SCOTLAND’s vital food and drink industry is set to have one fifth of its value written off this year – amid warnings the shutdown of the tourism sector is hampering businesses beginning to recover.
MSPs on Holyrood’s rural economy committee heard evidence from farming, fish, food and drink industry leaders – and were told of a “vast array of different challenges and issues” facing the sector.
James Withers, chief executive of Scotland Food and Drink, told the committee that the country’s farming, fishing, food and drink industry, worth £15 billion a year, “is set to lose £3 billion of the value of the sector in 2020”.
READ MORE: Scotland gets set to welcome tourists again
Mr Withers added that the “critical problem” has been the shutdown of the hospitality and tourism sector and that the £ billion estimate is at the “optimistic end of the spectrum”.
“The pace of recovery will be critical,” he added.
Elspeth Macdonald, chief executive officer for the Scottish Fishermen’s Federation, warned that “it’s been a very difficult few months” for the industry, which has been “fairly significantly hit by the Covid impact”.
She added: “Parts of the industry were hit pretty hard, particularly in the shellfish fleet.
“The market has been very volatile. While there still has been a market for white fish, it’s been very up and down, it’s been very unpredictable."
Ms Macdonald added that “the very high reliance the industry has on the hospitality sector”, particularly for the seafood market, has compounded any problems.
Julie Hesketh-Laird, chief executive officer for the Scottish Salmon Producers’ Organisation, pointed to a “lack of export opportunities”, but stressed that the UK retail sector has done “pretty well indeed” for salmon producers.
She added: “We have done well in the UK but roughly half of what we produce is for the UK.”
Jimmy Buchan, chief executive officer of the Scottish Seafood Association, said his industry “continues to be affected” by the Covid-19 crisis.
He added: “Until we see hospitality really moving in some sort of volume that’s going to continue.”
Mr Buchan highlighted “total confusion” from the Scottish Government where traders “weren’t given the correct guidance quickly enough”, adding that many businesses shut down anyway and didn’t know if they were classed as key workers.
But he said that the Scottish Government “moved very, very swiftly” to put financial support in place initially, adding that “there’s more that needs to be done” but the initial action “did save many businesses and certainly the jobs that go with them”.
He added: “We now need action.
“We are six months from Brexit happening. The one thing business does not like is uncertainty and that’s what we are sitting with.”
The National Farmers Union Scotland (NFUS) had warned in written evidence to MSPs that the “almost immediate cancellation of months’ worth of bookings” for agri-tourism businesses has had a huge impact on the sector.
READ MORE: Scottish farmers warn Brexit could 'compound' Covid-19 supply chain challenges
The NFUS has acknowledged that the sector will need to transform in the post-Covid climate and already, “lockdown and social distancing has forced many agriculture activities online”, such as farm shops and livestock auctions.
But the organisation added: “This sudden shift to online has only underlined the significant postcode lottery in broadband capability and speed across Scotland’s rural areas.“
Jonnie Hall, NFUS’s director of policy, told MSPs that Scotland’s farming industry has faced “a vast array of different challenges and issues” since the beginning of the coronavirus outbreak.
Mr Hall pointed to Scotland at one stage “facing the prospect of empty supermarket shelves for milk” while “at the same time, dairy farmers having to pour milk away”.
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