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The short-term pursuit of profits by salmon producers is creating significant unaccounted environmental and social costs – such as growing mortality rates, damage to local ecosystems, pressure on wild fish stocks, and poor fish welfare – a new report from research organization Just Economics claims.
Commissioned by the Changing Markets Foundation – an organization that “supports NGOs to drive change” – as part of its Fishing the Feed campaign, the “Dead Loss” report calculates the cumulative costs to economies, society, and the environment resulting from the negative impacts of salmon farming at almost USD 50 billion (EUR 41.2 billion) since 2013.
In the top four salmon-producing countries of Norway, Scotland, Canada, and Chile, which collectively account for 96 percent of the world’s 2.6 million metric tons (MT) of farmed salmon, more than half these costs are falling to producers (USD 28 billion, EUR 23.1 billion), with the remaining USD 19 billion (EUR 15.7 billion) being passed on to society.
The Just Economics report deems that transparency and accountability are extremely weak in the salmon-farming sector, and also that legislation is needed for the industry to meet higher standards.
To bring accountability, it recommends that governments must require improvements in social, economic, and environmental accounting, and ensure more robust regulation of salmon farming by restricting licenses and subsidies to companies that meet higher standards.
It also calls on companies to diversify the species cultivated via aquaculture, prioritizing non-carnivorous species, and improving fish husbandry, and urges the industry to in technologies to address the risks and drive a rapid transition toward alternative feeds and farming practices.
Concurrently, it wants investors to take a long-term view. This may involve accepting lower returns in the short-term but will create competitive advantage in the long run, it said.
Asked who appears most to blame for allowing these hidden costs to run so high, Changing Markets Foundation Campaigns Manager Natasha Hurley told SeafoodSource that salmon farming companies bear significant responsibility for addressing these problems, as it is their actions that have given rise to the enormous economic, social, and environmental costs exposed by the Just Economics analysis.
In the immediate-term, this means that they must focus on the development of lower-impact feed formulations which don’t contain wild-caught fish, and overhaul farming practices to improve fish welfare and survival rates on farms, she said.
“But systemic problems require systemic solutions and it is clear that the industry needs to pivot towards cultivating lower-impact species or those that require less or no feed rather than pursuing expansion of farmed salmon production at breakneck speed,” Hurley said. “It’s also true that governments have a key role to play in ensuring that there is a robust framework in place to curb soaring mortality rates, pollution, and the other negative impacts associated with salmon farming. There is a business case for this: by revealing costs and benefits, governments could create a race to the top amongst salmon farmers, and a level playing-field for small producers that may be operating to higher standards.”
Without regulation, there is a danger that even if practices at some farms improved in the short-term, there could be backsliding in the future – so carefully designing policy and legislation which examines the costs and benefits of salmon farming is key, Hurley said.
Previous studies have also shown that governments are not sufficiently factoring in aquaculture’s costs when developing policy on salmon farming, she said.
According to the analysis, poor fish husbandry, parasites, and pollution are causing hundreds of millions of fish mortalities before the fish are ready for slaughter. Between 2013 and 2019, this has accounted for USD 15.5 billion (EUR 12.8 billion), the highest proportion of the costs to the four countries’ economies.
At the same time, it estimates that the environmental cost of unsustainable farming approaches USD 14.5 billion (EUR 12 billion), through the pollution of seas and freshwater lakes, damage to wild salmon stocks and biodiversity, and the generation of CO2 emissions.
With regards to social costs, the study values the total opportunity cost from poor fish welfare at almost USD 4.7 billion (EUR 3.9 billion). This was calculated by using an estimate of the premium (14 percent) that relevant consumers are willing to pay for higher welfare standards.
The report claims almost one-fifth of the world’s annual marine fish catch is used to rear farmed animals and fish instead of being directly consumed by people, and the report claims unsustainable fishing practices and the diversion of fish from vulnerable communities in places like West Africa has been putting livelihoods at risk, driving up poverty and forced migration.
With the analysis finding that the top 10 salmon farming companies, with combined total revenues of more than USD 12 billion (EUR 9.9 billion) in 2018, account for 50 percent of global production, the industry remains very lucrative, but Hurley said the Just Economics analysis shows “very clearly” that salmon farming is generating and running up against several environmental pressures, which are inextricably linked to its commercial success.
“These are a major source of risk for the industry and will inevitably put a brake on its expansion in the medium-term; this could certainly impact companies’ bottom line,” she said. “The reality is, salmon farming is a very inefficient and wasteful industry. By not taking effective action to bring mortality rates down and by continuing to use wild-caught fish in feed, companies are squandering money and resources and if things continue as they are, the industry won’t be able to sustain itself in the long-term. This will be a concern for investors who should take a long-term view and make investment decisions which will facilitate a rapid transition towards alternative feeds and farming practices.”
Hurley said there was a “huge and growing public concern” about the origin and impact of the food that it eats, with people becoming more aware and better informed about environmental and social problems in food supply chains.
“Consumers can already see for themselves the consequences of corporate irresponsibility across a wide range of sectors and salmon farming will come under increasing scrutiny in the years ahead,” Hurley said. “As the evidence of the ecological and social impacts of our resource-intensive, extractive model of production and consumption continues to mount up, they will demand more responsible production and genuine transparency about provenance and supply chains. Aquaculture companies will need to provide evidence that the costs of their industry don’t outweigh the benefits and that starts with better and more transparent reporting and accounting.”
Multiple associations representing the salmon-farming industry countered the report, calling it misleading.
“Unfortunately, a review of the paper makes it clear that this is simply activism masquerading as academic analysis. The paper is not supported by facts, includes no discussions with independent experts, and lacks the critical context required to offer useful insights,” International Salmon Farmers Association President Trond Davidson told SeaWest News. “Beyond the big numbers in the headlines, the report relies on several data points that are carefully cherry-picked, and in some cases are no more than guesses.”
Davidson said the claims in the story are unproven, and that the publication should be “held accountable.”
“Now more than ever, activist groups must be held accountable for spreading false and misleading information,” he said.