(WDRCF/82/WP1)

ANNEX E
COUNTRY SITUATION PAPER - INDONESIA

The Status of the Rural Coastal Fisheries in Malaysia

by

Directorate General of Fisheries

1. INTRODUCTION

Marine fisheries in Indonesia are predominantly small-scale fisheries operating in coastal areas, especially along North Coast of Java, the East Coast of Sumatra and the South Coast of Sulawesi. Industrial fisheries are relatively new in Indonesia.

Small-scale fishery therefore, plays the most important and extensive role in the Indonesian fisheries due to its contribution to the national fish production. The total fish production in 1980 was 1 840 200 tons, of which 76 percent came from marine fisheries. Within the period of 1969-1980, the growth of marine fisheries was at 5.4 percent per year. The annual productivity of fishing boats in 1980 increased up to 85.7 percent compared with that of 1969.

The increase in production has been caused mainly by the growth of motorized fishing boats and the introduction of more effective fishing gear used. During the 1969–1980 period, the number of motorized fishing boats increased at a rate of 19.7 percent per year. On the other hand, the number of non-motorized fishing boats declined at 1.6 percent per year.

Motorized fishing boats comprise mostly small fishing boats of less than 10 GT operating mainly along the coast of the three major regions, i.e., the North Coast of Java, the Malacca Strait and the South Coast of Sulawesi. Consequently, due to many fishermen operating in very limited areas, negative effects such as conflicts among fishermen and over-exploitation are often unavoidable. It happened although regulatory measures have been provided and implemented due to the difficulty in enforcing them.

As a sector, the small-scale fisheries are very weak because of low technical skill and managerial know-how, low bargaining position and financial capabilities and increasing resources limitation. Assistance is therefore, needed to overcome these constraints. The government is determined to assist this fishery sector as an important part of its national development plan through the Five-Year Development Plan which started in 1969. At present, Indonesia is in the third year of her Third Five-Year Development Plan.

2. PRESENT SITUATION

2.1 Production

The increase in marine fisheries production during the past ten years was relatively higher than that of the national fish production. Its annual average during the First Five-Year Development Plan (1969–1973) was 3.5 percent. It increased up to 6.8 percent for the period of 1974–1978 (the Second Five-Year Development Plan). During those periods, the annual growth of the national fish production were 2 percent and 5.3 percent, respectively. The increase of production was also accompanied by the increase of productivity of fishing boats. During the period of 1969–1980, the average annual productivity of fishing boats has increased 5.8 percent per fishing boat, i.e., 2.8 tons in 1969 and 5.2 tons in 1980. The growth of marine fisheries and the total fish production from 1973 to 1980 are shown in Table 1, while Table 2 shows the production of small-scale fishermen by area.

* Source: Directorate General of Fisheries

* Source: Directorate General of Fisheries

* Source: Directorate General of Fisheries

The increase of production reached by marine fisheries was primarily caused by the increase in the number of powered fishing boats from only 5 319 in 1969 or about 2.0 percent to 38 523 in 1980 or about 14.3 percent of the total fishing fleet.

On the other hand during that period, non-powered fishing boats declined to 17.9 percent, i.e., from 280 633 in 1969 to 230 500 in 1980. The increase in powered fishing boats as compared with that of non-powered fishing boats from 1973 to 1980 is shown in Table 3.

The powered fishing boats mainly consist of small craft of less than 10 GT. In 1975, their number was 13 269 or about 88.9 percent of the total powered fishing boats. It increased up to 28 918 or about 90.1 percent of the total number of powered fishing boats. Table 4 shows the structure of powered fishing boats in 1975 and 1979.

* Source: Directorate of Fisheries

The rapid increase of powered fishing boats especially occurred in the north coast of Java, south coast of Sulawesi and Malacca Strait, with its average of 22.8 percent per year for the period of 1975–1979. In 1979, the number of powered fishing boats in the areas was 51.6 percent of the total of powered fishing boats. This is quite logical, since there were 442 815 fishermen (50.5 percent of the total fishermen in Indonesia) and 120 433 fishing boats (46.9 percent of the total fishing boats) operated in those areas.

2.2 Marketing

The bulk of fish landings is marketed within the country to meet the domestic demand of animal protein. In 1980, out of 1 840 200 tons of fish produced 1 765 887 tons or about 96.0 percent was locally consumed, while the rest of the production was exported. About 50 percent of the total fish landings was processed into salted and dried fish. The rest was canned and the balance was marketed fresh, frozen or live.

During the past ten years, the contribution of fisheries to the national foreign exchange earnings has increased remarkably. In 1980, it reached a value of US$219 555 000 of which 80.6 percent was contributed by the shrimp production.

The export of fishery products in 1979–1980 is shown in Table 5.

* Source: Directorate General of Fisheries

The import of fishery products is ever increasing. From 2 232 tons in weight and US$421 000 in 1969, it grew to 35 790 tons valued at US$17 147 000 in 1980. The bulk of the imported commodities consisted of fish meal for animal feed, (about 89.3 percent by weight and 81.3 percent by value). Table 6 shows the import of fishery products in 1973–1980.

* Source: Directorate General of Fisheries

2.3 The economic role of the small-scale fishery sector

The small-scale fishery sector in Indonesia makes a very important contribution to the national diet. Fish accounting for nearly two-thirds of the total available supplies of animal protein. The per capita consumption of fish (live weight) in 1980 was 12 kg per year of which 75 percent was supplied by the small-scale sector.

In employment opportunity terms, it provides employment for more than 250 000 people. Together with their families, more than 1.2 million people depend upon its activity for livelihood. The per household income in 1980 was Rp.126 000 (US$201.60). It ranged from Rp. 59 100 (US$94.86) to Rp. 352 000 (US$579.52). Tables 7 and 8 show the number of households engaged in small-scale fisheries and their average income.

* Source: Directorate General of Fisheries

* Source: Directorate General of Fisheries

3. PROBLEMS CONFRONTING THE SMALL-SCALE FISHERMEN

Small-scale fishing in Indonesia is characterized by the range of the adopted levels of economical and technological sophistication, ranging from subsistence to commercial level, and from traditional to the more modern fishing gear.

As a sector, it is very weak due to the problems and constraints it faces, i.e., low technical and managerial know-how, low bargaining position in marketing their yields, low financial capabilities and increasing limitation in resources availability.

The majority of fishermen are small operators with a very low level of educational background.

Based on socio-economic survey conducted in the North Coast of Java, the Malacca Strait and the Makasar Strait in 1975 and 1977, the percentage of illiterate fishermen was as high as 49.5, 26.5 and 37.7 percent, respectively (Table 9).

* Source: Directorate General of Fisheries

The marketing of fish in Indonesia is characterized by large number of small markets and a distribution chain involving numerous middlemen. Generally, it follows one of the two principal channels, fish is either sold by fishermen directly to dealers or sold through auctions. The first channel is however, predominant throughout the country, except in Java. Handling is also generally poor. The long chain of marketing system and the deficiencies in handling attribute to the high degree of spoilage adversely affecting the financial return of the fishermen.

Until 1973, there was virtually no institutional credit available to the small-scale fishermen. The only source of credit was provided by money lenders and traders with usurious rate. Even now, many fishermen are still deeply in debt to money lenders and traders.

These conditions put the fishermen in a weak bargaining position in marketing their products. The price of fish is thus very likely determined by money lenders or the traders who intervene in marketing. Furthermore, they also put the fishermen in low financial capabilities.

The majority of small-scale fishermen operate in coastal areas, especially along the North Coast of Java, the Malacca Strait and South Coast of Sulawesi. During the last ten years in these three regions, the rapid mechanization of small fishing boats of less than 10 GT also occurred. Consequently, over-exploitation in these regions is unavoidable although a number of management measures has been introduced. The resources in the Java Sea and the Malacca Strait have undergone a declining trend in yields.

4. DEVELOPMENT UNDERTAKINGS

Indonesia is now in the fourth year of its Third Five-Year Development Plan (REPELITA III). As a continuation and an escalation of the Second Five-Year Development Plan, the Third Plan is based on the strategy for achieving: (a) a more equitable distribution of development and its gains, leading to the welfare of the entire population; (b) a sufficiently high economic growth; and (c) a sound and dynamic national stability.

The above strategy implies that the priority of the development of fisheries should be given to the development of the small-scale fisheries. This in turn means that all development policies and programmes formulated should be directed to encouraging the growth of the small-scale fisheries, including the overcoming of all shortcomings and constraints.

4.1 Objectives

As part of the National REPELITA III, the objectives of the fisheries development are:

1. To increase fish production to meet the demands of the domestic and export markets.

2. To improve the standard of living and prosperity of the producers by increasing their income.

3. To extend employment opportunities through extensification, diversification and the development of supporting industries.

4. To improve conservation and management measures of fishery resources.

As a sound basis for increasing fish production, the fisheries resources policy is directed to: (a) maintaining and increasing the fisheries resources potentials: (b) reducing or eliminating destructive conducts in fisheries; and (c) spreading resources exploitation to potential areas.

Fisheries production is being developed in order to benefit both the producers and the consumers by means of: (a) intensification of existing fishing efforts to achieve optimum productivity among as many small-scale fishermen/fish farmers as possible; (b) extensification of fishing efforts to potential areas to achieve an optimum economic scale of operation on an individual as well as on a collective basis; (c) diversification of fishing efforts horizontally as well as vertically to boost productivity and income of the producer toward a more rational utilization of resources; (d) introduction of appropriate technology within the reach of the producers and based on the resources available; and (e) orientation to market demand and food supply for the masses.

Fish marketing is directed to: (a) improvement of type and quality of products oriented to the developing market demand: (b) improvement of marketing infrastructure, facilities, organization and system which support fish production; and (c) stimulate fish consumption to improve the nutritional quality of the population diet.

The improvement of the institutional system is directed to: (a) introduction of fisheries regulation which will create the right atmosphere for the development of the small-scale fisheries and the conservation of fisheries resources; (b) stepping up government executing apparatus and facilities with the emphasis on the extension apparatus and the law enforcement apparatus; (c) stepping up of fishermen/fish farmers organizations at the village level as a vehicle for economic and social development; and (d) stepping up the function and role of nucleus enterprises as an agent of development for the small-scale fisheries.

4.2 Development priorities

To overcome the shortcomings and constraints faced by the small-scale fisheries, the Government is giving priority to the following activities:

1. Intensification of extension and training of fishermen to step-up their technical and managerial abilities.

2. Improvement of the fish marketing facilities and fish marketing system to increase the bargaining position of the fishermen.

3. Improvement of the small holder credit scheme to step-up the financial capabilities of the fishermen.

4. Introduction and improvement of regulatory measures for better resources management in highly exploited areas and resources development in potential areas.

4.2.1 Extension and training

To step-up the technical and managerial abilities of the fishermen, the Government has been conducting extension and training programmes. The programme is geared to the training of better technique of fish capture, and the training of skippers and engineers to obtain the required certificate. Mobile training units used to cover the fishermen in the respective villages and permanent training centres are used to train more advanced fishermen. The development of the small-scale fisheries is particularly directed to gradual modernization and diversification of the existing fishing units, increasing the number of fishing units used, and the improvement of fishing gear material.

4.2.2 Improvement of marketing system and facilities

The fish marketing development is directed towards the following activities:

1. The development of appropriate backward and forward linkage industries, which will provide the additional value to the products. This includes the establishment of ice plants, cold storage, fish carriers, etc.

2. The improvement of the fish marketing system by improving the function of fish auctions and fish collection systems in the remote areas.

3. Market information and promotion is intensified to the domestic consumers and the foreign market.

To increase the bargaining position of the fishermen in marketing their yields, the Government supports the construction of fish marketing facilities especially to facilitate fish auctioning at the landing places and collection centres. All new fishing ports are provided with ice plants to provide more security to the fishermen in maintaining the freshness and quality of their catch to secure higher prices.

Within the last decade, 134 landing places have been rehabilitated and upgraded and 22 completely new fishing ports have been or are being constructed. The rehabilitation of landing places and the construction of fishing ports are intended to serve the coastal as well as offshore fishing fleet, emphasizing to those owned by the small-scale fishermen for landing and marketing their catch. They are also functioning as a centre for giving technical and management support and information to the fishermen.

The government also initiates fresh fish marketing pilot projects which will enable a better price margin to the fishermen without increasing the retail price to be paid by the consumers.

Due to the high capital inputs needed to finance an integrated fresh fish marketing set-up, the Government has assigned all state-owned fisheries enterprises to support the implementation of the system.

4.2.3 Improvement of credit scheme

To cope with the problem of low financial capabilities faced by the small-scale fisheries, the Government is clearly oriented towards expanding credit for small-scale producers. Besides, the ordinary small holder credit scheme which is financed by state's bank, the Government also extends other small holder credit schemes.

a) BIMAS Fishery Credit

Based upon the Presidential Decree No.39/80, trawl fishing is being gradually phased out from the Indonesian waters. In conjunction with the Decree, a special credit called BIMAS Fishery Credit was created in 1980. The credit has so far been extended only to the cases relevant to conversion from trawling to another type of fishing. No collateral is required. The Minister of Finance provides a special guarantee from the Government budget in order to secure state bank in extending loans to fishermen. The risk arising from cases of bad debts is borne 50 percent by the Government, 25 percent by the Central Bank of Indonesia (B.I.) and 25 percent by the Bank Rakyat Indonesia (BRI).

b) Small Investment Credit (KIK)

KIK is provided to fishermen for vessels (5–7 GT), engine and gears the source of credit is 80 percent from B.I. and 20 percent from BRI. The maximum loan is Rp. 10 million (US$16 000) per borrower and is provided to eligible applicants.

c) KMKP

KMKP has an initial working capital credit with a maximum loan up to Rp. 10 million. The credit was initially to supplement the KIK. It is possible however, to apply only KMKP loan.

d) Mini Credit

Mini credit is provided by the BRI's village units. The amount ranges from Rp. 10 000 (US$16.00) to Rp. 200 000 (US$300.00) for both investment and working capital.

e) Midi Credit

The amount of loan of midi credit ranges from Rp. 200 000 to Rp. 500 000 (US$800.00).

f) RCP

RCP is an IBRD support credit programme which was established in 1979 for small holders including fishermen. But due to the enforcement of the new regulation regarding phasing out of trawling, the loan for fishermen has been cancelled.

To secure the Government's credit policy, the Indonesian Credit Insurance Corporation (P.T. ASKRINDO) was established in 1979. BRI or other handling banks must insure all the Government-operated credit in ASKRINDO.

4.2.4 Resources management and development

An effective management approach to achieve national development through national exploitation fisheries resources is very important.

To protect the small-scale fishermen from the unfair competition of the more modernized fishermen, the Government has introduced a number of management measures. One of them is the introduction of fishing belt along the coastal waters. The fishing belt closest to the coastline is designated for fishermen with the simple fishing method and gear. Another management measure is the phasing out of trawler by the Presidential Decree No. 39/1980.

To monitor the resources, the Directorate General of Fisheries in coordination with the Central Bureau of Statistic and the Provincial Fisheries Sources carry out data collection and analysis. Other efforts for monitoring purposes are also carried out such as the requirement for the fishing industries to submit a regular report to the Directorate General of Fisheries concerning their activities, including catch data.

Licensing is used as a control device. In Indonesia, it is issued by the Ministry of Agriculture based on the existing law supplemented by regulation. Among others are type, size and number of fishing boats, type gears mesh size.

In order to secure those management measures, a coordination body called Badan Koordinasi Keamanan Laut (BAKORKAMLA = Coordinating body for the Security at Sea). BAKORKAMLA has surveillance and enforcement function.

4.2.5 Transmigration programme

The uneven distribution is one of the problems faced by Indonesia in carrying out the development programme. This condition is also reflected by the utilization of the available fishery resources which is concentrated in certain areas such as north coast of Java.

In line with the policy to achieve a more equitable distribution of development and its gains, the Government has constructed fishing bases to attract new investment and facilitate the transmigration of fishermen mainly from the north coast of Java.

A project called Pilot Project of Fishermen Transmigration is being carried out at Kurau (South Sumatra). For the first phase, about 100 households will be transferred from East Java and Central Java at the end of the fiscal year 1981/1982.

Besides the above programmes which are nationally financed, there are several projects related to the development of the small-scale fishery. Among others are Small-Scale Fisheries Development Project, Sumatera Fisheries Development Project and Fisheries Extension Service Support for Small-Scale Fishermen Project.

The small-scale fisheries development project consists of six sub-projects; two of the six sub-projects, i.e., artisanal fishery resources management and pilot flake ice plant. It is financed by the Government of Indonesia and USAID grant. The purpose of the project is to introduce new improved existing technology and create a new statistical base throughout the small-scale fisheries that will enable national plan to increase production through redirecting their fisheries, assistance and resource priorities.

The Fisheries Extension Service Support for Small-Scale Fisheries Project is a project supported by UNDP. The objectives of the project are: (a) to establish practical extension technology to serve small-scale fishermen; (b) to establish an efficient operation of model fishery extension mechanism; and (c) to identify the real problem of the small-scale fisheries through social and technical investigation of the extension service.

5. CONCLUSION

1. The small-scale fishery plays an important and extensive role in the Indonesian fisheries due to its contribution to the national fish production, the more so because of the complex social problems involved. It is therefore, the Government's concern to put high priority on the development of small-scale fishery.

2. Individually, the small-scale fishermen are very weak in technical, managerial and also financial capability. Assistance from outside is therefore needed. This is particularly needed to increase their ability in technical skill and managerial aspect, low bargaining position and financial aspect besides increasing resources limitation.

3. The development of the small-scale fishery covers a complex aspect of fishermen's livelihood. It cannot be overcome by one single sector but it should be tackled on a cross-sectoral basis.