India

India still has no plans to allow 100% foreign fishing vessel operations into its rich fishing grounds, Mr Nair told WF and while joint ventures are allowed there are none at the moment. That policy has been in place since the later 1990s. It reflects a general government strategy to hold control of many national assets. Where government has opened up parts of the economy to foreigners, it has done so slowly with the aim of avoiding fallout from the vagaries of the international investment community.

India’s Prime Minister, Manmohan Singh, and Montek Singh Ahluwalia his financial and planning lieutenant, devised that approach in 1991. Mr Singh, a former governor of the central Reserve Bank of India was Finance Minister, Ahluwalia his Finance Secretary. They reduced the clogging red tape of the “Licence Raj” to rescue India from near bankruptcy. Both men are in situ today and their gradualist liberalisation may have protected India from some of the credit crunch.

Mr Nair has that same economic asset conservation strategy. His view takes in the practical world scene as he has worked vessel decks and done research around the globe. Born in Calicut (Kozhikode) in the fishing state of Kerala, after his MSc in zoology he joined the Fisheries Department in 1971. Then there was a postgrad spell for three years on industrial fisheries development in Soviet Astrakhan, before heading off for more working research in Grimsby. After two more years research on operations management he headed the four-month, Indian Antarctic Krill Expedition. He has fished the Atlantic and Indian Ocean and was head of India’s National Institute of Integrated Fisheries Project for eight years to 2000.

Tuna and cycles

He considers the regular, natural cyclical growth and decline of a stock is a basic criterion for planning and strategy. “It happens – [our] pelagic stock, (sardine and mackerel), are following the cyclic [model] but there is no serious sign of depletion or anything. That is major stock”.

As for tuna, Mr Nair says that Indian waters are possibly the only place where there is more tuna potential left.

“The situation is bright because of the overall appreciation of tuna in the world market. Tuna was not a target in India [before] but now there’s a serious looking at tuna fishing and even small boats are trying to catch it. Prices have soared. For so many years it was US$0.90c per kilo and it has now gone to something like four to five dollars,” with higher prices for sashimi grade. Thailand is a main buyer for canning, he said.

In late January, Commerce Minister Jairam Ramesh (another figure from the early Singh-Ahluwalia reform team) was slated to visit the Indian Ocean’s Maldives for economic collaboration talks. He has been quoted as saying other countries have benefited from India’s inaction on maximising its fisheries resources - so there is a clear political push on for fish. Tuna is high on the visit’s agenda because the Andaman and Nicobar (A&N) islands’ tuna resource is perhaps 30% of India’s total tuna stock, officials say. Tuna growth would also reduce dependence on shrimp which have been around 50% of marine exports by value, they added.

The Action Plan announced by Jairam Ramesh in December, will fund training of fishermen and conversion of their small 'country' boats for tuna longlining as well as newbuildings of medium vessels. Officials said there will be money for electronic fish-finding gear and communications, GPS, insulated/refrigerated holds and ice making machines on mechanised boats. The aim is to encourage owners to move from one-day sorties to several days at sea.

There are plans for a new air cargo terminal at Port Blair, the A&N capital, to handle tuna exports. A&N’s Lt. Governor, Bhopinder Singh, has said the Andaman sea has only one per cent of India’s fishing vessels and most are only traditional craft such as outriggers. Indeed, Mr Nair pointed out that India only has about 100, 50-50m ocean-going vessels. All privately owned, they include 50 tuna longliners and some squid jiggers. This is tiny compared with the 1.04 million non-motorised craft and some 75,000 powered by outboard motor.

Experience of gear and vessel conversion in Europe could mean some consultancy work in India for foreign fishing operations and yards, as well as a big new market for low-end electronic equipment.

The official plan is for India’s fish exports to be worth $4 billion in total by 2013 (including $500mn for tuna, against $29million in 2007/8) and $6bn in total by 2017. Time will tell.

Sales shift East

Singapore is a major trading partner and investor in the Maldives and would also be interested in other fish which are available from nearby Indian waters. All these moves indicate a further shift of Indian sales from West to East. The region’s countries’ are expanding their new, global, fish marketing front, and collaboration through the Bay of Bengal Programme continues to grow. Its head is Dr Yugraj Yadava, a former India Fisheries Development Commissioner and known to WF readers since 2000.

Earlier problems with India’s new testing labs have largely disappeared, due in part to certification standards required by the EU which is the biggest buyer of Indian fish. “The EU has done a good thing to us by insisting on certification,” Mr Nair said. Of course hygiene conditions at the retail end in India might put off some EU consumers.

Mr Nair says quality is up overall and while the cold chain is still not satisfactory, it is growing, he says. Air freighting, for live items to the Gulf, Hong Kong and Singapore, continues from Kolkata and Chennai through specialised traders. Live, exotic ornamental fish exports, intended as a monsoon income backup for fishermen has, ironically, worked out better for land households. Mr Nair says the problem was that the fishermen sold the rare ornamental catch for export, instead of taking it home to breed and sell, so damaging the small stocks. “But [exports] of exotics are comfortably growing,” he said.

Mr Nair told WF that international competition over shrimp exports has also changed the sales profile. China is still a major buyer of low-cost finfish and ribbonfish for processing. However the US, once lead buyer because of the value percentage of shrimp it took, is now in fourth place. Of total fish exports the EU takes 35 per cent by value, Japan takes 15, China 13.2 and the US 13.19. According to the latest figures (2007-2008 financial) finfish (pomfret, rock cod and similar species) export levels are variable – frozen fish alone, accounting for about 500,000t, was down about 19% in volume though prices were stable. Total farmed and caught fish amounted to some six million tonnes, of which farmed was 4.2mnt, compared with 3.2mnt in 2002 - a big jump.

Processing chance

WF asked why modern processing plans introduced from the early 1990s were still running at well below capacity. Mr Nair explained: “They were only doing shrimp in those days. They have now converted into other fish. [But] on average they are only operating at about 20 to 25%.” WF asked why were Chinese and Vietnamese plants so good at processing, right up to ready-made meals. After all, there were examples of a few Indian companies in Kerala profitably producing ready-made products which they started 100 years ago when the British were here.

“As I understand it, our plants [were] designed for capacity for the peak season. And of course that entire capacity may not even be sufficient in the peak season.” For example there are very high catches just after the monsoon on the West coast from Maharashtra (capital Mumbai) to Gujarat, and Kerala, he said. “During the peak/lean season you don’t have the mechanism to stock raw material…storage is not properly taken care off. Number two, there is no system of outsourcing raw material, as in China and Thailand. We are slowly working at that. That is going to happen.”

While Iceland might store catch for later, India did not have the same thinking, he said, adding, “Probably most of our exporters are working on an order to order basis. They take the order and then try to catch it as early as possible.” They might have cold storage but, even then, they won’t hold catch, he said. Power cuts in the past have also destroyed frozen stocks in Kerala so wholesalers are wary.

Foreign storage companies and processors, linked to retailers, say in Europe, could tackle this problem with Indian partners. With no direct foreign fishing allowed, this could be a second-best way of getting access to the country’s available sea stocks which Mr Nair puts at a conservative 3.9mnt per annum compared with estimates a few years ago of 3.5mt.

He is aware of the debate in Europe which says the EU cash agreements with fish-rich developing countries mean the latter lose assets to foreign trawlers and the value-addition goes to European plants. Mr Nair says they might examine how India has reached a stage of stock management which gives a growing resource, and where most catch is used and sold at a good price. There is at least a million tonnes “spare” and much of that is untapped in the deep sea, notwithstanding the present push on tuna. Stock data capture by various research bodies is improving, but that is another story.

The Icelandic bank Glitnir, with a mission interest in fish sector investment, was moving in 2007 and 2008 to increase its investment role in India. But Glitnir’s collapse, and its being taken in hand by the Icelandic government in October, does not bode well despite Glitnir saying it will refocus its international operations back on fish. It is not clear how many Indian companies may be affected by Glitnir’s misfortunes.

Mr Nair is not a great believer in the value of per capita figures for domestic consumption, pointing out that it is among river and coastal populations where fish eating is a tradition and so a national average of eight kilos and a target of 10kg is not representative. However, the domestic market could eat more as people shifted from meat to fish for health reasons, making fish more fashionable. Of course the fuel costs have been a major hit on motorised coastal fishermen, so the farmed sector may benefit. While the government has tried to reduce fuel taxes this has to be done within the framework of subsidies and the World Trade Organisation (WTO) – one reason why India has been resistant to various elements in the WTO talks which Mr Nair has attended from time to time.

Fresh scampi

So aquaculture is important and his policy remit over the farmed sector has led him to push the development of giant freshwater scampi farming (machrobrachium rosenbergei). This is in part a response to the fall in the international value of farmed tiger prawn because of what he calls “stiff competition” right across Southeast Asia where export quantities have increased.

India’s shrimp farming infrastructure nationally has expanded beyond recognition. It is now 162,000 ha. total area, with 122,000 ha. farmed. Production is 106,000t with average production of 0.78t per ha., and most is for export.

He is clearly excited about his new star, freshwater scampi. He says they are much bigger than Norwegian prawns (nephrops norwegicus). Starting recently from almost zero, there are now 5,000 ha. which produced 27,000t last year.

He believes diseases in the farmed sector are no longer such an issue as before. He puts this down to lower stocking densities, improved disease control through awareness training, popularisation of sustainable farming practice, seed screening and development of specific pathogen free brood stock etc. Stock is being imported and they have watched the risk of introducing alien stock, and kept an eye on cases of contaminated stock getting into other countries over the last three years. Indian buyers were in two minds about how to control this but Mr Nair says his officials took a decision to impose their own quarantine regulations and inspection tools to protect India. They are monitoring any threat of white spot and also epizootic ulcerative syndrome caused by fungus. “We have managed all these diseases and they are under control and we have not had viral haemorrhagic at all,” he said. Further, they are expanding their organic production, free even of allowed antibiotics.

Finally, extensive IUU pirate fishing “has come down and almost no cases involving large foreign tuna vessels have been reported, thanks to a vigilant Coast Guard, which is well established now”, Mr Nair said. Even the small boat spats, with Sri Lanka, and with Pakistan off the coast of Gujarat, are down. “The India-Sri Lanka [line] is often crossed by fishermen from either side. However some practical measures are in place such as joint interrogation teams etc. [which] quickly to resolve capture of boats and fishermen,” Nair said.