Risk Management for Aquaculture through GLOBALG.A.P. Certification

10.10.2013
Introduction Aquaculture activities are increasing during the last decades. There are several challenges on the way but also great opportunities to generate protein for human consumption from aquatic farming activities to keep the needed supply for the world population. Farming production systems are more and more with evident pressure in attaining a sustainable process to generate expected food volumes with responsible practices. This is one of the greatest challenges and risks must be part of the planning and operating procedures. The following article focuses on risk management for aquaculture through GLOBALG.A.P. certification. About GLOBALG.A.P. GLOBALG.A.P. Certification system is a not-for-profit standards setting organization with a crucial objective: safe and responsible agricultural production worldwide. Standards are implemented voluntary. GLOBALG.A.P. also acts as a harmonization platform for national and private schemes. Three main scopes covered are: Crops, Livestock and Aquaculture. The GLOBALG.A.P. Aquaculture Standard applies to a diversity of fish, crustaceans and molluscs and extends to all farmed species, whereby the juveniles are either being derived from hatcheries or collected passively in the planktonic phase (e.g. shellfish farming). The standard covers the entire production chain, from broodstock, seedlings and feed suppliers to farming, harvesting, processing and post-harvest handling operations. It serves as a practical manual for any aquaculture producer, ensuring food safety, minimal environmental impact and compliance with animal welfare and worker health and safety requirements. Figure 1: GLOBALG.A.P. Aquaculture certification coverage of the entire production chain: GlobalGAP Figure 1 Risk management – farming activities For all farms, a risk assessment to show that the site in question is suitable for production with regards to Food Safety, Environment and Animal Health shall be in place and reviewed annually. Consequently, a management plan can be developed, establishing strategies to minimize the risks identified. Different from industrial activities that can take place under controlled situations, any farming activity due to its nature, possess a higher risk. Detailed risk assessments on specific components are included into the set of standards for GLOBALG.A.P. Aquaculture.  Further Risk Assessments – RA shall be in place for the specific components: - RA on Hazards to Worker Health and Safety:  generating health and safety management procedures as well as identifying the need of certificates of competence for workers handling and/or administering veterinary medicines, chemicals, disinfectants or other hazardous substances as well as workers operating dangerous or complex equipment, including diving operations. - RA on Hygiene: generating the appropriate hygiene instructions for all workers, who shall be trained. - RA on Food Defense:  to address potential threats to food security in all phases of the operation. Information of all employees and subcontractors must be available, including procedures for corrective actions in case of intentional threat. - RA on Chemical Storage:  risk on cross contamination to guide on the appropriate storage and conditions. - RA of Spillage: of non-used chemicals to guide on the appropriate storage infrastructure. - RA on Transport of Chemicals:  that considers food safety, health & safety and environmental risks. - RA on Hazards: risk analysis as base for the farm´s Hygiene Standard which must be adopted by all workers and visitors with all subjects listed in the GLOBALG.A.P. Aquaculture standard included. - RA on Medicinal Residues:  in relation to food safety with respective action plan when the Maximum Residual Level – MRL in the country of production and/or destination has been exceeded, included in the Veterinary Health Plan – VHP that shall be signed of by an authorized veterinarian. It is in the VHP that the need and frequency of fish flesh residue analyses shall be carried out to verify compliance with MRLs for approved medicines and to verify no residues for non-approved substances. - RA on Common Diseases: of the species/location to establish minimum parameters to show “good health status” before moving stocks to grow-on areas. - RA on Animal Health & Welfare:     - including farm, predatory and extraneous species present in the farm unit;     - routine water quality-monitoring program, including relevant water quality parameters and sampling points;     - parameters including temperature, dissolved oxygen, carbon dioxide, dissolved nitrogen (saturation), pH, ammonia, nitrate, nitrite, suspended solids;     - design of all equipment and systems to avoid any risk of unnecessary stress or damage to the fish. - RA on Water Quality: showing there is no risk to compromise food safety and animal health & welfare. From the environmental point of view, independency of the intake and discharge of water shall be the case to avoid unwanted contamination. - RA on Pathogen and Disease Spread: to own stock and wild fish species that shall consider a system in place for dead fish removal, storage and disposal as well as documented procedures for cleaning/disinfecting of all equipment and infrastructure in contact directly or indirectly with the fish and/or appropriate fallowing periods between harvests and re-stocking. - RA on Escapes: that shall include design of all equipment and systems, proper operating procedures to inspect integrity of nets and strength, appropriate net mesh to prevent escapes and risk of injuries to the fish. - RA on Transport Systems and Associated Equipment: that includes appropriate cleanliness and disinfection as well as avoidance of any type of escape. - RA on Pest Infestation: for all operations. - Environmental Risk Assessment – ERA: with detailed information of the minimum criteria to be considered (special cases for countries lacking legal requirements with this respect). - Biodiversity: Risk Assessment. Risk management – hatchery activities Together with the above mentioned, risks for farming activities that are also compulsory for hatcheries, there shall be in place extra risk assessments for: - Water disinfection: need of incoming water disinfection; - Food safety: when raw unpasteurized or live feed used at hatcheries to assess if this will not affect food safety and that does not pose a risk to the farmed stock - evidence of routine surveillance disease monitoring for pathogens. Risk management – compound feed manufacturing Farms must show that 12 months after certification, all feed used at the farm has been checked. GLOBALG.A.P. Compound Feed Manufacturing standard requests the following risk assessments: - RA on Safety and Health : working conditions as base for the Health, Safety and Hygiene Policy and Procedures. This will define the need of training for workers on identified areas. - HACCP principles: e.g. Codex Alimentarius Commission Code of Practice – General Principles of Food Hygiene. - RA for All Suppliers: must be present with a documentation that demonstrates that all suppliers are risk assessed according to recognized food safety standards. - RA for Each Feed Ingredient: must be subject to a formal HACCP based risk assessment, selection and approval process based upon Origin, Storage, Processing, Handling, Transport and Nutritional and Bacteriological Characteristics. - RA on Mixing efficacy: of all mixers must be tested and incorporated into a documented risk assessment. - RA for External Transporters of Finished Feed: shall be evaluated based on risk. At farm level, a risk of contamination when medicated feeds are used shall be base for proper storage of feed with/without medication. Risk management – post harvest activities At post harvest activities, the risk of mixing GLOBALG.A.P. certified with non-certified product is covered through criteria that includes proper identification of incoming products, identification and confirmation individually of their certified status through the GLOBALG.A.P. Number – GGN. Mass balance calculations enter into the evaluation of the inspections to record the estimated outcome in tonnage, following appropriate yields and support the confirmation of non-mixing products. When these activities are performed by different legal entities of the farm, the risk of mixing products criteria is called Chain of Custody. GLOBALG.A.P. Risk Assessment on Social Practice – GRASP Good Aquaculture Practice is not just about production process; it’s also about people. That’s why GLOBALG.A.P. members developed GRASP, a GLOBALG.A.P.+ Add-on product.  It is a voluntary ready-to-use module developed to assess social practices on the farm, addressing specific aspects of workers’ health, safety and welfare. It is designed to extend the social standards of the GLOBALG.A.P. certification and measures can be assessed together with the GLOBALG.A.P. audit. A GRASP-trained GLOBALG.A.P. auditor or inspector conducts the GRASP assessment of the production facilities. The assessment results are then uploaded to the GLOBALG.A.P. Database, showing the level of compliance, and are then visible to industry supply chain partners and buyers who have been granted access. GRASP helps producers establish a good social management system on their farms. It offers buyers added assurance. And it helps protect one of the farm’s most important resources: it’s people. Figure 2 GLOBALG.A.P. Aquaculture holistic approach Holistic Approach GLOBALG.A.P. Aquaculture certification is linked to the scientific name, reducing  the risk of mislabeling. Current species certified worldwide (update Aug13): - Atlantic salmon  [Salmo Salar]- Barramundi [Lates calcarifer]- Coho salmon [Oncorhynchus kisutch]- European seabass [Dicentrarchus labrax]- Gilthead seabream [Sparus aurata]- Meagre [Argyrosomus regius]- Nile Tilapia [Oreochromis niloticus]- Pangasius Basa [Pangasius bocourti]- Pangasius Tra [Pangasianodon hypophthalmus]- Rainbow trout [Oncorhynchus mykiss]- Red Porgy [Pagrus pagrus]- Salmon trout [Salmo trutta trutta]- Sharpsnout Seabream [Diplodus puntazzo]- Turbot [Scophthalmus maximus]- Whiteleg shrimp [Litopenaeus vannamei] The certified species above mentioned can be found in 29 countries (update Aug13): Certification map In order to comply with the full production chain, the offer of Compound Feed GLOBALG.A.P. certified can be found currently in 16 countries (update Aug13): Brazil; Chile; Denmark; Ecuador; Faroe Islands; France; Indonesia; Italy; Honduras; Malaysia; Norway; Peru; Spain; Thailand; Turkey; Vietnam. The coverage of the full production chain reduces the risk overall of the lack of traceability. Management of risks is a day-to-day learning process and feedback from the field in terms of implementation of the standard and interpretation by the third party audits are constantly taken into consideration in order to provide improvements to the standard thus promoting continuous improvement in the management practices overall, including risk management. For developing countries, GLOBALG.A.P. certification system has proven not to be a trade barrier. Even if it could be considered stringent when compared to local legislation, developing countries have proven able to implement responsible practices and risk management requested through the standard. This last is used as a guide for responsible production processes practices. Source - FARMD
14.10.2020

Agricultural insurance from an Asian perspective: pathway to productivity

Agriculture is a high-risk sector. Farmers in Asia must cope with severe droughts, floods, typhoons, frosts/freezes, and other events that are increasing with climate change. The coronavirus pandemic brought an additional dimension to farmers’ risk exposure and endangered food security. Within a holistic risk management system, agricultural insurance plays an outstanding role. It mitigates the consequences of unpredicted losses, smooths income volatility, protects farmers from bankruptcy, and leads to improved productivity. It also helps to achieve the UN Sustainable Development Goals (SDGs). Agricultural insurance systems are not equally developed throughout Asia. Some countries like India, Japan, the Republic of Korea, the Philippines, and Turkey have undergone a long evolutionary process to establish efficiently functioning systems with significant market penetration. Other countries, particularly island nations, are still in the relatively early stages of agricultural insurance development. Agricultural insurance in Asian countries operates in the form of public schemes or public–private partnerships (PPPs). In other countries outside Asia, e.g., Australia and South Africa, agricultural insurance is operated as a purely private system. In Asia, governments subsidize insurance premiums and provide regulatory support, sometimes with coverage of catastrophic losses. Best-practice examples of public schemes are observed in Japan and the Philippines, and those of PPP in Turkey. Agricultural insurance has limitations and should be utilized as only one element of a broader holistic risk management strategy. The successful development of agricultural insurance requires substantial government commitment and investment. However, this investment will ultimately result in improved agricultural productivity, increased farmers’ resilience under adverse circumstances, stable national food security, and meeting the SDGs. BACKGROUND General overview of Asian agriculture In many low- and middle-income countries in Asia, agriculture continues to be an extremely important sector that contributes significantly to GDP while meeting basic needs for food and material. Agricultural operations in Asian countries are generally small scale and intensive with a high proportion of irrigated cropping in the winter dry season and monocrop cultivation of paddy rice throughout much of South Asia in the summer monsoon season. The livelihoods of many of the poorest households in the region are supported by off-farm employment and income that act as a buffer in the event of major catastrophic events (typhoons, floods, or tsunamis). Remittances from abroad are also very important in some Asian countries such as Bangladesh, Indonesia, Nepal, the Philippines, and Thailand. Agricultural productivity The agricultural industry worldwide is becoming more technological and input/outcome efficient. This trend includes adoption of precision farming, remote-sensing technology, and digital decision-making tools as well as the use of new, more resilient and productive seed varieties and other inputs. In some countries, small farms are merging into larger production units. Farm size matters. At the beginning of the growing season, farmers must invest in purchases of seeds, fuel, fertilizers, etc. Poor small farmers in Asia generally choose low-priced input supplies (seeds, fertilizers, etc.) of correspondingly lower quality. The final crop productivity outcome will also be marginal. While small farmers achieve average wheat or rice yield levels of 2 t/ha, larger, more sophisticated holdings can expect much higher potential crop yields of 9 t/ha for wheat and 6 t/ha for rice. The same holds true for dairy farming: differences in the milk yields between small and large operations can be as much as 5-fold. Low productivity only enables farmers to cover their initial investments (or production costs) but does not provide a sufficient margin for a decent life throughout the year until the next season’s harvest. Thus, farmers living on the edge of basic survival obviously do not have the resources to modernize their operations or to cope with unexpected disasters. In other words, they have little resilience in the face of adverse circumstances. Farmers’ risks The agriculture sector has always been prone to an astonishingly wide range of risks. Those risks potentially affect almost every aspect of their well-being: productive capacity; property and possessions; life and health; and financial future. The main category of risk is weather related such as droughts, hailstorms, floods, high winds, storms, and heavy frosts and freezes. When those weather events reach extreme magnitudes, they fall into the category of catastrophes, along with earthquakes and volcanic eruptions, for example. Climate change is increasing such risks in the form of later spring frosts, prolonged droughts, and heavier rains. Most farmers are aware that the weather patterns observed today were not seen even 10 years ago. The new climate also increases outbreaks of pests and diseases. As a result of all these, farm incomes have become more volatile and farmers more financially vulnerable. Agriculture in the Asian region is regularly exposed to major climatic risks such as typhoons, floods, droughts, and tsunamis. In the most northerly territories (e.g., Japan, Mongolia, and Nepal) agriculture is also at risk due to hail, frosts and freezes, and snowstorms. Other common risks faced by farmers are more sporadic and individual like fires or machine-related accidents, livestock loss, or personal injury/disability as a consequence of accident or disease. Disease outbreaks on neighboring farms or in the surrounding area are also potential causes of significant loss. Marketing-related risks include fluctuations in commodity prices and fuel and other input costs. Farmers may also be forced to cope with political risks when, for example, the government changes agricultural regulations or policies resulting in decreased subsidies or increased taxes. Some risks can cause income fluctuations, others lead to total income loss, and significant widespread risks like prolonged droughts or powerful typhoons lead to asset loss. For example, in case of severe drought and lack of financial resources for alternative animal feed, farmers are forced to sell their livestock and thus lose assets that could ensure sustainability. The COVID-19 pandemic The current coronavirus (COVID-19) pandemic is endangering agricultural production and threatening the food security of every country. This situation is especially difficult in Asia with its preponderance of low/middle-income farmers. Since April 2020, in addition to the usual natural disasters, farmers have faced substantial disruptions in agricultural value chains: markets where they sell their products have been closed; and roads and other transport modes have been shut down, with trucks filled with agricultural products abandoned in the middle of highways in some cases. Farmers could not hire the usual temporary labor for harvesting. While people were required to self-quarantine in isolation, farmers still had to tend their fields/gardens, potentially endangering their own and their families’ health. Input suppliers increased the prices of their products, and traders could not reach farms to buy produce. As a result, many farmers are now in dire financial straits and require external support in order to continue production in the next season. Risk management Farmers must rely on a wide range of strategies to manage risks in agriculture. One good strategy is operation and income diversification, sometimes known as farm fragmentation. Since agricultural production is always risky and farmers’ incomes always fluctuate, generating income streams from unrelated activities is beneficial. This can take the form of planting different types of crops (for example, field crops and orchards), balancing between crops and livestock, or supplementing primary production with food processing. Where farms are generally small, off-farm income sources are sometimes even better alternatives. When it comes to financial/market risks, good mitigating tools are hedging and futures. These financial tools can protect farmers from significant commodity price drops. However, hedging and futures remain more suitable for larger, more sophisticated farming operations than for family smallholdings. Crop modeling is the prediction of future yields based on weather forecasting, soil conditions, and crop variety. It helps farmers make the right agronomic decisions leading to the optimization of inputs and maximization of yields. Maintaining farm health and safety include fire and disease prevention measures. These contribute simultaneously to the health of plants, animals, and humans. However, informal or farm-based measures cannot provide protection against severe threats like typhoons, floods, tsunami, and droughts. Such disasters require market-based, institutionalized protection mechanisms like insurance, hedging, and government assistance. AGRICULTURAL INSURANCE: A MARKET-BASED TOOL FOR RISK TRANSFER Functions of insurance Insurance transfers risk to a professional carrier, i.e., an insurance company, which charges a fee for assuming it. Risks that cannot be overcome or avoided by individuals and could potentially cause devastating losses should be insured against. In the rural sectors of many countries, insurance is commonly linked to bank credit. In those cases, insurers pay compensation directly to banks to cover yield or livestock losses experienced by farmers who are insured, wiping out their debts to the banks. Generally, agricultural insurance has the following functions: protecting investments;reducing the severity of losses or mitigating the financial impact of losses on farmers;smoothing income volatility;allowing investments in new technology, thus improving productivity;reducing poverty; andprotecting against bankruptcy, which in some cases means saving lives (for example, preventing the all-too-common suicides of Indian farmers faced with total crop losses due to drought).Agricultural insurance can also help nations meet the SDGs by: increasing productivity;improving livelihoods;enhancing the resilience of farmers and communities in adverse circumstances; andadapting to new challenges like climate change or pandemics.Agricultural insurance enables farmers to remain creditworthy even in years of major crop loss and thus avoid falling into the poverty trap. Generally speaking, agricultural insurance can save farmers from bankruptcy and governments from default. It plays an important role in reducing the vulnerability of the national food system to acute shocks, subsequently contributing to resilience and sustainability. Agricultural insurance in Asia The Asian region contributes around 20% of global agricultural insurance premium payments. PR China, India, and the USA are the world’s three largest markets. Agricultural insurance systems in Asian countries differ and include public or PPP programs. Several countries have a long history of public-sector crop and/or livestock insurance, e.g., India, Japan, the Republic of Korea, and the Philippines. Their public-sector programs target small and marginal farmers and are heavily subsidized. In Japan, agricultural insurance dates back to 1929 and its national cooperative agricultural insurance system receives major financial support (subsidies) from the government. Approximately nine million crop and livestock insurance policies are sold each year in Japan, with the agricultural insurance premium volume reaching over USD1.3 billion. Other countries have introduced crop insurance rather recently, i.e., over the past 15 years. This includes Turkey, Thailand (since 2007), Nepal (since 2009), Indonesia (since 2010), and Vietnam (pilot tested since 2008). The Pacific Island nations are not well served from an agricultural insurance perspective, since very few currently have any form in spite of their very high exposure to natural hazards (typhoons, flooding, tsunami, and El Niño/ENSO-related droughts). Existing programs include both traditional and index insurance coverage, with the traditional form more prevalent. Weather index insurance was first introduced in India in 2003 and has reached commercial scale, while the Philippines adopted some weather-based index products for specific crops. Other countries are experimenting with attempts to develop and implement index coverage. Mongolia has an unprecedented livestock index insurance system. In all Asian countries, central governments play crucial roles in establishing and supporting agricultural insurance schemes. The most common form of state support is insurance premium subsidies as provided by governments in India, Indonesia, Japan, the Republic of Korea, Pakistan, the Philippines, and Turkey. In startup situations, where there is currently no agricultural insurance supply, governments can play a very important role in creating the necessary infrastructure, including: establishing and overseeing the legal and regulatory framework; enhancing weather station infrastructure and related data and information systems; carrying out insurance product R&D; and arranging education, training, and capacity building for insurers, distributors (banks, microfinance institutions, input suppliers), and farmers. In some situations, it may also be cost-effective for governments to provide high-level catastrophe reinsurance protection. PPP schemes in India India has a huge number (approximately 120 million) of smallholder farmers. Their usual risks are low rainfall, price volatility, very unstable income leading to high debt, water scarcity, and limited access to resources and healthcare. Other problems arise from natural disasters and biological factors. The COVID-19 pandemic made life even more challenging for Indian farmers. Due to quarantine restrictions, they could not hire seasonal workers for rabi (crops sown in winter and harvested in spring) seasonal harvesting and were unable to sell or deliver their products to final markets. They simultaneously experienced losses from hurricanes and locust outbreaks in some regions. Since 1979, India has had a subsidized public-sector area-yield index multiple-peril crop insurance (MPCI) scheme in place. In 1985, the Comprehensive Crop Insurance Scheme (CCIS) was introduced. The CCIS was replaced by the National Agricultural Insurance Scheme (NAIS) in the 1999/2000 rabi season. In 2002, the Agriculture Insurance Company of India Limited (AIC), a specialist public-sector crop insurer, was formed by the government. Private insurers started to enter the agriculture insurance business in 2001. The system that exists now was launched in 2016. Named after the Prime Minister of India, the Pradhan Mantri Fasal Bima Yojana Program currently generates around €3.5 billion in insurance premiums covering around 50 million farmers. However, the Indian government has a strategy to increase the market penetration. At its core it is a type of area yield index insurance with pricing and loss adjustment based on crop cutting experiments (CCE). The current program covers only crops but not livestock. The frame insurance terms and rules are defined by the government, partly at federal and partly at state level. State and private insurers are invited to participate in state tenders in order to receive regional allocations where the insurance is sold. Currently, 18 insurers participate in the program. The state subsidizes the insurance premiums, making prices affordable for farmers. In instances of devastating losses, the state provides reinsurance to insurance companies. The premiums are partially reinsured by the national company GIC, and the remainder by international reinsurers. As with any insurance program, India’s has its challenges: 60% of crops are still not insured, especially high-value ones; livestock is not covered by the subsidized program; and the way government tenders are made creates a certain amount of volatility in insurance portfolios, meaning that insurers experience problems with reinsurance placements. Public program in the Philippines The Philippines is home to 5.2 million smallholder farmers. Each year, an average of 22 typhoons hit the country, some of which cause devastating destruction to agriculture. Crop insurance was first introduced in 1978 with the formation of the Philippines Crop Insurance Corporation (PCIC). The PCIC is 100% owned by government entities and subject to legislation and regulations. The central government financed the PCIC’s startup costs, and its main ongoing support for agricultural insurance is through premium subsidies for the PCIC’s main lines of rice and corn insurance. The PCIC offers comprehensive insurance programs for crops, livestock, fisheries, credits, and properties or assets owned by farmers for which the premiums are fully subsidized. Many of those agricultural insurance products are index based. The levels of customer service provided by the PCIC continue to be recognized as excellent. The two main insurance lines are MPCI policies for palay (rice) and corn, which account for the majority of PCIC premium income. Coverage includes losses due to natural calamities and pest and disease outbreaks. The main causes of loss are typhoons, floods, and drought. Pests and diseases are also significant factors contributing to claims filed. The PCIC also offers high-value commercial crop insurance as well as life and accident insurance to individuals or linked to loans from financial institutions to farmers and fishery workers. Recent success in Turkey Traditional agricultural insurance began in Turkey in 1957, but only 0.5% of agricultural areas in the country were insured before the state underwriting agency TARSIM was established. The previous situation was considered too unstable to serve as an effective platform for further development. In 2005, the Agricultural Insurance Act was passed allowing PPPs in Turkey’s agricultural insurance sector. Following the Spanish model, there are three key elements in the system: 1) mechanisms for public–private dialogue; 2) continuous updating of insurance contents; and 3) development of policy tools for dialogue with the government. Currently, Turkey has a robust PPP system of agricultural insurance offering products on crops, livestock, greenhouses, and aquaculture with total insurance premiums of more than €230 million and around two million policies issued yearly. It is managed and administered by TARSIM. Insurance covers such risks as hailstorms, floods, storms, whirlwinds, fires, earthquakes, landslides, and frosts/freezes for crops and all mortality risks for livestock. The levels of risk vary considerably by region, by type of farm, and by size of operation due to the different topographies and climatic conditions prevalent in different parts of Turkey. TARSIM therefore offers variable insurance rates depending on geographic location and risk zone. Twenty-four insurance companies participate in the program and cede the collective risks to the TARSIM pool, which in turn obtains reinsurance. TARSIM develops and provides the insurance rates, underwriting guidelines, and entire loss-adjustment infrastructure. Due to its systematic, scientific approach, the Turkish agricultural insurance portfolio has demonstrated stable profitable growth over the last 14 years. Despite being a relative newcomer to the global agricultural insurance market, TARSIM has assumed the role of a knowledgeable leader that shares its experience with governments and experts in other countries. Limitations of agricultural insurance Policymakers and end users often perceive insurance as a universal remedy for all problems. However, it is not a panacea and cannot replace a holistic risk management system. Agricultural insurance also has limitations and can only address some of the multiple risks the sector faces. Agricultural crop insurance is a restricted instrument that addresses only production and yield losses due to weather, natural, and (occasionally) biological risks. Crop insurance provides limited coverage from the time of sowing/planting, to the occurrence of emergencies, to completion of harvest. It does not, however, usually cover downstream sources of risk including postharvest storage losses or market price fluctuations. Agricultural insurance usually does not cover risk from the ground up, as there is always a mechanism of self-retention in the form of deductibles. Farmers are responsible for controlling this self-retention mechanism through improved farm management. Insurance covers the risk in the middle. When the risk reaches a substantial level, insurance may no longer be helpful. At that level, farmers need to seek government support or resort to another strategy. Recommendations Systems of agricultural insurance are not equally developed throughout Asia. While some countries like India, Japan, the Republic of Korea, the Philippines, and Turkey have completed evolutionary processes and have systems in place which operate more or less efficiently, other countries need to enhance insurance product development, sales intensification, and/or capacity building for national stakeholders. The key factor in the success of agricultural insurance is government commitment, as confirmed by the examples of the Philippines and Turkey. Clear government commitment and motivation also foster motivation among insurers and the insured to participate in agricultural insurance programs. It is a good practice to set up a national database that clarifies the extent of risk potentially affecting agricultural operations and how that affects decisions by stakeholders. When feasible, PPP agricultural insurance systems with responsibilities shared between public and private institutions are recommended. Within PPP systems, governments can provide support in the form of appropriate regulations, insurance premium subsidies, and backup for catastrophic losses. Another good practice is investing in capacity building or education and innovative technologies. Such investments will ultimately improve agricultural productivity, increase farmers’ resilience in adverse circumstances, ensure national food security, and help meet the SDGs. Authors: Shaikh Tanveer Hossain Olena Sosenko Material provided by:Agriculture Division, Asian Productivity Organization (www.apo-tokyo.org)

15.08.2019

USA - FCIC crop insurance report for 2016-2019

Federal Crop Insurance Corporation Summary of Business Report for 2016 through 2019. Includes the most current information on countrywide area insured, total premiums, subsidies, indemnities paid, etc. Source - https://www3.rma.usda.gov

05.01.2017

Robots and the future of agriculture: Australian experience

An element of automation already exists in many areas of agriculture. Precision agriculture, autosteer and controlled traffic farming are technologies enabled by global positioning systems (GPS). GPS is already the norm on many farms. Applied to traditional farming equipment such as tractors, harvesters, ploughs and sprayers, it has enhanced labour efficiency and helped curb costly waste by enabling large-scale crop farmers to harvest and spray fields with pesticide and herbicide with centimetre accuracy. Robots are the next step, using these and other new technologies in combination with remotely-sensed data, to support new levels of decision making and assume some traditional farmer roles. Robots that can plant, fertilise, spray, weed, monitor and, ultimately, harvest, pack and transport crops will inhabit the countryside. While the drones hum overhead other remotely controlled intelligent surface, robots will be able to inspect and herd farm animals[1]. Robotic platforms[2] Earlier this year at a commercial vegetable farm in Cowra, the ACFR (Australian Centre for Field Robotics) unveiled one of its latest agbot creations, the Ladybird, a sophisticated autonomous robot powered by solar energy that is capable of undertaking a variety of monitoring and evaluation tasks. It's also an efficient killer: as it slowly wheels its way around a paddock it can locate and eliminate individual weeds by means of a targeted sprayer. Machine is equipped with sensors for measuring vegetable growth, and for the detection of animal and plant pests. It has a robotic arm that can remove weeds and potentially harvest vegetables. But Ladybird is just one of many robotic platforms under development at the Centre, including a variety of drones and a pair of autonomous rovers christened Mantis and Shrimp.   These vehicles are excellent, particularly for tree crop applications. The robots are equipped with a whole number of different sensors that really span across the electromagnetic spectrum, using lasers to build three-dimensional pictures of the world. ACFR uses these in tree crop applications where the robots can drive themselves up and down the rows of an orchard, and using all of these sensors it can put together a really complete picture of the trees and how they are growing. ACFR can automatically detect and count flowers and fruit, and give maps of that information to growers. That information turns out to be really useful for a decision support capability. Growers can look at the information covering their orchard and they can identify trouble spots and work out how to address those problems so that they can get really the maximum output from their acreage. There are also major environmental benefits to be had from agbot use through a reduction in herbicide usage. Because agbots like Mantis, Shrimp and Ladybird adopt a targeted approach to weed destruction, the overall use of agricultural poisons can be significantly reduced—by up to 40 per cent. And with weeds in Australia developing a chemical resistance, a new emphasis on the use of microwave technology for weed control could potentially replace herbicides altogether. It's not unreasonable to imagine that in the future with technology like this you might actually be able to have mainstream organic produce that is actually farmed at the kind of scale that the current non-organic crops are farmed at. Swarmbot[2] The use of small-scale robotics also opens up the possibility of increasing the overall amount of productive land. SwarmFarm has been developing a small robotic weed-killer called Swarmbot. The robot isn't much to look at - it's a fairly simple metal platform on wheels - but like Ladybird, Shrimp and Mantis, its simplicity belies its sophistication. It's about lightweight machines that can travel very slowly down to a crawling speed, even stop at individual plants and go and intervene and manipulate those plants. In some cases the actual speed of the vehicle, of the robot, may be a lot slower than the speed of the full-sized tractors, but then you make up for that in terms of the fact that it can run overnight and also the fact that you can scale up or scale down these systems based on how many of the individual smaller platforms you have. Aerial robots[3] Another approach to counter the drawbacks of large tractors is to employ small aerial robots equipped with sensors. Although large manned aircraft may be cost prohibitive for routine information gathering, small autonomous platforms have strong potential. ACFR has completed several projects where they developed and demonstrated aerial robotic systems for weed maintenance in an environmental monitoring context, including aquatic weeds such as alligator weed and larger woody weeds such as prickly acacia. Examples of the some of the robotic platforms used are shown in Photos below. In these projects, the idea is to locate sparse concentrations of weeds that exist in large areas, and then to deploy herbicide locally and in a targeted manner. Weeds are automatically identified using classification algorithms that operate on visual imagery collected by the aerial robots. Herbicide can then be delivered manually or via a specially equipped robot. In the broadacre context, this type of approach can complement ground robot systems by rapidly finding concentrations of problem weeds that can then be efficiently targeted by the ground robots on an as-needed basis. Robotic aircraft used in large scale farm enterprises for detecting weeds (top), and an example of a small robotic aircraft for doing the same thing but in small scale applications (bottom). Robotic milking systems[5] Automated or robotic milking systems address the twin challenges faced by dairy farmers of labour intensity and labour shortages. Automation reduces the need for people to be present during milking, providing additional time and flexibility to focus on other areas of farm management. Robotic milking systems use sensors and a camera or laser-guided milking cups to guide a robotic arm to the udder, clean the teats and attach milking cups. When milking is complete the cups are removed automatically. Additionally, each cow may be fitted with a transponder, which registers the animal as it enters the dairy and collects data enabling milk production, milk quality and herd health to be monitored. In Europe, manufacturers of automatic milking systems predict that by 2025 almost half of the herds in leading dairy countries, such as Denmark and the Netherlands, will be milked by robots. Robotic dairies, with varying levels of automation, have been available commercially in Australia since 2001. However, Dairy Australia believes adoption has been slow due to a lack of long-term performance information about robotic dairies in Australian pasture-based systems. While the cost of installing a robotic dairy is similar to installing a conventional dairy, the outlay remains significant and likely not warranted if an existing dairy is still functional and suited to the scale of the farming operation. Agbot II[4] The Queensland University of Technology (QUT) has designed and built a robot that could save Australia’s farm sector $1.3 billion a year by slashing the costs of weeding crops by as much as 90%. This fully-autonomous agricultural robot, developed with support from the Queensland Government, is called Agbot II. Agbot is equipped with sensors, software and other electronics that allow it to detect and classify weeds and then kill them either mechanically or chemically. In future versions, the robots could also feed back data on such things as soil and crop health and the state of diseases as they conduct their operations. This would enable better management decisions driven by paddock specific real-time information. To date, Agbot II is concentrated on the three weeds that are relevant to Queensland: volunteer cotton, sow thistle and wild oats, and the vision system operated with 99% accuracy in the classification of the correct species based on the images collected by the robot cameras. The light weight of AgBot II, which is about 600kg, will help reduce soil compaction that affects the yield by limiting the root development of the crops. Also due to weight, the robots can be deployed faster onto fields after rain to keep a tight control of weeds before they drop their seeds. AgBots are also designed to work in groups, which increases the reliability of weeding operations. If one robot has a problem and fails, the others continue operating. Another important characteristic of the Agbot ll is that it is solar powered, which makes it eco-friendly and easier on the farmer’s budget. Challenges for adoption[5] The main challenge to the adoption of robots in Australian agriculture is the fact that the technology is not sufficiently advanced for widespread uptake. In 2016, most agricultural robots for operation on individual farms are still in the trial or proof of concept stage. The Queensland University of Technology identified four general barriers to widespread adoption of robots in agriculture in 2014. Technology — Most agricultural robots are working in trial situations where they have continual access to technicians and engineering support. The challenge is to build a robot for commercial operations that is reliable and robust, simple enough to operate and low cost. A lack of coordinated data and standards may also prevent on-farm adoption, and there is a need for robots to be able to operate across multiple hardware and software platforms. Regulation and certification — Protocols for the operation of autonomous robots may need to be developed, particularly in relation to safety on farms. Preliminary regulations for the operation of UAVs have been developed, however ground-based robots have not been included. Including on-farm robotic functions in such regulations may also affect insurance cover and premiums. Business — As at 2016, there is not enough commercial performance data to identify the value or expected return on investment of robotics to Australian farm businesses. Further, agriculture consists of many small businesses with limited access to capital for business development, which may delay the uptake of robotics in the industry. This is in contrast to large mining or stevedoring businesses with financial capacity to invest in research and capital upgrades. The challenge for agricultural engineers is to develop low-cost technology without sacrificing quality or reliability. Legal and socio-economical aspects — Liability for the actions of robots may need to be determined, particularly if robots acting autonomously cause damage to people, property, crops or the environment. The social acceptability of robots in the landscape may also need to be considered. Challenges for the adoption of robots, partially addressed in the list above but likely to be significant, include the robustness of the technology for agricultural applications and the aging target user group. Source - www.agroinsurance.com Based on materials: [1] https://www.theguardian.com/australia-news/2016/jun/04/transforming-the-bush-robots-drones-and-cows-that-milk-themselves [2] http://www.abc.net.au/radionational/programs/futuretense/a-swarm-of-agbots/6968940 [3] https://grdc.com.au/Research-and-Development/GRDC-Update-Papers/2015/08/Agricultural-robotics-what-could-future-farming-mechanisation-look-like [4] http://www.australianmanufacturing.com.au/41381/new-agricultural-robot-could-save-australias-farm-sector-billions-of-dollars [5] Rural Industries Research & Development Corporation publication no. 16/033, Robots, 2016

04.11.2014

The Evolution of Risk Management in Aquaculture: The Case of Insurance

Sunderland Marine Mutual Insurance Company Ltd (SMMI) has been insuring aquaculture operations since 1986.  To assist the underwriting team and to provide risk management assistance to its Members, the in-house technical service of Aquaculture Risk Management (ARM) was also established at the same time.  The core thinking behind this development was to actively risk manage aquaculture operations by conducting site visits, for the benefit of both the Insured and Insurers.  A survey of the production facility is crucial in order that we can understand the operation and therefore be in a position to offer pertinent advice. The Surveyors who are based in the UK, Ireland, Canada, Chile and Australia undertake regular visits to every insured.  Since the underwriting of aquaculture risks commenced, ARM have clocked up over 6,000 site surveys, the majority of which have been to producers of Atlantic salmon. In the early days of SMMI’s involvement in aquaculture, Surveyors were assisting in the development of a burgeoning industry and providing help with site specific problems.  The industry in Scotland and Ireland was typified by a large number of small owner/operators and ARM would provide assistance with cage and mooring issues for example, and sometimes even lend a hand to mitigate and clear-up mortality events when farmers were short-staffed.  The site specific problem is relatively simple to detect and apply appropriate measures to ameliorate or prevent a recurrence. With the globalisation of the salmon industry, now run by a comparative handful of operators, coupled with the development of the technology and infrastructure used, the Risk Manager’s role has altered to take into consideration issues on a regional, national and sometimes international scale.  This change from being very hands-on to a more research or investigative approach over the past 10 years or so has meant that ARM have had to augment its risk management discussions from individual farm managers or owner/operators, to now include the production and technical divisions of farming companies, or even Head Offices. Not only is it important to investigate significant stock losses, but also to look at the near-misses.  Information from these events can provide valuable clues to potentially avoid an expensive mortality in the future.  All the information from surveys, claims and losses is analysed and mapped.  From this data our experience shows that events are now just as likely to affect regions as individual farms.  With this in mind, ARM has instigated Event Risk Management to bring together risk managers, aquaculture companies, brokers and experts such as veterinarians, epidemiologists, academics or engineers to discuss these potentially large events, which can cause significant mortality over a wide geographic area. Examples of risk management assistance provided to Policyholders in recent years include: - Investigations into feed constitution after suspicions that variable feed quality was causing developmental problems - Analysis of containment net integrity - Promotion of Integrated Pest Management Strategies - The exchange and dissemination of information.  The Identification of “centres of excellence” to provide assistance or training for our Insureds on specific problems - Development of bloom monitoring and mitigation techniques - Provision of assistance to Policyholders where civil engineering projects have altered, or have the potential to alter water quality parameters - Provision of emergency assistance to Insureds experiencing acute problems in hatcheries - Technical input into a project to assess a novel platform for the production of seaweeds The higher prices obtained for salmon in recent years have resulted in significant investment in infrastructure, enabling the farming companies to supply similar cages, nets and moorings, to all farming regions.  This standardisation has the advantage for companies and Risk Mangers that lessons learnt in one part of the world can be applied to other areas and this sharing of knowledge and experience has been an important factor for the industry’s development in “new” locations; it is very uneconomic to re-invent the wheel. The task of the aquaculture risk manager has evolved over recent years from being almost a supplemental farm manager for an individual site, to a global researcher.  This reflects the maturing of the Atlantic salmon farming industry into a highly sophisticated, efficient and scientifically-minded operation.  The development of Atlantic salmon farming has not been alone during this time. Lessons learned, information gathered and contacts made from the establishment of ARM in 1986 have been used to risk manage farms producing sea bass and sea bream, tuna, trout and abalone to name but a few.  The core themes of the risk management procedures developed from the early years of ARM, of communication, observation and assessment have been crucial to provide effective risk management which has helped to deliver solutions to problems encountered for other farmed species around the world. Source - FARMD

04.11.2014

Risk Management in Aquaculture: Case Study of Haiti

Experts have always considered the vast oceans as our salvation with respect to food problems and increasing world population, merely because of their immensity. However, open seas (about 90%) are biological deserts. The main active areas (the remaining 10%) are: (1) the estuaries that act as traps for nutrients entering from freshwater flow, (2) upwelling areas where deep, cold water rich in nutrients is brought to the top and (3) waters overlying the continental shelves. Ac- cording to J. Matthew Roney (Earth Policy Institute , 2012), the United Nations Food and Agri- culture Organization (FAO) projects that harvested fishery products from all ocean waters will fall below 90 million tons in 2012, 4 percent below the all-time peak haul of nearly 94 million tons in 1996. Wild fish catch per person has dropped from 17 kilograms in 1998 to 13 kilo- grams in 2012, the lowest in 37 years. This follows an earlier report by FAO  stating that 80 percent of fish stocks are either fully exploited, overploited, or have collapsed. Though a catch reduction of 20 to 50 percent is needed to make global fisheries sustainable, the demand for fish is expected to increase by 35 million tons by 2030 due to increased consumption and a “rapidly increasing human population.”     Aquaculture (the husbandry of aquatic food organisms) has been seen as the solution.  Global production of fish, crustaceans, mollusks and other aquatic animals has seen a steady increase for the past forty years reaching 148.5 million tons in 2010.  The industry has shown a strong growth of 6.3% since 2001 from 34.6 million tons to 59.9 million tons in 2010, netting nearly USD120 billion for that year.  However, with success comes tremendous risks and managing these risks is critical for continuing success.  Risks in aquaculture, as it is the case for agriculture in general, include disease, poor product quality, competition, equipment failure, and, of course, natural disasters.  The fundamental question that we all ask ourselves is How do we manage risk?  The USDA Risk Management Agency (RMA) defines risk as “the chanceof something bad happening” and chance implies a degree of uncertainty.  That uncertainty has been a key factor in limiting investments in aquaculture in underdeveloped countries in Africa and other parts of the world.   How do you manage risk? Case study of Haiti Risk management is about reducing the cost of risk.  In relative term, it is about “losing less money as compared to losing more money”.  Since the cost of money is higher in developing countries because of high interest and inflation rates, understanding risk management becomes paramount for successful aquaculture operations.  To understand risk, one needs to understand three important concepts: 1) Awareness of the risks; 2) Understanding of the benefit of a sound risk management plan, and 3) understanding of the likelihood and severity of possible loss due to risk. Haiti, also known as the Republic of Haiti, is a Caribbean country. It occupies the western, smaller portion of the island of Hispaniola, in the Greater Antillean archipelago, which it shares with the Dominican Republic.  Haiti, with a population of over 10.4 million people, is the poorest country in the western hemisphere. Aquaculture is not well developed because of the lack of private investments in the sector.  Most aquaculture programs are run by missionary groups and non-government organizations.  For the past five years, the Haitian government and a portion of the International community have multiplied their efforts to attract private investments in the aquaculture sector which, surprisingly enough, offers excellent opportunities.  Understanding and managing risks can foster further development in the sector, generate thousands of jobs and create economic opportunities for millions.     Awareness of the risks:  A person investing in aquaculture in Haiti should be aware of the uncontrollable force of mother nature.  Hurricanes and tropical storms go through the country each year from June to November and cause substantial damages.  The prime risks are flooding and physical damages to production facilities.  Flooding can also introduce pathogens and cause great changes in water quality.  In 2008, after the passage of tropical storms Fay, Gustave, Hannah and Hurricane Ike, over 70% of production facilities were destroyed.  Viral and bacterial diseases were observed in ponds right after the passage of these storms.  Aside from production risks, producers also face marketing risk, often associated to species and are system specific. Marketing risks include product pricing, access to market due to difficult road conditions, competition not only against seafood imports but also against other commodities such as poultry, beef and pork.  Finally, everlasting land tenure issues can also hinder aquaculture development in the country.  Production and marketing risks can result in substantial financial losses. Understanding the benefit of a risk management plan:  Large corporations have long understood the benefit of sound risk management plans.  However, in small countries like Haiti where most operators in the aquaculture sector are small, often uneducated, farmers, understanding risk management and elaborating risk management plans are completely alien concepts.  Investments in aquaculture are often on the basis of poorly designed “projects”.  Preliminary studies are not usually done to assess the risks and risk management plans are simply ignored. Understanding the likelihood and the severity of potential losses: That concept becomes important since financial resources are limited.  Most producers never recover from losses because they simply do not have the money to start all over again.  Access to loans, especially in the agricultural sector, is almost non-existent. The solutions:  A number of options exist to manage risks and many solutions are available, even in small countries like Haiti.  The first one is theinsurance option.  Typically, crop insurance programs are intended to transfer risk from one party to another, generally away from the producer and to the insurance underwriter.  One of the immediate benefits is that insurance companies can afford to commission and elaborate risk management plans, thus responding to the second concept in risk management.  Aquaculture commodity insurance is non-existent in Haiti and even in the United States has not yet become commonplace. The sector, in general, has made it difficult, if not impossible, to develop an affordable insurance product that is appropriate for all species or production methods.  In Haiti, the government is working with institutions such as the Inter-American Development Bank (IADB) and the USG Overseas Private Investment Corporation (OPIC) on programs to provide crop insurance in the agriculture sector in Haiti.  Those institutions can underwrite the premium required by banks or insurance companies.  Whether or not aquaculture will be included remains to be seen.  The second option is to shift the focus from small farmers to corporate ones. Corporate investors are required to compile risk management plans in order to protect their investment and they can afford to pay the hefty insurance premium.  Third, non-insurance optionsmay provide farmers with viable alternatives.  Management of production risks such as disease, poor water quality, environmental degradation and power outages can be accomplished by a number of methods: 1) better training, design and supervision; 2) changing husbandry practices; 3) building redundancy in production systems; 4) improving feeding practices; and finally 5) employing stringent bio-security measures. Source - FARMD

11.10.2013

Risk Management for Smallholders in Aquaculture: The Work of Aquaculture without Frontiers

Aquaculture without Frontiers (AwF) is an independent non-profit organization that promotes and supports responsible and sustainable aquaculture to alleviate poverty and hunger. We do this by teaching aquaculture techniques to the rural poor in developing countries, thereby  improving their livelihoods. By teaching the poor  to farm fish, we are training them in all aquaculture techniques, thereby assisting them to manage various risks that may arise (i.e., over-stocking, poor technical pond construction, inadequate equipment, incorrect species utilization, diseases, climate change and other natural impacts, husbandry methods, lack of adequate logistics, market fluctuations, etc.). One of the most useful resources we have found in our work has been the  use of ‘Farmer to Farmer’ training programs. These activities have proven to be a sound model for us which, with the great assistance of sponsors, enables us to send experienced, skilled and knowledgeable aquaculture farmers from developed countries to engage with the people we are trying to assist in developing countries. This is a double win because as well as passing on their invaluable skills, there is an enormous sense of well-being for the training ‘Farmer’ knowing that he/she has been of assistance to someone who will be able to use the skills gained well into the future – the work can make an enormous difference.     Case Study: Bangladesh The word ‘Monga’ refers to the twice yearly cyclical phenomenon of poverty and hunger that occurs in Bangladesh. Monga happens from September-November (after the main crops are planted) and from March-April. During these times there are fewer available job opportunities for rural workers, resulting in the workers being forced to become migrants and move to more urban areas. Those who cannot migrate can face malnutrition and starvation, as has been cited in Bangladesh’s Poverty Reduction Strategy Paper, and has been the subject of NGO aid programs. Our project covered a total of 111 participants over a 4 year period – all from farms considered marginal at the time. The third year started with 89 farmers in the system, all of whom continued into the fourth year, and they were joined by 22 new farmers for the last year. The main aim was to increase production and provide a sustainable training model. The training is essentially a risk management process as all of the issues it addressed are strategies for various deficiencies that create reduced production and inefficiencies. The new farmers were oriented on fish culture through pond on-site  training.  Farmers are trained on pond preparation, liming, fertilization, feeding, fingerling conditioning, sampling etc. Older farmers also get refreshers by training at the pond site, so that they can also learn about best practice in fish culture. The local Fishery Officers from the Government of Bangladesh also extended support during pond site training and refresher courses. Their participation helped create shared experiences which can be beneficial for future capacity building.     It was discovered during the project that traditional stocking practice allowed for an excess number of fingerlings without maintaining a species combination. The fingerling trader often persuades the pond farmers to over indulge in huge stocking – this is good for the trader as he pockets the extra money for the extra fingerlings sold but can be a disaster for the pond and fish, as getting the stocking density wrong can be a critical factor in the whole production process that can have devastating effects. The project specifically managed the risks of improper pond preparation, improper feeding and fertilization, misunderstanding about sampling in order to adjust production strategies, lack of knowledge regarding annual production cycles, over-stocking and lack of species diversity in ponds. This knowledge is critical for farmers to build sustainability and ensure food security going forward. The funds that were distributed to the project participants were used for purchasing fingerlings, lime, feed and fertilizer. The volunteer farmers assisted the project participants by ensuring that they were educated on maintaining quality of the inputs. In addition to farmers, four fingerling producers were developed through the project and they were assisted and advised to rear over-wintering fingerlings. It is notable that in the finalyear of the project production had increased  to approximately 6100 kg of fingerlings which were sold to the local grow-out and project farmers. The pond farmers themselves were taught to stock large size over-wintering fingerlings as it promotes good growth. This business develops the farmers into good aquaculture entrepreneurs   that then scale up the project and add value by sharing their newly acquired knowledge  with othersand by working as local extension operators.   Project Impact The farmers that engaged in aquaculture were able to cope with Monga by selling fish during those times. Fish culture helped as a source of income when no other alternative source was available. The household fish consumption especially for the children comes from their own pond where saved money enabled them to purchase items from the market. About 82% of farmers from the area were involved with pond cultivation and they continued to produce a range of local vegetables, most of which were used for family consumption with the balance sold in the market to earn money. An added bonus is that fish intake by the families involved with this project significantly increased. The rural poor farming family normally cannot afford to eat fish regularly every week. During the project it was shown that the average fish consumption during the reporting period by those families involved rose to 33.4 kg (current world average is about 18kgs). Their neighbors had also increased their purchasing of fish during harvesting time due to the improved availability. Women and children were encouraged to participate in fish culture activities and this improved the family’s engagement. Conclusion The conclusion of the project highlighted that aquaculture can play a vital role in the  life of the rural poor through utilization of small ponds, which are  sources of income and food for marginal farming families. The families engaged directly in the project obtained a major source of nutrition from consuming the fish, an effect which expanded to positively impact their neighbours as well. This all created confidence towards aquaculture and by developing the risk mitigation strategies and capacity building through strong linkages the project, also created a sustainable approach for aquaculture. Source - FARMD

10.10.2013

The contribution of remote sensing tools to risk management in aquaculture

Aquaculture is a high risk production sector. The industry’s growth has resulted in a concentration of production in key areas, with large loss events a feature of the sector. Insurance, where offered, tends to be expensive and the risk carried by the farmer is significant. New tools available to the farmer and risk professional enable better risk management and facilitate better management practices, codes of conduct, traceability and standard operational procedures. Being able to identify, monitor, and define risk enables the farmer to better control risks facing his operation and can result in reduced insurance premiums and wider coverage. This paper presents a short overview of the state of the aquaculture insurance industry and the use of innovative remote sensing tools for monitoring specific risks related to Harmful Algal Blooms. Introduction Fish farming as a sector is growing massively on a global basis. Aquaculture has an estimated global production value of ?75 billion -with salmon farming having grown 10% year on year for the last 20 years. Wild fish catches have been static for the last 25 years, and the growing shortfall in fish supply must be met by aquaculture. Despite the size of the industry in monetary terms, insurance as a risk management tool has made limited inroads in aquaculture. Industry sources estimate that less than 3% of all aquaculture operations are insured globally. Insurance coverage is primarily focused on large scale professionally managed farms, with typical premiums between 3% and 5% of the insured sums, indicative of insurers’ perception of the risk within this industry. Turquoise swirls in the cool Barents Sea north of Norway are caused by a bloom of phytoplankton   The global reinsurance company Swiss Re recently presented an overview of the major causes of global insurance claims in aquaculture. These are listed in descending order: diseases, storms, algae and jellyfish bloom, equipment failure and ‘super chill’(extremely low winter temperatures leading to freezing of coastal waters). Here we focus on one particular risk, hazardous algal blooms, which severely impact aquaculture. During a bloom, the oxygen content of the surface water is reduced, toxins can be released and direct contact of algae with fish gills lead to high fish mortality or significantly reduced growth. Scientists generally agree that there are three main reasons for the observed increase of algal blooms: 1. global warming (favoring growth of algae)2. increasing run-off of nutrients like phosphates and nitrates into surface water3. introduction of invasive species by ballast water of ships. If a bloom is detected fast enough, farms have a number of measures they can take to mitigate the impact of a bloom including: - stop feeding (encouraging the fish to stay deeper in the water column) - deploying “plastic skirts” or tarpaulins around the cage as a barrier - using compressed oxygen pumps in the cages  and/or pumping up unaffected water from deep under the cage site In a number of major aquaculture producing countries, such as Canada, Scotland, Ireland, Chile, Australia and South Africa the risk of algal blooms near fish farms is significant. Recorded incidents of algal bloom have resulted in losses of tens of millions of dollars to fish farmers and insurers. Example cases of algal bloom damages include an estimated loss to the Southern Chile salmon industry of over US$ 25 million in 2009, a red tide affecting abalone production in Fujian, China with damages estimated at over US$ 35 million in 2012 and a recent 2013 outbreak in Tasmania, Australia with losses for the shellfish industry estimated already at over US$ 20 million. The role of remote sensing in aquaculture for risk assessment and control BlueLeg Monitor and Water Insight of The Netherlands have developed a series of satellite and handheld remote sensing products and services for aquaculture. These enable farmers and insurers to assess the algal bloom risk within an area based on historical data stretching back over 10 years. The historical records enable a baseline analysis to give a good impression of the progressing environmental impact of aquaculture operations.  Additionally, insurers and loss adjusters may also benefit from this and other remote sensing services in evaluating damages. The BlueLeg Monitor system is based on the combined use of optical data from satellites and mobile monitoring instruments giving real time, on the spot data collection. These in situ instruments have been developed both for hand held applications and fixed position use. Satellites monitor large areas (typically in a range of hundreds of kilometers) once per day. Hand held/mounted (WISP) units monitor and assess local water quality at any time during daytime. The data of both systems are interpreted by the same methods and combined to provide very reliable measurements. Current and historical optical measurements can be converted, using state-of-the-art proprietary algorithms, into relevant water quality indicators such as chlorophyll-a, phycocyanine (blue algae pigment), CDOM (colored dissolved organic matter), water transparency (Secchi disk depth) and total suspended matter. WISP monitors are currently being used all over the world, from the Dutch Ministry of Waterways responsible for water infrastructure and water quality and the Amsterdam Water Authority Waternet , through to national environmental institutes such as  the Australian CSIRO and the Finnish Syke, among others. Outlook The growth in aquaculture, with the support from industry participants including insurers, is set to continue, and with it the requirement to grow sustainably. By identifying, monitoring and managing risks, the ability to grow sustainably increases, thereby benefitting all supply chain actors within the industry with support expected to increase as the ability to asses risk improves. Wider applications of remote sensing technology are already assisting other industries to monitor key risks, with terrestrial farming, heavy industry and environmental stakeholders using satellite imaging on a daily basis. Remote sensing of algal blooms  and the monitoring of these events on aquaculture operations globally is an important tool improving risk assessment and management in aquaculture. Source - FARMD

10.10.2013

Risk in Aquaculture: The Rise & Demise of a South African Commercial Shrimp Farm

Introduction Amatikulu Prawns (Pty) Ltd operated as a commercial shrimp farm between 1989 to 2004 when market forces made producing shrimp unviable and the farm closed. The farm established the technical requirements from the existing scientific literature, consultancy, training courses and visits to other commercial farms. The farm had two sites (10 Ha and 24 Ha), two hatcheries, a HACCP certified processing plant and a feed mill. The Site The Amatikulu Prawn Research Unit was associated with “prawn” culture research and development (In South Africa, the term “prawn” is used for shrimp). During the 1970's work was funded by the Fisheries Development Corporation of South Africa (abolished, 1987), mainly onFenneropenaeus indicus(Colvin, 1975; Read, 1977; Gerhardt, 1978; Emmerson, 1980a; Emmerson, 1980b; Emmerson, & Andrews, 1981; Emmerson, 1983, 1984; Emmerson, Hayes, & Ngonyame, 1983, Hecht and Britz, 1990) and the Giant Freshwater prawn  Macrobrachium sp.  Macrobrachium rosenbergii was imported in 1981 from an aquaculture operation in Mauritius (S. Myburgh, Amatikulu Prawns, pers. Comm.). Amatikulu Prawns (Pty) Ltd was established in 1981, originally with the intent of farming with M. rosenbergii. This initial effort to commercialize the research on freshwater prawn culture was not successful and the company started the commercial production of freshwater ornamental fish.   Setting up... Interest in commercial shrimp farming by the owner, Stephanus Myburgh, led to the basic requirements of shrimp culture being established in 1989. Algal culture and larval rearing trials were undertaken with Penaeus monodon and Fenneropenaeus indicus. In March 1991 the construction of ponds began for a pilot 6 hectare intensive farm; funded by a loan from the Industrial Development Corporation (IDC). By the summer of 1991 the first ponds were stocked with Penaeus monodon. Before starting with the venture a full review of the literature was undertaken. In particular, site requirements (Chiu, 1988), engineering (Bose et al, 1991), maturation and spawning, hatchery and algal production, nursery and grow-out and nutrition and feed manufacture were investigated. During the history of the farm, the author travelled widely in order to increase knowledge and background – this included  visits to Texas  A&M, USA (Shrimp Farming Short Course), Bigelow Labs (algal culture), Taiwan (Tungkang Marine Laboratory and commercial feed (President Feeds, Hanaqua feeds (R. Young, P. Chiang) and hatchery and growout equipment suppliers, (Team Aqua, Nan Rong, Taiaqua Co.  LTD.), Thailand (hatchery (Phuket, Suwannasarn Enterprise (Dawn Suwannasarn)) and growout farms (Nakorn region, Bangkok Aquaculture Farm Co., Ltd (Michael Chen, Han Li-Yu))), Ecuador (hatcheries) (with a consultant Ken Chien) and Hawaii (Oceanic Institute, feed consultancy).  A further 4 ha of grow-out facility was added in 1997. The switch to F. indicus was a commercial necessity due to a deterioration in quality and lowered availability (Envirofish, 2009) of the  wild P. monodon broodstock that were originally used from the offshore  source on Tugela Bank.  F. indicus on the other hand were plentiful, comprising 80% of the catch and spawned easily.   Management moves and world shrimp markets Amatikulu Prawns (Lat: 29° 4'36.04"S; Long: 31°38'46.32"E) took ownership of the neighboring Mtunzini Prawns (Lat: 28°56'58.02"S; Long: 31°46'9.11"E) from the IDC in October 1997. At this time, Amatikulu Prawns comprised of 10 hectares of ponds and Mtunzini with 53 ponds (24 Ha).  Mtunzini had been in operation since 1993 and had its own hatchery that was kept in operation, while the processing and feed production was done on the Amatikulu site. The Amatikulu site had a higher salinity profile (generally over 15 ppt) compared to Mtunzini (generally below 15 ppt). With a dramatic decline in shrimp prices in world markets after 2000, and the fact that the production site was unable (due to seasonal temperature fluctuations) to produce two full crops in 12 months (as were its Asian competitors), expansion to increase scale of production was identified as the only remedy to reduce production costs. Over the following 18 months various investment options were explored, but no further investment or funding was secured, causing the management to close the farm after the June 2004 harvest, as entering the next season would have led to bankruptcy. Aerial view of the Amatikulu Prawns site, 1998 Aerial view of the Mtunzini Prawns site, 2001 Conclusions In the end this farm and aquaculture enterprise failed as a commercially viable concern due to a number of factors, the most pertinent being  fluctuations in global shrimp prices and a production model unable to compete with or adapt and adjust to declining international prices.  Site location, climate and temperature considerations all  reduced frequency of  potential production cycles which led to competitive disadvantages compared to Asian and south American producers, which were further exacerbated by  higher local labour costs. The international price decline in shrimp prices followed the introduction of L. vannamei into China and other countries and is best reflected by the 2013 resurgence to the prices of 1990 that is a result of the emergence of  EMS shrimp disease in these same producing countries. Current market prices have increased following the spread of EMS disease in major producer countries. Source - FARMD