DevFish study identifies best models

Dionisia Tabureguci
Countries in the Pacific are likely to get more economic benefits from their tuna resources if they formulate policies that encourage onshore catching and processing, a recent study has revealed.

In what is expected to be of some interest to policymakers, industry financiers and investors in the region, the study, carried out by the Development of Tuna Fisheries in the Pacific ACP Countries Project (DevFish), found that a combined fishing and processing operation is not just a profitable business. It does more for the nation in terms of job creation, contributing to government revenue and the country’s balance of payment, as well as actively stimulating the domestic economy through net local purchases.

ECONOMIC BENEFITS OF DOMESTIC TUNA LONGLINE FISHERY

Titled “An Assessment of Development Options in the Longline Fishery”, the study was conducted by DevFish into the tuna longlining method of commercial fishing.

“Data was collected from tuna fishing and processing companies in four countries - Cook Islands, Fiji, Marshall Islands and Papua New Guinea. These enterprises operate some 70 longline vessels, catching around 15,000 tonnes of tuna per year, as well as most of the larger processing plants for longline caught in the region. Unlike some previous studies, we used actual financial results for 2005—not data from elsewhere in the world—and there are a few assumptions,” said the report summary.

The study found that tuna longline fishing and processing companies in the region fit into one of the five models:
• A ‘conventional’ domestic longliner exporting most of the catch as chilled whole fish;
• A domestic (local flag) longliner which is based at, and lands fish directly to, a foreign cannery;
• A factory which processes tuna and by-catch for export as loins, steaks, etc;
• A combined longline fishing and processing operation; and
• A foreign vessel fishing under an access agreement and landing its catch overseas. 

DevFish found that on average, well over two million metric tonnes of tuna are being hauled out of the Pacific waters annually using various fishing methods.

Whether or not Pacific islands nations are getting optimum benefits from this activity has not been comprehensively quantified. 

“There are different ways of measuring the benefits of an economic activity like fishing. Some economists believe that the most important measurement is the economic rent—essentially the difference between the value of the catch and the cost of production.

“While this is certainly a good measure of efficiency, it does not consider the question of who benefits. A national tuna fishery could have a high economic rent, but with most of this taken offshore as profits by foreign companies, most Pacific islands countries would consider this a poor deal for their countries which are more interested in benefits to their national economies.

“It is also important to use measures that can compare different fishery development approaches in different countries—a small fishing boat will not earn as much as a big one, for example—and to convert value to a common currency.

“In this study, the key measurement used is value added, which was calculated in US dollars for each tonne of tuna.” 

DevFish put value added to the national economy by longline operations at over US$1600 per tonne of tuna, far surpassing the US$800 per tonne value added contribution by conventional longline operations. Contributions by the other three models were much lower.

With this finding, DevFish will, in the coming months, move to encourage policymakers in the region to re-look at the structures of their tuna fishing industries. “Optimisation of benefits to the national economy requires a more proactive policy environment that can respond to economic findings from studies such as this, particularly those done at national level.

Previous emphasis on the development of the catching sector may have occurred at the expense of the processing sector, which, if true, has been to the detriment of overall returns from the long-line fishery,” the report says. 

The study identified the development of large scale commercially viable onshore value added processing as a key element in increasing returns from the longline fishery market and as such, direct foreign investment should be encouraged in the processing sub-sector.