The objective of this study was to demonstrate how the revenues from seafood trade are distributed over the entire seafood value chain. The value chains were shown to have similar characteristics to value chains for agricultural products where the primary sectors receive a relatively lower share of the retail value of highly processed products and a higher share in less processed and fresh products.
The study also revealed that the developing countries seemed to control a relatively lower share of the overall value chain than developed countries. An example is the Icelandic case where Icelandic owned companies control as much as 70 percent of the entire value-chain while Tanzanian and Moroccan companies controlled less than 50 percent.
This is perhaps the most important lesson to be learned. The Icelandic and Tanzanian fisheries produce very similar products, going into the same markets, or market segments, in Europe and the United States. The Icelandic export sector has been developing over the past 60 years and started with state monopolies on exports (or monopolized export licences), ending with completely free trade of seafood products in the early 1990s. This has been a long process for the Icelandic companies but it created strong export companies which strategically marketed their products under their own brand names.
The Danish companies in this study seemed to control a larger share of the value chain than their Moroccan counterparts, but this did not ensure profitability of the harvesting sector. The European Union has been struggling with its fisheries policy for decades. Overfishing caused by too large fishing fleets has forced cuts in quotas, making it difficult for fishing companies to survive financially. Control of the seafood value chain does not necessarily guarantee good livelihoods for fishermen or fishing companies. In this paper it has been shown that good fisheries management is a necessity in order to allow fishermen to reap the benefits from higher export prices. Without proper management in place increased prices can lead to increased fishing pressures and hence threaten the sustainability of the resource and profitability of the fishing companies. This was also shown in the Icelandic and Moroccan fisheries where in both cases good management practices are in place, limiting the total catch to sustainable levels. Price changes then do not threaten the resource but simply have a direct impact on the income fishermen receive. In Morocco increased prices force the processors to import anchovies from other countries but when prices drop they buy only from domestic sources. This shows how international trade can actually help in relieving the pressure on fishing grounds when prices become very high due to increased demand or if catches decline through natural fluctuations. Fishing is based on a natural resource which can fluctuate dramatically between years. International trade helps seafood companies in diversifying these risks by opening up access to different sources of raw material. This again helps stabilize markets and increased stability helps in operating seafood businesses.
However, in order to reap benefits from international trade it is necessary to have the proper institutions in place and to have social capital which can use the opportunities found in global businesses. The government in each country must ensure that the proper infrastructure is available for fast and effective communication with its trading partners. The governments must also build social capital through education and training.
More in-depth analysis of the factors driving each segment in the value chains in this study are needed in order to be able to better assess how changing conditions on global markets affect local fishing communities. To achieve this consistent data collection at all levels or segments is needed over a long period of time. Such information would reveal the structure of each market and whether any one segment is able to exercise monopoly powers directly or indirectly. It would also help in comparing value chains between countries and allow more advanced studies of market integration, price formation and changes in profitability at various market levels. These studies would help to identify where there was a need for improved infrastructure in order to facilitate fair trade and distribution of retail value throughout the seafood value chain.
The studies reported here are among the first to attempt to analyse value chains for fisheries in developing countries. As such they should be regarded as a first step. The publication contains the theoretical background underpinning the work and lays out the methodology that can also be applied to other fisheries in other countries. Although the four studies point up some interesting correlations and trends they cannot be said to be representative of all fisheries and as pointed out more in-depth investigation and analysis is needed. It is hoped that this publication will be a starting point for further investigations, using the same methodology, particularly in developing countries.
