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The Economics of Norwegian Salmon Farming: A Review of 30 years of Production Growth

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Abstract
  • Norwegian aquaculture emerged in the end of 1960 when new discoveries transformed production from trout farming to salmon farming. During recent decades farmed salmon has been one of the most successful aquaculture species in terms of production growth. Annual global production has increased from a few thousand tons in 1980 to about 1.65 million tons in 2006. Norway and Chile are today the main suppliers of farmed salmon. Several studies of Norwegian salmon farming have been published over the years, made possible by annual publications of micro data. In our study we characterize the growth in Norwegian salmon aquaculture through summarizing the findings of previous studies and by adding new information. Our purpose is two-folded: We will characterize previous development of the salmon industry and use this insight to assess prospects for future growth both in salmon farming and farming of new species. Our focus is technological change and cost structure i.e., elasticity of scale- and substitution and risk in production. We find a pattern where the industry have exploited most of its scale advantages and where production has become more feed intensive as possibilities of factor substitution has declined. This indicates that there has been an improvement of farming techniques, following from the fact that on-farm learning and R&D efforts has been tremendous in the past thirty years. The unique growth in the production of farmed salmon documents the importance of knowledge in production and sets a vantage ground for development of farming of new species.
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  • Rødseth, Kenneth Løvold and Atle G. Guttormsen. 2008. The Economics of Norwegian Salmon Farming: A Review of 30 years of Production Growth. 14 pages. In: Proceedings of the Fourteenth Biennial Conference of the International Institute of Fisheries Economics & Trade, July 22-25, 2008, Nha Trang, Vietnam: Achieving a Sustainable Future: Managing Aquaculture, Fishing, Trade and Development. Compiled by Ann L. Shriver. International Institute of Fisheries Economics & Trade, Corvallis, Oregon, USA, 2008.
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  • US National Oceanic and Atmospheric Administration (NOAA) Fisheries Division, The Department of Fisheries and Oceans, Canada; Aquaculture CRSP and AquaFish CRSP; Minh Phu Seafood Corporation; Vietnam Datacommunication Company (VDC); Camau Frozen Seafood Processing Import Export Corporation (Camimex); Long Sinh Limited Company; Mai Linh Group and Nam Viet Corporation.
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