Saurabh Bandyopadhyay, Senior Fellow, NCAER
Nijara Deka, Associate Fellow, NCAER
Palash Baruah, Associate Fellow, NCAER
Laxmi Joshi, Fellow, NCAER
Falak Naz, Research Analyst, NCAER
India is achieving significant strength in the allied space of agriculture. Fishery, dairy, and livestock are the areas of livelihood support for the millions. Moreover, India’s nutritional and food securities are deeply rooted in this sector.
Among the allied activities of agriculture, the fishery is growing at a higher pace and is recognized as a ‘Sunrise Sector’ with an outstanding double-digit average annual growth of production, which is 10.3 per cent in 2021-22.
A record fish production of over 15 million tons in 2021-22 has revealed a huge potential for the future. Moreover, it helps sustain the livelihood of over 28 million people in India of which the marginalized and vulnerable communities have a commendable level of participation
India is the second largest fish-producing country in the world accounting for 7.6 per cent of global production and contributing about 7.3 per cent to the agricultural Gross Value Added (GVA) of India. Fish being a rich source of animal protein, is one of the healthiest options to mitigate hunger and nutritive deficiency.
However, the fishery sector is beset with a few major problems, which have been noted in the recent National Council of Applied Economic Research (NCAER) study (March 2023) of the fishery sector for the Department of Fishery of Government of India. The primary survey of NCAER covered 12600 fish-eating households in 105 districts across 24 states of India.
Among the major problems, the price factor remains a critical dent in its accessibility to the less affordable. In terms of expenditure quintiles of household, the consumption of fish (with 30 days reference period) reveals almost a linear distribution, with richer quintiles of households consuming a higher average quantity of fish, while the poorer the less. As shown in the graph below (Figure 1), the poorest households consume less fish compared to the richest.
The distribution of expenditure groups and the consumption of fish (in kg) in a 30-day reference period is shown in the following Figure.
Figure 1: Consumption inequality of fish among expenditure groups in quintiles
Source: NCAER Primary Survey
The nutritional value of fish is enormously important. . The growth of organized food retail markets, food-tech services and eating-out trends have an impact on the demand for fish and fish products. This growth is further fuelled by the shifting of policy level focus from ‘food security’ to ‘nutrition security’.
However, as already mentioned, a large number of households remained bereft of fish consumption just because of affordability. There are states where fish demand is more, whereas there are states where production far surpasses consumption. The states with less per capita income tend to have higher distress with respect to the price of fish.
A high price is reflected to be the critical restricting factor for the consumption of fish by fish-eating households in several states. It may be noted that states where high price deters consumption of fish are the ones having a high propensity to consume.
At all-India levels, 73 per cent of the households observed high prices as the steepest restricting factor. It may be noted that states with less per capita income are the ones which impacted their consumption more due to prices. High-income states like Delhi, Goa, Tamil Nadu, and Karnataka are far below the national average, showing better affordability of the fish-eating households in this state.
The state-level distribution is important to gauge the level of consumption which shows the inequality of consumption of fish. Therefore, proper distribution from the surplus production area to the ones where consumer demand is more should be the priority to lower the price constraint and enhance the level of fish consumption.
This will, in turn, help enhance the per capita consumption of fish to a higher trajectory. Moreover, there is a very poor mechanism for the preservation and transportation of fish to bridge the supply-demand gap.
Figure 2: High price is the restraining factor in most low-income states, leading to inequality of consumption of fish among states
Source: NCAER Primary Survey, Per Capita Income of States is sourced from Reserve Bank of India; Note: PCI=Per Capita Income at Constant 2011-12 prices
The above-mentioned price restraining factor among state households critically points out the inequality of consumption of fish among quintiles of the expenditure groups as well in the states with a higher proportion of fish-eating households.
How the consumption inequality could be redressed? It is a fact that supply-side aspects should play a critical role in reducing consumption inequality as noted above.
India is a production surplus country and aquaculture has immense possibilities. However, the fish market in India is mostly unorganised and lacks scientific preservation mechanisms and better transportation, impacting supply from the surplus-producing states to the deficit areas.
The budgetary allocation for the Department of Fisheries has gone up by a whopping 38.5 per cent to Rs. 2248.8 crores as against the corresponding figure of Rs. 1624.2 crores during 2022-23. This is one of the highest-ever annual budgetary support for the Department.
Emphasis is now placed more on the formalization of the sector, encompassing digital inclusion, simplifying access to institutional finance for capital investment and working capital, and providing incentives to microenterprises operating in the fisheries and aquaculture sector to work on value-chain efficiencies.
Reassuring micro and small enterprises to establish supply chains for delivery of safe fish products to consumers, thus expanding the domestic market and incentives for the creation and maintenance of jobs for women in the sector.
Physical accessibility and economic accessibility of fish to consumers need to be addressed in a balanced way to boost the demand. In some rural areas, fish is available only in the weekly market and not available daily, thereby limiting its consumption.
Mobile fish vending vehicles, introducing fish retailing in rural areas, etc. will improve the accessibility of fish to consumers. Mobile fish vending should be promoted by extending financial support for cycles with ice boxes, motorcycles with ice boxes, and three-wheeler with ice boxes including e-rickshaws.
Fish transport vehicles/facilities procured under the scheme should be used only for transporting and marketing fish and not for any other purposes. Therefore, the demand-side aspects need complementary support from the supply side to enhance access to the market.
The fisheries sector lacks an extensive temperature-controlled supply chain from harvest to consumption. The challenge is more so in the domestic sector, where the marketing of fish and fish products is highly unorganized and unregulated. Further, fish production is not evenly spread across the country, and major production is limited to some states.
Hygienic distribution of fish and fish products (chilled fresh, dried or processed) across the states to meet the growing demand of fish deficit states including those in the NE region where fish is a predominant source of protein continues to be a challenge.
With improved infrastructure and strengthening of the supply chain, the fishery could emerge as a crucial substitution for chicken and competitive, just like aquatic chicken (Tilapia) even for high-value fish with other alternatives. According to the UN-FAO, this variety of fish is one of the fastest-growing farmed fish around the world, and along with carp and catfish, it will take a share of more than 60 per cent of the total global farmed fish production.
In India, the general acceptability of frozen fish amongst consumers is poor as compared to fresh fish. Consumers often suspect the quality of frozen fish and it is somewhat true as India lacks a robust integrated cold chain supply system for fish and fish products.
The government should prioritize the promotion of integrated cold chains (ICCs) by extending financial assistance and facilitation for the establishment of key cold chain infrastructure facilities such as chilled storage facilities, ice plants, cold rooms, freezing units, value addition unit operations, reefer transportation, modern air-conditioned retail outlets and implementation of modern sanitary and hygienic practices etc.
This initiative has the potential to improve efficiency in handling, storage, transportation and marketing of fish and fish products besides reduction in post-harvest losses and meet growing and continued demand for the supply of safe and nutritious fish to consumers at reasonable prices. Overall, it can lead to enhanced per capita fish consumption contributing to the nutritional security of the country.
There is also a need to identify water bodies under aquaculture that are unsuitable for intensive cultivation and guide them towards optimizing their production for producing fresh fish in an economic manner for the domestic market.
Contract farming models may be promoted to achieve better integration among fish farmers and processors. Contract fish farming is a type of aquaculture where a company contracts the farmers to raise fish for them. The company provides the farmers with fingerlings, feed, and technical assistance.
The farmers are responsible for raising the fish to market size and delivering them to the company. It can be seen as a way for small-scale farmers to get involved in aquaculture without making a large investment.
The feasibility of contract farming and buyback arrangements should be explored in aquaculture wherever appropriate and feasible. It will ensure an assured market for the producer as well as better quality products for the consumers. With a better supply scenario in place, the price will soften to include more consumers.
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