37. The Scottish industry appeared to have reached an impasse, what was their next move?
Not long after presenting his views at the two conferences, David Windmill presided over a massive increase of Scottish grilse. The presence of these fish on the market, undermined salmon prices, heralding yet a further price collapse.
The outcome of this price collapse was that the Norwegian industry started to believe the Scottish industry claims that Norway was responsible for the continued market disruption. Mr Crowe, Chief Executive of the SSGA reported that Norway appeared to be well on the road to accepting POs. At the NFF AGM, 90% of votes were in favour of some form of supply management. The Scottish and Norwegian industries were felt to becoming to the same conclusion, albeit from slightly different angles. This ignored the fact that the NFF had voted to pursue POs, two years previously. The problem for Norwegian producers was that the vote was not representative and subsequent events had brought about an ever changing view, as to the viability of this strategy.
However, despite this seeming willingness to discuss Producer Organisations, the Scottish industry had to still overcome Government opposition to the demands. Whilst, they had managed to obtain the support of some individual local MPs and MEPs, they had no influence on the Government, especially as they represented the political opposition.
The MP for Shetland suggested that the SSGA should approach the cross party Scottish Affairs Committee and try to gain their support. Whilst, this Committee had no direct support over the Government policy, its' support would provide a much stronger argument to take to the Government.
The SSGA and SSFA presented their views to this committee of Scottish MPs, on 19th October, 1994.
About the same time, the SSGA had managed to gain another unexpected ally in their pursuit of Producer Organisations. Speaking in Scotland, Mr Olsen, the Norwegian Minister for Fisheries said that Norway would put a system of Producer Organisation in place. He said that this would happen irrespective of whether Norway joins the EC or not.
38. What was the outcome of the Scottish Affairs Committee investigation?
Despite an impassioned plea to the Scottish Affairs Committee, the recommendations were not in favour of the formation of Producer Organisations.
In effect, the Committee expressed a number of reservations about the potential impact on market structure, conduct and performance of the establishment of Producer Organisations with Extension of Discipline and some practical reservations as to their likely effectiveness in regulating the impending production surge over the coming years. They saw POs as anti-competitive and acting against the interests of the consumer.
The Committee, instead recommended a strategic shift in marketing activity, so that the industry engage in a programme of market expansion and innovative product development.
39. What was the industry response?
During their submission, the then Chairman of the SSGA, Jim Payne told the MPs that they were very much hoping with the help of the Committee, to persuade the Government to support the industry with POs and an Extension of Discipline, without any reservations.
When it was clear that this assistance was not forthcoming, the Chief Executive of the SSGA, William Crowe, told the press that the Committee did not fully understand the EU regulations and the whole concept of POs.
Since it was the SSGA themselves who explained the concept to the Committee, then maybe they have only themselves to blame. The reality is that those from outside the industry have a much clearer view as to the viability of Producer Organisations, since they lack any preconceptions. Their views could therefore, be more relevant in deciding whether Producer Organisations are the solution to the industry problems.
It is also worth considering the full recommendations of the Committee. This should be viewed against the comments made by David Windmill at the Fish Farming Conference in 1993, in which he said that the industry would have more respect for politicians, if they were to be positive, imaginative and constructive. How much more positive, imaginative and constructive do they need to be in order to avoid the comments from Mr Crowe, in which he said that the Committee did not have sufficient expertise to draw on when examining some of the submissions.
40. Meanwhile, what was happening in Norway?
In May 1995, the Norwegian Government published a white paper, in which it will laid out its proposals to deal with the continued market disruption. The Minister delivered instruments, which would enable POs to be set up.
Having failed to convince the Scottish Affairs Committee to support their aims, William Crowe thought he had found an ally in Mr Olsen. Mr Crowe responded saying that the Scottish industry would proceed quickly, if the UK Government granted an extension of discipline. This was an unrealistic statement especially as he knew that the Scottish Office had made their views clear on an extended discipline.
Mr Olsen had been holding secret meetings with the SSGA to discuss Producer Organisations, which some Norwegian farmers saw as disloyal. Despite significant reluctance on the part of many of his farmers, Mr Olsens' aim in pursuing a move towards Producer Organisations was actually understandable.
Firstly, as the major source of complaint about Norwegian farmers came from Scotland, any form of collaboration with the SSGA might convince them to stop their complaints.
Secondly, if Norway could be seen to working towards Producer Organisations with Scottish farmers, then the EC may be persuaded to delay any future action against Norway. Mr Olsen was faced with the increased likelihood that the EC may imposed high tariffs against Norwegian salmon, which would effectively exclude them from the European market. Such collaboration on Producer Organisations could be seen as a form of appeasement against the EC.The formation of Producer Organisations might be viewed as the lesser of many evils and therefore Mr Olsen adopted his position, favouring Producer Organisations.
41. Which options remained available to the Scottish industry?
With no likelihood of agreement forthcoming from the Scottish Office and with Norway remaining outside the EC, the Scottish industry were left with little choice.
During July, 1995, Mr Crowe announced that the PO working group has taken a decision to form a voluntary Producer Organisation. He said that in the absence of anyone coming up with another plan, the SSGA saw this as self preservation.
In August, the SSGA held a series of roadshows to inform the industry of their plans and to recruit members for the Producer Organisation. Mr Crowe reported a positive and encouraging response to the proposals to form a PO. However, private reports suggest that the physical response to the meetings was poor with a maximum of 11 farmers turning up at one and only three, at another.
Despite this supposed poor response, Mr Crowe has said that some 30 companies are expected to sign up immediately. SSGA chairman Philip Thorn said that he hoped that the PO would be in place by October.