SWIOP/WP/52 - Proceedings of the Seminar on the Management of the Banks Handline Fishery













Table of Contents


December, 1989

Albion, Mauritius
October 20, 1989

SWIOP
DOCUMENT
OISO

RAF/79/065

REGIONAL PROJECT FOR THE DEVELOPMENT & MANAGEMENT
OF FISHERIES IN THE SOUTHWEST INDIAN OCEAN

PROJET REGIONAL POUR LE DEVELOPPEMENT L'AMANAGEMENT
DES PECHES DANS L'OCEAN INDIEN SUD-OCCIDENTAL

c/o UNITY HOUSE, P.O. BOX 487, VICTORIA, MAHÉ, SEYCHELLES

TELEPHONE: 23773

TELEX: 2254 SWIOP SZ

Co-sponsored by the

Regional Project for the Development and Management of Fisheries in the
Southwest Indian Ocean (RAF/87/008)

and

Ministry of Agriculture, Fisheries and Natural Resources of Mauritius

The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever by the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area of its authorities or concerning the delimitation of its frontiers or boundaries. The views expressed are those of the authors.

FAO - FOOD & AGRICULTURE ORGANIZATION OF THE UNITED NATIONS

This electronic document has been scanned using optical character recognition (OCR) software and careful manual recorrection. Even if the quality of digitalisation is high, the FAO declines all responsibility for any discrepancies that may exist between the present document and its original printed version.


Table of Contents


PRESENTATION OF THE DOCUMENT

SPEECH OF THE HONORABLE M. DULOO. MINISTER OF AGRICULTURE. FISHERIES AND NATURAL RESOURCES

1. Introduction

2. Discussion of Findings and Some Management Options

3. Recommendations of the Seminar

4. List of Participants

5. Papers Presented at the Seminar

A re-appraisal of the banks fishery in Mauritius (Paper 1)

Summary
1. Introduction
2. Historical Review
3. Fishing Season
4. Fishing Vessels
5. Fishermen
6. Fishing and Processing Methods
7. Fishing Areas Covered
8. Yield Potential
9. Intensity of Exploitation
10. The St. Brandon Fishery
11. Species Caught
12. Fishing Effort
13. The Catch and Imports
14. Consumption of Frozen Banks Fish
15. Storage Facilities
16. Exports
17. Discussion
18. Suggestions
Acknowledgements
References

Mauritius Banks Fishery Study - Market Considerations (Paper 2)

1. Introduction
2. Production and Catch Composition
3. Imports and Exports
4. Fish Processing
5. Marketing Infrastructure
6. Fish Prices
7. Consumption and Demand
8. Conclusions and Recommendations
References

Some Economic Aspects of the Mauritius Banks Fishery (Paper 3)

1. Some Characteristics of the Banks Fishery
2. A Model of Operating Costs
3. Implications of the Analysis and Suggestions for Change
4. Acknowledgements
5. References
Appendix 1. The annuity method used to estimate annual capital cost
Appendix 2. An introduction to fishery management instruments and concepts

An Assessment of Exploitation Levels in the Banks Handline Fishery and a Management Plan to improve the Fishery Performance (Paper 4)

1. Introduction
2. The extent by which the present fishing effort might be excessive
3. Some economic consequences of the excessive fishing effort
5. How a regime of individual transferable quotas might be introduced into the Banks Handline Fishery
6. Concluding comments
References

Some Near-term Consequence of Implementing the Management Plan (Paper 5)

1. Introduction
2. Method
3. Results and Discussion
4. Concluding Comments
5. Reference
Appendix 1 Estimates of population numbers, mortalities, catch and biomass in the base year for the Saya de Malha Bank

Industry Views on the Mauritius Banks Fishery (Paper 6)


PRESENTATION OF THE DOCUMENT

This document is the Proceedings of the Seminar on the Management of the Banks Handline Fishery. The participants in this fishery are Mauritius and to a much lesser extent Reunion.

The contents of the document include a summary of the Seminar findings and recommendations and five technical papers. The last of these was written subsequent to the Seminar. In addition there is a short paper reflecting the industry views concerning the fishery.

Collectively they show the substantial shortcomings in the way the fishery is presently managed and provide an alternative approach to substantially improving its economic performance.

Distribution:

Bibliographic Entry

Member States of SWIOP SWIOP/MAFNR, 1989:
Participants of the Seminar Proceedings of the seminar on the management of the banks handline fishery
UNDP
FAO Regional Fisheries Offices
FAO Fisheries Department FAO/UNDP:
SWIOP Mailing List RAF/87/008/WP/52/89/E

SPEECH OF THE HONORABLE M. DULOO. MINISTER OF AGRICULTURE. FISHERIES AND NATURAL RESOURCES

Members of the Diplomatic Corps,
Distinguished Guests,
Ladies and Gentlemen

It is indeed a great pleasure for me to be present this morning at the Albion Fisheries Research Centre for the seminar on the Management of Bank Fisheries which is being organized by the FAO Regional Project for the Development and Management of Fisheries in the Southwest Indian Ocean in collaboration with the Government of Australia.

The basic objective of this seminar is to assist in the formulation of a plan for an efficient bank fishery. (This seminar will be of particular interest to us as it comes at a time when our Bank fishing industry is at the crossroads and need to be revitalized).

Many of you in this hall today will surely recollect that in the early eighties, the Mauritian Bank fishing industry had virtually ceased to exist as one after the other almost all Mauritian vessels stopped fishing and a meagre supply of frozen fish was maintained by two Chartered Korean vessels. In 1982, the Government took a series of measures to resurrect the Bank fishing industry: Habour dues were brought down by 75 %. Customs duty was removed on spare parts and equipment, a more realistic price policy was adopted, a ban on the importation of substitutes was imposed and the use of chartered vessels was discouraged.

The package of incentive offered by the Government attracted heavy investment and by 1987 landing from the Banks attained 5500 tonnes.

Hand in hand the per capita consumption of fish in Mauritius increased from 12.5 kg in 1982 to 16.1 kg last year. But then, gradually a dark spot was looming through the bright sunshine the industry was basking under. The decreasing size of fish caught and the reduction of catch per unit of fishing effort were clear indications that the Banks handline fishery had reached or was in very close proximity to the maximum sustainable yield.

It is gratifying to note that we have been able to gather round this table all parties concerned: government officials, managers of fishing companies, owners of cold stores, consumer association. I am sure.the product of your deliberations on appropriate management regime for our Bank fishing industry as I expect that it will entail a commitment from every partner in the Bank fishing industry.

At any rate it is evident now that the bank handline fishery offers practically very little scope for any future expansion. On the other hand the demand for fish is growing. It is now urgent for Mauritius to consider the utilization of new fishery resources.

Fortunately, the possibilities exist. Exploratory trawling conducted on the Banks by FAO some years ago indicated that outside the rocky and coralline floors traditionally exploited by the handline fishery, the sandy trawlable areas sustain commercially important fishery resources constituted mainly of horse mackerels. The maximum sustainable yield of these resources has been assessed to lie between 13000 to 26000 tonnes a year. The Government is now prepared to provide every possible inducement for the establishment of a trawl fishery on the Banks. And I would wish to avail of this opportunity to invite Mauritian fishing companies to give some thought to this matter.

Before ending, I should like to express my deep appreciation to FAO and its Regional Body, the Southwest Indian Ocean Project for this laudable initiative to organize this seminar which, I am sure, will mark a turning point in the Mauritian Bank Fishing Industry.

I should also like to thank the Government of Australia for providing the necessary support to hold this seminar. And I must here place on record, that in the recent years, Australia has provided substantial assistance for the development of Mauritian fisheries.

I hope you will have a very fruitful working session and I have the pleasure to declare open this seminar.

1. Introduction

Preamble: The Seminar took place at the Albion Fisheries Research Centre (AFRC) on October 20, 1989. It was co-sponsored by the Regional Project for the Development and Management of Fisheries in the Southwest Indian Ocean (SWIOP) and the Ministry of Agriculture, Fisheries and Natural Resources of Mauritius.

Support was also provided from the Australian International Development Assistance Bureau (AIDAB) as arranged through the Australian High Commission in Mauritius. This enabled a Fishery Economist/Planner (Dr. N.H. STURGESS) to undertake a costs and earnings study of the fishing companies and to participate at the Seminar.

A Marketing Consultant (Mr. M. MOREL) was also engaged in undertaking an assessment of the distribution and marketing of frozen fish within Mauritius. This consultancy was financed by SWIOP, as was a descriptive study of the fishery prepared under author's contract by Mr. C.R. SAMBOO.

Background: The fishery largely involves the deployment of motherships on the shallow banks of the Mascarene Ridge. The main fishing grounds are the Saya de Malha and Nazareth Banks, situated between about 400 and 1000 km north of Mauritius. Fishing trips are of about six weeks duration.

The fishery based from Mauritius has developed from five motherships in 1980 landing about 1400 tonnes to 13 motherships in 1988 landing about 5000 tonnes.

The motherships are equipped with 10 to 20 dories, each manned by two fishermen fishing with handlines. Most of the catches are of a single species (Lethrinus mahsena).

During the past decade a single mothership has also been operated from nearby Reunion. Fishing from this vessel has largely been confined to the Saya de Malha Bank, most of which is in international waters. The quantities landed have declined from about 400 tonnes in 1986 to recent levels of about 300 tonnes.

A Workshop on the status of the fishery was held in 1986 involving the participation of biologists from each of Mauritius (AFRC) and La Reunion (IFREMER). It was concluded in respect to the Saya de Malha Bank that the contemporary catch was approaching the maximum sustainable yield (MSY), and was higher than that associated with maximizing the economic yield to the fishery (MEY); see Bertrand et al (1986)1.

1 Bertrand, J. et al, (1986): Rapport du groupe de travail pour une évaluation des ressources en capitaine dame berri des bancs de Saya de Malha. Publication IFREMER., 40 p.

A similar more recent assessment for the stock inhabiting the Nazareth Bank also concluded that the contemporary catch was close to the MSY; see Bautil and Samboo (1988)2.

2 Bautil, B. and C.R. Samboo, (1988): Preliminary stock assessment for the mahsena emperor (Lethrinus mahsena) on the Nazareth Bank of Mauritius. In Proceedings of the Workshop on the assessment of the fishery resources in the Southwest Indian Ocean. FAO/UNDP: RAF/87/79/065/WP/41/88/E:277 p.

Despite the concern of scientists that over-exploitation was occurring, the fishing effort has continued to increase. There have also been complaints from the fishing companies of low profitability reflected during 1989 by vessels being withdrawn from the fishery (four as the consequence of loan defaults).

It was against this background that the conduct of the Seminar on the management of the Banks Handline Fishery was judged highly desirable.

Purpose of the Seminar: The purpose was to undertake an appraisal of the levels of stock exploitation, marketing aspects and the economic performance of the Banks Handline Fishery as presently managed, and to investigate whether an alternative management regime might achieve a greater sustainable economic benefit from the fishery.

Conduct of the Seminar: The Seminar occupied the full day and was opened by the Minister of Agriculture, Fisheries and Natural Resources. The Chairman was the Assistant Principal Secretary of Fisheries. Apart from the senior staff of the fisheries administration, all the fishing and many of the fish marketing companies involved with the fishery were represented.

Much of the Seminar was devoted to the presentation of previously prepared papers under the following titles (with the authors names given in brackets).

- A Re-Appraisal of the Banks Fishery in Mauritius (R. Samboo)

- Mauritius Banks Fishery Study - Market Considerations (M. Morel)

- Some Economic Aspects of the Mauritian Banks Fishery (N. H. Sturgess)

- An Assessment of Exploitation Levels in the Banks Handline Fishery and a Management Plan to improve the Fishery Performance (M.J. Sanders)

In addition, a short paper representing the collective views of the fishing companies was presented by the manager of the Mauritius Fishing Development Company.

The subsequent discussion led to the recommendations and actions described in the following sections.

2. Discussion of Findings and Some Management Options

Exploitation Levels and Sustainable Yields:

The landings by Mauritius from the Banks Fishery in 1988 totalled 5140 tonnes. Most of this was from the Saya de Malha Bank (2651 tonnes) and the Nazareth Bank (1429 tonnes). The other contributions were from St. Brandon (720 tonnes), Chagos (314 tonnes) and the Albatross Bank (26 tonnes).

Roughly 300 tonnes are believed to have been landed in addition from the mothership based in Reunion. Almost all of this would have been caught on the Saya de Malha Bank.

Applying standard stock assessment methodology, the estimates obtained for the maximum sustainable yield (MSY) of the Saya de Malha and Nazareth Banks are 2887 tonnes and slightly less than 1300 tonnes respectively. The 1988 catch from the two banks (including the contribution by Reunion) exceeded the sum of these values by about 200 tonnes. This is not considered to be sustainable but rather the consequence of a recent increase in fishing effort.

The assessment also indicated that the 1988 level of fishing effort applied to the Saya de Malha and Nazareth Banks was grossly excessive. In 1988, the fishing effort on the two banks was 63000 fisherman-days. The sustainable annual catch from this level of effort was determined as only about 170 tonnes (or 4.3 percent) greater than could be obtained from an effort of 30000 fisherman-days (subsequent to the attainment of equilibrium).

The results from the assessment are supported by the observed catch and effort data of earlier years. The catch from the Saya de Malha Bank in 1985 and 1986 for example, was 2900 tonnes from an effort of about 28000 fisherman-days. The estimate of the sustainable yield from an effort of 28000 fisherman-days is 2882 tonnes and hence not much different from the observed catch.

The Economic Consequences of Excessive Fishing Effort:

The results from a costs and earnings study undertaken immediately prior to the Workshop produced the following estimates for the costs of operating a hypothetical vessel of "moderately" above average performance:


Insured Vessel

Uninsured Vessel

Capital annualsed at

10%

15%

10%

15%

Cost per kg of Catch (Rs)

15.63

16.10

15.19

15.66

The above is based on four trips per year and a vessel catch of 125 tonnes/trip.

The "fixed" retail price applying to Banks fish is presently Rs 18/kg, which is equivalent to ex-quay prices of Rs 15/kg for "white" fish and Rs 24/kg for saleable "red" fish. Assuming two scenarios concerning the proportions of "white" and "red" fish in the landings, the average price received is as follows:


Ratio of fish in "white" to "red" the catches


15:85

10:90

Weighted Average Price (Rs/kg)

16.35

15.90

When comparing these with the costs/kg given earlier, it was concluded that the fishery is operating at about zero economic yield3.

3 Economic Yield is here defined as the difference between the fishery revenues and costs, with the costs including a "reasonable" return to the vessel owner for management and capital.

The poor economic state of the fishery is well reflected by the recent history of loan defaults (the Development Bank of Mauritius is now in possession of four of the 13 vessels operated during 1988), the voluntary retirement of another vessel from the fishery without intention of replacement and industry claims that the fishery is no longer profitable.

The estimate obtained for the maximum economic yield from the Saya de Malha and Nazareth Banks is about Rs 35 million (from applying an ex-quay price of Rs 15.90/kg). This represents the economic yield presently being foregone each year as the consequence of the excess fishery effort.

The effort at MEY was determined as about 17000 man-days (or 27 percent of the effort in 1988). The annual catch associated with the attainment of MEY was determined as 3400 tonnes.

The Likely Consequence of Continuing with Price Controls (as the Sole Instrument of Management):

Price control is the instrument of management in place. At present the "fixed" retail price for frozen fish in Mauritius is Rs 18/kg. Informed sources claim that an open market would produce an ex-quay price of Rs 20-23/kg.

The fishing companies are seeking to effect an increase in the price. If successful the immediate consequence would be an increase in profitability (at the expense of the consumers).

This newfound profitability can be expected to attract additional investment and fishing effort into the fishery. The ultimate result would be a return to the same close to zero profit for the companies, and possibly an even higher level of exploitation exerted on the fish stocks (reflected by lower catch rates and smaller fish).

Improvement in the economic performance of the fishery can only be achieved by a substantial and sustained reduction in fishing effort. This could be achieved by a reduction in price.

In the event of imposing a "drastic" reduction, the price estimated as necessary to achieve the maximum economic yield (at equilibrium) is about Rs 6/kg (i.e. 40 percent of the present price). The short term consequence of imposing this price, however, would be for all the companies to cease fishing and the Banks fishery catch to become zero.

Progressive small reductions in price over some years would force the least efficient companies out of the fishery and cause a reduction in fishing effort. The profitability of the surviving companies, however, would be less than at present. Furthermore, it would take a long time for any substantial improvement to occur to the economic yield of the fishery (due to the fish being long-lived and slow-growing).

Management by Individual Transferable Quotas (ITQs):

The basic concept here is that the fishery be subject to an annual catch quota and that this be apportioned between the fishing companies. In addition the fishing companies would have the right to trade in quota shares (i.e. buy, sell or lease).

The virtues of this approach have been well demonstrated through experience elsewhere in a number of important fisheries. The most important of these is that it encourages the fishery to move in the direction of improved economic performance.

This would arise because, once the companies are assured of their percentage of the annual quota, there no longer remains any virtue in increasing fishing effort (in order to catch more fish). Rather, attention would be focussed on ways to reduce costs and hence increase profits. There will also be a tendency for the purchasers of quota to be more efficient economically than the sellers of quota.

ITQs also provide the opportunity for the marginally efficient or inefficient companies to quit the fishery and at the same time gain some monetary compensation for doing so.

In the ideal situation, the fishery quota should be the catch associated with maximizing the economic yield. When the prevailing catch is already substantially higher, as for the Banks fishery, it would be necessary to choose an annual quota lower than the recent catches.

In the case of the Saya de Malha and Nazareth Banks the annual catch at MEY is estimated as 3400 tonnes. The catch in 1988 was about 4400 tonnes (from Mauritius and Reunion) and hence a reduction to a lower annual catch will be necessary.

3. Recommendations of the Seminar

1. It is recommended that, at the earliest opportunity (preferably at the beginning of 1990), the Banks fishery be subject to a management plan whose central feature is individual transferable quotas. Implementation would involve identifying in advance an annual fishery quota4 and the percentages of this to be apportioned between the fishing companies. Once the percentages are determined and allocated to the companies, it is recommended that they thenceforth be freely tradeable, that is that they might be bought, sold or leased either in part or in total.

2. The company representatives at the Seminar undertook to meet and seek agreement on the apportionment of the chosen fishery quota between the fishing enterprises. In the event of this exercise not succeeding it is recommended that the Government establish an independent body to undertake this task (see later recommendation concerning the establishment of a Banks Fishery Management Advisory Group).

3. It is recommended that the fishery quota should apply to all the grounds presently fished, except those adjacent to the island of St. Brandon and the Chagos Bank. St. Brandon is excluded in the belief that the single company involved is controlling its level of exploitation in order that it not be excessive. The fish stocks at the Chagos are certainly under-exploited and hence not presently in need of management. This is due to its remoteness and the (possibly incorrect) presumption that some of the most abundant species are contaminated with ciguatera toxin.

4. In recognition that the fishery is shared with Reunion, it is recommended that discussions be commenced at the earliest, to establish their agreement to a percentage of quota based on recent years' catches (i.e. about 300 tonnes). Any agreement with Reunion should permit the possibility of either country trading quotas with the other.

5. It is recommended that the present leasing arrangements for St. Brandon (involving the Mauritius Fishing Development Company) be modified to confer exclusive rights for this company to exploit the fishery resources. The lease should be subject to the following two qualifications: that the exclusive right be limited to an annual non-transferable catch quota of 700 tonnes, until scientific evidence is available in support of changing this value, and that the traditional practice of fishing on the nearby Albatross Bank by the Banks Handline Fishery vessels be preserved.

6. It was recommended that appropriate samples of species of fish, presently unexploited because they have been designated as toxic (from ciguatera toxin), from the Chagos in particular (and the Banks generally), be collected and assayed for their toxicity level at a suitably approved laboratory. In accompaniment with this, and especially should the fish of the Chagos be determined as non-toxic, forms of Government action should be identified and implemented which lead to a fuller exploitation of the available fish resources around the Chagos. It was recognized as necessary that this be done in a way which has minimal potential to disrupt the quota management scheme referred to earlier.

7. Until such time as the management plan described above is implemented, it is recommended that the price for "white" fish continue to be "fixed". In the case of saleable "red" fish, which presently represent a minor part of the landings from the Banks fishery, the elimination of price fixing was seen as a desirable stimulant to increased catches of the deep water snappers. These exist along the outer edge of the shelfs fringing the Banks and the Chagos. The diversion of fishing effort to the Chagos, where the proportion of red fish (some of which is not ciguatoxic) is high, is also a likely repercussion of such a measure.

8. It is recommended that a code of practice be established for the handling and processing of Banks fish. This should be associated with the establishment of a quality control section specifically, trained for the fishing industry, preferably under the direct control of the fisheries authorities. This section would have the responsibility for extension training of industry, monitoring of quality and if necessary enforcing implementation of the code of practice.

9. In association with the implementation of the individual transferable quota scheme, the establishment of a Banks Fishery Management Group is recommended. Its principle initial task would relate to the implementation of the quota management scheme. Subsequently, the Group would be expected to be responsible for advising the Government on the magnitude of the fishery quota in later years, advising on research needs, the effectiveness of enforcement, and on any other unforeseen matter concerning the management of the Banks Handline Fishery.

4 The management objective considered most appropriate to determining the annual fishery quota was the attainment of maximum sustainable yield (MEY).

The short term effects of application of ITQs

Subsequent to the Seminar, a study was made entitled "An assessment of the short term effect on the Banks handline fishery performance of implementing an annual catch quota" (Paper 5 - M.J. Sanders). Two scenarios are examined, whereby the quota to produce MEY is attained in one step (scenario "A") or in annual increments of 100 tonnes, from the catch in the base year (scenario "B").

This study demonstrates that immediate application of a quota of 3400 tonnes from the two banks provides higher economic benefits over the whole period. As from the first year, this scenario provides benefits of Rs 0.5 million, compared to losses of Rs 2.2 million for scenario "B". Over the ten years, the benefits are of Rs 165 million, compared with Rs 128 million.

10. It is therefore recommended that the quota be set as from the first year to 2500 tonnes for Saya de Malha Bank and 900 tonnes from Nazareth Bank.

4. List of Participants

Name

Organization


Government of Mauritius


1. Mr. Suresh SEEBALLUCK Principal Asst. Secretary

Ministry of Agriculture,

Fisheries & Natural Resources

3rd Level

Emmanuel Anquetil Building

PORT LOUIS


2. Mr. Munesh MUNBODH Acting Principal

Fisheries Officer

Ministry of Agriculture,

Fisheries & Natural Resources

3rd Level

Emmanuel Anquetil Building

PORT LOUIS


3. Mr. Dhaneshwar GOORAH Divisional Scientific

Officer (Fisheries)

Ministry of Agriculture,

Fisheries & Natural Resources

Albion Fisheries

Research Centre

ALBION


4. Mr. Ismet JEHANGEER Divisional Scientific

Officer (Aquaculture)

Ministry of Agriculture,

Fisheries & Natural Resources

Albion Fisheries

Research Centre

ALBION


5. Mr. B.D. RATHACHAREN Scientific Officer

Ministry of Agriculture,

Fisheries & Natural Resources

Albion Fisheries

Research Centre

ALBION


6. Mr. A. VEKATASAMI Scientific Officer

Ministry of Agriculture,

Fisheries & Natural Resources

Albion Fisheries

Research Centre

ALBION


7. Mr. C.R. SAMBOO Scientific Officer

Ministry of Agriculture,

Fisheries & Natural Resources

Albion Fisheries

Research Centre

ALBION


8. Mr. K.P. SHARMA ITEC Expert Fisheries

Ministry of Agriculture,

Fisheries & Natural Resources

5, Britannia Park

VACOAS


9. Mr. P. UJOODHA Principal Economist

Ministry of Economic

Planning & Development

Emmanuel Anquetil Building

PORT LOUIS


10. Mr. B. BUNDHOO Economist

Ministry of Economic

Planning & Development

Emmanuel Anquetil Building

PORT LOUIS


11. Mr. Krishnah APPADU Accountant

Cargo Handling Corpn. Ltd.

Mauritius Marine

Authority Building

Mer Rouge

PORT LOUIS


12. Mr. V. G. DOOKHONY Regional Development

Officer (NDU PMO)

New Government Centre

PORT LOUIS

Fishing Industry and Marketing Companies



13. Mr. I. NABEERASOOL Principal Manager

Sea Falcon Ltd.

9, President John

Kennedy Street

PORT LOUIS


13. Mr. Gong Ming CHEN Director

Chen Group Ltd.

307, Royal Road

ROSE HILL


14. Mr. Simon MONDON Director

Mauritius Fishing

Development Ltd.

33, Ter Volcy Pougnet St.

PORT LOUIS


15. Mr. J. Louis COUACAUD Chartered Accountant

Mauritius Fishing Dev. Ltd.

33, Ter Volcy Pougnet St.

PORT LOUIS


16. Mr. Victor SEEYAVE Manager

Happy World

Remy Oilier Street

PORT LOUIS


17. Mr. Jean Pierre WAN Manager

Hensinchang Fishing Co. Ltd.

38, Jummah Mosque Street

PORT LOUIS


18. Mr. Claude TALBOT Director

Talbot Fishing Company Ltd.

New Mauritius Dock

PORT LOUIS

AIDAB Consultant



19. Mr. Neil STURGESS Economist

Michael Read & Associates

89, Gladstone Street

Kew Vic.

AUSTRALIA

UNDP



20. Mr. J-N. MARCHAL UNDP Resident Representative

UNDP Office

P.O. Box 253

SWIOP



21. Mr. J.D. ARDILL Project Manager

SWIOP

FAO

P.O. Box 487

VICTORIA

Seychelles


22. Mr. Michael J. SANDERS Senior Fishery

Development Specialist

SWIOP

FAO

P.O. Box 487

VICTORIA

5. Papers Presented at the Seminar


A re-appraisal of the banks fishery in Mauritius (Paper 1)
Mauritius Banks Fishery Study - Market Considerations (Paper 2)
Some Economic Aspects of the Mauritius Banks Fishery (Paper 3)
An Assessment of Exploitation Levels in the Banks Handline Fishery and a Management Plan to improve the Fishery Performance (Paper 4)
Some Near-term Consequence of Implementing the Management Plan (Paper 5)
Industry Views on the Mauritius Banks Fishery (Paper 6)


A re-appraisal of the banks fishery in Mauritius (Paper 1)


Summary
1. Introduction
2. Historical Review
3. Fishing Season
4. Fishing Vessels
5. Fishermen
6. Fishing and Processing Methods
7. Fishing Areas Covered
8. Yield Potential
9. Intensity of Exploitation
10. The St. Brandon Fishery
11. Species Caught
12. Fishing Effort
13. The Catch and Imports
14. Consumption of Frozen Banks Fish
15. Storage Facilities
16. Exports
17. Discussion
18. Suggestions
Acknowledgements
References


by
C.R. Samboo
Scientific Officer,
MAFNR

Summary

Statistical data on the banks fishery have been collected since 1977 by the Statistical Unit of the Research Division of the Ministry of Agriculture, Fisheries and Natural Resources. From January 1977 to September 1988, information about each fishing trip was submitted by the skipper. This included: the length of each fishing trip, the number of days on which fishing was done, the number of fishermen, the total catch and the number of days of inactivity. Since October 1988, the data are collected on a daily basis as per the proforma shown in Appendix I. In addition, samples of the catches were examined for species and size composition.

Using catch per fisherman day as index of performance, there was no evidence of overfishing on the Banks up to 1983, but in some areas the quantities caught were close to the limits established in previous studies and the average weight and length of the fish had been declining substantially. It was strongly advised, then, that further expansion of the fishery be checked.

At present, the catch per fisherman day indicates overfishing in most areas, and on the Saya de Malha bank the size of the fish has decreased considerably and annual catches have almost regularly exceeded the estimate of potential yield established by joint studies by the IFREMER (Reunion) and the Albion Fisheries Research Centre (Mauritius).

1. Introduction

The fresh fish supply to the local market in Mauritius comes from lagoon and offlagoon fishing grounds. Since 1987, chilled fish has been supplied mainly for an export market to Reunion and comes from the offlagoon fishing grounds only. The distant-water fishing grounds (banks) provide frozen fish.

The near-water fishing grounds supply both pelagic and demersal fish. The middle-water grounds supply mostly demersal fish which are well appreciated and find immediate local and export markets. The distant-water fishing grounds provide demersal fish, mostly Lethrinidae, and can probably supply pelagic fish, a limited quantity of parrot fish and considerable quantities of small pelagics. This last stock has not yet been tapped and is estimated to have an annual potential yield of 20,000 tonnes on the Saya de Malha bank (IOFC/DEV/79/45).

2. Historical Review

The Banks fishery appears to have started in the eighteenth century. The vessels engaged in the inter-island trade in the early period of this fishery caught fish mainly for self consumption and salting. Salted fish was exported to Mauritius on a commercial basis from St. Brandon as from 1927 by the Raphael Fishing Co., named after one of the many small islands of the St. Brandon group. Trawling on the banks was attempted by the company in 1931 with the "Fume" but this pioneering operation was unsuccessful and was not pursued (IOFC/DEV/79/45). The company, however, continued the exploitation of the fish resources by handline. The first vessel to have been used for the exploitation of fish stocks on the banks was "La Perle I" (ex "Thelma"). She was operated during the war (in 1939) around the St Brandon group of islands and later for the transfer of frozen fish stored at -5°C to Mauritius (Couacaud, 1967).

After the survey of the fishery resources of the Mauritius-Seychelles ridge by Wheeler and Ommanney (Wheeler and Ommanney, 1953), systematic exploitation of the banks started. The "Silver Lord" (a warship converted into a fishing vessel) owned by the Indian Ocean Trading Company was the first vessel to start exploiting the fish stocks of the Nazareth bank and bringing the frozen product to Mauritius to be retailed at Re 1.00 per kg. The vessel made a single cruise in 1950 and 3 cruises in 1952, landing each time about 100t of fish. The venture was, however, commercially unsuccessful due to the absence of the necessary infrastructure for the distribution of frozen fish and the relative abundance of fresh fish on the local market.

The Limuria Fishing Co. chartered and eventually purchased the "Stella Maru I" (ex "Kaise Maru No. 5") in 1966. The vessel carried 4 pirogues on its first trip and later 5 and 6, equipped with oars and sail, and 16 to 24 fishermen, i.e. 4 fishermen per dory. It visited the Nazareth bank 4 times and landed 20t, 35t, 79t and 50t respectively. The catch per fisherman day was not less than 350 kg (Mr Robert Talbot, personal communication). The Company started the commercialisation of frozen fish on a nation-wide basis. The vessel "La Perle II" of the Raphael Fishing Company then started the supply of frozen fish to the local market, after having previously been used for the transfer of salted fish from St. Brandon, of the fish were gutted on board the mother vessel. Later, there was a gradual increase in the number of vessels. The year 1977 during which 8 vessels operated (including 2 chartered ones) can be considered as a turning point in the history of the Banks fishery and gave an impetus to its progression. The number of vessels declined, however, and in 1980 and 1981 only five motherships were still active.

The price of frozen fish, which was formerly controlled by decree, was freed in 1981 which resulted in its immediate increase. That new economic situation led to more investment in the industry and by the end of 1982 ten vessels, including two chartered ones, were operating. The number dropped in the following years and later increased to 15 in 1986. During the first part of 1989, nine vessels were active and it is expected that all of them will be in operation from now on. The number of vessels active on the banks since 1977 is indicated in Table 1, notwithstanding the fact that not all of them had regular trips to the Banks as can be inferred from table 9 on page 13.

Table 1. Evolution of the number of motherships

YEAR

77

78

79

80

81

82

83

84

85

86

87

88

89

LOA
<30m

1

1

1

1

-

-

1

1

2

2

-

-

-

30-45m

5

5

5

4

3

6

4

5

9

9

10

10

5

>45m

2

2

1

-

2

4

3

3

2

4

4

4

4

TOTAL

8

8

7

5

5

10

8

9

13

15

14

14

9

3. Fishing Season

The fishing season for the exploitation of the fish resources located along the Mauritius - Seychelles ridge usually starts in September and ends in June of the following year. The Chagos bank is fished during the June to August period. Each bank, however, has its own particular fishing season and is more or less as follows:

St Brandon All year round
Nazareth October to April
Saya de Malha September to June
Chagos June to August

4. Fishing Vessels

Various types (warship, cargo ship, trawler, longliner, etc) and sizes (20 to 60m) of vessels have been used to exploit the Banks fishery. Second-hand longliners purchased mainly from Taiwan or Japan have proved to be the best suited vessels. Refitting of such vessels includes accomodation for fishermen, the purchase of dories and outboard motors and tanks for the storing of fuel for daily distribution to fishermen.

At the start of the fishing season in October this year, 9 motherships may be active. The "Silver Star" will still be used as a carrier of frozen and salted fish from St Brandon.

The "Swan" has joined the fishery this season and the "Talbot IV" is a newly acquired vessel to replace the "La Perle III". The company owning the "Snow Reefer" has expressed its intention of operating the vessel this fishing season. Table 2 tabulates the characteristics of the current fleet of motherships.

Table 2 The present fleet of motherships

5. Fishermen

Along with the number of mother vessels, the number of fishermen has increased considerably from 336 in 1977 to 629 in 1988. Of the latter some 75 are employed in the St Brandon fishery. But "good" banks fishermen are scarce and regular and excellent fishermen are even scarcer. Quite often "fishermen" have to be given on-the-job training which logically brings about a considerable loss of time during the trip. Fishermen are the only group employed on a performance basis and are presently being paid between Rs 2.40 and Rs 3.00 per kg of fish caught. The pay could be higher for particular species which are found in greater depths and have a better market value.

The fishermen mostly come from Mauritius and some from Rodrigues. At the early period of the fishery, the Mauritius Fishing Development Ltd used to employ fishermen from the Seychelles. This practice has been ceased due to the high cost in transfer from their country to the banks and back.

The present population of fishermen is the "best" that exists. The Koreans and the Chinese who were once active in the fishery did not prove that they were better when their daily productivity was compared to that of their Mauritian counterparts.

In reality a comparison made in 1983 by using catch per fisherman day as an index revealed that Mauritians were far more effective than the Koreans. This can be justified by the assumption that this type of fishery exists nowhere else in the world and the experience of our fishermen act in their favour.

6. Fishing and Processing Methods

When the vessels leave the port, they head for the fishing grounds carrying 6-22 dories (6 to 7m long fibre-glass pirogues). The dories are stacked one inside the other in groups of three and placed symmetrically on the deck. Weather permitting, the vessels travelling at about 10 knots stop at the "Norwa" (northwest) which is the first fishable area on the Nazareth bank after about 30 hours. Otherwise the vessels will go further, 500 to 600 miles north-east of Mauritius, moving thereafter in a southerly direction (Mr Claude Talbot, personal communication).

After having located the most suitable area for fishing, the Captain anchors the ship. The dories are lowered into the sea and three fishermen board each one of them with their equipment (gloves, overcoats, lines, hooks, etc.) and food for the day. The small boats, equipped with outboard motors, move separately to the fishing grounds against the wind, so that if the motor fails the pirogue can move back to the mother-vessel using its sail. The boats usually remain within a radius of 4 to 7 miles from the mothership.

Fishing starts at a depth varying between 10 and 55m, but mostly at about 45m, with the fishermen each using a cotton or nylon line, having up to 10 hooks. The fish caught are stacked on the bottom of the boat. Gutting is carried out by one of the fishermen when the catch is not good and by two fishermen when the pirogue is on the move. The fishermen return when the pirogue is full of fish and this may occur once or twice daily. The mothership will remain at the same point for a maximum of 4 days as, after this period, the daily catch will be generally reduced. The skipper then moves the vessel, usually at night, to locate another suitable ground.

When the fishermen are back on the mothership, their catch for the day is weighed and the fish is deep-frozen in the blast freezer after gutting and stored at -20°C in the cold room of the mother vessel. Payment of wages is done progressively almost every week in Mauritius to a member of the families of the fishermen according to quantity of fish caught by them and the rest is paid to them when back at the port.

In port the fish are put into bags, loaded on trucks and transferred to cold stores. The first bags loaded may at times be exposed to the sun up to 3 hours during this operation. If, however, the vessel arrives in port with a full cargo, then a part of the catch is unloaded in bulk to allow for space for the bagging of the remaining catch. This operation is done by employees of the fishing company. The other operations are carried out by one or more gangs of 28 stevedores supplied by the Cargo Handling Corporation. The stevedores working in the cold room are constituted in 2 groups which are active alternatively during 20 minutes each.

7. Fishing Areas Covered

The 'banks* are shallow areas of the ocean along the Mauritius-Seychelles ridge. Table 3, which gives the area of shelf of each bank, reveals that the Nazareth and the Saya de Malha are the largest banks. The Chagos bank although long, is not wide. The trawlable areas of this bank below a depth of 35 metres are quite vast. The primary productivity of the whole area (15 mg C/m2/day) is, however, extremely poor (FAO/IOP, 1979).

Table 3. Area of banks (km2)


Area by depth range (km2)

REGION

Distance (km)

0-35m

35-100m

100-200m

Total (a)

200-400m

0-20m

St. Brandon

370

3087


-

3087

-

600

Mauritius

-

515

984

-

1499

-

400

Rodrigues

550

1200

476

-

1676

-

302

Chagos

2100

8575

5537

-

14112

-

-

Hawkins

425

240

465

-

705

-

-

Soudan

200

823

235

-

1058

-

-

Nazareth

650

10633

17150

3000

50274

19404

-

Saya de Malha

1050

11000

24605

9173

44778

-

-

Source: IOFC/DEV/79/45
(a) includes non-trawlable area in 50-100m depth zone

8. Yield Potential

Table 4 summarizes estimates of pelagic biomass and potential yields made by the FAO chartered research vessel "Professor Mesyatsev" in 1977. The potential annual catch of pelagic fish from the Nazareth and the Saya de Malha banks, based on these estimates, is in the range of 20,000t each. This estimate, however, only refers to the trawlable stocks. The handline stocks are located on the coral bottom areas only and may not be able to sustain a fishery far in excess of 3,800t annually from both the Saya de Malha and the Nazareth banks and 700t from the St Brandon areas. The catch data presently available on the Chagos Archipelago areas indicate possible landings in the range of 300 to 500t annually.

Table 4. Estimates of biomass and annual yields

Region

Area

Density

Biomass

Annual

(km2)

(t/km2)

(tonnes)

Yield

Nazareth 200m

50274

0.6

30164

19-25000


200m

19404

0.1

1940

500

Saya de Malha

52300

1.8

94140

10-20000

Others

22137

No data


11000

Source: IOFC/DEV/79/45

9. Intensity of Exploitation

The banks handline vessels operate mostly on the Saya de Malha and the Nazareth banks. The St Brandon waters are exploited by contractual fishermen from the main island St Raphael. The Chagos bank has been exploited seventeen times only since 1977. The reasons are that the bank is only exploited during the winter period, which time is used by most fishing companies for maintenance and refitting of their vessels. Also, the region is quite remote from Mauritius and almost 10 to 12 days are lost in travel. The productivity of the fishing grounds are in addition much lower than those of Nazareth and Saya de Malha and more often than not the fish caught are of species which are considered as toxic. The Soudan and the Hawkins banks are not exploited at all by Mauritian vessels due to rough grounds, low productivity and abundance of sharks. It has been unofficially reported, however, that these areas are visited regularly by vessels from Reunion Island.

Table 5. Fish landings (L) from banks (t)

The Nazareth bank is nearer to Mauritius but the fishing season there is shorter due to bad weather and fishable areas are smaller. These factors explain why it is being less exploited than the Saya de Malha bank and consequently the size of the fish there is still reasonably large.

The catch data from each of the banks tabulated in Table 5 indicate that percentage contribution of the Saya de Malha bank in the total catch was declining with a proportional increase from the Nazareth bank. As from 1982 the situation was just the opposite. The catch landed as frozen fish from St. Brandon has been increasing steadily since 1977 with a significant increase in 1988 equivalent to more than 7 times that of 1977. A part of the catch there is salted and exported to Mauritius. Moreover Saya de Malha is exploited by fishing vessels of Reunion whose annual landings amounted to about 800t up to 1987 and presently are estimated to be not more than 300t annually. The modest share of the Albatross bank in the total landings rose quite significantly during the last fishing season. Almost all vessels on their way to and back from the main banks have since October 1988 been stopping there for 2 or 3 days. The fishing grounds around Agalega had also been fished but productivity there is extremely poor.

The increase in the landings from the Saya de Malha bank fluctuate proportionnally with the number of active vessels, whereas the effort (fishermen days) exerted on the fish stocks of the Nazareth bank and landings are almost stable, as is noted in Table 9 and do not necessarily grow with the increase in the total number of vessels except in 1987 and 1988.

The catch per fisherman day and the size distribution of the fish of Nazareth bank suggest that the stocks of the bank have not reached a stage of overexploitation and appears not to have suffered much with the increase in the number of vessels. A natural limitation to the application of effort in the area of the Nazareth fishing grounds is due to the smallness of the bank and the shorter period during which it can be exploited. As regards the Saya de Malha bank it has been reported that many a time after 1985 the catch consisted of fish of size comparable to that of Nazareth bank. This could probably be explained by the discovery of some virgin patches being exploited for the first time.

10. The St. Brandon Fishery

The fishery at St Brandon is operated from the main island St Raphael by a private company which employs some 75 fishermen on contract. The gears used are lines, basket traps, harpoon and nets and the species captured are almost similar to those of the Mauritian artisanal fishery. All species landed are consumed, even those considered toxic in Mauritius. Up to 1980, the catch was mainly salted but from 1981 facilities for the freezing of fish were established on the island. Since then the catch has been mostly frozen. A small fishery of octopus and lobster is also exploited. Salted fish is only prepared on He du Sud, Cocos and Albatross as these islands are far from St Raphael whereas the catch around Avocaire is brought daily to the main island for freezing. All the seafood landings have been tabulated hereunder in table 6.

Table 6. Seafood landed from St Brandon in t

YEAR

Frozen

Salted

Lobster

Octopus

TOTAL

1977

-

269

-

-

269

1978

-

204

-

-

204

1979

-

211

-

-

211

1980

-

248

-

-

248

1981

118

242

-

-

360

1982

23

252

-

-

275

1983

27

181

6.2

2

216.2

1984

251

117

3.1

2.5

373.6

1985

244

206

1.8

3.5

460.8

1986

352

212

1.5

11.6

577.1

1987

220

158

3.8

2.7

384.5

1988

453

131

8.1

1.8

593.9

The landings of the other vessels operating near the waters of St Brandon are not included in the above table.

11. Species Caught

The species of fish caught on the banks are very few on Nazareth and Saya de Malha (Table 7). In fact dame berri (Lethrinus mahsena) forms at least 90% of the catch. The species in the waters of St Brandon are more numerous. In the Chagos waters red fish may at times represent more than 50% of the total catch. In one of the landings more than 20 species were identified. In Table 7 percentage of species that are landed from the various fishing grounds is given.

Table 7. Annual catch in % by species

SPECIES

Nazareth and

St Brandon

Chagos

Saya de Malha

Summer

Winter

Dame berri

88

82

86

50

Other leth.

2

2

2

2

Vieilles

4

1

2

26

Caranx

2

4

0

4

Vacoas

1

-

-

6

Cordonnier

-

3

2

-

Cateaux

-

4

-

-

Mullets

-

-

1

-

Licorne

-

-

1

-

Vara vara

n

-

-

(50)

Sacréchien

n

-

-

10

Tuna

n

-

-

2

Others

-

3

6

-

TOTAL

100

100

100

100

It will be noted that the species Vara vara (Lutjanus bohar) of the Chagos bank has not been included in the total and parentheses have been employed for an approximate percentage of 50% as this species abounds in this area and can be caught to that extent if targeted. The Vieilles (or groupers) are called red fish and find a remunerative market in Reunion Island, where red demersal fish are preferred to other species.

12. Fishing Effort

Previously, Mauritian vessels used to spend on each cruise between 15 and 22 days in fishing and the Koreans 34 to 55 days. During each year, the vessels also lost about 60 unproductive days (30 days in travel 30 days in bad weather). The average number of days in port for Mauritian vessels was about 220, whereas for Korean vessels it was less than about half as much. During the past 3 or 4 years, these data have been modified almost completely and all vessels have to spend more days looking for the fish. The reason for that could well be the relatively less space for each fishing vessel on the banks. Table 8 reveals the annual number of days of fishing and of inactivity of all vessels operating during the respective years.

Table 8 Vessels, trips, days of fishing and inactivity and landings

* Data incomplete K - chartered Korean vessel

L- Local vessel

There was no drastic decrease in the catch per fisherman day up to 1983, which could have been an indication of moderate exploitation of the stocks. The justification given for the low average productivity of the fishermen on the three largest vessels ("La Perle II", "La Perle III" and "Nazareth") was attributed to operational problems. With the new method of data collection, it has been possible to ascertain the average catch per fisherman day for the period October 1988 - July 1989 for each of the fishing grounds. When referring to Table 9 it will be noted that there has been a significant decrease in the productivity in all areas. The mean catch per fisherman day calculated on the landed weight has decreased from 100 kg to 65 kg and 70 kg on the Nazareth and the Saya de Malha banks respectively. It will be noted by referring to Appendix I that as from October 1988 data are being collected on every fishing stocks located at 5° square on each of the banks which henceforth include St Brandon,

Table 9. Annual visits, fishermen days and productivity

STB - St. Brandon; NAZ - Nazareth; SDM - Saya de Malha; CHG - Chagos
* - Incomplete data.

13. The Catch and Imports

In the sixties, only 3 vessels operated on the banks. The marketing of frozen fish was not easy, although the tonnage landed was not large. This was attributed to many factors, particularly to the low price of fresh fish and of the prejudice against frozen fish. However, the following decade saw better exploitation of the banks and the catch landed was substantial (Table 10).

Frozen fish began getting a better market by 1974 when some 4,000t were landed. The catches then decreased as some of the vessels moved out of the fishery. Since 1977 foreign (Korean) vessels have been chartered to make up the shortfall in the landings of frozen fish. The share of these vessels was 41% of the total catch of the banks in 1977 and 67% in 1979. It decreased to 31% in 1981 and was 61% in 1982.

Table 10 Annual fish landings and value at ex-quay level

Year (MR)

Landings (t)

Value (MR)

Year

Landings (t)

Value

1977

3196

17.2

1983

2284

25.7

1978

2824

19.0

1984

2363

30.0

1979

1856

15.4

1985

3830

53.6

1980

1405

15.2

1986

4627

67.1

1981

1473

19.2

1987

5451

61.6

1982

3161

37.7

1988

5140

63.3

Although there was a resistance to the consumption of frozen fish due to the erroneous conception that it was less nutritive than fresh fish, the total landings of frozen fish were not sufficient to meet local demand and the shortfall was met by imports. Talks in 1982 in schools, colleges and clubs helped to break this resistance. Incentives in various forms (reduced port dues, no tax on fuel and spare parts and no import duty on the mother vessel) to fishing companies as from that year gave a boost to the development of the industry.

However, from 1983 to 1987 the production side of the fishery expanded quicker than the marketing side which resulted in the decrease in the price to the consumers. This new economic situation acted as an incentive to the sale of the product. Coupled with the fact that people are becoming more health-conscious, the frozen banks fish has presently a ready market, with the result that the product has been in short supply during the winter period since 1988 and Government has been obliged to issue permits to import fish to satisfy local demand.

Frozen fish has been imported since 1973 but in small quantities. Consumption of frozen fish has been increasing steadily as the supply of fresh fish is inelastic thus influencing the price. The rise in standards of living together with population increases in Mauritius have led to increased demand. From 1974 to 1981, the price of frozen fish was fixed by Government decree (Table 11). In June 1981 when the control was lifted, frozen banks fish was offered at Rs 17.50 a kg to the public, an increase of Rs 4.20 a kg. The price rose again by Rs 2.00 on the 1st November 1981. Due to good catches in 1982 there had been a slump in the price in 1982. The price was again controlled in April 1987. The retail market value of a kg of frozen fish is at present Rs 18.00. The ex-quay value and the wholesale price of the product are negotiated among producers, cold store operators and retailers and stand at Rs 15.00 and Rs 16.50 per kg respectively.

Table 11. Evolution of the price of frozen banks fish in kg

YEAR

Price (Rs.)

YEAR

Price (Rs.)


1970

1.80

Feb

1982

17.00


1973

2.50

Mar

1982

15.50


1974

3.30

Apr

1982

13.90

Oct

1974

4.00

Mar

1984

16.00

Jul

1975

4.80

Jan

1985

18.00

Feb

1977

5.80

Dec

1986

12.00

Jul

1977

7.60

Apr

1987

15.00

Sep

1978

9.60

Dec

1987

14.00

Nov

1979

13.30

Jan

1987

15.00

Jun

1981

17.50

Apr

1989

18.00

Nov

1981

19.00




14. Consumption of Frozen Banks Fish

The total monthly consumption of frozen banks fish since January 1978 is given in Table 12. It appears that demand is slightly higher in the winter months (May to August) as this period corresponds with reduced landings of fresh fish. It is also a time when the banks are less exploited due to bad weather. Shortage of supply was acutely felt between November 1980 and November 1981 and the landings of 1983 (2284t) were considered to represent an oversupply of the product at that time. Presently the frozen banks fish appears to have acquired exceptional interest from the cold store operators and can even be qualified as a loss-leader.

Table 12. Monthly consumption (t) of frozen banks fish and value in million rupees at consumer's level

Table 13. Stock of frozen banks fish at the end of each month

Tables 12 and 13 give an indication of the quantity of frozen fish which goes every month through the main cold stores which market frozen fish.

The explanation to the high consumption during the first three months of 1987 is that the product was on sale at an unusually low price (Rs 6.00 per kg), which moreover coincided with the shortage of vegetables consequent to a severe drought. The glut situation in late 1986 and early 1987 was brought about by the annual sudden increase in landings as from 1984.

Table 14. Import and consumption of frozen fish (wet weight)

YEAR Imports (t) Value (MR)

Consumption

Total* (t)

Per caput (kg)

1973

269

0.60

2701

3.2

1974

904

1.39

4839

5.7

1975

939

1.88

4103

4.8

1976

1342

3.49

4054

4.7

1977

2099

7.65

5934

6.7

1978

1351

5.44

4353

4.9

1979

530

2.53

3047

3.3

1980

368

2.60

2197

2.4

1981

78

0.71

1371

1.5

1982

77

0.73

2875

3.0

1983

0

-

3236

3.4

1984

420

4.53

3072

3.1

1985

287

3.14

4367

4.4

1986

696

7.75

5678

4.5

1987

0

-

6541

6.4

1988

624

8.22

6794

6.6

*Banks fish + imported fish

In table 14 is given the annual per capita consumption of frozen fish which includes imported and banks fish and which is increasing steadily. The figures are in fresh weight equivalent and the coefficient applied is 1.2 for the conversion to gutted fish. The annual figures in this table have been computed by taking into consideration the export and change of stocks in cold stores. This explains their being different from the quantities marketed through cold stores given in Table 12.

15. Storage Facilities

The landings of the banks fishing vessels are purchased in bulk by cold stores and distributed to retailers throughout the island in isothermic vans. As explained earlier, the fish is transported in bulk in ordinary trucks from the fishing port to the cold stores during the first day of unloading. Afterwards, the fish are packed in bags. Table 15 gives the cold storage capacity available for fish, which has increased considerably during the past 3 to 4 years. More cold stores are presently under construction for the marketing of frozen food including fish. A cold store of 400t capacity is being erected at the fishing port as a donation of the Government of Japan.

Table 15. Cold storage capacity

Cold Store

Volume (m2)

Capacity (t)

Temp (°C)

Happy World

790

400

-20

New Cold Storage

1908

500

-30

Chue Wing (ABC)

1000

500

-18

Nazareth Cold Store

700

300

-18

National Cold Store

1200

600

-20

Talbot Cold Store

150

100

-20

16. Exports

Exports of frozen fish are mainly restricted to the species of the Serranidae family (groupers). The lethrinids do not find a ready market outside Mauritius. The only export market. Reunion Island, does not accept white fish to protect the interests of its fishermen who also operate on the Saya de Malha bank.

As is indicated in Table 16, the export of frozen banks fish has increased except in 1986 and 1988. During the latter year due to shortage of frozen fish the price of red fish was increased so as allow its marketing in Mauritius.

Table 16. Exports of frozen banks fish and value

Year

Quantity

Value (MR)

Percentage of landings

1981

144

4.3

9.7

1982

219

5.5

6.9

1983

209

6.9

9.1

1984

160

5.9

6.8

1985

275

9.7

7.2

1986

199

9.1

4.3

1987

404

9.5

7.5

1988

229

8

4.2

17. Discussion

Since 1977 the catch and effort data from the banks fishery have been compiled systematically and, as from 1988, more data are being elicited from the skippers. The proper interpretation of this information could help in setting the trend for the future development of the handline fishery. Moreover, the stocks of fish of each fishing grounds could in future be assessed separately which will give more control on the fishery.

The banks fishery has progressed significantly during the past 7-8 years. The conditions that prevailed during the period 1980 to 1983 are no longer valid: the frozen Dame berri has now become a premium product for the consumers and more so for the wholesalers.

The length of a trip to the banks has increased since 1983 by at least 10 days due to lower catch rates. The rise in the investment for a fishing campaign is therefore on the increase. The fixing of price at consumers' level and the annual slight increase in inflation bring along a profit squeeze of the fishing companies. In spite of low profitability, the main fishing companies persevere in their operation. Their plausible explanation to this is their "up-to-the-neck" involvement. And it is noted that all companies have been investing in side activities to diversify their businesses by operating at least 2 vessels or 1 vessel and another business so that if any one of them goes wrong the losses can partly be absorbed by the other. The administration of a second vessel or another related business does not necessitate a considerable increase in all the components of fixed costs.

The exploitation of the fishery has been on a competition basis by the local fishing companies to the benefit of the consumers through the price control mechanism. Unfortunately stocks of fish are limited and the right to engage in uncontrolled fishing could lead in the not very far future to regular trips to these fishing grounds being a feature of the past. When the effort is increased, which happened in 1987 and 1988, this brings about a decrease in catch per day for each fisherman.

Figure I. Banks fish from capture to consumer

* Points where the quality of the fish is possibly affected.

Another side effect of profit squeeze was the development of the malpractice of marketing of thawed ungutted fish as a fresh product.

The comments on the poor handling at various points in the line of production thus directly affecting the quality of the product (Figure I) still hold good: keeping the catch in the pirogue, improper gutting, long handling time in port and bad practice in the operation (switching of) of freezers.

Whether some species of the Chagos fishery are of a toxic nature is still unclear. The local population, prior to its removal, was consuming all species and no cases of intoxication were ever reported. The same remark applies to the St Brandon fishery but not to the Nazareth and the Saya de Malha banks.

18. Suggestions

The emphasis should be on further research to obtain proper knowledge of position and extents of fishable areas, nursery areas, and biology of the main species. Such data can help to determine the maximum economic yield of the fishery.

In depth research of the toxicity of the Chagos species should be carried out. The Chagos fishery can in the short run be made to produce some 500t of fish during the winter period and this will no doubt alleviate the import budget which will obviously go on increasing.

The existence of a demand for chilled fish calls for the teaching of both producers and consumers in the proper handling of this new product.

Enlistment of the cooperation of producers, distributors and retailers should be sought for the proper distribution of the product throughout the island.

Acknowledgements

I would like to record my sincere thanks to Mr. O. Sunassee, Senior Field Assistant, for his assistance in the compilation and processing of all statistical data and Mr Neil H. Sturgess, Fishery Economist of Australia.

References

BIRKETT, L.(1979).Western Indian Ocean Fishery Resources Survey. FAO/IOP/Tech/79/26. 99 p.

COUACAUD, L. (1967). L'industrie de la pêche - Revue Agricole et Sucrière de l'île Maurice, 46 p.

GULLAND, J.A. (1978). Report of the FAO/IOP Workshop on the Fishery Resources of the Western Indian Ocean South of the Equator, Mahé, Seychelles. Development Report Indian Ocean Programme 45,102 p.

SAMBOO, C. R. (1983). An appraisal of the banks fishery in Mauritius. Report No 1, 17 p.

WHEELER, J. F. G. & Ommanney, F. D. P. (1953). Report on the Mauritius -Seychelles Fisheries Survey 1948 - 49. Colonial Office Fishery Publication. His Majesty's Stationery Offices, 145 p.

WIJKSTROM, U. N. and KROEPELIEN, T. (1979). Revitalization of the Mauritian Bank Fishery: An Appraisal. FAO, Rome. IOP/Tech/79/35,56 p.

Mauritius Banks Fishery Study - Market Considerations (Paper 2)


1. Introduction
2. Production and Catch Composition
3. Imports and Exports
4. Fish Processing
5. Marketing Infrastructure
6. Fish Prices
7. Consumption and Demand
8. Conclusions and Recommendations
References


by
Max H. Morel
International Fisheries Consultant
30, Allee Victor Hugo
91620 La Ville-du-Bois, France

1. Introduction

The Government policy, expressed in the Fisheries White Paper of 1984, calls for action to increase fish production. It aims at an increase of fish consumption per caput to 20 kg by 1989, 48 % higher than 1986 levels. Considering the overfished situation of nearly all the resources presently exploited for the supply of internal markets, this goal cannot be immediately realised. Its attainment would impose a drastic increase of fish imports if the rapid development of new fisheries is not attained.

In its strategy, the Government envisages the development of offshore fisheries aiming at the exploitation of the small pelagic fish and deep water crustaceans on and around the oceanic banks of the Mascarene Ridge. There is an opportunity to expand the Banks fisheries, in particular on the Saya de Malha and Nazareth Banks, basically through the introduction of industrial trawling operations (for small pelagics) once their commercial exploitability have been proven.

For the Saya de Malha Bank alone, the maximum sustainable yield of small pelagics has been estimated to lie between 13000 and 26000 tonnes per year, excluding other species caught during the operations. This potential is mainly represented by various horse mackerels (Trachurus and Decapterus spp.).

This report on marketing seeks to confirm that quantities of small pelagics can be marketed in Mauritius, and hence that a pilot testing of industrial trawling on the Mascarene Ridge is justified. More in the context of this Workshop, the report also includes a lot of useful information concerning aspects of the marketing of catches from the Banks handline fishery.

2. Production and Catch Composition

The total fish catch taken by Mauritius vessels in 1988 amounted to some 17645 tonnes of which 7926 t were tuna destined for canning (for export), the remainder being the quantities consumed locally.

The breakdown of the 1988 catch by fishery is summarized below:

Table 1:

Type of fishery

tonnes

%

Artisanal fishery

3471

20

Bank handline fishery

6200

35

Tuna fishery

7926

43

Aquaculture

49

<1


17646

100

(fresh weight equivalent)
(Source: Ministry of Fisheries)

The tuna fishery is practiced by oceanic purse-seiners. Annual landings so far range from 3800 tonnes in 1986, to 7926 tonnes in 1988. Part of the fish is landed at Port Louis to be processed and canned by the company for export to Europe. Small quantities are marketed in Mauritius.

In 1988, 15 mother-ships managed by 5 ship owners were operated in the Banks handline fishery. These freezer vessels carry 15 to 20 fiberglass pirogues, six to seven meters long, propelled by an outboard engine and each operated by three fishermen using multi-hook handlines. The 1988 landings amounted to 6200 tonnes of fresh weight equivalent fish products against 5889 tonnes in 1986, and 6600 tonnes in 1987.

The main species caught is the "dame berri" (Lethrinus enigmaticus) which represents about 90 % of the entire production. Fish is gutted and individually frozen on board the motherships and stored in bulk without glazing.

In 1988, the artisanal fishermen also landed 2500 tonnes of fresh fish caught in and outside the lagoon of Mauritius island (excluding the Rodrigues landings).

Due to climatic constraints, the Banks handline fishery is interrupted for about 3 months a year during the winter time between June and September, while the artisanal fishery operates the whole year round. From November to April, the hot season during which the highest rainfall takes place, the islands and banks are susceptible to tropical cyclones which can at time be very destructive. This affects fishing negatively and causes temporary declines each year in the landings.

3. Imports and Exports

The internal markets are supplied from the landings indicated in the previous section (except much of the tuna as already indicated) and imports.

Exports are controlled, as the country does not have sufficient production to satisfy internal demand. Exports of fresh fish (demersal high value species) to Reunion are authorized in limited amount. There is no restriction on exports of smoked marlin. The statistics of imported and exported fish and competing products for recent years are given in Table 2.

Table 2: MAURITIUS IMPORT AND EXPORTS STATISTICS 1986 TO 1988 (Quantities: tonnes - Values '000 Rs)


1986

1987

1988

Quantities

Value

Quantities

Value

Quantities

Value

A. Imports:
1. Fresh/frozen fish

4595

51200

3354

42208

2600

34240

2. Salted & smoked fish

613

1168

340

12798

258

5318

3. Crustaceans

237

13213

345

15834

481

25900

4. Canned fish

1699

31258

1233

24883

2481

41543

5. Meat Bovine

8932

135645

12441

183938

4555

80693

6. Other meat

441

11870

654

20157

6957

104014

7. Chicken

9

261

234

3787

1297

20632

B. Exports:
Fresh fish (excl. Tuna)

88

8894

86

9208

404

23104

Frozen fish (excl. Tuna)

199

8957

404

9510



Dried/salted/smoked

186

7231

116

5507

43

6757

Canned Tuna

2944

105236

2936

99511

4207

169197

The major import components of canned fish are represented by small pelagics, mainly sardines, mackerels, and pilchards. During these last three years, the

Mauritian authorities have started to authorize, in limited quantities, frozen fish imports. The increase in the imports of canned pelagic fish occurred after the closing down of the United Canning Company fish canning line.

Export of fresh fish to Reunion is around 60 tonnes per year, essentially represented by redfish. Smoked fish, particularly smoked marlin, is shipped to various countries, such as Réunion and Europe.

4. Fish Processing

.Mauritius has a tuna canning plant, the Mauritius Tuna Fishing and Canning Enterprises Ltd. Its output is directed to export markets in Europe where 4207 tonnes (net weight of canned product) were shipped in 1988. Two additional tuna canneries are expected to be set up by 1989/1990.

United Canning and Processing. Company has been producing canned fish such as pilchards in tomato sauce, mackerels and horse mackerels mainly for the local market. The company was exclusively depending on import of raw material to ensure its production. In 1987, this firm produced about 1000 tonnes of canned fish products. Late in 1988, the company closed down its fish canning production due to lack of regular supply of quality raw fish.

Other processing plants for filleting fish landed from the Banks handline fishery are projected. These operations intend to pack the produce in consumer vacuum bags. This process will create new lines of value-added products for which there is no controlled price. However, the firms will have to use finfish, mainly "dame berri", increasing the scarcity of the fish on the retail market.

Two plants are producing smoked marlin essentially for export to Europe. They are also increasing their sales on local markets, particularly to tourist hotels and restaurants, including air catering. Their production is seasonal, concentrated in the months of September to March.

Salted and dried fish products come from St Brandon where fishermen process 'traditionally sun-dried fish to be marketed on the island of Mauritius. In addition, two firms, SESKEL Enterprise Ltd and Ocean Products Ltd, process wet salted fish, "snoek" (Thyrsites atun). The raw material is imported from South Africa and New Zealand. In 1988, total consumption of salted fish and snoek amounted to 752 tonnes.

5. Marketing Infrastructure

The marketing paths for the artisanal catch of Mauritius island are short. The catch from small pirogues is disposed of partly at landing stations but mainly in fish markets at prices determined by supply and demand. Artisanal fishermen who are not committed with cooperatives may sell their catch to wholesalers and specialised fresh fish retailers. Some 360 of these are registered with the Ministry of Fisheries.

Fish is generally sold by weight, whole or in pieces in the case of big fish.

The fish caught by the artisanal fishery in Rodrigues is marketed locally as fresh product. Certain valued species, however, namely redfish and octopus, are frozen to be marketed in Mauritius. The fish caught by the fishery in St Brandon is partly frozen and partly salted and sun-dried to be marketed in Mauritius. The fish from the Banks handline fishery is gutted and frozen on board the fishing vessels.

Ice production is sufficient for the artisanal fishery, but is not normally used at retail markets. Traditionally, the presence of ice on fish is interpreted by consumers as meaning that it has not been recently caught.

Landing facilities at Port Louis for the Banks frozen fish are presently inadequate. The extension of the fishing harbour of Port Louis started in March 1989 and Phase II is expected to be accomplished by March 1990. The project includes a cold store of 250 tonnes capacity, to be operational by September 1990. This coldstore will be managed by the Marketing Board.

Most of the fishing companies have commitments with major distributing enterprises six of which control 90 % of the market (Appendix I). Some of the distributing companies have import permits for frozen fish but only a number have actually imported frozen fish (from New Zealand and South Africa).

The present structure of trade in frozen-fish is simple and marketing chains are short and well organized. Distribution is only between producers (e.g. Fishing companies), wholesale distribution companies and retailers, the latter being provided with various frozen products such as meat and chicken. The domestic market share of the distribution companies varies and depends on other foods handled with fish. The retailer has a prominent role in the distribution network.

The existing cold storage capacities are more than adequate for the needs of the fishing industry, although space for fish depends on stocks of other frozen foods.

Transport from Port Louis is made by distributors having their own truck fleets, organizing deliveries through the country to retailers disposing through freezer cabinets. Fish retailers within the city as well as processors pick up their needs directly at the cold store.

Most of the vehicles used for the movement of frozen fish, especially those belonging to the distributing companies, are recent and well maintained. Most are insulated and average capacity ranges around 4 tonnes. Fish is generally carried by insulated truck, while refrigerated trucks are used for ice cream, frozen butter and similar foods.

Shops retailing frozen fish and having freezer cabinets must be officially registered with the Ministry of Health. In 1988 there were 1548 of these shops. Their locations are indicated below:

Districts

Numbers

Port Louis

223

Flacq (Central area)

173

Flacq (Bel Air)

70

Moka

30

Plaines Wilhems (High)

326

Plaines Wilhems (Lower)

212

Black River

62

Grand Port (Rose Belle)

123

Grand Port (Mahébourg)

116

Savanna

58

Pamplemousses

62

Rivière du Rempart

93

Total

1548

(Source: Ministry of Health)

The frozen fish retailers also constitute the main outlets for canned fish imported by some 25 companies.

6. Fish Prices

Maximum prices for frozen fish from the Banks handline fishery are controlled under regulation (G.N. N°. 73 of 1989 under the Supplies Control Act) administered by the Ministry of Trade and Shipping. In these regulations, frozen fish are categorized as follows:

a) Frozen red fish includes: Vieille Rouge, Sacréchien, Vieille Babonne, Vacoas, Vieille Grise, Gueule Pavée, Tirouge;

b) Frozen white fish includes: Capitaine, Berri, Cordonnier, Carangue, Thon, Cateau, Mulet, Licorne, Caya, Breton, Rouget.

The Supplies Control Act does not mention small pelagics such as Indian scad, horse mackerels and similar species.

The maximum retail prices at which frozen fish may be sold in Rupees per half kilo are:

Category

Whole

Without head

Head only

Frozen Red fish Frozen White fish

15.009.00

9.50

1.75

One Rs per half kilo of profit margin is allowed to distributors.

According to landing figures, frozen white fish represents approximately 90 % of catch. The retail price for dried salted fish is also controlled. The locally processed 'snoek' cannot exceed Rs 15.50 per half kilo, while Rodrigues salted fish is sold at a ceiling of Rs 17.00 per half kilo.

Prices for imported frozen fish products are controlled by the following mechanism:

Calculation starts from CIF price with added duties (17 %), plus 2 % for depreciation allowance, plus 8 % for wholesaler margin. Rs 1.35 per kg is added to the above total for cold storage and distribution costs. The total amount represents the distributor's selling price. 'The retail margin is fixed at 10 % plus 1 % of the wholesale price for depreciation.

Prices for imported canned fish products are controlled by the same mechanism as frozen fish products, except for the various rates:

Calculation starts at CIF price with added duties, plus 2 % for depreciation allowance, plus 9 % for wholesale margin covering distribution and storage costs, the retail margin is fixed at 7 %.

In case the operators find the profit margin too low, they make a request to the Ministry of Trade and Shipping to seek higher prices. After analysing the accounts of the producer, higher prices may be acceded to.

7. Consumption and Demand

Fish and meat are the main sources of animal protein in Mauritius. The bulk of the meat consumed is imported and is not consistently available for all segments of the population. Present per capita fish supply is placed at around 15.3 kg a year. In terms of wet weight, supply varied from 11723 t in 1983 to 16680 t in 1988.

Demand for fish is strong among the urban population. The consumer has particular preferences for certain species. The hitherto strong demand for dry-salted as well as canned fish in the interior is slowly diminishing with higher purchasing power of a substantial part of the population due to industrial development and improved marketing activities of the distributors.

Observations in urban markets indicated that they are under-supplied, and this could well be true of the rural markets. Certain areas are not sufficiently supplied by frozen fish distributors in the winter season, as well as because of irregular supplies from fishing companies.

In October 1983, a Socio-Economic and Nutritional Implication of Rice and Flour Substitution in Mauritius study was conducted by the Ministry of Health under a UNDP/FAO project:

The contribution of bread, meat, fish, eggs, milk and milk products in the average meal increases with income. The increased consumption of animal protein with increasing income is reflected in the protein-energy ratio from 10.1 % for income class below Rs 1000 to 11.9 % for income class Rs 5000 and above. The proportion of total protein intake which comes from animal sources (meat, fish, eggs, etc.) ranged from 30.4 % to 47.2 %, with an average of 33.2 % for all income classes combined.

A general consumption survey was conducted from May to July 1987 by the Ministry of Health and called "Health, Nutrition and Productivity of Workers in the Export Processing Zone (E.P.Z.)". The survey was executed on a sample of 1990 low income workers in a stratified sample of 55 factories.

According to this survey, it appears that 74 % of this population consumes weekly 44 grams of fresh/frozen fish, 31 gm of salted fish and 23 gm of canned fish.

In a country where fish is an important food item, it is reasonable to expect that this commodity should be available to the local population at affordable prices. This is the rationale behind the Government's system of regulated prices to the consumer, which it makes a serious effort to enforce.

8. Conclusions and Recommendations

Estimated quantities to be sold to the internal market

The Banks handline fishery production is projected to be 485 tonnes per month during the 9-month season. Assuming a market fully supplied by demersals from this fishery the additional supply needed for the remaining 3 months should be approximately 1500 tonnes.

The canned fish market imported 2481 tonnes in 1988 (1233 tonnes in 1987). Assuming that the difference (1248 tonnes) can be met by the supply of small pelagic fish from the banks, the wet weight demand is about 2000 tonnes.

According to the World Bank report, (Report No 7661-MAS - July 10, 1989 -Mauritius Managing Success) the population growth is estimated at 1.4 % per year. By 1990, the population will have grown by 14500 persons. At the present consumption rate of 16 kg per caput, an additional production of 250 tonnes of fish will be required annually.

From 1987 to 1988 the meat consumption decreased by 1583 tonnes in favour of chicken and fish. It can be projected that if fish was available, the deficit in meat consumption might have been fully met by fish.

The existing market can be summarized as follows:

a) Production shortage from Banks handline fishery during winter

1500 t.

b) Replacement of canned fish

2000 t.

c) Growth in population (per year)

250 t.

d) Meat replacement

1600 t.

Total market opportunity

5350 t.

If the Government policy of increasing per capita consumption to 20 kg/year is maintained, an additional 5000 t of fish would be required, bringing the total domestic demand for small pelagics to 9350 t.

It should be noted, however, that, since that figure was proposed, the supply of animal protein, chicken in particular, has increased sharply, which might invalidate the original projections.

Hygiene and quality issues

The Banks demersal fish is gutted on- board pirogues without ice and waits under the sun until the mothership is boarded. The fish is sometimes improperly gutted, cleaned and washed. It might wait again prior to being frozen. During such a waiting time, fish starts to develop bacteria and enzymatic evolution, deteriorating the quality before freezing. The freezing operation stops this degradation but does not restore quality.

At the point of landing frozen fish is poorly packed in bags or put in bulk in large cage-pallets for storage. The fish is landed by hand from motherships to trucks, often uninsulated, by stevedoring companies. This creates abnormally long unloading periods. Moreover, in certain companies, temperatures in coldstore rooms are brought back to -5° -8°C at the workers demand during working shifts. This practice is detrimental to fish quality and results in a high weight shrinkage factor.

Deterioration also occurs at a number of retail shops where the unhygienic habit has been taken of turning off freezer cabinets during the night hours or of displaying fish waiting for sales out of the freezer and putting back what is not sold. Equipment at points of sale are generally too old, and high temperatures were observed.

Scrupulous attention to hygiene regarding fish handling, both on board and on land, is of crucial importance in ensuring satisfactory quality, for both the local customers and in respect of export products.

Catcher boats in the Banks handline fishery should carry tanks of sea water chilled by ice supplied by the motherships. The fish should be gutted and cleaned in a sheltered environment on board, then frozen with a normal glazing of approximately 3 % and layer packed in 25 kg master cartons. Proper packing of fish is necessary to protect it for hygienic reasons, to avoid desiccation and to ease handling and storage.

It is recommended that transport of frozen fish products should not be authorized without, at least, insulated trucks. Temperature control should also be strictly enforced along the outlet chain, in order to preserve the quality of fish up to the consumer.

Prices

Prices are regulated by the Government, both in respect to producer and consumer prices. There are a number of anomalies, however, in the prices of locally produced fish. The margin between producer price and retail price is 1 Rs per half kilo. No allowance is made for cutting wastes, which can be as much as 8 to 10 % and cannot be absorbed by the margins allowed to retailers. Thus, there is a direct link-up between quality improvement and final cost of fish. Attaining a better quality product would require the following:

- Equipment such as refrigerated containers for iced seawater to be kept on board of pirogues;

- ice machines on board motherships to supply pirogues during fishing operations;

- a sheltered and air-conditioned processing locale aboard motherships for gutting and cleaning the fish;

- additional crew for the gutting and cleaning;

- packaging aboard in cartons instead of present bulk handling, which will require equipment and consumables.

All of these specifications will generate increased production costs, for which retail prices must be allowed to rise.

Government should consider abandoning price fixing on the Banks demersal fish as and when small pelagics become available as a substitute reference fish for low income groups. This should be associated with the application of a code of practice and a quality control inspection service to improve product quality. This will certainly result in a rise in price of the demersals and the small pelagics will become the primary supply of cheaper fish to the population.

Quality control

The Ministry of Health inspects approximately 1600 retailers equipped with freezer cabinets, plus 10 supermarkets and 15 high class hotels. No control is exercised aboard the vessels, at the landing site in Port Louis or in cold stores.

Any recommendations regarding quality fish cannot survive without an efficient quality control on the whole distribution chain from production to the consumer. The Ministry of Health services, in spite of efforts to satisfy a minimum control, are unable to realize a sufficient influence through lack of staff. The staff also has to cover too diversified a product market (fish, meat, chicken, butter and so on).

The basic concern of food inspection services under health authorities are with public health issues. Where fish is concerned, loss in quality occurs well before any health hazard is created.

It might thus be appropriate to organize a quality control service particularly trained for the fishing industry, under the responsibility of the Ministry of Fisheries.

Market opportunities for small pelagic fish products

Marketing of species less favoured by consumers is not easy, as it takes time to change consumption habits. Demersals and large pelagics are presently most appreciated by the local population. Nevertheless, efforts have to be made to build up new outlets for small pelagic fish landed from the Saya de Malha Bank as a substitute to shortfalls in the supply of Banks fish.

Some consideration should be given to the following factors:

- the small pelagics have many bones and are, for children, not easy to eat;

- fish products generally will lose part of their quality during prolonged storage due to possible temperature fluctuations; storage and interest costs represent a negative point for such an operation;

- fat content does not appear to be a consumption barrier (7 to 8 % for horse mackerels);

Of the small pelagics, Decapterus (Indian scad) has the best chances, being more compatible with Mauritian preference and consumption habits or taste.

In the winter season, the lack of frozen fish supplies from the Banks handline fishery should facilitate frozen small pelagic sales. Deliveries to institutions such as hospitals, army, police, etc. should be encouraged.

Price acceptability by type of fish and presentation

The local demand resistance for pelagics starts at dame berri price level. The price acceptability curve for pelagics at dame berri price and lower will follow dame berri availability. To reach the objective of supplying fish to a larger section of the population, small pelagics will need to be retailed at a lower price than the dame berri, in the range of Rs 8.00 to Rs 9.00 per half kg.

Present imports of headless gutted jack mackerel are at US$ 960 to 1000 per t CIF Port Louis, plus duties (17 %) ie. Rs 17300 to 18000. Transactions include terms of payment of 2 to 3 months. They are retailed headless gutted in sizes, of 400/700 g at Rs 11.50 per 1/2 kg. While this confirms that scads can be sold on the Mauritian market, these prices seem to be considerably higher than current international rates.

References

Report of the FAO/IOP Workshop on the Fisheries Resources to the West Indian Ocean South to the Equator UNDP/FAO IOFC/DEV/79/4 January 1979

Western Indian Ocean Fishery Resources Survey UNDP/FAO/IOP/TECH/79/21979

Proceedings of the Workshop to the Assessment of the Fishery Resources in the South West Indian Ocean - SWIO Document -RAF/79/065/WP/41/88/- September 1987

Munbodh M., 1979, Fisheries in Mauritius Achievements Problems and Prospects -Ministry of Fisheries

Paul B.E.C., Fisheries Development and the Food Needs of Mauritius, Earth Sciences, Macquaria University North Ryd Australia 1983.

World Bank Report No 766 MSS Mauritius Managing Success July 10,1989.

Schoemaker, R, 1986, Mauritius Cold Storage Facilities and Practices for Fishery Products - FAO/SWIOP.

Programming and Project Formulation Mission Mauritius FAO/TCP/MAR/6651 Mission Report 1986

Giudicelli, M., Mauritius Mission Report 5/1 July 1986 FAO/FI DP/MAR/83/006 February 1987

Health Nutrition and Productivity to Workers in the Export Processing Zone Volume I II September 1987 Ministry of Health

West African Market for Small Pelagic Fish INFOPECHE ABIDJAN 1989

Lens D.J and M Giudicelli, 1988, Review of Marine Capture Fisheries FAO/DDC Report No 13/8 D MA February 1988

National Development Plan 1988-1990 Programme and Policies Ministry of Economic Planning and Development in Mauritius.

Final Report of Investment Review of UNDP/FAO Project MAR/83/006 Advanced Pelagic Artisanal Fisheries in Mauritius February 1988

Appendix 1. List of Fishing Companies


Address
(a) Mauritius Fishing 33 Volcy Pougnet Street

Development Ltd. Port Louis


(Tel. No. 080286)



(b) Talbot Fishing Co. Ltd. New Mauritius Dock


Port Louis


(Tel. No. 081536



(c) Ben High Seas Fishing Co. Albion Dock


Farquar Street


Harbour Building


Port Louis


(Tel. No. 25298)



(d) Hen Sin Chang Fishing Co. 38 Jummah Mosque Street


Port Louis


(Tel. No. 085604)



(e) Sea Falcon Ltd. 9 John Kennedy Street


Port Louis


(Tel. No. 081661/5)


Telex: 4623 Sea/Fish



(f) The Mauritius Tuna Caudan

Fishing & Canning Port Louis

Enterprises Co. Ltd. (Tel. No. 23746)



(g) Trident Food Ltd. c/o Happy World Group


Remy Oilier Street


Port Louis

LIST OF MAIN DISTRIBUTORS IN FISH PRODUCTS

(a) New Cold Storage Riche Terre

(Tel. No. 26576)



(b) National Cold Storage 35, La Perousse


Eau Coulee


(Tel. No. 66833)



(c) Seskel Enterprises Ltd. St. Michel Road


Riche Terre


(Tel. No. 26541)



(d) Happy World Group Remy Oilier Street


Port Louis


(Tel. No. 25001)



(e) Panagora Marketing Pont Fer

Co. Ltd. Phoenix


(Tel. No. 63034)



(f) ABC Store 49 Queen Street


Port Louis


(Tel. No. 21686)

Some Economic Aspects of the Mauritius Banks Fishery (Paper 3)


1. Some Characteristics of the Banks Fishery
2. A Model of Operating Costs
3. Implications of the Analysis and Suggestions for Change
4. Acknowledgements
5. References
Appendix 1. The annuity method used to estimate annual capital cost
Appendix 2. An introduction to fishery management instruments and concepts


by
Neil H. Sturgess
Consultant
89, Gladstone Street
Kew, Vic. Australia

1. Some Characteristics of the Banks Fishery

Fish are caught on the banks from dories (or pirogues) each manned by three fishermen using handlines. A mothership carries 10 to 20 dories and the fishermen to the banks. After capture, the fish are frozen and stored on the mothership. The fishery, its history, production and its fleet have been described fully elsewhere and will not be repeated here (Wijkstrom and Kroepelian 1979, Samboo 1983; Samboo 1989). Rather, we will concentrate on those characteristics which bear on the development of a management programme.

The fishery is multi-species, but on most banks Lethrinus mahsena accounts for about 90 percent of the catch. The exception may be the most distant bank (Chagos) where it has been suggested that up to 50 percent or more of the catch could contain various species of "red fish" if the right techniques were used. Many types of red fish are considered toxic and, by regulation, unsaleable in Mauritius. This apparently contrasts with local knowledge on Chagos where red fish are not considered toxic. Some export of red fish to Reunion has taken place; the marketing regulations on Reunion permit the sale of small red fish. The question of the toxicity of red fish from Chagos will be considered in more detail later in this report.

The fishery is operated on many fishing grounds. At least each bank could be regarded as a separate stock, each having a different response to effort (sustainable yield curve) and a different cost structure depending on distance from Mauritius. It is possible, of course, that any given bank may contain a number of separate stocks. This seems likely on the largest bank - Saya de Malha. The effort, measured in fisherman-days, catch (tonnes) and catch per unit effort for Nazareth and Saya de Malha are set out in Table 1 for the period 1983 to 1988. These data exclude the catch and effort of Reunion on Saya de Malha but a similar picture emerges if the Reunion fishing is included.

Table 1: Catch and Effort for Nazareth and Saya de Malha Banks (1983 - 1988)

YEAR

NAZARETH

SAYA DE MALHA

CATCH (T) EFFORT (FM-DAYS) CATCH/EFFORT CATCH (T) EFFORT (FM-DAYS) CATCH/EFFORT

1983

920

7362

0.125

1245

14130

0.088

1984

1106

10847

0.102

828

12597

0.066

1985

1072

10813

0.099

2207

23204

0.095

1986

1200

10611

0.113

2767

214925

0.111

1987

1475

17818

0.083

3363

36955

0.091

1988

1429

19730

0.072

2651

39039

0.068

The effort and catch figures in Table 1 were derived from fishing logs maintained by skippers. Although the data are imperfect, they show that Nazareth conforms to the "usual" expectations about catch/effort, that is, catch/effort decreases as effort increases. Saya de Malha, however, is more erratic in its behaviour. This could be explained by the exploitation of different stocks on the bank, notably in 1985. Ideally, every stock would be managed separately because of their different capacities to generate profits.

On any trip, most vessels will fish several banks and it is difficult to distinguish between the fish from different banks. To manage every bank as a separate entity would require details of yield and cost, and a cost-effective means of policing and enforcing separate management. The distance of all banks, particularly Saya de Malha and Chagos, from Mauritius would seem to mitigate against management instruments which require "on-the-water" monitoring. Mauritius at present has only one sea-going coast guard vessel.

The growth of the banks fishery has been fostered by the Mauritian Government on several fronts. In line with the Government's aims to increase total fish consumption to 20 kg/head/year, to stimulate the consumption of frozen fish and to develop the fishery to replace imports of frozen fish, the Government has controlled the retail price of frozen Banks fish, the exception being the years 1981 to 1987. While this has increased the consumption of Banks fish it has also acted as a brake on fishing effort, as argued below. Possibly to counter the effects of holding price below that which would exist in an unregulated market, there have been a number of financial incentives to fishing companies which tend to reduce the cost of effort. These include concessional harbour dues, reduced duties on items used in freezing fish and fuel and concessional loans. The end result of these forces may have been an increase in fishing effort such that there is now concern about the catch per unit of effort, notably on Saya de Malha. This concern is expressed by both the Ministry of Agriculture, Fisheries and Natural Resources and by most fishing companies.

Most of one bank (Saya de Malha) is outside the EEZ of Mauritius. In a strictly legal sense this creates problems for a Mauritian management programme for that bank. It could not be imposed on fishermen from other nations unless there was mutual understanding to accept and abide by Mauritian management.

Mauritius is the major user of the demersal stocks of Saya de Malha and the major market for the fish. Until about 1983 vessels from Reunion caught about 800 t of fish on Saya de Malha, but probably as a result of rising cost due to the distance from Saya de Malha and declining catches per unit effort. Reunion's exploitation of the bank has declined markedly in recent years. This need not be a permanent situation, particularly if catch per unit effort were to increase as a result of measures initiated in Mauritius.

It seems necessary that Mauritius and Reunion open negotiations on the utilization of the bank to their mutual benefit. In doing so it should be borne in mind that if any "rights" of access were established they should be tradeable between countries if economic efficiency is to be achieved - for similar reasons that individual transferable quotas (ITQs)1 can lead to an efficient fishery within a country. Other possibilities which might be considered are that one country might contract with fishermen in the other to supply effort, or that they have free trade in fish. In the meantime, the fact that Mauritius does not have exclusive control over Saya de Malha may mitigate against management instruments (such as licences and ITQs) which would bestow rights on Mauritian fishermen. Or, Mauritian fishermen would need to accept the fact that these were severely attenuated rights because they would not grant exclusive use.

1 An introduction to fishery management instruments and concepts is provided in Appendix 2.

As suggested in Appendix 2 there is one aspect of policy for the banks fishery which acts as a de facto management regime. This is the practice of fixing the price of frozen whole fish from the banks. There is good reason to believe that the fixed price is below the price that would exist on an unregulated market. Indeed the policy exists so as to hold down the price of the commodity to help increase the consumption of this substitute for dwindling supplies of fresh fish and to reduce imports. At present, the retail price is Rs 18/kg with an ex-quay price to the vessel of Rs 15/kg. Informed sources suggest that an open market at the present time would see an ex-quay price of between Rs 20 and 23/kg. Also, during a period when price control was removed (1981 to 1987) price increased and the increase was a reason to re-introduce controls. It is also evident that effort increased when prices were deregulated.

I do not propose to discuss the pros and cons of price fixing as part of a food policy. That is a question which has wider implications than the banks fishery and is beyond the terms of reference for this study.

The interesting aspect of price control for the Banks fishery is that the policy can produce the same effects on the fishery as a tax on catch. This is, the total revenue curve (say, TR in Figure 2 of Appendix 2) is forced downwards and, if the price were fixed at the appropriate level, the policy could produce the same total revenue curve (TR 1 in Figure 2) as optimal tax. The result would be that at the "optimal" price. El units of effort would be produced (the term "optimal" price is used only in this context).

Therefore, as long as the other objectives of price control remain relevant, it may be sound policy to continue to use price control as the main management instrument for the fishery. The other advantage is that the monitoring and enforcement mechanisms for price control are in place and working. The principle of price control seems to be accepted by most fishing companies, but not necessarily the level at which price has been set.

There are, however, differences which should be analyzed between a fixed price and a tax on each unit of catch. The first is that, in the case of a tax, the net revenue over normal returns (TR-TR1 in Figure 2) is appropriated by Government. With a fixed price it is passed directly to consumers as lower prices. Thus, it appears that there could be a large re-distribution of income with consumers as the major beneficiaries. In the case of a tax on catch, more discretion would lie with Government as to how to re-distribute the resultant revenue.

Secondly, price control is not solely for fishery management and has its repercussion on the fishery as a side effect. This means that the other objectives could over-ride the management role. Therefore, the price-fixing process may not account for changes in conditions in the fishery as well as a tax mechanism which functioned solely as a management instrument. This would be most serious if estimates of sustainable yields were low, such that the optimal quantity of effort was greater than El (in Figure 2). A tax could be adjusted to allow this, but a fixed price may not be adjusted so easily for this purpose. Input subsidies could correct the problem but in a less directed fashion and could produce distortions. Conversely, it is possible that the price could be set too low to produce the desired effort in the fishery. One way around this problem would be to formalize the management function of price-fixing and use this as one of the criteria when fixing the price. It appears, in practice, that this is done in an informal way.

The retail price is reviewed by the Ministry of Trade and Shipping after receiving a request to do so from the Fishing Companies, providing the catch of those companies is a major proportion of the total catch. The major evidence considered is cost of production estimates submitted by those companies. The Ministry attempts to strike a balance between the price which would give companies a "fair" return on invested capital, the expected effect of that price on future supply and a price which would be acceptable to consumers. The producer (ex-quay) price is then negotiable between the retailers, wholesalers and Fishing Companies. The most recent price change occurred in March 1989 when the retail price of white fish was raised by Rs 2/kg to Rs 18/kg and the producer price rose from Rs 12.80 to Rs 15/kg. Interestingly, this represented a slight narrowing of the margin between the retail price and the producer price. It is assumed that the current mechanisms for initiating a review would require alteration if a decrease in producer price were appropriate for management purposes.

Thirdly, price-fixing may not be a feature of Mauritian food policy for all time. Therefore, some other mechanism would need to replace it if it were abolished. Under the circumstances, a tax on catch may be the logical successor.

2. A Model of Operating Costs

2.1. Introduction

Using information made available to me by the major fishing companies and on the basis of discussions with members of most operating companies, I have constructed the model of fishing costs which is described in this section. The purpose of the model is to estimate the total costs of fishing effort and to derive average costs per unit of fishing effort and per kilogram of catch.

I have used a model of a hypothetical vessel rather than the actual costs per vessel of the operating fleet for the following reasons:

* all the information on which to do the latter was not available;

* to preserve the confidentiality of information;

* in 1988, 13 vessels, ranging in length from 27 m to 60 m, operated in the fishery. Four vessels made only one or two trips per vessel, while six vessels made five or six trips. To the extent that any costs estimates may influence the determination of future prices, those estimates should be based on the operation of an "efficient" vessel. The cost structure of the average vessel is unlikely to reflect that of an efficient vessel; and

* most fishing companies are diversified businesses, of which bank fishing is only part, albeit a major part, of their activities. Thus, the allocation of overhead costs to the banks fishing activity would be arbitrary.

The hypothetical vessel is assumed to be dedicated to the banks fishery and to be "moderately" above-average in efficiency. It has the following characteristics:

* it is a 15 years old converted tuna longliner 4 m LOA, 1000 HP main engine with 2 x 300 HP auxiliary engines;

* it has a blast freezer capable of handling 12-15 t per day and cold storage of 140-150 t;

* it carries 15 pirogues and 20 outboard motors;

* it carries a crew of 26 including 12 cold room workers ("frigoboys") and 45 fishermen; and

* with appropriate repairs and maintenance it has an expected life span of 10 years on the banks fishery.

The analysis considers the following major cost items:

* capital cost;

* annual (non-capital) fixed costs incurred in running the vessel and the onshore support facilities; and

* the costs of making a trip.

2.2. Capital Costs

The purchase price of the vessel, landed in Mauritius, is assumed to be Rs 5 million (possible range, Rs 3.75 to Rs 7.0 million). To equip it for the fishery it will need repairs and modifications, replacement of refrigerant and accommodation for fishermen. The following costs are assumed:


Rs

Purchase price

5000000

Repairs and modification

250000

Refrigerant (2t x Rs 88/kg)

176000

Accommodation for fishermen

124000

Total capital invested in vessel

5550000

In addition, 15 fibreglass pirogues are required at a purchase price per unit of Rs 26660. Pirogues are assumed to have a useful life of 7 years (range of estimates 3 to 10 years). Twenty outboard motors (1/pirogue plus 5 spares) with a useful life of 2 years (range 1 to 3 years) are assumed to cost Rs 17000 per unit. On-shore facilities (office and store) are rented but the business is assumed to invest in a truck and have one-half of the use of a car. Table 2 sets out the capital invested and the annual cost of that capital.

Table 2: Capital Investment and Annual Capital Cost (Rs '000)

ASSET

INITIAL VALUE

LIFE (YRS)

SALVAGE VALUE

ANNUAL CAPITA COST AT INTEREST RATE OF

10%

15%

Vessel

5550

10

100

887

1086

Pirogues

400

7

0

82

96

Outboards

340

2

0

196

209

Truck

250

8

30

41

49

Car (one-half)

100

8

10

19

20

Total

6640



1225

1460

The annual capital cost is estimated by the annuity method. It is the (constant) amount which must be set aside each year which, at the given rate of interest, would produce a fund at the end of the asset's life equivalent to the alternative earnings on the original capital sum invested. In effect, this method accounts for both the loss of value of the asset (depreciation) and the alternative earning rate on capital.

In our model, annual running costs and the price of fish are assumed constant over the life of the vessel, that is, inflation is not considered. The appropriate rate of interest to use in these circumstances is the "real" or inflation-free interest rate. With market rates of interest in Mauritius of 15 percent and an inflation rate of 8 percent, the real rate would be approximately 7 percent. To this we can add a premium to reflect the risk involved in a fishing enterprise. The magnitude of this premium can only be guessed; we consider two values - 3 percent and 8 percent - to give "real risk-adjusted" interest rates of 10 percent and 15 percent.

The formula to determine the annuity (annual capital cost) is:

A = CRn (R - 1)/(Rn - 1)

where A is the annuity, C is the original cost of the item R = (1+i), where i is the interest rate as a decimal fraction and n is the number of years of useful life. An example of the logic of this method is set out in Appendix 1.

2.3. Annual (Non-Capital) Costs

These have two components, namely, those associated with the shore-based support facility and those unavoidable costs associated with the vessel.

2.3.1. Shore-based Costs

The shore base - a rented office and store (godown) - is assumed to have a staff of:


Rs

2 Watchmen (2 x Rs 1500/month)

3000

1 Secretary/typist (Rs 2000/month)

2000

2 Clerks (2 x Rs 2000/month)

4000

1 Messenger (Rs 1800/month)

1800

1 Shipping Clerk (Rs 3000/month)

3000

1 Manager (Rs 9000/month)

9000

8

22800

Annual costs are:


Rs

Staff wages (12 x Rs 22800)

274000

National Pension Scheme (Shore staff + crew)

109000

Vehicle running costs (Rs 5000/month)

60000

Rent (Rs 3000/month)

36000

Telephone, rates, fees and all consumables (estimates)

40000

TOTAL

519000

2.3.2. Annual Vessel Costs

Not all costs associated with the vessel are of a fixed nature. Some, for example repairs and maintenance of the vessel and pirogues, will depend on the number of trips as well as the passage of time. With the information available, it is not possible accurately to separate such costs into fixed and variable components; therefore, vessel repairs and maintenance are assumed to be an annual cost while repairs and maintenance of pirogues and outboards are regarded as a variable cost associated with each trip.

It is assumed that a vessel of this size will have a crew of 14 appointed on an annual basis (or, at least, on six-monthly articles). The composition of the crew is as follows:-

1 Skipper
1 Mate
1 Chief Engineer
3 Engineer/mechanics (various grades)
1 Electrician
2 Cooks
1 Galley boy
4 Deckhands

Cold room workers ("frigoboys") are assumed to be appointed each trip. Food cost for the crew is an annual cost while food for fishermen and frigoboys is a trip cost.

The annual vessel cost are estimated to be:


Rs '000

Wages for crew

960

Food for crew (14 x Rs 30/day x 360 days)

151

Harbour dues

50

Repairs and maintenance (vessel)

500

Insurance-vessel (4 percent of value)

222

TOTAL

1883

The vessel repairs and maintenance are estimated at 9 percent of the original capital expenditure and accords with actual expenditures. Few vessels in the fleet are fully insured, therefore, actual total cost will be less than the figure derived here. In that case, of course, the vessel owners must carry considerably more risk.

2.3.3. Trip Costs

These are the costs which vary with the number of fishing trips made by the vessel. They will also depend on the length of the trip. It is assumed here that each trip is 50 days and that travelling and bad weather will occupy 12 days, leaving 38 fishing days per trip. During each trip the 45 fishermen are, therefore, able to expend 1710 fisherman-days (45 x 38) of effort if there is no accident, breakdown or sickness. It must be emphasized that accident or sickness represent a considerable risk. Due to the remoteness of the banks, mishaps or illness often mean that the ship must return to port or lose fishing days transferring the affected fishermen to another vessel. The sensitivity of total cost to the number of fishing days is investigated later.

The costs per trip were assessed as follows:


Rs '000

Payment to fishermen (including bonuses)

310

Wages of frigoboys (12 x 1.7 months x 2500/month + bonuses)

60

Fish bonuses and end-of-year bonuses for crew

72

Fuel - diesel (85 t x Rs 2940/t)

250


 

- oil (12 drums (44 gal.) x Rs 3000) drum

36

- outboard motor spirit (282 I/day x 38 days x Rs 4.2/1)

45



Water 6
Refrigerant top-up (100 kg/trip x Rs 88/kg

9

Fishing equipment (Rs 1000/fisherman x 45 fishermen)

45

Food for fishermen and frigoboys (57 x 50 days x Rs 30/day)

86

Repairs & maintenance

23


 

- Pirogues (Rs 2500 x 15)
- Outboards (Rs 2000 x 20)

40

Unloading 25
Insurance 20
Sundry Expenses

20

TOTAL

1047

The payment per kilogram of fish to fishermen and all bonuses are commercially sensitive information. The amounts shown here are typical "orders-of-magnitude" and do not imply any particular structure of rates of payment. Figures are based on a catch of 125 t per trip; that is, about 3.29 t/day for the vessel or 73. I/fisherman/day. The average catch per fisherman-day in 1988 was 76 kg. The figure assumed here reflects the slightly reduced catch rates reported for the first half of 1989.

2.4. Summary of Total and Average Costs

The total cost per year of owning and operating the vessel is obtained by adding the above cost categories for each assumed rate of interest.

COST ITEM

RATE OF INTEREST

10% (Rs '000)

15% (Rs '000)

Capital Cost

1225

1460

Annual Cost - Shore

519

519

- Vessel

1883

1883

Trip Cost (x 4) 4188

4188


TOTAL

7815

8050

Given the assumptions of 6840 fisherman-days per year expended for a total annual catch of 500 t, we obtain the following average costs:


 


 

RATE OF INTEREST

10%

15%

Cost per fisherman-day (Rs)

1143

1177

Cost per kg of catch (Rs)

15.63

16.10

As noted above, these costs relate to a fully-insured vessel. If insurance of the vessel (Rs 222000) is deducted from the annual costs of the vessel, we obtain the following total and average costs:


RATE OF INTEREST

10% (Rs '000)

15% (Rs '000)

Total Cost (excluding vessel insurance)

7593

7828

Cost per fisherman-day

1110

1144

Cost per kg catch

15.19

15.66

2.5. Total Revenue

With a total annual catch of 500 t (125 t/trip x 4 trips) and ex-quay prices of Rs 15/kg for "white" fish and Rs 24/kg for saleable "red" fish, the total revenue per year depends on the proportions of each type of fish in the catch. We assume two scenarios:

1. 15/85

15 percent red fish
85 percent white fish
Weighted average price Rs 16.35/kg

2. 10/90

10 percent red fish
90 percent white fish
Weighted average price Rs 15.90/kg

The following total annual revenues are produced in each catch scenario:


Catch Composition

15/85

10/90

Total Catch (t)

500

500

Weighted average price (Rs/kg)

16.35

15.90

Total revenue (Rs '000)

8175

7950

2.6. Net Revenue

Table 3 sets out the total revenues, total costs and net revenues under the various scenarios of interest rate, vessel insurance and catch composition.

Table 3: Revenues and Cost of Various Catch and Cost Scenarios (Rs '000)


 


 

Catch Composition

15/85

10/90

Total Revenue

8175

7950

Total Cost (Vessel insured)

- Rate of Interest

- 10%

7815

7815


- 15

8050

8050

Total Cost (Vessel uninsured)

- Rate of Interest

- 10%

7593

7593


- 15%

7828

7828

Net Revenue (Vessel insured)

- Rate of Interest

- 10%

360

135


- 15%

125

-100

Net Revenue (Vessel uninsured)

- Rate of Interest

- 10%

582

357


- 15%

347

122

The net revenues in Table 3 may be interpreted as a "return to owner's management + pure profit". If, for example, the manager could earn Rs 200000 per year as the manager of an enterprise of equivalent size and risk, we would need to deduct Rs 200000 from the net revenues to obtain the pure profit. This "pure profit" is comparable with the "net revenue" discussed in Appendix 2 - if, indeed, all cost items are valued at their social opportunity cost (that is, the value of the resources employed elsewhere in the economy). A necessary assumption to reach this conclusion is that the payments (including bonuses) made to the crew and fishermen reflect their opportunity costs. It may be, of course, that the actual payments are above opportunity cost if company owners redistribute some of the pure profit to fishermen and crew as an inducement to take on this arduous and risky job. If this were the case, the net revenues of Table 3 would underestimate the pure profit even after deducting a return to management.

Because we do not know if fishermen earn above their opportunity cost, or the appropriate return to management, we will use the net revenues of Table 3 for purposes of exposition. The net revenues shown in Table 2 are relatively low; in fact, a loss would be incurred if the risk-adjusted real interest rate were 15 percent and the catch composition were 10 percent red fish and 90 percent white fish. The latter is claimed to represent the composition of the catch at present.

These results provide some evidence that above-normal profits are low or nonexistent and that the operation of the fleet may be close to an open-access position -which, of course, is to be expected (Appendix 2). Correspondingly, it is expected that the net revenue will be sensitive to small changes in key parameters, such as catch rate, fishing days and number of trips per year. These sensitivities are investigated in the next Section.

2.7. Sensitivity Analysis

It has already been shown that net revenue is sensitive to interest rate and catch composition with the assumed production parameters. The approximate break-even (zero net revenue) annual catch for the various scenarios are set out below:


 

Catch Composition

15/85

10/90

Insured Vessel:
Rate of Interest

- 10%

478.0 t

491.5 t

- 15%

492.4 t

506.3 t

Uninsured Vessel:
Rate of Interest

- 10%

464.4 t

477.5 t

- 15%

478.8 t

492.3 t

These break-even catches are only approximate because the reductions in trip cost (lower payments, to fishermen and crew) have not been included in the calculation. Their effect would be small.

Given the assumed annual catch of 500-1, these figures suggest that relatively small changes in the parameters which influence annual catch will have a pronounced effect on net revenue. Thus, for example, at the assumed catch rate of 3.29 t per fishing day, the following numbers of fishing days would produce the above break-even catches:


 

Catch Composition

15/85

10/90

Insured Vessel:
Rate of Interest

- 10%

145 days

149 days

- 15%

150 days

154 days

Uninsured Vessel:
Rate of Interest

- 10%

141 days

145 days

- 15%

146 days

150 days

Given the assumed figure of 152 fishing days (4 x 38), the figures suggest the acute situation which can develop if fishing days are reduced by extra steaming (say, in case of illness on board) or by bad weather. By way of comparison, the average number of fishing days in 1988 was about 108 per vessel, although 5 vessels, were able to better 146 days, but usually this was as a result of more than 4 trips.

Correspondingly, small changes in catch rates (at 152 days/year) will also produce these break-even tonnages. These rates are shown below:


 


 

Catch Composition

15/80

10/90

Insured Vessel:
Rate of Interest

- 10%

3.14 t/day

3.23 t/day

- 15%

3.24 t/day

3.33 t/day

Uninsured Vessel:
Rate of Interest

- 10%

3.06 t/day

3.14 t/day

- 15%

3.15 t/day

3.24 t/day

By way of example, a catch per vessel of 3.06 t/day would correspond to a catch of 68 kg per fisherman day (given 45 fishermen), compared to the assumed rate of 73.1 kg.

The results so far reinforce the suggestion that a "moderately" above-average vessel is operating close to a zero-profit position and is vulnerable to small reductions in productivity or luck. Conversely, better luck or increased productivity will have a favourable effect. Suppose, for example, that catch rate were 10 percent higher (namely 3.62 t/day) for 152 fishing days. Total catch would rise to 550 t with a small increase in trip costs (payments to fishermen and bonuses). The net result would be an increase in net return of about Rs 667000 for the 15/85 catch composition and Rs 645000 for the 10/90 catch composition. The effect of "upside" variation is also demonstrated by the increase in net return from an extra trip.

2.8. Five Trips per year

We only look at the most favourable situation for 5 trips/year, namely, no increase in vessel repairs and maintenance, no reduction in the life of pirogues or outboards, and no reduction in catch rate or fishing days per trip. In other words, the extra costs are only the trip costs for the extra trip while catch would increase to 625 t. Table 4 sets out the costs and returns under these assumptions.

Table 4: Revenues and Costs for Five Trips (Rs '000)


 

Catch Composition

15/85

10/90

Total Revenue

10219

9938

Total Cost (Insured)
Rate of Interest

- 10%

8862

8862

- 15%

9097

9097

Total Cost (Uninsured)
Rate of Interest

- 10%

8640

8640

- 15%

8875

8875

Net Revenue (Insured)
Rate of Interest

- 10%

1357

1076

- 15%

1122

841

Net Revenue (Uninsured)
Rate of Interest

- 10%

1579

1298

- 15%

1344

1063

Five trips per year increases net revenue under these assumptions, even for the insured vessel with a capital cost of 15 percent. Even though 5 trips appears attractive, the profit figures are unlikely to be attained, simply because the assumptions are unlikely to be valid. The very existence of such profits would encourage existing vessels to expand their operations and encourage more vessels to enter the fishery, thus driving catch rates down over all trips. This is amplified by the pessimism amongst the companies that 5 profitable trips are possible. Even though 4 vessels made 5 trips and 2 vessels made 6 trips in 1988, only 2 vessels exceeded a catch of 625 t and no vessel had more than 186 fishing days (190 fishing days are assumed in the model). It must be remembered that every fleet contains its "highliners" like these vessels and that their actions will affect the performance of the whole fleet. Whether, in this fleet, the above vessels are any more profitable depends on their cost structure.

2.9. The Mauritius Fishing Development Company

The operations of this company differ from those of other banks fishing companies in that it operates from a shore base on the island of St. Brandon. The company's fishermen (about 90) venture out daily from the islands; they and the support staff constitute the entire population (about 120). The company has a freezer on the island and in recent years the catch has been about 700 t, of which about 300 t are salted. The fishermen operate both inside and outside the lagoons and catch a wide variety of species, including lobster and octopus. Gear include nets, handlines and basket traps and in many respects it is more like an artisanal fishery than a banks operation. The catch is transported to Mauritius by chartered vessel making about eight trips per year. The company also maintains an office and store in Pt. Louis.

The company operates on the island under a lease from the Outer Island Development Corporation. The lease, which expires in the year 2001, does not grant exclusive fishing rights to the surrounding waters but seems to encourage an attitude of resource husbandry and long term planning within the company.

I have been able to examine the company's accounts for the last two financial years along with the catch and effort records. I have come to the conclusion that the annual net revenue is not too dissimilar from a vessel-based operation on a similar scale (42 pirogues where each pirogue has a crew of two rather than three). Total costs per fisherman day appear lower (less than half) than those of a vessel based-operation but catch per fisherman-day is only about half that of a vessel-based operation; fishing days per year, however, are more than twice those of a vessel making four trips. The net result is a cost/kg of fish which is comparable to a banks vessel. For policy purposes, however, the St Brandon operation is best considered as a separate entity due to the distinctly different fishing grounds, fishing methods, species caught and the leasing arrangement.

2.10. Summary and Implications

In this section we have examined the costs and returns for a hypothetical vessel of "moderately" above-average performance. The general conclusion is that profit margins are slim and quickly disappear at performance levels slightly below those assumed. On the other hand, some vessels, by way of higher productivity and lower cost, will earn greater profits. These results are consistent with the open-access nature of the banks fishery.

The existence of relatively low profits (and losses) in the fishery was confirmed during discussions with senior officials of the Development Bank of Mauritius. At this stage the Bank would look "very carefully" at any proposals to finance operations in the fishery. In October 1989, the Bank had possession of four vessels which it had financed and which had failed to meet their commitments.

It was argued in Section 1 and Appendix 2 that fixing the price below the open market price is an effective management instrument which reduces effort below that in the unregulated fishery. Because the fishery remains open access, we should not be surprised at the results presented in this section. The question remains, however, is the amount of effort expended in this regulated fishery equal to the economically desirable amount (such as El in Figure 2)?

Even if we have exact knowledge of the sustainable yield curve, we cannot answer this question without knowledge of the demand schedule for fish at the producer level. Determination of that demand schedule is a detailed exercise in econometrics which could not be undertaken in the time available for this study. We do not, of course, have anywhere near exact knowledge of the sustainable yield curve. Possible courses of action are discussed in Section 4.

3. Implications of the Analysis and Suggestions for Change

3.1. The Management Instrument

I have come to the general conclusion that Mauritius has in place a very effective management instrument for the banks fishery. It has chosen to control effort through the price mechanism rather than by altering fishing techniques, fishing seasons or the rights of access to the fishery. In this respect I am sure Mauritius would be envied by many other fishing nations, if for no other reasons than the flexibility this regime offers and the low administrative and enforcement costs. From the viewpoint of maximizing the benefit from the fishery, the policy of retail price control translating into a fixed producer price involves minimum interference in the operations of the fishing companies; leaves them free to employ low-cost techniques; and ensures that only those who do so will survive in the fishery.

Besides the advantage that the mechanism is in place and working, manipulating effort through price minimizes the problems for the makers of foreign policy (Section 1). As long as Mauritius is the major market for the banks fish, which are afforded some protection because of distance from other nations, Mauritius will have a comparative advantage in exploiting the species and, therefore, reap most of the benefits of management. The implications for foreign policy of measures which grant rights of access, or rights to quantities of fish, may be more complex.

It must be remembered, of course, that price control can produce a distortion of relative prices and therefore a misallocation of resources within the whole economy. This raises the question of whether a fixed price of fish is the appropriate way to control the fishery using the price mechanism. Price control, however, is an accepted Government policy and this study is an analysis of fishery management not food price policy. If that policy were to change, it would seem that a fixed producer price could be readily translated into a market-determined price with a tax per unit catch. A tax could also be used if it were deemed necessary to reduce the price to producers without reducing the price to consumers.

It is suggested that serious consideration be given to the question of whether price control, or a landings tax, continue as the principal management instrument for the banks fishery.

If price control ceases, it should be replaced with a tax per unit of catch levied at the quay side.

3.2. The Level of Price

3.2.1. Problems

At the present time it is impossible to estimate the "correct" price to set so as to encourage the "correct" amount of fishing effort. There are three reasons for this. First, the "correct" amount of effort and catch can only be judged by the objectives to be served by fishery policy. Although the White Paper (1982) states that Mauritius should "derive the maximum benefits" from all the potential resources of its EEZ, it is riot clear that this implies maximum net economic benefits. Other objectives related to fish consumption, employment and the viability of fishing companies seem also to be at work. Effective management requires these to be clarified so that operational criteria can be used to monitor the process of management by price.

I suggest, therefore, that the Ministry should consider the establishment of a Policy Development and Coordination Group within the Fisheries Division.

The major task of the group would be to establish and clarify consistent objectives to be pursued in fisheries management and to devise procedures for monitoring progress towards those objectives. The brief for the Group would span all fisheries rather than just the banks fishery. The Group should consist of a small number of senior officers who would call on advice from other appropriate Ministries. A member of the Group should be an economist trained in fisheries economics. I would see the Group being appointed on a part-time basis, meeting, say, once each month for one year. The economist, however, may be devoted full-time to the task and function as the Group's researcher. The Group's report should set the stage for management objectives for, say, the next decade.

The second reason is that even if maximum economic yield were the sole objective of management, it is difficult to decide the "correct" price at any time due to highly imperfect knowledge of the sustainable yield curves for each bank. There is a need for further research, both biological and statistical, to improve this knowledge. The way in which this and other necessary research might be financed is the subject of a later suggestion.

Thirdly, it is desirable to have knowledge of the demand schedule for banks fish so as to determine, in conjunction with the yield curve, how total revenue from the fishery would alter as price responded to changes in quantity. This, in turn, depends on the demand for "all fish" and knowledge of the substitution between types of fish, including imports, and between fish and other meats. This work has much lower priority than the estimation of yield curves. When urgent action is required, approximations of the price-quantity relationship will suffice.

3.2.2. Practicalities

If price control is to continue as the sole management instrument, it is necessary to determine if the current price is appropriate to call forth the required effort. From the information available to me, it is impossible to answer the question without a plausible and verifiable estimate of the yield curve. Some estimates of the yield curve suggest smooth "bell-shaped" curves like that of Figure 1. In these circumstances it is possible to deduce that current price may be close to the mark. Such a model of the yield curve, known as a Schaeffer model, assumes that the relationship between catch/effort and effort is a straight line. Such a model, however, may be inappropriate for the fishery. Yield curves which are not of the above shape may produce quite different estimates of maximum economic yield and the appropriate price to achieve it. Under such circumstances it may be necessary to supplement management by price with other instruments. More recent estimates of the yield curves for Nazareth and Saya de Malha will be available later in the Seminar.

Chagos remains very much an unknown entity. Its distance and the apparently high proportion of unsaleable red fish afford the bank some natural protection.

It is suggested, however, that Chagos red fish should be subjected to vigorous testing to confirm or deny local opinion that they are not toxic.

If, in fact, those fish are not toxic, it seems wasteful that a potentially valuable stock is being ignored or subject to high rates of discard.

As far as St Brandon is concerned it appears that this operationally separate fishery would have many of the characteristics of an "owner-operated" -fishery if some modifications were made to the leasing arrangement. Security of exclusive tenure should lead to responsible management, such that the company could strike a balance between fishing now and conserving stocks for the future.

I suggest, therefore, that the Mauritius Fishing Development Company be granted exclusive rights to their fishing ground until the expiry of the current lease.

This would not include exclusive rights to the small Albatross Bank which is fished by other companies and involves vessel-based fishing methods. Exclusivity of right should also be a feature of any future leases for the St Brandon fishery. The catch would, as now, be subject to the controlled price and the company's costs and productivity should be taken into account in the price-fixing process.

3.3 The Management Process

We have concluded on the available evidence that the management instrument is sound. We now consider the mechanisms for altering price, monitoring and enforcement.

It seems that little needs to be said about enforcement. The mechanisms for weighing and accounting for the landed catch appear adequate and cheap, and leakages seem relatively small. Available information suggests that wholesalers (Cold Stores) and retailers operate efficiently such that marketing margins are close to the real cost of the services provided. Therefore, there seems little scope for producers to bargain for a higher ex-quay price at the expense of the wholesalers. Consumers, who appear well informed about the fixed price, along with Government Inspectors, act as a large and vocal group for policing the retail price.

3.3.1. Monitoring Management

The future monitoring processes would depend upon the outcome of the deliberations of the Policy Development and Coordination Group. At the present time, however, the monitoring and research activities are closely connected.

Suggest the formation of a Management Advisory Group whose function would be to monitor management, to establish priorities for research in the fishery and to advise Government accordingly.

The Management Advisory Group (MAG) would formalize channels of communication within the banks fishing industry and provide a forum for sectors of the industry to present their views. Membership should be representative without being too large. A workable MAG might consist of representatives from the Ministry of Agriculture, Fisheries and Natural Resources (1 biologist/statistician, 1 Economist), Ministry of Trade and Shipping (1), Fishing Companies (2), Cold Stores (1), and under the Chairmanship of a senior member of the Ministry of Agriculture, Fisheries and Natural Resources (or an independent chairman). The MAG should have the power to co-opt as required (say, from the Cargo Handling Authority).

The MAG would regularly review catch, effort, costs and productivity changes within the fishery. At regular intervals (say, each July or August) it would submit to the Ministry of Trade and Shipping its recommendations about pricing (commencing, say, September) together with the supporting evidence for its recommendation. This recommendation would represent the consolidated view of the industry which the Ministry of Trade and Shipping would take into account when fixing price each September. This process would regularize and coordinate the process of price fixing.

The MAG would also establish its priorities for research necessary for the management of the fishery. Research of a more basic nature would remain the perogative of the Ministry and the University. The MAG may have at its disposal some or all or the management and research fund (see below) or, at least, be able to recommend the way in which that fund were spent, including commissioning research from agencies outside Mauritius.

Any activities to avoid the regulations should be closely monitored by the MAG. Giving Fishing Companies a greater voice in management through membership of MAG should help to minimize any such activities.

3.3.2. Price Review

As implied above, it seems appropriate that the Ministry of Trade and Shipping remain the responsible Ministry for fixing the price of banks fish. That Ministry has the task of determining price within the wider context of general price policy. As suggested, the price review should be annual rather than waiting until a request is received from the Fishing Companies. Rather than approaching the Ministry directly the Companies, under this proposal, would make their case to the MAG to allow their views to be considered along with all other matters relevant to management.

I believe an annual price review is necessary, given the inflationary forces in Mauritius, the uncertainties surrounding the fishery and the accumulating knowledge about the stock of fish.

3.4. Financing Management

Under these proposals the cost of management would be higher than at present. The existence and functioning of the MAG, the annual price review, the suggestion for increased management-oriented research and intensified monitoring of the fishery would all add to cost.

It was argued in Section 2 that the main beneficiaries of the regulated price are the consumers of banks fish. Therefore, if one adopts the stance that the beneficiaries should pay at least some proportion of the costs of receiving those benefits, it would be appropriate that consumers contribute to the extra costs. To date, the benefits they have received from price control have been virtually for nothing.

I suggest that the retail price of frozen bank fish be increased to pay for the extra cost of improved management.

This increase would not be passed back to producers, rather it would be appropriated by Government as a tax. The size of the tax would be considered by the MAG and recommended to the Ministry of Trade and Shipping. In considering the amount of the tax, the MAG would also need to consider the costs of collection and the appropriate stage of the marketing chain at which to collect it.

As a rough guide, a tax of Rs 0.50/kg on sales of 4000 t/year would gross Rs 2000000/year.

As suggested above, the MAG may have control of those funds and be accountable for their use, or it may make recommendations to the Ministry (which would be accountable) about their disposal. The exact mechanism could be considered by the Policy Development and Coordination Group; however, the funds should be tied exclusively to the management of the banks fishery.

4. Acknowledgements

This study would not have been possible without the assistance and co-operation of many people in various Ministries and the Fishing Industry. These include:

Ministry of Agriculture. Fisheries and Natural Resources

Mr. R. Yat Sin
Mr. S.C. Seeballuck
Mr. M. Mundbodh
Mr. D. Mauree

Ministry of Trade and Shipping

Mr. R.F. Lapierre
Mr. Dowlut

Development Bank of Mauritius

Mr. K.K. Gujadhur

Cargo Handling Corporation

Captain P. Mooroogan and Staff

Talbot Fishing Company

Mr. C. Talbot
Mr. R. Talbot
Mr. P. Talbot

Sea Falcon Limited

Mr. Mahmood Faki
Mr. Mael Faki
Mr. Lefebure
Capitain Rowse

Mauritius Fishing Development Company

Mr. S. Mondon
Mrs. R. Fournier

Ben High Seas Limited

Mr. B. Lenoir

Hensinchang Company

Mr. Jean-Pierre Wan Chin Yee

Saint Michel Marketing Company

Mr. J.S. Ping

National Cold Store Limited

Mr. H. Ghina

Food and Agricultural Organisation (FAO)

Mr. D. Ardill
Mr. M. Sanders

My special thanks and appreciation are due to Mr. R. Samboo (Ministry of Agriculture, Fisheries and Natural Resources) for the painstaking tuition, delightful company and assistance in all aspects of the study. I also thank Mrs. D. Jinerdeb for typing and Mr. Ramnial for driving.

5. References

Anderson, L.G. (1986), The Economics of Fisheries Management, John Hopkins University Press, Baltimore.

Anderson, L.G. (1987), "A Management Agency Perspective of the Economics of Fisheries Regulation" Marine Resource Economics, Volume 44, pp 123-131.

Bureau of Agricultural Economics (1986), "Beneficiaries of Fisheries Management", Discussion Paper 86.1, Australian Government Publishing Service, Canberra, Australia.

Samboo, C.R. (1983) "An Appraisal of the Banks Fishery in Mauritius", Ministry of Agriculture, Fisheries and Natural Resources, Report No. 1.

Samboo, C.R. (1985), "Analysis of the 1984 Data and Prospects for 1985 of the Banks Fishery" Ministry of Agriculture, Fisheries and Natural Resources, report No.

Samboo, C.R. (1989), "Fishing Companies of the Banks Fishery", Ministry of Agriculture, Fisheries and Natural Resources, Paper No. 6.

Wijkstrom, U.N. and Kroepelien T. (1979), "Revitalization of the Mauritian Bank Fishery: An Appraisal", FAO, Indian Ocean Programme, Technical Report No. 35.

 

Appendix 1. The annuity method used to estimate annual capital cost

For simplicity consider the investment in outboard motors and an interest rate of 10 percent. We outlay Rs 340000 for the purchase of the motors which last for two years. The annuity which accounts for lost interest earnings and loss of value for each of the two years is Rs 195905. In the first year our loss of interest is Rs 34000, but we set aside Rs 195905 to cover this, therefore, Rs 161905 represents the loss of value of the motors (195905 - 34000). At the beginning of the second year, the value of the motors is Rs 178095 (340000 - 161905). The lost interest on this is Rs 17809. We set aside another Rs 195905 to cover this and the loss of value in the second year is 178095 since the motors are worthless at the end of the second year. In summary:


Value at Start year

Loss Interest

Loss of Value

Annuity

Year 1

340000

34000

+

161905

=

195905

Year 2

178809

17895

+

178095

=

195905


TOTAL

51809

+

340000

=

391809

Clearly, the total amount set aside (Rs 195905 x 2) allows us to replace the outboards and accounts for the total interest foregone during the period of the investment. Note that in Table 2 we have calculated the capital cost (annuities) to the nearest Rs '000.

 

Appendix 2. An introduction to fishery management instruments and concepts

1. BACKGROUND

Before considering some economic aspects of the banks fishery and options for management, we shall briefly review a simple model of a fishery. This model is, no doubt, oversimplified but it provides a basic framework on which to construct the details of possible management regimes.

In Figure 1, the curve labelled TR is the total sustainable revenue obtainable from the effort expended per unit time (season). The total revenue curve is obtained from the sustainable yield curve by multiplying each point on the yield curve by the (constant) price of fish. The curve TR, therefore, indicates the long-term equilibrium relationship between revenue and effort. It is predicated on a number of assumptions, in particular, the whole set of assumptions which underlies the concept and empirical derivation of a sustainable yield curve, and the assumption that fish price is constant. The biologists associated with the banks fishery will inform us of the former set of assumptions. The banks fishery is characterized by a constant price for fish as a result of the policy of price control.

If the price were determined in an uncontrolled market the total revenue curve may have several "humps" due to the interplay of the quantity of fish on the market and price. Such interplay is, of course, captured by the notion of a downward-sloping demand curve on which price varies inversely with quantity. This complication is important for the banks fishery since its production is consumed almost exclusively on the domestic market. We can, however, set this problem aside for a while. This brief analysis does not include the effects of the passage of time - it is a static analysis. If we bring time into the picture we must consider interest rates and the fact that we can leave fish in the sea to grow and produce more fish tomorrow.

The curve labelled TC represents the total cost involved in applying the various quantities of effort. In a very general fashion, it is drawn as a straight line on the assumption that each unit of effort costs the same. The cost to the economy of applying fishing effort is the value that is given up when resources (capital, fuel, labour etc.) are removed from alternative forms of employment and used in the fishery. In many cases the market prices of resources will reflect this so-called "opportunity cost" but for others, such as labour, this may not be so.

If the fishery with the characteristics shown in Figure 1 were owned by a single company whose aim was to make the greatest net revenue (the words profit or rent may also be used), that company would use the amount of effort such that TR - TC = a maximum, say El units. The fishery is, of course, not owned by a single company, indeed it is not "owned" by anyone in particular. Frequently Governments adopt the stance that they manage the nation's fisheries on behalf of the totality of "owners", namely the society of the country in question. If this were the case, and the government wished to maximize the net value of the fishery to the economy, it would want no more (or less) effort that El devoted to the fishery. In the banks fishery, however, the problem is more complicated because the major bank lies in international waters and, therefore, is not "owned" by Mauritius in the same way as the Nazareth bank which lies within the Mauritian EEZ.

In an unregulated fishery where there is open access, effort will continue to be applied to the fishery as long as some net revenue can be earned. In other words, effort (vessels, gear and fishermen) will continue to enter the fishery until E3 units are applied. This is because no one has exclusive claim to any of the profit. As long as some profit exists more effort will be exerted to try to capture it. No more effort than E3 would be used since to do so would mean that total cost would exceed total revenue on those units greater that E3. Clearly, E3 is wasteful since net revenue is zero even though all resources are earning their normal returns. We know that as long as there is open-access, effort will tend toward E3; whether E3 lies to the left or right of the effort producing the maximum sustainable physical yield (E2) depends on the sustainable yield curve and the total cost curve.

For a government with the objective mentioned above, the essence of management is to control the fishery so that El units of effort are applied. In the case of a new fishery it will be approaching El from the left; in the case of a fully-developed open-access fishery ("over-exploited") it approaches El from the right, that is, a reduction in effort is required. The latter, of course, is a more painful process than the former.

If we were to recast our analysis taking account of the effects of the passage of time we would find that our results would change somewhat but they would still suggest an optimal effort less than the open access equilibrium. When time is introduced we must account for the fact that a rupee today is more valuable than a rupee in one year from now as a result of the discount rate. Also, we must remember that fish are like capital - we can consume a fish now or leave it in the sea to grow so that we may consume more fish next year.

The analysis to determine the optimal catch and effort is more complex when we include these forces, but two extreme situations are worthy of mention. The first is that our "static" optimum (El in figure 1) is the "dynamic" optimum only if the rate of discount is zero. This is because in such a world a rupee of future revenue is the same as a rupee of present revenue. The second and more important extreme is that the open access equilibrium (E3 in figure 1) is only optimal if the rate of discount is infinite. In that world, future income has no value, so that it makes sense to use as much effort as possible, as long as costs are covered (Anderson, 1986). It will be a long time before we have the necessary information to work out by how much the dynamic optimum differs from El. We will, therefore, continue to use our simple model for a discussion of principles because we can confidently say that the optimal effort will always be less than E3.

Reverting to our static analysis, let's make the heroic assumptions that the appropriate arm (Ministry) of Government knows TR and TC and, therefore. El and E3, and that the open-access fishery is currently operating at E3. How can effort be reduced to El? Broadly, the Government can influence the quantities of inputs (effort) or output (fish), or the prices of inputs and output. Each of these measures, or combinations of them, will have different effects on the fishery, the economic efficiency with which it is exploited and the distribution of income.

Only some of these instruments have the ability to affect directly effort or catch, others do so indirectly and are therefore less precise methods. Those which limit entry to the fishery by affecting input or output quantities (licensing or individual quotas) affect the "rights" of fishermen, while those which work through prices may leave the form of the "rights" unchanged (that is, the fishery remains open access).

Let's briefly analyse some of the major effects of three instruments, namely, a licence limitation programme, individual transferable quotas and a tax on catch. We concentrate on these instruments because, by and large, they are capable of giving management programmes which can approach economic efficiency. Management measures such as closed seasons, gear restrictions and size limits, while they may be necessary in some extreme situations, tend to produce economic inefficiencies in the longer term. Before doing so, however, we note that moving from the open-access equilibrium (E3) to the maximum economic yield (El) reinstates a net economic surplus (that is net revenue becomes positive and maximized). What should happen to that net surplus? Should it be left in the hands of fishermen, appropriated by Government and/or distributed to some other group in society. The other point to note is that a management programme has a cost (monitoring and enforcing costs). Who should pay these costs? Both question require value judgements to answer them. We will return to them at a later stage.

1.1. Licence Limitation

Licence limitation programmes attempt to reduce effort by restricting the number of units, usually vessels, that can engage in the fishery. In effect, the licence provides a "right to go fishing" to the holder. Such limited entry regimes may also be accompanied by further restrictions on the way the right can be exercised, e.g. types and sizes of vessels or gear which can be used, or the time of the year when the right can be exercised.

These can be useful programmes and are widely applied in many countries. How successful such a programme is in reducing effort depends, in part on how tough the manager is prepared to be in allocating (whether by sale or gift) the initial number of licences. Many limited entry regimes have floundered or taken a long time to produce an effect because all fishermen (or vessels) in an already over-exploited fishery have been licensed. Measures to reduce numbers then become tedious and can involve dispute and great administrative cost. The same is true of any mechanism (except sale) used to allocate the initial number of licences.

Even if the manager restricts entry to the number of vessels which would supply El units of effort now, it may not remain at that level for long. Fishermen, quite naturally, will attempt to increase the effort per vessel in order to gain some of the profit. This can set in train the need to reduce boat numbers further or to control the effort per boat. This can be never-ending as long as fishermen can substitute uncontrolled inputs for controlled inputs, e.g. more powerful engines, nets for handlines and fish-finding gear. As fishermen do this it increases their costs and increases management cost as the managers must introduce more and more controls. It is for this reason we termed licensing programs an imprecise instrument.

It is my view that such programmes may be more successful in artisanal fisheries with simple technology than in industrial fisheries where greater substitution between inputs is more likely.

1.2. Individual Transferable Quotas (ITQs)

This instrument can correct for open-access waste without causing inefficiencies in the production of effort (that is, higher cost as with licences). The total sustainable catch corresponding to El is divided amongst fishermen in some way such that each fisherman cannot catch more than his quota. As with licences, problems of subsequently reducing catch will occur if the total allowable catch exceeds that corresponding to El. Instead of expressing the individual quotas as tonnes of fish, management has greater flexibility if quota units are some percentage of an annually-determined total allowable catch. This would be the case if stocks fluctuate from year to year or knowledge of the yield curve is incomplete. In this case the quota holder has a "right to take a specified percentage of the annual fishery quota".

Only if the individual quotas are fully transferable (sold or leased) will the fishery operate in a cost-efficient way. Quota trading allows quota to be acquired and utilized by the lowest-cost fishermen, to whom, of course, quota is most valuable. High-cost fishermen will be pleased to sell, provided a buyer can offer more than the former can make from using his quota. Co-operative arrangements are also possible, e.g. two or more fishermen teaming together in a partnership to catch their collective quota using one larger vessel (at lower cost/unit effort) rather than their two or more smaller vessels. Conversely, a quota holder need not fish, rather he may hire vessels and men to do it for him. The important aspect of ITQs is that fishermen will use the profit motive to adjust the size of their quota relative to their equipment to produce effort as cheaply as possible. As a result technology in the fishery is improved as fisherman seek the least-cost methods. This is in contrast to some other management measures, including licensing programmes, where cheaper methods may have to be prevented so as to reduce effort.

Clearly, the type of monitoring and enforcement for ITQs differs from that of a licensing programme. Here, rather than checking boats and their gear, it is necessary to be able to check the catch. This may be difficult if there are not specialized and centralized landing and marketing channels.

If the individual quotas are not transferable the incentive for least-cost fishing disappears. If individual quotas are not used and the managers merely set a total allowable catch for the whole fishery, there will be a wasteful "race" to fish as every fisherman tries to maximize his share of that total allowable catch.

It is now clear that both licences and ITQs create exclusive rights for the title holders, that is, no longer can anybody who wishes become a fisherman. To exclude some people from a fishery, those who cannot afford to buy the "right", may be a difficult decision for some governments.

1.3. Taxes

Taxes to reduce effort could be imposed on either total effort or components of it, such as boats, or on catch. Suppose, for example, that fishermen pay a tax on each tonne of fish landed. If they pay the same tax/tonne for every tonne landed then the total revenue curve is- now determined as quantity multiplied by price-minus-tax rather than quantity multiplied by price as before. This lowers the total revenue curve to TR1 as shown in Figure 2. The curve TR1, in fact, shows the optimal tax since total revenue is forced downwards such that it intersects the total cost curve (TC) at the optimal amount of effort (E1). The difference between TR and TR1 represents the amount of tax paid at any level of effort. Thus, at El the proceeds from the sale of fish are TR but fishermen retain only TR1 after paying TR-TR1 as tax.

The imposition of the tax does not affect the existing rights to the fishery - it remains open-access, but those who catch fish must pay the tax. If the fleet tries to maintain effort at E3, the average net return per unit effort will be negative and effort must be reduced, most likely by some fishermen being forced to leave the industry. Remaining (low-cost) fishermen will be just as well off as before the tax, that is, they will still cover their costs and make normal returns. The economic surplus (profit) which would have accrued to them at El is now appropriated by the government as tax revenue. As such, the return to the fishery's owners, society as represented by government, is maximized.

A tax on landed catch is a simple mechanism which involves checking landings so as to ensure that no catch goes undetected, and collecting the tax. The difficulties lie in altering the tax as TC and TR change. But there are also similar difficulties with the other instruments as TR and TC change. A further problem is that governments may be unwilling to impose a tax on an already depressed open-access fishery.

The interesting aspects about a landings tax is that it is similar in its effect on effort to the policy of price control which already exists for the Mauritian Banks Fishery. This similarity, and the differences, are discussed in Section 1 of the text.

We will not discuss a tax on effort in detail, except to mention that the effect of an optimal tax is to increase TC such that TC + tax intersects TR at El. Effort taxes, to be effective, must be imposed on total effort rather than components of effort. If levied only as a tax per boat, for example, there will be substitution of non-taxed inputs for taxed inputs, thus the effort per boat would increase. A tax on total effort however, would be difficult (expensive) to monitor and enforce.

1.4. Some Further Issues About Management

In designing any management programme, it must be remembered that the programme sets out to change the behaviour of fishermen. The manager, however, cannot force people to follow his direction in the same way as the manager of a private business, rather he can only control effort indirectly by selecting:

- the management instrument (licences, individual quotas or taxes);

- the level at which the instrument is employed (number of licences, size of quota or level of tax);

- the monitoring and enforcement procedures; and

- the type and levels of penalties for non-compliance.

Once these are set, the actual effort is determined by fishermen. The manager may select the ideal instrument for the fishery, but its affect on effort may be minimal if the level is inappropriate, e.g. quota set too high; the expenditure on monitoring and enforcement is insufficient, e.g. checking the catch such that the probability of an offence being detected is very low; and penalties for violating the rules are insufficient to affect behaviour. Conversely, of course, it is possible to spend too much on some of these activities.

Even in a regulated fishery, the basic motivation of fishermen's behaviour does not change - they still want to maximize profits. They do so, however, under the constraints imposed by the management programme. Under these constraints they may find it profitable to undertake activities to avoid regulation, e.g. under-reporting catch, unloading at remote, ports, bribery, etc. (Anderson 1987). These are separate activities from fishing and fishermen can be expected to engage in them as long as the gains from doing so exceed the costs. Therefore, it is important to consider the types of such activities which might be generated under a given instrument with given levels of enforcement cost and penalty structure, and how they can be detected. These problems may be such that the "less-than ideal" instrument may be cheaper to operate than the "ideal" one after accounting for these costs. For example, if ITQs were implemented for a species which could be landed and sold on any beach, it might be expected that there would be considerable avoidance activity. This could be overcome at very high cost with an inspector on every beach, but if the enforcement/detection budget is limited, it is necessary to balance enforcement/detection and avoidance activity, or choose some other instrument such that these costs are lower.

Obviously, the ability of any management programme to encourage self-policing amongst fishermen will be an advantage. The degree of self-policing is likely to depend on how fairly fisherman see themselves treated and the degree to which they perceive they benefit from the programme. Even so, I suspect that self-policing may be more effective for "included" fishermen policing against the actions of "excluded" fishermen, rather than within the group of included fishermen.

As indicated above, any management programme has a set of costs. Who is to pay these costs? One answer is that those who benefit should pay. It is not always easy, however, to determine who are the beneficiaries and how they share the benefits of regulation. The answer depends on knowledge of the demand and supply functions for fish (where the latter may be affected by the chosen management programme). For the purposes of the present exercise, namely, to devise an appropriate regime, this complex exercise can be left aside; the interested reader is referred to the Bureau of Agricultural Economics (1986).

Figure 1: A simplified bioeconomic model of a fishery

Figure 2: The effect of an optimal tax per unit of catch

An Assessment of Exploitation Levels in the Banks Handline Fishery and a Management Plan to improve the Fishery Performance (Paper 4)


1. Introduction
2. The extent by which the present fishing effort might be excessive
3. Some economic consequences of the excessive fishing effort
5. How a regime of individual transferable quotas might be introduced into the Banks Handline Fishery
6. Concluding comments
References


by
Michael J. Sanders
FAO Fisheries Project
P.O. Box 487
VICTORIA, Seychelles

1. Introduction

The Banks handline fishery presently involves Mauritius (9 vessels in 1989) and Reunion (1 vessel). The fishing grounds are the banks of the Mascarene Ridge, particularly the Saya de Malha and Nazareth Banks. Fishing trips are of roughly six weeks duration, with the target species Lethrinus mahsena comprising about 90 percent of catches. The vessels are mother-ships, each equipped with 10 to 20 dories with three handline fishermen per dory.

The landings by Mauritius from the Banks Fishery in 1988 totalled 5140 tonnes. Most of this was from the Saya de Malha Bank (2651 tonnes) and the Nazareth Bank (1429 tonnes). The other contributions were from St. Brandon (720 tonnes), Chagos (314 tonnes) and the Albatross Bank (26 tonnes).

An additional roughly 300 tonnes is believed to have been landed from the mothership based in Reunion. Almost all of this would have been caught on the Saya de Malha Bank.

The fishing effort by Mauritian vessels on the Saya de Malha and Nazareth Banks during 1988 is reported as 39039 man-days and 19730 man-days respectively. Assuming the same catch rate by the fishermen from Reunion gives a combined country fishing effort for the Saya de Malha of 43457 man-days and 63187 man-days from both Banks.

At present, the fishery is not subject to any specific management regime. Its development has nevertheless been influenced by price control as applied to frozen fish. The presumption here is that in the absence of price control, the additional profitability from the adoption of free market prices would attract additional investment, and hence increases in the numbers of vessels and fishing effort.

The latter is well demonstrated by the events following the abandonment of price control in 1981. At that time the number of participating vessels was 5, in 1982 it was 10, and at the re-establishment of price control in 1987 it had increased to 15.

In the following assessment it is shown that the present catch for the Saya de Malha and Nazareth Banks is about equal to the maximum sustainable yield (MSY), and that the maximum economic yield (MEY) would be attained at roughly one third of the present effort.

The latter sections of the paper are devoted to describing the approaches that might be adopted to encourage reductions in fishing effort and hence improved economic benefits. As there are practical difficulties in applying these approaches, the final section is devoted to suggesting how these difficulties might be tackled.

2. The extent by which the present fishing effort might be excessive

In respect to the Saya de Malha and Nazareth Banks the results from a stock assessment analysis (Tables 1 and 2 and Figures 1 and 2) indicate that the MSYs are 2887 tonnes and about 1280 tonnes (gutted weight) respectively. (The methodology and inputs are indicated in Appendix 1). Adding these together gives 4167 tonnes, which is somewhat similar although less (by about 200 tonnes) than the combined catch in 1988 by Mauritius and Reunion. It is less because the catch in 1988 is the consequence of a recent and substantial increase in fishing effort, and hence not sustainable.

Another feature of the results is that, if it were possible to reduce the fishing effort to about half of its present level, the sustainable catch would not be much less than the estimated MSY following the establishment of the new equilibrium. The combined fishing effort on the two banks during 1988 was close to 63000 man-days. The sustainable catch from this level of effort would be 4138 tonnes. If instead a sustained fishing effort of 18000 man-days was applied on the Saya de Malha Bank and 12000 man-days on the Nazareth Bank, the catch at equilibrium would be 3972 tonnes. In other words halving of the fishing effort would lead to only 166 tonnes (or 4 percent) less catch (at equilibrium).

In support of the above, it is relevant to note the statistics for the Saya de Malha Bank in 1985 and 1986. The catches in those years ranged around 2900 tonnes from an effort of about 28000 man-days. According to the results (Table 1), the sustainable yield from an effort of 28000 man-days is 2882 tonnes. In other words, the statistics of the mid-1980's provide quite direct evidence that the present fishing effort (43000 man-days in 1988) is grossly excessive.

The results (Tables 1 and 2) also show how the sustainable catch rates and mean weights of the individual fish in the catches can be expected to decline with increase in the annual fishing effort. At the level of fishing effort applied during the past two years, the estimates of catch rate are about 66 kg/man-day for the Saya de Malha and Nazareth Banks. The estimates of the mean individual weight of the fish are 745 gm and 907 gm respectively. All these values are compatible with what is actually being observed.

In respect to the very early days of the fishery when the fishing effort was low, the results indicate that the catch rates might have been in the order of about 250 (Nazareth Bank) to 600 (Saya de Malha Bank) kg/man-day; and the mean weight of fish in the catches about 1.3 kg. These also seem to be in accordance with the observations of the time (see Paper 1 in these Proceedings).

3. Some economic consequences of the excessive fishing effort

The catch curves of the previous section were converted to revenue curves, using 15.9 Rs/kg as the landed price. (The latter is based on the assumption that the composition of the catch is 90 percent "white" fish and 10 percent "red" fish). The fishing efforts were converted to fishery costs using 1177 Rs/man-day and 1110 Rs/man-day.

'The first of these reflects the costs of an insured vessel with capital annualized at an interest rate of 15 percent, and the second the costs of an uninsured vessel with capital annualized at an interest rate of 10 percent. All values are taken from Paper 3 of these Proceedings.

In considering the economic consequences of the fishing effort regime, the difference between the sustainable fishery revenue and fishery costs has been taken here as an indication of the performance of the fishery. This indicator may be called the economic yield (which is analogous to the fishery profit). In respect to the Saya de Malha and Nazareth Banks, it seems from the results (Tables 1 and 2 and Figures 3, 4, 5 and 6) that the sustainable economic yield from the present level of fishing effort is around zero. This is well supported by the recent history of loan defaults, the voluntary retirement of vessels from the fishery without replacement, and the general claim by company managements that banks fishing is no longer profitable.

It also seems that the (sustainable) economic yield would increase with decrease in the fishing effort to a maximum value at about one third the present level of fishing effort. The estimates of the maximum economic yield are given below (Table 3).

Table 3: Estimates of Maximum Economic Yield

Assumed Fish Price (Rs/kg)

Assumed Costs/Fishing Effort (Rs/man-day)

Estimated Maximum Economic Yield (Rs '000)

SAYA DE MALHA BANK

15.9

1.177

27742

15.9

1.110

28412

NAZARETH BANK

15.9

1.177

7200

15.9

1.110

7602

BANKS COMBINED

15.9

1.177

34942

15.9

1.110

36014

The annual catch associated with the attainment of these maximum economic yields is 3400 tonnes for the two banks combined, achievable from an annual fishing effort of about 17000 man-days (comprising 10000 man-days and 7000 man-days respectively on the Saya de Malha and Nazareth Banks).

The remaining sections deal with how it might be possible to realize this potential to substantially improve the economic performance of the fishery. The underlying presumption will be that attaining this potential (although not necessarily all of it) is a worthwhile management objective, and that the only means of doing this is through instruments and strategies which will lead over time to substantial reduction in the fishing effort.

4. Approaches to improving the economic performance of the fishery

Two approaches are discussed in this section. The first, sole reliance on price control, will be judged as obviously impractical and has been included only because it involves using the instrument of management (price control) which is presently in place. The second (individual transferable quotas temporarily combined with price control), is presented as being the preferred approach.

Price Control:

This is the instrument of management which is presently in place. Increasing the price would have the short term consequence of allowing the fishing companies to operate more profitably (at the expense of the consumers), however, additional fishing effort would soon be attracted into the fishery, to the extent that within a relatively short time the increasing fishery costs would dissipate all the new found profit. The end result would be an unnecessary increase in price to the consumers, an even higher level of exploitation exerted on the fish stocks, and fishing companies operating at the same close to zero profit as at present. Hence an increase in fish price is not the answer.

As discussed in the previous section, the appropriate remedy for the fishery is to reduce the fishing effort. This could be achieved by a decrease in the price. In fact, it is possible to estimate what the price should be to achieve a given level of fishing effort (at equilibrium), as well as the corresponding sustainable catch and economic yield. At present day costs, the price to achieve the maximum economic yield, for example, is about 6 Rs/kg or forty percent of the present price (a description of how this price was estimated is given in Appendix 2). Applying this price, however, would result in drastic short term consequences. The immediate effect of would be that all the companies would cease fishing and the banks fishery catch would plummet to zero. The only short term benefit from such action would be an accumulation of fish stock.

A less drastic but equally impractical approach would be to progressively reduce the price over some years. The short term effect would be to force the least efficient companies out of the fishery and hence lead to a reduction of fishing effort. The profitability of the surviving companies would be even less than at present. It would take a long time for any substantial improvement of the economic yield of the fishery to occur (due to the fish being long-lived) and the sole beneficiaries of the improvement would be the consumers.

Individual Transferable Quotas:

The basic concept here is that the fishery be subjected to an annual catch quota, and that this be apportioned between the entities engaged in fishing (e.g. the fishing companies). In addition, those who have been allocated a portion of the fishery quota would have the right to sell or lease their entitlement. The virtues of this approach have been well demonstrated through experience in a number of important fisheries in other countries (e.g. bluefin tuna fishery of Australia). The most important of these is that the approach encourages the fishery to move in the direction of improved economic performance.

This arises because, once the fishing entities are assured of their portion of the years quota, there no longer remains any virtue in increasing fishing effort (in order to catch more fish), but rather all attentions will be focussed on ways to reduce costs and hence increase profits. Where the quotas are transferable, it is possible to purchase (or lease) someone else's quota, and hence more fully utilize the capacity of the vessel to which the quota is transferred. This should eventually reduce the number of vessels in the fishery.

In the ideal, the fishery quota should be the catch associated with maximizing the economic yield (or whatever other fishery objective is chosen by the managers). Where the prevailing catch is substantially higher, it will be necessary to progressively reduce the annual quota. As previously mentioned, in the case of the banks handline fishery the estimate of annual catch associated with maximizing the economic yield is 3400 tonnes (from the Saya de Malha and Nazareth Banks). The catch in 1988 was 4380 tonnes (from Mauritius and Reunion) and hence some phasing towards a lower fishery catch will be necessary.

It is important here to refer to who might be the beneficiaries of introducing individual transferable quotas. A little earlier it was claimed that the fishing entities would actively seek to reduce costs and hence improve profitability, for example, by purchasing additional quota entitlements and combining them on a single vessel.

This strategy would only be interesting to the fishing company if it was able to retain some or most of the additional economic yield. In other words, it would not be wise for the fishery managers to expropriate much or all of the increased economic yield, as through lowering the price of fish or applying a special resource tax.

A further virtue of Individual Transferable Quotas is that it provides the opportunity for the marginally efficient enterprises to quit the fishery and at the same time gain some monetary compensations for doing so. While the fishery remains at a very low level of company profitability as at present, the extent of the compensation will presumably be small. As the fishery moves over time to substantially increased levels of economic yield, the level of compensation will increase and may ultimately become very substantial. It will be at this time (or before) that the managers will be looking closely at extracting some of this economic yield for the public purse.

5. How a regime of individual transferable quotas might be introduced into the Banks Handline Fishery

Suppose in the first year the fishery quota for the Saya de Malha and Nazareth Banks was set at 3600 tonnes, made up of 3300 tonnes for Mauritius and 300 tonnes for Reunion. This would represent a movement to the catch at MEY (3400 tonnes) plus a margin for possible error (200 tonnes). The next task would be to allocate this amongst the active fishing companies on a percentage basis. How this might be done is demonstrated below in respect to the Mauritian companies.

In considering what the proportional basis might be, it is useful to know the distribution of the catch between the active companies in 1988. It was also considered relevant to try to estimate the likely distribution of the catch expected for 1989. This was in view of the fact that since 1988, the "other" companies (operating the Orient, Good Hope, Sea Horse and St. Christophe) have all ceased fishing, the Hensinchang Company has decided to operate only one vessel, a new company (St. Michel Marketing operating the Swan) has entered the fishery, and the future participation of the Ben High Seas Company appears to be in some doubt.

The results from these analyses are shown in Table 2.

Table 2: Distribution of catch between the main fishing companies (with percentage in brackets)

Company Name

Catch and No. of Vessels in 1989

Anticipated Catch and No. of Vessels in 1988

(Vessels)

(Tonnes)

%

(Vessels)

(Tonnes)

%

Sea Falcon

4

1945

(41.6)

4

1900

(41)

Talbot Fishing

2

1267

(27.1)

2

1200

(26)

Hensinchang

2

920

(19.6)

1

600

(13)

Ben High Seas

1

243*

(5.2)

1

600

(13)

"Others"

4

303

(6.5)

1**

350

(7)

TOTAL

13

4678

(100.0)

9

4650

(100)

* - Lower than previous years catches of over 700 tonnes.
** - This refers to the vessel owned by the St. Michel Marketing.

Applying these findings and noting the uncertainly surrounding the future activities of the Ben High Seas, for which the 13 percent of catch anticipated in 1989 is held in "reserve", the following (Table 3) provides what seems to be a reasonable approach to allocating the 3300 tonnes fishery quota (for Mauritius) previously mentioned. In examining this table it should be appreciated that it is the percentage allocation which would initially be fixed.

Table 3: A basis for allocating the first years of quota 3300 tonnes.

Company Name

Percentage Allocation (%)

Actual Allocation (Tonnes)

Sea Falcon

41

1353

Talbot Fishing

26

858

Hensinchang

13

429

St. Michel

7

231

"Reserve"

13

429

TOTAL

100

3300

Once the quota and percentages of the entitlement are allocated for the initial year, the companies would be free to buy, sell or lease quota entitlement. The fisheries administration would need to maintain a register of quota entitlements, and companies trading in quotas would need to inform the administration immediately a transaction took place. The information to be conveyed to the administration would include type of transaction (e.g. sale or lease), buyer and seller names, tonnage and quota percentage involved (and price, if possible).

Buyers and sellers may find it most convenient to trade in tonnages rather than percentages, but ultimately the tonnage traded would need to be converted into percentages (of the fishery quota). Thus if a company sells 33 tonnes in a year when the fishery quota is 3300 tonnes, it is selling one percent. If it is selling 40 tonnes in a year when the fishery quota is 3200 tonnes, then it is selling 1.25 percent.

It would be important that the control of fish retail prices continue, at least until such time as the quota system is in place. As the economic performance of the fishery improves due to reduced fishing effort and other actions, it may be possible to consider reducing the price or abandoning it altogether. If the decision were to lower prices and hence allow some of the benefit from the improved performance to be passed on to the consumer, this would need to be carefully examined. It will be essential to ensure sufficient of the increase in economic yield remains with the companies as an incentive for further reductions in fishery effort and costs.

A very important aspect of implementation concerns the present involvement of Reunion, particularly in respect to fishing the Saya de Malha Bank, much of which is in international waters. The introduction of the management regime described in this section would be in danger of failing in the absence of cooperation from Reunion (and other nations who might subsequently seek to engage in the Banks handline fishery).

As Réunion is the only other participant at present, the initial approach would be to engage in discussions aimed at their agreeing to a quota (preferably a percentage of a combined quota) based on recent years catches (i.e. about 300 tonnes). It should not be difficult to justify this position in the context that the quota suggested for Mauritius will be a reduction from recent catches, and the economic benefits of reducing the fishing effort will also accrue to Reunion. Any agreement with Reunion should permit the possibility of companies from either country trading in quotas.

Finally, there is the important matter of enforcing adherence to the individual quotas. In order to do this, it will be necessary to make it a statuary requirement that the catches from each vessel are weighed at the point of landing, and to have the weights verified (when possible) and entered in the register for the current year. There will also need to be an enforcement capability to minimize the unrecorded landing of catches in Mauritius and the transshipment of catches at sea onto foreign vessels. Complementary and adequate enforcement capability would also need to be established on Reunion.

6. Concluding comments

It seems from what has been presented earlier that the Mauritian Government has relatively few management options. One of these is the maintenance of the status quo and hence price control as the sole instrument of management. Under such a regime, the consumers will continue to pay less than they might otherwise under a free market situation. They will however be paying more than double the price they would if the fishery were managed at the point of maximum economic yield (provided all the benefits of this economic efficiency was being directed to the consumers, which is probably unlikely).

The other problem of maintaining the status quo is that the fishing companies and perhaps also the distributors will continue to operate at almost zero profits, or seek to undertake illegal activities to enhance profits. This is because they are employing grossly too much fishing effort, and are being provided with no incentive to reduce effort. In quantitative terms the present loss of economic yield as the direct consequence of this excessive effort is about Rs 35 million each year.

The only remaining option, short of directly or indirectly closing down the fishery for at least some five or more years until the stock recovers and catch rates improve, is to immediately employ a management instrument which progressively reduces the fishing effort with a minimum of disruption to the consumers and fishery participants. In the author's view this can only be achieved by a combination of individual transferable quotas associated with a possibly temporary maintenance of price control.

In considering this option, it should be realized that, as a consequence of the fish being relatively long lived, it- will take time for the catch rates to improve and for the size of the fish in the catches to become significantly larger. That is, it will take time for the potential to substantially increase the economic performance of the fishery to be realized. As there is really no other practical alternative, and having in mind the magnitude of the losses (to the Mauritian economy) occurring each year from failing to realize the potential economic yield, the sooner this process is started the better.

References

Bertrand, J. et al, (1986): Rapport du groupe de travail pour une évaluation des ressources en capitaine dame berri des bancs de Saya de Malha. Publication IFREMER., 40 p.

Bautil, B.R.R. and C.R. Samboo, (1988): Preliminary stock assessment for the mahsena emperor (Lethrinus mahsena) on the Nazareth Bank of Mauritius. In Proceedings of the Workshop on the Assessment of the Fisheries Resources in the Southwest Indian Ocean. FAO/UNDP: RAF/79/065/WP/41/88/E: 277 p.

Thompson, W.F. and F.H. Bell, (1934): Biological statistics of the Pacific halibut fishery. 2. Effect of changes in intensity upon total yield and yield per unit of gear. Rep. Int. Fish. (Pacific Halibut). Comm. 8. 49 p.

Table 1: Estimates of fishery performance at equilibrium for a range of annual fishing efforts - Saya de Malha

Note: The gross revenues were determined at the price of 15.90 Rs/kg; and the total costs and economic yields were determined at costs per effort of 1,177 Rs/man-day (indicated by *) and 1,110 Rs/man -day (indicated by **).

The values for the stock assessment parameters used with the "Thompson and Bell" spreadsheets were as follows:

L (inf) = 61.0 cm a = 0.014 H = 0.20/year
K =0.10/year b = 3.118 q = 0.209 x 19
to =-1.0 year (when length cm R = 14.8 x 10 (Saya de Malha)
tc =5.8 year and weight gm) R = 6.6 x 10 (Nazareth)

Table 2: Estimates of fishery performance at equilibrium for a range of annual fishing efforts - Nazareth

Note: The gross revenues were determined at the price of 15.90 Rs/kg; and the total costs and economic yields were determined at costs per effort of 1,177 Rs/man-day (indicated by *) and 1,110 Rs/man -day (indicated by **).

The values for the stock assessment parameters used with the "Thompson and Bell" spreadsheets were as follows:

L (inf) = 61.0 cm a = 0.014 M = 0.20/year
K. =0.10/year b = 3.118 q = 0.209 x 19
to = -1.0 year (when length cm R = 14.8 x 10 (Saya de Malha)
tc =5.8 year and weight gm) R = 6.6 x 10 (Nazareth)

Figure 1: Equilibrium catch rate and mean individual fish weight for a range of annual fishing efforts - Saya de Malha

Figure 2: Equilibrium catch rate and mean individual fish weight for a range of annual fishing efforts - Nazareth

Figure 3: Equilibrium fishery revenue, cost and economic yield for a range of annual fishing efforts - Saya de Malha

Figure 4: Equilibrium fishery revenue, cost and economic yield for a range of annual fishing efforts - Saya de Malha

Figure 5: Equilibrium fishery revenue, costs and economic yield for a range of annual fishing efforts - Nazareth

Figure 6: Equilibrium fishery revenue, costs and economic yield for a range of annual fishing efforts - Nazareth

APPENDIX 1

The methodology and data inputs used for the estimations of the equilibrium catch, catch rate and mean individual weight of the fish in the catches for a range of sustained annual fishing efforts.

The methodology is largely that described in Thompson and Bell (1984). The lifespan of the fish were considered in time increments of one year. Annual recruitment was assumed to be constant (in order to equate the catch weight in each year from a single year class, to the catch in one year from all year classes).

The data inputs are given in the following table:

Growth Parameters

 

L ¥ = 61.00
K = 0.10
to = -1.00
a (females) = 0.012 (when weight is gm and length is cm)
b (females) = 3.160
a (males) = 0.016
b (males) = 3.077
Mortality Parameters M = 0.20 /yr
(Saya de Malha) F = 0.408 /yr (1982/83)
F = 0.306 /yr (1983/84)
tc = 5.8 /yr
Effort Parameters X = 20082 man-days (1982/83)
(Saya de Malha)


x = 14136 man-days (1983/84)
Catchability Parameter Q = 0.209 x 10-4
Recruitment R = 14.8 x 106 (Saya de Malha)
R = 6.6 x 106 (Nazareth)

Most of the parameter values were taken from Bertrand et al (1986) and Bautil and Samboo (1988). The value for the catchability coefficient (q) was estimated from q = F/X, and the number of recruits at the beginning of the first year was estimated by trial and error as the number required to achieve the mean catch for 1985 and 1986 from the mean fishing effort in those years.

Appendix 2

Determining the price of fish required to achieve a sustainable maximum economic yield, when price control is the only instrument of management.

The fishing effort and associated catch at maximum economic yield when considering the Saya de Malha and Nazareth Banks combined are 17000 man-days and 3400 tonnes. Applying the alternative costs per unit effort mentioned in the text of 1177 Rs/man-day and 1100 Rs/man-day gives the respective fishery costs of Rs 20 million and Rs 18.9 million. Hence, dividing these by the catch of 3400 gives the following prices of 5.88 Rs/kg and 5.55 Rs/kg. At this landed price the economic yield would be fully extracted from the fishery, and thus fishing companies would have no incentive to increase fishing effort.

Some Near-term Consequence of Implementing the Management Plan (Paper 5)


1. Introduction
2. Method
3. Results and Discussion
4. Concluding Comments
5. Reference
Appendix 1 Estimates of population numbers, mortalities, catch and biomass in the base year for the Saya de Malha Bank


AN ASSESSMENT OF THE SHORT TERM EFFECT PERFORMANCE OF IMPLEMENTING AN ANNUAL

by
Michael J. Sanders
FAO Fisheries Project
P.O. Box 487, VICTORIA, Seychelles

1. Introduction

The analyses reported in this paper were undertaken as a complement to those presented in Paper 4 of these Proceedings. According to the latter, the fishing effort being applied on the Saya de Malha and Nazareth Banks in recent years has been grossly excessive. One of the consequences of this is that the fishery is now operating at close to zero economic yield (see Paper 3 of these Proceedings).

The approach proposed (in Paper 4) for improving the economic performance of the fishery is an annual fishery (catch) quota apportioned between the fishing companies, with the companies having the right to trade in quota.

In this paper, results are presented to show some of the short term consequences of management by fishery quota. An underlying presumption is that the objective in the setting of the fishery quota is the attainment of the maximum economic yield1 (MEY).

1 The economic yield is here defined as the difference between the gross revenue in a particular year and the total fishery costs.

2. Method

Management Scenarios Investigated

Two management scenarios were investigated. In scenario "A" the fishery quota was set at 25002 tonnes and 9002 tonnes from the first year for the Saya de Malha and Nazareth Banks respectively. In scenario "B" the fishery quota is decreased in annual steps of 100 tonnes (from the catch in the base year) and then maintained at 2500 tonnes and 900 tonnes respectively from the fourth year.

2 These are the estimated catches at equilibrium associated with the attainment of the MEY given in Paper 4 of these Proceedings.

In all cases, the catch in the base year is the estimated catch at equilibrium from applying the same fishing effort as in 1988. The fishing effort in 1988 was taken as 43400 man-days for the Saya de Malha Bank and 19000 man-days for the Nazareth Bank.

Method of Analysis

The analyses were undertaken separately for the Saya de Malha and Nazareth Banks. The method used is based on the yield per recruit model of Thompson and Bell (1934). Its application involved constructing a number of inter-linked spreadsheets, the first reflecting the base year and the rest reflecting the subsequent ten consecutive years.

The calculations undertaken within the spreadsheets for all the years subsequent to the base year are identical. They are the same as those for the base year, except that the values for the population numbers at the start of the year correspond to the values for the population numbers at the end of the year (for the same cohort) from the previous spreadsheet.

An example of spreadsheet for the base year is given in Appendix 1. The number of recruits having age 0, taken from Paper 4 of these Proceedings was the same in all years. These are R = 14.8 million for the Saya de Malha Bank and R = 6.6 million for the Nazareth Bank.

For the economic analyses, the estimates of annual catch were converted to gross revenue, using 15.9 Rs/kg as the ex-quay price. The fishing efforts were converted to fishery costs using 1177 Rs/man-day and 1110 Rs/man-day. The first of these reflects the costs of an insured vessel with capital annualized at an interest rate of 15 percent, and the second the costs of an uninsured vessel with capital annualized at an interest rate of 10 percent. All the values are taken from Paper 3 of these Proceedings.

3. Results and Discussion

The full results are depicted in Tables 1 and 2, while a selection of results are shown in Figures 1,2,3 and 4. These indicate the extent of accumulation of stock from the base year, along with the associated progressive increase in catch rates and the mean weight of the fish in the catches. The attainment of a new equilibrium does not occur within the ten year period considered.

The extent of improvement in economic performance in the ten years is substantial. In the case of scenario "A" (quota set at MEY level in a single step) for example, the economic yield achieved in the tenth year is nearly Rs 27 million from the two banks. This is 77 percent of the estimated MEY of Rs 35 million (given in Paper 4 of these Proceedings).

Scenario "A" appears to be a better alternative than scenario "B", according to the following:

Criteria

Scenario "A" Rs million

Scenario "B" Rs million

1. Sum of the economic yields over the ten years.

165

128

2. Economic yield in the first year.

0.5

-2.2

3. Economic yield in the fifth year.

17

13

4. Economic yield in the tenth year.

27

25

The estimated mean weights of the fish in the catches during the ten years are also greater with scenario "A". This would be important if the fishing companies were paid higher prices for larger fish (which they are not at present).

As might be expected, scenario "A" requires a sharper initial drop in fishing effort. This is of the order of 23% in the first year, but drops to 10% and under as of the second year. In scenario "B", the reduction in the first year is of only 6%, but attains 12% in the third and fourth years. In view of the age and poor state of repair of many of the vessels in the fleet, such reductions are not likely to result in undue hardship.

4. Concluding Comments

According to the results just described, the attainment of economic benefits is reasonably rapid, particularly from management scenario "A". In reality, the economic yields may increase more rapidly than depicted. This would occur as a consequence of trading in quota where the buyers have lower costs (per input) than the sellers. (In the analyses described earlier, the costs per man-day were kept constant over all years).

In both scenarios, it was assumed that the stock in the base year was at equilibrium. This may not be the case in a real situation. If in fact there were some "accumulated-3 stock (as in 1988) the catch rates and mean individual fish weights would be slightly greater than shown, and the estimates of economic yield would also be correspondingly greater.

3 The "accumulated" stock is here defined as that in excess of the stock at equilibrium in the event of the contemporary fishing effort being maintained.

5. Reference

Thompson, W.F. and F.H. Bell: Biological statistics of the Pacific halibut fishery. 2. Effect of changes in intensity upon total yield and yield per unit of gear. Rep. Int. Fish. (Pacific Halibut). Comm. 8. 49 p.

Table 1: Estimates of fishery performance with management scenario "A"

Note: The efforts in 1989, the base year, were assumed the same as in 1988; the gross revenues were determined at the price of 15.90 Rs/kg; and the total costs and economic yields were determined at costs per effort of 1,177 Rs/man-day (indicated by *) and 1,110 Rs/man-day (indicated by **).

The values for the stock assessment parameters used with the "Thompson and Bell" spreadsheets were as follows:

L (inf) = 61.0 cm a = 0.014 M = 0.20/year
K =0.10/year b = 3.118 q = 0.209 x 10 -4
to = -1.0 year (when length cm and weight gm) R = 14.8 x 10, (Saya de Malha)
tc =5.8 year
R = 6.6 x 10 (Nazareth)

Table 2: Estimates of fishery performance with management scenario "B"

Note: The efforts in 1989, the base year, were assumed the same as in 1988; the gross revenues were determined at the price of 15.90 Rs/kg; and the total costs and economic yields were determined at costs per effort of 1,177 Rs/man-day (indicated by *) and 1,110 Rs/man-day (indicated by **).

The values for the stock assessment parameters used with the "Thompson and Bell" spreadsheets were as follows:

L (inf) = 61.0 cm a = 0.014 M = 0.20/year
K =0.10/year b = 3.118 q = 0.209 x 19
to = -1.0 year (when length cm and weight gm) R = 14.8 x 10 (Saya de Malha)
tc = 5.8 year
R = 6.6 x 10 (Nazareth)

Figure 1: Estimated catch, catch rate and mean individual fish weight with management scenario "A" - Saya de Malha

Figure 2: Estimated catch, catch rate and mean individual fish weight with management scenario "B" - Saya de Malha

Figure 3: Estimated fishery revenue, cost and economic yield with management scenario "A" - Saya de Malha

Figure 4: Estimated fishery revenue, cost and economic yield with management scenario "B" - Saya de Malha

Appendix 1 Estimates of population numbers, mortalities, catch and biomass in the base year for the Saya de Malha Bank

Estimates of population numbers, mortalities, catch and biomass in the base year for the Saya de Malha Bank

Note: L (inf) = 61.0 cm Equations: F = q.X w' = a.L'b

K = 0.10/year
N2 = N1.exp (-(q.X+M)) Cw = Cn.w'

to = -1.00 year
N' = (N1-N2)/(q.X+M) B = N'.W'

tc = 5.8 year
Cn = (q.X/(q.X+M)).(N2-N1)

a = 0.014 (when length cm
D = (M/(q.X+M)).(N2-N1)

b = 3.118 and weight gin)
T = Cn+D

R = 14.8 million
L' = L (inf).(1-exp(-K (t+0.5-to)))

Industry Views on the Mauritius Banks Fishery1 (Paper 6)

by
Simon Mondon
Mauritius Fishing Development Company
33, Volcy Pougnet Street
PORT LOUIS, Mauritius

1 This paper is a summary prepared by staff of the Albion Fisheries Research Centre based on the verbal presentation by Mr. Mondon.

Views of the Fishing Industry

Mr. MONDON of the Mauritius Fishing Development Company expressed the views of the fish producers from the Banks. He attributed the shortage of frozen fish supply during winter to the bad weather conditions prevailing at sea at that time.

Most of the fishing vessels operating on the Banks fish from mid-September through May of the following year. However, fishing at St. Brandon is year round. In fact, there is more fishing effort in winter at St. Brandon when traps are utilized. Trap fishing operations cease by mid-September to allow the fish to breed.

During winter one or two vessels proceed to Chagos. After a two and a half months fishing campaign to the Chagos the vessel brings back about 70 tonnes of fish compared to 140 tonnes in just two months fishing campaign at Saya de Malha or the Nazareth Banks.

The Mauritius Fishing Development Company has adopted the policy of catching not more than 700 tonnes of fish per year in St. Brandon. Despite adherence to this policy, the fish size has got smaller. Any additional production could ultimately lead to the collapse of the fishery.

While all investment costs related to the production of fish are constant or rise every year, the price of fish is fixed relatively low at Rs 9.00 per 0.5 kg.

Amongst others, the price of commodities for feeding the crew and fishermen have increased by 40 percent. The charges for dry docking of vessels have doubled over the past year. Materials for repairs of motors, boats, bunker and fishing gears have also marked considerable increases in price.

In the recent past, a fishing campaign used to be of about 25 days, which implied less expenditure towards food for the crew and the fishermen compared to two months fishing campaigns presently, which entail higher recurrent expenditure.

This paper is a summary prepared by staff of the Albion Fisheries Research Centre based on the verbal presentation by Mr. Mondon.

The companies generally buy secondhand Japanese vessels to the tune of six to seven million rupees. This money has to be accrued for replacement of twenty year old vessels on account of risk hazards.

The companies request a fairness in price control. A comparison was made between the price of frozen fish at nine rupees and ladies finger at twelve rupees for half a kilo. The price of frozen fish should be increased in order to avoid the fishing companies going bankrupt and to meet the challenge of the future.

The facility of duty concessions should be extended to outboard engines, as the companies have to buy these at duty-paid prices. The companies are looking for more assistance from the Government.

It was stated that the fishermen operating on the dories are concerned just about their poundage of fish catch and care least about the outboard engine or the pirogue which has to be maintained by the companies.

The rabbit-fish "cordonnier" from St. Brandon which could not find any buyer in 1986, as it was feared to cause high blood pressure, had ready buyers these days on account of fish shortage on the market. The range of fish species from St. Brandon is fairly wide.


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