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2 Status of Aquaculture Marine aquaculture in the United States lags behind that in other devel- oped countries such as Japan and Norway. This situation is not the result of any natural disadvantages for the aquaculture of many marine species; de- velopment has been constrained by a number of factors, including the regu- latory environment, economic opportunities, and availability of research and educational support. This chapter briefly reviews world and U.S. aqua- culture production and then focuses on analysis of the status of marine aquaculture in the United States. Details of world aquaculture production are presented in Appendix A. A review of U.S. freshwater aquaculture is provided in Appendix B. AN OVERVIEW OF AQUACULTURE AND FISHERIES WORLDWIDE World aquaculture production in 1988 reached 14 million metric tons (mmt) (FAO, 1990),~ an increase of about 10 percent over the previous year and a mean annual increase of 7 percent from the 6 mmt reported for 1975 by Pillay (19761. The latter represents a doubling each decade; how- ever, part of the increase may be more apparent than real because the num- ber of countries reporting aquaculture statistics to the Food and Agriculture Organization (FAO) increased from 67 to 144 during that same period (FAO, 19901. Total annual world harvest from capture fishing also increased by about 7 percent annually, from 21 to 40 mmt during the decade 1950-1960, but production then began to slow down (to 69 mmt by 1968) followed by a 20

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STATUS 21 decade of ups and downs with little net increase. This slowdown was primarily due to the nearly simultaneous failure of three of the world's largest fisheries (North Atlantic herring, Peruvian anchovetta, and South Atlantic pilchard). These fisheries have since wholly or partially recovered, and world production again began to increase by 1978, but at a reduced annual rate of about 2.5 percent over the next decade. In 1988, total world fish production was reported by FAO at 98 mmt, a figure that includes 14 mmt from aquaculture and 84 mmt from capture fishing. If the 23 mmt used for industrial purposes (i.e., meal, oil) are excluded, 61 mmt from the commercial fishery were used for direct human consumption. Thus, the aquaculture yield of 14 mmt represents 19 percent of the total edible fish production, or 23 percent of the edible fish taken by commercial fishing in 1988. Several estimates made during the late 1960s and early 1970s placed the potential yield of fish from the sea at or about 100 mmt (Ricker, 1969; Ryther, 1969; Gulland, 1971), a figure that now appears to be generally accepted (Hjul, 1973; Bailey, 19881. As the 100-mmt yield is approached by landing statistics, many feel that yields from capture fisheries are begin- ning to peak. This opinion is reinforced by the consensus that virtually all of the established major world fisheries and most of the recently discovered and exploited resources (Bering Sea, Falkland Islands, New Zealand, and the Antarctic) are already fished at, if not beyond, their sustainable yield. With the exception of unconventional resources of doubtful economic or human food value (e.g., Antarctic krill, lantern fish), no major unexploited or underutilized fisheries remain in the sea (Royce, 1989~. The human population has roughly doubled since 1950 (2.5 to 5.0 bil- lion), while world fish production has more than quadrupled (21 to 98 mmt). Thus, annual per capita utilization (as food and industrial products) has also more than doubled (18 to 43 pounds per capita). If the increase in consumption were to continue at the same rate to the year 2000, when the human population is expected to reach 6 billion, an annual production of 138 mmt of fish would be needed. It is doubtful that capture fishing, apparently already reaching its natural limit, could continue to meet such a demand. If aquaculture were to continue to grow at the same rate it has over the past decade, it would produce 33 mint by the year 2000 and could effectively supplement a commercial fishing vielr1 of loo mmt in m~.~.tins, the anticipated demand. A summary of the 1988 aquaculture yield of 14 mmt, derived from data given by FAO, is shown in Table 2-1. Yields are broken down into major categories, both geographically and by species groups. The East Asian countries of China, Japan, the two Koreas, Taiwan, and the Philippines together account for about three-quarters (11 mmt) of the world's aquacul- ture production, with China alone accounting for nearly one-half the

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22 MARINE AQUACULTURE TABLE 2-1 World Aquaculture Production, 1988 (million metric tons) Region Finfish Crustaceans Mollusks Seaweeds Total Africa 0.07 0.07 North America 0.30 0.03 0.10 0.40 Latin America 0.04 0.10 0.05 0.02 0.20 Europe 0.50 0.60 1.00 USSR 0.40 0.40 Near East 0.03 0.03 East Asia 5.00 0.30 2.00 3.50 11.00 West Asia 1.00 0.10 0.10 0.08 1.00 Total 7.00 0.50 3.00 4.00 14.00 NOTE: Figures are rounded. SOURCE: Food and Agriculture Organization (1990). world's production (7 mmt). The West Asian countries of Indonesia, Viet- nam, Thailand, India, and Bangladesh together grow more than 1 mmt, bringing the Asian total to more than 12 mmt, or 84 percent of the world- wide total aquaculture production. Europe and the region formerly comprising the USSR together account for another 10 percent, about one-third from the former USSR, another one-third from Spain and France, and the rest scattered throughout the region. The African continent produces only 0.5 percent of the total and the entire Western Hemisphere less than 5 percent. The U.S. contribution to world aqua- culture of approximately 0.3 mmt equals only about 2 percent of the total. Algae (seaweeds) grown for both food and chemicals (agar, alginic acid, and carrageenan, used as stabilizers and emulsifiers in the food, cos- metic, and pharmaceutical industries) are the leading marine aquaculture product by weight, yielding some 4 mmt per year. Mollusk farming pro- duces 3 mmt, about equally divided among oysters, clams, and mussels, with smaller quantities of scallops. The culture of marine crustaceans is restricted to shrimp or prawns (Penaeus spp.), a rapidly growing industry worldwide. Of the 7 mmt of finfish produced in 1988, 6 mmt represented freshwater species, including carp and tilapia grown mostly in Asia. Less than 1 mmt of marine finfish were produced, including roughly 200,000 metric tons each of milkfish, Japanese yellowtail (amberjack), and salmon. The monetary value of the 1988 world aquaculture crop of 14 mmt was estimated at $22.5 billion, an increase of 19 percent from the $18.8 billion value of the 1987 crop and nearly twice that of the 1985 yield ($13.1 billion) (FAO, 19901. The values are undoubtedly underestimates because only 60 of the 144 countries that now report statistics to FAO include information on prices and values.

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STATUS 23 STATUS OF U.S. MARINE AQUACULTURE Of the roughly 0.3 mmt of aquatic life grown in the United States, nearly three-quarters are freshwater organisms. Most of the freshwater production consists of catfish, crayfish, and rainbow trout, in that order of importance. Large numbers of freshwater organisms are grown for purposes other than their immediate use for food. These include ornamental fish, baitfish, trout, and other species stocked for recreational fishing. Marine aquaculture is dominated by oyster culture (80 percent of the total), which is, however, a declining industry in the United States. Clams, mussels, salmon, and shrimp make up the remaining 20 percent, in order of importance. The technology is currently being developed for a few other marine species (e.g., abalone, red drum, scallops, striped bass, and white sturgeon), but as yet they are produced commercially in insignificant quan- tities. The production and monetary value of the various U.S. aquaculture crops are summarized in Table 2-2. In both categories the United States is equal to about 2 percent of world totals. Domestic consumption of fish products grew in the 1980s primarily be- TABLE 2-2 U.S. Aquaculture Production, 1988 Production Value (metric tons)a ($ million)a Freshwater Catfish 155,000 265 Crayfish 30,000 25 Trout 25,000 65 Striped bass (hybrids) 450 2 Bait/ornamental fish 75 Alligators 20 Subtotal 210,450 452 Marine Oysters 63,000 50 Clams 8,000 10 Mussels 4,000 2 Salmon 3,000 22 Shrimp 1,000 3 Subtotal 79,000 87 Total U.S. 289,450 539 Total world 14,000,000 22,500 U.S. as percentage of world total 2.0 2.4 aFigures are rounded. SOURCE: Compiled from U.S. Department of Commerce (1990) and Food and Agriculture Organization (1990).

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24 MARINE AQUACULTURE cause of the recognition of the health attributes of fish relative to other meat products, the strong U.S. economy, and rising real per capita incomes. Real per capita disposable income rose 16.6 percent between 1980 and 1988, and real total personal disposable income rose 26.1 percent (Council of Eco- nomic Advisors, 1989~. Per capita consumption of fish products in the United States rose 24 percent from 12.5 pounds per capita (retail weight) in 1980 to 15.5 pounds per capita in 1990 (see Figure 1-1~.2 The last few years have shown more or less stable per capita consumption despite the fact that prices for fish are increasing faster than for meat and poultry products. From 1980 to 1990 the consumer price index (CPI) for fish increased by almost 68 percent, from 87.5 to 146.7 (CPI base year 1982-19841. This figure compares to increases in the CPI of 38.6 percent for meat, 41.4 percent for chicken, and 52.5 percent for all foods (Putnam and Allshouse, 1991~. The increase in per capita consumption, combined with the sharp rise in the rela- tive price for fish, has resulted in steadily increasing expenditures for seafood (see Figure 1-2) and indicates a shift in consumer preferences toward seafood. As a major seafood-consuming nation, the United States has remained dependent on imports for between 64.7 (1986) and 43.3 percent (1990) of edible supplies over the past decade. The recent improvement in domestic supply share reflects the large increase in Alaska's landings of the expand- Billion $ 10 - 8 - 6 4 - ....] 1 2- ~51 O- 1 1 1 1 1 1 1 70 72 74 76 78 80 82 71 73 75 l .2 No'nedible:.Pr.odi;Jcts2. :'l~ 1 ~ _ 1 l ma. me' ~1 - .. 84 86 88 77 7g 81 83 85 87 89 FIGURE 2-1 U.S. trade in fishery products: value of imports, 1970~1989. SOURCE: Compiled from U.S. Department of Commerce, Fisheries of the United States, 1970- 1990 (various issues).

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STATUS ing pollock fishery. 25 The 1989 import level remains impressively high at $9.6 billion (see Figure 2-1~. The trade deficit in edible fishery products alone has risen from approxi- mately $1.8 billion in 1980 to $3.2 billion in 1989. The trade deficit in- creased from $2.6 billion in 1980 to $5.5 billion in 1990 (see Figure 2-2) if nonfood fishery products are included (e.g., jewelry, live trout, live eels, ornamental fish, feed, vitamins, agar, seaweed, reptile skins, fur-derived products, and other products). It is useful to compare the magnitude of fishery imports with traditional agricultural products. As can be seen from Figure 2-3, in 1989 imports of fishery products exceeded those of all traditional animal products as well as the sum of all horticultural products, all grains, and all "noncompetitive" products, which include coffee and bananas. Shrimp imports alone are in the range of the value of all beef imports, all wine and beer imports, and all fruit and vegetable imports. The contribution of marine aquaculture to imports continues to increase. Both cultured shellfish (primarily shrimp) and cultured finfish (primarily salmon) are imported from approximately a dozen geographically diverse 8 6 4 2 Billion $ -_ ............................................................................................................................................ 158181 , 1 1 1 1 1 'I 1 1 1 . 70 72 74 76 78 80 82 84 - 1 86 88 71 73 75 77 79 81 83 85 87 89 FIGURE 2-2 U.S. trade deficit in fishery products, 1970-1989. NOTE: In 1989, the definition of"nonedible" fishery products was broadened to include many addi- tional manufactured products previously not included, which are exported by the U.S. This change explains much of the decline in the deficit for that year. SOURCE: Compiled from U.S. Department of Commerce, Fisheries of the United States, 1970- 1990 (various issues).

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26 MARINE AQUACULTURE Billion dollars 10 l~-~-~-~ ~-~-~--~ ~~ in . - 81-1 6 2 . . Total Animal l Vegetables 1 ~ Fn~h~ Horticulture Grains "Noncompetitive. fishery Goods FIGURE 2-3 U.S. agricultural and fishery imports, by categories, 1989. NOTE: Agricultural commodity fiscal year, as well as the fishery product calendar year. SOURCES: U.S. Department of Agriculture (1990~; Outlook for U.S. Agricultural Exports. U.S. Department of Commerce (1990~; Fisheries of the United States. Million Pounds 400 300 ~ . 79 80 81 82 83 84 85 86 87 88 89 FIGURE 2-4 U.S. imports of shrimp, by country of origin, 1979-1989. NOTE: Production in China, Ecuador, Thailand, and Taiwan is dominated by aquaculture. SOURCE: Compiled from U.S. Department of Commerce, Fisheries of the United States 1980-1990 (various issues).

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STATUS 60 20 27 Million Pounds 100 - 80: 40 - . ..................................... _ ;~ I) / Chile United ' Kingdom ~ ' Others 83 84 85 86 87 88 89 90 FIGURE 2-5 U.S. imports of fresh salmon, by country of origin, 1983-1989. NOTE: With the exception of Canada, virtually all of these imports are from aquaculture. SOURCE: U.S. Department of Commerce, Import Statistics (various issues). countries (Figures 2-4 and 2-5~. Substantial quantities of seafood come from Scandinavia, South America, Central America, and Asia. Salmon aqua- culture imports have increased steadily despite the fact that the United States is the largest producer of salmon from capture fisheries in the world. How- ever, a recent ruling by the U.S. International Trade Commission against Norway (see discussion in Chapter 3) has dramatically reduced imports of Norwegian salmon. Marine aquaculture of finfish in the United States is currently an embry- onic and struggling industry. Most of the success to date has been with salmonids: in particular, coho, chinook, sea-run rainbow trout, and Atlantic salmon on the West Coast, and Atlantic salmon and sea-run rainbow trout on the East Coast. .A number of fledgling and experimental operations are attempting to culture other species: hybrid striped bass in the mid-Atlantic, Southeast, and Southwest; red drum in the Southeast; dolphin (mahi mahi) and ornamental marine tropical fish in Hawaii, and freshwater culture of anadromous sturgeon and striped bass in California. Except for salmonid culture, the marine finfish aquaculture industry is relatively small. Consequently, for most other species, few data are avail- able on the number of firms, employment, revenues, and quantity produced. Data are collected only sparsely by government agencies, and many firms'

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28 MARINE AQUACULTURE Red drum (Sciaenops ocellatusj harvested from an experimental intensive culture pond in South Carolina.

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STATUS 29 business lives are short. Following is a review of the major marine species presently under culture in the United States. Mollusks Oysters Culture of the American oyster (Crassostrea virginica) is the oldest form of marine aquaculture practiced in the United States. The species occurs along the entire eastern U.S. seaboard from Maine to Florida and through- out the Gulf of Mexico. Virtually all oyster production in these geographi- cal areas involves some human intervention and manipulation, however primitive, and is therefore a form of aquaculture. The industry has been in steady decline for more than 70 years, from a peak production of 0.25 mmt in 1920 to about one-tenth that amount today. Chief among its problems are overfishing and habitat loss, as well as a series of uncontrollable disease epidemics, one of which has almost elimi- nated oysters from the northern part of their range. Pollution has had a devastating impact on oyster cultures in the San Francisco and Chesapeake bays. Another serious constraint is the closure of shellfish beds for public health reasons because of human pollution and/or blooms of toxic unicellu- lar algae (red tides) (Virginia Sea Grant, 1990~. Statistics indicating de- creasing per capita consumption of oysters actually reflect domestic avail- ability as well as consumer preference. Any effect of consumers' reactions to health concerns on per capita consumption was masked by a 40 percent decrease in domestic supply (USDC, 19891. In 1990, the wholesale value of the domestic oyster supply was approximately $25 million. A good op- portunity exists to revitalize oyster production through new technology. The technology for growing the American oyster is well established, al- though the most efficient methods (i.e., raft and rack culture- see Appendix A) are generally not allowed in most U.S. coastal waters for aesthetic or environmental reasons. Currently, most of the culture practices are limited to planting of shells or other clutch material to "catch" oyster spat, harvest- ing in a controlled manner to maintain desirable standing crops on beds, and transplanting seed oysters from beds in one area (often moderately polluted) to clean beds elsewhere. Little technological innovation has oc- curred in the last several decades. Chronic diseases are now widespread throughout the geographical range of American oysters, threatening the continued existence of the industry. Although some progress has been made in developing disease-resistant oyster strains, much more research is needed on the prevention or curing of such diseases.

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30 MARINE AQUACULTURE The Pacific oyster (Crassotrea gigas) introduced from Japan is the pri- mary species cultivated along the Pacific Coast. Some populations have established themselves and spawn naturally, but little use is made of their seed. The reason for this is the development of the remote setting process whereby oystermen have built seed-catching tanks on their own farms or have "eyed" oyster larvae shipped in from private hatcheries for setting. Although the concept of shipping eyed larvae was tried in the 1960s, it did not become a reality on a commercial scale until the late 1970s. One hatchery can produce billions of eyed larvae in any given year and they can be shipped with ease. With practice, growers have a good success rate for seed settlement on material placed in the tanks. Thus, seed production for the Pacific Coast of the United States is no longer a problem. A similar procedure began in 1990 for the American oyster when a hatchery opened . ~ . . In Loulslana. Aside from health considerations arising from human and industrial pollution, there is no indication that disease is widespread in Pacific oysters cultivated on the West Coast. However, oysters in Coos Bay, Or- egon and elsewhere show malformations due to toxic effects of TBT (tributylin) from anti-fouling paints (Wolniakowski et al., 19871. Further- more, the Pacific Coast is increasing production to satisfy the market de- mand generated by problems of disease in oysters cultivated elsewhere. Production of the Pacific oyster in Washington was reported to be 29,378 metric tons in 1988 (Chew and Toba, 1991), exceeding that of American oyster production from the East Coast (including the once most productive Chesapeake Bay area). Gulf of Mexico production is still higher than Wash- ington production. Limitation of submarine leases in the Chesapeake Bay is also a factor. Attempts to grow oysters in closed systems have been extremely expensive. Clams Clam farming in the United States is in its infancy, with most of the aquaculture production coming from the hard clam (Mercenaria mercenaria) and the Manila clam (Tapes japonica) (Chew and Toba, 19911. The hard clam (Mercenaria mercenaria) is a popular bivalve that ranges along the eastern U.S. coast, with subspecies occurring throughout the Gulf of Mexico. Wild stocks of hard clams are becoming scarce, while the spe- cies has become an increasingly popular alternative to the disappearing oyster. Most valuable is the smallest legal size (2 inches long in most states) served raw on the half-shell, bringing as much as $0.25 each to fishermen or growers. Clam farming is a new but growing industry along the entire Atlantic Coast, held back primarily by disease-related problems and regulatory con-

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STATUS 53 Although ocean ranching is perceived by many as producing public and commercial benefits in restoring declining or threatened species, some re- searchers believe that negative interactions with hatchery fish can lead to hybridization, competition, and disease in native populations, and recom- mend that efforts be focused on different strategies to protect them. Among the recommended strategies are the conservation of ecosystems to allow natural reproduction of wild stocks and providing protection for certain species under the Endangered Species Act (Nehlsen et al., 1991~. A new study of these issues is under way by the National Research Council. Two other anadromous fish for which there are significant stock en- hancement efforts are the striped bass and some species of sturgeon. Aug- mentation of freshwater and some estuarine populations of striped bass on the East Coast of the United States became routine in the 1960s, following pioneering hatchery development work at South Carolina's Moncks Corner hatchery (later the Dennis Wildlife Center) (Stevens, 1984~. A similar at- tempt has been made to establish a Gulf of Mexico spawning stock by repeated releases of hatchery-reared juveniles into the Mississippi River system. The species was also introduced into San Francisco Bay, California, in 1879 and 1881. Within 10 years, a major fishery developed and the popu- lation continues to support a popular sports fishery today. When numer- ous water and power projects began to interfere with spawning of striped bass, the California Department of Fish and Game (CDFG) initiated stock enhancement efforts that continue to the present. The species has now expanded its range from southern California to the Columbia River in Oregon. Beginning in 1982, private producers were authorized to receive permits from CDFG to collect wild striped bass broodstock. By 1984 the demand for yearling fish to meet mitigation requirements in California exceeded the CDFG facility's capacity, so private producers were contracted to produce yearling striped bass for release into public waters. From 1982 to 1989, the number of active broodstock permitters increased from 1 to 10, and the number of adult striped bass collected from 26 to 299. In this period, the number of striped bass reared each year reached 1.5 million yearlings/fin- gerlings, which were sold to the State Department of Water Resources and the Pacific Gas and Electric Company for use in fulfilling part of their mitigation requirements. In addition, aquaculturists stocked 147,500 year- ling bass as mitigation for the 1,475 adult bass collected for spawning. Currently, annual mitigation needs of state and private development are for 1 to 2 million yearlings/fingerlings. Overall, the striped bass enhancement program in California involving private aquaculturists has been a success, although a few anglers express concern about damage to spawning migra- tion and disruption of fishing.

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54 MARINE AQUACULTURE In recent years, landings of striped bass from the Chesapeake Bay and surrounding regions have decreased substantially. This decrease was be- lieved to be due to combined effects of overfishing, habitat loss, water pollution, and disease. The difficulty of obtaining ripe broodstock was also a contributing factor. Consequently, a fishery ban was implemented in con- junction with expanded stock enhancement and research efforts. During the past 5 to 6 years, substantial numbers of tagged juvenile striped bass have been released. In 1990, the young-of-the-year juvenile index indicated that the stock had recovered substantially, and restricted levels of commer- cial and recreational harvest were allowed. However, the juvenile index again declined after reopening to limited fishing, so stock enhancement efforts are likely to continue. The striped bass population in the Gulf of Mexico has never been as large as that of the Chesapeake Bay. Still, abundance of striped bass in the Gulf of Mexico has been depressed for a number of years, which has led to continuing efforts to restore these stocks via hatchery releases. However, a strong positive impact of such releases has not yet been detected. Large-scale commercial exploitation of North American sturgeon began around 1860 and by the turn of the century most stocks had suffered drastic declines. Early efforts were undertaken to maintain the fisheries through stock enhancement, but due to a variety of problems, including the diffi- culty of obtaining ripe brood stock and disease, all efforts were abandoned by about 1910 (Harkness and Dymond, 19611. During the past 10 years, a number of small-scale stocking efforts have been initiated with native sturgeon and paddlefish, including the Atlantic sturgeon, Acipenser oxy- rhynchus; the shortnose sturgeon, A. brevirostrum; and lake sturgeon, A. fulvescens; and the paddlefish, Polyodon spathula (Smith, 1986; Smith and Jenkins, 19911. Most efforts have been initiated recently and results to date are only preliminary. However, stock enhancement efforts with sturgeon in the former USSR appear to be highly successful (Binkowski and Doroshev, 19851. Further, populations of the white sturgeon (Acipenser transmon- tanus) in California, which support an important recreational fishery, have been augmented via a program of the California Department of Fish and Game. The salmon, striped bass, and sturgeon discussed above are all anadro- mous species whose juveniles must be reared in fresh water. Hence, their culture for stock enhancement purposes is technically freshwater aquacul- ture, although the fish themselves may be released into brackish or marine waters. The only marine fish that is hatchery reared and released in large numbers for stock enhancement purposes at this time in the United States is the red drum, Sciaenops ocellatus (also known as reddish, spottail bass, and channel bass). Stock enhancement efforts with this species have been going on in Texas since 1983 (McCarty et al., 1986~.

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STATUS 55 In the past several years, other states including Alabama, Florida, and South Carolina have initiated small-scale stocking efforts for red drum. The development of culture techniques and the fact that stocked red drum tend to grow rapidly and remain in the general stocking areas for the first several years make red drum good candidates for stock enhancement efforts. A number of other marine species could also potentially benefit from aquaculture-based stock enhancement efforts. These include haddock, cod, mullet, flounder, and red snapper for commercial use and snook, tarpon, white sea bass, and spotted sea trout for recreational fisheries (Sandifer et al., 19881. Hatchery techniques for the routine mass production of these and other species need to be developed. Once hatchery methods for mass production of juveniles are established, these techniques could be used for commercial aquaculture production as well. Stocks of molluscan shellfish also are enhanced artificially (Manzi, 19901. Virtually all oyster-producing states have some sort of enhancement pro- gram, ranging from the very simple to the complex. At the simple end of the spectrum are state requirements for planting of shell or other clutch material (i.e., material that serves as settling and attachment substrate for oyster spat, as they settle from a planktonic to a sessile, benthic existence) on bottoms each year to replace the shell removed in oyster harvesting operations and to increase the amount of suitable habitat for oyster settle- ment. At the other end is the production and stocking of hatchery-reared seed onto prepared bottoms in public waters (these bottoms generally are leased to private concerns). The use of hatchery technology is widespread in the West Coast oyster industry, of moderate significance in the Northeast, and just becoming es- tablished in the Gulf and south Atlantic states (Manzi, 19901. Hatcheries are believed to be the future of the oyster industry. Stocking of hatchery- reared clams is fairly widely practiced in the Northeast and Northwest, and the largest hatchery-based clam farm in the world is developing in the Southeast. Hatchery-reared scallops also are stocked in the wild in some northeastern states. Another form of enhancement sometimes is used to improve recreational and commercial oyster grounds. Large numbers of oysters are moved, either by hand or by machine, from marginally or moderately polluted or nearly inaccessible areas to established recreational shellfish grounds where, after an appropriate period of self-cleansing (depuration), the stocked grounds are opened for harvest by recreational gatherers. In addition, in some states, hard clams may be harvested from polluted beds, processed through com- mercial deputation plants, and sold. Relatively little effort has been made in this country to enhance stocks of commercially significant crustaceans (lobsters, shrimp, crabs), but some noteworthy attempts do exist. The Commonwealth of Massachusetts, in

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56 MARINE AQUACULTURE particular, attempted to enhance its American lobster stocks via release of hatchery-reared juveniles. A small lobster hatchery on Martha's Vineyard was active from 1951 until a recent setback by a major fire, but results from its more than three decades of releases are ambiguous. Augmentation of wild shrimp stocks with hatchery-reared postlarvae is a well-established practice in some countries, notably Japan. The cost- effectiveness of this type of enhancement is open to serious question, and it has not been attempted to any major degree in the United States. However, some experiments are under way to evaluate the potential for augmenting reproducing shrimp populations following winter kills through the release of wild subadults maintained in captivity over winter. It is believed that these animals would quickly mature and reproduce in the wild, yielding progeny that would subsequently be recruited to the local population at a rate sufficiently high to support some degree of fishing pressure (Sandifer et al., l 991 a,b). ECONOMIC ISSUES Many factors that directly or indirectly affect costs are likely to determine the future success of marine aquaculture businesses. The major costs affecting the economic feasibility of an aquaculture enterprise are summarized below. Regulatory-Permitting Costs The costs of complying with legal and regulatory requirements are sub- stantial in most states. In Maine, for example, a recent survey of salmon farmers indicated that it would take over a year and in excess of $100,000 in fees, research, and legal costs to obtain appropriate permits to begin salmon farming. Furthermore, 70 percent of the respondents expected the permitting and leasing costs to increase (Bettencourt and Anderson, 19901. The permitting process tends to be time consuming and costly, involving a number of federal, state, and in some cases, local agencies. Capital Costs If permits can be obtained, start-up capital costs include the following: ponds, tanks, cages, boats, motors, tractors, anchors, moorings, fish trans- port vehicles, office/warehouse facilities, feed/maintenance shelter, carry- ing/storage containers, and a variety of culture and handling equipment. A recent study of the southwestern New Brunswick salmonid cage culture industry estimated that a 24-cage site producing 91 metric tons of Atlantic salmon would have total capital costs of approximately $220,000 (1987 U.S. dollars), exclusive of site acquisition costs. Cages accounted for nearly 55 percent of estimated costs (Flander-Good Associates Ltd., 19891.

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STATUS 600 400 300 57 Non 1\ J l 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 FIGURE 2-9 Fish meal cash prices in Atlanta 1974-1990. SOURCE: Feedstuffs (various issues). Acquisitions of capital and financing for marine aquaculture are major concerns aggravated by uncertainties about the regulatory environment, costs and output prices, performance of the technology, and growth and mortality rates, and by the capital-intensive nature of much of marine aquaculture technology. In addition, the corrosive saltwater environment and the high cost of coastal land tend to increase costs for marine aquaculture in com- parison to freshwater aquaculture. With the exception of Farmer's Home Administration programs for shellfish farmers, no guaranteed government loan programs exist for marine aquaculture. In general, U.S. banks are reluctant to finance this fledgling industry, and the availability of venture capital is highly variable. These capital constraints inhibit industry growth and tend to foster the predominance of foreign investors in U.S. marine aquaculture. For example, Canadian and Norwegian interests dominate the salmon aquaculture industry in the United States. Investors from Taiwan recently began operating the largest U.S. shrimp farm in Texas. Operating Costs Normal operating costs generally fall into the following categories: smelts/ stock, feed, labor, insurance, processing, marketing fees, ice, gasoline and oil, heating and electricity, office expenses, management, and contract main-

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58 MARINE AQUACULTURE tenance. Flander-Good Associates (1989) estimated operating costs for a 24-cage salmonid site to be on the order of $490,000 per year. The primary operating cost for most marine finfish operations is feed (usually about 30 percent or more). The price of feed is closely tied to fish meal prices, which correlate closely with soybean meal prices and are highly variable (see Figure 2-9~. As aquaculture production increases worldwide, the demand for fish meal and other feed ingredients will increase, possibly driving up feed prices. Developing means by which farmers can achieve better feed conversions and, more important, derive better growth rates per dollar spent on feed is important to the ultimate profitability of aquaculture. Mollusk culture relies on living food, which is usually very expensive com- pared to formulated diets. Feed, in addition to being an essential input, can also be a major source of pollution from marine aquaculture. Pollution, in turn, raises the cost of operations through site degradation and the concomitant negative influence on production, and through fines and/or effluent charges, on permit revoca- tions. To be economically successful, not only must feed and feeding prac- tices be cost-effective to yield more growth, they must result in minimal pollution impacts. Labor is relatively costly in most of the United States compared to many of the countries successfully competing in marine aquaculture. In addition, the aquacultural skill level of the U.S. labor force is relatively low. In- creasing costs for both unskilled and technical labor are likely in the future, which will further erode the profit margin for marine aquaculture. The cost of capital, depreciation, and debt tends to be high in marine aquaculture. A challenge for marine aquaculture is the development of systems (culture systems and auxiliary systems, see Chapter 5) that are effective, yet are not highly capital intensive. Disease transmission among fish, identification and treatment of disease, and its impact on growth and survival all result in increased costs. The negative image of diseased products also may inhibit market success. Marketing Factors Costs of marketing the product to the consumer are often underestimated. For fresh/frozen wild finfish (e.g., salmon), the costs of packaging, process- ing, transportation, and incidentals usually amount to a markup of at least 100 percent from the ex-vessel price to the primary wholesale price. Sec- ondary seafood wholesalers add another 20 to 25 percent markup to the primary wholesale price; and retailers mark up the price by 25 to 35 percent (USDC, 19901. Prices are highly variable in the seafood business, as was observed re- cently in the salmon industry when production temporarily exceeded de-

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STATUS 59 mend in the world salmon market. Clearly, economic feasibility studies and projections based on constant prices must always be used with caution. Successful marketing of substantial amounts of fish may require larger and more aggressive marketing efforts coordinated among suppliers or through the leadership of a dominant firm. The latter case would tend to emulate the poultry industry model. The strongest selling points for promoting the pos- itive benefits of aquacultural products to consumers are the predictability of product quality and the availability. A key criterion for marine aqua- culture R&D is to develop technology that improves these factors to meet the marketing opportunity. Foreign Competition and Trade The United States has few barriers to imports of seafood from abroad. Many foreign marine aquaculture industries obtain assistance from their governments through protective trade barriers (i.e., Canada, Europe, and Japan). Additional public support is provided through research and devel- opment funds (Norway and Scotland), subsidized transportation (Norway), price supports (Norway), government loan assistance (Canada, Norway), and subsidized market research and development for aquaculture (Canada, Norway, Ireland, Scotland). More discussion of other countries' policies is provided in Appendix A. Unlike U.S. agriculture, U.S. marine aquaculture products are at a disadvantage with foreign competition on the world market. It is apparent that a number of opportunities exist to reduce the costs of production and marketing through advances in technology, thereby improv- ing the competitiveness of the U.S. marine aquaculture industry. Technol- ogy, however, can be effective only if a number of institutional, regulatory, and environmental issues are addressed through the public policy process. Many marine aquaculture technologies and marine species are speculative at this point. Most of the intensive onshore marine systems must be consid- ered speculative, as should offshore systems that are truly exposed to the open ocean environment. NOTES Production figures in wet (fresh) weight are rounded throughout this report because of inconsistency or disagreement of more refined estimates in the literature. Weight of mollusks includes that of shells; when only meat weight is given in source material, the assumption is made that meat weight equals 20 percent of total weight. 2U.S. per capita consumption figures include domestically cultured oysters, clams, and cat- fish, but do not include domestically cultured salmon, trout, or other species (U.S. Department of Commerce, National Marine Fisheries Service, Fishery Statistics Division, personal commu- nication, 1991). 3Extensive culture: Low density in a large area (usually a natural water body), requiring little or no supplementary feeding or environmental management. Production costs are low;

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60 MARINE AQUACULTURE however, lack of control means that production rates are low (<2,000 lbs/acre) and un- predictable. Intensive culture: Medium to high density, contained in an enclosed area with control of feeding and detrimental factors in the natural environment. Investment costs are high, but there is generally more predictability of outcome, and production rates are higher (<2,000 lbs/acre). Systems are susceptible, however, to stress, disease, and reduced growth from crowding. REFERENCES Anderson, J., and J. Wilen. 1986. Implications of private salmon aquaculture on prices, production, and management of salmon resources. American Journal of Agricultural Economics. 68~4~:866-879. Bailey, R. 1988. Third world fisheries: Prospects and problems. World Develop- ment 16:751-757. Bettencourt, S., and J.L. Anderson. 1990. Pen-Reared Salmonid Aquaculture in the Northeastern United States. U.S. Department of Agriculture, Northeast Regional Aquaculture Center Report 100. Kingston, R.I. Binkowski, F.P., and S.I. Doroshev. 1985. Epilogue: A perspective on sturgeon culture. Pp. 147-152 in North American Sturgeons: Biology and Aquaculture Potential, F.P. Binkowski and S.I. Doroshev, eds., Dr. W. Junk Publishers, Dordrecht. Boyce, J. 1990. A Comparison of Demand Models for Alaska Salmon, Department of Economics, University of Alaska, Fairbanks, under contract with Fisheries Research and Enhancement Division, Alaska Department of Fish and Game, Au- gust. 1 02 pp. Chamberlain, G.W. 1991. Status of shrimp farming in Texas. Pp. 36-57 in Shrimp Culture in North America and the Caribbean, P.A. Sandifer, ed. The World Aquaculture Society, Baton Rouge, La. Chamberlain, G.W., R.J. Miget, and M.G. Haby (compilers). 1990. Red drum aquaculture. Texas A&M Sea Grant College Program No. TAMU-SG-90-603. College Station, Tex. Chew, K.K., and D. Toba. 1991. Western region aquaculture industry: Situation and outlook report. Western Regional Aquaculture Consortium, University of Washington, Seattle, 23 pp. Council of Economic Advisors. 1989. Annual Report of the Council of Economic Advisors. Washington, D.C. U.S. Government Printing Office. Doroshov, S.I. 1985. Biology and culture of sturgeon, Acipenseriformes. Pp. 251- 274 in Recent Advances in Aquaculture, Vol. 2. James F. Muir and Ronald J. Roberts, eds. Boulder, Colo.: Westview Press. Economic Report of the President. 1991. U.S. Government Printing Office, Wash- ington, D.C. Feedstuffs, The Weekly Newspaper for Agribusiness. Various issues, 1974-1990. Miller Publishing Co., Mannetorka, Minn. Flander-Good Associates. 1989. Economic Assessment of Salmonid Cage Culture Industry in Southwestern New Brunswick. Fredericton, New Brunswick. 105 pp. Food and Agriculture Organization (FAO). 1990. FIDI/C:815 Revision 2; as re- ported in Fish Farming International 17~8~:12-13.

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STATUS 61 Food and Agriculture Organization (FAO). 1991. P. 145 in FAO Yearbook, Fishery Statistics, Catches and Landings, Vol. 68, 1989, Rome. Gulland, J.A. 1971. The Fish Resources of the Ocean. Surrey: Fishing News Books Ltd. 255 pp. Hagood, R.W., G.N. Rothwell, M. Swafford, and M. Tosaki. 1981. Preliminary report on the aquaculture development of the dolphin fish, Coryphaena hippurus (Linnaeus). Journal of the World Mariculture Society 12~1):135-139. Harkness, W.J.K., and J.R. Dymond. 1961. The Lake Sturgeon, the History of Its Fishery and Problems of Conservation. Toronto, Ontario Department of Lands and Forests. 121 pp. Hjul, P. 1973. FAO conference on fishery management and development. Fishing News Internal. (May):20-35. Holt, G.J. 1992. Experimental studies of feeding of larval red drum, J. World Aquaculture Society. (In press.) Hopkins, J.S. 1991. Status and history of marine and freshwater shrimp farming in South Carolina and Florida. Pp. 17-35 in Shrimp Culture in North America and the Caribbean, P.A. Sandifer, ed. Baton Rouge, La. The World Aquaculture Society. Hughes, J.T., J.J. Sullivan, and R. Shleser. 1972. Enhancement of lobster growth. Science 177:1110-1111. Kraul, S. 1992. Larviculture of the mahimahi, Coryphaena hippurus in Hawaii, USA. Journal of the World Aquaculture Society. Manzi, J.J. 1990. The role of aquaculture in the restoration and enhancement of molluscan fisheries in North America. Pp. 53-56 in Marine Farming and En- hancement, A.K. Sparks, ed. Proceedings of the 15th U.S.-Japan Meeting on Aquaculture. Kyoto, Japan, October 22-23, 1986. NOAA Tech. Report NMFS 85. Mayo Associates. 1988. An Assessment of Private Salmon Ranching in Oregon. Prepared for the Oregon Coastal Zone Management Association, Inc., Seattle, Washington. 85+ pp. McCarty, C.E., J.G. Geiger, L.N. Sturmer, B.A. Gregg, and W.P. Rutledge. 1986. Marine finfish culture in Texas: A model for the future. In Fish Culture in Fish Management, R.H. Stroud, ed. American Fisheries Society, Washington, D.C. McNeil, W.J. 1988. Salmon Production, Management, and Allocation Biological Economic and Policy Issues, W.J. McNeil, ed. Oregon State University Press. Meriwether II, F.H., E.D. Scura, and W.Y. Okamura. 1983. Culture of red tilapia in freshwater prawn and brackish water ponds. Proceedings, 1st International Conference on Warm Water Crustacea, Brigham Young University, Laie, Ha- waii: 260-267. Meriwether II, F.H., E.D. Scura, and W.Y. Okamura. 1984. Cage culture of red tilapia in prawn and shrimp ponds. Journal of the World Aquaculture Society 15 :254-265. Naef, F.E. 1971. Pan-size salmon from ocean systems. Sea Grant 70's 2(4):1-2. Nehlsen, W., J.E. Williams, and J.A. Lichatowich. 1991. Pacific salmon at the crossroads: Stocks at risk from California, Oregon, Idaho, and Washington. Fisheries 16(2) :4-21.

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62 MARINE AQUACULTURE Pillay, T.V.R. 1976. The state of aquaculture 1976. In Advances in Aquaculture, T.V.R. Pillay, and W.A. Dill, eds. Surrey: Fishing News Books Ltd. Pruder, G.D. 1991. Status of shrimp farming in Texas. Pp. 36-57 In Shrimp _ A Culture in North America and the Caribbean, P.A. Sandifer, ed. Baton Rouge, La. The World Aquaculture Society. Putnam, J.J., and J.E. Allshouse. 1991. Food consumption, prices, and expendi- tures 1968-1989. Statistical Bulletin No. 825. U.S. Department of Agriculture, Economic Research Service, Washington, D.C. Ricker, W.E. 1969. Food from the sea. In Resources and Man, P. Cloud, ed. Chicago: Freemand and Company. 290 pp. Rosenberry, R. 1991. World shrimp farming. Aquaculture Magazine (September/ October):60-64. Royce, W. F. 1989. A history of marine fishery management. Aquatic Sci. 1:27-44. Ryther, J. H. 1969. Photosynthesis and fish production in the sea. Science 166:72- 76. Sandifer, P.A. 1991. Species with aquaculture potential for the Caribbean. Pp. 30- 60 in Status and Potential of Aqualture in the Caribbean, J.A. Hargreaves and D.E. Alston, eds. World Aquaculture Society. Sandifer, P.A., J.S. Hopkins, A.D. Stokes, and R.A. Smiley. 1988. Experimental pond grow-out of the red drum, Sciaenops ocellatus, in South Carolina. Journal of the World Aquaculture Society 19~1):62A (abstract). Sandifer, P.A., J.S. Hopkins, A.D. Stokes, and G. D. Pruder. 1991a. Technological advances in intensive pond culture of shrimp in the United States. Frontiers of Shrimp Research. Elsevier. New York, N.Y. Sandifer, P.A., A.D. Stokes, and J.S. Hopkins. 1991b. Further intensification of pond shrimp culture in South Carolina. In Shrimp Culture in North America and the Caribbean, P.A. Sandifer, ed. World Aquaculture Society. Smith, T.I.J. 1986. Culture of North American sturgeons for fishery enhancement. Proceedings of the 15th U.S.-Japan Meeting on Aquaculture, Kyoto, Japan, Octo- ber 22-23. NOAA Tech. Report NMFS 85:19-27. Smith, T.I.J., and W.E. Jenkins. 1991. Development of a shortnose sturgeon, Acipenser brevironstrum, stock enhancement program in North America. In Acipenser Sturgeon: Proceedings of the 1st International Bordeaux Symposium 1989, CEMAGREF, Bordeaux, France. Patrick Williot, ed. 520 pp. Stevens, R.E. 1984. Historical overview of striped bass culture and management. Pp. 1-15 in The Aquaculture of Striped Bass: A Proceedings, Joseph P. McCraren, ed. College Park, Md: University of Maryland. Pub. No. UM-SG-MAO-84-01. Szyper, J., R. Bourke, and L.D. Conquest. 1984. Growth of juvenile dolphin fish. Coryphaena hippurus, on test diets differing in fresh and prepared components. Journal of the World Mariculture Society 15:219-221. Tilseth, S. 1990. New marine fish species for cold-water farming. Aquaculture 85 :235-245. Urner Barry. Various issues, 1985-1990. Seafood Price: Current. Tom's River, N.J. U.S. Department of Agriculture (USDA). 1990. Outlook for U.S. Agricultural Ex- ports. Foreign Agricultural Service, Economic Research Service. Washington, D.C.

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STATUS 63 U.S. Department of Commerce (USDC). 1990. Fisheries of the United States. NOAA/NMFS, Washington, D.C. Van 01st, J.C., and J.M. Carlberg. 1990. Commercial culture of hybrid striped bass. Aquaculture Magazine 16~1):49-59. Virginia Sea Grant. 1990. A plan for addressing the restoration of the American oyster industry. Virginia Sea Grant College Program, USG-90-02. Wilson, J., and D. Fleming. 1989. Economics of the Maine mussel industry. World Aquaculture 20~4):49-55. Wolniakowski, K., M. Stephenson, and G. Ishikowa. 1987. Tributyltin concentra- tions and oyster deformations in Coos Bay, Oregon. Pp. 1438-1442 in Oceans '87 Proceedings, Vol. 4, International Organotin Symposium.