By the busy harbour at Eyemouth, almost within touching distance of the boats, there is a fish merchant, a good one, with a slogan. "If it swims," says the proud sign at the door, "we sell it."

Almost true. The range is certainly wide, and the fish couldn't be fresher, but the idea that the bounties of Britain's seas are still there for the taking is as dead as the cod, haddock and whiting fishermen are being obliged, daily, to discard. In obedience to European scientific advice and strict quotas designed to conserve stocks, thousands of tonnes of good, healthy, valuable fish are being dumped. This is, of course, insane.

What puts the practice beyond the edge of reason is that no-one says otherwise. As their way of life disappears, fishermen are being forced to throw money away. The EU, having cut the cod quota for 2007 by between 14% and 20%, meanwhile admits that between 40% and 60% of all the fish being caught by trawlers is dumped.

Environmentalists certainly do not approve. Like Greenpeace, they may be campaigning to have 40% of the world's fisheries shut down for the sake of future generations, but they know the difference between wanton destruction and conservation. They also take note of a second detail. As Jonathan Shaw, Fisheries Minister, conceded to the BBC yesterday, current practice is simply "immoral".

What else could he have said? Wrong, mad, criminally wasteful and a needless surcharge on the price paid by consumers: as indictments of well-meaning policies go, that takes some surpassing. Dumped fish are not conserved. They do not breed and multiply. They do not feed anyone. Treated as mere industrial effluent, they do not help men plying a dangerous trade to live with quotas.

And what of those, in any case? Joe Borg, the EU's fisheries commissioner, is another who fails signally to defend or explain dumping. He will be instrumental, next month, in setting the limits on next year's catches. But if cod stocks are reviving - hugely, say fishermen; slightly, say scientists - how can a quota be calculated when so many of the already available fish are being treated as superfluous?

This doesn't seem too complicated, even to the layman. Are estimates of species viability for the North Sea to be made on the basis of sustainable quotas plus dumping, or on the basis of agreed target quotas alone? Either way, the blindingly obvious remains: the fish are still being caught.

They are being caught but not, one presumes, landed. They are not being landed, not being sold, not being allowed to affect the price in the shops and not being permitted to put money in the pockets of fishermen. The EU quotas limit what can be landed - this may be revealing, I think - but take no account of what is actually caught.

The rule is comprehensible, as far as it goes. How could you possibly police all catches in a mixed fishery such as the North Sea? How can a fisherman who has exhausted his cod quota avoid hauling in forbidden fish when he is after prawns, for which there is no quota? Environmentalists talk of "selective gear", but generally answer the technical objections of fishermen with the usual calls for more marine reserves.

Those may be necessary soon enough. Cod stocks have collapsed utterly before now on the other side of the Atlantic, thanks entirely to overfishing. But if stocks in the North Sea are recovering, to whatever degree, and if there is in any case a grotesque amount of waste, how are quotas - or bans - to be assessed? Dumping, as always, distorts everything.

It certainly plays hell with politics. Yesterday Mr Shaw appeared to say that the immoral business of "discards" somehow assists the argument for increased quotas. If he had merely said that the wastage rate points to room for a certain flexibility, he might have had a case. But since the government is certainly not demanding an end to quotas, you are left with another simple question. How would an increased allowance end dumping? The environmentalist answer - don't fish - is equally unhelpful. It presumes that current fishing in the North Sea is unsustainable. Perhaps it is. But there is a huge tonnage of discards, by the EU's own admission, to suggest two things. The fish have not disappeared. Can anyone prove they are about to disappear, with stocks increasing? Secondly, existing restrictions have created an absurdity. What would prevent a wholesale ban in one area from shifting the problems - and the absurdities - elsewhere?

For some, all of this will merely prove that crackpot "Europe" is at it again. As always, Europhobes will miss the point. Even if Britain had the will to "reclaim" its fisheries, that would not guarantee the health of the North Sea. The only sure way to prevent overfishing is to limit fishing. Arguments over fair shares aside, it hardly matters to a Scottish skipper whether the limits are set in London or "Brussels". The problem lies in the application, or misapplication, of a principle.

Mr Borg and his colleagues will have to deal with that, preferably sooner rather than later. Dumping makes a mockery of quotas, the bedrock of fisheries policy. Forget the environment, for a moment: we are throwing jobs overboard. Potential livelihoods are being discarded with thousands of tonnes of fish. Yet conservation, equally, becomes a farce in the process. If quotas are a joke, how is sustainable fishing to be achieved?

Clearly, the problem lies in the distinction being made between catching and landing: easy to state, harder to fix. There is a further problem, however, to do with the failure to reconcile the interested parties. Is it actually impossible to fit the anecdotal evidence of fishermen around the science, and vice versa? After all, when it comes to what can be fished sensibly and safely one party, clearly, is mistaken.

Equally, is it beyond politicians to construe their national interests in terms of people rather than horse trading, in terms of a shared environment rather than narrow advantage? Quotas have one striking feature: they leave everyone - scientists, fishermen and environmentalists - dissatisfied. That's a poor recommendation. When the system also appears to be designed to insult the public, something is very wrong.

Good, fresh fish can be had at Eyemouth at a better price than you will find in any supermarket. That doesn't make it cheap, necessarily. Some species already count as luxury foodstuffs. Pessimists will tell you that cod, that former staple, will soon occupy the same rare category. From a green point of view this might seem both inevitable and necessary. But fish discarded and dumped, fish that never make it to the quay, distort markets and rational arguments alike.

We worry about preserving species yet throw away the things we mean to preserve. We worry, or say we worry, about the future of an industry yet subject it to rules verging on the lunatic. We worry over co-operation between nations yet co-operate in practices that are as stupid as they are disgusting. There may be more than one species, I think, with its viability at stake. Our quota of renewable idiocy appears to be generous indeed.