ANALYSIS - Speaking before the Global AgInvesting forum on the 29 April 2014, Øistein Thorsen from Benchmark's Sustainability Science division trie, argues that continued industry success and global expansion will come from identifying investment and early development opportunities focused on addressing aquaculture’s challenges around disease, feed and waste management.
Aquaculture is at a crossroads. According to the United Nation’s Food and Agriculture Organization (FAO), the last three decades have seen global food fish aquaculture production expand “by almost 12 times, at an average annual rate of 8.8 per cent.” As a relatively new industry facing the pressure of driving higher rates of production per unit area, it has the opportunity to learn from others’ mistakes and embrace the development of a new set of sustainable management practices.
Disease: Like all forms of farming, aquaculture is a sector full of risks. The artificial ecosystems that aquaculture creates pose many challenges that can be addressed through equipment, technology and best stewardship practices that aim to accommodate the natural behaviors and environment of the farmed species. Facilitating welfare-focused fish production models can mitigate disease pressures and as a result produce better fish growth, more efficient food conversion, increased resistance to disease, and overall increases in survival. In this regard fish welfare is not simply an altruistic agenda, but rather the backbone of a healthy business. As a result opportunities will grow for developing health solutions that move away from reliance on antibiotics and other disease treatments to those focused on prevention – including vaccines and probiotics.
Feed: For the majority of finfish aquaculture operations, feed is generally the most costly input, and a rising one at that. In response to these increasing costs and environmental impacts associated with overfeeding, technologies monitoring food waste and effectively regulating food delivery have been developed and continue to evolve. This is just one example of how technological innovations coupled with good stewardship practices are driving industry profitability and sustainability.
With regards to the larger issue of feed raw ingredient sourcing, such a quick fix has not been identified, though there are signs of progress. In 2004 one third of the world’s fish catch was used to produce fishmeal and fish oil primarily for the aquaculture industry according to WWF. The good news is that the industry’s reliance on fishmeal and fish oil is decreasing due to increased use of plant-based feed from major agricultural crops like soybean and corn. However, with rising and volatile commodity prices fueled by pressures on agricultural land use and a changing climate, reliance on such crops can prove risky and expensive for fish farmers. This provides biotech development and investment opportunities for using bacteria, yeast, algae, insects and animal by-products as feed ingredients. Early results include positive health benefits for farmed fish fed on yeast and bacteria grown on natural gas. By-and-large these initiatives are in their early stages and not yet ready for large scale industrial application, however, they should be encouraged as they could hold the key to effective protein production in a resource constrained world.
Waste: Similarly to traditional farming practices of all scales, fish farms produce waste and impact the environment in which they are situated. There is the risk that these wastes can become significant pollutants and a cause of conflict between fish farmers and their coastal neighbors. No one system in existence outperforms all others in all waste emission or energy use categories, showing the need for continued innovation in this field. Exploration in the design of systems that use waste as nutrition, fuel for secondary crops, or products like feed, fertilizer or energy continues to thrive. All of these opportunities are at an early stage and have not been proven at an industrial level yet, but they could have the potential to boost on-farm profits by reducing feed and electricity bills, and provide additional income streams by turning waste into sought after products like biogas, fertilizer, carbon credits, or secondary crops like seaweed.
Øistein will be moderating the panel on opportunities in aquaculture and global fisheries on April 29 at Global AgInvesting 2014.
Now in its sixth year, Global AgInvesting 2014 offers a comprehensive overview of agriculture investment opportunities, risks and return profiles across all major global production regions, as well as strategies for diversified ag portfolios including regional variation, private equity, and liquid investments. Concurrent track sessions will highlight the surrounding themes of ag venture capital and agricultural technology, water opportunities, and protein plays in livestock and dairy, global fisheries and aquaculture.