Evaluation of New Fishery Performance Indicators

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52

EVALUATION OF NEW FISHERY Public Disclosure Authorized PERFORMANCE INDICATORS (FPIs): A Case Study of the Blue Swimming Crab Fisheries in Indonesia and Philippines Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

MAY 2012 AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs): A Case Study of the Blue Swimming Crab Fisheries in Indonesia and Philippines © 2012 International Bank for Reconstruction and Development / International Development Association or The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org

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Cover Photos: Finnbogi Alfredsson CONTENTS III

TABLE OF CONTENTS

List of Figures ...... v

List of Tables ...... vii

Acknowledgments ...... ix

About the Authors ...... xi

Acronyms and Abbreviations ...... xiii

Executive Summary ...... xv

Chapter 1: Introduction ...... 1 1.1: Background ...... 1 1.2: Purpose of the Study ...... 1 1.3: Structure of the Study ...... 2

Chapter 2: Overview of FPIs and Studied Fisheries...... 3 2.1: Fishery Performance Indicators (FPIs) ...... 3 2.2: Case Study Fisheries ...... 7

Chapter 3: FPIs’ Application on BSC Fisheries—Output Results ...... 15 3.1: Ecological Sustainability ...... 15 3.2: Harvest Sector Performance ...... 17 3.3: Post-Harvest Performance ...... 24

Chapter 4: FPIs’ Application on BSC Fisheries—Inputs Results...... 35 4.1: Macro Factors ...... 35 4.2: Property Rights and Responsibility ...... 39 4.3: Management...... 43 4.4: Post-Harvest Inputs ...... 47

Chapter 5: Conclusions ...... 51 5.1: Regarding the Studied Fisheries ...... 51 5.2: Regarding the Fishery Performance Indicators (FPIs)...... 52

Appendix A: Fishery Performance Indicators—Manual ...... 55

Appendix B: Suggested Revision and Additional Indicators ...... 75

Appendix C: Milestones of Fishery Performance Indicators (FPIs)...... 93

Appendix D: FPIs Application—Output Results ...... 95

Appendix E: FPIs Application—Input Results ...... 97

References ...... 99

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52

LIST OF FIGURES V

LIST OF FIGURES

Figure 2.1: Blue Swimming Crab Landings in Indonesia (1970–2008)...... 8

Figure 2.2: Major Blue Swimming Crab Catching Areas in Indonesia (1990–2006) ...... 9

Figure 2.3: Value Chain and Stakeholders Involved in BSC Fisheries in Indonesia ...... 10

Figure 2.4: Landings of BSCs in the Philippines ...... 12

Figure 2.5: Supply Chain in the Philippines’ Blue Swimming Crab Industry ...... 13

Figure 3.1: Fish Stock Health and Environmental Performance ...... 16

Figure 3.2: Ecologically Sustainable Fisheries ...... 16

Figure 3.3: Harvest Performance ...... 17

Figure 3.4: Summary of Harvest Performance...... 18

Figure 3.5: Asset Performance ...... 19

Figure 3.6: Summary of Asset Performance...... 20

Figure 3.7: Risk Exposure ...... 22

Figure 3.8: Summary of Risks ...... 22

Figure 3.9: Boat Owners/Captain ...... 23

Figure 3.10: Summary of Boat Owners/Captain...... 23

Figure 3.11: Crew ...... 25

Figure 3.12: Summary of Crew Performance ...... 25

Figure 3.13: Summary of Harvest Sector Performance ...... 25

Figure 3.14: Market Performance ...... 27

Figure 3.15: Summary of Market Performance ...... 27

Figure 3.16: Processing and Support Industry Performance ...... 28

Figure 3.17: Summary of Processing and Support Industry Performance...... 28

Figure 3.18: Post-Harvest Asset Performance ...... 29

Figure 3.19: Summary of Post-Harvest Asset Performance...... 29

Figure 3.20: Processing Owners and Managers...... 30

Figure 3.21: Summary of Processing Owners/Managers ...... 31

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 VI LIST OF FIGURES

Figure 3.22: Processing Workers ...... 32

Figure 3.23: Summary of Processing Workers ...... 32

Figure 3.24: Summary of Post-Harvest Sector Performance ...... 33

Figure 4.1: General Environmental Performance ...... 36

Figure 4.2: Country-Level Governance...... 36

Figure 4.3: Economic Condition ...... 37

Figure 4.4: Exogenous Environmental Factors...... 38

Figure 4.5: Summary of Macro Factors ...... 38

Figure 4.6: Asset Rights ...... 40

Figure 4.7: Summary of Asset Rights ...... 40

Figure 4.8: Harvest Rights ...... 42

Figure 4.9: Summary of Harvest Rights ...... 42

Figure 4.10: Collective Action ...... 42

Figure 4.11: Summary of Collective Actions...... 42

Figure 4.12: Summary of Property Rights ...... 43

Figure 4.13: Management Inputs ...... 44

Figure 4.14: Summary of Management Inputs ...... 44

Figure 4.15: Data Management ...... 45

Figure 4.16: Participation ...... 46

Figure 4.17: Summary of Management ...... 46

Figure 4.18: Market and Market Institution ...... 48

Figure 4.19: Summary of Market and Market Institution ...... 48

Figure 4.20: Infrastructure ...... 50

Figure 4.21: Summary of Infrastructure ...... 50

Figure 4.22: Summary of Post-Harvest ...... 50

Figure 5.1: Summary of FPIs’ Output—Measuring Wealth ...... 52

Figure 5.2: Summary of FPIs’ Input—Enabling Wealth ...... 52

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) LIST OF TABLES VII

LIST OF TABLES

Table 2.1: Prototype Fishery Performance Indicators—Outputs (Measuring Success) ...... 4

Table 2.2: Prototype Fishery Performance Indicators—Inputs (Enabling Factors) ...... 5

Table 2.3: Questions FPIs Attempt to Answer ...... 7

Table 2.4: Immature BSC Catch Rate for Different Gears ...... 13

Table 3.1: Score System for Indicators of Ecological Sustainability ...... 16

Table 3.2: Score System for Indicators of Harvest Performance ...... 17

Table 3.3: Score System for Indicators of Asset Performance ...... 19

Table 3.4: Score System for Indicators of Risk Exposure ...... 21

Table 3.5: Score System for Indicators of Boat Owners/Captain ...... 22

Table 3.6: Score System for Indicators of Crew ...... 24

Table 3.7: Score System for Indicators of Market Performance ...... 26

Table 3.8: Score System for Indicators of Processing and Support Industry Performance ...... 28

Table 3.9: Score System for Post-Harvest Asset Performance ...... 29

Table 3.10: Score System for Processing Owners/Managers...... 30

Table 3.11: Score System for Processing Workers ...... 32

Table 3.12: Summary of FPIs’ Output Results ...... 33

Table 4.1: Score System for General Environmental Performance ...... 35

Table 4.2: Score System for Governance—Country Level...... 36

Table 4.3: Index of Economic Freedom (IEF), 2011 ...... 36

Table 4.4: Score System for Economic Conditions—Country Level ...... 37

Table 4.5: Score System for Exogenous Environmental Factors ...... 38

Table 4.6: Score System for Access Rights...... 39

Table 4.7: Score System for Harvest Rights ...... 41

Table 4.8: Score System for Collective Action ...... 42

Table 4.9: Score System for Management Inputs ...... 44

Table 4.10: Score System for Data Management ...... 45

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 VIII LIST OF TABLES

Table 4.11: Score System for Participation ...... 46

Table 4.12: Score System for Market and Market Institution ...... 48

Table 4.13: Score System for Infrastructure ...... 49

Table 4.14: Summary of FPIs’ Output Results ...... 50

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) ACKNOWLEDGMENTS IX

ACKNOWLEDGMENTS

This study was written by Jingjie Chu (Natural Resource Economist, Agriculture and Rural Development Department, World Bank), James L. Anderson (Fisheries and Aquaculture Adviser, Agriculture and Rural Development Department, World Bank), and Christopher M. Anderson (Associate Professor, University of Washington). James and Christopher developed the prototype method and manual of the Fishery Performance Indicators (FPIs) sponsored by ALLFISH (Public Private Partnership of PROFISH). Jingjie Chu produced the FPIs survey design, completed the manual revision, and managed the implementation. This study was built on the results of a survey applying FPIs to blue swimming crab fi sheries in Indonesia and the Philippines which was conducted by Dessy Anggraeni (Sustainable Fisheries Partnership) and Jimely Flores (Sustainable Fisheries Partnership), respectively. ALLFISH fi nancially supported the survey. Stetson Tinkham (International Coalition of Fisheries Associations) and Purbasari (Sari) Surjadi (Sustainable Fisheries Partnership) helped the coordination. Additionally, Finnbogi Alfredsson, as a fi shery specialist when working in PROFISH, applied FPIs to the Icelandic lobster fi shery as a comparison benchmark.

The authors are grateful for the support and clear guidance from Juergen Voegele (director, Agriculture and Rural Development Department [ARD], World Bank) and Mark Cackler (sector manager, ARD, World Bank). The authors wish to thank the peer reviewers for their contributions and also the participants of the Project Concept Note Review Meeting and Decision Meeting for their constructive and insightful suggestions and comments, including Marea Eleni Hatziolos (senior environmental specialist, East Asia Social, Environment and Rural [EASER], World Bank), John Virdin (senior natural resource management specialist, Africa Environment and Natural Resource Management [AFTEN], World Bank), Michael Arbuckle (senior fi sheries specialist, ARD, World Bank), Grahame Dixie (senior agribusiness specialist, ARD, World Bank), Andrew Kaelin (consultant, AIS Development LLC), Xavier Vincent (senior fi sheries specialist, AFTEN, World Bank), Oleg Martens (senior fi sheries specialist, World Wildlife Fund [WWF]), Tim Bostock (senior fi sheries specialist, ARD, World Bank), Randall Brummett (senior aquaculture specialist), Kieran Kelleher (consultant, ARD, World Bank), James Smith (senior livestock specialist, ARD, World Bank), and Irina Gabrial (operations specialist, ARD, World Bank). The authors wish to thank Felicitas Doroteo-Gomez (program assistant, ARD, World Bank) for her logistic support.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52

ABOUT THE AUTHORS XI

ABOUT THE AUTHORS

Jingjie Chu is currently a natural resource economist in the Africa Environment and Natural Resource Management (AFTEN) unit at the World Bank. This study was mainly done when she was a young professional in the Agriculture and Rural Development Department (ARD) of the World Bank. She joined the World Bank in 2009 after receiving her Ph.D. in Environmental and Natural Resource Economics from the University of Rhode Island. She has been involved in the Fishery Performance Indicators (FPIs) development and implementation, and economic analysis for other ﬁ sheries projects in Africa and East Asia.

James L. Anderson is the World Bank’s advisor in fi sheries and aquaculture and leader of the Bank’s Global Program on Fisheries (PROFISH). He is involved with numerous projects related to fi sheries and aquaculture management, seafood markets, and international trade. Recent projects have focused on global salmon, tuna, scallop, oyster, and shrimp markets and management. In 2003, his book entitled The International Seafood Trade was published. In 2007, he coauthored The Great Salmon Run: Competition between Wild and Farmed Salmon with Gunnar Knapp and Cathy Roheim. He was the editor of Marine Resource Economics, the leading international journal in the fi eld for over 10 years. He has served on three National Research Council committees related to aquaculture and cochaired the committee on the introduction of nonnative Asian oysters. He earned his Ph.D. in Agricultural and Resource Economics from the University of California at Davis.

Chris M. Anderson is currently an associate professor in the School of Aquatic and Fishery Sciences at the University of Washington. His research uses game theory, behavioral economics, experimental economics, and applied econometrics to understand the individual decisions underlying natural resource use, and to design methods and institutions for managing them. His projects include designing auctions for fi shing quota in New Zealand and oil tract leases in the Gulf of Mexico; developing and testing mechanisms for the provision of ecosystem service public goods; and studying alternative rules of trade that better facilitate price discovery in transferable fi shing quota systems. He is currently building a new dynamic common pool resource environment for evaluating catch share fi shery management, and developing a rapid assessment instrument for assessing wealth generation in fi shery-dependent communities. He earned a bachelor degree in Applied Math and Economics at Brown University, and a Ph.D. in Social Science at the California Institute of Technology.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52

ACRONYMS AND ABBREVIATIONS XIII

ACRONYMS AND ABBREVIATIONS

AFTEN Africa Environment and Natural Resource ICFA International Coalition of Fisheries Management, the World Bank Group Associations

APRI Asosiasi Pengelolaan Rajungan Indonesia IEF Index of Economic Freedom (Indonesia Blue Swimming Crab Processing Association) ITQ Individual Transferable Quota

ARD Agriculture and Rural Development LGU Local Government Unit Department, the World Bank Group MEY Maximum Economic Yield

ATC Airtight container MMAF Ministry of Marine Affairs and Fisheries, BFAR Department of Agriculture–Bureau of Fisheries Indonesia and Aquatic Resources, the Philippines MSC Marine Stewardship Council

BSC Blue Swimming Crab MSY Maximum Sustainable Yield

CPUE Catch per Unit of Effort NFI National Fisheries Institute

EASER East Asia-Social, Environment, and Rural NMFS National Marine Fisheries Services

EPI Environmental Performance Index NIACDEV Northern Iloilo Alliance for Community FAO Food and Agriculture Organization of the Development United Nations PROFISH Global Program on Fisheries, the World Bank FIP Fisheries Improvement Project Group

FPIs Fishery Performance Indicators SFP Sustainable Fisheries Partnership

JICA Japan International Cooperation Agency WGI Worldwide Governance Indicators

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52

EXECUTIVE SUMMARY XV

EXECUTIVE SUMMARY

Currently, the World Bank has about $600 million invested in its fi shery-related portfolio. It is anticipated that the commitment to fi sheries and aquaculture will increase considerably in the next few years. However, the task team leaders have been struggling to identify an adequate monitoring and evaluation tool. None of the proposed indicators capture the full effectiveness of fi shery management, and none help the decision makers understand causal links. Some indicators primarily focus on ecological sustainability, such as measuring the status of fi sh stock, while others narrowly focus on the economic aspects, such as net economic benefi t or fi shery revenue. Additionally, the cost of collecting detailed biological or economic data can be prohibitive or simply not feasible in some developing countries.

There is an urgent need to develop indicators that can measure the success of ﬁ sheries management systems in achieving the “triple bottom line” of environmental, economic, and social sustainability. The measurement approach should also help decision makers understand the linkage between success and management inputs, infrastructure, enforcement, the marketing system, and exogenous factors. Furthermore, the indicators must be relevant, accurate, quantiﬁ able, understandable, replicable, comparable between developed and developing regions, and readily available using current expertise and data.

The new Fishery Performance Indicators (FPIs) aspire to meet these conditions (Anderson and Anderson 2010). The FPIs are a new set of indicators for evaluating and comparing the world’s fi sheries management systems based on their success in being ecologically sustainable, socially acceptable, community enriching, and generating sustainable resource rents or profi ts. The FPIs fall into two categories. The fi rst category is indicators of outputs that identify and measure key factors that refl ect success or failure in achieving the triple bottom line from fi sheries. The second consists of input factors that enable or contribute to the process of developing sustainable and wealth-creating fi sheries. FPIs are designed to be clearly defi ned and easy to apply for a knowledgeable expert. The FPIs are intended to be completed within days. This rapid assessment approach can give a clear picture of the ecological, social, and economic situation associated with the fi sheries management system.

The objectives of this report are to:

a. Field-test the FPIs as an evaluation tool for the Philippine and Indonesian blue swimming crab fi sheries. b. Compare the results with those for the Icelandic lobster fi shery. This provides an aspirational target for improvement as well as an additional test of the FPIs. c. Evaluate the limitations and strengths in FPIs based on the application above; feedback of the workshop conducted in May 2011; and input from over 30 researchers, government agencies, the private sector, and nongovernmental organizations (NGOs) from around the world. Special attention is given to application in data-poor situations. d. Provide explicit revisions to the FPIs based on (c) as a fi nal step prior to broader application.

The results of the fi eld test indicate that the FPIs represent a useful and powerful tool for fi shery project monitoring and evaluation. The experience indicates that application in the Philippines, Indonesia, and Iceland can be completed in about 2 weeks at relatively low cost. Despite the ease of application, the quality of the data is high, yielding a good snapshot of the biological, economic, and community conditions associated with the corresponding fi shery. Notably, the indicators capture key features of success:

Fish Stock Health and Environmental Performance Harvest Performance Efﬁ ciency Harvest Asset Performance (Vessels, etc.)

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 XVI EXECUTIVE SUMMARY

Risk Exposure Conditions Facing Owners, Permit Holders, and Captains Conditions Facing the Crew Market Performance Processing and Support Industry Performance Post-Harvest Asset Performance (Processing Plants, etc.) Conditions Facing Processing Owners and Managers Conditions Facing Processing Workers

The indicators also capture essential features of the enabling input factors:

General Environmental Conditions Exogenous Environmental Factors (especially pollution and climate change–related factors) National Governance Conditions National Economic Conditions Characteristics of Fishing Access Rights Characteristics of Fishing Harvest Rights Participation in Co-Management Management Inputs (e.g., expenditure and enforcement) Data Collection and Analysis Participation by Stakeholders Markets and Market Institutions Infrastructure

Although the application of the FPIs and the feedback from the research workshop in May 2011 was very positive, there were several improvements to the scaling of the indicators and a few omissions that need to be revised for scaled-up application. The suggested revisions in the scaling are identiﬁ ed in the text, and some speciﬁ c recommendation for additions are found in Appendix B.

Overall, once the revisions have been incorporated the FPIs are ready to be scaled up as a tool for all the fi shery projects in the World Bank, as a management assessment tool or a tool to evaluate investment opportunity. A detailed FPI assessment for each targeted country will assist management decisions for all the target fi shery projects regardless of their implementation status. For projects that are in the planning stage, the output will help identify the strengths and weaknesses of the fi sheries and thus enable the identifi cation of evidence-based policy suggestions. For projects under implementation, the output will help measure their effectiveness in improving fi shery performance.

The Bank is moving to enhance its activity related to the oceans, and the FPIs will have great value in identifying key target fi sheries and measuring progress. At maturity, the FPIs could be implemented and accessed via a dashboard containing hundreds of fi sheries, with data collected at regular intervals to monitor sustainable wealth-creating fi sheries within and across management systems. The idea, logic, and design of the indicators can help develop a broadened set of indicators that can be applied to codependent fi shery-aquaculture and aquaculture management systems.

Above all, the impact of these indicators is potentially transformative. They will be effective levers to promote change but also suggest what changes should be made to result in sustainable improvement in the ﬁ shery, the economic conditions, and community status.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 1 — INTRODUCTION 1

Chapter 1: INTRODUCTION

1.1 BACKGROUND evaluating and comparing the world’s fi sheries management In 2005, the World Bank formally reengaged in the fi sheries systems based on their success in being ecologically sustain- sector, with the establishment of a multidonor trust fund, able, socially acceptable, community enriching, and generat- Global Program on Fisheries (PROFISH), to provide seed capi- ing sustainable resource rents or profi ts. This triple bottom tal for a new portfolio of investments that would focus on as- line measurement metrics ensure the fi shery management sisting countries to reform fi sheries governance. Over the sub- system is not biased toward one aspect and neglects the sequent years, a number of new investments were launched other as these three dimensions are critical for achieve long- with PROFISH’s support, particularly in Africa and East Asia. term sustainability. The FPIs integrate ecological, social, and Currently, the Bank’s portfolio related to fi sheries has grown to economic dimensions to measure the output of the fi sheries over $600 million and is expected to continue to grow rapidly. (identifying where wealth accumulates within the value chain) and input factors (assessing the levels of factors contributing Building on these experiences and continued interest from the to the sustainable wealth creation). They are designed not global community, in 2011 the World Bank launched a Strategy only as a basic measurement tool, but also as a framework Vision for Fisheries and Aquaculture articulated by PROFISH for identifying what policies and interventions are likely to to guide further implementation of these investments and ex- have the greatest impact. This work was originally supported panded support for fi sheries governance reforms and sustain- by ALLFISH (a public private partnership initiative the World able fi sheries and aquaculture management in client countries Bank established and that is managed by the International (PROFISH 2011). Following this, a note on the application of Coalition of Fisheries Associations-ICFA). this strategy to the Africa region was developed to meet the demand of the growing portfolio in the region (AFTEN 2011). 1.2 PURPOSE OF THE STUDY There is a strong need for the Bank and its partners to take To further develop and fi nalize the FPIs for scaling up to the a global view of the success of these investments. For this Bank’s entire fi sheries portfolio, a number of specifi c pilots reason, the Bank has supported work to defi ne a global set and case studies have been conducted. This report provides of Fishery Performance Indicators (FPIs). The goal is to de- an overview of the FPIs, and a summary of two case studies velop indicators that can measure the success of fi sheries in its application, the blue swimming crab (BSC) fi sheries in management systems in achieving the “triple bottom line” Indonesia and the Philippines. A comparative analysis with of environmental, economic, and social sustainability—a set an Icelandic lobster fi shery is conducted as a benchmark, as of core indicators that can be applied across a diverse set the Icelandic lobster fi shery is also export oriented and has of fi sheries to evaluate and monitor the performance. The been recognized as a well-managed fi shery. measurement approach should also help decision makers understand the linkage between success and management The objective of this study is to: inputs, infrastructure, enforcement, the marketing system, Field-test the application of FPIs for the Philippine and and exogenous factors. Furthermore, the indicators must be Indonesian blue swimming crab fi sheries to evaluate relevant, accurate, quantifi able, understandable, replicable, the applicability of the FPIs for developing countries in comparable between developed and developing regions, and order to fi nalize the FPIs for scaling up. readily available using current expertise and data. Compare the results with results for the Icelandic lobster The new FPIs aspire to meet these conditions (Anderson fi shery. This provides an aspirational target for improve- and Anderson 2010). The FPIs are a new set of indicators for ment as well as providing an additional test of the FPIs.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 2 CHAPTER 1 — INTRODUCTION

Evaluate the limitations and strengths in FPIs, based Chapter 3 presents the results for FPIs that measure on the application above, feedback of the workshop the success (“Outputs”) in achieving the “triple conducted in May 2011, and input from over 30 bottom line” of environmental, social, and economic researchers, government agencies, the private sector, sustainability and provides a critical evaluation of and NGOs from around the world. Special attention is strengths, weaknesses, and omissions of the current given to application in data-poor situations. FPIs design. Provide explicit revisions to the FPIs based on the Chapter 4 presents the results for FPIs that mea- above step as a fi nal step prior to broader application. sure factors (“Inputs”) that enable (or undermine) the likelihood that the triple bottom line will be An additional benefi t, but not the central goal of this study, achieved and provides a critical evaluation of is to provide useful information for conservation and man- strengths, weaknesses, and omissions of the agement of the blue swimming crab fi sheries in these two current FPIs design. countries by identifying the strengths and weaknesses of Chapter 5 summarizes the results and draws conclu- current fi shery management in terms of wealth generation sions about the applicability of FPIs and next steps. as refl ected in economic, environmental, and community Five appendices provide supplementary informa- conditions. tion. Appendix A provides detailed explanation of the rationale and measurement for each indicator. 1.3 STRUCTURE OF THE STUDY Appendix B lists additional suggested indicators The study is organized as follows: based on the case studies. Appendix C lists the participants who have attended the workshops in Chapter 2 provides a brief introduction of Fishery London and Hawaii. Appendixes D and E illustrate Performance Indicators (FPIs) and the blue swim- the FPIs’ output and input results for the studied ming fi sheries in Indonesia and the Philippines. fi sheries, respectively.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 2 — OVERVIEW OF FPIs AND STUDIED FISHERIES 3

Chapter 2: OVERVIEW OF FPIs AND STUDIED FISHERIES

2.1 FISHERY PERFORMANCE INDICATORS (FPIs) Market Performance Fishery Performance Indicators (FPIs) make up a multidi- Processing and Support Industry Performance mensional index used to provide a rapid assessment of the Post-Harvest Asset Performance (Processing Plants, successes and failures of a particular fi shery and manage- etc.) ment system with regard to sustainable wealth generation Conditions Facing Processing Owners and Managers (Anderson and Anderson 2010). The rationale behind the FPI Conditions Facing Processing Workers is that a fi sheries ecological sustainability is a necessary but not suffi cient condition to ensure the maximum economic There are 46 input factors that enable (or undermine) the suc- yield. The FPIs are designed to evaluate and compare the cess of a fi shery to achieve the triple bottom line (table 2.2), world’s fi sheries management systems based on their suc- including the following: cess in being ecologically sustainable, socially acceptable, community enriching, and generating sustainable resource General Environmental Conditions rents or profi ts. This triple-bottom measurement metrics en- Exogenous Environmental Factors (especially pollution sures the fi shery management system is not biased toward and climate change–related factors) one aspect and neglects the others as all three dimensions National Governance Conditions are critical to achieve long-term sustainability. National Economic Conditions Characteristics of Fishing Access Rights The FPIs fall into two categories. The fi rst category is indica- Characteristics of Fishing Harvest Rights tors of outputs that identify and measure key factors that refl ect success or failure in achieving the triple bottom line Participation in Comanagement from the fi sheries. The second consists of input factors that Management Inputs (e.g., expenditure and enable or contribute to the process of developing sustainable enforcement) wealth-creating fi sheries. FPIs are designed to be clearly de- Data Collection and Analysis fi ned and easy to apply for a knowledgeable expert. The FPIs Participation by Stakeholders are intended to be completed within days. This rapid assess- Markets and Market Institutions ment approach can give a clear picture about the ecological, Infrastructure social, and economic situations associated with the fi sheries management system. All of the indicators are coded in a fi ve-point scale, with the bins generally chosen to refl ect the quintiles of performance There are 62 output indicators that capture key features of on the metric globally. Output indicators scored below 3.5 success (table 2.1), including the following: have substantial room for improvement. Output indicators Fish Stock Health and Environmental Performance scored below 2 (in the bottom two quintiles) are considered Harvest Performance Effi ciency to require urgent attention. Input factors are not necessarily monotonic (a higher score is not necessarily better). Harvest Asset Performance (Vessels, etc.) Risk Exposure A few distinguished features of FPIs include the following: Conditions Facing Owners, Permit Holders, and FPIs integrate governance, economic, and social dimensions Captains with ecological measurements to evaluate a fi shery at a Conditions Facing the Crew given point in time; FPIs evaluate the whole value chain, not

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 4 CHAPTER 2 — OVERVIEW OF FPIs AND STUDIED FISHERIES

TABLE 2.1: Prototype Fishery Performance Indicators—Outputs (Measuring Success)

COMPONENT DIMENSION MEASURE CATEGORY Ecologically Sustainable Fisheries Fish Stock Health and Proportion of Harvest with a Third-Party Certifi cation Ecology Environmental Performance Fish Stock Sustainability Index (NMFS) Ecology Percentage of Stocks Overfi shed Ecology Nonlandings Mortality Ecology Harvest Sector Performance Harvest Performance Landings Level Economics Excess Capacity Economics Season Length Economics Harvest Asset Performance Ratio of Asset Value to Gross Earnings Economics Total Revenue versus Historic High Economics Asset (Permit, Quota) Value versus Historic High Economics Borrowing Rate Relative to Risk-Free Rate Economics Source of Capital Economics Functionality of Harvest Capital Economics Risk Annual Total Revenue Volatility Economics Annual Landings Volatility Economics Intra-annual Landings Volatility Economics Annual Price Volatility Economics Intra-annual Price Volatility Economics Spatial Price Volatility Economics Contestability and Legal Challenges Community Owners, Permit Holders, and Earnings Compared to National Average Earnings Community Captains Fishery Wages Compared to Nonfi shery Wages Community Education Access Community Access to Health Care Community Social Standing of Boat Owners and Permit Holders Community Proportion of Nonresident Employment Community Crew Earnings Compared to National Average Earnings Community Fishery Wages Compared to Nonfi shery Wages Community Education Access Community Access to Health Care Community Social Standing of Crew Community Proportion of Nonresident Employment Community Crew Experience Community Age Structure of Harvesters Community Post-Harvest Performance Market Performance Ex-Vessel Price versus Historic High Economics Final Market Use Economics International Trade Economics Final Market Wealth Economics Wholesale Price Relative to Similar Products Economics Capacity of Firms to Export to the United States and European Union Economics Ex-Vessel to Wholesale Marketing Margins Economics (Continued)

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 2 — OVERVIEW OF FPIs AND STUDIED FISHERIES 5

TABLE 2.1: Prototype Fishery Performance Indicators—Outputs (Measuring Success) (Continued)

COMPONENT DIMENSION MEASURE CATEGORY Processing and Support Yield of Processed Product Economics Industry Performance Capacity Utilization Rate Economics Product Improvement Economics Regional Support Businesses Economics Time to Repair Economics Post-Harvest Asset Borrowing Rate Relative to Risk-Free Rate Economics Performance Source of Capital Economics Age of Facilities Economics Processing Owners and Earnings Compared to National Average Earnings Community Managers Manager Wages Compared to Nonﬁ shery Wages Community Education Access Community Access to Health Care Community Social Standing of Processing Managers Community Nonresident Ownership of Processing Capacity Community Processing Workers Earnings Compared to National Average Earnings Community Worker Wages Compared to Nonﬁ shery Wages Community Education Access Community Access to Health Care Community Social Standing of Processing Workers Community Proportion of Nonresident Employment Community Worker Experience Community Source: Anderson and Anderson, 2010, as revised based on comments received at the May 2011 workshop.

TABLE 2.2: Prototype Fishery Performance Indicators—Inputs (Enabling Factors)

COMPONENT DIMENSION MEASURE Macro Factors General Environmental Environmental Performance Index (EPI) Performance Exogenous Environmental Disease and Pathogens Factors Natural Disasters and Catastrophes Pollution Shocks and Accidents Level of Chronic Pollution (A) Level of Chronic Pollution (B) Governance Governance Indicator—Effectiveness Governance Indicator—Voice and Accountability Economic Condition Index of Economic Freedom Gross Domestic Product (GDP) Per Capita Property Rights and Responsibility Access Proportion of Harvest Managed Under Limited Access Transferability Index Security Index Durability Index Flexibility Index Exclusivity Index (Continued)

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 6 CHAPTER 2 — OVERVIEW OF FPIs AND STUDIED FISHERIES

TABLE 2.2: Prototype Fishery Performance Indicators—Inputs (Enabling Factors) (Continued)

COMPONENT DIMENSION MEASURE Harvest Proportion of Harvest Managed with Rights-Based Management Transferability Index Security Index Durability Index Flexibility Index Exclusivity Index Collective Action Participation in Harvester Organizations Harvester Organization Inﬂ uence on Fishery Management and Access Harvester Organization Inﬂ uence on Business and Marketing Management Inputs Management Expenditure to Value of Harvest Management Employees to Value of Harvest Management Employees per Permit Holder Research as a Proportion of Fisheries Management Budget Level of Subsidies Data Data Availability Data Analysis Participation Days in Stakeholder Meetings Industry Financial Support for Management Post-Harvest Markets and Market Landings Pricing System Institutions Availability of Ex-Vessel Price and Quantity Information Number of Buyers Degree of Vertical Integration Level of Tariffs Level of Nontariff Barriers Infrastructure International Shipping Service Road Quality Index Technology Adoption Extension Service Reliability of Utilities/Electricity Access to Ice and Refrigeration Source: Anderson and Anderson, 2010, as revised based on comments received at the May 2011 workshop.

only the harvest sector, but also the post-harvest sector; with They do not generally require detailed data. They are quantifi - the separation between output result and input factors, FPIs able, understandable, accurate, and feasible. have the potential to provide solid quantitative proof to identify the most infl uencing factors for performance improve- The case studies in Indonesia and the Philippines for blue ment. This can give a clear direction for policy change and swimming crab fi sheries are the fi rst to be applied FPIs in the 1 intervention to obtain the most effective results. developing countries.

Anderson and Anderson (2010) developed a detailed manual 1 Recently, FPIs have been applied to Bangladesh inland fi sher- to explain each indicator (see Appendix A). A user-friendly ies, Uganda Nile Perch fi sheries, Uganda tilapia fi shery, Uganda Excel spreadsheet is designed for local experts to fi ll out eas- dagaa fi shery, Seychelles artisanal and semi-industrial fi sheries, Seychelles sea cucumber and lobster fi sheries, Ghana artisanal ily with summarized results and graphs. FPIs are designed to fi shery, Peruvian anchovy fi shery, and Vietnam coastal fi shery in be easy to collect and score across a wide range of fi sheries. Thanh Hoa.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 2 — OVERVIEW OF FPIs AND STUDIED FISHERIES 7

TABLE 2.3: Questions FPIs Attempt to Answer

CATEGORY QUESTIONS Outputs Indicators (Measuring Success) 1. What is the fi sh stock status (Percentage of stocks overfi shed, third-party certifi cation)? 2. What is the harvest sector status (landing level, excess capacity)? 3. How is the harvest sector asset performing (source of capital, borrowing rate, asset value trend)? 4. What are the risks this industry is facing (price, trade, legal, environmental)? 5. What is the status of boat owners/captain (income level, social standing, and proportion of nonresident employment)? 6. What is the status of the crew (income level, social standing, proportion of nonresident employment)? 7. What is the market performance (fi nal market, capacity of fi rms to export, market margins)? 8. What is the processing industry (yield rate, capacity utilization rate, product improvement, source of capital, borrowing rate)? 9. What is the status of processing facility owners (income level, social standing, and proportion of nonresident employment)? 10. What is the status of processing workers (income level, social standing, proportion of nonresident employment, child labor issue)? Input Factors (Enabling) 1. What is the general macro environment (EPI, governance indicator, GDP per capita, index of economic freedom)? 2. What is the level of the environmental risks (pollution, tsunami, hurricane)? 3. Are property/tenure rights in place and how are they defi ned (security, durability, fl exibility, exclusivity)? 4. To what degree can stakeholders participate in the management process (comanagement/corporate management system setup, role of industry organizations)? 5. What are the levels of subsidies? 6. Are the data on fi sheries sectors collected and decisions being made based on data analysis? 7. What is the business environment (time to get permit, easiness to renew, cost of compliance, tax level)? 8. What are the market conditions (quality of the product, number of buyers/sellers, supply chain)? 9. What is the relative condition of the infrastructure (transportation, utility, ice supply)? Source: Authors.

FPIs have value to many different users. For example, the international trade and have attracted the interest of the private development and aid agencies can use FPIs’ assessment sector in maintaining the sustainability of these fi sheries. The results to track the progress of the project and compare the private sector, especially processors, traders, retail, and res- performance before and after projects. The academic and re- taurants, is concerned about the health of the fi shery because search community can use FPIs to test different hypotheses it will affect their business and profi t. A National Fisheries regarding which factors have the most impact. Government Institute (NFI) Crab Council consisting of 12 U.S. importers and fi shery managers can use FPIs to identify areas for im- was formed in 2009 to encourage and support sustainability provement. Additionally, an assessment of FPIs for a fi shery management in crab-producing countries. They are support- management system will help answer many critical ques- ing local fi sheries associations to conduct stock assessment, tions, such as whether a fi shery is sustainable, whether the capacity building, and fi shermen training. In July 2011, their property rights are well defi ned, and whether the market milestone action was to approve a supply-driven minimum performance is acceptable. Table 2.3 lists more examples. size purchase policy targeting the phaseout of the use of un- dersized crabs in member company products and supporting science-based studies (NFI 2011). The latest initiative is to limit 2.2 CASE STUDY FISHERIES markets for berried female crabs and crab roe which went into This section will give a brief overview of the studied fi sher- effect on November 1, 2011 (Fishupdate 2011). This case ies: Blue Swimming Crab (BSC) (Portunus pelagicus) fi sher- study was done before the implementation of these policies, ies in Indonesia and the Philippines. The rapid development which provides a good baseline for the situation. In the future, of BSC fi sheries in these two countries is mainly driven by applying FPIs again can measure the impact of these policies. increasing demand in the international market, particularly in the United States. Swimming crabmeat was the second 2 largest (by volume) imported crabmeat to the United States, 2.2.1 Indonesian Blue Swimming Crab (BSC) Fishery after snow crab, contributing to 23 percent of total volume 2.2.1.1 Landings of crab imports in 2008 (25,652 MT) (NMFS 2010). The main The Indonesian BSCs (Portunus pelagicus), locally known BSC exporting countries are Indonesia (31 percent), China as rajungan, are distributed throughout the Indo-Pacifi c. The (24.7 percent), Thailand (13 percent), Vietnam (11 percent), landing levels have experienced an uptrend over the past and the Philippines (7.3 percent) (NMFS 2011).

The BSC ﬁ sheries in Indonesia and the Philippines are par- 2 This part is based on the report written by Dessy Anggraeni from ticularly interesting because these ﬁ sheries are a product of Sustainable Fisheries Partnership (SFP).

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 8 CHAPTER 2 — OVERVIEW OF FPIs AND STUDIED FISHERIES

FIGURE 2.1: Blue Swimming Crab Landings in Indonesia (1970–2008)

40,000

30,000

20,000 tons

10,000

0 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: FAO 2011.

40 years (fi gure 2.1). There was a signifi cant drop during Daily fi shermen: They start fi shing in the evening and the period of 2004 and 2005, but levels soon recovered af- land in the morning. They carry fuel for only one trip ter 2005. In 2008, Indonesia harvested over 34,000 tons of and use gillnet or collapsible traps. The operation area BSCs, contributing to 20 percent of global BSC production is nearby the coastline (onshore). and ranking as the second largest BSC-producing country Babangan fi shermen: They usually sail in groups of right after China (FAO 2011). three to fi ve for 2 to 7 days. They carry enough fuel and supplies to reach distant fi shing grounds. Crab BSCs in Indonesia generally live on sandy or on a combina- traps are commonly used. Cooking facilities and ice tion of sand and mud bottoms, sand fl ats bordering grassy are also available to boil and store BSCs on the boat. areas, and shallow brackish water to depths beyond 40 me- ters. They are fast growers. Female BSCs may reach sexual In addition, there are some 13,000 pickers working at hun- maturity at 98 mm while the males do at 87 mm (Sulistiono dreds of mini processing plants. Moreover, there are several et al. 2009). In terms of landing areas, North Java has been thousand other direct stakeholders involved as middlemen, the major catching area for BSCs in Indonesia, contributing operators of the miniplants where initial processing is carried to about 28 percent of total production in the period from out, and the fi nal processors/packagers who export the prod- 1990 to 2006, followed by East Sumatra (21 percent), South ucts. There are at least 28 crab processors and exporters Sulawesi (21 percent), and Malacca Strait (14 percent) operating in Indonesia. (fi gure 2.2). 2.2.1.3 Processing 2.2.1.2 Stakeholder Involvement in the Fishery Most BSCs caught are processed into frozen, canned, and In the BSC fi shery value chain, six stakeholder groups are pasteurized crabmeat in miniplants. In the past, miniplants involved, including fi shermen, collectors/middlemen (ba- (picking plants) normally got fi nancial support from the kul), miniplants/peelers, processors/exporters, distributors/ processor/exporter to run the business. All the facility and central market, and retail/supermarkets/seafood restaurants equipment were supplied by a specifi c processor/exporter. In (fi gure 2.3). return, these miniplants have to supply to these processor/ exporters. But, nowadays, most miniplants are independent, Crab fi shing in Indonesia is mostly carried out by small-scale and they can sell their crabs to any processors/exporters if operators. About 65,000 fi shermen directly relied on this fi sh- the prices permit. ery (SFP 2012). They use boats of less than 10 gross tonnes (GT) with or without motors (although in some cases fi sher- There are two main activities in the miniplant: cooking and men do not use boats). The gear is primarily bottom gillnets picking. The miniplants buy raw material from the fi sherman and collapsible traps, and to a lesser extent, the now illegal or middleman (bakul) by cash. Raw materials are sorted, shallow bottom trawls (baby trawls). There are two types of grouped, and weighted according to size. If the crabmeat fi shermen involved in BSC fi sheries across Indonesia: products are rejected due to quality failure (off-fl avors and

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs)

CHAPTER 2 — OVERVIEW OF FPIs AND STUDIED FISHERIES 9

NEW GUINEA GUINEA GUINEA NEW NEW NEW

° ° ° °

5 0 PAPUA PAPUA PAPUA 10 15 ° ° Jayapura 140 140 Merauke Puncak Jaya (5030 m) (5030 m) PAPUA 33 33 Biak ° ° Timika Timika SELECTED CITIES AND TOWNS PROVINCE CAPITALS CAPITAL NATIONAL RIVERS MAIN ROADS RAILROADS PROVINCE BOUNDARIES BOUNDARIES INTERNATIONAL Yapen 135 135 Is. Aru Arafura Sea INDONESIA Manokwari 2% Is. 32 32 Kai Tanimbar Is. Sorong Sorong ° Fakfak Fakfak PACIFIC OCEAN PACIFIC Waigeo 10 Misool ° 31 31 130 AUSTRALIA Amahai Amahai Babar Morotai Ceram Halmahera Obi Obi

Sea Moa any judgment on the

Banda status of any territory, status of any territory, Is. Ambon Talaud This map was produced by the Map Design Unit of The Bank. The boundaries, World and denominations colors, any other information shown on on this map do not imply, Bank the part of The World Group, legal or endorsement any or such of acceptance boundaries. Buru TIMOR-LESTE Wetar 30 30 Ternate ° ° Timor Sula Is. 125 125 24 24 Alor Kupang Peleng Muna Manado Baubau Gorontalo Kendari Sea 25 25 Celebes Ende 29 29 21% Flores PHILIPPINES Sumba 26 26 ° ° 18 18 Sea Sulu Palu 28 28 120 120 Raba Raba SULAWESI 2% 27 27 Waingapu Parepare Tarakan Samarinda Sumbawa Makassar Balikpapan Mamuju 1% 17 17 INDIAN OCEAN Mataram Mataram Lombok 23 23 ° ° 22 22 Bali Bali 16 16 16 ° ° 115 115 10 15 Denpasar

A 21 BRUNEI Surabaya Surabaya Madura 15 15 I Bandjarmasin KALIMANTAN Palangkaraya S Palangkaraya 28% 20 20

Java Sea ° 14 14 Semarang Semarang 110 13 Y 13 KALIMANTAN TIMUR KALIMANTAN UTARA SULAWESI GORONTALO TENGAH SULAWESI BARAT SULAWESI SELATAN SULAWESI TENGGARA SULAWESI MALUKU UTARA MALUKU BARAT PAPUA PAPUA 5% Belitung 23 24 26 27 28 29 30 31 32 33 25 1% Yogyakarta Bandung Bandung

A VIETNAM Pontianak 12 12 JAKARTA 9 9 19 Besar Natuna 11 11 Pangkalpinang

Bangka L JAWA ° ° 8 8 10 10 Lingga 21% 7 7 Palembang Palembang Tanjungpinang

105 105 Serang Serang A SINGAPORE Jambi Jambi Bandar Bandar Lampung Lampung

5 5 M JAWA BARAT JAWA TENGAH JAWA D.I. YOGYAKARTA TIMUR JAWA BALI NUSA TENGGARA BARAT NUSA TENGGARA TIMUR RIAU KEPULAUAN BARAT KALIMANTAN TENGAH KALIMANTAN SELATAN KALIMANTAN 6 6 3 3 Pekanbaru Pekanbaru 12 13 14 16 17 18 19 20 21 22 15 SUMATERA 4 4 Bengkulu Enggano ° ° INDONESIA . 400 Miles 100 I s 100 2 2

14%

Medan i Siberut

Padang a Major Blue Swimming Crab Catching Areas in Indonesia (1990–2006) w

a 300 THAILAND n t M e 400 Kilometers 200 Nias 1 1 Pematangsiantar Pematangsiantar MYANMAR MYANMAR 200 Statistics of Indonesia Capture Fisheries, Ministry Marine and Fisheries Affairs (various years). 100 ° ° 3% 95 95 NANGGROE ACEH DARUSSALAM UTARA SUMATERA RIAU BARAT SUMATERA JAMBI BENGKULU SELATAN SUMATERA LAMPUNG BANGKA-BELITUNG BANTEN D.K.I. JAKARTA ° ° Simeulue Banda Aceh ° ° ° 0 0 PROVINCES: 1 2 3 4 6 7 8 9 5 10 5 0 5 15 10 11 FIGURE 2.2: Source:

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 FIGURE 2.3: Value Chain and Stakeholders Involved in BSC Fisheries in Indonesia

Retail Food Service (Supermarkets) (Seafood Restaurant)

Retail Price: Special crabmeat (16 oz): $ 14.99 per lb

Broadline Specialty Seafood Central Markets Distributors Distributor

FOB Price: Importers/Wholesalers Jumbo lump: $ 16.75 – 17.00 per lb Backfin: $ 11.00 – 11.25 per lb Super lump: $ 13.25 – 13.75 per lb Special lump: $ 9.75 – 10.25 per lb Claw meat: $ 6.75 – 6.95 per lb (Source: Urner Barry Seafood Price, 4 Dec 2008)

Processors/Exporters Miniplants sell peeled crab to processor/exporter. The average price depends on the meat size and the season: Colosal: $ 24.5 per kilo Local Market (for Jumbo lump: $ 23.5 per kilo crab rejected by Backfin: $ 14 per kilo processor) Flower lump: $ 13 per kilo Super lump: $ 12 per kilo Special lump: $ 8 per kilo Claw meat: $ 6 per kilo (Source: major processors/exporters– Miniplants 2008 price) (Peeler)

Collector usually take $ 0.2 – 0.4 per kilo margin profit upon raw material; or $ 0.4 – 0.8 for boiled crab. Collector (Bakul) This collector may or may not be lender/tengkulak to the fishermen.

Fishermen sell crab to collector for $ 0.9 – 1.4 per kilo

Fishermen Note: - Exchange Rate: 1 USD = Rp 11,000 (as rate per 20 Jan 2009) - 1 kilogram = 2.204 lb, lbs Source: Anggraeni 2011. CHAPTER 2 — OVERVIEW OF FPIs AND STUDIED FISHERIES 11

off-textures), miniplants will sell them to the local market. A Marine Stewardship Council (MSC) preassessment of The worst quality product will be sold to shrimp paste (terasi) Indonesia BSC fi shery was conducted in 2009 and highlight- manufacturing. ed the lack of reliable scientifi c data on stock status and the absence of any fi shery management as signifi cant issues. 2.2.1.4 Market Currently, a work plan has been developed and implemented The BSC is not in high demand in Indonesia. Almost 95 per- in order to address the defi ciencies identifi ed by the MSC cent of the BSCs caught in Indonesia are exported. The export preassessment report and improve the fi shery management of BSCs started in 1994 due to increased demand from over- to meet MSC standards. Some management options have seas. Before this, BSCs were only consumed locally and the been proposed by stakeholders, such as the adoption of an price was very low. Currently, crab products have been the incremental minimum legal size; a ban on the take of ber- third largest export fi shery product by value, following shrimp ried (egg bearing) females; changes in fi shing gear (such (46 percent) and tuna (14 percent). In 2007, BSCs contrib- as escape gaps in crab pots); a hatchery project; efforts to uted to about 8 percent of total Indonesian fi shery products protect nursery and spawning grounds; time/area closures; export, valued at US$179 million, up 33 percent from 2006. a registration system for all purchasers of crabs, both live Total crab exports amounted to 21,510 tons in 2007, consist- and processed (to improve data collection); and fi shing effort ing of nonfrozen crab (82 percent), canned crab (11 percent), controls (including specifying legal gear types and minimizing and frozen crab (7 percent) (MMAF and JICA 2009). net length and the number of pots).

More than half of the BSC products are exported to the United States, followed by Singapore (17 percent), Malaysia 2.2.2 The Philippines Blue Swimming Crab (BSC) 3 (10 percent), Taiwan (7 percent), European Union (6 percent), Fishery3 4 China (5 percent), and Japan (2 percent). In 2008, the total 2.2.2.1 Landings U.S. crab import from Indonesia was 9,372 tonnes, a de- The Philippines BSC (Portunus pelagicus) is called kasag crease of 15 percent from 2007. However, the average price (Hiligaynon), alimasag (Tagalog), lambay (Bisaya), kagang has increased by 21 percent from US$14.5 per kilo in 2007 to sukay (Tausog), and kappi (Ilokano) in different languages. It US$17.5 per kilo in 2008, leading to a 6 percent increase by is traditional seafood in the country, but was not a targeted value (NMFS 2011). More than 85 percent of crab imported species. It used to be a preferred by-catch of fi nfi sh fi shery to the United States from Indonesia was in ATCs (airtight and some fi shing gears such as fi sh corrals. BSC fi shery has containers) or canned, while another 10 percent was frozen become an important fi shery since the increase in demand of and another 5 percent was in other preparations. pasteurized BSC meat from the United States. The trend of the total landings of BSCs in the Philippines shows two ma- 2.2.1.5 Overfi shing jor eras (fi gure 2.4). Before the early 1990s, the major market Currently, there are no direct controls on the harvest of BSCs was mostly domestic. From the mid-1990s to the present, in Indonesia. Fishers can catch any size of crab and sell it to the industry became more export oriented. In the past the picking plants. The utilization level of BSC has probably 10 years, average production has been around 34,000 tons. met or even exceeded the Maximum Sustainable Yield level. BSCs’ distribution is within the coastal areas on sandy sub- Some catch reports in recent years indicate that the aver- strates and on strictly marine environment. Juvenile BSCs age size of landed BSCs is becoming smaller. Preliminary are usually found on the intertidal and subtidal areas where assessment by a stock modeling expert suggests that the they land for shelter and foraging, particularly on seagrass, resources have been fi shed down to some extent, but there seaweed, and algal beds and mangrove areas. There were is insuffi cient data to proceed much further toward any form at least two biological stocks of BSCs in the Philippines: one of quantitative stock assessment (SFP 2010). in the Visayan Sea and surrounding inland waters (i.e., Bohol 2.2.1.6 Measures Taken Toward Sustainability Sea) and one in Tawi-tawi waters (Romero 2009). The major fi shing grounds of BSCs in the Philippines are the inland wa- In 2007, an Association of Indonesian BSC Processors ters of Central Philippines, which are almost interconnected (Asosiasi Pengelolaan Rajungan Indonesia, APRI) was formed, with the Visayan Sea, including San Miguel Bay facing the with the goal of sustainable procurement from healthy stocks. APRI currently consists of 11 leading crab processing and exporting companies in Indonesia, representing over 3 This part is based on the report written by Jimely Flores from 90 percent of crab exported from Indonesia to the U.S. market. Sustainable Fisheries Partnership (SFP).

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 12 CHAPTER 2 — OVERVIEW OF FPIs AND STUDIED FISHERIES

FIGURE 2.4: Landings of BSCs in the Philippines

45,000

36,000

27,000

tons 18,000

9,000

0 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: FAO 2011.

Paciﬁ c Ocean, Malampaya Sound facing South China, and and the effort needed (based on the existing catch and effort the Tawi-tawi group of islands (Ingles 2004). Some small- data from 1990 to 1993) was about 13,150 gillnet panels. In scale crabbing areas include Lingayen Gulf, Manila Bay, and 2000, the effort in the western Visayas alone was already Honda Bay. The major crabbing areas comprise 87.7 percent 60,047 gillnet panels, 4.5 times more than the effort sug- of the total BSC landings in 2007. gested to reach MSY level (Ingles and Flores 2000).

2.2.2.2 Fishing Efforts Growth Overfi shing: Catch of juveniles is a concern for sustain- The traditional methods of collecting BSCs include simple able development of BSC fi shery. Gillnet has higher probability picking and diving, bintol (crab liftnet), fi sh corrals, and to catch immature BSC than the bamboo trap/pot (table 2.4). bamboo pots/traps (Ingles 1996; Ingles 2004). At present One hundred percent of the catch of the pushnet, which oper- the industry is using gillnet as major fi shing gear, and some ate in the seagrass areas were juveniles (Ingles and Flores are using traps/pots. It is also a retained by-catch species of 2000). Without any management intervention for this kind of trawls and Danish seines. practice, the overexploitation will likely become more serious.

BSC fi sheries in the Philippines are mostly artisanal. Crabbers High by-catch: By-catch is also a great concern, particularly use either motorized or nonmotorized boats, which are usu- for those using the gillnets. In the Northern Guimaras Strait, ally below 3 GT with lengths ranging from 10 to 50 feet. over half of the total catch of gillnet was by-catch, compris- Motorized fi shing boats could be powered by 4 to 16 HP, ing 19 species of crabs (7 were retained and the remaining while the big ones (lengths of 20 to 50 feet) may use the 12 species were discarded). Only about 40 percent of the converted engines of land vehicles referred to by the fi shers catch is BSC. A variety of mollusks, sponges, and even some as 4DR (Isuzu) or 3R (Kubota). corals were not accounted for because they were removed upon hauling of the net. Ingles (2003) also identifi ed the There are no updated data on the number of fi shers, fi sh- entanglment in gillnets used in BSC fi sheries as one of the ing gear, and fi shing boats involved in the BSC industry for causes of death for the Irrawady dolphins, Orchaella briviro- the whole country. A study conducted in 2002 to 2004 in stris, an endangered species in Malampaya Sound, Taytay, the Visayan Sea counted at least 2,522 fi shing boats from and Palawan. Flores (2005) indicated that the BSC gillnet 17 landing sites using either gillnet, bamboo pots, or PVC fi sheries are also catching a signifi cant volume of juvenile traps (Romero 2009). There were about 1,814 full-time fi sh- sharks (retained species) and other stingrays. ers and 708 part-time fi shers from those sites. 2.2.2.4 Value Chain 2.2.2.3 Issues of the Fisheries The value chain for the Philippines BSC fi shery is demonstrat- Overcapacity: Overcapacity in the BSC fi shery started when ed in fi gure 2.5. The fi shers are using either gillnets (about the export of pasteurized meat was intensifi ed. In the Visayan 60 percent of the total production), traps/pots (about Sea, Ingles (1996) estimated that the MSY level was 1,383 tons 30 percent share), or other fi shing gear (10 percent) to catch

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 2 — OVERVIEW OF FPIs AND STUDIED FISHERIES 13

TABLE 2.4: Immature BSC Catch Rate for Different Gears

FISHING GEAR MALE CAUGHT IMMATURE FEMALE CAUGHT IMMATURE Pushnet 100% 100% Gillnet 27.5% 34.2% Bamboo trap/pot 12.2% 26.5% Source: Ingles and Flores 2000.

FIGURE 2.5: Supply Chain in the Philippines’ Blue Swimming Crab Industry

Philippines’ BSC supply chain

Retailers Consumers Consumers (abroad) (Phil) Exporters/importers

Exporter’s mini-processing plant Other traders

Picking plants

Crab local traders

Small-scale pickers Bait

EN T/P Others ~60%~30% ~10% Source: Flores 2011.

BSCs. The fi shers sell their crabs to the local traders, who $22/kg) for the jumbo and US$4 to 6/lb($8.8 to $13.2/kg) for sometimes are also the fi nanciers. The crab traders will sell the lower classes of meat (like special). The pasteurized meat their crabs to the picking plants with a margin of 20 to 30 pe- of the BSCs ranked as the fourth top export in 2007, amount- sos/kg (US$0.5 to 0.7/kg) of live whole crab. In some cases ing to about US$41 million export revenue. In addition to the when the local trader delivers exclusively to one picking plant, United States, the Philippines also exports crabmeat to Hong traders will also cook the crabs by using the facilities provided Kong, Singapore, and other Asian countries (BFAR 2008). by the picking plant. Cooked crabs have an additional margin 4 2.2.2.5 Management Framework of PhP20 to 40/kg (US$0.5 to 0.9/kg).4 5 Picking plants are set up and maintained by the exporters/processors. A price for picked The main legal framework with jurisdiction to the fi sheries re- crabmeat ranges from PhP600 to 700/kg (US$13.7 to 16/kg). sources of the Philippines is the Republic Act 8550 (Philippine The picked crabmeat is then delivered to the main processing Fisheries Code). Under this law, the BSC fi shery is classifi ed plants for further quality control, packaging, and pasteuriza- under the municipal fi sheries sector and is allowed to fi sh tion. There are very few players in the BSC export market. within the 15 km (radius from the shoreline) municipal waters Six exporting companies dominate the exports. The products of the country. This means that the use and management of are transported to the fi nal country of destination in a chilled this type of fi shery is under the jurisdiction of the local gov- container with strictly controlled temperature. The wholesale ernment units (municipalities and provinces) as mandated by prices in the United States are about US$8 to 10/lb ($17.6 to Republic Act 7160 (The Local Government Code). Further, Executive Order 305 (by the president of the Philippines) de- volves the registration of fi shing vessels 3 GT and less to the 4 1 US$ = 43.7 PhP (http://themoneyconverter.com/usd/php.aspx). responsibility of the municipal and city governments.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 14 CHAPTER 2 — OVERVIEW OF FPIs AND STUDIED FISHERIES

The Bureau of Fisheries and Aquatic Resources (BFAR) There are also local government units. The Province of is mandated to manage the fisheries sector. At present, Negros Occidental in 2003 enacted a law prohibiting the the BFAR initiated the creation of a BSC Management catching and trading of berried crabs and crabs less than Plan wherein some regulatory measure would be imple- 11 cm in carapace width. The municipalities in Northern Iloilo mented to ensure the sustainability of resources such as (NIACDEV) prohibit the catching and trading of berried crabs a creating a minimum legal size of 10.16 cm; putting a and crablets; in 2012, this law was amended and crablets cap on the fishing effort by limiting the number and size was changed to 11 cm as minimum carapace width limit. (or number) of fishing gear; closing and opening fishing The municipalities of Guiuan, Eastern Samar, and Talibon, seasons and areas; and protecting the nursery sites of Bohol, enacted regulations banning the catching and trading juvenile crabs. of crabs less than 4 inches in size.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS 15

Chapter 3: FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS

FPIs are applied to BSC fi sheries in Indonesia and the The Indonesian BSC fi shery has lower nonlanding mortal- Philippines. FPIs have set up 3.5 as a benchmark, meaning ity but a higher percentage of overfi shing compared to the any fi shery that has an indicator scored under 3.5 will have Philippines BSC fi shery. substantial room for improvement. It is useful to understand how a well-managed fi shery will perform and how far these In summary, with regard to Ecological Sustainability, the two studied fi sheries are away from a currently well-managed Icelandic lobster fi shery performed well (4.8), indicating it is fi shery. Therefore, the Icelandic lobster fi shery is selected ecologically sustainable (fi gure 3.2). In contrast, ecological as another benchmark because it is also an export-oriented sustainability is a big concern for both Indonesian (1.8) and fi shery and has been recognized as a well-managed fi shery the Philippines BSC (1.3) fi sheries. If the fi shery resources after adopting the Individual Transferable Quota (ITQ) system are not physically healthy, it will undermine the potential for in 1984 (Arnason 2002). wealth creation for the local communities in the long run. According to the FPIs, the Indonesia BSC fi shery needs to The FPI output indicators include three components, reduce overfi shing, and the Philippines BSC fi shery needs Ecological Sustainability, Harvest Sector Performance, to reduce both overfi shing, high retained by-catch species, and Post-Harvest Sector Performance (Anderson and and nonlanding mortality of other species (high nonretained Anderson 2010). This chapter will describe detailed results by-catch species) to improve ecological sustainability. for each of these components. 3.1.1.1 Comments

3.1 ECOLOGICAL SUSTAINABILITY Proportion of Harvest with a Third-Party Certifi cation: Different countries can choose different certifi cations The fi rst component is Ecological Sustainability, measuring as long as they are well-recognized third-party certifi ca- the fi sh stock health and its harvest status in order to under- tions. With an increasing demand for certifi ed seafood, stand whether the physical fi shery resource is in good shape this indicator should be easy to score and well repre- and has the ability to create sustainable wealth. It is the aver- sent the situation of the ecological sustainability for age of four indicators, including Proportion of Harvest with developed countries. However, because it is relatively a Third-Party Certifi cation, Fish Stock Sustainability Index expensive to obtain one certifi cation for developing (NMFS), Percentage of Stocks Overfi shed, and Nonlandings countries, it is expected the score will be very low or Mortality. The scoring scale and additional information for unattainable for many fi sheries, particularly for artisanal each indicator are shown in table 3.1. A more detailed expla- small-scale fi sheries in developing countries. nation is found in Appendix A. Fish Stock Sustainability Index: This indicator measures if there are any measurements or efforts to 3.1.1 Fish Stock Health correct overfi shing and if the overfi shing situation As shown in fi gure 3.1, Icelandic lobster obtained full scores is improving. It is suggested that the defi nition be for three out of the four indicators of ecological sustainability. revised without referring to NMFS. This indicator can For Indonesian and Philippine BSC fi sheries, three out of four be changed to “Overfi shing and Rebuilding,” with a scored in the range indicating a need for urgent improve- new defi nition of “Extent to which current effort af- ment. Neither of these two fi sheries obtained third-party fects stock status. For multistock fi sheries, score each certifi cation or have a fi sh stock sustainability index because signifi cant stock 1 to 5, then take a value-weighted there is no effective management in place and lack of data. average” (see Appendix B1).

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 16 CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS

TABLE 3.1: Score System for Indicators of Ecological Sustainability

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Proportion of Harvest with a 5: 76–100% of landings are certifi ed The proportion of harvest (quantity) harvested under one Third-Party Certifi cation 4: 51–75% of landings are certifi ed of the recognized third-party programs that certify eco- 3: 26–50% of landings are certifi ed logical sustainability, such as the Marine Stewardship Council (MSC) certifi cation. 2: 1–25% of landings are certifi ed 1: No landings have third-party certifi cation Fish Stock Sustainability Index For each of four components, each stock receives: one point if the status of The Fish Stock Sustainability Index. The FSSI is calcu- (NMFS) the stock is overfi shed or subject to overfi shing; two points if management lated by assigning a total score between 0 and 4 to each measures are succeeding at preventing overfi shing; three points if the priority fi sh stock. Note: The number of priority stocks stock biomass is above the level defi ned as overfi shed for the stock; and will differ between management systems (The Fish four points if the stock is rebuilt or is at its “optimal” level, within 80% of Stock Sustainability Index, 2009). that required to achieve maximum sustainable yield. The FSSI is computed by summing the scores of the individual stocks. Points by quintile are relative to the maximum possible score; with 5 points for the highest quintile. Percentage of Stocks 5: None overfi shed Percentage of commercial stocks within the manage- Overfi shed 4: 1–25% of stocks overfi shed ment authority’s preview that are considered overfi shed, 3: 26–50% overfi shed to be experiencing overfi shing, or in generally unknown stock status (whether actively managed or not). 2: 51–75% overfi shed 1: 76–100% overfi shed Nonlandings Mortality 5: Virtually none Ratio of estimated mortality of the assessed target 4: Less than 5% species from illegal harvest, by-catch, illegal discards, 3: 5–10% regulatory (legal) discards, and other nonlandings waste to actual landings. 2: 10–20% 1: More than 20% Source: Anderson and Anderson 2010.

FIGURE 3.1: Fish Stock Health and Environmental FIGURE 3.2: Ecologically Sustainable Fisheries Performance 4.8 5.0 Proportion of harvest with a 3rd 4.0 party certification 5 3.0 4 1.8 3 2.0 2 1.3 1 Fish stock Non-landings 1.0 0 sustainability mortality index (NMFS) 0.0 Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. Percentage of stocks overfished Indonesia BSC Philippines BSC Icelandic lobster of FPIs is to be able to conduct a rapid assessment Source: Authors. for data-poor countries. Experts’ good estimation and judgment of the situation is enough. For example, if the average catch size and volume or catch per unit effort (CPUE) is declining with years, it is reasonable Percentage of Stocks Overfi shed: This states the to judge that the stock is overfi shed without formal situation of whether the studied fi shery is overfi shed. stock assessment data. Experts from Indonesia and the Philippines felt it was Nonlandings Mortality: Similar to overfi shing, this diffi cult to score because there was no biological will rely on experts’ experience or studies for those reference point. This issue will occur whenever the fi sheries lacking data and management in place. expert wants to rely on precise data to score. The goal Additionally, there are two types of mortality. One is

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS 17

induced by regulatory requirements to discard landed FIGURE 3.3: Harvest Performance fi sh. One is induced by the selection of gears, fi shing Landings level methods, and so forth. In order to distinguish these 5 two, it is suggested to change this one indicator to 4 two indicators, Regulatory Mortality and Selectivity. 3 See Appendix B1 for the score systems. 2 1 There are also no indicators to show whether the criti- 0 cal habitat is protected or if there are MPAs existing and functioning, because these will affect the recruit- Season length Excess capacity ment of fi sheries. It is suggested to add Status of Critical Habitat to capture the habitat’s situation (see Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. Appendix B1 for the suggested score system).

3.2 HARVEST SECTOR PERFORMANCE 3.2.1 Harvest Performance The score of the Harvest Performance is an average of The second component is Harvest Sector Performance. It Season Length, Excess Capacity, and Landing Level. The includes fi ve dimensions, the Harvest Performance, Asset score system for each indicator is shown in table 3.2. Performance, Risk, Boat Owner/Manager Performance, and Crew Performance. Harvest Performance captures es- Icelandic lobster fi shery achieved full scores for all the indica- sential aspects of effi ciency in harvesting and thus the abil- tors (0.0.5) (fi gure 3.3). Regarding the Landings Level, Icelandic ity to generate sustainable wealth from the landings. Asset lobster harvest is less than MSY (Maximum Sustainable Yield) Performance characterizes how well harvest capital owners to increase profi t. Indonesia BSC’s harvest is constraining are able to invest in the fi shery and how much future wealth stock recovery, and Philippines BSC’s harvest is overfi shed. is capitalized into the value of their rights and equipment. The Risk dimension refl ects sources of risk in the fi sheries Regarding the Excess Capacity, Icelandic lobster scored 5 that may inhibit investment or prevent the development of because the harvesting effort is managed by the process- high-value supply chains. The indicators on Owners, Permit ing manager according to the needs of fi nal customers. Holders, and Captains and Crew capture the social dimen- Therefore, the excess capacity issue is not substantive. Both sion of wealth distribution. Who benefi ts from the fi shery? Indonesia and the Philippines BSC fi sheries have an overca- What are the relative income levels and social standing? pacity issue in general—there are too many fi shing boats. Each dimension is an averaged result of a few indicators The number of boats needed is much less than what are cur- which will be explained as follows. rently operating. However, the overcapacity issue can vary

TABLE 3.2: Score System for Indicators of Harvest Performance

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Landings Level 5: Harvest is less than MSY (stock is above MSY level) to increase profi t Average annual harvest over the last 3 years. Note: 4: Harvest is approximately at MSY in practice there are very few estimates of MEY, 3: Harvest reduced to promote recovery (stock is below MEY level) however where it has been calculated it is typically 5 to 10 percent less than maximum sustainable yield 2: Harvest is constraining stock recovery (stock is stable below MEY level) (MSY). 1: Harvest is causing overfi shing (stock is below MEY and declining) Excess Capacity 5: Within 5% of days required Estimated standardized vessels-days required to 4: 105–120 or 90–95% catch the maximum economic yield (MEY) compared 3: 120–150% or 75–90% to the number of standardized vessel-days available. Days are considered not to be restricted by trip limits. 2: 150–200% or 50–75% 1: More than 200%, or less than 50%, of days required Season Length 5: Virtually no regulatory closures Ratio of number of days on which fi shing occurs 4: 91–99% to the number of days the species is available in 3: 51–90% economically feasible quantities. 2: 11–50% 1: Less than 10% Source: Anderson and Anderson 2010.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 18 CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS

FIGURE 3.4: Summary of Harvest Performance and relevant studies. Usually it is calculated as 5 to 10 percent less than maximum sustainable yield (MSY). 6.0 5.0 It is noticed that the Catch per Unit of Effort (CPUE) 5.0 is not used here. It might be because it is diffi cult 4.0 to compare across boat types, across fi sheries, and 2.7 3.0 across countries. It is not easy to quantify what effort 1.7 really means for each fi shery. It can be per pot, per 2.0 day, per person, per boat, or per mile. Unless a fi shery 1.0 and effort are clearly defi ned, it won’t be comparable 0.0 between fi sheries. Therefore, even though it is a com- Indonesia BSC Philippines BSC Icelandic lobster monly used term, the authors support the idea of not Source: Authors. using CPUE in the FPIs system.

among regions. For example, in Indonesia, the excess capac- 3.2.2 Harvest Asset Performance ity issue is much more serious in North Java Sea compared The Asset Performance dimension consists of six indicators, to East Sumatra. ranging from Source of Capital to Borrowing Rate. Table 3.3 gives a detailed score system for each indicator in this Regarding the Season Length, both the Icelandic lobster dimension. fi shery and the Philippines BSC fi shery have no constraints on fi shing. This does not mean they will go fi shing all the Icelandic lobster received high scores in all the categories time. Usually, they go when the weather is good. During low except Asset Value versus Historic High (fi gure 3.5) because season, some fi shermen will shift to other commodities or recent political unrest has downgraded the quota transfer activities. value. The asset value in Indonesia and the Philippines refl ects only the value of the boats and gear because there is In summary, the Icelandic lobster fi shery performed well no quota or permit system in these two fi sheries. There is no in the harvest sector. The Indonesia BSC fi shery and the substantial difference between the boat value now and the Philippines BSC fi shery received an average of 1.7 and 2.7, past 10 years for BSC fi sheries. respectively, lower than the benchmark 3.5 (fi gure 3.4). They have an overcapacity issue, and the harvest level is con- Icelandic lobster achieved the highest revenue in 2009. straining the stock recovery or causing overfi shing. There is The BSC prices dropped in 2009 compared to the historic substantial improvement space in the harvest performance. high, leading to a satisfactory score for the Icelandic lobster fi shery (5) on Total Revenue versus Historic High. Both 3.2.1.1 Comments Indonesia (3) and the Philippines (2) BSC fi sheries are below The scale for the Season Length indicator is confus- benchmark 3.5. ing. The defi nition now is the “ratio of number of days The capital is relatively well maintained among these fi sh- on which fi shing occurs to the number of days the eries. In Indonesia, boats last for about 10 years. Trap can species is available in economically feasible quanti- be used for approximately 1 year, and the gillnet has to be ties.” This is primarily a measure of the extent of replaced at least once a month. In the Philippines, boats derby (including short regulatory seasons to limit total are constructed with materials that are easily available and effort), not lack of biological availability or closures to replaced. Therefore, the scores for Functionality of Harvest prevent within-season growth overfi shing. It does not Capital are satisfactory. count when it is bad weather or when the boat is under repair/maintenance. There is also a natural peak or Indonesia and the Philippines BSC fi sheries received the low season for certain fi sheries during different times same scores for Source of Capital (2) and Borrowing Rate of the year. For countries where there is no derby and Relative to Risk-Free Rate (5), but the situations are different. fi shermen can fi sh anytime they can, score 5 for this In Indonesia, there is a vertical integration. The miniplants indicator. (picking plant) invest or loan to the collectors (bakul) through MSY, especially MEY (Maximum Economic Yield), data formal or well-recognized oral purchasing contracts. The are not always available. This requires the expert to miniplant will allow a collector to get a certain margin. If, judge the situation according to his or her experience somehow, both fi shermen and collectors break the supply

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS 19

TABLE 3.3: Score System for Indicators of Asset Performance

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Ratio of Asset Value to Gross 5: 10 or higher Ratio of average price of access to the fi shery over the last Earnings 4: 7.5–10 5 years to the average annual landings value for a similarly 3: 5–7.5 scaled access right in the same period. Same business or same family sales are excluded, where they can be identifi ed. 2: 2.5–5 1: Below 2.5 Total Revenue versus Historic 5: Above 95% The indicator is the ratio of total revenue to the average of High 4: 86–95% the three highest total revenues in the past 10 years. 3: 71–85% 2: 50–70% 1: Below 50% Asset (Permit, Quota) Value 5: Above 95% The indicator is the ratio of asset to the average of the three versus Historic High 4: 86–95% highest asset values in the past 10 years. 3: 71–85% 2: 50–70% 1: Below 50% Borrowing Rate Relative to 5: Less than 1.75; cf. 30-year conforming mortgage Average ratio between the interest rate on loans made in the Risk-Free Rate 4: Less than 2.5; cf. personal bank loan industry to risk-free rates over the last 3 years. 3: Less than 4; cf. good credit card rates 2: Less than 7; cf. bad credit card rates 1: Greater than 7; usury Source of Capital 5: Unsecured business loans from banks/venture capital Points to be assigned based on the category of lenders or 4: Secured business loans from banks/public stock offering investors that is most typically used in the fi shery. 3: Loans from banks secured by personal (not business) assets/ government-subsidized private lending/government-run loan programs/international aid agencies 2: Microlending/family/community-based lending 1: Mafi a/no capital available Functionality of Harvest 5: Capital is new Average age of the key durable harvesting capital unit Capital 4: Capital is older but well maintained (e.g., freshly painted) (vessels, weirs). 3: Capital is moderately well maintained 2: Maintenance is poor 1: Serious concerns about seaworthiness or safety throughout fi shery Source: Anderson and Anderson 2010.

FIGURE 3.5: Asset Performance

Ratio of asset value to gross earnings 5 contract by selling their products to other competitors, the miniplant, as the biggest capital owner, will terminate all con- 4 Total revenue Functionality 3 versus tracts with those fi shermen and collectors. The fi shermen’s of harvest historic high capital 2 boats or other assets of collectors may be taken away. In 1 the Philippines, most small-scale fi shers use their savings or 0 loans from family or close friends to invest, rarely from the Asset bank. (permit, quota) value Source of versus historic high capital In summary, the Icelandic lobster fi shery achieved an average of 4.2 in the Harvest Asset Performance (fi gure 3.6). The Borrowing rate lower asset value versus Historic High dragged the average relative to risk-free score down. Both Indonesia and the Philippines BSC fi sher- rate ies received an average of 3.2, indicating a substantial im-

Indonesia BSC Philippines BSC Icelandic lobster provement need, particularly on better availability of ﬁ nancial Source: Authors. system, asset value, and functionality of asset.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 20 CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS

FIGURE 3.6: Summary of Asset Performance The Indonesia BSC fi shery did not have signifi cant spatial price difference compared to the Philippines fi shery, but it had more 5.0 4.2 Landings and Price Volatility between years and months. This 4.0 may be because (1) there are some “peak seasons” and “low 3.2 3.2 seasons” in crab fi shing in Indonesia that create monthly price 3.0 differences. Usually the price will be higher during the low

2.0 season and lower during the peak season. (2) The Indonesian expert used U.S. import data to calculate this group of indica- 1.0 tors, and the Philippine expert used ex-vessel data.

0.0 In summary, all three fi sheries are facing relative manageable Indonesia BSC Philippines BSC Icelandic lobster risks with an average score higher than 3.5 (fi gure 3.8). The Source: Authors. Indonesia BSC fi shery is facing more potential economic risk; therefore, more attention needs to be paid to annual landing and price volatility. 3.2.2.1 Comments Borrowing Rate Relative to Risk-Free Rate: If the mon- 3.2.3.1 Comments ey is borrowed from family or friends, the rate should Risk Exposure indicators are clearly identifi ed and be the interest rate of savings as opportunity cost if quantitative. There might be a data availability issue putting money to the bank is a common practice. Or in some developing countries in price data collection, else, the interest rate can be zero. However, there especially on monthly data and regional price data. might be some in-kind payback, which is not refl ected This will help identify data gap and encourage setting in the score system or explanation. Additionally, for up economic data collection. developing countries, a risk-free rate can be hard to defi ne. It is suggested to add “family or friend’s sup- 3.2.4 Boat Owners/Captain port” to 5 and “in-kind payback” to 4 (Appendix B). The earning and status of Boat Owners/Captains refl ect Source of Capital: It is suggested that “contract rela- whether a fi shery is profi table, equitable, and sustainable. tionship between the processors and producers” be This group of indicators is meant to capture not only the eco- added into score 2. nomic well-being, but also the social stability level, including the relative income level, Education and Health Care Access, 3.2.3 Risk Exposure Social Standing, and Proportion of Nonresidents (table 3.5). The fi shery industry is a high-risk industry. Risk exposure uses a series of indicators to summarize the potential expo- The Indonesia BSC fi shery performed well with three indi- sure of the fi shing industry to various economic and social cators achieving higher scores (fi gure 3.9). The earnings of risks (table 3.4), including price volatility, revenue volatility, Indonesia BSC boat owners, who are often miniplant owners and legal challenges. or people with fi nancial ability, were eight times more compared to the national average. The captain’s average wage The Icelandic lobster fi shery has very limited risks in terms of is nearly twice that of average nonfi shery wages. This leads harvest revenue, landings, and price volatility (fi gure 3.7). It is to their relatively high social standings. In contrast, the rela- a well-managed, demand-driven fi shery. There is no obvious tive situation of boat owners and captain for Icelandic lobster difference between months, years, and areas due to confi shery and the Philippines BSC fi shery is not as good as sistent supply and demand of lobster. The Icelandic lobster those in Indonesia. fi shery only has some political risk, leading to a lower score on Contestability and Legal Challenges. Both Indonesia and the Philippines BSC fi sheries did not receive high scores in terms of Access to Health Care. In The Philippines BSC fi shery has relative low risks in terms Indonesia, there are some government-owned small health of Landings and Price Volatilities between years and months care facilities (Puskesmas) in each subdistrict (kecamatan) based on FPIs scores (fi gure 3.7). However, the Spatial Price that provide health service to local people. In the Philippines, Volatility, Legal Volatility, and Annual Revenue Volatility are medical treatment is seldom accessible and relies more on concerns. Legal volatility comes from low enforcement of self-meditation by buying basic drugs from some community most regulations. stores. Access to Education is satisfactory for all of them.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS 21

TABLE 3.4: Score System for Indicators of Risk Exposure

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Annual Total Revenue 5: 0.14 or less Ratio of the standard deviation of the fi rst differences of Volatility 4: 0.15–0.21 annual total revenue to the mean total revenue over the 3: 0.22–0.39 last 10 years. 2: 0.40–0.99 1: 1 or greater Annual Landings Volatility 5: 0.14 or less Ratio of the standard deviation of the fi rst differences of 4: 0.15–0.21 annual total landings sold to the mean landings over the 3: 0.22–0.39 last 10 years. 2: 0.40–0.99 1: 1 or greater Intra-Annual Landings 5: 0.14 or less Ratio of the standard deviation of the weekly/monthly Volatility 4: 0.15–0.21 total sold landings over the last 3 years to the mean 3: 0.22–0.39 landings. Observations of zero landings are included if there is biological availability. If the biological season 2: 0.40–0.99 is so short that there is no meaningful variation at a 1: 1 or greater monthly level, this measure can be NA. Annual Price Volatility 5: 0.12 or less Ratio of the standard deviation of the fi rst differences 4: 0.13–0.19 of annual ex-vessel price to the mean price over the last 3: 0.20–0.30 10 years. 2: 0.31–0.84 1: 0.85 or greater Intra-Annual Price Volatility 5: 0.12 or less Ratio of the standard deviation of average monthly 4: 0.13–0.19 ex-vessel price over the last 3 years to the mean. 3: 0.20–0.30 Observations of zero landings are included if there is biological availability. If the biological season is so short 2: 0.31–0.84 that there is no meaningful variation at a monthly level, 1: 0.85 or greater this measure can be NA. Spatial Price Volatility 5: 0.12 or less Ratio of the standard deviation across data collection 4: 0.13–0.19 regions of average annual ex-vessel price to the mean. 3: 0.20–0.30 Measure should be averaged over the last 3 years. 2: 0.31–0.84 1: 0.85 or greater Contestability and Legal 5: No signifi cant legal challenges, civil actions, or protests Challenges regarding the fi shery management system 4: Minor legal challenges slow implementation 3: Legal challenges, civil actions, or protests impede some management measures 2: Legal challenges, civil actions, or protests suspend major elements of the management system 1: Legal challenges, civil actions, or protests suspend or prohibit implementation of key management reforms and regulation certifi cation Source: Anderson and Anderson 2010.

Boat owners in the Philippines and Indonesia can have ac- 3.2.4.1 Comments cess to good education. The annual earnings and wages are sensitive data. For In summary, Indonesia BSC fi shery and Icelandic lobster fi sh- some developing countries, it is not easy to obtain the ery boat owners/captains are doing better than the benchmark data. (fi gure 3.10). They are relatively wealthy, ranked with high Currently, there are two wage comparison indicators, social standing, and receive good health care and education. one to national average and one to nonfi shery. It is The Philippines BSC fi shery boat owners/captain achieved suggested to use Earnings Compared to Regional an average score of 2.8, lower than the benchmark 3.5. Average to replace the original two indicators as it They need to improve their access to the health care system is more relevant to compare to the regional average and income in general. instead of the national average (see Appendix B).

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 22 CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS

FIGURE 3.7: Risk Exposure FIGURE 3.8: Summary of Risks

Annual total 4.9 5.0 revenue 4.3 volatility 3.7 5 4.0 Contestability 4 Annual & legal landings 3 3.0 challenges volatility 2 2.0 1 0 Intra-annual 1.0 Spatial price landings volatility volatility 0.0 Intra-annual Indonesia BSC Philippines BSC Icelandic lobster price Annual price Source: Authors. volatility volatility

Indonesia BSC Philippines BSC Icelandic lobster Source: Authors.

TABLE 3.5: Score System for Indicators of Boat Owners/Captain

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Earnings Compared to 5: More than 50% above the national average Ratio of annual earnings from ﬁ shing National Average Earnings 4: Between 10 and 50% above national average per owner to the national average 3: Within 10% above the national average earnings. In many cases, the captain is an owner of a vessel or permit, 2: Between 50% and 90% of the national average but in other cases, captains are 1: Less than half of the national average considered as crew. Fishery Wages Compared to 5: More than 50% above the national average Ratio of captain’s average daily wage Nonﬁ shery Wages 4: Between 10 and 50% above the national average to average daily wage in region/ 3: Within 10% above the national average country. 2: Between 50 and 90% of the national average 1: Less than half of the national average Education Access 5: Higher education is accessible 4: High school–level education or advanced technical training is accessible 3: Middle school–level education or simple technical training is accessible 2: Basic literacy and arithmetic education is accessible 1: Formal education is not accessible Access to Health Care 5: Global standard treatment for illness is accessible 4: Licensed doctors provide trauma, surgical, and drug treatments 3: Nurses or medical practitioners provide emergency and routine drug treatments 2: Basic and simple drug treatment is accessible 1: Medical or drug treatment is not accessible Social Standing of Boat 5: Among the most respected in the community, comparable with civic and Owners and Permit Holders religious leaders and professionals, such as doctors and lawyers 4: Comparable to management and white-collar jobs 3: Comparable to skilled labor jobs 2: Comparable to unskilled blue collar or service jobs 1: Among the least respected, such as slaves or indentured servants Proportion of Nonresident 5: 95–100% local Employment 4: 71–95% local 3: 36–70% local 2: 5–35% local 1: Virtually no local crew

Source: Anderson and Anderson 2010.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS 23

FIGURE 3.9: Boat Owners/Captain However, their Social Standings are similar with a score of 2 or 3 as most of the time, fi shery crews are regarded as Earnings compared to national average skilled or nonskilled labor. earnings 5 The scores of Access to Education for Indonesia and the Philippines BSC fi sheries crew are low (2), compared to Proportion of 4 Fishery wages nonresident 3 compared to Icelandic lobster crews (5) or their own countries’ boat own- employment 2 non-fishery wages ers/captains (4). In the Philippines, elementary and second- 1 ary education in state-run schools is free, but parents have 0 to pay for the school supplies, uniforms, and other contribu- Social standing of tions which can be a hindrance for kids from going to school. boat owners Education and permit holders access Most crabbers’ children fi nished at least the elementary level. After that, some male children are often asked to help their parents in the crabbing activities or other livelihoods. Access to health care It is hard for the family to continue sending kids to school when they can make extra money for the family. These kids Indonesia BSC Philippines BSC Icelandic lobster will probably grow and follow the paths of their parents. Thus Source: Authors. the cycle of poverty, less education, and lack of opportunity repeat. FIGURE 3.10: Summary of Boat Owners/Captain

5.0 4.5 The score of Access to Health Care for the crew in Indonesia 4.0 and the Philippines BSC fi sheries crew is 2, the same as the 4.0 one for boat owners/captain in these two countries, indicat- 2.8 ing a weak national health care system and a substantial im- 3.0 provement space. 2.0 Regarding the nonresident employment, the Philippines BSC 1.0 fi shery has almost all local crabbers (score 5), while Indonesia and Iceland have more nonresident fi shermen (score 3) in 0.0 their BSC and lobster fi sheries. Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. In summary, Icelandic lobster crews are performing above the 3.5 benchmark in their communities with average scores For certain fi sheries, it is not necessary to have a cap- of 4.3 (fi gure 3.12). Indonesia BSC crews and the Philippines tain. In those cases, this group of indicators is about BSC crews are doing marginally fi ne in their communities the situation of boat owners. with an average score of 3.5 and 3.3, respectively. Their education and health care access have room for substantial 3.2.5 Crew improvement. Similar to the Boat Owner/Captain, this group of indicators fo- cuses on the social status of the crews (table 3.6). Evaluating 3.2.5.1 Comments the economic and social performance of crew members can Similar to Boat Owner/Captain, it is suggested to use help us understand the equity of wealth distribution within Earnings Compared to Regional Average to replace the fi shery sector by comparing with the performance of the the original two indicators (see Appendix B). boat owners/captains, or the cross-country situation by com- The status of crew can vary with regions, boat type, paring with other countries’ crews. or gear type. It is suggested to use the average or the All three fi sheries have well-represented age groups (score 5) representative crew to score this group of indicators. and crew experiences (score 4), indicating a relatively stable fi shery sector (fi gure 3.11). The difference is that Indonesia 3.2.6 Summary BSC fi shery crews and Icelandic lobster fi shery crews have The FPIs reasonably represent the situation of these three better economic conditions compared to national average fi sheries with regard to the Harvest Sector Performance or nonfi shery, but not the Philippines BSC fi shery crews. (fi gure 3.13). In general, the harvest sector of the Icelandic

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 24 CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS

TABLE 3.6: Score System for Indicators of Crew

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Earnings Compared to 5: More than 10% above the national average Ratio of crew’s average daily wage to average National Average Earnings 4: Within 10% of the average national wage. 3: Between 50 and 90% of the average 2: Between 25 and 50% of the average 1: Less than 25% of the average Fishery Wages Compared to 5: More than 10% above the national average Ratio of crew’s average daily wage to average Nonﬁ shery Wages 4: Within 10% of the average daily wage in region/country. 3: Between 50 and 90% of the average 2: Between 25 and 50% of the average 1: Less than 25% of the average Education Access 5: Higher education is accessible 4: High school–level education or advanced technical training is accessible 3: Middle school–level education or simple technical training is accessible 2: Basic literacy and arithmetic education is accessible 1: Formal education is not accessible Access to Health Care 5: Global standard treatment for illness is accessible 4: Licensed doctors provide trauma, surgical, and drug treatments 3: Nurses or medical practitioners provide emergency and routine drug treatments 2: Basic and simple drug treatment is accessible 1: Medical or drug treatment is not accessible Social Standing of Crew 5: Among the most respected in the community, comparable with civic and religious leaders and professionals, such as doctors and lawyers 4: Comparable to management and white-collar jobs 3: Comparable to skilled labor jobs 2: Comparable to unskilled blue-collar or service jobs 1: Among the least respected, such as slaves or indentured servants

Proportion of Nonresident 5: 95–100% local Employment 4: 71–95% local 3: 36–70% local 2: 5–35% local 1: Virtually no local crew Crew Experience 5: More than 20 years (skilled career crew) Average years of experience of crew 4: 5–20 years members. 3: 3–5 years 2: 1–3 years 1: 0 full years of experience (mostly new crew each season) Age Structure of Harvesters 5: All working ages are well represented Age range of both captains and their crews. 4: Slightly skewed toward younger or older 3: Skewed toward younger or older 2: Almost entirely younger or older, but working age 1: Harvesters primarily younger or older than working age Source: Anderson and Anderson 2010.

lobster fi shery is performing well, with all the average scores 3.3 POST-HARVEST PERFORMANCE for each category above the benchmark 3.5. The Indonesia The third component is the processing and marketing sectors BSC fi shery performed well in terms of the Boat Owner/ (Post-Harvest Performance). The Post-Harvest Performance Captain but has a huge opportunity for potential improve- components measure success in the market and value chain. ment with regard to Harvest Performance and Harvest Asset Performance. The Philippines BSC fi shery does not appear This component includes fi ve dimensions, Market Perfor- to have substantial risk exposure, but every other category in mance, Processing and Support Industry Performance, the harvest sector needs to improve substantially. Asset Performance, Processing Owners/Managers, and

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS 25

FIGURE 3.11: Crew Processing Workers. The Market Performance dimension captures the effects of handling and processing on the Earnings compared to price received for the product. The Processing and Support national average earnings Industry Performance dimension captures processing ef- 6 Fishery wages fi ciency and the extent to which the value of the product Age structure of compared to non-fishery is being maximized. The remaining dimensions refl ect 4 harvesters wages wealth accumulation in the processing sector. The Asset 2 Performance dimension captures the wealth accumulating Crew experience 0 Education access to processing capital owners and the extent to which they can and do reinvest in the industry. The Processing Owners Proportion of and Managers and Processing Workers dimensions capture Access to health nonresident the wealth that goes to each group as income and the extent employment care to which it supports the fi shing communities (Anderson and Social standing of crew Anderson 2010).

Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. 3.3.1 Market Performance The Market Performance is the average of seven indicators shown in table 3.7, measuring the price trend, margin, and market orientation.

The U.S. markets and EU markets are the main targets for FIGURE 3.12: Summary of Crew Performance these three fi sheries; therefore, the Capacity of Firms to 5.0 4.3 Export to those countries, the Final Market Wealth, and Final Market Use all receive high scores (fi gure 3.14). Indonesia 4.0 3.5 3.3 exports most of their BSC products because BSC is not a 3.0 locally favored species. Only rejected crabmeat product will go to the local market as food or shrimp paste material. The 2.0 wholesale price of BSC depends on the type of crabmeat (usually categorized as Backfi n, Lump, Super Lump, Claw, 1.0 Jumbo Lump, and Special). Indonesia BSC received higher 0.0 wholesale price (US$17/lb) ($37.4/kg) than the Philippines Indonesia BSC Philippines BSC Icelandic lobster (US$8 to 10/lb) ($17.6 to $22/kg). The reason for this price Source: Authors. difference is not clear from this quick assessment. One

FIGURE 3.13: Summary of Harvest Sector Performance

5.0 4.9 5.0 4.3 4.5 4.3 4.2 4.0 4.0 3.7 3.5 3.2 3.2 3.3 2.8 3.0 2.7

2.0 1.7

1.0

0.0 harvest harvest sector risk exposure owners, permit crew performance asset performance holders & captains

Indonesia BSC Philippines BSC Icelandic lobster Source: Authors.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 26 CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS

TABLE 3.7: Score System for Indicators of Market Performance

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Ex-Vessel Price versus 5: Above 95% Historic High 4: 86–95% The indicator is the ratio of annual ex-vessel 3: 71–85% prices to the average of the three highest annual 2: 50–70% ex-vessel prices in the past 10 years. 1: Below 50% Final Market Use 5: Premium human consumption (premium quality and products) 4: High-value human consumption 3: Moderate-value human consumption 2: Low-value human consumption 1: Fish meal/animal feed/bait or nonconsumptive International Trade 5: 91–100% export 4: 61–90% export Percentage of the ﬁ shery’s value that is from ﬁ sh 3: 31–60% export exported for consumption. 2: 2–30% export 1: Virtually no export

Final Market Wealth 5: Greater than US$35,000 Average per capita GDP of the consumer of a 4: Greater than US$25,000 fi shery’s fi nal product (pounds weighted by GDP). 3: Greater than US$12,500 (U.S. CIA’s rank of per capita GDP of all countries 2: Greater than US$5,000 https://www.cia.gov/library/publications/the- 1: Less than US$5,000 world-factbook/rankorder/2004rank.html). Wholesale Price 5: More than twice global average Relative to Similar 4: 120–200% of global average Ratio of average price for fi sh weight in whole- Products 3: Within 20% of global average sale (primary) fi sh product from the base country, 2: 50–80% of global average to a global average for similar species. 1: Less than half global average Capacity of Firms to 5: 96–100% approved Export to the United 4: 71–95% Percentage of a country’s fi sh exports that are States and European 3: 36–70% approved for export to the United States or Union 2: 5–35% European Union. 1: Virtually none approved

Ex-Vessel to Wholesale 5: Less than 0.3 Ratio of ex-vessel price to wholesale price Marketing Margins 4: 0.3–0.5 (adjusted for standard meat yield rates). To make 3: 0.5–0.8 the adjustment, divide the ex-vessel price by 2: 0.8–0.95 a standard processing yield, and divide by the 1: 0.95 or more wholesale price. Source: Anderson and Anderson 2010.

possible reason is the Philippines have a bigger domestic due to the lower price (fi gure 3.15). Both the Philippines and market compared to Indonesia for the BSC. However, the Indonesia BSC fi sheries have huge opportunities to improve ex-vessel price has dropped over 40 percent compared to their ex-vessel margins. the historic high in Indonesia. One benefi t of the lower price is to broaden the range of consumers. The key issue facing 3.3.1.1 Comments Indonesia and the Philippines BSC fi sheries with regard to It can be hard to estimate the average price for some market performance is that the margin profi t is not highly fi sheries because of different product forms. It is sug- captured within these two countries. They both received gested to use the major product form as a representa- the lowest score (1) on Ex-Vessel to Wholesale Marketing tive to calculate. Margins, indicating a potential signifi cant wealth transfer 3.3.2 Processing and Support Industry Performance outside these two countries. The Processing and Support Industry Performance is In summary, the market performance for both Indonesia BSC the average of fi ve indicators, Yield of Processed Product, and Iceland lobster fi sheries are above the benchmark 3.5. Capacity Utilization Rate, Product Improvement, Regional The Philippines BSC fi shery received an average score of 3.3 Support Businesses, and Time to Repair. This group of

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS 27

FIGURE 3.14: Market Performance adequate raw material supply in Indonesia and thus is more fully utilized than the Philippines. Ex-vessel price versus historic high In summary, the average performance of the Processing and 5 Ex-vessel to 4 Support Industry in both Indonesia BSC and Icelandic lob- wholesale 3 Final market use ster fi sheries are above the benchmark 3.5 (fi gure 3.17). Only marketing margins 2 the Philippines BSC fi shery received a score of below 3.5. 1 It has substantial room for improvement on the utilization 0 Capacity of firms International rate, yield effi ciency, and regional support. to export to the trade US & EU 3.3.2.1 Comments

Wholesale price Final market With regard to Yield of Processed Product, there relative to similar wealth appears to be some confusion. The deﬁ nition of this products indicator is “Ratio of actual yield (pounds) to the

Indonesia BSC Philippines BSC Icelandic lobster maximum yield technically achievable.” The Philippine Source: Authors. expert scored it according to the deﬁ nition. Based on the maximum yield of 30 percent, the Philippines BSC processing yield is 23 percent; therefore, the ratio is 76.7 percent, indicating a score of 2 “within FIGURE 3.15: Summary of Market Performance 25 percent.” The Indonesian expert thought it meant

5.0 what is the maximum they can sell. According to 4.3 their rejection rate of 2 to 5 percent for the processed 4.0 3.7 3.3 crabmeat, they scored 5 since they can sell almost everything they processed. This was not what the score 3.0 intended to do. It is more likely that the Indonesia BSC 2.0 fi shery received 2 or 3 for this indicator instead of 5 considering their technology will not be very different. 1.0 However, the rate of yield also depends on the size of the crabs. The bigger the crab, the higher is the 0.0 crabmeat yield. It is suggested to use the average rate Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. if there are a few different forms or sizes. In terms of Regional Support Businesses, the indicators is designed to capture the potential of the value Indonesia expert gave a score of 5 because all of the required equipment for processing is simple and easy chain. The detailed score system is shown in table 3.8. to replace. The Philippines expert gave a score of 1 According to the FPIs scores, the Indonesia BSC is doing because there is no other regional business support. very well in the Processing and Support Industry, with full Regional support has a much broader meaning than scores for all of the indicators (fi gure 3.16). This might be due repairing the equipment. It is more than the process- to some misunderstanding of the scale defi nition, which will ing sector itself, including the business environment, be explained below. All of these fi sheries achieve full scores transportation, services, and so on. Therefore, it is on Product Improvement because they all target the value- more likely this score for Indonesia is lower, maybe added export market. Both Indonesia and the Philippines 4 or 3 instead of 5. serve as BSC landing and processing centers. They export With the above two corrections, the average score for canned, pasteurized BSCs and frozen BSCs. The specifi ca- the Indonesia BSC fi shery will be between 4 and 4.4, tions and packaging come from the order of the buyer or still higher than the benchmark. importer, which are usually large seafood companies. The Time to Repair is usually short because the processing equip- 3.3.3 Post-Harvest Asset Performance ment is not sophisticated. They only need knives, scissors, The Asset Performance is the average of Borrowing Rate and electric pumps. In Indonesia, the processing facilities Relative to Risk-Free Rate, Source of Capital, and Age of open every day except religious holidays (Hari Raya). There is Facilities (table 3.9).

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 28 CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS

TABLE 3.8: Score System for Indicators of Processing and Support Industry Performance

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Yield of Processed Product 5: At feasible frontier Ratio of actual yield (pounds) to the maximum yield 4: Within 5% of the feasible frontier technically achievable. 3: Within 10% 2: Within 25% 1: Less than 75% of maximum yield Capacity Utilization Rate 5: Virtually year-round Days open for processing each year. Such days would 4: 76–95% of days not normally include religious or civic holidays, or weekly 3: 51–75% rest days. 2: 20–50% 1: Less than 20% Product Improvement 5: 76–100% of landings are enhanced Proportion of harvest meat weight going into certiﬁ ed, 4: 51–75% branded, or value-added products. 3: 26–50% 2: 1–25% 1: No landings have enhancements Regional Support Businesses 5: All types of support are plentiful 4: Some types of support are capacity constrained or unavailable 3: Most types of support are capacity constrained or unavailable 2: Support limited to variable inputs 1: Industry support is not locally available

Time to Repair 5: Less than a week Days required to make a major mechanical repair to a 4: One week to one month vessel (e.g., blown valve) that requires a replacement 3: One month to less than a season part, including wait time. 2: Full season 1: Major repair not possible

Source: Anderson and Anderson 2010.

FIGURE 3.16: Processing and Support Industry FIGURE 3.17: Summary of Processing and Support Performance Industry Performance

Yield of 5.0 processed 5.0 4.4 product 4.0 5 3.2 4 3.0 3 2.0 Time to repair 2 Capacity utilization rate 1 1.0 0 0.0 Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. Regional Product support improvement businesses

Indonesia BSC Philippines BSC Icelandic lobster of from banks or any formal lending agencies, particularly Source: Authors. for the picking plants. For the very few pasteurizing plants, they can get secured loans at the rate of 9 to 16 percent. In Indonesia, the miniplants (picking plants) normally get fi nan- Both Indonesia and the Philippines perform well with regard cial support from the processors/exporters. All the facility to the asset performance for post-harvest chain (fi gure 3.18). and equipment were supplied by specifi c processors/export- In the Philippines, Sources of Capital for the crabbing indus- ers and became assets of the miniplants. As a return, these try are usually from family savings or informal loans, instead miniplants have to supply to these processors/exporters.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS 29

TABLE 3.9: Score System for Post-Harvest Asset Performance

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Borrowing Rate Relative to 5: Less than 1.75; cf. 30-year conforming mortgage Average ratio between the interest rate Risk-Free Rate 4: Less than 2.5; cf. personal bank loan on loans made in the industry to risk- 3: Less than 4; cf. good credit card rates free rates over the last 3 years. 2: Less than 7; cf. bad credit card rates 1: Greater than 7; usury Source of Capital 5: Unsecured business loans from banks/Venture capital Points to be assigned based on 4: Secured business loans from banks/public stock offering category of lenders or investors that is 3: Loans from banks secured by personal (not business) assets/government- most typically used in the processing subsidized private lending/government-run loan programs/international aid sector. agencies 2: Micro lending/family/community-based lending 1: Maﬁ a/no capital available Age of Facilities 5: Less than 7 years; ﬁ rst quarter of expected life Average age of the key durable 4: 7–15 years; second quarter of expected life processing capital unit (plants, catcher- 3: 16–20 years; third quarter of expected life processor vessels). 2: 21–25 years; fourth quarter of expected life 1: Greater than 25 years; exceeding expected life Source: Anderson and Anderson 2010.

FIGURE 3.18: Post-Harvest Asset Performance FIGURE 3.19: Summary of Post-Harvest Asset Performance Borrowing rate relative to risk- 5.0 4.2 free rate 4.0 5 4.0 3.3 4 3 3.0 2 1 2.0 0 1.0

Age of facilities Source of capital 0.0 Indonesia BSC Philippines BSC Icelandic lobster Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. Source: Authors.

There are also very limited government programs called processors and producers” be incorporated into score PNPM (National Program for Community Empowerment) 2 as the situation for the harvest sector. that give small credits to the local community. Because of these types of informal fi nancial support, the Borrowing Rate 3.3.4 Processing Owners/Managers Relative to Risk-Free Rate scored high for all of them. They Similar to the dimension for the Boat Owners/Captain, the also performed satisfactorily with regard to Age of Facilities. social status of Processing Owner/Managers is evaluated in In summary, both Icelandic lobster and the Philippines BSC are the same way by using indicators that can give a proxy pic- performing satisfactorily in Post-Harvest Asset Performance ture about their wealth and social sustainability. This dimen- (fi gure 3.19). The Indonesia BSC fi shery performed close to sion includes six indicators as shown in table 3.10. the benchmark 3.5 due to the low score on Source of Capital. Processing Owners/Managers in Indonesia and Philippines 3.3.3.1 Comments for BSC are generally doing well (fi gure 3.20). They have rela- Source of Capital: For developing countries, it is tively good access to education and health care, and make suggested that “contract relationship between the more money than the national average or nonfi shery. In

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 30 CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS

TABLE 3.10: Score System for Processing Owners/Managers

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Earnings Compared to 5: More than 50% above the national average Ratio of annual earnings from National Average Earnings 4: Between 10 and 50% above national average processing per owner to the national 3: Within 10% above the national average average earnings. 2: Between 50 and 90% of the national average 1: Less than half of the national average Manager Wages Compared to 5: More than 50% above the national average Ratio of managers’ average Nonﬁ shery Wages 4: Between 10 and 50% above national average daily wage to average daily wage 3: Within 10% above the national average in region. 2: Between 50 and 90% of the national average 1: Less than half of the national average Education Access 5: Higher education is accessible 4: High school–level education or advanced technical training is accessible 3: Middle school–level education or simple technical training is accessible 2: Basic literacy and arithmetic education is accessible 1: Formal education is not accessible Access to Health Care 5: Global standard treatment for illness is accessible 4: Licensed doctors provide trauma, surgical, and drug treatments 3: Nurses or medical practitioners provide emergency and routine drug treatments 2: Basic and simple drug treatment is accessible 1: Medical or drug treatment is not accessible Social Standing of Processing 5: Among the most respected in the community, comparable with civic and reli- Managers gious leaders and professionals, such as doctors and lawyers 4: Comparable to management and white-collar jobs 3: Comparable to skilled labor jobs 2: Comparable to unskilled blue-collar or service jobs 1: Among the least respected, such as slaves or indentured servants Nonresident Ownership of 5: 96–100% local Proportion of ex-vessel value Processing Capacity 4: 71–95% local processed by regionally owned 3: 36–70% local processing capital. 2: 5–35% local 1: Virtually no local crew Source: Anderson and Anderson 2010.

Indonesia, the processing company refers to the processor/ packer/exporter (generally big companies) who buys crabmeat from miniplants, processes, packs, and then exports. In FIGURE 3.20: Processing Owners and Managers a miniplant, the owners usually manage the facility. The average processing capacity is about 500 kilo of raw material per Earnings compared to national average day, resulting in 100 kilo of crabmeat. With a margin proﬁ t of earnings 5 IDR 5,000/kg 6 ($0.6/kg), their daily earnings are IDR 500,000/ 6 day ($60/day) or about IDR 15 million per month (US$1,775/ Nonresident 4 Manager wages month). Additionally, some processing plants also process ownership of compared to non- processing capacity 2 fishery wages brangkas (mainly chitin) mostly as feed, which will bring an additional IDR6 million (US$710) per month from sales of 0 wastes. This income level allows the processing owners to Social standing of have the ﬁ nancial ability to obtain good medical treatment Education access processing managers or provide for their children higher levels of education (university). One key difference between these three countries Access to health is the proportion of nonresident ownership. The Philippines care

Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. 5 1 US$ = 8450 IDR (http://coinmill.com/IDR_USD.html#USD=1).

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS 31

FIGURE 3.21: Summary of Processing Owners/ 3.3.5 Processing Workers Managers The social situation of Processing Workers is refl ected by the 5.0 same indicators as the Processing Owner/Managers, plus 4.2 4.3 one indicator on Worker Experience (table 3.11). 4.0 3.7 Icelandic lobster processing workers have good Access to 3.0 Education and Health Care (fi gure 3.22). Their wages are relatively better compared to nonfi shery wages. However, 2.0 Icelandic lobster processing workers have lower social standing. This might be because of the high proportion of 1.0 nonresident employment in this sector in Iceland. Most of 0.0 the processing workers in Iceland are from other countries. Indonesia BSC Philippines BSC Icelandic lobster Indonesia processing worker conditions received a score just Source: Authors. above 3.5, with more experience and better health care access. The Philippines has room for improvement. This group of indicators basically refl ects the situation of processing has the highest local ownership. In Iceland, over half of the workers in each country. They are clear and easy to score. owners are nonresidents. In summary, the conditions facing processing workers In summary, the Processing Owners/Managers performed could be substantially improved in both Indonesia BSC and above the benchmark for all three fi sheries (fi gure 3.21). The Philippine BSC fi sheries (fi gure 3.23), particularly on educa- high proportion of nonresident ownership can be a concern tion and health care access, income, and social standing. The for the Icelandic lobster fi shery but not an issue for Indonesia conditions are marginally satisfactory for Icelandic lobster and the Philippines BSC fi sheries. The Indonesia BSC fi shery fi shery, but the earnings and social standings are still much needs to raise the social standing for processing managers. below the benchmarks. 3.3.4.1 Comments 3.3.5.1 Comments Nonresident Ownership of Processing Capacity: The Nonresident Ownership of Processing Capacity: It is defi nition of bin 5 is 96 to 100 percent, and bin 4 is 71 suggested to change bin 5 to “91 to 100 percent” and to 95 percent. This leaves bin 5 a very narrow scale bin 4 to “71 to 90 percent” (see Appendix B). that is hard to achieve. For example, Indonesia chose 4, and their explanation is that most of the owners are 3.3.6 Summary local. It is suggested to change bin 5 to “91 to 100 The FPIs reasonably represent the situation of these three percent” and bin 4 to “71 to 90 percent.” fi sheries (fi gure 3.24) with regard to the Post-Harvest Processing Owner or Manager: Whether FPIs are Sector Performance. The social situation of the processing measuring managers or owners creates some confu- workers is the weakest area for all three fi sheries. Indonesia sion because they are two different groups and BSC fi shery also needs improvement on Post-Harvest Asset the score for each can be different. For example, in Performance. The Philippines BSC fi shery needs substantial Indonesia, owners run the processing facilities. There improvement on Processing and Support Industry. is no manager in miniplants. There are fi eld managers/ coordinators whose responsibilities are to supervise When averaging the score for each of the components and oversee quality control. Those fi eld managers/ discussed above, a summary of FPIs’ output results can coordinators are hired by the large company to ensure be obtained (table 3.12), which provides a big picture of the their raw material supply. Their annual income is much outcomes and illustrates clearly the ecological, economic, and lower than that of the owners. If all of the scores are social performance for each fi shery. In all, the ecological status about processing facility owners, the shape of the of both Indonesia BSC and Philippines BSC fi sheries is a critical graph will change, and Indonesia will perform exactly concern. They are below satisfactory to maintain the ecological the same as the Icelandic lobster processing facility sustainability. The harvest sector performance has substantial owners, except Indonesia will have more local own- room for improvement in Indonesia and Philippines BSC fi sher- ers. It is suggested to change the title to “Processing ies. The post-harvest sector for all these three fi sheries per- owner,” deleting “manager.” forms better than the harvest sector, above the benchmark 3.5.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 32 CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS

TABLE 3.11: Score System for Processing Workers

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Earnings Compared to 5: More than 10% above the national average Ratio of annual earnings from per National Average Earnings 4: Within 10% above the average processing worker to the national 3: Between 51 and 90% of the average average earnings. 2: Between 25 and 50% of the average 1: Less than 25% of the average Worker Wages Compared to 5: More than 10% above the national average Ratio of workers’ average daily Nonﬁ shery Wages 4: Within 10% above the average wage to average daily wage in 3: Between 51 and 90% of the average region. 2: Between 25 and 50% of the average 1: Less than 25% of the average Education Access 5: Higher education is accessible 4: High school–level education or advanced technical training is accessible 3: Middle school–level education or simple technical training is accessible 2: Basic literacy and arithmetic education is accessible 1: Formal education is not accessible Access to Health Care 5: Global standard treatment for illness is accessible 4: Licensed doctors provide trauma, surgical, and drug treatments 3: Nurses or medical practitioners provide emergency and routine drug treatments 2: Basic and simple drug treatment is accessible 1: Medical or drug treatment is not accessible Social Standing of Processing 5: Among the most respected in the community, comparable with civic and religious Workers leaders and professionals, such as doctors and lawyers 4: Comparable to management and white-collar jobs 3: Comparable to skilled labor jobs 2: Comparable to unskilled blue-collar or service jobs 1: Among the least respected, such as slaves or indentured servants Proportion of Nonresident 5: 96–100% local Employment 4: 71–95% local 3: 36–70% local 2: 5–35% local 1: Virtually no local crew Worker Experience 5: More than 20 years (skilled career crew) Average years of experience of 4: 5–20 years workers. 3: 3–5 years 2: 1–3 years 1: 0 full years of experience (mostly new crew each season)

Source: Anderson and Anderson 2010.

FIGURE 3.22: Processing Workers FIGURE 3.23: Summary of Processing Workers Earnings compared to national average 5.0 earnings 3.7 5 4.0 3.4 4 Worker wages 3.0 Worker experience 3 compared to non- 3.0 fishery wages 2 1 2.0 Proportion of 0 1.0 nonresident Education access employment 0.0 Indonesia BSC Philippines BSC Icelandic lobster Social standing of Access to health Source: Authors. processing workers care

Indonesia BSC Philippines BSC Icelandic lobster Source: Authors.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 3 — FPIs’ APPLICATION ON BSC FISHERIES—OUTPUT RESULTS 33

FIGURE 3.24: Summary of Post-Harvest Sector Performance 5.0 5.0 4.3 4.4 4.3 4.0 4.2 4.2 3.7 3.7 3.7 4.0 3.3 3.3 3.4 3.2 3.0 3.0

2.0

1.0

0.0 market processing & post-harvest processing processing performance support industry asset owners & workers performance performance managers Indonesia BSC Philippines BSC Icelandic lobster Source: Authors.

TABLE 3.12: Summary of FPIs’ Output Results

COMPONENT INDONESIA BSC PHILIPPINES BSC ICELANDIC LOBSTER FPIs’ Output Ecologically Sustainable Fisheries 1.8 1.3 4.8

Harvest Sector Performance 3.2 3.2 4.6

Post-Harvest Performance 3.9 3.6 4.1

Source: Authors.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52

CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS 35

Chapter 4: FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS

This chapter will focus on the enabling factors that contribute 4.1.2 Governance—Country Level either the success or the failure of the fi sheries. The governance indicator uses the World Bank’s Worldwide Governance Indicators (WGI), which is updated annually since 2002 (World Bank 2011a). It consists of six dimen- 4.1 MACRO FACTORS sions. FPIs regroup them into two categories: Governance The Macro Factors take advantage of the existing indicators Indicator—Effectiveness, taking the average of Government from other sources to capture the General Environmental Effectiveness (GE), Regulatory Quality (RQ), Rule of Law Performance, Economic Condition, and Governance. It also (RL), and Control of Corruption indicators (CC) (four out of includes Exogenous Environmental Factors to capture any six dimensions); and Governance Indicator—Accountability, exogenous shocks. More details are presented as follows. taking the average of Voice and Accountability and Political Stability indicators (two out of six dimensions). The score 4.1.1 General Environmental Performance—Country system is shown in table 4.2. Level Indonesia and the Philippines received 2 or 3 for these two The General Environmental Performance uses the Environ- indicators, indicating the general perceptions regarding the mental Performance Index (EPI) developed by researchers stability, public services, ability to implement sound policies, from Yale University and Columbia University (EPI 2011). confi dence in the quality of property rights, and corruption The EPI tracks 10 policy categories covering both environ- situation in these two countries could be greatly improved mental public health and ecosystem vitality. It has been re- (fi gure 4.2). visited biannually since 2006. The score system is defi ned in table 4.1. 4.1.3 Economic Condition—Country Level The economic condition is composed of two economic In 2010, Iceland achieved the highest score (93.6). Indonesia indicators. One is the Index of Economic Freedom (IEF) and the Philippines scored 44.6 and 65.7, respectively. developed by The Heritage Foundation and The Wall Street Therefore, the General Environmental Performance scores Journal to evaluate 10 components of freedom, such as busi- for Iceland, Indonesia, and the Philippines were 5, 3, and 4, ness freedom, investment freedom, trade freedom, labor respectively (fi gure 4.1). freedom, fi nancial freedom, and so on (table 4.3). Another is

TABLE 4.1: Score System for General Environmental Performance

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION General Environmental • 5: EPI of 81–100 The EPI considers factors such as disease, Performance • 4: 61–80 water quality, air pollution, biodiversity, natural • 3: 41–60 resources, and climate change. The EPI ranges from 1–100. • 2: 21–40 • 1: 1–20 Source: Anderson and Anderson 2010.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 36 CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS

FIGURE 4.1: General Environmental Performance FIGURE 4.2: Country-Level Governance

5.0 5 5.0 4.0 4 4.0 3.0 3 3.0 2 2.0 1

1.0 0 0.0 governance indicator– governance indicator–voice effectiveness & accountability Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. Indonesia BSC Philippines BSC Iceland lobster Source: Authors.

TABLE 4.2: Score System for Governance—Country Level

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Governance 5: 1st quintile The Governance Indicators (Kaufman, Kraay, and Mastruzzi 2008) assign coun- Indicator—Effectiveness 4: 2nd tries to ranks based on six dimensions. This measure is the average percentile 3: 3rd ranking of the (1) Government Effectiveness, (2) Regulatory Quality, (3) Rule of Law, and (4) Control of Corruption indicators (four out of six dimensions). Assign 2: 4th average percentile to a quintile and give points according to the left criteria. 1: 5th Governance Indicator—Voice 5: 1st quintile The Governance Indicators (Kaufman, Kraay, and Mastruzzi 2008) assign coun- and Accountability 4: 2nd tries to ranks based on six dimensions. This measure is the average percentile 3: 3rd ranking of the (1) Voice and Accountability and (2) Political Stability indicators (two out of six dimensions). Assign average percentile to a quintile and give 2: 4th points according to the left criteria. 1: 5th Source: Anderson and Anderson 2010.

TABLE 4.3: Index of Economic Freedom (IEF), 2011

THE PHILIPPINES INDONESIA ICELAND AVERAGE Government Spending 91.0 88.9 0.0 63.9 Fiscal Freedom 78.8 83.0 69.8 76.3 Trade Freedom 77.8 73.8 88.2 74.8 Monetary Freedom 76.3 74.3 68.6 73.4 Labor Freedom 50.7 51.8 60.7 61.5 Financial Freedom 50.0 40.0 60.0 48.5 Business Freedom 43.4 54.9 92.7 64.3 Investment Freedom 40.0 35.0 65.0 50.2 Property Rights 30.0 30.0 90.0 43.6 Freedom from Corruption 24.0 28.0 87.0 40.5 Source: http://www.heritage.org/index/ranking.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS 37

TABLE 4.4: Score System for Economic Conditions—Country Level

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Index of Economic Freedom (IEF) 5: IEF of 81–100 The 10 factors are equally weighted and the ﬁ nal composite 4: 61–80 index has a range from 1 to 100. A detailed discussion of 3: 41–60 these factors and methodology is found in Miller and Holmes (2009). 2: 21–40 1: 1–20 Gross Domestic Product (GDP) 5: Greater than US$30,000 Bin boundaries based on quintiles of the U.S. CIA’s rank of Per Capita 4: Greater than US$12,400 per capita GDP of all countries (https://www.cia.gov/library/ 3: Greater than US$6,000 publications/the-world-factbook/rankorder/2004rank.html). 2: Greater than US$2,500 1: Less than US$2,500 Source: Anderson and Anderson 2010.

FIGURE 4.3: Economic Condition 4.1.3.1 Comments This group of macroeconomic indicators seems to 5.0 adequately characterize the general economic and 4.0 environmental conditions. This macro environment will affect the success of ﬁ shery management. It is 3.0 important to understand all these macro constraints 2.0 when designing ﬁ shery policies.

1.0 4.1.4 Exogenous Environmental Factors—Country Level

0.0 This group of indicators on Exogenous Environmental index of economic gross domestic product Factors adds a new dimension on the macro factors to cap- freedom (GDP) per capita ture the impact of exogenous environmental shocks. It in- Indonesia BSC Philippines BSC Iceland lobster cludes fi ve different aspects, Disease and Pathogens, Natural Source: Authors. Disasters and Catastrophes, Pollution Shocks and Accidents, Level of Chronic Pollution (A), and Level of Chronic Pollution (B) (table 4.5). Gross Domestic Product Per Capita based on the data from These three fi sheries are not affected by chronic pollution, the World Bank to evaluate the general wealth situation of a disease, and pathogens (fi gure 4.4). The BSC harvests in particular country (World Bank 2011b). The score system is Indonesia and the Philippines are reduced by 10 to 30 per- shown in table 4.4. cent due to natural disasters and catastrophes. Additionally, Iceland has good macro conditions on these two indicators the BSC harvest in Indonesia is affected by pollution shocks (fi gure 4.3). Both Indonesia and the Philippines are in the mid- and accidents. This means that even if Indonesia has better range in terms of economic freedom but are relatively low fi shery management, they still need to pay attention to other for GDP per capita. The Philippines and Indonesia obtained sectors and the corresponding impact on the fi shery. 56.2 and 56 for IEF. Both face serious limitations resulting from corruption, weak property rights, and investment free- 4.1.4.1 Comments dom. Iceland faces serious issues associated with govern- These indicators adequately characterize the general ment spending and fi scal and monetary policy (table 4.3). exogenous environmental factors and their impact on Iceland is one of the wealthiest countries in the world the stock and consumption. with per capita GDP of nearly $40,000 per year. The GDP For Pollution Shocks and Accidents, it is suggested in Indonesia is $3,039 per year, and the Philippines GDP is to add “piracy” as this has become an issue for West $2,132 per year. Indian Ocean fi sheries.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 38 CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS

TABLE 4.5: Score System for Exogenous Environmental Factors

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Disease and Pathogens 5: Harvest unaffected by disease 4: Harvest reduced by less than 10% 3: Harvest reduced by less than 10–30% 2: Harvest reduced by more than 30% 1: Harvest almost completely closed by shocks Natural Disasters and Catastrophes 5: Harvest unaffected by disaster 4: Harvest reduced by less than 10% 3: Harvest reduced by less than 10–30% 2: Harvest reduced by more than 30% 1: Harvest almost completely closed by shocks Pollution Shocks and Accidents 5: Harvest unaffected by pollution 4: Harvest reduced by less than 10% 3: Harvest reduced by less than 10–30% 2: Harvest reduced by more than 30% 1: Harvest almost completely closed by shocks Level of Chronic Pollution (A) 5: Not detectable 4: Minimal detectable levels 3: Major detectable levels 2: Pollution affects stock growth 1: Pollution leading to severe stock decline Level of Chronic Pollution (B) 5: No consumption affected 4: Minimal consumption affected 3: Ofﬁ cial consumption advisories 2: Temporarily ban harvest for consumption 1: Completely closed for consumption Source: Anderson and Anderson 2010.

FIGURE 4.4: Exogenous Environmental Factors FIGURE 4.5: Summary of Macro Factors Disease and pathogens 5.0 5.0 5.0 5 5.0 4.6 4.5 4 4.0 4.2 Level of chronic 3 2 Natural disasters 4.0 pollution (B) 1 and catastrophes 3.0 0 3.0 2.5 2.5 2.0 2.0 2.0 Level of chronic Pollution shocks pollution (A) and accidents 1.0

0.0 Indonesia BSC Philippines BSC Iceland lobster country level exogenous country level country level Source: Authors. environmental environmental governance economic performance factors condition Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. For the Level of Chronic Pollution, it is suggested to add “stock effect” and “consumption effect” at the end of each indicator to distinguish each other instead of using “A” and “B” (see Appendix B). the Philippines have substantial room for improvement in gov- 4.1.5 Summary ernance effectiveness and economic conditions (ﬁ gure 4.5). In summary, the Icelandic lobster ﬁ shery is located in a country None of them experienced severe exogenous environmental with generally high-performing macro factors. Indonesia and shocks.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS 39

TABLE 4.6: Score System for Access Rights

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Proportion of Harvest 5: Virtually all The proportion of total harvest that is Managed Under Limited 4: 71–95% under limited-access fi shing regulation. Access 3: 36–70% 2: 5–35% 1: Virtually none Transferability Index 5: Very Strong: Fully transferable through well-established, effi cient market institutions 4: Strong: Fully transferable, but institutions are poor or illiquid 3: Moderate: Transferable, but with severe restrictions on who can hold, or how much 2: Weak: Transferable only under highly restricted and limited condition 1: Access rights not transferable Security Index 5: Very Strong: Access rights are completely respected and are not diluted (e.g., by issuing more Extent to which the government reduces access rights) by the government or dilutes the access rights. 4: Strong: Rights are mostly respected by the government; generally survive changes in government administration 3: Moderate: Rights are at risk of retraction or dilution with changes in administration 2: Weak: Rights are highly diluted or there is high political uncertainty 1: None: Access rights are not protected Durability Index 5: Very Strong: More than 10 years to perpetuity Duration of the property right. 4: Strong: 6 to 10 years 3: Moderate: 1 to 5 years 2: Weak: Seasonal 1: None: None/daily Flexibility Index 5: Very Strong: All decisions on time of harvest, gear used, and handling practices are in the Ability of right holders to be fl exible in owner’s control the timing and production technology 4: Strong: Minimal restrictions on time of harvest and technology employed. 3: Moderate: Modest restrictions on time of harvest and technology 2: Weak: Signifi cant restrictions on time of harvest and technology 1: Time of harvest, gear used, and handling practices are not in the owner’s control Exclusivity Index 5: Very Strong: All decisions and access to the property are controlled by the right’s owner (rath- Ability of right holders to exclude those er than those without rights, competing resource users [like recreational or by-catch fi sheries]) who do not have the right from affect- 4: Strong: Little intrusion on resource by those without rights ing the resource or market 3: Moderate: Modest intrusion on resource by those without rights 2: Weak: Signifi cant intrusion on resource by those without rights 1: None: Completely unrestricted open access, despite putative right Source: Anderson and Anderson 2010.

4.2 PROPERTY RIGHTS AND RESPONSIBILITY Flexibility Index, and Exclusivity Index. The score system is The Property Rights and Responsibilities component con- illustrated in table 4.6. sists of Access Rights, Harvest Rights, and Collective Action. Access Rights and Harvest Rights are different. Access The subindicators for Access Rights refl ect the basic char- Rights defi ne the rights to access the fi shery, which focus on acteristics of any property rights, such as exclusivity, trans- accessibility. Harvest Rights explicitly convey rights to a spe- ferability, security, durability, and fl exibility. Icelandic lobster cifi c share or quota of quantity of the harvest. These groups fi shery achieved high scores on transferability (5) and fl ex- of indicators shed light on the characteristics of these rights. ibility (5) but needs substantial improvement on security (3) and durability (3). Both Indonesia and the Philippines BSC 4.2.1 Access Rights fi sheries operate under an open access regime. There are no Access Rights is the average of six indicators, including formally defi ned access rights (there are elements of implicit Proportion of Harvest Managed under Limited Access, access rights by tradition) and basically anyone can go fi shing Transferability Index, Security Index, Durability Index, whenever they want to. The Philippines BSC fi shery has no

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 40 CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS

FIGURE 4.6: Asset Rights FIGURE 4.7: Summary of Asset Rights

Proportion of 5.0 harvest managed 4.2 under limited access 4.0 5 4 3.0 2.5 Exclusivity 3 Transferability index 2 index 2.0 1.7 1 0 1.0

Flexibility 0.0 index Security index Indonesia BSC Philippines BSC Icelandic lobster Source: Authors.

Durability index

Indonesia BSC Philippines BSC Iceland lobster Source: Authors. have access rights, they will score 1 for Proportion of Harvest Managed Under Limited Access, but may formally defi ned access rights but received score 5 on the have high scores for other indicators depending on Flexibility Index because there are no constraints on timing, the situation. Informal management, such as fi shing gear, or handling (fi gure 4.6). agreement, or community-based management, will affect the score, even without offi cial authority. Indonesia has some management in place (e.g., registration), resulting in weak access rights. Vessels of less than 10 GT 4.2.2 Harvest Rights are managed by the district. The provinces deal with ves- Similar to the Access Rights, Harvest Rights measure the sels between 10 and 30 GT, and larger vessels are managed same characteristics but on the harvest aspect. The score on the national level. The local authorities are in charge of system is shown in table 4.7. managing the BSC fi sheries as most crab fi shermen use no motor or motors under 5 GT. Without national policy or The Icelandic lobster fi shery has strong Harvest Rights, but guidance, there are considerable differences in management there is still substantial room for strengthening Security and throughout the country. Some district governments recently Durability (fi gure 4.8). For the Philippines BSC fi shery, the took initiative to monitor the licensed small-scale vessels Harvest Rights essentially do not exist. The Indonesia BSC (<10 GT), including those used in the BSC fi shery. In some fi shery has no formal Harvest Rights either, but because of areas the fi shermen have self-organized to control the fi sh- some management in place there are some weak implicit ing gear used in this fi shery. In some districts the miniplants characteristics of harvest rights. encourage better handling and pay premium price for high- In summary, the Icelandic lobster fi shery has relatively strong quality product. All these practices have positively affected Harvest Rights. Indonesia and the Philippines BSC fi sheries the security, durability, exclusivity, and fl exibility scores. have very weak Harvest Rights (fi gure 4.9). They received As shown in fi gure 4.7, the Icelandic lobster fi shery achieved average scores of 2.7 and 1.7, respectively, much below the 4.2, indicating a healthy Access Rights in place. Both benchmark (3.5). The same as Access Rights, the Indonesia Indonesia and the Philippines BSC fi sheries have substantial BSC fi shery needs to set up total allowable catch (TAC) and room to strengthen their Access Rights. The Indonesia BSC strengthen the harvest exclusivity, durability, fl exibility, and fi shery needs to limit access and strengthen the asset exclu- transferability. The Philippines BSC fi shery could strengthen sivity, durability, fl exibility, and transferability. The Philippines every category of their Harvest Rights except fl exibility. BSC fi shery could strengthen every category of their Access Rights except fl exibility. 4.2.2.1 Comments The Harvest Rights indicators seem to adequately 4.2.1.1 Comments refl ect the characteristics of these fi sheries in terms This group of indicators is clear and easy to under- of harvest share or quota system. They are clearly stand and score. For fi sheries where they do not defi ned and easy to score.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS 41

TABLE 4.7: Score System for Harvest Rights

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Proportion of Harvest 5: Virtually all The proportion of total harvest that is Managed with Rights-Based 4: 71–95% under rights-based fi sheries manage- Management 3: 36–70% ment (e.g., Individual or Community Quotas, Catch Shares or Territorial Use 2: 5–35% Rights [TURFs]). 1: Virtually none Transferability Index 5: Very Strong: Fully transferable through well-established, effi cient market institutions 4: Strong: Fully transferable, but institutions are poor or illiquid 3: Moderate: Transferable, but with severe restrictions on who can hold, or how much 2: Weak: Transferable only under highly restricted and limited conditions 1: Access rights not transferable Security Index 5: Very Strong: Harvest rights are completely respected and are not diluted (e.g., Extent to which the government reduces by issuing more access rights) by the government or dilutes the access rights. 4: Strong: Rights are mostly respected by the government; generally survive changes in government administration 3: Moderate: Rights are at risk of retraction or dilution with changes in administration 2: Weak: Rights are highly diluted or there is high political uncertainty 1: None: Harvest rights are not protected Durability Index 5: Very Strong: >10 years to perpetuity Duration of the property right. 4: Strong: 6 to 10 years 3: Moderate: 1 to 5 years 2: Weak: Seasonal 1: None: None/daily Flexibility Index 5: Very Strong: All decisions on time of harvest, gear used, and handling practices Ability of right holders to be fl exible in are in the owner’s control the timing and production technology 4: Strong: Minimal restrictions on time of harvest and technology employed. 3: Moderate: Modest restrictions on time of harvest and technology 2: Weak: Signifi cant restrictions on time of harvest and technology 1: Time of harvest, gear used, and handling practices are not in the owner’s control Exclusivity Index 5: Very Strong: All decisions and access to the property are controlled by the Ability of right holders to exclude those right’s owner (rather than those without rights, competing resource users [like who do not have the right from affect- recreational or by-catch fi sheries]) ing the resource or market. 4: Strong: Little intrusion on resource by those without rights 3: Moderate: Modest intrusion on resource by those without rights 2: Weak: Signifi cant intrusion on resource by those without rights 1: None: Completely unrestricted open access, despite putative right Source: Anderson and Anderson 2010.

4.2.3 Collective Action Infl uence on Fishery Management and Access (fi gure 4.10). The Collective Action is the average of three indicators, in- The stakeholders in Indonesia are proactive, partially because cluding Participation in Harvester Organizations, Harvester of the establishment of Indonesia Blue Swimming Crab Organization Infl uence on Fishery Management and Access, Processing Association (APRI). APRI consists of 11 process- and Harvest Organization Infl uence on Business and ing companies and exporters, representing over 90 percent Marketing (table 4.8). This group of indicators measures how of all crab exported from Indonesia to the U.S. market. the local fi shing communities participate in the management Currently, APRI, along with Sustainable Fisheries Partnership process. (SFP) have a joint Fisheries Improvement Project (FIP) that has been partly implemented in order to address the defi - Both Icelandic lobster fi shery and Indonesia BSC fi shery ciencies identifi ed by the MSC Pre-Assessment report and received higher scores than the benchmark in Participation improve the fi shery management to meet MSC standards. in Harvester Organizations and Harvester Organization APRI has been actively doing collective action in trying to

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 42 CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS

FIGURE 4.8: Harvest Rights FIGURE 4.10: Collective Action

Proportion of harvest managed Participation in harvester with rights-based organizations management 5 5 4 4 3 Exclusivity 3 Transferability 2 index 2 index 1 1 0 0 Harvester organization Harvester organization influence on business & influence on fishery marketing management & access Flexibility index Security index Indonesia BSC Philippines BSC Iceland lobster Source: Authors. Durability index Indonesia BSC Philippines BSC Iceland lobster Source: Authors.

FIGURE 4.9: Summary of Harvest Rights FIGURE 4.11: Summary of Collective Actions

5.0 5.0 4.3 4.0 3.7 4.0 4.0 2.7 3.0 3.0 1.7 2.0 1.3 2.0 1.0 1.0 0.0 0.0 Indonesia BSC Philippines BSC Icelandic lobster Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. Source: Authors.

TABLE 4.8: Score System for Collective Action

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Participation in Harvester 5: Virtually all Proportion of harvest where the primary har- Organizations 4: 71–95% vesters are organized into associations. 3: 36–70% 2: 5–35% 1: Virtually none Harvester Organization 5: Harvesters effectively determine allocation of resources Subjective measure of how much infl uence Infl uence on Fishery 4: Harvesters have signifi cant infl uence in determining allocation harvesting organizations have, either directly or Management and Access 3: Harvesters are politically active but not controlling through political collective action, on management and access to the fi shery. 2: Social or informal monitoring participation and allocation 1: No active effort or capacity to infl uence management Harvester Organization 5: Harvesting organizations cooperatively determine marketing and Subjective measure of how much infl uence Infl uence on Business and operational details harvesting organizations have, either directly or Marketing 4: Extensive joint marketing through political collective action, on manage- 3: Large subgroups facilitating marketing; joint purchasing ment and access to the fi shery. 2: Small subgroups cooperating in purchasing or operations 1: No active effort or capacity to infl uence business operations Source: Anderson and Anderson 2010.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS 43

FIGURE 4.12: Summary of Property Rights rights. Without institutions for well-defi ned rights, responsibility and participation improvements in other areas can be 5.0 4.3 4.2 4.0 undermined. 4.0 3.7 4.3 MANAGEMENT 3.0 2.5 2.7 Management consists of three dimensions, Management 2.0 1.7 1.7 1.3 Inputs, Data Management, and Participation. 1.0 4.3.1 Inputs 0.0 Management Inputs is the average of fi ve indicators, in- access rights harvest rights collective action cluding Management Expenditure to Value of Harvest, Indonesia BSC Philippines BSC Icelandic Lobster Management Employees to Value of Harvest, Management Source: Authors. Employees per Permit Holder, Research as a Proportion of Fisheries Management Budget, and Level of Subsidies (table 4.9). infl uence the government and market to improve the sustainability of the fi shery. The Icelandic lobster fi shery obtained full scores for all the management input indicators. Scores correspond to govern- In the Philippines, the local communities have virtually no ment commitments. However, there may be decreasing infl uence in the management process, indicated by the low returns to scale, so there may be a nonlinear relationship scores in fi gure 4.11. Because the fi shing ground for the with use of public resources (fi gure 4.13). The Philippines BSC fi sheries is within the municipal waters (15 km from has virtually no management, subsidies, or research on BSC the shoreline), the jurisdiction is under the local government fi sheries, therefore it received high scores for Management units (LGUs). There was no management system in place Expenditure to Value of Harvest and Level of Subsidies, and in most areas, leading weak rights and low participation. low scores for everything else. Indonesia expert did not score Management and regulation of the fi sheries are therefore because it was diffi cult to calculate the number of employ- dependent heavily on the initiative of the LGU’s Elected ees, and expenditures related to the BSC fi shery manage- Administrators and law-makers. Awareness of marine re- ment. However, because the government does not allocate sources protection is very high, particularly on coastal habi- lots of resources on subsidies and research for BSC fi shery tats and lesser on fi sheries. Recently, the Philippines govern- in Indonesia, it is possible to score Research as a Proportion ment has drafted fi shery management plan for BSC fi shery. of Fisheries Management Budget and Level of Subsidies as 5 based on the score system. In summary, both the Icelandic lobster fi shery and the Indonesian BSC fi shery are characterized by a high level of In summary, the Icelandic lobster fi shery has correct stakeholder involvement, with average scores of 3.7 and 4.3, magnitude of management inputs (fi gure 4.14). Both the respectively. However, they both need to improve their infl u- Philippines BSC fi shery and Indonesia BSC fi shery need to ence on fi shery management and access. The Philippines strengthen management inputs. Some positive progress has BSC fi shery needs to substantially strengthen their stake- been made by the Philippines government by drafting and holders’ participation in every aspect. consulting their fi shery management plan. In the future, the score will be changed. 4.2.3.1 Comments The Collective Actions indicators are clear and easy to 4.3.1.1 Comments score. They adequately refl ect the degree of stake- The main concern is whether this group of indicators holders’ participation. is informative and useful enough given the diffi culty in accessing the data. Research as a Proportion of 4.2.4 Summary Fisheries Management Budget can be important In summary, Icelandic lobster adopted an Individual because that can provide some basic data about the Transferable Quota (ITQ) system and therefore has strong fi sheries and in turn help with policy and decision property rights, refl ected in strong Access Rights and Harvest making. Level of Subsidies is important because it will Rights (fi gure 4.12). Both the Philippines and Indonesia BSC directly affect the harvest cost of fi shing and exploita- have considerable opportunity to strengthen their property tion level and thus sustainability.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 44 CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS

TABLE 4.9: Score System for Management Inputs

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Management Expenditure to 5: Less than 5% of ex-vessel value This measure divides the budget (million $) for fi sheries Value of Harvest 4: 5–25% management by the ex-vessel value of the harvest. 3: 26–50% 2: 51–100% 1: More than the value of harvest Management Employees to 5: More than 0.35 per million Public sector fi shery management employee FTEs devoted Value of Harvest 4: 0.26–0.35 to managing the fi shery divided by the ex-vessel value of 3: 0.16–0.25 the harvest. 2: 0.01–0.15 1: 0 Management Employees per 5: 4 or more per 100 permit holders Fishery management FTE employees divided by the num- Permit Holder 4: 3 per 100 permit holders ber of fi shing units (in 100s) (vessels or permit holders). 3: 2 per 100 permit holders 2: 1 per 100 permit holders 1: 0 Research as a Proportion 5: Over 20% Research expenditures divided by total fi sheries manage- of Fisheries Management 4: 11–20% ment budget. Budget 3: 6–10% 2: 0.5–5% 1: Virtually none Level of Subsidies 5: Near zero (less than 2.5%) Measure the annual value of all subsidies as a proportion 4: 2.5–7.5% of the value of the fi shery. 3: 7.6–12.5% 2: 12.6–20% 1: More than 20% Source: Anderson and Anderson 2010.

FIGURE 4.13: Management Inputs FIGURE 4.14: Summary of Management Inputs

Management 5.0 expenditure to 5.0 value of harvest 5 4.0 3.7 4 3 3.0 2.6 Management Level of 2 employees to Subsidies 1 value of harvest 2.0 0 1.0

Research as a Management 0.0 proportion of fisheries employees per Indonesia BSC Philippines BSC Icelandic lobster management budget permit holder Source: Authors. Indonesia BSC Philippines BSC Iceland lobster Source: Authors. Management Employees to Value of Harvest and Management Employees per Permit Holder can be tricky and diffi cult to score, especially for a single fi sh- To make it easier to score for Management Expenditure ery when the management employees have to deal to Value of Harvest, it is suggested to change the with multiple species. It is suggested to delete these defi nition to “Government, industry and aid agency two indicators (see Appendix B). expenditures on fi shery management activities includ- Additionally, enforcement has been a common issue ing research, enforcement, and management capacity for many developing countries’ fi sheries. They often development (but not infrastructure)” (see Appendix B). have rules but lack enforcement. Therefore, it is

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS 45

suggested to add Enforcement Capacity as one indica- FIGURE 4.15: Data Management tor in Management Input (see Appendix B). 5 For many ﬁ shery species, it is hard to avoid the transboundary issue. Whether there is an effective 4

regional coordination will affect the success of one 3 country’s ﬁ shery management. It is suggested to add Management Jurisdiction to capture this issue (see 2 Appendix B). 1

4.3.2 Data Management 0 data availability data analysis The dimension of Data Management is composed of Data Availability and Data Analysis (table 4.10). For many coun- Indonesia BSC Philippines BSC Iceland lobster tries, lack of data collection and analysis is common, which Source: Authors. directly affects the effectiveness of management. The idea of including these indicators is to promote the proper data collection system. The Icelandic lobster fi shery industry has put fi nancial support for the fi shery management, accounting over half of the According to the FPIs evaluation, the Icelandic lobster fi shery fi shery management budget, but the people who are active collects and fully utilizes data (fi gure 4.15). The Indonesia BSC in management only spend less than 5 days in stakeholder fi shery has some data, but not enough analysis for decision meetings per year (fi gure 4.16). Both Indonesia and the making. The Philippines BSC fi shery has very limited data Philippines BSC industries give virtually no support for fi shery from the government. However, universities have studied management. The participation of the stakeholder meetings the BSC population and have some measurement of MSY, in Indonesia BSC fi shery management is slightly higher than biological parameters, and even genetic stocks. There is still that in the Philippines but still less than one day a month. substantial room for improvement in this category. 4.3.3.1 Comment 4.3.2.1 Comment These two data indicators are simple, clear, and easy These two data indicators are simple, clear, and easy to score. to score. 4.3.4 Summary 4.3.3 Participation In summary, the Icelandic lobster fi shery has consider- The Participation dimension is the average of Days in able management inputs and data collection, but with Stakeholder Meetings and Industry Financial Support for limited participation (fi gure 4.17). Management inputs for Management. The score system is illustrated in table 4.11. Philippines BSC fi shery are minimal. Both data collection and

TABLE 4.10: Score System for Data Management

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Data Availability 5: Regular stock assessment and economic data available 4: Landings and price data available 3: Only landing data available 2: Only boat registration and license data available 1: No data is tracked Data Analysis 5: Biological and economic data used in prospective analysis of management 4: Biological data dominate simple prospective analysis 3: Biological or economic data are used to track performance retrospectively 2: Data are used inconsistently or irregularly 1: No data analysis conducted in management process Source: Anderson and Anderson 2010.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 46 CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS

TABLE 4.11: Score System for Participation

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Days in Stakeholder Meetings 5: More than 24 days per year Days in stakeholder meetings per year spent 4: 12–24 by a participant in the fi shery who is active in 3: 6–11 management. 2: 1–5 1: None Industry Financial Support for 5: Virtually all Proportion of the fi shery management budget Management 4: 51–95% paid for by the fi shing sector. 3: 6–50% 2: 1–5% 1: None Source: Anderson and Anderson 2010.

FIGURE 4.16: Participation called Community which includes Leadership and Social Cohesion into the FPIs (see 5.0 Appendix B). 4.0 Gender is another dimension that has not been in- 3.0 cluded. Women can play an important role in different aspects, but the role of women as pure work labor 2.0 will be different from the role of women as business 1.0 managers or policy makers. Therefore, it is suggested to add a group of indicators related to gender by ex- 0.0 days in stakeholder meetings industry financial support for amining the role and degree of women’s inﬂ uence in management harvest, post-harvest, and management. Indonesia BSC Philippines BSC Iceland lobster With new indicators, it is suggested to restruc- Source: Authors. ture the indicators by adding a new component Co-Management separate from Management. participation in the Philippines and Indonesia BSC ﬁ sheries are Co-Management will include Collective Action, very low. Participation, Community, and Gender (see Appendix B). Under Management, it is also suggested to add 4.3.4.1 Comments another dimension on Management Methods, includ- Leadership and social cohesion were left out in ing MPAs and Sanctuaries, Spatial Management, and the FPIs. Considering the importance of these two Fishing Mortality Limits, to measure whether differ- aspects, it is suggested to add a new dimension, ent management methods are in place to protect the

FIGURE 4.17: Summary of Management

5.0 5.0 5.0

4.0 3.7 3.0 3.0 2.6 2.5

2.0 1. 51. 5 1. 5

1. 0

0.0 inputs data participation Indonesia BSC Philippines BSC Icelandic Lobster Source: Authors.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS 47

critical spawning area and period, spatial access rights, In summary, the Icelandic lobster fi shery just meets the and mortality control. See Appendix B for detailed benchmark. Both Indonesia and the Philippines BSC fi sheries defi nition and scale for each of them. perform below the benchmark, particularly the Philippines BSC fi shery has substantial opportunities for improvement 4.4 POST-HARVEST INPUTS in terms of price, information sharing, and export conditions (fi gure 4.19). The Post-Harvest Inputs component includes two dimensions, Market and Market Institutions and Infrastructure, to 4.4.1.1 Comments measure the economic and physical infrastructure availability This group of indicators is clearly identifi ed and easy for sustainable wealth creation. to score. They adequately refl ect the Post-Harvest inputs in each fi shery. 4.4.1 Market and Market Institution The ability to access competitive, free markets will give 4.4.2 Infrastructure buyers and sellers an unbiased and effi cient price. This is Good infrastructure is essential for successful business essential for participants to allocate resources effi ciently. as it can help reduce the production and transportation A well-established market with a transparent pricing sys- cost. The FPIs measure a few key aspects of infrastruc- tem will facilitate the success of this sector. Market and ture related to fi sheries business. Infrastructure Input is Market Institution is the average of Landings Pricing System, the average of International Shipping Service, Road Quality Availability of Ex-Vessel Price and Quantity Information, Index, Technology Adoption, Extension Service, Reliability Number of Buyers, Degree of Vertical Integration, Level of of Utilities/Electricity, and Access to Ice and Refrigeration Tariffs, and Level of Nontariff Barriers (table 4.12). (table 4.13).

Nontariff barriers are not a major factor in any of these three Iceland has good infrastructure to support the fi shery busi- fi sheries (fi gure 4.18). Iceland sells their lobster to the EU ness (fi gure 4.20). Indonesia BSC has relatively good inter- market with virtually no tariff, much lower than the 15 per- national shipping, ice access, and reliability of utilities, but cent tariff both Indonesia and the Philippines have to pay the road quality, extension service, and technology adop- when exporting to the United States. However, Icelandic lob- tion require substantial improvement. Regarding Extension sters are purchased by a small number of coordinated buy- Service, Indonesia expert scored this indicator as 1 because ers, less competitive than the BSC market. In Indonesia, the there was no extension service provided by the government. miniplant will follow wherever the boat lands and buy all the All the trainings are provided by the processors/exporters. crabs captured at the competitive beach prices with subtrac- The Philippines expert thought any kind of extension service tion of transportation cost. Because of the high demand, it counted, so this indicator scored 2. In Indonesia, ocean/air is diffi cult to get enough raw materials, the processing com- shipping is readily available. Cell phone is the main equip- panies are competing to get the products from miniplants. ment for the fi eld manager to get the raw material from the Most of the companies sent their fi eld staff to ensure they miniplant. Regarding the Reliability of Utilities/Electricity, have enough supply from miniplants. Regarding the vertical most of the processing facilities have generators as backup integration, the Indonesia BSC fi shery scored 3, the Icelandic for electricity outage in Indonesia. But in the Philippines, lobster fi shery scored 2 and the Philippines BSC fi shery only some picking plants and pasteurizing plants can afford scored 1. This is because most miniplants belong to the pro- large generators. With better Technology Adoption ability, cessor/exporter from the beginning. They were built and set more Reliable Utilities/Electricity and Ice Supply, Indonesia up to supply specifi c exporters/processors. Miniplants have is more prepared for international trade. Both Indonesia and been strengthened during the past several years and have the Philippines need to improve their road quality as this will become very important players in the crab business. Now affect their transportation cost and competitiveness in the most of the miniplants are operating independently and do business. not have any obligation to supply to any specifi c processing companies. The Availability of Ex-Vessel Price and Quantity In summary, the Icelandic lobster fi shery has the best infra- Information is still not transparent in both Indonesia and the structure to support (fi gure 4.21). The Indonesia BSC fi shery Philippines. The fi shermen rarely depend on the miniplant for just meets the benchmark criteria, and the Philippines BSC the price information. fi shery needs to improve the infrastructure for every dimen-

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 48 CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS

TABLE 4.12: Score System for Market and Market Institution

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Landings Pricing System 5: Virtually all Proportion of the harvest sold in a transparent 4: 71–95% daily competitive pricing mechanism, such as 3: 36–70% an auction or centralized ex-vessel to wholesale market. 2: 5–35% 1: Virtually none Availability of Ex-Vessel Price 5: Complete, accurate price and quantity information available to market and Quantity Information participants immediately 4: Reliable price and quantity information is available prior to the next market clearing 3: Price information is available but no timely quantity information 2: Price and quantity information are inaccurate, lagged, or available to only a few 1: No information available Number of Buyers 5: Highly competitive Typical number of buyers of ex-vessel product 4: 4–6 buyers in a given market. 3: 2–3 competing buyers 2: A small number of coordinating buyers 1: There is one buyer Degree of Vertical Integration 5: Virtually all Proportion of harvest where the primary 4: 71–95% harvester and primary processor/distributor are 3: 36–70% the same ﬁ rm. 2: 5–35% 1: Virtually none Level of Tariffs 5: Virtually none Based on quintile once data on an appropriate 4: 0.5–2.5% number of systems are collected. However, ini- 3: 2.6–5% tially tariff rate on key seafood exports relative to international average for food commodities. 2: 6–10% 1: Over 10% Level of Nontariff Barriers 5: Are not used to limit international trade Nontariff barriers include quantity restrictions 4: Have very limited impact on international trade (import quotas), regulatory restrictions, invest- 3: Act to impede some international trade ment restrictions, customs restrictions, and direct government intervention. 2: Act to impede a majority of potential international trade 1: Act to effectively impede a signiﬁ cant amount of international trade Source: Anderson and Anderson 2010.

FIGURE 4.18: Market and Market Institution

Landings pricing system 5 FIGURE 4.19: Summary of Market and Market 4 Institution Level of non- 3 Availability of ex-vessel price & quantity 5.0 tariff barriers 2 information 1 4.0 3.5 0 3.2 3.0 2.3 Level of Number of tariffs buyers 2.0

1.0 Degree of vertical integration 0.0 Indonesia BSC Philippines BSC Iceland lobster Indonesia BSC Philippines BSC Icelandic lobster Source: Authors. Source: Authors.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS 49

TABLE 4.13: Score System for Infrastructure

MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION International Shipping 5: Ocean/Air shipping services are readily available at lower than average rates Average of the two measures (one for Service 4: Ocean/Air shipping services are readily available at average rates ocean shipping and another one for air 3: Ocean/Air shipping services are readily available at higher than average rates shipping) on the left. 2: Ocean/Air shipping services are available but irregular 1: International shipping is not available at reasonable rates Road Quality Index 5: High-quality paved roads and extensive highways Mile-weighted average road quality 4: Primarily paved two-lane roads and moderate highway between the fi shery’s primary port and 3: Primarily paved two-lane roads and minimal highway its major consumption center (or export shipping port for exported product). 2: Paved two-lane roads and well-graded gravel roads Score according to the left. 1: Poorly maintained gravel or dirt roads Technology Adoption 5: Cell phones/fi sh fi nders/computers/processing/production technology are readily available 4: Cell phones/fi sh fi nders, and so forth, are common, but some other technology is not always available 3: Cell phones/fi sh fi nders, and so forth, are common, but some other technology is diffi cult to obtain 2: Cell phones are common, but most other technology is prohibitive 1: Very little advanced technology is accessible for the industry Extension Service 5: Broad extension service with fi eld offi ces and close linkage with research community 4: Extension service with moderate fi eld coverage and adequate linkage with the research community 3: Extension service, but with weak links to the research community 2: Minimal, poorly supported extension service 1: No extension service Reliability of Utilities/ 5: Electricity readily available with rare outages Electricity 4: Electricity readily available with less than six short outages per year 3: Electricity readily available with less than two outages per month 2: Electricity readily available with more than two outages per month 1: Electricity is not available except through generators Access to Ice and 5: Ice is readily available in various forms Refrigeration 4: Ice is readily available in various forms with occasional shortages 3: Ice is available in limited quantity/form (e.g., block only) 2: Ice is available in very limited quantity/form 1: Ice is unavailable Source: Anderson and Anderson 2010.

sion, including the road, ice supply, electricity, and shipping hard to achieve for many developing countries. It is services. suggested not to use number of outage as the criteria. The suggested scale will be more vague but easy to 4.4.2.1 Comments understand and score, such as 5: Reliable electrical Road Quality Index: For archipelagic countries, grid provides power in sufﬁ cient quantity to prevent domestic and interisland shipping should also be product loss; 4: Processors rely on grid, but maintain considered. It is suggested to change the indicator to backup generators; 3: Supply chains rely on own Transportation Quality Index to capture both road and generation capacity; 2: Supply chain sometimes loses other types of transportation (see Appendix B). product due to condition or irregular fuel supply for Extension Service: It is suggested to add “private sec- generators; 1: Reliable generators or fuel supply not tor initiated extension services” into the explanation available (see Appendix B). (see Appendix B). Access to Ice and Refrigeration: This indicator can add Reliability of Utilities/Electricity: For many develop- affordability of ice for ﬁ shermen and the relative cost ing countries, electricity outage is common. The of ice compared to the selling price to get a better benchmark is more likely for developed countries, and sense about the ice use situation and understand why

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 50 CHAPTER 4 — FPIs’ APPLICATION ON BSC FISHERIES—INPUTS RESULTS

FIGURE 4.20: Infrastructure FIGURE 4.21: Summary of Infrastructure

International 5.0 4.7 shipping service 5 4.0 3.5 4 3.0 Access to ice 3 Road quality 2.3 & refrigeration index 2 2.0 1 0 1.0

0.0 Reliability of Technology Indonesia BSC Philippines BSC Icelandic lobster utilities/electricity adoption Source: Authors.

Extension service The Indonesia BSC fi shery has better post-harvest inputs Indonesia BSC Philippines BSC Iceland lobster but fewer inputs on the management and property rights Source: Authors. aspects besides a relatively weak macro environment. The Philippines BSC fi shery has a slightly better macro environment but limited inputs on every other aspects, including it is not always available or used. It is suggested to re- vise the indicators to refl ect the affordability, such as property rights, management, and post-harvest inputs. 5: Ice is available in various forms and in suffi cient capacity to support fresh icing of all fi sh that needs to be FIGURE 4.22: Summary of Post-Harvest iced; 4: Ice is available in various forms, but quantity limits prevent applying to entire catch throughout sup- 5.0 4.7 ply chain; 3: Ice is available in limited form and quan- 4.0 3.5 3.5 tity, and thus applied only to most valuable portions of 3.2 3.0 catch; 2: Ice is available but capacity constrained; ice 2.3 2.3 often reused, or used through melting stage; 1: Ice 2.0 quantities are extremely limited (see Appendix B). 1.0 4.4.3 Summary 0.0 In summary, the Post-Harvest Inputs for the Icelandic lobster markets & market infrastructure fi shery are characterized as adequate infrastructure, trans- institutions parent price and quantity information, limited competition on Indonesia BSC Philippines BSC Icelandic lobster purchasing, and relative low vertical integration (fi gure 4.22). Source: Authors. The Indonesia BSC fi shery is characterized as high tariff, lack of price and quantity information, relatively good ice and energy supply, but received low scores on road and extension TABLE 4.14: Summary of FPIs’ Output Results service. The Philippines BSC fi shery is characterized as high INDONESIA PHILIPPINES ICELANDIC tariff, lack of price and quantity information, less competitive COMPONENT BSC BSC LOBSTER purchasing market, primary vertical integration, inadequate FPIs Macro Factors 2.9 3.3 4.9 ice and energy supply, inadequate road, shipping services, Input Property 2.9 1.6 4.2 and extension services. Rights and Responsibility When averaging the score for each of the components dis- Management 2.6 1.9 4.3 cussed above, a summary of FPIs Input Factor results can be Inputs obtained (table 4.14), which provides a picture of the input Post-Harvest 3.3 2.3 4.1 factors. In all, the Icelandic lobster fi shery has high inputs. Inputs Source: Authors.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 5 — CONCLUSIONS 51

Chapter 5: CONCLUSIONS

5.1 REGARDING THE STUDIED FISHERIES opportunity to improve. All the rest have substantial room for The results of FPIs for the Indonesia BSC and the Philippines improvement, including the Harvest Sector, Boat Owners/ BSC fi sheries, along with the comparison with Icelandic lobster Captains, Processing and Support Industry and Processing fi shery give a clear picture regarding the governance, social, Workers. The Fish Stock and Environmental Performance economic, and ecological situation in these fi sheries. Three received the lowest score and is in urgent need of attention critical benchmarks have been presented. One benchmark is to reverse the situation. the score of 3.5. Any score under 3.5 indicates a substantial Figure 5.2 summarizes the average indictor scores for the improvement potential. One benchmark is the score of 2. Any wealth input factors. Icelandic lobster fi shery received high score under 2 indicates a warning sign. Emergent actions need scores for most of the categories, including environmental to be taken. The third benchmark is another fi shery, such as performance, good governance, good infrastructure, well- the Icelandic lobster fi shery in this case. The following summa- established data collection system, and considerable fi shery rizes the results for both output indicators and input indicators. management inputs (expenditures and personnel). However, Figure 5.1 illustrates the average scores for the wealth indi- the participation of the fi shing industry in fi shery manage- cators. The Icelandic lobster fi shery received high scores ment is low and market institution is around the edge. for all the categories except for the Processing Workers. As The Indonesia BSC fi shery does not face exceptional risk analyzed above, it is because of the high proportion of non- from exogenous environmental shocks. The infrastructure resident workers who have relatively lower wages and lower and market institution are marginally acceptable. However, social standings. the majority of the input factors may create signifi cant con- The Indonesia BSC fi shery received relatively high scores straints to enabling economic, ecological, and community in the Processing and Support Industry and Market, margin- sustainability. The macro factors, such as country-level gov- ally acceptable scores in the Boat Owners/Captains, Fishing ernance, the economic conditions, and environmental perfor- Crews, Processing Owners/Managers, Processing Workers, mance scored poorly and may undermine the long-term suc- and Risk Exposure. The Harvest Sector Asset Performance cess of the BSC industry. Access rights and harvest rights, and Post-Harvest Asset Performance have room for substan- such as individual or community quotas or catch shares, are tial improvement. The scores for Harvest Performance and not formally defi ned. The data collection system is not set Fish Stock Health and Environmental Performance are within up. All these contribute to limiting the accomplishment of the the warning zone, suggesting an urgent need to improve fi sh triple bottom line. stock health and harvest performance. In the long run, sus- The Philippines BSC fi shery has relatively acceptable envi- tainability of the fi shery is at risk, and high scores for other ronmental performance and exogenous environmental shock categories will be undermined. is not an inordinate risk. Most of the other enabling factor The Philippines BSC fi shery showed relative better scores suggest weak governance and economic conditions, risk exposure, satisfactory performance for Processing and under investment in access rights and harvest rights, Owners/Managers and Post-Harvest Assets. The Market data collection and analysis, the market institutions, and the Performance, Crew and Boat Owners/Captains have an basic infrastructure.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 52 CHAPTER 5 — CONCLUSIONS

FIGURE 5.1: Summary of FPIs’ Output—Measuring Wealth

Fish stock health & environmental performance Processing 5 Harvest workers 4 performance 3 Processing owners & Harvest sector asset managers 2 performance

1 0 Post-harvest asset performance Risk exposure

Owners, permit Processing & support holders & captains industry performance Market Crew performance 3.5 Benchmark Indonesia BSC Philippines BSC Icelandic lobster Warning zone Source: Authors.

FIGURE 5.2: Summary of FPIs’ Input—Enabling Wealth

Country level environmental performance 5 Exogenous Infrastructure environmental 4 factors Markets & market 3 Country level institutions 2 governance 1 Country level Participation 0 economic condition

Data Access rights

Inputs Harvest rights Collective action

3.5 Benchmark Indonesia BSC

Philippines BSC Icelandic lobster Source: Authors.

5.2 REGARDING THE FISHERY PERFORMANCE and economic status of the fi sheries management systems. INDICATORS (FPIs) FPIs are useful and powerful tools for fi shery project moni- The application of the FPIs to the Indonesia and Philippine toring and evaluation. Because the cost of applying this is BSC fi sheries and the Icelandic lobster fi sheries was re- relatively low, only a few local experts who know the fi shery markably successful. Furthermore, the feedback from the well and who understand some basic economics and statis- research workshop in May 2011 and the decision meeting tics are needed to fi ll out the FPIs survey form. in November 2011 were very positive and encouraging. FPIs are well organized and easy to apply. The rapid assessment Based on the case study and comments received from the result can give a clear indicator about the ecological, social, decision meeting, a few indicators need to be modifi ed,

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) CHAPTER 5 — CONCLUSIONS 53

several scalings of the indicators need to be improved, and The Bank is moving to enhance its activity related to the some omissions need to be added, particularly on the eco- oceans, and the FPIs will have great value in identifying key logical output indicators and management and comanage- target fi sheries and measuring progress. At maturity, the 6 ment input indicators. These have been revised6 7 and the FPIs FPIs could be implemented and accessed via a dashboard are ready to be scaled up. containing hundreds of fi sheries, with data collected at regular intervals to monitor sustainable wealth-creating fi sheries FPIs could serve as a tool to benchmark and monitor all the within and across management systems. The idea, logic, and fi shery projects in the World Bank. A detailed FPI assess- design of the indicators can help develop a broadened set ment for each targeted country will assist management de- that can be applied to codependent fi shery-aquaculture and cisions for all the target fi shery projects regardless of their aquaculture management systems. implementation status. For projects that are in the planning stage, the output will help identify the strengths and weak- Above all, the impact of these indicators is potentially trans- nesses of the fi sheries and thus enable the identifi cation formative. They will be effective levers to promote changes of evidence-based policy suggestions. For projects under and suggest what changes should be made to result in implementation, the output will help measure their effective- sustainable improvement in the fi shery, the economic condi- ness in improving fi shery performance. tions, and community status.

6 After the decision meeting, all of the above suggestions have been integrated into the FPIs’ survey sheets. A few case studies have been done since November 2011, including Uganda Nile perch and tilapia fi sheries, Gambia sole fi shery, Seychelles artisanal and semi-industrial fi sheries, and Ghana artisanal fi sheries.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52

APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL 55

Appendix A: FISHERY PERFORMANCE INDICATORS— MANUAL

FISHERY PERFORMANCE A.1.1.3 Percentage of Stocks Overfi shed RATIONALE: The percentage of stocks considered to be over- INDICATORS—OUTPUT fi shed refl ects the extent to which overfi shing has compro- mised the ability to generate wealth. Overfi shed stocks can- A.1. ECOLOGICALLY SUSTAINABLE FISHERIES not be harvested at a level that maximizes wealth until they A.1.1 Fish Stock Health and Environmental Performance are recovered.

A.1.1.1 Proportion of Harvest with a Third-Party PROPOSED MEASURE: Percentage of commercial stocks within Certiﬁ cation the management authority’s purview that are considered

RATIONALE: Fish stocks must be sustainable to generate sus- overfi shed, to be experiencing overfi shing, or in generally tainable returns and create wealth. Certifi cation also may be unknown stock status (whether actively managed or not): 5: essential for market access in developed countries. None overfi shed; 4:1~25 percent of stocks overfi shed; 3:26 to 50 percent overfi shed; 2: 51 to 75 percent overfi shed; 1: PROPOSED MEASURE: The proportion of harvest (quantity) harvest- 76 to 100 percent overfi shed. ed under one of the recognized third-party programs that certify ecological sustainability, such as the Marine Stewardship A.1.1.4 Nonlandings Mortality

Council (MSC) certifi cation. Individual stocks are weighted by RATIONALE: Nonlandings mortality is a direct measure of waste their proportion of landings value: 5: 76 to 100 percent of land- and potentially foregone wealth. This represents fi sh that ings are certifi ed; 4: 51 to 75 percent; 3: 26 to 50 percent; 2: possibly could have been sold, but were not. 1 to 25 percent; 1: No landings have third-party certifi cation. PROPOSED MEASURE: Ratio of estimated mortality of the as- A.1.1.2 Fish Stock Sustainability Index sessed target species from illegal harvest, by-catch, illegal

RATIONALE: Fish stocks must be sustainable to generate sus- discards, regulatory (legal) discards, and other nonlandings tainable returns and create wealth. waste to actual landings.

PROPOSED MEASURE: The Fish Stock Sustainability Index. The Bin boundaries can be established by quintile once data are FSSI is calculated by assigning a total score between 0 and collected on many ﬁ sheries. For the pilot studies, the bound- 4 to each priority ﬁ sh stock. Note: The number of priority aries will be coarsely established by the following table: 5: stocks will differ between management systems (The Fish Virtually none; 4: Less than 5 percent; 3: 5 to 10 percent; 2: Stock Sustainability Index 2009). 10 to 20 percent; 1: More than 20 percent.

For each of four components, each stock receives: 1) one point if the status of the stock is overfi shed or subject to A.2. HARVEST SECTOR PERFORMANCE overfi shing; 2) two points if management measures are A.2.1 Harvest Performance succeeding at preventing overfi shing; 3) three points if the stock biomass is above the level defi ned as overfi shed for A.2.1.1 Landings Level the stock; and 4) four points if the stock is rebuilt or is at its RATIONALE: Harvests at the level of maximum economic yield “optimal” level, within 80 percent of that required to achieve (MEY) refl ect management and/or harvest policies that re- maximum sustainable yield. The FSSI is computed by sum- fl ect economic goals. This is primarily a measure of the ex- ming the scores of the individual stocks. Points by quintile tent to which the fi shery is realizing its potential wealth over relative to the maximum possible score; with 5 points for time, ensuring the future reproductive value remains in the highest quintile. water.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 56 APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL

PROPOSED MEASURE: Average annual harvest over the last A.2.1.4 Ratio of Asset Value to Gross Earnings

3 years. Note: in practice there are very few estimates of RATIONALE: In addition to income, fi shery wealth can also accu- MEY, however where it has been calculated it is typically 5 mulate to the harvesters through the value of the assets that to 10 percent less than maximum sustainable yield (MSY). allow access and participation in the fi shery. The price of the Bin boundaries can be established by quintile once data are privilege or right to access a fi shery in the form of a vessel, collected on many fi sheries. For the pilot studies, the bound- license, lease, or quota, is a direct measure of the accumu- aries will be coarsely established by the following table: 5: lation of wealth from the fi shery to the harvest sector. The Harvest is less than MSY (stock is above MSY level) to in- price of access should refl ect the present discounted value crease profi t; 4: Harvest is approximately at MSY; 3: Harvest of the stream of profi ts arising from accessing the fi shery. reduced to promote recovery (stock is below MEY level); 2: This will include expectations for changes in management, Harvest is constraining stock recovery (stock is stable below harvest levels, prices, and harvesting costs. Gross earnings MEY level); 1: Harvest is causing overfi shing (stock is below is used to normalize the asset value to the levels of the fi sh- MEY and declining). ery. Gross earnings are a proxy for net earnings because cost data are rarely available, and this normalization is standard in A.2.1.2 Excess Capacity agricultural frameworks. For a fi xed level of gross earnings, if the fi shery’s income is highly uncertain, or costs are exces- RATIONALE: Excess capacity in the fi shing fl eet refl ects man- sive, then the ratio will be lower. agement that has either allowed the stock to decline so that a once-effi cient harvesting operation scale is now too PROPOSED MEASURE: Ratio of average price of access to the large, or that has induced a derby wherein harvesters have fi shery over the last 5 years to the average annual landings had to purchase ineffi ciently large vessels, or both. These value for a similarly scaled access right in the same period. ineffi ciently large vessels are more expensive to operate and Same business or same family sales are excluded, where maintain than necessary, reducing wealth in the harvesting they can be identifi ed. The highest bin boundary was estab- sector. lished by calculating the rate of return for large-scale farming operations in the United States, refl ecting a stable industry PROPOSED MEASURE: Estimated standardized vessels-days re- where key inputs are controlled by the business owner: 5: 10 quired to catch the maximum economic yield (MEY) com- or higher; 4: 7.5 to 10; 3: 5 to 7.5; 2: 2.5 to 5; 1: 2.5 or below. pared to the number of standardized vessel-days available. Days are considered not to be restricted by trip limits. Bin boundaries can be established by quintile once data are col- A.2.2 Asset Performance lected on many fi sheries. For the pilot studies, the bound- A.2.2.1 Total Revenue versus Historic High

aries will be coarsely established by the following table: 5: RATIONALE: If the fi shery is generating wealth, it is expected Within 5 percent of days required; 4: 105 to 120 or 90 to 95 that the total revenue for the fi shery is likely to increase to percent; 3: 120 to 150 percent or 75 to 90 percent; 2: 150 to some sustainable maximum range. Fisheries with declining 200 percent or 50 to 75 percent; 1: More than 200 percent, total revenue are likely to be in decline as a result of overfi sh- or less than 50 percent, of days required. ing, poor marketing, and distribution. In contrast, a fi shery managed for wealth creation should be harvested sustain- A.2.1.3 Season Length ably, and the sector is likely to orient toward market access and innovation. This should be observable in stable or in- RATIONALE: The length of the season refl ects the extent to which management allows harvesters to determine when to creasing total revenue.

harvest and how much. Choosing how and when to harvest PROPOSED MEASURE: The indicator is the ratio of total revenue allows harvesters to land when the prices are highest, or to to the average of the three highest total revenues in the past spread the harvest over a long period of time to stabilize ex- 10 years. 5: Above 95 percent; 4: 85 to 95 percent; 3: 70 to vessel prices at high levels, and allow processors to time 85 percent; 2: 50 to 70 percent; 1: Below 50 percent. product fl ow to implement effi cient methods. A.2.2.2 Asset (Permit, Quota, etc.) Value versus PROPOSED MEASURE: Ratio of number of days on which fi sh- Historic High ing occurs to the number of days the species is available RATIONALE: If the fi shery is generating wealth, it is expected in economically feasible quantities: 5: Virtually no regulatory that the value of the permit, quota, or other right to the fi sh- closures; 4: 91 to 99 percent; 3: 50 to 90 percent; 2: 11 to 50 ery is likely to increase to some sustainable maximum range. percent; 1: Less than 10 percent.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL 57

Fisheries with declining assets are likely to be in decline as fi shery and reinvested in capital. Second, it is a measure of a result of overfi shing, poor marketing, distribution, or other the potential wealth in the fi shery, as newer facilities will be constraints to innovation. In contrast, a fi shery managed for more effi cient and less costly to operate. Third, if harvesters wealth creation should be harvested sustainably; the sector are willing to invest in new capital, it refl ects their assess- is likely to orient toward improved marketing and innovation. ment that the fi shery will be profi table into the future. Finally, if new facilities are funded by private loans, newer facilities PROPOSED MEASURE: The indicator is the ratio of asset to the refl ect the capital markets’ assessment that the fi shery is average of the three highest asset values in the past 10 suffi ciently low risk to warrant investment. years. 5: Above 95 percent; 4: 85 to 95 percent; 3: 70 to 85 percent; 2: 50 to 70 percent; 1: Below 50 percent. PROPOSED MEASURE: Average age of the key durable harvesting capital unit (vessels, weirs): 5: Capital is new; 4: Capital A.2.2.3 Borrowing Rate Relative to Risk-Free Rate is older but well maintained, e.g., freshly painted; 3: Capital RATIONALE: The size of the premium the capital market de- is moderately well maintained; 2: Maintenance is poor; 1: mands to make loans in the fi shery is a direct measure of Serious concerns about seaworthiness or safety throughout fi nancial risk in the industry. It is locally normalized to refl ect fi shery. the overall riskiness in the region and the opportunities available to local capital. A.2.3 Risk PROPOSED MEASURE: Average ratio between the interest rate A.2.3.1 Annual Total Revenue Volatility on loans made in the industry to risk-free rates over the last RATIONALE: Annual total revenue volatility is primarily a mea- 3 years. Bin boundaries are based on the ratio of consumer sure of the riskiness of the fi shery. When future harvests loan rates for different types of rates to the regional 10-year are variable, it is diffi cult to make investment decisions and risk-free rate (3.60 percent for U.S. T-bill; example ratios be- secure capital because future income streams are highly un- low): 5: Less than 1.75; cf. 30-year conforming mortgage; 4: certain. High landings volatility also presents an obstacle to Less than 2.5; cf. personal bank loan; 3: Less than 4; cf. good developing fi nal product markets in nonspecialty fi sheries, as credit card rates; 2: Less than 7; cf. bad credit card rates; 1: large processors and exporters prefer to deal with products Greater than 7; usury. for which they can develop long-term contracts.

A.2.2.4 Source of Capital PROPOSED MEASURE: Ratio of the standard deviation of the fi rst RATIONALE: Whether lending capital from a particular source differences of annual total revenue to the mean total revenue is even available is a direct measure of how the capital mar- over the last 10 years. Bin boundaries should be established ket assesses risk in the fi shery. If a certain type of lender or by quintile once data are collected on many fi sheries. Pilot investor is not willing to make capital available in the fi shery study boundaries were established by calculating the score at any price, it reveals the fi shery is much riskier than other for each country-fi sh category (fi nfi sh, shellfi sh, and crusta- available investments. This measure is less refi ned than the ceans only) in FishStat (FAO), then determining the quintile 7 relative rate, but much easier to obtain. values 8: 5: 0.14 or less; 4: 0.15 to 0.21; 3: 0.22 to 0.39; 2: 0.40 to 0.99; 1: 1 or greater. PROPOSED MEASURE: Points to be assigned based on the category of lenders or investors that is most typically used in the A.2.3.2 Annual Landings Volatility fi shery. Points assigned as follows: 5: Unsecured business RATIONALE: Annual landings volatility is primarily a measure of loans from banks/venture capital; 4: Secured business loans the riskiness of the fi shery. When future harvests are vari- from banks/public stock offering; 3: Loans from banks se- able, it is diffi cult to make investment decisions and secure cured by personal (not business) assets/government-subsi- capital because future income streams are highly uncertain. dized private lending/government-run loan programs/interna- High landings volatility also presents an obstacle to develop- tional aid agencies; 2: Microlending/family/community-based ing fi nal product markets in nonspecialty fi sheries, as large lending; 1: Mafi a/no capital available. processors and exporters prefer to deal with products for A.2.2.5 Functionality of Harvest Capital which they can develop long-term contracts.

RATIONALE: The functionality of the vessels and other capital used in harvesting (e.g., weirs, traps, docks/marinas, and ice production) reﬂ ects wealth in several ways. First, it is a di- 7 This approach uses more highly aggregated ﬁ sheries than are rect measure of wealth that has been accumulated from the likely to be used in case studies. This probably results in lower variance, and thus biases our bins toward lower scores.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 58 APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL

PROPOSED MEASURE: Ratio of the standard deviation of the fi rst future income streams are highly uncertain. High price volatil- differences of annual total landings sold to the mean landings ity may refl ect obstacles to developing fi nal product markets over the last 10 years. Bin boundaries should be established in nonspecialty fi sheries, as large processors and exporters by quintile once data are collected on many fi sheries. Pilot prefer to deal with products for which they can develop long- study boundaries were established by calculating the score term contracts. for each country-fi sh category (fi nfi sh, shellfi sh and crusta- PROPOSED MEASURE: Ratio of the standard deviation of the ceans only) in FishStat (FAO), then determining the quintile fi rst differences of annual ex-vessel price to the mean price 8

values 9: 5: 0.14 or less; 4: 0.15 to 0.21; 3: 0.22 to 0.39; 2: over the last 10 years. Bin boundaries should be established 0.40 to 0.99; 1: 1 or greater. by quintile once data are collected on many fi sheries. Pilot A.2.3.3 Intra-Annual Landings Volatility study boundaries were established by calculating the score for each country-fi sh category (fi nfi sh, shellfi sh, and crusta- RATIONALE: High-frequency (weekly or monthly, as available) landings volatility is primarily a measure of the potential for ceans only) in FishStat (FAO), then determining the quintile 10 wealth generation in the fi shery. High volatility may refl ect a values 11: 5: 0.12 or less; 4: 0.13 to 0.19; 3: 0.20 to 0.30; 2: seasonality of the availability of the fi sh for harvest, or man- 0.31 to 0.84; 1: 0.85 or greater. agement that limits the harvest season directly, or induces A.2.3.5 Intra-Annual Price Volatility a derby. Spikes in landings during certain parts of the year RATIONALE: Intra-annual price volatility complements intra- hinder wealth creation in several ways. First, concentrat- annual harvest volatility to capture the wealth generation ing landings in a short period spikes supply and often sup- potential in the fi shery. Price changes arise from: 1) shifts presses ex-vessel prices. Second, processing capacity must in demand stemming from seasonal changes in tastes (e.g., be established to handle the spikes, and if it is not applied traditional holiday fi sh dishes) or 2) changes in supply stem- to other fi sheries, it will be underutilized and costly per unit ming from the seasonal availability of fi sh or management- processed. Third, spikes in processing volume often compro- induced periods of high effort. If price volatility is high, un- mise the yield and quality of the processed product. Finally, constrained harvesters could shift landings from a period of intra-annual volatility can make it diffi cult for processors to low price to a period of higher price and increase fi shery rent. make forward contracts for their products; thus they receive Periods of high landings at low prices are associated with lower prices. fi shing derbies and the problems associated with high intra- PROPOSED MEASURE: Ratio of the standard deviation of the annual landings volatility. weekly/monthly total sold landings over the last 3 years to PROPOSED MEASURE: Ratio of the standard deviation of average the mean landings. Observations of zero landings are includ- monthly ex-vessel price over the last 3 years to the mean. ed if there is biological availability. If the biological season is Observations of zero landings are included if there is biologi- so short that there is not meaningful variation at a monthly cal availability. If the biological season is so short that there is 9

level, this measure can be NA. 10 Bin boundaries should be not meaningful variation at a monthly level, this measure can established by quintile once data are collected on many fi sh- be NA. Bin boundaries should be established by quintile once eries. Absent monthly landings data on a range of fi sheries, data are collected on many fi sheries. Absent monthly price the pilot study uses the same bins as for Annual Landings data on a range of fi sheries, the pilot study uses the same Volatility: 5: 0.14 or less; 4: 0.15 to 0.21; 3: 0.22 to 0.39; 2: 11

bins as for Annual Price Volatility 12: 5: 0.12 or less; 4: 0.13 to 0.40 to 0.99; 1: 1 or greater. 0.19; 3: 0.20 to 0.30; 2: 0.31 to 0.84; 1: 0.85 or greater. A.2.3.4 Annual Price Volatility A.2.3.6 Spatial Price Volatility RATIONALE: Annual price volatility complements annual har- RATIONALE: The extent to which ex-vessel price for the same vest volatility to capture the wealth generation potential in product varies across different ports within the fi shery re- the fi shery. When future revenues are variable, it is diffi cult fl ects market integration and opportunities for arbitrage to make investment decisions and secure capital because

10 This approach uses more highly aggregated fi sheries than are 8 This approach uses more highly aggregated fi sheries than are likely to be used in case studies. This probably results in lower likely to be used in case studies. This probably results in lower variance, and thus biases our bins toward lower scores. variance, and thus biases our bins toward lower scores. 11 This approach uses more highly aggregated fi sheries than are 9 More precisely prescribing the circumstances under which this likely to be used in case studies. This probably results in lower should be NA will be determined in the case studies. variance, and thus biases our bins toward lower scores.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL 59

across space within the ﬁ shery. A market that is well inte- following table: 5: More than 50 percent above the national grated spatially will have similar prices at different ports, average; 4: Between 10 and 50 percent above national aver- whereas isolated landings ports or ports that are differentially age; 3: Within 10 percent of the national average; 2: Between well connected to markets, and therefore posing greater ﬁ - 50 and 90 percent of the national average; 1: Less than half nancial risk, will have higher levels of spatial volatility. the national average.

PROPOSED MEASURE: Ratio of the standard deviation across A.2.4.2 Fishery Wages Compared to Nonfi shery Wages 12 data collection regions 13 of average annual ex-vessel price RATIONALE: This is a direct measure of fi shery-produced wealth to the mean. Measure should be averaged over last 3 years. accumulating to harvesters. Scaling wages by average local Bin boundaries should be established by quintile once data earnings refl ects whether the fi shery is able to attract the are collected on many fi sheries. Absent spatial price data on most talented workers in the community and is doing well at a range of fi sheries, the pilot study uses the same bins as 13 wealth generation relative to local standards. Here, the local for Annual Price Volatility 14: 5: 0.12 or less; 4: 0.13 to 0.19; 3: standard is the local wage, rather than national income lev- 0.20 to 0.30; 2: 0.31 to 0.84; 1: 0.85 or greater. els, which could pick up important rural/urban differences in A.2.3.7 Contestability and Legal Challenges heterogeneous countries.

RATIONALE: Legal challenges, protests, and contentious public PROPOSED MEASURE: Ratio of captain’s average daily wage hearings reﬂ ect discontent with the management system. It to average daily wage in region/country. Bin boundaries is an indicator of a lack of social acceptance and a source of can be established by quintile once data are collected on considerable risk. many ﬁ sheries. For the pilot studies, the boundaries will

PROPOSED MEASURE: 5: No signifi cant legal challenges, civil ac- be coarsely established by the following table: 5: More tions, or protests regarding the fi shery management system; than 50 percent above the national average; 4: Between 4: Minor legal challenges slow implementation; 3: Legal chal- 10 and 50 percent above national average; 3: Within 10 lenges, civil actions, or protests impede some management percent of the national average; 2: Between 50 and 90 measures; 2: Legal challenges, civil actions, or protests sus- percent of the national average; 1: Less than half the na- pend major elements of the management system; 1: Legal tional average. challenges, civil actions, or protests suspend or prohibit implementation of key management reforms and regulation. A.2.4.3 Educational Access RATIONALE: A community that is successfully using its resourc- A.2.4 Owners, Permit Holders, and Captains es will be able to provide high levels of education to its children, ensuring a step beyond resource dependence in the A.2.4.1 Earnings Compared to National Average Earnings next generation. If capture fi shing is an important part of this RATIONALE: This is a direct measure of fi shery-produced community, the boat owners or captains’ families will have wealth accumulating to owners of harvesting capital. Scaling access to education. earnings by national average earnings refl ects whether the fi shery is able to attract the most talented workers in the PROPOSED MEASURE: Measure is based on the highest level community and is doing well at wealth generation relative to of education that is politically, culturally, and fi nancially ac- national standards. cessible to families of harvesters, rather than the actual attainment levels of current harvesters. 5: Higher education is PROPOSED MEASURE: Ratio of annual earnings from fi shing per accessible; 4: High school–level education or advanced tech- owner to the national average earnings. In many cases, the nical training is accessible; 3: Middle school–level education captain is an owner of a vessel or permit, but in other cases, or simple technical training is accessible; 2: Basic literacy and captains are considered as crew. Bin boundaries can be es- arithmetic education is accessible; 1: Formal education is not tablished by percentile once a range of data is collected. For accessible. the pilot studies, the boundaries will be established by the A.2.4.4 Health Care Access

12 Data collection regions can either be fi shery relevant or politically RATIONALE: A community that is successfully using its resourc- relevant. Defi ning this generally allows local standards to estab- es will be able to provide high levels of health care, ensuring lish which is most important. a quality of life and decreasing health risk. If capture fi shing is 13 This approach uses more highly aggregated fi sheries than are an important part of this community, harvester’s families will likely to be used in case studies. This probably results in lower variance, and thus biases our bins toward lower scores. have access to the best available health care.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 60 APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL

PROPOSED MEASURE: Measure is based on the quality of health captain is an owner of a vessel or permit, but in other cases, care that is politically, culturally, and ﬁ nancially accessible to captains are considered as crew. Bin boundaries can be es- harvesters. 5: Global standard treatment for trauma and ill- tablished by percentile once a range of data are collected. For ness is accessible; 4: Licensed doctors provide trauma, sur- the pilot studies, the boundaries will be established by the gical, and drug treatments; 3: Nurses or medical practitioners following table: 5: More than 10 percent above the average; provide emergency and routine drug treatments; 2: First aid 4: Within 10 percent of the average; 3: Between 60 and 90 and basic drug (e.g., penicillin) treatment is accessible; 1: percent of the average; 2: Between 25 and 50 percent of the Science-based health care is not accessible. average; 1: Less than 25 percent of the average.

A.2.4.5 Social Standing of Boat Owners and Permit A.2.5.2 Fishery Wages Compared to Nonﬁ shery Wages

Holders RATIONALE: Crew wage is a direct measure of the fi shery RATIONALE: This is a proxy for income associated with boat and wealth that accumulates to crew. It is normalized by wages permit ownership, which may be much easier to collect than typical of the region to provide a relative standard of living actual income information. It also allows informal incorpora- afforded to crew, and also refl ect whether the fi shery is able tion of part-time harvesting jobs into other careers. Social to attract the most skilled workers. standing refl ects whether the fi shery is able to attract the PROPOSED MEASURE: Ratio of crew’s average daily wage to av- most talented workers in the community and is doing well at erage daily wage in region/country. Bin boundaries can be wealth generation relative to local standards. established by quintile once data are collected on many fi sh- PROPOSED MEASURE: 5: Among the most respected in the com- eries. For the pilot studies, the boundaries will be coarsely munity, comparable with civic and religious leaders and pro- established by the following table: 5: More than 10 percent fessionals, such as doctors and lawyers; 4: Comparable to above the average; 4: Within 10 percent of the average; 3: management and white-collar jobs; 3: Comparable to skilled Between 60 and 90 percent of the average; 2: Between 25 labor jobs; 2: Comparable to unskilled blue-collar or service and 50 percent of the average; 1: Less than 25 percent of jobs; 1: Among the least respected, such as slaves or inden- the average. tured servants. A.2.5.3 Educational Access

A.2.4.6 Proportion of Nonresident Employment RATIONALE: A community that is successfully using its re- RATIONALE: The ability of a country or region to improve itself sources will be able to provide high levels of education to using its resources depends on its ability to maintain local mul- its children, ensuring a step beyond resource dependence tipliers by keeping wealth within the region. A large portion of in the next generation. If capture fi shing is an important part nonresident harvesters refl ects that much of the harvesting of this community, harvesters’ families will have access to wealth will be leaving the region, failing to boost the regional education. economy. In developing regions, it may also refl ect an inability PROPOSED MEASURE: Measure is based on the highest level of of local resource users to generate suffi cient capital to harvest. education that is politically, culturally, and fi nancially accessi- PROPOSED MEASURE: 5: 95 to 100 percent local; 4: 71 to 95 per- ble to families of harvesters, rather than the actual attainment cent local; 3: 36 to 70 percent local; 2: 5 to 35 percent local; levels of current harvesters. 5: Higher education is accessible; 1: Virtually no local harvesters. 4: High school–level education or advanced technical training is accessible; 3: Middle school–level education or simple A.2.5 Crew technical training is accessible; 2: Basic literacy and arithmetic education is accessible; 1: Formal education is not accessible. A.2.5.1 Earnings Compared to National Average Earnings A.2.5.4 Health Care Access

RATIONALE: This is a direct measure of fi shery-produced wealth RATIONALE: A community that is successfully using its resourc- accumulating to crew. Scaling earnings by average national es will be able to provide high levels of health care, ensuring earnings refl ects whether the fi shery is able to attract the a quality of life and decreasing health risk. If capture fi shing is most talented workers in the community and is doing well at an important part of this community, harvesters’ families will wealth generation relative to local standards. have access to the best available health care.

PROPOSED MEASURE: Ratio of annual earnings from ﬁ shing per PROPOSED MEASURE: Measure is based on the quality of health owner to the national average earnings. In many cases, the care that is politically, culturally, and ﬁ nancially accessible to

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harvesters. 5: Global standard treatment for trauma and ill- believe the future to be worthwhile and that they will have ness is accessible; 4: Licensed doctors provide trauma, sur- the means to succeed to captain. gical, and drug treatments; 3: Nurses or medical practitioners PROPOSED MEASURE: Average years of experience of crew provide emergency and routine drug treatments; 2: First aid members. Bin boundaries can be established by quintile and basic drug (e.g., penicillin) treatment is accessible; 1: once data is collected on many fi sheries. For the pilot stud- Science-based health care is not accessible. ies, the boundaries will be coarsely established by the fol- A.2.5.5 Social Standing of Crew lowing table: 5: More than 20 years (skilled career crew); 4: 5 to 20 years; 3: 3 to 5 years; 2: 1 to 3 years; 1: 0 full years of RATIONALE: This is a proxy for income associated with crewing experience (mostly new crew each season). on fi shing boats, which may be much easier to collect than actual wage information. It also allows informal incorporation A.2.5.8 Age Structure of Harvesters of part-time harvesting jobs into other careers. Social stand- RATIONALE: A widely distributed age structure is an indirect ing refl ects whether the fi shery is able to attract the most tal- measure of several key variables. Broadly, it refl ects both ented workers in the community and is doing well at wealth that experienced older crew is willing to stay in the fi shery, generation relative to local standards. possibly as captains, and that younger crew members are

PROPOSED MEASURE: 5: Among the most respected in the com- willing to enter and that job opportunities in the fi shery are munity, comparable with civic and religious leaders and pro- available. First, it refl ects wealth accumulation to crew be- fessionals, such as doctors and lawyers; 4: Comparable to cause an experienced crew member will only stay in the management and white-collar jobs; 3: Comparable to skilled fi shery, and a new crew member will only enter, if the wage labor jobs; 2: Comparable to unskilled blue-collar or service is comparable to, or better than, other jobs he could obtain. jobs; 1: Among the least respected, such as slaves or inden- Second, crew longevity often means the crew are resident tured servants. in the community, and thus their earnings stay in the community and are spent locally, rather than being sent away A.2.5.6 Proportion of Nonresident Employment by itinerant or immigrant crews. Third, experienced crew de- RATIONALE: The ability of a country or region to improve itself velop specialized knowledge and refi ned skills that make har- using its resources depends on its ability to maintain local vesting more effi cient, so the fi shery is better able to reach multipliers by keeping wealth within the region. A large por- its wealth-generating potential. Finally, many crew will only tion of nonresident harvesters refl ects that much of the har- enter (young) or stay in (older) the fi shery if they believe the vesting wealth will be leaving the region, failing to boost the future to be worthwhile and that they will have the means to regional economy. In developing regions, it may also refl ect succeed to captain. an inability of local resource users to generate suffi cient capi- PROPOSED MEASURE: Age range of both captains and their tal to harvest. crews: 5: All working ages are well represented; 4: Slightly PROPOSED MEASURE: 5: 95 to 100 percent local; 4: 71 to 95 per- skewed toward younger or older; 3: Skewed toward younger cent local; 3: 36 to 70 percent local; 2: 5 to 35 percent local; or older; 2: Almost entirely younger or older, but working age; 1: Virtually no local crew. 1: Harvesters primarily younger or older than working age.

A.2.5.7 Crew Experience

RATIONALE: The rate at which the crew force turns over in the A.3. POST-HARVEST PERFORMANCE fi shery is an indirect measure of several key variables. First, it A.3.1 Market Performance refl ects wealth accumulation to crew because a crew mem- A.3.1.1 Ex-Vessel Price versus Historic High ber will only stay in the fi shery if the wage is comparable RATIONALE: If the fi shery is generating wealth, it is expected to, or better than, other jobs he could obtain. Second, crew that the orientation of the fi shery will shift from competing longevity often means they are resident in the community, for fi shery resource access, to market access and develop- and thus their earnings stay in the community and are spent ment. This should be observable in stable or increasing ex- locally, rather than being sent away by itinerant or immigrant vessel prices. crews. Third, experienced crew develop specialized knowledge and refi ned skills that make harvesting more effi cient, PROPOSED MEASURE: The indicator is the ratio of annual ex- so the fi shery is better able to reach its wealth-generating vessel prices to the average of the three highest annual ex- potential. Finally, many crew will stay in the fi shery if they vessel prices in the past 10 years. 5: Above 95 percent; 4:

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 62 APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL

85 to 95 percent; 3: 70 to 85 percent; 2: 50 to 70 percent; 1: global average for similar species: 5: More than twice global Below 50 percent. average; 4: 120 to 200 percent global average; 3: Within 20 percent of global average; 2: 50 to 80 percent of global aver- A.3.1.2 Final Market Use age; 1: Less than half global average. RATIONALE: The use of the fi shery product that is fi nally consumed refl ects the extent to which the fi shery, its process- A.3.1.6 Capacity of Firms to Export to the United States ing, and trade products are maximizing the potential value and European Union from the resource. RATIONALE: Companies with unreliable, low-quality, or unsecure supply chains may not be able to export to the United States PROPOSED MEASURE: 5: Premium human consumption (pre- or European Union without detention. The more freely a com- mium quality and products); 4: High-value human consump- pany can export to the United States or European Union, the tion; 3: Moderate-value human consumption; 2: Low-value broader the market. Access refl ects the success of quality human consumption; 1: Fish meal/animal feed/bait or control systems and breadth of market. It is also a measure of nonconsumptive. the fi nancial risk associated with international trade.

A.3.1.3 International Trade PROPOSED MEASURE: Percentage of a country’s fi sh exports RATIONALE: Maximizing the wealth generation potential of a that are approved for export to the United States or European fi shery requires delivering the product to the people who val- Union: 5: 95 to 100 percent approved; 4: 71 to 95 percent; ue it most. The level of exports refl ects how well the fi shery 3: 36 to 70 percent; 2: 5 to 35 percent; 1: Virtually none has maximized its wealth potential by accessing the market approved. that is willing to pay the most for the product globally. A.3.1.7 Ex-Vessel to Wholesale Marketing Margins PROPOSED MEASURE: Percentage of the fi shery’s value that is RATIONALE: The value added by processing and marketing at from fi sh exported for consumption: 5: 90 to 100 percent the wholesale level is a direct measure of wealth accumula- export; 4: 61 to 90 percent export; 3: 31 to 60 percent export; tion in the processing sector. When compared across prod- 2: 2 to 30 percent export; 1: Virtually no export. ucts, it can also represent how well a fi shery is realizing the A.3.1.4 Final Market Wealth maximum potential value from its landed fi sh.

RATIONALE: The income of the people who fi nally consume the PROPOSED MEASURE: Ratio of ex-vessel price to wholesale price fi shery product refl ects the extent to which the fi shery, its (adjusted for standard meat yield rates). To make the adjust- processing, and trade products are maximizing the poten- ment, divide the ex-vessel price by a standard processing tial value from the resource. Products that are being sold in yield, and divide by the wholesale price. Bin boundaries can wealthier countries are competing favorably, refl ecting high- be established by quintile once there is data on a range of quality, effective marketing, and are drawing wealth to the fi sheries. For the pilot studies, the following table can be fi shery. used: 5: Less than 0.3; 4: 0.3 to 0.5; 3: 0.5 to 0.8; 2: 0.8 to 0.95; 1: 0.95 or more. PROPOSED MEASURE: Average per capita GDP of the consumer of a fi shery’s fi nal product (pounds weighted by GDP).

(U.S. CIA’s rank of per capita GDP of all countries https:// A.3.2 Processing and Support Industry Performance www.cia.gov/library/publications/the-world-factbook/ A.3.2.1 Yield of Processed Product rankorder/2004rank.html): 5: Greater than US$35,000; 4: RATIONALE: Processing yield is a measure of the potential value Greater than US$25,000; 3: Greater than US$12,500; 2: of the landed fi sh that is being realized as wealth. Yield will Greater than US$5,000; 1: Less than US$5,000. likely be higher in more effi cient processing operations and those with a steady supply of landed product where there is A.3.1.5 Wholesale Price Relative to Similar Products time to take more care in processing and develop downline RATIONALE: The extent to which a country’s fi shing industry is customers who will pay a premium for reliable forward con- realizing its wealth generation potential is captured by com- tracts for premium products. They may also be able to turn paring the price that country receives with the price for sub- processing by-products (bones, blood) into revenue streams, stantially similar products in other countries. increasing value per landed weight.

PROPOSED MEASURE: Ratio of average price for ﬁ sh weight in PROPOSED MEASURE: Ratio of actual yield (pounds) to the maxi- wholesale (primary) ﬁ sh product from the base country, to a mum yield technically achievable. Bin boundaries can be

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL 63

established by quintile once there is data on a range of ﬁ sh- PROPOSED MEASURE: 5: All types of support are plentiful; 4: eries. For the pilot studies, the following table can be used: Some types of support are capacity constrained or unavail- 5: At feasible frontier; 4: Within 5 percent of the feasible fron- able; 3: Most types of support are capacity constrained or tier; 3: Within 10 percent; 2: Within 25 percent; 1: Less than unavailable; 2: Support limited to variable inputs; 1: Industry 75 percent of maximum yield. support is not locally available.

A.3.2.2 Capacity Utilization Rate A.3.2.5 Time to Repair RATIONALE: The amount of time required to make a major re- RATIONALE: In many fi sheries, a hindrance to wealth accumulation is an excess of capital, even in processing. This may pair, including especially that to acquire parts, refl ects how occur because the fi shery was once larger than it is now and well the fi shery is connected to the infrastructure necessary it is diffi cult to downsize plants, or because management or to maintain capital. Because this connectedness arises when biology forces landings to be concentrated in a short period there is a market for capital maintenance services, this cap- of time. Potential wealth is then consumed in maintaining a tures how well the fi shery is adopting new, effi cient technol- larger than necessary facility, or in tying up capital in a facility ogies that maximize wealth generation. It is also a measure that is not used to full capacity. In fi sheries where landings of riskiness of capital investment, as the ability to effectively and processing are concentrated within a short season, this maintain new capital is critical to extracting and preserving ineffi ciency may be compounded by using processing tech- its value. nology at a rate that does not support high yields when land- PROPOSED MEASURE: Days required to make a major mechani- ings are occurring. cal repair to a vessel (e.g., blown valve) that requires a replacement part, including wait time: 5: Less than a week; PROPOSED MEASURE: Days open for processing each year. Such days would not normally include religious or civic holidays, 4: One week to one month; 3: One month to less than a or weekly rest days. Bin boundaries can be established by season; 2: Full season; 1: Major repair not possible. quintile once there is data on a range of fi sheries. For the pilot studies, the following table can be used: 5: Virtually year- A.3.3 Post-Harvest Asset Performance round; 4: 75 to 95 percent of days; 3: 51 to 75 percent; 2: 21 A.3.3.1 Borrowing Rate Relative to Risk-Free Rate to 50 percent; 1: Less than 20 percent. RATIONALE: The size of the premium the capital market de- mands to make loans in the processing sector is a direct A.3.2.3 Product Improvement measure of fi nancial risk in the industry. It is locally normal- RATIONALE: One way processors can maximize the value of a ized to refl ect the overall riskiness in the region and the op- product is to market it with improvements that make it more portunities available to local capital. appealing to the consumer, who will then pay more for the product. Sale with a certifi cation, value-enhancing branding, PROPOSED MEASURE: Average ratio between the interest rate or value-added processing can increase wholesale and retail on loans made in the industry to risk-free rates over the last prices, and thus the wealth brought to the fi shery. 3 years. Bin boundaries are based on the ratio of consumer loan rates for different types of rates to the regional 10-year PROPOSED MEASURE: Proportion of harvest meat weight going risk-free rate (3.60 percent for U.S. T-bill; example ratios be- into certifi ed, branded, or value-added products: 5: 76 to 100 low): 5: Less than 1.75; cf. 30-year conforming mortgage; 4: percent of landings are enhanced; 4: 51 to 75 percent; 3: Less than 2.5; cf. personal bank loan; 3: Less than 4; cf. good 26 to 50 percent; 2: 1 to 25 percent; 1: No landings have credit card rates; 2: Less than 7; cf. bad credit card rates; 1: enhancements. Greater than 7; usury.

A.3.2.4 Regional Support Businesses A.3.3.2 Source of Capital

RATIONALE: The strength of the marine support sector is im- RATIONALE: Whether lending capital from a particular source is portant to realizing the maximum potential wealth through even available is a direct measure of how the capital market effi cient harvesting. Sales in the support sector are a di- assesses risk in the fi shery’s processing sector. If a certain rect measure of wealth accumulation in the support sector. type of lender or investor is not willing to make capital avail- However, they also refl ect the ability of the fi shery to access able in the processing sector at any price, it reveals that it is and adopt new technology to make harvesting more effi cient much riskier than other available investments. This measure and profi table, and the propensity for the fi shery to do so, as is less refi ned than the relative rate but is much easier to sales to harvesters support these businesses. obtain.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 64 APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL

PROPOSED MEASURE: Points to be assigned based on catego- A.3.4.2 Manager Wages Compared to Nonﬁ shery Wages

ry of lenders or investors that is most typically used in the RATIONALE: The processing owner or manager wage is a direct processing sector. Points assigned as follows: 5: Unsecured measure of fi shery wealth that accumulates to processing business loans from banks/venture capital; 4: Secured busi- workers. It is normalized by wages typical of the region to ness loans from banks/public stock offering; 3: Loans from provide an indicator of the relative standard of living afforded banks secured by personal (not business) assets/govern- to managers, and also refl ect whether the industry is able to ment-subsidized private lending/government-run loan pro- attract the most skilled managers. grams/international aid agencies; 2: Microlending/family/ PROPOSED MEASURE: Ratio of managers’ average daily wage to community-based lending; 1: Mafi a/no capital available. average daily wage in region. Bin boundaries can be estab- A.3.3.3 Age of Facilities lished by quintile once data are collected on many fi sheries.

RATIONALE: The age of the facilities used in processing har- For the pilot studies, the boundaries will be coarsely estab- vests, primarily processing plants and storage facilities, re- lished by the following table: 5: More than 50 percent above fl ects several dimensions of fi shery wealth. First, it is a di- the national average; 4: Between 10 and 50 percent above rect measure of wealth that has been accumulated from the national average; 3: Within 10 percent of the national aver- fi shery and reinvested in capital. Second, it is a measure of age; 2: Between 50 and 90 percent of the national average; the potential wealth in the fi shery, as newer facilities will be 1: Less than half the national average. more effi cient and less costly to operate. Third, if processors are willing to invest in new capital, it refl ects their assess- A.3.4.3 Educational Access

ment that the fi shery will be profi table into the future. Finally, RATIONALE: A community that is successfully using its re- if new facilities are funded by private loans, newer facilities sources will be able to provide high levels of education to refl ect the capital market’s assessment that the fi shery is its children, ensuring a step beyond resource dependence in suffi ciently low risk to warrant investment. the next generation. If processing is an important part of this community, processing owners’ families will have access to PROPOSED MEASURE: Average age of the key durable processing education. capital unit (plants, catcher-processor vessels): 5: Less than 7

years; ﬁ rst quarter of expected life; 4: 7 to 15 years; second PROPOSED MEASURE: Measure is based on the highest level quarter of expected life; 3: 15 to 20 years; third quarter of ex- of education that is politically, culturally, and ﬁ nancially ac- pected life; 2: 20 to 25 years; fourth quarter of expected life; cessible to families of harvesters, rather than the actual at- 1: Greater than 25 years; exceeding expected life. tainment levels of current harvesters. 5: Higher education is accessible; 4: High school–level education or advanced tech- A.3.4 Processing Owners and Managers nical training is accessible; 3: Middle school–level education A.3.4.1 Earnings Compared to National Average Earnings or simple technical training is accessible; 2: Basic literacy and

RATIONALE: This is a direct measure of fi shery-produced wealth arithmetic education is accessible; 1: Formal education is not accumulating to processing owners and managers. Scaling accessible. earnings by average national earnings refl ects whether the fi shery is able to attract the most talented workers in the A.3.4.4 Health Care Access community and is doing well at wealth generation relative to RATIONALE: A community that is successfully using its resourc- local standards. es will be able to provide high levels of health care, ensuring a quality of life and decreasing health risk. If processing is an PROPOSED MEASURE: Ratio of annual earnings from processing important part of this community, processing owners’ fami- per owner to the national average earnings. In many cases, lies will have access to the best available health care. the captain is an owner of a vessel or permit, but in other cases, captains are considered as crew. Bin boundaries can PROPOSED MEASURE: Measure is based on the quality of health be established by percentile once a range of data are col- care that is politically, culturally, and fi nancially accessible to lected. For the pilot studies, the boundaries will be estab- harvesters: 5: Global standard treatment for trauma and ill- lished by the following table: 5: More than 50 percent above ness is accessible; 4: Licensed doctors provide trauma, sur- the national average; 4: Between 10 and 50 percent above gical, and drug treatments; 3: Nurses or medical practitioners national average; 3: Within 10 percent of the national aver- provide emergency and routine drug treatments; 2: First aid age; 2: Between 50 and 90 percent of the national average; and basic drug (e.g., penicillin) treatment is accessible; 1: 1: Less than half the national average. Science-based health care is not accessible.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL 65

A.3.4.5 Social Standing of Processing Managers A.3.5.2 Worker Wages Compared to Nonﬁ shery Wages

RATIONALE: This is a proxy for income associated with owning RATIONALE: The processing worker wage is a direct measure or running processing plants, which may be much easier to of fi shery wealth that accumulates to processing workers. collect than actual wage information. Social standing refl ects It is normalized by wages typical of the region to provide an whether the fi shery is able to attract the most talented work- indicator of the relative standard of living afforded to workers in the community and is doing well at wealth generation ers, and also refl ect whether the fi shery is able to attract the relative to local standards. most skilled workers.

PROPOSED MEASURE: 5: Among the most respected in the com- PROPOSED MEASURE: Ratio of workers’ average daily wage to munity, comparable with civic and religious leaders and pro- average daily wage in region. Bin boundaries can be estab- fessionals, such as doctors and lawyers; 4: Comparable to lished by quintile once data are collected on many ﬁ sheries. management and white-collar jobs; 3: Comparable to skilled For the pilot studies, the boundaries will be coarsely estab- labor jobs; 2: Comparable to unskilled blue-collar or service lished by the following table:5: More than 10% above the jobs; 1: Among the least respected, such as slaves or inden- average; 4 Within 10% of the average; 3 Between 50 and tured servants. 90% of the average; 2 Between 25 and 50% of the average; 1 Less than 25% of the average. A.3.4.6 Nonresident Ownership of Processing Capacity

RATIONALE: The ability of a country or region to improve itself A.3.5.3 Educational Access using its resources depends on its ability to maintain local RATIONALE: A community that is successfully using its re- multipliers by keeping wealth within the region. A large por- sources will be able to provide high levels of education to tion of nonresident-owned processing refl ects that much of its children, ensuring a step beyond resource dependence in the processing wealth will be leaving the region, failing to the next generation. If processing is an important part of this boost the regional economy. In developing regions, it may community, processing workers’ families will have access to also refl ect an inability of local resource users to generate education. suffi cient capital to process. PROPOSED MEASURE: Measure is based on the highest level PROPOSED MEASURE: Proportion of ex-vessel value processed of education that is politically, culturally, and fi nancially ac- by regionally owned processing capital: 5: 95 to 100 per- cessible to families of harvesters, rather than the actual at- cent local; 4: 71 to 95 percent local; 3: 36 to 70 percent tainment levels of current harvesters. 5: Higher education is local; 2: 5 to 35 percent local; 1: Virtually no locally owned accessible; 4: High school–level education or advanced tech- processing. nical training is accessible; 3: Middle school–level education or simple technical training is accessible; 2: Basic literacy and A.3.5 Processing Workers arithmetic education is accessible; 1: Formal education is not A.3.5.1 Earnings Compared to National Average Earnings accessible.

RATIONALE: This is a direct measure of fi shery-produced wealth accumulating to processing workers. Scaling earn- A.3.5.4 Health Care Access ings by average national earnings refl ects whether the RATIONALE: A community that is successfully using its refi shery is able to attract the most talented workers in the sources will be able to provide high levels of health care, community and is doing well at wealth generation relative ensuring a quality of life and decreasing health risk. If pro- to local standards. cessing is an important part of this community, processing workers’ families will have access to the best available PROPOSED MEASURE: Ratio of annual earnings from fi shing per health care. owner to the national average earnings. In many cases, the captain is an owner of a vessel or permit, but in other cases, PROPOSED MEASURE: Measure is based on the quality of health captains are considered as crew. Bin boundaries can be es- care that is politically, culturally, and fi nancially accessible to tablished by percentile once a range of data is collected. For harvesters: 5: Global standard treatment for trauma and ill- the pilot studies, the boundaries will be established by the ness is accessible; 4: Licensed doctors provide trauma, sur- following table: More than 10 percent above the average; gical and drug treatments; 3: Nurses or medical practitioners Within 10 percent of the average; Between 50 and 90 per- provide emergency and routine drug treatments; 2: First aid cent of the average; Between 25 and 50 percent of the aver- and basic drug (e.g., penicillin) treatment is accessible; 1: age; Less than 25 percent of the average. Science-based health care is not accessible.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 66 APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL

A.3.5.5 Social Standing of Processing Workers FISHERY PERFORMANCE Rationale: This is a proxy for income associated with working in processing plants, which may be much easier to collect FACTORS: INPUTS than actual wage information. Social standing reﬂ ects wheth- A.4 MACRO FACTORS er the ﬁ shery is able to attract the most talented workers in A.4.1 General Environmental Performance the community and is doing well at wealth generation relative to local standards. 5: Among the most respected in the A.4.1.1 Environmental Performance Index (EPI) community, comparable with civic and religious leaders and RATIONALE: Wealth creation is dependent on the general con- professionals, such as doctors and lawyers; 4: Comparable dition of the environment. An Environmental Performance to management and white-collar jobs; 3: Comparable to Index (EPI) has been developed to evaluate: 1) environmental skilled labor jobs; 2: Comparable to unskilled blue-collar or health and 2) ecosystem vitality (Esty et al. 2008). service jobs; 1: Among the least respected, such as slaves PROPOSED MEASURE: The EPI considers factors such as dis- or indentured servants. ease, water quality, air pollution, biodiversity, natural resources, and climate change. The EPI ranges from 1 to 100: 5: EPI of 81 to 100; 4: 61 to 80; 3: 41 to 60; 2: 21 to 40; 1: 1 to 20. A.3.5.6 Proportion of Nonresident Employment

RATIONALE: The ability of a country or region to improve itself A.4.2 Exogenous Environmental Factors using its resources depends on its ability to maintain local A.4.2.1 Disease and Pathogens multipliers by keeping wealth within the region. A large por- RATIONALE: Even a well-managed ﬁ shery can fail to accumu- tion of nonresident processing workers reﬂ ects that much late wealth if exogenous events or conditions threaten the of the processing wealth will be leaving the region, failing to stock, or the harvestability of the stock. This measure is in- boost the regional economy. tended primarily to identify when other management inputs

PROPOSED MEASURE: 5: 95 to 100 percent local; 4: 71 to 95 per- will not be correlated with outcomes for reasons exogenous cent local; 3: 36 to 70 percent local; 2: 5 to 35 percent local; to the fi shery. 1: Virtually no local harvesters. PROPOSED MEASURE: Measure is based on the extent to which harvest is thought to be adversely affected by exogenous disease, pathogens, toxic algaes, or similar factors: 5: Harvest A.3.5.7 Worker Experience unaffected by disease; 4: Harvest reduced by less than 10 RATIONALE: The rate at which workers turn over in the fi sh- percent; 3: Harvest reduced by 10 to 30 percent; 2: Harvest ery is an indirect measure of several key variables. First, it reduced by more than 30 percent; 1: Harvest almost com- refl ects wealth accumulation to workers, because a worker pletely eliminated by shocks. will only stay in the fi shery if the wage is comparable to, or better than, other jobs he could obtain. Second, worker A.4.2.2 Natural Disasters and Catastrophes longevity often means the workers are resident in the com- RATIONALE: Even a well-managed fi shery can fail to accumu- munity, and thus their earnings stay in the community and late wealth if exogenous events or conditions threaten the are spent locally, rather than being sent away by itinerant stock, or the harvestability of the stock. This measure is in- or immigrant workers. Third, experienced workers develop tended primarily to identify when other management inputs specialized knowledge and refi ned skills that make process- will not be correlated with outcomes for reasons exogenous ing more effi cient, so the fi shery is better able to reach its to the fi shery. wealth-generating potential. PROPOSED MEASURE: Measure is based on the extent to which PROPOSED MEASURE: Average years of experience of work- harvest is thought to be adversely affected by natural disas- ers. Bin boundaries can be established by quintile once ters such as earthquakes, volcanoes, tsunamis, hurricanes, data are collected on many fisheries. For the pilot stud- and typhoons. These are typically one-time events, not long- ies, the boundaries will be coarsely established by the term ecosystem scale shifts induced by climate change: 5: following table: 5: More than 20 years (skilled career Harvest unaffected by disaster; 4: Harvest reduced by less workers); 4: 5 to 20 years; 3: 3 to 5 years; 2: 1 to 3 years; than 10 percent; 3: Harvest reduced by 10 to 30 percent; 2: 1: 0 full years of experience (mostly new workers each Harvest reduced by more than 30 percent; 1: Harvest almost season). completely eliminated by disaster.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL 67

A.4.2.3 Pollution Shocks and Accidents has developed a Worldwide Governance Indicator which

RATIONALE: Even a well-managed ﬁ shery can fail to accumulate considers six dimensions: Voice and Accountability, Political wealth if exogenous events or conditions threaten the stock, or Stability and Absence of Violence/Terrorism, Government the harvestability of the stock. This measure is intended primar- Effectiveness, Regulatory Quality, Rule of Law, and Control ily to identify when other management inputs will not be cor- of Corruption (Kaufman et al. 2008). related with outcomes for reasons exogenous to the ﬁ shery. PROPOSED MEASURE: The Governance Indicators (Kaufman,

PROPOSED MEASURE: Measure is based on the extent to which Kraay, and Mastruzzi 2008) assign countries to ranks based harvest is thought to be adversely affected by pollution on six dimensions. This measure is the average percentile shocks, such as oil spills, industrial accidents, or peak runoff ranking of the Government Effectiveness, Regulatory Quality, events. These are typically one-time events, not chronically Rule of Law, and Control of Corruption indicators. Assign av- high levels of pollution: 5: Harvest unaffected by pollution; 4: erage percentile to a quintile and give points according to: 5: Harvest reduced by less than 10 percent; 3: Harvest reduced First quintile; 4: Second quintile; 3: Third quintile; 2: Fourth by 10 to 30 percent; 2: Harvest reduced by more than 30 per- quintile; 1: Fifth quintile. cent; 1: Harvest almost completely closed by shocks. A.4.3.2 Governance Indicator—Voice and Accountability

A.4.2.4 Level of Chronic Pollution—Stock Effect RATIONALE: Good governance is an essential condition for

RATIONALE: Even a well-managed fi shery can fail to accumu- sustainable fi sheries and wealth creation. The World Bank late wealth if exogenous events or conditions threaten the has developed a Worldwide Governance Indicator that con- stock, or the harvestability of the stock. This measure is in- siders six dimensions: Voice and Accountability, Political tended primarily to identify when other management inputs Stability and Absence of Violence/Terrorism, Government will not be correlated with outcomes for reasons exogenous Effectiveness, Regulatory Quality, Rule of Law, and Control to the fi shery. of Corruption (Kaufman et al. 2008).

PROPOSED MEASURE: Measure is based on the level of chronic PROPOSED MEASURE: The Governance Indicators (Kaufman et pollution that is detected in the ﬁ shery. Chronic pollution can al. 2008) assign countries to ranks based on six dimensions. be either always present, or frequently recurring, such as af- This measure is the average percentile ranking of the Voice ter each moderate rainfall: 5: Not detectable; 4: Minimal de- and Accountability and Political Stability indicators. Assign tectable levels; 3: Major detectable; 2: Pollution affects stock average percentile to a quintile and give points according to: growth; 1: Pollution leading to severe stock decline. 5: First quintile; 4: Second quintile; 3: Third quintile; 2: Fourth quintile; 1: Fifth quintile. A.4.2.5 Level of Chronic Pollution—Consumption Effect

RATIONALE: Even a well-managed fi shery can fail to accumu- A.4.4 Economic Conditions late wealth if exogenous events or conditions threaten the A.4.4.1 Index of Economic Freedom stock, or the harvestability of the stock. This measure is intended primarily to identify when other management inputs RATIONALE: Wealth creation is dependent on the institution- will not be correlated with outcomes for reasons exogenous al setting and economic conditions in a given country. The to the fi shery. Heritage Foundation/Wall Street Journal, Index of Economic Freedom (IEF) refl ects the overall economic freedom of the PROPOSED MEASURE: Measure is based on the level of chronic nation within which the fi shery sector operates (Miller and pollution that is detected in the fi shery. Chronic pollution Holmes 2009). The Index of Economic Freedom includes can be either always present, or frequently recurring, such 10 broad institutional factors: Business freedom; Trade as after each moderate rainfall: 5: No consumption affected; freedom; Fiscal freedom; Government size; Monetary free- 4: Minimal consumption affected; 3: Offi cial consumption dom; Investment freedom; Financial freedom; Property advisories; 2: Temporarily ban harvest for consumption; 1: rights; Freedom from corruption; and Labor freedom. Completely closed for consumption. Construction of the index relies on several other studies for its data sources, including the World Bank’s Doing Business A.4.3 Governances Economist Intelligence Unit (The World Bank 2009a), A.4.3.1 Governance Indicator—Effectiveness the U.S. Department of Commerce, the World Bank’s

RATIONALE: Good governance is an essential condition for World Development Indicators (The World Bank, 2009b), sustainable ﬁ sheries and wealth creation. The World Bank Eurostat, International Monetary Fund reports, Transparency

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 68 APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL

International’s, Corruption Perceptions Index (Transparency A.5.1.3 Security Index

International 2009), and several other documents. RATIONALE: When property rights are insecure, regardless of whether the reason is crime, civil unrest, war, government PROPOSED MEASURE: The 10 factors are equally weighted and the ﬁ nal composite index has a range from 1 to 100. A de- instability, or government’s use of eminent domain, it causes tailed discussion of these factors and methodology is found owners to be more exploitive with resources. Uncertainty in Miller and Holmes (2009): 5: IEF of 81 to 100; 4: 61 to 80; implicitly increases the discount rate. Financing is under- 3: 41 to 60; 2: 21 to 40; 1: 1 to 20. mined (Anderson 2007, 2002).

PROPOSED MEASURE: Extent to which the government reduces A.4.4.2 Gross Domestic Product (GDP) Per Capita or dilutes the access rights: 5: Very Strong: Access rights RATIONALE: Richer nations are more likely able to afford the are completely respected and are not diluted (e.g., by issuing institutions and technological factors that are necessary for more access rights) by the government; 4: Strong: Rights wealth creation. are mostly respected by the government; generally survive

PROPOSED MEASURE: Bin boundaries based on quintiles of the changes in government administration; 3: Moderate: Rights U.S. CIA’s rank of per capita GDP of all countries (https:// are at risk of retraction or dilution with changes in administra- www.cia.gov/library/publications/the-world-factbook/ tion; 2: Weak: Rights are highly diluted or there is high politi- rankorder/2004rank.html): 5: Greater than US$30,000; 4: cal uncertainty; 1: None: Access rights are not protected. Greater than US$12,400; 3: Greater than US$6,000; 2: Greater than US$2,500; 1: Less than US$2,500. A.5.1.4 Durability Index RATIONALE: Short-duration property rights create more exploitive management. This implicitly increases the discount A.5 PROPERTY RIGHTS AND RESPONSIBILITY rate, thus undermining sustainability and wealth creation (Anderson 2007, 2002). A.5.1 Access A.5.1.1 Proportion of Harvest Managed Under Limited PROPOSED MEASURE: Duration of the property right: 5: Very > Access Strong: 10 years to perpetuity; 4: Strong: 5 to 10 years; 3: Moderate: 1 to 5 years; 2: Weak: Seasonal; 1:None: None/ RATIONALE: Limited-access ﬁ sheries are an essential step in daily. eliminating the open-access common property problem of rent dissipation. A.5.1.5 Flexibility Index

PROPOSED MEASURE: The proportion of total harvest that is un- RATIONALE: Under strong property rights all decisions regard- der limited-access ﬁ shing regulation: 5: Virtually all; 4: 71 to ing use, management, and technology employed to extract 95 percent; 3: 36 to 70 percent; 2: 5 to 35 percent; 1: Virtually value from the property are controlled by the owner. Fishing none. time, gear, and handling practices are in the owner’s control.

A.5.1.2 Transferability Index PROPOSED MEASURE: Ability of right holders to be fl exible in the timing and production technology employed: 5: Very Strong: RATIONALE: Transferability is essential for a functioning market All decisions on time of harvest, gear used, and handling to allocate resources to their best use. If rights are not trans- practices are in the owner’s control; 4: Strong: Minimal re- ferable, fi nancing is undermined because the property may strictions on time of harvest and technology; 3: Moderate: not be accepted as collateral. If the markets for the rights Modest restrictions on time of harvest and technology; 2: are not effi cient, then the value of the right will not be trans- Weak: Signifi cant restrictions on time of harvest and technol- parent, and its price will not necessarily refl ect the value. ogy; 1: Time of harvest, gear used, and handling practices are This will lead to misallocation of resources and ineffi cien- not in the owner’s control. cies, as well as undermine sustainability and wealth creation (Anderson 2007, 2002). A.5.1.6 Exclusivity Index

PROPOSED MEASURE: 5: Very strong: fully transferable through RATIONALE: Under strong property rights all decisions and ac- well-established, effi cient market institutions; 4: Strong: fully cess to the property are controlled by the owner. With well- transferable, but institutions are poor or illiquid; 3: Moderate: defi ned rights, externalities are internalized and net benefi ts transferable, but with severe restrictions on who can hold, or are captured. Those that produce externalities that infringe how much; 2: Weak: transferable only under highly restricted on the property right are held responsible. If externalities are and limited condition; 1: Access rights not transferable. not internalized, costs are undervalued, market signals are

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL 69

biased, resources are misallocated, and sustainability and implicitly increases the discount rate. Financing is under- wealth creation are undermined (Anderson 2007, 2002). mined (Anderson 2002, 2007).

PROPOSED MEASURE: Ability of right holders to exclude those PROPOSED MEASURE: 5: Very Strong: Harvest rights are com- who do not have the right from affecting the resource or pletely respected and are not diluted (e.g., by issuing more market: 5: Very Strong: All decisions and access to the prop- harvest rights) by the government; 4: Strong: Rights are erty are controlled by the right’s owner (rather than those mostly respected by the government; generally survive without rights, competing resource users [like recreational or changes in government administration; 3: Moderate: Rights by-catch fi sheries]); 4: Strong: Little intrusion on resource by are at risk of retraction or dilution with changes in administra- those without rights; 3: Moderate: Modest intrusion on re- tion; 2: Weak: Rights are highly diluted or there is high politi- source by those without rights; 2: Weak: Signifi cant intrusion cal uncertainty; 1: None: Harvest rights are not protected on resource by those without rights; 1: None: Completely unrestricted open access, despite putative right. A.5.2.4 Durability Index RATIONALE: Short-duration property rights create more exploitive management. This implicitly increases the discount A.5.2 Harvest Rights rate, thus undermining sustainability and wealth creation A.5.2.1 Proportion of Harvest Managed with Rights- (Anderson 2002, 2007). Based Management PROPOSED MEASURE: Duration of the property right: 5: Very RATIONALE: Rights-based management (beyond simple ac- Strong: >10 years to perpetuity; 4: Strong: 5 to 10 years; 3: cess), such as Individual/Community Quotas, Catch Shares Moderate: 1 to 5 years; 2: Weak: Seasonal; 1:None: None/ or Territorial Use Rights (TURFs), induce economic incentives daily. to allocate resources effi ciently and generate wealth.

PROPOSED MEASURE: The proportion of total harvest that is A.5.2.5 Flexibility Index under rights-based ﬁ sheries management (e.g., Individual/ RATIONALE: Under strong property rights all decisions regard- Community Quotas, Catch Shares or Territorial Use Rights ing use, management, and technology employed to extract [TURFs]): 5: Virtually all; 4: 71 to 95 percent; 3: 36 to 70 per- value from the property are controlled by the owner. Fishing cent; 2: 5 to 35 percent; 1: Virtually none. time, gear, and handling practices are in the owner’s control.

A.5.2.2 Transferability Index PROPOSED MEASURE: Ability of right holders to be fl exible in the timing and production technology employed: 5: Very Strong: RATIONALE: Transferability is essential for a functioning mar- All decisions on time of harvest, gear used, and handling ket to allocate resources to for their best use. If rights are practices are in the owner’s control; 4: Strong: Minimal re- not transferable, fi nancing is undermined because the prop- strictions on time of harvest and technology; 3: Moderate: erty may not be accepted as collateral. If the markets for Modest restrictions on time of harvest and technology; 2: the rights are not effi cient, then the value of the right will Weak: Signifi cant restrictions on time of harvest and technol- not be transparent, and its price will not necessarily refl ect ogy; 1: Time of harvest, gear used, and handling practices are the value. This will lead to misallocation of resources and not in the owner’s control ineffi ciencies, as well as undermine sustainability and wealth creation (Anderson 2002, 2007). A.5.2.6 Exclusivity Index PROPOSED MEASURE: 5: Very strong: fully transferable through RATIONALE: Under strong property rights all decisions and ac- well-established, effi cient market institutions; 4: Strong: fully cess to the property are controlled by the owner. With well- transferable, but institutions are poor or illiquid; 3: Moderate: defi ned rights, externalities are internalized and net benefi ts transferable, but with severe restrictions on who can hold, or are captured. Those that produce externalities that infringe how much; 2: Weak: transferable only under highly restricted on the property right are held responsible. If externalities are and limited condition; 1: Access rights not transferable. not internalized, costs are undervalued, market signals are A.5.2.3 Security Index biased, resources are misallocated, and sustainability and wealth creation are undermined (Anderson 2002, 2007). RATIONALE: When property rights are insecure, regardless of whether the reason is crime, civil unrest, war, government PROPOSED MEASURE: Ability of right holders to exclude those instability, or government’s use of eminent domain, it causes who do not have the right from affecting the resource or mar- owners to be more exploitive with resources. Uncertainty ket: 5: Very Strong: All decisions and access to the property

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 70 APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL

are controlled by the right’s owner (rather than those with- PROPOSED MEASURE: Subjective measure of how much infl u- out rights, competing resource users [like recreational or ence harvesting organizations have, either directly or through by-catch fi sheries]); 4: Strong: Little intrusion on resource by political collective action, on management and access to the those without rights; 3: Moderate: Modest intrusion on refi shery: 5: Harvesting organizations cooperatively determine source by those without rights; 2: Weak: Signifi cant intrusion marketing and operational details; 4: Extensive joint market- on resource by those without rights; 1: None: Completely ing; 3: Large subgroups facilitating marketing, joint purchas- unrestricted open access, despite putative right. ing; 2: Small subgroups cooperating in purchasing or operations; 1: No active effort or capacity to infl uence business operations. A.5.3 Comanagement A.5.3.1 Participation in Industry Organizations A.5.4 Management RATIONALE: The degree to which producers are organized A.5.4.1 Management Expenditure to Value of Harvest into cooperatives or associations that can act collectively RATIONALE: This is a measure of the cost of fi sheries man- to infl uence distribution/sharing of resources and facilitate agement in proportion to the value of fi sheries. Effi ciency in both buying and selling power, thereby creating wealth management is essential for wealth creation. enhancement.

PROPOSED M EASURE: This measure divides the budget ($ million) PROPOSED MEASURE: Proportion of harvest where the primary for fi sheries management by the ex-vessel value ($ millions) harvesters are organized into associations: 5: Virtually all; 4: of the harvest. Government, industry, and aid agency expen- 71 to 95 percent; 3: 36 to 70 percent; 2: 5 to 35 percent; 1: ditures on fi shery management activities include research, Virtually none. enforcement, and management capacity development (but not infrastructure). Bin boundaries can be established by A.5.3.2 Industry Organization Infl uence quintile once data are collected on many fi sheries. For the on Management and Access pilot studies, the boundaries will be coarsely established by RATIONALE: Harvesting organizations can infl uence manage- the following table, which are based on the benchmark of ment and access by directly managing access rights (e.g., managed mutual funds (1 to 2 percent management costs): cooperatives or community quota systems) or by taking po- 5: Less than 5 percent; 4: 5 to 25 percent; 3: 26 to 50 per- litical action to infl uence the access they and others have cent; 2: 51 to 100 percent; 1: More than the value of harvest. through the management authority. Such harvester participation may facilitate management that increases wealth accu- A.5.4.2 Management Employees to Value of Harvest

mulation to harvesters. RATIONALE: This is an indicator of management effi ciency. Effi cient management is essential for wealth creation. PROPOSED MEASURE: Subjective measure of how much infl u-

ence harvesting organizations have, either directly or through PROPOSED MEASURE: Public sector fi shery management em- political collective action, on management and access to the ployee FTEs devoted to managing the fi shery divided by the fi shery: 5: Harvesters effectively determine allocation of ex-vessel value of the harvest. Bin boundaries can be estab- resources; 4: Harvesters have signifi cant infl uence in de- lished by quintile once data are collected on many fi sheries. termining allocation; 3: Harvesters are politically active, but For the pilot studies, the boundaries will be coarsely estab- not controlling; 2: Social or informal monitoring participation lished by the following table: 5: More than 0.35 per million; 4: and allocation; 1: No active effort or capacity to infl uence 0.25 to 0.35; 3: 0.15 to 0.25; 2: 0.01 to 0.15; 1: 0. management. A.5.4.3 Management Employees per Permit Holder

A.5.3.3 Harvester Organization Infl uence on Business RATIONALE: This is an indicator of management effi ciency. and Marketing Effi cient management is essential for wealth creation.

RATIONALE: Harvesting organizations can infl uence business PROPOSED MEASURE: Fishery management FTE employees di- and marketing by working to exert market power in either vided by the number of fi shing units (in 100s) (vessels or purchasing of inputs (e.g., marine services or insurance) or permit holders). Bin boundaries can be established by quin- by collectively marketing products, reducing costs, or in- tile once data are collected on many fi sheries. For the pilot creasing revenue, respectively. Such joint activity may in- studies, the boundaries will be coarsely established by the crease wealth accumulation to harvesters. following: 4 or more per 100 permit holders; 3; 2; 1; 0.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL 71

A.5.4.4 Research as a Proportion of Fisheries A.5.6 Participation Management Budget A.5.6.1 Days in Stakeholder Meetings RATIONALE: This is an indicator of the degree to which ﬁ shery RATIONALE: This measure is a proxy for the efﬁ ciency of management is based on science. It is also an indicator of the management process and stakeholder participation. the potential for innovation and support for entrepreneurs. Stakeholder participation injects stakeholders’ knowledge

PROPOSED MEASURE: Research expenditures divided by total into management and may increase legitimacy and com- fi sheries management budget. Bin boundaries can be estab- pliance. However, it may also increase management costs lished by quintile once data are collected on many fi sheries. and present opportunities for lobbying and rent seeking that For the pilot studies, the boundaries will be coarsely estab- increases the time required to implement management, lished by the following table (based on 18 to 22 percent in or weakens implemented regulations to prevent wealth pharmaceuticals and 4 percent in general manufacturing): 5: generation. Over 20 percent; 4: 12 to 20 percent; 3: 5 to 12 percent; 2: PROPOSED MEASURE: Days in stakeholder meetings per year 0.5 to 5 percent; 1: Virtually none. spent by an participant in the fi shery who is active in man- A.5.4.5 Level of Subsidies agement. Bin boundaries can be established by quintile once data are collected on many fi sheries. For the pilot studies, RATIONALE: Subsidies distort resource allocation and pricing. the boundaries will be coarsely established by the following Lower subsidies are indicative of greater market effi ciency. table: 5: More than 24 per year; 4: 12 to 24; 3: 6 to 12; 2: 1 Subsidies include preferential tax rates, input cost reduc- to 6; 1: None. tions, price supports, special borrowing rates, undervaluing resources (e.g., leases), payments-in-kind, and other related actions giving preference. A.5.6.2 Industry Financial Support for Management RATIONALE: If the industry pays for the cost of management, PROPOSED MEASURE: Measure the annual value of all subsidies it is likely that effi ciency will be improved and the concomi- as a proportion of the value of the fi shery: 5: Near zero (less tant control over management exerted by the industry will than 2.5 percent); 4: 2.5 to 7.5 percent; 3: 7.5 to 12.5 per- lead to improved outcomes for harvesters, especially wealth cent; 2: 12.5 to 20 percent; 1: More than 20 percent. generation.

PROPOSED MEASURE: Proportion of the fi shery management A.5.5 Data budget paid for by the fi shing sector. Bin boundaries can be A.5.5.1 Data Availability established by quintile once data are collected on many fi sh- RATIONALE: A fi shery management program will be more ef- eries. For the pilot studies, the boundaries will be coarsely fective in achieving its social and biological goals if it collects established by the following: 5: Virtually all; 4: 50 to 95 per- data on which to evaluate policy changes, either retrospec- cent; 3: 6 to 50 percent; 2: 1 to 5 percent; 1: None. tively or prospectively.

PROPOSED MEASURE: 5: Regular stock assessment and economic data; 4: Landings and price data; 3: Landings data; 2: A.6 POST-HARVEST Boat registration and license data; 1: No data are tracked A.6.1 Markets and Market Institutions A.5.5.2 Data Analysis A.6.1.1 Landings Pricing System

RATIONALE: A fi shery management program will be more ef- RATIONALE: Fair and effi cient price discovery systems are es- fective in achieving its social and biological goals if it ana- sential for effi cient resource use and wealth creation. Crucial lyzes data to evaluate policy changes, either retrospectively to this is the ability of harvesters to move among ex-vessel or prospectively. buyers to those offering the best prices on a per-landing basis. PROPOSED MEASURE: 5: Biological and economic data used in prospective analysis of management; 4: Biological data domi- PROPOSED MEASURE: Proportion of the harvest sold in a trans- nate simple prospective analysis; 3: Biological or economic parent daily competitive pricing mechanism, such as an auc- data are used to track performance retrospectively; 2: Data tion or centralized ex-vessel to wholesale market: 5: Virtually are used inconsistently or irregularly; 1: No data analysis con- all; 4: 71 to 95 percent; 3: 36 to 70 percent; 2: 5 to 35 per- ducted in management process. cent; 1: Virtually none.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 72 APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL

A.6.1.2 Availability of Ex-vessel Price and Quantity A.6.1.6 Level of Nontariff Barriers

Information RATIONALE: Lower nontariff barriers broaden the market, improve RATIONALE: Market transparency is essential for efﬁ cient re- price discovery, and increase the opportunity to create wealth. source use and wealth creation. Market transparency is PROPOSED MEASURE: Nontariff barriers include quantity restric- characterized by readily available, accurate price and quantity tions (import quotas), regulatory restrictions, investment information. restrictions, customs restrictions, and direct government PROPOSED MEASURE: 5: Complete, accurate price and quantity intervention: 5: Are not used to limit international trade; 4: information available to market participants immediately; 4: Have very limited impact on international trade; 3: Act to im- Reliable price and quantity information is available prior to pede some international trade; 2: Act to impede a majority the next market clearing; 3: Price information is available but of potential international trade; 1: Act to effectively impede a no timely quantity information; 2: Price and quantity informa- signiﬁ cant amount of international trade tion are inaccurate, lagged, or available to only a few; 1: No information available. A.6.2 Infrastructure

A.6.1.3 Number of Buyers A.6.2.1 International Shipping Service RATIONALE: In order to have access to a broader market, com- RATIONALE: This measure is an indicator of relative market power. If the market is dominated by a single (or very few) petitively priced international shipping is essential.

buyer or seller, price will favor the side with greater market PROPOSED MEASURE: Average of the two measures below: power. 5: Ocean shipping services are readily available at lower than PROPOSED MEASURE: Typical number of buyers of ex-vessel average rates; 4: Ocean shipping services are readily avail- product in a given market: 5: Highly competitive; 4: 4 to 6 able at average rates; 3: Ocean shipping services are read- buyers; 3: 2 to 3 competing buyers; 2: A small number of ily available at higher than average rates; 2: Ocean shipping coordinating buyers; 1: There is one buyer. services are available but irregular; 1: International shipping is not available at reasonable rates A.6.1.4 Degree of Vertical Integration

RATIONALE: Vertical integration facilitates the fl ow of informa- 5: Air shipping services are readily available at lower than tion from the consumer to the harvest sector and tends to average rates; 4: Air shipping services are readily available at reduce transaction costs between market levels. average rates; 3: Air shipping services are readily available at higher than average rates; 2: Air shipping services are avail- PROPOSED MEASURE: Proportion of harvest where the primary able but irregular; 1: International shipping is not available at harvester and primary processor/distributor are same fi rm. reasonable rates. Bin boundaries can be established by quintile once data are collected on many fi sheries. For the pilot studies, the bound- A.6.2.2 Road Quality Index

aries will be coarsely established by the following: 5: Virtually RATIONALE: The quality of roads is directly related to the ability none; 4: 0.5 to 2.5 percent; 3: 2.5 to 5 percent; 2: 5 to 10 of ﬁ rms to distribute their products, minimize transportation percent; 1: Over 10 percent. cost, and create wealth.

A.6.1.5 Level of Tariffs PROPOSED MEASURE: Mile-weighted average road quality be-

RATIONALE: Lower tariffs broaden the market, improve price tween the ﬁ shery’s primary port and its major consumption discovery, and increase the opportunity to create wealth. center (or export shipping port for exported product). Score according to: 5: High-quality paved roads and extensive high- PROPOSED MEASURE: Based on quintile once data on an appro- ways; 4: Primarily paved two-lane roads and moderate high- priate number of systems are collected. However, initial tariff way; 3: Primarily paved two-lane roads and minimal highway; rate on key seafood exports relative to international average 2: Paved two-lane roads and well-graded gravel roads; 1: for food commodities. Bin boundaries can be established by Poorly maintained gravel or dirt roads. quintile once data are collected on many ﬁ sheries. For the pilot studies, the boundaries will be coarsely established by A.6.2.3 Technology Adoption

the following table (based on World Development Indicators RATIONALE: The availability of the latest communication, pro- 2005 Table 6.3, average 2003 tariff for food from low-income cessing, and production technology is important for ﬁ rms to countries to OECD countries is 4.1 percent). maintain global competitiveness and create wealth.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX A — FISHERY PERFORMANCE INDICATORS—MANUAL 73

PROPOSED MEASURE: 5: Cell phones/fi sh fi nders/computers/ Minimal, poorly supported extension service; 1: No exten- processing/production technology are readily available; 4: sion service. Cell phones/fi sh fi nders, and so forth, are common, but some A.6.2.5 Reliability of Utilities/Electricity other technology is not always available; 3: Cell phones/fi sh fi nders, and so forth, are common, but some other technol- RATIONALE: Reliable utilities are essential for fi rms to function ogy is diffi cult to obtain; 2: Cell phones are common, but effi ciently and generate wealth. most other technology is prohibitive; 1: Very little advanced PROPOSED MEASURE: 5: Electricity readily available with rare technology is accessible for the industry. outages; 4: Electricity readily available with less than six short outages per year; 3: Electricity readily available with A.6.2.4 Extension Service less than two outages per month; 2: Electricity readily avail- RATIONALE: Extension services are successful in many coun- able with more than two outages per month; 1: Electricity is tries for transferring technology and information about best not available except through generators. management practices, new technology, market conditions, and regulatory changes. This information is often essential A.6.2.6 Access to Ice and Refrigeration in a widely dispersed industry to help maximize returns and RATIONALE: Ice/refrigeration are essential for quality control generate wealth. and broadening the market.

PROPOSED MEASURE: 5: Broad extension service with fi eld PROPOSED MEASURE: 5: Ice is readily available in various forms; offi ces and close linkage with research community; 4: 4: Ice is readily available in various forms with occasional Extension service with moderate fi eld coverage and ade- shortages; 3: Ice is available in limited quantity/form (e.g., quate linkage with the research community; 3: Extension block only); 2: Ice is available in very limited quantity/form; 1: service, but with weak links to the research community; 2: Ice is unavailable.

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52

APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS 75

Appendix B: SUGGESTED REVISION AND ADDITIONAL INDICATORS

TABLE B.1: FPIs Output Indicators Revision (Revision and Additions Are Highlighted) (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Ecologically Fish Stock Health Proportion of 5: 76–100% of landings are certifi ed The proportion of harvest (quantity) har- Sustainable and Environmental Harvest with 4: 51–75% of landings are certifi ed vested under one of the recognized third-party Fisheries Performance a Third-Party 3: 26–50% of landings are certifi ed programs that certify ecological sustainability, Certifi cation such as the Marine Stewardship Council (MSC) 2: 1–25% of landings are certifi ed certifi cation. 1: No landings have third-party certifi cation Percentage of 5: None overfi shed Proportion of stocks in the fi shery (including dis- Stocks Overfi shed 4: 1–25% of stocks overfi shed tinct stocks of the same species under the same 3: 26–50% overfi shed management plan) whose current biomass level indicates they are overfi shed. Single species 2: 51–75% overfi shed fi sheries will be 1 or 5. (Whether they are cur- 1: 76–100% overfi shed rently recovering or being overfi shed further is the next question.) Overfi shing or 5: Stock is not overfi shed or is rebuilt Extent to which current effort affects stock Rebuilding 4: Growth overfi shed, but stable or rebuilding status. For multistock fi sheries, score each sig- 3: Growth overfi shed and experiencing growth nifi cant stock 1 to 5, then take a value-weighted overfi shing average. 2: Recruit overfi shed, but stable or rebuilding 1: Recruit overfi shed and experiencing recruit overfi shing Regulatory 5: No regulatory mortality of the target species Nonlanding mortality induced by regulation, Mortality 4: Regulatory mortality is less than 5% of such as regulatory discards total catch 3: 5–25% 2: 25–50% 1: For every 100 lbs of fi sh caught, more than 50 lbs are discarded Selectivity 5: There is virtually no nontarget catch Nontarget species are distinct from multispe- 4: Less than 5% of catch is of nontarget species cies fi sheries in that the catch of nontarget 3: 5–25% species does not increase the value of fi shing, or impose costs on the target fi shery. 2: 25–50% 1: For every 100 lbs of fi sh caught, more than 50 lbs are nontarget species Illegal, Unregulated, 5: There is virtually no IUU catch Proportion of landings using illegal gear, area, or Unreported 4: Less than 5% of catch is IUU methods, and so forth, or falling outside of the Landings 3: 5–25% regulations. If there is no regulatory reporting requirement, that does not count as unreported 2: 25–50% for purposes of this measure. 1: For every 100 lbs of fi sh caught, more than 50 lbs are IUU Status of Critical 5: Critical habitat is healthy and not Critical habitat is defi ned as that playing a sig- Habitat threatened nifi cant role in the life cycle of the fi sh. Portion 4: Less than 25% is degraded or dysfunctional damaged is based on area, and from all sources 3: 25–75% is degraded or dysfunctional of damage including fi shing damage, pollution, and development. 2: More than 75% of critical habitat is destroyed 1: Nearly all critical habitat is damaged or dysfunctional

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 76 APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS

TABLE B.1: FPIs Output Indicators Revision (Revision and Additions Are Highlighted) (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Harvest Sector Harvest Landings Level 5: Harvest is less than MSY (stock is above Average annual harvest over the last 3 years. Performance Performance MSY level) to increase profi t In practice, there are very few estimates of 4: Harvest is approximately at MSY MEY, however where it has been calculated it 3: Harvest reduced to promote recovery (stock is typically 5 to 10 percent less than maximum is below MEY level) sustainable yield (MSY). 2: Harvest is constraining stock recovery (stock is stable below MEY level) 1: Harvest is causing overfi shing (stock is below MEY and declining) Excess Capacity 5: Within 5% of days required In the absence of a fi shery-specifi c measure 4: 105–120 or 90–95% of overfi shing, use estimated standardized 3: 120–150% or 75–90% vessels-days required to catch the maximum economic yield (MEY) compared to the number 2: 150–200% or 50–75% of standardized vessel-days available. Days are 1: More than 200%, or less than 50%, of days considered not to be restricted by trip limits. required Season Length 5: Virtually no regulatory closures Ratio of number of days on which fi shing occurs 4: 90–99% to the number of days the species is available 3: 50–90% in economically feasible quantities. This is primarily a measure of the extent of derby 2: 10–50% (including short regulatory seasons to limit 1: Less than 10% total effort), not lack of biological availability or closures to prevent within-season growth overfi shing.

Harvest Safety 5: Less than 0.1 deaths per thousand person Number of harvester (captain or crew) on-the- seasons job deaths, per thousand person fi shing season. 4: Less than 0.5 deaths We consider there to be one season per year, 3: Less than 1 but do not annualize mortality if the fi shing season is less than a year. 2: Less than 5 1: More than 5 deaths per thousand person seasons Harvest Asset Ratio of Asset Value 5: 10 or higher Extent to which fi shery wealth is accumulated Performance to Gross Earnings 4: 7.5–10 in access capital (e.g., quota or vessels). 3: 5–7.5 Typically a 1 if vessels or quota not limited by regulation. Ratio of average price of capital 2: 2.5–5 and licenses require access to the fi shery over 1: Below 2.5 the last 5 years to the average annual landings value for a similarly scaled access right in the same period. Same business or same family sales are excluded, where they can be identifi ed. Total Revenue ver- 5: Above 95% The indicator is the ratio of total real revenue sus Historic High 4: 85–95% (in local currency) to the average of the three 3: 70–85% highest total real revenues in the past 10 years. Adjust by local CPI if infl ation was signifi cant. 2: 50–70% 1: Below 50% Asset (Permit, 5: Above 95% The indicator is the ratio of asset to the average Quota) Value versus 4: 85–95% of the three highest asset values in the past 10 Historic High 3: 70–85% years. Adjust by local CPI if infl ation was signifi - cant. Typically 5 if wealth is not accumulating in 2: 50–70% vessels, permits, or quota. 1: Below 50% Borrowing Rate 5: Less than 1.75; cf. 30-year conforming mort- Average ratio between the interest rate on Relative to Risk- gage; family/friend’s support loans made in the industry to risk-free rates Free Rate 4: Less than 2.5; cf. personal bank loan; in- over the last 3 years. If businesses can ac- kind pay back cess the international credit markets, that is 3: Less than 4; cf. good credit card rates appropriate comparison; otherwise, use local risk-free rate. 2: Less than 7; cf. bad credit card rates 1: Greater than 7; usury

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS 77

TABLE B.1: FPIs Output Indicators Revision (Revision and Additions Are Highlighted) (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Source of Capital 5: Unsecured business loans from banks/ Points to be assigned based on the category of venture capital lenders or investors that is most typically used 4: Secured business loans from banks/public in the fi shery. Second scoring method offered stock offering; investment from elsewhere in if the supply chain (e.g., traders, processors, supply chain exporters) are primary source of capital. 3: Loans from banks secured by personal (not business) assets/government-subsidized private lending/government-run loan programs/ international aid agencies; secured loans from elsewhere in supply chain 2: Microlending/family/community-based lending; loans from supply chain signifi cantly reduce margins 1: Mafi a/no capital available; exploitive relationship from elsewhere in supply chain Functionality of 5: Capital is new Average age of the key durable harvesting capi- Harvest Capital 4: Capital is older but well maintained, e.g., tal unit (vessels, weirs). Ages are not assigned freshly painted to scores due to differences in expected useful 3: Capital is moderately well maintained life, but buildings and industrial vessels have expected life of roughly 20 years. 2: Maintenance is poor 1: Serious concerns about seaworthiness or safety throughout fi shery Risks Exposure Annual Total 5: Less than 0.15 Ratio of the standard deviation of the fi rst Revenue Volatility 4: 0.15–0.22 differences of annual total revenue to the mean 3: 0.22–0.40 total revenue over the last 10 years. Best guess may be calculated based on shorter time series 2: 0.40–1 if data not available. 1: Greater than 1 Annual Landings 5: Less than 0.15 Ratio of the standard deviation of the fi rst Volatility 4: 0.15–0.22 differences of annual total landings sold to the 3: 0.22–0.40 mean landings over the last 10 years. 2: 0.40–1 1: Greater than 1 Intra-annual 5: Less than 0.15 Ratio of the standard deviation of the weekly/ Landings Volatility 4: 0.15–0.22 monthly total sold landings over the last 3 years 3: 0.22–0.40 to the mean landings. Observations of zero landings are included if there is biological avail- 2: 0.40–1 ability. If the biological season is so short that 1: Greater than 1 there is not meaningful variation at a monthly level, this measure can be NA.

Annual Price 5: Less than 0.13 Ratio of the standard deviation of the ﬁ rst dif- Volatility 4: 0.13–0.20 ferences of annual ex-vessel price to the mean 3: 0.20–0.30 price over the last 10 years. 2: 0.30–0.85 1: Greater than 0.85 Intra-annual Price 5: Less than 0.13 Ratio of the standard deviation of average Volatility 4: 0.13–0.20 monthly ex-vessel price over the last 3 years 3: 0.20–0.30 to the mean. Observations of zero landings are included if there is biological availability. If the 2: 0.30–0.85 biological season is so short that there is not 1: Greater than 0.85 meaningful variation at a monthly level, this measure can be NA.

Spatial Price 5: Less than 0.13 Ratio of the standard deviation across data Volatility 4: 0.13–0.20 collection regions of average annual ex-vessel 3: 0.20–0.30 price to the mean. Measure should be averaged over last 3 years. 2: 0.30–0.85 1: Greater than 0.85

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 78 APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS

TABLE B.1: FPIs Output Indicators Revision (Revision and Additions Are Highlighted) (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Contestability and 5: No signifi cant legal challenges, civil This captures the degree to which political Legal Challenges actions, or protests regarding the fi shery activity limits the ability to implement effective management system fi shing regulations. 4: Minor legal challenges slow implementation 3: Legal challenges, civil actions, or protests impede some management measures 2: Legal challenges, civil actions, or protests suspend major elements of the management system 1: Legal challenges, civil actions, or protests suspend or prohibit implementation of key management reforms and regulation certifi cation Owners, Permit Earnings Compared 5: More than 50% above the regional average Ratio of annual earnings from fi shing per owner Holders, and to Regional Average 4: Between 10% and 50% above regional to the regional average earnings. In many Captains (Those Earnings average cases, the captain is an owner of a vessel or Holding the Right or 3: Within 10% above the regional average permit, but in other cases, captains are consid- Ability to Access) ered as crew. 2: Between 50% and 90% of the regional average 1: Less than half of the regional average Fishery Wages 5: More than 50% above the regional average Ratio of captain’s average daily wage in this Compared to 4: Between 10 and 50% above regional fi shery to average daily wage in the captain’s Nonfi shery Wages average economic sphere (e.g., village if all economic 3: Within 10% above the regional average activity is within the village, but nation if participates in national markets as a consumer). 2: Between 50% and 90% of the regional May differ from above measure if fi shery is not average year-round and there is no income or income 1: Less than half of the regional average from other fi sheries or other occupations. Education Access 5: Higher education is accessible The level of education attained by (available 4: High school–level education or advanced and affordable) the families (i.e., children) of technical training is accessible permit holders and captains. 3: Middle school–level education or simple technical training is accessible 2: Basic literacy and arithmetic training is accessible 1: Formal education is not accessible Access to Health 5: Global standard treatment for illness is The level of health care accessible to (available Care accessible and affordable) the families of permit holders 4: Licensed doctors provide trauma, surgical, and captains. and drug treatments 3: Nurses or medical practitioners provide emergency and routine drug treatments 2: Basic and simple drug treatment is accessible 1: Medical or drug treatment is not accessible Social Standing of 5: Among the most respected in the com- Boat Owners and munity, comparable with civic and religious Permit Holders leaders and professionals, such as doctors and lawyers 4: Comparable to management and white- collar jobs 3: Comparable to skilled labor jobs 2: Comparable to unskilled blue-collar or service jobs 1: Among the least respected, such as slaves or indentured servants Proportion of 5: 95–100% local “Local” is defi ned as coming from, and spend- Nonresident 4: 70–95% local ing their earnings within, the local fi shing Employment 3: 35–70% local community. Nationals who are transient nonresidents or considered outsiders in the fi shing 2: 5–35% local community are not local. 1: Virtually no local permit holders

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS 79

TABLE B.1: FPIs Output Indicators Revision (Revision and Additions Are Highlighted) (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Crew (Those Earnings Compared 5: More than 50% above the regional average Ratio of annual earnings from fi shing per crew Depending on to Regional Average 4: Between 10% and 50% above regional to the regional average earnings. In many Others for Access) Earnings average cases, the captain is an owner of a vessel or 3: Within 10% above the regional average permit, but in other cases, captains are considered as crew. 2: Between 50% and 90% of the regional average 1: Less than half of the regional average Fishery Wages 5: More than 50% above the regional average Ratio of crew’s average daily wage to average Compared to 4: Between 10% and 50% above regional daily wage in the crew’s economic sphere (e.g., Nonfi shery Wages average village if all economic activity is within the 3: Within 10% above the regional average village, but nation if participates in national markets as a consumer). May differ from above 2: Between 50% and 90% of the regional measure if fi shery is not year-round and there average is no income or income from other fi sheries or 1: Less than half of the regional average other occupations. Education Access 5: Higher education is accessible The level of education attained by (available 4: High school–level education or advanced and affordable) the families (i.e., children) of technical training is accessible crew. 3: Middle school–level education or simple technical training is accessible 2: Basic literacy and arithmetic training is accessible 1: Formal education is not accessible Access to Health 5: Global standard treatment for illness is The level of health care accessible to (available Care accessible and affordable) the families of crew. 4: Licensed doctors provide trauma, surgical, and drug treatments 3: Nurses or medical practitioners provide emergency and routine drug treatments 2: Basic and simple drug treatment is accessible 1: Medical or drug treatment is not accessible Social Standing of 5: Among the most respected in the com- Crew munity, comparable with civic and religious leaders and professionals, such as doctors and lawyers 4: Comparable to management and white- collar jobs 3: Comparable to skilled labor jobs 2: Comparable to unskilled blue-collar or service jobs 1: Among the least respected, such as slaves or indentured servants Proportion of 5: 95–100% local “Local” is defi ned as coming from, and spend- Nonresident 4: 70–95% local ing their earnings within, the local fi shing Employment 3: 35–70% local community. Nationals who are transient nonresidents, or considered outsiders in the fi shing 2: 5–35% local community, are not local. 1: Virtually no local crew Crew Experience 5: More than 10 years (skilled career crew) Average years of experience of crew members. 4: 5–10 years 3: 3–5 years 2: 1–3 years 1: 0 full years of experience (mostly new crew each season) Age Structure of 5: All working ages are well represented Age range of both captains and their crews. Harvesters 4: Slightly skewed toward younger or older 3: Skewed toward younger or older 2: Almost entirely younger or older, but working age 1: Harvesters primarily younger or older than working age

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 80 APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS

TABLE B.1: FPIs Output Indicators Revision (Revision and Additions Are Highlighted) (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Post-Harvest Market Performance Ex-Vessel Price 5: Above 95% The indicator is the ratio of annual ex-vessel Performance versus Historic High 4: 85–95% prices to the average of the three highest an- 3: 70–85% nual ex-vessel prices in the past 10 years. 2: 50–70% 1: Below 50% Final Market Use 5: Premium human consumption (premium Premium products are typically distinct to quality and products) species, or species and source. Where a supply 4: High-value human consumption chain is diverse, score each weight by value. 3: Moderate-value human consumption 2: Low-value human consumption 1: Fish meal/animal feed/bait or nonconsumptive International Trade 5: 90–100% export Percentage of the fi shery’s value that is from 4: 60–90% export fi sh exported to higher-value markets for 3: 30–60% export consumption. 2: 2–30% export 1: Virtually no export Final Market 5: Greater than US$35,000 Average per capita GDP of the consumer Wealth 4: Greater than US$25,000 of a fi shery’s primary fi nal product (pounds/ 3: Greater than US$12,500 kilos weighted by GDP). If multiple important products, weight by value. 2: Greater than US$5,000 1: Less than U.S.$5,000 Wholesale Price 5: More than twice global average; Ratio of average price for fi sh weight in Relative to Similar 4: 120–200% of global average wholesale (primary) fi sh product from the base Products 3: Within 20% of global average country (converted to global currency), to a global average for similar species. 2: 50–80% of global average 1: Less than half global average Capacity of Firms to 5: Over 90% meet U.S. and EU health and Percentage of a country’s fi sh exports that Export to the United labeling standards meet U.S. or EU health and labeling standards. States and the 4: 50–90% This is a country-level measure and refers to European Union 3: Less than 50% all processing capacity for export, including to regional markets. 2: A small amount of product meets U.S./EU standards 1: Banned in the United States or European Union, or cost of compliance with U.S./EU standards is prohibitive Ex-Vessel to 5: More than 200% increase in value Increase in value of processed wholesale Wholesale 4: 100–200% product from unprocessed ex-vessel product. Marketing Margins 3: 50–100% [(Wholesale $/lb)*yield]/(ex vessel $/lb) 2: 10–50% 1: Less than 10% increase in value Post-Harvest, Processing Yield 5: At feasible frontier Ratio of actual processing yield (kilos/pounds) Processing, and 4: Within 5% of the feasible frontier to the maximum processing yield technically Support Industry 3: Within 10% achievable. Performance 2: Within 25% 1: Less than 75% of maximum yield Shrink 5: Less than 5% Loss of fi shery product value due to handling, 4: 5–10% spoilage, and theft. This is very likely to be an 3: 10–25% estimate. 2: 25–50% 1: More than 50% Capacity Utilization 5: Virtually year-round Days open for processing each year. Such days Rate 4: 75–95% of days would not normally include religious or civic 3: 50–75% holidays, or weekly rest days. 2: 20–50% 1: Less than 20%

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS 81

TABLE B.1: FPIs Output Indicators Revision (Revision and Additions Are Highlighted) (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Product 5: 75–100% of landings are enhanced Proportion of harvest meat weight going into Improvement 4: 50–75% certifi ed, branded, fresh premium, portioned, 3: 25–50% live, or value-added products. 2: 1–25% 1: No landings have enhancements Sanitation 5: Sanitation in landing and processing areas meets global health standards 4: Basic treatment, but falls short of global standards 3: Human waste is adequately handled, but fi sh waste presents sanitation issues 2: Functional toilets are available, but fi sh or fi sh handlers are exposed to untreated sewage 1: Functional toilets are not available in landing or processing areas Regional Support 5: All types of support are plentiful Businesses 4: Some types of support are capacity constrained or unavailable 3: Most types of support are capacity constrained or unavailable 2: Support limited to variable inputs 1: Industry support is not locally available Post-Harvest Asset Borrowing Rate 5: Less than 1.75; cf. 30-year conforming Average ratio between the interest rate on Performance Relative to Risk- mortgage loans made in the industry to risk-free rates Free Rate 4: Less than 2.5; cf. personal bank loan over the last 3 years. If businesses can ac- 3: Less than 4; cf. good credit card rates cess the international credit markets, that is appropriate comparison; otherwise, use local 2: Less than 7; cf. bad credit card rates risk-free rate. 1: Greater than 7; usury Source of Capital 5: Unsecured business loans from banks/ Points to be assigned based on the category of venture capital lenders or investors that is most typically used 4: Secured business loans from banks/public in the fi shery. Second scoring method offered if stock offering; investment from elsewhere in the supply chain (e.g., processors, exporters) is supply chain primary source of capital. 3: Loans from banks secured by personal (not business) assets/government-subsidized private lending/government-run loan programs/ international aid agencies; secured loans from elsewhere in supply chain 2: Microlending/family/community-based lending; loans from supply chain signifi cantly reduce margins 1: Mafi a/No capital available; exploitive relationship from elsewhere in supply chain Age of Facilities 5: First quarter of expected life; less than 7 Average age of the key durable processing years for a building capital unit (plants, catcher-processor vessels). 4: Second quarter of expected life; 7–15 years 3: Third quarter of expected life; 16–20 years 2: Fourth quarter of expected life; 21–25 years 1: Exceeding expected life; greater than 25 years Processing Owners Earnings Compared 5: More than 50% above the regional average Ratio of annual earnings per resident owner/ and Managers to National Average 4: Between 10 and 50% above regional manager to the regional average earnings. Earnings average This measure can include wealth accumulated 3: Within 10% above the regional average to traders/middlemen if they represent an important part of the supply chain. 2: Between 50% and 90% of the regional average 1: Less than half of the regional average

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 82 APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS

TABLE B.1: FPIs Output Indicators Revision (Revision and Additions Are Highlighted) (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Manager Wages 5: More than 50% above the regional average Ratio of resident owner/manager’s average Compared to 4: Between 10 and 50% above regional daily wage to average daily wage in their Nonﬁ shery Wages average economic sphere (e.g., village if all economic 3: Within 10% above the regional average activity is withing the village, but nation if participates in national markets as a consumer). 2: Between 50% and 90% of the regional average 1: Less than half of the regional average Education Access 5: Higher education is accessible The level of education attained by (available 4: High school–level education or advanced and affordable) the families (i.e., children) of technical training is accessible process owners/managers. 3: Middle school–level education or simple technical training is accessible 2: Basic literacy and arithmetic training is accessible 1: Formal education is not accessible Access to Health 5: Global standard treatment for illness is The level of health care accessible to (available Care accessible and affordable) the families of processing own- 4: Licensed doctors provide trauma, surgical, ers and managers. and drug treatments 3: Nurses or medical practitioners provide emergency and routine drug treatments 2: Basic and simple drug treatment is accessible 1: Medical or drug treatment is not accessible Social Standing 5: Among the most respected in the com- of Processing munity, comparable with civic and religious Managers leaders and professionals, such as doctors and lawyers 4: Comparable to management and white- collar jobs 3: Comparable to skilled labor jobs 2: Comparable to unskilled blue-collar or service jobs 1: Among the least respected, such as slaves or indentured servants Nonresident 5: 91–100% local Proportion of ex-vessel value processed by Ownership of 4: 70–90% local regionally owned processing capital Processing Capacity 3: 35–70% local 2: 5–35% local 1: Virtually no local processing ownership Processing Workers Earnings Compared 5: More than 50% above the regional average Ratio of annual earnings per worker to the to National Average 4: Between 10% and 50% above regional regional average earnings. Earnings average 3: Within 10% above the regional average 2: Between 50% and 90% of the regional average 1: Less than half of the regional average Worker Wages 5: More than 50% above the regional average Ratio of worker’s average daily wage to aver- Compared to 4: Between 10% and 50% above regional age daily wage in their economic sphere (e.g., Nonﬁ shery Wages average village if all economic activity is within the vil- 3: Within 10% above the regional average lage, but nation participates in national markets as a consumer). 2: Between 50% and 90% of the regional average 1: Less than half of the regional average

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS 83

TABLE B.1: FPIs Output Indicators Revision (Revision and Additions Are Highlighted) (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Social Standing of 5: Among the most respected in the com- Processing Workers munity, comparable with civic and religious leaders and professionals, such as doctors and lawyers 4: Comparable to management and white- collar jobs 3: Comparable to skilled labor jobs 2: Comparable to unskilled blue-collar or service jobs 1: Among the least respected, such as slaves or indentured servants Education Access 5: Higher education is accessible The level of education attained by (available 4: High school–level education or advanced and affordable) the families (i.e., children) of technical training is accessible processing workers. 3: Middle school–level education or simple technical training is accessible 2: Basic literacy and arithmetic training is accessible 1: Formal education is not accessible Access to Health 5: Global standard treatment for illness is The level of health care accessible to (available Care accessible and affordable) the families of processing 4: Licensed doctors provide trauma, surgical, workers. and drug treatments 3: Nurses or medical practitioners provide emergency and routine drug treatments 2: Basic and simple drug treatment is accessible 1: Medical or drug treatment is not accessible Proportion of 5: 91–100% local “Local” is defi ned as coming from, and spend- Nonresident 4: 70–90% local ing their earnings within, the local fi shing Employment 3: 35–70% local community. Nationals who are transient nonresidents, or are considered outsiders in the 2: 5–35% local fi shing community, are not local. 1: Virtually no local workers Worker Experience 5: More than 10 years (skilled career crew) Average years of experience of workers. 4: 5–10 years 3: 3–5 years 2: 1–3 years 1: 0 full years of experience (mostly new crew each season)

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 84 APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS

TABLE B.2: FPIs Input Indicators Revision (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Macro Factors General Environmental 5: EPI of 69–100 The EPI considers factors such as disease, Environmental Performance Index 4: 62–69 water quality, air pollution, biodiversity, natural Performance (EPI) 3: 56–62 resources, and climate change. The EPI ranges from 1 to 100. Score is by 2010 EPI quintile. 2: 47–56 1: 1–47 Exogenous Disease and 5: Harvest unaffected by disease Extent to which harvest value is affected by Environmental Pathogens 4: Harvest reduced by less than 10% disease or pathogens, such as lobster shell Factors 3: Harvest reduced by 10–30% disease or red tides. 2: Harvest reduced by more than 30% 1: Harvest almost completely closed by shocks Natural Disasters 5: Harvest unaffected by disaster Extent to which harvest value is affected and Catastrophes 4: Harvest reduced by less than 10% by factors such as earthquakes, volcanoes, 3: Harvest reduced by 10–30% hurricanes. Harvest can be affected through stock effects of damage to harvest capacity. 2: Harvest reduced by more than 30% Gradual effects of climate change (e.g., shifts in 1: Harvest almost completely closed by shocks temperature or salinity) are not included here.

Pollution Shocks 5: Harvest unaffected by shocks/piracy/ Extent to which harvest value in the reference and Accidents pollution year is affected by an episodic pollution event, 4: Harvest reduced by less than 10% such as an oil spill or piracy. 3: Harvest reduced by 10–30% 2: Harvest reduced by more than 30% 1: Harvest almost completely closed by shocks Level of Chronic 5: Not detectable Extent to which chronic pollution, such as from Pollution (Stock 4: Minimal detectable levels industrial or agricultural runoff, affects the Effects) 3: High levels detected stock. 2: Pollution affects stock growth 1: Pollution leading to severe stock decline Level of Chronic 5: No consumption affected Extent to which chronic pollution limits Pollution 4: Minimal consumption affects consumption. (Consumption 3: Ofﬁ cial consumption advisories Effects) 2: Temporarily ban harvest for consumption 1: Completely closed for consumption Country-Level Governance Quality 5: Above 0.92 (highest-performing 2010 Average of four indicators in the World Bank’s Governance quintile) Governance Indicators, each scored [−2.5,2.5] 4: 0.10 to 0.92 • Government Effectiveness 3: −0.43 to 0.10 • Regulatory Quality • Rule of Law 2: −0.81 to −0.43 • Control of Corruption 1: Below −0.81 (lowest-performing 2010 quintile) Governance 5: Above 0.96 (highest-performing 2010 Average of two indicators in the World Bank’s Responsiveness quintile) Governance Indicators, each scored [−2.5,2.5] 4: 0.41 to 0.96 • Voice and Accountability 3: −0.24 to 0.41 • Political Stability 2: −0.82 to −0.24 1: Below −0.82 (lowest 2010 quintile) Country-Level Index of Economic 5: EIF 69.2–100 Country’s scone Heritage Foundation’s Index Economic Condition Freedom 4: 62.5–69.1 of Economic Freedom. A detailed discussion 3: 57.1–62.4 of these factors and methodology is found in Miller and Holmes (2009). Scoring based on 2: 50.5–57.0 2010 percentile. 1: 1–50.5 Gross Domestic 5: Greater than US$30,000 Dollars are 2010 US$. Product (GDP) Per 4: Greater than US$12,400 Capita 3: Greater than US$6,000 2: Greater than US$2,500 1: Less than US$2,500

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS 85

TABLE B.2: FPIs Input Indicators Revision (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Property Rights and Fishing Access Proportion of 5: Virtually all The proportion of total harvest that is under Responsibility Rights Harvest Managed 4: 70–95% limited-access fi shing regulation. This can Under Limited 3: 35–70% include both regulatory and de facto access Access rights. Likely 1 if no permits issued, or permits 2: 5–35% issued without limits. 1: Virtually none Transferability Index 5: Very Strong: Fully transferable through NA if no limited access. well-established, effi cient market institutions 4: Strong: Fully transferable, but institutions are poor or illiquid 3: Moderate: Transferable, but with severe restrictions on who can hold, or how much 2: Weak: Transferable only under highly restricted and limited condition 1: Access rights not transferable Security Index 5: Very Strong: Access rights are completely Extent to which the government reduces or respected and are not diluted (e.g., by issuing dilutes the access rights. Even if no limited more access rights) by the government access, can be scored to refl ect the extent of 4: Strong: Rights are mostly respected by the other restrictions that limit erosion of access government; generally survive changes in right (though probably low). government administration 3: Moderate: Rights are at risk of retraction or dilution with changes in administration 2: Weak: Rights are highly diluted or there is high political uncertainty 1: None: Access rights are not protected Durability Index 5: Very Strong: >10 years to perpetuity Duration of the property right. Can be scored 4: Strong: 6 to 10 years to refl ect harvesters’ expectations of continued 3: Moderate: 1 to 5 years access, even if access licenses/rights are given without limits. 2: Weak: Seasonal 1: None: None/daily Flexibility Index 5: Very Strong: All decisions on time of Ability of right holders to be fl exible in the tim- harvest, gear used, and handling practices are ing and production technology employed. Low in the owner’s control scores will refl ect restrictions that force inef- 4: Strong: Minimal restrictions on time of fi ciencies. Even without limited access, there harvest and technology may still be scorable restrictions (gear, seasons, 3: Moderate: Modest restrictions on time of areas) that limit access fl exibility. harvest and technology 2: Weak: Signifi cant restrictions on time of harvest and technology 1: Time of harvest, gear used, and handling practices are not in the owner’s control Exclusivity Index 5: Very Strong: All decisions and access to the Ability of right holders to exclude those who do property are controlled by the right’s owner (rather not have the right from affecting the resource than those without rights, competing resource or market. Can still be scored to capture extent users [like recreational or by-catch fi sheries]) of de facto intrusion if access is not limited. 4: Strong: Little intrusion on resource by those without rights 3: Moderate: Modest intrusion on resource by those without rights 2: Weak: Signifi cant intrusion on resource by those without rights 1: None: Completely unrestricted open access, despite putative right Harvest Rights Proportion of 5: Virtually all The proportion of total harvest that is under Harvest Managed 4: 70–95% rights-based fi sheries management. Rights with Rights-Based 3: 35–70% include those for some fi xed quantity or fi sh (e.g., Management a quota), or a fi xed share of landings in an area 2: 5–35% (e.g., a TURF gives 100% of landings in an area). 1: Virtually none Rights can be held by individuals or communities, and can include de facto and de jure rights. (Input rights, like trap tags, are strong access rights, but not harvest rights included in this section.)

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 86 APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS

TABLE B.2: FPIs Input Indicators Revision (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Transferability Index 5: Very Strong: Fully transferable through Probably NA if there is no harvest right. well-established, effi cient market institutions 4: Strong: Fully transferable, but institutions are poor or illiquid 3: Moderate: Transferable, but with severe restrictions on who can hold, or how much 2: Weak: Transferable only under highly restricted and limited condition 1: Access rights not transferable Security Index 5: Very Strong: Harvest rights are completely Extent to which the government reduces or respected and are not diluted (e.g., by issuing dilutes the harvest rights. Probably NA if there more harvest rights) by the government is no harvest right. 4: Strong: Rights are mostly respected by the government; generally survive changes in government administration 3: Moderate: Rights are at risk of retraction or dilution with changes in administration 2: Weak: Rights are highly diluted or there is high political uncertainty 1: None: Harvest rights are not protected Durability Index 5: Very Strong: >10 years to perpetuity Duration of the harvest right. Probably NA if 4: Strong: 6 to 10 years there is no harvest right. 3: Moderate: 1 to 5 years 2: Weak: Seasonal 1: None: None/daily Flexibility Index 5: Very Strong: All decisions on time of Ability of right holders to be fl exible in the harvest, gear used, and handling practices are timing and production technology employed. in the owner’s control Probably NA if there is no harvest right. 4: Strong: Minimal restrictions on time of harvest and technology 3: Moderate: Modest restrictions on time of harvest and technology 2: Weak: Signifi cant restrictions on time of harvest and technology 1: Time of harvest, gear used, and handling practices are not in the owner’s control Exclusivity Index 5: Very Strong: All decisions and access to the Ability of right holders to exclude those who do property are controlled by the right’s owner not have the right from affecting the resource or (rather than those without rights, competing market. Probably NA if there is no harvest right. resource users [like recreational or by-catch fi sheries]) 4: Strong: Little intrusion on resource by those without rights 3: Moderate: Modest intrusion on resource by those without rights 2: Weak: Signifi cant intrusion on resource by those without rights 1: None: Completely unrestricted open access, despite putative right Comanagement Collective Action Proportion of 5: Virtually all Proportion of harvest where the primary Harvesters 4: 70–95% harvesters consider themselves to be members in Industry 3: 35–70% of organized associations. Organizations 2: 5–35% 1: Virtually none

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS 87

TABLE B.2: FPIs Input Indicators Revision (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Harvester 5: Harvesters effectively determine allocation Subjective measure of how much infl uence Organization of resources harvesting organizations have, either directly or Infl uence on Fishery 4: Harvesters have signifi cant infl uence in through political collective action, on manage- Management and determining allocation ment and access to the fi shery. Access 3: Harvesters are politically active, but not controlling 2: Social or informal monitoring participation and allocation 1: No active effort or capacity to infl uence management Harvester 5: Harvesting organizations cooperatively Subjective measure of how much infl uence Organization determine marketing and operational details harvesting organizations have, either directly or Infl uence on 4: Extensive joint marketing through political collective action, on manage- Business and 3: Large subgroups facilitating marketing; joint ment and access to the fi shery. Marketing purchasing 2: Small subgroups cooperating in purchasing or operations 1: No active effort or capacity to infl uence business operations Participation Days in Stakeholder 5: More than 24 days per year Days in stakeholder meetings per year spent Meetings 4: 12–24 by a participant in the fi shery who is active in 3: 6–11 management. Note these are days with meetings, not FTE days. Include meetings of councils 2: 1–5 with public participation. 1: None Industry Financial 5: Virtually all Proportion of the fi shery management budget Support for 4: 50–95% paid for by the harvesting or processing sector. Management 3: 5–50% 2: 1–5% 1: None Community Leadership 5: Widely recognized individual leader, The fi shing community has strong leadership or small group of individual leaders, who capable of envisioning and implementing ef- provides vision for management and is able to fective management (this role may be provided attract stakeholders to that vision by processors). Bins 2 and 4 may be scored as 3: Ex offi cio leadership stations that maintain midpoints between descriptions. management institutions, but are not currently providing strong vision 1: No recognized leader providing vision for range of fi shery stakeholders Social Cohesion 5: 6 points The resource users are socially connected 4: 5 points and interact regularly in fi shing and nonfi sh- 3: 3–4 points ing spheres. Score one point for each of the following: 2: 1–2 points Common locations for gathering and 1: 0 points meeting on a regular basis for nonfi shery business, culture, or commerce Presence of shared social norms that facilitate transactional trust Presence of shared public institutions (government, schools, markets) Absence of differences in social status or caste that prevent interaction Absence of religious differences and/or confl ict Absence of cultural, ethnic, or tribal differences that obstruct interaction Gender Business 5: Business management dominated by Extent of women’s infl uence (not just participa- Management women tion) in the management of harvesting and Infl uence 3: Business management is balanced between post-harvest businesses, including decision men and women making, ownership, and fi nancing. This will not 1: Business management is dominated by men typically include development project staff or other “outsiders.”

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 88 APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS

TABLE B.2: FPIs Input Indicators Revision (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Resource 5: Resource management and allocation Extent of women’s infl uence (not just par- Management process is dominated by women ticipation) in the resource management and Infl uence 3: Resource management and allocation allocation process. Infl uential people can be process is balanced between men and women members of the harvesting or post-harvest 1: Resource management and allocation sectors, scientists, or community members who process is dominated by men do not work in the fi shing sector. This will not typically include development project staff or other “outsiders.” Labor Participation 5: 80%–100% are women Proportion of women involved in the harvest in Harvest Sector 4: 60%–80% sector labor pool, either as captains or crew. 3: 40–60% 2: 20–40% 1: Less than 20% are women Labor Participation 5: 80%–100% are women Proportion of women in the post-harvest sector in Post-Harvest 4: 60%–80% labor pool, as buyers, sellers, managers, or Sector 3: 40–60% workers. 2: 20–40% 1: Less than 20% are women Management Management InputsManagement 5: Less than 5% of ex-vessel value Government, industry, and aid agency expendi- Expenditure to 4: 5–25% tures on fi shery management activities includ- Value of Harvest 3: 26–50% ing research, enforcement, and management capacity development (but not infrastructure) 2: 51–100% 1: More than the value of harvest Enforcement 5: Strong capacity to enforce regulations for Enforcement capacity includes that of the Capability entire coastline, both nearshore and offshore government or fi shing organization, or any other 4: Capacity to enforce regulations for near- group that can effectively enforce management. shore, but limited offshore 3: Capacity of enforce nearshore in most of the ports, very limited capacity offshore 2: Capacity or enforce only in major ports, minimal effective capacity offshore 1: No capacity to enforce Management 5: Stock’s life cycle within a single manage- Extent to which the life cycle or range of a stock Jurisdiction ment jurisdiction, or multiple jurisdictions, has can be managed under a single coordinated an effective, formal system for joint manage- plan, or through which ineffective management ment throughout the range in one jurisdiction can undermine efforts in 4: Effective coordination institution facilitates another. joint management throughout the region of primary importance 3: There is a coordination structure, but it does not have binding authority 2: Informal institutions for coordinating management 1: Jurisdictions effectively manage the same stock independently Level of Subsidies 5: No subsidies Receive one point each for four key categories 4: 1 subsidy category of “bad” subsidies: fuel subsidies, fi sh access 3: 2 subsidy categories payment subsidies; capital or capital loan subsidies; and price support (through inputs or 2: 3 subsidy categories direct payments) 1: 4 subsidy categories

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS 89

TABLE B.2: FPIs Input Indicators Revision (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Data Data Availability 5: Annual (or other appropriate period) sampling for stock assessment, landings, and economic data available 4: Consistently collected and comprehensive landings and price data available 3: Limited reliable landings or price data available; data irregularly collected or based on large samples 2: Available data based on small samples, or missing data, signifi cantly impedes making inferences needed for management 1: No data are centrally collected Data Analysis 5: Biological and economic data used in prospective analysis of management 4: Biological data dominate simple prospective analysis 3: Biological or economic data are used to track performance, retrospectively 2: Data are used inconsistently or irregularly 1: No data analysis conducted in management process Management MPAs and 5: More than 25% Percentage of area used in species life cycle Methods Sanctuaries 4: 10–25% where fi shing is closed or highly restricted. 3: 5–10% Include total area under rolling or seasonal closures. 2:Less than 5% 1: None Spatial 5: 75–100% Proportion of fi shing ground managed through Management 4: 50–75% either direct control by TURF or designated 3: 25–50% community management regions, or through indirect control by limiting access points (launch 2:Less than 25% or landing sites) 1: None

Fishing Mortality 5: Hard TAC established against which nearly Extent to which ﬁ shing mortality is an explicit Limits all ﬁ shing mortality is counted element of management. 4: Hard TAC established, but there are sources of unaccounted mortality totaling less than 10%; or TAC is adjusted from biological guideline to compensate for sources of greater unaccounted mortality 3: There is a guideline mortality level that is generally met; hard TAC exceeded 10–50% by unaccounted mortality 2: Frequently exceeded guideline; hard TAC exceeded by more than 50% 1: Fishery does not have an explicitly mortality target Post-Harvest Markets and Landings Pricing 5: Virtually all Proportion of the harvest sold in a transparent Market Institutions System 4: 70–95% daily competitive pricing mechanism, such as 3: 35–70% an auction or centralized ex-vessel to wholesale market wherein sellers interact with many buy- 2: 5–35% ers and prices are public information. 1: Virtually none Availability of 5: Complete, accurate price and quantity Scores the ability of the market to provide Ex-Vessel Price information available to market participants timely information to harvesters to which they and Quantity immediately can react by changing what or when they land. Information 4: Reliable price and quantity information is available prior to the next market clearing 3: Price information is available but no timely quantity information 2: Price and quantity information are inaccurate, lagged, or available to only a few 1: No information available

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 90 APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS

TABLE B.2: FPIs Input Indicators Revision (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Number of Buyers 5: Highly competitive Typical number of buyers of ex-vessel product 4: 4–6 buyers accessible to a seller in a given market. If 3: 2–3 competing buyers there are many landing sites, this is the buyers per landing site. If harvesters are generally 2: A small number of coordinating buyers indentured to a single buyer through credit 1: There is one buyer relationships, there is one buyer.

Degree of Vertical 5: Virtually all Proportion of harvest where the primary har- Integration 4: 70–95% vester and primary processor/distributor are the 3: 35–70% same fi rm. The role of vertical integration here is to ensure harvest and delivery of fi sh under 2: 5–35% a common management, increasing effi ciency 1: Virtually none over asynchronous market transactions.

Level of Tariffs 5: Virtually none Offi cial tariff rates charged for exports or 4: 0.5–2.5% imports to consumption markets. 3: 2.5–5% 2: 5–10% 1: Over 10% Level of Nontariff 5: Are not used to limit international trade Nontariff barriers include quantity restrictions Barriers 4: Have very limited impact on international (import quotas), regulatory restrictions, invest- trade ment restrictions, customs restrictions, and 3: Act to impede some international trade direct government intervention. 2: Act to impede a majority of potential international trade 1: Act to effectively impede a signifi cant amount of international trade Infrastructure International 5: Ocean/Air shipping services are readily The quality of the service available to access Shipping Service available at lower than average rates global high-value markets, such as the United 4: Ocean/Air shipping services are readily States or European Union (regardless of available at average rates whether product currently exported). Average of 3: Ocean/Air shipping services are readily the two measures (one for ocean shipping and available at higher than average rates another one for air shipping) on the left. 2: Ocean/Air shipping services are available but irregular 1: International shipping is not available at reasonable rates Road Quality Index 5: High-quality paved roads and extensive Travel time-weighted average road quality highways between the fi shery’s primary port and the 4: Primarily paved two-lane roads and moder- most practical export shipping port for exported ate highway product. 3: Primarily paved two-lane roads and minimal highway 2: Paved two-lane roads and well-graded gravel roads 1: Poorly maintained gravel or dirt roads Technology 5: Cell phones/fi sh fi nders/computers/pro- Adoption cessing/production technology are readily available 4: Cell phones/fi sh fi nders, and so forth, are common, but some other technology is not always available 3: Cell phones/fi sh fi nders, and so forth, are common, but some other technology is diffi cult to obtain 2: Cell phones are common, but most other technology is prohibitive 1: Very little advanced technology is accessible for the industry

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX B — SUGGESTED REVISION AND ADDITIONAL INDICATORS 91

TABLE B.2: FPIs Input Indicators Revision (Continued) COMPONENT DIMENSION MEASURE SCORE SYSTEM ADDITIONAL EXPLANATION Extension Service 5: Broad extension service with fi eld offi ces Degree to which government or NGOs help and close linkage with research community harvesters improve fi shing techniques or man- 4: Extension service with moderate fi eld cov- agement through extension activities. erage and adequate linkage with the research community 3: Extension service, but with weak links to the research community 2: Minimal, poorly supported extension service 1: No extension service Reliability of 5: Reliable electrical grid provides power in Utilities/Electricity suffi cient quantity to prevent product loss 4: Processors rely on grid, but maintain backup generators 3: Supply chains rely on own generation capacity 2: Supply chain sometimes loses product due to condition or irregular fuel supply for generators 1: Reliable generators or fuel supply not available Access to Ice and 5: Ice is available in various forms and in Refrigeration suffi cient capacity to support fresh icing of all fi sh that needs to be iced 4: Ice is available in various forms, but quantity limits prevent applying to entire catch throughout supply chain 3: Ice is available in limited form and quantity, and thus applied only to most valuable portions of catch 2: Ice is available but capacity constrained; ice often reused, or used through melting stage 1: Ice quantities are extremely limited

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52

APPENDIX C — MILESTONES OF FISHERY PERFORMANCE INDICATORS (FPIs) 93

Appendix C: MILESTONES OF FISHERY PERFORMANCE INDICATORS (FPIs)

C.1. CONCEPT WORKSHOP (FEBRUARY 10, C.2. APPLICATION WORKSHOP (MAY 11, 2011, 2010, LONDON) HONOLULU) Summary: ﬁ sheries experts reviewed the concept and Summary: 12 ﬁ sheries economist reported 15 pilot three initial case studies. Recommendations were case studies of FPIs, mostly in Western countries. made regarding the scope and content. Recommendations were made on the applicability, Participant list: scoreability, weighting system, quality control, • James L. Anderson, University of Rhode Island and so on. • Christopher M. Anderson, University of Rhode Participant list: Island • James L. Anderson, World Bank • Mike Arbuckle, World Bank • Christopher M. Anderson, University of Rhode • Tim Bostock, DFID Island • Steve Cunningham, IDDRA • Jingjie Chu, World Bank • Aaron Hatcher, University of Portsmouth • Gunnar Knapp, University of Alaska • Arthur Neiland, IDDRA • Gil Sylvia, Oregon State University • Stetson Tinkham, International Coalition of Fisheries • Sherry Larkin, University of Florida Associations (ICFA) • Frank Asche, University of Stavanger • James Wilen, Department of Agricultural and • Atle Guttormsen, Norwegian University of Life Resource Economics, UC Davis Sciences • Erin Priddle, DeFRA • Matt Freeman, Louisiana State University • Richard Parsons, DeFRA • Ganesh Thapa, University of Rhode Island • Charlotte Tindall, MRAG/Indep • Tim Ward, South Australian Research and • Pam Masons, DEFRA Development Institute • Nigel Edwards, FDF • Daniel Huppert, University of Washington • Frank Asche, University of Stavanger • Eric Thunberg, National Oceanic and Atmospheric • Ragnar Tveteras, University of Stavanger Administration • Mike Parker, Fishing business representative, Young’s Bluecrest • Carl Christian Smidt, OECD, Fisheries economist • Heike Baumüller, Chatham House

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52

APPENDIX D — FPIs APPLICATION—OUTPUT RESULTS 95

Appendix D: FPIs APPLICATION—OUTPUT RESULTS

INDONESIA PHILIPPINES ICELANDIC COMPONENT DIMENSION MEASURE BSC BSC LOBSTER Ecologically Fish Stock Health Proportion of Harvest with a Third-Party Certifi cation 1 1 5 Sustainable Fisheries and Environmental Fish Stock Sustainability Index (NMFS) 1 1 5 Performance 1.8 1.3 4.8 Percentage of Stocks Overfi shed 1 2 5 Nonlandings Mortality 4 1 4 Harvest Sector Harvest Performance Landings Level 2 1 5 Performance Excess Capacity 11.7 22.7 5 5.0 Season Length 2 5 5 Harvest Asset Ratio of Asset Value to Gross Earnings 1 1 5 Performance Total Revenue versus Historic High 3 2 5 Asset (Permit, Quota) Value versus Historic High 5 5 2 3.2 3.2 4.2 Borrowing Rate Relative to Risk-Free Rate 5 5 4 Source of Capital 2 2 5 Functionality of Harvest Capital 3 4 4 Risk Exposure Annual Total Revenue Volatility 3 3 5 Annual Landings Volatility 3 5 5 Intra-annual Landings Volatility 3 5 5 Annual Price Volatility 43.7 54.3 5 4.9 Intra-annual Price Volatility 4 5 5 Spatial Price Volatility 5 3 5 Contestability and Legal Challenges 4 4 4 Owners, Permit Earnings Compared to National Average Earnings 5 2 4 Holders, and Captains Fishery Wages Compared to Nonfi shery Wages 5 1 4 Education Access 4 4 5 4.0 2.8 4.5 Access to Health Care 2 2 5 Social Standing of Boat Owners and Permit Holders 5 3 4 Proportion of Nonresident Employment 3 5 4 Crew Earnings Compared to National Average Earnings 5 3 5 Fishery Wages Compared to Nonfi shery Wages 5 3 5 Education Access 2 2 5 Access to Health Care 2 2 5 3.5 3.3 4.3 Social Standing of Crew 2 2 3 Proportion of Nonresident Employment 3 5 3 Crew Experience 4 4 4 Age Structure of Harvesters 5 5 5

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 96 APPENDIX D — FPIs APPLICATION—OUTPUT RESULTS

INDONESIA PHILIPPINES ICELANDIC COMPONENT DIMENSION MEASURE BSC BSC LOBSTER Post-Harvest Market Performance Ex-Vessel Price versus Historic High 2 4 5 Performance Final Market Use 4 4 4 International Trade 5 3 5 Final Market Wealth 5 5 5 3.7 3.3 4.3 Wholesale Price Relative to Similar Products 4 2 3 Capacity of Firms to Export to the United States and 545 European Union Ex-Vessel to Wholesale Marketing Margins 1 1 4 Processing and Yield of Processed Product 5 2 4 Support Industry Performance Capacity Utilization Rate 5 3 4 Product Improvement 55.0 53.2 5 4.4 Regional Support Businesses 5 1 5 Time to Repair 5 5 5 Post-Harvest Asset Borrowing Rate Relative to Risk-Free Rate 4 5 4 Performance Source of Capital 23.3 24.0 4 4.2 Age of Facilities 4 5 4 Processing Owners Earnings Compared to National Average Earnings 5 4 5 and Managers Manager Wages Compared to Nonﬁ shery Wages 3 3 4 Education Access 5 5 5 4.2 4.3 3.7 Access to Health Care 5 5 5 Social Standing of Processing Managers 3 4 4 Nonresident Ownership of Processing Capacity 4 5 3 Processing Workers Earnings Compared to National Average Earnings 3 3 3 Worker Wages Compared to Nonﬁ shery Wages 3 3 4 Education Access 3 3 5 Access to Health Care 33.4 23.0 5 3.7 Social Standing of Processing Workers 3 3 2 Proportion of Nonresident Employment 5 4 3 Worker Experience 4 3 4 Note: Scores below 2 are highlighted as they are within the warning zone, indicating immediate actions need to be taken with regard to those aspects.

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) APPENDIX E — FPIs APPLICATION—INPUT RESULTS 97

Appendix E: FPIs APPLICATION—INPUT RESULTS

INDONESIA PHILIPPINES ICELANDIC COMPONENT DIMENSION MEASURE BSC BSC LOBSTER Macro Factors General Environmental Environmental Performance Index (EPI) 3 4 4 3.0 4.0 4.0 Performance Exogenous Environmental Disease and Pathogens 5 5 5 Factors Natural Disasters and Catastrophes 3 3 5 Pollution Shocks and Accidents 34.2 54.6 5 5.0 Level of Chronic Pollution (A) 5 5 5 Level of Chronic Pollution (B) 5 5 5 Governance Governance Indicator—Effectiveness 2 3 5 2.0 2.5 5.0 Governance Indicator—Voice and Accountability 2 2 5 Economic Condition Index of Economic Freedom 3 3 4 2.5 2.0 4.5 Gross Domestic Product (GDP) Per Capita 2 1 5 Property Rights and Access Proportion of Harvest Managed Under Limited 1 1 5 Responsibility Access Transferability Index 1 1 5

Security Index 42.5 11.7 3 4.2 Durability Index 3 1 3 Flexibility Index 3 5 5 Exclusivity Index 3 1 4 Harvest Proportion of Harvest Managed with Rights-Based 1 1 5 Management Transferability Index 1 1 5

Security Index 42.7 11.7 3 4.0 Durability Index 3 1 2 Flexibility Index 3 5 5 Exclusivity Index 4 1 4 Collective Action Participation in Harvester Organizations 4 1 5 Harvester Organization Inﬂ uence on Fishery 323 Management and Access 3.7 1.3 4.3 Harvester Organization Inﬂ uence on Business and 415 Marketing Management Management Expenditure to Value of Harvest 5 5 5 Management Employees to Value of Harvest n/a 1 5 Management Employees per Permit Holder n/a 1 5 Inputs 3.7 2.6 5.0 Research as a Proportion of Fisheries Management 115 Budget Level of Subsidies 5 5 5

AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 52 98 APPENDIX E — FPIs APPLICATION—INPUT RESULTS

INDONESIA PHILIPPINES ICELANDIC COMPONENT DIMENSION MEASURE BSC BSC LOBSTER Data Data Availability 3 1 5 2.5 1.5 5.0 Data Analysis 2 2 5 Participation Days in Stakeholder Meetings 3 2 2 1.5 1.5 3.0 Industry Financial Support for Management 1 1 4 Post-Harvest Markets and Market Landings Pricing System 4 1 2 Institutions Availability of Ex-Vessel Price and Quantity 215 Information

Number of Buyers 53.2 52.3 2 3.5 Degree of Vertical Integration 3 1 2 Level of Tariffs 1 1 5 Level of Nontariff Barriers 4 5 5 Infrastructure International Shipping Service 4 3 4 Road Quality Index 2 2 4 Technology Adoption 4 2 5 3.5 2.3 4.7 Extension Service 1 2 5 Reliability of Utilities/Electricity 5 2 5 Access to Ice and Refrigeration 5 3 5

EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) REFERENCES 99

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EVALUATION OF NEW FISHERY PERFORMANCE INDICATORS (FPIs) Agriculture and Rural Development (ARD) 1818 H Street, NW Washington, D.C. 20433 USA ARD AGRICULTURE AND Telephone: 202-477-1000 RURAL DEVELOPMENT Internet: www.worldbank.org/ard