By Stephen Rappaport

Last year, according to preliminary figures from the Department of Marine Resources (DMR), harvesters landed some 18.7 million pounds of Atlantic salmon from the 15 active farm sites along the Downeast coast.

A former Atlantic Salmon of Maine farm site near Cross Island at the mouth of Machias Bay. The orange bird netting is designed to keep egrets, cormorants and other seabirds from feasting on smolts and juvenile salmon.

A former Atlantic Salmon of Maine farm site near Cross Island at the mouth of Machias Bay. Maine’s salmon farms stretch along the Downeast coast from Cobscook Bay to Swan’s Island and Blue Hill Bay. Last year, farmers harvested about 18.7 million pounds of salmon from 15 active farms, most of them in Cobscook Bay.  The map shows fin fish aquaculture lease sites, not all of which are active. After buying Atlantic Salmon of Maine in April 2004, Cooke Aquaculture closed the company’s Machiasport processing plant (above) in November. Built in 1987, the plant was the last facility to process salmon Downeast. In recent years, processing ended in both Eastport and Lubec. Staff Photos by Stephen Rappaport

With a landed value of approximately $39.9 million, salmon were, after lobsters, Maine’s most valuable fisheries resource.

An economic study prepared for the state’s Aquaculture Task Force in 2003 concluded that the salmon industry and its suppliers were responsible for more than 1,000 jobs in Maine and generated tax revenues of roughly $10 million for the state.

Despite these big numbers, the salmon industry faces a host of challenges that raise questions about its future in Maine.

Those challenges are both environmental and economic, and they are interrelated.

Just a few years ago, three large companies — Atlantic Salmon of Maine (ASM), Heritage Salmon and Stolt Sea Farm — raised Atlantic salmon in net pens at sites between Blue Hill and Cobscook bays.

Now there are just two: Cooke Aquaculture — a family-owned Canadian company that bought out Heritage and ASM — and the Norwegian giant Stolt.

Stolt itself is in on-again off-again negotiations to sell its Maine salmon farming operations to Cooke, which has extensive facilities in New Brunswick.

This local consolidation is a reflection of what has occurred in a world salmon industry that now is controlled by a scant handful of European companies.

With the real possibility that the Maine industry could become a single-player game, the environmental and economic issues facing salmon industry have taken on a new urgency. Perhaps surprisingly, the long-running war between the industry and the environmental community may be winding down.

Sebastian Belle, executive director of the Maine Aquaculture Association, says that Maine’s salmon farmers have worked hard to address the concerns of environmentalists and fisheries regulators concerned with protecting Maine’s tiny population of endangered wild Atlantic salmon.

He cites as examples the industry’s cooperation in implementing an ecosystem-based, bay-wide management program for Cobscook Bay, where most of the state’s salmon farms are located.

The industry also has adopted a strict set of construction standards and operating protocols for its facilities aimed at minimizing the likelihood of fish escapes from salmon farms. The fish containment program requires meticulous record keeping and periodic, on-site compliance audits by an independent third party.

With some site-specific modifications, the voluntary containment procedures originally adopted by the industry have been formally incorporated into the Maine Department of Environmental Protection (DEP) permit that the farms are required to have to comply with the federal Clean Waters Act.

Belle’s view of the industry’s efforts to improve its conservation practices gets support from Andrew Goode, director of U.S. programs for the Atlantic Salmon Federation (ASF). That conservation group participated in the three years of negotiations leading to issuance of the current permits.

“I think the industry is in a lot better position environmentally,” Goode said this week. “A lot of good progress has been made in the state of Maine.”

Still, there appears to be a long way to go.

According to Goode, disease is one of the major issues facing the industry. Over the past few years, Maine salmon farmers have had to destroy millions of fish potentially exposed to infectious salmon anemia (ISA). The cost has been enormous, and only a small portion has been recovered through insurance.

Despite its best efforts to increase biosecurity at its farms and shoreside facilities to control the spread of ISA, the industry has been less than successful. Evidence suggests that ISA, which occurs naturally in the ocean, frequently spreads through the waters of Cobscook Bay from salmon farms in New Brunswick.

Even substantial reductions in the number of fish in the water, and adoption of single year-class farms, have had relatively little effect, Goode said.

“They haven’t been able to deal with it effectively,” Goode said, “I get notices from the DMR almost monthly. Even at one-third the densities allowed under their permits it continues to be a real problem.”

Another problem facing the industry is the hard line federal fisheries regulators — charged with developing a salmon recovery plan under the Endangered Species Act — have taken on marking farmed salmon.

The recovery plan requires that, by 2007, all farmed fish be marked so that escaped salmon can be traced to their source.

According to Belle, the U.S. Fish and Wildlife Service insists that the marking be site-specific, so that regulators can identify the farm site from which a fish escaped.

The industry is pushing for company-specific marking for both cost and technological reasons. Company marking would, he said, give regulators all the information they need for enforcement purposes.

Goode, who calls the marking issue “potentially a deal-killer” in the permit negotiations, agrees.

“Company-specific marking gives 90 percent of the information you need to identify and fix a problem. Site specific marking is something the companies have a right to worry about from a cost perspective.”

Cost is a real concern for Maine salmon farmers. In 2004, the farmgate price for salmon was $2.13 per pound, the best in three years. In 2002, the average price was around $1.60 per pound.

In 1991, when the Maine salmon industry began its expansion, farmers got as much as $7.60 per pound.

Goode says that the Maine salmon industry is “reeling” because of economic and environmental factors — competition from Canadian and Chilean imports, the cost of complying with ESA requirements, ISA and the loss of hundreds of thousands of fish to bitter cold winter water temperatures.

Yet he doesn’t foresee its demise. “I think there’s a future, but it’s a different future.”

Instead of producing huge volumes of fish and competing on the world market, he thinks the industry will “carve out a regional niche” and make its money from creating value-added products.

Belle, who has seen the effects of years of environmental litigation and foreign competition on the industry, also is optimistic, despite the contentious ongoing negotiations with federal regulators.

“I remain convinced that aquaculture is the most responsible way to use renewable marine resources,” he said.

“I believe aquaculture is the only way to increase the amount of protein we take from the ocean in Maine, and that science will win out, but only if regulators, environmentalists and industry can find a way to resolve their differences.”