reLAKSation
62.
Uncommon
strategy!: As part of attempts to reform the Common Fisheries Policy, the
European Commission has launched its first ever strategy for sustainable
aquaculture. According to Intrafish, EU Fisheries Commissioner, Franz Fischler
has said that the strategy is ambitious, but equally, attempts to boost
aquaculture must not be achieved at the expense of food safety, quality or the
environment. Yet, however well intentioned, this strategy may be unsustainable
because not only is it based on too much rhetoric, but also on insufficient
substance. This is because the motivations behind the strategy’s objectives
may be misplaced.
The strategy has three main
objectives, the first of which is the creation of between 8 and 10,000 new jobs
in fisheries dependent areas. Yet, is the creation of jobs sufficient reason to
expand the existing aquaculture industry? Could growth fuelled by job creation
alone actually destablise the industry rather than secure long-term employment?
Perhaps, other forms of employment outside the fisheries and aquaculture sector
may better serve the aim of job creation?
The key question is whether
this new strategy should be driven by a much more fundamental motivation. We, at
Callander McDowell, certainly believe that it should. The alternative is that
the aquaculture industry may be subjected to a repeat of the recurring market
disruption, which has affected the industry over the last decade.
As part of its strategy, the
European Commission has outlined its vision for the future. It acknowledges that
the aquaculture industry has grown well over the past two decades and continues
to show positive potential for further development despite a recent slowdown in
growth. It also recognises that there are still problems with regard to the
environment, health protection and market instability. To overcome these, the
Commission recognises that the aquaculture industry must be economically viable
and driven by the market. Yet, how does such a focus on job creation relate to
this need for a market driven industry? Perhaps the Commission would like to see
the aquaculture industry expand irrespective of whether consumers actually want
the ensuing production?
Would it not be better if the
market were the driving force behind expanded production, which in turn may
result in the creation of new jobs? The European Commission’s Fisheries
Department may argue for job creation, especially to help in the redeployment of
lost fisheries jobs, but at the same time, these lost jobs may hold the key to a
much more market driven strategy.
Consumption of fish and seafood
products has increased and continues to do so. This increased demand has placed
untold pressure on commercial fish stocks to the extent that many are now under
significant threat. The European Commission, in common with other parts of the
world, has sought ways to reduce this fishing pressure. The Common Fisheries
Policy, which is now under reform, has imposed quotas, decommissioned vessels
and instigated third party fishing agreements. Yet, despite these measures fish
stocks have yet to recover. This is because there is still a growing demand for
the catch. How can fish stocks be given time to recover and yet at the same time
meet this growing demand from consumers? The answer must lies with aquaculture,
supplying the fish, which fisheries cannot provide. This must be the driver for
future aquaculture expansion.
However, such expansion will
only work if the industry produces what the consumer wants and not what the
industry or even the European Commission thinks the consumer wants. The
Commission wants the aquaculture industry to be economically viable and self
sufficient, yet the strategy recommends a focus on alternative species, which
may or may not have sufficient market demand. This simply repeats the
production-led approach previously adopted by the aquaculture industry rather
than those, which are much more market led. Instead, the European Commission
should encourage investment in the necessary market research to identify which
fish species the consumers want, what form they want them in and how much they
are prepared to pay. Prospective farmers can then calculate whether the fish
that they might farm are both economically viable and profitable. In addition,
farmers need to give consideration as to what may happen when production volumes
grow. Experience has shown that high value species become devalued as production
expands leading to market instability and uncertainty. Farmers need to be
prepared for what might happen when prices fall and margins are squeezed.
By comparison the European
Commission approach to marketing lacks focus. It has suggested a four-pronged
attack on market development. However, even this so-called market-led strategy
has a production-led feel. The Commission suggests that Member States should
invest in mechanisms to monitor demand in relation to production. This is
included in the strategy presumably because the existing industry has not
planned ways in which to deal with low market prices and has fallen back on
production-led strategies such as Producer Organisations and trade actions. The
Commission do recognise the failings of such a system by stating that these
mechanisms should not reduce competition, nor encourage agreements to fix
prices.
The Commission has also
recommended that support should be given to generic promotional campaigns to
communicate messages about the image of farmed produce. However, the market for
fish is becoming much more sophisticated and as a result, these generalised
campaigns often fail to hit their target. Promotional campaigns are only one
part of the marketing mix and without investment in marketing cannot be properly
targeted. The industry must undertake the marketing first to establish whether
the campaigns are actually necessary. It is mistake to recommend this approach
without the supporting work.
The Commission has suggested
that one of the reasons that there has been previous market instability is poor
uptake of farmers using official EU quality marks. Unfortunately, experience has
shown that such quality marks have little impact on consumer purchases. This is
confirmed by the fact that some well-known quality marks have disappeared from
the retail market. There is now a different allegiance to both the products they
buy and the supermarkets they buy them from, that quality marks have a reduced
place for the modern consumer.
Finally, the Commission
recommends that there should be increased partnerships between farmers,
especially towards co-operatives to compensate for the lack of any economies of
scale. This is something that the Commission does have right, although the
suggestion may well be too late.
As prices have fallen with
increased production, some farms have looked to benefit from the economies of
scale by merger and acquisition. As a result, some farms, especially in the
salmon industry have developed in huge companies with production exceeding that
of some whole nations. Smaller farms have been unable to compete and have bailed
out. A minority has taken the co-operative approach. The reality is that modern
fish farming is big business. This is a far cry from the original conception of
fish farming as a local crofting type activity. It was also thought that
fishermen might also diversify into fish farming having a cage of fish in
addition to their fishing vessel. This concept soon disappeared, as fish farming
became a much more commercial operation.
The European Commission clearly
still view fish farming as a potential adjunct to fish catching with the
suggestion that aquaculture could be a source of jobs for redundant fishermen.
Unfortunately, the only common factor between the two is the fish.
The European Commission is right to promote a strategic view of aquaculture however aquaculture is no longer a minor niche industry. It therefore deserves a much more modern approach especially one, which is dominated by the markets rather than a haphazard mix of not one thing or another.