Atle G. Guttormsen

Sustainability and Global Seafood

Tight coupling to ecosystems and dependence on common-pool resources threaten fisheries and aquaculture. Although seafood is the most highly traded food internationally, it is an often overlooked component of global food security. It provides essential local food, livelihoods, and export earnings. Although global capture fisheries production is unlikely to increase, aquaculture is growing considerably. Sustaining seafoods contributions to food security hinges on the ability of institutions, particularly in developing countries, to protect and improve ecosystem health in the face of increasing pressures from international trade.

Salmon lice – impact on wild salmonids and salmon aquaculture

Salmon lice, Lepeophtheirus salmonis, are naturally occurring parasites of salmon in sea water. Intensive salmon farming provides better conditions for parasite growth and transmission compared with natural conditions, creating problems for both the salmon farming industry and, under certain conditions, wild salmonids. Salmon lice originating from farms negatively impact wild stocks of salmonids, although the extent of the impact is a matter of debate. Estimates from Ireland and Norway indicate an odds ratio of 1.1:1-1.2:1 for sea lice treated Atlantic salmon smolt to survive sea migration compared to untreated smolts. This is considered to have a moderate population regulatory effect. The development of resistance against drugs most commonly used to treat salmon lice is a serious concern for both wild and farmed fish. Several large initiatives have been taken to encourage the development of new strategies, such as vaccines and novel drugs, for the treatment or removal of salmon lice from farmed fish. The newly sequenced salmon louse genome will be an important tool in this work. The use of cleaner fish has emerged as a robust method for controlling salmon lice, and aquaculture production of wrasse is important towards this aim. Salmon lice have large economic consequences for the salmon industry, both as direct costs for the prevention and treatment, but also indirectly through negative public opinion.

Fish Is Food - The FAO’s Fish Price Index

World food prices hit an all-time high in February 2011 and are still almost two and a half times those of 2000. Although three billion people worldwide use seafood as a key source of animal protein, the Food and Agriculture Organization (FAO) of the United Nations–which compiles prices for other major food categories–has not tracked seafood prices. We fill this gap by developing an index of global seafood prices that can help to understand food crises and may assist in averting them. The fish price index (FPI) relies on trade statistics because seafood is heavily traded internationally, exposing non-traded seafood to price competition from imports and exports. Easily updated trade data can thus proxy for domestic seafood prices that are difficult to observe in many regions and costly to update with global coverage. Calculations of the extent of price competition in different countries support the plausibility of reliance on trade data. Overall, the FPI shows less volatility and fewer price spikes than other food price indices including oils, cereals, and dairy. The FPI generally reflects seafood scarcity, but it can also be separated into indices by production technology, fish species, or region. Splitting FPI into capture fisheries and aquaculture suggests increased scarcity of capture fishery resources in recent years, but also growth in aquaculture that is keeping pace with demand. Regionally, seafood price volatility varies, and some prices are negatively correlated. These patterns hint that regional supply shocks are consequential for seafood prices in spite of the high degree of seafood tradability.

The Fishery Performance Indicators: A Management Tool for Triple Bottom Line Outcomes

Pursuit of the triple bottom line of economic, community and ecological sustainability has increased the complexity of fishery management; fisheries assessments require new types of data and analysis to guide science-based policy in addition to traditional biological information and modeling. We introduce the Fishery Performance Indicators (FPIs), a broadly applicable and flexible tool for assessing performance in individual fisheries, and for establishing cross-sectional links between enabling conditions, management strategies and triple bottom line outcomes. Conceptually separating measures of performance, the FPIs use 68 individual outcome metrics—coded on a 1 to 5 scale based on expert assessment to facilitate application to data poor fisheries and sectors—that can be partitioned into sector-based or triple-bottom-line sustainability-based interpretative indicators. Variation among outcomes is explained with 54 similarly structured metrics of inputs, management approaches and enabling conditions. Using 61 initial fishery case studies drawn from industrial and developing countries around the world, we demonstrate the inferential importance of tracking economic and community outcomes, in addition to resource status.

Input Factor Substitutability in Salmon Aquaculture

The salmon aquaculture industry has experienced substantial expansion during the last two decades. This expansion is largely the result of increased productivity, with a complementary decrease in costs. A general reduction in production costs has been accompanied by substantial shifts in the shares of inputs. Hence, one may question whether the technology has changed so much that some input factors are no longer substitutes in production. In this study, we investigate this by estimating a translog cost function focusing on the difference between full and partial static equilibrium specifications. The results from the different specifications provide evidence of limited or zero substitution possibilities in salmon production. This implies that salmon farming today can be thought of as a converter or refinement industry where less valuable fish (the feed) are converted into higher-valued product.

Environmental problems, productivity and innovations in Norwegian salmon aquaculture

Abstract Environmental issues have been of central importance throughout the history of salmon aquacuiture in Norway. In this paper we will examine some of the issues, and show that while there are still problems, many have also been resolved. A major reason for this is the fact that salmon farmers have internalized many of the environmental effects into their decision‐making due to the relationship between environmental impact and productivity. Another reason, particularly when it comes to treatment of diseases, is that lack of private innovative activity due to different market failures has been compensated for by government‐sponsored research and development.

Patterns in the Relative Price for Different Sizes of Farmed Fish

Fish farming is a biological production process dependent upon biological and environmental conditions. These constraints imply that different fish farmers are likely to have a similar distribution of different sizes of fish over time. If there are no perfect substitutes for the different sizes offish in the shortrun, this production cycle can cause different relative prices between the different sizes over the year. By studying prices for different sizes of salmon for the period 1992-98, we show that such patterns exist. This can have important implications when studying aquaculture industries and markets. We look closer at two issues — optimal harvesting decisions and aggregation.

Genetically Modified Salmon and Full Impact Assessment

Health and environmental impacts of GM salmon hinge on aggregate market size, which current regulatory processes ignore. As the U.S. Food and Drug Administration (FDA) considers approving a genetically modified (GM) Atlantic salmon (Salmo salar), it faces fundamental questions of risk analysis and impact assessment. The GM salmon—whose genome contains an inserted growth gene from Pacific chinook salmon (Oncorhynchus tshawytscha) and a switch-on gene from ocean pout (Zoarces americanus)—would be the first transgenic animal approved for human consumption in the United States (1, 2). But the mechanism for its approval, FDAs new animal drug application (NADA) process (2), narrowly examines only the risks of each GM salmon compared with a non-GM salmon (2, 3). This approach fails to acknowledge that the new products attributes may affect total production and consumption of salmon. This potentially excludes major human health and environmental impacts, both benefits and risks. Regulators need to consider the full scope of such impacts in risk analyses to avoid unintended consequences (4), yet FDA does not consider ancillary benefits and risks from salmon market expansion (2, 3), a result of what may be an overly narrow interpretation of statutes.

Forecasting weekly salmon prices: Risk management in fish farming

Abstract Production of farmed salmon has increased substantially during the last decade. Most of the salmon production is sold spot, resulting in large price fluctuations both for the producer and for the exporter. No derivative markets exist; consequently, no one can hedge prices. If prices could be forecasted within reasonable confidence bounds, risk would be reduced. This study used six easily applicable procedures to forecast weekly producer prices for salmon. The procedures tested were Classical Additive Decomposition (CAD), Holt Winters Exponential Smoothing (HW), Auto Regressive Moving Average (ARMA), Vector Auto Regression (VAR) and two different naive models: post‐sample predictive accuracy was evaluated. Results indicated that the CAD model forecasted the direction of price movements best, whereas the VAR model performed best according to accuracy measures.

Real options in the forest: what if prices are mean-reverting?

Abstract When solving the Faustmann problem in a stochastic setting, it is typically assumed that prices follow a random walk process. In the present paper, we instead assume that timber prices are mean-reverting. We take a real-option approach to the cutting problem and discuss what consequences mean-reverting prices will have compared to the traditional random-walk assumption. One conclusion is that what traditionally has been seen as irrational pricing with discount rates that are too low, may represent rational pricing of relatively low-risk, long-term investments.