CHILE'S SALMONCULTURE. FOUR YEARS LATER.
A TRIANGULAR PROCESS
FOR REBOOTING SALMON 2.0
C.R. Hernandez Salas
THREE FACTORS EXPLAIN THE CRISIS AND RAPID RECOVERY IN CHILE
We must be focused on how the regime works.
A regime geared towards growth.
Sanitary aspects were separated from the
environmental management. (First buffer)
A regime geared for expansion, spreading the risk geographically.
Trends for expansion were working before the
“crisis”. (Second buffer)
A regime expanding the financial risk.
Shifting the risks from the banks to the stock
market (Third buffer).
TRIANGULAR PROCESS REINFORCING THE GROWTH
It is a reinforcing process. From the regulatory towards the
resources until de financial schemes. But remain risky?
Regulatory vertex
Financial vertex Nature vertex
Risks
B U F F E R
BUFFER
Environment
Society
Outline of presentation
The working of the barrios
The economic situation of the Chilean
companies
The environmental situation
The sanitary situation
The monitoring and enforcement capacity
(SERNAPESCA)
Moving further south ? (to Magallanes)
58 barrios in Region X, XI and XII
The system of barrios a good idea, but it is a problem
of implementation especially in Region X
The idea of one company, one barrio has been
difficult to implement.
You only need one bad neighbour to get disease
problems. ''A healthy enterprise in an insane
neighborhood''
Better performance in Region XI
Probably even better in Region XII where you can
plan nearly from scratch
GROWTH & ENVIRONMENT. CURRENT TRENDS
Consequences:
Public response remains reactive while the system
gains in complexity.
About 400 new concessions for the
next years.
The public sector is essentialy the
same as before the crisis.
Nevertheless, there is a better response to sanitary
emergencies, and better practices in the industry.
But, key issues like the distance between centres
and between barrios have not been dealt with.
The economic situation of the Chilean companies
Bank debts have to be paid in 2012.
Several companies need to renegotiate their debts.
Difficult situation when the prices are falling.
The banks decide of the future structure of the
industry.
Lately several companies have successfully gone
on the stock exchange – shifting the risks to
private investors.
EXPORTS OF SALMO SALAR PERIOD JANUARY SEPTEMBER. TONS
2008: 173.738 Tons US$ 6,5 kg. FOB
2009: 149.994 Tons US$ 5,8 kg. FOB
2010: 63,700 Tons US$ 8,1 kg. FOB
2011: 96.373 Tons US$ 9,2 kg. FOB
November 2011:
+- 50% less
(USA remains the main market)
Growth & environment: Barrios are not enough.
New regulations still have some gaps:
A major focus on the processes (less on institutions).
New regulations are based on improving
processes, based on private skills. But
institutions remain unchanged in substance.
More controls and biosecurity measures in the
production chain. But, with weak
implementation.
Liability gaps. New rules are focused on the monitoring
capacity but less on the objective liability of farmers.
Problems of administrative capacity (SERNAPESCA)
SERNAPESCA has improved, but
Is not able to follow the present growth
Increasing number of regulations
Increasing complexity of regulations
Public regulations still based on private processes
and skills
Unclear relations between SERNAPESCA and the
Undersecretary of Fisheries under the Ministry of
Economics.
Exporting the risks to Region XI and XII
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
2006 2007 2008 2009 2010 2011 2012
Salmo salar harvests in tons by region
Los Lagos
Aysen
Magallanes
Total
Risks are blurred in the geography
Why was the recovery so fast?
New spaces for aquaculture: Aysen, Magallanes
In fact, Aysen harvests have increased their share in the annual
harvesting.
2006: 19% (71,402 tons)
2010: 63% (77,233 tons)
Projections maintain or increase these trend.
Projections of the industry are optimistics:
2011: 215,000 tons.
2012: 300,000 – 320,000 tons.
Calculated on a rate of 30% - 50% of concessions effectively
working and entry of 800,000 – 900,000 smolts per concession
annually.
Double dip: social expectations
The future of salmonculture
remains uncertain.
Aysen's economy is
becoming highly dependent
on salmonculture (the last
quarter Aysen was the
economy that grew more in
the country, driven by the
salmonculture). NGOs and artisanal fishers are weak today, and have their own
problems and agendas.
Politicians are worried for the future of the industry. A sign of new
collapse would be an argument againts the industry as a whole.
A double dip? The uncertain future and the Virgin
There are worring signs:
Why has the most remote area
become infected?
Cupquelan fjord is the most
unlikely area for finding ISA.
But the “virgin” is infected.
Gaps in the management of
wellboats?
CONCLUSIONS
The future of the industry remains highly uncertain.
Key factors of the sanitary and environmental management of the
new regulations remain unimplemented.
The new regime is still based on private processes and skills. The
claim for more state intervention by the beginning of the crisis was
forgotten.
The main actor in the near future will be the banks. Mergers and
sales will be pushed probably by them, based on their guarantees.
There are worrying signs of bad sanitary conditions. Nevertheles,
cases of sanitary emergencies have been well managed.
CONCLUSIONS
The regime is under stress. Its propensity to growth is
clashing with:
The capacity of the monitoring and enforcement
regime of sanitary management;
The present price level makes the negotiations
with the banks difficult;
Liquidity. The march southward is only for larger
companies. Wider space, fewer companies.
Any sign of a new sanitary crisis will be politically
untenable.
NGOs. artisanal fishers and workers are in a
weak position, being involved in their own
problems and agendas. This could change!