Fishing - Quota Management Group (QMG) trial: evaluation

5. Interview Analysis

Fifteen semi-structured interviews were undertaken for this project. These included interviews with QMG and PO representatives, fishers, selling fishing agents, and other stakeholders operating in the commercial fisheries sector. In line with the Magenta Book guidance, these interviews aimed to explore the range of views and build in-depth insights into the topic. The research team’s approach to interviews is explored in Annex A: Methodology. The interview findings are discussed below.

5.1. Creation of QMGs and impacts on the current sector

Research participants were asked about the changes in the sector since the introduction of QMGs. Some commented on changes related to the wider context of Brexit, Covid-19, and war in Ukraine, as well as other varied factors. These events had a range of impacts, e.g. it became harder to undertake foreign swaps in quota after Brexit, the availability of quota was affected, quota allocations were now taking place later in the year, and fuel prices had risen.

“There is so much change going on just now including various consultations, such as the one on Additional Quota. The biggest thing just now is adapting to being a coastal state and managing our own quotas at that level. Hopefully the process over the next few years will settle down and become more streamlined in terms of allocations being issued within a reasonable time frame.” (Anonymous participant)

In terms of the creation of QMGs and managing quota through QMGs, many participants commented that since the current two QMGs were POs beforehand, they effectively carried on administering quota for their vessels in the same way as before, albeit under a different name of QMGs instead of POs. Participants also mentioned that the current QMGs don’t interact too much with POs because the QMGs mainly administer pelagic species where there is less need to source quota for bycatch or a mixed fishery.

From the point of view of a wide number of actors in the sector, there was a seamless continuation for the sector for the two current QMGs in terms of quota administration, and the current QMGs were perceived to manage their quota well. This is notable as there had been some concerns about the creation of QMGs, and some risks were voiced during the project interviews as well, but the feared negative consequences of QMGs have not materialised. However, this could be due to the trial, as QMGs have not been established as a permanent mode of organisation yet.

“Has the sector changed as a whole? I don’t know that it’s changed very much, because the QMGs were POs beforehand, I don’t see any changes in the sectoral group as it were.” (Anonymous participant)

QMGs themselves mentioned that the main changes they had to go through related to legal issues such as the renaming of the organisation, review of internal structures, and the new reporting requirements.

“I don’t think it’s changed at all. We were a PO, we were a producer organisation. […]. We were fully compliant, we hadn’t changed our structure or any aspect of our PO until the EU challenged the status of a number of UK POs. We don’t see a change from being a PO to that of a Quota Management Group. We don’t believe there are any changes other than in reporting and responsibility which we’ve fully accepted.” (Anonymous participant)

Participants mentioned that the sector is very stable at the moment, particularly noting that there is not a lot of movement of boats between POs. Participants mentioned several reasons for the stability of the sector: little incentive for vessels to move if their current PO satisfies their quota needs; access to pool quota which only some POs provide; few new entrants into industry; boats and POs are often already aligned to geographical areas of fishing; and there is often a need to provide a long notice period when moving between POs which serves as a barrier for movement.

Overall, participants did not notice a lot of change in the sector as a result of changing two POs’ status to QMGs. It did not create increased movement of boats between POs and QMGs. Most often, changes in the sector were attributed to external circumstances such as Brexit, the Covid-19 pandemic, and the war in Ukraine.

5.2. Dual system

While participants thought that the existing QMGs were fully capable of managing quota, and the existing QMGs did not affect stability in the sector, the creation of the QMGs system was criticised by many actors in the sector.

Some participants criticised the QMG system for a lack of plurality in terms of membership and democratic functioning. These participants viewed the creation of QMGs as a way for the Scottish Government to solve the issues raised by the EU in their infraction proceeding, detailed in the QMG Trial section of this report. These participants did not perceive the QMG trial to be a real trial, rather believing it was the de-facto solution by the Scottish Government to solve the infraction.

“In reality the QMGs that you've got just now it's not really a trial, it was just a way for the Scottish Government to avoid proceedings from the EU. You've got two massive integrated companies, which I mean it's not a trial, it was just a way for the Scottish Government to avoid getting bogged down with what they've got.” (Anonymous participant)

Fairness was an important theme in these conversations, as participants (especially PO representatives interviewed for this project) questioned whether it is fair to allow private companies (QMGs) whose aim is to maximise company’s economic gain to exist alongside POs. These participants thought that POs through the plurality of members serve the needs of a large number of Scottish fishers, benefitting Scottish society more than QMGs. It should be noted that formerly some POs are registered as limited companies, while other POs are registered as societies or mutual societies. In addition to this, POs’ often operate as commercial entities (e.g. operating ITQs, leasing quota). This shows that POs in many ways are very similar to QMGs (see also Plural membership and democratic function of POs below).

The introduction of QMGs effectively created a dual system where two different type of organisations (QMGs and POs) with a different organisational structure, creation rules, and reporting requirements can manage commercial fisheries quota (see Key characteristics of QMGs and POs). Participants’ responses raise a question of whether the sector should have only one type of organisation managing quota to ensure a level playing field for different actors, or whether different actors (QMGs and POs) should be allowed to manage quota.

5.3. Plural membership and democratic function of POs

Before delving into this section, it is important to note that this research is focused on the evaluation of the QMG trial and it does not have a direct aim of reviewing POs. However, given that participants often compared QMGs and POs, some sections of the analysis are focused on aspects of how POs operate.

One of the central points of criticism of QMGs was that these groups operate as private companies with a single or majority company ownership. In contrast to QMGs, many participants mentioned that POs operate through a collective membership where no single fishing vessel should have majority control, resulting in a more democratic function. This was also perceived by participants as one of the main features distinguishing POs from QMGs.

“QMGs were created because they didn't meet the democratic functioning requirements to qualify as a PO. So, they just do not have that same accountability in terms of democratic functioning that we as POs do”. (Anonymous participant)

The quote above illustrates that QMGs were perceived by some research participants (particularly PO representatives) as having less accountability than POs. When talking about the democratic function of POs, these research participants perceived it is a collective decision-making mechanism facilitated through the elected board of directors.

“Looking at our PO, we have a board of directors who are all active fishermen […] with all major decisions taken at board level. Directors are nominated and must have at least two supporting nominations to be able to join the board, therefore those on the board provide the voice of the membership in the decision-making process. Any major decisions, whether it is on policy or a consultation, are taken in consultation with the whole organisation, with everyone offered the chance to provide input into the discussion. So, from our perspective, it's very much from the ground up in terms of the decision-making process. […]. Which in my view underlines the democratic functioning within the PO. And I think to be fair, most POs are probably the same.” (Anonymous participant)

A number of benefits associated with the plural membership of POs and its associated democratic function were mentioned by research participants: providing fishers with a voice in organisational governance and when making important decisions (e.g. responses to consultations); bringing different fishers together and exchange of information; facilitating compromises between fishers when there is a need to reach common solutions.

However, the narrative of POs as democratic organisations benefitting Scottish fishers was challenged by some participants of this research. Most of this criticism focused on questions of transparency in terms of PO governance and funds (for example, how the levy paid by fishers is invested back into POs). Some participants mentioned that this process is not always transparent and it was noted that POs have their own financial interests in selling quota to their members, although there was a recognition that transparency has significantly increased in recent years. A question about PO membership and whether some actors within POs exercise more power than others was also raised in the literature (see Market-based management and sector consolidation). It was also noted by several participants (including the POs) that the POs were there to support their vessels to optimally run their businesses and thus would have similar incentives as the QMGs to profit maximise for their members.

“Some (POs) are large corporate entities sitting with very significant balance sheets. […]. I'm going to assume when the final report comes out, we get copies of how POs have responded and how they operate to be compliant to the regulations.” (Anonymous participant)

The quote above speaks to the fact that PO and QMG annual reports are not currently published. This contributes to speculations over the value of these organisations to Scottish fishers and wider communities. Publishing the reports or part of the reports would improve transparency, although careful considerations need to be given how to deal with commercially sensitive information in the reports (e.g. who decides whether and how commercially sensitive information is redacted).

5.4. Vertical integration of QMGs

Many participants mentioned that in contrast to the plural membership and democratic function of the POs, QMGs operate as vertically integrated companies, noting that they manage the fishing, selling and sometimes processing through the same business. QMGs interviewed as part of this project talked about the vertical integration and their close management of vessels.

“We do manage, we can regulate where they (vessels) go, we regulate how much they're bringing to the market. We do it per trip, they (POs) do it for a year. You know, if our processing partner comes in and say factory is down for three days, we don't take the boat that's at sea and put it to a different market. We regulate the boats so that the boat won’t be at sea, we'll say, Ok, we'll slow down, we'll do this instead. We manage our vessel landings to the available market.” (Anonymous participant)

The QMGs stressed benefits arising from the close control of vessels, especially with regards to environmental sustainability and control of the market. One research participant noted that it is difficult for POs to closely manage their members.

“Most of the selective objectives of POs are skipper or owner responsibilities. Reducing environmental impact on fishing, the PO is never going to do, if a skipper decided to take a new net, the PO does not control the members. Stabilising the markets, they (POs) are allocating the quota out and the boats will go to sea when they want, they're not stopping the boats going to sea. […]. If I'm a member of a PO and a whitefish skipper, the only critical thing I'm looking at is my PO is going to find quota for me and how much is it going to cost me. I don't want the chief executive of that PO to be involved in managing my landings. It simply doesn't happen in our industry. Every vessel is an individual business and operates independently.” (Anonymous participant)

The quote above illustrates an interesting point. While QMGs were criticised for operating as private vertically integrated companies, close control of vessels that this organisational model offered might be important for sector governance. Arguably, organisations that can closely implement and monitor environmental objectives can help policy-makers understand and through better information potentially also achieve better environmental outcomes (see also the Review of QMG and PO annual reports for the discussion of the environmental objectives). This shows that vertical integration can have benefits.

While QMG representatives interviewed for this research noted that they had significantly more control over vessels’ day-to-day activities than POs, they were keen to highlight that skippers had their say and important decisions were co-created by skippers and company management. The close communication with the skippers was also perceived by QMG participants as one of the things that worked well in their organisations. Interestingly, a fishing agent who noted interest in creating a QMG (discussed in the Potential changes in the sector after the trial section below) had a similar narrative about co-created decisions.

“What works well in my organization is the strong bond and mutual respect between the skippers owners and agents. The unity within the group and the openness to discuss real issues fosters a high level of trust. This trust is crucial, as it allows for transparent communication, where skippers feel comfortable discussing their real problems with you. This collaborative approach to problem-solving is a significant strength and enables the team to find practical solutions together.” (Anonymous participant)

While some participants talked about skippers within company structures as hired employees devoid of independence, QMG participants noted this was not the case in their operation, noting skippers were shareholders of their groups who benefit from the company in different ways (welfare, economic benefits, etc).

“Well, they're skippers, they own the group, own the vessels. So they're not forced to do it, they're willing to do it because the arrangements are such that they benefit from it. Our vessels supply (redacted text) a company who are looking at crew welfare and sustainability, what to do with our discards and that kind of things. Now we tick all these boxes and that lets the crew go and fish for (redacted text) and supply (redacted text) and this gives the crew a guaranteed price. It just snowballs from there and they are thriving on it really […] it builds trust and it builds understanding and cooperation […] we're using gear that helps us avoid catching small fish. We're keeping our discards, there's no hiding discards, we're landing everything. It's all relatively clean, our operation, and I think the crew are really happy with that. They benefit financially and every link in the production chain benefits financially.” (Anonymous participant)

It is important to note that QMG skippers were not interviewed as part of this research, so the view in the quote above illustrating the benefits to skippers comes from the companies’ management rather than skippers. Nevertheless, the points about the joint decision-making between skippers and QMG management shows that despite a democratic process not being mandated, QMGs are still opting to engage in collaborative management utilising the experience of their skippers.

5.5. Potential changes in the sector after the trial

As mentioned above, the majority of research participants believed that the creation of the current QMGs did not affect the movement of vessels in the sector. However, some participants pointed out that the trial is still ongoing and that when/if QMGs are made permanent, some actors in the sector might consider leaving their POs to create a new QMG. One of the agents who was interviewed as part of the project suggested that they might create a QMG for their group.

“I emphasise a prudent approach to decision-making, particularly concerning the creation of a Quota Management Group. As a risk-averse leader, I prefer to wait for clarity on regulations before making any commitments. This reflects a thoughtful strategy, ensuring that my members' interests are safeguarded before moving forward with any changes.” (Anonymous participant)

This agent who considered creating a QMG explained that creating an independent organisation might help to better represent their interests while saving the levy paid to their PO.

“While POs were once necessary to access EU funds, the end of such grants and the ongoing financial burden (e.g. 1% of every landing) make POs less appealing. Not every PO in the UK work under the same condition, so some POs are more attractive than others. I think it should be up every individual or company to choose what option is in their best interest.” (Anonymous participant)

Many research participants stressed that an option of creating a QMG would be available only to large operators who have capacity to run big organisations and have experience of quota management.

“I think there's only a certain level company, and in my view, it could only be companies, that are able to put everything in place that's needed to set up as a QMG.” (Anonymous participant)

It is necessary to stress that out of two fishing agents who were interviewed as part of this project, one was potentially interested in creating a QMG (quote above), while another agent did not consider this as an option. The latter were happy with their PO and did not want to change their current business arrangements. This suggests that not all big operators are interested in creating a QMG in the future.

Interestingly, some research participants were sceptical about the creation of new QMGs. They pointed out that so far no new QMGs were created (apart from the original two QMGs). They explained that POs provided a good service to their members and high QMG creation requirements were hard to achieve. However, a quote above from the potential new QMG suggests that if/once QMGs become permanent, the situation might change.

Some research participants discussed their views on the potential consequences of new QMGs for the sector. These participants agreed that this option is likely to be explored only by bigger operations. Potentially, this means that bigger boats might pull out of some POs if new QMGs are created. This was considered as a negative potential consequence from the point of view of POs, who often referred to this potential process either as a ‘fragmentation’ (in a sense of PO being broken down into smaller pieces) or ‘consolidation’ (in a sense of bigger actors of the industry creating independent entities and dominating the market). Participants commented that industry consolidation is taking place already through different processes (buying quota to increase operation size, price control through sales, deals signed outside of auctions, etc), making it harder for new entrants to start new business. Sector consolidation was also discussed in the Literature review, showing that POs are also agents of consolidation. According to many interview participants, the creation of new QMGs could accelerate the process of industry consolidation. In particularly, one participant noted consolidation was already having adverse effects due to the dominant market position of certain market agents.

“For example, we've got a couple of big companies who are saying to boats, ‘I'll buy your small fish but as a consequence to taking that I also want to take all your more valuable fish and then they pay less than the market price for the better quality fish’. They're undermining the market and they're reducing the prospect to the guys who are smaller buyers to be able to operate in the marketplace. […]. And as well if you go into a contract with these or you don't go into a contract with them, then sometimes these bigger companies are saying, ‘Right, I'm just not going to buy your fish at all’. So, the fish is then being left unsold or selling at very low values. So, I think that's a huge issue at the moment. […] undercutting the buyers who are buying from the auctions. […] a bit of market manipulation, a market bullying going on in this. And I think that the quota management groups there's some concerns who would probably operate in the same way […]. And I think that there's a real issue at the moment about these groups becoming bigger, bigger all the time.” (Anonymous participant)

In addition to potential impacts on the sector and the markets, if bigger operations left the POs, this would have a number of consequences for the POs: their organisational requirements might be jeopardised (e.g. if they don’t meet requirements for the amount of landings), and they would lose the levy paid by the leaving vessels giving them less financial leverage to support their members. Hence POs viewed the potential creation of new QMGs as a negative development.

Research participants mentioned that pool quota (quota shared by PO members often in addition to any vessel individual quota allocations) is an important factor that keeps some vessels in the PO. If these vessels have access to pool quota, leaving the PO means losing this resource. Pool quota, however, is something that is more useful for smaller operations or vessels fishing for nephrops. Several larger operations and vessels noted that pool quota was not a significant impediment to their moving from their current PO due to the size of the pool relative to their own quota allocation.

5.6. QMG creation requirements

One of the important topics during the interviews focused on the threshold for creating a QMG. Lowering or raising the creation requirements might open or close opportunities for new QMG to be created, and this can trigger changes in the sector.

Interestingly, the majority of participants (including current QMGs and the agent considering a QMG) believed that the requirements should be high, to avoid fragmentation of the sector into smaller actors and to match the requirements of the current POs.

“The rules around becoming and operating as a PO are fairly restrictive, which is right, therefore I think if you start allowing QMG rules to be less restrictive you then potentially open it up for groups to become QMGs who might not be entirely competent to manage within a sectoral management environment. POs are held a high standard in what we need to comply with both to set ourselves up and operate, if groups are to set up with the intention of operating alongside POs under different requirements, there needs to be a balanced approach of what's required in those circumstances.” (Anonymous participant)

Some participants pointed out that fragmentation in the sector might become a burden for the regulators, as it will require governing a larger number of actors.

“Yeah, I think you know, obviously what you don't want Scottish Government is being inundated with applications (for QMGs). Well, if that is a concern, set the barrier high and make the account and make the responsibility line high. The facts are industry stakeholders will not be applying for Quota Management Group status or to that end neither will there be an application for a new Producer Organisation.” (Anonymous participant)

To avoid sector fragmentation or a reduction of standards, one of the participants suggested that there should be a rule that potential new sectoral groups are obliged first to consider creating a PO, and only if they cannot meet certain requirements move down the QMG route while maintaining the same standards. In this way ensuring that POs were the default option while QMGs were only formed where a PO was not feasible.

5.7. QMG reporting requirements

With regards to reporting, QMG participants highlighted that they are satisfied with the current reporting requirements. QMGs viewed the reporting requirements as straightforward and were keen to demonstrate that they ‘tick all the boxes’, including benefits to wider communities. These participants felt that the reporting requirements do not need to change.

It appears that reporting is directly linked to how the QMGs are internally organised. For example, participants mentioned that vertical integration of QMGs (operating several stages of the supply chain) makes it easier to provide annual reports, because skippers are part of the company and there is direct communication and fluid exchange of information between the management and the vessels. Furthermore, as QMGs manage their own vessels it makes it easier to implement initiatives such as more selective gears.

In contrast to this, POs manage quota for a larger number of member vessels and have to report on the activities of a wide range of members. This is more difficult to achieve, because POs do not directly control vessels (e.g. regarding decisions on where and when to fish or what gear to use). Moreover, because of the degree of separation with the vessels, some participants suggested that environmental or market interventions are often done by the vessel themselves with only some input or influence from their POs. This suggests that it is harder for POs to influence their members behaviours to meet the PO objectives, or obtain information necessary for reporting, especially with regards to some issues (e.g. environmental sustainability).

“The reporting requirements for QMGs, because they are focused on quota management, it’s a lot more straightforward than the reporting requirements for POs, which are still aligned with the with the European regulation, as far as I'm aware anyway.” (Anonymous participant)

Overall, there was a consistent view across the sector that QMG requirements need to remain stringent and that they need to have a high line of responsibility that is similar to PO requirements. Linked to the perception of QMGs as private companies, participants were keen to see how QMGs contributed to wider society beyond companies’ economic profits, indicating the QMG objective to support Scottish communities is very relevant.

“In terms of the other points around creating employment, etcetera, if you're running a business then I think it's probably something that should be in there. QMG rules need to be sufficiently tight to ensure that these groups are fit for purpose and can contribute beyond their own interests into the wider sector, so you have to find a way to do that.” (Anonymous participant)

As mentioned above in relation to transparency, currently PO and QMG annual reports are not published, and this contributes to speculations on how well each type of organisation achieves its reporting requirements and what kind of benefits both POs and QMGs bring to the sector and wider communities.

5.8. Should QMGs continue?

Several participant groups were interviewed as part of this project, including QMG and PO representatives, fishers, fishing agents, and other stakeholders associated with the commercial fisheries sector.

QMG representatives interviewed for this project believed that the QMG trial should end and QMGs should become permanent organisations in the sector. They commented on fulfilling the commitment to meet all the requirements when transitioning from POs to QMGs, highlighted that they continued to meet their objectives of managing quota, and met all the reporting requirements set by the Scottish Government.

POs’ views on the future of QMGs was varied. While some representatives were concerned with the possibility of new QMGs and the anticipated negative consequences for the sector, others questioned the value of running dual systems with both POs and QMGs but held a more neutral position. Those who did not support the QMG system often noted that this was not due to the existing bodies, which were often viewed as effectively operating in the system, but rather the future risks to the sector (see Potential changes in the sector after the trial). Some participants noted that QMGs had been POs in the past, and given their primarily pelagic focus, these participants believed that the trial had not fully tested the QMG system in the sector, suggesting the trial as is could not give us enough information necessary to make a decision. One of the participants was interested to see the creation objectives and reporting requirements for QMGs (if/once they become permanent organisations), as they wanted to consider whether QMG requirements might better suit their operation than their current PO requirements.

With regards to the wider stakeholder groups in the sector there was a range of views. Some participants were against new groups, which appeared to be due to not wanting to change the existing system or concerns about consolidation. Other participants were either neutral (mostly because they did not see how QMGs affect them) or were positive on the future of QMGs. For example, an agent considering a QMG thought they might provide better outcomes for their business. Other participants considered whether QMGs might be used for non-sector/community quota management, i.e. in a completely different way than they have been used to date.

5.9. A need to review wider (non-)sector

Even though this project focused primarily on QMGs, during the interviews many participants mentioned that the PO system would benefit from a review. Participants highlighted that some of the PO objectives and reporting requirements are not completely matching how the sector currently operates, particularly with regards to marketing, representation, sustainability, and wider community benefits (see also Review of QMG and PO annual reports related to this discussion).

For example, with regards to marketing, participants highlighted that some POs were more active than others in marketing fish (e.g. during fish exhibitions) and opening new markets for their members. However, not all POs are heavily involved in marketing. In terms of sales, several participants mentioned that fish ‘sells itself’ through private deals or open auction, and that PO help is rarely enlisted in these processes.

“I would say POs were more QMGs than POs anyway, they were principally there to manage allocations of quota for their members. Traditionally marketing was always done by the fish salesmen in Scotland.” (Anonymous participant)

In terms of representation, fishers in Scotland are often part of associations representing their interests. During the interviews, some POs mentioned that they are actively involved in representing fishers (particularly in discussions related to quota) and pointed out that this involvement has increased in recent years. However, because representation takes place both through the associations and POs, it was noted that this resulted in a split of how and on what matters the POs and associations represent their vessels. A quote below illustrates that some participants thought that PO representation requirements need to be reviewed in the future.

“We're still operating in a post CFP (Common Fisheries Policy) world and the list of objectives that we're working to were developed through the CFP. […]. I do think that this is something that needs addressed because the objectives, as they're set out were designed for the EU operating model, which does not have the active association sector that we (Scottish POs), have working alongside us. Any revising of these objectives should not lessen the impact of them, but make sure that are fit for purpose in a Scottish context. […]. When we were within Europe it was not possible to make such changes but there is now an opportunity to ensure that going forward, we have a reporting structure that is fit for purpose and inline our industry objectives and aspirations.” (Anonymous participant)

It was also noted that many of the PO objectives were hard to address for POs, including sustainability requirements (lack of control over skippers’ choices, long lead times to see sustainability changes, etc) and wider community benefits (hard to trace how fishing impacts other businesses). Participants noted that some of these objectives were already done by other bodies and so it was not considered useful for the POs to intervene (e.g. with regards to marketing), at times POs had little to add to topics addressed by other bodies (e.g. illegal, unreported and unregulated fishing), or the industry has moved on since the requirements were introduced (such as in stabilising markets). Many participants commented that because of this a review of PO rules and objectives could be pertinent.

One of the more categorical participants advocating this view suggested that any requirements beyond quota management need to be removed from POs and POs need to become quota administrators with a straightforward reporting structure.

“Part of the stipulated role of the PO is to regulate landings to market, with the narrative that improving the conditions for the placing on the market for their members. So, under regulation, that's their role. They don't do that. They simply give out and administer quota. Improving economic returns for the vessel, they have very little input to that. Stabilise the market, they don't do that. […] Government’s reporting structure doesn't draw that out. […]. Change the reporting structure, dig into this and see if they’re managing the quota or are simple administrators. And if they are administrators, that's not a criticism. Somebody has to administer the quota. […]. They shouldn't use that status (status from being a PO), because they're administrators, but recognise for what they do.” (Anonymous participant)

It is important to note that many interview participants commented on a large variance in how POs operated. Some POs were perceived as providing a ‘full package’ of benefits to their members, while others were seen to be lighter touch organisations. Both methods were seen as valuable to fishers, evidenced by fishers’ choices to remain in their POs. However, it was noted by several participants that the single set of requirements and objectives for all POs was a hinderance to some POs. These participants noted that they were at times close to the minimum required size to continue to function which put pressure on the PO and their members (even though POs operated to their best ability to suit fishers’ needs).

“I think there is a very real risk that the PO will have to close because it won't be meeting its objectives anymore set out by the government.” (Anonymous participant)

Finally, it was noted by some participants that the loss of geographically oriented POs could have negative consequences for future management options, noting that once it was lost it was likely to be lost for good.

“…potentially if we can go down the route of community quota schemes for inshore vessels and non-sector boats, the natural place to manage that would be within a PO. So having a local PO that could do this would be really beneficial and I think if we lost the PO, there's not really any chance we would get something like it back. So I think it would be a big blow to the industry because it would really prevent any growth or diversification in the future.” (Anonymous participant)

In summary, many participants mentioned that the sector might benefit from a review of POs to check if the requirements and objectives are still useful and relevant. However, a number of points need to be considered if/when initiating PO review: there is a great variability between POs and each PO’s scope of activities and circumstances needs to be taken into account; changing PO requirements might have consequences for other actors in the sector (e.g. non-sector) and the review needs to be conducted in a holistic and sensitive manner; the timing of the review is important (e.g. PO can be reviewed alongside QMGs if QMG trial is extended, or later as a separate initiative or as part of the whole sector and non-sector review).

The latter point is important because non-sector fishers and other stakeholders interviewed in this project highlighted that there is a need to review how quota is allocated to non-sector fishers, as current allocation system makes it difficult for the non-sector vessels to operate, diversify or to break out from the non-sector to a sectoral vessel. For example, several participants highlighted that two-weekly allocation intervals make it hard for fishers to adapt fishing patterns and plan long-term their business. An alternative allocation system could help smaller-scale fishers to optimise their fishing pattern with possible financial and environmental benefits, for example relieving pressure on some stocks during certain times of the year.

5.10 Additional sectoral concerns

All research participants were asked about challenges to the sector and their views on the quota system to understand if there could be overlap with QMGs.

The majority of participants mentioned late quota allocation as the main issue in the sector, noting that this forced fishers and quota managers to speculate on allocations and can create significant business problems once quota was finally allocated if the speculation did not match the actual allocation.

Other concerns that participants mentioned included a need to change the banking system, additional quota allocation, and how quota is traded from operators who hold quota without fishing (e.g. lease quota to other operators). Many participants also noted challenges in their interactions with environmental groups, suggesting that the relationship was difficult and feeling that the environmental groups were often asking for changes to the industry without offering any support.

While issues are unlikely to be affected by the QMG trial outcome they are relevant to consider and would be relevant in the event there is a full (non-)sector review.