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Publication - Research and analysis

The Importance for the Fish Processing and Merchanting Sector of Landinsg of Fish from the Waters of Pentland Firth and Orkney to the Local and Scottish Economies

Published
12 December 2014
Part of
Marine and fisheries
ISBN
9781784129637

The objective of this study is to assist ongoing work at Marine Scotland. The specific objective is to estimate the contribution of the fish and shellfish processing industry and the fish merchants in providing returns on landings from the waters of the P

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3. Inferences and Conclusions Concerning the Importance of Processing Landings from Pentland Firth and Orkneys Waters for the Local Economy

In general the estimations have offered plausible results, though this may in part be due to the fact that some view has had to be taken of income levels in the sector, especially for the merchants, though these can be directly compared with those for the processors from whom it has been possible to obtain reliable figures.

The Fraser of Allander Institute (2007) reported demand-driven Type II multipliers of 4.81 and 6.21 for output and income multipliers for the UK shellfish catching sector. These are quite high results but are generally mirrored here.

Earlier Gibbs (1990) reported Type I output and employment multipliers of 2.24 and 3.76, also for the UK, noticeably higher than those reported here. Greig (2000) found Type II multipliers for fish processing in the UK for output and employment of 3.34 and 4.53. Higher multipliers would suggest low wages compared to other industries and high productivity.

The Type I and Type II multipliers for the fish processing industries and fish merchants in North Highland and Orkney based on landings from Pentland Firth and Orkney waters vary above and below the level of the multipliers for other businesses in the local economy. In general those for Orkney are lower, perhaps reflecting the higher costs of production in an island economy supplying mainland markets.

The Impact of a 10% Decline in Supply on the North Highland and Orkney Economy

Table 6 below sets out the losses to the North Highland and Orkney economy that might be expected to occur should there be a 10% reduction in the value of landings from the waters of the Pentland Firth and Orkney area.

Table 6: The Impact of a 10% Decline in Supply on the North Highland and Orkney Economy

Type II Processors and
Merchants:
Orkney Landings
of
Non-Crustaceans		 Processors and
Merchants:
Orkney Landings
of
Crustaceans		 Processors and
Merchants:
North Highland Landings
of
Non-Crustaceans		 Processors and
Merchants:
North Highland Landings
of
Crustaceans
Output (£m) £0.07 £1.27 £0.14 £0.36
Income (£m) £0.02 £0.40 £0.04 £0.11
Employment (Units) 1 17 2 5

It is estimated that a 10% decline in the value (and volume) of landings would result in a fall in output of £1.8m, of £0.6m of income, and 25 jobs in the economy of North Highland and Orkney.

Since the model is linear the impact of other percentage changes may be calculated as simple multiples of 10%, but because of the linearity the reader should be aware that the reliability of such estimates declines as the percentage change considered increases.

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