Commercial Aquaculture in Hawaii, 1986

HITAHR COLLEGE OF TROPICAL AGRICULTURE & HUMAN RESOURCES INFORMATION TEXT SERIES 031

COMMERCIAL AQUACULTURE IN HAWAII, 1986

Kevan L. Main and Robert H. Deupree, Jr. ACKNOWLEDGMENTS The authors thank the commercial aquaculture farmers in Hawaii for providing the information presented in this paper. Ellen Antill, Paul Bienfang, Mark Brooks, John Corbin, Chauncey Ching, Jan Dill, Phil Helfrich, Ken Leber, and Jim Wyban provided helpful comments on earlier drafts of this manuscript. Special thanks to Carolyn Rahman for typing the many drafts of the manuscript. This project was supported by USDA Cooperative State Research Service grant #86-CRSR-2-2793.

THE AUTHORS Kevan L. Main is a research associate at the Oceanic Institute, Makapuu Point, Waimanalo, Hawaii 96795.

Robert H. Deupree, Jr., is a biological technician at the Oceanic Institute.

CONTENTS Page O verview ...... 1 Introduction...... 2 Methods...... 2 Results and Discussion...... 2 Commercial Aquaculture in Hawaii: The Overall Picture...... 2 Individual Species Groups Cultured in Hawaii...... 16 Literature Cited...... 19 Appendix I: Oceanic Institute Commercial Industry Questionnaire...... 21 COMMERCIAL AQUACULTURE IN HAWAII, 1986

Kevan L. Main and Robert H. Deupree, Jr.

OVERVIEW feed costs imposed a significant drain on their Results of a 1986 survey of Hawaii’s com­ financial resources. mercial aquaculture industry are reported here. The limitations on aquaculture production The survey goals were to (1) describe the current are discussed for the individual species groups status of the aquaculture industry in Hawaii, (2) cultured in Hawaii. The limitations frequently determine what kinds of support services are identified by the farm operators interviewed needed by commercial aquaculture producers, were lack of capital for expansion, high produc­ and (3) determine areas whose further research tion costs, disease, predation, and feed costs. and development will enable commercial Aquaculture producers reported that the producers to increase their production levels. major limitation on production in Hawaii is the The first portion of this paper presents data inaccessibility of capital for expansion. describing the current status of Hawaii’s Hawaii’s aquaculture industry is dominated by aquaculture industry as a whole. The second cottage-industry farms that have limited portion presents information on individual financial resources. These producers believe species groups cultured in Hawaii (e.g., marine that large, short-lived aquaculture businesses shrimp, freshwater fish, etc.), and discusses the have made it virtually impossible to obtain problems and needs associated with each group. capital for expansion or operating expenses. In 1986, there were 36 producing aquaculture Although the state administers an Aquaculture farms and more than 200 people employed by Revolving Fund Loan (ARFL) Program, cottage the industry. Thirty-one owners or managers of and small business farmers report that they are these farms were interviewed. A wide variety of unable to obtain capital from it. The lack of a species is cultivated in Hawaii, the most financial resource base for these operators may common being the freshwater prawn, Macro- be limiting industry growth in the state. Thus, brachium rosenbergii. Species presently under the loan fund should be increased and the commercial cultivation include freshwater qualification criteria revised to better meet the prawn, marine shrimp, Chinese and channel needs of cottage producers. catfish, tilapia, rainbow trout, grass and silver Farm operators expressed an interest in carp, bighead carp, koi, mullet, aholehole, forming an aquaculture trade association. This milkfish, freshwater tropical ornamental fish, association would serve as a voice for their bullfrog, abalone, and macro- and microalgae. problems and needs with state administrators Farms were classified by size, primary and legislators. species cultivated, and level of management The most commonly requested extension/ intensity. There were three size classifications: advisory services are access to information on cottage, small business, and corporation. low-interest loan programs, access to technical Cottage farms are the dominant organizational information, marketing campaigns for certain form in Hawaii: they are small, family-operated species groups, an extension service similar to businesses with one or two employees. Farms the agriculture extension service, and a reliable were also classified by six species groups: prawn, source of postlarvae. shrimp, freshwater fish, algae, ornamental fish, Members of the commercial industry said and miscellaneous species. Finally, farms were that a central location for aquaculture informa­ classified by level of management intensity: tion was needed in Hawaii. Information on extensive, semi-intensive, and intensive. technical problems (primarily aquaculture Marine shrimp and freshwater prawn farms library services), low-interest loan programs, reported the highest production levels for 1985. and market demand, as well as additional exten­ None of the shrimp farms reported a profit in sion services, was frequently requested during 1985; however, the majority of these farms were our survey. A center for aquaculture informa­ operating at pilot scale. In 1985, 50 percent of tion could provide many of these services. the freshwater prawn farms reported a profit. With the exception of freshwater prawns, no Production costs hinder the ability of a farm to marketing schemes have been devised for make a profit. Although the major production Hawaii’s aquacultured products because of their costs vary among farm size classes and species low production levels. Freshwater fish pro­ groups, many farmers reported that labor and ducers in particular report that they restrict

1 their production levels because of the limited integrating aquaculture into the agricultural market for their product. Market promotion for industiy. The committee identified a need for several species groups should be considered. more industry-oriented research to enable the Current policy restricts the state hatchery aquaculture industry to reach its full potential from guaranteeing postlarval availability for (State of Hawaii, 1984). more than one year at a time. This resulted in The goals of our study were to (1) describe the limited prawn, farm expansion in 1986 because current status of the aquaculture industry in producers were concerned that postlarvae would Hawaii (e.g., species cultured, facility sizes, not be available in the future. The state needs to production levels, production techniques), (2) develop a policy that guarantees the availability determine the support services (extension/ of prawn postlarvae or to establish a state advisory) needed by commercial aquaculture hatchery revolving fund if cottage-industry producers, and (3) determine areas requiring farms are expected to continue to operate and further research and development to enable expand. commercial producers to increase their produc­ tion levels. The first half of this paper describes INTRODUCTION the current status of Hawaii's aquaculture We conducted a USDA-funded survey of the industry as a whole. The second half presents commercial aquaculture facilities in the state of information on the individual species groups Hawaii from July through November 1986. The cultured and discusses problems and needs only other published survey of Hawaii’s aqua­ associated with each group. culture industry was conducted in 1982 by the West Coast Aquaculture Foundation (Stem and METHODS Ure, 1984). In 1986, 36 commercial aquaculture farms Hawaii has a long history of aquaculture- were operating in Hawaii. We conducted related activities dating back to the fishponds personal interviews with 31 of the owners or constructed in the 14th century by early managers of these farms and with an additional Hawaiians (Kikuchi, 1973). In 1965, the Hawaii seven prospective farmers. (Five farm operators State Anuenue Fisheries Research Center began did not agree to an interview. These farms are a concentrated research program on the small [<2 acres each], however, and information commercial culture of freshwater prawns. Its on them would not have contributed signifi­ initial success (Fujimura and Okamoto, 1970; cantly to the overall data base. We did include Fujimura, 1974), coupled with a state program their location, species cultured, and farm area in offering free stocking material arid management the survey results.) advice, provided an incentive for the start-up of We administered a questionnaire adapted several small- and large-scale commercial from the West Coast Aquaculture Foundation prawn farms in the mid-1970s. survey (Stern and Ure, 1984). A copy of the Hawaii’s state administration and legis­ questionnaire developed for this study is lature have strongly supported growth of the included in Appendix I. aquaculture industry. In 1976, the Department of Planning and Economic Development RESULTS AND DISCUSSION indicated that aquaculture had the potential to become a major industry in Hawaii. The legis­ Commercial Aquaculture in Hawaii: The lature subsequently appropriated funding to Overall Picture develop a comprehensive aquaculture plan. The aquatic species cultured commercially Development of this plan was heavily supported in Hawaii are presented in Table 1. Forty-three by the University of Hawaii Sea Grant College percent of the producers culture more than one Program. In 1978, Hawaii became the first state species at their farm. In addition, 17 percent of in the nation to publish a plan for aquaculture the farms plan to diversify their operation and industry development, “Aquaculture Develop­ cultivate new species during 1987. Most aquatic ment for Hawaii, Assessments and Recom­ farms maintain monocultures in their ponds. mendations” (State of Hawaii, 1978). This plan Only 26 percent of the farms are polyculturing detailed Hawaii’s aquaculture resources and several species within the same pond. Of the included guidelines to assist in expansion of the seven prospective farmers who were inter­ industry. viewed, four planned to polyculture prawns and In 1983, Governor George Ariyoshi appoint­ fish (e.g., tilapia); one planned to culture marine ed a committee of private-sector individuals to shrimp; one planned to culture giant clams examine the status of the aquaculture industry (Trid a cn a sp.); and one planned to culture in Hawaii and to make recommendations for microalgae (Spirulina sp.).

2 Table 1. Species commercially cultured in Hawaii

Common name Scientific name

Freshwater prawn Macrobrachium rosenbergii Marine shrimp Penaeus vannamei, P. monodon, P. stylirostris Tilapia Sarotherodon spp. Channel catfish Ictalums punctatus Chinese catfish Clarius spp. Rainbow trout Salmo gairdneri Grass carp Ctenopharyngodon idellus Silver carp Hypophthalmichthys molitrix Bighead carp Aristhichthys nobilis Koi Cyprinus carpia Mullet Mugil cephalus Aholehole Kuhlia sandvicensis Milkfish or awa Chanoschanos Jack or papio* Caranx spp. Bonefish or ‘o‘io* Albula vulpes Freshwater tropical ornamental fish Bullfrog Rana catesbeiana Samoan crab* Sqjlla serrata Pink and red abalone Haliotis refuscens, H. corrugata Nori Porphyra spp. Limu manauea Gracilaria spp. Microalgae Spirulina spp., DunalieUa spp.

♦Cultured at only one Hawaiian fishpond. MOLOKAI

MAUI

HAWAII

FIGURE 1

NUMBER OF COMMERCIAL AQUACULTURE FARMS IN HAWAII 119861 The distribution of aquaculture farms in the intermediate levels of feeding and water Hawaiian Islands is illustrated in Figure 1. exchange rates. Intensive farms involve small Farms were classified by size, primary species ponds or raceways designed for maximum cultivated, and level of management intensity. control of physical and biological parameters, Farms were divided into three size high stocking densities, high water exchange classifications—cottage, small business, and rates, and feeding levels that are carefully corporation— based on the number of employees monitored. and the company structure (e.g., incorporated, Small businesses most commonly use limited partnership). Cottage farms are the intensive management techniques, while dominant organizational form in Hawaii; 63 cottage-industry businesses primarily use percent of the farms are cottage farms. extensive management techniques (Figure 6). Figure 2 presents the mean number of One hundred percent of the algae farms, 75 employees in cottage, small business, and percent of the ornamental fish and miscel­ corporation farms. Cottage-industry farms are laneous farms, and 40 percent of the freshwater small, family-operated businesses that have one fish farms use intensive management tech­ or two full- or part-time employees. Small niques. Most marine shrimp farms use semi­ businesses are intermediate in size and include intensive techniques. Prawn farmers use both partnerships that frequently have seven or more extensive and semi-intensive management full-time employees. Corporation farms are techniques equally (Figure 7). large operations that are organized as incorpor­ One of the costs involved in operating a farm ated businesses, having many employees. is land lease fees. Many of the cottage farms own Cottage farms as a whole have operated their own land, but all of the large corporate- longer than corporation or small business owned farms lease their land (Figure 8). farms. Cottage farms have been in business an Operators of ornamental fish, freshwater fish, average of 8.5 years, whereas corporations and prawn farms often own their farmland averaged 6.0 years and small businesses 1.9 (Figure 9). These three groups make up a large years (Figure 3). Small businesses tend to portion of cottage farms; avoiding lease fees is operate fewer years than corporation and one way they have been able to keep their cottage farms because they depend on product operating costs low. sales for operating income. Corporations have a The mean acreage underwater was greatest larger financial resource base and frequently on marine shrimp farms (x = 12.22 + 4.77 SE) operate for many years without turning a profit. (Figure 10). About 35 percent of all the aquatic Cottage farms are not dependent on product farms planned to increase their underwater sales as their sole income source, and frequently acreage in 1987, although most farms (65 use resources from other businesses to maintain percent) planned to stay the same size. Water their farms during low-income periods. resources vary from farm to farm. Most fresh­ Farms were divided into six species groups water farms obtain their water from streams (70 based on the dominant species cultured. These percent) or wells (26 percent), and saltwater groups are prawn, shrimp, freshwater fish, farms either have wells (44 percent) or get their algae, ornamental fish, and miscellaneous water directly from the ocean (56 percent). Water species (abalone, bullfrog, tilapia, and other availability was a problem for about 30 percent saltwater fish). All freshwater and ornamental of the aquatic farms. fish farms and 66 percent of prawn farms were The amount of dissolved oxygen (DO) present in the cottage size class (Figure 4). Algae and in aquatic systems can significantly affect marine shrimp farms were equally divided animal growth rates. Limited DO has caused 45 between the small business and the corporation percent of the aquaculture operations to aerate size classes. Prawn, freshwater fish, and their ponds to increase the oxygen level. ornamental fish farms have been in commercial The cost of feed can determine whether a business the longest (Figure 5). farm is able to turn a profit. The mean feed cost Farms were also classified by level of for freshwater and ornamental fish farms was management intensity; extensive, semi­ more than twice that of prawn farms (Figure 11). intensive, and intensive. Extensive farms Feed costs have a much greater impact on cottage involve seminatural systems entailing little and small business farms than on corporations daily management, low stocking densities, (Figure 12). Because large operations are able to limited feed input, and limited water exchange. purchase larger quantities of feed at bulk-rate Semi-intensive farms involve low-level prices, their feed costs are significantly lower management of physical and biological than those of cottage and small business farms. parameters, moderate stocking densities, and The mean price per pound of feed for cottage and

5 Aquaculture Industry Employment: Number of Employees versus Farm Size

FARM SIZE CLASSIFICATIONS FIGURE 2

Age of Existing Farms versus Farm Size

FARM SIZE CLASSIFICATIONS FIGURE 3

6 Number of Farms per Size Class versus Species Cultured

X//X Cottage S m all Business Corporation

PRAWN SHRIMP FRESHWATER ALGAE ORNAMENTAL MISC FISH FISH PRIMARY SPECIES CULTURED FIGURE 4

Age of Existing Farms versus Species Cultured

PRAWN SHRIMP

PRIMARY SPECIES CULTURED FIGURE 5 NUMBER OF FARMS Different Using Farms of No. of Comparison aaeet taeis ess om Size Form versus Strategies Management OTG SAL UIES CORPORATION BUSINESS SMALL COTTAGE AM IE CLASSIFICATIONS SIZE FARM IUE 6 FIGURE

PROPORTIONS OF FARMS 0 0 1 30 70 80 90 20 20 40 50 60 10 0

oprsn f ees f Management of Levels of Comparison Extensive Intensive RW SRM FEHAE AGE RAETL MISC ORNAMENTAL ALGAE FRESHWATER SHRIMP PRAWN i- m e S nest wt S with Intensity Intensive Intensive i- m e S RMR SEIS CULTURED SPECIES PRIMARY Extensive Intensive Intensive i- m e S FIGURE 7 IH FISH FISH eis Cultured pecies Intensive Extensive Intensive Extensive Intensive PERCENT OF FARMS RUN BY LAND OWNERS PERCENT OF FARMS RUN BY LAND OWNERS Classifications Size versus Holdings Land Farm am ad odns ess pce Cultured Species versus Holdings Land Farm AM IE CLASSIFICATIONS SIZE FARM RMR SEIS CULTURED SPECIES PRIMARY FIGURE 8 IUE 9 FIGURE Acres Underwater versus Species Cultured

\ zZ zi IZ Z Z PRAWN SHRIMP FRESHWATER ALQAE FISH PRIMARY SPECIES CULTURED FIGURE 10

Feed Costs versus Species Cultured

FISH FISH PRIMARY SPECIES CULTURED FIGURE 11 Feed Costs versus Size Classifications

FARM SIZE CLASSIFICATIONS FIGURE 12

Source of Postlarvae/Fry

FARM SIZE CLASSIFICATIONS FIGURE 13 small business farms is $.27, whereas corpora­ marketed directly by the producer. The high cost tions spend about $.15 per pound. of shipping and government regulations were Most cottage farms depend on outside sup­ cited as limitations to mainland or inter­ pliers for prawn and shrimp postlarvae or fish national marketing. Algae farmers and fry (Figure 13). For example, most commercial ornamental fish farmers market their products prawn farmers obtain postlarvae from the state on the U.S. mainland and in international of Hawaii. Smaller farms are unable to produce markets, as well as directly in Hawaii. their own fry or postlarvae because of the high With the exception of freshwater fish cost of setting up and the technical skill producers, commercial aquaculture farmers in required to run a hatcheiy. Hawaii are able to sell everything they produce. In 1985, the highest reported production In fact, most farmers are convinced that they are levels (total pounds produced) were those for unable to meet the demand for their product. marine shrimp (184,600 lb) and prawn (165,228 Freshwater fish producers, on the other hand, lb) farms. Micro- and macroalgae producers felt that, although there is a strong market ranked third (18,276 lb), and freshwater fish established for saltwater fish in Hawaii, the farmers ranked fourth (14,935 lb). market for freshwater fish is limited. These Seventy-five percent of the ornamental fish farmers voiced the need for a marketing farms and 50 percent of the freshwater prawn campaign to educate the local consumer and farms made a profit in 1985 (Figure 14); both are encourage consumption of freshwater fish. predominantly cottage-industry farms (Figure The reported limitations on aquaculture 4). In contrast, none of the marine shrimp production include (in order of importance1) farms, which are corporations and small lack of capital for expansion, high production businesses, made a profit in 1985. However, the costs, disease, predation, and feed costs. majority of shrimp farms were operating at Aquaculture producers report that the major pilot scale during that year. limitation on production in Hawaii is the Cottage-industry operations differ from inaccessibility of capital for expansion. small businesses and corporations in four ways: Hawaii’s aquaculture industry is dominated by (1) they usually own the land that is used for cottage-industry farms that have limited finan­ cultivation; (2) they do not include the cost of cial resources. These producers believe that the labor when calculating the profitability of the example of large, short-lived aquaculture operation; (3) they primarily raise agriculture businesses has made it virtually impossible to products and only supplement their income with obtain expansion or operating capital from aquaculture crops; and (4) they tend to culture lenders. Larger businesses have the resources to more than one species. get capital from banks, investors, and state and A number of factors contribute to the costs of federal loan programs. They tend to operate for operating a commercial aquaculture farm. two or three years and then declare bankruptcy. During this survey we asked farmers to state The limited success rate of the large operations their highest production cost component. affects the availability of capital for the entire Although the major production costs vary aquaculture industry. A few producers have among farm size classes and species groups, received USDA Farmers Home Administration many farms reported that labor and feed loans. Small Business Innovative Research imposed a significant drain on their financial Grants, or State Department of Agriculture resources. The majority of corporations and Aquaculture Revolving Fund loans. Most cottage small businesses said that labor was their and small business farmers report that it is highest cost (Figure 15). The next highest extremely difficult to obtain capital for production cost commonly reported by corpora­ expansion from these sources, however. The tions and small businesses was feed. The lack of a financial resource base for these majority of cottage farms said that feed was operators may be limiting industry growth in their greatest cost. Hawaii. All the freshwater fish farmers and 58 Farm operators expressed an interest in percent of prawn farmers said feed was their forming an aquaculture trade association that major cost (Figure 16). These groups make up the could voice their problems and needs to the state majority of cottage farms and reflect the administration and legislators. Seventy-five responses of that size classification. The percent of the operators said they would be majority of shrimp farmers said that labor was willing to join this association. their highest production cost. With few exceptions, the majority of cultured 1 Order o f Importance reflects the number of times that an products produced in Hawaii are locally Item was cited.

13 Proportions of Farms that

FISH FISH PRIMARY SPECIES CULTURED FIGURE 14

The Number 1 Cost Item Reported by Size Classifications

m FEED

■ i labor I7 7 I ELECTRICITY q; R 50 -| E S 3 WATER EZZ3 LOANS

COTTAGE SMALL BUSINESS CORPORATION FARM SIZE CLASSIFICATIONS FIGURE 15

14 The Number 1 Cost Item Reported by Species Cultured

PRAWN SHRIMP FRESHWATER ALGAE ORNAMENTAL MISC FISH FISH

PRIMARY SPECIES CULTURED FIGURE 16

15 Shrimp, algae, and ornamental fish farmers tion of prawn PLs by AFRC was phased out in claim that current technological methods for December 1985. Private hatcheries had culturing their product result in high operating committed themselves to providing prawn post­ costs. Labor requirements, feed, and electricity larvae to commercial producers, and the state costs must be reduced in order to economically did not want to compete with the private sector. increase production of these products in Hawaii. Unfortunately, the private hatcheries either The most commonly requested extension/ ceased operations or stopped supplying post­ advisory services are (in order of importance) larvae less than one month after the state access to information on low-interest loan hatchery was scheduled to stop producing PLs. programs, access to technical information, Prawn farmers are now completely dependent marketing campaigns for certain species groups, on the state hatchery. Current policy restricts an extension service similar to the agriculture the state hatchery from guaranteeing postlarvae extension service, and a reliable source of availability for more than one year at a time. postlarvae. In 1986, prawn farmers did not expand their production capabilities, even though 50 percent of the prawn farms turned a profit in 1985 Individual Species Groups Cultured in Hawaii (Figure 14). Without assurance of PL avail­ The rest of this paper will concentrate on the ability, cottage-industry prawn farmers, who individual species groups. We will discuss the dominate this group (Figure 4), are unwilling to general approach to production, limitations on expand their production capabilities. The state production, extension/advisory service needs, needs either to develop a policy that guarantees and research needs of each species group. the availability of prawn postlarvae or to Prawn farming. The most common crop on establish a state hatchery revolving fund to aquaculture farms in Hawaii is the freshwater enable cottage-industry prawn farms to operate prawn, Macrobrachium rosenbergii. This is a and expand. direct result of the state’s program in the mid- Bird predation has also limited production 1970s to encourage farmers to culture prawns. on several prawn farms in Hawaii. Farmers During this period, the state supplied postlarvae, frequently mentioned that the night heron started an association of prawn farmers, and population had increased on their farms and provided extension services to new farmers. In was consuming large numbers of prawns. Some 1986, there were 15 freshwater prawn farms farmers also mentioned that tilapia, tadpoles, operating in Hawaii. Twelve of the 15 farm and human poachers were preying on postlarvae operators were interviewed; the location, species and adult prawns. cultured, and farm area of all 15 farms were Finally, many cottage farmers have been included in the survey results. unable to obtain capital for expansion from Many prawn farms are small (eight of 15 either state or federal loan programs or from have less than 1 acre underwater), own their own private lending institutions. Cottage-industry land (Figure 9), and have been in business for prawn farmers believe that large aquaculture eight or more years (Figure 5). Water is most businesses have given the industry a bad name. commonly diverted from freshwater streams (67 “They bring in large amounts of investment percent), although a few farms use well water. capital, operate for a year or two, and then they Prawns are cultured in earthen ponds in leave town." This practice has made it virtually Hawaii, and both extensive and semi-intensive impossible for small aquaculture farm owners management techniques are practiced (Figure 7). to get capital for expansion from lending The primary production cost is feed (Figure 16), institutions. Bankers have been unwilling to even though the price per pound for prawn feed is lend money to expand aquaculture farms lower than the feed costs for other species because of the high risk associated with this (Figure 11). industry. Farm owners claim that the major Farmers expressed the need for the following limitations on prawn production are (in order of extension/advisory services (in order of importance) availability of postlarvae, preda­ importance): an extension service similar to tion, and lack of capital for expansion. that provided for agriculture, a guaranteed The majority of prawn farmers report that supply of postlarvae, better communication the greatest limitation on production is the between farmers and wholesalers, and access to availability of postlarvae (PLs). Only three of the technical and loan availability information 15 prawn farmers produce their own PLs; the (e.g., an information service). rest depend on the state hatchery, the Anuenue Commercial operators report that extension Fisheries Research Center (AFRC). The produc­ services for prawn farmers are not as common 16 as they were in previous years, particularly on limited production and depressed revenues the neighbor islands. Several farmers suggested below a profitable margin. that an extension service program similar to the Shrimp farmers also felt that lack of USDA agriculture extension service was needed. available capital for expansion limited their At harvest time, larger farm owners need to ability to increase production levels and achieve know who is looking for prawns, and buyers economies of scale. In addition, some of the must be able to make their needs known. Many farms operating hatcheries reported difficulty prawn farmers requested greater access to in producing a consistent supply of postlarvae to technical information and an advisory service stock growout ponds. Finally, the effects of on loan availability. IHHN, particularly in P. stylirostris stocks, and Many farmers said that they had interacted the precautions necessary to ensure disease-free with extension agents from AFRC and had found stock, limited production on shrimp farms. them to be very helpful. Dr. James Brock (state Shrimp producers requested a variety of aquaculture veterinarian. Aquaculture Develop­ extension/advisory services (because of the ment Program) was often cited as being extreme­ limited number of responses, these are not listed ly helpful to farmers in diagnosing and treating in order of importance): assistance in develop­ diseases in prawn stocks. ing a more simplified permitting process, Prawn farm operators requested that future information on low-interest loan programs, a research funds be directed toward more applied marketing campaign for marine shrimp, problems. Research is needed in production (e.g., pesticide and water-quality analytical services, effects of density variations, feed quantities, and a reliable source of postlarvae (e.g., a state and aeration on yields), the effect of temperature hatchery). on growth rate, and improved harvesting All of the shrimp producers have interacted methods. extensively with Dr. James Brock regarding Marine shrimp farming. In 1986, there were disease problems in marine shrimp stocks. Most four marine shrimp farms operating in Hawaii farmers also mentioned that the Aquaculture (three commercial and one pilot) and two Development Program (Department of Land and planning to start operations in 1987 or 1988. All Natural Resources) had been helpful in provid­ producers were interviewed. Commercial ing information. shrimp farming is relatively new to the Marine shrimp producers requested that Hawaiian Islands, with the majority of farms future research funds be directed toward the having operated two years or less (Figure 5). following activities (because of the limited Three species are cultured commercially: number of responses, these are not listed in Penaeus vannamet, P. monodon, and P. order of importance): developing a better locally styltrostris. Most of the farms are large (x = produced feed, developing genetically superior 12.22 acres ± 4.77; Figure 10) and are owned by stock, disease control, and increasing produc­ corporations or limited partnerships (Figure 4). tion in extensive systems. All of the shrimp farms in Hawaii lease their Freshwater fish farming. The freshwater land (Figure 9) and use water pumped from fish that are cultured in Hawaii include rainbow brackish-water wells. trout (Salmo gairdnerQ, channel and Chinese In Hawaii, shrimp are cultured both in catfish [Ictalurus punctatus, Clarius spp.), and earthen ponds, using a semi-intensive manage­ grass, silver, and bighead carp C ( te n o - ment strategy, and in raceways, using a highly pharyngodon tdellus, Hypophthalmichthys intensive management strategy. Three of the molithrix, and Aristhichthys nohilis). four farms operate their own hatcheries. Ponds Tilapia were included in the miscellaneous are presently stocked two to three times a year. species group because commercial operators Marine shrimp producers listed the follow­ culturing tilapia use brackish or saltwater ing factors as limiting production (in order of sources. In 1986, there were eight freshwater fish importance): production costs (e.g., labor rates, farms operating in Hawaii. Seven of the eight feed, electricity), lack of capital for expansion, farm operators were interviewed; the location, inability to produce a consistent supply of species cultured, and area of all eight farms were postlarvae, and disease (i.e., IHHN virus). included in survey results. Although shrimp farms reported one of the All of the Hawaiian freshwater fish farms highest annual production rates, none of the are classified as cottage-industry farms (Figure farms made a profit in 1985 (Figure 14). The 4). The majority (75 percent) have less than one majority of these farms, however, were acre underwater (Figure 10), own their land operating at pilot scale during that year. High (Figure 9), and have been in operation for five or operating costs, mainly for labor and feed. more years. Freshwater fish are cultured in

17 earthen ponds, rock-bottom ponds, large following activities (because of the limited circular tanks, concrete tanks, and floating pens number of responses, these are not listed in or cages. All of these farms obtain their water order of importance): the causes and treatments from freshwater streams or springs. In the Hilo of fish disease, developing a better locally area on the island of Hawaii, several farmers produced feed, and applied research to lower culture trout in brackish-water, rock-bottom production costs. ponds. These ponds are tidally connected to the Algae farming. The following algal species saltwater table and receive a constant flow of are cultured commercially in Hawaii: freshwater from springs. macroalgae— Porphyra spp. and Gracilaria spp.; Freshwater fish farmers listed the following microalgae— Spirulina spp. and Dunaliella spp. factors as limiting production (in order of In 1986, there were four algae farms importance): feed costs, disease, predation, and a operating. Three of the four farm operators were lack of capital for expansion. interviewed; however, the location, species The majority of freshwater fish farmers cultured, and area of all four farms were expressed the need for a high-quality, low-cost included in survey results. In Hawaii, macro­ feed that is produced locally. All operators said algae are cultured in tanks and microalgae are that feed was their number one cost item (Figure cultured in raceways. All farmers use an 16). Disease is a major problem for freshwater intensive management strategy. This strategy fish farmers, especially in catfish culture. Some involves careful monitoring of water quality farms are losing up to 50 lb of fish each week to and addition of nutrients and carbon dioxide. disease. The exact cause of the disease is Most farms are small (Figure 10), are owned by unknown, but bacterial infections appear to be corporations or limited partnerships, and have responsible. Other limitations on production been in business for two years or less (Figure 5). include predation by birds (e.g., night herons) All algae producers planned to expand their and inaccessibility of capital for expansion. underwater acreage in 1987. Fish farmers echoed prawn farmers in stating Algae farmers listed the following factors as that the instability of large aquaculture limiting production (in order of importance): a businesses had made it impossible for small lack of capital for expansion, and production farm owners to obtain financing for facility costs. expansion. The initial financial investment involved in The following extension/advisory services setting up or expanding a raceway or tank were requested (in order of importance): a culture system is large. As a result, the limited marketing campaign for freshwater fish; greater capital available from state and federal loan access to loans and to technical, marketing, and programs has restricted the production processing information; and information on capabilities of these producers. High operating fish diseases and treatments. costs, primarily for nutrients and labor, limit One problem that nearly all farm owners production on algal farms. mentioned was the limited market for fresh­ Algae farmers expressed the need for the water fish. The tourist industry has promoted following extension/advisory services (because saltwater fish (e.g., mahimahi) for restaurant of the limited number of responses, these are not use and, as a result, has established a strong listed in order of importance): information on market for these fish. Both the local market and low-interest loan programs and bank loans for the tourist industry are uninformed regarding facility expansion, a marketing campaign for the freshwater fish cultured in this state. The macroalgae, and technical information (espe­ result has been a limited market, in spite of the cially on the neighbor islands). availability of high-quality, locally grown fish. Most algae farmers said that they had not In particular, trout farmers are affected both by interacted with the state’s aquaculture exten­ the limited market and by competition from sion/advisory groups. One producer reported lower-priced frozen trout shipped from the U.S. that the Aquaculture Development Program had mainland. A marketing campaign is needed to been very helpful in obtaining permits. inform consumers that locally grown, high- Some farmers indicated that a more applied quality fresh fish are available in Hawaii. approach to production-related problems was Most fish farmers frequently interact with needed in aquaculture research on algae. Dr. James Brock. Although Dr. Brock has been Ornamental fish farming. In 1986, there extremely helpful with the disease problem, were four ornamental fish farms in Hawaii. All producers requested future research in this area. producers were interviewed. The ornamental Freshwater fish farmers requested that fish cultured in Hawaii include koi (Cgprinus future research funds be directed toward the carpio) and a variety of freshwater tropicals.

18 The clientele for this species group includes farmer requested that future research funds be collectors of prize-winning koi for exhibition at directed toward disease control, nutrition and ornamental fish shows, hotels and shopping food sources, and reproduction. centers with garden pools for ornamentals, pet — Tilapia (Saroth.erod.on spp.). One operator or tropical fish stores, and individuals who have is currently culturing tilapia at high densities in public or private garden pools. Ornamental fish a raceway system. The farm owner reported that farms in Hawaii are cottage-industry farms the following factors were limiting his pro­ (Figure 4). The operators own the land (Figure 9) duction levels: a lack of automation in the and have less than one acre underwater (Figure production system, and government regulations 10). Ornamentals are cultured in concrete tanks (e.g., a lack of tax incentives). or glass aquariums and require intensive — Saltwater fish. A variety of saltwater fish management techniques. Many of these farms are cultured in an ancient Hawaiian fishpond on have been in business for nine or more years, the island of Oahu. The owner selectively stocks and 75 percent reported that they turned a profit his pond, removes predators, and occasionally in 1985. adds food to the pond. The limitations on The major limitations on production (in production are a lack of accessible markets and order of importance) of ornamental fish are feed a reliable source of fiy. The owner requested that costs and production costs. research efforts be directed toward developing Ornamental fish farmers expressed the need culture techniques for Samoan crabs. for a high-quality, low-cost feed that is produced — Abalone (Haliotis spp.). The major limita­ locally. Production costs were a major expense tion on production of abalone is the length of for this group. Electricity to pump water and au­ time to maturity. This farmer conducts his own to tanks was the highest cost for most producers research and did not have any requests for (Figure 16). assistance in this area. The following extension/advisory services were requested: information on low-interest loan programs and bank loans for expansion, information on fish diseases and nutrition, and more sites for aquaculture development, such as aquaculture parks. Most ornamental fish producers have interacted with Dr. James Brock regarding diseases associated with ornamental fish. However, growers rely primarily on Japanese expertise to control diseases in their fish stocks. LITERATURE CITED Ornamental fish producers requested that Fujimura, T., and H. Okamoto. 1970. Notes on future research funds be directed toward the progress made in developing a mass culturing following activities (because of the limited technique for Macrobrachium rosenbergii in number of responses, these are not listed in Hawaii. Indo-Pacific Fisheries Council, 14th order of importance): the causes and treatments Session. 17 pp. of fish diseases, developing a better locally Fujimura, T. 1974. Development of a prawn produced feed, and nutritional requirements of culture industry in Hawaii. Commercial ornamental fish. Fisheries Research and Development Act Job Culture of miscellaneous species. There are a Completion Report. 26 pp. few species that are cultured only at a single Kikuchi, William Kenji. 1973. Hawaiian farm in Hawaii. We will briefly mention the aquacultural system. Ph.D. dissertation, limitations on their production, the extension/ University of Arizona. 299 pp. advisory services requested, and research needs State of Hawaii. 1978. Aquaculture development of these farmers. for Hawaii. Department of Planning and — Bullfrog (Rana catesbeiana). Bullfrogs are Economic Development. 222 pp. cultured in covered raceways and concrete tanks State of Hawaii. 1984. Report of the governor’s on one farm. The limitations on production are aquaculture industry development commit­ disease, a lack of capital for expansion, and an tee. State of Hawaii. 64 pp. inability to obtain a reliable source of live food. Stem, Henrietta, and Lee J. Ure. 1984. An The extension/advisory services requested were assessment of the production and marketing information on low-interest loan programs and of aquaculture products in the western region bank loans for expansion, and technical of the United States. The West Coast Aqua­ information on feeding and reproduction. This culture Foundation. 144 pp.

19 20 APPENDIX I: OCEANIC INSTITUTE COMMERCIAL INDUSTRY QUESTIONNAIRE

July 17, 1986

INFORMATION FROM INDIVIDUAL FARMS WILL BE KEPT CONFIDENTIAL, AND ONLY SUMMARY INFORMATION WILL BE REPORTED TO USDA.

A. Name of facility B. Location C. Species cultured D. Are you planning to change the species you are culturing or start culturing additional species? E. Facility size 1. Ponds a. Nursery # size b. Growout # size 2. Raceways # size 3. Tanks/troughs a. # size # ______size b. Hatchery # size c. Growout # size Total farm area ______F. State of development 1. R & D ______Pilot ______C o m m e rc ia l______2. Years in business ______G. Employment Full-time Part-time Seasonal 1. No. employees ______2. Types of positions a. T e c h n ic ia n s ______b. M a n a g e r s ______c. O t h e r ______H. Ownership 1. Business a. Family/individual______b. Limited partnership ______c. C o r p o ra te ______2. Land a. R e n t ___ b. L e a s e ______How lo n g ? ___ c. O w n ______I. Fry/postlarvae supplier Are you dependent on a fry supplier? Yes No___ J. Hatchery 1. Do you operate a hatchery? ______2. Monthly PL production? ______3. How many PLs do you sell a year?______4. P r i c e / 1000 K. Operating system 1. Extensive (e.g., ponds are large, seminatural systems with little daily management required— low stocking densities and little to no feeding or water exchange) Semi-intensive (e.g., ponds are designed to allow predator control, harvest, and low- level management of oxygen level and plankton density— moderate stocking densities, feeding, and water exchange)

21 Intensive (e.g., ponds or raceways are small and designed for maximum control of water quality and oxygen levels— high stocking densities, nutritionally complete diets, high water circulation or exchange) 2. Open/flow-through ______R e c y c le ______Closed/semiclosed ______3. M o n o c u ltu re ______Polyculture______Varies seasonally ______4. Aeration ______h o u rs / d a y______L. Water resource 1. S t r e a m ______2. W ell ______#______size 3. Direct ocean intake ______4. Salinity (in pond) ______at in flo w ______5. Is water readily available? Yes No ______If no, why (e.g., cost or regulations)?______6. Volume pumped/day ______M. Effluent discharge 1. Injection w e ll ______2. Oxidation/settling pond ______3. Direct discharge ______S t r e a m ______O c e a n ______4. Discharge/day______N. Feeds 1. Local supply ______2. Im p o r te d______3. Average price/lb in 1986 ______O. Production 1. Did you make money in 1985? Yes ______No ______

2. 1985 production What units? Gross market 1986 estimate value $ Postlarvae Market-sized adults Broodstock Other products Total 3. Production per acre for each species 4. How do these production figures compare with those of your competitors? 5. In what form do you sell your product? a. W h o l e ______F ille t e d______Shucked ______P e e le d______Other ______b . L i v e ______F r e s h ______Frozen ______IQF ______6. What are the current limitations on production? a. Facility s i z e ______b. Expansion capital ______c. Lack of hands-on experience ______d. Lack of technical information ______e. Costs of production (what is your major cost?) ______

22 f. Lack of profitable, accessible markets ______g. Available feeds or cost of feed______h. Disease ______i. P r e d a to r s______j. O t h e r ______7. Are you interested in Joining an aquaculture association, which will serve as (1) a collective voice to present industry concerns to the administration and legislature, and (2) a forum for exchange of ideas and information? 8. What (if any) outside extension/advisory services would help improve your production levels? 9. What types of research would help improve your production levels? (e.g., reproduction, culture methods, disease, nutrition, farm management, product handling, etc.) 10. What interaction have you had with the research institutions in Hawaii in conducting your aquaculture business? What role should these institutions play in aquaculture development? P. Marketing 1. Major markets served (%) a. L o c a l ______b. In state ______c. Western region ______d. National e. In te r n a tio n a l______2. Sales channel a. B r o k e r ______b. W holesaler ______c. D i r e c t ______d. Other ______3. Who decides the selling price? 4. What factors influence price variations? 5. Do you sell everything you produce? 6. Does the supply satisfy the demand for your product? 7. What are the major marketing problems you face? (barriers to increased sales) a. Locating customers ______b. Market s a tu ra tio n ______c. Low prices ______d. Coordinating peak production and demand______e. Supplying product consistently year-round______f. Foreign co m p etitio n ______g. Other competition ______h. Customer unfamiliar with product ______i. Insufficient funds for marketing campaign______j. Quality control ______k. P a c k a g in g ______1. Processing_____ m. Handling/distribution techniques of customer______n. Government regulations ______o. O t h e r ______8. Ideas to solve marketing problems/improve and expand sales? 9. What (if any) outside extension/advisory services would help improve your marketing techniques and increase sales?

23 24 DISCLAIMER Reference to a company or product name does not imply approval or recommendation of the product by the College of Tropical Agriculture and Human Resources, University of Hawaii, or the United States Depart­ ment of Agriculture to the exclusion of others that may be suitable. Hawaii Agricultural Experiment Station HITAHR, College of Tropical Agriculture and Human Resources, University of Hawaii at Manoa Noel P. Kefford, Director and Dean INFORMATION TEXT SERIES 031—03.88 (1M)