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Species Diversification in Aquaculture and Domestic Fish Marketing in India

S. Ayyappan, A. Gopalakrishnan1 and B. Ganesh Kumar2

Indian Council of Agricultural Research, Pusa, New Delhi 110 012

Email: ayyappans@icar.org.in, ayyapans@yahoo.co.uk

1National Bureau of Fish Genetic Resources Unit, Kochi 682 018, Kerala 2National Centre for Agricultural Economics and Policy Research, Pusa, New Delhi 110 012

Ayyappan, S., A. Gopalakrishnan & B. Ganesh Kumar (2009). Species Diversification in Aquaculture and Domestic Fish Marketing in India. pp 13-22, In: Indaqua 2009 Souvenir, 21-23 January 2009 at Bhubaneswar, Orissa, 105p, Organized by the Marine Products Export Development Authority (MPEDA), Govt. of India, Kochi 682 036, Kerala, India.

Introduction

Aquaculture is the fastest growing primary production sector in the world at present and of all aquatic products consumed currently, aquaculture accounts for 38%, with an annual production of over 55 million tonnes valued at US$ 60 billion. Asia dominates aquaculture production of the world, and currently contributes 87% to the global cultured finfish production. India is a major maritime state and an important aquaculture country in the world. Being home for more than 10% of global fish biodiversity, the country ranks third in the world in total fish production. While marine sector is almost constituted by capture fisheries, aquaculture has been the principal contributor in inland fisheries sector, with a share of 77%. With the increase in demand for aquacultured foods, there is need for more efficient production systems. Though the country is rich in aquatic resources, the index of biodiversity utilized for aquaculture is of the order of 0.13 (~85% from Indian major carps; ~ 5% air-breathing fishes; ~10% rest all species together). Hence, for the sustainability of aquaculture, more species need to be brought into the culture.

Species Diversification in Aquaculture Mariculture Mariculture can greatly supplement marine fisheries and given the wide spectrum of cultivable species and technologies available, the long coastline and the favorable climate, mariculture is likely to generate considerable interest amongst the coastal population. One of the milestones in the seed production of marine finfishes was the development of hatchery technology for commercial seed production of sea bass (Lates calcarifer). Protocols for captive broodstock development, induced maturation, Paper for MPEDA ‘INDAQUA 2009’ Souvenir

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breeding and larval rearing have been standardized. Technologies for a couple of another species are presently available in the country and there is an urgent need for developing a package of practices for several more commercially important species (e.g. grouper, cobia, sea bream and pearl spot).

Commercial culture of edible oyster (Crassotrea madrasensis), green mussel (Perna virids), brown mussel (P. indica) clams (Meritrix meritrix) and blood clam (Anadara granosa) in captivity has met with success. Entrepreneurship in mussel culture with interested markets is growing in coastal areas. The first commercial mussel farm in the country was set up at Padanna, Kasaragod, Kerala and every year the number of farm units have been increasing steadily. The significance of group farming activity was brought out through the activities of Women Self Help Groups. The farmed mussel production has been estimated as 10,600 tonnes, mainly from Kerala. Technology for the culture of marine pearls and farming of the pearl oyster Pinctada fucata in open sea as well as shore-based systems has been developed, that could be put to a larger commercial use, with the added advantage of higher growth rates in warmer tropical waters of India as compared to others. Possibilities of cultivation of sea cucumber, Holothuria scabra must be explored, with its achieved success in breeding. The growth H. scabra in the shrimp farms was found to be three times faster because of the rich organic matter present at the bottom of the farm. The prospect of developing commercial interest in lobster farming (Panulirus spp. and Thenus orientalis) in India seems bright due mainly to the substantial increase in price consequent to the heavy demand from export market.

The open sea cage culture has been expanding on a global level and is viewed by many stakeholders in the industry as the aquaculture system of the millennium. The Indian coast offers several ideal locations for cage farming. The potential fishes for cage culture include groupers, snappers, seabass, rabbitfish and cobia. A few modern demonstration farms could be set up at suitable sites by entrusting the work with developmental agencies of central/state governments. The traditional practice of artisanal cage farming can also be improved and expanded by extension and training programmes to the fishermen by central/state government developmental agencies.

Capture based aquaculture (CBA) has been defined as the practice of collecting seed material from early life stages to adults from the wild and its subsequent on growing to marketable size in captivity, using aquaculture techniques. This category of farming includes the rearing of some species of finfish, most molluscs and certain forms of the extensive culture of marine shrimp. The production of finfish, especially carnivorous species (including milkfish, groupers tunas, yellowtails and eels), through CBA, is currently receiving the attention at the global level. CBA is an interface between capture fisheries and true aquaculture and provides an alternative livelihood for local coastal communities in developing countries and several industrialized countries. This requires to be pursued and standardized in the country.

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The ultimate answer to a long-term sustainable trade of marine ornamental fishes is the development of breeding and culture technologies. About 200 species of brilliantly coloured marine ornamentals are recorded in and around the Lakshadweep and Andaman and Nicobar Islands. Marine ornamentals such as Amphiprion percula and A. ocellaris have been successfully bred and their seed production technology standardized. Success has also been obtained on the brood stock development, larval rearing and seed production of seven species of ornamental damselfishes. Another significant achievement obtained is the seed production of sea horse. Entrepreneurship response would determine the commercial projects with assured necessary institutional finance. These species will form viable choices for shrimp farmers as well as alternative crop for ecological balance of the coastal aquaculture systems.

Brackishwater aquaculture

Brackishwater aquaculture presently is synonymous with coastal aquaculture, that too dependent on a single species, tiger prawn, Penaeus monodon. However, with increasing salinisation of inland soils, spreading to over eight million hectares, inland saline aquaculture could become an important economic activity in the years to come. The major problems of the sector, viz., lack of disease-free shrimp seed, slumping prices of shrimp in overseas markets and lack of diversification are impacting on the growth.

While efforts are being made to produce specific pathogen-free shrimp seed both through selection programmes in the country and establishment of a multiplication centre for SPF seed, domestic markets are being pursued and diversification protocols for Penaeus vannamei, seabass farming and crab fattening formulated. Ensuring pathogen-free broodstock being the major challenge, it is necessary that appropriate quarantine and biosecurity measures are adopted in the hatcheries as an immediate measure. In order to overcome the problem of deficiency of broodstock, development of captive broodstock and domestication can be an alternative for supply of disease-free seed. Another priority is the introduction of effective genetic improvement programmes for species such as the Indian white shrimp, Penaeus indicus using selective breeding, as this will result in considerable gains in productivity. Seabass culture, with standardized seed production and feed formulation, is making a headway in several coastal states.

Coldwater fisheries

The capture fisheries in upland water-bodies of the Himalayan region and Nilgiris, Kodai hills and Munnar high ranges of the Western Ghats in Peninsular India are poorly developed primarily due to low natural fish yield, difficult terrain and inaccessibility. The promotion of rainbow trout and brown trout farming through scientific management offers a huge scope for enhancing production for both domestic and export markets. Besides, bringing natural Himalayan lakes located at different altitudes and newly created and existing upland reservoirs under farming can improve the fish production in hills to a great extent. There is a significant potential for

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developing sport fishery based on trouts and indigenous mahseers, which can generate economic avenues for people in remote hill areas through fish-based eco-tourism.

Freshwater aquaculture

With an annual production of over 3.8 million tonnes from the inland fisheries sector, the country has occupied the second position in the world. Such growth has been possible due to impressive developments in aquaculture, mainly through carp culture in freshwater ponds and tanks as also the integrated fish farming practices. During the past two decades, the inland aquaculture fish production has increased to 2.9 million tonnes, with carps alone contributing over 85 per cent. A host of technologies developed over the years has contributed to such growth in the sector, with carps, catfishes and prawns being important components of culture practices. The three Indian major carps – catla, rohu and mrigal, together contribute a lion’s share of over two million tonnes, with exotic silver carp, grass carp and common carp forming the next important group. Culture of giant freshwater prawn and the catfishes like magur and singhi has also received increased attention in recent years due to their high market price.

Multiple carp breeding, design of portable hatcheries, development of improved rohu through selection (CIFA IR 1), protocols for intensive carp culture have shown visible impacts on productivity levels in freshwater aquaculture. Another priority is the introduction of effective genetic improvement programmes as in rohu for species such as Catla catla and Macrobrachium rosenbergii using selective breeding, as this will lead to considerable gains in productivity. Ornamental fish keeping has developed into an important economic activity world over, but India’s share is still meager. Around 350 species of brightly coloured attractive native freshwater ornamental fishes are available in India especially along the biodiversity rich Western Ghats and the North Eastern Hills, such as loaches, Nemacheilus and Travancoria and species of very elegant barbs such as Puntius arulius, P. denisonii, P. narayani, P. filamentosus, P. manipurensis, Danio malabaricus, etc. Considering the increased popularity of ornamental fish at household level, captive seed production and rearing technology of both domesticated exotic species and indigenous species having export potential such as Pristolepis marginata, Horabagrus brachysoma, Danio malabaricus, Puntius filamentosus and P. fasciatus have been standardized. However, to avoid indiscriminate exploitation of the freshwater jewels from nature, captive breeding and domestication of more native species such as Puntius denisonii, Labeo nigriscens and Channa barca need to be developed on a priority basis. Efforts have also to be made in bringing out the potential aquatic ornamental invertebrates especially crustaceans to the trade and to develop suitable techniques for adapting them to aquaria and breeding and seed production under controlled conditions.

It is necessary to adopt region-specific models for furthering freshwater aquaculture in view of the available aquatic biodiversity as well as the consumer

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preferences and economics of operations in different parts of the country. Of over 640 species of freshwater fishes of India, several species are confined to south Indian (peninsular) waters. These include some of the endemic food/sport fishes, viz., Clarias dussumieri, Labeo dussumieri, L. ariza, L kontius, Tor khudree, T. mussullah, Gonoproktopterus (Hypselobarbus) curmuca, Cirrhinus cirrhosa, Puntius pulchellus and P. carnaticus; and several brightly coloured attractive ornamental fishes. Despite its vast water resources and a rich faunal biodiversity, the contribution of peninsular aquaculture with local species to total inland fish production in the country is negligible. It is highly desirable to conserve and propagate some of them, especially those which are in high demand in the peninsular region and that are able to utilize the primary production more efficiently. Captive breeding and larval rearing techniques have already been developed for fishes such as Clarias dussumieri, Labeo dussumieri, Gonoproktopterus (Hypselobarbus) curmuca, Osteobrama belangeri, Puntius pulchellus and P. carnaticus. Efforts have been initiated to incorporate some of these local potential cultivable species in culture systems for diversification of aquaculture in peninsular states and simultaneously to generate more information on their biology, breeding pattern, recruitment and stock identification.

Domestic fish marketing

The growth and development of the fisheries sector is highly dependent on an efficient fish marketing system. It is estimated that about 15 per cent of the total fish production of the country are exported to foreign destinations like Japan, US, European Union, China and other Southeast Asian countries and the rest marketed domestically within the country. The domestic fish marketing system in India is mainly carried out by private traders with a large number of intermediaries between producer and consumer, thereby reducing the fisherman’s share in the consumer’s rupee. Physical facilities and infrastructure in all types of fish markets are far from satisfactory. Most fish landing centers and wholesale fish markets are old, crowded and without proper infrastructure facilities resulting in poor fish handling. Other common problems specific to fish include high perishability of commodity, bulky raw material, high heterogeneity in size and weight among species, high cost of storage and transportation, no guarantee of quality and quantity of commodity, low demand elasticity and high price spread. The major constraint faced by Indian fish farmers in fish marketing is the lack of bargaining power and market information and barriers to entry in the market. There has been a recognition by the planners of the country, of late, that a system needs to be developed for efficient domestic marketing of fish so that all the stakeholders in the entire value chain from fishermen to fish consumers gain maximum profit and satisfaction.

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Market Intermediaries

Fish passes through several intermediaries from the landing centre or fish pond to the consumer. The intermediaries are involved in providing services of headloading, processing, preservation, packing and transporting and these activities result in cost-addition at every stage of marketing. The key intermediaries in fish marketing are the auctioneer, wholesaler, retailer and the vendor. Several other intermediaries like local fish collectors and fishermen cooperatives also exist in several markets. The biggest challenge in documenting intermediaries in fish marketing is their multi-functional performances. There is no strict boundary between intermediaries and they perform several functions while marketing fish.

Auctioneer: The auctioneer is the first intermediary in marine fish marketing channel in India. The fisherman brings his catch to auctioneer, who auctions the fish to various traders at the landing centre. The auctioneer sometimes advances money to the fisherman and in turn gets the right to auction his fish. Auctioneers charge 5-10 percent of sales value as their commission from the fishermen. There is a virtual barrier to the entry into this profession, which is mainly inherited by the local fishermen community or associations across all the coastal states in the country. In freshwater fish marketing, the auctioneers employ or source fish through a commission agent. The commission agent purchases fish from landing sites (river banks, culture ponds, etc.) and sends the fish for sale to the auctioneer. The agent charges 5 -10 percent of sale value as his commission from the fisherman.

Wholesaler: The wholesalers buy fish in bulk from auctioneers and sell it to retailers or other traders. Some value addition is carried out by the wholesalers in terms of sorting, grading, cleaning, icing and packing fish before sale. It has been found that cost structure of wholesalers in India is profit-intensive. They usually know the demand of species outside markets and are aware of average trend of daily fish catches at the landing centres. In the case of farmed fish, a wholesaler acts as a commission agent to whom the fisherman sells his produce. The wholesaler assumes the risk of selling the fish and therefore keeps a higher margin as compared to auctioneers. Ice and transportation form the largest share of the wholesaler’s costs.

Retailer: The retailers sell the fish directly to consumers. They have an assessment of the local demand and limitations of their purchasing power. Maximum value addition to fish happens with the retailers. The retailers grade, clean, ice, pack, display and dress fish for the consumers. Retailers mainly buy fish from the wholesaler, but in several cases, groups of retailers have been found participating in the auction process for buying fish directly from the auctioneer. Retailers keep a marketing margin of about 20 percent, though the figure shows a lot of variation across the country. Labour forms the largest share of the retailer’s costs.

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Vendor: Vendors being mobile, sell fish directly at the consumers’ doorsteps. Most fish vendors in India are women. Vendors also carry out value addition by sorting, grading, cleaning and icing fish. They participate in auction directly in some of the states. They are forced to sell all the produce on a given day, as they don’t have the capacity to hold or preserve the fish. The major costs to vendors are on ice and transportation.

Marine Fishermen Cooperatives: Fishermen cooperatives are also involved in fish marketing. Presently, the share of cooperative societies in marine fish marketing is small and most of them are also in losses. Poor management, lack of marketing strategy and well-defined lending policy, absence of vertical integrations of different activities has been resulting in losses. There are however exceptions as in case of the Kerala State Cooperative Federation for Fisheries Development Ltd. (Matsyafed), that regulates auctions at fish landing centres through primary fishermen cooperative societies. The member-fishermen sell their catch to potential buyers only through the auctioneer, employed by the society. This ensures a better price and immediate payment to the fisherman from the society. At present, Matsyafed-regulated auctioning is prevalent only in the non-mechanized sector in Kerala.

Contractor/ Freshwater Fishermen Co-operatives: In freshwater capture fisheries, there is another intermediary, who may either be a private contractor or fishermen cooperative. In this system, fishers dispose catch through co-operative/contractor. If the fishing rights of a water body are with a private/public body, i.e. contractor/co-operative, fishers are paid for fishing and their remuneration depends on the bargaining power of the fisher/contractor.

A study conducted by NCAP, New Delhi, on the detailed break-up of costs incurred by all these market intermediaries revealed that the total marketing cost was maximum for wholesalers (Rs 8.89/kg), followed by retailer (Rs 6.61/kg), marine fishermen cooperative (Rs 6.00/kg) and vendor (Rs 4.50/kg). The cost for wholesaler is high due to icing and keeping the fish for maximum time in the supply chain.

Marketing Channels

Prevalent marketing channels for Indian major carps (at Howrah fish market)

Channels Marketing links Channel I Fishermen – Fish collector/local dealer – Auctioneer – Wholesaler –

Retailer – Consumer Channel II Fishermen – Auctioneer – Retailer – Consumer Channel III Fishermen – Wholesaler – Retailer – Consumer

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Prevalent marketing channels for Shrimp (at Chennai fish market)

Channels Marketing links

Channel I Fishermen / Shrimp farmer – Agent (Trader) – Exporter

Channel II Fishermen – Auctioneer – Exporter

Channel III Fishermen / Shrimp farmer – Trader – Wholesaler – Retailer –

Consumer

Channel IV Shrimp Farmer’s Association – Retailer – Consumer

Market Infrastructure

Markets for fish and fishery products in our country exist at various levels. Most common markets are at the Landing centres (both marine and inland), Wholesale market, Retail markets and Fish retail outlets. Fish handled by these places of markets vary depending on the quantum of fish captured, local and distant demand, infrastructural facilities, fleet capacity, gears used, etc. The domestic markets handle from 1 to 100 tonnes of fishes in a day. The worrying aspects of fish markets are that they are old, unhygienic, without proper facilities for handling fish and with limited or no facilities for cold/chilled storage and ice plants, etc. Further, the domestic marketing system lacks professionalism in most of the states, barring a few sub-sectors of Indian fisheries such as carps in Andhra Pradesh and West Bengal and shrimps in Kerala, Tamil Nadu and Andhra Pradesh. There is no quality monitoring by government or municipality / corporation authorities at any market in the country. As a result of poor handling at the markets, the fishes have low keeping quality.

The emergence of modern fish retail outlets operated by both government bodies and private individuals in some of the southern cities is a welcome step in the direction of promoting domestic marketing of fish in the country. These outlets are found comparatively cleaner and more hygienic than the retail markets. In recent years, fish retailing has been started by several large, organized private retailers including the Reliance group, Spencer’s, etc. Most of these retailers source their fish supply either from the wholesale markets or through agents at the landing centres. Private retailers provide a large variety of fish with value-added services throughout the year. The state governments of Tamil Nadu, Kerala and Karnataka have also entered fish retailing industry. BENFISH of the Govt. of West Bengal is a success story in retail fish marketing, including value added products. In Tamil Nadu, the Tamil Nadu Fish Development Corporation Ltd. (TNFDC) operates fish retail outlets under the name of ‘Neidhal’. In Kerala, Matsyafed has started a fish retailing outlet under the name of ‘Fresh

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Fish Point’. These retail outlets purchase fish directly from fishermen/cooperative societies and sell to customers at reasonable prices under modern, hygienic conditions.

Structure and conduct of government, private and traditional fish retail outlets

Particulars Neidhal

(TNFDC outlet) Reliance

(Private outlet) Traditional Retail

Outlets No. of outlets 2 45 150 Operating hours 10 hours 12 hours 8 hours Fish varieties 8-12 15-150 4-5 Price Close to wholesale

price Fixed by company 20-25% more than

wholesale price Other services Cleaning and

dressing Cleaning and dressing

Not available/available on extra payment

Policies for Fish Marketing

Fish is not a notified commodity under the APMC Act of 1966, leading to the exploitation of fishermen by commission agents. Unlike in other agricultural commodities, where commission charges are paid by the traders, in fisheries, all commission charges are paid by fishermen. This reduces the share of fishermen in consumer’s rupee and makes fishing a non-viable venture. Fishery is a state subject under the Constitution of India but only a few states have a policy specifically aimed at fish marketing. The only legislation for fish marketing is the West Bengal Fish Dealer’s Licensing Order, 1975. The Act has a variety of legal procedures to control the process of supply of fish to other states from West Bengal. It was constituted as a welfare measure for the people of the state, with amendments from time to time till 1997. Every fish merchant has to get a license to conduct business by paying an annual fee. All the fish commission agents and wholesaler-cum-retailers are to be registered with the Directorate of Fisheries under this Order.

The state fisheries departments, state fish development corporations and apex fishermen cooperative societies have schemes to help fishermen to market their catch efficiently. The schemes include provision of vehicles for transporting fish from landing centres to markets, fish kiosks and marketing implements like insulated boxes, utensils, dressing knives, etc. Several organizations have been set up at the national level to promote the fisheries sector and help the fishermen. These include organizations such as the National Cooperative Development Corporation (NCDC), the National Federation of Fishermen’s Cooperatives Ltd. (FISHCOPFED) and the National Fisheries Development Board (NFDB).

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Though there are a number of organizations and policies related to promotion of fish marketing in the country, there is a need to formulate a uniform market policy for fishes so that it becomes easier in operation and regulation so that the country’s fish production is efficiently handled and delivered to the consuming population, ensuring at the same time remunerative prices to the fishers. The improvement in fish marketing system and distribution would not only reduce the demand-supply gap of fishes across country, but would also contribute to food and nutritional security of a vast majority of resurgent middle income population.