a study of the market supply chains in fisheries sector in the

A Study of the Market Supply Chains in Fisheries

Sector in the Southern Districts of Orissa

Study done for OXFAM (GB) Orissa

By Venkatesh Salagrama

1st Draft: February 2004

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Orissa Fisheries Programme Development Study

Integrated Coastal Management, India 1

CONTENTS

Abbreviations used in the report............................................................................................. 2 EXECUTIVE SUMMARY......................................................................................................... 3 CHAPTER 1: An introduction to the study of fish marketing systems in Southern Orissa . 10

Introduction........................................................................................................................... 10 Fish marketing chains in southern Orissa ............................................................................ 10 Methodology ......................................................................................................................... 11 A quick review of the secondary sources of information ...................................................... 12 Structure of the report........................................................................................................... 14 Limitations of the study......................................................................................................... 15

CHAPTER 2: Traditional fish marketing systems ................................................................. 16 A. Local Fresh Trade ............................................................................................................ 16 B. Processed fish trade ......................................................................................................... 24 A summary of the features of traditional marketing systems................................................ 38

CHAPTER 3: Modern fish marketing systems....................................................................... 41 A. Export trade...................................................................................................................... 42 B. Urban trade ...................................................................................................................... 51 A summary of the features of modern marketing systems..................................................... 60

CHAPTER 4: Issues related to fish marketing chains in Southern Orissa .......................... 63 Resource constraints............................................................................................................. 63 Global trade arrangements................................................................................................... 65 The importance of credit and ice to marketing systems........................................................ 68 Women in fish marketing systems ......................................................................................... 73 Income and expenditure patterns in fishing communities..................................................... 75

CHAPTER 5: Programme Development ................................................................................ 80 Focus groups for the programme ......................................................................................... 80 Some considerations in programme development ................................................................ 80 A summary of key constraints ............................................................................................... 84 Opportunities for improving the producer communities’ share in the market chains.......... 85 Operationalising the programme.......................................................................................... 88 The benefits from improved opportunities .......................................................................... 114 Factors that facilitate or hamper the implementation of the new initiatives...................... 117 Mechanisms for transfer of ownership to the primary producer communities................... 121

Select Bibliography ................................................................................................................ 123



Abbreviations used in the report BLC Beach Landing Craft (developed by the BOBP) BOBP Bay of Bengal Programme (an FAO-executed regional fisheries programme) CIFT Central Institute of Fisheries Technology (an ICAR institute) CMFRI Central Marine Fisheries Research Institute (an ICAR institute) DFID Department for International Development (of the Government of United Kingdom) DOF Department of Fisheries EU European Union FAO Food and Agriculture Organization of the United Nations FRP Fibre-reinforced plastic (common name: ‘fibre glass’) FSI Fishery Survey of India GI Galvanised iron GOI Government of India GoO Government of Orissa HACCP Hazard Analysis and Critical Control Point HDPE High Density Poly Ethylene ICM Integrated Coastal Management ICSF International Collective in Support of Fishworkers IIM Indian Institute of Management MFB Madras Fisheries Bureau (the precursor of the present Department of Fisheries) MFS Minor Field Study MPEDA Marine Products Export Development Authority MT Metric Tonnes NABARD National Bank for Agriculture and Rural Development NGO Non-governmental organisation NRI Natural Resources Institute (a subsidiary of the University of Greenwich, UK) OTFU Orissa Traditional Fishworkers Association OUAT Orissa University of Agriculture and Technology PHFP Post-Harvest Fisheries Project (of the DFID, managed under the BOBP) SIDA Swedish International Development Authority SIDBI Small Industries Development Bank of India SIFFS South Indian Federation of Fishermen Societies TCM Technical Cooperation Mission US United States XIM Xavier Institute of Management, Bhubaneswar



EXECUTIVE SUMMARY

This report is the outcome of a baseline-cum-feasibility study of the market supply chains in the fisheries sector in southern districts of Orissa undertaken by Integrated Coastal Management (ICM) for Oxfam (GB) Orissa to assist in the development of a fisheries development programme.

ICM conducted this study during December – February 2003. The sources of data included a secondary literature review, interviews with primary and secondary stakeholders, and observations at the fish landing and marketing centres.

There are four important channels of fish marketing in Southern Orissa which frequently overlap and coexist, but each is a distinct entity with its own set of characteristics. These are:

1. Local fresh fish trade 2. Processed fish trade 3. Export trade 4. Urban trade

Of these, the first two belong to what can be called as the ‘traditional’ marketing systems and the latter two to the ‘modern’ category. Local fresh fish trade is the simplest kind of marketing operation while export trade stands for the most complex.

Traditional fish marketing systems

Traditional marketing systems are largely informal, subsistence-based transactions, dominated by women in fishing communities for historical reasons. The technologies used in the traditional fish market chains are fairly simple, low-cost and local. The market chains mainly catered to rural markets and had a predominantly poorer class orientation. This has changed over time, but the market chains continue to cater mainly to the local or, at best, regional markets and involve few intermediaries between the producers and the consumers. The trade is adapted to ‘large volume-small margin’ operations, thus precluding opportunities for sizeable investments to improve the quality of the commodities, which means that most endemic losses in production and market chains are simply built into the economic systems. Profitability of operations is established over a number of cycles of operation rather than on the basis of individual cycles, with enough slack built into the system to withstand occasional losses at the markets.

Processed fish trade is an advance over local fresh fish trade and its evolution gave rise to new systems – trader advances to the fishers, informal credit networks, market intermediaries and long distances between production and consumption areas – that would strengthen in due course and form the foundations of modern fish production and marketing systems. The modern fish trade might earn many times more than the traditional trade, but the traditional fish trade could be providing employment for a much larger number of people, many of them from the very poor category.



The main problems in traditional marketing chains refer to lack of capital to invest in procurement, production and marketing activities. As modern marketing systems increasingly take over the fishing economy, large numbers of poor women who depend upon traditional fish marketing find themselves marginalised and vulnerable to factors they can hardly understand. Monetisation of transactions on the beaches has meant a dependence upon moneylenders for meeting production needs, and loan repayments gobble up a sizeable proportion of their income. Poor processing and preservation systems – problems that can be addressed with little investment that they often do not have – lead to regular losses in production chain. The need to finance one cycle of operations from the previous one means that they are often forced to sell a part of their catch at a loss, just to keep the activity moving. Lack of emphasis on traditional marketing systems in the government programmes has meant poor infrastructure at the traditional landing centres and the traditional markets, lack of facilities for transport and preservation and inadequate credit assistance.

Modern fish marketing systems

Two major developments, growing international demand for Indian shrimp and the State’s focus on increasing production as a means of alleviating poverty, helped the export chain centred upon shrimp to take root. The opportunities that the emphasis on shrimp production and trade opened up helped the emergence of domestic urban trade in several varieties of fish. As a result, fisheries changed from a subsistence-based livelihood activity pursued by a group of largely poor and rural artisans into an urban-based, capital-intensive commercial industry earning sizeable sums of foreign exchange for the country.

In terms of production, the emphasis of fishing operations has shifted to a few varieties – topped by shrimp – that have a big market demand. The state’s support in terms of new boats and fishing systems to increase production has meant, on the one hand, that the technologies were accessible to those who could afford to invest in them (in spite of sizeable subsidies in financial terms), and on the other, overcapitalisation of the fishing activities that made the activities risky.

The location of markets at long distances from the fish landing centres gave rise to: a number of intermediaries, transactions involving credit, use of ice for preservation and rapid transport systems. The basic infrastructure, preservation and transport systems developed in such a way that the access for the producers to them has come to be mediated by the market intermediaries.

As new intermediaries entered the marketing chain, the share of the producers decreased. The market arrangements have come to be centred on the system of advances and credit, and those who could not afford to compete in the open auctions with the large scale traders from outside, particularly people in the traditional marketing systems, were marginalised.

Initially, ‘advances’ were a simple mechanism to ensure regular supplies of fish to the traders. As the relationships between the traders and the producers strengthened, this gave rise to ever-increasing investment being made by the traders in fishing. The advances they provided the fishers helped finance the acquisition of new boats, repairs and maintenance and also to pay the crew an advance as well. Soon everyone was beholden to everyone else in this credit web, and few had the capacity to repay or recover the loans.



Women are a major casualty in the modern marketing chains because their role climbed down from being the most important economic entities in the economy to ancillary workers. Over time, as the uncertainties in the sector increase unemployment among men, the women seek work outside the sector and are increasingly the main earners in many households.

As the market chains proliferated and elongated, the influence of the intermediaries on the fishing economy increased, and alongside, there was a corresponding decline in access to market information for the producers, who thus came to depend on trader-intermediaries for meeting most of their production and consumption needs.

The possibilities for the producers to take control of the markets were also effectively thwarted by the monopolisation of market access by the traders and the failure of systems such as cooperatives to function effectively. The government’s enabling role in the sector is confined largely to the production side, while the post-harvest systems have been allowed to be taken over by the ‘market forces’. Thus, while the growth of export and urban markets has certainly led to a growing prosperity in many fishing villages, this is confined to a few people who have the access to technology and markets.

The fugitive nature of the resources, expensive operations, and uncertainties in transport and international market conditions and rising competition at every level means that none of the key stakeholders in the sector – not even the trader-intermediaries – feels secure in his or her occupation. This naturally gives rise to a mad rush to maximise earnings in the short term, leading to further problems.

Two issues – declining fish catches from the capture sector and increasing stridency of international and national seafood legislation – can have potentially serious consequences for the stakeholders in the sector in the long term. The issue of declining fish catches is serious and all-pervasive, although both the problem as well as the solutions will need more work to be defined clearly.

The changes in the seafood legislation will mean adverse impacts upon the informal systems of production that allows many poor people to make a livelihood. In the medium term, it will mean concentration of the ownership of production, processing and trade in the hands of a few big players. In the long term, the impact will be felt in other market chains also, with far-reaching results but with varying degrees of intensity for different players.

Programme Development

The basic objective of the programme must be to enhance the producers’ control over the marketing systems and to increase their share in the market value of their produce in a viable and sustainable manner.

Focus groups

In the traditional marketing chains, the women involved in fish processing and local trade constitute the most important segment of the stakeholders and their socio-economic conditions



and vulnerability to a wide range of factors makes them an ideal target group. In the export and urban marketing chains, the producers constitute the important stakeholder group. Because the ownership passes from them to traders from outside immediately on landing, increasing the fishers’ share in the catches will be a positive benefit to the producer communities as a whole.

A summary of key constraints faced by the target groups

• Poor capital base forces the target groups to depend on credit for production and consumption purposes, and this affects their access to markets or profitability of trade

• Lacunae in current production and transport systems – coupled with lack of basic infrastructure facilities at the landing, processing, storage and market areas – contributes to physical loss of products, increased production costs and further dependence on market intermediaries

• Poor capacity to access or effectively deal with markets as a result of dependence on intermediaries or poor capital base.

Some considerations in planning a market development programme

Three factors – the existence of a good market demand that far outstrips the supply, the possibility of losses taking place in the current production and market chains and the existing marketing systems (and their dependence upon the trader-middlemen) mean that it is not so much the development of a new market chain, as the possibilities for enhancing the producers’ control on the existing marketing chain that should hold our attention. Increased income to the producers and traders will also come from reducing their production costs or reducing the losses in the production chain.

The trader-middlemen system will be difficult to dislodge for three reasons: (i) they do play a very important role in reaching the product to the distant markets, (ii) they also provide a number of other services that an alternative system cannot simply provide, and (iii) their bonds with the producers are often so strong that any effort to dislodge them can have serious consequences for everyone in the sector. As in any relationship, there is an element of power between the primary producers and the traders and the balance of this power is heavily tilted in favour of the traders for the simple reason that they have access to a few things that the fishers need and do not have. Making such things available to the fishers on a sustainable, equitable and affordable basis will tilt the balance their way without necessarily upsetting the entire market chain.

The existence of four different market chains each with a different set of players whose interests are diverse means that no single strategy is going to be effective in addressing the needs of all stakeholders in the sector. This diversity also determines that an improved access to markets and market share to the producers and the small-scale operators within fishing communities would be possible through interventions spanning a number of activities – technical, financial, human, social, political, legal and, of course, market-related – but which are driven by location-specific and stakeholder-specific strategies.

These considerations, taken in conjunction with the constraints faced by the primary producers, will provide broad framework of action for enhancing market access to the producers:



• Credit made available at a reasonable cost and on a sustainable and reliable basis to enhance the target groups’ access to markets and profitability of their operations.

• Improvements undertaken to the current systems of production and transport, supported by improving basic infrastructural facilities at the landing, processing, storage and market areas, to reduce physical losses and production costs as well as dependence on intermediaries, and to address the changing needs of the international and domestic trade.

• Community-based cooperative marketing and credit systems developed, supported by increased access to market information and institutional finance to enhance the capacity of the producers to access, and deal confidently with, markets.

These objectives can be expanded into a five-point agenda to facilitate programme development:

1. Sustainable credit programmes to help the target groups meet their production and consumption needs at a reasonable rate of interest

2. Enhancing access for target groups to basic needs of the trade as well as undertaking process improvements to the current production and marketing systems

3. Efforts to improve infrastructure and basic facilities at the landing centres, processing and storage areas and at the market places

4. Encouraging collective systems of procurement and marketing by the target groups 5. Improving information flows on production and marketing systems as well as the people

involved in various activities

Although the suggested areas of work had been tested in the fisheries sector in the past, a comparison of the actual performance of the programmes with their objectives indicates wide gaps. In spite of many efforts at addressing these largely basic needs, the needs still remain and, if anything, have become more acute. Thus, there is a need not only to integrate the different projects into a common programme of aiding the fishers in their marketing function, but also to develop and test new modes of thinking and implementation of these programmes. In other words, the new programmes might address the same old problems, but from a new and more holistic perspective.

Simultaneously, it will also be an important strand of work for any development organisation to work towards addressing the loopholes in the existing systems, to assess if they can still be made to work and to devise alternatives to replace them. There is a need to revamp the systems and build many of them up from the scratch, but the lessons learned from the experiences have to be taken into consideration while doing so.

The existence of a prior body of work will mean that the options for operationalising the five point agenda can draw from these efforts, to understand what worked and what did not. It will involve looking at the shortcomings of the past systems and arriving at some feasible options to overcome the lacunae. While doing so, it will also be important to see how alternative systems, such as the informal credit systems, function and the reasons for their continued viability in spite of their supposedly exploitative nature. The lessons learned from these two sources will give a good basis for building a strategy for implementing the various sub-projects in this programme. The following is a summary of how the five point agenda can be operationalised.



Cooperative structure

Setting up community-based cooperatives will be both an end in itself (so it helps the fishers to bargain for better prices and bypass the intermediate links) and, more importantly, a means to an end – which involves implementing the different sub-projects within the programme. Cooperative marketing activity has three main components: one, the actual process of marketing itself, which involves sending fish from one place to another and earning income from it; two, a support system which enables the marketing system to function without hitches by providing the necessary services (such as ice, transport systems, access to credit and infrastructure); and three, an efficient credit management system. The previous efforts at cooperative marketing have tried to make the cooperative in the villages to undertake all three activities on its own. Here it is proposed that these three activities be segregated and kept with three distinct – but well-integrated – entities at the village level.

Credit

If an organisation has funds to invest in just one activity among the five suggested, it should undoubtedly get involved in credit because it has the potential to make the most significant difference to all categories of people in the fishing sector. While this fact is fairly well accepted, the problems of operationalising the credit programmes along sustainable lines continue to be a serious problem for the development agencies. By looking at the needs of the producer communities and the way their needs are reflected in access to credit, disbursement and recovery mechanisms in the formal and informal sectors provides a range of ideas that could, if included in a prospective credit programme for fish producers, help the system run more efficiently.

Process improvements

Setting up an efficient ice procurement and storage system – at the individual and community levels – is considered one very option to reduce losses and increase the confidence of the producers to deal with markets. Reducing losses due to engine repairs in the fishing operations will considerably enhance the fishers’ share in their gross earnings. The traditional processing chain has a number of gaps that recent research suggests can be addressed by fairly simple means. Improved access to transport will enhance the capacity of the fishers to reduce the time to reach their markets and thus avoid spoilage.

Infrastructure

Lobbying with the government for improving facilities at the landing centres and at markets will be an important area of work to benefit the target groups. Considering the possible fallout of a more serious food legislation governing the conditions of fish landing, handling, storage and transport, it is a necessary investment for the government. The government’s role also becomes important considering the large outlays involved and the common property nature of the investment, although the communities can be made to share a part of the cost or pay user fees.



Information flows

Considering the diversity of factors that characterise marketing in different villages, trying to set up one market information system to suit the needs of all producers in every area is going to be clearly useless, if not impossible. Each village has its own requirements of information and the purpose of the information it generates is suited to these requirements. Thus, it is necessary for each village to set up a market information system of its own, and in such a way that people can update the information on a regular basis.

At the same time, it is also essential to fill in the gaps in the knowledge about the producers, processors and traders themselves. There is no good data on their numbers, function, and scale of operation, their needs and the general socio-economic context in which they operate. The diversity of their occupations and their geographical isolation has meant that many of them have slipped through the systems completely. A good database on the people and their socio-economic conditions will help establish a link with funding agencies on a surer footing.

Factors that hamper/facilitate the market development programme

Uncertainties in fish catches, existing systems of control in production and marketing, poor level of economic organisation in the fishing villages, past experience of cooperatives, and the existence of a number of parallel initiatives – development or otherwise – in many villages can be potential constraints in implementing the marketing strategy.

The emergence of strong grassroots level groups in some fishing villages and the generally positive interest in improving the existing systems amongst the institutional stakeholders are two facilitating factors for effective implementation of the programme.



CHAPTER 1: An introduction to the study of fish marketing systems in Southern Orissa (Puri & Ganjam districts)

Introduction

Oxfam (GB) Orissa has commissioned Integrated Coastal Management (ICM) to undertake a baseline-cum-feasibility study of the market supply chains in the fisheries sector in southern districts of Orissa to assist in the development of a fisheries development programme. The aim and scope of the programme development initiative, to which this study contributes, is to look at the problems faced by the poor stakeholders in the fisheries sector in the past years; extent of their indebtedness; how and where they market their produce (and to whom); the pricing and marketing challenges in the context of the global free market trade; and the safety nets offered by the government. It would also highlight issues around inadequate or unfair price/marketing support, absence or weak regulated market increasing the vulnerability of the poor producers. The outcome of this study would be to suggest possible ways and strategies to improve market access for the poorer stakeholders in the fisheries sector. This report is the outcome of the study undertaken by ICM.

Fish marketing chains in southern Orissa

There are four important channels of fish marketing in Southern Orissa which frequently overlap and coexist, but each is a distinct entity with its own set of characteristics. These are:

1. Local fresh fish trade 2. Processed fish trade 3. Export trade 4. Urban trade

Of these, the first two belong to what can be called as the ‘traditional’ marketing systems and the latter two to the ‘modern’ category. Local fresh fish trade is the simplest kind of marketing operation while export trade stands for the most complex. In many villages, all four chains can be seen in operation simultaneously and the same producer/trader will often be involved in more than one kind of marketing chain. Also, the same varieties of finfish/shrimp frequently have demand in more than one chain. Thus, for instance, ribbonfish landings in Paradeep might be sold by local fresh fish sellers within Paradeep town and in the neighbouring villages (Kujang and Balithutta); processed into dried (smaller fish) or salt-dried (larger fish) products for Nakkapalli market; exported in ice to China or to the Arabian Gulf countries; or, packed in ice and sent to New Delhi for domestic urban trade.

Trade in by-products such as poultry feed, shark livers (for oil extraction) and molluscan shells (for ornamental, decorative, domestic and industrial purposes) constitutes a separate, and frequently important, market chain where it exists, but this tends to be localised to places where the raw material (trawl by-catch, sharks, molluscan shells) is available. A more recent development is the market chain for value-added (or exotic) products, which is mainly an outcome of development efforts in the government and NGO sectors, and has been in the making



for at least a decade now and has not yet consolidated into a distinctive trade channel. These two chains are not discussed in this report.

It is not possible to ascertain the numbers of people involved in different marketing chains. Even if such data were available, it is doubtful that they would include all categories of stakeholders because the contribution of several players in the market chain remains largely invisible. This is further complicated by the seasonal migration of people into and out of the sector, the location of some of the markets outside the state and the informal nature of many transactions.

According to DOF (2002:66), there are about 86 thousand active marine fishers – meaning boat owners and crew – in the state. The ancillary workers, i.e., the processors and the traders, besides a number of other categories of people, in the state numbered over 33,500, but the numbers could be significantly higher when all stakeholders in the different market chains – both full-time and part-time – are taken note of. Within the ancillary category, some 14,500 people are women (Department of Fisheries 2002). What is true in many coastal villages is that the modern trading systems might bring the most income into the trade, but it is the traditional systems that provide employment to the largest number of people, many of them belonging to the very poor category.

Hard figures are also difficult to obtain about the composition of fish going into different market chains. DOF (1998:11) provides estimates of the post-harvest utilisation of fish in Orissa by different processing methods, which are shown in the following table.

Utilisation of fish catches according to processing method (DOF, 1997:11)

050

100150200250300

1985

-86

1987

-88

1989

-90

1991

-92

1993

-94

1995

-96

Thou

sand

s

Salting

Drying

Freezing

Fresh

Utilisation of fish catches during 1996-97

80%

5%

13%2%

Fresh

Freezing

Drying

Salting

Information collected during this study indicates that, in Ganjam and Puri districts, approximately 20-25% of the fish goes into processing, 8-10% into export trade, 5-6 percent into fishmeal production and the remaining – about 60-65% for fresh trade. Within the fresh fish trade, consumption within the state amounts to about 60% while the rest goes to distant urban trade. Obviously, wide variations exist in the disposition of catches at different landing centres depending on the varieties caught, season, access to markets and consumer preferences.

Methodology

ICM conducted this study during December – February 2003. The sources of data included a secondary literature review, interviews with primary and secondary stakeholders, and



observations at the fish landing and marketing centres. Many of the existing studies on fish marketing in Orissa pertain to particular locations and content themselves with describing the systems as they exist, rather than to analyse how they interact with one another and with the larger environment in which they operate. A macro-level analytical study – particularly in the context of developing overall strategies to improving the systems in favour of the primary producer groups – has been lacking so far, with the result that this study has depended largely on information collected through interviews with various stakeholders in the sector as well as with those with considerable experience of working with the communities.

Considering that the ICM Orissa coastal fishing livelihoods study (ICM 2003) explored many issues that are relevant to the current study, it was decided at the beginning that the emphasis will be on trying to unravel new issues rather than cover the same ground. Some of the analysis presented in this study has its roots in that original study, but fresh work also has been undertaken in Puri and Ganjam districts, and involved interacting with various stakeholders at several levels and trying to understand the process of change from many perspectives. Naturally, some of the analyses will need further refinement, but that has to be expected considering that it is the first time such attempt has been made.

A quick review of the secondary sources of information

Relevant secondary data sources have been cited at various places in the report, the following is an attempt to summarise the existing sources of information on the fisheries and trade in Orissa.

The excellent reports of Madras Fisheries Bureau (MFB) dating back to 1872 provide a wonderful – if tantalisingly fleeting – glimpse into the traditional fishing and marketing systems in Ganjam district (which was then a part of the Madras Presidency). It is not known if the fisheries establishment in Calcutta Presidency had a good documentation system to cover the other districts of Orissa as well, and it will be of immense help if it did. From about 1930, the information from MFB dwindles and continues to remain meagre right until the 1980s. This was the period when the vibrant Telugu fishing communities of Puri district took root in Orissa and consolidated themselves into distinct entities, so the gaps in information from this period are all the more glaring.

In recent times, perhaps no other organisation discussed various aspects of Orissa fisheries as extensively as the FAO-funded Bay of Bengal Programme (1979-2002). Several BOBP publications (WP 22 (1983); 24 (1986); 29 (1984); 48 (1986); 55 (1987); 68 (1991); 74 (1992); INF 7 (1984); MIS 3; 5 etc.) describe the fisheries sector and the attempts by the BOBP to improve the socioeconomic conditions of the fishers. Uwe Tietze, a social anthropologist working for the BOBP, did much work in Orissa in the 1980s and brought out the seminal “Artisanal Marine Fisherfolk of Orissa” (Tietze, 1986). Besides, the Swedish International Development Agency (SIDA) funded a number of minor field studies (MFS) through the BOBP and some of them (Dahl & Forsgren, 1988; Frej & Gustafsson, 1990; Edin & Ydell, 1991; Ogrelius & Larseon, 1993) are set in, or have relevance to, the fishing and fish marketing conditions in Orissa. As time passes, some of these studies might lose their topicality, but many also acquire a bigger value than the writers and their institutions might have envisaged. They provide an excellent basis for a ‘then-and-now’ comparison, giving an excellent opportunity for



understanding change in the fisheries sector, the causes and consequences of change on the people and their livelihoods in the sector. In due course, many of these documents are likely to become the record of an era in the fisheries sector on the east coast of India.

The DFID funded Post-Harvest Fisheries Project (PHFP) under the BOBP umbrella brought out many publications related to post-harvest issues – including marketing – in Orissa through the 1990s. XIM (1991), PHFP (Undated, 6), PHFP (Undated, 7) and Campbell & George (1998) are some of its publications related to the issue of fish marketing in Orissa. The XIM study (1991) provides an overview of fish production and marketing systems in Orissa and is one of the better studies on the issues. PHFP (Undated, 7) describes the traditional fish production and marketing, while PHFP (Undated, 6) discusses the state of credit availability to artisanal fish workers in Andhra Pradesh and Orissa. Campbell & George (1998) is an update of an overview of post-harvest fisheries in four eastern coastal states of India, and ICM’s study on changing fish utilisation in Orissa and its impact upon the poor (2000) is a further update of the 1998 update!

IIM (1984) is the first (and the only) study of marine fish marketing in India, and runs into numerous volumes. But attempts to analyse markets on a strong theoretical and scientific basis are confined to a few papers (Sathiadhas and Narayana Kumar, 1994; Sathiadhas, 1998). Orissa rarely figures in these studies. Still, the information they provide fills an important gap, when available.

The flow of reports on the fisheries sector in general and on marketing in particular dwindled to a trickle by late 1990s. Fish marketing in Orissa is described by, among others, CIFT (1997), Kalavathy (1997) and CMS (1997). The last three mentioned are the outputs of a DFID-funded research programme on opportunities for fish marketing and handling initiatives that benefit traditional fishing communities in India (see also Gordon & Madhu, 1997). The study by Kalavathy (1997) provides a detailed analysis of different species, their origin of landing, type of processing and processors involved in the trade, destination markets, prices, approximate volumes produced, types of consumers, and seasons for Orissa. CIFT (1997) provides the current systems of production and marketing of four specific traditional fish products in Orissa. CMS (1997) provides typical costs of traditional processed dried fish products in Orissa.

Two studies (Ward, 2000; Esser et al 2003) describe the efforts of two DFID funded research projects to control losses in traditional fish processing systems and, at least, partially touch upon the marketing issues. ICM (1999: Vol I – 35-73) provides an overview of fish processing in three fishing villages in Orissa as part of one of these research programmes. Another DFID-funded project studied the impact of changing international seafood legislation and CMS (2002) provided an overview of the Orissa export fisheries as part of this study (see also NRI, 2003).

Besides being a partner organisation in many of these research projects, ICM also has conducted a number of studies for various organisations dealing with livelihood issues of the artisanal marine fishing communities of Orissa and some of these are listed in the bibliography. The monthly fisheries magazine, Fishing Chimes, carries a regular column on the developments in fisheries sector in Orissa, and occasionally has articles on the fisheries sector in the state.



The Department of Fisheries provides annual statistics of production and demand for fish within and outside the state, but the publication of the annual handbooks has become erratic over the years. The Government of India’s Ministry of Agriculture collates the data from the state reports and publishes a handbook at the national level. While the reliability of information contained in these reports is suspect, they are practically the only source of information on various aspects related to the sector and at least provide a good understanding of the institutional perspective. MPEDA provides statistics on fish and exports regularly in their annual statistics, which are more reliable because details of export consignments are correctly reported.

In 2003, Integrated Coastal Management (ICM) was commissioned by the Food and Agriculture Organization of the United Nations (FAO) to undertake a case study on assessing the poverty, food insecurity and vulnerability of artisanal fishing communities in Orissa. The study was conducted during February-June 2003 covering 30 villages in coastal Orissa and the outputs of the study were detailed in five working papers. A consolidated summary of the study is being readied for publication by FAO as a technical report. In the meantime, an interactive CD ROM which contains all the working papers is enclosed with this report to provide a detailed qualitative analysis of the livelihoods and the living standards of the coastal fishing communities1.

The lack of documented information on some of the issues necessitated that the developments in the evolution of fisheries and fish marketing chains in the state had to be inferred from the existing knowledge in other states – Kerala and Andhra Pradesh, in particular – in the belief that the basic patterns remain largely valid across the coastal states of India, a belief that receives much support not only from comparisons between states about which such information is available, but also in discussions with the fishworkers in Orissa itself.

Structure of the report

To understand the existing channels of fish marketing in southern Orissa and the players involved in the various channels, a good beginning can be made by analysing how fish production and trade has evolved over the years. An analysis of the factors and processes which were instrumental in bringing about changes in the systems of production and marketing will provide the key not only to understand the current systems and the stakeholders involved in the market chains, but also to develop effective strategies to deal with the systems. Chapters 2 and 3 will explain the evolution of different marketing chains, the key players involved in each of them, how the marketing systems function, investments and earnings made by the key stakeholders, the varieties of fish traded, the level of technology in each chain and a summary of key constraints in the existing market chains for the target groups. Chapter 4 will discuss some pertinent issues to relate and elaborate the context in which the fish marketing chains operate. The final chapter will discuss opportunities for enhancing the access to markets for the primary producers and for increasing their share of the value of their produce, and indicates a few ways to implement strategies towards achieving this.

1Some parts of this previous study have been used in the preparation of the current report while some others (relatively few, it is hoped) are simply ‘cutted’ and pasted at appropriate places.



Limitations of the study

For practical reasons, the study is confined to the two southern districts of Orissa – Puri and Ganjam – and deals mainly with the artisanal marine fishing communities. Thus, inland fish trade (both capture and culture) does not get covered. However, much of they analysis presented in the study will be applicable to these areas as well.

In spite of the report having become at least four times as long as originally envisaged, there are still many areas where it was needed to present the systems in general terms. The complexity of relationships that characterise the transactions between the producers and the traders mean that it is not only the fear of further adding to the bulk, but also the inability to comprehend and objectively present the multitude of arrangements that forces one to generalise.

For reasons that will become apparent in the body of the report, it has not been possible to provide as much quantitative data as the TOR might have asked. Where such data are available from secondary sources, reference has been made to them.



CHAPTER 2: Traditional fish marketing systems

Traditional marketing systems are largely informal transactions, involving few intermediaries between the producers and the consumers and cater mainly to the local or, at best, regional markets. They have a predominantly poorer class orientation and are adapted to ‘large volume-small margin’ operations, which preclude sizeable investments to improve the quality of the commodities. Consequently, some of the endemic losses – due to monsoons or infestation or spoilage – are simply built into the economic systems and are treated as such by the processor-traders. The technologies used in the traditional fish market chains are fairly simple, low-cost and local, and while they may not always look to be very profitable, they are adapted to the local conditions, the economic condition of the traders and consumer preferences. Profitability of operations is established over a number of cycles of operation rather than on the basis of individual cycles2, with enough slack built into the system to withstand occasional losses at the markets.

A. Local Fresh Trade

At the simplest level, fish marketing involves selling fish soon after landing.

i. Background

For a long time, fishermen shared their catches (and not the returns from the sale of catches, as is prevalent now) amongst themselves, giving an extra share to the boat and the nets3 . Each fisherman then handed his share to his wife for sale. A small portion of the catches might also have been sold to some local traders (DSO, 1962: 86) – perhaps single women who made a living from fish trade – but a major proportion of the catches was handled by the fishermen’s wives. The women kept a part of the fish for household consumption and carried the rest in baskets to the markets in the neighbouring towns and markets by walk.

In southern Orissa, the women went around villages selling fish in door-to-door sale, earning themselves – and the whole Telugu fishing community in Orissa – the name by which they have come to be called: Nolia. According to the local tradition, the thickset earrings or nose studs that the fisherwomen typically sported (a formidable piece of decoration indeed, considering a mere look at them is enough to make one gasp for air), which are called Noli in Oriya, gave rise to this appellation which in due course got applied to the whole community4 (ICM 2002a).

In a largely non-monetised economy where the agricultural labourers and others who constituted the main customers for the fresh fish received their wages in kind – as foodgrains – the terms of sale were also arranged accordingly. The women exchanged their fish for rice, tamarind, vegetables, eggs or any other commodity that the buyer was willing to pay. From the ‘returns’,

2 A cycle refers to all activities from production/procurement of raw material through processing, transport and marketing in one operation. 3 This indicates that the contribution of fishing equipment was valued at par with that of a crewmember. The arrangement persists in bits and pieces in many parts of Orissa and the neighbouring Srikakulam district in Andhra Pradesh. 4 That the name is of Oriya origin – contrary to claims that it comes from Tamil Sangam literature dating back to over 1,500 years (Kalavathy 1985:59) – gets support from the fact that the word is never applied to the fishing communities in the neighbouring Andhra Pradesh.



they retained a portion for their own consumption and exchanged the rest for the commodities that they needed at home. Thus, at least in some instances, money rarely entered the transactions, reinforcing the argument that fishing and trade at this stage were largely subsistence-based operations (see Alexander, 1995). The existence of a number of women-traders in several fishing villages, who continue to operate along the same lines, supports this contention.

The strategies adopted by some very poor women in places like Puri show an interesting adaptation to their conditions. They carry some edible tubers or sweetmeats to the beach and exchange them for fish either with the fishers themselves, or with the children who roam about the landing centres collecting a few fish from the fish catches coming ashore, either surreptitiously or with the consent of the fishers. The woman carries her fish to the village market or to the neighbouring villages, sells them often in exchange for a fistful of rice, or other food items, because the buyers are often as poorly off as she is and have little money at hand. The woman keeps some of her ‘earnings’ for her own consumption, and sells or exchanges the rest with the local trader for the edible tubers and sweetmeats, and begins the cycle once again. In theory, if not in actual practice, this whole transaction – sweet meats for fish, fish for rice, and rice for sweetmeats – rarely involves any cash at all. (From ICM 2003)

ii. Key players in the market chain

In every village, a sizeable proportion of women are involved in fresh fish trade and a remarkably high percentage of them are also the main earners in their family. Women head-loaders constitute the largest number of traders seen at the beach and they are also the major source of fish supply to other coastal communities.

A few men from fishing communities were involved in fish trade in the initial period, but these were generally old fishers who ‘retired’ from fishing operations because of some inability or illness and took to fish trade to eke out a living. They carried fish in baskets slung from a pole carried on their shoulders and walked to the neighbouring villages selling fish in door-to-door sale. In due course, men from the fishing villages largely withdrew from the fresh fish trade.

It does not appear that in those early days, the non-fishing coastal communities showed much interest in fish marketing. This may be due to lack of demand for fresh fish or to availability of sufficient work in their own caste occupations. Fish trade in any case was – and in some places, still is – considered a lowly occupation, which would also have discouraged outsiders from entering it. As the ‘fishwives’ collected their catches directly from their husbands, there was not sufficient demand at the landing centres to sell fish in open auction, so that even if a trader from outside were interested, he or she might not have found an easy opening.

In later times, as the consumer preferences in the interior areas changed sufficiently to accept fresh marine fish and opportunities for work in their traditional occupations reduced, several men from these communities began to be involved in fish trade. Similar changes in agrarian systems in the coastal areas5 brought a few women from these communities as well into fish trade. The change in fish disposal at the landing centres in favour of open auctions, mainly as a result of arrival of new market chains, facilitated their entry, while forcing the fishwives to compete with other traders in open auctions and forcing at least some of them to leave the field.

5 Splintering of large landholdings and use of technology (tractors) to replace manpower are two reasons cited.



The changes in fishing economy through 1970s and 1980s also saw many fishing households generally prosper, which encouraged some of the women to withdraw from active fish trade. Thus, in mid-1980s, it was single women and the bicycle fish vendors who dominated the local fresh fish trade. By mid-1990s, however, the crises in the fishing sector drew the fishwives back into the trade, which added considerably to the competition (Salagrama, 1999b) and the original players in the trade have now come to be looked upon as interlopers by their successors!

Nowadays, bicycle fish vendors are the second largest group of buyers at many landing centres, outnumbered only by the local fish selling women. They come from villages about 30-50 km inland and generally prefer to do their business individually, with the result that they may seem like a big group but they lack collective strength, which often hampers their ability to purchase fish efficiently. Over time, some of the bicycle fish vendors have acquired mopeds.

An important point about these new entrants into fish trade is their ‘neither-fish-nor-fowl’ status everywhere. The traders often meet with social disfavour within their own caste groups, because of the nature of their work and the fishing communities also treat them as outsiders. Many services that a trader belonging to the fishing community receives – such as short term credit and discounts – are less available to these traders. Their legal status as fishers is perpetually in doubt and they cannot always obtain the State’s benefits earmarked for fishing communities in spite of being in fish trade all their lives.

It is thus possible to see three key stakeholders in the local fresh fish trade. These are:

1. Women from fishing communities 2. Bicycle fish vendors from non-fishing communities 3. Women from non-fishing communities

On average at any fish landing centre, women from fishing communities constitute about 50-60 percent of the total local fresh fish sellers and the cycle/moped fish vendors constitute about 30-40 percent, while women from non-fishing communities comprise the rest. Although, together, the petty fish traders constitute the largest category of stakeholders on the beach, they account for only a fraction of the transactions conducted, in terms of volume and value of their trade.

In many places, there is an intriguing new category of fish traders: these generally come from the fishing communities and their buying and selling activities are similar to those by any petty fish trader with one difference: their customers are the fishing households. The days when the fishers kept a part of their catch for domestic consumption having long gone, it has come to a stage that most fishers cannot afford to eat what they catch. Their target species have become so expensive that they would sell them and purchase cheaper fish from these women who procured their supplies generally from a large fish landing centre (or a trawl harbour, where they have access to the abundant bycatch that is landed) and sell it within the fishing villages. Naturally, many fishing households report that their fish consumption has decreased significantly over the years.



iii. Marketing system

a. Procurement

Fish for local fresh fish trade are mostly obtained in open auctions. The prevalent auctioning method in all southern coastal villages in Orissa (as in Andhra Pradesh) is ‘Dutch Auction’, i.e. the auctioneer begins asking for a high price and begins a countdown until one of the bidders stops him at a particular figure. In the north zone of Orissa, fish are sorted, graded and weighed before auctioning, but in the south zone, bidding is done based entirely on visual observation without prior weighing. The process of auctioning on the beaches has been described by many authors (XIM, 1991; Dahl & Forsgren, 1998).

These days, as cheaper fish like sardines and ribbonfish are iced and carried away to urban and export markets, local fresh fish traders face a serious threat from the large-scale traders. The local traders are constrained for investment to compete with the large-scale traders, but even if they are willing to pay a good price, the producers find it more lucrative to sell their catch to the large trader who makes his purchases in bulk. The decrease in access to fish makes the women fresh fish sellers to take up a number of other roles on the beach and also to diversify into non-fishing activities. The bicycle/moped fish sellers tend to trade in freshwater fish, because of competition at the landing centres and also because their consumers do not like to take cheaper marine fish.

b. Sale

The women sell their fish within a radius of approximately 5 to 10 kilometres from the landing centre. Access to mass transport (buses, auto-rickshaws and trekkers) has made it possible for them to take fish up to 20-25 km from their villages. Thus, the women from Arakha Khuda in Puri district carry their fish by trekkers to nearby towns like Brahmagiri, the women in Gopalpur area carry fish to Berhampur and Chatrapur, and those from Chandrabhaga sell their fish in a number of markets like Gop, Nimapara and Konark.

The sale is done from a central market or by going door-to-door. Generally, each fish seller ‘services’ a particular area regularly and has a set of customers who purchase fish daily from her, although the transactions are never complete without haggling for long periods before finally

Producers

Women traders from fishing communities

Cycle fish vendors

Women traders from non-fishing

communities

Consumers within 20 km radius

Consumers up to 50 km radius

Consumers within 20 km radius



settling upon a price6. Some women complain that their inability to speak fluent Oriya makes it difficult to haggle properly and thus make them lose.

Bicycle and moped fish vendors carry their fish up to 30-40 km inland and some might go as far as 50-60 km. The bicycle vendors frequently travel by trucks going in the direction of their villages by paying a small amount, more to reach the market in time than to reduce drudgery. Delays in reaching their markets in time could often be disastrous.

On reaching their villages with the fish in baskets (frequently iced these days), many traders leave a portion of the fish with their wives to sell in the local market and carry the rest to the neighbouring villages for door-to-door sale. Normally, the traders have a shrewd idea of how much fish they can sell, but sometimes they are left with a few fish at the end of the day. Previously, it was at such times that their non-fisheries background used to become a problem: they tried to consume or somehow use the leftovers, but they were also forced to throw away whatever they could not consume, because they had no experience of curing as a means of extending the shelf life of the fish. It is only recently that some of them have come to use ice to keep the surplus fish for sale on the next day. Still, lacking suitable and cheap storage facilities at the markets or at their home, the traders frequently suffer heavy losses.

There is no accepted unit of sale in local fresh fish transactions, but the bicycle vendors are known to use the weighing scales when selling big fish. Of late, some of the fish like mackerels are being bought by numbers. Payment is direct and, very rarely, in kind.

iv. Investment and earnings by different players in the chain

Fresh fish trade involves very low investment, which is the reason why many poor fishing households venture into it. When a fisherwoman finds herself in the role of the sole bread earner to the family, either because her husband is unemployed or disabled or drunk or dead, entering into fish trade is an automatic choice. Some of the traditional systems and practices are also geared to facilitating the entry of single-women into fish trade as a means of ensuring their livelihood security. It is possible to see people with very little investment venturing into fresh fish trade simply by procuring fish on credit and making payment to the fishers after selling fish to the consumers. This is however an option available only to the women from fishing communities and not to the non-local women and bicycle vendors.

On average, a local fish seller (woman) purchases about 30 – 40 kg of fish because there is a limit to the quantity that she can carry on her head to the markets. Currently, a woman trader invests between Rs. 400 to Rs. 900 per cycle of operations depending on the kind of markets accessed and availability of fish and hopes to earn a profit of between 10 and 20 percent, which again is dependent upon many factors. During good fishing months, the petty fish traders hope to earn about Rs. 1,200 to Rs. 1,500 per month, but with raising transport costs, use of ice and other expenses, many of them complain that their margins are falling. Availability of fish being confined to about 6-8 months in a year, their earnings also come down significantly during the non-fishing months.

6 It may not be far from truth to say that the haggling has a more social, or even cultural, function than an economic one.



Bicycle fish vendors buy 40-50 kg of fish at an investment of Rs. 800-1,000 in one cycle, while the moped fish vendors invest up to Rs. 1,200 to Rs. 1,500 to buy 50-60 kg of fish. The returns could be in the range of 10-30%, but the net earnings are diminished by a number of expenses – spoilage of a portion of fish, fuel costs (for the mopeds), ice, frequent repairs and incidental expenses during the journey.

v. Varieties of fish traded

Until mid-1990s, the petty fresh fish traders had access to middle range fishes, such as mackerels, mullets, jewfish, threadfins, catfish, ribbonfish, tuna and baby sharks, but with increasing market demand for these varieties elsewhere, they have had to switch to ‘lower class’ fishes, such as trawl bycatch – silver bellies, small ribbonfish, big-eyes, threadfin breams and goatfish (Salagrama, 1999:158-160). Dahl & Forsgren (1988:42) mention that fish like tuna were purchased only by poor people because of low demand (hence low price), but nowadays, tuna is a prized fish not easily available to the poorer consumers. Varieties such as large ribbonfish, jewfish and eels are no longer available to the local fresh traders because they are exported in ice to export markets. Demand for some species – particularly tuna and mullets, which the local fish sellers depended on – also increases seasonally as a result of bulk purchases by long liners in Pentakota and Paradeep who use them as bait for catching sharks.

vi. Level of technology

Predictably, the level of technology utilised in this marketing chain is very basic, if not rudimentary. The women use bamboo baskets, which they purchase from a specialist group of basket makers who sell their wares in the fishing villages or at the weekly markets where the fishers obtain their basic necessities. The bamboo basket is versatile, low-cost, locally made and is well adapted to carrying fish. It provides air passages and helps drainage of water from the fish (seepage of water might have affected the ‘social’ acceptability of the fish carriers, but if not allowed, it would affect the business itself). In short, at the economic level where these women operate, the bamboo baskets are perhaps the best means of carrying fish about. Some of the baskets used by the bicycle vendors are reinforced with old cycle tubes to withstand rough usage.

In villages where ice is not locally available, fish landings are timed to coincide with the market times – generally in the morning time. In several places – including well-connected landing centres like Puri and Konark – landings take place twice a day, and the catches are bought by different categories of traders each time. The local fresh sellers buy fish at both landings – the morning purchases go to villages in the neighbourhood while the evening landings are sold in the local markets.

If the catches land late in the evening, the women try to keep their fish in ice – where available – until the next day’s market, but fish are rarely carried to the markets in ice. In towns like Chatrapur and Berhampur in Ganjam district, consumers view iced fish with suspicion. The fish traders in Gopalpur area who buy fish in the evenings keep them in ice overnight but bring them out sufficiently early in the next morning. Once the chilled fish reach normal room temperature, sand is sprinkled on them (to give the impression that the fish have come directly from the



landing centre) before they are taken to the town by head loads (ICM, 1999)7. In Puri district, use of ice is fairly widespread (subject to availability) and the consumers apparently have no reservations in buying iced fish.

Among the three categories of people in the trade, the bicycle fish vendors can be said to be the more sophisticated, while the women from non-fishing communities are the least ‘techno-savvy’. Several cycle fish vendors have begun to use plastic crates for carrying fish (which helps to keep the fish in a good shape and lasts longer than the bamboo basket, although it does not withstand shocks quite as effectively as the latter), and they regularly use ice to keep the quality of fish for long durations. The shift to motorised two wheelers by some traders has enhanced ease of operations, but also added an extra cost (for fuel and maintenance).

vii. Key constraints in the local fresh trade for the traders

A. Constraints related to procurement

i. Growing investment needs: As the cost of fish increases due to reduced landings as well as competition from other traders, the traders have to spend more to obtain the same quantity of fish. It is said that the investment needs of petty fish traders have at least doubled in the last six years, but the quantity of fish purchased remains the same or even dwindled. As evidence, the women point to the size of their baskets which have remained the same over the years.

ii. Need for ready money at landing centre (monetisation): Increased competition and arrival of outsiders, coupled with ready need for money to pay for fishing operations make the producers to insist on being paid immediately after the sale is concluded. The larger traders – from the export and urban market chains – and even some large-scale dried fish manufacturers might be allowed some time to pay (even when the fish are bought in open auction), but the petty traders (particularly the cycle fish vendors, who are considered to be outsiders) are made to pay on the same day of purchasing fish. This necessitates the traders to borrow money from local moneylenders at very high rates of interest (ranging between five and ten percent for a fortnight or, sometimes, even for a week). The interest naturally eats into the traders’ profits while increasing their business risks.

iii. Competition from other traders both within the local fish market chain and from the other chains raises procurement cost to unrealistic levels and reduces fish availability to the local fresh traders. The fishers are more interested in selling to larger traders either because of the services they obtain from them or because it is simply easier to sell their catch to one trader. It is also true that trading consistently with the same large scale traders is more profitable than selling to a number of local traders.

iv. The petty fish traders work individually at all stages of their operations, which reduces their bargaining capacity considerably. It is not uncommon for individual bicycle fish traders (all from the same village and, perhaps, from very closely related families too) to buy fish at higher price (up to 10% more) from an intermediate seller on the beach than collectively buy it from the fishermen and share it among themselves.

7 This is by no means an exceptional case; in an ‘advanced’ fish eating state like Kerala, an important player at the Trivandrum market is the ‘sand-seller’ selling ‘fresh’ sand from the beaches by weight to the local fish traders who sprinkle it on their fish in order to give the impression to the consumer that the fishes have freshly arrived from the sea!



v. Thus, the local fish traders are forced settle for fish of poor quality or cheaper variety, because of their availability or affordability. Consequently, they can cater to only those consumers who also cannot afford to be discriminating in their choice, i.e., the poorer sections. This might indeed be a good thing because this helps the poor to obtain some protein in their meal, but the fact remains that the margins of trade are low for the traders.

vi. An important structural change that is taking place in most coastal areas has been the concentration of fish landings at fewer places than before. This is mainly to take advantage of the landing, marketing and servicing facilities that are available at these centralised places, but the consequence for petty fish traders is that fish landings in their villages comes down and this can only mean a reduction in fish available within the village. Many petty fish traders undertake journeys to the nearest large landing centres in order to procure their supplies. The concentration of landings might imply that there is a good supply of fish for all categories of traders at the centralised locations, but the effort and cost incurred for transport to and back from these landing centres are a new addition to the costs of operation.

B. Constraints in transport and preservation

i. Poor transport: Almost all Chilika villages suffer from poor or inadequate transport facilities and many of the other villages fare only marginally better in this respect. Poor transport facilities mean that, for most women fish traders, the only option to reach their destination markets is to walk carrying the fish baskets on their head. For the bicycle fish vendors, it means a long ride of over 30 km in each direction. Inability to transport fish quickly increases spoilage and failure to reach a market in time might mean losing a day’s sale. The stoppage of transport services, if available, on any given day means a total financial disaster for the women traders who have no option but to salt dry their fish.

ii. Transport services, even in areas where they are available, pose two problems for the traders: one, they are so overcrowded that there is hardly any space for an individual trader to keep her fish, even if the other passengers would allow her to do so (they generally don’t); two, the cost of transport is an additional burden on their slender margins of trade. Most women prefer to walk rather than squander their profits on transport. For many bicycle fish vendors, the option of shifting to a motorised two-wheeler is ruled out for the same reason: besides a high capital investment, they will also be burdened with the running costs which their trade cannot simply absorb. Where possible and available, a few fresh fish traders might try to engage a four-wheeler or a ‘tempo’ – generally one which has come into the village for some other purpose and is going back without any luggage of its own – but they still can go only up to some nodal point and then get off to find their own individual ways to their markets.

iii. Where the fish cannot reach markets sufficiently early, spoilage is naturally a major problem irrespective of the original condition of the fish. Moreover, the fact that the fish available to the petty traders are frequently not so fresh at the time of landing itself means that they spoil quickly and lead to regular losses. The traders in Chatrapur area do not use ice (at least when they take fish to the markets) because of consumer preferences, the women traders in Arakha Khuda do not ice because it is not available locally and some of the women in Chandrabhaga (as elsewhere) do not use ice even if available because they cannot afford it. Where local fish traders (particularly the bicycle fish vendors) have begun using ice regularly for preserving their fish, the systems of preservation are not efficient enough to hold the ice from melting within a few hours. Generally, the sales towards the end of the day tend to be



desperate (‘distress sales’) and give poor returns8. It is normal for the traders to sell the last quarter of their fish for whatever price they can get. It is said that the fisherwomen have to use at least a quarter of their fish for salting and drying during the summer months, because of the problem of spoilage. This, no doubt, is built into the economies of operation, but given an alternative option – i.e., sustainable access to ice – will mean a significant increase in income plus a confidence to deal with the customers effectively and bargain for better prices.

C. Constraints in trade

i. Poor facilities at the markets: Most fresh fish markets have only rudimentary facilities which constrain rather than facilitate the traders in carrying out their activities. Whenever the traders sell their fish at the markets, they must pay entry fees, but the quality of services they obtain is abysmally poor. Harassment by functionaries of different departments also is a frequent complaint heard from the traders.

ii. Dwindling consumer interest in marine fish: The changes in composition of the fish that the traders have traditionally dealt in have meant that the consumers are disinclined to purchase marine fish. There has been a distinct shift in the markets for marine fish in the coastal and near-coastal inland areas through the 1990s; while traditionally middle-classes had been the important consumer segment for them, it is the poorer classes who provide the bulk of consumers for marine fish in more recent times.

iii. Competition from other traders: As more traders enter into fresh fish marketing – more because it is the only option available than for the profitability of operations – there is growing competition among traders at the markets. The growth in production of freshwater fish over the last decade has brought forth a very serious competitor into the markets – the freshwater fish trader – who, aided by the propensity of the Oriya communities toward freshwater fish and also by the changes in composition of marine fish sold in the market, manages to garner a large chunk of the market. The cost of freshwater fish has remained within bounds over the years and may even have come down as a result of increased production in some areas, which works in its favour.

iv. Monetisation of transactions at the marketing end: For some of the poorest categories of traders, the rice and other foodstuffs they received in exchange for fish was an important source of food security. Several traders have reported that changing over to cash payment system from barter system has not only given them the freedom to buy only those things that they needed, but is also a necessity because their transactions with the fishermen are also monetised. But many women – at the lower scale of activity – complained that the shift from barter system is a loss because barter enabled the traders to meet most of their basic needs, but the money they receive nowadays is often insufficient to fulfil the barest necessities.

B. Processed fish trade

Fish curing developed as a result of a felt need to reduce losses and, though it is an evolution over local fresh fish trade, it had got transplanted in many areas quite early and was fairly widespread by the time the colonial administration began to document the fishing and fish processing systems in mid-19th Century.

8 Chittemma, the charismatic leader of Samudram, likens taking fish to the markets to taking a corpse to the cremation grounds. “You cannot bring it back whatever the conditions prevailing there!”



i. Background

Local fresh fish trade was an inadequate measure to dispose off all the catches that the fishers landed. Orissa was a big fish eating state, but the demand was almost entirely for freshwater fish. Markets for marine fish were fairly limited with only a few marine species like the hilsa (Hilsa ilisha) and the bhekthi (sea perch; Lates calcarifer) being consumed with any enthusiasm9. It is thus only people in coastal areas who consumed the other marine fish.

Moreover, poor transport confined the women’s trade to the places that the women could reach by walk. They were also obliged to return home before nightfall, both for reasons of personal safety as well as to take care of the household chores, so they could only cover short distances. Since the fish had to be carried by head loads, there was a limit to the quantity of fish that the women could carry and they chose to carry the more expensive large fishes to the markets leaving the smaller varieties behind.

The problem of not being able to sell fish locally was exacerbated during peak fishing seasons, when the fishing crafts landed a surfeit of catches – mainly fish shoals consisting of small pelagics (sardines, anchovies and mackerels). Besides, the shore-seines and the Peddavalas, which were prevalent in the southern Orissa coast, regularly caught small pelagics and other varieties in the near shore waters. The magnitude and the composition of these catches were such that they could not be consumed by the fishers themselves or by their traditional clients sufficiently quickly. Being oily, the small pelagics perished quickly due to oxidation. It was not uncommon for fishers to dig deep holes in the ground to bury their catches of sardines and mackerels just to keep the rotting fish from polluting their immediate environment.

It was thus imperative to explore alternative avenues for selling excess fish. Curing and drying were two of the oldest and the most widespread methods of fish preservation and satisfactorily addressed this need. It is possible that the processed fish from one area first appeared in the weekly markets at another and the response of the consumers to the product encouraged the local communities to adopt the system to preserve and sell their surplus catches10. Many of the women in Puri and Ganjam districts were born in Andhra Pradesh where they might have been used to seeing (or even making) cured fish and when they moved into their husband’s village after marriage, they would also have brought these ideas along with them11. That the processor-traders continue to sell their products regularly in Andhra Pradesh gives weight to this supposition.

Being a traditional household-level activity, it was easy for the women to acquire the skills and social approval necessary to take up fish processing. The socio-economic conditions in a fishing village permitted the processors to enter into a range of relationships with producers, other members of the community and buyers (traders and consumers), which allowed flexibility of

9 In Andhra Pradesh and Gujarat, two other major dry fish producing states, local fish consumption of any kind was so low that dried fish production may have started almost simultaneously with fishing itself!! 10 It is, of course, a chicken-and-egg question to decide which came first: the demand or the product, But, in the case of Orissa, it can be assumed that dried fish from Andhra Pradesh had been catering to local markets for a long time and this showed the way forward to the local women. 11 In Andhra Pradesh, fish smoking is known to have spread in the Godavari districts mainly by the women who married and moved into new villages and set up fish smoking kilns there. Kalavathy (1997) notes that Oriya women in places like Astaranga took to processing after watching the Telugu processors residing nearby. ICM (1999) notes that the women in traditional Oriya fishing villages like Balipantal entered into fish processing after observing the neighbouring Telugu communities.



operation as well as financial security and occupational sustainability. The processors also managed to access, virtually free of cost, many services that would otherwise have made processing less cost efficient, or even unprofitable. Fish processing was thus an outcome of a sensitive balance and integration between various environmental factors.

Processed fish trade was still a local activity controlled by the women belonging to the fishing communities. It developed based upon a need, made use of simple low-cost tools, catered to the local communities and operated along fairly predictable lines12. The margins were less, but that acted as a protection against vested interests moving in and taking it over from the women13. Moreover, processing also did not threaten the existing marketing network, i.e. local fresh fish trade. In spite of the growth of processed fish trade, fresh fish trade apparently continued to be an important source of income; when the fishers entered into trade agreements with the processors, it was ‘on condition that they sell all their catches except big fish to them…’ (MFB, 1916: 124), indicating that the big fish continued to be sold in the more lucrative fresh fish market. Put simply, while the fresh fish trade paid better in unit terms, the dried fish trade – by virtue of its bulk – provided more income for the fishers. That many fresh fish traders processed fish regularly, while many processors also sold fresh fish when it suited them – a tradition that continues to this day – supports the interconnectedness of these two marketing chains.


As the processed fish trade acquired prominence in the fishing sector, it gave rise to some new categories of players. The processors themselves fall broadly into three categories:

1. the large-scale processors, who act more like managers of processing activity than active processors themselves; have assured sources of supply by virtue of investing in fishing operations; have the capacity to take substantial quantities of product to the market on their own or even get the wholesale buyers to come to the village for buying their product; employ processors and processing assistants on a regular basis; are involved in production of various products for different markets and consumers including poultry; have good access to capital and credit, hence can afford long cycle times (they speak in terms of ‘turnover’ rather than investment on particular cycles of operation);

2. the medium scale processors, who have some assured sources of supply, but also buy from open auctions, frequently on credit basis; employ processing assistants on a piece rate or for daily wages only when fish catches are available; are involved in the actual processing operations; join with other processors to hire a means of transport for carrying fish to the market; choose to sell their product to retail sellers in the markets; concentrate on products for human consumption (and not poultry feed); returns from one cycle frequently form the investment for the next cycle, hence short cycle times are a necessity to them;

3. the small-scale processors, who obtain all their fish in open auctions, with or without credit; do processing all by themselves (without employing anyone); sell the product in

12 While the movement of fish between neighbouring states might seem like stretching ‘local’ rather too far, the fact remains that not only are these two areas contiguous, but in terms of the linguistic, cultural, social, familial and political moorings, the communities are more or less homogeneous, a fact to which the fisherwomen themselves bear a strong testimony, born as they are in Andhra Pradesh and married into Orissa. 13 It might be instructive to note that in the north zone of Orissa where the involvement of women in fish processing and trade is much limited, the emphasis is more on production of fishmeal.



neighbouring small markets or to the larger traders in the village itself; sell directly to consumers, mainly the poorer sections; depend on whatever fish are available and affordable rather than be choosy. When possible or convenient, also buy small quantities of finished product from larger traders for local sale in order to reduce processing risks; short cycle times in order to pay for the next cycle of operations.

Overall, the number of large-scale processors is very small; in a village, it hardly exceeds two or three people (and in some villages, there are no large-scale processors at all, while in large landing centres like Pentakota and Gopalpur, their numbers are considerably more). Medium scale processors are more in number in all villages, but it is the small-scale processors who constitute by far the largest number of people in the activity in any village. The number of small-scale processors in a village could be in dozens.

Ward (2000:20) gives a profile of the small-scale fish processors of Orissa developed as part of a DFID-funded research on reduction of wet season losses in India. The research showed that 95% of the traditional small-scale processors in Orissa were women. A significant proportion of the women in processing come from single-headed households, and the income from fish processing and trade is often their only source of income. Seventeen percent of the processors met during the wet season losses research belonged to households with no adult male member, i.e., woman-headed households. For the poor in the fishing communities, whose asset base was low, fish processing offers a livelihood with relatively low investment. The women processors often knew no other trade. The ease with which one could enter into processing, lack of alternative income opportunities and the fact that processing could be undertaken near the house (allowing women to attend to household chores), were some reasons why women predominated in the sector.

The small-scale processors are seen to diversify into other trades most readily during the lean periods, whereas the others are reluctant to do so.

Frequently, fish processing is a joint operation by two women who share the work load according to their ability. One woman – generally the older of the two – takes care of buying fish in auctions on the beaches and selling the finished product at the weekly markets, while the

Producers

Large-scale processors

Medium-scale processors

Small-scale processors

Wholesale markets for human consumption

Retail markets for human consumption

Retail trade for human consumption in the area

Wholesale markets for poultry feed

Wholesale trader

Retail trader Consumer

Poultries



younger woman takes care of processing operations. As the availability of fish for processing declines and the risks at the market increase, there appears to be a trend towards more joint operations in places like Konark, which helps the women to put together enough capital to buy fish and to share the losses with one another (rather than be individually wiped out of the business – which is a real threat these days) (ICM, 1999).

Besides the regular processors, many women frequently take advantage of glut landings or a fall in landing prices to make some dried fish quickly for sale. Many fresh fish sellers use the leftover fish from a day’s sale to make dried fish, which might not be as lucrative as when sold fresh, but at least assures some return.

While some fish processors prepare fish for human and fishmeal consumption, a number of people are also exclusively involved in fishmeal production. They are generally located near port areas, where trawl landings occur. A whole community of Oriya fishmeal manufacturers resides near Paradeep. Because they deal in large quantities of putrid or otherwise smelly fish, the fishmeal manufacturers are generally located on the edges of the villages.

Besides the actual processors, processing assistants (normally the women in the neighbourhood who contribute their services in return for a wage or a few fish or, at times, just the fish guts); fish carriers (who carry fish from landing centre to the processing area; from processing area to the road point; etc.), basket sellers, salt sellers and transporters play important roles in the production and marketing chains.

On the marketing front, the demand for dried fish also gave rise to a new category of buyers that was to become ubiquitous in the fisheries sector in due course: the wholesale traders. The wholesale traders were often from the plains but long resident in the tribal areas, and began to procure large quantities of dried fish at the weekly markets and retail them to the tribal communities. For the fishers, dealing with wholesalers on a regular basis was a rather significant change because it was their first experience of bulk trading and also one necessitating interactions with ‘outsiders’ in a big way. But some mutual suspicion remained for a while yet and the transactions were strictly of the ‘cash-and-carry’ type. As the market links strengthened, the wholesale traders began to come into the villages and purchase directly from the producers. The trust that developed between them may have led in due course to some credit-based transactions, but the credit linkage between the processors and the traders never gained strength in dried fish marketing chain. Generally, it was the processors who obtained their fish on credit.

Over time, there has been a decline in processing operations, the numbers of fish processors as well as their capacity to process fish. The arrival of ice and the consequent competition from other market chains has certainly contributed to this, as also a general decline in availability (or capture?) of the fish that generally went into processing. As the markets faced uncertainties with the arrival of product from all over the country, large-scale operations became risky, and even medium-scale operations became less certain. In several villages, it is no longer possible to identify large-scale processors who dominated fish processing activities until a decade ago. Large-scale women processors in places like Puri and Paradeep slid down the scale into the medium-scale category during the 1990s. Where large-scale operators exist (for instance in



Pentakota), it is generally men who dominate the proceedings, while women are content to act as their processing assistants. ICM (2000) discusses these issues in greater detail.


a. Procurement

By early 20th Century, the demand for dried fish was so big that this led to competition at the landing centre to obtain fish for processing. The records of the Madras Fisheries Bureau from early 20th Century indicate that the processors were the main buyers of fish. Fish auctioning on the beach became the norm ever since cured fish trade acquired prominence.

This competition led to new arrangements for assured supply of fish for the processors. The processors frequently paid an ‘advance’ to the fishers in return for the privilege of buying up, ‘for ready cash, all the fish caught within a fixed period’. Also ‘as the catches are brought in, they are valued and payment is made in cash either in full or in part in which latter case the balance due is adjusted towards the advance payment, but the whole advance is not appropriated before the expiry of the contract.’ The fishers also borrowed from these processors ‘on the security of their boats and nets and on the understanding that they give them a certain portion of fish caught every day. If the loan is a small one, they pay it back within a month or two by sale of fish to them at a cheap rate.’ (All references from MFB, 1916)

Competition for fish also began a process where outsiders began to enter into the market chain. Thus, in Prayagi, it was reported in 1916 that a Kevuta trader who ‘does not engage himself in fishing’ was buying fish, curing them at the yards set up by government for the purpose and taking it to the markets for sale, (MFB, 1916: 121). Similarly, traders belonging to Kevuta and Kandra castes (both Oriya non-marine fishing castes), the latter often ‘in easy circumstances though not wealthy’ (but wealthier than the caste fishermen), playing middlemen’s role were reported from other landing centres in Ganjam district around this period. Arrangements of a similar nature would proliferate in due course between the producers and the commission agents in modern marketing systems leading to a marginalisation of the ‘traditional’ fish processors.

Nowadays, very few processors pay ‘advances’ to ensure supply of fish. The women find it more viable to buy their fish in open auctions because of the uncertainty in availability of the required fish. In any case, their capacity to extend advances is very limited when compared with that of the traders in modern marketing chains. The fishermen (specially the beachseiners) continue to give fish (generally small pelagics) on credit to the processors on the understanding that they would repay the money within a week, but this is seldom a satisfactory arrangement to either party and frequently ends up in mutual recriminations.

b. Sale

The markets: Initially, within the state, the women took their dried fish to the neighbouring weekly markets where various agricultural commodities are sold. For instance, the processors of Ganjam district went to the weekly market at Humma, where tribal groups from interior Orissa habitually purchased their weekly supplies of commodities like salt, tamarind, chilli powder, oil



and other foodstuffs. Lack of transport meant that only a few closely set and often interrelated fishing villages supplied fish to a market on regular basis, which helped the women to predict the market trends in advance and arrange their business accordingly.

Simultaneously, the processors might also have begun taking their product to weekly markets in Andhra Pradesh. The distances were certainly longer, but the women knew there was an assured market for their product, so the Andhra Pradesh markets were preferred for bulk sale. This preference persists to this day and the product that the Orissa processors carry hundreds of miles to sell in Andhra Pradesh is frequently bought by traders from Orissa who then spend a fortune to arrange for the fish to be brought hundreds of miles back into Orissa!!

The dry fish markets in Orissa are of two types (PHFP, undated, 7:47-50): first, there are the weekly markets, such as in Humma, Baripada (twice a week) and Astaranga, to which most Nolia fish processors take their product. Mostly wholesale transactions take place at the bigger weekly markets like Humma and Jeypore. Secondly, there are the daily markets, such as Parlakhemundi, Rajsonakhalla, Rayagada, Jeypore and Bhadrak, which conduct both wholesale and retail trade. By far, the most important wholesale market for the processors right from Paradeep southwards is Nakkapalli in Andhra Pradesh.

The consumers: An important segment of demand for processed fish is the tribal communities in interior Orissa. The location of most important dry fish markets – Nakkapalli in Andhra Pradesh, Humma, Rajsunakhala, Bhadrak and Baripada in Orissa – in places that act as ‘gateways’ to the tribal regions indicates the importance of the tribal demand to dried fish business. A point to notice with respect to the tribal consumers is that they are largely poor – poorer, if anything, than the fishers themselves. The other important customers for dried fish also come from the poorer sections: this is the agricultural labourers, who consume dried fish because it is affordable. A sizeable proportion of landless poor in the coastal areas – and perhaps in the interior too – consume good quantities of dried fish. One advantage of dried fish to poorer consumers is its long shelf-life: many households buy a large quantity of it during the good earning period and use it for consumption along with rice or gruel during the lean seasons. Dried fish thus contributes to food security during lean periods.

That the consumers for dried fish come predominantly from the poorer sections of the society means that their ability to pay good prices is limited. Consequently, the economies of scale work in the fishers’ favour only when sufficiently large quantities of cured fish are taken to the markets. Since the markets operate on a ‘large volume-small margin’ principle, the processors have discovered that bulking their product – either individually or in groups – not only reduces transport costs (on bullock carts) but also gives them an edge in the negotiations with bulk purchasers. Weekly markets allow them to bulk up their products over a period and thus continue to be the most preferred choice for selling dried fish. The varieties of fish dried also belong to the cheaper category – small fishes, less fleshy varieties like ribbonfish, some varieties of prawn etc.

The marketing system: The location of some of the markets at a considerable distance from the villages means that the women would need to spend a day or more away from home. Concerns about their personal safety, social inhibitions on women to undertake long journeys and the more practical issue of taking care of the household chores and the children in their absence meant that



it is the older women (particularly widows), who have relatively few responsibilities on the home front and are considered to be less risk prone, that take up fish marketing. Even when a young woman is involved in the activities, her role is generally confined to procuring fish for processing or to processing activities, rather than to carry the fish to markets.

Also, the women seldom go alone to the markets – many of them join together and arrange for transport of their fish jointly (thereby reducing transport costs also) and travel together to the market and back (but retaining a fierce independence over their trade at the market). Sometimes the processors accompany their product on the trucks, but frequently they travel separately and reach the market by the previous night. Thus, even if younger women undertake marketing trips to distant areas, they are seldom alone and have the company of other women from their own village. Travelling to the weekly dried fish markets in Andhra Pradesh in any case provides an opportunity for the women to meet up with their kith and kin back in their home state, so it is more like a homecoming than a business trip. This is, if anything, better than in the past when the women sold fresh fish alone, because the meagre markets in the villages they frequented could not provide custom to more than one or a few traders. Thus, processed fish trade ushered in cooperative activities during some points of the marketing chain.

Trading at a weekly market like Humma or Nakkapalli starts very early in the morning – frequently as early as three or four AM – and most of the sales are concluded by 9 AM. Eye observation is the most general way of measurement and much bargaining precedes the conclusion of a deal. There is advantage in selling the fish as soon as the markets open for business as most buyers tend to finish their purchases before sunrise, leaving only a few stragglers – generally those with limited cash in their pockets – to buy the rest of the product. Thus, when asked if improved quality dried fish fetches a better price in the market, the answer frequently is, “It does not, but it helps to sell the product quickly!”, which, for the processor, is equal to selling at a higher price.

Inability to sell the product until late into the day generally means reduced profitability. If the trader has still not sold her fish by late-morning, it can mean a financial disaster: considering that each cycle of operations is funded by the returns from the previous one, she cannot afford to keep her fish to sell another day. In any case, transport costs, losses during transport and lack of storage facilities at the market will mean that she has to get rid of the product as best she can. Frequently, she resorts to ‘distress’ sales, which means she loses heavily in the operation. Recent studies indicate that the number of times a processor resorts to distress sales (for various reasons) is rising.

When she finally manages to sell her fish, the processor buys a few items for her domestic use (rice, vegetables, toys for children) and for her production purposes (salt, gunny bags, knives etc), and reaches her village in the afternoon to begin the production cycle once again.

Units of sale: Smaller quantities are bought and sold by weight particularly when sold retail, but larger quantities are valued by eye-estimation only. The size of bags and baskets used to carry the fish help in arriving at a value of the product and thus, bargaining is based on approximations; this is certainly not a place for amateurs. Since the buyers do not often check the contents thoroughly, good fish are spread on the top to hide the poorer quality product underneath.



Demand from ex-state markets: The 1990s saw a spurt in the dried fish marketing as a result of demand from the north-eastern states of India and Bangladesh. A few pioneering efforts have yielded good indications of the potential for marketing dried fish from Orissa in the north-eastern markets (BC Pattnaik, 1998; Gordon & Madhu, 1997), and traders from Puri and Paradeep began to send dried fish by trucks to the Jhaggi Road market in Assam. Transport and communication problems are reportedly the main concerns when dealing with the north-eastern markets. A new trade also opened with the urban centres in interior areas – such as Rourkela and Bhilai – although the contribution of the southern zone fisheries to these markets appears to be low. There is also a large untapped market in Bangladesh for dried fish. While many clandestine consignments of dried fish do frequently pass through the border between the two countries, there is potential for developing the market manifold along more legitimate lines.

vi. Investment and earnings by different players in the chain

As in fresh fish trade, the investment needs for entering into cured fish business were also quite low and the women in southern Orissa used their skills to reduce them even further. For instance, instead of buying readymade cement salting vats, the women made them within the villages. The result is not very aesthetic to look at and had the additional disadvantages of making it impossible to assess the production capacity of a processor from a look at her vats (but that is the assessor’s problem), but the women (who saved nearly half the costs) were happy with their handiwork and it served its purpose (i.e., salting fish) effectively enough14.

The large scale operations are characterised by really large sums of investment, but much of the investment seldom shows up as hard currency. The informal nature of transactions between the producers and the processors and between the processors and the various categories of traders, the flow of the products to different markets near and far and the increasingly speculative nature of the business give the trade a very modern look indeed. Thus, it is nearly impossible to decide how much investment a particular large-scale processor puts into her business; frequently even she gives the impression she has only a vague idea of her investments15. There are processors whose monthly turnover runs into lakhs of rupees, but these are very few. A majority of the large-scale traders have an investment of about Rs. 20-40,000 in the business, and earn about Rs. 6-10 thousand per month, which is however confined to about six months a year, thus effectively halving their monthly income when spread over the year. The large-scale processors seldom diversify into other activities during lean periods.

The medium-scale processors operate at an investment of between Rs. 5,000 and Rs. 20,00016 per cycle and earn about Rs. 3-6,000 per month for about six months in a year. The medium-scale processors sometimes diversify into agricultural work, but their primary allegiance is to fish processing. Most small-scale processors use between Rs. 500 and Rs. 3000 as working

14 Until, that is, someone tried to design a standard lid to fit all sizes to reduce infestation losses in 1999 and discovered they couldn’t (ICM, 1999) 15 Asking a fish processor how much she invests in her operations opens a Pandora’s Box. The questioner asks a simple question (“How much do you invest?”) and finds himself drawn into an upward recital of numbers like in an auction (“One thousand?” “Two Thousand?” “Twenty thousand?” “Fifty Thousand?”), and the only answer he receives is an assenting nod to any figure he cares to name! The fact is that the processor takes whatever the fishermen are willing to give her on credit and so is unable to decide upon an appropriate figure. 16 Obviously, the ranges are too large to help in making generalisations; a perusal of Ward (2000) shows how difficult dealing with ranges like this can be.



capital, and earn Rs. 800 to 1,500 per month. Increasingly, like the fresh fish traders, it is also possible to see the small-scale processors playing a number of roles at the landing centres – as commission agents, as resellers of fresh fish and prawn, as local fresh fish sellers etc – and outside the fisheries sector as well. For the bottom half of the processors who constitute the small-scale processor category, this is just one of the many occupations they are habitually involved in, because they cannot take fish curing as a dependable livelihood activity anymore.

The processors’ assistants are paid a piece rate depending on the quantity of fish available and the season (the rate is higher when alternative work opportunities like agricultural labour are available). When the quantities to be processed are too small, they make do with the guts and a few fish as payment for their labour.

v. Varieties of fish processed

Small pelagics (sardines, mackerels, anchovies, lesser clupeids) contribute a major proportion of fish used in processing. Ribbonfish and Bombay-duck have traditionally been considered as being suitable only for drying. Many of the varieties caught in trawl bycatch are also processed for human or poultry consumption (Salagrama, 1999). There have been changes in terms of availability of, and access to, the various species for processing purposes, and this has led to a general reduction in fish processing activities in the state. However, glut landings of small pelagics and bycatch from shrimp trawlers continue to supply fish for processors. Also, despite a general decline in traditional fish processing over recent years, there remains a strong market demand for traditional products, which continues to ensure livelihood and food security for a substantial number of producers and consumers of dried fish.


The processed products are generally made from fish that could not be sold fresh, but some varieties of fish – for e.g., anchovies, ribbonfish, sardines, croakers – are specifically made into dried products. Traditional fish processing involves different combinations of salting and drying to achieve optimum results both in terms of production costs as well as consumer preferences.

Simple sun-drying: The traditional processing operations make ample use of the cheapest and the most abundant source of energy in a tropical country: sunlight. All that the women need to do with small fish (like anchovies and small sardines) is to spread the fish on the beaches and allow them to dry out.

Salted and dried fish: When it comes to bigger fish such as mackerels, sardines, croakers, ribbonfish, jewfish and horse mackerels, the processors use salt to expedite the process of dehydration. Moreover, bulk landings frequently coincide with monsoons when sunlight also can not be taken for granted, necessitating some other measures to preserve the fish. Salt, which is produced in bulk in several coastal areas and is affordable, comes in handy as a preservative.

Wet salting: It is difficult to dry larger fishes (sharks and tuna) because of their thickness, while drying fish with too much oil content (sardines during certain periods of the year) gives rise to painty odours which put off the consumers, so the processors simply soak them in concentrated



brine for extended periods of time and then pack them into baskets for sending to their destined markets. Drying is thus completely avoided in the process.

The orientation of the dried fish markets in favour of poorer segments of population had an impact upon the quality of the production systems as well as the product, a problem that continues to dog this market chain to this day. This gave rise to what perhaps is the first state-sponsored development programme in the fisheries sector in late 19th Century: provision of salt at a subsidised rate to the fish processors. Salt was not universally available or – often – affordable. Where available, it was of poor quality. The Government had set up fish drying infrastructure at selected locations all along the coastal areas and registered the local processors (who came to be called as ‘Ticket Holders’ perhaps because they were given an identity card) and the ticket holders were made eligible to make use of the processing and drying infrastructure besides obtaining salt at a subsidised price from the government officer in charge of the place. The results of this programme were predictable if one may say so with the benefit of hindsight (and the experience of being a part of countless such future experiments)17, as the following excerpts from a paper presented by the then Director of Madras Fisheries Bureau at the Lahore Industrial Conference, 1909 would show:

17 As late as December 2003, a team of experts was investigating as to why the fish processors in Paradeep and elsewhere were unwilling to adapt ‘improved fish processing practices’ in spite of the fact that adapting them would improve quality manifold and reduce fish losses!

Fish purchase in auction at landing centre

Transport to curing/drying site

Waiting period before processing

Grading and de-scaling and gutting

Washing with water

Preparing the salting vats

Preparation of brine

Fish kept in brine and held with stones

Vats covered with sheets, palm leaves

Fish cured in brine overnight

Washing fish with water

Storage at home

Packaging in bamboo baskets

Periodical turning of fish

Sun-drying on palm leaves and nets

Transport to markets for sale

15 mins

1 Hour

1 hour

12 hours

40 mins

8-16 hrs

30 min

2-3 days

½ Hour

FLOW CHART OF PROCESSED FISH PRODUCTION IN

SOUTHERN ORISSA

Fish cured in brine

3-4 Days

Simple sun-drying

Wet salting

Salting and drying



‘…from 1882 a gradually increasing number of yards, or bonded enclosures were opened, at which salt is issued not only free of duty but often at rates much below the local cost of the salt to Government [which] take no direct part in the curing; the only conditions are that the fish shall be brought into the yard, salted and dried within its limits, and kept there till presumed fit for issue… There are 143 such yards scattered along the coast in which something over 50,000 tons of wet dressed fish are annually cured…

The result of this concession to the industry has not been all that was expected…for the cure has not developed in quality, or even in quantity, proportionately to the cheapness of salt; the East Coast cure remains precisely what it was in [c. 1870] … the reasons being that the market seems to prefer or at least to be reconciled to a highly flavoured product which the curers can produce in their ancient way and with the minimum of care and charge, while the mere cheapness of salt cannot counteract the results as to taint of longstanding primitive and defective customs in catching and marketing…’ (MFB, 1915: 209-211)

To this day, the traditional processing systems continue to remain pathetically substandard. Any number of reasons – constraints related to economic conditions, infrastructure, awareness, extension services, land ownership, markets – can be discussed but, considering that an explanation fitting all facts to account for this curious indifference on the part of the fish processors to improve their product is still not found, blaming the failure on ‘longstanding primitive and defective customs’ may be just as valid (and easy) today as it was in 1915!

vii. Key constraints in the dried/cured fish trade

A. Constraints related to procurement

The constraints related to procurement of fish for processing are largely the same as those described for local fresh fish trade and are not repeated here.

B. During processing and storage

It has been said that reduction of losses at various stages in traditional processing chains has an automatic multiplier effect on earnings, and there is enough evidence to indicate that this is true. In technical terms, traditional fish processing leaves a lot to be desired. Issues such as the quality of raw material used, the location of processing and storage areas, hygiene and cleanliness in the processing areas, quality of processing equipment and tools, methods of processing, storage and packing have all been the subject of debate for a long time and continue to remain so to this day. It is not the intention to describe all the major sources of losses, which have been discussed thoroughly by a number of publications, the most significant of which are the outputs of two DFID-funded post-harvest fisheries research projects that worked partly in Orissa (Ward, 2000; Esser et. al, 2003). Some key constraints in the processing chain are:

i. Lack of access to basic necessities for processing operations, mainly clean water for washing and brining purposes and salt for curing. Most fishing villages have major problems in obtaining enough water for drinking and cooking purposes, it is clearly unreasonable to expect the processors to use good water for processing. But the result is a poor quality product with low shelf life, unappealing to consumers and a health hazard too.



ii. Poor and unhygienic processing and storage conditions add to the damage caused by natural factors and increase losses. The fact that the sites used for processing are generally on common property lands mean that the processors control over the general hygiene and cleanliness is limited. As villages expand and are surrounded by new developments like industrial growth, tourism and ports, there is less space available for drying of fish, with the result that the fish are dried in crammed and often unhygienic conditions.

iii. Traditional operations may be adversely affected by factors such as monsoon rains, insect infestation and inadequate processing, storage and transport infrastructure. Infestation losses occur throughout the year, but more significantly during the monsoon period as a result of heightened blowfly activity. Infestation losses could be so high that they could effectively wipe out the entire working capital of a processor in one cycle, and so frequent as to be considered a serious problem by the processors. Measures taken by the fishers to reduce losses include using insecticides and passing losses on to the next buyer in the chain by shortening the processing time. Such measures have negative implications for both processors and consumers.

iv. Transportation cost and risks: Absence of transport systems to cater to the needs of the fish processors from even large production centres like Puri is a major handicap. For the processors who sell their fish in weekly markets, the expenditure incurred to transport their fish to the markets is often more than their share of profit. Moreover, the long journeys involved often expose the dried fish to various hazards en route and increase losses. Traffic jams, bandhs and repairs to the trucks have been noted to be the frequent cause of delays in the product reaching distant markets like Nakkapalli in time for the weekly market, thus wasting a journey for the women. The high cost of transport is a major reason why no processor is ever willing to carry their product back to the village even if that meant selling for a loss. The problem of difficulties in transport is reflected most outstandingly in case of dried fish being sent to the north-eastern markets. The journey is hazardous and, going by the experience of Oriental Dry Fish Industries (B C Pattnaik, pers.comm.), very uncertain and is the biggest stumbling block in making this lucrative trade channel viable and sustainable.

C. Constraints related to trade

i. Arrival of material from other areas: During the 1990s, even as the dried fish from Orissa found new markets outside the state, those from other states – Gujarat, Andhra Pradesh and Maharashtra – found markets in Orissa. To the fish processors of Orissa, this has been a major shock not so much for the competition that the new products offered to theirs as for the drastic upsets the new arrivals have caused to the market prices. If the information of a few truckloads of fish from another area arriving in the market arrives sufficiently early, the large-scale traders wisely decide to keep their product off the market until the next week or take it to another market18. However, for the hand-to-mouth medium-scale processors, who cannot afford to spend more money either for transport or for storage of their product and would need money for the next cycle of operations in any case, this is unaffordable, so they end up losing badly.

ii. Poor market conditions: The absence of the government control and supervision at the markets is a serious handicap that affects all processor-traders adversely. This has allowed

18 Sometimes, they also take advantage of the slump in prices caused by the new arrivals and purchase large quantities of fish which are stored in small sheds constructed for this purpose at major markets like Nakkapalli.



the proliferation of vested interests at the markets leading to exploitation of both processors and buyers. The lack of good storage systems at markets is one reason for resorting to distress sale. The location of the markets in the open has been cause of serious losses when rains lashed at the product and spoiled it beyond recognition. Recently, a few sheds have reportedly been constructed at places like Humma, but they are neither sufficient nor address all the needs of the processors.

iii. Hand-to-mouth operations: For the medium and small-scale processors, each cycle of operations has to be paid by the returns from the previous cycle and failure to sell the product from previous cycle – for whatever reasons and at whatever cost – often means a bigger hardship than the losses incurred from a processing cycle. Inability to sell their product for reasons beyond their control – cyclones, transport strikes, etc. – would invite taking loans from moneylenders and getting deeper into the debt trap.

iv. Individualised trading: When the medium-scale processors set up their business at the market individually, the small heaps that the fish generally make do not attract the wholesalers who are in need of bulk supply and try to avoid procuring from many small traders as much as possible, preferring instead to buy from few large suppliers. When they do find good quantities of fish with some traders, they pay a much better price than that the other buyers will pay. For instance, on a September day in Nakkapalli market, the average price paid by a wholesaler from Orissa for bulk purchase of salt-dried sardines worked out to Rs. 34, while the prices earned by the selling the same to smaller traders on the same day fetched an average of Rs. 24-26 a kg, which, considering the quantities of product sold, makes for a significant difference in income to the producers. The other constraint with individualised transactions also is the lack of bargaining power with the wholesalers. The same wholesaler who pays a good price to bulk supplier offers a cheaper price (per bag of fish) to a smaller trader, who generally complies without hesitation.

v. Risky credit-based market transactions: The medium and small-scale traders insist on cash payment at the time of sale, while the large traders often sell the fish on the understanding that the agreed value is paid within a mutually agreed timeframe. Obviously, credit transactions are between the people who know each other well enough, but frequently, the local agents at the market act as intermediaries in arranging such credit-based sales. There are instances of large-scale processors losing heavily when the trader who bought their catch failed to turn up at the market forever or paid only a fraction of the sum they owed.

vi. Intermediaries fleecing processors and traders: There are many market intermediaries at the traditional fish marketing centres, who are literally nothing more than ‘middlemen’ in the literal sense of the word and their role in the business often stands up to the stereotype. They act as via media between the producers and the traders (who often do not speak the same language), collecting a sizeable commission from both sides for the service. They are capable of, and often do, much mischief; the processors are aware of this, but cannot avoid depending on them lacking proper systems of weighing, pricing and supervising.

vii. Preference for fresh fish among consumers: There has been a marked change in consumer preferences towards fresh fish. Kalavathy (1997) notes that home demand is shifting increasingly towards fresh iced fish and away from the traditional processed products. Demand for species such as Indian mackerel, ribbonfish, threadfins, butterfish, jacks and crevalles has moved from processed to fresh form. Interviews with traders also indicate that people preferred fresh fish over dried fish and in some places like Pentakota, making processed fish has



increasingly come to be seen as a measure of last resort (this does not apply, of course, to the dried fish trade to the ex-state markets).

A summary of the features of traditional marketing systems

Subsistence-oriented evolution

An important feature of the traditional marketing systems is that, to begin with, the artisanal fisheries were not organised around markets. The fact that artisanal fishing involved little recurring expenditure, made use of an open access resource (which may have been turned into common property in due course), and provided some income besides fish for the producers’ consumption were the reasons why it was undertaken by the fisher communities, arguably some of the poorest in the country. Income from fishing was low, but it had never been high in any case; if it had been, capitalistic elements would have seeped in and marginalised most of the artisanal fishers or at least reduced their access to the fish much earlier than they actually did. In a sense, this subsistence orientation – which, one must admit, was more a necessity than a conscious decision – was what allowed so many people to make a living out of the sector.

Put simply, there were enough fish in the sea that the fishers could catch with few or no constraints and without much investment and they were willing to be satisfied with what little they could earn: while fishing did not yield big income, it did not leave them starving either. Thus, at a time when preservation and transport facilities were poor to non-existent, the production systems were largely non-monetised and the marketing systems were rudimentary, the producers were satisfied with keeping a part of the catch for their consumption and selling the rest for whatever it might fetch, so long as the returns at least ensured a subsistence wage. As Paul Alexander (1995:193) suggests, the fish that went out of the village was a surplus after the consumption needs of the producers were met.

This is not to say that the fishers were not commercially inclined or disdained profit (as the organisation of dried/cured fish trade clearly shows), but their primary focus was on meeting subsistence needs. This factor accounts for the reluctance of the fishers to invest in newfangled inventions, however lucrative they might look. This also means that marketing was integrated into a range of other concerns which do not often make a purely economic sense19.

Rural orientation

From the available evidence, it is clear that fishing on the east coast of India was a largely rural activity and that the traditional marketing systems strove to meet a rural demand. In Orissa, a majority of the fishers continue to reside and operate in largely rural settings and even the presence of a number of traditional fishers in urban areas like Puri and Paradeep was the result of in-migration in the last half century, while those in Balasore had originally been agriculturists 19 To cite just one example, let us observe the number of people who congregate around the catches a boat brings to the beach. Closer inspection will reveal that more than half the people have no intention to buy fish; they are there to cadge a few fish for the night’s meal and they pick and choose what they want under the indulgent eyes of the fishermen. The boys are more audacious and pinch a fistful of fish and run off even as the fishermen curse them roundly but this is no more than a symbolic gesture for all the response it gets. “Out of the day’s catch, fishermen reserve some quantity of fish for giving charity … on an average this forms 18.2% of each working fisherman’s share in the total catch.” (Census of India 1961, Village Survey Monograph: Mofus Bandar, p. 86).



who moved into fishing only secondarily. Thus it was that the systems of fish production, processing and trade were geared towards catering to rural markets. And the rural markets were, almost by definition, small, informally structured and allowed only small margins of profit. The main consumers for the fish also came from the predominantly poorer sections of the community and their capacity to pay a premium for better fish was necessarily limited. The traditional systems of marketing developed and functioned taking this factor into consideration.

Short market chains

A number of factors – perishability of fish, poor preservation and transport systems, alienation and marginalisation of the artisanal fishing communities from the mainstream (more so in the case of southern Orissa, where the fishing communities were culturally, linguistically, socially and economically a distinct group from the majority community) and lack of demand – ensured that fish marketing was confined to a short radius from where the fish were landed. The market chains were necessarily short. A concomitant adaptation was that the fishers and the traders learned to build losses – physical, nutritional or economic, which are endemic in the fish marketing operations – into the economics of operation and learn to live with them. The so-called conservative nature of the fishers when it came to adapting new technologies stems from this factor: loss reduction necessarily involved some investment in terms of money or effort and considering the conservative nature of their markets, which operate on small margins in any case, the fishers are sensibly averse to taking risks.

Informal operations

A key feature of the traditional marketing systems is their informal nature. The systems, structures and processes – even the processors themselves – did not stick to a particular pattern of behaviour all the time and tended to be as flexible as the system allowed them. This is largely a reflection upon the nature of commodity they were dealing with: fish. The multi-species fisheries with seasonal variations in availability of catch in terms of species, size, quality, quantity did not allow too much of a structured organisation and the fish markets developed accordingly20. Demand and supply fluctuated wildly from time to time and from area to area and to succeed, one needed to feel free enough to take losses almost as frequently and joyfully as profits. Illiteracy added to the informality; weights and measures never could take a firm hold on the fish trading systems, and they still haven’t, although the apparent informality that allows the usage of bamboo baskets and net bags and stones as units of measure can often be deceptive.

The informal structure of the markets also allowed a number of different stakeholders to take part in the transactions and make a livelihood out of it. Obviously, many of these features of informality also brought their own share of problems, but these were not quite as serious as they would become later and were – like the losses – largely accommodated in the systems.

20 “Due to the instability of income, the (main Telugu fishing castes) do not have a rigid stratification of the groups on economic basis” (TCRTI, 1965: 79).



Prominent role for women in marketing

The fishing villages were often physically located away from the neighbouring agrarian villages and it was necessary for the fishers to take the fish to the markets themselves. This was something that the men were clearly unwilling to do because they were often too tired after a hectic fishing trip to undertake marketing of their catches as well. The fact that the men led an aquatic existence for the most part of their working time required that the women took on an economic as well as a managerial role. Traditional fish marketing systems thus came to be dominated by women, who constantly explored new markets, travelled great distances to sell their product and developed systems and strategies to cater to a wide diversity of consumers. Besides, they were also managing the household in the absence of the titular heads (i.e., the fishermen) and ultimately held the purse strings in the family (see Bavinck, 2001). Their predominant economic function assured them a special place in the household as well as at the community level. As Schömbucher (1986) notes: ‘These two complementary spheres in the economic organisation (production vs. trading) have led to a high degree of economic independence among women’, and attributes the relatively high number of matrifocal families in the fishing communities to this independence.

Limited role for credit

Fish processing was one of the first activities that involved a recurring need for ‘working capital’ – for buying salt, packaging, transport etc. Other production related activities – including fishing – involved little or no recurring expenditure. But, being a seasonal activity, which was subject to fluctuations from year-to-year, it is possible that credit always played a role in the lives of the coastal fishers. But the most widespread source of credit appears to have been in the form of ‘hand-loans’ – small amounts borrowed from friends, neighbours and relations for emergency needs, to be paid back without interest whenever the borrower could repay. In fact, a majority of loans in the fishing communities fell into the category of hand-loans, and a sizeable number of them involved lending kind – generally in the form of foodstuffs.

Documentary evidence dating back at least to a hundred years shows that the fishers had habitually borrowed from Sowcars, who generally belonged to the majority community in the area, but the transaction did not involve pledging fish catches to the Sowcar, who was not interested in fish in any case. The local processors often entered into monetary relationships with the producers in return for obtaining assured supplies of fish, but the nature of these relationships was tempered by others: in prolifically endogamous groups like fishing communities, everyone was related to everyone else in a number of different ways. The scale of operation of the processors does not appear to be so high as to give them a freedom to exploit the producers, or vice versa. That the transaction often involved the buyer paying the going market price for the fish they had bought also shows that the advance acted only to guarantee their supplies and little else. There is no evidence that the processors themselves had ever received an advance from their customers – which continues to be true right to this day.

In summary, one could say that, in the traditional systems, credit was not a means to control marketing systems. That would come later, after the arrival of modern marketing systems, which will be discussed in the next chapter.



CHAPTER 3: Modern fish marketing systems

A key feature of the development of the modern fish marketing systems is the role that the State played directly and indirectly in fostering them. With the traditional marketing chains, apart from setting up of curing yards and supplying subsidised salt for processing purposes, it can be said that the colonial administration left the artisanal fishing communities well enough alone. It was not until 1950s that fisheries sector was ‘rediscovered’ by the Indian Government and this gave rise to many revolutionary developments over the next forty years, some of which are:

• Introduction of mechanised fishing vessels and modern gear materials during I & II five year plan periods (1951-60);

• Increase in the use of synthetic gear materials during the III five year plan period (1961-65); • Introduction of purse seining during the V five year plan period (1974-78); • Motorisation of artisanal fishing craft in 1979; • Substantial growth in the motorised artisanal fleet during 1985-96 (Devaraj, et al, 1997); • Chartering of vessels and joint ventures which began in 1984 (IIM, 1990); and, • Aquaculture development in the V, VI and VII five-year plan periods.

The modern marketing systems took shape in the 1950s and became consolidated by early 1970s in Orissa. The evolution of fisheries from a subsistence-based livelihood activity pursued by a group of largely poor and rural artisans into an urban-based, capital-intensive commercial industry earning sizeable sums of foreign exchange for the country involved a shift in: the varieties of fish harvested (from a wide range of finfish to a few high value species, dominated by shrimp); the preservation methods employed (from un-iced/cured to chilled/frozen products); the location of markets (from local to non-local and international arenas); the variety and numbers of intermediaries (from a few women at the village level to many male intermediaries at all levels from landing to export) and the terms of trade. It brought about changes in the relations between boat owners and crew; non-motorised and motorised producers; artisanal 21 and industrial sectors; producers and traders; men and women; rural and urban producers; and traditional and modern production & marketing chains. New areas of debate – food/livelihood security concerns vis-à-vis growth/foreign exchange needs; traditional rights vis-à-vis modern systems of access and control; and livelihood/foreign exchange/growth needs vis-à-vis environmental/resource conservation – also became heated simultaneously.

It would be neither possible nor appropriate to discuss here all the changes these developments have brought about in the sector and the discussion would be confined to the evolution and operation of modern marketing systems.

21 The meaning and usage of terms like ‘artisanal’ or ‘traditional’ has become much blurred and problematic as many intermediate categories appeared in every system of production and marketing, and wherever they appear in this report, they are meant to be taken in their most general meaning.



A. Export trade

i. Background

Two closely related, but parallel developments were instrumental in the development of modern market systems. The first of these was the launching of the First Five Year Plan at a time when India faced severe food shortages and mounting inflation. The First Plan emphasised rapid agricultural development so as to achieve self-sufficiency in the shortest possible time as one of its immediate objectives (Datt & Sundharam, 1998: 238). Increasing seafood production from the capture and culture sources became a major objective. In the 1950s, the signing of a tripartite agreement between the United Nations, the Government of Norway and the Government of India for setting up a Technical Cooperation Mission (TCM) began to give shape to this objective (Kurien, 1987) 22 . The Indo-Norwegian Project (INP) (1953-63) was the most significant programme arising out of the TCM because it was the INP which introduced many of the technologies that have characterised modern fishing industry ever since (Nayak in Sall et al, 2002). For instance, under the TCM, “costly equipment such as fully equipped fishing vessels, ice plants, freezing and canning equipment, fishmeal plants, nylon nets and twine, fishing hooks, diesel engines, winches and gurdies and a host of other items costing several millions of US dollars [were given away] at almost throwaway prices” (GFC, 1994), laying foundations of what would be called the Blue Revolution in the 1970s.

The second development had been the growing demand for Indian seafood in the international markets. Prior to this period, although many varieties of shrimp were caught by artisanal fishing gears like iragavala (a traditional trawl net) in the open seas, estuarine waters and at river mouths, it does not seem likely that they received any special attention. In Andhra Pradesh, for instance, tiger shrimp was being boiled and dried or smoked to make a local delicacy and many middle-aged housewives can still remember the shock they had received when they discovered that tiger shrimp was such a prized item abroad23. Many retired fisheries officers in Andhra Pradesh recount tales of how they were forced to dump huge quantities of shrimp into the sea for lack of market demand. The other varieties of shrimp were just dried and sold in the weekly market like other fish. The records from the period prior to the growth of export markets treat shrimp24 as just another species.

The point is that, prior to the explosion of international demand for Indian shrimp, it may have been consumed and even relished as a delicious foodstuff, but it was not exactly a prize catch. The demand for Indian shrimp in international markets paralleled India’s increased need for foreign exchange earnings for its modernisation programme at one level and with its programme of increasing production through improved technology at another. This congruence of objectives led to what could be called as the ‘globalisation’ of Indian seafood industry three decades before the word itself came into vogue.

22 GFC (1994) gives the US (and not Norway) as the third partner in the agreement. 23 There are parallels to this nearer home and closer to our times when a team of post-harvest experts visited some fishing villages in northern Puri district in early1990s and discovered that the fishers were throwing away good catches of cuttlefish into the sea. When they tried to explain to the fishers what waste of valuable resource this was, they were greeted by a bemused silence. It took less than a year before the market forces did their trick and the fishers were extolling the virtues of cuttlefish! 24 To clarify the names: shrimp were called ‘prawns’ until mid-1980s, when an international convention decided that henceforth, all marine prawns would be called as ‘shrimp’ and the name ‘prawns’ would apply to the freshwater prawns. Prior to this convention, shrimp denoted small or juvenile prawns.



An important feature of the shrimp export trade was that it practically started from the scratch, i.e., it was an entirely new system of production and trade with little relation to the traditional systems in existence then. A new fishing boat – the mechanised trawler– was introduced to target shrimp exclusively and efficiently. Although the mechanised boats operated gillnets in the initial stages, they soon shifted to trawling. And while trawl catches included a large quantity of bycatch, it was – and still is – shrimp that they were after and it was around shrimp that the economics of operation were built. In due course, brackishwater aquaculture came into existence, once again with emphasis on shrimp. The black tiger shrimp (Penaeus monodon) came to dominate fishing economy completely. John Kurien (1991, to cite just one of many) and Nalini Nayak (in Sall et al 2002, among others) provide critical analyses of the growth and development of the modern fishing sector – and its shrimp-centred evolution – in India.

The other important change pertained to preservation: use of ice became necessary to preserve shrimp until it reached the processing factories. The production and distribution of ice being as yet rudimentary, the fishers – particularly in rural areas – had to depend upon the traders for their ice supplies and access to ice came to determine the balance of power between the producers and the traders. In any case, it was not until mid-1990s that ice was used onboard the artisanal boats, which had until then preferred to keep their fishing times short to overcome spoilage.


Many new intermediate categories of people – some of them undoubtedly coming from very poor sections of the society – began to take part in the preparation, preservation, distribution and trade aspects. Commission agents, middlemen, carriers and transporters, truck and bullock cart operators, peelers and shrimp head-removers and processors, packers and handlers, exporters and processing plant operators, ice makers, sellers and crushers, besides technicians, crate and basket makers, insulated systems manufacturers and sellers found work at important fish landing centres, and even smaller fish landing systems came to boast at least a few of these categories of people. The more remote a village is from the nearest town, the more number of intermediaries it managed to bring into the trade. While it is partly true that a number of intermediaries ate into the profit margins of the producers, it is also true that but for the value addition by these intermediaries, the shrimp in some locations might never have reached the export markets. Moreover, even after deducting the cuts along the chain, the fishers do receive impressive returns and, as transport and icing systems become more accessible and competition between traders mounts, their returns grow well all the time.

Three categories of buyers for shrimp and other exportable items came to play an important role in the export marketing chain. These were:

i. Commission agents, ii. Independent traders iii. Company agents.

Each commission agent has an arrangement with a particular company that some times provides a soft loan to him in return for procuring shrimp from individual fishers on its behalf. The commission agent uses the money/inputs to lend to the fishers in return for their catches. The



advantage to the company in using an intermediary like the commission agent is that it does not need to employ people full time (and pay a salary) for the purpose. In villages that are remote and where catches are limited, it is not to the company’s advantage to employ a full-time paid employee for collection of shrimp. Also, the commission agent knows all his borrowers personally, so can ensure prompt repayment, whereas for the company it would be a risk to lend large amounts to fishers it hardly knows. For the fishers, the advantage with the commission agent is that he takes their product immediately after landing, thereby relieving them of all responsibility of carrying it to a distant market.

Over time, as the shrimp catches from the capture sector began to fluctuate, the companies have become reluctant to invest money on the commission agents. Instead, the erstwhile commission agents are encouraged to invest money from their pocket and bring the product to the company, which is willing to pay a higher price than previously. This is one reason why there has been a proliferation of independent traders in the villages in recent times.

The independent traders are local people, with enough money and experience to set up trading on their own, and their modus operandi differs only slightly from that of the commission agents. While they too extend interest-free loans to the fishers in return for their produce, their own source of funds is not from processing/exporting firms, hence they can bargain to obtain a better price by selling to whichever company is willing to pay them well.

The company agents differ from commission agents in that they are salaried employees of the company. It suits the company to have a regular employee to procure shrimp for them from important landing centres to ensure consistency, good quality, low cost of procurement and promptness.

The numbers of commission agents and traders obviously varies from place to place and from time to time, but what is certain about them is that in several villages, they are considered to be the most affluent section of the community. The commission agents and the independent traders are all generally men and some of them even hold influential positions in the traditional or modern systems of governance in a village. There can be a large number of commission agents in each village, although overt competition is avoided by forming local cartels at every level.

An interesting category of players in the export chain are the ‘resellers’. A majority of these resellers – generally women – are very poor and this occupation allows them to earn a living without having to invest money, because on most occasions, they collect money from the buyer

Producers

Commission agents

Independent traders

Company agents

Processing factory

Export Company



before making payment to the fishers. Their role is confined to participating in the auction, buying fish and handing it over to the traders in return for a commission. Women in Chandrabhaga-Konark often double as fish processors-cum-commission agents and claim that the commission they get is often more than what they would have earned from processing. As indicated at other places in this report, there are quite a large number of very poor people like these resellers who are making a living using the small openings that they found in the current market systems. While, in strictly economic terms, they may not be adding much value to the market chain, it is difficult to pass judgement on the usefulness or otherwise of their role based upon economic criteria alone.

iii. Marketing system a. Procurement

The commission agents and the independent traders operate from their ‘barapas’ (a corruption of the Hindustani ‘Baraf’, meaning ice; so called because these makeshift sheds are used for storing fish/shrimp in ice until further transport) which are the local collection centres for shrimp and commercial varieties of fish. Ice is generally obtained from the company to which the trader-middlemen supply shrimp and is stored in insulated iceboxes at the barapa 25 . Shrimp are procured at any time of day or night and kept stored in the iceboxes until they could be carried to the company processing plant either by the traders themselves (if small quantities are to be sent) or by the company transport (when sizeable quantities are sent).

In the artisanal sector, shrimp are carried to the ‘barapa’ by the fishermen, where the catches are weighed before icing 26 . The commission agent pays a portion of the money owed to the fisherman immediately, but the final payment is generally made at the end of the week on a stipulated day when he receives his money from the company in the town. The commission agent keeps 10% as his commission (although the fact that often he is the only one who knows how much he has been paid by the company helps him to keep more than his rightful share). In larger landing centres, the competition amongst the commission agents for shrimp ensures that they generally retain only their due and pass the rest to the fishers – otherwise the fishers could easily change agents. Independent traders, on the contrary, pay the fishermen immediately or as soon as they sell their shrimp to a bigger trader or to the company directly. But the price paid to the fisherman has no relation to what the trader was paid by the company – they agree upon a price when the producer hands the catch to the trader and that is what he will get if the trader makes a profit. If the company pays less than what the trader promised to pay the producer, the trader immediately makes a cut in his payment to the fisherman.

The independent traders and the commission agents procure both from the boats that they have advanced money to, as well as from those that do not have any such obligations. The independent traders in an area – or even a village – often form a hierarchy of their own, with one

25 Associating with particular barapas is not just a commercial proposition, but implies affiliation to a whole set of other agendas as well. The way the barapas, which are primarily economic units of organisation, have played a determining role in the social and political spheres of life in Puri-Pentakota shows a big difference with the way social organisations in their parent communities (back in Andhra Pradesh) are structured and functioned. It is interesting to see parallels between Puri-Pentakota and the United States of America, the former colony of Great Britain. 26 The tradition of weighing catches and pricing them based on weight came into the southern zone fisheries only with shrimp, and to a large extent, it is still confined to shrimp and a few other varieties while the rest are bought and sold on eye estimation alone.



large trader buying fish from a range of smaller traders, with the procurement prices varying from level to level. A smaller trader can sell his shrimp to a larger trader if the quantities are low. The larger traders have provision for storing shrimp for one or two days if required, so in case of any difficulties in transport etc., the smaller traders prefer to sell to the larger trader albeit for a lesser price than would be obtained if sold directly to a company. The larger traders also obtain a better price from the company because of their ability to supply consistently good quantities.

While the wide network of commission agents in most coastal areas has the apparent benefit of providing the fishers with an option to sell their catches at the best possible prices immediately on landing and also in terms of giving them access to credit for various needs, the arrangements often hide a range of hidden costs. Naturally, this leads to the fishers showing preference to land their catches mostly in urban landing centres whenever good catches of shrimp and high value fish are caught.

In rural areas, the pre-processing of shrimp – beheading and peeling – are generally carried out near the landing centre or at the barapa because of the distances and times involved in transporting shrimp to a processing plant. There is an increasing reluctance on the part of the companies to allow the fishers to do the beheading and peeling operations, for two reasons. One, it is possible to ascertain the quality of the shrimp from visual inspection only when the head is intact and two, because the fishermen’s practice of keeping shrimp in ice or chilled water after removing the head will allow incursion of water into the body adding to weight and loss of flavour also. Whilst this helps the fishers in earning more for their shrimp, it means a loss for the processing company, whose loss is compounded by the fact that the shelf life of water-soaked shrimp is low. The new regulations governing export of shrimp to the EU also advocated the need for pre-processing sheds to be within the premises of the processing plants, but this is reported to have been amended to accommodate the conditions prevailing in Indian context (NRI, 2003).

b. Sale

Information on price development between different players is not easily traceable. Prices fluctuate all the time and are determined according to species, count and quality. Seasonality does play a minor role in deciding the prices, but considering the demand comes from abroad, the more important fluctuations in shrimp prices are those that have their origin in the international markets than in the domestic supply situation. The price developments in the first few stages from the producer to the company agent, with or without the mediation of the middlemen-traders, are ascertainable to a degree, but the company agents themselves do not the price at which the shrimp will be sold in the international market. The processing, packing, storage and transport costs vary from place to place and from company to company, and thus, even if the going international market price is obtained from MPEDA, it will not be possible to work out the margins to the company.

Apart from broad generalisations about the margins that each successive stage in the export chain keeps for itself before passing on the product, it is not possible – and often not known – how the prices change from one stage to the other. A price differential of about 10 percent from one stage to the next – from the company agent downwards to the producer – seems to be a valid



assumption. Obviously, this is a broad generalisation, which does not take into consideration the payment of advances for supply of shrimp at a fixed or a discounted price, which prevails in the relationships between traders and the fishers, but in bigger and better-connected villages at least, it is possible that the ‘market logic’ works in favour of the fishers in obtaining a reasonable price for their shrimp.

There are a few other factors that play a role in determining margins in the trade: the perishability of shrimp stipulates that factors such as the distance to the village, the producers’ access to ice and transport systems, the time of landing, the minimum duration of storage of shrimp in the village before it can be carted off by the company, and the total quantity of shrimp that can be produced in a village on average (obviously, the larger the quantity, the better the opportunity for realising a good price), have all a role to play in determining the risk that a producer or a trader will be taking and consequently the margins that he hopes to make out of the transactions. In most cases, having an onshore ice storage system (such as a large icebox), even though it is never used, has meant that the fishers could bargain for, and obtain, a better price, but the concept of an onshore ice-cum-fish storage mechanism has not gone beyond the experimental stages. The margins in trade are also masked under a range of questionable practices by the buyers – such as short weighing, gross deductions for ‘possible’ spoilage, etc. Company-owned processing plants are said to be more scrupulous in weighing and making payments, but as indicated the fishermen’s access to the companies is restricted. All these factors mean that, although the apparent difference in payment received by different stakeholders is marginal, the actual difference could be higher.

Sale in places like Puri-Pentakota is based on the weight of the shrimp, which takes the unit size of shrimp into consideration. Thus, 20-Count indicates that twenty numbers of shrimp make up one kilogram. The bigger the size of the shrimp, i.e., the lower the count, the better the prices offered. Thus, 20 Count shrimp is more expensive than the 40 Count and even more expensive than the 60 Count. In Ganjam district, the procurement is in ‘panams’, i.e., in numbers of eighty. Because wild shrimp catches do not fall into neat categories by weight, pricing according to count is often a contested system from the producer level to the exporter level. For other exported varieties like ribbonfish, sharkfins and crabs also, weight and size of the individual animal counts a lot in determining the prices paid. In most cases, it is the bigger specimens that fetch the best prices.

Generally, shrimp caught in estuarine waters or cultured in ponds receive a lesser price than those caught in open-sea fishing. The differences in price are for three reasons: one, the estuarine and culture shrimp are darker in colour, as opposed to the brilliant colours of the marine catch; two, the estuarine shrimp are of a poorer texture, i.e., softer and more delicate; and thirdly, the estuarine shrimp (not the cultured ones) are often not of uniform size – the marine shrimp, the fishers contended, are more uniform in size. For all practical purposes, the marine capture shrimp are in a separate class of their own.

All processing plants also double as exporters, but many exporters hire the services of an existing processing plant for processing their product on a temporary basis, a practice that leads to many problems. The processing plant has no control on the quality of the product brought into the factory and after it has been taken out. To the extent that the exporting firm sells it as their



product, there is no potential damage to the processing plant, but some times the processing plants allow companies without export licence to use their own certification, obviously in return for a fee. In this instance, the factory will be held responsible if anything is found wrong with the consignment in the importing country. Inability to find adequate quantities of shrimp to process throughout the year reportedly forces the processing plants to resort to such ploys to earn their maintenance costs. On the other hand, during periods of peak activity, when it is beyond the capacity of the processing plants (with the necessary certification) to process all the shrimp they receive, they temporarily hire some non-certified plants to do the work for them and export the whole consignment as having been processed at the certified plant.

Stages in the export of black tiger shrimp (Capture/Artisanal sector/Rural landing centre) (From ICM, 2002b): Capture and

storage onboard

Landing, sale and/or

transport to Barapa

Preparations at Barapa and transport to processing

plant

Receiving at the

processing plant

Processing operations

Packing & storage

Transport to Port & export

STAGES IN EXPORT

TASKS AT EACH STAGE

PEOPLE INVOLVED

• Keeping in ice or under shade

• Fishing crew including owners (@ 3-6 people per boat)

• Handing over catch to commission agent at Barapa

• Sale to middlemen traders in case of small catches or when no advance was taken

• Weighing for determining value according to size

• Boat owners • Auctioneers • Commission agents • Middlemen traders • Processing assistants

• Beheading shrimp • Grading • Washing • Keeping in ice in plastic crates according to species

• Transport by company van/Auto rickshaw

• Commission agents • 2-8 daily wage workers • Local women (sorting) • Ice sellers • Truck drivers and assistants

• Variety & size-wise segregation

• Washing with freshwater • Despatch for processing • Weekly payment to commission agent

• Supervisors • Salaried processing assistants (about 10 men and 25 women)

• Peeling • Grading & sorting • Slab packing • Freezing 1½ hours –400c

• Processing workers (mostly women)

• Supervisors

• Removal from freezers • Packing in cartons • Carrying to cold storage • Storing on wooden platforms

• Processing workers (both men and women)

• Supervisors

• Loading into insulated containers @15 MT/container

• Transport by trucks to ports for export

• Company-employed workers

• Truck drivers/assistants • Supervisors



More than 92% of the shrimp produced in Orissa is exported abroad or to other states (DOF, 1998:14). The main markets are USA, Japan, West Europe, Middle East and South East Asia (MPEDA, 1995: 2a; DOF, 1998:76). The high demand and prices for these products have stimulated an efficient marketing and transport system. The overseas exports are mainly sent through Paradeep, Calcutta and Visakhapatnam, but the exports from Paradeep seem to have been completely curtailed between 1992 and 2000, as a result of inadequate supplies. In 1996-97, Visakhapatnam handled nearly 75% of the total exports from Orissa.

iv. Scale of operations

Both mechanised fishing and shrimp aquaculture necessitate high capital investment and recurring expenditure as working capital, which has meant two things from the beginning: one, the new technologies were not accessible to the generally poor artisanal fishing communities; two, the concept of financial risk entered into the fisheries sector. Although there was good government support in the form of subsidies and loans for anyone interested in owning and operating a trawler or setting up an aquaculture farm in the initial stages, it was generally the urban-based entrepreneurial classes – frequently from non-fishing communities – who managed to acquire them. Thus, a new class of people with a different outlook and ways of functioning entered into the sector.

Most mechanised boat owners receive ‘advances’ ranging from Rs. 50,000 to Rs. 200,000 from commission agents (who in turn receive advances from the processing plants). Only a tiny fraction of the owners tend to remain independent for their own reasons, but this ‘independence’ is subject to so many other constraints that it is often just make-believe. The artisanal/motorised boat operators also have access to advances ranging from Rs. 25,000 to Rs. 50,000, and this is apparently available not only to the local fishing boats but also to those who come from Andhra Pradesh on a seasonal basis. The amount of advance varies with the boat, location and season, and it is said that about half the boats in any village take advances from the traders.

The money that a boat owner receives as advance from the trader goes to provide advances to the crew, engine repair/maintenance/replacement, boat repairs and repairing/replacing nets for catching shrimp. Working capital needs include cost of fuel and ice for each trip and are estimated to come to about Rs. 1,000 per an average trip by a motorised boat. From the returns, after the costs incurred for the trip are deducted, the boat owners receive two parts while the crew share the remaining part equally amongst themselves. Frequently, the cost of operations on an average fishing day is estimated to be at least equal to – if not more than – the owner’s share.

Once past the producers, the economics of the market chain become murky. That the investments into the trade are sizeable can be gauzed from the fact that a large scale trader in Pentakota purchases fish worth at least Rs. 50,000 on any good fishing day, and is constrained from buying more only by lack of more catches. The credit links that extend from the wholesale traders in the urban centres right down to the fishing crew on motorised catamarans make it difficult to work out how much money is actually rotating among the various people involved.



v. Varieties of fish exported

Shrimp is, of course, the most important export item. In due course, some varieties of fish have also joined the export chains. The ratio of fish to shrimp in the overall exports has been showing signs of increase. Some of the cheaper varieties of fish – most important amongst which is ribbonfish – have now begun to be exported in large quantities. Fish catches that had little or no value for the fishers – including Bombay duck, cuttlefish, soles etc. – have now become prized fish and fetch very good prices. In the late 1990s, the freshwater prawn, scampi (Macrobrachium rosenbergii) which has become the alternative species for culture purposes has joined the export chains, contributing over 200 MT to exports from the state during 2000-1 (Department of Fisheries, 2002: 76).

The trends in the export of different varieties are not known, but in 1992-93, prawns constituted 97.5% of the total exports abroad (DOF, 1993:16; DOF, 1998:72), but their contribution came down to 77% by 1996-97 as the tables below indicate. During the same period, the volume of exports more than doubled indicating an increased export of other varieties of fish from the state.

C om pos ition o f shrim p and o ther va rie ties in expo rts in 93-94

97%

3%

Composition of shrimp and other varieties in exports in 96-97

77%

23%

Shrimp

Others


The growth of shrimp industry, with the development of a mechanised and industrial fleet of fishing trawlers (for targeting mainly shrimp) in the 1970s and 1980s as well as brackishwater aquaculture (for culturing shrimp) in the 1980s and 1990s, has all along been on commercial lines for the simple reason that the demand for shrimp lay abroad, so whatever was produced had to be sold. The development of infrastructure to facilitate shrimp export – fishing harbours (mainly meant for the berthing mechanised fleet), ice and freezing plants, transport systems and road network to fish landing centres – and the consequent arrival of various intermediate links in the chain have not remained confined to shrimp or export trade alone, but also permeated or affected all existing systems of fish production and marketing besides giving rise to entirely new systems (the urban market chain for important finfish, for instance).

As a result, even the artisanal fishing operations made suitable changes to cater to the international demand for shrimp, particularly when it became clear that shrimp (which hardly constituted 3-4% of their total catches) was capable of yielding more than 60 percent of the fishers’ income and that the demand for shrimp in the international market was almost insatiable.



The fishermen found it sensible to target it more vigorously in their operations and the arrival of a new net – the trammel net (local name: ‘Disco Net’) – on the scene for specifically targeting shrimp helped in the process. In course of time, fishing became synonymous with catching shrimp. Ice arrived in the sector by late 1970s and was exclusively used to preserve shrimp for the next two decades, but by 1990, many FRP boats began to have inbuilt insulated ice-cum-fish storage systems onboard.

The impacts of such changes on production systems and the livelihoods of the fishers – in terms of increased investments and risk, rising indebtedness, monetisation of transactions, marginalisation of traditional players, etc – have been discussed by Johnson (2001) for Gujarat coast and by Salagrama (2002) for the east coast of India, so a repetition is avoided here.

The constraints faced by producers in the export chains are discussed together with those for urban chains towards the end of this chapter.

B. Urban trade i. Background

It has been reported that fresh fish from Ganjam coast were being sent to Calcutta as far back as 1915 (MFB, 1916), but it does not appear to have been a significant activity at the time. Still, the Calcutta markets have certainly exerted a pull on the fish from Orissa and often influenced the way fisheries in many coastal areas (especially in the north zone of the state) developed. However, the real impetus for the development of urban market fish trade in Orissa came in the early 1980s and this has continued to grow – in quantity, variety and geographical spread – right until now. Several factors contributed to the growth of the urban markets.

The first was, undoubtedly, the rapid development of ice and transportation systems catering to the shrimp export chain. Right from the beginning, the Indian Railways played a crucial role in the consolidation of the urban marketing chain, but as the activity became more established, trucks also came to be employed for transport of fish. Railways continue to play a major role in transporting fish from important centres like Puri and Balugaon. The contribution of Indian Railways to fish transport on the east coast of India was the subject of a study (Edin & Ydell, 1991).

The second reason for the growth of urban market chains may have been the enormous demand that has developed for fish in the urban areas themselves. There has been a rapid growth in urban populations in the 1980s and more particularly in the post-Liberalisation period of 1990s. The purchasing power of the urban middleclass consumers has grown significantly through the period and they have also become considerably discerning in their choices, showing willingness to pay a premium for good quality fish.

Yet another possible reason for the growth of urban markets for fish may have to do, rather paradoxically, with the increased availability of quality fish in the market. While exporting the shrimp, the traders saw an opportunity to carry a number of quality fish from the landing centres to the urban areas where good demand existed for them. In that respect, urban trade could be said to be a direct offshoot of the export market chain. As more fish became available, the markets



grew correspondingly and as the markets grew, more fish reached the market!27 In early 1990s, only three or four major varieties of fish from an important production centre like Puri were going to Chennai. By late-1990s, nearly all important commercial varieties of fish landed between Paradeep and Gopalpur were reaching urban markets, with Chennai attracting a sizeable percentage of them for its consumption. Calcutta, Mumbai and Delhi also received fresh fish from Orissa, and if more fish were not reaching these markets, it was for lack of supply than that of demand.

Similarly, within Orissa too, the urban demand for fresh marine fish has grown well and it has been reported that nearly all major towns in the state – Bhubaneswar, Cuttack, Berhampur, Rourkela, Sambalpur – consume good quantities of fresh marine fish. Within the state, there was an increase by nearly three times in the consumption of marine fish between 1985-86 and 1996-97 (Department of Fisheries, 1998), and though this was less than the increase in freshwater fish consumption, it does indicate a significant shift in the fish consumption. As a result of non-availability and/or high cost of freshwater fish, more people have begun consuming marine fish. The increase in the secondary and tertiary sector occupations in the state as well as the higher percentage decline in poverty in urban areas could be taken to indicate that the better purchasing power of the consumer attracts good varieties of fish into the urban areas.

Another factor stems from the government’s efforts to improve technological efficiency of the fishing systems, which was reflected in development of new offshore fishing crafts like the FRP beach landing crafts (BLCs) and motorisation of artisanal boats. These boats – for the first time – allowed the fishermen to go farther out into the sea than previously and catch more of the commercially important species like seerfish and sharks. The ease with which they could travel into the sea and back has been likened by many fishers as comparable to shifting, in one jump, from bullock cart to a motorcar. The availability of species-specific fishing gears also helped them to target their fishing operations better towards the valuable varieties. At the same time, the cost of fuel and engine repairs added to the cost of operations and the fishers had to maximise their returns in order to break even and make a profit. The fishers began to carry ice onboard – although insulated ice storage onboard came much later – and spent a longer time at sea catching the commercial varieties. Thus, Dahl & Forsgren (1988:30) were informed in 1987 by traders in Pentakota that nearly 90% of all BLC catches were sold outside the state, because they were too big and consequently too costly for the local consumer. In 2003, the figure appears to have remained at the same level, and the fishing economy of Pentakota continues to hinge largely on distant urban trade.


In the urban market chain too, traders and commission agents act as the link between the producers and the urban markets. Since no processing is involved in the activity, company agents are not seen in this chain; although the wholesalers in Chennai sometimes employ their agents to supervise their procurement operations at large landing centres like Pentakota. More generally,

27 It is possible that small quantities of fresh fish were going from Andhra Pradesh and Orissa to urban markets prior to this period, but the volumes of trade were limited both in terms of value and importance to the sector. It is also quite possible that the fresh fish chain developed simultaneously with the export chain, rather than as a consequence, but the point is that but for the increase in availability of ice and transportation facilities in the 1960s, which can be attributed to the growth of export chain, it would not have become as significant as it is today.



the local traders and commission agents take advances from the wholesalers in the urban markets which are used to finance establishing credit linkages with boat owners.

The trader-intermediaries come from the fishing communities (when they are local) but it is not rare to find many Tamil and Kerala traders controlling trade in many areas in Orissa. An important point to note is that the trader-intermediaries are all men. At places like Puri, a large number of women appear to compete with men for buying these fish soon after landing, giving an impression that women play a strong role in distant urban trade. However, closer inspection will reveal that the women, after purchasing their ‘quota’ of fish, carry them in baskets to the ‘barapa’ owner (who has funded them to make the purchases in his behalf) and hand their purchases to him after collecting their commission, their role in the trade effectively over for the day. There are many explanations as to why the barapa owner does not himself directly participate in the auctions and save the commission28, but suffice to say that the women’s role was marginal to the larger trading activity. Once past this stage, the trading activity is entirely controlled by men.

The traders in Pentakota and, to a lesser extent, Gopalpur are remarkable for the intricate and integrated way they had developed their trading activities. A major trader in Pentakota, for instance, builds boats and supplies them along with engines to the fishermen on credit basis (on the understanding that they would provide him all their catches as long as they are indebted to him; in other words, his ‘advance’ takes the form of a boat), and also provides a range of follow-up services including repairing and maintenance of their boat and engines (he owns an engine spare parts shop and a mechanic shed) which ensure that the fishers are constantly in need of his services. In addition, he owns the local ice factory and cold storage and an army of assistants to pack and transport his supplies to the railway station. Obviously, all these various services provide him with margins that are entirely independent of the profit he earns from fish trade alone! His enterprise is thus more or less self-sufficient and self-contained and the only thing he does not own in the market chain is the Indian Railways that take his fish to various destinations.


28 To wit, many of the traders are settlers from Kerala and Tamil Nadu and need the local women to act as a ‘front’; that the traders cannot afford to be at every place as the landings occur simultaneously even at the same landing centre and would need the women; that the trade is so organized that the trader-intermediary applies the same system even in the town where he operates; that the women were known to bargain more shrewdly than the men and also more trustworthy; and so on.

Producers

Commission agents

Independent traders

Wholesalers in urban markets

Retailers in urban

markets

Consumers



a. Procurement

An important feature of the urban fish trade that distinguishes it from the export trade is that it is largely the artisanal sector that caters to the urban demand. The mechanised sector catches some commercial fish varieties as bycatch and, over time, has begun to give adequate care and protection to them, but all the same, it is the artisanal sector that contributes the larger chunk of fish for urban markets. Within the artisanal sector, it is the motorised and the FRP boats that cater largely to the urban demand. The large-mesh and medium-mesh fishing operations that the motorised boats specialise in are particularly adapted to capturing these varieties.

Dahl & Forsgren (1988:30) mention that there were three kinds of systems by which fish are sold on the beach: Open auction is the most common method, and any trader can participate and bid for the fish. The fishers are not obliged to specific traders with credit linkages. In the second case, where fishermen take advances from the traders, the auctions still follow the same process, but the boat owner pays 20% of the net auction value as interest to the fish trader who provided him the loan. In the third case, the traders and the fishers come to an agreement with regard to prices, and no auction takes place at all. Prices are fixed weekly for different varieties.

In the region between Sunupur and Markapur in Ganjam district, all fish catches – including shrimp – in whole villages are pledged to the traders on payment of money up to Rs. 30,000 per boat (Alliah, pers.comm.). Under this system, the price of fish is decided on a daily basis in public, but the actual payment is generally done 6 months later. During this period, the fishermen could approach the trader for small loans to meet their daily needs, but the full amount due is never disbursed before six months. This kind of ‘bulking’ helps the traders with paying less than what is due to the fishers. When they make the payment, they pay according to the originally agreed prices only if they are lower than the going prices, but if higher, they calculate the payment due based upon the going rate. There are other complaints like short weighing or counting, which affect the profitability of operations for the producers.

Although about half the fish are bonded to the trader-middlemen, the rest are sold in open auctions on the beach. The unit of sale is eye-estimation 29 , as the fish are brought and unceremoniously dumped on the shit-laden beaches. While the auction is a straightforward business, the recovery of money from the buyer seldom is. A system called ‘Panikhiya’ locally, but which is prevalent in many parts of Andhra Pradesh as well, is widely prevalent in which the buyers are eligible to deduct and keep a percentage of the sum they had agreed to pay in the auction. There are many reasons to explain this curious – and confounding – system (see, for instance, XIM, 1991; Dahl & Forsgren, 1988), but often the fishermen and the buyers don’t see eye-to-eye on the accepted rate of deduction because there is no firm rule governing the Panikhiya arrangement.

The payment for open auction sales is regarded to be immediate, although frequently the buyers take time to make the payment. Unlike in the north zone, where the auctioneer has the responsibility to collect the money on behalf of the fishermen, the south zone auctioneer’s

29 Numerous experiments have yielded the conclusion that although eye-estimation looks to be a risky proposition, it is not so for the experienced players. In almost all cases, the unit price of a particular variety of fish – when calculated after the sale is concluded – never varies by more than 5-10%, indicating that the capacity to weigh the fish with eyes is an intuitive but largely valid mechanism.



responsibility ends with finding a buyer for the catch, so it is the fishermen who have to run after the buyers to be paid. When fish are sold to the trader/middlemen directly, the wholesalers in the urban markets send a demand draft to the trader on a weekly basis and the payments to the fishermen are made soon afterwards.

From a large landing centre like Pentakota, fresh fish are carried by headloaders (mainly women) to the traders’ godowns, where they are packed in ice, and transported by trolley-rickshaws to the station. Fish are collected at smaller landing centres like Arakha Khuda by the collection agents employed by the traders and the traders’ assistants will collect the catches at regular intervals from the collection agents (who receive a commission). When good landings are expected, big traders bring their own transport which – in the Chilika villages – is a boat, and ice.

b. Sale

The demand for fish from Orissa lies in centres such as Calcutta, Chennai, Delhi, Mumbai and other urban centres. Calcutta is the biggest consumer of fresh fish from Orissa (Dahl & Forsgren, 1988:37). Howrah fish market reportedly pays the highest prices for fresh fish in the country. Delhi is another important demand centre, and over the last decade has become very important for suppliers. With increasing immigration of population into Delhi, there is an ever-increasing demand for fresh fish. Madras is the third most important market for fresh fish from Orissa. XIM (1991:47) provides the destinations for different fresh fish.

Landing centres Species Destination Penthakota Seer fish

Sea perch White Pomfret Black Pomfret

Delhi, Madras Calcutta Delhi Calcutta, Jamshedpur

Gopalpur-on-Sea Elasmobranchs, eels, catfish, sardines, wolf-herrings, seer fish, mullets, mackerels, catfish, anchovies, perches, prawn, sciaenids

Andhra Pradesh, Madras and Calcutta

Balaramgadi Hilsa, catfish, sciaenids, seer fish, perches, pomfrets

Calcutta

Gadeisagar Hilsa, catfish, sciaenids, seer fish, perches, pomfrets

Calcutta

Paradeep Pomfret Catfish Eels Hilsa Seer fish

Bombay, Delhi, Madras, Calcutta Calcutta Hyderabad Calcutta Calcutta, Madras

Dahl & Forsgren (1988:36) give an identical pattern for ex-state disposal of fish from Puri:

Destination Fish Delhi Seerfish, pomfret Calcutta Sea perch, catfish, tuna and pomfret Madras Seerfish, pomfret Hyderabad Eel

The same authors also indicate that some catches were also going to Kharagpur, Asansol (both in W Bengal), Tatanagar (Bihar), Durg (Madhya Pradesh), Rourkela, Bhubaneswar, Cuttack and the coastal belt of Orissa.



The main market for fresh tuna, shark meat, sardines and mackerels in the country is Kerala and large quantities of tuna are exported from Orissa to Kerala (Frej & Gustafsson, 1990; Ogrelius & Larson, 1993; Pritchard et al, 1995). Pomfrets and small pelagic fish like mackerels have a good market in Mumbai (Pritchard et al, 1995: 45).

The collection agents or local traders have regular contracts with wholesalers and other commission agents at the destination markets. The baskets sent by each trader are marked carefully and the wholesalers use their agents to get them released from the railway station soon after arrival and carried to the wholesalers shed. Here fish are weighed and auctioned to the retailers, who pack their purchases in ice and carry them to their respective markets. The wholesalers or commission agents send the money due to their counterparts in Orissa weekly, but not without making a standard deduction (about 15%) on the total due to cover the losses due to spoilage in transit (whether there were any or not).

XIM (1991:Table 3.5) studied the prices of various species of fresh fish as they moved through different stages of marketing channel, and worked out the fishermen’s share in the final price obtained. Three urban markets within the state – Bhubaneswar, Cuttack and Rourkela – were studied for fish from three major landing centres in the state – Paradeep, Balasore and Puri – during the study.

Bhubaneswar Market Cuttack Market Rourkela MarketFishermen's share at: Paradeep Puri Paradeep Puri Paradeep PuriPanikhia30 30 35 Panikhia 33 39 Panikhia 40 47 Pomfret 32 60 Pomfret 27 50 Pomfret 40 - Borei 27 40 Borei 33 50 Borei 33 50 Kani 45 45 Kani 40 40 Kani 50 50 Telia 25 33 Kantia 25 40 Kantia 21 33 Miscellaneous 30 30 Shark 39 56 Shark 35 50

Sathiadhas (1998: 22) provides the fishermen’s share in the consumer’s rupee for selected varieties of fish in different states during 1996-97, but the list unfortunately does not contain the figures for Orissa. The following table shows the figures of Andhra Pradesh, some of which will hold largely for Orissa too.

Variety of fish Percentage share to fishermen in AP

Variety of fish Percentage share to fishermen in AP

Seerfish 49 Whitebait 22 Pomfrets 53 Lizardfish 36 Barracuda 24 Goatfish 42 Tuna 36 Threadfins 23 Shark 17 Croakers 27 Catfish 33 Silverbellies 21 Mackerel 26 Big-jawed jumper 44 Sardines 58 Mullets 38 Ribbonfish 36 Cephalopods 44 Rays 40

30 Some of the fishes were identified only by their Oriya names in the report.



iv. Scale of operations

Much of what has been discussed under this heading in Export Sector is relevant here too, so is not repeated.

v. Varieties of fish traded

The urban market trade is mainly centred on large-bodied fish like seer, pomfrets, jewfish, snappers, sea perch (Bhekthi), threadfins, barracudas, sailfish, swordfish and marlins, mullets, catfish, tuna, cods, eels, and hilsa etc. There are indications that more varieties are being included into this basket by the year. Over time, smaller fish like mackerels have joined the urban market chain. The fact that many of the quality fish – and even some of the fish which were not considered commercially important – go into the distant market chain mean that the local fresh fish traders and the processed fish sellers have either to settle for cheaper fish or pay a higher price for the fish that they have traditionally depended on.


The most important input for the urban trade is ice. Over the years, it has become clear to the fishermen that so long as ice is abundantly available, there are very few fish they cannot sell at an urban market and receive a good income. Mackerels which sold for Rs. 4-5 a kg in 1991-92 period in Pentakota fetch Rs. 2.50 or more per piece (or over Rs. 30 per kg) now because they are iced and carried to Kerala in insulated vans. Ribbonfish which were only dried and sold for very low prices are so important that even mechanised trawlers are reported to treat them with respect!

Transport between a landing centre and the nearest road or rail point remains a serious handicap for fish landed in many villages, but especially to the Chilika villages, which catch very good quantities of commercially expensive species for the most part of the year. The size of the fishing fleets in these villages does not encourage setting up regular transport to the mainland, and the time required to travel to the markets forces the fishermen to sell their fish at whatever prices the traders offer rather than forego their fishing for travelling to places like Balugaon. It is almost true to say that the dependence of the fishers in these areas on the traders is more for their transport and preservation facilities than for any financial investment as ‘advance’.

Most of the fish exported to other states is packed in bamboo baskets with Sal leaves to act as insulators (Dahl & Forsgren, 1988:32). Although plastic crates are increasingly used for fish transport in other states, bamboo baskets are still preferred in Orissa for packaging fish. The baskets come in many sizes and can carry from 20 to 250 kg (XIM, 1991:46). Fish are packed in alternate layers with ice and carried to the railway station for transport. At least some quantity of the urban trade supplies – particularly those destined for Kerala and Calcutta markets – are also being transported by trucks. Dahl & Forsgren (1988:33) estimate that for sending the fish to Delhi and Madras (distances of 1,800 km and 1275 km respectively from Puri) fish and ice are packed in 1:1.3 ratio, while for sending to Calcutta, which is 500 km away, the ratio is about 2:1 fish to ice. The baskets are stacked one above the other when being loaded into the train and the lower basket could often be carrying a weight of 600 to 1000 kg, indicating that a part of the catch may be spoiling as a result of pressure during transport.



Key constraints in the modern marketing systems (export and urban chains)

At the producers’ level, the export and urban market chains share many features and, at an operational level, often work as one, so it is possible to consider the important constraints in both chains together. The key constraints that the producers have with the current systems are:

i. Credit relationships with traders affecting the prices they receive for their fish in the short term and the profitability of operations in the medium-to-long run.

ii. The access to ice is controlled by traders, thus making the fishers dependent upon them and forcing them to settle for lesser prices than they deserve.

iii. Inaccessibility and poor transport systems reduce the fishermen’s bargaining power. On the one hand, they cannot take their products to the markets themselves and on the other, the number of traders willing to travel long distances is necessarily limited, thus the prices paid for shrimp at a productive fishing village like Arakha Khuda are at least 20% less than those paid for the same in Pentakota or Balugaon. When this is taken in conjunction with the other cuts imposed on the prices paid – for servicing debts, cost of ice etc – it can be seen that poor transport services cause a sizeable number of fishers to lose out badly.

iv. High production costs. v. Losses due to spoilage in production, transport and markets are so endemic that the

wholesalers in the urban chains and the processing plants in export chains habitually deduct 15-20 percent of the material obtained as being spoiled. Although some of these systems have shown improvements over the last decade, the tradition of deductions for spoilage has become strongly rooted and is reflected in the earnings of the fishermen.

vi. Price control by traders forming cartels, which effectively belies the hope that increased competition amongst the buyers would lead to better incomes for the producers. When the sale is made through middlemen, obviously the boat owner receives a lower price than if sold directly to the company. However, the systems are largely formalised in such a way that a fisherman cannot take his shrimp directly to the company bypassing the local traders. He is often advised by the company to take his catch to its agents in his village for sale even if that means loss of time and increased spoilage. Obviously, in villages where the commission agent or an independent trader has a monopoly of procurement, or when the villages are located far away from the processing areas, the prices the traders pay are arbitrary. The fishermen who have an obligation to sell his product to particular agents or traders can opt to sell their product to another buyer who might agree to pay a better price, but must pay a percentage (generally 10%) of his earnings from the transaction to his trader, which acts as an effective hindrance to selling catches to the outsiders. In any case, all traders and commission agents have cartels at every level which ensure that the fishers receive more or less uniform prices.

vii. Lack of market and price information is reported by many fishers to be a serious shortcoming in their dealings with the traders. If they knew how much their product was worth when it reached the final link in the chain (within the country), so the argument went, they would be able to bargain with the traders for a better price. While the lack of information is indeed a major shortcoming, it is difficult to see how the availability of mere information is going to be of much use to the fishermen, without them being in anyway empowered to address the other issues discussed here. Still, improved market information flows will still be a worthwhile area to explore further, particularly when considered in



conjunction with programmes to enhance the fishermen’s access to the more basic and important necessities.

viii. As the market chain lengthens, the share of the fishers in the final value of the product dwindles. For instance, in 1998, there was a difference of up to 30 percent in prices paid for shrimp between Puri town and Sahana village, which was hardly 30 km away in the same district, but had at least two additional intermediaries in the chain. Too many intermediaries in the market chain not only chip away at the profit margins that the fishers could reasonably expect, but also make the market chains fertile grounds for all kinds of mischief. Under the circumstances, it is possible that the intermediaries hurt not only the producers but also the processing and export industries as well as the wholesalers in urban trade. It is also not uncommon for the intermediaries to simply vanish from a place leaving many producers in heavy losses.

ix. Losses due to faulty weighing: As there are no standards for weighing or counting the fish or shrimp, many different systems are in vogue and every one of the systems is equally problematic. The system of ‘panikhiya’ – the buyer retaining a proportion of the agreed price under different pretexts – plays havoc with the sector as it is nearly impossible to decide upon any single standardised yardstick to see who is gaining and who is losing. When counting shrimp in Ganjam district, it is reported that the traders often resort to fraudulent counting under dubious pretexts. Thus, counting 2 panams as worth only 1 ½ panams to account for probable losses along the way to the processing plant (something that is considered to be a regular occurrence) is a way to pass on their costs to the fishers, if not exactly a means to make a bigger profit.

x. By far, the most serious and widespread problem arises with payments. The fishermen in Ganjam and southern parts of Puri (i.e., the Chilika belt) repeatedly complain that they seldom receive what they had been promised at the time of sale. The traders find a number of causes for not paying them fully. Many of the traders have other businesses and when they receive payment for their supplies, they choose to invest the money in these businesses instead of paying the fishers their due. As they delay payment to the fishermen for their supplies (generally blaming it on the companies or traders elsewhere), they are very forthcoming in giving loans at the usual high rates of interest to the fishermen for meeting their personal needs during the period of wait. When they finally make the payment, they never pay an interest for the period they have delayed, but they do not forget to collect their interest when recovering their loans! More generally, though, they simply keep the fishers to run around them for months and years on end before making them to settle for a fraction of the amount due to them. Many traders also suffer losses in the business and fail to pay the fishermen. The transactions largely depend on word of mouth with no binding contracts and written documents, so the losers cannot even seek to redress their grievances through a legal forum.

xi. Another problem that has gained prominence in recent times is the fluctuations in prices offered for shrimp. A majority of fishermen have no idea whether the changes are occurring at the international markets or whether it is a ploy by local traders to make money, but considering that the traders practically stop purchasing shrimp for extended periods whenever a crisis approaches, they assume this to be an outcome of factors beyond the traders’ control. Lack of direct links with the processing factories and market information allow the traders to get away with paying very low prices for shrimp even after the markets have recovered.



xii. Single-minded emphasis on shrimp. The mechanised sector developed as a response to growing international demand for shrimp and has remained largely concentrated upon shrimp, whereas the artisanal operations have largely become focused on shrimp. It has been a recurring experience in the fishing sector that an activity that grew around shrimp seldom climbed down to alternative species, in spite of facing dire straits in their single-minded pursuit of shrimp. Even in aquaculture, despite facing serious problems with shrimp culture, the brackishwater farmers would far rather allow the lands to go fallow than cultivate cheaper alternatives. One reason is that the trade is used to a particular kind of economics and finds it difficult to climb down; for instance, the outstanding loans of a shrimp farmer or a mechanised/motorised boat owner are such that they could be paid off only when the returns are sufficiently large. Another reason, applicable in the mechanised boat sector, is that historically, the boat crew had a bigger share of the finfish catches, while the owners took all the shrimp. To focus operations upon finfish now would mean negotiating with the crew who will be disinclined to lose their privileges and might want a disproportionately larger share from the catches. Then there is the remark that one large shrimp exporter once made: “Having dealt with the king of the trade, it feels insulting to negotiate with small fry.” In other words, the captain is willing to go down with the ship rather than accept the inevitable. What all this means is that when shrimp production or markets get into a crisis (which seems to be frequently), the systems are left high and dry.

A summary of the features of modern marketing systems

Benefits of shrimp trade

The economic benefits from shrimp trade to the fishing communities have been considerable. As shrimp catches increased, there has been a corresponding prosperity in the fishing villages (although its benefits were uneven and skewed within and between villages), which led to a transformation of the fishing activities and operations bringing them in line with the export emphasis. Notwithstanding complaints of exploitation, the fact was that until the traders came into the villages, several fish languished for lack of good markets. The prices that shrimp and, later, commercially important varieties of fish fetched were not just comparable to their local value. No wonder then that the fishers wasted no time to switchover to the new systems and perhaps for the first time, found themselves prospering. In many villages, a new class of nouveau riche entrepreneurs came up. Shrimp became a respectable commodity and it may not be far from truth to say that a fraction of that respectability rubbed off on the fishers or at least on their activities, going by the fact that many new entrants into the sector – either in capture or culture sectors – came from the elite sections of the society. Children of the newly rich families began to go to schools. Quality of housing, access to villages as well as fishing infrastructure improved. The improved access to fishing villages to take the shrimp out of the village and the frequent trips that the traders’ vehicles made to the villages opened opportunities for the normally isolated and inaccessible fishing villages to make contact with the larger world and access services that were otherwise difficult to procure. The interactions of the fishing communities with the external world improved and this has certainly raised their social consciousness.



Access to markets and information

The modern marketing chains led to the evolution of new marketing, distribution and trade networks because the existing systems were not sophisticated enough to take upon the various new functions that were demanded of them. As the export chain grew to accommodate four or more intermediate players between the producers and the exporting companies (depending on the location of a village and the infrastructure available at each location) the access for the fishers to market information declined and uncertainties increased. Instances such as the serious losses encountered by the fishers in late-2001 as a result of fluctuations in international markets, followed by the frequent scares about possible EU or US imposed sanctions on Indian seafood (relating to the quality of the products – presence of antibiotics or muddy smell in the shrimp – or the environmental concerns, such as the use of turtle excluding devices) can be devastating. But a majority of the people in the industry are not able to do anything about them because of the unpredictability of such changes and the level at which they are occurring. Obviously, the fishers are dealing with a system that they only partially comprehend and even less control.

Marginalisation of traditional players

Perhaps the most significant change brought about by the modern systems is that they took the marketing activity out of the hands of the local players, particularly women. The fishers could sell their catches immediately on landing to trader-middlemen who had already invested heavily on those catches and were equipped to carry them away in ice by insulated vehicles to the urban areas for further processing and export. Women might have found limited work as ancillary workers – in peeling, grading and chilling the catches and in carrying, weighing, packing and loading operations – but overall, their role in the overall scheme of things became marginal and incidental. This is further discussed in the next chapter.

Parallel to the marginalisation of traditional players has been the increased role of new intermediaries who came to play a domineering role in the production and marketing systems. Their investments made them de facto owners of the boats and it was they who decided when the boats would go fishing and what gears would be used. Their dominance of the economic aspects of life soon transferred into other areas as well and might have contributed to an overall weakening of the traditional governance and support systems.

Urban-centred operations

The mechanised boats could not land everywhere: they needed specially built berthing facilities, which thus brought the fishing harbours into existence at key locations. The support infrastructure – ice plants, freezing and processing plants, cold storages and distribution systems – too grew around the fishing harbours. The concentration of shrimp export trade in urban areas means that it has gained an urban orientation and even the production systems in rural fish landing centres have had to operate accordingly. Shrimp caught in rural areas have now to reach urban areas for marketing. There is a clear difference in prices paid to shrimp and the important finfish catches at the urban centres, so more fishers try to land their catches directly in the urban landing centres. Another advantage with landing at the urban areas is that the fishers can stock



up on their ice and fuel. In many cases, the shrimp entrepreneurs have shifted their base of operations to the nearest town and shuttle to their native village for business purposes.

As in export chain, the urban trade chain, because of its need to be located in urban centres which are well-connected to other parts of the country and have adequate icing and packing infrastructure and because it caters to an urban demand any way, is also urban-centric, drawing fish from the rural areas to the cities en route to their final destinations. Also as in the export chain, here too, the role of the women has become marginal to the main activity and involves no more than carrying fish from the landing centre to the packing shed and thence to the truck. Market information is at a premium even for the many intermediaries in the chain and any fluctuations in the consumer demand adversely affect everyone down the line.

Increased emphasis on credit

The growing demand for fish in the international and urban markets and the competition amongst the traders increased credit flows into the community. While the system of traders advancing money to the fishers in return for fish is an old tradition, the advances given for shrimp and finfish were a completely different story in that it played out in a number of ways other than meeting the seemingly innocuous purpose of helping the fishers in need. The role of credit in fish production and trade has been discussed in the next chapter, so is not described again.

Monetisation of transactions

An important change in the fishing sector with the arrival of export and urban trade on the scene was increasing monetisation of transactions. With the arrival of outsiders, the fishers could not afford to, or even need to, sell their fish on credit. With motorisation, the fishers also needed working capital – for ice, fuel and engine maintenance – for every fishing trip, which meant that they could not wait long to be paid. Even the local buyers had now to carry money in hand to pay soon after purchasing their fish. Monetisation of transactions also meant that many social activities – such as helping out with net mending or in fish processing – became paid jobs. A local fish trading woman had to carry money in hand to the beach be able to buy fish, and since her investment needs are constantly increasing as a result of competition, she has often to borrow from local moneylenders at very high rates of interest to fund her operations.

A summary of the key features of the modern marketing systems thus shows that there are many features that set them apart from the traditional marketing systems. A brief summary comparing the two systems is given below:

Traditional marketing systems Modern marketing systems Subsistence-based operations Capital-intensive, commercial transactions Rural orientation Urban orientation Short market chains with few intermediaries Long market chains with many intermediaries Limited role for credit Largely credit-based operations Informal operations More systemised channels of trade Prominent role for women Limited role for women Trade characterised by low margins Big trade margins



CHAPTER 4: Issues related to fish marketing chains in Southern Orissa

The following section deals with the context in which fish marketing chains operate in Orissa as well as the key issues relevant for undertaking any development strategy with the fishing communities on trade issues. Some of the issues that emerged from the foregoing chapters – such as credit and women’s role in productive activities – are elaborated alongside some new issues which are relevant to understand the sector and its complexity. Some aspects of the terms of reference that do not get properly reflected elsewhere too have been included in this chapter.

Resource constraints

Of all the threats facing the coastal fishing communities at all levels today, perhaps the issue of resource constraints – declining catch per effort as well as overall decline in fish landings – is the most serious and any intervention in any aspect pertaining to the life and livelihoods of the fishers must take this issue into serious consideration. That this problem is acquiring increasingly serious proportions is evidenced by large-scale migration of fishers into alternate occupations as well as to other places seeking work. For instance, a sizeable number of fishermen from Ganjam district have begun to migrate to Gujarat to work onboard the trawlers and many other migrants are reported to be working in the inland fisheries of Maharashtra and Andhra Pradesh. The fishermen of Pentakota are reported to be working seasonally in cashew-nut plantations. And the diversity of occupations into which the women have had to move as a consequence of dwindling availability of fish will require a full-fledged study in itself (see ICM, 2002).

The issue of resource declines however must be considered in the light of a number of developments because it is quite possible that what is considered to be a depletion of fish catches might actually be the manifestation of some other factors. For instance, the increased specialisation of fishing gears through the latter part of the 20th Century has allowed the fishers to target specific, commercially important, species of fish, ignoring many others – in other words, quality (in terms of market value) is given precedence over quantity. This might give the impression that there has been a depletion of resources, particularly among the traditional users of the species that are no longer targeted, whereas this might actually be due to not targeting them at all. It is also true that the single-minded focus on specific varieties has led to a depletion of those particular species.

The other factor that might contribute to the feeling is the capitalisation of fishing effort. Whereas the fishing operations in the non-motorised period largely involved no investment and so the fishers could take whatever they caught as their income, fishing these days does involve an investment that shows signs of increasing over years. What this means is that while a non-motorised boat could catch fish worth Rs. 100 and take it all as being its income, the motorised boat that caught fish worth ten times as much would still not have any income to show! In other words, fish catches might have remained constant (or actually increased manifold), but since the availability or decline of catches is perceived by the fishers in terms of the income that they get from them, it might be considered that the catches have dwindled.



A third possibility is also that more boats are chasing the fish now than previously, so while the overall catches might have increased, the per capita availability dwindled to unsustainable levels. Khasim (1999) indicates that the annual per capita production for active fishers in Orissa has remained constant between 1961-62 and 1996-97 at 0.5 MT per fisher, although the concentration of active fishers per square kilometre of fishing area increased from 0.3 to 2.4 during the period.

A review of the secondary sources on the status of marine fishery resources in Orissa yields a rather confusing picture. The two main sources of information – the Department of Fisheries and the Central Marine Fisheries Research Institute (CMFRI) – give figures that diverge widely. When these two sets of statistics are compared against the estimates of maximum sustainable yield (MSY)31, the conclusions that emerge are quite contradictory to one another.

According to the Fishery Survey of India (FSI) estimates, the maximum sustainable yield up to a depth of 200 metres off the coast of Orissa is 125,600 MT (Department of Fisheries, 2002:15). However, Department of Fisheries’ statistics through the 1990s indicate that this limit had been reached and even crossed during several years already. To add to the confusion, the Government of Orissa’s Ninth Five-Year Plan sets a target of 161,275 MT per annum from the marine sector, to be achieved by end of the year 2002 (GoO, 1997:13-6)!

The DOF’s figures for 1990-91 to 2000-01 are as follows (DOF, 1998: 62; 2002: 3):

1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-2001 95,026 119,376 103,925 122,892 123,199 133,462 156,081 124,329 125,935 121,086

A comparison of these figures with those obtained from the Central Marine Fisheries Research Institute (CMFRI), the premier fisheries research body affiliated to ICAR, gives some interesting results. The CMFRI catch figures for Orissa for the years 1991 to 2000 are far below those reported by the Department of Fisheries, even after discounting the possibility of overlap due to differences in reporting periods32. The following table shows CMFRI’s figures from 1991 to 2000 (MFIS No. 136; Sathiadhas, 1998:15; Khasim, pers.comm.).

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 44,524 47,622 62,281 47,745 43,108 53,591 45,657 44,227 58,329 84,622

Thus, going by the CMFRI data, one can argue that there is a need for increasing fishing effort still further, because the present utilisation is about half the total estimated potential. And going by the Department of Fisheries’ data, there is a need to stop any further increases in fishing capacity, if not actually to reduce the current fleet strength! So long as clear answers to this question are not provided, policymaking will continue to fluctuate widely between these two extremes and the fate of the fishers will continue to deteriorate.

31 MSY itself is a much contested concept both in itself as well as its acceptability to a multi-species tropical fisheries as prevail in the coastal regions of India. The other problem with the FSI figure is also that it was estimated a long time ago. 32 The Department of Fisheries provides fish landings by the financial year while CMFRI follows the calendar year



The evidence from the fishing communities – and the experience of watching fish landing over a decade-and-a half – is unambiguous: there has indeed been a reduction in fish catches. Several endemic species have completely disappeared from a region. Many, if not all, commercial fish catches consist of young adults or juveniles (See Luther & Appanna Sastry, 1993). Artisanal fishers need to travel farther out than previously (while the mechanised boats encroach into the inshore waters for the same purpose) and still, it is not uncommon for boats to come back to the shore without any catch after a full day’s fishing. Clearly, there is a need for some straightforward answers about the state of the resources, what factors are influencing it and how one might address them to make the seas green once again.

Global trade arrangements

Any project for working with and improving the livelihoods of the fishers cannot afford to ignore the international dimension of the sector anymore and the potential for changes that this can bring about in the lives of a large number of very poor people. DFID funded a research project on the effect of globalization and seafood legislation on poverty in India, which mainly dealt with the understanding the implications and the impacts of the 1997 EU ban on Indian seafood (See NRI 2003).

The latter part of 1990s witnessed Indian seafood industry at the receiving end of some serious measures by the two major importers of Indian seafood, the European Union (EU) and the United States (US), which included a ban on Indian seafood on quality grounds. The first serious action of this kind was the 1997 ban on Indian seafood by the European Union, which was lifted only after the Government of India pledged to undertake measures to improve the Indian seafood industry to levels acceptable to the requirements of the importing countries within a stipulated time period. This was easier said than done, because seafood export industry was already ailing from a number of other problems (fluctuating supplies, under-utilised capacity, mounting competition, poor support services), and while a handful of processing and exporting houses managed to invest the sizeable sums required for EU certification, many – in fact, a majority – of the processing plants simply closed down in Orissa33 . Knowing that each processing plant offered employment to a number of people, predominantly women, it can be assumed that a sizeable number of livelihoods are lost with their closure. It was also feared that some rural cottage industries like shrimp peeling sheds in Kerala – which provided employment to thousands of women – would be badly affected when the EU legislations demanding all pre-processing and processing operations to be carried out beneath one roof would come into force.

The EU Ban was followed by a frantic period when the industries rapidly upgraded their systems to the Hazard Analysis Critical Control Point (HACCP) quality control regimes, as demanded by the EU and the US, with technical and financial assistance from the government – in particular, from the Marine Products Export Development Authority (MPEDA). The Government of India also installed proper certification procedures for ensuring that the processing plants came up to the standards demanded by the EU.

33 The closure of the processing plants might have happened in any case. The EU ban as well as the Government of India’s insistence on upgrading facilities might, at worst, have acted as a last nail in the coffin and, at best, a coincidence. But it is still an indication of how stringent food safety regulations could affect the industry and even the poor people involved in the sector.



But it can be said that the 1997 EU ban affected only the processing and export companies, while leaving a number of people in the production and transport segments largely untouched. This is because a large part of the market chain – in fact, all of it, except the processing and the exporting companies – is in informal sector, spread over a vast area with dozens of intermediate players whose existence and functions were not even properly recognised.

Under the WTO regime, non-tariff barriers (particularly related to sanitary and phyto-sanitary measures – SPS and technical barriers related to trade - TBT) have already had a serious impact upon the seafood exports from developing countries like India. The issue is compounded by lack of clarity regarding standard setting and harmonisation, institutional arrangements and implementation of the standards, besides questions related to the capacity of the producers/processors to upgrade and even to the necessity of several of the measures demanded by the importing countries which are seen to be more to put obstacles in the way of developing countries than to achieve any positive results (see Matthew 2003; Mehta & George, 2003). The high cost of adaptation, the irrelevance of foreign standards to local conditions, the lack of timely and adequate information and consequent transaction costs, the difficulties in understanding the requirements as well as testing and monitoring them, the perceived lack of scientific data for specific threshold or limiting values and the uncertainty that arises from rapidly changing stringent requirements in overseas markets are among the difficulties identified by developing countries on application of SPS to trade (Mehta, et. al, 2002).

Thus, in spite of the cleaning up and upgrading of the Indian processing sector, a string of new threats that hit the industry in the post-1997 ban period – involving the presence of antibiotics or the muddy smell in the cultured shrimp, or the more recent suit in the US courts concerning dumping of Indian shrimp on the US markets (which brings in another non-tariff barrier – dumping practices under international rules for trade) – indicate that there is every likelihood that the international quality control and trade regimes will continue to play an important and influential role in the way the seafood is caught, processed and traded.

When shrimp prices in international markets fell drastically during September – November 2001, they hurt all producers equally. This was the period when the shrimp in aquaculture ponds were being harvested and the crops were sufficiently bountiful (and the white spot virus34 was not too damaging) for the producers to hope for a good income. This was also the season when artisanal fishing was picking up in many parts of Orissa and many boat owners had collected sizeable advances from traders to supply them with shrimp.

So when the international prices for shrimp crashed in 2001, many a farmer in Andhra Pradesh and Orissa found himself left with large debts. Trawlers operating from Paradeep fishing harbour and elsewhere simply stopped fishing for two months because good catches of shrimp were not even sufficient to pay for the fuel. When shrimp trade collapsed suddenly, some artisanal fishermen simply decamped surreptitiously and went back to Andhra Pradesh (leaving the traders in the lurch) while others were made to forfeit their boats until they could repay the loans (some of them are still repaying that old loan!).

In other words, the 1997 ban was only a curtain-raiser, and sooner rather than latter, all stakeholders in the sector are going to be affected by the changes in the global trade legislation as well as fluctuations. Until 1980s, this kind of fluctuations would not have been so damaging

34 White Spot Virus (Systemic Ectodermal and Mesodermal Baculo-Virus – SEMBV; also called White Spot Syndrome Virus - WSSV) was first described from Japan in 1993 (ADB/NACA, 1998). The virus affects all ages of shrimp and within a few days the mortality could rapidly reach up to 100% (Sudarshan Swamy, 2001). The damage it has done to shrimp aquaculture in India – as also in China, Indonesia, Malaysia, Philippines and Thailand – is incalculable and it still is the most difficult enemy that the aquaculture industry faces.



for two reasons: one, the potential to increase production from the capture and culture sources seemed endless; and two, the systems were not hyper-capitalised to an extent where it was unprofitable to fish unless a certain minimum income was assured. In other words, profit margins were sufficiently large to accommodate even major slump in the market prices. This margin of safety is no longer available to the fishers because much of it is absorbed to service the fishing operations or to service past loans.

As the number of such scares increases, so will the efforts of the Government of India and the seafood industry to keep up with the international standards because seafood is an important foreign exchange earner for the country. Moreover, there is no denying that a large part of the seafood industry is centred on export chains and particularly shrimp, so the impact of any disturbances in international trade could be serious for a large number of stakeholders. There are already moves afoot to make the Indian seafood legislation more stringent and to implement it right across the board (ICM 2002b). The potential negative consequences (while not denying that there may undoubtedly be some positive ones as well), should the seafood legislation be made more stringent, can be predicted from past experience.

In the short term, the impact is most likely to be on the producers – in both capture and culture sectors. As the market prices for shrimp slump, the producers will lose heavily and many of them might not recover. Although the impact of such measures would be felt by everyone in the sector, it will be the poorer producers who will be the most affected because of their inability to find investment for future operations.

In the medium term, more stringent seafood legislation will lead to a reorganisation of the processing and export industries which will come to be owned and controlled by fewer players, as the smaller players, who will be unable to find the investment or the markets to help them upgrade, will move out. The consolidation of the processing activity in fewer hands could mean reduced work opportunities in the processing activity. More importantly, this will mean more organised systems of production and trade. Already, many large processing companies have their own fleet of vessels and there is a likelihood that the capture and culture systems will come to be more closely integrated with processing and export systems. Considering that it is the informal nature of the fisheries operations that allow entry for some of the poorest people to make a living out of the sector, it is possible that the change to more formal systems would mean a loss of opportunities for a large number of people.

As history has shown, it has been the export markets that showed the way to the development and functioning of other markets in the country. Thus, in the long term, the legislations affecting the export industry will begin to have an impact upon the other marketing chains as well, forcing them to keep up or ship out. For instance, some Kerala-based firms have begun efforts towards streamlining the urban markets for fresh fish along the lines of the export trade and when this materialises, it is possible that many small-scale producers will have to undertake major changes to their current systems of production and transport. The generally gloomy situation in which most stakeholder groups in the fishing industry find themselves today does not allow one to believe that they will be able to upgrade their systems – with or without government support – to the required levels. When that happens, its impact on many categories of poor producers,



processors and traders, including vulnerable sections like women and old people, will be considerable.

One hopes these predictions will be proved utterly wrong35, but what is however undeniable is that an export-oriented sector like fisheries cannot remain immune to the international quality requirements and to the rapidly evolving new trade arrangements (under WTO, for instance), even if a large proportion of the people involved in the sector have only a remote, if any, link to the export market chains. Whether it is 11 September or California earthquake or death of a Japanese Emperor, they are all major disasters for the fishers of the remote coastal villages, which might never even have an inkling of what caused the changes that hit them so badly. And equally important is the fact that their capacity to stand up to the requirements in a changed regime is extremely limited. It should be the endeavour of any trade-related development programme to assess their potential for change in the light of changing seafood legislation and to begin enhancing their capacity to upgrade in a sustainable manner.

The importance of credit and ice to marketing systems

PHFP (Undated 6) deals with the issue of credit to small scale fishing communities in Andhra Pradesh and Orissa.

One important difference between the export chain and the urban chain was that while in the former, the fishers must sell their product to a middlemen or a processing factory, they had no need to depend on an intermediary in the urban chain because the fish could be sent directly to the markets, provided they could pool enough fish and were located sufficiently close to a medium-sized railway station. Considering there were many urban markets both within and outside Orissa which were willing to buy almost any quantity of the supplies, the smallest quantity that one could send being just a basket load, i.e., approximately 50-60 kg., which did not take too much trouble or investment to put together, the prospects for the fishers (or their representatives) to enter into marketing directly looked fairly positive.

In the export chain too, while the producers might not have the capacity to sell directly to the processing/exporting firms, it was clearly within their capacity to attempt to bypass at least one or two intermediate links in the market chain as the efforts of the South Indian Federation of Fishermen Societies (SIFFS)36 in Kerala have shown. When it is considered that the margins of trade at each intermediate level were at least 20 percent, it can be assumed that the benefits for the fishers if they would begin to bypass at least one link in the chain could potentially increase their income levels.

However, two major constraints dictated that things would develop otherwise: these are the firmly entrenched trader-credit linkages and the traders’ monopolisation of access to ice.

35 For instance, it is possible that the monopoly of shrimp in the export markets might be broken by some other variety – or varieties – particularly of finfish, which might not lead to such drastic reorganisation of the markets and might even open new opportunities for the poor. 36 SIFFS sets up marketing cooperative of primary producers who – by selling through the cooperative – bypass most intermediaries and sell directly to the processing factories. In many cases, the existence of a network like the SIFFS’ has meant an automatic increase in values paid to fish by local traders.



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Credit in modern marketing systems

Paying large advances to the fishers was a clever move on the part of the traders to ensure that the fishers could not easily repay the loan and so remained bonded to them. As soon as the urban trade gathered momentum, most local traders enhanced the amount of advances they provided the fishers on the condition that the important finfish varieties were included in the supply contract. It was expected that the production of seafood would only increase with more efficient fishing systems and that this investment would bear fruit in the long term. It also put pressure on the alternative systems in government or NGO or cooperative sectors to come up with equally large and unsustainable sums of money, and thus ensured that they would fail. It reduced competition from other traders and facilitated the formation of cartels amongst the traders. In essence, credit is a tested market strategy of hounding out the competitors from the field by under-bidding or over-pricing the product to unsustainable levels.

In due course, whether by design or by chance, there emerged a new class of businessmen in most villages whose wellbeing lay in keeping the existing trade linkages intact. Ironically, some of the people constituting this class were former boat owners themselves, who moved into fish trade as a result of a series of transformations brought about by the outside interest in shrimp and finfish.

The first of these transformations took place in the sharing patterns amongst the fishing crew. Gone were the days when a part of the catch was used for domestic consumption by the fishermen while the rest was carried by their wives to the markets for sale. Fish became too expensive to be consumed and pooling the catches helped to attract the attention of the traders in the boat’s – or even a village’s – catch and so the crewmembers changed over to a system of selling fish collectively and sharing the cash returns. The wives of the crew could not even buy the catches directly from the boat, let alone collect them as they had always done, because the men were not sure they would get a fair price if one of their wives bought the catch: it was better if the women participated in open auction just like anyone else and tried their luck. This must be the finest hour for neo-liberal economics, when the protectionist trade barriers which unduly favoured the fishers’ wives were removed and open market reforms initiated.

In due course, some of the boat owners, by virtue of their leading role in selling their boats’ catches, found it worth while to collect catches from other boats in order to make up the bulk. The increasing complexity of the marketing activities necessitated or facilitated some boat owners becoming trader-financiers and acting as a conduit between the remaining boat owners and the traders37. For the traders from outside, this arrangement was satisfactory because they could obtain their supplies from a larger number of boats with much less effort and save many other costs as well. It is thus possible that the traders encouraged some of the boat owners

37 It should be noted that, besides the boat owners, many wealthy or politically powerful people in the fishing villages also took to fish trade. When the traditional village elder system broke down largely under commercial pressures in the 1970s, the former elders found ways to accommodate themselves in the new political and economic systems.



to become middlemen, and even supported them in setting up basic infrastructure for collection and preservation of fish at the ‘Barapas’ that came up in most villages to act as collection point for fish catches.

The increased returns from fishing in the initial stages, coupled with substantial credit flows from the traders, encouraged fishers to invest in fishing very energetically. Of course, there were many compelling reasons to justify the proliferation of FRP boats and motorisation, but if it was not for the sense of confidence that the burgeoning seafood trade instilled in them, it is doubtful that the fishers would have invested so heavily. The traders encouraged the fishers and were generously forthcoming to lend for such investment. This meant that many boat owners ran up loans that were frequently much higher than their net asset worth. The investment made on an FRP boat with engine runs to about Rs. 150,000 – 200,000 depending on the quantity of nets carried on board and although a major proportion of the boats and engines are obtained with loans obtained under various government schemes (which are seldom repaid), a significant number also were funded with money obtained from the traders (which can seldom be avoided).

The traders paid advances to these boat owners-turned-fish procurers who in turn advanced money to many other boat owners for supplying their catches on a regular basis to their barapa. Each of these boat owners then advanced a part of the amount that he received as advance to the members of his crew. These credit relationships were further compounded by the social and political arrangements within villages and thus developed into a complex web of dealings, which entangled virtually all categories of fishers and traders. The advance systems thus bound a crewmember to his boat, the boat owner to the local trader-financiers (who was once a fisher himself), and the trader-financiers to the outside trader and so on. The advances soon reached astronomical proportions – going up to Rs. 40,000 per season per boat and each crewmember was taking an advance of up to Rs. 10,000: an amount that he would not be able to pay back for a long time and, going by the current status of fish catches, the long time appeared to be a very long time indeed. This naturally means that each player, not the least the large-scale traders themselves, is stuck in a relationship from which he cannot withdraw even if he wanted to.

The reckless abandon with which the quantum of advances from one level to another in the market chain grew has an apparent economic motive. As advances mounted, the share from fishing given to the crew declined – the share of the fishing equipment (boat and nets) increased to 50 percent of the total returns in order to pay for the maintenance of the boats as well as to service the debts that the boat owner had incurred. In places like Pentakota, the expenses for maintaining engines (which could work out to Rs. 20-25,000 a year) are spread to the whole crew although that does not deter the owners to still take their fifty-percent share. Many crewmembers have virtually become bonded labourers because their current level of earnings will never allow them to get out of a credit relationship with the boat owners (Balaram, pers.comm.). Some of them are paid a weekly wage of about Rs. 250 although the façade of sharing the returns from fishing is maintained, and the crew cannot demand for a better wage. Many crewmembers run away along with their families to places like Chirala in Andhra Pradesh to evade the credit link which allows the owners to pay a pittance for their labours.

Similarly, the price paid to the boat-owner by the middleman-trader declined; the commission paid by the trader to the middleman-trader declined and so on. The traders – who once provided



ice free of cost – began to charge for the service. With interest-free advances running into tens of thousands of rupees, none of the people who took an advance was in a position to demand for bigger shares. Often, the lenders were receiving much more than the interest due for the advances they had paid, which was an important reason why they allowed the advances to grow to such outrageous levels in the first place. The new owner-crew relationships redefined the traditional systems of sharing and the crew gradually came to earn much less share than they had previously done (see also Johnson, 2001; Gustafsson-Hall, 1994).

By late-1990s, the conditions came to a stage where the advance paid to a fisher could scarcely be recovered even in a good year and consequently, the loans began to be ‘rotated’ amongst the boat owners, though seldom actually repaid by the crewmembers themselves. The loan burden thus keeps moving from one owner to another and this is a relationship where neither the owner nor the crewmember is in a position to come out of. A similar predicament faces the relationship between the traders and the boat owners, with the outstanding credit being rotated from one boat owner to another at best, rather than ever being repaid fully. In Puri-Pentakota, it has been reported that several fishers, who were unable to repay the huge loans that have accumulated in their name, decamped surreptitiously with their whole families and resettled in Gujarat or in a non-traditional activity like reservoir fishing in upland Andhra Pradesh.

Increasingly, the producers find themselves having to find substantial sums of money to undertake a fishing operation or a maintenance exercise. An average fishing trip costs up to Rs. 1,000 and in a seasonal and uncertain operation like fishing, the owner has often to look around for loan to finance the fishing trip, meaning he is perpetually indebted irrespective of the status of fishing operations.

Thus, this complex web of ‘advances’ precluded any attempts by the fishers themselves to ever attempt sending the fish to the urban markets directly. There is a barrier to entry of new traders in the form of high investment, so much so the number of traders ‘servicing’ a village became fixed. In the face of serious fluctuations in the availability of fish from year to year and the ever-lengthening non-fishing periods in a year, it would indeed be a big risk indeed to antagonise the local traders to branch out on one’s own, knowing well that one would need the trader’s support to eke out a living during the lean periods. In a situation where credit was a livelihood strategy, it is not surprising that the victims of exploitation by the traders would be the last to want to get out of the clutches of their exploiters.

Ice and control of access to ice

Although a majority of boats got entangled in credit relations with traders, there were still a number of boats which managed to stay out of the debt trap. In Ganjam district, for instance, nearly half the boats were reported to be not bonded to any particular barapa (Alliya, pers. comm.). These fishers had the freedom to sell their catch in open auction on the beach or, if they were so inclined, to send the catch all the way to Chennai bypassing the intermediaries and retaining a larger chunk of the final price to themselves.



However, they were constrained by another problem: lack of ice. Ice had been in use in the export sector for a long time, but arrived on the scene in the artisanal sector only in mid-1980s and was the single most important item contributing to the growth of urban markets.

Even in areas where ice was not generally available, the traders and processing industries made sure to provide ice to their representatives for storing shrimp immediately on landing. At least initially, this was provided free of cost, because the factories stood to gain much in terms of quality (and thereby value) if their shrimp were iced as soon as possible after capture. Another important reason was that, by making ice available at practically no cost to the fishers, the traders were ensuring that no local ice plants could come up, because they would have meant that the fishermen’s access to ice would improve and with that, too, they might gain the upper hand in determining the prices of shrimp. For instance, during a study conducted at Arakhakhuda in 1999, it was found that traders coming from Balugaon sold a block of ice weighing 40 kg at Rs.20 whereas the ice available in the nearest ice plant (close to Brahmagiri) cost Rs.65 –100 for a 100 kg block. Transporting 20 blocks of ice from the latter source was estimated to cost around Rs.400 and bringing the blocks into the village from the road point would cost another Rs.10 per block, which made the cost of ice disproportionately high compared to that of ice brought right into the village by the traders from Balugaon who in turn bought all the shrimp and crab catches in the village. By keeping the price of ice as low as possible, it appeared, the traders were ensuring that the village would continue to depend on them (ICM, 1999a).

But by late 1990s, the traders’ fears proved to be baseless for two reasons: one, the marketing systems (combining credit and ice delivery to procuring shrimp) became too consolidated to fear any threat from local ice manufacture; and two, it became apparent (at considerable cost to a few bold entrepreneurs) that the scattered and seasonal landings of shrimp and other varieties in the coastal areas would never allow the economies of scale to work in favour of setting up ice plants everywhere38. In places like Pentakota and Gopalpur where ice plants had indeed come up in good numbers, they were owned or at least controlled by the traders so they had no reason to fear the fishermen anymore. Once that became clear, ice came to be provided on cost basis to the fishermen (operating both trawlers and motorised boats) and the commission agents, albeit at a subsidised cost39.

Ice – and access to it – thus became a power factor: in the equation between the fishers and the traders, the upper hand was of the one with access to ice. Ice was not merely a means of transportation of fish to a distant area; it was also a bargaining chip at the landing centre. If the fishers had access to ice storage systems, they could afford to wait until they received the best price for their product40. In order to avoid this, the traders frequently monopolised access to ice. Most ice plants had arrangements with the traders and would sell only to them: considering that the traders bought in bulk and regularly, the ice plants willingly acceded to their demand. The

38 The fluctuations in fish catches have also made it difficult for fishers to invest in insulated iceboxes and take to use of ice as enthusiastically as they would have wished; the number of insulated iceboxes sold to the fishing industry has remained pitifully small. 39 The way credit and ice were introduced by the traders into the fisheries sector shows a simple pattern: it is to subsidise a particular input until such time that the users get used to it and reach a stage where they cannot do without it, and then remove subsidies and make a killing. A less charitable view would perhaps suggest that this is the typical drug-pusher’s strategy! 40 The most interesting case study comes from Kanyakumari district where the mere setting up of a permanent ice-cum-fish storage system to be used by a cooperative of fishers on trial basis automatically raised the beachside prices paid by the local traders to an extent that the fishers did not have an opportunity to use the icebox even once in at least three years!!



fishers could perhaps buy small quantities of ice for carrying onboard or for some local trade, but if the traders smelled anything suspicious in their transactions, they could immediately shut down ice supply.

On the other hand, it has also to be admitted that, in spite of its appeal to the fishworkers, ice production could never reach anywhere near the projected demand for the simple reason that the demand was so dissipated along a very long, and often inaccessible, coastline. While a centralised location like Puri or Paradeep or Gopalpur might have been an ideal venue for setting up an ice plant, a majority of fishing villages were not so fortunate. The size of operations, seasonality of fishing activity, fluctuations in electricity supply, non-availability of water, difficulties in maintenance and many more reasons made setting up of ice plants in many areas an uneconomic proposition. The fate of the few that were set up near some villages like Arakha Khuda, only to be closed in due course, served as a warning to prospective entrepreneurs.

There has been very little, if any, interest on the part of the government to promote use of ice in the artisanal fishing sector. MPEDA had a programme to provide insulated iceboxes for carrying onboard the boats, but it was so far ahead of its time that very few fishers who acquired them had opportunity to use them. If the programme had been more vigorously pursued through the 1990s and the fishers made to use more iceboxes onboard as well as on shore, it is possible that sufficient demand would have come up for ice in many areas, leading to a more equitable distribution of access to it.

Thus, without ice, there were no iceboxes and without iceboxes, there has been no ice. The bottom line is that the producers are the losers because they could not even contemplate taking up urban marketing.

Women in fish marketing systems

BOBP (1980) discusses the role of women in small-scale fisheries of the Bay of Bengal. ICSF (1995) is a comprehensive four-part study of the women in fisheries in India. The analysis of market chains provided in Chapters 2 and 3 gives a picture of the role that the women have traditionally played in the marketing systems and how changes in the sector over the last fifty years have impacted upon their trading activities. Here it is attempted to consolidate the discussion on the role of women in the sector and fill any gaps that might exist.

Stages in women’s participation in productive activities

Three stages can be identified in the participation of women in productive activities in fisheries sector in the southern zone of Orissa. The first stage is characterised by their active involvement in the post-harvest disposal of catches and in the economic (and consequently social) organisation of the family and the community. This has been discussed in detail in the section dealing with traditional fish marketing activities.

The second stage is characterised by the women’s marginalisation from fishing related activities as trading became a male dominated activity with the emergence of export and distant market trade. Even within the households that have an earning male member, the ‘masculinisation’ of



fish trade has meant a significant loss in social terms for the women, both at the household level as well as the community level. From being the managers of the family purse, they have come down to depending upon their husbands for meeting even the most basic needs. This marginalisation becomes apparent when it is considered that all main players in the export and urban market chains are men.

The third stage is when extended periods of unemployment in sea fishing activities have forced the men to depend on their women to earn the family subsistence needs. The women have once again begun to play an important economic role in the family, but their traditional activities have undergone a radical change. Whereas the earlier period of dominance was characterised by the women ‘sharing’ in the economic activities with their men, now it is a burden in that they have to earn single-handedly enough for their household needs for extended periods. Or, as one woman in Pentakota put it, “Earlier, it was a choice; now, it is a compulsion”. This new role of women has been described in ICM (2002a & 2003).

Current role of women in fish marketing chains

In the local fresh fish chains, women continue to play an important role, although the market chain itself has shrunk over the years in terms of its economic importance to the fishing communities at large. Although, within the market chain, bicycle fish vendors – all men – do compete with the women at the landing centre, their own economic condition being no better (and in many cases even worse) than the women’s, this does not pose as great a threat to the women as the competition from the other market chains. However, there are indications that some of the men from within the fishing communities have also begun showing interest to take up local fish trade, which might become an area of concern as far as the women are concerned.

Similarly, in the traditionally processed fish chain, it is not so much the competition from within the chain as that from other marketing chains that poses a threat to the dominant position traditionally held by the women. The fact that many women have now begun seeking opportunities outside the processing sector indicates that this activity as a whole has come to be threatened. As long as the traditional market chains remain constant, there do not appear to be any specific threats to the role of the women in the activity. However, when dried fish begin to go out to distant markets (in northeastern India or even abroad), there is a likelihood that this market chain would attract the attention of men and downgrade the role of women to wage earners in large-scale operations as happened in other market chains. The clearest example of this comes from Pentakota itself, where the four major processor-traders dealing with the markets in Assam are all reported to be men.

In the export marketing chain, the role of women has been largely confined to being wage earners. There are a few women doubling as commission agents or ‘resellers’ at many places, but the quantum of shrimp they handle appears to be very small and likely to come down even further. The other important function of the women in the export sector is in the shrimp processing industry. Shrimp processing is a very manual operation involving skills, concentration and stamina. Each processing plant employs a contingent of over 100 people – mostly women – who are involved in the laborious task of washing, sorting, grading, beheading, peeling, stacking, freezing, packing and storing the shrimp after it reaches the processing plant.



While a portion of the staff involved in processing are retained on the basis of regular wages, others are taken on as-and-when-necessary basis, and are paid daily wages.

Traditionally, peeling and grading is done by girls from Kerala, who are brought to work in shrimp processing plants by contractors. In due course, more local women – mostly single-women – have also come to be employed as peelers. Many of the women involved in processing are single, unmarried girls coming from poor families in distant places. The poverty that characterises their background means that (i) their families often depend on their incomes for subsistence, (ii) their future prospects – marriage, settling down to a secure life, etc. – are very uncertain seeing that the girls must find the means to be able to do so on their own, and (iii) their ability to negotiate – let alone demand – for a better treatment from their employers is limited. The origin of a large percentage of these women in a distant state brings in another complication to their ability to integrate into the society they have found themselves living in (ICM, 2002b).

The working regime for the girls at a processing factory can be very harsh. Many factories provide residential facilities to the processors within the processing area, so that they can be made to work whenever fresh batches of shrimp arrive and for continuously long periods. The conditions of work and accommodation are said to be extremely difficult. Even simple health and first aid facilities are often not readily available to the processing plant workers, although the increased stringency of Indian seafood legislation reportedly offers some protection to the women in terms of improving the overall work environment. ICSF (1995) discusses the conditions of fish workers in the processing factories.

Apart from shrimp processing, the role of women in the export as well as the urban market chains is confined to carrying fish from the landing centres to the processing areas and in loading the fish after packaging into the trolleys. In Pentakota, nearly 200 women – mostly young – are engaged in carrying fish from the landing centres to the icing and packing sheds. These women are paid according to the number of basket-loads they carry. Being very poor and involved in ‘link’ activities such as transporting fish between different points along its production-consumption chain, they remain mostly unnoticed by outsiders.

Income and expenditure patterns in fishing communities

BOBP (1987) discusses the income, indebtedness and savings among fishers of two villages – one in the north zone and the other, Gopalpur, in the south zone – of Orissa. The terms of reference to the current study refer to ‘inflow and outflow of household resources for meeting the needs of the family members’ and this section tries to address this issue.

Income from trading activities

A number of factors determine the income of the different people and this is complicated by the fact that these factors are dynamic and keep changing. The key players in the marketing chains can be classified as those involved directly in marketing (i.e., who invest money into the trade) and those performing link activities (ancillary workers who do not invest money into the trade and receive wages for their services). For anyone trying to piece together the income/earnings of the different players in the sector, it is almost a welcome sign to come across the ancillary



workers because, being generally fixed, their earnings are far easier to work out than those of the primary players. Among the primary participants in the trading activity, assessing the income of the producers – fishermen – is very difficult while it is nearly impossible to do so for the large-scale operators. The income also varies from place to place; for instance, urban fishworkers tend to earn more than their rural brethren. The scale of operations is determined by the size of fishing operations in a particular location, so the incomes of ancillary workers like salt and ice sellers, headload carriers also varies from Puri to, say, Arakha Khuda or Chandrabhaga. The incomes of the intermediate categories of people also can only be arrived at after a laborious ordeal of calculations and accompanied by a large number of disclaimers and exceptions.

The fact that not all income is monetised adds to the confusion. Different stakeholders have different timeframes for receiving payment – daily, weekly, monthly etc. – so that is yet another complication. The seasonality of activities means that whatever income is generated over a part of the year (approximately six months) has to be spread over the year to arrive at a figure for the whole year. Increasingly, several poor stakeholders in the marketing chain are also involved in a range of other activities, so their earnings are not confined to fish marketing alone. In fishing households, most adults – and some children – too are involved in some kind of productive activity indicating that the income from marketing activities by one of the stakeholders might be the most important source of livelihood, but by no means the only source! No wonder then that, even if some figures were indeed arrived at, they would be virtually impossible to validate and, in any case, would be redundant by the time they were documented.

BOBP (1987), Dahl & Forsgren (1988) and XIM (1991) discuss the incomes of various categories of fishworkers, but there have been many changes in the system subsequently that much of the information needs thorough updating before it can be used. For the small-scale fish processors, Ward (2000: 23) calculated an average per capita annual income between Rs. 1,700 and Rs. 23,000, of which some 50-81% was consumed for food and related expenditure (condiments, vegetables, meat, fuel, oil, snacks, tea/coffee etc.). This range is in any case so wide as to draw any conclusions extremely tricky and subjective. UAA’s baseline survey of 1992 in 15 fishing villages in Ganjam and Puri districts indicates that the average income of the families which did not own tools of trade was Rs. 7,500 per annum, while those with assets had a higher income varying between Rs. 10,000-12,000 per annum (UAA Perspective Document: 1998-2000).

After having said all that, in what might look like a foolhardy exercise, one can hazard some guesses at the income earned by some stakeholder groups in the market chains. These figures were arrived at after a reasonably large number of interviews (and drawing up of seasonal calendars) and might just hold good for about a week.

Key stakeholder groups Income from the activity Duration of earning in a year Producers: Fishing crew – non-motorised Rs. 1,000 – Rs. 1,200 Eight months Fishing crew – motorised Rs. 1,200 – Rs. 2,000 Six months Fishing crew – mechanised Rs. 1,800 – Rs. 3,000 Six months Boat owners – non-motorised Rs. 1,500 – Rs. 2,000 Eight months Boat owners – motorised Rs. 2,500 – Rs. 3,500 Six months



Boat owners – mechanised Rs. 6,000 – Rs. 10,000 (?) Six months Traders: Local fish sellers (women) Rs. 800-1,200 Eight months Bicycle fish vendors Rs. 1,500-2,500 Eight – ten months Small-scale fish processors Rs. 800 – 1,500 Six months Medium-scale processors Rs. 3,000 – 6,000 Six months Large-scale processors Rs. 6,000 – 10,000 (?) Six months Commission agents (shrimp) Rs. 10,000 – 20,000 Six months Company agents Rs. 3,000 – 4,000 12 months Independent traders (shrimp) Rs. 8,000 – 15,000 Six months Traders (Urban trade) Rs. 10,000 – 15,000 Six months Ancillary workers: Auctioneers Rs. 3,000 – 9,000 Six to eight months Headload carriers (women) Rs. 600 – 1,000 Six months Basket sellers Rs. 600 – Rs. 1,000 Six to eight months Salt sellers Rs. 1000-1200 Six months

Expenditure

It is much less problematic to arrive at the outflows of income from a fishing household in the coastal areas. According to the women interviewed during this study, a household’s income goes to pay for the following expenses (not prioritised for obvious reasons):

• Food • Clothes • Drink for men • Repayment of past loans • Health • Education for children • Weddings in the family (and funerals) • Repairs to houses (for thatched huts) • Child birth • Festivals and other social occasions • Entertainment (Cinema)

The most important production related expenses include:

1. Repair or replacement of equipment 2. Working capital for a new batch of operations 3. Repayment of past loans (taken for production purposes)

Food accounts for a lion’s share of a family expenditure – it is seldom less than 40 percent and often exceeds 60 percent. In monsoon months – also called ‘hunger months’ – a household can spend up to 90 per cent of its income on food alone. The income and indebtedness survey by BOBP (1987) in Udayapur and Gopalpur shows that about 80% of the fishers’ income is spent for purposes other than production, i.e., food, clothing and medicine, of which food account for 68 and 63 percent respectively in the two villages. Irrespective of the source of earnings, in many households, a sizeable proportion of the money goes to pay for the men’s drinking. In fact, it is excessive drinking by men – who thus are left with little money to pay for household expenses – that drives the women to take up productive activities to fend for their family. In the BOBP study



of 1987, expenditure on liquor in Gopalpur came second after food in the major expenses list accounting for 11 percent of the household income.

Weddings in fishing communities have become extravagant affairs. A family with two or three daughters is generally not considered creditworthy because of the catastrophe that the household must face in due course when it contemplates the marriages of its daughters. And the household’s travails are not over with the marriage of the daughters (at the ripe age of fourteen or fifteen), because the girls keep returning to their mother’s house with clockwork precision for delivering their children, an expense that the parents could frankly do without.

Two positive features that became prevalent in fishing communities in 1990s – brought upon as much by economic necessity as by people’s inclination – are the decreasing family size in fishing families and increased investment in education. Most children are sent to schools although it takes considerable effort on the part of the parents (particularly the mothers) to force their children to keep going to the school after a while. The lean periods of fishing mean much economic hardship in the families, which forces several children to drop out of the schools to earn something for the family pot, or at least to take care of their own needs. The contribution of programmes like giving rice to school going children have not received adequate attention in development literature, but they undoubtedly do a lot of good.

Finally, the issue boils down to how much surplus a family can retain after meeting all of its basic needs. The BOBP income-indebtedness survey indicated that although the fishers do want to save, their savings are mostly for short-term needs and on a day-to-day basis. The study adds that households that engage in both fishing and non-fishing activities have a higher propensity to save than those who live near the beach and depend only on fishing. Here, an excerpt from the ICM/FAO study may be relevant:

For many stakeholders, the current level of wages or earnings from fishing and trade leave very little surplus beyond meeting subsistence needs. Even those households that generate some surplus quickly use it up during the lean periods, if repairs to their boats, houses, or weddings and funerals do not intervene. Under the circumstances, when a household encounters a need for investment for any reason or when the fishing season itself does not come up to expectations – something that seems increasingly to be the case – the fishers have to depend on credit (at high rates of interest – 5-10% per month; or by pledging their future fish catches etc.). They also move out temporarily, sell their assets (both productive assets such as boats, as well as houses), or – in worst cases – simply starve. The surplus generation is also dependent upon the health, skills, knowledge, ability and capacity of the earning members to continuously put in their efforts, and a consistent demand for their services – however, there are indications that the poor cannot always take any of these for granted.

In the absence of sufficient surplus, the effects of seasonality – or a ‘shock’ like a cyclone – last longer than the lean periods. For most fishers, borrowing during the lean periods is obviously a livelihood strategy in itself. Up to 90 percent of the households in a typical fishing village are indebted for a good part of the year. This ‘borrowing from tomorrow’ could take the form of pawning productive assets, selling jewellery or family utensils, entering into trade agreements for next year’s fish catches, removing children from schools to make them earn whatever they can,



and so forth. Because of this never-ending process of borrowing and repaying, with the former gaining strength over the latter in successive years, the fishers can almost never hope to get out of the trap. When the family forfeits its productive assets, obviously the return of a good fishing season is not going to be of much help at all.

With more days of poor or no fishing, the number of days when a household goes food-less have increased. Malnutrition and hunger play an active role in increasing ill health, and the correlation between the two, as well as between lean seasons and prevalence of illnesses in the fishing communities is well established. Obviously, this lack of surplus is acutely felt in old age, or when the earning member of the family dies suddenly. Many households suddenly find themselves moving from the category of the ‘poor’ (i.e., barely sufficient income to survive) to ‘destitute’ (i.e., no certain source of income, social rejection and frequent hunger) at such times.

Thus, in summary, one could argue that increasing the surplus from the existing market chains for small-scale producers, processors and traders is the best and the most sustainable way of enhancing their capacity to deal with the myriads of disasters that they face on a daily basis. At the level where many of the coastal fishing communities operate41, an increase by seemingly small margins can also add much security to their lives. This is perhaps the best argument that one can put forth for incorporating a strong livelihoods and market focus into ongoing disaster preparedness programmes.

41 For instance, the total investment that some of the poorest people in the sector put into their trading activities is as low as Rs. 200 per cycle, which might frequently run up to two or three days, earning them about Rs. 40-50, i.e., about Rs. 20 per day. If their investment is increased by 100% - to a grand Rs. 400 – their earnings will double and so will their capacity to withstand future shocks! And the number of women – many of them single or old or destitute or all of these together – in any village is sizeable and is increasing.



CHAPTER 5: Programme Development

Focus groups for the programme

The existence of a large number of stakeholders taking part in the market chains directly as traders or indirectly as ancillary workers (wage labourers) necessitates that any intervention should consider a tiered approach to deal with different categories of stakeholders, beginning with the main players – producers, processors and traders – and graduating to address the needs of the ancillary workers in due course, rather than attempt to cover everyone simultaneously.

For a programme to address the needs of the primary producer communities in the marketing chains, the processors and traders involved in the traditional fish marketing chains – i.e. local fresh fish trade and the processed fish trade – constitute an important target group. The traditional marketing chains are one of the few areas in the fishing sector that are still controlled by the women from the communities. Their social and economic status makes it imperative to consider the processors and petty traders as a target group for the programme. The traditional marketing chains contribute a small proportion of a producer-fisherman’s income, so any changes in these systems to tilt the balance in favour of the producers will add only marginally to the fishermen’s income, while affecting a large number of poorer people adversely.

In the modern fish marketing chains, it has to be the producers – i.e. the fishermen – who are the important focus group. Once the catches are handed to the traders or agents by the producers, they pass through a string of intermediate players whose role in the market chains is often obscure, if not dubious. Although many traders/agents come from the fishing communities, their functions relate them more to the outsiders and, in any case, many of them fall into an affluent class, so confining the focus of the programme to the producers makes good sense.

These three categories of people from the fishing communities – local fresh fish sellers, fish processor-traders and producers (in the export and urban markets) – have decisive influence on the fishing economy of a village and hence any effort towards improving their lot will obviously have an influence on the other stakeholders as well.

Some considerations in programme development

Any development interventions that pertain to markets must strive to enhance the producers’ control over the marketing systems and to increase their share in the market value of their produce in a viable and sustainable manner. In terms of the relation between production and marketing, there is one key difference that sets fisheries apart from other primary occupations. In agriculture, for instance, production and productivity of the systems have increased over the years and supply has exceeded demand to an extent that the key problem facing a farmer these days concerns the inability to sell his produce at a good price. In case of cotton and coconut trade, the market demand has shifted to other materials, thus reducing the marketing opportunities for the producers. A third kind of threat that is emerging recently is the competition that a local product – say rice – faces from the same commodity produced in another region or country by methods that make it cheaper and hence more appealing to the consumers. In all these cases, the problem is one of reduced access to markets (while not denying that there may be other



problems of equal importance). The gross supply has increased over the years and the producer finds difficulties in selling his produce, which necessitates searching for new markets and finding new consumers for the produce.

But in fisheries, the case is completely different. Here, as far as the markets are concerned, there is no satisfying the demand not only at the current levels of production but even at a much enhanced level42. As the forces of globalisation gather momentum, it can only be expected that the demand for Indian seafood will continue to grow and more fish will soon join the export – or the urban – market chains. Even in the traditional market chains, the problems have more to do with supply than demand.

Thus, the problem in fisheries has been one of dwindling supply of fish, while the market demand continues to grow rapidly. Fish catches (particularly in terms of catch per effort) as well as the fishing systems are showing signs of fatigue and the producers find that they have to constantly increase efforts to catch as much fish as they used to do. It is the growing market demand – which is reflected in good returns – that has kept the fishing systems in business because whatever shortfall the producers experienced in their operations has been compensated by a proportionate (or even better) increase in incomes. Fishermen constantly make one comment which says it all: “If we used to catch 10 kg of fish and earned Rs. 100 in the past, we now catch 1 kg of fish and earn Rs. 100!” The problem is, of course, to decide how much longer it would take for the 1 kg to become even smaller and the markets find themselves unable to grow anymore43.

The next important feature of the modern fisheries sector is that production is more or less entirely concentrated in the hands of men. While the role that the women played in the processing and marketing chains was important in its day, the arrival of new systems of trade has meant that the women have become secondary to the marketing chains. Even considering that the women still dominate the traditional market chains – the local fresh trade and the processed fish trade – the relations between these women and the producers are more adversarial than friendly because they are – in their respective roles as buyers and sellers – on the opposing sides of the fence. In such a scenario, an activity that might help the producers – i.e. men – in terms of enhancing their control over the markets or their share in the consumer rupee might not help the women and might even contribute to further marginalising them. In fact, the history of fisheries development in the sector has shown repeatedly that the benefits to one section of people have always come with negative impacts upon another section. This is particularly true in terms of gender issues, because the growth of fisheries in the sector has been accompanied by marginalisation of women from productive spheres of life (Salagrama, 2002).

42 Which justifies the confidence of the large-scale fish trader in Puri when discussing the impacts of the possible implementation of a stricter quality control regime to facilitate exports; he was sure the industry will remain unscathed because, “They (i.e., the importing countries) know that if they insist too much on quality control, they will lose as badly as we do! After all, we supply to their needs!’ 43 This may already be happening: there is a growing suspicion that the market prices for different fish and shrimp varieties – from the international markets down to the local fresh fish trade – may have reached as far as they can go and that the potential for enhancing the value of seafood at the markets may be limited; this is illustrated by the increasingly frequent downturn in the international market for shrimp and the impacts it has had on the various stakeholders. In other words, the demand may continue to be strong and may even grow, but that may not necessarily increase the unit value of the product.



A small example of how this dilemma might confront the interveners in market chains is when we find a large number of very poor women (and several men too) making a space for themselves as intermediaries in the export and urban trade chains at the landing centres. They often add no discernible value either to the product or to the market chain, except of course reducing the primary producers’ share of the consumer’s rupee. On the other hand, one also has to reckon with the fact that this is often the women’s sole means of a livelihood. This leads to the question of whether we should try to dispense with these intermediaries to enhance the fishermen’s income or allow them to survive at the risk of reducing the final share of the producers. One conclusion that will emerge is that development emphasis cannot be solely on enhancing the economic efficiency of a system, while ignoring the other costs.

Another aspect that pervades all aspects of fish production and marketing relates to the widespread prevalence of credit in marketing chains. The credit-trade relationship in fisheries is perhaps more acute than in any other sector, and it may not be an exaggeration to say that if credit is withdrawn, it might mean a collapse of the fishing economy in many areas. The interesting part of this dependence on credit is that almost all of it is derived from private sources. The amount of money that has gone into the sector and the relationships that it has brought forth into existence (as well as a whole class of new elite), mean that the system would be extremely difficult to dislodge at least in the short term and any efforts to improve the producers’ share in the market is likely to find resistance from this angle.

On the other hand, the credit relationship with the traders is not entirely negative or one-sided. If it was, the fishers would have found reasons to dispense with it sooner or later. The fishers recognise the inherent risk that any trader would be carrying when dealing with a perishable commodity like shrimp. The fact that many traders routinely go out of business due to losses accumulated through years of investment in the sector shows that the risk they bear is not insignificant. In several cases, it is also clear that, while the traders apparently call all the shots, they are as dependent on the fishermen – and frequently as vulnerable – as the latter are on the traders, and this mutual dependence will act a check on the exploitative tendencies, particularly when sustainable alternatives are put in place. As in any relationship, there is an element of power between the primary producers and the traders and the balance of this power is heavily tilted in favour of the traders for the simple reason that they have access to a few things that the fishers need and do not have. Making such things available to the fishers on a sustainable, equitable and affordable basis will tilt the balance their way without necessarily upsetting the entire market chain.

An objective assessment of the market-linked credit systems cannot overlook the fact that the services that the traders provided in the villages are not easily replaceable or even supplemented by the welfare and development agencies. Besides financing the fishers’ production needs, the trader/middlemen lend money to them during lean periods. For the fishers, the amount provided as advance is an important source of assistance to meet their larger expenses. Informal credit has indeed helped many families to survive the lean fishing periods or acquire new tools of trade that they would otherwise never have come to own. Considering that this kind of assistance is not forthcoming from any other source, and also that the interest is collected in kind – i.e., in terms of paying less for the fish supplies – the fishers are willing to forego a part of their income for the service. Thus, this kind of relationship cannot be dismissed out of hand as an



‘exploitative’ practice without making efforts to install systems which are capable of providing the same services along the same lines and pay better prices to the fishers. The system will survive as long as this does not happen and it is necessary to accommodate it in the new programmes of action. Efforts can certainly be made to make it more competitive, transparent and equitable, rather than ignore or bypass it completely.

These considerations – the existence of a vibrant market demand and a reasonably well developed market network to cater to the demand, the sensitive balance that characterises the economic relations between the men and the women in the fishing communities and the vibrant market-credit relationships that characterise the trade – will suggest that any new initiative has to be organically derived from the existing systems rather than be imposed from outside. Given the set of conditions that have been discussed in the foregoing chapters, it is not so much the development of a new market chain, as the possibilities for enhancing the producers’ control on the existing marketing chain that should hold our attention. In other words, we have to find ways to enhance the target groups’ control over existing systems of marketing in such a way that they maximise their earnings sustainably. As supply dwindles, the producers’ share from markets is also spread thinly to cover a range of costs related to production. Thus, increased income to the producers and traders will also come from reducing their production costs or reducing the losses in the production chain, which stem from various factors. Even efforts like cooperative markets might strive to bypass a few of the current systems and processes, but work within the existing market chains, targeting the same markets. Moreover, setting up a cooperative marketing system is preceded by creating the necessary environment for it to succeed, which means this comes as a culmination of a series of efforts.

The existence of four different market chains each with a different set of players whose interests are diverse means that no single strategy is going to be effective in addressing the needs of all stakeholders in the sector. This diversity also determines that an improved access to markets and market share to the producers and the small-scale operators within fishing communities would be possible through interventions spanning a number of activities – technical, financial, human, social, political, legal and, of course, market-related – but which are driven by location-specific and stakeholder-specific strategies.

The following section will summarise the key constraints that hinder or restrict the players in each of the marketing chains from taking the best out of them; obviously, there will be many such constraints, but the discussion will confine itself to the key constraints as the stakeholders themselves have expressed them and as the analysis of the systems in the foregoing sections has indicated; the next section will build upon these constraints and discusses the options to overcome them and to enhance the market share of the fishers and fishworkers; it also provides a brief description of the economic benefits that could accrue to the producers when the programme is implemented. The subsequent section will discuss the possible ways of operationalising the opportunities into meaningful and sustainable interventions. The next section will deal with the factors that can facilitate or hamper the implementation of the new initiatives and the last section will discuss the mechanisms for transfer of ownership of the process to the primary producer communities.



A summary of key constraints

The discussion about the different market chains shows that three broad areas are significant in determining the capacity of the target groups to deal effectively with the markets. These are summarised as follows for the producers and the trader/processors separately:

For the producers

• The most important constraint for the fishermen is their need for credit to meet their production and consumption needs, which forces them to forego a sizeable part of their earnings in many explicit and implicit ways both to service the credit as well as to ensure its sustained availability in future.

• Losses in production chain (lack of preservation systems onboard, frequent engine repairs, delays in landing and transport) and inability to sell their produce immediately on landing – the markets being located at considerable distances from the landing centres – are intensified by poor infrastructure facilities at the landing and transport stages, which creates (or strengthens) dependency on market intermediaries in marketing their product.

• The producers’ dependence on market intermediaries for their credit, preservation and transport needs helps the latter to monopolise trade and control the producers’ access to markets and market information through a range of filtering mechanisms. This reduces the fishers’ bargaining capacity in the market and thus, their share in the markets.

For the fresh fish traders and dried fish processors

• Growing investment needs at the landing centre force the traders to obtain credit at high rates of interest, which consumes a significant proportion of their earnings and increases financial risk. Competition from more powerful players reduces their bargaining capacity, forcing them to settle for fishes of poor quality and cheap variety.

• Losses in production chain contribute to reduced profitability of trade. Poor infrastructure at the landing, processing, storage and marketing areas and inadequate transport systems increase losses or add to cost of production, thus increasing their vulnerability.

• Lacunae in the functioning of markets and poor capital base of the traders reduce their capacity to deal with markets decisively and effectively.

Further summarising the key issues will give us a generic outline of the problems:

• Poor capital base forces the target groups to depend on credit for production and consumption purposes, and this affects their access to markets or profitability of trade

• Lacunae in current production and transport systems – coupled with lack of basic infrastructure facilities at the landing, processing, storage and market areas – contributes to physical loss of products, increased production costs and further dependence on market intermediaries

• Poor capacity to access or effectively deal with markets as a result of dependence on intermediaries or poor capital base.



Opportunities for improving the producer communities’ share in the market chains

Using the three broad areas as a basis, it will be possible to decide a broad framework of action for enhancing access to markets for the producer communities:

• Credit made available at a reasonable cost and on a sustainable and reliable basis to enhance the target groups’ access to markets and profitability of their operations.

• Improvements undertaken to the current systems of production and transport, supported by improving basic infrastructural facilities at the landing, processing, storage and market areas, to reduce physical losses and production costs as well as dependence on intermediaries.

• Community-based cooperative marketing and credit systems developed, supported by increased access to market information and institutional finance to enhance the capacity of the producers to access, and deal confidently with, markets.

This can now be expanded into a programme of action with a five-point agenda:

6. Sustainable credit programmes to help the target groups meet their production and consumption needs at a reasonable rate of interest

7. Enhancing access for target groups to basic needs of the trade as well as undertaking process improvements to the current production and marketing systems

8. Efforts to improve infrastructure and basic facilities at the landing centres, processing and storage areas and at the market places

9. Encouraging collective systems of procurement and marketing by the target groups 10. Improving information flows on production and marketing systems as well as the people

involved in various activities

Let us quickly see how these might help the producer communities:

For the producers, assured access to credit will reduce dependence on traders so they are free to sell their product at a more competitive price in open market. Strong cooperative systems and better information flows will enable them to access institutional finance regularly. Reducing losses onboard can be achieved by installing simple insulated iceboxes onboard the fishing boats, while improved infrastructure at the landing centres (like setting up a good ice storage container at the landing centre) will provide assured supplies of ice. Availability of clean auction areas on the beach and access to ready preservation and transport systems will improve quality of their product and enhances its market value (or at least reduces the ‘losses during transit’). When at least a few of these conditions are met, the fishers might take up cooperative fish marketing and access to market information will facilitate this process at all stages.

For the fresh fish traders, increased access to credit will reduce their costs of operation significantly. Buying fish collectively at the landing centres will reduce their production costs still further, while collectivisation helps them to compete confidently with the large-scale traders and obtain assured supplies. Using a small insulated icebox or sharing a community icebox will help them reduce their losses during storage and transport to markets. Improved facilities like community iceboxes and ready transport facilities will facilitate this process, while setting up



basic infrastructure at the markets will facilitate fish marketing in an orderly manner and with fewer losses. While market information might not add much value to their work, developing information about the traders themselves – socioeconomic conditions, investments and returns, marketing conditions – for dissemination to policymakers will help focus development efforts on them.

For the dried fish traders, the benefits are largely the same as for fresh fish traders, except that the reduction in losses will come from making changes to the processing chains. Basic infrastructure facilities at the fish processing yards will be a necessity to achieve this. Collectivisation of effort will also enhance the scope for increasing returns at the weekly markets.

Thus, at least in theory, it is possible to address most of the constraints that the primary producer communities face through a programme involving these broad areas of action and help the fishers not only to earn a better income, but also to establish their control over the fish disposal systems and to make the systems more equitable, accessible and affordable to many categories of poor people (and particularly women). More importantly, they have the potential to ensure sustainability of many operations in which the poor are overwhelmingly involved and are currently facing serious crises. None of the points in the agenda is new or alien to the fishing communities, they are in fact drawn from the context in which they operate, and so are all that easier for them to comprehend and take control of in due course.

Obviously, this list need not be confined to five points; it could reasonably go up to twenty-five points, or even fifty points. The point is that one constantly needs to weigh what is required with what is possible and make a choice. Here, the choice has been to stick to the more fundamental concerns of the fishers in the hopes of building a more ambitious programme of action in due course. As it stands, this five point programme can effectively address the key concerns of enhancing the target groups’ control over markets and increase their incomes adequately enough to make a change in their lives and that, it will be agreed, is a good beginning.

Invariably, some of these activities are closely interrelated. Basic infrastructure at landing centres and markets is linked to improved access to ice and transport for fishers, which in turn is related to improving the current systems of production. Market information is necessary for cooperative marketing efforts, which thrives on a sustainable credit programme and ready access to transport and ice. An integrated fish marketing activity will ideally take all five components together to work out a programme of action.

At the same time, not all interventions will be required for all categories of stakeholders. Also, the same activity with different categories of people might have different contours, and even working with the same category of stakeholders in different areas might necessitate planning and implementation in a different way. Thus, each of the five areas of action might be considered as a sub-project within the larger programme and efforts done in sub-project will need to be complemented or harmonised with those in another sub-project in order to reach a positive outcome.



Once this five-point programme was arrived at, its effectiveness to address the key concerns of the focus groups was discussed at several meetings in Andhra Pradesh, and the results have been found to be fairly positive. There are obviously some issues – such as changing consumer preferences, changes in global seafood trade etc – which these interventions will not be able to address, but the agenda largely succeeds in addressing the basic concerns of the focus groups.

What’s new?

Of course, the agenda looks too familiar, particularly when it is compared with the previous efforts in the sector, and rather disappointingly so. The history of fisheries development in the country is also one long litany of attempts to make support programmes like credit and co-operatives work, reduce their losses and improve the basic infrastructure. So what’s new? The simplest reply to this question is that there is no magic trick that can solve the problems at the switch of a button; that the answers we are seeking are the same as those others have sought.

The more measured reply would be that, although the suggested areas of work – credit, cooperatives, process improvements etc – have been tested in the fisheries sector, a comparison of their actual performance with what they hoped to achieve indicates wide gaps44 , as the following section will show. In many cases, these projects have all been running independently of one another and there has been little effort to integrate them into a common programme, i.e. of enhancing the fishers’ control over the markets. An important fallout of some of the programmes – particularly credit and cooperatives – is that the way these programmes are planned and executed has actually yielded results that are essentially counter-productive to the objectives of the exercise and the repercussions of the failure of these systems are felt on all successive efforts in that direction irrespective of their provenance and purpose.

Ultimately, the deciding factor is that, in spite of many past efforts at addressing these largely basic needs, the needs still remain and, if anything, have become more acute. Credit is needed to overcome competition as well as to meet working capital needs in capitalised systems of production, cooperative marketing systems allow bulking catches – which is made necessary in the background of dwindling fish supplies – to optimise the functioning of marketing systems, reduction in losses is an important means to overcome the reduction in catches, improved infrastructure and information flows is going to be an important area of work as international and national seafood legislation becomes more stringent, and ice and transport systems are going to play an increased role as the international and domestic urban trade gathers momentum.

It has been one of the objectives of the study to look at the objectives that gave rise to the previous initiatives and assess their relevance to the actual current needs of the target groups. And this review clearly shows that while the original objectives of the programmes in this area remain largely valid till date, the systems and mechanisms used to implement them will need a radical restructuring. There is a need not only to integrate the different projects into a common programme of aiding the fishers in their marketing function, but also to develop and test new modes of thinking and implementation of these programmes. In other words, the new programmes might address the same old problems, but (hopefully) from a new and more holistic

44 The failure of the most important – and visible – of these, credit and cooperatives have been noted by the Planning Commission in successive Five Year Plan documents.



perspective, one that gives the pride of the place to the people concerned, i.e., primary producer communities45.

Operationalising the programme

Once we have identified what the key issues are – i.e., the five point agenda – the ways to approach them will and can vary and what is discussed here is intended to be one of the many options, but one which tries to distil the experiences from the past and relate them to the perceptions of the target groups and arrive at simple ways of dealing with the different issues. Although a number of activities are suggested here for targeting the needs of a number of different stakeholders in the production and marketing chains, it is neither possible nor advisable that all these activities be taken up simultaneously. A beginning can be made in a fairly simple way, and much progress can be made by allowing the systems to grow on their own steam. As the producer communities’ confidence in themselves grows, they are most likely to come up with systems that are far more efficient and effective than what is presented here.

Another aspect is that the five-point agenda need not be – should not be – taken as a ‘package deal’. As the foregoing chapters have shown, each of the five areas of work will independently help to improve the fishers’ access to markets (although only indirectly in some instances, for e.g., improved market information).

The existence of a prior body of work on some of the issues to be addressed through the project will mean that the options for operationalising the five point agenda can draw from these efforts, to understand what worked and what did not. It will involve looking at the shortcomings of the past systems and arriving at some feasible options to overcome the lacunae. While doing so, it will also be important to see how alternative systems (where they exist), for instance, the informal credit systems, function and the reasons for their continued viability in spite of their supposedly exploitative nature. The lessons learned from these two sources will give a good basis for building a strategy for implementing the various sub-projects in this programme.

A. A review of the government’s efforts to improve market opportunities for the producers

Lack of an explicit market agenda in development programmes

One feature that stands out when studying the government’s role – in Orissa as elsewhere – in terms of supporting fish market chains is the curious lack of emphasis on the markets or on making changes to their structure and functioning. Even technical issues of post-harvest rarely received as much emphasis as the production aspects. Apart from the export chain, which is a direct outcome of the government’s special emphasis on developing it (even setting up a separate body – the Marine Products Export Development Authority, MPEDA), the other chains were largely an outcome of private ‘market forces’ rather than the result of conscious efforts on the part of the State to nurture them.

45 Hopefully, because all efforts to define and control change in the future – such as this study attempts to do – are ultimately based upon a good dose of optimism and perhaps wishful thinking.



A review of the government development programmes in fisheries sector (XIM, 1991; Department of Fisheries, 2000-1; GOI, 1996) shows that the overwhelming interest is on production. This may be attributable at least in part to the belief that was underlying development thinking throughout the Green Revolution period: that increasing production would improve everything in its wake, much like the neo-liberal notion that Free Market Economy is the answer to all ills. Apart from everything, even the realisation that unless a perishable commodity like fish is properly preserved, increased production can only mean a dead loss seems to have been largely ignored at least as far as the artisanal sector was concerned.

The other reason for the lack of market focus could be that the Department of Fisheries always prided itself as a technical department and disdained all kinds of ‘social work’ (see Bavinck, 2001) so it has steered clear of the markets. A third reason could be also that the Department of Fisheries was not equipped to handle marketing related issues with any measure of confidence. The failure of fish marketing cooperatives (managed by the Department of Fisheries) in state after state frequently due to systemic failures illustrates this fact well enough. The agricultural marketing boards too steered clear of fish marketing, or at best accommodated them in the existing market systems without making any efforts to control or systematise them.

Having said that, one has to accept that fish trade is perhaps so totally different from any other trade that it requires a totally new orientation and approach. The consistent failure of the best intentioned (and frequently efficiently executed) interventions in the sector in the face of the inscrutable ‘market forces’ is reason enough to accept this fact and argue that not enough basis has been laid to streamline or improve the current systems of marketing. A perusal of the existing literature on fish marketing in India in general and in Orissa in particular gives hardly a clue to the market dynamics and their relation to a whole range of other issues. Even the production systems have hardly been studied from a marketing point of view with the result that a number of questions still remain unanswered.

A proposal, which suggests an active involvement of the state as a player in the market systems and announcing a support price for different varieties of fish (like in the agriculture sector) crops up now and then, but has so far not managed to find any real supporters, which – considering the practical difficulties this might entail – is understandable and, if implemented, might turn out to be a problem worse than the disease! The other proposal that has lain stillborn for a long time is the one suggesting setting up of a general market information system (like the one for fruit and vegetables).

The role played by the NGOs in fish marketing on the east coast of India is also meagre, most NGOs having confined themselves to providing some working capital assistance to the women through the SHG system. The historical factors that gave rise to vibrant fishworkers movements and innovative development initiatives on the west coast of India have not been powerful enough on the east coast to give rise to similar developments there. Within Orissa, some NGOs like the United Artists’ Association, have provided training to some of the women members on value addition and quality enhancement and even got some studies done to explore options for taking up fish marketing as a means to improving the incomes of the fisherwomen (ICM, 1999), but were deterred from going ahead when they comprehended the magnitude of the task. NGOs like the Coastal People’s Development Association (CPDA), Konark have wisely confined



themselves to programmes dealing with reduction of fish losses due to various technical and environmental reasons, contending correctly that reduction in losses of material through various stages of production would mean taking more product to the market and hence more income. However, the scale of these initiatives remains confined to a few pockets.

Institutional credit programmes

While much development support in the fisheries sector has been geared to making credit accessible to the fishers, this often takes the form of providing the inputs in kind – boats, engines, nets and so on – concentrating the support to pre-harvest, i.e., production-related, aspects. The post-harvest relationship between credit and marketing, though widely recognised, received less attention because it was assumed that increasing the control of the fishers over the systems of production would enhance their control on the marketing systems.

The impact of the subsidies to support production activities – such as motorisation of fishing – that led to unreasonably high investments and reduced profitability of operations is a story that is relevant to a study of fish marketing systems, but will have to be told separately (see also ICM 2002a)46. Suffice to say that, the capital intensive production systems have actually meant that the fishers needed to depend even more on credit than before. This was also aided by the fact that the new markets were located so far away that the fishers could not always expect to receive payment for their catches immediately and – lacking savings – had to depend on credit in the intervening period.

The seasonal nature of operations, together with poor savings, necessitated many fishers to search for credit for consumption purposes during the lean periods. Consumption credit was simply not forthcoming from the state-run services, which might have overlooked or ignored the clear link that exists between consumption needs and the overall productivity of the system and thus the fishermen were forced to seek alternative sources of credit, i.e. from the trader-moneylenders. This, alongside a number of other factors, has contributed their inability – or unwillingness – to repay the loans that they had received from the state and the banks, giving rise to a widespread notion that the fishers are not ‘good borrowers’, i.e., not creditworthy, which sealed off even the few channels of institutional credit available to them.

The State’s hesitation to get involved in post-harvest, i.e., market related, activities is also reflected in the fact that there were few, if any, schemes to make credit accessible to the women involved in fish trade and processing operations47. Development support to the players in local fish trade and dried fish trade has been the lowest of all marketing chains. When the women received some loan, it was as part of a larger programme targeting women in general, rather than being specifically geared to their needs. In any case, this support is a one-off activity, so the few women who received it could not look to it for servicing their needs on a regular basis. Similarly, the development of basic infrastructure – laying roads, setting up transport systems, increasing ice production and construction of markets – has helped the traders, but they remain ignored in terms of receiving support for their direct needs. 46 Equally important would be an analysis of the relative shares that different marketing systems (and the fishing systems that supported them as well as the players who took part in each system) received. 47 An exception has been the ongoing STEP-funded ‘Integrated Fisherwomen Training on Quality Improvisation of Dry Fish Products – Orissa’ which is described in the following section.



In case of cycle fish vendors, the little support they have received is in kind – as bicycles, mopeds, iceboxes etc. – and less emphasis was placed on developing the markets or increasing the traders’ access to them. Most support programmes were confined to one-off deliveries, their spread confined to few areas while leaving out others, and little, if any, monitoring was done to study the utilisation of the funds for the purpose they were intended, i.e. fish trade. The result is that none of the people in the local fish marketing chain can claim to have recourse to an institutional system of assistance, particularly in terms of meeting their working capital needs, in spite of the fact that most of them fall into the category of very poor by any standards.

It is in this context that a study by the DFID-PHFP in mid-1990s on the credit availability for artisanal marine fishers in Orissa found that the proportion of marine fisheries advances to total advance provided by banks in Ganjam district amounted to 0.2 per cent and that informal sources provided 81 per cent of the credit to the marine fishers in the state (PHFP, Undated, 6).

Some of the NGO-sponsored credit and savings programmes have reached some of the poorest people in the villages and made an impact upon their lives. But the programmes are not uniformly spread in all villages, do not all women in a village and leave ambiguities in terms of their focus and performance. An explicit market agenda is lacking in the credit programmes which reduces their effectiveness.

Cooperatives in the fisheries sector

In terms of enhancing the producers’ access to markets, a key programme of the government has been the promotion of cooperatives for channelling development credit to them and also to facilitate their collective bargaining power in the markets, which – if properly implemented – would have certainly been a worthwhile initiative. At the state level, Orissa State Fishermen’s Cooperative Federation Ltd (OSFCF; also known as FISHFED) was set up with a broad agenda, including ‘to market fish and fishery products of member societies’ and ‘to [develop] infrastructure like construction of Ice Plant, Storage godown, fish landing centres, fish selling Kiosks etc. for development of fish marketing in the state’ (Department of Fisheries, 2001: 91).

However, the record of the cooperatives in fisheries is not very encouraging. A study conducted by the DFID’s Post-Harvest Fisheries Project found that less than 10 per cent of the total marine fishers had membership in cooperative societies. In 1997, there were a total of 616 fishermen cooperative societies in Orissa, including six apex societies, with a total membership of about 70,000 people (DOF, 1998:95). The PHFP study (6:66) concluded that the primary cooperative societies were credit-starved and most of them were defunct. In most villages, the cooperative societies are confined to paper and to a handful of people with strong decision-making powers in the community.

Very few of these societies ever tried their hands at marketing. They were simply not equipped to undertake a task of that nature, although the ostensible purpose of setting up a cooperative was fulfilled by keeping the sale registers up-to-date with details of imaginary fish sales! Thus, a golden opportunity to enhance the control of the primary producers over the marketing chains has been lost – perhaps irrevocably.



A key point about the Cooperative Societies that emerges from interactions with the members is that, to them, the Society meant no more than a channel to receive government support and when they found no more assistance forthcoming through that channel, they simply abandoned it. On hindsight, the expectation that the Societies would act as a link between the communities and the state in a just and transparent manner appears rather exaggerated. The leaders of the Societies often came from the socially influential, politically active and economically powerful sections of the communities, and it would be optimistic to the point of being naïve to believe that they would allow genuinely democratic decision-making processes to take root in the Societies.

The other serious setback to the successful functioning of cooperatives has been the bureaucratic interference in the system. Too much emphasis on form and too little on spirit of cooperation have meant that the functioning of the cooperatives became largely ritualised and, more seriously, adversely affected all future community-based initiatives besides earning notoriety for the fishers as intransigent and incorrigible loan evaders.

It is not known how many women’s cooperatives are in existence in the state, but that they exist is vouched by the fact that FISHFED has two women’s societies affiliated to them (Department of Fisheries, 2001: 91).Discussions with the women in fish trade in Ganjam and Puri districts reveal that many of the women are not aware of any substantial government programme that specifically addressed their role as fish traders.

Support to Training and Employment Programme for Women (STEP)

The Government of Orissa has recently initiated a three year project entitled ‘Integrated Fisherwomen Training on Quality Improvisation of Dry Fish Products – Orissa’, aimed at involving 3000 fisherwomen, who will be registered as members of 45 women’s cooperatives which have been set up in Ganjam, Puri, Balasore and Bhadrak districts in coastal Orissa. The Rs. 2.2 crore project, 90% of which is funded by the Central Government under its STEP programme, is managed by the Orissa Pisciculture Development Corporation Ltd (OPDC), a quasi governmental body under the Department of Fisheries. The objectives of the project are to provide training on product development and quality enhancement to the women and making credit assistance available to them to take up marketing activities. NGOs are sought to be involved in the programme to implement some of the training programmes and to monitor the performance of the cooperative societies in marketing. The value-addition training programmes are currently underway, to be followed by disbursal of financial assistance in due course to enable the trained women to take up collective production and marketing enterprises.

What is striking about this programme is that it is perhaps the first major programme targeting the women in fisheries sector in the state. Considering that it has a strong component of marketing, to be managed through the FISHFED, it remains to be seen if it will stand up to the ambitious agenda its backers have set for the women, when they state that: ‘[A day is not far off] when the value added dry fishes of Orissa prepared by Women Cooperatives will hit the markets of Srilanka, Malaysia, Thailand etc” (OPDC 2003: p. 21-22).

Infrastructure and basic services at the landing centres and the markets

In terms of provision of services for reaching the shrimp and finfish to the markets, the contribution of the government is considerably higher than in the case of the traditional market chains. Construction of fishing harbours, ice plants and processing plants has been taken up in the government sector and wherever private investment came forward to set up business, good technical and financial support has been extended. But these are few and far between, and large gaps exist in terms of infrastructure development between modern fishing ports like Paradeep and even a major artisanal fish landing centre like Pentakota. The lack of facilities to berth the boats, land and sell their catches in hygienic conditions has meant that the issues of hygiene and



cleanliness at most landing centres continue to remain an important area of concern. The way fish are landed and handled on the beaches leaves much scope for increasing the risk of contamination to the seafood. It is widely recognised that not one landing centre or a fishing harbour will meet the national standards in terms of hygiene and sanitation (Tarakan, 1998).

The apparent disinterest of the government in getting involved in post-harvest issues is reflected in the failure to promote use of ice and iceboxes in the artisanal sector in a systematic and sustainable manner. Even as ice has been recognised as an important factor to facilitate not only the movement of fish from landing centres to their destination markets, but also in ensuring good returns to the producers, little effort has been made to promote its usage vigorously. The impact of poor access to fish preservation and storage systems on the marketing conditions has already been discussed in this report.

The transport services in southern coastal regions of Orissa remain to be a serious problem. Poor transportation systems mean that fish and shrimp, the main produce of any fishing village, cannot be easily transported out of the village immediately on landing, and their perishability adds another dimension to the losses incurred as a result of not being able to sell rapidly. The access to and from the Chilika villages is a major constraint not only for economic reasons but for everything. But even villages that are on the mainland, such as Arakha Khuda, Sannapatna, or Arjipalli have problems related to poor transport services. In many cases, even when roads do exist, the dearth of ready or assured transport remains a serious problem. With the state-owned road transport services being meagre, the traders have to depend upon private transport (buses, trekkers, jeeps, auto rickshaws, tricycles) and the private services are marked by uncertainty and inefficiency, belying the common assumption that privatisation improves efficiency. Moreover, the availability of private services is mostly confined to a few bigger and important places, with the result that people have to walk long distances to reach the nearest transport service point.

The condition of traditional markets has received less attention than the export markets and, as indicated at various points in this report, causes serious problems for the producer communities for lack of basic infrastructure to sell and store their products. Unfortunately, the government’s interest has been minimum in improving the basic facilities at the markets, if not for the benefit of the fish workers, at least for that of the consumers.

Information flows

The general lack of market focus in development efforts is also reflected in the existence of large information gaps about the players, the markets and the dynamic interrelationships between the people and the marketing systems. These gaps must necessarily mean that the policies guiding fisheries development have either not been cognisant of the market conditions or could not cope with them effectively.

The fact that none of the producers and a variety of other important stakeholders is even aware of the changes in the export legislations over the last decade indicates a failure on the part of the extension services in reaching the producer groups. One reason for this is that an organisation like the MPEDA – which knows such things – is grossly understaffed to undertake a task of this proportion, while the extension services of the Department of Fisheries may not have much of an



idea about the ban themselves. What this means is that there is not only a need to collect more information on all aspects of the sector, but also to find effective ways of disseminating it.

Programmes to reduce fish losses as a means of enhancing incomes

After the system of providing salt on subsidy was dispensed with by 1970, traditional fish processing remained relatively untouched until at least 1990s, when some new inputs like drying racks were demonstrated to the processors. The 1990s also saw two DFID-funded research programmes dealing with loss reduction in traditionally processed fish being located in Orissa. There have also been a number of training programmes on value-addition and loss-reduction in selected locations all along the coastal areas in the state.

But the conditions of traditional processing remain the same. Most of the programmes focused on technical improvements than on markets. Options for quality improvement were suggested without necessarily making efforts to understand the conditions that help or constrain the processors from adopting the innovations and to set up systems to overcome these constraints. The processors are clearly not in a position to adopt the suggested practices without sufficient assistance. At a time when the existing systems, and the people dependent upon them, are finding it difficult to survive, they would obviously be the least able to invest in new innovations for improving their production systems, however important and lucrative they may seem to be48.

B. Options for implementing the five-point agenda

If the foregoing review of the past development efforts in terms of marketing related interventions has taken an explicitly critical view, the intention is more to see where gaps existed and programmes floundered rather than to dismiss them as irrelevant. As we have seen, the programmes were – and are – grounded in sound objectives and where many of them went wrong was in the execution. Clear objectives, effective programmes to inform and influence and empower the stakeholders to take part in the programmes as the owners rather than as recipients of benefits, transparency, accountability, monitoring, reviews of performance against objectives, and confining the State’s role as facilitator rather than an active player itself – many of such basic necessities for a successful people-centred programme have often been overlooked.

It will thus be an important strand of work for any development organisation to work towards addressing the loopholes in the existing systems, to assess if they can still be made to work and to devise alternatives to replace them. There is a need to revamp the systems and build many of them up from the scratch, but the lessons learned from the experiences have to be taken into consideration while doing so. It is not an individual or an agency or even a set of agencies which can do this; it will require mobilising a wide spectrum of organisations to decide how best the existing systems can be restructured and made more effective. There is a need for initiating dialogue, developing networks and starting pilot studies to determine what works and what does not. Thus, if the existing systems do not work, there is a need not only to determine the causes of

48 For instance, a set of tools to reduce losses of fish from infestation will involve an investment of Rs. 2,000. This might look to be low enough, particularly when the processors stand to gain up to 25% over their current income, but when it is related to the fact that the total investment of an average medium- or small-scale processor is not much more than that sum, it becomes clear that she has to make a choice between improving the system and be left without money to buy fish, or buy fish and continue with whatever system she has got!



why they failed, but also to see how they might be made to work within the existing or a revised framework.

1. Institutional basis for managing the fisheries programme

Simply put, some of the activities – obtaining and using iceboxes, reducing losses in production chains – may not require an institutional framework, although they will certainly benefit from such initiative. But the more important issues like credit, marketing, lobbying for infrastructure and improving access to transport systems will require a group initiative to succeed. The poor condition of fish catches also supports cooperative marketing as a risk reduction strategy. Thus, setting up community-based cooperatives will be both an end in itself (so it helps the fishers to bargain for better prices and bypass the intermediate links) and, more importantly, a means to an end – which involves implementing the different sub-projects within the programme.

In cases where the villages are too small to set up an elaborate network, the ideal option might be to work at the Gram Panchayat (GP) level, brining together the communities for four or five fishing villages to set up the cooperatives. In any case, while the following description is confined to a village level, it is envisaged that supra-level organisations will come up at the district and the state level in due course, which will act as links between different village cooperatives and address the macro-level issues – related to policymaking, for instance – at appropriate levels. Since economies of scale can only be assured by accommodating many people in production and traditional fish marketing in the villages, the groups will be formed based upon their main production activity, thus accommodating both men and women into the system.

There is a need to differentiate an economic organisation from a social organisation, even if the members of the one group also take part in the other and the word ‘cooperative’ is being used here to denote the economic structure and does not have any relation to any existing cooperative set-up in the villages49. As economic entities, the cooperatives will – within the framework of 49 The name ‘cooperative’ itself is a loaded one and carries much baggage that one would rather not burden oneself with. Calling an initiative as a ‘cooperative’ denotes several things to the target groups, none of which has anything to do with working together. As an officer of SIFFS in Andhra Pradesh has recently pointed out, calling a group as a ‘cooperative’ is an almost sure way of ensuring its failure! Still, the word is used here to denote to a particular kind of organisation in the absence of something more appropriate and less problematic. Words like village cooperative, primary producer cooperative and credit group as used in this report are provisional and should be treated as such.

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their larger objectives – act like any other business system. The profits from their activities might be ploughed into development and welfare programmes – through other structures – but the two functions cannot be squeezed into the same organisational structure.

Structure of village organisations

The same broad area of intervention – credit programmes, for instance – will actually develop differently for different stakeholder groups in terms of scale, purpose and operation. Similarly, reduction in losses in production, transport and market chains will work out different for different marketing chains. Collective marketing also will take a different form and function in each of the marketing chains. In order to accommodate the differences in the needs of different stakeholders, these activities will need to operationalised at the stakeholder group level, i.e. each of the target groups for the programme – producers, fresh and dried fish traders – will form a separate group with its own systems and practices. Thus, the first step in operationalising the programme will be to form stakeholder groups – one each for producers, traditional fish processor-traders and fresh fish vendors – which will form the heart of the cooperative system.

On the other hand, efforts to make basic necessities of trade – say, ice and transport – available to the primary producer groups will largely be the same across the different channels and might even work properly only when taken up at a sufficiently broad level encompassing as many stakeholders as possible to boost demand. Similarly, efforts to improve infrastructure facilities at landing, transport, storage and marketing – though necessary for each group – will reflect as an overarching agenda, which – moreover – will need lobbying and advocacy efforts at the government level. Thus, there is a need for all stakeholder groups to come together and form a supra-organisation at the village level.

Within the stakeholder group, some of the activities might also work better with smaller groups. For instance, the experience with many credit programmes in fisheries sector is that larger groups have generally meant poor performance. If a strong cooperative is the heart of the programme, an efficient credit system is the blood that keeps it alive. Seeing that many credit programmes – with the best intentions on all sides – have fallen flat on their faces, it will be necessary for any new programme to consider all possibilities and set up effective checks and balances to ensure that the credit programme works well.

In order to make the credit systems more efficient, each stakeholder group might decide to form its members into smaller sub-groups of five or six people. This enables mechanisms like peer pressure to work effectively and reduces cost of monitoring the programme. Thus, there is a need for three tiers of organisation in a village, which include the village-level supra organisation, the stakeholder groups and the sub-groups within them.

In other words, a cooperative marketing activity, as envisaged here, has three main components: one, the actual marketing itself, which involves sending fish from one place to another and earning income from it; two, a support system which enables the marketing system to function without hitches by providing the necessary services (such as ice, transport systems and infrastructure); and three, an efficient credit management system. The previous efforts at cooperative marketing have tried to make the cooperative in the villages to undertake all three



activities on its own. While there are some successes (in Kerala, for instance), it is not necessarily the best option for all situations, particularly on the east coast of India. Here it is proposed that these three activities be segregated and kept with three distinct – but well-integrated – entities at the village level.

The following sections will describe how the three-tiered structure might function.

1. Village Cooperative

Structure

At the apex will be the village cooperative, which has an overarching focus on all activities done under the fisheries development programme and also acts as a link with the external agencies. It forges linkages with the other village cooperatives and sends its representatives to the governing body of the supra-village cooperative body. All members of the primary stakeholder groups (to be called primary producer cooperatives henceforth) will form the general body of the village cooperative, while its functions are supervised by a governing body consisting of representatives of the primary producer cooperatives. It is not possible to suggest what proportion of the governing body should consist of women representatives, but this should certainly be an important concern and the system should have enough leverage built into it to ensure that the women’s point of view gets to be heard loud and clear at the decision-making levels.

Functions

The village cooperative will set up and manage economic activities (such as projects to provide ice and transport systems), in order to provide right conditions for the primary producer cooperatives to take up marketing on their own. It runs special services for the petty fish traders and dried fish manufacturers to the markets and back at a reasonable cost. Annually, the governing body also assesses the demand for various support systems (credit, training, technical support) for different cooperatives affiliated to it and allocates its resources based upon the proposals from its member cooperatives. All allocations that entail an investment will be made available to the primary producer cooperatives on credit basis. It will also act as the main information gatherer and disseminator. It acts as a channel to receive funds from banks and takes responsibility – on behalf of producer cooperatives – to repay the banks.

It is possible, and necessary, for the village cooperative to diversify in due course (as it becomes stabilised and secure) into engine repair sheds, dealerships for nets, engine spare parts and iceboxes, which will help it to generate funds for its sustenance while providing the fishers with their tools of the trade at an affordable price. The more control the fishers can acquire over the supplies to fulfil their needs, the better will be their market share.

Staff

The members of the village cooperative belong to producer groups themselves which means that their ability to undertake manage the different programmes is limited and thus, there is a need for the cooperative to have a secretariat of trained youth to help in running the programmes. The



village cooperative will have a secretariat consisting of an officer-in-charge and an accountant and an executive division with the educated youth from the community employed to manage the day-to-day functioning of different programmes – transport services, ice procurement and distribution, credit etc. In the first years of the programme, it is necessary for the village youth to be trained by more experienced people from outside in setting up and managing the systems. These are all employees of the cooperative and are accountable to the governing body, and it should be the endeavour of the governing body to see that their salaries will be paid from profits generated by their activities rather than from the community corpus funds.

Sources of income

The sources of funding to the village cooperative will be three:

1. The seed capital provided by the funding agencies, which will be used for setting up debt redemption loans, will be recovered with an appropriate rate of interest and this will continue to be used for extending credit assistance for consumption and production related needs of its member societies (a part of the interest recovered will pay for the administration); also, when it channels funds from institutional sources in due course, it retains a part of it as service cost.

2. The member-societies will pay a fixed percentage of their income to the village cooperative which will pay for the administration as well as go into the corpus fund to take up village-level development activities (which includes setting up basic infrastructure etc.);

3. The village cooperative will earn its own income from running transport services (for carrying fish and traders to the markets and back), bringing ice into the village, etc., and the income generated will go into the corpus fund.

2. Primary producer cooperatives

Structure

At the next level, there will be the primary producer cooperatives for each of the key stakeholder groups. Depending on need, interests of different stakeholders and size of each group, it might be required to split it up into smaller groups. For instance, the producers’ cooperative can be split into a boat owner’s cooperative and a fishing crew cooperative. While it is possible that the division of cooperatives into men’s groups and women’s groups will be an automatic outcome – given that the producers are all men and the processors and traders are mostly women – it might be necessary to set up exclusive women’s cooperatives, should the conditions so warrant. Similarly, if there are strong arguments in favour of forming separate groups on the basis of other considerations like age, geographical location, language or caste, they can be accommodated as long as the results are not absurd or self-defeating or divisive. The point is to ensure that each member feels at home with his or her cooperative and retains freedom to decide things for himself or herself.

On the other hand, if the number of people in a particular category is small, one might wish to club the intermediate level cooperatives into fewer entities (for instance, the fresh and dried fish



sellers could be put together into one cooperative). Depending on the local conditions and the interest of the stakeholders, people besides the target groups (such as fishmeal manufacturers or ancillary workers, including wage labourers) might also be formed into groups and allowed to set up their own programmes either at the beginning or in due course. It should in any case be the endeavour of the society to bring all sections of fishworkers in different occupations and trades related to the activity (who would include people in supplementary occupations such as basket weaving, engine repairing, boat building etc.) into the cooperatives in due course50.

Each primary producer cooperative will have its own governing body, elected on a two-yearly basis, and will also elect a member to the governing body in the village cooperative.

Functions

The primary producer cooperatives concentrate on addressing the issues at the level of the particular stakeholders who constitute the cooperative. The producers’ cooperative will be involved in setting up and managing a cooperative marketing system. In this case, the cooperative will act as a trader itself. The producers will sell their product to the cooperative and the cooperative in turn will decide to sell it to the local traders – if they pay a good price – or to the traders in nearby towns – if they don’t. It will coordinate with the village cooperative for its needs in terms of ice and transportation systems.

The fishers will obtain a receipt for the quantity and variety of fish they have sold to the cooperative, which will pay their due as soon as it realises the money from its trading activities. A part of what is due to the fishermen will be deducted to service many purposes: for instance, to repay the fishermen’s loan to the society (incurred for redeeming his loan with the trader), to pay for administration of the society activities, some into a common fund and some into his compulsory savings fund with the society (but the total deduction seldom exceeds about 10-12% of the money due to the producer). This will not only help the fishers to get a better price, but also ensures that the cooperatives can recover their loans by deducting a part of the fishers’ income for loan recovery purpose. The experience of the South Indian Federation of Fishermen Societies (SIFFS) in Kerala and Tamil Nadu in this respect is worth emulating.

South Indian Federation of Fishermen Societies (SIFFS)

The SIFFS is an apex body of a three-tier structure of autonomous organisations of small-scale fishworkers. These organisations have links in several coastal districts in the maritime states of Karnataka, Kerala, Tamil Nadu, Pondicherry and Andhra Pradesh in South India. At the base level in the coastal villages there are over 100 primary level organisations which function like cooperatives. They undertake fish marketing and cater to the credit requirements of over 8000 small-scale fishworkers. These village organisations are in turn affiliated to independent district federations which monitor and support the village level activities. They also undertake a number of commercial, technical, educational and welfare activities which are beyond the scope of the village level. At the apex level SIFFS focuses its attention on technology for small-scale fishworkers and assists in the coordination and management of the district level federations.

Taken from Kurien, 1998

50 This leads to the tricky questions like how large-scale traders and other ‘vested interests’ would be accommodated in the system, and, in the absence of any past examples to draw from, one can only leave the answers to the future.



Some of the existing arrangements between the target groups themselves will have to be understood in detail prior to making the intervention. For instance, the sharing patterns between the boat owners and the crew might sometimes (in the initial phases) become a hindrance to selling their produce through cooperative marketing system, particularly when one of the parties is not a member of a cooperative yet, and this will need to be resolved sensitively.

The producers’ cooperative will also strive – through the village cooperative (because the scales of operation will necessitate taking up the activity at a higher level; in any case, it is village cooperative which is supposed to get into support services) to provide the tools of the trade – iceboxes and fishing equipment etc – to its members at cheaper rates and/or on credit basis.

An important function of the primary producer cooperatives will be to provide credit assistance to members through the credit groups and monitor their performance. It also submits proposals for new loans to its members and stands guarantee for their prompt recovery. As the society gains financially and generates enough corpus fund, it must get involved in providing consumption loans during lean periods in order to keep the fishermen from going back to the traders to meet their basic needs.

It is not necessary that all primary producer cooperatives get involved in cooperative marketing. The fish traders’ cooperatives (both fresh and processed categories), for instance, might decide to have only a credit programme and to attempt reducing losses in the current market chains; their cooperatives can then confine themselves to managing credit systems and, through the village cooperative, to make tools of trade accessible to their members (iceboxes, material and tools for dry fish production etc) at affordable rates. However, an important function of a primary producer cooperative is to improve incomes through market mechanisms and if the traders find options for upgrading their individual access or bargaining power or capacity in terms of their marketing activity, they can test them out through the cooperative mechanism. The cooperative then gives an opportunity for improving the market conditions for individual traders. It is only if they discover more benefits from cooperative procurement, production and/or marketing that they may get involved in it.

Staff

The primary producer cooperatives will have a secretariat consisting of an accountant and will employ two or three people depending on the size of operations to manage the cooperative marketing activities on a regular basis. As in the case of village cooperative, the employees of primary producer cooperatives will need initial assistance in setting up and managing the activities and are accountable to the governing body of the primary producer cooperatives.

Source of funds

The initial source of funds for the producers’ cooperatives will be the loan that they obtain from the funding agency through the village cooperative to pay off their debts to the traders. When they begin to set up a cooperative marketing system, they must also receive assistance – either on loan basis or as a grant – from the funding agency to finance the basic costs of operation. All this assistance may be in the form of loans at subsidised rates of interest, which the primary producer



cooperatives may provide to the individual producers on a slightly higher rate of interest. As the primary producer cooperative gains strength and confidence, it will be able to repay the loan to the village cooperative.

In due course, three sources of funds will become accessible to the primary producer cooperatives:

1. From the profits generated from the cooperative marketing effort, a part is retained for society administration costs and another part for the corpus fund;

2. The revolving funds set up with the profits from marketing will bring forth some interest, a part of which will again go for administration and development; and

3. The savings made by members on a regular basis will also go into the revolving funds and generate interest for the cooperative as a whole.

For the traders’ and processors’ groups, the working capital assistance they received at the beginning from the funding agency will help in setting up systems of their own, but in this instance, it may be necessary that this assistance be retained within the primary producer cooperatives rather than recovered by the village cooperative. This is because, for the producers, the debt redemption loan is a one-off affair and once they come out of the relationship with the traders, they will not need it anymore, but for the traders and processors, their need of working capital is a perennial problem, and it is possible that their own savings will take some time before a sufficient base can be laid to finance their needs with their own savings.

The other sources of funds for the traders’ and processors’ cooperatives will be:

1. Interest generated from the revolving funds 2. Savings made by the members on a regular basis 3. A share of the profits received from cooperative marketing enterprises

3. Credit groups

Structure

The lowest level of organisation in a village will consist of groups of five members each. These will belong to the same primary producer cooperative – i.e., all of them are producers or traders or processors – but should ideally belong to different units of production. The choice to belong a group will be the prerogative of the members, provided they did not team up with their own family members or members of their own fishing system to the extent possible. It is realised, of course, that in a closely endogamous community like fishers, it is likely that everyone in a village is related to everyone else, necessitating one to enter into an elaborate but largely pointless exercise of deciding who in an extended family are acceptable as members of a group and who are not, but one should strive to see that each group has members representing at least more than two different households and fishing systems, so that the group pressure on the members to stand up to the commitment – i.e., repayment of loans – will be assured.



Functions

The function of the group is basically to act as a conduit for receiving loans from the primary producer cooperatives and ensuring that these are repaid on schedule. The groups might also approach the primary producer cooperatives to request for production and consumption credit or for tools of trade, and all such transactions will be on credit basis. Each of these requests by one of the members should be endorsed by others before it can be put before the primary producer cooperative. Besides, they will also continue with their own savings programmes and the money saved will be paid into their account with the primary producer cooperatives.

Source of funds

Being in trade or production activities themselves, the members will have their own sources of income, which this programme seeks to enhance through appropriate support. As they repay their loans to the society along with some interest, a part of the interest will go into the group’s account (or even the individual’s account) with the society and the members will thus have the assurance that they could withdraw this money at a time of need.

2. Credit system

The argument that if the existing institutional systems to help the fishers in their marketing activities do not work efficiently, then there is a need to make them do so, is even truer in case of credit systems, which are a fundamental need of the fishing communities. The existing state of things is that almost every important stakeholder in the sector is groaning under the burden of debts, which enervate and emasculate the whole system in its entirety. On the other hand, there is a well-oiled credit delivery system in the formal sector, with access to huge amounts of money and is desperately looking to lend it, but is unwilling or unable to lend the people who need it the most for several reasons. It is necessary – and absolutely essential – that this link be established in a viable and sustainable manner. While setting up a village-based credit and savings fund – as envisaged in the discussion on the cooperatives in the previous section – might address the credit needs of the primary producers to a large extent, it is a long term objective and this can be expedited and improved manifold if good and workable links are forged between the cooperatives and the banks. Already, there are initiatives from banks like NABARD to provide group-based loans through NGO-intermediation, but given a good record as an independent entity, a village cooperative could take on this role to mutual benefit.

The advantage with the cooperative acting as an intermediary is that it can make use of the best practices from both the formal and informal sectors – besides trying some of its own innovations – to ensure prompt delivery of loans to the fishers on the one hand and proper repayment of the loans to the banks. Many points in the following discussion show that this kind of flexibility is not only effective, but in many cases – providing consumption credit, recovering loan in kind – it is also essential for the success of the programme itself.



If an organisation has funds to invest in just one activity among the five suggested, it should undoubtedly get involved in credit because it has the potential to make the most significant difference to all categories of people in the fishing sector. It is rather unfortunate that little work has been done – or at least documented – to develop a viable model for credit management within fishing communities, in spite of many years of concentrated efforts on this particular aspect by so many organisations. Making credit work in a sustainable manner in fishing communities is an area that more development research should focus on.

The producers need credit for three purposes: for redeeming their debts with the traders, for acquiring productive assets such as nets, iceboxes and engines, and – during lean periods – for consumption purposes. Frequently, the motorised boat owners also need short term credit for financing fishing operations. The fresh fish traders and the dried fish producers need credit for two purposes: as working capital to finance their procurement operations and for consumption loans. They may also need credit for production related assets like iceboxes (fresh fish sellers) and processing tools (dried fish producers).

An analysis of the existing credit systems, including the informal ones, indicates that the following issues should be kept in mind while setting up a new credit system.

1. Consumption loans

In a seasonal, low-surplus, activity like fishing, lean seasons are always a major threat to the livelihood and food security of the fishers. As a true representative of hunting-gathering mode of existence, the fishing communities – particularly men – are not exactly known for their capacity to save money even when it is available. And with the approach of the lean season, they face serious deprivation which is reflected in terms of their food security, health, education and other quality of life indicators. ICM’s livelihood-based study of the poverty, food insecurity and vulnerability of the fishing communities indicates that very few families in a fishing village escape being indebted during this period. In a sense, credit has become a livelihood activity for the fishers during the lean periods.

Unfortunately, the formal credit mechanisms have steered clear of consumption credit with the result that the fishers have depended on the fish traders and moneylenders for their needs, thus entering into relationships that have definite impacts upon their production activities and incomes as well. This avoidance of consumption credit has also meant that little research has gone into studying the consumption patterns of the fishing households. Such studies might have

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shown how little was actually required for the fishers to survive through a lean period and this in turn might have encouraged the formal institutions to give more focus to consumption loans. For, the main needs of the fishers during this period are food and medical aid. All other expenses are generally put off until a good season, but these two needs basically impoverish many fishers. The reason why the trader-moneylenders are particularly generous in their loan disbursements during this period has a strong economic motive.

Be that as it may, it is essential for the credit programme to include consumption credit into the lending activities. By the very fact of its existence, it will give a security to the fishers and will ensure their full-hearted participation in the credit programme.

2. Monitoring

One important reason why the informal credit programmes succeed while the developmental ones don’t, has to do with the regular visits paid by the moneylenders to the fishing villages. That, given a proper monitoring regime, credit would work very well was nowhere well illustrated than in Orissa in late-1980s when the Bay of Bengal Programme roped in the Department of Fisheries and the banks to provide loans to fishermen for various needs. Regular monitoring by the Department of Fisheries ensured very good recovery (95 percent) and other indicators of the effectiveness of the project included lessening the period between loan application and disbursement and productive utilisation of loans assets (almost 100 percent) (BOBP 1987: 1). That the programme was latter abandoned by the Department of Fisheries has nothing to do with its actual performance.

Under the three-tiered credit management system, as discussed here, there is potential to monitor the system from at least three levels – within the credit group itself, by the primary producer cooperatives and – as necessary – by the village cooperative. By monitoring, it is not meant that the fishers are watched over for their omissions or commissions like in a classroom. It is the production and marketing systems that are monitored regularly and by being able to observe the actual conditions prevailing in the systems on a regular basis, the credit managers will be able to pitch their demands for recovery appropriately.

3. Production related recovery

The one advantage that the fishers find with the trader-credit is that it is linked to their production: they take a loan in rupees but repay it with their fish. Whatever its demerits, the advantage for the fishers is that they are not forced into paying when there is no fish catch. Seasonal activities like fishing require that the systems servicing them are tuned to seasonal fluctuation in the conditions, and this is what the traders do and the formal lending institutions don’t. The result is that while the traders manage to obtain their investment during the peak fishing period itself, the lending institutions seldom recover even a fraction of the outstanding loans. There is also the psychological advantage that the repayment in kind seldom looks as expensive as the monetary one.



For the producer cooperatives, the recoveries are linked to the production systems, so that they will have the same advantages as the trader-linked credit, but without the high cost of credit. Moreover, the inbuilt systems of individual savings will help the fishers save good amounts of money almost unselfconsciously. Even if the loan was originally received from a bank, the cooperatives can still recover their loans in kind from the producers, sell the fish and pay the bank in cash.

4. Assurance of availability of credit

The formal systems are largely based upon particular schemes of the government, which are seldom anything more than one-off ventures. The fishing communities have no assurance of being able to take another loan when they repay the loan they are currently enjoying, so there is really no incentive for repayment. The moneylenders, on the other hand, provide loans as and when required (they have their own systems of ascertaining the creditworthiness of the loanee, of course), and are always there!

When the secondary society allocates some funds for the use of the group based upon its performance, the amount will be deposited into the group’s account with the society (for a fixed period of time) and it is for the group to make use of the money only when required – or not use it at all. As experience shows, it is the assurance of being able to obtain money that is more important than actually owning it51.

By improving the information flows between the communities and the development agencies as well as banks constantly serviced, the cooperatives can also develop good links between the producers and the lenders, which will come handy for credit delivery and recovery.

5. Small size of credit groups

Experience shows that many credit programmes even in the NGO sector fail largely as a result of the size of the credit group being too large and unmanageable. Obviously, each group will have its defaulters, but when the fact that the defaulters can often get away without repaying has a knock-on effect on the rest of the members too. Monitoring a large and peripatetic group of people is clearly a serious problem, particularly when the person in charge of monitoring comes from outside the community.

The compact size of the credit group – which is confined to five people – will help the members to put pressure on one another to repay their loans as their access to future assistance will be linked to their past performance. Since the members work within particular categories of employment, the opportunities for them not only to work together but also to assess each other’s economic performance are very high, and this acts as a good leverage in recoveries. The other advantage with small groups is that the cost of credit and the time it takes to get a loan sanctioned are very low, unlike in formal systems where the cost of credit – which is seldom monetised when making comparisons with the informal systems – works out very high in terms of transaction costs and opportunity costs.

51 As one fisherman-leader put it, “It’s like with a child; if it is assured that it can skip school with impunity whenever it feels like it, it will rarely want to do so. All it wants is the assurance that it can choose to get out when things become too difficult.”



6. Carrot-and-stick

The economic programme being implemented in the village – which draws on the five-point agenda – will mean that the members of the cooperatives will have access to a range of services and not just credit. When they default loan repayments – for no justifiable reason – they will stand to lose access to these services as well. The membership of the society will also give a producer or a trader some kind of recognition and legitimacy that he or she would otherwise not have. Besides helping them to access state services more easily, this also enhances their self image. It is thus to their advantage to be in the group than be outside of it, which is a risk one faces when one does not stand up to the requirements of his membership. The economic programme is set up on strict economic principles (within reason, of course; for instance, if the producer has valid reasons for not being able to repay, he will not be penalised).

7. Insurance

When a producer takes a loan from a bank, he has practically bonded himself to repaying it at any cost. Should a cyclone happen to destroy or carry away the boat that he bought with the loan he received from a bank, he will still have the responsibility to repay his loan to the bank or default altogether, which obviously is the cheaper option. But when the same producer takes a loan from a trader-moneylender for buying a boat and loses it, it is in the interests of the trader to put the producer back on his feet just so he can repay the original loan. There are several cases of the traders giving a fresh loan to help the producer to start afresh and repay two loans instead of one. In other words, the trader actually shares the risk with the fisherman when he loans a certain amount to him.

In the case of the marketing cooperatives too, by building insurance into the programme as a basic necessity, the capacity of the fishers to recover from major disasters is enhanced manifold. Also, while the capacity of the systems to replace lost boats may not be sufficient to give huge loans to the fishermen, they can certainly help them to obtain boats from the rehabilitation programmes of the government and other donors.

8. Need-based credit

A major problem with the institutional credit programmes is that credit is made available at a time when the scheme is in operation rather than when people need it the most. The loan amount also tends to be linked more to the objectives of the scheme – which may or may not be the same as that of the credit users – and are often too large or too small. The problem with receiving credit at a time when it is not required is that it would be frittered away in no time.

Also, when the sum to be provided is much larger than what the producers and traders require, it will mean one of two things: either the down payment to be made by the ‘beneficiary’ will work out to be so high that many really poor people cannot even afford it52, or when they do, they

52 When the DRDA wants to uplift the weaker sections from poverty along sustainable lines, it insists on providing inputs worth at least Rs. 15,000, of which the DRDA’s support is confined to Rs. 5,000 while the rest is in the form of a bank loan. One can easily envisage the problems this causes to an average fish processor whose entire business capital does not exceed Rs. 5,000! She has the option to take a loan twice as much as her capacity and enhance her production systems three times the current size, or simply not take the assistance at all.



discover that the careful economy with which they have run their enterprises till then is all shot to pieces. In short, the system gets overcapitalised and, in the long run, unsustainable.

The advantage with the marketing cooperative system is that it makes credit available to fishers only when they need it and only the amount that they require. Periodically, each credit group will put a demand to the primary producer cooperative for their various credit needs – for consumption and production purposes – and the primary producer cooperative will allocate its resources to different member-groups based upon this demand. Generally, the past performance of the group will be a determining factor is allocating funds. The allocated money will continue to remain with the primary producer cooperative, and will be released in small quantities for different members based upon the recommendations from time to time made by the group as a whole. This means that the group has a certain assured amount of money in its name, but members can only use it as and when required and after convincing the other members to allow them to use it. Thus, there is the assurance of access to credit when required, but the onus of justifying it to the other members will mean that prudence will play a major part in deciding the amounts required. That each group is allotted only so much money will mean that the other members will get to lose when a member defaults, so they have a reason to make him or her pay.

9. Credit for production needs

While providing working capital to the processors and traders is implicit in the programme, the question of providing credit for production needs to the producers needs more consideration. Fishermen’s need for production related credit arises mainly from their need to replace fishing gear frequently, repair the engines frequently and invest on new tools of the trade like iceboxes for carrying onboard. While these needs are frequent and necessary for the smooth functioning of the system, they can also be very costly and debilitating. As the discussion in foregoing chapters has shown, the cost of operations is one major reason for indebtedness and failure of fishing systems.

Unfortunately, the cooperative system has to go a long way in consolidating itself before it can consider catering to the larger credit needs of its members. On the other hand, failure to provide such services will mean that the producers’ capacity to fish will decline and so will their ability to repay their loans to the society. In worst cases, this might even force them to go back to the traders! Failure of the state-sponsored development programmes, which provided assets worth enormous amounts of money but failed to take care of the day-to-day management needs, is a case in point. When the state failed to provide the minimum assistance necessary, the producers simply went to the traders, who began to dictate terms and became de facto owners of the fishing systems in due course.

It is as difficult to suggest an option to overcome this hurdle in the initial – and thus sensitive – stages of the programme as it is tempting to offer one. Perhaps the best that can be suggest is that the funding agency helps the cooperatives by providing them with some working capital assistance on credit basis, so that when the cooperatives stabilise, they will be able to pay back the loan. The working capital assistance need not be more than 20 percent of that for the debt redemption loans, so might actually work out to a reasonably acceptable sum. This can also be attempted with securing a loan from a bank – for instance, NABARD or SIDBI – but their



interest in funding a fledgling enterprise might not be so good until the cooperatives prove their worth. Once that first hurdle is crossed, obviously the cooperative itself will be more than able to take care of its members’ productive needs. Also, provided the credit systems can be shown to work effectively, it is possible that they will attract more funds from formal institutions, which will reduce burden on the cooperative system.

3. Improving production systems by enhanced access to basic needs and process improvements

1. Ice

Demand and supply of ice are closely interlinked and improving one is necessary to develop another. Thus, the programmes to set up a cold chain, i.e. ensuring that the fish is kept chilled from the moment it is brought on the boat at sea till it reached the final consumer, have to go hand in hand with efforts to bring ice into the villages and storing it for ready access to fishers.

i. Access to ice: The spread of ice is uneven in southern Orissa and wherever it is available, the access to it is constrained by the influence of traders. However, the one area where the access to ice is severely constrained is in the Chilika belt, primarily because of its inaccessibility and small size of fishing populations in the villages. In most other places, ice is available either locally or is brought from the neighbouring towns like Gopalpur-on-Sea, Brahmapur, Chatrapur, Balugaon, Brahmagiri, Puri, Konark, and Astaranga. Many traders also bring their ice supplies from Bhubaneswar to big landing centres like Puri.

The traders, when they are not the owners of the ice plants themselves (and many of them are not), enter into long term agreements with the plant operators for regular supply of sizeable quantities of ice. This – as far as could be ascertained – is the only relation between many traders and ice plant operators, although it is a powerful one because of the fact that the individual ice users in the fishing communities cannot demand for ice on a consistent (i.e., throughout a fishing season) basis, particularly for large quantities of it.

On the other hand, the cooperative marketing system as envisaged here is, first and foremost, a business entity and it deals with the suppliers like a trader does. It enters into the same kind of relationships with the ice plant owners as the traders and, if more than one village cooperative is involved in the business, can actually monopolise ice trade in an area. The OTFU, which is interested in setting up a cold chain in Ganjam district estimates that procuring sufficient quantities of ice will not be a problem so long as the demand is sufficiently big and consistent. If the experience of SIFFS in Kerala is any indication, things can come to a pass where the supra-village cooperative might one day own a few ice plants of its own!

Another important avenue to explore is the possibility of setting up ice plants where they don’t exist in the government or cooperative sector. As indicated, the economies of scale of operating an ice plant may not work at an individual village level, but it can be ensured that an ice plant is available within a reasonable distance from a fishing village. Thus, each ice plant can service the needs of a cluster of villages, which will help achieve the economy of scale. This will mean lobbying with the government (and organisations like Fishfed) to set up ice plants at necessary points. The village cooperative can take charge of pursuing this issue.



2. Setting up the cold chain: The different stages in this activity will involve setting up and enhancing the producers’ access to:

i. Onboard insulated iceboxes: Insulated iceboxes of different sizes and makes are available in the market and also can be made to order based on the requirements of a particular fishing system. Fibre Reinforced Plastic (FRP) and High-Density Poly Ethylene (HDPE) boxes are the most durable and versatile for the purpose, but wooden and galvanised iron (GI) made iceboxes too are locally available in many places. Given proper care and attention, fish kept in ice while at sea can remain without spoilage for three days, and if re-iced at regular intervals, their freshness can be kept for longer durations. Currently, iceboxes of sizes ranging from 30 kg to 250 kg are being used in a range of artisanal systems, but a majority of boats still need to install iceboxes onboard.

ii. Insulated ice-cum-fish storage systems on shore: A permanent or semi-permanent ice storage system can be set up at the landing centre to be used by the cooperative to store ice for sale and for preserving the fish that it takes to market. The village society will be in charge of the ice storage system, and lends it to the primary producer cooperatives for storing their fish. Alternatively, it can decide to lease the system to a women’s cooperative, which will then use it to:

• Keep their fish overnight in the box by paying a rent, and take them to the market the next day in fresh condition. The women in Nolia Nuagaon claimed that often 50% of their purchases are spoiled before they get to the market.

• Sell ice to other traders – such as cycle traders – who are currently forced to travel long distances for purchasing ice, which is often done after they purchased fish, which means that spoilage already advances considerably by the time ice is added to fish. Even the commission agents in the village will start procuring ice from them, if it is made available locally.

• Fishermen who carry iceboxes or at least some containers for carrying ice onboard will purchase the ice from the women group.

• Fishermen, who land their catches after the traders have left, can keep their catches in the box, until the next day, for a fee.

When the cooperative takes the ice storage system on lease, it can either arrange with the village cooperative to supply its daily needs of ice on regular basis (for a price), or just rent its vehicle and allow the primary cooperative to bring ice into the village on its own. The main advantage in allowing a women’s cooperative to manage the inflow and outflow of ice into the village is to make them play an important role in the export and urban market chains – two areas where their role is currently nominal. Ice being an important ingredient for these two chains, and its distribution still being a troublesome subject, it is worth trying to get the women’s cooperatives to take the lead in supplying it.

iii. Movable ice-storage systems: These will be the same as those used onboard, but bigger in size to accommodate transport of large quantities of fish to the markets.

iv. Iceboxes for petty traders: It is possible that the local fresh fish vendors might want to retain their fish at home rather than keep them in a communal icebox, or that the village might not find it economical to set up a communal icebox for any reason. In such cases, the



traders can access smaller iceboxes of 50 kg capacity which will help them to keep their fish fresh until it can be taken to the market. With some modifications to the existing designs, it will also be possible for the women to carry the ice and fish container itself to the markets, which will make the system even more efficient and reduce losses better.

Thus, the efforts to bring ice into the villages will be the responsibility of the village cooperative, while primary producer cooperatives will strive to make appropriate iceboxes available to their members and take part in the actual maintenance of ice stores in the village. If the individual iceboxes are lent on credit basis, the credit groups too will come into the picture. There are a few instances in Andhra Pradesh of village cooperatives approaching private icebox manufacturers to sell iceboxes to their members on credit basis (with the cooperative standing guarantee for repayment) and successfully ensuring that most boats in their villages have an icebox onboard and a similar strategy might help in Orissa too.

2. Transport

The large-scale traders expect the fishermen or their own agents to bring fish and shrimp catches to them, if the quantities are low. The agents generally use public transport to reach the traders’ godowns. When the landings are good and the effort is worth it, the traders also send a truck or a mini-van or a three-wheeler with a carriage in the back, along with ice to the landing centres.

Considering that the cooperative society will want to control a majority of the landings in the village, it will naturally need to have its own transport system. The prevalence of four-wheelers and three wheelers with carriages in the back, which are available for hire on a daily basis or for specific purposes (like bringing ice into the village for a fixed price), makes it convenient for the cooperatives to hire one of those vehicles on a trial basis in the first phase. Depending on the performance, the governing body can decide in due course to buy an appropriate system to suit its needs.

The village society uses the vehicle to bring ice into the village for storage in insulated boxes (and charges a rent for the vehicle or a premium on the cost of ice depending on its role in the activity) and to hire it out to the primary producer cooperatives to carry their fish to the markets or to the next links in the marketing chain. The existence of a ready transport system in a remote village like Arakha Khuda will connect it to the larger world like very few things can. From an

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economic point of view, the money that can be earned from running the vehicle as an emergency service can often be as good as that earned from plying its fishy routes!

The dried fish traders can make use of the vehicle to go to their weekly markets. The women themselves organise trucks when sending their product to distant markets and this can be either strengthened through the intervention of the society or even taken over by the village society, if this will mean bringing costs down for the processors. As more processors also begin to supply the lucrative northeast Indian markets, it becomes essential for the village cooperative to get involved in providing dependable services at a reasonable cost to the producers. An important function of the society can be in terms of arranging insurance for the dried fish being carried over long distances, which will reduce the vulnerability of fish traders to the risks inherent in road transport. To attain economies of scale, the vehicle hired by the village cooperative might also collect fish from other villages in the neighbourhood. If possible and feasible, the cooperatives could lobby with the government to run bus services to the villages in such a way that it suits the woman traders to carry their purchases at the landing centres to the markets in time. Since this is not a charity activity, the transporters will get to earn his costs plus a profit, while the fishers access a much needed service at a much reduced cost.

An important area of action still remains, particularly in the Chilika area: providing road access to the fishing villages. Even many non-Chilika villages are located some distance from the main road and need walking long distances to reach them. Lobbying with relevant organisations to improve the access to the fishing villages is an important area of work.

3. Process improvements to reduce losses

For fresh fish sellers and fishermen, who would tend to keep the fish with themselves for the minimum time possible, improved access to ice (for onboard and on shore usage), together with some efforts at improving the current systems of handling and sale (particularly on the beaches) will be a sufficient cause for reducing losses.

An important area of work is reducing losses in fishing operations by the producers. Frequent repairs to engines are an endemic and serious problem and they severely reduce the profitability of operations, fishing days and overall income. Interactions with the fishers reveal that an average of 40 percent of the gross income generated from fishing operations is spent in maintenance and repairs alone, while the operating costs account for another 20-30 percent, forcing the fishers to share only a fraction of their total earnings. Many of these problems are either small or at least begin in a small way, but the inability of the producers to address the problem promptly or get them repaired locally means that they end up paying a much higher price than is required – as the mechanic’s wage or for transport to a neighbouring town etc. The delays in getting the engines repaired also are manifested in loss of fishing days and, hence, income. Training the producers in simple engine maintenance and repair will reduce their dependence upon the mechanics and may help the engine to run longer and better.

For dried fish producers, whose interactions with their fish are considerably longer and involve various stages of handling, this would mean a more comprehensive change in the systems. When it is realised that poor and unhygienic processing stems as much from inability of the processors



to invest more than the barest minimum on improving the processing systems or on their tools of trade as from ignorance, it becomes clear that poor processing systems are an economic problem. Recent work has shown that it is possible to improve the systems and reduce losses with limited upgradation of skills and technology. Similarly, it is also possible – through optimisation of use of ice and salt and other materials used in processing, or developing stronger tools of trade – to reduce production costs. A large body of work exists on the losses in fish production and processing chains, their causes and consequences, possible options – ranging from simple, indigenous, low-cost interventions to very hi-tech, expensive systems – for reducing losses, and there is no need here to go into details here.

4. Improving infrastructure at landing centres and markets

Lobbying with the government for improving facilities at the landing centres and at markets will be an important area of work to benefit the target groups. While the responsibility of the local communities in maintaining hygiene at a landing centre cannot be underestimated, their capacity to undertake measures in this regard is limited for a number of reasons and is also contingent upon the creation of certain facilities – for waste disposal, for instance – at the landing centres. The role of the intermediate organisations as well as the cooperatives will at best involve assessing how the current systems of landing and marketing are contributing to losses and what kind of support is required (storage halls, chill-stores, landing jetties, fish landing platforms, drying platforms, and ice and fuel outlets etc.). Considering the possible fallout of a more serious food legislation governing the conditions of fish landing, handling, storage and transport, it is a necessary investment and, all said and done, will not cost as much as setting up a few fishing harbours.

It is possible (and necessary) that as the village cooperative consolidates and becomes self-sustaining, it will fund, or share, the costs of at least some of the basic infrastructural necessities, for e.g., drying units, ice storage systems etc, but considering the large outlays involved and the common property nature of the investment, it will be the government that will have to take an active interest in the programme first and make the community cooperatives to contribute their mite to its efforts in cash or kind. The government, in this instance, can range from the local Panchayati Raj system to a central government body like the Ministry of Food Processing or

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even an international body like the FAO (which helps in setting up pilot studies under different projects).

When it comes to improving infrastructure at the markets, obviously it has to be the government which must take the initiative to upgrade them. Once the systems are upgraded and proper facilities are provided, the processors and traders might not grudge paying some sort of user fee for making use of the infrastructure.

5. Improving information flows for the primary producer communities

Considering the diversity of factors that characterise marketing in different villages, trying to set up one market information system to suit the needs of all producers in every area is going to be clearly useless, if not impossible. Each village has its own requirements of information and the purpose of the information it generates is suited to these requirements. Thus, what is being suggested is that each village sets up a Market Information System of its own, to suit the specific needs of its different stakeholder groups. It is possible that at least some of this information will be useful to a number of other societies, particularly as they begin to coordinate their production and marketing activities together, but in the initial stages at least, the information seeks to address the specific needs of a village.

There is first and foremost a need to develop an understanding of the markets for seafood. This will naturally involve employing professional market researchers to conduct the study. The primary concern will be to understand the demand characteristics of the urban and export markets; the latter, at least until the seafood reaches the exporters within the country. The information will consist of assessing the demand for different species at different markets, economics of operation, risks involved and sustainability of demand. The information is collected on the understanding that it will form the basis for concrete action – i.e. cooperative marketing by the producers. Naturally, this will mean talking to the wholesalers, processing companies and exporters and working out the full action plan for the cooperative marketing ventures. It may be that, in the initial phase, the cooperatives will be too few and too unsure of themselves to take up marketing right up to the final buyer level and this will mean that the market studies analyse the existing market chains from the producers to the urban markets, identifying the various intermediaries, their contribution to the marketing chain and making a realistic assessment of their share in the returns. This will help the producers to pitch their marketing activities at the appropriate level in the marketing chain and take them to higher levels subsequently as they feel more confident of themselves.

Another important aspect of this study will be to develop a framework for periodical upgrading of the information so that a database can be generated on the markets in due course. The framework must be tested both for its comprehensiveness as well as for the ease with which the data can be collected. As the fishers take control of marketing, they generate a better understanding of how the marketing systems function, the margins of trade, the conditions in



which they work well and in which they don’t etc., and in the process, they also develop relationships with the markets in various ways. Developing effective systems of disseminating this information will lead to transparency of transactions everywhere and better bargaining power for the fishers.

Alongside filling the gaps in the producers’ understanding of the markets, it is also essential to fill in the gaps in the knowledge about the producers, processors and traders themselves. There is no good data on their numbers, function, and scale of operation, their needs and the general socio-economic context in which they operate. The diversity of their occupations and their geographical isolation has meant that many of them have slipped through the systems completely. For instance, the ICM (2003) study discovered that none of the very large numbers of very poor stakeholder groups in the fishing communities have ever received any kind of development assistance! For the government to take a more active interest in the markets and the wellbeing of the people involved in the markets, it is necessary that proper data are collected and disseminated. The existing studies – including the recent study by ICM (2003) – suffer from not having enough quantitative information, which is a serious constraint for any kind of policies to be made based upon the information. Samudram and OTFU are reported to have conducted a full-scale census of the fishworkers in the coastal districts of the state (Alliah, pers.comm.), but the data are being processed at the time of writing this report, so it could not known what aspects are covered in this census.

The benefits from improved opportunities

Now let us quickly take a look at how we would expect an effective implementation of these five areas of action could help the target groups in the current market chains to overcome the various constraints they face.

Access to cheaper credit

An efficiently managed credit programme aimed at providing credit at a cheaper rate and is readily and assuredly accessible to the traders in local fresh trade and processed fish trade, will:

i. Help them meet their growing investment needs; ii. Equip them to deal with monetised markets; iii. Compete confidently with other players at the landing centres and in the markets; iv. Allow them to travel longer distances to buy and sell fish; v. Help them buy better quality and variety fish to satisfy the consumer demand, and

thus consolidate their market base; vi. Withstand the shocks given by sudden influx of material from other markets; and vii. Prevent the processors from resorting to distress sales.

When credit is made available to the producers, it will help them to overcome their perpetual dependence on traders, which is considered to be the single most important cause of the fishermen not being able to obtain good prices for their produce. So, increased credit would mean better opportunities for procurement of fish for the traders and processors while they offer better opportunities for sale to the producers!



In economic terms, the immediate benefit for the traders and processors will be that they would have access to credit at a reasonable rate of interest. Considering that as much as 25-30 percent of their gross earnings from the fish trade go to service the interest on money borrowed at 10 percent per month (or sometimes a week!), there will be an automatic rise in the fishers’ income by at least 20-25%. For the producers, the increase in income would be in the range of 10-15 percent overall, which would be more if the delays in payment by the traders are taken into account.

Improving production systems to reduce losses

For the local fresh fish sellers, enhanced access to ice and transport will mean increased ability to:

i. Travel longer distances in their search for fish at larger fish landing centres; ii. Travel more easily and at affordable rates to the nearby towns and markets to ply

their trade; iii. Reduce spoilage of fish and store it for longer durations to sell it fresh and obtain

good prices.

For the dried fish sellers, the benefits with transport systems will be clear: they will help reduce expenses and risks associated with sending dried fish over long distances. Moreover, if the cost of transport is sufficiently low, they might even have the option to bring their products back to their homes if the market conditions are very poor! Recent research on reduction of fish losses in processed fish chain indicates that, by reducing the infestation and monsoon losses at various stages of production, which could vary between 20 percent to as high as 60 percent during some months, it will be possible for the processors to carry all that more fish to the market and earn more, irrespective of whether they obtained better margins of trade or not.

In case of the producers, increased access to preservation systems and transport will mean reduced dependence on the traders for these needs and increased bargaining power. Carrying iceboxes onboard will help the fishers to go long distances, stay at sea for long durations, go for more number of hauls, and land their catch at any time of their convenience because they do not need to sell their fish immediately on landing. They can afford to keep their fish in ice until such time that the traders are willing to pay them a good price, or even take the fish to the nearby town at periodical intervals to sell the traders there. By making it possible to bulk up the catches, ice helps the fishers to store sufficient quantities to bypass the intermediate links and approach a trader farther up in the market chain and earn more. Providing the producers with training to repair engines will reduce their dependence on the mechanics significantly and allows them to run their engines more efficiently.

In economic terms, the local fish traders can hope to gain an additional income of 10-15% from reduction in spoilage alone, and this will be more during summer months. The better quality of their produce and the confidence that ice will give them might increase the margins. For the dried fish traders, a reduction in cost of transport by half would mean an additional income of at least 10-12%, and it increases with the distance between the villages and the markets and also based on the accessibility of a village from the main road. Field research to assess the economic benefits of loss reduction strategies in traditional fish processing indicate an overall gain of up to



20 percent in income to the processors, which will be considerably more – up to 40 percent – during monsoon months. The gains come mainly from reducing losses, but the improved quality of product has been reported by many processors to have helped them to sell it faster, which shows that the markets might be willing to pay a better price to good product.

For the producers, the advantages with ice and transport lie not so much in reduced losses (although they will be substantial too) as in their ability to wait until they could earn more. Experience in other parts of the country – in Tamil Nadu and Andhra Pradesh in particular – suggests that the mere presence of an ice storage mechanism in a fishing village and the usage of insulated iceboxes onboard the fishing craft would automatically push the beachside prices up by 10%, sometimes more. On the other hand, being able to do their own repairs is likely to reduce their expenses significantly and add to their incomes.

Cooperative marketing

There is a clear perception among many fisher people that collectivising their economic operations (which have hitherto been largely individual ventures) at least at some stages of the production and market chains is perhaps the only option to overcome many of the problems that they face in the markets. While the fresh fish sellers may find it useful to buy their fish collectively from the landing centres and the dried fish sellers might find it equally useful to sell their fish collectively in the weekly markets, the most benefits of collectivisation will be felt by the producers themselves. Obviously, this collective business of buying and selling is not as easy as it sounds, but there is a growing realisation amongst the traders as well as the producers that it is the one way forward to keep control over the systems53.

By undertaking the sale of their fish through a collective, the producers can sell their fish directly to the companies and overcome the middlemen, liberating themselves from many constraints they currently face with the systems. Collectivisation also provides security at various levels to the fishers and allows them to lobby with the government for various services that are essential for their functioning as strong economic entities. As the cooperatives begin acting as conduits for institutional credit, the fishers’ access to it also increases.

The economic benefits to the producers become apparent when they begin marketing as a collective and bypass the local traders. As indicated, going around even one link in the chain can mean a difference of up to 20% and the groups can certainly aim to receive more if they aim higher. For the local fresh fish sellers, the advantage with collective operations is in their procurement – if several of them jointly bought their fish together, they will not only present a sizeable demand to encourage the fishers to sell to them, but also make it possible to bargain to procure fish at a cheaper price. When a group of five bicycle fish vendors began to buy fish together at Kakinada fish landing centre in Andhra Pradesh, they discovered that their cost of procurement has come down by 8 percent! For the dried fish traders, while collective procurement does provide an opportunity, their interest may lie in selling collectively. By putting together their heaps at the markets, they would easily attract the attention of the buyers and also bargain for a better price for the produce.

53 For instance, both Samudram, the fisherwomen’s organisation and the Orissa Traditional Fishworkers Union (OTFU), the producers’ organisation are discussing the possibilities for taking up fish trade in a collective manner.



Improved facilities at the landing and market centres

In the medium-to-long run, this will not just remain a ‘desirable’ premise but an important requirement for Indian seafood to reach international destinations. This activity will thus directly contribute to make the artisanal fishing operations in the southern zone in Orissa to be equipped sufficiently to meet with future threats in the form of stringent sea food legislations. More systematically organised markets will help the fish traders to deal directly with the buyers and carry on negotiations without depending on the middlemen. This is an area where the benefits are likely to be more indirect than direct, but the availability of storage space and preservation facilities in the markets, together with protection offered by the government to the traders to ply their trade legitimately and control of parasitical intermediaries can only lead to better incomes for the fishers.

Increasing information flows

Though the impact of this activity will be more implicit than explicit, its effectiveness in helping the fishers to overcome the strong filters that help the existing systems to thrive cannot be underestimated. In many ways, increased information flows will lead to awareness building, which, when supplemented with adequate support in other areas, in turn leads to collectivisation.

In the short run, knowing the prices at which a trader sells his fish to the wholesaler or further along the chain will certainly give an edge to the fishers when discussing their margins with the traders. The fact that at least half the people involved in the trade are commission agents also means that they cannot bluff the fishermen and pay less than their due. Increased awareness of the needs of different systems will also help the fishers to keep up to the requirements of their markets and reduce risks to themselves. The economic benefits will thus be indirect, but very significant.

Factors that facilitate or hamper the implementation of the new initiatives

While the constraints for implementing some of the programmes – like provision of ice or transport or improving production systems – are relatively simple, it is the cooperative marketing activity – which is closely related to improving access to credit to the producers – that is most likely to face more serious constraints. As indicated elsewhere in this report, the five-point agenda is neither a package deal nor do the five activities need implementation simultaneously. At the simplest level, the development organisation has the option to choose the simplest of interventions – say, reduction of losses in the production chain – and gradually build upon it into a more ambitious programme. It might also decide to stop with one or two activities, safe in the knowledge that doing so will certainly have increased the incomes for the targets groups sustainably.

For cooperative credit and marketing activities (for the two go hand-in-hand and, at least in fisheries, one cannot survive without the other), there are at least five factors that might hamper its successful implementation.



Fish availability

It would be a cliché to say that to sell a product in the market, one must have a product in the first place. In the fishing context, for the fishermen to sell fish in the market, they must have the assurance of good supplies. Catch fluctuations is a Damocles’ sword that hangs over the heads of all stakeholders in the sector, and the fluctuations in catches from year to year and from season to season will naturally have an impact upon a marketing enterprise, around which the entire development strategy is built.

However, fishing continues to be a profitable activity for a sizeable number of people (otherwise there will not be so many traders still around) and the economies of scale for the marketing enterprise will come from a judicious mix of a basket of commodities for sale rather than from specific varieties of fish. When fishers complain that fishing is poor, it frequently means that fishing for particular high-value varieties is poor, but there must be other species that they could target with better results. Exploring good markets for different varieties of fish might provide an opportunity to maximise returns for the fishers.

Moreover, one of the most important concerns of the cooperative marketing system is to help them overcome precisely this problem. By bringing together their individually meagre catches, the producers can – like the proverbial honeybees – put together a sufficient quantity to earn a good income. The fishers believe that a poor fishing season is frequently followed by a good one, so while setting up the systems, it will be necessary for the external support systems to be fully functional over two (or three, if funds permit) seasons and not expect the programmes to stabilise and become sustainable within a season.

Existing systems of control in production and marketing

Perhaps the most important consideration is the existing systems of economic and political organisation in the fishing villages. It is quite evident that there is a strong link between the two, with the same players frequently dominating the two spheres of action.

There is a strong focus on capital in the production and marketing systems, and the influence of market intermediaries – traders and commission agents – on the systems is very high. And any successful intervention related to markets is likely to bring about changes in the economic conditions of a section of the society. The economic programme might only wish to increase the income of the poor producers, traders and processors and help them lead a more secure life, but it is a law of nature that – should the programme succeed – it will bring about changes in the way they look at life. Economic wellbeing allows people time to reflect, contemplate, analyse and question, and the results of such introspection can be quite threatening to the people in power. Increased economic power frequently (invariably?) leads to increased political power, which might upset the existing power centres.

Moreover, as the market value of most fish has reached the peak, fish marketing has become a zero-sum game, as the jargon has it, and the benefits to a producer can only come at the expense of the trader or someone else further down the marketing chain. Naturally, the existing economic and political power structures cannot but feel threatened by any proposals to change them to the



advantage of any particular group of people and it will be their endeavour to actively undermine and finally subvert the systems. As previous experience has shown, this subversion can be direct, like procuring fish at prices consistently higher than those that competitors could pay or simply putting a ban on producers from joining the cooperatives, and indirect, like infiltrating their agents into the cooperatives or encouraging people to subvert credit programmes by not repaying their loans etc.

It is more likely that the traditional elite will dominate the cooperative systems themselves. The village elders become the members of the village cooperative governing body and dictate terms to the other members, while their wives run the women’s cooperatives. In short, the cooperative becomes their personal fiefdom. This has happened enough number of times already and will happen again, unless a strong feeling of egalitarianism is made to prevail at all levels of organisation. Still, the entrenched systems of power in the villages – with their ramifications into every sphere of life – are a difficult to problem to tackle and, if not properly addressed, can mean the end of any initiative. While this may be a problem in every area of development, this acquires a particular stridency when the programme aims to change the economic equations in the village in ways that give power to the weak. And it is difficult even to begin to suggest how to deal with it.

A very good thing about Samudram, the women’s organisation in Ganjam, is the spirit of egalitarianism that prevails in its structure and functioning. The leadership is spread over a number of villages and all their meetings are marked by intense debates that are followed by consensual decision-making (ICM, 2002a). This will certainly give hope to the idea that setting up egalitarian systems in villages is not quite impossible. Two things that any development agency might like to do in this regard would be to (i) undertake a study to see what factors helped organisations like Samudram, SIFFS and other cooperative systems in Orissa and elsewhere to overcome the social, economic and political pressures and processes and (ii) provide support to such grassroots level initiatives to evolve further and act as a model for future initiatives.

The existing strong credit linkage between the traders and most fishermen and the range of services that the traders provide to the fishermen around the year will mean that the cooperatives cannot afford to take an antagonistic, or actively oppositional, role and survive; they will end up alienating not just the traders but the fishermen whom they are trying to help. Too active pursuance of programmes to dislodge the trader linkages is bound to be a failure. The programme of action for the cooperatives has to be focused in the short term on beginning to lay foundations for enabling the fishers to overcome their dependence on the traders gradually and as their confidence grows and access to different systems increases, they will be able to overcome the shortcomings in the trader-controlled systems. There are also many villages where the existence of a vibrant fishworkers group or the non-existence of a strong trader network enables one to start laying foundation for a cooperative movement, and these may be targeted in the first few years for testing and consolidating the intervention models. For instance, working in a big place like Puri-Pentakota, where the current systems of marketing are too strongly entrenched, may not be an appropriate beginning. It will certainly have to be brought into the system, of course, but for practical reasons, if nothing else, it is necessary to work in smaller and less stratified villages that abound in Puri and Ganjam districts.



Also, for the traditional market chains, the existing systems might not be so difficult to overcome and it should be possible to take up cooperative activities with these two market chains first. The advantage in beginning to work with traditional market chains is that they are far less complicated, there are fewer obstacles to overcome, they provide a good testing ground for laying the basis for stronger cooperatives to emerge in due course and are dominated by women. When venturing into a new and potentially sensitive area like marketing, where the systems have to be built up from scratch, it would make sense to begin where at least a few things can be taken for granted and the people’s interest and involvement can be taken as assured.

Level of organisation in the fishing communities

While it is heartening to note that vibrant grassroots level organisations like Samudram and OTFU are evolving rapidly and making themselves heard at various national and international forums, the basis of their organisation as well as the driving philosophy is not exactly conducive for setting up cooperative systems of marketing. Most NGO-supported SHGs in the area – as elsewhere – also are more developmental than economic in orientation with the result that, let alone marketing, even credit systems do not work efficiently. When this is combined with widespread illiteracy in fishing villages, the problems become bigger. Cooperative management will require documentation of activities, record keeping, financial management, interactions with buyers in various places and monitoring all these aspects regularly, all of which require some literacy on the part of the members of the governing body, if not everyone. This, in turn, will mean that the positions of power in the organisation are likely to go to the people with education, giving rise to new elite in the villages.

It is thus imperative that the best intervention is also one which is the simplest, makes few demands on the systems or the people to change, and is flexible enough to withstand frequent alterations during the course of its development. As the capacity of the people – along with their confidence in themselves – grows, they will be able to address bigger things.

Past experience with cooperatives etc.

If the existing systems of economic and political power are the most aggressive external sources of threat to the initiatives, there are some insidious factors that lurk within the supposed beneficiaries of the programme too. For a number of historical reasons, some of which have been discussed elsewhere in this report, concepts like cooperatives and revolving credit have become much debased in popular imagination. Even to begin things afresh will consequently require reinventing the concepts and making sure that they are not identified in people’s minds with what preceded them.

Multiplicity of development players in each location

The one constant feature in many coastal villages (apart from the beautiful, but much underutilised, cyclone shelters) is the multiplicity of development organisations that work there. Undoubtedly, the services they offer to a community are invaluable and in many cases, but for these organisations, not available to the communities. However, this profusion of institutions and activities often leads to territorial claims, duplication of efforts or plain disharmony. Without



getting into detail, all one can say is that trying to develop a fishworkers organisation at the state level or even at the district level will mean taking the existence and the objectives of these organisations into account and developing some ways of either incorporating them or bypassing them without antagonising them or their ongoing efforts at improving the quality of life of the poor fishers.

To conclude this section, one can go on painting a very bleak picture of why things don’t work or how even good things can turn out to be disasters and get frightened to death (or at least find reasons for not doing anything). These are some real problems that have actually come true in many areas and anyone setting up new systems in the villages should be aware of them and take measures to avoid/overcome them at appropriate times in a project cycle. Clearly-focused objectives, need-based training, emphasis on setting up strong, viable and equitable systems and organisations, pragmatic and flexible approaches to accommodate the complexity that characterises the fishing sector, pilot testing activities prior to full-fledged implementation and extending support at all stages of activity (more than support, it is the confidence that comes from assured support that will do the trick) will help in addressing the issues adequately.

In terms of opportunities, there are two major positive trends that are likely to contribute to the development of a vibrant cooperative system. The first of these is the growth of strong grassroots level fishing groups in coastal districts of Orissa. The second is the raising awareness amongst the policymakers and implementers – including development agencies like the Department of Fisheries and banks – that the current state of things must change for the better, and pretty soon at that, and there is a willingness to try out new approaches to dealing with the old problems. Both these developments have still some way to go, but given more encouragement, the progress will be faster.

Mechanisms for transfer of ownership to the primary producer communities

It has been pointed out that the capacity of the fishing communities to develop or implement new systems of marketing on their own – i.e., without external assistance – is limited. It would certainly require the partner organisations to spend considerable time (and money) implementing the programmes and training fishworkers to implement them on their own. Developing good information dissemination systems and keeping the information flows open at all times will help the fishers also to get into the system quicker and begin to take control of it. The experience of SIFFS in Kerala and South Tamil Nadu is worth studying in this respect, and it would certainly be an idea to take the leading people from the fish worker organisations to some of its project areas and also establish a link with the organisation to help in the initial stages of the project.

However, in terms of access to ice, storage systems and transport, the viability of the systems in terms of reducing losses or increasing profits will be sufficient for the users themselves to make them self-sustaining ventures. It is very likely that the intervening agency’s role will finish almost as soon as it provides these services on a pilot scale. The same can be said of reducing losses in the current production systems (or making them more cost-effective). The lack of investment is basically what has kept the processors from acquiring the tools, but once the tools are made available (even on credit basis), the processors will not have any problem in adopting to them.



On the credit and cooperative marketing front, which is perhaps the single most effective intervention of all, sustainability of credit operations is what counts the most. It is hoped that at least some of the points made in the relevant sections will hold valid and the systems will function as envisaged. Experience shows that the fisherwomen are quite adept at evolving systems of disbursal of credit and recovery and hence should find no problems to manage the system on their own in the post-project phase.



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a study of the market supply chains in fisheries sector in the

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