By John Bostock1, Alistair Lane2,
Courtney Hough3, Koji Yamamoto1
Aquaculture is one of the fastest growing livestock industries in the world. During the period of 2000-2015, this industry presented an annual growth of 6.2 %, and reached a total production of 90.4 million tonnes. In the same period, the EU aquaculture industry had an annual growth of 2.9 % and production of 2.88 million tonnes, representing 4.3 % of global production.
In 2012, EU seafood consumption per capita was 23.81 kg; however, European aquaculture production only contributed some 11 % (2.66 kg); the rest was the result of fisheries and imports. Given this, we can infer that the European aquaculture sector has great development potential, and so it is necessary to know more about its structure, economic contribution and policy environment, aspects that we review throughout this article.
Production by Species
In order to facilitate the production by species analysis, five main segments were defined: cold water marine fish, warm water marine fish, freshwater fish, shellfish and algae and other aquatic species. Within these segments, five species dominate production, contributing with 90 % of the total value; these are: rainbow trout, Atlantic salmon, Gilthead sea bream, European sea bass and common carp.
Atlantic salmon dominates the cold water marine fish segment, with a production of 168,000 tons in 2013. As salmon aquaculture is currently expanding, especially in Scotland and Ireland, we will have to be aware of how the EU aquaculture sector evolves after the Brexit. The rainbow trout is another important species, with a production of 24,000 tonnes in 2013, mainly produced in Scotland, Denmark, Finland and Sweden.
Warm water marine fish are cultivated mainly in Mediterranean and Southern Europe (France, Portugal and Spain). Gilthead sea bream and European sea bass dominate this segment, followed by turbot and meagre. This segment expanded in the nineties, when juveniles were produced more easily, reaching a production of 218,000 tonnes in 2013.
Rainbow trout and common carp dominate the freshwater fish segment. Rainbow trout culture grew rapidly, reaching its peak between 2000 and 2001, with 250,000 tonnes. Since then, production has decreased (165,000 tonnes in 2012) due to operational difficulties, licensing, environmental legislation and market competition, principally with salmon.
While common carp is considered a “traditional” fish, since it is part of many typical dishes in continental countries, its production (≈ 60,000 tonnes) decreases year after year mainly due to the offer of new seafood products such as salmon and catfish in supermarkets.
Other freshwater species grown on a smaller scale and with a minimum contribution to the total production are Alpine trout, eel, sturgeon (mainly for caviar), perch, African catfish, tilapia, roach and tench.
Taken together, oysters and mussels represent 93 % of shellfish production. France is the largest oyster producer (85,000 tonnes in 2011), Spain is the largest mussel producer (209,000 tons in 2011), and Italy is the largest clam producer (32,000 tons in 2011). In recent years, oyster production has decreased due to disease outbreaks in production areas.
Finally, the segment of algae and other species began to evolve in 2007, with the culture of aquatic plants, mainly in Denmark. Crustaceans, shrimp, octopus, sea urchin, and other species are also included in this segment.
European aquaculture is a very diverse activity, due to the variety of species cultured as well as the production technologies used. Following is an analysis of the different types of production technologies in 2012 (Lane et al. 2012, FAO FishStat).
The production of cold water marine fish is mainly done with cages. The automation and mechanization of operations has generated an expansion of units’ size, lower production costs and safer working conditions. In recent years, the number of licenses granted has been limited due to the potential environmental impacts generated by farms, delaying the expansion of the industry.
Smaller cages are used for warm water marine fish production, although the use of larger cages is expected in the upcoming years. Other systems such as coastal ponds are used, but their contribution to total production is very low.
Traditionally, freshwater fish were reared in earthen ponds and extensive systems with minimal extra feeding. The use of concrete ponds, raceways and recirculating systems has evolved considerably, and large-scale units have been installed for salmon, African catfish, perch and tilapia culture, among other species.
In the case of shellfish, there are three main techniques used for mussel culture: poles (‘bouchot’), suspended ropes or bottom culture. And finally, the majority of algae production is obtained by using suspended culture techniques.
The Economic Value of EU Aquaculture
The EU Fish Processors and Traders Association recently estimated the total value of the seafood sector in the EU to be around US$ 29.97 billion (AIPEC-CEP 2015). The contribution of aquaculture and fisheries was US$4.4 billion and US$7.7 billion, respectively. The remainder comprises the value of imports. This value is doubled once retail sales and food service are considered.
Based on some studies of the seafood supply chain, raw material (aquaculture and fisheries products) accounts for between 15 and 40 % of the final sales price. Processing and distribution add between 10 and 30 %, and retail costs and margins add another 25-45 % to the final price. In the case of food service, the cost of ingredients represents only 30-35 % of the meal price, so the production costs only represent between 10 and 15 % of the final value of the product as sold to the consumer. This situation is similar in other countries around the globe.
Economic Assessment at the EU Level
In order to analyse the aquaculture sector of the EU it is essential to consider the direct (hatcheries, farms, primary processing and operation sales), indirect (suppliers and business transactions) and induced (salaries) impacts. Usually, the total value of the production is used as an economic indicator. However, in this case, it is more significant in economic terms to use the Gross Value Added (GVA), which is the value added by a particular activity (farming process). This is the value of the output minus the cost of purchased inputs (feed, medicines, fuel, etc.). Therefore, the value added includes personnel costs, salaries and profits. GVA values are significantly lower than production.
In 2012, the total GVA for the EU aquaculture sector was US$1.44 billion, while the total output value was US$4.85 billion, with the multiplier from output to GVA being 0.3 (STECF 2014). Yet, this value varies by sector; for example, shellfish GVA was 0.54, and sea bass and sea bream GVA was 0.1. The shellfish sector resulted in a greater GVA in relation to output because there are no costs for feed, while the sea bass and sea bream HVA is low due to negative profitability in the sector in 2012.
On the other hand, the social economic value of the sector is measured in terms of the number of people employed. It is estimated that there are between 14,000 and 15,000 aquaculture companies in the EU, which employ around 80,000 people, 50 % of which are full time positions (FTE, full time equivalents) and the rest are part-time or temporary.
Freshwater ponds and suspended shellfish culture are the sectors that employ more people, but the salaries are regularly low. In 2012, the annual average wage per FTE (based on data from 19 countries) was US$22,531, but this varied from US$3,441 in Bulgaria to US$77,700 in Denmark.
Economic Value by sub-sector
Aquaculture is practiced in almost every country in the European Union. In 2012, five countries accounted for 78 % of the total output value of the EU aquaculture sector: the UK, France, Greece, Italy and Spain. Let us remember that Norway, one of the major aquaculture producers in the world, is not part of the EU. As shown in Figure 4, marine species cultured in large cage systems provide the greatest output value (principally, salmon production, followed by marine shellfish aquaculture, particularly in suspended systems).
It has been identified that productivity (output value divided by FTE employment by sub-sector) is higher in those sectors where most capital is invested in technology and large-scale farming operations, like salmon aquaculture, which has a productivity of US$543,900 per FTE. Low productivity is associated with smaller-scale enterprises with relatively low mechanization and use of capital, like the freshwater pond sector which has a productivity of US$15,540 per FTE.
Competitiveness of Aquaculture
EU aquaculture products have to find their place in the seafood market, next to fisheries products and imports; this means price and quality competition, among other attributes. Although the prices are not strictly comparable, it is interesting to note that over 50 % of EU finfish production has a first sale price below US$2.22/kg, which is less than the production cost of most cultivated species in Europe. Aquaculture begins to make a contribution as prices rise above US$2.22/kg. The production cost is expected to decrease in the following years, through technical innovation and culture management, making EU aquaculture production more competitive with potential to eventually replace fisheries production.
The main challenges in achieving sustainable development in the EU aquaculture sector include economic, social and technical issues; some of these are specific problems of aquaculture, and others are more general. In 2014, Common Fisheries Policy (CFP) recognized aquaculture as a key component of its scope, along with traditional fishing and seafood processing.
Currently, the challenges to the development of EU aquaculture industry are many, but the most important are competition in the market (mainly from imports), access to and competition for space for aquaculture expansion (coastal and inland), health and welfare of livestock, high labor costs and regulated working conditions, improvement of resource use (feeds, farm technology), and promotion of financing sources to boost the industry.
Research and Technology Development
The EU aquaculture sector has been supported through national and EU level funds. EU funding succeeds mainly through the RTD framework programs. The European Aquaculture Technology and Innovation Platform (EATiP) was created in 2008 for the purpose of promoting the development, competitiveness and sustainable growth of the sector, as well as defining strategic research priorities together with the European Fisheries and Aquaculture Research Organization (EFARO) and the Cooperation in Fisheries, Aquaculture & Seafood Processing (COFASP). In the case of industry development, direct investment is done through structural funds, such as the Financial Instrument for Fisheries Guidance (FIFG).
Growth perspectives have been assessed with EATiP information, along with an analysis of the sector by system type. The results suggested that it is possible to increase production volumes by 55 % by 2030, mainly by the expansion of large cage systems in more exposed sites and shellfish culture using suspended large-scale systems. This increase in production would be accompanied by a 77 % increase in value and a 40 % increase in employment if social and economic conditions prevail. Table 2 shows the expected trends for the coming years.
In the last decade, the EU’s aquaculture value increased by 70 %, but its production volumes decreased. This lack of growth is attributed to market competition and access to sustainable sites for expansion. In order to achieve the development of the aquaculture industry, the main problems and challenges that affect the sector have been defined, and based on this information it has been possible to generate appropriate strategies to achieve the sustainable development of EU aquaculture.
The general strategy is to maximize the quality of the products, improve resource use efficiency, and minimize environmental impacts. To ensure the positioning of aquaculture products in the European market, it is necessary to understand market interactions and competitiveness in order to guide future policies properly and attract investment.
1 Institute of Aquaculture, University of Stirling
2 European Aquaculture Society
3 Federation of European Aquaculture Producers
Bostock, J., Lane, A., Hough, C. Yamamoto, K. (2016). An assessment of the economic contribution of EU aquaculture production and the influence of policies for its sustainable development. Aquaculture International.