Michael Russell, the Minister for Aquaculture, began the debate much as he began his foreword of the Fresh Start document ruing the loss of the Minimum Import Price, although he does suggest that an improved relationship with his Norwegian counterpart should have overcome the difficulties that led to the MIP. Unfortunately, this reassurance did not prevent other members returning to the matter.

Peter Peacock, Member for Highlands & Islands, said that the independent salmon farmers regretted the loss of the MIP and find it worrying for the future. He said that it is important that the monitoring, that the EU agreed to conduct, is robust, as it might form the basis of a future case to Europe.

Des McNulty, Member for Clydebank and Milngavie, said that the battle fought to instate the MIP should not be underestimated. Whilst he suggests that some parts of the industry would be relieved by the loss of the MIP, others are feeling extremely anxious. He highlighted a newspaper report from last August which (the EUSPG) warns of significant job losses as a result of the EU’s decision.

Finally, Elaine Murray told the Minister that it is important that the Government continues to monitor what is happening. She argues that if Norwegian producers face economic problems at home, then the easy answer is for them to make production cuts in Scotland, a point also made by Peter Peacock who warned that because Norway owns much of the Scottish industry, it is possible that any Norwegian overproduction might be compensated by reduced production in Scotland.

It seems to us, at Callander McDowell, that this readiness to dwell on what happened previously is incompatible with this renewed strategic framework. ‘A Fresh Start’ should be about taking the industry forwards but instead there seems to be an unwillingness to let go of the past. However, what this debate about the MIP really shows is that there is still a great deal of misunderstanding of the salmon market.

We’ve already written much about the MIP so we do not intend to go over well-trodden ground again. What is of much more concern is that some MSP’s perceive that any future problems in Norway could lead to a deliberate cut in Scottish production. 

The Scottish Executive maintains that the reason why Norwegian companies have invested in the Scottish industry is because of Scottish salmon’s premium position in the marketplace, which should form the basis for increased margins and greater profitability. We, at Callander McDowell, do not necessarily subscribe to this view since we well remember that the initial motivation to buy into Scotland was prompted by a belief that Norwegian companies might be excluded from the EU market as a result of the repeated dumping complaints. However, if we are wrong and there is truth in the Scottish Executive’s view then surely any Norwegian company would prefer to not only hold on to any Scottish production but seek to boost it in the hope of even greater rewards. By comparison, should these companies experience problems at home then surely they would review their home activities in order to stem any losses.

Peter Peacock’s words of warning of this potential threat to the Scottish industry is based on misleading and factually wrong information. He told the debate that the Scottish salmon industry started with pioneer independent producers followed by moves to larger companies and then to multinational companies. This is untrue. The first salmon smolts were put to sea at Loch Ailort by Marine Harvest, a company set up by Unilever, and Unilever Research, who at the time had a research centre in Aberdeen. Whichever way Mr Peacock would like to describe Unilever, it is not, and never was, an independent producer. From the outset, there were a number of industrial conglomerates that were interested in intensive aquaculture as they perceived that growing fish might be seen as a green activity to offset their other ventures. Most didn’t bother to continue when they realise that some of the technical issues would require more than a major commitment. The view that salmon farming would be undertaken by independent fishermen and such like was one that was held more in Norway than in Scotland. Thus Mr Peacock’s view of the Scottish industry is one which has been more romanticised than it is reality.

That this vision extends to the MIP is therefore not surprising. However, what Mr Peacock, Elaine Murray, Des McNulty and even Minister Michael Russell have failed to appreciate is that protection afforded by the MIP is not the way to take the industry forward. If the salmon industry is to have ‘A Fresh Start’ then it must look to the marketplace for any solutions.

The MIP was imposed because independent salmon producers complained that Norway was over-producing and dumping cheap salmon in the marketplace. Yet at the same time, the Scottish industry argued that they were producing a superior product that consumers not only wanted but were willing to pay a premium to buy. If this is the case, then it shouldn’t make any difference if Norway were selling cheaper salmon in the marketplace since by claiming that they received a premium, there would always be a price differential between Norwegian and Scottish salmon. What prompted the complaints was not that Norwegians were undercutting Scottish salmon producers but rather that Scottish producers were not getting the premium they expected. The MIP would not solve this but a different approach to marketing might.

This is why we continue to argue that getting the marketing right is so important to the future of the salmon industry. Producers need to be producing salmon in the forms that consumers want not what producers want to sell them.

We, at Callander McDowell, were pleased to see that one of the themes of the renewed Strategic Framework focused on markets although we felt that it had been somewhat diluted by the inclusion of image, careers and feed sustainability. These are all topics worthy for inclusion in the framework, but not within the theme of markets.

The Parliamentary debate covered all the themes in one form or another with some emphasis on how aquaculture can coexist alongside others, even other aquaculture producers such as the shellfish industry. However despite a very varied debate, little consideration was given to the subject of marketing and how the aquaculture industry can most effectively promote its produce. One MSP, Rob Gibson, Member for the Highlands & Islands, did highlight current problems for shellfish producers in that the market, especially the traditional overseas market, seems to have shrunk due to the credit crunch and perhaps some effort should be made to stimulate the home market.

The debate produced two references to the salmon market, both intended to highlight the (past) success of the salmon industry. In his introductory comments, the Minister, Michael Russell said that the quality of what is produced is high with Scottish salmon holding the French Government’s top quality award, Label Rouge, since 1992. He added that Scottish salmon was the first non-French food to receive that accolade. He also mentioned that Scottish salmon also enjoys Protected Geographic Indication (PGI) status alongside Arbroath Smokies, Parma Ham and Scotch Beef (although we suspect that Parma Ham is registered as the higher PDO [Protected Designation of Origin]).

Later in the debate, Bill Wilson, Member for the West Of Scotland, repeated Mr Russell’s comments about Label Rouge pointing out that not only was Scottish salmon the first non-French product to be given this award but the first time it was given to a fish product. He added that as the award is conferred only on products meeting stringent criteria with regard to quality, there is no doubt that the product of the Scottish salmon farming is of high quality.

Of course, there is no doubt that the award of Label Rouge to the Scottish salmon industry was a great achievement…..in 1992. It may have been the first non-French product to have gained this award, but now there are more. It may have been the first fish product to have gained this award but now there are more. It may have been the first salmon production to have gained this award but now so have Norwegian salmon. Finally, whilst Scottish salmon can carry the Label Rouge mark, only a mere 7,000 tonnes are sold as such. Label Rouge salmon may be a profitable niche market for those producers that serve it, but it is not representative of the whole Scottish industry. We cannot sit back and bask in the past glory of Label Rouge and think that it applies to all salmon production. The Marine Laboratory industry survey estimates that 136,775 tonnes will have been produced in 2008, which equates to just under twenty times as much non-Label Rouge salmon as there will be salmon produced for Label Rouge. If the industry is to profitably market this fish then it may need to adopt a different approach to that for Label Rouge. What cannot happen is that Scottish production be expected to produce margins akin to those for Label Rouge and then when they are not achieved for the industry to run to Brussels to complain that it is Norway’s fault. This is why the market theme is so important, but so far seems to have been given little consideration.

We had possibly hoped that the responses to the consultation might have offered more hope in relation to the market theme but we were a little disappointed. All the responses have been published on the Scottish Executive website, except those submitted in confidence. In all there were 43 responses from organisations and companies (two of which seem to have been repeated), six from individuals and a further two anonymously. As would be expected most reflect the specific interests of the various interest groups. Unfortunately, there was little response to the markets theme. Most comments were kept very short such as ‘better image,’ ‘better promotion’ and so on. The three that caught our eye were from the British Trout Association, The Western Isles Council and the Food Standards Agency.

The BTA response began by stating that they understand why the five themes have been identified but suggests that they are not all of equal importance. They rightly say that for aquaculture to flourish in Scotland much greater emphasis must be placed on the development of marketing and the markets. They see that one of the greatest problems is that aquaculture is still treated as somehow different to other aspects of food production whereas it is just another unremarkable farming enterprise that should be promoted as part of the general farming system.

The BTA is absolutely right. The problem is that in the political system aquaculture is lumped together with wild catch fisheries rather than farming because they both have fish in common. However, aquaculture has little in common with wild catch fisheries except the fish, whereas by comparison, aquaculture has so much in common with other forms of farming. In the early days of the fledgling fish farming industry in Scotland, all the connections were with the farming industry. These have since been severed as the governance changed from the farming department to fisheries. The same applies within the European Commission. The Scottish Executive has increased the divide by renaming fisheries as fishing. It is no wonder that there is sometimes a struggle to understand the needs of the aquaculture industry.

Finally, the Food Standards Agency has suggested that promotion of aquaculture produce should be improved through the positive use of nutritional information. Of course this already happens through the promotion of omega-3 fatty acids although the story now seems to be somewhat confused with Alaskan pollock and other white fish being promoted for the omega-3 content.