3.1
There is a range of matters that present actual and potential barriers to the growth of the Australian aquaculture industry. This chapter discusses the key issues which might impede the expansion of the industry, including biosecurity, environmental concerns, workforce issues and access to investment and development funding. The chapter outlines stakeholder concerns in relation to those matters and considers proposals for industry and government responses, including the role of the Commonwealth Government in supporting new and emerging aquaculture ventures.
Biosecurity
3.2
Australia’s biosecurity controls play a key role in ensuring that the country remains one of the few in the world free from the most serious pests and diseases, including in the aquatic environment. Maintaining this status is paramount to the Australian aquaculture industry as it is a key part of the industries status as a producer of premium product.
3.3
Seafood Industry Australia observed that:
For the aquaculture industry to reach its full growth potential, it is essential that optimal health of farmed stock is maintained, and significant disease impacts are minimised.
3.4
Producers expressed the view that the growth of Australian aquaculture depended on maintenance of the ‘competitive advantage of being free from many important diseases’. The Australian Prawn Farmers Association (APFA) submitted that ‘biosecurity is a significant barrier to growth’ because an outbreak of disease such as the White Spot disease that damaged the Queensland prawn industry in 2016 and 2020 would be a major set-back.
3.5
AQUAPLAN, managed by the Department of Agriculture, Water and the Environment (DAWE), is a comprehensive national strategic plan for aquatic animal health. A review of the 2014-19 plan commenced in early 2020. A new plan, expected to be release in late 2021, had not been released by
31 January 2022.
3.6
The National Aquaculture Strategy identified biosecurity as one of the eight priorities for the industry, emphasising the need for a ‘robust risk-based approach to managing biosecurity’, and that ‘all jurisdictions need to work with industry to manage risks’.
3.7
Commonwealth, states and territories governments, as well as private industry, have roles and responsibilities relating to biosecurity, including in aquaculture. Biosecurity collaboration is driven by the Intergovernmental Agreement on Biosecurity (IGAB), signed by all states and territory governments in 2019. IGAB built upon a Memorandum of Understanding on Animal and Plant Quarantine measures signed by all state and territory governments which came into effect in 1995. The IGAB built on the existing agreement, strengthening ‘the working partnerships between the Commonwealth, state and territory governments by defining the roles and responsibilities of governments and outlining priority areas for collaboration, to improve the national biosecurity system’.
3.8
At the Commonwealth level DAWE administers the Biosecurity Act 2015, which is ‘the primary legislation that provides the legal powers for all of Australia’s biosecurity activities’. The Biosecurity Act implements an Appropriate Level of Protection approach which is aimed at reducing risk to a very low level, but not to zero.
3.9
The states and territories have their own additional biosecurity legislation. Domestic stakeholders such as farmers, industry and the community also have a role in the management of biosecurity. Such responsibilities can come in the form of biosecurity plans, participation in response preparedness, or reporting of suspect plant or animal pests.
3.10
Stakeholders emphasised the seriousness with which they take the risk of biosecurity failures and the extent of their potential impact on the industry.
3.11
The Fisheries Research and Development Corporation (FRDC) stated that Australia faces unprecedented biosecurity challenges, with pests and diseases spreading around the world at higher rates than ever. The FRDC cited evidence from Food and Agriculture Organization of the United Nations (FAO) that there is a global trend for a new pathogen to emerge and spread across national borders every three to five years.
3.12
The Australian Barramundi Farmer’s Association (ABFA) noted that once a disease is introduced into an aquatic environment, it is very difficult to control.
3.13
Dr Chapman, Chair of ABFA stated:
These diseases typically kill up to 85 per cent of your stock. There'd be in the order of $70 million worth of stock in the water at any time, so that's the sort of impact. But what we saw with white spot was that Queensland biosecurity came in with tankers of chlorine and killed everything on the farm, including brood stock. If you lose your brood stock as well, that's really devastating.
Industry concerns about import standards
3.14
The principal concern about biosecurity presented to the Committee related to the risk of imported diseases and the issue of import regulations.
3.15
Both the prawn and barramundi farmers’ representatives expressed concerns that the Import Risk Analysis for non-salmonid species produced in 1999 had not kept up with changes and was conducted at a time when the industry was much smaller than it is today.
3.16
Ms Jo-Anne Ruscoe, CEO of ABFA, acknowledged that the industry had received assurances from DAWEthat it was continuing to monitor the situation. However, ABFA took the view that the industry would have more confidence in the system if there was greater transparency from the Department, including a full review of the risk analysis.
3.17
Two specific import-related biosecurity matters raised by stakeholders was the need for decontamination of imported product through cooking and the potential danger of imported whole fish. These concerns were articulated by both the prawn grower and barramundi grower representatives.
Prawn Industry Perspective
3.18
The prawn industry’s concerns were, understandably, particularly shaped by their experience of the White Spot Disease. While the specific means of introduction of the disease was not discovered, the Inspector-General of Biosecurity concluded that imported prawns were the potential and most probably input pathway for the introduction of the disease. DAWE’s scientific advisory group supported this conclusion.
3.19
APFA acknowledges that there is a market for imported prawns due to their relative cheapness, and as such does not support banning importation. However, the Association called for appropriate sanitary measures to be applied to high-risk goods to prevent the introduction of diseases to Australia.
3.20
Mrs Kim Hooper, the Executive Officer of APFA, told the Committee that the Association advocates the cooking of imported prawns:
That all prawns are cooked at the border. If that's impossible to do, which it shouldn't be—we don't want to stifle imports, because there's always a price point for imported prawns—then enforcement and compliance need to be resourced a lot more.
Barramundi Industry Perspective
3.21
Barramundi industry representatives also expressed concerns about potential dangers from imported product and about existing procedures for biosecurity. Unlike the prawn industry, the barramundi industry has not been subjected to the effects of any serious viruses. But both ABFA and SIA stressed the importance of maintaining the optimal health of farmed stock as a precondition for the aquaculture industry reaching its full growth potential.
3.22
ABFA criticised what it said were deficiencies in regulations about the importation of barramundi, including:
no mandatory requirements to decontaminate (e.g., cook) imported barramundi (and other species carrying exotic pathogens of concern), or processing wastes (gills, guts, skeletons)
no routine post-border testing performed on imported uncooked whole and eviscerated barramundi commodities, so the prevalence of exotic pathogens in imported barramundi is unknown
no routine assessment of imported uncooked eviscerated barramundi relative to import conditions, so the compliance of imported barramundi to import conditions is not known
no measures that prevent further processing of imported uncooked whole and eviscerated barramundi
no functional controls on uncooked processing waste to prevent it being discarded or released into natural waterways as bait, berley, or cheap disposal
there are currently no methods in use to categorically determine the country of origin or differentiate farmed and wild-caught whole and eviscerated barramundi.
3.23
ABFA and Humpty Doo Barramundi submitted that the importation of whole barramundi is a biosecurity risk. Both organisations supported a ban on such product. According to ABFA, the 172 tonnes of imported whole barramundi only accounts for eight percent of the total barramundi imports, and that this high-risk gap could easily be filled with fillets.
3.24
ABFA also draw attention to what it considered to be the improper evisceration of imported barramundi. The Association told the Committee that it had undertaken its own research and had found that a hundred per cent of the products surveyed were found to have remains still in the fish, a situation which ABFA believes is an inappropriate risk.
3.25
In October 2021 the Fisheries Research and Development Corporation (FRDC) released a report on a study assessing the biosecurity risk of imported uncooked, whole, and head-on eviscerated, barramundi and other finfish, and containing findings which supported the barramundi industry groups’ concerns. The study of a sample of seafood from wholesalers and retailers, found a prevalence of exotic disease at a rate of greater than
5 per cent, a level which did not comply with Australian biosecurity requirements.
3.26
The FRDC report proposed that DAWE consider a review the import risk analysis for non-salmonids (specifically barramundi) and review compliance with existing requirements. The report also recommended that the industry should review its on-farm biosecurity measures.
DAWE’s response to industry concerns
3.27
In relation to the proposal that imported prawns should be cooked, DAWE submitted that evidence did not support such a measure.
3.28
The Department commissioned a report into the issue reviewing the biosecurity risk of imported prawns, which was reviewed by an expert panel. The report stated that the cooking of prawns for human consumption does not completely deactivate the White Spot Syndrome Virus. It concluded that complete elimination of WSSV would require, prawns to be boiled at 100°C for 1 minute, a process which would ruin the product for human consumption.
3.29
The review recommended that uncooked prawns should be frozen, with the head and shell removed, deveined, inspected and graded, free from diseases and fit for human consumption. Specific testing to manage White Spot and other viruses were also recommended.
3.30
DAWE acknowledged the concerns of the barramundi industry and was also in the process of conducting its own investigations in response to the findings of the FRDC report. Dr Martin the First Assistant Secretary of DAWE, stated that the Department regularly met with industry representatives and conducted ongoing monitoring of disease risks. Dr Martin pointed out that 88 per cent of imported barramundi is fillets and that while the risk of contamination could not be eliminated, imported barramundi ‘still meet our appropriate level of protection, which is very low risk—not zero risk’.
3.31
In response to concerns about the risk analysis, Dr Martin stated that the analysis:
…has been reviewed on a number of occasions and changes have been made, most recently back in mid-2021, which was looking at the diseases and the species of fish that were susceptible to diseases. We constantly keep things under review and will continue to do that and also work with industry. As we get new information, we then relook at the risk and see if it has changed.
Environmental concerns and public perceptions
3.32
The aquaculture industry has, in recent years, been confronted with the problem of negative perceptions in sections of the public about environmental degradation associated with aquaculture. Critiques of both the fishing industry globally and of aquaculture in Australia in film and television documentaries and books have reflected public worries about the damaging effects of fishing on the local and global environment. The Tasmanian salmon industry has been a particular target of criticism.
3.33
Much of the debate has centred on the view that the industry is losing what is termed ‘social licence’. This term does not mean licencing in a legal sense, but is often used to encapsulate the idea that the public will have a certain level of acceptance of the aquaculture industry and its practices, and that allegations of environmental damage will erode public support. ‘Social licence’ was defined by the Institute of Marine and Antarctic Studies (IMAS), University of Tasmania, as the ‘ongoing acceptance by stakeholders and the public of an aquaculture companies’ activities’.
3.34
A loss of public acceptance can reduce demand for products and can generate public and activist opposition to expansion of the industry, especially into new locations. IMAS pointed out that ‘there have been several examples of where aquaculture has been threatened as a result of a lack of societal acceptability’. Seafood Industry Australia (SIA) mentioned that misinformation and negative perceptions result in producers having to spend time away from their businesses to manage reputational risks.
3.35
The following section reviews the effects of criticisms of the industry’s environmental credentials and the issues involved in placing discussion on a firm factual and scientific basis.
The Tasmanian Context
3.36
As mentioned above, the centrally important Tasmanian industry has been a special target for criticism. Historically the state’s salmon farming industry has enjoyed community approval and social acceptance, but some stakeholders have expressed negative views on the industry.
3.37
The Australia Institute Tasmania submitted that in the 1980s eagerness to develop the industry led to overreach and a lack of independent regulation which caused community pushback. The Institute stated that its research had revealed that 63.5 per cent of Tasmanians were concerned that the health of Tasmania’s coastal waters and supported a slow-down in the expansion of aquaculture. The Institute argued for greater transparency and accountability about potential environmental management issues before the industry was expanded. Concluding that ‘Tasmania’s current regulatory framework is failing to maintain healthy marine ecosystems’ the Institute proposed that Tasmania should produce a state-wide marine plan based on an ecosystem-based management approach as the ‘best means of managing the complex interactions in marine systems’.
3.38
NWTAS for Clean Oceans also attacked what it saw as lack of transparency as a cause of disquiet in the community:
Government at all levels from council through to state and federal, must respond to the community and address the issues that are raised. Ignoring communities to develop more farms at all costs will not only tarnish the industry even further, but it may also lead to an untenable standoff between community and industry that will lead to the demise of that industry in the long term.
The organisation also contended that land-based salmon farming is more environmentally sustainable than ocean-based farming and called for the exploration of the possibilities of land-based aquaculture.
3.39
The Tasmanian Alliance for Marine Protection (TAMP) and Neighbours of Fish Farming (NOFF) both submitted that there are widespread concerns in Tasmania about the salmon industry, including ‘waste, noise and light pollution, and impact on wildlife’. Further, the groups mentioned the importance of Tasmania’s pristine reputation to the state’s tourism and hospitality sector, and that problems surrounding the salmon industry could dimmish the states reputation.
Responding to negative perceptions
3.40
Australia’s aquaculture industry is underpinned by a strong scientific research and development approach. But there are concerns around how much information is available to the public, the extent of public understanding of the science, and the undue influence of sensationalist criticism that is not factually based. Conveying a science-based understanding of aquaculture and responding to deeply-held public concerns about the environment are important tasks for the industry.
3.41
In response to criticism of the industry in Tasmania, Seafood Industry Australia (SIA) quoted the words of Colin Buxton, Emeritus Professor at the University of Tasmania:
Tasmanian salmon farming is recognised as being among the best in the world with an Aquaculture Stewardship Council’s tick of approval; an independent, scientifically backed gold standard for environmental stewardship and sustainability. Why is this so hard to understand and accept? Equally disturbing is how the industry is portrayed in the media as anything but responsible…
3.42
The Fisheries Research and Development Corporation (FRDC) highlighted the importance of countering the unscientific basis of much criticism:
I think the first thing from a science perspective—and I would say that we probably haven't done it well enough—is that we need to be accountable for the science. We need to present it and we need to get it out there, so maybe the detractors at least can be called to account if they don't acknowledge that science. I think that's really important. The second point is that, when people do put distraction, whether it's Seaspiracy or whatever the story is, the science community needs to respond. They need to defend their science where possible.
3.43
The industry also needs to target the wider perceptions and emotions of the public, behind the simple presentation of facts. SIA, observed that the Australian seafood industry is ‘faced with a challenge of hearts over mind’ which cannot exclusively rely on science and proven facts. SIA noted that community opinion in the agriculture space can often be influenced by misinformation which is ‘highly dramatized, easy to obtain, produced in shareable quantum to appeal to social networking sites’, and that the information is often sourced from unverified and unregulated sources that are not accountable to peer-review or fact checking.
3.44
Public confusion about apparently contradictory views amongst scientists was also mentioned by NWTAS for Clean Oceans. Both industry and government face the responsibility of ensuring that the public can understand a clear connection between the available scientific evidence and how industry regulations are developed and applied.
3.45
SIA therefore urged that:
Aquaculture stakeholders including industry, government and regulators must unite against misinformation to improve the community’s perception of the Australian aquaculture industry, and enhance its position as a sustainable, responsible source of protein, regional investment and jobs. We must do this through increased support for proactive and reactive community engagement strategies and awareness campaigns.
3.46
IMAS stressed the role of a scientific approach to aquaculture regulation, submitting that its research has been ‘pivotal in the development and implementation of science-based management and regulation of the aquaculture sector in Tasmania and abroad’ The work contributed to ensuring that Tasmanian aquaculture practices remained sustainable, contributing to ‘the development of monitoring methods and environmental standards that have been used to assess environmental performance and compliance of the sector over the past two decades’.
3.47
Stakeholders emphasised that compliance with government environmental regulations and obtaining certification through independent third party verification mechanisms such as Aquaculture Stewardship Council (ASC), Marine Stewardship Council (MSC) and Best Aquaculture Practices (BAP) were a key part of efforts to assure the community that the industry was complying with environmental standards. Ms Angela Williamson from the Tasmanian Salmonid Growers Association expressed it as follows:
The reality is that we are a really highly regulated industry, with 38 pieces of legislation that we have to follow. And not only that: from the regulatory setting, we also have third-party independent world-best certifications that our companies all aspire to and subscribe to. This provides another layer of certainty, scrutiny and confidence in our operations, and it's something that's really important for our retailers and for our consumers.
3.48
Tassal Group submitted that:
Our strategies continue to position us as a leader to meet consumer and market needs and our voluntary third-party certification demonstrate our ongoing commitment to going above and beyond our regulatory settings to meet global sustainability benchmarks.
3.49
Similarly, SIA stated that it had ‘invested valiantly’ in efforts to both engage with the community and to obtain certification in a variety of third-party certification programs.
3.50
The Western Australian Government indicated that it would support aquaculture ventures to achieve independent verification through ASC and MSC.
The Aquaculture Workforce
3.51
A capable and resilient workforce is critical to the growth of the Australian aquaculture industry. The following section discusses challenges facing the industry in training and education, and the availability of labour, particularly in the context of issues caused by the remote locations of some aquaculture production sites.
3.52
The importance of the aquaculture workforce was acknowledged by the National Aquaculture Strategy, which paid particular attention to the improvement of training and education as a priority to ensure that the industry’s employment needs are met, and that the workforce can find career pathways in the industry.
3.53
The Commonwealth Government responded to the Strategy and supported its findings about the need to attract, retain, and upskill workers. The Government has committed to supporting the agriculture industry to reach a farm output of $100 billion by 2030, with a $850 million agriculture 2030Â package in the 2021-22 budget which included:
$400.1 million to strengthen biosecurity
$29.8 million to grow the agricultural workforce
$15.0 million to improve trade and market access.
3.54
DAWE also expects that the aquaculture industry will benefit from other previously announced measures for the agricultural sector, including:
the $328 million Busting Congestion for Agricultural Exporters package
finalising free trade agreement negotiations with the European Union and United Kingdom
budget increases for the International Freight Assistance Mechanism (IFAM)
access to capital through loans from the Regional Investment Corporation
assistance to farming, forestry and fishing exporters to expand and diversify export markets through the Agri-Business Expansion Initiative (ABEI).
3.55
The availability of workers was identified by stakeholders as a key issue which limits the potential growth of the industry. Aquaculture operations require a range of skills, but the Committee was informed that a specific breakdown of the number of skilled, semi-skilled and unskilled workers working in the industry does not exist.
3.56
The Committee received evidence about the problems of attracting and retaining sufficient skilled labour to the industry. For example, ABFA submitted that the ‘availability of suitably skilled labour has been identified by the barramundi farming sector as a major growth blocker over the next five years’. It cited the example of the industry in northern Australia which will need between 1400 and 2300 new skilled staff by 2030 to support projected industry growth. A number of other submitters expressed similar views about the difficulties that many operators were confronting in attracting and retaining workers with the necessary skills and training.
3.57
IMAS highlighted the growing demand for skilled labour in aquaculture, noting that ‘in the past 12 months job advertisements for positions in aquaculture have increased by 41 per cent, the second highest sector growth [and] the highest median advertised salary of $79,500’.
3.58
The industry has historically been dependent on foreign labour, including seasonal backpacker workers as well as skilled migrants, to make up labour shortfalls. This feature of the industry has proved to be a major weakness during the Covid-19 pandemic when border restrictions prevented the arrival of overseas workers. Some operators were even considering ‘fallowing’ or suspending production in 2022 due to their inability to obtain workers or to obtain them at a reasonable cost.
3.59
Plans for industry expansion, together with technological changes will also generate increased demand for labour with new and upgraded skills. The APFA submitted that:
…there is a need to attract, retain and develop the workforce as the industry experiences rapid expansion and upgrades in the next few years. It is expected that there will be a shift in skills of the prawn farming industry’s workforce with businesses investing in advanced technology to automate many of their systems that are currently relying on hands-on technicians. This is not believed to minimise the number of people needed to work on farm, but rather move their roles to another position through upskilling. In addition, changes to regulations will increase the need for skilled workers in food safety, biosecurity, occupational health and safety and environmental compliance.
3.60
In a similar vein, Petuna Aquaculture, a Tasmanian aquaculture venture, noted that ‘as the industry becomes more technologically advanced’, there will be increased need for a workforce with higher levels of skills.
3.61
Some industry representatives were critical of the education and training provided by universities and registered training organisations (RTOs).
3.62
APFA submitted that ‘the current education system is not fit for purpose’, noting that the Association is:
…working on reviewing the workforce system to gain knowledge of what is needed now, what the current skills gaps are and what the potential future roles are needed. Support is needed to attract participation within the educational systems such as schools, VET providers, tertiary education and apprenticeship pathways.
3.63
Petuna Aquaculture submitted that educational institutions needed to ‘identify areas of weakness’ in existing curriculums, including by ‘engaging with the industry to develop appropriate learning outcomes’ which would strengthen their courses.
3.64
Petuna Aquaculture argued that:
…RTOs are becoming more and more reluctant to take on new areas of training due to the demanding level of regulation in the sector, including the cost of meeting that regulation. If a business requires training outside the existing scope of training, an RTO needs to be fully compliant in all areas of new delivery before a single student can be enrolled or before a course can even be advertised.
3.65
Mr David Wood, CEO of Yumbah Aquaculture, added his voice to calls for policy and planning for the aquaculture workforce stating:
…we would encourage policy that addresses the need for a higher skills based workforce, and our education systems need to plan for and support these future skills to be delivered.
3.66
IMAS noted that aquaculture had a special challenge in attracting and retaining skilled workers in coastal and regional communities ‘where education attainment and the ability to meet tertiary entrance requirements is often limited’. The Institute argued that alternative study pathways had been hampered by changing courses and content between RTOs. In an effort to meet specialised local needs, the Institute stated that it offered courses that provided:
…an alternate study opportunity for students without tertiary entrance requirements to undertake a different pathway into tertiary education. Remote work-embedded study programs also offer great potential ... in specific skillsets like selective breeding, fish nutrition and health, engineering, business, and ICT.
3.67
The remote location of some aquaculture operations created other workforce problems. There can be difficulty in attracting and retaining skilled and unskilled workers to regions with limited services and amenities. For example, the Aquaculture Council of Western Australia noted that it was necessary to offer prospective workers ‘appropriate incentives where the work available is in remote regional areas’.
3.68
Aquaculture industry groups discussed the challenges of operating in regional locations due to the lack of infrastructure and services. In particular, infrastructure issues include lack of road and rail transport, ports, storage facilities, telecommunications as well as social infrastructure such as schools and hospitals. APFA also noted that there is ‘a lack of support for families moving to remote areas’.
3.69
SIA discussed a proposal to establish a National Australian Seafood Careers Platform with a:
…database of labour that can be used to promote careers and further training opportunities. Facilitating and co-ordinating the movement of existing labour between fishing and harvesting seasons, and regional locations will provide security and improved retention of labour.
3.70
IMAS also mentioned efforts to support workforce mobility as a way to encourage workers to stay in the industry:
Companies have also addressed staff retention by providing more workplace flexibility, staff development pathways and staff mobility between sections of companies among other strategies.
3.71
Ms Papacosta from SIA also stressed the importance of providing training, skills development and varied career paths for staff so that, once attracted to aquaculture, they could be retained as part of the industry workforce.
3.72
To address issues experienced by the agriculture workforce, the National Agricultural Labour Advisory Committee produced the National Agricultural Workforce Strategy in December 2020. The Committee found that there was a need for education at all levels of the agriculture workforce and that the best way of providing that is for learning to be driven by the enterprises’ owners, managers and the workers themselves. But there is also a role for governments in helping to enable and facilitate learning and innovation.
Capital and Investment
3.73
The availability of capital and investment is imperative for the growth of aquaculture, as acknowledged by the National Aquaculture Strategy. The Strategy notes that agribusiness and food are amongst the Commonwealth Government’s national investment priorities, and that aquaculture is a sector with significant growth and diversification potential. Capital and investment in research and development is also critically important and is discussed in the Strategy as a major contributor to innovation, productivity, efficiency and growth in the industry.
3.74
There is a range of Commonwealth and state and Northern Territory mechanisms through which capital and investment support is provided to the aquaculture industry.
3.75
The Commonwealth Government entity, the Northern Australia Infrastructure Facility (NAIF) was established in 2016 by the Northern Australia Infrastructure Facility Act 2016. NAIF provides financial assistance to states and territories and other entities for the development of northern Australia economic infrastructure, including aquaculture.
3.76
The Regional Investment Corporation provides access to capital to aquaculture through its loans to farms and agri-business. A small number of aquaculture companies had used the facility for loans for capital investment in their facilities.
3.77
The Commonwealth’s investment in fisheries research and development is led by the Fisheries Research and Development Corporation (FRDC). The FRDC was formed as a statutory corporation under the provisions of the Primary Industries Research and Development Act 1989 and is responsible to the Minister of Agriculture. The Corporation is involved in planning and investment in fisheries research and development by providing leadership and coordination of the ‘monitoring, evaluating and reporting on R&D activities, and facilitating information dissemination, extension and commercialisation’.
3.78
With the growth of Australia’s aquaculture, FRDC has increased its funding to address the priorities of the sector. FRDC engages with Australia’s jurisdictions and specific industry sectors through the Industry Partnership Agreements. Investments have been executed by a suite of public and private providers, including CSIRO, the Australian Institute of Marine Science, universities, state-based research agencies such as the South Australian Research and Development Institute, and independent consultants. The total value of aquaculture research and development projects managed by FRDC over the past five years is $108.7 million. Investments are primarily related to addressing industry production issues (such as, aquatic diseases, improved culture methods and genetics) as well as, increasingly, environmental research.
3.79
The Queensland Department of Agriculture and Fisheries (DAF) undertakes research, development and extension with an interest in driving the growth of the state’s aquaculture industry. DAF partners with industry and other research providers to identify new production species, with the aim to reduce risks for interested industry groups. The Queensland Government has also provided ongoing support to Queensland aquaculture operators since the 2016 White Spot outbreak, to help protect farmer’s investments and maximise the economic and social benefits of expected expansion.
3.80
In Tasmania in 2011, the state government and the University of Tasmania, through the Institute of Marine and Antarctic Studies, formed the Sustainable Research Collaboration Agreement (SMRCA) which supports the effective and sustainable management of Tasmania’s living marine resources. SMRCA provides support to fisheries and aquaculture through environmental research and development services. Priority areas include:
management and stewardship of Tasmanian marine aquaculture, including oysters and salmon
research and development into species of commercial potential in Tasmania and globally
understanding environmental ecosystem changes in the coastal environment
further development of the Tasmanian salmonid marine farming industry
evaluation of biosecurity risks for all seafood sectors
understanding the social and economic impact of aquaculture at the local, regional and national levels.
3.81
The Northern Territory Government has initiated a $4.1 million project aimed at addressing key barriers to the development of the aquaculture sector. The project includes a partnership between the Northern Territory Department of Industry, Tourism and Trade (DITT), the Cooperative Research Centre for Developing Northern Australia, the Anindi lyakwa Land Council and the Yagbani Aboriginal Corporation. The partnership is working on a commercialisation trial for hatchery production and fanning of native Blacklip Rock Oysters.
3.82
The Western Australian Government described its approach to methods of supporting the growth of aquaculture in the Aquaculture Development Plan for Western Australia 2020. The plan outlines the Government’s foundational elements and priority actions to support growth in WA aquaculture:
Strategic planning, management and coordination
Biosecurity and fish health
Accessibility of Capital and Investment
3.83
The Committee heard a range of views from stakeholders about the opportunities and constraints they face in obtaining capital and investment. It was notable that while industry stakeholders identified that aquaculture operators had to manage ‘costs of capital and commercial risk’, in the same way as businesses in all sectors of the economy, they did not specially highlight the issue as a major barrier to growth. The inquiry did not receive any significant amount of evidence about issues associated with obtaining finance through the banking sector.
3.84
In the view of FRDC, the Australian aquaculture industry has historically had difficulty attracting investment from private equity groups due to the small scale of most operations and their lack of vertical and horizontal integration. Aquaculture is capital intensive, requiring investment in production infrastructure and working capital, as well as financing for further investment as production grows. But, for investors, it was difficult to evaluate the attractiveness of the industry, particularly because many aquaculture operations take place on water, with little or no real property rights attached to the producing assets.
3.85
The FRDC considered, however, that the situation has been changing in recent years with the appearance of a number of aquaculture companies listed on the Australian Stock Exchange. These companies have been expanding their businesses across multiple sectors within the industry, bringing ‘virtual integration, market power and established supply chains’. FRDC noted that the industry stakeholders identified vertical integration as one successful business model for improving market access and protecting brand image.
3.86
Dr Richard Knuckey, the managing director of The Company One, a Queensland producer of grouper fish, reinforced the view that finding capital was most challenging for small scale operators looking to expand their business.
3.87
Mr Boris Musa, Managing Director and CEO of Mainstream Aquaculture, informed the Committee that his company had not had concerns about being able to get finance to support the growth of their business, with Mainstream Aquaculture having an investment plan involving $70 million over the next five years.
3.88
With regard to the particular financing needs of aquaculture in northern Australia, the role of NAIF was commended by the Tassal Group and Humpty Doo Barramundi. Dr Daniel Richards, Chief Executive Officer of Humpty Doo Barramundi described NAIF ‘as a very appropriate mechanism for development in northern Australia’. Although NAIF charged the company near to commercial interest rates, it was ‘a bit more patient’ than commercial banks and half of the company’s finance had been provided through the Fund.
3.89
Stakeholders paid particular attention to central role of investment in research and development in aquaculture. For example, Dr Knuckey, described his business as ‘extremely R&D intensive’. Industry representatives emphasised the importance of support provided by the Commonwealth, state and Northern Territory governments.
3.90
Petuna Aquaculture described the importance of FRDC to the growth of aquaculture. The company submitted that FRDC’s research, development and innovation projects had been pivotal, ‘including the development of vaccines, selective breeding programs, disease management and environmental monitoring and modelling’. Petuna Aquaculture drew the Committee’s attention to the increasing competition for funding between fisheries and aquaculture groups, due to the increasing growth of aquaculture.
3.91
Tassal Group also noted that the FRDC’s ability to support growth is constrained by competition for research funds between wild capture fisheries and aquaculture. Tassal Group highlighted the importance of innovation to growth, and expressed the view that the FRDC cannot provide for research and development without additional investment from government and industry.
3.92
Dr Knuckey mentioned that his company had struggled to obtain FRDC funding because their company did not meet the profile of current FRDC priorities. More generally, Dr Knuckey observed that many aquaculture operations started out as family businesses and did not always have the corporate knowledge about the most effective ways to link into funding sources.
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ABFA discussed the importance of innovation, investment, and access to research for the sector’s ability to improve and expand. The Association considered that Australia is generally well supported with world class research, and mentioned that ABFA had entered into an Industry Partnership Agreement with the FRDC which the Association considered an ‘effective model for government and industry co-investment in industry led research development and extension’.
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Jo Kelly, Chair of the Australian Seaweed Alliance, discussed with the Committee the funding challenges experienced by the seaweed industry. Jo Kelly mentioned the Commonwealth Government’s Marine Bioproducts Cooperative Research Centre which is provided with $70 million in matched funding over the next 10 years. However, the funding is not exclusively for seaweed and there is a need for greater funding. The industry is also challenged by the fact that the funding is ‘matched funding’, as companies in the industry are mostly ‘pre-revenue’. Jo Kelly expressed the view that government investment is currently ‘fragmented into small-scale projects, [with] a lack of focus and direction on industry needs’, and proposed that there be more specific input from the industry about the allocation of support.
Proposals for Change
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Stakeholders outlined a number of suggestions for changes to government programs to support investment in the growth of aquaculture in Australia.
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Tassal Group proposed the establishment of a Commonwealth grants program that ‘unlocked growth through innovation and infrastructure builds’. The company suggested that such a program could be administered similar to funding available through the Australian Renewable Energy Agency (ARENA) for its Renewable Hydrogen Development Fund to advance the expansion of Australia’s hydrogen industry.
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SIA recommended that the ‘dedicated aquaculture zones’ that had been successful in South Australia and Western Australia should be created in other jurisdictions. The Association stated that the zones had reduced the ‘perceived risk as assessed by financial institutions when assessing an aquaculture operation’s application for capital funding’ because they had reduced the regulatory burden and accelerated the approvals process.
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Petuna Aquaculture proposed the establishment of an industry development fund ‘offering government loans with lowered interest options for capital projects that support the expansion of aquaculture’, noting that capital expenditure was a barrier to entry for start-up companies and for expansion by existing companies.
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In relation to the FRDC, several stakeholders proposed that there should be more investment specifically targeted at aquaculture, along with fisheries in general.
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Tassal Group and Huon Aquaculture put forward the idea that the FRDC should be split into two entities, one focussed on wild-capture fisheries and the other focussed exclusively on aquaculture. Tassal Group believed that ‘this would align project efficacy that recognises the differing objectives of the two industries, whilst providing value for money on investment from industry’. Huon Aquaculture added that the growth of aquaculture provided justification for such a split.
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Petuna Aquaculture suggested that there should be a dedicated body to concentrate on aquaculture-specific objectives in research, development and innovation.
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James Cook University (JCU) discussed the problem that it is often difficult to translate university led innovations to industry use. This is due to lack of experience in progressing innovations to commercial reality. JCU submitted that a solution could be an ‘innovation/accelerator program for start-up companies specific to the sector to help draw out the innovations and move the innovative science from lab to the industry’.
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The Nature Conservancy Australia advocated greater investment to ensure that the growth of the Australian aquaculture industry coincides with sustainable development. The organisation proposed a system of incentives and rewards for businesses that incorporate ‘restorative aquaculture’ principles in their production processes. The Nature Conservancy Australia also considered that collaboration between the ‘Conservation Aquaculture’ sub-sector and commercial aquaculture should be strengthened, because this would both increase innovation and address environmental problems. The organisation argued that investment into conservation aquaculture research and innovation has:
…the ‘potential to develop new businesses, commercial products and processes that support and enhance other sectors such carbon farming, biomedical and pharmaceutical, materials technology, veterinary science and biosecurity’.
Committee comment
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The Committee considers that biosecurity is critical to the viability of individual aquaculture ventures and to the sustainability of the industry as a whole. A major failure in biosecurity could wreck businesses and damage Australia’s international reputation for high quality aquaculture products. The Committee took particular note of the concerns about biosecurity standards expressed by aquaculture industry representatives and their fears about possible damage to the industry. These concerns are understandable given the experience with White Spot Disease and they could have a dampening effect on the confidence necessary for investment for growth. The Committee supports industry efforts to ensure that the appropriate risk analysis is maintained and that import regulations are complied with.
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The Committee considers that it is the responsibility of all stakeholders to be vigilant in the application of biosecurity measures. These include not only government regulations and monitoring, but also the continuing review of on-farm biosecurity practices by producers.
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The Committee notes that the aquaculture industry, particularly the salmon industry in Tasmania, has been the subject of sustained criticism of its environmental management standards and practices. While the Committee acknowledges the critical importance of environmental protection, it considers that much of the criticism has been based on sensationalist media reporting and has lacked a foundation in the scientific evidence.
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The industry is aware that environmental sustainability is a key to the future of aquaculture in Australia. Sustainable practices are vital for the health of fish stocks and for the maintenance of production. The industry depends on public and consumer confidence that high environmental standards are maintained, including for the expansion of production into new areas. The Committee commends efforts by producers and aquaculture industry organisations to engage with the community and provide scientifically-based information about the industry’s efforts to continuously improve its environmental practices.
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The Committee notes that shortages of skilled and unskilled labour are a major constraint to the growth of Australian aquaculture. Border restrictions due to the Covid-19 pandemic have made these more obvious, but the underlying issue has existed for some time. These shortages are related to training and education, as well as to the challenges of attracting workers to regional and remote locations.
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The Committee considers that a key to overcoming skills and labour shortages lies in training and education tailored to industry needs. There is an opportunity for the aquaculture industry, registered training providers and relevant state and NT government agencies to cooperate in the development of specialised training pathways and professional development programs for aquaculture.
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The Committee notes the concerns expressed by aquaculture industry representatives that current government support for the sector’s capital investment and research and development needs are not sufficiently tailored for the specific needs of aquaculture, as distinct from fisheries and agriculture in general.
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The Committee recommends that the Department of Agriculture, Water and the Environment work with aquaculture industry representatives to ensure that Australian producers have the assurance that the Department’s ongoing reviews of the Import Risk Analysis for imported non-salmonid fish species are appropriately rigorous and
up-to-date.
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The Committee recommends that the Commonwealth Government and the Fisheries Research Development Corporation strengthen their efforts to support Seafood Industry Australia and the aquaculture industry more broadly to improve community awareness of the ecological sustainability and safety of Australian aquaculture produce.
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The Committee recommends that the Commonwealth Government work with the aquaculture industry, training providers and state and relevant Northern Territory government agencies to develop specialised training pathways and profession development programs to strengthen the aquaculture workforce.
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The Committee recommends that the Commonwealth Government consider programs and incentives to encourage workers to take up regional aquaculture employment and to support the growth of the industry.
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The Committee recommends that the Commonwealth Government consider the establishment of an aquaculture industry development fund to provide grants and loans to both established and emerging aquaculture ventures.
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The Committee recommends that the Commonwealth Government review research and development funding for aquaculture through the Fisheries Research and Development Corporation to ensure that it meets the specific needs of the sector.