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1 Contribution, role and importance of small-scale fisheries in poverty alleviation and food security

1.1 Small-scale fisheries and poverty alleviation

1.1.1 Contribution of small-scale fisheries to economic growth at the national level Foreign exchange

Small-scale fisheries can make significant contributions to national economies through the generation of foreign exchange derived from international trade. International trade in fish and fishery products has grown rapidly over the last twenty years. Export values have risen from US$ 15 billion in 1980 to US$ 56 billion in 2001. In the same period developing countries' share of total exports has risen from 40 percent to 50percent, with net receipts (i.e. deducting their imports from the total value of their exports) from fish trade by developing countries increasing from less than US$ 4 billion to almost US$ 18 billion. Small-scale fisheries are playing an increasingly important role in the fish exports of many developing countries.13 Multiplier/GDP effects

Income multiplier effects14 can potentially “trickle up” to the national economy ensuring that small-scale fisheries can support national economic growth through contributions to GDP. The contribution made by the fisheries sector to GDP typically ranges from around 0.5–2.5 percent, but may be as much as 7 percent in some countries, such as Senegal, where fisheries are a key economic sector compared to other sectors in the national economy. However, indirect and induced multiplier effects15 of small-scale fishing activity are generally not disaggregated at national level and are often difficult to estimate. Tax generation

Taxes provide the state with an opportunity to assist both poverty reduction and poverty prevention initiatives. Taxes made available to national treasuries can be spent on re-distributive mechanisms aimed at targeted poverty prevention or on generic social support. And they might also be used to invest in, and provide support for, infrastructure and services that are vital for economic development, but which would be unlikely to be supplied by the private sector - examples include the construction of transport infrastructure such as roads to facilitate access to markets, and the provision of education and health care facilities. Taxes, of course, can also be used to support sector-specific aid and development programmes, and recurrent budgets (e.g. in the fisheries sector), which might contribute to both poverty prevention and poverty reduction.

Small-scale fisheries can make national-level contributions to economic growth through the generation of a wide range of taxes. This is particularly the case in some countries where (i) fish landings tend to be concentrated at a limited number of sites where it is easy to collect taxes and (ii) where the decentralization process is offering opportunities to local governments to collect revenues. As fish is a very visible product, its trade is easily taxed.

However, in other developing countries collection of taxes from small-scale fisheries is not well-established due to the organizational difficulties of tax collection, and the inability or reluctance of small-scale operators to keep sufficient records on which tax levels can be calculated or estimated, or on the level of poverty of fishing communities. This characteristic, which is not specific to the small-scale fisheries, is exacerbated, however, in this specific subsector by (i) the frequent geographical remoteness of the area where fishing communities or camps are established, and (ii) the high degree of informality in capture fisheries and in related small-scale trading and processing activities.

1.1.2 Contribution of small-scale fisheries to local economies

Wealth generated by individuals, households or small enterprises can make significant contributions to local economies through income and employment multiplier effects. This is especially the case in fisheries because of the “cash crop” nature of the harvest.16 Fish may be one of the few products in some rural economies that can generate cash to spur and stimulate demand, because other food products may be more generally bartered or consumed within the household.

As well as the direct impacts related to sales, and to income and employment effects on the producers themselves, which result from changes in the demand or production of fish products, there are indirect impacts “upstream” and “downstream” of the production activity that occur through the commodity/supply chain. “Upstream” activities are those activities supplying inputs to the fishing operation. Typical inputs for small-scale capture fisheries include: investment costs in vessels, engines and gear; operational costs of fuel, ice, food, bait; labour costs; financial services; and maintenance costs. “Downstream” activities are those following the harvesting of product, which themselves require inputs. Some examples of the inputs required are: investment in design, construction and equipping, processing and marketing facilities; labour; transport of fish from landing sites and to markets; financial services; variable costs such as ice, knives, wood for smoking, salt for drying, packaging materials and fish boxes; and maintenance costs. Induced impacts are also brought out in the form of sales, income and employment effects from the changed levels of income and expenditure throughout the local economy as a result of direct and indirect impacts (e.g. fishing crew may use their earnings to purchase groceries or household items).

Taking the upstream and downstream indirect activities together, and considering the induced impacts, one can easily imagine how small-scale fishing activities can become the main driver of poverty reduction, particularly in rural locations, with a web of businesses and individuals generating sales, income and employment as a result of the multiplier effects of fishing activity. The impacts on poverty of these upstream and downstream activities may not be the same for men and women, depending on how access to resources and control over infrastructure and services are gendered.

Small-scale fisheries may also contribute taxes at the local level, which can subsequently be used for local economic development, including poverty alleviation strategies.

1.1.3 Contribution of small-scale fisheries to household poverty alleviation Small-scale fisheries as a central element in livelihood strategies

Worldwide about 38 million people are estimated to be fishers and fish-farmers, about 95 percent (36 million) of whom are from Africa, Asia and Latin America.17 Of these around 68 percent (26 million) are estimated to be involved in marine and inland small-scale capture fisheries (ibid.). Assuming a 1:3 ratio for employment in direct upstream and downstream activities, over 78 million people depend on small-scale fishing and directly related activities (processing, trading, ancillary services, etc.) for their livelihoods in developing countries. If on average there are two additional dependents for each job, then it can be estimated that there would be some 234 million people are dependent on fisheries in developing countries.

Not included in these estimates, however, are the other hundreds of millions of people who are engaged in temporary fishing activities in marine areas and, more typically, in rivers, creeks, small lakes and reservoirs, seasonal or temporary ponds, wetland and floodplains.18 In these cases, fishing is not a full-time occupation but represents one component of multi-activity livelihood strategies developed by individuals and households. Within these strategies, fishing may appear amongst activities involving low human and financial capital, and undertaken in a rather occasional manner; or may represent a more prominent - but still seasonal -activity strongly integrated into the annual round of livelihood activities. When fishing fits within a flexible matrix of various activities that constitute the basis of a diversified livelihood strategy upon which households rely, it can help to (i) spread risks between various economic activities in an uncertain environment and therefore reduce vulnerability, (ii) create a synergy between the inputs and outputs of these activities and thereby enhance capital accumulation and income opportunities, and (iii) generate cash when other household activities offer little potential for doing so. Fishing as a secondary or complementary activity can thus be essential for rural households both in terms of income and food security. Fishing (and fish-trading) as a safety-net activity for the poor

Although small-scale fisheries may contribute to poverty reduction at the household level, it should be recognized that at the present time the most important contribution of small-scale fisheries to poverty alleviation19 is probably through their role in poverty prevention. Indeed, experience suggests that for the large majority of households involved in fishing activities (full-time, temporary or occasional fishers) in developing countries, fishing and related activities have not generated high economic returns but instead have helped them to sustain their livelihoods and have prevented them from falling deeper into deprivation.

In situations of economically or institutionally restricted access to other capital (e.g. financial capital such as credit) or production factors (such as private land) the relatively easy and free access to fishing grounds allows poor people to rely more heavily on the local commons' resources to obtain the goods and services they need to sustain their livelihoods, or to gain access to paid employment. Inland fisheries are particularly important in this context. This safety-net dimension of fisheries is of greater importance and relevance to poor and marginalized households - generally those with limited access to land and other resources.

Although these poverty prevention mechanisms are perhaps less attractive from a purely economic point of view - in the sense that no significant surplus rent is generated by the activities - the role of small-scale fisheries as a livelihood support and coping mechanism for the poor is crucial from a social point of view, especially in areas where alternative employment may be scarce and social security programmes either minimal or non-existent. In these areas fisheries can play a critical role as a “welfare” (or redistributive) system, which would otherwise have to be provided through other forms of social support by local or central government (e.g. through “food for work” or unemployment benefit programmes).

Small-scale fisheries can also provide a critical safety net for vulnerable households (even those which were not previously poor) when they face a sudden decline in their income. This can happen, for example, when the head of a household loses his or her job; or if farm crops fail; or, on a larger scale, when the local or even national economy deteriorates. Recurrent civil wars or military conflicts, population displacement, and natural disasters also create circumstances where those affected turn to fisheries as additional or alternative sources of income, food, or employment, especially given the open-access nature, or poor management, of many fish resources.

The reliance on fisheries to provide income for the poorest not only concerns fisheries activities per se , but applies also to processing and trading activities. This aspect adds an important gender dimension to the discussion, given that women are usually the main participants in these related sectors.

From a policy point of view and, in particular, from a poverty prevention point of view, it is important to realize that open-access is the key mechanism which permits the “safety valve” function of fisheries to operate and allows people to engage, temporarily or permanently, in the sector. This raises important questions concerning the trade-offs that may need to be made if one wishes to maintain the capacity of small-scale fisheries to play their safety-net role (poverty prevention), while at the same time trying to restrict (or at least control) access to these resources for sustainability reasons and to increase their wealth generating potential (poverty reduction).

1.2 Small-scale fisheries and food security

1.2.1 Nutritional contribution of fish to food security

Nutritionally, fish is often presented as an important source of protein , especially where other sources of animal protein are scarce or expensive. FAO (2002) has recently estimated that fish provides about 19 percent of the protein intake in developing countries. This figure, however, represents an average at a global level and does not reflect the very large heterogeneity at the national or, even more importantly, at the local level. The share of fish in animal protein consumption can for instance exceed 25 percent in many poor countries and reach 90 percent in small-island states and isolated parts of coastal or inland areas.

Fish makes a minor contribution to calorie provision. Fish offers up to 180 calories per capita per day, but reaches such levels only in a few countries where there is a lack of alternative locally produced protein or where a preference for fish has been developed and maintained. More generally on a national basis, fish provides an average of 20 to 30 calories per day.

In low-income countries, staples such as rice, wheat, maize and cassava make up the bulk of the food consumed by people, supplying the majority of energy and nutrients. However there are some essential micro-nutrients which are not found in these staples or found only in small quantities - for example: iron, iodine, zinc, calcium, vitamin A and vitamin C. These nutrients must be supplied by other foods such as fish or vegetables. Fish is particularly rich in these micro-nutrients. Fish are also an important source of fatty acids that are necessary for the development of the brain and body. The importance of fish as a crucial element in the diet of a population, therefore, is now widely recognized, especially in the diets of young children, infants and pregnant women.

1.2.2 The contribution of small-scale fisheries to world fish supply and the impact on fish food security

At the global level, consumption of fish as food has doubled since 1973 and the developing world has been responsible for over 90 percent of this growth, much of it from small-scale fisheries, especially small-scale aquaculture but also freshwater capture fisheries. Fifty percent of all food-fish originates from small-scale fisheries, and almost all fish from small-scale fisheries is used for food. In contrast, a substantial percentage of the catch from industrial fisheries tends to be used for animal feed and other products and not for direct human consumption.

However, since the late 1980s, population growth (outside China) has outpaced the growth of total food fish supply, resulting in a decrease in per capita fish supply from 14.6 kg in 1987 to 13.9 kg in 2001.20 Nevertheless, the growth of fish consumption in poorer countries has increased rapidly in recent decades.21 In particular, the consumption of freshwater fish has grown substantially, primarily in East Asia. Even if China is excluded, per capita supply in Low Income Food Deficit Countries (LIFDCs) has increased (admittedly from a lower base than the global average) from 5.0 to 8.3 kg since 1960 - an annual growth rate of 1.3 percent.22

1.2.3 Contribution of small-scale fisheries to food security at national level: the issue of trade

Although very little research has been done to identify the different mechanisms that link small-scale fisheries to national food security, the productive capacity of a country to exploit its own small-scale fisheries resources is not necessarily a sufficient condition to ensure the effective contribution of fish to national food security. Consumption rates in some countries may be low due to cultural reasons, and in others large numbers of the poor may have insufficient assets to purchase or barter fish. Changes in global demand and supply mentioned above have also combined to result in significant increases in trade, driven by exports and imports from, and to, developing countries. Intra-regional trade between developing countries is expected to rise further in the coming years.23

If one focuses just on the direct contribution of fish to food security, greater exports than imports of fish and fish products can potentially mean less availability of fish for national consumption. However, the relationship between the balance of trade and food security is more complex than this due to the indirect contribution of exports both through resulting wages and employment, and through the foreign exchange earned at the national level that can be used for imports. There is also the need to consider food security for both producers and consumers .

With respect to the ability to import food, exports of high value fish species can enable imports of low value fish species and other food types. Analysis of the food trade for instance shows that in the year 2000, the value of fish exports in LIFDCs corresponded to 50 percent of their import bill for food. Similarly the Asian countries as a group earned enough foreign exchange from fish to finance 34 percent of their food imports in 2000. Analysis of past and projected trade trends indicates that developing countries as a whole have been, and are projected to remain, large net importers of low-value food fish but exporters of high-value finfish.24

The impacts of increasing trade on food security for the poor are not necessarily clear-cut. While low-value fish have traditionally accounted for a higher share of the animal protein consumption by the poor in developing countries, increased trade may or may not drive up local prices. What is certain is that the effects of fish trade on the price of fish is likely to be a key factor affecting the nutrition of the urban and rural poor in the future.

1.2.4 Contribution at the individual/household level

The most direct contribution of fishing activity to food security at the household level is through consumption of the household's catch, i.e. self-consumption. Certainly for many poor households engaged in full-time, seasonal or occasional small-scale fishing activities, such contributions are crucial to individual/household food security.

The percentage of total household catch that is consumed by the household varies greatly, however, and may depend on both the level of commercialization in the fishery and the level of poverty in the household. The extent to which poverty determines the percentage of the catch that is consumed, is complex and not always clear or well-understood. While it is often assumed that the poor consume a greater proportion of their catch, recent field research, in the Lake Chad area25 (Béné et al . 2003a), has shown that the poorest households may consume a lower proportion of their catch than better-off households, and instead sell most of their fish in order to be able to purchase cheaper foodstuffs. The direct contribution of fish to food security for the poorest households may therefore be lower than generally thought, preventing these households from accessing the nutritional benefits that fish offers (see Section 1.2.1). This is particularly the case for women, because of commonly-found gender inequities in access to fishery resources and to higher-margin trading activities in the post-harvest sector.

If fish (as a subsistence product for fishing households) is potentially an important source of direct food security, its contribution through both bartering and the generation of incomes derived from labour-wages and fish commercialization, can also make it an important indirect source of food security. Harvesting, processing and marketing fish generates livelihoods, employment and income for millions of people around the world. Although employment cannot be taken as the firm assurance of food security for these people, it should be emphasized that in a significant number of cases, small-scale fishing activities take place in rural areas26 where alternative employment opportunities may be scarce or even non-existent. In these circumstances, access fishery resources for harvest, processing and/or trade may represent the only option available for making a living and maintaining food purchasing power.

The contributions of small-scale fisheries to food security discussed above are summarized in Table 2 of the Appendix.

13 Lem, A. 2003. The WTO Doha round and fisheries; what is at stake . EUROFISH4.

14 Multipliers arise because fishing activities use the products of other industries/businesses to produce their own products, and because outputs from fishing become inputs to another industry/business. The main concept of the multiplier is therefore based on the recognition that the various sectors that make up the economy are interdependent.

15 See Section 1.1.2 below for an explanation of the differences between direct, indirect and induced multiplier effects.

16 Fish not used for subsistence.

17 FAO, 2004 (see footnote 3).

18  Because fishing is not, in most of these cases, perceived as the household's main activity (which is more frequently recorded in governments' statistics as “farmers”), the contribution of fisheries is seldom recognized and accounted for, and is usually ignored by planners and policy-makers.

19 At least in terms of number of people concerned.

20 FAO, 2004 (see footnote 3).

21 FAO Fishery Information, Data and Statistics Unit. 1999. Numbers of fishers 1970–1997. FAO Fisheries Circular. No. 929, Rev. 2. Rome, FAO. 108 pp. (Trilingual)

22 Note that per capita food-fish supply for Africa declined significantly during the 1990s (FAO, 2000).

23 Kurien, J. (ed.). 2005. Responsible fish trade and food security. FAO Fisheries Technical Paper. No. 456. Rome, FAO. 102 pp.

24  Delgado, C.; Wada, N.; Rosegrant, M.; Meijer, S.; Ahmed, M. 2003. Outlook for Fish to 2020: Meeting Global Demand . A 2020 Vision for Food, Agriculture, and the Environment Initiative. International Food Policy Research Institute & WorldFish Center.

25  Béné, C.; Neiland, A.; Jolley, T.; Ladu, B.; Ovie, S.; Sule, O.; Baba, O.; Belal, E.; Mindjimba, K.; Tiotsop, F.; Dara, L.; Zakara, A.; Quensiere, J. 2003. Inland fisheries, poverty and rural livelihoods in the Lake Chad Basin . Journal of Asian and African Studies, 38(1): 17–51.

26  It is recognized however that a growing part of small-scale fisheries is now taking place in peri-urban - or even urban - zones.

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