A Comparison of Risk Exposure in Aquaculture and Agricultural Businesses

Agriculture and aquaculture have common features associated with their biological nature affecting risk exposure of the businesses. The aim of this paper is to compare risk exposure in salmon farming and agricultural enterprises in Norway by using an implicit error component model to examine the risk structure of yields, prices and economic returns at the farm level. Results indicate a higher farm-level year-to-year variability in yields, prices and economic returns in salmon farming than in agricultural enterprises. The variability in livestock enterprises was generally lower than for crop enterprises. Return on assets was highest in salmon farming with an average annual return of 9.2%. All of the agricultural farm types exhibited a negative average return on assets on average. Stochastic dominance tests of the distribution of economic returns from aquaculture and agricultural farm types showed salmon farming to be the most risk efficient alternative and salmon farming was most attractive from an investor’s perspective.Risk analysis, variability, Norway, Risk and Uncertainty,

A Comparison of Risk Exposure in Aquaculture and Agricultural Businesses

Agriculture and aquaculture have common features associated with their biological nature affecting risk exposure of the businesses. The aim of this paper is to compare risk exposure in salmon farming and agricultural enterprises in Norway by using an implicit error component model to examine the risk structure of yields, prices and economic returns at the farm level. Results indicate a higher farm-level year-to-year variability in yields, prices and economic returns in salmon farming than in agricultural enterprises. The variability in livestock enterprises was generally lower than for crop enterprises. Return on assets was highest in salmon farming with an average annual return of 9.2%. All of the agricultural farm types exhibited a negative average return on assets on average. Stochastic dominance tests of the distribution of economic returns from aquaculture and agricultural farm types showed salmon farming to be the most risk efficient alternative and salmon farming was most attractive from an investor’s perspective.Risk analysis, variability, Norway, Risk and Uncertainty,

Natural Resource Industries, ‘Tragedy of the Commons’ and the Case of Chilean Salmon Farming

Chilean salmon farming has been considered as an outstanding example of success after growing at double digit rates for more than twenty years. While the expansion was indeed dramatic, it came at the expense of severe sanitary and environmental deterioration. The outbreak in 2008 of the infectious salmon anaemia, a viral disease that kills salmon, but does not affect humans, has made this utterly clear. The overexploitation of the ‘commons’ upon which the industry has grown and the lack of an adequate regulatory mechanism to monitor adverse environmental effects contributed to this disaster, which now threatens the future of the industry and the country benefiting from its natural comparative advantage for salmon farming. The paper shows that activities based on the exploitation of a common pool resource require quite a different analytical approach than the one conventional neoclassical theory offers us for the understanding of firm and industry behaviour. This study shows that industries of this sort enjoy unique location-specific conditions requiring specific know how, R&D, and strong public-private cooperation in order to attain environmentally sustainable long term growth.- Chilean salmon farming, common pool resources, natural resource based industry, ‘tragedy of the commons’

The Price Responsiveness of Salmon Supply in the Short and Long Run

Productivity growth and competitiveness indicate that salmon supply is price responsive. However, in the short run supply is likely to be constrained by the biological production process, regulations, and capacity constraints. In this article, we estimate a restricted profit function for Norwegian salmon producers, which allows us to examine the industry’s short-run and long-run supply responsiveness separately. Using data spanning 1985 to 2004, we find that there is close to zero, own-price supply responsiveness in the short run. In the long run, this changes substantially as supply becomes elastic. This result can contribute to explaining the observed cyclical profitability in the salmon farming industry.Restricted profit function, supply, salmon farming, profit cycles, Demand and Price Analysis, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, D24, Q21, Q22,

High innovation intensity in fish farming: The role of openness in innovation and strategy

The salmon farming industry has since its infancy witnessed immense growth due to innovations increasing productivity. A significant part of the innovations causing the productivity growth has by many observers been attributed to collaborative and open R&D-efforts. Salmon farming in Norway is very research intensive, with a large share of R&D being publicly financed, and with results widely shared and innovations widely adopted. However, in recent years there has been a shift toward an increasing share of R&D becoming privately financed, leading to more closed innovation processes. This paper explores the importance of open innovation in salmon farming and the possible consequences of more closed innovation. The paper shows that openness of the innovations depends on the type of challenge and stakeholder. Innovation is at its most open when common challenges are addressed, like finding solutions for parasites and diseases. Innovation in salmon farming tends to become more closed as the industry consolidates, the larger the firm is and the closer to the market innovation takes place.publishedVersio

Geographical co-location, social networks and inter-firm marketing co-operation : the case of the salmon industry

This study looks at the factors that influence the development of marketing co-operation among cluster-based firms. It examines data from SMEs operating within the salmon farming industry in two different regions: Scotland and Chile. Analyses indicate that informal social networks help explain the observed relationship between geographical proximity and inter-firm marketing co-operation, especially for firms located in peripheral rural communities. A theoretical model is proposed for further research in the field that, until recently, has been traditionally analysed only by economists. Practical implications are suggested for practitioners and policymaker

Using agent-based modelling to predict the role of wild refugia in the evolution of resistance of sea lice to chemotherapeutants

A major challenge for Atlantic salmon farming in the northern hemisphere is infestation by the sea louse parasite Lepeophtheirus salmonis. The most frequent method of controlling these sea louse infestations is through the use of chemical treatments. However, most major salmon farming areas have observed resistance to common chemotherapeutants. In terrestrial environments, many strategies employed to manage the evolution of resistance involve the use of refugia, where a portion of the population is left untreated to maintain susceptibility. While refugia have not been deliberately used in Atlantic salmon farming, wild salmon populations that migrate close to salmon farms may act as natural refugia. In this paper we describe an agent-based model that explores the influence of different sizes of wild salmon populations on resistance evolution in sea lice on a salmon farm. Using the model, we demonstrate that wild salmon populations can act as refugia that limit the evolution of resistance in the sea louse populations. Additionally, we demonstrate that an increase in the size of the population of wild salmon results in an increased effect in slowing the evolution of resistance. We explore the effect of a population fitness cost associated with resistance, finding that in some cases it substantially reduces the speed of evolution to chemical treatments

A Review of World Salmon Culture

World farmed salmon production reached 145,000 metric tons (t) in 1988 and an estimated 217,000 t in 1989. The latter figure is comparable to the U. S. annual salmon catch (about 250,000 t) and is approaching one-third the size of the world wild salmon catch (about 700,000 t). The rapid expansion of farmed salmon supplies in the late 1980's has led to sharp price decreases. Lower prices have forced some farmers out of business, but at the same time, a large number of farmers first began harvesting salmon on a commercial scale as the 1980's ended. Farmed salmon production could exceed 270,000 t in 1990

An industry in crisis : risk, reflexivity, sub-politics and accountability processes in salmon farming

This paper draws upon an arena study on the accounting and accountability processes used within a business sector, under intense public and regulatory scrutiny in terms of its social, economic and ecological risks. Georgakopoulos and Thomson (2004, 2005) report on an absence of environmental accounting within the salmon farming organizations for management planning and control processes. This paper extends this analysis by attempting to theorise the social and environmental accounting observed by these organizations discharging these accountability duties using insights from the risk society literature. The interviews and documentary analysis revealed the existence of an active accountability network. However, Social and Environmental Accounting techniques did not feature in the engagement processes. We observed the existence of fragmented accountability networks, and evidence of a struggle for domination of a techno-scientific accountability process. Within these discourses, business and cost issues were evident, but they were not formally quantified or systematically integrated. We find that the accountability processes observed in our arena study, were consistent with Beck's (and others) analysis of reflexive modernity and the Risk Society Thesis This paper by evaluating accounting and accountability processes within a specific context, demonstrates the importance of locating social and environmental accounting processes within wider accountability discourses. These societal accountability discourses extend beyond social and environmental as well as conventional accounting practices. It is suggested that all accounting practices should become more reflexive in nature if they are to remain relevant in these wider societal accountability discourses

Concerns and research priorities for Scottish farmed salmon welfare – An industry perspective

The intensification of Scottish salmon farming has been associated with increasing demands for the monitoring and safeguarding of farmed salmon welfare. Continued growth of farm productivity, while avoiding adverse effects on salmon welfare, will require the development of effective welfare assessment tools. This paper reports on a survey of the Scottish salmon farming industry, which was conducted to understand current salmon welfare concerns and priorities for research. As part of a broader aim for further developing tools for on-farm salmon welfare assessment, a total of 61 individuals working in the Scottish salmon farming industry took part. This survey intentionally focused on industry stakeholders to provide insights into current practices and challenges associated with monitoring and assessing salmon welfare. Participants were recruited through authors' industry contacts, online advertisements, and searches of company websites. In terms of production stages, survey participants believed that the seawater rearing stage is a major area of concern, largely due to the challenges presented by sea lice. Gill health and environmental challenges, mainly relating to water quality, were two other highly ranked welfare concerns. Methods to monitor salmon welfare during husbandry practices, where disturbances and contact with the salmon is unavoidable (particularly during crowding, grading, and interventions), were emphasised as a priority. Although these were identified as the major concerns, the survey indicated that there are other significant welfare concerns specific to each production stage that also require consideration. Participants highlighted non-invasive, remote, and animal-based welfare measures as important areas for further development for on-farm welfare assessments. Behavioural measures were identified as having the potential to make a major contribution in this context. This survey presents the first collection of opinions from professionals employed across the Scottish salmon farming industry regarding the current overall state of farmed salmon welfare. This study upholds the importance of using an integrated approach to welfare assessments, and that behavioural measures could play an important role in ensuring these assessments benefit both salmon welfare and farm productivity