Fall-out over salmon compensation

By JOHN ROBERTSON

A row has broken out after the Scottish government decided to compensate small companies hit by its regime for combating infectious salmon anaemia (ISA) in Shetland but offer nothing to multi-nationals which are losing millions of pounds due to the strict controls imposed.

A £1.5 million aid scheme announced on Tuesday will stop Shetland’s organic sea trout com­pany QA Fish going out of business and help smolt suppliers who are having orders cancelled because the ISA zone is not being restocked this year.

But the refusal to help Shetland’s biggest operators, such as Norwegian -owned Hjaltland Seafarms and Scottish Sea Farms, has been condemned by the industry as discriminatory and sending out the wrong message to people who risk investing in Shetland.

Through no fault of its own tiny QA Fish, only formed last year, has to destroy an entire year’s production of 220,000 young trout because government controls forbid it mov­ing the fish from the Loch of Strom to grow in the sea.

Director Gordon Johnson said the controls meant the company would have no fish to sell during 2010, a loss of business which no small company could sustain. It would have had no alternative but to go out of business once this year’s mature stock had been harvested and sold from Aith Voe in the summer.

He said he was very relieved that a compensation scheme had been agreed to make up for the lack of income but it remains to be seen whether the award covers all the losses, which could include losing its current customers.

It’s been a pretty hellish few weeks,” Mr Johnson said. “I’m a bit more relieved than I was a fortnight ago.”

The £1.5m scheme was an­nounced by the new environment minister Roseanna Cunningham. Her statement said there would be no compensation for the culling of ISA-affected stocks, in line with practice in other salmon-producing countries in Europe.

The omission of the big operators came just four days after con­firmation of a third case of ISA virus in the zone off Scalloway. It means Hjaltland is forced to slaughter a second entire farm of fish without getting a penny of compensation.

Scottish Sea Farms, the first company affected by the virus, was able to harvest and sell its fish from cages off Hildasay because they were big enough to market whereas Hjaltland’s has been too small.

Shetland Aquaculture general manager David Sandison said there had been a collective outburst of anger at a meeting of fish farmers on Tuesday. He said the industry was “absolutely appalled” at the government’s discrimination against larger companies, particularly after being led to believe by the previous minister Mike Russell during a visit to Shetland in January that the government would look favourably on compensation. He said the assurances given had been “pretty strong” and they now felt let down.

He said the treatment of the industry was not in line with the way other livestock industries are compensated in this country when they suffer disease like bird flu or foot and mouth.

The denial of aid leaves the bigger players in the industry in the same predicament they were in the first time ISA broke out over a decade ago, despite the years of effort put into getting a compensation scheme included in the Scottish aquaculture bill in 2007, which the industry had believed would mean help if ISA returned.

The Shetland industry could lose around 15 per cent of its total production due to the whole ISA-affected area off the south-west Mainland not being restocked with salmon this year – a loss of perhaps £20m.

Companies have been trying frantically to find alternative sites to put their smolts in. Some agreements have been entered into to have them farmed in sites in the North Mainland but Mr Sandison said around two million fewer smolts were likely to go to sea this year.

Hjaltland and SSF could be looking at a drop of up to 30 per cent in their Shetland activities due to the ISA control measures, he said, which would impact on their workforce and on the jobs of suppliers. Another company, Shetland-owned Skelda Salmon, has been growing fish for the Norwegian company Lakeland and has no sites available for smolts.

The ISA-affected area has been the source of other problems for the big salmon farmers recently with a chronic problem with sea lice and fish diseases. Mr Sandison admitted the industry had been criticised for its management practices but it was actively dealing with the issue, coming up with a new plan to start afresh in the ISA zone, farming it as one co-ordinated area. A meeting was also due to take place this week to review each of the 10 management plans that are currently in operation for different fish farming areas of Shetland.

Despite the protest at the limited scope of the aid, it is a godsend for QA Fish, although it still has to be sanctioned by the EC in case it breaches state aid rules. The company only started in business in April last year after the organic sea trout business was bought from the administrators of the failed No Catch fish farming empire by Mr Johnson, a former No Catch director, and Robert Williamson. They now employ seven people and six part-time when processing fish through the small factory in Scalloway each week during harvesting.

The doomed smolts in the Loch of Strom were produced by the private hatchery run by Paul Featherstone at nearby Kergord. Strom has brackish water which allows the young trout to acclimatise to the mix of fresh and salt water before going to sea. But because the seawater which enters the loch comes from the zone affected by ISA, the government included the loch in its movement control zone.

Mr Johnson said there was not enough room or depth in the loch to keep the fish there as they grow.

The company is due new smolts from the hatchery in December and is looking for an alternative brackish loch to put them in because the Loch of Strom is effectively no use for the next two years due to ISA controls.

With the salmon industry was worth around £324 million to Scotland, Ms Cunningham said it was vital the government did all it could to support the industry through the ISA difficulties.

“We have decided to focus our support on those small and medium-sized enterprises which are least able to endure an occurrence such as this. The package of financial support we have announced today will help the affected businesses stay on their feet, which is particularly important in the current economic climate.”

The government said the SIC would work with it to financially assist affected Shetland businesses.

MSP Tavish Scott gave a guarded welcome to the scheme but wanted to hear the views of the firms affected before giving it his full support. He called for the ISA restrictions imposed on fish farmers to be reviewed.

He said: “I am pleased that the details of the scheme are at last being worked out. Help was promised at the end of January when the then environment minister Mike Russell was in Shetland. But little progress was then made on getting the details sorted out – no doubt it was not helped by the ministerial reshuffle.”

The third ISA case was confirmed on Friday by the government’s Aberdeen-based Fisheries Research Services (FRS). It involves Hjalt­land’s site north of Papa, close to its other infected site east of Papa. The virus was first confirmed on 2nd January among fish in Scottish Sea Farms site east of Hildasay.

Hjaltland managing director Michael Stark said the site would be emptied of fish in accordance with government policy, leaving the company with fish at only one other site in the Scalloway area. The company was fully co-operating in the government’s objective to eradicate the virus.

A code of practice to avoid and minimise the impact of ISA was written jointly by the industry and the government in 2000.

Reacting to the case, the Scottish Salmon Producers’ Organisation said all the appropriate biosecurity precautions were already in place because the farm is in the existing control zone.

Chief executive Scott Landsburgh said: “With 33 out of 40 sites in the south-west of Shetland now empty of fish, we remain confident that the virus will be contained within the control and surveillance zones.”

Meanwhile, an animal welfare pressure group Animal Concern has called for the whole Shetland salmon farming industry to be quarantined and for the SIC to prosecute fish farmers who fail to tackle sea lice infestation, which it said was linked to problems like ISA due to weakening their immune system.