[From the U.S. Government Printing Office, www.gpo.gov]



                   An  Aquaculture Development Strategy                Ftucutive St.winiary
                   for the State of Maine                              rkstl"h 1990
































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      An Aquaculture Development Strategy                                  Executive Summary
      for the State of Maine                                               March 1990



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      This project was financed by a grant from the Economic Development
      Administration, U.S. Department of Commerce

      Funding was also provided by the Maine Coastal Program, at the
      Maine State Planning Office, through the National Oceanic and
      Atmospheric Administration/Off ice of Ocean and Coastal Resource
      Management.

      The Maine Aquaculture Innovation Center, through the Maine
      Science and Technology Commission, provided invaluable
      assistance in preparing and publishing this report.

      re c C











                                                               Foreword





                                                               The Maine State Planning Office and the Department of Marine Resources
                                                               commissioned this report to assess the economic potential of aquaculture in
                                                               Maine and to devise a public policy strategy that will support the aquaculture
                                                               industry in meeting its research, marketing, environmental, and technological
                                                               challenges.
                                                               The timing of this study could not be more appropriate.
                                                               Highly competitive aquacultural markets are developing worldwide, influenced by
                                                               the following factors:
                                                               1. Demand for wild seafood is strong and growing, yet supplies are constant or
                                                                  declining;
                                                               2. Many new, viable aquaculture technologies are being implemented; and
                                                               3. Canada, the world's largest exporter of seafood (especially to U.S. markets), is
                                                                  investing heavily in aquaculture.
                                                               Maine, located near major East Coast markets and having a natural environment
                                                               well-suited to aquaculture, is preparing to enter a worldwide market. A
                                                               competitive and well-structured industry in Maine, however, needs a supportive
                                                               public policy. This need was documented in Establishing the Maine Advantage: An
                                                               Economic Development Strategy for the State of Maine, a report commissioned in
                                                               1987 by Governor John R. McKernan, Jr. The report stated that aquaculture has
                                                               strong economic potential if a series of obstacles can be overcome. These
                                                               obstacles include "...the lack of a coordinated research and development program
                                                               that can support the aquaculture industry, a questionable investment climate, and
                                                               an inadequate marketing and distribution system."
                                                               In October 1988, the State Planning Office and the Department of Marine
                                                               Resources, with funding from the U.S. Economic Development Administration,
                                                               convened an Aquaculture Development Committee that included state agency,
                                                               university, and industry representatives (see list of members on inside back
                                                               cover). The Committee's mandate was two-fold: (1) to identify critical production
                                                               issues that constrain the growth of Maine's shellfish and finfish aquaculture
                                                               industry; and (2) to devise a strategy for overcoming production impediments.
                                                               This document summarizes the Committee's findings.














            Feeding time at a small salmon farm.











           Table of Contents





           Introduction                                                                                Page
           Why aquaculture?      ..................................................................................................2
           Aquaculture: a growing industry       ................................................................. ...........4
           Strong relationship with traditional fisheries       .........................................................4
           Economic/locational trends favoring Maine aquaculture             ........................................5
           A dynamic world marketplace         ................................................................................5
           State public policy needed to encourage diversity in industry            ...............................6
           New information: appropriate role for public policy          ...............................................6
           Impediments to aquaculture development in Maine               ..............................................8

           A Strategy for Developing Aquaculture in Maine
           1 .Develop and disseminate information about aquaculture               ............................... 12
           2. Cultivate a positive investment climate for small entrepreneurs             ..................... 13
           3. Designate a lead state agency to support development of aquaculture                 ........... 15
           4. Ensure consistency and predictability in the regulatory process             ..................... 15
           5. Pursue a coordinated development strategy encompassing
              aquaculture and traditional fisheries       ............................................................... 16
           6. Protect, preserve, and enhance coastal water quality            ..................................... 16
           7. Develop a comprehensive plan for use of coastal waters              ................................ 17

           Conclusion        .........  .......................................................................................... 18







            iv



                                                           @mpediments to Aquaculture Development in Maine




                                                           Inaccessibility of information essential to aquaculture development (e.g.,
                                                           production technology). Such information is often not publicly available or
                                                           is costly and time-consuming to obtain.


                                                           Lack of a lead state agency to coordinate effective action in supporting the
                                                           industry.


                                                           Insufficient state services to the industry, such as programs for training,
                                                           inspection, and grading.


                                                           Lack of coordinated aquaculture research and development among
                                                           federal, state, and university research organizations.


                                                           Lack of public understanding that the aquaculture industry, as well as the
                                                           traditional fishery, depends on good environmental quality in Maine's
                                                           coastal waters.



                                                           Lack of adequate organized market institutions for sale of cultured
                                                           seafood.







                                 ,41





           A dragger unloading cultured mussels.






                                                           Young salmon transferred from fresh to saft water.









                                                                                                                            v



        Seven Elements of an Aquaculture Strategy for Maine




          Develop and disseminate information
          about aquaculture.




        2
            Cultivate a positive investment climate
            for small entrepreneurs.




            Designate a lead state agency to support
        3development of aquaculture.



            Ensure consistency and predictability
        4in the regulatory process.


                                                                                                  Research with hatchery lobsters.
            Pursue a coordinated development strategy
        Encompassing aquaculture and traditional fisheries.



            Protect, preserve, and enhance
        6coastal water quality.



            Develop a comprehensive plan
        Tor use of coastal waters.







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      Maine's fishing industry is undergoing
      dramatic change. Pressures on traditional
      fisheries are mounting. Concerns about
      overharvesting rise, at the same time that
      demand for seafood increases. Can
      aquaculture help fishermen meet this
      demand? Can the State help sustain small-
      scale fishing operations by making it easier
      for them to supplement traditional harvesting
      with aquaculture?



















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                                                         277-

                                                                                  Cleaning oyster aquaculture equipment.






              2                                                       An Aquaculture Development Strategy for Maine




                                                                      Why aquaculture?

                                                                      Aquaculture has the potential to enhance Maine's fishing industry. Its economic
                                                                      potential far exceeds the current value of the state's traditional fisheries. Its
                                                                      biological potential is great: the industry so far is using only a few of the
                                                                      numerous possible sites and species. Even a small area can produce a highly
                                                                      valuable crop: for example, if 100 acres are seeded with oysters, approximately
                                                                      $3.5 million can be harvested each year.
              Workers use a large hose to                             By helping support the fishing industry, aquaculture can benefit coastal
              discharge the first 10,000                              communities. Compared to traditional fisheries, aquaculture provides stable
              young salmon from a ferry                               income and employment, yet is less physically taxing and dangerous. It can be
              into this floating pen near                             pursued on a small scale to supplement other sources of income. It is easily and
              Swan's Island. In a                                     economically pursued in remote areas that offer few other opportunities. For
              cooperative venture,                                    example, it can substantially bolster the often fragile economic base of the state's
                                                                      island communities.
              Mariculture Products leases
              the 18-acre site, and the                               The benefits of aquaculture extend beyond the coast, as it enhances related
                                                                      industries, such as suppliers of feed, cages, and nets; seafood processors; fish
              local Fishermen's Coop                                  markets; service providers; restaurants; and tourism industries. Seafood
              provides support services                               consumers also benefit, as aquaculture consistently provides high-quality
              such as fish handling,  Ice,                            seafood. Through the research needed to develop the industry, aquaculture also
              and feed storage.
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           provides a greater understanding of the capacity and ecology of the sea,                  Growth in Maine Aquaculture
           information we need to conserve our ocean resources. Encouraging aquaculture is           Production
           an investment in Maine's future, as well as its present.                                  value of
                                                                                                     aquacultural products
           Given the spectrum of potential benefits that aquaculture offers for Maine, it is         (in million s)
           appropriate for the State to take a lead in facilitating its development. Aquaculture
           can be a strong component of a state economic development strategy that
           provides jobs and entrepreneurial opportunities to coastal areas often subject to
           high unemployment and low-paying, seasonal work.



           Aquaculture Facts


           Aquaculture is the controlled cultivation and harvest of aquatic animals and
           plants. Mariculture is the raising of such crops in the sea.


           U.S. aquaculture
                                                                                                     1979          1989         1999
           ï¿½ Per capita U.S. consumption of seafood increased nearly 25 percent between                                    (projected)
             1980 and 1987.

           ï¿½ Since 1980, over 16 states have begun developing their aquaculture industries.
             Their successes, and those of Canada, provide valuable experiences on which             Growth in U.S. Aquaculture
             Maine's industry can draw.                                                              Production
           ï¿½ Major species currently raised in both inland and ocean sites include catfish,          millions
             crawfish, salmon, trout, baitfish, and oysters.                                         ofpounds


           Aquaculture in Maine
           ï¿½ Major species cultivated in Maine are Atlantic salmon, mussels, and oysters.
             Other species with aquaculture potential include trout, clams, scallops, and
             lobsters.

           ï¿½ The number of leased salmon-rearing sites in Maine has grown from zero to
             36 in the last three years.
           ï¿½ There are currently 68 leases for all species located along Maine's coast, with
             nearly half east of Bar Harbor. Other clusters occur near Damariscotta, Bristol,
             the Blue Hill and Bar Harbor peninsulas, and from Freeport to Kittery.
           n In 2,000 square miles of Maine's coastal waters, a total of only 2 square miles         1975       1986            2000
             is currently leased or under application for aquaculture. The average salmon                                     (estimate)
             operation covers 2.5 acres.


           Methods used in Maine for raising seafood depend on the species:
           ï¿½ Salmon and trout are grown in large, moored pens of netting and are ted daily.
           ï¿½ Mussels are raised in suspended mesh tubes, on suspended ropes, or on the
             ocean bottom.

           ï¿½ Oysters and clams are cultivated in floating trays of screen and on the sea
             bottom.






             4                                                       An Aquaculture Development Strategy for Maine




                                                                     Aquaculture-a growing industry
                                                                     Aquaculture in Maine has undergone rapid growth in the last decade. In 1979,
                                                                     cultured seafood products were valued at $450,000. The estimated value of
                                                                     current production is over $11 million-a 24-fold increase over 10 years.
                                                                     Projections for the next decade include a value equal to-or exceed ing-current
                                                                     landings for the traditional fishery of $124 million. For example, the projected
                                                                     value in 1992 of farmed Atlantic salmon alone is $88 million. By comparison,
                                                                     lobster is currently valued at $46 million and the potato industry at about $100
                                                                     million annually.
                                                                     Maine's aquaculture industry currently employs approximately 55 managers, 300
                                                                     full-time employees and approximately 80 part-time workers. Including spin-offs,
                                                                     the industry is responsible for 1,100 to 1,200 full-time equivalent jobs.


                                                                                  $ value                Maine Industry Production Values
                                                                                  (in millions)


                                                                                  125



                                                                                                         F


                                                                                  100




             Mussels grown in bottom                                              75
             culture are off-loaded in bulk

             from a hoat. Great Eastern

             Mussel Farms has heen                                                50
             culturing mussels since
             1978, and now has 30
                                                                                                                      411
             employees. The company                                               25
             holds cooperative leases
                                                                                                               M"
             with traditional fishermen
                                                                                             1988
             in Washington and                                                    0         farmed       traditional   lobster     potatoes
             Hancock Counties.                                                              salmon        fisheries


                                                                     Strong relationship with traditional        fisheries
                                                                     Often aquaculture is mistakenly seen as     separate from traditional fisheries or a
                                                                     threat to their existence. In fact, the two industries can have a strong and mutually
                                                                     beneficial relationship. Both traditional fisheries and aquaculture use the same
                                                                     human resources and shoreside infrastructure. Aquaculture companies need the
                                                                     water-related skills of traditional fishery workers, such as boat handling, net
                                                                     rigging, and product handling. In addition, Maine's aquaculture operations use
                                                                     existing traditional fishery services, such as wholesalers, processors, packagers,
                                                                     and transporters. In some cases, work in the wild fishery and in the cultured
                                                                     fishery are complementary. Lobstering in the wild and culturing of mussels form








                                                                                                                                            5





          a single employment opportunity, because they use similar equipment and fishing      Aquaculture as Percent of
          skills while peaking at different times of year.                                     Total World Seafood Landings
          Like traditional fisheries, aquaculture depends on clean water for survival, and is     1AM111111111kh.
          therefore compatible with environmental protection. Lastly, aquaculture jobs in
          Maine's rural coastal areas help communities maintain their quality of life and                                       25%
          strengthen access to waterfront areas. The opportunity for Maine is not solely one                10%
          of developing aquaculture, but of initiating a comprehensive program for
          conservation, development, and sound stewardship of all our ocean resources.

                                                                                                      1985                 2000
                                                                                                                         (projected)

          Economic/locational trends favoring
          Maine aquaculture
          The capabilities of Maine's fishing industry, advantages in natural environment
          and proximity to markets, and economic trends combine to make aquaculture a
          potentially substantial contributor to Maine's economy. These trends include:
          ï¿½ Steadily growing domestic-and world-market demand for high-quality
            seafood;
          ï¿½ Growing requirements of the seaiood market for predictable supplies and
            consistent product quality;
          ï¿½ Level or declining supplies of wild fisheries products;
          ï¿½ Growing consumer concern about the healthfulness of wild seafood products;
          ï¿½ Advances in biotechnology needed for aquaculture production (e.g., genetic
            engineering techniques for faster-growing fish and shellfish); and
          ï¿½ The natural environment of the Maine coast, which offers protected bays, high
            rates of tidal flushing, and good water quality.
          These trends are important because, although Maine is well-situated near the
          large metropolitan markets of the East Coast, aquaculture is developing rapidly
          elsewhere, creating a highly competitive environment.




          A dynamic world marketplace
          The ability to capitalize on Maine's fishery assets will be the key to competing in a       Current total U.S. production from
          dynamic world marketplace. Worldwide aquaculture production reached nearly 24
          billion pounds (over 10.6 million metric tons) in 1985, more than 10 percent of        aquaculture is about 11 percent of the
          the world's total landings of fish and shellfish. By the year 2000, aquaculture will
          be responsible for 25 percent of total fisheries landings, according to predictions        total production of edible U.S. fish
          by the United Nations Food and Agricultural Organization (FAO).
          The U.S. Department of Commerce estimates current total U.S. production from                                       and shellfish.
          aquaculture to be 620 million pounds (281,160 metric tons). This figure accounts
          for only about 2.5 percent of total world aquaculture production, and about 11
          percent of the total production of edible fish and shellfish in the U.S. The National
          Academy of Sciences projects that domestic production will reach 2 billion
          pounds by the year 2000, triple the level of current production.






               6                                                             An Aquaculture Development Strategy for Maine




                                     Farmed Atlantic Salmon                  Within the Gulf of Maine region, the province of New Brunswick produces 10
                                                                             times more farmed Atlantic salmon than Maine, despite sharing similar growing
                                                                             conditions and starting in the industry at the same time. New Brunswick benefits
                                                                             from educational and training programs; coordinated research on the federal and
                                                                             provincial levels; and a planning and administrative capacity that includes a
                                                                             coordinated permitting system, lending predictability to public policy and industry
                                                                             development. Aquaculture development in Canada strengthens that country's
                                                                             already formidable fishing industry. Canada is the world's largest exporter of
                                                                             seafood, 80 percent of which goes to U.S. markets, mostly in the northeast.




                                                                             State public policy needed to encourage diversity
                                                                             in industry
                                                                             While Maine's industry appears to be doing well without specific public policy
                                                                             guidance, a broader issue is at stake as the industry grows: what type of industry
                                                                             will characterize aquaculture in the state? A consistent State response is
               560'                                                                                e both good water quality and access to the industry for
               'r, i@ @E@
                                                                             necessary to ensur
                                                                             individuals and small businesses (e.g., traditional fishermen).
               Ulwgg,i
               50"
                                                                             State policy must recognize that protecting and improving coastal water quality is
               WON'                            365                           extremely important to the economic success of aquaculture (as well as traditional
                 111,                         tons
                                                                             fisheries). Even minor pollution incidents have dramatic negative impacts on
                                                                             consumer confidence and demand.
                 1987        1992             1987       1992
                         (projected)                  (projected)            Furthermore, if the industry continues to develop in the current regulatory and
                 New Brunswick                     Maine                     economic climate, large firms can be expected to dominate the industry. As the
                                                                             State recently experienced with the poultry industry, this concentration of jobs
                                                                             and resources could render the industry vulnerable.
                                 *Source: Economic Assessment                The number of aquatic and marine species that might be cultured in Maine waters
                                 of Salmonid Cage Culture                    is large and diverse. Adding in the varied talents and entrepreneurial skills of
                                 Industry in South western New               participants in traditional fisheries, this diversity can contribute to a broadly-based
                                 Brunswick, Fiander-Good Assoc.
                                 Ltd., for Government of New                 aquaculture economy that does not depend on any single narrow market or
                                 Brunswick & Canada Dept. of                 limited number of large firms.
                                 Fisheries and Oceans. March
                                 1988.                                       Another industry access issue relates to regulation. Under the current regulatory
                                                                             procedures, a new firm entering the industry is faced with significant up-front
                                                                             costs. These costs create a strong, artificial bias against small firms, including
                                                                             members of the traditional industry who seek to diversify their operations. The
                                                                             State needs to develop a consistent and predictable regulatory policy, and
                                                                             coordinate activities with federal agencies that have overlapping jurisdictions.




                                                                             New information: appropriate role for public policy
                                                                             The State strategy to enhance diversity in the industry must include efforts to
                                                                             generate and publicize information about aquaculture production, marketing, and
                                                                             environmental criteria.

                                                                             Aquaculture is an information-intensive industry. Acquisition and application of
                                                                             new knowledge specific to Maine aquacultural conditions is vital. Although
                                                                             aquaculture has been practiced around the world for centuries, the specific













           economic, biological, and environmental characteristics of the Maine coast require
           careful adaptation of species; experimentation with differences in water
           temperatures, currents, and other variables; and locating biologically viable sites.
           Appropriate gear and other mechanical devices need to be developed and/or
           adapted; market preferences and channels must be learned; and, of course, this
           information must be shared among potential users.
           A State public policy that nurtures the development and transfer of information is
           an appropriate public expenditure for several reasons.
           First, the inability to put a proprietary stamp on much new information makes its
           development uneconomical for the individual. Knowledge about viable seafood
           species, kinds of locations, gear, and techniques, once employed, is difficult
           information to keep confidential. Public development of this information is,                                                Dr. Herb Hidu researches
           therefore, a necessity.                                                                                                       Ways to adapt shellfish
           Second, creating new information may reduce other impediments to development,                                                  hatchery techniques to
           such as financing. In order to issue loans, for example, bankers require some                                            culturing American lobsters.
           sense of the technological and economic feasibility of proposed aquaculture
           ventures. Readily available information about technology, production costs, and                                          This tank at the University of
           market conditions significantly improves the lending climate. Numerous other                                                  Maine's Darling Marine
           examples with regard to regulation, pollution, entry of new ventures, management                                           Center aquaculture facility
           of firms and more can be alleviated by public availability of new information.                                          holds 10, ODD larval lobsters.



                                                                                                                   4K






              8                                                       An Aquaculture Development Strategy for Maine




                                                                      Third, new information will be required to adequately protect the environment
                                                                      (which, as mentioned earlier, is the cornerstone of any fisheries policy). While
                                                     "F               aquaculture depends upon a clean environment, it is a potential source of
                                                                      pollution. The State's current attempt to assure that the marine environment is not
                                                                      unreasonably affected when granting aquaculture leases can be strengthened with
                                                                      an improved informational base.
                                                                      In summary, it is essential that the State develop a consistent administrative
                                                                      response to the industry, create a thorough information base, and designate a
                                               Allb.                  lead agency for the purpose of supporting a coherent aquaculture policy.


              Lines of buoys support oyster                           Impediments to aquaculture development in Maine
              trays in the Damariscotta
              River at Dodge Cove Marine                              For Maine to move forward with aquaculture development and implementation,
              Farms. In June, floating trays                          the State will need to examine and alleviate specific problems hindering progress
                                                                      in the industry. The most significant issues that the State can address are as
              of window screen are filled                             follows.
              with hatchety-grown seed                                1. Information essential to aquaculture development (e.g., production
              oysters. Feeding on                                          technology) is often not publicly available, or is costly and time-consuming to
              plankton, the oysters grow                                   obtain. This tends to:
              from 3mm to 40mm in                                          a create significant up-front costs for new entrepreneurs;
              diameter. In late September,                                 m handicap small firms that cannot afford up-front learning costs;
              they are removed and                                         m limit opportunities for small-scale incremental investment traditionally
              planted on leased sea-                                         pursued in the fishing industry;
              bottom beds to grow to full                                  m increase costs of operation for existing firms; and
              size. This facility uses from
              120 to 300 trays and extends                                 m create uncertainty among banks and others in the investment community.
              over two to three acres.                                2.   Lack of a lead state agency severely impairs aquaculture development in
                                                                           several respects. The absence of interagency coordination:
                                                                           ï¿½ reduces predictability and raises the expense of permitting application
                                                                             procedures;
                                                                           ï¿½ reduces the provision of technical and financial assistance;
                                                                           ï¿½ retards the development of research; and
                                                                           ï¿½ limits the ability to interrelate development of aquaculture and fisheries.

                                                                      3. The State does not provide crucial services such as:
                                                                           ï¿½ marine toxic monitoring programs (essential for public health and market
                                                                             confidence in seafood) that test for several plankton-based toxins, as well
                                                                             as red tide;
                                                                           ï¿½ rapid and inexpensive services for disease diagnosis and control, and health
                                                                             certification for fish and shellfish;
                                                                           ï¿½ inspection and grading of seafood products (essential for consumer
                                                                             confidence and broadening marketing capabilities);








                                                                                                                                                                   9





              ï¿½  effective policing of lease boundaries (an important incentive for investing
                 in leases);
              ï¿½  maintenance of basic statistics on industry production, employment, and
                 growth (important for making both private financial and public policy
                 decisions); and
              ï¿½  training programs at the university and technical college levels (which can
                 raise the quality of the labor force and the number of potential
                 entrepreneurs).

          4. There is a lack of coordinated research and development among federal,
              state, and university research organizations. This creates:
              ï¿½  gaps in technical expertise in a variety of areas, such as physiology,
                 genetics, microbiology, oceanography, and biotechnology;
              ï¿½  a long-term climate in which Maine's producers are continually at a                                                          Atlantic salmon are
                 technological disadvantage relative to their competitors;                                                                processed at an Ocean
              ï¿½  a high-risk investment climate, especially in the culture of new species and                                                  Products facility in
                 adaptation of new cultivation techniques; and                                                                        Washington County. At the
              ï¿½  reduced production efficiency, especially in the early stages of the industry.                                             large end of Maine's
          5.  There is a lack of public understanding that the aquaculture industry, as well                                       aquaculture spectrum, Ocean
              as the traditional fishery, depends an good environmental quality in Maine's                                            Products is the top salmon
              coastal waters. The State must work to:                                                                                        farm in the country,
              ï¿½  strengthen the ability of state agencies to sample and classify waters                                            producing around two million
                 adequately, according to the National Shellfish Sanitation Program;                                                              pounds a year.
              ï¿½  address threats from bacterial and toxic pollution, including non-point
                 source pollution, cumulative effects of coastal development, and
                 eutrophication of Maine's coastal bays; and
              ï¿½  address the impact of aquaculture operations on the marine environment,
                 including assessing site capacities for both cultured and wild fisheries.

          6. Unlike in traditional fisheries, few organized market institutions exist for sale
              of cultured seafood. This tends to create:

              ï¿½  Very high marketing costs for all firms, regardless of size;
                                                                                                                                                                   JI
              ï¿½  increased risk for all firms, especially at times when production constraints
                 require the unexpected sale of product;
              ï¿½  an often-disadvantageous selling position, even when market demand is
                 strong; and
              ï¿½  a strong bias against small firms, which are most affected by high fixed
                 costs for marketing.



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                                                                                               A Strategy for             Developing            Aquaculture in Maine
















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                                                                                                                211











      To generate economic opportunity, income,
      and employment, the State must adopt a
      strategy that emphasizes seven elements.
      State involvement will be essential in
      developing and disseminating aquaculture
      information; cultivating a positive investment
      climate; designating a lead state agency;
      ensuring consistent regulation; coordinating
      aquaculture and traditional fisheries;
      preserving coastal water quality; and planning
      use of coastal waters.






               12                                                      An Aquaculture Development Strategy for Maine




                                                                       1
                                                                           Develop and disseminate information
                                                                           about aquaculture.
                                                                       Aquaculture is a relatively new industry in Maine. To develop its potential and-
                                                                       once developed-to maintain a competitive position in domestic and international
                                                                       markets, the State must generate and disseminate sufficient information about the
                                                                       field. It should designate public and private institutions that can (1 ) adapt
                                                                       information acquired elsewhere about aquaculture, (2) develop new information,
                                                                       and (3) disseminate this material to potential users.
                                                                       To fully pursue a new information strategy, the State must create and fund a set of
                                                                       institutions similar to those used successfully in American agriculture:
                                                                           A strong university/ technical college/ industry/ government capability in
                                                                           basic research and applied development should be supported, both for
                                        C                                  adopting new technology developed elsewhere, and developing and testing
                                                                           new technology within the state. The State and University must be committed
                                                                           to defining the forefront of biological sciences as they apply to aquaculture.
                         '.V                                               An active university/ technical college/ industry program for determining
                                                                           research requirements and disseminating new information should be
                                                                           encouraged, as follows:
                                                                              Extension services similar to those used in agriculture should be provided,
                                                                              but with an important modification. Instead of using extension agents as
                                                                              intermediaries between researchers and the industry, researchers (even
                                                                              basic researchers) and industry experts need to be brought into direct and
                                                                              frequent contact.
               A researcher evaluates virus                                   As was done successfully in Canada, a seminar series should be initiated to
               growth in fish cells in the                                    bring world aquaculture experts to Maine to provide technology transfer in
               Aquatic Animal Health                                          such areas as fish husbandry, disease control, environmental criteria for
                                                                              cultured species, seaweed culture, and animal nutrition.
               Laboratory at the University                                   The University should work to secure funding to fully implement its new
               of Maine, Orono.                                               undergraduate and graduate aquaculture curriculum. Earlier University
                                                                              programs in shellfish culturing created the first generation of aquaculture
                                                                              entrepreneurs in the State; expanding these programs to fintish and support
                                                                              services can be expected to further benefit the industry.
                                                                              Short courses, tailored to the requirements of aquacultural entrepreneurs
                                                                              starting small-scale operations, should be developed and offered by the
                                                                              University and/or technical colleges. Currently such a program, which may
                                                                              serve as a model effort, has been initiated by the Marine Trades Center at
                                                                              the Washington County Technical College, in conjunction with Sea Grant,
                                                                              Cooperative Extension, the Job Opportunity Zone program, and the
                                                                              industry.
                                                                           c3 The technical colleges should implement a course of study for aquaculture
                                                                              workers and technicians. The program planned at Washington County
                                                                              Technical College should be supported.
                                                                           The Maine Aquaculture Innovation Center (MAIC), a joint research effort of
                                                                           the Maine Aquaculture Association and Maine Agricultural Experiment Station,
                                                                           should function as a coordinating forum for the research, teaching, and
                                                                           extension interests of the State, University, technical colleges, and industry.







                                                                                                                                                                13





           Any research and development tasks should aim to fill information gaps about
           efficient production of aquacuitured species through all life history stages and
           about effects of aquaculture on the environment. Important elements of the
           strategy should include:
           ï¿½ Integration of aquaculture training with industry internships.
           ï¿½ Development of demonstration farms in finfish and shellfish. Demonstration
             farms are an important and effective way to transmit new technology to small
             entrepreneurs. They are also a very economical way to provide training and
             test new strains of cultured species. The Darling Center and the Washington
             County Technical College are logical institutions at which to develop
             demonstration farms.
           ï¿½ Coordination among all state institutions, as well as private research and
             higher education institutions, that have expertise in aquaculture and supporting
             programs (e.g., business, engineering, oceanography, fisheries, genetics, and
             microbiology).




           2
               Cultivate a positive investment climate
               for small entrepreneurs.
           Small individual entrepreneurs and family-owned firms, especially those in
           traditional fisheries, depend on an investment process that permits them to
           acquire new technology, experience, and capital in small increments. This allows
           the small entrepreneur to gain experience, reduce risk, prove new technology, and
           establish a track record without large up-front costs. For this kind of investment
           to succeed, information about technology and marketing must be readily
           accessible, and regulations must not require a large initial investment. The
           traditional fishing industry is a source of exceptional, proven entrepreneurial
           talent. This valuable resource can only be mobilized if the State creates a favorable
           investment and market climate for small aquaculture business by taking the
           following actions:
           ï¿½ Minimize the initial (not final) regulatory requirements faced by small                                                  Three thousand salmon are
             operations. The current permitting approach should be supplemented with an                                                raised in a floating pan at
             alternative small-scale, general experimental permit. The basic guidelines of
             this permit should include:                                                                                              Allen's Island in Muscongus
             ï¿½   minimal requirements (e.g., siting should not interfere with navigation);                                               Bay. Local fishermen, a
             ï¿½   small size (1 /10 acre for nets and pens; 1/2 acre f or bottom cultu re);                                            private landowner, and the
                                                                                                                                              Island Institute are
             ï¿½   limited duration (3-4 years);                                                                                         cooperating in a research
             ï¿½   a requirement that during the experimental period, the leaseholder gather                                            and experimental project to
                 and make public the site-specific environmental data necessary for meeting                                                  demonstrate a small
                 full regulatory requirements; and                                                                                    aquaculture operation. The
             ï¿½   the short courses and other services previously outlined should be tied in                                            offshore site's waters are
                 some explicit way to the experimental permitting process, to increase the                                            protected enough for fish to
                 likelihood of both regulatory and eventual economic viability.
           ï¿½ Use the experimental lease approach just described to improve the regulatory                                             survive winter "superchill.
             assessment of environmental impact. Under the State's current procedures,






              14                                                      An Aquaculture Development Strategy for Maine





                                                                           an assessment of environmental impact must be made before any practical
                                                                           experience with a site is acquired. This is not optimal given that conditions
                                                                           from site to site may vary. Consequently, an experimental period during which
                                                                           site-specific data could be gathered would be beneficial from an environmental,
                                                                           as well as economic, perspective.
                                                                      ï¿½    Support the Finance Authority of Maine's efforts to encourage Legislative
                                                                           funding of the Natural Resources Capital Investment Fund, a revolving loan
                                                                           fund that would provide necessary financing for piers, pens, nets, work
                                                                           platforms, and related equipment.
                                                                      ï¿½    Take steps to minimize the costs, time, and uncertainty that Maine firms face
                                                                           in marketing aquaculture products. The State's policy should be to establish
                                                                           organized market mechanisms capable of providing Maine firms with flexibility
                                                                           in their marketing approach. Given the large number of species that may be
                                                                           cultured in the future, the highly varied nature of sales contracts and
                                                                           conditions, and the rapid change that characterizes the seafood market, Maine
                                                                           firms need to be in a position where they can readily locate new buyers and
                                                                           arrange (or rearrange) their contracts. The State can facilitate this flexible
                                                                           structure by pursuing the following.
                                                                           o Continue joint development by the industry and State of grading and
                                                                             inspection standards. Such standards assure public health and describe
                                                                             product quality for efficient and flexible marketing.
                                                                           o Establish an electronic clearinghouse or other appropriate public market
                                                                             mechanism. Any mechanism of this sort should be tied to the existing
                         WoRximc, DEcK                                       Portland Fish Exchange (currently used for wild seafood). Sellers of
                                                                             cultured (or, when appropriate, wild) seafood should be given access to
                                                                             what might be termed a "near futures market," in which they can arrange
                                                                             contracts to deliver a product at some specified future date. Such a market
                                                      A/ 0 J
                                                                             would provide greater certainty for sellers and buyers, create low-cost
                IFED 8,A4                                                    access to a national network of brokers and wholesalers, and generate
                                                                             better prices for sellers.
                                                                             However, it is important to note that the electronic trading of seafood
                                                                             (either cultured or wild) can only succeed if quality descriptors for the
                                                      Fk v TW 7-,.,U
                                                                             product are well-established and provide the basis for third-party arbitration
                                                                             of disagreements between buyers and sellers.
                                                7_10.4L SCOOP              o Assist the aquaculture industry and the Portland Fish Exchange in
              13-1                                                           developing other specific opportunities for marketing cultured products.
                                                                           o Assist the industry in establishing a marketing cooperative.
              A locally-designed tidal-                                    o Extend the "Certified Maine Seafood" program (the Department of Marine
              powered upwalling nursery                                      Resources' voluntary quality inspection) from wild seafood to cultured
              for growing shellfish. Very                                    products (e.g., mussels and salmon) that meet the same standards.
              small hatchery oysters,
              clams or scallops are placed
              in the floating, moored pen
              to grow to an intermediate
              stage. The pen requires a
              minimum one-knot current

              to function.







                                                                                                                                                       15





             Designate a lead state agency to support                                                   --- ----
                                                                                                                                       y7!
         3development of aquaculture.
         If Maine is to develop a progressive aquaculture policy, the State must designate a
         lead agency to be responsible for organizing and disseminating information about
         the industry.                                                                                 !P
         The Department of Marine Resources (DMR) is the most appropriate state agency
         to assume lead status. The DMR is the only agency in the state with sufficient                                    4qop-
         fisheries experience and understanding of the issues involved in aquaculture                                            f,
         development. The agency is also experienced in balancing the competing
         demands of fostering industry development and enforcing regulations.
         Key responsibilities for DIVIR would be to administer permits; collect statistics;
         disseminate information about the industry; and provide a state link with the
         United States Department of Agriculture (USDA), the lead federal agency for U.S.
         aquaculture development. In addition, DIVIR services should be expanded in
         pathology and health certification for imported and exported fish and shellfish.




         4
              Ensure consistency and predictability
              in the regulatory process.
         Aquaculture is a business with many inherent risks. Variables affecting
         operations include weather conditions; diseases; changing markets; and, of
         course, the availability of financing. To meet the demands of aquaculture                                           Salmon are harvested when
         entrepreneurship, growers and lenders must have confidence in time-frames and
         costs for business development. Uncertainty impedes small and large firms alike,                                  they reach three years old, at
         and limits their ability to finance aquaculture ventures.                                                                   this pen complex off
         In most cases, it is not regulation itself that hinders aquaculture. Rather, it is the                                 Eastport. Ocean Products
         time required to obtain permits; uncertainty about the roles of regulatory                                              began raising salmon in
         agencies; and inadequate information about which regulations apply in specific                                          1982, and now has over
         situations. Maine's aquaculture industry cannot effectively plan for the future if the                                          125 employees.
         current variations in permitting schedules and cost continues.
         The present regulatory approach also creates uncertainty for the State regarding
         eventual environmental impacts of each aquaculture site. Current procedures
         require a forecast of environmental impacts, but do not provide the basis for
         collecting site-specific data necessary for a reliable forecast. Given that the marine
         environment is complex and subject to continual change, good environmental
         forecasts depend on a multi-year history of data from a particular site.
         The State could help assemble better general and site-specific data by building
         upon interagency discussions currently underway (at both the state and federal
         level). The goals of the discussions should be to:
         ï¿½  Minimize state and federal agency redundancy in water-quality requirements
            and permitting activities.
                                                                                                                                     Au - FI',#"




















         ï¿½  Review current statutes to identify and-where appropriate-eliminate
            provisions that either do not apply to the industry or deter its development.
         ï¿½  Establish a "one-stop shopping" format for lease applicants in which the lead
            agency would develop a single application and coordinate the involvement of
            other agencies. The lead agency would also offer technical assistance in






            16                                           An Aquaculture Development Strategy for Maine




                                                         answering permitting questions; publish a guidebook on aquaculture regulation
                                                         in Maine; and hold annual workshops in different locations to educate lease
                                                         holders and lease applicants about technical information (e.g., changes in law,
                                                         general permitting guidelines, and specific agency regulations).
                                                         ï¿½  Increase deterrents to violating aquaculture leases. Currently, fines assessed
                                                            by the court system are often $50 for a first offense, even it thousands of
                                                            dollars of production are at risk. The penalty assessed should be increased,
                                                            and should include loss of shellfish license and restitution for the dollar value
                                                            of the stolen product. In addition, the DIVIR needs to take a more active role in
                                                            marking lease boundaries (perhaps by flagging) to give the industry a greater
                                                            presence on the water. A lack of lease protection, or even the perception that
                                                            leases are inadequately protected, serves as a disincentive to aquaculture
                                                            investment.

                                                         ï¿½  Streamline federal permitting procedures, as this appears to be the most
                                                            significant regulatory issue affecting the industry.




                                                         E
                                                            Pursuea coordinated development strategy
                                                              ncompassing aquaculture and traditional fisheries.
            Aquaculture can become an important          Aquaculture and traditional fisheries share many of the same markets, resources,
                                                         suppliers, and labor skills. Most importantly, aquaculture can become an
            economic opportunity for Maine               important economic opportunity for Maine citizens currently engaged in traditional
                                                         fisheries. From the State's perspective, their entrepreneurial abilities and water-
            citizens currently engaged in                related skills should be viewed as valuable human resources that provide an
                                                         important component in developing aquaculture. Consequently, the development
            traditional fisheries.                       of aquaculture and traditional fish.eries should be closely coordinated.
                                                         a  The DIVIR should continue to extend its marketing programs to aquaculture
                                                            products.
                                                         a  The electronic exchange, grading, and inspection programs should be
                                                            extended to cultured fisheries products.
                                                         m  People currently engaged in traditional fisheries should he viewed as the
                                                            principal audience for the University and technical college programs
                                                            previously mentioned. Those programs should be based on the premise that
                                                            aquaculture and traditional fisheries are a single, integrated industry.




                                                            Protect, preserve, and enhance
                                                         6coastal water quality.
                                                         Clean water is essential for the health of the aquaculture industry. However, the
                                                         state's marine and coastal waters are threatened by growing pollution from
                                                         overboard discharges, industrial wastes, tailing septic systems, inadequate
                                                         municipal sewers, combined sewer overflows, and non-point sources. Pollution
                                                         poses the greatest threat to shellfish, since filter feeders tend to accumulate
                                                         bacteria, viruses, heavy metals, and hydrocarbons. The State must act to assess
                                                         the status of our coastal waters and sediments, and to determine trends over
                                                         time.







                                                                                                                                                            17





          ï¿½  Full support of the Department of Environmental Protection (DEP) and the
             DIVIR's Marine Environmental Monitoring Program is needed to assess the
             extent, effects, trends, and sources of pollution in Maine's coastal waters. The
             State should consider funding of $100,000 per year for DEP to monitor status
             and trends at 30 sites coast-wide.

          ï¿½  DMR's monitoring programs for paralytic shellfish poisoning (red tide) and
             other toxins needs to be expanded.
          ï¿½  For the DEP and DIVIR to determine environmental impacts and seafood-
             growing capacities for pen culture sites, $120,000 is needed for a baseline
             study involving 6ottom sampling of invertebrates; hydrographic studies;
             sediment studies; literature review; and field work/diving.
          ï¿½  Maine should cooperate with the Environmental Protection Agency to initiate
             watershed management programs.




          T
              Develop a comprehensive plan                                                                                      A mussel-dragger brings in a
               or use of coastal waters.                                                                                           harvest of hottom-cultured
          As aquaculture increases in Maine and becomes a more integral part of our food-                                             shellfish off Vinalhaven
          producing industry, issues will intensify concerning:                                                                   Island. Joe Upton is a good
          ï¿½  Water quality (the importance of clean water for the industry, as well as                                             example of fishermen who
             environmental impacts of the industry); and                                                                                   have diversified by
          ï¿½  Suitable sites for growing operations in a coastal environment characterized                                               adding aquaculture to
             by competing uses (such as marina development, traditional fishery areas, and                                                   their operations.
             views from private shorefront property).
          If we are to sustain our coastal resources and develop them in a balanced, rational
          manner in the years ahead, the State needs to develop criteria for allocating
          scarce resources among competing uses. Aquaculture, previously an uncommon
          use of Maine's coastal areas, will need greater attention as it takes its place
          among many uses of our coastal resources.







        18



                           Conclusion    Maine's aquaculture development strategy as proposed here will help further the
                                         goals of coastal legislation enacted in 1986 with overwhelming public support.
                                         That law (P.L. 794) established nine policies to guide future decisions affecting
                                         coastal resources.
                                         The proposed aquaculture production strategy addresses several of these coastal
                                         policies:
                                         ï¿½ Support for maritime uses-The coastal policies recognize the economic and
                                           cultural importance of Maine's marine industries. The aquaculture
                                           development strategy reinforces these industries and demonstrates the
                                           symbiotic relationship between traditional fisheries and aquaculture. Although
                                           the two types of fisheries are often pursued separately, they are
                                           complementary (as demonstrated by the growing numbers of people involved
                                           in both wild and cultured fisheries).
                                         ï¿½ Shore management and access-Marine uses must be assured of adequate
                                           waterfront facilities in the face of competing residential and commercial
                                           development. While many municipalities support marine uses along
                                           waterfronts through zoning, the State needs to offer economic incentives for
                                           marine industries to expand. The aquaculture development strategy outlines
                                           specific activities that will ensure continued shoreline access for marine users.
                                         ï¿½ Marine water quality-Another policy supports sustained and improved
                                           marine water quality, in part because clean water is essential to Maine's fishing
                                           industry. The aquaculture strategy recommends increased monitoring of
                                           marine waters and recognizes that aquaculture can be pursued without
                                           jeopardizing water quality.
                                         ï¿½ Coastal heritage and economy-Both the coastal policies and this strategy
                                           call for economic development activities that are compatible with our coastal
                                           heritage. Unlike many of the large economic development projects that were
                                           proposed for coastal Maine in the early 1970s (e.g., oil refineries and
                                           aluminum smelters), aquaculture can build on the existing skills and traditions
                                           of coastal residents.












         Aquaculture Development Committee

         Richard H. Silkman, Chairman
         Director, State Planning Office


         William Brennan                                Karen Lazareth
         Commissioner                                   Finance Authority of Maine
         Department of Marine Resources                 Bill Mook
         Hsiang Cheng                                   Maine Aquaculture Association
         Agriculture Resource
         Economics Department                           Ron Phillips
         University of Maine                            Coastal Enterprises Inc.
         Chip Davison                                   John Prichard
         Great Eastern Mussel Farms                     Eastern Maine Development
                                                        Corporation
         Peggy Henderson
         Department of Economic                         John Riley
         and Community Development                      University of Maine
         Jeffrey H. Kaelin                              Wally Stevens
         Maine Sardine Council                          Ocean Products Inc.



         Committee Staff                                Project Consultants


         David Keeley                                   John G. Ferland
         Director, Coastal Program                      Coastal Strategies Inc.
         State Planning Office                          Carter R. Newell
         Anne Johnson Hayden                            Maine Shellfish
         Policy Analyst                                 Research & Development
         State Planning Office                          James A.Wilson
                                                        University of Maine











         Editing: Carol J. Boggis                       Photos.- Great Eastern Mussel Farms,
         Graphic design: Laurie Downey                          Inc.-p. 4
         Production consultant., Flis Schauff ler               Richard Howard-pp. 1, 8
         Copies of the full Aquaculture Development             Peter Ralston/island Institute-
         Strategy report can be obtained from the               pp. ii, 2, 9, 13, 17
         Maine Coastal Program, State Planning                  University of Maine-pp. 7, 12
         Office, Station 38, Augusta, ME 04333.                 Bill Mook/Mook Seafarm-
         207/289-3261.                                          illus. p. 14



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