Farming in troubled waters

Atlantic salmon, a fish exotic in Chile, has been farmed there since the early 1990s. The Chilean industry enjoyed phenomenal growth following the introduction of non-native salmonid species in the 1980s. It has been producing over 100,000MT/year for some years now, and between 2003 and 2006 alone its export earnings grew by an average 22 per cent per year, while creating an estimated 55,000 direct and indirect jobs. Thus, in 2006 alone, Chile, the world's second (after Norway) largest producer of farmed salmon and trout, exported over US$2.2 billion worth of fish.

The expansion of salmon farming in Chile is another outgrowth of the outsourcing trend and of globalisation in the world fisheries that I wrote about in the November 2005 World Fishing issue. All the necessary traits for outsourcing of capital seeking convenient investments were here: cheap labour, availability of space in protected waters, liberal regulation and weak enforcement, and growing market. The Chilean environment produced less problems of the sort the salmon farming industry was encountering in Europe and America.

But then, in mid 2007, a highly infectious salmon anemia (ISA), spread in Chilean waters. Common in the North Atlantic area, ISA already had decimated salmon yields in cage farms of Norway and Scotland. Fortunately, the ISA virus does not affect humans, but it was fast to spread over whole regions causing heavy financial losses and reduction of salmon production, and forcing companies to close a large number of processing plants and to slaughter fish in infected farms. ISA has put the farmed salmon industry in a serious financial crisis. Experts expect a major production drop, and the industry already reacted by shedding, by some estimates, as many as 6,000 salmon farms’ employees.

The ISA epidemics continues to spread, the blame being given to the crowded conditions of Chile's fish farms and other sanitary concerns – a paradise to a variety of parasites and fungal and bacterial fish ailments.

Parasites represent another serious problem plaguing densely populated fish cages. Caligid crustaceans, such as sea lice Lepeophtheirus salmonis and Caligus spp, are parasitic copepods, common among Atlantic salmon grown in cages in Norway, Scotland, and North America, which attach themselves to fish, marking their hosts with ugly lesions that lessen their market value, stunt their growth and weaken their resistance to disease.

There’re serious concerns that salmon fish farms set on migrational routes of wild salmon increase the risk of infection of the latter by sea lice originating from the fish cages. In Chile, of course, the situation is different, because in that part of the world there were no natural wild salmon populations and all farmed salmon originated from import, and if any, only such established by escapees from cages.

So far, I haven’t yet seen decisive reports on established populations of wild Atlantic salmon breeding in Chilean streams and rivers. So far, apart from farming, several salmonid species have been introduced into Chilean waters to establish sea ranching programs and commercial and sport fisheries, however, in only a few instances the introduced species have established small and self-sustaining populations, while the attempts at establishing new fisheries in Chile were unsuccessful. The last word, however, has not yet been said, for in the sub-Antarctic Kerguelen Island an introduced population of wild Atlantic salmon of Scottish stock is still present and well after at least 25 years after the introduction.

Whatever the ISA influence is on the economic situation of the salmon farming companies, one may suspect that, with the world’s credit woes trickling also into fisheries, their troubles are also associated with financial behaviour, perhaps over-expanding and counting on everlasting supply of credit. Now, help seems to be forthcoming. The Chilean government has recently announced salmon industry 'rescue' package, in the form of state-backed guarantees of up to $450 million in loans to the struggling salmon companies to help them solving their current cash problems and to stem the ISA epidemic.

No sooner the rescue package had been announced, when critical voices were heard from environmental NGOs, members of workers unions and labour leaders. The former organisations have already been calling for an end to the expansion of salmon farming, complaining of poor sanitary, environmental and labour practices in the salmon farming industry, and the intensive, often indiscriminate, use of antibiotics.

The most forceful criticism, supported by massive demonstrations and protests came from the labour sector. This, in spite of the statement of the Economy Minister Hugo Lavados, that this support is designed to keep the industry’s workers and their communities going, while the company owners would have to spend their own money to continue operating.

The government is promising to allocate US$4mn for new skills training and jobs creation for up to 3,300 people. Laid off salmon workers would be paid during the 4-month training period. In addition, the government is talking about 900 new jobs in public works. But this is much less than the direct subsidies and jobs for the up to 7,000 people already laid off that the workers are demanding.

The main complaint of most critics is that the government money would go to the pockets of the companies that, while drawing huge profits during many years, haven’t managed their farms responsibly. They should now be able to take care of themselves, while the money should be devoted to take care of those who lost their jobs.

Whatever the outcome will be of the dispute over the government’s support money, let’s hope that the Chilean marine farming industry overcomes its present difficulties. One lesson is that a little fish virus may practically paralyse a whole industry and affect the living of tens of thousands of people. Another is that you don’t have to be a bank to go bankrupt.