Winners and Losers in the Finfish Trade on Mafia Island : A Value Chain Analysis

Fish trade on Mafia Island involves several players in the value chain from fishing to the plate, either on Mafia Island or mainland Tanzania. This paper investigates the different actors in the value chain to establish how much each of them invests in the process of adding value to fish as a traded commodity, and how much they gain from it, with the intention of establishing who are the winners and losers in the fish trade. The results showed that small-scale fishers in Mafia are mostly on the losing side, spending long hours preparing for and undertaking the risky activity of fishing in rudimentary canoes, plus the cost of maintenance and the acquisition of their fishing gear. Due to their disadvantaged position and lacking the necessary facilities for the preservation and storage of their catch, they are forced to sell it at low prices in prearranged market arrangements to avoid spoilage and, therefore, incur loss. The findings of this study indicated where a major policy change would improve fishers’ welfare. Arrangements need to be made for small-scale fishers and female fish vendors to access markets to improve their gain at most fish landing and trading sites. This would help to reward the hard work and risk taken by fishers and women fish vendors, and reduce their poverty. Corresponding author: KK Email: Kassim.kulindwa@nmbu.no INTRODUCTION Fishing is an important activity for communities living adjacent to rivers, lakes and seas, constituting an economic activity that generates income and provides sustenance to those who engage in fishing as an occupation. On Mafia Island in Tanzania, as in most developing countries endowed with marine resources, fishing is mostly undertaken by small-scale artisanal fishers as a subsistence activity which has, over time, become increasingly become commercialised. Fishing is both a subsistence strategy for small-scale fishers on Mafia Island, providing an important source of protein for their families, as well as an increasingly important income-generating activity which provides for their household needs. Estimates of the average level of dependence on fisheries among households of six fishing communities on Mafia Island reveal a very high number (85%) depend on fishing 152 K. Kulindwa and R. Lokina (Fig. 1). Furthermore, the sources of livelihood for these communities is narrow, apart from fishing, the second highest contributor to their livelihood being seaweed, representing an average of 12.6% of the total annual household income. Last are agriculture and petty trade which account on average for 2.4% of their activities (see also appendix Table 3). This goes on to show how important fishing activity is to the livelihood of the Mafia inhabitants. Fishing involves many actors and stakeholders in the linkages in the industry (backward and forward), who play different roles but make up the totality of the industry. The fish trade on Mafia, as in other artisanal fishing communities, involves several players and stages in the fisheries value chain, from fishing itself to the consumers’ table, both on Mafia Island and mainland Tanzania, and beyond. This article investigates the different actors in the value chain to establish how much each of them contributes to the process of adding value to fish as a traded commodity in the markets of Mafia and mainland Tanzania. We focused mainly on the smalland mediumscale fishers’ position in the chain to evaluate their contribution and what they gain from it. The aims were to investigate the categories of business players who benefit most and those who benefit least, or lose, in finfish trade on Mafia Island. To achieve this, we used value chain analysis to try and trace the nature of activities, the costs and the gross margins in terms of market values. Although all of the stakeholders contribute to the total value of the fishing industry, we feel that there are some who benefit more at the cost of others, resulting in a Pareto-inefficient distribution of benefits accruing to the different actors. We felt that an understanding of the value chain would contribute to the development of livelihood interventions or their improvement to benefit the losing actors, and it would identify constraints and opportunities in the marketing system and elucidate its governance. Value chain analysis would also help identify the potential for adding value (e.g. by improving the product, producing it more efficiently or adding additional higher value services). Improved benefit may be Figure 1: Dependency on Fishing in Mafia Island's Fishing Communities. Winners and Losers in the Finfish Trade on Mafia Island: A Value Chain Analysis 153 further achieved for some actors in the chain by reducing its length. There is growing concern regarding the continued deprivation of the fishing communities and the need to improve their livelihoods and livelihood diversification. The present study therefore focused particularly on the potential to improve their livelihoods, recognising the importance of finfish in this regard. We felt that, apart from financial losses fishers suffer due to a lack of bargaining power in the market chain, they also faced non-market costs and losses in terms of time use and greater occupational risks which exemplify their vulnerability. In our analysis, we used primary data collected in a 2011 survey in Kilindoni on Mafia Island, incorporating check lists on costs of investment, operational costs and revenue flow through middlemen, processors, local fish market traders and group fishers (with powered boats). Information from restaurants and hotels proved to be difficult to obtain, as well as from the main fish processing plant on Mafia Island (TANPESCA). These were, therefore, not surveyed. In addition to this, we supplemented the analysis with primary data on household income collected from 149 randomly selected households in 2010 from six villages on Mafia Island namely, Kilindoni, Kitoni, Bweni, Mfuruni, Chole and Jibondo (see Appendix Tables 1-6). The 2010 and 2011 field surveys were conducted during a University of Dar es Salaam fisheries research project in collaboration with the Norwegian University of Life Sciences (NMBU) and funded by the Norwegian Programme for Development, Research and Education (NUFU). The next section presents an analytical discussion of the value chain for finfish in Mafia District, followed by a discussion on the fish trade. Market arrangements for fish and fish pricing on Mafia Island are explained in the succeeding section, followed by the methods used to determine the gross profit from these activities. We finally present empirical results where benefit distribution and value chain governance are discussed followed by conclusions. The Value Chain Analytical Framework: An Overview Value chains are defined as, “the full range of activities which are required to bring a product or service from conception, through the different phases of production (involving a combination of physical transformation and the input of various producer services), delivery to the final consumers and final disposal after use” (Kaplinsky & Morris, 2000). Value chains can be characterised as being either global or macro, meso or micro in scale (Gereffi & Kaplinsky, 2001). Global analysis considers the whole chain, while micro-level analysis focuses on the producers in the chain (Dijk & Trienekens, 2012). Dijk and Trienekens (2012) further define macro-level analyses as pertaining to the chain at the national level and meso-scale to the regional or city level. In our case, mesoscale is associated with local market activities involving primary production, marketing, processing and consumption in agriculture, fisheries and manufacturing processes in small-, mediumand large-scale enterprises. The value chain framework in Figure 2 represents a generic linear relationship between one activity and the rest in the chain. While it is possible that such a progression exists, it is seldom the case because of the existence of both vertical and horizontal or intra chain linkages in most value chains (Hempel, 2010; Dijk & Trienekens, 2012). For instance, in a fisheries value chain, a fisher may be the owner, buyer and processor of fish, leaving only the role of retailing to others. Likewise, in smallscale fisheries, an owner of gear and vessels may rent these to fishers and buy their catch (middleman), then sell it to a lucrative market outlet as we shall see is the case on Mafia. There have been numerous studies on various aspects of value chains over the past two decades. Some studies have aimed at facilitating market development for small and medium enterprises (Streeten, 1991; Sen & Mahajan, 1993; Gamser, 1992), while others have investigated the enhancement of business efficiency and performance through the determination of factors that influence competitiveness and identify intervention entry points (Kula et al., 2006). Several studies have aimed at making markets work for the poor and vulnerable by highlighting their plight, as well as that of informal producers (Thomas, 1990; Bear & Field, 2008; Bekkers et al., 2008; Daniels & Jeans, 2009). A considerable body of literature has focused on the question of how local producers in developing countries could break into international markets by linking producers to global markets (Dijk & Trienekens, 2012). Studies which have focused on who gets what are of much interest in the current study, particulary the question of benefit distribution in the value chain (Gerefi & Korzewicz, 1994; Islam et al., 2006; Shamsuddoha, 2007; Pietrobelli & Saliola, 2008). Enterprise development literature considers that the marketing system constitutes the scope of the value chain. It maintains that small and medium enterprises are holistically benefited by the identification of gaps, weak points and bottlenecks at different points in the chain such that services can be rendered to ensure that micro-entrepren