Scottish Government

Setting the Scene
Scotland's Fisheries, Many Fish...

...The Wealth of THE Seas

Healthy fish populations are a naturally renewable resource, providing long term fishing opportunities for the sea fishing industry and a natural food for consumers. But fish stocks must be managed effectively so they can remain healthy (that is, with a full biological capacity for reproduction). Only in this way will they continue to provide a future harvest for our fishing industry, food for our tables and fulfil their function in our marine ecosystems.

There are seven top commercial fish species of major interest to Scotland. In recent decades, few of them have been maintained consistently within safe biological limits. But prospects are now better and the most recent assessments show that the current state of many of our most important commercial fisheries is positive; testament to Scotland's commitment to sustainable fisheries:

• Herring and haddock are both healthy fish stocks, which are being safely harvested by current standards;
• Nephrops (prawns), also appear - for now - to be healthy and safely harvested, but the biological situation is not completely understood and there are some scientific uncertainties in establishing what level of fishing activity is sustainable in the longer term;
• Mackerel is in better health than it has been but is still at risk of over-exploitation. Actions are now being taken to reduce fishing effort; and
• Cod is seriously depleted and is subject to a long-term recovery plan.
• Scallop stocks are at safe levels and at current levels of effort are being fished sustainably, though this situation needs to be kept under review.
• Monkfish appear to be more abundant than in the recent past, but the many biological uncertainties suggest that the stocks may be at risk of over-exploitation.

Scottish vessels also catch a wide range of other species. In particular, coley (or saithe) and whiting are caught in the North Sea and to the west of Scotland in the shallower waters of the continental shelf. Flatfish, notably plaice and sole are caught from the same waters. Towards the shelf edge, deeper water species such as ling and megrim also form an important part of the catch. Crabs and lobsters are also significant, mainly in our inshore waters.

The stocks do not exist in isolation from one another or from the wider marine environment. The fishing industry can only be sustainable in the long term if there is also a high quality marine environment. Scotland needs to fish responsibly so that our impact on the environment jeopardises neither our industry';s long term future nor other priorities for the environment, in particular for marine biodiversity. This means taking steps to reduce adverse impacts of fishing on the marine environment such as by-catch and disturbance to the sea bed.

Important Sectors...

...AT SEA AND ON LAND

Scotland's sea fishing catching and processing sectors make up a diverse industry located right across Scotland.

The catching sector, in particular, spans a wide range of different types of business from the small sometimes part-time prawn boat operating close to shore on the west coast of Scotland to the multimillion pound pelagic vessel which can catch its entire annual quota of mackerel in a 16 week season. It is difficult to classify the Scottish fleet because some vessels pursue more than one type of fishery but we can distinguish 4 broad types:

• The pelagic fleet mainly targets herring and mackerel (although blue whiting is increasingly also being caught). There are a small number of these large, profitable vessels, working mainly out of Fraserburgh, Peterhead and Lerwick;
• The demersal or 'whitefish' fleet targets bottom dwelling fish in two types of fishery: the "roundfish" fishery of cod, haddock, whiting and coley in the North Sea and to the west of Scotland, and the deeper water species to the north and west of Scotland. With the decline of cod in recent years, some demersal vessels have increased their dependency on the deeper water species, principally monkfish and megrims. We include vessels catching plaice and sole in this category;
• Some of the whitefish boats tend to move between the whitefish and Nephrops (prawn) fisheries and these are classified as the mixed demersal and shellfish fleet; and
• There are also vessels that specialise in shellfish and Nephrops, the shellfish fleet which use other methods such as creels as well as trawls to catch their high value fish. They are mainly smaller vessels, operating in inshore waters.

The composition of the sea fish processing sector varies throughout Scotland. Whitefish processing takes place mainly in the north-east of Scotland. Pelagic processing, like whitefish processing, centres around the north east but also takes place in Shetland. Shellfish processing takes places across all fishing areas and in the central belt. There are three types of processing activity:

• Primary processors are involved in the cutting, filleting, picking, peeling, shelling, washing, chilling, packing, heading and gutting of fish and shellfish. These tend to be smaller units, employing fewer people;

• Secondary processors are involved in brining, smoking, cooking, freezing, canning, deboning, breading, battering, vacuum and controlled packaging and the production of ready-to-eat meals. The facilities tend to be larger with higher employment than the other two categories;
• "Mixed" processors carry out both of the above activities. Most sea fish processing in Scotland is in mixed facilities and they generate significantly higher average sales than the other two categories.

Across the UK as a whole the proportion of sea fish units in each category has remained stable since 2000. Over the same period there has been a fall in employment, whilst the number of units has increased.

SUPPORTING COMMUNITIES AND PROVIDING JOBS...

In five Travel to Work Areas ( TTWA), the fisheries sector directly accounts for over 1 in 10 jobs. In a further 9 areas, the sector accounts for over 5% of employment. The areas with the highest percentage of their local employment directly provided by the fisheries sector are Annan, primarily due to one large processer (19%), and Fraserburgh (19%), with the Uists and Barra, Berwickshire and Peterhead each having between 12-14%. The heaviest dependence on direct employment in production of fish products is found in the north-east, the Northern Isles, the Outer and Inner Hebrides, West Highlands and parts of south-east and south-west Scotland.

Employment in Processing of Marine Fish (Full-Time Equivalent), 2004
Source: Sea Fish Industry Authority

...ACROSS RURAL SCOTLAND

Our sea fisheries industry works closely with a wider range of other allied industries such as ship builders and repair businesses, net makers, ice and other ship suppliers and depends on ports, harbours and other infrastructure. Together, the people these businesses employ - and their families - are the lifeblood of many of Scotland's coastal communities, including in some of the most remote parts of the country. The diversity of these communities is also important - like our fishing sectors, the fishing areas of Scotland vary:

• The largest part of Scotland's (and, indeed, the UK's) sea fishing industry is located in the North East of Scotland with a high concentration of local fish processors and a high local economic dependence on fishing activity. The sector's supporting local infrastructure has developed alongside a sizeable and ever-more rationalised industry, largely owned by local Scottish interests. Most of the activity is concentrated in a few ports, all of which are well equipped with modern facilities and enjoy continuing investment in world-class technology. The North East is relatively well connected with road, rail and air communication links to the rest of Scotland and the UK and to Europe and further improvements are planned;
• Shetland enjoys close proximity to many of the North Sea's most fertile and productive fishing grounds. Lerwick supports a fishing industry on a similar scale to that in the North East and is a particularly important landing facility for many of Europe's pelagic fleets. Shetland's local catching sector is characterised by co-operative and community ownership of resources, including many of the vessels;
• The North coast and Orkney, support a small local industry and also have some busy ports, notably Scrabster and Wick, close to Europe's main fishing grounds but more remote from the markets;
• The North West of Scotland is home to two of the UK's most important fishing ports, Lochinver and Kinlochbervie, which depend on landings from foreign owned vessels who take advantage of the proximity to their important fishing grounds in waters to the west of Scotland;
• In economic terms, the fishing heritage of the Western Coast of Scotland has reduced but the industry still supports numerous small ports and harbours. Most of the fishing activity is in the inshore waters, targeting shellfish;
• A similar situation exists in the East Coast, Borders and in Fife where numerous small ports support a small local industry based on small vessels fishing inshore grounds, mostly for shellfish;
• The fleet in South West Scotland fishes mainly for shellfish such as Nephrops, scallops, lobsters and crabs. There is also small seasonal fishing for sprats, herring and whitefish. Some village communities in Kintyre, Ayrshire, Solway Firth, Islay and Gigha are particularly dependent on fishing for employment.

Our sea fishing and related industries and our sea fishing communities are mutually dependent. Not only are they integral to the heritage and traditions of those communities, they are also essential building blocks for the future of the local economy. In the context of the demographic changes facing much of rural Scotland, these industries are vital to retaining population and hence viable communities.

SHARED STOCKS...

The ICES areas shown on this map are the basis of shared stock management. The pie charts here and in the species maps in the Annex show that the species caught and the location of fleet activity varies across countries. The Scottish fleet concentrates its efforts in the Northern North Sea and to the West of Scotland. It also fishes in the Southern North Sea and the Irish Sea.

(a) Volume of landings by vessels based in Scotland in 2004
(b) Value of those landings
(c) Qualitative assessment of the export value of the named species to the UK as a whole ( i.e. of both the catch by Scottish and other UK vessels)
(d) Indicates which countries have a share in the fisheries (for Mackerel it is all the coastal states of the North East Atlantic)

...SHARED FUTURE

Most of the fish stocks of interest to the Scottish sea fisheries industry are shared, common resources, spanning international boundaries. Fish do not recognise these boundaries, so fisheries management must transcend them. Most of these are mixed fisheries with complex interactions between the different fish species and their environment. The task of managing these fisheries is one of the most complicated in the world. Yet it is vital for Scotland's social and economic interest that we get this task right.

Scotland's sea fisheries are governed by a range of international agreements. These are necessary to protect the stocks and it is important that they are respected by all parties. The alternative is the so called "Tragedy of the Commons" where the sum of the individuals' interests is contrary to the common good and the resource will be exhausted.

Within the European Union, fish stocks are managed under the Common Fisheries Policy. The EU as a whole also negotiates fishing opportunities with its neighbours, principally Norway and the Faroes. These negotiations are especially important for Scottish interests and for pelagic stocks and North Sea fisheries in particular. Much of the scientific advice which is used to manage the internationally shared stocks in this system comes from ICES, the International Council for the Exploration of the Seas, which is an intergovernmental body that co-ordinates marine science in the North East Atlantic.

A central feature of the CFP is that the overall limits on the catches of individual stocks are shared out amongst Member States, under the Relative Stability arrangements. This provides fishing opportunities for the Scottish fleet mainly based on historical fishing patterns using the system of Total Allowable Catches ( TACs). Target (precautionary) stocks levels to be achieved are set on the basis of scientific advice from national and international organisations, particularly ICES, with targets also set for year on year increases in the level of the spawning stock. These TACs are fixed on an annual basis by the European Council of Ministers following negotiations and based on proposals from the European Commission.

The basic resources for the industry - the fish stocks - are managed within this international negotiating system, and, as far as possible, decisions are based on high quality scientific evidence. However this is a complex task. For many stocks, the scientific information available does not provide a clear basis for management decisions, and there is scope to keep improving the relevance and responsiveness of the science. Fish stock management also has to take into account the viability of the industry and the communities it supports. To respond to this we aim to have stock management strategies, which fully take into account the socio-economics as well as the science, and the risks and uncertainties involved. These strategies, for stocks of interest to Scotland, will be especially demanding as most of our stocks exist in mixed fisheries, requiring an integrated approach.

As a whole, the governance arrangements and regulatory framework for the industry are complex and not easily understood. The system is perceived by many to be overly bureaucratic and unable to safeguard the stocks, deliver certainty of access to fishing opportunities or set the right management limits and targets.

But significant reform to the Common Fisheries Policy is underway. We aim to make our contribution to improving the overall arrangements by championing improved management of the stocks relevant to Scotland.

CHANGE...

...AND CHALLENGE FOR THE BUSINESS OF SEA FISHING

Historically, our catching sector has experienced a painful cycle of boom and bust, which in turn has created irregular supplies and instability for the processing sector and the market. In part this has reflected the difficulties of managing the complex mixed fisheries of the EU through the single instrument of the CFP, and, in part, a risk-prone approach to stock management. Consequently, it has been very difficult for the sector to plan ahead.

The demersal sector of the industry has faced particular difficulties in recent years mainly as a result of the need to protect and recover declining cod stocks in the North Sea and to the west of Scotland, where the Scottish fleet concentrates most of its activity. This has restricted fishing opportunities for the sector, which has had to restructure in order to achieve a more sustainable balance between the fishing opportunities and the number of vessels pursuing them, a considerable sacrifice by our industry and our fishing communities. We believe capacity in the demersal fleet is now in much better balance with the available resource.

The availability of fishing opportunities is not the only factor that affects the profitability of the catching sector. The market price of fish, capital costs of vessels and ongoing costs - principally fuel but also materials and wages - also affect the bottom line as do the costs of acquiring fishing opportunities in the form of quota or days at sea. The processing sector has experienced new and intensifying pressures arising from global competition, including in quality, hygiene and traceability standards. Traditional supply routes for the sector are changing, with more being obtained from imports and reliable sources of supply becoming increasingly difficult to find. Processors tend to find it difficult to retain staff and the costs of water and waste disposal for the sector have been rising as it has a high demand for water.

However, there are market opportunities for the industry. Scotland's catch, particularly of pelagic and shellfish species, is exported all over the world. The global market for seafood generally is growing because of the reputation of the product as a healthy food. As a whole, the global industry is moving from being production to market focussed. It is therefore important to get the best value from the catch and market it successfully against competitive world supplies. In the UK, the retail market is growing at a rate of 6% per annum (4.4% in Scotland). In the seafood sector, the majority of this growth is supplied by imported product and aquaculture, mainly because of national preferences for particular kinds of fish. But there are still opportunities to find new markets for product landed in Scotland and to optimise the export markets that provide a substantial source of revenue to our industry, particularly through supplying high quality, high value products to discerning customers.

For the processing sector, proximity to ports and fishing grounds provides significant benefits in terms of direct supplies and they also benefit from access to water supply, cold storage, transportation options and labour. Grampian region, as a significant UK sea fish processing hub, has an important role to play in securing these benefits for sea fish processing companies

Many of the factors that affect sea fishing businesses are outwith their own and government control, notably the price of fuel and market prices for fish. But we can make a contribution to the industry's profitability by ensuring we do not impose unnecessary regulatory costs and constraints and through good stock management, by delivering sustainable, stable fishing opportunities.