Report indicates Pacific tuna fisheries weathering COVID-19 well

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By Bernadette Carreon 

The fishing effort in the tuna-rich waters of the Parties to the Nauru Agreement (PNA) does not appear to have been significantly impeded by the COVID-19 crisis, according to a report prepared by Brisbane, Australia-based resources consultancy MRAG Asia Pacific.

The report, which was completed in April, stated that travel restrictions as a result of the pandemic “has not resulted in a widespread decline in fishing effort”.

The 32-page report looked into the changes in fishery and market dynamics of the PNA member states — including Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Palau, Papua New Guinea, Solomon Islands Tuvalu, and Tokelau — in the period of January to April 2020, as the pandemic took hold.

The report said that the information was drawn from PNA Fisheries Information Management System (FIMS), which focuses on the purse-seine fleet, and interviews with industry participants throughout the supply chain.

The FIMS data showed purse-seine fishing effort declined slightly in February 2020, compared to the period spanning November 2019 to January 2020, but has since recovered in March and April.

“Indications are that total effort (in exclusive economic zones plus territorial seas plus archipelagic waters) increased at a faster rate than effort solely in EEZs,” the report found. 

“Preliminary data on levels of effort and the intensity of fishing effort (measured as the number of fishing days recorded per calendar day) in April 2020 are the highest in the 2019–20 period.”

It said, based on the data, fishing effort in March 2020, when port closures and quarantine restrictions were put in place, “was roughly similar to equivalent periods in March 2018 and 2019”. It also noted that overall fishing intensity in March 2020 was around 6.5% higher than the average for March 2018 and March 2019.

While fishing intensity is up, and the geographic location of fishing has changed, and the report found catch rates for January to April 2020 were 30% lower than in the same period in 2019. The report suggested a causal link between the lower catches and increase in fishing intensity — presumably a result of vessels taking longer to fill up in the low-catch conditions.

Fishing intensity increased in the EEZs of Federated States of Micronesia, Tuvalu, and Kiribati by 68%, 68%, and 12% respectively; with intensity lower in the high seas (14%), Tokelau, and also marginally in PNG.

“There is limited evidence from the data to indicate any of the variations are COVID related to date,” the report noted. 

A steady decline in catch rates was seen at the end of 2019.

On 14 July, PNA CEO Ludwig Kumoru said fishing efforts have not slowed down despite COVID-19.

“Business hasn’t slowed down, uptake of days is still OK,” he said. 

“Boats are still taking up the same number of days and even before COVID-19. So nothing has really affected us. Except some boats have stopped going into their ports, but those boats have shifted to other ports like Marshall Islands, to PNG, to FSM. So you see a lot less boats are going into Kiribati [and] those boats are now going into the Marshall Islands or going into FSM. So, in a way, COVID-19 hasn’t really impacted our operations or the PNA fisheries.”

Mr Kumoru added that PNA needs to keep its operation going, but is prioritising the safety of its observers as well.

Although COVID-19 has not gravely affected the purse-seine catch, challenges are looming as a result of market uncertainty associated with the pandemic. The MRAG report noted that with restaurants in Asia and North America having periods of shutdown, or seeing dramatically reduced clientele, demand for sashimi tuna—– which is generally caught by the longline fleet — has dropped sharply. 

And the report said the continued port closures and travel restrictions could eventually affect fishing efforts in the PNA, and also result in lower demand for fishing days under the Vessel Day Scheme (VDS).

The VDS is the foundation of the PNA’s economic revenues, bringing in about US$500 million (€438 million) annually to the PNA member states.

“It seems likely that, collectively, the impacts of these logistical issues, if prolonged, will have an impact on fishing effort (although at this stage it’s not clear how much, and the impacts do not appear to be evident in the overall effort figures to date). For those fleets/companies who purchased fewer days at the start of the year, logistical difficulties may ultimately influence demand for VDS days for the remainder of 2020,” the report said.

Forum Fisheries Agency Investment Manager Tony Sullivan said eventually the economic impacts of the pandemic will be felt in the fisheries industry. Those increased costs stem from higher freight costs, being forced to move exports overseas, employment costs, and other one-time expenses associated with the pandemic.

“What I don’t have available currently is what the actual economic impacts of this are, and it is probably a little bit too early to tell, but we know that it is going to be significant in terms of export revenue, employment, and businesses actually being able to sustain themselves through this pandemic crisis,” Mr Sullivan said.

This news story first appeared in Seafood Source on 20 July 2020.

In Solomons, some fisheries sectors thrive while others struggle under pandemic rules

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HONIARA – In the provinces of Solomon Islands, a rising interest in fishing by people in coastal communities is helping keep the country’s fishing industry active amid the COVID-19 pandemic.

The Permanent Secretary of the Ministry of Finance and Treasury, Makini Dentana, has confirmed that the fisheries sector is the only industry currently generating revenue in the Solomons.

“The good news is that, despite the COVID-19 pandemic crises globally, our fisheries industry, especially Soltuna, is still generating revenue to the country,” Mr Dentana said.

Records from the Ministry of Fisheries and Marine Resources (MFMR) show a steady increase of revenue collected from fisheries exports and licence fees by both inshore and offshore fisheries activities in recent years.

But with the current closure of the Solomon Islands border and other pandemic restrictions, there has been an increase in fishing, as most working-class people have been laid off or made redundant due to COVID-19.

And despite the restrictions and the introduction of the State of Public Emergency (SOPE) by the government in April, purse-seine vessels that continue to fish in the Solomon Islands exclusive economic zone (EEZ) are still transhipping at the Honiara port.

The main fish market in Honiara remains open, and continues to benefit from the tuna industry, just as it did before the arise of the coronavirus SARS-CoV-2. This market is also where most of the fish stocks from the provinces end up.

The country needs the fisheries: according to the Central Bank of Solomon Islands, the local economy is projected to shrink by 4.99% by the fourth quarter of this year.

Fisheries one of four sectors that hold up the economy

In July, former Prime Minister Gordon Darcy Lilo, an economics expert, said the fisheries sector should be prioritised to sustain the country’s shrinking economy.

In an interview with the Solomon Islands Broadcasting Corporation, Mr Lilo said that, while COVID-19 continued to ravage the global economy, small economies like that of Solomon Islands would be hit especially hard. The country needed to set its priorities to make the most of gains.

“The fisheries sector will put our economy back on track. The most immediate one that comes to mind is the processing fisheries sector. I want us to put more focus on the fisheries sector,” Mr Lilo said. 

“A good part of our territorial boundary is made up of waters where we can fish, and we need to focus on both offshore and inshore fisheries. That will put our economy back on track.”

Head and shoulders photo of Gordon Darcy Lilo, former Solomon Islands Prime Minister. Photo: Charles Piringi/SIBC.
Former Solomon Islands Prime Minister and economics expert, Gordon Darcy Lilo. Photo: Charles Piringi/SIBC.

He said the fisheries industry was different to other important industries such as tourism, which involved complicated processes in order to operate. The fisheries industry could operate more freely, but needed continued commitment from the national and provincial governments.

“With fisheries, the resources belong to the state, it only requires both the national and provincial government to attract the right investors to establish processing facilities here, say in all provinces,” Mr Lilo said.

In recent times, the national government has identified fisheries as one of the four sectors with agriculture, mining, and tourism that stimulate most growth in the Solomon Islands economy.

The government hopes the four sectors will earn adequate incomes for the national purse to replace income earned from exporting round logs to China, as economic planners envisage all harvestable forests will have been logged in three or four years.

The logging industry currently provides about 50% of the government’s annual income.

With the inception of focus on the four sectors, the government aims to set up 50 fisheries centres and 50 economic zones in the 50 constituencies countrywide. 

For the fisheries and tourism sectors, contacts have been established between ministries and foreign investors, mostly in Asia.

Tuna in nets being transhipped from purse-seine vessel at Honiara port. Photo Francisco Blaha.
When tuna is transhipped at the Honiara port, fish that are discarded from the purse-seine vessels normally end up at the fish markets in Honiara. Photo: Francisco Blaha.

Fish vendors in Honiara struggle as sales fall

When the first SOPE was declared, Fishing Village market in east Honiara and White River market west of Honiara city were forced to close down. 

Only the Honiara Central Market has been allowed to continue operating, but under strict rules. This has allowed fish vendors to continue to work. But nearly all fish vendors have left Honiara for their home provinces, as part of a repatriation exercise by the national government conducted when the lockdown began. 

Local vendors have continued to work, and now, three months on, those from other areas are slowly returning. However, the Sunday Isles newspaper recently reported that a cash-flow problem was hitting the vendors hard, as the number of customers was well below the usual and was affecting daily earnings.

“Local vendors at the Honiara Central Market are attracted to this occupation because of the possibility of earning relatively medium to high incomes,” the paper wrote. 

“The impact of the state of public emergency on Honiara’s formal sector, which includes many fish-market vendors, will be huge.”

It said that vendors’ economic survival was threatened. They had already had “months and weeks with less cash flow as their customers spend less on their fresh fish” and would have to go through more if the SOPE was extended. 

Fish vendors at Honiara. People work among ice-chests under the shade of shelters or umbrellas. Photo Sunday Isles.
Almost all fish vendors have left Honiara for their home provinces, as part of a repatriation exercise by the national government to minimise the spread of COVID-19. Photo: Sunday Isles.

Sunday Isles reported fish vendor Henry Fafaluta as saying, “I find it very challenging during these past months by trying to earn the amount to cover the expenses I spent daily for fuel.”

He explained that normally his earnings depended entirely on his catch.

“If the catch is good then, I will surely earn good money that day, but compared to now, even if my catch is good, my earnings will still be low, due to the cash flow problem we experienced now.”

The person in charge of the fish section at the Honiara Central Market, Betty Fraser, said that she had seen vendors struggling in the current situation. 

“Vendors struggle every day to get the amount of profit to cover their expenses, some for their catch, and others for purchasing from the fishing vessels. With that they also try their best to at least earn a little extra to take back home to their families at the end of the day,” Ms Fraser said in the Sunday Isles.

Ambrose Sade normally gets fish discarded during transhipment in Honiara and sells it at the Honiara Central Market. He has observed changes in the way customers have bought fish in recent months.

“During the SOPE active period, I was fully engaged in fish sales here at the market. Everything is normal, except that the number of customers coming to buy fish at the market is a little below my normal take,” Mr Sade said.

“Cash flow is definitely an issue for me and the other fish vendors. Otherwise, everything is just normal here, as we are still keeping the fish-vending activities going.”

Vendors hope that an economic stimulus package proposed by the national government will be implemented soon and help to keep them going until sales pick up again.

Initial economic impact of COVID-19 reported for Micronesia, Marshall Islands, and Palau: media release

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WASHINGTON, 23 June 2020 – US Department of the Interior Assistant Secretary, Insular and International Affairs Douglas W. Domenech today announced the publication of three technical notes from the Graduate School USA’s Economic Monitoring and Analysis Program (EconMAP) providing an initial assessment of the economic impacts of the novel coronavirus disease 2019 (COVID-19) on the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. 

“While each of the three Freely Associated States continues to remain free of COVID-19 cases, the slow down and near termination of transportation across the region has had strong repercussions on their economies,” said Assistant Secretary Domenech. 

“It is hoped that the data and analyses in these technical notes can help illuminate impacts as FAS leaders draft fiscal measures and implement mitigation strategies to maintain financial and economic stability now and as they emerge from the impacts of COVID-19.”

Funded through the US Department of the Interior’s Office of Insular Affairs (OIA), the projections made in the EconMAP technical notes assume that travel will remain limited for all three of the FAS through fiscal year 2021 or until a COVID-19 vaccine is developed. 

The technical notes also utilize economic modeling techniques that project the economic impact of the COVID-19 pandemic without consideration of any external donor assistance and in the absence of any confirmed domestic cases. Should any of the three FAS report COVID-19 cases and develop community transmission, the projected negative impacts of the pandemic could be compounded. 

As laid out in the reports in more detail, the following highlights reflect initial expected COVID-19 impact in each FAS in fiscal years 2020 and 2021.

The Republic of Palau

The Republic of Palau – Heavily dependent on tourism with 20 per cent of all its workers employed in the tourism industry, Palau attracted 90,000 foreign visitors in fiscal year 2019, with the tourism industry contributing 20 per cent to gross domestic product. Prior to the pandemic, Palau’s fiscal year 2020 first quarter tourism numbers were on track to grow more than 30 per cent and estimated to attract 116,000 visitors for the year. Instead, it is now projected that Palau will experience a 51 per cent reduction of tourists, with a total expected of about 44,075 visitors, and a further 89 per cent reduction in fiscal year 2021.

Overall, Palau is expected to experience a 22.3 per cent decline in GDP and a loss of 3,128 jobs, primarily in the private sector.

The fiscal deficit for Palau, resulting from the loss of tax revenues such as the payroll tax, gross revenues tax, hotel room tax, and import taxes, is projected to be about US$40 million; however, this impact is partially mitigated by Compact grants and trust fund revenues. Construction and infrastructure projects already planned for Palau are anticipated to serve as an important economic stimulus when the cyclical negative impact of COVID-19 on Palau’s economy is being realized.

The Federated States of Micronesia

The Federated States of Micronesia (FSM) – While the FSM does not enjoy the same level of visitor arrivals as Palau, the majority of the COVID-19 impact will also be felt in the private sector, namely in the transportation and tourism sectors. The hotel and restaurant industries are projected to fall by 46 per cent in fiscal year 2020 and then an additional 75 per cent in fiscal year 2021, reflecting the absence of tourists and minimal interstate visitors. Similarly, the transportation sector, which includes shipping, port services, aviation, and airport ground handling, is projected to decline by 27 per cent in fiscal year 2020 and an additional 14 per cent in fiscal year 2021. Notably, the total projected loss to the FSM economy will be the most severe decline in the FSM economy since the start of the amended Compact period in 2004. 

Ultimately, the FSM is expected to experience a 6.9 per cent decline in GDP and a loss of 1,841 jobs, reflecting an 11 per cent reduction of employment levels in the FSM compared to fiscal year 2019. 

Optimistically, given the FSM’s strong fiscal position at the outset of the COVID-19 pandemic, the application of targeted internal and external assistance, including Federal assistance, to bolster health sector investments, improve resiliency in the health system, provide budgetary resources to offset revenue losses during the pandemic, and to provide direct support to affected individuals and businesses, will be sufficient to offset much of the projected threat to the FSM economy and to its fiscal position going forward.

The Republic of the Marshall Islands

The Republic of the Marshall Islands (RMI) – The overall RMI economy relies very little on tourism and visitor arrivals with the hotel and restaurant sector representing only 2.3 per cent of GDP. It is, however, more heavily dependent on the public sector, which includes important fisheries activity and sovereign rent receipts. The Marshall Islands Marine Resources Authority is already seeing declines ranging from 30 to 50 per cent across aquarium fish exports, the tuna loining plant operations, purse seining operations, and shore-based support to the longline fishing industry. With airline travel to the RMI near complete shutdown, wholesale fuel operations are projected to drop by 45 per cent, reflecting the loss of nearly all of its aviation fuel sales. 

Overall, the RMI is projected experience a 6.9 per cent decline in GDP and a loss of 716 jobs.

The projected impact on tax revenues, employment, and job loss coupled with potential significant reductions in fisheries revenues may result in a sizeable fiscal shock in the range of US$14 to US$20 million, larger than previous fiscal downturns experienced by the RMI. The RMI will benefit significantly from donor assistance that can help mitigate the projected negative impacts on the economy as a whole and to avoid a dangerous deterioration of its fiscal position. 

Breadth and depth of impact in three countries

In all three countries, the breadth and depth of economic impact will be substantial in the tourism, transport, and fisheries sectors, again under the current modeling with each country still reporting zero COVID-19 cases. Although Palau is hardest hit due to its tourism-centered economic structure, the FSM and RMI are also deeply affected. The EconMAP team expects to update the technical notes to eventually quantify the full range and impact that internal mitigating efforts and external donor assistance will have in each FAS, eventually providing a full report to better understand the combined impact of assistance and the net impact of the COVID-19 response.

The full and complete COVID-19 technical notes for the FSM, RMI, and Palau can be accessed at http://www.pitiviti.org. EconMAP technical notes are intended to provide a concise and timely analysis of an immediate situation for decision-makers, utilizing currently available data sets and macroeconomic tools developed in close collaboration with stakeholders.

All three FAS governments are working closely with Federal partners in the United States government, including the Department of the Interior, to invest in strengthening their health systems and to mitigate the impact on affected individuals and businesses. For a partial list of US Federal assistance to the FAS related to the COVID-19 pandemic, visit https://www.doi.gov/oia/covid19.

Funded through the Office of Insular Affairs’ Technical Assistance Program, EconMAP is managed by the Graduate School USA’s Pacific & Virgin Islands Training Initiatives. EconMAP produces annual economic statistics and economic reviews for the RMI, FSM, and Palau, as well as occasional technical notes on emerging issues.

The Assistant Secretary, Insular and International Affairs, @ASIIADomenech, and the Office of Insular Affairs (OIA) carry out the Secretary of the Interior’s responsibilities for the US territories of American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the US Virgin Islands. Additionally, OIA administers and oversees federal assistance under the Compacts of Free Association to the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau.

For more information, contact Tanya Harris Joshua, Deputy Policy Director, Office of Insular Affairs – Policy Division, US Department of the Interior, ph. 202 208 6008 | mob. 202 355 3023.

Ferry route an economic lifeline for Russell Islanders

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Over the years, the Gizo–Honiara ferry has provided an economic lifeline for the fishing community of the Russell Islands. This ship is moored at the wharf at Yandina, in the Russell Islands, to pick up the latest catch. The seafood is packed in ice in chiller boxes and will be sold in the Honiara markets.

The importance of the route has grown because of the on-off operation of the Yandina Fisheries Centre on Russell Islands.

The group of islands is in the Central Islands Province of Solomon Islands, and lies north-west of the national capital, Honiara. Gizo is the capital of Western Province.

The national government, through the Ministry of Fisheries and Marine Resources, built fisheries centres around the country in 1984. But many of the centres, including the Yandina one, have often stood idle due to the lack of machinery to keep them running.

To get around this problem and maintain a flow of fish for sale at the Honiara market, fish vendors saw an opportunity to purchase fresh fish from the Russell Islands or tuna from Noro, in Western Province. 

Because the Yandina centre is not running at the moment, the ice has been brought from Honiara. However, this is about to change: an agreement has been signed to repair the Yandina Fisheries Centre and get it running again.

South Pacific longline fisheries declining due to economics

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Data gathered by the FFA shows that economic conditions in the South Pacific long-line fishery is on a downward trend, with no signs it is likely to return to the profitability of previous years.

Dr Chris Reid, Chief Economist for the Forum Fisheries Agency, says that the fishing in the Pacific has always been subject to variability.

“The profitability of the long-line industry is determined by a number of factors: catch rates, fishing costs and the market price for fish,” he says. “When fuel costs are low and prices are good, most fishers have a smile on their face – as long as they are catching enough fish.”

There are a number of factors in play. There are good seasons and bad seasons, and the industry has natural fluctuations, up and down.

But the last five or so years have given poor returns to fishers, both domestic fleets and foreign vessels. The normal variability between good seasons and poorer seasons has been replaced by a trend downwards. These years have been marked by higher costs and a lower CPUE – catch per unit effort.

“The main thing about catch rates since 2011 is that they’ve consistently been lower than the average,” Dr Reid says.

The graph illustrates his point. The figures for 2011, the start of the downward trend, show high prices for fish but are offset by high costs and a bad CPUE. The black line shows very poor overall economic conditions in the industry.

Graph showing
Index of economic conditions in the south Pacific longline fishery. Source: Terawasi, P. and Reid, C. 2018, Economic and Development Indicators and Statistics: Tuna Fisheries of the Western and Central Pacific Ocean 2017, Forum Fisheries Agency. Note: Based on the longline fishery south of 10⁰S within the WPCFC Convention Area.

“It has got to the stage that a good year today is what an average year looked like 10 years ago, and today’s average year is like a poor year then. If we have a bad year now, it’s going to be absolutely terrible,” says Dr Reid.

In 2013, some fleets withdrew and in the last couple of years there appears to have been a significant drop-off in effort. Dr Reid says this is just simple economics.

“It’s like a classic open access fishery. Everybody floods in, then catch rates drop off and people withdraw. Catch rates might come back a bit but unless there’s a management regime in place, you just return back to this situation so the fishery will always just bump along the bottom,” he says.

“It’s economic over-fishing.”

He contrasts the economic notion of sustainability with a scientific stock assessment, which says the stock is biologically healthy. The long-line industry, though, targets the bigger fish and many of these have already been caught.

“The fish that are susceptible to being taken by long liners are the older fish, for example, for albacore it is those fish that are around five years and older that are susceptible. So the size of this segment of exploitable fish keeps shrinking even though the stock remains in a biologically healthy state,” he says.

“When you put out a line, instead of pulling in 40 kilograms for every 100 hooks you’re now pulling in 20, and it cost you the same amount of money to put the line out so your revenue is cut in half while your expenses aren’t.”

Dr Reid says that if fishing activity was reduced the bigger fish would likely come through again and catch rates increase. But because the scientific stock assessment shows over-fishing is not occurring, some members of the Western and Central Fisheries Commission (WCPFC) are reluctant to take action. Nonetheless, being conscious of the fall in catch rates, the Scientific Committee of the WCPFC has recommended that there be no further increase in fishing mortality on albacore to ensure the economic sustainability of the fishery.

He says the domestic fleets are affected more than the foreign fleets.

“If they do keep driving down the catch rates and boats stay there, the ones that are more likely to leave are the domestic boats because they don’t have the subsidies, they tend to have a higher cost structure and they have less ability just to move elsewhere. So they’re the ones that typically tie up,” he says.

“And you can only tie up for a certain period of time. The decision then becomes, if I have to have a major refit of the boat or I need a new boat, am I going to re-invest in this industry? I expect that they would be the ones who would get out.

“In recent times, the Fijian, Samoan and American Samoa fleets have all tied up at various times and there were stories of many operators trying to sell out. There were certainly examples of domestic fleets tying up whereas there was no indication of the Chinese or Taiwanese tying up.”

According to the scientists, things are going to get worse before they get better. They claim that if the fishing effort is maintained at current levels then the stock will keep falling in size until it stabilises at a lower level.

“A further decline in catch rates of seven per cent or so will obviously make the long-line fishery even less profitable. Half the problem with it being unprofitable is that nobody makes money so what’s the point in having a fishery out there? It could mean withdrawals of more domestic fleets,” Dr Reid says.

There is pressure within the Commission to include economics in the decision-making process, so that target points for albacore should not just be made on a biological basis. Many of the members of the WCPFC including both coastal states and fishing nations recognise that economics is important, and the decision-making processes have moved a long way from being biologically focused to include economic implications.

“At the national level we’ve seen Fiji cut their licenses because they had issues about catch rates in decline within their own national waters. They reduced the number of licenses to mitigate that effect. But it’s very hard if you’re in a zone to do something that is going to make any difference when everybody outside is continuing to fish. Often it can make some difference, but without necessarily bringing it back to where you used to be,” Dr Reid says.

“It’s all about creation of wealth. There’s a fish stock out there, it’s in my waters. I can try to extract as much wealth from that as possible, now how do I do that?“