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p. 18 of 20 BACK | NEXT I. Introduction II. The Context: Fisheries in the Asian and Pacific Region III. The Bank's Experience in the Fisheries Sector IV. The Issues: Challenges and Opportunities V. The Recommended Strategy for the Bank A. Basic Principles of Bank Operations in Fisheries B. ADB’s Policy in the Fisheries Sector C. Operational Implications of Bank Policy D. Recommendation

Policy on Fisheries : V. The Recommended Strategy for the Bank

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B. The Bank's Policy in the Fisheries Sector

The Bank will adopt the following policies to guide its lending and TA operations in the fisheries sector in its DMCs:

Objectives and Scope

Consistent with the Bank's Medium-term Strategic Framework (1995_1998), the operating objectives of the Bank's fisheries policy and investments will cover four areas: (i) policy support for the development of long-term sustainable fisheries management; (ii) capacity building for development and resource management; (iii) creating and strengthening of productive capacity, infrastructure, and services; and (iv) regional cooperation. The primary emphasis will be on creating an appropriate policy and institutional environment, and capacity building to enable the DMCs to optimize utilization and ensure sustainable management of fisheries and aquatic resources.

Recognizing the rising demand for fish in the region, the Bank's policy is to support national and regional efforts to increase the available supply of fish and fish products for human consumption in a sustainable manner. In view of the current state of fish resources, the Bank will seek to accomplish this in the first instance through (i) making optimum use of harvests and reducing postharvest losses; and (ii) developing, improving, and disseminating appropriate technology for storage, processing, and distribution. Increasing fish production, either for domestic consumption or for export in the short term, will be supported only if the overriding considerations of resource conservation, stock rebuilding, rehabilitation and long-term sustainability are satisfied. Cognizance will be taken of the existing overcapacity of fishing fleets, and care will be taken to ensure that Bank operations do not accentuate the problem or in any way encourage overfishing or wasteful fishing. The Bank will apply a precautionary approach (see page15) in considering support for increasing fishing capacity, and will provide such support only where resource assessments and analyses of markets and of financial, economic, and social aspects justify the investments and indicate strongly that the increase can be accomplished in a sustainable manner.

The objectives will be pursued through the Bank's lending and TA operations, strengthening regional cooperation in fisheries through regional TAs, and using its leverage with the DMCs in policy dialogue for sustainable development. There will be greater interaction with regional bodies and organizations involved in fisheries.

Key Subsectoral Strategy

Within the bounds of its basic principles and objectives, the Bank will support the whole range of fishing activities, from artisanal (including inland and coastal) to industrial fisheries, and from capture to culture. However, the focus of Bank operations in each DMC will depend on its specific context. The broad subsectoral strategies will be as follows:

Artisanal Fisheries

Most fishers in DMCs are engaged in artisanal fisheries using unsophisticated technology. Widespread poverty among artisanal fishers, overfished resources, and increasing degradation of fishing grounds make the subsector a key area for Bank support. The widespread poverty in artisanal fishing communities contributes to resource degradation; hence poverty reduction needs to be a priority concern. However, the problem of poverty cannot be addressed effectively within the fisheries sector alone but must be tackled across sectors or within the broader national economy. The Bank will therefore assess the desirability and implementability of multisectoral projects that integrate the fisheries sector into or link it with the larger economy in terms of access to markets, government services, and employment opportunities in rural and urban centers. The effect will be to increase the geographical and occupational mobility of fishers.

Reducing dependence on fishery resources for food and livelihood is key to sustainable management of artisanal fishing. Assistance may be necessary to facilitate exit from the subsector of marginal fishers. Nonfishing employment alternatives may be provided through (i) investments in human capital through skills training; (ii) developing micro and small nonfishing enterprises; and (iii) giving access to capital, i.e., extending credit for nonfishing purposes. These activities have been supported by the Bank with varying results; lessons learned will be used in designing new projects. The livelihood alternatives need to be located close to fishing communities, and caution is needed to avoid movement to other occupations that are equally marginal. Market-based incentives could attract business and industry to relocate to the countryside.

Alternative livelihood programs need to target the entire fishing household, women included, as increasing their contribution to household income will complement efforts to reduce dependence on fishery resources. The role of women in fisheries has generally been ignored, and fishers are too often regarded as a homogeneous (male) target group. Women are active participants, particularly in artisanal fisheries, and are involved in a broad range of activities including processing, marketing, and financing. In freshwater aquaculture, women take care of the daily operations of fishponds, collect and sell fish fry, and are responsible for stocking, harvest, and mending fishnets; in the processing industry, women are employed, more often than men, for filleting, grading, canning, and packing. The division of labor between men and women varies among communities; it is essential to be aware of the gender-specific role in designing projects to elicit meaningful participation and to ensure equitable distribution of potential benefits.

The stronger participation of the stakeholders in resolving issues of access, allocation of user rights, and enforcement and monitoring will be a concern for Bank assistance. In its lending and TA operations the Bank will promote the involvement of local government units and fishing communities in fisheries management as an integral component of national policy. This will call for a clearer delineation of the roles of the communities. Empowerment of local government units and communities in fisheries management in DMCs, however, will be pursued within their capabilities to manage resources and considering the potential for upgrading these capabilities through community organization, training, and other forms of assistance. Forming and strengthening local institutions will be pursued through the active participation of NGOs in areas where they have a comparative advantage.

The Bank will assist DMCs in promoting integrated coastal fisheries management by strengthening capabilities for policy analysis and by integrating cross-sectoral programs and policies. The challenge is to contain or minimize the impacts of destructive fishing, pollution, and other forms of environmental stress on coastal fisheries before the degradation of fish habitats further diminishes the productivity of coastal fisheries, while permitting coastal capture fisheries and coastal aquaculture to make the best contribution to sustainable development and the well-being of coastal communities. The rehabilitation or maintenance of the productivity of nearshore areas including coral reefs will benefit not only small-scale fishers who are the main users of these fishing grounds but fisheries as a whole by protecting these nursing areas for most of the fish. The Bank will support DMCs in adopting effective policies and developing enforcement capacity to prevent the use of destructive fishing methods; to avoid the destruction of habitats, especially mangroves and seagrass beds; and to eliminate coral mining and the trading of coral-based products. The Bank will also assist DMCs to restore ecosystems where destructive practices have been used in the past, including mangrove reforestation.

Marine protected areas (MPAs) can conserve biodiversity, help prevent stock collapse, and supply juvenile fish that can potentially enhance some overfished stocks outside the MPA. Conflicts among competing interests and uses may be reduced, for instance, by allowing fishing activity outside the MPA, and nonfishing activity, e.g., carefully controlled tourism, inside. The Bank will be prepared to assist DMCs, through provision of technical support, to assess the feasibility and acceptability of MPAs for coastal fisheries rehabilitation and biodiversity conservation.

Enhancement includes habitat manipulation (e.g., fish ladders, construction of artificial reefs) and the release of hatchery-reared fingerlings to increase fish biomass in lakes, reservoirs, and marine waters (sea ranching). Successful sea ranching has been reported mainly in temperate fisheries in Australia, Canada, PRC, Europe, Japan, and US. Artificial reefs, popular in some DMCs, intend to increase carrying capacity by introducing additional structure into the marine environment. However, these reefs are often expensive to deploy, add only minimal new habitat, and may make fish more vulnerable to capture unless exploitation around them is well-managed. They may also deny access to legitimate fishers. Bank support for the adoption of enhancement methods will depend upon favorable assessment of all costs and benefits.

Industrial Fisheries

In terms of sectoral emphasis, management of industrial fisheries will continue to receive priority attention because of their predominance in the DMCs' production. Three major challenges need to be addressed to ensure sustainable management: (i) rationalizing domestic fishing activity and regulating access of foreign fleets into the EEZs; (ii) identifying and targeting underexploited fish resources; and (iii) strengthening monitoring, control, and surveillance systems. The offshore fishing grounds traditionally exploited by industrial fishers have been generally overfished, just like the inshore waters. The EEZ has also been increasingly under intense pressure from local and foreign fleets, although some relatively underexploited species and areas remain.

For the overfished species and fishing grounds exploited mostly by local fleets, the Bank will be prepared to assist DMCs to arrest the expansion of, and eventually reduce, the fishing fleet. The first step is stopping government subsidies and tax incentives. The second step is licensing that will specify vessel characteristics and type of gear. Licensing, together with enforcement capability, will be used to limit entry; new licenses should not be issued once the target number of vessels is reached. The feasibility and efficiency of transferable licenses need to be examined as well as other options with respect to licensing issues. The third step is (i) initiating, where applicable, regulations such as boat quotas to further rationalize fisheries; (ii) decommissioning of vessels to facilitate exit; and (iii) transferring fishing vessels to other industries.

Underexploited fisheries resources in the Region are few. Even fish stocks that are considered underexploited play a significant role in the ecosystem, and increasing harvests must be approached very cautiously to avoid damaging ecosystems and to conserve biodiversity. There are, however, certain offshore stocks, such as the Pacific skipjack and yellowfin tunas, that appear to have some potential to support increased fishing effort.³⁰ In cases where scope for expanding harvests sustainably is demonstrated by resource data, ecosystem analysis, and assessments of financial, economic, and social aspects, the Bank will adopt a precautionary approach and will first explore the possibility of supporting the transfer of vessels from overfished to relatively underexploited areas and species. Schemes that could affect the transfer include granting nonsubsidized loans for refurbishing or remodeling vessels or for purchasing new gear to exploit these fisheries. After transfers, the condition of the fishery resources and the level of fishing need to be monitored regularly. If transfers from other fisheries are not feasible, the Bank will consider support for increased fishing capacity. In these efforts the Bank will emphasize the use of fishing gear and technology which offer the maximum selectivity in targeting resources shown to be capable of supporting increased harvests.

The Bank will support the efforts of coastal states, particularly the small island developing states, to strengthen their national fishing capabilities where adequate fishery resources exist and upon confirmation of availability or development of local expertise in managing and operating offshore vessels, existence of markets, and economic viability. Where these conditions are not present, the Bank will explore possibilities for developing joint-venture agreements between local and foreign fleets, or sole operation and management by foreign firms with provision to transfer fishing technology and management expertise to coastal states. There may be situations where it is not feasible or attractive — due to economic, financial, marketing, or other factors — to develop local capacity even by means of joint ventures; in such cases, the DMC's share of the economic rent accruing from the fishery may be maximized through appropriate licensing arrangements and through supply and servicing facilities. Such DMCs could also realize improved benefits from their resources by increasing the value added from existing production through improved processing and marketing. The Bank, in collaboration with regional agencies, may assist cooperation among coastal states in the management of migratory stocks in the Pacific island area.

Aquaculture Development

The aquaculture subsector has the potential for increasing fish production for mass consumption, ensuring the supply of high quality fish, and producing valuable nonfood aquatic-based products (see page 13). The subsector has also provided valuable foreign exchange to some DMCs. The challenge is in harnessing aquaculture potentials sustainably with minimal environmental costs by developing and promoting ecologically sound technologies.

Large-scale commercial farms employing intensive technologies, and small-scale operations using generally extensive (often integrated with other agricultural activities) and semi-intensive technologies, require different approaches. For the first group, the Bank will support projects developing ecologically and economically sound aquaculture management systems that will include measures to minimize and dispose of waste products so as to avoid polluting the surrounding area. The prevention and control of fish diseases, together with the establishment of effective quarantine mechanisms, will be included in projects as appropriate. There are limited opportunities for extensive and semi-intensive aquaculture in many countries because of the increasing scarcity, and therefore higher cost, of land and water resources. Where appropriate, the Bank will support the application of extensive fish farming technologies employing indigenous knowledge for supplying fish, primarily for household consumption. For both large-scale and small-scale farms, there may be advantages to integrated aquaculture farming systems over standalone systems in terms of risk management and waste treatment and disposal. Integrated systems to be supported by the Bank include aquaculture-agriculture for food production and aquaculture-silviculture for mixed-use systems.

Several avenues exist for sustainably increasing fish production. The first and most promising is the genetic improvement (and subsequent dissemination) of strains of species with the potential for mass production (such as tilapia), which the Bank has been and should continue supporting; there may also be great scope for genetic improvement of indigenous species such as carps. Second is the introduction of species for culture across national or geographical boundaries. The Bank will support such introduction only if it can be carried out according to acceptable biosafety guidelines. Acceptable and workable biosafety guidelines have not been established in Asia, and a precautionary approach will be adopted in assessing the risks of introducing new strains. Third is the stocking of reservoirs, which the Bank could support if technical and user rights issues are resolved.

The Bank's main concern will be to increase production from existing aquaculture farms in both inland and coastal areas and the integration of aquaculture into existing farms and other enterprises.

Development of new areas will be supported only where this is shown, through thorough environmental and social assessment, to be environmentally sustainable and socially acceptable. The Bank will not support opening up new areas for aquaculture through the conversion of mangrove forests. The Bank will emphasize support for (i) research, development, and dissemination of environmentally friendly technologies for increasing production; and (ii) the extension of nonsubsidized production credit to overcome capital and infrastructure constraints.

The mariculture of fish, seaweeds, bivalves and other invertebrates holds much promise in producing high-value aquatic products. The Bank will provide assistance to the extent that these activities do not negatively alter the ecological balance in the coastal areas, particularly in coral reef ecosystems. Product diversification and the production of new high-value products to maximize production value will be an area of interest for the Bank. Private sector investment in the production and marketing of high-value products may also merit Bank assistance. Careful evaluation of possible negative impacts on the local fish supply will be a normal procedure in this respect.

The Institutional Framework

Role of Government

Some of the challenges in sustainable fisheries development and management pertain to deciding the most appropriate institutional framework. One is the delineation of the respective roles of government and the private sector. Another is raising the level of capacity and responsiveness of government fisheries management agencies in carrying out their role and functions and in implementing subsectoral strategies.

One of the important roles of government is developing, with the private sector, a conducive and enabling policy environment for sustainable fisheries development and management. The Bank, as part of its fisheries lending, will assist DMCs to evaluate the applicability of the following policies: (i) legislation and other policies that will devolve to local levels some fisheries management responsibilities over water, fisheries, and other resources in the coastal zone and in freshwater ecosystems to resolve conflicts and to promote rational resource use; (ii) adoption of sectoral market-based instruments (e.g., taxes, license fees, tradable permits) to complement command-and-control regulations (e.g., quotas, zoning, direct regulation of polluting and destructive activities) in managing fisheries and aquaculture production activities; (iii) market orientation and elimination of subsidies, price controls, tariffs, and protection for all fisheries inputs and outputs; (iv) imposition of user fees on private users and the proper pricing of public resources to promote their better use; and (v) macroeconomic policies (monetary, fiscal, and trade policies) to identify and mitigate negative impacts on the utilization of living aquatic resources.

The identified roles of government will require efficient and responsive institutions to respond to the sectoral challenges and to efficiently carry out the tasks. The Bank will support capacity building and institutional strengthening in DMCs in policy analysis, project and program formulation, implementation, research, extension, enforcement of regulations, monitoring, and surveillance of fisheries and related resources.

The role of government in fisheries development includes intervention in areas where private sector participation is not appropriate or feasible. In certain circumstances this may be the case with respect to the provision of physical infrastructure in strategic locations to support the integration of the fisheries sector with other sectors of the economy (e.g., farm-to-market roads and fishing ports). Where possible, such infrastructure should be financed by the private sector. In cases where government does provide essential infrastructure, this does not imply management of the facilities by government itself; the private sector may have a comparative advantage in this aspect. Moreover, in appropriate circumstances the Bank will assist DMCs in the application of mechanisms (e.g., build-operate-transfer schemes or variations thereof) that have been successfully employed in infrastructure development in other sectors, for private sector investment in fisheries-related infrastructure.

Statistics are important inputs in the formulation of management and development plans for the fisheries sector, and hence should be collected, maintained, and made accessible to users. Statistics should include, among other things, time-series catch and effort data for important species and fishing grounds, fishing boat registry, time-series output prices and input costs, level of exports and imports, periodic costs and earnings studies, and levels of employment. These data are usually lacking in most DMCs. The Bank will support the continuing generation of fisheries statistics and national and regional data bases, either as stand-alone projects or as part of larger projects, in conjunction with analysis and interpretation of the data and their use in formulating management and development plans.

Role of the Private Sector and Local Institutions

The private sector and local organizations will be expected to play a major and increasing role in the fisheries sector. Consistent with the basic principles outlined above and with lessons learned from past projects in the sector, the Bank will promote the role of the private sector in offshore and deepsea fisheries, processing, marketing, and exports through deregulation, rationalization of fiscal interventions, and privatization of government-owned production and processing facilities.

The Bank will assist governments to promote the participation of fishing communities in the formulation of localized coastal zone and inland fisheries management programs with people-based initiatives for resource rehabilitation, self-imposed fishing restrictions, and community monitoring of resource utilization. NGOs will be supported for organizing fishing communities, enhancing their awareness of resource conservation approaches, developing community self-reliance, and coordinating ecosystem-wide resource management plans and systems.

In the implementation of fishery projects, the Bank has used four major types of institutional arrangements: (i) credit lines for subloans to end users, (ii) cooperative societies, (iii) government-owned autonomous cooperatives, and (iv) government departments. The Bank will continue to utilize a variety of institutional structures to channel funds for fisheries development, based on the DMC-specific context. Past experience has shown that actual production and post-harvest activities are best undertaken by private sector entities and fisherfolk — organized in groups as appropriate — with government playing a supportive and regulatory role.

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