Title of the proposed study:

A STUDY ON THE VALUE DELIVERY CHAIN ANALYSIS OF LOCAL FARM

RAISED FISH IN THE STATE OF ASSAM

Introduction:

Aquaculture, a sub-component within the fisheries sector is a vital economic activity

and livelihood component of rural communities. Because of its importance in the livelihood of

rural people, it is immensely necessary that they will receive maximum value at least possible

cost out of what they produce and sold. This requires development of the value delivery chain

in fish farming. The value delivery chain consists of a series of activities that create and build

value. The entire process of this value chain starts from fish breeding to end consumer of table

fish, also marketing of various finished and semi-finished produces/products is carried out.

The various activities involved are production of fish spawns in hatcheries by hatchery

owners and happa breeders; the spawns so produced are either reared by themselve or sold to

fish seed growers, where these are furher raised in nursery and rearing tanks to fry and

fingerling sizes respectively. Sometimes the nursery raisers, on attaining spawn to fry size,

sells the produce to other seed growers who rears the fry untill it attains fingerling size. The

fingerlings so procuced are again sold to fish farmers who are involved in grow out fish

farming where fishes are produced to table size. These fish farmers now sell the table size

fishes either directly to the consumer or wholesellers or through other market intermediaries.

Finally, passing through various intermediares the table size fishes reach the end consumer.

The involvement of various stakeholders and intermittent sale proceeds makes the

entire process a complex one and there exists a communication gap. Often the chain gets

hamperd due to problems like short supply of inputs, lack of quality fish seeds, improper

means of logistics etc. The price of fish in the marekt is always at peak irrespective of the

availability of the fish in the market. Usually the marketing of these products or produces are

done very traditionally rather than in a strategic way. The persons and community who are

associated with the production, distribution and over all fish marketing need to possess the

skills of entrepreneurship to enhance marketing and profitable transaction. Also in certain

cases, the big farmers having entrepreneurial traits, due to lack of infrastructure and proper

market, they usually follow the traditional path for fish marketing resulting in loss of profit.

Often there is a short supply of local fishes in the market and the access to the market is easy

by either producer as well as end consumers at reasonable prices. Despite of being a lucrative

entrepreneurial activity and available resource for fish farming in the state (Assam) the

absence of an organised supply chain and value chain and improper marketing mix makes the

fish farming a less attractive source for livelihood among the educated youths.

Review of literature:

Markets are an inherent part from the context within which economic activity takes

place. They influence, and are influenced by, the behaviour of producers and consumers.

When they function well (providing the goods and services people want at reasonable cost),

they generate incomes and foster wider economic growth opportunities. When they function

poorly (when the desired goods and services are not readily available at reasonable cost), they

act as a brake on economic activity. Of course, there is important and considerably more

nuanced detail behind such generalizations (Gordon, A and Kassam, L. 2011). Marketing is

generally considered as the process by which companies create value for customers and build

strong customer relations in order to capture value from customers in return (Kotler &

Armstrong, 2007). The value chain describes the full range of activities which are required to

bring a product or service from conception, through the different phases of production,

delivery to final consumers (Kaplinsky and Morris, 2000; Jacinto, 2004). Fish and fishery

products supply chain is a network of food fish-related business enterprises through which fish

and fishery products move from production through consumption, including pre-production

and post consumption activities (De Silva, D.A.M, 2011). The demand for fish in the state is

very high, as all the ethnic communities of the state being fish eaters. The market is always

associated with strong demand due to increase in population. Due to the growth of population

there is always a gap between supply and demand of fish in the markets. Narrowing the gap

not only requires increasing production but also improvements of all aspects of fish marketing

and distribution systems (Kleih et al., 2002; Ahmed and Sturrock, 2006; Ahmed, 2007 and

2008). Fish culture is adopted by all kinds of farmers – small and marginal ones, relatively

larger farmers and those who do it on commercial scale. Sizes of ponds also depend on how

affluent the farmers are. Ponds less than 100 square meters in area prove unsustainable, while

those above 1 hectare are expensive for small players. Many farmers in Tamil Nadu, for

instance, use ponds of sizes 30 feet by 30 feet to make their living. On the other hand, water

spread of anything less than 10 hectares in Andhra Pradesh is treated as a pond. The small and

marginal fish farmers are having 0.6 to 0.11 hectors of land on an average for cultivation of

fish (Phukan, S.C. and Barman, A., 2013). Small-scale aquaculture producers have income

opportunities if they plan their production processes—and plan them well. One of the

fundamental principles in marketing is to make it part of the overall planning process.

Consider marketing decisions as important as production decisions. No matter how small your

aquaculture operation, developing a marketing plan for what you will produce is the best

strategy, because the fish have to be sold once they reach marketable sizes (Quagrainie, K.

2007). The development of a modern marketing chain for high quality product from fresh raw

fish has become an essential requirement of the contemporary fisheries and aquaculture

sectors (Trondsen, Young. 1996). From the marketing perspective, fisheries sector is a

neglected issue though this sector is a highly important component of the rural economy.

Major thrust is needed for the development of this sector whereby the sustainable growth in

agricultural output as a whole may be achieved (Phukan, S.C. and Barman, A.2013).

Marketing of aquaculture products is no different from traditional marketing of any other

commodity or product. The classic 4 Ps of marketing apply to aquaculture and should always

be borne in mind: Product, Price, Place (Distribution), and Promotion are keys to successful

marketing. Each of these variables is within the control of the small-scale producer. It is

important that producers develop the relevant marketing mix or combination of these

marketing tools to satisfy their customers and business objectives (Ehmke, Fulton, and Lusk,

2005).

Research Question:

This proposed research aims to deal with the following research questions that is being

proposed to be studied:

(1) How the fish farming as a business in the state is justified economically as a source of

livelihood?

(2) Is it viable for establishing a PPP model in the fishery business in Assam?

(3) What are the different marketing tactics/ marketing mix in traditional fish farming

business? What are the different critical factors a fish farmer encounter to market its

product? How and where a farmer, either loses or earns its share of profit in terms of

money as well as production due to the prevailing value and supply chain network.

(4) Why there is always a buzz among consumers regarding abnormal high price of fish in

fish market, or the pricing is justified?

The first research question explores the present strategies that the fish farmers are doing in

their farming business. This question will answer the unique nature of fish marketing business

prevailing to the available demographic features and market infrastructure. Also, there will be

a focus on the farmers indigenous marketing tactics and the required modifications if

necessary. The second research question analyses the economic feasibility of fish farming

business in the region using various economic tools. This aims to enlighten- what should be

the pricing of the fish in the market; and the business plan of the upcoming entrepreneurs.

The third research question explores any existing PPP business model in fishery, and how a

PPP model may enhance fishery business in the region. The fourth research question is to

analyze the price of fishes in the retail as well as in the wholesale market and the consumer

behavour and response to these prices.

Objective of the Study:

The proposed study is aimed at the following specific objectives:

1. To study the feasibility of fish farming on a commercial basis in Assam.

2. To study the supply chain and value chain of fish farming in Assam.

3. To study the prevailing marketing strategy and the marketing mix of the progressive

fish farmers of Assam.

4. To study the consumer behaviour with respect to the fish price.

5. To develop a business model for enhancing income generation through fish farming

and easy access of local fish in the market at reasonable price by end consumers.

Data and Research Methodology:

For the proposed research work, primary as well as secondary data will be used.

Various statistical tools like factor analysis, cluster analysis as well as Principal Component

Analysis may be used to analyze the primary and secondary data. Data collection regarding

significance of skills will be done through selected samples of fish producers, hatchery

owners, whole sellers, retailer, fisherman and departmental officials. The tools for collecting

data will be as follows: For primary data collection- (i) Questionnaire and survey; (ii)

Interview method. For secondary data collection- (i) Document Review (ii) Observation (iii)

Web search.

Biblography:

Ahmed, N. (2007). Value chain analysis for hilsa marketing in coastal Bangladesh.

Aquaculture News 33, pp. 14-20.

Ahmed, N. (2008). Freshwater prawn marketing in Bangladesh. Global Aquaculture

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Ahmed, N. (2010): ‘Marketing of low-valued cultured fi sh in Bangladesh: An

evaluation of value chain’, Sustainable Aquaculture, Volume XV No. 3 July-

September 2010, pp. 15-21.

Ahmed, N., Sturrock, H.T. (2006). Marine fish marketing systems in coastal

Bangladesh: potential for development. Aquaculture Asia 11(2), pp. 28-36.

De Silva D.A.M. 2011. Value chain of fish and fishery products: origin, functions and

application in developed and developing country markets, Value chain project, Food

and Agriculture organization.

Ehmke, C., J. Fulton, and J. Lusk. 2005. Marketing’s FourP’s: First Steps for New

Entrepreneurs. Purdue Extension Publication # EC-730, Purdue University, West

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WorldFish Center, Penang, Malaysia. Issues Brief 201, pp. 12-34.

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fisheries. Tambuyog Development Center, Philippines.

Kaplinsky, R., Morris, M. (2000). A handbook for value chain research. International

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Kleih, U., Greenhalgh, P., Oudwater, N. (2002). A guide to the analysis of fish

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Marginal Fish Farmers in Rural India and its Impact on Fish Prices and Fish Farmers’

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available at www.emeraldinsight.com/Insight browsed on 09.03.2013