Peruvian Anchovy Fishery

By Adriana Giudice, CEO, Austral Group S.A.A

“We catch anchovies and process them into fishmeal and fish oil, as well as canning fish. Peru is fortunate in having one of the richest oceans in the world. The most important resource is the anchovy stock but management has always been a challenge. The fishery is affected by the El Nino phenomenon every 3-4 years, where warm water inflows have a negative impact on the biomass.

Since the 1990s, we have had a stable system of setting total catches based on stock assessments conducted by the Peruvian Institute of the Sea, IMARPE. However, this system brought a major increase in the fleet, which required a reduction in the fishing season to 50 days per year. Catching 5-6 million tonnes meant some days 150,000t of fish were fished, putting the biomass under pressure and leading to risky working conditions for crew members in this race for the resource.

In 2009, the government introduced an individual quota system, supported by most of the companies and workers from the sector. The fishing season has been extended to 190 days and average catches per day reduced to 30,000t. This has been a really positive measure, meaning there are not so many boats crowded in bays at the same time. Austral now owns 7% of the quota for the northern stock, and 4% of the southern stock. We have reduced our vessels from 38 to 22 and it costs us less to catch the same amount of fish. Crew members have safer working conditions, reflected in the smaller number of accidents.

The fish we catch arrives fresher as there is no need to catch fish intensively and boats do not need to queue to come into port for unloading. Before, 40% of our fishmeal production was super prime and prime quality; but this has now increased to 70%. This has a significant impact on the bottom line given that the gap between standard and prime fishmeal is now $200/tonne.

In the entire industry, the number of fishing vessels has reduced from 1,172 to 868, meaning a reduction of 26% in fishing power. The number of crew has also dropped by 2,500, yet for those who remain, wages have increased by 40%. The fisheries law ensured that there were mitigation measures in place to address social issues from moving to the quota system. Crew could only be made redundant voluntarily, and receive over 1.5 times usual redundancy payments. We are also required to support them through a training programme for a new career. This covers the cost of training for up to 3 years and 20% of their previous salary to help with living costs. Furthermore, companies pay $1.95/t into a pension fund for crew and, over a three year period, have invested around US$29 million.

I think the industry’s confidence is illustrated by its investment in environmental quality. This has already improved with the decrease in vessels, but the industry is investing a further $465 million on meeting new targets to reduce air and water emissions by 2015.”

Vital Statistics

Species: Anchovy (Engraulis ringens)

Fishing gear: Purse Seines

Country: Peru

Ocean: Pacific Ocean

Fishery tonnage: 5 – 6.5 million tonnes

Markets: China (also Germany, Japan and Vietnam)

Before intervention/s – 2008				Transition	After intervention/s – 2011
Economic indicator/s  (e.g. Total value of catch, or fish prices/kg)	Social indicators   e.g. (Average wage – of crew; no. of vessels)	Environmental indicators  (e.g. Status of stock)	Fleet indicator(number of vessels or licenses)	Cost of interventions(Estimate of the financial costs)	Economic indicator/s   (e.g. Total value of catch, or fish prices/kg)	Social indicators   (e.g. Average wage – of crew; no. of vessels)	Environmental indicators   (e.g. Status of stock*)	Fleet indicator(number of vessels or licenses)
Estimated overinvestment of US$ 1,000 million   Higher Production of FAQ fishmeal	Fleet surplus approx:  5,700 workers.   Hazardous working conditions due to the race for the resource	9.8 m tonnes (Biomass 2008)   Quotas: 1st season : 3 million   2nd season:  2 million	1,172   (excess of 40% hold capacity and 400 vessels)	Industry invested:   US$ 50m in redundancies & training programmes   $1.95/t into a pension fund for crew – total US$29 million over three years   $465 million up until 2013 on reducing air/water emissions	Increased prime quality from 40% to 70%   Prime quality receives higher price (up to $200/t compared to standard quality)	Reduced by 2,100   Crew’s wages increased by 40%   Lower number of accidents   Investment in training	10.6m tonnes (Last report Oct 2011   Quotas: 1st season: 3.7 million   2nd season: Quota fixed at 2.5million tonnes	868