David’s Sustainability VS Goliath’s Economies of Scale

These days, the press across the various mediums highlight the importance of sustainability and fishing for the future. Through this and other public awareness programs broadcast by organisations such as Green Peace, WWF and ISSF, the general public is being awakened to an interesting and complex industry that is - commercial tuna fishing. Whilst the likes of first world country consumers are already well aware and preferential to more sustainable practices, there is an ever lagging effect filtering down to the 3^rd world nations. In the UK for example, the various retailers shelves are well stocked with various produce sourced from sustainable fishing methods. However, here we don't see this and this is due to consumer awareness and price. Here it’s purely about economies of scale and price for food security and ultimately survival. We don’t have the luxury of affording pole and line caught tuna in Checkers and Pick n Pay just yet. The fact of the matter is that we are already mumbling about the Saldanha brand (a product range that was developed and initially imported on behalf of Saldanha by ourselves) costing around R18 per can for the flavor variants and R15 for the oil and brine variations. The simple matter is the South African Rand hardly ever fares well for imports such as canned tuna, which price will fluctuate like the proverbial tide in parallel with the exchange rate. We’re talking U.S. Dollars to South African Rands here which until recently slumped lowest since the year 2008. This is the main factor combined with the price of raw materials in Thailand. Bangkok sets the skipjack price which recently is at an all time low. However the rand weakening didn’t allow the importers to take advantage of the low skipjack price which is being traded around $1300/mt CFR Bangkok (cost and freight delivered to Bangkok main port). As a result the can on your shelf has been able to withstand this variable but only to a certain degree. Depending on when the retailers will place their orders for more stock, we can expect the price of canned to possibly increase should they look to preserve their margins as the skipjack price is bound to recover to higher levels.

Now let’s discuss pole and line…I’m not sure who would prefer to pay an estimated R25-R30/can of pole and line caught skipjack tuna…the general public apart from Woolworths wealthy can afford this and such… its easier for the more well off patrons to ease their conscious by insisting on sustainability from a pole and line caught degree and sleep well at night. There is sort of a price barrier in third world countries for sustainable fishing practices being canned for these nation’s shelves. The poor rely upon the canned tuna as a relatively cheap accessible source of healthy protein. In South Africa its more blikkie chilli vis that's been sold than canned tuna. In fact last week retailers in Argentina started securing cans of tuna with anti theft alarms as theft of canned tuna is literally out of control like their ailing economy. Imagine an anti theft clothing alarm tag usually reserved for garments now stuck to your can of No Name Brand shredded tuna? It’s literally happening around the world as we speak. Now there are cheaper variations (shredded tuna) finding a their way to the bottom of the shelves but at a more reasonable price? The fact of the matter is that the retailers have developed a cheaper product derived from the by product of tuna loin production. These shreds or flakes are then canned with vegetable broth/ additives which proteins bind the pieces together during the heat generated by the retorting process. (If I understand this correctly) So we end up with a far inferior end product but at more affordable prices.

This graph below was taken from the 2013 4th European Tuna Conference which was held in Brussels and illustrates the volumes imported by the EU and USA of canned tuna. This should give you an idea on the shear volumes that is produced globally for these two markets.

This is where the Goliaths of the fishing industry find their way into the market and respective arguments. Without the purse seining fleet operating, we wouldn't be able to catch enough of this resource to meet the global demand for an affordable canned protein. With a shelf life between 1-2 years, depending on the brand, which doesn't need refrigeration. In Africa canned chicken, tuna and other products are on the rise as this continents largest imports due to the lack of infrastructure and refrigeration. The problem with purse seining is the environmental impact it has on the species which it is targeting as well as the by catch. With the use of FAD's more by catch, sharks, sea turtles other marine life is being directly impacted. I will go into this in a future blog entry.

However, it is the most affordable method to catch large volumes and thus their economies of scale far out weighs that of the pole and line method. As a profitable company, purse seining makes perfect sense. However, one hook one fish such as poling is the most scientifically sustainable method for wild caught tuna. How to find a balance is the predicament we find ourselves in today. Whilst the operational expenses per metric ton of purse seining is drastically less than that of pole and line with their respective carbon foot prints in favor of purse seining?

The Regional Fisheries Management Organisations (RFMO’s) control the tuna in each respective ocean and due to public awareness and pressure brought upon by scientific data, they have had to make drastic measures. Such measures would include but not limited to a  100% closure of some waters within the Pacific, FAD free zones, FAD closure seasons, fleet capacity  and TAC limitations, to name a few. But the industrial wheels of economy and trade keep turning and such we find for instance with regards to the cap on fleet capacity, the larger purse seining companies scrapping their smaller vessels for more ultra modern vessels which hold in excess of 2,200 tons and can maneuver at 18 knots. One would think that they are defeating the purpose by reducing the fleet when all that is being done is the effective fishing efforts being increased exponentially. We are seeing more 2,000 ton plus vessels being built in Spanish shipyards such as the vessel "Gijon" which was launched a short while back. This behemoth will be commissioned for the Mexican tuna fishery with a further 2 more being built. We have now seen some canneries insisting that by the end of 2014, they will only purchase from fishing vessels with fish holds of less than 350 tons. But is this enough?

 Whilst the likes of my company comply with Earth Island Institute and Friend Of The Sea annual audits to ensure sustainability and tractability, it is a mere spoke in the smallest cog that is the industry of tuna fishing. (MSC would have cost too much) Following the international trends, the local retailers have made pledges to only stock MSC certified pole and line caught tuna on their shelves by the end 2015. Where will this be sourced from? One of the only MSC certified skip jack fisheries globally is that of the Parties to the Naru Agreement. They have nicely created a monopoly by forming the marketing company Pacifical to exclusively sell all their MSC certified tuna. And this is a purse seine fishery as well!!! Seems we can't bake our fish cake and eat it just yet. The retailers such as Woolworths are making large strides to encourage sustainability and one should read up on their website about their corporate responsibility in doing so here: Fishing For The Future - Canned Tuna

Unfortunately its not possible to export our local albacore catches in 40ft containers to a cannery half way around the globe in order to be canned then shipped back. (wouldn't like to calculate that carbon foot print) This simply isn't viable, so what about canning it locally? We did just that and in 2011 we concluded an assessment by international experts and found that labor would become this projects biggest headache, partly due to the labor unions and their effect on suitable labor costs. The subsequent cost of production would have been to expensive and it was decided to scrap this project all together. Until then we will have to place our sustainable support on to the retailers and may they continue to make progress for their 2015 deadline.

Take a look at TUNA IN SOUTH AFRICA AND WHAT YOU CAN DO

MK Veterans - Wasting Solution?

If I am correct, DAFF or Public works, have pulled the contract for the cleaning of Hout Bay Harbor. I think it was most likely the possible fact that the account fell way into arrears and subsequently closed by the operators. (I stand to be corrected of course) Regardless, the harbor's waste and refuse pile up like termite mounds dotting the horizon on the African plane...As a tourist attraction this is completely unacceptable?

The various vessel owners supposedly pay their annual berthing fees and harbor usage fees to the Department and in return are entitled access to prepaid electricity (when the cables aren't stolen), water (when the pipes aren't stolen) and refuse removal (when its collected). So the harbor users pay levies that is being happily collected and therefore should in theory allow for such a budget to adequately clean the harbor?

Engine & gearbox oil littering and polluting the quayside. This oil spill made its way into the water (swimming pool). 

The water pollution in the harbor itself is completely unacceptable with flotsam accumulating in various nooks and crannies of the Hout Bay Height's (Hangberg Community) swimming pool. Whatever happened to that old bullet who used to motor around in his small modified " Blue Bottle" scooping up and doing away with the pollution in the water? He did it out of his own generosity  and therefore money well spent from the Department's perspective!

So instead of pointing fingers at various capable departments, I propose a solution that is standing right in front of our very noses all this time! Since a few months back, Desmond Stephens in his infinite wisdom appointed his comrades the Umkhonto we Sizwe as the security/ enforcing detail to prevent vessels from fishing without their respective permits. They vigilantly patrol the area from inside their inspectors office only to surface when the hake long liners offload and like rats they come scurrying alongside asking for that three-lettered-swear-word-to-all-vessel-owners: "FRY." I wonder how much they get paid? Surely we could bolster their pay checks with the added responsibility of cleaning the toilets (the same toilets where the swimming pool is) and collecting the accumulated refuse at the various dustbins littered around the harbor?

Surely they can use their spear to poke and prod all the litter up? After all, this harbor is or was probably the most scenic and picturesque in the western cape.

Dear Editor...

I am publicizing a letter for those of particular interest who were involved with the FRAP 2013 process. This letter was written by an anonymous source and thus wasn't legible for printing by the news papers. Anyways, I thought that it has some valid points and worth a read...

Dear Editor,

I have a feeling that if I wrote this letter in my personal or professional capacity within this industry, I would open myself to some risk and perhaps even be singled out and discriminated upon in the future, so I will write it as an anonymous “right holder” of some 10 years.

With regard to all the press coverage of the FRAP 2013, I feel there is a lot unsaid.

First of all there are some very misleading facts going around, mostly from the mouth of Mr Stevens, that need to be clarified.

Of the 8 sectors issues rights on 31 December, ONLY 1 was issued exemptions for those unsuccessful rights holder applicants to continue to fish - the Linefish Sector. With particular regard to the Tuna Pole and Squid sector, many vessels are tied up while the costs keep building. For the Desmond Stevens to claim that he has relieved pressure from all of those deserving, is but one of his many dis truths over the past few weeks.   

In an interview on Carte Blanche a few weeks back, the DG also claimed that 7 out of 8 sectors had been in contact with the department and were pleased with the outcomes and process of the FRAP 2013. Let me assure you, this is blatantly untrue. Numerous letters written by numerous sectors were unanswered, and remain such, and for Desmond Stevens to claim that Derek Watts had been speaking to “the wrong people” was just another way of his shirking all his responsibilities.

As a participating right holder throughout the process and also the years building up to the process, I would also  like to express concern in the differences of definitions by the Department and Industry over the loosely defined word “industry consultation.” Yes we did sit in numerous meetings, yes we did come to many agreements and yes, a correct process and time frame was discussed and agreed upon. However, at the end of this all, the Department did exactly the opposite of what they promised, penalized entrants for the very things they had encouraged and committed to awarding points for, and never for one minute looked as though they would make a single deadline, which they didn’t. The minister herself committed to the process, including the appeals, being wrapped up well before the 2013 rights expired. Industries definition of this timeline was around November. The departments was midnight on 31 December. The effect - every vessel involved in these 8 sectors had to be docked at midnight on December 31, 2013.  I would like to understand  who benefited from this? The crews, skippers, factories and vessels certainly didn’t. I fail to see how the country benefited in so far as foreign export, trade and revenue goes. How did the department come to this decision? And why did they promise in a press release on December 30,  2103 that they would make sure no vessel was forced back to port at their account?

In all the campaigning done by Mr Stevens, he has assured the people of this country that “Paper quotas” are a thing of the past, that rights will be awarded to the genuine fisherman, that the rich white fisherman are an extinct crowd. At the end of it all, he issues rights to some companies whose members/shareholders have never seen the sea, don’t know which side of a boat is the front and think fish grow in cans. These very people, who he claims to be empowering, are forced to “work together” as he puts it , “right holders without boats must team up with non right holders with boats and make arrangements”. People who have been creating jobs , providing food stability , providing benefits for their crews and ensuring the crews have safe work places ,for 10-25 years in some cases,  are suddenly forced to “team up” with new entrants.  Is this not creating paper quotas?  

To contradict himself even more, numerous applications have been made to the department by associations and individuals to ask how people can get hold of boat owners in the case of successful applicants without boats , as well as requests  by boat owners to get names of successful applicants in order to make these “team work” arrangements. The department will not release the list as it claims it is confidential information. And in the meantime-the fisherman suffer.

Then there is the way which Mr Stevens  interprets the sectors and the way things work in practise and the allegations by Mr Stevens that the crews pay for fuel and levies. These are absolutely untrue and even offensive. If Mr Stevens is so disinterested in finding out the way the sectors actually function, why does he hold the position he does and even more so why is he allowed to communicate to the public? And if he believes that the crew does pay for the fuel, has he taken up the battle with SARS on their behalf to allow fishing operations in the Linefish sector who have petrol engines to be exempt from the Road taxes? Quite the opposite actually, the department has chosen not to support these applications for years already. If he is so worried about the cost of fuel and its implications on the crews surely he is looking to help?

In the most simple of terms, a man without a boat cannot load ten crew on the A4 piece of paper Mr Stevens has issued him and go to sea, and a man in Gauteng with fishing rights is as out of the water as fish would be there. As right holders and participants in this industry, we know what we have to do in order to tow the line with the department. Now it’s time the department started making some commitments to us that they intend keeping and stop hiding from the truth. Your FRAP process was flawed, under prepared and full of holes. You have issued many rights to the correct entities and we salute you for that. But the truth is you have gotten way too many wrong. You have done the previously disadvantaged people in the fishing communities more of a disservice than the so called “rich white” people and the loss of jobs is on you. If you had followed the processes agreed upon between industry and yourselves we would not be in this situation.

The way I see it every person reports to someone else. I hope Mr Stevens superior realises his mistakes and takes responsibility for them because it is clear he won’t.

And one last thought, fisherman have been around a lot longer than the department.. ultimately the department only exists because of the fisherman, not the other way around

Life Goes On...One Way Or Another?

Lately I have been inundated with comrades calling me as if they have struck that rich vein of gold at the end of the rainbow tuna tail. With excitement in their voices their tone exudes arrogance but yet I can’t help and feel sorry for them. Like most whose dreams didn't materialize of striking it rich in the 1848 California gold rush, they too were lured somehow with promises of wealth and success. So my comrades with glee in their eyes excitedly explain that they can catch tuna. “Wow I reply that’s incredible! And how do you intend catching it all the way from Soweto?” So here is where the whole “paper quota holder” comes into the picture. These comrades have been granted tuna pole rights but with no vessel, no investment within the industry and more importantly, no knowledge of this game what so ever. Once I have corrected them in saying that entire fleet already have rights activated and that their license fee is absurd, their tone changes very quickly. “But you don’t understand.” they reply… upon which I simply give up and explain that they are too late and have literally missed the boat as all have rights activated already, all be it not their own. 

                     

With the whole fleet by now having successfully having paired up with their choms from Soweto, Langa and the likes in order to utilize their paper quotas, the fleet has resumed “normal” fishing operations whilst they await the outcome of their FRAP 2013 appeals.

So Desmond, I wonder how a guy in Soweto is going to effectively utilize and create food security with a 16 man right in a landlocked city? Maybe they can go paddle around the mine dump waste water and look for their "gold"?  Meanwhile, the actual fishermen and their livelihoods and futures are spun out of control by the spin drift that is DAFF.

 On a lighter line, we have to date managed to export in excess of 1500 tons of albacore and with the historical seasonal patterns resuming, we now have been landing excellent quantities of yellow fin. With the latter price currently being higher than the albacore, the vessel owners can enjoy a slightly higher return. We haven’t seen yellow fin in this quantity prior 2009 if I recall correctly. This will bode well for the 45ft slurry vessels (“Tupperware” as they are affectionately referred to by the Portuguese) that will be able to effectively target this species for the sashimi markets which we air freight to destinations such as Japan, USA and Spain, to name a few.

In Namibia we have experienced good albacore catches for the handful of live bait freezer vessels who have managed to land some 250+ tons each for the season so far. Their season will run until the end of April with these same vessels catches exceeding 400 tons each. In the interim, the vessels fishing in SA waters will continue to pursue that illusive water conditions that will allow for good tuna catches. With the fresh yellow fin market being flooded (some 2000 individual yellow fin have been landed since Friday last week) the vessels would do well to target the albacore for fresh exports. Frozen yellow fin will also fetch a rand or two above the albacore price so even gilling and gutting the yellow fin for the freezer is a good viable option. As an exporter, our main reasons for not exporting more volumes of yellow fin to the sashimi markets is two folded namely; the size of this yellow fin is too small and falls under the minimum weight acceptable by customers and also the colour. We are seeing inconsistency of colour throughout the loin and a very light translucent fleshy colour. The fat content of this yellow fin is also low which would suggest that they have traveled some distance and not residing in an area allowing enough time to feed and accumulate their required fat. Literally we are landing rats and as such have to be frozen to -20°C for the canning industry.

On a side note, I believe that Chris Pike has landed some good catches of Striped Marlin on the Struisbaai banks!

So far this season has allowed a much needed financial relief for the boat owners who will be able to clear themselves out of the red for the first time in about 2 years. So, true to our industry its either feast or famine. Long may this feast continue comrade?