Rethink everything  

01/03/2017

Food for thought: Lombard Odier and the FT explore 3D ocean farming

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Feeding the world’s population is no easy feat but Bren Smith, US ocean farming pioneer, is looking to tackle this growing issue.  In part three of our collaboration with the Financial Times, we explore farming in an entirely new light.  Enter, ‘3D ocean farming’. It’s sustainable and has the potential to unlock new methods and investments in modern-day farming.
Not only is this initiative green, it has the possibility to create a new gourmet experience as Smith’s experiments explore an array of new, edible plants and shellfish.
Like Bren Smith, at Lombard Odier, we believe in evolving in order to create a impactful society, enrich experiences and  provide the right solutions for our clients.

Video can be downloaded here:
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The world is running short of fish. Most global fisheries are at or beyond their catch limits yet the global appetite for fish is growing.

Demand, forecast to reach 232 million tonnes at current growth rates by 2030, will soon outstrip supply (which is only forecast to be 170 million tonnes by then).

It is an obviously unsustainable trajectory and one that ocean farming pioneer and owner of Thimble Island Ocean Farm in Connecticut, USA, Bren Smith has experienced first-hand.

In his early teens, Smith went out to sea and saw how industrialised fishing fleets vacuumed up fast-collapsing fish stocks. “Because of declining fish stocks I had to say goodbye to fishing for a living. I loved it but it just wasn’t sustainable,” says Smith.

Conventional aquaculture will meet some of this growing demand but fish farms have their own environmental impact, Smith saw this when he tried his hand at it. He left it behind after witnessing the environmental toll they exacted and today he regards them as the “Iowa pig farms of the ocean.”

NemosGarden1.jpgHis next venture, oyster farming, promised to be more sustainable but two successive hurricanes swamped the beds and destroyed his harvest. It was in response to these setbacks that he re-thought the whole process, suspending his oysters above the ocean bed and realising he could also grow other crops in this fashion.
The farming system that evolved from this is a new kind of aquaculture that could have the potential to unlock the economic value of untapped areas of the sea.

Smith’s pioneering idea is ‘3D’ ocean farming. Lengths of rope suspended from the surface of his 3D farms grow seaweed, mussels and scallops above the nurseries of oysters and clams in their suspended baskets. As well as being resistant to storm damage, the system also allows for different species of plants and shellfish to grow to suit the conditions, making it resilient to different and changing environments.

Not only are they nutritious, rich in minerals vitamins and protein, these twin harvests of sea vegetables and molluscs provide totally sustainable crops, says Smith. “I grow marine crops that require zero input. No fresh water, no fertilizer, no feeds and no land. That makes it the most sustainable form of food production on the planet.”

They are highly productive too. A single 3D farm can yield 30-60 tonnes annually. “The seaweed is the game changer for me as a farmer because it’s one of the fastest growing plants on earth, specifically our kelp. Seaweed can be the cheapest food on the planet.”

The environmental benefits are also great. Smith’s system creates artificial ‘reefs’ in which fish thrive and also captures carbon, a contributor not only to global warming but also to the acidification of the oceans.  “Our farms soak up five times more carbon than land based plants.”

The system also filters out nitrogen which causes algae to grow faster than ecosystems can handle, starving fish and other aquatic life of the oxygen they need to survive. “It’s a huge problem around the globe, causing ocean dead zones,” says Smith

It is a system that shows great commercial promise. Globally, the seaweed industry is worth $6bn a year, yet Smith believes the potential of this harvest has barely been explored.

“Kelp is just the beginning of creating an entirely different cuisine. There are 10,000 edible plants in the ocean and a couple of hundred different types of shellfish. Imagine being a chef and finding tomatoes, corns, spices that you have never cooked with before and you have never eaten before.”

Smith is busy exploring these possibilities himself and with chefs, creating new sea-vegetable lines. “Kelp is like the soy of sea. We do kelp jerky, soups, ice-creams, noodles,” says Smith.

NemosGarden1.jpgSeaweed also has use as a biofuel, for fish feed, nutrition-rich fertiliser and feedstock for the pharma and cosmetics sectors.

The 3D farm he has already established is only the beginning. Smith has set up Green Wave, a non-profit organisation designed to help train fishermen to adopt the system, giving them sustainable work with a relatively low outlay. Adopted by many at a small scale, he hopes it will make a big difference globally.

“We designed it so that there isn’t much infrastructure. That makes it extremely cheap to build. Anybody with 20 acres, a boat and about twenty thousand dollars can be farming the first year.”

“We can really scale this. If you were to take a network of our farms around the size of Washington State, you can technically feed the world. A small-scale thing can really add up to have a huge impact on our food system. And that’s important because the problems we are facing in the oceans and on land are pretty daunting.”

“What I am doing is trying to take all the lessons learned from industrial agriculture and not make those mistakes again. Our oceans are essentially a blank slate and it is up to us to build an ocean agricultural system from the bottom up, to actually do food right and grow food the right way.”

IMPORTANT INFORMATION

This is a marketing communication issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter "Lombard Odier"). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This marketing communication is provided for information purposes only. It does not constitute an offer or a recommendation to subscribe, to purchase, sell or hold any security or financial instrument. It contains the opinions of Lombard Odier, as at the date of issue. These opinions and the information contained herein do not take into account an individual’s specific circumstances, objectives, or needs. No representation is made that any investment or strategy is suitable or appropriate to individual circumstances or that any investment or strategy constitutes a personal recommendation to any investor. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Lombard Odier does not provide tax advice. Therefore you must verify the above and all other information provided in the marketing communication or otherwise review it with your external tax advisors.

Investments are subject to a variety of risks. Before entering into any transaction, an investor should consult his/her investment advisor and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. The information and analysis contained herein are based on sources considered to be reliable. However, Lombard Odier does not guarantee the timeliness, accuracy, or completeness of the information contained in this document, nor does it accept any liability for any loss or damage resulting from its use. All information and opinions as well as the prices, market valuations and calculations indicated herein may change without notice.

Past performance is no guarantee of current or future returns, and the investor may receive back less than he/she invested. The value of any investment in a currency other than the base currency of a portfolio is subject to foreign exchange rate risk. These rates may fluctuate and adversely affect the value of the investment when it is realised and converted back into the investor’s base currency. The liquidity of an investment is subject to supply and demand. Some products may not have a well-established secondary market or in extreme market conditions may be difficult to value, resulting in price volatility and making it difficult to obtain a price to dispose of the asset.

European Union Members: This marketing communication has been approved for use by Lombard Odier (Europe) S.A., a credit institution authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg and by each of its branches operating in the following territories: Belgium: Lombard Odier (Europe) S.A. Luxembourg • Belgium branch, a credit institution supervised in Belgium by the Banque nationale de Belgique (BNB) and the Financial Services and Markets Authority (FSMA); France: Lombard Odier (Europe) S.A.• Succursale en France, a credit institution supervised in France by the Autorité de contrôle prudentiel et de résolution (ACPR) and by the Autorité des marchés financiers (AMF) in respect of its investment services activities; Italy: Lombard Odier (Europe) S.A. • Italian Branch, credit institution governed in Italy by the Italian stock market regulator (Commissione Nazionale per la Società e la Borsa, or CONSOB) and the Bank of Italy; Netherlands: Lombard Odier (Europe) S.A. • Netherlands Branch, a credit institution supervised in the Netherlands by De Nederlandsche Bank (DNB) and by Autoriteit Financiële Markten (AFM); Spain: Lombard Odier (Europe) S.A. • Sucursal en España, a credit institution supervised in Spain by the Banco de España and the Comisión Nacional del Mercado de Valores (CNMV); and United Kingdom: Lombard Odier (Europe) S.A. • UK Branch, a credit institution in the UKsubject to limited regulation by the Financial Conduct Authority (‘FCA’) and the Prudential Regulation Authority (‘PRA’). Details of the extent of our authorisation and regulation by the PRA and regulation by the FCA are available from us on request. UK regulation for the protection of retail clients in the UK and the compensation available under the UK Financial Services Compensation Scheme does not apply in respect of any investment or services provided by an overseas person.

In addition, this marketing communication has also been approved for use by the following entities domiciled within the European Union: Gibraltar: Lombard Odier & Cie (Gibraltar) Limited, a firm which is authorised and regulated by the Financial Services Commission, Gibraltar (FSC) to conduct banking and investment services business; Spain: Lombard Odier Gestión (España) S.G.I.I.C., S.A.U., an investment management Company authorised and regulated by the Comisión Nacional del Mercado de Valores (CNMV).

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