Fisheries needs credit sops, social security net to stay afloat

India fishermen
Fisheries sector offers direct employment to 16 million people, and indirect jobs to twice this number.

By A Suresh and VK Sajesh

The number of Covid-19 cases in India is growing at an alarming rate, but the outbreak is yet to peak in the country. The impact of the pandemic and the lockdown announced to check its spread on the country’s economy cannot be assessed at this stage. Still, it is important to make an assessment of the probable impact.

Fisheries is a sunrise sector in the Indian economy. The gross value added was about Rs 1.75 lakh crore in 2017-18. The earnings out of exports were around $7 billion (Rs 46, 600 crore). The sector offers employment to 16 million people at the primary level. Almost twice this number is employed throughout the value chain. Despite their contribution to the economy, the fishermen are left out in India’s growth saga.

Covid-19 and the lockdown have impacted the fisheries sector on several fronts. They include restrictions on congregation and movement of fishermen and other stakeholders; restrictions on movement of vehicles; shutting down of harbour operations; breaking of supply chain of inputs including fish seed and feed; scaled down operations of supporting services including banking, insurance, input and service delivery; freight and quality checking; and trade.

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Fishing activities like trawling, gill netting and long lining that engage a large number of labourers have not been operational for quite some time now. Only some traditional fishermen are venturing out into the territorial waters for minimum catch of fish to be sold locally. Several fishermen who were out for multi-day fishing activities abandoned their catch in the sea as the harbour activities were stopped. Besides this, disruptions in backend supply chain for several associated activities in marine fishing — repair of fishing vessels, net mending, and market services — are disrupted.

The Union government and various state governments have brought out several relaxations in recent days. However, the fishing activities are yet to restart and gain traction due to the disruption in supply chain and labour scarcity. Prolonged periods of berthing could damage the vessels, warranting increased maintenance expenditure. On the aquaculture side, supply of fish seed and fish feed are severely hampered. One estimate from Central Institute of Fisheries Technology has put the daily loss during the lockdown at about Rs 224 crore in marine fishing alone.

The credit service in fisheries sector, particularly for fishermen and itinerant traders, is dominated by the informal sector. It is unclear how the informal sector would renegotiate the terms of transactions.
Fish processing, marketing and export. Fish processing accounts for 12-15% of total fish production activity in India. Seafood processing firms are of different size, undertaking simple processing activities targeting local markets to more advanced processing activities targeting export markets. The Covid-19 outbreak has affected the livelihood of those employed in the sector. The impact on women is also significant. This is because women comprise 88% of the workforce in processing units and 89% of the casual labour force.

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Exports and price adjustments

Our major export destinations are the US, European Union, the UK, China and South East Asian nations. All the main importers of our marine products are affected by the pandemic. The resultant economic slowdown could dampen our export performance in the days to come. This will transmit to the aquaculturists in the backend of the supply chain. Wuhan, the city where the pandemic was first reported in China, is an importer of many marine products from India such as live lobsters, crabs etc. The exports to such destinations have stopped. Another aspect is the huge investment made in implanting the processing lines to suit the stringent quality and safety requirements of importing countries.

An important fallout would be the fall in global prices of sea food. The consignments already at exporting stages most probably end up with a price cut in the short-term. The impact would be felt by those aquaculture crops that are already under progress. The aquaculturists have to keep the crop in water ponds. This raises the costs. Next season, they can make some adjustments looking into the demand-supply scenario. The prices could be corrected in the medium term (beyond 1-2 crop seasons, probably). Some exporters are facing situations of non-acceptance of cargoes, resulting in call back of consignments and associated procedural requirements.

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Labour force and migration

The fisheries sector employs a large number of migrant labour force. They engage in marine fishing and associated activities and are significantly present in multiday fishing activities. Another major domain of work are boat yards, net mending and repairing, fish processing units and supply of inputs such as ice. It is reported that about 25,000 fishermen were stranded in three ports of Gujarat in April. Many migrant workers managed to return home during the lockdown period. Deficit of skilled labour force in marine fishing would emerge as major constraint in restoring fishing and other associated activities in full scale.

The struggle ahead

The marine fishery sector in India is already under stress due to reduced catch, increasing cost of fishing and shortage of skilled workforce. The Covid-19 outbreak has further accentuated the situation. In the coming months, annual fishing ban will be declared in many maritime states. This will be coinciding with the peak breeding period of fish, usually the southwest monsoon season. This is a period of economic hardship to fishermen and labourers due to lack of livelihood. The short- and medium-term policies to support the fishing community should consider the requirement that may arise during the fishing ban period as well. The aquaculture sector urgently needs supply of essential inputs like fish seed and feed. It is crucial to utilise all facilities for this at the government and private levels to ensure steady supply.

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The current crisis warrants increased focus on the social security for the fishing community. Towards this, the most important tool is the public distribution system (PDS) and income transfer schemes. The current crisis has the potential to affect the nutritional security of fisherman who depends of fish for their protein requirement. Community networks can be utilised during these difficult times. The utility of Mahatma Gandhi National Rural Employment Guarantee Act needs to be leveraged for activities related to fishing. To avoid crowding in harbours and landing centres during auctioning, states like Kerala have devised an alternative mechanism for pricing the catch instead of auctioning. Website and social media-based fish purchase is slowly getting adopted among all sections of consumers. The utility of ICT needs to be explored.

Considering the foreign exchange potential of the sector, exports should be facilitated. This will require ancillary activities to be carried out as essential service. Negotiations are required for making online documentation getting accepted by importing countries instead of original documents. Original documents cannot be despatched due to stoppage of courier services. The labour force needs to be mobilised in a phased manner. Providing training for skill development is also required, depending on the situation in each harbour and landing centre.

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Given the importance of fisheries in Indian economy, a comprehensive package is required for the revival of the sector. Recently, finance minister Nirmala Sitharaman announced a package of Rs 20,000 crore under the Prime Minister’s Matsya Sampada Yojana. This is primarily to increase fish production by 70 lakh tonnes and to attain an export earnings of Rs 1 lakh crore in five years. While this would help improve the fisheries sector in a multitude of ways, the sector also needs urgent measures to tide over the current crisis. This could include measures such as direct cash transfer, free ration of essentials, and incentives to the employers for payment of workers’ wages. This should also include deferring credit repayment for fishers, processors and exporters, waiver of interest for loans availed for fishing and fisheries related activities during the lockdown period, incentives for community based social security nets, institutionalisation of non-institutional credits, and support to firms and employers for payment of labourers’ dues.

(The authors are scientists with ICAR-Central Institute of Fisheries Technology, Kochi. The views are personal and not necessarily of the organization.)

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