Implementation Status of the Research Components (March - August 2002)

Component 2 - Analyses of Policies, Institutions and Support Services

Institutions and Support Services of the Fisheries Sector

China

Fisheries is one of few sub-sectors within agriculture that has been rising with the overall economic growth in China. As the largest producer of aquatic products in the world, China's aquatic production has increased significantly over the past decade. This tremendous growth of the fisheries sector, particularly cultured fish production, has come from both area expansion and rising productivity. Technological changes both in marine and inland aquaculture, land tenure including water bodies and other institutional reforms, price deregulation and market liberalization, development of research and extension, and increase in processing capacity have all contributed to the expansion and yield growth in the past two decades. Technological change has been the primary engine for the rapid growth in aquatic production. The growth has stimulated agricultural structural adjustment, created employment for rural workers and increased farmers' income.

Potential barriers to the development of aquaculture include the possibility of frequent adjustment of land tenure. Fearing insecure use of land and water resources, farmers may opt to use these resources in an exploitative way. Investment in infrastructure and long-term productivity are thus hindered. The government is expected to keep its land tenure policy stable. For efficient use of land and water resources, a well-defined land tenure system would facilitate the transfer of land use rights, and encourage farmers to increase investment in aquaculture. The analysis also revealed great potential for private sector investment, a vital force in the growth of the fisheries sector. Policy setting should be adjusted to better facilitate private participation, as this would result in efficiency, cost-effectiveness and market responsiveness.

Decentralized management has played an increasing role in China's capture fisheries and aquaculture since the rural economic reforms initiated in the late 1970s, particularly in marine capture fisheries. The number of fishing boats owned by the private sector is now about three times that owned by the government (Gao and Yuan 2000). Under decentralized management, fishers have more rights to make decisions on production and marketing. However, decentralized management in fisheries may lead to excess effort in capture fisheries and difficulty in controlling the number of fishing vessels.

To solve issues caused by decentralized management, local organizations (e. g., fisher organizations and fishery associations) were established (Zhang 2000; Zhai 2001). These local organizations mainly act as coordinators for fish production, processing, and marketing activities. They also provide services such as training and capacity building, and delivering information (e.g. government policies and regulations, market and price information) to the fishers.

In mid-1980s, the fisher associations begun to materialize in Dalian, Liaoning province, a major fish producing province in northeastern China. By 2000, there were 15 town/township-level and 11 village-level fisher associations with 3 700 fishing boats, accounting for about 30% of total fishing vessels in Dalian (Zhai 2001).

In China there is an unfavorable investment policy for the fisheries subsector, since it is regarded as one with comparative advantages over other subsectors in agriculture. Thus there is no specific credit program designed for the subsector, although there is a micro financial/small credit program for poor farmers in rural areas.

In contrast to public investment, the private sector plays an increasingly active role in China's fisheries. Private investment in fisheries has dramatically increased and even dominated investment in fisheries at some places. For instance, during 1998-2000 in Xiangfen, Shanxi province of northern China, more than US$ 1.5 million were invested in eel production by three private entrepreneurs (Liang and Zhang 2001).