An Assessment of the Benefits to Scotland of Aquaculture

165 Pages·2014·5.04 MB·English

An Assessment of the Benefits to Scotland of Aquaculture
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Alexander, K, A. Gatward, I. Parker, A.
Drafted by
Black, K. Boardman, A. Potts, T. Thomson, E.
Approved by Murdoch Gatward (IEL) Kenny Black (SRSL)

Signature
………………………………… …………………………………

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Glossary
BTA British Trout Association
CSR Corporate Social Responsibility
DEFRA Department for the Environment, Food and Rural Affairs
EBM Ecosystem Based Management
FAO Food and Agriculture Organisation of the United Nations
FCR Food Conversion Ratio
FSA Food Standards Agency
FTE Full Time Employee
GHG Green House Gas
GVA Gross Value Added
HIE Highlands and Islands Enterprise
HUFA Highly Unsaturated Fatty Acids
IEL Imani Enterprise Ltd
IMTA Integrated Multi-Trophic Aquaculture
JNCC Joint Nature Conservation Committee
LCA Life Cycle Assessment
MPS Marine Policy Statement
MPA Marine Protected Area
MSP Marine Spatial Planning
MSFD Marine Strategy Framework Directive
MSA Market Systems Approach
MGSA Ministerial Group for Sustainable Aquaculture
MSC Most Significant Change
NAFC NAFC Marine Centre (Shetland)
NMP National Marine Plan
SRSL SAMS Research Services Ltd
SARF Scottish Aquaculture Research Forum
SAMS Scottish Association for Marine Science
SNH Scottish Natural Heritage
SSC Scottish Salmon Company
SSPO Scottish Salmon Producers’ Organisation
SSF Scottish Sea Farms
SSMG Scottish Shellfish Marketing Group
SSMEI Scottish Sustainable Marine Environment Initiative
SLA Sustainable Livelihoods Approach
CEFAS The Centre for Environment, Fisheries and Aquaculture Science
UHI University of the Highlands and Islands
VCA Value Chain Analysis
WFD Water Framework Directive

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Acknowledgements
Imani and SRSL would like to take this opportunity to thank the many people who have contributed
to this report. The input from stakeholders throughout the aquaculture industry and across Scotland
has been fantastic through the extensive consultation process and we are very grateful to all those
who have kindly given their time as well as information for use in this study. It is impossible to thank
all those involved, particularly the members of the public who were consulted during surveys,
however we want to note our thanks here to those who have the opportunity to read the resulting
outputs. Our apologies to those we were not able to meet as part of the research process.
Many thanks to Marine Scotland and Highlands and Islands Enterprise for commissioning this piece
of work and for their interest in assessing how this industry is benefitting the people of Scotland,
both now and into the future.

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Contents

1. Research Summary ................................................................................................................ 8
1.1. Introduction and Methodology............................................................................................... 8
1.2. Results ..................................................................................................................................... 8
1.2.1. Towards 2020: Potential Gains ....................................................................................... 9
1.3. Chapter Synopses .................................................................................................................. 11
1.3.1. Section 5: Economic Analysis ........................................................................................ 11
1.3.2. Section 6: Environment & Carbon Footprint ................................................................ 11
1.3.3. Section 7: Sustainable Livelihoods Assessment (SLA) ................................................... 11
1.3.4. Section 8: Economic Geography ................................................................................... 12
1.3.5. Section 9: Sub-Regional Case Studies ........................................................................... 12
1.3.6. Section 10: Industry Value Chain .................................................................................. 12
1.3.7. Section 11: Comparative Industries .............................................................................. 12
1.3.8. Section 12: Discussion – Prospects for Growth ............................................................ 13
1.3.9. Section 13: Key Findings................................................................................................ 13
1.3.10. Section 14: Policy Implications ...................................................................................... 14
1.4. Summary Value Matrix ......................................................................................................... 15
2. Literature Review: State of the Aquaculture Industry ........................................................... 17
2.1. Production ............................................................................................................................. 17
2.2. Markets and Potential Expansion ......................................................................................... 18
2.3. Indirect Benefits .................................................................................................................... 19
2.4. Aquaculture in the Community ............................................................................................. 20
2.5. International Competitiveness .............................................................................................. 21
2.6. Employment .......................................................................................................................... 22
2.7. Public Perception .................................................................................................................. 23
2.8. SWOT Analysis: Aquaculture Industry .................................................................................. 24
3. Existing Policy ..................................................................................................................... 25
3.1. Current Scottish Aquaculture Policy ..................................................................................... 25
3.2. The Existing Legislative Framework ...................................................................................... 26
3.3. Wider Policy Affecting Scottish Aquaculture ........................................................................ 27
3.3.1. Marine Planning in Scotland ......................................................................................... 27
3.3.2. Scottish Nature Conservation MPAs ............................................................................. 31
4. Methodology ...................................................................................................................... 33
4.1. Introduction .......................................................................................................................... 33
4.2. Methodology ......................................................................................................................... 34
4.3. From Value Chain to Sustainability ....................................................................................... 35
4.4. Sustainable Livelihoods Approach ........................................................................................ 36
5. Economic Analysis ............................................................................................................... 38
5.1. Scottish Industrial Context .................................................................................................... 38
5.2. Scottish Government Economic Objectives .......................................................................... 40
5.3. Stimulating the Economy through Productivity Growth ...................................................... 40
5.4. Direct and Indirect Economic Impact .................................................................................... 42
5.4.1. Company Revenues and Tax Contribution .................................................................... 44
5.4.2. Case Study: Aquaculture in the Shetland Economy ...................................................... 45
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5.4.3. Induced Multipliers for Shetland .................................................................................. 47
5.5. Intellectual Capital ................................................................................................................ 48
6. Environment and Carbon Footprint ...................................................................................... 50
6.1. Carbon Footprint ................................................................................................................... 51
6.2. Product Efficiency ................................................................................................................. 51
6.3. Consumers and the Environment ......................................................................................... 52
6.3.1. Consumer Attitudes to Feed Sustainability .................................................................. 52
6.3.2. Environment and Zoning ............................................................................................... 53
7. Sustainable Livelihoods Assessment (SLA) ............................................................................ 55
7.1. Survey Results and Demographics ........................................................................................ 55
7.2. SLA Findings .......................................................................................................................... 57
7.2.1. Quantitative Analysis .................................................................................................... 57
7.2.2. Qualitative Analysis ....................................................................................................... 59
7.2.3. Human Capital ............................................................................................................... 61
7.2.4. Financial Capital ............................................................................................................ 64
7.2.5. Social Capital ................................................................................................................. 68
7.2.6. Physical Capital ............................................................................................................. 71
7.2.7. Environmental Capital ................................................................................................... 74
7.3. Most Significant Change ....................................................................................................... 77
8. Economic Geography ........................................................................................................... 80
8.1. Highlands and Islands Region ............................................................................................... 81
8.2. Aquaculture Contribution to Rural Service Provision ........................................................... 82
8.3. Central Belt (and North East) Impact .................................................................................... 84
8.4. Shetland: Typifying Aquaculture Impacts for Scotland’s Growth ......................................... 85
8.5. Industry Concentration & Ownership ................................................................................... 86
8.5.1. Ownership of Scottish Salmon Production ................................................................... 88
8.5.2. Small Scale Salmon Producers ...................................................................................... 89
8.5.3. Mussel Industry Structure ............................................................................................. 89
8.6. Value Matrix .......................................................................................................................... 90
9. Sub-regional Case Studies .................................................................................................... 95
9.1. Skye ....................................................................................................................................... 95
9.2. Western Isles ......................................................................................................................... 97
9.3. Shetland ................................................................................................................................ 99
9.4. Argyll ................................................................................................................................... 101
10. Industry Value Chains ........................................................................................................ 103
10.1. Finfish .................................................................................................................................. 104
10.1.1. Salmon ........................................................................................................................ 104
10.1.2. Other Finfish ................................................................................................................ 113
10.2. Shellfish ............................................................................................................................... 115
10.2.1. Mussels ....................................................................................................................... 116
10.2.2. Other Shellfish ............................................................................................................. 120
10.3. Integrated and Niche Supply Chains ................................................................................... 121
10.3.1. Integrated Supply Chains ............................................................................................ 121
10.3.2. Integrated Multi-Trophic Aquaculture (IMTA) ............................................................ 121
10.3.3. Seaweed ...................................................................................................................... 122
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11. Comparative Industries ..................................................................................................... 123
10.1 Energy Resources ................................................................................................................ 123
10.1.1 Renewables ................................................................................................................. 123
10.1.2 Oil and Gas .................................................................................................................. 125
10.2 Tourism ............................................................................................................................... 125
10.3 Agriculture .......................................................................................................................... 127
10.4 Forestry ............................................................................................................................... 128
10.5 Recreational Fisheries ......................................................................................................... 128
10.6 Capture Fisheries ................................................................................................................ 130
10.7 Norwegian Aquaculture ...................................................................................................... 131
12. Discussion - Prospects for Future Growth ........................................................................... 134
12.1. Barriers to Growth .............................................................................................................. 134
12.2. Potential Areas for Development ....................................................................................... 135
12.3. Global Production ............................................................................................................... 137
12.4. Usefulness of Growth Targets ............................................................................................. 138
12.4.1. Finfish .......................................................................................................................... 141
12.4.2. Shellfish ....................................................................................................................... 141
13. Key Findings ...................................................................................................................... 143
13.1. Summary ............................................................................................................................. 143
13.2. The Benefits ........................................................................................................................ 143
13.3. Importance of Key Findings ................................................................................................ 144
14. Policy Implications ............................................................................................................ 147
14.1. Local (Council) Level ............................................................................................................ 147
14.2. National Level ..................................................................................................................... 148
14.3. EU Level ............................................................................................................................... 150
15. Annex ............................................................................................................................... 153
15.1. Questionnaire ..................................................................................................................... 153
15.2. Interview Topic Guide ......................................................................................................... 154
15.3. Publicity Materials Used ..................................................................................................... 156
16. References ........................................................................................................................ 157

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1. RESEARCH SUMMARY
1.1. INTRODUCTION AND METHODOLOGY
Scottish aquaculture production is a pillar of rural industry in Scotland, and provides considerable
benefit for fragile economic areas. Further, through its supply chain providing demand for feed,
research, engineering, and downstream logistics and processing opportunities, it provides
employment and revenue for a diverse range of sectors throughout Scotland. This assessment,
commissioned by Marine Scotland and Highlands and Islands Enterprise between July-December
2013, describes these benefits through the industry’s economic contribution including social,
environmental, human, financial and physical capital.
Analysis was split into four work packages: a macro-level industry assessment; a Market Systems
Approach analysing the whole market; a Sustainable Livelihoods Approach using a combination of
interviews and questionnaires to investigate sustainability and benefits to communities; and a Value
Matrix to summarise all available benefits provided by the aquaculture industry.
1.2. RESULTS
Results based on 2012 outputs suggest that:
 The aquaculture industry:
o From direct production alone, contributes turnover for Scotland of at least £550m,
with a GVA (primarily the added value of salaries and profit) of £165.8m, and over
2,800 jobs: though its wealth generation goes far beyond this value.
o Across the Scottish supply chain stemming from Scottish aquaculture sites, it
generates over 4,800 jobs in total, £800m in revenue and £270m of added value
across all suppliers, farm production, processing and into retail.
o Generates for the UK economy at least £1bn in turnover across the UK, including
Grimsby processing and national retailing.
o Taking into account the catalytic effect of that added income across the economy,
it is estimated to contribute as much as £1.4bn turnover and 8,000 jobs to Scotland,
and £1.8bn turnover and 8,800 jobs to the whole UK.
 Economic geography is a key concept which frames the impact of aquaculture in Scotland;
although aquaculture provides sustainable employment and income generation in remote
areas that may otherwise lack alternative economic options, it also has a substantial impact
on jobs in other parts of Scotland such as the Central Belt and this ‘other half’ remains
largely unrecognised.
 In terms of the benefits of aquaculture to Scottish communities, human capital in terms of
participation in employment, as well as the skills and experience which provide ‘employment
security’ was found to be most important, with financial benefit in terms of income to local
ancillary businesses (particularly transport and tourism) the second most important.
Negative opinions were generally low and most often related to environmental impact.
 Stakeholders and the public largely believed that growth of the aquaculture sector would be
beneficial to Scotland as long as that growth was an organic process. Should the industry
achieve the 2020 targets (set out in the Scottish Marine Plan consultation) to increase
marine finfish production sustainably to 210,000 tonnes and shellfish to 13,000 tonnes, the
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industry and supply chain could directly be worth over £1.1 billion with a GVA of £345m, and
provide 7,000 jobs for Scotland.

1.2.1. TOWARDS 2020: POTENTIAL GAINS
Should Scotland achieve its aspirations in growth towards 2020, the economic value based on
current projections would be as follows:
MARINE FINFISH SHELLFISH
2012i 2012
Production 164,380 Production 6,525
Turnover (production Turnover (production
£550m £8.7m
only) only)
Employment (production Employment (production
1,118 358
only) only)
Turnover across Scottish Turnover across Scottish
supply chain including supply chain including
Over £800m £20m
processing and other processing and other
suppliers suppliers
Employment across Over 4,000 Employment across Over 500
Scottish supply chain employees Scottish supply chain employees
GVA across Scottish GVA across Scottish
£265m Over £5m
supply chain supply chain
2020 PROJECTION 2020 PROJECTION
Production Target 210,000 Production Target 13,000
Turnover (production Turnover (production
£771m £17.3m
only) only)
Employment (production Employment (production
1,447 713
only) only)
Turnover across Scottish Turnover across Scottish
supply chain including supply chain including
Est. £1.1bn £40m
processing and other processing and other
suppliers suppliers
Employment across Over 7,000 Employment across ~1,000
Scottish supply chain employees Scottish supply chain employees
GVA across Scottish GVA across Scottish
£345m £10-15m
supply chain supply chain
Full Benefit by 2020 of Scottish Aquaculture including growth stimulated in
the wider economy (estimated):
To Scotland: est. £2bn, over 10,000 jobs (full and part time)
To UK: est. 2.5bn, over 11,000 jobs (full and part time)

i Finfish production tonnage and production-only employment includes (in addition to salmon) rainbow trout produced in the marine
environment (2,076t) plus small volumes of halibut and sea trout.
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