Fish - additional quota allocation 2021: consultation

5. Allocation of Additional Quota for 2021

Below we set out proposed options for distributing Additional Quota in 2021.  The eventual methodology could be one of the options or a combination of two or more. 

In paragraph 2.5 above, we set out that Additional Quota may arise from (i) a change in the UK’s share of quota as a result of being an independent Coastal State and/or (ii) yearly transfers of quota from other Coastal States to the UK. Marine Scotland may choose to allocate the quota arising from these two different sources of quota separately.

5.1 Option 1: Track Record (history of landings)

One of the most common ways of allocating fishing opportunities is to allocate based on a demonstrable record of activity in the fishery/fisheries. For example, the FQA system is based on historical fishing activity of vessels during the fixed period 1994-96.  

The track record approach would base Additional Quota allocations on average landings by vessels over a certain period of time for each fish stock. In other words, for each fish stock for which there is Additional Quota to allocate, the share of Additional Quota that a vessel receives would be based on the vessel’s demonstrable track record of landings of that stock for the identified period.  

Basing allocation of Additional Quota on the track record of vessels over a recent period would increase allocations to vessels that have targeted those quota species in the recent past. This would take account of quota adaptations in the course of recent quota management years where licence holders have acquired or transferred additional fishing opportunities through quota trading (swaps with other licence holders, leasing or otherwise). 

Allocating Additional Quota on the basis of recent track records of active vessels therefore has the potential of reducing costs for active fishing businesses as they would receive the Additional Quota directly, potentially reducing the requirement to acquire quota from FQA holding businesses. It would also take into consideration the capacity and capability of vessels to fish for the relevant species.  

The use of a track record-based approach could, however, be seen as not recognising those vessels that were unable to access certain quota stocks in the past, and were therefore unable to build a track record, due to barriers such as lease or other costs.

For the purposes of 2021, under this track record-based option, we propose to use the five year track record period 2015-2019.  So, a vessel’s average history of demonstrable landing during that time period for each quota stock would determine the percentage share of any Additional Quota for 2021 to be allocated to that vessel. We believe that a five year track record would be fairer than a shorter track record period as it takes better account of yearly changes in fishing activity (for example, a vessel may not have been active in the fishery for one year, or the fishing activity for vessels may vary year on year).  

There are alternative track record periods that could be used: a three year track record (2017-2019) or an eight year track record (2013-2019).  

A three year track record (2017-2019) would take better account of fishing activity by vessels in recent years. However, the shorter the reference period is, the more it would proportionally reduce the allocation of Additional Quota to vessels which were not able to fish for a period of time during those years. 

An eight year track record (2013-2019) may provide fairer average landing figures for some vessels, but it may not achieve the aim of supporting the active fishing fleet to the same degree - as fishing activity at the start of the period may have changed considerably towards the end of the reference period.

Question 1 – What are your views on the use of recent track record as a basis for allocating Additional Quota in 2021?

Question 2 – Do you think the track record period should be 2015-2019 (Marine Scotland’s preferred option)?

Question 3 – Do you think the track record period should be 2017-2019?

Question 4 – Do you think the track record period should be 2013-2019? 

5.2 Option 2: Allocating Additional Quota to Non-Sector Vessels 

Though the vast majority of quota is currently allocated via FQA holdings associated with individual licences, Marine Scotland (and other UK Fisheries Administrations) does allocate a proportion of quota outside of the FQA system for use by non-sector vessels.  

Non-sector vessels are vessels which operate outside a Fish Producer Organisation or a Scottish Quota Management Group (so-called Sectoral Groups). They are (i) Scottish registered vessels in the 10 metre and under pool; and (ii) Scottish registered vessels in the over 10 metre pool. The vessels from these two pools primarily target shellfish though opportunities for demersal and pelagic species are made available.

For example, currently Marine Scotland annually allocates 50 tonnes of North Sea cod to the 10 metre and under pool (over and above the amount that the 10 metre and under pool would get based on the FQA system). The 50 tonnes (which Marine Scotland routinely seeks to increase by engaging in quota swaps) offers the opportunity for smaller vessels to diversify away from shellfish and reduce the pressure on these stocks.  

The same applies for mackerel where each year Marine Scotland allocates mackerel quota outside the FQA system (to be caught by handline) to the 10 metre and under pool for specified areas (see section 2.7 of the Scottish Quota Management Rules). Throughout the quota management year, if Marine Scotland predicts that 10 metre and under vessels are unlikely to catch the quota stocks allocated through this method before the end of the year, we would routinely reallocate the quota to Sectoral Groups to ensure this fishing opportunity is taken up.  

An option is for Marine Scotland to retain a proportion of Additional Quota for certain stocks for 2021 and to work with the fishing industry to allocate these fishing opportunities to non-sector vessels meeting certain criteria. The proposed criteria are:

• Capacity and capability to catch the quota in 2021.
• Availability of market for the catch of Additional Quota when landed.
• The allocation of Additional Quota to the non-sector vessel would incentivise good practice (for example a reduced environmental impact through method of capture (such as through the use of lines)).
• Ability for the non-sector vessel to diversify their fishery. 

The stocks and quantity of quota to be retained by Marine Scotland would depend on the additional fishing opportunities that the UK can secure for 2021.  

The allocation of a relatively small amount of quota to the 10 metre and under sector helps to increase the number of fishers able to benefit from the fishing opportunities. The handline mackerel and cod examples highlighted above have spread the socio-economic benefit of Scotland’s allocation for these stocks.

To illustrate this: in 2019, 329 under 10 metre vessels recorded landings of 1258 tonnes of mackerel and for North Sea cod 151 tonnes of cod were caught by 91 vessels.  

A disadvantage of allocating quota to the 10 metre and under sector is that vessels may not have the necessary equipment, knowledge or inclination to fish for new fish stocks.  

Question 5 - What are your views on retaining a proportion of Additional Quota for allocation to non-sector vessels subject to the proposed criteria?

Question 6 – Which quota stocks would, in your view, be most suitable to be allocated to non-sector vessels through this method and why? 

5.3 Option 3: Allocate via FQA units

One option would be to allocate some or all of the Additional Quota for 2021 using the existing system of FQA units. Marine Scotland has set out its intention to allocate Additional Quota in a different way to the current system. However, we wish to hear your views on allocating in this manner for 2021.

FQA units are an abstract unit of measurement used as an administrative tool.  They represent historic fishing activity by a British fishing vessel, based on historic catches – for most stocks this is the period from 1994 to 1996.  FQA units themselves do not remain permanently associated with a particular vessel / licence.  Since 1999, UK Fisheries Administrations have permitted transfers of FQA units between licences in certain circumstances. It is also possible for FQA units to be associated with persons other than those with an active licence and fishing vessel. Allocation through this option would be on the basis of FQA units officially associated with licences issued by Scottish Ministers at the beginning of each year thus taking account of movements of FQA units between vessels. Allocating Additional Quota based on this method thus means that those who hold more FQA units would benefit more from Additional Quota.

Though quota is allocated each year based on FQA holdings, the quota arising from FQA holdings may end up being fished by vessels distinct from those initially benefiting from the allocation. Each year there are routinely over two thousand UK swaps between those who hold fishing opportunities and those who wish to gain (additional) access to fishing opportunities. 

The main advantage for allocating Additional Quota via the FQA system for 2021 is the stability of the system which the fishing industry has adapted to over the past two decades. It would also reflect the investment made in FQA units.

Allocating via the FQA mechanism would benefit those that hold FQA units - not necessarily active fishers. Seventeen percent of Scottish FQA units are not directly attributable to licences of active fishing vessels and, as noted above, each year there are thousands of swaps of quota between those holding quota and those seeking to obtain quota.  Therefore, allocating Additional Quota via FQA units would not necessarily directly benefit active fishers only and it would continue the imbalances in the current system. This method of allocation would also limit the potential for diversification of fishing opportunities or new entrants into a fishery due to costs associated with obtaining quota on the market.

Question 7 – What are your views on using FQA holdings as a basis for allocating Additional Quota for 2021? 

5.4 Other Allocation Options

Set out above are our proposed allocation options of Additional Quota for 2021.  We have, however, considered a range of other options to allocate Additional Quota, including:  

• The geographical location of stocks (allocation based on where stocks are located). 
• Developing a system where industry could apply to Marine Scotland with a proposal in order to be awarded Additional Quota.
• How Additional Quota could be used to help deal with the consequences of the landings obligation, for example in relation to retention of unwanted catch and choke species.
• Linking the allocation of Additional Quota to benefits accruing to the local economy (for example, linking the allocation of Additional Quota to landings into Scottish ports).
• Vessel capacity (for example using engine power or gross vessel tonnage). 
• A hybrid approach based on combination of above.

Given the current uncertainty, our intention is to review methods for allocating Additional Quota and consult on options in the second half of 2021, for allocations in 2022 and beyond.

Question 8 – What are your views on alternative options for allocating Additional Quota?

The future allocation methods will be guided by the principles set out in the Future of Fisheries Management work and the allocation criteria contained in the Fisheries Act 2020. For example, we will seek to develop options to allocate Additional Quota to:

• Incentivise fishing methods which reduce environmental impact.
• Broaden the societal benefits by distributing fishing opportunities more widely.
• Maximise economic returns to the local economy through, for example, linking the allocation of Additional Quota to landings into Scottish ports.