reLAKSation 131.
Is
the (organic) revolution over?: Last year, sales of organic food in the
UK topped £1 billion making the UK the third largest outlet for organic food in
the world. According to the soil Association, sales of organic food are growing
at over 10% per year which is twice as fast as the conventional grocery market.
Sales of organic salmon have increased by 33% to £5 million.
Consumers
have been attracted to organic foods by their better taste, the absence of
additives, the regular health scares of mass produced food and most importantly,
their widespread availability through the supermarket chains.
Farmers
are attracted to organics by the improved margins and perhaps, the ethics of
growing organic food.
One
of the main reasons given as to why the market for organic food is not even
greater is their higher cost. Yet, the higher cost of organic food is clearly a
two edged sword for organic food must cost more if they cost more to produce and
if farmers expect a better return than for non-organic foods.
However,
various analysts suggest that the cost must come down as more and more organic
food comes to the marketplace. Traditionally, organic food has been produced by
the small local farmer, now big business is starting to take over and as volumes
increase, prices must fall.
In
the case of salmon, consumers have always paid more for organically produced
fish. Four of the major UK supermarkets have regularly sold organic salmon
alongside the more traditional fish. The mark up for organic has ranged from 20%
to 46% with 30% to 33% being most typical. If these price differentials are even
in part reflected in a better return to farmers then there is clearly incentive
to grow organic fish, although this has to be offset by the greater costs, the
lower yields and the need for accreditation. However, if prices, and
thus the returns, were to fall, then farmers would need to question
whether it was commercially viable to produce organic fish.
Now
one UK supermarket group will force organic farmers to ask this question. This
supermarket chain has started to sell organic salmon at exactly the same price
as it’s more traditional salmon. There is not even a penny difference in the
price to consumers. In addition, its prices are significantly lower than those
found in the other supermarkets which means that their new organic salmon range
is significantly cheaper than any other retail outlet. This makes this organic
salmon much more attractive to consumers, especially those who might not have
considered buying organic previously.
The
key question is how will this impact on organic salmon producers. The lack of
extra margin and the potential to sell organic salmon cheaply means that it may
no longer be commercially viable to produce fish organically. Only time will
tell!
When
all is not enough?: Alan Wilson, Scottish Minister for Aquaculture
told IntraFish that the Scottish Executive is doing all it can to help
the salmon industry at this time. The
Scottish application for safeguards failed in its attempt to initiate any
immediate measures to 'protect' the industry from cheap imports. Instead, the EU
has promised to carry out an investigation taking up to nine months. Mr Wilson
said that he recognises that the industry is working in a difficult economic
environment.
Although
it may be some time before any
measures are forthcoming, if at all, Mr Wilson said that the Strategic
Framework, launched in 2001, provides the appropriate mechanism to facilitate a
sustainable aquaculture sector in Scotland and that he will continue to monitor
and review its implementation.
If
the Strategic Framework is all the Scottish industry has to look forward to,
then they have every right to be concerned about their future. We, at Callander
McDowell, discussed the Framework when it was first launched and subsequently we
have not changed our view. The Strategic Framework was drawn up by a committee
which had little interest in the economic well being of the industry. The
Strategic Framework offers the industry little in terms of overcoming the
economic issues, which affect the industry today. This is why Mr Wilson had to
resort to applying for safeguards because he had little else to offer.
Mr Wilson says that these safeguards would be short term, but if this is the case, what comes after this short-term solution? Certainly, the Strategic Framework offers little in terms of economic salvation, but Mr Wilson appears to suggest that there is nothing else on the table. Undoubtedly, the Scottish Executive do not think that it is their role to become involved in the financial issues affecting individual farms and rightly so. However, Mr Wilson and his colleagues in the Executive are ideally placed to act as the catalyst to initiate wider discussions than those contained in the Strategic Framework. If Mr Wilson wants to help the salmon industry survive the current problems then 'doing all that they can’ may not be enough!
Route
to nowhere: Dr
Constantin Vamvakas, head of the European Commission's aquaculture unit has
announced that he is on track to deliver some of the first developments in the
EU's new aquaculture strategy. IntraFish reports that Dr Vamvakas is to increase
support for low impact extensive aquaculture, whilst cutting back on some forms
of intensive fish farming. Whilst
we at Callander McDowell are firm believers in the benefits of extensive
aquaculture, we are not convinced that extensive fish farming can help solve the
shortfall in Europe's fish supply. This is simply because large areas of land
will be required to produce significant volumes of fish and such land is not
available. Equally, extensive pond
culture is unlikely to produce a realistic financial return so there will be
little incentive to invest in this method of production.
However,
Dr Vamvakas is probably encouraged to pursue this form of aquaculture because
some of the new members of the EU, such as the Czech Republic and Hungary have a
long standing tradition of extensive farming of species like carp. Perhaps Dr
Vamvakas believes that this form of farming can be readily expanded throughout
the EU's existing membership? We, at Callander McDowell believe that this is
unlikely for no other reason than there is unlikely to be a significant market
for extensively farmed species in the EU. This is because many European
consumers have lost the taste for freshwater species in favour of marine fish
flesh. It could be argued that with declining stocks of popular marine fish such
as cod and haddock, farmed freshwater fish would be a good alternative, but the
EU is unlikely to persuade EU consumers that this is so.
In the past, the EU fisheries directorate has tried to persuade consumers
to try less popular marine fish such as coley, but have failed miserably. If
consumers won't eat those species that are similar to cod and haddock, it is
unlikely that they would consider any freshwater fish that have a totally
different taste.
Yet,
this was not always the case. Carp used to be an extremely popular fish in
Europe even though it was not originally a native species. It was initially spread with the rise of the monasteries, but
then later because it added value to the fishponds. The Christian calendar during the Middle Ages included about
125 fast days a year in which it was forbidden to eat the flesh of warm-blooded
animals. Instead of a total fast, observants were permitted to eat cold-blooded
fish and so began an association between fishponds and the main religious
centres. At first these fishponds
were just holding ponds in which locally caught fish were kept for later
consumption. However, by the 1400's, these developed into very simple farming
systems when it was recognised that carp could be encouraged to breed. Carp
became increasingly important and they spread quickly into private as well as
church held fishponds. Carp became
a main source of fish protein for many years and fishponds and carp consumption
only fell into decline at the start of the industrial revolution. Improved
transport and industrialised fishing meant that the populations of large inland
cities could be supplied continuously with fresh marine fish. These were much
preferred to the more seasonal freshwater varieties. However, in Eastern Europe, poor access to the sea has meant
that freshwater species such as carp have remained popular. This has been helped
by the fact that many of Eastern European countries have a tradition for eating
carp at either Christmas or New Year, which ensures their continued popularity.
Even
if Dr Vamvakas can persuade European consumers to buy freshwater species, he may
find that extensive fish production is not so straightforward as he might
expect. Low intensity production
means that large areas of land are required for conversion to fishponds for any
significant volume production. Relatively high land prices may exclude such
conversion purely on economic grounds. Although
vast quantities of fish are grown by extensive methods throughout the world,
much is in fact small-scale production for local consumption. Yet, this type of
production may be exactly what could be viable. This is because whilst extensive
pond culture is unlikely to be a commercial proposition as a stand-alone
enterprise, it could work if it is integrated into existing terrestrial farms
converting small areas of land unsuited to other agricultural production. This
could be possible because extensive pond farming has more in common with arable
farming than any fisheries activity. The fish are simply a by-product of farming
phyto- and zooplankton and is somewhat akin to growing crops.
Extensive pond culture involves drying out the pond and treating the
bottom much like any traditional farmer would treat his fields before planting.
However, instead of planting out, the farmer would fill the pond and
allow a nutritionally rich food chain to develop before stocking with fish.
After a season’s production, the pond is emptied, the fish harvested and the
cycle restarted.
Dr Vamvakas may find that such a route to develop extensive pond culture may produce conflict between agricultural and fisheries advisors. Certainly, some years ago, there was an attempt to encourage UK farmers to diversify their production through extensive pond culture but it was thwarted by the government’s inability to recognise that fish could be farmed as part of an integrated enterprise. This comes back to the fundamental question as to whether fish farming is farming or fisheries. The only way that extensive pond culture can ever be successful is if the EU's agricultural sector becomes more involved in its development. If left just to the fisheries sector, there will be little hope that Dr Vamvakas will be able to deliver on his promised new aquaculture strategy, at least in terms of finfish production. However, any future success will ultimately depend on the consumer.