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I am extremely grateful to GAO, I should tell you, Mr. Robinson, 

 for the hard work that you and the folks there and the ability to 

 operate on such short notice. 



I believe that everyone can agree that credit is difficult at best 

 for agriculture ventures to obtain. It appears that your investiga- 

 tion quantified some of my concerns. 



I am interested now in outlining some solutions to address this 

 situation. And my question is: Does GAO have any recommenda- 

 tions on how the administration and the Department could help 

 educate the various lending institutions about aquaculture? Will 

 education alone help? 



Mr. Robinson. Starting with the first part of the question, GAO 

 has a couple of observations that we would be willing to make on 

 that subject. 



First of all, the education campaign, based on the work that we 

 have done, needs to go in both directions. Certainly lenders need 

 information on the health of the aquaculture industry and the po- 

 tential for growth. But on the flipside, prospective borrowers need 

 instruction, as we learned from our discussions with banking 

 groups, on how to put together a persuasive business plan, putting 

 the numbers and the dollars and cents down there to make a con- 

 vincing case that they have a solid enterprise. 



So the education needs to go both ways perhaps. I guess we 

 would say that, you know, from the two different perspectives, the 

 Department does have a structure in place to handle this. First, 

 the Extension Service does do some of this education. Perhaps a 

 beefed-up operation on that front would be useful. 



Also the Aquaculture Information Center, based on our quick 

 study of the industry, has a wealth of information that could prove 

 to be persuasive to potential lenders about the prospects for this 

 industry. 



As to the second part of the question, as we said in our state- 

 ment there are two primary barriers to increased availability of 

 credit: real risk and perceived risk. Certainly more education deals 

 effectively with the perceptions, to bring those into greater con- 

 formance with reality. 



As to the real risk, I think we have to be fair and honest and 

 say that this is an inherently risky business. There is some real 

 risk associated with this enterprise. It is heavily dependent upon 

 the ability of the operator to make correct decisions almost every 

 single day. If you make a wrong one, your whole pond could be 

 wiped out. There is a long lead time between starting the business 

 and generating cashflow at the other end. If a business fails, the 

 equipment that is involved does not exactly have a vigorous second- 

 ary market that you could sell off. 



So, you know, clearly education can deal with the perceptions, 

 but I think it is important to realize that there are some very real 

 risks out there that a lender faces. 



Senator Akaka. Yes. I asked the question because — 



Mr. Robinson. It was a very long answer, was it not? 



Senator Akaka. I believe that an informed lender is more likely 

 to make capital available to sound investments. But as you men- 

 tioned in your testimony, aquaculture is unique in the length of 



