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A look at the business of fish farming: the possible environmental risks and the business benefits of raising popular breeds of sea life. Spencer Michels reports.

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SPENCER MICHELS: Abalone, a delicious and exotic shellfish that clings to rocks underwater, used to be abundant in the waters of Northern California and on restaurant menus. But now partly because of over-fishing, the mollusks are so scarce that only sports fishermen can legally dive for them. The commercially fishery has been closed.

Enter U.S. abalone. Located on the Pacific Ocean near Santa Cruz, it is engaged in what is known as aqua culture, the farming of fish. To take advantage of the shortage and demand for abalone, this firm and others have set up abalone farms and are growing the creatures in tanks. Tom Ebert is president of U.S. Abalone, which sells up to a thousand pounds a week.

TOM EBERT, U.S. Abalone: The demand we're up to the point that the price dictated and it's economically feasible for us to get into such a business like this, and with the technology getting better and better every year, it's an even more attractive business opportunity for us.

SPENCER MICHELS: Farmed abalone are smaller than the wild variety. They sell for about $20 a pound, largely to Asian customers in the United States and Asia, and to a few local restaurants. Abalone farming makes up a tiny fraction of the booming aquaculture industry, which harvests 21 million metric tons of fish annually for $36 billion. Rebecca Goldburg, a senior scientist with the Environmental Defense Fund, specializes in aquaculture.

REBECCA GOLDBURG, Environmental Defense Fund: Consumers are not aware of how much of the seafood that's coming to their dinner table now is farmed versus wild caught. Something like one in fish consumed worldwide by humans is now farmed. In the United States virtually all the catfish, about half the shrimp, and a third of the salmon we eat is now from fish farms.

SPENCER MICHELS: A major reason is that the natural wild fish population is declining in the face of over-fishing and big demand from a growing world population. But Goldburg and a host of other scientists and activists say that in some cases aquaculture creates serious environmental problems. For one, it often uses much food.

REBECCA GOLDBURG: Many of the fish we farm, such as shrimp and salmon, are fed feeds that are high in fish meal and fish oil that's made from wild fish stocks. And, as a result, it actually takes more pounds of wild fish to grow a pound of shrimp or a pound of salmon, and you get out in the end, so we have a net loss of fish protein in some forms of fish farming.

SPENCER MICHELS: However, at the University of California at Davis researchers in aquaculture say that some fish, increasingly popular sturgeon, for example, don't waste protein. Serge Doroshov directs the aquaculture and fisheries program.

SERGE DOROSHOV, University of California at Davis: Actually, fish is a very efficient converter of food. For example, the species I work with, sturgeon, requires less than 1 to 1 ratio of the dry food that produce one weight of-one body of weight. And so they utilize protein very well.

SPENCER MICHELS: But while Doroshov defends most U.S. aquaculture practice, he acknowledges that elsewhere there are serious problems. One of the biggest is in Asia, where 85 percent of shrimp farming takes place. Here, environmentalists charge, tropical mangrove forests have been destroyed to make way for vast shrimp ponds. In addition, the farms destroy fish breeding and nursery habitat, cause water and ground pollution, and spread disease.

They produce a mono-culture, rather than a diverse fishery. Often the ponds are abandoned as unusable after two to five years. Scientists recently met at Stanford to hash out these problems and to try to let the public know that what it buys at the fish market has worldwide repercussions. Jane Lubchenco is a biologist for Oregon State University.

JANE LUBCHENCO, Oregon State University: There is currently no incentive for raising shrimp in a way that's sustainable. There are real international links in this issue. Farming is being done in Indonesia, in Thailand, in the Philippines, in Guatemala, in Mexico, those shrimp are transported to the United States.

SPENCER MICHELS: The farming of salmon-much of it in Canada-draws environmentalists' wrath as well. With some species of salmon stock declining and demand high, salmon aquaculture is trying to supplement salmon fishing. But in British Columbia the David Suzuki Foundation, an environmentally-oriented organization, reported that one out of five salmon farms has serious problems with pollution from drugs fed to the fish and from waste material.

Ocean areas near fish farms become barren of life. Fish that escape from the ponds can spread disease to the wild population and even to other species. In the Northeast thousands of salmon had to be destroyed due to disease. But aquaculturists argue that fish farming doesn't have to be dangerous or destructive. At a fish farm south of Sacramento, California, potential environmental problems appear to be under control. Catfish are the main product here.

They're raised from eggs to maturity and shipped live to markets and transplanted into recreational lakes. Unlike some fish farms abroad, those in this country are regulated, inspected by the Food & Drug Administration. The fishery uses a lot of fresh water, catfish, sturgeon, and hybrid carp it raises. That water accumulates waste from the fish and from the feed, waste that could become an environmental problem. Ken Beer, a partner in this business, says he has it under control.

KEN BEER, Aquaculture Farmer: Any discharge water that we have is used for irrigating regular crops. Those type of crops, those sorts of nutrients are considered as fertilizer. Most of those things are assimilated by the environment very quickly, and so it's not a particular problem certainly in our case.

SPENCER MICHELS: Neither has it been a problem for the abalone farm on the coast, where Tom Ebert oversees the water system.

TOM EBERT: The water's going through our tanks. We have abalones and we have seaweed, you know, nothing different than is already out there in the wild, and actually to allow the water to actually be put back in the ocean because of our filtration system here, actually at a lot of times is actually cleaner than the water we pump in from the ocean.

SPENCER MICHELS: Despite the general good health of the U.S. aquaculture industry, fish farming antagonizes some fishermen, especially those like Pietro Parravano, who fish for wild salmon. Parravano, president of the Pacific Coast Federation of Fishermen's Associations, says the quality of the fish he catches is superior to farmed salmon.

PIETRO PARRAVANO, Pacific Coast Fishermen's Association: When you buy a wild salmon, that salmon has been living in this Pacific Ocean, in this national marine sanctuaries, for four to five years, eating all types of bait. When you have a farm salmon, it's been eating pellets, and they're in pens, they're force-fed. It's like living in a cage.

KEN BEER: I think a lot of the complaints by commercial fishermen are basically on an economic concern over the competition.

SPENCER MICHELS: Complaints about quality and taste make little sense to Beer, who has been farming various species of fish in California's Central Valley for 20 years.

KEN BEER: Aquaculture has the potential of actually causing an off flavor, or it has a potential of improving the flavor, depending on a system and how he handles it. But I think the best aquacultured fish are certainly as good as any from the wild.

SPENCER MICHELS: With few problems in his catfish and sturgeon operation, Beer is expanding as the demand for farmed fish grows. In fact, aquaculture is the fastest growing segment of U.S. agriculture, increasing 5 to 10 percent a year and even more worldwide. That alarms environmentalists like Rebecca Goldburg.

REBECCA GOLDBURG: If we are really going to in the future supplement a lot of our fisheries' production with aquaculture, we've got to do a much better, more thoughtful, more careful job of aquaculture production, or we're just going to continue to hurt our oceans.

SPENCER MICHELS: She and other scientists are calling for increased scrutiny of the industry in America and abroad, while aquaculturists are banking on increased demand for the expansion of their industry.

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