Aquaponics: ARCHNES Community and Economic Development MASSACHUSETTS INSTITUTE by OF TECf-WOLOGY Elisha R. Goodman JUN 3 0 2011 BA, Sociology L12RARIES Arizona State University, 2005 SUBMITTED TO THE DEPARTMENT OF URBAN STUDIES AND PLANNING IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER IN CITY PLANNING AT THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY JUNE 2011 © 2011 Elisha R Goodman. All rights reserved. The author hereby grants to MIT the permission to reproduce and to distribute publicly paper and electronic copies of the thesis document in whole or in part in any medium now known or hereafter created. Signature of Author: Department of Urban Studies and Planning May 18, 2011 Certified by: Anne Whiston Spirn, MLA Professor of Landscape Architecture and Planning r----....... Thesis Supervisor Accepted by: Professor Joseph Ferreira Chair, MCP Committee Department of Urban Studies and Planning 2 Aquaponics: Community and Economic Development By Elisha R. Goodman Submitted to the Department of Urban Studies and Planning On May 18, 2011 in Partial Fulfillment of the Requirements for the Degree of Master in City Planning ABSTRACT This thesis provides a cash flow analysis of an aquaponics system growing tilapia, perch, and lettuce in a temperate climate utilizing data collected via a case study of an aquaponics operation in Milwaukee, Wisconsin. Literature regarding the financial feasibility of aquaponics as a business is scant. This thesis determines that in temperate climates, tilapia and vegetable sales or, alternatively, yellow perch and vegetable sales are insufficient sources of revenue for this aquaponics system to offset regular costs when grown in small quantities and when operated as a stand-alone for-profit business. However, it is possible to reach economies of scale and to attain profitability with a yellow perch and lettuce system. Moreover, there may be ways to increase the margin of profitability or to close the gap between income and expense through such things as alternative business models, value adding, procuring things for free, and diversifying revenue streams. Any organization or individual considering an aquaponics operation should conduct careful analysis and planning to determine if profitability is possible and to understand, in the instance that an aquaponics operation is not profitable, if the community and economic development benefits of the system outweigh the costs. Keywords: aquaponics, fish, tilapia, perch, lettuce, farming, closed-loop systems, community development, economic development, cash flow analysis, sustainability, economic viability, hydroponics, recirculating aquaculture systems, integrated aquaculture, integrated agriculture, worker-owned cooperatives, agroecology Thesis Supervisor: Anne Whiston Spirn, MLA Title: Professor of Landscape Architecture and Planning 4 Acknowledgements This thesis culminates two years of conversations, research, and action conducted with, for, and because of many people who deserve thanks here: Professor Anne Whiston Spirn, my thesis advisor, served as an inspiration for blending theory with practice and who, along with Professor Ceasar McDowell facilitated deep thinking on engaging communities. Professor Frank Levy, my thesis reader, as well as Karl Seidman supplied critical advice on financial analysis and useful discussions on alternative business models. Professor John Sterman, together with Sarah Slaughter and Richard Locke, at the Sloan School of Management provided insights into strategies for sustainable business and improved my thinking on system dynamics and industrial ecology. The Department of Urban Studies and Planning at MIT offered me the opportunity to call home this fine institution, which stays true to its roots as a land grant university and encourages the integration of innovation and public service. The Department provided funding for this research though an Emerson Travel Award. The North Shore Labor Council, particularly Jeffrey Crosby and Anthony Dunn, with whom I have worked over the past two years, inspired this research. Their creative approach to dealing with the forces of labor markets includes developing new community-controlled jobs with family sustaining wages. Together, we investigated opportunities for green businesses that produce durable economic development and studied at Mondragon in Spain to gain a better understanding of cooperative ownership models. In the hope that aquaponics could be the basis for a cooperative, the North Shore Labor Council requested that I investigate the prospects of aquaponics to generate profits. It is for them and for all organizations and individuals considering aquaponics that I conduct this research. MIT's Public Service Center and the Community Innovator's Lab (CoLab) provided sustained financial support for my work with the North Shore Labor Council. Additionally, the Community Innovators Lab, particularly Dayna Cunningham and Carlos Espinoza-Toro, taught me the importance of shared values and created venues to discuss mechanisms for shared wealth generation, including cooperative ownership models. The founders and staff at Growing Power and Sweet Water Organics, particularly William Allen, James Godsil, Richard Mueller, and Ryan Dale, opened their doors and their hearts to my inquiry, supplying frank and valuable information about the business and technical aspects of aquaponics. Professor Joseph K. Buttner at Salem State College provided insight into fish-related topics and generously offered a tour of the Northeast Massachusetts Aquaculture Center at Cat Cove. And of course, my family and friends, as always, provided endless patience and support. These people and institutions all deserve my heartfelt thanks. It has been a delight and a privilege to have them in my life and to do this work. 6 TABLE OF CONTENTS Abstract 3 Acknowledgments 5 Table of Contents 7 Chapter I. The Potential of Aquaponics for Community and Economic Development 9 Chapter II. A Case Study of Aquaponics in a Temperate Climate: Growing Power, Inc. 41 Chapter III. A Financial Analysis of an Aquaponics System in a Temperate Climate 66 Chapter IV. Recommendations and Conclusions 74 Appendix A. A-1. Deriving Numbers 80 A-2. Technical Lessons 86 A-3. List of Interviews and Interview Questions 88 Appendix B. B-1. Financials for One 750-Gallon Aquaponics 4' x 8' Starter System With 91 Tilapia and Lettuce. B-2. Financials for One 750-Gallon Aquaponics 4' x 8' Starter System With 92 Yellow Perch and Lettuce. B-3. Financials for One 3,750-Gallon Aquaponics 4' x 8' Starter System With 93 Tilapia and Lettuce. B-4. Financials for One 3,750-Gallon Aquaponics 4' x 8' Starter System With 94 Perch and Lettuce. B-5. Energy Requirements 95 B-6. Production Levels 96 Works Cited 97 8 Chapter I. The Potential of Aquaponics for Community and Economic Development 1.1 - What is Aquaponics? Aquaponics is a food production method combining aquaculture with hydroponics in a closed-loop system that recirculates water and nutrients in order to grow aquatic life and terrestrial plants. In a 2006 journal article in Aquaculture Internationaldefines aquaponics as, "the integration of hydroponic plant production into recirculating fish aquaculture systems (RAS)."' Similarly, a 2009 article in WorldAquaculture defines aquaponics as, "the integration of two separate, established farming technologies - recirculating fish farming and hydroponic plant farming."2 As these two preceding definitions suggest, the word aquaponics denotes a combination of the words "aquaculture" and "hydroponics." The term "aquaponics" is still too nascent to be defined in the Oxford English Dictionary or in the Meriam Febster Dictionay, however, "aquaponics" does appear as an entry on Wikipedia, demonstrating that the concept of aquaponics has moved into the public sphere. As of April 26, 2011, this online encyclopedia, which is an open source repository of common knowledge and contains entries that evolve over time as people update information, defined aquaponics as: ... a sustainablefood production system that combines a traditionalaquaculture (raising aquatic animals such asfish, crayfish orprawns in tanks) with hydroponics (cultivatingplants in water) in a symbiotic environment. In the aquaculture, effluents accumulate in the water, increasing toxicity for the fish. This water is led to a hydroponic system where the by-productsfrom the aquacultureare filtered out by the plants as vital nutrients, after which the cleansed water is recirculated back to the animals. The term aquaponicsis a portmanteauof the terms aquaculture and hydroponic. 1 Wilson A. Lennard and Brian V. Leonard, "A Comparison of Three Different Hydroponic Sub-systems (Gravel Bed, Floating and Nutrient Film Technique) in an Aquaponic Test System," Aquaculture International 14, no. 6 (5, 2006): 539, http://www.springerhnk.com.libproxy.mit.edu/content/y314177814674782/. 2 Wilson Lennard, "Aquaponics: The Integration of Recirculating Aquaculture and Hydroponics," World Aquaculture 40, no. 1 (2009): 23. Aquaponic systems vay in siZe from small indoor or outdoor units to large commercialunits, using the same technology. The systems usualy containfresh water, but salt water systems areplausible depending on the type of aquaticanimal and vegetation.[citationneeded] Aquaponic science may still be considered to be at an early stage. 3 Definitions of "aquaculture" and "hydroponics" in more traditional reference compendiums provide some further understanding of what a combination of these