Fish: A Global Value Chain Driven onto the Rocks

Fish: A Global Value Chain Driven onto the Rocks John Wilkinson Abstract This article discusses the fish sector in the light of the global value chain (GVC) approach and particularly its demand- versus supply-driven typology. It is argued that especially in the case of long-established food chains, such as fish, where multiple actors both public and private have cumulatively defined and redefined policies and strategies, clear patterns of governance are less easy to establish than in the ideal-typical case of the fresh fruit and vegetables sector. The article analyses the crisis of the capture fishing sector, together with the regulatory systems put into place, and traces the explosive growth of fish-farming, situating both within a redefinition of North-South relations in this global value chain. Special attention is given to the role of catering and retail in the growth of fish-farming and it is argued that retail is now committed to the latter’s promotion to a degree which compromises its ‘consumer-oriented’ image. The article concludes that the future of the fish sector cannot be left in the hands of the supermarkets’ putative capacity to internalise consumer demand, but requires the direct involvement of the consumer– citizen for the implementation of national and global regulation. Introduction Much recent literature on the globalisation of the agrofood system has been influenced by ‘global commodity chain’ (GCC) and ‘global value chain’ (CVC) research (Gereffi 1994; Kaplinsky 2000), which has focused on the shift from supply to demand-driven forms of governance. A similar line of analysis has been developed by those who focus specifically on the hegemonic role of large-scale retail, particularly as this latter has begun to impose its control also on the food systems of developing countries. The evidence in favour of the ‘demand-driven’ thesis is especially forceful when dealing with new food chains, particularly those whose production systems are characterised by flexibility and low degrees of food processing. Not surprisingly, the fresh fruit and vegetable sector has become a paradigm of the demand-driven thesis and a rich analytical literature has emerged on the profile of this newcomer to global value chains (Dolan et al. 2001; and Berdegué 2002, Reardon et al. 2003). We would argue, however, that long-established food chains, where multiple actors, both public and private, have cumulatively defined and redefined policies and strategies through © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Published by Blackwell Publishing, 9600 Garsington Road, Oxford OX4 2DQ, UK Sociologia Ruralis, Vol 46, Number 2, April 2006 ISSN 0038–0199 140 Wilkinson complex procedures of conflict and compromise, may often assume a more systemic dynamic that is less amenable than sectors such as fresh fruit and vegetables to clear governance, whether by supply or demand.1 The shift to demand considerations is also associated with the redefinition of markets according to quality criteria, leading to a mutually reinforcing association between quality and demand-driven value chains. The food system is particularly suited to such an analysis, as retail, which emerges as the hegemonic actor, is characteristically unencumbered by the sunk costs of any particular food chain and therefore singularly well placed to reorganise the agrofood system around the mobilisation of quality-based consumer demand, whether or not this conflicts with entrenched supply side interests. While responsiveness to consumer demand has become a powerful justification of retail strategy, a growing literature is contributing to the creation of a more complex notion of the construction of consumer demand (Warde and Martens 2000; Callon et al. 2002; Cochoy 2002; Harvey 2002). The present article contributes to these debates on the role of quality and demand and will concern itself with large-scale retail’s degree of autonomy in relation to other actors and interests in the food chain. It will also consider the degree to which retail is itself becoming locked-in to particular supply options which, in turn, limits its capacity for demand responsiveness. To explore these issues, we have chosen to analyse a particularly complex sector – fish – which has re-emerged as a decisive component in the globalisation of the food system, and a strategic, non-traditional export option for developing countries in the form of fish-farming. Perhaps more than any other food product, the fish chain has mobilised an array of public and private actors spanning nations and centuries and, far from adjusting to strategic governance, whether of supply or demand, conforms more to Giddens’ (1991) image (used as a generic description of high modernity) of a juggernaut out of control. In addition, in this sector retail reveals itself to have accumulated vested interests in the form of fish-farming supply systems, which in turn makes it less responsive to consumer concerns in face of current doubts surrounding the health qualities of fish products. In the following sections we will explore these issues by characterising the unique features which have informed the specific patterns of globalisation in the fish chain. Firstly, we consider trends in world production and the decisive role of world trade in the characterisation of the fisheries sector. This is followed by a review of the features leading to the current crisis of capture fishing. The third section evaluates the emergence of global patterns of fish-farming. In each of these sections we examine the relative influence of different actors along the value chain in the restructuring of the global fish economy, arguing that supply or demand characterisations must give way to cumulative multi-causal analyses if current developments in this sector are to be properly appreciated. Global patterns of fish production, consumption and trade World trade in processed, semi-processed or prepared food products as a proportion of total world production for core diet foods such as milk, meats, fruit and vegetables ranges from as low as 5 per cent up to 15 per cent. In 1995 the value of total trade in © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Sociologia Ruralis, Vol 46, Number 2, April 2006 Fish: a global value chain driven onto the rocks 141 horticulture products was US$15 billion, with meat at US$22 billion and tropical beverages reaching US$29 billion (UNCTAD 1997). Global trade in fish products in the same year reached US$46 billion and by 2001 that figure was over US$56 billion. Almost 40 per cent of total fish production in live weight equivalent is incorporated into world trade, with 50 per cent of this coming from developing countries. The net revenue from fish exports by developing countries reached US$18 billion in 2001, more than the combined net value of their rice, coffee, sugar, tea, banana and meat exports (Ruckes 2003). On the other hand, Japan, the US and the EU are responsible for almost 80 per cent of total imports. Over the last 20 years, trade flows have completely reversed, with the developed world shifting from being a net exporter of 818,000 tons of food fish in 1973 to a net importer to the tune of 4,045,000 tons by 1997 (Delgado et al. 2003). The trends in production are no less marked. Fish production based on capture had its boom period in the 1950s and 1960s with an average 6 per cent annual growth rate. From there on, however, growth slowed down dramatically to around 2 per cent in the next 20 years and went into absolute decline in the 1990s. Aquaculture (inland and marine), on the other hand, led by salmon and especially shrimp farming, has had an astonishing record of annual growth: 5 per cent in the 1950s and 1960s, 8 per cent in the 1970s and 1980s and 10 per cent in the 1990s (Sundar 2002). From being a basically subsistence activity combined with rice production, aquaculture was responsible for 37.5 million tons of production in 2001, equivalent to 40 per cent of total capture fishery in that year (97.6 million tons). It is projected that by 2020 aquaculture will account for 40 per cent of total fish production (Delgado et al. 2003). Initially overwhelmingly based on shrimp production in Asia and salmon in Chile, Canada, Norway and Scotland, fish farming is now extending to white fish species and is advancing into the Mediterranean (sea bass, bream) and Oceania (tuna, kingfish), with an experimental development of off-shore aquaculture (halibut, haddock) in the US (Staniford 2003). Given this dramatic shift-around in trade, the global fish chain could well be analysed within the parameters of the out-sourcing of production phases to developing countries, which has been a common practice in other activities, exploiting the advantages in such countries of cheap labour, abundant and cheap resources and lax regulatory regimes (Gereffi 1994). There is much truth in this perspective, but it should be noted that salmon fish farming from the northern hemisphere is now the prime source of supermarket sales for this product in the developed countries. The regulation of fish farming in the developed world has in fact been equally lax, primarily because it has been seen as the only viable solution to the intractable problem of marine fish stock depletion. If the experiments in offshore fish farming prove viable, it may well signal a return of production to the waters of the developed countries. The shift from capture to aquaculture brings with it all the characteristics of intensive farming systems, thoroughly analysed in the agrofood literature, particularly in the case of feed-lots, pigs and poultry, and involving similar, if not even greater, problems related to the environment, waste-product pollution, chemicals, veterinary products (antibiotics, hormones) and intensive feeding systems. These latter have been singled out as the Achilles heel of fish farming to the extent that there is no ready © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Sociologia Ruralis, Vol 46, Number 2, April 2006 142 Wilkinson substitute for fishmeal based on pelagic, oily fish species which constitutes a crucial component of capture fishing. It is estimated that 35 per cent of fishmeal and 70 per cent of fish oil is already dedicated to aquaculture, figures which are projected to rise to 56 per cent and 98 per cent respectively by 2010 (Staniford 2003). It comes as no surprise that soymeal is already being experimented with as an alternative feed supply, although the effects on final food taste may be a limiting factor. This shift from capture to aquaculture has been legitimised by analogy with the evolution from extractivism to the intensive production paradigm of the green revolution, and, to push home the point, has been baptised as the ‘blue revolution’ (The Economist 2003). The progressive convergence of animal protein production systems has led to an ever greater involvement in the fish sector by leading players from other food chains situated at different stages along the production process. The first move in this direction was the result of the application of canning technology (Shephard 2000), but in this case, while the technology was generic, firms tended to remain specialised in accordance with the origin of the raw material in question. With the advent of frozen and prepared foods, pioneered by Birds Eye,2 fish products became one option within a portfolio of ‘main meal’ dishes, leading to the direct involvement of firms from different food-chain backgrounds – Unilever, Tyson and ConAgra. Fish farming, in its turn, has attracted global firms in animal feed, such as Ralston Purina, together with upstream inputs and genetics firms, among whom Monsanto is very much in evidence. Nutreco, the largest global fish-farm firm, is equally involved in pig, poultry and animal feed production (Friends of the Earth 2002). Global fish consumption patterns are as striking as trade flows, showing symmetrically inverse tendencies. In 1973 developed countries were responsible for 55 per cent of global fish consumption, declining to 31 per cent by 1997. This increase in developing country share has been largely due to China (11 per cent to 36 per cent in the same period), with India and Southeast Asia doubling their share, whereas in sub-Saharan Africa consumption stagnated and declined in the 1990s. Fish is a much more decisive component of the protein diet in developing countries, representing an average of 20 per cent in less developed countries, but rising to as much as 50 per cent in some countries (Bangladesh), whereas in developed countries, also with sharp variations, it represents an average of 13 per cent. Per capita consumption in the developing world (excluding China), however, was calculated at 9.2 k per capita, as against 21.7 k in the developed world, (Delgado et al. 2003). While developing countries, therefore, are more dependent on fish for their protein needs, there is a net flow of fish from these countries for consumption in the developed world (Sundar 2000). The depletion of capture fish resources in northern waters and the extraordinary surge in fish capture and especially fish-farming in the south, almost exclusively, (with the decisive exception of China), devoted to exports for northern consumers, in addition to acute social and environmental issues, starkly poses the risks for global food security/sovereignty. Capture fishing: who is piloting: a food chain out of control? Transatlantic trade in cod was already well established in the sixteenth century, replacing the Icelandic routes. French boats, better provisioned with salt could each © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Sociologia Ruralis, Vol 46, Number 2, April 2006 Fish: a global value chain driven onto the rocks 143 carry back a 25,000 kg catch of processed and prepared cod, while the British, with salt in short supply, had to dry their cod on land before setting back. The Newfoundland settlements which emerged were based on the cod economy, and this, with time, would become an important motive in the events leading to the Boston Tea Party (Kurlansky 1999). On the Pacific coast, already in the early nineteenth century, the Hudson Bay Company promoted trade in salmon, which was exported to England (Dawson 2003). The icing of fish, a technology learned by the British from the Chinese, began to be used as early as the 1780s to open up trade in fresh salmon from Scotland to London. This technology, initially used for the marketing of landed fish, was rapidly applied to preserving fish at sea, allowing for larger fleets, longer fishing times and deep sea fishing. In their turn, these changes provoked adaptations in the ships and the gear (Shephard 2000). As early as the 1870s the US Congress, concerned with the decline in New England fish, created the Commission of Fish and Fisheries. Before the end of the century, regulation controlling fishing in its own waters began to be put into place, including net restrictions, closed seasons and spawning escapement requirements. Technologies developed during the World War II and, applied to trawler fleets, transformed the nature of international fishing in the 1950s and 1960s. These included the application of radar and sonar to locate and follow migratory stocks. The use of diesel engines permitted cheap fuel, allowing fleets to stay out longer and fish deeper (Safina 2003). The factory trawlers made their appearance in the early 1950s as an adaptation from whale fishing and by the 1970s they dominated the world’s fishing, with the Soviet Union sporting 400 such trawlers, Japan, 125, Spain 75 and France and England 40 each (Rogers 2003). These trawlers could scoop up 400 tons of fish in a single haul and could stay at sea for months and process the fish into frozen filleted slabs. This mass, primary processing production system promoted the development of the quick frozen convenience fish food sector, which in its turn was transformed by the consolidation of large-scale retail. The supermarket format itself owed much to the revolutionary implications of the cold food chain. Such a development was already predicted in a Birds Eye advert of 1930, which argued that frozen foods would change the way people shopped and that there would be a new kind of store in the future: ‘not a grocery store or a meat market or a fish market or a delicatessen, but all four rolled into one. It is a food store in the broadest sense of the word’ (Shephard 2000). Today, Birds Eye is one of Unilever’s three leading frozen fish brands. Six per cent annual growth rates of capture during the first two decades after World War II were the result of this revolution in fishing practices, leading to the serious depletion of world fish stocks on the high seas. The factory trawler fleets also threatened stocks in coastal waters and with them, domestic supplies and the livelihoods of artisan fishing communities, which were the key units of many national fishing economies. In particular they threatened the traditional combination of fishing and on-land primary fish processing which together had guaranteed the viability of these fishing communities (Alcock 2002). Territorial disputes (of which perhaps the most famous were the British-Iceland cod wars) became common, not now within the three nautical mile range, which was seen to be part of national sovereignty, but over rights to fishing on a nation’s © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Sociologia Ruralis, Vol 46, Number 2, April 2006 144 Wilkinson continental shelf and to migratory fish whose origins were in the bays and rivers of a particular country. A series of Law of the Sea conferences attempted to impose limits on catches and these were followed by the enactment of national 200-mile exclusive economic zones (EEZs) which were to change the rules of the game, but not necessarily to slow down the rate of fish stock depletion. Although it had been preceded by a similar but unilateral action by Iceland, the US Magnuson Law of 1976 instituting the EEZ, was the landmark for worldwide national legislation. While rich in fish, when compared to Japan, the Nordic countries and the then Soviet bloc, the US was essentially a meat (initially red and then increasing white) consuming country and it had no fleet to compete with the factory trawlers (Buck 1995). The Magnuson legislation led to replacing the open sea regime with national and regional fishing management schemes, but it did not change the fishing model. Rather it allowed the US to become a competitor and by 1999 it also had 50 factory trawlers. Each trawler cost now anything from US$40–65 million dollars and the largest could net and process 450 metric tons of fish a day, everyday. Four or five firms are responsible for 20–30 per cent of the world fish catch, with the largest of them, the Norwegian, American Seafoods/KRG1, controlling 10 per cent of the global white fish market and 40 per cent of the pollock quota in the Baring Straits (Buck 1995). With the decline in cod, pollock became a key new product, which was transformed into surimi for the Japanese market. As artificial crab it also became an important input for the burgeoning seafood restaurant chains in the US. By 1996, the top eight seafood chains in the US had a turnover in excess of US$3 billion ( Jakle and Sculle 1999). In addition to accelerating the depletion of the principal fish stock, the trawlers were responsible for enormous waste in the form of bycatch, calculated in 1994 in the case of New England as 145 per cent of the total ground fish landings (Greenpeace News 2003). It is also thought that they may be causing irrevocable damage to the ocean’s ecosystems as they drag up the biomass from the seabed. The combined pressures of depletion and threat to long-term sustainability led to restrictive legislation on catch and gear in Northern waters, involving bans and quotas. One important consequence was a shift to the waters of the developing world. Unlike the US, these countries may have acquired EEZ rights, but their ships were unable to take advantage of them and financing new fleets was for most of these countries prohibitive. Either rights to fish were rented out or foreign fleets were allowed to fish under national flags. For the EU, this was an ideal alternative to selling off their fleet capacity, and Spanish trawlers took over the Argentine/Uruguay hake grounds with the incentive to these countries of tariff exemptions for the import of the catch to Europe (Thorpe et al. 2003). In many zones, a total allowable catch was imposed, but without individual quotas this led to a race for fish based on ever larger boats and shorter fishing seasons, favouring the international fleets and further threatening the ice chilling fleets and local fish processors. By the 1990s the management systems in most developing countries were in disarray, which, particularly in a climate of liberalisation policies, pointed the way to privatising strategies. The introduction of often transferable individual fishing quotas might in principle have mitigated the pressures of the ‘race-tofish’ syndrome. By then, however, the fleets were dominated by large firms allied to foreign capital and most countries exhibited a high degree of regulatory capture, with powerful interest groups influencing fishing policy (Thorpe et al. 2003). In the Nordic © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Sociologia Ruralis, Vol 46, Number 2, April 2006 Fish: a global value chain driven onto the rocks 145 countries, particularly Iceland, and the US, some success seems to have been achieved in defending local fishing systems through the design of the quota system (Sylvia and Munroe, 1993, but this is less feasible where management systems are weaker. With 70 per cent of capture stocks either fully fished or over-fished the pressure for change increased along two lines – from quotas to sustainable management systems, and from the capture fishing to aquaculture. The two options could be considered as complementary, although aquaculture was increasingly represented as a substitute for capture fishing (The Economist 2003). Yet others saw in aquaculture a radicalisation of the industrialisation of fishing, with even more pronounced social and environmental consequences (Greenpeace 1997). On the international regulatory front, the Oceans chapter of the Rio Summit’s Agenda 21 was followed by the FAO Code of Conduct for Responsible Fisheries, the UN Agreement on Straddling Stocks and Highly Migratory Fish Stocks, and the United Nation Convention on the Law of the Sea. Within the fishing industry by far the most significant initiative was the establishment of the Marine Stewardship Council (MSC), which emerged from a joint initiative between Unilever and the World Wide Fund for Nature (WWF). The MSC, which is now independent and financed by charitable trusts, has adopted three basic principles as the criteria for its certification: A fishery must be conducted in a manner that does not lead to over-fishing or depletion of the exploited populations and, for those populations that are depleted, the fisheries must be conducted in a manner that demonstrably leads to their recovery. Fishing operations should allow for the maintenance of the structure, productivity, function and diversity of the ecosystem (including habitat and associated dependent and ecologically related species) on which the fishery depend. The fishery is subject to an effective management system that respects local, national and international laws and standards and incorporates institutional and operational frameworks that require use of the resource to be responsible and sustainable. (Heap 2000, p. 135) Unilever is the world leader in final frozen food products and its three brands, Findus, Birds Eye and Igloo, account for some 25 per cent of the frozen fish market in Europe and the US (www.unilever.com). While aquaculture is beginning to move into these species, it offers no short-term perspective for a firm such as Unilever, which has therefore become a proponent of sustainable capture fishing, planning to source all its fish from such certified systems by 2005. To date, it claims to obtain 25 per cent of its fish from sustainable certified sources and MSC certificates have now been attributed to the salmon fish from Alaska, hoki from New Zealand and rock lobster from Australia (Marine Stewardship Council n.d.). Another major development has been the adoption of flagged vessel schemes by the Asda/Walmart and Tesco supermarkets in Britain. While the contracts are triangulated through suppliers or processors, the supermarkets commit themselves to taking the whole catch. The principal motivation in this case seems to be improvements in supply chain management, particularly to ensure fresh supplies seven days a week. The quality of the supplied fish is also guaranteed through the stipulation of fishing practices for fresh fish – maximum times at sea and storage and icing practices. In the House of Lords inquiry the question was raised whether quality in © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Sociologia Ruralis, Vol 46, Number 2, April 2006 146 Wilkinson this sense might not in fact increase discards. Whether or not this is the case, it is the issue of consumer-oriented quality rather than sustainability which seems to be to the fore. Along a similar consumer-driven logic ‘locally caught’ supplies are being promoted in certain regions (House of Lords 1999). As with other food products, scares are leading to the implementation of traceability systems and the EU has financed a programme, Tracefish, for the elaboration of voluntary industry standards on quality and traceability, which was projected to be implemented as from 2004 (Seafish Industry Authority n.d.). Initiatives are already in place which involve the use of electronic weighing scales, enabling catches to be bar-coded for weight, time and place of capture, together with water temperature (MacDubhghaill 2003). As in the flagship examples, however, it is not clear that the quality and the traceability in question take on board the issues of sustainability which are the basis of the MSC certification schemes. Fish-farming: retail and catering in alliance with the intensive (soy) protein complex? Perceptions of the tragedy of ocean fish-stock depletion have to a great extent been mitigated by the promotion of a sentiment of inevitability, viewing capture fishing as the counterpart to hunting and extractivism in agriculture, both of which would now be replaced by increasingly convergent intensive production practices. The notion of the ‘blue revolution’ (The Economist 2003) captures this vision perfectly, presenting fish-farming as an evolution to more efficient practices, the more so as these systems extend beyond salmon, trout and shrimps to white fish species. In addition, a conjunction of powerful economic and political interests has reinforced and accelerated this shift. As we saw earlier, the single most important food export from developing countries is now fish, increasingly in the form of fish-farming, and aquaculture has received decisive support from international financing, most notably the World Bank and the Asian Development Bank. In addition, this sector has been seen to provide opportunities for less developed countries such as Bangladesh and has led to the emergence of developing country transnationals, of which the Thai CP Group is the most notable (Bursch and Gross 2005). More generally, fish farming provides decisive new markets for the global food industry players in the genetics, inputs and feeds sectors – Nutreco, Monsanto and Ralston Purina. Lastly, and perhaps most importantly, large-scale retail and catering have seized on salmon and shrimps as the ideal fresh fish alternatives and have committed themselves heavily to the promotion of these markets, based largely on fish farming both in the North and the South. Shrimps and salmon have been the most spectacular examples of the growing importance of fish farming which is now almost exclusively responsible for the increase in world trade of these products. Shrimps provide a paradigm case for critiques of North-South trade. With the shift to aquaculture, a traditional extensive, subsistence, mixed cropping regime of shrimps and rice in the South was replaced by intensive export monoculture for luxury consumption in the North. In the US, the second largest importer after Japan, 70 per cent of shrimps are consumed outside the home, particularly in the seafood restaurant chains dominated by the Red Lobster © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Sociologia Ruralis, Vol 46, Number 2, April 2006 Fish: a global value chain driven onto the rocks 147 group, which alone consumes 5 per cent of world exports ( Jakle and Sculle 1999). According to the President of ICEC Seafood Corporation: Red Lobster’s advertising of shrimp has stimulated all consumption and in part made possible the 250 per cent increase in US shrimp consumption since the advent of aquaculture. (Greenpeace 1997) Asian developing countries have provided the major supply base, followed by Central America and more recently Brazil. With the development of aquaculture, labour is shifted off the land to the processing factories in much the same way as other outsourced labour-intensive stages of global production chains. In 1980, eight Asian countries were responsible for 76,000 metric tons, a figure which had risen to 448,000 by 1997. Ecuador, the leading Central American producer, increased its production from 9,000 to 130,000 metric tons in the same period (Goss et al. 2000). This explosive growth has been accompanied by sharp price oscillations, farreaching environmental impacts (such as the elimination of mangroves, water pollution, diminishing biodiversity), conflicts over land use and threats to local communities, together with devastating outbreaks of disease. A combination of untried technology and the prospect of huge short-term gains has led to the emergence of a ‘boom and bust’ profile for the industry. Taiwan, initially the leading shrimp-farming exporter, suffered a crippling disease outbreak in the late 1980s from which it only began to recover in 2000. In compensation, it exported its technological know-how to Thailand, which quickly transformed itself into Asia’s leading exporter, giving rise to the first developing country transnational in the sector, the Charoen Pokphand (CP) Group. Strong support from the World Bank and the Asian Development Bank, together with the growth of the CP Group made shrimp production an irresistible option for most Asian countries – Indonesia, Bangladesh, India and Vietnam. Disease, the search for ever cheaper labour costs and the Asian financial crisis, accentuated this nomadic tendency, which extended beyond Asia to Central and South America and, in the most recent period, also to Africa (Greenpeace 1997). On the other hand, as with the case of fruit and vegetables, the transnationalisation of retail has also stimulated domestic demand, with battered fried shrimps, together with other fish specialities, now experiencing 10–20 per cent annual growth rates in Thai and Singapore supermarkets. A more complex globalisation is replacing the North-South paradigm, with the frontiers between export and domestic markets becoming more fluid (UNCTAD 1997). While global players have stimulated the development of shrimp farming exports from developing countries, protectionist measures in the forms of tariff escalation, which has been as high as 30 per cent for some products, and more rigid quality standards (implementation of hazard and critical control points systems) imposed formidable barriers to access, particularly to the US and EU markets. Tariff escalation has tended to decline, however, and less developed countries have benefited from tariff exemption. Countries such as Bangladesh have shown the viability and benefits of adjusting to more stringent quality controls, although these can be activated for purely protectionist motives, as would seem to be the case in the current measures being taken against Brazil, which has emerged as the latest developing country exporting shrimps to the US market (Cato and Subasinge 2003; Josupeit et al. 2003). © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Sociologia Ruralis, Vol 46, Number 2, April 2006 148 Wilkinson New quality standards may lead to greater control over contaminants (such as antibiotics) detectable in the final product, but they do not necessarily address the broader issues of environmental and social sustainability. There are some indications, however, that the more opportunistic features of the industry are ceding ground under the joint impact of local struggles (particularly in the case of India); the ‘busts’ which have followed the ‘booms’ and the Asian financial crisis, which led to the crisis of big players such as the Thailand CP Group. As a result, there is now a greater presence of small shrimp-farming operations, a greater concern with hatchery operations to ensure shrimp stocks and a shift to lower density production systems (Cyriac 2003). This would not seem to be the case, however, with new entrants such as Brazil, whose drive to become a world leader in shrimp exports is based on very high per hectare production, which may reproduce the disease and pollution syndrome of earlier Asian shrimp farming, although Brazil is now in a position to benefit from the collective learning of this global industry, together with the new technologies and know-how now available (Rocha 2003). If catering in Japan and the US has been primarily responsible for the growth of the shrimp economy, supermarkets have played a decisive role in the dramatic popularisation of salmon consumption which, from having been a high priced luxury in the 1970s, is now an everyday fresh fish option and a staple of the booming, readymade sandwich sector. Some 90 per cent of salmon supplied to British supermarkets now comes from salmon farms (Edwards 2002). While Chile is fast on its way to becoming the leading exporter of salmon, the majority of farmed salmon still comes from the north – Norway and Scotland. Chile’s exponential expansion of salmon production in the 1990s, however, (involving a 20-fold increase) has led to rapidly falling prices and bankruptcy for many Norwegian producers (Milliken 2003). More recently, salmon farming has become a major focus of health concern, as research has pointed to high levels of contamination, leading the EU to require labelling to distinguish between farmed and wild salmon (Environmental Defense 2004). Supermarkets have resisted this move, both calling in question their consumer sovereignty orientation and suggesting that they have increasingly become stakeholders in the move to fish-farming (Blythman 2002) If salmon farming were under attack solely for environmental factors we might anticipate a decisive shift to the South, especially as Chile plans to double its production over the next 10 years. It should be said, however, that environmental opposition is also gaining ground in Chile as salmon farming moves further south into regions of the country valued particularly for their tourism (Ecooceanos 2001). In Scotland the environmental critique has been particularly forceful, focusing on pollution levels (a sewage equivalent of 9.4 million people), the threat to shellfish sites, algal blooms and the escapes of farm fish into the wild. It has also been calculated that the economic value of salmon angling (£235 million), which is particularly threatened by escapes and pollution, is on a par with salmon farming. Its beneficiaries, however, are more diffuse (tackle, clothing, hotels, travel), and have less clout than the highly concentrated salmon farming sector where two firms – Norsk Hydro (Norway) and Nutreco (via Marine Harvest) – control two-thirds of the 340 farms in Scotland. Globally, the top seven companies control 40 per cent of world farmed salmon production (Friends of the Earth 1999). © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Sociologia Ruralis, Vol 46, Number 2, April 2006 Fish: a global value chain driven onto the rocks 149 The challenge to salmon farming goes beyond environmental issues and reaches the central vulnerability of all fish farming – dependence on concentrated fishmeal and oil pellets made from capture-fish pellagic species, which are both highly contaminated and rapidly becoming depleted, as ‘fishing down the food web’ increases with the exhaustion of large white-fish stocks. High levels of contamination in farmed salmon have been officially recognised by the European Commission and British government advisors have declared salmon to be the most contaminated food sold by British supermarkets. Similarly US research on Scottish farmed salmon has concluded that it is a serious cancer health risk, based on the levels of dioxins and PCBs that have been detected (Environmental Defense 2004). Although the British Food Standards Agency (n.d.) maintains that the health benefits of fish consumption outweigh any risks, the European Union has determined that farmed fish must be labelled (European Inland Fisheries Advisory Commission 2001). This measure has been resisted by supermarkets, calling in question their self-proclaimed responsiveness to consumer interests and suggesting that they have may be becoming locked-in to certain supply chain solutions (Blythman 2002). Threatened by competition from Chile, Scottish fish farming is now moving into the production of cod and haddock with the direct support of supermarkets such as Marks and Spencer (British Marine Finfish Association n.d.). From being a highly specialised activity, therefore, fish-farming is increasingly being adopted as a generalised solution to the dwindling supplies of large white fish species from capturefishing, attracted also by the high prices which this decline provokes. It is estimated that by 2006, most large fillets of cod consumed in Britain (total consumption 170,000 tons) will be from fish farming. Cod, it should be added, consume twice the feed of salmon with an equivalent expected increase in pollution (Owen 2003). Sea cage farming of carnivorous finfish has now become a global business from Norway to New Zealand, from the Mediterranean to Mexico and from the Americas to Australia, and includes sea bass, bream, barramundi, halibut, tuna and other more exotic species. In spite of the setbacks provoked by disease and environmental regulation and the uncertainties of the market, the move to farm the principal white fish species is being promoted by leading multinationals Monsanto, Nutreco, Stolt, Cermaq and Ralston Purina (Staniford 2003). In a devastating indictment of this tendency, Staniford points to five fundamental flaws in sea cage fishing: untreated waste, mass escapes, diseases and parasites, toxic chemicals and fish feed. He argues that in theory new practices and technologies may mitigate the first four flaws, although only inland, closed containment systems such as those used by Future SEA Farms and Fish Protech in Australia offer guaranteed protection, so much so that Fish Protech has received authorisation to locate in drinking-water collection areas. The fifth flaw, however, fish meal and oil, has no ‘acceptable’ solution. By 2010 it is estimated that at current rates of growth, 56 per cent of fish meal and 98 per cent of fish oil will be consumed in fish farming. Rather than being an alternative to capture fishing, the oceans are being drained of their oily, pellagic species to service the expansion of fish farming. Already many species are disappearing and ocean biomass collection is developing to compensate for the depletion of fishmeal stocks (Staniford 2003). © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Sociologia Ruralis, Vol 46, Number 2, April 2006 150 Wilkinson Within the trajectory of the fish-farming alternative, many solution are being explored to deal with the first four flaws identified by Staniford, involving off-shore farming in deep water to deal with pollution and disease, with a consequent reduction in chemicals, together with genetic control of reproduction to deal with escapes (an adaptation of ‘Terminator’ technology). Until these options are operational or financially attractive, however, the dominant tendency will be to move from over-polluted areas into pristine waters, imitating the frontier mine-farming of yesteryear, in spite of increasing opposition from environmentalists, local communities and tourist interests. As for the fifth flaw, the solution currently being explored is soybean pellets, closing the loop with white meat production and unifying the production matrix of the animal protein complex. Transforming carnivorous fish into vegetarians is the obverse of feeding animal meats to cows, and although it may be less of a health risk, its effect on taste has proved to date an important obstacle. But for how long? The evolution of chicken taste is a ready reminder of consumer adaptability. Staniford’s optimal solution would be the elimination of finfish carnivorous sea farming and the promotion of inland shellfish farming. Barring that, he argues, the only solution is closed containment systems or ‘close-down’. Conclusion Global value chain analysis, with its distinction between supply- and demandoriented production systems, and parallel work on the globalisation of food retailing, have opened up important insights into the current dynamics of agrofood system globalisation. The one has highlighted the way in which demand-driven considerations have redesigned food chains almost from scratch, while the second approach has also showed the need to go beyond a simple North-South divide as large-scale retail breaks down the frontiers between export and domestic markets even in developing countries. The paradigm for analysing these tendencies has been the fruit and vegetables sector, where backward linkages have been recreated and redesigned in accordance with the evolution of logistics and quality-demand criteria. The fish food chain can be usefully analysed using this perspective. The shift of supermarkets towards direct contracting with trawler ships for capture fishing and their leading role in the creation of a popular salmon, fresh fish market are clear confirmation of the way retail is currently piloting changes in the global organisation of agrofood systems. At the same time, the fish sector demonstrates a much more complex interplay of interests even at the demand end of the chain, where catering has played a more autonomous role, particularly in the promotion of shrimp and similar seafood products. More decisively, the fish sector displays enormous inertial characteristics based on the historical accumulation and consolidation of interests around different segments of the global food chain, which have erupted in conflicts and even wars and have only been partially contained by increasing regulation. Faced with this out-of-control juggernaut where advanced technologies are harnessed to short-term but longconsolidated interests, the supermarket’s involvement in capture fishing has been limited to the fine-tuning of logistics and the quality (freshness) of supplies. The most farsighted initiatives to date have come from the fish-processing sector, dependent on © 2006 The Author. Journal Compilation © 2006 European Society for Rural Sociology. Sociologia Ruralis, Vol 46, Number 2, April 2006 Fish: a global value chain driven onto the rocks 151 globally sourced white fish supplies, in the form of the Management Stewardship Council, jointly promoted by Unilever and the WWF. On the other hand, the retail sector has played a decisive role in the promotion of the fresh salmon market based on fish farming. Unlike the fruit and vegetable sector, which is more readily subject to surveillance and consumer-friendly practices, fish farming is dominated by powerful global upstream players and by a complex, still untried technological base with enormous social and environmental externalities. The evidence to date would suggest that the retail sector itself has now become locked-in to a production system, initially seen as the guarantor of idealised consumer demand for quality (organoleptic and nutritional) and convenience but now transformed into an object of suspicion and confusion. The supermarkets’ refusal to label salmon ‘fish-farmed’ perhaps spells the end of its innocent courtship of the consumer, based on demand satisfaction. As retail assumes a more and more direct role in the organisation of the value chain, it also loses the flexibility to respond in an uncommitted way to fluctuations in consumer perception. At the same time, its commitment to final product quality falls far short of consumer demand, once this takes on board the more conflict-ridden issues of sustainability. A satisfactory solution to the dilemmas of the global fish chain cannot be left to the supermarket’s putative capacity to internalise consumer demand, but requires the direct involvement of the consumer–citizen in a complex mix of direct action, new consumer practices, negotiated initiatives with industry and pressure for public, national and global, regulation. Acknowledgement My thanks go to Zina Angelica Caceres Benavides for her valuable help as research assistant. Notes 1 2 A very interesting critique of the GCC approach, which also focuses on the limitations of its over-simplified typology is provided by Sverrison (2004). In addition to incorporating Gibbon’s (2001) ‘trader driven global commodity chain’, it is argued that the proposed typology is inadequate both for analysing many high technology sectors and for capturing the scope for local entrepreneurship. 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