Krishnan M. and S.

Ayyappan (2005) Fish and fish products marketing: facets, faultlines

and future, Indian Journal of Agricultural Marketing, 19 (2): 1-18 ( Keynote paper, 19th
Annual Conference of the Indian Society of Agricultural Marketing, G.B.Pant University of
Agriculture and Technology, Pantnagar, Uttaranchal, India)

FISH AND FISH PRODUCTS MARKETING: FACETS, FAULTLINES AND FUTURE1

M.Krishnan and S.Ayyappan∗

Though the basic responsibility of the lead paper is to draw attention to the existing market
performance of the fish and fish products based on the structure and conduct of its market, in
the current context it is important to simultaneously educate keen readers on the special
requirements of this sector vis-à-vis other market oriented agricultural commodities as fisheries
economics is still in its infancy in India. Consider the following scenario- the stagnating marine
fish production, a fast growing aquaculture sector, an international market segment operating
practically in isolation of the domestic market, a product profile that caters exclusively to the
export market and a domestic market solely centered around low value fishes, export prices
at the mercy of the market, domestic prices on catch, institutional support practically non
existent and technology without props of an evolved extension mechanism. A classical instance
of a market that is both rigid yet latently dynamic ( Ayyappan and Diwan, 2004)

Yet the sector has a future, a bright one at that, the future is in marketing, both domestic and
international (Krishnan et. al., 2004). The export market is challenged by competition and
WTO and the domestic market, by lack of opportunities for value addition and imaginative
entrepreneurial interventions (Delgado et. al., 2003). In this context, this paper will examine 1.
The existing pattern of marine and aquaculture fish production in India and existing structure
of the markets 2. The market structure and evolving institutional support for fish marketing in
selected states in India 3. The opportunities for Indian seafood in the export market 3. The
domestic fish market and opportunities for expansion 4. Some policy options for evolving a
steady state growth path in production and marketing strategies to maximize optimum returns
to investment, to meet the nutritional requirements of the population to ensure social justice and
meet export demand.

Base Line

Global production from capture and aquaculture contributed about 101 million tonnes of food
fish in 2002, providing an apparent supply of 16.2 kg per capita with aquaculture
contributing growth in supply since 2000 ( Table 1)

1
Keynote paper
∗
Central Institute of Brackishwater Aquaculture, 75, Santhome High Road, Chennai – 600 028 AND Fisheries
Division, Indian Council of Agricultural Research, Krishi Anusandhan Bhavan Phase II, Pusa, New Delhi – 110 012,
India respectively. Inputs of Dr. C..Sarada, Scientist (SS) (Ag. Statistics), CIBA, Chennai are gratefully
acknowledged.
Correspondence: Dr. M.Krishnan (E-mail: emkay1957@yahoo.co.in)
Table 1: World Fisheries Production and Utilization (Million tonnes)
1998 1999 2000 2001 2002 2003
PRODUCTION
INLAND
Capture 8.1 8.5 8.7 8.7 8.7 9.0
Aquaculture 18.5 20.2 21.3 22.5 23.9 25.2
Total Inland 26.6 28.7 30.0 31.2 32.6 34.2

MARINE
Capture 79.6 85.2 86.8 84.2 84.5 81.3
Aquaculture 12.0 13.3 14.2 15.2 15.9 16.7
Total Marine 91.6 98.5 101.0 99.4 100.4 98.0

TOTAL CAPTURE 87.7 93.8 95.5 92.9 93.2 90.3

TOTAL CULTURE 30.6 33.4 35.5 37.8 39.8 41.9
TOTAL WORLD 118.2 127.2 131.0 130.7 133.0 132..2
FISHERIES

UTILIZATION
Human 93.6 95.4 96.8 99.5 100.7 103.0
Consumption
Non Food Uses 24.6 31.8 34.2 31.1. 32.2 29.2
Population(Billions) 5.9 6.0 6.1 6.1 6.2 6.3
Per capita food 15.8 15.9 15.9 16.2 16.2 16.3
fish supply (Kgs)
Note: Excluding aquatic plants / 2003 figures are estimates.
Source: FAO, 2004

Fish production in India rose from 0.75 million tonnes in 1950-51 to 6.2 million tonnes in 2002-
2003. Therefore, India contributed less than 5 percent to world fish production in recent years
( Ayyappan and Krishnan, 2004b). Only less than half million tonnes of total fish production in
the country is being exported (Table 2) which leaves almost 90 percent of the whole of fish
produced in the country to cater to the demands of the domestic market.

Table 2: Production and Exports of Fish and Marine Products from India
Year Fish Production (Million Tonnes ) Export of Marine Products
Marine Inland Total Quantity Value (Rs.
(000 tonnes) Crores)
1950-51 0.5 0.2 0.7 20 2
1960-61 0.9 0.3 1.2 20 4
1970-71 1.1 0.7 1.8 40 35
1980-81 1.5 0.9 2.4 80 235
1990-91 2.3 1.5 3.8 140 873
2000-01 2.8 2.8 5.6 503 6296
2001-02 2.9 3.1 5.9 468 5898
2002-03 3.0 3.2 6.2 502 6683
Source: Department of Animal Husbandry and Dairying
http://indiabudget.nic.in/es2003-04/chapt2004/chap88.pdf.
The market structure and institutional support for fish marketing in selected states

The domestic market structure and institutional support for fresh fish and fish products
marketing needs to be looked into seriously (Acharya, 1996). While some states have evolved
or are paying more attention to the structural improvement of fish marketing, others are yet to
catch up. The state fisheries departments functioning within the framework of the respective
state fisheries policy tend to be oriented towards the domestic market and the central
ministries led by the Ministry of Commerce towards the export market (Vimala et. al., 2004).
The announcement of the Marine Fisheries Policy and the Aquaculture Act has served as a
booster for the fisheries sector.

Karnataka

The Karnataka Cooperative Fisheries Federation, Mysore has taken up the programme of
marketing of fish produced at reasonable rates from producers to consumers. The Federation
is procuring fresh fish from major tanks and selling to consumers through a network of 102
retail outlets in Mysore, Mandya, Bangalore, Chamarajnagar, Chickmagalur,
Chamarajanagar, Kodagu and Hassan districts. From these outlets marketing is done through
selected unemployed youth, women and entrepreneurs hailing from weaker sections of society
in Bangalore, Mandya and Mysore districts. Primary cooperative societies are also being
assisted by the Federation to take up retail marketing of fish by establishing fish handling
sheds and retail outlets.

In order to help fisher folk to transport fish in fresh and hygienic conditions and sell, assistance
is provided for purchase of bicycles and insulated boxes with 50 percent subsidy subject to
the maximum limit of Rs.25,000 is provided for the purchase of three wheeler tempo-rickshaw
for the use of group of 4-5 persons to transport fish for marketing.

One significant development programme initiated in the state is the construction of fishery link
roads, establishment of infrastructure facilities and setting up of cold chains for fish marketing.
All the fish landing centers and fishing villages are connected to the National Highway through
link roads. There are 174 such link roads with a total length of 276.51 km all along the
coastline in Karnataka. Due to heavy monsoon conditions these roads get damaged very
quickly and require annual repairs and maintenance. For this purpose loan assistance is
availed of under Rural Infrastructure Development Fund with NABARD assistance. So far 54
roads, 9 bridges and one jetty have been sanctioned by the NABARD at a total estimated
cost of Rs. 1715.46 lakhs. Against this, an expenditure of Rs. 587.08 lakhs has been incurred.
Modernization of 13 fish seed production and rearing farms is proposed to be taken up at an
estimated cost of Rs. 978 lakhs to augment fish seed production and marketing (Gowda,
2005)

Jammu and Kashmir

During the last two decades the development of trout fisheries, mahseer fisheries, food
fisheries, reservoir fisheries and ornamental fisheries have been carried out successfully in J &
K. Culture of trout has been established in almost all the districts of the state including Leh and
Kargil of the State where trout rearing cum sale centers have been established in Wakha,
Sher Gul and Kachan, Damasana in Kargil district and Shey and Nobra in Leh district.

Fish production in the state increased from 50 tonnes in 1950-51 to 7300 t in 1977-78 and
1905 t in 2003-04. Fisheries in J&K is basically trout fisheries and is focused towards
marketing the same as recreational and ornamental fisheries. There are 20 anglers lodges
and 27 farm huts. Future strategies are focused towards development of sport fisheries in high
altitudes lakes (above 12,000 feet) and opening of new trout streams. Not much information is
available on marketing of fish in J & K in terms of cold storages and modern markets. Two fish
markets, one in Narwal, Jammu and the other at Srinagar with facilities of refrigeration and
cold storage have been taken up ( Quereshi and Bali, 2005).

Himachal Pradesh

Gobind Sagar is maintaining an unique distinction of highest per ha fish production (over 110
to 120 kg/ha.) for over one decade, the Pong Reservoir fishermen are getting highest per unit
price of their catch at landing sites (Rs. 50-83/ kg.) in the country. In view of these two
characteristic features while the fishermen of Gobind Sagar have benefited by continuous
increase in total catch over the years, the fishermen of Pong reservoir got benefited by steep
increase in the price of the harvest. The fish fauna of both these water bodies differ widely,
while Gobind Sagar is exclusively carp reservoir, the Pong Reservoir is predominantly a catfish
reservoir. In view of series of management measures taken by the State Fisheries Department,
a total of 26,421 tonnes of fish valued Rs. 5733.67 lakhs was harvested from these two
impoundments during (1985-86 to 2005). This has also helped in providing viable vocation to
over 5,000 fishermen families, constituting about 20% of dam’s oustees on sustained basis. The
State Government too, realised an income of Rs. 1140.97 lakhs by way of royalty, fee and
fines etc. in view of fishing activities. During 2004-05 alone a total of 1183 tonnes of fish
valued Rs. 447.07 lakhs was harvested by 3112 fishermen from Gobind Sagar & Pong
Reservoirs. The department’s income during a single year alone (2004-05) was Rs. 73.27
lakhs. The state has also initiated an inland fish marketing scheme valued at Rs. 49 lakhs. The
Government of Himachal Pradesh vide its notification no. fsh. A(3)-1/77 dated 15 November
1979 has given the following directives in respect of fish marketing in the state

PART VIII

MARKETING OF FISH, ITS TRANSPORT/ EXPORT OF FISH OUT SIDE ANY AREA.

Section 3 (3) (2) (I) (J) (I)

1. All fish caught by any person who has got a license for fishing with gillnet in the
water specified as reservoirs under Rule 3 (c) of these Rules shall be handed over
by the licensee to the fishermen Co-operative Society for weightment by
representative of State government and charging fee as per Rule 8 read with col.
5 of the schedule before its marketing inside and outside the State.

2. The sale of fish, so weighed under Rule 13 shall be done with in and out side the
State in consultation with the Director of Fisheries, Himachal Pradesh by the
Fisheries Co-operative Federation and where no such Federation exists, by the
primary fishermen co-operative societies.

3. If so required by the Director, the person marketing fish out side the State under
this part shall be bound to sell to the extent of the 25% of daily catch of fish for
sale in the State at rates fixed by the State Government.

4. a) No person shall transport fresh fish or processed fish from the landing centre to
any market for sale expect under the transfer certificate to be issued by the
Director or any person authorized by him in this behalf. The route of transport has
 to be adhered to as per transfer certificate. The fish being so exported may be
examined any time in transit by Director or any person authorized by him.

b) No person shall import fish into State for marketing without a valid pass issued
by the Director or any other person empowered by him in this behalf.

5. a) The Director shall lay down suitable procedure from time to time with a view to
carry out the provision of Rules in this part.

b) The Director shall have powers to fix the rates at which the fish sold
departmentally by the Fisheries Department, shall be sold at various sale shops so
defined by him in this behalf.

Uttar Pradesh

In spite of the emphasis on the over all development of fisheries for employment, income
generation and export earnings, the sector suffers from a weak marketing organization. The
fishermen as primary producer needs to be paid remunerative prices on one hand and make
fish and fish products available to the consumer at reasonable price on the other. Wholesale
markets are very few and retailing unorganized. Overcrowding and unhygienic handling of
the fish is a common sight in these markets. Due to lack of storage and preservation facilities,
bulk of inland catch is marketed in fresh condition. Although the freshwater bodies have the
advantage of influencing the supply to suit the market condition and alleviating price
fluctuation, the decision making process becomes more difficult due to uncertainty of marketing
service support. The Department has established wholesale marketing centers in five cities
namely Ghaziabad, Gorakhpur, Allahabad, Bareilly and Lucknow. Under the Mandi Parishad
scheme, the fisheries department has provided Rs. 90 lakhs, Rs. 61.81 lakhs, Rs.41 lakhs and
Rs. 26.55 lakhs for Lucknow, Ghaziabad, Gorakhpur, Allahabad and Bareilly respectively.
Shops for retailers were built by the Muncipal Corporation and the amount released was Rs.9
lakhs for Gorakhpur, Rs.9 lakhs for Varnasi and Rs.9 lakhs for Lucknow. Bicycles and insulated
boxes were distributed among selected hawkers for sale of fish in local markets. The Fisheries
Development Corporation was given Rs. 200 lakhs to purchase four insulated vans for the bulk
transport of fishes.

Under the Shaktikaran Yojana, the fishermen cooperative federation provides financial
assistance to primary cooperative societies and district marketing federations to make them
financially strong. Federation has disbursed Rs. 14.44 lakhs among the 8 eligible primary
societies and Rs.35 lakhs among five district federations till 2003-04. Among other things, the
National Cooperative Development Corporation (NCDC) provides assistance to creation of
market infrastructure facilities and establishment of storage facilities. The National Federation
of Fishermen’s Cooperatives (FISHCOFED) is also involved in the implementation of centrally
sponsored schemes on group insurance, marketing and other business activities.

Tamil Nadu

The Tamilnadu Fisheries Development Corporation Limited was established in 1974 as a State
owned undertaking. The authorized share capital is Rs.500 lakhs and the paid-up share
capital as on date is Rs.445.52 lakhs.
The Corporation is at present engaged in the following activities:-
I. Management of reservoirs by stocking quality fish seeds and exploiting them on commercial
basis;
II. Production of quality fish seeds by Induced Carp Spawning Centres at reservoir sites for
stocking in the reservoirs and for sale to fish farmers;

III. Management of ice plants, cold storages and processing plants at Mandapam, Thoothukudi
and Chennai;

IV. Supply of diesel at subsidized price to fishermen through retail outlets at Fishing Harbours
/ Jetties;

V. Supply of quality fish in prime condition to public at reasonable price through retail outlets
in Chennai, Madurai, Coimbatore, Tiruvannamalai and other important towns;

VI. Management of Fish Net Manufacturing plant at Royapuram and supply of quality fish net
webbing to fishermen;

VII. Management of Shrimp Hatchery at Neelankarai near Chennai and providing facilities to
NIOT for the project on “ Marine Living Resources Enhancement programme”.

VIII. Management of Pearl Culture Project and Pearl Oyster Hatchery;

IX. Management of Model Shrimp Farm at Karangadu;

X. Production and marketing of ornamental fishes and management of freshwater aquarium;

XI. Marketing of value added fish products;

XII. Supply of Outboard Motor/Inboard Engine to the fishermen under subsidy for
motorization of traditional fishing crafts.

The Corporation is in possession of Ice Plants / Processing Plants in the State. The processing /
Ice Plants at Mandapam has been leased out to private party.

At present, the Corporation is operating 23 Diesel outlets in the Fishing Harbours and jetties
like Chennai, Mallipattinam, Thoothukudi, Pazhayar, etc., for the benefit of mechanised fishing
boat operators and fishermen. During 2004-2005, a total quantity of 18,525 K.L. (upto Dec)
of diesel and oil was sold and earned a commission of Rs. 78.18 lakhs.

The Corporation is marketing fresh and fried fish in the cities like Chennai, Madurai,
Coimbatore and Tiruvannamalai etc., through retail outlets. During the year 2004-2005,
396.64 tonnes (upto Dec) of fish sold for Rs.201.90 lakhs.

Under the assistance received from the Government of Tamilnadu, Tamil Nadu Fisheries
Development Corporation has set up ornamental fish production centres at Aliyar and
Tirumoorthy Nagar. An ornamental fish sales centre-cumaquarium is functioning at Aliyar
Nagar. Two ornamental fish sales centres are functioning at Chennai. During the year 2004-
2005, a sum of Rs.9.21 lakhs (upto Dec) was realized as income towards the sale of
ornamental fish and accessories.

The Tamil Nadu State Apex Fisheries Cooperative Federation Limited was registered under
the Tamil Nadu Cooperative Societies Act of 1983 and started functioning from 6.11.1991
with Headquarters at Chennai. At present 589 Primary Fishermen Cooperative Societies and 9
District Fishermen Cooperative Federations have become Members in TAFCOFED and have
paid Rs.89.095 lakhs as share capital. To uplift the socio economic status of traditional
fishermen, TAFCOFED had been implementing Integrated Marine Fisheries Development
Project with financial assistance from N.C.D.C. (GoT, 2005)

Andhra Pradesh

Andhra Pradesh has bountiful resources of Marine, Inland and Brackish Water Fisheries and
vast scope for growth. The contribution of the fisheries sector is 2.83% to the Gross State
Domestic Product (GSDP). (Year: 2002-03).

Assistance to states for Infrastructure Development for Exports (ASIDE) funds .

Works in Visakha patnam fishing harbour costing Rs 202.24 lakhs were completed . For
this, Rs 156.89 lakhs was received from ASIDE and Rs45.35 lakhs was contributed by Sea
food Exporters Association. Another amount of Rs 80.00 lakhs was sanctioned from ASIDE
funds for the improvement of harbour facilities at Kakinada and Nizampatnam at the cost of
Rs.40.00 lakhs each.Rs 140 lakhs received from ASIDE funds were spent for establishment
antibiotic residue testing lab at State Institute of Fisheries Technology, Kakinada. Three labs
are also being set up at Vizag, Kakinada, Bhimavaram and Nellore with funds from Marine
Products Export Development Authority (MPEDA). Rs 20 lakhs received from ASIDE funds was
spent for a mobile laboratory, which is under the service of the aqua farmers.

Rs 280 lakhs are earmarked from marketing funds for establishment of 8 aqua labs and 4
feed analysis labs. The aqua lab at Kaikaluru is functioning and work of others is in
progress. The construction of fishing harbour at Machilipatnam taken up at a cost of Rs 470
lakhs and relased Rs 409.53 lakhs. The harbour will provide berthing facility to 350
mechanised fishing vessels . Except for dredging, all other works are completed . Rs14.88
lakhs are released this year to expedite dredging work.

The A.P. State Fishermen Cooperative Societies Federation Limited (AFCOF) has been
established as an Apex Cooperative Society under APCS Act in the year 1987. There are 4
fish retail outlets situated at 1) Gaganvihar, 2) Shanthinagar, and 3) Liberty cross Roads &
4) Vanastalipuram. Out of the above 4 fish retail outlets, 2 outlets have been given on
lease basis.

Apart from the above retail out lets the AFCOF is also maintaining 4 Mobile fish sale
counters in the following areas. 1) Saroornagar, 2) Mehdipatnam & 3) Kukatpally and 4)
Sanjeevareddynagar. In addition to the above, the AFCOF is proposed to increase the
activity. As a part of it, the AFCOF has already started one Fish Fast Food Center at Liberty
Junction.

Seafood Exports

Total world trade of fish and fishery products increased to US$58.2 billion (export value) in
2002, up 5 percent relative to 2000 and showing a 45 percent increase since 1992. In
terms of quantity, exports were reported to be 50 million tonnes in 2002, a slight decrease
(1 percent) from the 2000 level. The quantity of fish traded has been stagnant in the last
few years following decades of strong increases, and it is unlikely that the increasing trends
of pre-2000 years will be repeated in the short term. (FAO, 2004) .

Shrimp and freshwater aquaculture have made considerable difference to livelihood options,
employment and income for stakeholders both at the production as well as peripheral
occupations in India (Kutty, 1999). Ice making, feed manufacturing, hatchery seed production,
seafood processing, transportation and technology are other segments of trade that has a
huge bearing on the marketing costs structure and pricing (Ayyappan and Krishnan, 2004a).
The advent of commercial shrimp aquaculture has made more shrimp available to the
processing sector enabling them to make better use of their plant capacity and also to
diversify into value added products. The availability of the market and the production of
processed seafood do not by itself guarantee a regular market and growing income (Hayami
and Otsuka, 1992). WTO regimes in place and the HACCP compliance mandatory, Indian
seafood has to now to contend with non tariff barriers of both transparent and not so
transparent nature ( Krishnan et. al., 1999).

Production and marketing sustainability

Shrimp aquaculture has a relatively assured market. The shrimp production system has now
reached location specific sustainable levels of production ( Krishnan and Birthal, 2000). This
sector faces the problems of international price fluctuations, size of inventory in shrimp
importing countries and seasonal variations in demand. In the case of freshwater aquaculture,
though the production technology is well entrenched, marketing is a major issue that has to be
resolved. Catering largely to the domestic market, the freshwater fish availability has
increased over time tremendously. But props to the producers in terms of an assured market
at an acceptable price will reduce the degree of price and output risk and uncertainty
(Pinstrup Anderson et. al., 1997).

Fig 1: Representative shrimp prices in Japan and USA (1987-2004)

Shrimp prices Japan and USA

R e p r e s e n t a tiv e S h r im p P r ic e s
12

11

10

9
US$/lb

8
ja p a n
USA
7

4
Ja 87
Ja 88
Ja 89
Ja 90
Ja 91
Ja 92
Ja 93
Ja 94
Ja 95
Ja 96
Ja 97
Ja 98
Ja 99
Ja 00
Ja 01
Ja 02
Ja 03
04
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
Ja

Despite a slight decline in exports, shrimp continues to be the main fish commodity traded in
value terms, accounting for about 18 percent of the total value of internationally traded fish
products in 2002 (FAO, 2004).
Fig 2: Shrimp Imports in Key markets (MT) January – June 2001-04

Shrimp Imports in Key Markets (MT), January-June 2001-2004

2001 2002 2003 2004

USA 148 455 170 658 194 710 227 360

Japan (frozen 104 127 104 966 94 285 101 951

only)
Spain 50 682 52 696 51 501 59 771
France 33 902 34 842 38 557 43 849
UK 37 384 36 535 38 815 37 796
Italy 25 539 24 705 23 316 26 700

Aquaculture in India is practically synonymous with shrimp. The scope and prospects of other
species for the market are being examined. Shrimp aquaculture has traversed the classical
production function in all its segments. In the early 90s the gains in output and income rose
more than in proportion to unit investment. The mid 90s saw a dramatic fall in output in
relation to area under culture and the final years of the previous century saw the sector reach
the natural optimum. Several studies have well proved the sustainability of low intensity shrimp
aquaculture. The corporate sector has not only learnt to operate at optimal levels of
production but also involve the local population in production, transportation and marketing
(Kumar and Mathur, 1999).

Fig 3: Trends in Area and Production under Shrimp Farming In India (1990 – 2004)

180000

160000 y = -599.03x2 + 16906x + 36624

R2 = 0.958

140000

120000
y = 10.396x2 + 5546.7x + 33725
R2 = 0.8932
100000

80000

60000

40000

Area( Ha)
Production ( MT)
20000 Poly. (Area( Ha))
Poly. (Production ( MT))

0
1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04

Source: Sarada C. and M.Krishnan (2005).

Sustainable markets and marketing

Intensity of shrimp farming was always the sore point ( Williams, 2001). The sector has
reached a natural optimum which now supports low intensity farming that generates a national
average of around 700 kilograms of shrimp a hectare. This level of yield coupled with
suitably tailored marketing channels at the international levels and a fast developing niche
local market will be able to sustain this sector for a long period of time.
Accommodation of both socially and economically deprived sections of the population was one
of the positive developments in this sector overtime. With the WTO in place and HACCP being
mandatory, corporate houses are now fine tuned with the local population for maintaining
consistent production levels for catering to the ever exploding international markets. The
demand for seafood organically produced is ever increasing. Electronic traceability of
seafood exported, back to the farm where it was produced puts a big onus on the exporter to
account for each and every step of production, processing, packaging and exports.

The sector also can pride itself of being one of the most enlightened among the export
oriented economic activities. The country exports a wide range of seafood such as shrimp,
prawn, squid, lobsters and cuttlefish. In 2004-05, the country exported $1.47 billion worth of
seafood to the US, Japan, Europe and other countries. During the year 2003-04, exports to
the US had contributed 26.5 per cent of the total marine exports. This was followed by
European Union, which accounted for 24.8 per cent, and Japan with 19 per cent. In 2004-05,
European Union has emerged as the largest buyer of the country’s marine products. It has
contributed 27.42 percent of the total value of seafood export earnings for the period. The
US, which has imposed anti-dumping duties on Indian shrimp, came second with a 23.37-per
cent share. Japan occupied the next slot with an 18 per cent share. The prolonged economic
recession in Japan has taken toll on the over all imports as well consumption of fishery
products including shrimp. In recent years , Japanese per capita consumption of shrimp has
declined to below 3 kg . High consumption of shrimp nowadays, is only related to festival and
holiday seasons

Fig 4: Japanese per capita shrimp consumption 1996-2001(Kgs.)

Total volumes showed an increase of 12 per cent to 4.61 lakh tonnes, while in rupee terms, the
exports were pegged at Rs 6,647 crore - a growth of 9 per cent. However, the average unit
value at $3.20 was a shade lower than the previous year's $3.23. This could be attributed to
the overall growth of the EU's appetite for Indian seafood and healthy increase in exports of
items such as frozen squid (up 32 per cent in value terms), frozen cuttle fish (up 10.51 per
cent) and frozen fish (up 24 per cent). Frozen shrimp, the largest item in the export basket with
a share of 63 per cent in value terms, grew 7 per cent during the fiscal.

Consciousness among farmers to organize themselves, accept the international norms and
national farming regulations have also been documented (Krishnan et. al, 2004). Backward
linkage development in shrimp farming has been pronounced. Hatcheries, ice plants, feed
mills, processing plants and technology development have not only provided production and
marketing support but also have enabled substantial generation of employment and income
earning activities (Ayyappan and Krishnan, 2004).

Gains from trade and Terms of Trade

Shrimp exports from India have grown from 51,162 tonnes valued at 194.79 crores in 1978-
79 to 129,768 tonnes worth 4013.07 crores in 2003-04. Cultured shrimps contributed 61 and
83 percent to the total quantity and value respectively of shrimp exported in 2003-04.

A country will produce that commodity for which it has best comparative production
advantage. Product and market diversification along with increased volumes and value make
up improved export performance. A recent study (Shyam S.S. et al., 2004) has noted that,
there is a need to shift the composition of seafood exports in favor of higher value items.
Indian seafood exports need to diversify in both products and markets.

Fig 5: Trends in Indian Seafood Exports (1990-2001)

450000 7000.00
y = 120685Ln(x) + 95435
R2 = 0.8671
400000
6000.00

350000

5000.00
300000
y = 491.53x + 414.18

Value ( Rs. Crores)

Quantity ( Tonnes)

R2 = 0.9567 4000.00
250000

200000
3000.00

150000
2000.00

100000
Quantity ('000 Tonnes)
Value ( in Crores) 1000.00
50000 Log. (Quantity ('000 Tonnes))
Linear (Value ( in Crores))

0 0.00
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Year

Source: Sarada C and M.Krishnan (2005)

Observations, strategies and conclusions

According to FAO (2004), trade in developing countries is gradually evolving from the export
of raw material for the processing industry in developed countries to high-value live fish or
value-added products. Some countries are also importing raw material for further processing
and re-export ( Datta, 1997). Many developed countries have invested in processing facilities
in developing countries, where costs are lower (Ahluwalia and Chenery, 1974). Also, numerous
projects have been assisting fish-processing companies in several developing countries to
produce more sophisticated products through further processing in order to increase the
companies’ profitability and the contribution of the fisheries sector to the gross national
product. Gains from trade and terms of trade are a function of not only appropriate and
sustainable production technologies but also suitably modified domestic and international
trade pacts and marketing arrangements (Joshi et. al., 2003). In India, foreign direct
investment in seafood industry is one option that needs to be examined in depth. The
monetary and fiscal policies of the Government of India are suitable for imaginative and
innovative production and export tie ups (Bhalla, 1994). Institutional finance is at hand to give
best support to the sector. One of the most innovative approaches to development of
sustainable aquaculture production technologies and marketing is the use of information
technology for such efforts. The E-Choupal of M/s. ITC and M.S.Swaminathan Research
Foundation, Chennai among others has taken a lead in dissemination of information through
village knowledge centers to the target population for maximizing the reach of agricultural
and aquaculture production and marketing technologies. Such initiatives need to be duplicated
to make the best use of advances in information technology. Micro chip extension could make
substantial inroads to make best use of available opportunities.

The processing of fish in advanced forms (filleting, freezing, curing and canning) becomes an
important industrial segment when fish must be stored and/or transported to distant markets.
Storage is required when supply and demand are out of phase seasonally, i.e. when either
production or consumption are concentrated in particular periods of each year. Peakedness in
the catch is often inevitable but sometimes is due to poor organization or to the use of an
inadequate, i.e. small-scale and relatively immobile, harvesting technology. Economies of scale
in fish processing are realized principally in business organization, i.e. in the bulk-purchase of
supplies and consolidation of marketing, for example, rather than in the processing operation
itself. Like artisanal fishing and in contrast with industrialized fishing, fish processing tends
generally to be labour intensive.

The fish-processing industry and by extension the fish trade (marketing and distribution)
sometimes reflect the fragmentation and dispersion of the fish harvesting industry. This can be
a cause of excessive costs and, in the case of export trading, a source of weakness in
competition with better organized rivals. (MacKenzie, W.C., 1983)

Production technologies to back the industry are ever on the roll (Table 1). Seafood industry is
up against stiff competition. The writing is clearly on the wall. Innovate, improve, diversify,
practice scale economics or face the music. Seafood trade needs a complete stock taking. The
various stakeholders involved in the sector including the government are actively participating
to make the sector a fighting fit unit. Reports of anticipated drop in shrimp exports in the
current year owing to Tsunami need to surmounted by launching alternate production,
marketing and export strategies aimed at value added and differentiated products catering
to niche markets. Technologies on the verge of take off like crab seed production technology
are being given a greater thrust. Ornamental fishery is another segment which holds much
promise. Household ornamental fish production and exports enterprises in Kolathur area near
Chennai is a tribute to local self evolved entrepreneurship. A dynamic, vibrant and self
sustaining enterprise has evolved which has liberated local people both socially and
economically (Ayyappan and Krishnan, 2005). Mussel and seaweed production for
commercial exploitation have much potential. Similarly off beat attempts to develop low cost
ready to eat fish and fish preparations are being seriously considered for catering to the
domestic market. This will create alternative markets for surplus freshwater fish in times of glut
in target markets. Innovative and aggressive marketing strategies such as those followed by
MNC Pizza companies may be required to change the consumer tastes and preferences. But
pay offs from such efforts will have positive and significant implications for the fisher /
aquaculture communities in terms of diversified livelihood options, increased income and
employment. Increased institutional financial, insurance support and policy props will help the
industry grow faster and stronger.

As in other parts of the world, in India too, the shift to sustainable practices and
development strategies remains a work in progress and a common objective (FAO, 2004). The
enabling atmosphere is being created. Often, the supplementary and the possible lead roles
that other species and flora could play in augmenting fish production are seldom considered.
It is interesting to note that cooperative fish and shrimp farming have evolved out of necessity
rather than a deliberate intervention. Cooperation in fish harvesting, farming and marketing is
a limited economic activity, the scope of which has not been fully exploited as in the dairy
industry. Off beat efforts in both strategic planning for fisheries development planning and
marketing is the need of the hour. The scale economics of a fully integrated fishing, farming,
fresh fish marketing including processing will not only enable the maximization of returns to
investment but also ensure sustainability of the sector.

Table 1: Some corporate / joint sector initiatives in aquaculture and marine fish production
and marketing technologies 2003 - 04
S.No. Company/ JS Location Technology Initiative Collaboration
1. M/s. Waterbase Nellore Shrimp Nutrition and Health M/s. INVE, Belgium
Ltd Care and Broodstock
Management
2. AP State Marine BioTech Development of shrimp disease M/s. Biogenus Inc.
Government Park, Andhra vaccines USA and University of
University Mahidol, Thailand
Vishakapatnam
3. M/s. Castlerock NA Frozen ready meals UK based company
Fisheries Ltd (CFL
5. M/s. Biogenus Kumta / Nellore DNA probes for virus prediction M/s. Biogenus Inc.
India Ltd. and analysis, etc. USA

6. CMFRI Cochin, Multi Locational Mussel, Seaweed, lobster, All stakeholders in the
CIBA, Chennai, demonstration ornamental fisheries, crab seed Fisheries Sector
CIFA, farms / Institute and culture technologies, sea
Bubaneshwar, facilities bass culture, improved
CIFT, Cochin, freshwater fish production,
CIFRI, improved packaging, enhanced
Barrackpore reservoir fisheries production
technologies.
7. MPEDA, Cochin / East and West Conversion of trawlers for Long Fishers / Sri Lankan
Association of Coast Lining. Exporters
Indian Fishery
Industries, Vizag
Source : Press Reports
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