Scottish Fisheries Management 2010-2020
7. Scoping the Future
7.1 The Panel believes that over the period 2010-2020, the Scottish fishing industry is likely to face greater uncertainty as to the future than at any time since the early 1980s. To illustrate the nature of this uncertainty we have selected three 'external' influences - environmental, economic, and constitutional - for closer examination. Our intention is not to predict how these influences will play out but simply to indicate the nature of these uncertainties that both the industry and the management system will need to confront. Only in the case of constitutional change do we indulge in anything approaching a scenario building exercise.
7.2 Any attempt to chart the future of fisheries management is bound to be difficult and possibly controversial simply because the future is unknowable. The level of uncertainty increases with time. But in dealing with a medium term future we are engaging with arguably the most crucial and in many ways the most difficult time scale. It forms the basis for major capital investment and long term planning decisions for both public and private enterprises and yet it is likely to span the lifetimes of at least two or three governments. The medium term will in part be governed by known events and the projection of current trends, though the latter will become increasingly unstable and therefore less predictable and less reliable. The potential for the unexpected to happen is inevitably greater than is the case with much shorter planning horizons and the chances of a surprise free future are therefore much reduced. What is clear is that it would be unwise to map the future up to 2020 by relying on a single projection of existing trends. And although a number of future events are already 'known' in the form of targets, the risk of being taken unawares by some of the eventual outcomes is quite high. Despite such uncertainties, there is still an expectation that the shape of things in 2020 will be more or less as set out in our vision statement ( Chapter 2).
7.3 Environmental issues illustrate very well some of the dilemmas encountered in scoping the medium term future for fisheries management. We can already anticipate certain key events - completing an integrated network of Marine Conservation Zones ( MCZ s) by 2013, achieving MSY by 2015 and good environmental status by 2020. These dates are already written into the calendar for the next 10 years. But we know very little of the consequences for future fisheries management or, indeed, whether the targets set will be achieved by the given dates.
7.4 In the case of the MCZ network to be in place by 2013, the fact that the selection of sites will include detailed consultations with the fishing industry may bring some comfort to the industry. But only when the management regimes are finalised will the extent to which the network may interfere with fishing activity become clear. Nor will 'completion' of the network by 2013 be the end of the matter. The waters around the UK will still be less extensively protected than the terrestrial environment and pressure for further protective measures will remain.
7.5 The Commission is already warning that current progress towards MSY is much too slow to achieve the target status by 2015 and measures to put EU fisheries on course will need to be stepped up from 2011 onwards. This is a particularly ominous warning to Scottish demersal fishermen because the 'distances' between existing levels of stock abundance and the target MSY for most demersal species are large and significant reductions in fishing mortality will be necessary. What is less certain is whether the Commission plans drastic action over the next few years or a determined but less draconian campaign spread over a longer period. Meanwhile, the interpretation put upon the possible early signs of recovery of cod stocks in the North Sea by WWF - as reported in The Independent under the heading 'Sustainable again - North Sea cod saved by careful conservation' appears to be premature and sends out dangerously mixed messages to an industry desperate for good news. It again highlights the discrepancy between a short term perspective and a longer term MSY based strategy.
7.6 Looking further ahead to the goal of 'good environmental status' by 2020 presents us with an even less certain horizon. Only now are we beginning to understand what may be demanded of the fishing industry by way of further sacrifices in the name of 'environmental quality'. One cause of the uncertainty is the extent to which policy makers will eventually concur with scientific assessments of what constitutes good environmental status. Political expediency (or pragmatism) may dictate either lower standards of environmental quality or at least a longer lead time in reaching them than the scientific judgements might envisage.
7.7 We also know some of the likely general effects of global and regional climate change , but not yet in sufficient detail to be able to understand how far these will alter the ecosystems in the North Sea and West of Scotland waters or affect the abundance and distribution of fish populations in these areas. We can infer that regional climate change encompassing the North East Atlantic will exert a significant influence on fishing activity over the longer term but it remains unclear whether this will be reflected in reduced fishing opportunities or simply in changing fishing patterns as the relative distributions of fish populations alter. During the period up to 2020, the physical effects of climate change on ocean temperatures, salinity, plankton abundance etc may well be quite small and the overall impact on the populations of target species only marginal. On the other hand, the anticipation of future changes to marine ecosystems and the wide range of important services they provide (nutrient cycles, carbon sequestration etc) could alter quite significantly the balance of priorities for the different policy areas that impinge on fisheries, even within the next few years.
7.8 The Panel is also aware of certain dilemmas that face the kind of science that is needed to underpin management decisions in the years ahead. The first is just how two distinctive streams of scientific advice - one addressing the state of the marine ecosystems and based on a developing but still untried ecological science and the other a much narrower, longer established and strongly routinised approach to fisheries science - will converge and whether either one will assume an ascendency over the other in the years to come.
A second, more immediate concern, is for the uncertainties endemic in the ICES led system of stock assessment in terms of the modelling of fish populations, the assessment procedures and the advisory process. The debate on these two sets of issues is likely to intensify over the next 10 years: Chapters 8 and 9 address some of the concerns more fully.
7.9 Fisheries have already endured a period of intensive scrutiny from environmentalists, some of whom are demanding very profound changes to the ways in which we exploit living marine resources. In a very real sense, they remain something of a wild card when scoping the future of fisheries management. Emboldened by their successful campaign to promote a Europe wide integrated network of MCZ s and strengthened by a skilful manipulation of the media, they will continue to exert an influence in the future. But in which particular directions: through further extensions to the network of protected areas; through more specific challenges to particular fishing activities; or more generally through demands for ever higher environmental standards? Whichever directions are chosen, fisheries science and management will continue to face difficult questions over how to engage with the environmental challenge - whether or not to incorporate the lessons from ecosystems research within fisheries science and advice and whether to raise the level of representation from the environmental agencies and NGO s on advisory and decision making bodies at the European, national and local scales.
7.10 As in the case of environmental uncertainty, the broad parameters of the economic situation over the next decade are fairly well known. What is much less clear is how deeply the effects of the recent recession will be felt in the Scottish fishing industry already struggling with reduced fishing opportunities and depressed prices for many key species. Over the past two and a half years the global, European and UK economies have suffered serious reversals, triggered by the collapse of financial institutions on both sides of the Atlantic, bringing to an end a sustained period of low cost economic growth. The expectation is that the economies will recover; the uncertainties surround the timing and pace of recovery and the extent to which some sectors will be left permanently damaged.
7.11 Unlike environmental uncertainty that will mainly affect the catching sector, the effects of economic recession permeate all parts of the seafood chain and are perhaps more keenly felt in the processing and retail links. Four aspects of the current economic situation are of relevance to the fisheries sector - public finance, private credit, currency exchange rates, and consumer expenditure - and how these may impact on the catching and processing sectors and on domestic and export markets for fish and fish products.
7.12 It is already clear that 2010-2020 will be characterised by severe restraint on public expenditure as governments strive to reduce large deficits in their overall budgets. For the fishing industry this means little or no additional government funding to help the industry through the difficult years ahead. There is, therefore, less likelihood of a further round of decommissioning to reduce overcapacity and an increased risk of reductions in the science and management budgets.
7.13 The situation concerning the industry's continuing access to private credit in the form of short term bridging loans or longer term investment is rather less clear. The Royal Society of Edinburgh (2004) drew attention to the risks of dependence on debt rescheduling as a means of financing the catching sector, and the present Panel has been surprised not to hear more evidence of difficulties with debt rescheduling during the present credit squeeze. Future development relies heavily on the availability of private capital. Difficulty in raising long term loans is likely to inhibit renewal of the catching sector and add to the disadvantages of an already ageing fleet. Meanwhile, survival of existing enterprises, more especially in the processing sector, may depend on short term credit to ease cash flow and provide working capital in situations where mismatches occur between weekly settlements of accounts for raw materials and monthly (or longer) terms for payment of the processed goods.
7.14 The current economic situation also raises questions over the continuation of recent trends in consumer behaviour . Prior to the recession, there was evidence to suggest that an increasing number of consumers were being guided by principles of 'ethical buying' - aided and abetted by a range of supermarkets sourcing their supplies solely or mainly from accredited 'sustainable fisheries'. Depending on the extent to which disposable incomes are reduced by wage restraint and/or tax rises and food prices become subject to higher inflation rates, consumer behaviour could again revert to focusing largely on price and value.
7.15 The consequences for Scotland's fishing industry are not straightforward, mainly because of the complexities caused by the globalisation of markets for fish and fish products. Today, Europe and the UK rely on imported supplies for around two thirds of their total fish consumption. Scotland is edging ever closer to a situation where 'we export what we catch and import what we eat'. A very large part of Scottish landings of pelagics and shellfish are destined for export - largely to Russia in the former case and to Spanish and French markets in the latter. Only the demersal sector is reliant on the domestic market and here it is in competition with very high volumes of imports from Iceland, Norway and Russia mainly intended for secondary processing on Humberside.
7.16 To an important extent, therefore, the fate of the Scottish fisheries sector is bound up with the implications of the global recession on consumer spending, national credit ratings and currency exchange rates, especially across Europe. Currency exchange rates could play a particularly important role. A weak pound sterling may help to offset the weakening of demand on European markets for high priced shellfish (and especially Nephrops ) to a limited extent but it will certainly raise the cost of imported goods and services for the domestic processing sector, including both the cost of raw materials and foreign agency labour on which an increasing number of processors now depend.
7.17 The third 'external influence' that could have significant consequences for the future management of Scotland's fisheries - the constitutional question and its implications for membership of the CFP - poses a very different kind of uncertainty. The Panel is fully aware of the Scottish Government's aspirations for complete independence from Westminster and its opposition to the CFP , preferring instead to see all responsibilities for fisheries management repatriated to the member states. And there may well be a number of people who will expect this report to focus on the future of fisheries management outwith the CFP . Our remit was less specific: 'The Scottish Government considers that the Common Fisheries Policy has been detrimental to the interests of the Scottish fishing industry. As a result, an independent inquiry has been established to explore the most appropriate fisheries management arrangements for Scotland.' We have chosen, therefore, not to treat withdrawal from the CFP as the framework for our analysis of future fisheries management but as one possible factor that could have an important bearing on Scottish fisheries management in the period 2010-2020.
7.18 Independence is a matter of political choice; the Panel does not wish to comment on this aspect. The process would be initiated by a decision of the Scottish Parliament to hold a referendum and thereafter be determined by the Scottish nation as a whole. The outcomes of such a decision for fisheries management in Scotland are fairly clear with all the advantages and disadvantages that accrue to being a separate member state. Withdrawal from the CFP , on the other hand, is much more complicated especially as the Scottish Government has no express wish to abandon membership of the EU . It would involve legal arguments in respect of the European Treaties and ultimately be decided by the 27 existing member states. The Panel is unable to offer any opinion on the likely result of these negotiations.
7.19 We are, however, able to outline what we believe would be the salient opportunities and threats for Scottish fisheries management arising from independence and from subsequent decisions relating to a continuing involvement with the CFP . We have accordingly constructed three alternative scenarios for closer examination:
A An independent Scotland remaining within the EU and the CFP
B An independent Scotland remaining within the EU but outside the CFP
C An independent Scotland opting to withdraw from the EU and, therefore from the CFP .
We would urge the Scottish Government to explore these scenarios in greater detail in order to understand some of the consequences that flow from a future outside the CFP rather better and to ensure that any decision to quit the CFP is based on an objective appraisal of the costs and benefits incurred rather than simply the emotional appeal of greater independence.
7.20 In our view the freedoms granted to the Scottish Government to develop its own distinctive management system as the result of withdrawal from the CFP are less substantive than first imagined. This is mainly because Scottish fisheries will still be dependent on shared stocks in ICES areas, IV a and b, VI a and VII a. The greater gains for future fisheries management may accrue from Scenario A (independence from the UK ) which is a prerequisite for achieving Scenarios B or C. As a result of this action, Scottish fisheries management would gain independent national quotas for all species currently managed through TAC s and quotas, presumably as precisely defined and permanent shares of the existing UK quota, and be free to manage these according to their preferred strategies.
A crucial advantage would be the ability for Scotland to pursue its own agenda and to decide on its own system of rights based management. Arguments that have persisted over many years as to who should represent Scottish fishing interests at Council meetings would no longer have any relevance as both Scotland and the remainder of the UK would have separate seats on Council. However, Scotland would remain an integral part of the EU and the conditions of the CFP would still apply.
7.21 The advantages to be gained through Scenarios B or C (withdrawal from the CFP / EU ) are rather less clear. In theory, the Scottish Government would be free to adopt its own management system within a Scottish EEZ . Here, Scotland's gain would be to the disadvantage of other parts of the UK : whereas Scotland could create a viable and
quasi-independent fishery outside the CFP , the same could not be achieved for England, Wales and Northern Ireland because of their very narrow EEZ s, squeezed by median lines in the North Sea, Channel and Irish Sea.
7.22 Under Scenario B (withdrawal from the CFP while remaining within the EU ), the new independent management system would have to remain compatible with the CFP where shared stocks were concerned and dependent on the outcomes of standard ICES stock assessments and advice for setting TAC s (or equivalents). Negotiation of a separate TAC for Scotland would be fraught with difficulty - and, no doubt, hampered by Scotland's wish to remain a member of the EU for all other purposes. It would be hard to see the EU institutions (Commission, Council, Parliament) adopting an initial negotiating stance which offered Scotland more than an agreed proportion of the existing UK quota. Any attempt to renegotiate new allocation keys on the basis of more recent track records would work to the disadvantage of the UK (and Scotland) as the special benefits originally granted to the UK in 1982 in compensation for the loss of access to distant water fisheries following the introduction of 200 mile EEZ in the late '70s would no longer be relevant.
7.23 The anomaly in Scenario B of remaining within the EU but outside the CFP would have further complications and constraints for an independent Scottish system: measures intended to give competitive advantage to the Scottish industry could still be liable to challenge under European competition rules. Moreover, freedom of action could also be constrained by other European marine policies arising out of MSFD and integrated marine planning.
7.24 Scenario C (withdrawal from the EU ) would be somewhat less complicated though the overriding need to ensure the recovery and sustainability of shared stocks would still dictate a need for compatibility in the approaches to conservation policy and achieving a balance between fishing effort and available fishing opportunities. Third party negotiations with the EU and Norway would be required to decide the annual TAC s for a range of species. Within agreed conservation aims for the shared stocks, Scotland would enjoy freedom of choice over the preferred conservation instruments (catch quotas or days at sea allocations) and quota management system as well as the rights to restrict the use of certain types of fishing activity within Scottish waters. Moreover, the Scottish Government would exercise its full, independent rights and responsibilities in relation to the broader fields of marine environmental policy and maritime policy within the EEZ and also in relation to third country agreements.
7.25 Whether the advantages arising from Scenarios B or C , set against the loss of access to the European Fisheries Fund and a loss of influence over future directions of European fisheries policy, are to be seen as substantial and real benefits will be for a future independent Scottish Government to determine. For now, it should be apparent that withdrawal from the CFP is neither as straightforward, nor the benefits quite so clear cut as certain groups maintain. The scope for a distinctive, independent Scottish approach to fisheries management may also be more limited than first thought.
7.26 The following sections of the report outlining a future fisheries management system for Scotland will reflect directly or indirectly on the three influences described above. A clear, balanced and coherent management system can become a fourth and potentially decisive influence on the future development of Scotland's fisheries sector. Governments, however, have a choice: they can seek to intervene through the management system to shape the course of future development; or they can take a more laissez faire approach, leaving it to the market to steer the industry towards a rational solution. We expect the Scottish Government to adopt a proactive approach, harnessing market forces rather than being subservient to them.