Promoting Aquaculture

It is easy to overlook the importance to Peru of what might be described as its ‘offshore sector:’ its rich Pacific fishing grounds. Yet, these marine resources rival in importance the gold, copper and other better-known riches of the Peruvian soil. Now Peru is trying to develop fish farming – in lakes and coastal tanks – as a complement to the well-established trawling industry. It wants to bring more foreign investment to a sector that until now has been almost entirely homegrown.

Fishing sector exports were worth $880 million in the year to November 2001. Nearly 90% of this was fishmeal sales, which accounts for more than 12% of total Peruvian exports. Only gold and copper – and the latter only since the massive Antamina mine began operations last year – are more important.

The main source of such wealth is the humble anchovy, which spawns off the Peruvian coast in numbers sufficient to allow Peruvian fishermen to land an average of 8.3 million metric tons annually, according to Juan Ribaudo, president of the National Fishing Society (SNP). The fleet refrains from catching a further 4 million metric tons each year, during two closed seasons, in order to protect stocks of the valuable resource.

The anchovies are processed into fishmeal and in lesser quantities into fish oil, with the main markets being China and other Asian countries, as well as the European Union. The US is not a big consumer since its domestically produced soy meal is in many cases a good substitute. Fishmeal is a principal ingredient in agricultural foodstuffs and in fish food itself, and Ribaudo therefore takes heart from the 10% annual worldwide growth in fish farming, known as aquaculture. Peru is the world leader in fishmeal production with around 30% of total global output.

Fishing creates 100,000 direct jobs for seamen, spread along the coast, and most of the capital in the industry is Peruvian. Benedicto Cigüeñas, manager for planning and finance at Banco de Crédito del Perú, says the sector is normally a strong demander of credit from the country’s banking system.

The fleet consists of around 1,000 large boats and 7,000 smaller ones, but this is already too many and further expansion of the fleet is prohibited by law. The government and private sector have been in talks about the best way to trim capacity.

Wild swings in availability of fish stocks clearly can affect this important sector. The second half of 2001 was one such example: climatic conditions dispersed the fish and left many boats idle. However, Ribaudo says the sector’s income remains remarkably resistant to these cycles, since low supply pushes up prices. Even in years when the El Niño climatic phenomenon is at its height and anchovies are scarce, Ribaudo says prices rise and furthermore other species become more available. “It regulates itself,” he says.

Current efforts focus on trying to improve the quality of fishmeal produced to add more value to the final product. But Ribaudo says recent investments in modernization mean the industry is highly indebted.

As a result, in a shift from the traditional pattern of investment, it is foreign companies that are most likely to take advantage of the new opportunities in fish farming. There are projects examining the potential for cultivation of five main species – trout, lobster, tuna, scallops and tilapia – and the aim is to secure $1.6 billion of investment over the next five years. According to SNP projections, that could create 150,000 more jobs and $1.35 billion in foreign earnings. Demand is forecast to be strong. Peru’s Commission for the Promotion of Private Investment (COPRI), assumes world demand for fish and seafood for human consumption will rise 70% over the next 30 years.

Ribaudo points out that there are 1,200 lakes in the Andes suitable for trout and that, “On Lake Titicaca alone there are 600,000 hectares. What we need is money and laws that create stable conditions.”