by
Hassan El Filali
Hachim El
Ayoubi1
Introduction
Fishing has played an important economic and social role in Morocco since the beginning of the last century. From as early as 1914, many artisanal boats were fishing sardines and supplying canning factories which had been set up on coastal regions by Spanish and French companies.
However, the marine fishery sector did not reach full expansion until the beginning of the 1960s. The great biological potential of economic zone that was extended to 200 miles in 1981, together with the fact that fishery products are growing in worldwide demand, has opened up profitable investment opportunities for both public and private traders.
These two factors have changed the sector's structure and practices on all fronts; from resource management to commercialization, through to development techniques and institutional organizations. Within 40 years this activity has gone from exclusively artisanal and semi-artisanal fishery targeting mostly pelagic species especially sardines used in canning factories, to a more industrialized activity targeting species of increased export value.
Without massive State intervention via public investment in infrastructure and encouraging private investment, this development would not have been possible. The sector was one of the priority development plans during the terms of office in 1973-1977, 1978-1980, 1981-1985 and 2000-2004. Moreover in 1973, an investment code fostering maritime investment was promulgated. The state also concluded fishing agreements with the European Union (EU), Russia and Japan and their financial and technical returns have contributed to the sector's development.
This expansionist policy quickly produced positive social and economic results, not only within the sector itself but also in the national economy in general. Production went from 200 000 tonnes at the beginning of the 1960s, to 1 million tonnes in 2001. The fishing fleet now has around 3 000 coastal and high-sea fishing vessels and 25 000 artisanal boats. Export of fishery products brings 1 billion dollars into the economy annually and represents 15% of total export value. Moreover, 400 000 people live directly or indirectly of fishing which is the main economic activity in various rural regions.
Consequently, such a social and economic attraction has put growing pressure on fishery resources development, leading to overexploitation of the main fish stocks and with intensified fishing effort, to a drastic fall in return on investments. Towards the end of the 1980s, urgent action needed to be taken towards the state of the resource.
During the 1990s solutions were sought through fishing policies, by implementing a whole range of legislative and regulating measures. In 1973, in addition to establishing fishing rights on obtaining a fishing licence, various measures aiming at limiting fishing effort were set up (commercial size, gear, season closure). In 1992 a freeze on new fleet investments was decreed, and in 1995 exceptional waiver arrangements of investment codes were repealed.
All these measures helped in reducing the sector's problems, but issues such as resource preservation and long-term management of fishing effort still need to be dealt with. In 2002, a new management system based on total allowable catch (TAC) was introduced for the octopus fishery.
With the introduction of this new system, financing its management cost is required to support scientific research, control, surveillance and information system. Consequently the State was obliged to take a part of the sector's profits.
The marine fishery sector's new development strategy over the last few years aims to create sustainable and harmonious development conditions based on:
A legislative and regulatory framework for the whole marine ecosystem (new fishing codes).
Resource management using efficient economic tools (fishing quota management).
Profit assessment and a means of equitable redistribution (new taxing system and stakeholder participation in management and investment costs).
Characteristics of the Moroccan marine fishery sector
1. Fishery resources
The Moroccan Atlantic zone is one of the most productive in the world due to its hydroclimatic characteristics such as the trade winds to which it is subjected all year round, as well as the rising up of nutriment enriched cold deep waters (Upwelling).
Four fishing zones can be distinguished with relative importance in terms of activity which have undergone many changes throughout time and different developments. The Mediterranean and North Atlantic zone up to ElJadida (35°45'-32°N), zone A from Safi to Sidi Ifni (32°N-29°N), zone B from Sidi Ifni to Boujdor (29°N-26°N) and zone C from Boujdor to Lagouira (26°N southwards).
Moroccan fishing resources are very diverse. However, exploited stocks are dominated by small pelagics and cephalopods. Sardine and octopus are the most important species in total catch from both these groups.
According to hydroclimatic conditions, small pelagic resources are subject to interannual fluctuations in terms of composition and geographical distribution. Sardine biomass evolves irregularly from one year to another, with a general downward trend however, which is more or less marked according to fishing zones.
In the Northern zone sardine captures have gone from 24 000 tonnes in 1993 to less than 5 000 tonnes in 1999, for almost the same fishing effort. In zone A catches have continually fallen since the beginning of the 1990s. There is evidence of overexploitation in zone B due to an increase in fishing effort. Zone C is the only one which is being constantly regenerated.
According to the Institut national de recherche halieutique (INRH) figures, annual exploitable potential of small pelagics is estimated at 1.1 million tonnes, 450 000 of which are sardines.
Other species of varying importance are also exploited within this family of small pelagics, particularly anchovy, mackerel and horse mackerel.
Cephalopod exploitation is relatively recent in comparison to the small pelagics. Commercial fishery only really began at the beginning of the 1960s in the southern region of Morocco between Cape Juby (27°N -30°N) and Cape Blanc (21°N).
Catches are made up almost entirely of octopus, cuttlefish and squid with a predominance of octopus. Landings of the latter (including those from European Community vessels) doubled between 1980 and 2000, ranging from 53 000 tonnes to 1 050 000 tonnes.
Due to intense fishing efforts, these stocks have become overexploited which has led to a decline in the global abundance of the resource, a modification in their composition, a reduction of fishing zone extension and an increase in the average species size. At the same time cephalopod fleet productivity plummeted from 1980 onwards, which led authorities to institute a period of season closure during October.
The INRH estimates the annual exploitable potential of cephalopod catches at around 123 000 tonnes, 88 000 of which for octopus.
Moroccan waters host diverse resources, at different levels of exploitation as well as little or unexploited fisheries with a high development potential. There are also possibilities of redeployment of fishing efforts in order to take pressure off overexploited stocks.
2. Fishing fleets
The following three fishing sectors share Moroccan fishing resources: artisanal, coastal and high-sea.
The artisanal fleet is made up of 5 to 6 m boats equipped with outboard engines. From the 1980s onwards their number increased significantly, from 3 600 boats in 1981 to 25 000 registered in 2000.
The coastal fishing fleet is composed of 2 500 vessels which represent a global capacity of 84 366 Gross Register Tonnage (GRT). It is made up of 15 to 25 m length purse seines, trawlers, longliners and polyvalent units manufactured locally out of wood. This dilapidated fleet with such a poor technical nature, plays an important social and economic role at a national as well as regional level. It is the main supplier of fresh fish to the local market and to canning industries.
The high-sea fleet developed rapidly after 1973 thanks to State encouragement. It currently has 446 vessels with a global capacity of 144 369 GRT. It is mainly composed of freezer trawlers. The fleet targets cephalopods (octopus, cuttlefish and squid). Production is exclusively destined to foreign markets.
3. Exploitation
The total volume of fishing production is on a steady upward trend. It has gone from around 200 000 tonnes at the beginning of the 1960s to 1.1 million tonnes in 2001.
During the last 13 years, landings have risen at an annual rate of 4%, landings from foreign fleets operating in Moroccan waters within the framework of fishing agreements are not included, nor are a part of artisanal landings or those from non-official channels.
Evolution of fishing production (Source Mer en chiffres)
Two peaks were recorded during this production period, in 1995 (852 000 tonnes) and in 2001 (1.1 million tonnes), each year following the withdrawal of the European Community fleet at the end of the 3rd and 4th fishing agreement.
Coastal fishing accounts for 80% of total landings. In 2002 production amounted to 892 865 tonnes, high-sea fishing recorded 56 451 tonnes and coastal activity 10 771 tonnes, 1 047 tonnes of which were recorded for aquaculture.
Sardines are first in order of importance by species in production with 88% of coastal landings and 80% of total production. Octopus is in second position with 80% of deep-sea catch.
4. Processing and market structure
The fishery products processing industries constitute various units including canning, semi-preserving, freezing and units processing fresh fish, fishmeal and seaweed. In 2002, 732 000 tonnes of coastal catch were processed in these units, i.e. more than 80%.
There are 360 of these establishments, with a turnover of 8 billion DH (Dirhams) which employ 39 000 people, mostly women.
The fishery products processing business is dominated by fishmeal and fish oil production, processing 40% of coastal catch, making a turnover of 450 million DH and generating 1 000 jobs. On the other hand, canning and semi-preserving industries process 20% of catches and their turnover and employment figures are 7 and 27 times more respectively.
Three elements determine distribution, quality, price and availability, particularly in the case of sardines. Fishmeal factories have a major supply during the peak landing season which lasts about 4 months per year. Good quality sardines are sold at a much higher price for local market consumption than for canning factories.
The supply of fresh fish for the local market comes from coastal fishing and to a lesser extent from artisanal fishing. In 2002, 300 000 tonnes of fish were sold locally. Consumption per capita is estimated between 9 and 12 kg.
Fishery products exports amount to around 1 billion dollars, and represent 15% of total export value and 50% of the food processing industry exports.
In terms of quantity and value, Morocco mainly exports frozen cephalopods, particularly octopus, and canned and semi-preserved products.These two families of products alone make up for 88% of export revenue. Morocco's main buyers are France, Italy, Spain, Germany and Japan.
Development of public sector fishing policies
The maritime fishing sector is of particular interest to State development policies due to its economical and social impact on the national economy. The sector accounts for 2.5% of the Gross National Product (GNP) making an annual contribution of 1 billion dollars and employs 400 000 people directly or indirectly. This is all the more important as for certain rural areas, fishing is the main activity which generates employment and income for its population.
Due to such positive effects, the sector has had priority in the various development plans during the 1973-1977, 1978-1980, 1981-1985 terms of office and recently during 2000-2004.
The State made major financial efforts in the 1970s and 1980s, in order to set up basic structures and conditions that were needed for national companies for Moroccan resource development.
On a judicial level, the 1973 Dahir on marine fisheries law established territorial waters to 12 nautical miles, and conditioned fishing access to the obtaining of a fishing licence. In 1981 the Exclusive Economic Zone (EEZ) was widened to 200 miles and that same year a Maritime fisheries Ministry department was created.
In 1973 maritime investment codes were promulgated. According to this regulation, private Moroccan investors were granted, among other advantages from State guarantees on loans up to 70% of total vessel cost, rebate on interest rates, demolition premiums for dilapidated vessels, equipment bonuses, employment bonuses and tax exemption as well as import and business tax exemption. These financial and fiscal incentives boosted fishing fleet investment and allowed the introduction of high-sea fleets.
The repercussions of these expansionist measures were soon felt at resource level at the end of the 1980s. Cephalopod fishery suffered in particular from the increased fishing effort which accompanied maritime investment. Octopus catches dropped steadily between 1993 and 1997, falling from 100 000 tonnes to around half. Yield dropped from 9 tonnes a day to 1 tonne, and high-sea fishing companies went through acute financial crisis. Its intensity was somewhat cushioned due to the relative stability of international prices.
In 1989 the Moroccan government decreed a 1month period (October) of season closure 'repos biologique' for cephalopods and associated species between Cap Boujdor and Cap Blanc.
The institution of a season closure was the premise of a prudent and precautionary policy introduced at the beginning of the 1990s. This 1 month was progressively extended to 7 months per year. In 1992, came a freeze in new fleet investment and a repeal on maritime investment code encouragement.
On an institutional level, in 1997 fishery research was reinforced through the creation of the National Fishery Research Institute (Institut national de rercherche halieutique - INRH) and professional organizations were consolidated through the setting up of four Chambers of marine fisheries with their federation representing artisanal, coastal and deep-sea fishery sectors. These measures were followed by the institution of a Superior Council for Preservation and Exploitation of Fishery Resources.
As a result of these measures, overexploitation decreased in the short term, but a long term solution was still to be found. Season closure 'repos biologique' helped the recovery of octopus productivity. However, the companies' fishing strategy was governed by the production of fishing campaigns following periods of inactivity, which in turn led to an ever greater exploitation of juvenile stock, often making up 40% of total octopus production.
This resource management turned out to be unsuitable and did not bring together both biological requirements and economic viability due to it being based on maximizing catch rather than minimizing costs.
In May 2001 a management plan for octopus fishing was introduced based on a total allowable catch system (TAC). The system allows an annual catch limit of 88 000 tonnes divided up between the three fishing sectors: high-sea, artisanal and coastal.
This new management system was based far more on economic efficiency and optimum use of effort, than on catch maximization. However, within this management system, the problem of investment and public services financing still remained, particularly in scientific research, control, surveillance and the information system.
Fisheries tax system
Characteristics of fisheries tax system
The Moroccan maritime fishing sector has around 30 deductions which are either fiscal, parafiscal or social for services payment.
Access and resource exploitation deductions, refer to fishing licence issuing and renewing, tuna traps or fish farm concessions, to which an additional fishing licence tax is added as well as a fishery research tax (public service tax in aid of the INRH which has been applied since 9 October 2002 to all fishing licence holders).
As well as these taxes, cephalopod and shrimp trawlers pay an additional tax.
The system is essentially composed of three types of deductions:
1. Investment deduction
2. Resource exploitation deduction
3. Fishing activity deduction
Investment deductions
Registration fees (Capital and Territory)
Registration number fees
Nationality certificate renewal fees
Crew list issuing and renewal fees
Import taxes and fees on equipment (vessels, equipment)
Resource development deductions
Tax on issuing or renewal of fishing licences
Additional tax
Chartering tax for the financing of coastal fishery promotion and modernization and for scientific fishery research programmes
Fishery research tax
Fishing activity deductions
- Taxes common to all activities (urban tax, Patent, and other taxes such as IGR, IS, ...).
- Specific deductions (application, determination).
Market tax paid by ship owners in aid of the Office national des pêches (ONP) for running costs and participation to sector development.
Communal tax paid by fish wholesalers in aid of the Local Community.
Regional tax paid by fishmongers in aid of the region.
Toll tax paid by ship owners in aid of ODEP for fishing ports maintenance costs.
Weight tax paid by ship owners in aid of ODEP and ONP.
Tax on fishing bonus (Taxe sur prime de filet).
Social deductions and others: CNSS, Marine Relief Fund, Association fees, insurance for service incurred injury.
Fuel: preferential rates.
In 2002, the total amount from fees and taxes for access to fishery resources in Moroccan waters totalled 36.5 million dirhams (US$3.65 million). During the first quarter of 2003, the amount came to 40.8 million dirhams (US$4.08 million), this was after research tax became generalized. This figure represents 2% of the total catch value.
The sector is also subject to a set of deductions (parafiscal and social) at a marketing level. For the coastal fleet the total amount debited from gross sales (volume of production) represents around 17% of their turnover.
Tax system analysis
Current fiscal and parafiscal deductions, respond more to short term budgetary needs than to a resource management strategy via a deduction on economic profits.
The results of these deductions have contributed directly or indirectly to financing the fishery sector, particularly towards infrastructure, fishing villages and scientific research.
However, as a fishery policy tool, the tax system has certain drawbacks making it not very efficient for resource management measures, giving rise to under-declaring and sales outside official channels. Such drawbacks concern, amongst others, the vast number of deductions, the rates applied and taxation base as well as the quality of services rendered.
For the Ministry of marine fishery, the sector's tax review should have a double purpose. As well as a traditional role as a source of budgetary revenue, it should also represent an important factor in the sector's management policy.
By allowing a deduction of part or all of the income generated by the marine fishery sector, either as a licence or quota tax, or as a revenue tax, the tax system represents an economic tool for fishing effort regulation. In theory, such deductions would put marginal activities in deficit and force companies in difficulty to withdraw. Fishing effort would then drop.
In practice, the results are not immediate as capital and employment redeployment in other sectors are limited. The reactions of such companies may even be the opposite of what is expected, forcing them to increase their fishing capacity in order to avoid a state of crisis.
Therefore, tax deductions can only be considered as an additional tool, to be used concurrently with direct measures limiting effort. They would provide the State with economic means to subsidize and encourage companies to withdraw from overexploited fisheries and facilitate their redeployment elsewhere.
Conclusion
The management system based on property rights which the Marine Fishery Ministry inaugurated by setting up a total allowable catch system in 2002, needs statutory, institutional and economic reforms for it to be a success.
The Ministry's main reforms have concerned consolidating dialogue with companies by setting up the Chamber of fisheries and the Superior Council for Preservation and Exploitation of Fishery Resources, as well as strengthening the status of fishery research and its capacity. It has also implemented a new fishery and marine ecosystem conservation law.
Work on the tax system reform began a year ago, and its aim will be to identify different discrepancies and their economic and social impact. A reform project will also be put forward.
