Salmon farmers hit back at study which suggests economic benefits ‘exaggerated’

Scotland’s salmon farming industry has hit back at a report which found the economic impact of the sector has been exaggerated.

Trade body Salmond Scotland dismissed the research, which was co-authored by a former Scottish Government chief agriculture economist, as being an “activist report, not credible economic analysis”.

However, Andrew Moxey, of Pareto Consulting, who was chief agricultural economist between 2001 and 2006, insisted the research  – which looked at  the impact of salmon farming in the Skye and Lochalsh area –  “confirm that headline figures exaggerate the net benefit to Scotland and host communities”.

The study was published in the wake of research for Salmon Scotland which found the salmon farming industry is worth £1 billion a year to the country’s economy.

The Biggar economics research added the sector’s economic contribution has increased by a quarter over the past four years, adding that salmon farming jobs pay an average of about £44,500 a year – with this about 16% higher than typical salaries.

However, this latest research, by Pareto Consulting and the business school at the University of Edinburgh stated that “headline estimates of the economic impacts of Scottish salmon exaggerate economic benefits by focussing on gross rather than net effects and disregarding counterfactuals”.

The report went on to claim  there is an “an overreliance on self-reporting” when assessing the impact of salmon farming, and that headline estimates “do not take account of displacement effects on other businesses”, such as the impact of additional costs or reduced revenues on these firms or difficulties they may have recruiting.

With the study having focused on the Skye and Lochalsh area, it added that between 9% and 28% of reported salmon farm jobs there “may not be net additions to local employment due to such effects”

Mr Moxey 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 and Lochalsh confirm that headline figures exaggerate the net benefit to Scotland and host communities.”

He added that “better data and more routine analysis would help to inform debate about the magnitude and distribution of net benefits” from the industry.

Charity WildFish, which commissioned the work along with the Sustainable Inshore Fisheries Trust (Sift) said  it showed how “salmon farming’s business case is looking increasingly fragile”.

WildFish Scotland director Nick Underdown stated: “Lax regulations and tax breaks have made Scotland a place that multinational salmon farmers love to operate. They don’t have to meet the same environmental standards that they do elsewhere, and by pouring their waste and chemicals into our seas they leave other marine industries to suffer the consequences.

“All the while the number of salmon production jobs has flatlined, despite years of exaggerated economic claims.”

Meanwhile Charles Millar, executive director of Sift, said there should now be an “independent Scotland-wide economic analysis of this sector” before permission is granted for any new fish farms or further public funding is awarded.

Speaking about the salmon sector Mr Millar said: “All too often the benefits don’t stay in Scotland, the profits flow overseas, and local communities are left with both the bills and the environmental consequences.”

Salmond Scotland however dismissed the report, saying: “WildFish is an anti-salmon farming lobbying group that talks a lot about conservation but never about its own responsibilities.

“Blaming everyone else for the decline of wild salmon has become its default tactic.”

The Salmond Scotland spokesperson added: “This is an activist report, not credible economic analysis. Robust, independent work by Biggar Economics shows salmon farming adds about £1 billion a year to Scotland’s economy, supports 11,000 jobs, and helps keep fragile rural communities alive.

“Scotland’s farmers meet some of the toughest environmental and welfare standards anywhere, with record improvements in fish health.

“And while WildFish pushes for policies that would shut farms and put thousands out of work, the sector is investing £230,000 this year as part of a £1.5 million programme to protect wild Atlantic salmon.”