Pro-Poor Seafood Trade: Challenges and Investment Opportunities for Small-Scale Aquaculture Farmers Rohana Subasinghe Food and Agriculture Organization of United Nations (FAO) Michael J. Phillips Network for Aquaculture Centers in Asia-Pacific (NACA) WorldFish Center (WfC), Penang, Malaysia A joint presentation from the experiences of FAO and NACA
World annual average per capita consumption of fish and fishery products (kg/capita) 11.5 12.5 16.7 1970s 1980s 2006 14.5 1990s 16.7? 2030
In 2006, 110.5 million tonnes of fish (aquatic animals) destined for human consumption, making an average annual global per capita consumption of 16.7 kg.In 2006, 110.5 million tonnes of fish (aquatic animals) destined for human consumption, making an average annual global per capita consumption of 16.7 kg. In 2030, world population is expected to reach 8.210302 billion.In 2030, world population is expected to reach 8.210302 billion. If a per capita consumption of 16.7 to be maintained in 2030, we will require 137.5 million tonnes of fish, an additional 27.1 million tonnes from 2006 level.If a per capita consumption of 16.7 to be maintained in 2030, we will require 137.5 million tonnes of fish, an additional 27.1 million tonnes from 2006 level. Production from capture fisheries have been levelled off since late 80s.Production from capture fisheries have been levelled off since late 80s. Therefore, additional 27.1 million tonnes will have to come from aquaculture!Therefore, additional 27.1 million tonnes will have to come from aquaculture!
Aquaculture still is the fastest growing food producing sector in the world.Aquaculture still is the fastest growing food producing sector in the world. Aquaculture now accounts for almost 50% of the global food fish.Aquaculture now accounts for almost 50% of the global food fish. In 2006 51.7 million tonnes of aquatic animals worth USD 78.8 billion were produced globally.In 2006 51.7 million tonnes of aquatic animals worth USD 78.8 billion were produced globally. Given the projected population growth, an additional 27 million tonnes of aquatic food will be required by 2030, at least to maintain the current per caput consumption.Given the projected population growth, an additional 27 million tonnes of aquatic food will be required by 2030, at least to maintain the current per caput consumption.
Since 1970, aquaculture sector maintained an average annual rate of growth of 8.7 percent worldwide, andSince 1970, aquaculture sector maintained an average annual rate of growth of 8.7 percent worldwide, and 6.5 percent per year when excluding China.6.5 percent per year when excluding China. The rate of growth of aquaculture production between 2004 and 2006 were 6.1 percent in volume and 11.0 percent in value.The rate of growth of aquaculture production between 2004 and 2006 were 6.1 percent in volume and 11.0 percent in value.
Aquaculture trends and forecast Aquaculture will intensify, diversify, and expand Production of all species groups (including seaweeds) will be increased New species will appear All environments will be increasingly utilized More and more resources will be used in increasing quantities. More people will be involved in aquaculture production. More and more constraints to be faced!
Aquaculture for Poverty Alleviation and Food Security 80% of aquaculture (50 million tonnes) is produced by small-scale farmers Over 80% of the aquafarmers in Asia are small- scale. Almost all aquafarmers in Africa, except few commercial ventures, are small-scale. Absolute numbers are scarce! –17-20 million farmers in Asia? –100 million in supply chain and services? –Over 2 billion consumers?
Aquaculture for Poverty Alleviation and Food Security There have been significant international developments and commitments related to both poverty reduction and food security. There have also been greater recognition of the importance and potential of small-scale fisheries and aquaculture in reducing poverty and increasing food security. Yet, the level of poverty remains high, not just in small- scale fishing and fish farming communities, but also in developing countries in general.
Aquaculture for Poverty Alleviation and Food Security While economic growth may have helped to reduce the number of poor people in the world, the positive impacts of growth on poverty and food insecurity have been less than expected. mainly due to inequitable distribution of the benefits, population increases, political instability, and in some parts of the world, the devastating effects of the HIV/AIDS epidemic. As a result, there has been a re-focus by the international community on poverty reduction and food security through, inter alia, national poverty reduction strategies.
Aquaculture for Poverty Alleviation and Food Security While past development interventions in fisheries and aquaculture were often implicitly aimed at reducing poverty, most were not explicitly focused on improving the living conditions of the poor Rather, they aimed to accelerate economic growth through technology and infrastructure development and through market-led economic policies in general. The lack of an explicit focus on poverty and the inequitable distributional impacts of development programmes may have contributed to the ineffectiveness of many interventions to reduce poverty. With regard to food security, the predicted rises in global population, and corresponding increases in demand for food and fish mean that many of the food security problems present today are likely to persist. Estimates suggest that 840 million people globally remain classified as undernourished.
There are many opportunities, but challenges, for the small-scale aquaculture farmer!
–Small-scale aquaculture farmers characterized by: Small land and water areas Family scale operations/businesses Often use family labor Often based on family land (of declining area…) –China has 240 million agriculture farmers, with < 0.1 ha. Vulnerability –They are: >80% of an estimated 17-20 million aquaculture farmers in Asia Major contributors to food production in many countries Major contributors to global farmed fish supply Highly innovative sector Important for rural development, communities, employment, poverty reduction and environmental sustainability
International market and trade are working against the small-scale aquaculture sector: –Production costs –Business structures of export-oriented aquaculture –Risk management strategies of larger traders and buyers driving against small-scale farmers Easier for big buyers to deal with big farms with large product volumes! Small quantities of product – inconvenient to larger buyers –Market access requirements and standards for certification, traceability and quality assurance Capacity to adapt and participate in modern market chains also constrained by special features of the small-scale aquaculture sector that includes: –Access to financial resources to invest in change –Access to market, technical and business knowledge –Institutional and policy orientation –Commercial/government institutions and services poorly oriented towards the small-scale farmer
Are there ways for small-scale aquaculture farmers to participate in modern market chains, trade and certification programs? –Recent experiences show positive pro-small-scale farmer action can result in positive benefits. –Organization of farmers into producer groups is a key way forward: May allow certification of groups as opposed to individuals Allows economies of scale (eg bulk purchase and marketing) Facilitates communication and extension Facilitates “better management” Facilitates organized marketing –Individually, farmers will face increasing difficulties for market access. –Local domestic and niche markets may offer some opportunities
An example from India –MPEDA/NACA/FAO collaboration, started in 2000 –Objectives Reduce production risks and improve shrimp farm production Build farmer and farmer oriented institutions Improve quality and market access for responsibly produced shrimp
Farming system - extensive farming system – Avg. Production: 250 kg/ha/crop Alternate cropping – shrimp, rice, other crops Farm areas < 2ha, and one-two ponds
Elements of success: ( 1) Participatory development and promotion of simple on farm “better management practices” - “BMPs” 1.Good pond preparation 2.Good quality seed selection 3.Water quality management 4.Feed management 5.Health monitoring/Biosecurity 6.Pond bottom monitoring 7.Disease management 8.Better Harvest and post-harvest Practices 9.Record maintenance/Traceability 10.Environmental awareness
(2) Cluster level management Management of crowded farming areas by collaboration among farmers and farmer groups: –Formation of local farmer clubs –Participatory approach to planning and decision making –Collaboration water and disease problems Cluster in Tanjavur, TNCluster in Kundapur, KACluster in Valsad, Gujarat
Formation of farmer clubs - “Aquaclubs” led to a number of benefits Weekly meetings Stocking at same time Co-operation In creating common facilities oPromotion of BMPs oImproved bargaining power and lower prices buying farm inputs oCooperation in selecting/testing and buying seeds reduced cost and improved quality oIncreased co-operation led to improvements in shared common facilities (eg deepening inlets, drains etc) oProvided a stronger basis for partnerships with government and business sector (suppliers, buyers) (3) Farmer groups
Win-win outcomes from improved management: Increased yield Reduced crop risks Reduced cost of production Increased proportion of profit making farms Reduced environmental impact Improved cooperationYear Demo ponds Non demo +200382%89% + 7% + 7% 200437%52%+20% 200515%42% +27% +27% 200617%44% Reduced Disease prevalence Increased profitability (Profit made on every 1000 Rs investment) (Source: MPEDA/NACA)
2003 Village level extension 1 Village 1 Aquaclub 58 farmers 108 ponds 58 Ha 22 tonnes 2004 Creek level extension 6 Villages 7 Aquaclubs 130 farmers 254 ponds 173 Ha 40 tonnes 2002 Farm level demonstr ation 5 farmers 10 ponds 7 Ha 4 tonnes 2002 2001 Survey 365 ponds Nellore n West God. Risk factors BMPs 2003 Contract hatchery Seed Production Pilot trace- ability Progress in last 8 years 2005 AP KA GU 2005 State level expansion 3 States 19 Aquaclubs 736 farmers 1187 ponds 663 Ha 672 tonnes Expansion to other states 2004 2006 AP KA OR GU TN Expansion to 5 states 2006 5 States 28 Aquaclubs 730 farmers 1370 ponds 813 Ha 870 t 2007-2008 National Centre for Sustainable Aquaculture 100 societies 2008-3000t? NaCSA
Next steps –Building partnerships within country and with “ethical” markets in Europe. But we also need to “mainstream” the small-scale farmer. –Develop practical models for small-scale farmer group certification and share experiences widely –Certification standards that are implementable and support improvements among small-scale farmers –Partnerships between business connections between certified small-scale farmer groups and markets – address barriers –Build business case for investing in certification and market access for small-farmers –Business case for investment - in 2006 investment of $80,000 in technical servicing led to crop improvements worth $2 million –Carbon neutral supply chains
Preliminary lessons –Facilitating organization of the small-scale farming sector can achieve positive change –Change takes time. –Considerations for market access Costs and cost recovery Standards, practicality and small-scale farmers Technical, financial and market services Building supply chains for small-scale farmer Pro-farmer oriented institutions Investment is required –Social investment can make sound business sense –Government and private investment needs to be oriented towards assisting the small- scale aquaculture farming sector.
Public investments for the small-scale sector –Policy favorable to the small-scale sector Supporting farmer group formation Technical and marketing services for small-scale aquaculture producers Market access for small-scale producers Information services for rural farmers Access to financial services Encouraging private investment in small-scale aquaculture production and services –Social ”safety nets” for most vulnerable –Educational and servicing institutions oriented to the small-scale aquaculture sector –Trade rules and guidelines that consider the needs and realities of the small-scale sector –International cooperation across market chains – a responsible seafood production and consumer community
Private business investment is also needed in the small-scale aquaculture sector There are many opportunities for private investment to support millions of small-scale farmers: –Micro-finance and financial services –Technical and marketing services –Information services –Input packaging and delivery “Corporate social responsibility” initiatives in the small-scale aquaculture sector, such as –Facilitating market access for small-scale aquaculture producers –Provision of technical and financial assistance to small-scale producers to comply with market requirements –Brand development and marketing favorable to aquaculture products from smaller producers Public-private investment in “costs of transition” Certification, quality assurance and standards relevant for small-scale aquaculture producers “Bottom of the Pyramid markets must become an integral part of the work and of the core business of the private sector. Bottom of the Pyramid markets can not merely be left to the realm of Corporate Social Responsibility (CSR) initiatives”
South-south cooperation Experiences from Asia increasingly being shared with Africa through south-south cooperation
Whilst many challenges remain, the crucial role of small-scale aquaculture farmers in aquaculture production and trade should be recognized: –The small-scale sector is the largest aquaculture producer and the mainstay of communities in many parts of the world, particularly, but not exclusively in Asia –It is an innovative sector, but faced with many problems and constraints in the modern trade and market environment –The sector is socially and economically significant and cannot be ignored. –It needs investment from public and private sector to compete and thrive in the modern aquaculture scene There are many opportunities for support. Ideas and partnership are welcome!
Thank you for your attention www.enaca.org/certification www.fao.org/fi
“Bottom of the Pyramid markets must become an integral part of the work and of the core business of the private sector. Bottom of the Pyramid markets can not merely be left to the realm of Corporate Social Responsibility (CSR) initiatives”