World Aquaculture Outlook 2004

AQUACULTURISTS

The ecosystem and the technologies used favour aquaculturists in comparison with capture fishers. Aquaculturists benefit from the fact that, in their search for lower costs of production and higher net revenues, they can work to improve both the fish and the production methods used, while fishers can do little or nothing about the fish¹⁸ and have to concentrate on fishing gear and methods. However, aquaculturists' freedom to improve fish is limited by the need to consider the effects of new or modified fish on the aquatic ecosystem and human health.

Many aquaculturists have already benefited from not only the selective breeding of fish¹⁹ but also the better performance of, for example, feeds, vaccines and the automatic handling of feed, as well as of the fish produced. This is likely to continue to be the case. The effects have been significant in terms of increased production of concerned species. Development has been of the win-win type, as both producers and consumers have gained when prices for cultured species have fallen as a result of increased production.²⁰ As is natural in market economies, savings have been passed on to consumers, leading to the opening up of non-traditional markets (Atlantic salmon in Asia, tropical marine shrimps in Europe). This trend will certainly continue.

The vast bulk of aquaculture production is composed of a small number of species; in 2000, 29 species accounted for 78 percent of production. There is no evident reason why other species from among the several thousand that are exploited by capture fisheries could not eventually be raised economically in a controlled environment.

The appropriate legal framework for most modern aquaculture technologies is known. It is generally in place in rich economies where aquaculture is an established economic activity and is being put in place in developing economies. In developed economies, management and enforcement costs as a share of the value of the produce are lower for aquaculture than for capture fisheries.

At present, more than 90 percent of production comes from Asia, although there is no inherent reason for aquaculture not to be a common, viable and sustainable activity outside Asia. Increasingly, it is being realized that aquaculture can be effectively promoted through appropriate policies, and in Asia - particularly China (see Aquaculture development in China: the role of public sector policies, Part 3, p. 99) - it has grown in response to consciously developed policies aimed at its promotion. Public management of aquaculture is not dissimilar to public management of agriculture; it is thus generally cheaper than the management of capture fisheries.

So, in developed economies, application of the three policies will lead to some increase in aquaculture production costs but, as a rule, this increase will be significantly smaller than it will be for capture fishery products. In developing economies the costs will probably be somewhat higher.

The real costs of transport and communication will most likely continue to fall - albeit slowly. As a result, aquaculturists in rich, temperate zone economies will be exposed to competition with producers from increasingly distant areas. Temperate zone aquaculturists may still be able to compete, depending on the rate of technological development and application. It is not unlikely, however, that they will find it increasingly difficult to compete with aquaculture products from poor countries (tropical and temperate). To some extent, the outcome will depend largely on whether or not the "anti-subsidy" lobby wins the present international argument and, if it does, on whether the subsidy ban would then be extended to aquaculture processes and products. In that case, the possibilities for stimulating and promoting aquaculture growth in rich, open market economies will be curtailed and future growth in non-OECD countries will be stimulated.

POLICY-MAKERS

Policy-makers for fisheries and aquaculture have traditionally been concerned with food production and employment. While policy objectives in these areas continue to be valid, policy-makers increasingly need to - and do - give attention to demands for non-consumptive and recreational uses of aquatic resources and to the imperative demand from global civil society that the aquatic ecosystem as a whole be conserved and maintained.

During the last decades the contribution of aquaculture and capture fisheries to food and employment has been mixed. Aquaculture has generally done better than capture fisheries. In percentage terms, world production and employment have, since 1990, grown faster in aquaculture than in capture fisheries (see Figure 1, p. 5, and Figure 12, p. 15).

Although most aquaculture systems are not labour-intensive, aquaculture has become an important source of employment in many countries. In Norway, employment in the sector rose from virtually zero to about 3 500 people in 1999. In China, expanding aquaculture production is reflected in a rapidly increasing number of people employed.

During the recent past, the demand for non-consumptive and recreational uses of aquatic resources has, in some instances, conflicted with the interests of commercial fishers. Although these conflicts are important where they occur, they are not frequent and, seen in a global perspective, they are not a significant impediment to commercial fisheries. This is likely to remain the case, at least for recreational fisheries, because the majority of these fisheries will gravitate towards smaller water bodies and are content with small catches; that is, they will take over fisheries as they become economically uninteresting for commercial fishers. The conflicting interests of non-consumptive users and commercial fishers, on the other hand, may remain or even expand.

Policies that aim to preserve the aquatic ecosystem will have an impact on both capture fishers and aquaculturists, and policy-makers will be increasingly obliged to ensure that such policies work. Large-scale, commercial aquaculturists will probably be able to coexist with the policies through the adequate selection of culture sites and technologies. Costs for cultured products will be higher than when the policies are not present, but activities will develop.

Some capture fishers are in a less fortunate situation. What for them is normal fishing may be judged by others to have negative consequences for the aquatic environment. If the fisheries are small, or not developed, it may become economically convenient for the government to close them down or prevent their development. The cost of compensating (including retraining) existing fishers may be smaller than the costs incurred in managing and/or developing the fisheries.

This is not to say that aquaculture will not encounter difficulties. It has encountered obstacles (environmental destruction, disease) in the past and will do so in the future. So far, however, major obstacles have been overcome and, although several species have run into difficulties, overall growth has been steady.

In summary its seems likely that many policy-makers will find that, on balance, aquaculture conforms better than capture fisheries to public policy objectives for food production, employment, environment and non-food use of aquatic resources. In concrete terms, fish produced by capture fishers are likely to become increasingly costly, and in some instances more rare, while fish produced through aquaculture will become more common and price trends for cultured species may start high but are then likely to fall.

Some policy-makers will not have to choose between supporting capture fisheries and supporting aquaculture. However, representatives of either group - capture fishers or aquaculturists - will no doubt draw the attention of policy-makers and the general public to any advantage that their own sector has over the other.

CONCLUSIONS

It seems plausible that, in the medium term, in both developed and developing countries, public policies will favour aquaculture, but not necessarily at the expense of capture fisheries. It is plausible that policy-makers will find it easier to defend public support for aquaculture than for capture fisheries, although among those who put the environment before employment and income generation there will be some who argue that the emergency that must be remedied is that of unmanaged, or badly managed, capture fisheries, and not aquaculture.

Part of the analysis in the preceding section calls into question a commonly held assumption about the future of capture fisheries: that catches of food fish have stabilized and will remain at their present levels during the coming decades. If the analysis is correct, current landings of harvested species might fall, not because of excessive effort but because of a reduction in effort. Of course, this will be a gradual development that may not even be noticeable in this decade.

¹ FAO. In press. Agriculture towards 2015/30. Rome.
² In this section the term "fish" also includes crustaceans and molluscs, unless otherwise stated.
³ Austria, Belgium-Luxembourg, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.
⁴ The results of these five reports will be finalized and published as a series of FAO publications by 2003.
⁵ However, as indicated in the previous subsection, public policy support for aquaculture is likely to grow worldwide. The implication is that output might, in fact, be expanding at the rates implied here, even if the Chinese production increases do not reach the levels foreseen.
⁶ In World agriculture: towards 2015/30 projected annual per capita consumption is between 19 and 20 kg.
⁷ There is some uncertainty in estimates of non-food use of fish production because an unknown portion of fresh fish is used directly as inputs into aquaculture, and not for food consumption as was previously believed. For example, in FAO's Food Balance Sheets, when estimates of fish that is input directly into aquaculture are included, the per capita consumption estimates for China are reduced by approximately 3 kg.
⁸ FAO. 1999. Historical consumption and future demand for fish and fishery products: exploratory calculations for the years 2015/30, by Y. Ye. FAO Fisheries Circular No. 946. Rome. 31 pp.
⁹ In 1986, United Kingdom fishmongers had a 51 percent market share of fresh fish, while supermarkets' share was 15 percent. By 1996, the situation was dramatically different: fishmongers' market share had fallen to 30 percent, while that of supermarkets had increased to approximately 50 percent. In France, supermarkets are now the source of approximately 60 percent of retail fish sales. In Spain, it has been estimated that traditional fish markets generated less than 40 percent of retail sales in 1998 and that they will continue to lose market share in the future.
¹⁰ Fish and fish products groupings comprise: freshwater fish, anadromous fish, marine fish-pelagic-tunas, marine fish-pelagic-small, marine fish-demersal, marine fish-others, crustaceans, molluscs, cephalopods, aquatic animals and aquatic plants.
¹¹ Own-price elasticities ranged from -0.12 to -0.80 (seaweeds to seabreams), while income elasticities ranged from 0.07 to 0.80 (pelagic smalls to aquatic animals). As a result, the Japanese regional study includes a detailed econometric analysis of demand for fish products with the goal of estimating precise own-price and income elasticities for a large number of fish species categories. Substitutions among protein sources (i.e. fish, beef, pork, chicken and egg) are analysed using an "almost ideal demand" system. A separate time trend analysis is used to forecast income to 2030, which is then fed back into the previous-ly estimated demand function in order to estimate fish demand until 2030.
¹² The principal species in this group include cod, hake, haddock and whiting.
¹³ See footnote 11, p. 115.
¹⁴ Although reflecting different levels of detail (e.g. different lev-els of aggregations of species groups and geographic regions), there are similarities in the ways in which the models were developed. The respective authors first analysed historical trends to determine income and price elasticities, consumption, production and trade patterns related to fish and fish products. Next, using trend analysis techniques and a multitude of probable assumptions about the future, the authors projected future demand and supply for fish and fish products. Imbalances were then reconciled, either through price clearing mechanisms or through fluctuations in trade.
¹⁵ See: FAO. 2000. The State of World Fisheries and Aquaculture 2000, pp. 13-16. Rome.
¹⁶ OECD. 2000. Transition to responsible fisheries: economic and policy implications, p.131. Paris.
¹⁷ E. William, R. Arnason and R. Hanesson, eds. In press. The cost of fisheries management. Aldershot, UK, Ashgate Publishing.
¹⁸ See: FAO. 2001. The economics of ocean ranching. Experiences, outlook and theory, by R. Arnason. FAO Fisheries Technical Paper No. 413. Rome.
¹⁹ Selective breeding has contributed to improving yields and results for fish (carp, salmon, tilapia) more than for shrimps or bivalves.
²⁰ Over a period of 15 years since the mid-1980s, the average operating costs per kilogram of salmon in Norwegian fish farms declined by two-thirds in real terms. See: J.L. Anderson. 2002. Aquaculture and the future, why fisheries economists should care. Marine Resource Economics, 17(2): 133-151.