Establishing Fisheries 4Ps

The programme will support the establishment of market-driven 4Ps (Public, private, producer Partnership) model between Organized Fisherfolks (Cooperative per landing site/cluster approach covering all 32 cooperatives established or revamped by the end of the project), existing fishery processing factories (200 factories are currently operating within these 32 sites) and factories in Karachi, Middlemen (as a market agent in a first phase), banks (to initiate a first relation between fisherfolks and the formal banking system through only deposit, saving account and mobile transfer) and the GoB through the GLLSP II project.

The project will operate in 2 phases: From start to the MTR, GLLSP II will focus on 11 landing sites (2 sites with jetty construction plus 9 additional sites with and without jetties) to consolidate / adapt the 4P model to the site-specific requirements of the Gwadar and Lasbela coastal area by formation of cooperatives with role to Jetty Management. After evaluation and at MTR, the upscaling of the approach to the other 21 landing sites (with the necessary adjustment if needed) will be initiated.

Currently, based on the official data from the Department of Fisheries, a 20-35 feet boat (daily trip) catches, on average, 1.5 mt of fish per year during a season which lasts from 6 to 8 months. After deducting expenses, the income is equally shared among the captain and crew/labourers. The average income generated by each fisherfolk (4 to 5 fisherfolks on one-boat) is consequently estimated at the equivalent of USD 1 per day with considerable variations (rich catch one day and no catch on other). Middlemen are the link between the fisherfolks and buyer/factory and pre-finance the necessary working capital (fuel, nets), investment capital (boats, engines) as well as their social and consumption needs during off-season (health, food, festivals). This considerably weakens the fishers’ bargaining power and access to competitive markets.

To improve fisherfolks’s bargaining power, they will be organized into legally recognized Cooperatives that will be managed by 3 professional staff recruited competitively with PMU assistance. Cooperatives will enter into collective sale contracts with factories and other buyers on behalf of their members following the 4P’s model which is led by the private sector covering all the areas of investment, marketing, purchase, placement of the market information systems and maintenance of cold chain. The Cooperative will receive the catch of members, clean, grade and weigh the different species of fish following the guidelines of implementation manual and the arrangement agreed by the private sector under 4 P’s model. The factory will ensure the cold chain maintenance, assess the quality and fixing the rates as per the rate list of market and then, proceed with the payment to cooperatives based on the pre-agreed price with the cooperative as per the agreement between the cooperative and factory.

The cooperative will be assisted by GLLSP II with matching grant for the working capital and capital investments. The amount of support for each cooperative will be determined on the basis of a volume of catch and the business cycle (season) of the particular landing site. This support will be provided to cooperative following the approved business proposal under 4 P’s so that the cooperative can initiate the business at landing site. These services will build Cooperative capacity and credibility and allow the fisherfolks to progressively become financially less dependent on the middlemen. Alongside the cooperatives, the project will work with informal groups of fisherfolks, partnerships, platforms and associations.

The cooperative will also finance poor youth of the community that want to become new fisherfolks, a set (boat “hitech fiber boat”, engine, nets) for a maximum total amount of USD 5,000 as matching grant depending on the business proposal. That will be paid-back within 3 years to the cooperative, allowing for two cycles during project life benefitting 4,000 youth. This will also allow these youth to access regular income and avoid indebtedness. An amount of USD 50,000 will be dedicated for that per cooperative and will allow 4,000 youth to access new income (5 youth for 1 boat). The cooperative will also assist all members to upgrade their boats so as to (i) have ice compartments to maintain fish quality up to entry door of the factory, (ii) pre-grade the catch at the boat and (iii) respect the international hygiene standards. GLLSP II will allocate a lump sum of USD 100 per boat to the cooperatives, based on the list of boat provided (10,000 boats to be upgraded). The cooperative will pre-finance this amount to the fisherfolks that they will pay back within 4 months. The amount recuperated will feed the working capital of the cooperative. The cooperative will benefit from and manage a small sorting/grading platform at the landing site, allowing to clean, grade, weigh and transport the fish to the factory or large refrigerated carriers.

The fish factory will provide ice for the fisherfolks on an agreed price with the cooperative and will deduct directly the amount before payment under the partnership agreement between cooperative and private sector factory. A transparent detailed invoice will be provided by the factory to the cooperative every week. By adhering to this 4Ps, the factory will have better assurance to have regular supply of fish, both in quality and quantity, which will increase the factory’s profitability and competitiveness.

Alongside the cooperatives, one or several banks with ongoing functional branches in Gwadar and Lasbela will be engaged to be part of the 4Ps model to enable fisherfolks’s access to a bank account (deposit and saving). The option of the mobile banking facilities, e-commerce and e-money transfer will also be explored as well as leveraging the ongoing credit guarantee scheme of the State Bank of Pakistan (SBP). After the MTR, when the bank will have a client history with the fisherfolks, access the formal financial services at scale will be explored through a more robust engagement with the SBP and key participating financial institutions. GLLSP II will also develop financial literacy modules for the fisherfolks which should allow them to better manage their money during the periods of surplus.

the first phase, the middlemen will be part of the 4 Ps as a market agent of the cooperative. By this, the middleman will be able to access and service more fisherfolks which would compensate for any loss due to the reduction in money lending business. After the MTR, the evaluation of the 4P approach will make recommendations on the way forward and the type of relation to be maintained with the middlemen.

The Department of Fisheries will benefit from capacity building support from GLLSP II in the shape of equipment for Inspectors and Quality Testing Lab, training and TA support for review and updating of the current fisheries policy and regulations in order to ensure that the current marine resources of the Baluchistan coastal area are exploited in a sustainable manner.