Chapter V: "Caught in a Staples Vise: The Political Economy of Canadian Aquaculture” - Jeremy Rayner (Malaspina) and Michael Howlett (SFU)
Aquaculture in Canada is a small, rapidly-growing high-technology resource sector “caught in a staples vise”. On the one hand it is an archetypal case of a new ‘post-staples’ resource industry: combining high capital intensity and sophisticated technology to produce a new, post-staples, version of a classic staple resource – food fish (Hutton, 1994). On the other, it perpetuates many of the same social and economic problems and issues that plagued traditional staples political economies: namely a hinterland location and heavy export reliance (Innis, 1930 and 1933). This chapter assesses these contradictory and sometimes conflicting developments and trends in a resource industry for the most part situated in a very uneven transition towards a post-staples political economy.
(Overly) Optimistic Expansion in the 1980s and 1990s
As it is currently configured, the aquaculture sector is composed of two basic industries, the shellfish and finfish sectors, which use very different techniques to produce different species of marine animals. Shellfish volumes and values remain much smaller than their finfish equivalents at present, with finfish output accounting for about 77% of total volume and 88% of value of total Canadian production in 2003 (Statistic Canada, 2004). The Canadian finfish industry, up until now based largely on Atlantic salmon (Salmo salar) has enjoyed phenomenal growth in output over the last two decades. Output in 2001 alone showed a 25% increase over 2000 levels, and reached 136,000 tonnes in 2002 before falling back to 119,000 tonnes in 2003. Canadian shellfish production grew by 17% between 2000 and 2001, and continued to grow, albeit rather slowly, reaching 35,521 tonnes in 2003. The value of Canadian farmed finfish sales also fell 3.3% between 2002 and 2003, to $643 million, after many years of rapid growth, illustrating the continuing similarities between ostensibly ‘post-staples’ and traditional staples industries. The weakness of the US economy combined with overproduction and fierce competition between the two major producing countries, Chile and Norway, has continued to drive down world salmon prices. Shellfish values, where the species mix is also more diverse and associated environmental problems less severe, have held up rather better, increasing interest in the sector in recent years (PriceWaterhouseCoopers, 2001).
The very rapid growth of aquaculture volumes and values over the last decade is, of course, not unique to Canada (Burros, 2005) and is linked to declines in traditional ‘wild’ or ‘capture’ fisheries. The declines in many significant capture fisheries around the world combined with increasing world demand for seafood products has led to concerns about food security and aquaculture has been widely promoted by governments and international agencies such as the FAO as an essential tool to address the food security issue (FAO, 2004). World farmed salmon production volumes surpassed the wild fishery in 1997 and the development of new farmed species such as cod and tuna is well advanced. Rosy forecasts in this sector are common. Former federal fisheries minister Herb Dhaliwal, for example, predicted a Canadian industry worth $2bn by the end of the decade (Canada, Senate, no date). A widely quoted report by Coopers Lybrand for the federal Western Economic Diversification (WED) program suggested that the value of British Columbia shellfish production alone could climb from $12 million to $100 million between 1997 and 2006 (Coopers Lybrand, 1997). The possibility of creating thousands of new post-staples resource and associated service and other jobs in coastal communities hard hit by declines in other resource sectors has helped persuade governments like that of British Columbia to lift moratoria on new shellfish and finfish farm tenures and launch policies such as the Shellfish Development Initiative (SDI) aimed at doubling areas under tenure over the next decade (http://www.agf.gov.bc.ca/fisheries/Shellfish/shellfish_dev.htm ).
Emerging Problems with Aquacultural Development
As a result of declines in the wild fishery and the growing level of investment in fin and shellfish aquaculture, Canadian aquaculture policy emerged in its modern form after 1984, when the federal government undertook a complex multi-level process of policy renewal after almost a century of benign neglect. Following an initial period in which the foundations for the new policy were laid through intergovernmental agreements, both the federal and provincial governments adopted numerous policies aimed at the promotion of the aquaculture industry.
Yet, in spite of the optimism and the apparent convergence of government policy on promoting aquaculture development, progress in this post-staples sector remains limited in many parts of Canada. For all the efforts to diversify into new species and new locations, the sector has encountered a series of market and environmental problems which have restricted its expansion. The finfish industry, for example, remains dominated by the production of Atlantic salmon in a restricted number of locations in BC and New Brunswick. While the value of farmed salmon output is now twice the landed value of the hard-pressed Pacific salmon fishery, the total value of aquaculture output in Canada as a whole, by contrast, is still less than half the total landed value of Canadian capture fisheries ($580 million compared with $1.2 billion in 2003). Even in British Columbia, the total value of farmed salmon output is still dwarfed by the combined values of the capture fisheries for all species and by the lucrative, tourist-oriented, sport fishery (Marshall, 2003). This makes the capture and sport fishery constituencies and their allies in the federal and provincial governments formidable opponents when the interests of wild fishery and aquaculture come into conflict. Thus, in addition to the weakness of international farmed salmon prices and the shaky financial state of some of the world’s largest companies with operations in Canada, Canadian aquaculture producers face significant scrutiny by a characteristically post-staples coalition of traditional fishers, First Nations and environmentalists concerned about the impacts of the industry on the marine environment, on surviving stocks of wild fish, and on native rights, title and employment. Issues have been raised about every stage of the aquaculture production process, especially the use of wild fish stocks to make feed pellets for farmed fish, the impact of wastes, parasites and diseases on local wild stocks, and the human health implications of therapeutant residues, colourants, and contaminants contained in the final food products.
The environmental coalition has adopted tactics familiar from other traditional staples resource areas, such as forestry, and those involving food production, such as struggles over genetically-modified crops and food products, to undermine consumer confidence and promote enhanced government (and industry self-) regulation. In particular they have alleged collusion between industry and government to suppress unpleasant facts about the environmental impacts of finfish aquaculture. US consumers, for example, have been targeted with a slick “Farmed and Dangerous” campaign that has encouraged restaurant-goers to demand wild salmon, has pressured some large US retailers to label farmed salmon as artificially coloured, and urged both to express more general concerns about the negative publicity surrounding Canadian salmon farms (www.farmedanddangerous.org). More seriously still, Congress has been successfully lobbied by the Alaskan salmon fishing industry and its allies to pass “Country of Origin Labeling” (COOL) legislation that will enable the opponents of salmon farming to target Canadian imports. The power of this lobby was recently illustrated when the traditional bargaining between Congress and the administration over the final shape of the Bill resulted in an indefinite delay in applying COOL to agricultural products, but immediate implementation for seafood (http://www.ams.usda.gov/cool/).
While the shellfish aquaculture component of the industry has, until recently, enjoyed rather less intense scrutiny from environmentalists, it has experienced plenty of problems of its own. In BC, for example, more than half way through the SDI the value of farmed shellfish has barely reached a quarter of its ten-year target. Problems of intergovernmental coordination, premature tenure expansion announcements without adequate consultation of local communities, uncertainty surrounding unresolved First Nations’ claims and their impact on the foreshore and coastal waters, declining water quality in traditional growing areas, lack of processing facilities and distribution networks for expanded production, and a host of other factors have surfaced. In PEI, perhaps the most successful example of shellfish industry expansion in Canada, weakening mussel prices, allegations of dumping in US markets, and increasing conflicts with other users have marked the expansion of the industry. A high profile action in the Federal Court by the Sierra Club opposing a 1400 acre mussel aquaculture development by a PEI company near the Cabot Trail in Nova Scotia suggests the difficulty of expanding operations beyond the Island and is indicative that shellfish aquaculture, widely promoted as a “green” industry, is now on the environmentalists’ radar screen. In BC and elsewhere, shellfish aquaculture development now faces the same kind of serious legitimation problems which have bedeviled the finfish sector, threatening not only the future industry, but those operations already established (Hume, 2003a and 2003b; Simpson, 2003a and 2003b; Rud, 2003; McInnis and LaVoie, 2003).