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Bio-sustainable Feeds (BSF) Ltd., an Australian bio-research firm listed on the Australian
Stock Exchange (ASX), has engaged research on sustainable aqua-culture feeds for two
decades. Its research on a plant based feed (canola, corn, soya-bean, sunflower, etc., meal)
costing $360 million AUD ($120 million collapsed when high-value piscavorian fish (e.g.
fish eating species like salmon, trout, tuna, etc.) failed to thrive. Specifically, CBC (2016)
noted that, while the plant-based fish feed was supposed to resolve the problem fish-based
feed that are converted at a rate of 10.0 kg of low...
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Question Preview:
Bio-sustainable Feeds (BSF) Ltd., an Australian bio-research firm listed on the Australian
Stock Exchange (ASX), has engaged research on sustainable aqua-culture feeds for two
decades. Its research on a plant based feed (canola, corn, soya-bean, sunflower, etc., meal)
costing $360 million AUD ($120 million collapsed when high-value piscavorian fish (e.g.
fish eating species like salmon, trout, tuna, etc.) failed to thrive. Specifically, CBC (2016)
noted that, while the plant-based fish feed was supposed to resolve the problem fish-based
feed that are converted at a rate of 10.0 kg of low-value fish into 1.0 kg of high value fish
(i.e. the normal conversion from a lower trophic level to a higher one), the conversion rate
was actually 30.0 kg of plant based wet feed (before oven drying) to into 1.0 kg of high
value fish—plus, over 1/3rd of the fish died (vs. less than 1/20th for the fish-based feeds),
plus growing times nearly doubled, plus the mature fish were smaller (only 60 percent of
the final weights of those grown on the fish-based feeds).
The above mentioned issues are compounded by accusations from environmentalists that
diverting human-quality food crops into growing luxury fish is just as bad as diverting lowvalue
fish into that production—it benefits the rich but puts the poor at increased risk of
malnutrition or even starvation.
In response to the above issues, BSF Ltd. is researching the use of bacteria to produce fish
feeds from wood chips, sugar cane residue, or recaptured methane gas (e.g. from dumps,
sewage, food processing plants). The research, which has had some success at BSF Ltd.
and other facilities (Rust, et al., 2011; Lothe, 2013; Sarker, et al., 2016), has cost BSF Ltd.
$160 million AUD in research to date and is expected to cost another $200 million AUD
in development costs to bring it to market.
BSF Ltd. received a $500 million AUD grant from the Commonwealth Scientific and
Industrial Research Organisation (CSIRO, Federal Government of Australia) in return for
BSF Ltd. spending at least $100 million AUD a year on alternative aquaculture feeds.
CSIRO paid the funds to BSF Ltd. three years ago (in 2013), and (during those three years)
BSF Ltd. has spent a total of $500 million AUD ($340 million plus $160 million) on
research and has committed to spend $200 million in development cost over the next two
years to develop an alternative aquaculture feed from the research done to date.
The expected net market value of the patent is $700 million AUD if sold in two years or
$200 million AUD a year for 10 years if produced and sold (remember to adjust for two
years) and the appropriate discount rate for this type of project is 8.0% pa.
Discuss the nature and value to society of the research being done by BSF Ltd.
Discuss the problems with the early the research done by BSF Ltd.
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