The Federation of Scottish Aquaculture Producers
Sector Report 2004

1 Introduction

The Federation of Scottish Aquaculture Producers (FSAP) is an overarching industry body which includes the 4 main finfish farming trade associations in Scotland, covering companies working in both fresh and marine waters.

The finfish aquaculture sector in Scotland is well-established, and:

• Provides direct and indirect employment for some 8,500 people, many of them located in remote and fragile coastal and rural communities

• Contributes some 50% of Scotland’s food exports by value

• Generates around £300 million per annum in farm gate sales, which translates to over £800 million per annum at retail

The industry overlaps with the entire Scottish seafood sector, since many processors and transporters are using both farmed and wild-caught seafood.

The industry is diverse in terms of activity and geographic spread, but freshwater production is generally quite widely spread over much of mainland Scotland, whilst seawater production tends to be concentrated on the West Coast of the mainland, and in Shetland, Orkney and the Western Isles. It has been estimated that aquaculture’s physical ‘footprint’ on the coastal marine zone is some 0.2% of the total, and freshwater trout farms occupy some 2 km² of land in total, in comparison with 44,000 km² of other animal-producing land area in Scotland

The main sub sectors are¹:

1.1 Rainbow Trout

• 9 sites using freshwater cages, producing some 3,500 tonnes per annum

• 33 sites using freshwater ponds, tanks or raceways, producing some 2,200 tonnes per annum

• 3 sites using seawater cages, producing some 1,000 tonnes per annum

1.2 Atlantic Salmon

• 81 sites using freshwater cages to produce smolts – total production volume is 409,000 m³

• 92 sited using freshwater tanks and raceways to produce smolts – total production volume is 41,000 m³

• Around 330 sites using seawater cages to ongrow market size salmon

1.3 New Marine Species

• 7 seawater sites licensed to produce cod (of which five will be pump-ashore hatcheries, with only two of these really active)

• 12 seawater sites licensed to produce halibut (of which there is only one major pump-ashore hatchery, the remainder being sea cage sites, or pump-ashore ongrowing sites which are currently not in use)

2 Use of water

2.1 Net Water Consumption

The aquaculture industry, no matter how or where it operates, is not a net consumer of water. Water provides the physical medium in which the fish live and grow. It provides the necessary dissolved oxygen for respiration (although this can be artificially augmented in some land-based systems), and it carries metabolic waste products away from the fish. In this latter regard there is an environmental consequence of the industry’s use of water – just as there is an environmental consequence of all human activity. The environmental consequence of aquaculture use of water is already strictly controlled by regulation under the Control of Pollution Act (CoPA). SEPA regulates the industry, and cost-recovery is achieved for that regulation by way of SEPA charges.

2.2 Abstracted Volume

Most aquaculture takes place in floating cages, whether in seawater or in freshwater. Only a small percentage of the biomass of Scottish aquaculture uses water which is truly ‘abstracted’ from a water course, and that is returned directly into the water course from whence it came, rather than re-entering the catchment in more diffuse ways.

Future development of rainbow trout production in river-based units is likely (see also Section 3), but it is envisaged that such units will utilise recirculation technology. This should lead to net water quality improvements, as well as the avoidance of any further abstraction.

It has been reported that this small section of the industry abstracts 1,617 million m³ each year, or 4.4 million m³ per day². FSAP has not been able to verify the current accuracy of these figures

2.3 Valuing Abstraction

The industry already ‘pays’ for its abstraction (where this takes place), by way of SEPA discharge consents under CoPA. Abstracting fish farmers are permitted to abstract a certain volume, as part of their consent. In addition, they must meet certain quality conditions for the water they replace into the water course. Non-abstracting fish farmers are regulated on the basis of quality of discharges alone – by applying biomass limits to their consent.

Industry has attempted to work with SEPA consultants in order to arrive at ‘theoretical’ economic valuations of the use of abstracted water. The most appropriate methodology seems to be avoided cost, and industry has proposed two theoretical models:

Industry has been assured by SEPA that these sorts of calculations will not be used as the basis for any new proposed charging schemes, over and above what industry already pays.

3 Future Developments

With rising global demand for aquaculture products, the Scottish industry anticipates further slow and careful expansion over the next few years. However, the industry does not foresee any significant further volumetric abstraction of freshwater, for the following reasons:

• Much of the expansion will come from fish grown in seawater pen systems – including rainbow trout

• The small additional demand for production capacity in the freshwater phase for Atlantic salmon will increasingly make use of the water-saving techniques which have been used as the basis for the ‘avoided cost’ analyses shown in Section 2. There is already quite widespread use of these techniques

• The additional production of rainbow trout in river-based systems will also utilise recirculation technology (see also section 2.2)

4 Other issues

4.1 Regulation and Cost

The Scottish aquaculture industry already considers itself to be well regulated by SEPA from the point of view of water use. It also considers itself to be one of the most heavily regulated aquaculture sectors in the world, and SEPA acknowledges this reality. Such regulation is not necessarily a bad thing, but all regulation has attached cost which i impacts on international competitiveness.

The industry is also regulated on many other aspects of its activities, not just on the use of water. We face further increases in cost in some of these, as our first look at some of the proposals for inclusion in a future Fisheries Bill confirms.

All of this is set against a clear undertaking from the Scottish Parliament to try to reduce the burden of regulation on the industry.

4.2 Cost in Primary Production

Much like our colleagues in the agriculture sector, we are primary producers of food. There is a good appreciation of the quality of our ‘Scottish’ products in the international market, and there is no doubt that is assisted by consumers’ awareness of Scotland as a green and largely unspoiled land. It is in the interests of all our sectors to maintain that image of Scotland, which is why we broadly welcomed the development of the Water Framework Directive.

However, the ‘Scottish’ advantage in the market is small and finite, and food production is generally a deflationary sector. Retailers increasingly source products from all over the world, and the pressure on prices is steadily downward. This benefits consumers, but is challenging for our farming and fish farming sectors. However, we are integral to the future of a balanced Scottish economy and infrastructure – there are very few alternative sources of rural and coastal employment in much of Scotland.

Any single proposal for an increase in cost to our fish farmers needs to be considered very carefully.

4.3 Risk

Much of our own operational thinking, and our relationship with regulators and other stakeholders, now focuses on ‘risk assessment’. This can sometimes be a rather vague concept, but in the case of aquaculture we have an internationally-recognised model with which to work.

Our concern about the roll-out of the Water Environment and Water Services Act (WEWS) is the potential for increased cost-recovery from our industry because of the increased workload for the regulator (SEPA). We do not dispute the workload, although we have some concerns about efficiency and the apparent lack acknowledgement of modern environmental management and self-regulation tools. However, the increased workload is because of the need for SEPA to meet its obligations under WEWS. We should, rather, be concerned about whether there is any new real environmental ‘risk’ in the aquaculture sector.

The industry would suggest that no new material or measurable risk to the Scottish water environment has suddenly emerged because WEWS has appeared – at least not from the aquaculture industry. Every real risk has already been well assessed under the existing CoPA system, and we are paying our way in ‘managing’ that risk in Scotland.

4.4 Grant in Aid

There are certainly areas of impact on the water environment in Scotland which can now be addressed for the first time by SEPA, under the WEWS act. The aquaculture industry welcomes this, since these areas have also impacted negatively on our businesses on occasion.

In a perfect world the sectors responsible for these areas could be identified and charged as part of SEPA’s need to have demonstrable cost-recovery. If this is not possible, or limited, then we would hope and expect that SEPA’s additional costs will be met from general taxation. The benefits of WEWS are ultimately for everyone in Scotland.

1 Refer to Scottish Fish Farms Annual Production Survey 2002, published by Fisheries Research Service