Irish aquaculture ambitions quashed by bureaucracy, financing quagmires

Growth in Ireland’s aquaculture sector has stagnated, and it’s a situation that’s emblematic of much that has malfunctioned in the European Union’s underachieving aquaculture sector, according to some of the country’s top aquaculture experts.

Despite generous E.U. grants for capital investment and equipment, licensing issues have created a situation where Ireland’s aquaculture sector has been “standing still for the past decade,” according to Teresa Morrisey, head of advocacy for aquaculture at the Irish Farmers’ Association.

Tonnage targets set in the Irish government’s 2020 plan were “achievable, but came nowhere near [being achieved]”, Morrisey told SeafoodSource.

Ireland’s licensing system was stalled by a 2007 ruling from the E.U. Court of Justice, which found that Ireland had failed to apply the Birds Directive and the Habitats Directive (also known as Natura 2000) in coastal areas of conservation when the country was handing out aquaculture licenses. Approximately 80 percent of Irish marine aquaculture is centered on such sites. The ruling forced Irish authorities to go through a program of assessments of the sites, in the process creating a backlog of licenses which is only now showing signs of being unblocked, according to Morrissey. In the meantime, existing aquaculture licenses were rolled over, but new applications were effectively shelved.

In fact, Ireland’s Journal reported that 22 salmon farms in Ireland are currently operating with expired licenses, including 12 operated by Mowi. Of the total, eight farms have operated for between a decade and 15 years as they wait for license renewal, while another 10 have operated for between eight and 10 years while their renewal applications languished in Ireland’s bureaucracy. Partially as a result of licensing delays, Ireland’s production of salmon has dropped from 24,000 metric tons (MT) in 2001 to half that figure currently, Jan Feenstra, Mowi’s head of Irish operations, told SeafoodSource.

“We have a number of new applications with the regulatory authority as well as renewal and review applications of existing sites,” Feenstra said. “There is a legacy issue with regards to aquaculture licensing which has effectively not progressed over the past 20 years. Consequently, our production has actually decreased because we have implemented best farming practices that make our out-of-date licenses less productive. We hope that over the coming few years this is addressed by the authorities and that we can then get back to our historic production levels and increase to 16,000 [MT] by the end of this decade.”

Mowi currently produces 7,000 MT of Atlantic salmon in Ireland annually, but the company’s Irish aquaculture production is focused on quality rather than scale, Feenstra told SeafoodSource.

“This [16,000 MT] may not seem especially ambitious, but our place in the market is specialized and Ireland, with its relatively small scale, cannot compete on cost,” Feenstra said. “Once the licensing issue is solved, Mowi’s focus will be on juvenile production and we would only wish to expand for the markets that we serve. It has been our market focus, as opposed to a production focus, that has enabled us to succeed over the past two decades.”

With its seafood production limited by licensing, Ireland has turned its eyes toward a brighter future in developing and exporting aquaculture-focused technology. Irish start-ups in the industry will gather in October at an annual training program, the BIM Aquatec Innovation Studio, run by Hatch, a global innovation fund for aquaculture products with offices in Ireland, Norway, and Singapore. The program has assisted Irish firms that provide aquaculture health diagnostic products as well digital mapping and licensing solutions for aquaculture sites, with 29 companies that have participated in the program having secured a combined investment of EUR 6 million (USD 7.1 million).

“Primary production is not where Ireland will take a piece of the market,” Hatch Co-Founder Wayne Murphy, who is based in Cork, told SeafoodSource. “But Ireland has a global reputation for technical innovation and R&D and it’s a good place for a start-up.”

Despite the COVID-19 crisis, Irish seafood retail sales rose by six percent in 2020, while the country’s seafood exports totaled EUR 590 million (USD 702 million). Ireland’s aquaculture production was worth EUR 180 million (USD 214 million) in 2020, up two percent year-on-year. Of the top three species produced, salmon was first at EUR 127 million (USD 151 million) in value, oysters were second at EUR 38 million (USD 45 million), and mussels were third at EUR 13 million (USD 15.4 million).  

A spokesperson for Bord Iasciagh Mhara (BIM), which supports Irish seafood production, said her agency has focused on training in new aquaculture methods and is aiming to coax more young participants into the industry. In September, BIM will launch a new program aimed at making secondary school students aware of the “broad range of career opportunities available in aquaculture,” the spokesperson told SeafoodSource.

Education aside, capital and investment remain challenging for Irish aquaculture producers, according to accountant Maurice Fitzgerald at Fitzgerald Power, a Waterford, Ireland-based aquaculture advisory firm. Government needs to step in with more cash supports to get the sector back on its feet and give confidence to generalist banks and private investors, Fitzgerald said.

“Banks struggle to understand the aquaculture industry,” said Fitzgerald, because it features “product that you can’t see, it’s underwater and it takes between 18 months and three years to mature and faces all sorts of viruses.” Similarly, getting private investors is also difficult in Ireland, he added.

Irish producers can apply to the E.U.’s Maritime and Fisheries Fund, which typically covers 40 percent of capital costs for aquaculture facilities. But getting the other 60 percent is harder in a post-pandemic situation, after the largely small-scale companies in the sector saw their markets dry up and their transportation costs rise.

The European Union has been keen to increase aquaculture production in member-states like Ireland, which despite its long coastline imported EUR 327 million (USD 389 million) worth of seafood in 2020. Simplification of licensing and administrative procedures are listed as a priority of the E.U.’s aquaculture strategy in its Blue Growth agenda, which calls for more of the continent’s seafood needs to be met through local production.

Ireland’s problems on licensing aren’t unique in the E.U. An aquaculture consultant with experience across Europe, including in Ireland, said the administrative burden associated with aquaculture licensing and permitting has long been recognized to be a barrier to growth and competitiveness. Consequently, it is a major focus of the E.U.’s Open Method of Coordination.

“It may have constrained growth in Ireland even more than other member-states,” the consultant, who also advises the E.U. authorities, told SeafoodSource.

Despite the troubled state of Ireland’s aquaculture industry, both Morrisey and Feenstra retain a positive outlook. Morrissey said she sees big potential to develop salmon smolt-production capabilities in Ireland, in reviving local clam production, and developing the perch and seaweed sectors. Feenstra said he is optimistic about Ireland’s branding being able to carry the day for his company’s salmon.

“There are very few farms, so the operators are not affecting each other and [each is] in charge of their own destiny. Ireland and its green imagery and very pristine and wild Atlantic coastal waters enable the production of a very pure product which, along with our organic rearing strategy, helps us to produce a fish as close to wild as can be – hence our historic tag line of ‘tastes as nature intended,’” he said.

That’s a vision accountant Maurice Fitzgerald is able to buy into.

With the right financing, “aquaculture could be huge for Ireland,” he said.

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