Coastal and inland fisheries: old challenges and new

opportunities

Sloans ChimatiroSenior Fisheries Advisor, NEPAD Agency, Johannesburg, South Africa

Presented at the Hotel Victoria, Pointe aux Piments, Mauritius, 23 April 2012

Outline of the presentation

1. Features of the Small Island States2. Vulnerability of Small Island States3. Importance of fisheries in SIDS4. How can SIDS optimise the wealth-

generating potential of fisheries? 5. Lessons from best practices 6. Conclusion

Key Features of Small Island Developing States

1. The United Nations currently classifies 52 countries and territories as Small Island Developing States (SIDS)

2. Forty-three of SIDS are found in the Caribbean and the Pacific regions.

3. SIDS are a diverse group of countries with ≥ 50 million inhabitants

4. The group comprises countries that are relatively rich and those that relatively poor

5. SIDS are extremely dependent on the sea and its living marine resources for their existence.

Small Island States :Vulnerability

1. small size; 2. remoteness; 3. vulnerability to external (demand and supply-side)

shocks; 4. narrow resource base; and 5. exposure to global environmental challenges (sea level

rise, destruction of coral reefs critical to food security and tourism)

6. waste pollution and acidification of the oceans and resultant loss of biodiversity

Small Island States :Vulnerability to climate change

1. Many people in SIDS live in the low elevation coastal zone (LECZ) (coast area of ≤ 10 metres above sea level).

2. LECZ are vulnerable to sea-level rise, storm surges, floods and other climate change-induced hazards.

3. Overall impact of climate change is being felt via: water resources availability, agriculture and food security, and the protection of coastal zones

4. Destruction of coral reefs critical to food security and tourism)

Small Island States :Vulnerability to trade imbalances

1. SIDS are economically vulnerable due to their remoteness and smallness (resulting in logistical costs)

2. Susceptibility to natural disasters, & fragile ecology, 3. Limited institutional capacity (in part due to limited critical mass), 4. Limited ability to diversify, 5. Strong dependence on a narrow range of exports, and high import content

(especially strategic items with volatile prices: food and fuel)6. Rapid rise in their debt burden (due to the lack of economies of scale, high

transport costs, low trade capacities and increasing trade deficits)7. More recently, decreasing workers’ remittances (due to global economic

downturn)8. SIDS are disadvantaged in the negotiation of bilateral agreements because

they lacked a collective bargaining position as well as information on the market value of their (fish) resource

International Logistics Performance Index (LPI): Comparison with some of the SIDS

LPI Rank Country LPI28 South Africa 3.4658 Senegal 2.86

Sao Tome & Principe

2.86 (2007)

66 Uganda 2.8278 Bahamas 2.75120 Comoros 2.45135 Solomon Islands 2.31144 Fiji 2.24149 Guinea Bissau 2.10Source: World Bank 2010LPI compares transport costs, quality of infrastructure (e.g., roads, ports, etc), tracking and tracing of consignments, and timeliness of delivery;

Importance of fisheries to SIDS

According to the UN –Department of Economic & Social Affairs (2010):

1. In some SIDS fisheries account for ≥ 50% of exports (UN 2010)

2. Subsistence fishing supplies 50-90% of animal protein diet of people in rural areas and remote islands

3. In Pacific tuna fisheries contributes ≥10% of GDP

SIDS and the Extent of their EEZ

EEZ of African ISDS

EEZ of Caribbean ISDS

Country and Size of EEZ

Country Population EEZ (km2)

Cape Verde 240,000 800,561km2

Comoros 794,683 163,752km2

Madagascar 21.9 million 1,198,722km2

Mauritius 1,303,717 1.9million km2

Seychelles 87,463 1,374,000 km²

Sao Tome & Principe

200,000 165,364 km2

Country and Fish production/Consumption

Country Fish Production (tons)

Exports (tons)

Per capita supply (kg)

Fish/Animal Protein (%)

Cape Verde

18,328 14,524 11.6 11.7

Comoros 16,000 0 19.8 56.3Madagascar

159,035 44,776 7.4 19.6

Mauritius 8,476 132,554 22.8 18.4Seychelles

66,239 63,471 61.0 40.6

Sao Tome & Principe

4,150 6 26.5 49.3FAO Yearbook (2009)

Challenges of fisheries in the SIDS

1. Fish as an export commodity exerts pressure on the resources with potential of overfishing

2. Knowledge of the level of stocks might be lacking resulting in poor management plans

3. Poor knowledge of economic underpinning of the fisheries resources results in rent dissipation

4. Poor governance mechanism which is manifested in Illegal, Unreported and Unregulated (IUU) Fishing

5. Unfavourable trade mechanisms which leads to loss of value and wealth

6. Wealth loss through Foreign Fishing Agreements (FFA), (assess agreements are provided for under UNCLOS)

Impact of governance structure on IUU FishingCountry Catch value

calculated from FAOstatistics (2003) US$ million

AverageGovernanceScore#

IUU as proportion ofestimated totalcatch

IUU value US$ million

These figures are from country case studiesNamibia 532 0.347 0.0% 0Mozambique 215 -0.393 15.0% 38Kenya 15 -0.735 20.0% 4Seychelles 137 -0.148 5.2% 8These figures are extrapolated using the case studies above (one parameter model)Morocco 734 -0.189 7.5% 59Mauritania 193 -0.209 8.1% 17Senegal 423 -0.176 7.1% 32Cape Verde 11 0.353 0.0% 0Guinea-Bissau 13 -0.872 29.1% 5Cameroon 37 -0.868 28.9% 15Equatorial Guinea 2 -1.148 37.8% 1Sao Tome & Principe 4 -0.323 11.7% 0South Africa 626 0.431 0.0% 0Madagascar 247 -0.121 5.3% 14Comoros 22 -0.827 27.6% 8Tanzania 91 -0.451 15.7% 17Eritrea 13 -0.977 32.4% 6Mauritius 18 0.659 0.0% 0

Source: MGRA.2005.

Wealth-loss in the value chain

Fig 1. Share of value of Nile Perch from Tanzania

Wealth loss in the value chain

Fig 2. Share of value of Moroccan anchovy sold in Italy

How are SIDS losing potential wealth of their fisheries Resources?

1. In general, according to an EU study (IFREMER 1999), Financial payments (compensation) for Fisheries Access Agreements to developing countries ranges between 2 and 17% (average 2.6%) of the catch value

2. MRAG (2012) estimate that the EU is paying between 11–13% of the market value of tuna;.

3. In comparison, Japan and Korea pay approximately 6% of the market value of their tuna catch under agreements in the Pacific Ocean (MRAG 2012).

4. The US pays approximately 22% of the catch value (Mwikya 2006). 5. Compared with other natural resources such as minerals, forestry

and crude oil (usually 30%) and also bearing in mind that investment in fishing is much less compared to mining

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Total Community and shipowner contributions (€/tonne)

Average world price for whole frozen skipjack and yellowfin (€/tonne)

Figure 3 Comparison of the total community and ship owner contribution for tuna (€/tonne) with the world market price for whole tuna (skipjack and yellow fin) (€/tonne) (Source (MRAG 2012)

Why are Fisheries Resources “Wealth”?

– What do we mean by wealth? In economic terms, wealth is the value of assets owned by a person or community.

– Africa’s fish resources represent renewable natural capital capable of generating substantial amounts of wealth over time and into the future

– Therefore, well-managed fisheries can produce significant economic returns – resource rent (surplus value or profitability) and be part of a portfolio of wealth-producing assets, and contribute to economic growth and welfare

Wealth Generation Potential of African Fisheries

Initial economic valuation undertaken by the NEPAD Agency and endorsed by the Conference of African Ministers of Fisheries & Aquaculture (CAMFA) is as follows:

–Africa’s fisheries as a whole has the first sale value of about US$ 4,861 million per year –Well-managed fisheries can produce annual resource rents (Profitability) between 30% and 70% of the first sale value. –Our estimate used a conservative rule of thumb of 40% of turnover, to give potential annual fish resource rent generation for Africa is about US $2 billion.–However, capitalising this annual value at a discount rate of 9% gives an estimate of the wealth value of US$22 billion.

Fisheries Opportunities for SIDS

1. Demand for fish is rising globally, including Africa (rising middle-class)2. The fisheries constraints of SIDS were first recognized by the 15th

Session of COFI in 1983 (Special Problems of the SIDS in the Management and Development of Fisheries under the New Regime of the Oceans)

3. The special case of SIDS within the context of sustainable development was first formally recognized by the UN (UNCED) in Rio de Janeiro in 1992.

4. More awareness among SIDS (and trading partners) of the need for good fisheries governance

5. International agreements provide for better management of fisheries resources (UNCLOS 1982 including the right to exploit EEZs; FAO Code of Conduct for Responsible Fisheries (1995) and the UN Agreement on Straddling and Highly Migratory Stocks (1995)

Fisheries Opportunities for SIDS

1. Collaborative regional management of fisheries (e.g. Tuna RMFOs, ICCAT in the Atlantic, IOTC in the Indian Ocean and WCPTC and IATTC in combination with the Forum Fisheries Association in the Pacific

2. The Global Island Partnership (GLISPA) (launched in 2006) is a global entity working to help islands around the world conserve and sustainably utilize their invaluable natural resources

Options for better returns

1. Fishing should contribution toward Sustainable Exploitation (MEY vs. MSY)

2. The need to improve knowledge of the fishery (better data collection and analysis)

3. Good governance aimed at elimination of IUU Fishing 4. Support integration of the national fisheries sector into

the global economy (e.g. Via Joint Ventures rather than FFA). Good examples are Namibia

5. To realize the massive wealth-generating potential, it is important to create an enabling environment that provides fishers with incentives and confidence to invest in the fish resource itself

Effort de pêche

Rev

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RT

MSY

CT

Estimation of rent using octopus Mauritania fisheries

34.000t

26.600tPrice$3.500/t

$93m

100100

Surplus effort 31%

OPTION 1: keep 10 boats and reduce f à fMSYCA=$119m

Rent =$26m

Cost =$93m

Effort de pêche

Rev

enu,

Coû

t, R

ende

men

t

RT

MSY

CT

Estimation of rent using octopus Mauritania fisheries

34.000tPrice$3.500/t

Cost/boat$0,93m

100

Surplus effort 31%

OPTION 2: Reducing f by reducing the number of boats

70

CA=$119m

Cost=$65m

Rent=$54m

Best Practices among SIDS

1. Western and Central Pacific Ocean (WCPO) tuna fisheries capture ~2.4 million tons annually

2. The fishery is managed by the Western and Central Pacific Fisheries Commission (WCPFC)

3. Pacific Island Countries (PICs) maintain the sovereign right of coastal States to determine catches within their EEZs

4. WCPFC develops measures for the high seas 5. Eight PICs have organized as the Parties to the Nauru Agreement (PNA;

Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Palau, Papua New Guinea, Solomon Islands and Tuvalu).

6. The PNA are managing the WCPO purse seine fishery, maximizing economic returns from their members’ coastal resources and developing their domestic industries and economies.

7. Vessel Day Schemes (VDS) are used, resulting in revenues from fishing access fees to comprise over 40% of some of the PNA members’ GDP.

Where are Best Practices?1. A Vessel Day Scheme (VDS) for controlling purse seine tuna fishing

effort within the national waters of eight members of the Parties to the Nauru Agreement was implemented in December 2007.

2. While originally conceived as a mechanism to control fishing effort, the VDS has the capacity to complement and possibly replace historical bilateral access agreements through creation of an economic instrument capable of optimising rents from foreign fishing by defining, selling and trading a limited supply of harvesting rights owned by coastal States (MRAG 2012).

3. To supplement the VDS, the PNA adopted further conservation and management measures for foreign fishing vessels in 2008 which included 100% purse seine observer coverage, a three-month closure of FAD fishing, and prohibition of fishing by PNA-licensed vessels in high seas pockets.

Conclusion and way forward

1. Increases awareness amongst key policy makers of the true value of the fish resources

2. Can create an enabling environment that provides fishers with incentives and confidence to invest in and manage the fish resources

3. Develops practical strategies that can help realise wealth generation potential of fish resources

4. Strategies for adaptation to climate change (NAPAS) should include fisheries

5. SIDS should adopt collective bargaining position on international negotiations

6. SIDS should share information on the market value of their fish resource

7. SIDS should be more integrated into the mainland economies in order to tap into regional markets