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Fishing for a sustainable future

Interview - February 8, 2012
After oil, fish is the number one earner of foreign currency in Oman. H.E. Dr. Hamed Said Al-Oufi, Undersecretary for Fisheries at the Ministry of Agriculture & Fisheries, discusses the importance of this ancient business to modern-day Oman

In order to understand the importance of fisheries for Oman, it is important to know that until oil was discovered in 1964, 80% of the population lived from agriculture and fishing along the 1,700km long coastline of the Sultanate. How did the discovery of oil impact the traditional lifestyle in Oman and how has fisheries evolved since then?  

Oman is a maritime nation facing the Indian Ocean, Arabian Sea and the Sea of Oman. We have a long history of maritime activities and Omani sailors were famous for reaching China, other places in Asia, East Africa, and the Indian Subcontinent, in addition to neighboring countries. This was our heritage for thousands of years.

Agriculture was also an essential part of the traditional Omani way of life. The Falaj system, which is thousands of years old, is a way of transporting water thanks to the sophisticated engineering techniques and highly technical designs used to move water even upwards in some parts of this irrigation network. There is a similar system in the South of Spain and in some parts of South America. This helped our country to be sustainable for a long time, despite the sub-arid region in Oman. Agriculture and fishing have always been a very important part of living in Oman.

Oil was discovered in the late 1960s, but we protected this tradition. The Government used the oil money to invest in other sectors, including fisheries and agriculture, and to ensure that we have something to show after oil. The protection of these two sectors is part of the strategy for the diversification of the national economy. In other countries people are more interested in building towers and big buildings, but what will happen after oil? What if a new energy source is discovered? Those economies will crash. There is so much research and development going on around the world, another source of energy could be discovered in the future and that would eliminate all of these economies. These countries have to ensure they have a plan for the diversification of their economies so they are not overly dependent on oil.

We have achieved a lot in Oman over the past four decades, and many more projects will be developed over the coming years. Our strategy is based on investing the money from oil in other, more sustainable sectors. Agriculture and fisheries play a major role in ensuring the food security of Oman. We have never had famine in this country because we have the sea and we have the palm trees. Fish proteins and dates have kept us protected for thousands of years. Of course, there are also other crops that can be grown in Oman, so we have to make the most of our potential.

The second important issue related to these sectors is employment. Before oil, the vast majority of Omanis worked in agriculture and fisheries until the 1970s. After oil is gone, these workers will come back. Even now, fisheries employ around 40,000 Omanis. The average family in Oman has seven members, which means that about 280,000 individuals depend on fisheries. Agriculture employs another couple of hundred thousand farmers. Together we are talking about a significant portion of the population engaged in both activities.

Thirdly, we export a lot of fish to Europe, America and Japan, which is a major source of income for our economy. After oil, fish is the number one earner of foreign currency in Oman. Therefore, maintaining competitiveness and links with these international markets is very important for us, as it will allow us to strengthen Oman’s trade balance in the coming years.

All of these sectors are linked to other sectors of the economy, including supply chain insurance and finance. Investment in these sectors will create other businesses around them, which we call “forward linkage” with the production sector, and “backward linkage” of the support and services sector.

Investment in agriculture and fisheries would also allow people to stay in their towns and villages, and slow the migration to the cities. If there are projects in remote places, I think the people will stay in their hometowns. They have an activity, employment, income, so nobody wants to move houses. We cannot invest in one location and not invest in another. This is unbalanced, especially when it comes to infrastructure.

Under the 8th Five-Year Development Plan, 100 million RO have been allocated to the development of fisheries. In which areas the investment is going to focus? 

A significant portion of the 100 million RO will be dedicated to the development of infrastructure. The fishermen cannot fish very far because they have small boats and they cannot withstand the sea conditions. So we want to have a fishing port in almost every coastal town. Currently we have 19 fishing ports or harbors on the coast and at least seven more will be built in the next five years. In total we will have about 26 fishing ports on the coast, from the border with Yemen up to the border with the United Arab Emirates. We are building harbors with all facilities including a fish market, fueling, water, etc., and the private sector will come in and develop fuel stations and workshops. We also aim to increase employment in the port. Many activities will come with this. Fishermen will stay in their villages if they have the facilities.  Their social and living standards will also improve.

We are also updating and modernizing our fishing fleet. Now we want to encourage fishermen to get bigger boats so they can explore deep sea fishing grounds. Our policy is to protect the artisanal and traditional fishing, and not necessarily to support the commercial fishing, which is the opposite of other countries that capitalize on the commercial trawlers. But we are promoting the traditional Omani fishing, and now close to 90% of production come from the artisanal Omani sources, which is very important for us.

Oman’s fishing waters are among the richest in the world. Nevertheless, the government has imposed restrictions to prevent overfishing and ensure the environmental sustainability of fisheries. How do you strike a balance between preserving the environment and maintaining the competitiveness of the industry?

In 2010 we produced 164,000 tons, and in 2011 there was a slight increase in percentage, so I think we are approaching 170,000 tons of fish. 80% of this comes from the local, traditional Omani fishermen, while the rest comes from the industrial fleet. In 2010, the value of direct sale only was 118 million RO. This does not reflect the entire value chain of the fisheries. The entire value chain - transport processing, export, etc - is likely double that income. 

We re-examine our restriction policy from time to time. Two years ago, we conducted the last survey with NIWA from New Zealand to evaluate how healthy the stock was, can we expand or should we shrink. Normally we award licenses when we discover new stocks. For example there are not many stocks in the North part of our sea, so we keep the growth controlled at 3% a year, which means that we allow about 10 new boats every year. Mind you, these are small boats. We expand in other areas, like the Arabian Sea and Indian Ocean, where we have plenty of resources. But we award licenses only where we discover new stocks.

I cannot say that we are 100% efficient, but no country can manage their fisheries at this level. We try to adhere to international advice that we receive from other countries. By protecting our fishermen, we protect their activities and ensure sustainability of the industry. We want to be able to hand these fisheries over to our grandsons in the same condition we inherited them from our grandfathers. Our policy is a very cautious when it comes to expansion. That is why we restrict commercial licenses and eliminate the big industrial trawlers. Those trawlers are not an Omani fleet, most of them are foreigners hired by Omani companies. There was not much benefit because the sharing system was in favor of the fleet owners. So we decided to give more benefits to the Omanis, and allow them to get bigger boats with support from the banks. Then they can move into the areas where the trawlers used to fish, so it can be fished by Omanis using environmentally-friendly fishing gear, like long lines.

In my opinion, we are on the right track. We work with many consultants from the UK, the US, Canada, the Food and Agriculture Organization (FAO), with whom we discuss this issue and we are aligned with most advice they give us.

 You also face the challenge of illegal fishing. How can you improve the surveillance of the coastline to reduce illegal fishing?

We are part of the FAO agreement to fight illegal, unreported, and unrecorded (IUU) fishing and have that action plan in place now. We are doing many things and carrying out surveillance using the Air Force, Navy, and Coast Guard. We are also monitoring access to ports, because if these illegal boats cannot land their catch, where can they go? This is under strict FAO control, in addition to the Indian Ocean Commission (IOC), of which we are also a member. There are strict controls for illegal fishing, especially for tuna. The Air Force will go out and spot these boats and send the Navy out to check if they are illegal. But it is not that easy when you have 3,000km of coastline and 200 nautical miles offshore to monitor. That is a huge area.      

We protect our waters of 200 nautical miles. If foreign fleets are fishing in international waters, beyond a state’s coastal territory, that is allowed according to the FAO and the Law of the Sea. Nations with that capacity can fish in international waters. But for example, in the case of tuna for example, it would have to be recorded with the Indian Ocean Tuna Commission (IOTC). In this scenario, boats have to be registered, along with their capacity, and record their catch. They cannot fish illegally. In the Atlantic, they would have to report to the Atlantic Ocean Commission. They have to report every month, there will be inspectors checking their certificates to see where the fish have been caught. It might be 10 years before we have a truly efficient system, but the FAO and other organizations are taking the fight against illegal fishing very seriously. As a coastal state, this will benefit us.  

Demand for fish is growing in local and international markets, but outside markets give better prices. In 2010, Oman exported 51% of its total fish production, which lead to shortage in the domestic market. Comment on your export restrictions and incentives to ensure sufficient supply for domestic demand?

This Five-Year Plan aims to enhance value-added production, reduce waste, and improve the quality of fish. Some artisanal fishermen do not care much about the quality of their fish. They have little boats with no space to carry ice and there is no refrigeration in these boats. A big part of the 100 million RO program is devoted to helping the fishermen improve quality, reduce waste and promote value added products. We currently export raw material to neighboring markets, which is a waste. We export a small portion to Europe, for which we receive a higher return because we export value added products. 

Nowadays, we have more competition from outside, where there is a huge amount of fish products. Fish is associated with a healthy lifestyle, so demand is high and it will continue growing in the local market and abroad. The prices are higher on the foreign market, which is why there is an imbalance. We try different techniques to encourage fish dealers to supply more fish to the local markets, rather than travel to outside market with their catch. We don’t want to ban fish exports, but we try to implement some restrictions. We are a fish-producing nation, but we do not see the fish in Oman as well. It leaks out, which is normal in trade. But when it comes to food security and supply, sometimes you have to intervene and implement policies to ensure supply to the local markets.

We now have a policy of five species reserved for the local market. We export many different species, but we keep five species for the local market for around seven months in the low production season. These five cannot be exported, but permission is granted in the case of value added products. Our idea is to divert all fish from export markets to processors first, and then export the value added product. But it is very difficult to convince the local traders. It is a market economy, however, I think they could earn more through value added production and export. These policies take time, but you generate more employment, greater returns and a higher income.  

Free trade is about import and supply, but we try to divert the raw materials to the processing plant. Sometimes you can go to neighboring markets and find Omani fish cheaper than on the local market because they sell in bulk. It is a matter of convenience, but we are slowly trying to divert them, of course without having an effect on their income or profit.

What quality control measures do you implement to ensure that Omani fish complies with international standards? And how are Omanis promoting your products abroad? 

We have a sea food quality control centre which is accredited by the EU. All exported fish is inspected and checked for mercury levels, chemicals and microbiology. All processors have the Hazard Analysis Critical Control Point (HACCP) system, which was first developed for food hygiene and is of course now used in fish processing. The HACCP system is implemented in all of our factories, which is similar to the ISO. Every point in the entire production chain, from the fish entrance to the plant, is checked and recorded so the product is guaranteed safe for human consumption. This system is implemented in all 24 factories. There are many more processing plants going through this approved process to get the HACCP certificate. We also check the fishermen and their boats.  

We regularly attend major international events in our industry where we also promote the quality of our products. We are going to the International Boston Sea Food Show, The European Seafood Exhibition in Brussels, and we go to China and Japan as well. This way we get the message to international companies around the world.

Omani fish is famous and we export to 60 nations. There is a partnership between the Government and the private sector, and we work together as one institution. We listen to their challenges and try to resolve their issues. Over the past three years there has been a shift in the cooperation of PPPs and this is what we are focusing on right now.

We will be going to Boston in April 2012 together with the representatives of the main five or six companies in our sector. We have brochures on Oman, so we promote our industry and the country at the same time, and journalist and cameramen are going to record everything. We are also looking into South American and African markets.

Please comment on the investment opportunities in your sector, especially taking into consideration the Free Trade Agreement (FTA) with the United States?

The FTA is great opportunity for both sides as it eliminates trade barriers for all products. We have policies to attract more foreign investment and know-how is very important as well. That is why we are trying to encourage foreign investors to come to Oman.

A specific area that I would like to highlight is fish farming, which is very important due to the huge demand for fish worldwide. Currently, the global production of wild fish is around 100 million tons, and another 50 million tons come from fish farming. But most wild fish areas are in decline as there is overfishing everywhere. So fish farming is an excellent opportunity in Oman.

We only have two farms at the moment. We have one shrimp farm producing local species of shrimp, and a tuna farm. We have a sea bream farm, but it is not operational. We receive lots of applications for fish farms, but we have not awarded any licenses for two years. The Government wants us to do environmental protection studies to ensure that the environment is not affected. We want to avoid the problems that other countries faced when they started fish farming, so the government decided to freeze all licenses and study food safety and environmental protection first.  We have a strategy and different consultants are coming from around the world to look at our regulations and bylaws governing fish farming.

Today, we have put in place a program to promote fish farming, and now we have started to invite companies to invest. The cobia or the salmon of the tropics is very important to the US market and it is available in Oman. It can get to the US fresh if we send it by plane. We have a new Research &Development Center for Aquaculture which you should visit if you have time. We have the capital and plenty of space to farm any species.

How many licenses are you planning to issue?

We can issue hundreds of licenses, but we have to maintain sustainability. We can locate the farms far off the coastline as to not affect other activities including tourism and local fishermen. We need a balance between the three sectors. Oman is also very strategically located, in the middle of the world – six hours from Europe, six hours from Japan, Thailand and Asia, Africa and Australia. So the investors should capitalize on our strategic location.

Job creation is one of the key priorities in Oman. How is your Ministry working on promoting the employment opportunities in fisheries? 

The Ministry is going to recruit a large number of graduates from training schools. More employments will be generated as new investment opportunities emerge. There is good growth in fisheries. Fish farming will absorb a lot of people as semi-skilled labor and graduates in upper management and technicians, and that is why we want to attract foreign investment. All our programs are focused on food security, employment and the national economy. These are the three pillars we are working on, regardless of any other issues. This is our direction for the future. I hope that local fishermen will fish in the outer ocean. We want them to grow slowly and get loans for better boats and invest themselves. We want the poor to be in the middle class and the middle class to the upper class.

What should the American audience know about Oman today?

First of all, the world should know that Oman is a peaceful, stable and safe country. The people of Oman are known for their friendliness and hospitality. We are traditionally very tolerant to any religion and we do not have religious restrictions. Expats are happy living here and the local population is very receptive, generous and truthful. I think the majority of people here are genuine as well.

At the same time, the government has created an enabling environment for business and put in place attractive policies and excellent financial incentives for investors. Today, Oman offers great opportunities for businesses and joint ventures. So I would like to invite people from the US to come and visit our country as tourists and explore business opportunities in Oman.