Developing a new spirit of partnership in the fisheries sector.

With the crisis affecting the whitefish sector in the North Sea and the prospect that up to 40,000 jobs could be lost in Scotland’s traditional fishing communities, many people had looked to the aquaculture industry for salvation. As stocks of wild fish collapse around the world due to over fishing, pollution and global warming, it was hoped that the burgeoning world-wide fish-farming sector would absorb jobs displaced from the marine fishery. Sadly, in the case of Scotland, such hopes are misplaced.

Scotland’s fish farmers are in retreat. The salmon farming industry in particular is in critical condition. A devastating slump of 32% in wholesale salmon prices last year has pushed many businesses to the brink of bankruptcy. Even though salmon prices have begun to recover, production is being wound down, companies are closing and jobs are being lost. Salmon farmers blame unfair competition. They say that Norway, the Faeroes and Chile were all guilty of dumping over-produced salmon into the EU, causing the price collapse. They accuse Chile alone of dumping 60,000 tonnes of frozen salmon fillets onto the European market. They are appalled that the European Commission has now decided to abandon their inquiry into the dumping allegations and they fear that further similar behaviour will inevitably bring the EU aquaculture sector to its knees.

Struan Stevenson meeting the Chilean President

It was against this background that I led a delegation of MEP’s from the Fisheries Committee on a visit to Chile, at the invitation of the Chilean Government. Although one Chilean tabloid claimed that I was a “Euro Godfather out to spy on Chile’s fish farmers”, in fact we were seeking solutions to the dumping issue and a better business relationship for the future. We learned a lot. From top to bottom, Chile has 6,435 kms of coast. But in the endless channels of the Patagonian archipelago, the coasts of the many thousands of islands extend to more than 55,000 kms. The water temperature and quality, together with the availability of fishmeal, make this the ideal place for fish farming. The Chileans have not been slow to exploit these opportunities.

Faced with the familiar problem of declining marine fish stocks, the Chilean Government introduced radical reforms limiting some of their fishermen to only 3 days fishing per month and ordering 87 of their giant trawlers to be laid up in dry dock to await the day when stocks recover. Not for them the de-commissioning schemes so popular with the Scottish Executive, where our boats are being irretrievably destroyed. The marine catch in Chile, which exceeded 8 million tonnes in 1994, fell to just 3.6 million tonnes in 2002. Jobs in the industry nose-dived from 13,500 in 1997 to only 8,800 today. Stakeholder involvement through new zonal Fisheries Councils and a tough regulatory regime seem to be helping marine stocks to recover. There are valuable lessons for the EU to learn in Chile as we implement our own reforms to the CFP.

However, the Chileans have turned to aquaculture as a major job generator for their remote coastal communities. Salmon exports alone now attract over $1 billion of foreign exchange into Chile every year. Chile is the world’s largest trout producer and second largest salmon producer after Norway. Scotland is in an increasingly vulnerable third place. Despite the dumping allegations, Chile exports only 6% of its salmon to the EU. Their biggest market by far is the US (43%) with Japan (41%) not far behind. Only around 5% of Chilean salmon are consumed within Latin America.

In a bid to avoid trade wars with other salmon producing countries, the Chilean Government has now signed a ‘Biomass Project’ agreement with Norway, which enables the world’s two largest aquaculture producers to monitor the total number of living fish on a species by species and stage by stage basis. Such co-operation will help to avoid sudden gluts of fish coming onto the international market at any given time causing disastrous price fluctuations. It would be extremely valuable for the UK and Irish governments to join this project. Scottish and Irish fish farms could then take good marketing decisions based on accurate monthly biomass appraisals available on the internet.

However, the Chileans are not prepared to rest on the laurels of their massively successful salmon and trout sector. While slamming the door firmly on the introduction of transgenic (genetically modified) fish, major research is underway to develop new species for the future. Ground-breaking work into the farming of hake and sea bass is being pursued in experimental research stations such as the one run by a team of young scientists from Fundación Chile in Lugar, Quillaipe. The Chilean Government in partnership with the private sector has seen the value of investing heavily in such research. What a contrast with Scotland, where in a bid to save a paltry £600,000 per year, Seafish – the government backed Sea Fish Industry Authority – has just announced its decision to close the Ardtoe Marine Farming Unit on the Ardnamurchan peninsula, despite the cutting edge research carried out there into the development of marine species aquaculture.

In order to avoid this calamity for the Scottish aquaculture industry, I now intend to explore the possibility of a joint application for funding from the EU’s 6th Framework Research Programme for a project linking the work being done at the Fundación Chile Research Centre at Lugar, Quillaipe and the Ardtoe Marine Farming Unit in Scotland. There is £11 billion available for research in the EU’s latest programme, which was launched in January this year. A project involving the development of biotechnology for health, new production processes and sustainable development would fit neatly with the 6th Framework Programme’s objectives.

Some industry pundits have said that with cod stocks facing almost total collapse in the North Sea, we may have to rely on the fish-farming sector to meet rising consumer demand. Annual output of 200,000 tonnes of farmed cod by 2010 and even a staggering 700,000 tonnes by 2015, have been predicted by experts. It is only by investing in key research into the fledgling, farmed cod industry that this future can be secured. Cod farmers must be shown how to reduce the cost of production and how to overcome the costly bottleneck of marine fish hatcheries, if this dream is to become a reality. This is the sort of research that could be conducted jointly between Chile and Scotland under an EU-funded project.

Of course high production costs are a major obstacle to the competitiveness of Scottish farmed salmon too. Chilean salmon mature more quickly in the ideal geographical conditions of Patagonia and are therefore ready to be marketed more quickly. Wages are much lower in Chile and there is a readily available source of fishmeal and fish oil, the basic nutritious feed ingredients that farmed salmon require. Indeed, Chile is currently one of the world’s largest exporters of fishmeal, producing over 870,000 tonnes in 2002 from large catches of anchovy, sardines and jack mackerel. The UK salmon and trout industry imports a massive 70,000 tonnes of fishmeal a year from Peru, while we buy only 13,000 tonnes from neighbouring Chile. I pointed out to our Chilean hosts that our fish farmers may be more inclined to buy Chilean fishmeal if we were not faced with the threat of renewed dumping. I said that, in any case, the Chileans were simply destroying a potential market for their fishmeal if they forced Scottish salmon farms into bankruptcy. To develop a more co-operative strategy I have now invited leaders of the Chilean fishmeal sector to a special Hearing on the future of the industry, which will be held in Brussels on April 23rd. Felipe Zandoval, the Under-Secretary for Fisheries in the Chilean Government will also attend.

The new EU-Chile Association Agreement signed in November last year, is the most far-reaching and groundbreaking agreement ever concluded between the EU and any third country. By paving the way for extensive political, economic and research co-operation and by lifting tariff barriers well beyond WTO requirements, the agreement has opened up enormous new opportunities for partnership and trade.

Our visit to Chile ended on a high note with the signing of a Joint Parliamentary Declaration between the Fisheries Committee of the Chamber of Deputies of Chile and the Fisheries Committee of the European Parliament. In this communiqué we set out the framework for future dialogue and communication to enhance the development of fisheries in the EU and Chile in a sustainable way. The salmon-dumping dossier has been closed and we must now seize this opportunity to open a new chapter in EU-Chile relations. As one leading Chilean salmon farmer concluded, we must not only seek to establish trust and faith from our consumers, but also trust and faith in each other.

Struan Stevenson MEP
President of the Fisheries Committee of the European Parliament