5.1 Government Policy
5.2 Legislation
5.3 Production of Information
The policy and legislative actions of any government, at national, state, and local levels, have significant impacts on the management and control of risk in the aquaculture industry. Some of these impacts do not arise through actions directed toward the aquaculture industry itself, but through actions directed toward associated or competing industries, such as agriculture, tourism, or recreation. Unfortunately few governments at the present time consider or coordinate multi-sectoral development.
A national policy toward aquaculture development is important for the industry. This may be no more than including statements about the sector in a five-year economic development plan, or it may be a detailed development plan for aquaculture alone.
With the recognition of the aquaculture sector in any development plan, there invariably follows a number of policy instruments for government administrators to manage the sector and control individual private investments. The range and use of these policy instruments are usually in direct relationship to the status and strength of the sector. For example, in countries where investment in the sector is being encouraged, the government will stress incentives, such as grants, loans, and subsidies, and even fiscal incentives, such as exemptions from tax. In countries where the sector is well developed the government will invariably impose duties, taxes, and quotas.
In the formative years of a sector, a government will often provide services. These may include services for marketing, research and development, education, training, extension, and technical information. It will also often provide physical infrastructure for the industry (utilities, transportation, and coastal development), and institutional support (such as state farms, state hatcheries, and market organizations).
In summary, the government policy toward the industry through the use of available policy instruments can be considerable.
The majority of farmers obviously take advantage of a favourable government policy toward the sector. Many, in fact, in the formative years of their enterprise depend on government incentives, such as grants, loans, and subsidies, to be profitable.
The risk to the farmer is the period of transition, when the sector is developing well and reasonably independently, and the government is reducing its direct support to the industry. Incentives are being replaced by taxes and levies on sales, state farms and government hatcheries may be closed down, and institutional support is stopped.
These risks can be managed through a very detailed exchange of information by both parties. It is imperative chat the government has an excellent knowledge of the workings of the industry so that its objectives are appropriately phased. For example, there is no economic sense in closing down government hatcheries (which supplied seed for the farmers to get the industry established) if alternatives are not in place and have demonstrated that they can meet the seed requirements of the industry. Similarly, sudden high taxes on profits, which perhaps were made when national production was low and prices probably high, are not going to be practical if national (and international) production increases and the price drops, as has been the case of marine shrimp and salmon production.
On the other hand, it is also imperative that the farmers have good information about the short and long-term plans of the government toward the industry. With this information their investments can be directed toward the replacement of the government's previous contributions. For example, the investment in private hatcheries for seed production, the formation of farmers' associations, and other organizations, for marketing and product promotion, and even private research and development.
Invariably the burden of researching and publishing this information from both sides rests with the industry. Usually the responsibility is taken up by the farmers' associations, through their newsletters and publications, or by another invaluable component of the national aquaculture sector, the independent publishers of trade papers, magazines, and information bulletins.
A government manages and controls the aquaculture sector through legislation. The type and degree of legislation obviously have a direct and significant impact on the sector as a whole, and on the individual enterprise and farmer, and therefore constitute risks to all of them.
Legislation is sub-divided into two areas, namely legislation dealing with resource utilization and resource management, and legislation dealing with farm management.
(i) For effective and economic resource utilization and management, the government has to be aware of the needs of the aquaculture sector. The sector's prime needs are water (inland, coastal, and offshore), land (on-shore, sub-tidal nearshore, and sub-tidal offshore), and all rights of access and protection. The government has also to be aware of the needs of other competing sectors (energy, agriculture, tourism, recreation), and for the general public's need for an acceptable environment (nature reserves, wildlife),
From the point of view of the aquaculture sector there are several approaches to resource utilization and management. These may include long-term leasing of sites, special development zones for aquaculture, and industrial zones for certain water-based industries which can be integrated together.
(ii) The majority of national, state, and local legislation concerns farm management. This is in the form of regulations and bye-laws directly concerning farm operations and production practices, and then indirectly concerning the manufacturing industries, suppliers, services, and marketing activities.
Typical legislation for the farm operations and production practices deals with such things as site and water access, water quality, negative and positive environmental impacts, labour, introduction and transfer of species, disease control, and product quality. That for the secondary level deals with the safety of human health, such as the use of herbicides, pesticides, antibiotics, and carcinogens in equipment and in operations, and environmental health.
For farm management purposes, acceptable solutions for the farmer are an efficient system for permits and licenses at reasonable cost, preferably permit-packaging (one permit for everything). In addition government quarantine stations should be provided if there are stringent regulations with regard to species introduction and transfer. Regulations at the secondary level are sensibly part of more far-reaching national legislation controlling the use of toxic chemicals in the environment.
The risks to the farmer from national legislation, particularly the regulations and bye-laws dealing with farm management and production, are many and varied. All have a direct or indirect affect on profitability. The most direct implication is the cost of permits and licenses to own and operate a farm, and the indirect costs associated with making applications to many different government agencies. In many developed countries, for example, the permits and licenses required to operate certain farms number over 20. Collectively, they may take over two years to obtain, and add up to a considerable cost. In extreme cases, such as a permit to use the heated effluent water from a nuclear electrical generating station, the permit process may take three years and involve lawyers.
The highest risk to the farmer centres on regulations regarding diseases and stock introduction. This is an area of considerable importance to the industry at the present time. There are a number of instances of government legislation which have exacerbated the problem; for example, one government issued permits but with restrictions on the water volume for each farm. The volume was in fact less than a calculated basic economic unit. This compelled the farmers to overcrowd their stock, exposing them to the risks of diseases. Yet another government, with the objective of protecting its industry from exotic diseases, regulated for the use of an indigenous but totally unsuitable local species incapable of acclimating to the marine environment where it was supposed to prosper. This effectively killed the industry, as few farmers were foolish enough to take such a risk.
Few if any governments have enacted legislation requiring total slaughter of all stock infected by certain diseases. Although this is primarily because they are unwilling to pay compensation to the producers it is useful in that few diseases justify this extreme action. None the less, some farmers disregard laws and regulations when it comes to the movement and handling of stocks, diseased or otherwise, thus endangering themselves, the industry, and the environment as a whole.
It is obviously the interest of both government and industry to have constructive legislation. However, constructive legislation can only be produced by both sides being well informed about the objectives and operational needs of the other. Well informed parties can accept even extreme legislative action, such as the compulsory slaughter of stock infected with a highly contagious and dangerous disease, or stock which are potentially a hazard to human health. These are acceptable risks to any industry. However, considerable information is required so that sensible regulations and bye-laws can be enacted which will allow, for example, the safe introduction of non-indigenous species, temporary quarantine of diseased stock, acceptable treatment of disease which will not impact subsequent product quality, the use of growth stimulants in feed, etc. Much of the information on which the right legislation can be made is still lacking.
All governments accept the responsibility of providing information services to the sector, particularly national statistics and data relevant to economic and development planning. For the development of a new sector, such as aquaculture, many governments accept the responsibility for additional information services, such as the adoption of international and national standards and codes of practice, and also biotechnical and non-biotechnical research.
(i) Standards and codes of practice
Standards and codes of practice for the industry are invaluable, not only to the economic strength of the industry as a whole, but also to the farmers and their suppliers to reduce their individual risks (see Section 4.2). For example, the international Codex Committee on Fish and Fishery Products recently (May 1988) decided to elaborate a code governing the quality and safety of aquaculture products. Typical aspects of the code will be product safety and quality, water quality, off-flavours, residues of veterinary drugs, and the public health significance of diseases and parasites. Where the code is adopted, the farmers have the opportunity to meet the standards required. Meeting strict standards will probably require increased investments, such as modern and hygienic processing plants, and this will reduce their profitability. On the other hand, meeting the standards will eliminate most of the risks currently associated with the "grey" areas of quality control, where the products are rejected because there is no clean division between acceptability and unacceptability.
The only other code of practice indirectly relevant to aquaculture which can be adopted by certain countries at the present time is that dealing with the introduction and transfer of species. The prime reason for the code is conservation, but it has both positive and negative implications for the aquaculture industry.
No country, or group of countries, has yet established any standards specifically for the aquaculture industry. Invariably each country has its own standards and codes for construction of infrastructure and buildings which are used automatically by designers and contractors of large farms; but these are invariably ignored by the small farmers in the interests of saving investment capital. Unfortunately, as such standards have been developed without any reference to the aquaculture industry at all, the risks to the operations at both large and small farms remain. The large farm is probably over-engineered and highly mechanical (see Section 2.1.1 (i)), and the small farm is a hazard to the health and safety of the employees (see 4.2 (vi)).
(ii) Research information
Most governments support industrial-related research, either at government research centres or through contract research to the private sector. Although the topics of research clearly have some relevance to the industry, most governments do not specify research programmes within their policy which directly support the core of the industry, namely the producers. The majority of support is for scientists and technologists at universities and research centres who identify their own research objectives.
There has been little or no research organized to build up the information base on which standards and codes of practice are set. For example, government research support has been given to individuals to design production units, complete with heat exchangers, filters, and innumerable controls, but few if any research funds have been given to chemical engineers to specify the leaching rates and toxicity of plasticizers in water of varying salinities from all the plastic materials which are used or available to the manufacturers. If this were done, then the industry would have the factual evidence that specific plastic materials were safe at these salinities, and others were not. The risks of death or deformity to the stock from these highly toxic petro-chemicals would be removed.
There are many other cases which may be cited. For example, there is a need for the basic data of on-site conditions (wave amplitude, water exchange rates, etc.) for offshore cages Co match the design criteria. This not only includes the physical data (strengths, stresses, and strains) of materials, but also the same parameters for individual cages and complexes of cages under different conditions of sea state. There is a considerable need for information about the safe treatment of diseases, not only the efficacy of the treatment, but also the periodicity for the residues of the drugs.
In summary, the guidance for government-supported research should come from the farmers, who could indicate where they are most exposed to the risks of losing their stocks, and hence their profitabilities and livelihoods.
