Aquaculture 445 (2015) 70–78
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The battle of the eyed egg: Critical junctures and the control of genes in Norwegian salmon farming Bernt Aarset a,⁎, Svein Ole Borgen b,1 a b
School of Economics and Business, Norwegian University of Life Sciences, P.O. Box 5003, NO-1432 Aas, Norway National Institute for Consumer Research, P.O. Box 4682, Nydalen, NO-0405 Oslo, Norway
a r t i c l e
i n f o
Article history: Received 20 June 2014 Received in revised form 6 April 2015 Accepted 12 April 2015 Available online 17 April 2015 Keywords: Salmon breeding Atlantic salmon Triple helix Innovation Knowledge production
a b s t r a c t In the pioneering period (1970s) of Norwegian salmon and trout aquaculture, the biological knowledge underlying this industry evolved in an institutional world of open science. Universities developed novel breeding techniques, and small grow out mom-and-pop farms implemented them. Eyed eggs were generic and standardized products, and traded at the lowest possible cost. As an eyed egg, the fry and in particular the eyes are visible through the membrane. The interplay between the regimes of open science and proprietary science has changed significantly in salmon aquaculture over the last two decades. One aspect of this change is that husbandry breeding has become more industrialized and subsequently more controlled by large, specialized and capital intensive breeding corporations. This paper explores this development from the perspectives of process-oriented institutional theory. We identify critical junctures in the coevolution of the breeding and grow-out sectors, and analyze how these junctures structure and change the direction of industrial and economic development. Ultimately, the generic, standardized and undervalued eyed eggs were subject to revaluation by the novel dominant international actors in the Atlantic salmon industry. We primarily draw data from interviews with core actors and informants at relevant universities, breeding companies and governmental agencies, as well as from white papers and other secondary material. © 2015 Elsevier B.V. All rights reserved.
1. Introduction A series of studies have emphasized how the organization of natural and social resources explains the success of Norwegian salmon aquaculture (Aarset, 1998; Didriksen, 1987; Hersoug, 2005; Jakobsen, 1996). The industry has benefitted greatly from a competent, motivated, and well-organized group of husbandry geneticists. Advancement in the breeding of salmon has been significant (Gjedrem, Robinson, Rye, 2012) but the impact of these scientists' contributions has been under-communicated.2 Initially, the geneticists disseminated their knowledge openly and without compensation to the fish-farmers and the farmers took the gradual improvement in the productivity of farmed fish for granted. Recent developments in biotechnology have increased the geneticists' capacity to improve the productive traits of farmed Atlantic salmon (Dunham, Taylor, Rise, Liu, 2014; Gjedrem, Robinson, Rye, 2012) and the eyed eggs have become potent packages prepped with advanced biotechnology, wrapped up in a thin membrane and
⁎ Corresponding author. Tel.: + 47 92 25 78 53. E-mail addresses:
[email protected] (B. Aarset),
[email protected] (S.O. Borgen). 1 Tel.: +47 22 04 35 78. 2 Personal communication with Per Olav Skjervold, independent consultant and aquaculture entrepreneur, October 26th 2011.
http://dx.doi.org/10.1016/j.aquaculture.2015.04.016 0044-8486/© 2015 Elsevier B.V. All rights reserved.
ready to be sent to the grow-out segment. In the process, scientific knowledge has become a high-priced, tradable commodity, highlighting issues related to the control and ownership of genetic material (Olesen, Myhr, Rosendal, 2011; Olesen, Rosendal, Rye, Tvedt, Bentsen, 2008; Rosendal, Olesen, Tvedt, 2013). In this study, we analyze the industry-specific coevolution of growout farms and the organized breeding of salmonids in Norway. First, we investigate breeding and grow-out of salmon in a historical context, and identify critical junctures in the development of modern salmon farming. Second, we analyze the transformation of salmon breeding from its start as a publicly funded, research-driven applied breeding program to an enterprise dominated by private corporations and investors. In particular, we assess the impact of the expanding fields of biotechnology and genetics on this transformation. Third, we discuss the industrial implications of the production and application of new biotechnological knowledge. The production of scientific knowledge requires significant investments, and both public and private investors seek returns on their investments in the form of profits. Securing revenue from investments in biotechnology further requires protection of the investment patents, for example. An examination of Norwegian salmon farming has significant value for other studies of the industrialization of aquaculture, as the development of salmon farming parallels other ventures in industrial aquaculture (Bostock, McAndrew, Richards, Jauncey, Telfer, Lorenzen, Little,
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Ross, Handisyde, Gatward, Corner, 2010). Characters common to many such ventures include delicate regulation issues over access to common aquatic areas, and pertinent market access issues impacted by the advances of biotechnology, followed by the demand for more complex intellectual property right regimes. Our empirical analysis concentrates on critical junctures understood as historical situations that allow for strategic action and change (Weir, 1992), using in-depth interviews with expert personnel. We selected informants based on their significant record in the history of Norwegian aquaculture. In addition, we systematically examined written material, such as reports, articles, and public policy (white papers). This triangulation of methods ensures a high level of precision in our analysis and presentation of the present rise of advanced biotechnology in fish farming. Our case study of Norwegian salmon farming is a thick description of the industry (Geertz, 1973; Redding, 2005), which ensures high external validity. Salmon farming is one of Norway's major industries, with an on-thedock value in 2013 of NOK 37.5 billion (Directorate of Fisheries, 2014). In 2011, 62% of the global production of farmed salmon originated in Norway (Norwegian Seafood Council, 2012) while direct employment in the Norwegian industry was 5526 employees (Directorate of Fisheries, 2014). Although production has risen considerably, the total number of licenses has remained somewhat above 900 for the last 15 years. Ownership of the grow-out sector, however, has been continuously concentrated since the removal of the ownership regulation 20 years ago. In 1990, the ten largest grow-out companies accounted for 8% of the licenses. By 2001, this number had increased to 46% (Aarset, Jakobsen, 2009) and to 65% in 2012 (Report to the Storting, 2012–13 no. 22). In 2012, the single largest grow-out company alone controlled 22% of the licenses. In the present article, we focus on the transformation process from the 1960s through to 2013 within the Norwegian salmon-fishing industry. First, we develop a theoretical model consisting of four main internal and external explanatory factors of the transformation process. Next, we analyze the transformation process, and demonstrate the prevalence of critical junctures and their impact on the coevolution of farming and breeding. Our analysis also clarifies how the idiosyncratic development of industrialized Norwegian salmon aquaculture has resolved certain challenges and created new ones. Third, we integrate two major dimensions of our study: the evolution of the industry from a mom-and-pop enterprise to a modern seafood industry, and the merging of the historically separate sectors of breeding and grow-out in salmon farming. Finally, we explain how the role of breeding (and “eyed eggs”) has been repositioned, subject to revaluation within salmon aquaculture. 2. Analytical framework Institutional theory provides concepts that support our analysis of anomaly situations that typically arise when the structure of an institutional system loses explanatory power and falls apart. Prominent concepts are “creative destruction” in innovation theory (Schumpeter, 1934) “window of opportunity” in historical-institutional theory (Hall, Taylor, 1996; Thelen, 2003; Weir, 1992) and “external shock” in institutional theory (Scott, 1995). The anomaly allows new components to connect (Kuhn, 1962) at critical junctures (Collier, Collier, 1991). In our analysis, critical junctures are the arenas that provide gatekeepers with opportunities to decide which components can connect, and when. Three properties define critical junctures: 1) a claim that a significant change has occurred, 2) a claim that the change took place in a distinct way, and 3) a verified explanatory hypothesis about the consequences of the change (Collier, Collier, 1991). In our empirical study, we focus on four explanatory factors. Two of them — evolving political regulation and merging industry structures (i.e. concentration of market power) — are internally driven processes. The other two — advancement of biotechnology and evolving regime of proprietary science — are processes driven by macro features,
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exogenous to the aquaculture sector, but with significant and growing impact on the development. 2.1. Evolving political regulation Due to the position of the seafood sector in the Norwegian economy, the government took the role of an active partner in the national salmon farming endeavor. Several studies demonstrate how institutional engineering and political maneuvering were used to collect and organize public resources to build the salmon aquaculture industry in the 1970s and 1980s (Didriksen, 1987; Official Norwegian Reports, 1977 no. 39). In the 1980s, the industry experienced a steady growth. The government endorsed this development (Official Norwegian Reports, 1985 no. 22). A significant shift occurred in the 1990s, however, with the removal of the mandatory Fish-Farmers Sales Organization3 (hereafter: Sales Organization) and the lifting of ownership regulation (Aarset, Jakobsen, 2009). These changes were in line with general changes in political institutions of the era, in favor of neo-liberal thought (Lindvall, Rothstein, 2006), opening the door for new structures of economic organization to emerge. 2.2. Emerging industry structures Salmon farmers are economic actors and, as such, are in constant pursuit of returns on their investments. Fisheries economists conclude that the constant market pull sustained with continuous productivity growth are the main drivers of the growth of the Norwegian fishfarming sector (Asche, 2008; Tveterås, 1999). Emerging industry structures have coevolved with political institutions, and supported the farmers' search for costs to cut. Over time, significant changes have taken place in the structure of the industry. Asche et al. (2013) indicate that the productivity growth is now slowing down. New drivers for productivity are therefore called for. 2.3. Advancement of biotechnology Since the turn of the millennium, the advancement of biotechnological methodologies has revolutionized breeding techniques in agriculture industries worldwide (Salgotra, Gupta, Stewart, 2014; Tribout, 2011). Access to these methodologies has also triggered industrial interest in the breeding of salmon. Breakthroughs in biotechnology and husbandry genetics have paved the way for novel developmental paths for food producers, such as more affordable and adapted products, improved quality, and more cost-efficient production. Biotechnological innovations will become increasingly consequential for the organization of knowledge production as well as for business models in aquaculture (Rosendal, Olesen, Tvedt, 2013). 2.4. Evolving regime of proprietary science The relationship between government, academia, and industry are known as the triple helix, a concept borrowed from genetics, and launched to analyze the impact of these sectors of public life on economic development and innovation (Etzkowitz, Leydesdorff, 2000). Two different configurations of the triple helix confront each other in the application of biotechnology in aquaculture. One perspective, CUDOS,4 emphasizes the sharing of information and ideas as the driver of the scientific progress (Merton, 1973; Rhoten, Powell, 2007; Schweik, 2007). Here, idea generation is a cooperative process involving exchange of experience, problems, and knowledge leading up to the distillation of new ideas. On the other hand, in the PLACE5 perspective, a 3
In Norwegian: Fiskeoppdretteres Salgslag AL. CUDOS, acronym for communalism, universalism, disinterestedness, originality, skepticism. 5 PLACE, acronym for proprietary, local, authoritarian, commissioned, expert science. 4
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company that invests in any kind of science will develop a strategy for making a profit. In this perspective, science is a private endeavor with an emphasis on short-term solutions, applicability, and proprietary rights (Heller, Eisenberg, 1998; Rhoten, Powell, 2007). Financial incentives are prime movers, and protection against free riders is essential (Demsetz, 1967; Rhoten, Powell, 2007; Teece, 1986). In an increasingly competitive world, CUDOS is apparently losing ground to PLACE in the search for a viable model for the twofold aims of the production of scientific knowledge and the protection of investments (Ziman, 2000). The four explanatory factors are combined in an analytical model to understand how the internal and external factors support and enhance each other (Fig. 1). The separate factors are selected in particular to explain the position of the breeding sector, the investments and the production of scientific knowledge associated with it, and possible implications for the salmon industry. Innovation involves the reorganization of actors and resources. A complex society demands solutions to pressing problems, but more complex innovation modes reduce the power of the government as a controlling entity. The institutions governing science-driven markets through partnerships increases the level of disputes over intellectual property rights (Jaffe, Lerner, 2004; Kennedy, 2001; Rhoten, Powell, 2007). The critical junctures are not only rooted in scientific properties, but also in political conflicts, disruptions, and a struggling financing system. Critical junctures are arenas where actors access core resources (i.e. scientific knowledge) along redefined patterns. Based on this analytical framework, we present the historical development of Norwegian salmon farming and breeding in more detail in the next section. 3. A historical review of Norwegian salmon farming Critical junctures represent phases in the development of modern salmon farming and breeding. Below, we use this framework to demonstrate the industry-specific coevolution of breeding and grow-out in Norwegian salmon farming. 3.1. The 1950s and 1960s: from entrepreneurial testing to organized project The organized breeding of salmonids in Norway began with the initiative of professor Harald Skjervold and colleagues at the Norwegian Agriculture University in 1967 (Gjedrem, 2007:16). The research group specialized in husbandry genetics,6 and the group used rainbow trout as a convenient animal for breeding experiments. As a consequence of the growing interest in fish cultivation (restocking of natural habitat), genetic material was systematically collected and stored at a location at Dal (east Norway) in 1968 (Gjedrem, 2007:16). The capacity at the Dal location was limited, and in 1971 the first breeding material was stored at the Norwegian Agriculture University's research facility at Sunndalsøra (Gjedrem, 2007:50), based on strains from 40 Norwegian rivers (Gjedrem, Refstie, 2005:280). In contrast to the quickly expanding research set-up for fish breeding, the grow-out phase of salmon and rainbow trout was a trial-anderror enterprise scattered at various locations throughout the 1950s and 1960s. The initial market for the farmed fish was local, but the growing production pushed for a more organized approach. The voluntary Trout Farmers Sales Organization was set up by fish farmers to structure sales and empower local fish farmers in a growing market, but it never quite solved the challenges of the market (Didriksen, 1989). The poor coordination between production and sales continued. In the late 1960s, a significant technological shift took place when a salmon farmer experimented with salmon in net pens in seawater (Gjedrem, 1992). The great initial success of this experiment led to the rapid expansion of this type of farming. There was broad consensus that this was the best way to conduct fish-farm operations. The 6
Prime focus was “Norwegian Red,” a Norwegian breed of cattle.
introduction of net pens incurred an increased demand for sheltered coastal space. This across-the-board agreement led to the emergence of a new technology platform including specifications for appropriate location criteria, a script for correct practice. However, the most important outcome was the identification of the most pressing problems and a growing understanding and general acceptance of how to solve them. This organizational unity among the pioneer farmers provided them with the capacity to confront the sources of their common challenges (Table 1). The first critical juncture in the rise of modern salmon farming was the success of the net pen experiment referred to above. This technology improved the growth of the fish, reduced mortality, and made the farming less work-intensive. Most radically, the long Norwegian coastline, with all its bays, sounds, islands, and fjords, suddenly became the optimal location for the burgeoning industry of fish farming. While the husbandry geneticists' contribution was recognized by the early pioneers (see interview with Sivert Grøntvedt in Osland (1990)), the fish farmers themselves were clients who were solely on the receiving end, with limited opportunity for feedback to the breeding experts. The fish farmers' political ambitions at the time were to unify the farmers, approach political institutions, develop markets, and improve technical conditions. Breeding remained in the hands of the geneticists. 3.2. The 1970s: institutionalization of the domestic regulative framework The Norwegian government participated actively in the early establishment of the salmon-farming industry including educational resources, research, and technical and financial supports. The government's ambition was to promote development of a national industry with the ability to support growth and prosperity in the rural, coastal regions (Official Norwegian Reports, 1977 no. 39; Report to the Storting, 1979–80 no. 71) (Table 2). Applied, publicly financed research was an important tool at the government's disposal. Despite strong support for the broad political goals regarding rural aquaculture policy, the specific measures needed to achieve these goals were hotly debated (Official Norwegian Reports, 1977 no. 39). A dispute broke out over whether salmon farming belonged administratively under the fisheries or agriculture sector. Political and economic actors with strong motives represented both sectors. The dispute was settled when a mandatory, first-hand trade organization for salmon and trout was established through the implementation of the Raw Fish Act (e.g. the Sales Organization). The Ministry of Fisheries was concurrently appointed as the lead agency for the Fish Farming Act — a resolution that had obvious consequences for the direction of industrial fish farming. The fisheries administration now had their hands on the wheel, and the institutionalization of salmon farming was, for a limited time, set in the direction of a fishing (rather than an agricultural) industry. Historically, farm license criteria constrained the farmers' opportunities to expand viable enterprises, although the government did ensure access to vital resources such as the breeding program (Aarset, 1998). The initial trail of white papers prescribed the separation of small farm units from a supporting community of researchers who produced knowledge that benefitted the community of salmon farmers (Official Norwegian Reports, 1977 no. 39; Report to the Storting, 1979–80 no. 71). The appointment of the Ministry of Fisheries as the head administrative agency was a systemic choice. Organization of processing, marketing, and sale was the core issue within the fisheries institutions, and upstream challenges such as salmon breeding were typically issues for the agricultural institutions, and thus not high on the agenda. 3.3. The 1980s: undermining the cooperative project Agents of the emerging aquaculture industry were eager to promote salmon aquaculture as a lucrative, new investment opportunity, and thus carefully distanced it from any association with the heavily subsidized and (in their eyes) “dull” fishing industry (Hallenstvedt,
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Fig. 1. Relation between internal and external explanatory factors.
Hersoug, Holm, 1985). Restrictive regulations combined with a centralized corporatist policy emphasized the fact that the government was responsible for the supply of services such as upkeep of the sales and marketing infrastructure, organization of education and research, and the supply of veterinary services (Official Norwegian Reports, 1977 no. 39). The fish farmers themselves owned and controlled the Sales Organization. The organization was important for the expansion of the salmon market, but perhaps it was even more important as a collector of common funds and thus a source of financial support for the industry's political organization. In 1982, an initiative from AKVAFORSK7 to set up a common breeding program between the agriculture breeding research community and the fish farming industry was positively received by the Norwegian Fish Farmers Association8 (hereafter: the Association) and the Sales Organization (Gjedrem, 2007:16). In 1985, the two organizations decided to establish the Norwegian Fish Farmers Breeding Station9 (hereafter: the Breeding Station). This Breeding Station was organized as a limited shareholding company, but financed by the Sales Organization and it was thus a cooperative in economic if not in legal terms (Engelhardt, 1994; Gjedrem, 2007:16). The funds accumulated by the mandatory Sales Organization were crucial for the initiation of the Breeding Station. After the opening of the Breeding Station in 1986, AKVAFORSK10 transferred salmon and rainbow trout families to the station without compensation (Table 3). In the early 1980s, the fish farmers harvested the benefits of a careful adaptation of fisheries institutions. The mandatory Sales Organization and regulation of ownership and farm size ensured market access with good prices in a growing market, relatively easy access to capital, straightforward regulative ramifications, and a supportive government that generously funded research (Aarset, 1998). The expanding market induced growing economic and political power among the farmers, and a struggle for improved license conditions in order to expand production arose. Toward the end of the 1980s, salmon farming increasingly faced problems. Prices fell due to increased international competition, and diseases destabilized production, which aggravated the market problems. The legitimacy of the Sales Organization declined, a significant proportion of the production bypassed the Organization, and it eventually went bankrupt. The government amended the necessary regulations and the farmers were free to trade their produce and, within limits, to integrate horizontally.
7 AKVAFORSK (Institute of Aquaculture Research) arose from the Institute of Animal Husbandry at the Norwegian Agriculture University in the late 1960s. AKVAFORSK is a leading global research institute in aquaculture. After periods of shifting ownership, AKVAFORSK is today part of the Norwegian food research conglomerate NOFIMA. 8 In Norwegian: Norske Fiskeoppdretteres Forening. 9 In Norwegian: Norske Fiskeoppdretteres Avlsstasjon AS. 10 Personal communication with Trygve Gjedrem, professor at NOFIMA, February 2nd 2012.
The fish farmers established the Breeding Station and became involved in breeding, but the commitment was rather halfhearted. The initiative to form the Breeding Station came from the husbandry geneticists and they supplied the brood stock without compensation. The Sales Organization supported the Breeding Station. When the Sales Organization went bankrupt, the Breeding Station changed hands.11 3.4. The 1990s: new players, new playground In the aftermath of the 1991 collapse, the Norwegian government alternately rescinded some regulations and introduced others (Aarset, Jakobsen, 2009). By easing regulations, the government signaled that they wanted no responsibility for the size or scope of the industry's production. When productivity increased and drove prices downward, the Norwegian fish farmers were again motivated to violate the norms of proper conduct and the government had to step in and implement new regulations to maintain control and stability. The 1990s, for example, were marked by a long-lasting trade dispute with the European Union over allegations that Norwegian fish farmers were dumping salmon, and the government played a major role in finding viable solutions to this dispute (Nilsen, 2007). During the 1990s, the incompatibility between the financial situation and ownership regulation burdened the industry (Table 4). A gradual watering down of the ownership regulation seemed to ease the access to fresh capital for the farmers. In the wake of the bankruptcy of the Sales Organization and the collapse of the regulatory regime, the industry saw an influx of new actors, increased market expansion, and the end of a variety of common cooperative solutions. In 2001, the government introduced regulation that prevented a single company from controlling more than 20% of the total licensed capacity, as an attempt to reduce the rate of buy-ups. The race to concentrate ownership slowed down, but in 2013 the 2001 regulation was relaxed to allow 40% ownership, and even more under certain circumstances (Ministry of Fisheries and Coastal Affairs, 2013). Consistent with general neoliberal management theory (Christensen, Lægreid, 2008), the control aspect of Norwegian aquaculture regulations was fortified by a stronger emphasis on efficiency, performance, and compliance with international standards and obligations. Increased vertical integration followed the horizontal integration, but the salmon product remained a generic Norwegian salmon brand. The immediate consequence for the breeding program of the collapse of the Sales Organization was the loss of funding. In the mid-
11 Communication per mail with Knut Gunnes, former general manager of the Norwegian Fish Farmers Breeding Station, August 28th 2013 with, and per mail with Paul Birger Torgnes, former general manager of the Norwegian Fish Farmers Association, August 28th 2013.
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Table 1 Organizing the platform of industrial salmon aquaculture. Incident
Explanation
Precursors 1960s Market problems (Didriksen, 1989)
Voluntary Sales Organization not sufficient. 1960s Technological diversity Lack of unity and ability to agree (see Didriksen (1987), Osland (1990), on supportive measures. and Aarset (1998)) 1967 Model organism for breeding studies Husbandry geneticists (Gjedrem, 2007:16) experimented with rainbow trout, gained experience. Critical juncture 1969 Fish farmers experimented with salmon in net pens in seawater (Gjedrem, 2007)
Immediate success.
Verified irreversible change • Unification of farmers. • Political organization based on a common identification. • Agreement of appropriate farm practice and siting specifications.
1990s, a few Norwegian banks and feed mills were the main creditors of the industry, but none of these entities seemed to be interested in seizing control of the breeding resources. In 1992, the Breeding Station negotiated a merger and Norwegian Salmon Breeding12 (hereafter: the Breeding Company) was founded from the ruins. After a share capital increase in 1993, the Breeding Company took over the shares of AkvaGen, AKVAFORSK's company for the production and sale of roe. In summary, for the sake of clarification, in the late 1980s, the breeding of salmon took place in two parallel but cooperating systems, at AKVAFORSK and at the Breeding Station. The Breeding Company that rose in the early 1990s merged these systems, and in 1999 the Breeding Company was renamed AquaGen13 (AquaGen, 2014). After a period of consolidation, a few major fish farmers controlled the shares of AquaGen together with an investor company (AquaGen, 2014). In 2008, the world's largest actor in poultry genetics, Erich Wesjohann Group GmbH (EW Group), purchased 50.2% of AquaGen's shares, and in 2013 the EW Group purchased the remaining shares (AquaGen, 2014). The EW Group is an entirely new type of actor in the salmon-farming industry. It provides financial resources, industry expertise, and scientific knowledge in husbandry genetics. Using conventional phenotypic selection methods, random fish are selected based on the average performance of families. Recent breakthroughs in analytical biotechnology have additionally made it possible to use genomic selection to choose the best fish for use as brood-stock candidates within families (Taylor, 2014). In 2007, the genetic marker for resistance to IPN was used to select brood stock, and in 2009, the first IPN-resistant eyed eggs resulting from this selection technique were available from AquaGen (EW Group). Hence, the EW Group has been instrumental in opening the biotechnological enhancement of the eyed egg as a competitive arena in salmon aquaculture. Two separate but partially interconnected processes allowed this competitive arena to occur. First, the collapse of the Sales Organization and the lifting of the ownership regulation undermined the organized cooperative model. The farmers financed the breeding program indirectly via the Sales Organization, but the program lacked adequate anchoring among the individual farmers. A single farmer and, after a while, some rather reluctant creditors rescued the breeding program from collapse (mid 1990s) and Norwegian Salmon Breeding was established. When the EW Group purchased AquaGen, the sellers were “trading the family silver” [“arvesølvet”],14 a common knowledge capital 12
In Norwegian: Norsk Lakseavl AS. Note the difference in spelling from the company owned by AKVAFORSK. 14 Personal communication with Trygve Gjedrem, professor at NOFIMA, February 2nd 2012. 13
build up over four decades. Second, a period characterized by a sudden rise in advanced, science-based methodologies in biotechnology, both in Norway and internationally, commenced. Concerns for the farming industry as well as for wild salmon spurred research funding and a large project commenced in which the salmon genome was mapped (Power, 2003). While the salmon genome per se belongs to the public knowledge commons, the requirements of commercial applications based on the new genome information imply that breeding science has become proprietary. 4. The industrialization of the Atlantic salmon sector We organize our discussion along two paths. One follows the welldocumented transformation of the Norwegian salmon-farming industry from a small-scale mom-and-pop industry to a modern seafood industry. The other concentrates on the merging of the historically and institutionally separate sub-sectors of salmon breeding and the grow-out farms. Specifically, we focus here on the intricate and multifaceted interplay between the evolving roles of the triple helix: universities as the providers of science, the government and the regulatory framework, and the industry (Table 5). During the mom-and-pop farming era, features of knowledge sharing and cooperation with researchers dominated the field (CUDOS). The ag-school professors managed the breeding sector, financed by the Norwegian research council and other public funding, and disseminated their knowledge to relevant actors according to their personal ethos. In contrast, under the emerging industry regime, we observe a complex mixture of knowledge sharing (CUDOS) and proprietary features (PLACE), with a growing emphasis on “expert” science followed by complex protection strategies. Biotechnological research and the development of applications such as the IPN-resistant eyed egg based on genomic selection, require protection of the scientific results to attract investors under the current system. However, despite the emerging industrialization of salmon aquaculture, legal protection such as patents is still surprisingly rare. The Lysø commission (1972–77), which hammered out the initial aquaculture policy, negotiated a path between organized fishery and agriculture interests to find good solutions to a variety of real and potential problems (Didriksen, 1987:96; Official Norwegian Reports, 1977 no. 39). With the implementation of a mandatory Sales Organization regulated by the Raw Fish Act and a licensing system mandated by the Aquaculture Act, the identity of the new industry tipped in the direction of a fishery, which had consequences for recruitment of fish farmers and the development of farming practices and knowledge within the industry. The evolution of political institutions followed the competence of the fisheries administration, and responded to economic arguments with adjustments of capacity and ownership regulation. This cultural-political platform had implications for upstream decisions, such as allocating time and resources to fish breeding. When the fish farmers' organizations and the breeding professors set up the Breeding Station, the station did not involve the farmers directly. The farmers participated as partners through the mandatory Sales Organization and the Association. Consequently, the fish farmers' common sense of ownership and of commitment to the Breeding Station was weakened. The gap between the grow-out operations and the breeding sector was significant, and the strategic power of breeding was negligible. The Sales Organization collected funds based on a flat fee on all sales of farmed fish. Production rose steadily, and over a few years the funding of the Breeding Station was secure. The government funded the production and dissemination of scientific information and delivered it readyto-use to the industry. The Sales Organization collapsed in the early 1990s and funding for the Breeding Station dried up. Legal amendments opened the way for mergers and acquisitions, significantly altering the structure of the industry. In order to survive, AKVAFORSK sequestered its breeding activities in a newly established, investor-owned company (IOC). This separation signaled the end of the professor–farmer
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Table 2 Institutionalizing salmon aquaculture. Incident Precursors 1971 Expansion of husbandry genetics to aquaculture 1973 The association established 1974 Voluntary trade organization for farmed trout faded (In Norwegian: Norsk Ørretomsetning) 1972–77 The Lysø commission (Official Norwegian Reports, 1977 no. 39)
Critical juncture 1978 The Fish Farmers Sales Organization 1981 Organized industry expansion
Explanation Startup of systematic industry-related breeding (Gjedrem, 2007:49). Unified representation, gained political power. Represented problematic experiences with voluntary organization of the trade. Review of public resources available to support this emerging enterprise. Confrontation of models, but pointed to the fisheries administration as lead authority. Mandatory fish-farmer-owned sales cooperative, mandated by the Raw Fish Act. A regulatory, license-based scheme, mandated by the Fish Farming Act.
Verified irreversible change 1. The Raw Fish Act: Mandatory firsthand sale and foundation of the Sales Organization. Ensured organized market access and secure payments, and a generic product profile. 2. The Fish Farming Act: Authorized the licensing system. Ensured expansion along the coast and small and privately owned farms. 1 and 2 both connected fish farming to the Ministry of Fisheries.
cooperative contract; core knowledge had now become a commodity, with the market as the main driver of knowledge production. Hence, new management ideas (PLACE) became institutionalized in the Norwegian aquaculture sector and with it a series of new principles and ideologies. Historically, farmer-owned cooperatives have had a strong position among Norwegian primary industries. The hegemony of cooperatives in the primary industries has also allowed for the convenient organization of core tasks within the aquaculture industry. In aquaculture, however, support for the cooperative model has never been more than lukewarm, and hence relatively easy to replace when hard times hit the industry around 1990 (Official Norwegian Reports, 1992). The generic product brand of Norwegian salmon and a common export organization are remnants of the legacy of the cooperative model. Above, we demonstrated how the institutional collapse set in motion the withering of the cooperative model in Norwegian salmon farming. Market position and strategic and technical efficiency won out over policies designed to supportive rural development. The neoliberal claim that a change in favor of increased productivity was imminent gained momentum (Report to the Storting, 2008–09 no. 7). The protection of
one's own investments in the breeding programs became a legitimate driver for reorganization. Productivity development reduced the need for direct farm employment, while an increasingly sophisticated supply sector emerged. A tremendous concentration of ownership has taken place within the grow-out sector, and a few companies have achieved oligopolistic control of the primary production, even though the industry maintains a tail of smaller companies (see overview in the introduction). A history of coincidence, cooperation, cofounding, coevolution, and strategic action set the conditions for the rise of AquaGen, now owned and controlled by the EW Group. The problems of the 1990s led to changes in industry structure, among them the end of the ownership regulation for grow-out farms. This lifting of the ownership regulation opened the way for mergers and acquisitions and thus access to the publicly funded knowledge base. This transition signaled a break with the previously engrained principle in which the production and dissemination of scientific knowledge were seen as common goods (Hess, Ostrom, 2007). In the wake of the transition to a more market-based regulation, scientific knowledge in the field of fish breeding achieved its own
Table 3 The race to institutional collapse. Incident Precursors 1981–83 Industry expansion predominantly via new entries 1982 1985
Initiative from AKVAFORSK to establish a National Breeding Program (Gjedrem, 2007:179) The Breeding Station established (Gjedrem, 2007:179)
1985–86 Duplication of breeding material for free (Gjedrem, 2005:281)
1985–88 Industry expansion predominantly via old-farm expansion 1988–90 Destabilization, lack of predictability Critical juncture 1991 The Sales Organization filed for bankruptcy (Aarset, 1998) 1991
Amendments to the Fish Farmer Act (Official Norwegian Reports, 1992 no. 36)
Explanation Quota of limited licenses and expansion of existing licenses, cementing a structure of small farms distributed along the coast. Intent to tie breeding more closely to the activity with the industry actors. Financed by the Sales Organization, but detached from the individual farmer. Followed up by an agreement between AKVAFORSK and the Breeding Station. Same brood stock at both facilities (AKVAFORSK and the Breeding Station) for security reasons. AKVAFORSK refrained from capitalizing on the knowledge production, in the spirit of CUDOS. Established farmers prioritized over new entries. Rise in production, diseases, compensatory input of smolt, successful vaccines.
The fabric of the salmon aquaculture industry disintegrated. Disruptions of the financial resources to the cooperative arrangements. Ban on majority ownership lifted in order to encourage integration processes (i.e., external capital).
Verified irreversible change • Institutional collapse: Removal of Sales Organization, relaxation of ownership regulations followed. Withering of the cooperative model. New business models occurred as banks and feed mills took over as major creditors. • Emerging institutional reconstruction: The government shifted position and became a strong partner in research.
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Table 4 Finalizing the separation of feeding and breeding. Incident
Explanation
Precursors 1990–92 Institutional collapse
The bankruptcy of the Sales Organization, amendments of the ownership component of the Fish Farming Act, acceptance of the transferability of licenses, and centralization of license ownership.
Critical junctures C.J. no. 1 (major) 1991–92 The Breeding Company emerged as owner of the subsidiaries, the Breeding Station and AkvaGen (Gjedrem, 2007:170) 1992 AKVAFORSK separated its breeding activities into the company AquaGen (Gjedrem, 2007:170)
C.J. no. 2 (follow-up) 1999 The Breeding Company renamed AquaGen (Gjedrem, 2007:170) 2000 20% cap on control of total volume of grow-out licenses 2000 AKVAFORSK left AquaGen (Gjedrem, 2007:170) 2005 2007 2013 2013
AKVAFORSK co-owner of the Breeding Company. Breeding stock victim of dwindling economy and sold to save the owners. Financial sources evaporated. The production of egg and roe increased, and concerns about the bias of AKVAFORSK occurred. AquaGen took over the material managed by AKVAFORSK for 20 years. The separation of farmers and breeders marked the end of AKVAFORSK's participation in the National Breeding Program.
Conflict between AKVAFORSK and AquaGen. State accepted/encouraged increased centralization. Difficult situation for AKVAFORSK, which needed a huge amount of data to improve the breeding effort.
EW Group bought into AquaGen Genome-based technology for salmon breeding implemented (AquaGen, 2014) Product development, precision, and speed of attractive breeding products. Advancement by scientific knowledge, position based on science. EW Group gained full control of AquaGen (AquaGen, 2014) 40% cap on control of total volume of licenses Government accepted/encouraged oligopoly.
Verified irreversible change • In 1992, the ruined breeding program was transformed into the (limited) shareholding Breeding Company. The separation of farmers and breeders opened the door for investor ownership. • EW took over AquaGen as a major partner in 2008 and gained full control in 2013 (AquaGen, 2014).
strategic properties and measures. The point that tipped breeding and biotechnology from the periphery to the center of strategic maneuvering was the formation of the Breeding Company. Two decades of results from the systematic breeding of salmon by the best husbandry geneticists — funded exclusively by the government — was for sale. Further development of breeding required increased resources and investments, and the management of research results and fish stocks with economic value required protection of those investments. Thus, the ownership of the Breeding Company led to new strategic decisions with less emphasis on the community of farmers and greater focus on benefits for a single corporation. Fueled in part by accidents, external shocks, and collapses, this process in turn led to critical junctures and conscious, strategic decisions that opened the way for new paths of development.
Biotechnological advances have transformed the production of food in all areas. The effect of biotechnological knowledge on the breeding of Atlantic salmon is but one informative example. Traditionally, the development of genetics for aquaculture took place in R&D institutions, loosely coupled with the growing aquaculture industry. The impact of capital, technology, and remarkably sustained strong market forces, left the geneticists in the dust as the salmon-aquaculture industry was propelled to world dominance. Now, however, it is the geneticists turn to strike back. Genetic expertise, nearly ignored during the period of rapid market expansion, is called upon on multiple fronts. The rise of the field of genomics (Power-Antweiler, 2007), the economic success of developing breeding techniques in other husbandries (Hayes, Bowman, Chamberlain, Goddard, 2009) combined with the demands for sustained productivity development in aquaculture have all changed
Table 5 The Atlantic salmon sector from fishery to industry, seen through the lenses of triple helix metatheory. Hegemonic mode of production and governance regime Core characteristics of the triple helix components (university, government, industry) and their interplay
Fishery (1970–1990)
Industry (2005–)
Role of universities/science Characteristics of dominant scientific regime Funding of relevant R&D
CUDOS features dominate Public (via universities)
Dominant breeding science
Traditional (“first-generation”) breeding science
Mix of CUDOS and PLACE features Mix of public and private funding for pre-competitive R&D activities “Second-generation breeding science.” Genomic selection, biotechnology becomes more effective, and the biotech tools cheaper (genomic sequencing)
Role of government (regulatory, institutional framework) Core characteristics of regulatory regimes, and dominant values inherent in institutions
Value-loaded with important domestic themes (employment in peripheral districts, etc.)
Role and characteristics of industry Who are the dominant suppliers of Atlantic salmon? Who are the dominant breeders? Perceived value of eyed egg
International trade regulations (WTO, etc.)
Small-scale, domestic multipliers (“immobile capital”) Internationally oriented investors (“mobile capital”) Small-scale, domestic firms, mixed ownership Large, international investors Relatively low (“generic, easily accessible good”) Relatively high. More focused on future income potential of innovative breeding, potential for branding, etc.
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the playing field (Asche, Guttormsen, Nielsen, 2013). In spite of this, there are currently few patent proposals and even fewer patents; the profitability of advanced biotechnology for the genetics of salmon remains unclear. 5. Conclusion In this article, we outline the historical transition of the Norwegian salmon-aquaculture industry in which scientific breeding knowledge has transformed from open, common knowledge that is freely available to salmon farmers, to a closed system of proprietary science, which is a target for commercial transactions.15 Modern biotechnological techniques have forever changed the genetics and breeding of multiple plants and animals that are essential components in the food industry, with social consequences for the industry, the actors and the consumers. Within the Norwegian aquaculture industry, the transformation from open to proprietary science is still in an early stage. Our study of salmon breeding addresses the ongoing transformation of the organization of scientific research and the dissemination of results for industrial use, as well as the role of this transition in reconfiguring the salmon-farming industry. The socioeconomic (re)valuation of the case of the eyed egg illustrates a complex sequence of transformations and networking. This product started as government-funded common property, grounded in the idea that publicly funded scientific knowledge was there for the good of small fish farmers and hence a benefit to society in general. Proprietary science including patented ownership of scientific knowledge will benefit corporations, and only indirectly benefits the industry through potentially better techniques and a healthier market. This transformation singles some actors out and binds other together (Aspers, 2008), depending on how the product is valued by different beneficiaries, individually and cumulatively. Large corporations with significant economic resources, considerable political power, and strategic leeway dominate the Norwegian salmon farming industry today. Increased productivity is the keyword to understand the corporations' motives (Asche, Roll, Tveterås, 2008; Tveterås, 1999). However, the regular sources of productivity growth seem to be exhausted and other mechanisms must be found (Asche, Guttormsen, Nielsen, 2013). The rise of biotechnology is indeed a timely prospect in this picture. The growing public acceptance of proprietary science in which investments are protected, opens opportunities for the industry partners to compete for innovative solutions. However, as some win and others loose, economic power will be further centralized. The development of novel techniques and products demands specialists, and the battle for lucrative biotechnological solutions will be removed from the end-product market to one based on the competition for control and ownership of the “best” genetic products. A growing global population is triggering increased industrialization of aquaculture worldwide. Species such as shrimp, tilapia and catfish and others are also in an early stage of industrialization, in trends similar to what we have described for Atlantic salmon. Our study provides two valuable messages for the growing field of aquaculture. First, a myopic race to improve productivity in technological farming practices increases competition for resources at the expense of small-scale farmers, who may be forced out of business. A more careful design of regulations is therefore prudent. Second, as the biotechnological industry increasingly embraces the new science of breeding, complex issues associated with property-rights and control of knowledge-production will be more prevalent in the coming years. The eyed egg has traditionally been taken for granted by early adopters and thus financially and strategically undervalued. More recently, the eyed egg is revalued as dominant market actors have intensified the biotechnological refinement of this crucial life-history 15 Personal communication with Trygve Gjedrem, professor at NOFIMA, February 2nd 2012.
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stage. The valuation of the eyed egg is the outcome of a sequence of specific, concrete historical transformations: the establishment of complex networks, their retention, and, finally, their demise. Our study illustrates how this process occurred within the Atlantic salmon sector. Acknowledgments This project was financed by the Research Council of Norway, project 202374 “Governing food in a globalizing environment: innovation and market strategies in Norwegian food supply chains”. We appreciate comments from two anonymous reviewers, and proof reading assistance from OnLine English, and Jessica Marks.
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