Resource situation, sustainability and impact on fish trade
1. Output of marine and inland fisheries stabilized during the last decade, whereas marine and inland aquaculture showed a positive trend with yearly growth rates of production in the order of about 10 percent. Aquaculture is likely to be the greatest source of increased fish production, and its share in total food fish supply by 2030 can be almost equal to the food fish supply from capture fisheries. People in the developing world will increase their consumption of both high - and low-value food fish, whereas consumption will remain static in the developed countries. The increase in aquaculture production is dominated by China. It is expected that aquaculture from developing countries will continue to play an important role also in the future.
2. Developing countries will not only continue to lead in fish production, their share in trade too will continue to expand. Trade will grow among developing countries and between developed and developing countries in response to escalating demand due to population increase, urbanization and income growth, as well as continued dependence of the developed countries on food fish imports. The opportunity to capture more lucrative export markets will require pursuing an improved quality management. Developing countries need to find ways of including smaller-scale producers, processors and fish workers in these arrangements. On the other hand, developing countries need to reduce tariffs and remove import restrictions to facilitate trade among developing countries. A continued strong demand over supply of fish products will cause increase in the overall fish prices in real terms, however, the technological advantages in aquaculture and the competition from other food commodities will keep the increase moderate. Particularly populous countries like India or Brazil, are likely to remain at low seafood consumption levels and present good opportunities for developing their domestic markets for these products. The state of development of the seafood distribution chain represent a bottleneck for domestic consumption and therefore also for seafood imports in those countries.
Globalization, industry structure, market power and impact on fish trade
3. Following the introduction of national Exclusive Economic Zones (EEZ), globalization in fisheries has shifted principally to the areas of trade in fish and fishery products, foreign direct investments in harvesting and processing (localization) and to provision of fisheries services. The earlier the opportunities and challenges are addressed and positive adjustment paths are identified, the more successful the fish harvesting and processing industry will be in reaping benefits from globalization and in avoiding negative repercussions. Fisheries markets have become more open and traditional trade barriers have been reduced significantly, but there are still obstacles along the globalization avenue; tariff escalation is a particular concern. For developing countries, difficulties are also caused by product and processing standards and other technical barriers.
4. Research on the restructuring of the food systems has demonstrated the extraordinary speed of supermarket expansion in the developing world and the way its influence is extending beyond the limits of large countries and metropolitan cities. This development is promoting a global transformation of food distribution and production systems. The effects of globalization should also focus on this reorganization of domestic food supply systems, which is now subject to radically new access conditions based on exacting quality and logistics criteria. It is to be expected that supply structures will be radically modified, as the demands for quality, consistency, punctuality and scale are imposed backwards along the fish-food chain. In both aquaculture and capture fishing, therefore, the modern distribution system is becoming more involved in the direct organization of its supply chains possibly resulting in changes of the industry structure. As in developed countries, it is likely that supermarket companies will become directly involved in fish-farming.
Cost and earnings, value addition and distribution of benefits
5. The question of how retail value is distributed through the food value chain has been of interest to policy makers for some time. Available case studies do not provide a clear picture in this regard. Given the fact that seafood products are increasingly exported as fresh products directly to the United States or the European Union markets, it might give fishers and primary processors better income if they would be able to achieve a high quality, improved handling and overall shorter marketing channels in order to obtain a higher share of the retail value.
6. Value addition in developing countries is a cost factor which needs to be analysed on a case by case basis. Value can be added by careful selection and handling of raw materials, assurance of reliable supply, meticulous packaging and presentation, careful transportation, and prompt delivery. These usually require investments in market research and in building relationships throughout the marketing chain. There is also a need for additional financing for working capital and new investment in human and physical capital. Further processing does not necessarily yield a higher value added. The test is whether the cost of value addition can be recovered and if there is a willingness to pay for it. Developing countries may have a comparative disadvantage when it comes to technical advantages, finances, customer relations and marketing but they have comparative advantage with regard to natural resources, cost of production and flexibility within companies.
7. To be competitive in the future, developing countries need to take an active role in defining requirements of hygiene, quality and safety. The focus of the value adding should be on the entire value chain, with emphasis on vertical integration and through cooperation with other developing countries.
Main recommendations for FAO:
The full list of all recommendations is split by session, see para. 14, para. 37 and para. 51.
a) FAO should study the impact of aquaculture on international fish trade and investigate several options for developing countries.
b) FAO should develop science based criteria for issues affecting international fish trade.
c) FAO should strengthen its support to the FISH INFONetwork. The network should intensify exchange of experience regarding entrepreneurial achievements and innovations in the sustainable use of fishery resources and consumption promotion.
d) FAO should undertake a detailed analysis of the impact of global fish trade liberalization and barriers to trade in fishery products with special options (among developing countries and in domestic markets).
e) A consultation mechanism should be created between FAO and the private industry with the purpose of increasing the benefits which developing countries can derive from international fish trade.
f) FAO should assist developing countries in becoming part of the new vertical integration in the value chain, in view of the fact that concentration of purchasing power and increasing size of aquaculture companies create new challenges for smaller producers in developing countries.
g) FAO should assist developing countries in meeting requirements of technical barrier to trade (TBT) and sanitary and phytosanitary measures (SPS) in order to avoid that such standards become technical barriers to trade between developing and developed countries; a concrete program of assistance to the least developed countries should be a specific task.
h) FAO should study the impact of vertical concentration, with specific attention to supermarket companies in relation to levels of production, value-added processing and wholesaling; it should investigate transparency, trade and markets, as well as investment and trade in services.
i) The feasibility of value addition for seafood products in developing countries should be analysed and case studies by species, product and country should be prepared for advice on attractive options.
j) FAO should create a mechanism for sharing experience so that developing countries may benefit from the know how of the private sector and the developed countries.
