Trapped Value in Small-scale Fisheries
Seafood companies and supply chains are playing a crucial role in the development, execution, and funding of efforts to create stable, sustainable production in small-scale fisheries.
Fishery improvement projects and similar interventions have successfully advanced responsible management across the globe, but there is still significant trapped value in these fisheries.
This brief aims to provide supply chain companies with an overview of the existing barriers to releasing economic, ecological, and social trapped value in small-scale fisheries.
Table of Contents
Summary:
Small-scale fishery improvement projects and community development efforts provide an important ROI for the global seafood industry – accessing new sources of responsible, assured supply from wild caught fisheries.
Improvement efforts in domestic fisheries also help international supply chains by removing illegal elements from the seafood trade, reducing negative environmental impacts, and establishing recognized fishing rights which in turn creates local, invested advocates for responsible management.
The seafood industry has access to a robust and diverse set of tools designed for different geographies and different species, models that are supply chain driven, community driven, tied to certification, models that highlight cooperative management, shared value, and productive alliances , and entrepreneurial programs like those designed by Future of Fish and Smartfish.
“The seafood industry has access to a robust and diverse set of tools designed for different geographies and different species.”
Despite this diversity, small-scale fishery improvement programs all face three challenges to releasing trapped value:
A
How to move from a tactical focus to a strategic focus
B C
How to effectively drive change outside supply chain leverage
How to develop a long-term engagement plan with governments
Supply chain collaboration and leverage can be an effective driver for improving practices in a fishery or supply chain, for example, changing gear types, registering catch dockside, or vessel registration. For changes or improvements outside the supply chain – developing management plans, enforcement, or stock assessments carried out by national governments – small-scale fishers rarely have the leverage to move the national government or find the resources for these activities.
Similarly, a small-scale fishery may be able to implement responsible fishing practices, but cannot leverage improvements in regional water treatment or electricity reliability and cold chain to deliver a responsible product to market.
The fishery improvement model was not originally designed to work outside the influence or control of fishers and supply chains. An environmentally-focused, industrial fisheries supply chain tool was modified to work with small-scale fishery environmental issues, modified to work with communities and co-op structures, and modified to drive improvements in social conditions. This tactical diffusion of the supply chain driven improvement model lacked an accompanying strategy to address the full range of hurdles and barriers to delivering responsible seafood products to market and to driving change outside the supply chain and fishers’ sphere of control.
Small-scale fishery improvement models “outsource” management and oversight of fisheries from national governments to supply chains or communities and co-management. The model also outsources the cost of management and oversight to supply chains, civil society or communities. The long-term sustainability of the supply chain’s assumption of these costs and activities is not clear. Strategies for transfer of essential management, enforcement measures to address IUU and remove criminal elements, and data collection back to governments, will reduce the burden on the supply chain for improvement efforts. It can also help identify an “end game” strategy – what does long-term success look like and what are the roles government, civil society, and the supply chain play to most efficiently adopt better management in small-sale fisheries.
Certification is often cited as the end goal for improvement projects which can increase market access for the fishery and increase assurance for buyers. This stepwise to certification approach, sometimes referred to as a comprehensive FIP, only works in fisheries where there is already some government oversight to produce management plans and stock assessments.
There is little evidence from other industries, timber or agriculture for example, that supply chains can drive improvements and then hand management back to the government, but a deeper understanding of the longer-term strategic opportunities to increase the participation and role of governments can drive efficiencies in costs, shift costs off the supply chain, and define longerterm roles for government, the supply chain, and civil society in a change strategy.
What is trapped value in small-scale fisheries?
“Trapped value emerges wherever system inefficiencies create blockages in value delivery. Consider the trapped value that has been released from libraries by search, from taxicabs by ride-hailing, from maps by GPS, from print media by the Web, from spare bedrooms by the sharing economy, from cable TV by streaming, or from landlines by wireless.” Geoffrey Moore author of “Crossing the Chasm” and “The Infinite staircase”.
In small-scale fisheries, the system inefficiencies blocking value most often arise from a lack of management, enforcement, or governance of fish stocks and related ocean resources. Weak governance in small-scale fisheries can include nonexistent or insufficient management plans, stock assessments, conflict resolution mechanisms, established rights for fishers, and responses to combat illegal fishing. While these challenges are often addressed on a fishery by fishery basis, an understanding of the systemic blockages creating trapped value and opportunities to release trapped value allows supply chain companies to better identify the role they can play in releasing trapped value in small-scale fisheries.
The industry has become proficient at recognizing industry-wide pain points at a systems level –traceability interoperability or weak RFMO tuna management – and designing collaborative responses Precompetitive collaborations like the NFI Crab Council or Sea Pact, supply chain collaboration in fishery improvement projects, and the development of sector councils are designed with a systemslevel view of industry pain points and headwinds.
Along with addressing pain points, the combination of industry collaboration and a systems view also allows companies to address business opportunities by releasing trapped value.
The development of Ocean Clusters and 100% fish utilization, the efforts of GDST to release the trapped value in inefficient data exchange in supply chains , and the Sustainable Fisheries Partnership and their supplier roundtables are successful examples of industry releasing trapped value in seafood supply chains. While “collaboration around sustainability” may not sound like a capitalist rallying cry, this is exactly how markets should work – “Trapped value to entrepreneurs is like honey to bears: It attracts new sources of capital investment and new entrants eager to experiment” as Forbes magazine characterized trapped value’s impact on innovation.
For small-scale fishery improvements, there are a number of organizations working to promote collaboration, including The Conservation Alliance for Seafood Solutions, Fisheryprogress, The SmallScale Fisheries Resource and Collaboration Hub, and The FIP Community of Practice, that focus on information sharing and alignment of tactics and are well positioned to address some of the larger strategic issues essential to releasing trapped value in small-scale fisheries.
In Geoffrey Moore’s example, releasing the trapped value in search when we moved from libraries to the internet not only created business opportunities, it created opportunities to improve social welfare, education, and communities. Releasing trapped value in small-scale fisheries can also release multiple values – environmental, economic, and social.
A. Ecological/environmental trapped value:
There are few industries where sustainability and long-term assured supply are more closely linked than seafood. Unlike other proteins, overexploitation of fisheries or unsustainable practices can not only reduce the long-term production of target species, it can also impact food cycles and degrade spawning grounds or habitat.
Ecological and environmental trapped value – the inability to maximize the long-term ecological production of fisheries and related ecosystem services – is a function of weak management and enforcement. A management void combined with a lack of other livelihood options in coastal communities often leads to exploitive, race-to-the-bottom practices.
This is not always the case – there are examples of fisheries sustainably managed by the fishers themselves despite a lack of national or international management, but the target species, its sources of food and habitat and the entire ecosystem and supply chains are still vulnerable to negative outside impacts driven by illegal fishing or climate change. In the Maldives fishers and the government have designed a management strategy for their skipjack tuna with the support of FairTrade that avoids exploitation scenarios by recognizing the value of a diverse ocean-centric economy that reduces the pressures on fisheries for livelihoods and creates a diverse set of advocates for responsible management.
Releasing ecological and environmental trapped value through better management in return releases economic trapped value in the form of increased stock levels and stable supply.
B. Economic trapped value:
A new study produced by Stanford University in conjunction with FAO provides an impressive overview of the economic impact of small-scale fishers. The study estimates an annual catch by small-scale fishers of approximately 41 million tons of seafood or 40% of total landings and 44% of total value estimated at USD 77.2 billion.
“Our study estimated that one in every 12 people around the world, approximately 492 million people are at least partly dependent on small-scale fisheries pre-harvesting, harvesting and/or post-harvesting activities through formal employment, work for self-consumption or as related household members”. According to the paper “Illuminating the multidimensional contributions of small-scale fisheries”.
These small-scale fisheries often serve domestic markets, but can be very important to globally traded products including yellowfin tuna and blue swimming crab. A lack of management over these fisheries and a poor understanding of the role of small-scale fishers in value distribution through these supply chains contributes to a cycle of economic trapped value in global supply chains.
With few opportunities to “grow” wild caught fisheries, which according to the FAO have hovered globally at 90 metric tons for close to 30 years, small-scale fishery interventions allow supply chains to access seafood that was previously unavailable or could not meet responsible management requirements (e.g. traceability, catch records) of the supply chain.
Better fisheries management and more responsible fishing and supply chain practices can also derisk seafood, remove refuges for illegal fishers, and ensure migratory species are managed appropriately across geographies all of which release economic value for seafood companies.
C. Social trapped value:
The labor-intensive nature of small-scale fishers and aquaculture increases their importance for the coastal and island communities that often have little other economic opportunity. Of those 492 million people indirectly or partly dependent on small-scale fisheries for employment, The Sustainable Fisheries Partnership estimates more than 113 million people are directly employed in small-scale and artisanal fisheries. This makes small-scale fishers nearly 90 percent of the workforce in capture fisheries with most of the workforce located in developing countries.
MORE THAN 113 MILLION PEOPLE ARE DIRECTLY EMPLOYED IN SMALL-SCALE AND ARTISANAL FISHERIES
While the economic value of seafood and job creation opportunities can be a boon for communities, it also makes ocean resources vulnerable. Economic overdependence on fisheries combined with weak management often leads to exploitation of resources from competition or illegal activity. If declining stocks follow exploitation of fishery resources while weak management and enforcement continue, other illegal and exploitive activities can replace fishing for income
Releasing trapped social value in fisheries – increasing the value of fisheries to local communities, creating stability and equity in supply chains – creates opportunity for communities and stability for supply chains. The establishment of recognized rights for fishers creates local advocates for responsible management and an on-the-water monitoring mechanism.
Without recognized fishing rights, small-scale fishers, and the resources they depend on, can be marginalized in favor of more powerful political or economic interests
“In order for these fisheries to have value – social, economic, and cultural – it requires support from private sectors, governments, and all actors because of the complexity of the fisheries,” according to Irna Sari, an Indonesia advisor for the Walton Family Foundation. “What we have learned from other developing countries is that small-scale fisheries often face marginalization; they are actually punished because they cannot compete. We have to look at what appropriate measures make small-scale fishers critical actors in the global seafood system rather than marginalized actors.”
The Stanford study found similar challenges for small-scale fishers, “Specifically, about two-thirds of catch from small-scale fisheries in 51 countries surveyed come from fishers with no formal rights to participate in resource management and decision-making processes,” according to the study.” … Lacking authority, small-scale fishers are vulnerable to external competition or exclusionary policies that could compromise the natural resources they rely on and their potential contributions to sustainable development.”
Another barrier to social trapped value is the lack of infrastructure to deliver a healthy and safe product to market. Even if a fishery is able to adopt improvements in responsible management and harvest, basic services including water treatment, reliable electricity and cold chain can be a challenge to delivering that responsible product to market.
Working outside traditional supply chain leverage to drive social change may feel like it is outside a seafood company’s wheelhouse, but innovative approaches are being developed by companies that are successfully releasing economic trapped value through social improvements.
How to release trapped value in small-scale fisheries
There are often three systems acting upon small-scale fishers to drive improvement and responsible practices – governments, supply chains, and civil society through instruments including NGOs and aid agencies.
All parties benefit when the three systems are mutually supportive and active. The purpose of smallscale fishery interventions is to compensate for a weak contribution from one of the systems. Usually, it is the government that lacks the resources or political will to engage, sometimes the supply chain pull is not strong enough to incentivize improvements, and in some cases, communities need support to actively participate in improvements
The spheres of control and influence for seafood companies and civil society instruments overlap significantly. It is certainly not surprising that supply chain companies have the greatest leverage driving change through the supply chain. What is surprising is civil society improvement mechanisms in seafood are also designed to drive change through supply chains – certification, FIPs, audits, the UN Sustainable Development Goals, the Science Based Targets Initiatives – are all tools that use supply chain leverage to promote adoption.
The amount of trapped value released in small-scale fisheries, and the efficiency with which it is released, can be increased if supply chain companies, civil society, and governments address:
A B C
How to move from a tactical focus to a strategic focus
How to effectively drive change outside supply chain leverage
How to develop a long-term engagement plan with governments
A. Focus on strategy not tactics
“Major seafood buyers supporting these early FIPs described the strategy as “fix the worst first,” meaning prioritize engaging the worst performing fisheries in their supply chains, and within those fisheries, focus improvement efforts on the worst problems. These FIPs typically focused on urgent issues (such as rebuilding depleted stocks) and postponed other needed improvements until adequate progress had been made on the top priority issues. These early FIPs typically focused on larger fisheries within existing supply chains that were prioritized for action by buyers based on their greater commercial importance, were almost all large in scale and sought to cover the entire biological stock and management unit (e.g., Russian pollock, Barents Sea cod FIPs).” According to the paper, Fishery improvement projects: Performance over the past decade.
Unlike the early, larger industrial FIPs, many small-scale fisheries are not industry priorities, lack significant commercial importance and supply chain leverage, and often have a very different set of concerns than their industrial counterparts.
To accommodate these differences, the seafood industry and civil society have redesigned FIPs and incorporated other improvement and community development models that are more “small-scale friendly.” While this redesign and diversity of tools has helped release trapped value in several fisheries, the process has been a diffusion of tactics rather than refining a guiding strategy. Viewing the challenges in small-scale fisheries through a tactical lens focuses on incremental solutions (addressing specific pain points) and makes reform or architectural change difficult and transformational change in the small-scale fisheries space almost impossible.
At the tactical level, improvement programs need to address: how to drive environmental improvements, how to incorporate social issues, and how to design appropriate levels of stepwise goals and oversight. There are significant resources and organizations focused on these challenges.
At a strategic level, improvement programs need to address: how to drive change outside of supply chains and fishers’ sphere of control, how to increase government capacity for management, and trying to understand what success and the exit strategy or long-time management plan look like. There are few resources and organizations devoted to answering these questions.
B. Increase leverage/impact outside supply chains
Fisheryprogress.org has close to 300 FIPs listed on their site providing a solid sample of what works and what does not for supply chain improvement efforts. The seafood industry has been very effective at using supply chain leverage to drive change in industrial fisheries and small-scale fisheries. The challenge is not how effectively the industry has used supply chain intervention tools; it is the limited reach of supply chain leverage especially when trying to drive change in political or social arenas.
At a tactical level, it appears supply chains are better at driving environmental improvements and are often challenged to drive social improvements.
At a strategic level, if an issue is within the sphere of control of the fishers, their community, or the supply chain, there will be a higher success rate at driving change. If a barrier to responsible management is outside the sphere of control or leverage of the economic participants in the fishery, it becomes harder to create the enabling conditions for good management or drive responsible practices. This dynamic is true regardless of the type of issue, social or environmental, the improvement program is addressing.
“The challenge is not how effectively the industry has used supply chain intervention tools; it is the limited reach of supply chain leverage especially when trying to drive change in political or social arenas.”
Environmental improvements tend to be in the harvesters’ and producers’ sphere of control or influence – registering catch and vessels, agreed upon closed seasons or areas, or reducing bycatch. Some environmental issues are outside the control or influence or small-scale fishers – enacting management plans and stock assessments, enforcement and addressing IUU fishing, and the deployment of necessary resources to carry out those activities.
Similarly, there are some social issues that can be dealt with through supply chain influence because they are within the harvesters and producers’ sphere of control. Fisheryprogress identified a set of social issues that were within the fishers sphere of control to launch their Human Rights and Social Responsibility Policy. “The HRSR policy requires FIPs to perform a self-evaluation against criteria for increased risk of forced labor and human trafficking, develop a policy statement (code of conduct) and grievance mechanism, help make fishers aware of their rights, and provide a vessel list. The objectives of the policy are to help FIPs identify and reduce the risk of human and labor rights abuses at the harvest stage of their supply chains and to increase transparency around the efforts FIPs and their participants are taking to address human and labor rights risks.”
But the further removed from the influence of producers and supply chain leverage – regional government decision-making for basic services and national government policy necessary to establish fishing rights – the harder change becomes. There are examples of new, innovative strategies that are designed to extend the influence of supply chains and civil society including models for shared management with the community or harvesters assuming management responsibilities that have been adopted from small producer programs in agriculture.
C. Strengthen the role of governments
The ability to engage governments, when possible, as a participant in improvement programs can help drive progress in the short-term and can set the stage for greater alignment with government policies and activities as the improvement process evolves.
Longer term, a strategy for the most efficient division of management roles among government, industry, fishers and communities, and civil society will increase the sustainability of an improvement program. Lack of capacity, expertise and resources were cited by stakeholders working in small-scale fisheries as the main challenges to increasing government’s role in fisheries management, but high turnover in governing administrations, changes in policy, and changing national investment priorities also made government engagement difficult.
It is also true that most of the capacity and resources driving improvements in small-scale fisheries are supply chain focused or building off a supply chain focused model. While there are major hurdles to government engagement, the lack of resources working to drive change outside supply chains could be reinforcing the challenge – the burden for resourcing and overseeing improvement projects will always rest with the supply chain and civil society unless they incorporate strategies for growing government responsibility into the improvement project’s goals.
Conclusion
The seafood industry is well positioned to release trapped value in small-scale fisheries with significant resources, capacity, and expertise already deployed globally. The model originally designed for industrial fisheries has a diminishing fit for purpose as the barriers to responsible management are increasingly further from supply chain leverage, as improvement projects operate in countries with little management capacity and resources, and as tactical responses are applied to strategic challenges. For responses to environmental and social issues, starting with a tactical response that evolves into a strategic response is typical. Tactical responses address specific pain points and threats while strategic responses usually address systemic barriers or issues causing those pain points. Fighting fires is a tactical response.Fire prevention is a strategic response. Building shelters is a tactical response. Policies to address a lack of affordable housing is a strategic response.
The seafood industry and its partners need to increase their strategic response to weak management in small-scale fisheries and eventually find a better balance between tactical responses and strategic responses, between supply chain management and government management, and between leverage inside the supply chain and outside the supply chain.
Seafood2030 is interested in the intentional design and evaluation of the sustainable seafood “system” or the collective impact of sustainability efforts in seafood. The organic growth of efforts in sustainable seafood has led to inefficiencies and unnecessary complexity in the seafood industry’s journey toward greater sustainability. The ability to address inefficiencies and strategic dilemmas in the system is the greatest opportunity to increase the uptake of sustainable practices and ability to address new social and environmental challenges facing seafood.