This article authored by Dr Brett Glencross was published in the December 2024 edition of International Aquafeed

Does marine ingredient production represent a good use of wild fish resources? Shouldn’t those resources be harvested and fed direct to humans?

Let’s consider the first of those options. Most fish harvested and used directly for fishmeal and fish oil (FMO) production are the high abundance small pelagic species. They must be high abundance as the low price paid for the fish for this purpose necessitates scale of economies to make things work. Notably, many of those fisheries are regarded as among the world’s best managed [https://sustainablefish.org/impact-initiatives/target-75/reduction-fisheries-reports/]. According to FAO (FishStat) data, in 2022, there was about 26 million tonnes of those small pelagic species landed around the world from various fisheries. In that same year the FAO estimates that about 17 million tonnes of that fish was used for FMO production. That leaves around 9 million tonnes, about one third of the capture, as what was directly consumed. So why isn’t more consumed?

There are various reasons for why 66% of those small pelagics don’t directly make it to our tables. It’s mostly a function low direct human consumption (DHC) demand and combined with high abundance in short periods of time requiring quick and large-scale ways to process the fish, the most cost effective of which is dehydration (FMO production). There have been various initiatives in places like Peru to try and increase the amount of fish used for DHC, where the government has mandated certain portions of the quota each season for artisanal fishing of the anchoveta for human consumption purposes only. However, most years that sector fails to be able to sell that volume, so much of it stays in the sea. Why can’t they sell it? Largely because most Peruvians prefer to eat the many other species that country has in its coastal waters, that are less strongly flavoured. There has also been millions of dollars’ worth of both government and industry investment to try promoting canning of the anchoveta. However, the issue of scale of volume of the fish that occurs in the two three-month periods of the fishing seasons is staggering, and simply overwhelms canning operations combined with the fact that can is worth more than the fish, making it a hard proposition to work economically. In fact, it ends up being a “perverse incentive” resulting in a poorer economic outcome in developing parts of the world, that what the current option is of producing FMO.

In financial and economic circles, a perverse incentive, which is a term used to describe an incentive structure that has undesirable results. And like many of these “good intentions” it reminds me of a parable referred to as the “Cobra effect”. The cobra effect is a phenomenon that occurs when a proposed solution to a problem makes the problem worse. It originates from colonial India times, when plagues of cobras occurred in the city of Delhi. In response to this the colonial British government introduced a bounty on dead cobras, to which the locals started farming the cobras to capitalize on that bounty being paid. It was not quite the outcome the government was looking for. But then, many of such initiatives end up this way, largely because those with the (apparent) good intentions, often don’t understand the full picture of what implications their incentives have, and therefore are unable to truly solve the problems.