Spatial Planning of Aquaculture, Finnish Archipelago Sea As a Case Jari Setälä*1, Timo Mäkinen1, Markus Kankainen1, Pekka Salmi1, Ville Tarkki1 & Timo Halonen2

ICES CM 2012/Q:02

Not to be cited without prior reference to the authors

Spatial planning of aquaculture, Finnish Archipelago Sea as a case Jari Setälä*1, Timo Mäkinen1, Markus Kankainen1, Pekka Salmi1, Ville Tarkki1 & Timo Halonen2

Abstract

The consumption of fresh salmon fish has been steadily growing in Finland during the last decades. Since 1980s, the supply of farmed rainbow trout has complemented the declined fish supply by the capture fisheries. However, the rigid environmental permit system and increased summer dwelling in the Archipelago Sea have contributed to a decline of Finnish aquaculture production. At the same time import of Norwegian salmon has grown substituting the domestic fish products on market, and the self-sufficiency of fish has collapsed in Finland.

In this situation the fishery authorities backed by the EU´s CFP have tried to find new ways to get the livelihood into a new growth. Spatial planning has been launched as a tool to find a way to stop the practical moratorium of developing new fish farms and to find new areas for the production in the Finnish coastal area of the Baltic Sea. The process of balancing the environmental target with economic and cultural dimensions of sustainability is described and the outlook of success is discussed. The vested interests of stakeholders manifested in the permission procedures, in the practices of planning groups and in selections made during the organization and realizing of their tasks, are discussed.

The recent development in other Baltic countries is referred to discuss the differences in weightings of the goals in similar regions in neighbouring countries.

Keywords: Baltic Sea, Rainbow trout farming, sustainability, spatial planning

Introduction

The world supply of the fish for human consumption has been growing steadily during last decades reaching almost 120 million tons. Almost half of this amount was produced by aquaculture (FAO 2010). The outlook for the next decade is showing no growth in fish captures to direct human consumption. The fish production from aquaculture, however, is predicted to grow evenly and fast. The amount of the cultured fish is reaching and exceeding the amount of the fish caught in present years (Vannucini 2011). In the area of the European Union the share of fishing of the fish consumed has been decreasing since the middle of 1990´s. The total consumption of fish in 27 EU countries was reaching 9 500 thousand tons in

1 *Contact author: Jari Setälä, Address: Finnish Game and Fisheries institute, Itäinen pitkäkatu 3, 21520 Turku, Finland Phone: +358 40 5308 103 E-mail: [email protected]

2 Ministry of agriculture and forestry, P.O.Box 30, 00023 Valtioneuvosto, Finland

2007 meanwhile the amount of fish caught by these countries remained at the level of under 5 500 thousand tons (European Environment Agency 2011).

Like in other European countries, in Finland, too, the demand of fish has been increasing fast. In less than ten years the gross value of fish products on the Finnish market has grown 2.5 times meanwhile other food products has grown only about 20% (Statistics Finland 2010). During the last decade the import of fish has grown rapidly. Today, in Finland like in other EU-countries less than one third of the fish on the market is domestic.

The Finnish aquaculture has not been able to supply the growing demand. In the contrary, its production has been decreasing since the beginning of the 1990´s. The main reasons for this recession has been tightening international competition on the fish market and declining production permits due to the environmental restrictions. (Figure 1, FGFRI).

Real value

Sea

Production, million kg million Production, Value, million € million Value,

Inland waters

Figure 1. Food fish production (ungutted fish, million kg) and its value (million euro) in 1980–2010, at 2010 prices level (adjusted by consumer price index).

Because of the dilemma of increasing demand and with decreasing production the Finnish fishery authorities have prepared a national aquaculture program in close co-operation with the industry and environmental authorities. The program includes a set of new measures to turn the negative trend of the aquaculture industry and enable sustainable growth of the industry. One of the main actions in the 2

program is to prepare a site selection plan for the aquaculture. This plan shows the water areas, where fish farmers can concentrate their present production or locate new fish farm units.

The purpose of this paper is to describe the spatial planning of aquaculture in Finland and to discuss how it is succeeding in trying to get the different sides of the sustainability to become fulfilled in the future.

Regulation of fish farming

Fish farmer needs in Finland a permit for his activity. The regulation of fish farming is first of all in the hands of environmental authorities, which decide over the environmental permits for each fish farming site. The Ministry of the Environment is the highest environmental authority. There are national guidelines accepted by the government on water protection as well as on aquaculture which are directing the authorities when considering the single applications for the permits. The implementation of environmental regulations and policies is delegated to the Regional centers for economic development, transport and the environment Permits for aquaculture are granted by the Regional State Administrative Agencies.

When the fish farmer has right to use a certain water area, the fish farmers leave an application to the Regional state administrative agency for a fish farming site. The permits are granted for a limited time period and must be renewed usually after five-seven years farming. The permits include various conditions for the farmer: for instance a maximum allowable amount of feed to be used is calculated according to the nutrient loading. From the economic point of view the fish farming licensing system is a pure production volume regulation system. The eutrophication of the Baltic Sea has been a major concern of environmental authorities during the latest two decades. Thus, the main action to prevent eutrophication has been to decrease nutrition loading from various sources, especially from industry, communities and fish farming, which are regulated with environmental permits. Agriculture and disperse loading have been more difficult to manage although their share of the overall nutrition loading is dominant. So far this policy has continuously led to reduction of the aquaculture farming unit sizes. This happened in spite of the fact that the fish farming industry has succeeded in decreasing its nutrition loading 70 percent from the beginning of early 90’s. Today the share of nutrition load of aquaculture is only 1-3 percent of the total load in the main aquaculture production area, the Archipelago Sea. The unit size limitations weaken the fish farmers’ profitability due to the loss of economics of scale. At the same time the international competition in the fish market has tighten due to globalization. Therefore, the fish farming industry in Finland has rapidly consolidated. The growing enterprises have bought production permits from those fish farmers, which are not big enough to manage in the international competition. Nowadays most of the fish farming companies have 7 - 12 small production units dispersed in the Archipelago, which is not at all an optimal structure for rational production. The biggest Finnish entrepreneurs have redeployed their fish farms to Sweden because of more flexible terms of the production permits.

Figure 1. Fish farming units in the South-West Finland. The units of the same entrepreneur are inside the closed lines.

Finnish fishery authorities have been worried about the development and started a close co-operation with the industry and environmental authorities to find sustainable solution to develop Finnish fish farming.

Existing marine areal planning in Finland

In the Baltic Sea case study area there are a number of legal instruments and policies that relate to the spatial planning. In the last few years, Finland has reformed its land use planning system. However, the planning of the sea areas using the land use planning tools still is in the start-up phase. There is no holistic marine spatial planning approach in Finland as yet; however some management has started on sectoral basis.

The process of creating the aquaculture site selection plan for South-West Finland

Ministry of Agriculture and Forestry established a development group for aquaculture in 2008. The group prepared national development program for the sector. The group were led by the Ministry of Agriculture and Forestry and the groups consisted of representatives from the key interest groups including industry, research and environmental and fisheries administration.

The national aquaculture program 2015 was prepared by the ministry and adopted as a Government's resolution in 2009. The program defines strategic guidelines and concrete measures to develop the Finnish aquaculture industry and its environmental protection. An important measure is to draw up regional aquaculture site selection plans in order to identify suitable areas for fish farming with as little environmental impacts as possible. The national development group formulated and accepted the criteria for identifying suitable water areas. Thereafter, the Ministry of Agriculture and Forestry mandated the regional fisheries administration to prepare regional aquaculture site selection plans. Finnish Game and Fisheries Research Institute (FGFRI) contributed the process by providing expertise help in mapping (GIS tools). The regional plans were prepared in broadly-based working groups including experts from regional aquaculture industry, fisheries and environmental administration and research institutes. The regional plan for the South-West Finland was prepared in working group consisting of 23 representatives from the fishing and aquaculture industry, regional planning, fishery and environmental authorities and FGFRI. The environmental authorities represented nature protection, water quality monitoring, fish farming inspecting and regional spatial planning of land and water use. FGFRI’s researches provided information and illustrative maps to working group. Experts outside the group were heard in several meetings. The working group had altogether 11 meetings and the plan was completed in 2011. The plan identifies water areas, in which the farmers can concentrate their present production and in which it is possible to start new production.

The site selection plan in the South-West Finland

The national development group for aquaculture harmonized the environmental and economic policies and prepared the following criteria to be used in identifying suitable water areas for new fish farms:

 The water area is suitable for aquaculture and for the regional socioeconomic needs

 The ecological state of the water area is at least good and will not worsen as a consequence of aquaculture nutrient loading  The area lies in the vicinity of open sea, outer archipelago or near an open sea area or in the inner areas of the archipelago, the place must be with good water flow and exchange rate  The area is deep enough, with good water flow and good loading dispersal  In the vicinity of the farm there is no remarkably leisure time dwelling or any other present use of the water area which could be harmed by the farming  The areas not any more intact (like wind parks) are especially taken into account. Water areas, which are heavily influenced by human activities should be prioritized  There exists the infrastructure necessary for the aquaculture  In the case of concentration of present fish farming units, the benefits in the areas from which aquaculture units are moved to better place should be taken into account in the planning

In the national aquaculture program it is stated that new fish farms should be established in the areas, which are suitable for fish farming and tolerate the nutrient loading well and where the farms disturb other users of the sea areas as little as possible. The goal of the Water Framework directive is that the ecological state of the most of the Finnish water areas should be at least good in 2015. Therefore, in these areas the ecological status of the area should be at least good. New production shall not risk ecological good status of the water area. In the open sea area with good water exchange rate and excellent water quality the farms may be much bigger than usual in SW-Finland’s sea area. In the areas where the ecological state of the water area is poorer than good, like in the Archipelago Sea, the loading from fish farms are not allowed to increase. However, the existing farms may merge their small units to bigger fish farms in the water areas identified suitable in the site selection plan.

The identification of suitable areas for aquaculture was done in the regional working group of South-West Finland. The representatives of the group analyzed various background information from the fish farming and status of water areas and sea bottoms and, after discussions, used a conflict avoiding approach to apply the criteria. Most of the sensitive water areas identified suitable for fish farming were excluded. The national criteria were operationalized in the South-West Finland using the following steps:

1. Areas with a water depth of less than 10 meters were excluded 2. A buffer zone of 500 meters were applied around the summer houses 3. The shipping and boating routes and their buffers were avoided 4. A hundred meters buffer zone was applied around protected ship wracks 5. A hundred meter buffer zone was applied around the known herring spawning grounds 6. New aquaculture production was not directed into national parks 7. New aquaculture production was not directed to areas with a water depth of less than 20 m in the Natura-areas, if there are protected reefs or sand banks in the Natura-area (SCI sites/Habitat Directive), 8. A 500 meters buffer zone was applied during the nesting time around protected bird islands in the bird NATURA-areas (SPA sites/Bird Directive)

The identified water areas are presented in the figure 2. The green area in the Archipelago Sea has an ecological state of satisfactory. Thus, in that area the present aquaculture units can be merged into bigger units. In the Bothnian Sea, the ecological status is good. There new fish farms can be directed to water areas marked with blue or violet. Large units can be localized in the violet areas, which are deep and in the open sea area. As consequence of buffer zones the most of the sensitive water areas were excluded from the identified suitable water areas for fish farming. For example, the depth buffer zone excluded areas, which are most important for fish spawning and the benthic fauna.

Figure 2. The areas recognized suitable for aquaculture in SW-Finland sea areas.

Impact assessment

Sustainable production volume in determined areas The production volume and loading should in line with the capacity of the specific site. Therefore we interviewed the local aquaculture enterprises and evaluated first the impacts of the preliminary merging plans of the companies (Figure 3).

Figure 3. Merging of aquaculture units to larger farms in the Archipelago Sea. Blue dots are farms, which will be moved to places with red dots with circles. The red dots without circles are remaining present fish farms.

An ecological water quality model was applied to calculate how the algae concentration changes in the different parts of the Archipelago Sea. The preliminary plans of the companies were used for this evaluation. The transfer from present situation with several small production units to one with bigger units in identified water areas means that the loading in sensitive inner parts of the archipelago will decrease, and loading in the outer part of the archipelago will increase around the selected sites (Figure 4).

The modeled sites were suggested by fish farmers, and the production amount of fish in these new sites varied from 100-300 tons per site. According to the modeling the merging operations of the companies can be realized without a substantial increase of algae concentration. This is a significant result while the increase in the algae concentration has been considered as the main negative impact on the environment caused by fish farming. According to water quality experts the increase of 4 percent is an acceptable change because it is assessed that a change of this amount is very hard to be detected by measurements or noticed on the field. The increase of algae concentration does not exceed this value in any of the places. In the second phase the modeling was expanded to the whole Archipelago Sea with the same criteria. According to the results up to 400-600 tons production units can be placed in the outer archipelago and 200-400 tons units in the deeper parts of the central archipelago. Thus, the last season rearing of food fish should not be directed into the inner part of the Archipelago.

Figure 4. The algae density will increase around the production merging areas (yellow areas) and decrease in the archipelago areas from which smaller units are transferred to these places. The percentual change in the algae concentration is shown with different colors in the legend.

Economic gains of implementing the merging plans Competitive advantage would improve in all companies’ plans, if all of present units production volumes are allowed to be transferred to merging sites. This is rather important for companies and invested capital

shareholders to have incentive to commit to such time demanding and expensive spatial plan processes. If higher profit is available elsewhere with less risk and work the capital will be invested to there. In micro analysis we developed and used operational research model (e.g .Gunasekaren et al. 2000, Coelli et al. 2005) to evaluate the logistics cost effects on production costs. Production economic efficiency effecting parameters varied between companies. The cost benefits depend of the present company infrastructure, business operations and techniques, present and new site locations and attached production volumes (Vielma & Kankainen 2012). When several dispersed units are moved to better location logistic gains arise from distance depended cost factors. Such variable cost factors are e.g. fuel costs or labor time. However, in some of the case companies majority of the saving arise from capital savings from saved investments like boats and infrastructure, maintenance and site specific obligations and costs such as rents and monitoring and permit costs. These site specific cost factors are avoided when less units and maintenance harbors are needed. Decrease in production cost varied between 0,14 €/kg and 0,47 €/kg produced gutted rainbow trout mainly due to improved logistic factors. This productivity gain may encourage many companies to consider investments to new farming equipment. Thereby the livelihood may have continuance also in the Archipelago Sea. Macroeconomics, areal effects, was estimated through production value and employment. With present trend, without spatial planning, production was estimated to decrease in Archipelago Sea around 1000 ton, one third of the present production. There are three major reasons why production would decrease: first, new investment cannot be made with present production cost and profit structure. Without renewal the old equipment will be ruined which will make the production impossible. Secondly, some of the sites are located in places where retiring entrepreneurs do not want to sell the sites rental rights although they may be willing to sell the production permit. Thus, if transferring of the production permit is not possible, some of the production volume will be lost. Thirdly, Environmental permits have so far usually by every renewal period diminished the present site’s production volumes because some of them are located in the inner archipelago where loading is considered more harmful. Employment rates would remain about the same in the Archipelago Sea if the production can be saved with spatial plans. Some decrease in man months could happen while work productivity increase with more efficient production. Employment increase would happen only if larger production permits would be allowed in the Archipelago Sea.

Social benefits Concentration of fish farming units to fewer locations has many benefits. The main reasons why summer dwellers complain of the units, are the visual impact on the sceneries and the eutrophication caused by nutrient emission. With the concentration plans of the companies in the Archipelago Sea the amount of units decreases over 60 percent in the enterprises (Figure 4 and table 1). There are over 80 percent less leisure estates in the 500 meters impact areas of the units. Thus, the social harms and conflicts with summer cottage owners will likely decrease substantially.

Table 1. The change in the number of leisure estates in the vicinity of the fish farms in the case that production is merged to form less and larger units.

Effects on the Present After Change recreational use Number of farms 43 17 61 % Leisure estates inside 215 32 83 % the 500 m circle 1000 m circle 947 284 68 % 2000 m circle 2958 1100 60 %

The outlooks for the aquaculture in the other Finnish Baltic Sea areas According to the site selection plan the aquaculture production will be allowed to grow in the Bothnian Sea. However, most of the identified growth areas there were at open-sea area. At present there are no technical or economic prerequisites to start fish farming in the open sea in Finland. Long-term research and development activities are needed prior the aquaculture production would be profitable in open Baltic Sea conditions. There are several plans for wind power parks along the coastal area of the Gulf of Bothnia. There might be synergies between wind power industry and aquaculture, which need to be investigated in the future. Beneath the open-sea locations there are, however, some opportunities for the short-term production increase at the coast of the Bothnian Sea. It was identified a few potential sheltered places which would be appropriate for starting new fish farms with present techniques and know-how (Figure 5). Based on enterprise interviews in the Northern Archipelago Sea and Gulf of Bothnia it was estimated that there is interest for investment by the companies for at least 2 million kilos production in four 500 tons units in the identified areas. Most of them are located in the southern part of the Bothnian Sea, and a large share of those waters is in the NATURA-areas that may require time spending and expensive additional environmental impact assessment of the effects on the NATURA values.

Figure 5. Potential places to start fish farms with present technology in the Finnish Bothnian Bay coastal area.

Discussion

Fish farming in South-West Finland has been diminishing due to the rigid environmental constrains. The present small dispersed units are not competitive compared to competitors in other main producer countries like Norway. Small enterprises have been forced to close down their business or sell their units to growing companies. In addition, big enterprises have been moving their activities to Sweden, where much higher annual production permits are possible. The number of fish farms and the value of food fish production is nowadays only half of that in the beginning of 90s. This disastrous development will continue, if new supportive activities, like the aquaculture site selection plan presented in this paper, are not applied. This kind of development would endanger the objectives of the Baltic Sea protection regarding the effects of aquaculture and the conflicts with the recreational use would continue.

The success of aquaculture localization planning is highly depending on the acceptability of the plan. The plan in South-West Finland was prepared in keen co-operation with environmental experts and industry representants in order to achieve a widely accepted result. A conflict avoiding approach was applied by excluding the sensitive water areas. This approach is appropriate in sensitive decision-making where highly diverging opinions will be settled. In the case of aquaculture site selection plan, it meant that rather few water areas were identified suitable for fish farming and these areas were not the best ones from the production economy point of view. An alternative approach would have been that the environmental or social harms had been weighted against economic benefits. Thereby more potential production areas had been found, but arising new conflicts would certainly risk the acceptability and implementation procedure of the plan.

The acceptability is partly secured by official announcement procedures. The legislation includes a general obligation for the authorities to assess the impacts of plans and detailed procedural and content requirements for the assessment. The authority responsible for the plan is responsible for the environmental assessment, too. The Ministry of Agriculture and Forestry compiled a national aquaculture site selection plan based on the regional plans. A comprehensive impact evaluation of the national plan will be carried out. The plan and impact assessment report will be set to public notice. Finally, the national plan will be adopted by the mutual decision of the Ministry of Agriculture and Forestry and the Ministry of environment.

Furthermore, the interpretation of the plan in the permit procedure and on the environmental protection guidelines will have an essential importance in the practical implementation of the plan. Parallel with the process of aquaculture site selection plan, an environmental protection guideline for aquaculture was prepared by a working group. Purpose of this guideline is to streamline environmental permit procedures and to define best practices in aquaculture. This guideline defines also how the national site selection plan should be taken into account in the permit process. The environment protection act should be revised. At the moment this legislation does not recognize or fully enable new opportunities to develop environmental sustainability with new approaches like for instance marine spatial planning or nutrient recycling. Until all the legislative details and interpretation guidelines are complete, the entrepreneurs may not be able to implement these new sustainable production methods.

To reach an optimal solution to increase different stakeholders’ combined wellbeing, one has to consider in a balanced way different water users harms and gains. It is uncertain whether fish farmers will adopt the policy of more open sites with more expensive production technology or if they will move their production 13

in Sweden instead. Moreover, it is uncertain, if the public opinion or recreational user in Finland will accept new bigger off-shore fish farms as sustainable and supportable. In spite of these uncertainties the site selection plan seems to be during the last two decades the most promising initiative to turn the downward trend in The Finnish aquaculture and support the self-sufficiency of fish in Finland.

References

Coelli, T. J., Rao, P. D. S., O´Donnel, C. J., Battese, G. E. 2005 An Introduction to efficiency and productivity analysis, second edition Springer, USA

European Environment Agency (EEA) 2011. Comparison of total EU fish catches and consumption 2011. (Available at: http://www.eea.europa.eu/data-and-maps/figures/comparison-of-total-eu- fish, referred 13th March 2012)

FAO 2010. The State of world fisheries and aquaculture. FAO Fisheries and Aquaculture department. Food and Agriculture organization of the United Nations. Rome 2010. 218 p.

Gunasakaren, A., Macbeth, D. K., Lamming, R., (2000) Modelling and analysis of supply chain management systems : an editorial overview : Modelling and analysis in supply chain management systems, Vol 51, The Journal of the Operational Research Society.

Statistics Finland 2010. Regional and industrial statistics on manufacturing 2009.

Vannucini, S. 2011. Powerpoint presentation based on: OECD/Food and Agriculture Organization of the United Nations (2011), OECD-FAO Agricultural Outlook 2011, OECD Publishing.

Vielma, J. & Kankainen, M. 2012. Kalankasvatuksen tekniikka ulkosaaristossa ja avomerellä, (Techniques for fish farming in offshore and outer archipelago of Finland, in Finnish, manuscript in prep.), Kala- ja riistaraportteja.