The Problems of Intensive Aquaculture on Canada’s Atlantic Coast

 By Lane Gelhorn*

 

                                                                                               

INTRODUCTION

Atlantic Canada has seen fish stocks plummet to all time lows, and unemployment rise to the highest levels in recent history as mismanagement of fisheries and environmental change combine to deliver a crushing blow to the commercial fishing industry.  Decimated natural populations of pelagic and demersal fish populations have prompted fishing bans for many species, and catch limits and quotas have become hotly debated and contested issues.  The impact that the decline of the fisheries has on the maritime communities is evident throughout the region; witness recent clashes between resource users in Burnt Church, New Brunswick, and anti-Spanish sentiment in Newfoundland in the wake of the so-called “Turbot Wars”.

In an effort to rejuvenate the seafood industry, Department of Fisheries and Oceans (DFO) officials have been examining aquaculture as an alternative to harvesting wild stocks.  Otherwise known as fish farming, aquaculture is viewed by some as a panacea for the problems of a mortally wounded industry and an ailing region.  Federal Fisheries Minister Fernando Robichaud has indicated that the DFO “see[s] aquaculture as having tremendous potential to increase and stabilize the world’s supply of fish available for food, as well as to generate employment, and to relieve pressure on wild stocks” (Elliot, 1996).  The degree to which this potential can be realized under existing aquaculture practices, however, is the subject of an intense debate.  Should Canada emphasize and install the aquaculture industry in the Maritimes as a means of sustainable development?  The answer is, in a word, no.  Under present conditions and methods, aquaculture (specifically intensive fin fish production) is unsustainable when viewed from an ecological/economic standpoint.  While a great idea in theory, aquaculture in practice falls short on meeting predefined social and economic objectives.

 

DISCUSSION

On the land, we have learned to produce food by cultivation, but in the sea we still acts as hunters and gatherers.  We still catch fish like we used to hunt down buffaloes on the Great Plains... with similar results.   (International Centre for Living Aquatic Resources Management)

The need for a sustainable approach to fish harvesting is indicated in the above quote by the ICLAR (Elliot, 1996).  Intensive aquaculture operations, however, are not the solution.  By cultivating the sea as we have our land, we may cause further depletion of the fish stocks and numerous other ecological implications.  We may also provide false hope for those displaced by the closure of the fishing industry by introducing a sub-optimal, and inefficient employment scheme.

 

ECOLOGICAL IMPLICATIONS


Ecological implications of intensive fish farming are pervasive in the industry, regardless of the fish species raised.  Most of the research, however, has been concentrated on the implications of Atlantic Salmon (Salmo salar) farms (Black et al., 1997; Folke, Kautsky and Troell, 1994; Folke, Kautsky and Troell, 1997; Folke, Kautsky, Berg, Jansson, and Troell, 1998; Naylor et al., 1998; Rennie, 1998; Rhodes, 1993). With over 800 000 metric tons produced annually, Atlantic Salmon are the most commonly raised fin fish (Rennie, 1998; Rhodes, 1993). High market value and general heartiness make Salmo salar an appropriate choice for producers (Naylor et al., 1998). Problems of developing aquaculture in Atlantic Canada can thus be considered as problems intensive salmon farming*.

As reflected in Mr. Robichaud’s comment on aquaculture (see introduction), fish farming is often viewed as a method of ‘taking the heat off’ wild populations.  On the contrary, intensive aquaculture often leads to an increased dependence on wild stocks.  Carnivorous salmon must be fed pellets of 45% fishmeal and 25% fish oil extracted from commercially harvested wild fish stocks (Naylor et al., 1998).  Folke, Kautsky, Berg, Jansson and Troell (1998) found that the fish component of dry pellet feed required a “supporting marine production area” 40 000 to 50 000 times the area of the salmon cages. Naylor et al. (1998) concur; they report that “the input of fish products is two to four times the outputs [of salmon]”.  In 1997, for example, approximately 1.8 million tons of wild fish were required to produce 644 000 metric tons of Atlantic salmon, which corresponds to an approximate 3:1 ratio (Naylor et al., 1998). In a situation where wild fish inputs exceed farmed fish outputs, it is easy to see that aquaculture does not “relieve the pressure on wild stocks”, but rather intensifies it.**

In addition to wild fish stock depletion, the diet of farmed salmon increases eutrophication*** of coastal zones.  Most salmon are raised in net pens in coastal bays once smolts have been grown in freshwater ponds for one year (Naylor et al., 1998; Bjorndal and Salvanes, 1995).  Uneaten food and concentrated waste products enter the environment in substantial quantities and lead to eutrophication of coastal areas. Folke, Kautsky and Troell (1994) argue that the amount of pollution generated annually from all of Sweden’s fish farms is the equivalent of Stockholm (Sweden’s largest city) releasing all of its wastes directly into the ocean****.   The associated eutrophication is quite su


bstantial, and in order to assimilate the increased nutrients, it is suggested that kelp beds 180 times the size of the fish pens would be required (Folke et al., 1994). 

In order to reduce eutrophication, there has been a movement to provide feed with less nitrogen and phosphorus.  Changing the N/P ratio and adding certain vitamins to feed, charges Folke et al. (1997), actually makes matter worse in that it may promote growth of toxic algal blooms.  These organisms (Gymnodium, Prymnesium, and Chrysochromia species) can kill trout and salmon in both farmed and wild populations (Folke et al., 1997). Hence, eutrophication and associated algal blooms can jeopardize valuable habitat, and thus prevent rejuvenation of previously depleted stocks.

In addition to depleting the natural fish stocks, and jeopardizing their habitat, aquaculture activities may also introduce disease to wild stocks.  A recent article in the National Post (Thursday October 21, 1999) describes the introduction of Infectious Salmon Anemia (ISA) from a fish farm to breeding Atlantic Salmon in New Brunswick.  Despite the best measures to prevent escape of this disease, including the destruction of over two million farm-raised fish, ISA has been found in the wild (MacKinnon, 1999). In an attempt to reduce the likelihood of fish disease epidemics, many fish ranchers are using feed-based antibiotics and pesticides  - these too end up in coastal waters and cause further environmental degradation (Naylor et al., 1998; Folke et al., 1997).  The implications of disease epidemics that escape the boundaries of fish cages are quite scary: we may deliver the coup de grace to stocks already diminished by unsustainable fishery practices. In addition, we may poison the coast with antibiotics.

Closely related to disease escape from aquaculture pens is the impact that fish escape has on the biodiversity of natural fish stocks.  Wild populations of salmon have genetic characteristics corresponding to their spawning area, and interbreeding with farm-raised fish may degrade the degree of genetic variance between individuals (Naylor et al., 1998).  Similarly, there is some sentiment that hearty “renegade Atlantic salmon”, having escaped their nets, could take over niches from native fish (Rennie, 1998).  In fact, over 9000 Atlantic salmon have been caught on the Pacific coast between Alaska and Washington and commercial catches in Norway are sometimes dominated by farmed salmon (Naylor et al., 1998).

The ecological implications of intensive fish farming listed above are quite severe, yet the list is far from exhaustive.  Even such a cursory look at the ecological problems of intensive aquaculture illustrates the associated environmental dangers.  However, the decision to develop any industry cannot solely be based on a list of possible environmental problems else there would be no development of any kind.  Rather, decisions about the appropriateness of a particular development must follow an analysis of economic viability and social optimality.

 

 

ECONOMIC ANALYSIS

Whether or not an intensive fish farming industry should be pursued as a sustainable development for Maritime communities is very much an economic debate.  This is not to say that it is economic in nature instead of environmental, but rather that the two are tightly linked.  The best test for any development is a cost-benefit analysis, where costs and benefits are defined in a holistic sense rather than simply extraction costs versus profits. Using such a framework, it is clear that development of intensive fish farming is a non-viable proposal.

In order to determine the viability of an industry, demand for a product must be demonstrated.  There is an obvious demand for seafood in general, and salmonids in particular.  The salmonid demand is reflected in the relatively high prices of trout and both Pacific and Atlantic salmon species (Rhodes, 1993).  However, it is difficult to find evidence that there is a variation in consumer willingness to pay for farmed versus caught salmon. To the contrary Gempesaw, Bacon, Wessells, and Manalo (1995) find, in a study entitled “Consumer Perceptions of Aquaculture Products”, that consumers in Northeast United States do not differentiate between farm-raised and traditionally captured salmon when at the supermarket.  Therefore, the market demand for farm-raised species is the same as for those caught at sea, and fish producers cannot access differential prices.  When this fact is combined with the intuition that aquaculture results in an increased and more stable fish supply, it becomes clear that (all things equal) producers will be facing falling commodity prices.  While there may be some suggestion that marketing farm raised fish as the environmentally conscious alternative may boost the price of farmed fish, this method of price differentiation will not be successful as the public becomes increasingly aware of the ecological implications of fish farming (as listed in the previous section). With supply increasing and demand remaining constant, the market equilibrium would shift.  Overall, prices would fall with the introduction of intensive aquaculture, which will even further jeopardize the ability of the remaining commercial fishers to make a living.

On the supply side, the costs of fish farming are projected to increase.  Rhodes (1993) predicts a “cost-price squeeze” as wild stocks of the fish required to produce feed pellets are depleted and feed prices rise. In addition, “polluter pays” legislation (as outlined in the EU Waste Management Strategy) is likely to be introduced to North American fish farms.  Legislation of this type would internalize some of the measurable and directly attributable negative externalities of intensive aquaculture (such as eutrophication). Once these costs become borne by the producer, the industry will likely not be viable.  As research by Folke, Kautsky and Troell (1994) indicates, “internalizing the environmental cost of the nutrient release from salmon farms at the level of the firm reveals that the total cost of salmon production exceeds the highest price paid for salmon in the 1980s, the decade when the industry boomed” (emphasis added). At the level of the industry, aquaculture in its present form will not be profitable once polluter pays legislation comes into force.

Despite the likely advent of polluter pays legislation, some costs of aquaculture will remain as external to the firms. Ecological implications other than sewage pollution and eutrophication would remain as externalities of production. Fish stock depletion, and disease and foreign species introduction are difficult to value, and would of necessity be beyond the scope of any pollution legislation.  They would thus remain as costs borne by society and therefore as a source of inefficiency.

Proponents of developing an aquaculture industry in Atlantic Canada would likely argue that the above mentioned costs are outweighed by benefits of intensive fish farming. Beyond the benefits to the firms of resource exploitation, there are external benefits such as employment, and maintenance of local settlements.  As the world population surpasses six billion, the demand for fish protein is likely to increase*****.  This much is true.  However, it has already been shown that most of the benefits of resource use will likely be eroded as firms find themselves on the hook for sewage cleanup.  In addition, cost externalities of environmental damage (which indicate a high social marginal cost) will offset the increase in demand caused by population growth.  It is true that we can discount these environmental effects, as the results of pollution and resource depletion occur in the future, but in the pursuit of sustainability this is not an intelligent decision.

With regards to employment and the result effect of rejuvenating local communities, intensive aquaculture that requires fishmeal is not sustainable in view of declining fish stocks and possible bans on fishing.  Without sustainability, there is little point in beginning a new industry.  In addition, there is evidence from Norway (the world’s foremost salmon farming country) by Bjorndal and Salvanes (1995) that regional biophysical differences make for varying degrees of efficiency in fish farming.  Further, government policies promoting aquaculture as a solution to unemployment often leads to inefficiency.  The authors of that study have stated that size and ownership regulation as well as licensing cause “unexploited economies of scale” in all of Norway’s fish farming plants. They argue that it is more efficient for market forces to determine location and maximum output (Bjorndal and Salvanes, 1995).  Given the difficult conditions under which a firm may seen positive net marginal benefits, unexploited economies of scale may make it very difficult for individual firms to make a go of it.  Hence, an industry designed to meet the needs of persons displaced by the collapse of the fisheries may not meet their needs at all if the very legislation that placed the aquaculture firms in small communities prevents them from succeeding.

The economic argument in favour of intensive fish farming in the Maritimes fails to take into account the inherent instability in commodity pricing in a world market, in addition to the likelihood that firms will be required to internalize costs of pollution control.  Proponents also may overlook the fact that government involvement in the burgeoning industry will lead to inefficiency, and in an era of free trade, an inability to compete with more experienced firms in other parts of the world.  As J.R. Coull (1996) examines in his study of aquaculture in Scotland’s Shetland islands, the “question [remains] whether a viable economy in a developed society can be sustained on the basis of a fishery industry alone”.

 

CONCLUSION

In pursuit of a sustainable method of seafood production and a desire to promote economic growth in the area hardest hit by the collapse of the Atlantic fish stocks, many people (including the DFO) have turned to intensive fish farming as a solution.  By nature, however, intensive aquacultural activities are unsustainable, and in themselves cannot be the answer to a problem as complex as the one facing the East Coast of Canada.  The promise and problems of aquaculture are perhaps best summarized by Folke, Kautsky, and Troell (1997):

We believe that aquaculture can significantly contribute to fulfilling the increasing global demand for seafood.  But we do not believe that extensive aquaculture such as salmon farming ... will provide a net addition to this demand.  Such forms of aquaculture are not driven by food shortage objectives; they are driven by market prices.  This would be quite all right if market price accounted for the full cost of the activity.  But market prices capture only a tiny part of the resources and ecosystem services that are required to produce farmed salmon ...  and market prices do not capture the environmental impacts of salmon.... production.

Hence, in making a decision to develop an intensive salmon farming industry in Atlantic Canada, federal planners may be making a mistake paramount to the mismanagement of the fisheries in the first place.

In no way does this conclusion suggest that nothing can be done to rejuvenate the fishery sector and the coastal community life. Instead, it offers a challenge for government to come up with intuitive ideas that combine resource use with sustainability.  Aquaculture can work if activities are conducted in a way, which reduces the dependence on the ocean resources for food and waste assimilation.  Other solutions to the problems faced by the Maritimes can be found, so long as we do not repeat the mistakes made in the previous two decades.

 

REFERENCES

Bjorndal, T. & Salvanes, K.G. (1995). “Gains from Deregulation? An Empirical Test for Efficiency Gains in the Norwegian Fish Farming Industry,” Journal of Agricultural Economics, 46 (1), p. 113-126.

Black, E., Gowen, R., Rosenthal, H., Roth, E., Stechy, D., & Taylor, E.J.R. (1997). The Costs of Eutrophication from Salmon Farming: Implications for Policy - A Comment. Journal of Environmental Management, 50, 105-109.

Campbell, N.A., Mitchell, L.G., & Reece J.B.  (1997).  “Biology: Concepts and Connections,” (2nd ed.). Don Mills, ON: Addison Wesley Longman Inc. G9.

Coull, J.R. (1996). “Towards a Sustainable Economy for the Shetland Islands: Development and Management Issues in Fishing and Fish Farming.” Geojournal, 39 (2), 105-194.

Elliot, I. (1996, April 29). “Aquaculture Experts Say Output Must Triple to Meet Demand.” Feedstuffs, 23 (16), 10-11.

Folke, C., Kautsky, N., Berg, N., Jansson, A., & Troell, M. (1998). The Ecological Footprint Concept for Sustainable Seafood Production: A Review. Ecological Applications, 8 (Suppl.1), S63-S71.

Folke, C., Kautsky, N., & Troell, M. (1994). “The Costs of Eutrophication from Salmon Farming: Implications for Policy.” Journal of Environmental Management, 40 (2), 173-181.

Folke, C., Kautsky, N., & Troell, M. (1997). “Salmon Farming in Context: Response to Black et al..” Journal of Environmental Management, 50, 95-103.

Gempesaw, C.M., III, Bacon, R.J., Wessells, C.R., & Manalo, M. (1995). “Consumer Perceptions of Aquaculture Products.” American Journal of Agricultural Economics, 77 (12), 1306-1312.

MacKinnon, M. (1999, October 21). “Disease of Farm Raised Salmon is Found in Wild.” The National Post, A7.

Naylor, R.L., Golburg, R.J., Mooney, H., Beveridge, M., Clay, J., Folke, C., Kautsky, N., Lubchenco, J., Primavera, J., Williams, M. (1998, October 30). “Nature’s Subsidies to Shrimp and Salmon Farming.” Science, 282, 883-884.

 

Rennie, J. (Ed.) (1998, Fall). “The Promise and Perils of Aquaculture.” Scientific American, 9 (3), 64-69.

 

Rhodes, R.J. (1993, May/June). “World Aquaculture Situation and Outlook, 1993: An

                 Overview.” Aquaculture Magazine, 19 (3), 50-59.



                [1]An earlier version of this paper was prepared for J. Bruneau (Economics 275.3) at the University of Saskatchewan

 

[2]              Due to limitations in the scale of this paper, problems of the shrimp and shellfish industry will not be examined.  They can be considered beyond the scope of this analysis.

[2]              Farming salmon may reduce the number of salmon harvested per se, but the overall withdrawal from other fish stocks is deleterious, and indirectly jeopardizes salmon stocks as main sources of food are fished to exhaustion.

[2]                      Eutrophication can be defined as nutrient pollution leading to an increase in productivity of an aquatic ecosystem (Campbell, Mitchell, and Reece, 1997).

[2]              While there is some debate about the legitimacy of such comparison (see Black et al. 1997), it does serve to illustrate the copious quantities of nutrient released into coastal waters.

[2]              It is estimated that annual demand will increase to 57.9 million tons by 2025 (Elliot, 1996).