Post harvest and Trade Kieran Kelleher

Why post harvest? it turns fish into value post-harvest losses are high – up to 100% it adds value why post-harvest? a) It turns my fish into value b) I have lots of post-harvest losses – sometimes all my fish c) It gives me the opportunity to add value

some price and market trends China – the market juggernaut trade disputes – the breaks on the truck subsidies - greasing the wheels - interactive exercise contents

the bottom lines seafood markets - the driving force –rapidly changing –China - dominant and growing influence trade disputes impact small scale producers and consumers WTO is edging towards a subsidies compromise … maybe! wide scope for World Bank investment

change: structural and prices product value chains contracting value added - fresh / ‘TV meals’ landed prices relatively stable –some exceptions technology driving productivity (aquaculture, netting, vessels, information tech.) and driving prices down prices …3 examples

… change in aquaculture

knowledge-based productivity Species group selective breeding (not GMO) Gain in growth rate per generation % Price decline % Production increase % Atlantic salmon Tilapia12 – Pacific whiteleg shrimp 4 – Common carp - inbreeding minus 20 to 30 (China/ Bangladesh) 40397

the knowledge bootstrap breeding, vaccines, feed technology breeding, vaccines, feed technology increased productivity increased investment market expansion Increased production price declines increased investment Start.. in

IT – Kerala cell phones (Jensen study) cell phones - market prices / demand while at sea fisher profits +8%, consumer prices -4% phones paid for themselves 2 months cellphone becomes ‘middleman’ ‘zero’ govt. intervention more efficient markets generic: 1 mobile phone per 10 people +0.59% GDP per person

Samudram – Orissa information empowering women objectives - traditional marine fisher women –enhance economic, cultural and political status –capacity building for empowerment information (among other activities*): –public weighing of fish –distant market price information/ buyer interface –‘certifying’ reputable buyers / terms of trade *e.g. child marriage, gambling, alcoholism

Samudram results confidence to ‘tackle’ traders / middlemen assured markets prices + 30%

Enter the Dragon Ooo! fish for dinner

China’s seafood market world’s largest producer (35%) & consumer –farmed exceeds capture fish trade surplus $5 billion (2006) –10% of world exports the main growth factor in the global seafood market rising incomes rising/ changing domestic demand food safety a major theme for next five-year plan

China trade raw material for exports: –domestic source 63% –imported for processing 37% use of fish imports

consumption % change HOUSEHOLDS LOWINCOMEMIDDLEINCOMEHIGHINCOME (Kg) %% Pork 27.3%29.5%23.1% Poultry 81.3%92.9%96.0% Fish 110.3%125.5%153.9% Shrimp-25.9%11.4%58.8%

urban households kg per capita KG PER CAPITA % projection MEAT % 83%73%71% FISH % 17%27%29% TOTAL kg/ capita (100%)

trends/ concerns eating out from wet market to supermarkets increasing brand awareness growing food safety issues (not just fish) –number one concern for Chinese consumers! –‘ made in China ’ concern worldwide >200 rejections –government launched a number of policies and measures …build environmentally aware consumers ?

global multiples in Asia CompanySales $billionAsia / Pacific operations Wal-Mart312China, Japan, South Korea Carrefour92.6China, Indonesia Malaysia, Taiwan, Thailand, New Caledonia, S. Korea, Singapore Tesco69.6China, Japan, South Korea, Malaysia, Taiwan, Thailand Metro69.3China, India, Vietnam

China’s seafood supply chain Farming/wild catch Fragmented. individual and small farms dominate Emerging model ‘ Company + farmers production base ’ Growing regional concentration of aquaculture and processing Declining marine landings, rising f/w catches (nominal) Processing Export driven Foreign investment heavily involved Limited processing for domestic market Technology advanced and highly certified Growing processing/ re- export - overcapacity 450,000 food processors – 350,000 small Distribution/tradi ng Retail Mainly through wet market, with rising sales of chain stores Weak traceability Food safety remains the top concern – 8% Eating out/ convenience foods growing Individual-based distribution Dual food safety standards for export and local market Import bans from major trading partners

Fish Trade Wars

brakes on a globalizing seafood trade dumping – Vietnam/ US (basa/ catfish) zero tolerance EU’s SPS in India (shrimp) iconic species versus trade –dolphin-friendly tuna (US / Mexico) –of shrimp and turtles (US / India et al.) tariff barriers

US anti-dumping ( WTO AD agreement) the catfish case (Vietnam) the shrimp case (Brazil, China, Ecuador, India, Thailand and Vietnam) foreign merchandise is sold at “less than its fair value” and a U.S. industry is “materially injured” petition from US industry Dept. of Commerce determination – 160 days customs bond

the catfish case x 50 increase in US imports ’ under US cost of production AD action – 45-64% AD margin “to catfish or not to catfish” that is the question quality perceptions livelihoods of 0.5 million in Mekong

environment versus WTO the shrimp/ turtle case (US vs Malaysia, India, Pakistan, Thailand) if fishing kills turtles the shrimp cannot be imported in the US unless the harvesting nation has a (US) certified to have a regulatory program to reduce turtle mortality essentially applied its own environmental standards WTO rejected – later approved

SUSTAINABILITY Fish resources/ ecosystems Iconic species Capital: fleet overcapacity Operations: subsidies (e.g. fuel) STANDARDS TRADE RULES ecolabels traceability food safety WTO: SPS SCM AD Rules of Origin Codex ISO retailers green NGOs consumers Growing demand/ changing rules / standards

look! as a World Bank staffer all I need are key messages the key messages the World Bank Group can play an important pro-poor role in post harvest it is important to link post-harvest investment to resource sustainability and livelihoods

Are you seriously suggesting putting people before fish ? Is it PROFISH, or pro-poor ?

there is real potential for investment in post harvest !

investments governance public-private partnerships capacity building for fair and equitable trade

infrastructure transport communications

information and market access for fish

…. and other marine products

food safety risk assessment Its OK, I have insurance

RESOURCES: FAO Technical Guidelines on: - Responsible Fish Trade - Responsible Fish Trade - Ecolabelling - Ecolabelling - Post-harvest - Post-harvest Globefish Network IFC Safeguards (processing)