By DEBORAH JONES
CAMPOBELLO ISLAND, New Brunswick, Canada, August, 1993

IT’S SLAUGHTERING DAY ON JOHNNY MALLOCH’S FISH farm, and thousands of Atlantic salmon are being rounded up from the cold green depths of their ocean cage in a giant net. The farm, Harbour De Loutre Products Ltd., has received faxes from Boston fish brokers ordering 20,000 pounds of deep-red salmon flesh. Now, as the shoreline of Campobello Island in New Brunswick brightens under the sun rising red in the east, the twice-weekly harvest begins. Workers reef in the lines of the bag-like net, and thousands of iridescent purple and silver torpedo shapes break the murky surface, leaping in a desperate search for draft. These are hatchery salmon, spawned of hardy Saint John River stock and pampered lifelong in preparation for this day, and their kind is the backbone of a phenomenally successful salmon farming industry that began here a decade ago and is expected to reap nearly $100 million in sales this year, all concentrated in tiny picturesque Charlotte County. Salmon farming in Charlotte County alone is already more than 10% of the wharf value of the entire Atlantic fishing industry, wild and farmed.

Wearing orange survival suits in case of an icy dip, Malloch, 65, and an employee balance on the wooden ledge of the cage, their long-handled nets poised over the roiling mass. They scoop only the largest of the two- year-old fish, some as long as a big man’s arm, into a tub of water on a Cape Islander boat. There, four workers stand ready with hooked knives to slit the sleek animals’ gills and slip them into huge covered containers to bleed. The bins overflow as a roaring diesel engine pumps cleansing seawater through them, and soon the boat’s deck is awash in crimson froth.

Within two hours the bins are full of writhing seven-to 13-pounders, about half of today’s harvest. Malloch plans to slaughter about 10,000 pounds today-half of what was ordered by the Boston buyers, but enough, he figures, to keep his year-round customers happy while he holds back precious stock until prices rise above the midwinter market value of $3 (U.S.) per pound to as much as $3.75 (the largest fish fetch an extra 50 cents per pound). Within six hours these $30,000 worth of salmon will have been cooled in ice chips, gutted, packed three to four apiece in Styrofoam-insulated boxes and loaded onto a transport trailer. The next morning, the truck will be in Boston waiting for the 6 a.m. opening of the city’s fish brokers, who will sell them to distributors throughout the United States. By evening, just 36 hours after leaving the cold Northwest Atlantic Ocean, most of the fish will reach the linen-covered tables of upscale U.S. restaurants, which pay a premium for salmon grown in the Bay of Fundy. (The “water-to-table” turnaround for fish caught by traditional methods is about one week.) This bay, with the world’s highest tides and hundreds of sheltered coves, is becoming famous for its gourmet fish. “I’ve seen fish worldwide and these are just as good as any other salmon in the world,” says Bjornar Mikalsen, a Norwegian fish expert who recently moved to New Brunswick to become general manager of a fish feed plant built in 1990 by Moore-Clark Co. (Canada) Inc., part of British Petroleum Co. PLC’s multinational Nutrition Aquaculture Division. “It’s a very nice fish, very silvery.”

Boston-based fish dealer Marion Kaiser agrees: “The finest salmon in the world comes from the Bay of Fundy area.” Kaiser, president of Aquanor Marketing Inc., sells aquaculture products under the Aquanor brand and has switched in recent years from salmon shipped from Norway to fish from Malloch’s and four other Fundy-area farms. “You’ve got that flushing action from the Bay of Fundy tides and you’ve got very cold water-the colder the water, the better quality the product,” says Kaiser. “And you’ve got a lot of independent farmers. It’s my opinion that independents do the best job, and John Malloch does as good a job as anybody by paying attention to detail.” The reputation of Malloch’s fish is such that they were chosen for a state dinner held by then-U.S. president George Bush, a coup announced in a letter from a broker that hangs, proudly framed, in Malloch’s office.

Malloch built this site a stone’s throw from the house he shares with his wife and two grandchildren at Wilson’s Beach on Campobello, a tiny island in southern New Brunswick that was the summer retreat of Franklin D. Roosevelt, and has a bridge to Maine serving as its only land link. The farm is geographically remote from urban pollution, yet in constant communication with its markets and Canadian fish research scientists by telephones and fax machines. Its 20 full-time and 15 part-time employees, who earn an average hourly wage of $10 (Canadian), include members of Malloch’s extended family and island fishermen who have swapped an uncertain life at sea for the year-round security of aquaculture.

Eleven years ago, when a provincial government official asked him to try one of the new experimental fish farms in the Passamaquoddy Bay area, off the Bay of Fundy, farming was one of the last things Malloch had contemplated doing. All his life, but for a five-year stint operating heavy equipment, he’d worked as an independent fisher. But he is profoundly distressed at the destruction of Atlantic Canada’s wild fisheries from overfishing and the resulting loss of thousands of fishing and plant jobs. Even back then, when the scope of the industry’s devastation had yet to unfold, Malloch saw no future in the lot of a fisherman. The province, encouraged by the work of federal fish research scientists in St. Andrews, N.B., and the long-established commercial success of salmon farming in European and Asian countries, was trying to nurture a new aquaculture industry by subsidizing the cost of new sea cages, feed and young six-inch-long fish, called smolts, to fatten up. Most area fishermen chuckled at the seemingly ridiculous idea of fish farming. Malloch and a handful of others took the bait. While it’s unrealistic to expect that the labour-efficient aquaculture industry that has resulted can rescue the thousands of jobs now in peril in the traditional fishery industry, Malloch takes pride in helping to create within the ailing fishery a new source of employment. “I’m hoping it’s going to save the future of the fishery,” he says of aquaculture, pointing to the closure of Newfoundland’s northern cod fishery and quota cuts in other types of groundfish this year in Nova Scotia, Quebec, New Brunswick and Prince Edward Island. In the case of salmon, it has been years since wild stocks were strong enough to sustain commercial fishing in Eastern Canada. “If we’re going to eat fish 25 years down the road, a good portion of them are going to be grown,” says Malloch.

From his first batch of 1,000 salmon Malloch reaped just 56 animals. Harbour seals enjoyed the rest. Today, when Malloch stands in his big new home and looks over the sheltered waters of the harbour, he views millions of dollars’ worth of his own assets, with 35 employees building and tending to cages holding $13-million worth of fish, a floating feed warehouse, a modern shorefront processing plant, a new net-making loft, warehouse and office complex, several feed silos, two inshore boats and numerous skiffs. To scare off the seals Malloch weighs down his nets to make them more resistant and has installed ultrasonic beepers underwater. In a humorous imitation of land-based farmers fighting off birds with scarecrows, he has also erected an incongruous plywood silhouette of an English fox hunter, complete with a scarlet jacket and black riding cap. “But I’ve succeeded, and nobody’s laughing at me now,” chuckles Malloch.

With 1992 revenues of $86 million, New Brunswick’s aquaculture industry dwarfs those of Nova Scotia ($8 million), Prince Edward Island ($7 million) and Newfoundland ($1 million). Malloch’s company is one of 38 that harvested about 9,000 tonnes of Atlantic salmon from more than 50 sites in Charlotte County alone in 1992. They buy smolts from recently established private hatcheries, which vaccinate them against furunculosis and vibriosis, two of the most deadly diseases of farmed salmon, and ship them in oxygenated bins on a transport trailer truck. The smolts are poured by the thousands into sea pens made of 30-foot-deep nets suspended from wooden, polyethylene or steel frames. For the next 18 to 24 months they grow a pound of flesh for each one to two pounds of protein-rich food. Barring extremely cold winter temperatures or marauding seals that attack the netting of fish pens in pursuit of an easy meal, more than 90% will live to be harvested, a remarkable survival rate considering that elsewhere as few as half of the smolts reach adulthood because of a higher disease rate. Farmers don’t reveal their profit margins, but it costs Charlotte County’s aquaculturists between $2 and $3 per pound to produce a salmon, “depending on the grower and on the corporate structure,” says John Kershaw, director of aquaculture for New Brunswick’s Department of Fisheries and Aquaculture. About 80% of the product is exported to the United States.

Charlotte County’s production compares favourably with that of British Columbia, which last year produced 9,000 tonnes of Atlantic salmon and another 11,500 tonnes of Pacific salmon along its warmer, gentler coasts with many more potential growing sites available. Within Canada’s $240- million-a-year aquaculture industry (which also produces shellfish such as mussels, clams, oysters and other products including trout and seaweed), salmon remains the most lucrative of species. But even Canadian production of salmon remains a pittance compared with annual worldwide salmon production of some 330,000 tonnes-about 40% of it claimed by Norway, which traces its success back to mom-and-pop farms set up in the 1970s.

“Maybe Canada is behind because we were always rich in wild fish resources-until now,” muses Kershaw. But that wealth has been depleted and Kershaw, like Malloch, believes fish farming can help compensate for the loss of jobs in the wild fishery-at least in select areas like Charlotte County, where the environment is conducive to fish husbandry. “We have never presented aquaculture as a replacement for the traditional fishery. We believe aquaculture can operate side by side with the traditional fishery, and it offers diversification and economic stability. It’s the same process that has occurred on land, with man going from hunting to domestication of animals,” says Kershaw.

New Brunswick’s goal is to double its Atlantic salmon production to 20,000 tonnes by the year 2000. Provincial officals are reviewing applications for another 123 sites for fish farms, of which perhaps 35 might be approved. Already, several Charlotte County farms have changed hands, but only one of them has gone bankrupt. Aquaculture employs about 1,000 of this county’s 26,000 residents, no small number considering the local 20% jobless rate. And those jobs do not include spin-off industries, ranging from hotels to insurance brokers to local restaurants. The new industry has been good to local villages, attracting professionals such as veterinarians, providing steady jobs and stemming the outflow of young job-seeking adults that plagues all of Atlantic Canada. The coastal community of St. George, for example, gambled on aquaculture and built a new industrial park, which now contains two salmon processing plants, a machine shop, a net manufacturer and a fish farm feed plant. Near St. George on the main coastal highway between Saint John and Maine, a new hotel has been built to cater to investors and salespeople visiting from Europe, the United States and Central Canada. “The aquaculture industry has given a great boost to this area,” says Vance Craig, owner of Craig Insurance and the former mayor of St. George. “There’s a tremendous amount of employment created, and even though we’ve gone through a recession, there’s a feeling of optimism here.”

Malloch is one of the largest independent fish farmers in the region, but like all of them, he started out small and expanded slowly, whenever he could afford to pay for improvements and was assured of the market. He is as self-sufficient as possible, making his own nets and designing and making his own wood and net cages. Being far from mainland feed plants, Malloch produces his own feed with an elaborate jury-rigged system of underwater pipes that pump silage and meal to a big floating feed warehouse, in which computerized augers produce the required mixtures and sizes of pellets. Most independent farms on the New Brunswick side of Passamaquoddy Bay market their product through a co-operative or a handful of international aquaculture companies that have invested in New Brunswick, but Malloch makes his own deals with the Boston fish brokers. He ignores the Canadian market because it’s less geographically convenient. He has turned down offers from would-be partners because he treasures his independence. “I have a board of directors of one. When I have to decide something, I sit down in a chair, meditate a while and make the decision. I don’t want to grow too big too fast; you could get yourself in a lot of trouble,” he says over a lunch of spaghetti and beef sauce at his kitchen table. (Few New Brunswickers eat farmed salmon, which outside of tourist season is not readily available in local restaurants.) An entrepreneurial attitude and cautious investment style have been critical to Charlotte County’s aquaculture industry, which has steadily grown and prospered while many bigger, more sophisticated fish farms on Canada’s West and East coasts have failed. In B.C.’s $110-million aquaculture industry, operators are only now emerging from a massive restructuring, and this spring a large Nova Scotia operation went bankrupt. “We probably have the most stable and profitable aquaculture businesses in North America,” boasts Bill Thompson, general manager of the New Brunswick Salmon Growers Association and president of the Canadian Aquaculture Producers Council. “It’s well developed because it was well planned by industry and the federal and provincial agencies, and we have good farmers. B.C.’s high-flying approach to aquaculture was to take it to the stock market and have hired guns running it. We launched our industry with local people growing 10,000 trout, and as their skills grew, so did their farms.”

“The growth of the aquaculture industry is so indigenous there’s a beauty about it,” says Gerald Ingersoll, principal of a community college in St. Andrews that runs aquaculture training courses. “It’s the right time and the right place, and it’s an industry based on a subset of skills that everybody here has. There is also a strong can-do attitude that allows it to happen.”

This year, Malloch will increase the number of new smolts to 140,000 from 130,000 in 1992. Such growth would not be possible without the emergence of private hatcheries, such as the region’s largest near St. George, set up in 1984 by Stolt Sea Farm Canada Inc., a wholly owned division of Sea Farm A”S of Bergen, Norway. Stolt, which also owns salmon farms in Maine, France and Greece, now produces about two million of the 2.8 million smolts produced in New Brunswick. It grows about 425,000 of the fish itself, marketing them under its own Sterling brand. Stolt has invested close to $20 million in capital in New Brunswick.

Observers attribute Charlotte County’s success to its climate, the mix of family-run farms and huge operations backed by huge corporate parents- Stolt Sea Farm, Connors Bros. of Blacks Harbour, N.B. (a sister company to BC Packers Ltd. on the West Coast, both owned by George Weston Ltd.) and supplier Moore-Clark, backed by British Petroleum-and to a support network that has evolved over nearly three decades. This network includes the world-class biological research station at St. Andrews run by the Department of Fisheries and Oceans, whose scientists were the original promoters of Canadian aquaculture in the late 1960s, provincial government policies favourable to aquaculture, and courses in fish husbandry aimed at aquaculture that have been offered for 16 years at a local community college. The availability of aquaculture products, made by companies throughout Canada that produce everything from high-tech vaccines to the special nets and bins used to harvest fish, has been critical. Various forms of public financing have also been offered federally and provincially over the years, but most aquaculture companies say the amount has not been significant enough to make or break the industry and many of the established farms are now self-sufficient. At Stolt Sea Farm, for example, public financing makes up about 2.5% of its $20-million investment, says Brian Rogers, general manager of Eastern Canadian operations.

For the future, farmers face a continued decline in the price of farmed salmon because of stiff competition from farms in Europe, elsewhere in North America and in Chile. Even the quality of Fundy salmon has not managed to buoy up prices much since the period of 1986 to 1988, when some farmers received as much as $6 to $7 per pound. The challenge, aquaculturists believe, is to start marketing fish more effectively and make value-added products such as the portion-controlled salmon fillets and steaks that Sea Farm is now experimenting with, using high-tech water- jet cutting machines now common in the poultry industry.

Malloch, ever watchful of future markets and tinkering with new ways of doing things, is dabbling in producing his own unique flavour of smoked salmon, a product that retails for more than $20 (U.S.) a pound. But he believes the real potential in fish farming lies in growing fish nobody else has domesticated successfully. Among Malloch’s 100 or so cages full of sleek Atlantic salmon are four special pens in which he is trying to grow halibut, haddock, cod and pollock, all extremely popular with consumers and whose species are in severe decline in the wild despite federal efforts to cut quotas and regulate overfishing. Malloch is far from mass production of the fish because the only way he can obtain them now is to buy wild animals captured live by traditional fishermen. But with research scientists in St. Andrews he is working on obtaining eggs from his existing brood stock in the hope of developing new hatcheries. Standing in his fish plant as the day’s salmon harvest is packed into boxes, Malloch wields a huge knife to trim fat from a succulent red fillet he plans to smoke, and admits he also has another reason for wanting to raise cod, haddock, halibut and pollock brood stock. “Nobody on the face of this earth knows where the point of no return is for these wild fish stocks,” Malloch says. “Maybe we can grow enough to enhance them and allow them to survive.” The idea is only as far-fetched as fish farming was to the naysayers 11 years ago.

Copyright Deborah Jones 1993

Originally published by The Globe and Mail Report on Business Magazine, August, 1993

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