Fishery management:Wild and farmed fish

Frank Asche

IRIS, 01.06.12

Norwegian Fisheries

• Norway is the world’s 12th largest seafood producer when measured by quantity produced, Brazil is 19th

• Norway is the world’s 2nd largest exporter of seafood, while Brazil is 51st

• The structure of the fisheries and management system has changed dramatically since the 1970s– Aquaculture

Real production value, harvest and aquaculture(2009=1)

And Brazil is not too dissomilar

We like to think of fishing as traditional and romantic,

But the fleet structure is varied

• Different regulations are required to address specific needs

• Norway did regulate access to fisheries in the 1930s, but did not try to protect stocks until 1972

• Fisher´s opportunities and behavior varies with the regulatory system

Better regulation allows better handling: Total Norwegian landings and share used for

reduction to fishmeal/oil

Norwegian landings and prices by use for spring spawning herring

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200

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1200

1400

1963

1966

1969

1972

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1981

1984

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1990

1993

1996

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2008

NO

K/kg

Consumptionq Reductionq

Norwegain Mackerel landings

Chilean Jack Mackerel

Wasteful organization implies losses in more dimensions

• Overcapacity is one problem

• Rent dissipation due to foregone market opportunities is probably larger than rent dissipation due to over-capacity

• Good management is necessary to protect stocks and exploit economic opportunity

The world’s ocans covers 2/3 of the planet…

…and the world’s waterways and oceans is a great underutilized resource

• Increasingly, land-based technologies are adopted to use this resource

• Aquaculture is the “food production” arm– Aquaculture is farming while fisheries is our last large

hunting industry

• Aquaculture is an old technology, but a revolution took place in the 1970s as one started to use knowledge from agro-sciences to domesticate, breed and feed fish

World aquaculture productionAquaculture is the world´s fastest growing

food production technology

Million tonnes

World fishery production

Million tonnes

Conditions favouring increased aquaculture production

• Population growth and economic growth lead to increased aggregate demand for food

• Stagnating global catches of fish reduce the competitiveness of wild fish

• Globalization has reduced the cost of shipping products and increased trade

• The growth of retail chains favour supply chains with sufficient control to enable efficient logistics

Conditions favouring increased aquaculture production

• Population growth and economic growth lead to increased aggregate demand for food

• Stagnating global catches of fish reduce the competitiveness of wild fish

• Globalization has reduced the cost of shipping products and increased trade

• The growth of retail chains favour supply chains with sufficient control to enable efficient logistics

• To exploit these conditions, one must be competitive

Aquaculture is competitive

• 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 innovations– Productivity growth– Demand growth

• This is a necessary development if the world’s oceans and waterways are to be significant sources of food

Innovations in aquaculture are leading to rapid technological progress

Specialiced suppliers increase productivity with their own R&D work

Innovations increase scale – a pen from 1980 and one from 2010

5 m 50 m

Improved logistics

Air freight

Truck carries chilled fish

Distribution terminals

Product innovation increase demand

Branded salmon

Pre-prepared meals

Better cuts

The product is not only the physical seafood product…

…but also a set of services for the industrial buyers related to:

• Volume• Timing and frequency• Flexibility• Cost efficiency in distribution• Food safety• etc.

Norwegian export price and production cost for salmon 1985-2010 (2010=1)

Norwegian export price and production cost for salmon 1985-2010 (2010=1)

Norwegian export price and production cost for salmon 1985-2010 (2010=1)

There will be environmental challenges, but these can be solved:Use of antibiotics in the Norwegian salmon farming industry

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

1980

1982

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2002

2004

Kil

o

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es

Antibiotics

Salmon production

Shrimp production and real unit price(2008=1)

Channel catfish – Decline of USA and rise of China

Source: FAO, USDA

US imports of frozen whitefish, 1990-2008(tonnes product weight)

Annual growth rate Aquaculture vs agriculture

0 2 4 6 8 10 12

1970-1979

1980-1989

1990-1999

2000-2009 Meat

Milk

Eggs

Cereals

Fruit

Vegetables

Aquaculture

%

Governance• 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– And not prevent innovations and sustainable technological

developments

It can take time to find a good governance system:Norwegian landings of mackerel

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100

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1000

1940

1944

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1972

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1980

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2008

1,0

00

to

nn

es

It can take time to find a good governance system: Shrimp production, Thailand

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100

200

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6001

,00

0 t

on

nes

Source: FAO

One may never get there because governance is lax:Shrimp production, Taiwan

0102030405060708090

1001

,00

0 t

on

nes

Or because governance prevents innovation and new technologies:

Salmon production, USA

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5

10

15

20

251

,00

0 t

on

nes

Brazil has success stories as well as challenges

Conclusions

• The seafood sector is very much separated into two different parts – harvesting and farming

• Harvesting industries need well protected stocks and management that allow economic opportunities to be exploited

Conclusions

• Aquaculture production will continue to increase– Because one have just started to adopt technology

from agriculture, and there is a tremendous scope for further productivity growth

• As for all biological production processes, this creates environmental challenges– Can be solved

• North-America and EU lags behind