processors from China attempt to gain more control over the sources of their raw materials through vertical integration or business alliance?
Seaweed farming countries have always been eager to extend their seaweed value chains to processing. Given time, profit-seeking entrepreneurs would make this
happen, as long as seaweed processing provided profitable business opportunities. However, from a policy perspective, some issues need to be clarified in order to
develop appropriate industrial policies and create an enabling environment. Despite the availability of raw materials, does a seaweed farming country necessarily have
comparative advantage in carrageenan processing; what about other factors such as infrastructure, markets and human capital? What would be the minimum size
for a carrageenan processing industry to be economically viable? What about the environmental impacts of carrageenan seaweed processing e.g. nutrient-loaded
effluent? What could be done to facilitate the industry to adopt multistream processing i.e. extracting not only carrageenan but also other nutrients [Figure 3 in
Neish, 2013]? Last but not least, what could be done to increase seaweed farming countries’ competitive advantage in carrageenan processing?
In Indonesia, there has been a proposal to restrict the export of raw seaweeds in order to support the development of the local processing industry.
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Compared with other supporting policies e.g. subsidizing the processing industry, this may incur
a smaller financial burden for government to implement. However, an export quota system would distort the market and, hence, should be implemented with caution. For
example, limited and uncertain seaweed supply from Indonesia under the quota system may force overseas processors to source raw materials from elsewhere, which would
essentially impair the competitiveness of seaweed farmers in the home country. While the quota system may benefit the local processing industry with more abundant and
cheaper raw material supply in the short term, the artificial competitive advantage may not be sustainable in the long run.
Based on the existing literature e.g. McHugh, 2003; Panlibuton, Porse and Nadela, 2007; Neish, 2008a; Bixler and Porse, 2011, further study should be conducted to
provide broader, deeper and more systematic information on the economic, social and environmental performance of the carrageenan seaweed processing industry.
Considering the special situation of China i.e. a large carrageenan processing industry depending mostly on imported raw seaweeds, further study should be conducted
to understand the status and trends of its carrageenan processing industry and their implications for the global carrageenan seaweed market.
6.3 Carrageenan seaweed production
Farm sites The availability of farming areas has not been a major constraint on carrageenan
seaweed farming, but it could eventually become so. Although the six case studies and other literature e.g. Neish, 2008b provide some information on farming areas used in
carrageenan seaweed farming, further study should be conducted to examine the status and potential of suitable farm sites in major carrageenan seaweed farming countries.
For stocktaking of existing farm sites, the information to be collected should include not only geographical and environmental parameters e.g. location, area,
temperature, depth and current but also technical parameters e.g. farming systems and productivity as well as socio-economic parameters e.g. infrastructure, labour
force and economic conditions in surrounding areas. These parameters are essential for identifying potential farming sites for future development Kapetsky, Aguilar-
Manjarrez and Jenness, forthcoming.
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See the news report “Indonesia plans to limit seaweed exports from 2012”, available at: www. thejakartaglobe.combusinessindonesia-plans-to-limit-seaweed-exports-from-2012366886.
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Farming systems Although there may be the temptation to compare technical and economic efficiency
across different farming systems, it should be noted that conclusions drawn from such comparisons may not be rigorous and could be misleading. For example, without
controlling other factors, the performance difference of two farming systems located in different areas may mainly reflect the different environmental conditions of their
farm sites. Therefore, it could be misleading to claim that system A is more efficient or profitable than system B because system A may actually perform poorer than system B
in the location of the latter.
Based on information provided in the six case studies, Section 3 compared the technical and economic performance e.g. productivity, efficiency and profitability of
carrageenan seaweed farming across different farming systems. The comparisons provide useful benchmark information that indicates some patterns, e.g. floating line tends to be
more cost-effective than other farming systems off-bottom and floating raft. However, this generalized conclusion should be treated as indicative only for the reason explained
above, and also because of the limited number of cases included in the comparisons.
Although the cases included in the comparisons in Section 3 contain some variations e.g. different scales of operation, different sizes of cultivars, or different numbers of
production cycles, most of them are representative cases under normal situations. These representative cases do not capture the variations in the performance of different seaweed
farmers in the real world. Information on such variations is important to understanding factors affecting farmers’ performance and for providing guidance on how to improve it.
Seed Self-propagation of cultivars could be economically attractive because the value-added
in the seed production could be internalized by seaweed farmers. However, one issue is the quality of self-propagated seed materials in terms of growth rate, carrageenan
content, disease resilience, etc. Another issue is whether specialized seed production could be more economically efficient than self-propagation because of economies of
scale.
Seed production in fish or terrestrial farming has been increasingly conducted by specialized seed producers; will seaweed farming follow a similar trend? Commercial
seaweed nurseries have already appeared in Indonesia Neish, 2013 and the Philippines Hurtado, 2013. Most of them are part of the operations of large seaweed farms.
Further study should be conducted to compare the performance of self-propagation with commercial nurseries and shed light on opportunities for and constraints on the
development of commercial seaweed nurseries.
Husbandry Seaweed farmers can improve husbandry through learning-by-doing processes
facilitated by training and extension. Good agronomy practices in carrageenan seaweed farming have been documented in the literature e.g. Juanich, 1998; Neish, 2008b. Most
of the discussion focuses on the technical efficiency of seaweed farming. However, because of different costs, practices that generate higher yields do not necessarily result
in greater profitability.
Further study should be conducted to evaluate the economic performance e.g. profitability and risks of different farming practices. Such evaluations should also
consider the environmental impacts e.g. cutting down mangroves and social impacts e.g. occupational hazards of seaweed farming.
Integrated multitrophic aquaculture Integrated multitrophic aquaculture IMTA has been proposed as a promising
technology that could enhance seaweed farmers’ incomes and reduce their risks
through diversification Neish, 2009. The ecological advantages of seaweeds are their ability to metabolize carbon dioxide and assimilate macronutrients and micronutrients.
Therefore, they can be used as bioremediation in finfish culture as part of the ecosystem approach to aquaculture Soto, Aguilar-Manjarrez and Hishamunda, 2008. Not only
are there environmental advantages from combining seaweed cultivation with finfish and shellfish, but there can also be economic and social benefits Ridler et al., 2007;
Barrington, Chopin and Robinson, 2009. Integrated multitrophic aquaculture has already been practised in seaweed farming; examples include IMTA of seaweeds and
bivalves in China Mao et al., 2009 and growing Gracilaria in fish or shrimp ponds in Indonesia Neish, 2009.
While the potential of carrageenan seaweeds in IMTA has been examined and experimented Hayashi et al., 2010, it seems that commercial IMTA of carrageenan
seaweeds has yet to become substantial. Further study should be conducted to examine, especially from a socio-economic perspective, the potentials and constraints
of IMTA in carrageenan seaweeds.
Summary Based on the six case studies as well as other existing literature e.g. Ask, 2001; Namuda
and Pickering, 2006; Zamroni and Yamao, 2011; Zamroni, Laoubi and Yamao, 2011, farm surveys or censuses should be conducted to collect detailed data on carrageenan
seaweed farming in each of the major carrageenan seaweed farming countries. With more detailed data, the analysis in Sections 3 and 4 could be broadened and deepened
to generate more information on, and knowledge of, the socio-economic performance of carrageenan seaweed farming.
6.4 Industrial organization
