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4. ENVIRONMENTAL, SOCIAL AND ECONOMIC FACTORS

4.1 Environmental Background

Sri Lanka is an island with a land area of about 66 000 km2 and a population (1978) of nearly 14.5 million people, three-quarters of whom live in the wet climatic zone in the south-west, which comprises about one-third of the total land area.

Annual rainfall varies markedly between the wet and dry zones: for example, it is 236 cm/yr at Colombo and 94 cm/yr at Pamban. The mean monthly precipitation at Negombo for the period 1966-76 is given in Annex 6; it shows the two typical seasonal peaks corresponding to the south-west and north-east monsoons. The region is characterized by very heavy rainstorms; 30 cm has fallen in a day at Colombo and Annex 6 shows that even heavier precipitation can occur for several days running at some coastal stations.

Evaporation is high; by way of example, Annex 6 includes the monthly evaporation rates in the Puttalam district: the highest is nearly 30 cm/month and the annual total equals the total precipitation at Colombo.

Most rivers are short and seasonal and the exceptions do not support productive fisheries. Most of the country's supplies of fresh water are obtained by collecting surface run-off in tanks. These supply water for irrigation of cultivated land, as well as for domestic and other purposes. The total surface area of lakes and reservoirs (when full) has been estimated at a little over 215 000 ha. This will be increased to nearly 238 000 ha when the Mahaveliganga project is completed.

Well over 100 000 ha out of the total area of lakes and reservoirs is made up by seasonal tanks: that is tanks which generally hold water for only six to eight months of the year and are dry for the remainder. Of these, seasonal tanks in the dry climatic zone not exceeding 80 ha in surface area occupy 85 000 ha. There are about 3 000 tanks not exceeding 8 ha and occupying a total of 22 000 ha.

The catchment areas of the tanks are partly cultivated and partly used for grazing cattle; cattle are also grazed on the bottoms of the tanks as they dry out. Because of this and the periodic exposure of the tank bottom to the air, the waters of the tanks are very fertile.

Annual mean daily maximum temperatures vary from place to place in the island from 20°C to 31°C, but the seasonal range at any one location is small.

Violent tropical storms occur every seven or eight years, with heavy rain and very high winds, which cause much damage.

The island's coastline is about 1 770 km in length. Most of it is sandy; in the few places where heavy clay occurs, it is overlain by sand. Subsoils are often of the acid sulphate type. On the southern coast, high dunes prevent easy access to the shoreline from the neighbouring land.

There are about 120 000 ha of estuaries, lagoons and areas of mangrove, of which the large river estuaries and big lagoons permanently open to the sea make up about two-thirds. The remaining 40 000 ha consist of tidal flats, mangrove and small lagoons. Most of the small lagoons, especially in the southern half of the island, are generally closed off from the sea; others are closed off by shifting sand except for very short periods. The few mangrove areas and salt marshes which remain are probably nursery areas for various forms of marine life; so are the extensive shallow sea areas close to the beaches where filamentous algae flourish.

Salinities in the lagoons vary widely: evaporation results in salinities higher than those in the open sea, while heavy rainfall can cause occasional and unpredictable sharp falls. Where the fresh water overlies the salt water without mixing, there will be an increase in the temperature of the lower layer and a reduced rate of exchange of oxygen with the atmosphere.

The surface temperatures in the open sea vary between 27°C and 30°C; in the lagoons the minimum temperature are much the same, but the maximum may be up to 4°C higher.

The rise and fall of the tide is small: not more than 0.7 m at springs and 0.05 m at neaps.

Brackish water occurs in some of the aquifers in the north, which possibly are being re-charged from the sea. This water may be recoverable by artesian bores.

Common salt is produced by solar evaporation in large ponds (salterns) at several locations along the coast.

The area of the continental shelf is nearly 28 000 km2, measured to the 200 m depth contour or to the median line with India, whichever is the nearer. The marine fisheries are productive; bad weather associated with the monsoons tends to restrict the operations of the fishing fleets, and some fishermen, therefore, migrate seasonally from coast to coast.

4.2 The Market for Fishery Products

4.2.1 Supplies

During the 1970s, supplies varied between 10 and 14 kg per head of population per year. In 1978, total supplies were about 158 000 t, of which only about 10 000 t were imported and about 16 500 t came from inland waters; the greatest part, therefore, came from the marine fisheries. Exports total roughly 5 000 t, mostly high-prized crustaceans and shark fins. Fish is caught throughout the year; catches are usually most plentiful in August, September and October, and scarcest in May and June. Production is most intense in the region south of Negombo (that is to say, along the coast of the wet climatic zone) and in the north. In the mid-1970s about one-third of all marine fish landings passed through St. John's wholesale market in Colombo.

In the 1950s, when supplies were at about the same level as now, more than half were imported, mostly in the cured form. During the 1970s shortages of foreign exchange forced the Government to restrict imports. This caused prices to rise and the output of marine and fresh water fisheries to increase. By 1978 only about 6 percent of all supplies of fish were imported. However, in 1979, the value of imported fish increased sharply, reaching about Cey.Rs. 60 million; about three-quarters of this was accounted for by canned fish.

Of the total of 16 500 t that came from inland waters in 1978, about 13 000 t came from the large perennial reservoirs, which are fished by full-time fishermen (Annex 7). There are no accurate statistics for catches from seasonal tanks, which are mainly fished by villagers for their own consumption. Fishery officials familiar with the tanks claim that present catches are low. The Mission's discussions with villagers confirmed this claim.

The Marine fisheries are believed to be capable of further expansion, to the extent of perhaps another 100 000 t/yr. Catch per unit of effort would be expected to decline as this level of exploitation is approached. Present plans for development do not suggest that costs of production and prices can be reduced in real terms for marine fisheries.

4.2.2 Consumption

Few studies seem to have been made of consumption patterns and habits in Sri Lanka, and most of what has been said and written about consumption of fish is based upon what is known about supplies.

Studies of household consumption patterns in 1953, 1961–63 and 1971–73, suggest that fish accounts for about 60 percent of all animal protein consumed in Sri Lanka (Sachithananthan, 1976) (tables 5:5, 5:6, 5:7). The other principal sources are milk and eggs. The stock of domestic animals is small and was decreasing, apparently for lack of feed (Disney, 1979); the decrease has now been halted and, in the cases of pigs and buffaloes, slightly reversed (Central Bank of Ceylon, 1979, p. 31).

Fish is consumed by all income categories. In Colombo, highly-prized marine varieties may command two or three times as high a price as beef. Nevertheless, it has been suggested that, although the consumption of fish expands as income increases (and demand possibly drifts to higher-priced species), it does not increase as fast as the consumption of other types of animal protein (de Mel, 1980). Although fish is a common part of the diet of the low-income groups, accounting for about 90 percent of all animal protein consumed (de Mel, 1980) not enough is eaten. de Mel states that “diets are adequate in relation to their protein content for all except 40 percent of the population belonging to the low-income group, including pregnant and lactating women, infants and young children”.

The Mission did not find much information on the elasticity of demand for fish with respect to price, but concluded that for the population as a whole, it is not far from unity (see Annex 8). This means that if the (real) price of fish increases by x percent the volume of consumption would fall by the same percentage, the total value of consumption remaining unchanged.

There are, however, noticeable preferences for certain species. Most observers agree that marine fish is preferred to fresh water fish; however, this may merely reflect the fact that nearly all the fresh water fish coming on the market is of one species: Tilapia mossambica. There are also marine species not highly appreciated: silverbellies fetch much the same price as tilapia. There is very little evidence on the acceptability of other species that might be considered for farming. Milkfish is said to be liked, but the quantities landed and consumed are, as yet, so small that it is not possible to predict how the market would react to substantial increases in supplies. At Batticaloa, mullets are esteemed as highly as milkfish, but consumers on the west coast are reported to be not very enthusiastic. Some large Chinese carp, captured when the Udawalawe reservoir spilled over, were considered to be too oily by the local people.

The Mission formed the impression that in certain areas the consumption of cockles may play a significant part in the nutrition of the poorer sections of the populace. Some cockle meats are also supplied to tourist hotels and there is reported to be a trade, volume unknown, in dried mollusc meats. Cockle shells are collected primarily for the manufacture of lime.

The consumption pattern of fresh water fish is not clear, but one observer has remarked that of all the fish consumed by people living close to tanks, about a quarter comes from the tanks. The low prices for tank fish make it uneconomic at present to distribute them in the fresh form to any consumers except those living at the tank side.

Most fish is consumed fresh, although during the peak fishing season in the north (July-September) some of the marine catch is cured. Landings at remote tanks are usually sundried. In most of the places visited by the Mission in September and October, both marine and fresh water fish were available in the fresh and dried forms.

4.3 Attitudes towards Aquaculture

About 70 percent of the populace are Sinhalese (Hong Kong and Shanghai Banking Corp., 1973, p. 3). Their religion prohibits the taking of life, but they will consume the flesh of animals killed by others. One man the Mission met, who owned a fish pond, was reluctant to fish it himself, but would allow others to do so, and was prepared to buy fish from his own pond in the local market for his own consumption - having first sold it to the fisherman.

A large percentage of marine fishermen are Christians; there are very few full time inland fishermen. Economic circumstances may in the future make it necessary or desirable to reduce the numbers of men employed in the sea-going fishing fleets; if so, they may become available for employment in an expanded tank fishery or in some form of aquaculture.

According to the Committee on the Development of Inland Fisheries' report of 1979 (Annex II) “there are strong social constraints against fishing. It is a low status occupation. Outside fishing communities, people will not take to it in increasing numbers without incentives.” Those who gather molluscs for lime-burning are regarded as of even lower status than fishermen, while gathering seaweed for export is an occupation for children.

The Mission believe it is unlikely that such attitudes will develop towards aquaculture, at least as regards investment in it as a business, although the harvesting of the crops may still have to be undertaken by distinct social groups. For example, the systematic harvesting of some seasonal tanks may possibly have to be carried out by peripatetic fishermen, and even then may encounter some opposition on religious grounds in some parts of the country.

The best way of overcoming resistance to innovation will be to introduce fish farming gradually, while ensuring that the methods employed are those most certain to achieve positive economic results. If more fish can thus be made available for food, and additional income can be derived therefrom, this should go at least some way towards convincing the undecided.

In the case of fish culture in seasonal tanks, however, success will depend upon better organization and conduct of communal affairs at village level than heretofore. The Government are already taking steps to bring this about, so as to achieve better management of irrigation and more productive use of water and land.

4.4 Availability of Inputs required in Aquaculture Projects

Apart from eggs or fry, the major inputs in fish farming include some or all of the following: manpower; land; water; supplementary feed; fertilizer; construction materials and services; capital and energy.

4.4.1 Manpower

The supply of experienced, professional, scientifically- and technically-qualified aquaculturists has been discussed in 3.2.2 above. The situation is not good, especially when it is recalled that no effective extension service yet exists. The scarcity of well-trained aquaculturists is likely to be a constraint on the development of aquaculture for some years to come. To remove this constraint the Government may resort to calling in foreign technical assistance, which is comparatively expensive, but will not be very effective unless national counterparts are provided. In addition, more people will have to receive training and experience abroad. To attract good people to this new field, the social prestige of which is in some doubt, and which necessitates living in areas removed from the cities, and to ensure that these people remain in post long enough to make an effective contribution - three to five years at least - remuneration, conditions of service and degree and nature of responsibilities may have to be reviewed.

The social backgrounds and occupations of the potential fish farmers of the future are perhaps easier to discern. The main incentives that will make them take up this new activity will presumably be the prospect of bigger or more assured incomes, including any subsidies, overt or otherwise.

Economic growth will force technical development upon the marine fishing industry, in order that marine fishermen maintain their (real) disposable income at a level similar to that of the rest of society. The technical development will have the common characteristic of leading to a higher output of fish, measured in terms of quantities landed per fisherman. If, simultaneously there are few alternative employment opportunities for marine fishermen, the total fishing effort is likely to increase and in the absence of under-exploited stocks the catch per unit of effort may decline. This chain of development is likely to cause redundancy and under-employment amongst fishermen, and they may become interested in aquaculture as a source livelihood.

Culture of fish in ponds, or cages, does not require skills more complicated than those normally possessed by farmers and fishermen and they should be able to learn them, provided they can be introduced to the activity by a competent extension agent. Small-scale aquaculture by individuals will best be introduced as an activity complementary to farming or fishing. A note on the incomes of the average peasant and fisherman families, and an estimate of how much they could expect to earn before they would evince a continuing interest in farming fish in ponds, is appended in Annex 9.

4.4.2 Land

Land will be needed for aquaculture in ponds, either inland (fresh water) or along the shore (brackish water).

Irrigated land is used mostly for paddy cultivation. Where the supply of water allows only one crop, as in part of the dry zone, the land lies unused for a large part of the year, but obviously cannot be used for fish farming during that period. Where Government-sponsored schemes for improved irrigation are in effect, and two crops are taken, it was noted earlier that the farmers are not allowed to choose what crops they will raise, and anyone intending to use part of his irrigated land for fish farming would have to get the approval of the local consultative council. The conditions under which fish farming would be more rewarding to the landowner than paddy cultivation are discussed later.

Areas of land do exist that have good water supply, but are unsuitable for paddy or other arable farming, for example, old quarries and marsh land. How much land there is of this type is unknown. There is also a substantial area of land formerly used for paddy cultivation that is now too saline for agricultural use. This land is often near lagoons and thus may have considerable potential for brackish water farming.

As stated earlier the Government owns the coastal land up to about 16 m from high-water mark. This area includes exposed tidal flats (mostly sandy) which do not seem to be exploited at present. Although the Government has the right to lease the use of these areas, precaution should be exercised in doing so since they seem to be rearing grounds for the juveniles of several species, including shrimp. Removal of the mangroves (necessary for pond construction) would upset the ecological balance.

4.4.3 Water

Availability of water is a greater constraint on fresh water fish farming than is land. Fresh water is only available for fish farming free of charge or opportunity cost - subject to the agreement of all parties concerned - so long as it is in the rivers, tanks or marshes. Fresh water flowing from a tank is destined to be used for irrigation or for electricity generation or domestic purposes, and therefore does bear an opportunity cost. The full economic value is not reflected in present irrigation charges, which are low, and which are not always collected.

The opportunity cost of water varies with the fertility of the land, being cheapest where paddy yields are lowest. In the poor-yielding Colombo area, it would appear that if fish ponds in that region could produce net earnings of more than Cey.Rs. 1 6001 a year per ha for a labour input2 of 125 man-days or less, it might be more attractive than paddy cultivation (the costs of conversion to fish farming are small). See Annex 10.

Brackish and salt water bear no opportunity cost, but availability may be restricted in other ways. The rise and fall of the tide is so small that replenishment of ponds by this means is scarcely practicable and pumping will be necessary. An alternative system is the use of floating or fixed cages, but these need to be located in places where there is a sufficient current of water to maintain oxygen levels and remove organic wastes. Fishermen, seamen and tourists will demand access to and/or passage over brackish water areas. This will restrict the possibility of cage or pen culture in certain lagoons (e.g., Negombo).

1 US$ 1.00 = Cey.Rs. 16.70
2 Labour inputs include 75 days of unpaid family labour

4.4.4 Feed

Some systems of intensive fish farming involve supplementary feeding, and in many instances this requires supply of ready-prepared feed. There is no trade in fish feed in Sri Lanka, but two companies compound animal feeds from ingredients produced in the country. A shortage of feed in the 1970s has now been remedied by a marked increase in production (Bank of Ceylon, 1980, p. 455) which has led to a recovery in the number of farm animals. One result has been a decided increase in the price of most of the ingredients of these feeds (Annex 11). The Mission concludes that there is no reason to suppose that the real cost of animal feeding stuffs will decrease in the future. However, during the next few years the demand for this type of animal feed for aquaculture will not represent a major part of the total demand and is therefore unlikely to influence the price.

A different situation may develop in cases where the intensively farmed species feed mainly on animal proteins: for example in areas where shrimp culture is established the prices of bivalves and low-prized species of fish may increase as a result of the demand for supplies of these species for feeding the shrimp.

4.4.5 Fertilizer

In 1979 Sri Lanka imported fertilizers to the value of US$ 42 million (Central Bank of Ceylon, 1980, p.67). They are sold at subsidized prices, perhaps only half the price that would reflect the cost of imports, storage and distribution (World Bank, 1979, p. 117). A recent study suggested that this policy may lead to wasteful usage, and the Government, generally speaking, does not favour subsidies. There is, therefore, no reason to believe that the real price of fertilizers will remain low.

4.4.6 Construction materials and services

Since 1977, the national investment programme has created a scarcity of men, equipment and materials in the construction industry. In late 1980 prices were reported to be rising at the rate of 60 percent a year, and neither private sector contractors nor state-owned companies show much regard for agreed dates of completion of works.

In the construction of eight ponds for the new station at Udawalawe, of which the major element of cost is for earth excavation, the estimate accepted by the Ministry of Fisheries included a rate for excavation of unit volume over twice that regarded as the standard rate by the Irrigation Department for work carried out by state corporations.

The total estimated cost of the eight ponds is Cey. Rs. 1.4 million for a total area of 0.86 ha, or Cey.Rs. 1.63 million/ha. Even if this price could be lowered by modifying the design and specifications, or by improving the methods of working, it appears that the capital cost of ponds constructed by the use of mechanical earth-moving equipment will be high for some time to come.

The small-scale, rural family pond, in areas of easily-worked soil, can be constructed by hand at lower unit cost.

4.4.7 Capital

The National Savings Bank pays 20 percent per annum interest on 12-month term deposits; one-third of the interest is tax free (Central Bank of Ceylon, 1980; p.424). The Savings Bank charges 9 percent on agricultural loans (op.cit. p.475); commercial banks 17 to 18 percent on loans of up to five years. The nominal rates of interest are therefore high, but the cost of living index for Colombo rose by 23.6 percent between the first quarter of 1979 and the first quarter of 1980. The difficulty facing the potential investor in fish farming is to discern how inflation is likely to affect the costs and earnings of the project he has under consideration. Probably rurally produced inputs (labour, rice bran, compost, etc.) will increase less rapidly in cost than will imported and locally manufactured inputs. Similarly, products that are predominantly consumed in rural areas are likely to increase less quickly in price than are those consumed by better-off urban dwellers. Thus, low intensity culture systems producing high priced fish for urban markets would probably be most “inflation resistant”.

4.4.8 Energy

In many systems of aquaculture the energy requirement, such as for electricity, or mechanical power produced by burning fossil fuels, is small. Management and harvesting of seasonal and medium-sized tanks may be most effectively accomplished by use of canoes and hand-operated gears. The main potential use of energy would be pumping to replenish water in brackish ponds. Mineral hydrocarbon fuels are at present subsidized, so that the same remarks apply as to fertilizers.


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