Today an independent report commissioned by SIFT and Wildfish, and authored by two leading analysts, was published which reports that headline estimates of the economic impacts of Scottish salmon farming exaggerate economic benefits by focussing on gross rather than net effects and disregarding counterfactuals.
The report [Available here] which uses Skye and Lochalsh as a case study, shows that the industry overplays its economic benefits and downplays its costs. It also provides the first estimates of the jobs lost in other sectors as a result of salmon farming.
Across Scotland as a whole, official statistics show that salmon farming production jobs have fallen in the last decade. In Skye and Lochalsh, the report estimates that approximately 137 people currently work in the industry, some 2% of the local workforce. However, the report estimates that the negative impacts of salmon farming have cost between 12 and 38 jobs locally in other sectors, including in mussel farming, creeling and marine tourism, all of which have markedly lower environmental impacts than open cage salmon farming.
Multinationals which own most of Scotland’s salmon farms also receive substantial UK tax credits and grants, with reported figures showing that in some years some firms receive more than they pay in tax. Moreover, the industry requires extensive government oversight, which is funded from the public purse, while salmon farms have been exempt from local business rates since 1981.
The report also notes that host communities are not guaranteed to receive a share of locally-generated profits. For example, salmon companies operating in Scotland, which are largely owned by foreign based corporations, may declare their profits and pay dividends out of Scotland. Equally, corporation tax receipts flow to London. This echoes the Griggs Review of Aquaculture carried out for the Scottish Government, which was largely supportive of the industry but when considering community benefits argued that “comparisons should be drawn with the wind farm industry where local communities receive a ‘share of the benefits’ that companies make from a local operation”.
Charles Millar, Executive Director of SIFT, said: “The salmon industry operating in Scotland may tout itself as a success story, but we now have data on the jobs it costs in other sectors. All too often the benefits don’t stay in Scotland. At the very least, this industry should now be required to pay its way and make a fair contribution to the parts of Scotland where its harmful effects are most widespread. The Scottish Government has spent far too many years touting the benefits of salmon farming and ignoring its costs: we need an independent Scotland-wide economic analysis of this sector before the multinationals get a penny more in state funding or any new planning approvals.”
Andrew Moxey, of Pareto Consulting, co-author of the report and former Chief Agricultural Economist for the Scottish Government, said: “Published official guidance for economic appraisals emphasises the importance of estimating net effects accounting for costs as well as benefits. Doing so for salmon farming is hindered by a lack of data, but our findings from Skye & Lochalsh confirm that headline figures exaggerate the net benefit to Scotland and host communities. Better data and more routine analysis would help to inform debate about the magnitude and distribution of net benefits and their relevance to achieving different policy objectives.”
