A survey of aquaculture production economics and management

Abstract

The literature on production economics and management of fish culture has grown as aquaculture has matured as a commercial industry. Salmon, catfish, shrimp and trout are the focus of this literature survey as a reflection of the volume of research that has been completed on these species and their importance in US production and world trade. In addition, a discussion of low resource production systems is included that is dominated by tilapia and carp culture systems. A brief overview of the principles of aquaculture production economics and management is presented followed by a review of economic studies.     

Economic analysis of land based farming of salmon

Abstract

Land-based farming of salmon is emerging for a number of reasons. The demand for salmon is increasing in many parts of the world. In recent years there has been limited growth in production due to binding government regulations and environmental challenges in sea-based salmon aquaculture. This is true both for Norway (sea lice, salmon escapes) and Chile (sea lice, disease problems), the two largest producers of salmon. Growing demand and limited expansion in production have made for a very profitable industry. At the same time, there have been technological developments when it comes to land-based farming (a technology used for smolt production and species such as sole and turbot), and cost of production has changed. Currently, land-based salmon farming is in operation or in development in several countries including the USA, Denmark, and Norway. In this paper, the economics of land-based salmon farming in a Norwegian context is presented, with an emphasis on the relative competitiveness of this vis-à-vis sea-based farming. If successful, land-based farming could potentially have an important impact on the dynamics of the salmon market.     

Effects of inter‐country aquaculture technology diffusion rates on international shrimp market shares

Abstract

Technology innovation and diffusion in shrimp aquaculture has resulted in increased quantity and supply of shrimp to satisfy expanding consumer demand. Logistic growth curves are estimated to depict the rate of diffusion of shrimp aquaculture technology throughout the major shrimp producing countries. A time series/cross sectional model is applied to 1985–1991 and 1995–1999 production data to evaluate factors influencing shrimp production growth rates. Calculated market shares for each country indicate that operating costs, lagged shrimp price, number of hectares in production, lagged export quantity of shrimp, and market structure influence the aquaculture technological diffusion rates and shrimp produced, and suggest that countries that incorporate technologies into their production system benefit the most from increased market share.     

Price interactions between salmon and wild caught fish species on the Spanish market

Abstract

The introduction and rapid expansion of farmed salmon production in the mid 1980s has transformed the international market for salmon. Spain is one of the most important markets for fish within Europe and the world, and has seen a substantial increase in its demand for salmon. As in other European countries, this has raised concerns that the increased supply of salmon to Spain may have detrimental effects on the market prices of traditional (wild‐caught) species.

In this paper, the extent to which salmon competes with the main traditional fish species in the Spanish market is examined using market delineation methodologies. In particular, the potential interactions between species is examined in a multivariate cointegration framework. The results suggest that salmon is at best only a weak substitute for tuna, hake and whiting, but no significant interaction could be found.     

An overview of salmon trout aquaculture in Finland

Abstract

In this case study, we describe the evolution of Finnish salmon trout aquaculture; how salmon trout farming grew as a vital industry, how Finland became the world's leading producer of salmon trout, and how the opening of markets to international competition led to a decline of the industry. The focus is on the continuous interaction between the changing market situation and production decisions. The study reveals the impact of national environmental policy on the competitiveness of the industry. At the moment, the industry is undergoing major structural changes; production has moved to neighbouring countries, and the value chain is concentrated. In future, closer interaction and co‐operation between the actors along the entire fish value chain will be the key factors for success.     

THE FARMING PRACTICES AND ECONOMICS OF AQUACULTURE IN THAILAND

ABSTRACT

The paper reviews freshwater and coastal aquaculture practices in Thailand, and compares the productivity, costs, and benefits across various types of cultivation and various intensities of production. The paper is based on data that were collected in surveys conducted during 1998–2001 by the Department of Fisheries (DOF), Thailand and the WorldFish Center. More than 22% of Thailand's fish supply comes from aquaculture, with coastal aquaculture accounting for more than 88% of this in terms of value. Intensive culture of shrimp is the dominant form of coastal aquaculture, occupying 69% of the area under production. However, in some regions, the average net profit/kg of intensive shrimp culture is negative, and semi-intensive farming, with relatively lower fixed investment and operating costs, delivers the highest rate of return on investment. On the coast, grouper and sea bass are the most important cage-cultivated species, achieving an economic rate of return as high as 92%. In the same environment, culture of mollusks, such as green mussels, oysters, and blood cockles, is widespread. It can also be economically sustainable, with relatively low capital and operating costs. Although the relative share of freshwater aquaculture production is declining, the level of output has been increasing rapidly. While the average production from monoculture of carnivorous species is higher than that from polyculture, the average capital investment and operating costs associated with the former are also higher. The expansion of freshwater polyculture and of mollusk culture in coastal areas would greatly assist poor fish farmers.     

The development of Brazilian aquaculture: Introduced and native species

Brazil’s aquaculture production has increased rapidly during the last two decades, growing from basically zero in the 1980s to over one half million (metric) tons in 2011. However, with an increased focus on the domestic market and native species, the development in Brazil has been very different from most other successful aquaculture producers, particularly in Latin America. As in many other countries, the development started with introduced international species such as shrimp and tilapia in a typical developing country fashion, but has shifted to an increasing share of native species and focus on the domestic market. This article analyzes the main aspects concerning this development by the relative productivity of the main species, regulations and markets. Regulations and the technology spreading from international species may be considered as important factors for this somewhat unusual development. The future prospects for the Brazilian aquaculture industry development are positive, since there is not only space available for expansion for both exotic and native species, but also an untapped domestic market.     

The rise of fish oil: From feed to human nutritional supplement

ABSTRACT

This article tells the story of how fish oil has gone from an inferior to a premium oil product. With the growth of aquaculture, fish oil became a valuable feed component. Its value increased further as the belief in the health benefit of Omega-3 opened the market for direct human consumption through nutritional supplements. Strong demand, limited supply growth and weaker substitution between Omega-3 and Omega-6 has led to diverging trends between fish oil and vegetable oil prices, with fish oil now a premium oil product. We also investigated how the salmon aquaculture industry has responded to the challenge of rising fish oil prices. Concerted effort in nutrition and feed research is shown to have allowed a reduction in the share of fish oil in feed from around 25% in the early 2000s to around 12% today. This substitution effort has allowed salmon production to grow without using substantially more fish oil.     

The competitiveness of the Chilean salmon aquaculture industry

Abstract

Commercial salmon and trout farming has emerged as a major industry in Chile during the 1990s. Salmon is not a native species to Chile, still excellent climatic conditions are provided for farming. Since 1992 Chile has been the second largest producer of farmed salmon and trout in the world after Norway. This report reviews the development of the Chilean salmonid industry from its early stages until today with respect to production patterns, legislation and main markets. A cost comparison between Chilean and Norwegian farmed salmon is also provided. Finally, the international competitiveness and future challenges of the Chilean salmonid farming industry are analysed.     

A review of production frontier analysis for aquaculture management

Abstract

This paper examines recent advances in production economics with special reference to efficiency measurement using production frontiers and its implications for aquaculture management. Compared with agriculture and other industries, the use of production frontiers in aquaculture is still very limited. However, in recent years several frontier applications in aquaculture have appeared in the literature, suggesting potential applications of these techniques in aquaculture. A synopsis of stochastic frontier production function model and data envelopment analysis (DEA), the two most popular approaches to efficiency measurement, is presented, followed by a review of recent frontier studies in shrimp, carp and tilapia production. The paper concludes with a brief discussion of future development and prospects of frontier applications for aquaculture management.     

Spatial integration of freshwater fish markets in the Northern Baltic Sea area

Freshwater fish species and Baltic salmon (Salmo salar) are important to small-scale fisheries in Finland and Sweden. The formerly local markets for these species have expanded as trade has been opened up to international competition. In this study we use cointegration analysis to test the spatial integration of freshwater fish markets in Finland and between Finland and Sweden. The analysed fish species are salmon, perch (Perca fluviatilis), pikeperch (Sander lucioperca), European whitefish (Goregonus lavaretus) and pike (Exos lucius), and the data covers ex-vessel prices from 1993 or 1995 to 2004. We found that the regional prices in Finland were cointegrated. This indicates that the prices are determined on a single market in Finland. Moreover, the study suggests that Finnish and Swedish markets in Baltic salmon, whitefish, pikeperch and perch were partially integrated, while integration of pike markets could not be found. The political implication is that an essential part of the local small-scale fisheries’ operational environment is determined outside the national borders.     

Use of microsatellite DNA and amplified fragment length polymorphism for Cherry salmon (Oncorhynchus masou) complex identification

Formosa landlocked salmon (Oncorhynchus masou formosanus), an endemic, critically endangered subspecies of Cherry salmon (Oncorhynchus masou) complex, is only found in Taiwan. Because the eyed eggs and ungutted carcasses of Pacific salmons (genus Oncorhynchus) are imported for aquaculture and food to Taiwan from overseas every year, the requirement for preventing illegal trade or accidental commercial imports to avoid unwanted fish from contaminating the gene pool of Formosa landlocked salmon and infect them with diseases is critical for the conservation of Formosa landlocked salmon. Traditional morphology‐based species identification is impossible for salmon eggs and larvae that lack clearly defined morphological features. In the present study, the genetic differences among four subspecies (Oncorhynchus masou ishikawae, O. masou subsp., Oncorhynchus masou masou and O. masou formosanus) of Cherry salmon complex were determined from microsatellite DNA and amplified fragment length polymorphism analyses. We successfully generated a genetic marker to aid traditional taxonomy and investigate the integrity of the current taxonomic status among members of Cherry salmon complex. Use of molecular markers, in combination with traditional morphological identification, is a promising tool for identifying four closely related subspecies of Cherry salmon complex.     

Assurance bonds: A tool for managing environmental costs in aquaculture

Abstract

The environmental costs associated with coastal aquaculture, though poorly understood, can in some cases be quite large. The presence of risk, uncertainty and insufficient monitoring can greatly reduce the power of traditional economic instruments such as environmental taxes and tradable permit systems to internalize these costs. Using the Texas shrimp farming industry as a specific example, this article explores the potential of environmental assurance bonds (EABs) as an alternative economic instrument to internalize environmental costs of aquaculture production under such conditions. Drawing from previous literature, an explicit distinction is made between two mechanisms simultaneously incorporated in the EAB: a deposit‐refund incentive and social insurance. The article discusses the role of each of these mechanisms in shifting the environmental costs of production back to firm. Practical application of EABs in the Texas coastal shrimp farming industry is then examined.     

Biosecurity in Shrimp Farming: Pathogen Exclusion through Use of SPF Stock and Routine Surveillance

Biosecurity, as it is being applied to shrimp aquaculture, may be defined as the practice of exclusion of specific pathogens from cultured aquatic stocks in brood stock facilities, hatcheries, and farms, or from entire regions or countries for the purpose of disease prevention. To make a biosecurity program a functional concept in shrimp aquaculture, the relevant risks should be identified and the appropriate biosecurity measures put into practice to mitigate those risks. Examples of biosecurity measures put into place for this purpose may include such basics as site selection when the intent is to locate a new shrimp culture facility in an area where certain diseases are not enzootic. Standard facilitylfarm operating procedures can be adapted to minimize the risks of disease introduction and spread within a facility through such concepts as pretreatment of all source water, and reduced or “zero” water exchange. Stocking shrimp culture facilities with domesticated shrimp stocks that are free of specific diseases (“Specific Pathogen Free” or SPF) and or with stocks resistant to specific disease agents (SPR) is perhaps the most important single component of a biosecurity program. The example set by the development of domesticated SPF stocks of Litopenaeus vannamei has helped to make biosecure shrimp culture feasible. The development of these and other SPF stocks, and the diagnostic methods to develop and monitor them for specific diseases and disease causing agents, have been milestones in the development of the international shrimp farming industry in recent years, and it has contributed to the species rivaliig Penaeus monodon as the dominant farmed shrimp species. The regular monitoring (surveillance) of shrimp stocks in biosecure culture facilities is a necessary component of a biosecurity plan, as is having in place a contingency plan for disease containment and eradication should a breach occur in the physical and managerial components of a biosecure facility and a targeted disease occur.     

Economic characteristics of extensive shrimp farms in the Mekong delta

Abstract

Extensive forms of shrimp aquaculture have become an important source of income for farm households in the brackish water region of the Mekong Delta, Vietnam. The economic and production characteristics of farms are discussed in this paper, based on a 1997 farm survey, with particular emphasis on shrimp farming practices. Two types of shrimp fanning practice were observed, one based on natural recruitment of seedstock with few supplementary inputs, and the other based on relatively high cash investments in Penaeus monodon seedstock and other inputs. Households practising monodon culture made significantly more income, but faced high risk associated with shrimp mortality. An investigation of the factors affecting monodon yields indicated that investment in higher quality inputs had a positive effect on yield and income. However, further research is needed on the extent to which management can reduce risk of shrimp mortality by investing in such premium quality inputs.     

Economic evaluation of mud crab farming under different production systems in India

Abstract

Apart from penaeid shrimp culture, crab farming and fattening and other several diversified aquaculture practices are now emerging as viable ventures in India. About 11 types of crab products are being exported from India with an average unit value realization of US$ 3.73 kg^?1, pinpointing its importance in the foreign exchange earnings. An economic evaluation of mud crab culture, fattening and fattening with composite culture of shrimp/finfish has been attempted in this paper. The major operating cost was that of seed and it was higher for crab fattening (87% of the total operating cost). Feed costs were very low compared to that of shrimp farming. Annual profit obtained was US$ 22812.5 ha^?1 year^?1 for culture and US$ 30820.8 ha^?1 year^?1 for fattening. Economic indicators such as net profit, rate of return, pay back period and breakeven price indicate that crab fattening/culture is much more profitable than any other coastal aquaculture operations currently in practice, provided hatchery production is established in the country to ensure adequate supply of mud crab seeds.     

Approaches for delaying sexual maturation in salmon and their possible ecological and ethical implications

ABSTRACT

The aquaculture industry is under pressure to satisfy global demand for marine foods. Atlantic salmon has been bred for more than 40 years, and substantial progress has been made within the culturing and breeding programs. The improved growth rate of Atlantic salmon has been accompanied by an earlier onset of maturation. Among the factors controlling maturation in salmon are photoperiod, temperature, and body composition. Early sexual maturation is detrimental to fish health and quality when viewed from an aquacultural viewpoint. There are several approaches for alleviating this problem: (1) traditional selection, (2) manipulation of external factors affecting puberty (e.g., light), (3) novel biotechnological methods for improving breeding methods, (4) induction of polyploidy, and (5) genetic modification controlling maturation. This article presents the ecological and ethical issues connected to these approaches and argues the importance of acknowledging and discussing such issues in order to ensure that all stakeholder concerns are considered.     

The Potential and Sustainability of Aquaculture in India

ABSTRACT

India is a very populous country with more than one billion people. In order to provide food for this growing population, serious environmental problems may result. Despite many benefits from the green, blue, and silver revolutions adopted in India, there has been much concern resulting from intensive agricultural practices that led to environmental problems in both terrestrial and aquatic ecosystems. Increasing demand for aquatic resources also caused inland fisheries to decrease over the past few decades. The location of aquaculture projects, landscape destruction, soil and water pollution by pond effluents, over-exploitation of important fish stocks, depletion in biodiversity, conflicts over agriculture and aquaculture among various stakeholder groups over resource and space allocation, and international fish trade controversies have threatened the long-term sustainability of fisheries and aquaculture industries. The subject of sustainable aquaculture has not been adequately projected in terms of current aquaculture practices aimed to boost a rural economy. This review briefly describes the key issues of aquaculture unsustainability in terms of intensive aquaculture, nutrient enrichment syndrome, soil and groundwater salinization, destruction of mangroves, loss of biodiversity, marine pollution and loss of fish stock, use of aquachemicals and therapeutics, hormone residues, etc. The strategies for sustainability have been highlighted with respect to rice-cum-fish culture, carp polyculture, integrated farming with livestock, rural aquaculture, intensification of small farms, wastewater-fed aquaculture, crop rotation, probiotics, feed quality, socioeconomic considerations, environmental regulations and fisheries acts, transboundary aquatic ecosystems, impact of alien species, ethical aspects of intensive aquaculture, responsible fisheries, and environmental impact assessment. A suggested model outlines the feedback mechanisms for achieving long-term sustainability through improved farm management practices, integrated farming, use of selective aquachemicals and probiotics, conservation of natural resources, regulatory mechanism, and policy instruments.     

Shrimp farming in Latin America: Current status,opportunities, challenges and strategies for sustainable development

Abstract

Shrimp farming in Latin America and the Caribbean (hereinafter, LA&C) is a complex, diverse and dynamic activity, occurring in 22 out of 36 countries, producing 231,000 tons, valued at US$ 1.2 billion in 2002¹. Farmed shrimp represents 52% of all shrimp volumes produced regionally, and almost 18% of all shrimp and prawn (S&P, hereinafter) cultivated worldwide. Whiteleg shrimp (Litopenaeus vannamei) constitutes 91% of all shrimp farmed in LA&C and five nations, led by Brazil ‐formerly by Ecuador‐, comprise 82% of farmed production. Over 90% of LA&C shrimp production is exported (230,000 tons of end products from both aquaculture and wild origin valued at US$ 1.36 billion), generating a trade surplus of US$ 1.28 billion (2002).

Farmed shrimp could easily surpass 513,000 tons by 2030, more than doubling current regional figures (2.9% annual growth rate, compounded). However, competition with Asian countries, anti‐dumping accusations and other factors might limit the expansion process, which is increasingly determined by strategically important matters rather than by physical production constraints. Here, a ‘production‐driven’ process of past decades is being replaced by a ‘demand‐led’ situation, where market and marketing issues will increasingly influence the outcome of shrimp farming.

Growing market competition will continue to press prices down and industry will be forced into a permanent process to improve competitiveness. Here, development strategies include actions by governments and producer associations, promotional and marketing campaigns and the application of good management practices across the production and distribution chains.     

A mortality event in wrasse species (Labridae) associated with the presence of viral haemorrhagic septicaemia virus

Viral haemorrhagic septicaemia (VHS) is an infectious disease of farmed and wild fish and has an extensive host range in both freshwater and marine environments. In December 2012, a wrasse population consisting of ballan, Labrus bergylta (Ascanius), corkwing, Symphodus melops (L.), cuckoo, Labrus mixtus L., goldsinny, Ctenolabrus rupestris (L.), and rock cook, Centrolabrus exoletus (L.), held at a marine hatchery in the Shetland Isles, Scotland, experienced a mortality event. Approximately 10 000 wrasse were being held at the facility on behalf of an Atlantic salmon, Salmo salar L., aquaculture company prior to being deployed for the biological control of parasites on marine pen Atlantic salmon, aquaculture sites. Fish Health Inspectors from Marine Scotland Science initiated a diagnostic investigation, and subsequent diagnostic testing confirmed the site to be VHSV positive by qRT-PCR and virus isolation followed by ELISA. A VHSV genotype-specific qRT-PCR assay revealed that the isolates belonged to genotype III, the European marine strain of the virus. The virus genotype was further confirmed by nucleic acid sequencing of the partial nucleoprotein (N) and glycoprotein (G) genes followed by BLAST nucleotide searches. This study reports for the first time the detection of VHSV within multiple wrasse species and highlights the need for a comprehensive risk-based approach to the use of wrasse and other finfish species as biological controls within the aquaculture industry.