HOW MUCH DOES GOVERNMENT COST THE SHELLFISH INDUSTRY? Jonathan van S enten & Carole R. Engle 44 th East Coast Commercial Fisherman’s & Aquaculture Trade Exposition January 13, 2018
AQUACULTURE REGULATIONS IN THE U.S. BAITFISH & TROUT SPORTFISH WEST COAST SHELLFISH
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AQUACULTURE REGULATIONS IN THE U.S. FEDERAL S TATE LOCAL
AQUACULTURE REGULATIONS IN THE U.S. FEDERAL S TATE LOCAL
Culture of Commercially AQUACULTURE REGULATIONS IN THE U.S. Harvested S pecies Fish Health Interstate Transport 1,300+ laws Environmental Management Food S afety FEDERAL S TATE LOCAL Legal and Labor S tandards
AQUACULTURE REGULATIONS IN THE U.S. Across 3 studies, producers identified as the #1 challenge to their business.
AQUACULTURE REGULATIONS IN THE U.S. • Producers reported significant time and labor investments for • Permitting • Record keeping • Reporting • Monitoring • Compliance • Litigation
WHAT DOES THIS MEAN FOR PRODUCERS? IT BOILS DOWN TO $$ MONEY $$
WHAT DOES THIS MEAN FOR PRODUCERS? U.S. producers spend an estimated per year on regulatory compliance. This breaks down to an average cost of $150,000/farm, or $3,000/acre. On average U.S. producers are faced with 17 permit and license renewals per year. Some report in excess of 200 annual renewals. Regulations account for about 1% of farm costs Permits and licenses Small farms account for only 1% <50 acres of regulatory costs. 99% of costs are indirect costs of compliance. Medium Large farms farms 51-499 acres >500 acres Average Regulatory Cost per Acre
WHAT DOES THIS MEAN FOR PRODUCERS? U.S. producers spend an estimated per year on regulatory compliance. WHAT WILL THEY BE FOR This breaks down to an average cost of $150,000/farm, or $3,000/acre. On average U.S. producers are faced with 17 permit and license renewals per year. Some report in excess of 200 annual renewals. WES T COAS T S HELLFIS H? Regulations account for about 1% of farm costs Permits and licenses Small farms WE WILL KNOW S OON… account for only 1% <50 acres of regulatory costs. 99% of costs are indirect costs of compliance. Medium Large farms farms 51-499 acres >500 acres Average Regulatory Cost per Acre
PRELIMINARY FINDINGS CHALLENGES TO THE BUSINESS WASHINGTON #1 CHALLENGE Regulations Other 53% 22% Diseases 13% Labor Markets 3% 9%
PRELIMINARY FINDINGS CHALLENGES TO THE BUSINESS OREGON #1 CHALLENGE Regulations 40% Other 20% Diseases 0% Markets Labor 20% 20%
PRELIMINARY FINDINGS CHALLENGES TO THE BUSINESS CALIFORNIA #1 CHALLENGE Other 31% Regulations 46% Diseases 8% Markets Labor 0% 15%
PRELIMINARY FINDINGS REGULATORY CHALLENGES Washington Challenging Regulations Ranking 25 20 15 10 5 0 #1 #2 #3 #4 #5
PRELIMINARY FINDINGS REGULATORY CHALLENGES California Challenging Regulations Ranking 10 5 0 #1 #2 #3 #4 #5
PRELIMINARY FINDINGS LOST OPPORTUNITIES? WASHINGTON CALIFORNIA NR NR 27% 17% No Yes Yes No 8% 75% 52% 21% OREGON NR 20% Yes No 40% 40%
PRELIMINARY FINDINGS UNEXPECTED CHANGES? WASHINGTON CALIFORNIA NR NR 19% 23% Yes No Yes No 55% 26% 54% 23% OREGON Yes 0% No NR 60% 40%
PRELIMINARY FINDINGS OTHER FARMS OUT OF BUSINESS? WASHINGTON CALIFORNIA NR NR 32% 31% Yes No Yes No 55% 0% 69% 13% OREGON NR 40% No Yes 60% 0%
PERMITTING PROCESS FOR WEST COAST SHELLFISH
PRELIMINARY FINDINGS MANPOWER FOR PERMITS Average Time S pent to Obtain Permits 80% 70% 60% 50% 40% 30% 20% 10% 0% Paperwork Meetings Testifying Public Compiling Other Relations S cience Washingt on Oregon California
PRELIMINARY FINDINGS MANPOWER FOR COMPLIANCE Average Time S pent for Compliance 60% 50% 40% 30% 20% 10% 0% S ampling Monitoring Record Reporting Meetings Other Keeping Washingt on Oregon California
PRELIMINARY FINDINGS COSTS ASSOCIATED WITH OBTAINING PERMITS (WA) ENVIRONMENTAL CONSULTANTS 22% 9% 58% EXPERT WITNESS LOST SALES
PRELIMINARY FINDINGS
PRELIMINARY FINDINGS UNEXPECTED CHANGES DUE TO REGULATIONS (WA) 19% 55% 26% Yes No NR
PRELIMINARY FINDINGS DO YOU KNOW FARMS THAT HAVE GONE OUT OF BUSINESS DUE TO REGULATIONS? (WA) 32% 55% 13% Yes No NR
PRELIMINARY FINDINGS UNINTENDED CONSEQUENCES New, Small-scale Shellfish more Permitting farms permits efficient delays cannot specify gear make adopt gear adoption better for type of requires infeasible. farms & gear. new environment permits. How many farms can survive more than a year without sales, waiting on a permit?
WEST COAST SHELLFISH WHAT WE ARE SEEING IN THE DATA • Multiple regulatory levels involved (county, state, federal) • Overlap between regulatory agencies for permitting • Permits delayed for 5, 10, 15 years • No new farm permits issued • Not possible to expand existing businesses
WEST COAST SHELLFISH WHAT WE ARE SEEING IN THE DATA • Market demand for shellfish is growing, but regulations and permit denials prevent producers from taking advantage of it • High start up costs – prohibitive to new entry • High legal costs to fight permit appeals • Lost opportunities – restrictions on gear and technologies
COMMENTS & QUESTIONS ? Jonathan van S enten Virginia S eafood AREC 102 S King S t, Hampton VA 23669 757-727-4861 j vansenten@ vt.edu
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