The cost of sea lice and its implications for the future of the Norwegian aquaculture industry : a study on sea lice and recommendations for the government to reach its 2050 goal
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- Master Thesis 
The Norwegian government has stated its goal to reach a production level of five million tons of farmed salmon by 2050. Today, the country produces approximately 1.2 million tons. Sea lice have become one of the biggest obstacles for continued growth in the Atlantic salmon industry in Norway. The costs related to sea lice treatments were estimated to NOK 4/kg of harvested fish in 2016, while they were calculated to NOK 1.5/kg in 2011. This thesis aims to examine the indirect cost related to lice and its implications for the government’s 2050 goal. Indirect costs incur from reduced growth of biomass caused by lice infestation of salmon. Based on the quantitative analysis of the indirect costs, we build a qualitative analysis to discuss and suggest a direction for the government to reach the 2050 goal. Using data from farms in Norway from January 2013 to December 2016, we estimate the impact of lice in terms of biomass growth. The results show that indirect costs have increased compared to earlier studies. On average, Norwegian farmers experience a loss of NOK 4.40/kg or 9.5 per cent of revenues to reduced biomass growth. The qualitative analysis suggests that the most critical drivers to shape the future of the industry are the government's regulations and technology development and adoption by farmers. Four different scenarios developed by these two drivers illustrate the salmon aquaculture industry in 2050 where two of the scenarios indicate the possibility of increased production. Depending on the level of lice regulations, we recommend two different actions. With relaxed regulations regarding lice, different incentive schemes can encourage the farmers to cope with the problem with autonomy. Whereas, when the regulation is relatively stricter, the government should be able to provide the readiness for the farmers before the intensified regulation enforcement of lice.