North American Journal of Aquaculture

Objective: The objective of this study was to measure the economic effects of regulations on Atlantic Coast shellfish farms, specifically to: a) measure the total regulatory cost burden on Atlantic Coast shellfish farms; b) measure the value of lost revenue resulting from regulatory action; and c) compare economic effects of the regulatory framework across Atlantic Coast states and farm sizes. Methods: A survey was conducted of shellfish producers in Atlantic Coast states (Connecticut, Delaware, Florida, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia) in 2019-2022 that elicited detailed farm information on the farm-level regulatory compliance burden, production and marketing costs, sales, and revenue lost from regulations. Results: The aggregated regulatory costs on Atlantic Coast shellfish farms were $7.5M (2023 values), 7% of total farm costs and 4% of total farm sales, and averaged $28,849 per farm. Total lost revenue (from lost production and markets and thwarted expansion attempts) was $9.4M (2023 values) of which 89% was from thwarted expansion attempts. Small-scale farms had disproportionately greater negative economic effects than larger-scale farms largely because the majority of regulatory costs were fixed costs that increased the magnitude of economies of scale on Atlantic Coast shellfish farms. Regulations were ranked as the greatest challenge on Atlantic Coast shellfish farms, of which shellfish sanitation and legal costs associated with permitting and lease approval were the greatest costs. Conclusions: The regulatory framework for shellfish producers on the Atlantic Coast has increased costs of production, restricted access to markets, and prevented producers from expanding production to meet market demand. Streamlining the permit and leasing application processes to reduce redundancy, develop more efficient reporting systems that reduce duplication, and addressing user conflicts more effectively in coastal areas would likely improve the economic sustainability of Atlantic Coast shellfish farms.