Rural Economy and Connectivity Committee

Meeting date: Wednesday, May 2, 2018

Official Report 647KB pdf

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Salmon Farming

Item 3 is our salmon farming inquiry. I remind everyone to ensure that their mobile phones are on silent. I invite members to declare any relevant interests. I will start that off by saying that I have an interest in a wild salmon fishery. I see that no one else wishes to make a declaration.

This is our fifth evidence session on the committee’s salmon farming inquiry. The committee will take evidence today from representatives of the aquaculture industry. Hopefully, I have everyone in the right order. Scott Landsburgh is the former chief executive of the Scottish Salmon Producers Organisation; Ben Hadfield is the managing director of Marine Harvest Scotland; Craig Anderson is the chief executive of the Scottish Salmon Company; Grant Cumming is managing director of Grieg Seafood Shetland; and Stewart Graham is group managing director of Gael Force.

I will not repeat the mistake of saying to people who have been here before that they will know exactly how these arrangements work. If you want to come in on a question, you should try to catch my eye. There are five of you, and you might not all get to answer all the questions. Once you have caught my eye and I have brought you in, you do not need to touch any of the buttons on the microphones—that will all be done for you. If you see me waving my pen, that means that your time is nearly up; if I wave it more furiously, that means your time is really up. I will not tell you what happens if you ignore that. The aim is to get a balance of questions and answers, so I would be very grateful if you could help me to achieve that. There will be a lot of questions as we go through today’s evidence session.

The first question is from Stewart Stevenson.

My colleague Richard Lyle and I, together with other members of the Environment, Climate Change and Land Reform Committee, have reported on many of the environmental issues around salmon farming, but this committee, as well as wanting to consider that again, wishes to consider wider economic issues. It is on that subject that I want to ask a few questions. In particular, based on last week’s evidence from Highlands and Islands Enterprise, for example, what benefits are there to communities, and the people in those communities, from being adjacent to salmon farming?

Who would like to start on that?

No—what you are doing does not work: you should not all look away when the question is asked. You have to help me. Ben Hadfield can start.

Good morning, and thank you for the opportunity to speak at the committee today. The economic benefits for local communities are significant. The wage bill for my company, Marine Harvest, is £47 million per year. We employ 1,250 people, approximately 700 of whom are based on the west coast, in Lewis, Harris, Barra and elsewhere. Interestingly, over time, the role of people within the farms has become much more complex. It used to be a job with a farm manager and farm hands; now it has become more technical, and we are employing a lot of scientists, veterinarians, people with information technology skills and so on. The wage structure reflects that.

I am English, but I have lived in Scotland for 18 years. Having lived on the west coast, we can see how important it is that people there can have a career and can have good, steady wage progression. That is well received in the areas where we farm.

The Scottish Salmon Company takes its social and economic impact in local communities seriously. We support local communities, and not just through salary, although that is very important. Our annual salary is around £16 million, with £1.5 million in national insurance contributions and £700,000 in pension contributions. That is very important, but there is also training, education and otherwise getting involved in local areas. We have third-generation families working with our company, and that is very encouraging. About 25 per cent of our people have been with us for more than 10 years, which is great. To be able to put something back where we take out is important for us.

I want to address something to Scott Landsburgh. Technically, although you are the former chief executive, you are nonetheless still representing the SSPO today.

I am indeed.

Thank you for that.

The SSPO’s community engagement charter is designed to benefit communities. How is that going to work, and how is it working now?

It is a charter that all our member companies have signed up to. It is a commitment to give the local communities some direct benefit from the yield from the local farm. I can give you the round figure: last year, we contributed about £1 million to local communities through various schemes. Each company has its own scheme, but they are all committed to abiding by the rules of the charter. That was the intention of the charter—to create good practice in community benefit. We looked at several national schemes that are already in place and we are similar to some of the other industries that operate in the remote, rural communities of the Highlands and Islands.

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That is direct support. It is not all financial support—some of it is the giving of time, offering education and support and getting into schools and even nurseries. For example, we bought small minibuses to transport people to community youth facilities. That is on-going and, at this juncture, the industry has a commitment to put in at least £1 million to local communities.

This will be my last question. Who decides what the benefit its? Is it the salmon producers? What role is there for the communities to decide how that benefit is applied?

It is decided at a local level. People are invited and encouraged to bid for support. The companies are in charge of that. One or two of them have independent people involved in the scrutiny of that, so it is not just a question of who you know. The purpose of the charter was to make it an open process.

We have spoken quite a lot in our evidence sessions about expansion of the industry. In Wester Ross, in my constituency, there is a massive housing problem. How can we expand the industry if there are no houses available for the people who you want to recruit to work in fish farms? How are you working with local authorities to try to solve that problem?

I will bring in Ben Hadfield, but I am keen to bring in other panel members, too. Please do not be shy about indicating that you wish to come in.

We need to build more houses. Some of the great projects that we have worked on over the past few years and months, where we have put a new farm into islands, such as Muck or Rum, have included a proposal to build half a dozen houses and a shore base. We hope that we will gradually manage the social implications, move people out and repopulate the islands a bit.

It is a very valid concern. It has been a particular problem for Grieg Seafood. Recently, in Shetland, a new gas terminal was built and that put huge pressure on the housing stock. We had to secure rented accommodation for employees. We farm down in Skye, where it is a long-term problem for us. We have had to purchase properties there. A better, long-term solution is to build more properties because by purchasing we are putting more pressure on the current small amount of housing.

If you are building or buying new houses, are they then tied to your business? I assume that you will require whoever stays in the house to be an employee of yours and, if they leave your employment, they will have to move out of the house. Is that the system that you would put in place?

Yes. The houses are there to provide accommodation for our employees. As much as possible, we have tried to be nice about it: if someone chooses to leave our employment, we have not asked them to get out of the house by the next day but have given them a period of grace. However, we would expect them to move on and make space for our employees in the future.

There are varying methods of approaching that. On some of the islands that belong to a landowner or a trust, the land has been leased for 25 years and we have put in money to build houses that are for our staff and their families to live in. The feed plant that we have put in on Skye has created 55 new jobs, some of which are quite specialist engineering, information technology and manufacturing jobs. We have land available on Skye and have plans to apply for planning permission, build houses and probably sell them to employees after they have spent a period of time working for the company and becoming resident on Skye. There are also partnerships with affordable homes schemes, where we put money in as part of a wider build. That is very interesting to us.

Good morning, panel. I want to take a step back and look at the bigger picture of the international market within which Scotland is operating, which is clearly very competitive. It is probably a rhetorical question to ask how important provenance and high production standards are to the industry; I presume that the answer from each of you would be that they are important. Can I push you further on what the differences are between the export and domestic markets in relation to your product and how you produce it, and ask for your views about how Scottish salmon can stand out distinctively against some of our main competitors, such as Norway, Chile and Canada?

That is a very interesting point. We are already standing out against our main competitors on the global scale. There is a premium for Scottish salmon both in our domestic market and externally. That is because of the provenance—we are growing our salmon in beautiful wild Scotland—and because the regulatory standards in Scotland are very highly regarded internationally. We are seen as having very high standards and delivering a product that reflects that.

Would Stewart Graham like to come in at this stage?

No. I think that it will be more appropriate for me to answer some of your other questions. We have producers here and most of the questions are much more relevant to producers.

Brand Scotland is very important, as is provenance. We have trademarked the phrase “provenance guaranteed”, and also “tartan salmon” specifically for the export market. The story is always, “Is it true that your fish come from Scotland?”, and the answer is, “Yes—we only produce and sell fish that comes from Scotland.” With the quality that Grant Cumming mentioned, the thoroughness of the accreditations that we go through and the pure quality of the salmon, we get a premium price for it.

I will give you some numbers. About 2.1 million or 2.2 million tonnes of salmon is produced worldwide. Norway produces the lion’s share of that at around 1.1 million tonnes, and our volume is about 175,000 million tonnes—Scotland sits third. If we look purely at the cost of buying salmon, there is a premium for Irish salmon, organic salmon and then Scottish Label Rouge production. Most of the companies produce specifically for supermarkets in the domestic market to very high welfare and environmental standards. That is the next price bracket, and there is not really a commodity product with salmon any more. It is a high-value protein but, generally, Scottish salmon trades at about 50p or 60p per kilo over Norwegian salmon. As others have said, that is because it is regarded as being produced in a sustainable way with good regulation to a high quality, so it is quite desirable.

Scott Landsburgh is not going to rest unless I bring him in, but I point out that I cannot bring in everyone on all the questions.

Every three years, at the Brussels seafood show, there is a survey of 14 of the major seafood buyers in the world’s markets. I am now out of it, so I am not sure whether a survey was conducted at the show that took place last week, but in the second survey, in 2016, Scotland received seven votes out of 14 for having the best farmed salmon in the world. Its nearest competitors received two votes—that was Norway and Canada—and the other producing countries received one vote. Those people know what they are doing and what they are buying, which is quality—a seriously premium fish. We have won the best farmed salmon accolade three times running, and we are very proud of that.

We asked retailers in this country to come to the committee and, although they have submitted written evidence, they were indisposed when we requested them to come, sadly.

I just have a wee point, which is probably for Grant Cummings, based on what he said. I can be corrected on this, but is there not an international trade in smolts, which I believe is two-way? If there is, how does that affect the provenance that we rely on to sell products?

It is possible to import and export smolts from areas of equivalent disease status. The majority of those smolts are Scottish, if not all of them. It is possibly more common for eggs to come from abroad, but they can still make a quality Scottish salmon.

This might be a question for Marine Harvest. I was surprised to learn that all the eggs come from Norway. How does that add to Scottish provenance?

In farming generally, it is quite typical to move stock types around the world. It is the case in chicken farming, beef farming and pig farming. In salmon production, there is a requirement to take eggs from multisea winter fish brood stock from big rivers. The majority of the worldwide salmon industry uses Norwegian stocks. They have been bred over time and there are some elements of our Scottish stocks within those. They are used in Canada, Norway and Scotland.

I am happy to leave that there.

I will bring in Craig Anderson, who might have a different story to tell.

The Scottish Salmon Company also imports Norwegian eggs. However, we have invested £3 million in a native Hebridean brood stock programme based in Langass on wild stock from the River Uist. It is Scottish eggs and Scottish fish. By 2020, our aim is for 15 per cent of our production to be native Hebridean, and we aim to grow that.

I am from a company in the supply chain. We are one of the largest suppliers to the industry. We are not a producer, which is why I am not answering some of the questions.

I have small comments to make on two of the subjects that have come up so far. First, on the community question, you should think beyond direct community donations and assistance, and direct employment by producing companies, and remember that there is a large supply chain of small and large suppliers throughout the country, including in the rural areas around these communities. There are about five jobs in the supply chain for every one in the production companies.

Secondly, I see a need to rationalise regulation, but robust regulation is a key part of Scottish provenance. That might be part of the reason why we get a premium.

I suspect that regulation will form part of our later questions. You might find that you get in on that later.

I will continue with the theme of provenance and quality. I presume that part of it is certification and international industry standards.

My first question is perhaps specifically for Marine Harvest. Why is the case that your Norwegian farms have signed up to the Aquaculture Stewardship Council standards—I am not aware of how many farms have done so or what the percentage is, but many of them have—but only one of your farms in Scotland has signed up?

The company supports the ASC standards. They are robust and they deal with things that lie outwith regulation. When the ASC standards were written, they predominantly took a lot of the environmental regulations from Scotland, because they were the most robust and the best in the world for protecting the environment. The ASC standards go beyond that; they cover social standards, they go into wild fish in more depth and they cover mitigating impacts. The Marine Harvest board decided that it would try to make all its farms ASC accredited by 2020, and 40 per cent of our sites in Norway are now accredited.

In Scotland, we had two accredited sites, but we now have one. We have just got over the hurdle that exists within the standard for smolt production in freshwater lochs in Scotland. The ASC standards prevented the farming of smolts in freshwater lakes, which is why we did not take them up. Now that that has been amended, we will move all our sites in Scotland to ASC accreditation.

If I may, convener, I will have to explain that quite technically. The trophic status, or nutrient levels, in the lakes in Norway, Chile and Canada are fundamentally different from those that we have in Scotland. We have lakes that are borderline oligotrophic-mesotrophic, meaning that they can accept and deal with a sustainably higher level of nutrients from farming. That science was not recognised in the ASC standards, so once we had it changed on the basis of the evidence, we were able to move more of the sites to ASC.

If 40 per cent of your Norwegian sites are ASC accredited, do you have a target or a timescale in mind for your Scottish sites to reach the 100 per cent that you are aiming for?

Now that that has been amended and we have had a more scientific and thorough assessment within the ASC standard, we will move quickly to put all the sites in Scotland through the ASC.

All sites? Quickly?

Yes, as quickly as possible.

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That is to do with the production of smolts in freshwater. Do you have any escapes of juvenile fish in freshwater before they are collected and taken out to the farms offshore?

We have been farming in freshwater lochs here in Scotland for more than 30 years and a history of escape events has been recorded.

There has?

Yes, it has happened. The general trend for escapes, both in the sea and in freshwater, has declined rapidly. Our last escape in freshwater was more than a decade ago, so the incidence is very low, but there is still a risk of it. The ASC standards address that through the implementation of a gold-level practice of containment, using things such as Kevlar nets, a minimum size of fish and a count-in, count-out system.

Is that the same across all the industry? Are escapes into freshwater of juvenile fish declining, or has there been none for 10 years?

I cannot say that there has been none for 10 years. There have been escapes in the past 10 years across the industry but, as Ben Hadfield says, the incidence has been declining and we are improving matters by investing in the technology that is now being applied with regard to moorings and barriers. Maybe Stewart Graham could say more about that.

We also have a new national technical standard that has arisen from the ministerial working group on aquaculture and is now part of our code, and all the companies are abiding by that. A lot of it focuses on human behaviour. We have to train our people to ensure that they maintain the nets in the best possible condition to contain the fish, and there has been human error in the past. We believe that we are moving quite significantly in that direction.

I apologise for jumping in with that question. Peter Chapman has a question and then we will come back to Jamie Greene.

Jamie Greene may have been going to ask this, but I wanted to ask Craig Anderson and Grant Cumming whether they intend to go down the same route—whether they hope to be ASC accredited as well in the near future.

I suspect that Craig Anderson and I will have similar answers. The ASC standards are one set of standards out of hundreds that are out there. We comply with a number of standards, including the Royal Society for the Prevention of Cruelty to Animals assured scheme, GlobalGAP, the code of good practice, and the protected geographical indication scheme. Those are the four that we currently comply with. However, the goalposts are always moving, so which standards we go for in future will be customer led; I certainly would not rule out ASC accreditation.

The Scottish Salmon Company is similar, in that we have four world-class accreditations. The latest one was the best aquaculture practice certification, which we believe is the most comprehensive third-party aquaculture certification that there is, because it covers the full process, from egg to in the truck, and includes feed companies and freshwater, marine and processing plants. We are happy with what we have, but with the recent changes in the ASC we will certainly look at that standard again and review the situation.

That segues nicely into my next question, which is on wider international certification. However, before I ask about that, I would like to clarify a point with Mr Hadfield from Marine Harvest. Is it the case that the barriers to ASC accreditation were related to smolt farming in freshwater lochs? How does that inhibit farms where the smolts are farmed in tanks and sent directly to seawater, with no freshwater loch element? Why were they unable to receive ASC certification?

That was the reason why we had only two farms at ASC standard. We run our business with a lot of fish starting off in the hatcheries, which, increasingly, are recirculation hatcheries where water is purified and recirculated. The fish are moved to the lochs when they are around 30g, grown into smolts of around 120g, and then moved to the sea. That means that roughly 90 per cent of our fish go through the farming systems in the loch, so we had to go back to the ASC and get it to change the standard. To be really straight about it, the issue was that the ASC had not recognised the scientific circumstances of freshwater environments in Scotland; it was not that we pushed it to change. Sticking to science and being scientifically accountable is very important in this business.

Thank you for the clarification.

Someone mentioned that there are hundreds of certification schemes out there that one could receive accreditation from or align with. Is it a problem that there is no international industry standard for production and provenance? A producer could sign to one accreditation system in one part of the world and another system elsewhere in the world, so does that make it difficult to align the industry and create a true balance of certification and provenance? Of the many schemes, which are the most widely recognised? To which schemes do Scottish producers sign up for the provenance that Scottish products so desperately need?

The most widely used accreditation scheme is GlobalGAP, which is recognised in international markets—80 per cent of our production is GlobalGAP accredited.

Ben Hadfield alluded to the backstop of all production standards being the Scottish code of good practice, which is what produced those standards at a common level. The code is the basis of production standards and we enhance it with our own additions and attributes. It is recognised worldwide as such, and other countries have followed it. We should be proud in Scotland that, off its own back, this industry did that in 2006. It has been a tremendous success.

In the marketplace, there is a bit of differentiation between retail markets, and different retailers have different standards for the products on their shelves. We were the first non-French food to receive Label Rouge accreditation, and we produce that to a different standard from our superior fish. There is a lot in the mix to consider, but it is all designed to ensure high standards of food quality and safety.

I absolutely agree that the code of good practice is a pinnacle—it is very tough, robust and exacting. We all adhere to it, and it is really important that we do so.

The other accreditations that are out there are expensive. The Scottish Salmon Company pays more than £160,000 a year for third-party audits, which we welcome. There is GlobalGAP, Friend of the Sea, the RSPCA and best aquaculture practices—I could go on. Major retailers are professional companies with their own technical teams and, sometimes, their own accreditation schemes that they want producers to adhere to and have a separate audit for. We work closely with retailers and try to align with what they want.

We have four accreditations and we are happy with that. We will look at the ASC, but we have to bear in mind the technical considerations of retailers and their own accreditations that they want to be attained.

From that answer, can I take it that the accreditation process is driven by the retail market, rather than by third parties that have regard to environmental aspects or other aquaculture interests? I appreciate that it is a retail product, so you are driven by what the buyers ask for and their standards. Is that at the forefront of the decision making when it comes to accreditation? How do you make those decisions, given that quite a substantial cost is involved?

There are about 20 standards—the number is not quite what was discussed before—and they are all similar. Retailers look for a point of differentiation and there is competition to come up with the most robust standard. The approach came from the code of practice and regulation in Scotland, which were seen to be the best, and it has been taken up more widely. Environmental groups now want to put their stamp on how salmon should be farmed.

James Withers of Scotland Food & Drink appeared before the committee last week, when we talked about the Scottish brand generally and about the importance of the perception that Scottish farmed salmon is produced in pristine waters. He said that the industry at large wants to embrace world-class standards, as we have heard this morning. If that is the case, what improvements in relation to environmental and broader issues are still necessary to make the industry even better and bring it to a higher place among world-class standards? I presume that none of you is standing still.

You are right that our premium out there in the marketplace depends on having high regulatory standards. We have such standards today, but more could be done to co-ordinate the regulations. To operate a fish farm, we require at least five licences, which are issued by different regulatory bodies. All our regulators are good and thorough, but there is the opportunity for things to fall between stools. A crucial point concerns sea lice and sea lice medicines. Sea lice numbers are regulated by one body, but sea lice medicines are regulated by another. There is an opportunity to look at more holistic regulation, under one regulator, to drive down sea lice medicine use and sea lice numbers. That could really help.

Animal welfare, the benthics and the care of the fish and the sea bed are our responsibility, and it is our duty to keep on improving in those areas. That means investment in technology, training, new veterinary procedures and new non-chemical ways of treating fish to keep them healthy and cleaner. The use of cleaner fish and of technology in nets and in cameras to ensure that the feed has been 100 per cent utilised—we must do all that and more daily, and we must keep on researching and investing in new technology. As an industry, we want to work together to continually improve.

As members know, the industry is quite young—the first farms were established about 50 years ago. The industry moves quickly and is dynamic. Scotland has had good regulation to protect the environment, so it is frustrating to hear comments that we do not have that. However, as the industry evolves from its young base, the legislation should change quickly—it should also be dynamic.

Kate Forbes asked what the opportunities are. We must acknowledge that salmon farming has had a difficult period. In 2010 and 2011, we had some of the lowest mortality rates globally, at about 7 per cent.

Was that figure for the industry as a whole or for Marine Harvest?

I was about to clarify the figure. I work globally in Marine Harvest, where a 7 per cent mortality rate in the seawater phase would be top of the pile, and that is where Scotland was from 2009 to 2011. Since then, we have had what I called in a letter to the committee a “perfect storm”. We had El Niño conditions, which raised the Atlantic’s temperature and meant that we had warmer seas and coastal areas. We have also had reduced efficacy of sea lice medicines, which has meant using less medicine and using other treatments. In that period, mortality levels have increased. In the farmed fish health framework working group, I have set out measures that could enhance regulation and go further to reduce the risk of mortality or the development of mortality in the industry.

We need to consider consolidation of the industry, with fewer and larger farms that are less connected in areas that are less sensitive, which could maintain, or even increase, the amount of production here. That approach might take stakeholder conflict down a bit.

10:45  

I clarify that the committee will look specifically at mortality, sea lice and disease. We can leave the focus on those until later, and do more on the generalities.

I am content with that—I had just one question.

I will set the scene: Scottish salmon production is a success story in Scotland; farmed salmon is Scotland’s and the UK’s largest food export; there are 10,340 jobs and £270 million goes out in pay per annum. On a visit this week to one of Ben Hadfield’s farms, I was impressed with the level of wages that Marine Harvest pays. I am sure that all the companies represented here pay that level of wages. The Scottish Government wants to double production, which in 2016 was 162,817 tonnes, according to Scottish Government official records. The industry has growth targets and there is a demand for the product, which is excellent and very tasty. However, output appears to be relatively flat. Why is that?

I will ask Scott Landsburgh, because he was looking away.

Thank you for that, convener. [Laughter.]

That is a very good question, which demonstrates how difficult and challenging it has been in recent years for the industry to grow to the extent that it wants to. Ben Hadfield mentioned the recent challenges with fish health performance and the investment that has gone into that. In addition, the consenting process is tough—we like it to be tough; there is nothing wrong with it being tough. It is important that it is rigorous, because it has to ensure long-term sustainability for the industry. We accept it and we work with it.

However, there needs to be a shift in the culture, whereby we get together with the regulators, Government and policy makers to achieve alignment. The baseline is that we want to ensure that we grow sustainably from a good health base and a good environmental base.

We have had a tough time in the past three or four years, but we are coming out of that, as you will see in the data that is published in the coming months. On that basis, we want to work with the committee, the Scottish Environment Protection Agency, Scottish Natural Heritage and Marine Scotland, in particular, to develop a programme to farm fish in the most appropriate and health-enhancing way.

If we can do that, we believe that we can get to an aspirational target. We put out a figure of 300,000 tonnes because we were part of the Scotland food and drink programme. We have had a very successful 10 years for the food and drink industry in Scotland, in which we doubled turnover from £7 billion to £14.5 billion. Let us reach for the sky and go to £30 billion in 2030. We account for the largest part of the food part of that figure, so there is a responsibility on us to deliver. We are trying to do that, but we can only do it sustainably so, at this juncture, it is an aspirational figure. We want to work with all the regulators to get there.

Ben Hadfield mentioned that we have to work together with all sections of the salmon industry—wild and farmed—in order to double production, which is something that I have been pressing for.

Should the Government give producers a chance to move their farms to another part of Scotland and double their production—for example, in circumstances in which a river has been affected? It is no use looking back; we have to look to the future. Basically, I am asking what we can do to resolve the problems of producers of farmed fish, people in the wild salmon sector and those who manage rivers.

We will be coming to that question slightly later. I would be happy for Ben Hadfield to give a brief answer now, after which I will bring in Stewart Graham on the previous question.

Mr Lyle made a great observation. We can touch on the issue in more depth, but that situation exists. Ultimately, by working together, the progressives on the wild fish side and the farmed side will create more solutions in future. If we have tensions, heat and argument, that will not work. We can discuss that in greater detail.

I would like to answer Richard Lyle’s question, which was, “Why have we flatlined?” I, together with another, originated the strategy to which he referred that sets out a doubling of the value of the industry. That is a nominal target. We should not get hung up on a figure of so many hundreds of thousands of tonnes. We are looking to double the value of the industry by 2030. I ask members to remember my comment about how much overall value to the economy there is in the supply chain. That is very important. We can do lots in the way of adding value to a smaller tonnage. Our focus is on value.

In answer to the question, when we were developing the growth strategy, the biological challenge was recognised then, as it is now, as the number 1 constraint. The industry wholly recognises the biological challenge. The number 2 challenge was the complexity of the regulatory and consenting environment. Nobody is arguing for a less robust approach, but a more streamlined way of doing things would release the growth, as would those of us in the industry coming together to recognise and overcome the biological challenge. Because the whole strategy for growth is about taking a sustainable approach, none of us in the industry expects to move on until we are on top of the existing challenges.

I thank Richard Lyle for his comments and agree with what he said. Farmed salmon is a great product and there is a colossal demand for it. It will benefit us all if we can grow the industry, but the most important thing is that any growth must be sustainable.

As Ben Hadfield mentioned, we have faced high water temperatures over the past few years, partly as a result of El Niño and possibly partly as a result of climate change. That has created a new environment in which we have to control fish health, which has been challenging for us. We have had real trouble in the past few years with raised mortality rates and high numbers of sea lice on one or two farms. It is important for us to get that in hand and to make the necessary changes so that we start from a good point before we begin to grow again.

In 2010, Grieg Seafood was operating on 33 sites, but we are now operating on 17. We have reduced the number of sites, increased the fallow periods and created larger management zones, which are fallowed synchronously. That means that all the fish are emptied out at the same time so that sea lice cannot reproduce on the salmon. All those things have led to a reduced tonnage in the short term—we have gone from a peak of 19,000 tonnes of harvest down to 12,000 tonnes. We now believe that we have the problems under control, we can see that we are in a much better place and we can now begin to grow.

I can give you a few facts. Our mortality rates are down by 37 per cent on the previous 12 months and the average number of adult female lice per fish is down 87 per cent from where it was a year ago. Those are good-news stories, but we had to do that before we could look at our growth potential. I agree that we might need to look at new planning applications for bigger sites that are further out in more exposed waters. As an industry, we are already doing that. The planning departments around Scotland are doing an excellent job, but there is a question about resources. They have a lot on their plates and it is difficult for them to get through everything in the timescales that they need to.

Thank you for that comprehensive answer.

I want to focus on your response to the Environment, Climate Change and Land Reform Committee’s report, and the problems that it identified. The report said that

“further development and expansion must be … based on resolving the environmental problems. The status quo is not an option.”

This morning, we have been told that we have the very best regulation. However, that is contrary to some previous evidence that we have heard. For example, Heather Jones talked about the industry being self-regulating.

Do you recognise the environmental problems? Grant Cumming has just finished talking about that, but I would like to hear what everybody else has to say. If you agree that there are environmental problems, what do you think that you need to do to change your operations?

I remind you that we will deal with specific issues such as mortality and sea lice later on. I would be grateful if you could bear that in mind when you answer the question.

We recognise that there are environmental problems, and we are humble about that, as we must be when we use the environment to assimilate the waste from our activities. We try to do that in a predictable, monitored and sustainable way.

There are elements of the report that I believe go beyond evidence-based criticism. I wrote a letter to set that out and sent it to Donald Cameron and the convener of the Environment, Climate Change and Land Reform Committee. It was sent very recently, which is why I want to put that on record.

I know that we will touch on the issue of mortality later on, but I want to say that we accept that mortality levels have been too high, and I assure you that all the companies have put vast resources into dealing with the issue—figuratively speaking, they have thrown the kitchen sink at it.

With regard to sea lice, the hazard that uncontrolled or badly controlled lice present to wild fish is serious, and we take it seriously. We need more research on that issue, and we need to work collaboratively with the wild fish sector. However, we must not overexaggerate the problem to the point of making salmon farming a single issue in certain areas. I can assure you that that happens.

We think that the report is thorough and good. Obviously, it sets a clear challenge of improvement to the industry. However, as a scientist, I can assure you that there are areas in which it goes beyond the evidence that is available, and I am slightly concerned by that.

Grant Cumming need not respond, as he addressed a lot of those points in his previous answer. Craig, do you want to come in?

The Scottish Salmon Company is involved in issues around the environment every day. We accept that we have to feel humble—that is a good word for it—with regard to the environment. We feel sad about the situation and know that we have to work up a plan with the industry, our scientists and veterinarians and the Government and its agencies to solve the issue. That is what we have been working on, through training and investment in new technology and new ships. Three years ago, we had two ships at sea; this year we will have five, and two of those are specifically dedicated to cleaning lice. We acknowledge what has happened in the past, and we are all working collaboratively together and as individual companies to improve the situation on a day-to-day basis.

The Environment, Climate Change and Land Reform Committee was very critical of the regulators. As Grant Cumming said, you need five licences, which are issued by different regulatory bodies, and there is a danger of things falling between different regulators.

The committee was critical of SEPA, in particular, as it seemed to be approaching its regulation duties in silos. As I said, other witnesses told us that they thought that the industry was self-regulating in the sense that, once a company has its permissions, it regulates itself. That is the evidence that we have received. Would you like to comment on it?

11:00  

I think that the criticism of the regulators is a bit harsh. The regulators do a tough job to the best of their ability. The big change over the past 24 months has been an improvement in modelling and predictability on the discharge from marine farms. We have been doing a lot of collaborative work on that with SEPA.

The new DEPOMOD model has now arrived. That is the model on which we base the discharge consents that we achieve. Another regulation, the depositional zone regulation, is being modified so that it can more accurately predict the benthic impact on the sea bed. That will be coupled with hydrodynamic modelling, which the companies are bringing in themselves. That will undoubtedly enhance the accuracy of the prediction of the fate of the discharge from the salmon farms. A big load of work has been done as part of that process. It has not been done in a silo; it has been done in collaboration with SEPA. There is a lot of learning going on, believe it or not. There is a lot going on behind the scenes to get to the next stage.

I am not a scientist, although the guy sitting next to me, Ben Hadfield, is, and he can tell you about the issue in more technical detail but, in my opinion, the regulators are doing a pretty good job with fairly tight resources.

It is a good question, and we should not downplay the strength of the regulation here in Scotland. It is good, and it is better than what exists in many other salmon farming regions. At points, however, it can be disjointed, and there is more work to be done to bring it together to get a strategy that is more like the one that Richard Lyle suggested, whereby someone can take a view of the whole industry and ask where we want to go.

We have a product for which there is huge demand. It has among the lowest levels of CO₂ emissions for mainstream protein sectors. The figure for the industry is 2.9kg of CO₂ for 1kg of salmon; the figure for beef is in excess of 30kg. We have a product that everybody wants, and it is good for the environment to farm it. It is very efficient. There needs to be more cultural support in Scotland for what we have and how to produce it in the best possible way.

We can then say that we want more farms, but we want better environmental key performance indicators. How do we get those two things together? We want higher farming production and a higher value for it. We want the carbon footprint to continue to go down, and we want lice levels to go down. Those are all issues that we will touch on. Those improvements need to take place. Fundamentally, we want the industry to grow, and we need to consider which are the best places for that growth. I think that there is an opportunity through consolidation of the farming areas.

There is evidence that we have received that you have not addressed. There are five different regulators. The evidence is that, once you have been through the process of getting your licences and you are up and running, you are largely self-regulating. Would you agree with that statement, or not?

I would agree with that statement in that all the companies are highly professional and responsible, and they utilise the environment to sustainably reprocess the waste. If a company is cavalier with that, it will be punished the quickest and the hardest. The regulation sets out what companies can do in terms of discharge, pen size and nets, and where they can operate. The regulation is structured.

Things have improved in the past two years, but there is not a holistic, overarching strategy in Scotland for how the industry should move further forward. Perhaps Stewart Graham is best placed to talk about that. The industry leadership group and the Government’s activity to spearhead that and to tick all the boxes as we grow the business represent a good starting point.

Good morning, panel, and thank you for your submissions. This subject has partly been touched on, but I want to go a bit further into the issue of mortality. We accept that there is always some mortality in livestock production. You have already answered the question that I was going to ask initially. It is clear that you are not content with the current level of fish mortality. Is there an acceptable level of, or benchmark for, fish mortality that you work to?

Ben Hadfield can start the answers off, then I will bring in Grant Cumming and Craig Anderson, because I am sure that you all have slightly different views on that.

Having worked in the industry in a scientific and farming capacity for 18 years, my observation is that if you farm in the seawater stage, which lasts about 18 to 20 months, and you have below 5 per cent mortality, you can count yourself as among the best in class. We must remember that the life strategy of a salmon is to lay thousands of eggs, and very few survive.

Mortality levels have gone up, and no one is satisfied with that, so the focus and resource that have been brought to bear on the issue are intense. However, there are other industries that have higher mortality rates but are not singled out for criticism or described using words such as “unacceptable”. We agree that mortality levels are bad and need to be resourced and fixed quickly. However, the level of dairy herd replacement is about 35 per cent, and mortality in the bass and bream sector—

If I may interrupt, I will say that it is your industry that we are looking at, although comparators might be appropriate. Is there an acceptable level or target that you work towards?

Fish farmers are the ones who are most financially affected when mortality is high, and we gain when mortality is low. The target that we are working towards is zero mortality in the sea. That is what all the professionals in my company aim for.

As I said, from 2008 to 2012, the Marine Harvest group, which is represented in almost all the main farming regions, had the lowest rate of mortality. Mortality has risen significantly in Ireland and Norway due to factors that I described earlier. The measures that are now starting to mature will see mortality decrease in the coming years.

Fish mortality is a serious issue and has been very bad for several years. Improvements have been implemented which do not involve just new technology. For example, our ships are now full of fresh water to clean the fish and help with gill disease. Five years ago, the issue was amoebic gill disease, but now we are dealing with new issues including complex gill disease and cardiovascular issues. We all employ veterinarians and have biology departments to investigate problems as quickly as possible by sampling fish every day to ensure that they are healthy, because we want zero mortality. Mortality is not good, and we want the lowest possible rate. We are doing an awful lot to improve the situation, but we will never be satisfied until we reach zero—if that is possible. Zero mortality would be great and we will carry on trying to reach it.

Grant Cumming will probably echo what Craig Anderson has been saying, so I will let John Finnie ask a supplementary and then give Grant a chance to answer.

I will quote from the ECCLR Committee report:

“The overall number of deaths as result of disease, ill health and stress may be masked by the early harvesting of fish with disease or life threatening conditions.”

Is that the case and, if so, how widespread is the practice?

I will give you a bit of my background. I am quite new to my job of managing director, and prior to that I was in salmon farming. The subject is very close to my heart. Like any farmer, salmon farmers hate it when our stock is not healthy: welfare is our number 1 priority, just as it is in agriculture. If our fish are not healthy, we consider the possibility of harvesting them, which is sometimes a better option than treating them. If we left all the fish in the sea and never harvested them, eventually all the fish would die.

Yes—there has been early harvesting, but if we had not harvested early, mortality rates could have been higher, so I do not think that it is a bad thing to have taken action to harvest early.

Do any of the other producers want to comment on that?

Early harvesting does occur. We have a legal and moral responsibility for the welfare of our stock, so if we feel that fish health is poor, the decision can be taken to harvest the fish.

My company also takes such decisions very seriously, and we take advice from a third-party veterinary group. If fish health has deteriorated a great deal, we will decide to harvest, but it is a serious decision that is not taken lightly.

The telling word in the quote that I read out was “masked”. What is your reaction to that? Is it all open and transparent, or is early harvesting avoiding exposure to a wider issue?

I hope that you will forgive me for saying that I think that “masked” was a bad choice of word. We are very knowledgeable about the health status of our fish and the challenges that we face. It is part of our business to be at the top of our game on that.

Also, we are busy people, but I accept that communicating such information in an open and transparent way is something that we have done badly. The information is sometimes complex, but we have to explain it. The SSPO has recently published sea lice data and proposes to publish mortality data, and Marine Harvest has published that data by site since 2016. Those examples are the direction in which the industry in our nation needs to go in order to get a proper buy-in to a culture of quality growth in the right circumstances. I hope that that is a good answer.

I do not think that the use of the word “masked” in the report was appropriate.

My background is in farming. You will be well aware of the saying in agricultural circles that where you have livestock, you have dead stock. It is a fact of life and, although we all try to minimise it, it will always be there.

One of the reasons for mortality having risen in the salmon industry is amoebic gill disease, and I am sure that you are all trying to tackle that as best you can. Is there a risk of AGD and other farmed-salmon diseases being transmitted to wild stocks?

It looks as though Ben Hadfield, as the scientist, will answer that. The question is on disease—we will come to sea lice in a minute.

You mentioned amoebic gill disease, which came into Scotland in 2011, due to waters being warmer. It is ubiquitous throughout the environment. When farmed fish go to sea, they do not have amoebic gill disease, because we take all possible steps to screen them and ensure that they are disease-free.

To go back to Mr Finnie’s point, if our fish were diseased, we might take the decision not to put them to sea: we have that level of control. However, it is an open environment, so when our fish go to sea, they can be infected by wild fish, and there is potential for those diseases to be magnified in the environment because there is a large number of fish in a given area. That needs to be understood to a greater extent and it needs to be risk managed.

We also see that it is, from a farming point of view, very difficult for disease to transfer from pen to pen, so if a disease does not jump between pens that are 20 or 30m apart, the dilution in a loch system with an area of open ocean with wild fish swimming by is much lower. We need to be humble and take the issue seriously. It needs more research and the industry needs to be transparent about the steps that it is taking to minimise the risk.

You are almost saying that it is the other way around—that the fish go to sea without AGD and somewhere along the line start showing signs of it, which must have come from the wider ocean.

That is the case, but I speak to people in the wild fish sector quite a bit, and they regularly voice concern about farms’ potential for magnification of problems. Leaders of companies and people who work in the industry need to accept that that is the reality and to be clear about what we are doing to minimise the risk.

11:15  

The wild fish are not always lurking around the pens; they are there at critical times of the year. Is there a way of minimising exposure by timing of stocking and harvesting?

That has been done for quite some time. We have fallow periods in a farm during which we try to reduce to no fish, and then there will be no sea lice prior to wild smolt exodus or migration from the river. There is a good amount of work on disease being done in the companies. In areas where there are multiple companies working, they come together and agree when the area will be stocked, when it will be fallow and what will happen in the event that a company notifies a disease, so that the information can be shared and everyone can work towards finding a common solution.

Our responsibility is to be transparent, to convey information honestly and—because it is technical—in a straightforward way, and to minimise risk and hazard. I would like there to be more collaborative working with the wild fish groups to address the issues there. That is something that should be mined much harder, in my view.

Does Craig Anderson have anything to add to that? Are you of the same opinion?

I am of the same opinion. We work collectively as an industry. Marine Harvest and Scottish Sea Farms share some sea lochs. We share information and we fallow at the same time for improvement overall. We talk to our neighbours to ensure, as far as possible, that we share information. We want to continue to improve in that respect into the future, through the greater transparency that all the companies have signed up to and agreed to. We support there being more collaboration on research with the Wild Trout Trust and other associations.

A new farmed fish health framework is being developed by the industry in partnership with the Scottish Government. Will it be voluntary or have a statutory basis? What do you think it will achieve in health terms for the whole industry?

I suppose that I should answer first, because I am co-chair of the group. Mortality, growth and biological performance are core to any salmon business and have everything to do with profitability. In this period, when we have had a tough time and things have been difficult, vast resources have been thrown at the issue and there has been a lot of innovation.

The farmed fish health and welfare working group asked what it would look like if Government, scientists and regulators all sat down and decided what steps could be added on top of that to take things further. The discussion has been about improving transparency and communication flow, and there are workstreams relating to understanding amoebic gill disease, gill health, how sea lice move around farms and how farms are connected. That is to inform what the industry should do in partnership with Government and regulators, and what changes to regulations could be made to develop the environmental key performance indicators for salmon farming more quickly and in the right ways. I hope that that answers your question.

Will the framework be voluntary or will it have a statutory basis? As I understand it, you are still working the framework up, and it is likely to become more transparent. Can you comment on that?

If we boil matters down, there are about 20 recommendations to improve regulation and co-working beyond what the industry is already doing. Those recommendations will need to be worked on over the next 10 years; it will take that length of time. I think that that will be very good.

The framework will be predominantly voluntary, because we all want healthier fish and better growing fish. Where something is needed that cannot be achieved voluntarily, I imagine that that would move into regulation and policy within the regulators.

My question is about notifications or alerts when a producer discovers a disease. In agricultural farming, strict mechanisms operate under environmental protection agencies to notify farms and put in place protocols when diseases are discovered. What statutory or mandatory procedures do you have to follow when disease is discovered on a salmon farm? Has a cultural shift taken place away from farms not wanting to say that they are the root cause of a problem or that they have a problem, to a more transparent approach being taken in letting those in the wider environment know about aquacultural problems?

Who would like to respond? Ben Hadfield seems to be volunteering to answer all the difficult questions. I am mindful that we have a lot of questions to get through, so please give a short answer.

I will try to be brief. We are subject to the same statutory requirement to notify diseases as agriculture; for example, we are under a legal requirement to give notification of a positive finding of infectious salmon anaemia on a site.

As an industry, and through the farmed fish health framework working group, we are pushing for a gold standard of transparency, under which all diseases and all lice levels will be published by farm. We need to make that cultural shift, which has been difficult.

I can explain quickly why it has been difficult. We are constantly attacked because of such matters. We have matured our thinking to the point of putting all the information out there, being open about the problem and what we are doing to address it, having the debate and fostering a greater culture of managing the disease challenges.

We will move on to sea lice. I would be grateful if somebody would explain the position on the publication of sea lice data, which has fundamentally changed since the ECCLR Committee reported. We have had correspondence on that. Is Scott Landsburgh comfortable with explaining that, so that we understand where the industry is going on sea lice?

I will try to do that. The SSPO has for a number of years reported average sea lice numbers for 30 areas. That information is in the public domain—the figures are published on our website quarterly. They are based on the fishery board areas to allow analysis of our sea lice performance.

We have now gone to a more granular reporting base. It has been difficult to ensure that we have absolutely accurate information; there is no point in putting information out there that has to be withdrawn and reset. I think that some members have already received a copy of the information that is on our website as of today—a sea lice report by farm site. There is a three-month lag in the information, which is because we ensure that we have the right data: the data is checked and double checked to ensure that it is accurate.

From now on, the report by farm site will be produced monthly, with a three-month lag. It will be on our website and it will be sent in advance to Marine Scotland scientists, who are also still keen to receive the area report because they think—believe it or not—that it tells them more from an analytical point of view. That is where we are with sea lice reporting.

I do not want to always hold out Norway as the best model, but it is possible to click on the name of a Norwegian farm on a website and get a report on anything to do with that farm. I have a report in front of me—I will not even try to pronounce the farm’s name. It refers to 0.12 female lice per fish and, on the back of the report, I have all the details of the number of lice per fish, medicamental treatments, mechanical removal of lice, the sea temperature, fish disease and escape incidents.

The report is pretty clear to me. The Scottish Parliament Information centre researchers did it for us yesterday and what they have pulled out, which seems fairly accurate, covers 16 to 22 April, which is barely two weeks behind, rather than three months. Is that where you want to be? I know that Ben Hadfield is bound to agree, because his company probably owns those farms. Is that good practice, Scott Landsburgh, and would you like to see it go to that level?

Much of the information that you describe is in the public domain.

On a farm-by-farm basis?

You can look at information on a farm-by-farm basis.

Is it a one-click stop?

Much of it is there on Scotland’s Aquaculture website and in the SEPA report on compliance assessment scheme data. However, I take your point that it would be a good step for data on performance to be nearer to real time. However, it requires a lot of resource to do that. Let us go one step at a time. We took a very considered step to get to where we are on reporting. There is no doubt that we will keep enhancing that.

Ben Hadfield, you are obviously going to tell me that it is excellent—although I will not say that it is definitely a Marine Harvest farm.

I am very impressed that you have managed to get that information off the website, convener, because it has a nasty habit of showing that it is available in English and then reverting to Norwegian.

It is definitely in English.

It is a good website. That is where we would like to get to and the steps that we have taken recently reflect that. It is an area in which Norway is better than Scotland—although having lived and worked in Norway for some years, I can assure you that there are many areas in which Scotland is better than Norway.

Norway’s culture is also more supportive of marine farming and using the sea. That approach to the sea, from access to fishing to fish farms, is ingrained in Norwegian culture. What we would not want is to have similarly full disclosure but continued criticism that goes beyond the evidence—there is quite a lot of that in Scotland. The ideal would be for the industry to move forward and mirror the Norwegian level of granularity in its publications, and for us all to come together to create a solution-focused culture in which we can develop the industry in a sustainable way. I strongly advocate that that is the right way to go.

I will park that there, because there is a series of questions that lead on from that.

I will follow on from the questions on the publication of data on sea lice and mortality. Would you have any objections to making it compulsory to publish that data for all salmon farms in Scotland?

I have a small point to contribute that may be more difficult for producers to make because it might appear defensive. Ben Hadfield touched on the subject of Norway having a much more pragmatic valuation of the use of the marine environment. The risk of right up-to-date, full disclosure of data is that there will be malicious attacks on a commercial basis and personal attacks on the back of the data. We need to be aware of that risk in making decisions about what we disclose and, in particular, when.

In an ideal world it would be voluntary. However, if there was a feeling that the voluntary information was not suitable and MSPs decided that regulation was the way to go, that would be okay.

Colin Smyth has a series of questions to feed in and perhaps everyone can get a chance to answer.

There are a number of questions about regulation and so on. We have touched on the impact that sea lice in farmed fish have on wild fish. I am keen to know the extent to which that issue is taken into account by the work that you do in planning your farms. Is that a key issue for you or is it someone else’s priority, and if so, whose priority is it?

It is a key issue that we take very seriously. The primary action that we take is to minimise any discharge of farm-derived lice during the sensitive period for wild smolts, when they are exiting sea lochs. Our policy is for expansion in areas that are away from rivers. It has been predominantly in the Western Isles and the small isles, such as Barra, Muck and Rum, where there are no concentrations of wild fish. The issue is high up there.

11:30  

I read a book by Martin Jaffa on the wild sea trout, which is a different salmonid but essentially in the same territory. He draws research from all over the place but does not do it himself.

He particularly refers to Loch Carron, where there are three rivers and a farm. The river that is adjacent to the farm has seen no reduction in the number of sea trout, while those that are more distant from the farm have. Jaffa posits, but does not conclude, that there is quite a wide variety of interactions between the wild sea trout and the environment—reduced salinity, warmer waters and lice. Is that evidence something that you associate with? Lice are a problem, but the future health of wild salmonid populations ain’t just about lice.

I will bring in Grant Cumming. If you think that there is a difference between salmon and sea trout and the effects of lice on either, it would help the committee if you mentioned it.

There is a difference. I am not an expert in the field but my understanding is that salmon run out of the rivers and go to the deep sea, so although they have to pass the salmon farms they are not necessarily near them for a long time. Sea trout live much more locally and might come into contact with sea farms more regularly.

There is no question but that there is a huge number of issues facing our wild salmon populations, not just in the UK but right across Europe. Sea lice is one of those problems and there is no question but that sea lice are bad for farmed fish and wild fish. The industry has to do everything that it can to make sure that our sea lice numbers are at a minimum.

It is important to note that salmonids are struggling in areas in which there are no farmed salmon, particularly in the southern regions. In England, Wales and France, for example, salmonid populations are suffering much worse than they are in Scotland and Norway, which obviously have much more in the way of sea farming.

That is not to say that there is not a connection between mortalities in sea trout and farmed salmon. There might well be, and we need to do everything that we can to bring that down. However, it is clearly not the only thing that is at play.

As a company, and increasingly as an industry, we start with the view that excessive levels of farm-derived lice retained within a sea loch or any contained water body pose a hazard to wild fish. It could put additional strains on them. Salmon and sea trout are different. Sea trout smolts are generally larger, but they spend more time in coastal waters, so their exposure to that hazard will be different.

I suggest that the way forward for the industry is a gold standard of transparency and then to minimise lice levels and the farming presence in sensitive areas over time. We need to grow in areas that are away from migratory fish systems.

In Scotland, we suffer from a continual overstatement of the effect that farm-derived lice have on wild fish and it is important not to overreact to that. Salmon and sea trout are under pressure because of climatic factors, higher levels of predation, and many other things. I do not believe that it is correct to say that the primary impact on the west coast is coming from salmon aquaculture. However, we are using a shared space and having the environment assimilate our waste, and especially between 2013 and 2015, there was a higher burden of sea lice on some farms. It is incumbent on the industry to address that problem—to work with the wild fish, minimise the hazard and try to research the scale of the effect—but it is very important not to overstate it.

If it is not as big an issue as some people suggest, what is the driver for the action that is being taken by the industry? Is the industry doing enough to tackle the problem of sea lice? To what extent has the practice been impacted by Marine Scotland’s new sea lice regulations, and what further regulation is needed to drive that work forward?

The SSC has invested heavily in research and training and in new ships to better understand exactly what is happening with sea lice—how to clean the fish and keep them healthy with minimum handling, because every time a fish is handled it can be affected. Of course, when we are cleaning we work in farm management areas, and having larger cages in specific areas helps as well—proper planning is needed. We are looking into that, as an industry and as a company.

As I said earlier, it is not a matter of spending money. We spend an awful lot of money now—it is well spent and for the future—but we want to go further and better understand the situation and to clean the fish. Lice are a worldwide phenomenon at the moment. They have been around for thousands of years and we are only now on that learning curve. As a company and as an industry, we are going through a progression of improvements that we do not want to stop.

The question was about the effect of sea lice on wild fish. I am not a scientist, but I have been closely involved in this industry and the fishing industry for 35 years. For years, we had very strong and aggressive commercial salmon fisheries in waters around Scotland and Northern Ireland; we have recorded ducks, for example, taking large numbers of the smolts that were coming downstream and returning to sea; we have exploding seal populations in various areas around the country; we have climate change; and there is huge growth in pelagic stocks that feed off similar food supplies to those of the salmon in the sea. My point is that there are many other things that may be contributing to the reduction in wild fish numbers over long periods of time. We need some science around that, and to study all of those causes on an equal basis.

I recognise all the things that Stewart Graham said about the pressures on wild fish, but our responsibility as a major industry in Scotland that could cause hazard to wild fish is to minimise that hazard and communicate how we do that. The production plan reflects the needs of the farmed fish but also any potential hazards on wild fish. We have a lice management plan, which has moved from a more medicinal strategy to a holistic strategy that includes biological controls with cleaner fish, fresh water treatments, and in some cases shorter cycles with larger smolts. That is geared towards lice minimisation.

The hazard exists and is present in how fish farm operations are managed. I would like to see the situation develop further by being definitive about the level of impact on wild fish. That takes a lot of energy and research, and, in my view, the industry should take part in that and support it both technically and financially. It would be good to end up in a situation in which salmon aquaculture provides more of the solution than the hazard. Salmon is an iconic species for Scotland, both farmed and wild, and we have a duty to work with the wild sector to make sure that it is as healthy as possible. We need more projects on things such as habitat enhancement and restoration.

We have heard some interesting points on the need for research and on the collaborative work that is being done. Is there any need for changes to the way in which the tackling of sea lice is regulated? We touched on regulation earlier and it was suggested that there should be some changes.

I am mindful of the time. I am happy to let one person come in.

One area that would be interesting to explore is integrated pest management. That has pushed our sea lice figures down over the past year. We have used a number of factors, rather than relying too much on medicines. Medicine usage has gone down, and a number of alternative methods of reducing settlement and of dealing with sea lice once they are on the fish have been used. We have made a lot of progress.

Perhaps it would be useful to consider how we integrate pest management into the regulations. It is important, however, that it does not become too hard and fast. It would be easy to say that people must do X, Y and Z but, as time moves on, A, B and C may prove to be better options. It is perhaps not a bad idea to consider regulations on integrated pest management.

I have a further quick question before we move on from that. I think that I am right in saying that Norway has lower targets for female lice limits per fish before treatment, compared with Scotland. Is that right? Do you think that Norway’s levels are an aspiration that we should seek to achieve? You can just answer yes or no if you like.

Yes. I think that we should seek to achieve those levels. Norway is colder, however. It is harder to control lice in Scotland, and it is harder to control lice in Ireland than it is in Scotland. The targets are very arbitrary, but people get fixated with them. A target that is acceptable for one water body is not acceptable for another. More collaborative research is required between the parties.

That was not quite a yes or no answer. Grant, I am really sorry—I think that Ben has given quite a good answer for all of you. Richard Lyle has the next question, and I would like to push on with that.

On the capture and beneficial use of waste, Ben, you wrote to Graeme Dey regarding the Environment, Climate Change and Land Reform Committee report. I am a member of that committee. You wrote:

“The National Trust for Scotland (NTS), quite properly, was asked to give evidence to both the ECCLR and REC hearings. We felt, however, that some of their evidence did not engender fair comparisons or contextualised criticism.

For instance, the comparison made in the most recent REC hearings by the NTS between human sewage and the discharge from farmed salmon is misplaced.”

Why is it “misplaced”? Is it not correct that

“the volume of waste (and untreated waste) discharged from fish farms into the marine environment is half the volume of human (treated) effluent of Scotland”,

which is something that I find quite disturbing?

Well—

Would you like to come in on that, Ben?

Yes, Sorry, convener.

He wrote the letter.

I should try to be a bit more patient—people tell me that frequently.

Yes—I wrote that letter. What frustrated me was that the comparison was between apples and pears. A body such as the NTS should do a bit better, in my view.

First, sewage is treated because it contains faecal coliforms, which are harmful to humans. Fish are ectothermic—they are cold-water species—and they do not contain faecal coliforms. Secondly, when people make a comparison with a sewage equivalent, they often refer to phosphorus. That is an issue when there is a discharge into a freshwater environment, because of eutrophication. That is not an issue, generally, for a discharge into a marine environment.

In summary, what we do in Scotland goes through regulation with SEPA very thoroughly and scientifically. We balance the discharge of waste from the farm relative to the assimilative capacity of the water column and the sea bed beneath it so that, over time, it is reprocessed and is sustainable.

Coming out with what, in my view, are sensational headlines is a thing of the past, I would argue. There is something about the culture, as we have discussed. We would not hear so much about such things in Norway. People there accept that if the marine environment is used to reprocess waste and it is managed in a good way, that is a good thing. That is what happens in agriculture, and they also have that view about the sea. That is my view—I hope that that is acceptable.

What work are you doing to capture and use the waste, and to reduce its environmental impact—or is there no impact, as you contend?

11:45  

For balance, I am keen to bring in other producers on that. I am sorry, Ben—I am not trying to shut you out.

We are certainly looking at that. Technically, it is quite tricky to do, but we are interested in the removal of waste. What limits the sustainable size of a fish farm just now is the environment’s ability to assimilate waste. If we can remove waste, we can increase the environment’s potential to hold more salmon, which allows us to hit those markets.

It is technically difficult, expensive and energy intensive, but it is not impossible. We have been looking at it recently for sea sites. We are not yet able to make it work commercially but, as time moves on, that might well change. If we can recover the waste, we could not just reduce the impact on the environment and possibly produce more salmon, but have a potential energy source, too. It could be used in anaerobic digestion to produce biogases. We are very interested in that area and we will continue to monitor it.

The industry should work with the Scottish aquaculture innovation centre to look into that with collaborative research and financial input. For the first time, some serious effort should be put into it to get it started. It is an area in which we, as an industry, could make a positive move.

I want to ask a quick question, then I will let others in. It was reported that share prices in salmon companies fell slightly due to Norway, which both licenses and sells sites, considering raising site taxes. I cannot pass up asking you, for the record, what taxes you pay in Norway and in the UK? You might want to send us that information if you do not have it.

Ben, are you in a position to answer that? You might not be, but you are probably the only witness who could be.

I can answer that reasonably well, I hope. We pay corporation tax in the UK and Marine Harvest Norway pays corporation tax on its profits in Norway. When you buy a licence to operate a farm in Norway, it is purchased from the state. When you gain a licence to farm in Scotland, you pay a rental over time to the Crown Estate that is based on the tonnage that is taken from the site. As in Scotland, there is a community gain in Norway, where small payments are paid into community funds.

Am I right that Norway makes more money from salmon farming than Scotland does?

No, that is not correct.

I want to talk about seals. By 2022, there is a chance that we will not be able to export to the US, because it is thinking about banning products from fish farms that continue to shoot seals. What are you doing to get shootings down to zero? Do you use acoustic deterrent devices? If not, why not? Are there any other emerging technologies to reduce predation by seals?

Witnesses are queueing up to answer.

We have been working very hard to reduce our impact on seals. Since 2011, when the licensing process came in, we have reduced the number of seals that we shoot by 80 per cent, and we are well on our way to reducing that to zero. We were well on our way with that before the news from the US, but that just adds urgency. We need to reduce the number of seals that we shoot to zero, not just because it allows us access to the US market, but because it is the right thing to do.

Back in 2011, Grieg Seafood did not have a good record on that. We shot 23 seals on one farm, which was not acceptable. Since then, we have worked hard to find alternative ways to control the issue. Since January 2015, we have had to shoot one seal, which is still one too many, in my opinion, but we are working down to zero. I think that it is the same for the whole industry.

On ways to stop seal and salmon interactions, we have invested a lot in physical barriers. There are a lot of different kinds of netting to try and prevent the seals from getting at our salmon. That is our first choice of barrier. We use some acoustic deterrents where we find that necessary, but that is the next step down. We do not want to do that. There is potential for acoustic deterrents to interfere with other marine mammals, so we want to minimise their use as much as possible, but they are probably preferable to having to shoot a seal.

The Scottish Salmon Company aims to get down to zero, and we have gradually been deploying marksmen less and less. Acoustic deterrents are important and effective, and we use them on most of the sites where we have seals, predominantly in the north-west, the Outer Hebrides and Inner Hebrides, where in the past two years more and more grey seals and common seals have been appearing, sometimes in their thousands. We have third-generation families working for us and they have never seen so many seals in the Outer Hebrides as we get today. It is an issue.

Despatching a marksman is our last resort and is taken very seriously. We use acoustic deterrents, stronger nets, double netting sometimes, and other methods. We need more research into what else we can do to deter the seals from coming, because we have to protect our livestock.

I suppose the difficulty is how to resolve the situation once a seal gets into the net.

As a producer of acoustic deterrents, I think that that is an excellent question. I ought to declare an interest.

The short answer is that we do not want to have it as an issue. It is negative and embarrassing and is not something that the industry is proud of, but we have a legal requirement to protect our stock as well, so there is a rock-and-a-hard-place element to the issue. The levels have come down enormously and there has been a reduction of about 80 per cent. The way we manage the population is good now. There is a quota system so that we are not reducing too much from any specific area, and the number of seals shot by the industry last year was something like 0.03 per cent of the population, which is very low.

Context is important. In 2017, the capture fisheries sector recorded that 610 seals were killed, compared with the 48 that were killed by the aquaculture industry. Although the industry battles and works hard to reduce its levels to zero, it is important not to beat up the farmed industry too much when it is also an issue for other sectors.

Craig Anderson talked about R and D and how technology is moving on. Will that research be shared across the sector?

Yes. We talk to the different companies through the Scottish aquaculture innovation centre and information is shared across the sector.

I want to redress the balance a wee bit. As I have already said, my background is in farming. To suggest to a farmer that he could not shoot a fox would go down very badly indeed, but you guys are very focused on not shooting seals, which are far from being an endangered species, as there are thousands of them out there. I just wonder whether we have got a bit too hooked up on not shooting any seals at all, given that the same principle would go down badly if it was transferred into farming so that a farmer could not shoot a fox. Will you comment on that?

I can understand that. The level of shooting that we have today is not an ecological problem, but it is a reputational risk problem for us. Seals are an iconic species. People come to Scotland to see the seals, and in some ways it is nice that there are so many for them to see, but I think that the industry needs to get down to zero.

Let us leave that there and move on to Kate Forbes’s questions.

I would like to ask about the aquaculture industry leadership group, which I believe Stewart Graham co-chairs. My understanding is that the main purpose of the group is to drive the development and delivery of the aquaculture 2030 industry strategy. What is the status of the group and how is it held to account? Is membership of the group voluntary? What kind of accountability do you think that it should have, and to whom?

The leadership group is an industry leadership group so the important point is that the industry has taken the lead. It is a very collaborative group. Dennis Overton, the chairman of Aquascot, and I are the formative co-chairs of the vision 2030 group, and we took the initiative without any authority to invite stakeholders to a working group to formulate the strategy.

This is quite a small industry so we took some soundings and from that, we assembled what we thought was a representative group of public and private stakeholders to produce the strategy. After producing the strategy, using a database of industry contacts, we held an elective process—entirely voluntary—to elect members of the industry leadership group. We have light-touch and self-imposed governance. I co-chair the group with the managing director of Scottish Sea Farms, and we have two-year overlapping terms. We are not held to account other than by all the stakeholders. We are transparent and put meetings and minutes on to websites and so on.

There has been a lot of talk—and we heard it again last week—about partnership and collaboration with regulators, the Government and others in the hope that that might drive change and support the industry. Would the leadership be the group through which that could be done? Is there a role for the leadership group to take a greater strategic oversight of the industry?

The group is run with no dedicated financial or administrative resources. We all come to the table with the ability to take a work package on. It is the right place for strategic leadership of the industry and that is what we seek to provide. We have just had a review after one year of the group’s existence and we feel that the process is working quite well. However, we have had a large number of public sector and government stakeholders around the table and the power of that collaboration has been remarkable. How quickly we were able to get things moving in the right direction was something to behold. It is an interesting model and, although we are only one year in, we feel that it has worked well.

You talk about getting other stakeholders around the table. There is also a lot of talk about reputational risk for the industry. What does the industry, through the group, want from the Government and regulators in order to be able to demonstrate that it is concerned with meeting relevant environmental standards, in light of the desire to grow in a sustainable way? Does that question make sense? It was a bit waffly.

All the right stakeholders that can hold the industry to account for delivering the strategy are around the table. The strategy is premised on sustainable growth and an understanding that biology is the number 1 challenge. The group feels about right and I think that we are making good progress. It is the right forum. If we felt that more people could add value, we could look at that. There is general guidance that industry leadership groups should have about 12 members as an optimum, and we are there or thereabouts. It feels to me as though it is working well.

We have already covered quite a lot of ground on regulation. You might know that we were visiting in Lochaber on Monday. Somebody there told us that they feel that the regulatory system has become less predictable and that, whereas it used to be fairly clear that, if you did certain things, planning and everything else would be approved, now, despite having done what it thought it ought to do, the industry is going into meetings without knowing what the outcome will be. It would very much depend on which councillors turned up. We were given an example of one meeting in Lochaber at which the four local councillors turned up and opposed the application, but six outsider councillors turned up and supported it, overruling the local councillors. Have things become less predictable over time in that respect, or are there problems with that?

12:00  

There is probably not an issue with regulation per se; the issue is more one of local democracy. Nobody in the AILG would advocate not having local democracy. Cases involving different views from different councillors on any particular committee are simply a function of a democracy—it is a good thing. It is up to us in the industry to inform councillors when decisions are to be made.

I echo what Stewart Graham has said. There is now a pre-application process for planning; then we have screening and scoping; and then there is the full planning application. That gives the industry a pretty good steer on whether an application is worth pursuing. There will always be some slightly subjective areas, as much as we try to make everything objective and scientifically based, and there is always a risk that a decision will go a different way from what we had imagined, but that is part of the game. That allows for local democracy, which is not a bad thing.

I have a question that we have shied away from—or rather, I encouraged everyone to shy away from it, because I was hoping that I might get a chance to ask it at the end. It has become evident to me during this inquiry how much the industry has moved from where it was at the start. The industry has developed a different knowledge base.

On our visit to Lochaber earlier this week, there appeared to be agreement that some farms were located in areas where today it would perhaps be thought inappropriate to site them. I have also heard during our evidence session that farms are limited by the mass of fish that they can hold. That was echoed by the evidence that we heard from the wild fish sector.

My question is a general one. As the industry has moved on—whether this is about location in relation to wild fish or other fish, or even about maerl beds, which we heard about at the ECCLR Committee—is there scope for it to consider repositioning farms in less environmentally sensitive areas? Would part of that process be to combine or increase the size of farms in some locations so as to allow other farms to be removed from the industry elsewhere?

Grant Cumming touched on that so, although it is important that all of you have a chance to answer, he can answer first.

The process is on-going. I mentioned earlier that, back in 2010, we were operating on 33 sites. We are now operating on 17. Most of the sites that we have chosen to shut down are relatively sheltered. The reason why we are moving away from them is that, because they are sheltered, they are less able to sustainably support a large amount of fish, they tend to be areas with worse sea lice issues, and there can be worse problems with gill health, too.

There is another thing that has changed over time. Thanks to Stewart Graham and other people in the supply industry, the equipment that is available now is much more robust than it was previously. As technology moves on, we are able to move out into more and more open waters. The movement away from inshore sites should definitely be encouraged by regulation. That would free up those sites for other water users, and we would move offshore.

The process with the Crown Estate, whereby we are essentially being charged for not using sites, is encouraging us to give up those sites. The same thing is now happening with SEPA. We are not holding on to sites that could be freed up for other purposes. A move to bigger, deeper sites would be beneficial, and it may be worth looking at how marine spatial planning can help us to identify areas that are more suitable for aquaculture and to specify where the industry should move to.

Our business was made up of seven small farming companies that were put together to form Lighthouse Caledonia and then the Scottish Salmon Company. Those farms were traditionally small and in isolated areas, and the costs for looking after the fish were down. Back then, we had a lot of 700 to 800-tonne sites; today, such sites are minuscule—in Norway now there are 5,000, 6,000 or 7,000-tonne sites. We have been going through a process of closing down the smaller farms and, with new applications already in place, moving them out elsewhere. An example is Greanamul in North Uist, where it is pretty stormy.

We support the proposal to relocate and will look at moving away from our smaller sites, as we have started to do.

There is an opportunity here to remove some of the conflicts that exist between the various stakeholders and the industry, particularly between the wild fish sector and the industry, Any relocations should be evidence based. You cannot come to a farm and say that it should be relocated because you presume that it has an impact; evidence needs to be presented if that farm has been operating for some time legally and in a good way.

A startling fact is that Norway produces about 1.2 million tonnes of salmon and has 250 active farms, while we produce 170,000 tonnes, give or take, and have 207 active farms. Our farms are fundamentally smaller—SEPA policy has kept the farms small. We have farms that produce 2,500 tonnes that could sustain 5,000 or 6,000 tonnes.

If there was consolidation activity to reduce the stakeholder issues while maintaining the social benefits, the value and the wealth that the industry creates in those areas, there could be an environmental gain, too. Although people have that in mind, and many of the companies and the regulators are working towards it, there is not yet a single body in Scotland that has taken hold of the issue and said that we can have a step change in the industry and take it forward.

Do you want to comment, Scott? You have probably been saving yourself for this question.

I tend to agree with the comments of the other panel members. It is also important to note that part of the AILG’s discussion is about how we move forward and make use of greater, more exposed sites. Richard Lyle asked earlier about the fact that we produced 160,000 tonnes in 2002 and produce 177,000 tonnes now. That is fundamentally because we have been self-regulating. I know of a company in the west of Shetland that has consent to produce 30,000 tonnes that it does not use because it considers that doing so would be too much of a biological and environmental risk. That is where we are. In order to optimise the consent that we could have, we should be moving to more appropriate sites.

I want to add, perhaps uncharacteristically, a note of caution in the use of words such as “offshore” and “open seas”. It is perhaps not well understood but easy to say that farm should move offshore and to more open sea environments. There are issues and constraints involved, because those are harsh, hostile and dangerous environments; we must remember that people would have to work there, too.

I encourage the committee not to consider that moving offshore to bigger sites is a panacea. That must be a progressive process—although nowadays we have much more robust equipment, the process must be one of feeling and moving our way slowly forward. It is not a case of unlocking and suddenly moving everything offshore; it is a difficult and challenging environment not just for people but for the fish and their containment and the environmental challenges that can come with that.

I thank, as I am sure the committee does, Scott Landsburgh, Ben Hadfield, Craig Anderson, Grant Cumming and Stewart Graham for their input. I hope that you all consider that you have had a chance to say all that you needed to.

12:09 Meeting continued in private until 12:31.