7 IMPACTS OF TECHNOLOGICAL CHANGE ON EFFICIENCY, EQUITY AND POVERTY IN SMALL-SCALE FISHERIES

7.1 SUMMARY TABLE

7.2 MAIN FINDINGS

7.2.1 What are main types of technological change and why do they happen?

Technological developments that have occurred in small-scale fisheries over recent decades can be divided into those that affect three main groups:

• the catching sector (e.g. fibreglass and plywood canoes replacing dug-outs, outboard engines, new gear types and synthetic materials, radios and electronics, use of ice);

• post harvest marketing and processing sectors (e.g. use of ice and insulation, fish smoking and salting technology, other forms of product processing and value-added, improvements in national transport systems and developments in international transport opening up new markets);

• those engaged in rural aquaculture (e.g. hatchery production techniques, transportation of fry, disease mitigation, feed developments).

Technological change is usually a gradual process (Kurien 1995, Cunningham et al 1985), but why does technological change come about? At the micro-economic level, improvements in technology can be the result of the search for efficiency by individual operators seeking to increase profitability, which if successful then spreads through the community. Key macro-economic conditions may also bring about changes in the use of technology. These macro-level conditions include factors such as the expansion of international and domestic markets for seafood products (Bort, 1987; Geheb and Binns, 1997; Ahmed, 1992), exposure to international practices and greater communication and knowledge of other areas of the world and liberal import policies on outboard motors (Kurien, 1995). All of these might be termed "enabling" conditions.

They may also be the result of necessity, supporting the adage that "necessity is the mother of invention". Examples include a) the need to introduce gillnets and engines to fish further from home as a result of declining catches, due to competition with industrial trawlers (Kurien, 1995, Bort, 1987), b) a shortage of suitable large tress for dug-out canoes as in West Africa and India (Kurien,1995) which required the development of new boatbuilding technology, and c) the requirement for cash income as a result of the introduction of taxation (Geheb and Binns, 1997; Okwe, 1989).

Finally, it is clear that international and bilateral aid agencies, national and local governments, and local and international NGOs, have all contributed to technological developments (Ahmed, 1992; Tvedten and Hersoug, 1991; Kurien, 1995; Bailey, 1985; Bakouy, 1993; Donaldson, 1980, O'Riodan, 1994), largely in their attempts to improve productivity and incomes, to increase food availability for domestic consumers, and where possible to produce a surplus for export.

7.2.2 Efficiency

What is meant by efficiency? Economic efficiency is concerned with, on one hand, productivity at the firm level (e.g. individual vessel or fishing company) and, on the other hand, productivity at the level of the entire fishery exploiting one or several fish stocks. Variations in productivity and profitability among different fishing firms can be exclusively attributed to differences in fishing and managerial skills and fishing technologies (e.g. technological efficiency). Changes in productivity and profitability at the level of the entire fishery are in addition caused by the aggregate and age-class specific level of fishing effort expended on the fish stock(s) and the latter's abundance, distribution across space, and reproductive capacity.

It is useful to examine why micro-economic benefits and technical efficiency in the form of higher catch rates and profits can be expected at the level of the individual boat owner in the short-run, and when taken in isolation. This of course assumes that the factors of production are such that a change to using a new engine, for example, will result in greater net profits (e.g. Jinadu 1998). However, there are examples that suggest that technical efficiency may not be more economically efficient. For example, the introduction of diesel outboard engines in West Africa has been largely unsuccessful due to operational, practical and maintenance considerations, even though in technical terms engines should last longer and be more reliable. De Camargo and Petrere (2001) showed that river fishers in Brazil had greater incomes if they were not mechanised due to the high cost of fuel.

At the aggregate level, and in the long-run however, technological change does not always result in higher output or profitability for groups of boat owners (or the "average" fishermen) if they are exploiting the same, unregulated, resource, and technology can therefore result in both economic and biological inefficiency.

The explanation in Cunningham et al. (1985) is a useful analysis of why. Technological improvement allows any given quantity of fish to be caught at lower unit costs (i.e. the long run average cost curve shifts downwards), and this encourages others into the fishery depleting stocks further, thereby encouraging still greater improvements in technological efficiency etc. The result in an open-access situation is that price and average cost will always be brought into equality. Furthermore, the sustainable yield of a fishery can be expected to increase as a result of technological change until the MSY is reached, so that at low levels of fishing effort, greater catchability does raise productivity. However, at levels of effort above the MSY, further technological improvements will result in overexploitation and cause the sustainable yield to fall, output to fall and prices to rise. Equally important is that in the absence of regulation the effect is not self-correcting. So, whether technological development raises or lowers output and productivity (i.e. whether it is efficient or not) depends, inter alia, on the level of fishing effort, and the degree of control of access.

7.2.3 Equity and poverty

Technological advances (i.e. catchability) in industrial and semi-industrial fisheries have been even more pronounced than in artisanal fisheries and have had a huge impact on small-scale fisheries, because of both competition (e.g. for the same resources) and conflict (e.g. in terms of gear losses). The move towards larger vessels, and the use of trawling and seining in particular, has been stimulated largely by the development of international markets. Previous technological developments within small-scale fisheries may not have significantly affected the overall structure of production and marketing which remained small-scale and internally orientated (Bort, 1987). However, the same cannot be said of technological developments that have facilitated the expansion of domestic semi-industrial and industrial fleets, and allowed access to foreign vessels (with ever-improved technology).

Furthermore, traditional fishing technologies in general evolved to suit the particular ecological context, in particular because of the species selectivity and passive nature of many of them (Kurien, 1992; RAPA/FAO, 1987). The introduction of new technologies and "modernization", have made significant contributions to overfishing, with certain impacts on poverty when tied to ineffective management which has done little to limit effort and thus resulted in smaller profits being shared out between greater numbers. Even though one might suppose that the knowledge and experience required to fish is some form of barrier to entry, the literature supports the theoretical discussion above about the lack of positive impacts of technological development on incomes in the context of open-access or ineffective regulation (Kurien, 1992; Geheb K. and Binns T., 1997, Ali and Fisher, 1995; Ahmed 1992; RAPA/FAO, 1987; Bailey, 1985).

These developments have therefore had equity and poverty implications. There are countless examples of small-scale fisheries losing the battle for fish with larger operators with greater technological sophistication (and by implication, greater wealth) that are competing for the same resource (Wiratno and Mudiantono, 1995; Tvedten and Hersoug, 1991; Bailey, 1985; Betke, 1988). The large, technologically advanced fishing operations also compete in terms of credit, institutional support and market arrangements.

However, implications are also felt within small-scale fisheries in terms of altered structural changes in fishing and marketing. Whereas historically most catches would have been sold locally, access to international markets has resulted in a new supply chain including processors and middlemen. This has had four main results:

a) demand for catches has increased causing greater pressure to over-exploit stocks (as explained in the theoretical section on efficiency above), as many international markets appear insatiable and inelastic to price;

b) many fishermen have become increasingly specialized, increasing their vulnerability to price fluctuations and other factors outside their control;

c) the emphasis on external markets has had significant implications on the poor in terms of food security and availability of protein from locally caught fish;

d) individual fishermen are often forced to enter patron-client arrangements, either as insurance against periods of poor fishing, or because they require significant amounts of the capital to obtain fishing equipment that will ensure they are not disadvantaged compared to others using new technologies. Such arrangements can be disadvantageous for the poor in terms of interest rates, catch shares, obligations to sell catches at reduced prices etc. This initiates a system of dependency where fishermen can be denied any meaningful profits (Bort, 1987; de Silva, 1977; Betke, 1988), whereas in the past fishermen where on a more equal footing with small-scale fish buyers. Furthermore, the poorer in the community may suffer from a negative discrimination with respect to access to loanable funds, especially from formal sources, due to a lack of securities (Platteau et al 1985; Ahmed, 1992; Bakouy, 1993).

These points are at the heart of the debate surrounding the impacts of capitalisation, and the concentration of the factors of production associated with the "blue revolution". Not everyone has had access to new technology, and capital requirements have increasingly meant that boat owners may not actually be fishermen, but just those involved in rent seeking behaviour (Platteau et al, 1985; Ahmed, 1992; Betke, 1988; Okwe, 1989). Indeed, some projects have specifically not selected traditional fishermen as beneficiaries when seeking to introduce motorized vessels (de Silva 1977). This has had severe social impacts in terms of societal structure and organization in many communities. "Traditional" fishermen may be prevented from acquiring engines, for example, due to high capital requirements (Deb A. and Alam K, 1994, Okwe, 1989). However, given the requirements of technology, ecological conditions and locational factors are also of great importance, and therefore themselves create distributional effects (Platteau et al, 1985). Some areas develop quickly that can access international markets, credit etc, while in others development can be blocked with a corresponding stagnation, or decline, of incomes.

Equity considerations may also relate to gender imbalances as suggested by Andersson and Ngazi (1998) who showed that women who collected inter-tidal products were severely disadvantaged when men with snorkelling gear (i.e. a new technology) started to dive for the same products (octopus, sea-cucumber). However, as widely documented (Dehy, 1992), women are more usually employed in the post-harvest links in the supply chain, and the growing importance of international markets must therefore have had detrimental effects on their ability to contribute to sustainable livelihoods from fish marketing.

However, the role of technology can certainly provide significant benefits to the poor. Chakalall (1999) showed how early warning systems and hurricane preparedness plans have reduced vulnerability to loss of life from hurricanes in the Caribbean, and how development assistance has provided advice on how to prepare vessels and gear for minimum losses. VHF radio networks in many countries have showed how technical measures can reduce vulnerability (a key determinant of why people enter poverty) to factors such as cyclones (Calvert, 1998), engine breakdown etc. Radios have also been used by small-scale fishers to control illegal fishing in their waters (Davies, 2001/02).

There is also a large body of literature that discusses how developments and dissemination of aquaculture technology^[4] have impacted on the poor in inland, small-scale fisheries (pond, cage and flood-plain). In such fisheries, access may be more regulated than in marine fisheries and therefore less susceptible to dissipation of benefits over time. Certainly aquaculture would appear to offer great potential for households to provide additional food security and diversification of livelihood strategies in the face of overfishing of wild stocks (FAO, 1999). Some references suggest clear benefits to the poor in terms of a) food security from increased production, b) employment, and c) profits to the poor actually engaged in fishing/production and marketing (Edwards, 2000, Ahmad et al, 1997; BCAS/Macfadyen/Aeron-Thomas, 2001; FAO, 1999). However, many studies are more circumspect, especially about the distributional benefits within the production and marketing sectors (Ahmad et al, 1995; Thompson and Hossain, 1997; Kremer, 1994; O'Riordan, 1994), especially where intensive aquaculture practices are prevalent. These studies tend to show that benefits may be skewed in favour of the more wealthy sections of the community including leaseholders, pond owners and fishers with efficient/expensive gears, and suggest that equity and poverty are greatly determined by mediating institutions.

What is clear however, is that there is little documentary evidence on the effects of aquaculture in helping to reduce poverty (Gupta et al, 1999; FAO, 1999; Edwards, 2000), especially given the large amount of literature on the impacts of technology on poverty in small-scale marine capture fishers. This, it has been suggested (FAO, 1999), is due to the small-scale and geographically scattered nature of aquaculture by poor farming households, the fact that much produce is consumed locally or sold in local markets and is not recorded in government statistics, and the fact that the poor have rarely been explicitly targeted for assistance through projects or programmes, although some projects (e.g. the DFID 3^rd and 4^th Fisheries Projects in Bangladesh) have specifically targeted the poor, albeit with mixed success as shown above.

It is evident from all of the discussion above that for technological developments to be effective, they must be based on "appropriate technology" (RAPA/FAO, 1987; Donaldson, 1980) and not imposed from above, both for successful poverty reduction, but also to ensure that small-scale fishers take up new technologies. Defining what constitutes "appropriate technology" is of course the great challenge, but must include a consideration of factors such as working capital requirements, skill levels and managerial capacity, the intensity of rural aquaculture, the informal financing system, the fit with current social structures, and integration with livelihood strategies and other sectors. From the literature, it appears that for technology to benefit the poor, the poor must have: familiarity with appropriate technology and opportunity to observe concrete examples; access to land or water bodies and availability of seed (in the case of aquaculture); access to credit on fair/favourable terms; profitable technology; extension and training; technology that suits local conditions; market demand for products and the ability to access such markets; and institutional support - conditions which are often lacking.

7.3 POLICY IMPLICATIONS

1. A key policy implication appears to be that for technology to be of any benefit to poor marine capture fishers, access must be controlled to limit increasing numbers of small-scale fishermen, and the interests of the poor must be protected against the negative impacts of industrial and semi-industrial activities on small-scale fisheries.

2. Where inland stocking programmes are employed, cancellation of leases does not necessarily ensure access to water bodies by landless fishers and other disadvantaged groups due to power structures, and NGO involvement and local organization may be necessary to reduce problems with the distribution of benefits.

3. Social, economic and institutional factors are important constraints to greater contributions by aquaculture to rural development, as generic technologies are already available.

4. Licence fees should be charged in relation to the benefits received by different gear users in capture fisheries, so those with more efficient gear making more money, should pay more.

5. Appropriate policies need to be implemented to provide the poor with better access to credit, to solve the problem that "a man who can afford a trawler boat is already a rich man" (Platteau et al 1985). This requires the organised credit sector to extend more loans.

6. Conventional top-down, technology driven approaches have only marginal positive impacts on the poor in most countries. This applies to technology in the wild capture fisheries sector, and to rural aquaculture.

7. Extension may be a key bottleneck in technological dissemination, but care should be taken not to force the uptake of unsuitable and undesired technological innovations, and to use appropriate and innovative extension techniques.

8. The poor are often not early adopters of technology (due to their marginal circumstances and attitudes to risk (FAO, 1999; Donaldson, 1980)), and so programmes targeting poverty must specifically assist the poor to ensure that benefits do not accrue just to those that are better off.

9. Target group selection must be done through stakeholder consultation to clearly define and identify the poor.

7.4 RESEARCH IMPLICATIONS

1. Greater research is required, ex ante and ex post development assistance, to ascertain which forms of technological intervention are most appropriate to improve livelihoods for the poor. See Gupta et al (1999) for a useful framework.

2. More understanding is needed about the attitudes of the poor to technology (e.g. Muhammad and Susilo, 1995, Jul-Larsen, 1991, Donaldson, 1980), current constraints, and ways to ensure rapid uptake of appropriate technology e.g. extension, programmes that are flexible and focus on institutional conditions etc.

3. More research is needed to assess the impacts of aquaculture development on the poor, and how to maximise benefits. This should focus on meeting local objectives rather than maximising biological yield, on low-cost food fish rather than high-value species, and on communities rather than commodities (Edwards, 2000).

4. Better understanding is required on the trade-offs between the capture of wild fish and culture of farmed fish.