Council under pressure after livestock co-op says it will have to cease trading
By JOHN ROBERTSON
The SIC is under pressure to reverse decisions made this week which may sink Shetland’s cash-strapped livestock marketing co-operative. The islands face being left with no marts for the public sale of sheep, no marketing organisation for lamb and the closure of the Laxfirth abattoir.
Despite warnings of the consequences, councillors refused to provide a £25,000 grant to the Shetland Livestock Marketing Group (SLMG) on Wednesday to allow it to pay for a rescue plan to be drawn up. Later in private they deferred a decision on possible emergency funding for the group for six weeks to get more information and conduct a study into the local agriculture industry.
Shetland MSP Tavish Scott condemned the council in an unusually scathing attack, saying he was “utterly taken aback” by its failure to support farmers and crofters. He was scornful of councillors’ holding up state aid rules as a reason for denying rescue cash, saying he was heartedly sick of such nonsense.
SLMG warned last month it would cease trading if the council did not change its mind about the business plan grant. The group was consulting its accountants yesterday to see whether it was in a position to continue but chairman Ronnie Eunson said its doors could close this week. Up to 25 people are employed, mainly in part-time and seasonal work.
He said: “Clearly things have gone pretty poorly for us. It is now a case of speaking to our auditors and reacting to the advice they give us and winding up the business affairs of SLMG. Without the money to run the business we can do nothing else other than close it.”
He said the co-op’s demise would be “a tragedy” and “a huge blow for the concept of folk working together in any co-operative manner”. He blamed “parties looking to make trouble” and said the use of the threat of state aid rules as an excuse for not helping the group was “reckless”.
“Clearly certain councillors will be rejoicing in the fact that the co-op has been forced into oblivion and presumably be quite comfortable in the knowledge that Shetland is the only county in Scotland with no access to a mart and co-op run abattoir.
“The belief that another co-op or business can be created or invented to fill the role that SLMG has been operating in is a misconception. Shetland is a small community and co-ops rely on the commitment, enthusiasm and voluntary work of individuals and after this decision where are we going to find them?”
If no livestock sales organisation emerges to take its place then crofters and farmers will have to sell their animals in private deals or ship them south unsold. Mr Eunson said there could also be an animal welfare crisis if there was no outlet for small lambs produced next year which would have been slaughtered by the co-op at Laxfirth.
The MSP gave both barrels to SLMG’s critics in the industry and within the council, condemning their deliberate undermining of the voluntary efforts of those involved with the co-op and branding Wednesday’s performance “a pretty dismal day” for the local industry.
During the council debate the most outspoken attack on SLMG came from councillor Allison Duncan who had opposed the group getting any money from the council to help it out. He said. “SLMG is a Mickey Mouse outfit. They are out for themselves and don’t give a damn for the benefit of Shetland agriculture.”
A second debate on SLMG’s problems was held in private despite an attempt by councillors Andrew Hughson and Gary Robinson to have it opened to the public. They lost out after head of economic development Neil Grant said he felt there was sensitive information in the report and SLMG itself did not want it divulged.
SLMG later said it had not asked for the aid of up to £100,000 which was being spoken about during the private session.
Away from the trading of insults, the reason councillors decided they were unable to give money to SLMG is confusion about what is permitted under newly revised EU state aid rules. Details of the difficulties facing the council were revealed in private but earlier there was some discussion in public about the relaxation of the rules to help governments cope with the credit crunch by assisting companies which have fallen into financial difficulties. But there are conflicting views as to whether or not SLMG was in trouble too early for the new form of aid to be permitted.
Mr Eunson maintains the group only got into difficulty at the “back end” of the year when bad debts took effect and should be eligible for help.
Yesterday SIC development chairman Josie Simpson said officials could not give members “a clear steer” as to whether or not assistance would be illegal. Responding to the MSP’s criticisms he suggested Mr Scott might want to apply pressure to government officials to get a conclusive verdict about what is acceptable under state aid rules.
Turning to the problems of Shetland losing its mart, Mr Scott said there must be immediate backing for the service because local crofters and farmers must have one to sell their stock. He said: “The mart is an essential part of the islands’ economy. If there is no mart then the only choices for crofters will be to ship livestock to Aberdeen or to sell the calves and lambs to private dealers. Shetland must have a mart to offer the producer another choice for selling.”
He said he was “very disturbed” that the council had put off its decision on emergency funds. “The mart is run by a co-operative. That is hard to do at the best of times. But when some parties choose deliberately to undermine those who, through their own voluntary effort, seek to make the marts a success for Shetland, that is a pretty dismal day for the local industry.
“I call on the elected members of the SIC to consider what is in the long-term interests of Shetland agriculture. That has to mean a Shetland mart. I am also heartedly sick of the nonsense talked about state aid rules suggesting that no SIC money can go into helping the marts business. What about the billions of taxpayers’ pounds that have bailed out British banks? Or the billions of euros that President Sarkozy has just invested in Renault and Citroen to save French car jobs? What is this money if not government help for businesses? The state aid rules are not the issue. This is a time for the council to support Shetland agriculture, and quickly.”
Before this week’s debate Mr Eunson sent a letter to councillors outlining his vision of reforming SLMG into a community co-op which would seek charitable status because the margins in the island sheep trade were so small now that neither a mart nor an abattoir could be run sustainably as private businesses.