THE COSTS OF REGULATORY COMPLIANCE ON WEST COAST SHELLFISH FARMS: EFFECTS AND IMPACTS ON PRODUCERS

Through the end of 2016, a survey to assess the costs and impacts of regulations affecting shellfish aquaculture on the west coast was conducted. While producers widely acknowledged the importance of regulations, specifically with regards to environmental protection and food safety; many also reported indirect costs of regulatory compliance in their business. Preliminary results from the study indicate that there are several economic effects that were observed during interviews and from data analysis that are worthy of note. These included significant impacts to business development and planning resulting from permit and licensing delays, with 25% of respondents reporting to wait a year or more for a permit to be approved or processed; some delays lasting up to 20 years. Cash flow interruptions from missed planting or harvest windows; with small scale producers being particularly vulnerable to cash flow interruptions. Increased legal fees and administrative costs, and lost sales or missed opportunities for expansion and diversification; 40% of respondents indicated they were unable to expand their operations, despite increased demand for shellfish. In addition to these impacts, some producers also reported lost investment capital due to regulatory uncertainty, and the labor challenges of ensuring regulatory compliance as a small business.