We need a game plan for aquaculture

Gareth MorganEnvironment, Fisheries Management

Farmed smoked salmonThe Government plans to turn aquaculture into a $1 billion industry. This is a noble goal, but there are only a few places suitable for intensive aquaculture in New Zealand.

One is the Marlborough Sounds, where locals are embroiled in a spat over increasing the space for King Salmon farms.

The Government called in its new environmental watchdog, the Environmental Protection Agency (EPA), to sort it out and submissions are due today.

Is this spat just the usual “not in my backyard” group versus big business, or something more serious? There are critical issues with how we allocate marine space and this is coming to the fore in places like the Marlborough Sounds sooner than elsewhere.

We all need to take heed, because eventually it will happen in our own backyard. The EPA decision in Marlborough is potentially a huge precedent, particularly if it over-rules the wishes of the local council.

On land, the way we plan is fairly straightforward. The government makes sure we have some parks and sets some environmental standards (if it is doing its job), then the market more or less sorts out the best way to use the land through the owners trading among themselves.

In the ocean, all this is turned on its head. The ocean is a “commons”, so no- one owns it. Companies have an incentive to claim as much of it as possible, in the hope that it eventually becomes their property, while members of the public oppose everything as a matter of course, because it curtails their rights to use the ocean for recreation and fishing.

Meanwhile, any thought of reserves or environmental protection languishes in the middle, caught as the leftovers between an adversarial process.

This is hopeless – the way we manage our ocean is flawed and this type of mindless combat turns up time and time again as the way we allocate these resources. The policymakers should be shot.

To make its decision, the EPA will weigh up whether the economic benefits of the lease are worth the potential environmental damage. It won’t look beyond that narrow tradeoff.

Let’s look at each of these in turn


Economic issues

The economic case the New Zealand King Salmon claim is built on is characteristically speculative. The simple economic models used to play this game tend to overvalue the economic benefits of new activity, just as they did for last year’s Rugby World Cup. The analysis also overlooks the issue of where the profits go: in this case at least 51 per cent to overseas owners.

There are also questions about whether the company can viably continue its growth. People tend to assume fish farming is sustainable, but salmon farming is different in that it is hamstrung by the issue of feed.

Unlike cattle on land, salmon are carnivores and naturally predate on other fish. The aquaculture industry has trumpeted reducing the fish content of their feed by swapping fish for other proteins, such as soy.

However, salmon still need to eat fish oil to get their much-vaunted high levels of omega-3. King salmon still need to eat the equivalent of the oil from 2.7 kilograms of fish for every one kilogram they grow.

Farmers might be able to reduce the use of fish oil, but if they did there would be little to separate farmed salmon from chicken. Until that point, they are competing with the omega-3 and fish-oil industries for this oil, and there is only a limited supply. This is a major handbrake on growth and has led to environmentalists questioning whether salmon farming is just making the world’s fish- supply problem worse.


Environmental Issues

ON THE other side of the ledger, the environmental impact of salmon farming is less difficult to quantify.

Mussel farms have copped flak for taking up space, but their impact on the environment is actually benign.

Salmon farms take up less space, but add a lot of nutrients to the water from effluent and feed.

Intensive salmon farming overseas has caused all sorts of problems, with pollution and disease outbreaks that have devastated native and, occasionally, farmed-fish populations, wrecked the pristine fiords they are based in and forced the salmon farmers to turn to using pesticides. Chile and Norway have had these issues.

New Zealand salmon farms seem to have avoided these problems so far. The Cawthron Institute has been monitoring the impact of farming up to now. The farms seem to be managed cautiously, and the areas adversely affected by the current operations seem to be small.

However, the impact of the farms on the wider environment is difficult to determine because the ocean is so dynamic and we know so little. Opponents claim each farm will create the same amount of effluent as 50,000 people. Are they right? If so, will this be enough to tip the ecology of the Sounds into a downward spiral?

Could farming damage fishing and recreation, and even lead to harmful algal blooms? Probably not, says the Cawthron Institute, but it is hard to be sure.

Many fish in one salmon farm were killed by a recent algal bloom. Was the farm the cause of its own demise?

We need to know what the damage from farming would be to see whether that is enough to be compensated by the economic benefits.

Both sides are fuzzy. The inherent biases in the system are likely to lead to the EPA granting more space for farms than is optimal.

The solutions to this are simple, but require a different way of thinking about the ocean.

To begin with, if there really is an economic benefit from salmon farming, then they should pay rates – substantial ones, just like land users. These rates should be used to finance the council to set standards for environmental management, just as they do on land.

We also need to sort out how to use ocean space, just as we have done on land. We need to zone the coastal ocean, starting with the Hauraki Gulf and Marlborough Sounds. This process, called integrated marine spatial planning, is now commonplace overseas, but has not been picked up in New Zealand. By comparison, we are quite backward.

All ocean users need to agree to set some areas of the ocean aside for industrial use (like ports), others for aquaculture, commercial fishing, energy generation, recreation and marine reserves.

Then different users can trade, just as they do on land, to ensure the ocean is being used in the best possible way.

One reason the Government is too scared to do this is probably because Maori will want their share. They no doubt will, but that shouldn’t be reason for prolonging the current arbitrary and environmentally adverse regime.

Many people don’t like marine planning, as it will force them to face the reality that they no longer have the whole ocean as their personal playground. This is short-sighted – the alternative is that marine space will be slowly picked off by piecemeal processes similar to this one that NZ King Salmon is sponsoring and we will end up with something worse.

As always, the biggest loser will be the environment. Marine reserves are expensive to establish and the public rarely champions the issue because it has little to gain personally. Marine reserves are a public good and the Government has completely shirked its responsibility to provide in this area.

The EPA is on a hiding to nothing, simply because the process it has been put in charge of is flawed.

We need a game plan for aquaculture was last modified: December 15th, 2015 by Gareth Morgan
About the Author

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.