Global fishiness

If you look at the growth of three things between 1990 and 2005, the graphs are near perfect shadows of one another: farmed-salmon production in the world, farmed-salmon production in Chile, and Wal-Mart's grocery business. They all start low on the scale, and go almost vertical after a few years. Wal-Mart did not create the farmed-salmon business; Wal-Mart did not plant the salmon farms in southern Chile. But the dramatic growth of domesticated salmon drove down prices for salmon and fed Wal-Mart's ability to deliver salmon to the fish counter; and the dramatic growth of Wal-Mart's grocery business created a huge opportunity, and a huge appetite, for salmon that has fed the salmon-farming industry.

The total world salmon harvest in 1985 was fifty thousand metric tons. It doubled in two years. By 1990, it was three hundred thousand metric tons. As the 1990s dawned, the Canadians and the Chileans started aggressively farming salmon, and the price started to drop dramatically as the worldwide supply surged.

Salmon farming in Chile was spurred by a business incubator called Fundacisn Chile, according to Rodrigo Pizarro. "A lot of young businessmen, in the late 1980s and early 1990s, men who were the sons of families with historical business ties, found out about salmon and went to the south to find out what was happening," says Pizarro. "They went to a sort of frontier area -- and they stayed in those places and built this industry. It took five or ten years." Among other things, Chile's rugged coastline is much like Norway's, dotted with inlets and fjords that provide the kind of protection that pens of farmed fish in the ocean need.

James Anderson, an aquaculture expert at the University of Rhode Island, has visited the salmon farms of Chile as part of his academic work. "They had no history of aquaculture in Chile," he says. "None at all. But there is a real entrepreneurial spirit in Chile. And they had cheap labor, and a cheap environment." Salmon farming flourished.

Now, says Anderson, you can get salmon from farms in Chile up to the United States faster than you can get it down from Alaska. "In Chile," he says, "they harvest the fish early, early in the morning, when it's still dark. They get it to the processing plants near the farms right in the morning. Then it's on a truck or a plane to Santiago, and then on a plane to Miami. There's fish killed in southern Chile that is in Miami or New York in under forty-eight hours."

In 1985, the total world farmed-salmon harvest for the year was fifty thousand metric tons. Twenty years later, in 2005, Chile sent ten thousand metric tons, just to the United States, just in January.

Salmon farming on a commercial scale is really only twenty years old, and on a mass scale, it's more like ten years old. Aquaculture is an industry growing much more quickly than its impact can be measured, understood, and managed.

"Have you ever seen a hog farm?" asks Gerry Leape, vice president of marine conservation for the National Environmental Trust, a Washington-based environmental nonprofit group. "These fish are the hogs of the sea. They live in the same sort of conditions, it's just in water. They pack them really closely together, they use a lot of prophylactic antibiotics, not to treat disease, but to prevent it. There's lots of concentrated fish waste, it creates dead zones in the ocean around the pens."

Jennifer Lash is executive director of the Living Oceans Society, a marine conservation group in British Columbia, which is one of two centers of salmon farming in Canada. "Salmon are generally raised in open-net pens," she says. "There is a metal cage on the surface, with nets hanging down to a netted bottom.

"The density of fish depends on the nation, but they grow tens of thousands of fish per net, 1 million or 1.5 million per farm. Then they all go poo. There is a huge amount of waste going into the ocean. People say, oh, that's natural, all fish go poo in the ocean. But not in that kind of concentration. It just smothers the seabed." One million salmon produce the same sewage, says Leape, as sixty-five thousand people.

The ocean pens suffer from another source of pollution -- excess feed. Any food that isn't consumed settles to the ocean floor, adding to the layer of feces. The waste itself contains residues of antibiotics and other chemicals used to keep the fish healthy during the two years it takes them to grow to harvestable size.

All those problems are manageable; it's just that managing them costs money, and if there is no reason to spend that money, no incentive, then no one does.

In southern Chile, says Pizarro, the impact on the daily lives of the local people comes not so much from the pens of fish as from the processing plants built to prepare them for export. "What salmon farming has done is move the people from subsistence agriculture to factory work," says Pizarro. "Salmon farming for the people is about the processing plants, it's not about the farms."

The plants themselves are modern and hygienic, in part because American companies fear nothing so much as importing tainted food that sickens their customers. Despite the cleanliness, the processing plants suffer by most accounts from the kinds of sweatshop issues more commonly associated with garment factories in developing nations.

"The hours worked are not respected," says Pizarro. "There are a lot of women working in the processing plants. There are a series of issues in terms of sexual harassment, in terms of hours worked standing up. They are not allowed to go to the bathroom. And there are antiunion practices."

Pizarro is quite careful in discussing the labor issues. "Much of this is denied by the companies," he says. "But currently, the labor standards are very weak, and they are very difficult to enforce. These plants are very far away from Santiago."

Part of the reason Wal-Mart can sell a salmon fillet for $4.84 is that, as Leape puts it, "they don't internalize all the costs." Pollution ultimately costs money -- to clean up, to prevent, to recover from. But right now those costs aren't in the price of a pound of Chilean salmon. Salmon-processing facilities that are run with as much respect for the people as the hygiene of the fish also cost money -- for reasonable wages, for proper equipment, for enough workers to permit breaks and days off. Right now those costs aren't in the price of a pound of Chilean salmon either.

Groups like Pizarro's and Leape's, concerned about salmon's impact in Chile and elsewhere, agree on two things. The salmon industry isn't going away -- Chile has declared that it intends to increase production another 50 percent by 2010. And the key to managing the impact of salmon farming, to making the business sustainable for both Chileans and their environment in the long term, isn't self-regulation or government regulation. It's the customers, the big corporations who buy salmon by the ton. Even the corporations realize that.

"When the guys with the checkbooks talk," says Bill Herzig, "the producers listen." Herzig knows because he is one of the guys with the big checkbooks. He's senior vice president of purchasing for Darden Restaurants -- Red Lobster, Olive Garden -- for all proteins, including seafood. "We own thirteen hundred restaurants," says Herzig. "We have to have something to feed those customers, not just this year, but five years and ten years from now. We won't put something on our menu if we don't believe the supply is sustainable."

That's why someone like Rodrigo Pizarro thinks a company like Wal-Mart could have such a rapid and positive effect on improving conditions in the salmon industry in Chile. Wal-Mart buys so much salmon that if it imposed and enforced a set of standards on how salmon was to be raised, and how salmon workers were to be treated, salmon farming and processing companies would need to comply, either to keep Wal-Mart's business or to stay competitive. And because the volume of purchasing is so high, and because Chile is driving to further expand the supply of farmed salmon, the improved conditions for both the salmon and the people would not cause much of an increase in the price of a pound of salmon in the seafood case.

"It wouldn't be considerably more," says Pizarro, who is working on just such a set of standards, backed by research, that he plans to present to Wal-Mart and other companies in early 2006. "The increase in cost is not something to pick a bone about. It would be 10 or 20 or 30 percent, a minor cost when you are making a long-term investment."

The result could be a completely new kind of Wal-Mart effect -- Wal-Mart using its enormous purchasing power not just to raise the standard of living for its customers, but also for its suppliers.

Next page: Where is the point of Wal-Mart leverage?