The Future of The Scottish Fishing Industry

Inquiry into The Future of the Scottish Fishing Industry
March 2004
Financial support for the RSE Inquiry into The Future of the Scottish Fishing Industry
Aberdeenshire Council Aberdeen City Council Clydesdale Bank J Sainsbury plc Highlands and Islands Enterprise Scottish Enterprise Grampian Shell U.K. Exploration and Production Shetland Islands Council Western Isles Council
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 Scotlands National Academy. Born out of the intellectual ferment of the Scottish Enlightenment, the RSE was founded in 1783 by Royal Charter for the advancement of learning 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 upon the expertise of its multidisciplinary Fellowship of men and women of international standing, to provide independent, 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 Britain and 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 Scotlands social, economic and cultural well-being.
RSE Inquiry into The Future of the Scottish Fishing Industry
Foreword
The shing industry is of much greater social, economic and cultural importance to Scotland 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 sh. Many of these are ports with relatively remote communities scattered along an extensive coastline and which, for centuries, have looked to shing as the main source of employment. Restrictions imposed under the Common Fisheries Policy (CFP) affect all European shing eets, but they have proved particularly severe for the demersal or whitesh sector of the Scottish shing industry with the potential to inict lasting damage on the communities concerned. There have been a number of recent or ongoing inquiries into the UK shing industry, but none has specically focused on the particular problems for Scotland. The Royal Society of Edinburgh (RSE) believed there was an urgent need for such an inquiry. Given the differing views and disagreements amongst the various groups involved in the shing crisis (including shermen, shery scientists, regional and government authorities and the European Commission) the RSE also believed such an inquiry should be independent. As Scotlands National Academy, it has access to a range of high quality scientic and non-scientic expertise appropriate for such an independent inquiry. Further, while recent inquiries have been directed to analysing the causes of the crisis, few have attempted to outline the realistic options for developing sheries which are genuinely sustainable and economically viable in the long term. As with previous inquiries, it would have been impossible to carry out our task without the generous nancial support and help of those organisations listed on the opposite page. The RSE is most grateful to them. The response to the Committees request for evidence met with an equally generous response with written evidence forthcoming from a very wide range of bodies and individuals. This input was absolutely essential to the work of the Committee and we are again most grateful to all who made this contribution. The Committee worked extremely hard to accommodate the widespread views put to it. A particular debt of gratitude is owed for the efforts of Dr Marc Rands as the Secretary to the Committee. Sir David Smith Chairman of the Inquiry
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Executive Summary
Introduction
1. The Scottish shing industry has been managed under the Common Fisheries Policy (CFP) of the European Union for the last thirty years. The policy has failed to achieve adequate conservation of certain key sh stocks, so that an important part of the industry and the livelihoods of many in Scotlands shing communities are now under threat. 2. The catching industry is divided into three principal sectors. The pelagic sector for sh living in the upper layers of the sea, such as herring and mackerel; the shellsh sector for prawns, shrimps, lobster, crabs and molluscs; and the demersal sector for sh living near the sea bottom, such as cod and haddock. The pelagic and shellsh sectors are currently protable and stable. It is the demersal (or whitesh) 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 claries some common misunderstandings about the original negotiations in forming the CFP and highlights in particular the agreement to give member states exclusive coastal zones. The agreement on this was revised in 1983 to give protected 12 mile limits around the coasts of all member states and this gave Scotland one of the most extensive areas of inshore shing in the European Union. However this agreement is subject to renewal every ten years. While we do not anticipate any change, because of the importance of its coastline to Scotland, we recommend Ministers endeavour to have the existing 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 sh stocks and as a basis for their allocation between nations. These were based on each countrys historical share of the total catch but this principle of relative stability also aimed to give preference (The Hague Preferences) to coastal communities dependent on shing, such as those in Scotland. The North Sea is by far the most important shing area for Scotland, and although there are other nations with a North Sea coastline to share this resource, the UK has 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 which they depend are sold to shermen and/or shing enterprises from other countries. This has not so far been a problem 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, employment and social security regulations. Nevertheless worries about this remain in Scotlands shing communities and there have been cases of quota purchase in England by shing interests from other member states. 6. European Union (EU) Structural Funds, in particular the Financial Instrument for Fisheries Guidance (FIFG), can assist the shing industry by helping to fund training, de-commissioning and infrastructure (such as harbours and marketing facilities). But FIFG is also able to provide resettlement grants for shermen leaving the industry and to fund early retirement; the European Regional Development Fund can be used to support new business ventures. Little has so far been used for these latter purposes and, given the current crisis, we recommend that 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 diversication of sheries 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 major shortcoming of the CFP is that it is far too centralised, and too remote from those that are affected by it. With the imminent enlargement of the EU to 25 members, the problems of overcentralisation and the difculty of reaching rapid and satisfactory decisions are likely to get worse. We therefore recommend that Ministers reconsider their position over the EUs exclusive competence for conservation of marine biological resources, with a view to getting this deleted from the proposed EU constitution so that the principle of subsidiarity may apply to sheries, as it does to other matters. (para. 2.44).
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8. Many Scottish shermen have told us they would like the UK to withdraw from the CFP. We see no prospect of this without the UK trying to renegotiate the terms of its Treaty of Accession. It is unlikely that new terms for remaining in the EU could be negotiated or that they would allow withdrawal from a policy that all other member states accept. Withdrawal altogether from the EU would have major and damaging consequences for the Scottish economy (e.g., it would impact on the 60% of Scotlands manufactured exports that go to the EU, it would deter inward investment. and the substantial aid that Scotland receives from the EU Structural Funds would no longer be available). Withdrawal would have to be followed by negotiations with the EU on behalf of the member states with whom Scotland has traditionally shared sheries as well as with countries outside the EU such as Norway, Iceland and the Faroe Islands. Even for shermen, it is doubtful this would lead to any better situation than currently exists under the CFP.
Economic and Social Impact

9. Scotland has 8.6% of the UK population, but landed 62% by value of the total sh catch in 2002. Fishing is of much 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 into account, the total employment dependent on these industries rises to 48,000, roughly half the direct and indirect employment dependent on North Sea oil at its peak. (para. 3.2). 10. Viewed as a business, the overall commercial performance of much of the shing industry has been good. In the catching industry, the pelagic sector successfully survived the acute crisis of the late 1970s when the herring shery had to be closed for some years. It subsequently modernised, reorganised and is now very protable, with its eet of 33 vessels generating gross earnings of 98 million in 2002. The shellsh sector is also protable, but there is concern that it is approaching over-capacity, requires modernisation, and that whitesh vessels might divert their effort into catching shellsh. 11. In the whitesh sector, there has been a collapse in protability as a result of quota restrictions. Although it catches a diversity of species, its difculties have been dominated by cod and haddock, which now contribute only 40% of the total value of the landings. Earnings from cod declined from 45 million in 1998 to 24 million in 2002. Landings of all demersal sh by the Scottish eet declined from 300,000t in 1982 to 130,000t in 2002. 12. The whitesh sector now depends on public intervention in one form or another. The decline in protability places increasing pressure on vessel owners who have typically used debt nance 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 a moratorium on debt servicing could be arranged with the nancial institutions and steps taken to ensure that the remaining vessels are the most modern in the demersal eet. We therefore recommend that Ministers and the nancial institutions should seek to negotiate an arrangement for debt rescheduling and restructuring under which the demersal eet is granted a debt service moratorium for an agreed period. (para. 3.69). 13. For the longer term, the nancing of the Scottish eets as a whole should be based on terms that are better able to withstand the uctuations in earnings that are characteristic of this industry. We recommend that Ministers and the nancial institutions should examine the case for establishing a Fishing Industry Finance Corporation. (para. 3.69). 14. The traditional Scottish system of shared ownership, or owner skippers, while having many advantages, may not be well suited to an industry that requires to raise so much capital. The case for reforming into a corporate structure needs to be considered. It could make it easier to raise capital for investment, without the problems of huge personal debt, and to buy quota to prevent them moving to other nations. We recommend that the Scottish Executive and the Scottish shing industry should jointly examine the industrys ownership structure to establish whether a regrouping into a corporate structure would strengthen its ability to compete in the future. (para. 3.69). 15. There would be much advantage if the institutions representing the sh catching industry could develop a more cohesive structure. This would enable the industry to take a more responsible and effective role in management issues and in discussions with government. We recommend that the Scottish Fishermens Federation (SFF) and other representative bodies in the catching industry should consider how they can come together most effectively to discuss issues of stock conservation with government scientists and negotiate effectively on management and regulatory issues. (para. 3.69).
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16. Much of the sh catching industry is concentrated in coastal areas and islands where there are few prospects of alternative employment. Whereas the shellsh sector is distributed right round the Scottish coast, the pelagic and demersal sectors are concentrated in the North East and in Shetland with sizeable landings also in Caithness and Sutherland. Employment in the industry has already declined over the last 10 years by 40 per cent. This is not just 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 nite resource, resulting in further reductions in employment in all three sectors. The impacts of the present and future reductions in the eet are discussed 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 the job loss that has already occurred, both the North East and Shetland have unemployment rates below the national average (2-3% and 1.5% respectively). (para. 3.57). 17. We recommend that consideration be given to early retirement schemes for shermen wishing to leave the industry and to resettlement grants, both of which are eligible for FIFG funding; and that the resources of Highlands and Islands Enterprise 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 sheries dependent areas. (para. 3.69). 18. The processing industry in Scotland represents 49% of the UK total, employs more people than the catching industry and much of it is currently in a healthy state. A substantial proportion of the sh it processes is imported (e.g. for the UK as a whole only 8% of the cod used is from home sources). Although this gure will be higher for Scotland, availability of imported supplies can protect it at least to a considerable extent from the current crisis in the whitesh sector. 19. Priority should be given to exploiting the proposed introduction of traceability as a means of aligning the catching and processing industries with retail trends and consumer preferences. It could also assist with high quality branding. We therefore recommend that 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). 20. Public expenditure (via the Scottish Executive, UK Government and EU) to pay for enforcement, shery science, FIFG grants and decommissioning provided around 70m in 2002 in Scotland, in support of the shing and 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 that stocks recover and are sustainable, the contribution it can make to the Scottish economy would be well beyond the cost of any support it may be given.
The Science of Stock Assessment and its Role in Fisheries Management

21. The assessment of sh stock sizes for the setting of Total Allowable Catches (TAC) is based upon collation of shery 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 in use for over 30 years, but is subject to error if misreporting, illegal landings and unrecorded discards occur to a signicant extent; stock sizes may then be overestimated and TACs set too high for sustainable stock conservation. Much more accurate records of true landings and discards are needed but changes in the science used are also necessary. We recommend that ICES should consider new statistical approaches as alternatives to VPA for management of the sheries, particularly methods in which uncertainty (and hence business risk) can be quantied. (para. 4.24). 22. Trends in recruitment (e.g. the process of adding new individuals to a population by reproduction), abundance and distribution of sh stocks can be studied by methods that are independent of commercial sheries. The International Bottom Trawl Survey (IBTS) and associated plankton sampling in which Scotland plays a major role provide valuable data on the state of North Sea sh stocks. 23. While survey techniques, such as IBTS, provide valuable information on recruitment that cannot be obtained from commercial vessels, we recommend that Fisheries Research Services (FRS) should begin to develop methods for the use of commercial vessels to aid shery surveys and also how accurate recording of commercial catches can best be achieved. (para. 4.38).
24. We also recommend ICES should convene a forum to review IBTS design, shing 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)
Review of ICES scientic advice on major sh stocks

North Sea Cod
25. Cod stocks have declined to historically low levels. Excessive exploitation of the cod shery has resulted in a reduction in landings from more than 200,000t in 1985 to only 50,000t in 2001 by all countries shing in the North Sea. Had shing mortality been sustained at 1960s levels and not been allowed to rise, through more effective conservation policies, the Scottish eets share of this would have been an additional 50-60,000t, worth around 80-100 million a year. The main cause of the decline has been high shing 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 shing mortality has resulted in a stock comprised of mainly small young sh that cannot generate the level of recruitment that older sh can achieve. This also impedes stock recovery. 26. Unrecorded landings and discards have played a part in this, but it is not only shermen who are to blame. Calls by scientists for reduction in shing mortality since 1990 have been rendered less effective by a persistent tendency to set TACs that were too high, partly as a result of errors in scientic methods that over-estimated stock abundance. This resulted in shing mortality that was too high. A major strategic error was made in the management of the abundant 1996 year-class in the North Sea, when scientists recommended increases in TACs instead of recommending low shing mortality that would, if accepted, have averted the current crisis. In general, cod stocks have been over-shed in compliance with erroneous advice from ICES Advisory Committee on Fishery Management (ACFM) until the last few years when advice was to reduce shing for cod to the lowest levels and then to close the shery altogether. 27. In the light of the above, we recommend that the EU manage demersal sh stocks so that shing mortality is much lower than over the past 15 years, aiming for a value of shing 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 modication of the 1999 EU-Norway agreement that specied a target F = 0.65 for cod. 28. Also, ICES recommendations should aim to promote and sustain recruitment so that there is a good spread of age classes of females up to age 5 years old and over in demersal stocks. (para. 4.82). Without t and older mother sh, 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 Sea cod to 150,000t in a time span of 5 10 years. At the time of writing, this programme has still not been agreed even though it was rst proposed three years ago. It is also awed because it gives no indication of how to achieve recovery of the stock from its present low level, (around 50,000t), to 70,000t, the level below which the stock is considered to be in danger of collapse (Limiting Biomass Blim). The subsequent rebuilding to 150,000t depends on 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 low enough to permit recovery. The theoretical minimum time for recovery of cod stocks is 5 years, with 10 years for full recovery more likely. A well managed cod stock in the North Sea should sustain landings of ca. 200,000t even with recent environmental changes. However, it is unlikely, even if a full recovery of cod stock is achieved, that all of the existing demersal shing 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 recovery programme and should be xed until Bpa (the safe minimum spawning stock biomass) of 150,000t is attained. (para. 4.82).
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The by-catch of cod in other sheries should be minimised by ensuring the use of species selective shing gears; TACs should be supplemented by limits on effort and designation of closed areas. (para. 4.82). Demersal stocks should be managed as a mixed shery 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 sh. After the cod recovery programme, 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 of some 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 shing activity through TACs and catch quota has failed in recent years and is unlikely to be successful 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 that shing mortality be reduced, management measures must therefore include other means to reduce effort on the target 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 the eets income than cod. Both west coast and North Sea haddock stocks are in a healthy state and can sustain 2003 levels of exploitation. In recognition of this the Council of Ministers agreed a substantial increase in the haddock TAC 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-term average values of 250,000t, given the importance of this stock to Scottish demersal sheries. (para. 4.88).
Whiting
35. The status of whiting, both in the North Sea and off the west coast of Scotland, is very uncertain. Landings have steadily declined. Although it has the potential to be the most abundant whitesh species, it is therefore presumed to be below safe biological limits. Fisheries Research Services (FRS) and ICES should urgently seek a valid method for assessing whiting in the North Sea and the EU should initiate a whiting recovery programme. (para. 4.93).
Monksh
36. Monksh 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. It is now widely captured in small numbers as a valuable by-catch. Management by TACs is problematic for this species. Monksh around Scotland should be managed through limitations on demersal sector effort rather than catch quotas. (para. 4.96).
Nephrops
37. Nephrops (Nephrops norvegicus: e.g Norway lobster, Dublin Bay prawn or langoustine) sheries make a major contribution to Scottish landings. The stocks are in a healthy state, and current levels of exploitation are sustainable. The Council of Ministers has now also agreed a substantial increase in the TAC for 2004. Innovative use of video surveys and catch per unit effort data has provided a good basis for management. We recommend that the EU Commission and Scottish Ministers should ensure that Nephrops shermen adopt selective gears that do not capture white sh. Management should be vigilant against diversion of effort from the white sh sector into Nephrops. (para. 4.101).
Pelagic sheries (herring and mackerel)

38. Following the crises in the 1970s, management of pelagic sheries has adopted a policy of low shing mortality values, removing less than 25% of the stock each year. Errors in stock assessments are small, so that TACs are reliable. Production is now high and sustainable given good recruitment, so that management of pelagic sheries has been a success especially since it is simplied because these are single species sheries.
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Industrial sheries
39. Industrial sheries, predominantly of short-lived sandeels and Norway pout, are a negligible part of the Scottish shing industry, but are a major activity by certain other nations such as Denmark. Indeed, they account for more than 50% of all sh landings from the North Sea ca 1,000,000t. ICES believes it is sustainable at its present level when considered in isolation, but there are three matters for concern: 1) the shery has not been able to land its TAC in recent years; 2) the ecosystem effects on other shes and birds of the removal of large quantities of sandeels each year is poorly understood; and 3) because industrial sheries are so large, even a small percentage of by-catch could have substantial effects on other species. We therefore recommend the EU Commission should ensure that the industrial shery TAC should be decreased below the recent reported landings and take account of interannual variation in abundance of sandeels. (para. 4.117). We also recommend that FRS should direct research at the potential ecosystem effects of the shery. (para. 4.117).
Deep-Sea Fisheries
40. These sheries make only a small contribution to landings by Scottish vessels. They are slow-growing species and take long to reach maturity; TACs did not come into force until 2003. The EU Commission should recognise the vulnerability of deep-sea species and seek to regulate deep-sea sheries by effort control, as recommended 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 European shery scientists available to participate in ICES. The European Commission itself recognises that the scientic resource is not organised or used in the optimal way. Additionally, ICES working groups are not open to the wider scientic community (or the shing industry or environmental groups) and this may contribute to the apparent reluctance to modernise their methods. Within Scotland, the national intellectual resource could be better deployed if non-governmental scientists could participate in ICES assessments, and if exchanges between government and non-government research centres could be facilitated. Opening a portion of FRS research funding to competition, and allowing FRS to use grant-in-aid to lever research funds from other sources (as with Research Council Institutes) would further improve the situation.
Fisheries and the Environment

42. The marine environment is important for a variety of reasons besides sheries, and its stewardship is of high priority. This has been recently recognised in the CFP by its support for Ecosystem-Based Fisheries Management. 43. The impact of sheries on the environment is poorly understood. Fishing usually targets species at the top of the food web since they tend to be larger and of higher market value. As these species are wiped out, attention is shifted 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 sheries. Land-based industries are required in advance to carry out Environmental Impact Assessments of new ventures, so we therefore recommend that the Scottish Executive should consider some form of Environmental Impact Assessment for new ventures by the shing industry. (para. 5.6). 44. Because marine ecosystems are very poorly understood, we recommend the Scottish Executive and the relevant funding bodies should provide increased investment in the science required to understand marine ecosystems 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 sheries on the environment. Although requirements for setting up a network of Marine Protected Areas (MPAs) is initially derived from the 1992 convention on biodiversity, there has been little progress on their establishment so far. In order to integrate shing 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 shing. It is known that there has been a rise in temperature in the North Sea, and a recent article in Nature 1 has shown this has affected the distribution of plankton species which are part of the food for juvenile cod although this article also states that over-shing is nevertheless the primary cause of the decline in cod stocks. A variety of marine predators also feed on sh: birds, seals, porpoises and other cetaceans which eat just as much sh as seals. They target non-commercial as well as commercial species, and the preferred food of seals, for example, is sandeels. Culling of seals is sometimes advocated to alleviate pressure on sh stocks, but there is no evidence that this would have the desired effect.
The Role of Aquaculture

47. Aquaculture has sometimes been viewed as being able to replace the shortfall caused by declining capture sheries. It is currently a major sector of the shing industry and has grown at about 10% per annum in the ten years up to 2002. It is dominated by the production of salmon yielding 145,000t in 2002. It accounts for ca. 50% of Scotlands 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. Signicant investment has taken place in Norway, with the most optimistic estimates suggesting a production of 400,000t in the next 10 15 years. The British Marine Finsh Association suggests that 30,000t annually may be produced by 2013. However, there are current problems in 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 the foreseeable future and will not be able to substitute signicantly for wild-caught cod in the short to medium term. Also, aquaculture production of both salmon and cod relies heavily on the use of shmeal and sh oil, derived mainly from Southern hemisphere industrial sheries. We recommend that further research should be carried out into the substitution of sh oil in farmed sh diets with plant oil as a means of promoting sustainability of industrial sheries. (para. 6.29). While there is public concern over the environmental impacts of aquaculture, the impact in Scotland is very strictly controlled. 50. The Scottish Executives recently launched Strategic Framework for Scottish Aquaculture envisages that an essential feature of future development will be diversication into species additional to the current mainstays of salmon, rainbow trout and mussels. We recommend that 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).
Management of Scotlands Fisheries for Sustainable Development

51. Under the current CFP, the highly centralised process by which policy is determined and decisions made suffers from a number of serious weaknesses: lack of clear long-term vision for the future of European sheries; reactive rather than proactive approach to sheries 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 falls short of what is ultimately needed, and the proposed regions (such as the North Sea) are too large for efcient management, but it offers the opportunity to begin the process of decentralisation and greater involvement of shermen. We recommend that Ministers should press the EU Commission to set a timescale for the review of the RACs so that transfer of some management responsibilities to them can be considered. The shing industry should seize the opportunities presented by RACs to demonstrate a responsible role in sheries management. (para. 7.18).
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53. The Cod Recovery Plan proposed under the CFP is analysed. While we recognise that the exceptionally serious condition of cod stocks requires regulation targeted at cod, we consider that, in a multispecies shery, there are difculties in trying to manage a single stock. If the principal aim is to have a sustainable whitesh sector, the better option in the longer term may be to focus on maximising the harvesting potential from the full range of demersal sheries in Scottish waters. 54. We consider that illegal landings and discards are always likely to be problems so long as regulation of the demersal 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 Nephrops trawl sheries 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 as a guide for setting effort control. 55. We recommend that 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. 7.63). 56. Transferability and ownership of shing rights is an issue to which the Committee attaches importance, but the present situation needs clarication. We recommend that the UK sheries departments, in collaboration with the shing industries, should undertake a wide-ranging review of the existing system of quota management having regard to the states responsibilities for the conservation and management of the sheries on the one hand, and the nancial 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 result of investment by the local Producers Organisation and the Shetland Islands Council, through their subsidiary body Shetland Leasing and Property Development Ltd. But we recognise that Shetland is in a unique situation with its oil revenues and that this course could not be readily followed by other local authorities that are dependent on tax revenues. 58. The management of Scotlands inshore sheries is in need of reform, and they face a distinct threat of overexploitation. A recent study2 has analysed the strengths and weaknesses of the existing system, and identied three guiding principles for future management which would be best achieved by the introduction of regional inshore management committees. Namely, that they should be conducted at the local scale; they should be stakeholder led; and that they should be based on an integrated approach to sheries and the marine environment. The Committee recommends that Scottish Ministers should establish inshore management committees on a local scale, led by the industry and should follow an integrated approach to sheries and the environment. (para. 7.70). 59. The systems of governance for Scottish sheries needs re-appraisal and the present gulf in understanding between shermen and scientists needs to be bridged. The industry needs to be more closely involved in its own management, with a responsibility for collaborating with the scientists and enforcing compliance and policy measures. As far as possible, technical issues relating to sheries management should be removed from the direct concern of the Executive. 60. We offer three suggestions that should help to meet these objectives. (1) A new body governed by a board appointed by the Scottish Fisheries Minister with members drawn from the industry and other lay members with relevant expertise. The body would take over FRS and Scottish Fisheries Protection Agency (SFPA) and advise the Minister 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 shing matters. This would be a deliberative body but provide an opportunity for all those concerned to debate the issues confronting the industry and try to reach a shared understanding. This third suggestion could of course be combined with either of the other two. 61. We recommend that Scottish Ministers should seek to bridge the gulf between shermen and scientists and should consider our alternative proposals for restructuring the institutional arrangements for sheries management as set out in Chapter 7. (para. 7.88).
Building a Sustainable Future

62. A successful shing industry has to be both protable and sustainable; only then can it ensure the future viability of shing dependent communities. Although the pelagic and shellsh sectors meet this requirement, the whitesh sector does not. Most stocks in this sector are in a serious condition and even the current relative abundance of haddock is due to a single year-class. White sh stocks therefore need to be rebuilt and then conserved with a shing mortality that allows maximum sustainable yield to be maintained. It will require several years 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 cause further decline in employment in all three sectors of the catching industry. This would simply continue the trend of the last decade, but it needs to be recognised, and the various development agencies and local authorities need to do all they can to diversify the economies of the shing dependent communities. 64. But provided the industry is well managed and on a basis that is sustainable, we envisage a good future for the industry. It should continue to play a key part in Scotlands economy and providing a livelihood for the shing dependent communities.
References
Beaugrand, G., Brander, K.M., Lindley, J.A., Souissi, S. & Reid, P.C. (2003), Nature 426: 661-664. Symes, D. & Ridgway, S. Inshore Fisheries Regulation and Management in Scotland: Meeting the Challenge of Environmental Integration. University of Hull, 2003.
2 1
xi
Glossary
Term
Benthic Biomass Blacksh
Meaning
Fish and other organisms that live on the sea bed. The amount of living matter (as in a unit area or volume of habitat). Fish landed illegally, often at night or in small unregulated harbours (sh 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 shing Large-scale shing for low-value sh (e.g. sprat, pout and sandeel) to produce sh 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 uctuations Oscillation in temperatures, rainfall and storminess over much of Europe. It is measured by the winter surface 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 and wetter 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, and southern 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 ora of freely oating, 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, oating 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 sh Round sh (such as cod, whiting, mackerel) as opposed to at sh, (such as plaice or dabs). Shellsh Generic term for Nephrops, lobster, all prawns, shrimps, crabs, molluscs (including scallops, mussels, razor shells and cockles). Spawners Egg-producing sh. Technological creep Increased productivity with less manpower as a result of investment in more and better capital equipment. Whitesh Fish with white esh (mostly demersal) as opposed to oily sh such as herring and mackerel (mostly pelagic). Zooplankton Small oating or weakly swimming planktonic animals that drift with water currents and, with phytoplankton, make up the planktonic food supply.
xii
Abbreviations
ACFA Advisory Committee on Fisheries and Aquaculture ACFM Advisory Committee on Fishery Management Limiting Biomass Blim Precautionary Biomass Bpa CBD Convention on Biological Diversity CFP Common Fisheries Policy CITES Convention on International Trade in Endangered Species CPUE Catch Per Unit Effort DEFRA Department of the Environment, Food and Rural Affairs EBFM Ecosystem-Based Fisheries Management EcoQOs Ecological Quality Objectives EEA European Environment Agency EEC European Economic Community EEZ Exclusive Economic Zone EIA Environmental Impact Assessment ERDF European Regional Development Fund ESC Economic and Social Committee ESF European Social Fund EU European Union EUR Euros F Fishing Mortality FAO UN Food and Agriculture Organisation FDC Fisheries Dependent Communities FIFG Financial Instrument for Fisheries Guidance Limiting Fishing Mortality Flim Precautionary Fishing Mortality Fpa FRS Fisheries Research Services FU Functional Unit GDP Gross Domestic Product GOV Grande Ouverture Verticale trawl HIE Highlands and Islands Enterprise IBTS International Bottom Trawl Survey ICES International Council for the Exploration of the Sea IFQ Individual Fishing Quota IFREMER Institut franais de recherche pour lexploitation de la mer (French Research Institute for Exploitation of the Sea) LPUE Landing Per Unit Effort ITQ lim M MAGP MPA MSY N NAO NFFO NGO NPV NTZ OSPAR OST pa PO RAC RIMC RSA RSE SAC SEERAD Individual Transferable Catch Quota Limiting Value Natural Mortality Multi-Annual Guidance Programme Marine Protected Area Maximum Sustainable Yield The number of sh in each year North Atlantic Oscillation National Federation of Fishermens Organisations Non-Governmental Organisation Net Present Value No Take Zone Oslo and Paris Convention Ofce of Science and Technology Precautionary Limit Producer Organisation Regional Advisory Council Regional Inshore Management Committees Regional Selective Assistance Royal Society of Edinburgh Special Areas of Conservation Scottish Executive Environment and Rural Affairs Department SEPA Scottish Environmental Protection Agency SFF Scottish Fishermens Federation SFPA Scottish Fisheries Protection Agency SHOAL Shetland Oceans Alliance SIC Shetland Islands Council SLAP Shetland Leasing and Property Development Ltd. SSB Spawning Stock Biomass STECF Scientic, Technical and Economic Committee on Fisheries SURBA Survey-Based Assessment software package TAC Total Allowable Catch TCM Technical Conservation Measures TTWA Travel To Work Area UN United Nations VCU Vessel Capacity Unit VPA Virtual Population Analysis WGDEEP ICES Working Group on Deep-sea Fisheries Resources WWF World Wide Fund for Nature
xiii
Contents
1 Introduction
Background The Role of Scientists in Fisheries Management The Marine Environment Scottish Fisheries Structure of the Report 1 1 3 3 3 4
2 The Origins of the Common Fisheries Policy

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

The Scottish Fishing Industry The Fish Catching Industry The Catching Industry as a Business (a) Pelagic Sector (b) Shellsh Sector (c) Demersal Sector Aspects Inuencing Commercial Success (a) Control and Regulation (b) Finance (c) Technology and Competitiveness (d) Ownership Structure (e) Involving Industry in Policy Decisions The Social Impact of the Decline in Employment (a) Pelagic Sector (b) Demersal Sector (c) Shellsh Sector (d) Support Services Industry Overall Employment Impact in the Catching Sector and its Supporting Services Sector Impact by Area (a) The North East Coast (b) Shetland (c) Caithness and Sutherland (d) Other Areas The Processing Industry Conditions of Success in the Processing Industry The Outlook for the Processing Industry
12 12 12 17 17 17 17 18 18 18 19 20 20 20 21 21 21 22 22 22 22 23 24 24 25 26 27
xiv
4 The Science of Stock Assessment and its Role in Fisheries Mangement

Assessment Methods and their Reliability Fishery Dependent Methods Age-Structured Stock Assessment Methods: Virtual Population Analysis Alternatives to VPA Conclusions on Age-structured Stock Assessment Methods Indices of Catch per Unit Effort (CPUE) Unrecorded Catch Data from shermen Fishery Independent Methods International Bottom Trawl Surveys (IBTS) Surveys of Fish Larvae Egg Survey Method Acoustic Surveys Video Surveys Setting of Total Allowable Catches Review of ICES Scientic Advice on the Major Fish Stocks Demersal stocks North Sea Cod Area IV Spatial Considerations History and Causes of Decline in the Cod Stock Recruitment Precautionary Limit West Coast Cod (Sub Areas VIa and VIIa) Future Prospects for Cod The Cod Recovery Programme An Assessment of Recovery Strategies for Cod North Sea Haddock Whiting Monksh Nephrops Pelagic Fisheries North Sea Herring Mackerel Management of Pelagic Fisheries Industrial Fisheries Deep-Sea Fisheries Overall Comments on Fisheries Science The Structure of Fisheries Science
29 29 30 30 31 33 33 33 34 34 34 35 36 36 36 37 37 37 37 40 40 41 42 42 42 43 43 45 46 47 47 49 49 50 51 51 53 53 54
5 Fisheries and the Environment

Introduction Ecosystem-based Management Environmental Policy and Fishing The Impacts of Fishing on the Environment Could Other Factors Inuence Fish Populations? Impacts on Other Species Marine Mammals and Fisheries Seabirds and Fisheries
56 56 56 56 57 58 59 60 60
6 The Role of Aquaculture
62
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7 Managing Scotlands Fisheries for Sustainable Development

Introduction Allocation of Management Responsibility The Policy Process Regional Advisory Councils Reforming the Management System: the Cod Recovery Plan Managing for Sustainability Balancing Capacity and Resources The Regulatory System A New Approach (a) The Demersal Sector Effort Control Technical Conservation Measures The Transferability of Fishing Rights (b) The Pelagic Sector Enforcement A Timetable for Change Inshore Fisheries Management An Ecosystem-Based Approach to Fisheries Management Taking the Politics out of Fishing
66 66 66 67 68 69 71 72 73 73 73 73 74 76 77 77 77 78 78 79
8 A Sustainable Future for the Industry

What has Been Wrong with the Policy? What Needs to be Done Now? Remedial Measures within Scotland
83 84 84 85
Appendices
Appendix 1: Appendix 2: Appendix 3: Appendix 4: Appendix 5: Appendix 6: Appendix 7: Appendix 8: Membership of the RSE Inquiry into the Future of the Scottish Fishing Industry Oral and written evidence submitted to the Inquiry and visits made List of Recommendations An Overview of the Demersal Scottish Fisheries FRS Sampling Area between 1997 and 2003 FRS Sampling results for cod, haddock and whiting between 1997 and 2003 ICES IBTS Sampling Area between 1997 and 2000 ICES IBTS survey, numbers caught at age for cod, haddock and whiting, by year 87 88 93 96 101 102 105 106
xvi
1 Introduction
Background
1.1 The Scottish shing industry has been managed under the European Unions Common Fisheries Policy (CFP) for several decades. It is now almost universally accepted that the CFP has failed to give adequate protection to important sh stocks. In consequence, an important part of the Scottish shing industry is in serious trouble. 1.2 For Scotland, and especially for the communities that depend on shing, the reduction in quota for cod and the restrictions on shing for whitesh generally are the cause of much distress. But the overriding concern must be to ensure that Scotland has a strong and sustainable shing industry for the future. We are convinced that it is possible to achieve this, but only if the right steps are taken. This report sets out the importance of this industry for Scotland, critically appraises the science that underlies management decisions, discusses alternative policies for conservation and makes recommendations for the future. 1.3 The current situation should be seen rst in the context of how and why shery management systems have had to evolve. Most of the worlds commercial sheries are currently being exploited at or beyond their ability to sustain themselves. The overwhelming problem faced by shermen, sheries and environmental managers, scientists and politicians everywhere is how to achieve an effective system of management. It should keep the shing industry and its activities to a level which successfully conserves sh stocks, minimises environmental impacts, and gives shermen condence of reasonable economic stability; this is what we understand by sustainability. 1.4 Sea shing is one of the few industries remaining where the resource on which it depends is in common rather than individual ownership. Where a resource is owned in common, it is not in the interests of any one person seeking to exploit it to try to conserve it. Rather, there will be a chronic tendency to over-exploitation and a race by all those trying to use it to maximise their share. This situation has been referred to as the Tragedy of the Commons3 and failure to address it has been a major aw in sheries management. 1.5 The shing industry, like others, increases its efciency as a result of technological progress year by year. In most industries this is seen as something worth striving for, because it raises productivity and hence wealth. More can be produced with less manpower, as a result of investment in more and better capital equipment. But in shing, this technological creep means that an industry that was once exploiting its natural resource well within the 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 shing industry, increases the pressure on shermen to catch as much as they can. A shermans primary concern will be to meet the interest and repayment obligations on the loan that nanced this investment. It is hardly surprising if this were to take precedence over any anxiety about the sustainability of the stock he is exploiting. 1.7 Before such over-exploitation of sheries became evident, management was somewhat ad hoc and based upon limited knowledge of sh stocks. It was known that sh catches uctuated, and this was at rst explained by natural events such as changes in temperature, currents and migration patterns. The picture became more complex when research showed that stocks were structured in terms of sizes and ages of sh, and that uctuations were related also to spawning and recruitment. These could not be controlled, but it was hoped to understand the inuence of the environment and describe for each species how spawning and recruitment were related to the size of the sh population. There were also reasonable assumptions that certain shing practices should be avoided; such as harvesting immature sh, spawning females or moulting crustaceans. 1.8 As it became recognised that intensive shing could be a major factor in reducing catches, the current philosophy emerged whereby management is focused on controlling the catching activity of shermen. This approach was developed over the decades following the Second World War. Recognition of the impact of shing on catches led to quantitative stock assessment by shery scientists becoming the main factor in guiding management decisions. This was underpinned by studies of population dynamics and the concept of maximum sustainable yield, which predicted that, in theory, a population would be most productive when harvested to a
level that sustained it somewhat below maximum natural size. It was further assumed that stocks would not decline to the point of collapse because the shery would become unprotable 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 shing to continue under increasingly difcult circumstances; increased knowledge of the areas favoured by sh; subsidies which skewed the economics towards more shing even as stocks declined. Occasional increases in sh population stimulated increases in shing capacity, but subsequent stock reductions did not lead to corresponding reductions in capacity. This ratchet effect generated a mismatch between the effort available (vessels, shermen, processing capacity) and the resource. In order to gain the immediate economic survival of the industry, emergency measures were introduced to reduce shing mortality: vessel decommissioning, increased mesh sizes, closure of whole sheries, regulations restricting the shing capacity of new vessels, and the introduction of quota schemes to share out the amount of sh to be caught. 1.10 On the biological side of sheries management, since excessive shing reduces the number of spawners and will reduce at some stage the recruitment of new sh, objectives switched from seeking maximum sustainable yields to maintaining a spawning stock biomass that was believed to be sufciently large to ensure adequate future recruitment. Although spawning is clearly related to recruitment, the relationship is not exact, so there are inevitable statistical uncertainties which affect predictions of future sh population size. As with any important procedures which involve risks, precautionary approaches become involved in setting safety margins, and this can result in catch limits sometimes appearing to be set unreasonably low. In some cases the work of scientists has failed fully to reveal the gravity of the threat to sh stocks, in others those responsible for management have taken the risk of paying insufcient regard to scientic advice because of short-term objectives such as alleviating immediate economic or political problems. However, if risks are taken continuously, some form of stock collapse is sooner or later inevitable. 1.11 There is a variety of methods by which management can attempt to control the catching activity of shermen. When the conservation measures in the CFP were introduced in 1983, the method was to set Total Allowable Catches (TAC) for each species in each shing area. The TACs formed the basis for allocating catch to the different shing nations on a xed percentage basis (relative stability). A major problem in implementing TACs in a multi-species shery is that when the quota for one species runs out, shing for others still within quota can continue, but the rst species will still be caught and so will either be discarded back into the sea or landed illegally. If the level of discards and illegal landings is signicant, the accuracy of stock assessment calculations is inevitably weakened. 1.12 Other types of management methods that aim to counter the race for sh are used in other parts of the world. Some employ a rights-based approach, which confers ownership of the resource on individual shermen, 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 later section of this report. 1.13 An unfortunate consequence of prolonged imposition of TACs under the CFP is that this traditional management system focuses simply on individual target species. However, such species are a part of a complex ecosystem and ideally they should be managed in a way which takes into account their position and importance within that ecosystem and especially when they are part of a multi-species shery, as is typical for sh 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 Scotlands geography means that its shery resource has historically been shared with other nations around the North Sea and on the west coast. This inevitably adds complexity to any management system, but the introduction of the CFP brought different complexities. The involvement of other nations in the European Union inevitably increased both the difculty and the slowness of decision-making. The centralisation of the CFP in Brussels markedly increased the sense of the remoteness of the Scottish shing industry from the decision-making process, especially since the European Commission receives scientic advice from ICES but does not seek parallel economic advice or advice on the state and future prospects from the industry. As sh stocks declined and TACs became more restrictive, discontent with the CFP has led to widespread demands in the Scottish shing industry for the UK to withdraw from it.
The Role of Scientists in Fisheries Management

1.15 Most systems of conservation work well when sh stocks are buoyant. The real test comes when they decline and shing effort has to be curtailed. Fisheries managers under the CFP rely upon scientists for advice on setting TACs. As sh stocks declined and cuts were recommended, scientists and the Council of Ministers at their annual meeting were seen by shermen to be unfairly restricting the industry, destroying their prots and cutting their incomes. Fishermen felt their experience was being ignored. Misunderstandings arose because of the differences between what shermen perceived as the state of the stocks and the assessments and predictions made by scientists. Such differences may be expected in this kind of management system, especially where the precautionary approach must include a safety margin to avoid the risk of stock collapse. Unfortunately, little attempt was made to reconcile these differences of view, nor did a mechanism exist to do so. The distrust that has grown between scientists and shermen has been exacerbated because scientists have a poor reputation at explaining themselves to the general public, who often have little understanding of the concept of risk. We formed the view early in our investigation that this gulf in understanding between scientists and the shermen is immensely 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 to provide the basic biological information for management if proper conservation of the stocks and a sustainable shery are to be achieved. While the shing industry criticises science, the lack of accurate data about the total amount of sh actually caught (i.e., including discards and illegal landings) makes it very difcult to assess present and future stock sizes within manageable limits of uncertainty.
The Marine Environment

1.17 Environmental issues also affect the shing industry. Chemical pollutants used to be regarded as a signicant threat to marine organisms, but experience has shown that sh are surprisingly resilient, and concern is now more for their market quality. Toxic algal blooms which can contaminate shellsh have become a major problem for our inshore sheries. More generally, marine ecosystem structures can be damaged by nutrient enrichment, leading to eutrophication, while the implication of global climate change has yet to be properly assessed. 1.18 The extraction of over one million tonnes of sh annually from the seas around Scotland is likely to have important consequences for the structure of marine ecosystems. There is evidence of changes in the population size of unexploited sh, and of changes in the genetic structure of exploited populations. The degree to which such changes are undesirable or detrimental is a matter for debate, and is currently being examined by the Royal Commission on Environmental Pollution. It is notable that environmental impact assessments have never been formally applied to sheries. 1.19 The increasing recognition of shing impacts on the environment has generated a range of legislative initiatives. Conservation legislation introduced under the EU Habitats Directive has led to the designation of Special Areas of Conservation (SAC) which may restrict shing activity within particular regions. These will add an additional layer of complexity in management, and may also introduce objectives which might differ from those of the CFP.
Scottish Fisheries
1.20 It is against such a background that this RSE Inquiry focuses on Scottish Fisheries. Scotland has always had a major involvement with the sea, with shing centred on near and middle-distance waters the North Sea, the west coast and further aeld in Norwegian and Faroese waters. More distant grounds were left mainly to English boats designed for such trips, which landed their catch at ports such as Hull, Grimsby and Leith. Scottish shermen also landed distant-ground catches at Leith and Aberdeen. The pattern changed in the mid-1970s when countries began to declare Exclusive Economic Zones (EEZ) extending to 200 miles and, in consequence, the distant grounds became closed to British shermen. The large deep-sea vessels could not operate economically in home waters, but the Scottish eet was much less affected. Today, in the league table of UK landings, Scottish ports 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 shing eet, the pelagic (gross earnings in 2002 of 98m)4 and shellsh (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 the more remote communities which are heavily dependent on shing. In 2002 the total employment in sea-shing in Scotland was 5,707 (Table 3.6).
Structure of the Report

1.22 In the course of our investigation for this report we have focused particularly on the catching sector, and visited many of Scotlands shing communities in the North East, Fife, the Highlands, Shetland and the Western Isles. We have had discussions with those responsible for sheries policy in Iceland and the Faroe Islands, as well as 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 widespread misunderstandings. The following chapter looks in detail at the economic, industrial and social consequences of the current situation in the Scottish shing industry. Two chapters then examine the science behind sheries management: the rst deals especially with stock assessment and the current state of key stocks, and the second with various environmental aspects. Chapter 6 explores the potential role of aquaculture, and Chapter 7 the key issues of necessary changes in sheries management. The nal chapter, Chapter 8, examines the sustainable future for the industry.
References
3 4
Garret Hardin, The Tragedy of the Commons, Science, Vol. 62, pp. 1,234-8. Scottish Fisheries Statistics 2002.
2 The Origins of the Common Fisheries Policy

2.1 The Treaty of Rome refers only briey to sheries. 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 sheries and products of rst 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 European Commission interpreted this as requiring a common policy also for sheries.6 It is somewhat curious, especially for countries where shing is an important industry, that it should be dealt with as a subset of agriculture in the Treaty. But in practice this is not important, as a quite distinct sheries policy has evolved. 2.3 In 1968 the rst proposals were put to the Council of Ministers for a Common Fisheries Policy. These were embodied in two Regulations, one on the common organisation of the market and the other on structure7. The Market Regulation required xed quality standards for sh to ensure that price regulations applied to the same product throughout the Community. Producers Organisations (POs) were to be established to regulate market supply and assist in stabilising sh prices; and a price support system was to be introduced. When the price fell below the intervention price for three successive days the product would be withdrawn and shermen compensated by the member state drawing on Community funds8. 2.4 The Structural Regulation provided for European funding to be available for modernisation and new vessel construction to remedy the differences in age of vessels and efciency between the eets of the original six member states and put them into a state where there was fair competition. Article 2.1 of the same regulation required that Community shermen be given equal access to all shing grounds within the jurisdiction of the six member states. There was provision, exceptionally, under Article 4.1 to reserve the use of certain shing grounds to local shermen. 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 difculty in reaching agreement on these provisions. But agreement on the two Regulations was eventually reached on the night of 30 June 1970, the day that negotiations were due to start for the accession of the UK, Ireland, Denmark and Norway. This was obviously not pure coincidence: 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 as settled policy. 2.6 Fishing was of much greater importance to the four candidate countries than to any of the six original EEC member states. Norway would have been the largest sheries nation had she entered the EEC; but the UK, Denmark and Ireland also had substantial sheries interests of major political importance9. The four, and especially Norway, found the principle of equal access up to the beaches unacceptable. Each of them had, at that time, exclusive rights for its own eet within six miles of shore and exclusive rights, subject to the maintenance of historical rights for other countries that traditionally shed there, between 6 and 12 miles of the shore. None of the waters beyond this had been claimed by any of these states and the same applied to the six member states of 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 Limits

2.7 The entry negotiations for the four candidate countries raised many problems, and shing was one of the most difcult. It absorbed a great deal of time and much skilled negotiation10. The applicants were mostly united
7 8
The market arrangements were set out in Council Regulation (EEC) No. 2142/70 and structural policy in (EEC) No. 2141/70. This was to be nanced by the guarantee section of the European Agricultural Guarantee and Guidance Fund (EAGGF).
in their stance, but Britains position was complicated by the conicting interest of the inshore and distant water shermen. The Scottish eet had a strong interest in seeing the 12 mile limit retained; but the UK Government was also pressed by the distant water eet, mainly but not solely based in England, which wanted to continue shing off Iceland, Norway and the Faroe Islands. The shermen in this eet were, of course, strongly opposed to any extension of territorial waters of any country. The drama of the cod war with Iceland was still to come, with Britains vain attempt to protect the interests of its distant water eet. 2.8 Eventually, it was agreed that the applicant countries would retain their 6 mile exclusive limits, and their 12 mile limits subject to existing historical rights, for substantial parts of their coastline. In 1983 these limits were renewed and the 12 mile limit extended to the whole coastline of member states; they were renewed on this basis in 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 sh stocks. 2.9 This outcome of the negotiations was considered by shermens representative bodies at the time to be a success11. The 1983 extension of the 12 mile limit to the whole coastline (including St Kilda and North Rona and enclosing the Minch) gave Scotland one of the largest areas of inshore shing in Europe, and the same limits as before 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 Ministers endeavour to have the existing 12 mile limits made permanent instead of being subject to renewal every ten years. 2.11 In January 1977, at the behest of the EEC, the UK and other member states extended their Exclusive Economic Zones (EEZs) to 200 miles or to the median line with other countries. This followed the extension of exclusive sheries limits by Iceland, Norway, the United States and Canada to 200 miles. By this time Norway had decided by referendum not to join the EEC, as had the Faroe Islands, which, as a Danish dependency, had the option to join but did not do so. This extension of the EEZ, although under British sovereignty, is subject to CFP rules under the terms of the Treaty of Accession.
Relative Stability: TACs and Quotas

2.12 In 1983 a conservation policy was included in the CFP. Total allowable catches (TACs) and quotas were introduced based on the principle of relative stability. This principle restricted competition in the interests of giving each member state a fair share and providing some stability for coastal communities dependent on shing, many of which were in areas where there were few alternative sources of livelihood. Quotas were allocated to member states in accordance with a key based on their historical share of the total catch; but these shares were modied under agreement reached at The Hague to give some preference for the special interests of some coastal communities dependent on shing, including Scotland, and to provide an element of compensation for loss of distant water shing12. The distribution of quota within member states was a matter for the internal arrangements of each state. 2.13 Since its introduction, the principle of relative stability, including The Hague Preferences, has been maintained. There appears to be support for it throughout EU member states, though some might wish it renegotiated to their own advantage. There is some persistent anxiety in shing communities that it might be abandoned, but this would certainly be opposed by most, if not all member states, and could be done only with their 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 its accession negotiations. This is partly due to the changes made during those negotiations and partly to the realities facing the industry that have brought about substantial changes in policy. Furthermore, the extension of each countrys 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 shing in the North Sea and other territorial waters, which substantially reduced pressure on sh stocks for a time. But in the years following the adoption of the policy there was a major expansion of the shing eet in EEC countries. By 1987 estimated gross registered tonnage had expanded by twice its 1970 value and by three times in terms of engine power (kW)13.
These arrangements, known as Hague Preferences, were agreed at a Council meeting in The Hague in October 1976. They are described in detail in Mike Holden, The Common Fisheries Policy, Fishing News Books, 1994, pp 41-50.
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2.15 The TAC and quota system created difcult problems for the regulation and management of sheries. There are three reasons for this: (a) effective enforcement of TACs is difcult and costly; (b) sh caught in excess of quota may be discarded back into the sea although legal, such discards are unacceptable from a conservation standpoint; and (c) sh caught in excess of quota may be landed illegally. If the amount of sh discarded and/or illegally landed is at all signicant, estimates of the proportion of sh stock removed by shing become unreliable. This in turn weakens the scientic process of stock assessment and the statistical procedures that underpin the setting of TACs for future years (see paras 4.21 and 4.22). There is no reliable estimate of the amount of sh discarded but it is acknowledged that the practice is widespread among EU eets and, in the course of our Inquiry we have heard anecdotal evidence giving very high volumes of illegal landings by Scottish demersal shermen; sometimes this has been put at 50% of legal landings, and sometimes for certain species 100% or even more. 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 that the cod shery should be closed completely, was however, the immediate cause of the crisis that led to this Inquiry. This cut prots, threatened the viability of the demersal eet, and required a reduction in eet capacity. While illegal landings might soften the immediate effect of this, they threatened the existence of the industry in the longer term, because they undermined the conservation policy. 2.17 The CFP has therefore neither preserved stocks nor maintained a healthy demersal shing industry. The scientic advice of ICES, which forms the basis of the proposals put by the Commission to the Council of Ministers, is not balanced by economic advice on how to maintain the industry, its size or its shape, or how it can be adapted to a viable role in the longer term. The result is maximum exertion of political pressure on Ministers and 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 CFP has failed. This view, though often inaccurate, does serious and profound damage to Scottish support for the EU more generally.
Quota Hopping
2.19 It has sometimes been suggested to us that there is a threat to Scottish shermen from EU nations that do not have a North Sea coastline, such as Spain, who may acquire resources that should be available to the Scottish eet. It is important to make clear that Spain does not have quota in the North Sea, while Scotland has about half the quota for demersal species in this area, and that the remainder is shared only by the other states that have North Sea coastline. 2.20 A threat to the principle of relative stability does however arise if shing enterprises in one member state acquire licence and quota in another; and if they then neither employ persons resident in that state nor land their catch there. This can be done only if the foreign shing enterprise registers a vessel and acquires both licence and quota from shermen in the state in whose waters it proposes to sh. It is not possible, under the terms of the EU Treaties, for one state to discriminate against a business or persons of another on grounds of nationality. But it is open to it to require operators of vessels holding licence and quota to have real and continuous representation on shore, and to be responsible for technical and commercial management of vessels. The state will also be responsible for allocation of quota between different types of vessel; it may require its vessels to be inspected at regular intervals, though not more than three times a year; and it may require crews to be subject to its rules as regards 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 EU nationalities shing in UK waters on this basis. This has happened mainly in England, where it dates from the years before Spain was an EU member. So far it has not been a major issue in Scotland. The EU obviously does not want to see the principle of relative stability eroded by this practice, and the conditions set out above constitute a considerable restraint, even if they cannot prevent the practice entirely. 2.22 If the Scottish shing industry is to continue and thrive, it is important that the principle of relative stability in its present form should not be circumvented in this way. It is also important that the purchase of quota by Scottish industry, much of which consists of owner partnerships, should not be disadvantaged by competition from shing companies from other countries with stronger nancial resources at their disposal. This is especially the case when seeking to buy quota from shermen leaving the industry. This may have implications for the structure of the Scottish industry, a subject that is discussed later in this report.
EU Grants for the Fishing Industry

2.23 Assistance is provided to the shing 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 in the UK, for new vessel construction. It is also available to part-nance decommissioning, to provide increased safety measures and for modernisation. It may be used to retrain shermen to improve their shing skills and for social measures. These last can take the form of early retirement schemes for shermen aged 55 with at least 10 years experience, who opt for retirement less than 10 years before the statutory retirement age. Grants of up to EUR 10,000 may be given to shing hands with at least 12 months experience, who lose their jobs when their vessel is withdrawn; and grants may also be given to shermen with at least 5 years experience to cover training costs, if they wish to diversify and leave the industry16. The European Social Fund (ESF) may also help with training for other occupations and the European Regional Development Fund (ERDF) can be used to grant aid new businesses. 2.24 Support from ERDF is available only in qualifying areas, but Peterhead, Fraserburgh and the other North East shing ports in Aberdeenshire and Moray qualify as an Objective 2 area and Shetland may receive transitional aid until 2006 as a former Objective 1 area17. This is in contrast to the situation under UK regional policy 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 both wasteful and damaging when sh stocks are endangered. They are to be ended in 2004, but it may be several more years before all the vessels aided under this scheme are added to shing eets. The UK has not made use of FIFG either for retraining shermen for other occupations or for early retirement. For the period 2000 to 2006 the UK has an allocation from FIFG of EUR 215.6 million including: EUR 63 million for decommissioning; EUR 47 million for processing and marketing; EUR 30 million for ports and harbours; EUR 1 million for inshore sheries. 2.26 There may be some inhibition preventing maximum use of the Structural Funds because of the rather byzantine nancial 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 grant would not normally exceed 50%, except in Objective 1 areas where it can be higher. This means that the Scottish Executive would have to provide matching funding. Furthermore, money from any of the EU Structural Funds would be available only if the proposed project accorded with a priority set out in the member states Single Planning Document approved by the EU for the period up to 2006. The EU requires the principle of additionality to be satised that is to say that the EU funds lead to a project going ahead that would not otherwise do so. EU funds 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 received from the EU. Such funds are included within the public expenditure totals that it controls. The Scottish Executive has a budget line for EU funds but, since the Scottish Departmental Expenditure Limit is not increased if more EU funds are received than expected, the more success there is in obtaining EU funding, the less the Executive can spend 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 Council in 1984 at Fontainebleau, UK contributions to the EU budget are subject to an abatement equal to two thirds of the difference between its contributions and its receipts under Community programmes18. Receipts from the Structural Funds therefore reduce the abatement to the extent of two thirds of any money received. This abatement is of major importance to the UKs EU budgetary contribution, but, not surprisingly, it blunts any enthusiasm 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, it does not seem right that qualifying areas, which are clearly threatened economically, should not be able to make
The 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 for Fisheries Guidance (FIFG). 17 Aid from EU Structural Funds is given in accordance with three Objectives which set out priorities. Objective 1 is for areas where GDP per head is less than 75 % of the EU average and is the highest priority; Objective 2 is for areas undergoing industrial reconversion or for disadvantaged rural areas; Objective 3 applies only to the ESF and is available throughout the EU.
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maximum use of EU funds intended for this purpose; funds which, after all, would be available to their counterparts in other EU countries. 2.31 We therefore recommend that 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 diversication of sheries dependent areas.
Withdrawal from the CFP?

2.32 Many shermen we met, and those who supported them, believe that the United Kingdom should unilaterally leave the Common Fisheries Policy. This view was particularly strongly held in Shetland, where the shortcomings of the CFP were very apparent and could be contrasted with the apparent success of the independent sheries policy in the neighbouring Faroe Islands. Faroe, because it is a self-governing dependency rather than an integral part of Denmark, was able to remain outside the EU when Denmark joined19. While our Inquiry was in progress, both the Scottish National Party and the Conservative Party committed themselves to leaving the CFP and a Private Members Bill was introduced to the House of Commons with the aim of achieving this. 2.33 Despite the United Kingdoms sovereignty over its EEZ, we believe it cannot simply withdraw from the CFP without also withdrawing from the EU, something the Government has made clear it will not do. Under the terms of its Accession Treaty the UK undertook full participation in the Common Fisheries Policy, subject to the very substantial amendments made to that policy during the accession negotiations and subsequently20. The UK therefore cannot leave the CFP without renegotiating the terms on which it is a member of the EU. If it tried to act unilaterally, there would be a very grave crisis which would not only involve infringement proceedings being taken against the UK at the European Court of Justice, but could well degenerate into a trial of strength between EU shermen and the UKs sheries protection service. In practice the UK would almost certainly have to leave the EU. 2.34 Neither is renegotiation to leave the CFP a realistic option. Membership of the EU involves participation in its common policies and only in the case of monetary union, and for a short time social policy, have Britain or other member states negotiated opt-outs. Such opt-outs were for new policies that Britain and other member states did not feel able to join when they started and were, of course, subject to the opt-outs being agreed by other members. There is no example of a member state negotiating an opt-out from a common policy that already applied to it. A proposal to opt out of the CFP would be strenuously resisted by other member states, who would see it as a means of excluding their shermen from parts of the sea in which historically they have always shed; or at the very least a means of reducing their entitlement to sh in such waters. They would almost certainly take the view that the UK would have to leave the EU; and, whether it did or not, they would feel entitled to take discriminatory measures against the UK, which could be gravely damaging to the UKs interests as a whole. 2.35 It is worth noting that between 60% and 70% of Scottish manufactured exports go to markets in the EU and associated countries21. Scotlands economy exports more per head than the average for the UK and is therefore heavily dependent on these markets. Moreover, foreign direct investment, which accounts for much of these exports and about a third of Scottish manufacturing output, has chosen to locate in Scotland because it provides a good base from which to serve the European market. No course of action which put this at risk, even if it offered some benet for the shing industry, could be in the interests of the Scottish economy as a whole. 2.36 Nor would such a course provide a straightforward benet to the shing industry. The UK could not expect to reject the parts of the CFP it does not like and continue to benet from the remainder. Access to European markets is important for the industry and especially for the produce of aquaculture; support prices and EU marketing arrangements provide further benet. 2.37 Whether in or outside the EU, British assertion of control over its EEZ would have repercussions over British access to the EEZs of other EU countries. If Britain tried to solve its problems over sh stocks by excluding the vessels of other countries, they could be expected to retaliate in kind. Fish pay no regard to which nation is claiming jurisdiction over the water they swim in; if depletion of the stock is to be avoided, conservation policies will be more effective if they are applied in a consistent way across the North Sea and in the waters to the west
19 Faroese representatives participated in the Danish negotiating team, but although Denmark had the right to include Faroe when it joined the EU, this was resisted in the islands and never implemented. (see Sir Con ONeill, op. cit.).
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and south of the British Isles. In the absence of an EU or a CFP there would probably be bilateral negotiations between all the states that have a North Sea coastline, just as there are at present between the EU and Norway. But given the number of countries that would be involved and the complexity of such negotiations, it might not be long before it was realised that it would be better to manage the North Sea as a common resource with some kind of 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 will not be easily carried through. 2.39 But an issue which lies at the centre of these difculties was the initial decision to treat sheries resources as an exclusive EU competence rather than a shared competence between the Council of Ministers and national governments. 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 have adopted the Euro; commercial policy and the customs union; and the conservation of marine biological resources under the common sheries policy. Article 13 then goes on to list among the areas of shared competence: agriculture and sheries, excluding the conservation of marine biological resources. This means that responsibility for devising measures to conserve sh stocks rests with the EU alone and the role of nation states is limited to carrying those policies into effect. 2.40 It is surprising that marine biological resources, alone of conservation issues, should be given this degree of prominence alongside monetary policy and commercial policy. The logic might seem clear enough: that conservation of sh stocks requires a uniform approach rather than a patchwork of different policies pursued by individual 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 proposed Constitution. 2.41 We understand that the view taken by UK Ministers is that the text of the proposed Constitution on sheries makes no change to the present position. That does not seem to us a valid reason against trying to get it altered. We believe such an alteration is desirable: rst, because the CFP in its present form is much too centralised; and, second, because the effect of enlargement to an EU of 25 members (many of whom have no interest in the North Sea but are members of the Fisheries Council) will make it even more difcult to reach sensible and speedy decisions. 2.42 The principle of subsidiarity was rst articulated in EC law by the Maastricht Treaty, but strengthened by a Protocol in the Amsterdam Treaty, and taken forward in the draft Constitution which further strengthens the denition. Yet it does not apply to sh stock conservation, since the EU is given exclusive competence23. Were it a shared 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 justied as better taken at a higher level would be taken there. Yet much of what is wrong with the CFP, as this report argues later, arises from over-centralisation and decisions taken without sufcient input from the industry or from the areas that are dependent on shing. 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 sheries policy will only succeed if those whose livelihood depends on it make it so; this requires consultation and some sense of ownership by the industry locally. This is what the principle of subsidiarity is about and we believe that it should be applicable to sheries. The proposed Regional Advisory Committees (RACs), which are discussed later in this report (see Chapter 7), are a step in this direction but their role is advisory rather than executive; furthermore, it remains to be seen how they will operate and how much inuence they will have. The Committee therefore believes that this aspect 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 EUs 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 sheries, as it does to other matters.
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References
Treaty Establishing the European Economic Community. Mark Wise, The Common Fisheries Policy of the European Community, London: Methuen 1984 pp 85ff. 7 The market arrangements were set out in Council Regulation (EEC) No. 2142/70 and structural policy in (EEC) No. 2141/70. 8 This was to be nanced by the guarantee section of the European Agricultural Guarantee and Guidance Fund (EAGGF). 9 Sir Con ONeill, Britains Entry into the European Community, Report on the Negotiations of 1970-1972, London: Whitehall History Publishing and Frank Cass, 2000. 10 A good account is given of these problems in Sir Con ONeill, op.cit. 11 Sir Con ONeill, op. cit. 12 These arrangements, known as Hague Preferences, were agreed at a Council meeting in The Hague in October 1976. They are described in detail in Mike Holden, The Common Fisheries Policy, Fishing News Books, 1994, pp 41-50. 13 Mike Holden, op.cit, p. 22. 14 See 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. 15 The 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 for Fisheries Guidance (FIFG). 16 European Commission, Financial Instrument for Fisheries Guidance: Instructions for Use, 2003 updated edition. 17 Aid from EU Structural Funds is given in accordance with three Objectives which set out priorities. Objective 1 is for areas where GDP per head is less than 75 % of the EU average and is the highest priority; Objective 2 is for areas undergoing industrial reconversion or for disadvantaged rural areas; Objective 3 applies only to the ESF and is available throughout the EU. 18 Memorandum by HM Treasury submitted to House of Lords European Communities Committee (Subcommittee A), Session 1998-99, paper HL 36, paragraph 8. 19 Faroese representatives participated in the Danish negotiating team, but although Denmark had the right to include Faroe when it joined the EU, this was resisted in the islands and never implemented. (see Sir Con ONeill, op. cit.). 20 Treaty Concerning the Accession of the Kingdom of Denmark, Ireland, the Kingdom of Norway and the United Kingdom of Great Britain and Northern Ireland to the European Economic Community and the European Atomic Energy Community, London: HMSO, January 1973, Cmnd 5178-I 21 Scottish Council for Development and Industry, Surveys of Scottish Sales and Exports in 2000/2001 and earlier years. 22 Draft Treaty Establishing a Constitution for Europe. The European Convention, July 2003. 23 Council of the European Communities, Treaty on European Union, Luxembourg, 1992, see especially Title I Common Provisions, Articles A and B, and Title II Provisions amending the Treaty establishing the European Economic Community etc, Article G section B Article 3b.
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3 The Economic, Industrial and Social Impacts

The Scottish Fishing Industry
3.1 It is sometimes asserted that the shing industry is not of major importance to the economy. This may be true in UK terms, where the output of the sh catching sector amounts to only 0.05% of GDP, though this gure would probably have to be approximately doubled if aquaculture and sh processing are included24. But in Scotland its importance is much greater. Although Scotland has only 8.6% of the UK population, the Scottish sh catching sector accounted for 62% of the value of sh landed in the UK in 200225. Scotland has 2,513 shing vessels, 36% of the total UK eet in December 2002, but 827 vessels were over 10 metres, 47% of the UK total in this category and 60% by tonnage. 3.2 The direct employment in the three sectors catching, aquaculture and processing was 19,800, or about 0.9% of Scottish employment in 199926. Of this, the catching sector accounted for 7,800, aquaculture 1,600, and processing 10,40027. This still does not suggest that it is anything other than a fairly minor component of the total Scottish economy. But these gures do not take account of jobs dependent on the shing industry in activities such as ship repair, equipment supplies, marketing and transport, nor do they take account of the secondary effects of income spent by the sector, known as the multiplier. When these indirect and induced effects are included, the total for sheries 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 on North Sea oil when that operation was at its peak. Moreover, like agriculture and unlike many other industries that 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 scale that could replace it. Figure 3.1 shows the direct employment in the three shing industry sectors by coastal Travel To Work Areas (TTWA) and Figure 3.2 the total sheries dependent employment (direct, indirect and induced) by TTWA in 1999. Fraserburgh has the highest direct employment, amounting to 29% of the local workforce, followed by Peterhead 14%, and Shetland 11%; and the same percentage gures, though lower totals, apply in Keith and Buckie and in Berwickshire. Employment in the Western Isles is also substantial, amounting to about 10% of the workforce. Annan has about 17% of the local workforce dependent on the industry, but this is almost entirely because of a heavy concentration of the processing industry. Aberdeen also has a substantial concentration of the industry, but mainly in processing and, because of the large size of Aberdeens labour market, accounting for only a small proportion of the total labour force. 3.4 The gures for sheries dependent jobs (direct, indirect and induced) in Figure 3.2 give a similar picture but, as might be expected, indicate a much higher local dependency on the industry. In this case over half the employment in Fraserburgh TTWA is dependent on the shing industry, while Annan, Peterhead, Shetland, Berwickshire and Buckie depend on the industry for between 20% and 35% of their employment.
The Fish Catching Industry

3.5 This report is mainly concerned with the catching industry and because the pelagic and shellsh parts of the industry are relatively protable, 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 the shellsh sector could be easily upset if whitesh boats for lack of demersal quota turned to shellsh. Table 3.1 shows sh landings by the principal ports in 2002. Almost all of the pelagic landings are in the North East ports of Peterhead and Fraserburgh, and in Shetland. Demersal landings are concentrated in the same ports but with the addition of Aberdeen, Lochinver, Scrabster and Kinlochbervie. Shellsh, by contrast, are spread much more widely between these ports and those on Scotlands west coast and the Western Isles28.
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Figure 3.1: Percentage of Direct Local Employment in the Fisheries Sector, by Coastal Travel To Work Areas in Scotland, 1999.
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
Note: Table shows the TTWAs with more than 1 per cent of local employment in sh production. The other TTWAs each have less than 1 per cent of their local employment in the sheries 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 sh landed here in 2002 was over 40 million, of which 74% was from foreign vessels (Table 3.2); this makes it by value, after Peterhead, the second port for sh landings in Scotland. Lochinver, Kinlochbervie and Scrabster are also used extensively by east coast shermen who base their boats there when shing in the waters west of Scotland. The local employment dependent on the demersal sector in these ports is therefore quite small and much less than the gures for sh landings might suggest. The main impact of a scaling down in the demersal sector will therefore be felt in the North East shing ports, in the Black Isle, where many shermen live who sh on the west coast, and in Shetland. 3.7 As Table 3.3 shows, the total number of Scottish-based shing vessels in November 2003 was 2,447 of which 1,668 were 10 metres or under, and therefore mainly inshore vessels, and 779 over 10 metres29. The number of vessels under 10m has increased by about 100 in the ten years since 1993. The vessels over 10m, on the other 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 shellsh boats over 10 metres from 640 to 412, a reduction of 228 or 36%. In the demersal sector there were 641 vessels in 1993,
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falling to 340 by November 2003, a reduction of about 47%. The Committee understands that in the decommissioning rounds of the last two years, 170 vessels left this sector, not all of which may yet be accounted for in these gures. By the time this report is published this sector may therefore be down to about half the number of vessels it had in 1993. Figure 3.2: Percentage of Total Fisheries Dependent Employment in the Fisheries Sector by Coastal Travel To Work Areas in Scotland, 1999.
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 Per cent 40 50 60 70
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 shing effort or the number of sh landed. Over the ten years since 1993 there has been considerable technological advance, so that a vessel can catch substantially more than it did then and vastly more than 30 years ago. In the pelagic sector there has been a move to highly sophisticated very large vessels so that although the number has fallen the tonnage of the eet and horsepower have both increased30. It is hardly surprising, therefore, that the tonnage of sh landed in 2002 was substantially greater than in 1997 (Table 3.4). In the shellsh sector there was little change. In the demersal sector, however, the recorded tonnage landed in 2002 was only about half that landed in 1997. This was a consequence of substantial reductions in quota since 1999, and probably increasing scarcity of resource; but whether it gives a true indication of the fall in shing effort must be open to doubt, in the light of the high numbers of illegal landings referred to elsewhere in this report.
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Table 3.1: Fish Landings into Scottish Ports 2002 by UK Vessels. million Peterhead Shetland Fraserburgh Wick/Scrabster Aberdeen Ullapool Lochinver Kinlochbervie Stornoway Mallaig Oban Campbeltown Ayr Portree Others* Total Demersal 36.9 10.0 10.0 17.6 13.3 6.9 8.0 8.2 0.4 1.9 0.6 0.2 1.0 0.4 3.9 119.3 Pelagic 17.4 24.9 5.4 0.1 0.3 0.2 48.2 Shellsh 5.5 .7 14.9 6.1 2.7 4.2 2.7 1.3 8.7 6.3 7.7 7.3 6.4 6.6 10.0 92.1 Total 59.8 36.3 30.2 23.7 16.1 11.2 0.8 9.5 9.1 8.4 8.2 7.6 7.4 7.0 14.3 259.6
*Harbours where landings were less than 5 million a year. These include Orkney, Eyemouth and Pittenweem. Source: Scottish Fisheries Statistics 2002 000 tonnes Peterhead Shetland Fraserburgh Wick/Scrabster Aberdeen Ullapool Lochinver Kinlochbervie Stornoway Mallaig Oban Campbeltown Ayr Portree Others Total Demersal 37.5 10.5 12.8 16.1 15.4 6.5 6.4 6.9 0.6 2.3 0.6 0.3 0.8 0.4 4.9 122.0 Pelagic 53.4 69.1 16.4 0.1 1.0 0.2 0.1 0.2 2.7 0.2 0.1 143.4 Shellsh 2.0 1.1 6.7 4.9 1.2 1.8 0.9 0.6 3.7 3.1 4.3 4.1 8.4 2.1 5.9 50.8 Total 92.9 81.0 36.0 21.1 17.6 8.5 7.4 7.6 4.3 8.0 5.0 4.5 9.3 2.6 10.5 316.3
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Table 3.2: Landings into Caithness and Sutherland 2002. Percentage Kinlochbervie Lochinver Scrabster Wick By value in 000 Cod Haddock Whiting Monksh Other Demersal Pelagic Nephrops Other shellsh Total Kinlochbervie 847 1,356 145 2,537 3,253 37 762 297 9,234 Lochinver 454 685 54 2,034 34,860 18 2,486 333 40,924 Scrabster 7,948 8,145 500 3,829 9,914 30 688 3,915 34,969 Wick 43 144 15 13 24 0 152 929 1,320 Local 20 6 9 94 Rest of Scotland 80 12 43 6 Rest of UK 0 8 11 0 Foreign 0 74 37 0 Total 100 100 100 100
Source: Grangeston Economics, Economic Impact of White Fishing Quota Cuts in the Case Area, Draft report for Caithness and Sutherland Enterprise, Inverness, 2003. Table 3.3: Active Scottish Based Vessels. Over 10m Pelagic Shellsh 52 640 49 576 45 522 40 460 36 441 27 412 10m & under Sub-total 1,333 1,168 1,111 981 950 779 1,562 1,588 1,659 1,604 1,645 1,668 Total 2,895 2,756 2,770 2,585 2,595 2,447
1993 1995 1997 1999 2001 2003*
Demersal 641 543 544 481 473 340
* As at 13 November Table 3.4: Fish Landings by Species Type. 000 tonnes 1997 2002 225.1 122.0 107.0 143.4 54.7 50.8 386.8 316.2 223.1 130.0 54.6 407.7 35.8 162.2 0.4 198.4 117.4 150.3 51.7 319.4 15.3 110.8 0.4 126.5
Source: Scottish Fisheries Statistics
million 1997 168.3 21.4 89.3 279.0 166.9 25.1 90.0 282.0 27.5 48.6 1.2 77.3 2002 119.3 48.2 92.1 259.6 114.9 49.9 92.5 257.3 21.7 47.9 1.3 70.9
UK vessels into Scotland
Demersal Pelagic Shellsh Total Demersal Pelagic Shellsh Total Demersal Pelagic Shellsh Total
Scottish vessels into UK
Scottish vessels abroad
Source: Scottish Fisheries Statistics 2001 and 2002
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The Catching Industry as a Business (a) Pelagic Sector

3.9 The commercial performance of this sector suffered a near terminal setback during the 1970s, when the herring sheries had to be closed. As stocks recovered and as it became possible to separate the catching of herring and mackerel, the sector recovered, and mackerel became the dominant source of earnings. These trends encouraged a number of enterprising shermen to set about investing in the modernisation of the eet through the commissioning of new, state-of-the-art vessels. 3.10 By 2002, a Scottish eet of some 33 vessels (down to 27 towards the end of 2003) generated gross earnings of 98m (see Table 3.5), which compares with 45 vessels and gross earnings of 74m in 199731. Although nancial data on this eet are not available, the general view is that substantial protability and excellent returns on investment are being achieved. 3.11 The eet is efciently managed, as is its quota regime. This means that for the immediate future, earnings appear to be sustainable and may even be increased. Current prices also look to be sustainable, in large part because of the growing market into Northern Europe. Against this background, reasonable projections of income up to at least three years ahead can be made. This in turn will assist in encouraging further investment to maintain the efciency and competitiveness of the eet. 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) Shellsh Sector

3.12 Since 1998, this sector has experienced growth of around 2% a year; higher levels were obtained over the period 1985 to 1995, but there was then a sharp decline until 1998. The recent growth has been sustained by a modest increase in unit prices (15% from 1998 to 2002) across the sector32. 3.13 Recent nancial surveys have shown the protability (net prots excluding depreciation and interest) of the Scottish eet to be around 23% of turnover in 2001. Rates of return on capital were also high with a range of 30% to 40%. UK Survey results do not show separate data for Scottish creelers/potters but the protability of these vessels on a UK wide basis was also high ranging from 19% to 24% and with rates of return around 20%. An exception to these nancial 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 sheries; and also that whitesh vessels that are short of quota are diverting their efforts towards catching shellsh. The potential of the higher 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 protability of individual enterprises will depend upon appropriate rationalisation and modernisation of the large inshore eet. At the same time, there is a pressing need for improvements in quality and service, especially now that higher value products are being handled.
(c) Demersal Sector

3.15 This sector has a diversity of species and, although cod and haddock are important components, together accounting for 40% of the total, in absolute amount they represent only a modest turnover of 55m (see Table 3.5). Commercial performance of the sector has been dominated by the difculties especially over cod, but these have 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 interest to the British consumer and therefore to Scottish vessels. But this mix of species has led to an increase in the value of their landings of 74% between 1998 and 200234. Ironically, these landings are sent directly for processing to points nearer their end-markets in Europe. 3.17 In 1982, the Scottish demersal eet landed some 300,000 tonnes of sh. By 2002, that total had come down to 133,000 tonnes (see Table 3.4). Such a decline has severely affected commercial performance. By 1998, a relatively good year but when the slide had already been under way for some time, the earnings from cod and haddock amounted to 97m and in 2002 they were down to 55m, as just mentioned. Earnings from cod alone declined from 45m in 1998 to 24m in 200235. 3.18 Not surprisingly, nancial surveys have shown a correspondingly serious decline both in net protability (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.
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3.19 It is evident that the quota levels for cod and haddock in 2002 made a signicant proportion of the demersal eet no longer viable. The 1998 results indicate that if earnings were around 100m, reasonable returns could be achieved. 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 eet, although this decision should 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 98 83 10 5 94 56 18 6 14 137 31 24 24 9 6 5 38 % 85 10 5 3,650 60 19 6 15 1,727 23 17 17 7 4 4 28 30 64 Employment 330 % 6
Pelagic sector Mackerel Herring Other Shellsh sector Norway lobster (prawns) Scallops Crabs Other Demersal sector* Haddock Cod Monksh Plaice Ling Whiting Other
Note*: Out of this total, Scottish vessels landed 22m in foreign ports of which plaice accounted for 8m and monksh 3m. In addition to the total above, foreign vessels landed 50m in Scottish ports which included scabbard sh (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 of Scotland Whitesh Fleets, Sea Fish Industry Authority
Aspects Inuencing Commercial Success (a) Control and Regulation

3.20 The operation of the CFP means that earnings in the catching industry depend on the interaction between regulation and market forces. Moreover the regulatory decisions based on sh stock assessments have not been easy to predict. This uncertainty complicates decision making, especially in relation to capital investment and the adoption 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 support the catching industry. The cost of these support policies is set out at the end of this chapter (see Table 3.9), but what emerges is that, despite a disproportionate cost in relation to the earnings of the industry, especially as regards the demersal sector, the earnings of that sector have mainly reected variations in stock assessment. For the present at least, the demersal sector has become dependent on public intervention in one form or another.
(b) Finance
3.22 The way in which the shing eet has been nanced raises several problems. First, the asset base for lending by the institutions has generally been taken to include as collateral a valuation of a vessel and of the quota associated with it or acquired for it. In good times, the value of the vessel will be well underwritten by its resale potential, while the value of a quota will enjoy considerable appreciation to reect the entitlement to expanding earnings. In bad times, however, these features operate in reverse: the vessel loses its resale value; the quota value falls; and, the sharp decline in earnings savages the ability to service debt. Hence the nancial situation in which the demersal eet nds itself now.
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3.23 Secondly, as conditions deteriorate, nancial institutions become increasingly concerned about the recovery of their loans. In the case of overdrafts, which are a prevalent instrument in this industry, they progressively cut back the limits set, often at short notice. Working capital and other essential expenditures are then constrained. At the same time it is a feature of overdrafts that personal assets are included as collateral. The result 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 reect the life of the asset (that is principally the vessel) and indeed may only represent half or less of it. As a consequence, the debt servicing requirement becomes more onerous just when conditions facing the industry worsen. 3.25 The outcome is that, when government pays for decommissioning, the main beneciaries are the banks, who recover the loans that would have been largely lost if the vessel owners had gone bankrupt. Often the owners are left with relatively little. One may say that this demonstrates the imprudence of the banks in lending under these conditions and that they ought at least to have met some of the costs that are borne by government in nancing decommissioning. 3.26 These shortcomings are primarily a product of conventional lending practices. The stark contrast between the success now being enjoyed by the pelagic and some components of the shellsh sectors on the one hand, and the demersal sector on the other, demonstrates what can happen over a relatively short time. This problem applied also to the pelagic sector in the 1970s and it follows that if the pelagic or shellsh sectors were to enter a period of declining sh stocks in the future, they too would experience the exacerbating effects of current lending practices. 3.27 In our view the immediate debt service problem could best be resolved by a moratorium on debt servicing within the demersal eet. This would allow for an orderly rescheduling of debt on terms that would permit the eet to avoid bankruptcy, survive the present constraint on catching and permit a more orderly restructuring to enable the best equipped vessels to be retained for the longer term. In this process, overdrafts, excluding working capital requirements, should be converted into appropriately structured term loans. 3.28 In order to achieve this, we propose that the nancial institutions involved, together with the UK Government/Scottish Executive, should examine whether an arrangement can be negotiated. We think that the banks should be pressed to bear part of the cost of delaying interest payments, since if the industry was left to go bankrupt they would have to bear substantial loss. The UK Government/ Scottish Executive, however, will need to be prepared to underwrite some of the risk, if support from the private sector institutions is to be obtained. We think this could be a good deal for government, as well as the banks, especially if the policies for stock recovery are 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 nancing of the Scottish eet based on terms that are better able to withstand the uctuations in earnings that are a feature of this industry and are caused by the natural volatility of shstocks, 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 nancial arrangements come to be agreed; it might, for example, be enabled to raise some of its funds as equity, thereby reducing the industrys reliance on debt nance. One of the objectives of such a corporation should be to fund the application of the latest technology in the industry.
(c) Technology and Competitiveness

3.30 The purpose of decommissioning is to reduce capacity in the demersal sector so that the permitted amount of catch distributed among the remaining vessels is enough to produce a protable industry. So far it appears that many of the vessels being decommissioned are modern, rather than the older ones in the eet. It may be that the remaining eet 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 eet best able to face a competitive future. 3.31 The pelagic eet is now at the forefront of technology and efciency. Indeed, its standards compare favourably with anything available in other EU eets. But in the shellsh sector the standards are more variable and substantial investment may be needed, if it is to achieve the best levels of efciency and productivity. However, competition from other countries eets is not a factor in the inshore waters, so it may not be so urgent, especially for the smaller vessels shing in these waters. While investment would raise the productivity of the inshore eet, the manpower required would probably be sharply reduced.
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3.32 If investment is to be undertaken, whether in the demersal eet or the shellsh sector, some stability is required in the regulatory regime. At present the attempt to manage by quota for single species in a mixed shery has resulted only in instability. This is not a good climate for investment and is one more reason for trying to nd a better regulatory system than the TAC and individual species catch quota system.
(d) Ownership Structure

3.33 The traditional Scottish system of shared ownership, or owner skippers, though having many advantages and part of the way of life in shing communities, may not be well suited to an industry that requires to raise so much capital. The Scottish shing industry is in competition with the shing industries of other countries within the EU and cannot rely just on the principle of relative stability for protection. If it does, the pressure from foreign shermen to buy UK quota could become a more serious threat. Consideration therefore needs to be given to the advantages of reforming into a corporate structure. This would not be welcome to the industry, which feels much attachment to its traditional ownership structure. But it would make it easier to raise capital for investment without the problems of huge personal debt and to buy quota (whether catch or effort quotas) from shermen that retire. It would put the Scottish industry onto a similar basis to the shing industries of many EU countries. 3.34 Alternatively, quota could be held by Producers Organisations (POs) and rented out, if they could raise the necessary 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 have much to commend it, especially in facilitating the entry of young shermen to the industry. But we recognise that SIC had the advantage, not available to other Councils, of funding from its oil revenues. We also recognise that there would be difculties in using taxpayers money for this purpose, especially if competition between public bodies was involved, and that such schemes must not involve subsidy, if they are to avoid transgressing the EU rules on fair competition.
(e) Involving Industry in Policy Decisions

3.35 The environment essential for a successful industry also requires the industry to have a bigger part itself in determining the regulatory framework of the CFP. An example of how this should not work is provided by some recent decisions in the Council of Ministers: it was only after these were taken that the industry complained they would 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 and which required the industrys expertise to do so. Other features essential for success include a high level of compliance, once a regulatory regime is established, achieved as far as possible through co-operation and consensus. A public sector-led forum, which is suggested later in this report (see Chapter 7) might have a role to play in helping to achieve these ends. 3.36 If the sh catching industry is to assume more responsibility in determining management issues, this requires a more cohesive structure. At the moment the industrys representative bodies are fragmented. If the industry were able to come together under a single representative body and that body were to equip itself with some scientic expertise and to be well informed about management issues, we could see it entering into fruitful and 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 might achieve. This would not only help to bridge the gulf between the shermen and scientists but also lead to better informed policies being adopted. We therefore urge the representative bodies in the catching industry to consider how 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 the Scottish Fisheries Protection Agency to be given management boards for which some of their members would be drawn from the industry (see Chapter 7). This move would also help to bring the industry and scientists together in constructive dialogue and at the same time give them some responsibility for compliance with the catching regulatory 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 fall of 40% (Table 3.6). Much of this is due to increased efciency resulting from technological improvements. Employment is related quite closely to the number of vessels so that where, as in the pelagic sector, the number of vessels has fallen but sh landings and catching capacity have increased, productivity has risen. Productivity will also have risen in the demersal sector. But the loss of jobs in this sector also reects the reduction in shing effort
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as a result of reduced quotas and the vessels taken out of the eet through decommissioning. In the shellsh sector 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 shing for shellsh) rose by 7% from 1993 to 2003 (Table 3.3). It would seem that there has been a signicant increase in productivity in this sector. Clearly the scale of the reduction in vessel numbers in 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 proves necessary to have any further reduction in the number of demersal vessels to secure a sustainable and protable future 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 nite resource and increased productivity per vessel and per man in catching it. In this respect the shing industry is no different from agriculture where, despite an expansion in output, employment has declined steadily over the last century. Table 3.6 Employment in Sea Fishing in Scotland 1993-2002 1993 Total employed As a % of 1993 9,420 100 1995 8,395 89.1 1997 8,194 87.0 1999 7,330 77.8 2001 6,637 70.5 2002 5,707 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 and sheries dependent communities (FDCs) of the changes that will stem from further modernisation to make the catching sector a successful industry. It should be emphasised that such predictions are inevitably subject to a wide margin of error.
(a) Pelagic Sector

3.41 Despite the reduction in vessels from 54 to 27 in the years 1991-2003, aggregate tonnage and power increased by 106% and 34% respectively 37. The eet is the most modern in the catching industry with an average age of 12 years. Therefore, the size of the eet 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 to around 3% a year. If that were so, with employment of 270 at the end of 2003, job losses of up to 27 or so could occur by 2006.
(b) Demersal Sector

3.42 If it is assumed that multi-species management with a larger haddock quota assists in stabilising gross earnings, changes in employment over the next three years are still likely to arise from commercially driven adjustments 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 not possible to predict when this may occur. It is unlikely to happen in less than ve years. Signicant new investment in modernisation, along with more efcient and powerful vessels, could be encouraged by this prospect, but is unlikely in the next few years. Despite this, some technological progress and increased productivity will still occur. 3.44 The employment in this sector in 2002 was 1,727. But a signicant adjustment has to be made for the 2003 round of decommissioning, which involved some 70 vessels and would equate to around 350 jobs. As a result, the gure may be around 1,325 at the start of 2004. If technological creep reduced the manpower required by a further 10% during the period to 2006, a further 132 jobs could be lost.
(c) Shellsh Sector

3.45 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 for slightly under half those employed, a fair amount of whom will be part time. Between 1992 and 2002, the number 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, protability has declined39.
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3.46 All of this suggests under-utilisation of capacity and a lack of investment. Success for this group is predicated on reversing these trends and on signicant modernisation. The consequence could be a decline in employment and if this were to amount to 10% or so up to 2006, the loss of jobs from an estimated workforce in 2003 of 3,468 would be 346. If, in addition to this investment, technological progress continued as normal, on the same basis as with the pelagic eet, the loss of jobs could be even higher. However, this estimate is particularly difcult to make, as the small vessels and those over 10 metres may experience different trends. It is possible that the former may be less affected by competition or the pressure to modernise, and this may be why their numbers have been growing. If that proves to be the case, the decline in employment for the shellsh sector may be less than the 346 estimated. 3.47 The 2004 decision by the Council of Ministers to increase the prawn quota could add some 17m to the gross earnings of this group and should permit more vessels to improve their protability. But, it is unlikely to affect the underlying trends just mentioned. While the margin of error on all these predictions needs to be emphasised, it does seem likely that the reduction in employment in the shellsh catching industry over the next three years could be on a similar scale to that in the demersal sector, even without the problems with stocks that affect that sector.
(d) Support Services Industry

3.48 These services comprise a diversity of activities: shing agents, chandlers, engineering, electronic and software services and repair. Management and technological changes are resulting in reduced employment for a given number of active vessels. Yet, at the same time, the number of vessels is also falling, except for those under 10 metres. 3.49 Modernisation in the catching industry will generally result in larger and more powerful vessels, although there will still be a large number of small vessels. This can be expected to have some impact upon support services, but increased technical requirements associated with more sophisticated vessels will at the same time increase work for support services. 3.50 This makes it difcult to make predictions, but the support industry is quite large and even a small increase in productivity, combined with fewer vessels to support could have quite an impact. For example, if the combined effect 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 of 856 in the period up to 2006; and, if support services are included, this could rise to 1,18540. The loss in the catching sector amounts to 17%; a gure 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 reects the Committees view of the changes that are likely to stem from necessary modernisation of the eets some 70% arises from technological progress. This should not be viewed negatively but rather as a means of securing commercial success. Indeed, the assumption underlying these gures is that by the end of 2006, the eets will be stabilising close to a sustainable catching capacity.
The Impact by Area

3.53 The landings in Table 3.1 show that the shellsh sector is spread around the Scottish coast. The demersal and pelagic sectors on the other hand are heavily concentrated in the North East and Shetland, but with substantial landings, mainly from vessels from other areas, in Caithness and Sutherland. The heaviest impact of the present and any future reductions in these two eets will therefore fall in these areas.
(a) The North East Coast

3.54 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, the total for jobs dependent on the demersal shing sector comes to 3,338. 3.55 The decommissioning round of 2003 reduced the demersal eet in Scotland by a further 70 vessels and the majority of these will be based in the North East. It is likely therefore that the total number of vessels will now be well below 200. And if the demersal eet is not yet protable, because it still proves too large for a sustainable resource, some further reduction in the number of vessels may occur.
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3.56 The irony of this situation is, however, that the sh catching industry does not nd it easy to recruit labour at present. Indeed there are vessels with less than a full complement of crew. In part this is because with low morale, the industry does not seem attractive to many young people starting out their careers; in part it may be because skippers in a desperate attempt to cut costs do not recruit their full complement. But it is also the case that unemployment is low in most of the shing communities as Table 3.7 shows. Aberdeen, Fraserburgh and Peterhead 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 demersal sector, 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 North East, 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 Work Area (TTWA). All persons Males % Unemployment Rate All Persons 3.7 2.0 2.3 2.0 3.0 2.4 1.5 5.9 2.6 4.1 3.0
Scotland Aberdeen Peterhead Fraserburgh Keith and Buckie Banff Shetland Sutherland Thurso (Scrabster) Lewis and Harris Uist and Barra Source: Scottish Executive
96,166 3,394 398 235 359 337 190 357 243 527 138
74,622 2,655 305 178 265 229 157 242 189 433 105
3.58 While there will, nevertheless, be knock-on effects on local incomes and unemployment of any further job losses, there would seem to be a reasonable prospect that this too can be contained without a major rise in unemployment. The North East coast is a scheduled Objective 2 area, but even with the maximum help from these bodies the prospects for providing alternative employment in the North East coastal towns is not good. It seems inevitable that there will be some population loss, with young people moving to other parts of the Grampian region and beyond in search of better employment prospects. Taking the area as a whole, it at least has the advantage that the Grampian region has the highest GDP per head in Scotland and one of the highest in the UK. It should be able to generate enough new job opportunities, even if these are only to a limited extent in the coastal shing towns themselves.
(b) Shetland
3.59 Demersal sh landings in Shetland in 2002 were comparable to Fraserburgh and exceeded only by Peterhead. There were 27 demersal shing boats in Shetland in 2003 employing about 180 shermen.42 The eet is said to have shrunk already by 40% over the last 13 years (approximately in line with the reduction in the demersal eet generally) with the loss of about 80 jobs, 30% of Shetlands catching employment. But improved catching efciency can be expected to raise productivity and reduce further the number of vessels the shery can support; some further reduction may also be necessary to bring the shing capacity into line with the resource. 3.60 The Shetland economy is remote from the main markets, and is narrowly based, depending heavily on sh catching, sh farming, sh processing, oil related activities and knitwear. There is much less opportunity to diversify 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 based labour market, it would not take much to change that. But Shetland is within the area of responsibility of Highlands and Islands Enterprise, which has special powers of assistance including grants, and has its own local enterprise 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 benet from transitional assistance up to 2006.
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3.61 In recognition of the gravity of the situation for the islands, Shetland Islands Council has itself proposed a package of measures to meet the crisis. These include: (1) increased purchase of quota through Shetland Leasing and Property Development Ltd. (SLAP), a subsidiary company controlled by the Council and nanced by oil revenues, in addition to the quota already held by the local PO (see para 3.34) this is to ensure that quota available to island shermen is increased rather than lost, as some shermen leave the industry; (2) taking responsibility for local management of sheries within the 6 and 12 mile limits; and (3) a greater role for the North Atlantic College in scientic stock assessment.
(c) Caithness and Sutherland

3.62 As noted already, the sheries harbours of Scrabster, Kinlochbervie and Lochinver are among the major sheries ports in Scotland (see Tables 3.1 and 3.2)43. All three ports have substantial landings of demersal sh, amounting to 78% of their landings by value in 200244. Kinlochbervie accounted for 24% of these demersal landings, Lochinver a further 24% and Scrabster 51%. But the quantities of cod, haddock and whiting were greatly outweighed by other demersal species. These included megrims, saithe, ling and dogsh. There was a signicant amount of deepwater species from the Atlantic. There is concern, however, about the sustainability of these stocks, especially if reduced cod quotas cause more boats to switch to this deepwater shing. 3.63 These three ports are unlike the main sheries ports on the east coast or Shetland in that only a relatively small proportion of landings are from local boats (Table 3.2). All three harbours are used by vessels from the rest of Scotland, mainly from the east coast, and to some extent the rest of the UK; foreign vessels also make extensive use of Lochinver and Scrabster, though not of Kinlochbervie. In consequence the impact of any further cut in demersal shing affects directly only small numbers of jobs in the local area and would probably be mainly through the impact on support services. The main impact is therefore likely to be outside these areas; but in view of 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 in Lochinver, 11-22 in Kinlochbervie and 9-14 at Scrabster45. This gives a total of between 30 and 52. However, the large number of foreign vessels landing at Lochinver and Scrabster make such calculations especially hazardous, since their behaviour is difcult to predict. Scrabster is used by the Faroese, who land sh here from their own waters for the British market. On the whole, Kinlochbervie seems the most vulnerable of the three, because of its isolation; and the absence of foreign vessels makes it entirely dependent on UK quota.
(d) Other Areas

3.65 Elsewhere, the effects of job loss in the catching industry are likely to be fairly widely spread, because of the nature of the shellsh industry. But the Western Isles deserve mention, since total landings amount to nearly 10 million, almost entirely from the shellsh sector, and some vessels from the Isles are also likely to land at west coast ports on the mainland. Here some loss of jobs is likely, as the industry modernises, and that will not be easy to 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 eligible until 2006 as a transitional Objective 1 area. It also has the benet of much assistance, including grants from Highlands and Islands Enterprise. In the long run, however, much will depend on the successful management of the shellsh sector, and of inshore shing in the Minch and elsewhere. These matters are dealt with later in this report (see Chapter 7). 3.66 In all of the above areas, considerable efforts have been made and continue to be made by local authorities to mitigate the impact of job loss. The Committee has been impressed by their efforts and would stress the importance of continued support. 3.67 The Committee also strongly supports the efforts of the Scottish Enterprise network to promote small business development and to encourage inward investment from other areas. However, the creation of small businesses is a slow and very uncertain process and its impact is most likely to be felt well after the adjustments that 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 main shing dependent communities are eligible. In the last chapter of this report we propose the use of resettlement grants and early retirement schemes, both of which may be funded by FIFG. We also attach importance to training and retraining, which may be part funded by the Structural Funds. These measures could go some way towards mitigating the impact of the job losses in the shing industry.
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3.69 Recommendations: That Ministers and the nancial institutions should seek to negotiate an arrangement for debt rescheduling and restructuring under which the demersal eet is granted a debt service moratorium for an agreed period. That Ministers and the nancial institutions should examine the case for establishing a Fishing Industry Finance Corporation. That the Scottish Executive and the Scottish shing industry should jointly examine the industrys ownership structure to establish whether a regrouping into a corporate structure would strengthen its ability to compete in the future. That 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. That consideration should be given to early retirement schemes for shermen 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 sheries dependent areas.
The Processing Industry

3.70 The Scottish processing industry accounts for 49% of the turnover of UK industry. Geographical distribution of the turnover of the Scottish industry is 65% around Aberdeen; 24% in central and southern Scotland; and 11% in the Highlands and Islands46 (see Table 3.8). 3.71 The industry forms an integral part of the shing-based economy. It accounts for more jobs than the catching industry and aquaculture combined, with the added signicance that it provides employment for women in otherwise male-dominated labour markets. Closure of a major processing plant could have a more serious impact on the local community than the direct effects of decommissioning. Processing also creates the essential element of value-added production; without access to local processing facilities, there is the risk that the local eet 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 the lleting (and freezing) of fresh sh for onward distribution to fresh sh retail and catering outlets or for further value added processing; (b) secondary processors producing chilled, frozen and canned products for the retail/catering trades. At present a signicant share of Scottish fresh sh landings is trucked south to Humberside for 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 makes for difculties in quality control. Some rationalisation and downsizing of the industry has taken place. For example in Shetland, employment in whitesh processing has fallen from around 150 to 50 in ve years. Today only one major rm survives, together with half a dozen smaller businesses supplying the local market. Here, as elsewhere in Scotland, the decline in whitesh processing is not related solely to the shortage of raw materials but also to competition in a global market from overseas processors with much lower labour costs. 3.74 The current situation to some extent reects the fortunes of the catching industry. Those involved in processing pelagics and shellsh (together with farmed sh) are expanding their operations. Some of those engaged in whitesh processing are in difculty. However, the processors have been less affected by the reduction of whitesh landings than the catching sector. Although a few smaller primary processors have closed and a number of larger plants have downsized, many of the larger secondary and mixed plants have begun importing supplies of frozen sh from overseas to replace scarce local supplies. For example, only 8 % of cod processed in the UK is from home sources, and, while gures for Scotland are not available and are probably higher, the ease of importing cod blocks highlights the independence of many of these facilities. 3.75 Imported supplies have contributed to low quayside prices for whitesh 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 sh, when conditions in the whitesh sector improve. A repeat of the situation in the 1980s could occur, when a lack of pelagic processing capacity in Scotland led to the sale of Scottish catches to overseas processors.
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3.76 Meanwhile, the smaller processors, less well-placed to purchase supplies abroad, are enjoying the benet of lower prices (but irregular supplies) for locally landed sh. It is alleged that a number of smaller primary processors remain viable only on the basis of handling illegal landings, a situation likely to end with the registration of processing rms and the introduction of systems of traceability of sh from the shing grounds to the 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 the processing sector relate to non-resource costs (increased water charges, higher insurance rates, inter alia), the scarcity of labour and the absence of government support. Difculties in attracting local labour reect the low pay, the seasonal or casual nature of employment and the poor work environment compared with ofce or supermarket jobs. The high turnover of labour and high levels of absenteeism experienced in some plants adds signicantly to labour costs. As a result, rms are now turning increasingly to agency labour and the employment of unskilled immigrant workers. Table 3.8: Processing Industry Business Turnover and Employment 2000. Turnover ( million) 577 143 720 % 80 20 100 Employment 6,661 1,228 7,889 % 84 16 100
Secondary & Mixed Primary Total
Source: 2000 Survey of Sea Fish Processing Industry, Sea Fish Industry Authority; and UK Seafood Industry Annual Statistics 2002, Sea Fish Industry Authority 3.78 There is also international competition in fully prepared foods, especially those using shellsh. At the moment Scotland is a signicant exporter of prepared shellsh, but it is also a substantial importer. It follows that, if the Scottish shellsh industry should falter for any reason, imports can be expected to extend their foothold. 3.79 Finally, there is outsourcing of certain stages of sh processing, whether sea sh or aquaculture, to other countries, most prominently to China. At the moment, competition has most impact on primary processing but the 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 sh 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 has been moving out of Scotland. 3.80 While the directions of international competitiveness are a threat to the Scottish industry, this has to be countered by good management and innovative approaches to product development and marketing. Of overriding importance will be relationships with the retail sector and we would expect most of the current facilities 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 locational dependency on landings has been weakening with consolidation, especially through the merging of this stage of processing with secondary processing. Moreover it is often difcult to get labour for this type of work. This trend has been accelerated with the exporting of much of the pelagic catch and the difculties 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 can be regarded as capable of competing at the international level, most of its issues should be capable of being resolved within the framework of the market. 3.83 However, two areas where there is a role for the public sector through the Scottish Enterprise network deserve attention. One stems from the policy to introduce traceability. This requirement will not only affect processors, but will stretch back into the catching industry where it is expected to make it easier to control illegal landings. Apart from this, and from food safety considerations, traceability has signicant potential as a marketing tool. Priority should be given to exploiting it as a means of aligning the catching and processing industries with retail trends and consumer preferences. It could also assist with high quality branding. Efforts over a number of years have been made to brand Scottish sourced sh but with only partial success. The internationalisation of supplies on the one hand will impose increasing limitations on the effectiveness of branding; on the other hand, it opens up opportunities to exploit niches where branding can be crucial.
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3.84 Both these areas fall within the Scottish Process and Marketing Scheme which is handled through the Scottish 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 the opportunity, 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 signicant expansion between 1995 and 2000. If this continues, the Highlands 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 as this activity is rationalised with secondary and mixed processing and because of overcapacity in relation to future levels of supply. 3.87 The employment in the processing industry is estimated to have been 7,870 in 2003. On balance it seems at least possible that the net effect of all these changes could be a small increase rather than a loss in jobs, but this will depend on the industrys competitive ability. If this happens the primary sector would be likely to lose and the 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 70m a year in support of the sh catching and processing industries. In addition to the 68m set out in Table 3.9, there is the cost of price support under the sh 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 sh are then resold as shmeal. The FIFG money is spent principally on decommissioning, processing and marketing, and on infrastructure, such as ports and harbours (see para 2.25 above). Table 3.9: Public Sector Support 2002 in million. Area Enforcement Science FIFG grants Decommissioning Administration Total Source: Scottish Executive 3.90 The greatest part of the total expenditure is related in one way or another to the catching industry; and while it is not possible to give a wholly accurate attribution, it is clear that the amount spent represents a high percentage of this industrys 329m turnover in 2002 (Table 3.5). Moreover, within this industry, much of this expenditure has been related to the demersal sector, which has a turnover of 137m. This support in part reects the 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 not attempted such an analysis; we do not consider that much would be gained from it. What matters is that the industry should have a sustainable and commercially successful future. That is clearly possible, if the right management decisions are taken. The industry should then make a valuable and positive contribution to the Scottish economy, well beyond the cost of any support it may be given. We would therefore like to see a strategy for future support developed that aims to achieve this. In the long run, if the industry is restored to full protability and is stable, it should be possible for it to absorb some of the costs of enforcement and scientic million 12.2 23.8 16.0 15.0 1.0 68.0 Notes: Cost of SFPA. In addition there is planned capital expenditure of 7m. Cost of FRS Averaged over the 6 years 2000-2006 and on the assumption that 70% of the expenditure comes to Scotland 2001 round of 25m, 2003 round of 40m and transitional aid of 10m all spread over 5 years
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research, presently borne by the public sector, just as it does in some other parts of the world. As well as encouraging inputs from the nancial institutions and others into the industry, as we have recommended, it should 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 enterprise companies, to assist the sheries dependent communities adjust to change. This is part of general support for regional development and we have not attempted to estimate how much has been directed to shing dependent communities. It does, of course, apply to shing and other communities all round the Scottish coast. Sufce it to say that this will have helped to achieve the low levels of unemployment in many of these shing communities. 3.93 Our predictions in this chapter have shown that further job loss can be expected as the industry continues to modernise and productivity rises. This will produce an efcient, though smaller, industry. Continuing effort by the public sector will be necessary; but there needs to be a change in emphasis to give higher priority to the resettlement of those wishing to leave the industry and to re-training for those able to take advantage of other opportunities in the economy.
References
DEFRA, United Kingdom Sea Fisheries Statistics 2002. Seash, Vital Statistics Winter 2002, June 2003. 26 Michael Thomson, The Regional Employment Contribution of the Fisheries Sector in the Scottish Economy, Scottish Economic Report, June 2002. 27 The contribution of aquaculture is more fully explained in Chapter 6. 28 Scottish Fisheries Statistics, 2002. 29 Scottish Fisheries Statistics 2002. 30 Economic Survey of the UK Fishing Fleet 2001, Seash, Edinburgh June 2002, pp18-19. 31 Scottish Fisheries Statistics 2002. 32 Scottish Fisheries Statistics 2002. 33 2001 Economic Survey of the UK Fishing Fleet. SeaFish Industry Authority. 34 Scottish Fisheries Statistics 2002. 35 Scottish Fisheries Statistics 2002. 36 2003 Economic Survey of the North Sea & West of Scotland Whitesh Fleet. Sea Fish Industry Authority. 37 2001 Economic Survey of the UK Sea Fishing eet, Sea Fish Industry Authority. 38 Scottish Fisheries Statistics 2002. 39 Economic Survey of the UK Sea Fishing eet, Sea Fish Industry Authority, 2001. 40 Estimated from Scottish Fisheries Statistics 2002. 41 AB Associates Ltd, Economic and Social Impact of CFP Fisheries Management Measures in North East Scotland, Final Report, March 2003. 42 SHOAL, The Future of Shetlands Whitesh Fleet? Lerwick, 2003 and SHOAL, The Whitesh Plan, August, 2003. 43 Evidence from Highland Harbours. 44 Economic Impact of White Fishing Quota Cuts in the Case Area, A Draft Report for Caithness and Sutherland Enterprise. Grangeston Economics, June 2003. 45 Grangeston Economics, Economic Impact of White Fishing Quota Cuts in the Case Area, Draft Report for Caithness and Sutherland Enterprise, Inverness, 2003. 46 2000 Survey of Sea Fish Processing Industry, Sea Fish Industry Authority.
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4 The Science of Stock Assessment and its Role in Fisheries Management

Assessment Methods and their Reliability
4.1 Modern sheries science originated in the late 19th century amidst concern about over-shing. The Scottish Fishery Board, established in 1882, and the Aberdeen Marine Laboratory in 1898, were at the forefront of development of shery statistics. The International Council for the Exploration of the Sea (ICES) was founded in Copenhagen in 1902. Scottish records of herring landings since 1810 were amongst the most comprehensive data available, and by 1908 the Scottish Fishery Board was collecting data on catches in cwt/100hours shing47 in statistical squares (1 latitude by 2 longitude) across the North Sea for every month. This system was considered exemplary and was adopted internationally by ICES in 190948, thus setting the foundations for management of sheries in European waters based on collation of data by ICES. With the advent of the CFP in 1976, ICES was charged with providing advice for setting TACs. Whilst shery science is a vast subject area, including studies on growth, reproduction, diseases, genetics, migrations, behaviour, oceanography and all aspects of sh biology, much concern is currently directed at how TACs are dened. Figure 4.1: ICES Fishing Areas. Most Scottish landings are from Area IV (North Sea) and Area VI (West of Scotland) with a smaller contribution from Area VIIa (Irish Sea).
47
Cwt , hundredweight = 50.8kg.
30
4.2 Derived from 1960s and 1970s shery science, the Law of the Sea gives coastal states rights to dene TACs, and it is this mode of management that is implemented by the European Commission. However, it is now questionable whether single species TACs are an appropriate way to manage mixed sheries. 4.3 ICES splits the European seas into statistical areas (Figure 4.1), and attempts to set TACs for each species within each area, e.g. North Sea cod in Area IV. Thus species that may occur throughout large areas of European waters are divided into recognised regional stocks or management units. Ideally within a stock, the sh should move freely throughout the designated area, and there should be no emigration or immigration across the boundaries of the area. 4.4 For the major species, TACs are based on estimates of the quantity of the sh in each stock. Recommendations on the quantity to be harvested are then made each year. For each stock, ICES seeks to estimate the spawning stock biomass (SSB), dened as the combined weight of male and female sh that have reached sexual maturity. Two fundamentally different approaches are used to estimate stock abundance: (a) Fishery dependent methods. These are based on analysis of landings by commercial sheries. This has the advantage that it uses the shing eet itself as the sampling tool and is therefore potentially most powerful and efcient. Fishery independent methods. These are surveys done by shery research vessels and the information is generally used to supplement the shery dependent methods. Fishery research vessel techniques include sampling for eggs, larvae and juveniles as well as acoustic and trawl surveys of the adult stock.
(b)
Fishery Dependent Methods

4.5 (a) These are the most important methods of stock assessment. Two basic kinds of data are used: Record of landings. This is the total quantity of sh landed each year. Box 4.1. The dominant position It depends on accurate reporting from all the nations around the of Scotland in North Sea North Sea that are involved: Belgium, Denmark, England, France, demersal sheries is exemplied Germany, Netherlands, Norway, Scotland and Sweden. The data are by ICES landings statistics for reported by national representatives to the appropriate ICES working 2002. Scottish vessels share of group. Within ICES, Scotland is treated separately from England the main species was: cod 35%, (because of Scotlands long history of data collection). The data are haddock 74%, Nephrops 62% subdivided into catches from different gears: bottom beam trawl, and whiting 49%. bottom otter trawl, seine net, gill net, long line, other gears. Net catches are recorded for each mesh size in use. The ICES working groups also add estimates of unreported landings and discards to the ofcial landings, but for most eets, these estimates lack scientic rigour (see 4.8(a) below). Age, size and sex composition of the catch. Each month, sh are sampled from the ofcial catch and records made of length, weight and age. Age is obtained by counting growth rings on scales or on the otoliths (ear stones) removed from sh heads. Additional samples are taken to determine the mean weight and proportion of sexually mature sh at different ages. The latter is based on examining the gonads inside the sh (most species show no external sign of sex or maturity). The catch is then divided into numbers at different ages: age one, age two, etc. For cod, two-year-old sh are generally most numerous from landings in Scottish waters, as this is the age when sh have grown to the minimum size for capture. There is usually a progressive decrease in numbers with older ages, as sh either die naturally or are captured.
(b)
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 the Spawning Stock Biomass (SSB). The best known of these is Virtual Population Analysis (VPA), originally developed in the 1960s and is the core method used by ICES today. 4.7 VPA uses the data on landings and their composition to arrive at an estimate of SSB. The rst stage is to estimate the proportion of sh in each year-class from last year that survive until this year (e.g. if there Box 4.2. Stock size can be estimated from total landings if the proportion of stock captured is known. e.g. catch 10,000 tonnes, 50% of stock, SSB = 20,000 tonnes. This simple concept underlies methods used by ICES for stock assessment.
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were 1000 two-year-olds last year and 200 three-year-olds this year, this indicates that 80% of sh died between the ages of two and three). The estimates are summed across year-classes within each year, to give an estimate of SSB by year. 4.8 It is important to understand the nature of additional inputs to the calculations and the effects they have on 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 be based on intuitive guesswork, and the greater the extent of illegal landings and discards, the lower the reliability of VPA. High grading, or targeting smaller sh for discards, will add further distortions. Values for sh mortality between age classes are divided into natural mortality (M) and that due to shing (F). Although M is initially an educated guess, with each succeeding year it becomes less problematic (see 4.9 below). Box 3 illustrates how F relates to the annual percentage of stock caught (this relationship is analogous to the difference between daily compound interest and annual rate of interest in nancial accounts). Tuning of the statistical processes in VPA is required to account for changes in the catchability of sh with age and changes in eet behaviour. Effort data for the commercial eet are necessary for this tuning. Recruitment into the stock varies with each year and this variation needs to be included. In practice, the extent of each annual variation becomes reasonably clear only after a number of years. Box 4.3. F Fishing Mortality is the instantaneous fraction of sh removed from the stock each year. It is expressed in terms of decimal values such as 0.2, 0.5, 1.0 & 1.2 and is calculated as: N2003 = N2002 x eF where N is the number of sh in each year and e is the exponential constant. F 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 Annual percentage of stock caught 10 18 26 33 39 45 50 55 59 63 67 70 73
(b)
(c)
(d)
4.9 The range and nature of the uncertainties surrounding these inputs means that the stock assessment produced by VPA can at times be particularly inaccurate for the most recent year. However, the longer the time-series over which back-calculations can be made, the more reliable it becomes at showing historical trends in the stock sizes of each species of sh. Changes over periods of ve to ten years shown by VPA are therefore to be trusted, even if the value of SSB for the most recent year is not. It is perhaps for this reason that VPA has remained the principal method used by ICES for many years. The science of statistics and modelling has advanced considerably since VPA was originally developed, but there is little external evidence that ICES has considered changing its methods in the light of these advances.
4.10 A particular problem with VPA, which creates difculties for effective sheries management, is that it fails to quantify adequately the levels of uncertainty in its estimates of stock sizes. This is exacerbated by the way in which levels of uncertainty seem in any case to be either misunderstood or ignored by those who make the ultimate decisions in setting TACs. 4.11 Another disadvantage of VPA is that numerous parameter values must be specied to run it, and the favoured values have often been selected subjectively, or on the basis of inadequate data. The implications for any particular stock assessment are poorly understood, so that VPA tends to be treated as a black box when ICES stock assessments are carried out, and its failings are not fully recognised.
Alternatives to VPA
4.12 Cohort curves. We dene cohort curves to be catch-curves applied to catch, Catch per Unit Effort (CPUE) or IBTS data by cohort. (Catch-curves applied to a single seasons catch data assume that the stock is in a steady state, and therefore perform poorly.) Cohort curves exploit the fact that there tends to be a linear relationship between 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 lines indicates the rate of depletion of each year-class, so allowing direct
Box 4.4. Fisheries could be managed without estimating SSB or setting TACs. It is scientically more logical to dene desirable levels of F (i.e. the shery should remove no more that a certain fraction of the sh in the sea). TACs are necessary only to share out the catch between nations and to provide quotas as a basis for sharing between boats.
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estimation of total (shing and natural) mortality, avoiding the ad hoc tuning of VPA. The major shortcoming of cohort curves is that they do not provide absolute estimates of SSB. They cannot be used as the sole method if sheries are managed by TACs, but they would be far more satisfactory for other methods of management, such as those based on F (shing mortality). (See Box 4.4). 4.13 State-space models. These model the populations of sh as two time series running in parallel. The rst time series denes how states or categories (e.g., sex, age or size classes) change from one year to the next in respect of processes such as mortality (natural and shing) and recruitment and it can also take into account environmental factors and other variables. The second time series uses data such as CPUEs and research survey estimates of stock size, and relates them to the various states. The signicant advantage of state-space models is that they can be used to t exible models for sh population dynamics, while accounting for the major sources of uncertainty. Figure 4.2: North Sea cod: cohort curves for selected year-classes of North Sea cod tted as parallel regression lines 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 tted to landings; 2+ years old
14 12 Log landings (tonnes) 1984 10 8 6 4 2 1986 1988 1990 1992 Year 1994 1996 1998 2000 1988 1992
1996
1980
(b) Cohort curves tted to total catch; 1+ years old

14 1996 12 Log catch (tonnes) 1984 10 8 6 4 2 1986 1988 1990 1992 Year 1994 1996 1998 2000 1988 1992
1980
(a) Cohort curves tted to IBTS indices; 2+ years old

8 1996 1988 Log abundance index 6 1984 4 1992
1980
1986
1988
1990
1992 Year
1994
1996
1998
2000
33
Conclusions on age-structured stock assessment methods

4.14 State-space methods are able to model the complexities of sh dynamics without requiring the ad hoc adjustments of VPA. They can accommodate multi-species sheries, where for example recruitment rates for one species may depend on abundances in given age classes for other species. Unlike VPA, they can be used for ecosystem modelling, which will be necessary when the CFP adopts the ecosystem-based approach to management, which it currently favours (see paras 5.3 and 7.73). A disadvantage is that, because they quantify uncertainty 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 and quotas, especially when stocks are declining, stimulates the practices of discards and illegal landings which then sharply decreases the reliability of VPA. The annual work of stock assessment in support of TACs places heavy burdens on the limited number of shery scientists available. 4.16 If an alternative method of management such as by effort control based on F (shing mortality, see Box 4.3) was employed, the burden on shery scientists would be reduced, and their efforts could be redeployed into important areas of research such as that needed to develop ecosystem based approaches. The input data required to determine F would be far less exposed to the kinds of errors and uncertainties which afict 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 in the effort required to catch an amount of sh 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 declined from 60 to 32 tonnes per annum49. Measure of effort was subsequently incorporated into early ICES work but appropriate measures of effort and accurate reporting by shermen are problematic. To account for change in technology, even in the 19th century a conversion factor of one steam boat equals four smacks was required for the plaice time series. CPUE methods are useful if time series data can be established and effects of improvement in technology can be eliminated. 4.18 A good current example of the use of CPUE is the management of the Nephrops shery on the Fladen ground in the North Sea. Scottish boats return data on landings and hours spent trawling. The landing per unit effort (LPUE) has remained constant at 30-50 kg/hour trawling since the early 1980s, giving condence that the stock is in a healthy state. It is not possible to apply a conventional VPA to Nephrops stocks since these animals cannot be aged. Management is therefore based on the LPUE and shery-independent methods of stock size estimation. 4.19 Although not an EU requirement, ICES encourages shing vessels to record effort in their log books. Great caution is necessary in applying CPUE methods where shermen are capable of targeting their shing activity and members of the target species tend to congregate together. Pelagic trawlers for mackerel, for example, only deploy a trawl when a shoal of mackerel is visible on the sonar and the trawl is steered to enclose the shoal. CPUE expressed in catch per hour of trawling would give no indication of the underlying abundance of sh; the trawler catching the last shoal of sh in the sea would report a CPUE just as high as a trawler operating in conditions of high sh abundance. This problem to a greater or lesser extent now applies to exploitation of all round-sh species; new technology has removed the direct link between effort and catches. Depending on methods used to measure effort, this will pose a fundamental problem in proposed methods of shery management through regulation of effort. 4.20 The behaviour of the sh can also contribute to failure of CPUE. Mobile species may have preferred areas. If these are known to the shery, CPUE may be maintained by concentrating effort in these preferred areas, even though abundance in less favoured areas may be in decline. Once few sh are left in the less favoured areas, a sudden collapse in CPUE may occur with little warning, as the remaining aggregations are shed out. This occurred during the collapse of cod on the Grand Banks.
Unrecorded Catch
4.21 All of the shery dependent methods are compromised by illegal landings and by unrecorded discards (see para. 2.15). FRS has monitored discards for many years by placing observers onboard shing vessels. In fact, this policy allows estimation of retained catch as well as of discards, and by noting discrepancies between total
34
estimated retained catch and total recorded landings, and with the co-operation of the industry, it is possible to estimate the scale of illegal landings. However, there can be no guarantee that the level of illegal landings on observed trips is representative of that on all trips. Because the scale of illegal landings and of discards varies through time, depending on changes in economics, policy and enforcement, it is essential to estimate these components of the catch, if stock assessment is to be reliable. 4.22 A common observer scheme is required across all North Sea eets. To date, only Scotland has devoted sufcient 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 given year, each shing trip is allocated to one of well over 100 categories (called strata) corresponding to different areas, quarters and gear types. The number of trips per stratum is very variable, but resources allow not more than one trip to be surveyed per stratum, so that the sampling rate is very variable. A revision of this scheme could yield improved precision on estimates of discards at no additional cost.
Data from shermen

4.23 In addition to landings data collected by statutory authorities, the association of National Fisheries Organisations (Europche) has, under the auspices of the North Sea Commission Fisheries Partnership, organised surveys amongst shermen of their perceptions of changes in stock abundance. Reporting in the North sea is for ten areas and records are collected to show whether abundance is: much less, less, same, more or much more than the 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 Fisheries Management (ACFM) reports on each stock. Both haddock and cod abundances are reported to have increased in the North Sea between 2002 and 2003, which could be consistent with the VPA. 4.24 Summary: International collation of shery landings statistics provides the basis for estimation of sizes of different sh stocks and hence total allowable catches. Scotland accounts for a large proportion of North Sea sh landings. Misreporting, illegal landings and unrecorded discards jeopardise the accuracy of stock size estimates and calculation 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 quantied. Recommendation: ICES should consider new statistical approaches as alternatives to VPA for management of the sheries, particularly methods in which uncertainty (and hence business risk) can be quantied.
Fishery Independent Methods

4.25 Whilst shery 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 sh stocks.
International Bottom Trawl Survey (IBTS)

4.26 This is the primary means by which a regular check is kept on demersal sh 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 a standardised technique: Denmark, England, France, Germany, Netherlands, Norway, Scotland and Sweden. Over an agreed ICES grid covering the whole North Sea, a trawl sample is taken from the centre of each rectangle. Since 1991 work has standardised on the use of a GOV (Grande Ouverture Verticale) trawl design by IFREMER, the French marine research institute. This is an otter trawl, which replaces a previous Scottish design, the Granton trawl. The GOV trawl is designed to catch species that tend to escape by swimming above the head rope of the trawl. The net is rigged in a standard way, is towed at a standard speed, and in recent years the shape of the net has been controlled by telemetry from the net. The cod end has a 30mm mesh lining to retain young sh. The standard tow has a duration of 30 minutes.
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4.28 Bottom trawl surveys have a long history and considerable care has been exerted in keeping data comparable. Whenever a new research ship is commissioned or a new net adopted, calibration trials are carried out. The IBTS aims to survey the North Sea twice per year, but in recent years surveys have been done in each of the 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 of numbers of sh caught per hour and raw data are published on the web sites of the major shery institutes50. The results do not represent an absolute measure of sh numbers per unit area of the sea oor. The way that sh are caught in otter trawls is complex, involving herding of sh in front of the net, with important differences in behaviour and stamina between species and different sizes of sh. Thus if the catch of two species, e.g. haddock and cod, is the same, it does not mean that their population size is the same. Research on sh behaviours involving video monitoring of sh reactions in and near the net may in future allow absolute abundance of demersal stock to be assessed using IBTS data. The IBTS provides information on spatial distribution of sh and relative abundance over time. 4.30 Common criticisms of the IBTS from the shing industry are that: The GOV trawl is inefcient and would not be used by commercial shermen. The aim of the GOV trawl is consistency and its adoption for survey work was governed by aiming for low selectivity across species and sizes of sh, whereas a commercial sherman would be aiming to select certain species. The GOV trawl also catches undersized sh in an effort to assess the size of the age one class. Whilst industry strives for improvements in efciency each year, the survey aims for no change unless absolutely necessary. The research vessels do not deploy the net where the sh are concentrated. The survey tows are not targeted at shoals of sh. They simply tow at the same set of locations every time. This can seem perverse to commercial shermen, particularly if the research vessel tows where the commercial eet has just removed sh. However, by sampling a large number of locations spread throughout the management area, trends in sh stock abundance are tracked more reliably than would be possible if areas of high abundance were preferentially targeted. The net is not shed in an optimal way (e.g. not towed for long enough or fast enough). The aim is simply consistency; the same speeds and tow times have been used for decades. The inquiry received some anecdotal evidence that the GOV net was not always shed 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 be very quiet so as to not disturb sh. 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 sh. Caution is required since these data cannot be currently be transformed into biomass estimates. However, the data collected are used to inform the VPA. In order to generate time series of trends in spawning stock biomass, a software package known as SURBA is used. It models shing mortality F, allowing for differences by age and by year. The parameters of this model are estimated using the IBTS data on relative abundance by age and year. Data on mean weight at age and on the proportion of sexually mature sh by age are then used to provide estimates of relative SSB. The IBTS provides data on eight species: herring since 1965; haddock and whiting since 1967; cod since 1971; Norway pout since 1972; and saithe, sprat and mackerel since 1974. For herring only, day-time hauls are used because it is then that these sh 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 in how 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 sh oat in the water column feeding on plankton, and have only limited capability for escaping capture by nets. As part of the IBTS, in the rst 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, sh that are not yet one year old. The net is towed obliquely downwards and upwards to sample the complete water column.
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It is assumed that at night, the net catch is 100% efcient, and density of larvae per m2 of the sea surface is calculated from the distance towed, the area of net opening, and the depth. This can be summed to give an estimate 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 sh species, including mackerel and cod, produce eggs that are neutrally buoyant and oat freely in the surface layers of the ocean. The eggs are transparent and are about 1mm in diameter. They can be sampled using ne mesh nets that lter 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 water ltered is measured using a ow meter and hence the number of eggs can be calculated per cubic metre of sea water. As for the larval surveys, the results can be expressed in numbers of eggs per unit area of the sea and hence to calculate the total egg output by an entire sh stock. Such an approach is used for estimation of SSB of mackerel, sardines and anchovies. If estimates of fecundity (number of eggs per female) and sex ratio (proportion of sh that are female) are available from a sh survey, then the estimated egg production divided by the product of estimated fecundity and sex ratio gives the estimated size of the spawning stock. Sorting the net catches and counting 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 mackerel stock, it is only applied once every three years. For mackerel, this provides important opportunities for checking the VPA. Cod eggs are generally too low in abundance for the method to be usefully applied on a routine basis in the North Sea.
Acoustic Surveys
4.36 Using echosounders and running a survey vessel along predetermined sampling tracks, it is possible with modern computer techniques to count the total amount of echo returns from sh beneath the ship. This can be transformed into charts indicating numbers or biomass of sh in the survey area. The method works particularly well for some pelagic species such as herring and anchovies, and progress is being made in applying the method to mackerel. Since cod live near the sea oor, there is considerable difculty in quantifying the echo returns from these sh, and it is not yet possible to distinguish cod from other species. Thus this method is not currently considered practical for cod.
Video Surveys
4.37 This method is applied to surveys of Nephrops abundance in Scottish waters. A video camera is towed over the sea oor 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 relatively immobile species. 4.38 Summary: The International Bottom Trawl Survey and associated plankton sampling provide valuable data on the state of North Sea sh stocks that are independent of reporting of commercial landings. Scotland plays a major role in this activity. Survey techniques provide valuable information on recruitment that cannot be obtained from commercial vessels. Recommendations: FRS should begin to develop methods for the use of commercial vessels to aid shery surveys and also how accurate recording of commercial catches can best be achieved. ICES should convene a forum, to review IBTS design, shing 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.
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Setting of Total Allowable Catches

4.39 During the 1940s and 1950s sheries science developed the concept of Maximum Sustainable Yield (MSY) based on the theory that a moderate level of shing on a stock removes older sh, thus stimulating recruitment, growth and hence production. It was shown that there is an optimum level of shing effort that results in the maximum yield from the stock and that yield is sustained by new growth in the stock. Indeed, Article 61 of the United Nations Convention on the Law of the Sea states that coastal states must pursue conservation and management measures designed to maintain or restore populations of harvested species to levels which can produce the MSY. It was on this basis that coastal states were granted the rights to dene TACs which initially would 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 either increase, decrease or maintenance of the stock size. World-wide it has proved impossible to manage sheries to gain the MSY. Generally shing effort has been too high, reducing SSB and resulting in lower yields. Also, since there is considerable uncertainty as to where the MSY level is for a stock, scientists were unable to give clear advice. As SSBs have declined, sudden collapses have occurred, notably North Sea herring in the 1970s, and Grand Banks cod around 1990. This has resulted in a precautionary approach which was adopted by ICES for management of sheries in European waters. This is expressed in setting thresholds for each stock: 4.41 A Limiting value (lim) is dened, below which the stock is considered to be in imminent danger of collapse. This can be expressed as the limiting biomass Blim below which the stock must not fall, or the shing mortality Flim above which the stock cannot survive. For several stocks Blim is the lowest historical SSB from which the stock has successfully recovered, or there may be a more formal scientic 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 shing mortality. Thus TACs should be set to ensure that the SSB and F are on the right side of the precautionary limit and if for some reason the limiting value is reached then the stock is in imminent danger of extinction. 4.43 For most major sh stocks the EU51 sets Analytical TACs which are based on advice from ICES where a reasonably reliable VPA has been carried out, and it is possible analytically to calculate forward from the known state of the stock, what the outcome of different proposed TACs is likely to be. Analytical TACs can be set with a view 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 Precautionary TAC is set. Either this can be based on advice from ICES, or the Scientic, Technical and Economic Committee on Fisheries (STECF), will recommend such a TAC. Such precautionary TACs may be based on catch per unit effort information or on simple records of landings on which an increase or decrease may be proposed, based on opinions of those concerned regarding the state of the stock and management objectives. For example, a decrease in average size of landed sh may indicate depletion of the stock.
Review of ICES Scientic Advice on the Major Fish Stocks

4.45 The most important demersal sh stocks (see Appendix 4) for Scottish vessels are haddock, cod, whiting, monksh and Nephrops. The status of each of these is considered in this section, together with information on herring and mackerel, the major pelagic species. It should be noted that amongst the demersal species, cod has the most comprehensive data set and best implementation of the VPA. For all the other species, uncertainty is much greater.
Demersal Stocks
North Sea Cod Area IV
4.46 Although not the most important sh species by tonnage or value to the Scottish eet, cod is considered in most detail since it is the source of the current crisis in shery management. The ICES scientic advice for cod is based on estimates from VPA and the IBTS.
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4.47 From 1965 to 1985, the average landings of cod recorded by ICES ACFM for all North Sea eets were just over 250,000 tonnes per annum (Figure 4.3). Following that time, there was a decline to a low of 102,000 tonnes in 1991, and then a sharp decline from 1998 to the lowest recorded catch in 2001 of less than 50,000 tonnes. The recorded 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.
400000 350000 300000 Landings (tonnes) 250000 200000 150000 100000 50000 0 1960 1970 1980 Year 1990 2000 2010
Figure 4.4: North Sea Cod, Area IV, Spawning Stock Biomass, Solid blue line- Blim, Dashed blue line Bpa. ICES ACFM 2003 VPA.*
300000 Spawning Stock Biomass (Tonnes) 250000 200000 150000 100000 50000 0 1960
1970
1980 Year
1990
2000
4.48 The average spawning stock biomass in the North Sea from 1965 to 1985 was 193,000 tonnes. This declined to an estimated low of 33,300 tonnes in 2001* (Figure 4.4). There is an estimated increase to 53,000 tonnes in 2003, possibly associated with stock recovery measures, but estimates for the last two years are believed to be biased upwards, caused by unquantied black landings. 4.49 The 1960s to the 1980s were characterised by a steady increase in shing mortality F (ages 2-6) from 0.45 in 1963 to 1.07 in 1983 (Figure 4.5). Since that time, F remained high until the recent fall in 2001 and 2002 associated with cod recovery management measures. The data for the last two years however are considered uncertain. 4.50 The average recruitment of one-year-old sh into the North Sea during 1965 to 1985 was 483 million per annum (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 million one-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 4.5: North Sea Cod, Area IV, Trends in Fishing Mortality F, Solid blue line Flim, Dashed blue line Fpa. ICES ACFM 2003 VPA*.
1.4 1.2 1 Fishing Mortality (F) 0.8 0.6 0.4 0.2 0 1960
1970
1980 Year
1990
2000
Figure 4.6, North Sea Cod Area IV, Recruitment. ICES ACFM 2003 VPA*.
1000 900 800 Recruits Age 1 (Millions) 700 600 500 400 300 200 100 0 1960 1970 1980 Year 1990 2000
4.51 Since the 1980s, there has been a loss of sh aged three and over from the North Sea, so that landings are now dominated by two-year-old sh. Figure 4.7: SURBA output for the Scottish Ground Fish Survey, relative SSB of North Sea Cod.
4.5 4 3.5 Relative SSB 3 2.5 2 1.5 1 .5 0 1985 1990 Year 1995 2000
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4.52 Figure 4.7 shows the relative spawning stock biomass in the North Sea, based on the Scottish ground sh survey undertaken by FRS Aberdeen. This mirrors closely the decline shown in the VPA.
Spatial Considerations
4.53 A weakness of the ICES North Sea cod management model is the assumption of complete mixing and unity of the entire cod stock within Area IV. It is known that there are separate spawning areas and the cod can almost certainly be divided into southern, central and northern components. There may be further localised spawning units (e.g. off Shetland) that may merit localised management. It is a matter of concern that a Southern Bight substock, which was previously abundant off the coast of Netherlands and Germany, has all but disappeared. This does not preclude the possibility of recolonisation, but there is a concern that a unique genetic component of the North Sea cod resource has already been lost. It is encouraging that there are at least some residual spawning areas in the northern area off Scotland. 4.54 Information on spawning areas is poor, but management as part of a recovery programme should seek to protect known spawning areas. Studies on genetics and cod migration are necessary; unfortunately, stocks over a large area of the North Sea are so low as to preclude meaningful studies.
History and Causes of Decline in the Cod Stock

4.55 Taking into account the consistency between the VPA, IBTS and other indices of stock abundance, there is no doubt that there has been a decline in cod stocks in the North Sea since 1981. During this time, the shing mortality F has been consistently high with an average value of 0.95 until 2000. In a stock with a natural life span potential of 10 years, this rate of removal means that, of sh that survive to two years old, only one in 20 survive a further three years to ve 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 be unsustainable; shing mortality has been the major factor in the decline in spawning stock biomass. This is further emphasised by calculations indicating that if F had been sustained at 1960s levels (ca. F =0.5), current landings would be in excess of 200,000 tonnes per annum52. The loss to the Scottish economy of allowing F to be so high over a period of 20 years, resulting in landings as low as 50,000 tonnes, has been enormous. Since Scotland takes 35% of North Sea cod the current loss is approximately 50,000t 60,000t of landings, worth roughly 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 in 1996, 0.6 in 1999 and 0.55 in 2000. From 2001, recommendations have been lowest possible catch, progressing to closure 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 lower shing mortality rates in order to restore the cod stock to its lowest desirable level of 150,000t SSB. The shery however was managed in terms of TACs, and there seem to have been persistent problems in translating a need for 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 as 113,000t. ACFM estimated the true landings to be 105,000t. The agreed TAC was 105,000t and the ofcial landings were 99,000t. This is partly accounted for by unreported catch (e.g. discards), not accounted for by ACFM, 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 high throughout these years. 4.60 In 1997 scientists published a warning that North Sea cod stocks were near to collapse53, stating There is now an urgent need to ensure that the exploitation rate is reduced either through the use of effective catch controls or by a direct reduction in shing activity. The 1996 year-class had by 1997 produced the largest recruitment of North Sea cod for ten years; indeed, in the rst quarter IBTS, the estimated number of one-year-old cod in the North Sea was the highest since 1971. This provided a remarkable opportunity to save the stock and ICES 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 inuenced by the abundant 1996 year-class), ICES ACFM recommended an increase in TAC to 153,000t. Thus despite clear
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warnings in the previous year and a target F of 0.6, 140,000t was adopted by management and the highest F for 15 years ensued, resulting in the most rapid removal of any year-class in the available records for this stock, and the SSB has since continued to decline. Table 4.1: North Sea Cod (Area IV) Comparison of ACFM Advice and Outcomes. (Units of landings are thousands of tonnes). Advised F 0.68 Halt SSB decline 0.8 70% 89 effort 70% 89 effort 70% 89 effort Reduce effort Reduce effort 0.7 0.65 <F(96) 0.65 <0.55 Lowest possible Lowest possible Closure Zero catch Catch to Achieve F 148 124 113 141 135 153 125 <79 0 0 0 0 Agreed TAC 160 124 105 100 100 101 102 120 130 115 140 132 81 48.6 49.3 27.3 Ofcial Landings 142 110 99 87 98 94 87 112 104 100 114 80 62 42.3 44.2 ACFM Landings (+) 157 116 105 89 97 105 95 120 107 102 122 78 59 41 43.9 Actual* F 0.989 1.010 0.912 0.874 0.866 0.921 0.877 0.875 0.797 0.848 1.061 1.037 1.210 0.747# 0.612#
Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
* 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 ofcial landings since an attempt is made to adjust for unreported landings. ACFM landings however may be lower than the ofcial gure if provisional data are used which are subsequently revised in ofcial statistics, or ACFM reallocates misreported 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 scientic methods. During the late 1990s, it seems that the VPA persistently overestimated SSB and underestimated shing mortality in the terminal year of the assessment. This bias in VPA is known as retrospective patterning. Precision of the VPA stock assessment in the terminal year is low (perhaps only to within +/ 50%), but a persistent bias towards overestimation of SSB is of particular concern. 4.62 In general, the TACs have been set lower than the predicted catch corresponding to advice. Ofcial landings have been within the agreed TACs. Unofcial landings and discards may partly explain higher than expected F values, but there seems to have been a major failure of the ACFM to give correct scientic advice. 4.63 There is a fundamental problem in trying to regulate F through TACs. If there is an error in estimation of SSB (e.g. +/ 50%) and a similar error in estimation of catch, then F could vary considerably from the desired value. Management of the shery through TACs is then doomed to failure; indeed, it appears to have consistently failed over two decades.
Recruitment
4.64 There is concern that since 1990 recruitment has been low. There is no doubt that there have been environmental changes in the North Sea that may have contributed to this low recruitment. However, removal of almost all the older sh from the stock is likely to be a major contributory factor54. There is new evidence showing that small young female sh: (a) (b) (c) (d) produce fewer eggs; produce eggs that are smaller and have lower chance of survival; are inexperienced in spawning and are less effective in mating and producing healthy eggs; and produce fewer batches of eggs over a shorter period of the spawning season, so that they are less likely to hit optimum conditions for survival of the eggs and larvae.
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4.65 It has not been widely appreciated until recently that a SSB comprising mostly young sh is much less capable of generating new recruitment. To ensure survival of sh to age 5+ when they can more effectively contribute to spawning requires much lower levels of shing mortality. To give two-year-old sh a 20% chance to survive to ve years, and assuming natural mortality of M=0.15, requires a shing mortality of just under F=0.4. The percentage of mature sh that are of age ve 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 and corresponds to a possible gadoid outburst in the North Sea when conditions were particularly favourable55. The rate of recruitment during 1990-97 however was comparable to the long-term average for the 20th century (it has been lower since 1998, see Figure 4.6) and conditions in the North Sea do not preclude a sustainable cod shery. Physical conditions are well within tolerance limits for the species and cod in the North Sea grow relatively fast compared 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 and subsequent recruitment, enabling calculation of maximum sustainable yield (MSY) and other criteria for establishing yield targets. The major problem with this method is that the relationship can be determined only after the stock has been shed for many years and a wide range of SSB values have been observed. 4.68 In recent years there has been a loss of condence in the application of this principle. Given environmental change and change in stock composition, some believe that North Sea stocks may have ipped to an alternative stable 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 absolve management of responsibility for the shery. The correct response to a lower rate of recruitment is decrease in F so as to achieve a higher yield from each recruit. The aim should be to achieve comparable landings by weight by harvesting larger but fewer sh.
Precautionary Limit
4.70 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 had recovered, and it was considered that the SSB should never be allowed to drop so low again. For good management, the aim is to keep SSB above 150,000 tonnes. Then, even with a period of poor recruitment, the SSB is unlikely to fall below 70,000 tonnes. 4.71 The precautionary shing mortality (Fpa) is set at 0.65 with the limiting value (Flim) at 0.86. If F is greater than 0.86, the number of sh removed is so great that there is direct impairment of recruitment. Fpa is calculated so 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 Sea stock. Annual landings since 1990 have averaged over 13,000t; F has been very high, averaging over 1.0, resulting in a decline in estimated SSB to only 2,600t out of which ofcial landings in 2002 were over 10,000t! This is clearly 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 of 4,500t. 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 this estimate. It is very likely that the stock is below Blim (70,000t) and hence liable to collapse. A number of international bodies have expressed concern over other environmental and conservation issues, including ecosystem 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 the debate. 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 measures outwith the normal range of management measures. Publicity has created consumer resistance to purchase of sh from non-sustainable sources and some leading food retailers guarantee not to sell North Sea cod. Prices are adversely affected as long as North Sea sheries are perceived to be in crisis. There are therefore special market and political pressures to reverse the decline of North Sea cod.
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The Cod Recovery Programme

4.75 The European Commission56 has proposed a cod recovery programme with the aim of restoring the North Sea cod57 to 150,000t in the time span of 5-10 years (see Chapter 7, Box 7.1) by increasing the SSB by 30% each year. Thus if all goes well, starting, at Blim = 70,000t, at 30% growth, theoretically SSB would reach 150,000t in less than 3 years, but there is an inevitable 2 year delay before sh hatched in the rst year enter the shery, so 5 years is a realistic minimum for such a recovery. SSB is unlikely to grow smoothly but would tend to increase stepwise whenever a good year-class is produced. There is no means of predicting when good year-classes may occur. Thus the target of 30% growth per annum can be only an average target over a number of years, and depending on when a good year-class materialises, the recovery period might be appreciably longer. The programme will be complete 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 no indication of what those more severe measures might be. The recovery plan has not been adopted and cod stocks continue to be managed by ad hoc modication of routine management procedures.
An Assessment of Recovery Strategies for Cod

4.77 Recovery strategies can be considered at several levels of severity of limits on catches: (a) zero catch of cod; (b) zero directed shery 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 or other strong evidence of rebuilding is observed. This advice was rejected by the European Commission Fisheries Council59 although it would have produced the most rapid recovery to Blim. Strict application of this strategy would entail closure of all demersal sheries in the North Sea for a minimum of 12 months. This strategy has the advantage of simplicity in enforcement since all boats should be tied up. There is a disadvantage that no shery data would be available so a small-scale sentinel shery might be organised with 100% observer coverage in order to check status of stocks. Other species, e.g. plaice and whiting which are also below safe biological limits, would benet from a moratorium on shing. But there is concern regarding indications that the 2002 cod year-class is one of the lowest on record, providing a poor basis for quick recovery. This measure however would be very damaging to the shing industry and is not deemed acceptable. Zero directed shery for cod. Nephrops stocks in the North Sea are in a healthy state and form the basis for a protable shery. Continuation of this shery could be allowed in designated areas and by-catch of cod minimised through encouragement of selective shing gears. Haddock shing also can be allowed in the North Sea so long as properly selective gear are used. We understand that FRS have been able to design such gear but shermen require an incentive if they are to make proper use of it. By combining a policy of closed areas related to cod distribution with limits on effort, reasonable Nephrops and haddock sheries should be possible with modest cod by-catch. Restricted cod TAC. In the absence of a formal cod recovery programme, this is the strategy that was adopted by the Council of Ministers with a TAC of 27,300t for 2004. It is contrary to ICES advice, which was based on calculations indicating that no recovery can take place in the presence of any shing 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 2001 and 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 low enough to allow stock recovery to 70,000t, possibly over two years instead of one, so long as this is supported by the industry and not distorted by illegal landings. This would, however, depend on sufcient cod 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 and limitation of effort will help avoid discards and overshooting of quotas with the associated tendency for illegal landings. Since Scottish boats land by far the largest directed haddock catches, measures to avoid cod by-catch are being largely directed against the Scottish eet. This is creating resentment within the Scottish eet.
(b)
(c)
4.78 The restricted quota strategy may result in an SSB in excess of 70,000t by 2005 or 2006. The question then arises as to what strategy to adopt to rebuild the stock to Bpa: 150,000t. A major criticism of the EC recovery plan is that it depends on the ability of scientists to provide good estimates of SSB and predictions in order to adjust the TAC each year. The track record of ICES ACFM has been poor in this respect and at low SSB values with truncated age distributions in the stock, errors are likely to be high. A review of successes and failures of shery
57
Also, cod in the Kattegat, West of Scotland and Irish Sea.
44
recovery plans around the world61 indicates that such adjustments of TACs are not successful and a simple xed low precautionary quota is recommended. A xed quota of 27,300t or similar precautionary amount until the SSB reaches 150,000t is likely to be an optimal strategy for North Sea cod. This should be supplemented by closed areas and restrictions on effort. Purely effort controlled management, whilst arguably an optimal way of managing the shery in the future, is not appropriate for a recovery period. Limitation of effort creates incentives to target shing 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 full employment for existing shing capacity in the Scottish eet. When Canadian sheries were reopened following moratoria, stock gains were rapidly dissipated62 owing to failure to remove shing capacity from the eet. Full recovery of the stock with all sh age classes adequately represented will take a decade, by which time technological advance will require further eet reductions and modernisation. 4.80 North Sea cod are managed under a 1999 agreement between Norway and the EU that TACs should be set consistent with F=0.65. For recovery to occur F must be lower than this very high reference value, compared with other stocks of cod where values of 0.2 to 0.3 are typical63. The high F value for North Sea cod might be defended on the grounds that this stock lives at higher temperatures than other North Atlantic cod stocks; but herring and mackerel with similar life spans in the shery 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 urgently reviewed. 4.81 Recovery of the North Sea cod stocks to a landings potential of 100,000t per annum after 10 years is probable 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 safe biological limits. Mismanagement of the North Sea cod shery has resulted in a loss of 50,000t 60,000t of landings to the Scottish eet worth 80-100 million each year. High shing mortality with F values close to 1.0, indicating removal of over 60% of the stock each year, has been the main cause of the decline. Adverse environmental conditions for recruitment of cod in the North Sea since 1990 contributed to the decline but could have been countered by reduction in shing mortality. High shing mortality has resulted in a stock comprised of mainly small young sh that cannot generate the recruitment that older experienced sh are capable of. This is impeding stock recovery. Calls by scientists for reduction in shing mortality since 1990 have been rendered ineffective by methods that over-estimated stock abundance and set TACs that were too high. This resulted in increase in shing mortality. Unquantied discards, illegal landings and misreporting of catches have increased uncertainty in sh stock assessment. Following the abundant 1996 year-class in the North Sea, scientists recommended increases in TACs. Had they recommended lower values, the current crisis in North Sea cod could have been averted. In retrospect, this would appear to be a major misjudgement in management. The EU cod recovery programme is awed since it gives no indication of how to achieve recovery of the stock to Blim (70,000t) and the subsequent rebuilding to 150,000t depends on setting annual TACs which have proved inaccurate in the recent past and contributed to decline of the stock. A cod recovery programme is necessary for the future of the shing industry and for ecological and environmental 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 shery. The low TAC of 27,300t proposed for North Sea cod in 2004 may be low enough to permit recovery if it is sustained 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 recent environmental changes.
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Recommendations: The EU Commission should manage demersal stocks so that shing 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. 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. 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 xed until Bpa (the safe minimum spawning stock biomass) of 150,000t is attained. The by-catch of cod in other sheries should be minimised by ensuring the use of species selective shing gears; TACs should be supplemented by limits on effort and designation of closed areas. Demersal stocks should be managed as a mixed shery with a single overall limit on effort and no discarding, coupled with measures such as selective gears, protected areas and real-time closures to prevent over-exploitation of individual species and of immature sh. 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 as such is more important than cod to the Scottish eet. The history of haddock since the 1960s is dominated by an extraordinary recruitment of almost 400 billion 0-group juveniles in 1967, which resulted in landings of almost one million tonnes in 1969 out of a SSB that peaked at 900,000 tonnes in 1970 (Figure 4.8); this is over three times 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*.
1000000 900000 800000 700000 600000 500000 400000 300000 200000 100000 0 1960
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4.84 At this time, F increased from 0.59 to 1.13 in the space of one year between 1968 and 1969, implying a massive increase in effort on this species. Fishing mortality remained high throughout 1970-2000, but has decreased in the last two years due to the combined effects of reduced effort under the cod recovery plan, and of good recruitment from the 1999 year-class. 4.85 Haddock is characterised by a much more volatile pattern of recruitment than for cod. Since the 1967 cohort, there have been peaks of 0-group sh in 1971, 1974, 1979, 1984, 1994 and 1999. Spawning stock biomass is 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
46
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 been consistently high over the last 20 years; the aim is to reduce it below 0.7 to avoid a collapse, and for optimal production we would argue for F < 0.5. There are good prospects for growth in landings if more good year-classes appear 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 less than 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 levels of 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 of 250,000t given the importance of this stock to the Scottish demersal sheries.
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 biggest single demersal sh resource in the North Sea. Currently, ICES makes no estimate of the SSB other than to comment that it reached a historic low in 1998. There is disagreement between different methods of estimating stock size. The 2002 total catch in Area IV was 40,000t, of which 16,000t was for human consumption, 7,000t industrial 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 explicit management objective for whiting in the North Sea. Because they are thinner than haddock and cod, their mesh selection characteristics are different, so management of the mixed shery is difcult; use of the optimum mesh size to protect haddock would almost eliminate the whiting shery. 4.91 Landings of West Coast whiting (Division VIa) have steadily declined from 17,000t in 1979 to 1,700t in 2002, with an average F of 1.0. This stock has clearly been overshed and is below safe biological limits. There has been 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 1981 to 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 most abundant whitesh 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 EU Commission should initiate a whiting recovery programme.
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Monksh
4.94 Management of this species is problematic. These sh do not shoal and occur at low densities. They are often caught in bottom trawl sheries as by-catch. A directed shery has developed mainly on immature sh. It is not possible to estimate spawning stock biomass. The mature females occur offshore in waters over 200m deep and are probably rare. Each female produces a large buoyant gelatinous raft of eggs which drifts near the sea surface. Less than ten such rafts have been recorded in the last 100 years. The production of young is therefore enigmatic 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 in 1997 and have since declined. The stock is presumed to be below safe biological limits as indicated by high F values, 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 fully exploited. Since these sh do not shoal and are generally caught as part of a larger catch of other species, setting single-species TACs for monksh is particularly inappropriate. If demersal shing effort can be reduced, then TACs could be removed. 4.96 Summary: Monksh 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: Monksh around Scotland should be managed through limitations on demersal sector effort rather than catch quotas.
Nephrops
4.97 These prawns live in burrows in muddy-sandy areas of the sea oor. As a species, they are relatively static and conned to areas of suitable ground. Functional units (FUs) (see Figure 4.9) are recognised and these can essentially be managed separately from one another. Each FU is generally shed by one nation and the Fladen ground (FU7), which is the largest Nephrops shery in the North Sea, is 95% Scottish. 4.98 For scientic assessment, there is a problem that prawns cannot be aged; there are no hard parts with annual growth rings. This means that cohort analysis or VPA cannot be applied in the conventional way, so that analysis is based on size frequency distribution. Assessment however is aided by TV camera surveys in which burrows are counted on the sea oor. There are no strong trends in landings per unit effort, which for Scottish boats on the Fladen ground have been quite constant at about 40kg per hour trawling since the build up of the shery 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 West Galicia and Portugal indicates that management should not be complacent and should guard against diversion of shing effort from the demersal whitesh sector to Nephrops. 4.100 On the west coast of Scotland, signicant quantities are creel-caught, but most are caught in trawls, and management as part of a mixed shery is a major consideration. If gear could be improved so as to catch only Nephrops, this would aid management considerably.
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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 Functional Units: 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 sheries 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 shermen adopt selective gears that do not capture whitesh. Management should be vigilant against diversion of effort from the whitesh sector into Nephrops.
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Pelagic Fisheries
4.102 The pelagic species, herring and mackerel, represent the largest shery 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 the last ve years from this stock are estimated at 10,000 tonnes per annum. Large catches now are derived from western mackerel that spawn to the west of Britain and Ireland. North Sea herring also suffered a collapse, and closure was declared in 1976; the stock subsequently recovered from extremely low values. Against this history of the experience of the worst stock collapse in living memory, these pelagic sheries are managed much more cautiously than the demersal sheries.
North Sea Herring

4.103 During the 1960s, North Sea herring landings peaked at over one million tonnes, and then showed a steady decline until the shery was closed in 1976 (Figure 4.10). Landings then reached a peak of almost 900,000 tonnes 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 is considered to be within safe limits and plans are in place for a decrease in shing mortality if SSB should fall below Bpa again. There is concern that the 2003 recruitment (Figure 4.12) is the lowest for over 20 years. It is interesting to consider the shing mortality (F) that peaked at 1.468 in 1975 (Figure 4.13), corresponding to a removal of 77% of the sh 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 shing mortality of only F=0.24, and the Fpa has been set at 0.25. The shery has been totally transformed by a revolution in management since the collapse in the 1970s.
Figure 4.10: North Sea Herring, Landings. ICES ACFM 2003.
Figure 4.11: North Sea Herring, spawning stock Biomass. Solid blue line Blim, Dashed blue line Bpa. ICES ACFM 2003 VPA*.
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Figure 4.12: North Sea ICES ACFM 2003 VPA*.

120 100 Recruits Age 1 (Billions, 109)
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Figure 4.13: North Sea Herring, Fishing Mortality. Dashed blue line = Fpa. ICES ACFM 2003 VPA*.
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4.105 The restoration of herring stocks can be considered a success for the CFP and the use of VPA. Several factors have contributed to success. The herring shery is seasonal and is not mixed, so there is little problem of interaction with catches of other species. The VPA is supported by results from the IBTS for adult herring and the larval herring surveys, so data quality and quantity are high. Following the collapse of the shery, the modern eet 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 Sea mackerel, and Western mackerel. Outwith the spawning season these two stocks mix together in waters around the 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.
900000 Spawning Stock Biomass (Tonnes) 800000 700000 Landings (tonnes) 600000 500000 400000 300000 200000 100000 0 1970 1975 1980 1985 1990 Year 8 7 Recruits Age 1 (Billions, 109) Fishing Mortality (F) 6 5 4 3 2 1 0 1970 1975 1980 1985 Year 1990 1995 2000 2005 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 1970 1995 2000 2005 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 1970 1975 1980 1985 Year 1990 1995 2000 2005
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4.107 The North Sea mackerel were virtually shed out in the 1970s but some spawning still takes place in the area of the Ekosk oil eld. Since that time, a shery has developed based on the western mackerel that spawn along the European continental shelf edge from the west of Scotland, west of Ireland, Celtic sea and into the Bay of Biscay. Spawning occurs in the spring to early summer. During autumn and winter, these sh migrate widely into the North Sea and north and west of the British Isles at which time they are exploited by the eet. 4.108 Fishing exploits 4 to 8 year-old sh and a reserve area known as the mackerel box is maintained off the west of Cornwall to conserve juveniles. Targeted mackerel shing is banned within that area. The box is controversial since juveniles are often caught in other areas, but currently it is recommended that the closed area be 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 mortality is currently 0.2, lying between the Flim value of 0.26 and Fpa of 0.17. This very conservative approach takes account of uncertainties in the assessments. VPA is used in the standard way, but is supplemented by stock assessments from egg surveys every three years.
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Management of Pelagic Fisheries

4.110 The scientic advice and management of the pelagic species since the crises of the 1970s has been much more 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 shing 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, the IBTS, and the larval sh surveys. For mackerel, only the egg survey every three years provides any sheryindependent data. 4.112 The catch of herring comprises 2 to 6 year-olds, and mackerel up to eight years old are caught. This is similar to the life span of North Sea cod, and there is no theoretical reason why cod should not also be managed at similarly low F levels, to the long-term advantage of both the stocks and the sheries. 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 sheries under the CFP has been a success. Management is simplied since these are single species sheries. The sheries can continue to be managed under TACs but multi-annual plans can be initiated. Particularly for mackerel, research is required on additional shery independent survey methods, such as egg surveys or acoustics.
Industrial Fisheries
4.114 Industrial sheries account for more than 50% of landings by weight from the North Sea. Landings are sampled to estimate the percentage of by-catch, and to gather data needed for stock assessment. The sandeel shery is by far the largest of the industrial sheries. No relationship has been observed between the spawning stock biomass of sandeels and subsequent recruitment, making prediction of the future state of this short-lived species problematic. The reported by-catch is surprisingly low. The strategy of sampling landings to assess by-catch rates is sensible, and it is unlikely that the estimates are substantially biased. The shery appears to be able to minimise by-catch a) by towing the net along the bottom at slow speed, allowing larger sh to escape, and b) by repeatedly shing a small number of locations with a sandy habitat, high sandeel densities, and low numbers of immature sh of other species. Fisheries for Norway pout and sprat have higher by-catch levels, but across all industrial sheries, the by-catch is currently estimated to be just 2%, which is a substantial reduction on earlier years. 4.115 ICES considers that sandeel shing mortality is well below natural mortality but they also admit to uncertainty over the state of the stock. It concluded that the stocks were able to sustain current shing mortality levels for the period 1995-2002, and set TACs at or above 1,000,000 tonnes from 1998-2002, with a small reduction to 918,000 tonnes in 2003. Only in 1998 was the industry able to achieve the TAC. 4.116 (a) Concerns over ICES advice include the following: ICES advice is based largely on a single-species perspective, despite some attempts to allow for multispecies issues. A high take of sandeels (especially if many 0-group sandeels are taken, as can occur late in the year) in a poor sandeel year may not do long-term damage to sandeel stocks, whose populations recover quickly. However, it may have a larger impact on longer-lived species that rely on sandeels for food, at least in some locations at some times of the year. There has been some circumstantial evidence that the sandeel shery can adversely affect kittiwakes, and much conjecture that it has a wider impact on seabirds; certainly, a lack of sandeels leads to breeding failures in several species, whether or not the shery is to blame. As a result, one area has been closed to the sheries to protect seabirds. The impact of a year with very low sandeel availability on other sh species such as cod cannot be observed, but may be signicant. Measures to protect 0-group sandeels might ameliorate such effects.
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(b)
Because the catch of industrial sheries is so great, even a low by-catch rate may lead to a substantial effect on those species most impacted. For example, in 2002 it was estimated from data provided by ICES working group members that 2% of the industrial catch was of whitesh (haddock, whiting and saithe), which corresponds to around 20,000 tonnes; although this is only around one tenth of the whitesh bycatch in the 1970s, it nevertheless represents a very signicant number of immature whitesh. Percentage of whitesh bycatch in the Norway pout shery is much greater than for sandeels, so measures to protect immature whitesh should be targeted at this shery. 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 the exploitation in the 2003 season. This restriction should apply until the strength of the incoming year-class has been evaluated . . . . For several years, TACs have been set at levels (around 1,000,000 tonnes) well above the landings achieved by the sandeel shery (700,000 to 800,000 tonnes). There are now conicting indications on the state of the stock. Much of the difculty is that recruitment shows little if any correlation with spawning stock biomass, and as the shery targets primarily 1-group sh, there is very little warning of a poor year-class. Nevertheless, the precautionary principle would suggest that the TAC should be reduced to well below the takes of recent years. Little is known about the ecosystem effects of industrial sheries. The availability of sandeels to predators, especially seabirds, has received much attention. This work highlights the adverse effect on predators of low local recruitment. Because of the low correlation between spawning stock biomass and recruitment, the effect of industrial sheries on recruitment can be argued to be either positive (removal of older sh frees up resources so that more are recruited) or negative (removal of 0-group sh in the shery reduces recruitment; 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 sheries is required. There is a widespread belief that extraction of species on such a scale must be damaging to the ecosystem and to larger predator sh. 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 for independent scrutiny. Summary:
(c)
(d)
(e)
4.117
Industrial sheries, predominantly sandeels, account for more than 50% of landings by weight from the North Sea with TACs of ca. 1,000,000t. Industrial shery landings have been very constant for over 20 years and ICES advise that the shery is sustainable. It should be noted that in recent years the shery has not been able to land the TAC. The ecosystem effect on other shes and birds of removal of large quantities of sandeels each year is poorly understood. Sandeels are short-lived and vary in abundance from year to year. There is concern that in low sandeel years the shery could be removing too great a proportion of production from the North Sea. The industrial sheries are so large that small percentages of by-catch could have substantial effects on other species. It is widely recognised that the Norway pout shery has a large by-catch of juvenile whitesh and should therefore be strictly controlled. Recommendations: The EU Commission should ensure the industrial shery TAC should be decreased below the recent reported landings and take account of interannual variation in abundance of sandeels. FRS should direct research at the potential ecosystem effects of the industrial shery.
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Deep-Sea Fisheries
4.118 This report has not considered offshore sheries in ICES areas VIb, XII, VIIc to the West of Scotland, since the tonnage taken by Scottish vessels is not large and indeed the total size of these sheries is small compared with those in the North Sea. Nevertheless, new deep water demersal species are often cited as having potential for development as an alternative to depleted shelf shing resources. 4.119 The demersal deep-sea sh are characterised by slow growth and long delayed maturity, leading to a low reproductive rate and low productivity. Demersal deep-water sheries are based on species such as roundnose grenadier (Coryphaenoides rupestris), black scabbardsh (Aphanopus carbo), blue ling (Molva dypterygia), deep-water sharks and orange roughy (Hoplostethus atlanticus)64. These species were rst exploited in the North Atlantic by Russia and other eastern European countries in the late 1960s and early 1970s. The roundnose grenadier is the most important species in reported landings from waters off Scotland (Table 4.2) and are mainly caught by French vessels. When the UK ceased to claim a 200 mile shery zone around Rockall, large parts of the Rockall Plateau and Hatton Bank became open to international eets, not simply those of the EU. This has increased effort and reversed 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 VI and VII (West of Scotland and Ireland). Species Blue ling Black scabbard sh Orange roughy Roundnose grenadier Smoothheads 1996 6928 3689 995 7095 1997 7361 2995 1039 7070 7 1998 8004 1967 1071 6364 1999 9471 2166 1337 6538 2000 8522 3712 1887 9790 978 2001 11070 4620 3692 14907 4684 2002 6096 5947 5765 8950 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 the deep-water sheries and instead recommended effort limitations. This was supported by the UK industry but it was rejected by the Council of Fisheries Ministers in 2001. TACs came into force on 1 January 2003 based largely on track records of reported landings. France received the highest proportion of the TAC, and UK and Ireland received only small allocations. The opportunities for UK vessels for expansion of deep-water sheries are likely to be limited. The effects of trawling on the fragile deep ecosystem are largely unknown and there is concern regarding the destruction of recently discovered habitats such as the Darwin Mounds for which the European Commission Emergency Regulation (1475/2003) has been put in place to protect them. Such areas may provide important refuges for juvenile sh and spawning monksh/anglersh that are also important in shelf sheries. 4.121 Summary:
Deep-sea sheries 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 shery by effort control as recommended by ACFM.
Overall Comments on Fisheries Science

4.122 Scotland has a long history of involvement and leadership in the science of shery management in European waters. Under the CFP, Scotland takes a large share of North Sea and adjacent shery resources. There is a contrast between the successful management of the pelagic and shellsh sectors under the CFP compared to the failure in the demersal sector. Technological creep results in an inexorable increase in shing capacity of the eet and the underlying need to remove 30-40% of vessels per decade even under favourable shing conditions was not addressed. During the 1990s science set excessive TACs that failed to curtail shing mortality. Much of the difculty in managing the demersal sector arises from the endemic high F values, these magnify the effects of scientic errors and lead to instability in sh stocks. Lowering F values, as was done in the pelagic sector, may remove many of the problems that have arisen.
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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) 27,300 848 77,000 7,205 16,000 1,600 7,000 3,180 18,987*# 11,300* 460,000 545,500
Cod North Sea Cod West Coast Haddock North Sea Haddock West Coast Whiting North Sea Whiting West Coast Monksh North Sea Monksh West Coast Nephrops North Sea Nephrops West Coast Herring Mackerel
27,300 1,808 51,735 8,675 16,000 2,000 7,000 3,180 16,623 11,340 400,000 556,607
*precautionary TACs # To be revised to 21,350t when Council of Ministers decides on appropriate management arrangements in mixed Nephrops/cod sheries.
The Structure of Fisheries Science

4.124 Fisheries science in Scotland is supported primarily by Fisheries Research Services (FRS) which is an agency of the Scottish Executive. However other input comes from the Scottish Association of Marine Science, the North Atlantic Fisheries College in Shetland, and the Universities of Aberdeen and Stirling. FRS is publicly funded and its principal duty is to provide advice to government. FRS provides Scottish representation at ICES. 4.125 FRS has a pivotal role in the process of sheries management in Scotland and is a leader in its eld in Europe. We consider that sheries science in Scotland is currently at full stretch and that it would be appropriate to nd ways of expanding the input to it. There is concern that the current funding and organisational structure for sheries science do not bring sufcient 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 that inclusion of debate about new methods and running new methods in parallel may strain the system to breaking point. This is one reason for our earlier recommendation that there should be a move away from the annual round of stock assessments. There does not appear to be sufcient capacity in sheries science across Europe to service the annual stock assessments and to carry on a debate about the development and implementation of new methods. Problems in the organisation and resources for sheries science have been recognised by the European Commission65, 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 for OST and other highly competitive sources of research funding, and where they should also be free to teach and speak 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 to rise to the challenge of international competition; (2) enabling non-FRS scientists to engage with the scientic problems being tackled by FRS; (3) encouraging interest in sheries science within the wider science community; 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 to support its research.
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References
Cwt , hundredweight = 50.8kg. Cushing, D.H. (1988) The Provident Sea. Cambridge University Press. ISBN 0 521 25727 1. 49 Garstang, W. (1900) The impoverishment of the sea. Journal of the Marine Biological Association of the United Kingdom. NS6: 1-69. 50 http://www.cefas.co.uk/shinfo/cod_all_ages.htm 51 Brussels 3.12.2003 COM(2003) nal. Proposal for Council Regulation Fixing for 2004 the Fishing Opportunities etc. Brussels 03.12.2003 COM (2003) 746 Final. 52 Dr M. Heath, FRS Aberdeen. 53 Cook, R.M., Sinclair, A. & Stefansson, G. (1997) Potential collapse of North Sea cod stocks. Nature 385: 521-522. 54 Scott, B, Marteinsdottir, G. & Wright, P. (1999) Potential effects of maternal factors on spawning-stockrectruitment relationships under varying shing pressure. Can.J.Fish.Aquat.Sci. 56: 1882-1890. 55 Cushing, D.H. (1984) The gadoid outburst in the North Sea. J.Cons.Int.Explor.Mer. 41: 159-166. 56 Proposal for a Council Regulation establishing measures for the recovery of cod stocks. Commission of the European Communities Brussels 6.5.2003 COM (2003) 237 Final 2003/0090(CNS). 57 Also, cod in the Kattegat, West of Scotland and Irish Sea. 58 ICES ACFM 2003 page 53 section 3.5.2. Cod in Subarea IV (North Sea), Division VIId (Eastern Channel), and Division IIIa (Skaggerak). 59 Proposal for a Council Regulation xing for 2004 the shing opportunities . . . Brussels 03.12.2003 COM (2003) 746 Final. 60 Request from the European Commission regarding recovery plans and management measures for cod. (page 511) ICES ACFM\2003\October\Cod & Hake. 61 Caddy, J.F. & Agnew, D.J. Invited Plenary Lecture. Recovery plans for depleted sh stocks: and overview of global experience. 62 Rice, J.C. et al. (2003) Recovering Canadian Atlantic Cod Stocks: The Shape of things to come? ICES. CM 2003/U: 06. 63 Rosenberg, A.A. (2003) The recovery plan for cod in the North Sea, Irish Sea and West of Scotland: more of the same and far too little. University of New Hampshire & MRAG Americas. 64 Gordon, J.D.M., Bergstad, O.A., Figueiredo, I., & Menezes, G. (2003) The deep-water sheries of the Northeast Atlantic: I Description and current trends. Journal of Northwest Atlantic Fishery Science. 31: 137-150. (Available on www.nafo.int/publications/frames/PuFRJour.html). 65 Communication from the European Commission: Improving scientic and technical advice for Community sheries management (2003/C 47/06).
48 47
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5 Fisheries and the Environment

Introduction
5.1 The marine environment is important to Scotland. As well as being an important source of food from both capture sheries and aquaculture, it contains much of Scotlands mineral wealth, it processes efuent outow and is 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 by government and the public of the need to change the primary focus for management of the marine ecosystem towards a more balanced consideration of all environmental functions.
Ecosystem-based Management
5.3 This change is reected in the recent move towards ecosystem-based approaches to management in the Common Fisheries Policy. There has been much debate about the denition and meaning of ecosystem-based approaches to management. This debate recognises explicitly the complexity of ecosystems and the interactions between their component parts. In certain areas of management, mainly including sheries, there has been a reluctance to embrace this cultural change, perhaps because of the implications there are for the economic viability of many sheries. 5.4 Examples of the way in which sheries appear to be unable to adapt to the new culture come from the continued move to exploiting new shing grounds and species (e.g. deep-sea sh) without appropriate assessment of the potential impacts of these moves. Other industries are required to carry out environmental impact assessments of their activities in advance, and it is not clear why the shing industry should be exempt from such procedures. Moreover, it would be normal for other marine-based industries to meet the costs of these types of assessments from within their own resources. 5.5 Marine ecosystems are more dynamic but much less understood than terrestrial ecosystems. There is an urgent need for improved knowledge and understanding of the marine environment, including sh 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 Impact Assessment for new ventures by the shing industry. We recommend that 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.
Environmental Policy and Fishing

5.7 As a result of the failure of sheries regulators to adequately address the impacts of shing, over the past decade there has been growing pressure from the environmental wing of governments and NGOs to ensure that sh species and the ecosystems of which they are part are adequately protected by applying the same standards as apply to other wildlife. 5.8 There are many ways in which environmental policy may have an impact on sh. Currently, a major focus is on intergovernmental agreements to set up a network of Marine Protected Areas (MPAs) intended to ensure (among wider objectives) that currently depleted sh species are restored to levels where they play their historic functional 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 its overlying water and associated ora, fauna, historical and cultural features, which has been reserved by law, or other effective means, with the aim of protecting species, habitats, ecosystems or ecological processes of the marine environment.
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5.10 MPAs raise a number of challenges, not least of which are knowing how to set restoration targets in systems whose species can uctuate enormously due to natural causes (and now potentially due to anthropogenic factors such as climate change); and how to apply a concept of xed protected areas to those marine species that are highly mobile. Another major problem is a turf war between the sheries and environmental wings of government, which has meant that, while the concept of MPAs has been well discussed, and commitments entered 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 1992 Convention on Biological Diversity (CBD) and the associated 1995 Jakarta Mandate. These emphasise site-based approaches to marine conservation. Under International Law enshrined within the OSPAR Convention and the EU Habitats and Wild Birds Directives, MPAs will be established in Scottish waters during the next decade. These will include representative networks of MPAs involving time/area closures of sheries for the protection of nursery grounds, marine habitats for non-target species and spawning grounds. They could lead to the cessation of shing within some of the richest shing grounds. 5.12 There remains considerable lack of awareness amongst those involved in sheries about these requirements and their implications. However, they are unavoidable, and will have an increasing impact on sheries policy in the coming years. We recommend that the Scottish Executive should ensure that forums (e.g. RACs and inshore management committees) established for regional sheries management should be tasked with helping to implement environmental policy relevant to their region. This would include the establishment of marine protected areas.
The Impacts of Fishing on the Environment

5.13 The impacts of shing on the environment include physical damage to the seabed, destruction of nontarget organisms, and, when overshing occurs, alterations to the balance of the ecosystem by extraction of large numbers of commercial species. In simple terms, over-shing occurs when a species is taken by a shery in quantities that cause declines over several sh generations. Many of the sh stocks exploited by the Scottish eet show the signs of over-shing. 5.14 A major problem when assessing the effects of shing is that we generally do not know how marine ecosystems should appear when there is no shing, so it is difcult to set objectively targets for the reduction of the impact of shing on the environment. Lack of information about how marine ecosystems were once structured is an obstacle to making value judgements about the future conduct of sheries. Setting objectives based upon subjective concepts of biological diversity is equally difcult and suggests that, after appropriate consultation, the Scottish Executive needs to provide clear policy objectives for marine environmental management and these must include sheries. In this respect, it is important that Scotland embraces the approach adopted 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 how energy ows from the phytoplankton at the bottom of the food web through to predators like sh, seabirds, seals, cetaceans (porpoises, dolphins and whales) and turtles at the top of the food web. Although food webs can be very complex we know that energy is dissipated as it moves from the bottom to the top. Animals at the top of the food web are less abundant and have lower potential to recover from harvesting. In general, shing has tended to target 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, shermen have gradually shifted attention from the larger species to smaller species further down the food web66. It is debatable if this has happened in Scottish waters but the shift of shing effort from demersal whitesh to Nephrops indicates declines in shing opportunities for whitesh as a result over-exploitation. 5.17 Evidence from Scotland suggests that efforts to decommission shing capacity in the demersal whitesh sector and to restrict quotas has resulted in a shift towards shing for shellsh. Because different regulations are in place for vessels of 10m and under, and they are generally shing nearer to shore, an unintended consequence of the decommissioning schemes for the demersal eet may have been to increase the pressure on the inshore shing region and, therefore, to increase the near-shore impacts of shing.
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5.18 This progression from the exploitation of one group of species to others illustrates the current and historically unsustainable nature of sheries. This is not a modern phenomenon but it has accelerated in the past few decades. Pressure to retain levels of employment and protability in the face of increasing industrial efciency has led to inevitable pressure to nd more sh resources. Most indicators suggest that this pressure is invidious because it reduces the possibility of recovery of already over-exploited sh stocks. 5.19 In contrast to the land-based ecosystems where exploitation will often involve removing the primary producers (i.e. plants), in the oceans there is little evidence that shing affects the phytoplankton, which are the plants of the oceans. In circumstances where sh populations have declined because of shing, the energy that these populations once consumed is likely to be absorbed by other parts of the food web. Energy could be channelled into species that are of no commercial importance and it could encourage the growth of populations of non-human predators such as seals (see below). The whole ecosystem can be driven into another state involving 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 shermen and they may also have reduced value in the provision of vital ecosystem services. 5.20 In some circumstances shing threatens the biological extinction of populations. Fish near the top of the food web, such as cod and many deep-sea sh (e.g. orange roughy) are particularly vulnerable, as are those that have predictable spawning aggregations or occupy specic habitats that are known to shermen. Sustained shing of these types of species has led to changes in their genetic structure that are likely to have reduced their capacity to overcome natural environmental cycles such as the North Atlantic Oscillation. 5.21 The way in which shing often selects only certain individuals from sh populations will be detrimental to the populations resilience to exploitation. Ironically, technical measures used to conserve sh stocks, often involving increasing the mesh size of nets so that only the largest sh are captured, could have a long-term negative impact on the stocks. Selection for sh that become reproductively mature at a small size and young age probably leads to lower egg quality and production. This points to the need for refuges, possibly in the form of MPAs, for the large, old sh together with an overall reduced mortality rate through greatly reduced shing effort in order to ensure that enough sh mature to reach an old age. 5.22 Even in the absence of shing, some of the impacts of shing could take centuries to resolve. Recovery of the genetic structure will be a slow process if indeed it will ever occur.
Could Other Factors Inuence Fish Populations?

5.23 There is increasing evidence that, even in the absence of shing, marine ecosystems are highly dynamic within quite broad boundaries. This means that we would expect uctuations in the balance of species abundances both geographically and through time. Declines in sh populations resulting mainly from environmental processes can be made worse as a result of shing 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 possible cause of uctuations in the North Sea cod stocks67. It is suggested that the period from the early 1960s to the early 1980s may have been particularly favourable for cod recruitment but recently conditions for recruitment have been much less favourable. This type of uctuation in the fortunes of sh stocks also probably applied to other commercial species68. Figure 5.1: IBTS North Sea Location 1, 1st quarter trends in Bottom Temperature.
60N 2E Bottom Temperature 9
8 Temperature C
5 1960 1970 1980 Year 1990 2000 2010
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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 6.67C, whereas for 1990 onwards the mean is 7.67C, 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 sh distribution or 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 in northern 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 shes 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 nmarchicus. Conversely, abundances of benthic invertebrate larvae and phytoplankton have increased. 5.27 Since a strong year-class of cod in 1987, there has been a trend towards lower recruitment which could be linked to environmental change. It is possible that changes in plankton availability have precluded optimal growth of cod larvae. However, these values are not very different from those prevailing in the 1960s and early 1970s when the cod stocks were increasing but shing pressure was lower. 5.28 It is clear that the current problems with the major whitesh stocks arise because of high levels of shing70 but this is exacerbated by unfavourable environmental conditions. This suggests that the expectation for the future will be reduced productivity of whitesh stocks and levels of shing pressure will have to be reduced accordingly.
Impacts on Other Species

5.29 Fishing can often be highly precise with respect to which species are captured. This is generally true of pelagic sheries but more often shing also catches species that were not the target of the shery. Depending on the level of this by-catch, the effects on the population of non-target species will be similar to the direct impacts on the target species. This could involve reduced population size, selection of particular sizes of individuals from the population and, through time, genetic modication of the population. Unlike the target species, there is usually very little information available about the populations of non-target species because information is usually only collected about species that are of commercial importance. Consequently, it is very difcult to know what effect shing has on the populations of some of these species. Since some species may be extremely rare and have low resilience to shing, it is already possible that shing has caused local extinctions of populations without us ever knowing. In such circumstances, the establishment of MPAs may help to promote the survival of such species. 5.30 Indirect impacts of shing can also occur on non-target species. These are impacts that occur through the effect that shing 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) and complex (meaning that they contain many interacting components). Managing sheries along the lines of current and historical practice is like attempting to manage the function of one organ of the human body in isolation from, 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 abandonment of single species population dynamics models, especially where appropriate alternatives do not exist. Instead, it advocates that the results of these models should be subject to modication by including the ecosystem interactions at a higher level in the assessment process. Sometimes this can include formal integration of data from other species into multi-species assessments (e.g. as in multi-species VPA) but the assessment process also has to include other indicators of ecosystem status and health which can be used to modify output from formal stock assessment models.
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5.32 The understanding of the factors that produce stability in marine food webs is improving. For example, the existence of webs within webs is seen to be a stabilising inuence, and disruption of this sub-structure could lead to 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 metaphor comparing the capacity of a boat to right itself when hit by a wave with the capacity of an ecosystem to withstand the strain of shing. In most circumstances, the boat is able to withstand waves but, when hit by a large enough wave, the boat will roll to a point when it will capsize and will not return to the upright. The indirect effects of shing on ecosystems could act in a similar catastrophic manner. In the same manner as the responsible boat skipper will avoid compromising the stability of his boat, ecosystem managers should take a cautious view about the effects of sheries on ecosystems.
Marine Mammals and Fisheries

5.33 Marine mammals have the potential to compete with the industry for resources. The actual number of cetaceans in Scottish waters is not well known but the numbers are substantial. They include 200,000-300,000 harbour 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 over the by-catch of these species in some sheries. But this appears to be less of a problem in Scottish-based sheries than some others in Europe and, in general, the shing industry is working hard to introduce technical measures that can reduce this type of by-catch. 5.34 Marine mammals eat sh and increasing numbers of seals in Scotland mean that they will be eating more sh. Although seals, and other species of marine mammals, are often viewed by shermen as competitors for sh, the interaction between marine mammals and commercial sheries is complex. Overall, marine mammals in Scottish waters are likely to eat between 0.5 and 0.75 million tonnes of food each year but it is known that much of 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 sh stocks, because there is no evidence that seals are short of food at a time when the overall level of sh stocks is very low. Increasing populations of seals may be a consequence of changes in the structure of the marine ecosystem resulting mainly from shing. Seals may have been rather better than shermen at exploiting these structural changes (see 5.19). Regular calls for control of seal numbers represent a deep-felt belief on the part of shermen that this will help their cause but culling seals is unlikely to be a practical solution. It is most unlikely that the costs of undertaking control of seals would be balanced by comparable economic benets to the shing industry. Such an approach to management can lead to highly emotive responses on the international scene and could put Scotland at odds with many of its major trading partners. There are also plausible scenarios in which removal of seals would reduce the sh available to shermen because seals may eat some of the predators of young cod and other whitesh. Therefore, there is sufcient uncertainty, both biological and economic, surrounding a policy of seal control to make it an unattractive option at this stage.
Seabirds and Fisheries

5.36 Seabirds can also be major consumers of juvenile sh and sandeels, which form the major part of the diet of many seabirds around Scotland. The total consumption of sandeels by seabirds in the North Sea is likely to be about one-fth of the commercial harvest73. Concerns over the effects of sandeel sheries on seabirds mean that the breeding success of some seabird species has been used as an indicator of the status of sandeel stocks in the North Sea. However, there is still uncertainty about the extent to which seabird populations have been inuenced by the sandeel shery74. 5.37 Seabirds may have beneted from sheries by feeding on discarded sh and offal. For some time it was thought 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 signicance of the shing industry as a major source of food for seabirds.
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References
Caddy, J.F. & Garibaldi, L. (2000). Apparent changes in the trophic composition of world marine harvests: the perspective from the FAO capture database. Ocean & Coastal Management 43, 615-655. 67 Beaugrand, G., Brander, K.M., Lindley, J.A., Souissi, S. & Reid, P.C. (2003). Nature 426, 661-664. 68 Platt, T., Fuentes-Yaco, C. & Frank, K.T. (2003). Nature 423, 398-399. 69 Anon (2003) Scottish Ocean Climate Status Report. Fisheries Research Services, Report 05/03, Scottish Executive, 20pp. 70 Cook, R.M., Sinclair, A. & Stefansson, G. (1997). Potential collapse of North Sea cod stocks. Nature 385, 521-522. 71 Report of the ICES Advisory Committee on Ecosystems, 2001. 72 Report of the UK Special Committee on Seals, 2003. Natural Environment Research Council. 73 Furness, R.W. & Tasker, M.L. (1997). Seabird consumption in sand lance MSVPA models for the North Sea, and the impact of industrial shing on seabird populations dynamics. In: Forage shes in marine ecosystems. Alaska Sea Grant College Program, AK-SG-97-01, pp 147-169. 74 Tasker, M.L., Camphuysen, C.J., Cooper, J., Garthe, S., Montevecchi, W.A. & Blaber, S.J.M. (2000). The impacts of shing on marine birds. ICES Journal of Marine Science 57, 531-547.
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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 remained relatively stable. A developing halibut industry currently produces 300 tonnes per annum. Cod farming is in the early stages of development. 6.2 Shellsh are also farmed in Scottish coastal waters, notably mussels, oysters and scallop. Of these, only mussel farming has developed to any signicant scale, with a production of 3,236 tonnes in 2002. Figure 6.1: World and UK salmon production 1990-2002.
1,400,000 1,200,000 1,000,000 Tonnes per annum 800,000 600,000 400,000 200,000 0
90 92 94 96 98 00 19 19 19 19 19 20 20 02
Others UK
6.3 The Scottish salmon industry is worth over 230 million at rst sale values and Scottish Atlantic salmon now 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 this employment is based in remote shing-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.
160000 140000 120000 Production (tonnes) 100000 80000 60000 40000 20000 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Salmon Trout Mussel
6.4 The Scottish Executive has recently launched a new Strategic Framework for the Sustainable Development of Aquaculture in Scotland and the EU has also recently launched an Aquaculture Strategy. Both initiatives envisage further expansion and consider diversication into other species to be an essential element of future development. In Scotland the species at the heart of the diversication process is the Atlantic cod, though Atlantic halibut, haddock and a variety of shellsh species also have a signicant role.
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6.5 The EU Strategy envisages an increased aquaculture production within the member states by 4% per annum with particular attention given to molluscs, new species (e.g. cod), organic production and environmentally certied 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 environmental sustainability of the industry. 6.7 Impacts from organic wastes are limited to the areas immediately adjacent to net-pens and the area of seabed affected in this way by aquaculture is considered to be insignicant 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 ushed areas and regulation is used to control risks from medicines residues. Strict control of such risk is currently exercised by the Scottish Environmental Protection Agency (SEPA) through a consenting approach under the Control of Pollution Act 1974. This utilises modern modelling techniques backed by on-site measurement to restrict local sh production and the site-specic approach is the rst of its kind among the sh farming nations. 6.9 Cod farming would t directly into such an assessment, with the expectation that total biomass of cod in a given site at the present time would be considerably less than that of salmon because of the dramatic improvement in food conversion efciency 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 modication of cod diets with improved food conversion efciency and reduced waste production. 6.10 In the case of salmon aquaculture, the issue of possible genetic interaction with wild stock is being addressed through the Tripartite Working Group which includes representation from the Scottish Executive, the Aquaculture industry and wild shery interests. The possibility of relocating sh farms to reduce the risk of such interaction is also being examined by the Location/Relocation Working Group recently established by the Scottish Executive. 6.11 The benets of synchronous fallowing and common management regimes are also being exploited through Area 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 zone management. 6.12 It is recognised that synchronous fallowing in a Management Area may not be possible as new species are introduced. Until improvements in diet development and sh growth take place, it is likely that the time taken for 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 cod alongside existing salmon stocks. The Strategic Framework recognises that such multiple species sites may have to be utilised for the rst 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 sh species and the emergence of new diseases. The Aquaculture Health Joint Working Group, established by the Scottish Executive and with representatives from the Executive and industry, is actively developing Codes of Practice which will take account of this risk and allow rapid 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. Signicant Norwegian investment has taken place, especially in the area of hatchery development and technology. An estimated 4 million ngerling cod were produced in 200376 and it is suggested that ngerling production in Norway could soon reach 80 million sh per annum. 6.16 However, the on-growing of cod juveniles to market size is being carried out by the major salmon growing companies in Norway, usually backed by Norwegian bank nance. The current low protability of farmed salmon has led to a lack of risk capital in Norway for cod grow-out farms, such that demand for juveniles was signicantly less than the volume produced.
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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 llets and blocks, the lowest-value commodity. Should this occur, it is suggested that protability could only be achieved through the use of large-scale operations and signicant operational improvements. Clearly, such economic forecasts are also signicantly affected by eventual sales price. 6.18 It is thus considered more likely that smaller scale development will occur, aiming to produce sh for the high-end price segment of the market in fresh products. 6.19 Estimates by the British Marine Finsh Association suggest that 30,000 tonnes of cod may be produced annually in Scotland by 2013. Two commercial cod hatcheries have now been established in Scotland and early on-going trials have commenced. Both species produce extremely small eggs and the growth of hatched larvae commences with a range of live feeds before weaning juveniles onto dry diets. The process is technically complex and costly and takes place in on-shore facilities using pumped seawater and very strict hygiene control. Year round production of juveniles is also being achieved through light and temperature control in on-shore broodstock units so that year-round supplies of farmed sh can be produced. 6.20 Further growth of cod juveniles from 50gm or larger takes place in oating net pens in the sea in facilities very 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 and development in problem areas such as early maturation (likely to be controlled by light manipulation in marine pens), relatively slow growth (dietary development for cod is still in its infancy) and lack of effective broodstock selection 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 with limited water exchange have largely been replaced with sites in more exposed locations which have increased carrying capacity. 6.23 In view of the restricted number of new sites suitable for aquaculture, there is a clear role for the substitution 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 particularly benecial where relocation of existing salmon farms is being considered in important areas for wild salmon stocks or 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 signicant damage in salmonids. 6.24 It is also possible that cod-farming developments may take place in sheries dependent areas on the east coast, where there has previously been a presumption against salmon farming because of perceived risk to important wild salmonid stocks. Farmed cod produced to date have attracted premium prices and future expansion 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 nancial backers entering the cod aquaculture industry, it is expected that existing salmon farmers and their nanciers will be the main source of development income. 6.25 The Scottish Aquaculture industry has been successful in developing a strong brand image with the development 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 to the restaurant trade and will not satisfy even the UK demand for cod. It will compete directly with top quality line-caught cod rather than the bulk of Scottish landed or imported cod. It is thus unlikely that Scottish aquaculture-produced cod will signicantly substitute wild-caught sh in the short to medium term. Future aquaculture production of cod will be very dependent on market conditions and competition with other aquaculture producers (e.g. Norway). There is the possibility of future expansion (beyond a 15-year timetable) but this is only likely if attempts to produce a sustainable international cod shery fail.
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Figure 6.3: Global shmeal and oil production compared with aquaculture production using shmeal-based feeds (sh and crustacea).
8.0 7.0 6.0 Million metric tonnes 5.0 4.0 3.0 2.0 1.0 .0
90 92 94 96 98 19 19 19 19 19 20 00
Fishmeal Fish oil Fed aquaculture
6.27 Aquaculture production of both salmon and cod currently relies heavily on the use of sh meal and sh oil. World shmeal production has changed very little over the last 15 years despite the dramatic 10% annual growth in aquaculture production (Figure 6.3). Variations in shmeal production have generally been related to El Nio events. Northern hemisphere aquaculture feeds are manufactured using raw material principally sourced from industrial sheries in the southern hemisphere, especially from Peru and Chile, and there has been a gradual transfer of shmeal from traditional animal feed use to aquaculture feeds. Aquaculture feed production currently utilises some 35% of world shmeal production and 70% of sh oil. Fish oil requirements for growing cod are much less than for salmon production. 6.28 Any expansion of aquaculture will have to include substitution of sh products with those of vegetable origin. Recent research has led to approximately 30% substitution of plant oils in salmon diets and this trend is set to continue. Substitution of sh oils with plant oils also allows a practical means of reducing the content of oil-associated environmental pollutants such as dioxins and PCBs. Trials have demonstrated signicant reductions by allowing a degree of plant oil substitution during the ongrowing phase followed by feeding a nishing diet containing sh oil pre-harvest to ensure adequate Omega-3 content and maintenance of the human health benets of eating such food77. 6.29 With these developments in mind and the increasing production by aquaculture of plant-eating species such as carp in freshwater, FAO predict that by 2030, 50% of sh production will come from aquaculture. Recommendations Further research should be carried out into the substitution of sh oil in farmed sh diets with plant oil as a means of promoting sustainability of industrial sheries. Scottish Ministers should consider how research with new species such as cod can be supported to enable the diversication of Scottish aquaculture production.
References
75 Review and Synthesis of the Environmental Impacts of Aquaculture. The Scottish Association of Marine Science and Napier University; Scottish Executive, Central Research Unit, 2002. 76 Winther, V., Hemple, E. & Rnning, J.E. (2003). KPMG Centre for Aquaculture and Fisheries, Trondheim, Norway. In: Fish Farming International 30 (7), 36-39. 77 Bell, J.G., Tocher, D.R., Henderson, R.J., Dick, J.R. & Crampton, V.O. (2003). Altered fatty acid composition in Atlantic salmon (Salmo salar) fed diets containing linseed and rapeseed oils can be partially restored by a subsequent sh oil nishing diet. Journal of Nutrition 133, 2793-2801.
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7 Managing Scotlands Fisheries for Sustainable Development

Introduction
7.1 The CFP has recently undergone a major review and some important changes have been introduced. It is therefore unlikely that the Commission and Council of Ministers will be willing to consider major change so soon after the last review. Nonetheless we believe that there is scope within the existing framework for far reaching improvements that can help to rebuild a strong, viable and sustainable future for all of Scotlands shing industry. There is also a need to reassess the responsibilities of the UK and Scottish administrations if the industry is to achieve its full potential in Europe. The industry itself has a key role to play. We wish to see it adopt a positive and proactive 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 industry that gave rise to this Inquiry, our report must look beyond this to ensure that Scotland can have a stable and sustainable shing industry, capable of providing a livelihood for future generations of shermen. This cannot be achieved without some painful decisions.
Allocation of Management Responsibility

7.3 Exclusive competence for formulating policy on sheries conservation in the EU is vested in the Commission and Council of Ministers. Policy decisions are published in the form of EU Regulations which the member states are required to adopt. Member states are responsible for the enforcement of Community rules in respect of vessels ying the member states ag, shing in the member states waters and landing their catches in the member states ports. In the UK, responsibility for enforcement is shared between the Sea Fisheries Inspectorate 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 of these is the internal allocation of shing entitlements through the mechanisms for quota management and the regulation of inshore waters. As already explained in Chapter 2, the Council of Ministers annually decides the TACs for all major stocks and these are allocated to member states in accordance with the principle of relative stability78. It is the role of each member state to determine how the quota should be allocated among the national shing eet. Signicant differences occur across Europe. In the UK, day-to-day management has been devolved to Producers Organisations (POs) with the UK sheries departments jointly agreeing the allocations to the 19 POs on the basis of xed quota allocations held by the member vessels. Roughly 5% of the total UK quota is allocated under two other systems: one for vessels over 10 metres not in PO membership and the other for vessels under 10 metres. 7.5 Responsibility for inshore sheries 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 all vessels, including those of other states with historic rights, shing in the 0-12 mile zone. Since the base line used to dene inshore waters runs to the west of the Western Isles, encloses all sea lochs and the Minch, and provides protected zones around St Kilda and North Rona as well as around the Northern Isles, Scotland has one of the most extensive inshore shing zones of any country in the European Union. Inshore waters thus constitute one of Scotlands most valuable natural assets. 7.6 A third area where member states have responsibility is eet structure, where the Commission sets reference points for reducing eets; but it is left to the member states themselves to determine how these targets will be met. Successive rounds of decommissioning in Scotland, including that in 2002, have been managed by the Scottish Executive Environment and Rural Affairs Department (SEERAD).
78
See chapter 2, para 2.12-2.13, relative stability and The Hague Preferences are explained.
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The Policy Process

7.7 The procedure for decision-making in sheries policy within the EU is outlined in simplied form in Figure 7.1. Two main routeways can be identied. The rst, which is relatively direct, applies to the annual round of stock assessments and TACs. Scientic advice is provided by ICES to the Commission and recommendations are thereafter put to the December Council meeting. The second involves consultations with the industry and other stakeholders 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 are submitted to the Council of Ministers. Although this process is intended to take account of technical and nontechnical advice, it is liable to impose serious delays in decision-making and, on occasion, makes decisions unintelligible in the eyes of the shing industry. Figure 7.1: The CFP: a simplied view of the current formal decision-making system. Landing statistics from member states
Policy advice (conservation)
ICES Stock assessments ACFM
STECF Policy generation Opinion Draft proposals ACFA EUROPEAN PARLIAMENT (Fisheries Committee)
COMMISSION
DG Fisheries
Rejection
Proposal
COUNCIL OF MINISTERS Policy decision-making Draft proposals
Response
Regulation
MEMBER STATES Policy implementation
Policy implementation
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7.8 A more serious area of concern for this Committee is that decisions taken in Brussels often depart from the scientic advice received from ICES, usually without any clear explanation of why this should be so. The Commissions own inuential Scientic, Technical and Economic Committee on Fisheries (STECF) comprising mainly scientists, many of whom will have been involved in the stock assessment exercises provides the initial lter, evaluating the advice from ACFM in the context of the CFP. Despite its name, STECF offers little by way of economic advice, principally because of the dearth of comparative economic data. Moderation of the scientic advice may occur within the Commission whose task is to balance the scientic advice against the economic and social objectives of the CFP. In this they are inevitably attempting to balance the risks to the sustainability of the stocks and the economic viability of the shing industry. Only rarely will the Commissions recommendations depart very signicantly from the scientic advice. A notable exception occurs in the case of cod, where it has twice refused the scientists advice of zero TACs. Less measured departures from the scientic advice may occur during the Council of Ministers December meetings, where the decisions are more overtly political. The most recent example was their decision in 2003, taken in the context of the cod recovery plan (see 7.19 et seq) to raise the 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 Europes sheries; an essentially reactive rather than proactive approach to sheries 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 shermen. Where the industry has been consulted, it has usually been in the end stages and about implementation rather than formulation of policy. The only formal representation of shing interests is through the Advisory Committee on Fisheries and Aquaculture (ACFA). Otherwise, to make their views known the industry has to rely on representations through member state sheries departments and contacts with the Commission (DG Fisheries); or through the European Federation of Fishermens Organisations (Europche) and pressure groups representing shermen throughout the Union. It is, therefore, easy to understand the frustration of the Scottish industry and the sense of despair felt in shing communities at their exclusion from the process, the apparent lack of urgency in dealing with the industrys problems and the absence of concern for the fate of the shing communities.
Regional Advisory Councils

7.11 Against this background, the decision in December 2002 to establish Regional Advisory Councils was particularly welcome. This stemmed from proposals put forward jointly by the Scottish Fishermens Federation (SFF) and the National Federation of Fishermens Organisations (NFFO)79. The Commissions proposals fall well short of what the industry had been looking for, mainly because their functions will be advisory rather than executive. But despite scepticism about the extent to which the regional advice will inuence policy, the industry in 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 the regions is seen by many as too large for the benets of subsidiarity to be properly realised and to undermine any greatly increased stakeholder participation. The composition of the Councils, limited to 18 members representing both shing and non-shing interests, may make it difcult to get the full benet of the industrys knowledge and experience. Separate Scottish representation on the North Sea or Western Waters Councils cannot be guaranteed. Moreover, the exclusion of sheries scientists from formal membership of the Councils makes it doubtful whether the 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 for specic sheries, or indeed sub-regions, the Commission is anxious to limit the proliferation of regional advice.
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7.14 It may now be too late to alter the present structural arrangements for RACs, though these may be expected to evolve over time. But, despite the limitations, it will be up to those on the Councils to develop a sense of partnership between the industry and non-industry representatives in order to ensure that they work to achieve sustainable sheries and healthy marine ecosystems. The Councils will be required to respond to policy proposals from the Commission and/or member states. But the greatest test for the RACs will be in setting out their own strategies for the development of their regions sheries. If these are to be credible, they must satisfy the need for protection of the marine environment and the conservation of endangered habitats and non-commercial species, as well as the development of commercial sheries. 7.15 The establishment of RACs, despite their lack of executive function, does offer the opportunity for major improvement, because it adds an important new source of advice on which policy should be based. They should be seen as the rst step towards incorporating the industrys knowledge and experience into the policy process and, it is to be hoped, ultimately devolving responsibility to the regions. There is, however, a long road to travel before the ultimate goal of regionalised management can be achieved. Only if the RACs can add clear value to the existing process and demonstrate the industrys potential for management responsibility can there be any real hope that they will eventually be given such a role. It would help if the Commission were to set a date for the review of RACs, say 5 years from their implementation, with a view to extending their functions. Such a prospect would 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 and see them as part of reforming the substance, rather than simply the image, of the management process. They could offer the Commission valuable regional intelligence on sheries and their management, which has been lacking in the past. Council Regulation 2371/2003 makes no commitment on the part of the Commission to act upon the advice received. However, it must be assumed that where the advice is based on a consensus of RAC members it will normally be adopted. Otherwise, the frustrations of the shing industry (and others) will be increased, with damaging consequences to relations between the European institutions and the Scottish shing industry. 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 rst step towards devolution of sheries management. 7.18 We recommend that 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 shing industry should seize the opportunities presented by RACs to demonstrate a responsible role in sheries management.
Reforming the Management System: the Cod Recovery Plan

7.19 The most pressing issue facing the Scottish shing industry today is the cod crisis and the proposals for its solution in the cod recovery plan. Scientic 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 weaknesses associated with sheries management in Europe, including its focus on single species management. It has heightened the dispute between industry and science over the adequacy of stock assessment methods, and dismayed many in the industry as a result of the seemingly dismissive attitudes on the part of both scientists and administrators towards empirical evidence provided by shermen. Furthermore, the delays in bringing forward and agreeing the recovery plan only add to the belief, widespread within the Scottish industry, that the Commission and Council of Ministers lack a sense of urgency over the cod crisis and that the CFP cannot deal swiftly and effectively with it. All of this feeds the industrys demands for a fundamental change in the system of management for Scotlands sheries. 7.20 The recovery plan is a high risk strategy. It fails to set a clear time frame for recovery; indeed it offers no guarantee that cod stocks will recover. Moreover, there are serious doubts over the wisdom of adopting single species recovery plans. Cod has been singled out as the key species and management policy in the northern North Sea, 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 sheries no longer cast cod in such a strong leading role. An alternative option might be to focus management on maximising the potential from the full range of demersal sheries in a genuine multi-species approach (see para, 7.42 et seq below).
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7.21 Following dire warnings from ICES in 1999 about the future of cod stocks, emergency measures, involving sharply reduced TACs and an 11 week closure of the cod spawning grounds, were introduced in the northern North Sea and West of Scotland in 2001. Draft recovery plans were laid before the Council of Ministers in 2001 and again in 2002, only to be rejected in favour of interim measures for the introduction of days at sea limitations. Finally, in May 2003 a revised plan was tabled by the Commission (see Box 7.1). At its December meeting the Council approved a series of measures for regulation of the cod sheries, effective from 1 February 2004, but left detailed proposals for the long term recovery plan, embracing the notion of multi-annual management, to be decided at a later date. Some of these measures are at variance with the latest proposals for the cod recovery plan. Box 7.1. Outline of the proposed cod recovery plan: COM (2003) 237 nal 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 target levels for SSB in the North Sea of 150,000 tonnes (Article 3) and the plan will be deemed to have fullled its objectives 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 level of 70,000 tonnes, TACs will be set with the aim of achieving a 30% increase in SSB in the following year (Article 6.2); (2) TACs should not generate a shing 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 (unspecied) exceptional rules may be introduced (Article 7). Chapter III contains the proposals for the management of shing effort (Articles 8-13). It establishes procedures for (a) calculating total shing effort expressed in kilowatt-days (b) distributing the total shing effort across member states and (c) translating this into equivalent days absence from port [making no allowance for steaming time to and from the shing grounds]. Days at sea allocations should be fully transferable and usable at any time during the shing year. Chapter IV lays down measures for monitoring, inspection and control of vessels involved in the recovery plan. These measures include prior notication (Article 17), requirements to land at designated ports (Article 18) and the stowage and transport of cod (Articles 19 and 20). Signicantly, no provisions are made in the proposals for technical conservation measures (gear regulations and closure of shing grounds). Source: Commission of the European Communities, Proposal for a Council Regulation establishing measures for the recovery of cod stocks, COM (2003) 237 nal, Brussels, 2003. 7.22 The latest package of measures marks a signicant advance towards adopting effort control as a principal management tool, though still within a framework of TACs and quotas. The Commission and Council of Ministers have not adopted the extreme solution favoured by ICES closure of the cod sheries at least for the time being. Linkages between cod and other species, notably haddock, have been broken and a 50% increase in the North Sea haddock quotas for the UK has been agreed. The principle of spatial management, advocated by SFF81, has been acknowledged with the designation of two distinct zones in the northern North Sea. 80% of the haddock quota requires a special permit, and can be taken only outside of a cod protection zone. The remaining 20% 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 exibility is given to the member states to determine the way in which they manage days at sea, permitting the aggregation of monthly allocations into periods of up to 11 months. This will allow POs and shermen to plan the most effective use of their allocations. Days at sea allocations are subject to limited transferability: they can be transferred within the same management period, area and gear type to vessels with 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 within which UK vessels may take no more than 20% of their haddock quotas. Wrapped very tightly around the Northern Isles and extending south to 5730' N, it negates the locational advantages enjoyed by Shetland, Orkney and North East coast shermen in proximity to their shing grounds. It remains to be seen whether, as a result of these constraints, the Scottish whitesh eet is able to sh the increased haddock quota to the full. These regulations apply only to UK shermen; those from other member states are free to take all of their haddock quotas without this restriction. But this is because the UK haddock quota has been increased and is now 78% of the total for the EU, whereas there was no increase for other member states. Meanwhile, days at sea restrictions now apply throughout the whole of Area VIa (West of Scotland). Here, TACs for cod, haddock and whiting have been further reduced and an area to the north and west of Orkney has been closed to all shing by EC vessels.
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7.24 The success of the cod recovery plan the details of which are still to be worked out must be in some doubt. A number of potential threats, which have not been addressed within the plan itself, have been identied82. They include the under-reporting of catches, as a result of discards and illegal landings, and technical creep; the latter over a period of 5-10 years can be quite formidable. Moreover, commitment to the plan on the part of industry could be jeopardised by unresolved points of disagreement between the shing industry and the policy makers viz: the need for a recovery plan in its present form, arising from doubts over the extent of the cod crisis and the degree to which it is caused by overshing or by ecosystem effects; conicting evidence of stock recovery resulting from the original emergency measures, with some in the industry 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, should the evidence point to eventual failure, and an exit plan should the targets be met; uncertainty over nancial compensation in the form of continuing transitional payments; and the question of whether the proposed plan could be inuenced by political manoeuvres under the qualied majority voting system.
Managing for Sustainability

7.25 Even more important than nding a lasting solution to the current crisis over cod stocks is the need to secure the long term sustainability of the Scottish shing industry. Never again should the industry be placed in jeopardy by overexploitation. While continuing to focus mainly on the future of the whitesh sector, the pelagic and shellsh/inshore sectors must not be neglected and we recognise that these may require different systems of management to achieve sustainability. 7.26 A sustainable shing industry is a difcult concept to dene. Sustainability is more readily applied to the biological resources, where it means guaranteeing the renewal of sh stocks on an annual basis while ensuring that the underlying structures of the stocks are sufcient to maintain renewal over the longer term; and to the marine ecosystem where it implies the maintenance of the essential diversity and integrity of the system. But it is also appropriate to apply the principle of sustainability to the shing industry itself, its economic and sociocultural systems on which it is based, and to ensure that these are not subjected to severe policy induced shocks that may lead to their breakdown. At the same time, strategies for sustainable development must remain sufciently exible and adaptable to take account of the effects of changes to the ocean environments and/or the global and regional economies. 7.27 Each of the different applications of sustainability can be expressed in the form of policy objectives. But dening the objectives is one thing; prioritising them and mediating between the potentially conicting economic (efciency) and social (equity) objectives is quite another. In looking to dene the objectives for sustainable Scottish sheries, we believe that the systems of management will need to ensure that: 1) stocks of commercial species in Scottish waters are maintained in a sufcient 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 and wherever feasible strengthened; 3) a strong, efcient and economically viable sheries sector, embracing both harvesting and processing, is capable of being maintained without recourse to long term subsidies; 4) the sheries sector continues to generate sufcient secure, well paid and rewarding forms of employment to maintain dynamic and vibrant shing 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 efcient, cost effective, transparent and enforceable.
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Balancing Capacity and Resources

7.28 A reduction in the harvesting capacity of the Scottish whitesh eet in line with harvestable resources in the North Sea and West of Scotland is a prerequisite for long term stock recovery and for a protable, sustainable industry. While capacity remains above the level required to harvest the allowable catch, there will always be inducements to overexploit the resources. 7.29 Four generations of Multi-Annual Guidance Programmes (MAGPs) have failed to bring the growth in shing 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 shing capacity continues. In Scotland the number of over-10m vessels fell by 42% in the ten years up to 2003 but the average size of the vessel (engine capacity) increased by almost a half in the same period. In an attempt to limit increases in shing capacity, a system of vessel capacity units (VCUs) attached to the shing licence was introduced in the UK in 1990; when licences were aggregated to allow the building of a new and larger vessel, a 10% penalty was imposed on the combined value of the VCUs83. But the principal tool for achieving capacity reduction was a series of annual decommissioning schemes (1993-97) based on competitive tendering by the vessel owners 84. 7.30 Across much of Europe, the main thrust of structural policy to reduce shing capacity was being undermined by rules governing the Financial Instrument for Fisheries Guidance (FIFG), which provided grants for the building of new capacity an anomaly which will end in December 2004. However, this bizarre situation cannot account for the growth in capacity of the Scottish eet: over the past 15 years or so, the UK government has not used FIFG for new vessel building85. As a consequence, the renewal of the Scottish eet has been less marked than in many European countries. 7.31 Currently, the Commission is to set reference points for national shing eets but leave it to the member states to decide how to achieve their targets. The UK has initially opted for decommissioning as the principal lever, focusing on the segment of the whitesh eet primarily engaged in the beleaguered cod sheries. In practice this means removing a signicant number of modern efcient vessels. Many believe this to be shortsighted, assuming recovery of whitesh stocks at some future date. But there is also concern that this latest round of decommissioning is falling behind its target for capacity reduction, as a number of approved bids have subsequently been withdrawn. SEERAD has therefore been forced to turn to its reserve list to secure the required capacity 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 decommissioning rounds should remove some 35% of the whitesh eet (see table 3.3) in Scotland, but this needs to be set against original estimates of 40% or more overcapacity at the European level86. But how will any remaining excess capacity be removed? The Committee recognises that Ministers have already said there would be no more decommissioning rounds and the Treasury may be reluctant to fund them. Leaving it to market forces, on the other hand, will be slow and painful and it will not be possible to manage a planned reduction to achieve a preferred eet size or structure. 7.33 Individual transferable quotas (ITQs) have been successfully introduced in Iceland, where they have made a signicant contribution to the rationalisation of the shing eet87. For the UK, a report commissioned by DEFRA concluded that ITQs would offer the most economically efcient means of securing a further reduction in catching capacity 88. 7.34 However, it would still be subject to the disadvantages of the existing single species TAC system. The industry faces a deepening nancial crisis with high levels of indebtedness and little prospect of an immediate upturn in quota entitlements. It is therefore not well placed to face open competition for quota. Although there are persuasive economic arguments for a market-led solution, there are serious issues arising from the social impacts on shing dependent areas in the more remote parts of Scotland and the future viability of the Scottish whitesh industry. Market-led structural rationalisation would almost certainly lead to further structural and spatial concentration of the whitesh eet. 7.35 Were such assets to become part of the investment portfolios of nancial companies, they could in future be traded without reference to the best interests of Scotlands shing industry. Under conditions of a common market they could be acquired by shing (or non-shing) interests in other member states, so long as those who
83 85
Calculated on the basis of (length in metres x breadth in metres) + (engine power in kW x 0.45). The issues that affect the UKs use of EU Structural Funds are explained in Chapter 2.
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bought them had a presence in the UK, registered their vessels in the UK, were subject to UK inspection and adhered to other conditions, such as labour market legislation to which UK vessels must adhere. Despite these conditions, purchase of UK quota by interests in another member state could put at risk the principle of relative stability to which we attach over-riding importance. 7.36 There is at present no clear indication of what would constitute an appropriate eet size to maintain shing mortality at sustainable levels, though it would seem that the capacity of the existing eet is still likely to exceed the resources available if these are to remain sustainable. We believe that the industry should discuss this with the Scottish Executive and that, if any further reduction in the number of vessels proves necessary to achieve protability, funds should be made available to assist this process on a voluntary basis. Any resulting strategy should make provision for ongoing modernisation of the eet.
The Regulatory System

7.37 Rebuilding the management system for sheries in the EU is essential; to keep the present system in place would be to abandon hope of sustainable sheries in the future. Ironically, the opportunity to lay the foundations of sustainable sheries in European (and Scottish) waters is created by the cod crisis. In its approach to the cod recovery plan, the Commission is moving broadly in the right direction. The timeframe of the cod recovery plan seems to us an appropriate one for the transition to a new approach to sheries regulation. 7.38 Although the new system must be robust, it must also distinguish between the different sheries demersal, pelagic and shellsh applying the style of regulation that will work best. Clear cut choices will need to be made between different modes of regulation and also in relation to the nature of the harvesting rights conferred on the shing industry, notably whether their ownership is vested in the state, the community or the individual sherman. 7.39 Almost all forms of sheries management in the developed world deploy a mix of input restrictions, output limitations and technical conservation measures. In most cases the emphasis has been placed on output limitations in the form of TACs and catch quotas; and in Europe only the Faroe Islands have abandoned this system 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 of the CFP it is when stocks are in decline and shing effort has to be reduced that the effectiveness of a system of stock conservation is put to the test. Clearly the system applied to whitesh stocks in EU waters has failed this test. 7.41 Single species TACs and quotas are awed as a means of regulation in a mixed shery, since scientic stock assessments are unable to deliver the level of specicity required to set appropriate TACs and, anyway, shermen cannot sh for a single stock. They have, therefore, lost credibility in the eyes of the shing industry. Inadequacy of enforcement has rendered the system open to abuse. Indeed, illegal landings are thought to have increased sharply in recent years, when quotas for cod and haddock have been set at very low levels.
A New Approach
7.42 In the following sections we set out our preferred schema for regulation. As indicated in Figure 7.2, we distinguish between: (a) the whitesh sector, where the mixed sheries are best regulated through a combination of effort controls and a more developed use of technical conservation measures; (b) the pelagic sector which, because of its leaner structure, targeted sheries and seasonality of harvesting, would retain a TAC and quota based system; (c) the shellsh sector where, especially in inshore waters, technical conservation measures with some limitations on catch and/or effort are more suitable.
(a) The Demersal Sector Effort Control

7.43 Throughout the Scottish whitesh sector there is growing but qualied support for replacing the present system by one based on effort quotas. The principle of effort control is already acknowledged in the revised CFP and is being applied in the cod recovery plan. With effort control, the system of management is based not on restricting the outputs from the shery but on restraining levels of shing mortality through restrictions on the number of days allowed for shing. Under normal conditions, days at sea allocations would not be attached to
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specic species but would apply to the harvesting of any species in the mixed shery. Theoretically, the system offers a number of advantages over catch quotas: it reduces the burden on sheries science because it is no longer necessary to estimate the stock sizes for different 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 satellite surveillance; and effort control would be combined with a requirement to land (and sell) all sh caught irrespective of size or species, 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 difcult to calibrate for widely differing types and sizes of vessel and different gears. It would be necessary to set sustainability objectives for a days at sea regime that would apply to the shery as a whole rather than for particular species in particular areas. Effort entitlements would be established for well dened eet segments and allocated to individual vessels taking account of the vessel size (kW), specifying the gears to be used and the areas to be shed with the given days at sea. This would not preclude the vessel from building a portfolio of effort entitlements using different gears and shing different areas. But the main challenge of the new system would be nding a means of holding shing capacity and effort in check. There are several ways of increasing de facto shing effort without altering the specications of the vessel shing 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, effort entitlements would be allocated to segments of the whitesh eet dened by size and type of vessel and also for specic shing areas (e.g. North Sea, West of Scotland, Irish Sea etc). Subsequent transfers of entitlements would only be permitted within eet segments and not across segment boundaries. Where transfers were negotiated between vessels operating in different shing areas, the requirement would be for the transferred entitlements to be 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 existing catch 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 allowable shing 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 the highest value species, resulting in selective overexploitation. Suggestions that effort and catch quotas be used in tandem to preserve high value stock, as at present under the cod recovery plan, would be expensive to enforce and recreate the problems of discards, high grading and illegal landings. We therefore recommend that catch quotas be phased out over the duration of the cod recovery plan; but their use as the principal means of regulating the shery 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 relative stability and to which effort quotas should broadly conform but not with the spurious precision of detailed annual stock assessments. Any tendency to concentrate too much shing effort on particular high value species can 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 effort control rules.
Technical Conservation Measures

7.49 Reductions in the eet through decommissioning are intended to bring harvesting capacity more into line with resource availability, and effort control should ensure that the deployment of the surviving capacity remains in balance, so maintaining a sustainable level of shing mortality. However, sh stocks are naturally volatile, both in size and distribution, so that effective management also requires adaptability, spatial and temporal sensitivity and exibility. The introduction of an effort control system offers the opportunity to reclaim some of the exibility that was once a feature of shing practice.
SCIENCE Scientic advice on multi-species and ecosystem based approaches LOCAL, NATIONAL AND REGIONAL INSTITUTION MANAGEMENT A: WHITEFISH SECTOR (Incl. Nephrops) Rationalisation of harvesting sector: decommissioning Effort control Days at sea allocations for all vessels over 10m
Figure 7.2: Summary of Management Proposals
PRINCIPLES OF SUSTAINABLE FISHERIES Tradable KW days managed by POs Community investment in effort quotas and ringfencing of PO allocations Rules to limit and/or penalise technical creep No discards TCMs: closed areas, real time closures; gear regulations Electronic log books: paper trail of catch from shing area to nal point of sale B: PELAGIC SECTOR Capacity limitation TACs and quotas: fully tradable IVQs TCMs: closed areas, gear regulations Electronic log books C: INSHORE FISHERIES (within 12 nm limits) Limited access: Licensing of vessels based on VCU
Overall productivity of the ecosystem rather than the conservation of species and stocks
Regional Advisory Councils (RACs) Long term strategy for integrated development of sheries and protection of marine ecosystems Technical advice on sheries management
Flexibility and adaptability in face of changing environmental and economic conditions (global markets)
Economic, social and cultural sustainability; economic viability, social equality and underwriting of coastal communities
Scottish Sea Fisheries Authority National strategy for integration of harvesting, processing and service sectors Regional development plans co-ordinated by POs, FAs and/or RIMCs National research and development strategy
Pelagic Advisory Council (as for RACs)
limits and port TCMs: closed areas, gear regulations Effort and/or catch limits: weekend bans, limit on pot numbers etc.
Regional Inshore Management Committees (RIMCs)
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7.50 Spatial sensitivity and exibility can be provided through technical conservation measures which have not hitherto been used to the fullest extent in the CFP. Gear regulations in general provide the key to regional sensitivity. A greater emphasis must be placed on the selectivity of shing gears in terms of mesh size, the introduction of square mesh panels, and selector grids to control both the size and species of sh taken. Ways and means must be found to overcome the natural resistance of shermen to investing in technology that is likely to reduce rather than increase the short term returns from shing. Financial incentives to offset the initial costs of installing more selective gear and penalties in reduced allocations of days at sea for those that fail to comply with gear regulations may both be necessary. 7.51 Flexibility in management can best be catered for through use of closed areas. In some circumstances, it would be desirable for closed areas to coincide with marine protected areas. Closed areas can be deployed seasonally to safeguard spawning stocks or permanently to protect specic types of habitat. They can exclude all types of shing activity or be applied selectively to prevent the use of certain types of shing gear. They can also be used for economic and social reasons to protect locally based, small scale inshore shing eets. The one type of closure that has so far been missing from the CFP is the so-called real time closure used as a short term emergency measure to suspend shing activities when, for example, abnormally large populations of juvenile sh are present in an area. 7.52 It is essential that RACs should have a major role in developing and applying these measures. They can provide the missing intelligence on which an appropriate and regionally sensitive use of gear restrictions and closed areas can be based. In particular, decisions on real time closures should be devolved as soon as possible to RACs, as the present machinery is far too cumbersome and centralised to do this effectively. Their effectiveness depends on immediate action taken in hours rather than days or weeks which, even under the new provisions for emergency actions (Regulation 2371/2002: Articles 7 and 8), the CFP cannot deliver. 7.53 Technical conservation measures can be both benecial and detrimental. They can assist sh stock conservation by increasing the selectivity of gear, thereby reducing by-catch, and they can also reduce damage to marine habitats. However, these measures can also exacerbate genetic selection for smaller-sized sh and this may have an impact on the resilience of the population to shing. In the widest sense, technical measures can also include seasonal regulation of shing and the use of closed areas. Through the activities of OSPAR and the North Sea Ministerial Council, a network of marine protected areas will be implemented over the next ten years and these could include the use of a variety of technical measures to control the impact of shing. It is important that RACs have a central role in the process of designating and managing these areas.
The Transferability of Fishing Rights

7.54 The Committee shares the industrys concern over the lack of clarity regarding the ownership of shing rights and believes that the uncertainty may hamper future progress towards a more efcient structure of the catching sector. Accordingly, we recommend that the UK sheries departments, in collaboration with the shing industries, should undertake a wide ranging review of the existing system of quota management having regard to the states responsibilities for the conservation and management of the sheries, on the one hand, and the nancial viability of the industry, on the other. The review should examine, inter alia, the present method of allocating shing rights, conditions of transfer and the holding of quota by non-shing interests. It should pay particular attention to the likelihood of replacing existing catch quotas by effort allocation and the need to ensure that effort allocation is transferable between vessels. The ndings from the review will have considerable relevance for the proposals in paragraphs 3.22-3.29 concerning the nancing of the catching sector. 7.55 The Committee was favourably impressed by the system of community quotas which is emerging in Shetland, as a result of investment by the PO and the Shetland Islands Council through its subsidiary SLAP in purchasing additional quota for the Islands whitesh sector, thereby helping to retain the industry in Shetland and to make it possible for new entrants to acquire existing quota. We consider this to be a proper and responsible course of action to secure the Islands shing future, although we recognise that it is the particular circumstance of funds being available from Shetlands oil revenues that make this possible. It is not an example that could easily be followed by other local authorities entirely dependent on revenues from Council tax or general taxation.
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(b) The Pelagic Sector

7.56 Scottish pelagic sheries based on mackerel and herring are reasonably buoyant at present. The eet of 27 vessels all over 30 metres in length and based mainly in Fraserburgh and Shetland is among the most modern in Europe. The sector is relatively easy to manage, partly because of the small number of vessels involved; it also shows good discipline in resisting the opportunity to increase its catch, even when stock assessments are favourable, in order to support market prices. Although the major markets lie overseas, there is growing integration between the catching eet and the expanding processing industry. Condence in the sector is high. 7.57 Because of its lean structure and the seasonality of harvesting, the sector is suitable for regulation by TACs and catch quotas. We would not wish to see that change. But management needs to bear in mind the long history of boom and bust that has affected herring sheries in particular. Fish stocks by their nature are volatile and the present upswing is unlikely to remain indenitely. Irrespective of shing pressure, sh stocks may fall sharply at some time in the future. Those responsible for management therefore need to prepare for this by guarding against overcapitalisation and inexibility. Attempts to expand overseas markets and the ongoing build up of capacity need to be carefully monitored.
Enforcement
7.58 No sheries management system can expect to succeed unless it can be properly policed and enforced. A severe blow to the UKs reputation for legal shing and good enforcement was dealt by the European Commissions recent formal letter of notice concerning failings in the obligation to enforce CFP rules. The text identies misreportings by area in pelagic sheries, by species in demersal sheries, and under-recording of landings resulting from the practice of overlling boxes with demersal sh. It also notes the low ratio between recorded infringements and prosecutions, commenting that sanctions do not meet the level of deterrence required. This follows earlier reports by the National Audit Ofce drawing attention to the low level of prosecutions and inadequate penalties meted out by UK courts for illegal shing. 7.59 Effective policing depends on three factors: rst, the vast majority of shermen must accept the need for the chosen system of regulation; second, the regulations need to be sufciently clear to be easily understood by the shermen; and they must be fully implemented. Finally, the enforcement agency must have sufcient resources 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 if modern satellite monitoring systems are in place for all vessels over 12 metres and there is a tariff of penalties for deliberate tampering with on board transponders. But the main benet is that the incentive to land illegally would disappear since all sh caught could be legally landed. On larger vessels the use of electronic logbooks and paper trails of catches from shing area to nal point of sale intended as part of quality auditing can also assist in the monitoring of landing data. Indeed, it is possible to envisage a shift in the emphasis of enforcement from inspections at sea to the auditing of logbook and landing data. In some instances, however, the deployment of sheries inspectors on board shing vessels can help to monitor the ways in which shermen perceive, interpret and respond to particular conservation measures.
A Timetable for Change

7.61 The changes we propose for the whitesh sector involve not simply new regulations but a shift in the basic nature of the system from a reliance on TACs and catch quotas to one based on time management. This will have implications for all parties scientists, administrators, shermen 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 the demersal sector and Nephrops trawl sheries with effort control (days at sea) and closed areas. The present system 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 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. 7.64 We expect that this time frame should be sufcient to allow for the extension of satellite monitoring systems to all whitesh and pelagic vessels over 12 metres and for appropriate methods of scientic assessment to be developed in support of the effort control system.
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Inshore Fisheries Management

7.65 Although the Inquiry has focused attention mainly on the whitesh sector, the inshore sheries must not be ignored, especially as the severe downturn in the whitesh industry could displace effort towards shellsh. The inshore waters are one of Scotlands most valuable and enduring assets, not only for commercial sheries but for their diverse natural heritage and contribution to tourism. As already noted, they are among the most extensive inshore waters of any EU member state. 7.66 Ensuring that the delicate balance between man and nature is not disturbed and guaranteeing that these valuable assets are in no way diminished in value for future generations is a responsibility shared between the Scottish Executive, the local authorities and the local shing communities. While it is difcult to put a precise value on the revenue generated by the inshore sheries, their importance to the regional and local economies in areas like the Highlands and Islands is undeniable. In these areas, the traditional inshore sheries usually involved seasonal participation in the whitesh, pelagic and shellsh sectors, often on a part time basis, in the crofting economy. Today, inshore shing is focused largely on exploitation of shellsh stocks and undertaken mainly on a full-time rather than part-time basis. 7.67 Management of inshore sheries 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 gear conicts than conserving shellsh stocks. The Scottish Executive needs to make some critical decisions over the role of inshore waters and the sustainability of inshore shing, notably whether the 6 and 12 mile zones should remain open to Scottish vessels of all classes and ports of origin or be reserved mainly for the use of locally based vessels. A particular issue is how to maintain or restore traditional exibility that allows switches between species, while being able to control shing effort. 7.68 Inshore sheries are facing a distinct threat of overexploitation from both within and outwith the sector. There are suggestions of redeployment of capital investment and shing effort from the whitesh to the shellsh sector. Moreover, several parameters of inshore sheries management are now being shaped by external considerations. These include marine nature conservation, in particular the creation of Special Areas of Conservation under the European Habitats Directive, and, in future, by the implementation of the Water Framework 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 authors identify three guiding principles for future inshore sheries management in Scotland: it should be conducted at the local scale; it should be stakeholder led; and it should be based on an integrated approach to sheries and the marine environment. These principles are best achieved by the introduction of regional inshore management committees to provide for comprehensive management of sheries and mariculture within the 12 mile zone and with powers to recommend the introduction of local bylaws concerned with living marine resources within inshore waters. Funding should come from central and local government sources. Membership of the committees would comprise a wide range of local interests in shing 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 sheries adopted elsewhere in this report (see 7.77 et seq below). The Committee recommends that Scottish Ministers establish inshore management committees on a local scale, led by the industry and should follow an integrated approach to sheries and the environment.
An Ecosystem-Based Approach to Fisheries Management

7.71 An ecosystem-based approach to sheries management is now widely canvassed as the way forward. It is cautiously accepted by the scientic establishment and by a shing industry chary of its precise implications. And, signicantly, it is endorsed by the European Commission as a dening characteristic of the revised CFP and is promoted by the FAO. It is, therefore, not so much a new approach as an emerging feature of sheries management. 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 living aquatic resources, to provide for their sustainable exploitation and to minimise the impact of shing activities on marine ecosystems. It shall aim at a progressive implementation of an ecosystem based approach to sheries management . . .
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7.73 Yet there is no agreed denition of what an ecosystem-based approach means and this goes a long way to explaining 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 range of meanings in different contexts. 7.74 It is a truism in sheries management that one cannot manage the sh stocks per se but only the activities of shermen. Man does not yet have the ability to manipulate the marine environment, modify the ecosystem or alter sh populations to suit his own interests. Yet, unwittingly, through shing activity, man has an impact on the physical environment of the sea bed, alters the structure of the ecosystem and modies the behavioural characteristics of sh populations in ways that have affected and may degrade the marine environment. 7.75 Adopting an ecosystem-based approach to sheries management, therefore, implies no more than using our developing knowledge and understanding of marine ecosystems to tune our systems of management for conservation of sh stocks to try to ensure that the biodiversity of the marine ecosystems are not further impaired. As our understanding of marine ecosystems increases, it should be possible to rely less on the blunt instruments of single species TACs and quotas and put greater trust in technical conservation measures. But to attain such a position will require more investment in the marine sciences in general and a realignment of sheries science from its preoccupation with stock assessment to more emphasis on species interaction. In coming to understand the dynamics of the food chains and ows of energy within the ecosystem, we should be able to provide a more reasoned response to a number of issues, such as industrial sheries and seal populations, that presently trouble the industry. 7.76 Reecting also the issues raised in Chapter 5 (paras. 5.3-5.6), an ecosystem based approach to sheries management should, inter alia: aim to secure a reduction in the capacity to sh to a level commensurate with the long term regenerative capacity of the stocks; ensure that damage to the benthic habitat and bycatches of non-target species are minimised through the use of more environmentally sensitive and selective shing gears; make provision for the introduction of Environmental Impact Assessments (EIAs) in respect of all new sheries; 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 sheries management and marine environmental management at European, national and regional levels, so that sheries are managed by bodies with a sufcient understanding of the environmental impacts of shing. An ecosystem based approach should be supported, where appropriate, by the provision of nancial incentives through FIFG to assist the adoption of environmentally responsible shing methods.
Taking the Politics out of Fishing

7.77 We have noted the widespread wish of the shing industry to take the politics out of shing, in other words to remove decision making on what are essentially technical measures from the highly politicised policy process. Although this plea was most commonly made in reference to the behaviour of the Council of Ministers, it also has relevance for decision-making in a national context. While we recognise the strength of this view, and make some recommendations below to try to deal with it, it has to be said that it is unrealistic to imagine that arrangements to govern or control any form of economic activity or employment can be divorced altogether from the political process. 7.78 We were also concerned to note the apparent unwillingness of the Scottish shing industry to face up to, and in some cases even to accept, the problems of diminishing sh stocks. With a few notable exceptions, there was a failure of the industry to work together to nd solutions to the problem and to provide workable alternatives to the CFP measures that are so widely disliked. In part, this may be because shermens organisations, having been denied an active role in management, see themselves principally as lobbyists for the industry.
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7.79 It is essential that the decision-making process should marry the expertise of the scientists with the professional experience of the shing industry. It causes us dismay that the gulf that appears to separate shermen and scientists is so great. No doubt there are faults on both sides but there is an urgent need to bring the two sides together in discussions that could be of benet to both. We were particularly encouraged by the recent success of the North Sea Commission in achieving closer understanding between the industry and the sheries scientists. 7.80 We have reviewed the scope for reducing the role of government whether in Brussels, London or Edinburgh. The objective would be to ensure that the formative stages of policy-making, including the collating and interpretation of scientic, technical and economic information, takes place in a less politicised arena; that the 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 exibility or speed of decision making necessary for effective management. 7.82 Removing the conservation of marine biological resources from the exclusive competence of the Commission and Council of Ministers would make the policy subject to the principle of subsidiarity and open the way for RACs, and possibly more local organisations, to have a signicant role in decision-making and management. Properly constituted and with a true sense of responsibility for management, there is no reason why the advice of the RACs should not become the proposals of the Commission. In due course we would hope that they might evolve into management organisations rather than simply advisory committees. 7.83 We have given much thought to how these difculties might be resolved and especially to how the industry might be given a greater role in its own management. We recognise that there may be opposition in some 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 industry but with other lay members with relevant expertise or interest. It would advise the Minister on all matters relating to sheries and their management in Scottish waters, including policy formulation, monitoring and assessment; surveillance and enforcement; and scientic research. Similar authorities exist elsewhere in Europe both within and outwith the EU. The new authority would take over the existing agencies, FRS and SFPA, and it would be for consideration how it should relate to Seash (economic analysis, marketing advice) and Seafood Scotland. Funding would come principally from the Scottish Executive, rolling up the current budgets for FRS and SFPA and with an element of direct funding from the shing industry. (2) To establish separate Boards for the management of FRS and SFPA, which are presently semi-independent agencies. The Minister would be responsible for appointing these Boards and membership would be drawn from the industry and from other persons with relevant interests. The chairperson should be independent and the 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 shing matters. This would be a deliberative body, but would provide an opportunity for all those with relevant interests and experience in the catching sector to debate the issues confronting 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 3 could 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 of important industry initiatives can be identied including those in the Shetland Islands (see Box 7.2), the nascent Clyde management scheme, the North East Scotland Fisheries Development Partnership, the Highlands Regulating Order and the Torridon Nephrops management plan, inter alia. Signicantly, in a number of instances the local authority provided the initial catalyst for integrated action. 7.86 At a regional level we believe that more onus should be placed on Scotlands nine Producers Organisations (POs) to develop shing plans, and harmonise catching, processing and marketing activities so as to maximise the economic value of limited shing opportunities for their members and for the wider shing community. POs have already succeeded in their limited function of sectoral quota management. They are well placed to engage in market planning and development; this was, after all, the original purpose of POs. A few POs have already gone
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some way towards closer integration between the catching and processing sectors. Others might nd it useful to collaborate in this task with regional associations and local authorities. But such developments would depend on the willingness of shermen to submit to the disciplines of providing advance landing information and scheduled times of landing. With fewer resources at their disposal, the 30 Scottish shing co-operatives (with some 330 member vessels) mainly engaged in sh selling and chandlery could possibly undertake a similar role for the inshore sector. We note the recent decision by the Stornoway Fishermens Co-operative to acquire processing capacity on behalf of its 28 vessels. 7.87 It is possibly at the local level and in relation to inshore sheries that the most pressing need to create the conditions for participative governance arises. Co-operation and self-reliance begin with the local community; if they cannot ourish at this level, there can be little hope for their success at higher scales. The arrangements for inshore management in Scotland lag behind those in England and Wales in that there are no devolved structures within which these attributes can grow. While the existing system may suit the need to regulate access to specic inshore waters to avoid gear conicts, it does not satisfy the conditions for resource conservation so well. Nor does it t the requirement for environmental integration. We would therefore reiterate our earlier conclusion of the need to put in place regional inshore management committees with a broad remit in relation to both sheries and mariculture. 7.88 We recommend that Scottish Ministers should seek to bridge the gulf between shermen and scientists and should also consider our alternative proposals for restructuring the institutional arrangements for sheries management as set out in this Chapter.
Box 7.2. Laying the basis for sustainable sheries in the Shetland Islands. The Shetland Islands the most northerly outpost of the Scottish shing industry comprise a shing dependent region par excellence. Today, around one fth of the Islands employment and GDP is linked to shing and aquaculture. Although the regions economy has been greatly enhanced in recent years by oil-related revenues now in decline, its long term future rests on the careful management of the living resources in the seas around the islands and on providing strong community based support for the shing industrys continued development. Joint action by the Shetland Islands Council (SIC) and the Islands shing interests in part supported by oil revenues invested in the Shetland Development Trust have resulted in a range of initiatives intended to guarantee the future sustainability of the shing industry. These initiatives include: the building of the North Atlantic Fisheries College, providing the basis for education, research and training in sheries related disciplines, inter alia; the adoption of the Shetland Islands Regulating Order (1999) for management of shellsh resources within the 6 nm limits by a local partnership (Shetland Shellsh Management Organisation Ltd); quota purchase schemes funded by the Shetland Fish Producers Organisation and by Shetland Leasing and Property Development Ltd (SLAP), a commercial investment agency of SIC; the creation of Shetland Oceans Alliance (SHOAL), a partnership between SIC and the shing industry which serves as a think tank and lobby group for the shing industry; the drafting of The Whitesh Plan Developing a Long Term Sustainable Fishery for Shetland (2003) by SHOAL; and several schemes offering nancial assistance to the local shing and shellsh 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). Shellsh Growers Loan Assistance Scheme (development of the shellsh sector). Shellsh Vessel Improvement Scheme (development of inshore eet).
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References
See Chapter 2, paras. 2.12-2.13, relative stability and The Hague Preferences are explained. Scottish Fishermens Federation and National Federation of Fishermens Organisations, Zonal Management: A New Vision for Europes Fisheries, Aberdeen and Grimsby, 2000. 80 Written consultation to the Advisory Committee of Fisheries and Aquaculture on the establishment of Regional Advisory Councils. Brussels, 23 July 2003. 81 Scottish Fishermens Federation, An Alternative Cod Recovery Plan: The Spatial Management Approach. Aberdeen: 2003. 82 MRAG, Review of the Commission proposal (COM (2003) 237 nal) for a Council Regulation establishing measures for the recovery of cod stocks. A report for WWF. London: 2003). 83 Calculated on the basis of (length in metres x breadth in metres) + (engine power in kW x 0.45). 84 Hatcher, A. and Read, A., Fishing rights and structural changes in the UK shing industry, pp 1-14 In Shotton, R. (ed). Case Studies on the Effects of Transferable Fishing Rights on Fleet Capacity and Concentration of Quota Ownership. FAO Fisheries Technical Paper 412. Rome: FAO, 2001. 85 The issues that affect the UKs use of EU Structural Funds are explained in Chapter 2. 86 Report of a Group of Independent Experts to Advise the European Commission on the Fourth Generation of Multi-annual Guidance Programmes (The Lasson Report), 1996. Brussels: European Commission. 87 Runolfsson, B. and Arnason, R. (2001). The effects of introducing transferable property rights on eet capacity and ownership of harvesting rights in Icelandic sheries pp 28-43 In Shotton, R. op cit. 88 Pascoe, S., Tingley, D. and Mardle, S. (2002). Appraisal of Alternative Policy Instruments to Regulate Fishing Capacity. Final Report. Portsmouth. CEMARE. 89 Symes, D. and Ridgway, S. Inshore Fisheries Regulation and Management in Scotland: Meeting the Challenge of Environmental Integration, University of Hull, 2003.
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8 A Sustainable Future for the Industry

8.1 A successful shing industry has to be protable. It must also be sustainable if it is to provide a livelihood for future generations. Scotlands shing dependent communities contain a wealth of knowledge and experience which will be invaluable to rebuilding condence in the future of the industry. 8.2 The pelagic and shellsh sectors are currently protable (as is the processing industry), but the whitesh sector is not. Despite successive rounds of decommissioning, parts of it are threatened with bankruptcy. Successive cuts in TAC and quota have been the immediate cause but these cuts were not made without reason. The evidence points clearly to declining trends in most demersal species and a critical situation in the case of cod. This cannot continue if the whitesh sector is to have a sustainable future. 8.3 The fundamental problem is that the level of shing mortality for the past two decades has been too high for the whitesh sector to be sustainable (it is over twice as high as that in the protable pelagic sector). If appropriate steps had been taken earlier to conserve the cod stock so that shing mortality had remained at 1960s levels, current annual landings of cod from the North Sea as a whole might be of the order of 250,000 tonnes. 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 stock assessments and their use in setting TACs (see Chapter 4). Although there are some defects in the scientic methods used, the conclusion is unavoidable that most whitesh stocks have been over-shed. Even haddock, where stocks are at present relatively abundant, owes this to the single 1999 year-class recruitment in subsequent years being poor. It is therefore important to conserve this stock. We conclude that shing effort has been too high for much of the last twenty years. 8.5 European shery scientists are not without some responsibility for the present situation. In 1997, after the best year for cod recruitment for ten years, ICES raised the TAC and the stock was shed out in record time. A more conservative policy on shing effort would have meant that the recent draconian reductions in TAC and quota would have been unnecessary. But the industry cannot escape blame either. Fishing has been excessive and no reliable estimate of illegal landings is available, but informal estimates given to us in the course of our Inquiry indicate that they have been quite substantial. No policy to conserve sh stocks will work if it is so comprehensively disregarded. 8.6 We conclude that there is a reasonable prospect of recovery in cod stocks and those of other demersal species. However, successful recovery will require a policy that is both stable and adhered to by the industry. It will also require severe restraint, and for a period which cannot be predicted with certainty. Since this industry is important to Scotland it is essential to secure its future despite the pain that restraint is already causing. The economic and social consequences facing Scotlands shing dependent communities are potentially serious. 8.7 Protability and sustainability require a eet that is both modern and matched to the available resource (conditions already fullled 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 vessels decommissioned in the last two rounds were among the most modern. The demersal eet must not only be of the right size, but also modern and efcient if it is to be protable and competitive. It will be for the industry to discuss with Ministers the further steps that are needed. Funds should be made available if any further reduction in the eet on a voluntary basis proves necessary. 8.8 Even if there were no crisis in the demersal sector, technological progress would in due course gradually reduce the size of the eet that the resource can sustain. The pelagic sector illustrates this clearly. The eet fell from 54 to 27 vessels over the last decade, but without any reduction in catching power. Reductions in eet size inevitably reduce employment opportunities indeed, employment in the sh catching industry has fallen by 40 per cent in the last ten years. The situation resembles that in agriculture, where the numbers employed have been in continuous decline over many decades.
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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 difcult to get agreement on important issues, and decision-making can be very slow. The cod recovery programme exemplies this. Although rst proposed in 2001, some key elements have still to be agreed and others are only now being implemented. 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 EUs continued exclusive competence in this eld is either necessary or appropriate. 8.10 Another defect in the CFP is that it takes little account of the social and economic consequences of its decisions. Its action plan for this90 provides little insight into how such issues might be tackled, although it draws attention to some of the deciencies in information and understanding. The CFP also takes little account of advice from the industry. The events following the latest Fisheries Council illustrate this, when the Scottish industry claimed that the increased haddock quota could not be caught with the area and effort restrictions that were also imposed. Such advice might also go some way to making the deliberations of the Council less prone to political pressures. 8.11 TACs and catch quotas have proved unsatisfactory as regulatory methods for the demersal sector. Discards are inevitable where catch quotas are allocated for individual species in a mixed shery, and although legal, they are unacceptable especially when a resource is becoming scarce and in need of conservation. The situation becomes exacerbated when quotas are reduced in response to declining stocks, and the consequently depressed protability 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 a good share of those on the west coast. Other countries discard and probably land illegally, but there is no evidence that they transgress any more than our own shermen. The problem is not Europe, or other member states, but a depleted sh stock. The industry will have to come to terms with this, no matter from where its sheries policy is managed.
What Needs to be Done Now?

8.13 Decision-making must be decentralised so that it is more exible, rapid, and takes better account of local circumstances both in the industry and in stocks. We therefore recommend that: (1) the Regional Advisory Councils must be made effective and, as they gain experience and prove their value, progress towards an overtly management role; and (2) inshore waters, which within the 12 mile limit are the responsibility of the member state, 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 best approach 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 and the eet should land whatever it catches in the time permitted, thus removing the incentive to land illegally. All this would have the added benet of making the science of stock assessment, which depends heavily on the accuracy 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 with Ministers. The present gulf in understanding between scientists and the industry must be bridged, and the industry should be more directly involved in stock assessment exercises. Also, we suggest that the FRS in Aberdeen and the SFPA be responsible to Boards on which the industry would be represented. The Minister might also consider chairing a Fisheries Forum, the aim of which would be to bring the various parties together to discuss issues of common concern. 8.16 The shellsh sector, although protable, requires some investment in modernisation since many of its vessels are old. There is also concern that the diversion of vessels from the demersal sector might undermine the current 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 shellsh, in order to achieve the highest possible value from the resource.
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8.18 We favour separate allocation of shing rights for vessels of less than 10 metres, such rights not to be tradable to other eet segments. We would also like to see access limited by size (VCUs) in the inshore zone up to 6 nautical miles. 8.19 Although there is no immediate crisis, the effect of modernisation and continuing technical progress will affect employment in the shellsh sector, which is the mainstay of the shing industry in the Western Isles. It is also important in both Shetland and Orkney and in the many communities on the west coast of Scotland, as well as in Fife and Berwickshire.
Remedial Measures within Scotland

8.20 The industry must have constructive discussions with Ministers to agree the size of the demersal eet and the longer-term strategy needed for it to return to protability and sustainability. There must be recognition on both sides that this will inevitably lead to further loss of employment, and that there must be concerted efforts to minimise the damage this may cause to shing dependent communities (FDCs). There is a risk that lack of condence in the future viability of the harvesting sector may precipitate even stronger outows of young well-qualied people, stimulating the familiar cycle of rural deprivation as falling populations are unable to sustain essential local services. 8.21 This is not to argue for protection of the remoter FDCs at the expense of more urban shing centres like Fraserburgh and Peterhead, but for action which will allow areas like Shetland, Orkney, the Western Isles and part of the Highland region to retain sufcient shing opportunities to provide the basis for viable and sustainable coastal communities. The harbours of Caithness and Sutherland will also be affected, where the impact on jobs will be signicant 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 resettlement grants. The EUs FIFG fund makes provision for early retirement schemes and for grants of up to 10,000 euros for those leaving the industry. This has not been used by the UK but could be of value for this purpose. If the UK has already committed its allocation of FIFG money in the present period that extends up to 2006, the funds should be 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 the European Social Fund (ESF) should be used to nance retraining and the European Regional Development Fund (ERDF) should be used to assist the funding of new businesses. Scottish Enterprise Grampian, Highlands and Islands Enterprise and Shetland Enterprise should give the highest priority to the areas affected by the problems in the demersal sector. Elsewhere, the Western Isles and many of the sheries dependent communities on the west coast are also eligible for assistance from the Structural Funds. 8.24 In view of the likely decline in employment as the shellsh sector modernises, there should be a properly developed plan of adaptation in these areas. As with Shetland, many of these communities, particularly the Western Isles, are fragile economically but make a distinctive contribution to Scotland. Building a sustainable future for such areas is a collective responsibility. The industry, local authorities and community associations should all work together. 8.25 The potential of community-based investment in shing entitlements (including the purchase of additional quotas) by local authorities and/or Producer Organisations should be fully explored to promote the sustainability of FDCs. 8.26 The problems with the shing industry are closely connected with how it is nanced. The reliance on debt nancing is particularly unsuitable for an industry where stocks of the resource are volatile. Whenever there is a downturn, the parts of the industry most affected are threatened with insolvency. If decommissioning money is found, it allows the banks to avoid the losses they would otherwise incur on their loans, but leaves the shermen with very little. 8.27 We therefore recommend that Ministers should discuss with the banks the possibility of a debt moratorium as a way of handling the immediate crisis. Not only would this give much needed relief, but it would also be in the banks interest and might well cost the Government less in the long run than a series of bankruptcies.
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8.28 For the future, Ministers should consider establishing a Fishing Industry Finance Corporation, empowered to raise equity as a way of providing more exible nance for the industry. Ministers, together with representatives of the industry, should consider the ownership structure in this industry. The system of shared ownership 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 very expensive. It is important that the Scottish industry, even if it has to reduce in size, should be modern and efcient. 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 a basis that is sustainable. Never again must key stocks be allowed to be depleted in the way that has happened in the demersal sector, where shing effort has had to be cut back far below the levels that might otherwise have been sustained. As with agriculture, husbandry is as important as harvesting. If the right policies can now be adopted within the CFP and by Government within the UK and Scotland, the shing industry should continue to make an important contribution to the Scottish economy and the lives of its shing dependent communities.
References
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Communication from the Commission to the European Parliament and the Council: Action plan to counter the social, regional and economic consequences of restructuring the EU shing industry. COM(2002) 600 nal. Commission of the European Communities: Brussels
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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 Scientic Ofcer, 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
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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 Fishermens 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 Fishermens 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 Grifths, 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 Ofcer 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 Fishermens 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 Ofcer 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 Ofcer Scottish Enterprise, Mr David Wilson, Knowledge Management Scottish Fishermens Federation, Dr Ian Duncan Scottish Fishermens 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
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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 Finsh Association, Mr Richard Slaski, Executive Director The Fishermens 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 Ofcer 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 Scientic 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 Fishermens 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
90
Fishermens Mutual Association (Pittenweem) Ltd, Mr William Hughes, President Highland and Islands Fishermens 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 Grifth, 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 Fishermens 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 Fishermens Federation, Mr Hamish Morrison, Chief Executive Scottish Fishermens Organisation Limited, Mr Iain MacSween, Chief Executive Scottish Fishing Service Association, Mr Alfred Cheyne Scottish Netmakers Association, Mr William Hepburn Scottish Pelagic Fishermens 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 Fishermens Association Mr Hansen Black Mr Josie Simpson
91
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 Fishermens Co-operative Ltd, Mr Alex John Murray The 10 Meter and Under Association, Mr David Tod, Chairman The British Marine Finsh Association, Mr Richard Slaski, Executive Director The Fishermens 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 Ofcer 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 Fishermens 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 Ofcer Youngs 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 sh processor
92
Visits undertaken
12 June Highlands and Islands Enterprise seminar on "Fisheries-dependent communities what future?", Inverness Sea Fish Industry Authority, Edinburgh Committee Meeting at Aberdeenshire Area Ofce, Peterhead Visit to Peterhead Fish Market and Fraserburgh harbour and International Fish Canners (Scotland) Limited, Scosh Limited Processors (Pelagic) (Fraserburgh) and Scottish Fishermens Organisation (Fraserburgh) The Shetland Seafood Centre and the North Atlantic Fisheries College, Shetland, as well as the Island of Whalsay North Atlantic Conference, Shetland Committee meeting at Highland Council Ofce, Inverness. Moray Firth Partnership and Association of Salmon Fishery Boards seminar on Salmon Fisheries in the Moray Firth, Inverness. 9 October 10 October 13 October Lochinver harbour International Council for the Exploration of the Sea, Copenhagen Fishermen's Mutual Association (Pittenweem) Ltd, Pittenweem and Pittenweem Fish Market Foundation for Science and Technology workshop on Scotland and the Common Fisheries Policy, Edinburgh Committee Meeting at Scottish Enterprise Grampian, Aberdeen Fisheries Research Services Marine Laboratory, Aberdeen United Fishing Industry Alliance conference, Edinburgh Western Isles Council, Stornoway European Commission Fisheries Directorate and European Parliament Fisheries Committee, Brussels
4 August 11 August 12 August
29/30 September/ 1 October 1/2 October 8 October
23 October
3 November 4 November 5 November 21 November 10 December
93
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 diversication of sheries dependent areas. (para. 2.31) 3. Ministers should reconsider their position over the EUs 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 sheries, as it does to other matters. (para. 2.44)
Economic and Social Impact

We recommend that: 4. Ministers and the nancial institutions should seek to negotiate an arrangement for debt rescheduling and restructuring under which the demersal eet is granted a debt service moratorium for an agreed period. (para. 3.69) 5. Ministers and the nancial institutions should examine the case for establishing a Fishing Industry Finance Corporation. (para. 3.69) 6. The Scottish Executive and the Scottish shing industry should jointly examine the industrys 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 shermen 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 sheries 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 sheries, particularly methods in which uncertainty (and hence business risk) can be quantied. (para. 4.24) 11. FRS should begin to develop methods for the use of commercial vessels to aid shery 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, shing 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 shing 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)
94
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 xed until Bpa (the safe minimum spawning stock biomass) of 150,000t is attained. (para. 4.82) 16. The by-catch of cod in other sheries should be minimised by ensuring the use of species selective shing 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 shery 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 sh. 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 sheries. (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. Monksh 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 shermen adopt selective gears that do not capture whitesh. Management should be vigilant against diversion of effort from the whitesh sector into Nephrops. (para. 4.101) 22. The EU Commission should ensure the industrial shery 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 shery. (para. 4.117) 24. The Commission should recognise the vulnerability of deep-sea species and seek to regulate this shery 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 shing 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 sheries 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 sh oil in farmed sh diets with plant oil as a means of promoting sustainability of industrial sheries. (para. 6.29) 29. Scottish Ministers should consider how research with new species such as cod can be supported to enable the diversication of Scottish aquaculture production. (para. 6.29)
95
Managing Scotlands 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 shing industry should seize the opportunities presented by RACs to demonstrate a responsible role in sheries management. (para. 7.18) 31. The UK sheries departments, in collaboration with the shing industries, should undertake a wide ranging review of the existing system of quota management having regard to the states responsibilities for the conservation and management of the sheries, on the one hand, and the nancial 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 sheries 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 sheries and the environment. (para. 7.70) 35. Scottish Ministers should seek to bridge the gulf between shermen and scientists and should also consider our alternative proposals for restructuring the institutional arrangements for sheries management as set out in Chapter 7. (para. 7.88)
96
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 sheries derived their wealth. The purpose of this appendix is to analyse the top ve demersal species, cod, haddock, whiting, monksh 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 whitesh 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, monksh = 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 dened 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 shing 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 shery 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, atsh 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 sheries of 560t per annum. The North Sea provides 90% of Scottish demersal sh 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 34% 49% 3% Haddock 74% 54% 4% Whiting 50% 65% 2% Monksh 72% 44% 0% *Nephrops 100% 100% 0%
North Sea West of Scotland Irish Sea
*Only Nephrops grounds shed by Scottish boats are included in this analysis. Transforming these gures 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 eet (Figure 10).
97
Long Term Average Annual Landings
Figure 1: Area VIa West Coast
Figure 2: Area IV North Sea 290,000t
35,000t 20% Cod Nephrops 32%
Monkfish 4% Whiting 5%
3% Nephrops 23% Cod
25% Haddock Monkfish 7% 16% Whiting Haddock 65%
Figure 3: Area VIIa Irish Sea Irish Sea 560t
Figure 4: Scottish Landings by Area
West Coast 11% Whiting 37% 45% Cod
0% Irish Sea
18% Haddock
89% North Sea
Figure 5: Long Term Average Scottish Landings 325,000t
Monkfish 4% Whiting 6%
6% Nephrops 22% Cod
Haddock 62%
98
Long Term Average Value
Figure 6: Value of West Coast Landings
Figure 7: Value of North Sea Landings
17% Cod
Nephrops 6% Monkfish 9% Whiting 3% 29% Cod
14% Haddock Nephrops 52% 7% Whiting 10% Monkfish 53% Haddock
Figure 8: Value of Irish Sea Landings
Figure 9: Value of Scottish Landings
Whiting 24%
0% Irish Sea West Coast 15%
Haddock 15%
61% Cod 85% North Sea
Figure 10: Average Value of Total Scottish Demersal Landings
Nephrops 13% 27% Cod Monkfish 10% Whiting 4%
46% Haddock
99
2001-2002
The balance between different sheries 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 gures 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 sheries (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). Monksh has overtaken cod in the species rankings. Analysis 2001/2001 Figure 11: West Coast Landings (24,000t) 6% Cod 5% Haddock 7% Whiting 6% Monkfish Whiting 13% Figure 12: North Sea Landings (83,000t) Nephrops 9% 19% Cod Monkfish 12%
Nephrops 76%
47% Haddock
Figure 13: 2002 Irish Sea Landing (143t) Whiting 17% 22% Cod
Figure 14: 2001/2 Scottish Demersal Landings (110,000t) 0% Irish Sea West Coast 22%
Haddock 61%
78% North Sea
Figure 15: Total Scottish Demersal Landings (110,000t)
16% Cod Nephrops 24%
Monkfish 11% 38% Haddock Whiting 11%
100
Figure 16: 2001/2 Value of West Coast Landings 4% Cod 2% Haddock 2% Whiting 7% Monkfish
Figure 17: 2001/2 Value of North Sea Landings
Nephrops 18%
20% Cod
Monkfish 23% 32% Haddock Whiting 7%
Nephrops 85%
Figure 18: 2001/2 Value of Irish Sea Landings Whiting 12%
Figure 19: 2001/2 Scottish Demersal Value
0% Irish Sea 33% Cod West Coast 34%
66% North Sea Haddock 55%
Figure 20: 2001/2 Scottish Landings by Value
15% Cod
Nephrops 41% 22% Haddock
5% Whiting Monkfish 17%
101
Appendix 5:
FRS Sampling between 1997 and 2003
102
Appendix 6:
FRS Sampling Results for cod, haddock and whiting between 1997 and 2003
Cod (Total number of sh caught of all year-classes aged 1 and older)
1997 1998 1999 2000
2001
2002
2003 Log Scale/Linear Scale

8 6 4 3 1 2981 2236 1492 747 3
103
Haddock (Total number of sh caught of all year-classes aged 1 and older)

1997 1998 1999 2000
2001
2002

14 11 8 4 1 1513598 1135199 796800 378401 3
104
Whiting (Total number of sh caught of all year-classes aged 1 and older)

1997 1998 1999 2000
2001
2002

14 11 8 5 2 806130 604600 403069 201539 9
105
Appendix 7:
ICES International Bottom Trawl Survey (IBTS) Sampling Area and sampling points between 1997 and 2000
Sampling by IBTS between 1997 and 2000
106
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
1998 Age=0
1998 Age=1
1998 Age=2
1998 Age=3
1998 Age=4
1998 Age=5
1999 Age=0
1999 Age=1
1999 Age=2
1999 Age=3
1999 Age=4
1999 Age=5
2000 Age=0
2000 Age=1
2000 Age=2
2000 Age=3
2000 Age=4
2000 Age=5
9.0 2.5 4.0
8103 4052 0
107
Total numbers of haddock caught at age, by year
1997 Age=0
1997 Age=1
1997 Age=2
1997 Age=3
1997 Age=4
1997 Age=5
1998 Age=0
1998 Age=1
1998 Age=2
1998 Age=3
1998 Age=4
1998 Age=5
1999 Age=0
1999 Age=1
1999 Age=2
1999 Age=3
1999 Age=4
1999 Age=5
2000 Age=0
2000 Age=1
2000 Age=2
2000 Age=3
2000 Age=4
2000 Age=5
11.0 3.5 4.0
59674 29937 0
108
Total numbers of whiting caught at age, by year
1997 Age=0
1997 Age=1
1997 Age=2
1997 Age=3
1997 Age=4
1997 Age=5
1998 Age=0
1998 Age=1
1998 Age=2
1998 Age=3
1998 Age=4
1998 Age=5
1999 Age=0
1999 Age=1
1999 Age=2
1999 Age=3
1999 Age=4
1999 Age=5
2000 Age=0
2000 Age=1
2000 Age=2
2000 Age=3
2000 Age=4
2000 Age=5
12 4 4
162755 81378 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 5000 Email: evidenceadvice@royalsoced.org.uk www.royalsoced.org.uk ISBN: 0 902198 09 2 2004 The Royal Society of Edinburgh

The Future of The Scottish Fishing Industry

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Inquiry into The Future of the Scottish Fishing Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

Common Fisheries Policy (CFP)

RSE Inquiry into The Future of the Scottish Fishing Industry

Economic and Social Impact

RSE Inquiry into The Future of the Scottish Fishing Industry

The Science of Stock Assessment and its Role in Fisheries Management

RSE Inquiry into The Future of the Scottish Fishing Industry

Review of ICES scientic advice on major sh stocks

The EC Cod Recovery programme

RSE Inquiry into The Future of the Scottish Fishing Industry

North Sea Haddock

Pelagic sheries (herring and mackerel)

RSE Inquiry into The Future of the Scottish Fishing Industry

The Structure of Fisheries Science

Fisheries and the Environment

RSE Inquiry into The Future of the Scottish Fishing Industry

The Role of Aquaculture

production. (para. 6.29).

Management of Scotlands Fisheries for Sustainable Development

RSE Inquiry into The Future of the Scottish Fishing Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

Building a Sustainable Future

RSE Inquiry into The Future of the Scottish Fishing Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

2 The Origins of the Common Fisheries Policy

3 Economic, Industrial and Social Impacts

RSE Inquiry into The Future of the Scottish Fishing Industry

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

5 Fisheries and the Environment

6 The Role of Aquaculture

RSE Inquiry into The Future of the Scottish Fishing Industry

7 Managing Scotlands Fisheries for Sustainable Development

8 A Sustainable Future for the Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

The Role of Scientists in Fisheries Management

The Marine Environment

RSE Inquiry into The Future of the Scottish Fishing Industry

Structure of the Report

RSE Inquiry into The Future of the Scottish Fishing Industry

2 The Origins of the Common Fisheries Policy

Six and Twelve Mile Limits

RSE Inquiry into The Future of the Scottish Fishing Industry

Relative Stability: TACs and Quotas

RSE Inquiry into The Future of the Scottish Fishing Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

EU Grants for the Fishing Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

Withdrawal from the CFP?

RSE Inquiry into The Future of the Scottish Fishing Industry

Is EU Exclusive Competence Necessary?

RSE Inquiry into The Future of the Scottish Fishing Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

3 The Economic, Industrial and Social Impacts

The Fish Catching Industry

RSE Inquiry into The Future of the Scottish Fishing Industry

Percentage of Employment in Fisheries Sector

RSE Inquiry into The Future of the Scottish Fishing Industry