1. 1 Future Growth of the U.S. Aquaculture Industry and Associated Environmental Quality Issues Marine Policy Center Woods Hole Oceanographic Institution 16 November 2005 Di Jin, Hauke Kite Powell, and Porter Hoagland

2. 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

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4. 4 [N.b. some kinds of aquaculture draw upon the capture fisheries.]

5. 5 World Aquaculture Production: $60 billion

6. 6 Current and Projected World Fisheries and Aquaculture Production (mmt) 2003201020202030 Total capture fisheries9093 Total aquaculture42537083 Total world fisheries132146163176

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8. 8 US Landings and Imports (index)

9. 9 US Aquaculture Production (mt) $126m $28m

10. 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

11. 11 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. 12 Marine Aquaculture Open-Ocean Finfish Shellfish Polyculture Nearshore Finfish Shellfish Polyculture Onshore Finfish Saltpond Shellfish Coastal Shrimp Polyculture Types of Marine Aquaculture

13. 13 Netpens

14. 14 Longlines

15. 15 PositiveNegativeIndeterminate 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

16. 16 Qualitative Assessment of Effects

17. 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

18. 18 Current levels of N & P Assimilative Capacity of the Coastal Environment and Industry Growth Potential Water quality standard Max N & P loading from aquaculture Aquaculture production level

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20. 20 Subject to Model

21. 21 Fish stock growth Cost of fishing Cost of aquaculture production Investment in aquaculture Environmental damage

22. 22 Marginal cost of aquaculture Marginal cost of fishing Steady-state fish stock Steady-state aquaculture production scale

23. 23 VariableDescriptionUnitValue p0p0 intercept of fish demand function $/MT2,546 kslope of fish demand function$10 -3 /MT 2 3.28 r Intrinsic growth ratetime -1 0.3715 K carrying capacity10 3 MT1,681 qcatchability coefficientday -1 0.00000 7 cunit cost of fishing effort (E)10 3 $/day3.3  discount rate 0.07 Parameters for the Market and the Fishery

24. 24 VariableDescriptionUnitValue FCRaverage feed conversion ratio 1.365 waquaculture production output per farm MT/farm2,115 vAquaculture production operating cost a 10 3 $/year/farm3,615 (3,913) binvestment cost a 10 3 $/farm7,514 (7,792) 12  E(fq) feed quantityMT/year/farm2,765 Q BOD biochemical oxygen demand (BOD) MT/year/farm968 Q TN total nitrogen (TN)MT/year/farm83 Q TP total phosphorus (TP)MT/year/farm14 Q TSS total suspended solids (TSS) MT/year/farm830 Parameters for Open-Ocean Aquaculture a. Values are associated with feed cost (fp) = $0.50/kg and $0.60/kg (in parentheses), respectively.

25. 25 Output Variables DescriptionUnitWithout Damage With Damage Rising Imports xfish stock10 3 MT847.51843.81847.51 Efishing effort10 6 days26.31426.43126.314 hfhf fishing landings10 3 MT156.11156.12156.11 saquaculture industry size farms10.964.143.25 haha aquaculture production 10 3 MT23.188.766.88 htotal fish supply10 3 MT179.30164.88163.00 N BOD total BODMT10,6094,0083,146 N TN total TNMT910344270 N TP total TNMT1535846 N TSS total TSSMT9,0973,4362,698 Simulation Results

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31. 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.