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Two main factors have determined the development for successful aquaculture species—productivity growth and demand growth. However, while we have substantial knowledge of productivity growth, our insights are more limited for demand growth. In this article we investigate the demand growth for salmon in the EU and France using an index approach. Depending on exogeneity assumptions, the measure of demand growth will be either price or quantity oriented. The results indicate that demand growth has been substantial as it is 7.6% per year for the EU and 4.7% for France, on average. The demand growth is anything but smooth over time though, as there are several periods with negative demand growth as well as periods with substantially higher demand growth.
Product aggregation levels in the seafood demand literature are normally selected based on the research objectives rather than on empirical tests. This study applies the Generalized Composite Commodity Theorem (GCCT) developed by Lewbel (1996), to test the aggregation of French household demand of salmon. The results indicate that demand for salmon can be aggregated based on product form (i.e., fresh, frozen, and smoked salmon). These composites can be further aggregated into a single salmon category. Salmon demand can, therefore, be estimated using a system which only includes salmon equations. The composite demand elasticities estimated by the AIDS model suggest that fresh and smoked salmon significantly substitute each other in the French salmon market. This means that the estimation of an import demand system that does not include smoked salmon cannot really explain real consumer demand. The results also suggest that wild salmon is playing in a different market niche than farmed salmon.
Aquaculture, as all animal production, is exposed to diseases which can cause negative publicity and market impacts. A recent example is the Chilean salmon farming industry, which is currently facing unprecedented economic losses due to an outbreak of infectious salmon anemia. We conducted two consumer experiments to investigate spillover effects of negative publicity on consumer valuation of seafood products from unaffected countries and species, as well as a potential mitigating strategy that an affected industry might use. We find significant negative spillover effects on the same species produced in unaffected countries and on other fish species farmed within the affected country. We also find that building a brand association with an upscale retailer does not improve the consumer valuation (i.e., no positive spillover effects) for products from directly and indirectly affected countries of the affected species.
Most fish stocks are targeted by different fleets using different types of vessels and gear. Heterogeneous fleets can contribute to variations in vessel performance, as the potential of each vessel type and gear differs when it comes to harvesting fish. Different management regimes among vessel groups can amplify these variations. To explore this issue, this article investigates differences in efficiency between and within vessel groups in the Norwegian groundfish fleet. Whereas efficiency differences within a group of relatively homogeneous vessels reflect managerial abilities, efficiency differences between different groups of vessels reflect the use of different technologies and/or management regimes. Our results indicate the presence of significant inefficiencies. Given the substantial variation in technical efficiency both between and within vessel groups, both managerial skills and an inefficient management regime in the study fishery are documented.
This article assesses the economic feasibility of capture-based bluefin tuna aquaculture on the US East Coast and examines the potential of this hybrid form of aquaculture production to increase the net economic value generated in the US East Coast bluefin tuna fishery. A bioeconomic model of an offshore capture-based bluefin tuna aquaculture facility is used to evaluate the economic feasibility of this form of production on the US East Coast under a variety of economic, biological, and regulatory assumptions. The results suggest that of the three proposed farming sites along the US East Coast, the expected net present value (NPV) of the operation over a 10-year operating horizon is highest at the Gray's Reef, GA, site. The second part of this article assesses the extent to which the opportunity to engage in capture-based bluefin tuna aquaculture production could improve the net economic value generated in the US East Coast bluefin tuna fishery. The results suggest that if the fishery had the opportunity to engage in capture-based bluefin tuna aquaculture production, there would be an increase in the net revenue generated in the fishery. Depending on how the seasonal quota was enforced, economic improvement in the fishery ranged from a 52–142% improvement in net revenue. Even when the cost per fish associated with capture-based bluefin tuna aquaculture production was doubled, the results still indicated that the opportunity to engage in capture-based bluefin tuna aquaculture production would lead to a 12% increase in net revenue in the fishery.
In this study we measure change in total factor productivity for production of Atlantic salmon in Norway from 2001 to 2008. The Malmquist Productivity Index (MPI) is used. Our results demonstrate that total factor productivity change measured by MPI increased from 2001 to 2005, but thereafter regressed. This is due to a regress in the technical change component of the MPI. The efficiency change component is as strong as before. We interpret this result as an indication that the industry has reached a level of technological sophistication from where it is difficult to make substantial progress. For an individual producer it may still be possible to improve efficiency by catching up relative to the best practice frontier. When this possibility is exhausted, the total factor productivity change for the industry may come to a halt.
The short-term relationships between the supply of farmed salmon and its market and biological determinants are not fully understood. In this article an econometric model of salmon supply is estimated exploiting monthly data on Norwegian salmon aquaculture. Our estimates indicate that supply has shifted over time due to innovations in several areas. We find that the price of farmed salmon has a limited effect on supplied quantity, giving a highly inelastic short-run supply elasticity. The biomass and seasonal factors are the main determinants of shifts in salmon supply in the short term.