8. The Seafood Supply Chain and Poverty Reduction
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THE SUPPLY CHAIN 145 8 THE SEAFOOD SUPPLY CHAIN AND POVERTY REDUCTION Run Yu a , Lotus E. Kam b and PingSun Leung c Abstract In this paper, we review, compare and contrast the characteristics of seafood supply chains in developed and developing countries, using the value chain governance approach. It is identified that the linkage between poverty reduction and development of seafood industry in developing countries is contingent on the nature of chain governance. Based on the comparative and contrastive results, recommendations for enhancing the functionality of poverty alleviation for seafood supply chain in developing countries are proposed. Introduction The fishery sector contributes significantly to many coastal economies in generating income, employment, and foreign exchange earnings. In addition, the fishery sector is one of the key contributors to food security and poverty alleviation in many developing nations. It is deemed as being highly significant in most Southeast Asian countries, both in trade and consumption, and employment and poverty terms (Thorpe, 2005). Global fishery production increased, at an annual rate of 1.7 per cent, from 130 a Assistant Professor/Researcher, University of Hawaii at Manoa, USA. (Corresponding Author. Email: ) b Assistant Professor/Researcher, University of Hawaii at Manoa, USA c Professor, University of Hawaii at Manoa, USA Fisheries&Poverty book.indb 145 10/28/08 3:32:37 PM Run Yu, Lotus E. Kam and PingSun Leung 146 mmt (million metric tons) in 2000 to 140 mmt in 2004. While developed nations registered a slight decline of 1.5 per cent during the 2000-2004 period, they managed to increase their production at an annual rate of 2.7 per cent, raising its share from 75.5 per cent in 2000 to 78.5 per cent in 2004. During the same period, the ten Southeast Asian nations showed an even more impressive growth at an annual rate of 5.7 per cent reaching almost 22 mmt in 2004 (FAO FishStat 2006). Much of the increase in fishery production can be attributed to trade liberalisation and globalisation, resulting in a significant increase in global fish trade. Global fish export increased from $55.6 billion in 2000 to $71.7 billion in 2004, at an annual rate of 6.6 per cent. The relative importance of fish trade can be seen in its export share of total merchandise exports and agricultural exports. In 2004, fish export share to total merchandise export was less than 1 per cent globally, but fish export share of the developing countries was almost twice as much as that of the developed countries at 1.1 per cent. Southeast Asian nations, as a whole, recorded a significantly higher share at 1.8 per cent. The importance of fish trade is even more pronounced in several countries in the region with Myanmar showing a share of 16.6 per cent and Vietnam, 11.9 per cent. The relative importance of fishery in the region is further evidenced by its very high export share of fish to total agricultural export. Three countries in the region recorded that more than 40 per cent of their agricultural export was from fish: Myanmar=45.6 per cent, Vietnam=42 per cent, and Cambodia=41.8 per cent in 2004. The shares of other net fish exporters in the region were also notably significant with Philippines at 16.8 per cent, Indonesia at 15 per cent, Thailand at 8.3 per cent, and Malaysia at 5.1 per cent. Brunei Darussalam, Lao PDR, and Singapore were net importers of fish (FAO 2004a; WTO 2005; FAO FishStat 2006). Close to 30 million fishers were reported by FAO in 1990 to be directly active in global fishery production. Indonesia, the Philippines, and Vietnam are leading countries in terms of the percentage of fishers who belong to the economically active agriculture population. According to the FAO (1999), 8.2 per cent, 8.0 per cent and 7.7 per cent of Indonesia’s, the Philippines’, and Vietnam’s active agriculture population are engaged in fishery production, respectively. The developing world is also more dependent on fish as their source of protein, having a 20.0 percentage contribution of fish to total animal Fisheries&Poverty book.indb 146 10/28/08 3:32:37 PM THE SUPPLY CHAIN 147 proteins, compared with the developed world’s 12.3 per cent. Within the Southeast Asian region, the dependence on fish as protein source is even more prominent with a fish-to-animal protein percentage of 53.1 per cent in Indonesia...