New age for fishing industry

Press, 31 August 1977, Page 33

New age for fishing industry

PHILIP WORTHINGTON

Growing public awareness, ef the undoubted potential' of tne New Zealand fishing industry, coupled with the 1 ' imminent declaration of a ; 200-mile economic zone, has left many peopie with the] mistaken impression that at!: e wave of a wand New Zealand will!: uncover a pot of gold. Unfortunately for the ro-l mantics the norma! rules of life apply also to the fishing industry: you cannot get something tor nothing. A feu salient facts will help to; put things in perspective. The 200-mile limit will give New Zealand economici control of more than one and a quarter million square' miles of ocean: only three other countries m the world ; will control larger tracts of sea. But more than half, Zealand's zone is deeper! than 1000 metres: few ves-| seis in the world can fish waters this deep so it will' be many, many years before New Zealand could fish ef-) f ciently in some 60 per cent! of its economic zone. The harvest of preferred; species — snapper, tarakihi, | gurnard, and others with, ready acceptance on the! local market — already: nears the upper limit for' prudent management of the! resource and little room re- 1 mains for expansion in this 1 fishery. The bulk of foreign' catches in what will become the 200-mile zone are ofl species which until recently,) have been difficult to mar-, ket and which. even now, 1 are in many casts not of particularly high value. New Zealand boats catch 1 about 50.000 tonnes of fish a year: foreign boats in the 200-mile zone catch about another 200.000 tonnes, four

I times as much again. For I New Zealand to significantly , supplant the foreign catch in our waters will require hefty (investment. Tentative estimates of the) (sustainable yield of fin-fish 1 )and squid from the whole (200-mile zone are in the order of 500.000 tonnes a year. Full utilisation of this ! by New Zealand enterprises 'would require a 10-fold in- ; crease in the capacity of the New Zealand fishing fleet, an even greater expansion of processing facilities, and a ’5O-fold increase in export markets. Export earnings from the ) fishing industry are impro- ) ving dramatically already, due to both increased volume and higher prices. Just four years agt the industry earned S2OM in : export income; by 1975 this ' had -isen to nearly S26M. In 11976 the figure rocketed to -S3BM. I For the first six months of (’this year, the volume of fisheries exports was up 86 per I cent on the same period last I year. The value has increased I to almost S26M, a 69 per cent (increase which equals the (■whole of 1975’s exports and ! I which, if continued, will give (an export income this year of ■‘more than S6IM. !> And, assuredly, by the J time New Zealand can more ii completely harvest its fishery, the continuing shortrage of fish from other si sources will have increased f 1 fish prices throughout the .world. It has been calculated that ,'if the whole of the annual f; yield of the 200-mile zone was caught and processed in ilNew Zealand, its value for i! export — on current prices • — would be between S2OOM rand S3OOM. r: In other words, if the

magic wand could be waved and the resource fully exploited this year, the New Zealand fishing industry could make a contribution to export earnings equivalent to about a half to two-thirds of the present export earnings of the dairy industry. So much for the potential; what then are the means of realising it? Several significant steps have been; taken already, the most eas- 1 ily recognisable being in the growth of the capacity of the New Zealand fleet. This requires not just more boats, but bigger, more specialised boats. In 1975 the New Zealand) boat building industry was; in the doldrums. Only five) (fishing boats were built in) New Zealand that year and’ they were not . the type) (which could exploit the) (deeper water fisheries (three) ■were under 40ft in length! land the other two were! junder 60ft). At that time) ■ only nine vessels in the New I Zealand fleet were over 70ft. i But in the last two years, spurred on by the Govern-) ment's incentives, a further) 12 boats of 70ft or more) (have been added to the fleet (at a cost of SIIM. I This sort of growth is | likely to increase even more ’ under the additional stimu- ) lus of last month’s Budget. • Development also requires ’more manpower. A trained I labour force cannot be produced overnight and this, too, dictates a “make-haste-i slowly” policy. About 5000 ■New Zealanders are employed in the industry today, both as fishermen and proI cessing staff. A four-fold increase to 20.000 has been (suggested by the Holmes Re- ' I port on economic and social (planning as a requirement !|for the mid-term development of the industry. i A sentiment in current

vogue is that on-the-joF training, using New Zealarr crews and overseas experts possibly on overseas boats will help to bridge the gap This is essentially part o, the “joint venture” school oi thought, which appears initially to be an attractivt way of increasing New Zea land involvement in fishing the 200-mile zone with overseas capital, plant, and expertise. But the appearance is largely superficial. Generally the industry views proposals for joint ventures — and the quid pro quo deals they entail — with a justifiable scepticism. f Broadly speaking, there are three main constraints lon the rapid development of I the industry: marketing, (technology, and capital. Most of these can be overjeome without the relatively | long-term commitment of a I joint venture. ) One aspect of marketing I constraints is that of tariffs, ) quotas, and other trade barriers. New Zealand-caught I squid, for example, is under ) quota and attracts a 10 per . cent duty when marketed in I) Japan; the same fish caught "I by the Japanese in New Zealand waters is sent back to ’ the Japanese market without restriction or duty. Marketing arrangements in ; joint venture companies are ’ often exclusive and can be detrimental to the New Zealand partner. It is not pos- • sible for any fishing com- ’ party to sell all its products at the top price in any one market. To get the best ' price for all of the catch a wide range of markets has to be supplied. And ex--1 elusive marketing arrange- ‘ men-ts within joint venutre companies couid well affect t adversely the chances of independent New Zealanc companies trying to supply '■■the same market. : The ability of joint venI ture companies to provide technology and expertise is often greatly exaggerated. Technology can be acquired without the need to enter 1o n g-term arrangements which are implicit in joint ventures; like boats it can be bought if not available locally. Without doubt, the provision of capital is a major problem, but, as already shown, development of the industry must be planned and progressive. As a result, its capital requirements will be spread over several years. It must be rememberer that what the resource — and the New Zealand economy — can sustain best is a medium-scale industry relying heavily on initiative and individual skills, rather than the transplantation from overseas of large-scale production processes with their problems of organisation anc industrial relations. There is no need to be xeno- ) phobic; advantage maj : well accrue in shorter-term ) mixed interest ventures, in ) which the essence of the arj rangement is contractual anc I the foreign vessels and exIperts are ‘chartered” during ! the period of development.

> But any form of joint ven- ! ture must be carefully • drawn up to avoid the possibility of the foreign interest “buying” a flag of convenience and licence to exploit the New Zealand fishery at the expense of, and in

competition with', the New i Zealand industry. The development of processing plants on shore is a high priority, but one with ewer complications than the evelopment of a bigger and ore s] ecialised catching apacity. Capital is the lajor requirement for on■hore canning, freezing, and recessing factories and, as ong as there is a guaraneed supply of the raw mattrial, this will probably be orthcoming from New Zeaand interests. With licences to foreign ’ishermen being granted antually, the Government is in i position to regulate the supply of fish to New Zealand plants by requiring a part of the foreign catch to be landed in New Zealand: for processing. This proce-' dure — which the Govern-) ment is entitled to demand; — can prove a valuable’ “uridge” between now and) the time the New Zealand! fleet has grown big enough) to fully supply New Zealand! plants. It will also give New Zealand processors experience with the hitherto , less conventional species not fished for by New Zealand . and which will eventually be ■ such a large part of pro- • cessed fish exports. • I ’ One other sector of the in,l dustry is also capable of I rapid development: aquacul- . ture or fish farming. ,1 Mussels, rock oysters, and 11 eels are already farmed in New Zealand and eel i exports, in particular, were > worth a valuable $2.6M in » 1975. Further expansion of . these fisheries, together with . the possibility of farming . trout, paua, scallops, and 5 even crayfish, is likely to be > piecemeal for some years t yet, relying heavily on one- , man or family businesses, 5 although some of the more . exotic schemes for slow-ma- - turing species would need ; big company finance capable t of waiting for years between f establishment and the first j returns. j So there is a bright future for the fishing industry. It - will need vision, capital, and »)a lot of hard work, but its s potential for growth is un- . challenged by any other 1 primary industry in New r Zealand. 5 In spite of this, there is a : real danger of stagnation i through political short-sight- » edness. ) A scramble for new markets for dairy and meat r exports could see -foreign . fishing rights in New Zea--5 land waters being dangled as j a carrot — or waved as a stick — to secure outlets for j mutton, butter and cheese.