Jonathan van Senten & Carole R. Engle March 2018

Transcription

1 Jonathan van Senten & Carole R. Engle March 2018

2 Jonathan van Senten & Carole R. Engle March 2018

3 Thank you

4 20 15 GROWTH RATE (%) SOURCE: FAO (2016) United States YEAR World

5 AQUACULTURE REGULATIONS IN THE U.S. FEDERAL STATE LOCAL

6 AQUACULTURE REGULATIONS IN THE U.S. FEDERAL STATE LOCAL

7 Culture of Commercially AQUACULTURE REGULATIONS IN THE U.S. Harvested Species Fish Health Interstate Transport 1,300+ laws Environmental Management FEDERAL Food Safety STATE LOCAL Legal and Labor Standards

8 U.S. had the 3 rd most stringent set of regulations (Abate et al. 2016) Calls for relief from the industry for decades (Anonymous 1979a and Gibson 1979b) Evidence that regulatory environment can affect aquaculture growth and development (Asche and Roll, 2013) A call for comprehensive analysis of regulatory costs (Engle and Stone 2013)

9 Targeted top 13 production states for baitfish and sportfish Designed and conducted as a census Contact lists developed with aid from state extension specialists, aquaculture coordinators, associations, and state agencies Verification of producer status through telephone contact

10 Alabama Arkansas Florida Illinois Kansas Louisiana New York North Carolina Ohio Pennsylvania Texas Virginia Wisconsin

11 Estimated Total Cost to the Industry is $12 million / Year Average National Cost of $148,554 / Farm Average National Cost of $2,988 / Acre 86% of Regulations are State Regulations Permits / Licenses = 1% of Regulatory Costs Indirect Costs = 99% of Regulatory Costs Small Farms Have Relatively Higher Costs Per Acre Environmental Management & Fish Health are the most expensive regulatory categories

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13 14% 4% 20% Food Safety Legal and Labor Standards Interstate Transport Fish Health 61% Environmental Management Regulations 1% Culture of Commercially Harvested Species Efficiency of Production Farm Level Cost of Production

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15 Ranking Challenges / Concerns 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Identifying Regulations Complying with Regulations Ranking First Health Certificate Processing Feed Cost Labor Markets Other

16 Ranking Challenges / Concerns 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Identifying Complying Regulations with Regulations Ranking Ranking First or First Second Health Certificate Processing Feed Cost Labor Markets Other

17 Have There Been Unexpected Changes?

18 Are There States You Would Like To Ship Fish To But Cannot Because of Regulations?

19 Communication From Agencies Do you receive annual reminders of permit renewals? Do you receive notification of changes in regulation? None Always

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21 Adjusted by Volume of Production

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24 Lost Sales 73% Changes Due to Regulation 17% Manpower 8% Fish Health Testing 2% Permits and Licenses <1%

25 36% 23% 19% Food Safety Legal and Labor Standards Interstate Transport Fish Health 21% Environmental Management Regulations 1% Culture of Commercially Harvested Species Efficiency of Production Farm Level Cost of Production

26 Production Function Mathematical relationship between inputs and outputs (Dey et. al. 2005) YY = ββββ + εε Y = Dependent variable (output) X = Explanatory variable (input) β = Parameter estimate of X ɛ = Random error term (Umesh et. al. 2013)

27 Stochastic Frontier Frontier Production Function assumes 0 inefficiency Output Frontier Production Function V = Random Error U = Inefficiency Average Production Function Observed Production Input

28 Technical Efficiency Estimates State / Grouping Average Efficiency Score Arkansas Alabama New York North Carolina Ohio Pennsylvania Wisconsin Other States All Observations 0.766

29 Technical Efficiency Estimates

30 Technical Efficiency Estimates Parameter Coefficient Standard Significant T-Ratio Estimate Error (p 0.05) Farm Size Lost/foregone sales * Changes due to regulation * Fish health Manpower to comply with regulation * Insurance * Baitfish only (dummy) Sportfish only (dummy) * Number of states shipped to Permit/license renewals * Number of state regulations Number of federal regulations Greatlakes region Southeast region sigma-squared gamma

31 Technical Efficiency Estimates

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33 10% 35% 55% Supportive of a Federal Model No Response Not Supportive of a Federal Model

34 10% 33% 35% 67% 55% Supportive of a Federal Model No Response Yes No Not Supportive of a Federal Model

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36 7 scenarios Recovery of lost sales Reduction in the number of Permits and Licenses Reduction in the number of Fish Health inspections Farm level testing instead of lot level testing Fish Health testing for all farms Combination of scenarios 1-5 & 1-7 Regional Comparisons

37 7 scenarios Recovery of lost sales Reduction in the number of Permits and Licenses Great Lakes Reduction in the number Southeast of Fish Health inspections Farm level testing instead of lot level testing Illinois Fish Health testing for Alabama all farms New York Combination of scenarios Florida 1-5 & 1-7 Ohio North Carolina Pennsylvania Virginia Regional Wisconsin Comparisons South Central Arkansas Kansas Louisiana Texas

38 $120,000 Average Regulatory Cost per Farm $100,000 $80,000 $60,000 $40,000 $20,000 $0 Great Lakes Southeast South Central Baseline Scenario 8, 10% reduction in permits, 2 tests per year Scenario 8, 50% reduction in permits, 2 tests per year

39 $7,000 $120,000 $6,000 $100,000 $5,000 $80,000 $4,000 $60,000 $3,000 $40,000 $2,000 $1,000 $20,000 $0 $0 Average Regulatory Cost per Farm Acre Great Lakes Southeast South Central Baseline Scenario 8, 10% reduction in permits, 2 tests per year Scenario 8, 50% reduction in permits, 2 tests per year

40 ESTIMATED COST TO THE INDUSTRY IS $2.6 MILLION / YEAR AVERAGE NATIONAL COST OF $379,629 / FARM AVERAGE NATIONAL COST OF $14,105 / ACRE 88% OF REGULATIONS ARE STATE REGULATIONS PERMITS / LICENSES = <1% OF REGULATORY COSTS INDIRECT COSTS = >99% OF REGULATORY COSTS LEGAL AND LABOR STANDARDS & INTERSTATE TRANSPORT ARE THE MOST EXPENSIVE REGULATORY CATEGORIES

41 There is little room for doubt that the regulatory environment is resulting: In additional costs Restricted access to markets Affecting farm efficiency

42 All survey participants Dr. Kathleen Hartman & USDA APHIS UAPB Extension & Disease Lab Arkansas Bait and Ornamental Fish Growers Association National Aquaculture Association DR. HUGH HAMMER MR. GREGORY WHITIS MISS LISA BOTT MR. PAUL ZAJICEK MR. PAUL HITCHENS MR. CHARLES LEE DR. GREG LUTZ DR. CHRIS GREEN MR. JIM DALEY MR. JEFFREY LOUKMANS MR. STEVE GABEL DR. LAURA TIU MR. ANDREW JARRET MR. BILL LYNCH MISS JENNIFER REED- HARRY & PENN-AG TEXAS AQUACULTURE ASSOCIATION KANSAS AQUACULTURE ASSOCIATION DR. MICHAEL SCHWARZ DR. CHRIS WEEKS MR. CHARLIE CONKLIN DR. ROBERT SMITH DR. TODD SINK

43 ??? Jonathan van Senten Virginia Seafood AREC 102 S King St, Hampton VA jvansenten@vt.edu