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In the previous section it was noted that the process of examining the sector from an economic perspective draws attention to many of the issues which need to be considered. In addition, the sponsors and the government may have their own views about issues of special concern.

This section introduces a number of the main issues that are likely to arise in studies of fisheries sectors. It is not exclusive and there may be others which will be apparent to a sector study team when it examines a sector.

Many of the points noted will be relevant to various aspects of the study. It is not possible, therefore, to state in advance where issues should be placed in the final report, although some suggestion as to where they might be relevant are noted in the suggested chapter headings of a sector study contained in section 10 of this Guide.

6.1 Fish Resources as Strategic Assets

A commercial fish resource is an asset because it is capable of generating a flow of benefits; a recreational fish resource also can often be treated as an asset. One of the chief ways in which the value of fisheries to a country can be enhanced is through effective control and management of those resources. Fisheries development strategy, therefore, should be directed, inter alia, towards this end.

A sector study team should examine what is, or should be, the focus of fisheries policy in the country. The first requirement is a description of the resources and an examination of those species which, in terms of their economic importance to the country, represent priorities for research and management.

Very often, a fundamental potential source of improvement in resource use is the better management of that resource. This general conclusion can be reached without detailed information about a fishery and does not require a complex research programme to verify. The observation of declining total yields, low catch rates and marginal fishing vessels just covering the opportunity costs of operating in the fishery constitute enough information in practice to confirm that there are weaknesses in the management of the fishery.

However, whilst this observation has a general application, governments are able to act unilaterally and effectively only when the fish stocks lie wholly or mostly within their area of national responsibility. When stocks are shared with other States, or are straddling, effective national action can only be taken in conjunction with other States which have an economic interest in the fish stocks concerned.

A sector study should include an assessment of the extent to which control and management are currently being achieved and proposals for future action, for example, the preparation of a fisheries management plan concurrently with the preparation of a sector development plan.

A final word of warning may be needed. The use of the term “the maximum sustainable yield” of a fisheries resource, is highly misleading if it is intended to denote the optimal level of exploitation and to be a target level of annual catch. Even if the knowledge of resources permits an estimation of MSY, this point will not coincide with the level of yield which would ensure the biological sustainability of the resource; in most cases, it is this latter point which will be consistent with the maximization of economic efficiency.

6.2 Sustainable Development

In line with this last point, the objective of sustainable development is a guiding principle of fisheries management.

In most economic models of fisheries the maintenance of a stable and sustainable flow of benefits from the fish resources is a condition of optimality built into the logic of the analysis. Moreover, if, over time, the value of the fishery as a source of economic benefits can be expected to increase, this factor will tend to shift optimal catching strategies towards the future, when the benefit/cost ratio is greater, rather than to the present. To the extent that there are theoretical exceptions to this (Clark 1990), perhaps these can be regarded more as exercises in analysis rather than policy recommendations.

When considering sustainability, it may also be relevant to distinguish between different types of fishing fleets. For example, the evidence collected for the study may suggest that some of the underlying conditions of artisanal fisheries are conducive to sustainable development. The conditions that might be relevant include a strong orientation among the fisherfolk to collective action, taking a long-term view of needs and an aversion to risk. In contrast, industrial fleet operations may be more competitive and risk prone, and also require a rapid return on investment. In these circumstances, it could be argued that the institutional and social context of artisanal fisheries supply a foundation for sustainability not present in more competitive industrial fishing. Equally, it must be said, the evidence could point in the other direction. A small number of businesses engaged in well organised industrial fisheries may also carry the potential for sustainable fishing operations, implying a corresponding stability of income and employment5.

5 This paragraph only touches the surface of some insights from public economics, including game theory. Under certain conditions repeated plays of “prisoner's dilemma”-type games can produce cooperative outcomes. A very approachable introduction to many of the issues, including the application of game theory to the management of the commons, is in Ostrom (1990).

Where there is increasing population pressure on an artisanal sub-sector, its capacity to develop approaches to fisheries management is weakened (Pauly, 1990). In this situation, it is often relevant to examine the alternative employement opportunities for artisanal fisherfolk which might go some way to ensuring that the industry does not have to absorb more and more surplus labour.

More often than not, the situation where artisanal fisheries have to absorb an increasing number of people is when these fisheries become the employment of last resort. In this case, unemployment is a structural problem in the economy. There may be little a sector study team can do directly to remedy this problem. It can, however, begin to generate the information which will enable the fisheries administration to show the substantial economic benefits which would arise from focusing the creation of new employment opportunities on relieving the pressure of surplus labour on the fisheries sector.

Most management measures are designed to protect fish stocks rather than to directly limit the access of fishermen to the stocks. Experience shows that such measures have often been successful in the short term in achieving the conservation of resources and higher stock sizes. Their short-term success, however, has meant that their long-term impact has been usually to increase the attraction of the stocks to fishermen, thereby increasing the number of resource users and the intensity of use of the resources and, ultimately, to reduce stock size and resilience.

Other options which may be available are measures to limit access to stocks and measures which restrict access to certain areas by particular users.

However, in general, policy measures which have as their aim the conservation of fish stocks are not the most effective in achieving sustainability. A sector study team, therefore, should be sensitive to the potential for management based on limited access to fish stocks.

A sector study should be able to point the appropriate direction to take on this issue. It should also generate much of the information required in a management strategy to assist the government in determining the feasibility of some of policy instruments which might be employed, including an assessment of their respective advantages and disadvantages.

6.3 Externalities

Externalities occur when the economic activities of one agent affect another in ways other than through the price mechanism. A comprehensive survey of the economic theory of externalities is in Cornes and Sandler (1986).

The concept of “externality” is fundamental to fisheries. A way of analysing the economics of a fishery is in terms of fishing vessels imposing external costs upon each other. As each vessel enters a fishery it has an impact on other vessels, partly because it catches fish which could have been caught by others, partly because it may impede the operations of others, and partly because of its effect on the capacity of the resource to reproduce.

The fisheries sector may also impose external costs on other sectors. For example, a fishing harbour may create pollution; the cutting of mangrove for fish ponds may reduce the filter properties of a belt of mangrove, so increasing pollution load in the sea, remove a barrier to storm surges, and destroy a fish habitat.

Other sectors may impose external costs on the fisheries sector. There are many such externalities, which may be categorized into two groups. One is pollution and resource degradation which damages or destroys fish habitat; the other is pollution which has toxic effects on fish.

A sector study team should establish the extent to which the fisheries authorities are aware of the externalities, both generated by the sector and imposed on the fisheries sector from elsewhere, and the extent to which it is and should be taking a proactive role in reducing or mitigating them.

It should be noted that externalities - or unpriced effects - are not exclusive to the environment and natural resources and can be beneficial. For example, the existence of ports which fishing vessels can use, transport infrastructure which widens the market for fish and fish products, and the proximity of a large urban population which offers a nearby market for fish, are examples of positive externalities and provide a synergy between different sectors.

Box 3 examines further this issue.

6.4 Linkages6

A sector study identifies linkages between the various components of the sector and between the fisheries and other sectors.

6 Conceptualising the fisheries sector using systems methodology is a possible approach to the identification of linkages (Checkland, 1981, Checkland and Scholes, 1990 and Flood and Jackson, 1991).

Box 3: Examples of externalities and integrated coastal area management

There is a primafacie case for arguing that resources will flow towards their best use if they are competitively priced; thus in the case of linkages the outcome of a sector study may be simply to ensure that the price mechanism works effectively in the allocation of resources. However, markets rarely function perfectly, and the externality is the extreme case of market failure. For this reason, in most coastal areas, some degree of careful management by the public sector plays an essential part. Two examples follow.

Example 1: Port congestion

A common conflict of use concerns harbour facilities - a resource which is frequently in scarce supply. Commercial harbour users will frequently see the fishing industry as a nuisance - the relatively small fishing vessels impose adverse congestion externalities on the larger commercial vessels. However, it is also quite likely to be the case that the fishing industry generates significant income and employment, both directly and indirectly because of its evident widespread linkages to industries onshore. The onshore benefits from the fishing industry are harder to identify but no less real than those of commercial port operations.

The sector study should appraise the wider contribution of the fishing industry and suggests options for development in this case, port development-which will fully reflect the fisheries sector's contribution to the economy.

Example 2: Pollution

Pollution management provides a second example to show that in the presence of externalities, free market solutions do not always produce a satisfactory outcome. Consider the case of a river which carries pollution discharged from factories along the river bank. The river eventually reaches the sea where there is an established fishery. If the pollution causes lower catch rates than would otherwise be the case, it is in the interests of the fishermen exploiting the fishery to pay for its control. But they would most likely refuse to pay, not only because they would see themselves as the victims and the factories as the perpetrators, but also because they would fear that some fishermen, perhaps from some other area, would take advantage of their efforts. Would the factories pay? For them discharging pollution into the river costs nothing. Even if public spiritedness induced one or two to incur the perhaps heavy cost of controlling or stopping the production of harmful effluent, they would complain that others were free riding on the back of their efforts. In these and similar situations, intervention by the authorities is generally required, for which a range of policy instruments may be considered.

Example 3: Other examples, in brief

Numerous other conflicts between resource users can arise. For example, the catching sector may be in competition for the seabed with gravel dredging operations. The coastal aquaculture industry may be in conflict with conservationists and with small-scale fishermen. Rural agriculture and tourism may compete for resources and space with the fisheries sector.

In economic analysis the concept of “linkage” has a precise meaning. Linkages arise when one economic activity influences others through the price system. For example, there is a linkage between fishermen and suppliers of inputs. There are many other important linkages too, such as in the fish distribution chain (wholesalers, processors, consumers); often, in inland aquaculture, between aquacultureand agriculture; and, sometimes, between the fish processing industry and the food processing industry.

Linkages become especially important in economic assessment when there is underemployment or unemployment. This is because a change at the beginning of the chain of linkages will cause multiple changes further down the chain.

If there are significant linkages in the fisheries sector, the impact, in terms of the consequences on employment, of a fall in fish landings can be multiplied several fold through ancillary activities to the catching sector and in the processing and distribution system. When there is also significant unemployment or underemployment in the economy generally, other sectors will not be able, at least in the short to medium term, to absorb the redundant labour.

Where there are such significant linkages - and a major fish processing and distribution subsector is not required to create them-the fallacy is apparent of a strategy which is aimed at keeping vessels at sea to maximise employment in a fully or overexploited fishery. Whilst such a policy may maximise employment on vessels in the short term, it will have the effect in the longer term of reduced landings and, therefore, reduced employment on shore. In addition, the increased risk to the long-term sustainability of the resource will be a further threat to employment.

In many countries there is also a linkage between agriculture and small-scale fisheries through the labour market. Labour shed from agriculture (and also other industries) as a result of, perhaps, changes in the agricultural outputs produced, often takes up fishing as an alternative source of income. Many artisanal fishermen are also part-time farmers. These relationships need to be identified so that the full implications of policy proposals are understood.

A sector study team should view such changes in terms of their contribution to economic welfare.

6.5 Technical Aspects

Underlying the analysis of values are all the technical relationships of the industry - the relationships between physical inputs and output. This relationship is known as the production function. A sector study should examine the scope for combining inputs in a better way than they are combined at present, to save on resources or to increase output; in other words, to make production more efficient.

Some examples are shown in Box 4.

6.6 Conflicts Between Interest Groups

Conflicts arise between groups of fishermen because of competition for fish resources. A sector study should report these and suggest action to alleviate problems. Very often, in exploited fisheries, fish which is not caught by one fisherman will be caught by another. Access, therefore, can easily become a source of dispute. Conflicts are particularly acute in fisheries compared to other industries because fishing grounds are often open, to a greater or lesser degree, to competitors. In this respect, the industry is unlike most others.

Economic benefit results from a reduction in conflict. The costs incurred in the “rush for fish” are reduced as fishing skippers take a more calculated approach to their best opportunities. These may arise through a more measured exploitation of fish marketing opportunities or greater economy

Box 4: Examples of the investigation of production functions in fisheries sector studies

Example 1: Relationship between fishing effort and fish yield

A sector study brings together what is known about the biology of the resources exploited by the country's industry. It should aim to specify a relationship between fishing effort and catches so that estimates can be made of outcomes under different assumptions. In particular, it should aim to reach a judgement about whether the relationship between fishing effort and yield can be made more efficient, that is a reduction in fishing effort to catch the same or larger quantity and value of fish.

Example 2: The ability of the fishing fleet to optimise its contribution to economic welfare

A sector study reviews the state of the fishing fleet. It does this to reach a judgement about whether it is of an appropriate size and composition for the available resources, and whether the technology used on board is appropriate for the country and the resources available to it. It examines the age and condition of vessels to assess the scope for replacement.

Example 3: The capacity of the aquaculture subsector to optimise its contribution to economic welfare

Where appropriate, a sector study reviews the current state of aquaculture. It examines the country's fish farms to see if inputs are being used efficiently to produce fish. It comments on the technical capability of the farmers and might make recommendations for the upgrading of people and systems. A study might propose ways in which production from aquaculture might be expanded. In other words, a sector study examines the availability of inputs, e.g., land, water, labour, and equipment, etc., to compare what is being achieved with what could be achieved. in fishing practices. Furthermore, the social problems which arise when people's lives are disrupted by fishing disagreements are reduced.

When a study team seeks to make a qualitative assessment of the potential gain from the reduction in conflict on a fishing ground, it is important to be clear about the distinction between productivity and efficiency. Productivity is a measure of output per unit of input (usually labour or capital). More efficient fishing systems are those which generate larger net benefits by increasing the value of output or reducing the unit cost.

This point is noted in this context because it may be mistaken to resolve conflicts on the fishing grounds on the assumption that because larger vessels are more productive, as measured by output per man, or by some unit of production, they necessarily provide greater economic benefits than smaller vessels. On the contrary, it is quite possible that smaller vessels are more efficient because the cost per unit of fish landed is lower or the value of their catch is higher.

Establishing the relative efficiency of different groups of vessels in this type of situation may be one of the cases where the sector study team should investigate primary data.

6.7 Fisheries Authorities

The sector study should consider the effectiveness and efficiency of the fisheries authorities. The term “fisheries authorities” refers to the organizations responsible for the regulation and development of the fisheries sector at national and sub-national levels, and for the management of fish resources. In many situations but not all, these responsibilities will rest with fisheries departments. The paragraphs below are written within this context. However, a sector study team should be aware that fisheries administration and fisheries management may be implemented through more than one organization.

Effectiveness refers to the capacity of the fisheries department to meet the objectives of the sector. An effective department must be able to carry many functions which include the following:

Within this general capacity, the fisheries department would be able to defend the interest of the fishing industry in negotiations with other ministries or departments when dealing with cross-sectoral issues and in the negotiation of budgetary allocations.

Efficiency refers to the capacity of the department to operate at a reasonable level of cost. It is not possible to supply an objective measure of whether a department (or any bureaucracy) is worthwhile. However, the economic rule which states that a service should be expanded as long as marginal benefit resulting from it exceeds its marginal costs is a helpful guide. For example, the potential incremental gains from the effective policing of EEZs which accrue to producers and consumers, are often large. It may be worth incurring, therefore, significant costs to achieve effective policing.

Similarly, the potential net incremental gains from an effective extension service to aquaculture can be large. They may accrue to producers in the form of extra profits, but may also benefit consumers if production increases and prices fall.

The expectedincremental gains provide a rough guide to an upper band as to how much should be spent on a particular service provided by the department. There are, however, many instances of services provided by government which are more costly than any conceivable benefit resulting from them.

A sector study, therefore, should report on the current state of the department, reaching a judgement about skills and expertise, number of staff and its capability to work for the development of the industry. A sector study should also recommend any changes which the sector study team judges to be required. It might be proposed, for example, to end some activities currently carried out by the public sector, or to introduce some new specialist skills, or to introduce an internal training programme.

6.8 Other Institutions

Other institutions will almost certainlybe involved in the fisheries sector. Some of these will be part of the public sector whilst others will be private sector institutions.

In the public sector, the trade department might be responsible for marine safety, the armed forces for fisheries protection, the foreign affairs department for international negotiations, various regional authorities for other aspects of administration. There may be an institution charged with the coordination of projects and activities in the coastal area. Other organizations may have official responsibilities to the industry on issues such as food safety, customs regulations, ports and harbours, training and research. Different organizations will have responsibility for the collection of different statistics of value to the fisheries department.

The organizations described above may have a direct influence on the sector. Others may have an indirect, but important, role. Examples are organizations responsible for river and lake basin management, and for water management.

A sector study team should also take into account private sector organizations, such as cooperatives, trade associations and non-governmental organizations (NGOs) at the national, sub-national and local level.

A sector study should identify all relevant institutions at a national, sub-national and local level and describe their role, the extent to which their functions overlap and where there are any gaps. It should also reach a view on their relevance to the successful management and development of the sector at present and under any of the proposed options for development.

6.9 Legislative Framework

For a number of reasons a necessary condition for a successful fishing industry is a respected and durable legislative framework (North, 1990). In particular, fisheries management, and hence the economic gains associated with it, cannot succeed without a system of regulation which is respected by the fishing community.

The framework of laws and regulations can influence the industry in other ways. For example, foreign exchange control may l imit the access of the industry to important inputs; hygiene regulations may penalise small-scale, low capital producers; or minimum wage legislation may limit the scope for employment in fish processing.

A sector study should examine the legislative framework within which the industry operates and assess the extent to which it adds or detracts from its successful economic performance. It should be noted, for example, that conventional fisheries regulations and legislation-which are aimed towards fish conservation-may have the long-term effect of reducing economic welfare; other solutions to over-exploitation of stocks may have to be sought which incorporate ways of limiting access to them (see 6.2 above).

6.10 Monitoring and Enforcement of Management Regulations

All fisheries require management. Perhaps the key issue in the success or failure of any management plan concerns the monitoring and enforcement of regulations. So far as possible, regulations and legislation should be designed in collaboration with the sector and efforts made to convince the industry of their value. In this way, voluntary compliance with regulations will be increased. Fishermen's reactions to regulations will also be influenced by the perception of the fairness, or equity, of the system held in place by the regulations. A system which is widely recognized as being fair, will be more likely to be one where peer pressure assists in creating a general observance of regulations. In its review of legislation and regulations, a sector study team may find it necessary to examine this aspect.

However, whatever the degree of participation by the industry in the framing of legislation and regulations, governments require a strong enforcement capability. This is so whether the regulations and legislation are designed to limit access to the resource or, more conventionally, to protect the stocks. The sector study will examine the enforcement capability, its effectiveness and the institutional framework within which it operates.

6.11 Research

It is important that fisheries management regulations are reinforced by an appropriate research programme which will indicate the benefits to be derived from different measures.

A sector study should evaluate the performance of official research for the sector. The fundamental question concerning officially sponsored research is whether it contributes to development objectives. Quite frequently, the sector as a whole rather than individual businesses is the beneficiary of such research which would not normally attract private funding. It is important, however, that a research establishment should have clear research objectives with proper procedures for the evaluation of its work.

A sector study should also examine the scope and value to the industry of non-official research, for example, in universities.

A sector study team should examine how research objectives are set. Whilst a certain amount of individually determined research may be encouraged, the main body of research work should be clearly related to critical issues confronting the fisheries authorities. The team should look, therefore, for a transparent institutional link between the fisheries authorities and the research functions.

In examining the response of the fisheries research function to critical issues, a study team should take into account the cost and length of time required to acquire sound quantitative results. In these circumstances, a team should look to see what approach has been adopted by the research establishment, and with what success.

Researchers may, either by conscious decision or by default, adopt a long-term approach to research. However, the time may not be available for a long-term approach but it may be possible to achieve robust qualitative results in a shorter term. A sector study team should consider if some long-term programmes might be replaced by shorter-term approach. Such an approach might possibly be adopted in conjunction with the Precautionary Principle, under which actions which are suspected to have severe environmental implications are banned unless the originators can prove they are benign.

Box 5 lists some of the critical issues which may form the subject of research.

Box 5: Some possible critical areas for fisheries research

Assessment of whether there are any endangered or threatened species.

Determinants of key parameters, e.g., growth, reproduction, productivity, biomass.

Assessment of the effects of fishing and coastal aquaculture on the ecosystem and on fisheries sustainability.

Identification and assessment of the impact on fisheries and aquaculture of pollution and habitat degradation (requiring information on the status of fish habitats, such as mangrove, seagrass beds, and coral reefs, extent to which they have been degraded, identification of activities responsible for their degradation and future threats and, if possible, monetary valuation of the damage).

Another avenue to examine is to what extent, and through what institutional mechanisms, the research organization is aware of and responsive to the perceived needs of the industry resulting from factors originating outside the sector.

A sector study should examine the dissemination of officially funded research. Staff of research institutes should be expected to publish in scientific journals but it is important also to produce information leaflets for the sector and the general public.

If countries are going to make progress in fisheries it is essential that officials, researchers and others have access to good information. The fisheries community needs to be able to participate in worldwide research so that the results can be applied in all countries. For example, if researchers in one country develop a new approach to the analysis of the dynamics of the deep water snappers, then that information could be important in the management of resources in a number of others. A sector study, therefore, should look at channels of information to ensure that national research teams are not “reinventing the wheel” and are benefiting from all relevant work.

A sector study team should take care to avoid focusing too narrowly on what may be perceived to be fisheries issues. Research of value to the fisheries sector will be concerned also with cross-sectoral issues, as well as the traditional sectoral research concerns. Such research, e.g., in gaining a greater understanding of ecological functions and aspects of resource dynamics, may be closely related to sectoral research; other research may be outside the usual competence of fisheries research institutes, e.g., in socio-economics and institutional economics.

Fisheries authorities do not have to ensure that all research is carried out by their scientists. A sector study, however, should reach a judgement on (i) the level of communication between the industry, on the one hand, and the policy makers and scientists, on the other; (ii) communication between policy makers and scientists, to ensure that the correct priorities are set and to establish that the priorities match the funding; and (iii) that the fisheries scientists are aware of relevant research being carried out elsewhere.

6.12 Social Issues

Equity considerations are taken into account in policy and project choices through socio-economic analysis. By undertaking some socio-economic analysis in the sector study, a sector study team introduces a check to policies and projects aimed solely at profit maximisation.

Box 6 provides some examples of how this might come about. A sector study asks if the evolution of the industry is causing discrimination against any particular social group, such as a cultural group or a gender. It also attempts to predict possible damage to sub-populations under different policy options.

Socio-economic analysis examines the social implications of fisheries policies. Among other issues, a sector study might consider alternative employment opportunities for fisherfolk either within or outside the sector as fisheries management might imply a reduction in fishing effort, which will lead to fewer job opportunities for fisherfolk; even if there is no immediate requirement for a reduction in the number of vessels, changing technology and resource limits may limit the employment opportunities on board individual vessels.

Box 6: Examples of damage to fishing communities

Small-scale fishermen may be victims of industrial fishing methods.

Coastal aquaculture development may sometimes be damaging to artisanal fisherfolk or small farmers.

The creation of new outlets for fish may remove fish from the traditional distribution system.

Fisherfolk may be physically displaced from their homes by development activities, e.g., tourism.

Using socio-economic analysis, the study should seek to take as wide a view as possible of the factors contributing to fishing pressure on fish stocks and how far a fisheries development strategy can address the problem. In some instances, such a strategy might seek interventions from other government agencies. For example, as part of a long-term strategy, a fisheries department might seek improved communication links between fishing communities and nearby rural centres, improved health care facilities, education of children and, recognizing the link between the education of women and smaller family sizes, special attention being given to the provision of secondary education of girls. A general guide to taking social issues into account in development projects is published by the Asian Development Bank (1991). Gender issues are covered in Ostergaard (1992) who emphasises the importance of gender awareness in sector and project analysis.

A clear definition and understanding of the artisanal subsector in the fishing industry becomes especially important in the context of socio-economic analysis. The subsector often consists of fishermen and women who are not well organized, many of whom operate part-time, and many of whom are on the margins of the industry earning low incomes and with little access to credit and infrastructure. The subsector may employ large numbers of men and women, the latter largely in fish processing and distribution.

Some examples of information which would contribute to a socio-economic overview are listed in Box 7. In each case, the information may relate to the current situation but a historical comparison might be useful in showing whether and how conditions are changing.

6.13 The Human Resource-Distinctive Capabilities

The role of human resources in the process of development is fundamental. An obvious point, but worth making, is that it is human skill and ingenuity on the one hand, and human wants on the other, that make a fish industry possible. The people who possess the expertise to exploit the resource, to organize production and distribution and to anticipate changing markets are what makes the industry work.

Kay (1993) uses the phrase “distinctive capabilities” to denote the characteristics of human resources which give individual businesses or countries a competitive advantage. For example, in the fishing industry particular strengths might include experience and skill in managing fishing vessels at long distance or organising fish buying for processing on the high seas (“klondyking”). Some countries have capabilities in the construction, repair and maintenance of fishing vessels and others have a long tradition of aquaculture production. Fishing skills are often identifiable with a particular group of people and equally some groups have established reputations as entrepreneurs and traders.

Box 7: Examples of socio-economic information

Identification of industry participants, by age, sex, full-time, part-time, dependents and location.

Payment methods for work.

Incomes and prices of inputs and outputs.


Complementary and/or alternative employment opportunities.

Ease of entry to the sector.

Ease of exit from the sector.

Health, especially of children.

Life expectancy.

Access to health services.


Primary education enrolment, in numbers, by gender and as a percentage of totals by gender in age group.

Secondary education enrolment, in numbers and as a percentage of totals by gender and by age group.

Other indicators of educational status.

Maternal and infant mortalities.

Nutrition statistics.

Access to potable water.

Access to adequate sanitation.


Participation of women in the sector.

A key question for a sector study is, therefore, what are the special characteristics of a people which can add value to the processes of production and distribution of fish? This question must be addressed both within the review of the current situation (the “stocktaking”), and also-to determine the human resource potential-in the analysis section of the study.

While it is evident that cultural heritage, skills and aptitudes should be harnessed wherever possible, experience shows that people may find great difficulty in adopting new skills and adapting to a different way of life associated with them. Schemes to transform meat eaters into fish eaters and fishermen into farmers, or even fish farmers, have often been unsuccessful.

One of the roles of a sector study is to identify where existing skills and aptitudes can be built upon to catch and market underutilised species, to improve the quality of production, and other ways to generate increased economic benefits. The requirement for training target groups, and how such training might be delivered may be a topic dealt with in a sector study.

The issue of gender has been referred to above (section 6.12). Nevertheless, the issue is sufficiently important to note again, here, that a sector study should describe and analyse the role of women in all aspects of the fishing operation. In many countries, the role of women in the processing and distribution sector is central.

6.14 Industry Structure

The structure of the industry may be a matter for the concern of government. For example, a government may seek advice on ensuring that vessel ownership remains widely dispersed, and not excessively concentrated in the hands of a few companies or individuals. It may wish to review the relative merits of cooperative or private ownership of industry assets.

The ownership pattern in the industry may also be significant for social analysis. For example, the requirement to rent boats from non-fishing owners of vessels may be a factor responsible for low fishing incomes. Moreover, the consequences of losing the right to fish, perhaps because of payment default following from overfishing and insufficient income, may be very serious for the families concerned. The sector study should also show gender awareness when examining ownership patterns.

6.15 Innovation

Innovation may be related to a number of the areas considered in this section. It is important because it is a means of creating and sustaining comparative advantage. A sector study, therefore, should examine both the record of the introduction of new technology into the sector and what conditions have to be met to ensure the sector is competitive in the future. Box 8 lists some of the areas which a sector study team might consider in the context of innovation.

6.16 Privatisation

An issue which is likely to be important in many countries concerns the reduction in the role of the State in enterprise ownership and management. The case for reducing or ending the State ownership and control of many potentially commercial assets is now widely accepted. It is based on the view that, in general, commercial activities are carried out more efficiently by private rather than State enterprises.

Box 8: Possible areas for innovation in the fisheries sector

Vessel design.

Gear design.

Fish finding equipment.

On-board fish handling and preservation.

On-shore handling, processing and marketing.

Fish farming systems and technology.

The route that countries are taking from State ownership to private ownership is varied because there are many different approaches. To take a simple example, three options (amongst others) for the privatisation of a State fish marketing organization might be (i) closing down and sale of the equipment; (ii) sale of the enterprise as a going concern to the private sector; and (iii) the formation of a cooperative of some of the workforce to buy the company.

The issue is complex and, therefore, must be handled with care in the sector study. A summary of the principal techniques of privatisation can be found in Vuylsteke (1988).

When considering privatisation issues it is also worth recalling that the public sector has a positive role in fisheries administration and development but that the dividing line between what are appropriate activities in the public and private spheres may need careful consideration.

Fisheries are a natural resource which is very often an open access property to a greater or lesser degree. The open access nature of the resource means that without some form of intervention by the State, market failure and resource misallocation can be guaranteed. The case, therefore, for an involvement of the State is stronger than in many other industries. Sometimes, it is difficult for governments to determine where that dividing line should lie. Some governments, for example, have sought to regulate fishing through a State controlled fish marketing organization. The sector study team should be prepared to analyse this issue and provide the appropriate option(s) to the government.

6.17 Food Security

Food security means that every household in an economy should be able to produce or purchase sufficient food to meet daily requirements (Baum and Tolbert, 1985). To achieve this end, governments need to address both the supply and demand for food.

Recent economic contributions (summarised in Ellis, 1992) have shifted the focus of analysis of food security to adequate distribution and effective demand for food. One reason for this shift is the fact that at a global level, food availability has tended to outstrip population growth since the mid-1970s. Many regions of the world have moved into food self-sufficiency from a food deficit, and Western Europe and North America have shown a persistent tendency to produce structural surpluses of food.

The orthodoxy which concentrated on food supplies has now been re-examined and found wanting. The essence of the new approach is that, in general, people do not starve due to an insufficient supply of food; they starve because they have insufficient command over food. Thus, an overall deficiency in food production is only one of many factors which may cause food shortages. Sudden price rises, sudden falls in income, or low family income, or a particular distribution of food within a family can also be among the responsible causes.

For fisheries policy, the implication of this argument is that the case for the expansion of fish production as a contribution to food security needs to be examined with great care. In many countries, the greatest contribution that fisheries development can make to food security is by increasing incomes through greater economic efficiency and, therefore, command over food supplies.

A sector study may not be able to reach a firm conclusion on this issue although it is likely to have implications for the allocation of public sector resources. This might be the case if the government has some underlying concern about food availability and a preliminary view about the significance of fish for some groups of consumers. A sector study may, therefore, suggest that the contribution of fish to food supplies should be a subject of further study, possibly within the framework of the fisheries development plan.

6.18 Nutrition

The objective of a policy based on achieving sound nutrition is to reduce malnourishment, especially when this impairs health, growth or productive activity. Such an objective is related to the objective of food security, although it is not identical. Nutrition has traditionally been a branch of applied biochemistry but in recent years has been studied by social scientists. Some nutritionists now believe that, generally, if people eat enough food (mainly staple grains) and obtain sufficient calories, their protein and vitamin requirements will normally be met (Timmer et al., 1983; Grigg, 1985; Timmer, 1987; Ellis, 1992). Mollett (1990) includes an example from Peru which draws the same conclusion.

Globally, fish makes a significant contribution to dietary protein. The Fifth World Food Survey indicated that the contribution of fish to animal protein supplies in the developing market economics was estimated to be 20 percent, compared with 15 percent in the world as a whole. These general figures hide wide differences between individual countries, regions and social classes.

In sector study work, therefore, the issue of fish for good nutrition should be handled with some caution. The importance of fish for nutrition in particular situations cannot be assumed. If a government says that it is interested in fish production as a supplement to its objective of achieving improved standards of nutrition, the question arises as to whether the nutritional significance of fish can be substantiated.

6.19 Foreign Exchange

The contribution of the fisheries sector to foreign exchange earnings is often used as an argument for support to be given to the sector.

While the foreign exchange earnings of a fisheries sector may be considered important by the government of a country which is short of hard currency, the issue needs to be handled with caution. It is a fallacy to infer net economic benefits from large foreign exchange earnings. Firstly, the industry uses imported inputs, which should be offset against exports. Secondly, even if there is a net surplus of hard currency earnings, the contribution of the sector to the economy depends on the overall balance between the value of resources in and resources out, not on the traded portion of that balance only.

In this situation, the sector study team needs to have a knowledge of the net economic benefits generated by the sector coupled with the opportunity costs of labour and, especially, of capital, before it can draw conclusions about the economic benefits of the sector's foreign exchange earnings to the economy.

6.20 Marketing

Benefits from improved marketing of fish may include one or more of the following:

The key point is that there are a number of points in the production and distribution chain where increased value can be obtained. Marketing expertise is required to identify the current weaknesses and potential improvements.

Fish marketing is complicated because of the variety of issues which must be considered in a marketing study. A number of these are considered in Box 9.

A sector study should examine both domestic and export markets. Inside the country, public markets are often the channel through which consumers of fish become direct beneficiaries of the activities of the fish industry and also the means by which the sector benefits from consumer demand. However, very often, cleanliness, hygiene, repairs and maintenance of public markets are often conspicuous by the little attention paid to them. Consequently, fish spoilage and lower public acceptance of fish can often result. Public investment to remedy these faults in markets may generate substantial economic and social benefits.

Box 9: The determination of fish prices

Price determinants include the following:

In export markets, the possible requirement for State intervention is usually different. There are quite likely to be net returns to the country concerned if its exporters can increase profitability through some export marketing. However, it is possible that a thriving fish export industry may have adverse socio-economic effects. For example, a rapidly expanding export trade in shrimp may stimulate aquaculture in coastal regions, which may have harmful social and environmental effects. In such a situation, a sector study has to either assess the likely impacts of such development or, more likely, propose that further investigation is required.

A sector study should review the use made of market information systems; widely distributed information about the various aspects of markets, such as species in demand, prices and presentation, is a means of reducing market imperfections. In this connection, if the team notes that market information is not widely distributed, it should make proposals for improving the dissemination of data.

Marketing is a complex specialist area and a sector study may conclude that further research is required. It might recommend, for example, that a more comprehensive market study be undertaken. This would include an analysis of the structure of the distribution system, the functions of the various agents within it, and an assessment of logistics; costs and margins would also be included.

6.21 Hygiene Standards

An issue which is related to marketing is hygiene standards. The recommended approach to this is the application of “Hazard Analysis Critical Control Point” (HACCP). This should be used as a technique for identifying those processing points where contamination can be best monitored and controlled.

Internationally marketed fish and fish products must meet the standards of the importing countries. The European Union, for example, has defined the health conditions for placing fish and fish products on the market in Council Directive 91/493/EEC. This Directive applies the same stringent conditions to establishments exporting fish to the European Union as it does to domestic fish processors.

A sector study should review food laws designed to ensure the safety of food and protect the consumer, and recommend improvements. Government intervention in this area might include the placing of the requirement upon processing plants to meet specified quality standards, the training and deployment of government quality control inspectors, and the organization of training courses for the fish processing industry.

6.22 Credit

For many developing countries the availability of credit is a problem both in capture fisheries and aquaculture. There are three basic reasons why producers should wish to borrow. They are as follows:

Governments of developing countries and donor agencies have frequently perceived a number of factors as justification for the development of credit institutions for fish producers. These have included the lack of a market in loans, the monopoly power of private money lenders, and the difficulty of fisherfolk in providing collateral against credit.

In a sector study it is important that the status of credit to fish producers and processors be correctly diagnosed. Further details of how to proceed may be found in Chapter 7 of Ellis (1990).

A number of mistakes have been made in development assistance in the provision of fisheries credit. Taking these into account, a sector study should exercise due caution in its analysis of credit. Facile solutions to the perceived problem can easily worsen rather than improve the economic status of fishing communities.

Some examples of problems associated with credit programmes in the artisanal fisheries sector are shown in Box 10.

6.23 Summary - Some Issues in Sector Studies

The following points of guidance for a sector study team are drawn from the above paragraphs:

Box 10: Some problems in the provision of fisheries credit

Example 1: Mobilization of rural savings

In many developing countries there are already savings available in the food producing community. Many fishermen and fish farmers (and other food producers) already have savings. The problem may be finding means of mobilising the resources in the community rather than channelling more funds into it. One celebrated example of this process is the work of the Grameen Bank in Bangladesh which has shown that the very poor can save, borrow and repay loans by active participation in the Bank.

Example 2: The prerequisite of fisheries management

In many capture fisheries, the provision of additional credit to small-scale fishermen may encourage the wrong kind of development. Cheaper credit, in the absence of appropriate fisheries management measures, may be a very damaging policy approach. The corollary of this is that effective fisheries management is a precondition for successful credit arrangements.

Example 3: Possible comparative benefits of informal credit

Informal credit may be already available through money lenders. When the risks, transaction costs and expected inflation are taken into account, the rates of interest may not necessarily be significantly higher than rates would be for formal credit when all the costs of credit delivery have been fully taken into account. Moreover, informal credit is often readily available and, from the lender's point of view, relatively secure as it is based on personal knowledge.

Example 4: Difficulties in the provision of formal credit

For a variety of reasons many formal credit institutions have either had to stop lending or, at least, extremely reluctant to offer credit to the fishing industry. Repayment rates have been poor, interest rates have been too low to cover the costs of money and transaction costs, and the loans offered have been perceived by the recipients as grants rather than loans.

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