The following is an opinion piece written by the chairman of SalMar Aker Ocean, Atle Eide, originally appearing in Norwegian on IntraFish.no.
More and more salmon and trout are squeezed into too small of an area. The number of exposed smolt in 2022 increased by 5.8 percent, while the permit volume (area) increased by 1.5 percent. The same figures for the previous year were 3.5 percent and 1.5 percent.
The effect is increased costs, high mortality and aggressive lice attacks.
After the figures for the fourth quarter were presented, several equity analysts believe salmon farming costs should decrease. "It will be better next year" was the refrain. The fact is, it's getting worse.
The production cost of salmon has increased every year since 2010, except for 2012, where there was a marginal decrease. In 2022 -- based on early estimates -- it will reach an all-time high.
If these biological challenges continue, it will soon be more cost-effective to produce salmon in land-based systems. In the large growth markets that require air transport, land-based production will also be more environmentally friendly.
If I were Norway's prime minister, this development would worry me. Salmon could be a lost opportunity if Norway doesn't play its cards right.
The government likes to compare the salmon farming industry with the oil industry when it discusses the so-called "ground rent" tax. But instead of similarities to justify the tax, they should look at the differences in how the government has supported the two industries if it is growth they are after.
The Norwegian government uses massive, targeted management resources to clear growth in extraction areas where companies can apply to produce oil. The oil companies -- many of them foreign giants, by the way -- come to a "set table." Norway's remarkable growth in the oil sector has been more than facilitated by the government.
For salmon farming, the state does virtually nothing. Counties and municipalities have set up a bureaucratic, long-winded process where case management resources are often insufficient.
Once a producer has found a suitable area -- which is like looking for a needle in a haystack -- there is no help in the process of getting the area approved. For the oil industry, the state leads the way and paves the way. For the farming industry, the state is not present in the processes at all.
And almost no new areas are approved. In the last two years, growth in the number of licenses has been below 1.5 percent. Growth in available areas has increased by 1.5 percent. This marginal growth stands in stark contrast to the government's stated goal that the farming industry should be a growth industry.
The result of the state not making arrangements for more and better areas to farm is increased costs and a halt in growth and development. In the worst case, the state's neglect and absence leads to impaired animal health and decreasing profitability.
Going forward, growth in salmon production will take place on land, close to the large consumer markets. Cheaper and more environmentally friendly. Salmon will be "the lost opportunity."
Why does the state not want to facilitate growth and responsible development for the renewable and sustainable resource -- salmon -- while it is willing to do everything it can to create growth in oil?
Why are such enormous resources used to facilitate growth in oil production, but nothing for sustainable salmon production. Shouldn't it be the opposite?
Is it because the workplaces are in small, coastal communities and not in the big cities? Or could it be that the salmon sector lacks the power and resources of the global oil companies to influence the government?