The regulatory cost burden on Atlantic coast shellfish farms

ABSTRACT Objective The objective of this study was to measure the economic effects of regulations on Atlantic coast shellfish farms, specifically to (1) measure the total regulatory cost burden on Atlantic coast shellfish farms, (2) measure the value of lost revenue resulting from regulatory action, and (3) compare economic effects of the regulatory framework across Atlantic coast states and farm sizes. Methods We conducted a survey 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. The survey elicited detailed farm information on the farm-level regulatory compliance burden, production and marketing costs, sales, and revenue lost from regulations. There were 82 total respondents, a 6% response rate, and a coverage rate of 31% that varied from 9% to 77% across states. Results The aggregated regulatory costs on Atlantic coast shellfish farms were US$7.5 million (2023 value), 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 $9.4 million (2023 value), 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 (i.e., food safety) and legal costs associated with permitting and lease approval were the greatest costs. Interpretation of state-specific results and comparisons should consider the low response and coverage rates in some states in this study. Conclusions Farm-level survey data revealed that the regulatory framework for shellfish producers on the Atlantic coast has increased the 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, developing 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.