Anon, 2001. Aquaculture development: financing and institutional support. In R.P. Subasinghe, P. Bueno, M.J. Phillips, C. Hough, S.E. McGladdery & J.R. Arthur, eds. Aquaculture in the Third Millennium. Technical Proceedings of the Conference on Aquaculture in the Third Millennium, Bangkok, Thailand, 20-25 February 2000. pp. 259-263. NACA, Bangkok and FAO, Rome.
ABSTRACT: Aquaculture development during the decade preceding 1997 fostered an increase in annual production of about 200% to over 36 million tons overall or 28% of total global fish production, according to FAO statistics. This represents an average annual production increase exceeding 17% over that period. A rough estimate of investment that was required to achieve this increase is about US$75 billion in Year 2000 dollars. The funds for this development were provided from private sector investments, grants, loans, and governmental subsidies. The investment supported expansion of production facilities, research (including monitoring), disease diagnosis capacity, feed production, hatchery development, processing facilities, market channels, education, training, technical assistance, etc. Although much of the expansion can be attributed to private sector investment, there was also direct participation by local communities; national, private, and multilateral banks; governments; multilateral and bilateral agencies; non-governmental organizations; aquaculture associations and cooperatives; aquaculture research institutes; universities, and technical schools and colleges. Often, more than one and, in many instances, several of the above institutions have collaborated on the implementation of aquaculture development programs, using the relative strengths of each to its best advantage. Based on this experience and the comparative advantages of current activities that involve multiple agency collaboration with the receiving communities/households, it is expected that this trend will continue in the future. If aquaculture production continues to increase at the same rate that it did in the 1990s, the yield from aquaculture will equal that of marine capture fisheries by 2005 or a further increase of close to 250%. This would, however, require more intensive, co-ordinated institutional support and direct community involvement for sustainable results. The rapid increase in supply could also have significant impacts on market prices that would need to be effectively forecasted to assure that the investments are viable as was witnessed for some aquaculture products in some countries in the 1990s. The rapid development would also require close attention to potential environmental and social impacts and their prevention or mitigation.
Financing and investment principles
Increasingly, international assistance is geared to poverty alleviation. This requires development programmes to adhere to the principles of sustainability, social acceptability and environmental soundness over and above the traditional principles of technical feasibility and financial and economic viability.
To achieve rapid and sustainable aquaculture development would require more intensive, co-ordinated institutional support and direct community involvement. Continued rapid development will require close attention to potential environmental and social impacts and their prevention or mitigation. Defining the roles of government and the private sector including civil society, and the identification of responsibilities that enable each one to complement the others efforts is crucial to mustering support or commitment to development projects. Donors would like to see national policies that clearly express the roles and responsibilities of various stakeholders preferably made through consultations among them. More important, it would assure investors and farmers that their projects are supported and their investments protected.
|Priority-setting exercises are important mechanisms but an understanding of the livelihood objectives of the poor and their own strategies for achieving those objectives should precede these. This would mitigate the tendency to look at problems from a viewpoint other than theirs and then proffer or impose solutions to these problems. Further, the constraints to development are not always issues for or answered by research. An FAO/NACA study on development research constraints and priorities has identified weak or lacking institutional support, and lack of enabling policies as the major constraints to the application of technology for aquaculture development. However, in many cases, technological solutions were ineffective due to research-setting activities failing to consider the circumstances of and overlooking the participation of the beneficiaries; such research projects thus had little relevance to the actual needs of the rural poor. One key area that has been overlooked is the need to formulate low risk technical options for poverty reduction. Using research as a vehicle for advocacy for aquaculture development would thus entail raising the R and D capacity of the country and improving the research priority setting mechanism so that the national R&D agenda incorporates strongly the views, and addresses the needs, of the poor. Among Asian countries, high productivity increases have in the past made government planners aware of the importance of aquaculture, which prompted them to include aquaculture in government policies and plans. This has also resulted in increased investments on the management of the sector and on technological development by governments. It also stimulated increased investments on aquaculture projects by both government and the private sector. Trends are now towards R & D and policies that address social and economic as well as environmental objectives. This was in large measure prompted by the environmental problems and social conflicts that aquaculture was seen to generate, as well as the basic shift from aquaculture development to aquaculture for development with emphasis on the social objectives of the country. In the end, it is good governance marked by accountability and transparency that ensure that development projects are implemented better and embraced and supported by the people.|
Allocation and use of resources
Significantly, the investments on aquaculture development are increasingly originating from a mix of sources. The trend is that financing from private sector is on the rise and becoming dominant, even as donor and external funds are decreasing relative to the overall amount of investment. National sources that include development and commercial banks, private investors, farmer cooperatives, and governments themselves are becoming a more significant player in aquaculture development funding. NGOs are also moving from a solely advocacy role to providing support services. Nonetheless, smallholder access to credit remains limited, due in part to the interest on so-called bankable projects, which are invariably commercial-scale or -oriented activities. There is therefore a need to focus or direct more development assistance to address poverty. And this suggests greater scrutiny of aquaculture from the environmental, social and good governance perspectives.
Some issues on the allocation and use of resources would include effectiveness of the financial delivery mechanisms, how can these be strengthened; the future role of NGOs in the delivery of services including credit; and, along with globalization, how nations could benefit from increasing mobility of international venture capital.
An important consideration in the use of resources is stakeholders
involvement in the process. Primary stakeholders should be enlisted as
partners with government in decision-making processes. This requires well-organized
and informed stakeholders that are willing to share responsibility for
planning and management of the aquaculture sector or of a development
Institutional support and co-ordination
There are two ways of looking at the issue of institutional capacity.
One is that the probability of success of an investment project becomes
better with well-developed institutional mechanisms. The other is that
it is usually in areas that have poorly developed policy, institutional
support and regulatory systems that are in greater need of development
support. One key area that has increasingly been overlooked is the provision
of credit and training in its management for the rural poor under fair
market terms that improves profitability, broader access to markets, and,
thereby, sustainability. Often, traditional credit institutions do not
have the experience or capacity to evaluate aquaculture proposals and
need to develop linkages to fisheries/aquaculture departments, agencies,
or institutions to hire technical specialists to be able to assist in
the assessments. Mechanisms to meet collateral needs often required for
micro-credit/loans also need to be explored and researched, particularly
for the rural poor who are often precluded from formal sources of funding
due to collateral requirements. Examples along the lines of the practices
of the Grameen Bank in Bangladesh may be a good starting point for many
countries. Accordingly, for the provision of credit, the range of options
need to be explored among the institutions (banks, government finance
systems, credit unions, cooperatives, NGOs, etc.) need to be considered
as to whether they are the more appropriate agencies.
|The UNDP/FAO project that established the Network of Aquaculture
Centres in Asia-Pacific also strengthened national centres for R and D,
which took part in regional cooperation on research and development. The
NACA project strategy was to achieve increases in yields as well as improvements
in productivity by the application of known and adaptation of better technology.
The consequences of noticeable increases in fish production included a higher
profile of aquaculture in national development plans and therefore more
investments from governments, private sector and external sources in aquaculture
development projects, including further research. With this enhanced research
capacity from a technological and production focus, the Asian regional development
programme for aquaculture gradually shifted towards, and expanded to embrace
the social, economics and environmental dimensions of development, spurred
largely by problems in these areas that impacted on aquaculture or which
aquaculture development and expansion were seen to create. This broader
focus required institutional and legal frameworks to govern aquaculture
development. Thus the trend in development assistance has been to build
or strengthen institutional capacities of technical line agencies for the
most part, though more is needed on the finance side. On the other hand,
research capacity (if not the overall capacity, at least in a number of
critical competencies, as in social and economic research) has been static;
missing, such as the case of improving credit accessibility; or possibly
declining in some regions or countries, so that it would be crucial to revisit
this issue from the points of view of (i) national support; (ii) donor assistance
and (iii) South-South cooperation.
What is required to achieve the needed capacity?
The management of a development project is a complex undertaking requiring the co-ordination of various efforts and even harmonizing often-differing views or interests from all legitimate stakeholders. Clearly, the sum of the capacities of various stakeholders would not make any impact on development if these were not co-ordinated or they did not cooperate. Cooperative involvement occurs when primary stakeholders act as partners with government in the decision-making processes. Much depends on the commitment of government for stakeholder involvement in policy, planning and management processes, the tasks to be undertaken, political and social norms in the country and the capabilities and aspirations of the stakeholders themselves. Increasing stakeholder involvement requires overcoming any constraints associated with these critical issues.
| Ways to increase stakeholder involvement include the creation
of an enabling environment, which legalized and encouraged stakeholder involvement;
development of decision-making processes and mechanisms to include stakeholders
and development of the institutional capacity and aspirations of stakeholders
to participate in the decision-making processes. It is essential that the
local and national stakeholders own the development agenda. (Editors
note: an elaboration of this and related issues is found in the review,
Involving Stakeholders in Policy by Sevaly Sen in this volume).
Although much of the expansion can be attributed to private sector investment, there was also direct participation by local communities; national, private, and multilateral banks; governments; multilateral and bilateral agencies; non-governmental organizations; aquaculture associations and cooperatives; aquaculture research institutes; universities, and technical schools and colleges. Often, more than one and, in many instances, several of the above institutions have collaborated on the implementation of aquaculture development programs using the relative strengths of each to its best advantage. Based on this trend and the comparative advantages of current activities that involve multiple agency collaboration with the receiving communities/households, it is expected that this trend will continue in the future.
The key to obtaining the maximum development impact and desired results from investments (be they grants, loans, or direct investments) is effective co-ordination and cooperation among donors to address all needs at the local level. Governments know that external support should mainly provide the catalyst to development or to a development process, not to serve as substitute to national resources and efforts. On the other hand, donors and other assistance agencies have been working on several approaches aimed at co-ordinating diverse assistance. One of these approaches was exemplified by the NACA project, and now the NACA organization, by which a regional programme provided coherence and direction to various sources of assistance. A recent example, designed to focus various externa as well as local assistance to address poverty, is the Sustainable Aquaculture for Poverty Alleviation (SAPA) strategy of Vietnam. A third, example, at the regional level, is the regional initiative called STREAM (for Support to Regional Aquatic Resources Management), which provides a platform for cooperation among various organizations, agencies and institutions to address livelihoods development among poor rural dwellers dependent on aquatic systems for livelihood. (Editors note: The keynote paper, Regional and Inter-regional Cooperation for Sustainable Aquaculture Development, by Lennox Hinds and G.B. Bacon (in this volume) provides an interesting and detailed rationale and strategies for effective cooperation among donors and recipients).
A key element to improving capacity to manage development activities is information and communications support. Firstly, an information system is integral to the monitoring and evaluation system, secondly, it enables a quick response mechanism to urgent needs by the participants, thirdly it facilitates exchange of experiences and lessons learned, and fourthly, a strong development support communications facilitates the search for or design of solutions to problems, and improves the effectiveness of training and other capacity building efforts. An effective blend of traditional media and the new information technology would be desirable.
As a final word, the attribute of these and, no doubt of successful cases or other promising approaches, is that institutional and financial assistance to aquaculture development drawing their coherence and relevance from viewpoint of local needs.
|Multiple projects increase the costs of development assistance
and place a significant burden on national resources. A program approach
makes it necessary for donors to more effectively cooperate and collaborate
with each other. Ultimately this needs to occur within comprehensive frameworks.
There is thus a need for donors to adopt more cohesive approaches and procedures.
1 This manuscript was compiled by the editors of this volume, using the panel discussion notes prepared during the conference, recommendations of the panel and the technical contents from the relevant section of the Report of the Conference on Aquaculture in the Third Millennium.