An Assessment of the Conditions Affecting Entry into the Scottish Fishing Industry and Potential Policy Responses

6. Conclusions

There is a presumption in government ( e.g. HM Treasury Green Book, Scottish Government Economic Strategy ) that the market mechanism should be left to function freely unless there is some identified market failure or distributional objective to which government intervention can be effectively applied (ref-document). This report has highlighted that barriers do exist that make it hard for new, young fishermen to enter the industry. However, from the current evidence it can be concluded that public intervention beyond the status quo of providing information and training is not justified at this time. The barriers that may prohibit entry into the Scottish fishing industry are structural rather than strategic and do not represent instances of market failure.

Moreover groups of private individuals (most often POs, fishermen's associations, the wider industry and local authorities) are already working in a productive capacity to correct and mitigate some of the barriers to new entry, therefore government intervention is believed to be unwarranted. This is witnessed in the Shetland PO, the Orkney PO and the SFO's arrangements that ring-fence quota for new entrants. The different partnerships in the Western Isles - between the industry, local Council and local banks and the processing industry and local communities - illustrates that there exist several models that can be taken on by the industry and communities to support and develop the business plans of young fishermen and contribute towards initial capital start-up costs. While there is a distinct lack of concurrent programmes in the North-East of Scotland, this is reportedly due to a lack of demand for such services amongst the domestic labour force on account of the relatively uncompetitive working conditions offered by the industry. In relation to potential policies that presuppose additional government involvement in facilitating new entry such as the administered redistribution of quota, it is evident that the feasibility and acceptability of these mechanisms are undermined by issues of inefficiency, equity and unintended consequences (such as an increase in the market price of quota). Moreover, a strong theme coming out of the industry engagements was that government intervention in terms of redistributing quota to new entrants is unwanted. It was conveyed that any mechanism of this sort should be administered by the POs along the lines of the Shetland model. Given that quota would be deducted from existing fishers, it is natural they would want maximum control over the decision-making processes involved. A key role for Government intervention in this situation appears to be in correcting some minor information failures, for instance to promote information and advice on retirement, to facilitate contact between retirees and potential entrants and a new active role could be for the collection and dissemination of information and best-practices concerning the community and industry led programmes that have facilitate new ownership. The construction and design of similar programmes around the country could be promoted and facilitate by Government engagements with local associations and communities. Representatives of all the schemes spoken to commented they would be happy to share project development and advice with interested parties.

In addition, Government policies should continue to support and promote the wider social objectives of providing access to education and training for those interested. It is the view of the industry that this should be the principle role for Government. A concern of the industry is that the future of several schemes that receive financial assistance to promote training and qualifications are in danger as government funding is coming to an end. One suggestion from the industry was an extension of government funding of the FITA 3-week training course as this is soon to expire. This course has been identified as a positive mechanism for helping young fishers gain the necessary skills and qualifications for entering the industry. A positive policy response would be to support the continued work of programmes such as the FITA and Scalloway NAFC Marine Centre, rather than invest in start-ups schemes that carry higher risk.

In terms of what the industry wants from the government in tackling this issue, the continuation of Scottish government policies financing training, the Apprenticeship scheme and the various sources of EFF and Seafish funding are all welcome. In terms of policy change, the main theme coming from the industry is for a political commitment from the Government towards the future of the industry and for continued progress in alleviating the industry's problems. One association commented that before money is poured into the industry to encourage new entrants, the problems facing the industry should first be addressed; otherwise those entering the industry would be faced with hardship. A common theme was that to encourage enthusiasm amongst young, potential fishers exists within communities; the industry has to present itself as a more attractive package to this demographic. As discussed, a practical long-run option would be to facilitate changes in how quota is managed to make the transfer of quota more efficient and to help improve the wages and job security the industry can offer by making the industry more profitable. This would, however, require a political value judgment as it likely that these mechanisms could run counter to wider social objectives of fisheries policy.

Bibliography

ADAS Consulting Lts. Entry to and Exit from Farming in the United Kingdom. Prepared for Defra, June 2004.Aldin, V., D. James, and J. Wadsworth. "The Changing Shares of Migrant Labour in Different Sectors and Occupations in the UK Economy: an Overview." In Who Needs Migrant Workers? Labour Shortages, Immigration, and Public Policy" edited by Martin Ruhs and Bridget Anderson. Oxford: OUP, 2010

Bergin, A., and M.G. Haward. Japan's Tuna Fishing Industry: A Setting Sun or New Dawn? Nova Science Publishers: New York, 1996.

Chan, P., L. Clarke, and A. Dainty. "The Dynamics of Migrant Employment in Construction: Can Supply of Skilled Labour ever Match Demand?" Chap. 7 in Who Needs Migrant Workers? Labour Shortages, Immigration and Public Policy, edited by Martin Ruhs and Bridget Anderson. Oxford: Oxford University Press, 2010.

Crutchifeld, J.F., "Economic and Social Implications of the Main Policy Alternatives for Controlling Fishing Effort ", Journal of Fisheries Research Board of Canada 36/7 (1979):742-752.

Cox, A. "Quota Allocation in International Fisheries", OECD Food, Agriculture and Fisheries Papers. OECD: Paris, 2009.

Eurostat. Employment rates for selected population groups, 2001-2011. EC, 2012. Available: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Employment_rates_for_selected_population_groups,_2001-2011_(%25).png&filetimestamp=20121030183007

General Accounting Office. Individual Fishing Quotas: Methods for Community Protection and New Entry Require Periodic Evaluation. US GAO, Washington, D.C., 2004.

Goodland, John. "Industry Perspective on Rights-based Management: The Shetland Experience" in R. Shotten eds., The Use of Property Rights in Fisheries Management. FAO Fisheries Technical Paper 404/1, FAO: Rome, 2000.

Institute for Regional and Rural Research. Regional Research Framework- Position Paper No.2, Critical Issues Facing Rural Regions. University of Ballarat, 2004. Available: Department of Employment, Valuing Australia’s Older Workers’ Government of Australia, 2004.

Jones (2013) The Impact of Sea Fishing on Social Well-being in Scottish Fishing Communities: Report for the Marine Analytical Unit, Marine Scotland. Avaliable : http://www.scotland.gov.uk/Topics/marine/science/mau/ImpactSeaFishingCommunities

Kahneman, D., J. Knetsch and R.H. Thaler, "Experimental Tests of the Endowment Effect

and the Coase Theorem", Quarterly Journal of Economics 98 (1990): 1235-48.

Marine Analytical Unit, Marine Scotland Science. 2013 Socio-Economic Fleet Survey (not published).

Marine Analytical Unit, Marine Scotland Science. " Analysis of Overcapacity in the Scottish Fishing Fleet: An assessment of the balance between fishing capacity and fishing opportunity for the fleet", September 2013.

Mackay and Mackay Consultants. An Appraisal of the Options for the Allocation of Fishing Opportunities in Scotland. Draft report for Marine Scotland, January 2014.

Maloney, R., and P. Pearse. A quantitative method of managing fisheries. Journal of Fisheries Research Board of Canada 36 (1979): 859-866.

National Oceanographic and Atmospheric Administration. Review of the Community Quota Entity ( CQE) Program under the Halibut/Sablefish IFQ Program. March 2012. Available: http://www.npfmc.org/wp-content/PDFdocuments/halibut/CQEreport210.pdf

Office of Fair Trading, Annex C- The effects of public subsidies on compeition, Novemeber 2004. Office of Fair Trading, Public Subsidies, OFT 75, November 2004

Office of National Statistics. Labour Market Statistics, February 2014. London: OHMS, 2014.

Office of National Statistics . Pension Trends: The Labour Market and Retirement. London: OHMS, 2013.

Pintassignlo, P., and C.C.Duarte. "The New-Member Problem I the Cooperative Management of High Seas Fisheries", Marine Resource Economics 15/4 (2000):361-378.

Townsend, R. E., "Entry restrictions in the fishery: a survey of the evidence", Land Economics 66/4 (1990):359-378.

Ward, J. M, and J G Sutinen., "Vessel entry-exit behavior in the Gulf of Mexico shrimp fishery", American Journal of Agricultural Economics 76/ 4 (1994): 916-923.