Salmon aquaculture in the Faroe Islands – historical developments and future prospects

Abstract

Today, the combined direct contribution of fishing and fish farming is about one-third of the Faroe Islands’ GDP. In the last three decades, aquaculture has become an important industry, and the Faroe Islands is now the fifth largest salmon producer in the world. In this article, we provide an analysis of the development of Faroese aquaculture from the early 1960s to the present. As in other countries, there have been periods of growth as well as setbacks, and we analyze the reasons behind these developments. In addition, we will analyze the future prospects for the industry. In recent years, production has leveled off in the Faroe Islands. An important question is whether the industry will be able to respond to the business opportunities presented by the high price of salmon.

Keywords:

• Aquaculture
• salmon
• license fees

Notes

1 Source: Faroese National Accounts. Fishing and fish-farming are almost of equal magnitude when it comes to their contributions to GDP.

2 Source: Vørn – Faroese Fisheries Directorate (www.vorn.fo).

3 8.7 °C average annual temperature, min 6 °C, max 11 °C measured at 18 m depth. Source: Q4 2021 Bakkafrost Group presentation https://www.bakkafrost.com/en/investor-relations/reports-and-presentations/

4 Dam, R. (2019). Avrik Benchmarking, Hagtøl Alirástevnan, p. 24.

5 Dam, R., Avrik Benchmarking, Storsmoltproduktion på Faerøyene [Production of smolt on the Faroe Islands], Aqkva Konferancen 2020, Bergen, p. 15.

6 Whole Fish Equivalent (WFE) represents the harvest weight of round bled fish − 93% of live fish weight. Mowi, 2022 Salmon Farming Industry Handbook, p.108.

7 Bakkafrost Capital Market Day, 14 September 2021, p. 200. & (Jacobsen, 2020; Kragesteen et al., 2019, 2021; Hannisdal et al., 2020)

8 Bakkafrost Sustainability Report, 2020, https://www.bakkafrost.com/en/about-us/sustainability/reports-and-policies/

9 Source: www.rinka.fo.

10 Source: Bakkafrost Presentation, Capital Markets Day, Faroe Islands 14 September 2021, p. 30.

11 https://hiddenfjord.com/low-emission-shipment.

12 Faroese title – “Nevdin viðv. Fiskaling”.

13 Authors compilations.

14 If a fish farm license at sea is not used for two consecutive years, the state has the right to revoke it from the license holder (Faroese Parliament, 2009).

15 Faroese regulation no. 82/2019 § 12 (Faroese Parliament, 2019a) differentiates between research and development licenses. The former aimds to add new knowledge about fish farming that will improve the operative performance of the industry (fish health, technology, feed, etc.), while the latter is intended to lead to the development of new technology and production processes or to develop new fish farming sites that can take the industry forward. The development license is similar to the Norwegian development license as outlined by Osmundsen et al. (2022).

16 Source: “Gera nú klárt til tøku av laksi á Sandi” https://in.fo/news-detail/gera-nu-klart-til-toeku-av-laksi-a-sandi https://fiskur.fo/40-millionir-til-aling-a-sandsvag (salmon harvest preparations on Sandoy).

17 This is the largest smolt station of Bakkafrost with a capacity of 9 million smolts at 500 g. Source: “Smoltstøðin á Strond hevur ov lítið vatn” https://kvf.fo/netvarp/uv/2021/08/23/smoltstin-strond-hevur-ov-lti-vatn (Strond smolt station in need of water).

18 Personal correspondence with Mowi Faroese CEO.

19 Personal correspondence with Bakkafrost’s CEO.

20 https://www.bakkafrost.com/en/about-us/news/bakkafrost-hevur-keypt-partabrovini-i-munkebo-seafood-a-s/.

Additional information

Funding

This research has been funded by Norges Forskningsråd; project number 324159 BESTEMT.