Examination of Witnesses (Questions 765
THURSDAY 20 MAY 1999
765. Gentlemen, welcome to the last evidence
session of this public session of the Agriculture Committee's
visit to Scotland for its current inquiry into sea fishing. We
are very grateful to you for coming. We are under quite a tight
deadline to get back to the airport, we will try and keep the
questioning brief and succinct and hopefully you will have a chance
to say all you want to say. Mr Gordon, thank you for your memorandum
of evidence already submitted to the Committee, we are grateful
for that. Mr Gilland, thank you for the memorandum of evidence
you have given to our specialist adviser which we will circulate
to the Committee in due course. Thank you for that. There is no
obligation for written evidence, Mr MacSween, so do not feel left
(Mr MacSween) I do not feel in the slightest
Chairman: We have already heard evidence
from the Federation in London so we understand the restricted
nature of the subjects you want to address to us this afternoon
because, as you say, you leave lobbying issues to the Federation.
With that in mind I will invite Mr Curry to begin the questioning.
Mr Curry: Why do you need three POs on
766. You can answer as you see fit. You can
choose which of you answers.
(Mr MacSween) I am tempted to say that
we do not but I do not know what the other two might say about
it. I suspect it is largely for geographic and historic reasons.
I represent the Scottish Fishermen's Organisation which geographically
covers the economic area from Portpatrick, down in the South West
of Scotland, right round to Peterhead, including the islands to
the North and West. I do not propose to speak for either of the
other two but I think Hamish's organisation in Aberdeen grew largely
out of the trawler company structure that existed in Aberdeen
in the early 1970s and Mr Gilland's organisation grew out of some
dissent within the Scottish Fishermen's Organisation to be strictly
accurate about it.
767. Do you think that as the industry evolves
and it changes that your structures and the way they are organised
are likely to change as well?
(Mr MacSween) I think it is possible.
It is interesting that the recent proposal from the European Commission
on the common organisation of the market explicitly recognises
that one of the problems facing the catching sector is the growing
strength of the retail sector. There is a lesson from other food
sectors that the fishing industry has to learn because if we are
to be able to offset the monopolistic benefits that large supermarket
chains have then a system of small disparate POs is not the best
way of going about it. Having said that, in terms of the UK the
three organisations represented here are not particularly small.
My own view is that it is a nonsense to have 14 producer organisations
within the UK, some with as few as 20-odd members, they can achieve
(Mr Gordon) As Ian rightly says, in the beginning
our PO was formed from companies in Aberdeen owning trawler vessels.
I think the SFO was the other PO in Scotland. POs are voluntary
organisations and fishermen themselves decided that they wanted
to form other bodies; a bit of early devolution you might say.
It is also worth notingI have got some percentagesbetween
the three POs we are responsible for some 50 per cent of the North
Sea's cod TACs for the UK, 74 per cent of the haddock and on the
West Coast 80 per cent of the haddock and 70 per cent of the cod.
All three POs are responsible for a large proportion of the UK
768. Let me just move on if I may, because the
POs seem to me to have a particularly important role as we move
more and more into the area of the ownership of quotas. I am quoting
now one of the Scottish fishermen's leaders who said that the
takeover by individual transferable quotas was inevitable. He
did not say he liked it or he approved of it, he just said "this
is the way the market is going, it is going to happen". First
of all, do you agree with that? I am not asking whether you like
it, I am just asking whether you think that inevitably this trend
is one that is going to keep on. The pros and cons we can go into
later, I just want to know whether factually you think this is
going to become much more dominant?
(Mr Gilland) Personally my own view is
that the move to FQAs significantly increases the likelihood of
769. Sorry, FQAs?
(Mr Gilland) Fixed quota allocations.
The reason I say that is as the increase in the purchase of track
record by individuals has spread in my opinion there has been
a different attitude taken to the likelihood of ITQs, that there
would probably be less opposition now than there was a couple
of years ago. Having said that, there are still many in the industry
who would be of the view that they would not like to see the introduction
of ITQs in the foreseeable future.
770. Mr MacSween?
(Mr MacSween) No, I do not believe that
we are inevitably going to end up with individual transferable
quotas of one description or another. I think what we have seen
is something of a move away from a system where the fish resources
were commonly owned or there was no ownership at all. If I can
just digress, it seems to me there are a large number of problems
to be resolved before one can even begin talking about ITQs and,
of course, one is who actually holds the property right of the
fish stock at the present time. I suspect there are those in the
UK Government who actually believe that the UK Government holds
the property right. Equally I know there are those in Brussels
who would say that this is, in fact, a European resource so the
UK Government has no jurisdiction over creating property rights.
Until that problem is resolved I think it will be very difficult
to do anything. However, if one looks at what has actually happened
in the Scottish industry in the past 20 years it does speak very
strongly against the introduction of ITQs. It seems to me that
the way the Scottish industry has been able to survive and has
been able to flourish has been by being able to diversify. One
of the inevitable consequences of ITQs is that it stops diversification
because effectively it says "you shall catch whatever is
permitted by your historic performance". If that was introduced
tomorrow you could tie up half the Scottish fleet because they
are actually catching species now for which they have no historic
performance. I heard evidence earlier on about the switch to twin-rigging
by a majority of the Scottish fleet, the catchpole position of
the average Scottish vessel today bears very little resemblance
to what it was five years ago, so if you try and devise an ITQ
system based on an historic catch pattern you would just throw
the whole industry into total chaos.
771. For a minute I want to maintain an hypothesis
that ITQs are going to play an important role, I put it no more
strongly than that. Do you think that producer organisations are
bodies that can reconcile to some degree, because of the way they
manage their members, the ownership of fishing rights with the
management of the dangers of the migration of the rights and eventually
the jobs? When you talk to many fishermen their fear is that if
something becomes marketable then it is bought up by people, either
big fish inside or it is bought up by big fish outside, and eventually
it migrates. One of the ways in which perhaps that can be controlled
or managed is if the PO itself becomes proactive in this purchase
of quota and management and distribution of that purchased quota.
Do you think there is a way of reconciling a way of life with
the advent of more market forces by exploiting the PO mechanisms?
(Mr MacSween) It seems to me you are
actually getting back to the system which we started off with
if what you are suggesting is that the POs should buy all of the
individual transferable quota rights and hold them as a group
right in effect. That was actually where we started off when the
whole system of sector quota management was introduced to bring
a degree of flexibility to fisheries management and groups were
allocated quantities of fish based on their historic fishing patterns.
If you now move from that to a system and say "within the
PO structure we will confer property rights on each and every
individual but the ideal solution is for the group to acquire
all those property rights", it seems to me we are just going
back to where we came from. There are two real dangers in the
confirmation of property rights. It is something we have seen
very clearly, particularly in the pelagic sector, that very considerable
quantities of what were once UK quotas have been bought particularly
by the Dutch. Virtually every pelagic licence that has come up
for sale in the past year and a half has ended up in the ownership
of the Netherlands freezer trawler fleet and their reputation
is somewhat less than savoury. I think the other problem is that
the smaller coastal communities, particularly those on the West
Coast, would find their fishing rights being purchased by places
like Peterhead. It seems to me, without being overly dramatic
about it, that the confirmation of property rights in the fishing
industry will do for coastal communities what highland clearances
did for the agricultural sector.
Chairman: That is without being dramatic.
Mr Curry: I am trying to provoke you.
Chairman: I think you are succeeding.
772. Could you argue that one fishery is a common
resource but there is no individual who has an overwhelming incentive
to think in conservation terms, whereas if you have a private
property right and you have to invest in that and that was a financial
investment, it costs money, it introduces a lot of monetarisation
into the industry, then in a sense you would become more conservation
minded because you have got to get a return on the capital you
have invested in that? It is almost like what the people who have
just given evidence said. You may have been in the room, I do
not know if you listened to what they said, but one of the gentlemen,
in fact it was Mr Danny Couper, said there has been a change in
the mentality or psychology or perception and he said fishermen
have gone from being hunters to being harvesters. Would you like
to comment on that?
(Mr MacSween) I seem to be speaking rather
too much. I do not think there is any great body of evidence either
in the fishery sectors or other sectors that would lead one to
inevitably conclude that the confirmation of property rights leads
one to act in a more conservation minded way. I can think of many
examples in the mining industry where people with property rights
absolutely strip mined huge areas of various countries. The creation
of dust bowls in the American Prairies was achieved despite property
rights. I simply do not believe that because you say "you
have a right to the fish" that you will somehow look after
them more carefully.
773. That is contrary to the New Zealand experience,
is it not?
(Mr MacSween) In the case of New Zealand,
which is held up as the case for the introduction of ITQs, you
are starting with no fishing industry, a very small historic industry,
you are starting from a state of virgin fish stocks and they are
almost without exception single species fisheries. None of these
things would be the case in our situation.
774. Okay. The Iceland experience?
(Mr MacSween) The Iceland experience
is an interesting one where again you are talking very largely
about a cod fishery where there is now, interestingly, a great
deal of internal unrest with those who own the property rights
who are sitting in Florida and leasing them out to other people
to go and catch. In addition to the simple economics, it really
depends on the social dimension that you want the fishing industry
to have. Do you want to maintain fishing communities? Norway,
for example, which is the largest fishing community in Europe,
would have the heebie-jeebies if you even suggested ITQs because
they want to maintain viable coastal communities in remote areas
where there are no permanent economic opportunities.
775. Would you not say that a way of overcoming
these problems is if, as Mr Curry says, ITQs in one form or another
are going to be inevitableand there is an argument that
may or may not be the case but let us say that it will bein
that case there is a need for Government intervention in order
to ensure that the social dimension of fishing policy remains
and there is a way of protecting fishing communities on the West
Coast and you provide belt and braces to support the industries
in coastal areas?
(Mr MacSween) I think that is correct.
I do not suspect that folk in Cornwall would be too pleased if
the Scots bought up all the fishing rights to mackerel in the
South West Box and left your fishermen without any fishing opportunities
but that is the inevitable consequence of introducing property
776. There is very little mackerel left in the
South West Box for the Cornish fishermen so maybe we will need
to buy some of the mackerel back off the Scots. When we were in
Shetland I was very impressed by the way in which the Shetland
PO have already started to buy in both to protect themselves and,
I imagine, to build up the quota available to them. I guess in
each coastal region that will be necessary in order to protect
the industry. Presumably your POs are already beginning to think
along these lines, are they?
(Mr MacSween) We are indeed and we have
acquired fish. Shetland is not perhaps the best yardstick against
which to describe us because they have access to the oil fund
in Shetland so effectively the public purse is buying fishing
rights for the fish in Shetland that fishermen can catch. I would
love it, and I am sure Ron and Hamish would love it, if Aberdeenshire
Council could give us £1 million each in the same way as
Shetland Council gave the Shetland PO £1 million and we could
go out and buy the Cornish fishing rights, which I am sure you
would be delighted with.
777. As you know, when quota was transferred
what happened was a legal agreement by the purchaser and the seller
that legally the quota remained on the licence of the seller and
then after five years the Government sanctioned the transfers
so that, in fact, the actual fish could be attached to the licence
and the buyer so that they regularised what was in fact a rather
informal situation and attempted to put into legal terms an informal
arrangement. We have also heard it said that it is inevitable
that the Government will have no choice but to sanction the transfers
in this way on an annual basis. Do you agree and do you approve?
(Mr Gordon) I do agree. I think it is
necessary and essential that we agree on the transfers otherwise
fishermen will make deals with each other and they will enter
into legal agreements which provide for the transfer of fish from
one PO to another PO on an annual basis. If we do not have these
made permanent annually there is going to be the proliferation
of agreements which we had before with the POs transferring to
778. Can I ask you a question which sounds as
though it is very similar but actually it is rather different.
In the management of the quotas within the PO would it help if
you could have the flexibility of much more short-term transfer
leasing, that sort of thing, just to make it easier for fishermen
to manage that stock or perhaps have a PO to manage that stock
on an internal basis? Again, the previous witnesses said that
they have to spread their quota around over the year so there
are allocations on a periodic basis but that does not often correspond
to what is happening to the stocks there and it would make life
much easier if there was a mechanism whereby the fishermen were
not under pressure to behave in a way that might not actually
correspond to the way the stock behaves. What do you think would
be the most helpful two or three measures Government could take
which would help you in the management of your organisations and
the interests of fishermen?
(Mr Gordon) One step would be to avoid
the vast fluctuations in TACs both upwards and downwards because
that causes immense problems. That is one step.
779. By multi-annual TACs?
(Mr Gordon) Something. Multi-annual TACs
I am not too sure about because the danger is if they are too
low we might all catch the three year quota in 18 months' time.
This year, for example, there was a 30 per cent cut in the West
Coast whiting allocation, a 27 per cent cut in the West Coast
haddock, 14 per cent North Sea haddock, these are all very real
and very difficult to manage as a result of these quota cuts.
If something could be done to even out the increases or the decreases,
possibly multi-annual, I do not know, or something similar, that
could be a solution.