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An Aquaculture Development Strategy Ftucutive St.winiary for the State of Maine rkstl"h 1990 Al C) LU . r C) -j SH < 35 < M2 I-Or CD A68 1990 An Aquaculture Development Strategy Executive Summary for the State of Maine March 1990 IS) 11 T-1 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. 00-ow lot - 77 ;Oot @vllll tv" 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? Now 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. MR! Y, lag NO 4, Nk Q & jq vc A Mu K EVERETT MR, 4T@ M"N 4F . .. ............. 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 � Per capita U.S. consumption of seafood increased nearly 25 percent between (projected) 1980 and 1987. � 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 � Major species currently raised in both inland and ocean sites include catfish, millions crawfish, salmon, trout, baitfish, and oysters. ofpounds Aquaculture in Maine � Major species cultivated in Maine are Atlantic salmon, mussels, and oysters. Other species with aquaculture potential include trout, clams, scallops, and lobsters. � The number of leased salmon-rearing sites in Maine has grown from zero to 36 in the last three years. � 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: � Salmon and trout are grown in large, moored pens of netting and are ted daily. � Mussels are raised in suspended mesh tubes, on suspended ropes, or on the ocean bottom. � 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: � Steadily growing domestic-and world-market demand for high-quality seafood; � Growing requirements of the seaiood market for predictable supplies and consistent product quality; � Level or declining supplies of wild fisheries products; � Growing consumer concern about the healthfulness of wild seafood products; � Advances in biotechnology needed for aquaculture production (e.g., genetic engineering techniques for faster-growing fish and shellfish); and � 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: � reduces predictability and raises the expense of permitting application procedures; � reduces the provision of technical and financial assistance; � retards the development of research; and � limits the ability to interrelate development of aquaculture and fisheries. 3. The State does not provide crucial services such as: � 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; � rapid and inexpensive services for disease diagnosis and control, and health certification for fish and shellfish; � inspection and grading of seafood products (essential for consumer confidence and broadening marketing capabilities); 9 � effective policing of lease boundaries (an important incentive for investing in leases); � maintenance of basic statistics on industry production, employment, and growth (important for making both private financial and public policy decisions); and � 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: � gaps in technical expertise in a variety of areas, such as physiology, genetics, microbiology, oceanography, and biotechnology; � 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 � 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 � 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, � 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. � 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 � 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: � Very high marketing costs for all firms, regardless of size; JI � increased risk for all firms, especially at times when production constraints require the unexpected sale of product; � an often-disadvantageous selling position, even when market demand is strong; and � a strong bias against small firms, which are most affected by high fixed costs for marketing. Nt i N-lt A Strategy for Developing Aquaculture in Maine -q T'. @j .0 211 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: � Integration of aquaculture training with industry internships. � 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. � 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: � 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 � minimal requirements (e.g., siting should not interfere with navigation); Bay. Local fishermen, a � small size (1 /10 acre for nets and pens; 1/2 acre f or bottom cultu re); private landowner, and the Island Institute are � limited duration (3-4 years); cooperating in a research � 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 � 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. � 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. � 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. � 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: � Minimize state and federal agency redundancy in water-quality requirements and permitting activities. Au - FI',#" � Review current statutes to identify and-where appropriate-eliminate provisions that either do not apply to the industry or deter its development. � 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). � 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. � 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 � 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. � DMR's monitoring programs for paralytic shellfish poisoning (red tide) and other toxins needs to be expanded. � 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. � 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 � 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 � 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: � 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). � 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. � 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. � 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 pp@, I i @ i ( N 1 4@ N . -- - li@iffillilli@lmo@ 3 6668 14103 1148 A A