COSTS AND EARNINGS OF FISHING ENTERPRISES

Press, Volume XCVIII, Issue 29058, 21 November 1959, Page 10

COSTS AND EARNINGS OF FISHING ENTERPRISES

Need For Further Studies [From the Fisheries Division of the Food and Agriculture Organisation] ROME, November 12. “If this meeting does nothing more than to stimulate in management as well as in government and public agencies a wider interest in costs and earnings studies as a means of improving the efficiency of the industry, then for thia alone we shall be entitled to count the meeting a success.”

These words were spoken by Sir Louis Chick, chairman of the White Fish Authority (United Kingdom), in his opening remarks as general chairman of the technical meeting on costs and earnings of fishing enterprises, which was held in London in September, 1958, and which appear in the report of that meeting which has now been published by the Food and Agriculture Organisation (F.A.0.). The meeting was attended by 52 experts from 21 countries.

The report presents a wide range of information on costs and earnings in the fishing industry, containing excerpts from the papers submitted and from the remarks of the rapporteurs, as well as a summary of the discussions.

The discussions revealed, in particular, the need to investigate and study the costs and earnings in tlie fishing industry. As the report states:

“One of the principal virtues of the discussions was that they succeeded in bringing to the fore what type of cost and earnings information was wanted, in what form it was wanted, who wanted it and why he wanted it. On the answers to these questions, participants agreed, depended the nature of the inquiry to be undertaken in each instance, the methods of organisation and conduct, and the analysis of results.

“While studies of a broad scope were satisfactory from the standpoint of indicating certain'trends and furnishing guide lines for future policies, reliable answers relating to the contributions of individual factors to the success of operations could be obtained only on the basis of inquiries specifically tailored for these purposes. In this connexion, the danger of drawing specific conclusions from a body of data on operations which had not been sufficiently stratified was clearly recognised. Conversely, it was concluded, one had to guard against ascribing general significance to observations made in the course of individual inquiries. Thus, for instance, it was shown that the positive correlation between size and earnings mentioned in some of the papers as well as in the discussions did not apply in socalled ‘over-capitalised’ fisheries. Here, high capital charges on large craft, some of which had been added to the fleet only at a relatively recent date, accounted for the fact that smaller operations showed more favourable results.” Size And Earnings The relationship between size of fishing vessel and earnings was a special feature of the discussions. There was also, the report says, evidence of considerable conflict in views regarding the relative importance of technological factors and the human element in determining successful operation in fisheries.

The report lists seven points on which there was substantial agreement among participants: (1) Efforts should be made to ensure the co-operation of biologists, administrators, technologists, economists, and other specialists in the organisation of studies and in the analysis of results. (2) If industry expects to obtain certain benefits from government, it must be prepared to lend government its eo-operation in cost

and earnings studies. In turn, government researchers will increase the practical value of their investigations if they maintain close liaison with the fishermen in the preparatory phase, and throughout the conduct of their studies. Industry should take a greater interest in sponsoring research, on its own.

(3) The present state of knowledge does not permit specific price forecasts in the fisheries. In some fisheries and under certain conditions, however, it was emphasised, forecasts of a limited nature were possible. (4) In the analysis of operational results one must not stop with computation of certain mathematical correlations .... 'over and above there is a need to demonstrate implications from a practical standpoint. (5) Conclusions regarding industry performance drawn on the basis of cost and earnings evidence alone, and without reference to other factors, could be misleading. To construct the proper frame of reference, policies pursued by the-government and institutional factors, among other things, had to be considered. One of the Polish contributions indicated, for instance, that in Poland cost and earnings information was not the only guide in the shaping of development policies. (6) Participants without exception were in favour of a greater international exchange of experience. One of the first requisites in this connexion, they thought, was the translation of reports on completed studies into one or more of the official languages of FAO. (7) FAO, further, participants felt, could actively assist by organising a study on classifications and definitions used in cost and earnings studies. They, therefore, adopted a formal resolution requesting FAO to consider the feasibility of including a project along these lines (to be carried out with the co-operation of experts from the various countries interested in the problem) in its programme. Included in the report are 29 tables dealing with various aspects of costs and earnings studies in Canada, Japan, the Netherlands, Poland and Sweden and three graphs dealing with factors affecting the success or failure of British fishing vessels. The report is available free of charge on application to FAO, Rome.