Thursday, April 3, 2014

Lesotho's Highland Trout: A Great Success Story

Goldfields, a South African bullion company, decided back in 2009 to invest in trout farming in Lesotho under the name, Highlands Trout. The company had identified the pristine cold waters of Katse Dam to farm trout. Highlands Trout is now producing 2000 tons a year of trout for the Japanese market. By way of comparison, South Africa produces about half of that in trout and a total of just over 4000 tons of farmed fresh water and marine fish despite the fact that we have a 3000 km coastline and multiple fresh water dams and water bodies. 

When Goldfields decided to invest an estimated R100 million in the project back in 2009, Lesotho did not feature as a trout farming country, let alone an exporter of prime quality fish capable of sale on the lucrative Japanese market. More importantly, Lesotho lacked a basic regulatory framework to sustainably manage fish farming in fresh water bodies such as Katse. And of course Katse Dam was built principally to provide drinking water to South Africa's Gauteng province. Accordingly, managing water quality was and remains a key criterion. The provision of water for fish farming is a secondary function of the dam's waters. 

The management authority for Katse Dam is the Lesotho Highlands Development Authority. LHDA and the Lesotho Government immediately recognised the huge potential of this investment for Lesotho as a country. In May 2010, Feike was appointed, together with Norway's former fisheries minister and then Chairman of the FAO Aquaculture Sub-Committee, Svein Munkejord, to design a comprehensive regulatory model and framework to allow the Highlands Trout investment (and others) to become a commercial reality. Within less than 6 months, we designed a complete regulatory framework for fresh water fish farming for Lesotho and waters controlled by LHDA (including Katse), as well as a "fish carrying capacity" calculator for fresh waters, which allows users to calculate the safe fish farming carrying capacity of fresh water systems. The regulatory model was drafted with principal objective of creating a "one-stop-shop" for the evaluation of issuing of fish farming licences, allowing for minimal red-tape and delays. 

The result of course is this tremendous success story. The lesson is clear. Investors will invest provided you give them regulatory and policy certainty and you remove the unnecessary red-tape and obstacles. With a single investment in a fresh water farming facility, Lesotho now produces 50% of South Africa's entire annual farmed fish production and double South Africa's entire trout production notwithstanding the fact that we not only have substantially more financial resources at our disposal, but we have multiple water bodies for fresh water fish farming and some 1 million square miles of ocean space! 

South Africa has been "talking" about fish farming for years. We have been saying that fish farming is important and how it can provide "alternatives" to wild fish harvesting, but the Fisheries Department's  commitment to bureaucracy and an increasingly unfriendly business attitude has ensured that South African investors invest abroad in country's like Lesotho and Namibia or simply keep their cash invested elsewhere. 

Postscript: Port Nolloth Sea Farms Ranching, a long-standing Feike client, that was allocated a 10-year abalone sea ranching right in late 2012, became the first abalone ranching right holder to commence with the planting of abalone off the Northern Cape coast earlier this month. 

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