Reversing the Burden of Proof for Sustainable Aquaculture

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Marjorie-Ann D. Sumaya / WorldFish
Milkfish harvesting in Iloilo, Philippines.

Imagine a fish farmer in a developing country, with poor literacy and minimal capital, having to comply with international sustainability standards in order to sell their fish. Then, imagine they have not been involved in setting these standards and in fact, no one came to consult them on what makes their farms sustainable or not. However, to comply with these standards and maintain market access, they will need to make changes to how they manage water quality, biodiversity, and demonstrate good labor practices. In the short term, these changes will directly affect their livelihoods and incomes through increased costs and efforts, while any benefits from sustainability remains a long-term and uncertain proposition. For such farmers, the biggest irony is that buyers requiring compliance to sustainability standards are also dependent on their fish as one of the most important meat proteins for global food and nutrition security. Given this dependence, demonstrating compliance with these standards might seem like a disproportionate burden.

 

In Asia, export markets must seem like a double-edged sword to the more than 16 million smallholder fish farmers in the most productive aquaculture region of the world.1 On the one hand, farmers in major production regions like Asia and many other parts of South America and West Africa make an increasingly important contribution to a healthier and more sustainable source of animal protein than other meat products in major export markets.2 Accessing export markets also offer the opportunity to charge higher prices and therefore increase incomes. But on the other hand, the global boom in aquaculture production, with production now equivalent to ‘capture fisheries’ production,3 has led to increased concern for NGOs, consumers, and governments about environmental and social impacts. This has resulted in greater surveillance over production through audited compliance to voluntary sustainability standards.

 

As many supermarkets have pledged to only purchase sustainably certified seafood, including fish from aquaculture, a core group of standards have emerged as de facto barriers to market access.4 Arguably the two most dominant standards have also taken on a divided geography between the two largest importing markets in the world. The Aquaculture Stewardship Council (ASC) standards are more recognized in Europe, while the Global Aquaculture Alliance (GAA) is dominant in the US. More than ever before, access to these export markets requires producers to demonstrate their sustainability through respective certification from these organizations.

 

It is commonly assumed by academics, NGOs, and policy makers alike that the burden of proving that compliance to sustainability standards, like any other legal or market requirement, lies with producers. Indeed, this assumption is the very basis of voluntary certification; farmers should actively demonstrate their ‘good’ production practices. But globalized seafood markets also mean that producers are far from one homogenous group. Over 85 percent of the volume of fish traded to Organization for Economic Co-operation and Development (OECD) countries comes from the developing world.3 Shifting the burden of proof to producers in developing countries does not consider the capacity of individual producers to demonstrate compliance with international standards.

 

Major buyers of seafood, including both wholesale importers and retailers, are also able to dictate the terms of trade to their suppliers. Not only do they demand sustainable seafood, they establish contracts in order to deliver high volumes with the lowest possible unit cost. It remains unclear whether any market premiums are observed for those products certified, and even less clarity as to whether these are passed up the chain to producers.5,6 Instead, it is the cost of certification that is pushed back up the chain to producers, placing a disproportionate burden on smallholders. In classical Marxist terms, by instituting diminishing returns to their suppliers these lead firms risk undermining the very producers upon whom their own supply of seafood is based.

Simon Bush
Small-scale pangasius fingerling nursery in An Giang province, Vietnam.

One way to overcome this is to reverse the burden of proof, so that it is not the 117 million fish farmers worldwide that need to demonstrate sustainability,7 but instead the buyers and retailers who receive a disproportionate benefit from their production. But what would this look like?

 

A first step could be to shift the demonstration of sustainability compliance down the chain from producers to buyers. This would mean that standards become a tool for retailers and importers rather than for producers. Instead of setting environmental and social metrics at the farm level, these standards would, for instance, regulate how retailers support producers and others in their supply chains to improve their sustainability performance and demonstrate legal compliance. Under such a system, top–down regulation of producers would give way to what has been termed by Ivarsson and Alvstam as a ‘developmental’ mode of chain governance.8 Retailers would be certified based on a requisite level of technological and organizational assistance, co-innovation, developing human capacity, and financial and administrative advice, all aimed at supporting environmental and social performance.

 

Such a developmental approach to sustainable seafood would remain market based to the extent that companies would be recognized for the support they provide rather than the individual products on their shelves. Competition to be the greenest grocer on the high street would therefore still drive investment in sustainability.

 

The sustainability impacts of certifying retail support to aquaculture improvement are potentially greater than in current producer oriented standards. Voluntary farm-based standards are most commonly taken up by producers who already exhibit a degree of compliance.9 But by inadvertently cherry-picking better performers, the degree of overall improvement across the industry is limited. Recognizing and promoting continuous improvement towards sustainability would increase the involvement of less well-performing producers who cannot currently comply with high-level ASC or GAA standards. Such an inclusive approach is of key importance, because it is with these aquaculture producers where the greatest overall sustainability gains are still to be made.

 

In practice, retailers are already making investments in currently ‘un-certifiable’ producers through aquaculture improvement projects (so called AIPs). This support comes in many forms, including paying for direct support for improved farm practices like water purification, training on stocking, and pharmaceutical use as well as paying for consultants to assist with the paperwork required to demonstrate improvement.10 But unlike product-based certification, which provides market recognition through eco-labelling, retailers receive very little recognition for these more direct and in many cases locally engaged forms of support they provide. They are limited in making sustainability claims around their support because there is no standardization of what makes a credible and effective aquaculture improvement project.11 Retailers therefore run the risk of not being able to make claims in the market place because there is no third party substantiating the support they are providing to suppliers. It is here that retail level certification would fill the gap by providing a system of verification, market recognition, and ultimately greater incentives for further investment in smallholder support.

 

Retail level certification could expand the overall scope of impact that market-based sustainability approaches can have on the aquaculture industry and beyond. Currently, the expansion of farm-level certification is limited by the willingness and capacity of each producer who applies for  certification.4 If this farm-level mode of certification is removed, so too is an important barrier to the expansion of certified sustainability practices. Making retailers responsible for demonstrating a developmental mode of sustainability support could also lead to considerable gains in sustainability because the cost, and therefore the choice to improve, is no longer dispersed across many producers.

Simon Bush
Pangasius farm on the banks of the Mekong River near Can Tho, Vietnam. The farm shows the integrated nature of farms in the riverine landscape of the Mekong Delta.

Shifting the cost of certification down the value chain would also put pressure on retailers and suppliers to search for innovative and more efficient forms of organizing aquaculture sustainability. One outcome would be the need for greater efficiencies for retailers to deliver support to individual producers beyond the farm through, for example, cooperative forms of management. Cooperative management of aquaculture has been met with mixed success, largely because of poor internal capacity, weak state support, and the complexity of environmental and health issues such as water quality and disease.12 A developmental approach with buyer investment may prove more successful than current cooperative approaches because it would link the level and quality of producer support to the reputation and market demand of buyers. Because buyers would still be driven by environmental outcomes, the cooperatives they support may also engage in ecosystem or area-based forms of management, and in doing so, link farm-level practices to issues like water quality that extend well beyond the boundaries of a single farm.13

 

More coordinated support and organization of producers by buyers could also lead to improved risk management in the industry. By moving certification beyond the farm level and creating contractual support from buyers in export markets, opportunities for insurance and new forms of financing may also emerge. Such opportunities would be transformative in the aquaculture sector in developing countries given the high degree of production risk experienced by producers and the associated lack of formal insurance and finance opportunities.1 The outcome would be two-fold: producers would benefit from receiving the necessary capacity to reduce production risk and sustainably intensify production, while buyers would benefit from a more stable supply of sustainably produced fish.

 

Would such a system need new certification schemes beyond the ASC and GAA? Not necessarily. The goal of these certification schemes is to assure responsible aquaculture production. While this goal would remain the same, new standards would be required that focus on verifying that a developmental-chain approach like AIPs are leading to real and continual improvements in aquaculture production. However, new models of certification or other forms of verification would also be possible, as long as retailers and other buyers were held to account for the support they claim to provide. So while goodwill and stable supply can provide incentives, the biggest incentives for retailers to ensure the claims they make around producer support are met will be the risk to their brands should they be called out for not complying to standards.

 

A developmental-chain model for aquaculture sustainability would inevitably create new kinds of dependencies between buyers and producers. And there is no guarantee that buyer-certification will improve conditions for developing world producers to be incorporated into global seafood value chains. But by giving recognition for ‘developmental’ modes of chain coordination, we can ensure that the responsibility for sustainable aquaculture is not placed on those with the least capacity for independent improvement. Instead of retailers undermining the capacity of farmers to respond to sustainability demands, responsibility will be placed at the feet of retailers (and other buyers) who do not replace the end consumer but do orchestrate global demand for fish products. If aquaculture can get this right, it will hold substantial lessons for any global food sector looking for successful models of fostering sustainability improvements.

 

References

  1. Financing smallholder aquaculture enterprises [online] (2011). http://pubs.iclarm.net/resource_centre/WF_2798.pdf.
  2. Béné, C et al. Feeding 9 billion by 2050—putting fish back on the menu. Food Security 7, 261–274 (2015).
  3. The State of World Fisheries and Aquaculture (Rome, Food and Agriculture Organisation of the United Nations, 2014).
  4. Bush, SR et al. Certify sustainable aquaculture? Science 341, 9–10 (2013).
  5. Ha, TTT, Bush, SR, Mol, APJ & Van Dijk, H. Organic coasts? Regulatory challenges of certifying integrated shrimp–mangrove production systems in Vietnam. Journal of Rural Studies 28, 631–639 (2012).
  6. Marschke, M & Wilkings, A. Is certification a viable option for small producer fish farmers in the global South? Insights from Vietnam. Marine Policy 50, 197–206 (2015).
  7. Valderrma, D, Hishamunda, N & Zhou, X. Estimating employment in world aquaculture. FAO Fisheries and Aquaculture Newsletter 45, 24–25 (2010).
  8. Ivarsson, I & Alvstam, CG. Supplier Upgrading in the home-furnishing value chain: an empirical study of IKEA’s sourcing in China and Southeast Asia. World Development 38, 1575–1587 (2010).
  9. Tlusty, MF. Environmental improvement of seafood through certification and ecolabelling: theory and analysis. Fish and Fisheries 13, 1–13 (2011).
  10. Ca Mau Shrimp Aquaculture Improvement Project [online] (2016). https://www.sustainablefish.org/aquaculture-improvement/ca-mau-shrimp-aip.
  11. Sampson, BGS et al. Secure sustainable seafood from developing countries. Science 348, 504–506 (2015).
  12. Ha, TTT, Bush, SR & Van Dijk, H. The cluster panacea?: Questioning the role of cooperative shrimp aquaculture in Vietnam. Aquaculture 388–391, 89–98 (2013).
  13. Soto, D, Aguilar-Manjarrez, J & Hishamunda, N. Building an Ecosystem Approach to Aquaculture (Food and Agriculture Organisation of the United Nations, Rome, 2008).