1. Fish for Food : The Great Crossover George Kailis Professor of Management School of Business: Fremantle Future prospects and Issues for the Australian Fishing Sector

2. The Great Crossover In 2007-8 the value of imports exceeded exports for the first time in the modern era. (See also ABARE Presentation) This gives Australia into a more typical developed country profile as a destination for imports of ‘highly valued’ seafood from developing countries School of Business: Fremantle

3. ABARE 2009

4. Analysis from : W.A. FISHING INDUSTRY COUNCIL (2009) The Challenges: Report to the WAFIC AGM October 2009, (Economic Analysis by Mr John Nicholls). W.A. Fishing Industry Council. Sources: ABARE, Fisheries Statistics and ABS, Perth CPI, All Groups Index

5. Key Change Drivers Prices of high value species down 53% in real terms since 1998-9 – also not surprising that exports are down 49% since 1998/9. Key Drivers Offshore aquaculture Economic factors - $ Aus /Australian Economy Growth Some ‘one- offs’ – sustainable/economic levels lower than MSY School of Business: Fremantle

6. Competitive Position – Market Change Australia’s past competitive position in high value wild fisheries, such as prawns and molluscs, will face lower prices in real terms – a permanent shift in some cases Technological development - such as lobster will NOT be immune for aquaculture competition Less sensitive in area of wild and fresh fish School of Business: Fremantle

7. Domestic Opportunity Australia is a growth economy both in wealth and size “Shortfall” in national seafood supply will grow: 280,000 tonnes in 2000 610,000 tonnes in 2020 This Shift effects on the Australian industry – aquaculture and wild caught School of Business: Fremantle

8. Key Trends - Australia Seafood trade in Australia will be generally dominated by imports Global technological change in aquaculture product – ongoing domestic price pressure on exposed sectors Fresh fish less exposed Fluctuations, but only new unforseen factors chaneg the above School of Business: Fremantle

9. Sources: ABARE, Fisheries Statistics; ABS, Private Sector, Wage Price Index, and CPP, Price Watch, Average Monthly June Diesel Prices (since 2000-01). Table created by John Nicholls for the WAFIC 2- 3% improvement needed every year

10. Efficiency: Gained and sustained Commonwealth Harvest strategy and similar changes welcome economic AND environmental dividends Counter-examples such as Western Rock Lobster – in trouble and in denial foregoing up to $90 million per year by not moving to economically efficient structures

11. Quality of Fisheries Management Possible benefits to Australia of $350 million from better management – 2009 FRDC Report ‘Evaluating Australia's Marine Capture Fisheries’ Basic management principles: Flexible management Clear performance objectives Conservative and risk adverse mindset – change too slow

12. Social Licence to Operate Risk from ‘environmental theatre’ Theatre addresses community opinion; but Does not address real environmental risks Aquaculture and especially fishing sector an obvious and weak target – even when real risks elsewhere Fisheries agencies must perform environmentally AND robustly defend their performance.

13. Governance Change? Industry and markets will adapt, the hard way or otherwise to new market realities Price is important...to domestic consumers, but also safety, sustainability and freshness - an OPPORTUNITY But not a gift. Governance failure risk Outmoded assumptions Government systems fail to adapt/or too slowly Bring competitiveness down - negative spirals

14. Governance Change? Mechanisms? General: CSIRO/ABARE/BRS Specific: Seafood Experience Australia, Seafood CRC, FRDC Industry: Seafood Alliance/ Leaders Political wing / Consumers?

15. Some References/Sources ABARE (2009) Australian Fisheries Statistics. Canberra, Australian Bureau of Agricultural and Resource Economics. ACIL TASMAN (2010) Economic Snapshot of the W.A. Fishing Industry. W.A. Fishing Industry Council. ASLIN, H. J. & BYRON, I. G. (2003) Community Perceptions of Fishing: Implications for Industry Image, Marketing and Sustainability Canberra, Fisheries Research and Development Corporation, BRS. ECONOMIC RESEARCH ASSOCIATES (2006) Fisheries Management Paper 210: A Bio-Economic Evaluation of Management Options of the West Coast Rock Lobster Fishery IN DEPARTMENT OF FISHERIES MANAGEMENT PAPERS. RIDGE PARTNERS (2009) Evaluating Australia's Marine Capture Fisheries: Final Report to the FRDC's Resource Working Group. W.A. FISHING INDUSTRY COUNCIL (2009) The Challenges: Report to the WAFIC AGM October 2009, (Economic Analysis by Mr John Nicholls). W.A. Fishing Industry Council (avail from speaker)

16. Thank you! I have prepared a written paper which is available, including a list of references. Views are my own and not organisations or institutions with which I have been affiliated I can be contacted at gkailis@nd.edu.augkailis@nd.edu.au