Recent trends and developments in fish trade and marketing have prompted the need for a reassessment of investment opportunities and credit needs of the fishery industry in the Asia and Pacific Region. Unlike the industrial fisheries of the developed world, fishery industries in the developing countries of Asia and the Pacific depend heavily on the artisanal sector for production and supply of raw materials and on small- to medium-scale fishing operations.

While high value species are mostly processed for export, most of the medium and low value species, which form the bulk of the landings, are marketed fresh or are processed for the domestic market. Rapid macro-economic developments in the economies of the region and changes in the expectations of consumers have led to a diversification of product forms even in the domestic markets and value addition has become one of the main features of the fish processing industry.

Changing consumer preferences, in favour of easy-to-prepare processed fishery products, brought about by changing lifestyles, as well as a general increase in consumer purchasing power, have increased the demand for such value-added fishery products. At the same time, the increasing consciousness and demand of consumers for quality fishery products has necessitated additional investments to cater to such demand.

Initial investigations show favourable financial returns for value-added production of fishery products and indicate encouraging prospects. There is certainly scope to take advantage of such potential and for financially viable business opportunities. In this regard, the need for promotional efforts to introduce new and improved value-added fishery products through co-ordinated efforts between financial, marketing and fisheries institutions must be addressed.

Such investments would not only cater to a vacuum in the domestic market, but would also help the impoverished coastal and inland fishing communities and the processors to enjoy better incomes and improved employment prospects. Value addition of under-utilized or low value species would also assist in improving their use for direct human consumption rather than for reduction for animal feed use. Value addition and utilization of often discarded by-catch would contribute towards a more sustainable use of scarce fisheries resources.

It is in this context that the regional Workshop on Financing Value-added Production and Marketing of Fishery Products in Asia and the Pacific was organised. The workshop was also a follow up to recommendations of previous regional consultations on fisheries credit and marketing in the region, in particular expert consultations organised by FAO and the Asia Pacific Rural and Agricultural Credit Association (APRACA), through its consultancy arm, the APRACA Consultancy Services (ACS) in Jakarta, Indonesia, in 1993 and in Manila, Philippines, in 1995.

The workshop served as a forum to discuss and explore the scope and opportunities for value-added production, marketing and development of fishery products, particularly highlighting the role of institutional credit. Specifically, it aimed to:

(a) promote the production, marketing and development of value-added fishery products in Asia;

(b) identify technical and quality criteria for value-added production and marketing of fishery products;

(c) identify credit/investment requirements for small/medium-scale production of value-added fishery products;

(d) enhance the role and improve the efficiency of institutional credit for value-added production, marketing and development of fishery products;

(e) promote value-added production, marketing and diversification of fishery products as a strategy for employment and income generation, a potential source of export earnings and a sustainable use of fishery resources, aiding conservation;

(f) identify specific prospects, opportunities and constraints in the production and marketing of value-added fishery products.

The workshop was attended by 53 participants from eleven countries, including six TCDC (Technical Cooperation among Developing Countries) experts. Only the participation of the TCDC experts and the two FAO staff members was funded by FAO while all other participants were funded by their own institutions. This reflects the interest in the workshop by concerned national institutions and organizations. The list of participants is shown in Appendix II.

The countries represented at the workshop included Maldives, Bangladesh, India, Nepal, Sri Lanka, Vietnam, Thailand, Indonesia, Malaysia and Iran. The participants included senior executives from banks and fisheries administrations and representatives of fisheries research institutes, private and public sector fish marketing/processing corporations and fisheries development projects.

The meeting was a direct contribution to Commitment Six of the Rome Declaration and the World Food Summit (WFS) Plan of Action as it promoted optimal allocation and use of public and private investments in support of value-added fishery products.

The workshop commenced with presentations on trends and developments in value-added production and marketing of fishery products and went on to discuss the financial and investment requirements for value-added production and marketing of fishery products. Country presentations and case studies followed from Sri Lanka, Bangladesh, Indonesia, Nepal, Thailand, Malaysia, Philippines, Vietnam, Iran and the Maldives. The Programme of the workshop is shown in Appendix I.

In addition to exchanging and discussing experiences in financing the manufacture and marketing of value-added fishery products, the meeting also drew up specific proposals for follow up at national and regional levels to enhance credit facilities for the manufacture and marketing of value-added fishery products with particular reference to the small- and medium-scale sector. The proposals prepared by the country level working groups and adopted in the concluding plenary session are summarized in chapter 4.

In the opening ceremony, the following speakers addressed the participants of the conference: Dr. K.P.P. Nambiar, Director, INFOFISH; Dr. E. Ruckes, Senior Fishery Industry Officer, FAO, Rome; Mr. B. Shrestha, Managing Director, APRACA Consultancy Services (ACS); Mr. Dato’ Mohd Rosli Abdul Aziz, Chief Executive Officer, Agricultural Bank of Malaysia (BPM); and Mr. Yong-Jin Kim, Secretary-General of the Asia Pacific Rural and Agricultural Credit Association (APRACA).

In his welcome address, Dr. K.P.P. Nambiar, Director of INFOFISH extended a warm welcome to all the participants in the workshop and expressed his thanks to the co-hosts of the conference, Bank Pertanian Malaysia (Agricultural Bank of Malaysia), to LKIM (the Fisheries Development Authority of Malaysia), and to APRACA and FAO for their technical and funding support.

He then extended a special welcome to the guest of honour, Y. Bhg. Dato’ Mohd. Rosli Abdul Aziz, whom he not only welcomed as the Chief Executive Officer of the Agricultural Bank of Malaysia but also as the former chairman of APRACA and current member of the Executive Committee of APRACA.

Dr. Nambiar stressed that INFOFISH was pleased to be involved in the present expert consultation in which more than 50 experts from more than thirteen countries were participating. He said that INFOFISH looked forward to playing a role in implementing special action programmes and project ideas which were expected to emerge during the workshop. Dr. Nambiar concluded his remarks by drawing attention to the fact that closer interaction between financial institutions and fisheries and fish marketing and processing specialists was essential for a healthy growth of fisheries and fish processing, including value addition.

In his inaugural address, Dr. Erhard Ruckes, Senior Fishery Industry Officer of FAO, Rome, welcomed the workshop participants on behalf of the Director-General of FAO and its Fisheries Department. He then drew their attention to Commitment Six of the Rome Declaration and to the WFS Plan of Action which promotes the optimal allocation and use of public and private investments to foster human resources, sustainable food, agriculture, fisheries and forestry systems and rural development and to their relevance to the objectives and outcome of this regional workshop on financing the production and marketing of value-added fishery products in Asia and the Pacific.

Dr. Ruckes also drew attention to the Director-General’s Special Programme for Food Security which aims at mobilising external financial resources in support of food security in low income and food deficient countries some of which were represented at this workshop. He concluded his inaugural address by thanking again the Malaysian authorities and the organisers of the workshop and by emphasising that the preparation of country specific follow-up action proposals for enhancing production and marketing of value-added fishery products would represent an important step towards achievement of food security at national and regional levels.

After welcoming the participants and thanking the co-hosts of the workshop for their cooperation and hospitality, Mr. Bishnu Shrestha of APRACA Consultancy Services in his introductory remarks gave a brief overview of the activities which had been undertaken by APRACA and APRACA Consultancy Services for the promotion of appropriate credit services for the fisheries sector and which commenced in 1989.

Since 1989, APRACA Consultancy Services has organised five regional workshops and also established FISHCRESS, a fisheries credit support services unit which, among other things, disseminates information on credit and investment programmes in the fisheries sector.

The increasing attention which APRACA members pay to fisheries finance was also reflected by the fact that the newly appointed Secretary-General of APRACA, Mr. Yong-Jin Kim of Korea as well as the previous Secretary-General of APRACA Mr. Zulkifli M. Noor were both present at the workshop.

Concluding his introductory remarks, Mr. Shrestha invited the participants to come up with specific proposals on how the supply of credit for value-added fishery products can be enhanced with special emphasis on rural fishing communities in line with the mandate of APRACA.

Mr. Dato’ Mohd Rosli Abdul Aziz, Chief Executive Officer of the Agricultural Bank of Malaysia, formally declared the workshop open. He stressed that the topic of the workshop was timely and very important for the fisheries sector in Asia and for increasing the incomes and living standards of those involved in fishing.

Mr. Aziz expressed his confidence that the outcome of the workshop would be of practical importance since the workshop had brought together experts who have a crucial role to play in financing value-added fishery products, i.e. fishery experts specialised in production and marketing of value-added fishery products, fisheries administrators skilled in fisheries management and in marketing of fishery products, as well as bankers and credit specialists.

Regarding the special role of APRACA, the speaker mentioned that APRACA was concerned with the weaker and small-scale sectors of the economy and he expressed his hope that the follow up to the workshop would particularly help the poor fisherfolk and women in fishing communities to increase their standard of living.

The opening session was concluded by a brief welcome address by Mr. Yong-Jin Kim, the newly appointed Secretary-General of APRACA. Mr. Kim thanked the organisers and hosts of the workshop and also the participants for having come together in an effort to enhance investment and finance in a relatively new field, i.e. the production and marketing of value-added fishery products.

Mr. Kim also expressed his appreciation of the excellent relationship between APRACA, INFOFISH and FAO in the past and said he looked forward to even closer cooperation in the future, including cooperation at the national level and with regard to specific projects and investments.

3.2.1 Trends and Developments in Value-added Production and Marketing of Fishery Products

This part of the programme was chaired by Dr. S. Subasinghe, Technical Adviser of INFOFISH. It commenced with a presentation by Ms. Fatima Ferdouse, Chief of the Trade Promotion Unit of INFOFISH on recent trends and developments in marketing and trade of value-added fishery products in the Asia and Pacific region.

Ms. Ferdouse defined value addition as one of the possible approaches to improving profitability of fish processing and trading in the context of increased competition in domestic and international markets. It also responded to consumer demand for fishery products of better quality and products which require only a minimum of time and effort to be prepared for consumption and are presented in such a way as to appeal to the ultimate consumer.

It was pointed out that the traditional presentation of seafood was no longer appropriate for today’s markets both in developed and developing countries in Southeast Asia and in the Far East and that a growing number of seafood processors and exporters were gearing up to meet the challenge of producing and marketing value-added fish products.

The presenter also pointed out that value addition does not only mean further processing of raw materials but that it can also be done through improved handling, packing and transportation of fishery products and even through improved fish capture methods.

Ms. Ferdouse went on to describe the value-added products which are presently being exported from the Asia and Pacific countries to regional and non-regional markets and which include a variety of live, chilled, frozen, dried, canned and other fish, shrimp or cephalopod- based products.

The presentation continued with an overview of trends in domestic and international seafood markets. Regarding domestic markets, a trend in ‘ready-to-cook and ‘ready-to-eat’ products was observed. On the Asian international market, increased seafood sales directly to the retail sector played an important role in the development of value-added fish products, particularly in Japan. In addition to traditional Asian export markets for seafood, China’s booming economy is offering new opportunities to seafood exporters of the region.

A new development in the US market observed by Ms. Ferdouse was that US importers provided technical assistance to processors in Asia for producing value-added fish products for the US market.

With regard to Europe, the presenter mentioned that, unlike Japan and the US, European markets, because of their large re-processing industries, were still looking for raw materials rather than for value-added products. A shift of interest to value-added fish products was noted, however, in southern European markets.

The presenter concluded her presentation with a medium-term, region-wise and country-specific outlook for the production and marketing of value-added fishery products.

The presentation was followed by a lively discussion. In one intervention, experiences from Nepal were cited which showed how the same value-added products, i.e. chilled fish, can successfully target domestic and export markets at the same time and benefit both types of consumers.

A representative of the National Bank for Agriculture and Rural Development (NABARD), India, enquired about manufacture of chitosan from shells of crustaceans and suggested that the production could be expanded in India on a commercial scale with the support of bank finance if the required technical information including information on the economics of the operation could be made available to NABARD, possibly with the help of TCDC. In response to this query, Dr Subasinghe of INFOFISH said that he would elaborate on the production of chitosan in his technical presentations later on and suggested that the transfer of expertise and information to India on investment requirements for the production of chitosan could form one of the country specific follow-up proposals to this workshop.

Another participant enquired about the relationship between the government and private sector in the case of the very successful fish processing industry in Thailand. In reply to this question it was explained that the Government of Thailand provided the infrastructure and the necessary information on export requirements and specifications while the necessary investments and measures were undertaken by the industry itself. This was illustrated by the introduction of HACCP in the fish processing industry and by the expansion of aquaculture in Thailand.

Another point discussed was the share of the over-all value of exports of value-added fishery products such as breaded/tempura and cooked shrimps. When comparing different countries of the region, it was found that an important factor which influenced the share of value-added fishery products in the over-all export of such products is the cost of labour.

Other questions raised and answered in the discussion concerned the economics of surimi production, quality requirements for export to Southeast Asian countries and the costs related to the implementation of HACCP. In response to the latter question it was pointed out that the costs were low provided the fish processing plant was well designed.

The paper presented by Ms. Ferdouse is included in Appendix III of the report.

The second presentation under the first part of the programme was made by Dr. E. Ruckes of FAO and was on the role of value addition in the global fishery industry. This session as well as the following session was chaired by Mr. B. Shrestha, Managing Director of APRACA Consultancy Services.

The presentation commenced with an overview of characteristics and trends of the global fishery industry which is characterized by liberalization of international trade and by globalization of markets. Dr. Ruckes concluded that in the economies of many countries the fisheries and aquaculture sectors were more international in character than most agricultural sectors.

While the presenter admitted that overfishing and fish species in danger were two of the problems which made fisheries an interesting news item, he also observed that the notion that fisheries resources at a global level are over-fished and that there was no potential for expansion was wrong. He pointed out that the rather bad image of fisheries had resulted in a reduction of investment and credit flow into the fisheries sector.

The presentation continued by describing how value can be added in fish processing and marketing and with an overview of trends in consumer markets. Concluding his presentation, Dr. Ruckes stressed that value addition was a must for fisheries and aquaculture whether on a local or global scale, for technical reasons, because upgrading of food materials and elimination of waste will help to maximise the value of fish production, in particular of animal protein for direct human consumption and thereby contribute to food security.

He then drew attention to the fact that current financial constraints in multi- and bi-lateral development cooperation make it imperative that local solutions be sought and local arrangements for their implementation be developed. This was one of the reasons why a strong cooperation between APRACA and INFOFISH and their members was needed.

In the discussion following Dr. Ruckes’s presentation the point was made that while value addition increased the economic value of products it did not necessarily also increase the nutritional value. It was also mentioned that value-added products aimed at high income groups rather than at the nutritional needs of weaker sections of the society.

In response to these interventions it was pointed out that value addition increased the scope for higher incomes for fishermen and that some value-added products, like for example surimi, used by-products which had never been used before. The possibility of using by-catch and previously discarded fish species for value-added products was then discussed. It was observed that opportunities were rather limited since even most types of surimi production, for example, needed a steady supply of good quality raw materials depending on the use of the particular type of surimi later on.

A question was raised whether soft loans with subsidised interest rates should be provided to encourage manufacture of value-added fish products. In reply to this question it was suggested that more important than providing loans with subsidised interest rates was that governments should provide appropriate infrastructure such as fish landing, handling and marketing facilities, with good road connections and a reliable supply of electricity and safe water, etc.

Specially designed credit programmes in support of necessary investments by the private sector were also needed which could supply credit in a timely, flexible and demand oriented manner. In order to be sustainable, these credit programmes should be economically and financially viable and preferably not have subsidised interest rates except, possibly, for a short initial period.

Dr. Ruckes’s paper is included in Appendix III of the report.

Technological and Quality Criteria in Value Addition and Product Presentation of Fishery Products

Dr. Ruckes’s presentation was followed by a presentation by Dr. S. Subasinghe of INFOFISH on technological and quality criteria in value addition and product presentation of fishery products. Dr. Subasinghe commenced his presentation by drawing the attention of the workshop participants to the fact that limitations in the further exploitation of fisheries resources in the region have affected the processing and export sectors of many countries. To compensate for stagnant exports, many countries in the Asia and Pacific region have resorted to producing value-added products for export markets and so far have shown varying degrees of success in this respect.

The presenter then went on to describe quality requirements of major markets for value-added fish products. He observed that with a view to satisfying quality requirements, an increasing number of processors in Asia have committed themselves to HACCP-based production, planning and processing control.

Value-added fishery products from Asia were then grouped into product groups, i.e. shrimp and shrimp products, fresh/frozen fish, cephalopods, heat sterilized products and cured/fermented products and their respective quality and technological criteria were elaborated on in detail. The presentation was concluded with a description of packing and labelling requirements.

Dr. Subasinghe’s presentation was received with great interest and a number of specific questions were posed mainly requesting further clarification. Some of these questions were immediately answered while others were deferred until the relevant technical presentations scheduled later in the programme of the workshop.

The paper presented by Dr. Subasinghe is included in Appendix III of the report.

The afternoon of the first day was concluded by a presentation by Ms. M. Sundarajan of the ODA Post-Harvest Fisheries Project attached to the FAO Bay of Bengal Programme for Fisheries Management on the role of women in India in value-added processing and marketing of fish.

Ms. Sundarajan stressed that women in fishing communities in India are traditionally involved in processing and marketing of fish. She said that they constitute a large section of fish workers in India and are major players in the post harvest sector. However, their efforts are not included in the census records of surveys on fishing communities and hence most of their needs have been ignored in the past.

Ms. Sundarajan went on to describe how women perform their tasks in the post harvest sector either at home or as labourers in commercial processing units and highlighted the special problems encountered by women. In the case of fish drying, the problems included low prices for the end product and thus the need to produce more to compensate for this. In the case of smoking of fish, working conditions were hazardous and in the case of fresh fish trade, inability to preserve fresh fish often resulted in distress sales and associated financial losses. In addition to these specific problems there were problems with access to transport and credit.

The presentation concluded by drawing attention to the issue of women’s limited control over resources and advocated micro-level interventions together with macro-level advocacy as a strategy to strengthening women’s role in post harvesting and in the manufacture and marketing of value-added fish products.

During the discussion which followed the presentation, it was observed that in different parts of India, credit programmes in support of women’s micro-enterprise development projects have been very successful and that there was great scope to strengthen their role in value-added production and marketing of fish. It was also observed, however, that the legal status of women in many respects needed to be improved in order to consequencially improve their access to resources.

A participant from Nepal observed that in Nepal credit programmes for women who participated in small farmer development programmes performed better than credit programmes in support of groups of male farmers, partly because women were more responsible.

Ms. Sundarajan’s paper is included in Appendix III of the report.

3.2.2 Financial and Investment Requirements for Value-added Production and Marketing of Fishery Products

Enhancing the Role of Credit in the Production and Development of Value-added Fishery Products

The second part of the programme of the workshop was devoted to financial and investment requirements for value-added production and marketing of fishery products. It commenced with a lecture by Mr. B. Shrestha, Managing Director of APRACA Consultancy Services (ACS) on enhancing the role of credit in the production and development of value-added products. The session was chaired by Dr. E. Ruckes of FAO.

Mr. Shrestha started out by highlighting the importance of credit and investment as key factors in the sustainable development of fisheries industries with special reference to small- and medium-scale industries which are involved in fish processing, marketing and value addition. He drew the attention of the workshop to the fact that the introduction of fisheries management and conservation measures and related changes in the fishery industry required investment and credit support particularly to the small- and medium-scale enterprises. Investment and credit support was also needed for a better economic utilization of scarce fishery resources which is why value addition should receive high priority.

With regard to access to institutional credit for capital investment and for working capital requirements it was pointed out that there was an important difference between the large-scale and the medium- and small-scale sectors. While it was relatively easy for large enterprises to obtain loans under commercial terms, small- and medium-scale fishery enterprises face many constraints including a lack of enthusiasm and initiative on the part of banks; this was related to negative lending experiences in the past and to the lack of advocacy.

Mr. Shrestha pointed out that many agricultural and rural banks in Asia were not familiar with investment opportunities of fisheries enterprises in a changing natural and economic environment. With a view to remedying the situation and to improving the access to institutional credit of the fisheries sector in general and innovative fisheries enterprises such as the ones involved in value addition in particular, he observed that much more advocacy, commitment and promotion of fisheries credit and investment support for sustainable fisheries development was needed from government agencies, public and private sector agencies and from non-governmental agencies.

Mr. Shrestha explained further that it would be helpful for private and non-governmental organizations, in order to promote investments in small and medium-scale fisheries enterprises, to establish and strengthen their own associations and also to expand their activities to savings, credit and credit guarantee operations.

Mr. Shrestha further explained that in the emerging environment of globalization and deregulation and in the context of discontinuation of subsidized and target group oriented credit programmes, agricultural and rural banks were looking for orientation and for new investment opportunities. In this context, regular contacts and meetings between banks and organizations and agencies involved in fisheries development would be of great help.

Concluding his presentation, Mr. Shrestha drew attention to the growing role of grassroots level financial institutions, i.e. self help groups, cooperatives, non-governmental organizations and other local organizations. He pointed out that linking such organizations and national level financial institutions may be another way of enhancing the role of credit support for small- and medium-scale production and marketing of value-added products.

In the discussion following Mr. Shrestha’s presentation a number of suggestions were made as to how the access of the small- and medium-scale fisheries sector in general and of the value-added fishery products sector in particular to institutional credit could be improved. These suggestions can be summarized as follows:

• Improved communication/interaction between financial institutions, concerned government agencies and fisheries entrepreneurs.

• Dissemination of information on production and marketing of value-added fish products through APRACA Fisheries Credit Support Services (FISHCRESS) Network.

• Preparation and dissemination of case studies on successful fisheries credit programmes.

• Enhancement of expertise of financial institutions in formulation, appraisal and monitoring of fishery credit programmes.

• Improvement of linkages between informal and institutional finance.

• Introduction of insurance programmes to reduce risk for financial institutions.

Dr. Ruckes continued to chair the session on investment requirements of small and medium-scale production of value-added fishery products. Dr. Subasinghe of INFOFISH commenced his presentation by pointing out that since most established fisheries in the Asian region showed limited prospects for further expansion better use needed to be made of the existing fisheries resources in order to satisfy the growing demand of consumers and of the fish processing industry in the region.

The presentation continued with an overview of major markets for value-added fishery products and the quality requirements for these products. Value-added products from Asia were grouped into the following categories: shrimp and shrimp products, fresh/chilled/frozen fish, cephalopods, heat sterilized products, and cured/fermented and other products.

A discussion followed on the technological quality criteria for each group of products. Special reference was made to quality requirements for aquaculture species and various types of processing for cephalopods. Dr. Subasinghe concluded his presentation by giving an overview of innovative packaging and labelling methods.

Dr. Subasinghe’s presentation was received with great interest and the discussion following his presentation focused on clarification and further information on different types of value-added fishery products and related quality requirements.

Questions were also asked and answered on capital investment and working capital requirements and costs related to quality improvement in relation to increased revenues.

Another group of interventions followed with regard to the differences in quality requirements for national, regional and export markets in Japan and outside Asia. In response to these questions it was pointed out that while differences between different markets still exist the gap with regard to the quality required for different markets was narrowing.

Dr. Ruckes continued to chair the session and the presentation was made by Professor Yu Swee Yean of Universiti Putra Malaysia (UPM).

Professor Yu commenced her presentation by pointing out that the production of fish crackers, which were locally called "keropok’ and contained a mixture of fish and flour, is an important cottage industry in Malaysia. She explained that due to the lack of technical knowledge, the products were often of poor quality with uneven expansion characteristics, dark objectionable colours and varying in shape, size and thickness.

The presentation than described new levels of technology which have been developed and could be applied to fish cracker processing. The first method evolved from technologies used in meat processing and involved the use of equipment such as bowl mixer/cutter, sausage stuffer and gravity slicer. The second method which was explained applied an extrusion process.

Professor Yu pointed out that products made by the two new methods were more acceptable than those made by the traditional method. The new production methods were also less time-consuming and labour-intensive and the products obtained were more uniform and had greatly improved expansion ratios and texture. The presentation concluded with a comparison of the investment and production costs of the traditional methods and the two new methods of making fish crackers.

During the discussion following Prof. Yu’s presentation, several questions were asked regarding the technological features of the two new production methods. Other interventions focused on investment costs and costs of production in relation to earnings.

Several participants observed that there was considerable scope to introduce the new methods for production of fish crackers also in other countries of the region and the economics of the new production methods were assessed favourably.

The Production of Surimi-based Products

Dr. Ruckes continued to chair the session and the next presentation was made by Mr. Mohd Zubir Bin Abdullah, General Manager of Majuikan SDN BHD, Malaysia.

The presenter gave an overview of the various products which can be made from surimi and of the markets at which these products were targeted. He went on to describe raw material requirements and processing methods and technologies. He concluded with information on the cost of production.

The discussion following the presentation focused on sources and costs of raw material and on profit margins. Some participants drew attention to the fact that in some countries of the region the cost of raw material for the production of surimi had increased to an extent that made profit margins very narrow.

Applications of HACCP

The presentation by Dr. Peter K. Ben Embarek of the FAO Regional Office for Asia and the Pacific, was chaired by Dr. E. Ruckes, FAO, and proceeded the working group sessions on the last day of the workshop.

In his presentation on HACCP and new import requirements from major importing countries, Dr. Ben Embarek, drew the attention of the participants to the fact that major seafood importing countries have adopted new legislation for fishery products with new requirements for domestic as well as foreign producers exporting to these markets.

It was explained that these new requirements have been put in place as the result of a combination of several recent developments. First of all, the number of seafood-borne diseases had increased and it was acknowledged that traditional seafood inspection cannot ensure safe food products and should be replaced by a more systematic and preventive system. Dr. Ben Embarek then went on to explain that the best available system to ensure the safety of fish products was the Hazard Analysis Critical Control Point (HACCP) system.

The HACCP system is primarily aiming at ensuring food safety but it can easily be extended to cover other aspects of quality such as spoilage and economic fraud. The system is based on the recognition that hazards exist at various points during handling and processing but measures can be taken to anticipate the hazards and prevent their occurrence.

The main elements of a HACCP system were then explained which are: (i) identification of potential hazards and assess the risk of occurrence, (ii) identification of critical control points (CCP) where hazards can be controlled, (iii) establishment of critical limits for the identified CCPs, (iv) establishment of a monitoring system for the CCPs, (v) corrective action when a CCP is out of control, (vi) a record-keeping system, and (vii) verification procedures for the system.

Dr. Ben Embarek then explained that in the regulations in Canada, the European Union and the United States the same requirements for domestic producers and producers of imported products are being applied. Another common feature is that responsibility for the safety of fish products is placed on the producer of the fish products. He predicted that in the coming years, several exporting countries will probably have a situation where there will be two kind of producers: those certified or having a HACCP plan in place enabling them to export to the major importing countries and those not able to export to these countries. This situation will introduce a new competition parameter between exporters of fish products. This new requirement of developing and implementing a HACCP plan for exporters should be taken into consideration when evaluating requests for credit or investment.

Concluding his presentation, Dr. Ben Embarek mentioned that the new situation creates a need for banks and financial institutions to familiarize themselves with the use of HACCP in the fish industry as a new parameter to be taken into consideration when evaluating new projects.

Following the presentation, the contents of the paper were discussed. The main points discussed were :

• Several banks and financial institutes were aware of the new requirements but often did not have the capabilities to evaluate whether these requirements were built into new project proposals.

• The cost of the introduction of HACCP at factory level was also a topic of interest and the participants enquired of the availability of documentation on this topic. They were referred to on-going work in the FAO Fish Utilization and Marketing Service (FIIU) on this topic.

• The participants expressed the need in the region for training in HACCP, quality assurance and also fish technology in the industry and also expressed the need for the financing sector to get appropriate training in these topics.

3.2.3 Country Presentations

There were four presentations from India presented at the workshop: two from financial institutions: the National Bank for Agriculture and Rural Development (NABARD) and the State Bank of India (SBI)); one from a fisheries development project, the ODA Post-Harvest Fisheries Project of the Department of International Development (DFIDF) of the UK; and one from a private company: Innovative Marine Foods (IMF) Ltd.

The presentations from India and the Maldives were chaired by Dr. Uwe Tietze, Fishery Industry Officer of FAO.

Mr. M.A. Upare, Deputy General Manager of the National Bank of Agriculture and Rural Development (NABARD), gave the first presentation from India. He started his presentation by explaining that NABARD was the major national financial institution in India, providing credit to all segments of the fishery industry and it also refinanced other financial institutions including cooperative banks. He said that NABARD prepared special investment and credit programmes for the fisheries sector and promoted the transfer of appropriate technology, research and development and efforts to improve loan recovery.

After giving an overview of the fishery industry in India and identifying the potential for future development, Mr. Upare went on to inform the workshop participants about the credit scenario for the fisheries sector in India and the various lines of credit which are available.

Mr. Upare said that in recent years, as far as credit support for value-added fishery products is concerned, the bulk of institutional credit has been provided for export oriented individual quick freezing plants and for surimi production using presently under-utilized fish species. It was pointed out that credit is also available for fisheries cooperatives . For export oriented value addition, various types of capital subsidies for the purchase of equipment is available from the Marine Products Development Authority (MPDEA) of India ranging from 10 to 50 percent of the total capital investment. Interest rates depend on the type of financial institution and on the amount of loan.

Regarding collateral requirements for financing of value added processing and marketing of fishery products as an integral part of development banking, the credit worthiness of the borrower and project viability were given more importance than traditional collateral such as immovable property.

Mr. Upare then identified the major constraints to the expansion of value addition in fisheries as lack of government incentives, lack of adequate infrastructure such as the inadequacy of shipping and transport facilities, inadequate refrigeration facilities, shortage of ice, non-availability of potable water and power shortages, as well as financial constraints.

The infrastructure constraints prevented in many cases the ensuring of quality, controlling of costs and the meeting of supply schedules. Financial constraints were mainly related to the lack of credit for working capital and packaging needs.

Regarding the opportunities for further expansion of credit support for value-added fishery products, Mr. Upare saw scope for the establishment of additional surimi production units and individual quick freezing (IQF) units. Other value-added products for which more finance could be provided in future include canned clams, canned lobster meat, and cured and pickled products which can be produced and exported by the small-scale sector.

In addition to these products, Mr. Upare drew attention to the export market for large sized perch and cat fish, filleted, glazed and individually frozen. He pointed out that there was a need to finance more packaging units catering to the needs of exporters of value-added fishery products.

As far as value-added fishery products for the domestic market are concerned, value-added products made from minced fish were mentioned such as fish fingers and cutlets. Mr. Upare saw great scope to encourage and promote these types of value-added products by extending credit particularly to small-scale women entrepreneurs.

The discussion following Mr. Upare’s presentation focused on motivation of entrepreneurs who invest in production and marketing of value-added fisheries products, loan repayment, lending procedures and collateral requirements, and on the recent failure of the brackishwater shrimp culture in India and its effect on financial institutions.

Regarding the motivation of entrepreneurs, Mr. Upare explained that NABARD, among other things, organised seminars for entrepreneurs at district level. Responding to the query on the effects of the failure of aquaculture on financial institutions, largely due to poor management practices, Mr. Upare responded that the effects were rather limited since most of the shrimp farms which were affected by diseases were insured. He also mentioned that a better monitoring of the expansion of shrimp farming in India by the concerned government authorities and also by the financing banks might have helped to reduce or avoid altogether the problems which have arisen.

As far as loan repayment, lending procedures and collateral are concerned, it was further explained that banks do not have separate statistics for the fisheries sector, and that collateral was not required for small-scale entrepreneurs when the loan amount does not exceed Rs. 25,000.

Mr. Upare’s paper is included in Appendix III of the report.

In the second presentation from India, Mr. S.V.S.M. Sastri of the State Bank of India, gave an overview of the present status of the fishing industry in India and of its prospects and constraints. He particularly highlighted the change from capture fisheries to shrimp and fish culture. He then made special references to the fish marketing and processing industries and to innovative value-added products which played a more and more important role.

With reference to the previous presentation which had covered similar aspects, Mr. Sastri focused then on the changes in India’s export trade in marine products and on the foreign and domestic demand for value-added fishery products.

Mr. Sastri concluded his presentation with an elaboration on value-added fishery products, the production of which could be expanded and financed by the SBI provided that entrepreneurs showed sufficient interest.

During the discussion following Mr. Sastri’s presentation, a question was raised as to how SBI addressed the social changes caused by the expansion of coastal aquaculture and which affected particularly the traditional coastal fishing communities.

Mr. Sastri explained that SBI had special agricultural development branches which only cater to small- and medium-scale enterprises and to the credit needs of coastal fishing communities including those for small-scale aquaculture and related to complementary/alternative employment and micro-enterprises. The major changes caused by the expansion of aquaculture which affected other coastal communities were seen as different land use patterns and changing land values.

In response to questions regarding the performance of loans for fish/shrimp processing and marketing compared to capture fisheries, Mr. Sastri replied that the former performed quite satisfactorily while many loans for capture fisheries had not performed well.

Another intervention enquired whether SBI had special schemes for artisanal fisheries. It was explained that SBI’s focus was actually on the small-scale fisheries sector and that credit was presently available for capture fisheries, freshwater shrimp culture, fish processing and marketing while the supply of credit for brackishwater shrimp culture had recently been halted because of a Supreme Court decision which no longer permitted shrimp culture in coastal areas.

After the presentations from representatives of two financial institutions from India, Mr. Venkatesh Salagrama of the ODA Post-Harvest Fisheries Project gave an overview of problems and prospects in the production and marketing of value-added fishery products on the east coast of India.

Mr. Salagrama commenced his presentation with an overview of post harvest disposal of fish in different fisheries on the east coast of India. He distinguished between the mechanized sector and the traditional sector and between high-value and low-value species the latter consisting mainly of small pelagic species or of by-catch from other fisheries.

He explained that the mechanized fishery sector on the Indian east coast is largely made up of bottom trawlers targeting shrimp for export and with a considerable by-catch of up to 80 percent. This by-catch consists mainly of low value species which had hardly been used in the past but which offer good scope in the future for value addition. This was reflected by the efforts of government agencies, NGOs and private entrepreneurs who had recently started to produce and market value-added products and had met with a very positive response from consumers and buyers.

The traditional sector consisted of plank built canoes and log rafts which carried out gillnet fishing, line fishing, seining, etc. and caught export varieties such as prawns, lobsters and cuttlefish, high value fish such as snappers, seerfish as well as low value species such as sardines, croakers, etc. Low-value species were generally marketed locally and had short marketing chains ranging from 2 to 50 km from the respective landing centre.

Traditional fish processing and marketing involved dried and smoked fish, fish pickles and other locally processed products. Mr. Salagrama identified traditional processing and value addition as the area with the greatest potential for improvements which also had the potential of benefiting a large number of fisherfolk.

The presentation continued with a description of the various fish marketing and processing systems and channels which are in operation on the east coast of India, an identification of the constraints to the expansion of value addition and a description of the ODA Post Harvest Fisheries Project’s activities with regard to the marketing of value-added fishery products. These project activities were summarized as provision of marketing information and obtaining a better understanding of marketing structure and dynamics, as appraising marketing development projects and as networking.

Mr. Salagrama concluded his presentation by discussing the prospects for expanding production and marketing of value-added fishery products in India. While he saw a good potential market for improved value-added fishery products, he also saw considerable scope for improving the incomes of small-scale fisherfolk. Mr. Salgrama highlighted the important role the development agencies could play in this process, i.e. to establish linkages between various stakeholders in order to ensure that the expansion of the production and marketing of value-added products would ultimately lead to increased incomes in traditional fishing communities.

Mr. K.P. Nair, Director (Finance) of Innovative Marine Foods Ltd. (IMFL), based in Cochin, India, presented a case study on financing of value-added products in India and evaluated the scope for expansion of the production of value- added fishery products.

At the beginning of his presentation, Mr. Nair pointed out that the survival and success of seafood companies depended on the introduction of new value-added fishery products. With this assumption, IMFL finalized in 1992 an ambitious plan to set up three seafood processing factories in major seafood landing centres in India to produce value-added products, i.e. individually quick frozen (IQF) raw and cooked shrimp, shrimp salad, sushi shrimp, IQF whole fish, fish fillets, IQF squid and cuttlefish, squid rings, seafood mix, pasteurised crab meat, semi-IQF fish and other value-added fishery products using state of the art technology in seafood processing.

Mr. Nair explained that IMFL was promoted by Amalgam Foods Ltd. in collaboration with five major seafood buyers from Japan, USA, Germany, Italy and Saudi Arabia. The implementation of the project started in 1992 with the construction of three processing plants on the west coast, east coast and at the southern end of the Indian peninsular. The company had its first full year of operation in 1995/96.

Mr. Nair continued his presentation with a breakdown of the various cost components of the project and the means of financing which included equity share capital, loans from the promoters of the project and short-term and long-term loans as well as working capital advances for export packing and export bills.

Summarizing the financial results achieved so far by the company, Mr. Nair reported a considerable net loss, mainly due to a very low capacity utilization of only 23.4 percent and to the high cost of interest the company had had to pay on its loans. The following reasons for the low capacity utilization were identified:

• raw materiel constraints due to outbreak of a disease in Indian shrimp farms and overfished marine shrimp resources
• shortage of working capital funds due to cash losses and project cost over-run
• erratic power supply
• recessionary conditions in some of the major markets.

After identifying the constraints in procurement of raw material and in production, financing and marketing the company adopted the following strategy for future operations:

• increase of share capital to accommodate the higher than expected investment costs
• long-term export advances to augment working capital
• finance is to be obtained from international sources at internationally competitive rates of interest to enable the company to compete in global markets
• sale of one plant to use proceeds for clearance of high short term liabilities
• importation of raw material to ensure high capacity utilization
• change of product mix
• introduction of alternative mechanism of post-shipment financing
• reduction of sales on credit.

Mr. Nair concluded his presentation by stressing that IMFL has a strong product base, appropriate production technology, a skilled work force and sufficient international marketing ties and that the management of the company was thus confident in improving its financial and economic performance by implementing the above strategy.

In the discussion following Mr. Nair’s presentation, several questions were asked concerning restrictions in India on taking loans from foreign financial institutions with their lower rates of interest as compared to Indian financial institutions and why IMFL had borrowed at such high rates of interest.

In response to these queries it was pointed out that there were indeed restrictions in India regarding raising foreign finance and that the company had only recently been given the authority to raise foreign currency loans.

Mr. Hamid Ahmed, Assistant Production Manager of Maldives Industrial Fisheries Company Ltd. (MIFCO) commenced his presentation by giving an overview of the fisheries sector in the Maldives where 90 percent of the fishermen are involved in traditional pole and line fishing for skipjack tuna.

He explained that tuna is collected from the fishing boats on a daily basis with the help of collector vessels operated by MIFCO. The company has the monopoly in tuna export and tuna is canned for export, mainly to the UK, exported as frozen tuna, mainly to Thailand and Japan, or consumed fresh locally.

As far as the production of new value-added fishery products is concerned, Mr. Ahmed described a presently on-going project in the Maldives, implemented by his company with support from FAO, which aims at utilizing waste and by-products from the canning of skipjack for the production of tuna sausages to be consumed locally and possibly to be exported to neighbouring countries.

Mr. Hamed pointed out that so far by-products from the canning of tuna were only used for fish meal. He explained that the project aimed to make an economically and nutritionally more advantageous and beneficial use of the raw material for direct human consumption.

Mr. Hamed’s presentation was received with great interest and questions were asked with regard to the fishing industry in the Maldives and to the system of collector vessels.

Sri Lanka’s presentation was given by Mr. T.S. Ranasinghe, Assistant General Manager of the Bank of Ceylon. The presentation was chaired by Mr. B. Shrestha of APRACA Consultancy Services (ACS).

Mr. Ramasinghe commenced his presentation by giving an overview of the fisheries sector in Sri Lanka and its role in the national economy. Regarding the credit provided to the fisheries sector by the Bank of Ceylon, Mr. Ramasinghe drew the attention of the workshop participants to the investment plan of the government of Sri Lanka for the period 1995 to 1999 in which investments in support of value-added fishery products are given high priority.

It was explained that half of the investments in the fisheries sector are being undertaken by the private sector while the other half are being supported by government and by government owned financial institutions such as the Bank of Ceylon which provides credit for fish marketing, processing and storage including ice making equipment, storage and freezing facilities, fish transport vehicles and fish processing equipment.

The discussion following Mr. Ramasinghe’s presentation centred on financing of ice-plants in Sri Lanka and their capacity utilization and on interest rates.

There were two presentations from Bangladesh: one from the central bank of Bangladesh, i.e. Bangladesh Bank, and the other from the Bangladesh Fisheries Development Corporation (BFDC). Mr. B. Shrestha of ACS chaired the session.

Mr. Buzruch Meher, General Manager of Agricultural Credit Department, Bangladesh Bank, gave an overview of the fisheries sector in Bangladesh, the regulatory and institutional framework as well as of the national policies in Bangladesh for marketing and trade. He explained that value-added fishery products were almost exclusively produced for export and consisted of frozen shrimp and fish, salted and dried fish, shark fins and fish maws, turtles and crabs.

The major importing countries and regions of frozen sea food and other value-added fishery products from Bangladesh were the USA, Japan, the European Union, the Middle East, the UK and other European countries. While the volume and value of value-added fishery products from Bangladesh had considerably increased over the years, Mr. Meher considered the potential for further growth as vast.

He then gave an overview of the various fisheries development projects which were presently being implemented in Bangladesh and which would eventually increase exports of value-added fishery products.

With regard to the role of the banking system in the development and expansion of value-added fisheries products, Mr. Meher described the role of financial institutions as crucial and pointed out that the existing nationalised banks, specialised agricultural banks and some of the private sector banks as well as Grameen Bank and NGOs in the semi-formal sector were already actively participating in financing the production and marketing of value-added fishery products. Non-banking financial institutions and leasing companies were also playing an active role.

An identification of the constraints in financing the fisheries sector followed. These included, among other things:

• lack of clear government policies for the management of marine fisheries resources and for utilization and leasing of open water bodies which was not conducive to medium- and long-term financing
• frequent natural calamities and absence of appropriate insurance programmes for the fisheries sector
• lack of experienced and skilled entrepreneurs in the field of fish processing and marketing
• lack of adequate infrastructure required for fish processing and marketing.

Mr. Meher continued his presentation by prioritizing the areas where institutional finance would have the greatest impact in terms of expanding production and marketing of value-added fishery products. These areas included both high-value products such as fresh, frozen and adequately packed shrimp and high value fish species as well as dried, salted and smoked fishery products produced in the small-scale and artisanal fishery sector.

It was strongly suggested that banks should enhance/acquire technical expertise in the field of advanced fish culture/production, marketing and processing and to this end recruit technically qualified staff so that they could provide advice to fishery entrepreneurs and also actively participate in fisheries ventures and enterprises rather than providing credit only. Mr. Meher ended his presentation by suggesting a number of specific measures to be introduced by financial institutions and concerned government agencies with a view to expanding production and export of value-added fishery products in Bangladesh.

A second presentation from Bangladesh was made by Mr. Nurun Nabi Sarker, Manager of Bangladesh Fisheries Development Corporation (BFDC) pilot project. Supplementing the information provided by Mr. Meher, Mr. Sarker gave a detailed account of inland and marine capture and culture fisheries of Bangladesh as well as of the fish processing industry and the export sector.

After providing an overview of presently produced value-added fishery products in Bangladesh, Mr. Sarker discussed the prospects for introducing new products and their potential markets. Among other things, Mr. Sarker mentioned products such as fish fingers, fish balls and fish cutlets which are presently produced by BFDC, enjoyed a good domestic demand and could possibly be exported.

He also proposed that high-value fish species, squid, cuttle fish and other species which were presently exported in IQF form or block frozen, could fetch a much higher sum if exported in fillet/steak form and in modified atmospheric packing (MAP) to markets in the USA, Japan, EEC and the Middle East. The prospects for establishing a fish canning industry in Bangladesh were also discussed.

Mr. Sarker then identified major bottlenecks to the expansion of the production of value-added fishery products in Bangladesh which included lack of technical know-how and skilled manpower, a negative market image and the lack of funds for investment.

The presentation was concluded by case studies on exports of value-added fisheries products from Bangladesh which suggested that exporters made considerable profits.

In the discussion following the two presentations from Bangladesh it was confirmed that institutional credit for value-added fish processing and marketing in Bangladesh was available from the nationalised banks and that the government had also introduced supportive measures such as credit guarantee schemes and was beginning to introduce insurance programmes to reduce the risk for entrepreneurs and for financing institutions.

Reference was also made to the recent decline of shrimp culture production in Bangladesh, due to the outbreak of diseases, and it was explained that the government was taking measures to regulate the shrimp culture industry more strictly and to properly train shrimp culturists with a view to ensuring sustainability and environmental feasibility of the shrimp culture industry in Bangladesh.

Other interventions focused on the interest rate structure, credit guarantees, insurance programmes and incentives to encourage financial institutions to expand their lending in support of fisheries development and value-added fisheries products. In response to these queries it was explained that the central bank of Bangladesh (Bangladesh Bank) provided funds to banks for on-lending at reduced rates of interest.

It was also explained that there was an insurance programme for semi-intensive shrimp culture which, however, did not cover the outbreak of diseases. Credit guarantee schemes only covered credit programmes for small-scale entrepreneurs.

The presentation from Indonesia was given by Dr. Putu Sumardika of the Ministry of Agriculture. Mr. Shrestha of ACS continued to chair the session.

Dr. Sumardika gave an overview of institutional credit for the fisheries sector in Indonesia which was mainly provided under the small enterprise credit (SEC) scheme. It was explained that under this scheme public sector banks in Indonesia are supposed to lend at least 20 percent of their loan portfolio to small enterprises. Credit provided is not linked to capital subsidies and the upper loan ceiling is Rupiah 350 million.

Credit for small-scale fisheries is also available through a government agency (KKPA) to members of primary cooperatives and the loan ceiling is Rupiah 50 million. Mr. Sumardika explained that fishermen had received institutional credit mainly through the so called nucleus estate scheme under which fish/shrimp culturist and fishermen had been linked to commercial enterprises which are involved in processing, marketing and exportation of fish and shrimps. Interest rates on loans were subsidised for members of fishermen cooperatives at rates 6 percent below commercial rates of interest. He concluded that in the period 1994 to 1996, approximately 8,000 fishermen had been financed under the scheme.

The presentation from Nepal by given jointly by Mr. Rhalik P. Sharma and Mr. Purushottam Shrestha from the Agricultural Development Bank of Nepal (ADB/N). Mr. Shrestha of ACS chaired the session.

In their introduction, the presenters drew the attention of the workshop participants to the fact that Nepal was a landlocked country and that fisheries was limited to inland capture fisheries and aquaculture. They then described how during the last two or three decades, an aquaculture programme had been launched in Nepal with a view to utilising the various types of water resources in the country. It was pointed out that compared to other countries in Asia, aquaculture in Nepal was a rather recent phenomenon.

After describing the present status of capture fisheries and aquaculture in Nepal, the presenters explained the fisheries development strategies of the Nepalese government which included the promotion of value-added fisheries products such as drying, smoking fillet-making and canning of fish, etc.

The presenters then gave an overview of fisheries credit disbursements during the first and second aquaculture development projects from 1981 to 1994. The projects also supported the establishment of fish marketing facilities in the private sector of Nepal.

Regarding the status of production and marketing of value-added fishery products, it was pointed out that most fish was sold fresh or traditionally dried, salted or smoked and that in Nepal value addition was very much in its infant stage with one single small-scale processing plant in Pokhara which was producing and marketing value-added fishery products.

The speakers concluded their presentation with recommendations as to how the production and marketing of value-added fishery products and financial support to it could be enhanced. The main recommendations were:

• facilitate wholesale markets for fish/fish collection in bulk
• support the formation of fish farmer associations and promotion of their role in fish marketing and processing
• improvement of fisheries extension services and strengthening of their role in fish marketing and processing
• provision of adequate fish marketing infrastructure for major fish production areas
• involvement of other Nepalese banks than ADB/N in lending to fisheries sector
• preparation of special lending programmes for fish processing and value-added fishery products.

The discussion following the presentation focused on the technical features of pond and cage culture in Nepal and on the policies and procedures applied by ADB/N in lending for aquaculture in Nepal.

Mr. Luck Wajananawat from the Bank for Agriculture and Agricultural Cooperatives (BAAC) gave the presentation from Thailand. Mr. Shrestha of ACS chaired the session.

Mr. Wajananawat presented a case study on the financing by BAAC of fermented fish production in Thailand. The presentation commenced with a description of the different types of fermented fish products in Thailand, the production processes, the nutritional characteristics of the products, investment and production expenses, yields, prices, revenues and an analysis of fund flows and financial returns. It was shown that the production of fermented fish products in Thailand had very high returns of investments, i.e. rates of return which were over 100 percent.

The presentation continued by describing marketing channels and by identifying the main factors which affect the economic success of the production, i.e. continuous raw material supply, availability of adequately skilled labour, plant location and appropriate production technologies and packaging.

In the discussion following Mr. Wajananawat’s presentation, questions were asked regarding BAAC’s role in the financing of aquaculture in Thailand. In response it was explained that while BAAC had provided a substantial amount of finance for the development of aquaculture in Thailand, it was presently not giving loans to new entrepreneurs since it felt that the sector had shown sufficient growth in relation to the available natural resources. Instead, BAAC was looking into new areas which had scope for expansion and which provided income and employment to small producers in rural areas and contributed to meeting nutritional needs such as value-added fishery products produced by the small-scale sector.

Mr. Wajananawat’s paper is included in the Appendix III to the report.

Mr. Eshah B. Jusoh, Branch Manager of the Agricultural Bank of Malaysia (BPM) gave the presentation for Malaysia. Mr. Shrestha of ACS chaired the session.

Mr. Jusoh started his presentation by highlighting the economic importance of the fisheries sector in Malaysia, accounting for 1.2 percent of the employment in the country, particularly in rural areas, and contributing 1.5 percent to the Gross Domestic Product of Malaysia.

An overview of the objectives and activities of BMP followed. Loans to the fisheries sector are provided both under the Special Integrated Agricultural Loan Programme (SPKP), which is a concessionary lending programme, and under a commercial lending programme.

Loans for production and marketing of value-added fishery products are provided under both programmes depending on the size of loan, target group and scale of operation.

In the discussion following the presentation, it was asked whether there were any schemes operational in Malaysia for promotion of exports of fishery products. Mr. Jusoh replied that there were export promotion schemes for the commercial sector and that there were also schemes for small-scale fishermen and fish culturists being implemented by the Fisheries Development Authority of Malaysia (LKIM) in cooperation with fishermen’s associations.

Regarding lending to fishermen’s associations, it was asked how banks and associations co-operated. It was explained that banks provided advice on business management accounting and marketing in addition to providing credit while the associations assisted in loan monitoring of loan use and loan recovery.

Mr. Antonio T. Hernandez, Senior Vice President of the Land Bank of the Philippines (LBP) gave a presentation for the Philippines. Mr. Shrestha of ACS chaired the session.

After an overview of the fishery industry of the Philippines and the Fisheries Sector Financing Programme of Landbank, Mr. Hernandez identified the major problems and constraints in lending to the fisheries sector in the areas of associations/organizations of fishers, fishery production, fish marketing and processing.

He then explained the integrated fishery lending programme which had been designed by Landbank in order to overcome the above the constraints. Its objectives were to sustain the viability of fishery cooperatives through technical and credit support services, to alleviate poverty in coastal communities through provision of credit for value-added products and marketing services and to reduce pressure on coastal fisheries resources through the development and financing of alternative livelihood projects.

As far as the conceptual framework was concerned, Mr. Hernandez identified the programme’s principles as providing support to resource regeneration, internal resource mobilization, market orientation and forward-backward integration. The programme components were described as institutional development, enterprise development and technology promotion and advancement.

The presentation continued with an identification of development opportunities and strategies in fish processing with reference to technology advancements (separately for large-scale fish processing and small-scale fish processing), technical and advisory services, quality standards and research-based undertakings.

This was followed by a description of the organisational arrangements of the integrated fishery lending framework followed by the Land Bank of the Philippines which also includes joint venture arrangements. The presentation concluded with an overview of the fishery industry in the Philippines which envisaged a continuing rapid demand growth for fish and fishery products, the expansion and modernization of purse seine and long line fleets in distant waters, the emergence of holistic management, rehabilitation and enhancement of fisheries resources and a shift in the species traded and consumed towards low-priced and presently less favoured species.

In the discussion following Mr. Hanandez’s presentation, the concept of a "total area development approach" followed by the Landbank of the Philippines was further clarified. Other interventions focused on the need to set up cold chains appropriate for the needs of the small-scale fisheries sector which could facilitate the production of value-added fishery products in the small-scale fisheries sector.

Other points of discussion were the rehabilitation of fisheries associations and cooperatives and the enhancement of their economic activities, including the production and marketing of value-added fishery products, and the identification and implementation of alternative livelihood projects in artisanal fishing communities in the Philippines.

Vietnam was represented by Dr. Vu Van Trieu and Dr. Thai Thanh Duong of the Ministry of Fisheries who made a joint presentation. Mr. Shrestha of ACS continued to chair the session.

Dr. Vu Van Trieu and Dr. Thai Thanh Duong gave a brief overview of the fishery industry of Vietnam which had experienced rapid growth in terms of quantity and quality of capture fisheries and culture fisheries production through the eighties and nineties. They explained that 20 to 25 percent of the total production was exported.

Regarding the production and export of value-added fishery products, it was pointed out that in the context of macro-economic liberalization and increased foreign cooperation the production and export of value-added fishery products had rapidly increased from 1993 onwards. While in 1993 the share of value-added products of all exports of fishery products from Vietnam in terms of value was 12.8 percent, this had increased to 17.5 percent in 1997.

Over the same time period, domestic consumption of value-added products in the form of canned and other processed fish products had increased, too. For the year 2005, the national plan for Vietnam envisaged that value-added fishery products would account in value terms for 25 percent of the total fishery production of Vietnam.

The discussion following the presentation focused mainly on the factors responsible for the increase in exports of value-added fishery products from Vietnam which was largely explained by joint ventures with foreign partners in the commercial fishery sector and the related inflow of technical know-how, marketing linkages and capital.

The last country presentation was made by Mr. Ali A. Zaman Poor of the Agricultural Bank of Iran. Mr. Shrestha of ACS continued to chair the session.

Mr. Poor presented a case study of the economic failure of the canning industry in the Busher province of Iran which was partly due to a sudden decline in the availability of raw material, to plant overcapacity, to overfishing, to a ban on the operation of trawl nets and to certain political and macro-economic factors.

3.2.4 Working Group Sessions

Following the country paper presentations, the participants formed country-specific working groups and formulated follow-up proposals with a view to expanding production and marketing of value-added fishery products in their respective countries.

Dr. U. Tietze of FAO and Dr. S. Subasinghe of INFOFISH summarized the proceedings of the workshop with particular reference to pilot projects for the production and marketing of value-added products and to supporting credit schemes and also suggested how to proceed in the working groups and how to present the proposals in the concluding plenary session.

The proposals were then presented, discussed and adopted in the concluding plenary session of the workshop. Brief summaries of the proposals are given below. While in some cases, governments might request technical assistance from FAO or INFOFISH, it is envisaged that most of the proposals will be implemented by the concerned national institutions in cooperation with the private sector.

The proposed follow-up activities at the national level are summarized below as presented by the institutions and organizations which participated in the workshop.

Action programme to enhance production and marketing of value-added fishery products in Iran:

(a) Promotion of value-added shrimp products. Production trials, feasibility studies and training courses in southern provinces of Iran (Bushehr Hormozgan, Baluchestan) at selected processing plants. Agricultural Bank of the Islamic Republic of Iran (ADBI) to provide capital investment and working capital credit.

(b) Processing and marketing of cultured crabs in coastal provinces and cultured mussels in Persian Gulf Islands (Kharg., Kish, Lavan). Production trials and feasibility studies. ADBI to provide capital investment and working capital credit.

(c) Introduction of HACCP in the fish processing sector of Iran. Assistance to the canning industry and the shrimp processing industry in application of HACCP and in reduction of wastage in fish handling and transportation. ADBI to provide credit for necessary investments.

(d) Marketing studies and promotion of live marketing/export of lobster.

(e) Production and marketing of smoked fish and related feasibility and marketing studies in northern province (Gilan-Mazandaran).

(a) Implementation of pilot activities: public and private sector fishery enterprises and ADBI

(b) Technical assistance from INFOFISH, ACS and FAO.

Action programme to enhance of production and marketing of value-added fishery products in Bangladesh.

(a) Medium-scale production of shrimp value-added products, i.e. IQF and cooked and peeled shrimps for export

(b) Medium-scale production of value-added squid, cuttlefish, sole and crabs for export

(c) Small-scale production of value-added fish products (fillet/steak) of different fish species for export

(d) Small-scale production of value-added fish products like fish balls, fish crackers, fish fingers, fish cakes, etc. for domestic market

(e) Large-scale canning of hilsa, tuna, Indian mackerel, etc. both for export and for the domestic market

(f) Small-scale production of fish meal production with small boiler plants (capacity 500-1,000 kg/day).

(a) Implementation of pilot and commercial activities: Bangladesh Fisheries Development Corporation/Ministry of Fisheries; nationalised financial institutions/banks and private banks with support from Bangladesh Bank and Bangladesh Frozen Food Exporters Association (private sector).

(b) Technical assistance for feasibility studies and manpower development in the form of field training and workshops: INFOFISH.

Action programme to enhance the production and marketing of value-added fishery products in India.

Feasibility study of marketing of small-scale produced value-added fish products in urban markets of major Indian cities. Products: fish fillets, IQF fish products, breaded fish products, dried fish products, fish/shrimp pickle. Identification of suitable packaging and presentation methods and materials.

(a) Implementation of feasibility study and pilot activities: Central Institute of Fishery Technology (CIFT), Marine Products Export Development Agency (MPEDA), National Bank Agriculture and Rural Development (NABARD), State Bank of India (SBI), DFID Post-Harvest Fisheries Project, private entrepreneurs

(b) Technical Assistance: FAO, INFOFISH and APRACA Consultancy Services.

Promotion of value-added fishery products in Nepal.

(a) Procurement of fresh fish (mainly carp species) at producer centres (pond and cage culture) and distribution and marketing of fresh fish in urban centres in Nepal

(b) Small-scale production and marketing of fish crackers and fish balls in urban centres of Nepal.

(a) Implementation and funding of activities:

Business activities will be implemented by private entrepreneurs in cooperation with fish farmer associations. Investment and working capital credit will be provided by ADB/N. The Agricultural Marketing Division of the Ministry of Agriculture will provide or facility the renting/procurement of marketing facilities/sales outlets in suitable urban centres of Nepal.

(b) Technical assistance and training:the Fishery Development Division will provide technical assistance and training. Technical assistance would also be appreciated from INFOFISH, FAO and APRACA Consultancy Services in the following areas:

• feasibility studies; identification of appropriate fish transportation/handling methods and techniques and marketing promotion strategies

• hands-on training in fish handling/preservation.

Feasibilty study and pilot production of fish sausages and other minced fish products from by-products of tuna canning, to be marketed initially in the domestic markets to restaurants, hotels, supermarkets and later in neighbouring countries of the region.

(a) MIFCO with funding/credit support from the Bank of Maldives

(b) Technical assistance of FAO, APRACA Consultancy Services and INFOFISH in the areas of feasibility study, identification of suitable production technologies and training.

(a) Value-added shrimp products:feasibility study, pilot production, packaging and marketing.

(b) Value-added squid/cuttlefish and crab products: feasibility study, pilot production, packaging and marketing.

(c) Application of HACCP in fish and shrimp processing sector.

(d) Feasibility study, pilot production and marketing of improved dried/smoked fish/tuna.

(e) Feasibility study, pilot production and export of sashimi tuna export.

(a) Production and marketing activities: private enterprises with funding support from Bank of Ceylon, National Development Bank and Central Bank of Sri Lanka.

(b) Technical assistance in the areas of feasibility study, production technologies and training: INFOFISH, Ministry of Fisheries of Sri Lanka, ADB Fisheries Project, Export Development Board of Sri Lanka, District Secretariats of Fisheries in Sri Lanka, Entrepreneurs - Development Center of Bank of Ceylon, FAO, APRACA.

(a) Identification of small- and medium-scale innovative low cost production technologies and methods for value-added fishery products and replacement of those presently used production methods and technologies which are not cost-efficient.

(b) Identification and introduction of efficient and directly consumer centred/oriented marketing methods for both domestic and export markets.

Agriculture Bank of Vietnam, Ministry of Finance, Ministry of Fisheries, provincial departments of fisheries fish processing plants.

Consultancies, training courses, workshops, seminars to be organised by INFOFISH, FAO.

Proposed activities and agencies institutions involved:

(a) Improvement of fish handling on board fishing vessels with a view to improving the value of the product and to increasing the income of fishermen. Proposed activities include feasibility studies and surveys, workshops and training courses, preparation of guidelines, preparation of project proposals for funding, negotiation and dialogue between relevant agencies, i.e. Directorate General of Fisheries, banks, fishermen’s associations, traders, etc.. Activity to be coordinated by APRACA Consultancy Services (ACS) and Directorate General of Fisheries.

(b) Involvement of fisherwomen groups and cooperatives (KUB Wanita Nelayan) in production and marketing of value-added fishery products with a view to improving the standard of living, employment and income of rural women in fishing villages. Proposed activities include surveys/studies. training, seminars, workshops and study visit as well as various value-added fishery production and marketing activities. The activity to be coordinated by ACS, NGOs, Indonesian banks and the Directorate General of Fisheries.

(a) Small-scale production of fermented fish products:

Product: Fermented fish

Raw materials: Fish/salt/carbohydrate

Process: Fish are de-scaled, gutted and mixed with salt and packed tightly into jars, kept for a period ranging from two weeks to several months

Fish are then removed from the jars, usually washed and allowed to drain before being mixed with ground roasted rice or fine rice bran. The mixture is repackaged into the jars and left for a further period of about six months

Usage: Side dish or condiment

Shelf-life: 1-3 years

Market: Local market, with possible improvement in production process and packaging to attract export market

Scale of enterprise: Small/medium-scale.

(b) Salted/dried fish or smoked fish

Product: Salted/dried fish

Raw Material: Fish/salt

Process: Fish are de-scaled, gutted and soaked or mixed with salt, kept for a period of 1-4 days. Then, salted fish is dried (sun) for 2-3 days. In case of smoked fish, fish is smoked for a period of 1½ hours at 50-70º C

Usage: Side dish or condiment

Market: Local market, with possible improvement in packaging to attract export market

Scale of enterprise: Small/medium-scale.

(a) Implementation of activities:

Bank for Agriculture and Agricultural Cooperatives (BAAC), Department of Fisheries (DOF). Department of Agricultural Extension (DOAE). Cooperative Promotion Department (CPD).

(b) Technical assistance:

BAAC requests technical assistance for executing credit/value-added fishery programme as follows:

• technical experts in credit/marketing/cooperatives and in value-added fishery production.
• training of the programme beneficiary.
• monitoring and evaluation.
• workshops and seminars.
• project’s office equipment, e.g. vehicles, mico-computers, etc.

(a) Assistance to existing small-scale entrepreneurs in improved production of value-added fishery products for domestic market:

• dried products (fish cracker, anchovies, squid, salted-dried fish).
• surimi-based products (fish balls, fish cake).
• fermented products (fish sauce-budu, shrimp paste-belacan, fermented shrimp-cincaluk).
• fresh/chilled fish.

(b) Executing agencies and technical assistance:

Bank Pertanian Malaysia to be responsible for credit/investment support; Department of Fisheries of Malaysia, Universiti Putra Malaysia and Malaysian Agriculture Research & Development Institute (MARDI) to be responsible for technical inputs and for training; and Fisheries Development Authority (LKIM) to assist in marketing.