From bycatch to buying catch
How the Fish Meal & Fish Oil industry in Mangalore, Karnataka secures
their supply of raw material
MSc thesis Human Geography University of Amsterdam Supervisor: dhr. dr. Joeri Scholtens Jaël Poelen (1198745) Second Reader: dhr. prof. dr. Maarten Bavinck June 2019
ACKNOWLEDGEMENTS This MSc thesis would not have been possible to write without the excellent help of some people. At first I would like to thank dr. Joeri Scholtens for his supportive and extensive supervision. Secondly, I would like to thank dr. Amalendu Jyotishi and the Amrita Vishwa Vidyapeetham University for their exceptional support, feedback and kind hospitality. I would also greatly like to thank prof. Ramachandra Bhatta for his incredible supervision, support and opening up his network for the cause of this research. Next to this I would like to thank Ketan and Prashant for being extremely helpful by interpreting and helping to understand the fishery industry. Then I would like to thank all the fish meal plants for answering my questions and granting me access to their factory sites and of course the experts that contributed to this research. I would also like to thank Vidya, her parents and Natesh for their hospitality during my stay in Mangalore. Lastly I want to thank my parents, my sister and Pieke for always being there with their love and support.
ABSTRACT
The fish meal and fish oil (FMFO) industry has been criticized for laying claim on the same fish used for direct human consumption in poor coastal areas. While dealing with these claims the industry also has to cope with an insecure supply of raw material, due to seasonal but also gradual changes in the availability of fish, governance and market fluctuations. At the same time the FMFO industry needs to manage a steady process of reduction. This case study on the fish value chain will focus on the FMFO industry cluster of Mangalore, Karnataka, India to show the strategies of the FMFO industry to cope with these fluctuations. The question raised in this research is: How does the fish meal industry in Mangalore deal with a changing fish supply for the process of reduction in the fish value chain? Empirical research has been conducted with FMFO factories, experts, agents and boat owners in the fisheries industry in Karnataka. Making use of the value chain framework, the relationships between these actors is explored and compared to patron-client relationships. This research shows that different strategies employed by the FMFO industry are; procuring a lesser quality fish, selling lesser quality end-product, move their knowledge or factory to a different location, fix the price for raw material and redirect the flow of raw material or FMFO to different factories. This research suggests that the coping strategies used by the FMFO industry influence the way the fisheries industry works, in particular by targeting what used to be bycatch. These incentives from the FMFO industry to the fisheries industry seem to have social and environmental implications.
INDEX
1 INTRODUCTION ... 8
2 THEORETICAL FRAMEWORK ... 10
2.1 VALUE CHAIN ANALYSIS ... 10
2.1.1 Network structure ... 11
2.1.2 Value Addition ... 12
2.1.3 Governance structure ... 13
2.2 FISH MEAL & FISH OIL ... 14
2.3 FOOD & NUTRITION SECURITY ... 13
2.4 RESEARCH QUESTION & SUB QUESTIONS ... 15
3 METHODOLOGY & METHODS ... 17
3.1 LOCATION ... 17
3.2 PARTICIPANT OBSERVATION ... 19
3.3 SEMI-STRUCTURED INTERVIEWS ... 20
3.4 SECONDARY DATA ... 21
3.5 ETHICS, POSITIONALITY & BIAS ... 21
4 UNDERSTANDING THE FMFO INDUSTRY ... 24
4.1 GLOBAL FMFO TRENDS AND FLUCTUATIONS ... 24
4.2 TRENDS AND FLUCTUATIONS IN INDIA & KARNATAKA ... 26
4.2.1 Natural Fluctuations ... 27
4.2.2 Institutions and laws concerning Fisheries and FMFO Industry ... 29
4.3 TECHNICAL ASPECTS OF FISH MEAL & FISH OIL ... 30
4.3.1 Process of Reduction ... 30
4.3.2 FMFO Product Characteristics ... 31
5 SUPPLY CHAIN RELATIONSHIPS ... 33
5.1 FACTORY ... 33
5.2 THE FACTORY - AGENT RELATIONSHIP ... 34
5.2.1 Independent Agents ... 35
5.2.2 Recruited Agents ... 35
5.3 FISHING FOR THE FMFO INDUSTRY IN MANGALORE AND MALPE ... 36
5.4 AGENT - BOAT OWNER RELATIONSHIP ... 39
5.4.1 Advance Payment ... 39
5.5 BASIC ECONOMICS IN THE FMFO VALUE CHAIN ... 40
5.6 DEMAND FOR MANGALORE’S FMFO ... 43
6 FACTORY STRATEGIES & (POTENTIAL) IMPACTS ... 45
6.1 STRATEGIES OF THE FMFO INDUSTRY ... 45
6.2 IMPACTS ... 46 6.3 DISCUSSION ... 48 7 CONCLUSIONS & RECOMMENDATIONS ... 49 8 REFERENCES ... 51 9 APPENDIX ... 54 I. TABLES ... 54 II. INTERVIEW GUIDES ... 55
III. MAP OF RESEARCH AREA ... 59
1 INTRODUCTION
Fish in literature is mostly seen as an effective source of food, sometimes even critical for human consumption by providing vitally needed nutrients (Isaacs, 2016). In the book Fish for Life, Chuenpagdee et al. (2005) argue that fish is a critical source of protein, lipids and micronutrients for people all over the world, but are often part of the main diet for people in developing and less-developed countries. There seem to be increasing demands on both captured and cultured fish, but not only for direct human consumption. Where does this demand come from? Fish has a variety of uses, it can be used for direct human consumption, cutting and freezing for export, for the surimi industry and so on. A very important product in the food value chain made from fish is fish meal and fish oil. These are products mostly made from small pelagic fish. Small pelagics are near-surface swimmers moving in large shoals (Couper et al., 2015). Small pelagics include the species of: anchovies, herring, mackerel, pilchards, sprat, capelin, sardines, saury, sandlance and shads (Tacon & Metian, 2009). In some countries, much of the small pelagic landings, rather than use for direct human consumption, are processed into fish meal and fish oil, mostly destined for the agriculture and the aquaculture sectors. In these sectors it is used in feed for cultured animals because of their high protein content. Next to the fish demand for the FMFO industry, there is an ever-increasing demand of fish for direct human consumption. In developed countries there seems to be an increasing demand for fish because of their healthy properties, but in the poorer coastal areas of developing countries catching and eating fish seems to be a means of survival (Couper et al. 2015). Next to competing claims on the same raw material, the FMFO industry has to cope with the same difficulties and fluctuations as the fisheries industry. Only the FMFO industry requires a continuous production process to prevent losses and therefore are in need of a continuous supply of raw material. This can be very difficult in a sector where the supply seems to fluctuate greatly, causing insecurity for the FMFO industry. In order to understand bigger issues and claims (e.g. food security, fishing practices) concerning fish meal & fish oil, the behaviour of the FMFO plants, fishermen and traders first has to be understood. The strategies employed by the FMFO factories may provide a better understanding of how the FMFO industry in Karnataka relates to the local fishing industry. This thesis will focus on the southwest coast of India, Where an important cluster of FMFO industries is located. India is not only one of the biggest countries in terms of fish production, but also in terms of exporting fish and fish products (FAO, 2018). In 2017 the total catch in India was 3834574 tonnes of fish, 547784 tonnes (14%) of this were landed in the state of karnataka (CMFRI, 2019). About 23 fish meal plants are located in the state of Karnataka, most of them located in Mangalore (Ponnusamy, 2012). With a good location for export, the city of Mangalore seems to be a cluster for FMFO plants. Most of these plants operate for about 6 to 10 months a year, depending on the local availability of raw material (Ponnusamy, 2012). There is very little research on fish meal & fish oil in India available, it could also be that
research that has been done is not easily accessible. Therefore this research aims to provide a basis for understanding the workings of the FMFO industry in Karnataka. It will explain the different interactions in the value chain and address the strategies of the FMFO industry to cope with the insecure supply. The key aim of this thesis is to understand the issues regarding a steady production process while having a fluctuating supply of raw material. The research question therefore is: How does the fish meal industry in Mangalore deal with a changing fish supply for the process of reduction in the fish value chain? From studying the FMFO industry in and around Mangalore I try to understand and explain how the FMFO industry relates to the fisheries industry. This thesis will focus on what strategies are used by the FMFO industry to secure their continuous supply of raw material. Eventually I aim to improve the understanding of the FMFO value chain and narrow the gap in knowledge about different demands on the raw material for this specific research location.
This thesis is structured as follows. Chapter 2 will provide a theoretical framework by discussing value chain analysis theory, the food and nutrition security discussion will be addressed and the research questions will be given. Chapter 3 describes the methods and methodology used in the research. Chapter 4 sets the global and Indian context in which the FMFO industry is operating. Chapter 5 will lay out the supply chain relationships, the added value and the demand of the FMFO industry in Mangalore. Chapter 6 will discuss the company strategies, discuss the findings in relation to to the theory. Chapter 7 will conclude and give recommendations for future research.
2 THEORETICAL FRAMEWORK
2.1 Value Chain Analysis
Ribot (1998, P. 307) defines commodity chains as: “… a series of interlinked exchanges through which a commodity and its constituents pass from extraction or harvesting through production to end use.” The commodity chain concept focuses on different steps in the production process. The value chain concept originates from this approach, according to Trienekens (2011, P. 53) a value chain’s main purpose is: “… to produce value added products or services for a market, by transforming resources and by the use of infrastructures – within the opportunities and constraints of its institutional environment.” The constraints for value chains seem to lie with market access and market orientation, since this determines if value will be added (Trienekens, 2011). These value-adding activities are being kept in western countries, making it more difficult for producers in developing countries to enter the value chain (Trienekens, 2011). Business relationships in developing countries also seem to be subject to many uncertainties because of poor physical infrastructures, weak institutional infrastructures, unbalanced trade relationships and unfavourable social and political conditions (Trienekens, 2011).
To be able to research value chains Trienekens (2011) opposes way that ‘value chain analysis’ is currently being undertaken because current literature is missing an integrated approach that explains how businesses in developing countries can enter the value chain, he therefore pleads that a framework for an integrated study on developing country value chains is missing. Trienekens (2011) framework will be a helpful tool for this research to get a better understanding of the FMFO value chain in and around Mangalore. This approach is especially useful since value/ commodity chain approaches like Ribot (1998) often focus on agriculture and therefore focuses on mapping people’s access to markets, labour opportunities, capital, land, etc. This might be useful to understand the distribution of added value but seems like a one sided story, highlighting the unfairness of the value chain but not covering all the components that exist within a value chain. Mapping access in the fish value chain seems to be less important, since the fish from the ocean can be seen as a public resource and can be retrieved by anyone with fishing gear. Therefore a more detailed framework is needed. Next to this, the fisheries industry might not have such a big difference in added value distribution, because fish is a resource that does not experience much value addition from catch to consumption. Fish is mostly a matter of landing, transporting and selling. However this might be an exception for some industries such as; freezing and exporting, surimi, fish sticks, canning, etc. Therefore the FMFO industry is one of the few industries related to fish that aim to add value to fish as a product.
2.1.1 Network structure
Trienekens (2011) claims that there are three components that characterize a value chain, these are: network structure, the way value is added and governance structure (Trienekens, 2011).
Especially the interactions in the value chain are important. Fish is often expressed in financial terms but value can have a different meaning than just financial quantity. Fishing and fish trading also influence social values such as sharing food, livelihood, social status, gender and generosity (Fabinyi et al. 2018). Therefore mapping the network structure of the fish value chain horizontally and vertically will be important.
“A network structure has two dimensions: vertical and horizontal. The vertical dimension reflects the flow of products and services from primary producer up to end-consumer (i.e. the value chain or supply chain). The horizontal dimension reflects relationships between actors in the same chain link (between farmers, between processors, etc.).” (Trienekens, 2011, P. 61) Within the vertical dimension, different actors together will form a market channel. This “… bridges the gap between producers and market and may be defined as a value chain or supply chain forming a “channel” for products and services that are intended for sale at a certain market.” (Trienekens, 2011, P. 61) The position of a certain company in a market channel depends on a few key decisions, these include: the products that are delivered to the market, if a company adopts a single or multi-channel strategy (quality, delivering, pricing) and the number of stages in a specific channel (Trienekens, 2011). For the FMFO industry this would mean if there are different end products being made, what the quality is and if there are multiple agents (if any) in between them and the procurement of raw material. Choices for certain channels are constrained by market access limitations, these can be infrastructure limitations, limitations to demand and price information access, specific (quality) market demands (Trienekens, 2011).
For this research the vertical relations in the value chain are very important, because these relations decide how the FMFO factories, traders and fishermen relate to each other and how they influence each others functioning. Often actors in developing countries seem to cope (or have coped in the past) with issues concerning the value chain through patron-client relationships. Patron-client relationships are:
“… an exchange relationship between roles-may be defined as a special case of dyadic (two-person) ties involving a largely instrumental friendship in which an individual of higher socioeconomic status (patron) uses his own influence and resources to provide protection or benefits, or both, for a person of lower status (client) who, for his part, reciprocates by offering general support and assistance, including personal services, to the patron.” Scott, 1972, P. 92
According to Scott (1972) it is a multiplex relationship transcending a simple economic relationship these relationships are face-to-face and based on inequality. This relationship also has a lot to do with ‘access’ to certain resources. Ribot (1998) stresses the importance of access to markets and capital. Lower class workers do not always have access to the right infrastructure to participate in the value chain and therefore other parties (with access to certain resources) gain profit from these lower class workers. This is similar to the skewed patron-client relationship.
It is possible that patron-client relationships would help deal with insecurities concerning the fish value chain. In a case study in Junagadh, patron-client relationships seem to be: “… an adaptation to ecological constraints on production and to uncertainties in income and the supply of fish. They provide fishers an insurance mechanism to cope with periods during the year when catches are low or absent while ensuring a stable resource stream for fish buyers.” (Johnson, 2012, P. 265) This shows that a patron-client relationship can be a safe organizational form for fishers and factories because arrangements give insurance to both parties when dealing with the uncertainty of catch in fishing (Johnson, 2012). This relationship would appear to be especially helpful for fish meal and fish oil factories since this can help secure their supply of raw material for reduction.
The idea of transcending mere economic values in commodity chains has also been addressed by Fabinyi et al. (2018). Their case study in the Philippines shows that similar to the patron-client relationship the price of fish for fishers can’t only be expressed in monetary terms. It seems to be the case that value is not just a financial quantity but that fishing and fish trading also influences social values such as sharing food, livelihood, social status, gender and generosity (Fabinyi et al. 2018). They show that these vertical relationships are very important in value chains that contain specific local (craft) workers. A lot of different relationships seem to be possible in the value chain, this research will therefore focus on explaining the relationships in the FMFO value chain. 2.1.2 Value Addition Value is added in the value chain by different actors at different stages and depends on quality, costs, delivery times, delivery flexibility, innovativeness, etc. (Trienekens, 2011). The size of added value depends on the willingness to pay from the end customer (Trienekens, 2011). Value adding activities can be grouped in to five categories: trade, technology, organizational, relational and branding (Trienekens, 2011). In order to accomplish this, certain conditions have to be met; availability of resources, infrastructure and comparative advantage (Trienekens, 2011). In the FMFO industry it is always the question if (or what) raw material is available as a resource, this insecurity can make value addition difficult and therefore strategies are needed to ensure the addition of value.
2.1.3 Governance structure
Value chains entail a multitude of relationships in different forms; this can be seen as governance. This can be through transactions but also through power relationships or distribution of added value (Trienekens, 2011). Gereffi & Fernandez-Stark (2011) define governance according to Gereffi (1994, P. 97): “authority and power relationships that determine how financial, material and human resources are allocated and flow within a chain.” This helps to understand the power dynamics in a value chain when there are actors that have more power than others. A distinction can be made between a “buyer-driven” or “producer-driven” chain, showing if producers are able to make decisions in the value chain or if these decisions are tied to the buyer (Gereffi & Fernandez-Stark, 2011) For value chains five governance types can be distinguished that can flow from one into to the other: market, modular, relational, captive and hierarchy (Gereffi & Fernandez-Stark, 2011). These transactions or power relationships are very important in order to understand the fisheries and the FMFO industry. 2.2 Food & Nutrition Security
Poor coastal populations are historically dependent on fish as a cheap source of protein (Chuenpagdee et al., 2005). Isaacs (2016) states that fish is a healthy and affordable source of food with high quality protein, essential micronutrients and vitamins, which could contribute significantly to nutrition of many poor. Couper et al. (2015) similarly mentions that there is: “an increasing demand for fish in the poorer coastal areas of developing countries, but here eating fish is seen as a means of survival in a world experiencing a rapid growth in population.” The consumption of small pelagic fish would be able to improve nutrition for people with deficiencies in vitamins and minerals worldwide. These fish (if consumed whole) can be processed and stored for a longer time, are more affordable, can be bought in smaller quantities and be more evenly divided (Kawarazuka & Bene, 2011).
Does this mean that both captured and cultured fish could be used to reduce food or nutrition security? Béné et al. (2015) pleads that fish needs more attention in food policies because it is a highly efficient and unique form of nutrition in the future of the planet when comparing it to other forms of animal production systems. This includes both catching fish and the aquaculture of fish; Béné et al. (2015) briefly mentions the concerns regarding conversion rate about fish meal and fish oil but argue that there is a big difference for conversion rate between different fish. Fry et al. (2018) on the other hand contests the way ‘feed conversion ratio’ (FCR) is being used as a measurement. FCR: “… only accounts for the weight of feed inputs and not the nutritional content of the feed, the portion of the animal that is inedible, or the nutritional quality of the final product. Using FCRs relies on an implicit assumption that various species are similar across these areas, making FCR a potentially flawed tool for cross-species comparisons.” His main argument shown here is that FCR is a misconception, measuring weight of feed converted instead of measuring nutritional value. Fry et al. (2018) mention that fed aquaculture therefore is not efficient,
calories), and therefore results in a loss of most protein and calories during production.
Another argument concerns the process of reduction used for fish waste or fish that is not used for direct human consumption Zynudheen (2010) argues that fish waste and fish that is not used for direct human consumption should all be reduced to fish meal or fish oil. Cashion et al. (2017) argue that on average 27% of commercial marine landings are currently not destined for direct human consumption. They also state that 90% of these landings are food-grade of prime food-grade fish, which have a market for direct human consumption (Cashion et al., 2017). This would mean that fish that can feed the most poor and undernourished people in the world is being used for reduction and therefore redirected towards a different (higher end) market. Although big amounts of fish are landed on India’s shores, some micro level studies from the east coast of India show that there are high levels of malnutrition among children of fishers and higher child mortality rates among fisher families (Vivekanandan et al., 2003). Could this mean that there is a competition going on between fish for food and fish for feed? The fish value chain seems to be focussed on the highest price that is being paid for the raw material, this creates a potential competition between fish for FMFO industry and local consumption. Is this also true for the FMFO plants in the state of Karnataka, India? There are about 23 fish meal plants located in the state of Karnataka, with the majority in Mangalore (Ponnusamy, 2012). This raises questions; Why is there such a significant amount of plants located in Karnataka? And what is their relationship with local fisheries? 2.3 Fish Meal & Fish Oil
Fish meal and fish oil are products made from small pelagic fish, and is therefore heavily dependent on the availability of these species. Pelagic species are near-surface swimmers that move in large shoals (Couper et al., 2015). Small pelagic forage fish include anchovies, herring, mackerel, pilchards, sprat, capelin, sardines, saury, sandlance and shads (Tacon & Metian, 2009). Annual catches (2005-2016) of lower-priced small pelagics are good for 15 million tonnes of catch worldwide (FAO, 2018) These forage fish feed on herbivorous and carnivorous plankton (Isaacs, 2016). Small pelagic forage fish are prey for other animals such as larger fish, seabirds, marine mammals and humans (Tacon & Metian, 2009). They transfer energy from lower trophic levels into food for predators at higher trophic levels in the marine environment and are therefore fundamental for the marine ecosystem (Isaacs, 2016).
The capture of small pelagics is a response to the growing global demand for animal protein. Most of the landings of these species are used for the process of reduction: “Large-scale industries process forage fish using what is called “reduction”, which involves cooking, grinding and chemically separating the fat from its protein and micronutrients. The fat and protein form key ingredients in the chemical inputs into animal feed for aquaculture, industrial livestock, chicken farming, a growing pet food sector and bait.” (Isaacs, 2016, P. 2)
The products obtained from reduction are called fish meal and fish oil, mostly destined to feed animals in agriculture or aquaculture. In 2007 about 60 % of the world total consumption of fish meal and 80 % of fish oil were provided for aquaculture. Aquaculture seems to be a major consumer of fish protein; 70% of the animals raised in aquaculture receive feeds and 75% of fish meal and fish oil goes to aquaculture (Cashion et al, 2017). The most important pelagic species caught on the west coast of India are Oilsardine or Sardinella Longiceps (Ponnusamy, 2012). These are the best species to be used for FMFO since they will produce both fish meal and fish oil. The growth of aquaculture seems to depend on the demand for a specific type of fish preferred by consumers in developed countries (Cashion et al, 2017). In the developing world it increasingly seems to be the case that the fish chain is getting more geared to meet international demands (Thorpe et al. 2005). This would mean there is a difference between developing and developed countries when it comes to consumption of fish species, but also that fish that has potential for direct human consumption in poor areas in developing countries is now in some areas being used for the process of reduction. In 1994 Fish meal production peaked with a usage of 30 million tonnes of fish, since then a fluctuating downward trend can be seen since the feed industry is using these products more selectively in their composition (FAO, 2018). It looks like the FMFO industry has experienced rapid changes in the last decade with changing demand in the agriculture and aquaculture sector, the ever-changing and insecure supply of small pelagics and the different demands to the raw material. This study will therefore aim to explain these fluctuations, claims and consequences with empirical research in the FMFO cluster of Mangalore in Karnataka, India.
2.4 Research Question & Sub Questions
There seems to be a lack of empirical data on FMFO plants and the way they function. In order to understand the issues regarding the distribution of small pelagics it is necessary to understand how fish meal & fish oil plants operate and in particular how they obtain their raw materials for reduction. For FMFO plants in Karnataka ensuring a continuous supply seems to be a challenge since the majority of these plants operate for about 6 to 10 months a year, depending on the local availability of raw material (Ponnusamy, 2012). Therefore this research focuses on how FMFO plants secure a continuous supply of raw material and how this relates to local fisheries.
RQ How does the fish meal industry in Mangalore deal with a changing fish supply for the process of reduction in the fish value chain? SQ1 How is the supply of raw material changing seasonally and through the years? SQ2 How do fluctuations in the harvesting sector affect the supply of raw material for the FMFO industry?
SQ3 How do FMFO factories strategize to cope with changes of local supply and global demand and what are their impacts?? SQ4 What kind of (written or unwritten) contractual relations do the FMFO factories have with fish suppliers? SQ5 What drives the demand of the FMFO industry in Mangalore? Table 1. Research questions
3 METHODOLOGY & METHODS
In order to answer the research questions, empirical research was conducted during 6 weeks of fieldwork between the 6th of March and the 24th of April 2019. This period falls before the monsoon period and the ban on industrial fishing operation along India’s west coast, which starts June 1st. Therefore the research period could be seen as the end of the fishing season. Because of the differences in the type of research questions, a mixed-methods approach seemed to be necessary, including both participant observation and semi-structured interviews. In addition, desk research was conducted to analyse fish stock data. The approach of this research is explorative with a qualitative nature since it aims to explain strategies of the FMFO industry and relationships between different actors in the value chain. 3.1 Location The units of analysis in this research are fish meal & fish oil factories in and around the city of Mangalore (Karnataka, India). The state of Karnataka has 23 fish meal plants, most of these are located in Mangalore (Ponnusamy, 2012). Consecutive sampling has been used in order to get to assumptions that should be true for most FMFO factories in Mangalore. All fish meal factories located within a 80KM radius of the city of Mangalore have been approached for interviews, this includes the places of Udupi, Ullal and Kota, where important fish meal factories are located. These factories have been approached through email or phone contact and all responding factories have been interviewed. Interviews were held at the offices of their companies. Not all factories have been researched in equal depth. Three factory sites were visited, from two different companies. Other companies received me in their offices for an interview.
Other very important units of analysis are fishermen, boat owners, agents and traders working for, or selling to, the FMFO factories in and around Mangalore. Therefore the landing place of the fish has been studies in order to get a broader perspective on the supply side. The units of analysis will then be the Dhakke landingsite in Mangalore and the Malpe fishing harbour, these sites are important in provisioning the selected fish meal plants. The boat owners and agents were contacted through different contacts, from fishmeal factories, the municipality and even through friends of the people that accommodated me. Next to this most respondents were approached on site in Mangalore or Malpe and asked if they could get us in touch with other agents or boat owners. By doing so, snowball sampling seemed to be effective to get to more respondents on site.
“Snowball sampling is a sampling technique in which the researcher samples initially a small group of people relevant to the research questions, and these sampled participants propose other participants who have had the experience or characteristics relevant to the research. These participants will then suggest others and so on.” (Bryman, 2016).
Since this type of sampling can create a certain type of bias, because respondents know each other, I made sure to also randomly approach workers on the landing places and get respondents through different connections. Figure 1. Studied factory locations and landing places (Source: authors own/ Esri, ArcGis online) Figure 1 shows the factory locations of Kota, Mukka and Ullal (from top till bottom) , and the landingplaces of Malpe and Dhakke, Mangalore (from top till bottom).
3.2 Participant Observation
Participant observation is not simply ‘observation’; next to observing it also entails gathering further data through interviews and the collection of documents (Bryman, 2016). Participant observation is therefore used to get an understanding of the workings of fishmeal plants but especially to understand the flow of raw material through different actors on the landing places in Mangalore and Malpe. It is a useful method to understand where the fish will go, which actor is selling and whom it is sold to. Important questions were asked and notes of events were taken to get an understanding of the actors and their relations.
Considering triangulation it is important to repeat questions and observations, because the outcome will always differ. Therefore my translator and me returned to the Mangalore and Malpe site multiple times. Participant observation in the landing place Dhakke in Mangalore started with an appointment with a fish trading agent, on a Wednesday at 11:30 AM. Around this time most of the fish landing has already happened and has been loaded on the truck. Therefore three later visits were done independently with my translator at two Fridays and a Monday all around 8 AM. The Malpe landing was visited on a public holiday around 12 PM when there was no business at all, only boat owners and crew resting on and around their boats. Another visit was paid to the Malpe landing around 6:20 AM on a Tuesday when the dock was packed with workers, traders and buyers.
In Karnataka the most widely spoken language is Kannada. For communication with fishermen and agents a translator was needed. Two different translators helped me during my research, the first on the Dhakke landing with no experience or knowledge in fisheries. Because this translator also knew little about fisheries but was very interested in my research, we both had very similar ideas in to ask what to whom. We were on the same level of knowledge and this made us curious about the same things. The second interpreter was someone with a lot of knowledge about fisheries. This was very helpful, because he could explain me certain processes or answer questions I had. At the same time this also posed a risk since the interpreter was able to answer my questions without asking the respondent. I then asked to repeat the question in Kannada and sometimes the respondent would provide a similar or different answer.
AD1 Agent in Dhakke (Mangalore) that buys from other agents and sells to 13 FMFO factories. This agent was met on appointment. AD2 Dhakke agent that buys for human consumption AD3 Dhakke agent that buys for FMFO and cutting industry AD4 Agent in Dhakke landing introduced by BD3 BD1 Partner in owning a boat on Dhakke landing BD2 Boat owner in Dhakke with 2 boats (trawler) BD3 Boat owner in Dhakke with 10 boats (trawlers). Met on appointment. BD4 Boat owner in Dahkke with 7 boats (trawlers BD5 Boat owner in Dhakke landing AuD1 Auctioner in Dhakke landing AM1 Agent in Malpe for direct human consumption fish AM2 Agent in Malpe for factory fish BM1 Boat owner in Malpe landing BM2 Boat owner in Malpe landing TM Translator in Malpe and MSc student in College of Fisheries, Mangalore TD Translator in Dhakke Table 2. respondents in participant observation 3.3 Semi-Structured Interviews Semi-structured, in-depth interviews have been used to ask the more elaborate and time-consuming questions. Semi-structured interviews are done with an interview guide, according to Bryman et al. (2016) there is no set way in which to respond and there is no outlined schedule. Therefore the interviews were flowing conversations with certain questions interwoven. Especially more extensive questions were important when trying to understand the business structure of the FMFO factories and their relationship to fishers. Six plants have participated in interviews, one plant has been interviewed two times and one plant has let us talk to three different respondents. Sometimes there would be more people sitting in the room to listen or they would also respond. Fm1 Manager & owner of Fmp1 Fm1.1 Management and nephew of owner Fmp1 Fm2 Managing director of Fmp2 Fm3 Manager Fmp3 Fm4 Manager Fmp4 Fm5 Human Resources for Fmp5 Fm6 Management of Fmp6 Fm6.1 Agent recruited by Fmp6 Fm6.2 Payer of independent agents for Fmp6 Table 3. Factory management respondents
Next to this, five in-depth interviews with experts were conducted. These were experts on issues regarding fish and fisheries but also on regulations for FMFO plants in the state of Karnataka and experts on technical aspects of the FMFO. An obstacle for some interviews was again language. English was mostly sufficient for respondents in educated positions such as management in the fish meal factories. But for 3 interviews from management of 1 fish meal plant I had to use the second interpreter. Ex1 Field researcher on fisheries in India. Ex2 CEO of Indian Fishmeal and Fish oil Exporters Association Ex3 Former (retired) professor from College of Fisheries Mangalore Ex4 Former (retired) professor in fish processing industries
Ex5 Former (retired) professor in fish processing industries and technical advisor for Fmp6 (once every week) Ex6 Head Pollution Control Board of the Karnataka State Table 4. Expert respondents In this research the answers of different respondents are set apart to show cohesive or contrasting arguments. Respondents are coded by letters and a number. Names of fishmeal plants will be kept private and will have the corresponding number with their management: Fmp1, Fmp2, Fmp3… etc. 3.4 Secondary Data Next to expert interviews secondary data is being used, to answer questions about annual changes in fish stock, export numbers and the processing techniques. Recent articles on fish stock and biodiversity on the west coast of India, brochures from the FMFO plants and associations, company websites, a power point from the ‘Indian Fish Meal and Fish Oil Export Association’, the annual reports from the ‘Central Marine Fisheries Research Institute’ of India and data from the department of fisheries from the government of Karnataka. The major problem with this data is that it mostly takes up until three years to collect and process, therefore the recent fluctuations regarding fish stocks can not yet be seen in secondary data. This is especially inconvenient since there appears to be a major change in fish catches on the west coast of India in the last two years, according to respondents. Therefore this research will combine secondary data with findings from the field.
3.5 Ethics, Positionality & Bias
Ethics need to be considered when conducting research, according to Bryman (2016) ethical principles in social research revolve around four main areas: Is there harm done to the participants? This can be physical but also mental harm (stress). This research could possibly harm people’s jobs or businesses; therefore names and company names in this research are being kept private.
Is there a lack of informed consent? This entails that sufficient information is provided to participants for them to make an informed decision in participating or refusing to participate in the research. Consent has been asked to record the interviews so it was possible to transcribe them.
Is there an invasion of Privacy? Privacy is also taken into consideration even when consent has been given, participants sometimes did not want to answer a question or wanted to answer but refuse publication. It is logical that FMFO factories have sensitive information such as financial information. It has been made sure that this kind of information will not be become public.
Lastly, deception could be dangerous, this happens when researchers present their research as something other than what it is (Bryman, 2016). Although this will always occur to a certain extent since bias should also be prevented, I tried to to be as honest as possible. All of these ethical principles were considered when doing this research, interacting with participants and processing their data. It is very important to take positionality into account. The researcher always has a certain position in relation to its research subjects. This subjectivity was taken into account as much as possible in every step of the research but especially when doing fieldwork. Fieldwork data was collected and interpreted as unbiased as possible, but there is always a certain subjectivity attached to your own background. As I personally come from a more developed country, I have possible different personal and political priorities then some respondents in the fisheries or FMFO business. It would be easy to make quick conclusions and approach the situation in black and white. Because this is a huge industry with a lot of people’s livelihood depending on it, it is therefore approached as cautiously as possible to not harm anyone in their business. Therefore it has been approached with a subjective mind-set. Also having a background in human geography and not in business economics forced me to first get an understanding of the workings of the industry before jumping to conclusions.
There is only so much that you can observe in 6 weeks of fieldwork, only the respondents can help you understand what is going on year round. Therefore it was very important to build a level of trust with the respondents and communicate with them on the same level. This was even more important since the FMFO industry received critics in literature about their claim to fish that is also being used for human consumption. But also local complaints about water and air pollution were not uncommon, these topics making it more likely for the FMFO companies to show their best side, or perhaps for them to make their decision not to talk to me at all. They asked me for identification and sometimes made copies of my Identity or student card. Because of the existing discussions about the FMFO industry, there sometimes was some suspicion as they expected me to be a journalist. At other times respondents were surprised by my (a white man’s) interest in the fisheries and FMFO industry in India and were excited to tell me about it. Or even saw opportunity for new trade relations in Europe by giving me an open invitation for a job. Therefore my aim was to be as objective as possible during the interactions, explain my
interest in human nature and supply chain relationships, and consider my positionality with every question or observation.
Since this research took place at the end of the season it could give a certain bias about the fish species that are being used and the production quantities or qualities of the companies. Therefore questions were being asked about the history of availability of catch and the annual fluctuations in the fisheries industry. It is possible that companies try to paint an optimistic picture about what raw material they use and what qualities they produce, because they have a name to live up to on the (international) market. They need to make sure people keep buying their FMFO and therefore have to distinguish themselves from other factories by providing the best quality available. The most important way of exterminating bias was through interviewing not only the FMFO factories, but also boat owners, agents and experts. This way complementing but also contradicting answers came forward and different actors in the supply chain would provide answers independently from each other. This process of triangulation has arguably increased the reliability of this research.
4 UNDERSTANDING THE FMFO INDUSTRY
In this chapter context will be provided to explain FMFO trends and characteristics. In order to understand the position the FMFO industry worldwide but especially in India, it is important to understand certain trends in the industry. The characteristics and technical aspects of FMFO are important to understand for later chapters, in particular to get an idea of how the industry plays with these characteristics as coping strategies. Different trends in supply, demand and technical innovation can be seen which influence the global and Indian production of FMFO. The following paragraphs will explain these trends and fluctuations.
4.1 Global FMFO Trends and Fluctuations
Aquaculture keeps growing worldwide and now provides half of all the fish used for human consumption (Seafish, 2016). The growth of aquaculture coincided with an increasing demand for fish meal and fish oil. The growth of aquaculture can be seen in figure 2. Figure 2. global fish production and supply per capita (source: Tacon & Metian, 2015)
However, a decline can be seen in the production of fish meal and fish oil. In 2014 about 21 Mt (22.4% of global catch) was destined for non-food products. Of this 21 Mt about 15.8 Mt (76%) was reduced to fishmeal and fish oil (Seafish, 2016). This amount has decreased globally over the last decades: “This figure of 21 Mt has fallen from 34.2 Mt in 1994. The reasons for this drop range from the increased use for human consumption and a decrease in dedicated fishing for feed production (due to tighter quota setting and additional controls on unregulated fishing). Another factor is the increased use of fish residues and by-products, increasingly replacing whole fish for FM and FO production.”
- Seafish (2016, P. 5) It seems that direct human consumption and increased use of ‘fish waste’ are leading to a decrease in catch for fish meal worldwide. It also seems that feed composition is changing and less fish meal or fish oil is being used in animal feed: “The amount of FM and FO used in compound feeds for aquaculture has shown a clear downward trend, with their being more selectively used as strategic ingredients at lower levels and for specific stages of production, particularly hatchery, broodstock and finishing diets.” (Seafish, 2016, P. 5) This more specific and more accurate use of FMFO in feed leads to a more efficient conversion and therefore a lesser demand of raw material. In figure 3 the decline of the fish meal production world wide is shown. Figure 3. Global fish meal production per year (Source: IFFO) Simultaneously a rapidly increasing price for FM and FO can be seen worldwide. Within 10 years, between 2004 and 2014 the prices roughly tripled in value. This was due to reduced landings of pelagics in major FM producing countries, increased price paid for raw material for FM production and the strong market demand from the aquaculture sector in major importing countries (Tacon & Metian, 2009). Tacon & Metian (2009) argue that when this trend continues, fish oil will not be economically sustainable for salmon feed in the long run. 4000000 4500000 5000000 5500000 6000000 6500000 7000000 7500000 8000000 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Global production of fish meal
Fish meal (Mt)Figure 4. Past and projected prices for fish meal & oil 1990-2022 (Source: CFS, 2014) 4.2 Trends and Fluctuations in India & Karnataka
Fishmeal industry in the states of Karnataka, Kerala and Tamil Nadu in the Ponusammy study from 2012 was good for 65000 tonnes of fishmeal and 34000 tonnes of fish oil. With Karnataka being the lead producer with an annual production of as much as 58000 tonnes (Ponusammy, 2012). When it comes to increasing FMFO prices similar trends are visible in India, in a study from Ponusammy in 2012 prices for fishmeal were 40-50 rupees per kg and 50-55 rupees for fish oil per kg. This is less then what respondents in this research said the FMFO prices were, around 80 rupees for FM and 100-120 for FO. It shows that also in India the prices seem to have doubled for the industry. AD1 says that 15 years ago they used to dry fish close to the doc, this would go to poultry farms as feed. The raw material is becoming too expensive for these farms now. Because of the interest of fish meal industry. The same goes for FMFO as a raw material for poultry and aquaculture, it is becoming too expensive. Fm1 says that aquaculture is bad this year and that poultry culture is shifting to soy protein and synthetic amino acids, so the demand is less. Fm1: “There has been a 600 to 700 percent increase in price for fish meal in the last 25 years. Poultry meat is sold for about 1 to 1,5 dollars. For aquaculture this can be 3, 4 up to 5 dollars. So aqua can afford to buy fish meal and poultry can’t.”
All factories say that dealing with the raw material is basic business economics, price goes up if the supply drops, price goes down if there is more supply of raw material. The price is set daily, it also depends on the domestic and international fish meal price (Fm3). Fmp6 says they fix the rate they pay for raw material together with other companies, depending on the catch and market rate. “It happens like once in the month, the change of rate. If there is a high quantity of fish and it’s the same tomorrow and the same the third day they will reduce the money.” (Fm6.1) Fm4 says
that they will compare the market rate with the international market rate, it is possible that the market rate will be lower than the costs of the production of fish meal. The company will still sell it for the best price. Fm4 also mentions a strategy for dealing with a low market rate: “If the market rate is low we do not sell the product, we keep it in stock, we wait for the market rate to go up. All factories have their own unit, they will all decide to supply less. Whatever happens is that the market rate will go up.”
These market influences can occur globally but with FMFO industry the most important fluctuations are local fluctuations, that impact the factories working or the end products. Natural fluctuations, institutions and laws hugely influence how the FMFO industry works.
4.2.1 Natural Fluctuations
In secondary data, numbers can mostly be found about the availability of fish stock up until 2017. This shows an increase in the catch of leatherjacket but great fluctuation in the catch of sardines. From interviews it became clear that the last two years have not been great for the catch of sardine, this trend is not yet visible in the secondary data available. Figure 5. Total landing of Leatherjacket in Karnataka in tonnes (source: CMFRI) 0 500 1000 1500 2000 2500 2013 2014 2015 2016 2017 Ca tch in to nn es Year Leatherjacket
Figure 6: Total landing of sardines in Karnataka in tonnes (Source: CMFRI) Figure 7: Total landing of sardines in India in tonnes (Source: CMFRI) Fm1 and Fm3 say this year was a very bad year for sardine catches. One of the auctioneers on Dhakke landing said that this year the boats have no sardine catch at all (AUD1). Fm2 says in the last 4 years there has been a shortage of sardine and since this year they started catching leather jacket. Fm2 also mentions that the sardine stock has migrated to Oman. This is most likely the reason that Fmp1 is in the procedure of opening a plant in Oman and Fmp5 has recently opened a plant in Muskat (U.A.E). According to Fm3 weather events displaced the sardine stock, fm3 says that once every couple of years the sardine stock goes down due to natural
0 20000 40000 60000 80000 100000 120000 140000 160000 180000 2013 2014 2015 2016 2017 Ca tch in to nn es Year Other sardines Oil Sardine 0 100000 200000 300000 400000 500000 600000 700000 800000 900000 1000000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Ca tch in to nn es Year Other sardines Oil Sardine
fluctuations. In figure 4. it can be seen that while sardine catch is greatly fluctuating, leatherjacket catch is increasing steadily, with more than 4 times the amount of catch in 2017 compared to 2013 in Karnataka (CMFRI, 2019). One of the boat owners in Dhakke says that according to traditional knowledge the Leatherjacket fish is an indication of famine (BD1). The lesser quality of fish means that export is lower for Fmp2. Fm4 says the catch of leather jacket instead of sardine forces them to sell their fish meal on the local market. The factory can’t be shut down and the quality of leather jacket is too bad for export purposes.
4.2.2 Institutions and laws concerning Fisheries and FMFO Industry
Annually the supply goes down towards the end of the season. In the first 2 to 3 months of this season sardine catch has been seen, then about 20% of what goes into the factory is sardine (Fm3). From mid August till September it is peak season, then there is full supply of fish (Fm5). The season always ends and starts with the fish ban. The fish ban is during June, July and August. This is a governmental law to give species time to spawn. In this time maintenance in the factories is done. In the ban period, export mostly happens but production is at a standstill (Fmp3).
There is the IAE, export inspection agents and marine exporters developmental quality, these are bodies that audit the factories on a regular basis to keep standards high (Fm1). There is an association for fish meal exporters and manufacturers to make policies (Fmp3). Next to this, the government gives a small export incentive (Fm1, Fm4), this is 5.5 percent and fishermen get a subsidy for the fuel (Fm2). Fm4 says there is also a subsidy for buying machinery from other countries.
Air and water pollution seems to be a problem for the fish meal factories, there are laws concerning pollution in the water act from 1974 and the air act from 1981 (Ex6). The factories have to renew their consent every 5 years. When looking into documents from the Karnataka state pollution control board it seemed that the factories were mostly non-conforming to the rules. This means that they cross certain parameters for polluting. Complaints about odour also come from inhabitants living close to the factories. These complaints seem to get less since factories operate less long because of the bad availability of raw material (Ex6).
There are policies for sustainable fishing and for the environment (Fmp3). One of these laws regards the fish count, how much fish can go into one KG, if the count is really high the fish is too small (young) and it’s not legal to sell (Fm6.1). It seems like the government does not enforces these laws, they will only check when claims are made (Fm6.1). Then there are government regulations for transport; “They are actually supposed to bring the fish in iced condition, the temperature should be below 4 degrees but the government doesn’t follow up on this.” (Ex4). This means that there are rules for fisheries about icing conditions but they are not being enforced, meaning that factory fish will often be in bad quality leading to less yield and lower protein content for the fishmeal.
4.3 Technical Aspects of Fish Meal & Fish Oil
In order to understand the strategies certain factories employ and the impacts these have, some characteristics of fish meal and fish oil should be explained. These characteristics are dependent on certain strategies employed by the FMFO industry. 4.3.1 Process of Reduction Figure 7: The process of reduction (Source: Bawa fishmeal) The process of reduction for most plants is shown in figure 7. it shows the different steps and machinery the raw material goes through to get to certain end products. The raw material used for the process of reduction in the research area could be divided in 3 categories: sardines, leatherjacket and trash fish. Trash fish is fish that gets landed with less or no preservation (Dineshbabu et al., 2014). Mostly FMFO factories would also call this mixed fish to make it sound more appealing. Only from sardine fish oil can be produced, next to fish meal. Leatherjacket and trash fish would both give different qualities of only fish meal. In the process of reduction mostly 3 end products can be distinguished; fish oil, fish meal and fish soluble. Only Fmp6 also produces FPH: “They take the fish and steamcook it. They press it, so they get water and the cake, so water what they do they decanted it. Take out all the suspended particles. Now
the liquid part they concentrate it by multiplier operation. Now when they concentrate, it becomes very thick, so they add certain enzymes and then they reduce the costs. Now that, one part will go for soluble paste, other part is hydrolysed for what we call; FPH, Fish Protein Hydrolysate. So that is a premium product, fish protein advancer. Which mainly goes for the pet food and in agriculture for very high end use, like for cactus or for particular gardening, they use for that.” (Ex5)
Normally FPH is a product that comes from the cutting waste from the cutting industry, where surimi is made. Fmp6 is one of the first to produce FPH in the fishmeal industry.
4.3.2 FMFO Product Characteristics
Firstly the species used for FMFO is very important. Species with more bones will provide a lower protein content in the fish meal and fishmeal is valued for its protein content (Ex4). The same goes for prawn or shell waste, this drives the mineral content up and therefore the protein content goes down (Ex4). Next to this, freshness is very important: “Fish which has lost its freshness, or degenerated fish will give worse quality fishmeal. Also the oil will have more free fatty acids” (Ex4). The yield as well as the protein content of the fish meal will be lower if the fish is not fresh. The oil content in Fish meal has to be low (below 10%) because this will enhance the oxidation process and therefore bring the quality down.
Grade Protein content Oil content
1st >60% <10% 2nd >50% <10% 3rd (No specification) <50% - Table 5. Fish meal grading The characteristics of Fish oil also depend on the species and the freshness. “When they use leatherjacket they don’t get any oil, absolutely no oil. Also what they call mixed catch, it mainly goes for fishmeal.” (Ex5) Fmp2 say that when using leatherjacket, skin thickness is a big problem for quality. This means that only certain types of sardine are useful for the production of fish oil. (Sardine) oil is desired for its Omega-3 fat content, this is used to fatten fish in aquaculture quickly. “The oil is energy rich, 9 kilocalories per gram, where carbohydrates only have 4 kilocalories per gram” (Ex4). There is only one disadvantage in using fish oil, it gives a fishy smell to the muscle of the animal that consumes it. Therefore for poultry culture they will not use more then 6-8% oil in a feed composition because this influences the smell and taste.
Omega 3 fatty acids Free fatty acid content Peroxide value
Sardine oil >25% <1% 10 mg/kg
Table 6. Fish oil characteristics
In fish oil high free fatty acid content is undesired, this goes up when the fish decays by enzyme reaction. The oil should not get oxidized and therefore anti-oxidants are used, still it is difficult to maintain the quality of the oil. There are a lot of restrictions on usage of anti oxidants because in the past anti-oxidants have been used that were cancerous in the long run (Ex5).
The usage of FM and FO in feed differs per feed. The content of fishmeal in prawn feed would be around 50%. Fish oil in poultry would be 3 to 5% because it will give a fishy smell to the meat (Ex4). This smell is undesired for poultry and therefore the percentage of oil in fish feed can be a little higher. It’s therefore often used in salmon feed to fatten the fish.
5 SUPPLY CHAIN RELATIONSHIPS
In order to understand how FMFO factories structure themselves to secure a continuous supply and how they deal with changes in the availability of raw material, the relation of the FMFO industry to the fishing industry should be plotted out. This chapter will show the supply and demand of FMFO and all the agreements, relationships and transactions that exist in between. This chapter is therefore concerned with understanding both how fish flows from fishermen till the factory, and (to a lesser extent) beyond the factory to its final users, as well as the human relationships that structure and direct these flows. The chapter will start with key characteristics of the factories and from there go backwards into the value chain, explaining the linkages step by step. 5.1 Factory The FMFO factories all have different characteristics; they might be part of a bigger company and have multiple locations. The capacity, raw material used and the end product can also differ. In table 5 the most important characteristics of the factories used in this study are shown.
location Capacity (Mt/day) Other locations Raw material Product Fmp1 Mukka,
Ullal 1000 (joint) Oman Sardines, jack mackerels,
trash fish, leather jacket
Fish meal, fish oil, soluble
Fmp2 Ullal - None Indian oil
sardine, leather jacket
Fish meal, fish oil, soluble
Fmp3 Ullal 100-200 Goa, Tamil Nadu Sardines,
mackerel, trash fish, leatherjacket Fish meal, fish oil, soluble
Fmp4 Ullal (3x) 200 (550 joint) None Sardine,
leatherjacket Fish meal, fish oil, Fmp5 Mukka,
Ullal 500 (Mukka) Gujarat, Tamil Nadu, Muskat (U.A.E.) Sardines, mixed fish, tuna, leatherjacket Fish meal, fish oil, soluble
Fmp6 Kota 500 None Oil sardine,
mackerel, leather jacket and trash (or mixed) fish Fish meal, fish oil, soluble, FPH Table 7. FMFO plant characteristics The raw material procured by Fmp1, Fmp2 and Fmp6 is sourced from all over the westcoast; Karnataka, Kerala down till Kochi, up to Maharastra, Mumbai and Goa. The main landing is in Mangalore but the catch in Dhakke is not good, mostly leatherjacket fish for the FMFO industry. Fm1 mentions that on the west coast every
50/60 kilometre there is a landing place. The same goes for Fmp3 they procure from major ports on the west coast, even as north as Gujarat. Fmp4 also procures from Tamil Nadu (east coast). Fmp5 gets it from small landing places on the west coast, mostly places nearby (500 KM) to shorten transportation. Fmp6 says they get it from all the maritime states of India, from Ratnagiri to Tamil Nadu and Andra Pradesh.
Most fish meal plants seem to be private owned companies with a family background. Fm3 says there is a association of all fish meal manufacturers as well as a exporters union so their clustering is easy to make policies and plan accordingly. The factories buy from deep sea trawling boats, purse seiners and motorized katamarans. Fm1 says pelagic fishes are best caught by katamarans and purse seiners. Fm1 believes the current catch is bad because the fisheries are not giving the fish enough respawn time. Fm1 says that the raw material can be traced back with boat numbers to see what boat and area it is from. The fishmeal plants use brokers or middlemen (agents) to procure fish from the boat, they negotiate about a price. Fmp4 contracts the agents and gives commission over the amount of raw material. Fmp5 has a 2 year agreement on a certain amount of raw material that should be provided. Fmp6 procures fresh fish directly from the boat, trash fish will be procured through an agent.
Fm1 mentions that after 2000, 2005 the aquaculture boom started and that this made fish meal big and India turned out to be a good exporting country for fish meal. Mangalore turned out to be a good place for fishmeal production for the factories because of the availability of raw material compared to other parts of the country. Fm2 says there are so many factories in Mangalore because of the closeness to Kerala where there was a higher sardine availability and Mangalore is a good export port. The last years the catch has not been good on the west coast of India and Fm1 explains that they are currently opening a plant in Oman. Fmp5 has recently opened a factory in Muskat (U.A.E), showing that the factories go where the availability of fish is.
All factories face the problem of the lesser availability of good raw material. The production always depends on the scarcity of the raw material. Fm3 mentions that the percentages of FM and FO coming out of the factory greatly depend on the season because of the fish species used. In the beginning of the season this would be sardine, during off season this trash fish and leatherjacket. The trash fish will come from deep sea fishing boats only. Fm4 says that they didn’t get any sardine this year so they had to use leather jacket because they can’t shut down the factory. This lesser end product can’t be exported so will be sold in India. 5.2 The Factory - Agent Relationship There is a lot of diversity among agents but their role in the industry is always the same; they are there to provide direct money to boat owners. The agents will most likely have some traditional link to other agents, to boat owners or to the factory. History, family and background decide a relationship between boat owners and agents, and agents amongst each other. AD4 explains that these relations are all
