Linkages between Fisheries, Poverty and Growth: India Case Study


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A report prepared for the
Department for International Development (DFID)
Project: ‘The Role of Fisheries in Poverty Alleviation
and Growth: Past, Present and Future’

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Linkages between Fisheries, Poverty and Growth: India Case Study

  1. 1. APPENDIX G India Case Study
  2. 2. Linkages between Fisheries, Poverty and Growth Case study of India A report prepared for the Department for International Development (DFID) Project: ‘The Role of Fisheries in Poverty Alleviation and Growth: Past, Present and Future’ DFID/PASS Contract: AG0213
  3. 3. STUDY TEAM Venkatesh Salagrama ICM (Integrated Coastal Management) 64-16-3A, Pratap Nagar, Kakinada 533 004 TELE: +91 884 236 4851 FAX: +91 884 235 4932 EMAIL:; G-1
  4. 4. TABLE OF CONTENTS Executive Summary........................................................................................................................ 4 1. BACKGROUND ................................................................................................................ 7 Population characteristics ....................................................................................................... 7 Economic structure ................................................................................................................. 8 Quality of life indicators ......................................................................................................... 9 Balance of payments ............................................................................................................. 10 2. POVERTY ........................................................................................................................ 10 Poverty Assessment Methodology in India .......................................................................... 10 Estimates of Poverty in the country...................................................................................... 11 Poverty as an outcome of poor entitlements ......................................................................... 12 Economic sectors/regions most affected by poverty ............................................................ 12 Studies on poverty................................................................................................................. 14 3. ECONOMIC GROWTH................................................................................................... 16 GDP Per Capita..................................................................................................................... 16 Economic growth and poverty.............................................................................................. 17 Main contributors to economic growth................................................................................. 17 Contribution of fisheries to national economy...................................................................... 17 Conclusion ............................................................................................................................ 22 4. FISHERIES DEVELOPMENT AND MANAGEMENT................................................. 23 Fish production ..................................................................................................................... 23 Fisheries exploitation or activity-related benefits................................................................. 25 Employment in different production-related activities ......................................................... 26 Average earnings in fisheries sector ..................................................................................... 26 Other activities undertaken in relation to fishing.................................................................. 29 Contribution of fish to food-and livelihood-security............................................................ 29 Fisheries Management in India............................................................................................. 30 Costs and Revenues of Fisheries Management..................................................................... 34 Conclusion ............................................................................................................................ 34 5. POLICY MAKING........................................................................................................... 35 Perceptions of poverty at the macroeconomic level ............................................................. 35 Organisations involved in poverty reduction in the country................................................. 36 Main instruments used in Poverty Alleviation Programmes (PAPs).................................... 38 Evaluations of Policies and Instruments ............................................................................... 38 Factors contributing to poor performance of poverty alleviation programmes .................... 39 Fisheries policymaking in India............................................................................................ 41 Linkages between fish resources, economic growth and poverty reduction ........................ 42 Role played by NGOs, fishers’ organisations and civil society in general........................... 44 Institutional factors affecting the participation of the poor ................................................. 45 Important areas for policy development in the future (Opportunities) ................................. 46 Factors likely to impact on the nature and rate of policy development (Threats) ................ 48 6. References......................................................................................................................... 49 7. Annexures ......................................................................................................................... 56 G-2
  5. 5. ABBREVIATIONS AAI Aquaculture Authority of India AP Andhra Pradesh BOBP Bay of Bengal Programme CDS Centre for Development Studies (Trivandrum) CESS Centre for Economic and Social Studies CMFRI Central Marine Fisheries Research Institute DAHD Department of Animal Husbandry and Dairying (GOI) DFID Department for International Development (Government of United Kingdom) DOF Department of Fisheries DRDA District Rural Development Agency DWFN Distant Water Fishing Nation EEZ Exclusive Economic Zone FAO Food and Agriculture Organization of the United Nations GDP Gross Domestic Product GOI Government of India HCR Headcount Ratio HDI Human Development Index ICM Integrated Coastal Management ICSF International Collective in Support of Fishworkers IRDP Integrated Rural Development Programme MFRA Marine Fishing Regulation Act MPEDA Marine Products Export Development Authority NABARD National Bank for Agriculture and Rural Development NGO Non-governmental organisation NIRD National Institute of Rural Development NSS National Sample Survey NSSO National Sample Survey Organisation PAP Poverty Alleviation Programme PCO Programme for Community Organisation (NGO based in Kerala) PDS Public Distribution Scheme SIFAR Support Unit for Fisheries and Aquatic Research SIFFS South Indian Federation of Fishermen Societies SPS Sanitary and Phyto-sanitary TCM Technical Cooperation Mission UNDP United Nations Development Programme G-3
  6. 6. Executive Summary This case study for India is prepared as part of the DFID/PASS Project ‘The Role of Fisheries in Poverty Alleviation and Growth: Past, Present and Future’. The objective of the study is to conceptualise the interface between poverty reduction and fisheries development in India. The study was conducted during February-March 2005 and a first draft of the report prepared in March has been revised in the light of suggestions made by the project leaders in April 2005. Since 1950s, the emphasis of fisheries development in India has focused on increasing production through more efficient harvesting technologies and on increasing foreign exchange earnings for the country and the support for livelihoods was directed at addressing these two objectives. This growth centred development has brought about radical changes in the way fish are harvested and traded, which had implications (both positive and negative) for all stakeholders in the sector. An evaluation of these changes indicates that economic growth has not been accompanied by progressive distributional changes for equitable distribution of the benefits or addressed the poverty and livelihood concerns adequately. Some traditional occupations have been marginalized; although new livelihood opportunities emerged, it is doubtful that those who lost in the first case are adequately compensated by the second. The need for investing large sums in new harvesting technologies forced the poorer stakeholders out of the mainstream, while for those who could make the change, increased cost of operations meant intensification of fishing effort, overcapacity, indebtedness and overall uncertainty. The result has been that economic growth in fisheries is accompanied by growing unemployment and by the livelihoods of the poor perpetually facing threats from new players and factors beyond their control. On the other hand, much evidence exists to show that, given a responsible management regime and a more equal distribution of benefits, fisheries sector can contribute significantly to the wellbeing of a large proportion of the poor in the coastal areas. In spite of everything, a comparison of wages earned in different sectors indicates that fishing is still among the better livelihood options, although its long-term sustainability (as a means of livelihood for a generally poor population) is uncertain because real incomes have been coming down consistently over the last decade. The fact that the sector has a large number of stakeholder groups other than fishers themselves is largely ignored in the debate on fisheries and livelihoods, with the result that a major proportion of the benefits from the sector remain un-quantified and hence, unsupported. The few studies that deal with fisheries are concerned only with small-scale or ‘artisanal’ sector, and there exists a big gap in terms of understanding poverty and livelihoods in the non-artisanal categories like mechanised fishing and aquaculture, not to speak of ‘ancillary’ activities. In the 1980s, the evidence of depletion of fish catches in the near-shore waters (which are now widely agreed to be under severe stress) surfaced in a telling manner. The government’s emphasis on increasing production and productivity from the water-bodies (which were recognised as ‘open access’ in spite of the existence of strong community-based ‘common property’ arrangements in many areas) did not take adequate account of the implications of unhindered exploitation of the resources on their continued wellbeing or to extract the surplus for streamlining the systems to G-4
  7. 7. effectively address the needs related to trade, sustainability or livelihoods of the poorer stakeholders (as done in many traditional management systems). This meant that resource management became more a response to a storm already brewing in the sector rather than a precautionary measure, giving the policy-makers very limited latitude for manoeuvre and forcing them to resort to knee-jerk responses. The fishers, who enjoyed an unlimited access to the resources, not only resent complying with any new regulations, but also are averse to paying the costs of management (if asked, which has yet to happen). The government did put some management measures in place to control the exploitation of the resources, covering a range of instruments, but they have not been very successful. That fisheries is a state subject and, even at the federal level, is looked after by many ministries and departments (with poor inter-institutional linkages and information flows) has meant that resource management continues to remain nobody’s baby. That most policy-making organisations are torn between the three objectives of livelihood support, macro-economic growth and resource conservation gives rise to policies that are often contradictory or ad hoc. Thus, in spite of widespread realisation that the resources are being overfished, there are no restrictions on entry into fisheries and new policies actually encourage increasing fishing effort in offshore waters in the name of ‘fisheries management’! The role of NGOs, fishworker organisations and other civil society organisations in policy- making remains low, despite the (largely symbolic) efforts to increase their involvement. Consequently, the few acts and policies that speak of the need for management do so only as lip service and remain largely ineffectual. These have also tended to be focused on technical/resource-oriented measures rather than on people or economic rationale. The sector-specific nature of these policies, insufficient or inappropriate instruments for implementing them, top-down approaches, lack of participation by all stakeholders either in policy making or in implementation and, most significantly, lack of political will to effect a really meaningful change come in the way of implementing them effectively. There is an urgent need for improving the current knowledge about the fishers and their livelihoods and placing them more centrally in the overall context. There is also a need to develop appropriate analytical frameworks to understand the links between natural resource management, economic growth and livelihood support. An overarching institutional framework for bridging the gaps between these three broad areas at the macro- and micro-levels will also need to be developed. In the context of the multi-species nature of fisheries in India, the best option for management lies in effort-reducing measures, such as phasing out the excessive fishing fleet, reducing subsidies for enhancing fishing intensity or efficiency and supporting the fishers to move into alternative income-generating activities. There is a need to explore and develop a range of instruments for effective fisheries management because management needs to be location-specific and involve local communities in the planning and implementation. Lack of political will, marginalisation of fisheries in the national priorities, the advanced nature of some of the problems ailing the sector and the context of legal pluralism that prevails in the coastal areas are some of the issues that need consideration while formulating a new G-5
  8. 8. – and radically different – agenda for effective fisheries management as well as for sustainable livelihood support. G-6
  9. 9. INVESTIGATING THE LINKAGES BETWEEN FISHERIES, POVERTY AND GROWTH: A Case Study for India 1. BACKGROUND With a land area of 3.3 million km², India is the seventh largest country in the world and is referred to as a sub-continent in its own right. The Indian Union is federal in structure and consists of 28 states and seven union territories. The constitution distributes legislative power between Parliament at the national level and state legislatures at the state level and vests the residual powers in Parliament. Sectors like agriculture and fisheries are State Subjects, and the Union Government’s role in these areas, though significant, is not often direct. World Bank (2004a: 1) notes that, since the 1970s, India’s economic growth rate has risen (averaging 6 percent in the last decade), poverty has nearly halved (from 55 percent in 1973-74 to 26 percent in 1999-2000), and social indicators have shown signs of improvements (the Human Development Index – HDI – went up from 0.411 in 1975 to 0.595 in 2002; Annexure 1). The country has achieved self-sufficiency in agricultural production and also stands tenth among the industrialised countries in the world (GOI, 2005:1). While these improvements illustrate achievements in a challenging environment, it is acknowledged that India' social indicators remain weak by most measures of human s development, ranking it 127 in the world, in HDI terms (UNDP, 2004). The National Human Development Report gives evidence of the government’s resolve to tackle poverty in a holistic and integrated manner. The Millennium Development Goals for India (Annexure 2) include: halving the proportion of people who suffer from hunger; two-thirds reduction in infant mortality rates; universal primary schooling and complete elimination of gender disparities in schooling opportunities by 2015. The broad priorities for national policy as laid down in the Tenth 5-Year Plan (2002- 7) focus on poverty reduction and employment generation, universal access to basic services (literacy, water and health), population control, and addressing gender and environmental imbalances (GOI, 2002a: 6). Fisheries is considered one of the important sectors contributing to economic growth, livelihood support and poverty alleviation in the country. Population characteristics India has the (rather dubious) distinction of being the second most populous country in the world after China with a total population of 1,028 million (16.7 percent of the world population) according to the 2001 Census with a population density of 324 per sq km (GOI, 2005: 6-7). The population has grown consistently since 1901, the decadal growth rate climbing from 5.75 percent in the census of 1901 to nearly 25 percent in the census of 1971, 1981 and 1991, slowing down to 21.54 percent in 20011 (GOI, 2005:8). The sex ratio (number of females per one thousand males) showed a consistently declining trend from 972 in 1901 to 927 in 1991, and 1 It is still impressive because, in real terms, it actually added the highest number ever of people to the country’s population (180 million - only slightly less than the total population of Australia!). G-7
  10. 10. marginally improved to 933 in 2001 (GOI 2005: 11). In the Census of 2001, the men numbered 532.1 million while the women totalled 496.4 million. As infant mortalities declined and health infrastructure improved, India now has the second largest number of elderly persons after China. In 1981, there were about 43 million elderly people in the country (comprising 6.5 per cent of the population), growing to 57 million (or 6.7 per cent) by 1991. The number of widows among the elderly is about three and a half times more than the number of widowers (GOI, 2002b: 92). The growth in population was accompanied by disintegration of social networks such as joint family system and the 1990s saw a spurt in the problems faced by the elderly people (ICM 2003). Urban population Some 742 million people or 72.25 percent of the population reside in rural areas (NIRD 2003: 4). However, rapid urbanisation has been a characterising feature of development in the country since 1950s and, between 1971 and 2001, urban population grew over 2 ½ times from 110 million to 286 million, rising from 20 percent to 28 percent of the total population (GOI, 2005: 15-16). Mumbai, Kolkata, New Delhi, Chennai, Bangalore and Hyderabad are the major cities in the country, but there are at least 20 more cities with a population of over 1 million. Coastal population Nine states and 4 union territories in the country have coastal boundaries and some 360 million people (about a third of the population) live in coastal areas (Mathew, 2003). There is little evidence of an increased movement of people from inland to the coast, except where urban centres are located in the coastal areas. Fishing has traditionally been a caste-bound operation and carried the stigma of being a risky and lowly (and low-paying) activity, discouraging entry of outsiders except into certain sub-sectors like mechanised fishing and aquaculture (mainly as asset owners). The period between 1985-95 saw some new opportunities emerging in the sector, facilitating the entry of people of non-fishing orientation into it (mainly into ancillary, shore-based, activities), but the opportunities quickly fizzled out. In fact, since 1980s, in some coastal states like Andhra Pradesh and Orissa, there has been a growing trend of inland migration by the coastal fishers in search of work in fishing and other wage-paying employment on seasonal as well as long-term (or permanent) basis (Salagrama, 2004c). Long distance migrations from the east coast to the west coast have also become widely prevalent. Economic structure Indian economy followed a mixed economy model, which emphasised the idea, propounded in the Second Five Year Plan, that “the basic criterion for determining lines of advance must not be private profit, but social gain” (GOI, 1956). Apart from a few cosmetic gestures, which created an illusion of advancing towards socialism, the emphasis on socialism did not improve the socio-economic relations enough to warrant a celebration of the development path pursued over the past fifty years (Misra and Puri, 1999:73). Thus, India remains an underdeveloped (or ‘developing’) G-8
  11. 11. economy, characterised by low per capita income ($ 230 in 2003), which is one of the lowest in the world (Datt and Sundharam, 2005:5). Like other under-developed economies, India’s national economy also is based on primary production. Agriculture accounts for a quarter of India’s GDP and 70 percent of the population is dependent on it for a livelihood (GOI, 2005: 60). The service sector grew rapidly in the last two decades and now accounts for more than half of India’s economy. Industrial sector accounts for the remaining quarter of the GDP, and has remained stable since 1982 (Hosch and Flewweling, 2003). The economy is characterised by chronic unemployment and underemployment and low rate of capital formation. There are sharp inequalities in the distribution of wealth and assets, with the top 10 percent owning nearly half the assets in rural areas while the top 14 percent own 66 percent of the assets in the urban areas (Datt and Sundharam, 2005:7). In rural areas, 51 percent of the households at the bottom owned just 10 percent of the total assets, while in urban areas, over half the population owned barely 5.3 percent of the total assets! There are indications that the inequalities of income, wealth and assets between the wealthy and the poor are increasing (PBH, 2003). Quality of life indicators Public health expenditure as a percentage of GDP is 0.9 percent in 2001, but the private health expenditure is more than four times as much at 4.2 percent (UNDP, 2004). Life expectancy at birth has gone up to 63.7 years from 50 years in 1970-75. Infant mortality rate halved between 1970 and 2002 from 127 to 67. Public expenditure on education as percentage of GDP is 4.1 in 1999-2000, slightly higher than it was in 1990 (3.9 percent). The literacy rate in the country has shown remarkable improvement over the years and, according to the Census of 2001, stood at 65 percent, up from 44 in 1981 and a mere 18 percent in 1951. Female literacy, which stood at an abysmal 9 percent in 1951, increased to 54 percent by 2001 (GOI, 2005:14). Population with sustainable access to improved sanitation rose from 16 percent in 1990 to 28 percent in 2000 and that for sustainable access to improved water source went from 68 to 84 percent during the same period. Wide variations exist in terms of access to the basic services between different states as well as between urban and rural areas. Unemployment As GOI (2002b: 36-37) notes, nearly 90 per cent of the employment in the country is in the unorganised or informal sector and the data on the magnitude and composition of employment are not entirely adequate or even reliable. Data gathered through periodical surveys indicate that, during the period 1983 to 1999-2000, the percentage of persons in the labour force declined from 66.5 per cent in 1983 to 61.8 percent in 1999-2000. The decline in the employment growth for females has been significantly higher than that for males. As a result, the incidence of unemployment has increased at the national level from 2 per cent in 1983 to 2.3 per cent in 1999-2000 (GOI, 2002b: 36-37). Planning Commission (GOI 2002a: 3) notes that the composite incidence of unemployment and underemployment stands at 9 percent of the labour force and at almost 13 percent for the youth. It suggests the steadily worsening land- man ratio and the continued dependence of a high proportion of population on G-9
  12. 12. agriculture as the principal causes of growing unemployment and underemployment problems in the rural areas and predicts that the problem is likely to worsen over the years unless measures are taken to either increase the intensity of land use through increased irrigation and watershed development or to shift a significant proportion of the labour force out of agriculture to non-agricultural activities, or both. Balance of payments Following the liberalisation of the economy, the balance of payments situation improved by 2002 and the current account deficit narrowed down to an average of 0.8 percent of gross domestic product (GDP) and foreign exchange reserves increased from less than US$ 6 billion in 1990-91 to US$ 54 billion in 2002 (GOI, 2002a: 103), which is considered an indication of the inherent and current strength of the economy, although scholars like Jayati Ghosh dispute this contention (PBH, 2002: 33-36). 2. POVERTY Poverty Assessment Methodology in India As Deaton and Kozel (2005) note, Indian policy making and politics are dominated by discussions of poverty, and measures of poverty rightly attract a great deal of attention and debate. The Planning Commission of the Government of India (GOI) has been estimating the Head Count Ratio of the poor separately for rural and urban areas for over three decades. It currently uses minimum consumption expenditure, anchored in an average (food) energy adequacy norm of 2400 and 2100 kilo calories per capita per day to define State specific poverty lines, separately for rural and urban areas. These poverty lines are then applied on the National Sample Survey Organisation’s (NSSO) household consumer expenditure distributions to estimate the proportion and number of poor at State level. The NSS is a socio-economic enquiry carried out in the form of successive rounds. The period of enquiry has been varying across rounds and has varied from a few weeks to a few months. During these rounds, the NSS collects information on various socio-economic aspects of households, household consumption being one of the most important. The data are collected on the basis of interviews of households, which are selected following simple random sampling, which is stratified and has two stages. The first stage units are villages in the rural sector and urban blocks in the urban sector. The households constitute the second stage units in both the sectors. The poverty estimates published by the Planning Commission count the number of people who are living in households whose monthly per capita total expenditure is less than a poverty line that is specific to the state and sector (urban or rural) in which they live (Deaton and Kozel, 2005:2). Conceptually consumer expenditure as a measure of standard of living has the advantage that it is amenable to welfare interpretations. But when it comes to empirical verifications, it bristles with problems. NIRD (1998) provides a comprehensive critique on the NSS and the other poverty indicator databases applied to assess poverty in the country. It notes that NSS data do not take into account other dimensions of welfare like health, life expectancy, literacy, access to safe drinking water, public goods or common property resources. This explains why factors other G-10
  13. 13. than hunger got low priority in policy formulations and plan achievements with respect to primary education, primary health etc., have remained quite modest. Recognising it was not sufficient to understand poverty only in terms of lack of adequate income, but as a state of deprivation spanning the social, economic and political context of the people that prevents their effective participation as equals in the development process (GOI, 2002b:3), many attempts have been made to develop alternative indicators of poverty. In the 1980s, the Working Group set up by the Government of India to evolve an acceptable methodology for identifying the poor through criteria alternative to per capita income/calorie requirement, concluded that there is no feasible alternative to the identification of the poor except by annual income and expenditure, while accepting that the estimates of per capita consumption itself have so many limitations. Similarly, NIRD (1998:110-115) attempted to evolve a set of non-monetary indicators, which are simple and easily verifiable for identification of the poor, in the final analysis, could not replace the income criterion successfully, since the percentage of misclassification is as high as 40. As Shanthi suggests (in NIRD 1998:83), different definitions identify different people with very different characteristics as being poor. In preparing the Human Development Report for the country, the Planning Commission (GOI, 2002b: 34) made an attempt to put together indicators on economic attainments that reflect an individual’s personal means as well as outcome measures on the availability and access to basic amenities that capture the public development effort at improving the economic well-being of people. The deprivational aspect of economic attainments was presented through Head-Count estimates of incidence of poverty anchored in a basic food adequacy norm. It is not certain how the results compared with the traditional HCR-based poverty measures. Estimates of Poverty in the country Datt & Sundharam (2005:362-370) provide an overview of poverty estimates in the country since 1960s. The Planning Commission (2002a & 2002b), Sundaram and Tendulkar (2003), Parikh and Radhakrishnan (2002), NIRD (1999a & b); the World Bank (2004) and several others have reviewed the recent poverty situation in the country and concluded that there has indeed been a steady decline in the proportion of the people below the poverty line. The depth and severity of poverty has reduced faster than the incidence, and over time there has been a trend towards a greater degree of clustering of the poor around the poverty line leading to a situation where economic growth is likely to have a considerably larger impact on poverty reduction. Official estimates (based on Head Count Ratio) show a decline in the poverty rate from 55 percent in 1973-74 to 262 in 1999-2000, which, in numbers, still means over 260 million people being poor in the country, down by only 60 million from the 1973-74 estimate (NIRD 2003: 92) thanks to a parallel – and more rapid – increase in population. The decline has not also been uniform either across States or across rural and urban areas. The proportion of poor in the rural areas declined from 45.65 percent in 1983 to 27.09 percent in 1999-2000, while that in urban areas declined 2 Patnaik (in PBH 2002:3) indicates that this figure was erroneous and was based on ‘contaminated’ data and states that the Planning Commission itself accepts it as such. According to more reliable figures that he cites, the rural poverty is determined to be 36.35 percent for 1999-2000 while the urban poverty stood at 28.76 percent. G-11
  14. 14. from 40.79 percent to 23.62 percent during this period, which – in real terms – actually means an increase in the total number of urban poor by 7 million! The Human Development Index (HDI) has improved significantly between 1980 and 2001. Significantly, inequalities across states on the HDI are less than the income inequality as reflected in the per capita State Domestic Product (GOI, 2002b: 3-4). Poverty as an outcome of poor entitlements Whatever the status of poverty in percentage terms, every study agrees that the number of poor in real terms is still alarming and is largely related to entitlements. Incidence of hunger in rural areas in 1999-2000 is as follows: Households (percentage) getting two square meals a day (Source: NIRD 2003: 104) Throughout the Only some months of the Not even some Not reported year year months All India 96.2 2.60 0.70 0.50 Thus, over twenty-six million people in the rural areas have access to two square meals a day only during some months of the year, while another seven million do not have assured access to two square meals even in some months. Per capita expenditure on food amounts to nearly 60 percent of the consumption expenditure in the rural areas (NIRD, 2003: 88). Over half of the children under age of five years in India continue to remain moderately or severely malnourished, 30 per cent of newborn children are significantly underweight and nearly 60 per cent of women are anaemic (GOI, 2002b: 73). The food security at the national level has not percolated to poor households. That this is the case in spite of the country having attained self- sufficiency in food production for well over a decade3 leads unambiguously to the conclusion that it is a question of lack of ‘entitlements’. Economic sectors/regions most affected by poverty Within the country, wide variations exist between states in terms of their human development achievements, ranging from 0.674 for Chandigarh to 0.308 for Bihar (see also Sundaram and Tendulkar, 2003, who analyse change in poverty across 15 major states in India in the 1990s). Such differences between states make it difficult to generalise the conclusions any study across the country. Among the coastal states, Kerala stands first with HDI of 0.591 and Orissa stands among the last with a HDI of 0.345. While many of the coastal states (with the exception of Orissa) fare better than the others in terms of relative well being, they are frequently prone to natural disasters (like the cyclones of 1996 and 1999 that affected, respectively, Andhra Pradesh and Orissa; the Earthquake of 2001 affecting Gujarat; the Tsunami of 2004 affecting Tamil Nadu and Kerala) which upset a state’s economy and the capacity of the poorer stakeholders to pursue their livelihoods, often irretrievably. High incidence of disasters makes many coastal livelihoods uncertain and, in the long run, unsustainable (especially for the poor) (IMM 2001: 7). The large population of the country and the vast diversity of occupations (most of which are in the primary sector) are instrumental in the skewed nature of income 3 To such an extent that mounting food stocks are now the major crisis facing the managers of the national economy (Pariksh and Radhakrishnan, 2002: 8-9)! G-12
  15. 15. distribution and high incidence of poverty. Deprivation also stems from, and/or is exacerbated by, social inequality arising from systemic processes like caste, age, religion, gender and geographic origin, which determine the access to, and availability of, resources to a household and vary from place to place and from time to time (Salagrama, 2003a). The livelihoods of the poor are characterised by their dependence upon common property or open access resources. While this is obviously true in case of fishing communities, there is much evidence to show that other categories of people like agricultural labourers too depend on CPRs, but the dependence is often masked because of its frequently non-monetised nature. Any changes in terms of access to these resources – either curtailing the poor’s entry or enabling that of the more affluent sections – can have serious consequences for the livelihoods of the poor as the development of fisheries sector in India demonstrates (Salagrama, 2003a). The planners assumed that economic growth, supplemented by policies of progressive taxation and public expenditure would lead to a rise in the level of living of the poor. Production-oriented approach without altering the mode of production could not but result in the appropriation of the gains of development by the owners of instruments of production. Using the NSS data, Minhas, Bardhan, Dandekar and Rath and a few others have attempted to identify particular groups of poor across the country (Misra & Puri, 1999: 237) and decided that, in all cases, it was the ownership of land (in the case of agricultural sector) that determined the wealth status of a household. In the fishing sector, which depends on open access (or common property) arrangements to the natural resources, it is not so much the availability of the resource in the open, as the means of access to the resource and the ability to extract it efficiently that is important, which are both increasingly dependent upon the fishers’ capacity to invest in efficient fishing systems. Thus, poverty in fishing communities is determined by the ownership of production tools (boat, nets etc.) (ICM 2003a). Obviously, those who cannot afford to invest in productive assets and hence work on others’ boats find themselves having little say in fishing operations or sharing patterns. Datt and Sundharam (2005) conclude that the philosophy of automatic transmission of the benefits arising from an increase in production to the bulk of the small farmers, landless labourers or factory workers without transferring property or tenurial rights either to the State or the peasantry was destined to failure. However, developments in the 1990s indicate that owning land or production tools is not a sufficient condition for a sustainable livelihood. It becomes one only when the availability of, and the demand for, the resource – fish, in the case of fishing communities – remain stable and consistent. In other words, the health of the natural resources and the vibrancy of markets became the prerequisites for sustainable livelihoods. The 1990s saw agriculture, the prime motor of the national economy and the most important source of livelihoods in the country, slow down. A recent study by NIRD (2004) notes that, from the middle of 1990s, there has been an all round crises in agriculture owing to increasing cost of production, falling output prices, inadequate markets and, on top of all these, the liberal policies of importing agricultural products in India. Agricultural income grew at a slower pace in the 1990s than that in the 1980s and output decelerated even more (Parikh and Radhakrishnan, 2003:8). Fisheries too had a similar experience through the 1990s, as production reached a plateau and fish trade fluctuated wildly. These trends have put G-13
  16. 16. the producers under severe stress and have a negative impact on employment potential and wages in the primary sector, both of which are stagnating. Consequently, large-scale influx of rural migrants – including agricultural labourers as well as small landholders – into cities in search of work gathered momentum in the 1990s (see Deshingkar & Start, 2003). A more serious consequence of the failure of agriculture as a sustainable means of livelihood for the people has been the drastic increase in the number of suicides in the farming community (NIRD, 2004). But, while suicides have managed to attract some attention, the issues of general deprivation and poverty as well as increasing vulnerability and marginalisation of the poor in agriculture and allied sectors like fisheries (Salagrama, 2004c) have generated less interest and the policy responses to the crises have remained patchy at best. As both production and trade fluctuated in agriculture and fisheries in the 1990s, the ownership of land or production tools no longer allows the producers to take their livelihood for granted and even becomes a constraint in the way of diversifying or migrating out of the sector. As many participatory wealth-ranking exercises in the eastern coastal states of India show, the owners of small landholdings and boats are routinely ranked as being more vulnerable than the asset-less wage labourers and less capable of making the shift to another activity, and the asset-less workers are thus considered better off than the owners! Studies on poverty There are too many studies on poverty in India (see Deaton and Kozel, 2005 for a detailed review). A search on the WWW yields a mass of information from a wide range of sources (government, private sector and NGOs, international aid agencies), presenting different perspectives (national, regional and sub-regional and community-level; general and specific project oriented etc.) and, not infrequently, different agendas. It is impossible to give even a flavour of the information available on the subject, which is not surprising considering the size of the Indian sub- continent and the severity of the problem (not to speak of the fact that the compiler of this study is not trained in economics). Sources of information provided at the end of this report give some useful links on Indian poverty. Apart from government sources like the Planning Commission and the National Institute of Rural Development, several NGOs, like the Centre for Economic and Social Studies (CESS), carry out studies to assess the performance of poverty alleviation programmes. The World Bank, UNDP and DFID and the many programmes and projects that they support, bring out many publications – policy briefs, working papers, and reports – detailing changes in poverty generally as well as from the perspective of specific projects undertaken with their assistance. In terms of studies on poverty, the fisheries sector has attracted relatively less attention than its counterparts like agriculture and forestry. It is generally assumed that the fishing communities are poor as a rule and few attempts have been made to distinguish the poor from (and within) the artisanal fishers. Most ‘socio-economic’ studies are largely confined to assessing the viability of specific technologies or projects from a technical, economic and (less frequently) social perspective, than to G-14
  17. 17. understand or explore poverty in the fishing communities. Many NGOs may have a better understanding on the subject, but this is confined to a few villages and is seldom compiled or analysed for various reasons. There are also the practical difficulties of gathering and disseminating information widely in a country the size of India and the condition persists even after the arrival of the Worldwide Web on the scene. There are some exceptions to the general trend. The FAO’s Bay of Bengal Programme (BOBP) documented a wealth of information on the small-scale fishers in 1980s and 1990s. International Collective in Support of Fishworkers (ICSF) regularly brings out a number of publications focusing on small-scale fishworkers, an important strand of its work being to explore the gender dimension in fisheries. On the west coast, the Programme for Community Organisation (PCO), the South Indian Federation of Fishermen Societies (SIFFS) and the Centre for Development Studies (CDS) documented the life and livelihoods of the small-scale fishing communities in Kerala. Many research projects commissioned by the DFID from mid-1990s focused on poverty in the fishing communities and filled some important gaps, although much work still needs to be done. FAO-SIFAR supported a study on poverty, food insecurity and vulnerability in the coastal fishing communities of Orissa state in 2003 (ICM, 2003a), but it has remained unpublished. A point to note is that most of these studies deal only with the small-scale or ‘artisanal’ sector, and there exists a big gap in terms of understanding poverty and livelihoods in the non-artisanal categories like mechanised fishing and aquaculture, not to speak of ‘ancillary’ activities. As a result, as one study (Vivekanandan et al, 1996) noted in the context of Andhra Pradesh, policy making in India probably has little basis in a real understanding of the actual issues of concern to the fishers themselves. While there is no denying the clear need to include all livelihood groups in fisheries (artisanal and non-artisanal; capture and culture; marine and inland; men and women) in the poverty and development debate in India, recent experiences force one to conclude that the probability of this need taking a concrete form remains bleak. As evidence, one can show the massive post-tsunami rehabilitation programmes undertaken by government and NGOs in Tamil Nadu, where a vast majority of the ‘livelihood programmes’ are more or less confined to providing boats and nets alone, ignoring concerns and warnings about the possible impacts of such indiscriminate proliferation of fishing capacity on the resources on the one hand and on the social equity and equilibrium aspects on the other. The widely accepted fact that several fishing related livelihoods had been facing serious sustainability problems prior to the tsunami have been conveniently overlooked in the programmes4. This line of thinking takes ‘fisheries livelihoods’ as being synonymous with fishing operations5 to the exclusion of other activities and players, and this 4 Another casualty in the rehabilitation programme appears to be the Coastal Regulation Zone Act, a contentious piece of legislation at the best of times, but now a veritable headache for many rehabilitation efforts. 5 The emphasis is mainly on providing boats to the ‘artisanal’ sector in the (mistaken) belief that the boats in the artisanal sector cannot contribute to resource over-exploitation and also that providing a boat to every fisherman is akin to providing a piece of land to every agricultural worker, i.e., a means of improving equity. Such social engineering experiments in a sector that is not at all well understood G-15
  18. 18. lopsided understanding leads to major imbalances in the rehabilitation process. Apart from a token commitment to promoting ‘alternative/supplementary livelihoods’, most agencies have avoided exploring options for alternate livelihoods in a meaningful manner. More alarmingly, almost everyone – government, NGOs, church-based groups, national and international aid agencies – is unanimous in supporting production-enhancing technologies as the means of livelihood support, either through ignorance or because of a hurry to spend aid (and to be seen to have done so) and there is really no effort to seek or suggest alternative paradigms of development (which one would have expected to come from the NGOs). One can agree with the oft-quoted statement that one hears in Chennai these days: that the real disaster began after the tsunami of December 2004. The conclusion one can draw from this is perhaps that the links between poverty, environment and trade as well as the impact of the major trends in the fisheries sector – declining access to, or availability of fish; technologisation, over-capacitisation and the consequent indebtedness/credit-market linkages; and changing trade context – on the life and livelihoods of many categories of fishers (not to speak of the various non-fishing stakeholders) continue to be overlooked at all decision-making levels. To the question whether the benefits from exports (or the other forms of wealth created in the sector) can be used for improving livelihood sustainability of the poor (if such questions ever get asked at the policy-making level), the answer could be ‘yes’ in a theoretical sense (and one could even suggest a number of ways to do it), but, in practice, it is very doubtful that such options would make it into policy. 3. ECONOMIC GROWTH Since its Independence in 1947, India experimented with a Mixed Economy model, which was felt to be apt for a poor, developing country of this magnitude, but turned out to be an opportunity for bureaucracies and controls to proliferate leading to a stagnation in economic growth. The weaknesses in the Indian economy came to the fore in 1991, when India faced a serious balance of payment crisis. In order to overcome the crisis, the country embarked upon a massive programme of liberalisation and the reforms involved opening up the economy, reducing the public sector’s role, and liberalising and strengthening the financial sector (World Bank, 2000:2). Licensing for domestic manufacture was abolished for all but a few industries. The private sector was permitted to enter into areas hitherto reserved for the public sector. Import tariffs were drastically reduced and the rupee was devalued significantly. The government made a clear commitment for further liberalisation and reforms (Parikh & Radhakrishnan, 2002) and with Mr Manmohan Singh, the original architect of the reforms process in the country, at the helm of affairs now, it can be expected that the reforms will continue with renewed vigour. GDP Per Capita Gross Domestic Product (GDP) of the country in 2002 in US$ was 510.2 billions and in terms of Purchasing Power Parity, it was US$ 2,800 (HDR, 2004). The Per Capita GDP for India has been showing a consistent increase since 1975, as the following and implemented post-haste in many cases could, it is feared (Muralidharan, pers.comm..), potentially lead to serious imbalances. It is widely believed that the number of boats being provided will easily exceed those actually lost/damaged in the tsunami. G-16
  19. 19. table shows. It is interesting to note that the GDP does not show any fluctuations in the post-Liberalisation period. Year 1975 1980 1985 1990 1995 2000 2002 GDP per capita (PPP-dollar) 430 630 960 1 380 1 830 2 420 2 670 Source: Globalis (2004) Economic growth and poverty As Deaton and Kozel (2005) note, what happened to poverty in India in the 1990s has been fiercely debated, both politically and statistically. The effects of liberalisation on poverty remain controversial (see also Datt & Sundharam, 2005:375-8), and the official numbers published by the GOI, showing an acceleration in the rate of poverty reduction have been challenged both for showing too little and too much poverty reduction. After a thorough review of various estimates, Deaton and Kozel conclude that although there is no consensus on what happened to Indian poverty in the 1990s, there is good evidence both that poverty is falling and that the official estimates of poverty reduction are too optimistic, particularly for rural India. One might say that it might be still too early to establish the relation between economic growth and poverty in the country. Similarly, while determining the HDI for different states, the Planning Commission (GOI, 2002b: 4) finds that the relation between the HDI and the level of economic growth does not show any correspondence among the middle-income states in the country. The Planning Commission concludes that human attainments appear to be better and more sustained in those parts of the country where there is social mobilisation for human development, and where female literacy and empowerment encourages women to have a say in the decision making process at the household level. Main contributors to economic growth Over the last twenty years, agriculture has become less important to the national economy. Agricultural output growth declined by about 1 percentage point to 2.7 per annum during 1992-99 as against a growth rate of 3.6 percent in the 1980s (Parikh and Radhakrishnan, 2002: 33) and its contribution to GDP fell from 44 percent in 1973-74 (GOI, 2002a: 28) to only one quarter in 2002. As if to underline the declining importance of agriculture, investment in agriculture as a percentage of GDP has come down from 1.6 percent in 1993-94 to 1.3 percent in 2001-2 (The New Indian Express, 15 November 2004: 10). The service sector grew from 37.2 percent in 1982, to 49.2 percent in 2002 – representing now virtually half of India’s economy. The contribution of the industrial sector has remained stable at 26 percent throughout this period. Contribution of fisheries to national economy G-17
  20. 20. i. Brief overview of the growth of fishing economy in the country6 It is important to note that while the rest of the economy was opened to the markets only in the 1990s, fisheries development in the country since 1950s has always been based upon the open economy model. As Johnson (2001) puts it, “The development path advocated by modernisation relies on a variable mix of market incentives and state intervention, the latter specifically to stimulate growth in capacity through investment until such a time as the country or region builds sufficient momentum to maintain growth on its own”, in other words, by liberalising fish trade. Agriculture was not given an export orientation because it was felt that it should primarily meet the domestic demand and fisheries was primed for exports (Anjani Kumar et al, 2003:9). At the policy level, fisheries development became synonymous with addressing the foreign exchange needs of the country from the Second Five Year Plan onwards, and shrimp emerged from relative obscurity to become the Prima Donna of Indian fisheries by late 1960s. The emphasis on increasing exports led to an active focus on developing new harvesting technologies like mechanised trawling through influential initiatives like the Indo-Norwegian Project (INP) in Kerala and FAO-supported programmes elsewhere in the country (Kurien, 1985; Vivekanandan, 2002; Srivastava et al, 1990:33; DOF-Karnataka 1978: 8; DOF-Andhra Pradesh, 1978 4). Exploration by INP and CMFRI on the west coast (Kurien, 1985) and by the GOI survey vessels on the northeast coast of India (Somvanshi, 2001:2) in late 1960s and mid-1970s opened up the Indian seas for shrimp fishing. The GOI set up a chain of ice-cum-cold storage plants (procured under TCM fisheries programme) at important coastal centres (GOI, 1961), which were instrumental in encouraging some private entrepreneurs to export shrimp to the US in late-1950s, with spectacular results (Kurien 1985). The growing demand from the US and Japan for Indian shrimp received a boost with the devaluation of Indian rupee in 1966 and the markets for Indian seafood shifted from traditional buyers like Sri Lanka to more affluent economies like the USA, Europe, Australia and Japan (MPEDA, 2001). Significantly, in all this, the coastal waters were treated as an open access regime (GOI, 2001a; Hosche & Flewweling, 2003), which encouraged people to move into the sector and exploit a common resource freely. From the 1970s, the government recognised brackishwater aquaculture as one of the potential sectors for growth and took measures to support it. The Ministry of Commerce took the initiative to promote shrimp farming ‘in line with the objective of maximization of foreign exchange earnings’ (Srivastava et al, 1990: 70) and, under its Marine Products Export Development Authority (MPEDA), evolved a number of schemes to support aquaculture. In coastal states like Andhra Pradesh, a major chunk of mangroves in the estuarine systems were de-reserved for shrimp 6 For many reasons (conceptual/methodological; practical/logistical), this study focuses mainly on the marine/brackishwater sector and less on the inland sector but this should not be construed to mean that the latter are any less important in terms of providing livelihoods, particularly in central and north- eastern parts of India where riverine capture and freshwater culture provide sizeable livelihood opportunities for the poor (who, unlike in marine sector, belong to a wide range of castes, which makes inland fisheries more ‘inclusive’ than the others). One can assume, however, that the broad contours of development of the inland sector are not much different from those of the marine and brackishwater areas. G-18
  21. 21. farming (AAI, 2001: 57). Individual entrepreneurs were encouraged to take up shrimp farming with financial and technical support (AAI, 2001: 17) with generous assistance from banks and other financial institutions. Until the hatcheries began to supply seed for culture, fishermen and women were trained in wild-seed collection and were also provided assistance for acquiring the tools for seed collection (BOBP, 1986: 11) (MPEDA, 1984:50). After the liberalisation of Indian economy in 1991, aquaculture really grew big as it became possible to import efficient farming technologies, feed and other essential ingredients7. The 1990s also saw many farms moving from extensive farming to semi-intensive and intensive farming systems (ADB/NACA, 1998:100). Motorisation of artisanal craft, which began in the 1980s, was an important event in the small-scale fisheries on the east coast of India. Together with revolutionary new gears like the trammel net and the long-lines, motorisation paved the way for the artisanal fishers to enter shrimp export market chains and to supply distant domestic market trade. The numbers of motorised boats grew from scratch to nearly 45 000 by 1999 (Sathiadhas, 1998:466; GOI, 2000: 128). ii. Contribution of fisheries to national economy By 2000, the gross investment on fishing component is estimated as Rs 8 000 crores (Vivekanandan, 2002), much of it being in the private sector. Fisheries contribute Rs. 19 555 crore to the Gross Domestic Product (GDP), which works out to 1.3 percent of the total GDP or 4.6 percent of the GDP from agriculture sector, and the figures are impressive when compared to those in 1970-71, when fisheries contribution to the GDP stood at 0.62 percent of the total GDP and 1.46 percent of the GDP from Agriculture (GOI, 2000: 130). iii. Contribution of fishing sector to exports Indian seafood exports have grown by over twenty times in the four decades from 1961-62 to 1999-2000. The export of seafood from the country increased from 15 732 metric tonnes (MT) in 1961-62 to 343 041 MT in 1999-2000. In terms of value, the exports have gone up from a mere Rs. 4 crore to Rs. 5 117 crore or US $ 1 189 million during the period, and the unit value realisation increased from Rs. 2/kg to Rs. 149/kg (MPEDA 2001). In terms of overall exports from the country, seafood stands at tenth place, accounting for 2.7 percent of total export earnings in 2001. Among seafood exporting countries, Indian exports stood 17th in terms of quantity and 12th in terms of value (Mathew, 2003). The contribution of exports to the GDP from fisheries in 1998-99 is about 24 percent, and to the national GDP is 0.3 percent (calculated from GOI, 2000: 1 & MPEDA 2001:27). In terms of volume, exports constituted 5.75 percent of the total production and 11.2 percent of the marine production in 1998-99. One must keep in mind that the earnings from the exports are gross earnings, and when the cost of production (including the cost of subsidies and the success-to- failure ratio in aquaculture) is deducted from these, the net earnings may come down 7 In 1990-91, brackishwater cultivation in India covered 65 100 ha, and the total production was 35 500 MT, with an average productivity of 550 kg per ha (GFC, 1994:59), but by 1999-2000, the extent of area under brackishwater culture grew to over 150 000 ha (MPEDA 2001). G-19
  22. 22. significantly. The opportunity costs of diversifying fishing effort to cater to domestic markets and the cost-benefit of focusing the development outlays on other programmes might provide a more realistic picture of the earnings from the shrimp exports. As for the distribution of income generated from the exports, as ever, there are no studies to provide a good understanding. It must be borne in mind that the fisheries export earnings at the national level might look impressive, but they constitute only 2.5 percent of the total export earnings and a quarter of the earnings from the fisheries sector. And when spread over a vast area and among a wide range of stakeholders, the earnings would become pretty thin (and get even thinner when the seasonality issues are brought into the picture). A large share of the processing and export markets is held by a relatively few companies in Andhra Pradesh and Kerala. SIFFS 2002 notes that 87 percent of the seafood processed in Kochi belt in Kerala during 1999-2000 was done by eight processors out of a total 69 processing plants in the area. Nearly 70-80 percent of the seafood in Andhra Pradesh is reportedly processed by four or five large companies. Some of the large processors also own factory vessels to have a better control over the quality of the catches and the operations. One can speculate and say that a small minority of people – mainly in the processor-exporter category (rather than in the producer category; the current rates of return in many fishing systems appear to be too poor or uncertain or, if they are better than is generally assumed, no reliable information is available on this issue) – might be garnering a sizeable proportion of the export earnings in the sector, but this will need to be validated through further research. Salagrama (2004a) provides a broad characterisation of the different stakeholders involved in the export sector in Indian fisheries. The fishworkers in the export sector (mainly the producers and processors – peelers, sorters, packers, transporters) are not organised (nor are encouraged to organise) and, as such, have no scope to negotiate wages (or the conditions of their work) based upon a realistic estimate of the returns. This might work against the owners when the markets fluctuate, but the availability of large unemployed workforce in the unorganised sector still gives them freedom to get away with it. Joint-venture operations are prevailing in brackishwater aquaculture sector (mainly on the east coast of India), which involve setting up buy-back arrangements with farmers in return for meeting their credit and other needs. It is not known what the share of the joint venture and multinational corporations is in the overall export earnings. iv. Contribution of fisheries sector in terms of poverty alleviation, livelihood support and environmental sustainability The economic benefits from shrimp trade to the fishing communities have been considerable. The growth of the sector opened new employment opportunities and being largely informal, helped many poor people to find work. As fish production increased, there has been a corresponding prosperity in the fishing communities (although its benefits were uneven and skewed within and between villages). Many G-20
  23. 23. fishers used the surplus to invest in fishing (more boats), ancillary activities (ice plants, transport systems, boat building yards) and non-fishing activities (agriculture). Quality of housing, access to villages and fishing infrastructure improved. The improved access to fishing villages and the frequent trips by the traders allowed the normally isolated and inaccessible fishing villages to make contact with the larger world and to improve their access to basic services. The interactions of the fishing communities with the external world improved and this has certainly raised their social consciousness. Impacts on poverty: On the other hand, the economic growth of fisheries has not been translated into an effective antidote to poverty. Although modernisation generated new opportunities, it is doubtful that these were equal to those lost, or that the people who lost out were also the gainers from the new opportunities. As Mathew (2003:2) notes, while there is apparent prosperity in several fishing communities because of increasing fish production and market value, there is, on the other hand, poverty among fishers who have smaller or no capital base. Entry into the new market chains involved high capital investment and recurring expenses, and automatically excluded many poor people from owning new technologies or managing them successfully. To quote Mathew again, “A fraction of the fishing communities now owns and operates sophisticated fishing units, while the majority toil away, either earning their livelihood as workers, or leading a hand-to-mouth existence operating rudimentary fishing units, with very small marketable surplus”. A review by the Government of Kerala in late-1970s concludes that, “The benefits accruing to the traditional fishermen [i.e., the poorest sections in the sector] on account of the government’s mechanisation programmes were negligible” (GOK, 1978: 7-8). In fact, the arrival of more efficient systems into the near-shore waters often gave rise to conflicts with traditional users of the resources. Such conflicts have been reported from Goa (Nalini Nayak 2002), Tamil Nadu (Bavinck, 2001), Andhra Pradesh (Vivekanandan et al 1997), Orissa (Salagrama, 2002), and Kerala (Kurien and Achari, 1994). This also led to the growth of ‘subsidy culture’, i.e., the expectation that the State has the responsibility to contribute to the wellbeing of the sector (see Tharakan, 1998), which meant spending valuable resources on shoring up the sector at the expense of the poor depending on it. This high degree of externalisation of costs also had implications on livelihoods, environment and trade. An important change brought about by the modernisation process is the marginalisation of women from the productive sphere. Similarly, although domestic food security was one of the important objectives of the modernisation programme, it could not be reconciled with the capital-intensive, export-market oriented strategies adopted. While the export of shrimp might not have directly affected food security, it certainly did so when the fishing boats began targeting shrimp to the exclusion of the other species. The result has been that there is less fish available for domestic consumption by the fishworkers themselves (Salagrama, 2003a). Impacts upon livelihoods: The classic ‘Tragedy of Commons’ scenario in marine capture fisheries unfolded in Kerala as early as 1970s (Kurien, 1985), and in other states by 1980s. By 2000, there has been a drastic decline in the catches and catch G-21
  24. 24. per effort in the mechanised sector on the east and west coasts (FFPI, 2001; Bhatta, 2001). Fishing Chimes (March 2004) reported that many mechanised boat owners in Vizag were resorting to distress sale of their boats because of falling shrimp catches, un-remunerative prices and rising operational costs. Many others were reportedly anxious to sell their boats but were unable to find buyers. Beginning in 1995, shrimp culture has been consistently affected by serious outbreaks of viral diseases, which practically wiped out hundreds of farms and farmers. Price fluctuations in the international markets, local resistance and antagonism in the early stages, adverse judicial decisions (the Supreme Court judgement of 1996 banning non-traditional shrimp farming in the coastal zone), and raising costs of production have made the activity risky. Poor recoveries and high risk forced banks and insurance companies to withdraw from the sector. With the motorisation of small-scale sector, the concept of risk entered into operations, as the investment costs in fishing went up by 60 percent (Vivekanandan, et al 1997: 19). In Kerala, motorisation was found to increase the level of investment five to ten-fold (SIFFS, 2001:46). In the normally cash-starved artisanal fishing economies, increased investments could only come from outside, which involved getting into complicated trade arrangements. Because subsidies were not available, or accessible, to all, a widening gap developed between the motorised and non- motorised boat owners and this led to productivity disparities and unequal access to the common resources of the coastal waters (SIFFS, 1991). Environmental impacts: More seriously, the growth in fisheries may have been achieved at the cost of the sustainability of the natural resources, which is an outcome of promoting the coastal waters as an open access resource and, later, the failure to control rapid expansion of fishing fleets and to put a viable fisheries management structure in place. Both trawling and aquaculture have been reported to contribute to the degradation of natural resources and environment (Vivekanandan, 2002; Sujatha 1996; Puthra Pravin et. al 1998; Prathibha Rohit 1993; Vivekanandan et al 1997 etc.). The focus on promoting a particular technology or a species (shrimp) has clear environmental implications. The technologies were introduced without assessing their relevance and likely impacts upon the complex interrelationships between man and environment, and in many cases, the ecological consequences have been severe. In order to maximise earnings, the mesh size of the nets is decreasing and more destructive gears like ring-seines are making entry in many fishing villages, with the result that the size of many commercial species being landed are of a smaller size and the catches frequently consist of juveniles (see Sujatha 1996; Luther & Sastry, 1993). The State’s inability to control expansion of the technologies it had itself promoted, or to implement effective management measures, came in the way of reducing effort. Conclusion This chapter attempted to examine the nature and patterns of economic growth in India, with emphasis on the contribution of the fisheries sector, which indicates that economic growth has not been accompanied by (i) establishment of a rational and sustainable natural resource management system and (ii) progressive distributional G-22
  25. 25. changes for equitable distribution of the benefits in order to address the poverty and livelihood concerns. The government’s emphasis on increasing foreign exchange earnings is not accompanied by putting checks on over-exploitation of the resources, or to extract the surplus for streamlining the systems to effectively address the needs related to trade, sustainability or livelihoods of the poorer stakeholders. The failure to address the growth, environmental and social concerns in a meaningful manner will ultimately affect the sustainability of the sector as a whole as well as the stakeholders who depend on it. The fact that different aspects of fisheries are covered by different ministries or departments has meant that each agency has its own priorities and viewed the sector from its own perspectives along the lines of the story about the elephant and the five blind men. As has been long argued, there is a need to bring fisheries under a single ministry at the central level and its activities are synergised with those of the various state governments. 4. FISHERIES DEVELOPMENT AND MANAGEMENT Fish production India has a coastline of 8 041 kilometres with an exclusive economic zone (EEZ) stretching over 2.02 million km2, and the continental shelf covers 0.5 million km2. Annexure 3 provides basic information on distribution of marine resources in India. The potential resources available from the Indian waters are 3.9 million tonnes, (2.2 million t in the inshore and the rest in the offshore waters) (GOI, 1996). India also has inland water sources covering over 190 000 km and open water bodies with a water-spread area of over 66 lakh hectares (GOI 2000: 122). Brackish water area available for aquaculture is 1.2 million ha, of which 165 000 ha has been developed (MPEDA, 2001). Between 1951 and 2001, India’s fish production increased eight-fold from 0.75 million MT to 5.6 million MT8 (Annexure 4). India is currently the fourth largest fish producer in the world after China, Peru and Japan (Mathew, 2003). India’s contribution to world fish production increased marginally from 3.7 percent in 1950 to 4.18 in 1997, but the share of marine sector declined from 2.97 to 2.86 percent during the period. The west coast contributes 70 percent to the total marine landings, while the east coast accounts for more than half the freshwater fish production and nearly 95 percent of the cultivated shrimp production (MPEDA, 2002). In 2000-1, the marine fish production came from about 44 species groups, of which 10 accounted for half the production (Mathew, 2003). FAO’s country profile for India (FAO 2000a) notes 8 A note of caution about the statistics used in this report: there is much debate about the validity of Indian fisheries statistics available with different departments of fisheries. See Vivekanandan et al 1997 for a critical review; Salagrama 2003a shows how different sources have different – and totally unrelated – fish landing statistics for the same area, i.e., Orissa. In Tamil Nadu, it is not uncommon in the post-tsunami period to find the same official agency providing more than two sets of data for the same parameter (Ahana Lakshmi, All one can say is that one needs to be cautious while making judgements based on the statistics on production. The statistics on exports (quantity-wise or earning-wise) are far more reliable because they are monitored carefully. In all other instances, lacking alternatives, the general practice is to use catch statistics as indicative of broad trends (which are obtained through more rigorous micro-level studies etc.) rather than the other way round. G-23
  26. 26. that Indian oil sardine (Sardinella longiceps), Indian mackerel (Rastrelliger kanagurta) and Sciaenidae dominate the catches, while Bombay duck, anchovies, cephalopods, perches and Carangidae are also important. The three largest fisheries on the west coast of India are Indian Oil sardine, Bombay duck and shrimp fisheries. The main stocks exploited on the east coast include: lesser sardines, silverbellies, penaeid shrimps, sciaenids, Hilsa spp., catfishes and perches (Hosch & Flewweling, 2003). The principal inland fish resources are: major carps (catla, rohu, mrigal and calbasu), minor carps, exotic carps (common, silver and grass carps), murrels and catfishes (wallgo, pangasius etc) (GOI, 2000: 48-49), and over 70 percent of the freshwater production of 2.84 million tonnes in 2000-1 came from carp species. In 1999-2000, there were a total of 181 284 artisanal (i.e., non-motorised) (65 percent of the total), 44 578 motorised (16 percent) and 53 684 mechanised fishing crafts (19 percent) in the marine sector (GOI, 2000: 128). Most of the fishing vessels are below 20 m length overall (OAL) and consequently qualify as ‘small-scale’ irrespective of the methods of fishing used or harvesting power, which has a bearing on current management efforts. Shrimp in Indian fishing economy Shrimp undoubtedly is the most important species in the fisheries economy and is the backbone on which most activities (mechanised fishing, aquaculture and many artisanal operations too) survive. In 1995 (for which figures are available), penaeid shrimp accounted for nearly 38 percent of the total value of landed catches although constituting only 8 percent of the total landings (Sathiadhas, 1998:409). Significant increase in shrimp production from aquaculture has been an important development since 1990s. Marine capture fisheries accounted for the entire quantity of shrimp exported until 1987-88. However, between 1987-88 and 1999-2000, the contribution of capture shrimp has come down to 22 percent of the quantity and 24 percent of the value of the total shrimp exports from the country, and in terms of quantity, it has dwindled from a peak production of 55 736 MT to 24 275 MT (MPEDA, 2001: 37). In 1988-89, shrimp from culture sources contributed nearly half the total exports of shrimp, and further increased to 78 percent by 1999-2000 and now cultured shrimp account for a quarter of the total seafood exports from the country. Mathew (2003) notes that in 2001, aquaculture contributed 60 percent of the total export value, thus emerging as the most important seafood export from India. Trends in fish production The growth rate in fish production has been on the decline since 1981 and during 1991-2000, it was only 1.9 percent (CMFRI, 2003: 3). The contribution of marine fish to overall landings declined from 71 percent to 50 percent, the decline being due to increased production in inland and culture sectors as well as falling growth rate in production. Within the marine sector, the annual average landings by the trawlers increased from 300 thousand t in 1980-1981 to 1.3 million t in 1999-2000, increasing their share in marine production from 30 percent to nearly 50 percent (Vivekanandan, 2002). The annual per capita production of active fishermen in the artisanal sector declined from 2 590 kg in 1980 to 420 kg in 1996-97, while it G-24
  27. 27. increased from 5 260 to 8 130 kg in the mechanised sector (Sathiadhas, 1998: 466). The production from pelagic resources increased three-fold since 1961, reaching 1.36 million tonnes in 2000, but its relative contribution to the total landings declined from 71 percent in 1965 to 50 percent in 2000. From 1989 to 2000, the landings of small pelagics remained static at around 1.2 million tonnes annually. The landings of demersal fish have increased from 0.23 million tonnes in 1961 to 1.33 million tonnes (or half the total landings) in 2000. However, the trend in the aggregated landings of the demersal fish levelled off since 1994. Overall, the catches from inshore waters are reported to have reached their full potential and may have begun to be overexploited (GOI, 2001b;Vivekanandan, 2002). Similarly, the increase in the percentage contribution of brackishwater production to exports is related more to the poor performance of the capture sector and raising unit value (from Rs. 244 to Rs. 330) than to increased production. After reaching a peak 82 850 MT in 1994-95, the aquaculture production dipped and it was only in 1999- 2000 that it went up beyond its previous peak to reach 86 000 MT. But then, between 1994-95 and 1999-2000, the total brackishwater area under culture grew by 56%, while the shrimp production grew only 4 percent, that too only in the final year (MPEDA, 2001:39)! Landed values of fish The nature of fisheries (multi-species, dominated by 44 species), sale of fish in open auctions (largely based on visual observation) at many landing centres, long market chains involving many intermediaries, and seasonal and regional variations in terms of production and disposal of different species make it extremely difficult to determine the landed values of different fish across the country. It is possible to obtain a better idea about the values of export species like shrimp because the transactions in this category are more formal and necessitate that the quantities and values of exports be recorded, but for a major proportion of fish catches, which are consumed in the country, no such information exists other than when collected for specific purposes (as, for e.g., Sathiadhas, 1998), which tend to be mainly one-off exercises and frequently resort to fixing a uniform unit price for a species across the country, making the figures indicative at best. The gross income generated at landing centre level from the marine fish catch of 2.7 million tonnes in 1999-2000 is about Rs. 10 486 crore (CMFRI, 2003:247). Fisheries exploitation or activity-related benefits There are 3651 fishing villages in the country and some 6.7 million people depend on fisheries for a livelihood (GOI 2001). This includes about 1.5 million people engaged in fishing operations (with full-time and part-time fishers accounting in equal measure to the number) and over one million people engaged in pre- and post-harvest operations. Nearly half the full-time fishermen are on the east coast of India and the west coast accounts for 35 percent while the remaining are spread over other states and union territories (Mathew, 2003). G-25
  28. 28. Demographic and socio-economic data on several key stakeholder groups in the sector are not available. As CMFRI (2003:248) notes, “Lack of socio-economic information has been one of the most serious impediments to effective policymaking and planning, especially in the case of small-scale fisheries.” The published data on fisheries, such as the annual handbooks on fisheries statistics, give information on fish catches and numbers of harvesting tools (boats and nets, areas of fish ponds), but make only cursory mention of the people involved in the sector and that too, in a way that raises more questions than answers any. Consequently, as Mathew (2003) notes, “Since there are no studies on income distribution in Indian fisheries and aquaculture, it is difficult to discuss how much of the benefits of increasing fish production and value of fish output actually translate into human development of fishing communities.” Obviously, this is one important area that needs further research in the near future. The information in the following sections is drawn from secondary data where available, but also from interviews conducted with stakeholder groups in the sector in the east coast states of Andhra Pradesh and Orissa. These figures will vary from area to area (fishers in Kerala have a much higher per capita earnings while those in some parts of Orissa might have much less) and from season to season, but will serve to indicate broad trends. Employment in different production-related activities Sathiadhas (1998: 467) provides a thumb rule that, on average, every 5 kg of marine fish produced provides employment to 2 persons, one in harvest and another in post- harvest sectors. The current estimates of employment in different categories are not available, but Sathiadhas (1998: 466) provides some estimates using 1997 figures: Non-mechanised Motorised Mechanised Fishing fleet 160 000 32 000 47 000 Active fishermen 650 000 170 000 200 000 Ownership by active fishermen 25 19 24 Of the 200 000 employed in mechanised sector, some 10 000 reportedly worked for the deepsea vessels (Sathiadhas, 1998: 467). The fishers operating the non-motorised vessels are regarded as the poorest among the Indian fishing communities, their operations being subsistence-oriented9. Shrimp aquaculture provides livelihood to one million people, about a third of them employed directly in culture operations and the rest in ancillary activities (Mathew 2003). Average earnings in fisheries sector The producers can be broadly classed into boat owners and crewmembers. Sharing systems are widely prevalent in many fisheries, and the general norm is that the owner takes fifty percent of the gross income while the crew (including the owner 9 ‘Subsistence’ here is used in the sense of generating just enough income to help the household meet its subsistence needs (leaving little surplus). G-26
  29. 29. himself when he happens to fish as well) share the rest equally. While its utility is beyond dispute, sharing system makes it difficult to assign a value to the earnings of the fishermen, particularly when different kinds of arrangements govern the system in different areas and fishing systems. In some mechanised fisheries, monthly salaries are paid, but the crew might still get a small share in the catch returns. Indicative earnings by different producer groups, collected using participatory methodologies in the fishing villages in Andhra Pradesh10: Average income per fishing trip (In Average annual income (in rupees) rupees) Boat owners (non-motorised boat) 200-250 60 000 Fishing crew (non-motorised boat) 80-90 18 000 Boat owners (non-motorised catamaran) 100-110 25000 Fishing crew (non-motorised catamaran) 50-60 13000 Boat owners (motorised boat) 350-400 70 000 Fishing crew (motorised boat) 150-175 25 000 Boat owners (motorised catamaran) 200-225 40 000 Fishing crew (motorised catamaran) 100-120 15 000 Boat owners (mechanised) 7500 (one week) 231 000 Fishing crew (mechanised) 800 30 000 Aquaculture (small-scale) 27 000 (per crop/1 ha.) The relatively small difference in earnings between motorised and non-motorised fishing can be explained by two factors: (i) the raising cost of operations in the motorised category has reduced incomes, some times even beneath those earned by the non-motorised boats; (ii) the number of fishing days in the motorised sector is only half that of non-motorised boats, which can undertake regular fishing because of low investments needed. There has been an increase in the numbers of non-motorised boats in several villages in recent times (ICM, 2003c). Income variability over time The fishers of Andhra Pradesh identify four stages to determine income variability over time. The first phase begins in the historical past and ends in mid-1970s. This was a period of general all round poverty in the artisanal sector (the mechanised sector had only begun to take root, hence the incomes fluctuated widely). Catches were moderate (although available in good quantities, the harvesting capacity was low) but marketability was low, hence incomes were low and the difference in earning between the owners and the crew was not really significant because the production systems were not very advanced and needed relatively insignificant investments to manage and maintain. In the second phase, which began in late- 1970s and continued up to late-1980s, growth and incomes went hand in hand and the fishers could earn very well – more than double their earnings from the previous period, and about 50-60 percent higher than they are today. In the mechanised sector, the incomes were still higher – almost four times as much as in the previous period and up to 40 percent higher than current incomes. In the third phase, which began in late-1980s and continued up to late-1990s, was a period of levelling off – when fish 10 To the extent possible, these were validated in interactions with a wider number of stakeholder groups, by observations at the landing centres and interactions at the household level. ICM (2003) discusses the methodology in more detail. G-27
  30. 30. catches dwindled, but the demand kept the prices up, so the incomes of the fishermen remained level. An important change during the period had been the intensification of fishing effort (in order to maximise catches), which showed up as a drop in annual income. As a result, the fishers calculate that their daily earnings remained more or less stable, but annual income came down by about a third. The final phase, which began in late-1990s and continues to the present day, is characterised by (i) further decline in catches (ii) fluctuations in the market demand and (iii) rising cost of operations. This has meant that the markets have been unable anymore to underwrite the production losses, so there was a real decline in incomes. Rising cost of operations added to the reduced fishing days and the incomes fell sharply, while unemployment increased overall. A summary of the comparative incomes earned during the four phases is as follows: Period Up to late- Up to late- Up to late- Up to the present 1970s 1980s 1990s Characteristics Moderate Large supply- Poor supply- Poor supply-poor supply-poor large demand large demand (fluctuating) demand demand Income per trip 50 125-150 125-150 100 Annual income 80-100 150 125 100 Comparison of wages between fisheries and other sectors An attempt has been made to compare the earnings in fishing with those in other sectors in coastal Andhra Pradesh. The daily wages of many categories of daily wage earners (rickshaw pullers, petty vendors, transport labourers, fruit and vegetable vendors, textile weavers) were obtained and compared with those in fishing. Wage labour in agriculture is the most widespread livelihood option in the country and many fishers seasonally take up agricultural work. In agriculture, the going wage rate for men is Rs. 70-80 per day (going up to Rs. 100 seasonally), while for the women it is in the range of Rs. 40-50 per day (going up to Rs. 60 during seasonally). The number of days of work in agriculture is much less than in the fisheries sector (a maximum of 120 days for men and less for women), which is coming down further as a result of increased competition and technology. Another large sector with which the wages in fisheries can be compared is construction where a mason earns Rs. 120 a day on average; skilled workers earn Rs. 80 and unskilled workers Rs. 50-60 a day. Women are treated as unskilled labourers here. The number of days of work for construction labourers is about the same as in the fishing sector, i.e., up to 200 days in a year. Thus, a comparison of wages earned in different sectors indicates that fishing is still among the better livelihood options. This has to be qualified by two factors: one, there are many other stakeholders in the fisheries sector who do not take part in fishing themselves and whose incomes are comparable to those in other sectors. Secondly, going by historical trends, the long-term sustainability of fishing (as a means of livelihood for a generally poor population) is uncertain because real incomes have been coming down consistently over the last decade11. 11 As a fisherman noted, “It is not that fishing is better off than the other sectors; it is that the other sectors are worse off than fishing!” G-28
  31. 31. Other activities undertaken in relation to fishing Tietze (1985:80) distinguishes five functions in the traditional fishing economy: (i) production; (ii) processing of fish; (iii) marketing of fish; (iv) finance and credit; and (v) ancillary activities, e.g., boat building, engine repairs, net making etc. Obviously, in some cases, the functions are interwoven and performed by the same category of people; and in others, they are separate and performed by different groups, depending on the stage of development of the communities. ICM (2003a) provides a description of the stakeholders in fisheries sector in Orissa. In the post-harvest sector, domestic marketing accounts for a million people while export marketing employs another 0.2 million. These include auctioneers at landing and wholesale centres, those involved in transportation, loading, unloading, packing, distribution of ice, commission agents, wholesalers, retailers etc. An important feature of the fisheries is the gender-based division of labour and the active role played by the women in the sector. Sharma (2002) discusses the contribution of women to the fisheries sector and raises a number of pertinent issues concerning the current understanding of their role. Some half-a-million women reportedly work in the pre-and post-harvest operations (CMFRI, 2003:247), constituting some 25 percent of the labour force in the pre-harvest activities, 60 percent of that in export processing and 40 percent of the labour force in internal marketing (Sathiadhas, 1998: 467). Since the women have a specific role in the post- harvest systems, their incomes are not specifically determined by their gender. But, in organised sectors like shrimp processing activities, there is evidence that women are paid less than men. Contribution of fish to food-and livelihood-security Over 70 percent of total fish production of India is sold fresh in domestic markets, about 11 percent is dried or salted, and about 6 percent is converted to fishmeal (GOI, 2000). FAO gives a per capita supply of 4.8 kg of fish in the country. Total food Per caput Production Imports Exports supply supply ’000 t live weight kg/year Fish for direct human consumption 5 378 NIL 385 4 670 4.8 Non-food uses 780 – – – Source: FAO (2000a) Although consumption of fish is not uniform across the country, fish is an important source of animal protein, especially among the poor income groups (Salagrama, 2004a). Kumar et al (2003) indicate that fish consumption in the country has increased since 1980s (by about 75 percent). A study conducted by IIM, Ahmedabad (cited by FAO, 2000) found that 56 percent of the population are fish eaters and the per capita consumption is estimated to be 9.5 kg/year. Not surprisingly, fish consumption among the fishing communities has traditionally been high, but there are indications (ICM, 2003a) that this is declining as a result of cost of fish growing faster than the other commodities, forcing the fishers to sell all of their catch and G-29
  32. 32. consume non-fish alternatives. Wholesale price indices for different commodities support this: Year Fish Meat Food Articles All commodities Base 1970-71 = 100 1971 103.1 106.6 101.0 105.0 1981 246.6 330.4 230.3 378.4 Base 1981-82 = 100 1982 118.7 112.8 110.0 104.3 1990 193.5 188.9 191.6 177.2 1998 582.4 567.6 431.8 348.2 Source: GOI (2000:131) Availability of fish to the traditional consumers (who are mainly poor) decreases when fish increasingly reach the export and distant urban markets and also because the fishing operations are adapted to cater to the demands of the more lucrative markets by targeting a few high-value species and ignoring the cheaper varieties on which the poor depend. This is another area where statistics are difficult to come by, but there are many indications to show (i) that demand for fish is growing in the country (FAO, 2000; Kumar et al 2003) and (ii) that there is a decrease in availability of fish to the poorer consumers (coastal fishing and non-fishing people as well as inland tribal populations and agricultural workers). Fisheries Management in India12 Status of fisheries in the Constitution Article 246, Fisheries, of the Constitution of India makes it a subject for State List. This means that all laws and regulations related to fishing, fish marketing, fishers’ welfare etc have to be framed by the state legislatures. As FAO (2000) notes, the involvement of the Union Government on issues related to fisheries management is high. Also, fish production from the Exclusive Economic Zone (EEZ), major fishing harbours, fishing vessel industry, seafood export trade, and marine and inland research and training are on the Union List, of the Seventh Schedule of the Constitution (Mathew, 2003). Other areas related to fisheries, i.e., the protection of wild animals and forests, including endangered species of wild fauna and flora, protection of coastal zone and marine biodiversity and prevention of land-based sources of pollution are on the Concurrent List, which is the responsibility of both the Union and the state governments. Agencies dealing with fisheries sector Mathew (2003) provides a description of the various government departments and Ministries dealing with various aspects of fisheries. Ministry/Department Responsibilities 12 As many of the questions asked in the template are not really applicable to the Indian context, this study makes a departure from the format, but makes sure to include any information that addresses the issues in the original format. G-30