Belize Aquaculture’s Demise Poses Questions about the Future of Biofloc Technology
July 26, 2011
On July 14, 2011, Mary Ellen Burris, Senior Vice President of Consumer Affairs at Wegmans markets, a privately held, family-owned supermarket chain in the USA that bought its shrimp from Belize Aquaculture, blogged:
“Belize Aquaculture, the source of our prized Belize shrimp, has been closed. In 2010, Sir Barry Bowen, the owner, was killed in a tragic plane crash. Since then, the various businesses making up Bowen and Bowen, Ltd., have been evaluated. It was decided that Belize Aquaculture (BAL) would be closed.”
For background information on Belize Aquaculture, Ltd., click here.
For background information on the Wegmans/Belize Aquaculture relationship, click here.
The Discussion from the Shrimp List
The demise of Belize Aquaculture, the first big biofloc shrimp farm in the world, sparked a long discussion on the Shrimp List, a mailing list for shrimp farmers, about the economics and sustainability of biofloc technology. For background information on biofloc technology, click here.
Eric De Muylder (firstname.lastname@example.org): I visited Belize Aquaculture a couple of years ago, and I was not at all impressed by their results: a food conversion ratio (FCR) of more than two, to produce a 14/15-gram shrimp is not good. All this was due to their obsession with the carbon/nitrogen (C/N) ratio. Belize Aquaculture used feed with a low protein content (25-28%) and added carbon to the ponds in the form of pellets. Generally, adding carbon to a pond is a temporary solution for a buildup of ammonia that results in more oxygen consumption and excessive biofloc development. In the end you have too much biofloc to produce good results. Removing some of it is the solution, but it adds to costs. Basically, you have added carbon and oxygen to a pond to produce something that you have to pay to get rid of.
To obtain the lowest FCR, the alternative is to use high quality feeds and minimize feeding. The ammonia will be partly assimilated by bioflocs and party oxidized into nitrite and nitrate. To regulate biofloc density and control nitrates, we added a bioreactor that enables us to re-use our water crop-after-crop. The advantages of this system: a lower energy requirement for oxygen, faster growth and lower FCRs.
So according to my opinion, shrimp biofloc technology is still the future of shrimp farming, but the Belize Aquaculture approach should be modified.
Dallas Weaver (email@example.com): I don’t think biofloc shrimp farming is unsustainable; we just need to know more about how to manipulate complex microbiological ecologies. We will have to separate several components of the biofloc system (like mixing from aeration), introduce active management of the suspended solids, seed systems with specific organisms and mix waters from ponds that have bioflocs at different stages.
Eric, I agree on getting the FCR down and using more nitrification in the ponds to reduce the oxygen demand. Having some nitrate in the pond is good at preventing hydrogen sulfide formation, so adding some alkalinity to the water for pH control is acceptable.
Eduardo Ballester (firstname.lastname@example.org): I belong to a group in Brazil that has been working with biofloc technology since 2004. I agree with what was mentioned about Belize regarding the use of excessive carbon and very low protein diets. We believe that high quality protein is needed and that control of suspended solids is a key factor. The inoculation of nitrifying bacteria may also help the build up of nitrite nitrogen. Biofloc systems are more costly than conventional shrimp farming systems, but they promote higher productivity and are more environmentally friendly.
I really believe biofloc systems are the future of shrimp culture.
Patrick Wood (email@example.com): Are biofloc systems cost effective? Or just a big public relations exercise? Southeast Asia and South America are not excited about them. Where is their place? I don’t see them as either a domineering or disruptive technology.
Dallas Weaver (firstname.lastname@example.org): Biofloc and similar methods of intensification present some interesting engineering/economic tradeoffs. You get higher yields per hectare and use fewer hectares with biofloc systems, but your capital costs and energy costs per hectare are higher. If land and water are cheap, the balance shifts to using land and lots of water. Even if we understood enough to really control the microbiological ecology in biofloc systems, the flow-through farms would still exist.
Durwood Dugger (email@example.com): Eduardo, “Environmentally friendly” unfortunately doesn’t have a universally accepted economic description or value, and until it does, those countries expending the least costs to protect the environment will continue to have an economically competitive advantage over those companies in countries being forced to pay for protecting the environment.
Sean Mulvey (firstname.lastname@example.org): In the United States, we have an almost unlimited supply of land in the western prairies and northern Midwest states, where people have been leaving for job opportunities elsewhere. Some school districts have all of their buildings up for sale because the number of students has dropped so drastically.
If there is a way to grow shrimp economically, land may be the least of the issues. I think taxes on the land are more likely to be the issue, not the land itself.
In the USA, we are setting the bar so high for business that any sane investor is going to look elsewhere.
Dallas Weaver (email@example.com): Looking at food conversion efficiencies, shifting from chicken and pig production to even extensive shrimp production would use less area per pound of meat produced. The corn, soy and other grains that go into any meat production system occupy huge swaths of land, but the actual production facilities are relatively small. Getting a better FCR than chickens and pigs makes shrimp look very good. As for water, saltwater is not a limiting resource beyond the energy to pump it.
Durwood, if you view a high intensity shrimp pond as a source of NPK (nitrogen, phosphorous, potassium) nutrients, it seems like it is theoretically possible to bio-react that water with a cellulose that produces a single-cell protein detritus that could serve as shrimp food, thereby removing the ammonia from the water while producing a food supplement for recycle. It’s a carbon/nitrogen ratio game using cellulose, and the biological reaction would not have to be in the shrimp pond.
Visualize a slow rotating drum with bagasse and something like plastic saddles or even rocks to keep the structure open for aeration with shrimp pond water passing through it. The biomass growing on the cellulose could then make a single cell protein for the shrimp. Seeding the bioreactor with desirable fungi and bacteria would help even more. This could get a lot of the oxygen demand associated with C/N systems out of the pond.
With proper seeding of cellulose bioreactors, one could actually feed NPK fertilizer into the system to increase the single cell protein food production and eliminate part of the pellet feed for the shrimp. In traditional row-crop agriculture, much of the NPK in the soil leaches away after heavy rainstorms. Leaching would not be a problem inside a bioreactor.
Bagasse or other cellulose waste, plus shrimp pond water, plus NPK equals single cell protein, shrimp feed and water treatment. That would be a fun R&D project. If it worked, the production cost of shrimp could be below that of chicken!
Patrick Wood (firstname.lastname@example.org): Sean, if you were to pack up all the assets in Belize and move them to a prairie state in USA, what would your running costs be? Wouldn’t your energy costs be prohibitively high?
David Griffith (email@example.com): Electrical costs are about five times that in much of Latin America, and in Belize, they might even be higher [Editor, In 2009, Belize Aquaculture installed its own power plant to lower its energy costs].
Can anyone comment on electrical costs in Thailand and Indonesia?
David Knott (firstname.lastname@example.org): Durwood, what you say about competitive advantage is true enough, but isn’t it a bit sad to think that anyone has to be “forced” to protect the environment? I suspect that those who don’t are the ones who don’t give much thought to the future of the industry beyond what it can provide only them.
Durwood Dugger (email@example.com): David, every human has an altering impact on the environment. It’s more of our birth deficit than our birthright. We can only limit our impacts to a certain degree and if not done collectively, then we tend to cancel out each other’s efforts. If you want to dramatically limit human impacts, then you have to dramatically limit the human population, which isn’t happening and isn’t going to happen any time soon. We are far more likely to reach critical pandemic population levels than we are to get a consensus on globally planned, population management strategies.
Much of government mandated “environmental protection” is not protection at all. It’s individual power brokers using their political and economic skills to benefit themselves. Pushing industries (like shrimp farming) to undeveloped countries completely without environmental standards, or a broad understanding of what and why they might be, while out of sight to the developed country’s environmental conscience, is the “worst” kind of “environmental protection” and in the long run economic idiocy—which the USA Government has been grossly guilty of for the last 40 years.
Until industry (not just shrimp farming) sees some kind of global and effective environmental protection of shared responsibility and costs, I suspect it will continue to be “forced” to take on unbalanced and unfair environmental burdens by the not-in-my-backyard, small-minded voters and their respective politicians in nations like the USA.
And so is the claim—“It’s because of environmental protection laws that USA growers can’t compete”, which gets repeated in different formats ad nauseum without a lot of evidence.
Extensive farms (in Ecuador and Honduras, for example) built on otherwise useless land use very little energy and fish meal and get good FCRs. They are probably just as environmentally friendly as small intensive operations.
And so is the claim—“Pushing industries (like shrimp farming) to undeveloped countries completely without environmental standards—or the broad understanding of what and why they might be, while out of sight to the developed country’s environmental conscience—is the “worst” kind of “environmental protection”.
The fact that a large number of farms, hatcheries and plants operate in a large number of different countries under unified and independently certified standards (for example GAA/ACC, GlobalGAP and others) would suggest that in fact there is a pretty good understanding what environmental standards are. The fact that the bodies leading the certification process are all first-world based and supported by the larger buyers of shrimp in these same developed nations indicates that the production by underdeveloped nations is not in fact out of the environmental conscience, but right smack in the middle of it.
There are a large number of companies doing a damn good job of producing in an environmentally friendly fashion in underdeveloped countries. The fact that USA legislation is anti-aquaculture is no justification for attacking the competition.
David Knott (firstname.lastname@example.org): Durwood, it’s possible that the “pushing” is accomplished not so much by power brokers, but rather by those who desire to avoid the cost of lessening the avoidable damaging impacts by taking their action somewhere that the power brokers aren’t particularly concerned about environmental problems.
What a gloomy picture you paint of the global future. With the USA, seemingly charting the course and nobody doing the right thing until everyone else does so, with the powerful and greedy running the show and the small-minded voters paving the way, I need to stop thinking about it for a while.
But don’t get me wrong. The shrimp farming industry is far from the forefront in subscribing to this rationale. For that reason, I’m going to refrain from serially replying to the responses my comments might evoke. I wouldn’t mind, though, hearing from you off-list about any thoughts you might have about the source of the Penaeus monodon that have been showing up in commercial trawl landings from North Carolina to Texas since around 2006.
Eric De Muylder (email@example.com): One important point was not raised in this discussion. Biosecurity! Legions of farms fail every year because of disease organisms that arrive with the incoming water. Re-using your water might be the only secure way of farming shrimp in some areas.
I don’t agree that biofloc farming is not practiced in Asia. In fact, it started there a long time ago when farmers tried to reduce water exchange by putting more paddlewheels in their ponds to reduce disease problems. A lot of intensive farms in Asia are in fact (or partly) biofloc farms.
If electricity is cheaper in the USA, heat is basically free, biosecurity is assured and a ready market is on the doorstep, what is holding back shrimp farming in the USA. Is it legislation? It certainly isn’t money. Surely it can’t be lack of expertise. Is it that there is no proven USA technology, just lots of R&D?
I’ve heard that soon there will be a fully covered, large-scale shrimp farm in China.
Durwood Dugger (firstname.lastname@example.org): Patrick, no, that isn’t what I said. Bioflocs occur in all open ponds. The enhancement of them through carbon/nitrogen balancing and the shifting of those flocs to ones with bacterial dominance is a purposeful technical management process—a technology in it’s own right. Is it responsible for a significant amount of shrimp production? No. It’s more expensive than flow-through technology, which is the dominant technology in the shrimp farming industry and the lowest cost production model. If there is no discharge from biofloc operations then it has far less environmental impacts than the typical Asian flow-through shrimp production model. If the biofloc is simply discharged during harvest, however, the environmental differences are far less, to the point of being insignificant.
Meeting USA environmental standards and all that entails is the largest category of “costs of doing business in the US”—and those costs include indirect legal costs associated with environmental related problems, such as legal liability.
Offshore producers don’t have to comply with USA environmental standards and related costs, and they don’t even get close to meeting them—certified or not—but most especially limiting is that they get to set the price of shrimp in the USA based on their lower cost of doing business outside of the USA. That’s the central problem of USA shrimp production economics.
David Griffith is correct; it isn’t the foreign producers’ fault or problem. The USA’s hypocrisy is the double environmental standard by the USA Government and an ignorant USA consumer (shrimp marketing studies show that the consumers number one concern is shrimp price, then shrimp size, then shrimp quality, and far down the list is country of origin). The USA Government has one set of standards for USA producers, but it’s just fine with shrimp imports from foreign producers that don’t have to meet those standards. Far, far less than 1% of incoming shrimp are even inspected by the Food and Drug Administration—so much for consistent quality assurance.
As a result, we have no significant shrimp production in the USA in spite of having paid for the basic development of a lot of the shrimp farming technology that’s in use around the world. Again, that isn’t the fault of foreign producers; they are simply responding to economic incentives created by the USA Government. Clearly, it isn’t just aquaculture that has moved offshore because of the negative economic incentives of the USA Government. Worse, this trend of our government failing to provide positive incentives for USA producers—shrimp included—shows no signs of letting up any time soon. Admittedly, that trend reflects the attitudes and knowledge level of the majority of USA voters.
My concern is not the environmental standards of foreign shrimp farmers—unless they market their product in the USA. I’m not attacking foreign producers; I’ve certainly worked with and for my share of them, but I would like to be able to produce shrimp in the USA on a level economic playing field, not one severely and purposefully tilted to offshore producers benefit, by design or not. Clearly foreign producers have come a long way environmentally from the mangrove slash-and-burn technology in the industry’s earlier days (though the primary loss of mangrove was then and still is from charcoal producers, not shrimp farmers), but they aren’t anywhere close to having to meet the environmental standards imposed on would be USA shrimp producers, certified or not.
When foreign producers are forced by legislation to produce shrimp in zero-discharge systems, rather than their typical flow-through systems, then economic competition might be possible. As you and Sean point out, there are sites and situations in the USA where actual shrimp production operating costs could be at least theoretically competitive with offshore production costs, and most importantly, the USA is the cheapest feed ingredient producer in the world (up to 60% of shrimp production operating costs), but recirculating systems have a much higher capital requirement and are more expensive to operate than flow-through systems. Until foreign producers face similar environmental standards as USA producers—essentially zero discharge—and their production costs reflect those standards, then we will continue to import 99.9% of our farmed shrimp from places where USA environmental and other costs of doing business aren’t experienced.
The unusually high “cost of doing business” as a shrimp farmer in the USA is very real, and I disagree with David Griffith: The environmental components of those costs are significant and very documentable. With no significant USA shrimp farming in the USA, however, who has the financial motivation to document those costs? Who can spend more money lobbying Congress than the USA seafood industry buyers? The major USA shrimp buyers (restaurant chains and distributors, and their customers) openly admit, and logically so, that they are happy as clams with the low-priced shrimp from Asia. They certainly aren’t going to support anything that will raise the price of their shrimp, like shrimp produced under USA environmental standards. Logically they have financially supported the certification of foreign shrimp farms, which is beneficial environmentally in general, but admittedly, it also helps preserve those low prices while doing nothing to change the status quo regarding the double standard of USA environmental and aquaculture policy of allowing non-USA environmental standard farmed shrimp unfettered access to USA markets. It’s a complicated problem with arguments, arguably on both sides.
Are there any zero discharge recirculating commercial shrimp production systems in Asia producing significant quantities of shrimp? I’m not aware of any. “Environmentally friendly” like “environmental costs” also lacks quantitative substance. Patrick, I would like to know more specifics of the enclosed system effort you mentioned in China. Will it be recirculating and zero discharge? When there are predominately zero-discharge farms in Asia, I think you’ll see a boom in USA shrimp farming based on rising production costs in Asia, not on any intelligent aquaculture or environmental policy developed by USA politicians because they aren’t financially motivated to do so, at least based on the past 40 plus years of USA history.
“If electricity is cheaper, heat is basically free, biosecurity is assured and a ready market is on the doorstep, what is holding back the US? Is it legislation because it certainly isn’t money.”
There isn’t one reason why the USA doesn’t have a shrimp farming industry; there are many:
1. We don’t have the affordable coastal land for “traditional” pond culture. Even if we did, we would only be able to get one harvest per year, at best.
2. Inland shrimp farms have trouble finding good supplies of quality water and still only get one crop per year.
3. We have a history of giant boondoggles in indoor shrimp farming, for example, several projects in Texas, and sadly, it looks like a new one in Las Vegas.
4. So far, people with no history in commercial-scale, commodity-competitive shrimp farming have developed almost every indoor shrimp project in the USA.
5. Money is the problem!! The USA financial system is set up to protect those that have money and make it really difficult for those that need money. It is a legal nightmare and very expensive to put together the documentation you need to legally raise significant funds for developing a project. If you go the venture capital route, you are faced with the fact that these guys are just not geared to funding long-term projects, and our tax system reinforces that. They want a giant piece of your company and they want returns (their investment back) in 8-24 months. You can do that with dot coms or flipping real estate, but you can’t do it with shrimp farming.
As a new industry for the USA, shrimp farming has no chance for bank funding or money from venture capitalists. You are pretty much stuck looking for angel investors or government help, neither of which is likely to be much help in the current USA economy.
If you have some cash, however, and put it into a fancy web page full of exaggerated statistics, you can get some very expensive, short-term money. No way to start a viable business.
If we are to develop any kind of new, long-term industries in the USA, the country is going to have to radically change the way it taxes and the way it invests, and I’m afraid that our lobbyists would never allow that.
The Chinese Embassy contacted me a couple weeks ago. The Chinese are actively looking for indoor technology. I told them they could invest in my technology here and I’d be happy to export shrimp to them. Never heard from them again.
We have the technology. We have the resources. Environmental regulations are not the problem. I have been growing shrimp indoors for over 16 years. My local environmental agencies love me. I have no problems with permits or any other kind of governmental or regulatory issue. My customers love the shrimp, and I can’t produce enough of it. But, so far, nobody has come up with the money to finance an industrial-scale project.
About Belize Aquaculture: I designed and built the original project. It was built with one-acre ponds. It was in those ponds Robins McIntosh got all his terrific production numbers. It was Barry Bowen who insisted on going to bigger ponds (the only time he ever tried to save money). Ponds larger than one-acre don’t work to maximum efficiency. He also spent way too much money making the farm look nice. That said, I’m not a great fan of bioflocs. I don’t think that they are the future of shrimp farming. If there are any brave souls out there, I have a new iteration of the Belize Aquaculture model that is based upon my indoor work that I think could be the future of outdoor pond production.
Additionally, I’m about ready to hang it up here in the USA, if capital does not come in the next couple months, I’m moving on. I’m willing to entertain offers.
Dallas Weaver (email@example.com): Durwood, my understanding is that many farms in Asia are now operating at near-zero discharge and managing their microbiological ecology. Apparently they are doing a lot of nitrification with their flocks, but that makes for a tricky transition from the wild pH swings of algae dominated ecologies to a high nitrification system without a extra high unionized ammonia or nitrite spike killing everything.
Regarding permits in California, even if you owned coastal land and wanted to build a zero discharge system, you couldn’t get a permit for a two-inch pipeline of salt water to fill the system in my remaining lifetime. Importing cooler water shrimp species would require a two-year health history of shrimp that were free shrimp of almost all pathogens (not just the usual shrimp pathogens). If it isn’t a native species, even more permitting problems arise, which even apply to zero-discharge systems (unless it’s for the aquarium market). Our bureaucrats in the California Department of Fish and Game claim all these rules are to protect our environment from the nasty shrimp virus creating problems around the world, but these same bureaucrats allow fishermen and bait dealers to sell frozen shrimp from anywhere in the world, including known emergency harvested diseased shrimp (good for bait, it’s cheap).
Along with the permit issues in the USA, we also have weather issues. It isn’t warm enough year round. To get year around production, we would need several species of SPF animals to comply with the regulations.
Patrick Wood (firstname.lastname@example.org): I disagree with your venture capital outlook. It’s not all short-termism, but fairly normal business practice to run for 5-10 years with an exit strategy. One needs initially to create a small team of 3-5 solid professionals with diverse but complementary skills and commitment to develop the opportunity, projections, products, and services to enter the business.
It seems like you may be fine on the pure technological side, but stumbling on the finance and business side?
I don’t understand why your 16 years of success can’t be levered into a successful business plan, unless it’s not profitable enough, which would put it in the same boat as the Belize project.
Do you have a plan to turn around the Belize project, or is it a case of a flawed project that would be better rebuilt elsewhere?
I am currently collaborating with venture capital and private equity funds that are looking at shrimp farming options.
Durwood Dugger (email@example.com): Dallas, any references on the number of Asian farms not discharging at least some of their effluents? I believe there are some in Thailand, but I think Viet Nam, Indonesia, India and China might be very different.
Jun Dejay (firstname.lastname@example.org): I don’t know how many zero-exchange shrimp farms there are in Vietnam, but our zero-exchange farm has 1,200 hectares.
Billy Setio (email@example.com): In Indonesia, many shrimp farms began using bioflocs and minimal water exchange this year. It’s going to take them awhile to refine their techniques, but already, those that are using bioflocs are seeing less IMNV, the deadly shrimp virus.
As far as Belize is concerned, I guess it’s purely financial and has nothing to do with the floc.