Development of Microfinance Services for Coastal Small Scale Fisheries and Aquaculture in India | Part 1: The Travails
Agriculture still is a significant source of livelihood in the countries of South Asian region. The pressure on farm sector has however been increasing due to multiple reasons: lower yield, fragmentation of land holdings, poor irrigation, depletion of ground water, inadequate extension services / supply of inputs, poor post harvest management, lack of value addition at the producers level and a long supply chain involving a number of intermediaries. The resultant woes, unemployment / underemployment, migration to cities in search of a better life.
There is a strong need to assist the farmers to increase productivity to move up the value chain in stimulating the farm economy and employment demand. Interventions such as, establishing market linkages, providing access to micro credit, creation of irrigation facilities/ rain water harvesting structures, efficient water use through micro-irrigation, managing natural resources efficiently etc. can generate better farm as well as non farm sector yields and change the rural landscape for better.
Dr. Subir Ghosh, who has worked extensively on the management side of agriculture and allied sectors, in his following series of articles, writes to offer sustainable agricultural practices in this context.
The travails: Fish workers in the small scale fisheries sector in India has always been very poor and amongst the most marginalized communities. Their low social status is a result of poverty as well as exploitation by middlemen and merchants. Middlemen have control over credit and fish marketing, which drains away the surplus generated and often make them indebted for life.
A combination of variability in catch, technology upgrades, over capitalization, rising costs, aggressive fishing, overcrowding, etc. have made economics of fishing and fishing related occupations uncertain. The overall output remains almost same but the investment and operational costs have gone up considerably. This has resulted in fishermen getting increasingly dependent on loans to finance their expenditures and also using loans as coping mechanism. The key expenditures include: i. capital expenditure towards purchase of boats, launches, nets and engines, etc. ii. running expenses which include boat, net and engine repairs, ice, fuel and goods, etc. and iii. other expenditure involving medical, emergency and other expenditure for family including education.
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- The travails . . .
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- A sleepy fishing hamlet with its fishing fleet
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- It is a team work
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- A perfect fishing day
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- Return with the day’s catch
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- The shark on land waiting for the catch
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- A very good catch but will it fetch enough?
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- The price for prime quality is predetermined
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- The price is dictated by repayment burden
Available data indicate that small scale fish workers cannot access formal institutional credit except through intermediary peoples organizations (SIFFS), State cooperatives (Matysafed), NGOs, MFIs (Dhan, ICNW, Sneha, Shanti Dhan, SKS, IASC, etc) and SHGs. in India. The lone exception seems to be gold loans for which the fishing community accesses banks quite easily and directly. People still rely on money lenders, financiers, chit funds, borrowings from friends and relatives for raising funds for life cycle needs, housing, education of children, setbacks and emergencies, etc. In many cases, even for production purposes, they have to rely on informal money markets including traders, merchant and money lenders. The situation in Bangladesh is better with the involvement of Grameen Bank offering various microfinance products and services.
Banks are not ready to cater the increasing credit needs of the fish workers because they do not have any collateral security. In the absence of adequate institutional credit, the fisher folk’s only recourse is the informal credit system for which the fishermen have to pay a heavy price in terms of high interest outgo as well as selling the prime quality catch at a predetermined rate, that may be half the market price. Besides, the operations involving high risks to life, asset and uncertainties in terms of availability of catch and market related vagaries, have no insurance/ social security to fall back upon. The various credit plus services are almost nonexistent. 
To be continued …
