Factory-farmed fish, pigs and poultry consume 28 mln t of fish a year, or roughly six times the amount of seafood eaten by Americans, according to the study.
They are used as a cheap feed for aquaculture, poultry, pigs and animals bred for the fur industry.
The study's findings warn this use is unsustainable, given current rates of global over fishing and increasing threats to global food security.
University of Columbia senior researcher Jacqueline Alder said: "Society should demand that we stop wasting these fish on farmed fish, pigs, and poultry. Although feeds derived from soy and other land-based crops are available and are used, fishmeal and fish oil have skyrocketed in popularity because forage fish are easy to catch in large numbers and, hence, relatively inexpensive."
According to the study, small forage fish account for 37%, or 31.5 mln t, of all fish taken from the world's oceans each year. Of this amount, 90% is processed into fishmeal and fish oil.
Current figures show 46% of fishmeal and fish oil is used as feed for aquaculture, 24% for pig feed and 22% for poultry.
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