplies have stopped. This has particularly been the case among the very small vertically integrated operations where the enterprise processed its own catch. For many, scallops provide only a relatively small proportion of their output and they have relied on their other products, especially crabs, to keep them going. They have not been able completely to transfer labour and other inputs into other species and so there have been job losses on a small if widespread scale and some loss of output in individual processors.

Larger processors have been able to source supplies from elsewhere, especially from the south-west of England, but one processor reported that while he had continued to be able to find supplies the situation had forced him to maintain links with more suppliers than he felt desirable, imposing lower than ideal sizes of shipment from each.

The largest processors have managed to maintain production, if at lower levels, by importing supplies particularly from France.

¹ Average 1998-2000

Source: SFIA

The foreign trade figures for scallops set out in Table 3.7 reflect clearly what has occurred. In 1998 the number of closures was relatively limited, but the extensive closures during 1999 led to a doubling of the quantity of imports. These subsequently declined, although to levels still some 27% higher than imports in 1998, as the number and duration of closures decreased in 2000.

However, it appears that the quantity of exports continued to rise throughout the period. The slight increase, only some 2%, in 1999 over the previous year appears to reflect the impact of the closures including the loss of the farmed production. Given the increase in exports of more than 20% from 1998 to 2000 a greater increase in 1999 might have been expected if the export market were growing smoothly. Further, if exports were held back in 1999, it is unlikely that the damage done would have been completely overcome within a year, and so the year 2000 figure may also still be reflecting some depression. The fact that the export market continued to grow despite the decline in Scottish landings and the shortfall for domestic processors is another indication that fresh Scottish-caught scallops are a premium product.

The deterioration in the balance of trade figures reflect a world decline in scallop prices of 10% in 1999 and 6% in 2000. The decline in prices experienced by UK exports was even greater at 14% in 1999 and 11% in 2000 perhaps showing some loss of confidence in the UK product.

While the values given in Table 3.7 have been affected by price movements and foreign exchange fluctuations it is reasonable to conclude that the Scottish balance of external trade has worsened. Applying the mean value of the three-year period 1998 to 2000 suggests that the balance deteriorated by about 5m in 1999 as a result of the problems to supply caused by algal toxins. There appear to have been continuing losses since then though on a smaller scale, perhaps 2.5m in 2000. This decay in the impact implies a total cost to the end of 2000 of the current outbreak of algal toxins of about 7.5m to the balance of payments.

The rapid reversion in 2000 towards prior levels of imports reflects the reputation for premium quality enjoyed by Scottish produced and processed scallops. One processor expressed the view that he preferred locally caught scallops because he had greater control over the methods used in processing from the very beginning of the production chain, whereas with imports he could be forced to accept a product that might have been less well handled.

3.6 CONCLUSIONS

The majority of the closures around the Scottish coast have been caused by the presence of ASP toxins. The first closures occurred in 1997 for a limited period around Orkney. In 1998 more intensive closures occurred to the east of Orkney lasting between 200 and 300 days. However, it was during 1999 that extensive harvesting bans were applied around the Scottish Coast, with the West Coast of Scotland from Cape Wrath down to the Northern Irish Coast severely affected in terms of both the area covered by the bans and the length of the bans.

In 2000, the extent and duration of the bans were less than in 1999 with areas around Orkney and along the West Coast being most affected but with the number of days that areas were closed often being only half that of 1999. During 2001, while the geographic extent of closures further reduced the intensity (i.e. number of days closed) of the ban increased in a number of areas. The evidence for 2002 (to end-March) shows further reductions with only 18 boxes having been affected so far and currently bans are in operation in only six boxes.

The choices to the ban facing the different parts of the industry vary. For vessels these include moving to other areas, targeting other species, or laying-up (permanently or temporarily). For divers the options include moving to other areas or leaving the industry. For farmers they include accepting the loss of sales or closing. For processors they include reducing the scale of operations, sourcing from elsewhere in Scotland, the UK, or perhaps abroad, or closing.

Although overall levels of landings declined there was a clear shift in 1999 to landings on the East Coast, as the West was closed and a shift back towards the West Coast in 2000 as the bans became less extensive. There does not seem to be any evidence of a widespread departure from the fishery and it appears that there has been no shift in the base location of the fleet though it may well have been fishing in a different pattern dictated in part by the closures.

It is suspected, however, that the data does not reveal the true extent of the impact on the catching sector and consequentially on the downstream sectors. Most business enterprises faced with unfavourable trading conditions will soldier on, despite making losses, for as long as they can in order to preserve their trading links, sources of supply and customer goodwill, until times improve. In this respect fishing enterprises are no different from others and as a rough general rule they appear to be able to run with losses for about two years before their position becomes untenable in large numbers.

There are currently reported to be 150-200 divers compared to 300 or so only a few years ago. In Orkney the numbers have dropped from 60 to around 20. The divers have been the first to leave the industry as they have a low level of investment and are often part-timers with incomes from other sources.

The reaction of processors to the closures has been mixed. Some smaller processors have been forced to close as their supplies have stopped. For many, scallops only account for a relatively small part of their output and they have relied on other products, especially crabs, to keep them going. Larger processors have been able to source supplies from elsewhere, especially the south-west of England and the largest processors have maintained production, if at lower levels, by importing supplies particularly from France.

1. However, it has also been suggested by industry representatives that divers fish areas that are inaccessible to vessels and take brood scallops that re-stock surrounding areas.

2. It has also been suggested that the scallop fisheries have always been nomadic and that the idea of a 'local' fishery is a recent concept.

3. Economic Impacts of Scallop Fishery Closure: Update Study, EKOS, 1999.

4. In general, scallop fishermen rarely have a viable quota for nephrops whilst nephrops fishermen can prosecute the scallop fisheries which are non-quota. This can create a glut and thus lower scallop prices.

5. Source: Scallops Association

6. This section is based on interviews with three processors as well as with industry representatives.

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