House of Commons - Environment, Food and Rural Affairs

Select Committee on Environment, Food and Rural Affairs Sixth Report

5Setting clear social objectives in fisheries policy

Fishery departments should consider the use of community quota in vulnerable and dependent fishing communities, looking to develop a system compatible with EU law. They should launch a feasibility study on the design of a community quota system by the end of 2004.

61. In order to restrict concentration of quota ownership under an ITQ system, the SU report proposed the introduction of a 'community quota scheme' whereby a proportion of quota would be 'ring-fenced' for those communities most at risk. It recommended that such a system should be established before the introduction of ITQs.[73]

62. In the UK, there have been several local or regional community quota initiatives established in the last few years, led either by local authorities or by local fishing organisations. The two most notable have been the schemes set up by the Shetland and Orkney Island Councils.[74] However, the establishment of such schemes in the past has often presented difficulties, because of issues of compatibility with EU law, state aid, and questions about which communities should benefit from the aid.

Potential difficulties with community quotas

Compatibility with EU law

63. The SU report pointed out that previous community quota schemes have faced difficulties complying with EU competition law and rights of equal access, largely because public finance was used to buy up the quota.[75] It suggested, however, that state aid difficulties could be overcome if fisheries departments directly 'ring-fenced' the quota themselves:

… quota reallocation by fisheries departments is less likely to require state aid consent, as in strict legal terms it involves changing who is allowed to fish, not the transfer of a financial asset or spending from the public purse.[76]

64. The SU report cited the current example of the under 10-metre vessel inshore sector which already has a proportion of TAC quota set side by fisheries departments each year: "in an analogous manner, fisheries departments could also set aside a percentage of TACs by community quota".[77]

65. Several witnesses still felt this legal uncertainty was a potential obstacle for the implementation of community schemes in the future. The RSE told us that there were "quite a lot of complicated legal aspects" to clarify before any such schemes could be established.[78] The Scottish Minister for Environment and Rural Development considered it was "unclear" to what extent such schemes, like those in Shetland and Orkney, could be extended throughout the UK "without running into state aid problems".[79]

Which communities benefit from the aid?

66. The SU report stressed that community quota schemes "depend on the availability of resources, public or private, in an area" because they must be locally sponsored.[80] Some of the most vulnerable areas may therefore not have the means to set up such schemes themselves. Some witnesses were concerned about whether those communities which received the aid would be those in most need of assistance. Dr Palfreman believed this was a serious problem. He suggested that the concept of community quotas should be "advanced and developed much more than we have in the Strategy Unit report, so that it provides some protection for the regions".[81]

67. When questioned on the issue of which communities would benefit from the aid, the Strategy Unit told us this was an area under discussion within the SFP.[82]

Role of producer organisations

68. Producer organisations (POs) have a fundamental role in the current UK quota management system. They are largely responsible for in-year quota management, a responsibility that has been devolved from Government. However, the SU report does not address POs or their future role within the proposed quota schemes in any detail. Dr Palfreman found this "extraordinary".[83] He stressed that the PO was the "obvious entity" to handle community quota.[84] The Scottish Seafood Processors' Federation also told us that "the place to ring-fence the quotas [is] around the POs".[85] The NFFO agreed that "a community-based quota system linked to the existing producer organisations would probably be the most effective way forward".[86] The Scottish Minister for Environment and Rural Development told us he was "very anxious to see [community-based] systems whereby as far as possible they are actually managed by producer organisations and by the fishing industry".[87]

69. In evidence to us, the Strategy Unit confirmed that the management of community quota schemes by POs has been one of the issues raised to date within the SFP, but described it as still "very much under discussion".[88]

Our conclusions

70. We agree with the Strategy Unit that the UK should have a "positive policy towards community quota schemes for the most vulnerable communities, if this can be done within EU law". We therefore recommend that the Government undertake further work to assess the legality of potential community quota schemes and that it launch a feasibility study to explore the different options for the ring-fencing of quota.In carrying out this work, the Government should ensure that producer organisations have a central role to play in the administration and management of community quota schemes. It should also consider how this role should be financed and whether Regional Development Agencies ought to be involved.

71. We are concerned that some of the most vulnerable communities within the UK may not have the financial resources necessary to establish community quota schemes. We expect the Government to consult on this matter and solve these issues before it formulates any proposal.

73 Net Benefits: A sustainable and profitable future for UK fishing, p.101-04 Back

74 The Strategy Unit report provides information on the community quota schemes set up by the Shetland and Orkney Island Councils and also by the Duchy Quota Company in Cornwall. Net Benefits: A sustainable and profitable future for UK fishing, p.102 Back

75 Net Benefits: A sustainable and profitable future for UK fishing, p.101 Back

76 Ibid. p102 Back

77 Ibid. Back

78 Q317 Back

79 Q286 Back

80 Net Benefits: A sustainable and profitable future for UK fishing, p.101-102 Back

81 Q270 Back