Regulatory costs on U.S. salmonid farms

The economic effects of the implementation of regulations on aquaculture farms in the United States, while of concern, are not well understood. A national survey was conducted of salmonid (trout and salmon) farms in 17 states of the United States to measure on‐farm regulatory costs and to identify which regulations were the most costly to this industry segment. The response rate was 63%, with a coverage rate of 94. 5% of the U. S. production of salmonids. The regulatory system resulted in increased national on‐farm costs of 16. 1 million/year, lost markets with a sales value of 7. 1 million/year, lost production of 5. 3 million/year, and thwarted expansion attempts estimated at 40. 1 million/year. Mean farm regulatory costs were 150, 506/farm annually, or 2. 71/kg; lost markets with annual sales values of 66, 274/farm; annual lost production of 49, 064/farm; and an annual value of thwarted expansion attempts estimated at 375, 459/farm. Smaller‐scale farms were affected to a disproportionately greater negative extent than larger‐scale farms. Per‐farm regulatory costs were, on average, greater for foodfish producers than for producers selling to recreational markets, but per‐kg regulatory costs were greater for those selling to recreational compared to foodfish markets. Regulatory costs constituted 12% of total production and marketing costs on U. S. salmonid farms. The greatest regulatory costs were found to be effluent discharge regulations. The majority of regulatory costs were fixed costs, but regulatory barriers to expansion precluded compensatory adjustments to the business in spite of growing demand for salmonid products. Results of this study show that the on‐farm regulatory cost burden is substantial and has negatively affected the U. S. salmonid industry's ability to respond to strong demand for U. S. farm‐raised salmonid products. Results also suggest that the regulatory system has contributed to the decline in the number of U. S. salmonid farms. While regulations will necessarily have some degree of cost to farms, the magnitude of the on‐farm regulatory cost burden on U. S. salmonid farms calls for concerted efforts to identify and implement innovative regulatory monitoring and compliance frameworks that reduce the on‐farm regulatory cost burden.