Unravelling Supply Chain Networks of Fisheries in India: The Transformation of Retail (SpringerBriefs in Economics) 981167602X, 9789811676024

Table of contents :
Acknowledgements
Contents
About the Authors
1 Introduction
1.1 Motivation
1.2 Data and Methodology
1.3 Structure of the Book
References
2 A Brief Review of Literature
2.1 Introduction
2.2 Importance of the Fisheries Sector
2.3 Fisheries Supply Chain Management
2.3.1 Concepts of Supply Chain and Value Chain
2.3.2 Fisheries Supply Chain: Key Characteristics
2.4 Fisheries Supply Chain: Country Experiences
2.4.1 Small Fishermen in the Supply Chain
2.5 Fisheries Supply Chain in India
2.6 Research Gaps
References
3 Fisheries Supply Chain: International Experiences
3.1 Introduction
3.2 Fisheries Supply Chain in Asia: A Case of Bangladesh
3.2.1 Supply Chain of Hilsa in Bangladesh
3.3 Fisheries Supply Chain in Latin America: A Case of Peru
3.3.1 Supply Chain of Mahi Mahi in Peru
3.4 Fisheries Supply Chain in Africa: A Case of Egypt
3.4.1 Supply Chain of Tilapia in Egypt
3.5 Fisheries Supply Chain in SIDS: A Case of the Maldives
3.5.1 Supply Chain of Tuna in the Maldives
3.6 Fisheries Supply Chain in a Landlocked Country: A Case of Nepal
3.6.1 Supply Chain of Aquaculture in Nepal
3.7 Key Insights
References
4 Fisheries Sector in India—An Overview
4.1 Introduction
4.2 Fish Production in India
4.3 Export Performance of the Indian Fisheries Sector
4.3.1 Direction of Trade
4.4 Barriers to Trade
4.4.1 Tariff Barriers
4.4.2 Non-tariff Measures
4.5 Import Performance of Indian Fisheries Sector
4.6 Conclusion
References
5 Study Area and Methodology
5.1 Introduction
5.2 Methodology (Production to Wholesale)
5.2.1 Tools and Techniques Used
5.2.2 Study Area
5.3 Methodology to Identify Retail Chains
5.3.1 Study Area
5.3.2 Tools and Techniques Used to Capture the Retail Supply Chain
5.4 Methodology for Fresh Water Fish Segment
5.4.1 Locale of the Study
References
6 Supply Chain from Fishermen to Wholesaler
6.1 Introduction
6.2 Supply Chain Players of Marine Fish
6.2.1 Producers
6.2.2 Boat Owners
6.2.3 Financial Power in the Supply Chain
6.2.4 Merchants/Company Agents/Wholesalers
6.2.5 The Evolving Market Structure
6.3 Peripheral Activities and the Agents Involved
6.3.1 Ice Providers
6.3.2 Loading and Unloading Workers
6.3.3 Transporters
6.3.4 Net Manufacturers
6.4 Supply Chain: A Schematic View
6.5 Share of Different Agents in the Value Chain
6.6 Moving from Marine to Freshwater Products
6.6.1 Supply Chain for Fish Caught from Large Water Bodies Within the State
6.7 Supply Chain of Fresh Fish or Aquaculture Products from Outside the State
6.8 Conclusion
References
7 Fishermen in the Supply Chain: Challenges Faced from a Decent Work Perspective
7.1 Introduction
7.2 Working Conditions in the Indian Fisheries Sector—An Analysis of NSSO Data
7.2.1 Overview and Composition of the Data
7.2.2 A Note on the Use of Codes
7.3 Demographic Attributes of the Sample
7.4 Indicators of Decent Work in the Fisheries Sector
7.4.1 Adequacy of Remuneration and Productivity of Work
7.4.2 Hours of Work
7.4.3 Gender Disparities in Work
7.4.4 Stability and Security of Work
7.4.5 Social Security
7.4.6 Presence of Trade Unions
7.5 Conclusion
References
8 Retail Supply Chains: A Comprehensive Classification Capturing Emerging Trends
8.1 Introduction
8.2 Mapping of Domestic Marketing Channels: Karnataka and Kerala
8.3 Wholesale Market Accessed by the Retailers
8.3.1 Multinational Wholesalers: Business-to-Business Model
8.3.2 Domestic Wholesalers in Bangalore
8.4 Mapping the Retail Channels
8.4.1 Unorganised Retail Channels
8.4.2 Organised Retail Marketing
8.5 Mapping of Marketing Channels: Assam
8.6 Improving Efficiency of Retail Supply Chains: Major Concerns
8.7 Efficiency Improving Endeavours: Selected Cases
8.8 Conclusion
References
9 Fish Processing Sector: Concerns and Policies
9.1 Introduction
9.2 Identifying the Supply Chain
9.3 Fish Processing Sector
9.4 Concerns
9.5 Concluding Remarks and Policy Suggestions
References
10 Summary and Concluding Remarks
References

Citation preview

SPRINGER BRIEFS IN ECONOMICS

Meenakshi Rajeev Supriya Bhandarkar

Unravelling Supply Chain Networks of Fisheries in India The Transformation of Retail 123

SpringerBriefs in Economics

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More information about this series at https://link.springer.com/bookseries/8876

Meenakshi Rajeev · Supriya Bhandarkar

Unravelling Supply Chain Networks of Fisheries in India The Transformation of Retail

Meenakshi Rajeev Centre for Economic Studies and Policy Institute for Social and Economic Change Bangalore, Karnataka, India

Supriya Bhandarkar Centre for Economic Studies and Policy Institute for Social and Economic Change Bangalore, Karnataka, India

This Work’s research was partly funded by Norwegian Institute of International Affairs, Norway, Oslo (Project No. 233836) ISSN 2191-5504 ISSN 2191-5512 (electronic) SpringerBriefs in Economics ISBN 978-981-16-7602-4 ISBN 978-981-16-7603-1 (eBook) https://doi.org/10.1007/978-981-16-7603-1 © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Acknowledgements

It gives us great pleasure to acknowledge the help received from many people and institutions during the course of the present study. At the outset, we would like to thank the Norwegian Research Council and the Norwegian Institute of International Affairs (NUPI) for their support to conduct this research (Project No. 233836). We are especially thankful to Dr. Arne Melchior, NUPI, Oslo, Norway, for his valuable support. An earlier version of the work was brought out as a monograph from our institute, and we acknowledge the support we received from ISEC. We also thank ICDD, Germany for its support to present some of our findings. This study involved primary data collection and discussions with people working in the fisheries sector. Therefore, we would like to place on record our due gratitude to a large number of government officials for giving us their time and sharing their insights into various aspects of the fisheries sector. We are especially grateful to the officials of MPEDA, for sparing us their valuable time. Dr. Sinappa D of Agriculture University, Fisheries Department, Bangalore has been extremely helpful. We also thank the Fishermen’s Association and the Boat Owners Association for the useful discussions we had with them. Mr. Elvis John has carried out our survey in Kerala, and without his sincere work, this research would not have been complete. We received support from a large number of fishermen, fish traders, and boat owners in various parts of Kerala, Karnataka, and Assam, who patiently answered our queries. During the fieldwork carried out in Bangalore, we received support from the Sales and Merchandise Department of Metro Cash and Carry, Yeshwanthpur, officials dealing with the fish section of supermarkets such as Star Bazaar, as well as various traders in Russell Market. We wholeheartedly thank them for their time and for providing us with valuable information during data collection. We are immensely thankful to Mr. Pranav Nagendran for his support. We would also like to acknowledge the invaluable and timely guidance we received from Dr. Dipankar Dasgupta.

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vi

Acknowledgements

We would like to thank the Institute for Social and Economic Change (ISEC) for providing the administrative and infrastructural support to complete this work. We are also grateful to the Reserve Bank of India (RBI), Mumbai, and ICSSR, Delhi for their support to ISEC. The usual disclaimers apply.

Contents

1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Data and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 Structure of the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 1 3 4 6

2

A Brief Review of Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Importance of the Fisheries Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Fisheries Supply Chain Management . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.1 Concepts of Supply Chain and Value Chain . . . . . . . . . . . . . 2.3.2 Fisheries Supply Chain: Key Characteristics . . . . . . . . . . . . 2.4 Fisheries Supply Chain: Country Experiences . . . . . . . . . . . . . . . . . 2.4.1 Small Fishermen in the Supply Chain . . . . . . . . . . . . . . . . . . 2.5 Fisheries Supply Chain in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 Research Gaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 7 8 9 9 10 11 12 13 14 15

3

Fisheries Supply Chain: International Experiences . . . . . . . . . . . . . . . 3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Fisheries Supply Chain in Asia: A Case of Bangladesh . . . . . . . . . . 3.2.1 Supply Chain of Hilsa in Bangladesh . . . . . . . . . . . . . . . . . . 3.3 Fisheries Supply Chain in Latin America: A Case of Peru . . . . . . . 3.3.1 Supply Chain of Mahi Mahi in Peru . . . . . . . . . . . . . . . . . . . 3.4 Fisheries Supply Chain in Africa: A Case of Egypt . . . . . . . . . . . . . 3.4.1 Supply Chain of Tilapia in Egypt . . . . . . . . . . . . . . . . . . . . . . 3.5 Fisheries Supply Chain in SIDS: A Case of the Maldives . . . . . . . . 3.5.1 Supply Chain of Tuna in the Maldives . . . . . . . . . . . . . . . . . 3.6 Fisheries Supply Chain in a Landlocked Country: A Case of Nepal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6.1 Supply Chain of Aquaculture in Nepal . . . . . . . . . . . . . . . . . 3.7 Key Insights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19 19 19 20 22 24 27 28 32 32 37 37 40 vii

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References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42

4

Fisheries Sector in India—An Overview . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Fish Production in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Export Performance of the Indian Fisheries Sector . . . . . . . . . . . . . 4.3.1 Direction of Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 Barriers to Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4.1 Tariff Barriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4.2 Non-tariff Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 Import Performance of Indian Fisheries Sector . . . . . . . . . . . . . . . . . 4.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

47 47 48 52 54 54 55 55 57 58 58

5

Study Area and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Methodology (Production to Wholesale) . . . . . . . . . . . . . . . . . . . . . . 5.2.1 Tools and Techniques Used . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.2 Study Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Methodology to Identify Retail Chains . . . . . . . . . . . . . . . . . . . . . . . 5.3.1 Study Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3.2 Tools and Techniques Used to Capture the Retail Supply Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Methodology for Fresh Water Fish Segment . . . . . . . . . . . . . . . . . . . 5.4.1 Locale of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61 61 61 61 62 63 63

Supply Chain from Fishermen to Wholesaler . . . . . . . . . . . . . . . . . . . . 6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Supply Chain Players of Marine Fish . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.1 Producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.2 Boat Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.3 Financial Power in the Supply Chain . . . . . . . . . . . . . . . . . . . 6.2.4 Merchants/Company Agents/Wholesalers . . . . . . . . . . . . . . 6.2.5 The Evolving Market Structure . . . . . . . . . . . . . . . . . . . . . . . 6.3 Peripheral Activities and the Agents Involved . . . . . . . . . . . . . . . . . 6.3.1 Ice Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.2 Loading and Unloading Workers . . . . . . . . . . . . . . . . . . . . . . 6.3.3 Transporters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.4 Net Manufacturers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4 Supply Chain: A Schematic View . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5 Share of Different Agents in the Value Chain . . . . . . . . . . . . . . . . . . 6.6 Moving from Marine to Freshwater Products . . . . . . . . . . . . . . . . . . 6.6.1 Supply Chain for Fish Caught from Large Water Bodies Within the State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67 67 68 68 69 75 76 76 77 77 78 78 78 79 81 81

6

64 65 65 66

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6.7 Supply Chain of Fresh Fish or Aquaculture Products from Outside the State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

8

9

Fishermen in the Supply Chain: Challenges Faced from a Decent Work Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Working Conditions in the Indian Fisheries Sector—An Analysis of NSSO Data . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.1 Overview and Composition of the Data . . . . . . . . . . . . . . . . 7.2.2 A Note on the Use of Codes . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3 Demographic Attributes of the Sample . . . . . . . . . . . . . . . . . . . . . . . 7.4 Indicators of Decent Work in the Fisheries Sector . . . . . . . . . . . . . . 7.4.1 Adequacy of Remuneration and Productivity of Work . . . . 7.4.2 Hours of Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4.3 Gender Disparities in Work . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4.4 Stability and Security of Work . . . . . . . . . . . . . . . . . . . . . . . . 7.4.5 Social Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4.6 Presence of Trade Unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ix

84 85 86 87 87 88 88 89 90 91 91 92 93 94 95 96 96 97

Retail Supply Chains: A Comprehensive Classification Capturing Emerging Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Mapping of Domestic Marketing Channels: Karnataka and Kerala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Wholesale Market Accessed by the Retailers . . . . . . . . . . . . . . . . . . 8.3.1 Multinational Wholesalers: Business-to-Business Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.2 Domestic Wholesalers in Bangalore . . . . . . . . . . . . . . . . . . . 8.4 Mapping the Retail Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4.1 Unorganised Retail Channels . . . . . . . . . . . . . . . . . . . . . . . . . 8.4.2 Organised Retail Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5 Mapping of Marketing Channels: Assam . . . . . . . . . . . . . . . . . . . . . . 8.6 Improving Efficiency of Retail Supply Chains: Major Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7 Efficiency Improving Endeavours: Selected Cases . . . . . . . . . . . . . . 8.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114 115 116 117

Fish Processing Sector: Concerns and Policies . . . . . . . . . . . . . . . . . . . 9.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 Identifying the Supply Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3 Fish Processing Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119 119 119 120

99 99 100 101 102 103 107 107 109 113

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9.4 Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 9.5 Concluding Remarks and Policy Suggestions . . . . . . . . . . . . . . . . . . 124 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 10 Summary and Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

About the Authors

Meenakshi Rajeev is currently the Reserve Bank of India Chair Professor at the Institute for Social and Economic Change. She graduated from IIT Kanpur in Statistics and did her Ph.D. in Mathematical Economics from the Indian Statistical Institute, Kolkata. She was a faculty at the University of California at San Diego, Central Michigan University, USA, Centre for Studies in Social Sciences, Kolkata, and Presidency College, Kolkata. Her areas of research include game theory, banking and credit market, industrial economics, and development economics. She has published more than 100 articles in reputed journals and as working papers from India and abroad. Her recent books Emerging Issues in Economic Development (with Sugata Marjit) and Financial Access of the Urban Poor in India: A Story of Exclusion are worth mentioning. She is co- Managing Editor for Springer published Journal of Social and Economic Development and is on the editorial board of other journals. Supriya Bhandarkar is currently a Ph.D. scholar at the Centre for Economic Studies and Policy, Institute for Social and Economic Change. She graduated from Mount Carmel College with a gold medal in Economics. Her areas of research interest are industrial economics and international trade.

xi

Chapter 1

Introduction

1.1 Motivation One of the effects of globalisation on the management of modern businesses is that they no longer operate as single, vertically integrated individual units providing endto-end solutions, but rather as supply chains (Lambert et al., 1998). It is observed that entrusting different parts of the production, marketing, and distribution processes to specialised entities can improve the efficiency of operations. Consequently, in the last couple of decades, adopting appropriate supply chain strategies has become the key tool in augmenting the operational performance of businesses in advanced countries. An efficient supply chain optimises various business activities, especially logistics, and thereby reduces cost, improves quality, and in doing so enhances customer satisfaction by responding to growing customer demands. In the developing world, while traditional supply chains are largely prevalent, evolving technology, increasing income, and changing consumer tastes have led to the development of modern supply chain management techniques which focus on the needs of the consumer rather than on mere production and distribution. The increasing importance given to the development and functioning of supply chains has led to a resultant increase in the number of definitions by different authors (Janvier-James, 2012). However, essentially, a supply chain represents the entire process of getting a product from the producer to the consumer. Cooper et al. (1997) defined supply chain as ‘… an integrative philosophy to manage the total flow of a distribution channel from supplier to the ultimate user’. Thus, supply chains consist of large networks of people that produce, process, package, store, transport, and finally carry out wholesale and retailing activities. Among the different categories of supply chains, those for fresh food such as fruits and vegetables, meat, fish, and dairy are complex to manage due to the perishable nature of these products (Buck & Minvielle, 2014). Such complexities are more pronounced in the case of products like fish that need to be preserved in a highly regulated environment from the time of its capture. With the development of inland fisheries, most countries across the globe are engaged in the production of fish, © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Rajeev and S. Bhandarkar, Unravelling Supply Chain Networks of Fisheries in India, SpringerBriefs in Economics, https://doi.org/10.1007/978-981-16-7603-1_1

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and thus, the supply chains for fisheries products have assumed importance in all nations. For developing nations like India, due to the presence of both marine and inland fisheries sectors, along with large-scale export of these products, achieving efficiency in supply chain management has become all the more critical. Despite the fisheries sector playing a role in the Indian economy by contributing to the agricultural exports, nutritional security as well as the livelihood of a large section of the underprivileged population (Ayyappan & Krishnan, 2004) for an extensive period, it has only assumed greater importance post-globalisation. The steadily growing demand for fish due to increasing per capita income and because fish is considered a healthy, protein-rich food item has contributed to its steady growth. The question that arises is, whether the supply chain of fish is becoming equally efficient to provide fish and fishery products to the final consumer in a hygienic manner that retains its health benefits? Needless to state, a lack of an efficient supply chain may lead to a large proportion of the produce, which is perishable, deteriorating in transit, or a long supply chain may increase the cost of the product, rendering it inaccessible to the lower-income population who require a nutritious diet. India is also a country that exports fishery items to different parts of the world. Given the health-related standards of the importing nations, it is all the more necessary that the supply chain for fish is well organised. To assess whether supply chains are indeed efficient or not, it is first necessary to map the supply chains of this sector. In this context, it is to be noted that supply chains may differ across regions within the country, depending on the distance from production to consumption centres, and they may also transform and evolve. For example, with the advent of new technologies such as e-retailing, the supply chain of traditional sectors like fisheries is likely to change. In fact, despite retailing channels of fish having undergone significant changes since the liberalisation of the economy, there are not many studies that comprehensively capture the changing nature of the retail chains in this sector. From traditional headloaders and pavement shops, fish today is sold in supermarkets and organised stand-alone outlets. Even multinationals like Metro Cash and Carry have entered the business. This book attempts to comprehensively capture such new developments in the sector through field-based research. In this context, it is observed that though marine and inland fisheries have similar supply chains, there are also certain differences. These differences are captured in this study by sharing our findings from marine and inland fish locations such as Kerala and Assam, respectively. While there has been some work done on the fisheries supply chain in certain coastal states of India like Orissa and Andhra Pradesh (See Kotni, 2016; Rajasenan & Rajeev, 2012), most of these papers are highly localised and touch upon only certain aspects of the supply chain. In other words, there are not many comprehensive studies on the sector starting from fishermen to the fork. Most studies are also often silent about how traditional supply chains, especially, the retailing channels are undergoing changes and adapting to the emerging trends in the sector. The contributions of the current study are to fill these research gaps by taking a more comprehensive look at the supply chain management of the fisheries sector in India. We observe that while

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there are a few papers on the export of fish products and the tariff and non-tariff barriers faced in the international market (Renjini, 2016; Salim, 2012), the supply of products to the domestic market has not got enough attention. It is, therefore, necessary to capture these changes in-depth through a field survey-based study as there is no comprehensive secondary level data or information. The current research identifies various players, especially traders who take part in the product flow, irrespective of the impact each of them has on the value provided to the end customer. While members of the supply chain include all individuals or organisations between whom interaction takes place, directly or indirectly from the point of production to consumption, we distinguish between primary and peripheral members to make a complex network more manageable. We also specifically look at the conditions of the fishermen using a decent-work framework.1 Supply chains for both marine and freshwater fish are presented in two separate chapters. First, we map the production details (catching or harvesting of fish) up until sale to the wholesaler in Chap. 6. This section is based on our survey in Kerala and Assam. The state of Kerala is the most prominent marine fish-producing state in India. Mapping out the supply chain of freshwater fish on the other hand is based on the fieldwork in the state of Assam, which has large rivers such as the Brahmaputra and is also a prominent ‘fresh fish’-consuming state. Next, we move to the retailing of fish products and identify various retail channels existing for the domestic marketing of fish in Chap. 8. This part is based on visits to various types of retail outlets operating in selected metropolitan regions of India. From our research on the supply chain of marine fish in Kerala, we observe that an agent who is the financier, who eventually operates as a price maker, is the most prominent entity in the supply chain. This person finances the working capital for the fishing trips and often, even a part of the fixed capital (fishing boats). He has the first right on the fish after harvest and auctions the fish for price discovery and sale. In the case of the retailing business, we observe different types of chains, both traditional (such as headloaders) and modern (such as e-retailing) prevailing simultaneously in the selected metropolitan regions of our study area. This research discusses these interesting features and derives certain policy implications.

1.2 Data and Methodology The analysis presented in different chapters makes use of both primary and secondary data sources. Secondary data at the national level has been obtained from four main data sources—(a) annual reports of the Department of Animal Husbandry, Dairying and Fisheries, (b) annual reports of Marine Products Export Development Authority (MPEDA), (c) DGCIS Website, and (d) WITS COMTRADE database. Secondary data was collated to understand the current status of the fisheries sector in India in

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terms of marine and inland fisheries resources and trade indicators such as exports and imports to various countries. To identify the first part of the supply chain (from production to wholesale trade) and the associated traders, we carried out an intensive survey in Kochi, Kerala. Kochi has the largest number of landing centres and also has a major port. We have visited various fishermen villages and surveyed about 60 fishermen in addition to interviewing boat owners, traders, and other peripheral workers. Details of the survey methodology are discussed in Chap. 5. To identify different supply chains that prevail in the retailing of fish, primary surveys were conducted in selected urban locations in both metros and smaller cities. Usually, the villages are expected to have a traditional way of selling fish while the emerging trends, if any, are presumably visible in urban regions. In particular, different cities in three states of India were chosen—Bangalore city in Karnataka, Kollam, and Thiruvananthapuram in Kerala, and Guwahati in Assam. Bangalore was considered due to the rising demand and increasing awareness of the health benefits of fish, leading to the consumption of 40–50 tonnes of fish per day (Tara et al., 2011). Bangalore also has different types of retail chains coexisting, covering all aspects of the emerging formal domestic marketing chains. A study of such a location can give us an idea regarding how the supply chain will emerge in the future in India. Two important cities of Kollam and Thiruvananthapuram in Kerala were considered since Kerala is a major producer of fish and produces 11.22% of the total marine fish output in 2017–18 (Department of Fisheries [DoF], 2018) and is the industrial hub for processing and exports of seafood. Mapping of the supply chain in these areas gives a clear understanding of the differences in the supply chain and its intermediaries in a landlocked city versus a coastal one. In Assam, a primary survey was conducted to understand the supply chain of freshwater fish. Guwahati was considered due to its status of being the capital by the side of the largest river Brahmaputra and for being the largest consumer of freshwater fish in the region.

1.3 Structure of the Book The study unfolds in ten chapters. After the introductory chapter, we present a review of the literature. This review highlights studies from different countries across the globe showing the importance of managing an efficient supply chain for fish and fishery products. From the reviewed studies, we observe that managing small-scale fisheries and providing an appropriate share of the pie to the small artisanal fishermen are issues of interest for several nations. Similarly, many countries face problems of infrastructure and transportation leading to the deterioration of produce in transit. To better understand these difficulties faced, along with the differences and similarities in the supply chains of different countries, Chap. 3 presents a global scenario that maps out the fish supply chains and related issues of selected countries. For instance, by mapping out the supply chain of hilsa in Bangladesh, we can see that

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the intermediaries in their supply chain show many similarities with that of India. The presence of an initial investor also known as ‘mohajan’ or ‘aratdar’, who often acts as an auctioneer, is in tune with the structure of the supply chain in India. We can also observe that logistic and infrastructure deficiencies in the supply chain in Bangladesh lead to poor storage and transportation practices, a phenomenon seen in India as well. Similarly, the short supply chain of Egypt with very few intermediaries in contrast to the long marketing chain in the landlocked country of Nepal, the informality and lack of regulation in the mahi fish chain of Peru, and the emphasis on sustainability in the small island nation of Maldives are all highlighted in this chapter. Given our particular interest in the Indian fisheries sector, Chap. 4 provides a background for the study, presenting an overview of the marine and inland fisheries resources in the country. The country’s vast resources in the form of a long coastline with abundant fish reserves have contributed to increasing exports from the country. The export basket of fish and fish products was equivalent to 7.08 billion USD in 2017–18, constituting 60 varieties of fish and fish products to more than 100 countries across the globe (Marine Products Export Development Authority [MPEDA], 2018). These developments, however, have taken place with the existence of a plethora of trade barriers. While tariff barriers are low and falling, non-tariff barriers are gaining prominence. Chapter 4, therefore, also highlights the trade prospects of India in the international market along with the impact of these trade barriers. The increasing exports from the country have necessitated the timely distribution of the perishable produce since fish now flows from local producers to not only national but international markets. Due to this, the role of supply chains, interlinkages among its players, and the degree of its functionality and efficiency have gained prominence. It is therefore important to map out each stage of the supply chain which is done by using information and data collected from the field visits. Chapter 5 discusses the survey methodology used and study areas included to understand the supply chain from fish to fork. Chapter 6 traces the supply chain in detail, starting from fishermen up to the wholesaler. It puts forth the results of the surveys conducted in Karnataka, Kerala (for marine fish), and Assam (for freshwater fish). The role of various peripheral workers such as loading–unloading agents, and ice suppliers is also delineated to obtain a comprehensive picture. The chapter highlights the various problems encountered in the supply chain, viz., problems of overfishing, exploitation of fishermen, lack of women participation, etc. The role of the financier who assumes a critical position due to lack of formal financing options has also been touched upon. Since the fisheries sector in the country is highly labour intensive, we also assess the employment and conditions of labour within the sector using indicators developed by the International Labour Organization (ILO) in the context of decent work in Chap. 7. By utilising data collected from NSSO, the chapter highlights the certain areas in which decency of work is lacking-remuneration, job security and stability, and gender equality within the sector. Chapter 8 maps out the major domestic retail channels, both, organised and unorganised in the fisheries sector, and analyses the transformations that have taken place

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in recent years. It highlights how the previously unorganised retail sector dominated by headloaders and pavement shops is competing with modern channels of retailing such as online shops and supermarkets. In addition to domestic marketing, a significant portion of fish and fish products is exported from the country. Fisheries exports are primarily carried out by fish processing units in the country involving a long supply chain. Therefore, to present a complete picture, Chap. 9 identifies the supply chain of fish and its problems in export markets and suggests certain remedial measures. Chapter 10 presents a summary of the findings and highlights major concerns from which policy implications are derived.

References Ayyappan, S., & Krishnan, M. (2004). Fisheries sector in India: Dimensions of development. Indian Journal of Agricultural Economics, 59(3), 392–412. Buck, R., & Minvielle, A. (2014, March 1). Fresh take on food retailing. McKinsey & Company. www.mckinsey.com/business-functions/marketing-and-sales/our-insights/fresh-takeon-food-retailing Cooper, M. C., Lambert, D. M., & Pagh, J. D. (1997). Supply chain management: More than a new name for logistics. The International Journal of Logistics Management, 8(1), 1–14. Department of Fisheries. (2018). Handbook of Fisheries Statistics 2018. Ministry of Fisheries, Animal Husbandry and Dairying, Government of India. http://dof.gov.in/sites/default/files/202008/HandbookonFS2018.pdf Janvier-James, A. M. (2012). A new introduction to supply chains and supply chain management: Definitions and theories perspective. International Business Research, 5(1), 194–207. Kotni, D. P. (2016). Value chain management in marine fisheries: A case study of Andhra Pradesh. International Journal of Managing Value and Supply Chains (IJMVSC), 7(2), 6–19. Lambert, D. M., Cooper, M. C., & Pagh, J. D. (1998). Supply chain management: Implementation issues and research opportunities. The International Journal of Logistics Management, 9(2), 1–20. Marine Products Export Development Authority. (2018). Annual report 2017–18. Ministry of Commerce and Industry, Government of India. https://mpeda.gov.in/wp-content/uploads/2020/ 11/1550120514MPEDAAR201718.pdf Rajasenan, D., & Rajeev, B. (2012). Fishery commodity chain trap vis-à-vis global quality standards: An analysis of the Kerala marine fishery. Developing Country Studies, 2(5), 78–86. Renjini, K. K. (2016). Quantifying the effect of non-tariff measures and food safety standards on India’s fish and fishery products’ exports (ISEC Working Paper No. 375). Institute for Social and Economic Change. Salim, S. S. (2012). Trade barriers: Implications for Indian fisheries sector. In S. S. Shyam & R. Narayanakumar (Eds.), World trade agreement and Indian fisheries paradigms: A policy outlook (pp. 257–276). Central Marine Fisheries Research Institute. Tara, N., Kamat, S. S., Kumar, R., Pandharinath, D. P., & Srivatsan, B. (2011). Quality and hygienic fish marketing in Karnataka. tejas@iimb. https://tejas.iimb.ac.in/articles/81.php

Chapter 2

A Brief Review of Literature

2.1 Introduction Fishing is one of the oldest occupations of humankind, with certain historians stating that man learned fishing even before he began tilling the land. The importance of fishing has increased over the years, as a result of the growing population and simultaneous decrease of land resources for farming. From a health point of view, fish constitutes a healthy, protein-rich diet and it is also a delicious source of vitamins A, B, and D. It provides livelihood to a large section of fishermen population and ancillary businesses like boat and net making, salt manufactures, etc. Besides, it helps farmers to supplement their income through inland fish culture. At the higher end, fish processing, marketing, and export activities provide employment and livelihood opportunities to many. Given these positives, undoubtedly, there is a large body of literature that has been engaged in studying the importance of the sector across the globe. The benefits that the sector provides to different sections of the population engaged in various activities critically depend on how the entire supply chain is arranged. An efficiently organised supply chain can minimise costs and ensure better returns. However, these supply chains often display exploitative traits where small fish farmers and fishermen get a raw deal. There is also overexploitation of fisheries resources. These are some of the critical issues discussed in the literature on different countries. As the literature is vast, an exhaustive review is beyond the scope of the current research. In this chapter, we discuss a few important aspects concerning supply chain management, including the importance placed on this sector. We begin with the international review, and the Indian literature is discussed in the last section.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Rajeev and S. Bhandarkar, Unravelling Supply Chain Networks of Fisheries in India, SpringerBriefs in Economics, https://doi.org/10.1007/978-981-16-7603-1_2

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2.2 Importance of the Fisheries Sector Traditionally, the fisheries sector has been playing an important role in the generation of livelihood in all coastal regions. Thus, nations with large coastal belts have welldeveloped marine fishery sectors. Among the developed nations, Norway, with a coastline of 83,000 km (FAO, 2013), is a leading producer of marine and aquaculture products. As per FAO reports, in terms of value, Norway is the world’s second largest exporter of fish and fish products, mainly exporting to the European Union (EU), the Russian Federation, Japan, China, Ukraine, and the USA. Another nation where marine fishery plays an important role is Japan. Being an island nation, having a long coastline of 29,751 km with a combination of warm and cold currents that flow along the coasts’ (FAO, 2009), the marine fisheries sector is a vital source of food for the Japanese. In the case of developing countries, Indonesia has a long coastline and the fisheries sector contributed 16.8 billion USD to the economy in 2017 (BKPM, 2018). Indonesia is the world’s largest archipelagic country comprising 17,504 islands. The country has a long 99,093 km coastline as the country lies strategically between two oceans, viz., the Pacific Ocean and the Indian Ocean (Ariansyach, 2017). In addition to the countries with a long coastline, due to the development of inland fisheries, almost all nations across the globe today have developed a fisheries sector. Even landlocked countries like Nepal have a thriving fisheries sector, and for each such nation, there is literature highlighting the role of the sector towards economic development. In the past ten years, Nepal has seen substantial development of aquaculture. As per an FAO report, production of aquaculture products has increased from 17,100 tonnes in 2002 to 49,040 tonnes in 2016, valued at about USD 129.4 million (FAO, 2018). The products cultured in Nepal include silver carp, mrigal carp, common carp, bighead carp, grass carp, catla, trout, and tilapia. The Nepal Agriculture Perspective Plan (APP) has emphasised the importance of the sector for the country and mentioned it as a ‘promising sub-sector of agriculture (FAO, 2018). Various global organisations such as the FAO (fao.org), SEFDEC (https://www.sea fdec.org.ph/) and others provide a comprehensive review of the importance of the fisheries sector in different nations. As far as India is concerned, along the large coastline of 8129 km that the country possesses, around 18,000 species of fish are found, from about 30,000 species of fish that exist in the world. Furthermore, fish is an important component of the dayto-day staple food of people living in the coastal regions of Kerala, Tamil Nadu, Karnataka, Goa, Maharashtra, Gujarat, West Bengal, and Andhra Pradesh (Singh, 2005). Both the marine and inland fisheries sectors make a valuable contribution to the economic development of coastal regions. The relative scattering of coastal smallscale fisheries adds to the maintenance and development of economically viable rural communities and balances the untoward trend of growing coastal urbanisation (NPTEL, 2004). Additionally, the marine and inland fisheries sector in India is also responsible for considerable indirect multiplier effects on economic development, through both intra-sector and inter-sector interactions, including the supply of wood for boat-building, etc. Besides, the infrastructure developed for the fisheries

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sector like feeder roads, landing sites, wholesale and retail markets, tend to create spillover effects in other sectors such as transport and construction which promote the generation of employment opportunities (NPTEL, 2004).

2.3 Fisheries Supply Chain Management 2.3.1 Concepts of Supply Chain and Value Chain While the exact origins of the term are not known, it is widely believed that the term ‘supply chain’ was first coined in the 1980s to describe all the activities that a firm performed to procure and manage the supplies it required (Oliver & Webber, 1982). The most common difficulty that researchers face while studying the supply chain is the existence of numerous definitions that exist, each based on a different perspective. Generically, a supply chain is defined as ‘a network of retailers, distributors, transporters, storage facilities and suppliers that participate in the production, delivery, and sale of a product to the consumer’ (Harland, 1996). Ganeshan and Harrison (1995) describe supply chain as ‘a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers’. Stevenson and Spring (2007) define the supply chain as a ‘network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer’. In other words, a supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. Therefore, it not only includes the manufacturer and suppliers but also transporters, warehouses, retailers, and customers themselves (Chopra & Meindl, 2006). Value chain on the other hand is defined as ‘a set of activities that a focal firm operating in a specific industry performs to deliver a valuable product or service for the market’ (Porter, 1985). Brown (1997) defined a value chain as a ‘tool to disaggregate a business into strategically relevant activities. This enables identification of the source of competitive advantage by performing these activities more cheaply or better than its competitors’. Despite a large number of people using the concepts of ‘value chain’ and ‘supply chain’ interchangeably, there is a significant difference between the two. The concept of a value chain is much broader in scope. While a supply chain only focuses on the transfer of a commodity from one player of the chain to another, the value chain focuses on the value addition at different stages of transfer when different stakeholders add value to the product to increase the end product value. The goal is to deliver maximum value to the end-user for the least possible total cost. Due to this distinction, a supply chain is considered a subset of the value chain (Reddy, 2013).

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2.3.2 Fisheries Supply Chain: Key Characteristics The supply chain for most fish products is analysed from the ocean, up to the retail markets in different parts of the country. The fish supply chain, therefore, can be defined as ‘a set of interdependent agents (fishers, processors, distributors and retailers/fishmongers) that work together, consciously or unconsciously, to convey fish-derived products to the eventual consumer’ (Thorpe & Bennett, 2004). Fish supply chains have become increasingly complex due to the growth of international trade in fisheries and the amalgamation of world markets (Thorpe & Bennett, 2004). In practice, there are differences in supply chains among different countries depending on the socio-economic and environmental conditions of that particular region—such as the involvement of women in different stages and the production patterns. Differences also exist with regard to fish species as well as means of harvesting (industrial production, artisanal production, aquaculture, or capture). The length of the supply chains also differs across countries based on the origin and destination of the produce. The shorter the distance from the landing centre to the final consumer, the smaller and more transparent the supply chain. However, the processing of fish can extend the fish supply chain even when the destination of the product is near (UNEP, 2009). Fish supply chains can also vary depending on ownership of production and partnership among players. Many supply chains are vertically integrated with one company controlling all the operations—from production to distribution. On the other end are horizontally integrated supply chains where each task is performed by a different individual or group, all working in tandem to generate profit (Future of Fish, 2015). Despite this diversity, most studies indicate certain similarities in the pattern of supply chains across countries. For instance, all fish supply chains are characterised by the unpredictability of the catch and the perishability of the product. Unlike aquaculture, where the production of fish can be controlled, capture fisheries are completely dependent on environmental factors. Furthermore, due to the high degree of perishability of the catch, the producers are forced to sell the fish immediately, with very few large-scale fishermen able to store the produce. Due to this, the fishermen often lack bargaining power. The primary producer of fish in the supply chain for marine fisheries is the fishermen, while in the case of freshwater fisheries it is the fish farmer. Between the primary producer and consumer, there can be a large number of intermediaries including auctioneers, company agents, processors, etc. There are also merchants who buy the produce intending to sell to wholesalers, retailers, or restaurants who finally sell to consumers. While this is representative of the domestic supply chain of fish, when the fish products are exported, a longer supply chain with characteristics such as lack of product traceability emerges. Traceability is defined as ‘the ability to follow the movement of a food through specified stage(s) of production, processing and distribution’ (Joint FAO/WHO Codex Alimentarius Commission, 2007). While advancements have been made in ensuring traceability of fresh fish, it is primarily done by large corporate houses or developed countries, with

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developing countries still hesitant to participate in the tracking process (Ponte, 2006). For instance, the European Union (EU) adopted regulations requiring labelling of all fish and aquaculture products to strengthen traceability. All fish products on sale at retailers are required to be labelled with the commercial name of the species, the production method, and the area where the fish was caught (Benjamin et al., 2001). The combination of the above-mentioned factors-lack of predictability, low bargaining power, perishability, and lack of product traceability are representative of the fish supply chain.

2.4 Fisheries Supply Chain: Country Experiences There is a large body of literature that talks about the supply chain of fish products in different countries. Reviewing the supply chain studies conducted in European countries, Gagalyuk et al. (2010) interviewed 90 fish retailers in Germany to understand what a successful supply chain looks like, how to measure this success, and what implications they have for effective fisheries supply chain management. He found that the goals and actions of supply chain members must be aligned to ensure the success of the fish supply chain. This was done through efficient communication among members of the chain. Furthermore, any problems within the chain were solved collectively with the help of the focal actor. To analyse the Italian consumers’ attitude towards small pelagic fish and their expectations in terms of quality, safety, and health impacts of the pelagic fisheries products the paper by Gaviglio et al. (2012) considered the small pelagic fish supply chain and studied how information management along the supply chain was crucial in creating value and remaining competitive. Several papers in this area consider the price transmission mechanism and therefore look at the value chain. For example, talking about the value chain for Spanish red seabream, the paper by Jiménez-Toribio and García-del-Hoyo (2006) examines how price transmission mechanism takes place for this sector. In particular, it looks at how prices at the first sell change over the supply chain when the product moves from wholesalers to retailers and what share of the pie goes to the actual fishermen. Discussing the fisheries sector in Latin America, particularly for Mexico, the report by Dubay et al. (2010) talks about shrimp production and its export market. The paper also discusses the environmental sustainability issues concerning shrimp production and harvest for Mexico in the country. They argue that fishery management should be done sustainably, reducing illegal catches and thereby reducing overexploitation of the resources to keep a check on the environmental degradation of the ocean habitat. The paper makes several important suggestions for the sustainable development of the marine fisheries sector such as developing environmentally friendly shrimp products, exploring more domestic marketing opportunities, and supporting government sustainability efforts. Concentrating on Asian studies, eight value chain case studies were presented by Rosales et al. (2017) for different locations around the Philippines. They take up the

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case for small fishermen and look at various aspects such as seasonal closure, postharvest facilities, and size limits of harvest. The paper by Islam and Habib (2013) takes up the fish distribution system of Bangladesh to understand inefficiencies in the value chain and how to improve the share of all stakeholders. Three segments, viz., wild fisheries, aquaculture, and processing, are studied for the Korean fisheries sector by taking into account both forward and backward linkages. Path analysis is used to study how a shock is transmitted (Seung & Kim, 2020). Concentrating on Africa, a study by Beran (2018) takes up the case of postharvest losses in the supply chain, in two West African countries, viz., Gambia, and Ghana, using a case study method collecting both qualitative and quantitative data. The study examines how post-harvest innovations have helped counter losses and also measures factors that influenced the adoption of these innovative technologies for fish processing such as smoked fish. The study showed that in the Gambian fishing industry, a simple innovation of icing at sea helped reduce post-harvest loss and increase revenue. In Ghana, a more complex innovation- adoption of a fuelefficient fish smoking stove helped improve quality and minimize losses. In addition to the hands-on training and financing options provided, factors that influenced the adoption of the stove were its distinct technological features such as less consumption of fuelwood, hence, cost of fuelwood and reduction of smoke. There are several papers in this area that talk about how the small fishermen are receiving a raw deal due to the price transmission that occurs in the value chain.

2.4.1 Small Fishermen in the Supply Chain Globally, the fisheries sector has been evolving at a breakneck pace and the smallscale fisheries sector has become a shifting target that is difficult to govern. There is a body of literature that has developed to discuss the small-scale fisheries sector and small fishermen’s concerns (Smith et al., 2010). These studies focus on various regions across the globe. For example, a study by Jacinto (2004) talks about smallscale fisheries in the Philippines which are common pull resources and have open access. But these resources are still not able to generate a good, sustainable livelihood for the small fisher community in the country. Looking at the price transmission and price volatility issue in the Spanish fresh fish market chain, the paper by Guillen and Franquesa i Artes (2015) discusses the problem of how small fishermen are getting low prices, despite consumers paying high prices since most of the benefits accrue to the traders. Fishermen also claim that they have to bear increasing fishing costs such as fuel, but are unable to pass this on to the consumer. This also leads to increasing price differences between the retail price and the price the fishermen receive (Cheilari et al., 2013). Additionally, most fishermen and small-scale operators do not get formal loans and have to depend on the middlemen for credit, who exploit them further. This is not only true of India but also of other developing nations. Dey et al. (2001) found that in the Philippines, a majority of the formal credit that should have been provided by financial intermediaries, is given by middlemen in the form

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of short-term capital to small-scale processors and fishermen. Therefore, it becomes increasingly necessary to study the structure and efficiency of supply chains, since this imperfect price transmission may be a sign of the existence of market power (Meyer & von Cramon Taubadel, 2004). The role of small-scale fisheries towards food security, sustainable livelihood, and poverty alleviation is discussed for the Mediterranean coastal communities as well (Satria & Li, 2017). The role of the supply chain taken up in this context is based on a survey to highlight the contractual arrangement between artisanal fishers, processors, and intermediaries. Based on an ILO project, Bjørndal et al. (2015) look at the price transmission in fishery and aquaculture for 14 developed and developing countries using the case study method. The study finds that small-scale fishers and fish farmers are deprived of the benefits of the trade while processors and retailers are gaining a bigger share of the pie. The study, therefore, calls for the attention of the policymakers to safeguard the interests of small-scale fishers and fish farmers. Thus, it has been felt that in the face of increasing pressure on fisheries worldwide, that there is a need to renew the efforts at analysing the governance of small-scale fisheries according to the specificities and vulnerabilities of the sector and its potential to generate economic growth (Smith et al., 2010). Reforms considered must therefore contribute to the creation of a much more sustainable sector that seeks to promote, protect, and sustain the broader benefits accruing from small-scale fisheries to the poorer fishing communities (Pomeroy & Andrew, 2011). To do so, we need to analyse the points of intervention in the entirety of the fish and fish production supply chain that may enable us to channelise the accruing socio-economic benefits.

2.5 Fisheries Supply Chain in India India is a country with a long coastline and a large number of freshwater bodies. Hence, both marine and as freshwater fisheries are important sources of food for different communities. Fisheries products are also processed and exported to different countries across the globe, and in the export market, aquaculture has started to play an important role as well (Rajeev & Nagendra, 2020). There are a few papers that look at the fisheries supply chain for different locations in India based on localised surveys. For example, concentrating on the Chaur areas of Bihar where culture and capture fisheries are practiced, Kumar et al. (2016) identify the marketing channels prevailing in this region. Three marketing practices are identified—one involving the marketing chain from producers to consumers where price spread is the lowest, the other two channels have a greater number of intermediaries due to which producers’ share diminishes. The paper argues that organising producers’ cooperatives is a way to provide better wages to them. Similarly, the marine fisheries value chain in Andhra Pradesh was studied by Kotni (2016) and the paper found that engaging in intermediary marketing and value-adding activities ensured greater returns to both fishermen and middlemen, compared to non-value-added selling. Marine fisheries supply chain

14

2 A Brief Review of Literature

and export of marine fisheries have been discussed in a few papers from the Central Marine Fisheries Research Institute (CMFRI) as well. Shyam and Antony (2015) provide an overview of both domestic and international trade of fish from India and highlight the problems facing exporters such as irregular supply and cut-throat competition for raw material, heavy competition for target market, low-capacity utilisation, higher cost of production, and low margin of profit. They suggest the integration of the domestic and international market to ensure the sustainability of fisheries trade. The efficiency of domestic marine fish marketing has also been studied by Sathiadhas et al. (2011) who analysed the growth trends of fish prices. While many of these papers are on the marine sector, Srivastava (1984) studied the inland fisheries sector and the marketing of inland fish in India. His study provided a state-level analysis based on secondary data as well as survey-based findings. The problems faced by small fishermen as discussed for other countries have been taken up for India as well (Rajeev & Nagendran, 2018, 2020). As the fisheries products are highly perishable, the fishermen, especially in developing countries like India, have to sell the catch immediately at the landing centres at the price offered (Rajeev & Bhandarkar, 2019) at a very low margin. Rarely do they have the option of holding out for better prices. The resulting effect is the lack of government subsidies to buy inputs such as ice, boxes, and nets which lead to an increase in the costs of fishing (Rajeev & Bhandarkar, 2019). To give better prices to the fishermen, the state of Kerala has put forth the idea of paying a minimum support price for the sector. Taking up the issue of minimum support price for the fisheries sector introduced by the Kerala government in 2018, the paper by Parappurathu and Ramachandran (2018) looks at the viability of such a policy in Kerala where marine fisheries are the major source of fish production. Furthermore, in a country like India, the fish supply chain does not comply with quality and labelling requirements and faces problems relating to supply variation and product perishability due to a lack of cold storage facilities. Such problems are further compounded due to the presence of inefficient supply chains. A study conducted by YES Bank (2015) identifies the problems faced by retailers and wholesalers in the value chain. Wholesalers faced problems of dismal infrastructure, and cold storage facilities in addition to lack of access to quality drinking water and parking facilities in wholesale markets. Retailers faced similar problems of lack of cold storage facilities and fish dressing platforms in retail markets. Bhatta (2001) observed that 10% of the total market arrivals were wasted as a result of quality deterioration due to a lack of cold storage. At the consumers’ level, the constraints encountered were an irregular supply of fish which was of poor quality and unhygienic condition along with bad odours in the fish markets (Prasad, 2011).

2.6 Research Gaps As seen in the section above on India, despite there being a number of studies on the fisheries sector, most of the studies are localised in nature, concentrating on specific

2.6 Research Gaps

15

regions or forms of the supply chain. For instance, the study by Srivastava (1984) only provides a holistic picture of inland fish marketing in India while the study by Sathiadhas et al. (2012) provides an overview of marine fish marketing in the country. Our study provides an overview of the fisheries sector, the dominant characteristics of both inland and marine fish supply chains in terms of intermediaries and scale of operations, common challenges faced as well as policies and practices that have led to progress, not frequently found in the existing literature. Using NSSO data, the mapping of the supply chains within the country has also been supplemented with analysis regarding the employment and conditions of work among the fishermen to understand the system within which they operate. We also undertake comparisons with supply chains of diverse international countries along with the myriad challenges they face. These real-life case studies encapsulate different species of fish along with different market and regulatory settings to provide a holistic picture of supply chains across the globe. Additionally, our study also focuses on a large number of modern marketing channels that have evolved in India post-globalisation, which continue to grow at an exponential pace. Therefore, based on extensive fieldwork and secondary research, our study has analysed new and emerging channels such as B2B multinational outlets and e-commerce stores which have not been the focus of other studies. In addition to identifing these emerging channels, the retail evolution in the country has been captured by simultaneously understanding how these modern retail outlets have impacted the functioning of traditional retail formats that were dominant as the main choice of consumers.

References Ariansyach, I. (2017). Fisheries country profile: Indonesia. SEAFDEC. http://www.seafdec.org/fis heries-country-profile-indonesia/ Benjamin, N., Brown, N., & Vogt, A. (2001). Informational seafood labelling. Fishermen’s News, Pacific Coast Federation of Fishermen’s Association. www.pcffa.org/fn-dec01.html Beran, K. (2018). Value chain improvements in small-scale fisheries: Case studies from West Africa (Doctoral Dissertation, Rhode Island University). Open Access Dissertations. https://digitalco mmons.uri.edu/oa_diss/785 Bhatta, R. (2001). Production, accessibility and consumption patterns of aquaculture products in India. In S. Piumsombun (Ed.), Accessibility, marketing and consumption patterns of freshwater aquaculture products in Asia: A cross-country comparison. FAO. Bjørndal, T., Child, A., Lem, A., & Dey, M. M. (2015). Value chain dynamics and the small-scale sector: A summary of findings and policy recommendations for fisheries and aquaculture trade. Aquaculture Economics & Management, 19(1), 148–173. BKPM. (2018). Investing in Indonesia’s fisheries sector: An overview of opportunities, capabilities and provisions. Indonesia Investment Coordinating Board. https://indonesien.um.dk/~/media/ indonesien/tc/sector%20reports%20eu-indo/maritime/2018%20eibn%20updated%20sector% 20proposition%20fisheries.pdf?la=en Brown, L. (1997). Competitive marketing strategy. Nelson. Cheilari, A., Guillen, J., Damalas, D., & Barbas, T. (2013). Effects of the fuel price crisis on the energy efficiency and the economic performance of the European Union fishing fleets. Marine Policy, 40, 18–24.

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Chopra, S., & Meindl, P. (2006). Supply chain management: Strategy, planning and operations (5th ed.). Pearson. Dey, M. M., Paraguas, F. J., & Alam, F. (2001). Cross country synthesis-production, accessibility, marketing and consumption patterns of freshwater aquaculture products in Asia: A cross-country comparison. FAO Fisheries Circular No. 973. Dubay, K., Tokuoka, S., & Gereffi, G. (2010). A value chain analysis of the Sinaloa, Mexico shrimp fishery. Center on Globalization, Governance & Competitiveness, Duke University. https://www.researchgate.net/publication/242742041_A_Value_Chain_Analysis_of_the_ Sinaloa_Mexico_Shrimp_Fishery_Report_Prepared_for_Environmental_Defense_Fund FAO. (2009). Fishery and aquaculture country profiles—Japan. http://www.fao.org/fishery/facp/ JPN/en#CountrySector-ProductionSector FAO. (2013). Fishery and aquaculture country profiles—The Kingdom of Norway. http://www.fao. org/fishery/facp/nor/en#CountrySector-Statistics FAO. (2018). Fishery and aquaculture country profiles—Nepal. http://www.fao.org/fishery/facp/ NPL/en Future of Fish. (2015). Making sense of wild seafood supply chains. A report created for the Nature Conservancy. https://futureoffish.org/sites/default/files/docs/resources/TNC.SeafoodSu pplyChainReport.V10.Web_.pdf Gagalyuk, T., Hanf, J., & Herzlieb, C. (2010). Managing supply chains successfully: An empirical testing of success of supply chain networks in the German fish sector. Acta Agriculturae Scandinavica, Section C—Food Economics, 7, 2–4, 139–150. Ganeshan, R., & Harrison, T. P. (1995). An introduction to supply chain management. Penn State University. Gaviglio, A., Mauracher, C., Demartini, E., Trevisan, G., Cosmina, M., & Prestamburgo, S. (2012). Italian consumers’ attitudes towards small pelagic fish. New Medit: Mediterranean Journal of Economics, Agriculture and Environment, 11(1), 52–57. Guillen, J., & Franquesa i Artés, R. (2015). Price transmission and volatility along the Spanish fresh fish market chain. New Medit, 2015(1), 4–11. Harland, C. M. (1996). Supply chain management: Relationships, chains and networks. British Journal of Management, 7(S1), S63–S80. Islam, S. B., & Habib, M. M. (2013). Supply chain management in fishing industry: A case study. International Journal of Supply Chain Management, 2(2), 40–50. Jacinto, E. R. (2004). A research framework on value chain analysis in small scale fisheries. Lundayan Journal, 5, 41–61. Jiménez-Toribio, R., & García-del-Hoyo, J. J. (2006). Evidence of market price leadership in the Spanish red seabream value chain—implications for fisheries management. Fisheries Research, 81(1), 51–59. Joint FAO/WHO Codex Alimentarius Commission. (2017). Codex Alimentarius Commission Procedural Manual (17th ed.). FAO. Kotni, D. P. (2016). Value chain management in marine fisheries: A case study of Andhra Pradesh. International Journal of Managing Value and Supply Chains (IJMVSC), 7(2), 6–19. Kumar, R., Kumar, N. R., Kishore, P., Kumar, M., Prakash, S., & Kumar, S. (2016). Fish marketing in Chaur areas of Bihar—A study of disposal pattern, price spread and marketing efficiency. Fishery Technology, 53, 320–325. Meyer, J., & von Cramon Taubadel, S. (2004). Asymmetric price transmission: A survey. Journal of Agricultural Economics, 55(3), 581–611. NPTEL. (2004). Fisheries and economic development module. Joint initiative of IITs and IISc, MHRD. Retrieved on December 21, 2020, from https://nptel.ac.in/ Oliver, R. K., & Webber, M. D. (1982). Supply-chain management: Logistics catches up with strategy. In M. Christopher (Ed.), Logistics: The Strategic Issues (pp. 63–75). Chapman & Hall. Parappurathu, S., & Ramachandran, C. (2018). Is MSP a viable proposition in marine Fisheries? Economic & Political Weekly, 53(44), 13.

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Pomeroy, R., & Andrew, N. (2011). Small-scale Fisheries Management: Framework and Approaches for the Developing World. CAB International. Ponte, S. (2006). Eco-labels and fish trade: Marine stewardship council certification and the South African hake fishery (Working paper No. 9). Danish Institute for International Studies, Denmark. https://www.researchgate.net/publication/237305264_Ecolabels_and_Fish_Trade_M arine_Stewardship_Council_MSC_Certification_and_the_South_African_Hake_Industry Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. Free Press. Prasad, D. (2011). Supply chain management of marine fish—A study in Karnataka. Co-operation and Business Management, University of Agricultural Sciences. Rajeev, M., & Bhandarkar, S. (2019). Traders in food value chain: Fisheries sector in India. Social and Economic Change Monographs, No. 62, Institute for Social and Economic Change. Rajeev, M., & Nagendran, P. (2018). Decency of primary occupations in the Indian fishing industry (ICDD Working Paper No. 21). Kassel University Press. Rajeev, M., & Nagendran, P. (2020). Understanding regional variation in fish prices: Evidence from a developing economy. Journal of Agribusiness in Developing and Emerging Economies, 10(4), 475–492. Reddy, A. A. (2013, June 19). Training manual on value chain analysis of dryland agricultural commodities. International Crops Research Institute for the Semi-Arid Tropics (ICRISAT). Retrieved November 7, 2020 from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=228 1677. Rosales, R. M., Pomeroy, R., Calabio, I. J., Batong, M., Cedo, K., Escara, N., Facunla, V., Gulayan, A., Narvadez, M., & Sobrevega, M. A. (2017). Value chain analysis and small-scale fisheries management. Marine Policy, 83, 11-21. Sathiadhas, R., Narayanakumar, R., & Aswathy, N. (2011). Efficiency of domestic marine fish marketing in India-a macro analysis. Indian Journal of Fisheries, 58(4), 125–131. Sathiadhas, R., Narayanakumar, R., & Aswathy, N. (2012). Marine fish marketing in India. Central Marine Fisheries Research Institute, 276 pp. Satria, D., & Li, E. (2017). Contract engagement in the small-scale tuna-fishing economies of East Java. Bulletin of Indonesian Economic Studies, 53(1), 27–54. Seung, C. K., & Kim, D. H. (2020). Examining supply chain for seafood industries using structural path analysis. Sustainability, 12(5), 2061. Shyam, S. S., & Antony, B. (2015). Marine fisheries trade in India: Perspectives and paradigms. In K. K. Joshi, M. S. Varsha, V. L. Sruthy, V. Susan & P. V. Pratyusha (Eds.), Summer school on recent advances in marine biodiversity, conservation and management (pp. 13–20). CMFRI. Singh, V. (2005). Fisheries play an important role in the economy of India: Essay. Preserve Articles. http://www.preservearticles.com/2012032028060/fisheries-play-an-important-role-inthe-economy-of-india-essay.html Smith, M. D., Roheim, C. A., Crowder, L. B., Halpern, B. S., Turnipseed, M., Anderson, J. L., Asche, F., Bourillón, L., Guttormsen, A. G., Khan, A., & Liguori, L. A. (2010). Sustainability and global seafood. Science, 327(5967), 784–786. Srivastava, U. K. (1984). Inland fish marketing in India: An IIM Ahmedabad study. Concept Publishing Company. Stevenson, M., & Spring, M. (2007). Flexibility from a supply chain perspective: Definition and review. International Journal of Operations & Production Management, 27(7), 685–713. Thorpe, A., & Bennett, E. (2004). Market-driven international fish supply chains: The case of Nile perch from Africa’s lake Victoria. International Food and Agribusiness Management Review, 7(4), 40–57. UNEP. (2009). United Nations Environment Programme Annual Report 2009—Seizing the Opportunity. www.unep.org/annualreport YES Bank. (2015). Indian seafood industry: The cold chain perspective. Food & Agribusiness Strategic Advisory & Research (FASAR), YES Bank.

Chapter 3

Fisheries Supply Chain: International Experiences

3.1 Introduction The fisheries sector plays an important role in the generation of income and livelihood for a large number of countries across the globe. It is beyond the scope of this study to present a detailed discussion covering them all. In this chapter, we focus on developing nations to discuss the cases of five countries, one each from Asia, Africa, Latin America along with one from a landlocked country, and a Small Island Developing State (SIDS). We present a picture of how these chains are organised in different countries across the globe and highlight their similarities and differences. In this context, it is to be noted that the supply chain varies depending on the species of fish. If a species belongs to the marine variety, it will have a different supply chain compared to a freshwater one. Similarly, aquaculture products have their own supply chain. For example, in the case of marine fisheries, boat owners and financiers play a key role due to the initial high investment required for the boat. On the other hand, for aquaculture, in many countries, the wholesaler plays the role of the financier. Consequently, literature on the topic of the supply chains is often concerned with a specific variety of produce only. The case studies presented below relate to specific species and countries.

3.2 Fisheries Supply Chain in Asia: A Case of Bangladesh The fisheries sector of Bangladesh plays an important role in the lives of the people with more than 11% of the population depending directly or indirectly on the sector for their livelihood. The sector also contributes 3.57% to total GDP and 25.3% to agricultural GDP (Department of Fisheries Bangladesh, 2018). Hilsa, also locally This chapter is written based on various secondary literature related to the specific countries under consideration. © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Rajeev and S. Bhandarkar, Unravelling Supply Chain Networks of Fisheries in India, SpringerBriefs in Economics, https://doi.org/10.1007/978-981-16-7603-1_3

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known as ‘Ilish’, constitutes the main species of fish in Bangladesh (FAO, 2004 quoted in Oasiqul et al., 2017) constituting 11% of the total share of capture fish production (Sapkota et al., 2015), providing 2.5 million people employment opportunities (Islam et al., 2016). The hilsa fish is anadromous—found both in the marine and inland waters. It is found in the Bay of Bengal, from where it migrates to the river ecosystem for breeding (Mozumder et al., 2020). Due to overfishing, the sudden decline in hilsa catch in 2003 prompted the Bangladesh Government to initiate various conservation methods such as the Payment for Ecosystem Services (PES) through the Hilsa Fisheries Management Action Plan (HFMAP). PES refers to ‘an environmental management approach that offers cash payments or other compensation to encourage the conservation and restoration of ecosystems’ (Islam et al., 2016). This plan prohibited fishing during breeding seasons and provided compensation to fishermen for their loss of income. This sustainable fisheries management has led to the replenishment of the hilsa stock. Despite its success in the environmental dimension, there have been concerns regarding the condition of fishermen in the hilsa supply chain. The movement of the hilsa fish from fishermen to consumers along with the role and condition of each player is highlighted below.

3.2.1 Supply Chain of Hilsa in Bangladesh A large number of intermediaries are involved in the supply chain of hilsa in Bangladesh. According to the studies by Nowsad (2016), Islam et al. (2016), Oasiqul et al. (2017), the produce moves from the primary, wholesale, and finally retail markets all aided by the help of ‘aratdars’ or commission agents, wholesalers, and retailers. However, various other players such as boat owners, informal money lenders, labourers, and transporters also play an important role in the smooth functioning of the chain. (a)

(b)

Informal Financiers—Also known as ‘Dadondars’, these individuals give out loans to boat owners to build their boats and nets in return for exclusive access to their catch. These dadondars also take on the role of aratdars or auctioneers. Porras et al. (2016) in their field survey also observed that another group of financiers called ‘Mohajon’ give out loans required to be paid back with interest in monetary terms rather than through a share of the produce. Hilsa fishing is capital-intensive, and since fishermen do not have access to such capital from the formal sector, they often depend on informal sources of financing. Fishermen—Most fishermen in Bangladesh are predominantly men, with women largely involved in processing or selling of fish. Fishermen are often observed to be poverty-ridden, uneducated, and exploited by other players in the value chain (Porras et al., 2016). The study by Nowsad (2016) also found that most fishermen did not own any land and did not have access to government services due to their remote geographical location and inefficient working of

3.2 Fisheries Supply Chain in Asia: A Case of Bangladesh

(c)

(d)

(e)

(f)

21

the government machinery. This further ensured that they remained impoverished. Small-scale fishermen use small, manual, or motorised boats for catching hilsa, while large-scale hilsa fishermen used medium or large mechanised boats (Islam et al., 2016). These large vessels are captained by the ‘mahjee’ and have crew members who are family or hired labour depending on the size of the fishing boat and net (Mome et al. 2007). Most of the fishermen do not own the boats, and a rental market has consequently developed to address the demand–supply gap where the fishermen rent vessels from boat owners. Due to this, almost 50% of the revenue earned from the sale of the fish goes to the boat owner with the rest being divided among the fishermen, among whom the mahjee gets the largest share (Khan et al., 2020). The fishermen bring the fish to the landing centre and generally sell the fish to the auctioneers with whom they usually have credit interlinkages. Fishermen who bring their produce to landing centres that are far away from wholesale markets use ‘forias’ as their link between them and the auctioneer. Some of these intermediaries are discussed below. Foria—Group of individuals who operate within the supply chain usually in the peak hilsa season. They purchase fish from the fishermen who are far away from the markets and sell it to the auctioneer. They transport the fish in plastic or styrofoam boxes with the fish preserved in ice (Nowsad, 2016). Aratdar—The aratdars or auctioneers are responsible for handling the fish after it is brought to the landing centres and are involved in cleaning, sorting, and selling fish for which they often employ day labourers comprising women (Khan et al., 2020). Also known as the commission agents, they sell the produce in the wholesale markets through an auctioning system. They earn a commission of 3–10% for every sale (Nowsad, 2016). Very often, they also play the role of the financier by extending interest-free loans to the boat owners or fishermen, in return for assurance to use the aratdar’s services while auctioning their fish (Porras et al., 2016). Paiker—They are wholesalers who buy large quantities of fish in the auction from the aratdar and sell it to the retailers. Wholesalers face several problems due to the lack of infrastructure in the wholesale markets. They often reported a lack of washing and cleaning facilities, insufficient packing space, high prices of ice and fuel, etc. (Nowsad, 2010). Some wholesalers are also involved in buying fish from the local aratdar and transporting it to the cities or municipal areas that are further away from the landing centres and selling it to a second aratadar (Porras et al., 2016) who in turn auctions the produce for a second time to the wholesalers in those areas. Retailer—They are the last set of intermediaries in the supply chain before the fish reaches the final consumers. Retailers buy from the paikers and sell either at fixed places in the markets or door to door (Porras et al., 2016). Some retailers also offer additional cleaning and cutting services to the customers for which they hire a ‘cutter’ who helps the retailer clean and cut fish in accordance with the buyer’s demands (Nowsad, 2016).

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(g)

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Consumer—Consumers buy hilsa from the retail markets and mainly consume it fresh. Due to the high price of hilsa that has increased over 20 times in the past 30 years (Department of Agricultural Marketing Bangladesh, 2018), most low- and middle-income families can only purchase it during the peak season. (Khan et al., 2020).

Apart from the local consumption of hilsa, there is also an international market for hilsa where some of the below mentioned intermediaries are operational. (h)

(i)

Bepari—They collect high-quality fish directly from the fishermen at landing centres, usually those above 1 kg, and send it to the processing centres after cleaning the fish and preserving the fish in ice (Porras et al., 2016). Exporters—Use cardboard boxes that are usually imported from South Korea to pack the fish for transit. Boxes are then transported in refrigerated trucks to airports or seaports. Fish is also tested at the Department of Fisheries’ fish quality control lab to ensure compliance with standards and regulations of the importing country (Nowsad, 2016).

Based on the literature on the subject, supply chain of hilsa fish can be represented as follows (see Fig. 3.1). After discussing an Asian case, we next move to a Latin American case by considering Peru where the mahi mahi fish sector plays an important role.

3.3 Fisheries Supply Chain in Latin America: A Case of Peru Peru’s fishing sector plays a key role in the economic development of the country. (Christensen et al., 2014). Within the fisheries sector, small-scale artisanal fisheries contribute immensely to employment generation and food security of the families living in the coastal regions (Alfaro-Shigueto et al., 2010). The share of artisanal fisheries to total marine landings was 19% between 2004–17 (Coayla, 2020). Peruvian artisanal fishing, also called non-industrial fishing, is usually comprised of smallsized vessels that have manually operated fishing gear and target marine resources for direct human consumption (SPDA, 2019 as cited in De la Puente et al., 2020). Mahi mahi is the second largest artisanal fishery in Peru and produces 50% of the world total by volume, employing more than 4000 people across the coastline of the country (COINREFRI S.R.L, n.d.). Mahi mahi, also known as common dolphin fish, is a surface dwelling, highly migratory species of fish commonly found in the tropical waters near Peru and Ecuador. Despite its importance, the mahi mahi fishery sector is poorly regulated. There is a high degree of informality along the supply chain due to which there have been difficulties in improving the catch levels, traceability efforts, and thereby economic development of the various players along the supply chain (Amorós et al., 2017).

3.3 Fisheries Supply Chain in Latin America: A Case of Peru

23

Informal Financiers

Boat Owners

Fishermen

Foria

Aratdar II

Aratdar I

Bepari

Wholesaler

Processing Plant

Retailer

Exporters

International Market

Wholesaler

Retailer Consumer Fig. 3.1 Supply chain of hilsa in Bangladesh. Source Mapped by the authors (based on secondary literature)

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3 Fisheries Supply Chain: International Experiences

3.3.1 Supply Chain of Mahi Mahi in Peru According to Amorós et al. (2017), the supply chain of Peruvian mahi mahi is comprised of four distinct stages (see Fig. 3.2)—(a) Harvesting, (b) Transport and commercialisation, (c) Processing, and (d) Trade (Future of Fish, 2019). The linkage between and the roles of the players at each stage is highlighted below.

3.3.1.1 (a)

(b)

(c)

Harvesting

Boat owners—Boat owners own all the fishing boats which they lease out to fishermen along with other equipment needed for the fishing trips. The relationship between the boat owners and the fishermen is informal, with verbal financial and rental transactions rather than written contracts being the norm (Future of Fish, 2019). The boat owners also deal with middlemen and government agents to ensure the required boat registrations, fishing licenses, certificates of vessel ownership, etc., are up to date. However, due to lack of education, financial constraints, and bureaucratic red tape, the majority of the boat owners do not possess the required documents legally required for fishing. For example, according to CENPAR, 2, 4, and 8 out of 10 boat owners do not have a registration certification, fishing access rights, and a sanitary protocol certificate, respectively (World Bank Group, 2020). Financial Enablers—The study by the World Bank Group (2020) showed that a major feature of the supply chain of mahi mahi is the lack of formal financial access among the small-scale fishermen. Due to this, a group of financial enablers has emerged that provide access to informal credit with flexible payment periods. They do not insist on the possession of legal documents such as fishing rights or even collaterals. Fishermen—Artisanal fishermen use boats rented from boat owners that are less than 15 m in length and have a holding capacity between 10 to 32.6 m3 (De la Puente et al., 2020). They use manual fishing gear, mostly longline. Despite the lack of use of modern technology, these boats can travel up to 200 nautical miles from the coast and go on multi-day trips that can last for 10–20 days in the North and 5–7 days in the South. Trips in the North are for longer periods due to the mahi mahi migrating further from the coast (Future of Fish, 2019). Despite being at sea for a long time, the fishing vessels have not updated their ice storage facilities. Due to the catch remaining in substandard storage conditions over many days, the quality of fish from the North is assumed to be lower. Fishing takes place in the summer and spring months, although the greater demand has led to fishermen venturing out earlier in the winter months. Fishermen are often employed informally for the season with no social benefits and often work in precarious conditions such as poor safety on board in terms of lack of life jackets, accident insurance, etc., and poor conditions of vessels (Future of Fish, 2019). The informality is also reflected in the fact that 7 out of 10 and 9 out

Invoice Providers

PROCESSING

Processer

Transporter

Middlemen

INTERMEDIATE COMMERCIALIZATION

Fishermen

Boat Owners

Transporter

Export

Wholesale Market

Fig. 3.2 Supply chain of mahi mahi in Peru. Source Mapped by the authors (based on secondary literature)

HARVESTING

Financial Enablers

Transporter

TRADE

Domestic Market

3.3 Fisheries Supply Chain in Latin America: A Case of Peru 25

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3 Fisheries Supply Chain: International Experiences

of 10 fishermen do not have a fishing ID or diver’s permit, respectively (World Bank Group, 2020). Apart from elongating the fishing season, the increased demand for mahi mahi has also had an impact on the number and size of vessels used, with the number of vessels in the fleet increasing from 947 in 2005 to more than 2000 in 2012 (Amorós et al., 2017). The produce caught by the fishermen is brought to the landing centres at one of the five shipping ports in the country—Paita, Chimbote, Ilo, Pucusana, and Matarani, with Paita being the main port. The fishermen sell their produce to the middlemen or the processing plants directly.

3.3.1.2 (d)

(e)

(f)

Middlemen—According to the report by Future of Fish (2019), almost 75% of all landed produce is bought by the middlemen who then send 50% of the produce to processing plants for exports, and the other 50% is retained for the domestic market. Some middlemen also offer financial support to the fisherman to carry out maintenance and repairs to their boats in which case the transaction of the produce from that particular boat is negotiated only with him. The report by Future of Fish (2019) also talks about certain corruptive practices that are adopted by these middlemen by labelling the produce caught in the North as originating in the South due to the assumption that the quality and freshness of the fish from the South are considered superior. This distorts the traceability parameters of the produce across the chain (Future of Fish, 2019). Transporters—Act as links between the fishermen or middlemen and processing plants and the processing plants and consumer markets. Given the perishability of fish, the procured product is mostly transported in refrigerated trucks. Invoice Providers—Also known as ‘billers’, they deal with transactions of produce arriving through illegal or informal fishing. They procure such products and sell them to processors and provide the necessary sales receipts required by the government (Amoros, 2017). Thus, the produce caught through illegal routes enters into the formal fishing system.

3.3.1.3 (g)

Transport and Commercialisation

Processing

Processors—There are 123 licensed processing plants in Peru with a total capacity of 8094 tonnes per day (PRODUCE, 2017, cited in Amoros, 2017). Processers buy their produce either from the middlemen or directly from the farmers. However, certain large-scale processors also have their own fleet of ships. Most processors often prefer dealing with middlemen since they are prompt in fulfilling orders and have the required documentation. Once the transporters move the produce to the plant, it is first checked for certain chemical contents such as histamines, since the presence of a high level of histamine

3.3 Fisheries Supply Chain in Latin America: A Case of Peru

27

is one of the major causes for export rejection. It is then cleaned, cut, and exported. Most processors have started factoring in the cost of rejection and also try to re-export the produce rejected by the FDA in the USA to other markets when regulations are less stringent (Future of Fish, 2019). To reduce the rate of rejection, many processors have begun to collect local internal data regarding stock health, location of harvest, etc., to guard against loss due to rejection (Future of Fish, 2019).

3.3.1.4 (h)

(i) (j)

Trade

International Market—Most of the frozen mahi mahi is exported to the USA (81%), followed by Venezuela (9%), Guadalupe (6%), Brazil (5%), and the rest 10% to other countries (Amoros, 2017). Wholesale Market—50% of the catch acquired by the middlemen is then sold to the wholesalers. Domestic Markets—Retailers buy fresh mahi mahi from the wholesalers to be sold to supermarkets and restaurants as well as local consumers for domestic consumption.

Though mahi mahi is an important species of fish, both for the domestic and international markets, its supply chain is still highly unorganised and informal. A substantial share of the fishing that takes place is informal and illegal due to which there is a high degree of corruption within the other links of the chain. There is also a lack of traceability with no product tracking between the site of catch and the final point of sale. Artisanal fishers do not have the technology or know-how to accomplish this. In fact, many middlemen intentionally mislabel produce to ensure sales. Furthermore, the supply chain is long due to many marketing intermediaries. Most fishers limit their role to harvesting because of their lack of transportation equipment and distribution and marketing infrastructure. Therefore, to make the supply chain more efficient, further improvements need to be made in ensuring a supply of formal means of credit and improving transportation and post-harvest infrastructure. After discussing cases from Asia and Latin America, we next move on to present an African case from Egypt.

3.4 Fisheries Supply Chain in Africa: A Case of Egypt The fisheries sector of Egypt plays an important role in providing affordable nutrition and employment to its population, along with contributing to income generation for the economy. This is significant, given the worsening food security and unemployment indicators in the economy (Macfadyen et al., 2011). Within the fisheries sector,

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aquaculture has been surpassing the contribution of capture fisheries since 2003 and is currently the largest in the African subcontinent (Shaalan et al., 2018). Egyptian aquaculture has rapidly grown over the last two decades, contributing to over 80% of the total fish production in 2016, up from 47% in 2000 (Nasr-Allah et al., 2020). Due to its growing importance, we particularly concentrate on the supply chain of aquaculture for Nile tilapia. Nile tilapia is the mainstay of aquaculture in Egypt, contributing to 75% of the country’s total aquaculture production (El-Sayed, 2017). The Nile tilapia is an African freshwater fish, a tropical species that is often found in canals, creeks, and lakes with aquatic vegetation. From the study of Macfayden (2011) and Hebisha and Fathi (2014), we observe that tilapia is sold whole, as is, with no primary or secondary processing in the domestic and international markets. Therefore, the supply chain of tilapia in Egypt is one of the shortest compared to other countries (see Fig. 3.3).

3.4.1 Supply Chain of Tilapia in Egypt The section below highlights the different players present in the supply chain of tilapia in Egypt which mainly consists of fish feeds producers, hatchery owners, fish farmers, traders, retailers, and finally the consumers—each group playing a diverse role within the chain (see Fig. 3.3).

3.4.1.1 (a)

(b)

Input Supply

Hatcheries—There are three different types of hatcheries—public, private, and mullet fry catchers—that provide fingerlings to the fish farmers. Public hatcheries mainly produce fingerlings and supply them to government-owned farms and public water bodies, while private hatcheries produce the all-male tilapia seed to supply the private fish farms. There are around 400–500 private hatcheries; however, only 150 are licensed by the General Authority on Fish Resource Development (GAFRD) (Hebisha & Fathi, 2014). The other significant source of seed is from the official and unofficial catchers of mullet fry from the Mediterranean coast (Nasr-Allah et al., 2014). Official catchers of mullet fry are restricted to fishing for 6 hours per day. Feed Mills—These mills produce fish feed through the process of extrusion, which ensures minimal degradation of nutrients and enhanced digestibility of proteins and starches. They provide a wide variety of different feed formulations suitable for all stages of the growth cycle of the fish (Macfadyen et al., 2011).

Fish Farmers Traders/Wholesaler

Exports

Food Service Sector

Fig. 3.3 Supply chain of tilapia in Egypt. Source Mapped by the authors (based on secondary literature)

Feed Mill

Hatcheries

Retail Markets

Supermarkets

Formalised Retailers

Street Sellers

3.4 Fisheries Supply Chain in Africa: A Case of Egypt 29

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3.4.1.2 (c)

(d)

Fish farmers—Fish farmers in the country undertake the process of harvesting the fish for 8–9 months of the year, influenced by the weather conditions. The lack of tolerance of the fish to cold ensures that the winter months from January to April constraint the growth period of the fish. Due to this, stocking is done in April, while harvesting is done from September to December (Macfayden, 2011). Fish feed comprises a majority of their operating cost. Many studies also observed that the major problem faced by fish farmers is the lack of access to credit. Both public and private sector banks only lend to large-scale fish farmers, due to which small-scale farmers are forced to buy from the producers and traders on credit (El-Sayed, 2017). The absence of an insurance market for aquaculture and lack of collateral such as owned land are the main reasons for formal credit not forthcoming to the sector (Naziri, 2011). This feature is similar to other developing nations such as India. The study by Macfadyen et al. (2011) also observed that most fish farmers sell 99% of the fish they harvest to traders and wholesalers. Transporters—They are employed by the traders/wholesalers to transport the fish from the fish farms to the wholesale markets. Transportation of fish takes place in pickup trucks, in plastic or wooden boxes, often filled with ice. There are no refrigerated or freezer trucks used.

3.4.1.3 (e)

Production

Wholesalers

Traders/Wholesalers—Play a key role in the determination of prices and provision of credit to fish farmers. Wholesalers earn money from fish farmers through commissions from the sale of fish. They usually earn a lower commission rate of 3% when farmers deliver the product to them and higher (5–6%) if (a) they collect fish from the farms and therefore have to pay for transportation and ice, and/or (b) they have provided finance to fish farmers (Macfadyen et al., 2011). They typically sell the fish to retailers and foodservice establishments within one day of purchase (Nasr-Allah et al., 2020).

3.4.1.4

Retailers

Retailers tend to buy tilapia fish of different sizes from the wholesale markets or directly from fish farmers to cater to all segments of the population. For instance, the lower-income families usually tend to buy smaller size tilapias that are of grade 3 (Hebisha & Fathi, 2014). Most fish are sold on the same day it is purchased, with many retailers usually lowering prices at the end of the day rather than storing it for sale on subsequent days. Due to this, despite the infrastructure in retail markets being unsatisfactory, the quality and freshness of the fish are usually good. There are three different kinds of retailers present in the country.

3.4 Fisheries Supply Chain in Africa: A Case of Egypt

(f)

(g)

(h)

Street sellers—These are individuals, mostly women who buy from the traders/wholesalers and set up shop on the roadside. They usually cater to lower-income groups and sell smaller size tilapias that they display on metal trays or plastic crates (Hebisha & Fathi, 2014). They are forced to sell the produce on the same day due to lack of storage and preservation facilities due to which they have very low bargaining power. Formalised retailers—These are small shops that often employ labour to clean/process fish. They use freezers or refrigerators to store produce that does not sell on the same day. Supermarkets—Several supermarkets that sell a wide variety of consumer goods have a small fresh fish counter catering to middle- and higher-income families (Feidi, 2004). Typically, the sale of the fisheries items in these supermarkets is in the range of 10–50 kg (Macfadyen et al., 2012).

3.4.1.5 (i)

31

Consumers

Foodservice Sector

Specialist fish and fish fry restaurants—A survey-based study by Macfadyen (2011) highlighted interesting features of the foodservice sector comprising restaurants catering to the fish-eating population. Specialised fish restaurants usually have a dining area and a fresh fish counter, where customers can inspect the size and quality of the fish and choose the method of cooking. Most of these restaurants sell marine fish; however, some sell farmed fish such as tilapia, and these are priced lower leading to high sales volume. Ownerships of these restaurants generally lie with individual businessmen, although some are part of small branded chains. There are also quick takeaway fish fry shops located near a fish retailer catering to the middle- and lowincome population. Customers usually procure fish from these vendors and provide it to the fish fry counters for preparation. However, many shops have also started stocking fish by buying it from the independent sellers themselves and preparing it for the customers. (j)

Exports—Total exports from Egypt are limited to 7000–8000 tonnes per year, with a majority of it being exported to Gulf countries. Exports are constrained due to strict traceability, health, and hygiene requirements by the EU and other nations that import tilapia which Egypt is not able to comply with (Macfadyen, 2011).

After discussing the aquaculture supply chain in an African country, we move on to mapping out the supply chain in a Small Island Developing State.

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3.5 Fisheries Supply Chain in SIDS: A Case of the Maldives As a Small Island Developing State (SIDS), the Maldives has overcome various challenges of being in a fragile environment with limited resources to develop one of the most sustainable fisheries sectors across the globe (Edwards et al., 2020). Being a country in the Indian Ocean comprising 26 atolls and 1200 islands, historically, the fisheries sector in the Maldives contributed immensely towards employment and trade. However, the booming of tourism in the country has gradually reduced employment in the sector. Despite this, the sector has contributed 4–12% to the GDP in the last 10 years, with tuna especially being the primary item of export (Hemmings et al., 2014) accounting for 67% of total exports. Tuna fishing in the Maldives is distinguished from other fisheries sectors in the Indian Ocean due to its emphasis on sustainability. The Marine Stewardship Council, in 2012, recognised the Maldivian skipjack tuna fishery sector as sustainable. The Maldives was the first country within the Indian Ocean to achieve this status (Miller et al., 2017). The sector only undertakes pole and line fishing which ensures that there is a ‘very low rate of bycatch, discards, catches of (or interaction with) endangered, threatened, or protected species’ (Ahusan et al., 2018). To more thoroughly understand how the Maldivian fisheries sector ensures sustainability, we map the supply chain of tuna in the Maldives (see Fig. 3.4).

3.5.1 Supply Chain of Tuna in the Maldives Tracking the movement of the fish from fishermen to international markets as highlighted in Fig. 3.4, we find multifaceted interactions among the main supply chain players as well as many peripheral agents that contribute to the smooth flow of the tuna produce. The section below highlights the type of players, roles they play, and the coordination between them.

3.5.1.1 (a)

(b)

Pre-Harvesting

Lenders—Unlike the fisheries sector in many other countries, formal means of financing is readily available to the boat owners and fishermen in the Maldives. Lenders in the Maldives, such as the Bank of Maldives and The Maldives Finance Leasing Corporation are important peripheral agents within the supply chain. They provide loans to boat owners to acquire fishing boats or purchase motorised engines (Linton and Fareeha, 2011). Input providers—Most fishing vessels today have modern engines and the provision of preserving fish on board with the help of Refrigerated Sea Water systems (Ministry of Environment and Energy, 2018). This necessitates the presence of input providers such as ice providers, fuel, and gear shops.

POST-HARVESTING

PRE-HARVESTING

MIFCO

Exports

Horizon

Collector Vessels

Fishermen

FAD Installers

Canned Processing

Domestic Market

Dry Processing

Boat Owners

Fig. 3.4 Supply chain of tuna in the Maldives. Source Mapped by the authors (based on secondary literature)

Hotels/Resorts

Port Based Intermediary

Financial Lenders

MARKETING

HARVESTING

Input Providers

Local Vendor

3.5 Fisheries Supply Chain in SIDS: A Case of the Maldives 33

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(c)

(d)

3 Fisheries Supply Chain: International Experiences

FADs installers—A fish aggregating device (FAD) is a device put into the ocean to attract and identify schools of fish. These devices are equipped with an echosounder and transmitter that help improve the efficiency of fishing operations. The FAD project started in the Maldives in 1981 with the assistance of the Food and Agricultural Organization (FAO). Due to its success, a second project was conducted with the United Nations Development Program (UNDP) after which the Government of the Maldives decided to implement an ongoing countrywide program of FAD construction, installation, and maintenance (Shainee & Leira, 2011). Currently, there is a network of 40–45 FADs that is installed by a FAD deployment team from the Ministry of Fisheries, Agriculture, and Marine Resources (Adam et al., 2003). No private players are allowed to install FADs. Boat owners Boat owners in the sector may or may not be the fishermen who go out to sea. Linton and Fareeha (2011) during their field survey have observed that there are various types of boat owners: • Fishermen who also own the boats and have upgraded from a previous smaller vessel, either utilising their savings or with the help of assistance from the World Bank. • Boats owned by an investor on behalf of a fisherman who does not have access to formal means of finance due to lack of bank accounts and credit histories. Usually, a family member who has a credit history will take on the role of the investor and be liable for credit arrangements. • Boats owned by an investor who hires a crew to work on the boat.

Boats usually cost between US$150,000 and $500,000 depending on build material, size, and engine size and are financed through a combination of loans and savings (Linton & Fareeha, 2011).

3.5.1.2 (e)

Harvesting of Fish

Fishermen—Harvesting of fish mainly remains a male-dominated profession. The Maldivian fisheries sector is important since fishermen only undertake pole and line fishing or line fishing—meaning that they catch tuna one by one, with a pole, line, and hook. This ensures that no other marine life is harmed in the process.

Types of Fishing Undertaken Pole and Line Fishing—The conventional method of pole and line fishing has seen changes in terms of productivity and vessel size, enabling fishermen to move further out into the sea. Traditional wooden vessels of around 15 m have been replaced by fibre-reinforced plastic (FRP) vessels of 30 m or more, which are often equipped with ice or refrigerated seawater preservation systems, more efficient engines, and

3.5 Fisheries Supply Chain in SIDS: A Case of the Maldives

35

modern fish locating equipment. These larger vessels have spacious crew quarters and are capable of multi-day fishing trips. Mechanised boats now account for more than 90% of all local fishing vessels. They mostly catch skipjack tuna (Ministry of Fisheries & Agriculture, 2018). Line Fishery—Is usually undertaken by locally built second- and third-generation ‘dhonis’, which are smaller than the pole and line vessels or small motorised craft. The Maldives fisheries sector is fishermen friendly with the working conditions of fishermen being relatively good. Tuna fishermen, on average, earn a monthly wage of USD 1500 which is double the per capita GDP of Maldives. According to the Maldives Fishermen Association, they can earn up to USD 3000 per month during the peak tuna season and between USD 400–500 per month during the off-season (Lecomte et al., 2017). Fishermen can sell their produce to various distinct players in the value chaincollector vessels, dry processing plants, port-based intermediaries, local markets, or even directly to consumers. All payments are made in cash. The cash is then distributed among the owner of the boat, the captain, and the crew.

3.5.1.3

Post-harvesting

Processing of Fish (f)

Collector vessels—There are several collector vessels throughout the country to buy and transport fish from fishermen to the company-owned cannery and cold storage. The fishermen are free to sell their fish to any collector vessel. Some of the fishing vessel owners have had agreements with particular companies, and in such cases, the catch is sold to them directly. The fish that is purchased by the collector vessels or freezer plants will either be canned for export at one of Maldives’ two canneries or will be exported frozen or semi-processed to other canneries in the region. Mainly two companies in the Maldives, viz., Government based Maldives Industrial Fishing Company (MIFCO) and private Horizon Fishing Company, own the collector vessels.

MIFCO has four processing plants—The Felivaru Fisheries Complex which was set up in 1977 is compliant with all international standards. Kooddoo Fisheries Complex is the main cold storage facility with the capacity to freeze 350 MT in 24 h, while the Addu Fisheries Complex was recently built to add an additional 1500 MT cold storage facility. Kandu Oiy Giri Fish Village mainly services the export market of the EU, Japan, and Asia with a new factory built in 2006 for catering also to the domestic market for the processed tuna (www.mifco.com.mv). Horizon Company has the Maandhoo Fisheries Complex that consists of several plants, viz., a tuna processing factory capable of processing up to 80 MT of raw material each day, 15 MT chilled and super frozen tuna loin plant, and a 10 MT traditional smoked and dried tuna processing facility and a 50 MT fish meal plant. (http://www.horizo nfisheries.com/).

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Value addition in terms of canning, chilling, and freezing is carried out in these processing plants and exported to international markets or sold locally. Apart from Horizon and MIFCO which are the two large players, fishermen can also sell their fish to (g)

(h) (i)

(j)

Frozen tuna processing companies—These are usually small-scale fish processing plants that play an important role in the local economy by providing employment opportunities and income, especially to women, which are critical for some islands where opportunities for income-generating activities are limited. Small-scale fish processing is characterised by relatively low technology, initial investments, and start-up costs. They mainly sell to local markets. Port-based intermediary—These individuals buy unprocessed tuna from the fishermen and act as liaisons between fishing vessels and resorts/hotels. Dry processing business/Dry processing cottage workers—Lower quality tuna that does not meet the export requirements is processed for the local markets. It is salted and dried or smoked and then sold to consumers. Market stall owners at local fish markets—Tuna that are too small or damaged are sold to stall owners who operate out of the local markets.

3.5.1.4 (k)

(l)

Consumption

International Consumers—Tuna fish from the Maldives caters to three broad categories of consumers. Majority of exports are to the USA and certain EU countries such as Germany, Netherlands, etc. who purchase canned and packaged tuna. Exports also go to Thailand in the form of frozen tuna which is further processed and re-exported to premium markets. Lastly, countries like Japan and Sri Lanka import dry tuna from the Maldives. International consumers are mainly serviced by MIPCO and Horizon (Edwards et al., 2020). Local Consumers—Include both residents and tourists who purchase fresh or chilled tuna. As mentioned above, the processing of tuna for the local consumers is carried out by small and medium enterprises (SMEs), cottage industries as well as large-scale processing plants.

Thus, from the existing literature, we observe that the supply chain for tuna in the Maldives is highly developed and characterised by few intermediaries. Pole and line vessels sell their catches directly to processing units or local markets without going through middlemen. In terms of the environment, the Maldivian pole and line fishery have a minimal impact on the ecosystem due to the robust regulations put forth by the government (Ahusan et al., 2016). After mapping out the supply chain of tuna in a Small Island Developing State, we move on to analysing the supply chain of fish in the landlocked country of Nepal.

3.6 Fisheries Supply Chain in a Landlocked Country: A Case of Nepal

37

3.6 Fisheries Supply Chain in a Landlocked Country: A Case of Nepal Nepal, being a landlocked country, is completely dependent on its 821,934 ha of inland water resources for the production of fish (DOFD, 2016). The Ganga–Brahmaputra Basin, shared jointly by India, China, Bangladesh, Nepal, and Bhutan, produces thousands of tonnes of fish per year for human consumption. However, human encroachment in the form of damming, illegal fishing, pollution, etc., has resulted in modification of the aquatic ecosystem and threatened the fish population (FAO, 2018). Due to this, aquaculture, rather than capture fisheries, has emerged as one of the fastest-growing agricultural sub-sectors in the economy. Aquaculture is ‘the farming of aquatic organisms, including fish, molluscs, crustaceans, and aquatic plants. Farming implies some form of intervention in the rearing process to enhance production, such as regular stocking, feeding, and protection from predators’ (FAO, 1988). Since the climatic conditions in the country vary from tropic to arctic, both warm and cold water aquaculture is feasible in the country (Prasad, 2017). Aquaculture production in the country is still undertaken by small-scale farmers with most of them using less than a hectare for pond polyculture, the most common aquaculture system in Nepal (FAO, 2018). The other types of aquaculture practiced in the country are fish culture in wetlands, culture in cages, enclosures, or in raceways (Prasad, 2017). Despite the small-scale nature, the production from aquaculture has increased from 17,100 MT to 55,500 MT from 2001 to 2016. However, despite the production growth, the supply chain is characterised by a large number of problems such as a long marketing chain, lack of infrastructure, and fish diseases. (RERP, 2019). The various players within the aquaculture supply chain and the problems each of them face are highlighted below.

3.6.1 Supply Chain of Aquaculture in Nepal The supply chain of fish in Nepal begins with the input suppliers.

3.6.1.1 (a)

Input Suppliers

Hatchery/Nursery—Hatcheries raise hatchlings until they become fingerlings after which they are sold to the farmer. Farmers usually buy from the 13 government hatcheries since the cost is low, while they prefer buying from the 52 private hatcheries due to their superior quality (Gurung, 2017). Fish seeds are distributed from hatcheries primarily as hatchlings and from the 123 private nurseries as fry and fingerlings, (Gurung, 2017) where nurseries are either part of the hatchery business or operate independently.

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Carps represent 95% of aquaculture in Nepal, and the demand for hatchery produced carp seed far outweighs the supply. In this segment, 77% of the total production is through private hatcheries (Mishra, 2013). (b)

(c)

(d)

(e)

(f)

Feed industries—Involved in the production of commercial feed for fish. Seven commercial fish feed industries are operating in Nepal that produce a variety of floating or sinking pellet fish feed. Apart from the fish feed manufactured locally, some other brands of fish feed are also imported from India. The feed is distributed either directly to the farmers or through agro vets (Prasad, 2017). Fish fingerlings transporter—They ensure delivery of fingerlings from the hatchery or nursery to the fish farmers. However, transportation is one of the weakest links in the aquaculture supply chain. There are many problems during transportation, where 15–30% of the fingerlings are estimated to be lost (RERP, 2019). Government agencies—Due to the growing importance of aquaculture in the country, Fish Research Centers (FRC) and Fish Development Centers (FDC) have been established by the government. The FDCs provide quality fingerlings directly to the farmer, while the FRCs provide lab facilities and technical services to improve research on quality improvement of farming technologies in aquaculture along with capacity development training to farmers (RERP, 2019). Agro vet—Agro vets are involved in the production of various inputs like feed, urea, DAP, and lime. However, it is noticed that agro vets are mainly available only in the district headquarters and main market areas. Insurance providers—They enable farmers to protect themselves against external risks such as flood, disease, and transferring electricity in the pond. However, very few farmers have taken up this insurance due to the lack of funds and, or information deficit.

3.6.1.2 (g)

Producers

Farmers—The study by Shrestha (n.d.) identified three categories of farmers in the aquaculture sector in Nepal.

Small-scale farmers—Small-scale aquaculture is defined in the context of Nepal as ‘a family-based enterprise, where fish are produced by involving family members of the fish farm owner in common, leased, private, or self-owned property regardless of the farm size, species reared, and volume produced by family efforts’ (NACA, 2008). The total produce harvested is either retained for self-consumption (50–60%), sold to neighbouring households, or sold to bicycle-based sellers who in turn carry out door-to-door marketing.

3.6 Fisheries Supply Chain in a Landlocked Country: A Case of Nepal

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Most small-scale farmers have ponds varying in size from 100 to 300 m2 . The technology used is basic, with 3–6 species of carp being stocked. Since fish feed constitutes 40–60% of the production costs in aquaculture (Ali et al., 2009), most smallscale farmers use locally available mass feed made of rice bran and mustard oil due to the high cost of commercial feed. The current productivity of such a small-scale pond is about 3–5 ton/ha/year. These fish farmers also face infrastructure issues such as insufficient water and electric supply leading to inefficiency in production. Medium-scale aquaculture: These farmers have a pond size that varies from 1000 to 3000 m2 or more. Production technology used is semi-intensive. Chemical fertilisers and factory feed are mostly used. The majority of fish produced (80–90%) are sold, and 10–20% are used for household consumption. Current fish production for medium-sized aquaculture is about 4–8 ton/ha/year. Commercial farmers: This segment of aquaculture is associated with registered fish farms owned either by an individual entrepreneur or by groups in leased or own land. Farm size may vary from few hectares (3–4 ha) size to several hectares (15–20 ha). Fish are fed with commercial pellet feed. The productivity is the lowest for carps polyculture and tilapia which is 6–8 ton/ha/year and 6–10 tom/ha/year, respectively, while it the highest for trout at 100–120 ton/ha/year (Shrestha, n.d.).

3.6.1.3 (h)

(i) (j) (k)

Marketing Intermediaries

Fishermen—These fishermen help the fish farmers in the harvesting of fish. The majority of fishermen are also involved in fish trading and assume the role of a local trader. Some fishermen who live near the border also export fish to India. Due to the lack of fishermen at the cluster level, producers are unable to harvest the fish on time, creating problems in intensive fish farming. Local traders—They buy from the small- and medium-scale fish farmers and transport the produce to the market in motorcycles or bicycles. Wholesalers—They buy produce from the commercial farmers and transport them to various wholesale markets to further sell it to retailers. Live fish dealers—In this segment of the product, local traders buy fish from farmer’s pond sites and then sell to various large customers like hotels and restaurant owners or in the local or city markets located in large cities such as Kathmandu. For the local market, they usually transport live fish in hundies (large pots) with water. For the markets in cities such as in Katmandhu, the live fishes are transported in a plastic tank with aeration in the truck (Husen, 2019).

3.6.1.4

Retailer

Retail traders purchase fisheries products from the wholesalers and then sell them at the retail market. It is generally observed that the facilities at fish retail markets

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are minimal, with poor hygiene and sanitation. There are no standard practices for handling, washing, sorting, grading, cleaning, and icing fish. The retailer in the rural market stores his fish just keeping them on a polythene cover on the ground or in the hundies (large pots) with little or no water. In the urban areas, by making use of the government subsidies, better fish stalls have been developed for selling fish. The fisheries supply chain prevailing in Nepal is represented through Fig. 3.5. Nepal has a huge potential for developing its aquaculture sector due to its extensive inland water resources. However, most of these water resources such as ponds and irrigated paddy fields are currently under-utilised. On the other hand, current aquaculture practices are characterised by inadequate knowledge regarding fish breeding, genetics, transportation, and nutrition (Prasad, 2017). Technical and financial assistance is needed to continue to develop the aquaculture potential of the country.

3.7 Key Insights In mapping out the supply chains across various countries, as expected, we begin with the producer, that is, either the fishermen or fish farmer, and end with the consumer. What differs, however, is the number and functions of ‘mid-chain players’. Depending on the length and complexity of the supply chain, mid-chain players may include transporters, auctioneers, processors, wholesalers, etc. Despite these differences in the number and functions of these mid-chain players across countries, some similarities were also observed to be prevailing. For instance, most supply chains were informal and unregulated, characterised by the presence of small-scale fishermen who were either self-employed or hired to work on boats without any formal contracts. There was also a lack of stringent regulations regarding their occupational safety and health. The lack of access to formal financing was a characteristic that stood out in most supply chains across countries. In most countries, fishermen are poor and geographically and socially isolated from the rest of the community and lack access to basic services. Most of them do not own any assets, including boats, required to pursue their livelihood. Lack of access to the formal financial institutions is a major hindrance that leads them to often rent boats from boat owners. In the case of Nepal, we observe that the Agricultural Development Bank of Nepal (ADBN) with assistance from the Asian Development Bank was providing credit to the fisheries sector. However, after the project’s termination in 1993, ADBN’s investment in fisheries has declined due to the misuse of loan provided, high interest rates, etc. (Tietze and Villareal, 2003). Similarly, in Peru, most of the capital provided by formal financial institutions is limited to large- and medium-sized enterprises within the fishing industry. Due to this, 85% of the credit being availed by small-scale and artisanal fishermen are from informal lenders or financial enablers (World Bank, 2020). Another concern, viz., the absence of traceability of fish, was also seen across all countries except for the Maldives. Traceability refers to the ability to track a product

Medium Scale Farmers

HARVESTING

Commercial Farmers

Small Scale Farmers

Fish Farmers

Fingerling Transporter

Fresh Fish

MARKETING INTERMEDIARIES

Live Fish Collectors

CONSUMERS

Kathmandu

Restaurants

Local Markets

Local Traders

Wholesalers

Exports to India

Fishermen

Fig. 3.5 Supply chain of aquaculture in Nepal. Source Mapped by authors (using secondary sources of information)

INPUT SUPPLIERS

Insurance Agencies

Agro Vets

Government Agencies

Feed Industries

Hatchery/Nursery

3.7 Key Insights 41

42

3 Fisheries Supply Chain: International Experiences

from the point of sale back to its point of catch or harvest. It is important for food safety and for ensuring quality. However, there were no labelling requirements or reporting of catch to the respective governments being practiced, making it almost impossible to trace a product. In fact, in Peru, literature reported purposive mislabelling of the source of production was carried out to ensure better prices and sales. While some common challenges impede the supply chain of fisheries, there have been some innovations and progress across individual countries. For instance, in Nepal, government agencies have been set up Fish Research Centre and Fish Development Centre that provides technical research, labs, and training to farmers. Peru has set up the Coastal Fisheries Initiative—Challenge Fund to support fishermen who want to access formal credit options. It helps the fishermen to prepare a comprehensive investment readiness assessment. The organisation also aims to identify the barriers and limitations in accessing formal credit. The Maldives has been at the forefront of sustainable fisheries. Along with being fisher-friendly, practices followed in the country ensure stock sustainability by adopting pole and line fishing and protection of juvenile stock and breeding areas. The government has imposed environmental and eco-friendly practices by prohibiting net and trawler fishing, protecting sharks and turtles, and banning poison and blasts at sea. The case studies taken up in this chapter provided us a picture of supply chains prevailing for different fisheries products in various countries. However, given our focus on India in this study, we next move on to focusing on the Indian supply chain of marine and inland fish in detail. To provide a broader perspective, we first present an overview of the Indian fishery sector in the next chapter.

References Adam, M. S., Anderson, R. C., & Hafiz, A. (2003). The Maldivian Tuna Fishery. IOTC Proceedings, 6, 202–220. Ahusan, M., Adam, M. S., Ziyad, A., Shifaz, A., Shimal, M., & Jauharee, R. (2016). Maldives national report to the scientific committee of the Indian Ocean Tuna Commission. Indian Ocean Tuna Commission (IOTC). Alfaro-Shigueto, J., Mangel, J. C., Pajuelo, M., Dutton, P. H., Seminoff, J. A., & Godley, B. J. (2010). Where small can have a large impact: Structure and characterization of small-scale fisheries in Peru. Fisheries Research, 106(1), 8–17. Ali, H., Haque, M. M., Chowdhury, M. M. R., & Shariful, M. I. (2009). In vitro protein digestibility of different feed ingredients in Thai koi (Anabas testudineus). Journal of the Bangladesh Agricultural University, 7(1), 205–210. Amorós, S., Gozzer, R., Melgar, V., & Rovegno, N. (2017). Peruvian mahi mahi fishery (Coryphaena hippurus): Characterization and analysis of the supply chain. WWF-Marine Program of WWFPeru. Christensen, V., De la Puente, S., Sueiro, J. C., Steenbeek, J., & Majluf, P. (2014). Valuing seafood: The Peruvian fisheries sector. Marine Policy, 44, 302–311. Coayla, E. (2020). Artisanal marine fisheries and climate change in the region of Lima, Peru. Journal of Ocean and Coastal Economics, 7(1), 1–19.

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COINREFRI S.R.L. (n.d.). Fishing season-Resource: Mahi-Mahi 2020–21. Retrieved March 2, 2021, from https://www.coinrefri.com/us/fishing-season-resource-mahi-mahi-2020-21/ De la Puente, S., López de la Lama, R., Benavente, S., Sueiro, J. C., & Pauly, D. (2020). Growing into poverty: Reconstructing Peruvian small-scale fishing effort between 1950 and 2018. Frontiers in Marine Sciemce, 7, 681. Department of Agricultural Marketing Bangladesh. (2018). Commodity wise report. Department of Fisheries, Ministry of Agriculture, Government of the People’s Republic of Bangladesh. Available at: http://www.dam.gov.bd/commodity_wise_report Department of Fisheries Bangladesh. (2018). Department of Fisheries Annual Report 2018, Bangladesh. Ministry of Fisheries and Livestock, Government of the People’s Republic of Bangladesh. DOFD. (2016). Fisheries Statistics and Annual Progress Report. Directorate of Fisheries Development, Nepal. Edwards, Z., Sinan, H., Adam, M. S., & Miller, A. (2020). State-led fisheries development: Enabling access to resources and markets in the Maldives pole-and-line skipjack tuna fishery. Securing Sustainable Small-Scale Fisheries: Showcasing Applied Practices in Value Chains, Post-Harvest Operations and Trade, 652, 141. El-Sayed, A.-F. M. (2017, 7 August). Egypt’s success with tilapia a blueprint for Africa. Aquaculture Alliance. https://www.aquaculturealliance.org/advocate/egypt-tilapia-blueprint-africa/ FAO. (1988). Aquaculture definitions. http://www.fao.org/3/x6941e/x6941e04.htm FAO. (2018). Fishery and aquaculture country profiles—Nepal. http://www.fao.org/fishery/facp/ NPL/en Feidi, I. (2004). The market for seafood in the area of Greater Cairo (Egypt). Centre for marketing information and advisory services for fishery products in the Arab region (INFOSAMAK). Future of Fish. (2019). Fishery development blueprint: Traceability in the Peruvian mahi mahi fishery. https://futureoffish.org/sites/default/files/docs/resources/Mahi-Report_Eng_web.pdf Gurung, S. (2017). Participatory market chain approach: An unidentified sustainable supply chain model to boost fish nurseries. Aquaculture Asia, 21(1), 2–6. Hebisha, H., & Fathi, M. (2014). Small and medium scale aquaculture value chain development in Egypt: Situation analysis and trends. International Livestock Research Institute (ILRI), WorldFish. Hemmings, M., Harper, S., & Zeller, D. (2014). Reconstruction of total marine catches for the Maldives: 1950–2010. In K. Zylich, D. Zeller, M. Ang & D. Pauly (Eds.), Fisheries catch reconstructions: Islands, part IV (pp. 107–120). University of British Columbia. Husen, M. A. (2019). Fish marketing system in Nepal: Present status and future prospects. International Journal of Applied Science Biotechnology, 7(1), 1–5. Islam, M. M., Mohammed, E. Y., & Ali, L. (2016). Economic incentives for sustainable hilsa fishing in Bangladesh: An analysis of the legal and institutional framework. Marine Policy, 68, 8–22. Khan, M. A., Abdul, W. M., Haque, A. M., Nahiduzzaman, M., & Phillips, M. J. (2020). Value chain impact of the increased hilsa shad (Tenualosa ilisha) harvest in Bangladesh. International Food and Agribusiness Management Review, 23(3), 355–368. Lecomte, M., Rochette, J., Laurans, Y., & Lapeyre, R. (2017). Indian Ocean tuna fisheries: Between development opportunities and sustainability issues. IDDRI. Linton, J., & Fareeha, S. (2011). Financial services for the fisheries sector: Maldives case study. http://africanfisheriesinvestment.org/files/casestudies/casestudy-maldives.pdf Macfadyen, G., Nasr-Alla, A. M., Al-Kenawy, D., Mohamed, M. F., Hebicha, H., Diab, A. M., Hussein, S. M., Abou-Zeid, R. M., & El-Naggar, G. (2012). Value-chain analysis—An assessment methodology to estimate Egyptian aquaculture sector performance. Aquaculture, 362–363, 18–27. Macfadyen, G., Nasr-Alla, A.M., Al–Kenawy, D., Mohamed, M. F., Hebicha, H., Diab, A. M., Hussein, S. M., Abou-Zeid, R. M., & El-Naggar, G. (2011). Value-chain analysis of Egyptian aquaculture. Project Report 2011–54. World Fish Center. Miller, K. I., Nadheeh, I., Jauharee, A. R., Anderson, R. C., & Adam, M. S. (2017). Bycatch in the Maldivian pole-and-line tuna fishery. PLoS ONE, 12(5).

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Ministry of Environment and Energy. (2018). Progress report: Demonstration project for fisheries sector. Republic of Maldives. Ministry of Fisheries and Agriculture. (2018). Project for the Formulation of Master Plan for Sustainable Fisheries (MASPLAN). Republic of Maldives. Mishra, R. N. (2013, 15 March). Carp seed quality improvement program in Nepal. [Conference Presentation]. Aquaculture in Nepal: Recent development and future prospects, Kathmandu, Nepal. Mome, M. A., Officer, E., Bhaban, M., & Arnason, R. (2007). The potential of the artisanal hilsa fishery in Bangladesh: An economically efficient fisheries policy. Fisheries Training Programme Final Project Report, United Nations University, Iceland. Mozumder, M. M. H., Pyhälä, A., Wahab, M., Sarkki, S., Schneider, P., & Islam, M. M. (2020). Governance and power dynamics in a small-scale hilsa shad (Tenualosa ilisha) fishery: A case study from Bangladesh. Sustainability, 12(14), 5738. NACA Network of Aquaculture Centers in Asia Pacific. (2008, 5–6 August). Inception Workshop: Strengthening Capacity of Small Holder ASEAN Aquaculture Farmers for Competitive and Sustainable Aquaculture [Workshop Presentation]. NACA, Bangkok. Nasr-Allah, A. M., Dickson, M. W., Al-Kenawy, D. A., Fathi, M., El-Naggar, G. O., Azazy, G. E., Grana, Y. S., & Diab, A. M. (2014). Value chain analysis of Egyptian fish seed production. In 4th conference of central laboratory for aquaculture research (pp. 351–372). Nasr-Allah, A., Gasparatos, A., Karanja, A., Dompreh, E. B., Murphy, S., Rossignoli, C. M., Phillips, M., & Charo-Karisa, H. (2020). Employment generation in the Egyptian aquaculture value chain: Implications for meeting the sustainable development goals (SDGs). Aquaculture, 520, 734940. Naziri, D. (2011). Financial services for SME aquaculture producers—Egypt case study. German Agency for Technical Cooperation (GTZ). Nowsad, A. K. M. A. (2010). Post-harvest loss reduction in fisheries in Bangladesh: A way forward to food security. National Food Policy Capacity Strengthening Programme (NFPCSP). http:// fpmu.gov.bd/agridrupal/sites/default/files/Nowsad_Alam-PR5-08.pdf Nowsad, A. K. M. A. (2016). Supply and value chain of fish in super-shop outlets in Dhaka city. BAU Department of Fisheries Technology. https://www.researchgate.net/publication/290086624_Sup ply_and_value_chain_of_fish Oasiqul, A. S., Bokthier, R. M., Shahin, A. M., Yusuf, A. M., Jannatul, N., Arefin, R. M., & Shaila, I. S. (2017). An investigation on species composition, consumer’s preferences and marketing channel of hilsa in two coastal districts of southern Bangladesh. Russian Journal of Agricultural and Socio-Economic Sciences, 66(6), 272–282. Porras, I., Mohammed, E. Y., Ali, L., Ali, M. S., & Hossain, M. B. (2016). Leave no one behind: power and profits in Bangladesh’s hilsa fishery: a value chain analysis (IIED Working Paper). IIED, London. Prasad, B. (2017). Farm made feeds for sustainable aquaculture development in Nepal. In S. S. Giri (Eds.), Farm made aquafeeds: Opportunities, challenges and policy interventions (pp 84–103). SAARC Agriculture Centre, South Asian Association for Regional Cooperation. RERP Rural Enterprises and Remittances Project. (2019). Fish supply chain implementation report 2019. Ministry of Industry, Commerce and Supply, Government of Nepal. Sapkota, P., Dey, M. M., Alam, M. F., & Singh, K. (2015). Price transmission relationships along the seafood value chain in Bangladesh: Aquaculture and capture fisheries. Aquaculture Economics & Management, 19(1), 82–103. Shaalan, M., El-Mahdy, M., Saleh, M., & El-Matbouli, M. (2018). Aquaculture in Egypt: Insights on the current trends and future perspectives for sustainable development. Review in Fisheries Science and Aquaculture, 26(1), 99–110. Shainee, M., & Leira, B. J. (2011). On the cause of premature FAD loss in the Maldives. Fisheries Research, 109(1), 42–53. Shrestha, M. K. (n.d.). Aquaculture development in Nepal and current needs. Agriculture and Forest University.

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Tietze, U., & Villareal, L. V. (2003). Microfinance in fisheries and aquaculture: guidelines and case studies FAO Fisheries Technical Paper No. 440. Rome, FAO. 114 pp. World Bank Group. (2020). Financing the Peruvian artisanal small-scale fisheries sector: An analysis of supply and demand. Peru Coastal Initiate—Challenge Fund. https://pescaemprende.com/ wp-content/themes/intelfin/uploads/AN_SUP_DEM.pdf

Chapter 4

Fisheries Sector in India—An Overview

4.1 Introduction Considered the sunrise sector of the economy, the fisheries sector in India has transformed itself from its traditional role as a subsistence, supplementary activity to an important commercial activity today. The sector contributes to the livelihood of more than 16 million fishermen at the primary level, and twofold the number across the supply chain (GoI, 2020). The fisheries sector, comprising marine, inland, and brackish water fish, is also an important source of food security and nutrition in the country, with fish being an affordable and rich source of animal protein (Kumar et al., 2010). The importance of the fisheries sector is also reflected in its increasing contribution to both the gross domestic product (GDP) and foreign exchange earnings of the country. In 2017–18, the share of the sector to GDP was 1.03%, a 157% increase from its 0.4% contribution in 1950–51, while its share in agricultural GDP was 6.58%. The contribution of fisheries to exports has also been steadily increasing with the sector accounting for 5% of total exports and 19.23 % of total agricultural exports in 2017-18 (MOPSI, 2020, as cited in GoI, 2020). Domestic and international trade in this sector is influenced by both demand and supply side factors. As far as the supply side is concerned, India is endowed with abundant water resources, comprising a coastline of 8118 km with an exclusive economic zone (EEZ) covering 2.02 million km, and a continental shelf area of 0.53 million km. As shown in Table 4.1, the coastal state of Gujarat has the longest coastline (1600 km) followed by Tamil Nadu (1076 km) and Andhra Pradesh (974 km). Among the union territories, Andaman and Nicobar Islands have the longest coastline of 1912 km. There are 3477 fishing villages in the country with the total fisherfolk population being approximately 3.77 million. There are also 1547 landing centres, with Andhra This overview is written using secondary level information from Department of Fisheries Annual Report, 2019–20; MPEDA Annual Report, 2017–18; Handbook of Fisheries Statistics, 2018; Information from Ministry of Commerce, Government of India and CSO. © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Rajeev and S. Bhandarkar, Unravelling Supply Chain Networks of Fisheries in India, SpringerBriefs in Economics, https://doi.org/10.1007/978-981-16-7603-1_4

47

48

4 Fisheries Sector in India—An Overview

Table 4.1 Marine fisheries resources of India State/UT

Approximate Continental length of coast shelf (000 line (km) km2 )

No. of landing centres

No. of fishing villages

No. of fishermen families

Fisherfolk population

Andaman and Nicobar

1912

35

51

169

5944

26,521

Andhra Pradesh

974

33

350

533

1,55,062

5,17,435

Daman Diu

27

-

12

12

3,163

15,836

Goa

104

10

34

41

2,986

12,651

Gujarat

1600

184

107

280

67,610

3,54,992

Karnataka

300

27

115

162

32,479

1,57,989

Kerala

590

40

204

220

1,21,637

5,63,903

Lakshadweep

132

4

20

10

4,163

27,934

Maharashtra

720

112

173

526

87,717

3,64,899

Orissa

480

26

73

739

1,15,228

5,17,623

Pondicherry

45

1

41

39

14,347

50,270

Tamil Nadu

1076

41

301

575

2,01,855

7,95,708

West Bengal

158

17

66

171

81,067

3,68,816

Total

8118

530

1547

3477

8,93,258

37,74,577

Source Handbook of Fisheries Statistics 2018; also see Rajeev and Bhandarkar (2019)

Pradesh having the highest (350) followed by Tamil Nadu (301) and Kerala (204) (Department of Fisheries [DoF], 2018) (see Table 4.1). In addition to the marine water resources mentioned above, India has inland water resources comprising of rivers and canals covering over 201,495 km, reservoirs covering an area of 3.52 million hectares, and tanks and ponds covering an area of 2.47 million hectares. The brackish water area available for aquaculture is 1.16 million hectares (see Table 4.2). These vast and varied resources, including the underutilised inland resources, offer further potential for the growth of the fisheries sector in the country. The total potential of the fisheries sector in India is estimated to be 22.31 MMT, with marine fisheries potential estimated to be 5.31 MMT and inland fisheries potential estimated at 17 MMT (GoI, 2020). However, the potential of the sector has not been completely realised, as seen by the current structure and trend of production.

4.2 Fish Production in India The total fish production in India during 2017–18 was 12.59 million metric tonnes (MMT), an increase of 10.14% since 2016–17, with the inland fisheries sector

4.2 Fish Production in India

49

Table 4.2 Inland water resources of India States/UT

Rivers and canals (km)

Reservoirs (000 ha)

Tanks and ponds (000 ha)

Flood plain derelict water bodies (000 ha)

Brackish water (000 ha)

Total water bodies (000 ha)

Andhra Pradesh

6960.5

170.7

271.2

–

60.0

627.9

Arunachal Pradesh

30.0

0.2

3.6

11.9

–

15.7

Assam

4820.0

2.0

73.1

86.2

–

262.1

Bihar

3200.0

60.0

93.3

–

–

296.3

Chhattisgarh

3573.0

84.0

99.4

–

–

183.4

Goa

250.0

3.4

0.2

–

–

3.6

Gujarat

3865.0

347.7

22.0

12.0

100.0

481.7

Haryana

5000.0

-

20.0

–

–

20.0

Himachal Pradesh

3000.0

43.8

0.8

–

–

45.2

Jammu & Kashmir

27,781.0

11.0

0.4

–

–

17.4

Jharkhand

1800.0

121.0

66.3

–

–

201.8

Karnataka

5813.0

440.0

292.3

–

10.0

742.3

Kerala

3220.0

34.2

27.6

80.0

240.0

544.8

Madhya Pradesh

17,066.0

339.2

0.0

–

–

339.2

Maharashtra

17,725.0

299.0

148.4

–

17.1

464.5

Manipur

3360.0

2.1

11.4

4.7

–

42.7

Meghalaya

3904.1

8.0

2.0

0.1

–

10.3

Mizoram

1100.0

8.1

5.5

–

–

13.6

Nagaland

1600.0

2.3

3.4

–

–

7.4

Odisha

24,878.3

256.0

132.8

–

430.0

998.8

Punjab

868.0

4.2

16.2

–

–

20.4

Rajasthan

5290.0

336.9

93.9

–

–

430.8

Sikkim

900.0

0.9

0.0

–

–

3.9

Tamil Nadu

7420.0

570.0

258.0

7.0

60.0

895.0

Telangana

1808.0

167.9

404.0

–

–

571.9

Tripura

1266.7

5.0

17.6

0.4

–

22.9

Uttarakhand

2686.0

20.6

0.9

–

–

22.1

Uttar Pradesh

39,542.0

147.6

149.9

–

–

334.9

West Bengal

2526.0

28.1

263.4

26.9

210.0

570.4 (continued)

50

4 Fisheries Sector in India—An Overview

Table 4.2 (continued) States/UT

Rivers and canals (km)

Reservoirs (000 ha)

Tanks and ponds (000 ha)

Flood plain derelict water bodies (000 ha)

Brackish water (000 ha)

Total water bodies (000 ha)

0.4

0.2

–

33.0

33.5

–

–

–

–

–

Dadra & Nagar 54.0 Haveli

5.0

–

–

–

5.0

Daman and Diu 12.0

–

–

–

–

–

Delhi

150.0

4.0

–

–

–

4.0

Lakshadweep

–

–

–

–

–

–

Puducherry

25.0

1.7

0.3

1.0

0.0

3.1

All India

2,01,495.7

3524.7

2478.3

230.1

1160.2

8236.7

A and N Islands Chandigarh

2.0

Source Handbook of Fisheries Statistics 2018; see also Rajeev and Bhandarkar (2019)

contributing 8.90 MMT and the marine sector contributing 3.68 MMT (see Fig. 4.1). Gujarat was the main marine fish producing state (0.7 MMT), followed by Andhra Pradesh (0.6 MMT) and Tamil Nadu (0.49 MMT) in 2017–18, while Andhra Pradesh 16 14 12 10 8 6 4 2 0

Marine

Inland

Total

Fig. 4.1 Fish production in India (million metric tonnes). Source Compiled using data from the Handbook on Fisheries Statistics, 2018

4.2 Fish Production in India

51

(2.84 MMT), West Bengal (1.55 MMT), and Uttar Pradesh (0.62 MMT) were the top three major inland fish-producing states in the country (DoF, 2018). With regard to the contribution of inland and marine fisheries to overall fish production, a structural shift from marine-dominated fisheries to inland fisheries can be seen. Inland fish production was equal to marine fish production in 2000–01 and exceeded it in 2009–10 (Ravikanth & Kumar, 2015). As shown in Figs. 4.2 and 4.3, the share of inland fisheries has increased from 40 to 71% from 1990–91 to 2017–18, with the share of marine fisheries subsequently decreasing from 60 to 29% during the same period. There has also been a shift in inland fisheries from capture fisheries to aquaculture, with its share increasing from 34% in the mid-1980s to 80% in 2017–18 (Marine Product Export Development Authority [MPEDA], 2018). Fig. 4.2 Percentage contribution of marine and inland fisheries in 1990–91. Source Compiled using data from the Handbook on Fisheries Statistics, 2018

1990-91

40%

60%

Inland

Fig. 4.3 Percentage contribution of marine and inland fisheries in 2017–18. Source Compiled using data from the Handbook on Fisheries Statistics, 2018

Marine

2017-18

29%

71%

Inland

Marine

52

4 Fisheries Sector in India—An Overview

The main reason for the decline in the share of marine fish production can be attributed to the fact that maximum sustainable levels of exploitation have almost been reached (Kumar et al., 2010), due to which the growth rate of marine fish production has been only 1.73% in 2017–18 as compared to inland fisheries that had an annual average growth rate of 14.05% in the same year (DoF, 2018). On the other hand, inland fisheries have shown tremendous growth due to the increasing private and public investment in the sector. The Government of India has undertaken various initiatives such as demonstrating and training fish farmers in new farming technologies, setting up fish seed rearing units, and establishing a recirculatory aquaculture system (National Fisheries Development Board [NFDB], 2020). The fish production in the country caters to both domestic and international demands. As far as domestic demand is concerned, the per capita consumption of fish in the country is estimated to be around 6 kg per annum for the entire population and 8–9 kg for the fish-eating population (Salim, 2016). While inland fisheries mostly cater to the domestic demand, a significant share of marine production is exported (Ravikanth & Kumar, 2015).

4.3 Export Performance of the Indian Fisheries Sector The exports of fish and fish products from the country have been increasing exponentially over the last few years, with marine products from India being exported to more than 100 countries across the globe (Srinivas, 2020). Since 2017, due to a substantial increase in the production of farmed shrimp, India has become the fourth major exporter of fish and fish products, preceded only by China, Norway, and Vietnam. However, after peaking at USD 7.2 billion in 2017, the value of India’s exports declined by 3% in 2018, driven primarily by a decline in shrimp prices. Despite this, India has maintained its standing as the 4th largest exporter of fish and fish products globally (see Table 4.3). India’s trade share in the sector has increased from 2.64% in 2006–07 to 4% in 2018. In the year 2017–18, India exported 13,77,244 MT of seafood accounting for USD 7.08 billion (see Fig. 4.4), a 21.35% increase over the previous year with 11,34,948 MT worth USD 5.77 billion exported in 2016–17. The main reason for the increase Table 4.3 India’s export value and share among the top 5 exporters of fish and fish products in 2018

Country

Value of exports (billion USD)

China

21.63

14

Norway

11.98

7

Vietnam

8.86

5

India

6.92

4

Chile

6.79

4

Source Compiled using FishStat database

%age share in global trade value

4.3 Export Performance of the Indian Fisheries Sector

53

8000 7000 6000 5000 4000 3000 2000 1000 0

Fig. 4.4 Value of exports of marine products from India (USD million). Source Compiled using data from MPEDA Annual Report, 2017–18

in the value of exports was the increase in the average unit value of exports from USD 5.09 to 5.14 per kg in 2017–18. Frozen shrimp was the major item of export from India, accounting for 68.43% of the total value of exports, an increase of 30.1% over 2016–17 (see Fig. 4.5). Of the overall shrimp exports of 5,65,980 MT, 39.92% was exported to the USA, followed by 28% to Southeast Asia and 13% to the European Union (EU). This was followed by frozen fish accounting for 10.35% of total export earnings. Chilled Items, 1.44 Dried Items, 2.31

Others , 6.16

Live Items, 0.63 Frozen Squid, 5.44 Frozen CuƩle Fish, 5.22 Frozen Fish, 10.36 Frozen Shrimp, 68.43

Fig. 4.5 Item-wise exports from India in 2017–18 (%). Source Compiled using data from MPEDA Annual Report, 2017–18

54

4 Fisheries Sector in India—An Overview

4.3.1 Direction of Trade USA continued to be the major importer of marine products from India accounting for a share of 32.76% in terms of USD value with frozen shrimp being the primary product of export (Fig. 4.6). Southeast Asia was the second largest market accounting for a share of 31.59% of total export value. The main importers of marine seafood from India in Southeast Asia were Vietnam (79.29% of total export value to Southeast Asian countries), followed by Thailand (11.63%) and Taiwan (3.12%). As shown in Fig. 4.6, following the Southeast Asian countries were the European Union, Japan, China, and the Middle East as the main importers of marine products from India. Marine products were exported through 31 different sea, air, and land ports in the country with Vizag, Kochi, Kolkata, Pipavav, Krishnapatnam, and Jawaharlal Nehru Port (JNP) handling the majority of the marine exports. Exports improved from all the ports except for Kolkata which showed a decrease of 5.5% in the volume of cargo handled in 2017–18. (MPEDA, 2018). The impressive growth of the exports of marine products from India, however, been against a backdrop of increasing trade barriers from the importing countries.

4.4 Barriers to Trade Barriers to trade take the form of either tariff or non-tariff barriers. While trade barriers have been low and continually falling across countries, increasing non-tariff measures are being imposed by importing nations. Fig. 4.6 Market-wise exports of marine products from India in 2017–18 (%). Source MPEDA Annual Report, 2017–18

China, 3%

Others, 6%

Middle East , 4% Japan, 6%

USA, 33%

South East Asia, 32% EU, 16%

4.4 Barriers to Trade

55

4.4.1 Tariff Barriers A tariff is a ‘tax levied on imports, or more rarely on exports, of a good at the border. Its effect is to raise the price of the imported (exported) product above its price on the world (domestic) market’ (Bacchetta et al., 2012). Tariff barriers for exports of marine products from India have been low. India enjoys a nominal 1% tariff duty rate with the USA, a 10.2% tariff rate with the EU, and a 4.1% tariff duty rate with Japan. The USA, EU, and Japan extend preferential tariff rates to Indian products under the Generalised System of Preferences (GSP) (Madan & Shyam, 2012).

4.4.2 Non-tariff Measures Non-tariff measures are ‘policy measures, other than [ordinary] customs tariffs, that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both’ (UNCTAD, 2010). Fish and fish products are considered ‘high risk’ due to which there are a variety of food safety standards relating to hygiene, quality, and packaging requirements imposed by many countries, specifically developed countries across the globe (Henson et al., 2004). We look at the non-tariff measures imposed by the EU and USA which are the two biggest importers of marine products from India.

4.4.2.1

Non-tariff Measures Imposed by the European Union

The EU has the most stringent measures for the import of fish and fish products. For instance, Directive 91/493/EEC requires member countries and importers to have in place regulated hygiene protocols and hazard analysis and critical control point (HACCP) systems, while Regulation 1005/2008 requires validation of catch certificate for exports of sea caught varieties of fish. Other regulations also specify the limits for heavy metals in fish (No. 466/2001), labelling requirements (No. 2065/2001), packaging requirements (No. 94/360/EC), etc. (Renjini, 2016; UNCTAD, 2017). The EU also requires importing countries to have a competent authority that harmonises the regulations in the home country with that of the standards in the EU. Processing plants, factories, and storage units all need to be inspected and certified as being equivalent to the level of EU standards (UNCTAD, 2017). One major problem that India faces in adhering to these regulations is the nonharmonisation of standards among the EU countries. Different countries with the EU have varying standards for testing procedures leading to a high rate of rejection of exports. For instance, Italy and France frequently reject consignments from India due to the presence of Vibrio parahaemolyticus, which is a bacterium found in coastal waters. However, not all strains of this bacterium are pathogenic. Thermostable direct haemolysin (TDH)/thermostable-related haemolysin (TRH) are considered the main

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4 Fisheries Sector in India—An Overview

Table 4.4 Number of border rejections in the EU 2015

2016

2017

2018

2019

Bivalve molluscs and product thereof

0

0

0

0

0

Crustaceans and products thereof

3

7

17

17

4

Fish and fish products

6

1

2

5

2

Cephalopods and products thereof

3

5

6

2

0

Source Compiled using RASFF database

virulence factors. Despite this, Italy and France reject consignments without testing for TDH and TRH (Madan & Shyam, 2012). There is also non-harmonisation of procedures for lifting rapid alerts in the EU. The Rapid Alert System for Food and Feed (RASFF) enables quick flow of information among member countries regarding public health risks detected in food products. The removal of these rapid alerts is subject to different numbers of checks by different countries despite exports being from the same company. France has 3 checks, Spain and Italy have 10, while Belgium has 5 checks. Another barrier that Indian exporters face is the requirement of health certificates in the local language rather than in English (Madan & Shyam, 2012; Rajeev, 2008). One important indicator of non-tariff measures is the border rejection rate. As shown in Table 4.4, the border rejection of Indian exports of seafood products has been substantial over the years. The main causes for border rejections are attributed to the presence of prohibited substances such as nitrofuran and chloramphenicol, abnormal colour and smell of produce, and poor temperature control of the consignment.

4.4.2.2

Non-tariff Measures Imposed by the USA

The rules, regulations, and standards in the USA are varied, with numerous agencies such as the USFDA, United States Environmental Protection Agency, and the Food Safety and Inspection Service involved (Renjini, 2016). The country has increased inspections under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 with increasing random checking being conducted leading to greater FDA rejections. It has also imposed fines of up to $10,000 for failures to correctly label produce under the Country of Origin Labelling Programme implemented in 2004 (Madan & Shyam, 2012; Rajeev, 2008). The USA has also made it mandatory for the shrimp consignments to the country to be accompanied by DS 2031 certificate, which states that harvesting of shrimp was undertaken in a manner not harmful to sea turtles or harvested by aquaculture (MPEDA, 2018). The USA has also not agreed to recognise the Export/Import Certificate (EIC) on account of the increasing costs involved. (Madan & Shyam, 2012; Rajeev, 2008). Table 4.5 shows the number of seafood consignments exported from India that are rejected by the USA.

4.4 Barriers to Trade

57

Table 4.5 Number of FDA refusals of seafood products exported from India 2015

2016

2017

2018

2019

Shrimp and prawns

59

119

33

83

67

Cuttlefish, other aquatic species

0

0

16

0

4

Fish, NEC

2

9

2

0

0

Kingfish

1

0

0

0

0

Mackerel

0

2

0

0

0

Source Compiled using data from US FDA

The main reasons for border rejections in the USA have been mainly due to the presence of salmonella, due to the consignment containing a filthy, putrid, or decomposed substance and non-compliance with labelling requirements.

4.5 Import Performance of Indian Fisheries Sector In the Indian fisheries industry, the imports of fish and fishery products is very low compared to the exports from the country (Madan & Shyam, 2012). The value of imports has increased from a mere USD 6.73 million in 2000–01 to USD 90.54 million in 2017–18 (see Fig. 4.7). India mainly imports fish and fish products from 120 100 80 60 40 20 0

Fig. 4.7 Value of import of fish and fish products by India (USD million). Source Compiled using data from DGCI&S Export–Import database

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4 Fisheries Sector in India—An Overview

Bangladesh (23.48% share of total import value) followed by Vietnam (20.48%) and the USA (14.65%) in 2017–18. Following the EXIM policy, the import of fish and fish products can fall under the open general license (OGL) or restricted items category. While frozen seafood falls under the OGL category, the import of live fish falls under the category of the restricted items for which the Director General of Foreign Trade (DGFT) issues licenses on the recommendation of the department of fisheries. The recommendation is made based on the proposal submitted by the importer and the risk analysis conducted by the department (DoF, 2020). Other fish products that fall under the OGL category require a sanitary import permit. Imports of fishery products are allowed through the airports and seaports of Bangalore, Hyderabad, Kochi, Delhi, Chennai, Kolkata, and Visakhapatnam (DoF, 2020).

4.6 Conclusion While appreciating India’s growth performance as well as its accomplishments in the international market, we also note that the sector faces several challenges, especially concerning the supply chain of fish. One major concern is the overexploitation of resources as a result of overfishing. Thus, ensuring sustainable fishing through regulations and proper implementation is the need of the hour. As far as exports are concerned, it is carried out primarily by fish processing units in the country which has a long supply chain. Inefficiency in any part of the supply chain is also a cause of concern for the country. In this context, it is worth noting that the exporting firms are often concerned with bureaucratic hassles and lack of good infrastructure (Rajeev, 2019). Developing proper infrastructure for fish landing and auctioning as well as transportation are other necessities to take care of if India wishes to play a major role in the export market.

References Bacchetta, M., Beverelli, C., Cadot, O., Fugazza, M., Grether, J. M., Helble, M., Nicita, A., & Piermartini, R. (2012). A practical guide to trade policy analysis. World Trade Organization. Department of Fisheries. (2018). Handbook of Fisheries Statistics 2018. Ministry of Fisheries, Animal Husbandry and Dairying, Government of India. http://dof.gov.in/sites/default/files/202008/HandbookonFS2018.pdf Department of Fisheries. (2020). Annual Report 2019–20. Ministry of Fisheries, Animal Husbandry and Dairying, Government of India. http://dof.gov.in/sites/default/files/2020-10/Annual_Report. pdf GoI. (2020). National Fisheries Policy 2020 Draft. Department of Fisheries, Government of India. Henson, S., Saqib, M., & Rajasenan, D. (2004). Impact of sanitary measures on exports of fishery products from India: The case of Kerala. Agriculture and Rural Development Discussion Paper, 17, Agriculture and Rural Development Department, World Bank.

References

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Kumar, G. B., Datta, K. K., & Joshi, P. K. (2010). Growth of fisheries and aquaculture sector in India: Needed policy directions for future. World Aquaculture, 41(3), 45–51. Madan, M. S., & Shyam, S. S. (2012). Trade barriers: Implications for Indian fisheries sector. In S. S. Shyam & R. Narayanakumar (Eds.), World trade agreement and Indian fisheries paradigms: A policy outlook (pp. 257–276). Central Marine Fisheries Research Institute. Marine Products Export Development Authority. (2018). Annual report 2017–18. Ministry of Commerce and Industry, Government of India. https://mpeda.gov.in/wp-content/uploads/2020/ 11/1550120514MPEDAAR201718.pdf National Fisheries Development Board. (2020). Annual Report FY 2019–20. Department of Fisheries, Ministry of Fisheries, Animal Husbandry & Dairying, Government of India. Rajeev, M. (2008). Fisheries trade in India: Understanding potentials and barriers. (NUPI Working Paper 741), Department of International Economics, Norwegian Institute of International Affairs. Rajeev, M. (2019). Fish processing sector in Kerala: Concerns and policies. Policy Brief 24, Institute for Social and Economic Change. Rajeev, M., & Bhandarkar, S. (2019). Traders in food value chain: Fisheries sector in India. Social and Economic Change Monographs, No. 62, Institute for Social and Economic Change. Ravikanth, L., & Kumar, K. K. (2015). Caught in the ‘net’: Fish consumption patterns of coastal regions in India. Working Paper 110, Madras School of Economics, 1–30. Renjini, K. K. (2016). Quantifying the effect of non-tariff measures and food safety standards on India’s fish and fishery products’ exports (ISEC Working Paper No. 375). Institute for Social and Economic Change. Salim, S. S. (2016). Fish consumption pattern in India, Exports—An overview. Food and Beverage News, India Foodex, 2016, 25–27. Srinivas, K. S. (2020). Message from Chairman. MPEDA. https://mpeda.gov.in/ UNCTAD. (2010). Non-tariff measures: Evidence from selected developing countries and future research agenda (p. 99). United Nations publication. UNCTAD. (2017). Fishing exports and economic development of least developed countries: Bangladesh, Cambodia, The Comoros, Mozambique, Myanmar and Uganda. UNCTAD, Geneva.

Chapter 5

Study Area and Methodology

5.1 Introduction To understand the structure of the supply chain, as mentioned above, we have carried out field surveys in various parts of the country. We visited different survey locales several times starting from 2017 till 2019. This chapter presents the methodology used for these surveys. We have captured the supply chain in two parts in the following chapters. In Chap. 6, we discuss the first part of the study, mapping the supply chain starting from the fishermen to the wholesalers. This part is based on the survey we carried out in Kochi, Kerala. The methodology followed for this part of the survey in Kochi is discussed in Sect. 5.2. To understand the supply chain for river and other freshwater fish products, we visited the state of Assam. The survey methodology followed for this is presented in Sect. 5.4. As locales of retailing are different from production, we have conducted a separate survey to identify and exhaustively classify various channels of fish distribution to the final consumers. Findings from this part of the survey are presented in Chap. 8, while the methodology followed is delineated in Sect. 5.3.

5.2 Methodology (Production to Wholesale) 5.2.1 Tools and Techniques Used • Primary survey through a structured questionnaire A primary survey was carried out in Ernakulam and Alappuzha districts in Kerala to collect first-hand information on specific parameters based on the objectives of the study. Various stakeholders in the supply chain such as fishermen and owners of the peripheral services were personally interviewed using different structured questionnaires. • Discussions (with open-ended questions) © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Rajeev and S. Bhandarkar, Unravelling Supply Chain Networks of Fisheries in India, SpringerBriefs in Economics, https://doi.org/10.1007/978-981-16-7603-1_5

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5 Study Area and Methodology

Discussions were carried out with key stakeholders, viz., trade union leaders, boat owners, association leaders, etc., on the structure of the supply chain and their key concerns. • Participant Observation Observations were keenly made while interviewing the respondents. The investigators’ impressions of their reactions during the investigation were also taken as part of the observation.

5.2.2 Study Area Fishermen: The study was conducted using a multi-stage sampling technique by first selecting two districts and then certain fishing villages through purposive sampling. For the primary survey, a list of fishing villages in Ernakulam and Alappuzha districts was taken from the Fisheries Census Report, 2010. A field survey was conducted in selected villages in both districts. Some of the villages covered during our survey are mentioned below. • Ernakulam district: Chellanam; Cherai; Edavanakad; Fort Kochi; Kandankadavu; Kuzhipally; Kannamaly; Malipuram; Manassery; Munambam; Njarakkal; Pallipuram; Pazhangad; Saudi • Alappuzha district: Azheekkal; Pallithode North; Pallithode South; Thaickal From the above-mentioned villages, households were selected randomly and surveyed. A total of 60 fishermen households were visited, and a structured questionnaire was administered. During our survey, we observed that most of the traditional fishermen in the sample areas were working as labourers in mechanised boats like trawlers, gill-netters, and purse seiners due to their proximity to large commercial fishing harbours and the port city of Kochi which is known for its exports of seafood. However, they were seen to use traditional boats like catamarans during the off-season. Other Stakeholders Ernakulam district has two of the largest fishing harbours in Kerala, namely Munambam and Thoppumpady. Intermediaries operating from these harbours were randomly chosen, and personal interviews were conducted using a questionnaire. In the case of merchants and boat owners, contact details were collected from their corresponding societies and cooperatives. Randomly selected merchants and boat owners were contacted and interviewed. We also held discussions with the boat owners’ association leaders. Since exporters and pre-processors are required to register at the Marine Products Export Development Authority (MPEDA), the contact details of exporters and pre-processors were accessed through the MPEDA database. The only problem faced while interviewing intermediaries was their reluctance to divulge information concerning the finances and revenues.

5.3 Methodology to Identify Retail Chains

63

5.3 Methodology to Identify Retail Chains While activities of production, auctioning of fish, and sale to the wholesaler take place at the landing centres near the shore, retailing activities take place through the retail markets away from the seashore area. Thus, this part of the survey was conducted in urban locations where retails outlets were present by interviewing the retailers and other related agents. To identify the emerging marketing channels of marine fish products, a primary study was conducted in Bangalore, Karnataka, and Ernakulam, Kerala. These two cities were considered to understand the differences between the marketing structure in a landlocked versus a coastal city. Supply chains of the marine fisheries are expected to be significantly different from those for inland fisheries. To capture these marketing channels, we have conducted field visits in regions that are known for river bodies. In particular, we have chosen Guwahati in Assam for the study of the supply chain of freshwater fish. We discuss below the locales of this part of the survey and the methodology followed.

5.3.1 Study Area 5.3.1.1

Kerala

The state of Kerala on the west coast has a coastline of 590 km with Alappuzha and Kannur having the maximum coastline of 82 km. The continental shelf area of the sea adjoining Kerala is 39,139 km2 , and this part of the sea is considered the most industrious and resource-rich portion of the Arabian Sea. The fishing industry in the state heavily contributes to the socio-economic development of the Kerala economy as it employs one million fishermen who inhabit 222 fishing villages along the coast. The marine fish production in Kerala totalled 0.414 million tonnes in 2017–18. (DoF, 2018). Locale of the Study To understand the retail channels within the state of Kerala, we carried out our survey in the capital city of Thiruvananthapuram. Thiruvananthapuram has seen a retail expansion in the last few years with a large number of malls and branded outlets opening in the city. Due to the presence of a large fish-eating population with a high per capita income and literacy rate, the capital city has an advantage in terms of leading a retail revolution.

64

5.3.1.2

5 Study Area and Methodology

Karnataka

The next state we have selected is the state of Karnataka, which lies on the west coast. The state has a coastline of 300 km with 144 fishing villages and 96 fish landing centres. The marine fish production in Karnataka totalled 0.414 million tonnes in 2017–18 (DoF, 2018). There are three coastal districts in the state, viz., Dakshina Kannada, Udupi, and Uttara Kannada. The major harbours in the state are Mangalore, Malpe, Karwar, Tadri, and Bhatkal. In particular, Mangalore and Malpe fishing harbours are found to be the major sources of marine fish production in the state as they contribute almost 60% to the total landings (CMFRI, 2016). Locale of the Study A primary survey was carried out in Bangalore City in Karnataka. Bangalore is a landlocked city, located in the heart of the Mysore Plateau at an average elevation of 920 m (3020 ft). The fifth largest city in the country and a prominent urban location, Bangalore is favoured by large international chains as well as domestic companies as their test market for investment. The thriving IT and BPO industry has created a young class of consumers with high disposable income who are inclined towards greater hygiene, quality, and choice of goods and are not opposed to spending more towards receiving these services. Additionally, Bangalore attracts a large proportion of the migrant population from within and outside the state which has led to increased demand for fish in the city. Due to the awareness about the health benefits of fish, the consumption of fish has increased to 40–50 tonnes of fish per day (Tara et al., 2011). An initial pilot survey revealed that Bangalore also has a variety of stores catering to and selling fish and fish products, enabling us to comprehensively cover all possible retail channels.

5.3.2 Tools and Techniques Used to Capture the Retail Supply Chain This part of the study was based on both primary and secondary data. For obtaining primary data, an interview schedule was prepared. As before, personal interviews were conducted to obtain primary data from the sample respondents. The interview schedule consisted of both open and close-ended questions. In the case of the multi-commodity supermarkets, officials in charge of the fisheries division were interviewed. For the selection of supermarkets, as there are only a few chains, one of the leading hypermarkets, namely Star Bazaar of Tata group, was purposively selected. Similarly, for the study of domestic wholesale markets, one of the most prominent wholesale markets for fish in Bengaluru, viz., Russell Market, was chosen for a detailed study. For multinational wholesalers since Metro Cash and Carry was the

5.3 Methodology to Identify Retail Chains

65

sole player in this segment, it was automatically chosen. As listing all the pavement shops selling fish in Bangalore is next to impossible for this category, the convenience sampling technique was adopted. For selecting the formal and informal stores that sell only fisheries items, certain localities were purposively selected and then one shop from the locality was randomly chosen. From the e-commerce segment, one of the prominent players, viz., Freshtohome, was selected and the relevant information was collected through their website. In the case of Kerala, primary surveys were conducted in Thiruvananthapuram and Kollam to identify the type of retail chains that prevail. A similar method as that of Karnataka was followed here as well. Along with surveying retail outlets owned by private individuals, earlier state-owned retail shops (Matsyafed) at certain locations were also visited to gather information.

5.4 Methodology for Fresh Water Fish Segment Assam is endowed with abundant fisheries resources and has more freshwater wetlands than any other state in the northeastern region. It is endowed with ample inland resources in the form of ponds, beels, reservoirs, etc., covering about 0.286 million ha. In addition, the two major river systems, viz., the Brahmaputra and the Barak covering about 4820 km along with 53 tributaries, are the main sources for river fish like Kurhi, Rohu, Puthi, Kawai, Goroi, etc. Inland fish production in the state was 0.327 MMT during 2017–18 (DoF, 2018)

5.4.1 Locale of the Study Based on several considerations, the capital city of Assam, viz., Guwahati, was selected for our study. Guwahati is the most prominent urban centre in the state making it possible to observe the supply chain in its entirety and study the different retail channels emerging here in recent times. The information on the supply chain of fish was collected from Lokhra bazaar where fishermen, traders, auctioneers, and peripheral workers were interviewed. Information regarding the different retail channels prevailing in the state was collected by visiting the Uzan bazaar and Paltan bazaar retail markets and interacting with the retailers (30 in number) present in these locations. Uzan bazaar is one of the oldest markets in Guwahati, located in the northern part of the city with the river Brahmaputra flowing alongside it. The NadiGhat market in Uzan bazaar witnesses transactions of large quantities of fish per day. Paltan bazaar is another market located in the central part of the city. This market is located near the hub of the transportation and hotel industry, increasing the footfall of customers to the market. There are almost 120 registered traders doing business in the market. We also interviewed officials of the Assam Apex Cooperative

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Fish Marketing and Processing Federation Ltd (FISHFED), an organisation funded by the state and engaged in fish marketing. The following chapters present the findings from our field survey. Chapter 6 maps out the supply chain starting from the producers to the wholesaler. This part of the study brings out certain interesting features about the supply chain showing, how, due to lack of access to capital by the actual producer (i.e., the fishermen/boat owners) a financier class emerges and becomes a prominent player in the form of a price making agent in the supply chain, while Chap. 7, with the help of NSSO data, highlights the working conditions of fishermen. Chapter 8 highlights the emerging and traditional channels that prevail in the market today and brings out an exhaustive classification of domestic retail channels in this sector, and Chap. 9 provides an overview of the processing sector and supply chain of exports of fish to present a complete picture.

References CMFRI. (2016). CMFRI annual report 2015–2016. Technical Report, Kochi. Department of Fisheries. (2018). Handbook of Fisheries Statistics 2018. Ministry of Fisheries, Animal Husbandry and Dairying, Government of India. http://dof.gov.in/sites/default/files/202008/HandbookonFS2018.pdf Tara, N., Kamat, S. S., Kumar, R., Pandharinath, D. P., & Srivatsan, B. (2011). Quality and hygienic fish marketing in Karnataka. tejas@iimb. https://tejas.iimb.ac.in/articles/81.php

Chapter 6

Supply Chain from Fishermen to Wholesaler

6.1 Introduction A fish supply chain constitutes a ‘set of interdependent fishermen, agents, processors, distributors, and wholesalers/retailers/food services, who work together to supply a fish-derived product to the consumer’ (Thorpe & Bennett, 2004). As fish is a highly perishable commodity, its supply chain needs to be extremely efficient to maintain the required quality of products. With increasing income levels, consumer consciousness is also improving. Therefore, it is important to understand the working of the fish supply chain and identify the bottlenecks present by analysing how various logistics and information flows take place within the chain. This helps recognise the activities and entities that do not add value and therefore need to be refined or eliminated. Despite traditionally being a marine fish-producing economy, India is one of the few countries that has also substantially exploited its inland fisheries potential (Sugunan, 1997). As marine fish needs to be caught from the sea with fishermen staying in fishing vessels for several days, its supply chain differs from freshwater fish. To comprehensively understand the supply chains of these two products, it is necessary to study them separately by visiting the respective locales. As mentioned above, this was accomplished by visiting Kerala, Karnataka as well as Assam (for freshwater fish). We begin with the marine fisheries supply chain, identifying the core and peripheral activities and respective players which brings to light certain interesting features. We observe that due to overfishing and the consequent lack of fish products available near the shore, one needs to venture out to the deep sea with the help of mechanised boats. With the cost of these boats being substantial, fishermen face a problem in obtaining capital. Subsequently, they are dependent on a financier who then plays a major role in the entire supply chain as the critical trader who has the first right on the produce. This financier is an important entity for the trade of inland fisheries as well. Important implications of these features are highlighted in this chapter. The next section presents an overview of the core stakeholders in the supply chain of marine fish and their role and functions, followed by peripheral activities such as loading, unloading, and the role of the peripheral agents (Sect. 6.3). © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Rajeev and S. Bhandarkar, Unravelling Supply Chain Networks of Fisheries in India, SpringerBriefs in Economics, https://doi.org/10.1007/978-981-16-7603-1_6

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Based on this discussion, Sect. 6.4 presents a schematic view of the entire supply chain followed by an overview of the value share in trade of the core agents. Thus, Sect. 6.5 shows the price transmission mechanism in this sector. Sections 6.6 and 6.7 highlight the supply chain of freshwater fish in Assam, concentrating on the fish that are produced within the state and those exported from other parts of the country. Section 6.8 concludes the topic. Costs and prices stated in this chapter are gathered at the time of the survey and hence are subject to upward revision over a period of time.

6.2 Supply Chain Players of Marine Fish Marine fish, also known as saltwater fish, are those that are found in the ocean water. As in the case of many developing countries, the supply chain of marine fish in India involves several stakeholders. The level of efficiency of operations of these different stakeholders determines the performance of the chain in terms of its smooth operation. While the number of participants involved in different supply chains varies in terms of the activities carried out, the produce involved, and the geographical location, the following intermediaries were found to be most commonly present in the supply chain of marine fish.

6.2.1 Producers As the marine products are caught from the sea, the primary producers are the fishermen who go out to sea in either their own boats or those outsourced to them. Fishermen constitute the largest number of actors in the fisheries supply chain. They can be divided into two broad groups depending on the kind of vessels they use for fishing.

6.2.1.1

Fishermen Using Mechanised Craft

There are different kinds of mechanised crafts that are used for marine fishing, the major ones being trawlers, gillnetters, or purse seiners. Trawlers are the most expensive, requiring heavy investment and hence beyond the reach of ordinary fishermen who work as wage labourers. The returns from a fishing trip are shared between the fishermen and the vessel owner, where the owner gets 30–40% of the net income, in addition to a percentage for the craft and gear. In the case of gillnetters and purse seiners, collective ownership was observed. However, on average, a trawler travels much longer distances, clocking about 35–45 nautical miles per fishing trip as compared to a purse seiner that travels for 25–35 nautical miles. As a result, a trawler is capable of fishing for high-yield varieties and a greater quantity of fish compared to purse seiners. This gives the fishermen

6.2 Supply Chain Players of Marine Fish

69

Table 6.1 Details of mechanised craft Distance travelled (nautical miles)

Yield per fishing trip (in Average monthly million Rs.) income of fisherman in a season (in Rs.)

Trawler

35–45

1.0–1.5

25,000–30,000

Gill netter/purse seiner

25–35

8–12

15,000–25,000

Source Primary survey; also see Rajeev and Bhandarkar (2019)

working in trawlers a higher income than those working in purse seiners, though working in trawlers entails harder and longer days of work. The income of fishermen varies between seasons as well, with a good season lasting for 5–6 months. Certain details of mechanised crafts are provided in Table 6.1.

6.2.1.2

Fishermen Using Motorised and Non-motorised Craft

Motorised and non-motorised craft are co-owned by fishermen. Though they are the owner of capital, their returns are often not very substantial. As they fish near the coastline, they get low-yield varieties of fish which does not have high market value. Due to this, they generally do not get any advance payment for their craft. This vulnerability makes them approach private money lenders to meet the initial expenses on fuel, motor repair, etc. These fishermen take a risk by doing so and eventually become indebted. The average monthly earnings of a fisherman using motorised and non-motorised craft is about Rs. 8000–10,000 as the fish catch is seasonal.

6.2.2 Boat Owners The major capital good in fish production is the fishing vessel. As more and more mechanised vessels are being used, the cost of capital has also gone up. Traditionally, the fishermen owned the boats used for fishing. With the price rise, they are not able to afford the capital and consequently a separate category of intermediaries, viz., the boat owners, has emerged as an important entity in the supply chain. Boat owners can be differentiated based on the type of boats owned.

6.2.2.1

Mechanised Boats

Mechanised craft such as trawlers, purse seiners, and gillnetters use mechanical power/devices not only for propulsion but also for catching fish.

70

(a)

6 Supply Chain from Fishermen to Wholesaler

Trawlers

As the name suggests, these are vessels designed to operate large trawl nets which are conical in shape. These nets are then towed through the water behind single or paired trawlers (Stephenson & Smedbol, 2001; Rajeev & Bhandarkar, 2019) along the bottom of the sea or in mid-water at a specified depth. A trawler can operate two or more double rig or multi rig trawl nets simultaneously (“Fishing Trawler,” 2021). A trawler can vary in size from a small open boat with only 30 horsepower to a large factory owned ship with 10,000 horsepower (“Fishing Trawler,” 2021). In Kerala, the most common trawler used is 22 m long with an engine power of 450– 600 horsepower. Trawl variants include beam trawls, large-opening mid-water trawls, and large bottom trawls. As the trawlers sweep the sea, the environmental damage caused by trawlers is a concern. For example, the ‘rockhoppers’ owing to their large bottoms are considered an environmental hazard. Rockhoppers have heavy rubber wheels that let the net crawl over the rocky bottom of the sea (“Fishing Trawler,” 2021). The effect is similar to ploughing a field—taking out all the plants from their roots- and destroys a large part of the marine life.

22-m trawler at Munambam fishing harbour, Ernakulam

However, trawlers are still considered an efficient mode as the yield and value of the catch from trawler fishing is considerably higher. They can travel to deep-sea areas, with a trawler boat from Kerala travelling up to 40–45 nautical miles on an average.

6.2 Supply Chain Players of Marine Fish

(b)

71

Purse Seiners

These vessels use purse seiner nets for fishing where the top of the net floats on the ocean surface, while the bottom of the net is pulled down with the help of weights. A wire threaded through the bottom of the net ensures that the net tightens when pulled, trapping the fish inside (Australian Fisheries Management Authority, n.d.). Purse seine method of fishing is highly selective and considered more environmentally friendly, targeting one species of fish at a time- usually sardines, mackerel, anchovies, salmon, and certain varieties of tuna which aggregate close to the surface thereby reducing the amount of bycatch (“Seine Fishing,” 2021; Rajeev & Bhandarkar, 2019).

Purse seiners on a fishing trip from Thoppumpady harbour, Kochi

The fish caught using a purse seiner is mostly average yield species with certain high-value yields like tuna occasionally caught using this method. As expected, the total value of the yield using a purse seiner is comparatively lower than while using a trawler. A purse seiner operating from Kerala, on average, goes up to 30–35 nautical miles. (c)

Gillnetters

As the name suggests, these are boats that deploy gill nets which are a “series of panels of meshes with weighted ‘foot rope’ along the bottom and a headline to which floats are attached” (“Gillnetting,” 2021; Rajeev & Bhandarkar, 2019). The buoyancy of the net can be adjusted by changing the ratio of floats to weights, allowing one to fish at varying depths in the water column. A gill net’s meshes are of uniform size and shape and only those fish that are smaller than the mesh of the net pass through unhindered, while the relatively larger ones that are too large to push their heads through the meshes are prevented from escaping (“Gillnetting,” 2021).

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Gillnetter near Thoppumpady harbour, Kochi

Gillnetters are utilized to catch small pelagic fish such as sardines, as well as larger pelagic species such as tuna, salmon, and squid. However, species that are not targeted, such as marine mammals and seabirds, and to a lesser extent, turtles are also caught as bycatch in this method of fishing (“Gillnetting,” 2021). The value of the yield using gillnetters is the same as that of purse seiners, the only difference being that the gillnetters are capable of catching specific target fish. Gillnetters operating from Kerala travel for 25–35 nautical miles.

6.2.2.2

Cost of Operation and Ownership Patterns

As mentioned above, the initial capital expense for a mechanised craft is high and its price varies from Rs. 3.0 to 4.5 million. To gain a better understanding, we present below the types of mechanised crafts operating from the fishing harbours in Ernakulam, Kerala, together with their costs, type of net used, and distance travelled per fishing trip (see Table 6.2). This provides us with a comparative picture. As observed from Table 6.2, the amount of capital required is quite high for mechanised vessels making it difficult for the fishermen to make such investments. Avenues to get credit are also limited perhaps due to lack of collateral. This opened up channels for traders/businessmen interested in this business to invest in the sector and employ fishermen as workers. Boat owners of trawlers work with fishermen on a sharing basis. The net income is shared between boat owners and fishermen in the ratio 60:40. The longevity of the relationship between them is not definite and only based on informal understanding. Some differences are observed in the ownership patterns of gillnetters and purse seiners which require less capital compared to trawlers. The ownership at times is seen to be collective, with the craft owned by a group of fishermen (shareholders) who

6.2 Supply Chain Players of Marine Fish

73

Table 6.2 Particulars of mechanised craft used by fishermen Type of craft

No. of craft operating from Ernakulam

Cost of craft (in million rupees)

Net used

Distance travelled per fishing trip (in nautical miles)

Trawler (22 m long)

1020

3.0–4.5

Trawl net

35–45

403

2.0–2.5

Gillnet (450 mm net)

20–35

60

2.0–3.0

Purse seine net

25–35

Gillnetter Purse seiner

Source Primary survey; also see Rajeev and Bhandarkar (2019)

also are actively engaged in fishing. The investment by individual members of the group to the unit is not always equal. The distribution of earnings to the shareholders (returns to capital) from the catch is per the respective capital share. Operating Cost Each fishing trip using a mechanised craft takes an average of 3–5 days. The boat owner or the financier (who finances the purchase of the vessel at least partly) bears the operating costs, i.e. costs involved in fishing trips which include fuel costs (usually diesel), cost of ice, the maintenance cost of the boat, etc. Repairs of the net are mostly done by the fishermen themselves who work for a daily ‘bata’ (wage) of Rs. 350. Tables 6.3 and 6.4 shows the average cost involved per fishing trip for a trawler and gillnetter/purse seiner respectively. Table 6.3 Cost of operation for a multi-day trawler per fishing trip Fuel Ice

Amount (in litres)

Cost per litre (in rupees)

Total cost (in rupees)

2000–2400

55–60a

1,00,000–1,40,000

No. of ice blocks used

Cost per ice block (in rupees)

Total cost (in rupees)

100–120

70

7000–8400

Source Primary survey; also see Rajeev and Bhandarkar (2019) a At the time of survey

Table 6.4 Cost of operation for a multi-day gillnetter/purse seiner per fishing trip Fuel Ice

Amount (in litres)

Cost per unit (in rupees)

Total cost (in rupees)

1000–1200

55–60

60,000–75,000

No. of ice blocks used

Cost per ice block (in rupees)

Total cost (in rupees)

70–100

70

5000–7000

Net repair

No. of persons

Wage per person per day (in rupees)

Total cost (in rupees)

10–15

350

3500–5000

Source Primary survey; also see Rajeev and Bhandarkar (2019)

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6 Supply Chain from Fishermen to Wholesaler

The average total cost of the operation of a multi-day trawler per fishing trip (as reported by our respondents) is around 0.13 million rupees, and that of a multi-day gill netter/purse seiner is about 0.08 million rupees. Thus, it can be seen that not only is fixed capital expensive, but the working capital cost is also high. This has certain implications for the supply chain. The high cost of operation makes boat owners financially dependent on another important entity in the supply chain, viz., the auctioneer or ‘tharakan’. The auctioneer himself may have enough funds to advance to the boat owner for a trip, or he can be an appointee of the financier (who also advanced loan to the boat owners for fixed capital). By providing finance for a fishing trip, the auctioneer reserves the right to auction the fish at the landing centres. Thus, the capital owner plays the role of a significant trader in the supply chain and plays a major role in price determination as well.

6.2.2.3

Motorised and Non-motorised Boat Owners

The motorised and non-motorised boats are relatively smaller in size and use a crew of about 7–15 individuals. These boats are capable of fishing at a maximum distance of 10–15 nautical miles from the coast. Motorised boats are mostly traditional crafts like catamarans fitted with outboard motors. The cost of outboard motors varies according to the power of the motor. The most commonly used 45 hp outboard motor costs about 0.2–0.25 million (see Table 6.5). The ownership was observed to be collective among fishermen belonging to the same locality or one among friends. The share of each individual is not always equal, and the profit is divided among them based on the invested capital share that each individual holds. Net repairs are done by the fishermen themselves, and it does not involve any extra cost. The normal life of a net used in a motorised or non-motorised boat is about 5–8 years, but it depends upon the usage, quality of the net, and the repairs done. Motorised and non-motorised crafts are usually used by fishermen to earn a subsidiary income during the off season, while during peak season they are engaged in a mechanised vessel. Only a few fishermen use motorised and non-motorised crafts for fishing as their primary activity. Table 6.5 Cost of operations of non-motorised and motorised craft Type of boat

Cost of boat (in million rupees)

Cost of motor (in million rupees)

Type of net

Non-motorised

0.25 onwards

–

Monofilament

Motorised

0.25 onwards

0.2–0.35

Monofilament and HDPE

Source Primary survey; also see Rajeev and Bhandarkar (2019)

6.2 Supply Chain Players of Marine Fish

75

6.2.3 Financial Power in the Supply Chain The financier is the key entity in the supply chain, given the increasing cost of motorised boats and the fishermen having limited resources. Even the boat owners often get credit from the financier (capital owner). Owing to the increasing fuel costs, the producers, viz., the fisher, as well as the boat owner, need to depend on the financier for working capital as well, including costs of diesel, food, ice, repair costs, etc. As a result, the financier often claims the first right on landed fish. He subsequently auctions the fish himself or through one of his employees. In other words, this financier cum auctioneer/buying and selling agent (called ‘tharakan’ in the local language) pays an advance to the boat owner for the fixed and working capital and reserves the right to auction the fish caught at the landing centre. The advance payment varies from Rs. 0.3 million to Rs. 1 million depending upon the size of the boat. The longevity of the arrangement between the auctioneer and boat owner also varies, but the minimum time was found to be for a month. If the agent has financed the boat, then the relationship is expected to be long term. There is no written legal agreement but a mutual and oral understanding between the two parties, which seems to operate well. An auctioneer usually has two or three helpers who arrange the fish at the auction house as per quality (informal grading) and conduct the auctioning process. Thus, the financier cum auctioneer plays a prominent role as a price-determining agent. The workers that work in the auction space earn daily wages ranging from Rs. 300 to 350 per day. At times, the financier cum auctioneer borrows from the formal banks and provides the advances (as mentioned above) to the boat owners or fisher to earn a higher return. The auctioneer has better access to formal credit in the form of business loans from banks, with the interest rate on the business loans ranging from 12 to 16% (at the time of survey during 2018–19). After the fish is auctioned at the auction yard to a merchant, a part of the proceeds goes to the auctioneer. The share of the auctioneer for high-yield varieties of fish varies between 12 and 15% of the total auction proceeds. The business between an auctioneer and merchant for high-yield varieties of fish is for a long-term basis, and the financial settlement between the two is mostly done on a weekly or monthly basis. The share of the auctioneer also varies according to the method of payment. Spot payment entails a greater share for the auctioneer and weekly settlement earns him a lower share. Normally, the auctioneer charges 13% for spot payment and 10% for later payment. The auctioneer enjoys the final say over the discount rate or ‘Lelakkizhivu’, a practice that exists in the harbours and fish landing centres in Kerala for the last 25 years. The discount is provided to adjust for the discrepancies in weights as prices are fixed based on visual observation during auctioning. The discounts are deducted from the auction proceeds. Since the auctioneer acts as a mediator between the fishermen/boat owner and the merchants who purchase the fish after the auction, he has to settle upon a discount rate that is acceptable to both parties. Since the

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auctioneer is paid by the merchant and on the other hand he provides funds to the boat owner, our survey reveals that the rate of discount mostly swings in favour of the merchants. The discount rate usually varies between 10 and 15%.

6.2.4 Merchants/Company Agents/Wholesalers Traders or merchants visit the auction centres to purchase products and in turn supply them to the next set of traders or processors. Large merchants who purchase in bulk visit the auction to buy fish which they subsequently supply to large buyers. Usually, the fish-processing firms do not depend on merchants but have their own designated agents who procure fish from the auctioneer. These procurement agents employed by large corporate businesses or export agencies usually arrive at an understanding with the auctioneers on the varieties of fish required for the company which the auctioneer then supplies as per their demand. Our survey reveals that on average, the agents get a commission of 5% of the total auction amount from the company. Some wholesalers also participate in the auction and purchase fish in bulk to resell to the retailers who in turn sell to the final consumers. These traders make certain value additions in terms of sorting, grading, cleaning, icing, and packing of fish before sale. These activities involve certain costs and other peripheral intermediaries. These costs include: (a) (b) (c) (d)

Cost of ice, which is fixed at Rs. 90 per block of crushed ice. Involve ice producers. Loading and unloading charges are fixed by the loading and unloading trade unions at 2% of the actual auction amount. Involve loading agents. Transportation costs. Involve the entire transport service network. Wages to helpers—Some helpers work for daily wages of Rs. 450 per day at the auction centre. They help the merchants by separating fish varieties into different boxes and putting crushed ice into them.

6.2.5 The Evolving Market Structure As mentioned above, the financier cum auctioneer plays the most important role as a price maker. During our survey, many respondents (fishermen and boat owners) opined that auctioneers collude with the merchants and indulge in price fixation during the auction. The highly informal and oligopolistic character of the fishery business makes it easier for the auctioneers and merchants to operate as a cartel. Many of our respondents opined that owing to their long-term relations, auctioneers and merchants share an informal understanding regarding the prices of high- and medium-yield varieties which are fixed before the auction. At times, when fishermen feel that auctions are rigged, open fights break out between fishermen and auctioneers at the auction centres. The boat owners ironically do not have much say in the auction,

6.2 Supply Chain Players of Marine Fish

77

and the fishermen who are the main producers end up as the ultimate losers in the process. As already indicated, apart from these major players directly involved in production and marketing, there are several peripheral agents involved in the supply chain.

6.3 Peripheral Activities and the Agents Involved 6.3.1 Ice Providers As fish is a highly perishable commodity, its preservation is essential and products are packed in boxes with ice to avoid degradation. Ice providers, therefore, play an important role in the supply chain. Ice plants are located inside the harbour compounds. A total of 12 and 26 ice plants are functioning at Kochi, Thoppumpady, and Munambam harbours, respectively. A total of 76 ice plants are functioning from Munambam–Vypeen area, which is the fishing hub of central Kerala. The production capacity of these ice plants depends on the size of the firm and its machinery. In our study area, a small firm with low levels of fixed assets produced, on average, around 150 blocks per day, while a large set-up produced up to 500 blocks per day. As far as the cost of capital is concerned, a 1.5 tonne machine capable of producing 60 blocks of ice at once costs about Rs. 0.55 million and a 10 tonne machine capable of producing 400 blocks of ice at once costs around Rs. 1.4 million (Table 6.6). The ice plants also employ workers as helpers and operators for the machinery. During our survey, an operator was seen to be paid Rs. 11,000 per month and the helper around Rs. 9000 per month. The ice is sold for Rs. 70 per block. As the preservation of fish starts as soon as it is harvested, all agents across the supply chain, starting from the boat owners, merchants, processing houses to retailers procure ice and make monthly payments for the same. Table 6.6 Particulars of ice machines in operation (production capacities and costs are approximate) Type of machine 1.5 tonne

Production capacity (number of blocks of ice) 60

Cost of machine (in million Rs.) 0.55

6 tonne

240

1.05

10 tonne

400

1.4

Source Primary survey; also see Rajeev and Bhandarkar (2019)

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6 Supply Chain from Fishermen to Wholesaler

Table 6.7 Cost of transportation (approximate) Domestic trips (rupees per tonne)

Outside state—national permit (rupees per tonne)

Pickup

350–400

–

Trucks (multi-axle)

450–500

–

Trucks (multi-axle with refrigeration)

550–600

500–650

Source Primary survey; also see Rajeev and Bhandarkar (2019)

6.3.2 Loading and Unloading Workers Product loading and unloading is an important work in this business. In Kerala, we observed a strong presence of workers’ unions for the loading and unloading workers. Only those individuals who have a membership in the unions can work at the harbours. The wages for these workers are also fixed by the unions at 2% of the total auction amount. Half of the charge is paid by the auctioneer or tharakan, and the other half is paid by the merchant or buyer of the produce. The 2% share is equally divided among the workers involved in the loading/unloading of a consignment.

6.3.3 Transporters Transporting of fish is carried out by the transport agencies. These are operators based at harbours and fish landing centres. Merchants and wholesalers who buy the fish hire these operators to transport fish to domestic markets or processing houses within and across the state. In the case of road travel, the agents hire trucks to transport the produce. The charges for shipment vary according to the size of the truck, facilities in the truck, and the location of delivery. Produce is usually sent in trucks in insulated boxes that maintain a temperature of 0–10 degrees Celsius or in trucks that are temperature controlled. A truck usually carries 130–150 boxes of fish during full container load with each box containing 30 kg ice and 40 kg fish. For longer distances, the agent loads it onto the train and another agent at the destination station unloads it and transports it via trucks to the market. Approximate costs of transportation are provided in Table 6.7.

6.3.4 Net Manufacturers During our survey, it was seen that in the state of Kerala, there are about 70 net manufacturing factories. As is clear from the above discussion, there are different methods of fishing depending on the type of vessels; accordingly, there are different

6.4 Supply Chain: A Schematic View

79

Table 6.8 Selling price of nylon monofilament fishing nets (rupees per kilogram) Mesh size (mm) Twine size (mm) 0.16DK 0.16SK 0.20 0.23 0.28 0.32 0.40 0.45 0.50 and above 15–20

815

710

660

610

605

595

530

530

530

21–26

805

680

655

595

580

590

520

520

520

27–30

760

670

645

580

570

580

490

490

490

31–35

725

640

640

585

560

570

480

480

480

36–41

715

625

620

555

550

550

470

470

470

42–50

710

610

620

545

540

540

465

465

465

51–60

700

590

615

525

505

515

435

435

435

61–70

680

580

590

515

505

515

435

435

435

71–80

680

580

590

510

495

505

430

430

430

81–90

675

580

555

505

485

465

425

425

425

91–100

675

580

555

505

485

465

425

425

425

101 and above

675

580

555

505

475

455

410

410

410

Source Matsyafed Net Factory, Kochi; also see Rajeev and Bhandarkar (2019)

types of nets used in fishing activities. Thus, these enterprises produce nets of various kinds ranging from trawling nets and purse seine nets to cage nets. Most of the nets are made out of nylon material and its different variants, like monofilament, multifilament, or high-density polyethylene (HDPE). The weight of the net varies from 35 to 170 kg. In this context, one new development is the import of Chinese nets to the Indian market. These nets are sold at a lower price and hence give tough competition to the Indian manufacturers. However, our respondents indicated that the Chinese nets were of lower quality compared to the Indian ones. The state-owned net factory, Matsyafed Nylon Net Factory, has 26 machines and 60 employees. Even though the factory is state-owned, there is no subsidy on prices to prevent compromise on quality. The prices at which Matsyafed nets are sold are given in Table 6.8.

6.4 Supply Chain: A Schematic View We present below a schematic view of the supply chain (Fig. 6.1) discussed in detail above. The diagram is self-explanatory.

80

6 Supply Chain from Fishermen to Wholesaler

Boat Owners

Motorised and Non Motorised CraŌ

Mechanised CraŌ

Fishermen

Net Manufacturers /Ice Providers

Financier cum AucƟoneer

Merchants/ Company Agents/ Wholesalers

Loading and Unloading workers, Ice providers and Transporters play a peripheral role

Retailers/ Vendors

Final Consumers

Fig. 6.1 Schematic view of the marine fish supply chain. Source Authors’ construction; see also Rajeev and Bhandarkar (2019)

6.5 Share of Different Agents in the Value Chain

81

6.5 Share of Different Agents in the Value Chain While the supply chain analysis provides us with the knowledge of how the entire supply is organised together with the stakeholders involved, it is also necessary to understand the share of the major entities in the chain in the final value of the product. Based on our survey in the state of Kerala, we arrive at certain estimates. Suppose a fish is procured by the final consumer in the domestic retail market at Rs. 100, fishermen and boat owners together receive a share of around Rs. 40–44 (i.e. around 40–44%). These proceeds are shared among the boat owner and fishermen, in most cases in a 60:40 ratio. As there is a minimum of 10 fishermen in a boat, the share per person can be derived by diving the proceeds equally. This also indicates that the share of the fishermen is quite low. The financier cum auctioneer, who often advances funds to the boat owner, reserves the right to auction the fish and, in turn, gets a share of about Rs. 10 (10%). He also determines the price to a great extent. The merchant/wholesaler who does the necessary value addition (by cleaning, grading, transporting) and sells the fish to the retailers gets a share of about Rs. 18–22. From our survey, it is revealed that the retailer/supermarket takes the maximum share, of about Rs. 30–35.

6.6 Moving from Marine to Freshwater Products For the freshwater fish, since one does not need heavy vessels like trawlers, the supply chain displays certain differences from its marine counterpart. Freshwater fish are those that reside in freshwater sources such as rivers or lakes that have a salinity of less than 0.05%. 41.24% of all known species of fish are found in freshwater. Assam being one of the important states that produce freshwater fish due to the presence of the mighty Brahmaputra river and its tributaries, we carried out our survey in the state of Assam. However, we observed that despite Assam having more freshwater bodies than any other state in the north-east, the state is not self-sufficient in fish production. Due to the demand for fish in the state being higher than the production, the deficit is met by other states such as Andhra Pradesh, Madhya Pradesh, and Bihar. In 2015–16, demand for fish was 0.331 million tonnes, while the state’s production was 0.297 million tonnes with 0.017 million tonnes being imported from other states. There was still a deficit of 0.034 million tonnes that was not met (www.fisheries.assam. gov.in). Therefore, there are two different chains of procurement within the state;one for the fish caught from large water bodies within the state and the other for fish imported from outside the state (some of which are produced through aquaculture). In Assam, Guwahati is the major city and the River Brahmaputra flows through the city. Due to its large population, Guwahati is one of the leading consumers of freshwater fish as well as the main landing centre in the state. It has relatively better infrastructure facilities such as ice plants for storage, drainage systems, and permanent sheds in the main landing centres. All fish produce—both local and those that are

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bought in from other states—are sorted in Guwahati, and then, further channels lead to distribution into other cities. The main players in the supply chain of freshwater fish are highlighted below.

6.6.1 Supply Chain for Fish Caught from Large Water Bodies Within the State 6.6.1.1

Contractor

During our survey in Assam, we observed that the river water harvesting of fish is done based on a contract system. The rivers are divided into different blocks based on geographical areas and then auctioned to a particular contractor. The fishing rights lie with the contractor for approximately one year. The contractor in turn appoints a person known as ‘mahaldar’ based on a monetary agreement to take care of the business.

6.6.1.2

Mahaldar

The mahaldar has direct contact with the fishermen and manages the fishing operation in a particular block by taking care of the fish from the landing centre to the auction market. There are several landing centres in the city itself as the river Brahmaputra flows through the city of Guwahati. This fish in turn is bought by various sellers who take it into the city markets to be sold there. The mahaldar acts as a liaison between the producers and the sellers, negotiates the prices, and is answerable to the sellers about the quality of the fish.

6.6.1.3

Van Owner

Once the sellers purchase the fish from the mahaldar at the landing centre, it is transported by using a van that holds up to 25 passengers. The van picks up the sellers from the place of the auction and then drops them off at different marketing locations. The van owner is thus an important linkage in the entire supply chain. The fish sellers pay Rs. 115 as commuting charges to the van owner. This arrangement is on a contract basis, wherein the sellers need to pay the pre-decided amount even if he does not make use of the vehicle service on a particular day. They are all then brought back together to the original location at the end of the day between 3.00 and 4.00 pm.

6.6 Moving from Marine to Freshwater Products

6.6.1.4

83

Fish Sellers

In some cases, there may be another intermediary, viz., a wholesaler purchasing from the mahaldar and subsequently selling to the retailer. However, in most cases, the retailers themselves purchase from the mahaldar to subsequently carry out their retail business. Thus, the supply chain for the freshwater fish appears to be a little shorter. The retailers can be pavement sellers, operate at an informal marketplace, or carry out their business in a market owned by the city municipality. They need to pay certain charges to the municipality for the space and service they use. If the fishermen do not sell all their produce during the day, they sell the remaining stock to the local sellers instead of missing the van back to their resident place. The local sellers sell on the pavement or door to door. Since each of the sellers brings fish from different sources, the quality and type of fish they sell differ. Each seller listens to the price quoted by others and adjusts his price accordingly. Despite this, the prices quoted by each seller differ even for the same type of fish. For example, a seller who buys 1 kg of fish from the landing centre for Rs. 80 usually sells it for around Rs. 150 in the city during morning hours and at a reduced price of around Rs. 100 after 2 pm. Some of these sellers also bring along their bicycles in the van and then sell their produce from door to door instead of trading in the marketplace.

6.6.1.5

Female Fish Sellers

In Assam, women workers are the minority in the aquaculture and fisheries sectors. Women seldom procure their fish directly from landing centres where they have to participate in daily auctions of the catch or deal with the mahaldars directly. Instead, the women vendors buy from these male retailers to resell in certain markets. Since they purchase their share of fish from retailers and not directly from the landing centre, the cost incurred by the lady seller is high and the profit margin is low. Due to this, they buy a relatively larger quantity of fish at one go, unlike their male counterparts who purchase just enough for sale on a particular day. Any unsold fish is stored at home in ice and sold the next day. This ice slab costs Rs. 40 per slab which is sufficient for four trays of fish. Women vendors also ensure value addition by carrying out species-wise sorting, size-grading, cleaning, and ice storage of the harvested fish. Women in Assam are not generally engaged in door-to-door marketing of fish. As far as value share is concerned, a woman seller who usually purchases 1 kg of fish for Rs. 130 sells it for Rs. 160 in the marketplace (at a cost price margin of 23–25%). At times, it was observed that other members of her family, such as children who are on holiday from schools, assisted her in sales.

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6.7 Supply Chain of Fresh Fish or Aquaculture Products from Outside the State As the local demand exceeds supply, the state of Assam procures fisheries products from other states. Indian major carps constitute the major portion of the (domestically) imported fish available in the market followed by catfish and other miscellaneous varieties. Among the Indian major carps, rohu, catla, and mrigal are the important species available in the market. Due to the ever-increasing demand for fish, the quantity of fish procured from other states has been on the rise. The state has well-organised wholesale markets, one of them being the Lokhra fish market where we conducted our survey. Andhra Pradesh is one state from where a major portion of fish is procured. Fish consignments are transported by trucks in insulated temperature-controlled boxes packed in ice that reach the landing centre in Lokhra bazaar in the evening or night. Unloading is done by labourers hired particularly for this purpose. Many of these labourers are migrants from the neighbouring state of Bihar and get paid at a piece rate of around Rs. 15 per 40 kg of fish unloaded. The unloaded fish is then auctioned by the auctioneer early every morning till around 10 am every day except on Sundays when the market is closed. The highest bidder has the first right, and the rest is auctioned off again. Fish then goes to various markets across the city. A truck driver who transports the fish from other states receives information about where he can get the best price for the produce through mobile phone calls and delivers it to that centre for the best return. To ensure that they receive the required quantity of products from other states, some sellers enter into a fix price contract with either a producer or a transport company. This, however, is not practised very often. Agents from the company are present at the auction to collect their dues from the proceeds of the sale. They either take cash or in recent times have started accepting deposits into their bank accounts. The auctioneer in turn, takes a commission of 3–6% from the proceeds for his services. The supply chain discussed so far concerns the activities of the producers, wholesalers, and peripheral players in the chain. The products thereafter go from the wholesaler to the retailers to finally reach the consumers through various retail channels. The retail marketing channels focus on the downstream supply chain that concerns the consumers. Thus, the domestic marketing landscape can be divided into wholesale and retail channels which constitute the final stage of the supply chain. The wholesale and retail landscape in India are rapidly changing since the opportunity to capture the market share from traditional businesses exists in this area. With the advent of technology, new avenues are also unfolding. To understand the changing structure of domestic marketing, we go in depth into the various wholesale and retail chains that exist with the help of a field survey. The findings from our study are highlighted in the next chapter.

6.8 Conclusion

85

6.8 Conclusion This chapter portrays the supply chain of marine and inland fisheries in India using the findings from our field survey. We discuss all the stakeholders and agents involved in the supply chain, beginning from fishermen to auctioneers to the wholesalers. The retailing business has undergone drastic changes in India since globalisation. Various sophisticated retailing businesses have emerged in this segment, and these are discussed in the next chapter. Despite its emerging sophistication, there are several concerns regarding this industry. The supply chain of fisheries is still unregulated in India. The lack of traceability was a significant concern that has led to unregulated and even illegal fishing in the country. Since there is no information collected on where the fish comes from, all information about the method of capture and area of production is lost. Converging fish from different vessels into the auctioning process makes it very difficult to trace the fish back to its origin. This not only hinders the implementation of regulations to promote the sustainability of fish but also leads to problems concerning quality and hygiene. At the auction, since different species of fish are put together from different sources, the presence of disease-causing bacteria present in one batch of fish may lead to cross-contamination of the entire produce being auctioned. Lack of traceability makes it harder to detect the source of contamination to mitigate its effects. The supply chain of fisheries in the country is further plagued with problems related to infrastructure. While the fish landing centre at Kochi port was relatively well developed in terms of concrete flooring and the presence of auction facilities, ice factories, net manufacturers, and storage facilities within the harbour premises, most landing centres still require extensive investment in infrastructure. Most landing centres still have a sand surface, are unhygienic, and lack basic storage and grading facilities. There is also a lack of understanding about the need for cold storage systems within the chain. The lack of good quality ice and insulated trucks often leads to a large percentage of the produce deteriorating in transit. The mapping of the fisheries supply chain also indicates that the fishermen are not organised and do not have much bargaining power. The presence of a large number of intermediaries in the business further reduces the share of the fishermen in the consumer’s rupee. Even a rise in the selling price of the fish is absorbed by the intermediaries and not passed down to the fishermen due to the lack of information flows within the chain. As a considerable part of fisheries products are exported, it is all the more important to ensure that the best hygienic practices are followed by all agents involved by developing appropriate infrastructure. Such measures should start from the time a fish is caught. Given the fact that the fishermen are not well educated, proper training is required to inculcate the best practices among all the stakeholders.

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References Australian Fisheries Management Authority. (n.d.). Purse Seine. Australian Government. Retrieved December 7, 2021 from https://www.afma.gov.au/fisheries-management/methods-and-gear/ purse-seine. Fishing Trawler. (2021, December 7). In Wikipedia. https://en.wikipedia.org/wiki/Fishing_trawler. Gillnetting. (2021, December 7). In Wikipedia. https://en.wikipedia.org/wiki/Gillnetting. Rajeev, M., & Bhandarkar, S. (2019). Traders in food value chain: Fisheries sector in India. Social and Economic Change Monographs, No. 62, Institute for Social and Economic Change. Seine Fishing. (2021, December 7). In Wikipedia. https://en.wikipedia.org/wiki/Seine_fishing. Stephenson, R.L., & Smedbol, R.K. (2001). Small Pelagic Species Fisheries. In J. H. Steele, S. A. Thorpe, & K. K. Turekian (Eds.), Encyclopedia of Ocean Sciences (pp. 468–473). Academic Press. Sugunan, V. V. (1997). Fisheries management of small water bodies in seven countries in Africa, Asia and Latin America. FAO Fisheries Circular, No. 933 FIRI/C933, Food and Agriculture Organisation of The United Nations. Thorpe, A., & Bennett, E. (2004). Market-driven international fish supply chains: The case of Nile perch from Africa’s lake Victoria. International Food and Agribusiness Management Review, 7(4), 40–57.

Chapter 7

Fishermen in the Supply Chain: Challenges Faced from a Decent Work Perspective

7.1 Introduction There are millions of fishermen and their families in the southern, eastern, and western coasts of the country who are living a hand-to-mouth existence (Sawaikar, 2017). As seen in Chap. 6, our primary survey revealed that it is the fishermen who get the least value share of the rupee, while the middlemen, retailers, and wholesalers take a large part of the pie, indicating that downstream actors reaped a higher proportion of the product value. To supplement our findings from the primary survey, we are fortunate to get some data from the National Sample Survey Organization (NSSO) which we collated for further analysis. In this chapter, we provide an analysis to show clearly the working conditions of the fishermen and how the percentage of income they earn from the fisheries sector is not adequate to keep them above the poverty line. Since this data is at the all-India level, the results provide a macro-picture.1 To address concerns about the working conditions of labour, the International Labour Organization (ILO) put forth the concept of decent work. Decent work is defined as ‘productive work under conditions of freedom, equity, security, and dignity, in which rights are protected and adequate remuneration and social coverage are provided’ (ILO, 1999). In the 2015 UN General Assembly, decent work and its four pillars—employment creation, social protection, rights at work, and social dialogue—were added as integral elements of the 2030 Sustainable Development Goals.2 The increasing importance given to decent work is the result of rising levels of labour exploitation, especially in developing countries. This is particularly true in the third world for those working in the informal sector. Hazardous and substandard working conditions, as well as a shortage of basic amenities like drinking water and sanitation, are all too prevalent. The fisheries sector, with its seasonal nature and 1

Some parts of the findings in this chapter are presented from Rajeev and Nagendran (2018). Decency of Primary Occupations in the Indian Fishing Industry, ICDD Working Paper No. 21. 2 https://www.ilo.org/global/topics/decent-work/lang--en/index.htm. © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Rajeev and S. Bhandarkar, Unravelling Supply Chain Networks of Fisheries in India, SpringerBriefs in Economics, https://doi.org/10.1007/978-981-16-7603-1_7

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fishermen’s need to go to the deep sea for days together giving rise to hazardous job conditions and lack of adequate compensation, is a good example of this. In the Indian fisheries sector, the depletion of produce near the coastline along with the simultaneous increase in the demand for fish has compelled an increase in the yield through greater fishing effort. However, a major increase in fishing effort necessitates a transition from conventional to more industrialised fishing methods. As already mentioned, this requires the use of large trawlers and other costly machinery which small-scale fishermen cannot afford. Furthermore, the transition to mechanisation frequently reduces the amount of fish available to subsistence fishermen, lowering their yields. Due to this, fishermen are forced to shift from independent fishing to seeking work on industrial shipping vessels. They lose bargaining power as they move from artisanal production to capitalistic jobs, where they only receive a small share of the benefit. As a result, there are imbalances between workers and employers, resulting in less-than-ideal working conditions. These issues, along with the ones identified during our primary survey (see Chap. 6), necessitate an investigation into the work conditions in the fishery sector. While employment in the fishery sector is classified by NSSO as primary, secondary, and tertiary workers, we will mainly concentrate on the primary fishing industry. Self-employed fishermen, who are mostly subsistence fishermen running their traditional craft, and labourers who work on mechanised craft to catch fish are part of this group. In the following sections, we, therefore, utilise data from the 68th round of the National Sample Survey Organization (NSSO) to ascertain the working conditions in the primary fishing industry through the lens of ILO’s decent work standards. To our knowledge, this is the most recent data available to show the conditions of the fishermen at a macro-level.

7.2 Working Conditions in the Indian Fisheries Sector—An Analysis of NSSO Data 7.2.1 Overview and Composition of the Data The Central Statistical Organization, Government of India, through the employment and unemployment rounds of the National Sample Surveys collects data on the employment condition of households across the country. Using a stratified multistage design, details regarding employment status, remuneration earned, duration of work, etc., are captured (see Rajeev & Nagendran, 2018, 2021). We use data from the 68th Round Employment and Unemployment Survey of the NSSO which includes observations of 456,999 individuals from 101,724 households. Rural households accounted for 59,700, while urban households accounted for 42,024 of the observations. From this data, 451 people were identified as being involved in the primary fishing industry. Therefore, considering observations from a

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subset of an industry, we seek to identify problems existing in the work conditions in the sector. However, there may be possible sources of biases in the data set, due to either the method of collection or the characteristics of the industry itself from which the sample is derived.

7.2.2 A Note on the Use of Codes The survey schedule used codes from the National Industrial Classification (NIC) of 2008 to classify the specific industry in which a worker is employed. These five-digit codes ascertain an individual’s sector, industry, and sub-industry of employment (see Rajeev & Nagendran, 2018, 2021). The following NIC (2008) codes identify workers attached to the primary fishing industry. These codes pertain to economic activity relating to the primary catchment of fish and other aquatic species. • 0311d: Marine fishing • 0312d: Freshwater fishing The ‘d’ is an additional digit that identifies the sub-industry. Individuals with these codes are those employed in some form within the industry; i.e. they are engaged in the primary catching of fish as well as other aquatic organisms in India. Activity codes 31, 41, and 51 show that workers can be classified as skilled, unskilled, and miscellaneous workers. Similarly, the National Classification of Occupations (NCO), 2004, identifies the occupation type, group, and work through three-digit codes. NCO Code 615 identifies skilled fishery workers, hunters, and trappers. Skilled fishery workers in inland fishing are involved in the cultivation and harvesting of fish along rivers, tanks, channels, creeks, estuaries, and backwaters, work as divers for pearls or corals, or are employed as crew in inland fish ships. Fishermen employed in the marine fishery industry work as crew in deepsea vessels such as trawlers that intend to catch fish for commercial sale. They use specialised equipment and spend several days at sea fishing, collecting and storing the captured fish, repairing nets, and maintaining fishing equipment (National Classification of Occupations, 2004). NCO Code 920 identifies unskilled or elementary labour who perform simple ancillary activities which may require the use of simple handheld tools and are often physically laborious (National Classification of Occupations, 2004). Against this background, we begin the analysis of working conditions by first providing an overview of the demographic details of the sample followed by an investigation into the remuneration earned by workers. Wages in both cash and kind are analysed to understand whether, on average, they are adequate to ensure a decent standard of living.

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7.3 Demographic Attributes of the Sample The geographical tapering of the southern peninsula in India has led to the southern states in the country having greater access to the country’s vast coastline. Due to this, a large percentage of the country’s fisheries employment is concentrated in the south (MOSPI, 2011) (see Fig. 7.1). As shown in Fig. 7.1, except for West Bengal, the majority of the employment in the fisheries sector within India is concentrated in the southern states of Kerala, Tamil Nadu, Andhra Pradesh, Maharashtra, and Karnataka. Employment within the sector is divided between marine fisheries, which provides the majority of the employment (87%) and inland fisheries (13%) which is the minority. Fishery labour in both marine and inland fisheries was classified into skilled workers who were involved in the direct harvesting of fish, unskilled or elementary workers who performed ancillary activities requiring a high degree of physical labour, and miscellaneous workers often employed as managers, cooks, administrators, etc.; 65% of the workers in the industry were classified as skilled, while 33% were unskilled workers. Looking at other demographic details, the NSSO data shows that only 7.65% of all workers within the sector are female, indicating the presence of a male-dominated industry. Furthermore, 24% of the workers surveyed were illiterate while only 5% of them had completed secondary education. 2.65

1.85

13.3

7.44

40.41

28.79

Karnataka

West Bengal

Tamil Nadu

Kerala

Andhra Pradesh

Maharashtra

Fig. 7.1 States with the highest share of employment in the fisheries industry (% of total). Source Authors’ computation using NSSO 68th Round (2011–12), MOSPI (2012) data (also see Rajeev & Nagendran, 2018)

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7.4 Indicators of Decent Work in the Fisheries Sector 7.4.1 Adequacy of Remuneration and Productivity of Work The first component of decent work is ensuring that the work is productive and earns a fair income. This is a crucial metric to assess if the wages earned are sufficient to ensure a minimum standard of consumption and nutrition. We analyse this by using the Rangarajan Committee definition of the poverty line.3 From our data, we observe that as high as 47.39% of workers in the fisheries sector fall below the poverty line if we consider income from the fisheries sector alone. This figure of course reduces to about 21% if we take into account other economic activities of a household. Nonetheless, the fact remains that from work as laborious as fishing, a fisherman is not able to feed his household (Rajeev & Nagendran, 2021). To get a better idea about the distribution of wages and ascertain differences within the industry, we analysed disaggregated averages. Looking at the average mode of payment of wages for workers, it was observed that wages were paid in either cash or kind with elementary, skilled, and miscellaneous workers earning 31%, 16%, and 3% of their wages in kind, respectively. Our analysis of the wage level based on the level of skill reveals that skilled workers earn an average weekly wage of Rs. 1698 (Rs. 1393.2 in cash and Rs. 305 equivalent value in kind), while unskilled workers earn a wage of only Rs. 988 per week (Rs. 677.1 in cash and Rs. 311 equivalent value in kind). Miscellaneous professions such as those in managerial roles earn almost 3 times the average wage of skilled workers, earning Rs. 4807 per week (Rs. 4667 in cash and only Rs. 140 equivalent value in kind) (see Fig. 7.2) (These figures may have been revised upward over the years). Comparing marine and freshwater fisheries, the NSSO data reveals that workers engaged in marine fisheries earn double (Rs. 1382) that of freshwater fisheries (Rs. 696). However, 20% of them earn their wages in kind as compared to only 2% of freshwater fishery workers. It is hypothesised that the difference in earning may be on account of the additional hazards they have to face while out at sea. Most often fishermen have to encounter natural hazards such as cyclones and other harsh weather conditions in addition to problems of capsizing, collision, grounding, or sinking of the vessel and occupational injuries. While many fishermen on mechanised boats used some sea safety device (SSD) such as life jackets, lifebuoy, first aid kit, emergency rations, fire extinguisher, and compass, fishermen with motorised boats used limited SSDs. However, most small-scale fishermen did not use any SSDs (Sharma & Sethulakshmi, 2019). To understand the level of inequality in wage distribution, we compute the percentage of workers who earn more than two-thirds of the median income. NSSO data shows that around 35% of overall fisheries’ workers—48.41% of unskilled 3

The Expert Group to Review the Methodology for Measurement of Poverty chaired by Dr C. Rangarajan computed the poverty line for 2011–12 to be Rs. 972 in rural areas and Rs. 1407 in urban areas. The full report can be found here: http://planningcommission.nic.in/reports/genrep/ pov_rep0707.pdf.

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6000

Indian Rupees

5000

140

4000 3000 4667

2000 305 1000

1393.2

311.1 677.1

Skilled Fishery Worker

Elementary Fishery Worker

0

Average Wages in Cash

Others

Average Wages in Kind

Fig. 7.2 Average weekly earnings for different occupations. Note Others include professionals, managers, etc. Source NSSO 68th Round (2011–12); also see Rajeev and Nagendran (2018)

workers and 28.07% of skilled workers—earn less than two-thirds below the median wage. Apart from the importance given to the wages earned, certain non-monetary aspects of work in fisheries are also important from the point of view of decent work. Long working hours are the first of these factors, which will be addressed in Sect. 7.4.2.

7.4.2 Hours of Work The number of hours a worker spends working in a given job each week is referred to as a workweek. However, due to the lack of data, we take into consideration the weekly average intensity of work instead of the number of hours worked. The intensity of work is defined by NSSO as how much time a person spent pursuing an activity. Depending on how much time a person spends working, the intensity is either 0.5 or 1: • We assign an intensity of 0.5 if 4 h or more is spent on 2 activities. • An intensity of 1.0 is assigned if 4 h or more is spent on 1 activity. • An intensity of 0.5 is assigned if 1–4 h is spent on 1 activity. According to NSSO data, it was found that all workers work at full intensity on all days of the week. If one considers a full workday as 8 h, this ensures the working week is 56 h, well above the recommended 48 h by ILO. This is reflective of negative work conditions in terms of work timings within the sector. For instance, during our

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primary survey it was observed that while certain groups of fishermen employed with retailers such as Fresh to Home go on shorter trips lasting 10–14 h, many fishermen stayed out at sea for 15 days at a time. Despite ILO suggesting a minimum of 10 h rest per day, during fishing trips that last more than three days, such facilities may not be enjoyed by the fishermen. Moreover, India does not have any formal legislation on the hours of rest on fishing vessels (Roshan, 2017). Due to this, workers who need to supplement their income from the fisheries sector through additional jobs are unable to do so. Gender-based discrimination against women is the next issue in the framework of decent work. Although gender disparity is present in terms of aggregate employment, it may exist in this sector as a result of fewer women coming forward to work in certain segments of fisheries. We, therefore, look into the issue of wage inequality among men and women for the same kind of job in the fisheries sector.

7.4.3 Gender Disparities in Work Identifying and rectifying the gender imbalance, both in the overall industry and in mid and senior-level positions is one of the core elements of the decent work agenda. The NSSO data reveals that among different fisheries sectors, marine fisheries employ the highest proportion of women (8.29%), while in freshwater fishing there was no representation of women in the data sample. Within the marine fisheries sector, only 0.4% of elementary workers and 22.65% of the skilled workforce was comprised of women. There was no representation of women in miscellaneous jobs. Looking at the gender imbalance in the industry through an analysis of the wage gaps between men and women for the same jobs (though different tasks performed by each gender cannot be taken into account with the data available), we see that the wage differentials are greater in skilled work than elementary work. While women in skilled jobs earned only 39% of what men were earning in unskilled jobs, they earned 67% of male earning. As shown in Fig. 7.3, for skilled work, women earned Rs. 556 on an average per week, while men earned Rs. 1487 for the same job. For unskilled jobs, women earned Rs. 597 on an average per week, while men earned Rs. 891 (see Fig. 7.3). One potential explanation for such differences is that, despite belonging to the same occupational group, women are perhaps given different assignments requiring lesser labour and physical exertion. Lower participation of women in the workforce may indicate the presence of child labour in the sector. The easy availability of children to make up for the low supply of female workforce could be a possibility. But the NSSO data revealed that there was no presence of child labour in the harvesting of fish. However, a small percentage, 0.79% of skilled workers and 2.23% of unskilled workers mostly employed as deck hands and involved in other miscellaneous activities were children. The data also shows that marine fishing employs 1.8% while freshwater fishing employs 1.19% of children in their workforce. Low pay, heavy workloads, skewed job patterns, and child labour are all examples of ‘poor’ working conditions that are detrimental to

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6000 4807

Indian Rupees

5000 4000 3000 2000 1000

1487 891

556

597

0 Skilled Fishery Work

Elementary Fishery Work Male

Miscellaneous

Female

Fig. 7.3 Gender-wise average wages for male and female workers. Source NSSO 68th Round (2011–12); also see Rajeev and Nagendran (2018, 2021)

every industry, and their absence is a required condition for decent work. However, there are aspects of occupations that, if present, make work more pleasant and decent. Stability and security are two of these indicators.

7.4.4 Stability and Security of Work According to ILO, precarious work is defined as ‘uncertainty as to the duration of employment, multiple possible employers or a disguised or ambiguous employment relationship, a lack of access to social protection and benefits usually associated with employment, low pay, and substantial legal and practical obstacles to joining a trade union and bargaining collectively’ (ILO, 2011). Based on this definition, we consider a worker to be precariously employed in the fisheries sector if they do not work full time, are not permanent employees, and did not have regular work in the past year. Since the majority of employees in the Indian fisheries sector are hired only with verbal contracts, those that do not have a written contract are not considered precariously employed. Work on ships and marine fishing vessels is often seasonal, due to which 90% of all precarious workers are engaged in miscellaneous jobs. On the other hand, skilled labour has a much higher degree of job security, with just about a third of jobs falling into this group while two-third of all unskilled workers are in this group. Observing the trends within the industry from the NSSO data, we can see that 74.16 and 39.23%

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of employees within the inland and marine fisheries sector respectively are precariously employed. However, a portion of the precariously employed workforce has voluntarily approved such an employment contract due to which the real job security situation might be marginally better than what is depicted.

7.4.5 Social Security Social security refers to protection in terms of income security and minimum access to health care that is provided to workers in the case of lack of or inability to work due to a variety of reasons such as sickness, invalidity, and work injury. Despite social security being a macro-indicator, it can also be used to identify the characteristics of work at the industry level. As shown in Fig. 7.4, 95.94% of workers in the fisheries sector did not have a formal, written employment contract. Even among the skilled workers, only 5.87% of workers have a contract for 3 years or more, 0.46% of workers had a contract for one year or less, and 93.67% of workers had no formal contract. Besides, only 1.6% of fisheries employees were eligible for paid time off, and 97.23% were not eligible for any social security benefits (including pension, gratuity, health care, and maternity benefits) (see Fig. 7.4). However, analysis of the NSSO data shows that regardless of whether contracts are verbal or non-verbal, the majority of employees have permanent unwritten jobs, 4.5

4.06

4 3.5 2.77

3

%

2.5 2

1.6

1.5 1 0.5 0 WriƩen Job Contract

Eligibility for Paid Leave Eligibility for Social Security Benefits

Fig. 7.4 Status of social security and benefits for workers. Source NSSO 68th Round (2011–12); also see Rajeev and Nagendran (2018, 2021)

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with 80.96% of those surveyed fall into this group. Just 19% of those working in the fishing industry were temporary employees. The concerned officials do not always have to take the lead in improving working conditions and guaranteeing minimum standards of decent work. Workers can influence management in a variety of ways to improve their monetary and non-monetary compensation. Workers in general, with the help of trade unions, are often successful in increasing wages and improving working conditions. However, for this to succeed fishermen need to be educated and made aware of the advantages and greater bargaining power that comes with being a member of the trade union. In this context, Sect. 7.4.6 looks at the current situation and areas of opportunity to improve trade union access to workers.

7.4.6 Presence of Trade Unions The last metric of the decent work framework is the degree of social dialogue, bargaining power, and information flows in the fisheries sector which involves the presence of trade unions. To measure trade union presence, ILO suggests the use of ‘trade union density rate’ defined as the percentage of union members in employment to the total workforce size in a given industry. The comprehensive density rate accounts for all paid and unpaid workers who are union members employed at a factory. In the marine fishing industry, nearly 50% of workers are union members, while in the inland fishing industry only 8.35% of workers belong to a union. Looking at the occupational profile of the fishery workers, it is observed that 57.98% and 39.89% of skilled and miscellaneous workers, respectively, are members of a trade union. On the other hand, only 6% of unskilled workers are unionised. This may largely be due to the lack of education and awareness among the elementary workers. Lack of trade union membership may also be a contributing factor to their poor working conditions.

7.5 Conclusion Analysis of the NSSO data shines a light on the inadequate work conditions in the fisheries sector in India. Looking at the basic economic indicator of wages, the NSSO data supported our observations from the field survey that fishermen, despite being one of the most important players in the supply chain are not compensated for their efforts. Remunerations received were often insufficient to support a basic standard of living for their families, with per capita income levels well below the minimum for more than 40% of workers in the industry (Rajeev & Nagendran, 2018, 2021). Marine fisheries however provided better wages compared to inland fishing. Despite the low wages, working hours were excessive with all workers working with full intensity throughout the workweek and conditions of work were often hazardous.

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The presence of job security and unionisation were seen among skilled labour in marine fishing, but only a small portion of workers were eligible for benefits as a result of terms of employment. Thus significant policy measures need to be taken to improve the working conditions of fishermen. This needs to be supplemented with educational and awareness programmes to bring forth a positive change.

References ILO. (1999). Report of the director-general: Decent work. In Proceedings of the international labour conference, 87 session. International Labour Organization. ILO. (2011). From precarious work to decent work: Policies and regulations to combat precarious employment. https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---actrav/docume nts/meetingdocument/wcms_164286.pdf MOSPI. (2011). Manual on fishery statistics. Ministry of Statistics and Programme Implementation, Central Statistical Office. MOSPI. (2012). National sample survey 68th round, employment & unemployment survey. National Classification of Occupations. (2004). Available online at: mail.mospi.gov.in/index.php/catalog/46/download/863 Rajeev, M., & Nagendran, P. (2018). Decency of primary occupations in the Indian fishing industry (ICDD Working Paper No. 21). Kassel University Press. Rajeev, M., & Nagendran, P. (2021). Analysing core indicators of decent work for the Indian fisheries sector. Do richer states perform better? Economic and Political Weekly, 56(41), 38–44. Roshan, M. (2017). A study of migrant fishers from Andhra Pradesh in the Gujarat marine fishing industry. ICSF Occasional Paper. International Collective in Support of Fishworkers. Sawaikar, N. K. (2017). The fishermen (protection and welfare) bill, 2017. http://164.100.47.4/bil lstexts/lsbilltexts/asintroduced/554LS%20AS.pdf Sharma, A., & Sethulakshmi, C. S. (2019). Assessment of occupational hazards and usage of sea safety devices by fishers of Kerala, India. Journal of Agromedicine, 24(4), 374–380.

Chapter 8

Retail Supply Chains: A Comprehensive Classification Capturing Emerging Trends

8.1 Introduction Marketing is defined as ‘an activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large’ (AMA, 2013). Marketing channels are consumer-centric and focus on creating utility for consumers in terms of place, time, form, and information, ensuring ease of access to a particular product, when required and in the desired condition. They also ensure that appropriate communication channels are available to answer questions and address the concerns of consumers when required (Sherlekar & Krishnamoorthy, 2015). The fisheries sector in India, up until the Third Five Year Plan, primarily focused on boosting fish production, with no emphasis given to marketing and logistic issues (Mruthyunjaya, 2004). Due to this, even major fish markets across the country did not have basic amenities such as weighing and grading equipment, sheds for auctioning, or cold storage facilities (Sathiadhas & Narayanakumar, 1994). Even international marketing of fish was restricted to exporting raw materials to the pre-processors in the importing countries (Sathiadhas & Narayanakumar, 1994). However, with the 1991 Economic Policy and subsequent focus on gains from trade, the fisheries sector was identified as a major foreign exchange earner for the country (Salim, 2012) This led to exports of shrimp, prawns, and other high-value fish (Kumaran et al., 2010), with government policy and programs, infrastructure and supply chain logistics predominantly focused on exports to the global market. Therefore, by the 1990s, the fisheries sector experienced rapid growth resulting in the movement of fish from domestic to export markets. However, increasing barriers in the form of non-tariff measures imposed by developed countries have hindered exports from the country. The proliferation of sanitary and phytosanitary measures (SPS) in terms of stringent quality and packaging requirements has led to increased compliance costs for developing countries (Neeliah et al., 2011) including India. These barriers, in addition to the widely fluctuating price

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Rajeev and S. Bhandarkar, Unravelling Supply Chain Networks of Fisheries in India, SpringerBriefs in Economics, https://doi.org/10.1007/978-981-16-7603-1_8

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of prawn and shrimp in the international market (Kumaran et al., 2010) have necessitated the development of a domestic marketing system in terms of wholesale and retail markets to ensure the sustainability of the fisheries sector. The domestic demand for fish too has shifted from being restricted to the fisheating population in the coastal regions and traders of shrimp and poultry feed, to increasing demand from the people living in inland cities owing to the growing focus on hygienic and protein-rich food (Cheran & Kumar, 2008). The growing importance of the domestic sector has led to Indian corporate houses and international players entering the market to capture the share of the ever-growing retail pie, transforming fish marketing from a community-based approach to a commercial one (Dash & Patra, 2014). In addition to the entry of new players, the emergence of hedonic consumer behaviour, wherein retail shopping has turned from a chore (Sargent, 1987) to a process where consumers derive intrinsic enjoyment (Guiry & Lutz, 2000), has contributed to retailers developing, modifying, and discarding new retail channel formats to provide consumers a satisfactory experience (Reynolds et al., 2007). This has led to the domestic marketing structure of fish in India to evolve from a traditional, unorganised market to a more efficient and organised one. Therefore, the fisheries sector, traditionally dominated by wet markets, kirana stores, and street hawkers in India, has seen the development of supermarkets and internet stores selling fish. However, modernisation has brought about fears that there will be a decline or even complete disappearance of these traditional forms of retailing, adversely affecting the livelihood of these retailers. Against this backdrop, we attempt to capture the major transformations in retailing structures that have occurred in the fisheries sector along with the hindering issues. Due to the lack of literature that comprehensively captures the traditional and emerging marketing channels and their underlying supply chains, this study based on field surveys attempts to fill this gap.

8.2 Mapping of Domestic Marketing Channels: Karnataka and Kerala Our field survey adopted a top-down approach by first visiting all the wholesalers in the sector and gathering information on the retailers from them. This enabled us to capture the various retail channels exhaustively. While the detailed classification of each of the domestic marketing channels is highlighted in the following sections, overall, it is observed that while there have not been many changes that have taken place in the wholesale sector of fisheries, except for the entry of Metro Cash and Carry of Germany, retail channels have undergone innovative transformations in terms of internet shops, specialised self-service seafood stores, etc. The widespread assumption that modern retailing channels such as supermarkets and e-commerce stores would lead to the demise of the traditional retail channels, is

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Domestic Marketing of Fisheries

Retail

Wholesale

Domestic

Multinational

Online Retailing

Unorganised

Organised

Exclusive Seafood Outlets

Multiproduc t Outlets with seafood division

Pavement Shops

Headloaders

Kirana Stores

Fig. 8.1 Domestic marketing channels of fish. Source Mapped by the Authors, also see Rajeev and Bhandarkar (2019)

seen to be unfounded. Our survey, interestingly, reveals that while headloaders and cycle vendors are showing a slow decline, kirana stores have proved remarkably resilient within the fisheries sector and show no signs of disappearance. Based on this, we have mapped out the various marketing channels under both the organised and unorganised sectors as highlighted below (see Fig. 8.1). Figure 8.1 provides a snapshot of the entire marketing channels of fish as observed in our primary survey conducted in Bangalore, Karnataka, and Thiruvananthapuram and Kollam in Kerala. Detailed characteristics of each of these channels, the innovative measures adapted, and problems faced are highlighted in the following sections.

8.3 Wholesale Market Accessed by the Retailers Wholesale fish markets are public spaces where the physical exchange of produce, usually in large quantities, takes place between a wholesaler and a retailer, reseller, or specialist user such as caterers. Wholesale markets aim to improve the efficiency of distribution by centralising transactions at a single location. Based on our field survey, we classify wholesale fish markets into (i) Multinational wholesalers and (ii) Domestic wholesalers.

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8.3.1 Multinational Wholesalers: Business-to-Business Model Multinational wholesalers are MNCs incorporated in a foreign country that cater to the bulk demands of the host country market. This can be understood and discussed in the context of the sole multinational company that deals with fish, viz., Metro Cash and Carry.

8.3.1.1

Metro Cash & Carry

Metro Cash & Carry India follows a business-to-business (B2B) model, marketing its products to other businesses and organisations within the country. It carries more than 50,000 products from a variety of brands under the same roof, enabling other registered businesses to buy in bulk from the same place, instead of placing orders with multiple sellers. Metro only operates the cash and carry format in India. Two major reasons for this are as follows: (i) FDI in retail is not permitted by the Indian Government, and (ii) the expansion plan of the Metro Group for Asia is focused on the B2B cash and carry format as 50% of their revenue comes from this segment. Metro Cash & Carry opened its first wholesale centre in the country in 2003 at Yeshwantpur, Bangalore. Since then, Metro has opened 18 stores across 12 cities in the country. India is a key market in Asia due to the fast-paced growth of the economy, bringing with it exponential trade growth. Metro’s primary customer base are Hotels, Restaurants, and Caterers (HoReCa), small traders such as kirana stores and other institutions and businesses such as schools, colleges and small scale industries. Since Metro considers the domestic wholesalers as its main competitor, it has adopted innovative strategies to build its customer base. Metro has built partnerships with over 2000 small kirana stores to encourage them to choose Metro as their preferred supplier. It has provided these stores with point-of-sale devices that ensure they can order directly from Metro and use e-payment to clear their bills (Inside Retail Asia, 2020). While Metro offers a wide assortment of products such as fresh food, gourmet and specialty items, electronics and appliances, clothing, etc., we will focus only on the dynamics of the ‘Fresh Fish and Seafood’ division in the following section. Fresh Fish World-Division of Fresh Fish and Seafood Metro stores stock a wide variety of fresh, frozen, and canned fish, sourced from local suppliers as well as imported from abroad. Metro also carries both marine fish such as mackerel, squid, prawns, and lobsters sourced from more than 20 sites on the east and west coast and inland fish such as rohu, catla, basa, and hilsa sourced from certified inland farms. They also offer a value-added section of marinated and processed fish products such as fish fingers and crab sticks (https://www.metro.co. in/products-world/fresh-fish).

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Metro Cash & Carry (MCC) has a specific fish procurement policy applicable across all countries where they operate. Metro group is a part of the Global Sustainable Seafood Initiative (GSSI), a global network of seafood companies, NGOs, experts, and governmental and intergovernmental organisations which prescribe a code of conduct for responsible fisheries. To ensure the sustainability of the supply chain, Metro prohibits the capture of certain endangered species such as sharks, dolphins, and whales. This list of endangered species is updated annually based on the recommendations by the UNFAO and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Furthermore, since certain methods of fishing cause damage to the surrounding ecosystem, Metro encourages fishermen to use improved fishing gear such as exit windows for bycatch and larger mesh size of nets. In addition to sustainability, Metro also focuses on traceability, ensuring that all produce delivered to customers can be traced back to the source. It requires all local fish products to be labelled with both the scientific and common names of species, along with the name of the water body the fish is caught in. Processed and packed fish also require a lot number and country of origin to be mentioned. Metro also states that fish cannot be procured from vessels labelled as illegal, unreported and unregulated fishing (IUU) and does not accept produce from fishermen who use dynamite or poison.1 In addition to these environmental regulations, Metro also ensures that stock of fresh fish is delivered daily and the quality index method and organoleptic checks (focus on look, texture, and smell) are used for checking the freshness of the produce (https://www.metro.co.in/products-world/fresh-fish). Prices of fish at Metro are determined by an exclusive ‘price benchmarking team’ based on the price paid at the production site (i.e. auction at ports or directly to fishermen) plus the transportation costs and commissions paid and by taking into consideration prices of its competitors. Fresh fish is usually priced higher than frozen products. Freshness and quality reflect the prices on a particular day. Prices are generally less than retail shops due to better negotiation of slotting fees and bigger store sizes to spread out their fixed costs (economies of scale).

8.3.2 Domestic Wholesalers in Bangalore Domestic wholesale fish markets are usually located in the city centre, where fish and fishery products arrive from the coastal regions and are distributed to different parts of the state. Clients, typically supermarkets and caterers, but also smaller kirana stores, benefit from wholesale markets because they can access a variety of fish from various suppliers all in one location. A large number of wholesalers on the market ensure a high degree of competition, with prices that adjust rapidly to supply and demand changes.

1

See Metro Fish and Seafood Procurement Policy 2020.

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The main wholesale fish markets in Bangalore are Russell market, Yeshwanthpur market, and City market. Since Russell market is the largest and oldest market that is currently operating in Bangalore, our field survey was undertaken there.

8.3.2.1

Russell Market: Fresh Fish Market

Established by the British Government in the year 1927, Russell market is one of the oldest surviving wholesale markets in the city that also houses the largest fish market in Bangalore. Fish from various states such as Tamil Nadu, Kerala, Andhra Pradesh, Gujarat, Orissa, West Bengal, and Karnataka is sold at the Russell market catering to both, retailers who buy for resale as well as individuals who buy for self-consumption. Fresh fish is delivered to the various wholesalers in the market at 4 am (see Picture 8.1), and wholesale trade begins at 6 am (see Picture 8.2). Subsequently, the trade is concluded and is then open for the retail customers at 8 am as in Picture 8.3. Table 8.1 gives an overview of the Russell market. 26 registered sellers sell both marine fish such as mackerel, sardine, seerfish, tuna, pomfret, shrimp, prawns, and crab and freshwater fish such as rohu, catla, and mrigal. No fish imported from abroad are sold since the demand for fish at Russell market is for fresh rather than frozen ones. Despite being one of the biggest fish markets in the city, it is seen that Russell market has very poor infrastructure characterised by an unorganised and unhygienic marketing system. Roads leading to and within the market are narrow and often impassable. Stalls within the market sold fish on the streets without proper flooring, storage space, or waste management system. Small platforms are present at each

Picture 8.1 Fish arriving at Russell market at 4 am. Source Primary survey, also see Rajeev and Bhandarkar (2019)

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Picture 8.2 Wholesale trade at 6 am. Source Primary survey, also see Rajeev and Bhandarkar (2019)

Picture 8.3 Retail trade at 8.00 am. Source Primary survey, also see Rajeev and Bhandarkar (2019) Table 8.1 Particulars of Russell market

Location

Shivajinagar, Bangalore

Customer base

Hotels, restaurants, other retail vendors, and consumers

Infrastructure

Not satisfactory

Time of operation

Throughout the day (3 h for wholesale; 7 h for retail)

Sale

Wholesale and retail

Mode of payment

Mostly cash (credit for frequent buyers)

Commodities sold

Marine and freshwater fish Flowers and fruits, poultry, and vegetables

Pricing

Price based on demand and supply

Weighing process

Physical balance

Source Primary survey, also see Rajeev and Bhandarkar (2019)

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shop; however, these are rarely used. Even cold storage facilities, crucial to ensuring the preservation of fish, is antiquated. Most of the traders pack the leftover fish in plastic or thermocol boxes with ice and resell it the next day. Parking space for customers’ vehicles, as well as loading and unloading facilities, is limited. Traders reported that there was no quality monitoring from local government bodies. These problems of perishability due to the inability to store fish influenced the prices of fish. The wholesalers have a profit margin of 10–12% with the highest margins being of high-value fish such as pomfrets and seerfish. In case the fish is not sold for more than two days, the fish is sold to the dry fish sellers.

8.3.2.2

Russell Market: Dry Fish Segment

Since fish is a highly perishable commodity, wholesalers undertake drying of fish to increase its shelf life and preserve the produce. Drying implies the removal of water from the fish through the process of evaporation. Since water is required for the survival of any organism, its removal retarded microbial growth (Parvathy, 2018). To cater to the dry fish demand, there is an exclusive dry fish market in Shivajinagar, next to the Russell market. Wholesalers of dry fish at Russell market source their produce from two different channels—they buy the unsold fish from the fresh fish retailers after two days and then salt and dry the fresh fish within the premises on the shop. Larger quantities of dry fish can be bought from warehouses in Shivajinagar which procure 20–30 bags of fish at wholesale rates from locations such as Mangalore, Kerala, and Mumbai. Sardines, mackerels, ribbon fish, etc., are the most common types of fish that are dried and cured. While there are a large number of methods used to dry fish, the most commonly used methods are sun drying, where fish are spread out on the shore to directly dry under the sun. This is the traditional, least expensive method of fish preservation. Pit curing is also practiced wherein fish is salted and then buried in lined pits from anywhere between 2 days to a fortnight. These fishes are then sold in semi-dried conditions. During monsoon, the salt-and-dry or wet salting method was used to dry the fish faster. The fish is first salted and then kept outside when sunlight is available or the fish is soaked in a mixture of salt and water, also known as brine for 30 min to 24 hours. In Bangalore, the demand for dry fish is mostly from traders who are involved in shrimp and poultry farming to use as raw materials for the feed, and weaker sections of the population who prefer it over fresh fish due to the lower price (see Table 8.2). The price differential is almost 50% between fresh and dry fish of the same category. Due to the longer shelf life of dried fish, many people buy dried fish when they have enough income and store it for consumption during the leaner periods. It is seen that even after drying of fish there is a loss of produce due to the substandard methods of storage. In Russell market, dry fish is primarily stored in gunny sacks which does not protect the dry fish from bug infestation or exposure to moisture in the air. This led to the decay of the dry fish leading to excessive wastage.

8.3 Wholesale Market Accessed by the Retailers Table 8.2 Comparison between the price of dry and fresh fish at Russell market

107 Dry

Fresh

Mackerel

80/kg

170/kg

Sardine

60/kg

120/kg

Source Primary survey, also see Rajeev and Bhandarkar (2019). These are the prices during the time of our survey. Prices move upward over time.

Despite the various infrastructure problems present in Russell market, due to its centralised location and stability of supply, most retailers still prefer conducting their trade at the market. Competition among traders ensures fair prices being charged to the customers. Large-scale traders within the markets, however, are seen to have a comparative advantage over small-scale operators. These traders often have stocks left throughout the day and hence even indulge in retail trade. While wholesale markets are focal points of high volume trade, it is the retail markets that service the end consumer.

8.4 Mapping the Retail Channels Retailing is often defined as ‘a set of business activities carried on to accomplishing the exchange of goods and services for purposes of personal, family, or household use, whether performed in a store or by some form of non-store selling’. (Bennett, 1995) Fish retail markets sell fish and fish products directly to the consumer, and unlike wholesale markets prepare, package, and provide fish in small quantities according to the needs of the consumer. We divide the different retail channels into two categories based on the results of the field survey: unorganised retailing/traditional channels and organised retailing. The main reason for categorisation under these two broad headings is that traditional retailing continues to be a widespread phenomenon in the country, accounting for 97% of the retail share in 2018 (Jain, 2018). This is in contrast to developed countries where traditional retailing is conspicuous by its absence. As a result, conventional retailing channels are still an essential form of marketing in India. Both the organised and unorganised forms of retailing are further classified into subdivisions.

8.4.1 Unorganised Retail Channels Unorganised retailing refers to conventional methods of low-cost retailing, usually owner-manned and operating in shops that are less than 100 sq ft in size (Singh, 2005

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quoted in Sarkar & Kundu, 2016). Street sellers, mobile vendors, and small momand-pop stores also known as ‘kirana’ stores make up the unorganised marketing channels of fish in India.

8.4.1.1

Headloaders

Through our primary survey, it was observed that most headloaders are primarily migrant women, dealing in small quantities of low-value species. These women have migrated from small villages along the coast and buy fish from wholesale markets and sell them door to door. Their investment levels are low, and most of them take up this profession due to their social and economic status. They typically sell in specific areas, often low-income neighbourhoods, where they have built a loyal customer base. They do not have the means to store unsold fish, and when demand is low they sell the catch at a discounted rate. Their net average income per day is Rs. 100–150. Headloaders, however, are witnessing a decline in urban areas of Bangalore. One of the reasons for their decline was attributed to the increasing participation of women in the workforce. Women prefer to shop at their convenience, and since most families have all members at work throughout the day, the sales of this class of retailers have taken a drastic hit. Further, most housing colonies and apartment complexes do not allow headloaders to enter to sell their produce. In Kerala, however, these petty traders are still prevalent as fish retailers. They normally function as headloaders and cycle vendors. Even in Kerala, headloaders are predominantly women who buy sardines, shrimps, or other local varieties from auctioneers with an initial investment of about Rs. 1500–2000 and sell them in bamboo or aluminium baskets door to door. They obtain only small quantities of fish belonging to 2 or 3 species that can be sold within hours. They make only profits of Rs. 20–30 per kilogram of fish. While initially, they faced competition from cycle-borne fish vendors, today their livelihood is affected by online shopping and supermarkets that have made inroads even in tier-II cities. They also face constraints in transportation and preservation of fish. Due to lack of transportation in many villages or in cases of not being allowed in public vehicles with fish, most headloaders are forced to walk with fish baskets on their heads. Inability to transport fish quickly results in spoilage of fish, and in some cases, women are forced to salt dry their fish which is then sold for a very low price.

8.4.1.2

Pavement Shops

Retailers set up these shops early in the morning or late in the evening on the side of the road since they cannot afford to rent a retail space. Most of these roadside vendors buy fish from wholesale markets like Yeshwanthpur and Russell market, often purchasing low-cost varieties. Most of their customers are lower-income individuals such as labourers who cannot afford to purchase high-quality fish. These street vendors are constantly hassled by police officers and are forced to pay bribes or move from one

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location to another. Since they market low-quality fish and have no establishment costs, pavement sales are the cheapest.

8.4.1.3

Kirana Stores

These small kirana or convenience stores are present in urban and rural areas of the city and tend to operate at a small scale, usually in a space of 500 sq feet or less. They are often owner-operated, with little to no hired labour. Since kirana stores have a pervasive reach, they have the benefit of understanding the needs and buying habits of their customers. Most kirana stores have a target customer base of the neighbourhood in which they are located, facilitating the practice of regular fish shopping and curating their sales based on what their customers demand. While processed fish is rarely found in kirana stores, most of them scale, clean, and cut the fish at no additional cost to their customers. Depending on the stock left from the previous day and predicting the amount needed for the current day, the owner buys 5–6 varieties of fish early morning from the wholesale market. The mode of transportation is his own vehicle or auto-rickshaws on most of the days. These shops have a high shrinkage rate including products that cannot be eaten beyond a certain date, damaged fish, etc., due to unrefined operating procedures. In smaller cities like Kollam in Kerala too, these small stores constitute a major share of the retail market. They operate at shops in fish markets across the state. They also offer a wide range of species of fish. On average, they sell 50–60 kg of fish on a good day and make a profit of Rs. 20–50 per kilogram of fish. Though the traditional retail channels such as headloaders and pavement shops have seen a decline in recent years, kirana stores continue to flourish.

8.4.2 Organised Retail Marketing Organised retailing refers to trading operations carried out by licensed dealers who are registered and subject to government taxation. Typically, organised retailers are a chain of stores that are either self-owned, franchised, or a single store that is greater than a certain size threshold. Organised retail fish marketing has been divided into (i) Multi-product outlets with seafood division; (ii) Online retailing; and (iii) Exclusive seafood outlets. This has been discussed in the following subsections.

8.4.2.1

Multi-product Outlets with Seafood Division

Multi-product outlets, such as supermarkets or hypermarkets, stock items from a variety of brands under one roof. These chain stores, from well-known groups in the country, such as Star Bazaar and Spar, have multiple outlets in Bangalore, with most of the stores spread over a large area of 40,000–80,000 sqft, offering a wide

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variety of products such as fresh food, meat, poultry products, apparel, cosmetics, and consumer durables. These are usually self-service stores that stock a large variety of fish and even have additional choices such as cut, cleaned, and pre-weighed produce. Most of these stores have an added advantage of greater customer footfall, with almost 500–2000 people walking in per day. Most customers who shop for fish in these stores are those who emphasise freshness and convenience over price and usually belong to the upper strata of society. Stores maintain a minimum of 30–35 varieties of fish on a given day out of 60 listed fish that they procure. They also provide customers additional benefits such as express counters, free home delivery within a specified radius, an air-conditioned shopping environment, and serviced by friendly staff. Most of these stores also have a website where shoppers can place orders and get the fish delivered at their doorstep. With the emergence of these large-scale retailers, there is an increasing presence of backward linkages. To increase the speed and frequency of replenishment of the fish produce, most stores have entered into direct and exclusive contracts with agents at the wholesaler market. Each store has a procurement manager who exclusively handles the fresh fish department. Based on the daily sales, the procurement manager places an order for the next with the main office. After aggregating the requirement of all branches, the main office then places an order with the agent at the wholesale market. The produce is then collected the next day and taken to the processing hub. After segregating and cleaning the produce, it is distributed to each store through their own transportation network.

8.4.2.2

Retail Stores Exclusively Catering to Seafood

These stores that cater exclusively to seafood have thrived despite the presence of larger supermarkets such as Star Bazaar due to lower transaction costs (such as a long waiting time at large stores) and a greater variety of products. Chain of Stores Various stores cater to only seafood or a combination of seafood and meat such as o2h, Chef and Butcher, Chicken and More. These stores sell mainly fresh fish products in their store. The main advantage of these stores is the emphasis on quality and high levels of hygiene, with employees in the store are often seen wearing aprons and gloves. These stores mainly focus on the quality of the product, promotions, hygiene, and convenience factor to attract customers. These shops are increasingly becoming popular today due to the add-on service of home delivery that they offer which is an important incentive in a city. These stores also have an online website that allows customers to order online, often making use of private fleets to cover delivery within the limited area. The main advantages of these stores over traditional retail outlets are highlighted in Table 8.3.

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Table 8.3 Difference between private modern outlets and traditional retail outlets Private outlets (o2h, etc.)

Traditional retail outlets

Source of procurement

Directly from agents at the point of first sale

Wholesalers in Russell, City, or Yeshwanthpur market

Hygiene

High standards Good storage, use of gloves

Substandard

No. of varieties

12–18

4–5

Availability of substitutes

Yes

No

VAS

Cleaning, cutting, and packaging Available at additional payment

Source Primary survey, also see Rajeev and Bhandarkar (2019)

8.4.2.3

Cooperative Model for Retailing Fish

To ensure better prices for the fishermen and eliminate the middlemen in the supply chain of fish, 654 primary fishermen cooperative societies with the help of the Kerala State Co-operative Federation for Fisheries Development Ltd. started a retail outlet named Fresh Fish Point. These retail stores procure fish directly from fishermen or fishermen cooperative societies aiming to provide fresh fish that is hygienic and affordable. Today, however, these stores have been completely privatised, and there is no government involvement in the supply of fish. Privatisation has resulted in greater investment in the form of a landing platform to ensure minimum wastage due to spoilage of catch. An exclusive marketing division takes care of the specific requirements of the consumers and ensures the supply of the products with promptness by procuring fish from the fishermen directly (www.thehindu.com).

8.4.2.4

Online Retailing

Despite fish falling in the category of ‘high touch’ products, which people prefer buying by personally looking at the produce, increasing urbanisation and changing lifestyles has led Indian consumers to steadily venture towards online shopping for even perishable products. Ease of access, the convenience of shopping 24/7, the ability to compare prices, and the provision of home delivery have made seafood move into the dimensions of Internet trade. There is a steady rise of e-commerce fish marketplaces such as Licious, Meatigo, and Fresh to Home that has gained momentum with the rise of e-grocery and the advent of new cost-effective freezing technology. The pandemic has made this channel even more attractive. Fresh to Home India’s first e-commerce venture for fresh and chemical-free seafood was started as www.seatohome.com and re-launched under its present name. Started by Mathew Joseph and Shan Kadavil, Fresh to Home delivers a variety of fish within 24 to 48 h.

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Currently, Fresh to Home delivers in many Indian cities such as Kochi, Bangalore, Delhi (NCR), Trivandrum, Mysore, Palakkad, and KGF (www.freshtohome.com). The main emphasis of Fresh to Home is to provide fresh fish at mass-market prices by cutting down the middlemen. They work closely with small-scale fishermen from coasts across India who go fishing in small boats and return to shore the same day. This ensures that they can deliver fish within 24 h of it being caught, fresh, only stored on a bed of ice. The company transports the produce from the landing centres to its centralised processing centre from where it is delivered to the customer with the help of delivery boys who maintain ice boxes on their bikes. Furthermore, fish is carried in a smaller icebox from the main gate to the doorstep where the produce is maintained at a temperature of 0–4 degrees Celsius throughout. Non-dependence on courier companies and having sourcing and delivery fully under their control enables them to deliver the produce in the fastest time possible from source to destination. Although the prices of fish bought (see Table 8.4—The prices on the Website change every day. These prices were retrieved from the Website during October when we conducted the field survey in other markets) through Fresh to Home are slightly higher when compared to kirana stores, these can be considered competitive when taking into consideration the guarantee of chemical-free, fresh fish. Apart from offering fresh fish as a whole, Fresh to Home also offers cleaned fish in various cuts, such as fillet, curry cut, and steak cut. The fish is processed in the factory at Hennur, Bangalore, which has a capacity to store 40 tonnes of fish, by around 300 employees of the company. Table 8.4 Pricing in an online store: Fresh to Home

Type of fish

Price (per kg)

Marine fish Indian Mackerel

185

Big-Eye Snapper

160

Marine Milk Fish

275

Barracuda

350

Cobia

350

Seer Fish

320

Trevally

315

Pink Perch

240

Freshwater fish Long-Whiskered Cat Fish

190

Orange Chromide

180

Pearl Spot

390

Bassa

210

Source Freshtohome.com on 17 October 2017, also see Rajeev and Bhandarkar (2019)

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8.5 Mapping of Marketing Channels: Assam Our primary survey in Guwahati revealed that domestic retail channels in the city were underdeveloped as compared to the ones in Bangalore and Trivandrum. Modern forms of retailing such as corporate houses and international sellers had not yet made inroads into the fish marketing scene in the city. Fish is still primarily sold through traditional, unorganised retailers, with the entry of government backed shops being the most recent development in the retail scenario. Paltan bazaar and Uzan bazaar are two of the major fish markets in Guwahati from where fish retailers operate. These retailers go into the villages to procure the harvested fish from the fish farmers at Rs. 90/kg. In certain instances, the retailers trade with an auctioneer instead of the fish farmer. Auctioneers often extend credit to the fish farmers for breeding and harvesting fish and take back the money owed plus a small commission from the total sales made. If the retailer engages with the same auctioneer, the retailer has the option of procuring the produce on a credit basis. He then pays back the money when the produce is sold. The retailer in turn sells the produce to the final consumer at Rs. 130–200 per kg. Prices at these markets are not fixed, fluctuating based on the time of day and negotiating power of the consumer. The prices are also higher on Sundays due to greater demand. The retailers in these markets have to pay Rs. 50 per week as cleaning charges, Rs. 200 per month as electricity charges in addition to Rs. 5 per day to the security guard, and Rs. 10 for the toilet facilities at the market. As highlighted in the previous chapter, due to Assam not being self-sufficient in the production of fish, retailers also sell fish that have arrived from Andhra Pradesh or West Bengal. In addition to the retailers at Paltan and Uzan bazaar, intending to eliminate middlemen, the Assam Apex Cooperative Fish Marketing & Processing Federation Ltd (FISHFED) has also set up fish stalls to ensure better prices to the fishermen and better value to the consumer. In addition to setting up retail stalls, FISHFED also is focused on increasing the production of fish in the State. The board of FISHFED has three government representatives and has the authority to lease and develop government-owned water bodies. Fish caught from these water bodies are then sold at the outlets. FISHFED is helping develop a 42 biga area project in Tokoubari, a 250 biga project in Marikolong, a 200 biga project in Jorhat, and a 5 biga project in the Guwahati–Rupnagar area in the state of Assam. To minimise post-harvest losses, provision for cold storage facilities is made in the sites from where they source the fish. However, recently it has been seen that this model of FISHFED has not been very successful, since a large number of cooperatives are inactive. Due to this, they have resorted to sourcing fish from wholesalers and selling it to the consumers to meet the demand.

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8.6 Improving Efficiency of Retail Supply Chains: Major Concerns Despite significant improvements in the retailing structure of fish, one major problem that most retailers faced was seafood wastage as a result of improper handling, storage, and transportation methods. Inadequate cold storage facilities right from the primary producer till it reaches the consumer have made seafood logistics challenging. Our primary survey revealed that while multinational wholesalers such as Metro Cash and Carry and supermarkets such as More and Star Bazaar could afford capital-intensive storage facilities, small kirana stores and wholesalers at Russell market only used ice as a means of storing fish. This was not very effective since the quality of water used in ice preparation also influenced the degradation in the quality of fish. Despite being a large player in the market, Metro Cash and Carry too faces certain problems in the course of procuring fish due to post-harvest problems in the handling of fish. Due to outdated harvesting technologies, production is scattered across various coastlines, leading to an increase in transportation and storage costs. Many fishermen are also not educated about the right storage practices, leading to a compromise on hygiene. To solve the problems of hygiene and infrastructure, Metro as a part of its Corporate Social Responsibility (CSR) undertakes the Fishermen Training Programme, ensuring 1250 fishing crews in Karnataka and Kerala and provided training in safety and hygiene measures. In addition to the training programme, Metro has also built a modern fish auction and landing centre in Mangalore in collaboration with the Karnataka Government for Rs. 5.7 million. This was later handed over to the department of fisheries for collective use. The landing centre has helped improve hygiene and reduce wastage by maintaining the quality and extending the shelf life of fish, thereby improving the profitability for fishermen. However, there was a time when Metro benefited from the substandard infrastructure. Due to the Yeshwanthpur branch of Metro being in a strategic location between Mangalore port and Russell market, the trucks carrying produce from Mangalore to Metro used to reach Metro on time, far before the trucks delivering the produce to Russell market. This was because roads within Bangalore city leading to Russell market were in a bad state, leading to a delay in delivery of the shipment from Mangalore landing centres. Metro took advantage of this situation and was in a position to hike their prices since most traders in Russell market have a ‘risk clause’ while dealing with various hotels and restaurants to supply fish within a particular time. Traders, however, were not able to deliver the fish on time to these hotels due to delays in shipments. When the contract is not fulfilled on time, the hotels have the right to procure fish from an alternative source (such as Metro) at any amount, and this needs to be paid for by the traders, leading to additional losses for them but benefitting Metro. It is not only the fresh fish market but also the dry fish market that faces problems. For the process of drying fish, the presence of substandard infrastructure and lack of access to clean water and salt was reported. During procurement, it was seen that

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wholesalers at Russell market were often duped with good fish being spread on the top of the basket to hide the poorer quality product underneath. Also, due to a lack of proper weights and measures, bargaining was often based on approximations such as the size of the basket in which the fish was sold.

8.7 Efficiency Improving Endeavours: Selected Cases As seen in a section above, looking at the growing demand for fish in the country, various modern retailers have entered the marketing of fish bringing forth innovations in procurement and distribution strategies to enhance the quality of supply chains and reduce the time taken in transit. Within the organised sector, it was observed that most modern retailers preferred to bypass the middlemen and procure fish directly with the fishermen to ensure the quality of produce. For instance, Metro Cash & Carry employs fishery graduates as a part of their ‘buying teams’. These teams are present at most landing centres of the coastal regions and are well-versed in ensuring the quality and variety of fish to be procured. Metro’s hiring of experts in this area has been a major advancement in terms of cost reduction since low-quality fish is discarded at the landing centre itself. Metro has an advantage in terms of procuring fish since it is a bulk buyer and buys directly from many small fishermen at small landing centres. Even at Russell market, despite a certain dependency on auctioneers at the landing centre, in recent times, due to the advancement of technology and the penetration of mobile phone usage among fishermen, sales are conducted via phone even while they are at sea. The fishermen contact potential buyers at different markets to essentially decide where to sell their catch depending on the highest price offered. Traditionally, fish was sold only at the home markets of fishermen since selling at other landing centres was not feasible owing to a lack of information about the price or demand for fish at those places. Furthermore, travelling from one place to another on the lookout for potential buyers resulted in high fuel costs and increasing spoilage due to the small time frame in which all fish was to be sold. The present situation, however, reflects the ‘law of one price’—the idea that in an efficient market identical goods should cost the same—in the form of a single rate for produce along the coast. Once the produce lands on the coast, the boat owners take the produce and sell it to the agents. These agents call up the wholesalers at Russell market and ask them to specify the quantity required and the price at which it is selling. Once the deal is finalised over the phone, the agents make arrangements to transport it to Bangalore. E-commerce retailer Fresh to Home has gone one step further to ensure the complete elimination of middlemen in the supply chain. A large quantity of fish sold in cities that are away from the coastal regions is between three days to one month old. This is largely due to the fish being caught by large mechanised trawlers that are at sea anywhere between three days to a month resulting in month old frozen fish. Since spoilage of fish begins right from the time it is caught, many fishermen

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use not so scientific methods to ensure longer preservation and better visual characteristics such as colour. To guarantee fresh fish to even people staying away from coastal areas, Fresh to Home procures fish only from small-scale fishermen who venture into sea in the early hours of the day and return by noon in their boats. Fresh to Home procures from around 800–1000 fishermen across 125 ports. The main area that the company sources from is the smaller ports in the Kerala belt. Despite most fishermen in these areas being unorganised and fragmented, Fresh to Home has taken advantage of the mobile penetration and the fishermen being tech-savvy. A mobile app created for the fishermen allows them to trade directly with the company. Using pictures that they can scroll through, the app allows the fishermen to bid with the company, functioning as an electronic commodities exchange. Once the bid goes through, the system generates a purchase order. Once the purchase order comes through, the company itself controls the supply chain. Within South India, fish is transported from the landing centres in trucks or trains, and it is taken to the processing centre in Bangalore. The fish is stored in insulated thermocol boxes and RO-processed ice to keep it fresh. Radom sampling is carried out to ensure the produce is 100% chemical-free and then listed online for purchase. To ensure traceability, the fish are also tagged after procurement, enabling one to trace it back to the catchment site. Since deliveries to the far away places such as to the capital city Delhi are sent by air, to ensure the required quantity is transported at the right time, Fresh to Home has negotiated guaranteed space on cargo aircrafts, ensuring that deliveries are as per schedule.

8.8 Conclusion As evidenced by our field survey, despite traditional retail outlets such as kirana stores dominating domestic marketing channels in the country, major metro cities are seeing the rise of modern retail channels such as supermarkets and e-retailers. This growth, combined with rising income levels and a growing value placed on convenience, has resulted in the proliferation of packaged and processed fish being sold from these outlets. In addition to the domestic supply, processed goods also have a large international market. The fish processing units primarily carry out the fisheries exports from the country, and hence, their functioning and concerns, if any, need proper assessment. Therefore, we have also visited some processing units in Kerala to understand the supply chain of exports in the international market. While this book is primarily concerned with the domestic marketing channels, for sake of completeness, we briefly discuss the processing segment in the next chapter.

References

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References AMA. (2013). American marketing association, definition of marketing. Retrieved from https:// www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx Bennett, P. D. (1995). Dictionary of marketing terms (2nd ed.). American Marketing Association. Cheran, P. E., & Kumar, J. (2008). Nutritional benefits of shrimps and other seafoods. Shrimp Care, 8–10. Dash, R. K., & Patra, R. N. (2014). Marine fisheries in India: Issues of growth and instability. Journal of Economics and Finance, 5(2), 40–51. Guiry, M., & Lutz, R. (2000). Recreational shopper identity: Implications of recreational shopping for consumer self-definition. Working paper, University of Florida. Insider Retail Asia. (2020). Metro Cash and Carry India plans more stores. https://insideretail.asia/ 2020/02/25/metro-cash-carry-india-plans-more-stores/ Jain, V. (2018, January 15). Organised retail to grab 10% market share in next 2 years on new FDI rules: Report. ET Retail. https://retail.economictimes.indiatimes.com/news/industry/organisedretail-to-grab-10-market-share-in-next-2-years-on-new-fdi-rules-report/62507844 Kumaran, M., Ravisankar, T., Krishnan, M., Vimala, D. D., Mahalakshmi, P., & Ganeshkumar, B. (2010). Unique and innovative cases of emerging domestic fish marketing arrangements in South India. Aquaculture Asia. Mruthyunjaya. (2004). Research report on strategies and options for increasing and sustaining fish and aquaculture production to benefit poor households in India (142 pp). National Centre for Agricultural Economics and Policy Research, and The WorldFish Center Neeliah, S. A., Neeliah, H., & Goburdhun, D. (2011). Sanitary and phytosanitary issues for fishery exports to the European Union: A Mauritian insight. Journal of Development and Agricultural Economics, 3(2), 56–68. Parvathy, U. (2018). Drying and salting of fish. ICAR-Central Institute of Fisheries Technology. Rajeev, M., & Bhandarkar, S. (2019). Traders in food value chain: Fisheries sector in India. Social and Economic Change Monographs, No. 62, Institute for Social and Economic Change. Reynolds, J., Howard, E., Cuthbertson, C., & Hristov, L. (2007). Perspectives on retail format innovation: Relating theory and practice. International Journal of Retail & Distribution Management, 35(8), 647–660. Salim, S. S. (2012). Trade barriers: Implications for Indian fisheries sector. In S. S. Shyam & R. Narayanakumar (Eds.), World trade agreement and Indian fisheries paradigms: A policy outlook (pp. 257–276). Central Marine Fisheries Research Institute. Sargent, T. (1987). Dynamic macroeconomic theory. Harvard University Press. Sarkar, D. N., & Kundu, K. (2016). The economic and social importance of unorganized retailers in rural India. Journal of Rural Studies, 43, 159–172. Sathiadhas, R., & Narayanakumar, R. (1994). Price, policy and fish marketing system in India. Journal of Biology Education, 11(4), 225–241. Sherlekar, S.A., & Krishnamoorthy, R. (2015). Principles of marketing. Himalayan Publishing House.

Chapter 9

Fish Processing Sector: Concerns and Policies

9.1 Introduction The fish processing sector has shown high growth potential as an export-oriented business in the country. Most of the processing tasks such as washing, gutting, skinning, grading, and cutting are carried out manually (Nag & Nag, 2007). Since the main raw material for these processing firms is fish, accounting for 70% of the total input cost (TERI, 2017), there is a long supply chain involved in the export process, and inefficiencies in any part of the supply chain are also a cause for concern. This chapter first identifies the supply chain in fisheries export markets before examining the concerns and suggesting certain possible remedial measures. Our field survey was undertaken in Cochin, Kerala, as the majority of the fish landing centres (17) and processing units in India are located here. Cochin port is also one of the largest ports in India. Methodologically, this research was conducted primarily through a qualitative survey, as well as participant observation. Interactions with fishermen, boat owners, auctioneers, and other traders and also the fish processing units, academicians working in this area, and Marine Product Export Development Authority (MPEDA) officials were undertaken.

9.2 Identifying the Supply Chain As explained in detail in Chaps. 6 and 8, the domestic supply chain of fish is lengthy, compared to the one for exports, which is relatively shorter. Once the fishermen catch the fish and unload it on the docks, the auctioneer weighs and grades the fish and negotiates prices with the buyers. Large export firms usually have designated teams representing their companies present at the auction process to procure large quantities of fish, while smaller processing units may procure fish from wholesalers. Many large processing units have their own transport and ice factories for maintaining standards

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Rajeev and S. Bhandarkar, Unravelling Supply Chain Networks of Fisheries in India, SpringerBriefs in Economics, https://doi.org/10.1007/978-981-16-7603-1_9

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while transporting fish to the processing units. The fish is processed per hazard analysis and critical control point (HACCP) procedures (Kulkarni, 2005). The processing units are the most sophisticated node of the supply chain. Unlike fishermen and other intermediaries who have limited knowledge of safety and hygiene procedures, the processing firms have to comply with international standards and requirements of food safety to minimise the possibility of export rejections. Processed fish are then exported to different countries with the help of an exporting agent. At the point of export, regulatory authorities such as customs officials also appear in the supply chain (see Fig. 9.1).

9.3 Fish Processing Sector Based on data from the Annual Survey of Industries (ASI), our analysis shows that in 2016–17 there were approximately 525 fish processing units in the country. Tables 9.1 and 9.2 highlight the important features and salient statistics of the industry, respectively. The fish processing sector generated employment opportunities for approximately 70,000 people during 2016–17, a 66% increase from 2011–12. The sector is also profitable with 15% of fixed and working capital being profits, a growth of 285% over the last five years (see Table 9.2). The share of investment (GFCF) is almost 25% of current fixed capital, showing an increase from Rs. 5908 million in 2011–12 to almost double at Rs. 9536 million in 2016–17, which indicates healthy growth of this sector (see Tables 9.1 and 9.2). On the other side, per unit basis, fixed capital shows an increase from Rs. 55 million to Rs. 85 million and profits from Rs. 6.7 million to Rs. 19 million over the period 2011–12 to 2016–17. Given that this is a highly significant sector for India in terms of export earnings, its concerns need to be addressed for further development of the sector.

9.4 Concerns Based on our field survey, we observed that most of the apprehensions in the sector were regarding scarcity of raw materials as a result of depletion of resources, the length of the supply chain, the bureaucratic red tape, and infrastructure bottlenecks that processing firms encounter (see Rajeev, 2019). The major problem that processing units in Kerala face is the shortage of raw materials. The contribution of marine fish to total production has been steadily decreasing over the years due to overfishing, at a rate far exceeding the rate of replenishment of the catch. The main reason for this has been the indiscriminate granting of licenses to boat owners, without any concern about the availability of resources and the existing number of vessels. Many of these vessels also operate without a valid license, and the

9.4 Concerns

121 Boat owners

Mechanized Boats

Motorized & Non-motorized Boats

Fishermen

Fishermen Average Yield Product

High Yield Products

Low Yield Products

Financier / Auc oneer

Merchants / Wholesalers Merchants / Wholesalers

Company Agents

Retailers/ Vendors

Exporters/ Processors Chain of Domes c Wholesalers

Chain of Retailers/ Vendors

Domes c Consumers

Regulators / Customs Officers

Expor ng Agents

Foreign Consumers

Domes c Consumers

Fig. 9.1 Fisheries supply chain in India. Source Authors’ construction based on field visits; see also Rajeev (2019)

lack of appropriate efforts to avoid this practice has resulted in overfishing. Furthermore, the type of boats and equipment used for fishing have exacerbated this problem. Large vessels such as pair trawlers destroy juvenile fish or even fish eggs, thereby damaging their replenishing capacity, while the use of diamond meshed nets, which when stressed lack a hole for escape, results in a large bycatch.

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Table 9.1 Snapshot of the fish processing sector in India for 2016–17

Characteristic

Value

Per unit

No. of factories/units

525

–

Fixed capital (Rs. crore)

4508.67

8.59

Working capital (Rs. crore)

2376.77

4.53

No. of workers

59,314

113

Total persons engaged (no.)

70,048

133

Value of output (Rs. crore)

3836.91

7.31

Gross fixed capital formation (Rs. crore)

953.67

1.82

Profits (Rs. crore)

1011.40

1.93

Note Rs. 1 crore = Indian rupees 10 million. Source Computed from Annual Survey of Industries 2016–17, Central Statistical Organisation (CSO), GoI; also see Rajeev (2019)

Table 9.2 Fish processing sector in India: salient statistics (2011–12 to 2016–17) No. of units

Fixed capital (Rs. crore)

Total persons engaged

GFCF (Rs. crore)

Profits (Rs. crore)

2011–12

390

2150.42

42,081

590.86

262.51

2012–13

462

2180.97

36,773

422.47

451.67

2013–14

466

2460.08

44,178

525.29

573.81

2014–15

427

2907.38

53,202

519.72

869.47

2015–16

534

4188.08

65,825

906.53

1209.92

2016–17

525

4508.67

70,048

953.67

1011.40

Note GFCF: gross fixed capital formation; Rs. 1 crore = Indian rupees 10 million. Source Compiled using Annual Survey of Industries Reports 2011–12 to 2016–17, CSO, GoI; also see Rajeev (2019) 1 crore = 10 million

In addition to overfishing by Indian fishermen, the encroachment of foreign vessels into Indian waters is becoming a concern. These large foreign vessels with big nets capture large quantities of fish while destroying the smaller ones. This leads to an unsustainable harvest of marine fish products and has resulted in large-scale protests by Indian fishermen. The Dr. Meena Kumari Committee Report highlights the problems of illegal, unreported, and unregulated fishing arising from foreign fishing fleets (https://lexquest.in/meenakumari-committee-report-an-analysis/). The scarcity of raw materials has also been due to the increasing domestic demand for fish as a result of rising income levels. This has led to domestic and international suppliers competing with each other making the scarcity of raw material even more pronounced. This decline and uncertainty in the supply of raw materials has led to the export processing business becoming less profitable. Many of these processing units have made substantial investments in plants and machinery with

9.4 Concerns

123

most of them complying with high international standards required for EU certification. However, due to the scarcity of raw materials (fish), they are operating at only about 25% of their installed capacity (Rajeev, 2019). Along with the scarcity of raw materials, the decline of artisanal fishing and the length of the supply chain has negatively impacted the processing units by increasing operating costs. The presence of large trawlers and boats is increasingly affecting the livelihood of small-scale fishermen. Since these small fishermen mainly use small, non-motorised boats, the fishing methods adopted by small fishermen have a lower environmental impact on the fragile ecosystem. These fishermen often fish near the coastal waters and return to shore on the same day which helps improve the freshness of their catch. Large vessels, on the other hand, remain in the sea for many days at a stretch and often do not even return to the shore due to the high fuel cost involved. Once the catch is brought to the shore, the fish have to go through other intermediaries such as financiers, auctioneers, and purchase agents. Such a long process in addition to substandard methods of transportation and storage reduces their freshness and quality (e.g. the quality of ice used by vessels is often not up to the mark and can cause contamination). All of these collectively raise the costs to be borne by factories. The infrastructure bottlenecks within the country also contribute to additional costs for the processing factories. Infrastructure in the landing centres is substandard, with hygiene conditions not meeting the standards of international agencies. Thus, when inspection agents come from importing countries such as the USA, establishing India’s superiority in the export markets becomes a problem. Furthermore, the transportation of the produce from the landing centre to the processing units is done by large refrigerated trucks which are rather expensive. The pitiful road infrastructure in the country damages these vehicles, inflating costs for the processing firms. Once the produce reaches the processing unit, it requires constant refrigeration and hence an uninterrupted supply of electricity. However, the electricity shutdowns have forced factories to invest in generators, involving an additional cost. Another important infrastructure concern relates to the absence of airport connectivity to the Cochin port. East Asia is not connected by air at all. Since all consignments to EU or Tokyo transit via Dubai, this reduces freshness besides increasing costs. Especially for ornamental fish (live fish), better air connectivity and swift delivery could be really helpful. During exports, developed countries such as Canada and Australia require testing of the consignments for the presence of specific pathogens. India, however, does not have a designated office for carrying out these tests resulting in the rejection of certain exports. Regular inspection of products by the customs office in the company premises is another issue which increases costs of the processing units. Companies are of the view that at least those units with a good track record should be given a certain level of exemption. Processing units face problems not only in the export of processed fish but also during imports. Many firms import raw fish for further processing and re-export it to overcome the problem of raw material shortage. However, several bureaucratic hurdles are coming in the way of imports. Certain officials reported delays in obtaining sanitary import permits from the Department of

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Fisheries required for the import of fish. However, even after obtaining the necessary permits, it was reported that clearing a cargo often takes up to two weeks in India. This increases transaction costs and the possibility of deterioration of quality. Even importing machines for the processing of fish is cumbersome which increases transaction costs for the units (Rajeev, 2019).

9.5 Concluding Remarks and Policy Suggestions To address these concerns, policy interventions on several fronts are necessary (see Rajeev, 2019). To overcome the problem of scarcity of raw materials, overfishing leading to the depletion of resources needs to be curbed. Laws that are in place to prevent this need to be strengthened and strictly enforced. Since there are around 5000 mechanised boats already present in Kerala, the government also needs to regulate the granting of fishing licenses and monitor the use of detrimental fishing equipment. Given the scarcity of raw fish for processing and underutilisation of the processing unit’s capacity, import of fish for re-processing needs to be encouraged. Categorisation of the imports of fish to India into final consumption and re-processing for export can help streamline the bureaucratic procedures. Since export items need to comply with the regulations of the importing country, clearance of those should be done swiftly based on a written declaration that they will be used for processing and re-exports only. To further aid the export process, either an existing institution must be delegated or a specialised laboratory needs to be created to test for pathogens. The quality of the produce being exported can also be improved by resolving the issues in the supply chain of fish. Boat Owners Associations, in this regard, complained that the actual producers of fish (boat owners and fishermen) have no say in the pricing of their products. The middlemen have the most power in the value chain and pocket more than what fishermen get (as per a memorandum by the Boat Owners Association dated 08-11-2018). One possible solution to this problem is the establishment of government-backed cooperatives which provide financial assistance to the fishermen besides helping them market their product. The direct selling of fish through cooperative societies or other un-exploitative agencies can reduce or eliminate the role of middlemen and facilitate fishermen to realise better prices. The Kerala government has recently announced a new policy stating that fishermen would have the first right over the catch. It is necessary to examine carefully how efficiently operationalise such a policy takes place. Discussions with the Boat Owners Association members also clearly indicate that all members of the supply chain need to be educated about certifications necessary for exporting fish to other nations as part of phytosanitary measures (Rajeev, 2019). While processing firms are well aware of these rules due to their frequent interactions with importing countries, fishermen need to be trained on correct handling and storage procedures. If one could reduce the procedural hurdles and resolve the supply chain inefficiencies, India can turn out to be an important processing hub. The government also

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needs to invest in improving the infrastructure in landing centres by providing proper sanitation and drainage facilities. Better physical infrastructure facilities in terms of good roads and quality supply of electricity are other necessary steps that need to be considered. India now has a small percentage of high-value products in its export basket. Given the competition, the Indian industry needs to improve the supply chain to move more towards high-value products. Establishing proper air connectivity to some of the important exporting locations can help improve India’s export competitiveness by reducing time and cost. If some of these required measures are taken up by the respective authorities, there is a greater possibility of the processing industry meeting its full potential.

References Kulkarni, P. (2005). The marine seafood export supply chain in India: Current state and influence of import requirements. International Institute for Sustainable Development. Nag, P. K., & Nag, A. (2007). Hazards and health complaints associated with fish processing activities in India—Evaluation of a low-cost intervention. International Journal of Industrial Ergonomics, 37(2), 125–132. Rajeev, M. (2019). Fish processing sector in Kerala: Concerns and policies. Policy Brief 24, Institute for Social and Economic Change. TERI. (2017). Cluster profile report—Veraval seafood processing industries (14 pp). The Energy and Resources Institute [Project Report No. 2014IE15].

Chapter 10

Summary and Concluding Remarks

The increasing importance given to customer satisfaction along with improving the businesses’ competitive advantage has led to the rapid transformation in business operations to give greater importance to supply chain management. A supply chain is defined as ‘the network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer’ (Christopher, 1998). As can be understood, supply chains, therefore, consist of large networks of people including producers that manufacture a product and other agents that process, package, store, transport, and sell goods through a chain of traders. Consequently, inefficiency in any part of a supply chain can turn the entire business into an unprofitable and inefficient one. In the last few decades it has become a key tool in improving the operational efficiency of businesses, especially for advanced countries. Each large corporation today is trying to optimise logistics activities, improve quality and customer satisfaction, and respond to growing customer demands. Even for developing countries, to remain competitive in the international market, maintaining an efficient supply chain has become critical. Among the supply chains of various products, the food supply chain assumes significance as one needs to maintain freshness and hygiene when the produce is in transit. Further, among various food products, the supply chain of fish and fish products is all the more important due to their perishable nature. Furthermore, with the development of aquaculture, this sector has assumed prominence across all regions irrespective of it being landlocked or coastal. Thus, a large body of literature has developed that concentrates on various country-level experiences. In the case of India too, with the production of marine, inland, and aquaculture prevailing, some research has been conducted concerning supply chain issues of the fisheries sector (see Kotni, 2016; Rajasenan & Rajeev, 2012). However, as mentioned above, most of these studies are localised and touch upon only certain aspects of the supply chain. In other words, they are not comprehensive studies of the sector on the whole starting from fishermen to the fork for all three segments mentioned. They are also often silent about how traditional retail chains are changing and what the © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Rajeev and S. Bhandarkar, Unravelling Supply Chain Networks of Fisheries in India, SpringerBriefs in Economics, https://doi.org/10.1007/978-981-16-7603-1_10

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emerging trends in the sector are post-liberalisation of the Indian economy. Some of the more comprehensive works on the subject (see Srivastava, 1985) are also dated. Given such research gaps, this study attempts to comprehensively map the existing supply chains for the marine and inland fisheries sectors through field visits to different parts of the country. Simultaneously, we also present an analysis based on secondary data and literature. We begin with a review of literature in Chap. 2 by first looking at the importance of the fisheries sector and the key characteristics of its supply chains. The literature on the management of supply chain for various countries is presented to get a global view. Within the literature on the fisheries supply chain, conditions of the small fishermen is a major issue of research and we present some literature on this subject. A comprehensive review of important Indian literature is undertaken to derive research gaps to be filled. Though this book is on India, to get a global perspective, we present a discussion on supply chain issues of different countries by considering certain specific fisheries products in Chap. 3. We take up cases from across the globe by considering Asian (Bangladesh, Nepal, a landlock nation and the Maldives, a small island developing state), African (Egypt.), and Latin American (Peru) nations. These countries show interesting supply chain features, with some of the Asian countries showing features quite similar to that of India. Bangladesh is a case in point. In the case of Bangladesh, three important rivers, viz., the Ganges, the Brahmaputra, and the Meghana flowing through Bangladesh make it a land of opportunity for inland fisheries. The supply chain of Bangladesh is seen to have a similar structure as India with the main players in the supply chain being the Aratdar (or, auctioneer) who buys the fish from traders and earns a commission. Aratdars, often, are the capital owners who give loans to the other agents with the promise to sell fish through him. In India too, we have similar types of agents playing a significant role in the supply chain. There are, however, other countries that show certain unique features not present in India. For example, the supply chain of Maldives was characterised by the catch being traceable from the fisherman to the consumer. Along with accounting for traceability, the fisheries sector of Bangladesh and Maldives have also adopted sustainable practices to preserve the fragile ecosystems. The Maldives fishermen have undertaken pole and line fishing and protection of juvenile stock and breeding areas. The government has also imposed policies prohibiting net and trawler fishing, protecting sharks and turtles, and banning poison and blasts at sea. Similarly, Nepal has undertaken measures to prevent overfishing by implementing programmes for seasonal bans on fishing, prohibition on the use of mesh nets, etc. The other unique feature of the supply chain in the Maldives is that the Maldives is also known to be fisher-friendly. Fishermen are at sea for a short period on safe vessels, often returning the same day. They are also highly paid, unlike in the Indian fisheries sector where they are often exploited and received the lowest share of the consumer rupee. From the selected international supply chain analysis, we next move on to the Indian scenario in Chap. 4. To begin with, for understanding the role of the sector in the macroeconomy, secondary data from various sources is analysed focusing on both domestic and international market situations. Our analysis presented in Chap. 4

10 Summary and Concluding Remarks

129

reveals that the sector has grown substantially in the last two decades and contributes significantly to both GDP and foreign exchange earnings of the country. The fish production in the sector has also increased from 11.43 MMT in 2016–17 to 12.59 MMT in 2017–18, with the inland sector contributing 71% to the share (DoF, 2018). This has been the result of the depletion of marine resources and subsequent investment in inland fisheries. The exports of marine products in India have also increased in value and volume, with the export basket diversified from primarily shrimp to a variety of products being exported to 100 countries today. Despite this, India faces a plethora of non tariff measures (NTMs) from importing countries, particularly the EU and the USA. From the secondary data, we move on to our primary survey-based findings beginning with a description of the survey methodology in Chap. 5. We have visited various locations in Kerala, Karnataka, and Assam and collected information from fishermen, boat owners, union leaders, officials, and other stakeholders. We present our supply chain analysis in two parts—first from fishermen to the wholesaler and then from wholesalers to the retailers. We also locate various peripheral activities to present a comprehensive picture. From our survey, in Chap. 6, we note that due to the overexploitation of the marine sector for many years there is a severe scarcity of resources and fishermen, therefore, need to go to the deep sea for a good catch. The vessels necessary for venturing to the deep sea are much more expensive. With the costs of these boats being substantial, the fishermen face problems in obtaining capital. The fishermen are usually not able to manage such resources, and hence, a class of agents, viz., financiers/money lenders, has come to play an important role. As a result, the financier acquires a significant position in the entire supply chain and gets the first right on the produce. In many locations that we visited, it is he who auctions the catch through his employees and plays the all-important role of a price maker. During our interviews, many respondents also reported that the financier cum trader often engages in a collusive agreement with the buyer, which at times leads to rent-seeking behaviour. Ironically, even though the fishermen and the boat owners invest their labour and resources for production, they do not have the first right to the catch. They divide the auctioned value of fish (net of operating cost) after making required payments to the financier (auctioneer) in the ratio of 60:40. As there are a large number of fishermen in the boat (usually around 10), each fisherman gets only a small share. Thus, the actual producers who toil day and night in the deep sea appear to get exploited in the process. After the sale of the products by the auctioneer to the large traders/wholesalers, the fish changes hands to other smaller wholesalers till they reach the retailer. As a result, consumers pay a high price and the quality of fish also suffers. One possibility to provide a better share to the actual producer and ensure value for money to the final consumer is to encourage government-supported cooperatives among fishermen. These cooperatives should be made available sufficient credit so that they can own large vessels. Marketing cooperatives can also be created to buy fish from the fishermen at a good price. In the process, one can cut down the long chain of traders in the supply chain. In the state of Kerala, certain auctions take

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place through Matsyafed, its cooperative society. Similarly, other states should also encourage fishermen societies and self-help groups to ensure equity. Our field visits have also revealed that the fishermen are often not organised in terms of workers’ union or otherwise and therefore lack bargaining power. To get a macro-picture, we analysed the NSSO data in Chap. 7 which indeed sheds light on the inadequate work conditions in the fisheries sector in India. Remunerations received by fishermen were often insufficient to support a basic standard of living for their families, with per capita consumption levels well below the poverty line for more than 40% of workers in the industry. Marine fisheries, however, provided better wages compared to inland fishing. Despite the low wages, working hours were excessive with all workers working in full intensity throughout the workweek, and conditions of work were often hazardous. Thus, by taking up indicators of decent work developed by the ILO, we observe that the sector lags in most of the indicators. Perhaps an increase in the number and expansion of trade unions across the industry could help enhance the work conditions. Moving on to the retailing business in Chap. 8, our survey reveals that it has undergone drastic changes in India since globalisation. Various sophisticated retailing businesses have emerged in this segment, and we have attempted to map them comprehensively. In particular, four different types of wholesale to retailer business organisations were observed. First, from traditional wholesalers to the smaller (kirana) shops, pavement sellers, or headloaders. Another emerging format is from a multinational wholesaler (like Metro Cash and Carry) to retail business owners or bulk buyers such as hotel owners. Third, from wholesalers to sophisticated stand-alone stores and supermarkets. The most recent development in this segment is the emergence of e-retailing companies like Fresh to Home. Our primary survey showed that various types of retail channels are competing with one another to ensure that they have an upper hand in the market. Previously, the sector was dominated by unorganised retailing such as headloaders and pavement shops where consumer familiarity was one of the biggest advantages they possessed. Today, however, the modernisation of the sector has seen the dominance of organised retailing. This move towards organised distribution of the product has been the biggest change witnessed in the last few years. Modernisation and easing of restrictions concerning foreign participation through direct investment, besides demand-side factors like increase in income, demand for hygienic products, the importance given to food and safety standards, and traceability have played a role in this transformation enabling increased retail volume sales through channels such as supermarkets and specialised shops, especially in major cities. Innovation in any form seems to give the firm an upper hand in the market. Most retailers today have undertaken some initiative in terms of addressing consumer needs, developing new marketing channels, and adopting innovative marketing strategies. As seen through our field survey, multinational companies such as Metro have introduced fishery professionals in their buying and sourcing teams, which in turn have improved methods of catching fish and handling raw material; online retailers such as Fresh to Home provide door-to-door delivery within a few hours, ensure traceability of produce and even offer ready-toeat solutions of fish products. The importance of technology is another factor that

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has played a critical role in improving the marketing of fish. Mobile phones ensure that fishermen can take their produce to the landing centre which will get them the best price. The development of mobile apps, such as the one introduced by Fresh to Home, having pictorial representations, ensures that even illiterate farmers can sell their produce using such platforms. This transition from traditional headloaders to modern retailing is also because of the increase in the disposable income of Indian consumers during the last few decades. Consumers today prefer shopping in a better environment, with better quality produce, parking facilities, air conditioning, salespersons, etc. The study of retail channels within the fisheries sector puts forth an interesting finding from Kerala and Karnataka. It is seen that despite the emergence of new, modern channels of shopping such as supermarkets, multinational outlets, e-shopping, informal supply sources (especially kirana stores) continue to persist. Even though domestic fish marketing in India has taken huge strides in a positive direction in the last few years, a large part of the sector is still unorganised in India. The economics behind the prevalence of such diverse channels, where modern retail outlets coexist with traditional channels such as headloaders, in the same neighbourhood, is a challenging theoretical issue. Despite these new developments in the retailing segment, overall we observe that the supply chain of fisheries is still unregulated in the country. The lack of traceability is a significant concern that has led to unregulated and even illegal fishing in the country. Selling fish from different vessels in one auctioning process makes it difficult to trace the fish back to its origin. This not only hinders the implementation of regulations to promote the sustainability of fish but also leads to problems concerning quality and hygiene. At the auction, since different species of fish are put together from different sources, there is also the possibility that the presence of diseasecausing bacteria present in one batch of fish may lead to cross-contamination of the entire produce being auctioned. Lack of traceability further makes it harder to detect the source of contamination to mitigate its effects. The supply chain of fisheries in the country is further plagued with problems related to infrastructure. While the landing at the centre at Kochi port was relatively well developed in terms of concrete flooring and the presence of auction facilities, ice factories, net manufacturers, and storage facilities within the harbour premises, most landing centres still require extensive investment in infrastructure. Most landing centres still have a sand surface, are unhygienic, and lack basic storage and grading facilities. There is also a lack of understanding about the need for cold storage systems within the chain. The lack of good quality ice and insulated trucks often leads to a large percentage of the produce deteriorating in transit. Chapter 9 shows that in addition to domestic marketing, India is trying to harness its potential in the export processing market. However, overfishing and unscientific fishing methods and the subsequent scarcity of raw materials have resulted in the processing industry not being able to function to its full capacity. Fishing methods followed in India, such as lighting which uses LED lights are destructive, further reducing fish stock. A scientific environmental impact assessment needs to be conducted before adopting any such new methods. Fishing techniques such as

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the type of nets used (diamond vs. square) also need to be strictly monitored with penalties imposed for violation. Since raw fish is the most important input for the processing industry, it is important to ensure that the best hygienic practices are followed by the agents involved. Such measures should start from the time a fish is caught. Given the fact that the fishermen are not well educated, proper training is required to inculcate the best practices in hygiene and storage practices among all the stakeholders, together with developing a good infrastructure. The length of the supply chain also has an impact on the exports from India since the longer the supply chain, the greater is the possibility of the produce deteriorating during transit. Lack of affordable credit is a major barrier to owning fishing vessels by fishermen. Without formal credit access, the financier as a middle man comes into the picture, bringing the auctioneer with him. Subsequently, the supply chain lengthens. If some of these problems discussed above can be adequately addressed, the sector will be able to flourish in a sustainable manner benefitting all stakeholders, especially the fishermen.

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