Case Studies in the Economics of Fisheries Management

1. Case Studies in the Economics of Fisheries Management Consider two case studies involving salmon in BC: Valuing the contribution of habitat to commercial salmon fisheries (D. Knowler, B. MacGregor, M. Bradford and R. Peterman) Market implications of alternatives to conventional salmon farming for BC (W. Yip, D. Knowler and W. Haider)

2. Valuing the contribution of habitat to productive commercial fisheries (coho salmon) Salmon fisheries are critical to the coastal economy of BC Various species have been targeted historically, e.g. sockeye, chinook, coho Salmon play an important ecosystem role as well, e.g. food for predator species, famous “salmon forests”, etc. If salmon are to serve both roles then their stocks must be carefully managed Various threats place pressure on these stocks .. This becomes especially challenging given their complex life histories

3. Life Stages of Coho and Chinook Salmon Chinook Salmon Coho Salmon Fresh water residence

4. Coho Salmon Spawning Areas in the South Thompson River Catchment in BC Fraser River Upper S. Thompson River Catchment Canada Strait of Georgia USA

5. Methodology to Value Freshwater Salmon Habitat • Set up the valuation problem as a bioeconomic model • Can take a ecological-economic system approach (e.g. Strait of Georgia fishery) • Allows for economic and biological ‘adjustment’ as habitat changes • Results are for an “optimally managed” coho salmon fishery versus historical values; can assess habitat values assuming efficient management • Valuation results refer to the value of salmon habitat in the South Thompson River drainage area • Key is to link habitat quality to salmon reproduction in the South Thompson River (B.C.) drainage area in monetary terms

6. Suspended Sediment Concentration (SSC) Adapted from Newcombe and Jensen (1996)

10. Schematic Diagram of the Simulation Procedure to Evaluate the Impact of Habitat Change on the Coho Fishery in the South Thompson River Basin, BC

12. Market implications of alternatives to conventional salmon farming for BC • Expansion of global Atlantic salmon production • DFO forecasts 197,000 t by 2020 (vs 109,000 t in 2009) • Canada is the 4th largest farmed salmon producer • BC produces 70% of Canadian farmed salmon • Environmental concerns with conventional aquaculture • Threats to wild salmon stock • Nutrient loading and toxics

13. Alternatives to conventional salmon farming • Closed Containment Aquaculture (CCA) Living Oceans Society, 2011 DFO, 2010

14. Another Option? • Integrated Multi-trophic Aquaculture 2. Shellfish (e.g. oysters, mussels) Consume the residual food & organic waste from the salmon cages 1. Fed Salmon 3. Seaweeds (e.g. kelp) Consume inorganic wastes from shellfish and invertebrates 4. Invertebrates (e.g. sea cucumbers) Consume the heavier food & organic waste from the salmon cages Chopin et al., 2010

15. Research Questions and Data • How do salmon consumers in the Pacific Northwest perceive IMTA and CCA as alternatives to conventional salmon farming? • What are these consumers willing to pay for salmon produced by more sustainable aquaculture technologies? • Used a household survey (1631 respondents) • Sampled households in San Francisco, Seattle and Portland • Screened for main grocery shopper & must have had salmon at home in last 12 months • Final sample: • 67% females & 33% males • Mostly over 25 years old • Most have Bachelor’s degree • Average household income > US$50,000 per year

16. Discrete Choice Experiment (DCE) • Engages respondents to make choices between product profiles made up of multiple attributes with different levels • Attributes used: • Species [Atlantic, Sockeye or King] • Production method [conventional, CCA, IMTA or wild sockeye] • Product origin [Canada, USA, Norway, Chile] • Whether eco-certified [yes or no] • Price [various levels, by species]

17. Sample Choice Set

18. Attitudes towards Aquaculture Alternatives • 63% agree more sustainable method should be adopted • Respondent perceptions of: IMTACCA - 59% felt positive - 40% felt positive - 11% felt negative - 29% felt negative • When directly compared: 44% prefer IMTA > 16% prefer CCA (IMTA more natural, sustainable & uses a mix of spp, whereas CCA better separates farmed spp) • 39% would buy more farmed salmon if IMTA or CCA exist

19. Analysis by Market Segments • Examined attitudes and willingness to pay for farmed salmon by sub-groups or market segments • Analysis found that there were three distinct market segments • These segments were described as: • “Wild salmon lovers” (45%) • “Price-sensitive consumers” (29%) • “Sustainably farmed salmon supporters” (26%)

20. Attitudes towards Species Type and Production Alternative by Market Segment

21. Attitudes towards Eco-certification and Farmed Salmon Price by Market Segment

22. Willingness to Pay for Atlantic Salmon from IMTA and CCA vs. Conventional Salmon Farming by Market Segment

23. Conclusions • Export market consumers want adoption of sustainable aquaculture: • stronger preference for IMTA over CCA (44% vs. 16%) • potential increase in overall demand for farmed salmon • views vary somewhat by market segment • WTP for IMTA > WTP for CCA (9.8% vs. 3.9% premium) • Education is necessary since only 7% of respondents were aware of IMTA vs. 20% aware of CCA