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August 05, 2008

What can be done to save Egypt’s commercial fishing sector?

By Ali El Bahnasawy

Yields are decreasing for Egypt's fishermen.

In the beginning, no one knew why fewer and fewer fish were being caught. But now, a few years later, everyone is asking the same question: How can the fisherman continue to survive when there are simply no more fish?

Overfishing is the term used to describe the decline in an adult fish population so dramatic that there are not enough fish to breed and restock the population. While the problem varies from one place to another, and is more pronounced for certain types of fish like tuna and sardines, the over-exploitation of fish in any location affects the ecosystem of fisheries across the globe.

The UN’s Food and Agriculture Organization (FAO) states that 52% of world fisheries are fully-exploited — any more fishing in those areas would severely damage the ecosystem. In fact, 17% of those fisheries are already over-exploited. The main reason behind the overfishing is the size of the world’s fishing fleet, which at four million vessels is two to three times as big as required, according to the FAO. The FAO has urged countries to impose bans on catching certain species and introduced off-season periods in some areas.

The overfishing problem is a serious one for Egypt’s fishing industry. In fact, the Mediterranean Sea, which forms a crucial part of the local industry, is considered one of the regions where fish stocks are in greatest need of recovery, according to FAO studies.

Saleh Ismaeil, Red Sea regional director at the Egyptian Agency for Developing Fishing Resources (EADFR), regrets the opportunity Egypt missed to protect its seas earlier. “Overfishing affected the natural fisheries remarkably,” says Ismaeil. “There was a real necessity to impose the off-season period, as we’re doing now.”

Even with nearly 14 million acres (surface area) of salt and fresh water in its territory, Egypt is facing a remarkable decline in fish production from its natural fisheries (as opposed to man-made fish farms) as a result of overfishing during the last decade.

This decline is putting more than 90,000 fishermen, 4,490 fishing vessels and over 35,000 other fishing boats into what is perhaps the worst period of the industry’s history. As a result, many fishermen are turning away from the sea and taking their chances with inland aquaculture, or freshwater fish farming, a sector of the fishing industry that has recently gained momentum.

Egypt’s annual consumption of fish reached approximately 1.2 million tons per annum in 2006. While certainly a large number, at 13.67 kilograms consumed per person, it is actually less than the international average of 14 kilograms. This global average is expected to increase in low-income countries that have access to natural fisheries: China, for example, consumed 28.4 kilograms per capita in 2004, a number that is expected to grow.

The low consumption levels in Egypt are a result of inadequate production: 971,000 tons, or LE 9.3 billion worth of fish, was processed in 2006 — a very small number compared to the world’s total fish production, which reached nearly 142 million tons the same year. In the global fishing industry, natural fisheries are considered the number one source of fish. In Egypt, however, the yield from natural fisheries is declining.

The Red Sea’s fish production decreased from 82,400 tons per annum (TPA) in 1999 to 46,940 TPA in 2006. The Mediterranean saw substantial declines as well; production went from 89,943 TPA to 72,666 TPA over the same period, with the share of saltwater fishing accounting for a minimal 12.32% of total fish production in Egypt. Even natural protectorates like Lake El-Burullus, which occupies nearly 460 square kilometers, did not escape the dramatic negative trend in production: The annual catch at the lake fell from its peak in 2002 of 59,785 tons to 52,956 tons in 2006.

This decrease in domestic production has resulted in a roller-coaster ride for fish imports. In 2001, imports mushroomed to 261,430 TPA, before falling to 207,564 TPA in 2006.

“We sell imported Chinese and Thai fish and shrimps now; the Egyptian products are not enough,” says Mahmoud Ashour, sitting on a high stool and writing the revenue of the day’s selling in a huge logbook. Ashour, who manages the finances of Monir Abu-Ghaleb, one of the biggest retailers of fresh seafood in Egypt, has spent the last twenty-five years of his life working in the industry. These days are some of the worst for the fishing sector in Egypt, he says with regret: “The craft is dying now.”

In 2006, Egypt imported 207,564 tons of fish from countries like Indonesia, China and Thailand, at a cost of nearly LE 593 million. Compare this to 2005, when Egypt spent only LE 523 million importing 188,524 tons of mostly shrimp and squid, products that have almost disappeared from Egypt’s fisheries.

From Ashour’s point of view, the main reason behind overfishing is the fact that fishermen sometimes use illegal methods. “For a while, fishermen used insect powder for fishing,” Ashour says. “They throw it on the water and five minutes later the fish float dead to the surface. Back then, when we entered the market, the scent of the powder was very strong in the air.”

Not only was poison used to catch fish, but nets called el-shabah (the phantom), came into use. Because these nets have very narrow holes in the mesh, they collect everything from the sea floor, including fingerlings (baby fish). This has resulted in lower production over recent years: Catches from natural fisheries this year are at their lowest levels since 1999.

This scarcity of supply has pushed prices up; fish that used to be sold for LE 4 three years ago are now sold for double, while fish previously sold for LE 11 are now sold for LE 17.

Ashour, however, thinks that imported fish both looks better and is cheaper. “If we sell local shrimp for LE 70 per kilogram, the imported ones will be sold for only LE 55 and what is important is that people like it,” he says. Ashour believes that only an expert can distinguish the difference in taste between local fish and imported frozen fish collected months before.

Prices of the vessels are another problem fishing ship owners face today. As the boats travel long distances, the price of diesel, which has also recently increased, matters as well. In a day, a medium size (28-meter) ship will consume 10 to 15 barrels of fuel, topping 400 barrels in a regular one-month trip.

“One barrel costs LE 220. The state should subsidize our diesel. When I was working in Europe, the state did that for fishermen,” says Abdouh,a ship owner, expressing his frustration.

A month-long fishing trip using trawling techniques will cost Abdouh a staggering LE 150,000 just for food and fuel supplies. He does not have this amount of money on hand, so he borrows the money from one of the retailers at Al-Obour fish market in Cairo. By lending ship owners the money, Al-Obour retailers gain the exclusive right to sell the ships’ catches to fish markets and small shops all over the country. “I stand beside the retailer who starts an auction on my fish,” says Abdouh. “At the end I take the money and the retailer takes 8% of the total selling amount.” It certainly sounds like a good business situation for all, but the truth is another matter.

The United Nations Convention on the Law of the Sea states that every country has the right to establish the breadth of its territorial sea up to a limit not exceeding 12nautical miles or 22 kilometers from its shore. The law comes with a few exceptions for countries such as Somalia, one of the few territories that has an exclusive economic zone extending 370.5 kilometers from its shoreline, where only Somali ships are allowed to fish.

Forced by the need to repay their debts, however, Egyptian ships are violating this exclusivity and breaking international law.

Illegal fishing is giving Egyptian ships an unwanted reputation, resulting in states like Eritrea and Yemen arresting Egyptian ships that are only passing through the waters of the Horn of Africa. “Many sailors have been shot by the coast guard in these countries, but what can we do? We have to pay the retailers,” says Abdouh.

At present, out of the entire official Egyptian fleet of 4,490 powered boats, only 10 permits to fish overseas are awarded annually, according to Ismaeil. But the number of permits available is something the EADFR cannot control, as it is dependent on agreements negotiated between the Ministry of Agriculture and other countries.

China, the world’s biggest producer of fish — with 47.5 million tons in 2005 and nearly 13 million fishermen — found a different solution to the problem of overfishing. The country introduced a national program in 2001, focusing on preparing fishermen for other jobs. By training fishermen for industrial jobs and jobs in aquaculture management, China managed to reduce the number of fishermen by 13% between 2001 and 2004. Other countries with large numbers of fishermen like Vietnam and India have also started similar programs.

In Egypt, where the economic reform program focuses heavily on industrial sector jobs, copying the Chinese model certainly seems like a good idea. Mutual assistance from foreign aid programs and the government could save tens of thousands of families from increased dependence on fishing, while at the same time preserving fish populations from overexploitation. However, there is no sign the government has plans to begin a similar program soon.

Tracing its origins to China some 4,500 years ago, aquaculture, or aquafarming, is the process of raising salt or freshwater fish in containers or ponds. Having only begun its efforts in this field in the early 1980s, aquaculture is now the main source of fish production in Egypt, representing 61.2% of total production in 2006.

Growing rapidly, production in the aquaculture sector jumped from 56,599 TPA in 1997 to 498,885 TPA in 2006. By identifying districts that are close to fresh water sources and have high soil salinity that impairs agricultural activity, fish farming was a win-win solution for landowners.

According to EADFR reports, a typical aquaculture project should be no less than five acres to be profitable, with a tank size of at least two acres and a maximum of ten acres. The depth of any tank should be 1.85 meters at its center.

In an industry that is reaching crisis point as a result of overfishing in natural fisheries, aquaculture seems to be the most viable option for the sector’s success in the future. However, private sector investors will ultimately need to step into the industry and help it transform from one currently dominated by small-scale producers to one characterized by larger enterprises. Larger investments would give the industry the needed structure and access to funding necessary to modernize, grow production and improve productivity.

The private sector may also consider what is currently a missed opportunity in the industry — farming the sea, or what is known as mariculture. This involves using cages in the sea or tanks to farm saltwater fish species as well as shellfish. As the natural stocks of specific species decline, mariculture farms are more conducive to farming expensive species like shrimp, crab and lobster. This type of production of high-end, high-cost species has proved successful in countries such as China, Thailand, the US and Japan.

There are certainly risks and higher costs involved in mariculture, but Ismaeil believes it is worth the attention of the private sector. “Now we need to fish farm the sea,” he says. “This will require a huge investment and more advanced technology than in fresh water, but it will pay back well.”

The government should ultimately take a more active role in promoting the industry, by identifying missed opportunities and encouraging investment. One venture in this respect might include quantifying available fishing locations along coastal regions and allocating them for private investment, as is done with land-based development projects. The government could also provide training and job-matching services for investors, helping thousands of fishermen move from the sector to other industries. This would provide labor for some of the economy’s faster-growing sectors, while alleviating pressure on the already exploited natural fisheries.

One of the government’s most important tasks, however, would be the more stringent enforcement of restrictions on overfishing. This would decrease the country’s reliance on fish imports over the short and long-term through allowing fish populations to recover. This is not only a question of economic gains: It is in no one’s interest to let the seas become a wasteland. bt

Business Today Egypt

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