Salmon Farming: Dumping Allegations (Hansard, 11 January 1994)

§ The Minister of State, Scottish Office (Lord Fraser of Carmyllie)
My Lords, during 1993 Norwegian salmon production increased by 28 per cent. to 180,000 tonnes compared with an increase of 18 per cent. to 45,000 tonnes in Scotland. My right honourable friend the Secretary of State for Scotland has encouraged the salmon farming industry to update its 1991 dumping allegations for the benefit of the Commission, which should then be able to carry out an investigation. My right honourable friend has also welcomed the introduction of a reference price for farmed salmon.

§ Lord Mackie of Benshie
My Lords, I thank the Minister for that Answer. Has he fully explored the situation? The projection is that Norwegian salmon production will increase by 50,000 tonnes in 1994. The salmon fishing organisations estimate that during the three years from 1990 to 1992 nearly £300 million of government money was ploughed into the Norwegian industry and that it is losing between six and seven kroner on every pound that is sold. Would it not be wise to have an immediate rise in the reference price?

§ Lord Fraser of Carmyllie
My Lords, I shall deal first with the noble Lord's final point. The Scottish Office raised the reference price with the Commission, and as a result of those representations it was fixed at some 16 per cent. above the minimum import price. The noble Lord made a number of allegations about the volume and the price of production in Norway. Those allegations have been made by a number of people in the industry in Scotland. The Secretary of State and I urge the industry to put those allegations in the most precise form to the Commission in order that it can examine the true extent, if any, of the dumping.

Lord Campbell of Croy
My Lords, what are the Government doing to obtain the facts about whether dumping is taking place? It is especially difficult for individuals in a new industry, which is based in remote areas including the Highlands and Shetland, to discover precise figures relating to a foreign country.

§ Lord Fraser of Carmyllie
My Lords, I appreciate that there are difficulties for the industry. Again, I stress that assertions appear to be made, as the noble Lord has just made, as regards the level of subsidy in Norway. 64 Those figures should be put to the Commission, which has a prime responsibility within the Community to decide what action should be taken if they are established to be correct.

§ Lord Carmichael of Kelvingrove
My Lords, the Minister suggested that his honourable friend Sir Hector Monro is to extend the import price embargo on Norwegian salmon. Is that correct? According to the Glasgow Herald, in January the Minister was looking only sympathetically at the possibility of extending the import price embargo on Norwegian salmon. Secondly, is the Minister suggesting that the Government do not believe that there is a dumping of Norwegian salmon or are they not sure of the extent and believe that the salmon fishers are exaggerating?

§ Lord Fraser of Carmyllie
My Lords, no. The price of farmed salmon has reduced. As I said in my original Answer, there has been a significant increase in production in Scotland as well as in Norway. One must be careful to determine the exact extent of the effect of the dumping on the reduction of that price. That must be analysed carefully for the Commission. My honourable friend Sir Hector Monro was at the Fisheries Council Meeting in December. At that meeting the Commission undertook to review during the course of this month the current minimum import prices for farmed salmon in order to ascertain whether they should continue beyond 31st January. He also spoke to the Commissioner, Mr. Paleokrassas, and I understand that the review is still underway.

§ Lord Glenarthur
My Lords, my noble and learned friend referred to the reference price. Is it tight that under the GATT rules it is probable that the salmon reference price will not achieve the figure that he: suggested it might? That is because countervailing duties against the Norwegians or anyone else cannot be applied by the EC unless effective means of supply management involving government are in place within producing countries of the EC.

§ Lord Fraser of Carmyllie
My Lords, I am not sure that I suggested any function of the reference price. It will allow for a more effective monitoring of the EC salmon market and for the provision of a benchmark against which future safeguard action to support salmon farmers within the Community can be considered. I appreciate that the reference price is different from the minimum import price; but, as I indicated previously, it was as a result of Scottish representation set at some 16 per cent. higher than that minimum import price.

§ Lord Mackie of Benshie
My Lords, is the noble and learned Lord further aware that the price to the producers, who employ 6,000 people in the west of Scotland and the Highlands generally, is £1.20 on average, and the break-even costs are £1.50? Other governments in North America have shut out altogether Norwegian salmon from their markets because of the extent of government subsidisation.

§ Lord Fraser of Carmyllie
My Lords, I am certainly aware that in other markets outwith the United Kingdom, Scotch farmed salmon commands a 65 premium, and I hope that it continues to do so. However, I should indicate that at present within the United Kingdom the price for farmed salmon is above the minimum import price.