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" DOMESTIC FISH MARKETING OPPORTUNITIES FOR

'

MARINE FISHERIES SECTOR IN INDIA"

. R.Narayanakumar and R.Sathladhas

Central Marine Fisheries Research Institute, Cochin-682 018

Introduction

Fisheries have em'ergedas the fastestgrowing food productionsector in the Indianeconomy. The market performance hastransformed fisheries from subsistencesector to the status of a multi~croreindustryduring the last six decades. Besides,serving as sources of income,employment,livelihood, food security, the sector alsoprovides a comparatively cheaper sourceof animal protein to the population. Fishaccounts for 15-54 per cent of the animalprotein intake in Asian countries, whichcontributed 63.17 per cent (2003) of globalfish production (Modayil, 2005)

The fish production (both marine andinland) of the country has also increasedfrom 0.75 million tonnes during 1950':51to6.4 million tonnes in 2003-04.This increasein production has been possible due to theimprovements in harvE!stingtechnologies,post-harvest fishery infrastructure, productdiversification,andconsistentdemand in theinternal and export market anddevelopments in the processingsector. Themarine fish landings alone has been valuedat Rs.13,019 crores at the landing centreJevelduring 2004, whilethe value at the finalconsumer point is estimated at Rs.22,653crores (Sathiadhas et aI, 2005). In theexport side, the share of Indian seafood inthe global fish trade is about 2.42 per cent

1 '.

" .

(2003-04). The current earnings (2004.05)from Indian sea food export is estimatedat Rs.6646crores'through an export of 4.62lakh tonnes of seafood. The contribution ofthis sector to the Indian GoP also registeredan increase from about 0.46 'per cent in1950-51 to 1.16 percent in 1'999-2000,which now stands at around one per centforming about 4.12 per cent of theagricultural GoP. Besides, the sector

-provides employment to about 12 lakhfishers in (primary sector), 15 lakh peoplefn (secondary sector) and another one lakhin the tertiary sector. (Sathiadhas, 2005).

Despite 'the improvements in thesector, the development of the fishingindustry has not been uniform and thebenefitsof thedevelopment arealso notwelldistributed among their differentcomponents. The export market hasreceived the maximum attention whereasthe domestic fish marketing has notreceived the due attention, it deserves. Thisis in spite of the fact that only 15 per cent ofthe fish production is exported and theremaining is chanellised in the domesticfish markets.. only. Hence, it will beappropriateto analyze the opportunities thatexist for the domestic fish marketing vis-a.vis expQrt marketing and the ways ofimproving"the earnings from the sector toachieve a comprehensive development of

,

this vital sector of the Indian economy. With!his theme in focus, this paper focuses onthe following issues, which will be helpful to

.. evaluate the opportunitiesthat lie ahead ofus and prepare ourselves to avail them atthe right time.

Growth of fish production in India

The growth of fish production in India(both marine and inland) is given in Table1. It is seen that the share of marine fish

production has declined from 71.8 per centin 1950-51 to 48.20 percent in 2003-04. Thedecline has been gradual over the years andthe loss is offset by the increasing share ofthe inland fish production, which increasedfrom 28.99 per cent to 51.20 per cent in thesame period. The average annual.compound growth rate ranged from 3.35per cent to 4.62 per cent during the last fivedecades. The reason for the stagnation in

..marine fish production can be attributed tothe laroge scale mechanization, morenumber ~f fleets deployed to catch thelimited resources leading to indiscriminateharvest <;>fcertain fishery resources,consistent export demand for certain fisheryresources like shrimps and lack of anyproper regulatory measures forconservation/management. On the other

~ hand, the productionfrom inlandresourcesincreased mainly because of the growth ofcarp culture, scampi culture and catch fromother inland resources.

Domestic marketing

Marketing of fishery resources, unlikeagricultural or other products faces complexproblems mainly due to high perishability.The fishery resources need a lot of effort inassembling, storing, grading and other

.r~;.~;~,;"";h-

",

marketing functions. Marketing of fish ormarket is so important that around whichall the other economicactivitieshave to bebased. Any amount of research onprocessingor productionor technologyhasno meaning, if the marketfor fish productisnot well developed. That is why market iscalled the Manthra for bringingremarkablechanges in the consumptionpatternof fish.(Rao, 2003)

In fish marketing the generalhypothesis is that the conditions ofmonopsony and oligopsony characterizethe fish marketing structure in India atvarious stages and hence the fishermen donot getadvantageof highpriceprevalentinconsumer market (Sathiadhas andNarayanakumar, 1994). The value ofmarine fish landings in 2004 is estimatedat Rs.13,019 crores at landingcentre leveland Rs.22,653 crores (Sathiadhas, 2005)at consumer level, which clearly indicatesthe magnitude of marketing marginsconsumed by the intermediaries ormiddlemen.

The growth of fish production andoverall development of fisheries sectordepend largely on an efficient marketingsystem. In India, about 85 per cent of thecatch is channelised to the internalmarketing system and the rest for exports.Hardly five per cent of fish in the internalmarketing system is marketed bycooperativesand the rest is throughprivatemarketingagenciesandtraders. Inadditionto this, the difference betweenthe price ofthe fish paid by the consumer and thatreceived by the fishers is considered to belarge (Sathiadhas, et.al, 2003). Theefficiency of a marketing system is

:~..~

measured mainly by the producer's sharein the consumer's rupee, which indicatesthe actual amount realized by the producerfor his produce and how much is gone interms of marketing costs and margins.Presently the marine fish marketing in Indiais supply driven and the fishermen do nothave any say in fixing the price of their catchand are left at the mercy of auctioneers ortraders. In addition, the intrinsiccharacteristics of marine fish marketing likeperishability of the produce, seasonality andlow marketable surplus forces fishermen tomake distress sales. (Sathiadhas andNarayanakumar, 1994)

Efficiency of the Marketing System

I The efficiency of marketing system isI indicatedby the proportionof the consumer

rupee that reaches the producer. The

Ihigher the share the more efficient is thesystem and vice versa. The cost of

I marketing and the number of intermediariesdecide the share of marketing margin in theconsumer rupee.

In a case study conducted in the East

I Godavari district of Andhra Pradesh, (1) theprice spread (gross marketing margin), (2)percentage share of the produce( in theconsumer rupee and (3) the percentageshare of marketing margin in the consumerrupee, which are considered as theindicators of the marketing efficiency werecalculated.

The results indicated that the pricespread (which is the difference between the:t:ce paid by the consumer and the price'e~eived by the producer) ranged from~.s.10 per kg for oil sardines to RS.33 /kg-:" :;enaeid prawns during the year. Quality

fishes like mackerel and see)' fish recorded

the price spreads of Rs.18 and Rs.32respectively.

The percentage share of fishermenin the consumer rupee (PSFCR) was

. maximum for varieties like penaeid prawnsannually at 76.87 per cent followed bysharks (69.57%), pomfrets (68.89%), rockcods (68.57%), thread fin breams (67.21 %)and seer fish (68.53%). These varietieseamed the fishermen a consistent share of

the consumer rupee. This is due to theconsistent demand in the distant intemalmarket as well as the external market.

Across the quarters also, these varietieseamed a consistent share of the consumer

rupee.

The percentage share of marketingmargin In the consumer rupee (PMMCR)was maximum for oil sardines (50.89%),followed by ,goatfish (43.12%) an\)barracudas (46.36%). The results indicatedthat the proportion of int~rrnediaries involvedin this marketing channel and the cost ofmarketing are high. In case of oil sardines,the local preference is less and it is mostlymarketed in Kerala and Tamilnadu.

At all India level, judging from the trendof fishermen's share on consumers' rupeeduring 1989-90, 1996-97 and 2003, the fishmarketing efficiency has increased over theyears (Table 2) for most of the varieties.During 2003, fishermen's shat'9 inconsumers' rupee ranged from 45 per centfor silver bellies to 75 per cent for seer flsh.Although the share of producers increasedover the years for quality fishes like seerfish and Pomfrets, there is enormous scopeto enhance the marketing efficiency of lowquality fishes such as silver bellies and

..

",.

lizardfishes in the internal markets.

Marketing costs including transportationraTlgefrom 6 per cent to 13 per cent of theconsumer's rupee.

Export marketing

The seafood export from India hasearned substantial foreign exchange overthe years. The growth of seafood exportbetween 1980-81 and 2004-05 is given inTable 3. It is seen that the quantity of exporthas increased from 75,591 tonnes to4,61,329 tonnes during this period, with anannual average compound growth rate of.7.50 per cent. The value earned fromseafood export also has increased fromRs.234.84 crores to Rs.6,646.69 crores in

the,sameperiod with an average compoundgrowth rate of 14.31 percent.The unitvaluerealized per kg of fish also increased !romR.31.07/kg to Rs.144.08lkg with the averagegrov.lth ra~e.-of6.33 per cent. Our share inthe global seBfood trade of US $58.2billionis about 2.5 per cent.

The important component of ourseafood export basket is frozen shrimps,which account tor about 60-65 per cent in

. volumeand80-85percent invalue. United~tates, European Union and Japan are thethree major importers of Indian seafood.However. during 204-05. the export to USdeclined from 53.153 tonnes(valued atUS$365.84millions) in 2003-04 to 50.045tonnes (valued at US$345.52millions) in2004-05 due to the imposing of anti-9umping charge against India. This gives amessage that we have to get preparedaga:'.'lst such rules of the global trade in thedaysto come to remain in the global marketscenario.- .

In our seafood export, we have beenmostly exporting raw materials only in theform of frozen shrimp, fish, crab and otherproducts. The share of value added fishproducts in our export is around 17 per cent(Table 4). This Table emphasis the fact thatwe have good scope to increase valueadded products in our export basket and theneed to explore all possibilities of includingthem.

Fishery infrastructure

For the development of any industry,infrastructure is an essential component. Infishery also, the post-harvest infrastructureplays a vital role in the development of theindustry in both the domestic and externalmarkets because of the highly perishablenature of fish, bulk production, diversity ofproduction and consumption of fish. Theexisting infrastructure for fish marketing canbe grouped as two categories

1. Physical infrastructural facilities inprimary markets

2. Infrastructural facilities in thedistributionsystem

The physical infrastructural facilitiesinclude the landing centres, harbours,landingjettys and relatedstructures. Theinfrastructural facilities in the distributionsystem include the freezing plants, coldstorage units, ice plants and fish mea! plants.

The growth of this infrastructure during 1992-2005 is given in the Table ~

It is seen that the freezing plants, iceplantshaveincreased in number and theircapacity in the last 13 years. This is anindication of higher frozen seafoodcomponents in our export and the

importancegiven for fn;>zen seafood. Theincreased uses of ice both in the domesticand export market is the reason for thegrowth in ice plants. The use of ice and itsimportance in preserving the fish has beenrealized by the fishers as well as theconsumer, which has resulted in theirincreased usage. These developmentsshould be used effectively in the internalmarketingof fish, wherein the fish is beingtransportedto more than 200-500km fromthe landing centres with the help ofrefrigerated containers and ice packedgrades. This is a positive step for thedevelopmentof distant internal markets inour country,which should be made use ofeffectively.

Conclusion and polley implication

The abovediscussionshighlightedthegrowth of fish production in India, the internalfishmarketingsystemand its efficiency,theexport market and the role of fisheryinfrastructure in the development of themarketingsystems. Based on the abovediscussionand differentstudies conductedin the Price Behaviour and Marketingsystems of marine fisheries at differentmaritime states in India, the followingguidelines are indicated, which will behelpfulindevelopingfish marketingsystemin India

(. Balanced importance should begiven for both domestic and exportmarket due to the observation that 85 percent of catch is channelled to the internalmarketingsystem.

.:. Cooperative fish marketingshould be strengthened since hardly 5per cent of the fish in the internal

.'"

.~. :~~.; .~:........

me.. keting system is markt::ted bycooperatives and the rest is throughprivate marketing agencies and traders.This practice can be extended to performcommon marketing functions likeassembling, grading and storing, which willhelp to irT1prOVethe quality of the productand. also enhance its value, besidesminimizing the share of the middlemen

.:. The price behaviour of certain fishvarieties face wide fluctuations both acrossand within the seasons and hence there isa need for regulation of fish marketingon lines of the agricultural commodities.Though this is a difficult task consideringthe intrinsic characteristics of the marine

fish produce, to a considerable extent, thisregulation can be achieved by establishingsuitable fishery infrastructure like coldstorage and freezing plants at least for acluster of landing centres and located at anoptimum distance from the selected landingcentres/markets.

.:. Thrust for value added products indomestic market also taking advantage ofthe presentday lifestyleof fast foodcultureby marketingready to eat or readyto cookfish products.Links with retail outlet likeFood World, Nilgris and other reputedSuper Markets can be established toimprove the retail fish marketing.

.:. Exploring the possibilities ofproviding support price forcommercially important varieties tosafeguard the interests of both fishermenand the consumer.

(. Identifying and cataloguing ofpharmaceutically important marineproducts

IL

..:-Utilisation of idle capacity of.p~ocessingplans for internalmarketing

..:..The use of ice in fishpreservation should be given moreimportance and itshouldbe prepared fromgoodqualitywater and used inappropriateproportion.

.:. The hygienic fish handling at thelanding centres, whole sale and retail

markets shol.!ldbe ensured by providingadequate freshwater supply,drainage andprotectingthe fishfromflies,rodents, birdsand animals in the marketingyards. It ismoreimportantthat the valueoffishcan beimprovedbyfollowingthese practices,sincethe spoilageis reduced toa greater extent.

.:. Sundryingof fish Insandybeachshouldbe strictlystoppedandmor~overgoodqualitysalt shouldbe used

.:. Sp~ies.wise sorting should bepracticed immediately after the catch.

Shrimps should be graded, beheaded,peeledand de-veinedas soon as possible

.:. The quality standards like fixing\. limits for heavy metals and microbial>-

limitsetc shouldbe imposed.Thebivalvesas far as possible should be depuratedbeforeshucking

.:. Proper and cost-effectivepreservation facilities should beprovided at all retail outlets. Preservationorcoldstorageunitscanbeestablishedon

cooperative basis or by the local bodies

extending the facilities by nominal charges.

The fish retail vending stand developed bythe NATP funded Studies on Fisherwomen

in the Coastal Ecosystems of'Andhra

Pradesh, Tamilnadu, Kamataka and Kerala

may be popularized by providing institutionalsupport for buying them.

Acknowledgements

The authors express their sincere

gratitudeto Prof.DrMohanJosephModayil,Director, CMFRI for the constant

encouragementinpreparationof thispaper.Thanksare alsodue to Shri. K.N Jayan,Smt. Sangeetha K. Prathap, (SeniorResearch Fellows, SEETTD) andShrLS.Tatabbai, Field Assistant (T-1),SEETT Division at Kakinada ResearchCentreof CMFRI for theirpertinent effortsin the preparationof this paper

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International Fish Trade. Food--A!lQAgriculture OrganizationRsheries ReportNo.774: Rio de Janeiro, Brazif, 3-5December 2003.

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November 2005, Bangalore, pp: 19-23-.\~ ,,_.~~~ ~~_.64

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682 014.lndia.pp:246-253..

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Table 1 Growth of fish production in India 1950-2004

Table 2- Percentage share of fishermen in consumers' rupee for different varietiesof fish (1989-90to 2003)

Source: SocioEconomicEvaluationand TechnologyTransferDivision,CMFRI

Year Marine fish Percentage Inland fish Percentage Total fishproduction of total fish production of total fish production(Tonnes) production (Tonnes) production (Tonncs)

1950-51 5.34 71.0 I 2.18 28.99 7.521960-61 8.80 75.86 2.80 24.14 11.601970-71 10.86 61.85 6.70 38.15 17.561980-81 15.55 63.68 8.87 36.32 24.421990-91 23.00 59.96 15.36 40.04 38.361991-92 23.47 57.85 17.10 42.15 40.571992-93 25.76 59.01 17.89 40.99 43.651993-94 26.49 57.04 19.95 42.96 46.441994-95 26.92 56.21 20.97 43.79 47.891995-96 27.07 54.70 22.42 45.30 49.491996-97 29.67 55.48 23.81 44.52 53.481997.98 29.25 54.54 24.38 45.46 53.631998-99 26.96 51.24 25.66 48.76 52.621999-00 28.34 50.10 28.23 49.90 56.572000-01 28.10 49.12 29.11 50.88 57.212001-02 28.30 47.52 31.26 52.48 59.562002-03 29.90 48.23 32.10 51.77 62.002003-04 29.40 48.20 31.60 51.80 61.00

Name of Fish 1989-90 (%) 1996.97 (%) 2003 (%)Seer Fishes 63 68 75tPomfrets 62 60 65Mackerel 54 50 72lRibbonfishes 41 48 53funnies 55 45 63Catfishes 49 56 59Barracudas 53 40 66Silverbellies 41 " 30 45...izardfishes 42 35 56Goat fishes 37 57 59Ravs 39 47 58Whitebait 41 40 61Threadfins 46 42 57

.,Table 3 Growth of sea food export in india 1980-81 to 2004-05 >,

SI.No. Year Seafood export Average unitQuantity Value value

(in tonnes) (Rs. corres) (Rs./lqd1 1980-81 75591 234.84 31.07

2 1981-82 70105 286.01 40.80

3 1982-83 78175 361.36 46.22

4 1983-84 92187 373.02 40.24

5 1984-85 .86187 384.29 44.59

6 1985-86 83651 398.00 47.58

7 1986-87 85843 460.67 53.66

8 1987-88 97179 531.20 54.66

9 . 1988-89 99771 597.85 59.92

10 1989-90 110843 634.99 57.29

11 1990-91 139419 893.37 64.08

12 1991-92 171820 1373.85 80.08

13 1992-93 209025 1768.56 84.61

14 1993-94 243960 2503.62 102.62

15 1994-95 307337 3575.27 116.23

16 1995-96 296277 3501.11 118.17

17 1996-97 378199 4121.36 108.97

18 1997-98 385818 4697.48 121.75

19 1998-99 302934 4627.00 152.74

20 1999-00 340000 5096.00 149.88

21 2000-01 440473 6443.80 146.29

22 2001-02 424470 5957.05 140.34

23 2002-03 467297 6881.1 147.26

24 2003-04 412017 6091.95 147.86

25 2004-05 461329 6646.69 144.08

Average annual compound 7.50 14.31 6.332rowtb rau