October 08, 2020

Hybridizing aquaculture and economics

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The growth and development of aquaculture around the world ultimately depends on whether it is economically feasible. Most aquaculture producers, scientists, and leaders recognize this and often make a reference in various ways to economics. Economic viability is also frequently included in various delineations of requirements for sustainability. Why is it, then, that the type of information needed by aquaculture producers, researchers, and policymakers to make sound decisions is in such short supply?

Engle (2016) discussed the need for and benefits of greater interdisciplinary efforts to address issues critical to the growth and development of aquaculture. Nevertheless, interdisciplinary work requires time commitment on the part of scientists from various disciplines to develop a sufficient understanding of foundational principles, approaches, and terminology of the other disciplines to develop a common language and begin to develop a productive working relationship.

There are several serious obstacles to collaborative work between aquaculture scientists and economists that often contribute to the lack of effective engagement. At the most generalized level, the problems begin with differences in the respective disciplinary approaches to science. Aquaculture biologists typically begin with observations and data from which patterns are sought that, through inductive reasoning, are eventually used to infer theories—essentially, beginning with the specifics and progressing to the general. Economists, on the other hand, tend to begin with the general theoretical framework and use deductive reasoning to predict the specifics that are then tested with data. Thus, at the outset, there are differing approaches to a given research problem among scientists trained in each discipline.

These differing approaches to research lead to differing choices in terms of what are viewed and defined as key problems that require solutions. From the aquaculture world, the key problems defined frequently stem from practical issues and questions. Examples might include: (a) Which feed is more “economical,” the one that is least expensive but has a greater feed conversion ratio or the more expensive one that has a better feed conversion ratio? or (b) Is it more “economical” to invest in new production systems that offer certain types of production advantages such as year‐round supply or production efficiencies (i.e., improved yield or feed conversion ratio) but require a great deal of capital? Many economists do not view these as research questions because economic theory already exists that explains the fundamental relationships among the relevant variables. To a producer, however, the answers to these questions require application of relevant economic theory to the collection and analysis of relevant data, the results of which are critical for economic success. Key research questions to an economist frequently relate to those that would advance general economic theory in new areas, with recent emphases on nonmarket valuation of ecosystem services, trade theory, and consumer preferences, among others. An aquaculture producer who is attempting to make a living raising fish, crustaceans, mollusks, or seaweed needs accurate, real‐world answers to specific questions, not generalized theory.

Thus, the many very good economists around the world mostly prioritize theoretical approaches and choose not to spend the often‐considerable amounts of time required to collect real‐world primary data. Such data are often highly variable and therefore challenging to work with, especially in the dynamic world of aquaculture. There are agricultural economics departments that no longer teach young economists how to collect accurate farm‐level, primary data. Farm Management, an agricultural economics course that was once required of all students of agricultural economics, is no longer taught in many agricultural economics programs. The Farm Management course was where young economists learned how to work with farm‐level data and how to apply economic concepts and theory to farm‐level decisions that ultimately affect the economic success of individual farms. The emphasis of many university programs on natural resource economics further distances economics students from the types of material and analytical approaches that are most useful and needed by aquaculture producers.

From the aquaculture side of this great divide, other obstacles emerge to effective interdisciplinary collaboration. How often have economists been brought in at the tail end of an aquaculture study and expected to produce results showing that what had been developed was, in fact, profitable? Economists who work diligently to gather primary, farm‐level data and who seek to generate results that are as accurate as possible often find themselves in the unenviable position of having to report that what their aquaculture colleague has worked to develop over 10 years or more is not economically viable. There is often strong pressure on economists to conclude that a specific practice is profitable or feasible when it is not. Worse yet is when aquaculture scientists do their own “economics” analysis without proper training and understanding. One example that occurs often enough to be of significant concern is that of a “partial” budget developed by simply omitting various costs that differ and are relevant to the analysis (often with the intent to make the preferred option appear to be economically feasible), not understanding that the partial budget technique developed for use in farm management excludes only those costs that are the same across the management options being evaluated to reduce duplication of calculations.

For aquaculture to grow and develop more rapidly, the above obstacles must be overcome. There are two options to achieve this. Either more aquaculture biologists and economists need to commit the time and effort together so that both overcome the obstacles described above, or more hybrids between aquaculture and economics need to be developed. For the first option, aquaculture scientists without in‐depth training in economics should refrain from making pronouncements about economics and from attempts at ad hoc economic analyses that often result in erroneous conclusions, causing more problems than are fixed. An economist needs to be involved early in the project, and the aquaculture scientist needs to be willing to adjust the study as needed, both at the initial experimental design stage and throughout the project. Economists who wish to contribute to aquaculture need to invest the time to learn about aquaculture businesses and understand how they have developed, the level of management required, and—most importantly—why those aquaculture producers who have been in business for many years currently do what they do. Successful aquaculture producers are those who have created viable business models and supply chains, often based on a combination of business intuition and trial and error in terms of farm practices that support the distribution and marketing strategies of the business model. Economists are unlikely to make real contributions to aquaculture problems without having spent time listening to successful aquaculture producers and learning the core reasons for their success.

The most effective, although longer‐term, solution likely is for professionals to become hybridized through formal training in both disciplines. Economically successful aquaculture producers are most often those who have internalized hybridized concepts of biology and economics. Out of necessity, aquaculture producers must apply and integrate effects of water quality, nutrition, engineering, and economics seamlessly and interchangeably in their decision‐making. Many producers understand intuitively the concepts of opportunity cost (both in terms of revenue and or profits), as well as how annual fixed costs must be managed. Biologists and biologists‐cum‐aquaculture producers often fail to account for such concepts and realities, which leads to overly optimistic, misleading, and inaccurate economic estimates. Aquaculture producers need more research and extension professionals who can match their level of familiarity with both aquaculture and economics, bridge the gaps and obstacles between the two disciplines, and communicate equally well and effectively in both worlds.

For aquaculture students, this will likely mean earning one degree in one discipline and a second degree in another. For an aquaculture student to take only one or two courses in “aquaculture economics” is not sufficient and provides only enough familiarity with economics to perhaps make serious errors. Training is required in economic theory, in accounting, in farm management, and in marketing, as well as in quantitative analytical methods in economics. For an economics student, similarly, a single “aquaculture” course is not sufficient. The economics student needs to also understand water chemistry, fish nutrition, diseases, and aquatic animal health, as well as basic husbandry. An economics student interested in aquaculture should spend time working on an aquaculture farm or participate in the field work of aquaculture production trials. In this way, they learn critical skills from aquaculture farm owners and managers and begin to understand what it takes for an aquaculture farm to be successful. Greater efforts are needed to develop interdisciplinary opportunities to assist students to become hybridized aquaculture economists.

The Journal of the World Aquaculture Society (JWAS) is committed to advancing the growth and development of aquaculture worldwide. Hybridized aquaculture economics work that provides comprehensive guidance regarding the economic feasibility of practical, farm‐level advances is needed for the growth and development of aquaculture and fits well in the aims and scope of JWAS.

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About Carole R. Engle

JWAS Editor in Chief - Carole Engle has devoted more than 35 years to aquaculture research, extension, and teaching. In addition to publishing more than 110 scientific articles, four books, and more than 80 extension publications, she has a combined 49 years of editorial experience, including serving as Editor-in-Chief of Aquaculture Economics and Management. She has been honored with numerous awards from the U.S. Aquaculture Society, the National Aquaculture Association, the Catfish Farmers of America, and the Catfish Farmers of Arkansas. Engle was on the faculty of the University of Arkansas at Pine Bluff (UAPB) for more than 27 years and, as Director of the Aquaculture/Fisheries Center and Chairperson of the Department of Aquaculture and Fisheries, led it through a period of rapid growth, development, and expansion.

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