Aquaculture, Fisheries and the Environment Frank Asche NAAFE, 2011 The Economics of Conflict and Co-existence in an Increasingly Crowded Ocean"
We like to think of fishing as traditional and romantic,
..but there have always been conflicts
..even before the big guys showed up
and before one had to pay attention to these guys
and these guys
..and these
The world s oceans cover 2/3 of the planet
.. and is an under-utilized utilized resource But pressure is increasing 1. Because an increasing and wealthier global population requires more resources 2. Because more people and companies realize the opportunities in the ocean and innovate to exploit them The power block, Offshore drilling, Aquaculture, Tourism Globalization 3. The competition creates use conflicts, and these are exacerbated by groups of people who think we should not utilize the oceans harder
More people care!
Is the growth in aquaculture production good?
Different perspectives on ocean use Conflict arises because there is no general agreement about how the ocean s resources should be used and to whose benefit More specifically, these conflicts are manifested through competing user interests, including no (new) use i.e. conservationism
Kjell Bjordal s examples of different perspectives: Hilborn: Pauly: The state of the world s fish stocks is better than it has been for decades We do not know any fish species driven to extinction by human activity The situation in the Barent s Sea is better than for generations: International success story in fisheries management ->There is a tremendous potential for increased aquaculture production The world s fish stocks are overfished We started out by fishing out the large valuable species an will end up fishing jellyfish 80% of the Barent s Sea stocks have collapsed or a severely overfished In 2010 we drove 1000-2000 ocean species to extinction Trawling kills eco-systems and everything within them Aquaculture production should be significantly reduced
Different perspectives on ocean use There will always be a mechanism that balances the different interests Different outcomes are possible depending on mechanism design, incentives i and governance structure The tragedy of the commons Shrimp aquaculture and mangroves Economists can analyze the outcomes of different structures National measures International organizations
Small pelagics Are primarily reduced to fishmeal and oil, but are increasingly used for human consumption The majority of fishmeal and oil is now used in aquafeeds Should their use be governed by management system, economics, or some ethical principles giving a different outcome?
Global production by source for fishmeal
Total Norwegian landings and share used for reduction to fishmeal/oil
Norwegian landings and prices by use for spring spawning herring NOK/kg 4 3,5 3 2,5 2 15 1,5 1 0,5 Landings Price, meal Pririce, Human 1200 1000 800 600 400 200 1,0 000 tonnes 0 0 19891991199319951997199920012003200520072009
The fishmeal trap hypothesis (Wijkstrøm, Naylor et al) Growth in aquaculture production increase demand for forage fish to produce feed 1. This makes aquaculture inherently unsustainable and environmentally degrading Requires that forage fisheries are poorly managed, that forage fish has no substitutes, and that cost is not important for aquaculture production 2. This will eventually also put a limit on aquaculture production Requires that aquaculture feed must contain marine ingredients
Global aquaculture and fishmeal production
Growth in global aquaculture production does not lead to increased use of marine ingredients
Inclusion levels of fish meal and oil in salmon feed 35,0 Inclusion levels of marineingredients ingredients in Salmonid diets 30,0 25,0 % Dietary Inclusion n 20,0 15,0 10,0 Fishmeal % Fish OIl% 5,0 0,0 2000 2001 2002 2003 2004 2005 2006 2007 2008
The fishmeal trap is a good story, but does not hold up against the data
Innovation is driving the food market and enables us to feed more humans: The long run real price trends 60 50 Corn Wheat 40 Soybeans 30 20 10-1914 1918 1922 1926 1930 1934 1938 1942 1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 USDpe er bushel
Real U.S. broiler prices 35 3,5 3 25 2,5 2 1,5 USD/lb 1 0,5 0 1 1 1 1 1 1 1 1 1 1 1 1 947 950 953 956 959 962 965 968 971 974 977 980 1 1 1 1 983 986 989 992 1 1 2 2 995 998 001 004 25
Aquaculture Aquaculture is the result of systematic R&D and innovation in water based food production systems Expansion of aquaculture production is profitable because of lower production cost due to technical innovation Productivity growth This is a necessary development if the world s oceans and waterways are to be significant sources of food
Norwegian export price and production cost for salmon 1985-2010 (2010=1) NOK/kg 120 Price 2500 100 Cost 2000 Production 80 1500 60 1000 40 20 500 0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 0 1 0 00 tonn
Norwegian export price and production cost for salmon 1985-2010 (2010=1) NOK/kg 120 Price 2500 100 Cost 2000 Production 80 1500 60 1000 40 20 500 0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 0 1 0 00 tonn
Norwegian export price and production cost for salmon 1985-2010 (2010=1) NOK/kg 120 Price 2500 100 Cost 2000 Production 80 1500 60 1000 40 20 500 0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 0 1 0 00 tonn
Shrimp production and real US import price (2005=1) 18 3000 Price 16 Quantity 2500 14 1000 tons 12 10 8 2000 1500 USD/kg 6 4 2 0 1000 500 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
There will be environmental challenges, but these can be solved: Use of antibiotics in the Norwegian salmon farming industry 50000 700 45000 40000 600 35000 500 Kilo 30000 25000 20000 400 300 1000 tonnes 15000 10000 5000 Antibiotics Salmon production 200 100 0 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
Seafood is ecosystem friendly Species Beef, Sweden Pork, Sweden Chicken, Sweden Salmon, Norway Cod, Norway Haddock, Norway Mackerel, Norway Herring, Norway Carbon footprint (kg CO2e/kg edible part at slaughter) 30 5.9 2.7 2.9 2.9 3.3 0.5 0.5 Reference Cederberg et al (2009) Cederberg et al (2009) Cederberg et al (2009) Winther et al (2009) Winther et al (2009) Winther et al (2009) Winther et al (2009) Winther et al (2009) But even improved resource use is not necessarily regarded d as positive: Canadian Atlantic salmon farms increase emissions.. largely due to greater use of poultry products (Pelletier et al., 2009) and in the UK a marked improvement in environmental performance could be achieved through replacing mixed whitefish trimmings meal/oils
Although some question our whole food production system Toxic salmon Museum of zoology mutants room Bird flu Stinky pig Mad cow
Trade and aquaculture change the market: New species in the whitefish market ca 1900-1985 ca 1990 ca 1995 ca 2000 ca 2005 Until 1985 Cod, haddock, saithe, etc. 1990: Alaska Pollock Catfish 1995: Hake Hoki 2000: New warm water species as tilapia and Nile Perch 2005: Pangasius
US imports of frozen whitefish, 1990-2008(tonnes product weight) 450 400 Pangasius Redfish s 0 tonne 350 300 250 200 Sole Cod Tilapia Pollock Orange roughy Haddock 100 150 100 Whiting Hake Catfish 50 0 Flounders Other 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Competition from new species influence asset values and participation i i as well as prices Bristol Bay sockeye (drift gillnet) from Valderrama and Anderson
The values of attributes and information i are increasingly i important (Roheim) The product is not only the physical seafood product
but also a set of services related to: Volume Timing and frequency Flexibility Cost efficiency i in distribution ib ti Food safety Harvesting technology Ecolabel etc.
but also a set of services related to: Volume Timing and frequency Flexibility Cost efficiency i in distribution ib ti Food safety Harvesting technology Ecolabel etc. And each attribute creates a new potential line of And each attribute creates a new potential line of conflict at the market place, in the supply chain and in the production or harvesting process
Governance (Smith et al, 2010) Not only the government, but also the industry itself is responsible for good governance The influence of other stakeholders on governance has increased over time Competing economic interests, environmental concerns, food safety concerns In a successful industry, governance cannot be too light, not too heavy handed Governance should recognize structural changes in the industry A d t t i ti d t i bl And not prevent innovations and sustainable technological developments
It can take time to find a good governance system: Norwegian landings of mackerel 1000 900 800 700 600 500 400 300 200 1,000 tonnes 100 0 1940 1944 1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008
It can take time to find a good governance system: Shrimp production, Thailand 600 500 1,0 000 tonn nes 400 300 200 100 0 Source: FAO
One may never get there because governance is lax: Shrimp production, Taiwan 1,0 000 tonn nes 100 90 80 70 60 50 40 30 20 10 0
Or because governance prevents innovation and new technologies: Salmon production, USA 25 1,0 000 tonn nes 20 15 10 5 0
Conclusions Conflicts in relation to the use of oceans are likely l to continue and increase, because there are so many visions with respect to sustainable use The importance of the oceans is likely to increase as pressure on marginal lands continue to increase No governance is likely to lead to the worst outcome, e.g. open access A fundamental question is whether innovation and human ingenuity are to be allowed to play their part Better and sustainable outcomes require analyses and trade-offs
Conclusions Analyzing trade-offs is what economists do best There is a huge role for economic research in analyzing the effects of different governance systems - including no governance - and how these are linked to different supply chains and market systems Markets always play a role, but which? And other disciplines provide valuable insights
Marine Resource Economics: MRE: The only journal specifically addressing economic issues in relation to marine resources Listed in Thomson Reuters SSCI; SSCI Expanded; Social & Behavioral Sciences; Agriculture, Biology & Environmental Sciences; EBSCOHost; more Published in association with IIFET and NAAFE A true value! Individuals: US$50 in the US. Other countries US$90 Each subscription matters Contact Barbara Harrison at mre1@etal.uri.edu