Pentland Firth Orkney Waters Marine Spatial Plan: Value Added in the Fish Supply Chain in Orkney and Northern Highlands

Section 5: Discussion of Findings

Composition and spatial distribution of landings

A wide range of species are targeted in PFOW-SA and surrounding waters by both under and over 15m vessels and all species types (pelagic, demersal, crustaceans and mollusc) are present in landings from the area. Pelagic species are harvested from the region but landed into Shetland therefore were excluded from this study. When it comes to landings that input to onshore activity in Orkney and Northern Highlands, the species composition simplifies and splits with the bulk of crustaceans being landed into Orkney and the bulk of demersal species into Scrabster in the Northern Highlands. Due to this historic split businesses have evolved to handle crustaceans in Orkney and whitefish in the Northern Highlands, however diversification does seem to be taking place in the Northern Highlands due to new export markets for Scottish crab.

Scrabster is the busiest port by value with the majority of species being landed there. All other ports along the Northern Highlands are no longer receiving fish landings with the exception of John O'Groats which have small landings of crustaceans. Orkney however has a wide geographical spread of ports receiving landings with both Kirkwall and Stromness receiving significant volumes. All the other small ports had over £400,000 worth of landings in 2011 which are, potentially, significant given the size of the ports and island populations. These ports are receiving a mixture of crustaceans and molluscs.

Orkney ports are more dependent on inshore fishing grounds with just under half of their landings coming from these waters, but for crustaceans from the under 15m fleet this increased significantly to almost 90% across all Orkney ports. Equally for mollusc species this dependency is high for the under 15m vessels as almost all ports received 100% from vessels fishing inside PFOW-SA. With the exception of one boat in the over 15m fleet, the impacts from potential displacement and lost fishing opportunity will be experienced by the under 15m fleet.

Impact to onshore activity from reduced landings

In the Northern Highlands there would appear to be limited impact to onshore activity from a reduction in fishing opportunity as all landings come from outside PFOW-SA with the exception of mollusc species. For the Orkney Islands, the bulk of landings (crustaceans) go into the main island (Stromness, Tingwall and Kirkwall) where a good road network around the island allows the product to be transported to the main processing facility. The other bulk of landings (crustaceans) goes directly into a processing facility on Westray. The five other island ports do not have any processing facilities and their landings are handled by merchants. These businesses potentially face a significant impact from lost fishing opportunity from crustacean species. When one considers the value of landings into these businesses, just over one third (35%) of crustaceans come from inside PFOW-SA. For merchants this impact could be potentially higher as the processing facilities have larger vessels supplying their needs to maintain continuity in product lines, therefore increasing their supply options, however merchants trading from the smaller ports are more likely to be directly dependent on inshore catches. Equally, catches from small-scale fishers are more likely to include lobster, a high value species which makes their businesses profitable rather than dealing purely in the 'bread and butter' species of crab.

Impact to dependent businesses from reduced landings

The IO analysis found that the raw material input ( i.e. crustaceans and non-crustaceans) being handled and processed in the region, which comes from the PFOW-SA, contributes to £10.4m in output i.e. products to market, and £2.9m in income i.e. wages. This supports an estimated 159 jobs in the regional (Orkney and Northern Highlands) economy. Whilst this should not be used as a direct comparison, to put this in some form of context the economic output for Orkney region in 2011 was £430m with employment in the regions an estimated 6,000 jobs. For the Northern Highlands meaningful comparison is harder because data is primarily available at the Highland local authority level. Highland economic output was £4,690m in 2011 with employment in the region an estimated 75,600 ^[6] .

What however has been argued in the key informant interviews is that business viability is directly linked to the proximity of the fishing grounds and that due the low profit margins on crab, importing raw material for processing is not feasible for businesses facing other logistical limitations such as distance from market. Therefore fishing grounds in and around the PFOW region are important for the viability of the industry. What is less understood is whether the offshore fisheries could make up a potential reduction in landings coming from inshore, should fishing opportunity reduce.

When looking at a more likely scenario such as a 10% decline in landings, which equates to around a £250,000 (2011 prices) reduction of purchases from PFOW-SA, £1m to the regional economy would be lost, £0.3m in income and 16 FTE jobs connected to onshore activity. How this will impact on the inshore fishing fleet is beyond the scope of this study, but given the level of activity inside the PFPW-SA by under 15m vessels, they are the most likely vessels to lose fishing opportunities. Whether this loss could be absorbed by the under 15m fleet and the vessels still remain viable is a remaining question. But as stated in the key informant interviews, the business model, at least for one of the facilities is tied to inshore/small-scale fishing and equally there is a question on whether a reduction in inshore activity would jeopardise this business model and negativity impact on the demand from current markets i.e. supermarkets would not be interested in a non-local/small scale brand.

Lastly, It would appear that wages in Orkney and Northern Highland processing and trading are generally lower than the national average which is a common trend in food processing and has resulted in many businesses having to source labour from overseas. It would appear this is the case with some of the factories in the study but certainly not all. For some of the remote island communities the presence of such businesses offers a range of benefits to the community such as supporting transport infrastructure, supplies a secondary income for households and gives women independence from the family businesses and young people the opportunity to work and socialise outside of family businesses.