2. Methodology

2.1 Scope and coverage of the study
2.2 Methodology and variables

2.1 Scope and coverage of the study

The study began in the last quarter of 1995. At that time, an analysis of cost and earnings of fish harvesting and utilization was also envisaged but the study was later limited to fish harvesting only.

Targeted case studies were unndertaken, mostly under Contractual Services Agreements, in the 11 countries that had responded to the request of the Fishery Industries Division. Asia was represented by China, the Republic of Korea, Indonesia, Malaysia and India and additional information is presented from Thailand. Africa was represented by Ghana and Senegal; Latin America by Argentina and Peru; and Europe by Spain, Germany and France.

Appendix II shows which part of the regional and global marine catch was contributed in 1995 by the countries included in the study. These countries accounted for 49 percent of the marine capture fisheries production in Asia, Latin America, Africa and Europe, which, in turn, contributed 84 percent to the global marine capture fisheries production in 1995. The countries covered by the study accounted for 41 percent of the global marine catch.

Asian and Latin American countries were most comprehensively covered by the study; countries participating accounted for about 61 and 52 percent of the total marine catch in their region in 1995, respectively. Two West African countries (Senegal and Ghana) accounted for 17 percent of the total catch for Africa in 1995. In Europe, Spain, France and Germany were covered which accounted for 16 percent of the total European catch. North America, Oceania and the former USSR were not covered by the study.

2.2 Methodology and variables

Information on cost and earnings of fishing fleets has been generated through empirical studies, carried out in cooperation with national fisheries administrations and fisheries research institutions. Wherever possible, this has been complemented, cross checked and compared with secondary data, national fisheries and other statistics.

Interviews were conducted with skippers, crew and knowledgeable key informants of fishing units who were specifically selected for their perceived responsiveness. Units were chosen for their typical conditions of operations and characteristics with regard to age and technical features.

The methodology for studying and analysing data on cost and earnings of fishing units followed that used in the study Costs and earnings of fishing fleets in four EC countries, published by the Department of Fisheries of the Agricultural Economics Research Institute (The Hague, 1993) and funded by the European Union.

The following parameters were studied:

· Techno-economic and operational characteristics of fishing

· Fleets operating in country of study

· Techno-economic and operational characteristics of individual fishing units

· Financial and economic characteristics of individual fishing units

· Financial services available to fisheries sector including institutional credit programmes and subsidies

· Levels of exploitation of fisheries resources

· National plans for fleet restructuring and adjustment.

More specifically, the following variables have been covered:

Techno-economic and operational characteristics of fishing fleets operating in country of study

- Characterization of fishing fleets/category of fishing vessel by type of fishing technology/species caught, etc.

- Approximate number of fishing units constituting the fleet

- Description of fishing area in terms of distance from shore, depth, etc.

- Species caught, landed, discarded at sea

- Fisheries legislation and regulations affecting fishing operations

- Age structure of fleet

- Plans for future development of fleet and its fishing operations including: potential for development of new fishing areas and for exploitation of new/different resources; need to replace fishing units over next decade to maintain or expand size of fleet; need to reduce fishing effort and size of fleet.

For each fishing fleet identified above, a typical fishing unit has been described. The average value/characteristic has been given for each variable, followed by the range of values that apply to most fishing units of the fleet.

- Length of vessel

- Tonnage

- Propulsion and HP

- On-board facilities for processing and storage of catch: volume of fishhold(s); freezing capacity (tonnes per day); machinery for processing the catch

- Fishing gear and capacity: type and quantity/dimensions of fishing gear available with vessel

- Crew size and composition

- Ownership of fishing unit and sharing, if any, of operational expenses and income: type of ownership and sharing systems

- Operation of fishing unit: fishing days per annum and average duration of fishing trips; fishing seasons and off-seasons by month

- Investment costs: hull; deck equipment, including equipment for navigation, fish detection, communication, safety fish storage, preservation and processing etc; engine and propulsion; fishing gear and equipment.

- Annual cost of fishing operations: fuel, lubricants; harbour fees and charges; insurance and licence fees; taxes; repair and maintenance of fishing vessels and gear; replacement of fishing gear and material; provisions and stores; crew wages/salaries/shares and other crew expenditure

- Revenue: volume, composition and value of catch of fishing vessel per annum.

- Access of this category of fishing unit to institutional credit;

- Terms of finance, e.g. amount available as credit and specific purpose for which loan is available, target group of loan (individual/cooperatives), repayment period of loan, interest rate (whether subsidized); equity and collateral requirements; availability of capital subsidies

- Availability of tax exemptions.

Interest calculation

As far as possible, real costs of interest for repayment of loans have been used. More specifically:

- in most cases, interest figures were directly indicated in the studies;

- in other cases, interest was calculated taking into consideration the loan amount, commercial interest rates indicated in the study and the amount of compound interest divided by the number of years;

- in cases where data were unavailable, estimates have been compiled, according to the most frequent financial conditions indicated, i.e. loan = 80 percent of investment, rate of interest = 8 percent and duration = 10 years.

When calculating depreciation, three main methodology references have been used:

- The publication Costs and earnings of fishing fleets in four EC countries (see p.3). This gives a breakdown method for costs and earnings on a uniform basis; a method for depreciation allowance estimates starting from vessel overall value for hull = two-thirds of investment and engine = one-third of investment; and depreciation rates for semi-industrial and industrial vessels: hull = 4 percent, engine = 10 percent, deck equipment = 10 percent, fishing gear = 20 percent.

- Capital needs and availabilities in artisanal fisheries (IDAF Technical Report Accra, 1994). This gives depreciation rates for artisanal canoes in Ghana and Senegal: hull = 15 percent, outboard motor = 30 percent, deck equipment = 10 percent, fishing gears = 20 percent.

Profitability analysis of fishing fleets from EC countries, Coopers & Lybrand - Gerecco (Quimper - France, 1996). This gives depreciation allowances for nine out of 15 types of vessels covered by the Spanish study calculated from the insured value of these vessels.

- if figures were available for the same type of fishing vessel, but of a different size, proportional calculations were made;

- if no data were available for a fishing vessel of the same country of the same type, a foreign vessel of the same type and size was taken for reference;

- if no data were available calculations were based on the assumed value of hull, engine, and fishing gears according to the size, power and type of fishing craft or gear.