The fishing sector got off to a strong start in 2018, with 777,000 tonnes caught in January – a year-on-year increase of 7.5%. Based on the year’s healthy opening catch, the Ministry of Production expects the 2018 volume of output to be 38% more than the previous year, although that estimate depends in part on oceanographic conditions remaining favourable.
Anchoveta
The anticipated increase for 2018 will be primarily driven by larger catches of Peruvian anchoveta, a staple in the sector that is part of the anchovy family, and from which fishmeal and fish oil is supplied to markets around the world. Since 2009 the anchoveta segment has been the target of a sustainable development drive by the government, and in 2009 and 2010 Peru received three loans totalling $455m from the World Bank to aid the evolution. The last decade has therefore seen the authorities overhaul the management of the industry in a bid to halt environmental degradation that posed a threat to economic growth and livelihoods. Peru’s waters are home to some of the world’s largest anchoveta stocks, yet the species came under threat from overfishing and changing currents due to phenomena such as El Niño.
Reforms included establishing fishing seasons and reducing fishing fleets by 25%. While some fisherman stayed in the industry on a rotating basis, others were given compensation packages to exit the sector and retrain for other professions.
Catch limits per vessel were also instituted, but the size of the anchoveta population and how much can be sustainably caught each year fluctuates due to the high climatic variability of the species’ ecosystem, which necessitates a constant monitoring of fish stocks.
Sustainable Fishing
In an effort to create a more tailored and flexible set of regulations, private fishing companies and the country’s maritime research body, the Institute of the Sea, are working together to gather real-time information on stocks and climatic conditions. “We are not complying with the controls just because it is mandated by law; we want to be responsible to make sure we can continue fishing in the future,” Miriam Huanca Aguilar, head of quality control at the Diamante fishing plant in Malabrigo, told the World Bank in 2017.
An example of the government’s commitment to enforce sustainable practices in the sector came when the Ministry of Production announced a five-day suspension of anchoveta fishing between June 28 and July 2, 2018 along the Végueta littoral, just north of Lima, as a result of overfishing. A similar action was enforced for a two-day period earlier in June. Sanctions against fishing vessels found violating such announcements include fines and the impounding of boats.
Peru’s fisheries sector was in need of reform due to declining yields and overcapacity of fishing vessels and processing plants, according to a 2016 report by the World Bank on the implementation and results of the programme. With the support of the organisation’s loans, various initiatives were successful in strengthening the legal and institutional frameworks for environmental management, biodiversity conservation and the promotion of private sector financing.
On an international scale, the World Bank estimated in a February 2017 report that the global fishing industry could generate an additional $83bn annually by catching fewer fish and allowing the populations to recover to a more valuable health and size. It cited Peru as an example of how it is possible to reduce overfishing with locally appropriate reforms that improve the livelihoods and job security of coastal populations.
Bouncing Back
In addition to larger anchoveta catches, the Ministry of Production expects a 9% increase in fish hauls for direct human consumption in 2018, which is marketed across the canned, frozen and fresh fish categories. Indeed, output of the majority of segments is expected to be higher in 2018 than in the previous year, given the negative effects of El Niño. One area where the weather phenomenon took its toll in 2017 was on scallop production in Sechura Bay. Contributing to the bright outlook for the sector in 2018, the ministry forecasts a 28% increase in scallop volume due to recovered stocks.
Fish farming is another area gaining momentum, with a success story seen in the north-west Lambayeque region. The Ministry of Production’s Aquaculture Extension Programme resulted in 7.62 tonnes of tilapia being grown in the region in 2017 – the first time the species has been harvested in that area in 18 years. This was the result of the planting of 64,000 tilapia fry and 3000 shrimp larvae at farms along the coast, where the ministry had carried out training and development workshops with local fish farmers.
Aquaculture production is forecast to increase by around 12% in 2018, with sales expected to surpass $240m. The expansion will be led by an anticipated 10% increase in prawn output and 9% growth in trout.
Sector Shift
Beyond the focus of increasing production in a sustainable manner, Peru aims to move the industry more towards aquaculture activity. To this end, in January 2017 the World Bank approved a $40m loan for the National Programme for Fishery and Aquafarming Innovation to increase the productivity and diversity of the country’s fish farming, and lessen its dependency on live catching – a project to which the government is contributing an additional $80m. The programme is aligned with two government goals. The first is to increase the production of species other than anchoveta, while guaranteeing the sustainability of saltwater species, and the second is to expand the freshwater aquaculture system to promote investment throughout the value chain. The latter aims to increase fishermen’s revenues, create jobs in the sector and improve nutrition for the entire population.
According to the World Bank, the programme will directly benefit more than 12,000 individuals, producer groups and small businesses engaged in fishing and aquaculture, processing and distribution. Improving their operations and livelihoods will be accomplished through research and innovation to sustainably develop both live fishing and fish farming, as well as through the implementation of policies and institutions to improve the governance of the sector.
Worker security also came into greater focus recently with the August 2017 passing of a law that created obligatory insurance for artisan and industrial fishermen. The coverage provides compensation to fishermen or their relatives in the event of injury or death when the policyholder works either independently or as a crew member aboard fishing vessels. Fishing companies and independent fishermen must purchase the insurance policy from authorised brokers.
Investment
According to Invest in Peru, the country’s investment promotion agency, favourable geographic and climatic conditions for fishing have not only led it to be an industry of national importance, but an attractive choice for foreign investment as well – particularly in aquaculture, given the availability of high-quality fishmeal. In a signal of the country’s commitment to developing the industry, in June 2017 Peru joined the Aquaculture Network of the Americas, a convention drawn up in Nicaragua in 2012. The intergovernmental agency aims to boost regional cooperation in the subsector, with a focus on social, economic, scientific and environmental aspects.
Private sector involvement already exists in the traditional frozen and canned fish industries, but opportunities are also present in new products that enjoy higher market prices, the agency states. Therefore, a trend is forming among fishing companies as they move to expand their activities into aquaculture in order to become more comprehensive food companies. Invest in Peru also highlights the investment opportunities in supplying related goods and services to the sector, such as vessel and component replacement, fish farming processing facilities and logistics.
Furthermore, global demand is growing for fish derivatives such as Omega-3, glucosamine and chondroitin sulphate, which supply the pharmaceuticals and nutritional supplement industries. Peruvian firms have the opportunity to join companies from China, France, Italy, Norway and South Korea already present in this market.
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