Economic Assessment of Scottish West of Scotland TR2 Vessels
Economic Assessment of Scottish West of Scotland TR2 Vessels
An evaluation of the impact of reduction in days at sea on the TR2 fleet
Introduction
Nephrops is highly valuable in the West of Scotland. Scottish vessels targeting Nephrops with trawl gear (e.g. TR2) are subject to EU Cod recovery plan. However, there is scope in the plan to exclude vessels that can be shown not to impact cod stocks.
In 2012, greater than 90% of average WoS TR2 vessel landed value was from
Nephrops and less than 0.1% of average landed value was from cod although discards of cod remain an important consideration for fishery managers. The majority of vessels in this fleet use TR2 gear and fish in Area VIa.
Total landings (tonnes) of
Nephrops into West Coast ports has been stable over recent years, with an increase in 2012 over 2010, where
Nephrops value is appx. 60%.
Fishing opportunities in other areas are limited and with regulation increasing opportunities are lessening.
Nephrops defines the economic viability of the TR2 fleet. With stable stock status and LPUE being shown in recent years, changes to total effort of this fleet will impact profitability negatively, assuming no price increase.
Analysis shows that reducing days will impact all vessels financially, but with a small group at an unviable level.
TR2 vessels: over 10 metres mainly targeting Nephrops
West of Scotland using trawl gear with 80-99mm mesh.
Methods
Logbook and economic data
An economic assessment was conducted based on logbook and economic data. Logbook data was available to the end of the first quarter of 2013 and economic data was available based on national data collection survey to the end of 2011.
TR2 fleet-based model
A fleet based model with two segments, under 250kW and over 250kW, was developed to assess the short term impacts of changing days at sea, prices and Nephrops LPUE.
Results
The analysis undertaken shows that in the short term, the fleet as a whole can to a degree cope with a reduction of days to 95% of 2012 levels even with slightly less favourable prices and Nephrops availability. Based on an allocation of days by track record, vessels with lower activity during the reference period will likely receive less days going forward which will have the effect of distributing available days to more recently active vessels in the area.
If days at sea were reduced beyond 90% of 2012 levels then some vessels in the Scottish
WoS TR2 fleet would find it difficult to operate at economically viable levels. The under 250kW segment is more resilient to changes in days at sea as average LPUE is lower than that for the over 250kW segment and appears easier to maintain lower average LPUE. The over 250kW segment, where fewer vessels operate, are more susceptible to reduced days at sea. Even so, the average net profit of vessels is still projected to be positive with reduced effort.
Analysis of the bottom quartile of each segment provides more detail, revealing that there are at least 15 vessels in the total fleet that are operating close to break even. This appears to be primarily due to performance and not investment as average fishing income for these groups of vessels is lower but with not inconsiderably different days at sea. Therefore the costs of fishing outweigh the returns gained. Changes in days at sea will affect this group much more as income which is already low will reduce, making fixed costs a higher proportion of income.
Anecdotally in 2013, some vessels have operated as in previous years, others with more careful management, others with a real change in patterns and some running out of days.
There are minimal alternative fishing opportunities for the Scottish West of Scotland TR2 fleet other than Nephrops, so any negative changes to key variables will impact a greater number of vessels than might be expected. As stock conditions and market conditions appear stable for WOS Nephrops, days at sea is the key external variable impacting viability of this fleet.
The cod recovery plan is an important tool in the management of cod stocks. As shown, cod is not important to the Scottish TR2 fleet. Anecdotal comment suggests if cod was removed from the TR2 fleet’s catch then the economic status of TR2 vessels would not be impacted at all.
Conclusions
There are approximately 15 vessels in the total fleet (of 131) that are currently operating close to break even. Others appear to be financially stable and benefitting from increased prices per tonne of Nephrops in recent years.
Vessels with lower economic performance show average fishing income for these vessels is lower but with not inconsiderably different days at sea to other vessels.
Days at sea is the key external variable impacting the viability of this fleet.
A reduction in days at sea to 75% of 2012 levels will affect all vessels with average vessel net profit halving.
For further information Please contact the Marine Analytical Unit at Marine Scotland. Thanks to Seafish with economic data.
Disclaimer This one page summary is based on a report prepared for Marine Scotland. Views expressed and conclusions drawn are those of the author and not Marine Scotland and in no way pre-empt future policy in this area.
SCOTTISH GOVERNMENT
Economic Assessment of
Scottish West of Scotland
TR2 Vessels
Report for Marine Scotland
u202670
July 2013
This report was prepared by Simon Mardle for the Marine Analytical Unit at Marine Scotland. Note that the views expressed in this report are those of the author and not of Marine Scotland and in no way preempt future policy in this area.
Economic Assessment of Scottish West of Scotland TR2 Vessels
Executive Summary
Nephrops is a highly valuable species in the West of Scotland targeted by Scottish vessels using TR2 gear (i.e. trawling with a mesh of between 80-99.9mm) and creel. As the West of
Scotland (i.e. ICES Area VI) is included in the EU Cod recovery plan, all otter trawl gears are subject to the regulation that is designed to improve cod stocks. Days at sea regulation in particular is applicable to all vessels that use otter trawl, e.g. the Scottish TR2 fleet. Therefore, the regulation does not clearly distinguish between those vessels targeting cod and those vessels targeting other species, e.g. Nephrops - both are potentially subject to the same restrictions in days at sea. There is scope in the Cod recovery plan legislation that excludes vessels from the plan that can be shown that they do not impact on cod stocks.
Landings show that the Scottish West of Scotland TR2 fleet concentrate primarily on Nephrops.
In 2012, greater than 90% of average vessel landed value was from Nephrops and less than
0.1% of average landed value was from cod. Historically, high discards of cod in Area VIa
(reportedly up to 90%) and haddock in VIa (reportedly up to 50%) have been reported by ICES, with the last report relating to June 2012 using 2011 data. Since, measures have been imposed by the EU and Scottish Government to address this (e.g. 120-130mm mesh cod-end) with no more recent assessment. The majority of vessels predominantly use TR2 gear and fish in Area
VIa. The fishing opportunities in other areas are very limited and with regulation increasing any opportunities are lessening. Therefore, it is Nephrops that defines the economic viability of the fleet. With stable stock status and stable LPUE being shown in recent years, changes to total effort of this fleet will impact profitability negatively.
Total landings into West Coast ports indicates that the volume (in tonnes) of Nephrops has been relatively stable over recent years, with a slight increase in most West of Scotland ports in 2012 over landings volume in 2010. Campbeltown, Ayr, Mallaig and Stornoway account for approximately three quarters of Nephrops landed on the West of Scotland. The total percentage value of Nephrops to all landings is approximately 60% in Mallaig, Stornoway and
Campbeltown. This suggests that Nephrops is the dominant species but the ports still depend on other species to a significant level (i.e. Scallops, Others, Haddock and Monks/Anglers).
In recent years, especially 2012, Scottish TR2 vessels from the North Sea fished on the West of
Scotland to target Nephrops in the face of significantly declining stocks in the North Sea. This opportunity has to a large degree been removed from vessels in 2013 with little or no track record fishing on the West of Scotland between 2009-11.
Even with this additional activity, according to stock scientists landings of Nephrops and the
Nephrops stocks have remained above safe biological limits. Between 2010-12 the landed volume of Nephrops from Area VI by the Scottish West of Scotland TR2 fleet has remained relatively stable at approximately 8,000 tonnes. The value on the other hand has increase by approximately 41% in the same period due to the increase in price per tonne. So far in 2013 prices have slipped back somewhat from the highs of 2012 but remain higher than recent averages. i
Economic Assessment of Scottish West of Scotland TR2 Vessels
The economic indicators of the average vessel in this fleet have for the most part increased as fishing incomes have increased due to increased prices of Nephrops. As fuel costs have not increased dramatically, the average vessel has experienced a year on year increase in profit since 2010. The number of West of Scotland vessels operating with TR2 gears in 2012 is estimated to be 131, with many receiving a days at sea allocation and several leasing days. In
2013, 98 vessels are registered to receive a days at sea allocation.
The concern for the economic viability of the Scottish West of Scotland TR2 fleet is that days at sea continue to be reduced as a result of the demands of the Cod recovery plan, which does not take account of the fact that this fleet targets Nephrops and has little to no interest in landing cod. Therefore, with Nephrops stocks that appear to continue at sustainable levels, vessels will be adversely affected for ‘external’ reasons.
The analysis undertaken shows that in the short term, the fleet as a whole can to a degree cope with a reduction of days to 95%. Based on an allocation of days by track record, vessels with lower activity during the reference period will likely receive less days going forward which will have the effect of distributing available days to more recently active vessels. Therefore, there will be the perception that some vessels will lose given an allocation based on track record especially if they were not able to fish during the reference period due to vessel maintenance. It is also evident that if days at sea were reduced beyond 90% of 2012 levels then some vessels in the Scottish TR2 fleet would find it difficult to operate at economically viable levels. The under
250kW segment is more resilient to changes in days at sea as average LPUE is lower than for the over 250kW segment and appears more replicable, i.e. it is easier to maintain lower average
LPUE. The over 250kW segment, where fewer vessels operate, are more susceptible to changes in days at sea. Even so, the average net profit of over 250kW vessels is still positive.
Analysis of the bottom quartile of each segment provides more detail and reveals that there are at least 15 vessels in the total fleet that are operating close to break even. This appears to be primarily due to performance rather than investment as average fishing income for these groups of vessels is lower but with not inconsiderably different days at sea. Therefore the costs of fishing outweigh the returns gained and a change in days at sea will affect this group more than others.
There are minimal alternative fishing opportunities for the Scottish West of Scotland TR2 fleet other than Nephrops, due to more restrictive effort allocations by area and quota reductions of other species, so any negative changes to key variables will impact a greater number of vessels than might be expected. As stock conditions and market conditions appear stable for West of
Scotland Nephrops, days at sea is the key external variable impacting the viability of this fleet.
Anecdotal comment from stakeholders suggests that for some vessels it is unlikely that their allocation of days at sea will last the year. Ultimately, it depends on the vessel as for some it is no change, others a bit of careful management, others a real change in their patterns and some are/will struggle and run out of days. Some local vessels in the fleet are exempt boats, so there has been no impact. Most vessels have continued fishing at their normal rate and it is only towards the end of 2013 when vessels may be short. Catches are reported to be a little lower ii
Economic Assessment of Scottish West of Scotland TR2 Vessels than in 2012 but are more steady. Vessels in 2013 have been more aware of their uptake and are using “stop the clock” provisions. Overall, vessels have not been rationing days over the summer 2013 as weather and catch has been good. Nephrops is the main species landed into
West of Scotland ports and is therefore significant to the fleet and associated industries.
Processors are worried about days at sea affecting volume, but so far in 2013 volumes have been maintained for the on-trade.
The cod recovery plan with the management of days at sea is an important tool in the management of Cod stocks. However, as shown in the analysis conducted in this study, cod is not important to the Scottish TR2 fleet. Anecdotal comment suggests that if cod could be removed from the catch of Nephrops then it would not impact the economic status of vessels in this fleet at all. Therefore, there is no incentive to catch cod. Logbook landings of cod for this fleet indicate an average percentage of approximately 0.1%. This is almost 15 times less than the 1.5% of cod landings allowed as part of the cod recovery plan. Some studies of discards report discards of 50% to 100%. If 100% is assumed as an overestimate, then the total cod landed would still be considerably less than 1.5%.
There is provision in the cod recovery plan for exceptions to be made to fleets/vessels with one gear on board and minimal catch of cod. It is likely that a recent assessment of discards is required to improve the case regarding how the cod recovery plan affects the TR2 fleet. At the time of undertaking this study, such an assessment was not available. iii
Contents
Current knowledge regarding the biology of Nephrops in the West of Scotland ...................... 3
Scottish West of Scotland TR2 Fleet Review .............................................. 6
Case studies from the West of Scotland ................................................... 22
Short to medium term analysis of the Scottish West of Scotland TR2 fleet31
Discussion and Conclusions ..................................................................... 38
Economic Assessment of Scottish West of Scotland TR2 Vessels
Figures and Tables
Figure 3. Number of Scottish West of Scotland TR2 vessels landing Nephrops with 80-99mm meshsize.. 6
v
Economic Assessment of Scottish West of Scotland TR2 Vessels
vi
Economic Assessment of Scottish West of Scotland TR2 Vessels
Introduction
1
This report provides an analysis of recent activity and economic performance of Scottish TR2 vessels targeting Nephrops 2 and operating in the West of Scotland 3 . This group of vessels is defined as being over 10 metres and predominantly targeting Nephrops in the West of Scotland using trawl gear with a mesh size of between 80-99.9mm. There are several grounds in the
West of Scotland which these vessels visit and for scientific assessment they have been
identified as functional units (FUs), Figure 1. The three most productive areas in the West of
Scotland are the Forth of Clyde, South Minch and North Minch. The majority of Nephrops are caught by trawlers targeting Nephrops but there is a considerable amount taken by prawn creel and the under 10m fleet. In 2012, it is estimated that as much as 40% of the Nephrops landed value from ICES Area VI could be attributed to creel-based activity.
Figure 1. Scottish Nephrops landings West of Scotland 2008 (UK vessels into Scotland)
Source: Marine Scotland
This study has been commissioned to provide a high level evaluation of the economic performance of the Scottish West of Scotland TR2 vessels because of recent impacts in days at sea allocations to the fleet. With ever more restrictive days at sea allocations due primarily to the cod recovery plan and few alternative options to the TR2 fleet, this group is particularly vulnerable to significant drops in Nephrops landings.
1 Acknowledgment: thanks to Seafish for support with economic data for the fleets in scope in this study.
2 Nephrops is used throughout this report to refer to Nephrops norvegicus , commonly called Norway lobster, langoustine, Dublin Bay prawn or scampi.
3 West of Scotland is defined as ICES Area VI. Note that the key Nephrops grounds on the West of
Scotland are in ICES Sub-area VIa.
1
Economic Assessment of Scottish West of Scotland TR2 Vessels
The report begins with an overview of Nephrops in the West of Scotland and in the following section provides an overview of the Scottish TR2 fishing fleet operating in the West of Scotland and reviews the trends in the fleet over the last five years. The main body of the report is devoted to the economic evaluation of the fleet and considers likely impacts of scenarios to the fleet in the coming years.
The economic importance of Nephrops to Scotland
Nephrops are distributed widely around the Scottish coast supporting the largest fishery for this species in the world with a value to Scotland of £82 million in 2012 (the second most valuable species after mackerel).
The West of Scotland Nephrops stocks are considered to have been fished at sustainable levels over the past decade and are currently thought to be within safe biological limits.
Recommendations from stock scientists for Nephrops in recent years have therefore been in line with stock levels and have not led to significant reductions in quota.
Nephrops interacts to a small degree with whitefish, particularly cod. The cod recovery plan and the accompanying regulation cover the North Sea and West of Scotland and therefore have an impact on vessels targeting Nephrops. Effort management through days at sea allocations have resulted. A summary of allocations for Scottish West of Scotland TR2 vessels in 2013 is
Table 1. Nephrops days at sea allocation summary, Scottish West of Scotland TR2 vessels
Average Total Allocation
Average of TR1 total
Over 250kW
163
20
Under 250kW
129
6
Average of TR2 total
Average of TR2 North Sea
Average of TR2 West of Scotland
141
22
119
122
7
115
Nephrops is the only form of shellfish regulated by TAC and hence quota. Other than licensing, other shellfish (e.g. scallop, crab and lobster) are regulated by technical conservation measures.
The majority of the TR2 fleet is not able to take advantage of such non-quota fisheries due to the trawl gear predominantly used as well as vessel setup. Therefore, there is little opportunity for TR2 vessels to diversify into other segments, particularly the constrained and congested quota-regulated whitefish sectors. There are some vessels in this fleet that target scallops for a part of the year. One could therefore surmise that incentives for vessel modernisation and improvement are minimal.
2
Economic Assessment of Scottish West of Scotland TR2 Vessels
Current knowledge regarding the biology of Nephrops in the West of
Scotland
The distribution of Nephrops is limited to areas of seabed composed of soft mud in which the animal constructs semi-permanent burrows that provide shelter from predators. The most recently published assessment was made by the International Council for the Exploration of the
Sea (ICES) in 2012.
4 Observed abundance in the West of Scotland has fluctuated over the time
series of data available, exhibiting a steady trend from the late 1990s to 2008 (Figure 2). The
stocks are still considered to be above a ‘trigger’ stock size at which ICES would provide more stringent advice to help maintain the stock in a productive condition. The harvest rates in the
West of Scotland have for the most part been around or below levels at which MSY is maintained, however in recent years the three most productive areas of the West of Scotland
were above this point before falling below in the last period (Figure 2).
Figure 2. West of Scotland Nephrops FUs: abundance (left), harvest rates (right)
Source: Marine Scotland with data from ICES
In the West of Scotland Nephrops fisheries, the last published harvest rate (i.e. proportion of the stock removed) and the resulting stock being fished is better than the agreed target rates that are consistent with maximum sustainable yield (MSY). However, ICES advice for management at FU level has emphasised the need for whitefish by-catch mitigation measures in these
Nephrops fisheries.
Several studies have been undertaken to establish discard rates of whitefish in the Nephrops fishery. For example, in a study by Stratoudakis et al. (2001) only approximately 40% of fish caught as by-catch in the Clyde Nephrops fishery were retained and landed. It was reported that much of the fish discards consisted of undersized commercially important species with whiting being the most commonly discarded species and poor cod Trisopterus minutus, long-rough dab
4 This assessment is based on underwater television surveys of the Nephrops grounds conducted by
Marine Scotland Science (MSS). These annual surveys provide estimates of the density of Nephrops burrows which are then raised to give an overall stock abundance.
3
Economic Assessment of Scottish West of Scotland TR2 Vessels
Hippoglossoides platessoides, hake and Norway pout also featuring relatively frequently
(Stratoudakis et al., 2001). However, cod and haddock were not specifically called.
Even so, this study and others like it were undertaken before management measures such as a
120mm square mesh cod end were implemented to specifically address whitefish bycatch.
Therefore, specific measures are in place that are aimed at minimising by-catch and subsequent discarding levels of juvenile fish in inshore areas. As can be seen by the catch
composition of landings (see Figure 8 and Figure 9) whitefish (particularly cod) is not
economically important to the Scottish West of Scotland TR2 fleet.
Further, the Government has introduced clear guidelines on the allocation of days at sea to vessels using trawl gear. In particular, the conservation credits scheme aims to provide more days at sea to vessels taking additional steps to minimise impacts of their fishing gear to nontarget species. For example, two incentives are the “Nephrops Flip Flap ‘netting’ grid trawl” and
Faithlie Cod Avoidance Panel.
Cod recovery plan
The cod long-term management plan (
“the Plan”, Council Regulation (EC) No 1342/2008) establishes a plan for four cod stocks corresponding to the following geographical areas:
(a) the Kattegat;
(b) the North Sea, the Skagerrak and the eastern Channel;
(c) the West of Scotland;
(d) the Irish Sea.
The ‘West of Scotland’ means ICES Division VIa and that part of ICES Division Vb which lies within waters under the sovereignty or jurisdiction of Member States.
Key management measures include TACs, effort control and technical measures. Automatic reductions in quota and effort allocations apply if the cod stock remains below defined levels of sustainability. Effort is measured in kWDays (i.e. the product of vessel engine power in kW and the total days fished for all vessels within the management plan).
The Plan acknowledges that “allocations of the maximum allowable fishing effort have been significantly reduced for the main cod catching gears since the entry into force of the plan” and that “this may have a significant economic and social impact on the fleet segments that use the same gears but which fish principally for species other than cod.”
As a result, “the Plan foresees scope to exclude vessels whose activities do not contribute significantly to cod mortality.
” Article 11a in the Proposed Amendment to the Plan provides for
“exclusion of fishing effort deployed in certain areas, depth or by certain gears”, that is:
4
Economic Assessment of Scottish West of Scotland TR2 Vessels
1 . Fishing effort deployed by a vessel during a trip may be excluded by the Member States when counting the deployed effort against the maximum allowable fishing effort if:
(a) the entire fishing activity of that trip by the vessel concerned is carried out outside coddistribution areas as listed or
(b) the entire fishing activity of that trip by the vessel concerned is carried out at a depth greater than 300m; or
(c) during that trip the fishing vessel concerned has only one regulated gear onboard and that gear is listed
2 . Based on the information provided by Member States, and in accordance with scientific advice, the Council shall establish a list of areas outside cod distribution and a list of gears the technical attributes of which result in cod catches of less than 1.5% of the total catches measured by weight.
Emergency measures introduced in EC regulation 43/2009 (Annex III) (and rolled forward into
2010 and2011) prohibited all fishing activity to the east of the West of Scotland Management
(French) line in Division VIa with the exception of a number of derogated fisheries. For demersal otter trawlers targeting whitefish this required an increase in mesh size to 120 mm and the inclusion of a 120 mm square-meshed panel (SMP).Vessels targeting Nephrops also require the
120 mm SMP or a sorting grid. More stringent catch composition rules have also been introduced. For Nephrops-directed fisheries, no more than 10% of the retained catch can consist of cod, haddock, and whiting.
Further effort reductions have been implemented since February 2011 under Annex IIa of Reg.
(EC) 57/2011.This includes a 25% reduction in effort for all trawl fleets relative to a recent average effort. ‘Buy back’ of this effort reduction is possible after adoption of cod avoidance measures or proof of operating west of the cod management line.
5
Economic Assessment of Scottish West of Scotland TR2 Vessels
Scottish West of Scotland TR2 Fleet Review
The Scottish West of Scotland TR2 Fleet
This fleet is described by vessels using trawl gear with a mesh size between 80-99mm predominantly catching Nephrops in the West of Scotland and with a registered administration port on the West Coast of Scotland.
5 This fleet has been typically segmented by economists into
vessels under 250kW and vessels over 250kW. The evolution of the fleet is shown in Figure 3.
The cod recovery plan imposes a 120mm square mesh cod end to otter trawling gear and it is noted that the Conservation credits scheme goes beyond this to incentivising a cod end of
130mm and above.
Figure 3. Number of Scottish West of Scotland TR2 vessels landing Nephrops with 80-
99mm meshsize
120
100
80
60
40
20
Over 250kW
Under 250kW
0
2006 2007 2008 2009 2010 2011 2012
The Scottish West of Scotland TR2 fishing fleet, comprised of single-rig and twin-rig Nephrops trawlers using 80-99mm mesh, has seen significant changes over the last decade. For the
Under 250kW segment, the number of vessels using 80-99mm TR2 gear in the fleet has more than doubled,
and it is this ‘inshore’ fleet that is more active (Figure 5). However, the Over
250kW segment is more productive at a unit level with an LPUE approximately 50% more than
the Under 250kW segment (Figure 11).
The increase in number of vessels is explained by vessels using greater meshsize from 70-
79mm to 80-99mm during the early part of the period evaluated in line with regulation (see
Figure 4). As shown, since 2009 the use of meshsize less than 80mm has not been pursued.
5 Note that vessels with a total income of less than £20k have been removed from the analysis.
6
Economic Assessment of Scottish West of Scotland TR2 Vessels
Figure 4. Landings value of Nephrops caught with otter trawl in Area VI (all UK vessels)
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
-
2006 2007 2008 2009 2010 2011 2012
Mesh 70-79mm Mesh 80-99mm Mesh >=100mm
The number of West of Scotland vessels operating with TR2 gears in 2012 is estimated to be
132, with many receiving a days at sea allocation and several leasing days. In 2013, 106 vessels are registered to receive a days at sea allocation. Since 2009, the fleet appears to have been relatively stable regarding the number of vessels active in the fleet. Note that this set of vessels does not include the activity of the Scottish North Sea TR2 fleet.
in the most recent period 2010-12, the West of ScotlandTR2 fleet effort using TR2 gear has increased in recent years. However, the effort in other areas and/or using other gear has declined.
Figure 5. Scottish West of ScotlandTR2 fleet effort: >250kW (left), <250kW (right)
2500
2000
1500
1000
500
0
5000
4500
4000
3500
3000
VI_TR1
VI_TR2
OTHER
18000
16000
14000
12000
10000
8000
6000
4000
2000
VI_TR1
VI_TR2
OTHER
0
2006 2007 2008 2009 2010 2011 2012 2006 2007 2008 2009 2010 2011 2012
The number Scottish West of Scotland TR2 vessels by length shows that all vessel size groups under 25m have been similarly affected, indicating peak levels in most recent years as shown in
Table 2. Since 2009, the number of vessels and effort has been relatively stable. However, the
success of the Nephrops fishery is evident in the significant increase in vessels between 10-
18m since 2006 targeting Nephrops with TR2 gear.
7
Economic Assessment of Scottish West of Scotland TR2 Vessels
Table 2. Number of Scottish West of Scotland TR2 vessels by length
10-12m
12-15m
15-18m
18-25m
2006 2007 2008 2009 2010 2011 2012
10
15
34
11
9
16
47
15
8
17
49
17
28
30
61
16
27
29
55
14
26
27
56
17
29
31
55
17
Landings overview
The total landed value to the Scottish West of Scotland TR2 fishing fleet has shown steady increase over the past 3 years (2010-12) at current prices. Landed volume has shown similar trend, but it is evident that prices have increased to close the gap between then volume and
value curves (see Figure 6 and Figure 7).
Figure 6. Total Nephrops volume & value Scottish West of Scotland TR2 fleet (all areas)
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
-
5,000,000
2007 2008 2009 2010 2011 2012
TOTAL VOLUME TOTAL VALUE
Landings from Area VI for the West of Scotland TR2 fleet show that volume and value 6 have steadily increased in recent years. Total landings volume from Area VI between 2010-12 has for the most part remained more stable. This could be taken as indicative of the health of Nephrops as it has attracted more effort without significantly reducing productivity.
6 Landed value reported throughout the analysis is actual reported value from logbooks, unadjusted for inflation.
8
Economic Assessment of Scottish West of Scotland TR2 Vessels
Figure 7. Scottish West of ScotlandTR2 Area VI Nephrops landings: vol (left), val (right)
6,000
5,000
4,000
3,000
2,000
1,000
-
18,000,000
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
-
2006 2007 2008 2009 2010 2011 2012 2006 2007 2008 2009 2010 2011 2012
VI_TR2_Nephrops (Over 250kW) VI_TR2_Nephrops (Under 250kW) VI_TR2_Nephrops (Over 250kW) VI_TR2_Nephrops (Under 250kW)
The value of reported landings by the Scottish West of Scotland TR2 fishing fleet has been
consistently dominated by Nephrops over the last five years (Figure 8 and Figure 9). Nephrops
in Area VI alone accounted for approximately 82% of total recorded landings value during the period 2008-12 for the West of Scotland TR2 fleet. The increase of value over the period indicates an increase in price per tonne for Nephrops in particular. This indicates that if landings volume of Nephrops decreases significantly, either through reduced LPUE or reduced effort (i.e. days at sea), then the fleet will become vulnerable to changing prices.
Figure 8. Scottish West of Scotland TR2 >250kW landings by métier: vol(left), value(right)
4,500
4,000
12,000,000
10,000,000
3,500
3,000
2,500
2,000
1,500
1,000
OTHER_ACTIVITY
VI_TR1_ALL
VI_TR2_OTHER
OTHER_Nephrops
VI_TR2_Nephrops
VI_TR2_Demersal
8,000,000
6,000,000
4,000,000
OTHER_ACTIVITY
VI_TR1_ALL
VI_TR2_OTHER
OTHER_Nephrops
VI_TR2_Nephrops
VI_TR2_Demersal 2,000,000
500
-
2006 2007 2008 2009 2010 2011 2012 2006 2007 2008 2009 2010 2011 2012
Figure 9. Scottish West of ScotlandTR2 <250kW landings by métier: vol(left), value(right)
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
2006 2007 2008 2009 2010 2011 2012
OTHER_ACTIVITY
VI_TR1_ALL
VI_TR2_OTHER
OTHER_Nephrops
VI_TR2_Nephrops
VI_TR2_Demersal
20,000,000
18,000,000
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
-
2006 2007 2008 2009 2010 2011 2012
OTHER_ACTIVITY
VI_TR1_ALL
VI_TR2_OTHER
OTHER_Nephrops
VI_TR2_Nephrops
VI_TR2_Demersal
9
Economic Assessment of Scottish West of Scotland TR2 Vessels
Landed price per tonne peaked in 2012. Indeed it increased year-on-year since 2010. The first quarter of 2013 (from Jan-Mar) indicates that prices dropped from 2012 levels slightly (see
Figure 10). Anecdotally, the quality of the Nephrops in 2013 has been reported as good, and
traditionally the first quarter of the year has been less productive (see Figure 12).
Figure 10. Scottish West of ScotlandTR2 landed price per tonne
3,500
3,000
2,500
2,000
1,500
1,000
500
-
2006 2007 2008 2009 2010 2011 2012 2013
Price (Over 250kW) Price (Under 250kW)
The weight and value of a kilogram of tails is considerably lower than for the whole Nephrops and hence the average price indicated from logbook landings (i.e. volume and value) may be misleading. However, the income gained is absolute of which the average price per tonne across the fleet is a good indicator of production.
The landings per unit effort (LPUE) of Nephrops by the Scottish West of Scotland TR2 fleet is a
clear indicator of the status of Nephrops in the métier (see Figure 11). The LPUE of the over
250kW and under 250kW segments show similar trends with an apparent drop in the first
quarter of 2013 which is typical of recent years (see Figure 12).Therefore, the status of the
stock appears to have remained very stable over recent years.
10
Economic Assessment of Scottish West of Scotland TR2 Vessels
Figure 11. Scottish West of ScotlandTR2 Landings per unit Effort for Nephrops
0.70
0.60
0.50
0.40
0.30
0.20
0.10
-
2006 2007 2008 2009 2010 2011 2012 2013
LPUE (Over 250kW) LPUE (Under 250kW)
The landings per unit effort in area VI by month since 2006 are shown in Figure 12 with
remarkably similar trends. It’s clearly apparent that April to September is more significant to the fleet’s earnings from Nephrops than the rest of the year. As indicated, LPUE in the first quarter of 2013 appears to be following a similar trend to the same period in both 2011 or 2012.
Figure 12. Landings per unit effort for area VI Nephrops TR2: >250kW(left), <250kW (right)
1.20
1.00
0.80
0.60
0.40
0.20
2011
2012
2013
0.70
0.60
0.50
0.40
0.30
0.20
0.10
2011
2012
2013
-
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
The landings per unit effort monthly trends, for area VI Nephrops TR2 (Figure 12) and the total
effort for area VI TR2 (Figure 13) for the over 250kW segment follow a similar trend with vessels
targeting Nephrops more in the second half of the year. The months of March through August have most effort applied. As landed value of the under 250kW segment peaks in the summer months, it is likely that the high effort in the latter part of the year reflects a period of the year with lower opportunity, e.g. offshore areas not as readily available.
11
Economic Assessment of Scottish West of Scotland TR2 Vessels
Figure 13. Total effort for area VI, TR2: over 250kW(left), under 250kW (right)
500
450
400
350
300
250
200
150
100
50
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011
2012
2013
1800
1600
1400
1200
1000
800
600
400
200
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011
2012
2013
Catch composition of the Scottish West of Scotland TR2 fleet
The catch composition of the Scottish West of Scotland TR2 fleet is predominantly Nephrops as
shown in Figure 8 and Figure 9 . The majority of this fleet’s effort is using TR2 gear in Area VI as
shown in Figure 5. A breakdown of the catch composition by species for this fleet confirms the
reliance on Nephrops with over 92% of landed value coming from this species (see Table 3).
There is a small group of vessels in the under 250kW segment of this fleet, approximately 5-10, that target scallops as well as Nephrops. Scallops contribute about 3.3% to total landed value of the fleet. The remaining species landed are mostly demersal and contribute little to total landed value. With 132 vessels estimated to operate in this fleet in 2012, the average 2012 vessel revenue provided by species that are not Nephrops or Scallops is approximately £8,932.
The Cod recovery plan allows for up to 1.5% of landed volume to be cod. It is evident that the average landed volume of cod to the Scottish West of Scotland TR2 fleet is approximately 0.1%.
Therefore, this would suggest that on average, a vessel could land almost 15 times more cod but due to conservation measures and economic value, the incentive to target whitefish for this fleet is minimal.
The following recent assessment by ICES of cod and haddock discarding in Area VIa is provided below (Box 1 and Box 2). Note that these assessments do not consider differences in discard rates between Nephrops trawlers and other trawlers using TR2 and TR1 gear, however as most demersal trawl activity is TR2-based on the West of Scotland the figures are thought to be relevant.
12
Economic Assessment of Scottish West of Scotland TR2 Vessels
Box 1. Assessment of cod discarding in Area VIa (from ICES report June 2012).
Total catch of cod in Area VIa in 2011 was estimated to be 6,364 tonnes, where 8% were landings and 92% discards.
Due to changes to the Scotland survey design and gear after 2010, later surveys have to be considered however no fisheries-independent abundance series were available for 2011. Predicted catch is divided into landings and discards. Discard information is imprecise compared to landings data because of lower sampling coverage. Because catch is now dominated by discards it is very important to maintain the highest possible sampling (observer) coverage of vessels in Division VIa.
Estimated mortality of the cod stock is increasing due to discards and SSB is very low, below the biomass sustainable limit. There was a zero TAC for this area in 2012 and a 1.5% bycatch by live weight limit that applies to landings and therefore does not constrain discards.
Box 2. Assessment of haddock discarding in Area VIa (from ICES report June 2012).
Total catch for haddock in Area VIa in 2011 was estimated to be 3,227 tonnes, where 46% were discards.
Splitting discards by fleet showed that Nephrops vessels (TR2) were estimated to be responsible for approximately 80% of all discards while landing only 80 tonnes, less than 5% of the total landings
(1,742 tonnes).
In recent years around 50% of the total catch in weight has been discarded, so restricting landings alone may not achieve the necessary increase in SSB, however the stock is reported t be harvested sustainably.
13
Economic Assessment of Scottish West of Scotland TR2 Vessels
Table 3. Scottish West of Scotland TR2 catch composition in Area VI in 2012 by species and vessel power group.
Species
Nephrops
Scallops
Razor Clam
Haddock
Queen Scallops
Monks or Anglers
Herring
Sprats
Witch
Thornback Ray
John Dory
Lemon Sole
Squid
Megrim
Cod
Sole
Whiting
Brill
LANDED VALUE
Over Under
250kW 250kW Total
%age
Value
8,066,516 16,552,136 24,618,652 92.2%
1,418 758,082
460,598
759,500
460,598
2.8%
1.7%
53,053
102,317
58,321
47,939
30,208
98,592
141,916
24,654
19
7,690
151,645 0.6%
141,916 0.5%
126,971 0.5%
58,340 0.2%
47,939 0.2%
37,898 0.1%
20,423
563
628
2,466
9,145
5,438
6,836
6,040
3,018
15,613
28,066
21,898
17,773
11,001
11,320
7,055
7,800
10,643
36,037
28,629
22,527
20,239
20,146
0.1%
0.1%
0.1%
0.1%
0.1%
16,759 0.1%
13,890 0.1%
13,841 0.1%
13,661 0.1%
Species
Nephrops
LANDED VOLUME
Over25 Under2
0kW 50kW
2,609 5,361
Scallops
Sprats
1
320
378
Queen Scallops
Razor Clam
Haddock
Herring
Monks or Anglers
Witch
71
122
44
35
283
161
88
0
9
9
Thornback Ray
Whiting
Megrim
Plaice
Hake
Lemon Sole
Cod
Spotted Ray
Crabs
3
0
0
4
16
7
8
3
8
10
6
7
9
17
9
7
8
3
10
10
10
9
33
16
15
12
11
Total
%ageV olume
7,970 82.3%
379
320
3.9%
3.3%
283
161
159
122
54
44
2.9%
1.7%
1.6%
1.3%
0.6%
0.5%
0.3%
0.2%
0.2%
0.1%
0.1%
0.1%
0.1%
0.1%
0.1%
Note: 46other species are caught by this fleet, each with less than 0.1% of total value. The above 18 species covers 99.6% of total landed value for the Scottish
West of Scotland TR2 fleet.
14
Economic Assessment of Scottish West of Scotland TR2 Vessels
There are a number of vessels in each of the under 250kW and over 250kW segments that only target Nephrops. In 2012, half of the under 250kW segment and a quarter of the over 250kW
segment landed only Nephrops (see Table 4). Further, 110 of the 131 vessels included in this
analysis of the Scottish West of Scotland TR2 fleet had Nephrops landings in 2012 greater than
90% of the total value. Of the vessels landings <75% of their total value in 2012 from Nephrops, most target Scallops and Queen scallops for part of the year.
Table 4. Number of vessels with percentage Nephrops Vs Total landings value
Over 250kW
2006
100%
99%
95%
90%
85%
75%
0%
TOTAL
Under 250kW
2006
2
2
5
19
1
2
3
4
2007
2
6
4
26
1
0
10
3
2008
4
5
7
30
0
1
9
4
2009
2
3
6
29
1
7
7
3
2010
0
4
6
26
3
4
4
5
2011
5
6
2
29
4
6
3
3
2012
2
2
2
28
7
3
7
5
2007 2008 2009 2010 2011 2012
100%
99%
95%
90%
85%
75%
0%
10
10
14
5
0
4
8
12
17
11
4
4
3
10
23
14
7
7
3
2
5
43
31
13
5
2
3
9
44
25
10
6
1
6
7
50
19
10
6
2
1
9
51
19
12
6
1
3
12
TOTAL 51 61 61 106 99 97 104
Over half of the Over 250kW and 60% of the under 250kW segments only use TR2 gear, measured from logbook landings. There are a number of vessels that use alternative gear, mostly dredge and creel in the under 250kW segment and dredge in the over 250kW segment.
15
Economic Assessment of Scottish West of Scotland TR2 Vessels
Table 5. Number of vessels with percentage TR2 Vs Total landings value
Over 250kW
2006
100% 5
99%
95%
90%
85%
3
3
1
1
75%
0%
TOTAL
2
4
19
Under 250kW
2006
100%
99%
95%
6
6
6
90%
85%
75%
0%
7
3
2
21
2007
9
0
3
1
0
3
10
26
2008
10
1
4
2
0
4
9
30
2009
11
2
4
4
1
1
6
29
2010
15
1
4
0
0
2
4
26
2011
17
3
3
1
1
0
4
29
2012
15
3
5
1
1
0
3
28
2007
12
4
11
2
3
2
27
2008
18
10
10
2
5
2
14
2009
33
3
10
2
8
21
29
2010
57
8
12
4
3
3
12
2011
61
7
9
3
1
4
12
2012
63
5
11
3
4
1
17
TOTAL 51 61 61 106 99 97 104
The number of vessels with cod landings for the under 205kW and over 250kW segments are
shown in Figure 14 and Figure 15 respectively. In 2012, approximately 10% of vessels in the
Scottish West of Scotland TR2 under 250kW fleet landed cod. This number was approximately
25% for the over 250kW segment.
The catch composition analysis clearly indicates the behaviour of the fleet towards Nephrops.
As discussed, there are some vessels that have wider opportunities, but the core fleet concentrates almost solely on Nephrops as there is little value in targeting other species. As
indicated in Table 4 and Table 5, there is an increasing number of vessels only landings
Nephrops over recent years (i.e. from 10 vessels in 2006 to 51 in 2012 for the under 250kW segment; and from 1 vessel in 2006 to 7in 2012 for the over 250kW segment.
16
Economic Assessment of Scottish West of Scotland TR2 Vessels
Figure 14. Number of vessels with landings of cod Vs total vessels 2012 (under 250kW)
120
100
80
60
40
20
0
2010
2011
2012
#Vessels 2012
Figure 15. Number of vessels with landings of cod Vs total vessels 2012 (over 250kW)
30
25
20
15
10
5
0
2010
2011
2012
#Vessels 2012
17
Economic Assessment of Scottish West of Scotland TR2 Vessels
Trend analysis of the Scottish West of Scotland TR2 fleet
The behaviour of the Scottish West of Scotland TR2 fleet has changed over recent years
(Figure 16). Landed volumes from the Firth of Clyde and the North Minch appear to peak in
2012 with South Minch seeing a small decline. As shown in Figure 17, an increasingly small
proportion of the fleet’s landings are from the North Sea (i.e. Fladen Ground). With more restrictive conditions on West of Scotland vessels receiving North Sea days at sea, it is expected that in 2013 and beyond the activity of West of Scotland TR2 vessels in the North Sea will reduce.
Figure 16. Total volume and value of Nephrops by functional unit: vol (left), value (right)
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2008
2009
2010
2011
2012
12000000
10000000
8000000
6000000
4000000
2000000
0
2008
2009
2010
2011
2012
Figure 17. Total volume of Nephrops by functional unit
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2008
2009
2010
2011
2012
However, in 2012 the declining landings of Nephrops from the Fladen Ground appears to have resulted in more Scottish North Sea TR2 vessels targeting Nephrops in West of Scotland (see
In 2012, there was a significant increase in the North Sea TR2 fleet’s effort on the
West of Scotland, quadrupling in the North and South Minches between 2011-12. In 2013 this
18
Economic Assessment of Scottish West of Scotland TR2 Vessels has reduced significantly as the days at sea allocation was based on activity between 2009-11 and therefore adjusted the opportunity available to North Sea vessels significantly.
Figure 18. Total volume of Nephrops landed by Scottish North Sea TR2 fleet by functional unit (not including Fladen Ground)
1800
1600
1400
1200
1000
800
600
400
200
0
2008
2009
2010
2011
2012
Economics overview
The Scottish West of Scotland TR2 fleet is segmented into under 250kW and over 250kW for the annual Data Collection Framework. This is a useful way of differentiating between vessels that operate quite differently. For example, the under 250kW vessels fish closer to shore and are more flexible in how they operate, typically operating with smaller vessels and therefore with a lower capital outlay than the over 250kW segment. The economics for the average vessels in
the West of Scotland TR2 fleet is presented in Table 6.
Table 6. Average vessel economic position of the West of Scotland TR2 fleet
Average vessel
Fishing Income
Non-fishing income
Total income
Fuel
Crew share
Other fishing costs
Total fishing costs
Total vessel costs
Total operating costs
2010
Under 250kW
2011 2012 2010
Over 250kW
2011 2012
133,035 162,165 185,787 235,006 305,617 361,516
2,385 2,750 3,151 5,701 3,596 4,254
135,421 164,915 188,938 240,706 309,213 365,770
27,343 34,686 36,367 57,638 74,419 78,955
32,839 40,048 49,254 49,518 58,658 78,462
22,137
82,319
24,171 27,692 36,316 42,338 50,082
98,905 113,312 143,471 175,415 207,499
30,935 35,657 40,851 72,955 71,181 84,200
113,254 134,562 154,163 216,426 246,595 291,699
19
Economic Assessment of Scottish West of Scotland TR2 Vessels
Operating profit
Depreciation
Interest
22,166
8,615
2,501
30,353
9,095
2,385
34,774 24,280
11,226 5,025
3,113 2,003
62,618
20,438
3,170
74,071
15,954
3,415
Other financial costs
Net profit
147
10,903
120
18,752
172 597
20,264 16,655
119
38,890
530
54,172
GVA 55,005 70,401 84,028 73,798 121,275 152,533
Note: 2012 is estimated based on actual fishing income and derived fuel costs from days at sea. Grey cells indicate estimates based on a proportion of revenue.
Economic data is collected annually for the UK by SFIA. The economic data for a sample of vessels for the previous year is collected in the latter part of the current year. For example, 2011 economic data was collected in late 2012. The average economic position of West of Scotland
TR2 vessels for the most recent period available is shown in Table 6.
The contribution of the Scottish West of ScotlandTR2 fleet to the economy is not insignificant.
As shown in Table 7, the total Gross Value Added
7 to the economy was estimated to be £5.5 million in 2011. The proportion of GVA to total fishing income for the TR2 fleet is currently estimated to be about 25% for the under 250kW segment and about 21% for the over 250kW
segment (interpolated from figures provided in Table 8). If GVA of this fleet does decline in line
with the income, mainly from Nephrops, then the local economy will likely be affected.
Table 7. Total economic contribution of the West of Scotland TR2 fleet in 2011
Total income
Operating profit
Net profit
GVA
2010
Under 250kW
2011 2012 2010
Over 250kW
2011 2012
14,083,759 15,501,997 18,893,776 6,980,482 9,276,394 11,704,625
2,305,295 2,853,179 3,477,443 704,119 1,878,530 2,370,259
1,133,885 1,762,693 482,989 1,166,705
3,437,437 3,794,847 4,960,137 1,460,289 1,822,346 2,584,854
Average total crew
Average FTE crew
Source: Seafish
3.39
3.22
3.11
3.00
4.19
4.04
4.67
4.60
Table 8. Operating profit and GVA as proportion of income for West of Scotland TR2 fleet
Operating profit
GVA
2010
Under 250kW
2011
16%
24%
18%
24%
2012
18%
26%
2010
10%
21%
Over 250kW
2011
20%
20%
2012
20%
22%
7 Gross Value Added is a particularly good measure of an activity’s contribution to a local economy as it describes the value of goods and services produced in an area or industry; generally GVA is output minus intermediate consumption. In this analysis, GVA is the sum of crew share and vessel operating profit.
20
Economic Assessment of Scottish West of Scotland TR2 Vessels
Employment multipliers
From the most recently published inputoutput study in Scotland, the “Fishing” (IOC #4) income multiplier in 2009 was ranked 8 of 104 industries. The full set of multipliers for “Fishing” across
all fleets is shown in Figure 19. A recent input-output study specifically considering crustaceans
(i.e. including Nephrops) was undertaken with the results summarised in Table 9. This study
suggests that fleets targeting Nephrops contribute at an above average level to other fleets with regard to employment in the supply chain.
Total employment in fishing in West Coast of Scotland districts in 2011 was reported to be 2159
(Source: Scottish Government). In 2012, with 323employed on under 250kW vessels and 131 employed on over 250kW vessels, total direct employment by the TR2 fleet is estimated to be approximately 454.When linked to the input-output study, this infers that at least another 1095 jobs are created upstream and
downstream based on this fleet’s activity (see Table 7).
Figure 19. Fishing input-output multipliers for Scotland
2
1.5
1
0.5
0
3.5
3
2.5
Income Employment
Source: Scottish Government
GVA min
Table 9. Wild crustacean fishing input-output multipliers for UK
Multipliers
Income
Employment
Source: Seafish, in press
Total Demand driven Supply driven
2.06
2.41
1.39
1.49
1.66
1.92
21
Economic Assessment of Scottish West of Scotland TR2 Vessels
Case studies from the West of Scotland
Overview of Port activity on the West of Scotland
Three West of Scotland locations have been selected to assess changing landings of Nephrops
in recent years: Mallaig, Stornoway and Campbeltown (Figure 20).
Figure 20. Port locations relative to Nephrops grounds on West of Scotland
Stornoway
Mallaig
Campbeltown
Source: Marine Scotland
The total landings volume (in tonnes) of Nephrops has been relatively stable over recent years, with a slight increase in most West of Scotland ports in 2012 over landings volume in 2010.
Campbeltown, Ayr, Mallaig and Stornoway account for approximately three quarters of
Nephrops landed on the West of Scotland.
Figure 21. Total Nephrops landings volume by West of Scotland port
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
Campbeltown
Ayr
Mallaig
Stornoway
Portree
Oban
Ullapool
2010 2011 2012
22
Economic Assessment of Scottish West of Scotland TR2 Vessels
A similar trend is shown by landings value, with Campbeltown heading the list with
approximately £10m of landings of Nephrops in 2012 (Figure 22). Mallaig and Stornoway
showed much higher value relative to volume than other ports in 2012, a significant increase to
2011 levels, suggesting that average price of Nephrops was higher in these ports in 2012. The total percentage value of Nephrops to all landings is approximately 60% in Mallaig, Stornoway and Campbeltown. This suggests that Nephrops is the dominant species but the ports still depend on other species to a significant level.
Figure 22. Total Nephrops landings value by port (left) and percentage Nephrops (right)
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
2010
2011
2012
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2010
2011
2012
The Nephrops landed in West of Scotland ports comes primarily from the West of Scotland TR2 and creel fleets, even though North Sea TR2 vessels with West of Scotland quota and days land into West of Scotland ports as well as some other UK vessels. A summary of the landings value by the West of Scotland TR2 fleet from ICES Area VI, collated by administrative port
rather than landing port, is presented in Figure 23. In comparison to 2011, 2012 saw increases
in landings value for vessels in Campbeltown and Stornoway but similar level in other ports. It is typical that vessels will land Nephrops in ports close to catching grounds, for example catches from the Minches will be landed in Stornoway or Mallaig.
Figure 23. West of Scotland TR2 Area VI fleet landings values by administration port (left) and percentage Nephrops (right)
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
2010
2011
2012
120%
100%
80%
60%
40%
20%
0%
2010
2011
2012
23
Economic Assessment of Scottish West of Scotland TR2 Vessels
Mallaig
A summary of landings value by species into Mallaig is shown in Figure 24. The dominant
species is Nephrops with Haddock, Monks or Anglers, Scallops and Others making up the remainder. A significant increase in Nephrops landings was reported in 2012.
Figure 24. Total landings value from all vessels into Mallaig by species
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
2010
2011
2012
Comparing the total landings volume of Nephrops into Mallaig in recent years, there has been a
year on year increase since 2010 (Table 10). The total value of Nephrops landed by Mallaig
registered vessels was approximately a half of all Nephrops landings into Mallaig in 2010 and
2011 but almost a third in 2012. This indicates a significant proportion of Nephrops landed into
Mallaig by vessels from other registered ports. In 2012 it is surmised that North Sea TR2 vessels contributed to this relative increase. In 2013 the opportunity for North Sea TR2 vessels to fish on the West of Scotland has been removed.
Table 10. Landings volume of Nephrops – Mallaig
All Nephrops landings
2010
1,624
2011
1,771
2012
2,019
TR2 admin vessels Nephrops landings 801 832 719
Based on an unstructured survey, several stakeholders were surveyed to understand the current position in Summer 2013 of TR2 vessels in Mallaig. Responses from the survey have been summarised into three overarching questions (see Box 3). These responses are directly from stakeholders and have not been edited to check accuracy.
24
Economic Assessment of Scottish West of Scotland TR2 Vessels
Box 3. Mallaig summary of responses 8
How are the days at sea TR2 restrictions affecting the Nephrops trawling vessels?
For some vessels it is unlikely that their allocation will last the year, meaning they will have to tie up, losing crew, which they are unlikely to get back. Or, they will have to lease days, assuming that Marine Scotland opens up leasing arrangements for TR2 vessels, again increasing costs to the business, at a time of year (i.e. the last quarter of the year) when it is harder to make money.
Many of the smaller visiting vessels will have to leave a couple of weeks early due to a lack of West Coast Days. Most of the larger vessels were working TR1 gear. These vessels would have had to rent these days which would increase their costs significantly, although the impact was reduced by the 2 for 1 uptake.
As for the local fleet, the majority are exempt boats, so there has been no impact. The few who are not, have continued fishing at their normal rate and it is only towards the end of the year when vessels may be short.
How are the trawling vessels adapting (are vessels changing fishing behaviour)?
Vessels are more aware of their uptake and are using “stop the clock” provisions, which allow vessels to stop their uptake when they shelter at night.
Trips have been shortened, and in periods of poorer weather or unfavourable tidal conditions they have tended to tie up more readily than if they hadn’t been restricted. This has reduced their earning as Nephrops fishing relies on time at sea to make a living.
As mentioned, some of the larger vessels have changed to TR1 gear.
Most of the local fleet though are still fishing their usual patterns, however affected vessels have had to adapt their fishing patterns in order to make the most of the smaller allocations.
Vessels have also looked at the possibility of moving to other areas to fish, however the
Days at Sea regulation makes the costs of doing so prohibitive (i.e. investing in new gear to comply with the regulation and leasing days).
Vessels also have the option of fitting a selectivity grid, which would take them clear of days at sea, but it is felt that this has not been trialled sufficiently to risk taking it aboard.
How important is Nephrops from trawlers to local business (e.g. employment, trade etc)?
Nephrops is the main species landed in Mallaig and is therefore significant to the fleet and associated industries. Most of the prawns landed are transported out of the village so there is very little processing and therefore employment locally.
That said Mallaig is not entirely dependent any more on fishing as there has been investment in both Fish Farming and Tourism.
Nephrops trawling is the mainstay of the local fishing economy and without it the industry would not survive as few vessels have little alternative. This would then cascade to the onshore sector as the lack of income would make these businesses unviable.
8 Note that the presented responses are as made by stakeholders and therefore we cannot attest to the accuracy of the facts and figures quoted by respondents in this Box.
25
Economic Assessment of Scottish West of Scotland TR2 Vessels
Stornoway
A summary of landings value by species into Stornoway is shown in Figure 25. The dominant
species is Nephrops with Scallops and Others making up the remainder. A significant increase in Nephrops landings value was reported in 2012.
Figure 25. Total landings value from all vessels into Stornoway by species
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
2010
2011
2012
Comparing the total landings volume of Nephrops into Stornoway in recent years, 2011 saw a
small decrease from 2010 but an increase in 2012 beyond that of 2010 (Table 11). The total
value of Nephrops landed by Stornoway registered vessels was approximately two thirds of all
Nephrops landings into Stornoway between 2010-12. This indicates a significant proportion of
Nephrops landed into Stornoway by vessels from other registered ports. In 2013 the opportunity for North Sea TR2 vessels to fish on the West of Scotland has been removed.
Table 11. Landings volume of Nephrops – Stornoway
2010 2011 2012
All Nephrops landings
TR2 admin vessels Nephrops landings
1,452 1,378 1,650
907 988 1,162
Based on an unstructured survey, several stakeholders were surveyed to understand the current position in Summer 2013 of TR2 vessels in Stornoway. Responses from the survey have been summarised into three overarching questions (see Box 4). These responses are directly from stakeholders and have not been edited to check accuracy.
26
Economic Assessment of Scottish West of Scotland TR2 Vessels
Box 4. Stornoway summary of responses 9
How are the days at sea TR2 restrictions affecting the Nephrops trawling vessels?
Vessels are working as always, that is landing patterns are the same as in recent years
Each trawler has 3-4 men (incl skipper) – vessels are mostly skipper owned – crew will move on if boats are tied up as they’re paid with landings
Catches are a little lower than last year, but are more steady – overall 2013 has provided good fishing and prices (tails £5/kg, whole £4/kg)
57-67 vessels are already exempted from the cod recovery plan
The end of 2013 will be difficult. For example, of 14 vessels in one group, 2 vessels will be out of days by 3rd week of September, 1 by end of October and several more by end of
November. The 2 with least days have minimum allocation due to one vessel having a major breakdown and the other being short crewed and the skipper having family problems during the reference period.
Stornoway was one of the worst allocated ports as the track record was based on hours at sea and steaming time from Stornoway is more for vessels from this area.
How are the trawling vessels adapting (are vessels changing fishing behaviour)?
Vessels cannot convert to using other gear or catch in other areas
Vessels have not been rationing days over the summer 2013 as weather and catch has been good
TR2 West of Scotland don’t have opportunities to fish in any other areas and TR1 is not possible for the majority even though some TR1 eligibility
How important is Nephrops from trawlers to local business (e.g. employment, trade etc)?
The Western Isles are particularly affected as vessels have been bought in from outside
West of Scotland and brought with them a bad history of Nephrops. Modernisation for some of these vessels has been an issue (e.g. 7 trawlers in Barra and 4 in Stornoway were replaced within a couple of years)
Barra is a good example of dependency on fishing with around 100 directly employed in fishing and another 100 indirectly (e.g. processing etc)
9 Note that the presented responses are as made by stakeholders and therefore we cannot attest to the accuracy of the facts and figures quoted by respondents in this Box.
27
Economic Assessment of Scottish West of Scotland TR2 Vessels
Campbeltown
A summary of landings value by species into Campbeltown is shown in Figure 26. The dominant
species is Nephrops with Scallops and Others making up the remainder. A small increase in
Nephrops landings value was reported in 2012.
Figure 26. Total landings value from all vessels into Campbeltown by species
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
-
2010
2011
2012
Comparing the total landings volume of Nephrops into Campbeltown in recent years, landings
have been steady since 2010 (Table 12). The total value of Nephrops landed by Campbeltown
registered vessels was approximately four fifiths of all Nephrops landings into Campbeltown between 2010 and 2012. As with the other West of Scotland ports, this indicates a proportion of
Nephrops landed into Campbeltown by vessels from other registered ports.
Table 12. Landings volume of Nephrops – Campbeltown
All Nephrops landings
2010 2011 2012
3,349 3,562 3,522
TR2 admin vessels Nephrops landings 2,673 2,650 2,899
Based on an unstructured survey, several stakeholders were surveyed to understand the current position in Summer 2013 of TR2 vessels in Campbeltown. Responses from the survey have been summarised into three overarching questions (see Box 5). These responses are directly from stakeholders and have not been edited to check accuracy.
28
Economic Assessment of Scottish West of Scotland TR2 Vessels
Box 5. Campbeltown summary of responses 10
How are the days at sea TR2 restrictions affecting the Nephrops trawling vessels?
It depends on the vessel. For some it is no change, others a bit of careful management, others a real change in their patterns and some are/will struggle and run out of days. For some, restrictions are biting hard.
The change in West Coast Days can be summarised in an example of one vessel. In Jan
2012, 230 days were allocated, in Aug 2012 that changed to 16 days per month, in Jan
2013 days remained at 16 per month (i.e. 4.5 days per week) but 133 days were allocated
Leasing days is costly and not transparent, in an example of one boat 10 days have been leased from a donor vessel but this is effectively 8 days after conversion with kW.
Some vessels are using square mesh panels of 200mm with 95-97mm mesh
The allocation has been the biggest disappointment – with 200 days last year, down to 110 days this year. The years used as track record are not flexible – all vessels break down, that’s people and equipment – new engines can take months (or even years) to obtain.
Of the known appeals to the reference period and days given, only one was successful
Many vessels on low allocation will run out of days by end of September. Ironically, boats catching the least cod are suffering. All days will be used this year.
Vessels are for the most part operating within quota and are performing well in 2013 (stock and quota is available).
The observer programme is reporting <1% cod within the catch, within the 1.5% limit of the
Cod recovery plan. Of 71 observed days since July, highest cod for one group of vessels has been 0.2%.
For the Clyde, the quality of catch has been really good in 2013, with the percentage of whole landings better than 2012. For the Minches, the quality this year has been reported as poorer with smaller prawns.
Reference period prices were good, but effort during reference period was not high as returns were good (not pushing)
One respondent noted that leasing quota is ok, but leasing days is not. WOS can’t compete with larger external vessels - £300 to £400, even £100 per day not viable. Whitefish vessels are being allowed to transfer TR2 prawn days to whitefish days at 5 to 1.
Those businesses that will fail are those with minimum days allocation.
How are the trawling vessels adapting (are vessels changing fishing behaviour)?
For some vessels the basic allocation is enough and they have not needed to alter their fishing patterns.
For smaller vessels, behaviours have n’t changed in 2013 as they can’t steam that far
Others have adapted their patterns and are managing their hours – checking what time they went out and trying to get back in as close to that minute as possible – e.g if they left at
0533 they would try to be back in by say 1930 rather than 1940 thus saving an hour.
10 Note that the presented responses are as made by stakeholders and therefore we cannot attest to the accuracy of the facts and figures quoted by respondents in this Box.
29
Economic Assessment of Scottish West of Scotland TR2 Vessels
There have been more ‘stop the clock’ voyages, where a vessel will go in to a port to rest and then begin a new voyage in the morning, this saves several hours a day. Also, saving time by shortening trips to 20 hrs per day.
More vessels are not going out on a Friday whereas before they would do a short day.
In the Clyde there is no fishing at the weekend
A couple of vessels have decided not to change their patterns and will run out of days before the end of the management period.
If fishing in the Minches then will land in Mallaig or Oban.
Fishing more around the Clyde to save time steaming, which means inshore grounds are getting more effort which is not ideal
Some vessels have noted squid fish ing opportunities are possible, although it’s a real lottery to steam out and find that there’s none around
Some vessels may convert to creel fishing but this is very expensive. If they do take the chance it won’t be in 2013. It’s worth noting that trawlers are generally bigger than creelers so would need more creels and this would increase gear conflicts within creelers.
How important is Nephrops from trawlers to local business (e.g. employment, trade etc)?
The landing of Nephrops is important to many local businesses. The fishing agents, chandlery, engineers, local shops, transport companies.
One skipper reported employing one more man this year as catch is lower quality and requires more manpower.
Processors are worried about DAS affecting volume, but so far this year volumes have been maintained. Volumes have been ok so far this year for on-trade.
Using Seafish figures (i.e. one job at sea provides 5 on shore), approximately 1000 jobs are dependent on the Clyde fishery
30
Economic Assessment of Scottish West of Scotland TR2 Vessels
Short to medium term analysis of the Scottish West of
Scotland TR2 fleet
High level model
Using 2011 as the Base Year, the fishing income of the average vessel in future years has been simulated using the primary levers of price and landings per unit effort. The landings of vessels in two segments (under 250kW and over 250kW) have been divided into six categories: TR2
Nephrops in Area VI, TR1 Nephrops in Area VI, TR2 Demersal in Area VI, TR1 Demersal in
Area VI, Other Nephrops and Other landings. The activities of vessels are therefore categorized into three gear types: Area VI TR2, Area VI TR1 and Other.
A schematic of the high level model is presented in Figure 27.
Figure 27. High level model schematic (for each under 250kW and over 250kW segment)
Price Days at Sea Landings per unit effort
VI TR2
TR2 Nephrops
TR2 Demersal
TR2 Nephrops
TR2 Demersal
#Vessels
VI TR1
TR1 Nephrops
TR1 Demersal
Landings by gear and species group
TR1 Nephrops
TR1 Demersal
Income by gear and species group
OTH Nephrops OTH Nephrops
Other
OTHER Other
The model takes forecasts for four key inputs based on changes from the base year 2011: Total number of vessels operating in the West of Scotland TR2 under and over 250kW segments, total effort by gear, average landings per unit effort by gear and species group, and average price by gear and species group. The resulting outputs from this analysis provides total landings by gear and species group and total fishing income by gear and species group. Income divided by the number of vessels then provides for the average vessel position.
It can be assumed that in the long run the total fleet is likely to tend towards zero rent. However, as this high level model is intended for a short to medium term view then positive net profits for the average vessel are more likely to result in stability of the size of the fleet. Negative average net profit would typically result in some vessels needing to find other activities to maintain economic viability.
31
Economic Assessment of Scottish West of Scotland TR2 Vessels
The productivity dynamics of this model are driven by the number of vessels, days at sea and landings per unit effort. The short term view assumes some stability in the number of vessels as other alternatives are limited for such a highly focused fleet as the Scottish West of Scotland
TR2 fleet. In order to evaluate the effects of significant changes to the number of vessels the
landings per unit effort is adjusted based on an indication of total catch. Figure 28below
highlights this circular relationship as when one of these variables is changed then the others will be directly affected, e.g. total landings from a fleet of half the current size may be possible but not without changing their LPUE as number of days at sea is naturally constrained to those available in a given year.
Figure 28. Circular relationship between changing input variables
TOTAL
LANDINGS
Scenarios
Six scenarios have been modelled to evaluate the potential impact of changing days at sea to the Scottish West of Scotland TR2 fleet. Trajectories for the key variables, price and LPUE, are
shown in Figure 29. For each of the segments, under and over 250kW, the forecast of the 2009
to 2011 average is considered for the variables.
Figure 29. TR2 Nephrops price (left) and LPUE (right) scenario trajectories
3,500
3,000
2,500
2,000
1,500
1,000
500
-
0.70
0.60
0.50
0.40
0.30
0.20
0.10
-
Over 250kW
Over 250kW (2009-
11 avg)
Under 250kW
Under 250kW (2009-
11 avg)
32
Economic Assessment of Scottish West of Scotland TR2 Vessels
The scenarios modelled are selected to evaluate potential changes in days at sea with the impact of changing prices and LPUE being considered. The number of days at sea available in
2012 is assumed to be the maximum available in 2013 and 2014. In fact in 2013, a 95% target for days in 2012 would be available. The cod recovery plan has meant that other reductions in days have also been discussed. Therefore, 90% and 75% reductions are also considered in the following analysis. Six scenarios result:
Table 13. Scenario specification
Scenario
1: 95% days at sea
2: 90% days at sea
3: 75% days at sea
4: 75% days at sea,09-11 prices
5: 90% days at sea, 09-11 prices
6: 75% days at sea, 09-11 prices
Days at Sea
95% of 2012
90% of 2012
75% of 2012
95% of 2012
90% of 2012
75% of 2012
Price
2012
2012
2012
2009-11 avg
2009-11 avg
2009-11 avg
LPUE
2012
2012
2012
2009-11 avg
2009-11 avg
2009-11 avg
Results
The results of the high level model are presented for the under 250kW and over 250kW
segments in Table 14 and Table 15respectively. In the long run, break-even for each sub-fleet
could be defined where net profit equals zero. The under 250kW segment is shown to be profitable at an average level in all scenarios.
Table 14. Scenario results for the Scottish West of Scotland TR2 Under 250kW segment
Under 250kW
#Vessels
Income
Operating profit
Net profit
GVA
2012 95% days 90% days 75% days
104
32,808
18,298 16,658
81,228
104
31,168
77,166
104
182,640 176,451 167,164 139,304 174,194 165,026 137,521
29,527
15,017
73,105
104
24,606
10,096
60,921
95% days
& 09-11 prices
104
30,318
15,808
75,728
90% days
& 09-11 prices
104
28,722
14,212
71,742
75% days
& 09-11 prices
104
23,935
9,425
59,785
If days at sea were to be reduced beyond 90% of 2012 levels then it is likely that the number of vessels in the under 250kW TR2 segment may decrease to a small degree in the short term. If prices and LPUE drops to the 2009-11 average level, then the over 250kWsegment will undoubtedly be affected. It will be more affected than the Under 250kW segment as the smaller vessels indicate a more stable (and lower) level of each of these indicators.
The two key variables for this fleet are price per tonne and landings per day (i.e. LPUE). If LPUE continues at 2012 levels then the fleet can likely continue at current numbers even with a small
33
Economic Assessment of Scottish West of Scotland TR2 Vessels drop in net profit. However, there is the risk that if LPUE does not continue at 2012 levels then indications are that the current over 250kWfleet segment will as a whole have significantly reduced profit. If days at sea were also reduced to 75% of 2012 levels then this could result in the TR2 fleet reducing in size. It is estimated that between 10-20 vessels could be significantly affected financially in the short to medium term. Note that this does not take account of an offsetting increase in vessel LPUE as fewer vessels operate in the same area so is likely to be a slight under-estimate in the viable number of vessels, hence a range is provided.
Table 15. Scenario results Scottish West of Scotland TR2 over 250kW segment
Over 250kW
#Vessels
Income
Operating profit
Net profit
GVA
2012 95% days 90% days 75% days
28 28 28 28
95% days
& 09-11 prices
28
90% days
& 09-11 prices
28
75% days
& 09-11 prices
28
360,859 346,850 328,594 273,829 306,004 289,898 241,582
74,314 70,598 66,882 55,735 53,510 50,693 42,245
54,415
152,633
50,699
145,002
46,984
137,370
35,837
114,475
33,611
119,151
30,795
112,880
22,346
94,067
The over 250kW is more sensitive to price and LPUE, and as a result a reduction of 5% in days at sea over 2012 with a reduction of price to 2009-11 levels then the average net profit of a vessel would be almost halved.
The results are summarised in Figure 30.
Figure 30. Scenario results for key economic indicators: >250kW (left), <250kW (right)
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
2,500
2,000
1,500
1,000
500
-
Operating profit
Net profit
GVA
34
Operating profit
Net profit
GVA
Economic Assessment of Scottish West of Scotland TR2 Vessels
Percentile based high level model
11
A percentile based view of the high level model based on quartiles is presented in this section.
The percentiles have been derived by estimating the economics for every vessel in the segments. The economic status of the average vessel in each of the under 250kW and over
250kW segments are presented in Table 16. The average vessel economic status is presented
against the average vessel in the bottom quartile for each of the under and over 250kW segments. The bottom quartile includes the bottom 25% performers in terms of net profit levels.
The average vessel effort of the bottom quartile is similar to the average vessel effort of the segments indicating similar activity. However, the fishing income is markedly different with the bottom quartile’s revenues considerably lower than the average of the segment. This suggests that the efficiency of vessels in the bottom quartile, measured in landings per unit effort, is much less than other quartiles. For both the Under and Over 250kW segments the net profit indicates that vessels are on average operating close to break even. This is not likely to be sustainable in the long term but could be due to external conditions such as vessel breakdown.
Table 16. West of Scotland TR2 Average Vs Bottom Quartile economic indicators (2012)
Number of vessels
Average days at sea
Fishing Income
Non-fishing income
Total income
Fuel
Crew share
Other fishing costs
Total fishing costs
Total vessel costs
Total operating costs
Operating profit
Depreciation
Interest
Other financial costs
Net profit
GVA
Under 250kW
Average Bottom quartile
104
162
185,787
26
167
145,406
3,151
188,938
36,367
49,254
27,692
113,312
40,851
154,163
34,774
11,226
3,113
172
20,264
84,028
2,466
147,872
42,936
38,548
21,673
103,158
31,972
135,130
12,743
8,155
2,139
108
2,341
51,291
Over 250kW
Average Bottom quartile
28
183
361,516
7
166
188,388
4,254
365,770
78,955
78,462
50,082
207,499
84,200
291,699
74,071
15,954
3,415
530
54,172
152,533
2,217
190,605
67,007
40,887
26,098
133,992
43,877
177,869
12,736
12,599
1,954
74
-1,891
53,623
11 Thanks to Seafish for making this analysis possible by using specially developed datasets based on
Seafish Costs and Earnings data.
35
Economic Assessment of Scottish West of Scotland TR2 Vessels
The gross value added (i.e. estimated as the total of crew share and operating profit) is significantly more for the top three quartiles compared to the bottom quartile. For the over
250kW segment, GVA for bottom quartile vessels is a third of that of the average vessel.
The scenarios investigated for the high level model have been considered for the percentile
view also. The results of this analysis for the bottom percentile are presented in Table 17 and
Table 17. Bottom Quartile Scottish West of Scotland TR2 Under250kW segment results
Under 250kW
#Vessels
Income
Operating profit
2012 95% days 90% days 75% days
26
145,406
26
140,479
12,743 12,105
26
133,085
11,468
26
110,904
9,557
95% days
& 09-11 prices
26
139,643
11,791
90% days
& 09-11 prices
26
132,293
11,170
75% days
& 09-11 prices
26
110,244
9,309
Net profit
GVA
2,341
51,291
1,703
48,726
1,066
46,162
-845
38,468
1,389
48,194
768
45,657
-1,093
38,048
Table 18. Bottom Quartile Scottish West of Scotland TR2 Over 250kW segment results
Over 250kW
#Vessels
Income
Operating profit
2012 95% days 90% days 75% days
9 9 9 9
95% days
& 09-11 prices
9
90% days
& 09-11 prices
9
75% days
& 09-11 prices
9
188,388 181,075 171,544 142,954 163,728 155,111 129,259
12,736 12,099
-1,891 -2,527
53,623 50,941
11,462
-3,164
48,260
9,552
-5,075
40,217
4,842
-9,784
39,963
4,587
-10,039
37,860
3,822
-10,804
31,550
Net profit
GVA
The percentile analysis brings out the differences in performance that exist across the TR2 fleet segments. In the Under 250kW segment, for all scenarios the average vessel is indicated to be able to break even, however that means that there are potentially around 10 vessels in the under 250kW segment that are finding it very difficult financially in current conditions. As days at sea changes in future years, this will put added pressure on the viability of these vessels.
The bottom quartile of the over 250kW segment suggests that it is even more difficult for these vessels to maintain viability. A large proportion of the 9 vessels in this bottom quartile are not performing at sustainable levels in the medium to long term.
The percentile analysis indicates that between 10 to 15 vessels could find conditions unviable economically should opportunities regarding activity be reduced in the short term. It is evident from discussion with stakeholders that the current track record used (i.e. 2009-11) for vessels
36
Economic Assessment of Scottish West of Scotland TR2 Vessels will further disadvantage vessels that had lower activity due to vessel maintenance or vessel changes.
37
Economic Assessment of Scottish West of Scotland TR2 Vessels
Discussion and Conclusions
The Scottish West of Scotland TR2 fleet are dependent on Nephrops. The majority of vessels predominantly use TR2 gear and fish in Area VIa. The fishing opportunities in other areas are very limited and with regulation increasing any alternative opportunities are lessening.
Therefore, it is Nephrops that defines the economic viability of the fleet. With stable stock status and stable LPUE being shown in recent years, changes to total effort of this fleet will impact profitability negatively, assuming prices don’t increase.
An analysis of landings into West Coast ports indicates that the total landings volume (in tonnes) of Nephrops has been relatively stable over recent years, with a slight increase in most
West of Scotland ports in 2012 over landings volume in 2010. Campbeltown, Ayr, Mallaig and
Stornoway account for approximately three quarters of Nephrops landed on the West of
Scotland. The total percentage value of Nephrops to all landings is approximately 60% in
Mallaig, Stornoway and Campbeltown. This suggests that Nephrops is the dominant species but the ports still depend on other species to a significant level, in logbooks mostly recorded as
Scallops and Others but also Haddock and Monks/Anglers.
The analysis undertaken shows that in the short term, the fleet as a whole can to a degree cope with a reduction of days to 95%. Some vessels will gain given an allocation based on track record and others will lose. There is some incentive therefore for a qualitative assessment to investigate if those vessels that are more affected than previously are impacted because of poor performance, changing activity across areas or vessel maintenance. This study has not completed such a vessel focused evaluation.
It is also evident that if days at sea were reduced beyond 90% of 2012 levels then some vessels in the Scottish TR2 fleet would find it difficult to operate at economically viable levels. The under
250kW segment is more resilient to changes in days at sea changes as average LPUE is lower than the for the over 250kW segment and appears more replicable, i.e. it is easier to maintain lower average LPUE. The over 250kW segment, where fewer vessels operate, are more susceptible to changes in days at sea. Even so, the average net profit of vessels is still positive.
The bottom quartile of each segment shows more detail, but also the fact that there are at least
15 vessels in the total fleet that are operating close to break even. This appears to be primarily due to performance and not investment as average fishing income for these groups of vessels is lower but with not inconsiderably different days at sea. Therefore the costs of fishing outweigh the returns gained. Changes in days at sea will affect this group much more.
There are minimal alternative fishing opportunities for the Scottish West of Scotland TR2 fleet other than Nephrops, so any negative changes to key variables will impact a greater number of vessels than might be expected. As stock conditions and market conditions appear stable for
38
Economic Assessment of Scottish West of Scotland TR2 Vessels
West of Scotland Nephrops, days at sea is the key external variable impacting the viability of this fleet.
Anecdotal comment from stakeholders suggests that for some vessels it is unlikely that their allocation of days at sea will last the year. Ultimately, it depends on the vessel as for some it is no change, others a bit of careful management, others a real change in their patterns and some are/will struggle and run out of days. Some local vessels in the fleet are exempt boats, so there has been no impact. Most vessels have continued fishing at their normal rate and it is only towards the end of 2013 when vessels may be short. Catches are reported to be a little lower than in 2012 but are more steady.
With regard to fishing behaviour anecdotally, vessels are generally more aware of their uptake and are using “stop the clock” provisions. Trips have been shortened, and in periods of poorer weather or unfavourable tidal conditions they have tended to tie up more readily than if they hadn’t been restricted. More vessels reported not going out on a Friday whereas before they would do a short day. Some of the larger vessels have changed to TR1 gear. Overall, vessels have not been rationing days over the summer 2013 as weather and catch has been good.
Nephrops is the main species landed into West of Scotland ports and is therefore significant to the fleet and associated industries. Processors are worried about days at sea affecting volume, but so far in 2013 volumes have been maintained for the on-trade.
The cod recovery plan with the management of days at sea is an important tool in the management of Cod stocks. However, as shown in the analysis conducted in this study, cod is not important to the Scottish TR2 fleet. Anecdotal comment suggests that if cod could be removed from the catch of Nephrops then it would not impact the economic status of vessels in this fleet at all. Therefore, there is no incentive to catch cod. Logbook landings of cod for this fleet indicate an average percentage of approximately 0.1%. This is almost 15 times less than the 1.5% of cod landings allowed as part of the cod recovery plan. Some studies of discards report discards of 50% to 100%. If 100% is assumed as an overestimate, then the total cod landed would still be considerably less than 1.5%.
There is provision in the cod recovery plan for exceptions to be made to fleets/vessels with one gear on board and minimal catch of cod. It is likely that a recent assessment of discards is required to improve the case regarding how the cod recovery plan affects the TR2 fleet. At the time of undertaking this study, such an assessment was not available.
The modelling undertaken in this study has shown how susceptible vessels in the TR2 fleet are to changes in days at sea. The vessels that are most likely to be found to be most unprofitable in the bottom quartile are those with high costs relative to revenue in 2012 (the base year of the
39
Economic Assessment of Scottish West of Scotland TR2 Vessels model). Some of the vessels in the bottom quartile may have recently invested their vessel 12 , which will be approximated by lower fishing revenue if this has impacted 2012. However, most are those that are operating inefficiently relative to the average vessel. No vessels with recent investment have been identified that fall into this category. In fact, those with investment prior to
2012 could be surmised to have higher revenues in following years as the investment improves productivity.
12 It is possible that vessels with significant vessel investment (i.e. >£100k) in recent years in particular will face difficultly if their target activity is mostly TR2 and their target species is mostly Nephrops.
40
