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18.1 Introduction: Beyond Myths

4 months ago

8 min read

Although we have witnessed the first research developments in aquaponics as far back as the late 1970s (Naegel 1977; Lewis et al. 1978), there is still a long road ahead for the sound economical assessment of aquaponics. The industry is developing slowly, and thus available data is often based on model cases from research and not on commercial-based systems. After initial positive conclusions about the economic potentials of aquaponics in research-based settings of the low-investment systems in USA, primarily the system in Virgin Islands (Bailey et al. 1997) and Alberta(SavidovandBrooks 2004),commercial aquaponicsencountered ahigh level of early enthusiasm in business contexts, often based on unrealistic expectations.

To provide a specific example, in its early market forecast, IndustryARC (2012) anticipated that aquaponics as an industry has a potential market size of around \$180 million in 2013 and is expected to reach \$1 billion in sales in 2020. Later they projected aquaponics to increase from ​\$409 million in 2015 to ​\$906.9 million by 2021 (IndustryARC 2017). The same report (IndustryARC 2012) provided a number of yet untested claims about aquaponics, for example, about the economic superiority of aquaponics in terms of output, growth time and diversification possibilities in a commercial setting. We name such claims here as "aquaponics economic myths" that have been a typical part of the early internet-fuelled hype on commercial aquaponics.

Take a look at their statement: "Aquaponics uses 90% less land and water than agriculture but has the potential to generate 3 to 4 times more food than the latter also" (IndustryARC 2012). Comments such as these are extremely vague, since it is not clear what exactly aquaponics is being compared to when the authors are referring to "agriculture". Although aquaponics does use less water than soil-based food production, since the water used in soil-based production can be lost in the soil, not being absorbed by plants compared to staying in a recirculation loop with aquaponics. The exact amount of water savings depends on the type of the system. Additionally, "3 to 4 times more food" seems highly exaggerated. Aquaponics can have yields comparable to hydroponics (e.g. Savidov and Brooks 2004; Graber and Junge, 2009). Yet the statement glosses over the fact that at least in coupled aquaponics so-called operational compromises need to be made in order to find a balance between optimum parameters for healthy plants and fish (see Chaps. 1 and 8 of this manuscript), which can lead to aquaponics having lower outputs compared to hydroponics.

Therefore, statements like the above lack a clear definition of the reference scenario and the reference unit of comparison. In an economic assessment, higher output levels can only be compared meaningfully if there is a clear reference to the input levels required to achieve this output. In the assessment of aquaponic systems, higher outputs per area might be achieved compared to conventional agriculture, yet aquaponic systems might require more energy, capital and work input. Only referring to land as an input factor assumes that other production factors are not scarce, which is hardly the case. Therefore, statements like the above neglect the "all other things being equal" principle in economic assessments. Vaclav Smil (2008) calculates and summarises energy expenditure of different agricultural activities, utilising energy as the common denominator, and this allows us to compare different agricultural methods with the aquaponic approach.

A similar myth is contained in the statement: "A major advantage pertaining to the aquaponics industry is that crop production time can be accelerated" (IndustryARC 2012). An acceleration of crop production necessarily depends on the amount of nutrients and water, oxygen and carbon dioxide in the surrounding atmosphere and light and temperature available to crops — factors that are not elements of aquaponics per se but can be added via greenhouse management practices, such as fertilisation and irrigation heating and artificial lights. These additional elements, however, increase both the costs of investment and the operational costs, often being too expensive to be economically viable (depending of course on the location, type of crops and especially the price of crops).

Another economically important advantage of aquaponics provided in the report was that "aquaponics is an adaptable process that allows for a diversification of income streams. Crops may be produced depending upon local market interest and the interest of the grower" (IndustryARC 2012). What statements like this gloss over is the fact that diversification of production always comes at a price. Crop diversification necessarily includes higher levels of knowledge and higher labour demands. The larger the variety of crops, the more difficult it is to meet optimum conditions for all the selected crops. Large-scale commercial production thus looks for constant parameters for a limited number of crops that need similar growth conditions, allowing for large outputs in order to penetrate distribution via large distribution partners such as supermarket chains, and allow for the same storage and potential processing equipment and processes. Such large-scale production is able to use economies of scale to reduce unit costs, a basic principle in economic assessment, which is not usually the case for aquaponics at smaller scales of production.

Finally, the most important statement provided in the report was that "the return of investment (ROI) for aquaponic systems ranges from 1 to 2 years depending on the farmer experience as well as the scale of farming" (IndustryARC 2012). Such statements need to be taken with extreme caution. The scarce data that is available on return on investments reports on a much longer time: According to Adler et al. (2000), it takes 7.5 years of return for an approximately \$ 300.000 investment in the hypothetical scenario of a rainbow trout and lettuce system. Recently, Quagrainie et al. (2018) reported a similar period of 6.8 years for the payback of an investment in aquaponics if the products can only be sold at non-organic prices. Real data on the economics of aquaponics is extremely hard to come by, since the enterprises that have ventured into commercial aquaponics are reluctant to share their data. In cases where enterprises are performing well, they either do not share their data, since it is considered a business secret, or if they do share data, such data needs to be taken with caution since typically these companies have an interest in selling aquaponic equipment, engineering and consultancy. In addition, enterprises that have failed in achieving profitability prefer not to publicly share their failures.

These "myths" are continually circulating online amongst non-experienced aquaponic enthusiasts, fuelled by hope for both high returns and a path towards more sustainable future food production. So there is a need to go beyond the myths and look at individual enterprises and provide an in-depth analysis on the basic and the general economics of aquaponics.

Even if realistic data on aquaponics were available, it has to be considered that such analyses are based on single cases. As aquaponic systems are far from technically standardised production systems, the diversity with respect to marketing concepts is even higher. So, data on every single aquaponics system lacks generalisability and can be regarded only as a single case study. General statements are therefore not valid if the framework conditions and technical and marketing specificities are not made transparent.

Journalistic publications about aquaponics often follow a narrative that elaborates on the general challenges of global agriculture, such as shrinking agricultural areas, humus loss and desertification, and then elaborate on the advantages of aquaponic food production methods. Apart from the above-mentioned mistake that in fact controlled environment system (CES) production is compared with field production, no distinction between agriculture and horticulture is made. Whilst the term "agriculture" technically includes horticulture, agriculture in its more specific sense is the large-scale crop production on farmland. Horticulture is the cultivation of plants, usually excluding large-scale crop production on farmland, and is typically carried out in greenhouses. Following these definitions, the plant side of aquaponics is horticulture and not agriculture. Thus comparing yield and other productivity properties of aquaponics with agriculture is simply comparing apples to oranges.

To state this differently, the horticulture side of agriculture is only a very small part of it. Large-scale crop production in agriculture mostly encompasses so-called staple food production: Cereals like corn, barley and wheat, oilseed like rape and sunflower and starchy root vegetables like potatoes. The agricultural area of Germany covers 184.332 kmsup2/sup (Destatis 2015). Of that only 2.290 kmsup2/sup (1,3%) is used for horticulture. Of the horticultural area, 9.84 kmsup2/sup (0,0053%) is protected and under glass. Absolute and relative figures for other countries surely differ, but the example clearly shows that the plant side of aquaponics will only be able to substitute and thereby enhance a small fraction of our food production. Staple foods can theoretically be produced in CES under glass using hydroculture as demonstrated in NASA research (Mackowiak et al. 1989) and could surely also be cultivated in aquaponic systems, but due to the high investment needed for such production, it does not make sense to think of aquaponics replacing the production of these crops under the current global economic and resource conditions.