SAFE: ‘Standards and Agro-food Exports’ research and capacity building programme (www.diis.dk/SAFE)
SAFE POLICY BRIEF No. 2
Effects of Food Safety Standards on the Livelihoods
of Actors in the Nile Perch Value Chain1
Reuben M.J. Kadigi, Ntengua S.Y. Mdoe, Ephraim Senkondo and Zena Mpenda
Sokoine University of Agriculture, Tanzania
January 2008
1. Introduction
weaknesses and rising compliance costs could
contribute to the further marginalization of weaker
economic players, including poor countries, small
businesses and artisanal fishers and boat owners.
Over the past two decades, the share of traditional
tropical products in developing countries’ exports has
been declining, while that of non-traditional products
has increased. Within the non-traditional product group
for Tanzania, export of Nile perch from Lake Victoria
has increased the most. This shift presents new
possibilities for developing countries to increase export
revenues from non-traditional food trade. Yet, it also
poses new challenges upon these countries to comply
with prevailing food-safety standards in international
markets.
The specific food-safety requirements and associated
conformity-assessment procedures in importing
countries are generically diverse, but there are also a
number of common elements to the food-safety control
systems applied in industrialized countries. Efforts to
comply with food-safety requirements in one market
(for example, the EU) are therefore likely to go a long
way in meeting the requirements of another (the US or
Australia).2
Past
experiences
with
Bovine
Spongiform
Encephalopathy (BSE), Foot and Mouth Disease (FMD)
and most recently, Avian Influenza, together with
discussions of genetically modified foods and antibiotic
use, have increased consumers’ awareness of possible
threats through food consumption. Consequently,
governments in industrialized countries have laid down
stringent food-safety standards to safeguard consumers.
In general, compliance to food-safety standards in the
Nile perch value chain has profound effects on the
livelihoods of the actors in chain.3 It involves costs and
benefits, but empirical analyses of these effects are
relatively few and largely qualitative. Little is known
about their magnitude and distributional impacts.
Nevertheless, there have also emerged some
misconceptions on the Nile perch export trade,
particularly among people in importing countries. These
have been fueled by misrepresented ideas in articles and
documentary films (e.g. ‘Darwin’s Nightmare’ by
Hubert Sauper).4 Such claims are however increasingly
receiving criticisms from scholars and research-based
evidence and/or articles, some arguing that ‘not
catching and exporting Nile perch would likely mean
more households without income who would add to the
count of the food deficient population.’ 5
In 1991, the EU laid down requirements for the
hygienic handling of fresh and processed fishery
products during production, storage and transport.
Exporting countries were given the responsibility for
ensuring compliance. Compliance had to take place at
two levels, national and firm. At the national level,
governments were expected to set up authorities to
oversee and manage inspections, designate testing
facilities, upgrade infrastructure and introduce proper
handling throughout the “value chain”. Individual
processing plants were to be certified only if they met
the requirements, which included proper layout,
improved processes and application of Hazard Analysis
and Critical Control Point (HACCP). HACCP involves
identification of hazards, setting up of control system
and product testing.
This policy brief is based on the results of a study
conducted in Mwanza and Mara regions from early July
to early August 2006. The study aimed at analysing and
providing insights into the effects of the Nile perch
export trade on the livelihoods of the actors in the
fishery (Nile perch) value chain. More specifically, the
study was intended to enrich the ongoing debate on the
effects of food-safety standards on the livelihoods of
players in the fishery value chain.
The proliferation and enhanced stringency of foodsafety standards are generally a growing concern among
many developing countries and those promoting their
increased integration into the world trading system.
There is also a concern that many developing countries
lack the administrative, technical and scientific
capacities to comply with the emerging food-safety
requirements. The combined effects of institutional
2. What are the costs and benefits of compliance?
The empirical evidence from the study suggests that
compliance with food-safety standards in the Nile perch
1
SAFE: ‘Standards and Agro-food Exports’ research and capacity building programme (www.diis.dk/SAFE)
value chain is expensive but also beneficial. While
generally incurring higher operating costs, the actors in
the Nile perch export value chain (which is compliant
with EU food safety standards) have earned higher
gross revenues and net profits than their counterpart
actors in other fishery value chains.6
Table 1
summarises the gross revenues obtained, costs incurred
and net profits obtained by fishers and boat owners in
the Nile perch value chain and the other fishery value
chains in 2006.
portfolios of land resource base they own than the latter
actors.
However, the analysis of livestock holdings and other
livelihood assets showed mixed results. The mean
difference in livestock holdings between boat-owners in
the two scenarios was insignificant, but that of fishers
and crews was significant. This implies that livestock
ownership, although important, could not feature as the
main factor determining the differences in asset
portfolios between boat-owners in the Nile perch export
value chain and other fishery value chains. The values
of other assets owned (e.g. furniture, farm equipments,
car/motorbike, bicycles, radios, television sets and
cooking utensils) by both fishers and boat-owners in the
Nile perch export value chain are higher than the values
of assets owned by their counterparts in other fishery
value chains. Nevertheless the mean differences for the
values of these assets were insignificant.
Table 1: Average costs, revenues and profits obtained
by fishers and boat owners per actor per week in 2006.
Actor
Gross
Operating
Net Profits
category
revenue
costs
(TShs.)
(TShs)
(TShs.)
Nile perch value chain:
Fishers
97,245
58,473
38,772
Boat owners
295,390
173,161
122,229
Other fishery value chains:
Fishers
53,317
32,185
22,068
Boat owners
147,958
89,720
58,238
Extra costs, revenues and net profits obtained by
actors in the Nile perch value chain above those
obtained by counterparts in other fishery value
chains:
Fishers
43,928
26,288
16,704
Boat owners
147,432
83,441
63,991
4. Who benefits in the Nile perch export value
chain?
The Nile perch export value chain in Tanzania provides
benefits to a myriad of actors, including poor fishers
and crews. Aside from fishermen/crews and boatowners, the chain directly and indirectly supports the
livelihoods of specialized industrial and artisanal fishprocessors (and their employees), traders and
employees of other jobs created by fisheries (e.g., cooks
and porters in the fishing camps). Other populations
supported by the value chain include boat-builders, gear
artisans (e.g. net-menders), transporters and other
people who offer support services (e.g. owners of
kiosks, eating places, bars, tailors’ premises and video
halls). The Nile perch value chain supports actors in
other fisheries chains as well through, for example, the
processing and resale of Nile perch rejects and factory
remains.
As can be seen from Table 1, fishers in the Nile perch
export value chain have accrued extra net profits of
about Tshs 16,704 per actor per week above those
accrued by fishers in the other fishery value chains.
Despite higher extra costs, extra net profits obtained by
boat owners in the Nile perch export value chain were
much higher than those obtained by fishers. They
obtained net profits of about Tshs. 63,991 per actor per
week above those accrued by boat-owners in the other
fishery value chains. The higher net profits for actors in
the Nile perch export value chain can largely be
attributed to the effects of compliance with food-safety
standards that has enabled them to obtain better prices.
5. Food safety versus sustainability
From the results of the survey, it was learned that
overall fishing assets and gears, and in particular those
targeting Nile perch (e.g. gill nets of 5” mesh size and
above; long line hooks), have increased considerably in
the past five years. For the Tanzanian side of Lake
Victoria, the number of outboard engines has increased
from 5,576 in 2004 to 6,416 in 2006. The number of
crafts using paddles has also increased significantly.
There has generally been some improvement in terms of
the facilities that are available at the landing sites when
compared to the situation before 2004, at least for
selected Nile perch landing sites. At some of these sites,
loading platforms or jetties and fish-weighing stalls
have been installed; bandas or sheds have been
constructed and provided with electricity supplies, craft
repair facilities, fish stores, potable water and toilet
facilities, as well as fences and posters bearing words
that sensitize people to the sustainable utilization of
fishery resources.
3. Livelihood Asset portfolios of actors in the fishery
industry of Lake Victoria
The analysis of livelihood assets also showed higher
portfolios of fishing assets for actors in the Nile perch
export value chain (which is compliant with EU food
safety standards) than those in the other fishery value
chains (which are not compliant with EU food safety
standards). The mean values of land-holdings were
higher for fishers and boat-owners in the Nile perch
export value chain than in the other fishery value
chains. On average, the actors in the Nile perch value
chain owned relatively larger land holdings than their
counterpart actors in other fishery value chains,
averaging 2.4 versus 1.7 ha and 3.5 versus 2.8 ha for
land owned by fishers/crews and boat-owners in the
Nile perch and other fishery chains respectively. This
implies that the former are in a relatively better position
to build up their fishing assets using the larger
2
SAFE: ‘Standards and Agro-food Exports’ research and capacity building programme (www.diis.dk/SAFE)
The increasing use of fishing gears, increasing number
of fishers as well as the general dynamics of the Lake
Victoria ecosystem have raised many concerns,
particularly concerning sustainability. Continued heavy
exploitation of Nile perch is seen as a threat to
sustainability. The Maximum Sustainable Yield (MSY)
for the lake is estimated to range between 200,000 and
290,000 Tonnes. The current catch of Nile perch is put
at 235,000 Tonnes which falls within the range of MSY.
But no matter precisely where the MSY is, the industry
is seen as rapidly approaching its “tipping point” with
respect to the Nile perch resource base on which it
heavily depends. It is therefore important to address
issues of sustainability of fishery resources together
with efforts to comply with food safety standards. Food
safety compliance would be useless if there is no fish
left for export. The exclusive focus on food safety of the
last decade should be re-weighed and more effort
towards sustainability should be carried out.
6. Conclusions and policy implications
The study reported in this policy brief was based on a
comparison of costs and benefits obtained by actors
along the Nile perch export value chain (which is
compliant with EU food safety standards) with costs
and benefits obtained by actors along other fishery
value chains (which are not compliant). The results of
this comparison suggest that the benefits of compliance
outweigh the costs and that the benefits of compliance
are distributed to a wide range of actors along the value
chain, including the poor.
It is therefore worth supporting the continuation of
efforts to maintain compliance with EU food safety
standards in the Nile perch value chain, while at the
same time ensuring that sustainability measures are put
in place to preserve the resource from over-exploitation.
Policy implications
1.
The research upon which this policy brief is based on suggests positive impacts on livelihoods of fishery
actors from maintaining food safety standards in the Nile perch export chain
2.
Non-compliance with food-safety standards may lead to a sudden loss of export markets for Nile perch, which
in turn may also cause significant impacts on the livelihoods of actors in the chain, as well as employees of
other jobs created in the Nile perch value chain.
3.
In order to maintain compliance with EU food safety standards, the following is needed:
• need to increase the number of landing sites that are ‘approved’ for handling fish for export
• need to fully integrate Beach Management Units (BMUs) in the assurance of food safety and hygienic
handling of fish at the landing sites—regulation and external monitoring are not sufficient
• need to provide support to the industry to meet private food safety and quality management standards,
such as ISO 22000, the British Retailer Consortium (BRC) Global Food standard, which are
increasingly demanded by retailers in Europe
4.
At the same time, efforts should be undertaken to ensure the long-term sustainability of the resource, so that
negative impacts on livelihoods are avoided. This includes:
• Ensure more effective and coherent planning of the fishery resources in the country in order to
safeguard the future of the sector
• Ensure enforcement of the regulatory and monitoring mechanisms, also through BMUs
• Strengthen the ongoing collaboration among the riparian states of Lake Victoria via joint regulatory
and monitoring efforts under the Lake Victoria Fisheries Organization
• Evaluate whether complying with the Marine Stewardship Council (MSC) certification is appropriate,
feasible and has a positive outlook both in terms of sustainability and of market access
5.
In terms of policy:
• the fisheries policy of 1997 and its amendment of 2003 contains strategies geared towards improving
the quality of fishery products and their market access, but they have been implemented only partially
• since the Lake Victoria fisheries contribute to reduction of poverty to wider range of stakeholders and
geographical coverage, the government should plough back some of the tax revenue collected from
fish trade to ensure hygiene and food safety by improving infrastructure and fish handling facilities at
the landing sites.
6.
As for public perceptions both in Tanzania and in the EU
• coherent efforts should be undertaken by the riparian countries to repair the reputational damage
incurred by mis-representations of the fishery industry carried out in popular media in Europe
3
Reuben M.J Kadigi is a Lecturer – Department of
Agricultural Economics and Agribusiness, Sokoine
University of Agriculture, Morogoro/Tanzania
([email protected]).
Ntengua S.Y. Mdoe is a Professor – Department of
Agricultural Economics and Agribusiness, Sokoine
University of Agriculture, Morogoro/Tanzania
([email protected]).
Ephraim E. Senkondo is an Associate Professor –
Department of Agricultural Economics and
Agribusiness, Sokoine University of Agriculture,
Morogoro/Tanzania ([email protected]).
Zena Mpenda is a PhD student – Department of
Agricultural Economics and Agribusiness, Sokoine
University of Agriculture, Morogoro/Tanzania
([email protected]).
SAFE Policy Briefs are generated in relation to the
research and capacity building programme ‘Standards
and Agro-Food Exports: Identifying Challenges and
Outcomes for Developing Countries’ (SAFE). The
project, running from 2005 to 2010, is funded by the
Danish Development Research Council and is carried
out jointly by the Danish Institute for International
Studies (DIIS) and the Department of Agricultural
Economics and Agri-business at Sokoine University,
Tanzania. The policy briefs are available at:
www.diis.dk/SAFE
Notes:
1
This Policy Brief is based on the results of the
research” Standards and Agro Food Exports: Fish sub
project”
2
Examples include the required implementation of
HACCP (or an equivalent system of food-safety
control) and inspection of processing facilities by a
third party (whether government or a private
certification agency) as a means of assessing
compliance.
3
Non-compliance with food safety standards may be
associated with lost export opportunities, as happened
in the case of the Nile perch exports to the EU from the
riparian states of Lake Victoria in the period 1998–
1999. This may have significant negative impacts at
both the macro and micro levels. At the macro level, a
decline in Nile perch exports may lead to falls in
foreign exchange and government revenues. At the
micro level, the decline in export demand may lead to a
reduction in landed price to fishermen and boat-owners,
as well as a fall in income for the actors in the
beginning and intermediate stages of the fish export
value chain, including local fishing communities and
other people who depend on Nile perch for their
livelihoods. In general, developing countries can incur
significant “costs of compliance” whenever changes are
made to international standards or to those of their
trading partners, which in turn can result in diminishing
competitiveness.
4
Darwin’s Nightmare’ is a documentary film about the
Nile perch fishing industry around Lake Victoria in
Tanzania directed by Hubert Sauper; 2004,
France/Austria/Belgium.
5
In “Darwin’s Nightmare’: A critical assessment”
(Review of African Political Economy, No. 112, 2007),
Molony, Richey and Ponte discuss a number of
misrepresentations that the documentary carries out.
6
Actors in other fishery value chains include
fishers/crews, boat owners, shore bound small-scale
processors (Machinga), local traders, shore-bound
artisanal processors, traders/exporters of artisanal
processed fish (kayabo), home based artisanal fish
processors and mabondo collectors who are not
compliant with the EU safety standards.