Executive Summary
Three strategic outlooks guided the methodological approach of the project. The first
was to understand the roles of the immediate stakeholders of the marine cage culture
industry fishers and traders of low-value fish, farmers, and feed manufacturers in
the pursuit of the main objective of the project; the second was to treat the transition to
commercially formulated feeds as a process of adopting a package of technology rather
than the use of an alternative material input; and the third was to study the technical,
economic, environmental and social constraints to the transition to commercial pellet
feeds. Part of the social component of the project was an assessment of the possible
impacts that a transition to pellet feeds would have on the livelihoods of the fishers and
suppliers of trash fish/low-value fish.
The context of this regional project was defined by two regional trends in the marine
aquaculture sector in Southeast Asia and Southern China and one global concern.
These are (i) the increasing production in high-value carnivorous marine finfish, (ii)
the decreasing supply of low-value aquatic animals that are extensively fished and used
as feed for the cultured fish, and (iii) the increasing global concern over the use of fish
to feed fish. The first and second issues highlight two problems, namely, a growing
shortage and rising cost of trash fish/low-value fish, and the likely over exploitation
of the fishery resources. The third is a potential trade problem arising from an ethical
issue. This issue may not be wholly addressed by the use of pellet feeds in which
the main protein and lipid sources is fishmeal and fish oil respectively. The switch
however would increase the efficiency of feed (and therefore fish as feed) utilization.
Nonetheless, these three issues collectively serve as the justification for the overall
objective of the project, which is to reduce the reliance of cage culturists on wet fish as a
direct source of nutrition for their stock, and move them towards the use of commercial
feed formulations.
The project found that the farmers who have been using commercial feed formulations
solely or in combination with trash fish/low-value fish tend to better understand the
linkages between profitability and good feed management. This affirms the technical
justification for the corollary objective of the project, which was to improve the farm
management practices of farmers regardless of the feed they were using. The received
wisdom from agricultural technology diffusion studies is that a better farm manager is
likelier to adopt a technological innovation earlier.
The broader perspective adopted by the project is that a commercial feed formulation
is part of a new technology package - rather than a more efficacious material, and this is
reflected by its having technical and economic, environmental and social components.
These are described briefly as follows:
- The technical component comprises the on-farm trials using farmers standard practices and supervised by the technical personnel of the project. It compared the technical and economic efficiencies of pellet feed and trash fish/low-value fish and demonstrated the possibility of using pellet feeds in marine fish farming, and especially on grouper farms, where the farmers have well-entrenched attitudes towards the use of trash fish/low-value fish and are sceptical of pellet feeds.
- The environmental component compared the biological and physical impacts of trash fish/low-value fish and pellet feed on the water column, and the bottom sediments in the immediate culture area, the amount of embodied energy required to produce a kilogramme of fish, and the amount of fish needed to produce a kilogramme of fish (fish-in fish-out ratio, or FIFO).
- The social component comprises three aspects: an assessment of the livelihood assets and options available to fishers and traders of trash fish/low-value fish, and their perceptions of the potential impacts that a wholesale switch by the farmers from trash fish/low-value fish to pellet feed would have on their livelihoods. An assessment of the perceptions and attitudes of the fish farmers towards the use of trash fish/low-value fish and pellet feeds before and after the farm trials, and an assessment of farmers perceptions of their access to, and use, of credit for capital and operational expenses including the purchase of pellet feeds. Attached to the farm trials and the farmers post-trial perceptions were a series of assessments of the farmers knowledge of the attributes of pellet feeds, their access to supply, and the feed manufacturers perspectives on the issues.
The relevant findings are:
- Farmers do not always have good access to pellet feeds, and while trash fish/lowvalue fish is more readily available, and its price is increasing, it is still generally cheaper than pellet feeds.
- Farmers are aware that those pellet formulations that are available, apart from those produced specifically for some species, are not specific to the species or the growth stage of the stock so that they use cheaper or less suitable substitutes resulting in poorer FCR.
- Many farmers have been using a combination of pellet feeds and trash fish/lowvalue fish, i.e. pellets for small fish and trash fish when fish are larger,
- Feed management is generally poor, and is given less attention than health management by the farmers.
- Accessing seed of the desired culture species is a general problem - more so in Thailand and Viet Nam where supplies are unreliable, or of poor quality, or both,
- Diseases cause significant reduction in profitability in China, Indonesia and Viet Nam, while influx of freshwater into the estuaries where cages are sited causes massive mortalities in Thailand.
- Cash flow does not match, or credit is inadequate, for the capital outlay needed to purchase pellet feeds.
- Feed manufacturers are hesitant to produce a feed that is tailored to a species that is not being produced in enough volume to create an economy of scale - with the exception of humpback grouper in Indonesia, cobia in Viet Nam and barramundi in Thailand.
A follow-up mission to Indonesia, Viet Nam and Thailand that was undertaken
16 months after the end of the farm trials found varying levels of uptake of the project
findings by the farmers. Vietnamese farmers had begun trying pellet feeds; Indonesian
farmers were hesitant to use the results of the trials on brown-marbled grouper for
their preferred species, humpback grouper; Thai farmers found accessing pellets
difficult. An encouraging finding was that all the farmers would switch to pellet feeds
if suitable formulations and sizes were available. An issue shared by the Vietnamese
and Thai farmers was the lack of quality seed. Access to capital remained a prominent
constraint to the uptake of pellet feeds, and farm expansion. Finally, a business case,
drawn from the potential market for grouper feed in Indonesia, can be made for the
production of species-specific feeds.
To place these findings in the context of the project objective, access to feed, seed,
and operating capital are technical constraints associated with a lack of inputs. Poor
feed management and disease control are operational problems exacerbated by the lack of proper technical and management guidance. The lack of suitable pellet feeds in the
market is first and foremost a business issue. In this regard, research on the nutritional
requirements of specific species and use of alternative low-cost ingredients may help
feed manufacturers develop suitable formulations. Research on alternatives to fishmeal
has in fact been intensified, especially in Europe, but the projects are mostly geared
to salmon and other species, and none or hardly any research has been undertaken on
groupers. However, some of the results could be used by Research & Development
(R&D) institutions in Asia-Pacific to develop specific feeds for species that are cultured
in the region. Policy incentives to promote technology development and for the
manufacture of feeds that are specific to mariculture species in Asia could facilitate the
commercial production and marketing of the products. Meanwhile, feed manufacturers
may consider organized farmer groups as part of the feed supply chain to which the
usual distributor or retailer discounts could be granted.
The assessments found that the attitude of most farmers is generally favourable
towards the use of pellet feeds; prior to the trials, some had been using them, and
others have seen the possibility of their use from the farm trials. These findings
suggest that the key to adoption is to make the right kind of feeds available and
easily accessible. Everything else supports the farmers decision to adopt the feed.
After adoption, there is a need to reinforce the farmers decision so that he or she
does not revert to using trash fish/low-value fish. The supporting elements would be
technical advice on better management practices, enabling ready access to operating
capital with timely cash flows, or the provision of commercial loans on favourable
terms, enabling the purchase of feed at discounted prices (through bulk buying, for
instance), providing the right motivation for farmers to organize, and sustaining
technical advice through extension. A major assistance would be to encourage and
facilitate the organization of farmers associations or to strengthen existing ones. The
project had inspired the Vietnamese and Indonesian farmers to infuse professionalism
in the programme, and to improve the operation of their existing associations. Some
of the Thai farmers were beneficiaries of a government funded Community-based
Enterprise Development Programme, in which contiguous farmers are participants,
and are provided access to training, technical advice and small loans.
The environmental assessment showed no significant difference in the biological
and physical impacts of using either feed source on the waters and sediment of the
farm sites; the slight differences that were found were attributed to feeding practices
and the quality of the feed used, particularly the trash fish/low-value fish. This in fact
is a significant result, and it highlights the need to regulate the density of farm units
to an optimal number that does not exceed the carrying capacity of the area. The
finding further highlights the importance of applying appropriate stocking densities
and feeding practices. The finding on site pollution, notwithstanding the statistical
insignificance of the impacts, would be an important part of a better management
guide. The estimations of energy usage revealed that more energy is embodied in the
amount of pellet feeds than feed fish needed to produce a kilogramme of fish. On the
other hand, calculations of FIFO (fish-in fish-out) showed less fish is used with pellet
feeds to produce a kilogramme of fish. The comparative energy consumption can be
an important issue from a global perspective. However it is hard to see how this could
be incorporated into an extension message. The same might be said of the FIFO result.
In the end, the pollution, energy and fish-in fish-out issues will be addressed at the
farmer level by promoting the efficient use of feed and better management practices.
These could be more broadly addressed through Research & Development (R&D)
on alternative feed ingredients, which has been intensifying, and policy incentives for
technology development and manufacture of less polluting and more efficacious feeds
that uses less or no fish. The embodied energy issue would have to be part of national
and global programmes to reduce the carbon footprint of the industry.
The social component of the project addressed the livelihood alternatives of the
fishers and traders of trash fish/low-value fish. Its justification was that the livelihoods
of fishers and traders who have long been important stakeholders in the development
and expansion of the marine cage culture sector of Southeast Asia and Southern China
- are threatened by a wholesale shift to commercially formulated feeds. The findings
indicate that the fishers principally target food fish which brings a higher income or,
in the case of small fishers, is for home consumption. Fishers have a market for the
trash fish/low-value fish in terms of the fishmeal processors, and already have or can
find alternative occupations. The findings suggest that the greater threat to the fishers
livelihoods will not come from farmers ceasing to buy trash fish/low-value fish,
but from the depletion of the fishery resources. The policy implications from these
findings include providing assistance to the fishers that use large boats to improve their
on-board preservation techniques so that they can land a higher proportion of food
grade fish; in the event that policies are developed to reduce fishing capacity, there will
be a need to develop alternative livelihood opportunities and training programmes,
better management of the fishery resources, including the introduction of closed
seasons, appropriate gears, and the withdrawal of fuel subsidies. In addition to the
impact on the fishery resource, fuel subsidies fail to reflect the true market price of
the fish, which in the long run, when the supply of trash fish comes to an end, would
expose the low efficiency and therefore poor competiveness of a countrys cage culture
industry. Furthermore, a higher price for trash fish/low-value fish may even hasten the
farmers transition to pellet feeds.
There are a number of issues that the project brought to light but did not address
directly in the implementation. Foremost among these was the market and market
access. The market prospects in Southeast Asia and southern China remain positive.
The diminishing wild catch of, particularly, grouper, would increase demand for farmed
fish. Ironically, the lack of seed stock helps to maintain high prices as the farmers cannot
stock their cages. The industrial scale production of marine fish in large offshore cages
has started, but is not expected to expand rapidly so that in the foreseeable future, much
of the supply will still come from the inshore or near shore small- to medium-scale
cage farms. The occasional natural disaster and fish kill from biotic and abiotic causes
keep a check on oversupply. The growth in trade of live fish to supply the restaurant
trade in Southeast Asia and southern China is not showing signs of abating, and the
issue of certification is not as yet a major concern. However, an international standard
on live reef food fish trade has been issued by the Nature Conservancy (TNC) and
several collaborating organizations, which includes management and operational
requirements for cultured live food fish. It is for voluntary adoption in the live reef
food fish trade. Certification standards could be the next area of concern for farmed
fish. Better management practice (BMP) guides that are developed should incorporate
these standards.
Marketing issues are dependent on the species being farmed: premium species such
as coral trout grouper and mouse grouper are primarily exported to southern China
and China, Hong Kong SAR. Lower priced species like brown-marbled and orangespotted
groupers are raised for the local market or sold directly to seafood restaurants.
Price related risks are higher for premium species that are exported and therefore have
a longer market chain. In the future, assistance would be needed in terms of supplying
real time market information and organized marketing. Prices in the local markets
are more easily monitored, and communication between farmers and buyers can be
facilitated by the cellular phone.
The marketing, credit and cash flow issues influence the famers decisions in terms
of whether to adopt pellet feeds or continue using low value/trash fish. The lack of
sufficient capital restricts a farmers ability to buy pellet feeds. Lines of credit could
alleviate this problem and ensure that there was sufficient operating capital throughout the production cycle. In addition, increased credit and improved cash flow, would
increase the farmers ability to negotiate product prices and prevent them from being
forced to sell their fish at a low price - although an inescapable bio-economic constraint
is the diminishing economic returns from feeding fish beyond a given optimal size. The
marketing-credit nexus has been given due attention by the project, and the general
need is the provision of adequate loans on reasonable and easy terms. This becomes
a crosscutting issue that has to be addressed by convincing the institutional lending
agencies that the cage culture farmers are creditworthy. Creditworthiness could be
linked to the adoption of better farming practices, and the farmers being organized.
Lending schemes at low interest rates could be developed for organized farmers
adopting BMPs.
Closely related to creditworthiness is the provision of insurance for the cage
farmers. The high risk associated with cage culture would normally require a high
premium assuming a commercial insurer finds the business of insuring cage farms
worthwhile. As with credit, insurance could be linked to farmers being organized and
adopting BMPs.
The issue that pervades the effort to effect a transition to pellet feeds, and which
in practical terms promotes the adoption of technological innovations, is risk
management. It would be applied to actual and perceived risks to the profitability
of adopting pellet feeds, the environment, and the impacts on the livelihoods of
fishers and fish suppliers. This requires an integrated approach to the development
and implementation of the different instruments and risk management strategies.
The risk management instruments and risk reduction strategies include the BMPs,
farmers being organized, the assurance of supply and the quality of inputs including
seed, feed and credit, aquatic animal health management, market based insurance,
public compensation for catastrophic damage, better marketing of products, product
certification, coastal zone management, and alternative livelihood opportunities. The
policy, regulatory, implementing, and technical support components of these various
instruments will benefit from the strengthening of institutional and human resource
capacities. This in turn is facilitated and made more cost-effective by institutional and
stakeholder collaboration. Regionally, these linkages are already in place in terms of
national and regional institutions, the collaborative arrangements, and the mechanisms
for better cooperation that already exist.
The project adhered to a unifying principle: that regional policies and programmes
to encourage the adoption of pellet feeds shall equally promote the objectives of food
security, poverty alleviation and the sustainability of the environment.
November 2012
