General Conclusions
This broad ranging analysis demonstrates one simple truth: we need to get away from the idea that mariculture is good and should be promoted. It is an option to be considered, and, given its often demanding/high risk attributes, development opportunities must be reviewed thoroughly and impartially. The key to this is:
- better development planning of mariculture within the wider processes of economic development planning and/or integrated coastal management;
- more objective and informed project preparation and appraisal; and
- probably a greater role for the private sector as a key partner in any government or aid promoted development project.
Throughout all of these processes should run the themes of more thorough and realistic market appraisal, and more thorough and realistic estimates of production, distribution and marketing costs.
Poor Performance of Mariculture Development in the Pacific
Despite substantial efforts and large injections of research and development finance,
mariculture development in Pacific Island nations has been very limited. This is
explained by the nature of mariculture, the manner in which mariculture has been
promoted, and a range of more specific practical and economic constraints.
Lessons have not been learned. In particular some research and development
organisations and government fisheries departments have repeatedly promoted
development trials without undertaking the most basic analysis of production and
marketing costs. Risks have not been assessed, and there has been a failure to compare
objectively mariculture with existing and other potential income generating activities.
As a result many small communities have served as guinea pigs for the testing of
ambitious, technically driven and in many cases nave projects.
The Nature of Mariculture
Mariculture is more risky than most forms of economic activity. Most marine organisms
are highly sensitive to water quality, salinity and temperature, and are vulnerable to
disease, predation, theft and cyclones. Many species require significant investment and
working capital, and have long cropping cycles, compounding the risk profile.
Many species/systems require expensive feed typically more expensive than animal
feed, mostly due to limited production quantities and high quality raw materials
required (carnivorous feeding habits).
Many species are demanding in terms of husbandry and may not be suited to part time
attention. It is harder to keep a general eye on organisms growing beneath the water.
Per unit production costs in mariculture are usually higher than those in well managed
capture fisheries.
Many mariculture products are perishable and costly to deliver to market, especially
from remote island locations.
Mariculture is highly competitive with very efficient production already established in
other parts of the world. In a global economy this competition has to be taken into
account.
Some forms of intensive aquaculture can be seriously polluting, and most forms will
require environmental regulation and management given the sensitivity of tropical
coastal ecosystems.
The Development Project Approach
Most mariculture in the region has been initiated by research, aid project, government,
NGO or a combination of these organisations. The conception and design of projects
has therefore usually been driven by technical ideas or development needs. Mariculture
is often viewed as a solution, not as an option.
Critical factors for financial and economic success market price and volume,
distribution and logistics, site suitability/comparative advantage have often been
regarded as of lower priority.
In most cases the key characteristics of mariculture as summarised above have not been
adequately taken into account. The quality of feasibility analysis (and especially
technical/economic analysis and market appraisal) during project design and
preparation has often been poor and/or overly optimistic.
Inadequate attention has been paid to the manner in which poor people invest their
time and labour. Although sometimes addressed in livelihoods analysis, a thorough
understanding of why people switch between different activities and what return
(financial or other) they expect for their time input is rarely developed.
Many projects have failed once project based input subsidies are withdrawn; and indeed
it is arguable that subsidies by limiting personal investment have actually
undermined the dedication and commitment which would normally follow
automatically from personal investment.
Many projects suffer from short project cycle or shifts in approach and emphasis when
renewed. Given that some mariculture activities may have cropping cycles of 4 years or
more and payback periods in excess of this there is little chance of activity being
sustained.
Several projects that we reviewed appeared seriously inadequate in terms of monitoring
and analysing the most basic production parameters - whose management would be
crucial for any form of commercial success.
Many of these issues have been raised elsewhere and especially in lessons learned
documents. Unfortunately these lessons have been offered repeatedly over the last 30
years and have not been learned.
Practical Constraints
It is difficult to disaggregate the above problems of development delivery from the more
fundamental constraints to mariculture development in the Pacific Islands countries
and territories (PICTs). These relate primarily to markets, logistics, availability of
suitable sites, availability and cost of feed (if required), cost and availability of seed,
skills, finance, environmental issues, and social constraints. All of these issues are well
known, but their relative importance varies widely across the region and they need to
be assessed on a case by case basis.
However it is worth noting that the market should be regarded as the first and most
fundamental opportunity or constraint. Any mariculture development initiative which
does not undertake a thorough analysis of price, of volumes of product traded or
consumed, of alternative sources, of preferences and substitutes, of logistics, supply chains
and power relations prior to any encouragement of production is at best incompetent
and at worst irresponsible.
In most cases the local or national market is relatively small, meaning that economies of
scale are difficult to achieve on the back of domestic markets, and breaking into
international markets is therefore likely to be difficult.
It is also important to assess the degree to which any new mariculture production
activity has comparative advantage relative to production by other means or in other
locations. Although it may be possible to be successful in the short term without such
comparative advantage, as the market matures it will not be possible to compete.
Feed is required for some forms of mariculture and the lack of locally produced low cost
feed is often regarded as a key constraint. However, we are unconvinced of either the
feasibility or desirability of focusing on local feeds at least in the early stages of
development in most situations. High-quality fish feed is an internationally traded
commodity and it would be difficult to produce a local feed of similar quality at similar
price (even after import) in many locations. It will often make sense to import feed until
the sector is sufficiently large to warrant investment by a major feed manufacturer.
Seed is also a key constraint for many species, and hatcheries can play a key role in
meeting demand. However, project and government run hatcheries have generally
underperformed in terms of cost effective market orientated seed production. The role
of hatcheries is discussed in more detail below.
Technical expertise appears to be relatively high in many countries relative to the size of
the sector. Furthermore, for most mariculture species there is substantial expertise
available from countries with large aquaculture sectors, especially in Asia, and more use
can be made of this expertise either by sending key staff to work with commercial
mariculture businesses abroad or by sourcing foreign technicians to work for a period
in country.
Technical economic and market expertise appears to be in short supply throughout the
region. However, this is not simply a question of technical skill, but rather one of
emphasis and awareness. A simple back-of-the-envelope calculation may be enough to
throw out a perceived mariculture opportunity and for whatever reason these have
often not been done. This relates to a key point noted above: mariculture should be seen
as an option, not as a solution.
Opportunities
It is extremely difficult to discuss opportunities for mariculture development in the Pacific other than in the most general of terms. Potential is hugely varied between countries and in many cases even more varied within countries. This reinforces the view that potential must be thoroughly assessed at local level, and priorities set at regional and even national level may be of limited value. Notwithstanding this proviso we have made some broad assessments of selected species in terms of their potential to contribute to key development objectives
Contribution to Livelihoods
The price of seaweed is historically high and there is currently good opportunity for
seaweed development in suitable sites throughout the region, especially where labour
costs are low and market access is good although these tend to be inversely related,
and there will typically be an optimum trade-off. Seaweed has classic characteristics
which make it suitable as an IGA in relative isolated locations: short growth cycle, low
investment, low production risk, undemanding husbandry, low perishability, relatively
high value/weight ratio.
Pearl oyster spat collection can also make an important contribution to livelihoods in
some locations, though suitable sites are probably fewer and husbandry more
demanding. Furthermore, market conditions are such as to offer limited prospects for
expansion of the industry in the short and medium term.
There is good but limited opportunity for giant clam production, especially in locations
readily accessible to international airports. Although purely commercial centralised
production appears to be viable (for a few modest businesses), options for engaging
significant numbers of growout farmers in villages are limited and difficult, and will
require a more effective development model than has hitherto been applied. Various
options are discussed in the report, but it should be emphasised that the market is
relatively small, and though market growth is possible, this is unlikely to become a
significant economic activity.
Coral farming probably has more potential, and is more amenable to small scale
artisanal production, possibly affiliated to or supported by a commercial aquarium
products exporter.
Sponge farming has many characteristics similar to seaweed and is higher value;
however the long growout cycle is a significant disadvantage, and increases production
risk.
Post-larval capture and culture remains at an experimental stage and potential is likely
to be highly location dependent. The main problem is that it is a classic technology-led
option, not market led, and needs to be appraised with great care.
Production of milkfish for baitfish may be an attractive option locally but only if a set of
rigorous conditions apply. We were not able to identify suitable locations in our field
work.
Hatchery production for restocking, coupled with effective management of MPAs may offer
opportunity for enhanced fisheries directly supporting local communities. However, the
costs and returns are likely to be highly variable according to social, economic and
environmental conditions, and there is very little good evidence to draw on to date.
Contribution to Food Security
Milkfish production has been proposed as an alternative/complement to Tilapia production as a means to meet the projected supply gap for fish in some PICTs. If realistic costs are applied we consider it unlikely that production costs could be less than US$2/kg and are more likely to be around $3/kg. This relates to the high investment costs required in ponds or cages and the high cost of feed in more intensive systems.
Import Substitution
There is significant demand for high quality marine shrimp in many PICTs associated
with increased consumption in urban areas, and tourism related demand. New
Caledonia has demonstrated the feasibility of developing a significant industry and
there are other examples (e.g. in the Solomon Islands and Papua New Guinea) which
suggest significant potential. The key constraint here is PL supply and neither
government nor private sector has been particularly successful in this regard in case
study countries. A key requirement is therefore to develop effective national seed
production strategies relating to commercially viable species.
There may be local opportunities for the production of medium to high value marine
finfish such as barramundi and possibly groupers. However, margins are likely to be slim
and success probably dependent on highly efficient commercial or semi-commercial
production systems. Thorough feasibility studies should be undertaken before
investments are made and local people encouraged into participation. In any case
production costs are unlikely to be less than US$3/kg.
Export Earnings
Pearl farming is the classic activity for generating high export earnings. Unfortunately oversupply and increasing competition from freshwater pearl means that market price is poor and inefficient producers are likely to go out of business. A period of rationalisation is therefore expected with relatively few large scale companies generating high quality product. There may be niches for smaller companies perhaps associated with resorts and producing specifically for local tourist and craft markets.
Facilitating Sustainable Mariculture Development
The many contributing factors to poor performance of the mariculture sector noted above must be addressed. Key requirements include:
- Improved development planning, as far as possible within an integrated coastal planning and management framework, and taking full account of alternatives - such as improved management, utilisation and marketing of products from capture fisheries.
- Recognising that mariculture is an option, not a solution.
- PICT governments need to be closely involved with project design and evaluation; donor and government priorities do not always match, and initiatives are all too often externally driven.
- Conducting thorough and impartial feasibility analyses (including both technicaleconomic and thorough market analyses) and creating the capacity at national level to undertake these.
- Recognising and building on the role of the private sector, and developing business awareness and skills.
- Developing clear regional and national strategies for hatchery development, operation and funding.
- Learning and implementing the lessons learned