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THE SPINY LOBSTER FISHERY OF PUNTA ALLEN, MEXICO

Juan Carlos Seijo

Centro de Investigatión y de Estudios Avanzados

del IPN Unidad Mérida, Yucatán

Dilio Fuentes C.

Centro Regional de Investigatión Pesquera

Yucalpetén del INP,

Yucatán

1. INTRODUCTION

The small-scale spiny lobster fishery of Punta Allen, Mexico, is located in Ascension Bay in the south eastern part of the Yucatan peninsula. In 1969 a group of 49 fisherfolk from a small fishing community called Vigia Chico formed a cooperative and migrated to Punta Allen to establish a new fishing village. The purpose of this settlement was to facilitate their harvesting operations of spiny lobster and reef fish species and to have access to fresh water (Salasar, 1981). By 1979, cooperative membership had grown to 71 fishermen and the corresponding community population to about 350. Currently, there are 107 cooperative members fishing in 55 small-scale outboard motor boats (18–25 feet of length) and a total population of 550 inhabitants. The main characteristics of this coastal community are the following:

With regard to financing, the first fisheries credit was granted to the Punta Allen community in 1972 by the Cooperative Promotion Bank (BANFOCO), which provided two inboard motor boats of 35 feet of length. According to Salasar (1981), the credit terms were unclear to the fishermen's cooperative who surprisingly discovered, after a year, that they had only been paying the debt service. As a result, cooperative members decided to return the boats to BANFOCO and cancel the corresponding credit. In 1974, the cooperative received a loan of US $ 8 000 from a general state-owned financing institution called Monte de Piedad to acquire a truck with an icing container, in order to transport their fishery products to the nearest market. This credit was recovered in full within the agreed time span of one year. In 1980, Productos Pesqueros Mexicanos S.A. de C.V., a state-owned fisheries corporation, provided the cooperative with an in-kind credit of 40 fibreglass small-scale boats (25 feet of length) with their corresponding 40 hp outboard motors. For the 1981–1984 period, the above-mentioned corporation provided yearly credits associated with the corresponding expected seasonal cooperative production of spiny lobster (P. argus). These loans were usually paid during the same fishing season. Since 1985, the community has been receiving financial support from four institutions: an international fish marketing corporation, a fisheries development bank, the central bank (through its integrated development fund) and a small - scale commercial bank.

2. INSTITUTIONAL FRAMEWORK

The basic organizational framework regarding small - scale fishermen was established in Mexico by two major events: the 1938 Cooperative Organizations Law and in 1947 the granting, to fishermen organized in cooperatives, of exclusive rights to harvest a number of lucrative marine species, including spiny lobster Panulirus spp. (Secretaria de Pesca, 1987). With regard to resource use and conservation, there are two major fishery regulations: a four-month closed season and a legal minimum size restriction. Internally, the cooperatives have issued over the years a number of rules and enforcement mechanisms which, according to community leaders Pereyra, Cime and Salazar, have contributed substantially to:

One of the main characteristics distinguishing this lobster fishery from others is the informal allocation of property rights that cooperative members have achieved by dividing up in 150 lots the lobster fishing grounds. These fishing lots have an area ranging from 0.5 to 3 km2 and are located in both inner-bay and back-coral reef areas within a depth interval of one to four fathoms (Miller, 1989)1. As a result, they have over the years invested in artificial habitats called “sombras” which facilitate the harvesting of young adults and enhance recruitment. In addition, before every new fishing season starts, bargaining for lots and existing artificial habitats (renting and exchange) takes place among cooperative members. This market mechanism with a collective organization together with the “privatization” of this common property resource seems to have been very effective for optimal resource allocation in this community.

All of the cooperatives' internal norms are rigid and are designed for both individual and collective behaviour that assures healthy and stable community development. Some of these norms include the application of penalties to unacceptable behaviour, but others involve the immediate exclusion of a cooperative member. For instance, a member found harvesting lobsters in someone else's lot or violating the lobster closed season will loose cooperative membership. This is equivalent to loss of community respect and could even be a motive for leaving Punta Allen (Canto et al., 1988). Interviews and observations over the years by one of the authors of this paper suggest that the application of the above community norms is the result of good leadership nourished by highly democratic processes within the cooperative.

1 It should be pointed out that in other areas of the same region fishermen are exposed to health hazards because of the depth at which they usually dive (up to 18 fathoms) when fishing for spiny lobsters. This practice often results in irreversible physical damage to fishermen.

The federal, state and local governments have provided the Punta Allen community with basic physical infrastructures, such as a road link with the rest of the state, a power plant, a potable water system and a small fish processing plant, together with a number of technical assistance and training programmes which may have catalyzed their development. With regard to financing, the cooperatives have access to formal credit systems through federal financial agencies.

3. CURRENT CREDIT SCHEME

During the 1985–1989 period, the Punta Allen fishing community has received financing to build spiny lobster artificial habitats and acquire small-scale boats (25 feet of length) with their corresponding 40 hp outboard motors. The loans have been provided by four state-owned institutions: a fish marketing firm called Ocean Garden Products Inc., the National Bank of Ports and Fisheries Credits, S.N.C. (BANFESCA), the Bank of Mexico (Central Bank) through its integrated development fund FIRA, and the Small-Scale Commerce Bank (BANPECO). It should be pointed out that Ocean Garden has been the major source of systematic financing to the Punta Allen cooperative since 1985.

3.1. Objectives of the credit scheme

There are two main objectives to the above credit scheme:

3.2 Financial arrangements

The financial arrangements with the government corporation involve credit for artificial habitats, small-scale boats and outboard motors, in exchange for an agreement to sell 90 per cent of the cooperative lobster production. Some of the main features of the financial arrangement are listed below.

The Punta Allen fishermen credit scheme has involved a successful recovery rate of 100 per cent in less time than actually agreed upon. It can be observed in Table 1, however, that the recovery time has increased from 4 to 9.5 months, mainly due to the growing loan amounts provided over time.

Table 1 CREDIT SCHEME FOR THE SMALL-SCALE SPINY LOBSTER FISHERY OF PUNTA ALLEN, MEXICO
SeasonAmount (*)Credit purposeTime span (months)Recovery timeRate %
1985–8660.0Artificial habitats outboard motors and boats94.0100
1986–87120.0Same97.0100
1987–88225.0Same129.5100
1988–891250.0Artificial habitats1210.0100
1988–892150.0New processing plant98.049

Source: Ocean Garden Products Inc., Cancun Branch, Mexico, 1989.Sociedad Cooperativa de Production Pesquera (SCPP)“Pescadores de Vigia Chico”, S.C.L. Punta Allen, Mexico.1989.

* Thousands of US$
1 Credit granted in April 1988.
2 Credit Granted in June 1988.

With regard to the other three institutions, they have only recently begun providing credit to the Punta Allen community, so it is impossible to assess their success. They are, however, briefly described in Table 2 and below.

Table 2 OTHER CREDITS PROVIDED TO THE PUNTA ALLEN COOPERATIVE
Credit characteristicsBANPESCAFIRABANPECO
- Amount (US dollars)100 000.0480 000.0120 000.0
- Purpose of creditPlant rehabilitationNew processing plantSame new plant
- Date of disbursement198619881988
- Credit span3 years5 years3 years and 7 months
- Interest ratesCPP+3%PR +2.5%PR +2.5%
- Payments (docs.)QuarterlyHalf-yearlyHalf-yearly
- Recovery rate (to Feb. 1989)70%**

Source: SCPP “Pescadores de Vigia Chico”, S.C.L. Punta Allen, Mexico.FIRA, Bank of Mexico, Merida, Mexico, 1989.
CPP: Weighted average cost of bank deposits.
PR: U.S. Prime Rate
* First payment is due in August 1989.

4. BIOECONOMIC STATUS OF THE FISHERY

4.1. General description of the fishery

One of the main characteristics of the spiny lobster fishery in this area is the use of artificial habitats (sombras) to facilitate and increase harvesting rates. It should be pointed out that these man-made shelters enhance biological productivity (D'Itri, 1985; Miller, 1982; De la Torre and Miller, 1986). By August 1988, before hurricane “Gilbert”, there were 14 210 sombras and 55 small-scale boats (25 ft of length) with their corresponding 40 hp outboard motors. On average, two fisherman participate per boat and most of these are involved in spiny lobster fishery during eight months of the year (July 16 to March 15). They harvest spiny lobsters from the artificial habitats by snorkelling for about five to six hours in a fishing day at a depth range of one to four fathoms. The fishing gears include a gaff and/or gill nets. The fishing grounds are not further than 15 miles (about one hour from Punta Allen) but most of them are 15 to 30 minutes away. This fishery has been reported as underexploited by Fuentes et al. (1988) and Lozano (1988).

4.2. Fishing effort and corresponding catch

The average daily catch per boat is 12 kg of lobster tail (Arceo and Seijo, 1989). It should be mentioned that spiny lobsters in this area are marketed mainly without cephalotorax, which is currently discarded. The processing of tails takes place at cooperative facilities. The reception and freezing are usually done by men while cleaning and packaging are effected by women.

Spiny lobster landings for the last ten fishing seasons have been steadily increasing, from 25.8 tonnes lobster tail weight (1/3 of live weight) in the 1978–1979 season to 66.2 tonnes in the 1987–1988 season. The relationship between the number of artificial habitats in operation (a measure of fishing effort) and the corresponding spiny lobster seasonal catch can be observed in Table 3. In ten years the number of sombras increased from 5 500 to 13 600 and the catch per shelter has ranged from 4.69 to 5.82 kg per annum.

Table 3 ARTIFICIAL HABITATS AND SEASONAL SPINY LOBSTER CATCH IN ASCENCION BAY, MEXICO.
Fishing seasonArtificial habitatsCatch (kg)Catch per habitat (kg)
1978–19795 50025 8004.69
1980–19817 00040 0005.71
1986–19879 50055 3005.82
1987–198813 60066 r2004.86

Sources: Miller (1982).

SCPP “Pescadores de Vigia Chico”, S.C.L., Punta Allen, Mexico

4.3. Costs and revenues

With regard to total costs of fishing effort, the average annual total costs of a small-scale boat operation is US$ 14 030.3 considering the weighted average of 81 fishing days per boat during the eight months of the spiny lobster fishing season. These include operating costs, fixed costs and the opportunity cost of capital and labour (Seijo et al., 1989). Therefore, the total cost of the cooperative fishing effort during the 1987–1988 fishing season was US$ 771 666.5.

During the last fishing season (1987–1988), the total revenue received was US$ 1 140 626.0, with an average price of US$ 17.23 per kg of lobster tail (1987 prices). Net revenues generated by the fishing effort of cooperative members during that season were US$ 368 959.5, resulting in an average of US$ 3 457.6 per member. It should be noted that each member's share of the net benefits corresponds to his/her contribution to the total catch. Together with this level of surpluses, increasing education, recreational and health services have resulted in overall improvements in community welfare (Federacion de Cooperativas de Quintana Roo, 1986).

These figures explain the cooperative capacity to pay for credits received up to 1988. Even though the fishery is still generating economic rent, the amount of the loans has recently increased dramatically (Tables 1 and 2) to levels that might result in future difficulties to pay the principal and corresponding debt services.

5. MARKETING AND PROCESSING

In Mexico, the spiny lobster fishery is legally reserved to fishermen's cooperatives, as well as those of seven other lucrative species, but marketing is not restricted (Secretaria de Pesca, 1988) and is usually effected by the private sector of the Mexican economy, the fishermen's cooperatives themselves, and by state-owned corporations. In Punta Allen, marketing of lobster harvested by the fishermen's cooperative is performed by Ocean Garden Products, Inc.

5.1. Arrangements linking marketing and credit scheme

Credit provided to the Punta Allen cooperative to purchase boats, motors, and materials for artificial habitats commonly used to facilitate harvesting, has been successfully recovered by Ocean Garden through a deduction of 30 per cent of the invoice value of the catch until the loan is paid in full. The above arrangement is laid down in the contract signed by the cooperative and Ocean Garden, which specifies the cooperative's commitment to deliver all its spiny lobster production to the state-owned marketing enterprise. The product, namely the lobster catch, is the guarantee for the provided credit. Ocean Garden monitors the fishing cooperative's processing activities (handling, freezing, packaging and transportation) in order to control product quality. It should be noted, however, that there are several other cooperatives in the region which have similar arrangements with Ocean Gardens, and which have not been able to pay their debts on time (Severo Gongora, pers.comm.). This indicates that there may be additional factors determining the success of the credit scheme, such as the self-help approach to community development, geographic isolation and the internal cooperative rules, which are not necessarily present in other spiny lobster cooperatives in the same area.

5.2. Marketing channels

The Punta Allen fishermen's cooperative delivers frozen lobster tails packed in 10 lb boxes to the Ocean Garden facility located in Cancun, 200 km away. Ocean Garden is then responsible for providing the export service and product marketing in the U.S. through its Brownsville distributing centre. When product quality demanded in the international market is not met, Ocean Garden channels the product to the domestic market, mostly to major cities such as Mexico City, Monterrey and Guadalajara and to tourist areas such as Cancun. It should be noted that about 90 per cent of Punta Allen's catch is distributed on the international market. For the marketing service mentioned above, Ocean Garden charges the fishermen's cooperative 7.5 per cent of product value.

5.3. Processing and quality control

Ocean Garden specifies, supervises and controls processing and packaging in order to ensure quality standards for both international and domestic markets. There are three quality grades for spiny lobsters; the first two are sent to the export market and the third to the domestic market. Grade 1 represents a product with appropriate flesh colour and texture, without melanosis (tissue darkening) or damage to flesh and corresponding tail carapace. The second grade represents lobsters with 5 to 10 per cent of the damage mentioned above. As a result, two different prices are paid to the cooperative according to quality grade. The third grade tolerates between 10 and 29 per cent of tails below quality standards. This product is distributed by Ocean Garden to the domestic market. Processing of spiny lobsters involves the following steps:

Product presentation involves frozen lobster tails individually wrapped in plastic bags. These are packaged in 10 lb boxes manufactured in accordance to export crating rules and regulations. Ocean Garden advises the fishermen's cooperative, selects the supplier and charges the cooperative.

5.4. Marketing costs and margins obtained by Ocean Garden

Marketing and distribution costs of spiny lobster harvested in Punta Allen are estimated as a percentage of final product value which involves a 7.5 per cent commission to be paid to Ocean Garden Products Inc. It represents 87 per cent of the total marketing costs. Other costs include freight to a distribution centre located in Brownsville, Texas, export services, taxes and insurance (see Table 4).

Table 4 MARKETING COSTS OF SPINY LOBSTER FROM PUNTA ALLEN, MEXICO.
CostsAmount (US $ per pound)%
- Ocean Garden Commission (7.5 per cent of product value).67587.0
- Freight to Brownsville.08010.3
- Taxes and export services.0151.9
- Insurance.0060.8
TOTAL MARKETING AND DISTRIBUTION COSTS.776100.0

Source: Ocean Garden Products Inc., Cancun, Mexico

Therefore, the Punta Allen fishing community pays 8.6 per cent of their final product value (based on an average price of US$ 9.0 per pound of lobster tails) for marketing and distribution of their spiny lobster harvest in the international market.

5.5. Grading and price determination

Prices paid to the cooperative are established by Ocean Garden as a result of existing export market prices and the corresponding size grading. The current prices (June, 1989) are presented in Table 5.

Table 5 shows that consumer preferences are reflected by relatively high prices of spiny lobster tails ranging from 5 to 9 ounces. It should be noted that Punta Allen fishermen harvest relatively small lobsters (with a mode of 13.5 to 14.0 mm of tail length) as compared to other lobster fisheries in the same region.

5.6. Spiny Lobster marketing trend

Spiny lobsters exported in 1988 from Punta Allen to the United States represent 0.27 per cent of the total U.S. spiny lobster imports. The U.S. import trend of this crustacean is shown in Table 6. After the dramatic decline of 20 per cent of imports in 1980, imports of spiny lobster steadily increased up to 1985 when the import level of 68 000 tonnes was reached again. From then on, the import levels have remained above 60 000 tonnes. It would seem, therefore, that there is a relatively stable market for Punta Allen's spiny lobster.

Table 5 SPINY LOBSTER PRICES PAID TO THE FISHERMEN'S COOPERATIVE OF PUNTA ALLEN.
Weight of lobster tail (ounces)US$/1b
2 to 46.64
47.76
58.20
68.56
78.56
88.56
98.38
107.98
10 to 127.40
12 to 147.31
14 to 167.22
16 to 187.04
18 to 206.73
20 to 246.64
24 to 286.64
28 over6.64

Source: Ocean Graden Products Inc., Cancun, Mexico

Table 6 SPINY LOBSTER IMPORT TREND IN THE UNITED STATES FROM 1979 TO 1988
YearLive weight (thousand tonnes)Rate of Change (%)
197968.6-
198054.6-20.4
198157.65.5
198255.0-4.5
198359.88.7
198467.012.0
198567.60.9
198666.1-2.2
198766.20.2
198860.1-9.2

Source: NOAA, 1989.

6. FACTORS DETERMINING THE SUCCESS OF THE CREDIT SCHEME

Some of the factors that may have determined the degree of success of credits provided to Punta Allen's cooperative up to 1988, are the following:

7. CONCLUSIONS

The relative success of the Punta Allen credit scheme seems to have been a function not only of the inherent characteristics of the credit approach, but also of the existing rules within the community, the appropriateness of the fishing technology to the natural ecosystem, the existence of marketing mechanisms within a voluntary collective organization, and the possibility of generating surpluses (economic rents) from a still underexploited renewable resource. It should be noted that fishermen's cooperatives in this region, fishing for the same marine species (spiny lobster), and receiving credits from the same financial sources are currently close to default (Carlos Rihani, pers. comm.). The inability to meet cooperative objectives and pay back debts and corresponding services is a common scenario in many small-scale tropical fisheries (Brainerd, 1986; FAO, 1986). Further research efforts should be conducted to derive cause and effect relationships from this and other successful credit schemes provided to small-scale fisheries.

References

Arceo, P. & Seijo, J.C. 1989. Production function analysis of the spiny lobster (Panulirus argus) fishery. (Unpublished manuscript, in review).

Brainerd, T.R. 1986. Lessons from fisheries development in West Africa. ICMRD Working Paper N°9. University of Rhode Island, Kingston.

Canto, E., Naal, D. & Ramires J. 1988. Reglamento interno de la Sociedad Cooperativa de Produccion Pesquera “Pescadores de Vigia Chico”. S.C.L. Punta Allen.

D'Itri, F. (ed.). 1985. Artificial reefs: marine and freshwater applications. Lewis Publishers Inc., Chelsea, Michigan.

De la Torre, R. and Miller, D. 1986. Update of the Mexican Caribbean artificial habitat based Spiny Lobster (Panulirus argus): the evaluation of design material placements optimums. Proc.Gulf & Caribb.Fish.Inst, 38:582–9.

FAO. 1986. Report of the FAO/CECAF/IDAF Workshop on Small-Scale Fisheries Development and Management, Lomé, Togo, 20–29 November 1985. Rome, FAO, 25p.

Federacion de Cooperatives de Q. Roo. 1986. Estudio integral del sector pesquero cooperativizado en Quintana Roo. (Unpublished manuscript).

Fuentes, D., Arceo, P. & Salas, S. 1988. Preliminary management considerations for the Spiny Lobster fishery of Yugatàn. Proc.Workshop Manage.Lobs.Fish. Puerto Morelos, Mexico, June 1989. ICLM&-INP. (In press).

Lozano, E. 1988. Management recommendations for the Ascencion and Espiritu Santo Bays. Proc.Workshop Manage.Lobs.Fish. Puerto Morelos, Mexico, June 1988. CILM&-INP. (In press).

Miller, D. 1982. Construction of shallow water habitats to increase lobster production in Mexico. Proc.Gulf & Caribb.Fish.Inst., 34:168– 79.

NOAA. 1989. Fisheries of the United States 1988. Current Fisheries Statistics N°.8800.

Salasar, C. 1981. Relato de la fundacion de la Sociedad Cooperativa y de la Comunidad Colonia Javier Rojo Gomez. Punta Allen, Mexico. 10p.

Schmid, A.A. 1978. Property, power and public choice. Praeger, New York. 316p.

Secretaria de Pesca. 1988. Ley federal de pesca y su reglamento. Mexico. 84p.

Seijo, J.C., Fuentes, D., Arceo, P. & Salas, S. 1989. Comparative bioeconomic analysis of the small-scale Spiny Lobster (Panulirus argus) fishery of Yucatan continental shelf. (Unpublished manuscript, in review).

Seijo, J.C., Salas, S. & Arceo, P. 1988. A management framework for the Spiny Lobster (Panulirus argus) fishery of the Gulf of Mexico and Caribbean Sea. Proc.Workshop Manage.Lobs.Fish. Puerto Morelos, Mexico. June 1988. ICLM-INP. (In press).


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