Regulatory costs on Pacific coast shellfish farms

Abstract

Concern within the U.S. aquaculture industry and a developing research literature on aquaculture regulations have prompted attempts to quantify on-farm regulatory compliance costs. A survey was conducted of the Pacific coast shellfish industry (Washington, Oregon, and California) to assess the on-farm economic effects of regulations. The response rate for this study was 27%, but captured 74% of the value of Pacific coast shellfish production. The total annual regulatory burden for the Pacific coast, excluding non-cash opportunity costs, was estimated at $15.6 million (increased farm costs due to regulation), with an additional $110 million in annual lost sales revenue (markets lost due to regulatory action or trade barriers) and $169.9 million in additional lost opportunities (due to regulatory barriers to expansion or diversification); average annual costs were estimated to be $240,621 per farm and $68,936 per hectare. Analysis by farm size demonstrated greater regulatory cost burdens per ha on smaller-scale producers. Study results show that the Pacific coast shellfish industry has experienced extensive delays in permitting resulting in substantial lost opportunities, as well as high regulatory costs that have prevented the entry of new businesses; both contributing to the exit of existing farms, and otherwise prevented the industry from responding to growing demand for U.S. shellfish aquaculture products.