A few months ago I gave my two cents on agriculture and continued to make some observations along the way. There is one particular industry that stands out and I’d like to delve a bit deeper into this.

Aquaculture

Recently there is this Netflix documentary named “Seaspiracy” that stirred up some discussions among my peers. I watched it, appreciate it but I take the statistics with a pinch of salt because I feel that it’s too much of being a propaganda to wean us off seafood in favour of alternative protein. That’s a pure display of stupidity because it’s simply unrealistic at all. There are also a lot of factual disputes and controversies generated by that film. The key is not about ditching seafood but looking at farmed seafood replacing wild catch.

One major highlight from the film we can never deny is the overwhelming evidence of declining wild catch due to the unscrupulous overfishing. You can always google this topic and get overwhelmed with anecdotes and numbers but I also rely on some common personal observations.

During my childhood, I hardly remember eating any farmed seafood because there were plenty of affordable wild catch. Wild catch was also widely perceived as being tastier and healthier than their farmed equivalent because they live in natural habitat and consume natural food. Fast forward to my current routine, almost half of the seafood I currently consume come from the farm and I foresee that my grandchildren will hardly eat any fish from the wild. In fact, since 2014 the world’s aquaculture production has exceeded wild catch and the gap continues to grow. Just like how we hardly eat any chicken or beef from the wild, seafood will eventually joint the rank and I think aquaculture has tremendous potential because of the following observations.

1. Demand for seafood is enormous simply because our population is expected to grow another 2 billion in the next 30 years and the growing economic prosperity means more people opt for seafood rather than relying on grains to survive. This is evident in China as it has become the largest seafood consumer in the world in line with its growing prosperity. Currently, it’s like a giant vacuum cleaner which is particularly efficient in sucking up all the sea cucumbers from the ocean bed. Now don’t forget our growing standard of living and the penchant for seafood doesn’t just come from China but the entire world. Bear in mind that seafood is also widely favoured by people across different races, cultures and religion.
2. Fish or seafood in general is widely perceived as healthier source of protein compared to red meat. As people have more access to information nowadays, health consciousness is one of the major factors driving consumer behavior.The key is to make sure there is no contamination and drug abuse in the aquaculture food chain.
3. The dwindling wild catch is hard to reverse because it is inherently difficult to enforce any policy to manage fish stock in the ocean spanning multiple jurisdictions. Most countries in the world do not even have enough resources to monitor their vast oceans. You can rely on traffic police and the public complaints to enforce traffic rules but how are you going to do that in the middle of a fucking ocean where the only ones watching are the powerless sea creatures.
4. The advancement of technology has significantly reduced the mortality rate in aquaculture which is one fo its greatest pain points. Through cross breeding, genetic studies and good farm management, farmers have also produced more variety of better quality seafood. All these have led to a growing acceptance of farmed seafood and I hardly come across anyone who still rejects it nowadays.
5. The barrier of entry is not punishingly high but good enough to prevent oversupply because aquaculture is simple but not easy. Anyone can easily build a fish farm but to maintain a sustainably low mortality and to operate a large commercial fish farm competitively is a totally different story. This is probably the reason I don’t see a lot of speculative investments in this sphere. This is a good sign.
6. The adoption of technology in this sector has massive room for improvement and this is what separates the successful giants from the backyard farmers. What I mean is there is a lot of room for growth and innovations that eventually provide an economic moat. In line with the growing emphasis on food security, there is a growing pool of talents and capital piling into agritech looking to solve various pain points in aquaculture. I have this vision that one day we can accurately count the underwater fish stock and track fish health without anyone touching the water. I also have this vision that we can reliably trace the fish source via blockchain technology to ensure food safety.
7. Malaysia still has some natural advantage as we have adequate access to land, water, cheap labour and low energy cost. All these have to be viewed in relative term compared to the global standards because the market has no boundaries if the products are identical. One example to elaborate this is by looking at the attractive chilli plantations that occasionally get whacked by very cheap import from India. You simply cannot overlook your faraway competitors.

Again, I always emphasise that no matter how lucrative an industry, it has its own sets of problems and risks and I’m glad it’s the same for aquaculture. This prevents the crowding of competitors and create a balanced ecosystem for a sustainable growth. I’d set myself a target to revisit the above argument one year from now and see if any of that has changed but for now I don’t see any reason they will. If you have not watched Seaspiracy, please give it a go as it’s quite entertaining but don’t worry too much about the numbers and predictions. Remember this, if any of those doomsday predictions hold water, we all would have died many times already.