Supply chain analysis of marine fish marketing system in Kerala

Abstract

Fisheries is a major allied sector of agriculture contributing about 0.8 per cent to the Gross Domestic Product (GDP) and 5.15 per cent to agricultural GDP in India. Marine fisheries supports around 10 million people providing livelihood and employment directly or indirectly. Fish also provides more than one billion people living below the poverty line with most of their daily animal protein requirement globally. Kerala is a state known for its fish consumption which is more than four times the national average. However, the marine domestic fish marketing system faces several challenges in the process of distributing fish from the producer to the consumer. The study was conducted in Kerala state, which is the fourth largest fish producer in the country, and covered coastal and land locked (non-coastal) regions. The objectives of the study were to identify the supply chain of selected fish species, to assess the structure and performance of domestic fish markets, to examine the market integration and price transmission among the markets and to assess the consumer perception and suggest policy guidelines for improved fish marketing in Kerala. Two coastal districts viz., Ernakulam (E) and Kollam (K) and two land locked districts, Idukki (I) and Pathanamthitta (P) were selected and data was collected using simple random sampling from various marketing functionaries (producers, wholesalers, retailers and consumers). Since the species composition of marine fish landings is varied, the study focused on four high value (seer fish, shrimp, pomfret and tuna) and four low value but commonly consumed fish species (sardine, mackerel, anchovies, threadfin bream). Supply chain of the selected fish species was identified using the framework of Feller et al, 2006. Market performance of producers, wholesalers and retailers were assessed using Data Envelopment Analysis. The co-integration test was used to analyses the market integration of selected market pairs. Conjoint analysis was used to determine the attributes responsible for their fish purchasing behaviour. The constraints faced by the market functionaries were ranked using Rank Based Quotient. The generic supply chain of fish identified involved the auctioneer, wholesaler, retailers, secondary retailers, between the producer and the consumer. This is almost similar to the supply chain of other perishable like fruits, vegetables and flowers. The supply chain for sardine, tuna and thread fin bream also involved extra nodes in their supply chain due to industry specific demands like feed and other specialized products. The market structure of domestic fish markets was not efficient. The main reason being lack of infrastructure such as cold storage, well planned display and assemblage platforms, potable water and weighing balance. Market performance of producers was measured at the five landing centres in Ernakulam and Kollam and it was observed that only one market was efficient in each of the districts. It was revealed that the nature of inefficiency was due to scale rather than technology. In both Ernakulam and Kollam, only one wholesale market each was efficient and all other markets showed high technical efficiency i.e., above 0.80. In both wholesale and retail markets, the technical efficiency was relatively low in Idukki and Pathanamthitta with it being least in Idukki. It was revealed that the markets in the coastal regions showed relatively high technical efficiency than the land locked regions because of the higher volumes handled in the markets due to proximity with the landing centres, viz, the primary production centres, which is not so easily accessible to the land locked districts. Among wholesale markets, one market pair in Ernakulam, one in Idukki and one in Pathanamthitta showed co-integration and among retail one each in Ernkulam and Pathanamthitta showed co-integration. This indicates that in these markets there is a possibility of long run equilibrium in prices. The existence of low short run market integration (SRMI) at both wholesale as well as retail market levels was observed among the co-integrated market pairs. Consumer preference was for fresh fish in all the four districts studied in cleaned and cut form from retailers, wholesalers or wholesaler-cum-retailer. Sardine was the most preferred species in both coastal and landlocked regions of Kerala with more than 75 and 72 per cent of respondents, respectively, consuming it daily. The relative importance of attributes that consumer in Ernakulam and Kollam looked at while purchasing fish was fish species in fresh form and income. In Idukki and Pathanamthitta, availability and income were the relatively important attributes. Based on the pooled response of market functionaries in the selected districts the domination of middlemen was the major constraint for producers, wholesalers and retailers. Safety and quality of fish was the major constraint of consumers. The studies on efficiency of fish supply chain in line with the changing consumer preference are the future line of work towards sustainable fisheries development.