Norway's traffic light markdown 'will cost almost 500 jobs'
Seafood producers' organisation points to community impact of reduction in production
A newly-announed 6% reduction in maximum allowed biomass in one of Norway’s 13 salmon production areas will cause coastal Norway to lose annual value creation of almost NOK 700 million (£55.8m) and almost 500 jobs, says seafood producers’ organisation Seafood Norway.
The reduction is the third in a row for the production area between Karmøy and Øygarden (PO3) as a result of Norway’s salmon farming “traffic light system” aimed at protecting wild migrating smolts from sea lice from fish farms.
Reductions made under the traffic light system have resulted in losses of several billion kroner, thousands of jobs, and large tax revenues for coastal municipalities, according to a new report commissioned by Seafood Norway and written by food research institute Nofima.
Thousands of jobs lost
“Downsizing is not a theoretical exercise in a ministry office. It has already led to the loss of thousands of jobs and several billion in annual value creation,” said Geir Ove Ystmark, chief executive of Seafood Norway.
The Nofima report, “Ripple effects of cuts”, maps the business and socio-economic effects of the production cuts since 2020 in the production areas PO3, PO4 (Nordhordland-Stadt) and PO5 (Stadt-Hustadvika).
These are the only three areas out of Norway’s 13 salmon farming production areas that have been forced to cut salmon production through the traffic light system. The production areas cover Norway’s entire coastline, stretching from PO1 (Swedish border to Jaeren) in the south to PO13 (East Finnmark) in the north.
The traffic light system is intended to mitigate the perceived impact of sea lice from fish farms on wild salmon smolts while also allowing salmon farming to grow, but is widely regarded as not working as intended.
The production areas are given a new traffic light colour every two years. Farmers in production areas with a green light can grow production by 6%, a yellow light means production must stay the same, and a red light means production must be reduced by 6%.
This year’s traffic lights signalled only one reduction, in PO3. The reduction is estimated a 5,300 tonnes of production capacity.
Production area 4, which has previously had three consecutive red lights, was given a yellow light, along with eight other areas. Three production areas received a green light: Swedish border to Jæren (PO1), West Finnmark (PO12) and East Finnmark (PO13).
45,500 tonnes lost
Nofima’s report, which doesn’t include the latest red light for PO3, points out that the overall maximum allowed biomass in production areas 3, 4, and 5 has been reduced by 26,060 tonnes since 2017.
At today’s average utilisation rate, this corresponds to 45,500 tonnes of salmon production that was lost, and the value creation, jobs, supplier assignments, and tax revenues that would have followed.
Nofima estimates lower tax revenue for coastal municipalities and the state as a result of cuts from 2020-2024 at NOK 622 million, assuming a normal investment rate.
'Purely a political choice'
Ystmark points out that the traffic light formula is only a guide, and the government doesn’t have to impose a cut on a red light area.
The responsibility for the loss of thousands of jobs, the loss of billions in value creation and hundreds of millions of kroner in tax revenue to coastal municipalities and the state rests with the government.
“There is nothing in the regulations that states that red light speed reductions must be implemented. It is a purely political choice with major socio-economic consequences, which this report clearly shows.
“The responsibility for the loss of thousands of jobs, the loss of billions in value creation and hundreds of millions of kroner in tax revenue to coastal municipalities and the state therefore rests with the government, if they choose further cuts.”
'An incomprehensible decision'
Lawyer Mons Alfred Paulsen, who has previously represented PO3 and PO4 salmon farmers in court appeals against traffic light reductions, said: “It is a completely incomprehensible decision to pull down in PO3, even if they think the light is red, given that ‘everyone’ believes that the traffic light system is not working as intended.”
He described the reduction as a “Helge Ingstad moment”, a reference to a disatrous navigational decision that led to a Norwegian warship crashing into a tanker and later sinking, despite those on the bridge being told about the tanker’s movements.
“The government knows where they are, they know that if they continue it is the wrong path and yet … yet they put the brakes on [farming in PO3]. Absolutely incredibly irresponsible,” he told Fish Farming Expert’s Norwegian sister site, Kyst.no.
'They have a choice'
Paulsen believes that the government cannot absolve itself of responsibility by pointing out that the current traffic light system still applies until a new regulatory regime is in place.
“The fact that they hide behind the fact that they must follow the current regulations until we have a new regulatory regime is just as weak an exoneration of responsibility as the doctrine that they were ‘just following orders’. They have a choice. They can refrain from cutting back. They know it is the only right thing to do. But they cut back anyway.”
Closed cage option
Fisheries and oceans minister Marianne Sivertsen Næss said: “We continue to facilitate growth in areas where the impact of sea lice on wild salmon is acceptable. This also means that production capacity is kept unchanged in areas where the impact is moderate, and that we reduce production capacity where the impact is unacceptable.”
She pointed out that the government has adopted a scheme that means that reduced capacity can still be used in floating closed cages.
