36 



may be too low. Of course, increasing the loan limits would also increase the Federal 

 Government's exposure to loss. 



In addition, according to industry officials, the research being funded by USDA 

 is either often not the type that the industry needs most or does not meet the needs 

 of particular segments of the industry Currently, USDA funds all types of research, 

 from basic work on the genetics of an individual species such as catfish to the com- 

 mercialization of computer-monitored recirculating systems. While the officials 

 noted that in an emerging industry like aquaculture, all types of research are need- 

 ed in the long term, they cited two areas in particular that they believe should be 

 given priority because of their more immediate need. 



First, some industry and research representatives cited the need for research on 

 animal drugs to comply with FDA's requirements. Before drugs can be used to treat 

 illness in consumable fish, they must be proved to be safe through an extensive and 

 costly registration process with FDA. For other industries, pharmaceutical compa- 

 nies usually foot the bill for the registration research, passing the costs along to cus- 

 tomers. However, according to producer representatives and researchers we spoke 

 with, no single component of aquaculture — for example, the segment of the business 

 devoted to trout — provides pharmaceutical companies with a large enough market 

 to warrant the several million dollars needed to register the drugs with FDA. Cur- 

 rently, only five drugs have received FDA's approval for use on specific species. Iron- 

 ically, unregistered drugs can be used by foreign aquabusinesses, which compete 

 with U.S. aquabusinesses in the U.S. market. CSRS representatives noted that 

 USDA spent over $400,000 « in fiscal year 1993 for research related to the drug ap- 

 proval process. Further, according to the Director of the Office of Aquaculture, the 

 Joint Subcommittee on Aquaculture is considering supporting funding of at least 

 $20 million over the next 5 years for research on the eight priority drugs identified 

 by the industry. 



Second, according to producers we spoke with in a discussion group, additional 

 "practical" research to test the commercialization of individual species is needed. 

 They explained that the commercialization of many species is still in a developmen- 

 tal and highly risky phase. Additional research in transferring laboratory results to 

 profitable production would be most useful to much of the industry now, while it 

 is emerging, according to these producers. One commented that the research being 

 done at the Regional Aquaculture Centers — established since 1987 to enhance com- 

 mercial aquaculture production — ^has been a step in the right direction but that the 

 industry, rather than academia, should have more influence on the choice of projects 

 given priority. Two of the producers we interviewed are performing their own com- 

 mercialization research on-site for tilapia and hybrid striped bass because USDA is 

 not funding research geared toward the specific problems they face. 



In addition, several producer representatives highlighted other areas not specifi- 

 cally linked to current USDA services that the industry believes are important is- 

 sues for the Congress to consider. First, some industry representatives believe that 

 seafood inspection should be mandatory for both domestic and imported aquaculture 

 products. They believe inspection is needed to ensure quality and safety and to un- 

 derscore the industry's concern for the U.S. consumer. There are currently no man- 

 datory inspection retirements for seafood, although FDA has drafted a mandatory 

 seafood safety program for both domestic and imported products. The draft plan is 

 under review by the Office of Management and Budget. 



Second, several industry and research representatives believe that individual pro- 

 ducers face increasing difficulty complying with clean water laws. According to the 

 National Aquaculture Association's executive director, the industry expects compli- 

 ance with clean water laws to become more difTicult and costly as the Congress and 

 States pass new clean water legislation. He added that many of the affected 

 aquabusinesses are small companies with narrow profit margins and so cannot af- 

 ford to comply with the requirements. 



I hope this overview of issues afff cting aquaculture will facilitate your delibera- 

 tions on the National Aquaculture Act's reauthorization. I would be pleased to an- 

 swer any questions that you may have. 



8 This amount is included in the total budgeted for CSRS' aquaculture research. 



