reLAKSation 235. Callander McDowell
Conference season: In the next weeks, two conferences are due to take place in Scotland. One is the Soil Association’s organic fish meeting in Stirling and the other is the Aquaculture Today conference in Edinburgh. Unfortunately, no one from Callander McDowell is available to attend either meeting due to prior commitments. We are sorry to miss the opportunity to discuss the issues and meet old friends. However, we are always happy to hear from you at any time. We do not believe that it is necessary to have the excuse of these meetings to continue exchanging views and ideas.
Waning enthusiasm: Poul Melgaard Jensen of Dansk Fisk told IntraFish that there was little enthusiasm for the continuing fight over the MIP, especially as it relates to imports of fresh fillet. He believes that the figure is just about right. However, it seems to us at Callander McDowell that he has missed the point.
The real issue, which is one that Norway is trying to address through the WTO, is that Norway is reluctant to accept the imposition of trade measures when the Norwegian industry believes that it is innocent of the dumping charges. It may well be, as Mr Melgaard suggests, that the EU may remove the measures in a year, but Norway will still be considered to be guilty of dumping.
From our own perspective, there are still too many unanswered questions that the Commission has refused to address, to be confident that the case against Norway is watertight. Norway should fight the case and finally put an end to these ridiculous assertions that salmon farming is an industry that is subjected to dumping.
The greatest question mark relates to why the Commission instigated the dumping case to run in parallel with the safeguard application when they were both targeted at the same salmon imports over the same time period and on behalf of the same minority of farmers. This decision was almost so unique that the Commission are unable to cite even one other example of a similar parallel investigation. In a presentation to the Irish salmon industry, EUSPG boss Angus Morgan admitted that the safeguard application was simply a vehicle to persuade the Commission to accept their dumping submission. If the EUSPG had been really serious about safeguards they would have waited until the case had reached its conclusion before submitting another dumping action. Instead, they waited just days after the publication of the provisional findings of the safeguard application before sending in their dumping submission.
Under trade rules, any complaint must be checked for its accuracy and adequacy before a new investigation can be initiated. It would seem that the Commission simply used the findings of the safeguard case to judge the validity of the dumping submission rather than check the data provided in the submission. This can be the only explanation as to why the data supplied in these two parallel cases shows such divergence.
Much of this data is not made available in the public arena due to confidentiality but there are three areas where data has been provided but the figures simply do not match up.
The first is the number of farms. According to the information supplied by the Scottish Executive in the safeguard application, there were 71 farms actively producing salmon in January 2004. By the time the EUSPG submitted their dumping complaint in September 2004, the number of farms had fallen to just 33. This means that according to the EUSPG 38 have simply vanished without explanation in just eight months.
The second question relates to production cost data. Ever since 1992, when a Scottish Agricultural College survey showed that Scotland was actually producing salmon cheaper than Norway, the Scottish industry have refused to participate in any production cost surveys. The cost comparison study promised in the Strategic Framework has yet to appear and the new SSPO appear unenthusiastic about committing to an official survey in their response to the new aquaculture bill proposals. They argue questions of confidentiality and the absence of any EU directive to supply this data. However, some cost data is supplied in both the safeguard application and the dumping submission. The data is supplied in different currencies but what is more interesting are the trends.
According to the safeguard application, production costs fell in 2002 and then rose again in 2003, whilst the dumping submission claims that that production costs rose in 2002 and subsequently fell in 2003. Both sets of data relate to small independent producers so it is difficult to understand why there is such a discrepancy.
The final issue is production data. The Scottish Executive produce an annual survey of production data for many years and there is no reason to doubt the accuracy of the data as much is based on historical evidence. It is therefore unclear why the EUSPG needed to submit their own data and forecasts. According to the Scottish Executive, Scottish salmon production in 2004 stood at 158,099 tonnes yet the EUSPG claim it to be estimated at only 110,000 tonnes.
Something is clearly wrong with the Commission’s understanding of accuracy if both sets of data are considered to hold sufficient validity to instigate the two parallel investigations. Norway may or may not be guilty of dumping but whilst these and other questions raise enough doubts about the validity of the case that it should be investigated by the WTO regardless of what the Commission decide to do with the MIP.
Same again: One industry figure is always critical of our views suggesting that they always offer a negative perspective of the Scottish industry. This is a very blinkered view since we have always been the greatest advocates and supporters of the fish farming industry, irrespective of species or area of production. This does not mean that we automatically agree with every decision taken by the industry but we do think that any decision should be open to discussion and scrutiny. One of the arguments against this is that open discussion supplies ammunition to the industry’s greatest critics, but equally the industry should be sufficiently confident to stand up and defend such decisions.
We were interested to read in IntraFish that Scottish finfish producers have just launched an industry-wide code of good practice aimed at lifting quality and traceabilty across the industry. Sid Patten of the Scottish Salmon Producers Organisation (SSPO) said that salmon buyers are going to know that companies are operating to the highest standards in the industry.
We actually have no issues with the code itself. Consumers have a right to expect that the farmed fish they buy, are produced to the highest possible standards. Consumers should expect nothing less. What we are not convinced about is whether the code should be used as a marketing tool. Mr Patten said that the group is currently developing a trade brand for the code that could eventually be adopted as a mark on consumer packs as well. Surely, the salmon industry has already tried such a strategy – the Tartan Quality Mark – and it has failed.
According to the SSPO website (amended from that produced by the now defunct Scottish Quality Salmon), only salmon produced under the strict standards of the Product Certification Scheme can display the Tartan Quality Mark. The mark is a recognised symbol assuring retailers and consumers that the salmon is Scottish and that the production processes have been rigorously and independently inspected at every stage. This sounds very similar to the proposals for the latest code of conduct, except that the new code is intended to cover all finfish species not just salmon.
One of the main reasons that the SSPO replaced Scottish Quality Salmon is that many farmers refused to support the Tartan Quality Mark because it required a financial commitment that produced no monetary benefits in return. It effectively cost companies to put the TQM salmon into the marketplace yet consumers were unwilling to pay any extra for the salmon. As a result, the TQM has virtually disappeared from the retail sector in the UK bar one or two exceptions that have no meaning. Both can be found in some Morrisons stores. The first is that some fish counters display a TQM bunting from the ceiling of the counter but it does not relate to the fish on display. The second is that the symbol appears on the back of one smoked salmon product but the customer does not see it unless he/she actually picks up the pack and it does not appear on all the packs. Aside from these two examples, the TQM is totally absent from British supermarkets. It therefore has no value.
Mr Patten may argue that if consumers are given a choice between quality marked Scottish fish and similar fish from elsewhere, then they will choose the Scottish product, however this is not proven. When the now defunct Safeway supermarket sold a choice of salmon fillet, consumers did not actively select those fish labelled with the TQM even though the price was the same. Safeway customers actually had a choice between packs of Norwegian salmon, Scottish salmon and Scottish TQM salmon all priced identically. These packs were usually displayed together and customers simply chose the pack that either looked most attractive or was closest to hand. Certainly when labels became mixed up, consumers failed to react in anyway at all.
It is easy to see where all this will lead. According to Mr Patten, Scottish producers are willing to pay for this consumer assurance, yet clearly this will add to the overall cost of production. Mr Patten does not indicate whether he expects producers to be rewarded for this commitment but they are not going to make this commitment just from the kindness of their heart. When consumers start to show no preference for the quality marked fish and opt for that which represents the best value for money, then Scottish producers will surely start to cry foul. Is this what we really want for our industry?
It is right that consumers should expect to buy farmed fish produced to the most stringent criteria, but they are likely to expect it as a matter of right not as an added expense. Critics of the mass food market say that in the same way, consumers should be prepared to pay more to buy better quality, more welfare friendly chickens yet when given the choice, most consumers are dictated by their pocket. This is what has happened to the salmon industry and no number of quality marks will change that without enforced legislation.