Site selection and carrying capacity in Mediterranean ... - FAO Sipam

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7. Economic bottlenecks
by Shirra Freeman and Dror Angel
In this section, economic bottlenecks with respect to aquaculture are discussed. The term bottleneck is
used to describe circumstances in which there are actual or potential inefficiencies that affect
production or marketing and thereby impinge on the performance of aquaculture enterprises and their
attractiveness as investments. The term also includes interactions among neighbouring fish farms, or
the aquaculture sector and other stakeholders in the coastal ecosystem. Of special concern are those
interactions that have negative impacts on human welfare, even if they are not reflected in market
variables. The present review therefore includes market issues such as diversification in production
and consumer receptiveness to farmed fish; resource management issues, such as the dependence of
fish farming on wild fish stocks for brood stock and feed; governance, especially with reference to site
selection and licensing; as well as the economic implications of environmental impacts on sensitive
habitats such as seagrass meadows.
Our objective is to obtain indications of the dimensions of economic bottlenecks that are relevant to a
wide a range of stakeholders in coastal areas because this is the location of most Mediterranean
mariculture. This approach is closely related to the Total Economic Value (TEV) of aquaculture
ecosystem interactions. TEV is defined as the full range of economic effects stemming from a given
activity. It includes all intended costs and benefits associated with the activity, as well as unintended
consequences (also known as spillovers or externalities). Market and non-market effects from both
direct and indirect uses, as well as intrinsic values are considered (Pearce and Turner 1990). Box 1
provides a breakdown of the key elements of TEV. Because of its focus on bottlenecks, this review
considers only the negative side of TEV, but it is noteworthy that the approach also has positive
aspects.
There is nothing new in the observation that the economic prospects of aquaculture cannot be
separated from the ecosystems in which it operates. The explosive growth in the sector over the last
forty years has been due to a combination of ecosystem resource constraints, technology and economic
factors. Increasing demand for fish was a major driver behind the depletion of wild fish stocks by
capture fishing practices (FAO 2002; ICES 2002). In the Mediterranean, fish culture, previously
dominated by artisanal and smaller scale enterprise became economical at the commercial level in the
face of this higher demand. Moreover, as the profits within the sector grew, so did technological
innovation. Aquaculture, once a set of backstop technologies 15 moved into the mainstream of
1 The concept of backstop technology was introduced by Hotelling (1931). In the original conceptualization, it referred to
alternative sources for the services from scarce exhaustible natural resources but is also applicable to cases in which the
demand for renewable resource such as fish outstrips supply. In general, a backstop technology is an alternative source of
supply for the scarce commodity and becomes economically viable when the cost of securing the commodity using
conventional means rises to the point at which it equals (or exceeds) the cost of securing the same commodity using the
backstop technology. In many cases, aquaculture conforms to this definition, as wildstock biomass falls, the cost of capture
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