ISSN: 2249-7196
IJMRR/March 2015/ Volume 5/Issue 3/Article No-3/151-158
Ramarao Mopidevi et al./ International Journal of Management Research & Review
PRIMARY FISH MARKET CONDITIONS: AN ANALYSIS ON ROLE OF
MIDDLEMEN (NIZAMPATNAM PORT – BAY OF BENGAL)
Ramarao Mopidevi*1, Sarada Devi K2
1
Research Scholar, Acharya Nagarjuna University (ANU), Guntur (A.P), India.
2
Associate Professor, VRS & YRN College, NTR Nagar (A.P), India.
ABSTRACT
Fisheries are an important sector in India –it provides employment to millions of people and
contributes to food security of the country. Despite their contribution towards the National
Income, fishermen in India do face a string of Economic and Social troubles. This paper
examined the role of various middlemen in marketing of marine products at landing centres,
in terms of price transmission, market margins, marketing costs, and the magnitude of
changes in these variables. storage, spoilage, transport cost, finance and lastly market levies
are the basic problems of fishermen at primary markets. In this regard There is the need for
improvement in the fish market environment in terms of the provision of infrastructures such
as electricity, transportation, and storage facilities. At the same time government control on
middlemen is highly required.
Keywords: Fisheries, landing centres, market structure, pisciculture.
INTRODUCTION
In a world where more than 800 million people continue to suffer from chronic
malnourishment and where global population is expected to grow by another 2 billion to
reach 9.6 millions by 2050- with concentration in coastal urban areas world must meet the
huge challenge of feeding our planet while safe guarding its natural resources for further
generations.
Rural areas in developing countries depends to a large extent on agriculture and its allied
sectors like fisheries, poultry, animal rearing etc. furthermore, most of the rural area show
hidden employment. Also the success of agriculture and its allied sectors depends on the
government which is more fragile in most of the developing countries than in industrialized
countries. Therefore, international agencies have placed high priority on sustainable
agriculture and allied sectors and rural development among other objectives to enhance
employment (Ayyappan S et. al. 2004).
As a supplement to agriculture, pisciculture is emerging as an important source of food
especially in respect of diminishing return in agriculture, increasing in income elasticity and
the inelastic supply of land. It is undisputedly proved that multiple resources for mankind
exist in the sea. For example, Japanese has utilized sea to maximum extent (Bhatt KS et. al.
1988).
*Corresponding Author
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Ramarao Mopidevi et al./ International Journal of Management Research & Review
Hence, pisciculture. Which is in intensive use of resources will offer a substantial alternative
source of world protein. It is identified that many developing nations are receivers of
potential technology for pisciculture. These nations include virtually the whole population of
developing world. The impact of blue revolution with systematic and scientific aquaculture is
highly emphasized as the world today is shocked with overfishing and fast depletion of many
species of fish in different zones (Bal DV et. al. 1984 ).
Approximately 50 million people worldwide depends on fishing for all or most of their
family earnings, while another 150 million depends on fish processing and other related
servicing industries (Channa Basavaiah M) . Several methods are adopted at national and
international level to promote sustainable fisheries. Sustainability of fisheries is distinct from
sustainability of fishery sector. While the farmer deals mostly with resources management,
the latter is also concerned with the sustainability of supply chain, such as fisherman
livelihood issues, employment issues for the industry and income adequacy.
Global fish production has grown steadily in the last five decades, with food fish supply
increasing at an average annual rate of 3.2 percent, outpacing world population growth at 1.6
percent. World per capita apparent fish consumption increased from an average of 9.9 kg in
the 1960s to 19.2 kg in 2012 (preliminary estimate). This impressive development has been
driven by a combination of population growth, rising incomes and urbanization, and
facilitated by the strong expansion of fish production and more efficient distribution channels
(Dutt et.al.).
Extensive work has been done on fishing sub-sector as a whole. Most of these studies
however concentrated on specific areas like marketing of fish, importance of fisheries and
socio-economic conditions of fisher, but none of them find out the role of merchants, skippers
(Owner of the boat) and their impact on various aspects of the fish producers (crewmen)
particularly in the marine fishing sector.
MATERIAL AND METHODS
Empirical methods are receiving increasing attention due to the growing calls to incorporate
real world data in order to improve the relevance of business research. Quantitative and
qualitative methods are the two basic methods of collecting empirical data in business and
management.
Justification of semi-structured interview
Interviews are classified into structured interviews, unstructured interviews, semi- structured
interviews and focus groups . Malhotra and Birks 2003). Silverman (2000) argues that the
term in-depth semi- structured interview has become common parlance, as it has the
advantages and avoids the disadvantages of both structured-interview and unstructured
interview.
Therefore, taking into consideration the research objectives, and the strengths and
Weaknesses of these four qualitative methods, semi-structured in-depth interviews were
employed to extract the interviewees' personal opinions and access the interviewees'
knowledge, experience and personal perceptions to address the research objectives.
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Ramarao Mopidevi et al./ International Journal of Management Research & Review
RESEARCH CONTEXT
Fisheries sector contributes significantly to the national economy while providing livelihood
to approximately 14.49 million people in the country. It has been recognized as a powerful
income and employment generator as it stimulates growth of a number of subsidiary
industries and is a source of cheap and nutritious food besides being a source of foreign
exchange earner.
India is the second largest producer of fish in the world contributing to about 5.43% of global
fish production. India is also a major producer of fish through aquaculture and ranks second
in the world after China. The total fish production during 2011-12 is at 8.67 million tones
with a contribution of 5.30 million tones from inland sector and 3.37 million tones from
marine sector respectively.
Guntur District is located in Andhra Pradesh along the east coast of Bay of Bengal. The
district has a coastline of around 100 kilometers. Guntur City is the largest city in the district
and administrative center of Guntur District. The district is a major center for learning.
Telugu and Urdu are the main languges spoken in this district. Coastal length of the district is
all about 43 km. there are 36 fishermen villages with 8 different landing centres in the
district.
DISCUSSIONS AND FINDINGS
Marketing plays a vital part in economic development as it encourages production, avoids
unnecessary movements in output and prices and deduce costs of Production Marketing
stimulates production mainly by establishing recently introduced demand dimensions. It can
convert latest demand into effective demand. Though it cannot in itself promote purchasing
power, it can uncover and channel purchasing power that exists and thus create conditions for
a much higher level of economic activity than existed before and create various means for
entrepreneur.
The developing economies of today are all transitional agricultural economies. In such
economies, with a large proportion of the country's food crops going to the urban markets and
production getting increasingly commercialized, general expansion and improvement of
marketing system is required. The experience of many countries, both developed and under
developed show that any strategy for agricultural output cannot go very far to stimulate
production in the absence of efficient marketing system.
Market scenario in selected region
An average fishing trip is approximately four to five days and involves spending
approximately Rs. 1, 00,000-1, 20,000. The risk of inadequate catch is completely carried by the
skipper i.e. owner of the vessel in case of mechanized sector. The inputs required on the boat
include diesel (approximately 1,500-1,800 litres), ice (8-10 tons), helpers (7-12 on average),
assistant fishermen aboard the boat and food. Mechanized boats, gill nets, and catamarans mostly
land their catches in the morning after returning from the sea. The morning market at landing
centers functions from 6.00 a.m. to 12.00 noon. About 500 to 800 people are involved in different
marketing events. In an effective supply system for enterprises, intermediaries frequently
undertake a main role among suppliers. For instance, in Andhra Pradesh middlemen can be
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Ramarao Mopidevi et al./ International Journal of Management Research & Review
classified into four groups: auctioneers, retailers, wholesalers and vendors. Their activities in
the market consist of: collecting, purchasing, stocking, transporting, standardizing,
promoting, supplying and selling fisheries products. In fish marketing, the general assumption
is that conditions of monopsony and oligopsony characterize the fish marketing structure in
india at the various stages and hence fishermen do not get benefits of the high price common in
the consumers market, reason for the above is primary fish markets are experienced by
different problem.
Problems of marine fish markets at landing centers
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High perishable nature of fish.
Great variation between demand and supply
Too many varieties of spices
Assembling of fish from too many coastal landing centres.
Uncertainties in fish production.
Wide spatial and temporal variations in market arrival and prices.
Difficulty in managing and maintaining quality of fish.
Lack of proper infrastructural facilities for storage, process and transportation.
Lack of information on fish price and production.
One of the major objectives of fisheries development in the country was to ensure
remunerative prices for the producers on the one hand and access to fish supply a t reasonable
prices to the consumers on the other. Despite five decades of progress, the reality is that
producers have not been able to realize reasonable prices for their products and consumers
have not been able to get fish at remunerative prices.
Various research studies on fish marketing have exhibited that the variations between
consumer's price and producer's price generally remained very wide. The usual explanation
advanced is that structural characteristics, which create market imperfections, perpetuate
high market margins. Market margin is usually considered as an indicator of marketing
efficiency. In the absence of any value added process, higher the value of marketing margin,
the lower the efficiency of the marketing system and vice-versa. While assessing the market
margins in the context of fish trading such aspects as the perishable nature of fish,
seasonability in fish landings and distance between the fish producer and consumer should be
given due consideration.
Activities of middlemen
Auctioneer: the auctioneer is the first middlemen in marine fish marketing channel in Andhra
Pradesh. The fishermen bring their catch to auctioneer, who auctions the fish to various traders
at landing centre. The auctioneer sometimes advances money to the fishermen and in turn gets
the right to auction their fish. Auctioneer charge 5-10 per cent of sales value as his commission
from the fishermen. There is a virtual hurdle to the entry into this profession, which is mainly
inherited by the local fishermen community or associations across all the coastal states in the
country.
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Ramarao Mopidevi et al./ International Journal of Management Research & Review
Retailer: The retailers directly sell fish directly to consumers. They have the assessment of
local demand and drawback of their purchasing power. Maximum value addition to fish
happens with the retailer. The retailer sort, clean, ice, pack, display and dress fish for the
consumers. Retailers mainly buy fish from the wholesalers, but in several cases, group of
retailers have been found participating in the auction process for buying fish directly from the
auctioneer. Retailer keeps a marketing margin of about 50 per cent, though the figure shows a
lot of difference across the nation.
Vendors: vendors being mobile, sell fish directly at the consumer’s door step. Most fish
vendors are women. Vendors also carry out value addition by sorting, grading, cleaning and
icing fish. They take active part in auctioning directly in some times. They are forced to sell all
the produce on a given day, as they don’t have the capacity to hold or store the fish. The major
costs to vendors are on ice and transportation.
Wholesalers: the wholesalers buy fish in large quantity from auctioneers and transport to
exporters. Some value additions are carried out by the wholesalers in terms of sorting, grading,
cleaning, icing and packing fish before transporting. Exact guidance on the marketing margin
of wholesalers is not available but it has been found that cost structure is highly profit
intensive. They normally know the demand of species outside markets and are aware of
average trend of daily fish catches at landing centres. The wholesaler assumes the challengesof
selling the fish and therefore keeps a higher margin as compared to auctioneers. Ice and
transportation from the largest share of the wholesaler’s cost.
The wholesaler has trucks to transport products to his facility where they are cleaned and graded
in three to four grades based on size, quality and defects. Suppliers often deal with single types
of fish, unlike commission agents who deal with the complete catch of the fishermen.
Wholesalers have small depots alongside docks or harbors where products are sorted and cleaned.
Severe infringement of labor and human rights are noticed at the supplier's facilities, especially
child labor and extremely poor working facilities. Sanitation is very weak, drains are uncovered
and effluent is discharged without treatment. Solid wastes such as small fins and insoluble
effluents are discharged into open drains lack of proper drainage system. Bigger solid waste
such as spoiled fish and broken organs are dumped in open garbage cans in the vicinity,
creating a foul smell in the surroundings. This phenomenon exists even though garbage is
cleaned twice-a-day by the municipal authorities. The prices move decline from the exporter to
the supplier, to the agent and then to the fisherman on a daily basis. The level of transparency is
very low between each of these groups. Even suppliers are unaware of the selling price of
exporters. Nevertheless, exporters receive prices from their customers in importing countries.
Employees in export units are well trained and wear gloves and face masks. The hygiene facilities
are well established. Staff has access to clean toilets, wear clean uniforms and have a comfortable
work environment. Most importers and buyer representatives visit export facilities on a regular
basis, especially when the importer is planning a long-term purchasing contract. Exporters are
particularly keen about the handling techniques at the bottom of the chain, i.e., at the fishermen's
level. Hygiene and food safety infrastructure at the docks is inadequate. Wastage and the cost of
compliance will be substantially declined with adequate training of fishermen and a
minimum infrastructure at the beginning of the chain.
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Ramarao Mopidevi et al./ International Journal of Management Research & Review
Pricing: the growth of fish production and development of fishery sector is highly based on an
efficient fish marketing network which includes fixing of proper price to fish. Further the
survival and sustenance of different harvesting methods of capture fisheries solely depends on
their profitability which is interlinked with the market demand and price of different varieties of
fish.
Pricing objective: Harvesting and marketing of fish provides adequate employment
opportunities. The post harvest operations of fish, provides more employment to labour than the
production sector. Enormous numbers of intermediaries are involved before fish reaches the
hands of ultimate consumer. An efficient price policy of fish or any other commodity aims at to
ensure the services of intermediaries at minimum cost. In other words, the pricing efficiency is
concerned with facilitating the activities of buying, selling and other connected aspects of
marketing process so that it will remain responsive to consumer behavior. Further, modern fish
marketing policy should estimate not only meeting the existing demand for fish but also
capturing the potential demand.
Method of Price fixing: Price of fish is fixed by the trade associations but price of fish
affected by two main factors- the price at which the wholesaler buy their fish and the amount
of profit they intend to gain and it is fixed through supply and demand interaction. Generally,
in proportion to other commodities, fish price have been developing at a quicker rate.
According to the species and size of fish, price of fish become varies with season of the year
and freshness of the fish. The price of fish differs in an irregular pattern and more widely
than other agricultural commodities. In this market, the main traders are wholesalers. The
price of fish is usually set through open auction by the auctioneer and wholesalers.
According to rules of auction system, the price for an allotment of fish is settled securely
through open, competitive auction. The highest bidder then receives the delivery of the fish
in exchange of payment to the seller. Generally the payment is made in full and in cash.
This bidding method is conducted through an auctioneer. Auctioneer usually charges about
2-3% of the sale price from wholesalers and also sometimes retains a small quantity of fish
as commission. The price is also fixed by direct bargaining between seller and expected
purchasers. The sellers try to obtain a price that is generally higher than his least attainable
selling price. The potential buyer begins with a price which is cheaper than that of their
minimum buying capability. Through several rounds of adjustments, the price is reached at a
satisfactory destination to both the sections.
CONCLUSIONS
After studying effects of commercial operation conducted by middlemen in the raw material
market of fisheries processing industry, an obvious reality was put forward: due to
inadequate infrastructure, intermediaries have to identify an optimal management policy.
Conversely, the limited number of fisheries wholesalers (leading to monopoly), activities
related to their price fixing will stimulate illegal agreements, as well as violate regulations
founding competition mechanism of market. Finally, it is suggested that with the growth of
fisheries industry, a new pattern has been developing in the commercial chain (Alam, 2000).
This mode may considerably change concepts on material zone, initial material assembling
place in the market, intermediary market, consuming place and retail market.
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Ramarao Mopidevi et al./ International Journal of Management Research & Review
Fish marketing in India is gradually transforming from primitive to modern stage. The
involvement of a number of middlemen in the marketing chain adversely affecting the interests
of both fishermen and consumers. The basic essentials are not present in many of the markets to
carry out the marketing activities properly. No proper grading or weighing is done for fresh fish
and there is no proper sheds for auctioning or facilities for preservation at the marketing centres.
Inefficient collection and distribution of fish results in concomitance of surplus and deficit in the
internal marketing system. Improper marketing infrastructure is another reason for low returns
to fishermen. It is not possible to provide the ice plants or cooling plants for each and every
fishing village. Hence the government can provide these facilities for cluster of closely located
fishing villages, through fishermen co-operatives. After successful demonstration, these units
can be handed over to the local fishermen on equity involvement.
At the national or policy level, an important role of government should be played to
improve marketing by the means of proper price policies, training and extension works
in marketing and management of concerned market research. Strengthening the
bargaining power of the farmers/Fishers by providing with the actual information about
the present market status, pricing policy, credit facilities and above all, the formation of
association is a right supervision. Specific declarations which are required to improve
marketing system are as follows:
• Establishment of more ice-plants, cold-storage and preservation facilities,
• Introduction of insulated and refrigerated fish vans and fish carriers to maintain coldchain during transportation,
• Improvement of existing fish market structure,
• Improvement of fish transport, handling facilities,
• Establishment of modern wholesaling facilities.
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