Appendix IV. Workshop recommendations

Working Group I: Enhancing economic performance

Terms of reference

1. Based on the case studies and workshop discussions, what can be concluded regarding financial viability of marine capture fisheries with reference to different continents and different fisheries? Does it cover cost of operations (positive cross cash flow)? Does it allow for re-investment (positive net cash flow)?

2. What are the differences between small-scale/inshore and large-scale offshore operations regarding costs and returns?

3. Are there any differences in profitability and economic returns between sustainable and non-sustainable fishing practices (non-sustainable = exploiting heavily or over-exploited resources)? What are these differences?

4. With reference to different countries and continents, and in comparison with agriculture and food processing, is capture fisheries presently subsidized through availability of subsidized institutional credit, tax and duty rebates on production inputs such as fuel, spare parts, etc?

5. Measures and policies for promoting economically viable and sustainable fishing practices and role of fisher and fishing industry associations, the private sector, national governments and FAO.

Summary of discussions and recommendations

1. Economical and financial viability of marine capture fisheries

The working group noted that the case studies, surveys and information presented and discussed in the workshop covered Peru and Argentina (South America); Senegal and Ghana (Africa); China, Korea, Taiwan, Indonesia, Malaysia, Thailand, India (Asia) and France, Germany and Spain (Europe). These countries accounted for about 49 percent of the total marine catch of their respective regions, which again accounted for 84 percent of the global catch in 1995.

It was also noted that the fishing fleets and units covered by the studies included all major types of medium- and large-scale fishing vessels operating in the countries while small-scale/artisanal fishing boats were only covered in the African countries Ghana and Senegal, in France and in Indonesia, Malaysia and, in a limited way, in India.

Regarding the economic viability of marine capture fisheries, the working group observed that - in spite of heavily and sometimes over-exploited fisheries resources - in most cases, marine capture fisheries is still an economically and financially viable undertaking which generates sufficient revenue to cover the cost of depreciation as well as the opportunity cost of capital and generates funds for reinvestment in addition to employment, income and foreign exchange earnings.

While appreciating the efforts made by the various institutions and organizations which had been involved in the study, and by FAO in initiating and coordinating and summarizing the findings and organizing the workshop, the working group also noted the limited scope and duration of the study. It strongly recommended that the study should be continued and expanded, and that the findings need to be confirmed and validated by future monitoring of the economic performance of fishing fleets. Special attention needs to be paid to include all costs of fishing including realistic rates of depreciation.

The working group also suggested that micro- or in-depth studies on the interaction between different fishing practices should be carried out before arriving at policy decisions. It was further recommended that future monitoring and studies should generate more information on the level of exploitation of fisheries resources being exploited by the fishing fleets under study.

- Economic and Financial Performance (in US$)

Type of vessels		Purse-seiner 35m3	Purse-seiner 120m3	Purse-seiner 180m3	Purse-seiner 270m3	Purse-seiner 350m3
Total Earnings		200 000	480 000	600 000	1 080 000	1 650 000
Running costs
	Fuel	25 000	80 000	110 000	150 000	220 000
	Lubricant	3 000	8 000	11 000	15 000	22 000
	Harbour dues	2 000	4 000	4 000	5 000	6 000
	Other run costs	1 000	2 000	2 000	3 000	3 000
Total running costs		31 000	94 000	127 000	173 000	251 000
Labour charges
	Labour share,wages	35 000	75 000	150 000	210 000	222 000
	Social insurance	16 000	39 000	72 000	100 000	108 000
Total labour charges		51 000	114 000	222 000	310 000	330 000
Vessel costs
	Gear expenses	2 000	3 000	4 000	4 000	5 000
	Repairs & maintenance	12 000	38 000	65 000	85 000	100 000
	Vessel insurance	10 000	16 000	18 000	23 000	30 000
	General expenses	12 000	29 000	32 000	37 000	45 000
Total vessel costs		36 000	86 000	119 000	149 000	180 000
Total costs / expenses		118 000	294 000	468 000	632 000	761 000
Gross Cash Flow		82 000	186 000	132 000	448 000	889 000
	Depreciation	(1)30 000	59 760	(1)85 000	139 080	177 780
	Interest (2)	20 500	33 600	49 200	71 500	96 800
Net cash flow		31 500	92 640	2 200	237 420	614 420

(1)Estimate
(2)Average amount for repayment on 7 years of loan 80% - Rate 9%

2. Differences in economic viability between small-scale inshore and large-scale offshore operations

The working group noted the general lack of information on the economics of small-scale fisheries in Asia and South America. The need for clarity of definition of small-scale inshore and large-scale offshore fisheries was highlighted.

Regarding West Africa, no significant difference in economic performance between the two sectors was observed. The small-scale sector performed generally well except for encircling gillnetters in Senegal. The case of Senegal demonstrated the negative impact of industrial fishing vessels that competed with the small-scale inshore sector for space and resources. It was strongly recommended that efforts should be strengthened through introduction of zoning, etc., to prevent industrial fishing vessels from fishing in inshore waters since their fishing activities may adversely affect the economic performance of inshore vessels. In the case of Ghana it was noted that both the small-scale and the industrial sector showed a better economic performance than the semi-industrial sector.

For Asia it was observed that the economic performance seems to be negatively influenced and hampered in Indonesia and India by medium-scale and large-scale inshore and offshore purse seining and trawling operations. It was also noted that there was no information from China, Taiwan, Korea and Thailand and only limited information from Indonesia and India.

For Europe it was noted that in France and Germany, the small-scale fisheries sectors seem to perform reasonably well while the study from Spain did not include any small-scale fishing units.

The working group strongly recommended that in future the study should explicitly include small-scale fishing fleets and also look at the creation of employment by the various types of fishing fleets and their contribution to food security and to meeting the nutritional needs of local populations.

3. Profitability of sustainable and non-sustainable fishing practices

The working group generally observed that many countries had not provided reliable information on the status of fisheries resources vis-à-vis fishing practices. With reference to those countries which had provided the required information, the working group observed that if non-sustainable is defined as a destructive method, or one which exploits already over-exploited resources, some forms of large-scale trawling, tuna seining and bottom pair trawling in Senegal, Peru, China and France and Spain stand out as having negative economic and financial results.

It was also observed that even in the artisanal and small-scale sector there were unsustainable fishing practices if an unsustainable fishing practice was defined as one that exploited already over-exploited resources.

4. Role of subsidies

The working group observed that when compared to agriculture the fisheries sector has always enjoyed fewer subsidies. Moreover, it was observed that the number of subsidies in developing and developed countries has recently been greatly reduced. In developing countries subsidies are presently available, in some cases, for offshore fishing, artisanal fisheries and fisheries cooperatives and for fishing operations in remote and underdeveloped areas. These subsidies are mainly in the form of capital subsidies and reduced duty on fuel but even these are in the process of being further reduced.

The working group observed that in comparison with developing countries, more subsidies for the fisheries sector are available in the EC, e.g. capital subsidies, reduced tax on fuel, compensation for non-fishing days, minimum prices for catch, etc.

It was also observed that European fishing vessels received subsidies for fishing outside EC waters. This was seen as having a negative impact on the economic performance of fishing vessels of developing countries in whose waters the European vessels fished and which did not receive any subsidy.

The working group recommended subsidies should be given to fishing vessels, which undertake sustainable fishing practices. Selective subsidies should be given for multi-purpose vessels, which engage in sustainable fishing practices. Before giving subsidies, however, Governments should have clear policies on which fishing operations are eligible for subsidies.

5. Measures and policies for promoting economically viable and sustainable fishing practices and role of fisher and fishing industry associations, the private sector, national governments and FAO

The working group recommended that FAO should advise governments on making plans for promoting sustainable fishing operations in the various sectors of the fishing industry. FAO should also assist in developing programmes for community-based fisheries and coastal area management programmes with active participation of fisheries organizations and other relevant industry groups. The approach of such assistance should be based on how to effectively manage a degraded fishery. Sufficient emphasis should be given to improved information systems on markets.

Suitable credit policies may be used in support of sustainable fishing practices. Fisheries resources linked credit plans as developed by NABARD in India could form the basis for fisheries credit policies in developing countries. Necessary legal regimes may be developed or updated, as the case may be, to better incorporate the provisions of FAO's Code of Conduct for Responsible Fisheries. Assistance should also be given to develop effective MCS systems in developing countries for offshore and deep-sea fisheries. Co-management regimes may also be considered to better manage the coastal fisheries resources.

Working group II: Promoting sustainable fishing practices

Terms of reference

1. Which fishing technologies and practices covered by the case studies and the discussions of the workshop can be considered sustainable in the short and medium term and which not? Which factors affect their sustainability?

2. In which cases should fishing effort be diverted to other fishing practices and methods? Is it possible to modify existing fishing technologies (fishing craft and gear) for this purpose or does new fishing technology need to be introduced?

3. What support and promotional measures are needed to divert fishing effort with reference to 2?

4. Is there a need to adjust the capacity of fishing fleets in countries covered by the case studies and by the discussions of the workshop (both with reference to small-scale/inshore and large-scale offshore) and how can these adjustments be brought about?

5. What should the future emphasis of fishing technology and research be to support the promotion of sustainable fish capture practices?

6. With regard to 5, what role should fisher and fishing industry associations, the private sector, national governments, FAO and others play?

Summary of discussions and recommendations

The working group agreed that it is not possible to consider fishing practices in isolation; it is therefore more correct that consideration be given to sustainable fisheries, taking into consideration factors other than fishing technology.

Sustainability of fisheries depends on:

- Impact on natural resources or fish stock(s); for instance, fishing with mosquito nets or other types of fishing resulting in a high proportion of by-catch including many juveniles of commercial fish species, is not sustainable;

- impact on environment; for instance, using dynamite, fishing intensively in mangrove areas or dragging on coral reefs are not sustainable practices;

- fishing capacity: whether in access or appropriate;

- economic viability: taking into account, for instance, fuel and fish prices;

- social acceptability: from the point of view of employment or as the only permanent source of revenue for many people all year round or during a certain period of the year;

- technical viability: for instance, access to fishing gear and equipment, facilities for maintenance of equipment, extension and training facilities, fishing practices generating conflicts with other practices in use in the same area, are not sustainable.

In general, it was felt that it is not possible to state that a type of fishing gear or method is not sustainable in itself. Many factors have to be taken into consideration, which are specific to each area.¹

¹ After the presentation of this report, there were discussions as to whether bottom trawling practices should be considered unsustainable. In this context it was observed that recent technological improvements may have reduced some of the negative impacts of this fishing method on the environment; for instance, the intensive rubbing on the bottom. Conflicts between bottom trawling and other fishing methods such as gillnetting, fishing with lines and pots could be avoided or greatly reduced if the zones where trawling is authorized are clearly marked.

Several participants of the working group observed that in several countries certain fishing gear or practices have proven to be too efficient affecting the catches of many small-scale fishers. It is worth bearing in mind that even traditional passive fishing methods can be unsustainable when used too intensively in a restricted area.

In general, considering progress/innovations in fishing technology, close attention has to be paid to the possible effects of the changes on the economic revenue, which can be expected. For example when fishing with light, will the catch double when doubling the power of the lamps? Similarly, before increasing horsepower/towing power of a trawler, consideration should be given to the optimal power needed per tonnage of vessel.

It was also observed that when an innovation has proven efficient on board one vessel it does not take long before it is adopted by many boats resulting in increased fishing capacity, possibly in excess and unsustainable. In addition, it was observed that there was a possibility that after one vessel has gained some additional profit, many other vessels quickly encounter difficulties in maintaining the sustainability of their operations.

Moreover, it was observed that it is not possible to stop or slow down innovations/"progress" in technology; the problem is to properly manage a fishery, which is unavoidably changing/reacting to external factors. In this respect, it was recognized that management of large-scale fisheries, in general, was easier than management of numerous small-scale activities.

Fisheries management and participatory approach

The necessity to reduce fishing effort globally was recognized, with attention, in particular, to coastal areas.

It was recommended to establish and implement conservation/management measures such as mesh size regulations and introduce zoning of fishing grounds (allocating certain fishing grounds to small-scale fisheries and to the utilization of small-scale, passive, fishing gear), including the establishment of protected areas where fishing can be partly or totally prohibited.

In this connection, it was observed that in many cases, after regulation and restrictive measures have been taken, the impact of these is not properly evaluated. For instance, several years after trawling has been banned in a certain area, it is still not clear whether demersal resources are now in a better condition. In this respect, it was suggested that a study be carried out in Indonesia.

It was also recognized by the working group that full direct consultation and involvement of all stakeholders, including fishermen, for the elaboration of management plans was a major (if not the main) condition for any chance of success of any plan (as clearly recommended in several articles of the Code of Conduct). In this respect, it was observed that a participatory approach would, in many cases, greatly facilitate and reduce the effort and cost of implementing any change in fishery communities and industries.

In connection with the consultation of fishermen and the participatory approach, it is essential to evaluate knowledge, attitudes and practices of concerned fishing populations before attempting to introduce any change or innovation.

In general, it was observed that keeping all stakeholders, including fishermen, fully informed is important as their awareness of existing global limitations and problems and responsible fisheries concepts may lead to replacing "blind" competition among fish harvesters/hunters by conscious cooperation, with mutual benefit.

Recommendations:

- While situations differ from country to country and fishery to fishery, there would be, in general, many advantages to be gained from sharing/exchanging experiences by having regular workshops to review different situations and developments.

- More data/information are still needed to fully understand the situations of the various fisheries referred to; for this purpose a data collection system should be elaborated and established among interested countries.

- Support from FAO should be sought to carry out comparative studies of fisheries in two or three countries fishing the same species and supplying the same international market (for instance, tuna line fisheries in several South Asian countries).

- Strong support for research on fishing gear selectivity, in general. In this respect, networking of experts, as initiated by FAO almost two years ago, is considered worthwhile.

- Considering that the practical improvement of fishing gear selectivity requires experiments and tests at sea in commercial fishing conditions, regional activities where a hosting country provides, at its own costs, a commercial fishing vessel for testing gear and FAO covers the expenses for the participation of observers from several countries and of an expert/consultant seems to be very appropriate.

- Hook and line fishing for demersal fish;

- trawling technology with reduced or no impact on the bottom

- technology to keep the fish alive until it reaches the market, including the possibility of bringing fish to the market at the right time (to get the best price);

- technology for optimal utilization of all the catch and the best value addition to basic prices of the sea products (technology transfers are possible in this regard, especially from Asian countries);

- regarding resources allocation, these must be clearly shared out taking into account the interests of both large and small-scale fishing operators and fishermen;

- making a stronger effort to increase the awareness of fishermen regarding responsible fisheries and precautionary approach concepts, the need for selective fishing and proper management of all fishing activities;

- when planning to introduce any change or innovation within a fishery, and before taking any action, careful studies to evaluate knowledge, attitudes and practices of the concerned fishing population must be carried out.

Terms of Reference

1. Which are the essential indicators that should be monitored for the economic and financial performance of marine capture fisheries?

2. Should there be specific indicators for small-scale and large-scale marine fish capture operations and what are these indicators?

3. Should monitoring be expanded to other sectors of the fishery industry such as fish marketing and processing, aquaculture, etc.? If yes, which indicators should be monitored?

4. What methodologies and mechanisms should be used to ensure a regular monitoring of the costs and benefits of capture fisheries in future?

5. Who should coordinate the monitoring, in which form and how often should the findings be disseminated and published?

6. With regard to 5, what role should fisher and fishing industry associations, the private sector, national governments, FAO and others play?

Summary of discussions and recommendations

The working group recommended that - with a view to validating, updating and supplementing the information presented and discussed at the workshop - the economic performance of marine capture fisheries should in future be regularly monitored. While the coverage of countries and fisheries should be expanded, the institutions, organizations and individuals, involved in the recent studies on the techno-economic viability of fishing practices, should form the core of the future monitoring mechanism. Regarding the purpose of monitoring, choice of indicators, data sources, mechanisms and coverage, the following was suggested.

1. Purpose and indicators for monitoring of small-scale and large-scale marine capture fisheries:

Purpose of monitoring - provide information:

- bankers, investors and entrepreneurs on investment possibilities;

- fishers, entrepreneurs and their associations for comparison of economic performance;

- government for design and implementation of fisheries and environmental/ coastal area management policies, regulations and measures;

- for scientific research.

Level of exploitation of fisheries resources exploited by particular craft gear combinations in terms of development of total catch, CPUE, catch composition.

Economic and financial indicators

(1) cost of investment C
(2) Earnings = value of catch
(3) Direct costs of operations including insurance, harbour fees, licence fees
(4) Gross margin I = (2) - (3)
(5) Administration costs/overheads, association fees
(6) Gross margin II = (4) - (5),
(7) Deprecation,
(8) Interest/opportunity cost of capital
(9) Net surplus before tax = (6) - (7) - (8)
(10) Taxes
(11) Net surplus minus tax = (9) - (10)
(12) Sharing systems
(13) Earning per crew member

(14) Rate of return on investment
(15) Rate of profit to earnings
(16) (Net surplus + taxes + wages): investment

Special case studies on fish marketing and processing

2. Data sources, methodologies and mechanisms

Data sources: fishing companies/accountants, fisher associations, landing sites/ harbours, fishermen settlements.

Methodologies: interviews of purposively selected, stratified sample of operators, buyers, suppliers, financiers, companies, accountants three times a year (every 4 months).

Participating institutions and organizations: same as in this study plus independent academic and research institutions and fisheries associations and fishery industry associations.

Funding: participating institutions and organizations with contributions from fishing enterprises, fisher associations and support from FAO under TCDC, TCP and FAO Regular Programme. Exploration of funding support from private sector and donors.

3. Coordination of monitoring and dissemination of results, role of participating research institutions, fisheries associations, government agencies, regional networks, FAO

Participating national/regional institutions to designate coordinator/liaison officer

FAO to contact already participating institutions and also new institutions to be involved in the Philippines, Japan, South Africa, Nambia, Morocco, South Pacific (Forum Fisheries Agency), Chile (IFOP), Brazil, Venezuela. In all countries, small-scale fishing fleets should be included in monitoring.

Research institute to process information.

FAO to disseminate/publish information also on Web page

National participating institutions to communicate information to national end users and to obtain feedback.

FAO to organize bi-annual review workshop to assess changes in economic performance of fisheries sector and to review feedback from users of information and use of monitoring results for purposes listed under 1. Evaluation of usefulness of indicators.