By Cheryl Dahle
For years, fish have been the comparative Rodney Dangerfield of food systems work: They get no respect. While certified organic produce, grass-fed beef, farmers markets, and the slow food movement have become darlings of hipsters and impact investors alike, fish (farmed or wild) hasn’t enticed the same degree of attention or fervor.
To be fair, the topic is more complex and less accessible than many land-based food issues. Unsustainable fishing practices and their impact is mostly hidden underwater, save for a lone documentary or video clips of developing world fishers “harvesting” with dynamite.
Despite recent encouraging efforts to spur an impact investing revolution in fisheries (Future of Fish’s work in grooming disruptive seafood industry entrepreneurs, the Fish 2.0 business plan competition, and Bloomberg’s $53 million commitment, to name a few), we’re still a long way from a developed investment marketplace that would become a powerful engine for change.
The best place to start in the supply chain is at the local processor or distributor level. But lenders often make assumptions about shortening the supply chain based on their experience in coffee and believe processors are exploitative and need to be obviated. The truth is that they are a critical layer of value for a highly perishable product. And as small-to-medium-sized companies, processors can provide critical jobs in poor communities.
With the right mentoring and investment, processors in developing countries could easily either cultivate Western markets for their products, or, even better, develop local markets for fish. The funds to pay for that kind of technical assistance are hard to find, meaning companies have trouble qualifying for financing or attracting investment.
But we’ve solved these problems in small bites in other contexts. Kiva has proven with its “gamification” of lending (playing the “game” of making a difference) that average citizens make excellent subsidizers of risk for otherwise un-bankable clients. Other commodities like coffee and vanilla have proven models of basing loans on forward contracts. We have “capital stack” deals in which philanthropists adopt the riskiest position in an investment through matching capital or guarantees.
What we need are creative financial professionals to apply their attention to learning fish and use these tools to solve these combined, but not unique, challenges.
Well, to get there we need shifts in policy, the constraints of raw materials, distribution support, and labor markets. And we also need consumers to understand that not all farmed fish is bad. An investor interested in developing fish farms needs to think about all these constraints, not just one deal on the table.
At Future of Fish, we’re building pathways to act in a system-driven fashion for philanthropists and investors alike. Our recent study of innovative fish farming identifies barriers to scale for all fish farms, opportunities that could be tackled by teams of entrepreneurs, policy makers and NGOs. We’ll be convening a working group on these issues in Q4 of 2014.
Our hope is that these sorts of efforts make the investment in wild and farmed fish lucrative, as well as good for the environment. Who knows? In the meantime, I’m still wondering when respected events like this one for investors promoting local food will consider their table-setting for attendees incomplete without a few fish-related speakers and companies in the mix. Fish is food. We should muster the same respect, interest and investment for it that we do for its soil-based counterparts.
Image credit: Flickr/mattpaish
Cheryl Dahle is the founder and executive director of Future of Fish. If you’re interested in being part of FoF’s convening on farmed fish, email firstname.lastname@example.org.