Lots of money, little impact
This article was featured in Eurofish Magazine 1 2024.
The EU has been supporting the development of aquaculture in its member states for years with enormous financial resources. Clearly without any measurable effect, as the report published by the European Court of Auditors now shows. There are occasional glimpses of smaller successes, but overall the report reads more like a review of failure. Nevertheless, funding continues undeterred without seriously tackling the obstacles.
Although the pace of growth in global aquaculture has slowed somewhat, the success story of this important industry continues. At least in other parts of the world, because there is hardly any sign of it in the EU. Here too, the dynamics of global development have not gone unnoticed by politicians and they would also like to promote aquaculture in Europe. Naturally more sustainable, more economical, more environmentally and climate-friendly than what is possibly happening elsewhere in the world. What seems plausible and sensible on the surface is increasingly turning out to be hubris in the depths of practice, as hardly any of the desired goals have actually been achieved. Since the start of new millennium, the EU has provided almost three billion Euro for aquaculture in several funding programs as part of the Common Fisheries Policy (CFP):
• 2000–2006 Financial Instrument for Fisheries Guidance (FIFG): around 300 Mil. Euro
• 2007–2013 European Fisheries Fund (EFF): around 350 Mil. Euro
• 2014–2020 European Maritime and Fisheries Fund (EMFF): around 1.2 Bil. Euro
• 2021–2027 European Marine, Fisheries and Aquaculture Fund (EMFAF): around 1 Bil. Euro
The names of the funding programs have become longer over time, and the declared priorities and objectives have become ever more demanding and complex. While the EMFF was about “promoting ecologically sustainable, resource-saving, innovative, competitive and knowledge-based aquaculture”, the EU added another goal in the current EMFAF with the requirement for “long-termism”: “promoting sustainable aquaculture activities, in particular strengthening the competitiveness of aquaculture production while ensuring the long-term environmental sustainability of these activities”. You have to be a politician to really believe that you can advance aquaculture in Europe with such an overloaded objective! Of course, more fish can also be produced in a more sustainable and environmentally friendly way. However, this comes at a cost and results in higher sales prices. Anyone who is even vaguely familiar with the competitive situation on national and international markets and the demand behaviour of price-focused consumers may suspect that some demands are difficult to reconcile. Because of this tricky task, aquaculture can only fail. If you hang such lead weights on a high jumper’s feet, you shouldn’t be surprised if she fails to clear the bar.
Ambitious goals have been missed for years
The Court of Auditors’ report quickly brings the flights of fancy in EU policy back down to earth. Almost all targets were missed badly. In 2020, total EU aquaculture production was a modest 1.1 million tonnes, which was less than 1 percent of global production of 123 million tonnes. The hoped-for increase in aquaculture production in the EU has not materialized. The fact that the quantity remained at least approximately stable can actually be considered a success, because the number of aquaculture companies in Europe is showing a downward trend. The number of employees in aquaculture (full-time equivalents) fell from 40,000 to 35,000. Constant performance with fewer employees? With dark humour, this could be interpreted as an indication of the industry’s increasing productivity. In fact, this is an alarming indication of the industry’s lack of attractiveness; working in aquaculture often scares young people away. A lot of work, little free time, relatively poor pay, an abundance of bureaucratic hurdles, coupled with uncertain future prospects. All in all, that doesn’t sound very appealing.
One of the few bright spots in the Court of Auditors’ report is the statement that the value of EU aquaculture production increased by 25% between 2014 and 2020. In 2020 it amounted to 3.6 billion Euro. Anything else would be an economic catastrophe, because without these additional revenues, many companies in the industry would probably have had to give up, considering the general price increase in the feed, energy and service sectors. In spite of the immense funding backdrop, it remains the same for the time being: the EU’s own production of fish and seafood is still not enough to replace a significant proportion of seafood imports. In 2020, more than 60% of the EU supply had to be covered by imports from third countries.
Funding is not being exhausted
Aquaculture production in the EU is stagnating. In Italy and France, which are among the largest producing countries, it has even declined, despite the promise of financial support. The Court of Auditors’ report suggests that the EU actually left too much money on the table. There was little interest in the funding and a significant portion of the money was not even used. That is why the total allocation for aquaculture has already been reduced by around 158 million Euro by the end of 2022, which corresponds to 13% of the original allocation. Italy (down 33%) and Poland (down 32%) reduced the amounts allocated to aquaculture, but allocations were slightly increased in France (up 44%) and Romania (up 8%). As a knee-jerk reaction, individual EU countries have actually financed almost every project that attracted any interest from the aquaculture sector and that was eligible for funding – and largely regardless of the expected contribution to the funding program’s original targets.
If all that money didn’t have an impact on the production volume of aquaculture, did it at least make a measurable contribution to improving sustainability? Apparently not, or at least not clearly demonstrable, as the report states succinctly that “no consistent indicators have been found to assess the environmental sustainability of the industry, even though this is one of the main objectives of EU policy”. The situation is even worse given the available data on what has been achieved with EU funds. The data is neither consistent nor reliable, and some results are clearly overstated. Can this be interpreted to mean that the project applicants were given specific goals without knowing exactly how success can be determined later?
Sustainability seems to be more important than production
This vulnerability has actually been known for a long time. The CFP regulation also requires the development of indicators for ecological, economic and social sustainability. As early as 2012, the EU Commission’s Joint Research Centre (JRC) carried out a study that, among other things, was intended to identify and evaluate environmental indicators for sustainable aquaculture in the EU. At that time, feed demand (dependence on fish-meal and fish oil) and waste water quality (especially nitrogen and phosphorus inputs) were suggested as suitable measurement variables. However, the JRC itself said that applying these parameters is difficult as there are considerable differences between the fish species kept and the production systems. Furthermore, there is little official statistical data available to assess the environmental performance of aquaculture in the EU. Thus, these findings are neither new nor surprising and were probably taken into account to some extent in the EMFF for the period 2014–2020. However, not everywhere apparently. As the report states, the extent to which environmental indicators were taken into account in the plans of six selected member states (Poland, Romania, Italy, Greece, France, Spain) “varied considerably”. The Romanian plan was the only one that included a specific objective to quantify the impact of aquaculture on the environment.
Although the results often fell short of expectations, a number of projects were of course supported. According to the Court of Auditors’ report, “productive investments in aquaculture” were among the most popular measures. These included investments in the modernization of existing operations or the development of recirculation systems (RAS). In addition, investments were often made in aquaculture projects “that provide environmental services”. This mainly concerned the preservation and improvement of the environment and biological diversity (Poland, Romania). According to the report, there was further funding in the areas of “innovation” (Spain, Greece and France), “health policy measures” (Greece) and “increasing the potential of aquaculture facilities” (Italy), without going into more detail about specific projects and their content.
Political targets are often far too impractical
It is quite obvious that there are certain discrepancies between the objectives of the EU funding regulations, which are primarily influenced by environmental policy, and the interests of aquaculture companies, which are more pragmatically oriented towards economic concerns and which have to fight for their economic existence on a daily basis in the “lowlands” of competition. According to the EMFF regulation, projects have a chance of receiving financial support if they meet two specific objectives:
• Firstly, the protection and restoration of aquatic biodiversity, strengthening of aquaculture-relevant ecosystems and promotion of resource-saving aquaculture, and
• secondly, the promotion of aquaculture with a high level of environmental protection, pushing for animal health and welfare, and public health and safety.
Intact nature, healthy animals and protection of ecosystems are of course also in the interests of aquaculture. However, not every company can easily afford targeted projects in these areas because, despite the financial support, the company has to contribute its own share of the price. If this money cannot be raised, even 30, 40 or 50 percent funding will not entice partners.
Especially since the Commission’s strategic guidelines in the area of aquaculture do not always correspond to the objectives of aquaculture. The “Farm to Table” strategy, for example, calls for organic aquaculture to be expanded significantly by 2030. However, this is unattractive for many in the industry because “organic” makes the products more expensive and makes it more difficult to process. If this is one of the priority goals, it should come as no surprise that production volumes are falling rather than rising. “Organic” means “extensive, decelerated production”, low stocking densities and therefore fewer fish from the same area. The 2021 strategic guidelines also focus on increased algae production. In November 2022, a special initiative was even launched to support the production, safe consumption and innovative use of algae. In fact, no one will deny the enormous potential of micro- and macroalgae, but currently there is hardly any suitable market structure or growing demand for such aquaculture products in Europe. We are only at the very beginning with the use of algae. And who is willing to invest their money in projects with an uncertain outcome for which the logistical basis is currently lacking?
Overregulation slowing down Europe’s aquaculture
Too late, too inconsistent and not thought through enough – these are just some of the thoughts that will probably go through some people’s minds when reading the Court of Auditors’ report. Why does no one seriously question why there is so noticeably little interest in financial support for aquaculture projects? A plausible answer to this is that we have known this for a long time and yet none of the obvious obstacles have been removed. Already in 2011, weaknesses and obstacles faced by the EU aquaculture sector during the programming period were identified. Industry representatives cited, among other things, the considerable administrative burden, excessively strict environmental regulations and the large number of reporting obligations that are required of the mostly small companies. Nothing has changed since then, as a new survey showed in 2019. On the contrary: the bureaucratic and administrative hurdles have become even higher. Aquaculture in Europe is hampered by over-regulation and a variety of legal requirements, regulations and guidelines that are difficult to keep track of. The core problems include access to water usage rights and production licenses, unequal competitive conditions with developing countries and escalating nature conservation demands.
The processing of applications and approval procedures is often unnecessarily postponed and delayed by the responsible authorities. In Galicia, Spain, for example, a 2008 regional law stipulates that new licenses for maritime aquaculture may only be issued through open competitions. Since the introduction of this law, however, such competitions have never taken place, apart from isolated experimental aquaculture projects. In the period 2014–2020, not a single new aquaculture business was founded in Poland. Also Italy’s aquaculture sector has been uncertain for years. The issuing of new licenses was prohibited and many companies did not know whether their existing licenses would be renewed. This law has finally been repealed since August 2022, but the example illustrates the challenges aquaculture companies in Europe have to contend with. Even traditional businesses now often tremble when they have to have their water rights confirmed again. What was once just routine can now be a threat to the existence of a company. Who invests in modern technologies and more sustainability when it is completely unclear whether their business has a future at all? The EU’s funding policy for aquaculture is likened to driving a car and simultaneously pressing hard on the accelerator while standing on the brakes.
More money doesn’t solve all problems
Excessive bureaucracy, slow application processing, official bureaucracy, unclear operational prospects. All of this does not help to make the European aquaculture more dynamic nor does it inspire optimism in the development of the industry. Even generous financial support is of little use. The Court of Auditors’ report states, almost resignedly, that the significantly increased funding has produced “no concrete results”. This is unlikely to change until the mid-term evaluation of the European Maritime, Fisheries and Aquaculture Fund planned for 2024 and the assessment of progress in the implementation of the EU’s strategic guidelines for aquaculture planned for 2025. The EU Commission asserts that a “strategic and long-term approach to the sustainable growth of EU aquaculture is now more important than ever”. Unfortunately, the Commission focuses mainly on the aspect of sustainability and hardly on increasing production.
As a conclusion from the report, the European Court of Auditors recommends, among other things, that the EU Commission “support member states in removing the obstacles to the sustainable development of aquaculture in the EU”. The Commission should promote the exchange of best practices that contribute to removing bottlenecks affecting the sustainable development of aquaculture at the level of key environmental strategies, permitting procedures and spatial planning. However, this recommendation must be implemented not only by the member states, but by the EU Commission itself. The EU’s aquaculture policy must be dusted off, freed from unnecessary ballast and strategically realigned. Otherwise, companies in this area will continue to just tread water, despite generous financial support.
Manfred Klinkhardt