- Email: [email protected]
Export market influence on the development of the Pacific shrimp fishery of Sonora, Mexico
ARTICLE IN PRESS
Ocean & Coastal Management 49 (2006) 222–235 www.elsevier.com/locate/ocecoaman
Export market influence on the development of the Pacific shrimp fishery of Sonora, Mexico Lorayne Meltzera,, Jason Oliver Changb a Environmental Studies Faculty, Prescott College, Prescott, AZ 86301, USA Ethnic Studies Doctoral Student, University of California, Berkeley, CA 94729, USA
b
Abstract The Pacific shrimp fishery is the most economically important and ecologically impactful fishery in Mexico. Strong export markets have had a tremendous influence on the technological development and structure of this fishery. This article describes the historical development, current status, ecological impacts and management of the open ocean trawling component of the shrimp fishery in the Sonoran waters of the Gulf of California. We trace the economic factors influencing the development of the Mexican Pacific trawler-based shrimp fishery, with a focus on the port of Guaymas, Sonora, and summarize the events leading to the current overcapitalized and inefficient state of that fishery. The Sonoran shrimp fishery is characterized by high rates of by-catch and a decline in catch per boat trends. A review of economic factors indicates that the decision-making process in this fishery is driven by export markets and does not adequately consider the local ecosystems and fishing communities impacted by shrimp trawling. Management priorities for the fishery include fleet size reduction, habitat protection and alternative technology development. Successful management depends on the participation of powerful export–import companies, along side producers, government resource management agencies, NGOs and scientists. This paper describes recent efforts in collaborative management and calls for the expansion of these efforts. r 2006 Elsevier Ltd. All rights reserved.
1. Introduction The shrimp fishery is the most economically important and ecologically impactful fishery in Mexico [1–3]. This fishery landed 86,772 metric tons (MT) in the year 2002, valued at Corresponding author.
E-mail addresses: [email protected] (L. Meltzer), [email protected] (J.O. Chang). 0964-5691/$ - see front matter r 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.ocecoaman.2006.02.009
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
223
over $5 billion (US) [1]. The shrimp fishery directly or indirectly employs 37,000 people [3]. The Pacific coast fleet produces 77% of Mexico’s shrimp catch. The states of Sonora and Sinaloa produce 77% of the Pacific catch, and register 68% of the boats in the fleet. The ports of Guaymas, Sonora and Mazatlan, Sinoloa, both located in the Gulf of California, are the most significant ports in terms of fleet size and catch amounts (Fig. 1) [1,11]. Over 3 million metric tons of (MT) of shrimp are marketed globally each year. The volume of shrimp that goes to market is dwarfed by the amount of damaged or dead biomass discarded from open ocean shrimp trawlers. According to world averages compiled by the Food and Agriculture Organization of the United Nations (UNFAO), shrimping generates 84% of non-marketable weight, the highest by-catch percentage of any fishing industry [4]. Shrimp trawling gear has been proven to destroy benthic habitat, yet the extent of the impacts of by-catch removal and decomposition on biological diversity and community structure is largely undocumented [4]. The unknown consequences of these ecological alterations contribute to the difficulty of fishery management and conservation [4–6]. The impact of international markets and foreign capital inputs further complicates the analysis of the Pacific shrimp fishery. Strong export markets have had a tremendous influence on the technological development, ecological impact and political structure of the Mexican Pacific shrimp fishery. This paper describes the historical development, current status, management and ecological impacts of the open ocean trawling component of the shrimp fishery in the Sonoran waters of the Gulf of California (Fig. 2). The port of Guaymas, Sonora played a crucial role in the beginning of the industry, establishing the structure and conditions that have led to the current economic and ecological inefficiencies of the fishery. A robust understanding of the Sonoran shrimp fishery provides information needed to clarify the status of the fishery and to inform future research and management of the shrimp fishery in the region. The historical development of the Mexican Pacific shrimp
Mexico Sonora Sinaloa 120000
Metric tons
100000 80000 60000 40000 20000 0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Year
Fig. 1. Mexican, Sonoran and Sinaloan shrimp catch (MT) for 1991–2002 [1,11].
ARTICLE IN PRESS 224
L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
Fig. 2. Map of the Gulf of California and the Guaymas port area.
fishery is characterized by factors of fleet size, ownership, technology, catch trends, political regulations and ecological impacts. The history of the Sonoran fleet illustrates the connection between political challenges, economic conditions and fishery trends. Currently, the most important player in this Mexican fishery, an exporter/importer Ocean Garden Products Inc., is positioned for privatization amidst dramatic changes in the shrimp exporting market environment. In addition, the National Resource Defense Council has gone into partnership with OGP in order to generate better conservation outcomes from the shrimp trawlers in the Gulf of California. The authors hope to decrease the amount of uncertainty in this period of change by providing an analysis of the fishery and its management.
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
225
2. Economic and political development In the 1930s, Japanese, French, Spanish and American investors and operators established a multinational shrimp fishery in the Mexican Pacific. The commingled foreign fleet of trawlers in the Gulf of California initiated the industrial component of the Sonran shrimp fishery in Guaymas. The industrial activity overshadowed the local small-scale artisanal shrimpers, who could not compete with the scale of the trawling fleet. Tensions arose between foreign businesses, with their capital capacity, and the small-scale fishermen, with their need for reliable and economically viable opportunities. The complaints from small-scale fisherman instigated legal and regulatory measures [7]. The Cardenas administration (1934–1940) established the cooperative (cooperativa) system, through the newly formed Fishing Law (Ley de Pesca) and allocated exclusive shrimp fishing rights to cooperative members [3,5]. The cooperative system not only established legal fishing rights, it also allocated low-priced government loans to its members. The cooperative structure was designed to facilitate the Mexican exploitation of shrimp and other fisheries resources [7,8]. The Mexican cooperatives gained legal authority to exploit shrimp, however their catch levels were nowhere near those achieved by the foreign fleets. Their lower production levels created pressure to build capacity in the shrimp industry to enable the development of contracts between Mexican producers and foreign processors and distributors. During the 1940s support industries were emerged to distribute the shrimp from the port of Guaymas to national and international markets. These foreign supported industries included processing, packing, marketing and transporting operations. The low catch levels of the Mexican fleet frustrated the foreign owned support industries, as they were operating under capacity. Then in the 1950s, to relieve the stress between these two entities, the Aleman administration made changes to the Fishing Law [7]. The change to Article 34 authorized the cooperatives to contract with foreign owned industrial businesses to operate or support shrimp trawlers. In 1957, an export–import company called Ocean Gardens Products Inc. (OGP) was established by a group of boat owners finance industrial shrimp trawling. Years later, the Mexican government stepped in to save OGP from bankruptcy. Since that time OGP has remained an American corporation whose shares are owned by the Mexican export finance bank Bancomext. OGP is the largest exporter–importer of shrimp from the Mexico to the United States. Over time, foreign businesses gained legal access to operate within the shrimp fishery at every level. The growing scale of the industry gave increasingly more control to the foreign businesses that could provide the necessary support infrastructure and investment capital. During the 1960s, foreign investment enabled the ports in Puerto Penasco and Yavaros to participate in the expanding shrimp trawling fishery. Demand for shrimp from Gulf of California ports increased at equal or greater rates than supply because of the high quality of the product and the proximity of the ports to the end consumer. In 1992, the new Fishing Law adopted a permit scheme allowing for further private investment in the shrimp fishery [3]. The economic potential of the shrimp industry attracted more foreign investment and other economic improvements. Throughout OGPs role in the Pacific shrimp fishery it has had an unstable footing with complicated financial arrangements. In 1965, Sociedad Mexicana de Credito Industrial (SOMEX) gained ownership of OGP shares by saving OGP from bankruptcy and restructuring the company with federal money to maintain the export of shrimp [22]. In
ARTICLE IN PRESS 226
L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
1971, the company was bought by Productos Pesqueros Mexicanos (PPM) a federally controlled body under the Secretaria de Hacienda y Credito Publico (SCHP) consisting of bureaucrats and industry leaders [22]. In a break up of PPM in 1988 OGP was transferred to Exportadores Asociados (EASA), a subsidiary of PPM [22]. Then, in 1991 SCHP acquired direct authority over EASA and thus OGP, leading to the 1996 direct transfer of shares to the Mexican export finance bank Bancomext, as previously stated. The economic and legal precedence set early in the fishery’s development created the conditions leading to the dependence of the Mexican Pacific shrimp fishery on foreign markets with financial support from both foreign sources of capital and domestic federal monies [22]. 3. Technology A variety of small-scale shrimping technologies have been used since pre-Hispanic times, and continue into the present day. These small-scale efforts historically employed a greater variety of fishing techniques than the modern-day trawling fleet in the Gulf of California. The offshore portion of the Sonoran shrimp fishery began in Guaymas in 1933 with 17 modified sardine boats from California. Later that decade, the Japanese trawling fleet established the primary trawl areas in the Gulf from the port of Guaymas [7,9]. Today, shrimp trawler boats characterize the industrialized offshore Gulf fishery; these are boats from 18 to 23 m long that can remain at sea for more than 15 days. They can trawl from 3 to 60 fathoms with 220 to 620 hp [3]. They are also equipped with navigational instruments, satellite, radar, compass and sonar. Trawlers can hold as much as 100 ton of shrimp chilled in on-board refrigeration systems [3,9]. Two large wooden trawl boards provide the weight and the spreading action that holds the funnel like nets open. These boards facilitate the trawling function of the nets. A chain runs between the trawl boards and is dragged across the sea floor to disturb the shrimp into the sac like net. The first nets used were solitary and 80–120 ft across. In the 1950s, boats switched to twin nets that are 40–45 ft wide (Fig. 3) [9]. During the late 1960s and early 1970s, the mesh size of the nets was reduced, until in 1977 when mesh size was regulated to 2.25 in mesh for the body and wings, and 1.75 in for the sack-like end net [9]. The past 30 yr has seen little change in these boats and their nets.
Fig. 3. Shrimp trawl boat in Bahia de Kino from Guaymas, clearly showing the two sets of trawl boards.
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
227
4. Catch and effort trends The shrimp industry in Sonora attracted workers, investors and other supporting businesses like a gold rush. In a similar manner, the shrimp fishery has shown a boom–bust development pattern. The catch from the port of Guaymas increased steadily until the 1950s, and then became volatile, with a precipitous drop in catch in 1991. The Sonoran total catch steadily increased through the 1990s. The catch from trawl boats has decreased since 1998, while the number of boats in the fleet has increased during the same time period (Fig. 4). The Sonoran fleet is experiencing a decreasing trend in the amount of shrimp caught per boat (Fig. 5) [1,10,11]. The increase in total shrimp catch during the last decade is a direct result of the increasing percentage of the catch produced through aquaculture. During the 1990s, the state’s total trawl catch fluctuated moderately, while the percentage of total Sonoran shrimp catch contributed by trawling fell from 50% in 1991 to 16.8% in 2002 (Fig. 6) [1].
12000
700
10000
600 500
8000
400 6000
300
4000
200
2000 0
# of boats
Catch (MT)
trawl catch # of boats
100 1998
1999
2000 Year
2001
2002
0
Fig. 4. Sonoran catch volume (MT) and fleet size, 1998–2002 [1,11].
25.00
Catch (MT) / Boat
20.00 15.00 10.00 5.00 0.00 1998
1999
2000 Year
2001
2002
Fig. 5. Sonoran catch per boat trends, 1998–2002 [1,11].
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
228
Trawl Artesenal Aguaculture Total 100000
Catch (MT)
80000 60000 40000 20000
02 20
01 20
00 20
99 19
98
97
19
19
96 19
95
94
19
19
93 19
92 19
19
91
0
Year Fig. 6. Total Mexican shrimp catch produced by trawling, artesenal and aquaculture methods [1].
7.00 Dollars / Kilo
6.00 5.00 4.00 3.00 2.00
19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02
1.00 -
Year Fig. 7. Average price per kilo for shrimp exported from Mexico, 1993–2002 [1].
Recently, the increased supply of aquaculture-grown white shrimp (Penaeus vannamei) has helped to drive shrimp prices down. The Guaymas shrimp fishery exhibits characteristics of decreased economic efficiency. Due to the growth in the fleet size in the late 1970s, the catch per boat has remained below the trawl fleet’s capacity. At the same time as the cost of maintaining and operating the fleet increased with rising fuel prices, the catch levels per boat have lowered over time, decreasing the capital return on the catch. Another factor in the changing economic landscape of the Guaymas shrimp fleet is the price per kilogram. The phenomenal development of aquaculture shrimp has flooded the market with cheap shrimp further decreasing the return on catches from trawlers. The price per kilo for shrimp exported from Mexico reached a 10 yr low in the year 2002 (Fig. 7 [11]). The causal links in this economic picture are symptomatic of an unsustainable fishery.
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
229
In 2002, 61% of the boats in the Guaymas’ offshore shrimping fleet were 21–30-yr-old, corresponding to the boost in fleet size in the late 1970s and early 1980s. Also, 79% of the fleet’s boats are between 20 and 25 m in length. A total of 29% of the boats are capable of carrying 60 to 80 MT of refrigerated product, yet on average, the boats from Guaymas catch less than 20 MT a season [1]. The fleet of Guaymas is over-capacity as a remnant from past efforts to maintain catch levels with increased effort. The dominance of older and larger boats defines the Guaymas fleet as inefficient and overcapitalized. The current fleet size can only be sustained through the entry of new boats or higher costs for maintaining old boats. The fishery could increase its economic and ecological efficiency by retiring older boats. 5. Ecological impact The complexity of the shrimp fishery is multiplied by the incomplete understanding of the impacts it has on marine and coastal ecosystems. Scientific understanding of the ecological impacts on biological communities is regionally isolated and focused on particular species [5]. The use of trawling gear has three direct ecosystem effects [5,12]. First, target species are removed and by-catch species are killed or damaged. Shrimp trawling has the highest ratio of discarded biomass of any other fishing industry [4]. In 1979, Young and Romero [13] documented 87 species from 43 families represented in shrimp trawl by-catch samples from the Gulf of California. Second, the dead or damaged biomass from the trawling process increases food availability for scavenger species. Sea lions and sea birds in the Gulf of California feed upon the biomass discarded from the trawlers. Third, the trawling gear physically alters seafloor habitat. The Guaymas Shrimp fisher impacts sandy benthic environments from 6–14 fathoms throughout the Gulf of California. The indirect ecosystem effects are much harder to identify as they include potential alterations in the flow of materials and energy through the ecosystem. These changes impact trophic and community structure and disrupt the balance of primary production, secondary production and primary consumption processes [4,5,12]. Assessing the magnitude of change due to trawling in the Gulf of California is complicated by the lack of data characterizing trawler by-catch, benethic community structure and resilience and pre-trawling ecosystems [12,14]. The shrimp trawling fleet does not affect shrimp populations the same way that it affects benthic or demersal species found in by-catch. The by-catch caught by the Guaymas fleet consists largely of juvenile fish, crustaceans and mollusks. In general, these by-catch species have lower reproductive rates than shrimp, and therefore suffer greater population-level consequences than the target species [15]. Many of the fish species and the crab are target species for small-scale (panga) fisheries in the region. Regional fishermen justifiably blame the shrimp trawlers as a primary factor in the decline of their catches. Given these considerations, marine ecosystem impacts of trawling cannot be extrapolated from current shrimp population monitoring projects, and other fishers’ trends cannot be explained without including the effect of the shrimp trawling fleet [15]. The resilient shrimp populations remain available for exploitation despite seafloor alteration. The Guaymas shrimp fishery impacts sandy bottom benthic environments from 6 to 14 fathoms throughout the Gulf of California, affecting marine ecosystems and the fishing communities supported by them.
ARTICLE IN PRESS 230
L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
6. Influence of export markets in the Mexican Pacific shrimp fishery The development of export markets has played a primary role in supporting the exploitation of Gulf of California shrimp for the exclusive export to the United States. Historical, political and economic developments have favored the growth in shrimp exports as a means to improving foreign exchange between Mexico and the United States. The operation of the Pacific shrimp international export market affects the shrimp fishery in several ways. The economic factors of foreign demand, fishery financing, pricing and buyer–seller relationships influence the capital availability, political climate and social structure within the shrimp fishery. The United States demand for shrimp has tremendous influence over the structure and function of the shrimp export market. Shrimp exporting is a commodity market with weekly, and even daily price fluctuations. The price of shrimp not only depends upon supply and demand relationships, but also on marketing techniques, value, quality and consumer perceptions. Popularity of certain species or sizes of shrimp can cause shortages, thus driving the price up. As this commodity market is international, the currency strengths of the importing countries also determine price. In 2000, the United States imported 760.8 Mlb of shrimp, valued at over $3.8 billion. Shrimp accounts for 37% of total edible fish products imported into the United States. Shrimp is imported from over 50 countries around the world to satisfy an average per capita consumption in the US of 3.2 lb [16]. In the United States 60% of all restaurants carry some sort of shrimp meal, and 20% of all seafood meals ordered contain shrimp [17]. Following canned tuna, shrimp is the most popular seafood product in the United States. It accounts for 50% of all retail seafood sales in the United States. The insatiable American demand has generated an assured market for Mexican shrimp. Mexico’s contribution to total US shrimp consumption is only about 9%, however, the United States holds a 90% market share of all Mexican shrimp exports [11,18,19]. In 2002, Mexico exported 25,000 MT of shrimp, representing 30% of the total Mexican shrimp production for the year. The percentage of export varies with domestic consumption levels and other market conditions; exports as a percentage of total catch have dropped steadily since 1996 (Fig. 8) [1,11]. The most significant factor influencing shrimp export trends is
70.00 Percentage
60.00 50.00 40.00 30.00 20.00 10.00 0.00 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Year Fig. 8. Percentage of shrimp exports to the United States of total shrimp production in Mexico, including aquaculture [1].
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
231
Boat Owners Retailers
Importer /Exporter Boat Operators
End Consumers
Processors OGP Inc. Wholesalers
Box A
Fig. 9. Shrimp product chain of custody in the international export market. The solid lines show entities and direction product flow, while the dashed line shows quality control relationships. The economic relationships in Box A are further explained in Fig. 10.
the development of shrimp aquaculture. Aquaculture facilities now produce more than double the amount produced by small-scale and trawling shrimpers [1,11]. The growth in American tourism in Mexico also demands a domestic supply, thus affecting the flow of shrimp across the border [18]. The increasing foreign and domestic demand supports the Pacific shrimp trawling fishery in its declining state, while encouraging investment in aquaculture. 6.1. Chain of product custody To understand the influence of the United States market on the development of the Pacific shrimp fishery, the chain of custody of the shrimp product must be determined. A description of the general chain of custody extant in importation of Mexican shrimp shows the complex relationships that facilitate the movement of shrimp from the Mexican sea floor to US cocktail glasses. The first link in the chain of custody is the boat owners and operators (Fig. 9). Much of the shrimp will go to the United States and must pass through the US Food and Drug Administration (FDA) which ensures that American health standards are met by Mexican producers. Duties of the crew also include the separation, sorting and preliminary processing of the shrimp, which includes decapitation. Decapitation of the shrimp accounts for a nearly 35% reduction in the animals’ weight and is a considerable loss in value [18]. This processing must be done to ensure an acceptable price for the boats’ catch. Head-on shrimp are worth more in the market, but are harder to preserve because the head contains digestive fluids that would destroy the shrimp if they are not properly chilled and frozen; additionally this niche market has a smaller demand. The frozen shrimp are then sold to processing or packing plants from the dock. The processing plant at port further separates, sorts and processes according to brand name label conditions (Fig. 9). As much of the shrimp that is processed will go to the United States, the US Food and Drug Administration (FDA) oversees American health standards of Mexican producers. The primary concern of the FDA is to prevent the export of shrimp that is not healthy, improperly labeled or inaccurately weighed. If any of these stipulations are broken the United States Department of Commerce (USDC) can step in to enforce fines and other regulatory consequences [18]. Next, the separated, sorted, processed and packaged shrimp product is sold to an importer/exporter (Fig. 9). This is done on either a firm or formula basis (Fig. 10).
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
232
Shrimp Flow $ Flow Value Paid in Full
Firm Basis
X Volume for Y Price
Boat Operators Sell Product to Importer /Exporter
Bought and Shipped to OGP Inc. Border storage Facilities
Processors
Formula Basis X< Volume for 80% of Y Price
80% of Value When formula bought shrimp is sold from OGP Inc. the remaining 20% is awarded to the producer
Operational considerations & buyer seller relationships depend upon catch volume Remaining 20% of Value
Fig. 10. Flow of shrimp and money according to firm and formula basis buying. This represents the commerce occurring within Box A of Fig. 9.
According to the firm basis, shrimp is bought by an importer/exporter at a set price and volume and it is the responsibility of the buyer to ship the product to the border. The other option, the formula basis, allows an importer/exporter to initially buy shrimp from the processor for 80% of a set market price. The formula basis allows the buyer to share the market risk with the processor. In this deal, it is the processor’s responsibility to bring the shrimp product to the border. Once the product is sold, the processor then receives the remainder of the price, so long as the market price has not dropped below 80% of the original market price. This option is more of a gamble to the processor. However, if the volume of the available product from the processor is lower than the amount established by the firm basis, then the formula basis allows the processor to trade the product that they have for 80% of the value, giving them precious operating capital that allows them to continue functioning until the next catch comes into port. Once the shrimp is sold to an exporter–importer the product is then held at storage facilities at one of the various border stations (Nogales, San Diego, Brownsville, El Paso). Ocean Gardens Products Inc. is the primary importer/exporter and the most important link in the chain of custody. Shrimp from the port of Guaymas goes directly to the Nogales storage facility. The transportation is either conducted by the processor or through contracted trucking companies. The next link in the chain of custody is the sale of the stored product to wholesalers or retailers (Figs. 9 and 10). Wholesalers and retailers are the distributing entities that buy the packaged product and sell it to the end consumer. The difference between wholesalers and retailers is scale and end market; wholesalers buy large quantities and may sell them to retailers, while retailers buy smaller quantities and sell them directly to end consumers.
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
233
OGP determines product prices based on factors of market price, supply, demand and velocity of sales [19]. The economic decisions made in the Sonoran shrimp fishery are led by the buying and selling structure of export/import companies like Ocean Gardens Products Inc. and its competitors. Ocean Gardens Products Inc. is the most important buyer of Mexican Pacific shrimp, importing approximately 60% of all shrimp exports from Mexico to the United States [19]. Significantly, OGP Inc. also provides financing for the Pacific shrimp fishery’s operations. Most boat owners cannot provide the capital at the beginning of the season to make needed purchases such as fuel, and net and mechanical repairs. Processors often do not have the capital in the beginning of the season to update equipment to health standards, or to afford repairs. OGP Inc. provides pre-season loans to the boat owners and processors which in turn obligate them to sell their shrimp product exclusively to OGP. The advanced loans to shrimp producers generate a financial obligation in a fishery whose economic efficiency is declining, thus making black market participation and over-fishing attractive options. 7. Government regulation Government management of the Mexican trawl-based shrimp fishery has become more sophisticated since regulation began in 1938. The current management regime implemented by the Mexican fisheries agency CONAPESCA includes seasonal closures, permit requirements, depth restrictions, area closures and gear requirements. These regulations are framed by the Mexican Fishing Law and established within the Norma Oficial Mexicana (NOM-002-PESC-1993). Seasonal closures are determined annually by the National Fisheries Institute with the goal of protecting the growth, recruitment and reproductive period of commercial shrimp species [3]. Closures generally extend from mid March through early September. Trawlers are prohibited in bays and estuaries and must operate at depths greater than 5 fathoms [3]. Seasonal closures are more widely observed and easily monitored than depth and area restrictions. Satellite tracking systems have been installed on many trawlers and their use may increase compliance with these restrictions in the future. Trawling is further restricted in the growing number of protected areas in the Gulf of California, which intensifies competition and decreasing catch per boat trends described earlier. The market structure and production process of the Pacific shrimp fishery makes management goals difficult to achieve for government agencies with insufficient resources. The intrinsic logistical difficulties of monitoring fishing activity and collecting accurate data create obstacles to coordinated management attempts. Gulf of California shrimp fishermen can take advantage of the uncoordinated state of management in several ways, including: participating in black market economic practices; fishing outside of trawling boundaries and exploiting corrupt points in the system. One source estimates that one in three shrimp boats is involved in illegal production [23]. 8. Conclusion Using the UN statistical by-catch ratio, an average of over 150,000 MT of by-catch were discarded each year in Mexico’s shrimp trawling fleet during the years of 1993–2002. The by-catch caught by the Pacific shrimp fleet includes juveniles of particular target species for
ARTICLE IN PRESS 234
L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
small-scale (panga) fisheries in the region. The economically inefficient shrimp trawling fleet is negatively impacting the marine ecosystem that the local communities depend upon for their livelihood. The economic return to fishermen from trawling has declined as catch per boat has dropped and shrimp prices have fallen. Government regulations and management strategies have not adequately addressed broad ecological and economic impacts, and have been insufficient to facilitate an efficient shrimp trawling fishery. In policy terms, this fishery’s inefficiency must be addressed with both market intervention and regulated production processes. These inefficient ecological, economic and management trends result because political decision making in the fishery is based more strongly on economic and market factors than on considerations of ecological consequence, resource availability and coordinated fisheries management. While foreign financial investment has allowed the trawl-based shrimp fishery in the Gulf of California to compete in the international market, these investments have also facilitated the overcapicitation of the fishery despite decreasing economic efficiency at the trawler level. Management for the trawler-based shrimp fishery in the Gulf of California should include:
Fleet size reduction: The reduction of fleet size is likely to simultaneously increase catch per boat trends, and decrease total ecological impact from trawling. A boat buy out program is being considered and piloted by the Mexican government on a scale limited by insufficient funding. Sandy bottom area closures: No-take zones are a proven tool for facilitating recovery of target and non-target species. Local acceptance and enforcement issues make this a difficult goal to achieve. Alternative technology implementation: Turtle exclusion devices (TEDs) are currently displayed on most trawlers in the Gulf. Small-scale experiments with by-catch reduction devices (BRDs) such as shrimp hoppers have been conducted in the Gulf. BRDs have had some success in reducing by-catch ratios in other regions [20,21]. Testing and implementation of the use of BRDs in the Gulf depends on funding and enforcement. Increased scientific information gathering and distribution: The impact of shrimp trawling on small-scale fisheries in the region must be quantified and then considered in management of the trawl-based shrimp fishery. Regionalize OGP privatization: Increased ownership by producers could facilitate a more responsive and accountable fishery management structure.
Achieving sound management goals in this fishery will require coordination between government agencies (CONAPESCA), private companies (OGP), boat owners/operators, scientists and NGOs. Development and implementation of effective management schemes depends upon increased funding, and fuller collection and distribution of data about the fishery and its impacts. Because of their power and influence, export and distribution companies like OGP have the opportunity and responsibility to actively promote and support management goals. In 2005, Ocean Gardens Products Inc. began meeting with fishermen, government resource managers, scientists and conservation organizations to discuss cooperative mechanisms for reducing the impact of small boat (panga) fisheries on the Vaquita in the Upper Gulf. This is a positive model that should be extended to addressing the overcapacity, inefficiency and ecological impact of the trawl-based shrimp
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
235
fishery in other regions of the Gulf. While not discussed in this paper, management of the growing shrimp aquaculture fishery also depends upon corporate participation and cooperative development and implementation of regulations that address broad-based goals of ecological and economic sustainability. Acknowledgements This research and publication grew out of the work that Chang did as his senior project for his undergraduate studies at Prescott College. Chang initiated the primary research, thesis and motivation that led to the multi-year research effort resulting in this publication. References [1] SAGARPA. Anuario Estadı´ stico De Pesca 2002, www.sagarpa.gob.mx. [2] SAGARPA. Instituto Nacional de la Pesca. Ana´lisis de la Temporada de Captura de Camaro´n 2002–2003 en el Pacifico Mexicano; Criterios para el Inicio de la Veda en Aguas Protegidas y Marinas. La Paz, B.C.S.:Dictamen Te´cnico;2003. [3] SAGARPA. Instituto Nacional de la Pesca. Pesquerı´ as del Pacifico:La Pesquerı´ a de Cameron del Pacifico;2005. [4] Hall SJ. The effects of fishing on marine ecosystems and communities. Fish biology and aquatic resources series 1. Cornwall: Blackwell Science Publishing; 1990 [274pp]. [5] Enrique Godı´ nez-Domı´ nguez. Ecologia de las Asociaciones de Macroinvertebrados Bentionicos de Fondos Blandos del Pacifico Central Mexicano. Tesis doctoral, A Corun˜a, Espan˜a, 2003. [6] Vasquez-Leon M. Avoidance strategies and governmental rigidity: the case of the small-scale shrimp fishery in two Mexican communities. Journal of Political Ecology 1999;1:67–82. [7] Martinez SM. Los Diablos De La Pesca. Hermosillo: La Voz De Sonora Publishing; 2000 [235pp]. [8] Bueno RC, Boyer P. Pesando Entre Marea’s: Del Alto Gulfo De California: Una Guia Sobre Le Pesca Artesanal Su Gente y Sus Propuestas De Manejo. Puerto Penasco: CEDO; 1998. [9] Magallon-Barajas FJ. The Pacific shrimp fishery of Mexico. CalCOFI rep., vol. 28, 1987. [10] SEMARNAP. Anuario Estadı´ stico De Pesca 1999, www.semarnap.gob.mx. [11] SAGARPA. Anuario Estadı´ stico De Pesca 2001, www.sagarpa.gob.mx. [12] National Research Council. Effects of trawling and dredging on seafloor habitat: committee on ecosystem effects of fishing: phase 1: effects of bottom trawling on seafloor habitats. Washington DC: National Academy of Science; 2002 [136pp]. [13] Young RH, Romero JM. Variability in the yield and composition of by-catch recovered from Gulf of California shrimping vessels. Tropical Science 1979;21(4):249–64. [14] Burridge CY, Pitcher CR, Wassenberg TJ, Poiner IR, Hill BJ. Measurement of the rate of depletion of benthic fauna by prawn (shrimp) otter trawls: an experiment in the Great Barrier Reef, Australia. Fisheries Research 2003;60:237–53. [15] Dayton PK, Thrush S, Coleman FC. Ecological effects of fishing in marine ecosystems of the United States. Pew oceans commission scientific report, 2003. [16] Holliday MC, O’Bannon BK. Fisheries of the United States 2000: National Marine Fisheries Service Office of Science and Technology Fisheries Statistics and Economics Division. Maryland:Silver Spring; August 2001. [17] Ocean Garden Products Inc. 2002, www.oceangarden.com. [18] Boren R. Personal interview, 3/20/2002. 3585 Corporate Ct., San Diego, CA 92123. [19] Filose J. Personal interview, 11/26/2005. Corporate Ct., San Diego, CA 92123. [20] Hannah RW, Robert, Jones SA. By-catch reduction in an ocean shrimp trawl from a simple modification to the trawl footrope. Journal of Northwest Atlantic Fisheries Science 2000;27:227–33. [21] Clucas I. A Study of the Options for Utilization of By-catch and Discards from Marine Capture Fisheries. FAO Fisheries Circular No. 928 FIIU/C928. 1997. [22] Carvajal P. Ocean garden hunts for new owners. Intrafish, June 2005, http://www.intrafish.no/multimedia/ archive/00005/pdf20050614_5856a.pdf. [23] Lee M. Shrimp trader joins agreement to guard sea life. San Diego Union-Tribune, July 30, 2005.
Ocean & Coastal Management 49 (2006) 222–235 www.elsevier.com/locate/ocecoaman
Export market influence on the development of the Pacific shrimp fishery of Sonora, Mexico Lorayne Meltzera,, Jason Oliver Changb a Environmental Studies Faculty, Prescott College, Prescott, AZ 86301, USA Ethnic Studies Doctoral Student, University of California, Berkeley, CA 94729, USA
b
Abstract The Pacific shrimp fishery is the most economically important and ecologically impactful fishery in Mexico. Strong export markets have had a tremendous influence on the technological development and structure of this fishery. This article describes the historical development, current status, ecological impacts and management of the open ocean trawling component of the shrimp fishery in the Sonoran waters of the Gulf of California. We trace the economic factors influencing the development of the Mexican Pacific trawler-based shrimp fishery, with a focus on the port of Guaymas, Sonora, and summarize the events leading to the current overcapitalized and inefficient state of that fishery. The Sonoran shrimp fishery is characterized by high rates of by-catch and a decline in catch per boat trends. A review of economic factors indicates that the decision-making process in this fishery is driven by export markets and does not adequately consider the local ecosystems and fishing communities impacted by shrimp trawling. Management priorities for the fishery include fleet size reduction, habitat protection and alternative technology development. Successful management depends on the participation of powerful export–import companies, along side producers, government resource management agencies, NGOs and scientists. This paper describes recent efforts in collaborative management and calls for the expansion of these efforts. r 2006 Elsevier Ltd. All rights reserved.
1. Introduction The shrimp fishery is the most economically important and ecologically impactful fishery in Mexico [1–3]. This fishery landed 86,772 metric tons (MT) in the year 2002, valued at Corresponding author.
E-mail addresses: [email protected] (L. Meltzer), [email protected] (J.O. Chang). 0964-5691/$ - see front matter r 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.ocecoaman.2006.02.009
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
223
over $5 billion (US) [1]. The shrimp fishery directly or indirectly employs 37,000 people [3]. The Pacific coast fleet produces 77% of Mexico’s shrimp catch. The states of Sonora and Sinaloa produce 77% of the Pacific catch, and register 68% of the boats in the fleet. The ports of Guaymas, Sonora and Mazatlan, Sinoloa, both located in the Gulf of California, are the most significant ports in terms of fleet size and catch amounts (Fig. 1) [1,11]. Over 3 million metric tons of (MT) of shrimp are marketed globally each year. The volume of shrimp that goes to market is dwarfed by the amount of damaged or dead biomass discarded from open ocean shrimp trawlers. According to world averages compiled by the Food and Agriculture Organization of the United Nations (UNFAO), shrimping generates 84% of non-marketable weight, the highest by-catch percentage of any fishing industry [4]. Shrimp trawling gear has been proven to destroy benthic habitat, yet the extent of the impacts of by-catch removal and decomposition on biological diversity and community structure is largely undocumented [4]. The unknown consequences of these ecological alterations contribute to the difficulty of fishery management and conservation [4–6]. The impact of international markets and foreign capital inputs further complicates the analysis of the Pacific shrimp fishery. Strong export markets have had a tremendous influence on the technological development, ecological impact and political structure of the Mexican Pacific shrimp fishery. This paper describes the historical development, current status, management and ecological impacts of the open ocean trawling component of the shrimp fishery in the Sonoran waters of the Gulf of California (Fig. 2). The port of Guaymas, Sonora played a crucial role in the beginning of the industry, establishing the structure and conditions that have led to the current economic and ecological inefficiencies of the fishery. A robust understanding of the Sonoran shrimp fishery provides information needed to clarify the status of the fishery and to inform future research and management of the shrimp fishery in the region. The historical development of the Mexican Pacific shrimp
Mexico Sonora Sinaloa 120000
Metric tons
100000 80000 60000 40000 20000 0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Year
Fig. 1. Mexican, Sonoran and Sinaloan shrimp catch (MT) for 1991–2002 [1,11].
ARTICLE IN PRESS 224
L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
Fig. 2. Map of the Gulf of California and the Guaymas port area.
fishery is characterized by factors of fleet size, ownership, technology, catch trends, political regulations and ecological impacts. The history of the Sonoran fleet illustrates the connection between political challenges, economic conditions and fishery trends. Currently, the most important player in this Mexican fishery, an exporter/importer Ocean Garden Products Inc., is positioned for privatization amidst dramatic changes in the shrimp exporting market environment. In addition, the National Resource Defense Council has gone into partnership with OGP in order to generate better conservation outcomes from the shrimp trawlers in the Gulf of California. The authors hope to decrease the amount of uncertainty in this period of change by providing an analysis of the fishery and its management.
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
225
2. Economic and political development In the 1930s, Japanese, French, Spanish and American investors and operators established a multinational shrimp fishery in the Mexican Pacific. The commingled foreign fleet of trawlers in the Gulf of California initiated the industrial component of the Sonran shrimp fishery in Guaymas. The industrial activity overshadowed the local small-scale artisanal shrimpers, who could not compete with the scale of the trawling fleet. Tensions arose between foreign businesses, with their capital capacity, and the small-scale fishermen, with their need for reliable and economically viable opportunities. The complaints from small-scale fisherman instigated legal and regulatory measures [7]. The Cardenas administration (1934–1940) established the cooperative (cooperativa) system, through the newly formed Fishing Law (Ley de Pesca) and allocated exclusive shrimp fishing rights to cooperative members [3,5]. The cooperative system not only established legal fishing rights, it also allocated low-priced government loans to its members. The cooperative structure was designed to facilitate the Mexican exploitation of shrimp and other fisheries resources [7,8]. The Mexican cooperatives gained legal authority to exploit shrimp, however their catch levels were nowhere near those achieved by the foreign fleets. Their lower production levels created pressure to build capacity in the shrimp industry to enable the development of contracts between Mexican producers and foreign processors and distributors. During the 1940s support industries were emerged to distribute the shrimp from the port of Guaymas to national and international markets. These foreign supported industries included processing, packing, marketing and transporting operations. The low catch levels of the Mexican fleet frustrated the foreign owned support industries, as they were operating under capacity. Then in the 1950s, to relieve the stress between these two entities, the Aleman administration made changes to the Fishing Law [7]. The change to Article 34 authorized the cooperatives to contract with foreign owned industrial businesses to operate or support shrimp trawlers. In 1957, an export–import company called Ocean Gardens Products Inc. (OGP) was established by a group of boat owners finance industrial shrimp trawling. Years later, the Mexican government stepped in to save OGP from bankruptcy. Since that time OGP has remained an American corporation whose shares are owned by the Mexican export finance bank Bancomext. OGP is the largest exporter–importer of shrimp from the Mexico to the United States. Over time, foreign businesses gained legal access to operate within the shrimp fishery at every level. The growing scale of the industry gave increasingly more control to the foreign businesses that could provide the necessary support infrastructure and investment capital. During the 1960s, foreign investment enabled the ports in Puerto Penasco and Yavaros to participate in the expanding shrimp trawling fishery. Demand for shrimp from Gulf of California ports increased at equal or greater rates than supply because of the high quality of the product and the proximity of the ports to the end consumer. In 1992, the new Fishing Law adopted a permit scheme allowing for further private investment in the shrimp fishery [3]. The economic potential of the shrimp industry attracted more foreign investment and other economic improvements. Throughout OGPs role in the Pacific shrimp fishery it has had an unstable footing with complicated financial arrangements. In 1965, Sociedad Mexicana de Credito Industrial (SOMEX) gained ownership of OGP shares by saving OGP from bankruptcy and restructuring the company with federal money to maintain the export of shrimp [22]. In
ARTICLE IN PRESS 226
L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
1971, the company was bought by Productos Pesqueros Mexicanos (PPM) a federally controlled body under the Secretaria de Hacienda y Credito Publico (SCHP) consisting of bureaucrats and industry leaders [22]. In a break up of PPM in 1988 OGP was transferred to Exportadores Asociados (EASA), a subsidiary of PPM [22]. Then, in 1991 SCHP acquired direct authority over EASA and thus OGP, leading to the 1996 direct transfer of shares to the Mexican export finance bank Bancomext, as previously stated. The economic and legal precedence set early in the fishery’s development created the conditions leading to the dependence of the Mexican Pacific shrimp fishery on foreign markets with financial support from both foreign sources of capital and domestic federal monies [22]. 3. Technology A variety of small-scale shrimping technologies have been used since pre-Hispanic times, and continue into the present day. These small-scale efforts historically employed a greater variety of fishing techniques than the modern-day trawling fleet in the Gulf of California. The offshore portion of the Sonoran shrimp fishery began in Guaymas in 1933 with 17 modified sardine boats from California. Later that decade, the Japanese trawling fleet established the primary trawl areas in the Gulf from the port of Guaymas [7,9]. Today, shrimp trawler boats characterize the industrialized offshore Gulf fishery; these are boats from 18 to 23 m long that can remain at sea for more than 15 days. They can trawl from 3 to 60 fathoms with 220 to 620 hp [3]. They are also equipped with navigational instruments, satellite, radar, compass and sonar. Trawlers can hold as much as 100 ton of shrimp chilled in on-board refrigeration systems [3,9]. Two large wooden trawl boards provide the weight and the spreading action that holds the funnel like nets open. These boards facilitate the trawling function of the nets. A chain runs between the trawl boards and is dragged across the sea floor to disturb the shrimp into the sac like net. The first nets used were solitary and 80–120 ft across. In the 1950s, boats switched to twin nets that are 40–45 ft wide (Fig. 3) [9]. During the late 1960s and early 1970s, the mesh size of the nets was reduced, until in 1977 when mesh size was regulated to 2.25 in mesh for the body and wings, and 1.75 in for the sack-like end net [9]. The past 30 yr has seen little change in these boats and their nets.
Fig. 3. Shrimp trawl boat in Bahia de Kino from Guaymas, clearly showing the two sets of trawl boards.
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
227
4. Catch and effort trends The shrimp industry in Sonora attracted workers, investors and other supporting businesses like a gold rush. In a similar manner, the shrimp fishery has shown a boom–bust development pattern. The catch from the port of Guaymas increased steadily until the 1950s, and then became volatile, with a precipitous drop in catch in 1991. The Sonoran total catch steadily increased through the 1990s. The catch from trawl boats has decreased since 1998, while the number of boats in the fleet has increased during the same time period (Fig. 4). The Sonoran fleet is experiencing a decreasing trend in the amount of shrimp caught per boat (Fig. 5) [1,10,11]. The increase in total shrimp catch during the last decade is a direct result of the increasing percentage of the catch produced through aquaculture. During the 1990s, the state’s total trawl catch fluctuated moderately, while the percentage of total Sonoran shrimp catch contributed by trawling fell from 50% in 1991 to 16.8% in 2002 (Fig. 6) [1].
12000
700
10000
600 500
8000
400 6000
300
4000
200
2000 0
# of boats
Catch (MT)
trawl catch # of boats
100 1998
1999
2000 Year
2001
2002
0
Fig. 4. Sonoran catch volume (MT) and fleet size, 1998–2002 [1,11].
25.00
Catch (MT) / Boat
20.00 15.00 10.00 5.00 0.00 1998
1999
2000 Year
2001
2002
Fig. 5. Sonoran catch per boat trends, 1998–2002 [1,11].
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
228
Trawl Artesenal Aguaculture Total 100000
Catch (MT)
80000 60000 40000 20000
02 20
01 20
00 20
99 19
98
97
19
19
96 19
95
94
19
19
93 19
92 19
19
91
0
Year Fig. 6. Total Mexican shrimp catch produced by trawling, artesenal and aquaculture methods [1].
7.00 Dollars / Kilo
6.00 5.00 4.00 3.00 2.00
19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02
1.00 -
Year Fig. 7. Average price per kilo for shrimp exported from Mexico, 1993–2002 [1].
Recently, the increased supply of aquaculture-grown white shrimp (Penaeus vannamei) has helped to drive shrimp prices down. The Guaymas shrimp fishery exhibits characteristics of decreased economic efficiency. Due to the growth in the fleet size in the late 1970s, the catch per boat has remained below the trawl fleet’s capacity. At the same time as the cost of maintaining and operating the fleet increased with rising fuel prices, the catch levels per boat have lowered over time, decreasing the capital return on the catch. Another factor in the changing economic landscape of the Guaymas shrimp fleet is the price per kilogram. The phenomenal development of aquaculture shrimp has flooded the market with cheap shrimp further decreasing the return on catches from trawlers. The price per kilo for shrimp exported from Mexico reached a 10 yr low in the year 2002 (Fig. 7 [11]). The causal links in this economic picture are symptomatic of an unsustainable fishery.
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
229
In 2002, 61% of the boats in the Guaymas’ offshore shrimping fleet were 21–30-yr-old, corresponding to the boost in fleet size in the late 1970s and early 1980s. Also, 79% of the fleet’s boats are between 20 and 25 m in length. A total of 29% of the boats are capable of carrying 60 to 80 MT of refrigerated product, yet on average, the boats from Guaymas catch less than 20 MT a season [1]. The fleet of Guaymas is over-capacity as a remnant from past efforts to maintain catch levels with increased effort. The dominance of older and larger boats defines the Guaymas fleet as inefficient and overcapitalized. The current fleet size can only be sustained through the entry of new boats or higher costs for maintaining old boats. The fishery could increase its economic and ecological efficiency by retiring older boats. 5. Ecological impact The complexity of the shrimp fishery is multiplied by the incomplete understanding of the impacts it has on marine and coastal ecosystems. Scientific understanding of the ecological impacts on biological communities is regionally isolated and focused on particular species [5]. The use of trawling gear has three direct ecosystem effects [5,12]. First, target species are removed and by-catch species are killed or damaged. Shrimp trawling has the highest ratio of discarded biomass of any other fishing industry [4]. In 1979, Young and Romero [13] documented 87 species from 43 families represented in shrimp trawl by-catch samples from the Gulf of California. Second, the dead or damaged biomass from the trawling process increases food availability for scavenger species. Sea lions and sea birds in the Gulf of California feed upon the biomass discarded from the trawlers. Third, the trawling gear physically alters seafloor habitat. The Guaymas Shrimp fisher impacts sandy benthic environments from 6–14 fathoms throughout the Gulf of California. The indirect ecosystem effects are much harder to identify as they include potential alterations in the flow of materials and energy through the ecosystem. These changes impact trophic and community structure and disrupt the balance of primary production, secondary production and primary consumption processes [4,5,12]. Assessing the magnitude of change due to trawling in the Gulf of California is complicated by the lack of data characterizing trawler by-catch, benethic community structure and resilience and pre-trawling ecosystems [12,14]. The shrimp trawling fleet does not affect shrimp populations the same way that it affects benthic or demersal species found in by-catch. The by-catch caught by the Guaymas fleet consists largely of juvenile fish, crustaceans and mollusks. In general, these by-catch species have lower reproductive rates than shrimp, and therefore suffer greater population-level consequences than the target species [15]. Many of the fish species and the crab are target species for small-scale (panga) fisheries in the region. Regional fishermen justifiably blame the shrimp trawlers as a primary factor in the decline of their catches. Given these considerations, marine ecosystem impacts of trawling cannot be extrapolated from current shrimp population monitoring projects, and other fishers’ trends cannot be explained without including the effect of the shrimp trawling fleet [15]. The resilient shrimp populations remain available for exploitation despite seafloor alteration. The Guaymas shrimp fishery impacts sandy bottom benthic environments from 6 to 14 fathoms throughout the Gulf of California, affecting marine ecosystems and the fishing communities supported by them.
ARTICLE IN PRESS 230
L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
6. Influence of export markets in the Mexican Pacific shrimp fishery The development of export markets has played a primary role in supporting the exploitation of Gulf of California shrimp for the exclusive export to the United States. Historical, political and economic developments have favored the growth in shrimp exports as a means to improving foreign exchange between Mexico and the United States. The operation of the Pacific shrimp international export market affects the shrimp fishery in several ways. The economic factors of foreign demand, fishery financing, pricing and buyer–seller relationships influence the capital availability, political climate and social structure within the shrimp fishery. The United States demand for shrimp has tremendous influence over the structure and function of the shrimp export market. Shrimp exporting is a commodity market with weekly, and even daily price fluctuations. The price of shrimp not only depends upon supply and demand relationships, but also on marketing techniques, value, quality and consumer perceptions. Popularity of certain species or sizes of shrimp can cause shortages, thus driving the price up. As this commodity market is international, the currency strengths of the importing countries also determine price. In 2000, the United States imported 760.8 Mlb of shrimp, valued at over $3.8 billion. Shrimp accounts for 37% of total edible fish products imported into the United States. Shrimp is imported from over 50 countries around the world to satisfy an average per capita consumption in the US of 3.2 lb [16]. In the United States 60% of all restaurants carry some sort of shrimp meal, and 20% of all seafood meals ordered contain shrimp [17]. Following canned tuna, shrimp is the most popular seafood product in the United States. It accounts for 50% of all retail seafood sales in the United States. The insatiable American demand has generated an assured market for Mexican shrimp. Mexico’s contribution to total US shrimp consumption is only about 9%, however, the United States holds a 90% market share of all Mexican shrimp exports [11,18,19]. In 2002, Mexico exported 25,000 MT of shrimp, representing 30% of the total Mexican shrimp production for the year. The percentage of export varies with domestic consumption levels and other market conditions; exports as a percentage of total catch have dropped steadily since 1996 (Fig. 8) [1,11]. The most significant factor influencing shrimp export trends is
70.00 Percentage
60.00 50.00 40.00 30.00 20.00 10.00 0.00 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Year Fig. 8. Percentage of shrimp exports to the United States of total shrimp production in Mexico, including aquaculture [1].
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
231
Boat Owners Retailers
Importer /Exporter Boat Operators
End Consumers
Processors OGP Inc. Wholesalers
Box A
Fig. 9. Shrimp product chain of custody in the international export market. The solid lines show entities and direction product flow, while the dashed line shows quality control relationships. The economic relationships in Box A are further explained in Fig. 10.
the development of shrimp aquaculture. Aquaculture facilities now produce more than double the amount produced by small-scale and trawling shrimpers [1,11]. The growth in American tourism in Mexico also demands a domestic supply, thus affecting the flow of shrimp across the border [18]. The increasing foreign and domestic demand supports the Pacific shrimp trawling fishery in its declining state, while encouraging investment in aquaculture. 6.1. Chain of product custody To understand the influence of the United States market on the development of the Pacific shrimp fishery, the chain of custody of the shrimp product must be determined. A description of the general chain of custody extant in importation of Mexican shrimp shows the complex relationships that facilitate the movement of shrimp from the Mexican sea floor to US cocktail glasses. The first link in the chain of custody is the boat owners and operators (Fig. 9). Much of the shrimp will go to the United States and must pass through the US Food and Drug Administration (FDA) which ensures that American health standards are met by Mexican producers. Duties of the crew also include the separation, sorting and preliminary processing of the shrimp, which includes decapitation. Decapitation of the shrimp accounts for a nearly 35% reduction in the animals’ weight and is a considerable loss in value [18]. This processing must be done to ensure an acceptable price for the boats’ catch. Head-on shrimp are worth more in the market, but are harder to preserve because the head contains digestive fluids that would destroy the shrimp if they are not properly chilled and frozen; additionally this niche market has a smaller demand. The frozen shrimp are then sold to processing or packing plants from the dock. The processing plant at port further separates, sorts and processes according to brand name label conditions (Fig. 9). As much of the shrimp that is processed will go to the United States, the US Food and Drug Administration (FDA) oversees American health standards of Mexican producers. The primary concern of the FDA is to prevent the export of shrimp that is not healthy, improperly labeled or inaccurately weighed. If any of these stipulations are broken the United States Department of Commerce (USDC) can step in to enforce fines and other regulatory consequences [18]. Next, the separated, sorted, processed and packaged shrimp product is sold to an importer/exporter (Fig. 9). This is done on either a firm or formula basis (Fig. 10).
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
232
Shrimp Flow $ Flow Value Paid in Full
Firm Basis
X Volume for Y Price
Boat Operators Sell Product to Importer /Exporter
Bought and Shipped to OGP Inc. Border storage Facilities
Processors
Formula Basis X< Volume for 80% of Y Price
80% of Value When formula bought shrimp is sold from OGP Inc. the remaining 20% is awarded to the producer
Operational considerations & buyer seller relationships depend upon catch volume Remaining 20% of Value
Fig. 10. Flow of shrimp and money according to firm and formula basis buying. This represents the commerce occurring within Box A of Fig. 9.
According to the firm basis, shrimp is bought by an importer/exporter at a set price and volume and it is the responsibility of the buyer to ship the product to the border. The other option, the formula basis, allows an importer/exporter to initially buy shrimp from the processor for 80% of a set market price. The formula basis allows the buyer to share the market risk with the processor. In this deal, it is the processor’s responsibility to bring the shrimp product to the border. Once the product is sold, the processor then receives the remainder of the price, so long as the market price has not dropped below 80% of the original market price. This option is more of a gamble to the processor. However, if the volume of the available product from the processor is lower than the amount established by the firm basis, then the formula basis allows the processor to trade the product that they have for 80% of the value, giving them precious operating capital that allows them to continue functioning until the next catch comes into port. Once the shrimp is sold to an exporter–importer the product is then held at storage facilities at one of the various border stations (Nogales, San Diego, Brownsville, El Paso). Ocean Gardens Products Inc. is the primary importer/exporter and the most important link in the chain of custody. Shrimp from the port of Guaymas goes directly to the Nogales storage facility. The transportation is either conducted by the processor or through contracted trucking companies. The next link in the chain of custody is the sale of the stored product to wholesalers or retailers (Figs. 9 and 10). Wholesalers and retailers are the distributing entities that buy the packaged product and sell it to the end consumer. The difference between wholesalers and retailers is scale and end market; wholesalers buy large quantities and may sell them to retailers, while retailers buy smaller quantities and sell them directly to end consumers.
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
233
OGP determines product prices based on factors of market price, supply, demand and velocity of sales [19]. The economic decisions made in the Sonoran shrimp fishery are led by the buying and selling structure of export/import companies like Ocean Gardens Products Inc. and its competitors. Ocean Gardens Products Inc. is the most important buyer of Mexican Pacific shrimp, importing approximately 60% of all shrimp exports from Mexico to the United States [19]. Significantly, OGP Inc. also provides financing for the Pacific shrimp fishery’s operations. Most boat owners cannot provide the capital at the beginning of the season to make needed purchases such as fuel, and net and mechanical repairs. Processors often do not have the capital in the beginning of the season to update equipment to health standards, or to afford repairs. OGP Inc. provides pre-season loans to the boat owners and processors which in turn obligate them to sell their shrimp product exclusively to OGP. The advanced loans to shrimp producers generate a financial obligation in a fishery whose economic efficiency is declining, thus making black market participation and over-fishing attractive options. 7. Government regulation Government management of the Mexican trawl-based shrimp fishery has become more sophisticated since regulation began in 1938. The current management regime implemented by the Mexican fisheries agency CONAPESCA includes seasonal closures, permit requirements, depth restrictions, area closures and gear requirements. These regulations are framed by the Mexican Fishing Law and established within the Norma Oficial Mexicana (NOM-002-PESC-1993). Seasonal closures are determined annually by the National Fisheries Institute with the goal of protecting the growth, recruitment and reproductive period of commercial shrimp species [3]. Closures generally extend from mid March through early September. Trawlers are prohibited in bays and estuaries and must operate at depths greater than 5 fathoms [3]. Seasonal closures are more widely observed and easily monitored than depth and area restrictions. Satellite tracking systems have been installed on many trawlers and their use may increase compliance with these restrictions in the future. Trawling is further restricted in the growing number of protected areas in the Gulf of California, which intensifies competition and decreasing catch per boat trends described earlier. The market structure and production process of the Pacific shrimp fishery makes management goals difficult to achieve for government agencies with insufficient resources. The intrinsic logistical difficulties of monitoring fishing activity and collecting accurate data create obstacles to coordinated management attempts. Gulf of California shrimp fishermen can take advantage of the uncoordinated state of management in several ways, including: participating in black market economic practices; fishing outside of trawling boundaries and exploiting corrupt points in the system. One source estimates that one in three shrimp boats is involved in illegal production [23]. 8. Conclusion Using the UN statistical by-catch ratio, an average of over 150,000 MT of by-catch were discarded each year in Mexico’s shrimp trawling fleet during the years of 1993–2002. The by-catch caught by the Pacific shrimp fleet includes juveniles of particular target species for
ARTICLE IN PRESS 234
L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
small-scale (panga) fisheries in the region. The economically inefficient shrimp trawling fleet is negatively impacting the marine ecosystem that the local communities depend upon for their livelihood. The economic return to fishermen from trawling has declined as catch per boat has dropped and shrimp prices have fallen. Government regulations and management strategies have not adequately addressed broad ecological and economic impacts, and have been insufficient to facilitate an efficient shrimp trawling fishery. In policy terms, this fishery’s inefficiency must be addressed with both market intervention and regulated production processes. These inefficient ecological, economic and management trends result because political decision making in the fishery is based more strongly on economic and market factors than on considerations of ecological consequence, resource availability and coordinated fisheries management. While foreign financial investment has allowed the trawl-based shrimp fishery in the Gulf of California to compete in the international market, these investments have also facilitated the overcapicitation of the fishery despite decreasing economic efficiency at the trawler level. Management for the trawler-based shrimp fishery in the Gulf of California should include:
Fleet size reduction: The reduction of fleet size is likely to simultaneously increase catch per boat trends, and decrease total ecological impact from trawling. A boat buy out program is being considered and piloted by the Mexican government on a scale limited by insufficient funding. Sandy bottom area closures: No-take zones are a proven tool for facilitating recovery of target and non-target species. Local acceptance and enforcement issues make this a difficult goal to achieve. Alternative technology implementation: Turtle exclusion devices (TEDs) are currently displayed on most trawlers in the Gulf. Small-scale experiments with by-catch reduction devices (BRDs) such as shrimp hoppers have been conducted in the Gulf. BRDs have had some success in reducing by-catch ratios in other regions [20,21]. Testing and implementation of the use of BRDs in the Gulf depends on funding and enforcement. Increased scientific information gathering and distribution: The impact of shrimp trawling on small-scale fisheries in the region must be quantified and then considered in management of the trawl-based shrimp fishery. Regionalize OGP privatization: Increased ownership by producers could facilitate a more responsive and accountable fishery management structure.
Achieving sound management goals in this fishery will require coordination between government agencies (CONAPESCA), private companies (OGP), boat owners/operators, scientists and NGOs. Development and implementation of effective management schemes depends upon increased funding, and fuller collection and distribution of data about the fishery and its impacts. Because of their power and influence, export and distribution companies like OGP have the opportunity and responsibility to actively promote and support management goals. In 2005, Ocean Gardens Products Inc. began meeting with fishermen, government resource managers, scientists and conservation organizations to discuss cooperative mechanisms for reducing the impact of small boat (panga) fisheries on the Vaquita in the Upper Gulf. This is a positive model that should be extended to addressing the overcapacity, inefficiency and ecological impact of the trawl-based shrimp
ARTICLE IN PRESS L. Meltzer, J.O. Chang / Ocean & Coastal Management 49 (2006) 222–235
235
fishery in other regions of the Gulf. While not discussed in this paper, management of the growing shrimp aquaculture fishery also depends upon corporate participation and cooperative development and implementation of regulations that address broad-based goals of ecological and economic sustainability. Acknowledgements This research and publication grew out of the work that Chang did as his senior project for his undergraduate studies at Prescott College. Chang initiated the primary research, thesis and motivation that led to the multi-year research effort resulting in this publication. References [1] SAGARPA. Anuario Estadı´ stico De Pesca 2002, www.sagarpa.gob.mx. [2] SAGARPA. Instituto Nacional de la Pesca. Ana´lisis de la Temporada de Captura de Camaro´n 2002–2003 en el Pacifico Mexicano; Criterios para el Inicio de la Veda en Aguas Protegidas y Marinas. La Paz, B.C.S.:Dictamen Te´cnico;2003. [3] SAGARPA. Instituto Nacional de la Pesca. Pesquerı´ as del Pacifico:La Pesquerı´ a de Cameron del Pacifico;2005. [4] Hall SJ. The effects of fishing on marine ecosystems and communities. Fish biology and aquatic resources series 1. Cornwall: Blackwell Science Publishing; 1990 [274pp]. [5] Enrique Godı´ nez-Domı´ nguez. Ecologia de las Asociaciones de Macroinvertebrados Bentionicos de Fondos Blandos del Pacifico Central Mexicano. Tesis doctoral, A Corun˜a, Espan˜a, 2003. [6] Vasquez-Leon M. Avoidance strategies and governmental rigidity: the case of the small-scale shrimp fishery in two Mexican communities. Journal of Political Ecology 1999;1:67–82. [7] Martinez SM. Los Diablos De La Pesca. Hermosillo: La Voz De Sonora Publishing; 2000 [235pp]. [8] Bueno RC, Boyer P. Pesando Entre Marea’s: Del Alto Gulfo De California: Una Guia Sobre Le Pesca Artesanal Su Gente y Sus Propuestas De Manejo. Puerto Penasco: CEDO; 1998. [9] Magallon-Barajas FJ. The Pacific shrimp fishery of Mexico. CalCOFI rep., vol. 28, 1987. [10] SEMARNAP. Anuario Estadı´ stico De Pesca 1999, www.semarnap.gob.mx. [11] SAGARPA. Anuario Estadı´ stico De Pesca 2001, www.sagarpa.gob.mx. [12] National Research Council. Effects of trawling and dredging on seafloor habitat: committee on ecosystem effects of fishing: phase 1: effects of bottom trawling on seafloor habitats. Washington DC: National Academy of Science; 2002 [136pp]. [13] Young RH, Romero JM. Variability in the yield and composition of by-catch recovered from Gulf of California shrimping vessels. Tropical Science 1979;21(4):249–64. [14] Burridge CY, Pitcher CR, Wassenberg TJ, Poiner IR, Hill BJ. Measurement of the rate of depletion of benthic fauna by prawn (shrimp) otter trawls: an experiment in the Great Barrier Reef, Australia. Fisheries Research 2003;60:237–53. [15] Dayton PK, Thrush S, Coleman FC. Ecological effects of fishing in marine ecosystems of the United States. Pew oceans commission scientific report, 2003. [16] Holliday MC, O’Bannon BK. Fisheries of the United States 2000: National Marine Fisheries Service Office of Science and Technology Fisheries Statistics and Economics Division. Maryland:Silver Spring; August 2001. [17] Ocean Garden Products Inc. 2002, www.oceangarden.com. [18] Boren R. Personal interview, 3/20/2002. 3585 Corporate Ct., San Diego, CA 92123. [19] Filose J. Personal interview, 11/26/2005. Corporate Ct., San Diego, CA 92123. [20] Hannah RW, Robert, Jones SA. By-catch reduction in an ocean shrimp trawl from a simple modification to the trawl footrope. Journal of Northwest Atlantic Fisheries Science 2000;27:227–33. [21] Clucas I. A Study of the Options for Utilization of By-catch and Discards from Marine Capture Fisheries. FAO Fisheries Circular No. 928 FIIU/C928. 1997. [22] Carvajal P. Ocean garden hunts for new owners. Intrafish, June 2005, http://www.intrafish.no/multimedia/ archive/00005/pdf20050614_5856a.pdf. [23] Lee M. Shrimp trader joins agreement to guard sea life. San Diego Union-Tribune, July 30, 2005.