Regulations cost salmon and trout producers $40.1 million in lost revenue according to Virginia Tech aquaculture expert

Government regulations are inhibiting growth in the aquaculture industry according to Virginia Tech Assistant Professor Jonathan van Senten.

The current U.S. trade deficit in aquaculture indicates that demand for seafood among U.S. residents is high, and according to van Senten, U.S. seafood producers are trying to increase production to meet that demand but the costs they face adhering to regulations is impeding industry growth.

“With all businesses, there’s going to be some kind of a cost for compliance with standards or regulations, but what’s surprising is the magnitude of the costs – across the country the salmonid industry lost $40.1 million over a year period,” said van Senten.  

“You have direct costs, which you are required to pay.  Things like licensing fees, penalties, or other things prescribed by the law, but then there are also indirect costs,” he said. “The cumulative effect of these costs also result in unintended consequences, like forcing U.S. salmonid producers out of business, or sending investment overseas where there are less stringent regulatory regimes or enforcements.”

To curb these unintended costs, Van Senten urges regulatory agencies to communicate before releasing new regulations that could have opposing requirements.

“There’s a lack of communication when agencies go through the rule-making process,” van Senten said. “Agencies have their own goals and objectives, which doesn’t necessarily align with everybody else. For example, the U.S. Department of Agriculture is trying to promote agriculture while the Environmental Protection Agency is trying to protect the environment, and those two goals don’t always work hand-in-hand. We see evidence of that at the farm level where there’s confusion in knowing how to comply, or unintended consequences that create additional costs at the farm level. The current system puts seafood producers in a precarious situation.”

Background

Van Senten is an assistant professor of agricultural and applied economics in the Virginia Tech College of Agriculture and Life Sciences. He is based at the Virginia Seafood Agriculture and Research Extension Center in Hampton, Virginia. His research focuses on providing comprehensive information about the costs and impacts of regulations on seafood producers throughout the U.S.

To secure an interview with Jonathan van Senten, contact Bill Foy by email at fwill55@vt.edu; or by phone at 540-998-0288 or 540-231-8719. 

Written by Jillian Broadwell