Aquaculture: Myths, Mystery & Africa A Conversation with Wally Stevens, Executive Director Global Aquaculture Alliance (GAA) 1 Stevens 2/9/2012 2/9/2012 2 2/9/2012 3 2/9/2012 4 2/9/2012 5 2/9/2012 6 2/9/2012 7 “Yesterday is history, tomorrow is a mystery, today is a gift.” Eleanor Roosevelt 2/9/2012 8 “Aquaculture is the farming of aquatic organisms such as fish, shellfish and even plants.” Department of Marine Resources, State of Maine 2/9/2012 9 Water farming 2/9/2012 10 Sustainable & successful aquaculture requires the application of appropriate practices and the use of solid scientific and technological development. 2/9/2012 11 The Global Aquaculture Alliance (GAA) is a non-profit trade association promoting the sustainable growth of responsible aquaculture Created in 1997 by 59 aquaculture sector stakeholders (mainly prawns) from the Americas, Europe, Asia and Africa (Madagascar) Currently GAA has more than 1100 members from 70 countries – stakeholders in the aquaculture of prawns, salmon, tilapia, pangasius, channel catfish, etc. Bimonthly specialized magazine ‘the Advocate’ Massive resource of aquaculture expertise available 2/9/2012 12 The GAA BAP = Best Aquaculture Practices B2C consumer pack label Robust standards for aquaculture facilities throughout the production chain, developed with multi-stakeholder input ISO 65 governed third party certification Security of supply to Retailers / consumers Secondary processors / importers 2/9/2012 13 2/9/2012 14 Global Aquaculture Alliance - BAP (En).pdf (application/pdf Object) - Mozilla Firefox Global Aquaculture Alliance - BAP (En).pdf (application/pdf Object) - Mozilla Firefox 2/9/2012 15 SOC (Standards Oversight Committee) 4 NGOs, 4 industry reps, 4 academics / regulatory / policy Minimum 2 NGOs needed to vote ‘yes’ for the standard to be approved TC (Technical Committee) Develops standards and submits to SOC for approval, after careful review Continuous Improvement Annual review with a revision every 3 years or more often if needed Commitment to conformance with FAO’s ‘Technical Guidelines on Aquaculture Certification’ and with the GFSI (Global Food Safety Initiative) 2/9/2012 16 BAP: Standards Development 2/9/2012 17 BAP Certification Process Global Aquaculture Alliance - BAP Global Aquaculture Alliance - BAP (En).pdf (application/pdf Object) - Mozilla Firefox 2/9/2012 18 BAP In The Field Canada: Sodexo Highliner Foods Wal-Mart Sobeys (all banners) 2/9/2012 19 Market Place Active Supporters of BAP Certification: North America (Retailers and Food Service) United States: Wal-Mart Winn Dixie Target Raleys Giant Eagle TopCo Sodexo USA Schnucks Price Chopper Darden Foods HEB Kroger (All Banners) Wakefern US Foods Wegmans Delhaize USA (All SuperValu Banners) Harris Teeter Lunds Foods Aldi Busch Gardens Ahold USA (All Banners) Europe: Tesco Aldi Asda Morrisons Coop (All Banners) Delhaize Europe Waitrose Sodexo UK M&J Foods Sodexo France 2/9/2012 20 Market Place active supporters of BAP Certification: Europe/Australia (Retailers and Food Service) Australia: Woolworths \\Office-manager\dell\Data\George\Roanoke Presentation 7-00\Hamper discharge weir.jpg E:\My Documents\GAA\CODES\Powerpoint pictures\Farm 1 100 dpi-reduced.jpg C:\My Documents\POWERPNT\scanner output\Feed\vacuum fish meal drier.JPG Mangrove Conservation Effluents Fishmeal Usage Environmental Issues Attacks by NGOs \\Administrator\data\GAA\Meetings\Honduras\PowerPoint Presentations\Drazba\Drazba Photos\Drazba-16.jpg E:\My Documents\GAA\CODES\Powerpoint pictures\Farm 1 100 dpi-reduced.jpg The Mangrove Issue The Mangrove Issue Greenpeace Campaign Slogan: “Give Us Back Our Mangroves” Shrimp are a “Devastating Delicacy” Consumers should say “No to Farmed Shrimp” Assertions Aquaculture is the major cause of destruction of the world’s mangroves Large scale destruction continues Benefits Highly productive ecosystems Benefits to coastal communities Area 18 million hectares exist today 55-60% of the historic mangrove resource has been lost Causes of Loss Clearing for agriculture (esp. rice) Urban development, fuel, construction materials Grazing, Wood pulp, Tourism Facts About Mangroves Facts About Mangroves GAA Study by Mangrove Experts in 1997 Loss Due to Shrimp Farming less than 5%. ALL shrimp farming area (1,372,800 ha in 1996) amounts to only 7.6% Farming less than 5%. ALL shrimp farming area (1,372,800 ha in 1996) amounts to only 7.6% concurs: “…the extent of mangrove destruction world-wide resulting from shrimp farming is only a tiny fraction of the loss to date…” Facts About Mangroves GAA Study by Mangrove Experts in 1997 Mangrove lands not well suited for shrimp ponds (low elevation, acid soils, high construction costs). Trend toward more intensive farms on higher ground. Recommended 6 management practices. Mangrove conservation became first element of GAA Codes of Practice for Responsible Shrimp Farming Facts About Mangroves Conservation Practices Are Working Use of mangrove area for new shrimp farms has essentially stopped. Satellite imagery shows that forested mangrove area is increasing in Honduras and Ecuador. Program Should Be Expanded Especially in remote areas of Vietnam and Indonesia. Conversion by poor coastal inhabitants. Government Assistance Needed Improved enforcement Integrated Coastal Zone Management C:\My Documents\POWERPNT\scanner output\Feed\vacuum fish meal drier.JPG The Fishmeal Issue Can Aquaculture double in 10 years on available marine ingredients? Over last decade fed aquaculture has grown 97% - marine ingredient usage 23% Aquaculture can double in the next ten years by reducing marine ingredient inclusion while increasing feed production Relative Genetic Gain in Growth Rate 2/9/2012 32 Shifting Economic Power, Rising New Middle Class and Impact On Global Seafood Demand 2/9/2012 33 2/9/2012 34 World Economic Output Over 50 Years, 1984-2034 (2005 PPP dollars) 2/9/2012 35 The world’s economic center of gravity, 1980–2007 (black) and extrapolated (in red), 3-year intervals 2/9/2012 36 Numbers (millions) and Share (percent) of the Global Middle Class Growing Economic Power, Growing Middle Class: By 2030, Sixty Six percent (66%) of The World’s Middle Class Will Live in Asia Pacific 2/9/2012 37 These Three Billion Asian Middle Class People Will Account For Fifty Nine Percent (59%) of The Global Middle Class Spending By 2030 The Boom in Chinese Consumption of Seafood Domestic demand for seafood in China has increased from 7kg consumption per person in 1985 to about 25kg in 2005. Income Elasticity for seafood products in China is around 0.98 (Lidkvist et al, 2008). The same source estimates that China will double its per capita spending on seafood products between 2008 and 2020 (in Yuan terms) . Source: K.B. Lindkvist et al. / Marine Policy 32 (2008) The Proportion of Animal Protein In the Diet Increases With Income Per Capita Source: H.H. Jensen / Marine Pollution Bulletin 53 (2006) However, The Share of Fish Protein in Total Animal Protein Does not Necessarily Increase With Income: Culture and Natural Resources Endowment Matter Source: H.H. Jensen / Marine Pollution Bulletin 53 (2006) Source: K.B. Lindkvist et al. / Marine Policy 32 (2008) The Square Root Recovery or Double-Dip Recession? January 2003 – July 2011 Source: TIGER Database, The Brookings Institutions 43 Euro Fiscal and Sovereign Crisis: From Greece to Italy Potential consequences: credit crunch and contraction of trade credit in the eurozone Temporary demand contraction as unemployment continues to rise (9% in the Euro Zone) Increased demand elasticity to price of seafood Currency risks in case of Greece disorderly default and exit from EU In the USA Economic Fundamentalism (Extremism) on both ends of the political spectrum is preventing the emergence of a “pro-growth” consensus and sensible economic policies that could mitigate the impact of the crisis. http://www.economist.com/printe dition The Economist print cover Natural Catastrophes As New “Normal” http://www.csmonitor.com/var/ez flow_site/storage/images/media/images/1108-thailand-floods-journalism/10951042-1-eng-US/1108-Tha iland-Floods-journalism_full_600.jpg 1108-Thailand-Floods-journalism _full_380 Thailand Floods (Nov. 2011) Picture of a boat resting on a building after the Japan tsunami As a precaution, the government said it was evacuating 3,500 people from the surrounding area vik_iceland_katla_AP110106059634_fullwidth_620x350 Japanese quake and Tsunami (March 2011) Chile Volcano (Oct. 2011) Iceland Volcano (Dec. 2010; Oct. 2011) 46 Aquaculture is one of the few bright spots Average Annual Growth Rate 2003-2011 Success of the industry in “Managing The Commons” is not alien to this result Managing the commons for the good of all requires a solution to the “collective action problem”, a huge but not insurmountable Challenge In fact, the GAA has been applying consistently some of the factors associated by Elinor Ostrom to avoiding “the tragedy of the commons”: Communication among participants Working with participants of good reputation Agreed sanctioning mechanism Longer time horizon elinor-ostrom1.jpg Elinor Ostrom Nobel Laureate 2009 in Economic Sciences Market Rule: Buyers’ Power Buyers have the power to: Influence production processes around the world through adoption of certification Influence the direction and sustainability of the aquaculture business Help the industry diversify to new geographies Improve disease control by encouraging individual farms to participate in regional health management programs Engage governments and lending institutions more proactively in co-funding production and regional health management programs 49 Exploring new Geographies Forging strong Public Private Partnerships with Governments Reigning in Germs How To Double Production In A Decade? The Key is in the 3Gs! 50 5% CAGR 4% CAGR USD Trillion 128 million African households with discretionary income in 2020 50% Africans living in cities by the year 2030 1.1 billion Africans within the working age population (15-64) in 2020 Source: MGI (2010) Africa In Numbers Africa: Unchartered waters? Asian countries’ presence in Africa Since 2006, China has completed over 20 investment deals into Africa, amounting to ~$26 billion 9% of total outward FDI from India went into African countries including Mauritius, the Ivory Coast and Senegal South Korea has made investments in the agriculture, mining and energy sectors in Africa african.gif China Singapore South Korea India But, concerns over the Riskiness of African Investments are exaggerated Warmholz (2008) contends that a pervasive lack of information on African markets is a “dominating factor” to the exaggeration of risk Political stability has improved over the years and GDP growth has remained steady and resilient FDI has increased as well as investments from funds, quelling worries about excessive risks in Africa FDI inflows into Africa is below Developing America and Developing Asia… …but GDP growth has been resilient and robust from 2000-2009, trailing only Developing Asia Source: UNCTAD Source: IMF Fig. 2. GIS assessment of potential for small-scale/artisanal aquaculture in Africa (Aguilar-Manjarrez and Nath, 1998). 2/9/2012 53 2/9/2012 54 C:\Documents and Settings\sallyk\Local Settings\Temporary Internet Files\Content.Outlook\Z9VHVS5C\ssa38956.jpg 2/9/2012 55 Forging Strong Public-Private Partnerships (PPPs) with Governments 2/9/2012 54 C:\Documents and Settings\sallyk\Local Settings\Temporary Internet Files\Content.Outlook\Z9VHVS5C\ssa38956.jpg 2/9/2012 55 Forging Strong Public-Private Partnerships (PPPs) with Governments 56 The Industry can not play alone and win! Governments need to play their role! Research and Development (R&D) and Knowledge sharing 2. Bio-security at the national or regional level 3. Access to large scale production land and industry-specific infrastructure provision 4. Investment in human capital and capacity building for specific skills A Proposed PPP Funding Mechanism For Aquaculture in New Geographies Sust. Aquaculture Fund IFIs Government Investors (PE, SWFs, Producers…) Buyers NGOs (Venture Fund, PE Fund, Aquaculture Infrastructure Fund) Investor match-making Investment advisory services Coordinate public infrastructure support, e.g. industrial park devp; Facilitate land & sea rights issues, planning & zoning, etc; Support skills development and R&D programs; Support industry standards & certification program. National Bio-secutrity Contribute to fund Equity Investment Direct investment Promote FDI & DDI into industry Provide forward purchasing contracts Set industry standards & certification program. Promote industry-wide market strategy Provide market intelligence Promote competitiveness Contribute to fund Facilitate Knowledge sharing Facilitate technology transfer Partnerships for technology adoption and adaptation Promote industry innovation Support capacity building Contribute to fund In Conclusion: Aquaculture is a young industry Aquaculture is a growth industry If the enemy of good is perfect, then aquaculture is good, not perfect Improvements in aquaculture, like agriculture, will be driven by advances in science and technology Changing global economics will result in changes where consumption and  production take place Public/private collaboration required in aquaculture, as it has occurred in agriculture in