Hansard

As they say: now for something completely different. The report starts with the background and the terms of reference. We wanted to examine the effect of the European regulations on the salmon farming industry and other fish farming industries. The terms of reference give a potted history of infectious salmon anaemia and viral haemorrhagic septicaemia, their effects, and the response of the Executive.

Page 3 shows the specific aims of the report—to examine the incidence and clinical effects of ISA; the current regulations; the impact on the industry; waste disposal; the support from the Executive for affected businesses; insurance for the industry; the comparison with Norway; and possible future developments. For VHS, the aims are more or less the same, but are not as extensive, because the disease has appeared only once and the industry does not have the history of VHS that it has of ISA.

On page 4, the main body of the report begins. The introduction emphasises the importance of the salmon farming industry to the Highlands and Islands: it provides 6,500 jobs and is worth around £500 million a year. It is extremely important, economically and socially, in the west Highlands and in Orkney and Shetland.

The report points out that the diseases are virulent as far as fish are concerned, but pose absolutely no threat to human health. ISA was first recorded in Norway in 1984. It is transmitted through water by means of material such as blood and mucus. The disease came to Scotland in May 1988. It was classified as a list 1 disease. Consequently, tough control measures had been put in place to prevent and control its spread in any farm suspected of harbouring the disease and its neighbours. Those measures had been put in place in Europe as a result of the disease appearing in Norway and they had a severe impact on the Scottish industry.

Although VHS is classified as a list 2 disease, if the disease is found, the control measures are as draconian as those for ISA. VHS is harmful to white fish, and the reason why it was included in the report is that, with more and more of the aquaculture industry thinking of farming white fish such as turbot and halibut, we do not want the same to happen to the white fish industry as has happened to the salmon industry.

On the confirmation of the presence of ISA, the initial response was the setting up in 1998 of a joint Government and industry working group, which reported earlier this year. I will come to that later. The working group tried to establish the measures required to prevent further outbreaks of ISA or to minimise their impact; it reported in January 2000.

The next part of the report deals with the effects of the regulations on the industry: the depressive effect on the market; the fact that stock became uninsurable; the vulnerability of small, local farmers and the drop in prices at the supermarkets—the supermarkets used the ISA outbreaks to push down prices.

The industry was particularly concerned about the harm done to sites that were designated as suspect, when such sites often proved to be clear of the disease. Newspapers carried headlines that claimed that a killer disease was suspected in such and such a farm; that had a significant impact.

The financial impact was considerable. The process of fish slaughtering had to be tightened up because of the spread of the disease. However, most significantly, a plethora of litigation arose around the issues of compensation and insurance.

Environmental considerations were also expensive because everything had to be tightened up—all waste materials and packaging could carry the virus and were therefore subject to strict controls. The effluent from the industry had to be treated and the preferred method—ozonisation—is expensive. We must consider how that is to be funded.

The industry in Scotland has been compared unfavourably with that of Norway. The Norwegian method of dealing with the disease—control rather than eradication—was seen to be much friendlier to the fish farming industry. As paragraph 51 of the report suggests, ISA seems to be returning to Norway. A question mark hangs over the success of the Norwegian approach; only time will tell.

The report outlines the relevant Community legislation. It is fairly technical, including the various directives that deal with fish farming and an explanation of their purpose. Directives refer to the placing on the market of aquaculture animals, which must show no signs of disease; eggs and gametes must come from disease-free fish and so on. Council directive 93/53 relates to the control of fish diseases and aims to ensure a rational development of the aquaculture sector and to contribute to the protection of animal health in the Community. The directive requires certain control measures to be introduced as soon as the presence of the disease is suspected and further measures when the presence of the disease is confirmed.

Vaccinations were prohibited, but there has been a derogation that means that we can now use vaccines if we can find efficacious ones. The report sets out the measures that must be taken if the disease is suspected or confirmed on a farm.

Council directive 2000/27 takes a more flexible approach than the previous two directives. We have spent some time writing to the Executive to find out what is meant by "flexibility". Members have copies of the correspondence from the Executive. The derogation came through the European Parliament Fisheries Committee to which Ian Stewart Hudghton MEP was acting as rapporteur. He submitted a report asking for a number of significant changes to be made to directive 93/53. That was undertaken with the co-operation of all Scottish MEPs. The correspondence from the Scottish Executive rural affairs department outlines what the new flexibility means.

Council decision 90/424 on the absence of Community financial assistance is quite important. Livestock farming receives assistance from the Community if, for example, there is an outbreak of swine fever; other diseases such as anthrax and foot-and-mouth disease qualify for Community financial assistance. Currently, ISA and VHS do not qualify for such assistance. Fish farmers have no recourse to compensation from the European Community. That decision seems rather capricious; it is difficult to understand why fish farmers should be treated differently from other farmers. One of our recommendations is that we lobby Europe to include fish diseases in categories for compensation.

Vaccinations are dealt with in paragraph 88 of the report. Although vaccination is allowed, we do not have an efficacious vaccine. We have had correspondence with SERAD on where and when such vaccinations could be used.

Page 15 of the report sets out our recommendations on the legislation. We are seeking action at Community level to add ISA and VHS to the list of diseases qualifying for Community financial assistance. More generally, we want Community regulation of expenditure in the veterinary area to become more transparent and consistent. The Community approach to the availability of financial assistance is rather capricious. Control measures to combat certain diseases qualify for financial assistance, whereas other measures do not. However, both the Community system for fisheries and aquaculture and the common agricultural policy must support the general objectives of EC article 33.

The Scottish Executive could do more to explore all possible avenues for alternative Community funding. We mention the financial investment for fisheries guidance—FIFG. There might be some measure of flexibility in structural funds. Perhaps the Commission could change the relevant regulations to allow structural funds to assist in dealing with pathological risks in aquaculture.

The Scottish Executive's response is laid out from paragraph 100 onwards. Initially, the Executive provided the industry with a limited compensation package. The industry could not use that package because it required match funding. About £9 million was offered—I am not certain of that figure. That was extended to farms that were indirectly affected, such as farms that had been suspected and which had suffered financial losses—that was not covered in the original proposals.

The Scottish Executive then proposed a financial aid package to help people to restart their businesses. The report includes comments by John Home Robertson, on compensation to people who had lost their jobs—he turned down that suggestion.

The European Commission agreed to the £9 million aid package. I note that the UK Government could have decided to compensate farmers for those losses and that such a scheme would probably have been considered compatible with the EC treaty, as it would have met the criteria in the guidelines. Paragraph 111 explains that further.

We want to find out where the compensation scheme is heading. At the moment, not many people seem to have access to it. We want to ensure that it is not too bureaucratic and that there are no hurdles for people to clear.

Although the threat to Scottish aquaculture cannot be underestimated, a number of positive steps can be taken, both here and at Community level. We recommend that we follow the example of good husbandry that is outlined in the report of the joint working group, which included representatives of both the industry and the Executive. At Community level, further and detailed attention needs to be paid to the legislation that currently exists, to see what further financial assistance is available. We recommend strongly that ISA and VHS be added to the list of diseases that are covered by decision 90/424 and that qualify for financial assistance.

We urge the Scottish Executive to ensure that all avenues of support have been examined and to press the European Commission to change the relevant regulations to allow structural fund aid to be used to combat pathological risks in aquaculture. We welcome the restart initiative, but we want to ensure that the process is straightforward and that assistance goes to those who need it most. We ask to be kept up to date annually on the progress of the scheme.

The material appended to the report relates to litigation about compensation that is pending. Those are European convention on human rights cases and are currently being heard by the European Court of Justice, which means that they are sub judice.

Was not that fascinating?