Press Release
SALMON FARMERS WELCOME RENT REVIEW
13 October 2006
Scottish salmon farmers are to have their rents reduced by an average 8 per cent following a major review of fish farm rents.
An independent panel of experts commissioned by The Crown Estate has recommended a much simpler system for calculating salmon farm rents although the system is to remain based on the tonnage of fish harvested.
The changes mean that charges for salmon farms will be around 8 per cent lower than the past 5 year average. In addition, the process has been simplified which will save time and allow companies to budget more accurately.
Shellfish rents are set to remain unchanged until 2010 and whilst rents for commercial scale farming of cod, halibut and sea grown trout will rise, it will not be until at least 2009. When it embarked on the review The Crown Estate guaranteed there would be no rental increases applying to any sector for at least three years.
The rent review is available to be downloaded:
Announcing the new rental arrangements Crown Estate chairman, Ian Grant, said: “The current salmon rental formula has been in place for nearly 20 years during which period the industry has changed beyond recognition. A wholesale review was therefore timely. The expert panel was tasked with reviewing both the level of rent and the basis for calculation. They were also asked to propose a system which was simpler and more transparent. The new arrangements draw on the experience and expertise of the expert panel following extensive consultation with the industry.
“From 1 January 2007 salmon rent for mainland farmers will be a fixed rate of £17 per tonne for a 5 year period. Rents in the Outer Isles will be 10% lower at £15.30 per tonne to reflect higher operating costs. This reduction confirms our ongoing commitment to working with the industry.”
Jim Gallagher, who sat on the rent review working group, welcomed the new charging regime, which is due to take effect from 1 January 2007.
He said: “I am pleased that the recommendations of the expert panel have taken account of the industry representations and that The Crown Estate will implement these from 1 January 2007. The revised system clearly recognises the changed nature of the industry and will be much simpler for the industry to work with. The review also gives the industry the security of increased tenure allowing farmers to plan for the longer term and enabling investor confidence in the Scottish salmon industry. Finally, I would like to applaud The Crown Estate for initiating and implementing these changes in a timely manner and look forward to their support in the sustainable development of Scotland’s aquaculture industry.”
The Crown Estate owns the seabed out to the 12 nautical mile limit and charges fish and shellfish farmers who want to anchor their cages, long lines or other equipment in the UK’s coastal waters. The charges are similar to those a landowner would charge a farmer for the use of agricultural land.
All surplus money raised by The Crown Estate from its activities goes to the Government and helps to pay for public services.
The average annual rental income from Scottish salmon farms over the past five years has been £2.1 million. The Crown Estate has been re-investing around 10 per cent of its income from fish farm rentals in research and development projects supporting sustainable development of Scotland’s aquaculture industry. Over the last 3 years it has also invested another 10 per cent of income through a separate development fund to build investor and market confidence in the salmon sector.
The current fish farm rental system was introduced by the Valuation Office in 1987.
Members of the independent panel who carried out the review were David Windmill, formerly managing director of Marine Harvest; Stephen Pollock, head of valuation from chartered surveyors James Barr; and business analyst Alan Christie of Ernst and Young. The panel was initially announced on 8 December 2005 - please follow the link for more information.
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