Encouraging them to come to us: changing the way that information is made available to farmers

Recommendations for changes to service provision and fisheries policy in support of poverty alleviation emerged recently in India from a process know as facilitated advocacy (see Case Study SI 2) that helped to negotiate and support a role for poor people and their service providers, to contribute to changes in services and policies. Two of the key recommendations to emerge from farmers and fishers, which were prioritized by Fisheries Departments, were to change the way that information is made available and to simplify procedures for accessing government schemes and bank loans. This case which identifies the origin of these recommendations to change the way that information is made available, shows how different models of the concept have emerged, and follows the development of the One-stop Aqua Shops (OAS) in the eastern Indian states of Jharkhand, Orissa and West Bengal, that represent a new and vital tier in communications in aquaculture. (12 p.)

The Annual Economic Survey of Federal Gulf Shrimp Permit Holders: Report on the Design, Implementation, and Descriptive Results for 2006

This technical memorandum documents the design, implementation, data preparation, and descriptive results for the 2006 Annual Economic Survey of Federal Gulf Shrimp Permit Holders. The data collection was designed by the NOAA Fisheries Southeast Fisheries Science Center Social Science Research Group to track the financial and economic status and performance by vessels holding a federal moratorium permit for harvesting shrimp in the Gulf of Mexico. A two page, self-administered mail survey collected total annual costs broken out into seven categories and auxiliary economic data. In May 2007, 580 vessels were randomly selected, stratified by state, from a preliminary population of 1,709 vessels with federal permits to shrimp in offshore waters of the Gulf of Mexico. The survey was implemented during the rest of 2007. After many reminder and verification phone calls, 509 surveys were deemed complete, for an ineligibility-adjusted response rate of 90.7%. The linking of each individual vessel’s cost data to its revenue data from a different data collection was imperfect, and hence the final number of observations used in the analyses is 484. Based on various measures and tests of validity throughout the technical memorandum, the quality of the data is high. The results are presented in a standardized table format, linking vessel characteristics and operations to simple balance sheet, cash flow, and income statements. In the text, results are discussed for the total fleet, the Gulf shrimp fleet, the active Gulf shrimp fleet, and the inactive Gulf shrimp fleet. Additional results for shrimp vessels grouped by state, by vessel characteristics, by landings volume, and by ownership structure are available in the appendices. The general conclusion of this report is that the financial and economic situation is bleak for the average vessels in most of the categories that were evaluated. With few exceptions, cash flow for the average vessel is positive while the net revenue from operations and the “profit” are negative. With negative net revenue from operations, the economic return for average shrimp vessels is less than zero. Only with the help of government payments does the average owner just about break even. In the short-term, this will discourage any new investments in the industry. The financial situation in 2006, especially if it endures over multiple years, also is economically unsustainable for the average established business. Vessels in the active and inactive Gulf shrimp fleet are, on average, 69 feet long, weigh 105 gross tons, are powered by 505 hp motor(s), and are 23 years old. Three-quarters of the vessels have steel hulls and 59% use a freezer for refrigeration. The average market value of these vessels was $175,149 in 2006, about a hundred-thousand dollars less than the average original purchase price. The outstanding loans averaged $91,955, leading to an average owner equity of $83,194. Based on the sample, 85% of the federally permitted Gulf shrimp fleet was actively shrimping in 2006. Of these 386 active Gulf shrimp vessels, just under half (46%) were owner-operated. On average, these vessels burned 52,931 gallons of fuel, landed 101,268 pounds of shrimp, and received $2.47 per pound of shrimp. Non-shrimp landings added less than 1% to cash flow, indicating that the federal Gulf shrimp fishery is very specialized. The average total cash outflow was $243,415 of which $108,775 was due to fuel expenses alone. The expenses for hired crew and captains were on average $54,866 which indicates the importance of the industry as a source of wage income. The resulting average net cash flow is $16,225 but has a large standard deviation. For the population of active Gulf shrimp vessels we can state with 95% certainty that the average net cash flow was between $9,500 and $23,000 in 2006. The median net cash flow was $11,843. Based on the income statement for active Gulf shrimp vessels, the average fixed costs accounted for just under a quarter of operating expenses (23.1%), labor costs for just over a quarter (25.3%), and the non-labor variable costs for just over half (51.6%). The fuel costs alone accounted for 42.9% of total operating expenses in 2006. It should be noted that the labor cost category in the income statement includes both the actual cash payments to hired labor and an estimate of the opportunity cost of owner-operators’ time spent as captain. The average labor contribution (as captain) of an owner-operator is estimated at about $19,800. The average net revenue from operations is negative $7,429, and is statistically different and less than zero in spite of a large standard deviation. The economic return to Gulf shrimping is negative 4%. Including non-operating activities, foremost an average government payment of $13,662, leads to an average loss before taxes of $907 for the vessel owners. The confidence interval of this value straddles zero, so we cannot reject, with 95% certainty, that the population average is zero. The average inactive Gulf shrimp vessel is generally of a smaller scale than the average active vessel. Inactive vessels are physically smaller, are valued much lower, and are less dependent on loans. Fixed costs account for nearly three quarters of the total operating expenses of $11,926, and only 6% of these vessels have hull insurance. With an average net cash flow of negative $7,537, the inactive Gulf shrimp fleet has a major liquidity problem. On average, net revenue from operations is negative $11,396, which amounts to a negative 15% economic return, and owners lose $9,381 on their vessels before taxes. To sustain such losses and especially to survive the negative cash flow, many of the owners must be subsidizing their shrimp vessels with the help of other income or wealth sources or are drawing down their equity. Active Gulf shrimp vessels in all states but Texas exhibited negative returns. The Alabama and Mississippi fleets have the highest assets (vessel values), on average, yet they generate zero cash flow and negative $32,224 net revenue from operations. Due to their high (loan) leverage ratio the negative 11% economic return is amplified into a negative 21% return on equity. In contrast, for Texas vessels, which actually have the highest leverage ratio among the states, a 1% economic return is amplified into a 13% return on equity. From a financial perspective, the average Florida and Louisiana vessels conform roughly to the overall average of the active Gulf shrimp fleet. It should be noted that these results are averages and hence hide the variation that clearly exists within all fleets and all categories. Although the financial situation for the average vessel is bleak, some vessels are profitable. (PDF contains 101 pages)

Adaptation of coastal communities in the Philippines to the impacts climate change

The Quedan and Rural Credit Guarantee Corporation (Quedancor) of the Philippine Department of Agriculture has the critical responsibility of providing and improving credit assistance to fishers, it also has the task of helping its beneficiaries meet the repayment obligations of their loans. One reason for defaults can be attributed to the devastating impact of natural calamities. Schemes in place are still insufficient to help safeguard lending programs and operations from non-repayment of loans due to production losses and damages to personal properties.(PDF contains 5 pages) Natural calamities include the uncertainties and vagaries of weather and climate that bring about typhoons, floods, and drought; earthquakes; volcanic eruption as well as pests and diseases that affect the productivity of fisheries. When natural calamities occur, small fishers are unable to pay their loans from Quedancor, moreover they have difficulty renewing their loan applications from Quedancor or accessing credit from other sources. Failure to access credit could disable them to continue venture on fishing activities and could eventually jeopardize the welfare of their entire household. The inability of creditors to pay their loans and meet their obligations also impair, to a large extent, the financial operation and viability of the lending institutions. Risk management schemes currently employed include price stabilization measures, targeted relief` to typhoons and drought victims, and crop insurance systems, to name a few. Some of these schemes are becoming very expensive to implement. Moreover, they fail to enable fishers regain sufficient resources so that they may continue production.

Impact of Nigerian Agricultural Cooperative and Rural Development Bank (NACRDB) loan to artisanal fishermen in Lake Kainji

This study was conducted to assess the impact of Nigerian Agricultural, Co-operative and Rural Development Bank Loan on beneficiaries and non-beneficiaries fishermen in Lake Kainji. A total of fifty fishermen (25 beneficiaries and 25 non-beneficiaries) were randomly selected from five fishing villages along the lake basin. Data collected were scored and the percentages of the parameters were calculated appropriately. The types of loans disbursed to beneficiaries revealed that 52% was cash and 48% was in kind. The credit package ranged between N5, 000 to N150, 000 only. Only 48% of the loans granted were paid while the rest remained unpaid. The results obtained from the membership of fishermen Cooperative showed that 64% of beneficiaries were members while 36% were non-members. Also 36% of non-beneficiaries were members while 64% were not. The Common fishing gears used by the two categories of fishermen include gillnets longline, castnet and driftnets. Sixty percent of beneficiaries and 8% of non-beneficiaries fishermen were using canoe with outboard engines while the rest used canoes with paddles. Beneficiaries earned a higher income (N1, 000 to N9, 000) daily than non-beneficiaries (N1, 000 to N6, 000) daily from sales of fish caught. Major contrainsts to increased catch and income identified include inadequate capital, non- availability of fishing inputs, stealing of fishing gears, lack of access to credit facilities and menace of stump and water hyacinth in the lake. Lastly, recommendation were made for the bank management, government and other lending institutions on how to improve the livelihood of the Artisanal fishermen by increasing the loan usually granted

Evaluation of the contribution of fisheries and aquaculture to food security in developing countries

Fish contain important nutrients such as essential fatty acids, iron, zinc, calcium, vitamin A and vitamin C. Production of freshwater fish depends on the strategic application of various management techniques. The demand for fish products has increased beyond the natural supply, resulting in a high pressure on fisheries. Development of aquaculture is necessary for a rapid growth in fish production. A number of constraints hamper the development of aquaculture. Introduction of polyculture technologies in some countries is a way of maximizing production from different levels of the food chain. The roles of women in making fish products available to consumers is frequently over-looked by policy makers. Gender equity in policy-making and management of fisheries and in capacity building is an important issue. Fish production from inland waters and coastal areas can be increased by adopting cage and pen culture systems. Input subsidies and loans to resource poor farmers can boost fish production.

Clam farming in the Mekong Delta, Vietnam

The Mekong Delta region in southern Vietnam has high potential for coastal aquaculture, including mollusc culture. Many mollusc species are cultured for domestic and export markets including white clam (Meretrix lyrata Showerby) and blood cockle (Arca granosa). Techniques for clam farming include the nursery and grow-out phases. At present, there are approximately 600 coastal families engaged in clam farming over a total area of 1,870 ha, of which 82.63% is used for the grow-out phased and 17.7% for the nursery phase. Nursery areas are near the coast and receive less than 5 hours of sunlight per day. The average area for a nursery is 3-4 ha and it is fenced with a net or bamboo stakes to prevent clams from escaping and to prevent water currents from carrying them away. Grow-out farm areas are further from the coast and are exposed to sunlight for only 2-3 hours/day. Average farm area for grow-out is 5-6 ha, and may or may not be fenced. Average operating cost is US$1100 per ha for nursery and US$757 per ha for grow-out (the cost of capital assets are not included) with loans being the main source of financial. Problems for clam farmers in the area include natural phenomena, inadequate culture techniques, lack of financing or credit systems, and marketing. Environment-related problems that cause clam mortality include flooding, and freshwater effluent and siltation or sedimentation from Mekong River. Other problems that constrain the development of clam culture in the area are: marketing problems such as lack of buyers and price fluctuations; exploitation of the natural clam populations.

Role of the state and financial institutions in financing the fishing industry

The experience of the Government in the recovery of loans for 28 foot mechanized vessels has been unsatisfactory. The author examines the various aspects which have contributed to this situation, and considers arrangements for financing purchase of such vessels. The risks associated with the investment in 38 foot vessels are high, and it seems that the reluctance of private investors to make the required contribution from personal funds is a result of fear of the unknown. Current incentives provided by the Government to the private sector for the purchase of 38 foot vessels are considered to be adequate.

Financial assistance for purchase of large fishing vessels

The Government of Sri Lanka is improving off-shore and deep-shore fishing by introducing more sophisticated and larger vessels into the Sri Lanka waters, together with the offer of subsidies, tax holidays and other concessions to those who seek to operate such fishing vessels. As a first step, some thirty 38 foot class fishing vessels are to be introduced. The requisite variety and quantity of fishing gear is supplied together with the vessels, and operators will be given further assistance to either export or market their catches locally by provision of insulated fish transport vans, jeeps with trailers, crushed ice plants, fish storage cabinets and adequate spares for at least the next few years. A description is given of the credit terms offered for the purchase of such vessels, pre-shipment finance, and loans and hire purchase facilities.

Institutional support for freshwater aquaculture development: a study of Mirzapur district of Uttar Pradesh, India

The aquaculture sector has been playing an increasingly dominating role in Indian fisheries scenario since the last two and half decades. Introduction of induced breeding and composite fish culture (CFC) technologies has changed the freshwater aquaculture sector in India. Institutional support has been one of the most crucial aspects in all fisheries development programs, more so in the Indian context where most of fish farmers are socially and economically weak. The innovation of CFC technology in freshwater aquaculture sector in the early seventies generated the need for adequate and effective institutional support to farmers. Under the freshwater aquaculture development program, the Fish Farmers Development Agencies (FFDA) have been established at district level to provide technical and extension support to the farming community besides arranging ponds on lease and supply of seeds. In addition to above, FFDAs are also expected to arrange loans from banks and provide subsidies. Thus, FFDAs are meant to provide institutional support to fish farming community in the country. In view of the above, an effort was made to study the adequacy and effectiveness of institutional support provided by the FFDA, Mirzapur for the development of aquaculture in Mirzapur district of Uttar Pradesh {U.P.), India. Study reveals that leasing of ponds for fish farming has been favourable to economically weaker sections of societies while bank loan accessibility is more for those having relatively higher economic status. Though the FFDA, Mirzapur performed well in providing training to potential fish farmers and creating awareness about fish farming, its effectiveness could not be equally seen in seed supply.