1

Future Growth of the U.S. Aquaculture Industry and

Associated Environmental Quality Issues

Marine Policy CenterWoods Hole Oceanographic Institution

16 November 2005

Di Jin, Hauke Kite Powell, and Porter Hoagland

2

Outline Broad trends in seafood production Aquaculture supplies crucial in future Policy questions Types of marine aquaculture Economic and ecological effects Model framework Open-ocean aquaculture in New England and

simulation results Summary

3

World and U.S. Marine Fish Landings(1953-2002)

0

50

100

150

200

250

300

350

400

1950 1960 1970 1980 1990 2000

inde

x (1

953)

U.S. World

4.7 mmt

87 mmt

2 mmt

23 mmt

4

[N.b. some kinds of aquaculture draw upon the capture fisheries.]

5

molluscs18%

aquatic plants10% crustaceans

18%

diadromous fish10%

freshwater fish36%

marine fish7%

miscellaneous aquatic animals

1%

World Aquaculture Production: $60 billion

6

Current and Projected World Fisheries andAquaculture Production (mmt)

  2003 2010 2020 2030

Total capture fisheries 90 93 93 93

Total aquaculture 42 53 70 83

Total world fisheries 132 146 163 176

7

US Seafood Consumption: 1909-2003

6

9

12

15

18

1905 1925 1945 1965 1985 2005

lbs p

er c

apita

8

80

100

120

140

160

180

200

220

1983 1993 2003

US landingsUS imports (edible fish)

2.2 mmt

4.3mmt

US Landings and Imports (index)

9

US Aquaculture Production (mt)

0

5,000

10,000

15,000

20,000

25,000

1983 1993 2003

US salmon culture (mt)US shellfish culture (mt)

$126m

$28m

10

Can marine aquaculture expand to ensure the supply of seafood at current per capita consumption levels?

Can marine aquaculture reduce the US dependence on seafood imports?

Can we encourage the development of “sustainable” aquaculture?

What do we mean by “sustainable”?

Some Policy Questions

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Sustainable Agriculture. . . practices that meet current and future societal needs for food and fibre, for ecosystem services, and for healthy lives, and that do so by maximizing the net benefit to society when all costs and benefits of the practices are considered. . . If society is to maximize the net benefits of agriculture, there must be a fuller accounting of both the costs and the benefits of alternative agricultural practices, and such an accounting must become the basis of policy, ethics, and action.

Tilman et al. (2002)

12

Marine Aquaculture

Open-Ocean Nearshore

Finfish

Shellfish

Finfish

Shellfish

Onshore

Finfish

Coastal ShrimpPolyculture Polyculture

Polyculture

Saltpond Shellfish

Types of Marine Aquaculture

13

Netpens

14

Longlines

15

Positive Negative Indeterminate

Direct Economic Effects

Increase in seafood output Decrease in seafood price Increase in demands for

factors from other industries

R&D and technology investments

Administrative costs of providing access

Ineffective regulations Industry concentration (if

monopolistic)

Employment for currently unemployed workers

Increase in seafood quality

External Effects Organic nutrient inputs (up to a threshold)

Nutrient removal (shellfish)

Displacement of more productive ocean uses

Eutrophication Chemical pollution Pharmaceutical pollution Escapement Ecosystem disruption Protected species takings Growth overfishing of ranched

stocks

Bioaccumulation of carcinogens in fish

Overexploitation of forage fish stocks

Distributional Effects

Employment opportunities in a new industry

Redeployment of unused capital from the fishing industry

Rents accrue to the public as the owner of “ocean space”

Local communities left out of industry

Reorganization of local market structure

Loss of access to local seafood protein (forage fish)

Reduction of trade deficit

Typology of Economic and Ecological Effects

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Qualitative Assessment of Effects

Note: all effects are negative unless preceded by "+". "Z" = zero, "M" = moderate, "S" = significant. O

ffsho

re F

infis

h

Nea

rsho

reFi

nfis

h

Land

Bas

ed F

infis

h

Nea

rsho

re M

ollu

sks

Offs

hore

Mol

lusk

s

Offs

hore

Fis

h R

anch

ing

Nea

rsho

re F

ish

Ran

chin

g

Coa

stal

Mar

ine

Shrim

p

Poly

cultu

re

Organic Pollution and Eutrophication M S M Z Z Z M S M

Chemical and Pharmaceutical Pollution Z M M Z Z Z Z S Z

Habitat Modification Z Z Z Z Z Z Z S Z

Disease Transmission to Wild Stocks S S Z M M Z Z Z M

Escapements and Interbreeding S S Z M M Z Z Z M

Exploitation of Forage Fish Stock S S S Z Z S S Z Z

Takings of Protected Species M M Z Z M M M Z M

Direct Depletion of Natural Stocks Z Z Z Z Z S S Z Z

Bioaccumulation of Carcinogens S S S Z Z M M Z Z

Increased Productivity from Nutrient Input +M +S Z Z Z Z Z Z +M

Nutrient Removal Z Z Z +S +M Z Z Z +M

Significant negative effect Significant positive effect

Moderate negative effect Moderate positive effect

Neutral or No effect

17

Priority Issues for Sustainability• Nearshore finfish culture

• disease transmission to wild stocks• escapement and interbreeding with or displacement of wild stocks• overexploitation of forage fish stocks • organic pollution • use conflicts

• Open-ocean finfish culture• escapement and interbreeding with or displacement of wild stocks• overexploitation of forage fish stocks

• Finfish ranching• depletion of natural stocks • use conflicts

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Current levels of N & P

Assimilative Capacity of the Coastal Environment andIndustry Growth Potential

Water quality standard

Max N & P loading from aquaculture

Aquaculture production level

19

Pollution Level

Aquaculture Industry Scale

Seafood Demand Seafood Supply

Local Fisheries ImportsPopulationIncome

Fish Stock

AquacultureTechnologies

AquaculturePolicy

20

dte)}s(D)z(I)s(C)E(C)s,x,E(B{max taf

0

qxE)x(fx

zs

Subject to

Model

21

cEC f

Krxrx)x(f

2

vsCa

bzI

msD

Fish stock growth

Cost of fishing

Cost of aquaculture production

Investment in aquaculture

Environmental damage

22

wmvδbMCa

dxdfδ

qE1mcMC ff

K/rMC)qK/(crMC]MC)r()qK/(cr[MC)r()qK/(cr

xa

aaa*

482

kwwmvbxkfp

s/)()( *

0*

Marginal cost of aquaculture

Marginal cost of fishing

Steady-state fish stock

Steady-state aquaculture production scale

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Variable Description Unit Value

p0 intercept of fish demand function

$/MT 2,546

k slope of fish demand function $10-3/MT2 3.28

r Intrinsic growth rate time-1 0.3715

K carrying capacity 103 MT 1,681

q catchability coefficient day -1 0.000007

c unit cost of fishing effort (E) 103$/day 3.3

discount rate   0.07

Parameters for the Market and the Fishery

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Variable Description Unit Value

FCR average feed conversion ratio

  1.365

w aquaculture production output per farm

MT/farm 2,115

v Aquaculture production operating cost a

103 $/year/farm 3,615(3,913)

b investment cost a 103 $/farm 7,514(7,792)

12E(fq) feed quantity MT/year/farm 2,765

QBOD biochemical oxygen demand (BOD)

MT/year/farm 968

QTN total nitrogen (TN) MT/year/farm 83

QTP total phosphorus (TP) MT/year/farm 14

QTSS total suspended solids (TSS)

MT/year/farm 830

Parameters for Open-Ocean Aquaculture

a. Values are associated with feed cost (fp) = $0.50/kg and $0.60/kg (in parentheses), respectively.

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Output Variables

Description Unit Without Damage

With Damage

Rising Imports

x fish stock 103MT 847.51 843.81 847.51

E fishing effort 106 days 26.314 26.431 26.314

hf fishing landings 103MT 156.11 156.12 156.11

s aquaculture industry size

farms 10.96 4.14 3.25

ha aquaculture production

103MT 23.18 8.76 6.88

h total fish supply 103MT 179.30 164.88 163.00

NBOD total BOD MT 10,609 4,008 3,146

NTN total TN MT 910 344 270

NTP total TN MT 153 58 46

NTSS total TSS MT 9,097 3,436 2,698

Simulation Results

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Market Demand and Supply

0

500

1000

1500

2000

2500

3000

0 50 100 150 200 250 300 350 400 450

fish production (thousand MT)

pric

e ($

/MT)

MCf

demand curve

P0

MCa

hf ha

A

B

C

27

Farm-Level Environmental Damage and Aquaculture Industry Size

0

5

10

15

20

25

0 50 100 150 200 250 300 350

environmental damage per farm ($ thousands)

num

ber o

f far

ms

FCR = 1.365 FCR = 1.286 FCR = 1.239

28

Unit Environmental Damage and Aquaculture Industry Size

0

5

10

15

20

25

0 50 100 150 200 250 300

environmental damage per unit feed ($/MT)

num

ber o

f far

ms

FCR = 1.365 FCR = 1.286 FCR = 1.239

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Future Expansion of Open-Ocean Aquculture Industry

0

20

40

60

80

100

120

140

160

180

200

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

year

num

ber o

f far

ms

1% demand growth 2% demand growth 3% demand growth

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New England Groundfish Landings and Projection

0

20

40

60

80

100

120

140

160

180

200

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

year

thou

sand

met

ric to

ns

31

Summary• Reviewed the market trends in seafood production.• Reviewed economic and ecological effects resulting from marine

aquaculture.• Existing studies project the future expansion of marine aquaculture

industry based on the assimilative capacity of the coastal environment. • Developed a market-oriented approach for projecting future industry

expansion.• Developed a New England case study for open-ocean aquaculture.• Socially optimal solution involves a combination of wild harvest fishery

and aquaculture.• Future size of open-ocean aquaculture industry is affected by its costs

and productivity, effectiveness of pollution control, and growth in seafood demand.