Anger as agricultural co-op pushed to brink by council’s grant decision

By JOHN ROBERTSON

Shetland crofting is in crisis after the local agricultural co-op warned it would fold next month unless the SIC helps it find a way out of debt.

The troubled Shetland Livestock Market­ing Group (SLMG) runs the Shetland Marts and sells and slaughters a large percentage of the islands’ sheep. It claims it has been pushed over the edge by last week’s decision by SIC councillors to refuse a £25,000 grant to pay for a thorough review of the co-op’s affairs and produce what would be effectively a rescue plan.

The development committee withheld half the money because it wanted group members to put their hands in their own pockets too. That is not going to happen, leaving the group with little option but to follow its auditor’s instructions and cease trading.

Ironically, such a grant would normally have been awarded by officials without coming before councillors to have their say but development chairman Josie Simpson wanted it put before the committee because of controversy over a separate but related matter – Shetland Abattoir Co-op’s proposed slaughterhouse in Scalloway, which SLMG may become involved in. Currently it operates the slaughterhouse at Laxfirth for the abattoir co-op.

SLMG chairman Ronnie Eunson said yesterday everything now depended on the Full Council overturning last week’s decision when it meets on 18th February. If not, the group will fold immediately, possibly later the same day. The new abattoir plan would still continue but the Mart would cease operations and crofters would be left having to sell animals to a local dealer or ship them south for sale.

Mr Eunson said withholding half the £25,000 was “very, very disappointing” and cited it as evidence of a “lack of commitment” to agriculture by the SIC, in contrast to its generosity in helping the fishing and other marine-related sectors.

The debt which threatens to destroy SLMG amounts to around £50,000 and is understood to emanate from the sale of lamb to Faroe in 2007, which was never paid for, and meat sold to a butcher who went out of business before his bill was settled. Mr Eunson did not wish to discuss the debt but said it had gone with what little cash the group would have had available to it. In 2007 the group also lost part of its business, the Shetland Animal Health Trust, which it ran for the SIC in return for a grant. The arrangement ended due to EU state aid restrictions.

Mr Eunson said: “I have taken the view that I am not going to allow the co-operative to end up in a position where it owes any of its members or any of its suppliers money and that we will cease trading in a way that SLMG will owe nothing but we will continue to be owed money by various folk that we have done business with.”

He said the council’s economic development unit had been made aware of the debt problem as it stood last summer and that the group intended trying to trade its way out of the hole. The £25,000 review was intended partly to propose a different set-up for SLMG to make it more viable. He wanted to look at taking on new activities including paid research into agriculture, the environment and other land-related issues, which he said the council no longer undertakes. “The fisheries college does research into fisheries but there is nobody doing research into any land-based activities.”

He said the group had not wanted to get into a position of threatening closure but it had been precipitated by the council’s refusal to fully back the review and overhaul. He would not ask his members to fork out their own money to make up the £12,500 shortfall because he had no confidence that the council would back any vision for the future which might have come out of the study. “At the moment because of the lack of commitment on the part of the SIC towards agriculture I don’t happen to believe that I could recommend that as a worthwhile use of members’ money.”

He said agriculture needed to be better understood and recognised for how important it is to the survival of rural Shetland. “Agriculture is still worth £15 million to the local economy. It keeps folk in every corner of Shetland. If they didn’t have agriculture what would be the point of folk bothering to exist in some of these places – what would be the tie?”

So the future of the only group which tries to unify crofters and farmers in Shetland now hinges on councillors. Their leader, SIC convener Sandy Cluness, said the council would need to act if the situation was as desperate as Mr Eunson had outlined because it was important to have a group representing the agricultural industry.

He said the economic development unit was likely to be asked to produce a report on the matter for the Full Council. “If it is the case that they are going to close then we would need to see what we can do. What it would be I don’t know because we would need to know the full details of what their position was.”

One course of action might be to look again at the development committee’s refusal to provide the whole grant.

The convener did not accept that the agricultural sector was treated poorly compared with the fisheries and marine sectors, suggesting instead that the council did not receive as many requests for funding from agricultural organisations. “I would hope we would give any application from the agricultural folk the same attention as we do to any other industry.”

SLMG was formed in 2003 largely due to the financial problems of the groups it was created from – the Shetland Agricultural Association, the Shetland Marts Co-op, Shetland Animal Health Trust and the Shetland Flock Health Association. It was seen as a way of streamlining and uniting the industry in Shetland and was hailed by supporters at the time as a “one-off opportunity to do something positive for the agricultural industry of Shetland”.

But in practice progress has been hampered by division among crofters and farmers and the lack of cash caused by the failure to persuade at least two-thirds of local sheep and cattle producers to become members.

The group employed a manager, Karl Simpson, until 2007, with half his salary paid by the government. But the group could not afford to replace him after the grant ran out, leaving volunteer crofters and farmers to manage the operation along with its two part-time staff at the Marts.

• An application for the controversial new abattoir in Scalloway has been lodged with the council’s planning department.

Shetland Abattoir Co-operative Ltd (SACL) is hoping to change the use of the former No Catch building in Blydoit from a shellfish processing plant to one that processes meat.

The proposal has sparked complaints from residents in the nearby housing scheme who say the slaughterhouse will be in an unsuitable location if the current plans go ahead.

SACL has maintained residents will face less disruption than they did when No Catch, which went into receivership last year, was operating. The application is expected to go before councillors in the spring.