64 SEPTEMBER 2015 • WORLD AQUACULTURE • WWW.WAS.ORG Maryland Shellfish Aquaculture: History and Changing Attitudes Maryland has a long history of seafood production centered around the largest estuary in the United States, the Chesapeake Bay. This system has provided striped bass (rockfish), blue crabs, and oysters to generations of harvesters and processors. Oyster industry expansion was aided by the development of canning technology and the advent of refrigerated rail cars that followed construction of railroads to western states. With these, the Chesapeake Bay became a major producer of oysters consumed in the United States. In the late 1800s, annual oyster harvests peaked at just over 14 million bushels. By 1950, annual oyster harvests had declined to less than 2 million bushels. Heavy fishing pressure and the emergence of oyster diseases in the 1960s to 1980s decimated oyster populations. According to the Maryland Department of Natural Resources (DNR), the commercial oyster harvest was 341,000 bushels for the 2012-2013 harvest season, which represents the highest since the 2000-2001 season (Tarnowski 2014). Since peak harvests of the late 1800s, aquaculture has provided oysters in many areas of Maryland, mostly around areas with established shucking houses. Oyster aquaculture faced opposition from commercial watermen in Maryland for many reasons, mostly because the industry wanted regulation to maximize the participation of small-scale harvesters, at the expense of large-scale businesses. Furthermore, oyster aquaculture development was banned in certain counties by the Maryland legislature under pressure from commercial watermen. In 2009, under Governor Martin O’Malley, the Maryland legislature revised oyster leasing laws to remove restrictions and impediment, shorten permitting times, and improve the leasing process. In December 2010, Governor O’Malley stated “… there could be a minimum of 150 oyster aquaculture operations in Maryland, and even more if we can expand the market for Maryland oysters. Annual payments to growers would be $9.5 million. The total annual impact on the Maryland economy would be about $25 million and it would create about 225 full-time equivalent jobs. (The actual number of people being employed will be a lot higher because it will create a lot of part-time jobs).” The revision of leasing laws and the suite of support programs Creative Financing Programs to Support Development of Shellfish Aquaculture in Maryland Matthew D. Parker put in place by the O’Malley administration signaled a change in the Maryland oyster aquaculture industry. In 2011, all aquaculture permitting was consolidated into a single division in the DNR to help expedite the time to obtain a lease. This was aided in that year by a Regional General Permit from the US Army Corp of Engineers for oyster aquaculture in Maryland to further reduce permitting times for limited size leases. With the opening of many new grounds and a climate of attracting growers to the industry with support programs, the DNR received a large influx of lease applications. Financing Development In 2010, DNR received approximately $2 million from NOAA in Blue Crab Disaster Funds (BCDF). A portion of these funds was set aside to help transition traditional Maryland watermen to oyster aquaculture to provide an alternative income source. The Maryland Agricultural Resource Based Industry Development Corporation (MARBIDCO) was enlisted to administer a Maryland Shellfish Aquaculture Loan Fund (MSALF). MARBIDCO also secured additional capital funds directly from the Maryland state budget. With these two sources, the MSALF began to accept loan applications in late 2010. The program provides non-collateralized signature loans and has a requirement of 10 percent owner equity for which existing equipment can be used. Depending on the source of funds for loans, the MSALF has several restrictions. The BCDF may only be used by shellfish aquaculture applicants who have a Tidal Fisheries License. These funds may only be used to purchase shell and seed while capital funds may be used by anyone with a current or pending aquaculture lease. Funds are for equipment, with boats and vehicles excluded, which have at least a 15-year useful life and may be used for shellfish aquaculture cage or float systems, which are expected to last at least 15 years with regular maintenance. Projects in the MSALF may range from $5,000-$100,000 and have a 5-year term. Understanding that oysters take time to grow, and that many potential applicants would be starting new farms, MARBIDCO implemented a 3-year interest only portion to the loan. A shellfish aquaculture operation would make interest only payments for the first three years of the term of the loan, with the assumption that Oyster aquaculture faced opposition from commercial watermen in Maryland for many reasons. Furthermore, oyster aquaculture development was banned in certain counties by the Maryland legislature under pressure from commercial watermen. In 2009, under Governor Martin O’Malley, the Maryland legislature revised oyster leasing laws to remove restrictions and impediment, shorten permitting times, and improve the leasing process. In 2011, all aquaculture permitting was consolidated into a single division in the DNR to help expedite the time to obtain a lease.
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