9 Future Trends in Aquaculture Production
283
it was accentuated by Norwegian entry and ownership regulations, as they represented
incentives to invest in other countries. Since the second half of the 1980s, Norwegian
capital has been involved in salmon farms in virtually all salmon-producing countries.
The salmon market crisis around 1990 led to the abandoning of Norwegian ownership
regulations, which has prevented consolidation in the industry. A restructuring
process then started in Norway, as firms then were allowed to merge and larger
firms were created, actually increasing Norwegian market share from 1992 to 1995.
Then, following anti-dumping allegations from the EU in 1996, new regulations
were introduced, including feed quotas per farm that effectively limit production.
Ever since, with the exception of 1999, Norway has been losing market share and
ended at 36% in 2001.
In the 1990s, Chile became a major producer of farmed salmon. Currently, Chile is
the second largest salmon producer, with about 34% of total production, and the
country is expected to surpass Norway as the largest producer relatively soon. The
large increase in the Chilean production has been possible due to few restrictions
on salmon farming, a low cost level, and many foreign firms in the industry providing
for the same knowledge base as the competitors. However, Chile also has some
major disadvantages, including a lack of infrastructure in Region XI, the southernmost
region in Chile, where much of the future industry expansion may take place, and
the long distance to the markets that causes high transportation costs. Furthermore,
its position as one of the major producers has led to anti-dumping complaints. The
only setback in Chile’s production share was in 1999, which can be attributed partly
to the Asian crisis in 1997/98 influencing demand in key markets, and partly to the
uncertainty following the US dumping complaint.
Canada and the UK both have access to major salmon markets: the US
(NAFTA), and the EU. Norwegian regulations and trade problems and Chilean
trade problems were expected to benefit the Canadian and British salmon producers, but both countries’ production stagnated in the 1990s, and the British salmon
production reached an historic low of about 11% in 2001. Both the Canadian and
UK industries seem to have experienced a productivity growth close to industry
average over the period, but neither producer has been able to benefit from the
trade restrictions and regulations faced by Norway and Chile. The UK industry
has also been hit by disease problems and a high value of the pound sterling that
have reduced profitability levels for Scottish farmers. This is a concern for
Chilean and Norwegian farmers, as it provides an incentive for anti-dumping
complaints by UK producers.
The four main producers have increased their combined share of production during
the last decade. The only smaller producer growing at a similar pace to the four
major ones is the Faeroe Islands. Japan, however, the second largest producer in
the world in the early 1980s, as well as the US, Australia, Ireland, and Iceland have
fallen behind. It seems that regulations and problems with suitable locations
have hindered growth to a large extent, even though production in most of these
countries has been growing in absolute terms. It may also be that these industries,
because of their small size, never realised the external scale effects associated with
agglomeration and cluster effects that can be associated with a larger industry.
283
it was accentuated by Norwegian entry and ownership regulations, as they represented
incentives to invest in other countries. Since the second half of the 1980s, Norwegian
capital has been involved in salmon farms in virtually all salmon-producing countries.
The salmon market crisis around 1990 led to the abandoning of Norwegian ownership
regulations, which has prevented consolidation in the industry. A restructuring
process then started in Norway, as firms then were allowed to merge and larger
firms were created, actually increasing Norwegian market share from 1992 to 1995.
Then, following anti-dumping allegations from the EU in 1996, new regulations
were introduced, including feed quotas per farm that effectively limit production.
Ever since, with the exception of 1999, Norway has been losing market share and
ended at 36% in 2001.
In the 1990s, Chile became a major producer of farmed salmon. Currently, Chile is
the second largest salmon producer, with about 34% of total production, and the
country is expected to surpass Norway as the largest producer relatively soon. The
large increase in the Chilean production has been possible due to few restrictions
on salmon farming, a low cost level, and many foreign firms in the industry providing
for the same knowledge base as the competitors. However, Chile also has some
major disadvantages, including a lack of infrastructure in Region XI, the southernmost
region in Chile, where much of the future industry expansion may take place, and
the long distance to the markets that causes high transportation costs. Furthermore,
its position as one of the major producers has led to anti-dumping complaints. The
only setback in Chile’s production share was in 1999, which can be attributed partly
to the Asian crisis in 1997/98 influencing demand in key markets, and partly to the
uncertainty following the US dumping complaint.
Canada and the UK both have access to major salmon markets: the US
(NAFTA), and the EU. Norwegian regulations and trade problems and Chilean
trade problems were expected to benefit the Canadian and British salmon producers, but both countries’ production stagnated in the 1990s, and the British salmon
production reached an historic low of about 11% in 2001. Both the Canadian and
UK industries seem to have experienced a productivity growth close to industry
average over the period, but neither producer has been able to benefit from the
trade restrictions and regulations faced by Norway and Chile. The UK industry
has also been hit by disease problems and a high value of the pound sterling that
have reduced profitability levels for Scottish farmers. This is a concern for
Chilean and Norwegian farmers, as it provides an incentive for anti-dumping
complaints by UK producers.
The four main producers have increased their combined share of production during
the last decade. The only smaller producer growing at a similar pace to the four
major ones is the Faeroe Islands. Japan, however, the second largest producer in
the world in the early 1980s, as well as the US, Australia, Ireland, and Iceland have
fallen behind. It seems that regulations and problems with suitable locations
have hindered growth to a large extent, even though production in most of these
countries has been growing in absolute terms. It may also be that these industries,
because of their small size, never realised the external scale effects associated with
agglomeration and cluster effects that can be associated with a larger industry.