Sunday, 31 December 2017

Fish Farms and Neoliberalism - John Volpe, Updated Jan 2, 2018

When I was doing the posts on Kjersti Sandvik's, Under the Surface, an expose of the fish farm industry in Norway, she covered the issue of neo-liberalism in Norway. The term meant that government did nothing other than provide the best conditions for its industry to succeed. Not what the rest of the world believed. It lead to, among other things, Cermaq being created inside the Norwegian government, and made many politicians filthy rich. In the rest of the democratic world we think of this as fraud.

Not so in Norway, and thus one begins to understand how the major companies, Marine Harvest, Cermaq and Grieg Seafood, from the first day spent a great deal of their effort on communications' spin and bullying governments once they had suckered them in with the 'jobs and revenue' spin - they don't actually deliver on the most important part of their spin, as the number of jobs is low and revenue goes back to Norway to be delivered to shareholders.

Here are a number of links to posts I did on Sandvik's book in 2016. There are more:

Mar 26, 2016:

Mar 31, 2016:

May, 2016 This post makes it clear that fish farms are not about jobs and revenue, they are for making money, as much money as possible, for shareholders. Go read it.

Sept, 2016: This one has the profit margin of 23- to 25% the industry makes - a licence to print money.

Now, the take by John Volpe, BC, who has done the snorkeling of rivers, finding Atlantic salmon - a foreign invader - in as many as 97% of rivers with multiple species of Pacific salmonids. Shocking. You will find several more posts on Volpe in December, 2017 on this site.

Volpe did an overview of the industry in the following chapter: Fish Farms and Neoliberalism: Salmon Aquaculture in British Columbia. Most of his conclusions agree with mine, and if you read this site, you will have met my conclusions regularly. Where we disagree, I think it comes down to knowing that the Norwegian take on neo-liberalism is vastly different from the way we do things in Canada. Many of the players would be put in jail here. But the bullying of governments would not change because they don't put many people in jail in Norway - the unhappy Jo Lunder is an exception, his hundreds of millions in bribes in Uzbekistan for instance. He was the CEO of the company that owned Marine Harvest until he was thrown in jail for corruption. Make sure never to forget that it is Marine Harvest's upper CEO that was thrown in jail for corruption. Not Aarskog.

The link to the Volpe chapter is:

Below, I will give you a quote, then a comment.

Quote: And so the stage was set for the migration of Norwegian salmon farm companies to Canada. At home in Europe, Norwegian companies were being compelled to conform to strict (and in some cases costly) new operating procedures, whereas the Canadian federal government threw open the door for them to operate unfettered in Canada. The British Columbia coastline, in particular, provided exemplary physical and biological habitat required by the industry. Meanwhile, coastal British Columbia was starting to experience both the early stages of a downturn in the forest industry and some concern about the abundance of wild salmon stocks. Many coastal communities were supported almost entirely by a combination of forestry and fishing, a situation that rang alarm bells in the provincial government. Thus, a new industry that could support these communities was particularly welcome, making regulators positively predisposed to the arrival of the Norwegians to help solidify the fledgling BC salmon farming industry.

Comment: Not so. Norway went on to destroy its own ocean with 1100 fish farms operating in their fjords. And I think that JV is wrong, saying the laws were strict; that is just communications spin used all around the world, and BS. As I have said repeatedly, they said this in 2015 in Canada, Norway, Scotland and Chile, and thus the statement is necessarily false because no two countries have the same laws. And Chile is universally regarded as the filthiest fish farm country, now, sadly, invading Patagonia, one of the most revered pristine regions in the world.

Oh and that fledgling BC industry was having lots of fall out. The industry is a boom/bust one and unless one has deep pockets, you will be out of business with the first problem, like a disease or lice break out. The original BC residents who started farms got their dreams shattered. And then Marine Harvest, Cermaq and Grieg Seafood bought them up for pennies.


Quote: At the time, the BC aquaculture industry was based exclusively on farming Pacific (Oncorhynchus) salmon species. The influx of Norwegian operators also meant the importation of the Norwegian species of choice—Atlantic salmon (Salmo salar). The Norwegians had spent unprecedented resources establishing an international export market for farmed Atlantic salmon, and they were not about to undermine that success by introducing a novel (in the eyes of their major markets at that time) product in the form of farmed Pacific salmon. The transition in British Columbia’s aquaculture industry from Pacific salmon to Atlantic salmon was swift (see figure 6.1) and rang the first alarm bells for observers concerned about the impact of escaped Atlantic salmon on wild populations.

With the exception of some isolated objections lodged within the BC Ministry of Environment [Narver et al], little resistance was voiced to this paradigm shift in the BC industry.

Comment: Yes, I know some of the players and they did not own the day, unfortunately.


Quote: Perhaps the most important impact of the tremendous growth of farmed salmon production has been the erosion of the value of salmon on the global marketplace. The massive global increase in farmed salmon production resulted in falling wholesale salmon prices, for both farmed and wild salmon.

Comment: This is the fish farm industry destroying commercial fishery jobs and is one of the reasons I say that fish farms don't create jobs, they replace jobs. It is obvious in BC, when you look at the BC Stats report that this has happened in BC. Here is the table of stats:

I am glad to see this perspective. It documents that fish farms have destroyed the commercial, sport and aboriginal take, by lowering prices on the global market. This lead to bigger fishing boats and too much capital chasing declining numbers of wild salmon - because fish farms lead to their demise - to make the same amount of money, needing five times as many fish.


Quote: From 1988 to 2002, the wholesale value of BC farm salmon dropped 55 percent. To overcome this precipitous decline, producers in BC and elsewhere were forced to adopt ever-increasing economies of scale, their strategy being that to preserve a stable profit margin in a market of diminishing unit value, they needed to produce more units, as cheaply as possible. Production in 2002 had increased 895,000 times over that of 1988 (see figure 6.2). Thus, the dramatic decline in the unit value of farm salmon was more than compensated for by the rise in production by six orders of magnitude. BC is by no means unique. The same scenario has been played out in all salmon farming nations, with each company in competition with all others to produce the most salmon for the least cost.

Comment: This leads to firing employees, and saturating an area with farms. Once a farm is operating, it takes only 2 people to man it. Which is to say, that the promise of jobs is fictitious. If you read the Sandvik book quotes in my posts, you will find that the companies argued strenuously against having to train people, process in the regions, and employ locals.


Quote: The competitive profile of the industry is complicated by the fact that the vast majority of global production is generated by relatively few multinational companies, each operating in many countries. These companies can pit one region against another in their efforts to reduce costs. It is this economic reality from which most issues currently associated with industrial aquaculture arise; the globalization of salmon has transformed this fish from a seasonal, high-value delicacy to a low-value commodity available year-round that comes with significant environmental—and therefore public relations—implications. Thus, the underlying problem: as each company, in each region, has sought to lower production costs, a constant effort emerges to intensify production and reduce any inputs that add expense, such as labour or transportation, which in turn increasingly externalizes the costs of production, forcing natural or social systems to bear these cost.

Comment: Thus the bullying that the companies do because of being Norwegian neoliberal companies, that build it in to their communications spin. They are quick to send in the lawyers because they are so big. The other side of this is that the trade off for their very small number of jobs, and taking revenue out of the country, is that the environment is trashed to offload the costs of raising salmon responsibly, on land.


Quote: Given that the louse is free-floating in the Pacific Ocean, the chances of literally running into a prospective host (not to mention successfully attaching) are extraordinarily slim. Therefore, natural sea lice abundances tend to be unsurprisingly low. This scenario changes dramatically when salmon farms enter the equation. Salmon farms, by virtue of being home to as many as 1.5 million salmon restricted to cages in a 1-hectare (surface area) site provide a high chance of success for any nauplii lucky enough to float through. Eventually such nauplii attach to their host, mature, and produce nauplii of their own. However, now the chances of successfully finding a host are very, very goodresulting in more farm-salmon infections—and the cycle repeats itself until, if left unchecked, epidemic conditions rapidly set in. Although this situation is clearly bad news for the farm salmon, how does it affect wild salmon?

Comment: and fish farms like to say they get lice from wild salmon. It makes you want to punch them in the nose for saying what they know to be untrue, and destroying the ocean at the same time. My way of putting it is that if you are blaming Mother Nature for your problems, you are doing something wrong, as Mother Nature is the way things are. Put your fish farm on land.


Quote: Found in the numbered notes to the chapter, and regarding jobs and revenues: No. 3. Between 1997 and 2003, real wages in British Columbia’s fish farming industry declined 29 percent (Marshall 2003).

Comment: fish farms are not about jobs, and workers get poorly treated.


Quote: p16: Thus, perhaps the most compelling international implication of the salmon aquaculture case lies in its failures. Although fish farming is a successful international industry in financial terms, it illustrates the potential of the blue revolution to go significantly wrong. Instead of salmon aquaculture contributing to addressing global hunger, reducing pressure on wild stocks, and empowering local communities, we see quite the opposite. We see an example of the considerable promise of aquaculture missed, as an inappropriate model for aquaculture is followed.

Comment: the industry is not about jobs and revenues, it is not about feeding the hungry, and it destroys environments to produce its fish, unless it is done on land, and raises a herbivore.

Quote: p16: The primary failure here is that the industry was structured and has developed in a deeply problematic way. Put differently, although farming a high-trophic-level species poses problems if the agenda is to feed the hungry, more crucial is the fact that any industry constrained by the socioeconomic drivers that salmon aquaculture has been subjected to will struggle to do other than to externalize its ecological and social impacts, and thus will not be sustainable.

Comment: as I have repeatedly noted, the sewage, disease, lice, chemicals, destruction of pelagic feed fish and so on, are, as economists put it: externalities, in that fish farms don't pay for the environmental damage they cause.


Quote p17:  Despite declaring a temporary moratorium on the number of tenure sites in BC from 1995 to 2002 (although production during this period increased more than threefold: 27,276 tonnes to 84,200 tonnes), successive governments have, on the whole, largely encouraged the industry to expand.

Comment: the industry tripled in size at the same time as a moratorium was in place. Yes, this is crazy, and yes, this is why when you hear something from a fish farm/conflicted government, that you ground proof the claim. Do not believe anything a fish farm company/conflicted government says. It is all spin.

Quote p17: As for lice, unlike spacing farms out in Norway, here they are packed tight, thus becoming a source of lice explosions: "As the value of farmed salmon drops, the need to cluster farms more and more tightly has increased to minimize travel (and thus, costs) between tenures during the course of operations. As a result, the majority of BC salmon farm sites are highly clustered, with each cluster being located as close as possible to a town that serves as a transportation hub. Major clusters are currently situated around Vancouver Island adjacent to Port Hardy, Port McNeil, Campbell River, and Tofino. Proposed industry expansion north will see Prince Rupert on the mainland added to the list.

Comment: this is why the Broughton Archipelago, the Fraser and Clayoquot Sound (22 farms)  wild salmon numbers have crashed. Go see the Kristi Miller, geneticist's take on disease in wild salmon in this BAD NEWS BITES post: It is item 80.

Quote p18, "The ecological problems posed by the industry are a direct consequence of the pressures resulting from the need to compete in a global marketplace."

Comment:  the price of farmed salmon has fallen, thus making it more likely to jettison staff, forget lice and disease, and etc. It is part of the reason that fish farms bully governments to get their way. The mind set is Norwegian, the reason behind the bullying is the need to make money for shareholders. Go and look at the Sandvik posts at the beginning of this article to read this background on the development of the so-called Blue Revolution, which has just lead to environmental damage, not feeding the hungry and jobs are expendable as is the environment.


Quote p19: And governments:  Perhaps central among them is why the federal and provincial governments have been reluctant to more rigorously regulate the salmon aquaculture industry. We have provided a preliminary response to the question: the economics of salmon aquaculture are unforgiving, and the industry players have successfully convinced governments that stricter regulation would make their product uncompetitive in the global marketplace, thus threatening the viability of the industry.

Comment: this is a polite way of putting that fish farms bully governments. They were educated under the Norwegian neo-liberalist model, created their communications spin and follow it all around the world. The viability of the industry is not threatened, if the externalities are accepted.

The problem is that citizens who have to live with these, are less and less willing to accept the destruction of their oceans - in this case by foreigners. And consider that Jo Lunder ended up in jail for bribing officials in Uzebekistan hundreds of millions of dollars, in the job before he went to work for Fredrikson, as CEO of the company that owns Marine Harvest. If his corruption had not come out, he would still be CEO. I don't see fish farms as companies to shed a tear over.


Quote p23:  As long as the industry standard remains a globalized, low-value, homogenized product, there is little incentive or indeed little possibility for change. The strategy that BC stands to profit from is the leveraging of its own global reputation as a wild and natural paradise, home to wild (and perhaps) “sustainable farmed salmon—the ethical alternative.” But as long as BC tries to compete head to head with Norway and Chile, the industry will be hamstrung by higher costs of production, forcing it, in an attempt to remain competitive, to offload those costs to its supporting natural and human communities.

Comment: I'm not so sure. This has been done. Scotland has done the 'we are the organic ones', and spent $483 million on lice chemicals last year, and still lost 10 million salmon. And Grieg is doing the 'we are craft Skuna Bay salmon', and then got furunculosis last year. And the opposition is far larger than Norway and Chile. It includes, among others: Atlantic Canada, USA, China, Russia, Australia, Tasmania, NZ, Denmark, Finland, Sweden, the Faroes, Shetlands and etc.

And this article was written before the on-land movement started in earnest. My list has 201 on-land fish farms systems comprising almost 20,000 actual on-land farms around the world. We need fish farms out of the ocean:

Sorry to go on so long. Do read the Volpe chapter as it is a good perspective on the issues.

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