3. the Alaska Salmon Industry

Observations on the Future of Aquaculture

Gunnar Knapp Director and Professor of Economics Institute of Social and Economic Research University of Alaska Anchorage [email protected]

BC Seafood Expo and Workshops Industry Workshop Series Courtenay, British Columbia

June 14, 2015 Briefly about myself

• Born in and grew up near Washington, DC • PhD in Economics from Yale University, 1981 • Moved to Alaska in 1981 to work at University of Alaska Anchorage Institute of Social and Economic Research (ISER) • Most of my career spent studying: – Markets for salmon and other species – Alaska fisheries management – Alaska and world seafood industry – Alaska economy • Director of Institute of Social and Economic Research since 2013 Why Aquaculture? The big picture

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast World Population Growth > 7 Billion 9 Billion in 2050

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast Need for More Seafood

• Worldwide, consumption of fish has doubled since 1973 • One in five people depend on fish for their primary source of protein … especially in developing worlds. • Global seafood demand rising 7-9% per year • There will be a demand for an additional 40 million tonnes of seafood by 2030.

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast 70% of world’s surface is ocean

Less than 4% of food production comes from oceans

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast Aquaculture is critical to future fish supply

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast The Critical Choice for Canada • 50% of the seafood sold in Canada and worldwide is now farmed. By 2030, 62% of all seafood will be farmed. • Aquaculture will be essential to global food security • With this strong demand for seafood growing annually, will Canada meet the future demand with imports - or will Canada reassert its leadership and grow?

That is the choice we as a country face

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast Canadian Aquaculture Industry Today Occurs in every province  $3.1 Billion  1/3 value of Fisheries production 14,500 employed

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast Context: 12 years of stagnated growth

Aquaculture production has stagnated over the past 12 years

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast Context: Falling behind key competitors

Canada has experienced a 47% loss in global market share since 2002

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast It just makes sense to continue developing aquaculture in Canada, and to keep doing it better and more efficiently – to ensure a sustainable seafood supply for generations to come. - Dr. Patrick Moore

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast WHAT DRIVES AQUACULTURE GROWTH? For the past two decades, all of the growth in world fish production has come from aquaculture

Million tonnes

Source: Figure prepared by Dr. Frank Asche, University of Stavanger, Norway World aquaculture production has risen extremely rapidly! What will drive whether this growth continues?

Million tonnes

Source: Figure prepared by Dr. Frank Asche, University of Stavanger, Norway Both production and prices depends on both supply and demand. ECONOMICS

Production and prices Supply Demand have to be at levels at which

SUPPLY = DEMAND

buyers are willing to buy the volumes producers are willing to sell

Economists buyers are willing to pay the prices producers are willing to sell for Two ways of thinking about supply and demand

Volume for Price for a given price a given volume

The volumes The prices Supply producers will produce producers need at different prices for different volumes

The volumes The prices Demand consumers will buy consumers will pay at difference prices for different volumes Growth in aquaculture production depends on growth in both demand and supply

• If demand doesn’t grow: – Increasing production will lower prices until producers are unwilling to produce any more

• If supply doesn’t grow: – Increasing demand will raise prices until consumers are unwilling to buy any more Systematic innovation has been a critical driving factor in the growth of aquaculture

• Ability to control production enables R&D and innovation in aquaculture – This is a fundamental and critical difference between aquaculture and wild fisheries!

• Innovation occurs throughout the aquaculture value chain: – Production – Products – Supply chain systems

• Innovation leads to: – Supply growth, by lowering costs – Demand growth, by creating new kinds of products There has been tremendous growth in farmed salmon production and consumption. This growth was driven by growth in both supply and demand Drivers of the global farmed salmon industry

• Growth in SUPPLY – More countries – Lower costs • Innovation • Economies of scale • Growth in DEMAND – More countries – More product forms – More retail and food service outlets – More kinds of consumers

21 Automated feeding systems are one of numerous technological advances in salmon farming that have lowered costs. Technological advances and economies of scale dramatically reduced the cost of salmon farming over the past 20 years.

Norwegian Salmon Farming Cost of Production

80.0

70.0

60.0

50.0

40.0

NOK/kg 30.0

20.0

10.0

0.0

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 Tremendous growth in world salmon suppply was enabled by equally tremendous growth in demand.

Norwegian salmon export price and production 1985-2011

Source: Figure prepared by Dr. Frank Asche, University of Stavanger, Norway Mechanisms of expanding demand

• Growing populations • Growing incomes • Development of new geographic markets – USA, eastern Europe, China, Latin American • Placement of products in new types of stores – Supermarkets • Development of new products for more market segments – Skinless-boneless fillets – Meals Projections of future population and income growth

Population growth 9 2007 2030 8 Fish Demand (mt)

World (baseline) (projection) Billion 7 Africa 6 Asia 5 Europe Africa 9.0 18.7 4 L.A. & C. 3 Asia 86.4 186.3 2 N. America 1 Oceania Europe 19.4 23.4 - 1980 1990 2000 2010 2020 2030 L.A. & C. 15.2 18.3 Growth of GDP per capita: 2010-2020 Northern A. 9.1 12.9 8.0 Oceania 1.1 1.8 6.0 % 4.0 World 140.3 261.2 2.0 0.0 Source: Estimation of FI Department Africa Asia Europe L.A. & C. N. America Oceania World

Source: Rohana Subasinghe (FAO), The Future of Global Seafood: Supply, Demand and Prospects, presentation at Bay of Fundy Seafood Week-The Seafood Forum, St. Andrews, New Brunswick, Canada, June 4, 2014. Development of new geographic markets . . .

Source: ABG Sundal Collier, June 2012, as used in a presentation by Aquachile 27 Diversification of Norwegian salmon markets

28 Diversification of Chilean salmon markets

29 Farmed salmon in Poland

Salmon fillet Farmed salmon in Dubai

31 New product forms . . .

United States Farmed Salmon Imports

250,000

200,000

150,000 Fillets, Steaks or Portions

100,000

1000 metric tons Other (mostly head-off gutted) 50,000

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Salmon farmers have driven continuous innovation of farmed salmon products—from whole fish to fillets to packaged value-added products. Use of salmon as an ingredient in other products offers tremendous opportunity for demand growth which is inelastic (non-price sensitive).

34 A critical challenge for aquaculture

-- for the global industry -- for any given species -- for any given region -- for any given company

How to grow markets so that production can increase without lowering prices? Marketing is critical for successful aquaculture growth.

-- Understanding what markets want -- Producing what markets need

It’s not just about growing fish. It’s about:

Product forms, packaging, consistency, quality, safety, sustainability, traceability, reliability . . . IS AQUACULTURE BAD FOR WILD FISHERIES? Is aquaculture bad for wild fisheries?

Not necessarily.

Aquaculture competes with wild fisheries. But competition can be good for both producers and consumers.

The effects of salmon farming on the Alaska wild salmon industry illustrates how over time aquaculture can benefit wild fisheries. Alaska is the world’s largest producer of wild salmon.

World Salmon Supply: Wild and Farmed 3,500

Sources: Alaska data from Alaska Commercial Fisheries Entry Commission and 3,000 Alaska Department of Fish and Game; other Farmed data from National Marine Fisheries Service trout and FAO FishStatJ database. Farmed trout includes rainbow trout farmed in saltwater. 2,500

Farmed 2,000 salmon

1,500 Other

thousand metric tons wild 1,000 salmon

500 Alaska salmon

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 How has salmon farming affected the Alaska wild salmon industry?

POPULAR / GREEN / ALASKAN PERSPECTIVE:

Unfairly subsidized and inferior farmed salmon harmed the environment and wild stocks in producing nations, and flooded world markets, depressing wild salmon prices and harming Alaska fishermen and fishing communities. Prices have recovered. as consumers recognize the superiority of wild salmon. How has salmon farming affected the Alaska wild salmon industry?

AN ECONOMIC PERSPECTIVE:

Salmon farming exposed a “natural” monopoly to competition, benefiting consumers by expanding availability, lowering prices, spurring innovation and product and market development. Over time, competition had led to a more efficient wild salmon industry more focused on meeting market demands, providing better products to broader markets, and benefitting from rising demand and prices. Ex-vessel prices for Alaska salmon fell drastically in 1990s but have rebounded dramatically since 2002

42 Before salmon farming, Alaska wild salmon enjoyed a natural monopoly.

• Prices were high • Costs were high • Relatively little effort was devoted to: – Quality enhancement – Marketing – Innovation High costs

Photographs by Bart Eaton Lack of focus on quality

Bruises in a Yukon River chum salmon fillet Lack of focus on quality

Fishermen focused on catching fish Bruising as fish are caught in and fast rather than handling them well removed from gillnets What happens when a monopoly faces competition?

• Initially: – prices fall as the competitor lowers prices and production expands – The monopolist’s profits fall – The monopolist may become unprofitable • Over time, in order to survive, the monopolist changes: – Lowers costs – Improves quality – Becomes more market focused – Innovates • Consumers benefit • Demand expands as the product improves • Prices may recover partially or fully Norwegian Salmon Farming Cost of Production

Mid-1980s: 80.0 70.0 Farmed High farmed production 60.0 production costs 50.0 costs 40.0

NOK/kg Low farmed production 30.0

20.0

High wild prices 10.0

0.0

Profitable wild salmon 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 industry despite high cots

Indexes of Real Alaska Salmon Ex-Vessel Prices, 1980-2010 World Salmon Supply, 1980-2008 200% 3,000 180% Sources: Alaska Commercial Fisheries Entry Alaska Commission; Alaska Department of Fish and 160% 2,500 Game; NationalWorld Marine Fisheries Service. Farmed salmon includes trout farmed in salt water. 140% prices supply Chinook 2,000 120% Coho Farmed 100% Sockeye salmon Pink 1,500 80% Chum 60% Wild 1,000 thousand metric tons salmon 40%

Real price as % of 1980-2010 average 20% 500 0%

0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Source: ADFG. Note: 1988 price indexes peaked well above 200% for most species.

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Norwegian Salmon Farming Cost of Production

2002 80.0 70.0 Farmed Low farmed production costs 60.0 production 50.0 costs High production 40.0

NOK/kg 30.0 Low wild prices 20.0 10.0 Unprofitable wild salmon 0.0

industry because of high costs 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Real price as % of 1980-2010 average 20% 500 0%

0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Source: ADFG. Note: 1988 price indexes peaked well above 200% for most species.

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 (It wasn’t just salmon farming . . . Many other factors were also affecting wild salmon markets . . .)

• Large Alaska wild salmon harvests • Increased exports of Russian wild salmon • Stagnation of Japanese seafood demand • Increasing consolidation and market power in the retail and food service industries • Changing international standards for food handling and safety • Shift in labor-intensive seafood processing to countries with low labor costs As economic conditions worsened, people wondered whether Alaska’s salmon fishery would survive. As profitability declined, eventually fishery participation fell dramatically in many fisheries.

Share of Permits Fished, Selected Alaska Salmon Fisheries

100%

90%

80% Bristol 70% Bay Drift Gillnet 60%

50% Southeast Purse

2010 $ 40% Seine

30%

20%

10%

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 CFEC Basic Information Tables With lower participation, average catches increased for the remaining fishermen.

Average Catch as Share of Total Catch: Southeast Purse Seine

0.60%

0.50%

0.40%

0.30%

2010 $

0.20%

0.10%

0.00%

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 CFEC Basic Information Tables Beginning in the 1990s, there were significant efforts to increase quality, such as the use of refrigeration on fishing boats to keep fish chilled

Share of Bristol Bay Drift Gillnet Boats with Refrigeration Capacity

100%

Source: Northern Economics, The Importance of the Bristol Bay Salmon Fisheries to the 80% Region and its Residents , Report prepared for the Bristol Bay Economic Development Corporation, 2009

60%

40%

20%

0% 1983 1988 1993 1998 2003 2008 The Alaska salmon industry followed the lead of salmon farmers in developing new salmon products.

Farmed Atlantic fillets

Wild sockeye fillet Alaska frozen sockeye producers greatly diversified away from their previously near-total dependence on the Japanese market

Estimated End-Markets for Alaska Frozen Sockeye Salmon (%)

100%

USA 80% Other export

China 60%

European Union 40% Japan

Note: USA 20% estimated as Alaska production minus exports. 0%

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 The share of sockeye salmon sold fresh expanded (but remains relatively small due to transportation constraints

Alaska Sockeye Salmon Production

300.0

250.0

200.0

Frozen 150.0 Canned Fresh

millions millions of pounds 100.0

50.0

0.0

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 ADFG COAR database The industry engaged in extensive marketing to differentiate wild Alaska salmon from farmed salmon. High-quality wild salmon such as troll-caught chinook now command a price premium over farmed salmon.

U.S. Wholesale Prices for Selected Wild and Farmed Salmon Products

Fresh troll-caught chinook, 7-11 lbs Fresh troll-caught chinook, 11-18 lbs Fresh Atlantic, pinbone-out fillets

Frozen Chum, semi-brite Fresh Atlantic, whole fish

$12.00

$10.00

$8.00

$6.00

$/lb

$4.00

$2.00

$0.00

Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Source: Urner Barry Publications, Inc., Seafood Price Current. Prices are low list prices for Chilean 2-3 lb fillets, FOB Miami; 6-8 lb Atlantics, FOB Northeast; and 7-11 lb and 11-18 lb troll-caught head-on chinook salmon. Changes over the time in the wholesale price premium of selected wild salmon products over farmed Atlantic salmon products in the US market Norwegian Salmon Farming Cost of Production 2011 80.0

Low farmed production costs 70.0 Farmed 60.0 production High farmed and total production 50.0 costs 40.0

NOK/kg Greatly expanded total demand 30.0 20.0

Differentiated market for wild 10.0 salmon 0.0

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 Significant recovery in wild prices

Real price as % of 1980-2010 average 20% 500 0%

0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Source: ADFG. Note: 1988 price indexes peaked well above 200% for most species.

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Implications of salmon farming for the Alaska wild salmon Industry . . .

• Initial effects – Farmed salmon competed directly with wild salmon in major traditional markets – Total supply expanded faster than demand – Prices fell: • Reducing profits for both harvesters and processors • Creating severe economic and social pressures • Economic pressures led to changes in the wild industry – Consolidation in harvesting and processing – Product diversification – Market diversification – Expanded marketing Implications of salmon farming for the Alaska wild salmon Industry . . .

• Over the longer term, salmon farmers developed new markets, greatly expanding world demand – New product forms – New kinds of retail outlets – New countries • Expanding world demand increased prices for both farmed and wild salmon • Differentiated demand expanded for selected wild salmon products, increasing their price premium (or reducing their price discount) relative to farmed salmon products • Long run effects of salmon farming: – More efficient wild fishery producing better products – Prices approaching pre-farming levels Implications of salmon farming for the Alaska wild salmon Industry . . .

• Change has been rapid, continuous, far-reaching – Were not well predicted in advance • Changes can not be understood solely by looking at harvesting – Occurred throughout the entire distribution/value chain – Many different types of changes and adjustment: • Markets • Products • Marketing • Fisheries management • Industry structure THE POLITICAL ECONOMICS OF MARINE AQUACULTURE Global aquaculture production is growing rapidly.

2011: 62.7 million MT 2012: 66.6 million MT 2013: 70.2 million MT

Source: Aquaculture Canada 2014 conference keynote presentation by Rohana Subasinghe of FAO Aquaculture now accounts for half of global food fish consumption.

Source: Aquaculture Canada 2014 conference keynote presentation by Rohana Subasinghe of FAO The United States and Canada have many potential economic advantages for marine aquaculture:

• Very long coastline • Clean water • Favorable potential farming sites • Skilled labor force • High level of technology • High level of infrastructure • Stable legal and economic system • Large and growing seafood markets • Very competitive in animal farming But United States and Canadian aquaculture production is relatively small and not growing. Why? Political barriers have been a major factor slowing development of US and Canadian marine aquaculture.

Political barriers: government actions (or lack of actions) which impose unnecessary costs or reduce potential net benefits to society

Doing when this this would suffice Political barriers to Canadian aquaculture . . .

. . . Our industry operates under a “vast, complicated and fragment structure of rules” that . . . impose unnecessary costs and uncertainty that has killed growth, jobs and investment in the industry for the past decade [and] creates undue financial risks for the aquaculture industry and investors because of costly red tape and lack of foresight. Historic Challenges to Growth in Canada

1. Complex regulatory system which imposed undue costs and delays that restricted growth and investment in Canada 2. Federal & provincial overlap and duplication 3. Patchwork quilt of statutes created decades ago to guide a wild fishery

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast Political barriers to US marine aquaculture . . .

• Regulatory complexity, inconsistency and delays – Dozens of approvals at federal, state, and local levels create a complex, time consuming, costly, and uncertain permitting process • No aquaculture leasing system in U.S. federal waters • Alaska finfish farming ban What explains political barriers to marine aquaculture in the US and Canada?

We need to think about the political economics of marine aquaculture

Politics Economics

Aquaculture Government policies affect aquaculture in numerous ways.

Policies Key issues affecting aquaculture Rights Can farmers get sites Is there a process for acquiring sites? where they have the How predictable is the process? right to farm? How long does it take? What does it cost? How legally secure are sites? How flexible are permitted uses of sites? Can sites be transferred? Regulations How are farmers How stable and predictable are the regulations? regulated? How costly are the regulations? How effectively do regulations protect the environment? Other Taxes & subsidies What costs do policies impose on farmers? Trade policies What benefits do policies provide to farmers? Research & education Infrastructure Marketing Government policies matter for aquaculture—critically!

Marine aquaculture can’t happen without government action.

• Marine waters are public • Marine aquaculture can’t happen unless: – Government allows it – Government provides a way for farmers to get lease rights

Government actions directly and significantly affect the costs and economic viability of aquaculture.

• Marine aquaculture can’t happen if: – The costs of getting leases is too high – Regulations add too much to costs – The “political risk” is too high that regulatory policies will change Policies at multiple levels and branches of government affect aquaculture.

BRANCHES LEVELS Constitution Federal Courts State/Provincial Legislative Local Executive/Agencies

Unfavorable rights or regulatory policies at any level or branch of government can constrain or stop aquaculture. Government policies are driven mostly by politics

Political strength Political strength and commitment of and commitment of Political Political groups perceiving groups perceiving support opposition positive effects negative effects

Perceived Perceived POLITICS Negative Impacts Positive Impacts Sites Environmental Economic Regulations Competition Other Aquaculture production & prices

Actual economic, ECONOMICS environmental and other SCIENCE effects Government policies towards aquaculture vary widely between countries and regions.

• Many countries actively encourage aquaculture – Clear process for leasing sites – Clear and consistent regulations – Support for infrastructure and research • US and Canadian policies have been ambivalent or negative – Particularly towards marine finfish aquaculture

Why?

A number of different factors have combined to generate relatively strong and effective political opposition and relatively weaker and less effective political support. There are real public concerns about potential impacts of marine aquaculture.

Potential impacts Groups potentially impacted Competition with wild fisheries Fishermen (effects on markets and prices) Impacts on wild fish stocks Fishermen (disease, escapes) Other environmental impacts Other marine resource users (pollution, habitat) Visual impacts Coastal landowners and residents Tourism businesses

Marine traffic Recreational boaters Commercial transportation Real concerns in part reflect real historical problems

• Inadequate past regulation – Improper siting – Disease – Escapes – Excessive use of antibiotics • Better regulation and improved technology may have greatly reduced the problems, but the perceptions remain • A bad start can hamper the industry for a long time, regardless of – where it happened – who was at fault – how the industry has changed Other factors magnify the political impacts of real concerns

• Marine aquaculture is new and small • Existing regulatory structures don’t work for aquaculture • Politics is not a fair fight Marine aquaculture is new and small . . .

• Marine fish and water have traditionally been public resources • Aquaculture requires creation of private lease rights • Many people believe fish and water should not be privately owned. • Legally and politically difficult to create private rights.

Alaska Constitution: ”. . . in their natural state, fish, wildlife and waters are reserved to the people for common use." The fact that marine aquaculture is new and small means that the public constituency for active support of aquaculture is initially small.

• People don’t think marine aquaculture is “necessary.” • Few people depend on aquaculture • Benefits are difficult to prove. • Risks are easy to exaggerate. • Few opportunities to learn from experience • No economies of scale. Land farming vs. sea farming

Impacts on environment and habitat for wild species

Traditional New ACCEPTED NOT ACCEPTED Without an established constituency, aquaculture faces different standards for risk and impacts.

Alaska Salmon Policy Salmon Salmon Salmon Fishing Ranching Farming Potential economic benefit? Yes Yes Yes Potential environmental risk? Yes Yes Yes Established constituency? Yes Yes No Toleration for environmental risk? Yes Yes No Toleration for economic impacts? Yes Yes No Willingness to research? Yes Yes No Willingness to experiment? Yes Yes No Existing regulatory agency structures are poorly suited for aquaculture and sometimes biased against aquaculture.

• Authority is divided between many agencies • Regulatory agencies may have: – Other priorities – Constituents opposed to aquaculture – Staff who oppose aquaculture – Little understanding of aquaculture • It is easiest do to nothing – If agencies do nothing marine aquaculture cannot happen . . . Responsibility to foster the sector’s success is divided between federal and provincial authorities, governed by a patchwork quilt of statutes created decades ago to guide a wild fishery. Existing regulatory agency structures are poorly suited for aquaculture and sometimes biased against aquaculture . . .

Source: UJNR aquaculture symposium presentation by Jeff Silverstein Politics is not a fair fight

Advertisement in the New York Times, October 31, 2003 paid for by the Coastal Alliance for Aquaculture Reform. Marine aquaculture is a convenient target for professional opponents of resource development Politics is not constrained by truth Politics is about emotions

Sign on a car window in Alaska Concerns with some forms of marine aquaculture are attributed to all aquaculture

Alaska bumper sticker

T-shirt by Alaska artist Ray Troll Press coverage of marine aquaculture is neither careful nor objective.

• Economic and environmental biases • NGO’s have strong influence on the press • “Negative” stories are easier to write and sell • The truth about aquaculture is complicated The public and policy makers are increasingly risk averse and ambivalent about the benefits of economic development How can the US and Canadian aquaculture industries overcome political barriers to marine aquaculture?

• Understand the political challenges • Address real concerns • Work together • Communicate effectively • Emphasize the positives • Advocate for regulatory change • Be patient Understand the political challenges

• Government policies matter for aquaculture—critically! – Marine aquaculture can’t happen without government action – Government actions directly and significantly affect the costs and economic viability of aquaculture. • Government policies are driven by politics—not science • There are real public concerns about potential impacts of marine aquaculture • Other factors magnify the political impacts of real concerns – Marine aquaculture is new and small – Existing regulatory structures don’t work for aquaculture – Politics is not a fair fight Address real concerns

• Escapes • Disease • Pollution • Visual impacts Work together

• Build cooperation – across the aquaculture industry – with the broader seafood industry – among industry, scientists and government • Support your industry organizations • Engage stakeholders Emphasize the positives . . .

• “Fish farming isn’t bad” can’t win • Only “fish farming is good” can win – A great product: taste, convenience, price – Good for your health – Good for your environment – Good for your economy • Year-round jobs and income for coastal communities • Source of tax revenue • Synergies with other industries – Fishing – Fish processing – Other marine industries The Marine Harvest Salmon Industry Handbook lays out key positive arguments for farmed salmon.

102 Feed conversion ratios Communicate effectively

• Know your audience and their concerns • Know your message • Cultivate the press • Be honest, open, polite . . . and forceful • Respond immediately and forcefully to inaccuracies • Understand and use social media Advocate for regulatory change

• Consolidate agency responsibility over aquaculture • Create agency mandates for promotion of responsible aquaculture development • Remove marine aquaculture jurisdiction from fisheries agencies A New Vision for Growth: CAIA’s National Strategy

A new vision and concrete actions to implement reforms in legislation, regulations, policy and programs that will deliver greater economic growth while meeting robust environmental sustainability principles: 1. Develop a coherent legal framework -- a new Aquaculture Act for Canada 2. Regulatory reforms, with emphasis on reducing red tape and delays 3. Policy and program reforms

Source: Presentation by Ruth Salmon, Canadian Aquaculture Industry Alliance, June 13, 2015, for BC Seafood Festival: Mayor’s Breakfast Be patient. The social license debate is changing. Consumers are getting used to aquaculture.

• Farmed fish are everywhere • Farmed salmon are everywhere • Consumers like farmed salmon • Buyers want farmed salmon

108 The social license debate is changing . . .

Wild salmon is joining the salmon industry

• Major wild salmon processors also sell farmed salmon • Major wild salmon processors are farming salmon – In Chile – In the United States • Wild salmon has nothing to gain from bashing farmed salmon • The single message that matters most to both wild and farmed salmon is “eat salmon” • The wild salmon industry has benefitted tremendously from innovation and demand growth driven by salmon farmers

109 The social license debate is changing . . .

• NGOs are shifting alliances and battles • Farmed salmon is becoming – A positive environmental story – A positive health story – A positive taste story

110 Be patient. The social license debate is changing.

September 24, 2013 September 24, 2013

ESCAPEES — There are a lot fewer of them, and concern about Atlantic salmon in non-native waters, particularly, has decreased. “It’s really quite clear that Atlantic salmon are bad at colonizing outside their natural range.”

FEED CONVERSION — The content of the feed has changed as well. . . Twenty-five years ago, fish meal made up 50 percent of feed. Now, it’s 15 percent or even less

CONTAMINANTS — Recent research weighing the contaminant risk against health benefits from omega-3s concluded that every serving of salmon, wild or farmed, is a net positive. September 24, 2013

“The judgments were definitive, and surprising. Farmed salmon beat wild salmon, hands down.” Conclusions

• Political barriers are a major factor slowing development of US and Canadian marine aquaculture • Moving US and Canadian marine aquaculture forward requires understanding addressing political barriers. • The political barriers for US and Canadian marine aquaculture may more important than the technical challenges. KILL THAT MYTH We are frustrated by myths

• Sea lice • Escapes • View shed • Not “natural” • Running out of feed • Feeding fish to fish • Competition for wild fisheries • Corporate! • Foreign! • Profit-seeking!

116 Myths have real consequences

• Regulatory indifference & hostility • Lack of sites • Political and economic risk • Lack of growth • Lack of economies of scale • Higher costs • Slower technological chain • Loss of market share

117 How can we “kill that myth”?

• Don’t try to refute the myth • Ask questions to get people to think about whether the myths are really true Kill that myth. Questions to ask aquaculture critics . . .

WHAT IS YOUR EVIDENCE?

• Who said so? • What are their credentials? • Who funded the evidence? • Is the evidence up-to-date? • Is the evidence consistent with the best available science? Kill that myth. Questions to ask aquaculture critics . . .

ARE YOU MAKING THE RIGHT COMPARISIONS?

• What will consumers eat if they don’t eat farmed fish? – What are the relative health consequences? – What are the relative environmental consequences of producing it? – What are the relative costs for consumers?

• Will the fish be farmed somewhere else if it’s not farmed here? – What are the relative environmental consequences? – What are the relative economic consequences?

• If the feed isn’t used for fish, how will it be used? – What will it feed instead? – What is the relative feed conversion efficiency?