Appendix 5

BROAD CLASSIFICATION OF THE
INDONESIAN MARINE FISHERY FOR ECONOMIC ANALYSIS

by

Tadashi Yamamoto
FAO Fishery Statistician

1. Introduction

The major objective of this paper is to establish a definition for the small scale fishery. Although the small scale fishery is the mainstay of the marine fishery in Indonesia, both medium and large scale fisheries have been developed to a certain extent. The present paper, therefore, also deals with the definitions of these two fisheries.

It must be clear that each of three fisheries, i.e., small, medium and large scale, has encountered quite different problems. For the planning of a fishery development programme, therefore, separate policies and measures have to be established for each of the fisheries. To cope with such a requirement, a broad classification of the marine fishery is required.

2. Classification of the Marine Fishery for Economic Analysis

It is proposed initially that, for the purpose of economic analysis, the marine fishery in Indonesia should be classified as follows:

1. Large scale fishery operated by:

   1. Private fishing companies

   2. State fishing companies

2. Medium scale fishery

3. Small scale fishery

The large scale fishery is defined as one which is run either by private fishing companies or by state fishing companies. Here, a private fishing company is defined as a company established by either the Foreign Investment Law or the Domestic Investment Law, whereas, a state fishing company is one established by the government, mainly with a fund provided by an international financial agency such as IBRD, ADB, etc.

With the above definitions, the large scale fishery may be clearly defined. From an economic viewpoint the large scale fishery has little financial problem as far as its capital is concerned. At present, private fishing companies are mostly involved in the shrimp fishery in West Irian waters and their concerns are mainly with the conservation of shrimp resources. The state fishing companies are mainly involved in the skipjack fishery and their problems are likely to be a low catch rate.

The medium scale fishery is generally understood to be a fishery undertaken by powered boats and with small or medium size capital. Although some financial problems in the medium scale fishery may exist, its main problem seems to be fish marketing, due to an absence of fishing harbours with well organized fish marketing facilities.

From the foregoing, a border between the large scale and medium scale fishery is clear. However, a critical question remains, as to how to establish a border between the medium scale and small scale fisheries. Therefore, this question is discussed as follows:

3. Meaning of “Small scale” Fishery

The term “small scale” fishery is used in the present paper as a synonym for “artisanal fishery”.

For the planning of a fishery development programme the matter of the small scale fishery has become more and more important. However, there is no definition for the small scale fishery which is internationally defined and is acceptable by any country. It is generally understood that the small scale fishery is one undertaken by fishermen whose income is very low. As a result, the small scale fishery is in need of financial as well as technical assistance from the government, which will, in turn, improve income as well as the standard of living level of such fishermen.

4. Certain Criteria for the Small Scale Fishery

Theoretically, the size of capital invested by a fishing household could be the ideal criterion to distinguish between the small scale and medium scale fishery. However, such a criterion is not always feasible to use in a national survey such as a fishery census, since during the course of a field enumeration, the size of capital invested has to be assessed for every individual fishing household/establishment. Thus, this kind of troublesome procedure cannot be followed in a national survey due to the great volume of work involved.

Whether a permanent hired labourer is employed or not may be another criterion, since, with the employment of even a single hired labourer a fishing household has become of capitalistic nature. Both the 1973 fishery census and the 1975 and 1977 socioeconomic surveys sought the number of fishermen by classifying them into those from fishing households and hired fishermen. As a result, it was noted that even a fishing household with nonpowered boats employs many hired fishermen. Hence, in Indonesia this criterion cannot be used to distinguish between medium and small scale fisheries.

5. Proposed Border Between the Small Scale and the Medium Scale Fishery

Both the 1973 fishery census and the 1975 and 1977 socioeconomic surveys have classified fishing establishments by 14 size classes of fisheries management, assuming that such size classes may well correspond to the size of capital invested (see Table 1 of this Appendix).

It seems reasonable to assume that fisheries without boats and with nonpowered boats are regarded as small scale fisheries. Owing to a government policy of fishing boat mechanization, however, a question arises as to whether a fishery using an outboard powered boat is regarded as a small scale or medium scale fishery.

A study made herein suggests that a fishery with an outboard powered boat be treated as a part of the small scale fishery. The reasons are summarized as follows:

1. Outboard engines can easily be installed on an indigenous boat without reconstructing the boat. Furthermore, even for the same horsepower engine, the price of an outboard engine is much cheaper than that of an inboard engine. For example, the price of a 20-HP inboard engine is Rp. 2 million, whereas that of the same horsepower outboard engine is only Rp. 300 000. Thus, mechanization of a fishing boat with an outboard engine does not involve much capital investment and, hence, is considered as an extension of the small scale fishery.

2. Productivity of a fishery increases considerably with the use of an outboard engine (See Table 1). However, the use of an outboard engine does not show much increase of annual gross income per fishing household (see Table 2). The reason may be that the use of an outboard engine leads to a great increase of operational cost, particularly for gasoline and maintenance of the engine.

3. There is a great gap in annual gross income per fishing establishment between those with outboard-powered boats and inboard-powered boats of less than 5 gross tons (see Table 2). This indicates that incomes as well as the standard of living level of fishing households greatly improves with the use of inboard-powered boats.

4. A fishery using nonpowered boats and outboard-powered boats generally employs traditional gear. Whereas, a fishery using inboard-powered boats generally employs advanced gears such as the otter trawl, purse seine, etc. The only exception is that both drift gillnets and beach seines are commonly employed by both fisheries. This means that a fishermen generally does not change the type of fishing gear even when he starts to use an outboard-powered boat.

5. A history of the marine fishery development indicates that the outboard-powered boat is used during a transitional period of fishing boat mechanization. A good example is West Malaysia, where the fishing boat mechanization started with outboard-powered boats. However, at present the majority of outboard-powered boats have been replaced by inboard-powered boats. The same phenomenon is seen in west Sumatra, Riau and north Sumatra in Indonesia.

6. Relative Importance Between the Small Scale and the Medium Scale Fishery

The results of the 1973 fishery census which are summerized in Table 3 give a clear idea of the relative importance of the small scale and the medium scale fishery. When a fishing household with outboard-powered boats is included in a small scale fishery, 98.3 percent of the total number of fishing households/establishments belong to the small scale fishery, producing 62.4 percent of the total catch.

It may be noteworthy that the number of fishing households and establishments with inboard-powered boats which engage in the medium scale fishery is only 3 275, or only 1.7 percent of the total. However, these fishing households and establishments produce 37.6 percent of the total catch, due to their high productivity.

Table 1

PRODUCTIVITY PER FISHING HOUSEHOLD/ESTABLISHMENT (RTP/PP) AND PER FISHERMAN

Throughout Sumatra, Java and Bali

Data source: 1973/74 Fishery Census

1 This extraordinary high productivity is due to some RTP in Bagansiapiapi of Riau province, which catch a huge quantity of low price small fish and shrimps for fish paste

Data Source: 1977 Socio-Economic Survey of Marine Fishery for Malacca Strait Coast of Sumatra and South Sulawesi

1 Annual income refers to all income of RTP which was derived not only from the fishery but also other income sources. However, depreciation cost of the hull of boat and the engine is not deducted.

Table 3

BASIC ECONOMIC STRUCTURE OF MARINE FISHERY

Throughout Sumatra, Java and Bali

Data Source: 1973 Fishery Census