5) Description of initiative: Chile has experienced an accelerated growth in the aquaculture industry, in the culture of algae, molluscs and particularly salmon. This productive boom has generated a series of environmental consequences, particularly the organic waste of salmon farms into pristine ecosystems. Moreover despite the economic growth and high employment in salmon processing, artesanal fishermen and local indian communities have been displaced from their traditional fishing grounds, generating social problems and conflicts between these communities. Terram developed a project to introduce system of seaweed culture around a salmon pen- cage (W.Bank MarketPlace project 450) which can absorb the organic waste around salmon farms, therefore reducing the environmental impact of salmon farms. Also, at a pilot level, we trained indian communities in this low cost technology, therefore a potential new source of employment: the production of seaweed culture. This approach is interesting because it is low cost and resolves an ecological problem through bioremediation. Also there is a growing culture of abalone. This boom has generated the depletion of brown seaweed from natural embankments, reducing biodiversity, to feed abalone. Therefore by cultivating seaweed around salmon-farms, the environmental impact of salmon production and seaweed depletion is reduced and abalone can have a steady supply of its main input, seaweed. Terram has shown that seaweed culture is economically and environmentally viable, there is a business plan. We propose to extend this project to an Indian Community in Chiloé and train them in the cultivation of seaweed, as well as contact them with a main salmon producer (MultiExport) which has expressed interest in the project. By making salmon-farming integrated with seaweed culture and local communities, the conflicts with the salmon-farming will be diminished, turning it into a more sustainable activity.

6) Description of innovation: Currently there are two approaches being explored to deal with the increasing environmental concerns of salmon- farming. The first is more sophisticated methods of farm rotation, which essentially leaves the ecosystem to flush out the excess organic waste. The second is moving towards closed pens. In our view neither system is fully acceptable, the first does not deal with the waste and, the second, is extremely costly, and probably not viable in developing countries.This particular technology was developed by Neori in Israel for closed pens and Chopin in Canada. We applied it at a pilot level with success in Chile. The proposal is innovative in the sense that the environment is cleaned in a sustainable way (new technology) generating a new source of employment for displaced fishermen and indian communities. Moreover it will be sustainable because seaweed cultivation is a profitable business, since it can be sold to abalone farmers. The technology is novel and simple, we trained a number of local indigenous people successfully. The technology consists of attaching algea at an infant stage to long lines around a salmon farm. As the seaweed grows it feeds off the nutrients produced by the salmon and absorbs it cleaning the environment, but also growing faster than natural seaweed, because of the excess of nutrients. Moreover, this approach is innovative in the sense that it generates a double dividend in biodiversity conservation, on the one hand the environmental impact of salmon-farming is bioremediated, on the other, the demand for the extraction of natural seaweed is reduced -which fulfills an important role. But the most relevant aspect is the possibility of developing a new beneficiary group, displaced artesanal fishermen and Indian communities who can now benefit indirectly from the salmon industry, through the use of this technology.

7) Delivery model: We have already set up a pilot model which has been successful at showing reduction of environmental impact and the capacity of indian communities to be trained in this simple technology. The results of this pilot exercise was: 1.Scientific results of nitrogen absorption capacity of seaweed of upto 70% to reduce environmental impact of salmon-farms. 2.Productive capacity of seaweed, they grow thirty percent more, on average, than in natural embankments (because of the nutrients around the salmon- farm). 3. A cultivation manual. 4. Experience training indian communities. With this experience and products we intend to publicise these results and broker an agreement between a salmon company and an indian community to develop the project at a business scale. Terram has a local office in Chiloé, Ancud which will work directly with communities to train them and broker this agreement with a salmon company. Already we are in conversastions with Multi-Export a salmon company that also produces abalone, which is interested in the project. With Ashoka’s help we hope to have the time and produce the materials to develop this idea.

8) Key operational partnerships: Terram has partnered with Universidad de Los Lagos to develop the technology. And partnered with TRUSAL a salmon company where the pilot seaweed culture project was developed. Terram has also partnered with the Huilliche community of Chonchi to experiment with training them in this technology. The purpose of this project now is to 'replicate' and 'difuse' the project. Therefore we wish to develop new partnerships and broker new agreements. Particularly we wish to develop an agreement between the salmon-company Multiexport and the Huilliche community to develop an agreement for seaweed cultivation.

9) Financial model: We have developed a business plan which shows that the internal rate of return of a seaweed cultivation project around a salmon net-pen is 29%. Recall this type of seaweed is the main input of abalone which requires upto 15 times its weight in fresh seaweed for food. One of the problems in further growth of the abalone industry is a constant supply of fresh seaweed. Therefore production is viable economically. However, the idea is for there to be a double divendend project that is generating a new income source and also reducing the environmental impact of salmon- farming, that is why an agreement must be reached between low income communities and a salmon-farm, such that the company gives access to seaweed production around their salmon-farm.

          • Costs as percentage of income: 59%

          • Financing: We intend the project to be financed by the salmon- companies, because it is good business, but through their social or environmental programs. Eventually the indian or low income communities, once they have an income stream should return the initial capital costs. But this is something to be developed and designed with the process of scaling up. But first we must generate the materials to broker the agreement between salmon-farmers, abalone- farmers and seaweed producers.For that we need support from Ashoka.

10) Effectiveness

          • Project outcomes: With the pilot project we have shown up 70% absorption rate of the nitrogen produced by a salmon-farm. Nitrogen is the main nutrient produced and the reason water systems are eutrophied. We have produced a cultivation manual. We have shown that seaweed grows thirty percent more than natural seaweed. We have developed a business plan with an internal rate of return of 29%, and determined year 7 as a payback. This is a sound business investment. We have also carried out training for indian communities successfully. This training can be replicated.

          • Number of clients in past year: At present it is at a pilot stage. The purpose of this second stage is to have funds to be able to support a scale up. The scaling up must involve low income communities and indian communities as well as seaweed cultivation around the salmon-farms, in order to achieve the 'double dividend'.

11) Scaling up strategy

          • Stage of the initiative: Scaling Up stage.

          • Expansion plan: We have developed a project, a business plan, now we are seeking funds for scaling up. With Ashoka support we hope to generate the conditions for scaling up the project. Currently there is a salmon production of over 600 thousand tons in Chile. It is the first world producer. Also abalone production is growing. This project could have a major expansion in the next three years.

12) Origin of the initiative: Terram has been concerned with the environmental impact of salmon-farming for many years. However it realized that salmon-farming was here to stay. So it has been seeking solutions to the environmental problems. Since no company or communities developed projects it decided to develop a solution by itself. In partnership with the University of Los Lagos it developed a pilot project to introduce integrated salmon-farming with seaweed. Funded by the World Bank Market Place. The results have been spectacular. Now we wish to move further and scale up the project by developing partnerships between salmon companies and low income communities, in order to devlop the double dividend of generating an economic activity and protecting the environment.

Contact Information:
Rodrigo  Pizarro
Executive Director
Fundacion Terram
(NGO)
Bustamante 24, piso 5-i, Providencia, Santiago
Chile
Tel: (56-2) 2694499
Email: rpizarro@terram.cl
Website: www.terram.cl