Rural Development Committee, 24 Apr 2001

Meeting date: Tuesday, April 24, 2001

Official Report 296KB pdf

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Diseases of Fish (Control) Regulations 1994

Item 2 deals with petition PE272, which was submitted by the National Farmers Union of Scotland. It seeks amendment of the Diseases of Fish (Control) Regulations 1994 to include compensation payments, rights of appeal and access to scientific data. Representatives from the NFUS and the Scottish Executive are here to give evidence on the petition. In the papers that have been circulated, members should have a copy of the Official Report of our meeting of 6 March—when we discussed the petition briefly—a copy of the petition, the NFUS briefing paper and the Executive response to that submission. Members should also have received a bound volume from the NFUS with additional statements relating to the petition.

The purpose of today's discussion is to examine the case being made by the petitioners in the light of the response that has been made by the Executive. Our first witnesses are from the NFUS. They are John Kinnaird, Professor Ron Roberts and Richard Clark. I invite them to make the brief opening statement that I understand they plan to make. Following that, members can direct questions to the panel of witnesses.

I thank the convener and members of the committee for giving us the opportunity today to speak to our petition, which has in excess of 2,500 signatures. I will leave the petition with the committee at the end of the meeting. The NFUS position on the matter is clear: all farming practices rely on good husbandry and practice to deliver quality produce wherever that is required. It also relies heavily on good science and good science should never, at any time, appear to be flawed. Any farming practice, however mixed, relies on the people whose jobs make them part of the rural community. In many instances, that rural community is very fragile.

Without making this challenge to the Scottish Executive's position, the NFUS would be accepting that members have to carry out their business with an uninsurable risk. That would mean that the Government could confiscate their property and do so without compensation. That would be a dangerous and biased precedent to set. I will pass over to Richard Clark of Maclay Murray and Spens, before Professor Ron Roberts, an internationally renowned professor of aquatic pathobiology, concludes our presentation.

At the committee's meeting of 6 March, members decided to invite evidence from the petitioners and officials of the Scottish Executive. The petition that members are invited to consider has, as its primary objective, the introduction of a scheme to pay compensation to those who suffer loss as a result of the imposition of slaughter or containment orders in respect of the fish disease infectious salmon anaemia. The right to obtain full scientific data and information and the right to appeal are secondary to that prime objective.

As is clear from a number of statements that have been made by ministers on behalf of the Executive, and as is set out in the Executive's letter of 19 December 2000 to the Rural Development Committee, the United Kingdom has chosen not to agree to pay compensation for losses associated with the list 1 disease ISA. The petitioners seek to redress what they and the industry they represent see as an unjustified discrimination.

There is no bar in law to the payment of the compensation that is sought. As the Executive has stated, its position is that there is no legal obligation to pay compensation in the case of fish. Under the Animal Health Act 1981, Government policy provides for compensation being paid to the owners of other animals that are slaughtered to contain or eradicate disease. The reason for the distinction the Executive is making has been stated to Parliament as being that of a long-standing policy not to compensate for fish. No reason for such a policy has been set out.

Evidence from the implementation of the Executive's policy following outbreaks of ISA demonstrates that even when fish are of a sufficient size and age to be marketable, there is likely to be little or no financial return to the farmer following such salvage sale. The costs that he will incur complying with slaughter requirements or site clearance under the regulations, combined with the depressed price on the marketplace, will—as likely as not—account for the overall salvage price that is obtained.

Furthermore, fish on a farm will all be at varying stages of development. At the time of service of an order, many fish will be too small to become marketable. Will the farmer still be able to buy his feed or obtain credit to finance the purchase of feed once it is known that an order has been served on his farm? Without feed, no fish can be grown on to marketable size. Smolt—the baby salmon—caught by the existing policy at a freshwater site must go into seawater not later than May in any year. Their biological timetable is not capable of being determined by the Scottish ministers.

None of this takes account of the significant cost, particularly to a small farmer, of fallowing a site, which might last for up to two and a half years. The hardship resulting from the Executive's choice not to pay compensation thus remains largely unaffected by the withdrawal scheme that has been introduced with effect from 27 February 2001.

The petitioners support the practice of good husbandry and farming by NFUS members and within the industry as a whole. However, where ISA exists in the wild, an outbreak among farmed stock must always remain a possibility. The petitioners understand that the Executive's scientific advisers have concluded that ISA exists in wild fish stocks, albeit falling from 5 per cent to 0.5 per cent. Not only is that, as the petitioners contend, confirmation that ISA is endemic in Scottish waters—0.5 per cent is one in 200 fish—such a finding is not surprising.

Good science, which, as Mr Home Robertson has told Parliament, must underpin the Executive's considerations, indicates that ISA has been around since the ice age in waters shared by Norway, Iceland, Scotland, Ireland, Canada and the east coast of the United States of America. ISA is known to be present in Norway, Canada and, most recently, the USA.

In the papers that we have provided, members will see that Dr Marian McLoughlin, who is not only president of the Fish Veterinary Society but currently on leave from her position as head of the fish diseases unit of the Department of Agriculture and Rural Development in Northern Ireland, concludes that eradication of a viral disease from the aquatic environment is impossible. The petitioners contend that ISA is poorly infectious. Professor Roberts, who is a member of the Royal College of Veterinary Surgeons and an international consultant on the control of epidemic and endemic fish diseases to, among others, the United Nations, and who is with us this afternoon, concurs with that view, which he addresses in detail in his statement.

Independent sampling and testing carried out by Aqua-Lab AS in Norway on the fish removed for slaughter at the Nordvik Salmon site concluded that none of the fish showed any signs of ISA, supporting the conclusion that a policy of eradication frequently involves the slaughter of largely healthy stock. The witness statements that have been provided to the committee, which describe the devastating effect upon an important Scottish industry of that flawed policy, need no further amplification from me. It is a flawed policy that is not based upon Mr Home Robertson's good science. It is a flawed policy in which no reason has been given to Parliament for the Executive choosing to refuse payment of compensation.

I commend the petition to the committee. The witnesses are now open to questions from members of the committee.

We have reached the completion of the NFUS submission. I had understood that the representatives of the Executive did not want to respond directly, but I will be delighted to hear from Gordon Brown.

There was some mix-up over whether we would respond but I think that, on reflection, we would like to. I would like to found my response on the submission that we gave back in December; that is our starting point. However, that was four months ago, so I would like to take the opportunity to update the committee and emphasise a number of points in that submission. I would also like my colleague, Dr Ron Stagg, who is deputy director of Fisheries Research Services at the marine laboratory in Aberdeen, to say a few words.

I shall begin with a couple of general points, following the order of the submission that we gave in December. The petition implies that the strategy that we pursued on ISA was of the Executive's making. That is not so. It is worth emphasising that the Executive's handling of ISA was driven by our obligations under EC legislation and the objective was, and still is, to eradicate the disease.

It was a terribly difficult period. At its height, the outbreak ran for 18 months. We had to take difficult decisions and develop certain measures during the period of those outbreaks. It was, after all, the first time the disease had appeared, not only in this country but in the European Community. Driven by European law, but with some uncertainty along the way and with the need for measures to be developed, we therefore had a very close relationship with the Commission authorities, sharing information and taking advice from them. We also kept the Standing Veterinary Committee and other member states closely informed of what we were doing. Advice was also sought from EU fish health experts.

Last year, as the petition says, we had a predictable and rigorous audit, from the Commission's own inspectors, of how we had tackled the outbreaks. I was pleased with the generally satisfactory report that they produced after their visit.

Lessons have undoubtedly been learned over the past three years and the strategy has developed along the way. One of the key changes in the policy has been the additional flexibility that we have managed to persuade other member states was necessary over the withdrawal of fish from infected farms. In the early outbreaks—indeed in most of the outbreaks—we were faced with the requirement for immediate slaughter. We still retain that option under the flexibility that has been negotiated, but we now have options to look at each case on its own merits and perhaps have a more staged withdrawal, depending on the risks involved.

We have nothing of substance to add to what was in our earlier response on compensation. We have to accept that there is a fundamental difference of view between the Executive and the petitioners on that point; the matter is now before the European Court of Justice. The committee may be interested to know that, on 15 May, somewhat sooner than expected, the European Court of Justice will take oral hearings on the issue of entitlement to compensation. The industry petitioners, the Executive and the UK Government will be making observations at that time. That should mean that, by late summer or early autumn, which is sooner than expected, we should have a decision about the entitlement or otherwise to compensation. I believe that there will be a report of the court hearings in May and a judgment once the court has come to its conclusions. If it helps the committee, I am happy to make those available to members in due course.

The NFUS petition mentions access to the European Community's veterinary fund, whereby member states may claim back a contribution to the costs that they have incurred dealing with a disease such as ISA. I want to draw to the committee's attention the fact that, on a recommendation of the European Parliament, the Commission has made a formal proposal to add ISA to the veterinary fund list. It is being considered by member states and, if approved, would allow member states that are dealing with ISA to seek a contribution from that source.

On page 3 of our submission we mentioned the Highlands and Islands restart scheme, which ministers set up. The figures are slightly out of date—the committee might be interested to know that 17 companies have been assisted to the tune of £2.9 million. Six other applications are under consideration. If they are approved, they will take the value of the assistance up to about £4.3 million.

Highlands and Islands Enterprise will produce a report of the activities under the scheme in the past 12 months, which is required as part of the state aids approval. We will have to submit it to the Commission. The European Committee has considered ISA and asked to see the report. I will ensure that this committee also sees it.

The figures reflect an element of underspend of the original £9 million that was made available, but the scheme remains open until March next year. Although we all hope and pray that there will be no further outbreaks of ISA, we cannot rule out that or further claims on the fund. Ministers will review the budget position later in the summer.

On the right of access to scientific information, we realise that the issue of scientific rationale and results, and the decisions that are taken on the back of them, is a complex and sensitive area. Despite claims to the contrary by the NFUS, the Executive has tried hard, using a number of means, to explain the policies and to provide the results and the decisions that they have led to. Some of the concerns may relate to the early days of ISA, three years ago. Things have changed, but as I said earlier there were difficult decisions in difficult situations in those times and perhaps we were not as quick off the mark in certain regards as people would have liked.

However, I do not recall at any time any refusal to provide scientific results and information about how they informed decisions. We have used a number of means to communicate information. In the early days, we conducted industry briefings, or roadshows as we affectionately called them because we took them round the country and met groups from the industry. Two years ago, we introduced a written reporting system for all test results taken from farms. Farmers and their veterinary advisers are routinely invited to meet scientists at the marine laboratory and hear for themselves how results were arrived at and how they informed decisions. Most of the companies that have been affected by ISA over the past three years have taken up that offer. Nobody thus far has challenged the scientific rationale or the results that we have arrived at.

During the height of the ISA problem, we established a joint working group from Government and industry to share information and to try to ensure that we took steps to avoid a recurrence of the disease. That led to the issue of a code of practice for the industry last year. Due to the success of that group, we have established a joint Government and industry aquaculture health group, which allows us to consider existing problems, review policy where appropriate and look ahead, to try to anticipate problems and ensure that we have in place appropriate measures. The industry would agree that it is working well. It has been a useful means of communicating.

I hand over to Dr Stagg to speak to a number of scientific points.

The first point I want to make is on the nature of the disease. I disagree with the references in the petition to its infectiousness and its seriousness. ISA is a very infectious disease. Its epidemiology—the ease with which it has been broadcast around Scotland—shows that to be the case. There is also an emerging scientific or experimental basis, which is the infectious dose of ISA that is required to cause mortality in experimental systems. The petitioners are confusing the survival of the agent in the environment with its infectiousness.

The seriousness of the disease stems from whether it is identified in its early stages. From cases where we have known epidemiological links, we know that the incubation time of the disease on a farm can be at least three months. If it is allowed to progress, it can cause 15 to 30 per cent mortality in a cage. There is a misunderstanding here, in that it appears that if a farm is caught early, it is not a serious disease; but if it is allowed to progress, all the evidence from Canada, Norway and those farms in Scotland where it has occurred is that it causes serious mortality.

Finally, there is emerging evidence that sub-clinical infections are important in the transmission of the disease. We know that—experimentally at least—fish that have been exposed to and survived an ISA challenge can remain infectious and transmit that disease to naïve individuals up to 18 months after the initial challenge.

The second issue I want to address is the origin of ISA in Scotland. There are a number of hypotheses to explain it. We will never know for sure which hypothesis was correct and are unlikely unequivocally to demonstrate one over the others, but the hypothesis that the petitioners have opted for, which is that the disease is endemic in Scottish waters, does not stand up to the scientific data that is emerging from the epizootic studies. It is important to say that its origin is not especially relevant to the control measures that we put in place at a farm.

That brings us on to controls. As the petitioners rightly say, the best prevention is good husbandry. To that effect, we established the joint working group, which did a lot to improve husbandry in the industry and, as Gordon Brown said, to bring about codes of practice. However, we are still left with what we do in the event of an outbreak of the disease.

It has been demonstrated, especially in Scotland and less so in Norway because it had the disease for a good number of years before it even understood what it was, that standard epidemiological controls—in other words, in the event of an outbreak of the disease to stamp it out—is the only effective control measure. The petitioners would seem to agree with that when they say that affected cages should be culled. There is no alternative at present because, although an experimental vaccine is being developed in Canada, my contacts there tell me that it is at a very preliminary stage. In the changes that we have brought about within the EC directive, we have made provision for the use of a vaccine, should one emerge.

I must also address misdiagnosis. In three cases in Scotland, ISA has progressed to the stage at which many fish were dying in the cages. I think that the official service has done a good job. The officials do their job properly when they identify at an early stage of the infection which farms are infected. Unfortunately, in some cases that has been misconstrued as misdiagnosis, because only a few fish have shown clinical signs of infection and there has been no large-scale mortality.

The diagnosis of confirmed cases in Scotland was not based on any single test. Changes have been made to EC legislation, but the legislation that was then in place required that a range of evidence—from clinical signs right through to laboratory tests—be used before a decision on confirmation was reached. Although some of those tests were difficult, in the cases that we have looked at, when all the tests are taken together, the weight of evidence for confirmation has been overwhelming.

Because of the changes in EC legislation and the indications from the Commission, we will in future be required to confirm on the basis of virus isolation. That is in common with nearly every other notifiable disease. Virus isolation is the preferred method of confirmation for diseases in the Office International des Epizooties international guidance. Let me add that, now we have that in place, the withdrawal of fish from an infected farm can be done in proportion to risk. Under the new withdrawal scheme, if there were no signs of mortality on a farm or if the risk to adjacent farms was in proportion, those farms would be allowed to proceed to normal harvest.

Finally, a lot of comment has been made that misquotes the OIE guidelines about the use of unvalidated tests. The guidelines specify that the tests should be used for confirmation. The tests are used by the OIE reference lab, by Canada and by ourselves. Tests are validated for confirmation. A positive result confirms the presence of the virus. Tests that are used for screening purposes—to demonstrate that a fish is free of the agent—are not validated, because the tests do not always report the virus to be present when there are clinical signs that the virus is present. That is the difficulty. There is a fundamental difference between the use of tests for screening—to demonstrate absence—and for confirmation. A positive test is a positive test.

Thank you. Before we come to questions, I take the opportunity to welcome David Cassidy, who is the only person I have not so far welcomed. He, too, is part of the Executive delegation.

I invite members to address questions to specific witnesses. However, I will be prepared to accept comments from witnesses on other questions and answers that they have heard.

Compensation for the salmon farmers was one of the first issues to confront Parliament, so the issue has been around for a long time. Many members found it irrational that the Government was not paying compensation, given that there are other circumstances in which compensation is paid when livestock is slaughtered because of Government policy.

There is a slight danger of being blinded by science. I take on board the previous comments, but the petition refers specifically to compensation. I appreciate that there are many interesting scientific debates, which the witnesses may wish to discuss after the meeting, but we want to address the one issue—compensation—that is the crux of the petition.

In the light of that, perhaps Gordon Brown will respond to a couple of comments. First, we have heard that it is not the Government's policy to compensate under such circumstances. Clearly, Governments come and go, but the policy seems to have remained. When was the policy established? Who established it? When was it reaffirmed by the current Government? Secondly—perhaps the NFUS and the Executive will comment on this—what is the situation in other countries? Do other countries pay compensation for the disease? If not, what reasons are given in those countries?

Richard Lochhead describes not paying compensation as irrational. The conclusion might be made that compensation must as a matter of law be paid because to do otherwise would be irrational. That issue is before the courts, so it will be resolved and we will get an answer in the fullness of time. The question must therefore be at the lower level of policy. Is the policy irrational? Is there a justification for the policy? Given the fact that, as a matter of law, we are not required to provide compensation, what is the rationale and justification for providing it?

I would put that on its head: what is the rationale for paying compensation to farmers for other diseased animals? I do not wish to teach anyone how to suck eggs, but we must look at the tradition and history of the issue.

As we know, fish farming is a relatively new aspect of farming, but land-based farming has been around for a long time. Since the war, support for land-based farming has been rooted, in the first instance, in the need for the production of food and, more recently, in recognition of the contribution that farming businesses make to the environment and to land management. When finite resources are being allocated, farmers have enjoyed support in the production of food and—perhaps more recently—in recognition of the environmental contribution that they make.

Fish farming does not make the same contribution. Indeed, one might argue that it makes no contribution to land management. Therefore, when we are allocating finite resources to support business, the question is, "How do we support businesses?" The business might be an electronics factory or a new car factory, but we put public funds into such businesses in recognition of the jobs that they provide and of their contribution to the economy. That is why there is a compensation scheme, which has been processed and put in place through HIE, to recognise the economic contribution that fish farmers make rather than to give economic support against a business risk—which is represented, in this instance, by disease.

I will attempt to answer Richard Lochhead's second question, which was about arrangements elsewhere.

I would like an answer to the other question as well.

Was the first point on when the policy was established?

Yes.

To be perfectly honest, I do not know. I might as well be honest about that. However, you are absolutely right in the sense that successive Administrations across the United Kingdom, including the post-devolution Executive—the issue blew up immediately after the Parliament was established—have taken the same view over a number of years. That is the best that I can do. I am not sure how far the policy goes back.

The second point was about provisions in other countries. I do not believe that there is any form of compensation support for fish disease losses in the European Community. One might argue that there could be, because there is a big trout industry in the Scandinavian countries and a big bass and bream industry in the Mediterranean countries.

Norway has had an insurance arrangement for some years, although that arrangement is struggling a bit, as Dr Stagg and I discovered during our fact-finding visit two or three years ago. There was a danger that claims might exceed premium and income to the insurance companies. However, I believe that insurance remains available there.

I do not know the details of the position in Canada, but I recall that it has put in place a system that is based on a levy from the industry to form a war chest against the possibility of outbreaks. That is the best description that I can give.

Dr Stagg made a glib and not utterly correct statement about the scientific community's general view on what the Scottish Executive rural affairs department is doing. That is not especially relevant to compensation, but I put a marker down about it.

Except in Dr Stagg's unpublished research, there is little evidence for the claim that the virus is not endemic in Scottish waters. The universal view—for which there is good scientific evidence—is that the virus is endemic in all the other countries around the north Atlantic. There are no snakes in Iona because St Columba cast them out, but it is difficult to understand why there should be no infectious salmon anaemia in the west coast and the Shetland islands when the disease is endemic elsewhere.

We must consider the unique compensation situation in this country as compared with the situation in other countries. The Government's non-compensation policy is likely to destroy an industry that represents 40 per cent of Scotland's food exports. The industry is large and significant. It has a good technical base, with major opportunities for exporting more than just fish. I would like MSPs to bear that in mind. We are not talking about a little fringe enjoyment of a few crofters. The industry is significant. It is excellent that crofters and others derive economic benefit from it, but it will die if we do not resolve the problems that the regulations are creating.

It has been suggested that the aquatic health group is a meeting of minds of the industry and SERAD. If that is the case—from what members who represent farmers tell me, it does not appear to be—why was the system introduced without consulting farmers? The farmers insist that they were not consulted on the use of the presence of the virus as an indicator that meant the same as the presence of a clinical infection. That is a separate issue.

Scotland has a problem because no compensation is available and the risk is uninsurable, unlike in other countries, where one of those options is available. Norway has an insurance scheme. I spoke to the head of fish diseases there last week. He is a former student of mine—he trained in Scotland. He assures me that Norway's scheme works well. The number of ISA cases there increased slightly this year. He suspects that that is because Norway has had much bigger runs of wild salmon this year. As we know, the disease is endemic in wild fish—that is his view. However, for the past two or three years, Norway has had a small number of cases, in an industry that is much larger than ours and is carried out on a longer coastline.

The Norwegians have a system for dealing with an acute clinical outbreak. I agree with Dr Stagg. When an acute clinical outbreak of the disease occurs—as with an acute clinical outbreak of tuberculosis in the dairy herd—we want to control it, break it up and remove the risk of infection spreading. However, tuberculosis is endemic at a low level in Scotland's countryside.

Similarly, with ISA, we want to be able to do what Dr Stagg insists on. The person who suffers from the situation should be compensated under a compensation scheme such as the one that the NFU is trying to encourage, or SERAD should handle the condition in such a way as to make it an insurable risk. It does not matter to the industry which system is chosen. However, at the moment, neither system applies. That situation will bankrupt the industry, because bankers will not support it, investors will not invest in companies and any farm that is wiped out is unable to rejuvenate. That is the key issue. If the Executive adjusts its policy to make insurance feasible, the problem will go away. If it is unprepared to do that, it must accept that a compensation policy is necessary.

I agree with Mr Lochhead that the petition concerns compensation. Dealing with the infectivity of ISA and such issues does not address whether compensation should be payable. Any decision that the European Court of Justice reaches on the matters that have been referred to it will not, or should not, affect the Executive's ability to choose to pay compensation, just as it has chosen not to pay compensation to date. The case in the European Court of Justice concerns whether some aspects of European Community law impose an obligation to pay compensation. The case does not concern the right to choose to pay compensation.

The petitioners have said that they encourage and support good husbandry. The Executive also supports good husbandry. It may interest committee members to know that most of, if not all, the European directives and decisions that have been issued on the control of animal diseases treat compensation as an important element of ensuring that good husbandry is maintained, by encouraging farmers to report the presence of disease on their farms. That is another beneficial aspect of good husbandry.

It is my understanding that the long-standing policy of non-compensation for fish was first referred to in 1996.

I have some questions that I hope will be quick. I understand that the European Court of Justice case concerns whether the Executive is obliged to pay compensation. That does not relate to my question. The second page of the Executive's response to the NFU's petition says that

"there is no legal obligation (or powers) to pay compensation in the case of fish."

I would have assumed that the Scottish Executive had such a power, although it might choose not to exercise it.

Will someone please tell me whether the insurance scheme that applies to the Norwegian industry is industry-led or Government-led?

I have another question to whoever wishes to respond. I am delighted to hear that 17 companies—it is hoped that the number will to rise to 23—will be involved in the ISA restart scheme. What proportion of the industry does that represent? What assistance is that to the industry?

I will deal with the first point about the response saying that there are no powers to pay compensation. It is not current policy to pay compensation, so there is no legal framework for providing compensation. If compensation were to be paid as a matter of law or with the exercise of discretion, powers would have to be put in place and legislation would have to provide for the payment. That is the point that is being made.

I understand. What about my second point?

You asked whether the insurance scheme that applies to the Norwegian industry is industry-led or Government-led. What I said was slightly wrong, as the Canadian Government has a compensation or industry-support scheme. In Norway, compensation is commercial insurance industry-led, but the outcome of any claim is a result of discussions between the insurers, the regional veterinary officers, the state veterinary office, the farmer and other local farmers. Working together, the parties find a solution that will not inhibit production in the area, will allow the best deal in terms of salvaging the fish at an appropriate time and will destroy any severely clinically affected fish through the withdrawal system in order to maximise the value of the stock. In that case, fish either die or have to be destroyed because it is assumed by the insurers that they would have died anyway.

Insurers will insure for death. We could insure for death from ISA, but, unfortunately, our fish do not get to the stage of dying from ISA as we have a bug-hunting mentality. Because the virus is endemic—which it is, given that it is present in one in 200 fish in the wild—if one goes looking for bugs in fish farms, one will find them. Once one has found fish with ISA, the legislation allows the Scottish Executive to declare the site suspicious, which makes it impossible for the farm to sell its fish, and to slaughter the stock without any agreement with the insurers or the farmers. That sort of death is not insurable.

I want to find out how our industry compares with the Norwegian industry. Are you saying that the Norwegians do not have a bug-hunting mentality? Is there a definite difference in policy between SERAD and the Norwegian Government?

That is my belief. I raised the issue with Dr Håstein last week. He told me that the Norwegians do not go looking for ISA, although they know it is there. They deal with it only when they have a clinical outbreak and they do so in such a way that the insurance covers the loss.

The withdrawal scheme has two separate parts. One is based on finding the bug in totally healthy stocks, which, in my view, is no different from finding one in 200 fish with ISA in the wild. One might find that one in 200 salmon in the River Tweed has ISA, but it would be difficult to forbid people to take salmon away from the Tweed. However, that is the equivalent of the argument that is being applied to farms. That presents a problem for the sense of a control scheme. I am not the only person who believes that it is impossible to eradicate a disease that is present in one in 200 wild fish. Recognition of that fact is key to whether our industry will grow and survive.

There should be a proper partnership arrangement, similar to that which exists in Norway, involving SERAD, the relevant authorities, the state veterinary service—which has the expertise in handling notifiable diseases and control programmes—the farmers and the insurance industry. That would ensure that we had rational and sensible control.

Do you want to respond to that, Dr Stagg?

I think that I have to. The ISA withdrawal scheme that we have adopted requires the removal of fish from a farm and is triggered by mortality. That is important to remember.

That is not correct.

The removal of fish from a farm is predominantly triggered by mortality.

"Predominantly" is not the same as "is".

Professor Roberts, I would like to hear from Dr Stagg. You can respond after that.

The sense of the withdrawal scheme is that we move towards a Norwegian-style situation. We should make no bones about that.

The surveillance that is undertaken for ISA is based on checking for clinical disease; it is not based on checking for existence of the virus. The only virus work that we have done was done to answer some epidemiological questions. We conducted a survey during the course of the epidemic to establish answers to questions such as whether ISA is endemic. We were asked such questions by the industry. We have not isolated a virus from wild fish, except in areas where there are farms that have been infected. We have established that there is some genetic material, which is very similar to the ISA virus and may be that virus, in wild fish. That material is more broadly distributed and has the level of prevalence that Ron Roberts mentioned.

We were the first people to begin to do such work. What we cannot establish at the moment is whether those agents will cause the disease. We know that when we get the kind of virus that was isolated at Loch Nevis, it is very serious and can spread very quickly. Although we are not looking for the virus, if we get indications that it is present, we have to find a way of dealing with it and of establishing whether it is the nasty agent that can spread easily or whether there is no cause for concern. That is far as we have gone in chasing the virus—such work has been done simply when the virus has been found for other reasons. Our surveillance is all based on clinical disease.

Could someone answer my last point about the size of the ISA restock scheme and the 23 companies?

It is nice to be able to agree with the NFU on something. We agree with Professor Roberts's comments on the insurance arrangements and how they operate. The only caveat that I would add is that when we spoke to the industry—about 18 months ago—it questioned the future of the arrangements because of the liabilities involved.

It is difficult to say what proportion of the industry has benefited—I do not feel able to give you a percentage. However, I would say that those who benefited are all small and medium companies in critical places, with critical jobs associated with them. The really big players have not applied for the scheme. That may be for two reasons. First, the discretionary nature of the scheme—Highlands and Islands Enterprise's schemes are usually discretionary, such as the finance for business scheme—may mean that the big players feel that they have reserves that will work against them. Secondly, the really big players are involved in the litigation that is being pursued at the European Court of Justice.

It is difficult to quantify how many companies are benefiting, but, in general, it is small to medium companies in critical places across the country. Shetland in particular has benefited. It is not exclusively salmon farms that have benefited—at least one marine trout farm has also benefited.

The NFU made the point that fish farming is a major industry that is suffering significant problems and which needs help. The committee and I would like to know how much help is being given to the industry. You are suggesting that the 23 companies are spread throughout the Highlands and Islands and that they are mostly small to medium companies.

Yes. I suspect that all the figures will appear in due course in Highlands and Islands Enterprise's report. The figures go from £9,000 up to £300,000. The money will help companies that have been hit by infectious salmon anaemia and which have taken a drop in income to recover their position. I do not recall all the details of the scheme, but there are tests for viability and compliance with good practice in future and there is a requirement for an undertaking that grants will be repaid if the company does not carry on for something like at least three years.

I want to add something to a comment that was made by Richard Clark. Whether discretion on compensation is removed at European Community level through a decision of the European Court of Justice, or through a subsequent European Community instrument, we will have to implement that through legislation in this Parliament.

I have some comments on the withdrawal scheme. I hope that they will assist Mr Rumbles in understanding the differences between here and Norway. Under the heading "Withdrawal of Fish", the scheme says that:

"When the presence of the disease is confirmed on a farm the following factors will be taken into account by the Scottish Ministers in determining the appropriate process of withdrawal".

That idea flows right through the scheme—the control of what happens is determined by Scottish ministers or the inspectors who are appointed to act on their behalf. It has been indicated to the committee that, in Norway, the farmer, the insurer, the farmer's vet and the state's vet all determine how the issue can best be resolved. I am advised that that combination of people allows the insurer—who has an input and is therefore able to mitigate his loss—to participate. The UK scheme is different, because control remains with Scottish ministers.

The main thing that we are concerned with today is whether there should be compensation, rather than how the disease should best be controlled. However, it is worth noting that the preamble to the scheme says that:

"The principles upon which the guiding European legislation are founded are that this disease should be eradicated from any place on which it is found and that whilst that is being undertaken appropriate measures should be introduced to prevent its spread.

These are the principles upon which this scheme is based and it should be read in the light of them."

As has been indicated, that applies to the question of suspicious status. The diagnostic provisions for suspicion and confirmation of the disease, as set out in the withdrawal scheme, allow SERAD officials to rely on tests that have nothing to do with the clinical presence of disease—they are for something that a farmer could not see—and have been shown to be less than entirely reliable and less than sufficient for confirming suspicious status. Suspicion can be enough to close down a business, because the restrictions that flow from it would prevent, for example, the removal of fish from site.

I ask members to take into account the example of the smolt supplier. Smolt cannot choose when they have to go into seawater. If they are not taken from the freshwater into seawater, they either die or have to be destroyed.

I will reply to part of that. Certainly, the insurance companies, with which we have had several meetings over the past three years, would not consider insurance while there was a policy of third-party or member-state intervention and immediate slaughter requirements. We have tried to keep the insurance companies appraised of the additional flexibility in the directive and the scheme to which Mr Clark alludes. Now that we have the scheme, I do not say that we will move entirely to a Norwegian model, where there is a dialogue and it almost seems that decisions are reached by consensus; the scheme does not permit that, so the ultimate decision rests with the member state.

I hope that we do not have to use the scheme again, but if we do, with the experience that we have gained and the options that the scheme gives, I hope that—subject to what Dr Staggs and his colleagues say—there will be dialogue on how to manage an infected farm from the point at which infection is confirmed until such time as there is a need to clear it. The ultimate decision on clearance rests with ministers.

I return to Mr Rumbles's question. According to Farmgate, the fish farming industry is worth approximately £250 million. The financial damage that has been done to the industry by the slaughter without compensation is estimated to be £50 million and we are talking about only up to £4.2 million or £4.3 million coming back in. That gives an idea of the scale of shortfall that faces members of the fish farming community.

I will comment on the withdrawal scheme. The criteria for removing fish are based on a risk assessment. Mortalities on the farm, their distribution, the rate at which mortality occurs, the cause of those mortalities and risks to other farmers are sensible criteria for determining whether one should take fish out of the water. They require dialogue with the farmer because the farmer provides some of the data for them. For example, the farmer is required regularly to supply the official service with mortality data.

Some of the criteria for determining suspicion are based on infection alone. The purpose of the suspicious category is to establish whether a farm is likely to progress to a clinical stage—in other words, where there is a risk to others. It is worth mentioning that small producers are in a difficult position because they produce fish not for consumption but for sale to other farmers; they are therefore of enormous risk to other farmers if they have infection. The purpose of the suspicious category is to determine whether fish are threatened and whether they are likely to develop to clinical disease; if so, one is duty bound to put in place restrictions because those fish may go the length and breadth of the country. Of course, having one's fish placed in the suspicious category is very difficult for a farmer who puts fish on the market.

ISA is not the only controlled disease in this country. Another disease, which I consider to be significantly more important if the control mechanisms for both are applied properly, is infectious pancreatic necrosis. That disease is much more important for egg and smolt producers, who have the biggest investment in technology and so on in the industry—that is the same as in any other agriculture industry. They have to produce specific pathogen-free fish—fish that are not carrying infection. The Swedish Government has ensured that Sweden no longer has any salmonella in its eggs, and we would like to be the same.

We have a perfectly good system, which I first implemented more than 20 years ago, and as far as I know it has never broken down. In a population with carriers of IPN virus, we can ensure, by testing in conjunction with the marine laboratory in Aberdeen, that only brood stock which are free of the disease are able to spawn. With ISA, the virus does not pass through the egg, so it is an even easier disease to manage.

Surely those enlightened arrangements between SERAD and producers—in the same way that the Norwegian Government co-operates with its producers—are a much better approach than looking for a virus and, even if you half find it, saying, "You are suspicious" and destroying someone's business. It will take only one or two small producers to go out of business and everyone will find that their banks will not give them loans and their insurers will stop insuring them. Our Scottish industry, which was buoyant until about three years ago, and has the opportunity to rise again, would fall by the wayside.

The concern about the relationship between brood stock and the virus is one of the most critical. ISA does not occur in freshwater, it is not passed by the egg, and it is easy to eliminate brood stock that might be carrying the virus in order to provide absolute certainty that there is no risk whatever. Even though the virus does not pass through eggs, people still want to know that the eggs have come from stock that did not have the virus. That is perfectly feasible, if we can have technical discussions instead of beating the drum and saying, "You are suspicious. You will go out of business." The companies are not told that they will go out of business, but that is the end result.

I intend to progress fairly quickly to a point at which members can discuss the strict and specific question of whether we support the call that is contained in the petition. Fergus Ewing and George Lyon wish to participate. I encourage them to be concise.

I address my question to Professor Roberts; I hope he has received some notice of it. In paragraph 22 of your evidence, you state:

"In Norway, over-stocking and poor transportation methods are two of the key aspects of poor husbandry that tend to induce the disease".

In paragraph 23, you go on to argue:

"These two factors have been identified as representing serious initiating factors in Norway and may have also played a significant part in the first clinical outbreaks and subsequent spread of clinical ISA in Scotland in 1998."

I am extremely supportive of the salmon farming industry—I hope that that is known—but I have one simple question on whether compensation should be paid. If bad husbandry leads to outbreaks of ISA, or to the greater likelihood of outbreaks, would not the payment of compensation simply encourage bad husbandry?

No. In any compensation scheme—which it is not for me to construct—it must be implicit that there is an element of proportionality. If you are the poor chap down the road who gets foot-and-mouth disease because someone has imported infected meat into his pig farm and not sterilised it, and you are being slaughtered out for the benefit of the community, you deserve full compensation because it is not your fault. If you are the guy who did the stupid thing and brought in the disease, or if you are the fellow who reared your pigs or cattle wrongly, you should not get compensation. The same should apply to fish farming.

One of the fish farming industry's problems is that it is only 20 years old. It has grown spectacularly. The potential worldwide growth of the industry is massive, and it is difficult to get all the correct structures and operations in place over a short time. The controls that exist over welfare issues, for example in the higher animals, have not properly surfaced within SERAD and the industry to ensure that such questions are addressed properly. A compensation scheme must take into account, particularly in an initial outbreak, the proportionality of one's own responsibility as opposed to one's innocence in the matter.

ISA did not break out in this country until around 1998. I believe that the virus was there all the time, although the husbandry did not until then create a situation in which it could break out. I am quite sure that mechanisms could be put in place to ensure that people who behave badly do not receive compensation.

Thank you. I have a further question for the Executive witnesses. If the industries in Norway and Canada—two of our major competitors in salmon farming—have the great advantage that their Governments provide compensation and/or insurance schemes, how on earth can our industry continue to compete on a long-term basis or, indeed, survive?

I do not know whether it helps, but a comment was made in the submission about the increase in production in Norway since the outbreak began.

A tenfold increase?

Yes. Over the same period, production in the Scottish industry has increased thirty-threefold. The average increase in growth in the industry, per annum, over the three years before the ISA outbreak, was about 15 per cent per annum. During the epidemic, in 1998, that growth was 11 per cent per annum, and in 1999 it was 14 per cent.

I see some gentlemen who are practising salmon farmers indicating dissent at some of the statistics that you have cited. Perhaps, when those people are witnesses, they can help us by giving us their response.

Judging from the silence of Mr Brown and Mr Cassidy, I take it that they accept my premise that, without a compensation scheme or an insurance scheme, or both, the Scottish salmon farming industry does not have a long-term future.

We have always put store by the high level of fish health in this country. After applying the measures of the regime, we have not had an outbreak of the disease for almost two years—it will be two years next month—and there have been no suspected cases for some 18 months. We hope that the measures—which I emphasise are part of a Community regime and part of our Community obligations—have allowed us to stamp out ISA and regain that high level of fish health.

I am disappointed that the Community is being blamed. The statement that we received from Mr Crowe pointed out that the Ministry of Agriculture, Fisheries and Food was the architect of the EU regulations. Trying to pass the blame to the EU seems to be obfuscatory, disingenuous and unhelpful.

It is worth remembering that there was only one outbreak of ISA in Scotland, which was broadcast to the other farms. That is an important piece of epidemiological information, as it implies that ISA will emerge only rarely in Scotland.

I was not around when the EC directive was drafted, but I believe that it was drafted by Community experts from Germany, Denmark and Norway, where the head of the OIE fish diseases commission is based. A range of other experts were involved, including an expert from MAFF who is also on the OIE fish diseases commission. The EC directive is being revised, and the current group of experts represents a number of countries in the Community. The industry is also being consulted thoroughly by the commission to obtain its views on the emerging legislation.

I raise a further point that is pertinent to Mr Ewing's point. I have in front of me a copy of a letter from the Bank of Scotland's business banking division, dated 19 April, which concerns a request that was made by a fish farmer for financing and support. I am happy to make the letter available to committee members. It says:

"As everyone involved in the salmon farming sector is aware, there remains the very live issue of the potential for stock to be destroyed as a result of ISA without any compensation being paid. I accept that ISA has ‘gone quiet' recently but the fundamental problem of compulsory stock destruction without compensation must be kept in mind."

That shows the attitude of the banking community to support for the hard-pressed salmon farming industry.

I have a final question for Mr Brown and Mr Cassidy. Mr Cassidy said that the failure to compensate salmon farmers, in contrast to other livestock producers, for pre-emptive culls was based on the fact that salmon farming is new. That does not seem much of a reason for making such an exception. Would it not be possible to justify the provision of a uniform compensation policy for all livestock and fish that are slaughtered in pre-emptive culls on the basis that the salmon farming industry supports up to 6,500 jobs—70 per cent of which are concentrated in constituencies such as mine, which include the remotest communities in Scotland?

The distinction that I was attempting to draw was with the historical pattern of support for the farming industry. There is a compensation package of funds to support fish farming, which recognises the contribution that fish farming makes in a community that may have limited opportunities for other businesses. That support recognises the risks that may have been incurred and the damage that may have been done by an outbreak of ISA and it provides financial support for the businesses in recognition of the contribution that they make to their local economies.

Compensation for pre-emptive culls of land animals goes back at least to 1959, when compensation for disease outbreaks was put in place.

I am astounded that the industry and its sponsoring department are sitting here fighting each other instead of sorting out the future of one of our great industries, which is especially important for rural Scotland. That beggars belief. The only beneficiaries in all this are our competitors in Norway, who must be laughing all the way to the bank as they watch us fight instead of coming up with sensible solutions.

On the issue of compensation, I invite John Kinnaird, Richard Clark or Ron Roberts to describe the pattern of ownership of the Scottish fish farming industry.

In contrast to the situation in Norway, a significant part of our industry is now foreign owned, as a result of the way in which the industry has been handled. That concerns me, but it does not alter the fact that the investors have been prepared to put their money in and create jobs and a product where others have not. There is a significant proportion of foreign investment.

Can you give us a rough percentage?

Probably more than 50 per cent. However, a much larger proportion of the smolt and brood stock stages are Scottish owned. That is where Scottish skills and science are making a contribution. For example, my company is attempting to create a £25 million high-tech investment in Campbeltown, which is a very economically distressed part of your constituency. That investment will involve only salmon, but there are tremendous opportunities for marine flatfish and cod, and for selling expertise from that base throughout the world. As a result, we should not just explore how much of the salmon industry receives Norwegian investment. Unless we can get this kind of problem right, there will be no investment that will allow us to build an industry.

I understand that. Is the Norwegian Government involved in that foreign ownership?

The Norwegian Government has a significant share of ownership of both the fish and the infrastructure. For example, much of the second largest feed company is owned by it. However, that ownership is mostly conducted through subsidiaries and in a positive way without which we would be lost for capital.

What is your estimate of the total outstanding compensation owed to the industry since ISA was detected and the slaughter policy initiated?

The losses for which we should have been compensated run to about £50 million.

So the amount of compensation is £50 million.

Yes, if those losses had been compensated. If SERAD is so confident that it has dealt with that one outbreak and now has a very robust system—which Gordon Brown seems to be very proud of—surely the risk of having to pay compensation in future is so low, it could offer to pay the outstanding amount of compensation. That would lift the other weights of the bank managers, insurers and so on and allow the industry to fly.

Would more than 50 per cent of that £50 million of outstanding compensation go to overseas companies and the Norwegian Government?

Yes, if compensation were paid. However, we should remember that they have had an asset taken off them.

I am just trying to clarify the issue.

We need that overseas investment. It is not good business to threaten overseas companies with the idea that they will not receive compensation if they invest in a foreign country. We would not take that approach with a Japanese television manufacturer.

Your evidence makes it clear that the view of the industry was that, for it to grow, there had to be either compensation or discussions with SERAD about introducing insurance on commercial properties that your companies own so that they could insure against any risk.

My next question is for the Scottish Executive officials. Why can you not introduce the same type of policies that are pursued by our Norwegian and Canadian competitors? What is fundamentally wrong with examining and copying those systems? There is not much point in securing disease-free status for the fish-farming industry if there is no industry.

Are you talking about compensation?

No, I am talking about how fish farmers in Norway are able to insure their property rights. Our fish farmers cannot be insured against the Government destroying property without paying compensation. How can Norway introduce a policy that tackles ISA while still allowing commercial insurers to underwrite the industry so that it can grow? Why can the Scottish Executive not do the same? The growth—indeed the whole future—of the industry is at stake.

One reason is that, as we are in the European Community and Norway is not, we are governed by certain legislative rules that do not apply to Norway, so Norway has a bit more flexibility.

We spoke earlier about the discussions that take place in Norway around decisions to clear infected farms, which seem to be arrived at by consensus. We do not have the same freedom in the European Community.

Is that because the Community policy is to eradicate completely, rather than to control?

The policy of the legislation is to eradicate.

Is that not the policy in Norway? Is the policy there to control and to live with the disease?

In Norway, the policy is not to eradicate the disease from the environment, because the people responsible there know that they cannot eradicate it. They are also quite certain that it is in our environment and that we cannot eradicate it. However, an awful lot more Norwegian salmon are sold, while our industry goes bankrupt.

That is the point.

We have an obligation to eradicate. I would say—subject to what Ron Stagg might add—that the Norwegians are in a different situation. Their policy is indeed about control rather than eradication. They live with outbreaks of ISA year on year; this year, there have been about 15 or 16 outbreaks.

We have tried to keep in touch with the key marine insurance companies with regard both to the old policy and to the unfolding new policy. Clearly, we cannot insist that they insure for ISA; all we can do is explain the changes that we have endeavoured to make to the policy to make the regime more palatable, so that insurance cover might be provided.

I would not want to leave members with the thought that the Executive is not supporting fish farming in this country. It does that by a whole host of other means. It has clearly not conceded on the principle of compensation per se, but it has introduced the Highlands and Islands Enterprise scheme and assistance worth £9 million. There is a new programme under the financial instrument for fisheries guidance—the FIFG—through which aquaculture stands to benefit, as it did under the old programme, from new investment and so on to the tune of several million pounds.

We operate a free fish health inspection service. The cost of that, which is in excess of £1 million, falls on the taxpayer. There is also an extensive research and development programme to support the industry. Although we may not be in agreement with the industry about compensation, there are many other issues on which we are supporting the industry.

But compensation seems to be the fundamental issue that stands in the way of the industry developing and expanding. We hope that the 6,000 jobs—many of which are in my constituency and in Fergus Ewing's constituency—will support further jobs. Compensation is surely the fundamental stumbling block that the industry and the department have to resolve so that we can go forward. Why is that matter not being addressed? Why is other, lateral thinking not taking place to progress the situation?

All these arguments—I refer to Mr Ewing's asking why we should compensate someone whose husbandry is bad or who does not look after his farm—and all the pros and cons regarding compensation have been put to ministers. I am afraid that, so far, there has been no agreement.

But there are two issues here.

I think that—

Just one more, then?

Richard Clark wishes to respond.

It may be of assistance if I remind members of the submissions that were made on behalf of the Scottish Executive, which state that the reason for not paying compensation is simply the choice of the Scottish Executive.

I was trying to reiterate the point that we have two choices as to how to proceed. I am trying to explore the second option.

Professor Roberts, what are the effects on the Norwegian salmon industry's young brood stock exports of not having a policy of eradication, similar to that required in the European Union? I know very well, from the tour conducted around the Landcatch facility at Ormsary, in Argyll, that you are very much into exporting smolts to Chile and to major European markets. If we move to a Norwegian system, under which, as I understand it, the disease is controlled and lived with, rather than eradicated—which seems to be what the Executive officials are saying is the case—what impact would that have on our ability to export high-health-status stock to other countries?

The Norwegians have had the disease since 1984. I strongly believe that we should not shift live animals around the country, never mind shifting them around the world. The foot-and-mouth outbreak has made that even more obvious to the world. Few people support extensive movements of live animals from country to country.

Movements are generally of germ plasm—eggs or milt from closely controlled, specific pathogen-free situations, which enter quarantine when they arrive at their destinations. That system is accepted for all animals and works well.

Our system is tremendously stupid, as one can import and export tropical fish, which can carry anything, from and to anywhere, but that is a different argument and is not part of the SERAD-Ministry of Agriculture, Fisheries and Food regime. Apart from that system, one can move smolts or live fish only between Ireland and Scotland, and that trade is not significant.

The market for fish movements will probably become tighter, rather than slacker. A paper is to be published shortly that will show incontrovertibly that ISA also exists in Chilean waters, which means that every significant salmon producing country in the world has the virus in its own waters. ISA is not transmitted through eggs and I do not think that it would be a long-term factor if we were either to move to a policy that is similar to the Norwegian policy or to harmonise with the Norwegian policy. Although Norway had the disease, it exported eggs to Chile every year since 1988—until this year, when most movements were stopped by the Chileans through what I view as a non-tariff barrier.

The question about insurance that Mr Lyon is trying to get at is, "Why is SERAD not able to move down the Norwegian route?" The answer is that we are hefted to the European Union system and I assume that the EU will not allow SERAD to do that. If that is so, we should consider compensation, which is the other plank of the EU system. We must have one or the other. If we have neither, we will run into all kinds of human rights problems and the industry will be destroyed.

I am keen to move the committee on to the point where we are able to take a position on the petition. One or two members still wish to raise points, but I encourage them to be brief and I ask for concise answers.

Mr Lyon mentioned exports, Professor Roberts mentioned exports to Chile and much of the evidence that we were sent also mentioned exports.

We have talked a lot about the Norwegian situation, but I understand that one of our principal competitors in the export of eggs to Chile is the Republic of Ireland. Some people have suggested that ISA is endemic in wild salmon. If that is so, what is the situation in the Republic of Ireland? Is the Scottish Executive in discussion with the equivalent agencies in the Republic of Ireland on their attitude towards ISA?

I do not know, but I personally certified eggs for export from the Republic of Ireland for about 20 years until five years ago. Almost all the eggs were exported from one farm. However, there is no difference in status, and I cannot conceive that there is any difference in risk, between a farm in Donegal and a farm in south Argyll. The farm in Donegal is at least as near, if not nearer, to any of our clinical outbreaks. However, Ireland is a different country and, by default, it cleaned up on egg exports this year.

I believe that that happened because of the demonisation of this disease in Scotland. The press releases on the alleged ubiquity of the virus in Scotland—which I believe is probably true—came to the attention of the Chilean authorities and led them to say, "In that case, we are not taking any eggs from Scotland." That opened a massive door for the Irish and the question would not have arisen had the Chileans not seen those press releases.

I will answer Mr Fergusson's question briefly.

We have had no reports of ISA problems in the Republic of Ireland. We meet the Irish regularly throughout the year to discuss both health and the market. They are, and have been, our allies in Europe when it comes to considering health issues. They see things in the same way that we do and were the principal supporters of the proposal for the withdrawal scheme under the ISA regime.

I have two brief questions for the NFUS. Each requires a one-word answer. How many jobs have been lost because compensation was not forthcoming? Do you agree that any conditions that are attached to a compensation package should include provision that there should be restocking and that employees on fish farms should have direct benefit from the package?

In excess of 200 jobs have already been lost, but a Norwegian company has paid in excess of £22 million to support the industry.

We should return to the discussion. I take on board Mr Lyon's points about our having reached almost an impasse and why we are here today. We need to get over the problem of a precedent being created in which no compensation is paid for the slaughter and destruction of stock. We cannot suffer that. It cannot be allowed to go on.

The importance and value of the fish farming industry to Scottish aquaculture and the rural economy at large is at the bottom of the matter. We cannot allow that industry to die and disappear with people having no control over it.

I have a question for Professor Roberts that follows on from George Lyon's question. You said that the majority of companies that are involved in the industry are overseas companies. That was a surprise to me. You also said that a significant proportion of that majority is owned by the Norwegian Government. What do you mean by a significant proportion? Are we asking for compensation to be paid from the Scottish Government to the Norwegian Government?

What you ask relates to retrospective questions of compensation.

I would like a simple and straight answer. What do you mean by a significant proportion?

As a result of problems with ISA and securing investment from UK or European sources, for example, 90 per cent of the Scottish industry is in foreign ownership and around 60 per cent is in Norwegian ownership. I am talking about ownership of the industry, not just cages in the sea. About 30 per cent of that ownership is in significant Norwegian Government ownership. However, BP owns a very large part of the Norwegian oil industry.

We are not talking about the oil industry.

No, but we must not demonise Norwegian investors.

I was not demonising anybody; I was only asking for the facts.

Those figures are approximate.

We have come to a point at which we can safely dismiss the witnesses. I thank them very much for coming to the meeting to help the committee. The witnesses are welcome to stay and listen to the next part of the discussion.

The committee must make a straightforward decision. The Executive's response to the petition has been considered. Should the petitioners' case be rejected, noted or supported? I would like brief comments to indicate how members feel.

The petition should be supported, subject to certain conditions, two of which have been mentioned by Richard Lochhead.

The evidence has focused on compensation. I would like to refer briefly to no right of access to information and no right of appeal, which are the second and third proposed reforms in the petition. Time has prevented us from considering those points.

I have studied the petition, the papers and the submissions of Mr Nimmo and Mr Currie. It seems that the petition must be well founded if we assume that those two gentlemen are correct in stating that they were denied access to scientific data.

Mr Brown stated that he could think of no case when the results had not been disclosed to a salmon farmer, but that is not the issue. The issue is not the results; it is the scientific data. We have to give the Executive an opportunity to respond on that issue, as time did not permit it today. I would be astonished if the petitioners' claim in that respect was other than well founded. I was very concerned about the way in which that aspect was dealt with. The right of appeal should also be supported, especially on the basis of the submissions that have been made.

On the right of compensation, the case is extremely strong. We should support it on the basis that a number of conditions are applied. First, it should be payable only when high standards of husbandry are met. Secondly, it should be subject to restocking. Thirdly, we must ensure that the jobs that are underpinned by the industry are maintained as a result of the compensation. I am sure that a scheme can be devised that would meet those objectives.

I think that it was Professor Roberts who stated that we could have an EU regime of eradication but it must be supported by compensation. I agree. He postulated the alternative of the Norwegian method, which, put simply, is control. That can be accompanied by insurability. We must, however, have something in place, so I would be inclined to support the petition.

We have not discussed the issues, especially the right of appeal, in enough detail to come to a view on them. As we know from other diseases, control measures do not carry a right of appeal. The NFUS appears to be arguing that there should be a right of appeal on this scheme, but not on any others.

I could not support the point of view that compensation should go to the 90 per cent of companies that are overseas owned. There is £9 million to help small, indigenous companies in Scotland to try to restart after the ISA outbreak. The committee should send a strong recommendation to the Scottish Executive and its ministers that they sort out the issue of insurability. That would be the right way forward. If the Norwegians can do it, I do not see why we in Scotland cannot make progress on it.

The Executive officials appeared to have great difficulty defending the position that they find themselves in. Indeed, they were embarrassed about trying to defend their position. I therefore strongly recommend that the committee put its full weight behind an exploration of a Norway-type scheme, where commercial insurance becomes a reality. The property rights and the value of individual farmers can be insured for the future. I firmly believe that that is the right way forward. It would enable the Scottish fish farming industry to continue to grow in future and to be able to compete head-on with the Norwegians, Canadians and Chileans.

I suggest that, because of some of the comments that have been made, we note the petition. We should wait to find out the results of matters that are under way, such as the review by the European Court of Justice and the application that has been made to the veterinary fund. We need to ask questions about how small, local companies are being supported and ensure that they are getting the support they need.

The Scottish Executive rural affairs department has said that it is working with salmon farmers on whether their stocks can be marketed, but smolt farmers cannot market their stocks. There are further questions that we should ask, but at this point, because the petition covers such a huge area of ground—only aspects of which we may agree with—we should note the petition and take up specific matters that have arisen.

Whatever we have heard today, the status quo is not acceptable. I echo what George Lyon said: insurance is certainly the way forward, as I see it.

We should reject the petition. People would not understand if we asked for the Scottish Government to pay compensation to the Norwegian Government because the Norwegian Government owns about 30 per cent of the industry. That is not an appropriate way forward, but neither is it appropriate to retain the status quo. We must move towards some sort of insurance arrangement. I urge the Scottish Executive to take that suggestion on board.

I disagree with Mike Rumbles. The position that he and George Lyon have taken—that compensation should not be paid simply because a large proportion of the Scottish fish farming industry is owned by Norwegian interests—is probably insulting to Norwegians and is fairly insulting to me. It is quite extraordinary that we could take that position simply because something is foreign-owned, particularly if, as Fergus Ewing suggested, compensation was tied to a restocking programme.

I agree with Mike Rumbles that the status quo is not an option. I also agree with Rhoda Grant that we should accept the petition to a degree. I do not believe that we should reject it. I have spent a large part of the last six weeks arguing for compensation that is due to a lot of individuals and businesses in the south of Scotland, albeit for a different reason. I am sure that I will spend an even bigger part of the next six weeks doing the same. I will argue as strongly as I can that compensation needs to be expanded from the position that obtains at present.

On that ground and on the others that I have mentioned, I tend to support the petition.

I agree with Alex Fergusson's comments. With reference to the Liberals, I thought that William Hague had joined us for a wee while today, given that the problem with the salmon farming industry is that Scottish companies do not get enough support to dominate the industry and stop Norwegians coming in and buying up Scottish business.

I am sympathetic to the petition for many of the reasons that Fergus Ewing gave. There is also a great need for consistency in compensating Scottish industries when Government policy intervenes, especially by slaughtering livestock. Apparently, the scallop industry was not compensated because amnesic shellfish poisoning is a natural phenomenon. Salmon farmers are not compensated because they farm salmon, which is not done on land. There is no consistency in those examples with industries that get compensation when livelihoods are removed by Government policy.

The key is that if Government policy dictates the removal of livelihoods or dictates a high cost due to the slaughter of livestock, it should step in to keep businesses afloat by compensation, just as a commercial company that takes a commercial decision to close a factory must by law compensate for doing so.

Clarification and consistency are essential. The issue will continue: the situation with the salmon farming industry is just yet another case. I am sympathetic to the petition.

I will briefly pick up a couple of points that were made by George Lyon and Rhoda Grant. I have listened carefully to the arguments that have been advanced today. I find it astonishing that a solution has not been arrived at. Surely there is an obligation on the industry and the Executive to find a way forward that ensures that we do not keep having, time and time again, to rely on the public sector to pick up the tab for things that could have been prevented or to provide a separate scheme to make the necessary insurance available.

We should take up the points that have been made by saying that we note the contents of the petition. There are certain parts with which we agree, but there are other parts to which we could not all subscribe. We should take the opportunity to raise with the Executive some of the questions that have been raised today and to urge that a solution be found for the future.

My point is not dissimilar. I have found the highlighting of different attitudes to control of ISA taken by the different producing nations interesting. There are questions as to whether the current policy of eradication is correct. That policy has to be investigated in more detail, as a number of people have said. I know that that may require action at a European or UK Government level, and not just at an Executive level, but I agree with George Lyon and Cathy Jamieson that it is ridiculous that this situation keeps coming round. Some progress on policy should have been made to enable a stable solution to be found. I concur with Rhoda Grant's suggestion that we note the petition and that we agree with a number of issues, but that we do not necessarily accept that compensation is the best possible solution to this problem.

On a point of clarification, there is a lot of agreement in this committee today and, whatever happens, I hope that we can reflect the agreement that the current situation is unacceptable.

I wish to return to Cathy Jamieson's point. An important distinction has to be drawn. Cathy says that she is fed up with the Government being asked time and time again to pick up the tab with regard to specific industries.

That is not what I said. Do not put words in my mouth.

The point is that economic loss has resulted due to Government policy, so the Government will have to compensate.

With all due respect, that is not what I said. I said that it is important that we find a solution so that we do not arrive at this situation in the future. That is slightly different.

It may have been the phrase, "time and time again," which you used, that misled me. An important distinction, which Cathy Jamieson did not address, has to be drawn: economic loss resulted from Government policy. That is why the Government is being asked to compensate.

The point that Elaine Murray made is the correct one. We have to look at the policy again. She made that clear in relation to UK and European policy. As you will know, this matter was discussed in the European Committee and it was the subject of a report.

It is obvious that there is insufficient support for the petition, which asks for three things: compensation, right of access and right of appeal. It does not specifically call for an insurance scheme coupled with a control regime as an alternative, although that point was raised today. Given that that was raised today, it might be considered to be an amendment to the petition, but we do not have a procedure for that.

I detect that there is support among the committee members who are not fully disposed to support the petition today to find a solution. We are all agreed about that. The solution may be, as George Lyon and others said, insurance coupled with control. Rather than painting ourselves into a corner and going back to our trenches, it might be useful, to find a way forward, to defer consideration of the petition and to consider further the aspects that we do not have time to explore today. As George Lyon said, they would be the right of appeal and the right of access, but we could also obtain evidence on the feasibility of the option that many members have supported—insurance and control. In addition, we could use the intervening period to see what the Executive wishes to do in response to this useful session today.

To sum up, it might be helpful if, rather than just reach a conclusion that would not take the issue forward, we defer consideration of the petition to allow the petitioners to come back soon and address the other arguments.

There is a unanimous view round the table that insurance is a way forward. Many members do not agree with a lot of what is in this petition, especially on compensation, and the committee should reject it. I know that the witnesses are listening to this conversation. They should be encouraged to submit another petition on an insurance scheme, because that would be well received by committee members. This petition should either be rejected or noted—however it should be put—but the petitioners should be encouraged to come back to the committee on this issue.

I have listened to everything that has been said. Would it be possible to note the petition and take forward in other ways the other points that have been raised, rather than defer the petition? That is what I would do.

Would noting the petition and drafting a letter to Ross Finnie, covering the issues that have been raised in the discussion, meet with the agreement of the committee? Given the consensus on the points that George Lyon raised, a letter outlining them would seem a viable way forward. On receipt of a response from the minister, we could decide how we wish to proceed.

I support what Elaine Smith said and what the convener has just suggested. Some key decisions are about to be taken, one of them in the European Court of Justice. A review of the policy in Europe is also under way. Given the importance of the fish-farming industry to Scotland, I do not think that we want to draw a line under the matter, albeit we can draw a line under the petition. I ask the committee to make a commitment to revisiting the subject when, in the light of some of the decisions that will emerge in the next couple of months, we explore how to proceed from that point.

Adjustments might be made to European policy and a decision on compensation might be taken in Europe that could change the committee's view. I ask for the subject to be kept on the agenda and that we devote some real time to it again inside the next two or three months, in the light of those decisions. The subject is too important to be allowed to drift off into the wide blue yonder. We could perhaps get the minister in front of us so that we can ask him some of the hard questions that the industry has posed here today. It is not fair to let officials defend the policy. We have to have the politicians here and to let them do that.

I disagreed with George Lyon last time around, but I am happy to agree with him this time. I accept that there is not a will to approve the petition, but I would not want it rejected. The petition should be noted. The discussions that we have had are excellent groundings for further discussion at a future date. I can live with that quite happily.

We will note the petition and we will draft a letter that covers the issues that have been part of the discussion. We will send that letter to the minister and bring the subject back to the agenda immediately we have a response, along with the other issues that have been suggested.

We will also invite the minister to come and address us on these matters.

I will give the committee an opportunity to discuss the minister's response before we move ahead with that.