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

1. partnership . excellence . growth “Private sector support for an ecosystem approachto mariculture through best practice” Michael Phillips WorldFish Center

2. Outline • Ecosystem approach • Mariculture and ecosystems • Some experiences • Moving forward

3. 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)

4. 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

5. Asian aquaculture trends modified from DeSilva et al (2011)

6. Groupers, wrasse, snappers modified from DeSilva et al (2011)

7. 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

8. Taking a life cycle approach Land (Ha) Fuel (l/yr) Wild Caught Fish (T/yr) Fuel (l/yr) Organic Material (T/yr) Water (m3) Crop Meal (l/yr) Inorganic Material (T/yr) Fish Meal/Oil Production (T/yr) Fish Production (T/yr) Energy Production (GJ/yr) Fish Feed Production (T/yr) Fertilizer Production (T/yr) Farmed Fish (T/yr) CO2 (T/yr) Phosphorous (T/yr) CO2 (T/yr) Nitrogen (T/yr) Production process Environmental resource Environmental emission modified from Hall et al (2011)

10. Growth projections require change Year modified from Hall et al (2011)

11. 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

12. 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

13. Better practices – examples from coastal ponds in India and Indonesia

14. 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

15. Reduced Disease Risks Improved profitability Better management delivers reduced risk and improved outcomes: an example from India

16. Better management delivers reduced risk and improved outcomes: an example from Aceh Economics (US$ per ha) Gross Revenue increased by 14% Profit Doubled over the year Note: US$ 1 = IDR 9500

17. Compliance brings profitable outcomes

18. Profitable small-scale ponds in coastal Aceh

19. Progress in Aceh 2656 Farmers 260 1150 Post-Tsunami Rehabilitation 47 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

20. 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”

21. 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 • US$2.5 million farm gate value • 2,600 households increased income of ~US$1000/household • Community and environmental benefits US$100/ farmer

22. Farmer organizations and services “organizational glue” Improving aquaculture - investment model Productivity improvements and efficiencies Market connections Working capital Infrastructure investment Public policy and institutions

23. 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

24. 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

25. 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

26. Thankyou