Institutional Credit Support for Fisheries Opportunities and Issues


As an allied agriculture sector, fisheries have a significant place in the socio-economic fabric of India. Its importance could be gauged from the angles of livelihood support, food security and economic development. Fish is an affordable source of high quality protein and omega-3 fatty acids, there by playing a key role in the food security of the country. Over 14.5 million people depend on the sector for their livelihood and sustenance. The sector has registered an overall annual growth rate of 4% during the 11th Five Year plan period. It contributed about 0.91% to the National Gross Domestic Product (GDP) and 5.23% of Agricultural GDP (2014-15). It is one of the major contributors of foreign exchange earnings of the country and the figure has recorded a steady growth over the years. In 2014-15, the export earnings were to the tune of Rs.33, 441cr, constituting about one- fifth of agri exports from the country.

Fish production in India has been growing consistently over the last several years. Form a production level of 0.75 million tons during 1950-51; it has reached 10.08 million tons during 2014-15. With a share of 6.30% in global fish production and 5% in global trade, India is 2nd largest fish producer in the World. It is also ranked 2nd in aquaculture production.

Sub-sector wise analysis reveals that the share of production from marine sources has declined from 71% in 1950-51 to 29% in 2014-15, while that of inland sources rose from 29% to 65% during the same period. Production from marine sources may not increase significantly from the present level as it is nearing the potential level. At the same time, the production from inland sector is constantly on the rise, the major reason being increasing contribution from aquaculture. Aquaculture has emerged as the major contributor to India’s fish production in recent times and is going to be the major driver for India’s fish production in years to come.

Regional disparity in development is visible as more than 70% of the fish production is concentrated in 8 states viz., Andhra Pradesh, West Bengal, Gujarat, Kerala, Tamil Nadu, Maharashtra, Karnataka and Odisha. Andhra Pradesh tops the list with a share of 20% followed by West Bengal (16%).

India is bestowed with vast and varied potential resources in the form of rivers and canals (1.95 lakh km); floodplain lakes (7.98 lakh hectare); ponds and tanks (24.33 lakh hectare); reservoirs (29.26 lakh hectare) and brackish water (11.55 lakh hectare). The marine fisheries resources is estimated at 4.41 million metric ton spread along the country’s long coastline of 8118 km with 2.02 million square km Exclusive Economic Zone (EEZ) and Continental shelf area of 0.53 million

Foreseeing the high potential in the sector, the Hon’ble Prime Minister of India has called for a revolution in the fisheries sector and named it as “Blue Revolution” (Neel Kranti Mission). The objectives of Neel Kranti Mission (NKM) include, triple the fish production by 2020, double the income of the fishers and fish farmers with special focus on increasing productivity and better marketing, to triple the export earnings by 2020 and to enhance food and nutritional security of the country. The Minister of Agriculture and farmers Welfare, Department of Animal Husbandry, Dairying & Fisheries has merged Revolution. The scheme provides focused development and management of fisheries, covering inland fisheries, aquaculture and marine fisheries, including deep sea fishing, mariculture and all activities undertaken by the National Fisheries Development Board (NFDB).

Unlike in other allied sectors like animal husbandry, fisheries sector did not receive commercial orientation during its development phase. The activities remained largely on traditional scale, barring shrimp farming. Government programmes mostly focused on welfare activities and a few subsidy schemes. Commercialization and enterprise promotion were not given due focus. Institutional credit support, which can play a key role in promoting commercial ventures in private sector, was also missing from scene

Investment Opportunities

Carps continue to be in the mainstay of Indian fresh water aquaculture. The present level of production of 3tonnes per ha per year could be easily raised to over 5 tones through interventions on technology and extension. Of late, efforts are being made for diversifying aquaculture through introduction of new varieties like monosex Tilapia, GIFT Tilapia, Pangasius etc., which has generated interest among fish farmers.

Reservoirs are one of the most important, but untapped resources for fisheries development. The production potential estimated is about 6 million tones whereas the current production is negligible. Fisheries development in reservoirs is constrained due to lack of proven technologies in harnessing the potential. The production from reservoirs can be increased substantially by adopting scientific management practices plus investment support. Cage culture in reservoirs has emerged as a potential economic activity. States like Maharashtra, Chhattisgarh etc., have come out with a policy support for reservoir fisheries development.

Integrated fish farming with livestock and horticulture has high potential due to higher efficiency in resource utilization and also low risk due to diversification. As the system involves recycling of wastes or by-products among different farming systems in the North Eastern Areas due to culinary preference of the local population. Duck-cum-fish culture, poultry-cum-fish culture etc., are also proven technologies. Integrated farming model is an option to enhance farm income, which could also be encouraged as a homestead activity for livelihood among women.

Ornamental fish breeding and rearing is an attractive opportunity available to fish farmers and traders all over the world. The ornamental fish trade is having a turnover of US$6 billion with an annual growth rate of 8 percent. However, presently, India’s share in global trade in ornamental fish is estimated to be less than 1%. The major part of the export trade is based on wild collection. There is very good domestic market too, which is mainly the relatively simple techniques involved, this activity has the potential to create substantial employment opportunities, besides earning foreign exchange. This activity has an added advantage of providing a wide range of investment options ranging from backyard livelihood scale to large scale commercial units.

The estimated area of brackish water available for aquaculture in the country is 1.16 million ha. Traditional shrimp farming practices are popular in the states of Kerala, West Bengal, Karnataka and Goa. Shrimp farming dominates the commercial aquaculture segment due to its export demand. Ever since its introduction in India in 2009 the pacific white shrimp (L.Vannamei) has become the dominant species of Indian shrimp farming. Being capital intensive, development of new area under shrimp farming is an opportunity for institutional credit.

Globally, mariculture is reported to account for about 35% of the total aquaculture production. However, in India mariculture activity is presently limited to farming of mussels, clams, edible oysters and mud crabs in a limited area in a few states like Kerala, West Bengal, Odisha etc. Lobster fattening, sea weed farming etc., are also being practiced in some areas, but on a limited scale. It is estimated that India could augment its fish production substantially through mariculture in sheltered bays, coves and backwaters, creating opportunity for credit deployment.

Post-harvest sector covering processing, value addition, storage and marketing also offers huge investment potential. As the production levels increase there will be corresponding demand for post-harvest infrastructure, which would require both investment and working capital credit support.

Institutional Credit

Credit to fisheries is extended by both institutional and non-institutional players. The institutional players include banks, Regional Rural banks and Cooperative banks and also agencies like Microfinance Institutions, SHGs etc. Now, small finance banks and payment banks have also joined the list. Non-Institutional players include money lenders, local traders, commission agents, friends, relatives etc.

As reported in the 70th round survey of National Sample Survey Organization (NSSO), formal institutions account for 60 percent of indebtedness of farmer households in India. This estimate may hold good for fish farmers as well.

Institutional credit has been a major contributor to development of agriculture and allied sectors in India. There has been impressive growth in agricultural credit from Rs.2.29 lakh crore to Rs.8.77 lakh crore during the ten-year period from 2006-07 to 2015-16. The area of concern was declining share of term loans from 35.40% to 19.6% during the same period. Term loans are important for increasing capital formation necessary for sustainable economic growth.

Historically, the share of credit to fisheries in total agricultural credit has been quite low and further, it has been steadily declining over the last several years, particularly last 10 years. From a share of 1.30% in 2003-04 it dipped to 0.3% during 2013-14(sub-sector- wise disaggregated figures not available after 2013-14). While credit to agriculture recorded an impressive growth of 22.04% during the period 2003-04 to 2013-14, credit to fisheries recorded negative growth of 11.83%. Commercial banks had a dominant share of 90% in credit flow.

Despite opportunities, credit to fisheries form institutional sources continues to be dismally poor. There are several factors attributed to poor off take of institutional credit under fisheries, which are discussed in forthcoming paras.

The institutional credit targets for the banking system are prepared based on the Potential Linked Credit Plans prepared by NABARD every year. The PLPs prepared at district level, estimate the sector-wise/activity-wise exploitable credit potential taking into account factors such as infrastructure availability, Government programmes etc. PLPs form the basis for preparing the district and state credit plans.


Source: Aqua Aquaria

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