The economics of fish farming and fish welfare in Europe (Animal Ask)
Several organisations, including Rethink Priorities, Welfare Footprint, Animal Ask, and others, are conducting a year-long project to guide the strategy of the fish welfare movement for the coming decades. Building on previous work's interest and work in European farmed fish welfare by advocacy groups and expert scientists.
As part of this project, Animal Ask conducted a systematic review on the economics of fish production in European aquaculture. Our database searches resulted in over 23,000 scientific publications and industry, government, and NGO reports from countries across Europe. After scanning the title and abstracts of all of these, we extracted economic data and other insights from around 600 publications.
This report contains the detailed results from this review. We provide economic data on many aspects of salmonid, bass and bream, and carp production across Europe. We focus on levels of profitability, drivers of production costs, price transmission, and market power.
Key findings are as follows:
- Profitability: There is large variation in profitability across species, countries and farms, and even within farms over time. That said, fish grow-out seems to be mostly profitable, indicating that many farmers may be capable of incurring additional costs for fish welfare improvements. Fish hatcheries/nurseries also appear to have healthy profit margins. There are some specific industries that have low or negative profitability.
- Costs of production: The largest cost of production is usually feed, followed by labour and stocking. This indicates that increases in feed prices are most relevant for market prices for some fish products (see next dot point). Again, there is large variation across contexts.
- Price setting: For Atlantic salmon, farmers tend to have power to set prices, but retailers also have some power in large consumer markets (e.g. UK, France, Germany). For bass and bream, retailers generally set prices, and farmers are forced to accept these prices. This indicates that retailers may have more latitude for setting fish welfare policy for European seabass and gilt-head seabream and in some large salmon markets.
- Market integration: Farmed salmon has many substitutes, including wild-caught salmon and other wild-caught species. Farmed bass and bream tend not to be substitutes with wild-caught bass and bream. However, this varies across different markets. This might indicate that consumers would respond to price increases by switching to other types of fish for salmon. This substitution is less likely for bass and bream consumers, though consumer responses are not completely known.
- Response to price changes: Demand for salmon is relatively unresponsive to price in the short run but comparatively more responsive to price in the long run. This indicates that increasing the retail price of salmon may have limited impact on the number of salmon farmed, at least in the short term.
- Costs of welfare improvements: There is very little evidence on the economic effects of fish welfare improvements. The only studies that have examined this question have been hypothetical simulation studies, not analyses of welfare improvements in the real world. This is a key knowledge gap.
The studies in our review also provide many qualitative insights that enrich our understanding. Some particularly interesting findings are:
- Inflation and global instability (e.g. due to the COVID-19 pandemic and Russia's invasion of Ukraine) has appeared to cause a net decrease in fish consumption by volume in Europe. Likewise, political conflict between China and Norway led to import restrictions against Norwegian salmon sold in China.
- The market share of certified fish (e.g. Aquaculture Stewardship Council) is generally small, but meaningful in some contexts (e.g. 6% of trout sold in Germany). Where farmers seek certification, this is largely driven by market access and industry reputation. Some farmers also observe higher market prices after obtaining certification.
- Production in alternative systems (e.g. organic, integrated multi-trophic aquaculture) is very low.
We have also included special sections in this report on juveniles, cleaner fish, and sturgeon production, as well as some details of key biological statistics of production (e.g. harvest weights, duration of production, and mortality rates).