2. SECTORAL OVERVIEW AND TRADE POLICIES

2.1 Public sector investment in fisheries

The responsibility for fisheries development, including aquaculture, is primarily vested with state governments, while the federal Ministry of Agriculture coordinates and also undertakes activities to develop fisheries. The Union Government formulates national policies for aquaculture, but their implementation is the responsibility of state governments.

The contribution of fisheries to Indian GDP and NDP at constant prices of 1980-81 was a meagre 0.79% and 0.74% respectively, in 1993-94. But these figures are moving upward, and the contribution of fisheries is increasing. Thus, though the percentage contribution of the agriculture sector as a whole, including livestock and forestry, to the total GDP is decreasing, the contribution of fisheries has not declined but has maintained its status quo. This shows that fisheries and aquaculture, in absolute terms, have an increased stake in the national economy.

The outlay for agriculture and allied sectors went up from Rs 2 940 million (15% of total outlay) during the first five-year-plan (1951-56) to Rs 224 670 million (5.18% of the total outlay) during the VIII five-year-plan (1985-90). Outlay for fisheries increased from Rs 50 million to 6 060 million during the corresponding period. Plan-outlay for fisheries has stagnated at a low level of about 0.3% of the total outlay during the entire period of 1951-97 (Table 3).

Table 3. Budget-outlay (million Rs) for agriculture and fisheries development during successive plan periods in India.

Five-Year Plan	Period	Total outlay	Allotted amount as percent of total outlay
			Agriculture and allied area	Fisheries
I	1951-56	19 600	15	0.26
II	1956-61	46 000	11.50	0.27
III	1961-66	75 000	14.24	0.38
IV	1966-71	159 000	17.16	0.52
V	1969-74	393 220	10.94	0.38
VI	1974-79	975 000	6.78	0.38
VII	1980-85	1 800 000	5.85	0.30
VIII	1985-90	4 341 000	5.18	0.09
IX	1992-97	3 790 000	-	0.16

SOURCE: Government of India (1998).

Agriculture contributes to a great degree to the utilization of land, both in the states surveyed in this report and in the country as a whole. Net sown-area and current fallows accounted for 48.7% of total geographical area in 1958-59 and for 51.3% in 1995-96. Within the broader agricultural sector, the proportion of land under crop cultivation has declined and that for livestock and aquaculture has increased. However, actual data for areas serving capture- and culture-based fisheries and land-based aquaculture farms are not available. Surveys from a few states indicate that there has been a significant increase in areas under aquaculture (App.1). Available statistics show that the area under aquaculture production has increased from 18 500 ha in 1990-91 to 28 550 ha.

States have significant, yet various, shares in total inland fisheries: Orissa (13.56%), Tamil Nadu (12.60%), Andhra Pradesh (11.85%), Karnataka (8.30%), West Bengal (7.92%), Kerala (7.54%), Uttar Pradesh (6.47%), Gujrat (5.95%), Madhya Pradesh (5.93%) and Maharashtra (4.67%). However, the contribution of these states to total inland fish production is almost equal to their percentage share in total water area. The details of estimates of aquaculture production in India by species during 1986 to 1995 are presented in Table 6. Data indicate that out of the total estimated quantity of aquatic production, catla, mrigal and rohu contributed major shares, followed by other species. Cultured shrimps contributed nearby 97 000 t in 1995.

Table 4. Land utilization pattern in India ('000 ha)

Year	Total cultivable land	Forest	Land not available for cultiv.	Permanent pasture and other lands for grazing	Land under misc. tree crops, not included under net sown area	Cultivable waste land	Area under aquaculture	Total
1990-91	166 345.5	67 805	40 476	11 404	3 818	14 995	18.5	304 862
1991-92	196 245	67 866	47 035	11 299	3 761	14 994	NA	334 900
1992-93	166 254	68 277	40 912	11 074	3 755	14 573	NA	304 845
1993-94	166 504	68 392	40 904	10 976	3 696	14 409	NA	304 881
1994-95	166 215	68 603	41 019	11 034	3 732	14 226	NA	304 829
1995-96	165 751.5	68 826	41 385	11 054	3 487	14 102	285.5	304 891

SOURCE: Government of India (1998)

State	Total area ('000 ha)	% of total area in India	Covered area ('000 ha)	% of state area covered	Yield (kg/ha/year)	Potential yield gap (kg/ha/year)	Production ('000 t)	Production potential ('000 t)
Andhra Pradesh	51 700	18.11	4.12	0.80	3 500	1 500	14.42	2 585
Arunachal Pradesh	100	0.04	0.57	56.70	1 200	3 800	0.68	5
Assam	2 300	0.81	3.16	13.75	1 878	3 122	5.94	105
Bihar	9 500	3.33	23.75	25.00	2 174	2 826	51.63	475
Gujarat	710	2.49	41.50	58.45	1 225	3 775	50.84	355
Haryana	1 000	0.35	7.79	77.90	3 272	1 728	25.49	50
Himachal Pradesh	100	0.04	0.31	31.30	2 160	2 840	0.68	5
Jammu & Kashmir	170	0.60	3.98	23.39	2 200	2 800	8.75	85
Karnataka	41 400	14.50	31.60	7.63	1 515	3 485	47.87	1760
Kerala	3 000	1.05	4.58	15.25	2 115	2 885	9.68	15
Madhya Pradesh	11 900	4.17	71.43	60.03	1 730	3 270	123.57	585
Maharashtra	5 000	1.74	17.62	35.25	1270	3 730	22.38	160
Manipur	500	0.18	2.20	44.08	2 400	2 600	5.29	25
Nagaland	5 000	1.74	2.12	4.25	1 800	3 200	3.82	250
Orissa	11 400	3.99	29.83	26.17	2 200	2 800	65.63	320
Punjab	700	0.25	8.20	117.16	4 170	830	34.20	35
Rajasthan	18 000	6.30	3.16	1.76	2 053	2 947	6.50	900
Tamil Nadu	69 100	24.20	8.72	1.26	1 488	3 512	12.97	1120
Tripura	1 200	0.41	2.32	19.33	2 300	2 700	5.33	60
Uttar Pradesh	16 200	5.67	84.97	52.45	2 320	2 680	197.14	810
West Bengal	27 600	9.67	103.72	37.58	3 000	2 000	311.17	1380
India	285 500	100.00	456.67	16.01	2 202	2 798	1 006.00	1127

SOURCE: Government of India (1999)

Species	1986	1990	1995
Catla	155 000	234 000	379 000
Mrigal	106 000	158 000	370 960
Grass carp	-	-	14 435
Common carp	-	-	4 905
Rohu	-	-	382 050
Silver carp	157 000	235 559	382 000
Other carps	-	-	1 980
Anabas testudineus	36 000	39 260	258 397
Clarius spp	36 000	39 260	50 000
Onchorhynchus mykiss	260	451	-
Shrimps	14 000	29 885	96 873
Others	600 000	903 067	1 440 745
Total quantity (t)	686 260	1 012 121	1 608 938
Total value (US$)	663 634	1 600 284	2 138 813

SOURCE: FAO (1997)

Table 7. Freshwater fisheries investment plan for the IX Plan (1997-98 to 2002-03) (Rs in million)

Development Item		1998-99		1999-2000		2000-2001		2001-2002		2002-03		Total
	Unit cost	Physical	TFO	Physical	TFO	Physical	TFO	Physical	TFO	Physical	TFO	Physical	TFO
Existing pond (ha)	0.05	400000	2000	500000	2500	450000	2250	500000	2500	535000	2675	2385000	11930
New ponds (ha)	0.1	372700	3727	586000	5860	560000	5600	600000	6000	615000	6150	2733700	27340
Intensive aquaculture (ha)	0.2	40000	800	40000	800	40000	800	40000	800	50000	1000	210000	4200
FW prawn culture (ha)	0.2	40000	800	40000	800	40000	800	40000	800	70000	1400	230000	4600
Carp hatchery (No)	0.7	300	21	300	21	300	21	300	21	500	35	1700	119
FW prawn hatchery (No)	4.0	200	80	200	80	200	80	200	80	300	120	1100	440
Reservoir fishing units (No)	0.015	300000	450	300000	450	280000	420	400000	600	450000	675	1730000	2595
Pen/cage culture (ha)	0.034	0	0	80000	272	80000	272	1200000	408	140000	476	420000	1428
TOTAL			7880(66)*		1078		10240		11210		12530		52640
Infrastructure development in reservoir fisheries sector (ha)	0.01	1600000	1600	2000000	2000	2000000	2000		3000	3000000	3000	11600000	11600

NOTES: Figure in parenthesis indicates percentage of total budget allocation of fisheries sector. TFO = Total financial outlay.

SOURCE: Pathak, 1997

Table 7 suggests that the IX five-year-plan (1997-2002) envisages a massive increase in the area under ponds and in total financial outlay. Area under aquaculture is expected to grow to 238 500 ha with a financial outlay of Rs 119 300 million. Similarly, a massive sum of Rs 27 340 million is proposed to be invested by 2002 in the construction of new ponds. The investment plan also gives priority to freshwater prawn-farms. The plan envisages development of new prawn hatcheries with an area-increase from 200 ha in 1998-99 to 300 ha in 2002 and a proposed investment of Rs 440 million. The IX five-year-plan proposes to increase the number of carp-hatcheries to 1 700 by the end of 2002 with a proposed investment of Rs 119 million. Of total investment, more than 66% is allocated for freshwater aquaculture. The other two fisheries sectors are marine and brackish water aquaculture.

2.3 Exports of products from aquaculture

Agricultural exports accounted for 27% of total exports from India during 1986-87 but dropped sharply to 20% during the post-reform period in 1996-97. However, the share of seafood exports was 16% of total agricultural exports and is steadily growing in absolute terms. The absolute value of total seafood exports, which includes freshwater prawns and fish, has increased from US$ 549 million in 1990-91 to US$ 1 038 million in 1998-99, which constitutes an increase of 89.07%. However, between 1995-96 and 1998-99, a marginal decline in marine exports occurred from US$ 1 129 million to US$ 1 038 million due to a decline in cultured shrimp production and a ban on Indian shrimp by the European Union. One of the main concerns of India in augmenting exports is the non-tariff barrier imposed by developed importers, such as the United States of America and the European Union. For example, the United States applies domestic legislation outside its borders and forces exporting countries to comply with it. Some of the non-tariff barriers are:

• Environmental and health factors as in the cases of shrimp and turtle;
• Ban on Indian processed shrimp on grounds of poor sanitary conditions;
• Pre-clearance inspections, etc.

Table 8 shows the contribution of cultured shrimp to total shrimp exports from India from 1988-89 to 1998-99. Share of products from aquaculture increased from 33% in 1988-89 to 52% in 1998-99. The spectacular progress of aquaculture in real value terms is worth noting. Within a period of ten years, the value of cultured shrimp increased from 48% to 74%. Although the major part of export of cultured products is shrimps, the contribution of carps, such as rohu, has been increasing over the years. Production in aquaculture and exports continue to be sectors of great importance during the IX five-year-plan (1997-98 to 2001-02).

Table 8. Share of cultured shrimps to the total export of shrimps from India

Year	Total quantity (t)	Total value (Rs million)	Cultured Production	Product weight	% contribution	Value (million Rs)	Percentage
1988-89	56 835	4 703.3	28 000	18 300	33.00	2 293.0	48.78
1989-90	57 819	4 633.1	30 000	19 500	33.72	2 957.4	59.57
1990-91	62 395	6 633.2	35 500	23 075	36.98	3 764.0	56.77
1991-92	76 107	9 761.6	40 000	26 000	34.16	5 447.6	55.81
1992-93	74 393	11 802.6	47 000	30 550	41.06	7 662.5	64.93
1993-94	86 541	17 707.3	62 000	40 300	47.14	12 889.3	72.79
1994-95	101 751	25 102.7	82 000	53 853	52.92	18 662.3	74.35
1995-96	90 000	24 290.0	70 573	45 872	50.96	15 316.9	63.05
1996-97	105 429	27 017.9	70 686	45 945	43.57	16 425.6	60.81
1997-98	100 000	31 213.5	66 868	43 464	43.04	20 860.0	66.83
1998-99	102 484	33 349.1	82 000	53 300	52.00	24 917.8	74.49

SOURCE: Marine Products Export Development Authority, 1999

Table 9. Exports of freshwater fish by markets during 1997-98 and 1998-99

Country	1997-98		1998-99
	Quantity (t)	Value (million Rs)	Quantity (t)	Value (million Rs)
USA	7	2.68
China	1725	77.53
Hong Kong	NEG	0.09
Bangladesh	117	4.18	1646	117.25
Singapore	17	0.88	1	0.04
Japan	17	1.83	18	2.05
Bahrain	23	1.15
Qatar	8	0.59	23	1.12
United Arab Emirates	618	34.38	375	21.32
Kuwait	65	3.85	21	1.13
UK	18	2.55	209	27.64
Saudi Arabia			23	1.17
Total	2615	129.71	2316	171.72

SOURCE: Marine Products Export Development Authority, 1999.

2.4 Trade policies

In the case of agriculture, including fisheries, India had followed highly protective trade policies in the past. Except for a few traditional commercial commodities, trade in agriculture has been subjected to measures such as quantitative restrictions, canalization, licenses, quotas and high tariff rates. In order to make trade policies consistent with the new economic policies, thorough changes were made in foreign trade policies. Some of the changes introduced in 1991 were:

• The rupee was devalued by 23% against the US dollar;
• Export controls were reduced to a minimum and were imposed only on few selected commodities;
• A list of items available for easy investment was expanded;
• Canalization of exports and imports was reduced;
• The rupee became partially convertible in convertibility for current accounts but not for capital accounts.

The new export-import policy for 1992-1997 was announced in 1992, which introduced free trade, except for a small negative list of regulated items. Import of three items was prohibited, restrictions were imposed on 80 items, and eight items were canalized.

The negative list of exports comprised seven prohibited items, 51 items that were subject to licensing, nine items with quantitative ceilings, ten items that could be exported through canalizing agencies, and 46 items that could be exported without a licence.

India is a signatory to the Uruguay Round of the General Agreement on Trade and Tariff (1994) and is one of the original members of the World Trade Organization. The agreement on agriculture provides a framework for long-term reforms in agricultural trade (Rameshchand, 1997). The agreement addresses access to markets, domestic support, export competition, subsidy and sanitary and phytosanitary measures. Currently, quantitative restrictions (QRs) on imports into India apply to about 2 700 items, of which 800 are agricultural commodities. Imports under the category “Fish and crustaceans and other aquatic invertebrates”, which comprises items such as live, chilled, frozen fish, crustaceans in shell, live, fresh, chilled, frozen, dried, salted, cooked etc. and molluscs in shell, live, fresh, chilled, frozen, dried, salted, cooked etc., are quantitatively restricted. As stated in the agreement, tariffs are to be reduced to an average of 24%. Current rates of custom tariffs for fish and crustaceans are 10% and 40% for prepared meat, fish, crustaceans and molluscs.

One of the specific features of the export-import policy for 2000-01 is the removal of QRs. India has removed QRs on 715 items, which belong to commodity groups like fish and fish products, meat and other agricultural products. After the removal of QRs, tariff rates will be the only instrument for restricting imports. The government of India has imposed a 35% tariff on items removed under QRs. Sixty-two different items that belong to the commodity group of fish, crustaceans, molluscs etc. are affected by this regulation. Although it is too early to predict the exact impact the removal of QRs will have on fish and fish products, we expect that higher tariffs will act as barriers to imports of such items. Further, the domestic market price for products from aquaculture is somewhat lower than the international price. Hence, India might benefit from such trade liberalizations.