Marine Aquaculture: Opportunities for Growth (1992)

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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

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

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.

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).

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).

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).

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).

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'

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

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.

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-

31 ~ _ - 1 >: 1 2~ _ _ i: f ~ ~~ _ kin i'1 ~~ ~ .~ it_ ~ r '~ ~~ _ _: - - 1 Newly set hard clams are grown in "upwellers" in an indoor nursery to the size of about 3mm before moving to outdoor culture systems.

32 MARINE AQUACULTURE Bay scallops (Argopectin irradiens) grown in Chinese "lantern" nets suspended from buoyed lines in a start-up commercial venture in Massachusetts. straints on leasing and harvesting. The technology for clam culture is well developed, including hatchery production of seed; however, production of algal food for hatchery and nursery operations is a severe economic and technical constraint in most areas. Research on inexpensive replacements for algae has been largely unsuccessful. Bottom (buried) culture, which is usually done in enclosures or under protective netting, is the only existing technique for growing hard clams.

STATUS 33 Off-bottom culture has not proved successful, but it also has not been ad- equately evaluated. The demonstration that hard clams can be grown to marketable (little neck) sizes at densities of 100 per square foot of bottom in small experimental systems has led to unrealistic commercial projections (e.g., millions of clams per acre) in some cases. Environmental modeling based on available food, water circulation, and other variables is needed to be able to predict the carrying capacity of a given environment for cultured clams as well as for other bivalves. The Manila clam (Tapes japonica) was introduced inadvertently with Pacific oyster seed shipments from Japan and now has grown to be a major component of the shellfish production for the state of Washington. Natural brood stocks have been established for the Manila clam, and with the in- crease in demand, new hatcheries have been built to produce Manila clam seed for planting on open natural beds or with clam netting over natural beds. New techniques are needed for growing this important clam species, such as using cages or shell bags. The geoduck clam (Panopea generosa spp.) is also cultured for planting. These clams are spawned in the hatchery and cultivated through a nursery system, then planted back in the subtidal geoduck grounds. Further re- search is needed to increase the survival rate of these clams after two to three years. The wholesale value of all domestic clams was approximately $280 million in 1988 (Chew and Toba, 1991~. Scallops Scallop culture is well developed elsewhere in the world, but it is in an early exploratory phase in the United States. The technology is much the same as for other bivalves. Seed are collected from the wild or grown in hatcheries by using the same basic methods as for clams and oysters. Seed are grown to marketable size on the bottom, in suspended lantern nets, or in other off-bottom devices. A shorter grow-out time is an advantage of most scallops over clams and oysters; usually, scallops require about one year or less from the egg. As yet, no established commercial scallop culture proj- ects exist in the United States, although several small companies are in the start-up phase. Mussels The blue mussel (Mytilus edulis) is an extremely popular shellfish in Europe and Asia, but its use as food is just now becoming accepted in the United States, where a budding industry is developing on both coasts. Where mussels are naturally abundant, collection of wild seed (on ropes or other substrata) is so easy as to preclude the need for hatcheries. Seed are grown

34 MARINE AQUACULTURE out on ropes where legally permissible or on cleared bottom. The major constraints to mussel culture have been a limited market and low value for the product, exacerbated by the ready availability of wild stocks. Findings of paralytic shellfish poisoning (PSP) in mussels have also dampened consumer demand. The market is expanding gradually, but its growth prob- ably could be accelerated. Approximately 4,000 metric tons of mussels were grown in the United States in 1988 (FAO, 1990), mostly in Maine (Wilson and Fleming, 19891. Crustaceans Shrimp A great deal of enthusiasm for shrimp aquaculture has resulted from commercial successes in Ecuador, Taiwan, China, Japan, and Indonesia. Particularly noteworthy has been the ability of these industries to develop significant export earnings (or reduced imports, as in the case of Japan). The United States constitutes the world's largest market for shrimp and is one of the leading countries in the development of shrimp farming tech- nology. However, the United States lacks some of the factors contributing to the success of shrimp culture in other countries large expanses of inex- pensive and undeveloped land adjacent to estuaries, cheap labor, abundant natural supplies of postlarvae and brood stock of preferred species, year- round growing conditions, and lack of environmental regulation. Domestic shrimp farms are relatively few (probably no more than 25 to 30 nationwide) and range in size from perhaps 1 to more than 400 acres (Chamberlain, 1991; Hopkins, 1991; Pruder, 1991~. Farms are located princi- pally in Hawaii, South Carolina, and Texas. Extensive to intensive technol- ogy3 is employed in South Carolina. In Hawaii and Texas farms tend to be principally semi-intensive in operations, although research on intensive tech- nologies is going on in all three states (Chamberlain, 1991; Pruder, 1991; Sandifer et al., l991a,b). Total U.S. production of farmed shrimp in 1990 was estimated at 900 metric tons (on a head-on basis) (Rosenberry, 1991~. A number of shrimp operations have failed in the United States, but many of these failures occurred before production technology had devel- oped to the point it is at today. In particular, technology for intensive production of marine shrimp in ponds appears to be making U.S. production more competitive with foreign shrimp farmers. Technology aimed at dimin- ishing the disadvantages of high-cost land and labor, as well as temperate climatic factors, is necessary (Sandifer et al., l991a,b). Major technological constraints facing domestic producers include a supply of specific pathogen- free stocks of the preferred species (Penaeus vannamei), reduction of bio- chemical oxygen demand (BOD) and nutrient loading in wastewater ef-

STATUS a_ - - Shrimp jumping as an intensive culture pond in South Carolina is drained. fluents, and the need for genetically improved stocks, better feed, and disease control. Major factors restricting success of shrimp farming in the United States at present are · a variety of regulatory problems, especially related to effluent waters; · lack of a native species with preferred characteristics for culture (nearly all U.S. culture operations are based on nonindigenous species); · limited availability of postlarvae at times of greatest demand; · disease concerns; · insufficiently refined technologies for maintaining and routinely reproducing completely closed brood stock populations; · high cost of major inputs (i.e., land, labor, equipment, electricity, feed, money); and · "softening" of prices for sizes of shrimp most readily produced by aquaculture (see Figure 2-61. Shellfish Opportunities A focus of aquaculture research efforts in the 1970s was the American lobster (Homarus americanus). This interest was fueled by supply limits,

36 ~__1 ! _ 1 _ ~ _ , - _~_ by: ~ _ ~ _ ~ i.: ::~ MARINE AQUACULTURE _- _= F;~ I By_ ~5: _I ___; _; _d ~ ~ 'a ~ ' _ 4,~ ~ i': - , A ~ ~ ~ 9. O , ~ ~ at: At', ¢: ~ ~T ~~ ~~ ~ _ l ~;;~ _ _ _ ~l,,'` hi_ ~ 1 - - ;''e - - E' - - I_ Hi_ :~ ~ 1 Raceway-recirculating system for rearing and harvesting of shrimp. US $/lb 5 4 3 .~...._ .~ _ 1 by..._ n- ~ 79 80 81 82 83 84 85 86 87 88 89 FIGURE 2-6 Real prices of U.S. imports of shrimp, 1979-1989. NOTE: Prices are adjusted by the consumer's price index for food (1982-1984 = 100). SOURCES: U.S. Department of Commerce, Fisheries of the United States (various issues), and the Consumer Price Index, February, 1990.

STATUS 37 market image, and a relatively high price for the species. The American lobster defies commercial cultivation because of its aggressive nature that makes it necessary to grow each lobster separately. Although this has proved uneconomical to date, the escalating value of lobsters, particularly in for- eign markets, may change the economics in the near future. Except for solving the intractable problem of cannibalistic behavior, the technology for rearing lobsters, including hatchery production of juveniles, is well estab- lished. However, a pelletized artificial feed of the proper consistency and nutritional value has yet to be developed. Lobsters maintained at 22-24°C can be reared from the post-larval to a one-pound marketable size in less than two years (Hughes et al., 1972~. From 1980 to 1989, domestic production increased almost continuously to a record 52.9 million pounds (USDC, 1990~. During the same period, im- ports of fresh and frozen lobster tripled to 69.1 million pounds in 1989. Lobster prices have increased steadily in spite of these record landings and imports. Researchers have encountered difficulty in reducing costs. With A nursery for rearing juvenile American lobsters (Homarus americanus), which must be kept separated because of cannibalism.

38 MARINE AQUACULTURE producer prices of lobster ranging from $1.75 to $4.00 per pound, a tech- nology breakthrough may be essential for the commercial culturing of this species to become economically feasible. Technologies to improve genetic selection for rapid growth and survival, and to address the cannibalistic nature of the lobster, would greatly aid economic feasibility. The spiny lobster (Panulirus) of Florida and the Caribbean cannot yet be crown through its many larval stages routinely although Innnne~e .~cie.nti~ have carried a few individuals through. Postlarval spiny lobsters (pueruli) can be collected readily as they metamorphose from the planktonic to benthic habit, sometimes in very large numbers, and these may be grown out to marketable size in 12 to 18 months in captivity with no great diffi- culty. The spiny lobster does not share the cannibalistic nature of the homarids and would, therefore, be preferable for commercial culture. How- ever, collection of pueruli from the wild is unacceptable in most places because of concerns about potential impacts on natural populations and fisheries. Thus, spiny lobster culture most probably must await perfec- tion of the technology for rearing the animal throughout its entire life cycle. Abalone also has potential for development. The current market for aba- lone is not large but the product commands a good price. Companies in California and Hawaii are in the early stages of commercialization. Culture systems for abalone, unlike other mollusks, are based onshore; seawater is pumped to some form of tank or raceway facility that has an abundance of support surfaces for the animals to attach to during grow-out. There is no true culturing of crabs, although some portunid crabs are reared in farm operations in Southeast Asia. However, large numbers of premolt blue crabs (Callinectes sapidus) are captured and held in shallow floating cages or tanks (both flow-through and recirculating) until they molt to the soft-shelled stage (ecdysis), at which time they are harvested and sold as a delicacy. The technology is well established and simple, and the industry is growing; however, improvements in holding and "shedding" systems, especially recirculating ones are needed. The greatest restriction is the supply of premolt crabs from the wild. Research is focusing on ways to easily and inexpensively stimulate ecdysis in large groups of crabs more or less simultaneously. Finfish Salmon Floating cage or net-pen culture (see Chapter 5) of growing Pacific salmon to "pan size" over one season (i.e., one season postmolt) originated in the Puget Sound area of Washington in the early 1970s (Naef, 19711. Never

STATUS 39 Raceway system for onshore production of abalone (the Abalone Farm, Cayucos, California). The raceways contain a maze of support surfaces onto which the aba- lone attach. Seawater is pumped to the facility; seaweed is harvested from the ocean and placed in the raceways to feed the animals. The roughened water surface is caused by the water aeration system. highly successful, that practice has now all but disappeared. During the 1980s however, the Norwegians began cage culture of Atlantic salmon over two growing seasons (i.e., 18 months from smolt) to produce fish that aver- aged 4 to 5 kilograms (kg). This practice proved highly successful and spread quickly around the world, including the United States and Canada. Foreign ventures have often been started by Norwegians, who were con- strained by law from further expansion within their own country. The United States has limited availability of suitable coastal farm sites. However, undeveloped sites exist in Maine; Washington has numerous sites that would be suitable for salmon farming in the Puget Sound area; and

40 MARINE AQUACULTURE Alaska has literally thousands of miles of coastline that would be ideally suited for the development of salmon farming. In Washington, Alaska, and Maine, the development of salmon farms is impeded by local and state regulations. The Alaska legislature has mandated a moratorium on the de- velopment of private, for profit salmon farming. Washington has developed a complicated but orderly process for licensing and regulating salmon farms in the Puget Sound area, but the costs of compliance are substantial, and they have tended to discourage investment in the development of salmon farms in the area. For the above reasons, many entrepreneurs, including Norwegian and other foreign investors, who initially attempted to establish salmon farms in Maine and Washington, moved north to British Columbia Atlantic salmon and rainbow trout cage culture in Maine.

STATUS 41 l C Aim. . IF,: ~ ~ ' -1 ~ _ ~ ~ ~ .i: by. ' ~~.~ >Ike ~ ~ ~ ~ ~ ~' ~~ ~ ~ I, ~ ~ .~ ~ |~ ~ se ~ ~— ~ ._ ~ _ a_ _ _3 - _ _ _ ~1 Atlantic salmon net cage culture in Norway. and New Brunswick where legal constraints were less onerous. By the late 1980s, there were 175 operational salmon pen culture sites in Canada and 26 in the United States (Bettencourt and Anderson, 19901. Although most salmon farms involve culture in cages, some limited production occurs in tanks or raceways located onshore. One such opera- tion in California pumps seawater into tanks located a short distance inland. In 1989, Norway, the acknowledged leader in salmon aquaculture, pro- duced 116,164 metric tons of farmed Atlantic salmon (FAO, 19911. Be- cause this followed an unusually productive season for farmed salmon (see Figure 2-7), as well as for wild-caught salmon, the price dropped precipi- tously (see Figure 2-8) to a level that was, in most cases, below the cost

42 $6 - $5 - $4 $2 MARINE AQUACULTURE Live Weight (Thousands MT) 300 250 Inn - 150 100 o - 80 81 82 83 84 85 86 87 88 89 90 FIGURE 2-7 World supply of farmed Atlantic and Pacific salmon, 1980-1990. SOURCES: Compiled from 1980-84: U.S. Department of Commerce Import Statistics (various years). 1985-1989: Food and Agriculture Organization. 1989- 1990: estimated. US $/lb. b J ~ ~ _3-4 Kg A ~ O ~ A J ~ J A J ~ J A i ~ ~ A ~ O 85 1 86 ~ 87 ~ SS ~ 89 90 FIGURE 2-8 Price variation of fresh Norwegian mid-Atlantic salmon, 1985- 1990. NOTE: Prices are adjusted by the monthly consumer price index (1982- 1984=1001. Prices are for first receivers in the mid-Atlantic region, for whole, head-on fish. SOURCE: Urner Barry Seafood Price: Current (various issues); Economic Report of the President (various issues).

STATUS 43 of production and that drove several companies out of business almost immediately. The industry had not yet recovered at the time this report was written. Before the salmon market crash of 1989, most U.S. farms were just beginning to approach profitability. Current performance of the industry is therefore difficult to assess. In 1989, farmed salmon and steelhead pro- Red drum eggs, approximately 15 hours old. Red drum, yolk sac stage, 1 day old.

44 MARINE AQUACULTURE ~ ::~ :::~ :~:~: I-: ~~::~ ~ :: :::: ,Li; ~ ,, A; Red drum adult in spawning tank. auction in the northwestern United States was reportedly 2,309 metric tons (J. Pitts, Market Development Division, State of Washington Depart- ment of Agriculture, personal communication, 1991), and Maine produced an estimated 1,440 to 1,650 metric tons (Bettencourt and Anderson, 1990). - Red Drum Red drum (Sciaenops ocellatus), which is known also as reddish, is com- mon in south Atlantic and Gulf of Mexico waters, where it is esteemed highly by sports fishermen and consumers. A great deal of interest in the culture of red drum has developed in recent years owing to increased con- sumer appeal, implementation of fishing restrictions (particularly limiting commercial take), and development of technology to produce fingerlings for stock enhancement programs. Techniques for captive reproduction and fingerling production are fairly well established (Chamberlain et al., 1990). Approaches to grow-out have been developed both for pond and for tank culture.

STATUS 45 At present, interest in establishing commercial red drum farms is focused primarily in the south Atlantic and Gulf states. Experimental grow-out in South Carolina yielded harvests of 9,000 to 24,000 kg per hectare of 1-kg fish, depending on stocking density (Sandifer et al., 1988~. The grow-out period was approximately 18 to 20 months for a 1- to 5-kg fish, but the production of 1-kg fish in approximately 12 months in a more tropical envi- ronment is projected (Sandifer, 1991~. A commercial farm on Galveston Bay, in Baycliff, Texas, specializes in the closed-system tank culture of red drum. Temperature and photoperiod controls produce eggs on demand. Larvae are stocked at densities of 200,000 per 300-gallon tank. After being weaned to dry food, fry are grown to fingerling size in 1,500-gallon tanks and 6- to 8-inch fingerlings are then reared in 27,000-gallon tanks for final grow-out to 1-kg marketable fish. Fingerlings stocked in spring are ready for harvest by October or November, thereby avoiding lethal winter temperatures. Grow-out tanks are closed, recirculating systems using mechanical particulate filters, biological (biodisc) filters, and oxygen injection (Holt, 1992~. During peak commercial production from natural fisheries, the wholesale red drum market was approximately $30 million. Development of culture techniques can serve to bring this food fish back to consumers. _ of_ i__ a_ Go__ I ~~— Production facility (the Fishery, Sacramento, California) for culturing striped bass, white sturgeon, and catfish. Hatchery operations are sheltered by the open shed (right centers. Sturgeon and some other fish are reared in tanks (foreground), and striped bass and catfish are reared in ponds (barely visible beyond the buildings). Water discharge from the tanks flows to the ponds.

46 MARINE AQUACULTURE Red snapper (Lutjanus campechanus) in spawning tank. Other Marine Finfish Of the various warmwater marine finfish species, striped bass (Morone saxatilis), white sturgeon (Acipenser transmontanus), and hybrids with its freshwater cogeners (M. chrysops, M. mississippiensis) appear to have the greatest near-term potential for commercial development in the United States. In general, the hybrids have proved to be more hardy and otherwise more suitable for aquaculture. The striped bass itself is anadromous, and both it and its hybrids grow equally well, if not better, in hard freshwater than in seawater. All of the early commercial ventures at growing hybrid striped bass are based on freshwater systems. However, some people believe that cultivation in coastal salt or brackish water ponds will ultimately prove more successful, both technically and economically, than the initial com- mercial efforts to grow the hybrids intensively in tanks using pumped geo- thermal freshwater (Doroshov, 19854. Both striped bass and white sturgeon have been shown to have potential for commercialization in California. Both are anadromous and have been cultured successfully in tanks and ponds using fresh water. Although typically reared in fresh water, saltwater culture of some spe- cies of tilapia and their red hybrids is now showing economic promise in

STATUS 47 several countries, including the United States. In Hawaii and the Carib- bean, the growth of a red hybrid was found to be significantly greater in cages placed in brackish water shrimp ponds than in freshwater ponds (Meriwether et al., 1983, 1984~. The dolphin mahimahi (Coryphaena hippurus) has been spawned and reared in captivity in Hawaii and has exhibited impressive growth rates, reaching 1.3 kg in 130 days from hatch (Hagood et al., 1981~. Regular spawning in captivity has been demonstrated (Kraul, 1992) and is essen- tially routine. The species is pelagic and piscivorous, however, which sug- gests that a high amount of natural marine foods would have to be incor- porated into its diet. Nutritional studies confirmed the high requirement for animal foods but indicated that a substantial portion (perhaps as much as 50 percent) could be replaced with much less expensive plant-based foods such as catfish feed (Szyper et al., 19841. A number of other marine finfish species that are harvested in capture fisheries in U.S. waters are attractive candidates for marine aquaculture. These include halibut, swordfish, shark, flounder, sole, cod, rockfish, pom- pano, snapper, grouper, and weakfish. Production of these species, how- ever, will require development of new technologies. Many species require a long growing period to produce a marketable product. In addition, eco- nomical hatchery and grow-out techniques have not been developed for most of the species, many of which have complex early life histories in- volving one or more metamorphoses between life stages. Although some of these species have been cultured successfully in the laboratory, additional research is required to develop economical methods for their artificial propagation (Tilseth, 19901. Algae Macroscopic Algae (SeaweedsJ Seaweeds are grown commercially in China, Japan, Taiwan, Korea, and the Philippines, both for human food and for extraction of the polysaccha- rides agar, algenic acid, and carrageenan. Depletion of wild stocks, particularly of agarophytes, has enhanced the value of these seaweeds to $1,000 or more per dry ton and has made their cultivation more attractive. However, no commercial seaweed farms for polysaccharides currently exist in the United States. A small commercial project is under way near Halifax, Nova Scotia, for cultivation of Chondrus crispus (Irish moss), a carrageenan source. The most popular and valuable edible seaweed is Porphyra (nori), grown extensively in Japan. A state-supported research project in Washington, in which the Japanese technology was closely followed, led to initial start-up

48 MARINE AQUACULTURE Algae (Tetraselmis chuil) produced as food for rotifers, which are in turn fed to larval fish. of several small commercial nori culture projects in the Puget Sound area. Objections to these raftlike operations, on aesthetic or environmental grounds, have caused most if not all of them to close down or move (mostly to British Columbia). Nevertheless, the current importation of more than $50 million worth of nori from Japan for Asian populations in the western United States and Canada, and for increasingly popular "sushi bars" through- out the country, makes culture of this seaweed commercially interesting. Unicellular Algae (PhytoplanktonJ Several species of unicellular algae are grown routinely throughout the world as food organisms for larval and juvenile mollusks and crustaceans. Culture systems range from tanks and cylinders in hatcheries to outdoor ponds an acre or more in size. Although small-scale culture (100 gallons or less) has become routine, large-scale algal culture, particularly in outdoor ponds, has proved difficult for two major reasons: (1) inability to control

STATUS 49 the species composition in culture and thereby to prevent undesirable spe- cies from taking over, and (2) predation from microcrustaceans, protozoans, and other animals accidentally but inevitably introduced into the system. Algal culture is probably the most difficult and costly component of shellfish hatchery operations. The high cost of harvesting microscopic al- gae from water by centrifugation, filtration, or flocculation has always made algae culture economically problematical for low-value products (e.g., feed), but production of high-value chemicals has changed the economic picture. For example, certain unicellular algae contain pigments or other fine chemicals of high value. A commercial firm in Hawaii and two in south- ern California currently grow two species (the blue-green Spirulina spp. and the flagellate Dunaliella salina) for such products, most of which are exported to Japan. These algae have unusual environmental requirements- high carbonates for Spirulina and hypersalinity for Dunaliella, both of which deter contamination from other algae and predators. The chemicals required are costly to replenish, so a recirculating system is used for their cultivation. A few other small commercial marine aquaculture projects produce unicellular algae in the United States, but their status is not known. MARINE FISHERIES ENHANCEMENT Marine fisheries/stock enhancement is the release or stocking of hatch- ery-reared juvenile fish, mollusks, crustaceans, or other organisms into a natural marine environment where they will supplement the existing popu- lation and thereby expand opportunities for harvesting, rebuilding declining populations, or establishing new populations. These activities take two forms: (1) mitigation for the purpose of replacing natural regeneration that has been destroyed by human development such as dams, and (2) enhance- ment for the purpose of augmenting natural runs that are overfished or declining naturally. Effective public and private efforts can contribute to replenishing of endangered and threatened species as well as commercially and recreationally important ones. Historically, the practice of fisheries enhancement dates back to before the turn of the century, when the Bureau of Commercial Fisheries released countless thousands of newly hatched larvae of several species of commer- cially important marine fish in a vain attempt at augmenting natural stocks. The practice of stock enhancement was initially conceived as an attempt to mitigate the loss of natural reproduction due to overfishing, the construction of dams (which prevented anadromous species from reaching their breeding grounds), and water pollution. However, the early practice of simp- ly releasing newly hatched fry was soon recognized as ineffective, and it was discontinued.

so MARINE AQUaCULTURE Despite the initially disappointing results, procedures and technology have been developed over time to the point where several species of anadromous and marine fish and invertebrates are now reared in hatcheries and the young released to the environment in attempts to enhance declin- ing populations of commercial, recreational, and endangered species. The hatchery production of juveniles for such purposes is clearly aquaculture; however, their subsequent growth within and harvest from the natural envi- ronment following their release cannot be so designated. Once they are released, no further human manipulation or control is involved, and the fish frequently become indistinguishable from wild fish sought by capture fishermen. The most widely recognized enhancement and mitigation activities are through federal (U.S. Fish and Wildlife Service and the National Marine Fisheries Service) and state hatcheries in producing juvenile fish for stock- ing in public waters (both fresh and marine) to rebuild and augment fish stocks where populations have declined due to over-exploitation, habitat loss or degradation, or a combination of the two. The agencies also are involved in introducing new species or strains into U.S. waters, including walleye and northern pike in several states outside their native range and striped bass on the West Coast. Current planting of fish in public waters (fresh and marine) by federal and state hatchery systems exceeds 40 million pounds per year. By far the largest of these efforts in the marine environment involves Pacific and At- lantic salmon, with significant public efforts on both the Pacific and Atlan- tic coasts of the United States to mitigate extensive losses from develop- ment activities such as hydropower, fishing, logging, mining, agriculture, and urban growth (Nehlsen et al., 1991~. Adult fish are strip-spawned, the eggs are incubated, and the larvae are reared in hatcheries. The juvenile fish are reared in fresh water to the size of smelts, the stage at which they undergo the physiological change that enables them to live in saltwater, after which they are released. Federal, state, and private nonprofit hatcheries from California to Alaska now release upward of one billion Pacific salmon smelts annually. Due to the historically large public role in production of salmon and other species, fishery enhancement and the rehabilitation of stocks of threat- ened or endangered species have been traditionally considered as responsi- bilities of public agencies (McNeil, 1988~. However, Oregon allows private entrepreneurs to produce and release smelts and then recapture a portion of the salmon that return for their own use. Currently 12 private salmon hatch- eries in Oregon have permits for private ocean ranching, as the practice is called. Of the 12, 3 companies have significant operations but none has achieved profitability based on ocean ranching. In Alaska, private, non- profit ocean ranching is practiced by hatcheries owned and operated

STATUS 51 by fishermen's cooperatives to enhance the commercial fishery (Mayo Associates, 1988~. One of the most important biological characteristics of salmonids that makes them excellent candidates for stock enhancement or ocean ranching is that the fish have a strong instinct to return to their natal stream (or point of release) upon reaching reproductive condition. Initially, the return of salmon released from hatcheries was less than 2 percent, but in northern latitudes, returns as high as 15 percent have been achieved (McNeil, 1988~. Production of larger and healthier smelts through advances in husbandry techniques, nutrition, and genetic selection has contributed considerably to increased survival and return rates. The situation with regard to stocking of salmon in public waters is very complicated, because some stocking is carried out by public agencies and other by private entities that generally expect some type of return on their investment. In the last 20 years, a number of enthusiasts have used the available salmon propagation technology developed by state and federal hatcheries to encourage investment in private ocean ranching of salmon. However, the lack of clear ownership of the fish has been one of the pri- State of California's Nimbus Salmon and Steelhead Hatchery. Nursery ponds are used for the culture of salmon and steelhead. These fish are planted into the Sacra- mento River for migration to the sea.

52 MARINE AQUACULTURE The fish eventually return to the hatchery and swim over twenty steps to the top of the fish ladder to the holding pond where they spawn. The Pacific salmon die after spawning; all steelhead are returned to the river. mary problems with private for-profit ocean ranching. The fact that the salmon rancher cannot recover any compensation from commercial or sport fishermen that intercept these fish before they return to their release points has contributed to the economic collapse of most operations. According to Anderson and Wilen (1986), the lack of well-defined property rights of the culturist, in conjunction with a common-property fishery, will generally result in unprofitable salmon ranching. In contrast, the Alaskan program of private, fishermen-owned, not-for- profit salmon hatcheries has been successful. Research (Boyce, 1990) indi- cates that greater enhancement will probably yield additional economic benefits. One aspect of the Alaskan success is the relatively well-defined ownership of the returning salmon. The salmon are either caught by the commercial fishermen or returned to the commercial fishermen-owned cooperative hatchery.

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.

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~.

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

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.

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-

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-

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;

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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