Aquaculture sector - wider economic impacts: estimates

10. Conclusion

The aquaculture sector makes an important contribution to the Scottish economy. A technologically-intensive sector, Scottish aquaculture supports rural economies.

This study provided up-to date evidence to Marine Scotland over the role played by the Scottish aquaculture sector and its subsectors - salmon production, other finfish production, shellfish and aquaculture processing - on the Scottish economy. It considered both the sector’s economic contribution and broader trends within the industry.

The quantitative analysis found that in 2018 the aquaculture sector directly employed 6,260 people across Scotland and contributed around £468 million direct Gross Value Added (GVA). These impacts can be exclusively attributed to the sector. As a result, when referring to the direct contribution that the aquaculture sector makes to Scottish Gross Domestic Product (GDP), this is the figure which should be referenced. In total the sector contributed around £885 million GVA and 11,700 jobs across Scotland. In 2018 this included supply-chain and induced impacts. These are impacts associated with, rather than the direct product of, the aquaculture sector. They include purchases down its supply-chain as well as the spending of people employed in the sector. Counting indirect and induced impacts for each industry across the economy would lead to double-counting and an overestimate of GDP. The inclusion of these impacts is justified as they provide evidence to the wider impacts the sector has through its activities. Scottish aquaculture also contributed £97 million to public finances through taxes, including Corporation Tax, Income Tax and National Insurance contributions.

The analysis found that the scale of impact varied depending on the aquaculture subsector considered. Overall, the contribution from salmon production and aquaculture processing were the largest.

Fish products tend to be lower carbon emitters than other protein-based food products. As a result, they are likely to form an increasing share of protein consumption in the future by more environmentally conscious consumers. The increase in demand may translate in the growth of the sector and be favoured by the consolidation taking place across the sector. Action may, however, be required to address structural limits to an expansion of the sector’s supply, including in the planning system and the availability of new sites. The processing sector’s growth may be affected by the availability of EEA workforce decline as a result of post-Brexit changes in the immigration system.

Alongside differences in the economic impact made by each subsector, qualitative differences emerged across finfish, shellfish and processing. Differences within the production of salmon and the production of other finfish products are less sizable.

Finfish and, in particular, the production of salmon, are capital-intensive activities. Technology has over time been deployed extensively in areas including animal health as well as the monitoring of fish development. However, the high level of technology and technology adoption has not come to the detriment of employment but has supported relatively high skilled jobs, which have benefitted their workforce with relatively high wages. Within the sector, processing of aquaculture remains a labour-intensive activity and pays on average lower salaries than finfish production. The shellfish sector in Scotland takes the form of a part-time activity.

The aquaculture sector and, in particular salmon production, make an important contribution to the Scottish economy through spending on supplies. Supply chain expenditure constitutes a large opportunity for the Scottish economy. In 2018 salmon production contributed considerably to purchases of goods and services from Scotland. In particular, feed, the main variable costs in this subsector, is mostly sourced from Scotland. On the contrary, capital expenditure and, in particular, expenditure on machinery occurs mostly outside Scotland, in the Nordic countries, Iceland and Denmark.

Finally, the aquaculture sector makes an important contribution to the local economies in Scotland where it operates. The production of finfish and shellfish takes place in rural economies with a declining and relatively older population. To retain their workforce producers have put resources in making the local economies attractive and in contributing to a strong community life. These efforts are exemplified by some of the salmon producing companies having community benefits funds.