Select Committee on Agriculture Minutes of Evidence


Memorandum submitted by Aberdeen Fish Producers' Organisation Limited (J52)

1.  BACKGROUND

  The Aberdeen Fish Producers' Organisation Limited was the first in Scotland to be recognised on 18 July 1974 (the third in the UK) whose Members are owners of fishing vessels, either as individuals, partnerships or companies.

  The two most important functions carried out are marketing and managing fish quotas. In terms of the former the PO is responsible for grading its Members' fish according to EU standards and carrying out check weighing. There is also a responsibility to ensure that supply and demand are in balance and to administer the EU Official Withdrawal Prices Scheme.

  Under this arrangement the PO is given an annual option of adopting OWPs for each grade of species established by the EU and has to ensure that fish is not sold for human consumption at less than these prices. When it is left unsold it is removed to the Fish Meal Factory and converted into animal feed. In these circumstances the PO pays compensation to the owners of the vessel and reclaims part thereof from the Intervention Board.

  As far as the latter is concerned, the PO is given an annual option by the Scottish Office to accept a share of the UK quotas and to manage them ourselves on the basis that our Members will be prevented from catching any more of a particular species if we reach our allocation for it before the end of the calendar year. We have always exercised that option on the basis that it gives us more control over our own quotas.

  There are 56 member vessels ranging from 40 ft to 110 ft and the PO's total landings of the main species in 1998 were as follows:


Fishing Areas
North SeaWest Coast
SpeciesTonnes
Cod6,977 761
Haddock10,8763,983
Whiting2,968364
Saithe1,022 686


  The total landings by PO Members during the year were about 30,000 tonnes and Haddock catches constituted just under 50 per cent thereof.

2.  PRESENT POSITION

  The share of the UK TAC which the PO receives under the sectoral allocation arrangements is determined by taking into account the track records of its member vessels. Each vessel's track record is its actual catch and until 1998 was based on a rolling principle based on the most recent three years' catches. In 1998 the catches for 1994, 1995 and 1996 were used as the industry moved to a fixed quota allocation system from 1 January 1999 whereby no account is taken of recent catches but only those in 1994-96.

  The track record is used to establish each vessel's share of the UK catch during the same three year period and the resultant percentage is then applied to each year's TAC. Each PO member vessel's share is added to produce the PO's sectoral allocation and under this system the PO's share of UK TACs in 1998 for the main species were as follows:


Fishing Areas
SpeciesNorth Sea West Coast
Cod11%16%
Haddock18%17%
Whiting13%10%
Saithe13%20%


  Until 1994 the track record was attached to the vessel so that if a vessel was sold the track record accompanied it. From 1995, however, the track record became attached to the licence and this led to the practice of vessels being sold with the licence being retained by the seller for track record purposes.

  The foregoing change, plus the move to an FQA system, has had the effect of focusing attention on the permanent track record and has led to an increase in the trade of licences and quota entitlement. There is an ever increasing practice whereby owners of vessels buy additional licences and/or quota entitlement for their own use.

  The Aberdeen PO operates a system of quota management whereby all track records (except those purchased privately) are grouped in a common pool and the Board issues monthly, or two monthly, quotas taking account of the uptake of catches against our allocation and bearing in mind the need to match supply with demand.

  Those Members with additonal entitlement, however, receive the PO quota and are allowed to catch their own purchased fish when they want. This in turn has led to the recent suggestion that those Members who wish to do so should be granted their own individual track record entitlement to catch as and when they wish during the year.

3.  RESPONSE TO SELECT COMMITTEE'S TERMS OF REFERENCE

  Successive Governments have allowed this trade in licences and quotas to develop and, in fact, it has been actively encouraged by the last decommissioning scheme when those doing so were allowed to retain and sell their track records. In effect this conveyed property rights but yet Governments have consistently said that owners have no legal entitlement to their quotas. The majority of Fishermen probably wish that trading in licences and quotas had never started but having done so they had to follow suit to protect their own interests. It is now a recognised and accepted practice which cannot be stopped because of the amount of money which has changed hands.

  In these circumstances there is a case for granting legal entitlement but great care has to be taken otherwise it will allow speculators and non-fishing interests to gain control over the Industry. It is vitally important that this is not done until careful consideration is given to the future of the Industry and to the important significance it has to various communities in the UK, particularly in the North East of Scotland. If care is not taken the financial wellbeing of whole communities could be endangered. It is, therefore, necessary to make arrangements to ensure that the Industry remains within the control of those taking the risks of going to sea.

  A non-interventionist approach to the Fishing Industry will not work as it is so closely controlled in many aspects, ie with it being determined by the EU annually just how much fish of each species can be caught from the different fishing areas.

  In many instances the value of the licence/quota entitlement now exceeds the value of the fishing vessel and in these circumstances there must be concern about the future of young Fishermen who previously would have worked their way up in the Industry. It is now much more difficult for them to find the necessary finance to obtain quota entitlement. If this continues the Industry will become controlled by smaller groups or those with access to funds. These might not be Fishermen, or Fishing Industry interests or even UK citizens. The effect on the Fishing Industry, and in particular on coastal communities, in the future could be devastating.

  The present practice can also lead to a situation where those with quota entitlement can lease out their track records and make more money than those who actually go to sea. This surely cannot be regarded as providing the right circumstances for the future of the Industry.

  Most of our Members are also in membership of the constituent bodies of the Scottish Fishermen's Federation and since its inception it has always been the policy of this PO to leave all political matters affecting our Members to be dealt with by that body. In accordance with that policy we have confined our response to that part of the terms of reference which deal with the trade in buying and selling of fishing licences and quota.

6 April 1999


 
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