Observations on the Future of Aquaculture...Observations on the Future of Aquaculture Gunnar Knapp...

Observations on the Future of Aquaculture

Gunnar KnappDirector and Professor of Economics

Institute of Social and Economic ResearchUniversity of Alaska [email protected]

BC Seafood Expo and WorkshopsIndustry Workshop Series

Courtenay, British Columbia

June 14, 2015

• Born in and grew up near Washington, DC

• PhD in Economics from Yale University, 1981

• Moved to Alaska in 1981 to work at University of Alaska Anchorage

Institute of Social and Economic Research (ISER)

• Most of my career spent studying:

– Markets for salmon and other species

– Alaska fisheries management

– Alaska and world seafood industry

– Alaska economy

• Director of Institute of Social and Economic Research since 2013

Briefly about myself

Why Aquaculture? The big picture

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast

World Population Growth

> 7 Billion 9 Billion in 2050


Need for More Seafood

• Worldwide, consumption of fish has doubled since 1973

• One in five people depend on fish for their primary source of protein … especially in developing worlds.

• Global seafood demand rising 7-9% per year

• There will be a demand for an additional 40 million tonnes of seafood by 2030.


.

70% of world’s surface is ocean

Less than 4% of food production

comes from oceans


Aquaculture is critical to future fish

supply


• 50% of the seafood sold in Canada and worldwide is now

farmed. By 2030, 62% of all seafood will be farmed.

• Aquaculture will be essential to global food security

• With this strong demand for seafood growing annually,

will Canada meet the future demand with imports - or will

Canada reassert its leadership and grow?

That is the choice we as a country face

The Critical Choice for Canada


Canadian Aquaculture Industry TodayOccurs in every province

$3.1 Billion

1/3 value of Fisheries production

14,500 employed


Aquaculture production

has stagnated over the

past 12 years

Context: 12 years of stagnated growth


Context: Falling behind key competitors

Canada has

experienced

a 47% loss

in global

market share

since 2002


It just makes sense to continue

developing aquaculture in Canada,

and to keep doing it better and more

efficiently – to ensure a

sustainable seafood supply for

generations to come.- Dr. Patrick Moore


WHAT DRIVES

AQUACULTURE

GROWTH?

For the past two decades,

all of the growth in world fish production has come from aquaculture

Million tonnes

Source: Figure prepared by Dr. Frank Asche, University of Stavanger, Norway

World aquaculture production has risen extremely rapidly!

What will drive whether this growth continues?

Million tonnes


DemandSupply

Economists

ECONOMICS

Both production and prices depends on

both supply and demand.

Production and prices

have to be at levels at which

SUPPLY = DEMAND

buyers are willing to buy the volumes

producers are willing to sell

buyers are willing to pay the prices

producers are willing to sell for

Two ways of thinking about supply and demand

Volume for

a given price

Price for

a given volume

Supply

The volumes

producers will produce

at different prices

The prices

producers need

for different volumes

Demand

The volumes

consumers will buy

at difference prices

The prices

consumers will pay

for different volumes

Growth in aquaculture production depends on growth

in both demand and supply

• If demand doesn’t grow:

– Increasing production will lower prices until producers are

unwilling to produce any more

• If supply doesn’t grow:

– Increasing demand will raise prices until consumers are unwilling

to buy any more

Systematic innovation has been a critical driving factor

in the growth of aquaculture

• Ability to control production enables R&D and innovation in aquaculture

– This is a fundamental and critical difference between aquaculture and wild fisheries!

• Innovation occurs throughout the aquaculture value chain:

– Production

– Products

– Supply chain systems

• Innovation leads to:

– Supply growth, by lowering costs

– Demand growth, by creating new kinds of products

There has been tremendous growth in farmed salmon production and consumption.

This growth was driven by growth in both supply and demand

Drivers of the global farmed salmon industry

• Growth in SUPPLY

– More countries

– Lower costs

• Innovation

• Economies of scale

• Growth in DEMAND

– More countries

– More product forms

– More retail and food service outlets

– More kinds of consumers

21

Automated feeding systems are one of numerous technological

advances in salmon farming that have lowered costs.

Technological advances and economies of scale dramatically reduced

the cost of salmon farming over the past 20 years.

Norwegian Salmon Farming Cost of Production

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.01

98

6

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

NO

K/k

g

Tremendous growth in world salmon suppply was enabled by

equally tremendous growth in demand.

Norwegian salmon export price and production 1985-2011


Mechanisms of expanding demand

• Growing populations

• Growing incomes

• Development of new geographic markets

– USA, eastern Europe, China, Latin American

• Placement of products in new types of stores

– Supermarkets

• Development of new products for more market segments

– Skinless-boneless fillets

– Meals

Projections of future population and income growth

-

1

2

3

4

5

6

7

8

9

1980 1990 2000 2010 2020 2030

Bil

lio

n

Population growth

World

Africa

Asia

Europe

L.A. & C.

N. America

Oceania

0.0

2.0

4.0

6.0

8.0

Africa Asia Europe L.A. & C. N. America Oceania World

%

Growth of GDP per capita: 2010-2020

Fish Demand (mt)2007

(baseline)2030

(projection)

Africa 9.0 18.7

Asia 86.4 186.3

Europe 19.4 23.4

L.A. & C. 15.2 18.3

Northern A. 9.1 12.9

Oceania 1.1 1.8

World 140.3 261.2

Source: Estimation of FI Department

Source: Rohana Subasinghe (FAO), The Future of Global Seafood: Supply, Demand and Prospects, presentation at

Bay of Fundy Seafood Week-The Seafood Forum, St. Andrews, New Brunswick, Canada, June 4, 2014.

Source: ABG Sundal Collier, June 2012, as used in a presentation by Aquachile 27

Development of new geographic markets . . .

Diversification of Norwegian salmon markets

28

29

Diversification of Chilean salmon markets

Farmed salmon in Poland

Salmon

fillet

Farmed salmon in Dubai

31

New product forms . . .

United States Farmed Salmon Imports

0

50,000

100,000

150,000

200,000

250,0001989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

10

00

me

tric

to

ns

Fillets,Steaks orPortions

Other (mostlyhead-offgutted)

Salmon farmers have driven continuous innovation of farmed salmon

products—from whole fish to fillets to packaged value-added products.

Use of salmon as an ingredient in other products offers tremendous

opportunity for demand growth which is inelastic (non-price sensitive).

34

A critical challenge for aquaculture

-- for the global industry

-- for any given species

-- for any given region

-- for any given company

How to grow markets so that

production can increase without lowering prices?

Marketing is critical for successful aquaculture growth.

-- Understanding what markets want

-- Producing what markets need

It’s not just about growing fish.

It’s about:

Product forms, packaging, consistency, quality, safety, sustainability,

traceability, reliability . . .

IS

AQUACULTURE

BAD FOR WILD

FISHERIES?

Is aquaculture bad for wild fisheries?

Not necessarily.

Aquaculture competes with wild fisheries.

But competition can be good for

both producers and consumers.

The effects of salmon farming on the Alaska wild salmon

industry illustrates how over time aquaculture can benefit

wild fisheries.

Alaska is the world’s largest producer of wild salmon.

World Salmon Supply: Wild and Farmed

0

500

1,000

1,500

2,000

2,500

3,000

3,5001980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

tho

usa

nd

me

tric

to

ns

Farmedtrout

Farmedsalmon

Otherwildsalmon

Alaskasalmon

Sources: Alaska data from Alaska

Commercial Fisheries Entry Commission and

Alaska Department of Fish and Game; other

data from National Marine Fisheries Service

and FAO FishStatJ database. Farmed trout

includes rainbow trout farmed in saltwater.

How has salmon farming affected the Alaska wild salmon industry?

POPULAR / GREEN / ALASKAN PERSPECTIVE:

Unfairly subsidized and inferior farmed salmon harmed the

environment and wild stocks in producing nations, and flooded world

markets, depressing wild salmon prices and harming Alaska

fishermen and fishing communities. Prices have recovered.

as consumers recognize the superiority of wild salmon.

How has salmon farming affected the Alaska wild salmon industry?

AN ECONOMIC PERSPECTIVE:

Salmon farming exposed a “natural” monopoly to competition, benefiting

consumers by expanding availability, lowering prices, spurring innovation and

product and market development. Over time, competition had led to a more

efficient wild salmon industry more focused on meeting market demands, providing

better products to broader markets, and benefitting from rising demand and prices.

42

Ex-vessel prices for Alaska salmon fell drastically in 1990s

but have rebounded dramatically since 2002

Before salmon farming,

Alaska wild salmon enjoyed a natural monopoly.

• Prices were high

• Costs were high

• Relatively little effort was devoted to:

– Quality enhancement

– Marketing

– Innovation

High costs

Photographs by Bart Eaton

Lack of focus on quality

Bruises in a Yukon River chum salmon fillet

Bruising as fish are caught in and

removed from gillnets

Fishermen focused on catching fish

fast rather than handling them well

Lack of focus on quality

What happens when a monopoly faces competition?

• Initially:

– prices fall as the competitor lowers prices and production

expands

– The monopolist’s profits fall

– The monopolist may become unprofitable

• Over time, in order to survive, the monopolist changes:

– Lowers costs

– Improves quality

– Becomes more market focused

– Innovates

• Consumers benefit

• Demand expands as the product improves

• Prices may recover partially or fully

Mid-1980s:

High farmed production

costs

Low farmed production

High wild prices

Profitable wild salmon

industry despite high cots


0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

NO

K/k

g

World Salmon Supply, 1980-2008

0

500

1,000

1,500

2,000

2,500

3,000

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

thousand m

etr

ic tons

Farmedsalmon

Wildsalmon

Sources: Alaska Commercial Fisheries Entry

Commission; Alaska Department of Fish and

Game; National Marine Fisheries Service.

Farmed salmon includes trout farmed in salt

water.

Indexes of Real Alaska Salmon Ex-Vessel Prices, 1980-2010

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Source: ADFG. Note: 1988 price indexes peaked well above 200%

for most species.

Real price a

s %

of

1980-2

010 a

vera

ge

Chinook

Coho

Sockeye

Pink

Chum

World

supply

Farmed

production

costs

Alaska

prices

2002

Low farmed production costs

High production

Low wild prices

Unprofitable wild salmon

industry because of high costs


0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

NO

K/k

g


0

500

1,000

1,500

2,000

2,500

3,000

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

thousand m

etr

ic tons

Farmedsalmon

Wildsalmon





water.


0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010


for most species.

Real price a

s %

of

1980-2

010 a

vera

ge

Chinook

Coho

Sockeye

Pink

Chum

World

supply

Farmed

production

costs

Alaska

prices

(It wasn’t just salmon farming . . .

Many other factors were also affecting wild salmon markets . . .)

• Large Alaska wild salmon harvests

• Increased exports of Russian wild salmon

• Stagnation of Japanese seafood demand

• Increasing consolidation and market power in the retail and food

service industries

• Changing international standards for food handling and safety

• Shift in labor-intensive seafood processing to countries with low labor

costs

As economic conditions worsened, people wondered

whether Alaska’s salmon fishery would survive.

As profitability declined, eventually fishery participation

fell dramatically in many fisheries.

Share of Permits Fished, Selected Alaska Salmon Fisheries

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

CFEC Basic Information Tables

2010 $

BristolBay DriftGillnet

SoutheastPurseSeine

With lower participation, average catches increased for the remaining

fishermen.

Average Catch as Share of Total Catch: Southeast Purse Seine

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

CFEC Basic Information Tables

2010 $

Beginning in the 1990s, there were significant efforts to increase quality, such

as the use of refrigeration on fishing boats to keep fish chilled

Share of Bristol Bay Drift Gillnet Boats with Refrigeration Capacity

0%

20%

40%

60%

80%

100%

1983 1988 1993 1998 2003 2008

Source: Northern Economics,

The Importance of the Bristol

Bay Salmon Fisheries to the

Region and its Residents ,

Report prepared for the Bristol

Bay Economic Development

Corporation, 2009

The Alaska salmon industry followed the lead of salmon farmers in

developing new salmon products.

Farmed

Atlantic

fillets

Wild

sockeye

fillet

Alaska frozen sockeye producers greatly diversified away from their previously

near-total dependence on the Japanese market

Estimated End-Markets for Alaska Frozen Sockeye Salmon (%)

0%

20%

40%

60%

80%

100%

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

USA

Other export

China

EuropeanUnion

Japan

Note: USA

estimated as

Alaska

production

minus exports.

The share of sockeye salmon sold fresh expanded (but remains

relatively small due to transportation constraints

Alaska Sockeye Salmon Production

0.0

50.0

100.0

150.0

200.0

250.0

300.01984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

ADFG COAR database

mill

ions o

f pounds

Frozen

Canned

Fresh

The industry engaged in extensive marketing to differentiate wild

Alaska salmon from farmed salmon.

High-quality wild salmon such as troll-caught chinook now command a

price premium over farmed salmon.

U.S. Wholesale Prices for Selected Wild and Farmed Salmon Products

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

Jan-9

1

Jan-9

2

Jan-9

3

Jan-9

4

Jan-9

5

Jan-9

6

Jan-9

7

Jan-9

8

Jan-9

9

Jan-0

0

Jan-0

1

Jan-0

2

Jan-0

3

Jan-0

4

Jan-0

5

Jan-0

6

Jan-0

7

Jan-0

8

Jan-0

9

Jan-1

0

Source: Urner Barry Publications, Inc., Seafood Price Current. Prices are low list prices for Chilean 2-3 lb fillets, FOB Miami; 6-8 lb

Atlantics, FOB Northeast; and 7-11 lb and 11-18 lb troll-caught head-on chinook salmon.

$/l

b

Fresh troll-caught chinook, 7-11 lbs Fresh troll-caught chinook, 11-18 lbs Fresh Atlantic, pinbone-out fillets

Frozen Chum, semi-brite Fresh Atlantic, whole fish

Changes over the time in the wholesale price premium of selected wild

salmon products over farmed Atlantic salmon products in the US market

2011

Low farmed production costs

High farmed and total production

Greatly expanded total demand

Differentiated market for wild

salmon

Significant recovery in wild prices


0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

NO

K/k

g


0

500

1,000

1,500

2,000

2,500

3,000

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

thousand m

etr

ic tons

Farmedsalmon

Wildsalmon





water.


0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010


for most species.

Real price a

s %

of

1980-2

010 a

vera

ge

Chinook

Coho

Sockeye

Pink

Chum

World

supply

Farmed

production

costs

Alaska

prices

• Initial effects

– Farmed salmon competed directly with wild salmon in major

traditional markets

– Total supply expanded faster than demand

– Prices fell:

• Reducing profits for both harvesters and processors

• Creating severe economic and social pressures

• Economic pressures led to changes in the wild industry

– Consolidation in harvesting and processing

– Product diversification

– Market diversification

– Expanded marketing

Implications of salmon farming for the Alaska wild salmon Industry . . .


• Over the longer term, salmon farmers developed new markets,

greatly expanding world demand

– New product forms

– New kinds of retail outlets

– New countries

• Expanding world demand increased prices for both farmed and wild

salmon

• Differentiated demand expanded for selected wild salmon products,

increasing their price premium (or reducing their price discount)

relative to farmed salmon products

• Long run effects of salmon farming:

– More efficient wild fishery producing better products

– Prices approaching pre-farming levels

• Change has been rapid, continuous, far-reaching

– Were not well predicted in advance

• Changes can not be understood solely by looking at harvesting

– Occurred throughout the entire distribution/value chain

– Many different types of changes and adjustment:

• Markets

• Products

• Marketing

• Fisheries management

• Industry structure


THE POLITICAL

ECONOMICS

OF MARINE

AQUACULTURE

Global aquaculture production is growing rapidly.

2011: 62.7 million MT



Source: Aquaculture Canada 2014 conference keynote presentation by

Rohana Subasinghe of FAO

Source: Aquaculture Canada 2014 conference keynote presentation by

Rohana Subasinghe of FAO

Aquaculture now accounts for half of global food fish consumption.

The United States and Canada have many

potential economic advantages for marine aquaculture:

• Very long coastline

• Clean water

• Favorable potential farming sites

• Skilled labor force

• High level of technology

• High level of infrastructure

• Stable legal and economic system

• Large and growing seafood markets

• Very competitive in animal farming

But United States and Canadian aquaculture production

is relatively small and not growing.

Why?

Political barriers have been a major factor slowing development

of US and Canadian marine aquaculture.

Political barriers: government actions (or lack of actions) which impose

unnecessary costs or reduce potential net benefits to society

when this

would

suffice

Doing

this

. . . Our industry operates under

a “vast, complicated and

fragment structure of rules” that .

. . impose unnecessary costs

and uncertainty that has killed

growth, jobs and investment in

the industry for the past decade

[and] creates undue financial

risks for the aquaculture industry

and investors because of costly

red tape and lack of foresight.

Political barriers to Canadian aquaculture . . .

1. Complex regulatory system which imposed undue costs and delays that restricted growth and investment in Canada

2. Federal & provincial overlap and duplication

3. Patchwork quilt of statutes created decades ago to guide a wild fishery

Historic Challenges to Growth in Canada


Political barriers to US marine aquaculture . . .

• Regulatory complexity, inconsistency and delays

– Dozens of approvals at federal, state, and local levels create a

complex, time consuming, costly, and uncertain permitting

process

• No aquaculture leasing system in U.S. federal waters

• Alaska finfish farming ban

What explains political barriers to

marine aquaculture in the US and Canada?

We need to think about the

political economics of marine aquaculture

Politics Economics

Aquaculture

Government policies affect aquaculture in numerous ways.

Policies Key issues affecting aquaculture

Rights Can farmers get sites

where they have the

right to farm?

Is there a process for acquiring sites?

How predictable is the process?

How long does it take?

What does it cost?

How legally secure are sites?

How flexible are permitted uses of sites?

Can sites be transferred?

Regulations How are farmers

regulated?

How stable and predictable are the regulations?

How costly are the regulations?

How effectively do regulations protect the

environment?

Other Taxes & subsidies

Trade policies

Research & education

Infrastructure

Marketing

What costs do policies impose on farmers?

What benefits do policies provide to farmers?

Marine aquaculture can’t happen without government action.

• Marine waters are public

• Marine aquaculture can’t happen unless:

– Government allows it

– Government provides a way for farmers to get lease rights

Government actions directly and significantly

affect the costs and economic viability of aquaculture.

• Marine aquaculture can’t happen if:

– The costs of getting leases is too high

– Regulations add too much to costs

– The “political risk” is too high that regulatory policies will change

Government policies matter for aquaculture—critically!

Policies at multiple levels and branches of government affect aquaculture.

LEVELS

Federal

State/Provincial

Local

BRANCHES

Constitution

Courts

Legislative

Executive/Agencies

Unfavorable rights or regulatory policies at any level or branch of

government can constrain or stop aquaculture.

SCIENCE

POLITICS

Sites

Regulations

Aquaculture

production & prices

Political

opposition

Perceived

Negative Impacts

Environmental

Competition

Other

Political strength

and commitment of

groups perceiving

negative effects

Actual economic,

environmental and other

effects

Political

support

Political strength

and commitment of

groups perceiving

positive effects

Perceived

Positive Impacts

Economic

ECONOMICS

Government policies are driven mostly by politics

Government policies towards aquaculture vary widely between

countries and regions.

• Many countries actively encourage aquaculture

– Clear process for leasing sites

– Clear and consistent regulations

– Support for infrastructure and research

• US and Canadian policies have been ambivalent or negative

– Particularly towards marine finfish aquaculture

Why? A number of different factors have combined to generate relatively

strong and effective political opposition and relatively weaker and less

effective political support.

There are real public concerns about potential impacts

of marine aquaculture.

Potential impacts Groups potentially impacted

Competition with wild fisheries

(effects on markets and prices)

Fishermen

Impacts on wild fish stocks

(disease, escapes)

Fishermen

Other environmental impacts

(pollution, habitat)

Other marine resource users

Visual impacts Coastal landowners and residents

Tourism businesses

Marine traffic Recreational boaters

Commercial transportation

Real concerns in part reflect real historical problems

• Inadequate past regulation

– Improper siting

– Disease

– Escapes

– Excessive use of antibiotics

• Better regulation and improved technology may have greatly

reduced the problems, but the perceptions remain

• A bad start can hamper the industry for a long time, regardless of

– where it happened

– who was at fault

– how the industry has changed

Other factors magnify the political impacts of real concerns

• Marine aquaculture is new and small

• Existing regulatory structures don’t work for aquaculture

• Politics is not a fair fight

Marine aquaculture is new and small . . .

• Marine fish and water have traditionally been public resources

• Aquaculture requires creation of private lease rights

• Many people believe fish and water should not be privately owned.

• Legally and politically difficult to create private rights.

Alaska Constitution:

”. . . in their natural state, fish, wildlife and waters

are reserved to the people for common use."

The fact that marine aquaculture is new and small means that the

public constituency for active support of aquaculture is initially small.

• People don’t think marine aquaculture is “necessary.”

• Few people depend on aquaculture

• Benefits are difficult to prove.

• Risks are easy to exaggerate.

• Few opportunities to learn from experience

• No economies of scale.

Land farming vs. sea farming

Traditional

ACCEPTED

New

NOT ACCEPTED

Impacts on environment and habitat for wild species

Without an established constituency,

aquaculture faces different standards for risk and impacts.

Alaska Salmon Policy

Salmon

Fishing

Salmon

Ranching

Salmon

Farming

Potential economic benefit? Yes Yes Yes

Potential environmental risk? Yes Yes Yes

Established constituency? Yes Yes No

Toleration for environmental risk? Yes Yes No

Toleration for economic impacts? Yes Yes No

Willingness to research? Yes Yes No

Willingness to experiment? Yes Yes No

Existing regulatory agency structures are poorly suited for aquaculture

and sometimes biased against aquaculture.

• Authority is divided between many agencies

• Regulatory agencies may have:

– Other priorities

– Constituents opposed to aquaculture

– Staff who oppose aquaculture

– Little understanding of aquaculture

• It is easiest do to nothing

– If agencies do nothing marine aquaculture cannot happen

. . . Responsibility to foster the

sector’s success is divided

between federal and provincial

authorities, governed by a

patchwork quilt of statutes

created decades ago to guide a

wild fishery.

Existing regulatory agency structures are poorly suited for aquaculture

and sometimes biased against aquaculture . . .

Source: UJNR aquaculture symposium presentation by Jeff Silverstein

Politics is not a fair fight

Advertisement in the New York Times, October 31, 2003

paid for by the Coastal Alliance for Aquaculture Reform.

Marine aquaculture is a convenient target for

professional opponents of resource development

Politics is not constrained by truth

Politics is about emotions

Sign on a car window in Alaska

Concerns with some forms of marine aquaculture

are attributed to all aquaculture

Alaska

bumper

sticker

T-shirt by Alaska

artist Ray Troll

Press coverage of marine aquaculture is neither careful nor objective.

• Economic and environmental biases

• NGO’s have strong influence on the press

• “Negative” stories are easier to write and sell

• The truth about aquaculture is complicated

The public and policy makers are increasingly risk averse and

ambivalent about the benefits of economic development

How can the US and Canadian aquaculture industries

overcome political barriers to marine aquaculture?

• Understand the political challenges

• Address real concerns

• Work together

• Communicate effectively

• Emphasize the positives

• Advocate for regulatory change

• Be patient

Understand the political challenges

• Government policies matter for aquaculture—critically!

– Marine aquaculture can’t happen without government action

– Government actions directly and significantly affect the costs and

economic viability of aquaculture.

• Government policies are driven by politics—not science

• There are real public concerns about potential impacts of marine

aquaculture

• Other factors magnify the political impacts of real concerns

– Marine aquaculture is new and small

– Existing regulatory structures don’t work for aquaculture

– Politics is not a fair fight

Address real concerns

• Escapes

• Disease

• Pollution

• Visual impacts

Work together

• Build cooperation

– across the aquaculture industry

– with the broader seafood industry

– among industry, scientists and government

• Support your industry organizations

• Engage stakeholders

Emphasize the positives . . .

• “Fish farming isn’t bad” can’t win

• Only “fish farming is good” can win

– A great product: taste, convenience, price

– Good for your health

– Good for your environment

– Good for your economy

• Year-round jobs and income for coastal communities

• Source of tax revenue

• Synergies with other industries

– Fishing

– Fish processing

– Other marine industries

The Marine Harvest

Salmon Industry

Handbook lays out key

positive arguments for

farmed salmon.

102

Feed

conversion

ratios

Communicate effectively

• Know your audience and their concerns

• Know your message

• Cultivate the press

• Be honest, open, polite . . . and forceful

• Respond immediately and forcefully to inaccuracies

• Understand and use social media

Advocate for regulatory change

• Consolidate agency responsibility over aquaculture

• Create agency mandates for promotion of responsible aquaculture

development

• Remove marine aquaculture jurisdiction from fisheries agencies

A New Vision for Growth:

CAIA’s National Strategy

A new vision and concrete actions to implement reforms in legislation, regulations, policy and programs that will deliver greater economic growth while meeting robust environmental sustainability principles:

1. Develop a coherent legal framework -- a new Aquaculture Act for Canada

2. Regulatory reforms, with emphasis on reducing red tape and delays

3. Policy and program reforms


Be patient. The social license debate is changing.

Consumers are getting used to aquaculture.

• Farmed fish are everywhere

• Farmed salmon are everywhere

• Consumers like farmed salmon

• Buyers want farmed salmon

108

The social license debate is changing . . .

Wild salmon is joining the salmon industry

• Major wild salmon processors also sell farmed salmon

• Major wild salmon processors are farming salmon

– In Chile

– In the United States

• Wild salmon has nothing to gain from bashing farmed salmon

• The single message that matters most to both wild and farmed

salmon is “eat salmon”

• The wild salmon industry has benefitted tremendously from

innovation and demand growth driven by salmon farmers

109

The social license debate is changing . . .

• NGOs are shifting alliances and battles

• Farmed salmon is becoming

– A positive environmental story

– A positive health story

– A positive taste story

110

September 24, 2013

Be patient. The social license debate is changing.

ESCAPEES — There are a lot fewer of them, and concern about

Atlantic salmon in non-native waters, particularly, has decreased. “It’s

really quite clear that Atlantic salmon are bad at colonizing outside their

natural range.”

FEED CONVERSION — The content of the feed has changed as well. .

. Twenty-five years ago, fish meal made up 50 percent of feed. Now,

it’s 15 percent or even less

CONTAMINANTS — Recent research weighing the contaminant risk

against health benefits from omega-3s concluded that every serving of

salmon, wild or farmed, is a net positive.

September 24, 2013

September 24, 2013

“The judgments were definitive, and surprising.

Farmed salmon beat wild salmon, hands down.”

Conclusions

• Political barriers are a major factor slowing development of US and

Canadian marine aquaculture

• Moving US and Canadian marine aquaculture forward requires

understanding addressing political barriers.

• The political barriers for US and Canadian marine aquaculture may

more important than the technical challenges.

KILL THAT

MYTH

We are frustrated by myths

• Sea lice

• Escapes

• View shed

• Not “natural”

• Running out of feed

• Feeding fish to fish

• Competition for wild fisheries

• Corporate!

• Foreign!

• Profit-seeking!

116

Myths have real consequences

• Regulatory indifference & hostility

• Lack of sites

• Political and economic risk

• Lack of growth

• Lack of economies of scale

• Higher costs

• Slower technological chain

• Loss of market share

117

How can we “kill that myth”?

• Don’t try to refute the myth

• Ask questions to get people to think about whether the myths are

really true

Kill that myth.

Questions to ask aquaculture critics . . .

WHAT IS YOUR EVIDENCE?

• Who said so?

• What are their credentials?

• Who funded the evidence?

• Is the evidence up-to-date?

• Is the evidence consistent with the best available science?

Kill that myth.

Questions to ask aquaculture critics . . .

ARE YOU MAKING THE RIGHT COMPARISIONS?

• What will consumers eat if they don’t eat farmed fish?

– What are the relative health consequences?

– What are the relative environmental consequences of producing it?

– What are the relative costs for consumers?

• Will the fish be farmed somewhere else if it’s not farmed here?

– What are the relative environmental consequences?

– What are the relative economic consequences?

• If the feed isn’t used for fish, how will it be used?

– What will it feed instead?

– What is the relative feed conversion efficiency?

Observations on the Future of Aquaculture...Observations on the Future of Aquaculture Gunnar Knapp...

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