As the importance of aquaculture for delivering global fish protein continues to grow so too does pressure for sustainable production practices. Steering the sector to move to ‘good’ or ‘better’ production practices involved a private governance arrangements, such as third party certification, operating through value chains supplying consumer markets in the global North. As the limitations of certification have become increasingly apparent, attention has turned to a new mix of private and public governance arrangements engaging both global and domestic aquaculture value chains; including transparency and traceability systems, public-private sustainability partnerships, benchmarking schemes and area-based management approaches. In this paper, I provide a review of how the structure of value chains for globally traded species, including salmon, tilapia, shrimp and pangasius, determine the design of these new arrangements and analyse the extent to which they can effect a new round of sustainability governance for the sector. What are the implications of these governance arrangements for both social and environmental outcomes? Will developed and developing economies be equally engaged? Can they improve upon certification and state regulation? And what new capabilities do aquaculture producers, processors and traders need to improve their production practices, while remaining competitive in a global aquaculture industry? Addressing these questions will help to us to identify new geographies of sustainability created through governing aquaculture through global value chains.

1. Governing aquaculture sustainability
through global value chains
Simon R. Bush
MARE People and the Sea Conference VIII, Amsterdam, 24-27th July 2015
Salmon farming in Hvannasund in the Faroe Islands.
IMAGE: PATRICK DIEUDONNE/ROBERT HARDING/CORBIS

2. The blue ‘boom’
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1961
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%
Production(milliont)
Aquaculture
Capture fisheries
Aquaculture's % contribution to global
food fish supply
Year
24%197% 78%28% 13%
10 year % change

3. The blue ‘bust’?
Aquaculture hit list
Disease
Habitat Loss
Biodiversity
Effluent
Feed
Labour issues
PRIVATE
GOVERNANCE

4. Limits to market-based regulation?
Bush et al. 2013
 Limited market demand
 Narrow take on sustainability
Issues more relevant to commercial
production, and strong farm level
focus
 Low capacity/Self-selection
Danger of not focusing on those with
larger (potential) sustainability gains
 Dependencies of small-holders
Reliance on public and private
intermediaries to improve

5. Questions
1. What characteristics of value chains enable or constrain
market-based improvements in aquaculture?
2. How do these characteristics, and opportunities for
improvement, differ between species?
3. What alternative market-based approaches could
strengthen improvement?

6. Global value chain analysis
 Beyond supply and
demand, cost and benefit
 Focus on institutions,
relations and norms that
structure economic
practices of firms
 Includes questions of
environmental and social
performance
 Can identify new
arrangements for improving
equity and performance
CABs
LABEL
PRODUCER
Product
CERTIFIED
CHAIN
ACTORS
CONSUMER
Gibbon et al. 2008; Bush et al 2014

7. Governance as coordination
A. Complexity of transaction
Information and knowledge transfer required to sustain transaction, particularly with
respect to product and process specifications.
B. Ability to codify transaction
Extent information and knowledge codified and, transmitted between the parties to
structure product type.
C. Capabilities of suppliers
Capacity of suppliers to meet requirements of the transaction, including public
support/
D. Risk profile
Degree of vulnerability faced by a supplier to deliver product, and opportunities to
transfer risk.
E. Spatial configuration of production
Location of suppliers in relation to each other, inputs and infrastructure.
Adapted from Gereffi et al. 2005

8. Price
Lead firm
Turn key
supplier
Material and
component
suppliers
Lead firm
Relational
supplier
Material and
component
suppliers
Lead firm
Captive
suppliers
Integrated
firm
MARKET MODULAR RELATIONAL CAPTIVE HIERARCHY
Gereffi et al. 2005, Review of International Political Economy

9. Degree of chain integration
0% 20% 40% 60% 80% 100%
1
2
3
4
5
Salmon Shrimp (Penaeus monodon)
Numberoffunctionsin
valuechain
Sample of 396 companies registered on Sea-Ex.
Functions: Buyer, processor, wholesaler, exporter, agent.
87
n
366
441
276
135

10. Salmon
 Large number of vertically integrated firms
 No major species shifts, production is highly uniform
 Subsidies and risk transfer in place
 Professionalised production, seed and feed
 Problems and capabilities internalised by companies
 Social issues – minimal (labour union issues in Chile)
 Area management driven by disease
 Emergence of industrial coalitions

11. Shrimp
 Low number of vertically integrated firms
 Major species shifts, production is highly differentiated
 (Implicit) subsidies and weak or no risk transfer
 Mixed professionalization of production, seed and feed
 Capabilities externalised by companies
 Social issues – major issue (community standard, labour)
 Integrated agro-ecologies – weak area based management
 Emergence of national standards

12. Type of coordination
Factors Salmon Expected Shrimp Expected
1. Complexity of
transactions
High High High Low/High
2. Codification High Low High High
3. Capabilities High Low Low High/Low
4. Risk Low High
5. Spatial
connectivity
High Low
Coordination
type
Modular Vertical
integrated
Captive Market,
modular,
relational

13. So what does this tell us?
 Shrimp
Low producer capabilities should push to
vertically integration, but high levels of
risk constraining lead-firm investment.
 Salmon
High producer capabilities should push
towards market coordination, but high
capacity for codification leads to
integrated industrial organisation

14. Certification paradox
MARKET HIERARCHY
We assume certification
can strengthen capabilities of
producers on market ...
... but individual farmers tend
not to have capabilities and
require support and/or integration
Certification is not market-based because producers
engaging in sustainability require high levels of external
support

15. Area-based approaches
 Standards and auditing practices being developed
 From vertical horizontal capabilities between farmers
 Beyond farm scale to include social and environmental
improvement (?)
 Open up opportunities for risk transfer and financing (?)
 Integration with state regulation (?)

16. Firm-level certification
 Lead firms should be seen as objects
of regulation rather than drivers of
coordination and sustainability
 Strategies of firms – portfolio or
dedicated firms?
 Invest because of increased brand
risk, or need to maintain stable
supply?
 More relational outcomes, such as
aquaculture improvement projects.
 Attention needed to ensure that
these downstream firms enforce
these AIPs
Sampson et al. 2015

17. Conclusions
 Limitations of market-based approaches can be related to
the structure and function of value chains
 Innovations in market-based approaches are needed that
strengthen capabilities of producers, manage risk, and
regulate firm actors
 Species differ – so value chain profiling is needed