Industrial organization LESSONS LEARNED AND THE WAY FORWARD

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

Carrageenan seaweed farming has been dominated by small-scale family farmers. There is little disagreement that more integration is needed in the industry to overcome the disadvantages of small-scale farming e.g. lack of economies of scale and poor traceability in both production and marketing, but the question is how to bring this about. Large farms Despite the benefits of economies of scale, large seaweed farms may be less favoured by government and other pro-poor stakeholders because of concerns over social equity. However, large seaweed farms can generate employment and incomes directly from own operations or indirectly from induced economic growth in local communities. Although it is neither likely nor appropriate, at least not in the near future, for carrageenan seaweed farming to be dominated by large-scale, plantation type of operations, large farms are expected to play more significant roles in seaweed farming development. In Indonesia, large leader farmers have appeared and operated like farm enterprises Neish, 2013. Further study should be conducted to broaden and deepen understanding of the socio-economic performance of large seaweed farms and their contributions to the development of the sector. Farmer organizations Formal or informal farmer organizations could consolidate the efforts of small farmers into collective actions for better economic performance. However, their success is not automatic see Section 5.1 for some discussion. Past experiences indicate the importance of strong leadership, be it from large farmers, traders, NGOs or development agencies, to the success of farmer organizations Vorley and Proctor, 2008. Lack of effective leadership is deemed a factor behind less-successful seaweed farmer associations in the Philippines Hurtado, 2013 and the United Republic of Tanzania Msuya, 2013. In 56 Mexico, lack of leadership that represents the interests of the community has resulted in a lack of confidence and trust among community members Robledo, Gasca-Leyva and Fraga, 2013. Based on the existing literature e.g. Kassam, Subasinghe and Phillips, 2011, further study should be conducted to examine the potential and limitations of farmers organizations as a means to consolidate small-scale seaweed farmers. Special attention should be focused on how organizational and governance structures of different seaweed farming entities farmers groups, producer associations, cooperatives, farm enterprises, etc. affect their socio-economic performance. Trading intermediaries It is often taken for granted that more direct value chains between farmers and processors i.e. less intermediation tend to be in the interest of farmers as well as the entire industry. However, it should be clarified that reducing intermediaries does not eliminate the various services provided by trading agents e.g. consolidation, quality control, credit provision, risk-sharing, and information exchange but rather transfer them to the shoulders of farm enterprises, farmers organization, andor processors. Then, the question is under what situations such internalization would be more efficient than independent commercial trading agents. Further study should be conducted to enhance understanding of the socio- economic performance of trading agents in the seaweed industry. A good place to start could be a comparative analysis of countries’ different experiences e.g. export licensing in Solomon Islands, the free-entry policy in the United Republic of Tanzania, and the highly specialized and multilayer trading system in the Philippines 31 .

6.5 Governance and policy