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Home My WebLink AboutCOM 0099.005 2014-20161 0-04. 9C z L41, ccMNi. qct 0LkJ � pow— COUNTY CLERK COUNTY OF HAWAII CEIVPremature Deaths rri a Collection R Date Tilr.eis 0,P" Bye------ Deaths in the Supply Chain -10 Fish die from poor practices in capture through retail At retail, >11% of fish die within 14 days because of poor supply chain practices. Deaths in Hobby Tanks 80% of fish deaths in home aquariums are due to supply chain practices. Saving Nemo: Mariculture and Market-based Solutions to Reform the Marine Ornamental Trade, Bren School of Environmental Science & Management, UCSB (Cartwright et al., 2012) t�c<l Re Su?f"L . iM A%R� AQ Trade Profits from Early Deaths Each step in the supply chain significantly profits from customer purchases to replace fish that die early. Profits from replacement fish sales are so high, stores have no incentive to take action to reduce deaths. Multi-million dollar, multi -stakeholder reform effort failed, in part, because of trade reluctance to address mortality rates. Saving Nemo: Mariculture and Market-based Solutions to Reform the Marine Ornamental Trade, 'Y 6 , Bren School of Environmental Science & Management, UCSB (Cartwright et al., 2012) and culture, and both on -land and offshore facilities. While some ornamental species have been successfully cultured by commercial operations, many others have only' been successfully cultured in a laboratory setting and others species have yet to be cultured in any setting. Other solutions attempted in the past include certification schemes for sustainably harvested fish, educational campaigns for producer campaigns to shift away from bad practices, and trade restrictions at both the U.S. and international level. While all the proposed solutions have potential to improve the trade, none have had any long-term success. The certification scheme was overly complex and too difficult to implement. Many NGOs have attempted to teach better practices to collector communities, but they tend to revert back to old techniques as soon as the NGOs pull out. Finally, legislation has been proposed to further protect coral reef ecosystems and certain ornamental species, but they have failed to gain political support. To explore these potential solutions, we divided our analyses into two parts. First, we conducted an analysis of potential U.S. economic solutions to motivate sustainable practices in the Coral Triangle and throughout the supply chain. Second, we outlined the factors that determined the economic, social, and environmental feasibility of a mariculture operation start-up for producer communities in the Coral Triangle, and we provided scenarios by which this can be done. Eco^ -,r• AnOYFN Economic inefficiency in the trade is a major driver of environmental unsustainability, contributing to overharvesting, poor practices, and producer poverty. We looked for opportunities to intervene in the market that might create incentives for more sustainable practices, while ensuring profit for retailers and quality products for consumers. Specifically, we analyzed the potential for three diverse classes of solutions: a mandatory warranty that could create incentives for better harvest practices, a price premium fueled by an increased willingness to pay for tank -bred fish versus wild -caught fish, and the extent to which aquaculture businesses could become competitive in the market if they used a direct market contract. Warranty We investigated the potential for a warranty on fish both to protect consumers from buying moribund fish and to motivate retailers to purchase fish from more sustainable sources. These measures would improve sustainability throughout the supply chain. Using a stated preference approach, we conducted a consumer survey of marine fish aquarists in the U.S. The survey included data on fish mortality in home aquaria, years of consumer's aquaria experience, and willingness to pay for a warranty. Based on our survey results, we discovered that in the current market for every dollar a customer spent on fish today, a store can expect to make an additional $0.39 in sales to replace fish that have died. Additionally, we discovered that approximately 80% of 3 the fish mortality in home aquaria can be attributed to poor practices in the supply chain, not customer error. Under current practices, stores have been making significant profits from selling impaired fish to unaware customers. Our warranty analysis supports implementing a mandatory warranty to protect customers from purchasing damaged fish. The primary motive of the warranty, however, would be to provide stores with an incentive to purchase from only the suppliers that do not use harmful collection or handling practices throughout the supply chain. Our analysis showed that if a mandatory warranty was implemented and the supply chain was not reformed, on average stores would lose 11.7% of their current profits. By reforming the supply chain under a mandatory warranty, stores could earn 5.33% more than they are currently earning today. Under a mandatory warranty, stores have a significant financial incentive to look into the practices of their suppliers and ensure that changes are made to improve the health of the fish, and eventually the overall sustainability of the trade. Therefore, we can recommend a mandatory warranty as an effective market-based solution to protect customers and to improve the sustainability of the marine aquarium trade. Willingness to pay for tank -bred fish We looked at willingness to pay for tank -bred fish versus wild -caught fish for consumers in the U.S. This analysis determined the increase in price that retailers could charge for a tank -bred fish, and how much more an aquaculture business might need to produce their fish and still remain competitive in the market. A stated preference survey of consumers in the U.S. determined the percent increase in price for tank -bred fish that would maximize profit. We found that a markup of 25%-30% would provide retailers with the greatest gain in revenue — a 25.6% increase. A retailer could successfully place a price premium of 301/0 on its tank bred fish, and this extra revenue could resonate through the supply chain and increase profits for aquaculture operations. Market contracts We conducted a supply chain analysis and incorporated price data at various points along the supply chain from collectors to retailers and determined the price markups at each step. We also estimated shipping costs for various fish species. Using this information, we calculated the highest price that aquaculture producers could sell their fish and remain competitive in the market under the following scenarios: current market conditions, if retailers placed a price premium on tank -bred fish, and if producers entered in a direct market contract witheither a wholesaler or a retailer in the U.S. We found that under current market conditions, an aquaculture operation would have to produce fish at an average of $0.54 per fish to compete successfully in the market. If retailers placed a 301/6 price premium on tank -bred fish, the competitive producer price would increase to $1.04 per fish. Under a market contract with a wholesaler, an aquaculture operation could sell their fish for $3.29 each, and this price would increase to $7.39 if they contracted with a retailer. Under the most 4 "Mortality rates of less than 1% at each step in the chain of custody may be achieved.," 2012 Hawaii Mortality Rates (estimated): Collector to HI wholesaler (3%): 11,352 At HI wholesaler (1%): 3,671 DOA HI wholesaler to LA wholesale (3%): 10,902 DAA w/in 7 days at LA wholesaler (5%): 17,625 Monitoring the chain of custody to reduce delayed mortality of Net -caught fish in the aquarium trade. Rubec & Cruz 2005 " Moculfty rates. Industry self reporting in DLNR catch reports; Industry self -reporting in Cesar, 2002; industry self - reporting; in American Marinelife Dealers Association 1998; and Lim, et al 2003 - 4 li" A IIIIII& A a Vft sti Starvation *"Highest veatn Kates Scientific literature shows:* Fish die in plastic bags, even when water quality parameters are not lethal. Stress + starvation causes highest death rates Trade reports show: DOAs + DAAs for net -caught fish from the Philippines range from 10 –15%.* DOAs + DAAs for net -caught fish from AV Hawaii are estimated at 6-8%. J �I,k Table 1. Ilet cent stiri, i%al and jer cent niorkil it% tot darn. -ell i %h. o tit -14-4t,, v%l1o%vd W %-Yanide. Ore%% and %tar%alion alone and in various contbinatiow- (Hill and Ilellvi,istod Treatment Per cent survival Per cent mortality Cyanide -only 625 37.5 Stress -only 75,0 2S Starvation -only 1000 0.0 Cyanide + stress 750 25.0 C yan 11 Ldatuawtion "I Stress + starvati [5�Fes, 33 3 Z:> C + starvation S83 Handling control 2 75,,0 25.0 No handling control 1 83.3 16.7 "Mortality rates of less than 1% at each step in the chain of custody may be achieved." * *Monitoring the chain of custody to reduce delayed mortality-af Net -caught fish in the aquarium trade. Rubec & Cruz 2005 3 y 4r Limiting Pre -Shipment Starvation Time to 24 hours: y IATA LARs Container 51 Requirements for shipping tropical fish, etc... "Aquatic amphibians are not to be fed for 2 days prior of shipment to avoid fouling of the water." y This does not apply to tropical fish. -10 It is recognized that limited withholding of food prior to shipping is beneficial: Bishop Museum's Sr. Ichthyologist Emeritus wrote in 2010 testimony to Maui County, "It is necessary to stop feeding for 12 hours before shipping a fish. If not, it will foul the water in which it is shipped." � CITES fish transport guidelines recommend "fishes should not be fed for 24 hours prior to shipment.."* *CITES: Guidelines for transport and preparation for shipment of live wild animals and plants 1981