Search
Rex Caffey
The partnerships featured in this edition of Louisiana Agriculture address an array of environmental and social challenges, yet each is firmly rooted in economics. Financial considerations often shape the questions, methods and metrics that guide coastal research and extension efforts, helping to clarify both goals and outcomes. Drawing on the longstanding commitment to applied research in the Land-Grant University System and Sea Grant programs, this article examines how timely and relevant economic analysis has evolved over 50 years to inform effective decision-making for the management and sustainability of Louisiana’s coastal resources.
Program Evolution
Since 1968, Louisiana Sea Grant has sponsored more than 1,000 competitive and directed research projects, many of which have included detailed economic assessments of aquatic resources — both public and private. Dissemination of this work was augmented in the late 1970s through the establishment of the Marine Extension Program (MEP), which included support for statewide extension specialist positions, including one in marine resource economics. In the first 20 years of this land- and sea-grant partnership, research and extension economists were housed within separate buildings and administrative units — although both were initially focused on the economic development of commercial fisheries and aquaculture.
In the early years, analyses were centered on major commodities, such as shrimp, catfish and crawfish, with most of the work conducted by agricultural economists. The methodological emphasis was on business feasibility, sector impact and trends in production and trade. As time progressed, the research and extension portfolio expanded to include more in-depth assessments of seafood supply and demand, technology adoption, value-added processing and byproduct utilization. These assessments were of particular relevance for Louisiana, which by the late 1980s was leading the continental U.S. in the domestic production of seafood.
The 1990s saw the emergence of “natural resource economics” within the LSU AgCenter and the use of new applications in modeling and valuation. These advancements allowed for more detailed analyses of the welfare effects of fisheries policy, environmental feedback loops in aquaculture production and the valuation of nonmarket ecosystem services. In 1999, extension economists were integrated with their research and teaching counterparts in the LSU AgCenter Department of Agricultural Economics and Agribusiness (DAEA). This was the first of many such academic consolidations that would occur across the LSU AgCenter. The aim of these mergers was to foster faculty collaboration, impact and accountability in support of the land grant mission. In the case of economists, it worked.
Challenges to Insights
Soon after the merger, research and extension faculty formed a small working group in response to growing requests for applied economic assessments across a widening range of environmental challenges. Fisheries landings, which had peaked in Louisiana nearly a decade earlier, were declining in response to environmental limits, regulatory constraints, and rising operational costs. Real prices for domestic seafood were also declining due to import competition and a “blue revolution” of aquaculture productivity occurring largely outside of the U.S. Meanwhile, coastal stakeholder conflict was increasing with debates over public resource management, allocation and access. Heightening these challenges was a growing awareness of Louisiana’s coastal wetland loss crisis and uncertainty over the economic implications of that loss and the feasibility of restoration options.
Capacity and Response
That DAEA working group would eventually form the LSU Center for Natural Resource Economics and Policy (CNREP). Formally recognized by the Boards of Supervisors and Regents in 2003, the center has served as a network of socioeconomic professionals working to address natural resource and environmental challenges in Louisiana and the broader Gulf region. From 2000 to 2020, CNREP grew to a regional cooperative of more than 30 active members and affiliates at 15 universities and resource management agencies throughout the U.S. During that period, CNREP cooperators in the DAEA and Louisiana Sea Grant coordinated six national conferences and partnered with 50 public and private institutions in support of more than 100 individual research projects (www.cnrep.lsu.edu). Many of these projects were funded completely or in part by state and federal Sea Grant programs.
Some examples of research projects led by CNREP cooperators include:
Moving Forward
The scope and tools of economic analysis in coastal and marine resource management continue to evolve, addressing pressing research questions in a rapidly changing environment. Traditional approaches, such as survey-based assessments of seafood supply chains post-COVID-19, remain vital for understanding market dynamics. Meanwhile, innovative methods, including simulation-based models for coastal restoration and ecosystem services, are gaining prominence to examine complex socio-environmental challenges.
Three highlighted initiatives from this edition of Louisiana Agriculture — alternative oyster culture, marine debris removal and fisheries bycatch reduction — serve to illustrate this dual approach. Going forward, objective economic analysis will continue serving as an anchor to coastal policy and development by validating assumptions, clarifying tradeoffs and fostering sustainable solutions that balance ecological and economic priorities.
Oyster Economics
Natural resource economist Dan Petrolia was funded by Louisiana Sea Grant (2022) and National Sea Grant (2025) to conduct economic assessments of the rapidly expanding alternative oyster culture (AOC) sector.
New aquaculture sectors like AOC often lack detailed economic analyses. Petrolia and his team have used enterprise budgeting and simulation methods to examine drivers of firm-level business feasibility and the market implications of AOC production, government subsidies, reef-based oyster harvests, and foreign imports.
Debris Economics
Rural development economist Matthew Fannin was funded by Mississippi Sea Grant (2010), Louisiana Sea Grant (2013) and National Sea Grant (2024) to estimate the economic impact of marine debris on coastal communities. (see page 16).
Whether deposited by a storm or through human activity, marine debris comes at a substantial cost. Fannin and his team have helped local governments to improve their financial resiliency by planning for the deposition and cleanup of marine debris in the wake of acute (major storms) and chronic events.
Bycatch Economics
Environmental economist Jerrod Penn was funded by Louisiana Sea Grant (2024) to lead a Gulf-wide survey of the role of government payments in reducing fisheries bycatch in the federally permitted shrimp fleet.
Reduction of incidental bycatch is a major goal of fisheries managers, but regulatory approaches alone are often insufficient. Penn and his team have used novel applications of contingent valuation to quantify the payments needed to incentivize increased use of additional bycatch reduction measures sufficiently.
Rex Caffey is a professor of natural resource economics at LSU and has a joint appointment with the LSU AgCenter and the Louisiana Sea Grant College Program. This article appears in the fall 2025 issue of Louisiana Agriculture.
This article appears in the fall 2025 issue of Louisiana Agriculture.
Shrimping is a $60 to $100 million industry in Louisiana, according to LSU AgCenter statistics. Photo provided by Louisiana Sea Grant
Marine debris is a major issue that Louisiana Sea Grant agents have sought to tackle. Photo provided by Louisiana Sea Grant
Alternative oyster culture operations have greatly expanded the oyster industry in Louisiana. Louisiana Sea Grant operates a research facility and farm on Grand Isle to research this oyster-rearing method. Photo provided by Louisiana Sea Grant
