Many of us have repeated the statement that aquaculture is the fastest growing agricultural production sector yet many aquaculture enterprises fail to scale. I’ve been fortunate to work across many different types of aquaculture systems and carried out feasibility studies on a wide range of proposals.
One very interesting comparison is Egypt, where tilapia aquaculture has been hugely successful and Uganda where farms have struggled to reach commercial scale. I was involved in the design of the ODA/DFID aquaculture project in Uganda back in the late 1990s and was convinced that aquaculture would take off quickly as the country has huge freshwater resources, established markets and a rapidly developing economy but when I was back in Uganda 2011 for an EU project on commercial aquaculture it was clear that many people had lost their shirts. Meantime, at the other end of the Nile, Egyptian fish farms, growing the same fish were expanding production every year.
There are many reports blaming issues such as lack of hatcheries, compound feeds, expertise and so on as the main constraints to scaling up aquaculture but my experiences led me to conclude that the key factor is profitability of the value chain. First of all there needs to be an opportunity – a farming system, a system for land and water tenure, markets for the aquaculture produce, people who are willing to invest in aquaculture and sufficient space for aquaculture to develop at scale. However, the main factor that leads to scaling up is profitability.
Uganda’s freshwater resources produce wild tilapia, and although stocks are declining, these set the benchmark market price and market expectations for tilapia. At the time I was looking at it, fish farmers could not match the beach landing price for wild-caught tilapia and the minimum catch size was 0.5 kg while most farmed fish were smaller. This is not a unique situation – you only need to think about the collapse of cod aquaculture in Scotland and Norway because, despite wild cod declines in the North Sea, cod came to the market from other waters and farmed cod could not match these market prices.
Compare that to Egypt where low wild stocks of tilapia and depleted marine fisheries meant that farmed tilapia had became a significant food source at a reasonable price for Egyptian consumers. Low input costs, a simple farming system, the allocation of huge areas of land for aquaculture, short distances between fish farms and the market all contributed towards aquaculture being profitable for feed companies, hatcheries, farmers, wholesalers and retailers. Anyone who looks in detail at Egyptian aquaculture can point to potential problems, particularly in terms of quality standards and environmental sustainability but profitability has driven investment and massive scaling up since the 1980s so that it is now one of the largest non-Asian aquaculture producing countries. Consider that! A country that has really only one secure water source and is mostly desert is in the global top-10 of aquaculture producing countries!