IOP/TFI:H/79 I 35

Technical Reports No. 35 (restricted)

REVITALIZATION OF THE MAURITIAN BANK FISHERY AN APPRAISAL

A REPORT PREPARED BY:

U.N. Wijkstrom and T. Kroepelien

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS

INDIAN OCEAN PROGRAMME

Rome, November 1979 The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delim~tation of its frontiers or boundaries.

Bibliographic Entry:

Wijkstr8m, U.N. and T. Kroepelien (1979) Tech.Rep.Indian Ocean Programme, (25):56 p. Revitalization of the Mauritian Bank Fishery. An Appraisal

Vessel economics; Fishery development. Fishery economics. Fishery management. Fishery enterprises. Mother ships. Mauritius.

The copyright in this book is vested in the Food and Agriculture Organization of the United Nations. The book may not be reproduced, in whole or in part, by any method or process, without written permission from the copyright holder. Applications for such permission, with a statement of the purpose and extent of the reproduction desired, should be addressed to the Director, Pub~ications Division, Food and Agriculture Organization of the United Nations, Via delle Terme di Caracalla, 00100 Rome, Italy.

(Q FAO 1980 - iii -

ABSTRACT

In response to a request from the Govermnent of Mauritius, the FAO/UNDP Indian Ocean Fishery Survey and Development Progranune sent two consultants to advise on ways and means of revitalizing the Mauritian off-shore bank fishery. The report concludes that the decline in the bank fishery is due more to human problems than to changes in fishing conditions, and recommends that business managers; fishermen and government officials cooperate in implementing an action plan to prepare for off-shore fisheries. The nature of such an action plan is outlined in the report. - iv -

CONTENTS Page

1. Origin and Purpose of the Mission 1

2. Summary of Conclusions and Recolll!l1endations 1

3. Mauritius Off-shore Bank Fisheries - The Problem 2

4. Reasons for the Decline in the Mauritian Bank Fishery 3

5. The Bank Fishery - Constraints on Development 6

6. Fisheries in the National Context: An Evaluation of

Alternative Policies for Assuring Fish Supply to

Mauritius 7

7. Strategy for Development of National Off-shore Fisheries 10

8. Action Prograrmne to Prepare for Off-shore Fisheries 11

APPENDIXES

I. Definition of the Mission 14

II. Mission Execution 15

III. A Description of the Mauritian Off-shore Bank Fisheries 17

IV. Distribution and Consumption of Frozen Bank Fish 24

V. Potential of Mauritian Fisheries other than the Bank

Fisheries 27

VI. Vessel Budgets 29

HI. Evaluation of Long-term Policies for Bank Fisheries 41

VIII. Type of Vessel 47

IX. Outline of a Short-term Action Programme 51 - I -

!. ORIGIN AND PURPOSE OF THE MISSION

For some time the Government of Mauritius has been view.ing with concern the decline of the Mauritian owned and managed bank fishing industry. It has also become aware that surface swimming tuna is not exploited anywhere near its potential yield in the Western Indian Ocean and that there might be a future for the country's fishing industry in thi~ area.

The Ministry of Fisheries considers state participation a means to resurrect the bank fishery. It is felt that a national fishing company could be more efficient than most private bank fishing companies and that it would be able to attract technical and financial aid on concessionary tenns; something which private fishing companies usually cannot.

The bank fishery was discussed with an IOP mission which visited Mauritius in May 1979. It was then agreed that later in the year another IOP mission would review the bank fishery anu identify alternative government policies for revitalizing the industry. A national fishing company would be studied by the mission as one way of solving the problems of the industry.

It was subsequently decided that the mission would consist of U.N. Wijkstrom, Fishery Industry Officer (Economics}, FAO, Rome, and T. Kroepelien, FAO Fisheries Adviser to the Government of the Seychelles.

This report, addressed to the Government of Mauritius, through the Ministry of Fisheries, contains the findings, ,conclusions, and reconnnendations of Messrs. Wijkstrom and Kroepelien who visited Mauritius in September and October 1979.

The terms of reference agreed upon for the Mission are contained in Appendix I. Appenuix II aescribes in abstracted form the contacts made by the mission during its stay in Mauritius. Conclusions and recommendations are summarized in the following section.

'L. SUMMARY OF CONCLUSIONS AND RECOi:,IMENDATIONS

2.1 Conclusions

2.1.1 Situation of the bank fisheries

There are no reasons to believe that the Mauritian bank fishing industry will recover on its own effor~s. It seems likely that Mauritian-owned vessels will not be exploiting the larger off-shore banks, within the near future, unless something is done to support the industry.

2.1.2 Reasons for decline of the Mauritian bank fishery

The root cause of the decline of the industry is human, not biological or technological. In particular, the decline of the industry has been caused by inexperienced company management, use of second hand vessels as mother ships, a profit squeeze, insufficient government support to the industry, and inexperienced union leadership.

2.1.3 Constraints on solutions

There are no quick solutions to the (long-·growing) problems of the bank fishing i.ndustry. There is no single action or measure which will save the industry; the solution must come in the form of a package deal or action programme requiring the efforts of managers, fishermen, union leaders, and government officers, There are no indications that a short-term action programme would be easier to implement through a national fishing company than through the Ministry of Fisheries working with management and unions. The bank fishery is limited by (a) a maximum harvestable catch of the order of 10 OOO tons per year, (b) reliance on manually operated handlines, and (c) a decrease in the average yield per fisherman and day as the fishery expands, It seems likely that the bank fishery will come under severe economic strain as time goes by; the mission doubts that it will be economically viable during the late 1990s. In one to two years' time, fisheries for surface swimming tunas (skipjack and small yellowf in) may be shown to be an economically more interesting proposi­ tion than the bank fisheries.

2.2 Recommendations

2.2.1 Objectives for government policy

It should be a Government policy or objective that an efficient off-shore fishery shall be developea by 1985 to identify the details of such a fishery and prepare the ground for its efficient conduct, a two year period of preparations (1980 and 1981) by Government, company management and unions will be necessary. The Government should negotiate with management and unions to develop for the 1980-1981 period a short-term action programme for creating national off-shore fisheries. Appendix IX contains the mission's views of the scope and content of a workable and effective programme.

2.2.2 Key parts of the short-term action programme

The key parts to such a programme are as follows:

(a) to educate and train Mauritians to make possible an efficient fishery, be it bank or tuna fisheries;

(b) to develop the information needed for detailed feasibility studies on (I) fisheries for skipjack and yellowfin, and (2) for bank fisheries with improved mother ships;

(c) to manage foreign and local bank fishing vessels so that total supplies of frozen bank fish reaches at least 3 kg per person and year from 1980 onwards; and

(d) to employ a naval architect to design the optimum mother ship, including a study of both the construction of new vessels and the use of second-hand vessels (e.g. tuna longliners or Atlantic long-distance trawlers).

3. MAURITIUS OFF-SHORE BANK FISHERIES: THE PROBLEM

At the time of this writing, the Mauritian Bank Fishery has virtually ceased to exist. The fishery had been in decline since the mid-1970s when nine mother ships were operating, The two largest ships stopped fishing in 1979 and at the start of the summer season (1979) only two smaller vessels were fishing, the smallest of which did not fish the larger and more distant banks.

Naturally the Government views these developments with concern. The industry at one time employed some 400 to 500 people and supplied 3 300 tons to the Mauritian market (1974). By permitting the purchase of bank fish from Korean vessels, fishing Mauritian waters, the Government has prevented this production problem from affecting consumers. Nevertheless, during 1979 ...there has been a shortage of "bank fish" in the local market; a shortage which in the short' run apparently can only be reduced through the use of more Korean vessels.

The Government is now faced with the problem of whether or not to try to restore the Mauritian bank fishery to create employment for those fishermen who used to work on the vessels. If not, Government must attempt to adapt ~hem to the requirements of other parts of the economy. Further, the Government must develop a long-term policy to obtain the volume and type of fish which traditionally has come from the banks. If it decic.les to restore the Mauritian bank fishery, the problem of how this best can be done remains,

4. REASONS FOR THE DECLINE IN ThE MAURITIAN BAJ.'i!K FISHERY

4.1 Principal Causes

The mission has identified five causes for the decline in the local bank fishing industry:

(i) management inexperienced in fishery ventures,

(ii) use of second-hand vessels not designed for bank fishery,

(iii) profit squeeze,

(iv) insufficient technical support from the Government to the industry, and

(v) inexperienced union leadership.

4.2 Inexperienced Management

Several of the bank fishing companies have employed managers experienced in industrial and commercial ventures. It is the mission's view that however well qualified and experienced, they suffer from a lack of experience in the fishing industry, and management has not contributed to the development of the bank fishery as much as one might have expected.

The companies operating the vessels have basically conceived the bank fishing as an extension of existing artisanal fisheries and not as a modern industrial operation using partly artisanal techniques. An industrially-oriented venture is in constant need of professional and specialized assistance to manage logistical and technical problems; it must be staffed with a homogeneous and motivated work force, loyal to common goals and values.

The larger vessels have carried as many as 80-100 persons to live together for 30-60 days. The personnel, although ideally having the common motivation of catching as many fish as possible in the shortest possible time, has been sharply divided into three categories: that is, officers, crew, and fishermen with concomittant status and pay packages.

The officers and, in particular, the captains have been on long-term contracts with salaries allowing only for a bonus complement of 10-30 percent of total pay. In the typical modern fishery such a share should be about 50 percent. Salaries for skippers in the bank fishery are typically below that which a successful skipper would earn on a similar ship in most other fishing nations,

The vessel crew have generally better quarters and food than the fisherman, They usually have contracts providing for 30 days termination notice, vacation pay provisions, overtime pay, but practically no bonus, The annual pay has been in the range of 10 OOO to 14 OOO Hau.Rs.

The fishermen undoubtedly have the heaviest workload, Most of them have been on 100 per­ cent production pay receiving between Mau.Rs, O. 90 and 1 ,00 per kg of fish delivered and have paid for their ovm fishing equipment. Their total pay has not exceeded that of an average crew member .,pn a yearly basis. No compensation has been paid for loss of catch due to mechanical breakdown or bad weather. They are signed on for individual fishing trips. Being casual labour, their status has been low in the eyes of management. The fishermen's earnings on board bank fishing vessels have increased at about the same rate as the earnings of the average Mauritian. However, as the fishermen started from a situation of underpay, he has not managed to close the income gap.

The living quarters for the fishermen have often been cramped and unsanitary and this has reduced the fishermen's ability to sustain prolonged trips,

4.3 Second-hand Vessels

The use of second-hand vessels has one great advantage and a number of disadvantages. It is the mission's belief that in the present case the number (and economic consequence) of the disadvantages has outweighed the advantages.

The great advantage of course is initial price. A number of the mother ships being usea in the bank fishery have been obtained inexpensively. Most have been purchased at what would have been no more than half the cost of a new vessel, and some for much less. Owners have spent money, subsequently, to refit and recondition the vessels,

In this manner, the entrepreneurs have managed to reduce their fixed costs. Depreciation (at least on the books) is comparatively small as are interest payments. However, the total reduction in initial investment is significantly reduced by the need for expensive repairs and maintenance. Thus, by buying a second-hand vessel, costs have been switched from fixed to recurrent, The cash outlay for repair and maintenance has been extremely high for many of the vessels_!/,

A real and not so visible cost is that of lost fishing days. One day in port for the Mauritian vessels is the equivalent of between 1/2 and 2/3 of a fishing day. Thus, for a vessel such as the LAPERLE III every additional day in port means about Mau.Rs. 16 OOO~/, less cash towards meeting fixed costs.

Some of the vessels have been ill adapted for bank fishing. For some, the cold store facilities are too large as the vessel would require excessively long expeditions to fill, given its limited capacity to carry pirogues and fishermen.

4.4 Profit Squeeze

While the price of fish has been allowed to increase at the rate of the consumer price index - with some delay - the price of a number of inputs has increased more rapidly. That is the case for salaries to crew and fishermen, cost of diesel and petrol, and the cost of spare parts, repair, and maintenance services (see Figure 3 in Appendix III),

Thus, n1anagement has been forced to obtain higher productivity. Essentially, this effort has been focused on the productivity of the "support system" (that is the mother ship and shore based operations), as the productivity of the fishermen when at sea can be considered fixed (at least in the short run). The required productivity increases have not been forthcoming.

In this context, it should be stressed that the entrepreneur has been penalized for not being a trader, Had he imported his products directly for resale, the Ministry of Price would have permitted him to pass on any c.i.f, price increases directly to his customers. As he is a manufacturer (in a sense), he has not been able to do so. He works under much more difficult economic conditions than the trader.

1I This is partly explained by the high rates charged by the company that operates the country's only dry dock 2/ See Appendix VI, Vessel Budgets Gross sales/day fishing: Ma,u.Rs. 41 OOO Surplus after covering recurrent costs/day: Mau.Rs. 25 OOO Loss per day in port: 2/ 3 times Mau. l{s. 25, OOO = Mau. Rs. 16 OOO The profit margin has been considerably reduced prior to the last price increase, which took effect early in September 1978. During the mid-1970s, companies managed to break even during some years. Possibly, the realization that every voyage brought in enough income to cover fixed costs, and the knowledge that the rate of utilization of assests was low (see Appendix III) kept management continuin8 its operations during 1977 and 1973.

4.5 Government Policy Towards Bank Fisheries

The absence of an announced, national fisheries policy and a long-term plan for develop­ ment of bank fisheries and the future supply of fish havemade it difficult for the Government of Mauritius to take active steps earlier to prevent the decline of the industry to its present level. A clearly defined policy would have enabled the Government to combine price increases with measures to improve work conditions within the industry. The reliance by the Government on regulating prices as its main means of influencing industry has failed.

In fact, Government policies are directed towards the weaker sections of the community; in the case of the bank fishery, by providing inexpensive fish; in case of the inshore and lagoon fishery, by providing a higher income (through high prices) than would appear justified (when compared with the effort of the bank fishery) for the artisanal fishermen,

Industry, as in most countries, complains about the lack of adequate support from Government. It is clear that dialogue has been difficult, and the mission is left with the feeling that there has been a general breakdown of communications between Government and industry.

It is obvious, however, that the Government should have been able to do better in a few respects.

Harbour facilities: The bank fishery has been treated less well by the Mauritius Marine Authority than have the Korean tuna long liners. While they have a part of the quay area and a cold store to themselves, the bank fishery has shared its quay with the inter-island cargo vessels and has not had access to any frozen storage at quay side, The industry has suffered as a result of the stevedores; i.e., by slow off-loading, pilfering, high costs, and the subsequent loss in fish quality. It should be said~ however, that the industry has not suffered catastrophically as a result of these difficulties in the harbour of Port Louis, but the difficulties have certainly contributed to the industry's ruin.

Fishing techniques: The managers of bank fishing companies are not aware of the extent and results of past Government work to identify new fishing techniques, Some are now considering the possibility of trawling, longlines, etc. not knowing that Government has done considerable work already trying out these methods.

Fish handling: Dame Berry constitutes about 80 percent of the fish landings, Fresh Dame Berry fetches a price which is about double that of frozen fish. There seem to have been only limited attempts to improve the quality of the frozen product. Few managers seem preoccupied with the quality of the frozen fish.

4.6 Unions

The Uniori-!/, although motivated by a commendable drive to improve the conditions of the crew and fishermen, have been troubled by a frequently changing and inexperienced leadership. As a result, the unions have been unable to define objectives and to formulate policies to attain long-term goals. Union leaders have been reduced to negotiating over detailed pay and work conditions often having no recourse but last minute delaying tactics. Although a considerable number of the fishermen pay union dues, the union has little control over its members and commands limited loyalty. This is probably at least partly due to the casual nature of the fishermen's work affiliation.

I/ Merchant Marine and Fishing Vessel Employees Union The union members belong to two groups: sailors and fishermen, These two groups have been treated differently aboard fishing vessels; sailors generally faring better. In the short run, these two groups may feel that they have opposing interests; i.e., improving wages for fishermen may be interpreted by the sailors as a situation likely to prove costly to the sailors' on-board accommodation. This duality of interests amongst union members may have weakened the unions's bargaining position,

5. THE BANK FISHERY: CONSTRAINTS ON DEVELOPMENT

In Mauritius the possibilities of developing fisheries other than that on the banks are minimal. The mission has accepted this view. Other types of fishing are discussed, briefly, in Appendix V, The Appendix concludes that there are no economically acceptable sources of fish on the island with which to substitute frozen bank fish.

5. I Stocks

Information on the fishery during the second half of the 1970s shows that catch rates decline as the total fishing effort expands. This trend was confirmed to the mission by several fishing captains who had participated in the fishery. At that time the fishery resulted in landings of about 3 OOO tons per year, to which should be added an (unknown but probably considerably smaller) amount caught by vessels not landing their catches in Mauritius.

Some persons fami\iar with the fisheries of that time argue that at least part of the explanation for the decline of the catch rates is to be found in ·the poor fishing performance of skippers and crew aboard mother ships. That performance is in turn explained by the absence of effective incentives. The mission agrees with this view.

The fish caught on the banks aremoderatelylong-lived and effects of fishing may take several years to show up clearly. Therefore the fleet should expand only gradually, It would be extremely unwise to introduce all at once a fishing fleet capable of landing say 5 OOO tons per year. The fleet would soon loose money.

Those who have studied the bank fishery believe that on the off-shore banks, the standing stock of fish exploitable by handlines could support an annual catch of some 10 OOO tons without the danger of extinction. Nevertheless, the stocks are sedentary and overfishing specific areas could easily occur.

5.2 Fishing Techniques

During the 1970s a number of trials were conducted using fishing methods other than the handline. As a whole the trials hold out little hope that a method more efficient than the handline will be found for this fishery.

Attempts to mechanize the handline fishery have been made; they have not been successful thus far.

In the mission's view, the fact that Koreans use handlines on the banks is a clear sign that it is the most efficient method.

Thus, it would seem realistic to base planning of future bank fisheries on the premises (a) that handlines will continue to dominate, (b) that the possibilities of mechanizing their operations ar.e remote, and (c) that the physical productivity of the fishermen is likely to remain stabi"e, if not decline.

5.3 Catch Rates

Most of the individuals to whom the. mission spo,ke about the developments in the fishery maintained that catch rates .had been declining and that the average size of fish now is smaller than when the fishery started. This is not surprising, A declining catch rate and decrease in average size of fish caught can be expected in all fisheries on virgin stocks, However, these observations support the mission's belief that before the biological maximum annual catch of JO OOO tons has been reached, catch rates will have declined so much that the fishery is no longer a commercial proposition,

5.4 Markets and Distribution

The fact that frozen fish are subject to price control prevents any efficient feedback from the consumer as to the price-supply relationship. During the last five years, total supply per year has ranged between 2 200 and 3 300 tons. The distribution system is physically capable of handling at least twice that amount. The quality and consumer image is such, however, that a considerably larger consumption is unlikely unless significant quality improvements are achieved.

Frozen fisn toaay is a downmarket and a cheap substitute for fresh fish. Frozen fish will continue to sell at its present rate as long as its price does not approach that of fresh fish.

5.5 Conclusion

One important conclusion flows from these constraints on developments: accepting (a) that the physical productivity per fisherman-day will not increase (in fact they are more likely to decrease as the fishery expands), and (b) a justifiable expectation, on the part of those employed in the fishery, to be paid fair market wages (which for fishermen means more than the average on land), there will be considerable pressure on the rest of the ;'system" to become more efficient.• If not, for fishermen incomes to keep up, prices must increase faster than the average price level (CPI).

6. FISHERIES IN THE NATIONAL CONTEXT: AN EVALUATION OF ALTERNATIVE POLICIES FOR ASSURING FISH SUPPLY TO MAURITIUS

6. I Background and Alternative Policies

At the moment, Mauritius is at a turning point with regard to fisheries. On the one hand it may, within a relatively short time, find itself in a position to develop a Mauritian owneci anci managed tuna fishery, while, on the other hand, the country's bank fishing industry has disintegrated and considerable effort would be needed to revitalize it.

Before cornn1itting resources to either, the Government should examine the fishing industry in the national context. Is it a sector in which the Government should use its resources? The Government has a fairly large degree of freedom of action. It will be advantageous for it to retain that freedom while it evaluates, in detail, both tuna and bank fisheries.

With regard to offshore fisheries, the possibilities open to the Government can be classified into four alternatives: (I) revitalize the bank fisheries, (2) develop the surface fisheries for tuna, (3) do both, or (4) do nothing.

Information on tuna fisheries in the Western Indian Ocean is provided in Appendix V, That section concludes that by the end of 1980, information based on commercial f_ishing trials will be available with regard to fishery for surface swimming tunas, in areas which - given licensing arrangements - would be exploitable from Mauritius. Thus, in late 1979, it is premature to evaluate the tuna fishery.

6.2 Appraisal of the Future Role of the Bank Fishery

An evaluation, by necessity, means a comparison. With what shall a revitalized bank fishery be compared? There seem to be two alternatives: (a) to let vessels of other nationalities exploit the banks and sell their fish to the island, or (b) to import white fish. As foreign vessels would expect to. be paid ia foreign exchange, both these alternatives effectively amount to importing fish. They will be referred to as the "Import Policy". The policy of creating a nationally owned and_ man.aged bank fishery will be referred to as the "Mauritian Policy". - 8 -

In order to compare the Ma1,1ritian Policy with the Import Policy detailed projections of what will happen (to fish supply, employment, use of foreign exchange) must be developed if they are pursued. The mission's projections are given in Appendix VII. The basic assumption is that both policies have been equally effective and resulted in a supply of 5 OOO metric tons of fish per year by 1985. The Import Policy has leci to the purchase of fish from Korean (or other foreign) vessels fishing the Mauritian banks and based in Port Louis, T~e Mauritian Policy has led to fishing the same banks by a fleet of nine purpose-built mother ships.

The comparison, detailed in Appendix VII, of the two policies makes it evident:

(a) that tne creation of employment, by the introduction of purpose-built mother ships, is going to demand about ten times as much capital per man-year of employment created, as in the manufacturing sector;

(b) that little if any contribution will be made to internal capital formation;

(c) that under very favourable conditions the development of the bank fishing can contribute considerably towards foreign exchange savings; a dollar invested has a return of about I/. percent in th~ for!" of foreir:n exchange savinzs:

(ci) that the foreign exchange component of capital investment is going to be almost 100 percent; and

(e) that a considerable amount of foreign exchange is required for the initial invest­ ment; perhaps something of the order of U.S.~ 10 million for an economic enterprise.

The above analysis has been carried out assuming that new purpose-built mother ships will be used ana that they will catch an average of 100 kg/fisherman-day. Rebuilt second­ hand vessels can of course be had at a cheaper price. It is also quite possible that the "life-time" cost of a second-hand mother ship will be lower; even considering the increased maintenance costs and lesser time at sea. This (economic) problem is discussed in more detail in Appendix VIII. An evaluation, of the kind done in Appendix VII, using second-hand vessels instead of new, purpose-built mother ships, is likely to produce "better" results. Less capital wil 1 be needed per man-year of employment; perhaps only 5 times the amount needed in the manufacturing sector. Foreign exchange savings would be slightly better,

It is clear that bank fishing is not a "good" proposition from the point of view of employment generation, or capital formation; it is better, however,as a saver of foreign exchange. Government must decide if the foreign exchange savings are sufficient to compensate for the comparatively small number of man-years of employment that will be generated by investments in the bank fishery.

In this context some arguments have been presented in defence of a Mauritian bank fishing which the mission does not think are valid. They are commented upon below.

There are, in most countries, people who maintain that self-sufficiency in food is important to a country's independence. This would certainly be true for a large country (say India) where the task of moving food around the country make dependence upon imports unrealistic. In fisheries as well as in other sectors of agriculture, this argument is reinforced by the statement that we live in a finite world; that is, that there is a definite limit to the world's harvest from ocean-dwelling fish resources. Therefore, the advocates of this view say that in the foreseeable future fish will become scarce, particularly in the international market, as a fixed quantity of fish shall be divided amongst a growing number of people. At that time, Mauritius would be vulnerable if it had not its own supply of fish. Thus, an argument is developed in favour of a policy of a Mauritian-owned fishing fleet.

The experts debate the possible quantities of fish that can be taken over and above that presently harvested from the world's oceans. However, it seems reasonable to assume that the quantities available in the future will n~t be smaller than those now available, and that some countries will want to export (e.g., .Chile, Argentina, Iceland and Norway). Thus, for Mauritius it will then be a question of whether or not the country will be able to afford to buy that fish. - 9 -

The answer depends upon the degree to which Mauritius has managed to achieve economic growth. This, in part, will be determined by the growth in average productivity of the labour force (in turn, of course, dependent upon the availability of capital) and, in no small part, upon the way in which external markets value its main export crop: sugar. It would seem extremely important for the future of the island's economy, though, that effort to be made to put capital only into those industries where the primary productivity of labour is sustained and can be expected to increase yearly at a rate not below the 'expected average growth in GDP (real terms).

It is apparent from the preceding sections of this report that the mission doubts that the bank fishing is such a sector; there is little reason to expect that its productivity will grow at a sustained rate in the long run. In the short run, a productivity increase should be feasible. Mother vessels and management practices can be improved.

It does not seem to the mission that the island would expose itself unduly to foreign commercial or other interests by not having a bank fishery of its own. The bank fishery, for its operations, depends on imports of both vessels and fuel, and will leave the country only marginally less exposed to foreign commercial interests than it would be if fish were imported.

The bank fishery can, at the most, contribute between 5 and 8 kg of fish (live weight, equivalent) per caput and year. This is not enough to make Mauritius self-sufficient in fish; imports will be needed to keep supplies at least at present levels.

6.3 Conclusions

Based on the analysis presented in this chapter and on the detailed economic documenta­ tion of Appendixes VII and VIII, the mission must conclude:

(i) that the Mauritian bank fishery is not a sector in which a large number of additional man-years of employment can be created cheaply, but that it is a sector where some foreign exchange may be saved;

(ii) that the bank fishery is not a sector of the economy which is likely to achieve continued productivity increase in the long run;

(iii) that productivity improvements must come from the operation of the mother ship and that the exact nature of optimum improvements are not known at the end of 1979; and

(iv) that a vessel owner, with an efficient crew, can make money in the bank fishery.

The mission realizes that the Government may decide to look at the question of a national bank fishery or no national bank fishery in an entirely different light. The Government may choose to argue that a national bank fishery will help the island to effectively maintain sovereignty over the national territory and to maintain its claim to fishing rights in the Chagos Islands group.

However, before the Government decides on large and expensive investments in support of the bank fishery it should note that the development of the fishery for surface swimming tunas in the Western Indian Ocean is now at such an advanced stage that within a year or so the "state of play" for development of off-shore fisheries in Mauritius can be entirely different from what it is at the end of 1979. It cannot be excluded that already by the end of 1980 or 1981, the tuna fishery will look so commercially interesting that the Government may want to put its scar~e capital and foreign exchange into tuna fisheries instead of into bank fisheries,

In the final analysis, it would seem extremely unlikely that the Government, irrespective of the outcome of the tuna fishing trials, would come to the conclusion that the best solution would be no off-shore fisheries at all, - 10 -

Thus, the mission concludes that it is of interest for the Government to keep the bank fishing industry operating, while preparing for an off-shore fishery of some kind. However, Government should avoid committing funds in an irrevocable manner to determined fishery projects before the tuna fisheries and the bank fisheries have been studied in more detail. Training and education should have priority now. Requirements for port facilities (to handle fish vessels, and crew) should be established and plans drawn up for their provisi.on.

7. STRATEGY FOR DEVELOPMENT OF NATIONAL OFF-SHORE FISHERIES

What should the Government do to prepare for the development of a national fishery? This section will deal with the issues facing Government, assuming that it has accepted the mission's view that eventually some off-shore fishery will be developed but that at the end of 1979 the minimum amount of information necessary for a reasoned decision on the nature of such a fishery is not available. The chapter identifies a long-term goal for a national fisheries policy, and subsequently discusses a short-term policy designed to reach the long­ term goal.

7. 1 Long-term Goal

It is unrealistic to expect that Mauritius will be able to create a viable and efficient industry within the next year or two, given the present state of the bank fishing industry and the fact that the country has no experience in the fishery for skipjack and yellowfin. The mission suggests that the Government should not expect an efficient off-shore fishing industry (tuna or bank fisheries) to be established before 1985.

7.2 Short-term Goals

Government, industry, and unions must start work immediately to reach the long-term goal. The mission has identified a number of short-term goals to direct those efforts; goals which can and should be achieved by about the end of 1981:

(a) to have managers, skippers, engineers, and fishermen prepared, and ready for use in off-shore fisheries;

(b) to have completed detailed feasibility studies of bank fisheries involving "optimum" mother ships;

(c) to have evaluated, at least at the pre-feasibility level, the fishery for surface swimming tunas, e.g., in the Chagos Islands;

(d) to have an annual consumption of frozen (bank) fish of not less than 3.5 kg per caput and year; and

(e) to have at least half of the frozen bank fish supplied by Mauritian vessels.

7.3 Options when the Short-term Goals have been Achieved

The options open to Government, when the short-term goals have been achieved, are evident from the short-term goals. The Government will have the possibility of making a rational allocation of national resources between tuna and bank fisheries.

The missions expect this decision to be taken around the end of 1981. Simultaneously, the Government will have data needed to identify the organizational framework within which the industr~ should function. It should then decide on the extent of Government participation, ~ 11 -

A tuna fishing venture would be in greater need of foreign aid (both capital and technical) than would a bank fishery company. Governmental aid can be obtained by a National Fishing Company. No doubt a larger number of countries would be capable of providing aid for tuna fisheries than for bank fisheries. Tuna is fished world-wide and several governments and private companies may be willing to help if they, in return, obtained some commercial rights in the fishery.

If this situation were to develop it would, of course, be of interest for the Mauritian Government to consider the possibility of combining development of the two fisheries; that is, the granting of rights in the tuna fisheries might be tied to capital or technical aid for the bank fisheries. However, it is unlikely that the Government will be in a position to carry out such negotiations until about 1981 when information will be available both on tuna catch rates, and on the cost and characteristics of the optimum mother ship.

8. ACTION PROGRAMME TO PREPARE FOR OFF-SHORE FISHERIES

8. 1 Preparation

Government should prepare an action programme to reach the short-term goals. The mission believes that the way the action programme is developed is almost as important as its content. It should be the product of negotiations between the people concerned; government officers, managers, fishermen, and union representatives. The negotiations will connnit those negotiating and keep the action programme realistic. An action programme arrived at through negotiations would have a much greater probability of implementation than a similar programme which the Ministry of Fisheries attempts to formulate and later implement.

8.2 Contents

The mission has not been given the task of bringing the partners together for negotia­ tions. However, as part of its investigations it has sought the various parties' views on what should be done to set things right. The result is presented as a preliminary action programme in Appendix IX. Government, which should take the initiative for negotiations, may aim to arrive at an action programme of similar coverage.

During its stay in Mauritius the mission has frequently been confronted with two proposals for remedying the situation of the bank fisheries. Government officials have expressed the view that a National Fishing Company (with some degree of Government backing) would suffice. Managers of private fishing companies say that all that is needed is a reasonable price increse. Both of these action programmes will be examined.

8.2. 1 National fishing company

During discussions, Government officers have advanced two arguments in favour of a National Fishing Company (with Government backing):

(a) that it would be able to attract foreign technical and financial aid, and

(b) that it would be more efficiently administered than the present (and past) private companies.

Both arguments are correct, but they are weak arguments. It is true that the "shore­ based" overheads for the various companies have been high; a consequence of having (almost) one company for one vessel and a shore manager with supporting staff to administer it. Although savings can be made here they are not decisive enough for the success of a bank fishing ent~rprise. The success is determined at sea. The manager's key job is to get the right people aboard the vessel, and here the contribution of clerical staff is not crucial. - 12 -

It is correct that, as a general rule, foreign aid agencies usually do not directly support private enterprise. However, it is also true that they are usually seriously attempting to make sure that any funds provided are used as efficiently as possible. This means that for commercial fisheries, financial assistance will be given to commercially sound projects.

The mission considers it overly optimistic to expect that a foreign aid agency would agree to finance the commercial activities of a National Fishing Company without knowing, in detail what those activities were going to be. At this moment, it is thought that the Government would have a difficult time convincing aid agencies that a new bank fishing company is a sound commercial proposition, and suitable for financing in the immediate future. It seems more likely that foreign interests (possible even private companies) knowledgeable about tuna fishing would be willing to finance facilities or activities related to the tuna fishing industry.

Thus, although both arguments in favour of a National Fishing Company are correct, they are, in the mission's view, not strong enough. They are not strong enough because they are not specifically designed to cure the root cause of the present difficulties,

Anyone intending to establish a new bank fishing company has two primary preoccupations: to secure good company management and efficient vessels.

The identification of an optimum mother ship will take six months to a year. It can be done through the Ministry of Fisheries; a new company is not essential. (It will, of course, be much longer before a vessel is in operation.)

Although company management can be brought from abroad, in the long run it would seem to be in the interest of Mauritius to train local managers. This will also take time.

By now, it should be clear that the mission does not think that the creation of a National Fishing Company, at the end of 1979, is going to help prepare for a national off-shore fishery during the early 1980s. This does not exclude, however, that by 1981 a National Fishing Company, with government back~ng, private management, and working in competition with private companies, could have a role to fulfil.

8.2.2 Increase in the price of frozen fish

It is clear that in the long run a bank fishery (or for that matter a tuna fishery) will not be developed without a major effort. It is going to cost money, considerable money. However, money at this stage is not enough, and perhaps not even essential. The problem, which has caused the bank fishery to almost disappear is primarily a human problem. It will need hard work and a change. of attitude on the part of most persons involved to put the industry back on its feet. ·

Private industry will say, when confronted with this argument, that it is not true. Managers of private companies are likely to claim that the immediate reason they have stopped fishing is insufficient earnings, and that money is just what they need, in fact what they need most of all. Although this argument is technically correct, the solution which it would lead to is, in the mission's view, not a desirable solution. It would permit companies to continue fishing, but it would also permit them to continue management practices aboard vessels which are inefficient from the point of view of the owners of capital and unacceptable from the po~µt of view of the fishermen.

8.2.3 Conclusions

Thus, neither a National Fishing Company nor a drastic increase of the price of frozen fish would, by themselves, solve the problem of the bank fishing industry. Even combined they would not, in the short .run, be abl~ to cure the root cause of the problem; the lack of a group of managers with modern fisheries experience and the scarcity of skilled fishermen. - 13 -

Thus, at this particular time, the Government cannot in fact do much that will make new vessels enter the bank fishery. It is conceivable that Government could formulate a proposal to the existing companies that would be so lucrative that some boats would be brought back into fishing. However, such a measure in isolation, would in the mission's view,be contrary to the long-term interests of the industry. The Government should expect a period of retrenchment during which industry and Government prepare themselves for a decision - perhaps by the end of 1981 - on how to develop the off-shore fishery sector.

8.3 Recommendations

The mission recommends that in the immediate future the Ministry of Fisheries should: (a) define, through discussions with other Ministries, Government's input to the action programme; (b) issue a statement on fishery policy; and (c) meet with management and unions to discuss the action prograrrnne.

The action programme is described in detail in Appendix IX. Actions are grouped under the headings: government, industry and unions. The Government has the largest number on its list. They cannot be executed by the Ministry of Fisheries without clearance and cooperation from a number of other Ministries. Particularly important in this context is the issue of price of frozen fish, its level and eventual decontrol. The operation of foreign vessels in Mauritian waters concerns a number of ministries, so do education and training, and the use of external aid, The Ministry of Fisheries should ciiscuss with the Mauritius Harine Authority the issues of harbour facilities and safety at sea.

The policy statement on fisheries should address a number of questions analysed in this report; particularly it should deal with: price control for frozen fish, licensing of foreign fishing vessels, safety at sea, training of fishermen, acquisition of mother ships (new or second-hand), and commercial tuna fishing ventures.

It is the view of the mission that the Government's best interests would be served by adopting a policy which would aim to: (a) develop an efficient off-shore fishery by 1985; (b) involve government, industry and unions during a two-year period in preparations for such a fishery (implementing an action programme); (c) establish the feasibility of a fishery for surface swimming tunas (skipjack and small yellowfin) from Mauritius. - 14 -

Appendix I

DEFINITION OF THE MISSION

The mission will examine, and report on, the means by which the Mauritius Government may increase its supply of marine protein primarily for domestic consumption. The options to be considered by the mission include that of a National Fishing Company, which need not be government-owned.

Recommendations by the mission shall be accompanied by estimates of: foreign exchange implications, effects on employment, required investments, annual debits and credits, and suggestions for appropriate organizational structure.

The mission will spend about four weeks in Mauritius, beginning Monday, 10 September 1979. It shall prepare a draft report while in Mauritius and shall discuss it with local government officers.

In fulfilling its tasks, the mission shall first:

(a) assess the economic state of existing commercial ventures, and (b) determine the size and nature of the national market for fish and fish products.

It will subsequently appraise the impossible effects on the economy of existing commercial ventures, and on the local supply of fish, if the Government of Mauritius should decide to pursue policies aiming to:

(a) free the price of fish, (b) control domestic fish prices through subsidies instead of through statutory price controls, (c) modernize commercial fisheries activities, (d) increase the importation of fish, (e) begin local canning of fish, and (f) introduce novel fishing methods or harvest new areas.

The mission will consist of Messrs. T. Kroepelien, FAO Adviser on EEZ development to the Government of the Seychelles, and Mr. U.N. WijkstrHm, Fishery Industries Officer (Economics) Fisheries Industries Division, FAO, Rome. Mr. Wijkstr8m will ·be mission leader.

Mr. Kroepelien will assess the economic conditions of the organized commercial ventures; Mr. Wijkstr~m, the size and character of the national market for fish. The mission members will jointly appraise the likely effects on the economy of organized commercial ventures, and on the local supply of fish, by the alternative government policies listed above. - 15 -

Appendix II

MISSION EXECUTION

Mr. U.N. WijkstrUm arrived in Mauritius, Sunday the 16th of September and left Tuesday, the lOth of October. Mr. T. Kroepelien arr.ived Sunday, the 23rd of September and left Friday, the 5th of October.

During their stay in Mauritius, mission members met with government officials, managers representing the private sector, fishermen, and their representatives. Persons with whom discussions were held are listed below:

A. Government

Ministry of Fisheries: Mr. I. Seetaram, Minister Mr. B. Veerasamu, Principal Secretary Mr. D. Ardill, Chief Scientific Officer Mr. R. Samboo, Statistical Officer

Ministry of Economic Planning and Development: Mr. R. Beheenick, Secretary for Aid Coordination Mr. R. Kisnah, Economist, Agricultural Planning Section Mr. v. Basantray, Central Statistical Office Mr. P. Sadaful, Central Statistical Office

Ministry of Price: Mr. R. Makoond, Economist

Income Tax Office: Mr. J. Samfat, Deputy Commissioner

Mauritius Marine Authority: Captain de Gersigny, Port Captain Captain Bo R8nn, Pilot

Mauritius Development Bank: Mr. Gupta, Director

B. Private Sector

Mr. M. Julliene; Finance Director, Rogers and Co., Ltd. Mr. R. Harel, Ca. A., Nazareth Fishing Co., Ltd. Mr. J.M. Harel, Nazareth Fishing Co., Ltd. Mr. J. Li Wan Po, Managing Director, Cie de Peche Mauricienne Ltee Mr. S. Pindiah, Manager, Inter Island Co. Mr. R. Talbot Mr. J. Talbot Mr. G.H. Davy, Managing Director, Mauritius Tuna Fishing and Canning Enterprises, Ltd. Mr. M. de Speville, Chairman, Panegora Marketing Co., Ltd. Mr. P.Y. Pougnet, Managing Director, Panegora Marketing Co., Ltd. Mr. S. Seenyen, Happy World, Ltd. Mr. E. Kwok, General Manager. Foods Division, Happy World, Ltd. Mr. M.M. Wiehe, Administrative Manager, Nazareth Fishing Co., Ltd, Mr. G. Staub, Store.and Technical Manager, New Cold Storage Co,, Ltd. Mr. J, Besac, Director of Fisheries (retd.) Mr. A. Gufflet, Mauritius Commercial Bank Captain Hong Jong Ki, DONG IN 55 Captain T. Kusaka - 16 ,,,.

C. Unions

Mr. K. Seecharam, President, Merchant Navy and Fishing Vessel Employees' Union Mr. George, Secretary, same Union

D. Others

Mr. J, Gauche, Expert-Conseiller, Ministry of Cooperatives and Cooperative Development Mr. A. Baux,, Director, Caisse Centrale de Cooperation Economique Mr. G. Terracol, Caisse Centrale de Cooperation Economique - 17 -

Appendix III

A DESCRIPTION OF THE MAURITIAN OFF-SHORE BANK FISHERIES

1. HISTORY

The history of Mauritian bank fisheries prior to 1975 is available in Mauritius and will not be repeated here. It is clear that equipment and fishing techniques have not changed significantly during the last four years.

Bank fisheries have been, and are, carried out by private entrepreneurs - most often in the form of private, limited-liability companies. In 1975, when the bank fisheries reached a zenith, four companies operated seven vessels (see Table 1), the largest company (through affiliated companies) operating three vessels.

By mid-1979, only one of the original vessels fishing in 1975 was still in use. One of the other two vessels (operating after 1975) had only begun fishing earlier in the year. In 1977 and 1978, about one third of the frozen bank fish sold in Mauritius had been caught by foreign (Korean) vessels. More than half of the frozen fish supplied during 1979 will be caught by two Korean vessels.

2. FISHING VESSELS

The largest vessels in the fleet had a carrying capacity of more than 200 tons of frozen fish, a gross tonnage of 500 to 600 tons, an overall length of about 60 m, and a crew capacity of up to 100 for two-month cruises. The smallest vessel in the fleet, the TALBOT, has a length of 21 m (LOA) and a frozen storage capacity of about 12 t. The TALBOT is the only vessel that has been built especially for this fishery. The others are second-hand vessels (reefer vessels and tuna lon~liners).

Most of the companies engaged in the bank fisheries owned only the vessels. The cold storages in which the frozen fish have been held are the property of other companies.

3. CREW, FISHERMEN, AND SHORE-BASED STAFF

Officers and non-fishing crew on the mother ships have had monthly salaries and, in principle, year-round employment. Fishermen have been employed on a trip by trip basis and paid, on most boats, only for the fish caught. Most of the companies have had full-time shore-based managers with supporting clerical staff. Table 1 includes estimates, by the central statistical officer, of the number of people engaged in the industry.

Most mother ships have had European and/or Asian (Korean, Japane.se captains and engi­ neers. Fishermen have come from the Seychelles, Rodrigues, the Chagos, and Mauritius. About a year ago, the local union!/ objected to other than Mauritian nationals being employed as fishermen.

4. FISHING EFFORT

Prior to 1977, the Ministry of Fisheries did not collect fishing effort data. Some companies have provided the Mission with data on fishing operations prior to 1977. The data available are incomplete and some information supplied by fishing companies does not tally with that available at the Ministry of Fisheries.

Fishing effort can be measured in a number of ways; the most direct being the number of fishermen days. In the bank fishery, the number of fishermen days is constrained by the effort necessary to bring fishermen out to the grounds; that is, it is a function of the time the mother ship spends at sea.

}:_(Merchant Navy and Fishing Vessel Employees'Union - 18 -

During 1977 and 1978, trips averaged around seven weeks for the two 60 m vessels and about four and five weeks for vessels of 30 to 40 m (LOA) •.

Figure 1 indicates a division of time, in days, spent by the mother ships.

The Mauritian vessels have seldom succeeded in spending eight out of twelve months at sea; in fact, only the NAZARETH did that in 1978. Vessels have spent less than six months at sea during one year. The two Korean vessels, now landing frozen fish at Port Louis, seem to spend between nine and ten months at sea per year.

According to statistics furnished by the fishing companies, the local vessels manage between 100 and 140 fishing days per year. The Koreans manage more; just how much more is uncertain. During the 12-month period of September 1978 to August 1979, the Korean vessel DONG IN 51 spent about 235 days actually fishing out of just over 300 days at sea.

5. YIELD

The productivity of the fishery is constrained by the quantity that one fisherman can catch during one day at sea.

Vessels have reported average catches per fisherman and day fishing per trip, varying from 30 to 160 kg. The average catches reported for Mauritian vessels was 71 kg per day per fisherman in 1978 (77 kg in 1977), while for the Korean vessels it was 87 kg (see Figure 2).

There seems to be a slight decline in yields during winter (July-August).

The figures on catch rates (Figure 2) are arrived at by dividing the total landed tonnage by the number of fishermen-days. The number of fishermen-days is arrived at by multiplying the number of fishermen on board by the number of days the Captain reports that the ship had been fishing. The average catch, so obtained, is less than the true number, because not all fishermen fished on all of the days reported as fishing days. Here, there may be variations that can to some extent explain why one vessel reports a higher catch rate than another, or why the average catch rates are decreasing (over time) as labour problems aboard the vessels increase.

Assuming that ship management, discipline, and stamina were better on Korean boats, and that therefore most of the fishermen go fishing every "fishing day", part of the difference in catch rates per day fishing is explained. Another part of the reason is likely to be that Korean skippers, working on a higher incentive than skippers on Mauritian vessels, spend considerable effort finding the most productive fishing grounds. However, there does not seem to be any significant difference in catch rates between Saya de Malha and the Nazareth banks. Those two banks, on the other hand, seem considerably more productive than the grounds around the Brandon Islands.

In the data available to the Mission, there is only one observation on fishing on the Chagos grounds; the NAZARETH spent 11 days there in 1977. Catch rates of 57 kg per fisher­ man and day were lower than those for the fleet as a whole in that same year, i. e., 77 kg.

The Ministry of Fisheries reports an average of 91 kg per man and day for fishing at the Saya de Malha bank in 1977 and 88 kg for the Nazareth bank in the same year. The catch rate for the Nazareth bank was reported to be about the same for 1978, while that for the Say a de Malha was reported to be 95 kg.

There are two distinct features about the selection of fishing grounds by the Korean skippers. They do not seem to fish in the St. Brandon area and more than 50 percent of the effort takes place on the Nazareth bank, presumably because it is closer to Mauritius than is Saya de Malha. This may, in part, explain the high catch rates for the Korean vessels, as the catch rates on the St. Brandon grounds are generally lower than those reported for the other two grounds. - 19 -

6. RESULTS

All managers with whom the Mission met state that their companies have lost money during their fishing operations; profits have only been made on occasional years, or on single fishing trips. Accumulated losses, reported in audited financial statements, have run into millions of rupees.

Fishermen earnings, as reported by the Government Central Statistics Office have risen sharply during the 1970s (see Figure 3) and have kept pace with Gross National Product per caput. Wages per day of fishing are at the level of wages in comparable industries. The reported salary should be adjusted on two counts. First, an addition should be made for meals on board, probably o·f the order of Mau. Rs. 10 per day. Second, the amount should be divided by a factor of about two, as a bank fisherman does not work for more than about 100 to 150 days per year instead of 240. In this light, his salary is low. It might be argued that he can take odd jobs while on land. This chance for increasing income is hardly effective for two reasons. A large number of the bank fishermen are not onshore fishermen who have graduated, and thus have no onshore fishery to go back to. Second, Mauritius has, at least, a seasonal surplus of labour. Table 1

Characteristics of the Bank Fishing Industry 1970-1978/79

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979

No. of fishing companies 1 1 1 1 3 4 4 5 5 3 1/ No. of mother ships 2 2 2 2 5 7 7- 7 7 ~/ Employees on daily wagesY 2 211 - 259 - 177 236 262 223

Fmplo~eeson monthly pay_! - 78 - 45 - 159 164 177 151 Metric tons landed - 1 500 2 081 2 027 3 279 2 638 2 260 3 123 2 825 Supply (landings) kg per caput 1. 62 1. 84 2. 51 2.43 3.88 3.07 2.60 3. 53 3.16 N

l.J At this time there were also vessels from other nations exploiting the banks with the same methods 2/ TALBOT, SILVER STAR, and LA PATRIOTE ~ Central Statistical Office. Daily wage rates are yearly (arithmetical) averages !:} Figure for March 1979 5/ Ministry of Price

- 24 -

Appendix IV DISTRIBUTION AND CONSUMPTION OF FROZEN BANK FISH The overall fish supply into Mauritius is shown in Table 1. Table 1

Total Quantities of Fish Supplies in Metric Tons~_J2_7_Q-7~

Product 1970 1971 1972 1973 1974 197 5 1976 1977 1978

Fresh fish 1771 2200 2200 2300 2400 2100 2500 2100 1960 Canned fish 1122 1251 1550 1718 2848 1499 2037 2644 2512 Salted/dried/ smoked fish 596 376 714 810 638 802 1089 1075 1108 Frozen /bank) fish.!:: 1300 1500 2081 2027 3279 2638 2260 3123 2825 Totals 4789 5527 6545 6855 9165 7039 7886 8942 8405

1/ This quantity was supplied by Mauritian and Korean vessels (up to 1976 it was supplied exclusively by Hauritian vessels), as follows:

1977 1978 Mauritian vessels 1850 1757 Korean vessels 1267 1068 3123 2825

Source: Ministry of Fisheries

In addition to the above, certain imported quantities of tuna are landed and distributed without being officially recorded. This may amount to as much as 1 OOO tons annually.

Consumer price of fish is regulated. Fresh fish is fixed at Hau. Rs 7-18 per kg depending on species and quality. Species comparable to frozen fish are regulated at Mau.Rs. 18, frozen bank fish at Mau.Rs. 9.60, and salted/dried/smoked fish at Mau. Rs. 12.50 per kg. Fresh fish is the most popular and there appears to be widespread non-compliance with the price regula­ tions. Salted/smoked/dried fish is used in small quantities and represents a downmarket product. Canned fish is wholly imported and is subject to regular price adjustments in accordance with fluctuations in import prices.

Prices of frozen (bank) fish are regulated at more infrequent and irregular intervals, and upon supplication by the fishing companies. On the whole, price development has fairly well parallelled the consumer price index, but temporary lags have been allowed to develop, as shown below: 1971 1972 1973 1974 1975 1976 1977 1978 1979 Consumer prices of frozen fish Mau.Rs./kg 3.20 3.20 4.20 4.80 4.80 7.60 9.60 Indexed frozen fish price 100 100 132 150 150 237 300 CPI adjusted to 1971 base year 100 119 177 198 220 238 - 25 -

Retailers are allowed a 10-11 percent mark-up on frozen fish. Cold stores sell at a correspondingly lower price. Cold stores are allowed to negotiate purchase prices with the fishing companies. Depending on the availability of bank fish, the cold stores will aim for a 10-20 percent margin.

In comparison, locally produced and frozen chicken which is considered the closest protein substitute is presently price regulated at Mau.Rs 13.90 per kg to the retailer and Mau.Rs. 15 to the consumer.

The major cold store companies distribute throughout the island by means of their own insulated and refrigerated trucks staffed by commissioned drivers. Shops are visited once weekly and all shops have facilities to store frozen fish. It is of the greatest importance to the cold stores to be able to offer as complete a line of products as possible. In periods of short supply of bank fish and when some cold stores have been completely devoid of stock, cold stores with ample supplies have been known to insist that their retailer­ clients also buy meat from them to obtain fish supplies. One cold store stated that they had lost 20 percent of their sales due to such practices by their competitors.

Cold stores without independent bank fish supplies claim they have recently been able to resolve this problem by the purchase and distribution of deep-sea tuna obtained through other channels.

Statistics on fish stocks carried by cold stores seem to indicate tha~ during the last two years, combined stocks have at any one time been equivalent to at least one month's sales. Stocks have, however, varied greatly from cold store to cold store. Operators also claim that they tend to hold back on sales from dwindling stocks in order that they protect their business and to take care of important customers.

Generally speaking the frozen fish is of poor quality, this being mainly due to inadequate processing techniques on board the vessels and to poor handling procedures both at unloading and later in storage and distribution. On board the boat, the fish is gutted and washed superficially. It is not properly protected againstdehydration, neither on board nor onshore. The fish do not look good at the point of sale, and frozen fish today are considered a downmarket product. The same species, when sold fresh, command a premium.

In contrast with the frozen fish, there is a continuing scarcity of fresh fish and, con­ sequently, it frequently comnands a premium over and above the regulated retail price. Fresh fish customers will usually assemble at known landing places and buy directly from the fishermen as soon as they come in. Hotels have also been reputed to siphon off large quantities of fresh fish. This situation is presently changing and, due to the advent of fishermen 1 s cooperatives, more fresh fish seem to be reaching the shops where they are retailed at regulated prices.

There are conflicting reports with regard to the size of the frozen fish market and the elasticity of the cLemand. The sale of frozen fish declined to 2 800 tons in 1978 and will be less than that in 1979. A number of people interviewed have insisted that the real market is larger, perhaps about 50 percent more. All frozen fish are sold through shops which, as a rule, comply with price regulation. There is, consequently, no market economy feedback from the consumer and it is imposible to provide accurate information on this aspect of the distribution.

At the other extreme, one cold store operator stated that the market could easily be doubled with assistance of some promotion and advertising. Another cold store operator who has constantly maintained adequate stocks has concluded that his sales have not increased appreciably in 1979 in spite of the fact that competitors did run out of stocks. Generally speaking, the Mauritian consumer would seem to be price conscious and in the short run demand appears to be elastic. Egg producers tend to sell fewer eggs during the vegetable season when vegetables are inexpensive and in plentiful supply. However, in the long run, supply and price relationships are probably more inelastic and frozen fish, as a downmarket product, tend to have few substitutes. Frozen fish today is a downmarket and inexpensive substitutefor fresh fish and will continue to sell at its present rate as long as prices - 26

do not approach fresh fish prices. It is a reasonable conclusion that frozen fish in its present form, could withstand a 20-2S percent price increase without serious effects on demand. Price increases beyond this would have to be justified by product improvement.

During the last eight years, total fish consumption has practically doubled from 4 789 tons in 1970 to 8 40S tons in 1978, thus increasing the role of fish as a protein supply source correspondingly. This growth is partly reflected in population growth, but also in a change in consumer patterns as shown in Table 2.

Table 2

Per Capu.t Consumption of Fish, in kg

Product 1970 1971 1972 1973 1974 197S 1976 1977 1978

Fresh fish 2.19 2. 70 2.67 2. 7S 2.83 2.4S 2.88 2.38 2.18

Canned fish 2.10 2.31 2.82 3.07 S.05 2.64 3.52 4.47 4.20

Smoked/dried/salted 4.28 4.80 S.86 5.20 4.32 4.12 4.SO 4.32 4.26

Frozen (bank) fish 1. 78 2.02 2. 76 2.67 4.26 3.37 2.86 3.88 3.48

Total fish consumption 10.3S 11. 83 14.11 13.69 16.46 12.58 13. 76 15.05 14. 12

As witnessed by the 1974/7S Family Budget Survey, consumption of fish is widespread throughout the entire population and it wouklappear that it is part of the staple diet (see Table 3)

Table 3

Household Survey 1974/7S of Fish Consumption

Annual Income Rupees spent per As percent of level of families, family member on family income Rupees fish

Under lSO 4.27 8.5 lSO - 300 4.16 6.8 300 SOO 4.40 5.S SOO 7SO 4.47 4.1 7SO 1000 4.80 3.S 1000 1500 S.S5 3.0 1500 2000 6.30 2.35 2000 - 3000 6.60 1. 7 3000 - over 7.40 1.1 - 27 -

Appendix V

POTENTIAL OF MAURITIAN FISHERIES OTHER THAN THE BANK FISHERIES

It has long been recognized that fishing around the Island of Mauritius has reached its biological limit. Consequently, one should not expect a sustained increase in catches.

The fishery effort around some of the outlying islands can be increased, however. Additional fish supplies may reach one, perhaps two thousand tons per year. The fishery is artisanal in nature.

Fresh water prawn (Macrobachium rosenbergii) is cultivated. It is a high-priced product which cannot be considered a substitute for frozen fish. Polyculture with grass carps is being introducalbut is not likely to provide the volume of fish required, The inland water areas available for fish culture are comparatively small, and it is unlikely that the culture of shrimps will reach more than a few hundred tons per year.

The IOP/FAO Workshop on the fishing resources of the Western Indian Ocean (Report N9 45) estimates the sustained yield from tuna species taken by longline fishery to be around 100 000-130 OOO tons. Apart from these species, there is estimated to be a total resource of 200 000-400 OOO tons of surface tuna, particularly skipjack, in the entire Indian Ocean.

The Indiah Ocean longline fishery consisting of bigeye, albacore and yellowfin is presently considered to be fully exploited, The fishing is not particularly productive, yielding 1.8-3.0 tons per boat and day during the season. The method is demanding and is only employed by Korean, Taiwanese and Japanese vessels using depreciated vessels with limited crew facilities. Profits are believed to be marginal. An increasing number of the longline vessels are now being equipped to handle temperatures down to -5o 0 c. This will enable the vessels to reach into the Sashimi market in Japan and Korea. In this market tuna command prices up to U.S.$ 4 OOO per ton against the normal price of U.S.$ 1 OOO per ton for tuna frozen to -20°c. This could lead to increased profitability in this fishery. The recent increased and active interest by Korean and Japanese fishing companies to seek long term arrangements in the Indian Ocean for tuna bases should be evaluated against this background.

The skipjack resources are considered to be only lightly exploited; total annual catch in the entire Indian Ocean being about 25 OOO tons. Due to the lack of fishing effort, little detailed knowledge of skipjack resources is available at present.

Skipjack, being a surface species, is caught either by the pole-and-line method or by purse seining. Cormnercial pole-and-line skipjack fishing in the Indian Ocean has only been tested at Nosy Be, Madagascar, from May 1973 to February 1975 and was technically a success. This method is wholly dependent upon the availability of live bait. Such bait would, generally speaking, be made up of smaller pelagic species caught in lagoons, reefs, and bays or possibly grown in ponds.

Purse seinefishing is highly capital-intensive with considerable demands on the technical skill of the crew. The method is independent of bait availability and will generally produce higher catches per vessel. Purse seining has so far been successfully practised in the Pacific, Atlantic, and the South China Sea, but not in the Western Indian Ocean. Recent developments during the past four years, however, indicate that it might also be successful in the Indian Ocean.

A new pole-and-line vessel costs about Mau.Rs 12 OOO OOO, requires a crew of 30 men, and can catch in the range of 1 000-1 200 tons annually. A purse seiner would .cost about Mau.Rs. 30 OOO OOO, req1,1ire a crew of 13-14, and might, if successful, catch well in excess of 2 OOO tons annually~ - 28 -

The Seychelles are presently acquiring a fleet of four pole-and-line vessels. Two will begin fishing operations in December, 1979 and two in May, 1980. The Mauritius Tuna Fishing and Canning Enterprise is likewise acquiring one purse seinet, scheduled to begin fishing late in 1979.

IOP/FAO is presently negotiating fishing rights for the purse seiner in the EEZ of the Comoros and Madagascar, such rights having already been obtained in the Seychelles. The purpose of this is to make sure that the vessels will have access to the entire Western Indian Ocean and through practical commercial fisheries obtain information to evaluate the economic viability of this method. At the time, the pole-and-line method will be put to an efficient commercial test within the EEZ of the Seychelles and adjacent waters. ·

These two projects represent a total maximum catch effort of 6 000-8 OOO tons, well below the estimated sustainable yield. Within one year complete information based on commercial fishing trials will be available from both methods. Such information will enable a careful and accurate assessment of whether Mauritius should encourage the formation of a national tuna fishing fleet using one of the two methods being tested. - 29 -

Appendix VI

VESSEL BUDGETS

1. PURPOSE AND CONTENTS

A realistic vessel budget, giving an idea of the expected profits or losses for a year's fishing, is fundamental to any decision concerning the future of the bank fishery.

This appendix contains three types of vessel budgets:

(a) budgets for existing categories of mother ships (20,30, and 60 m LOA) formulated on the assumption that management, in the widest sense of the word, is efficient (see Tables 1, 2, with accompanying notes);

(b) budgets for existing mother ships, with existing schedules of operation and catch rates (see Table 3); and

(c) budget for a new, purpose-built mother ship (40mLOA) with efficient management (Tables 4 and 5, with accompanying notes).

2. CONCLUSIONS

2.1 Existing Types ot Vessels - With Etticient Management

Vessel category LOA, m I I 20 30 60 Minimum turn-around time to break even: (420) 283 192 I days per year Return, pre-tax, on capital (in percent of replacement value) if none 12 40 vessel operates 300 days per year

It should be kept in mind (a) that the potential earning of the 60-m vessel is a reflec­ tion of its low second-hand value, i.e., only Mau.Rs 5 million (new vessel of that size today could cost about Mau. Rs. 20 million); and (b) that the existing vessels have not been operated efficiently.

The above calculations have been made on the assumption that the catch is sold at the ex-vessel price of Mau.Rs. 7.80 per kg (in force during September - October 1979). - 30 -

2.2 Existing Type of Mother Ships - Minimum Price Increases

Vessel category LOA, m

21 30 60 40

Break-even price, ex-vessel Mau.Rs/kg 10. 90 ll.60 7.80 5.90

Fixed costs per fisherman- I day and year - 1978 data, Mau.Rs. 550 535 276 275 - at 180 fishing days per year, Mau.Rs. 370 326 215 335

Replacement value of vessel per fisherman, Mau.Rs. thousand 125 104 76 ll6 I The explanation of the "low" break-even price for the 60-m mother ship lies in the low replacement value, not in efficient operations. As is clear from the above table, the replace­ ment value per fisherman (which is the fundamental measurement of production potential) for the 60-m vessel is only about 2/3 that of the 30-and 40-m vessels. The fact that the 40-m (Korean)vessel achieved such low fixed costs per fisherman-day is a result of efficient operation; that is, of a high number of days fishing.

In Table 3, days fishing, days at sea, and catch per fisherman and day reflect the results obtained during 1978 and 1979. The catch per fisherman and day is the average for the fleet as a whole (excluding the Korean vessels - see Figure 2 in Appendix III). Unit costs are the same as those used in other tables ot this appendix.

At first sight, the result of the exercise is surprising. The 60 m type of vessel should break even at present prices; but the smaller (20 and 30 m LOA) do not. The latter then ought to have been those who first left the industry. The reverse has been the case, The small mother ship (TALBOT and LA PATRIOTE) are still fishing, while the NAZARETH and LA PERLE III are not.

The mission has no unequivocal and demonstrable explanation of this. A number of hypotheses can be advanced. Obviously, it is the outcome of the interplay of a number of factors. Part of the explanation can be found in patterns of ownership and financial arrangements. Owners of smaller vessels, and partners of smaller companies, are r.10re likely to accept a lower reward for their own work and possibly do not depreciate their vessels.' It is clear that the fishery with the larger mother ships has been plagued with operational difficulties. These have derived from both the larger number of people on board and from the long trips. - 31 -

2.3 Purpose-Built Mother Ship (40 m LOA)

Catch rates 1 75 kg/man-day 100 kg/man-day :' ! 1. At present price ex-vessel for ' fish; Mau.Rs. 7 800/t

1. 1 Minimum number of days operation in a year to break even 4o&Y 285

1. 2 Return on capital (%) if operated 300 days/ye7r; pretax, on replace- ment valu~ 2 12

' 12. At a price, ex-vessel, of Mau.Rs. 10 OOO/ t I I I 2. 1 Minimum number of days operation I I I in a year to break even 280 200 I ! I I 2.2 Return on capital (%) if operated I 300 days a year; pre tax, on replacement I value.~? 12 24 _I

'!:_/ This means that the vessel cannot break even, as it cannot operate for 408 days during one calendar year

2/ Sixty days per year are provided for annual maintenance

It should be noted that the rate of return is calculated on the replacement value of vessels. This is somewhat debatable. This value declines (in real terms) over time. Thus, it can be argued that the real rate of return (per year) is in fact higher than that listed in the above table.

The vessel budget show; that for a "purpose-built" mother ship to pay for itself (even under those very efficient operations assumed as the basis for this budget) it is essential that the price of frozen bank fish (ex-vessel) be increased; at the very minimum to Mau. Rs. 10.00 per kg, at today's price levels. We have seen, in section 2.2 of this appendix, that a similar price rise may also be needed to keep the smaller vessels in operation. - 32 -

Table 1

Vessel Characteristics and Annual Costs for Existing Types of Vessels

Vessel category LOA, m Characteris ties 21 30 60 4oY

N9 of pi rogues 4 8 22 10 N9 of fishermen 12 24 66 30 N9 of crew 6 16 25 16 Duration of trip 28 35 I 50 50 Steaming days 3 5 ! 7 7 Fishing days 21 23 33 39 At sea inactive, days 4 7 10 4 In port between trips I days 10 I i 10 i 12 12 i 'i Replacement value, 1. 5 2.5 i 5.0 3.5 \ Mau. Rs. million :' i : Depreciation, 10 years 150 OOO 250 OOO l 500 OOO 350 OOO I Interest, 10% ! 150 OOO 250 OOO l 500 OOO 350 OOO ' Insurance, 4% 60 OOO 100 OOO 200 OOO 140 OOO 'e I I- Repair and maintenance 10% 150 OOO 250 OOO 500 OOO 350 OOO

Sub-total 510 OOO 850 OOO I 1 700 OOO 1 190 OOO I i ~ Food and water 32 500 86 OOO 135 OOO 86 OOO ~I Crew salaries I 213 OOO 400 OOO 628 OOO ) ) IY Shore-based staff 33 OOO 66 OOO 82 OOO 540 OOO ) Miscellaneous I 5 OOO 5 OOO 10 OOO ) Sub-total I 283 500 557 OOO 855 OOO 626 OOO

Totals 793 500 1 407 OOO 2 555 OOO 1 816 OOO - 33 -

Notes to Table 1

];_/ Interview Capt. Hong Yang Ki. The budget is based on the assumption that the pay is equal to that of Mauritian fishermen

~/ Repair and Maintenance: The replacement values are considerably above book values. A 4 percent annual provision for this type of ex£enditurewould be sufficient for a new vessel. A 10 percent figure was used to account for the age of the vessels

3/ Crew, fixed Vessel category LOA, m 21 30 60 40 Salaries/iear I Captain: 66 OOO 66 OOO 91 OOO Engineer 56 OOO 56 OOO 82 OOO Officers 33 OOO 99 OOO 165 OOO Crew, 1 OOO Mau.Rs/mo 39 OOO 143 OOO 233 OOO

194 OOO 364 OOO 571 OOO National pension scheme 19 OOO 36 OOO 57 OOO I i Total 213 OOO 400 OOO 628 OOO I I Number of Crew I

Captain 1 1 1 i 1 Engineer 1 1 1 I 1 Officers 1 3 5 I 3 Crew 3 11 I 18 I 11 !!_/ Shore based staff I Number 1 3 I 5 Salaries, Mau. Rs. /year 33 OOO 66 OOO 82 OOO

~/ Food and water Man-days 2 160 5 750 9 OOO 5 750 Mau. Rs. 15/day 32 500 86.000 135 OOO 86 060 - 34 .,.

Table 2 Trip Costs

Vessel category LOA, m Costs 21 30 60 40 ll Tons/trip (unloaded) 20.6 44.6 174 117 2/ Fishermen bonus 20 600 44 600 l 7LI OOO 117 OOO

l! Food and water 3 800 8 300 32 800 17 600 4/ Petrol for outboard engines 3 800 8 300 32 800 17 600 5/ Diesel 21 85 OOO - steaming 4 050 500 :; 31 500 - drifting 11 200 43 OOO 174 OOO 65 OOO - oil and lubes 1 500 I 6 400 25 900 9 600 §_/ Stevedores 3 OOO 6 OOO I 27 OOO 8 OOO 7/ Harbour dues 600 600 I 1 100 1 100 I Total 48 550 138 700 i 552 600 275 1~00 '§_/ Revenue/ trip 125 OOO 358 OOO 360 OOO 910 OOO Less trip costs 48 550 138 700 I 552 600 275 400 Surplus I trip 76 500 219 300 807 400 635 OOO

Fixed costs 793 500 1 407 OOO 2 555 OOO 1 816 OOO

Minimum effort required to recover fixed costs

- days operation 394 290 197 177 - days at sea 291 225 160 143 - tons caught 215 286 560 334

21 Return on replacement value if 300 days operation per year, pretax, percent - 12 38 46

Note: Costs and returns are given in Mau.Rs. Days operation = days at sea + "standard" period in port between trips Notes to Table 2

1/ 80 kg per fisherman/day for all except Koreans on the 40 m vessel. They claim catches of 100 kg per fisherman and day.

'!)The basic production pay is Mau.Rs. 0.90 per kg plus Mau.Rs. 7 per day when on board. Some companies have higher bonuses when a certain quantity has been reached. Mau.Rs. 1 per kg, are used here.

3/ Mau.Rs. 15 per fisherman and day.

4/ Consumption is about 15 1 per day and pirogue. The cost is Mau.Rs. 3.00 per 1, which makes Mau.Rs. 45/day and pirogue. As most pirogues have three fishermen, some have four, the cost per fisherman and day is about Mau.Rs. 15.

5/ Diesel consumption· Vessel category LOA, rn I 21 30 60 40

Bhp of main engine 220 720 2.000 7 50 Consumption steaming kg/day 880 2 880 8 OOO 3 OOO Consumption drifting, kg/day 300 960 2 700 1 OOO

Mau. Rs./ day drifting 450 1 440 4 050 1 500 Mau.Rs./day steaming 1 350 4 300 12 150 4 500

Mau.Rs./trip drifting ll 200 43 OOO 174 OOO 65 OOO Mau.Rs./trin steamimr 4 050 21 500 85 nno i 1 c;nn

6/ Mau. Rs. 3 OOO/gang and day. Each gang unloads 20 tons per day.

7/ Mau. Rs. 60 per day for 20 and 30 m vessels; Mau.Rs. 90 per day for longer vessels.

§} 21 m vessel: 12 tons of frozen fish at Mau.Rs 7 800 per ton and 3. 5 tons of salted fish atMau.Rs. 9 OOO per ton, All other vessels sell their catch at Mau.Rs. 7 800 per ton ex-vessel.

9/ Return on replacement value: Vessel category LOA, m 30 60 40

Trips per year 6.7 4.8 4.8 Earnings per trip, Mau. Rs. OOO 358 1 360 910 Total earnings, Mau.Rs. millions 2.4 6.6 4.4 Expenditure/trip, Mau.Rs. OOO 139 553 275 Expenditure/year, Mau.Rs OOO 930 2 660 1 320 Fixed costs, less interest 1 157 2 055 1 466 Total costs, Mau.Rs. millions 2.09 4. 71 2. 78

Total ~arnings - cost) Mau.Rs millons 0.3 1. 9 1. 6 ReplacemP.nt value of vessel 2 .. 5 5.0 3.5 Return on replacement value in percent and pre-tax 12 38 46 36 ~

Table 3 Bank Fishery with Existing Type of Vessels Fishing Effort and Catch Rates as Estimated for 1978/79

vessel category LUA, m 21 30 60 40

Days fishing·!/ 120 llO 140 220 Days at seaY lSO 180 210 300 N

Sub-total 267 700 766 200 2 463 200 11 SSS OOO Fixed costs!!._/ 793 SOO 1 407 OOO 2 S5S OOO 11 816 OOO I TOTAL 1 061 200 2 173 200 S 018 OOO 13 371 OOO I

Revenue, at Mau. Rs. 7.80/kg ex-vessel 795 600 1 458 600 5 046 800 4 477 200 Approx. break-even price in Mau.Rs./kg ex-vessel 10. 40 11.60 7. 70 S,90

1/ According to data provided by the Ministry of Fisheries and by fishing companies :!:,/ See corresponding entry under footnotes to Table 2

'}_/ Mau.Rs. 60/day in port for 21 and 30 m vessels; Mau.Rs. 90/day for the other two

!!_/ See Table 1 - 37 -

Table 4

Bank Fishing with New P.urpose-built_ Mother Ship (40 rn LOA) Yearly Costs and Vessel Oharacteristics (Mau.Rs. millions purchase price)

U.S.$ COST 12 % Mau. Rs.

LOA 40 Fish storage, tons 130 N9 of crew 15 N9 of fishermen 39 N9 of pi rogues 13 Duration of trip, days 40 Steaming, days 6 Fishing, days 30 At sea inactive/trip, days 4 In port between trips, days 10

Depreciation 15 years 800 OOO 100 800 OOO Interest 10% 1 200 OOO 75 900 OOO Insurance 2% 240 OOO 100 240 OOO

Sub-total 2 240 OOO

Repair and maintenance (3%) 360 OOO 70 250 OOO YFood and water: crew 81 OOO 75 61 OOO '!:_/Crew salaries 421 OOO 50 210 OOO 1/Fishermen salaries 335 OOO - ~/Shore based staff 50 OOO - Miscellaneous 50 OOO 50 25 OOO

1 297 OOO

Total fixed costs 3 537 OOO 2 486 OOO - 38 -

Notes to Table 4

All prices are assumed to be at the level recorded in 1979; this means that it has been assumed that relative prices remain unchanged. Put another way, that all prices rise at the rate of inflation.

Efficiency on vessels is assumed to have improved considerably.

1/ Food and water: crew (Mau.Rs 15/day x 360 days x 15 crew=) Mau.Rs. 81 OOO.

]:_/ Crew salaries

(Mau.Rs./month x 13) + 10% Yearly salary cost

Captain 7 500 107 OOO Engineer 6 500 93 OOO Second mate ) Second engineer ) 2 500 107 OOO Bosun ) 10 crew 800 114 OOO

Total 421 OOO

'}./ Fishermen: (39 x 600 x 13) + 10% = 335 OOO, per year. Thus, it is assumed that fishermen will also have the possibility of year-round employment, at a basic wage of Mau. Rs. 600 per month.

!:) This is the equivalent of one man and one helper, which is not enough. However, it is assumed that either a company would operate several ships or else be engaged in other activities and use some of the clerical staff part time. - 39 -

Table 5

Bank Fishing with New, Purpose-Built Mother Ship - Trip Costs and Catch

YA '!:) B U.S.$ COST

% in Mau. Rs.

Tons of frozen, gutted fish, unloaded/trip 88 117 lf Fishennen bonus 39 OOO 52 OOO -- !!}Food and water 23 OOO 23 OOO 75 17 200 2_/Petrol for outboard engine 23 OOO 23 OOO 95 21 800 .§./Diesel oil - steaming 32 400 32 400 95 30 800 - drifting 61 500 61 SOO ':IS SU 5UU - lubes 9 400 9 400 95 8 900 !_/Crew bonus 49 OOO 65 OOO -- Stevedores 15 OOO 18 OOO - - Harbour dues 4 OOO 4 OOO 50 2 OOO

Total 256 300 288 300 139 200

Revenue I (7 800/tons) 690 OOO 910 OOO Revenue II (10 OOO/tons) 880 OOO 1 170 OOO

Cash contribution/trip I 433 700 621 700 Cash contribution/trip II 629 700 881 700

Fixed yearly costs 3 537 OOO 3 537 OOO

Minimum effort required to recover fixed costs - days operation, I 408 285 - days operation, II 280 200 - number of tons landed, I 710 670 - number of tons landed, II 490 470

Note: figures are given in Mau.Rs. if not otherwise stated. Notes Table 5

1/ Assuming a daily average catch of 75 kg/fisherman.

'.!:_/ Assuming a daily average catch of 100 kg/fisherman. l./ Fishermen should earn about half their wage in bonus; thus a 40-day trip should bring about Mau.Rs. l OOO. Fishing for 30 days, a fisherman should catch (30 x 75 =) 2 250 kg. To earn Mau.Rs. l OOO from a catch of 2 250 he should be paid a bonus of about Mau. Rs. O. 45 per kg. Thus for the trip, bringing in 88 tons, the bonus expenditure wi 11 be (88 OOO x O. 45·) Mau. Rs. 39 OOO.

Mau.Rs. 15/day for every day at sea (39 x 40 x 15 =) 23 OOO.

Sarne charge per fisherman-day as for food.

Cost of diesel: the main engine develops 750 BHP while steaming. At that rate it consumes about 3 tons of fuel per day. During fishing time the main engine and genera­ tors together use about one third of this; that is, one ton per day.

Cost per trip, steaming: (5 400 x 6 =) 32 400 Cost per trip, fishing/drifting (1 800 x 34 =) 61 500 Cost per trip, lubes 9 400

Cost per trip, total 103 300

Jj Crew bonus: captain: for a 50-day period, including a 40-day trip and 10 days in port he should earn the equivalent of about Mau. Rs. 12 500. As the project catch is 88 tons for that trip, the captain should have a bonus of Mau.Rs 140 per ton.

Following the same principle for the rest of the crew, the total bonus payment, should be about Mau.Rs. 560/ton (not including fishermen). - 41 -

Appendix VII

EVALUATION OF LONG-TERM POLICIES FOR BANK FISHERIES

1. QUANTITATIVE EXPRESION OF THE POLICY

In this appendix it is assumed, or postulated, that the Government intends to see to it that the Mauritian population will be provided in the future with at least about 15 kg of fish (live weight equivalent) per. caput and year, and to do so it estimates that by 1985 about 5 OOO tons of fish are required from sources other than fisheries by artisanal fisher­ men around Mauritius and outlying islands and in forms other than processed (canned, smoked and dried).

In this appendix two strategies are compared for reaching a goal of 5 OOO tons of frozen fish by the year 1985. The strategies are the following:

(a) the operation of several purpose-built mother ships, owned by Mauritian interests (whether by the State or by private individuals is not a major concern at this stage) and manned primarily by Mauritian nationals;

(b) the purchase of 5 OOO t of fish annually from foreign-owned and manned vessels based at Port Louis and exploiting (against a licence fee) the offshore banks.

2. ASSUMPTIONS

Period of comparison. It would, of course, be ideal if one could compare strategies (a) and (b) considering their entire economic lifetime. This would be done by scanning inputs and outputs back to a base year and then compare. A typical year is selected for the comparison: 1985. This procedure will not be much less accurate than that of projecting operations over the entire lifetime of the vessels, but it is much less cumbersome.

Price levels. The same procedures have been used as when developing the vessel budgets; that is, the prices in force at the time of the investigations have been used and, thereby, it is implied that they will change at the same rate as inflation during the coming years. Naturally, in a comparison such as this, the only interest is in changes in relative prices.

Activities compared. On comparing the alternatives those aspects of fishing, or sub­ sequent handling of fish, which would be about the same for both alternatives are disregarded. This means, in this instance, that the activities on shore can be disregarded; the handling, storage, distribution and sales of frozen fish will involve roughly the same activities regardles:;of the source of the fish or who caught them originally.

Use of foreign exchange. The use and savings of foreign exchange is central to Government concerns at the moment and is, therefore, central in this comparison as well. The details of the assumptions concerning the use of foreign exchange are found in Tables 4 and 5 of Appendix VI and in Addendum A (Notes to Table 1) to. this appendix.

3. DETAILS OF ALTERNATIVE STRATEGIES

Alternative strategies have differing demands on resource use. These differences are illustrated in Table 1. The detailed reasoning that led to these figures is given in Addendum A of this appendix.

4. COMPARISON

Foreign exchange. By investing U.S.$ 18 million in a fleet of purpose-built mother ships, Mauritius can (when these vessels are efficiently operated and fishermen catch 100 kg/day on the average) affect annual foreign exchange savings to the extent of U.S.$ 2. 6 million. Over a 15-year period this means a return (in the form of dollars saved) - 42 -

on the invested dollar of about 12 percent. Even if the dollar was valued higher than its present rate (that is, saying that the dollar is worth more than Mau. Rs. 6) the return would still be of the order of 12 percent. If catch rates were only 75 kg per man and day on the average, no foreign exchange would be saved.

Looked at another way, the foreign exchange cost of supplying fish by Mauritian vessels is about 2/3 of what it would be to buy fish from foreign vessels exploiting the banks - and based in Port Louis - if catch rates were as high as 100 kg per man and day. Table 1 Details of Policy Alternatives

A B

Mauritian -manned and operated Purchase of frozen bank Resources used to supply purpose-built mother ships fish from Korean (or 5 OOO tons of frozen fish/ other)vessels fishing year to Mauritius Assuming average on banks based at catch rate per 75 kg Port Louis fishermen and day 100 kg

Foreign exchange cost of buying fish, U.S.$ None None ]:__/7 150 OOO

Foreign exchange cost of fishing U.S.$ 2/ 4 550 OOO 6 100 OOO None .j;>­ w

Investment capital required, U.S.$ '}_/18 OOO OOO 24 OOO OOO None Foreign technical assistance I - Man-years during 5-year start- 4/ up period 7 7 None

Employment of Mauritian labour at sea (man-years of employment/year) / 5 - skilled I 27 36 None - semi-skilled (fishermen + crew)_}6 441 588 None I Note: 1/ to 6/ refer to entries under "Addendum to Appendix VII". - 44 -

Employment. Investment of U.S.$ 3. 6 million creates about 100 man-years of employment. This means that to create one man-year of employment in the fishing industry the equivalent in foreign exchange of Mau.Rs. 216 OOO is required. When the bank fishery has stabilized, yearly replacement investments for sea-going vessels will be of the order of Mau.Rs. 14 OOO.

Capital. It does not seem likely that the bank fishing industry will be profitable enough to contribute much toward internal capital accumulation. Earnings will be sufficient to repay loans on vessels (through funds channelled to that purpose from depreciation allowances), and pay interest that is something of the order of 15 to 20 percent per year (calculated on the average investment and pre-taxes).

5. EVALUATION

The comparison between the alternative strategies have yielded a number of figures. These can only be evaluated - that is, proclaimed favourable or unfavourable for Mauritian interests - through a comparison with post-national averages and expected trends.

This evaluation is not within the Mission's terms of reference. The Ministry of Economic Planning and Development, however, has the data needed to carry it out.

A few observations on future trends will be added in production and unit values which might affect the evaluation and which are not accounted for in the projections expressed in quantitative form in Table 1.

From previous discussions (Appendix III, in particular) it is clear that catch rates are much more likely to be about 75 kg per day than 100 kg per day and fisherman, particularly when the fleet of bank fishing vessels number about ten or twelve. Thus, the advantages to the economy of Mauritius of having its own bank fishing vessels instead of buying fish from the Korean vessels would seem extremely limited.

It may be said that reliance on the Korean vessels is unsound. There are no guarantees that they will continue fishing for the Mauritian market. Considering the rapid economic growth in South Korea one might expect that within a decade or a decade and a half, Korean wages will have risen so much (relative to those in Mauritius) that they cannot continue fishing for the Mauritian market. The answer would be that within the same period, it is doubtful 'vhether the fishery will be a paying proposition even for Mauritian vessels given its "constant" productivity. Were the Korean vessels to cease fishing within the next year or so, Mauritius could, in all likelihood, purchase frozen white fish in the international market. In the spring of 1979, frozen hake fillets in blocks from Argentina sold in Boston, U.S.A. for aboutU.S.$L50perkg(wholesale).This supply is likely to remain for a few years. The hake resources of the southwest Atlantic are not fully exploited.

However, it seems that the cost of a new, purpose-built mother ship makes it an un­ realistic alternative for the Mauritian bank fishery. The answer may lie in employing expert design assistance in developing a suitable mother ship by rebuilding second-hand vessels. The economics of the second-hand versus the new mother ship is discussed in more detail in Appendix VIII. - 45 -

ADDENDUM TO APPENDIX VII: NOTES TO TABLE I

J../ It is assumed that the Government will increase the retail price so that the boats on the average will receive Mau.Rs. 10 per kg ex-vessel but that the Koreans will be required to pay a licence fee of Mau.Rs. I OOO per ton. Thus, costs will be Mau.Rs. 9 OOO per ton for fish landed by the Koreans.

The dollar is worth Mau.Rs. 6.00. Thus, the price paid the Koreans is U.S.$ I 500 per ton for 5 OOO tons c.i.f. Port Louis, or a total of U.S.$ 7 500 OOO. The expenditure in foreign exchange is lower than this amount as vessels purchase goods and services in Port Louis.

Local expenditures are calculated below:

Category Total yearly Expenditure Port Louis Expenditure on local budget (a) in goods and services Port Louis Mau. Rs. % Mau.Rs. % Mau. Rs.

Repair and maintenance 350 OOO 10 35 OOO 50 17 500 Food and water 86 OOO 80 69 OOO 25 17 300 Crew salaries 530 OOO 10 53 OOO 50 26 500 Fishermen salaries 700 OOO 10 70 OOO 50 35 OOO Food and water fishermen(a) 106 OOO 80 85 OOO 25 21 OOO Petrol 106 OOO 100 106 OOO 5 5 300 Diesel 580 OOO 100 580 OOO 5 29 OOO Stevedores 108 OOO 100 108 OOO 80 86 OOO Harbour dues 24 OOO 100 24 OOO 50 12 OOO

1 130 OOO 249 600 (say 250 OOO)

(a) Assuming six trips a year according to budget, see Tables 4 and 5 in Appendix VI

One vessel will thus spend the equivalent of Mau.Rs. 1 100 OOO (approximately) from its foreign exchange to pay for goods and services purchased in Port Louis. ·

However, as part of these were originally imported (how much is unsure; the figures used are guesstimates and should be checked), the net savings in terms of foreign exchange does not amount to Mau.Rs. I.I million per vessel and year but are likely to be about Mau.Rs. 0.25 million.

To supply 5 OOO tons, there would be a need to have 5 OOO (117 x 5) 8.55 Korean vessels.

Thus, the total foreign exchange savings due to the use of Port Louis, would amount to about U.S.$ (8.55 x 025:6 =) 0.351 million. Say U.S.$ 0.35 million.

]:_/ See Tables 4 and 5 in Appendix VI for these data.

Annual fixed costs which have been made or must be made in foreign exchange amount to Mau.Rs. 2 486 OOO, or the equivalent.

The per-trip foreign exchange expenditure amounts to a yearly total of about Mau.Rs. (5 x 140 OOO=) 0.7 million. - 46 -

Thus, the total foreign exchange expenditure will amount to Hau.Rs. /(0. 7 + 2.5) x (5 000:(117 x 5) ~7 27.2 million. This is equal to U.S.$ 4.55 million.-

3/ The Government must permit foreign hard currency loans to arrange for construction and purchase of purpose-built mother ships.

The Mission has estimated a purpose-built mother ship, fitted and equipped for fishing to an investment of the equivalent of Mau.Rs. 12 million or U.S.$ 2 million per boat.

As 8.55 boats are needed, total investment for this fleet amounts to U.S.$ (9 x 2 =) 18 million.

4/ Skippers and engineers are assumed to have been contracted at commercial rates and their salaries paid in hard currency. Thus, there is no element of aid in their use.

Technical assistance may be used in:

(a) design of a purpose-built mother ship (one man-year); (b) organization of shore-based vessels support using two men for three years.

1_/ We have assumed that the skipper and chief engineer on the mother ship are foreigners and paia in hard currency. This leaves on each ship, the second mate, the second officer in the engine room, and the bosun (or masterfisherman) as skilled employees. For nine ships, employment will be 9 x 3 = 27.

6/ The remainder of the crew and the fishermen we call semi-skilled. They number To + 39 = 49 on each vessel. For the fleet as a whole: 9 x 49 = 441 men. Appendix VIII

TYPE OF VESSEL

1. PURPOSE-BUILT MOTHER SHIP

What should an improved mother ship look like? There would seem to be a number of ways in which the present vessels can be improved. First and foremost, the crews' accommodation especially the fishermen's, should be improved. At the moment there is only one vessel, the NAZARETH, which has acceptable accommodation for fishermen. Each fisherman should have a bunk with a mattress and access to the same type of shower and mess room as the crew.

Secondly, the capacities of the various parts of the existing second-hand ships are not equal. For example, a vessel may be large in the sense that the fishermen on board are not able to fill the hold during four to five weeks at sea, while the TALBOT is small in the sense that the frozen storage can only hold about 12 tons.

However, the ideal mother ship cannot be defined by simply applying technical and economic criteria. It must suit the people on board.

Amongst those familiar with the bank fishery of Mauritius there is agreement that a 20-m LOA vessel is too small, while a 60-m LOA vessel is too large. It is too large because there will be "too many" fishermen on board, and because the trips these vessels have been out on have been too long. The duration of the trip of course need not be related to the size of the vessel. It is determined by the size of the f ishhold and average daily catches. When it is said that there are too many fishermen on board, reference is made to the fact that quarrels and illnesses make it difficult to keep the ship fishing and happy. The 20-m vessel is too small because of the limited fishhold and because it is unsuitable for fishing on shore banks that are further away.

It seems to the Mission that an improved mother ship could be about 40-m LOA. have about 40 fishermen on board, and remain at sea for no more than 40 days at a time. The vessel should be able to handle catches of about 100 kg/man and day. Care should be taken to make the vessel suitable for safe and speedy handling of dories and for transport of cargo and people at sea.

Constructing a ne1~ mother ship is going to be expensive. The Mission has developed a budget for a new 40-m ship estimated to cost about Mau. Rs. 12 million. Assuming that the vessel is efficiently operated and that the skipper knows his job both in finding the fish and in keeping the fishermen on the fish, the vessel may make money. This assumes that the real price of fish is about one third higher than it is today.

2. NEW OR SECOND-HAND MOTHER SHIP

The industry can continue as before and use second-hand vessels; it is not absolutely necessary to build new mother ships. Looked at from the economic point of view, the second­ hand vessel may appear superior because of its comparatively low purchase price. As discussed in subsection 4.3 of the report, this advantage is balanced to some extent as the second­ hand vessel will cost more in maintenance and, therefore, is likely to spend more time in port thereby reducing the catch and income.

If the cost of a rebuilt second-hand mother ship is Mau. Rs. "X" million, how much can a new purpose-built vessel cost and still be more economic? A few calculations have been made in this regard. The assumptions are listed in Addendum A to this appendix. .The results of the calculations are given below: - 48 -

Maximum cost of new purpose­ built mother ship (if it should Rate pf discount, % be more economic than the second- hand vessel)

Cost of Second-Hand Vessel "X" plus (Mau.Rs. million)

5 8.2 10 6.2 15 4.9 20 4.0 25 3.3

This should be interpreted in the following manner. If the cost of capital (in this case foreign exchange) is as high as 15 percent per year, then a purpose-built mother ship should not cost more than the price of the remodelled second-hand ship "X" plus Mau.Rs. 4.9 million. If the cost of capital is five percent per year (unlikely\ then the cost of the purpose-built vessel may go as high as Mau. Rs. 8. 2 million plus "X" before being uneconomic.

Thus, the discount rate, or cost of capital, is important. The private entrepreneur would be inclined to choose a low investment (in this case, to rebuild second-hand· vessel) and relatively large annual costs (whether in the form of actual expenditures or as reduced income is immaterial in this context) as he would have to use, at least partly, high-cost capital. The Government could make him more inclined to buy a new vessel by allowing him to take advantage of long-term credits at favourable interest rates available with foreign shipyards.

A national fishing company with Government backing might be able to attract low-cost finance from other governments or from international aid agencies. It may, consequently, find it economically sound to construct new mother ships.

3. MORE EFFICIENT USE OF MOTHER SHIPS

As mentioned in the report, the "primary" productivity (that of the fisherman in the pirogue) in the bank fishery seems to be stable. Improvement in overall productivity of the fishery should come from an increased use of mother ships, which can be measured by the number of fishermen-days per mother ship and year.

One way of increasing the number of fishermen-days per vessel and year would be to keep the vessels on the fishing grounds for four to six months and to transship supplies, crew; and catch. Another less radical way would be not to transship but to use more than one crew for one vessel. This approach would not lead to additional investment and such extra costs as it would cause would be recurrent.

Would it pay to have three crews for two new purpose-built mother ships? It has been seen that the operation of such a vessel, if it is to have any chance of being profitable, must be based on at least 240 days at sea per year (or a 300-day operation if time in port between trips is also considered). During 240 days at sea the vessel is expected to achieve 180 days of fishing. - 49 -

Assume that the time at sea could be increased to 300 by reducing the time in port between trips and for annual overhaul. Annual overhaul can be speeded up but probably at a cost. How many additional fishing days can be expected? Theoretically, another trip and a half, that is 45 days, thus making 225 fishing days per year. As is portrayed in Figure 1 of Appendix III, the Korean vessels now seem to achieve this number of fishing days/ year. It is possible, and they do it with one crew. If an increase by 45 fishing days per vessel and year were achieved, it would mean an increase in fishing time of 25 percent.

Would the cost of employing a third crew be justified? It would cost per year, in fixed salary, about Mau.Rs. 0.75 million (see Table 4 in Appendix VI). They would work, on the average, 200 days at sea per year instead of 240 with only two crews. This means that the yearly salary of the first two crews would decline by about 8 percent (bonus accounts for 50 percent of earnings and the bonus will now be paid for 200 days fishing instead of for 240) while their time in port will increase by 32 percent.

Net income per mother ship and year will increase by the equivalent of "trip-surplus" for one and a half trips. This corresponds to:

Additional trip­ Mau.Rs./kg ex-vessel Catch/fishermen-day surplus per vessel, kg Mau. Rs. million

7.80 75 0.65 10. 00 75 0.94 7.80 100 0.93 10.00 100 1. 31

Thus, three crews for two vessels are interesting only if the price of fish at quay­ side is increased (to today's prices). The Government may find it worthwhile to advocate this alternative as it will create additional employment.

The mission does not believe that arrangements for transshipment of supplies, crew, and catch at sea will be more economical than the alternative of changing crew at port. Transship­ ment will mean use of more vessels and ~ore crew. The possible increase in fishing time per vessel is marginal. - so -

ADDENDUM TO APPENDIX VIII: NEW OR SECOND-HAND MOTHER SHIP? ECONOMIC CONSIDERATIONS

LOST FISHING TIME

Assume 300 days operation and an average of 15 days in port between trips instead of ten. This would mean an addit.ional total of about 30 days in port and a corresponding reduction in the number of days at sea. We have assumed (see Table 3, Appendix VI) that three out of every four days at sea are fishing days. If so, a reduction of 30 days at sea amounts to a loss of 22.S fishing days per year.

Table 5, Appendix VI identifies the trip surplus (gross sales proceeds less trip catch costs) in the case of Mau.Rs. 10 per kg of fish ex-vessel and 75/kg per fisherman and day of fishing. In that situation, the surplus is Mau.Rs. 21 OOO/day of fishing. Thus, the yearly loss caused by additional time spent on repair and maintenance would amount to: 22.5 x 21 OOO = 470 OOO.

SALVAGE VALUE

It is assumed that after ten years the second-hand vessel is worn and must be replaced. After ten years, the purpose-built vessel is still good for service and has a salvage value. We state that value to be equal to 1/4 of the purchase price or Mau.Rs. 3 million. We assume that the second-hand vessel does not have a salvage value after ten years; it is worthless.

COST OF REPAIRS AND MAINTENANCE

It is assumed the 11 extra11 repair and maintenance cost of the second-hand vessel is Mau.Rs. I OOO per calendar day. This is a high estimate (and in fact does not tally with the estimates made in Appendix VI in which the costs for the new and the second-hand vessels are about the same). This high estimate is used to give the new purpose-built mother ship a chance to prove itself economic.

FISHING OPERATIONS AND CATCH

It is assumed that the vessels are equally efficient per day at sea in terms of quantity of fish caught and in terms of cost of operation (other than repairs and maintenance). - ~l -

!>ppendix IX

OUTLINE OF A SHORT-TERM ACTION PROGRAMME

The Mission considers the method of arriving at an action programme at least as important as the contents of the programme. It should be the result of negotiations between the concerned parties. This action programme is not. It is an example given to illustrate the scope and contents of a programme and to provide the Government with an idea of the Mission's view of what kind of measures should be included.

Some of the activities included in the action programme are under active consideration by Government; they are included for the sake of completeness.

A. Action programme: Government

(a) Price of frozen (bank) fish

(i) Increase price of frozen fish at retail level to about Mau.Rs. 12.50 per kg so that price ex-vessel reaches Mau.Rs. 10/kg;

(ii) Establish an index which relates the price of frozen fish to the price of diesel fuels and cost of vessel construction; announce that the price of frozen fish will be revised on a three-month basis following this index; or,

(iii) Announce that in one to two years time (or when supplies have been restored to about the 1974 level of 4 kg per caput and year) prices will no longer be controlled.

(b) Foreign fishing vessels operating on the off-shore banks in the Exclusive Economic Zone of Mauritius

(i) Specify that licences be eiven to foreign vessel owners. They, in turn, are free to choose local buyer·s by contract or auction. Thus, licences should not be given to local companies to make agreements with foreign vessel owners;

(ii) Specify conditions unde~ which foreign vessels be allowed to fish in Mauritius waters and take active steps to inform local and foreign companies of these conditions;

(iii) When the price of frozen fish is increased, introduce a levy on the fish landed by foreign vessels; the levy should be equal to the increase in price, calculated ex-vessel;

(iv) Determine the maximum number of foreign fishing vessels that will be allowed to fish; auction the licences among foreign vessel owners, if demand exceeds supply.

(c) Technical aid to Mauritian fishing companies

(i) Recruit a fleet manager to assist fishing companies in the management of vessels through review of a) on-board management and operational routines, b) organization of shore-based support activities, and c) managerial control of vessel operations. See Addendum A of the Appendix for terms of reference;

(ii) Recruit a naval architect to review and design the ideal combination of mother ship and dories. The review should include a study of the optimum way of rebuilding second-hand vessels (long-distance trawlers and tuna longliners) for the same fishery. See Addendum B for terms of reference; (iii) Develop jointly with another West Indian Ocean country a regional project proposal for the construction of the "ideal" mother ship using regional EEZ funds available to ACP countries in the region;

(iv) Prepare, in the Ministry of Fisheries, guidelines for handling and storage of bank fish aboard dories and mother ships. The guidelines should include estimates of costs (capital and recurrent) for introducing proposed improvements. The guidelines should be directed to the local bank fishing companies;

(v) Prepare, in the Ministry of Fisheries, fishing charts over the off-shore banks and supply them to fishing companies.

(d) Education and training of fishermen

(i) Provide scholarships to secondary schooling for children from fishermen families;

(ii) Develop short ,courses for practising fishermen in:

- engine (outboard and diesel) repair and maintenance - fishery enterprises and how they work (organization and economy) - fish handling - crew functions aboard a mother ship - safety at sea - swimming and life-saving - reading and writing

(iii) Issue passbooks to fishermen stating previous employment, courses taken, level of education.

(e) Training of skippers and engineers

Arrange scholarships for Mauritian second-mates and marine engineers to travel abroad to obtain theoretical and practical training enabling them to become skippers and engineers on local bank or tuna fishing vessels. Schools exist in Majunga (Madagascar), Terna (Ghana) and in Europe.

(f) Fisheries management education

Organize overseas (France, UK) visits to modern industrial fishing companies for managers of Mauritian fishing companies (vessel staffing and salary structures, shore-based organizations for vessel support, fishermen education, and training).

(g) Rescue services

The Ministry of Fisheries should inform the Cabinet of the importance of an air­ strip on St. Brandon for speedy evacuation of sick fishermen both from the bank fishing vessels and from the fishermen's community in St. Brandon. If an airstrip is provided at St. Brandon, the Ministry of Fisheries shall arrange that Air Mauritius planes be made available for evacuating fishermen on request, Payment for such services should be a combination of a yearly fee, paid be all vessel owners, and a charge per flight.

(h) Harbour facilities

(i) Provide 80 m of quay within SO m of a cold storage where a) national bank fishing vessels will have absolute priority for berthing and off-loading of fish,and b) conveyor belts will be made available for off-loading fish, if required, straight into cold storage; ·- 53 -

(ii) Review the charges levied on fishing vessels using the harbour facilities with a view to giving them more favourable treatment than international cargo vessels.

(i) Safety at sea

The Government should work out with industry mini.mum safety provisions for dories and mother ships. They should not automatically be assumed to be identical to those of merchant ships.

(j) Aid to labour unions

Provide financial assistance to labour unions for education and training of union leaders fqr assistance in running union offices and for payment of clerical staff.

(k) Information on fishing for surface tunas in the West Indian Ocean

(i) Decide what information the Government wants to have from the tuna purse­ sei.ni.ng operations to be conducted by the "Mauritius Tuna Fishing and Canning Enterprises Ltd." and make arrangements to secure the relevant data;

(ii) Agree with the Seychelles Government on an exchange of information which will provide Mauritius with relevant information on the forthcoming pole-and-line fishing to be carried out by a Seychellois company;

(iii) Go ahead with the regional live bait survey.

(1) Licensing of tuna fishing vessels

Encourage countries of the West Indian Ocean to agree on strategies for licensing of tuna fishing vessels registered in countries which are not part of the region.

(m) Commercial tuna fishing ventures

(i) Refrain from entering into agreements concerning tuna fisheries until more is known about the commercial results of purse seine versus pole-and-line fishing in the West Indian Ocean;

(ii) Use professional negotiating advice when conducting negotiations for commercial tuna ventures. Such advice is available from FAO.

B. Action Programme - Industry

(a) Industry association

(i) Establish an industry association which could act as spokesman on behalf of the off-shore fishing companies before Government and labour unions;

(ii) Participate in regular (quarterly meetings) with representatives of unions and Government.

(b) Aid to fishermen

(i) Negotiate 12-month contracts with union representatives providing for basic pay, annual leave, minimum fish bonus, and maximum number of days at sea per year;

(ii) Give priority in recruitment to fishermen who have passbooks and who have satisfactorily completed courses to be held for fishermen; - 54 -

(iii) Finance, in part,courses of study for fishermen;

(iv) Abolish the difference between fishermen and crew aboard fishing vessels.

C. Action Programme - Unions

(a) Negotiate annually with representatives of the fishing industry association to arrive at contracts as specified in "Industry action programme" point (c)

(b) Use third party arbitrators to settle disagreements arising during periods when contracts are in force

(c) Guarantee full crews to vessels owned by companies with which long-term contracts have been agreed

(d) Work for an abolition of differences between crew and fishermen with respe'ct to pay, food, accommodation and general welfare aboard vessels.

IMPLEMENTATION OF THE ACTION PROGRAMME

What parts of the action programme should be implemented first? From industry's point of view, the price increase is the most urgent part of the package. It should, therefore, be made clear to industry and the unions that price increases will be reviewed in the light of their contributions to the implementation of the action programme. There should be no need to review the increases in the light of cost increases as the action programme provides for automatic adjustments.

Some of the resources needed for the implementation can be obtained through foreign aid. The balance of the resources needed for the implementation can be obtained through foreign aid. Consultancies could be provided for out of UN or bilateral technical assistance programmes. Similarly, some of the training activities could be funded by technical assistance agencies. - 55

APPENDIX IX

ADDENDUM A 'l'O APPENDIX IX: TERMS OF REFERENCE

Title: Consultant Fisheries Administrator/Fleet Captain

Duration: 2 to 3 years

Tasks: To advise and assist the Mauritian bank fishing industry in establishing effective management techniques and operative procedures with a view to improving the general performance of this industry. Included in these duties, but not limited to, would be to:

(a) prepare suitable remuneration schemes and plans for improvement of general work conditions of all floating personnel,

(b) establish safety standards,

(c) establish procedures to reduce turn-around time in port,

(d) advise on maintenance routine to avoid breakdown of m.achinery, and

(e) advise on suitable on-vessel work routines with a view to crew discipline and performance.

Qualifications: The consultant, who should speak French, should have extensive experience as skipper on ocean-going fishing vessels and should have experience of providing in-port support services for such vessels. - S6 -

APPENDIX IX

ADDENDUM B TO APPENDIX IX: TERMS OF REFERENCE FOR CONSULTANT NAVAL ARCHITECT

Title: Consultant/Naval Architect

Duration: 4 months

Location About half the period in Port Louis, Mauritius, the rest on travel to the Far East and Western Europe for inspection of second-hand vessels.

Tasks: To advise the Government of Mauritius on a suitable design for mother ships to fish the offshore banks having Port Louis as base. The optimum mother ship is likely to be about 40 m long, be away on trips of about 40 days, carry 12 to 13 pi rogues and a total crew of about SS. In particular:

(a) to make a rough design and cost estimate for a vessel to be built especially for this fishery, and

(b) to identify the best ways to rebuild second-hand vessels (e.g. tuna longliners or Atlantic stern trawlers) to fit the local fishery and to provide cost estimates for such conversions.

Qualifications: The naval architect should have been responsible for the design of similar sized fishing vessels, preferably in commercial ship-building yards and have experience with tropical fisheries. VV /i\Jt,990/E/2.80/ 'i I 150