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FEATURE

FISH STORIES

By David Snipes
Photographs by Ghassan Hashem and Tracy Lowe

Fish farming could offer a solution to the narrowing gap between the supply and demand of fish

Whether baked, barbecued, grilled or fried, fish represents a staple element of diets around the world. As Egypt’s population grows, demand for fish – a cheap and delicious source of protein – continues to climb. Traditional fishing grounds are being quickly exhausted, forcing fishing boats to venture further and further afield in their search for fish.

According to the Malaysia-based World Fish Center (WFC), domestic fish demand is expected to increase more than 20 percent by 2010, requiring an additional 200,000 tons of fish per annum simply to maintain the current level of consumption. While the importation of fish is always an option, it is – given Egypt’s macroeconomic position – one of last resort. “Hard currency is an issue that will hamper the provision of quantities of imported fish,” said Magdy Saleh, general manager of the General Authority for Fish Resources Development (GAFRD).

A growing number of entrepreneurs, therefore, are investing in an age-old pastime: fish farming, or “aquaculture,” by which farmers breed and incubate fish in artificial lakes or ponds. The practice, said Saleh, “is as ancient as Egypt itself,” referring to ancient friezes found in the tomb of Aktihep (circa 2500 BC) depicting men hoisting Egypt’s most popular fish – bolti, or tilapia – from a pool.

Aquaculture: a growth industry
Despite Egypt’s ancient heritage in aquaculture, large-scale domestic fish farming was largely ignored until the Sadat era in favor of capture fisheries, in which fishermen troll and cast their nets. By this time, sea fishing was becoming less viable, as the natural fish stocks along Egypt’s shorelines were exhausted.

“In the 1970s, both the Mediterranean and the Red seas were categorized as “very poor” in terms of natural fish production, and were, even then, extremely over-fished, from Spain to Syria,” explained Saleh.

Since then, due to the rapid growth of fish farming in the 1990s, the country has become one of the region’s biggest fish producers.

When GAFRD was established in 1983, annual domestic fish production was only 200,000 tons, “almost exclusively from the lakes, seas and the Nile,” said Saleh. Since then, production has risen, to some 800,000 tons in 2002, on the back of joint government-USAID projects aimed at developing the fishing sector, particularly aquaculture.

A growing industry globally, fish farming has been proposed as a potential boon to the national food supply. “Aquaculture is well suited to conditions in Egypt,” said Dr. Simon Heck, a research scientist at the Cairo office of the WFC. “The potential contribution of aquaculture to food needs and national economic development is enormous.”

Indeed, the industry has helped meet domestic demand. Since 1983, annual per capita fish consumption has jumped dramatically, from only 4.6 kilograms per year – much lower than the world average – to a current 14.6 kilograms per year. Some hope that the burgeoning sector will help ease the nation’s chronically high unemployment rate. Egypt’s entire fishing industry boasts approximately one million licensed fishermen, with an estimated 2.5 million others working in the sector unofficially, according to the GAFRD. “The value of the annual catch exceeds £E 7 billion,” pointed out Saleh.

A new breed of fishmonger
Over the course of the last 10 years, numerous aquaculture projects have been established, particularly in the Delta region, near Alexandria and in Fayoum – almost entirely with private capital. “There has been a boom in the last 10 years in aquaculture production,” said Saleh. “We’re seeing former government employees, trained in government enterprises, establishing aquaculture facilities with financing from investors.”

While he noted that the annual rate of return on investment in tilapia aquaculture had fallen from a high of 83 percent four years ago to a current 43 percent, he pointed out that, “this is still much higher than the 11 percent interest the bank is giving you.”

The big returns are largely due to the relative simplicity of tilapia farming. One of the earliest successes in aquaculture development was the simplification of the hatching process, aimed at making fish farming economically feasible for private entrepreneurs. “Tilapia is especially easy to breed in captivity and standard technologies evolved in Egypt that have been adopted by commercial hatcheries,” said Heck. “Now some of the bigger farms have their own hatcheries, enabling them to cut costs by not having to purchase fry.” He added, however, that this wasn’t the case for all species of fish. Mullet breeders, for example, still depend on procuring seed fish from the wild – a constraint given the government’s tight control over who is allowed to collect fry and market it.

What’s more, the gradual devaluation of the local currency over the last few years led to a drop in fish importation, which served to directly benefit the local industry, particularly aquaculture. “Today, Egypt imports almost 17 percent of its consumption supply,” said Saleh. “However, the volume of fish imports has declined sharply over previous years, and this has helped the development of fish farming.”

For aquaculture, explained Heck, currency devaluation can be a double-edged sword due to the industry’s reliance on imported feed. “Given that feed accounts for up to 60 percent of operating costs, it’s easy to see how severely fish farm economics have been affected,” he said.

Today, over 99 percent of all aquaculture schemes are privately run. “Imported technology has allowed the private hatchery industry to explode,and we now have around 250 facilities in the country, of which about 150 are licensed,” said Saleh. He pointed out that the government, as a way of encouraging the business, generally overlooks license infringements unless other, more serious, laws are also broken. “The private sector is growing so rapidly and, with limited resources, it’s difficult to license all the hatcheries,” he said, adding that collectively these projects produce an estimated 2 billion fry annually.

The government, meanwhile, continues to play a role by providing private fisheries with a reliable supply of high-quality seed stock, access to which is a prerequisite for modern aquaculture. “The government operates 15 hatcheries that supply in the range of 300 million to 400 million fry and fingerlings annually for restocking and sales to private fish farms,” said Saleh.

The need for marketing
According to aquaculture consultant Sherif Sadek, fish farmers operating in today’s cutthroat economy have to do “a lot more than merely grow fish.” They must also, like any other business expecting to survive, maintain optimal efficiency and minimize production costs. Know-how and management training is a prerequisite for hatchery operations producing high-quality fish.

“The way forward needs a dual strategy, addressing input costs and improved demand targeting,” explained Sadek. “By taking a more consumer-targeted approach, farmers could easily boost their profits by producing a wider spectrum of products.” He went on to suggest that investors should target niche markets through labeling schemes, based on environment-friendly “organic” production systems, trends popular in Europe and North America.

While marketing has until now – given the perennial demand for fish – remained a non-issue, Saleh agreed that modern approaches to marketing were becoming essential amid falling fish prices and increasing competition from rival fisheries. “Until now, the industry has been guided solely by production considerations: ‘produce what is easy to produce’ rather than ‘produce what finds the best market,’” he said. “Fish producers, particularly in the field of aquaculture, will need to explore new market channels and develop marketing and advertising strategies for target consumer groups at home and abroad.”

Swimming against the current
Of course, for most producers, the prospect of netting export markets remains the ultimate catch. According to Heck, the current volume of fish exports is very low, at less than 1,000 tons annually, and consists primarily of saltwater varieties. “What we are seeing for the Egyptian export scene is a brighter prospect in the short-term future, at least as far as the EU is concerned,” he said, referring to the European Union’s recent decision to lift its ban on Egyptian fish imports in place since 1999. “Some of the issues that led to the EU import ban on Egyptian fish are now being addressed.”

Heck sees great potential for opening new export markets in Europe and the US, but local exporters will have to meet strict guidelines. “If it does indeed turn out that it’s technically difficult for the producers to meet the stringent demands they have in place, they may have to look for other markets,” he said. “They may be able to offer different products in Asian and African markets that are easier and cheaper to produce.”

According to Saleh, the fishing industry’s future is in aquaculture. He said traditional fisheries are unable to keep up with local demand, let alone the demand pressure of new export markets. “The only way for Egypt to successfully reach its [export] targets is to encourage further investment in aquaculture,” he said. “We must not be complacent. We must aggressively pursue a course that will lead us to increasing levels of supply.”

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