Marine Fisheries in India: Issues of Growth and Instability during the Pre- and Post-WTO Periods

Abstract

Fisheries constitute an important segment of the national economy and the sub- national economies along the coast line of India. But notwithstanding its contribution to NDP, employment, food and nutritional security, export earnings and high potential for inclusive development, slow growth and high instability remain the grim concerns for development of this sector. This paper analyses the development of fisheries sector in Odisha, a poor coastal state in India, by estimating the trend growth rate and instability indices during the pre- and post-WTO (World Trade Organisation) periods. The results indicate that both production growth and instability have been lower in the post-WTO period relative to the pre-WTO period. While production growth has slowed down because of lower growth in exports following the WTO conditions, instability has declined mainly due to underproduction. Government provisioning of primary, secondary and tertiary infrastructure is suggested to achieve smooth and high growth of the sector. I. Introduction 1.1 Backdrop Fisheries, marine fisheries in particular, constitute an important sub-sector of the primary sector of the Indian economy both at the national and sub-national levels. This segment makes immense contribution to the economy in terms of employment and livelihood, provision of protein and food security, net domestic product and foreign exchange earnings. It has a huge linkage effect in the economy with the backward linkage operating through investment, employment and growth in boat, trawler and net making units and the forward linkage working through those in ice plants, cold storage, processing, transportation, marketing and other related activities. Although fishing, both marine and inland, is as old as human civilization, its enormous potential as an internationally tradable activity was increasingly felt only during the 1980s. With a maiden start in fisheries as a commercial venture in the 1980s, this sector has gradually grown over the years to its present giant status. The operations in fisheries have undergone a sea change with the low profile traditional and low key individual and community approaches to fishing wielding to a highly commercial, industrial and corporate business approach. The dynamics of this enterprise is well manifested in its international exposure, technological innovations and technology sharing, alignment to various quality parameters, competitive pricing and greater value addition. Exporters and export houses, the relatively new stakeholders in this business, have played a vital role in protecting fishermen from overproduction and excess supply, providing them price protection and earning foreign exchange for the nation/ state. Consequent upon these developments and innovative and efficient fishing practices, developed harvest and post-harvest infrastructure, growing domestic and international demand for sea food products and fisheries-friendly government policies, the marine fishery sector has experienced spectacular growth since the 1990's. The introduction of massive economic reforms in India and the associated liberalization, privatization and globalization regime (popularly known as LPG model) of managing the economy since 1991 has opened up the marine fisheries sector to the world market. Looking at the tremendous export and foreign exchange earnings potential of this sector, it was initially thought during the early years of economic reforms that the LPG measures would attract private capital, increase competition, improve efficiency, promote quality production and exports, augment foreign exchange earnings and give a boost to the marine fisheries activities in the economy. The establishment of WTO in 1995 is a milestone in the realm of institutional arrangement for international trade in goods, services, knowledge and technology. It became functional for the fishery sector in 2001 during the Doha round of talks, nearly one decade after the implementation of economic reforms in India. Like the reform measures implemented by the government of India, the WTO provisions were also intended to promote free flow of goods, services, capital, technical knowhow etc. worldwide with the member countries mandated to grant the most favored nation status to all of them. These two developments were self-reinforcing in nature. Both of them not only promised good returns in terms of capital inflow, technology upgradation, enhanced competition and efficiency and expanded economic opportunities including trade and growth in