A life aquatic: Improving the undersea economy

While Oman’s seafaring heritage and 3165 km of coastline has meant the country has been home to capture fisheries activity since time immemorial, the nation’s aquaculture industry remains at a nascent stage – despite government efforts to encourage its growth dating back decades. A Ministry of Agriculture and Fisheries Wealth (MoAFW) sponsored report in 1985 initially identified the potential of Oman as a location for aquaculture activity and proposed a number of development options and candidate species. By 1992 the MoAFW established its Marine Science and Fisheries Centre with the aim of building capacity in the field, and by 2002 preliminary plans for the development of a national aquaculture industry had been formulated.

A comprehensive strategy document produced in conjunction with the UN Food and Agriculture Organisation with a view to kick-starting the industry was published in 2007, and was followed by the publication of environmental best-practice guidelines in 2010. Still, aquaculture development on the ground remains at a modest level; shrimp output was just 127 tonnes in 2010, according to the MoAFW. The MoAFW intends to change this. After years spent establishing industry guidelines, introducing aquaculture legislation, liaising with other authorities and working with international fish farming experts, the ministry is now working to attract private investment to the sector.

Potential

Since the 1990s the MoAFW has conducted major research with a view to establishing a sound business case for a national aquaculture industry. This included studies of the fishery, breeding, caging and hatching of several species, including the abalone haliotis maria, two species of white shrimp, three species of seabream and three oyster species. The ministry continues to undertake further studies, focusing on areas such as the stock enhancement of molluscs through restocking with hatchery-produced juveniles and the development of effective breeding and culture techniques. It has also scaled and published the potential market output. On an annualised basis this includes 10,000 tonnes of seabream and freshwater bream via recirculating aquaculture systems (RAS), 19,000 tonnes of pond-produced shrimp, 2300 tonnes of bream from sea cages and 300 tonnes of sea cucumbers in marine ponds. In total, the MoAFW believes that a total turnover of OR71.5m ($186.3m) could be achieved if its initial tonnage estimates are met.

Investment Proposition

Having played its part in establishing the viability of an aquaculture industry, the MoAFW has taken the view that the key to further development is private investment. To this end, it has established a number of sector-specific incentives and combined them with multi-sector incentives and concessions to produce what it hopes will be an attractive proposal for local and foreign investment. As with other industries, investors in aquaculture projects enjoy access to logistical and consulting services from the Public Authority for Investment Promotion and Export Development (PAIPED), as well as a wide array of financial and business development incentives such as no personal income tax, free repatriation of capital and profits, 70% foreign ownership (which may be increased in some circumstances), five-year corporate tax holidays (extendable to 10 years); duty-free raw material import and access to the Oman Development Bank’s soft loan programme. The MoAFW has added to the general incentive framework with a set of measures of its own, aimed primarily at small stakeholders and small and medium-sized enterprises. Suitable candidates will be able to apply for technical training and financial assistance to develop their projects, and once established they will be granted a number of financial incentives. These include grants of up to 80% of the fair value purchase price of fish culturing systems, small fish, fish feed, and other necessary equipment.

Of particular use to potential investors is the recently produced “Atlas of Suitable Sites for Aquaculture Projects in the sultanate of Oman”. Completed by the MoAFW in 2010, it has been made freely available and represents a comprehensive evaluation of the nation’s meteorological, geographical, physical and biological oceanographic characteristics to date. The atlas divides the coastline into five regions to assess the potential of their oceanographic structure, environmental constraints, seawater survey and soil survey results, ports and public investments and aquaculture surveys. It also provides an assessment of the suitability of aquaculture methods by geographic region which includes traditional and immersed cage farming, cages supplemented with aeration, land-based aquaculture in earthen ponds, raceways and RAS and restocking programmes.

Spreading The Message

With the investment case made, the MoAFW’s efforts are bringing it to the attention of relevant parties. The ministry has made clear its desire to attract investors. According to ministry documents, project companies will be expected to “possess the highest level of technical expertise and have a proven track record of pioneering the development of new species and aquaculture systems”. The US market is just one of many with significant potential both in terms of exports and investment, and an aquaculture workshop staged in September 2012, jointly organised by the US Embassy and the MoAFW, highlighted the potential of this union. During the event, W Johann Schmonsees, chargé d’affaires at the US Embassy in Muscat, pointed out that Oman has yet to export seafood to the US despite the existence of a free trade agreement (FTA) between the two. He then revealed that the US Embassy and the MoAFW were in talks aimed at establishing an export market in the US for Omani fish products. Securing such export routes and attracting foreign investors will remain a strategic priority for the MoAFW in coming years.

Ancillary Benefits

The development of Oman’s young aquaculture industry promises a number of benefits. The MoAFW regards the sector as a driver of economic growth and a safeguard of the nation’s food security. Its stance is enshrined within a newly created regulatory framework. As part of their project proposals, potential investors will be asked to describe the steps they are willing to take with the MoAFW to establish production plans that will enhance food security and fish restocking efforts. They will also be asked to estimate how much of their fish production they would be willing to dedicate to the domestic Omani market, if required. The growth of aquaculture in Oman also brings with it possible social benefits. Investors are encouraged to cultivate close relationships with local communities by participating in local organisational and social development programmes.

The MoAFW will assess business development plans that involve local communities, giving preference to those that demonstrate a commitment to this area.

Investors will be asked to include details of training programmes for Omani employees, job entry levels and the benefits offered to staff. With the MoAFW’s vision of large-scale investment in Oman’s aquaculture, the nation stands to benefit in more ways than financially.

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The Report: Oman 2013

Agriculture & Fisheries chapter from The Report: Oman 2013

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