Pressurised: Aslak Berg of iLAKS has written a commentary suggesting that a lack of finance is preventing the development of land-based farming. He said that this echoes the problems experienced by the fledging cod farming industry ten years ago.
His comments came after reports appeared in Intrafish and Sysla about land-based farming. Intrafish suggested that if all the current initiatives succeed, then ten percent of Norwegian salmon could be farmed on shore.
Sysla said that with land-based start-ups appearing all over the world, there could be significant questions about the viability of the existing industry in Norway.
Mr Berg’s response is that these views give very little regard to the finance required to fund these new farms. He says even if such finance was available it is unlikely to make land-based farming profitable. He adds that there is little evidence that funding is available and refers to comments made by Anne Hvistendahl, head of DNB bank’s fisheries and aquaculture, who said that the bank will not provide loans for land-based farming.
Mr Berg says why should the banks risk money when no-one is making money from growing salmon on land. He says that the risks are too high.
This is of no surprise to us, at Callander McDowell. We have always doubted whether land-based farming will be profitable. Not only would costs have to be low but the price of the finished produce would have to be high. The company, Fish From, which planned to grow salmon on land in Scotland predicted that consumers would be willing to pay more for salmon farmed on land because farming this way would help protect wild salmon. This might be a good story for a certain type of investor, but it is far from reality.
What interested us most about this story was that Mr Berg said that the euphoria about land-based farming is to him reminiscent of that which occurred about cod farming. He said that everyone wanted to get into cod farming, but no-one made any money. The problems were made more difficult by a lack of financing as the banks wouldn’t provide loans, so companies sought funding from the equity market instead
Mr Berg says that there was a reason for the bank’s scepticism. Production costs were higher than the price obtained for the fish. He cites the example of Codfarmers, who eventually folded in 2013 having made a loss in every quarter and over six years the share price fell by nearly 100%. The banks avoided a similar fate by keeping well away from investments in the cod farming industry.
Despite our passion for aquaculture, we at Callander McDowell always had doubts about the development of cod farming and like Aslak Berg, we can see a similar pattern emerging with land-based salmon farming.
We suspect few will remember what sparked the sudden interest in farming cod about a decade ago. Cod has always been a major part of the Norwegian seafood sector, but with almost abundant supplies of wild fish, farming cod was never considered. The event that initiated the move to cod farming was the declaration by WWF that cod stocks were on the brink of collapse. With the possibility of almost no supplies, cod farming suddenly was viewed as potentially viable.
Cod farming failed for two reasons. The first is as Aslak Berg suggests; that the cost of production exceeded the market price. Higher production costs could have been acceptable had the market price been high. This might have happened if supplies of wild cod had diminished. However, supplies remained strong because it was available from other fisheries and thus the price remained competitive. Without high market prices, cod farming would never be profitable.
The second reason and more importantly, the predictions made by WWF failed to materialise. Cod stocks may have declined in the North Sea but elsewhere, they remained strong. Wild caught cod continued to be widely available. The environmental warnings were misplaced.
With regard to land-based farming, we have always maintained that there is no commercial rational for moving from net pens to on-shore tanks. Consumers certainly won’t pay more for tank raised fish (although the pioneering companies might initially persuade the supply chain to pay a premium). The question is why is there now such a rush to move to land-based production? The answer is that there is enormous pressure to do so from the environmental sector. Like cod farming, this pressure is based on misplaced claims and we suspect that like cod farming, land-based farming of salmon will be something of a flash in the pan.
The environmental sector believes that salmon farming in net pens is damaging to the marine environment, however many of their claims are rather questionable and originate from the demarketing campaigns conducted by the US Charitable Foundation during the early 2000s.
We believe that future developments in net pen farming will negate the need for land-based farming, but by then there will be little appetite to move salmon farms onshore much as the appetite to farm cod evaporated. We have previously argued that the primary reason to invest in aquaculture is because it makes good sense, rather than on the say so of the environmental sector. We suggest that if environmentalists are so keen for aquaculture to follow a specific route, then let them be the ones to do so.
Tell tells: The head of the Scottish Environmental Protection Agency, Terry A’Hearn recently tweeted that ‘In the early 1990’s I listened to a talk by David Suzuki and he totally changed my outlook on life. Such powerful clarity on the complete unsubstainably (sic) of our mindset about our economies and way of living. Great to see the continuing work of David Suzuki.’
We don’t know what David Suzuki spoke about when Terry A’Hearn was in the audience, but from what we have learnt, Dr Suzuki has a very comfortable living. How sustainable it is might be questionable. According to the Toronto Sun, Dr Suzuki has some expensive tastes in housing for someone who, amongst other things, wants to shut down the carbon economy within a generation. The newspaper found out that for someone who has made a name for himself fighting for the environment and against development, he owns four properties in Canada including one he co-owns with a fossil fuels company.
His main residence is a $8.2 million mansion in the Kitsilano neighbourhood of Vancouver. He also owns another property in the neighbourhood worth $1.01 million. A waterfront property on Quadra Island worth $1.1 million is also in his property portfolio. A property on Nelson Island is the fourth property and this is co-owned with Kootenay Oil Distributors. We also understand that Dr Suzuki has another property in Australia. This information comes from Vivian Krause, someone we have discussed many times before in the pages of reLAKSation.
Vivian came to prominence with her discovery through tax returns that several US Charitable Foundation were funding anti-salmon farming campaigns. She is more informed than most about Dr Suzuki because his granddaughter and Vivian’s daughter were classmates at school. Despite this near connection, Vivian had repeatedly tried to arrange a meeting with Dr Suzuki to discuss salmon farming. He never responded to her written requests.
Vivian did get to meet Dr Suzuki. She bumped into him in a café in Vancouver and tried to introduce herself. Unfortunately, he wasn’t too receptive and when comprehending who she was, he gave a simple response – F*** off.
The reason why Vivian was keen to speak to Dr Suzuki was her discovery from tax returns that his Foundation had received at least $10 million from these US Charitable Foundations. Part of this money is included in the $33 million the Foundations have invested in demarketing farmed salmon.
The demarketing campaign against farmed salmon was conceived by the US Foundations as a way of protecting the US wild salmon fishery and the American way of life. The money was distributed to about thirty environmental groups, including the David Suzuki Foundation, who were to send out messages intended to scare US consumers away from eating farmed salmon.
The type of message sent out by David Suzuki about farmed salmon is illustrated by their participation in the Coastal Alliance for Aquaculture Reform which received at least $1.5 million from the Packard Foundation to run a campaign entitled ‘Farmed and Dangerous’. The David Suzuki Foundation also sent out messages of their own. In 2010, after being outed by Vivian Krause, they removed 23 pages of press releases and articles about salmon farming from their website. These had been posted from 2001 onwards.
There are still links to some of the material available via Vivian Krause’s website and these include warnings that farmed salmon contained dangerous levels of PCBs. Other press releases warned that Pink salmon was being driven to extinction by the presence of salmon farms. Yet, there were record runs of Pinks in 2014. Interestingly, Global News revealed that Pinks had been near extinction in the 1980s, but this was due to overfishing and poor river management.
A brochure produced by David Suzuki also disappeared from public attention in 2010. An image from the brochure clearly illustrates David Suzuki’s position on farmed salmon.
Sadly, many of the misleading messages sent out by David Suzuki and other environmental groups is still in circulation, not with the public but within the environmental sector. After repeating these messages for so long, these groups now believe them. Unfortunately, they still seem to gain traction in the media.
Just this week, the Guardian newspaper published an article about alleged welfare issues on Scottish salmon farms. It offered nothing new except a comment from SEPA about the introduction of new regulations. SEPA told the Guardian that the new regulations would include powerful modelling based on the best available science.
We have been led to understand that some of the modelling available is still rather primitive despite a lot of money being thrown at its development. We are also concerned about using the best available science, especially in relation to sea lice.
The problem for SEPA is that they have come up for a lot of criticism through the ongoing media campaign against salmon farming. The trouble is much is routed in the ‘non-science’ emanating from organisations like David Suzuki’s.
On a final note, we have heard from one of our contacts in Canada that in 2002, David Suzuki attended a big First Nation’s event after which he proudly told the gathering that he had enjoyed the event, the dancing, the drumming and his dinner. He was then told that his dinner had consisted of farmed salmon. As our contact pointed out to us, it is a miracle that David Suzuki has managed to reach the age of 82 given that he had eaten this poison! Perhaps, it has been negated by his extremely comfortable home life!
It’s grim: The Times newspaper reports that Grimsby is the town with the most unhealthy High Street in Britain. This is the result of a ranking of British High Streets which measured the number of fast food outlets, off-licences and betting shops and linked it to local life expectancy. People living in towns with ‘healthy’ High Streets lived on average two and a half years longer than people in Grimsby.
The second placed worst town is Walsall in the West Midlands but there are big differences between the two towns. Walsall is not home to a large hub of food producers many of whom produce fish. With so much fish in close proximity, it might be expected that local people might have a healthier fish-based diet but seemingly not. In fact, we wouldn’t be surprised if all the fish was put onto a truck and shipped to markets well away from Grimsby town centre.
The fish and seafood industry are keen to persuade consumers to eat two portions of fish and seafood a week. Perhaps, their campaign should start close to home. If those producing the fish for market aren’t eating fish, then why should anyone else?
Finger food: The Times also reported that according to the Marine Conservation Society, eating fish fingers is good for the oceans. The papers states that top chefs backed by the Government have been encouraging Britons to try different types of seafood to take the pressure off cod and haddock. (and we thought it was the environmental groups who were keen to see consumption of a wider range of species, but perhaps we are wrong!).
According to the times, the MCS have the answer and that is to eat fish fingers. The MCS have found that 85% of those sold in the UK are from sustainable sources. However, to the MCS’s surprise fish fingers were made from three main fish. They say that this may come as a surprise to many consumers who see fish fingers as a mix of unspecified fish or barely of any fish at all.
This latest survey from the MCS simply confirms how out of touch they are with the marketplace. We would be really surprised if consumers thought they were buying fishfingers made of unspecified species. Most fish fingers are clearly labelled with the fish from which they are made. These are. usually cod or haddock. Given that these are the most popular fish used in fish fingers, we are unsure how eating fish fingers either takes the pressure off cod or haddock or widens the range of species consumed.
The third species found in fish fingers is Alaska pollock. It is either used in the value fish fingers or those promoting a higher omega three content. Ten years ago, pollock was found in many more fish fingers because of the belief that cod stocks had collapsed but as cod has become more acceptable again, both cod and haddock have replaced pollock and are now the dominant species used in fish fingers.
Given that fish fingers were first introduced into Britain in 1955, it is a wonder that the MCS have taken so long to consider whether eating them is acceptable or not.