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Private sector support for an ecosystem
approach to mariculture through best practice

• Michael Phillips
• WorldFish Center

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Outline

• Ecosystem approach
• Mariculture and ecosystems
• Some experiences
• Moving forward

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What is an ecosystem approach?

• "An ecosystem approach to fisheries strives to
  balance diverse societal objectives, by taking
  into account the knowledge and uncertainties
  about biotic, abiotic and human components of
  ecosystems and their interactions and applying an
  integrated approach to fisheries within
  ecologically meaningful boundaries. FAO (2003)

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What does it mean?

• Minimizing impacts on ecosystems
• Maintaining ecosystem services
• Creating social and economic values
• Institutions and policies that support better
  management
• Thinking about ecosystem scales
• Partnerships

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Asian aquaculture trends
modified from DeSilva et al (2011)
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Groupers, wrasse, snappers
modified from DeSilva et al (2011)
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Ecosystem interactions in mariculture

• Coastal habitats and wildlife
• Water quality and sediments
• Feed sourcing and management
• Energy and resources
• Fish seed supply
• Aquatic animal diseases
• Food safety and quality
• Social and economic values
• Standards focus

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Taking a life cycle approach
modified from Hall et al (2011)
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Resource Old approach New approach
Low value fish, high wastage, impacts on biodiversity and water /sediment quality Sustainably sourced ingredients, emphasis on efficiency leading to better profit/net fish contribution
Seed Wild capture of seed, by catch, biodiversity impacts, disease risks Hatchery reared, closed cycle, improved seed quality, disease control
Habitats Limited awareness of habitats, risks of damage to corals, seagrass, inshore crowding Carrying capacity respected, downstream habitat damage risks, better integrated
Energy Energy costs, resource use inefficiencies Efficient energy use, alternative energy sources, reduced GHG footprint, climate finance
Food safety Use of chemicals, limited awareness and responsibility for worker and consumer health Food safety awareness, consumer and producer chains that connect consumers with producers and create value for all
Social conflicts Inter-sectoral conflicts over access to coastal areas sub-optimal use of resources Better planning and coastal management arrangements leads to balanced coastal resource use
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Growth projections require change
modified from Hall et al (2011)
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Challenges of improvement

• Weak market incentives for change
• Fragmented value chains and lack of incentives
• Institutional capacity and policy orientation
• Large number of small-scale farmers
• Small-scale farmers represent a special
  challenge
• Social and economic importance (70-80)
• Marginalization from institutions, services
• Vulnerabilities
• In other major traded products, such as shrimp,
  a buyer shift away from small-scale farmers,
  leading to further marginalisation and
  vulnerability

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Drivers of improvements in practice

• Government legislation/policy
• Incentives for buyers and consumers
• Incentives for value chain actors
• Incentives for farmers
• In absence of weak market/ drivers, production
  improvement can be a positive driver for change
• Two lessons of farm-level best practice adoption
  in coastal ponds in Asia

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Better practices examples from coastal ponds in
India and Indonesia
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Principles to practice

• Pond preparation
• Sourcing Good quality seed
• Water quality management
• Feed management
• Biosecurity
• Health management
• Food safety
• Traceability
• Better Harvest and post-harvest Practices
• Environmental awareness
• Farmer groups and organizational development

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Reduced Disease Risks
Improved profitability
Better management delivers reduced risk and
improved outcomes an example from India
Year BMP ponds Non BMP
2003 82 89 7
2004 37 52 20
2005 15 42 27
2006 17 44 27
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Economics (US per ha)
Better management delivers reduced risk and
improved outcomes an example from Aceh
Gross Revenue increased by 14
Profit Doubled over the year
Note US 1 IDR 9500
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Compliance brings profitable outcomes
Pond Grades Ponds () Mass Mortality ( ponds) Yield (Kg/ha) Expenditure (US/Ha) Profit (US/Ha) BCR
A 16 14 159 291 271 1.93
B 59 29 103 195 171 1.88
C 25 31 100 153 190 2.24
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Profitable small-scale ponds in coastal Aceh
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Progress in Aceh
2656 Farmers
260
1150
Post-Tsunami Rehabilitation
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2008 Cluster level extension 4 Clusters 34
Village 260 farmers 184 Ha 22 tonnes
2009 4 ALSC 3 districts 84 Villages 1150
farmers 1027 Ha 105 ton shrimp 35 ton fish
2010 4 ALSC 3 Districts 100 Villages 2656
farmers 2250 Ha 250 tonnes Shrimp 100 ton fish
2007 Village level 11 villages 47 farmers 22 Ha 3
tonnes
2005-06 Rehabilitation of Damaged farms and
restart of farming
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Next steps - challenges

• Scaling out
• Value chain cooperation
• Buyers, better markets
• Domestic, Japan, Europe, US
• Finance
• Services
• Certification, but not a priority, with focus on
  simple but profitable management improvements as
  first step of the ladder

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Investments in services generate value

• Value created in Aceh, Indonesia
• But, some investments may not yield short-term
  benefits, it takes time to organize small
  farmers, and a long lead in time is a
  disincentive for private investors

• US2.5 million farm gate value
• 2,600 households increased income of
  US1000/household
• Community and environmental benefits

US100/ farmer
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Improving aquaculture - investment model
Farmer organizations and services organizational
glue
Productivity improvements and efficiencies
Market connections
Infrastructure investment
Working capital
Public policy and institutions
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Lessons for live reef fish trade/culture

• Integrated approach
• Business case
• Plan for scale that delivers impact and
  efficiencies
• Time required
• Sustainable services
• Private and public partners with complementary
  skills/investments
• Avoid short-term project approach
• Knowledge sharing across partners, investors,
  value chains

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Conclusions

• Ground ecosystem approach in practical management
  improvements
• Opportunities for efficiencies provide
  opportunities for profit
• Aquaculture improvement projects can deliver
  social, economic and environmental benefits
• Impacts requires scale (not pilots).
• Inclusive approach is needed for small farmers
  (and fishers)
• Value chain partnerships are important for
  scaling up

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Conclusions

• Private sector support essential, with business
  case
• Pilots can be conducted to validate approaches
  (but must be core business case).
• Farmer organization, provision of farmer oriented
  services
• Private investment funds are also essential for
  scaling up
• We can be more creative with business models and
  finance

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• Thankyou