Two recurring themes that encapsulate this industry-wide transformation are the need to maintain this growth and the need for producers to own the environmental and social responsibilities that come with operating in the aquaculture sector.
With a clear and prosperous growth outlook, producers in the aquaculture sector continue to revisit their strategies to ensure they are aligned to profitability and revenue rises. Forming the core of this strategy is adopting sustainable and ethical farming processes, which appeal to both global consumer demands and local government policy.
Coming from a sector that revolves around risk management, we are always interested to see how the global aquaculture industry is developing and overcoming the different challenges that arise when operating in an unpredictable and sometimes difficult environment. Even in times of exponential market growth, many farmers hit major obstacles that threaten the viability of their operation. As a result, we are now witnessing fish farmers take an increasingly proactive approach to aquaculture risk management.
Producers are striving to operate in the best possible way for their environment, and the species they are cultivating, recognising the many benefits it brings beyond ‘doing the right thing’.
As the industry grows, it is interesting to consider how global standards around risk management, sustainability and ethical practices will maintain and improve. Territories such as Asia, that produce a major share of the world’s total aquaculture supply, are noticeably less represented from an insurance perspective. Resultantly, there could be a large proportion of farmers missing out on vital insight, coverage and risk management tools that promote sustainability and mitigate exposures.
With the sector becoming more internationally recognised, publicity is increasing but not always in a positive way. Lapses in ethical and management standards and the scrutiny around this are the dominant drivers for this negative attention. It is therefore crucial that both producers and regulators consider how the industry is going to move forward so common best practice can be decided and implemented across the board.
The major impacts on aquaculture over the last five years have been biological; with diseases, sea lice and harmful algal blooms hitting the headlines and causing significant financial loss. For example the salmon farming industry experienced an outbreak of infectious anaemia (ISAV) costing the sector USD 2 billion and 20,000 jobs. This has affected the reputation of the industry as a whole and it is unsurprising that the responses to manage these risks have come around extremely quickly. Solutions range from traditional vaccine development to sophisticated genetic selection and it is the development of new technologies that change the face of modern aquaculture. An example that typifies this shift is the increasing number of commercial Recirculating Aquaculture System (RAS) operations across the globe.
It cannot be said which of these novel and ethical practices will embed itself as a long-term standard. However, it is important to note that underlying every good operation is robust farm management that responds to the environment around it and aims to take the global aquaculture industry forward.
From staff experience and training, to how management ensure equipment, infrastructure and procedures are in place for optimal animal welfare and biosecurity – aquaculture producers can consider all of these wherever they are located. Practical farm management underpins the success of a farm by helping manage its risks, respond to the changing landscape and operate in its environment, as it should.
Such farms, with considered and ethical farm management, can benefit from superior fish performance, smoother processes and a reduction on environmental impact. Causing minimal disturbance to the water body fish are situated in, the substrate and benthos beneath it and the local flora and fauna are just some of the environmental benefits when taking an ethical standpoint to farm management.
When we engage with insurers to develop insurance programmes for our clients’ stock and equipment, it is these fundamentals that are looked at first. The aquaculture insurance market recognises the farms that demonstrate this level of management and best practice, putting them in a superior place to manage the inherent risks of fish farming. From this, both we and the insurer can consider those risks that are beyond the control of farm management and build a clear picture to where insurance is required and where it will add value.
As aquaculture production continues to grow, we will start to see operations across the industry expand too. All ethical and sustainable practices can be scaled up as production increases, but this does put pressure on farm managers from a commercial perspective. Purchasing infrastructure and operating on a larger scale requires considerable capital, and for that reason, efficiency improvements without a compromise on quality must remain the priority to ensure longevity of an aquaculture operation.
It remains to be seen which pioneering technologies and ethical strategies will prove effective and become part of the industry ‘norm’. Nonetheless, we are confident that forward thinking farm management, in collaboration with industry trade bodies is something that will never need to be justified. From a risk management and sustainability perspective, we want to see farmers working together to achieve best practice, reap the benefits it brings to their business and be proud to demonstrate the impressive strides made to the wider public.