ECONOMIC ANALYSIS OF ALTERNATIVE STRATEGIES FOR
THE DEVELOPMENT OF SIERRA LEONE
MARINE FISHERIES

Dissertation for the Degree of ‘Ph. D.
MICHIGAN STATE UNIVERSITY
DEAN ALLEN LINSENMEYER
1976

LIL’LM’» .05.?)
MICHIGAN STATE UNIVERSITY
EAST LANSING. MICH. 48823

I II III II I II III I II

29

III I II I I II III I

3104764

This is to certify that the
thesis entitled
ECONOMIC ANALYSIS OF ALTERNATIVE STRATEGIES FOR
THE DEVELOPMENT OF SIERRA LEONE MARINE FISHERIES

presented by

Dean Allen Lins enmeyer

has been accepted towards fulfillment
of the requirements for

Ph.D. degree in Agricultural Economics

 

 

 

Major professor

Date November 8, 1976 I

 

0-7639

 

ABSTRACT

ECONOMIC ANALYSIS OF ALTERNATIVE STRATEGIES FOR
THE DEVELOPMENT OF SIERRA LEONE MARINE FISHERIES
BY

Dean Allen Linsenmeyer

Alternative sources of animal and vegetable protein have been
unable to provide an adequate quantity of high-quality protein to
satisfy the broad-based effective demand. Consequently, Sierra Leone
remains dependent on imported frozen fish to meet domestic needs
while local stocks of marine fish are under-exploited. Given the
government's commitment to greater self-sufficiency in fish, this
study examines alternative strategies for stimulating small—scale and
large-scale fisheries industries.

This research is the first micro-economic survey of small-
scale marine fisheries in Sierra Leone and one of the first fishery
surveys undertaken in West Africa which combines the micro-economic
operations of small-scale producers, processors, wholesalers, and
retailers into an integrated fish delivery system. The objectives of
the study were to: (1) describe the micro-economic Operations of
alternative technologies currently practiced in fish production,
processing, and marketing enterprises; (2) identify major constraints
on improved performance of the fisheries production-delivery system;

(3) through the development and execution of a linear programming

Dean Allen Linsenmeyer

model to examine the aggregate impacts of alternative deve10pment
strategies on (a) the level of output, employment, frozen fish imports,
economic profits to the fisheries subsector, the subsectoral contribu-
tion to Gross Domestic Product and on (b) the choice of small-scale
technology which is most profitable to the economy.

The field research was undertaken over a 12 month period from
October, 1974 through September, l975,covering 93 fishing firms in
five randomly selected small-scale landing sites located in three
coastal regions of Sierra Leone. The small-scale firms were grouped
into nine representative firm types based on the type of production
technology used. One of the five large—scale production firms based in
Freetown was also interviewed to collect basic input-output data. Fish
processors and traders were surveyed covering the major wholesaling-
retailing channels between the selected producers and the four largest
urban centers.

Micro—economic analysis of the data was conducted through the
construction of basic enterprise budgets for each of the nine small-
scale production firm types and for one large-scale firm type. The
various processing, wholesaling and retailing firms were also analyzed
using the enterprise budget technique. A linear programming model
incorporated the budgetary data of these industries into an integrated
production-processing-marketing system. This model was tested for
consistency with the 1974 situation and then used to evaluate the
effects of the following development strategies over the 1974-1980
period: (a) varying the resources available but maintaining the 1974
policies regarding the cost of capital and import duties, (b) en-

couraging small-scale fishing industries, (c) encouraging large-scale

Dean Allen Linsenmeyer

fishing industries, (d) actively discouraging large-scale fishing
industries, and (e) closing the economy to frozen fish imports to
force self-sufficiency by 1980.

It was found that a significantly higher pr0portion of the
national labor force were employed in the fisheries subsector than
had previously been estimated. Within the small-scale productiOn
industry, a major share of labor employment and production occurs
in the October through March period. However there is considerable
variation in the seasonal patterns of the different technological
firm types.

A major contrast was found in the amount of capital used per
unit of labor between the large-scale and small—scale industries.
Although a considerable range of capital-labor ratios was evident
between the different technological firm types, most of the types were
quite closely clustered.

All small-scale firm types were economically profitable and
capable of producing fish at considerably less cost per leone of fish
landed than is capable by the large-scale firms. While frozen imports
were found to be strongly competitive with large-scale production,
they could not actively compete with low-cost small-scale output.

A strategy which encouraged the expansion of small-scale pro-
duction was found to lower the required imports by 1980 from the level
which would prevail if current policies were continued. This strategy
of supporting small-scale expansion also resulted in higher levels of
economic profits for the subsector as well as higher levels of sub—
sectoral contributions to Gross Domestic Product than any other

strategy tested. A strategy of self-sufficiency by 1980 while producing

Dean Allen Linsenmeyer

a higher level of Gross Domestic Product and returns to the subsector
was judged unrealistic in view of the substantial resource require-
ments. An accelerated growth in the trained labor supply, the amount
of investment capital, and in the capital stock of boats were found as
key factors in the expansion of the small-scale industry. Changes in
pricing policy such as the cost of capital and import duties on
frozen fish and fishing equipment, when implemented in isolation, had
little effect on small-scale production but considerably more effect
on the large-scale industry.

While some justification is possible for more fully utilizing
current large—scale capacities, an expansion of large-scale productive

capacities could not be supported by this study.

ECONOMIC ANALYSIS OF ALTERNATIVE STRATEGIES FOR

THE DEVELOPMENT OF SIERRA LEONE MARINE FISHERIES

By

Dean Allen Linsenmeyer

A DISSERTATION

Submitted to
Michigan State University
in partial fulfillment of the requirements.
for the degree of

DOCTOR OF PHILOSOPHY

Department of Agricultural Economics

1976

© Copyright _
DEAN ALLEN LINSENMEYER
1976

ACKNOWLEDGMENTS

I wish to gratefully acknowledge the assistance given me by
members of my graduate committee: Derek Byerlee, John Hunter, Carl
Liedholm, Vernon Sorenson, Dunstan Spencer, Daniel Talhelm, Warren
Vincent and Carl Eicher, my major professor. I am particularly thank-
ful for the encouragement, excellent guidance as well as the personal
friendship of my thesis supervisor, Derek Byerlee. His direction
at crucial stages of the field research and data analysis made this
thesis possible.

I would also wish to thank the Social Science Research Council
of New York City and the Department of Agricultural Economics of
Michigan State University for their financial support of this study.

The staff of the Department of Agricultural Economics of Njala univer-
sity College, Sierra Leone and in particular the African Rural Employment
Research Project of Njala University College provided considerable assis-
tance in carrying out the field research for which I am grateful.

While the doctoral candidate's wife is traditionally ack—
nowledged, I note most gratefully the months of tedious work which my
wife, Bek, contributed in supervising the computer coding of all the
survey forms as well as her understanding support and encouragement
throughout my graduate program. Without her support my graduate pro-

gram would not have been completed.

ii

I wish to express my appreciation to the five field enumerators
for their long hours of work under sometimes difficult conditions in
obtaining the survey data and to the eight students who spent their
summer holidays in preparing the forms for keypunching.

Lastly, but most importantly, I wish to thank the fishermen of
Sierra Leone and their families for not only tolerating but trustingly
responding to our seemingly endless questions and interruptions. It
is my deepest desire that this research will not betray their trust

and hope for assistance in improving their livelihood.

iii

TABLE OF CONTENTS

LIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . .

LIST OF FIGURES . . . . . . . . . . . . . . . . . . . . . .

LIST OF APPENDICES . . . . . . . . . . . . . . . . . . . . .

CHAPTER

1.

INTRODUCTION . . . . . . . . . . . . . . . . . . . .

1.1 The Problem Setting . . . . . . . . . . . . .
1.2 Objectives of the Study . . . . . . . . . . .
1.3 Outline of this Thesis . . . . . . . . . . .

2. FISHERIES IN THE SIERRA LEONE ECONOMY . . . . . . . .

1 Economic Contributions of Fisheries . . . . .
2 Descriptive Profile of the Subsector . . . . .
.3 Trends in Domestic Supply and Demand for Fish
4 Role of Government in Fisheries Development .
5 Summary . . . . . . . . . . . . . . . . . . .

SURVEY METHODOLOGY . . . . . . . . . . . . . . . .

3.1 Review of Methodology . . . . . . . . .
3.2 Purpose of the 1974- 75 Survey of Sierra Leone

Fisheries . . . . . . . . . . . . . . . . .
3.3 Small-Scale Production-Marketing Surveys . . .
3.4 Large-Scale Production-Marketing Surveys . . .

4. MICROECONOMIC ANALYSES OF SMALL-SCALE FISH PRODUCTION

The Socio-Cultural Environment . . . . . . .
Classification of Representative Firms . . . .
Labor Utilization by the Firm . . . . . . . .
Capital Utilization . . . . . . . . . . . . .
Purchased Material Inputs . . . . . . . . . .
Output Harvested . . . . . . . . . .
Enterprise Budgets for Small-Scale Fishing
Firms . . . . . . . . . . . . . . . . . .
Comparison with Large-Scale Fish Production
Summary . . . . . . . . . . . . . . . . . . .

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iv

13

13
13
23
30
33

35
35

37
38
47

49

49
52
56
68
77
79

81
95
98

5. PROCESSING AND MARKETING OF FISH SUPPLIES . . . . . . 101

Overview of Marketing Channels . . . . . . . . 102
Description of Smoke Processing . . . 103
Wholesaling of Smoked Fish in Urban Centers . 106
Smoked Fish Retailing in Urban Centers . . . . 111
Frozen Fish Wholesaling . . . . . . . . . . . 113
Summary . . . . . . . . . . . . . . . . . . . 115

UlU'IUIUIUIUI
O‘M-FUNH

6. AN AGGREGATE MODEL OF THE FISHERIES SUBSECTOR . . . . 117

6.1 Description of the Model . . . . . . . . . . . 117
6.2 Parameters of the Model . . . . . . . . . . . 126
6.3 Modeling of the 1974 Situation . . . . . . . . 128
6.4 Evaluation of Alternative Development

Strategies in 1980 . . . . . . . . . . . . . 132
6.5 Summary . . . . . . . . . . . . . . . . . . . 147

7. SUMMARY AND POLICY IMPLICATIONS . . . . . . . . . . . 151

7.1 Summary of Findings . . . . . . . . . . . . . 152
7.2 Policy Implications . . . . . . . . . . . . . 159

APPENDICES O O O O O O O O O . O O O O O O O O O O O O O O O 165

BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . 174

TABLE

1.1

2.1

2.2-

2.3

2.4

2.5

2.6

2.7

2.8

3.1

4.1
4.2
4.3

4.4

4.5

4.6

LIST OF TABLES

SIERRA LEONE: QUANTITY AND VALUE OF FISH IMPORTS,
1969-74 0 o o o o o o o o o o o o o o o o o o o o o

CHARACTERISTICS OF SMALL-SCALE BOAT TECHNOLOGY IN
SIERRA LEONE . . . . . . . . . . . . . . . . .

GEOGRAPHICAL DISTRIBUTION OF SMALL-SCALE FISHING
BOATS o o o o o o o o o o o o o o o o o o o o o 0

DESCRIPTION OF SMALL-SCALE NET TECHNOLOGY . . . . . .

ESTIMATED SIERRA LEONE FISH CATCH FROM FRESH-WATER
AND MARINE SOURCES, 1965-1973 . . . . . . . . . . .

ESTIMATED COMPOSITION OF FISH CATCH BY SPECIES . . .

APPROXIMATE AREA OF CONTINENTAL SHELF AT VARIOUS
DEPTHS WITHIN SIERRA LEONE TERRITORIAL WATERS . . .

SIERRA LEONEAN COAST: ESTIMATED WEIGHT OF STANDING
CROP (TOTAL LIVE WEIGHT OF FISH) IN METRIC TONS AT
VARIOUS DEPTHS PER MILE OF COASTAL FRONT . . . . .

ESTIMATED MARINE FISH CONSUMPTION IN SIERRA LEONE,
19 74 C O O O O O O O O O O O O O C O O O C O O O 0

DESCRIPTION OF QUESTIONNAIRES FOR MARINE FISHERIES
SURVEY O C O O C O O O O O O O O O O O O O O O O O

SOCIAL AMENITIES FOUND IN FISHING VILLAGES BY REGION
REPRESENTATIVE FIRM TYPES AMONG SMALL-SCALE FISHERIES
AVERAGE HOUSEHOLD SIZE BY FIRM TYPE . . . . . . . . .

ANNUAL LABOR ALLOCATIONS AMONG ALTERNATIVE ENTER-
PRISES BY FIRM TYPE . . . . . . . . . . . . . . . .

WAGE RATE PER HOUR IN FISHERIES BY REGION BY SEX . .
VALUE OF WORKING STOCK CAPITAL BY REPRESENTATIVE
FIRM TYPE 0 O O O O 0 O O I O O O O O O O O O O O 0

vi

Page

17

18

21

24

25

26

27

29

41
51
54

57

59

67

69

4.7

4.8
4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

5.1

5.2

5.3

ACQUISITION COST OF EQUIPMENT INVESTMENT BY

FIRM TYPE 0 O O O O O C O C O C O O O C O I O O O O 71
.ANNUAL SERVICE COSTS OF FISH PRODUCTION EQUIPMENT . . 76
ANNUAL PURCHASED MATERIAL INPUTS BY FIRM TYPE . . . . 78

ANNUAL FISH CATCH OF MAJOR SPECIES PER FIRM BY
FIRM TYPE . . . . . . . . . . . . . . . . . . . . . 80

AVERAGE ANNUAL EXVESSEL SALES PRICE FOR MAJOR
SPECIES BY REGION, 1974 . . . . . . . . . . . . . . 82

FISH PRODUCTION ENTERPRISE BUDGETS FOR SMALL-SCALE
REPRESENTATIVE FIRM TYPES BASED ON SURVEY DATA 0F
93 FIRMS IN SIERRA LEONE UNDER ACTUAL CONDITIONS:
40 PERCENT COST OF CAPITAL AND 36 PERCENT IMPORT
DUTY 0N FISH EQUIPMENT . . . . . . . . . . . . . . 89

FISH PRODUCTION ENTERPRISE BUDGET FOR SMALL-SCALE
REPRESENTATIVE FIRM TYPE BASED ON SURVEY DATA OF
93 FIRMS IN SIERRA LEONE UNDER ASSUMED CONDITIONS:
20 PERCENT COST OF CAPITAL AND 36 PERCENT IMPORT
DUTY OF FISH EQUIPMENT . . . . . . . . . . . . . . 92

FISH PRODUCTION ENTERPRISE BUDGETS FOR SMALL-SCALE
REPRESENTATIVE FIRM TYPE BASED ON SURVEY DATA OF
93 FIRMS IN SIERRA LEONE UNDER ASSUMED CONDITIONS:
40 PERCENT COST OF CAPITAL AND 10 PERCENT IMPORT
DUTY ON FISH EQUIPMENT . . . . . . . . . . . . . . 93

FISH PRODUCTION ENTERPRISE BUDGETS FOR SMALL-SCALE
REPRESENTATIVE FIRM TYPES BASED ON SURVEY DATA
OF 93 FIRMS IN SIERRA LEONE UNDER ASSUMED CONDI-
TIONS: 20 PERCENT OF CAPITAL AND 10 PERCENT
IMPORT DUTY ON FISH EQUIPMENT . . . . . . . . . . . 94

FISH PRODUCTION ENTERPRISE BUDGET FOR LARGE-SCALE
FIRMS BASED ON SURVEY OF ONE LARGE-SCALE FIRM IN
FREETOWN, SIERRA LEONE . . . . . . . . . . . . . . 96

COSTS AND RETURNS FOR SMOKE FISH PROCESSING USING
TRADITIONAL TECHNOLOGY BASED ON SURVEY OF 93
FIRMS IN SIERRA LEONE (PER 100 POUNDS 0F RAW FISH) 104

COSTS AND RETURNS FOR SMOKE FISH PROCESSING USING
MODIFIED ALTONA OVEN (PER 100 POUNDS OF RAW
FISH) O O O O O O O O O O O O O O O O O O O O O O 107

COSTS AND RETURNS FOR SMOKE FISH WHOLESALING TO
URBAN CONSUMER CENTERS BASED ON TRACER SURVEY OF
20 TRADERS (PER 100 POUNDS OF RAW FISH
EQUIVALENTS) . . . . . . . . . . . . . . . . . . . 109

vii

5.4

5.5

6.1

6.2

6.3

6.4‘

6.5

6.6

COSTS AND RETURNS FOR SMOKED FISH RETAILING TO
URBAN CONSUMER CENTERS BASED ON MARKET SURVEY OF
57 TRADERS (PER 100 POUNDS OF RAW FISH EQUIVALENTS)

FROZEN FISH WHOLESALING TO URBAN CONSUMER CENTERS,
1974 (COST PER PIETRIC TON) o o o o o o o o o o o o o

SOURCES FOR PARAMETERS OF THE AGGREGATE MODEL . . . .

COMPARISON OF ALTERNATIVE RUNS OF 1974 MODEL WITH
ACTUAL 1974 SITUATION . . . . . . . . . . . . . . .

INTERREGIONAL COMMODITY FLOW IN 1974 AND 1980 . . .

MARGINAL VALUE PER LEONE OF FISH PRODUCED FOR
ADDITIONAL EQUIPMENT UNITS BY TYPE OF FISHING
TECHNOLOGY AND BY REGION IN 1974 BASE RUN . . . . .

LEVEL OR RESOURCE UTILIZATION AND AGGREGATE RESULTS
OFALTERNATIVE198ORUNS . . . . . . . . . . . . .

MARGINAL VALUE OF ADDITIONAL RESOURCES BY REGION
IN ALTERNATIVE 1980 RUNS . . . . . . . . . . .

viii

112

114

127

129

. 131

133

134

. 138

FIGURE

2.1

301 _

4.1

4.2

4.3

6.1

LIST OF FIGURES

Page

SIERRA LEONE MARINE FISHERIES PRODUCTION
ENUMERATION SITES . . . . . . . . . . . . . . . . l9

SIERRA LEONE: MAJOR MARKET CHANNELS BETWEEN
PRODUCTION AND CONSUMPTION CENTERS . . . . . . . 45

SEASONAL PROFILES FOR TOTAL FIRM LABOR BY REPRESEN-

TATIVE FIRM TYPES, 1974-1975 . . . . . . . . . . 61
SEASONAL PROFILES FOR FISH CATCH BY REPRESENTATIVE

FIRM TYPE, 1974-1975 0 o o o o o o o o o o o o o 83
TOTAL DOMESTIC SEASONAL SUPPLY FROM SMALL-SCALE

FISHERIES, 1974-1975 . . . . . . . . . . . . . . 87
COMMODITY FLOW DIAGRAM OF FISHERIES SUBSECTOR . . . 119

ix

LIST OF APPENDICES

APPENDIX Page
1. MAJOR COMMERCIAL FISH SPECIES OF SIERRA LEONE . . . 165
2. ADMINISTRATION OF THE SURVEY . . . . . . . . . . . 166
3. NUMBER OF BOAT UNITS AVAILABLE IN EACH REGION . . . 169
4. MARINE FISH DEMAND BY TYPE AND REGION . . . . . . 170

5. CONSTRUCTED COSTS AND RETURNS FOR RAW FISH WHOLE—
SALING-RETAILING IN FREETOWN (PER 100 POUNDS OF
RAW FISH) o o o o o o o o o o o o o o o o o o o o 171

6. CONSTRUCTED COSTS AND RETURNS FOR SMOKED FROZEN
FISH RETAILING IN URBAN CONSUMER CENTERS (PER
100 POUNDS OF FROZEN FISH) . . . . . . . . . . . 172

7. CONSTRUCTED COSTS AND RETURN FOR SMOKED FISH AND
SMOKED FROZEN FISH RETAILING TO RURAL CONSUMERS
(PER 100 POUNDS 0F SMOKED FISH) . . . . . . . . . 173

CURRENCY AND MEASURES

$1.00 = 0.80 Le 1974/75
1 Metric Ton = 2200 lbs.

1 Fathom = 6 feet

xi

CHAPTER 1

INTRODUCTION

1.1 The Problem Setting

 

The oceans, covering approximately 70 percent of the earth's
surfaCe, have long been considered a major potential source of food.
Presently about 70 million metric tons of fish are captured annually
or approximately one—half the world's potential harvest [Lampe et a1.,
1974]. Also, fish and fish products contribute a marginal 4.6 percent
of the world's total protein consumption [FAO, 1968]. As pOpulation
pressures mount on land-based resources, many nations and interna-
tional organizations are focusing on the technical, political and
economic deve10pments necessary to improve the productivity of the sea.

Global figures, however, do not convey the varying role which
regional fisheries play in the developing world. Among the ten West
African coastal countries ranging from Nigeria to Senegal, estimated
daily per capita protein consumption averaged only 52.5 grams, approxi-
mately 25 percent less than the recommended daily per capita requirement
for this region. Estimated protein consumption in Sierra Leone was
below the group average with 49.2 grams per capita per day [FAO, 1971-a].
Although such estimates may easily underestimate actual consumption as
certain indigenous sources of protein are less frequently reported, the
need for an improved protein supply is evident. However in this same

region,fisheries supply nearly nine percent of total protein consumed

which is more than double the share of world protein consumption
contributed by fisheries.

Efforts to develop inexpensive protein from alternative animal
and vegetable sources have met with limited success in developing
countries. Poultry and eggs are frequently noted by nutritionists as
the panacea for protein deficient diets in deve10ping countries.

MOdern poultry farms on the outskirts of the capital city may be found
in almost any deve10ping country. While many such firms are able to
survive on the high incomes of urban consumers, the masses of the popu-
lation do not have the effective demand to purchase eggs and poultry
products.1

Cattle and other ruminant animals, while capable of utilizing
material nondigestible by humans, are restricted geographically because
of climate, disease, and pests. Tsetse fly and the threat of sleeping
sickness have limited cattle production in Sierra Leone to the northern
regions.

Cereals and legumes account for over 81 percent of the total
protein intake in Sierra Leone [FAO, l97lra]. In spite of the large
variety of vegetables grown only a few such as groundnuts, cowpeas, and
beans supply the vital amino acids (such as lysine) found in animal
proteins [Billings, 1971].

Sierra Leone looks to the sea as a major source of animal

protein. Approximately 66 percent of all animal protein consumed in

 

1For example in reviewing commercial egg schemes established
by the Regional Government of Eastern Nigeria, Billings [1971] con-
cludes that even with subsidized inputs (B 5,000,000 public investment)
commercial eggs have failed to become the cheap food supply originally
anticipated and are incapable of solving the protein problems of the
masses.

Sierra Leone is derived from fish, the highest share in any West
African coastal country [FAO, l971—a]. Based on a nationwide survey of
250 rural households in Sierra Leone, Byerlee and King [1976] found
that expenditures on fish and fish products ranked second only to rice
in total consumption expenditures.

Although the government of Sierra Leone has placed high priority
on developing its fishing subsector, there has been little real increase
in domestic production since 19651 [FAO, 1974-a]. Sierra Leone remains
dependent on fish imports to satisfy domestic demand. Using revised
estimates of domestic fish landings of approximately 50,000 metric
tons [Government of Sierra Leone, 1974-a] annual imports currently
account for approximately 15 percent of total domestic fish supply.
Table 1.1 shows that fish imports have constituted a drain in foreign
exchange earnings of over 2.4 million dollars annually since 1969 of
which 75 percent was expended for fresh chilled and frozen fish caught
in offshore fishing grounds.

Several international trends in the supply and demand of fish
for human and fish meal consumption directly affect deve10pment poli-
cies in Sierra Leone. First, there has been a decline in fish catches
in EurOpean and Western countries over the past decade. The Asian and
African catch increased steadily at an average annual rate of 6.0 and
5.4 percent respectively over the past decade. The world fish catch
grew at approximately 4.4 percent annually from 1964-71, peaked at

70 million metric tons in 1970-71 and has since declined at

 

1A 67 percent increase in 1972—73 production figures over pre-
vious levels was a function of revised estimating procedures rather
than increased production.

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approximately 3.2 percent annually over the l97l—73 period. The
decline since 1970 has been primarily a function of reduced catches
by both North and South American fleets [1975]. Not only did the
Peruvean anchovy industry, which in recent years supplied

nearly two-thirds of exports of world fish meal, experience a near
collapse in the early 19703, but catches in the North Atlantic have
also declined through 1974. Major producers such as the U.K., Norway,
Portugal, Japan and Canada all experienced declining catches in

1974 [FAO, 1975].

Brown and Eckholm [1974] note that as developed countries
exhaust the resources of northern fisheries, they have turned in-
creasingly to the southern areas. They see more intense international
competition in such regions as the Indian Ocean and the South Atlantic
as inevitable. Such predictions are borne out as one looks at recent
trends in fish catches in the East-central Atlantic. The catches
made by long distance foreign fleets along the Atlantic coast of
Africa have been increasing faster than the catch of the African
coastal countries. Although locally based fleets in the East-
central Atlantic accounted for 86 percent of the total catch in this
area in 1958, this percentage declined to 33 percent by 1972
[FAO, 1974-b]. Aubray [1972] observes that "there has been a specta-
cular increase during the decade of 1960-70 of more than 500 percent
in the catch by the non-African based fleets Operating mostly over
and at the edge of the west African continental shelf . . . while the
total African catch increased only by about 80 percent during the same

period."

The estimated stock of marketable species in territorial
waters of Sierra Leone seems ample to sustain expanded fish production
in the future. One effort to assess the fisheries resources along
the West African Coast was the Guinean Trawling Survey of 1964
[Williams, 1969]. This survey estimated a total standing stock in
territorial waters of 113,000 metric tons in the 15-50 meter depths
and an additional 34,000 metric tons in the 50-200 meter depths,
nearly all of which are demersal (bottom) species. Because trawler
equipment was used, these estimates tend to underestimate the stock
of inshore pelagic (surface water) species. Other official sources
estimate pelagic fish stocks at approximately 300,000 metric tons.

The estimates of sustainable harvest of demersal and pelagic stocks
combined range from 100 to 140 thousand metric tons annually, compared
to current annual catches of approximately 50 thousand metric tons
[Government of Sierra Leone, 1974-b]. In addition, Aubray [1971]
points out that as long as Easterly flowing Guinea currents provide
abundant larvae from unexploited populations north of Sierra Leone for
local rearing grounds, high rates of fisheries exploitation can be
pursued without depleting local stocks. The evidence indicates that
the potential sustainable harvest of fish is approximately two to
three times the present rate of harvest by Sierra Leone [Government of‘
Sierra Leone, 1974-b].

The Government of Sierra Leone, after considering the domestic
demand for fish, the cost of foreign imports, and the level of domestic
fish stocks, has established ambitious goals for the fisheries sub-
sector. During the current five year development plan, 1974-75 to

1978-79, government planners hope to implement investment programs and

policies to expand production by an annual rate of 14.1 percent
[Government of Sierra Leone, 1974-b]. Self-sufficiency in fish is
expected within the planning period.

Government policy makers have a choice between several alter—
native strategies which could aid in achieving their production goals.
The strategy of developing the large-scale fish industry and associa-
ted frozen-fish marketing channel has historically appealed to planners.
It is frequently easier to obtain external financing and to administer
credit and control operations in large-scale schemes than in small-
scale fisheries. Small-scale fisheries development is another alter-
native. The stimulation of either large or small-scale fishing could
be encouraged (1) through direct public investment and ownership,

(2) by encouraging domestic and/or foreign private investment through
direct public subsidy, or (3) through indirect public support through
adjustments in import duties and quotas.

MOre specifically, policy makers are faced with an array of
alternative technologies in small and large-scale production as well
as various credit and extension programs. Present technologies range
from (1) the one-man "kroo" canoe with accompanying cast net or hook
and line gear to (2) the standard bonga canoe fishing for demersal
species with bottom nets to (3) the large "salla" or even larger
"fante" boat complete with outboard engine and ring net up to (4)
the large-scale diesel powered vessels operating a bottom or midway
trawl.

Credit and extension programs include (1) the present program

which relies on the local trader for borrowed capital and an indigenous

apprenticeship program for passing on traditional skills to (2) the
possibility of allowing commercial banks to increase their discount
rates to cover the added cost of loan servicing in remote areas to
(3) the reestablishment of a direct publicly-subsidized credit scheme
and regional extension outstations with an active program for village
level extension.

Research on fisheries in West Africa has focused primarily on
(a) biological-technical research which has examined isOlated technolo-
gical improvements and (b) historical analyses of Government programs.
To date there are few if any micro-economic studies of small-scale
fisheries in tropical Africa in spite of the frequent complaint of the
lack of micro-economic data for policy analysis. Lawson and Kwei
[1974] review Ghana's experience with developing the fisheries sub-
sectors through (1) the Charter Party Scheme which was initiated in
1953 to break the grip of the traditional money lender over small-
scale fish production and marketing and also to assist small-scale
fishermen through motorized vessels and (2) establishment of the State
Fishing Corporation to operate large-scale trawlers in order to elimi-
nate the importation of fish. In their review of these two programs
they prOvide data on the growth in aggregate output and employment.
However, in the fisheries subsector they fail to detail the financial
and economic costs and benefits of large-scale versus small-scale
fisheries.

Kuranchie [1972] examines the smoke processing practices of
Tema, Ghana based on a small sample of one—time interviews. Although

his analyses do provide cost estimates of smoke processing and

distribution, he examines the industry at only one point in the season,
one locality, and one processing technique. His analysis of distribu-
tional costs is based on one processing-distribution channel instead
of examining the entire integrated production-processing-delivery
system or the seasonality of activities over the production cycle.

Other research efforts have been largely of a biological or
technical nature. In Sierra Leone the United Nations DeVelOpment Pro-
gram undertook a series of biological and stock assessment investiga-
tions in coastal waters in the late 19603 [FAO/UNDP, 1968] [Williams,
1969]. Their findings are essential in planning fisheries investment
and exploitation in the future. However, to date little economic
data has been collected in Sierra Leone other than basic aggregate
statistics on total fish catch.

In summary, the few economic studies on fishing in West Africa
to date have been deficient both in terms of quantity of economic data
generated and in terms of breadth of scOpe of the studies. Moreover,
these studies have failed to provide policy makers with a solid micro-
economic understanding of the operation of the industry and have failed
to provide data on the alternative production, processing and marketing
technologies and the costs and benefits of these alternative develop-

ment strategies.

1.2 Objectives of the Study

 

In evaluating the current system and defining its inadequacies,
relevant performance goals or criteria need to be clarified. The
quantity and quality of fish produced and delivered is an important

consideration. A system which is technologically progressive and

10

economically efficient in its use of scarce resources is a second
important governmental goal. Other important criteria are the leyel
and distribution Of income and employment for those who participate

in the production-delivery process. I

\r

This thesis focuses on the issues involved in improving the
production-deliveTy system of marine fiSh1 as a source of animal
protein for Sierra Leonean consumers. Fresh—water fisheries which
OUrrently contribute approximately 2 percent of the annual domestic
catch will not be considered.2

The objectives of this research fall into several general areas:

(1) To provide a micro-economic description of the fish produc-
tion, processing and marketing system in Sierra Leone;

(2) To identify the barriers to improved performance of the
fisheries subsector with emphasis on the constraints in the production-
delivery system;

(3) To develop an aggregate model integrating the production,
processing, and marketing industries;

(4) Through the execution of their model, to examine the
aggregate impact of policies affecting marine fisheries production such
as (a) improved credit, (b) manpower training and extension programs,

and (c) alternative import policies for capital equipment and frozen

fish imports;

 

1Marine fish are defined as those species living in the high
salinity sea water as Opposed to fresh-water fish which inhabit the
low salinity waters of inland rivers and lakes.

2Although official estimates place output of fresh-water
fisheries at about 1,000 metric tons annually, it is generally be-
lieved tO be considerably more.

ll

(5) And to provide policy makers with relevant data and

alternative strategies for improving marine fisheries in Sierra Leone.

1.3 Outline of this Thesis

 

In examining the fisheries subsector as an integrated produc-
tion-delivery system, Chapter 2 will focus on a description of fisher-
ies in the Sierra Leone economy. The structure of the small and large-
scale production industries will be described in detail in Chapter 2
followed by a review of governmental policies affecting fisheries
during the colonial and post-independence periods. Chapter 3 presents
the methodology used in collecting primary data. Chapter 4 will pro-
vide a micro-economic analysis of the small and large-scale production
industries. Beginning with a brief description of the socio-cultural
framework in which the small—scale firm Operates, Chapter 4 examines
in detail the use of labor, working capital and equipment capital as
well as the resultant seasonal output of various small-scale
production technologies. The concluding sections of Chapter 4 combine
these analyses to form representative firm budgets under alternative
assumptions about capital cost and equipment duty. These are compared
'with budgets for large-scale firms.

A descriptive analysis of the processing-marketing system will
introduce Chapter 5. Budgets presenting the costs and returns to
resources used in smoke processing, smoke fresh fish wholesaling as
well as raw frozen fish wholesaling will also be compared in Chapter 5
identifying major items Of expense and areas of high returns. Chapter
6 will develop an aggregate model, integrating the results Of Chapter 4

and 5. This model will be used to examine the effects of alternative

12

deve10pment strategies on resource use and output produced over the
1974-1980 period. The final Chapter summarizes the major findings and

discusses policy implications.

CHAPTER 2

FISHERIES IN THE SIERRA LEONE ECONOMY

2.1 Economic Contributions Of Fisheries

 

Sierra Leone has an area of 27,900 square miles and a popula-
tion Of about 2.7 million, of which 22 percent live in urban centers.
Over 75 percent of the population are employed in agriculture which is
the most important sector, contributing over 30 percent of the total
Gross Domestic Product and 20 percent of domestic exports. Fisheries,
one of four agricultural subsectors, contributed about one percent of
the Gross Domestic Product in 1972. This relative contribution has
declined from a previous peak of about 2.2 percent in 1968 [Government
of Sierra Leone, l973-a]. In terms Of employment, an estimated 12,000
people or 1 percent of the national labor force derive income from
fish production industries [Propesca, 1974]. An additional 12,000 are
employed in ancillary industries supplying inputs, processing and

delivering output to consumption centers.

2.2 Descriptive Profile Of the Subsector

 

The fisheries subsector can be clearly divided into two struc-
turally distinct industries: (1) the small-scale fisheries production
and smoked fish marketing channels and (2) the large-scale fisheries
production and associated marketing channels. For the purpose of this

study, small-scale fisheries are defined as all fishing firms with less

13

14

than Le20,000 invested in equipment when valued at original acquisi-
tion cost. These firms are usually owned by a single family. Current-
ly small-scale firms Operate boats Of indigenous plank or dugout
construction without the use of inboard (built-in) engines and are

based at a marine or estuarine beach landing site. Large-scale firms
include any firm having more than Le20,000 invested hithe original acqui-
sition cost of equipment. These firms are usually managed by a partner—
ship Or joint venture pUblic corporation. They Operate vessels licensed
for fishing by the Government of Sierra Leone. These vessels are

powered by inboard engines.

2.2.1 Large-Scale Production-Delivery System

Forty-four large-scale fishing vessels possessed valid licenses
from the Ministry Of Agriculture and Natural Resources for fishing in
Sierra Leone territorial waters (within 200 miles from shore) during
the January-June period, 1975 [Government of Sierra Leone, 1975-a].
Thirty—three of the 44 vessels were foreign owned but chartered by
locally based firms which Operated as servicing, cold-storage tran-
shipment depots for the foreign vessels.1 A portion of the chartered
catch was purchased and imported by the local firm by payment in
foreign currency. A total of 11 of the 44 boats were registered as

"Owned" rather than "chartered" by local companies.2 Chartered vessels

 

1Twenty chartered vessels were contracted by a single firm and
were engaged in shrimp trawling only. The thirteen remaining vessels
active in demersal or pelagic fishing were chartered by four firms with
their relative shares being 69%, 15%, 8% and 8% respectively.

2These eleven vessels were owned by five companies as follows:
two firms owning four vessels each and three firms owning one vessel
each.

15

are not included in the present study. All large-scale firms were
based in Freetown.

Large-scale production equipment consists primarily of vessels
Of steel construction and a purse seine (nylon encircling net) or a
midwater or bottom trawl (conical bag net). Steel constructed trawlers
vary in size from 60 to over 200 ft., although boats in the 60-80 ft.
range are most pOpular. They are powered by inboard diesel engines.
One firm is constructing two 40 foot vessels of local wood but all
other vessels are imported. Each trawler has one full time skilled
captain and an unskilled support staff on board and ashore of approxi-
mately 25-30 men for a 60-80 foot vessel and 40-45 men for a 100-120
foot vessel. The size of the support staff varies with the size of
vessels and type of equipment on board.

Processing of the catch from large-scale vessels "owned" by
local firms begins with ice chilling immediately after capture. The
catCh is sorted by Species and size and placed in wooden boxes of
10-13 kilogram capacity interlayered with ice which has been purchased
before going to sea. The catch is landed during the night and sold to
wholesalers or retailers the following morning. A majority of the
catch is immediately taken to Freetown markets before being gutted and
sectioned for retailing. Wholesalers from nearby inland markets are
known to have chartered half ton lorries and after re-icing the fish
and insulating them with burlap bags, delivered them as fresh fish to
markets inland. This, however, accounts for a minor fraction of the
catch.

Landings from the chartered vessels are usually ungutted,

packaged and frozen on board the foreign vessel in 20-30 Kg cartons.

16

Importation of these chartered landings is highly concentrated with
one firm accounting for 88 percent of all fresh and frozen imports
over the 1969-72 period. Frozen imports were marketed by the same
firm through an exclusive chain Of wholesale cold storage depots in
11 inland centers. The remaining 12 percent of fresh and frozen
imports was shared by four smaller firms dealing with fresh or ice-

chilled fish only.

2.2.2 Small-Scale Production-Delivery System

A base line survey conducted by the Government Fisheries
Division in 1974 identified a total of 6,150 small-scale boats or
approximately 5,000 firms Operating from 554 marine and estuarine
landhngsflxes scattered along the 205 mile coastline [Government of
Sierra Leone, 1974-a]. Each firm employs three major pieces Of equip-
ment--the boat, the net or line and the propulsion equipment--which
vary with the size and type of technology used. Table 2.1 describes
the types of boats currently used in small-scale production. All boats
are made of indigenous hardwoods by local builders. The fante boat
due to its size and type of construction is capable of traveling con-
siderable distances at sea. The Open boxed well which houses the
outboard engine, protects the engine from the direct impact of waves
and permits better Operation in adverse weather conditions than does
the salla boat. The smaller boats such as salla and especially the
standard canoe are more restricted as to the distance at sea and the
weather conditions under which they Operate.

The geographical distribution Of the various boat types is

shown in Table 2.2. Figure 2.1 shows the various provinces and their

17

TABLE 2.1
CHARACTERISTICS OF SMALL-SCALE BOAT TECHNOLOGY IN SIERRA LEONE

 

 

 

Boat Type of Type of Type of Crew
Type Construction Length Width8 Propulsion Net Used Size
(ft.) (ft.) Used
Fante Plank 35-50 5—8 Outboard Ring 6—8
Salla Plank 25-40 4-6 Outboard or Ring or 4-6
paddle beach
seine
Standard Dugout and 20-24 1.5—2.5 Sail or Ring, 1-5
canoe plank paddle set or
drift
Kroo Dugout 16-20 1.4 Paddle Cast or 1—2
canoe hook and
line

 

 

 

 

 

 

 

SOURCE: Observation by the author.

aWidth measured as widest point of top surface.

l8

.wanmaam>m was muacL Lo amneac aOuOu mace mm mmmao>m anneaumc co comma mum mma< camumoz COL mama umon Ad csovxmwamm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

.HonqNoa .mcoma maumam LO ucmECOO>OU_ mama anon >9 GBOpxmman cam Hananoa .Ocoma whamam LO OCOECOO>OU_ mamuou aNCOawOm "mmumDOm
Om NOOH Oma.o Nooa Nm.m «mm Ocoma mapmam
a: Nmm mafia Nam mom 2 852.: 523:8
cc Nmm omm.a Nmm Nm.m mo mmmh< cagumuz
we Noe amq.~ Noe No.c om Ouca>oum :Lozuccz
acaumz Ca
mmocwo moca>oum cw
meaaummou mumom mumom LO :OOLx: mumom mumom LO
Oaaz Gum amuoe Lo amnesz aOuOH LO amuoe mo Canasz
mumom wwmucmuumm mumsaxouaa< ammucmuamm mwmucwoawm Oumeax0uaa<
mmaxe aa< mo aMuOH Oocmu coax coawwm
NOOH wa noo.m NQOH No qqm Nooa Nm.< mum wcooa whamam
Non Nmo mom.a Na Na mm Nam No.e om mosa>oum Cuwcuaom
Nmm wa aw~.a Nmm No wma Nmm Nm.q mo mmma<,aumumwz
Non Nmn amw.a Nan Nca awn New No.m oNH woca>oam camcuaoz
cowumz :H mucH>oam coaumz ca wuca>oum COaumz ca mosa>oam
mmocmu ca mumom ca mumom ca
vumccmum wumom mumom mo maamm mumom mumom mo Oucmm wumom mumom mo
Hmuow mo amuOH mo amnEsz amuoe LO amuos mo amnesz amuoe mo anuow mo amnezz
ammucmuuwm mwmucmuaom mumaaxoaaa< ammucooamm mwmucmuamm OumEaxouaa< mwmucouamm wwwucwouwm Oumeaxouaa<
mocwo vamvcmum umom waamm umom Oucmm

 

 

 

umom mo maze

 

ceammm

 

 

MZqu <xmmHm zH mH<Om oszmHm ma<UmIAA<Zm mo ZOHHDmHMHmHo A<UHzm<moomo

N.~ m4m<H

19

 

 

 

 
   
 

 

  
      
  
  
    

 

 

 

 

 

 

 

 

 

14° 13° 12° 11°
I I I I
10. L- /_ —o—.—.—.— \ _lo°
./ .’.\o’.’. ‘9‘.
I \.
GUINEA (’ \, GUINEA
z" '\.
,’ NORTHERN PROVINCE 5.,
F. o\.
_ 2' \
I v r}.
. .5'"\
9° _ I ~"“"" . ' I a 9°
"\ 3 "m °‘ -
’. " 21:7 Northern Region " l\
""4 ‘la y MO d h 9 " II
- . ya a- n o e . _
‘. .J \ 3 .’
8° r- ) WESTERN \ - -’ .--.-. 8°
' " I I .( ./ 30l
30 .\AREA “fa-g ,,..,_.".JEASTERN PROVINCE ,;_ .z [
. '0 .‘o . . '. ‘-J o
.. York I fi‘" .5. . .0. .0 J!
\ a ".' I. .'O’I’
’. ) SOUTHERN PROVINCE . f.
8° — .\ «k ‘ ! .4 8a
.' : S uthern Re ion : I
'\ Tissana I - 3 ’9
.. . '- j LIBERIA
- .' a“ g. .I
\ . g D \\ it
."\. 3' International a...—
SherbrO)'/.‘, ‘9'“ Boundary
Is. \ . . . \ . \ S\ -: Provincial ..........
SOUTH EAST ' '- .-’ Boundary
ATLANTIC \, (I Resource Region _“ __
7° ._ OCEAN \' 'l.’ Boundary ._ TI
on . . 394 1“}0 Miles '\._ , 100 Meter Contour
‘_‘ "o’ f Continental "N".
'—'Tr I I 1 .’
0 40 80 Kilometers ./ Shelf
i” Enumeration Site ‘
I
J 1 1 ' l
14' 13° 12° 11°

 

 

FIGURE 2.1

SIERRA LEONE MARINE FISHERIES PRODUCTION ENUMERATION SITES

20

associated regions of continental shelf. The standard canoe is by far
the most popular boat accounting for 83 percent of all boats. Northern
Province contains a larger share of the more modern, plank-built Salla
and fante boats than either of the other regions. The absence of the
Snapper boat which was pOpular 30 years ago [Stevens, 1945] is
striking.1 This boat which stayed at sea for a five to seven day
period before landing was capable of carrying a crew of four to six men
plus fuel for smoke processing the catch. It was propelled by paddle
and sail. Apparently it has largely been replaced by longer, narrower
motorized boats capable of quickly delivering the raw catch ashore.

The Northern Province and Western Area both benefit from a wide
area of continental shelf within the 100 meter depth contour as shown
in Figure 2.1. This explains why Northern Province and Western Area
have the highest concentration of producing units per mile of coastline,
more than double that of Southern Province.

Table 2.3 describes the various types of nets. The ring, set,
drift and cast nets capture the fish by entangling the fish in the net
as it attempts to pass through. However, the beach seine guides fish
along two outstretched wings toward a central conical bag. The beach
seine is pulled ashore by two groups of eighteen to twenty men on the
beach.

Propulsion equipment for small-scale fisheries includes the

outboard engine, sail or paddle. A boat usually carries several sets

 

1Western Area, for which detailed data on boat type was not
available, might have contained some snapper boats. In the random
sample of 110 boats described in Chapter 3 only one snapper boat was
identified.

21

.uomm xfim haoumawxoueam mamavo Eonummm

 

 

%oan
Ho cmaum
mxoo: ufima Inmam 0» mafia
some «la I: II cows moxoom vmuosuc< vmfium> mam xoom
umumamfiv “mumsmav
oomm umom
omuqm mo omnqm «0 m>onm Eoum
o.H HmOfisoo HOOficoo um>o a3ou£H mcwxsflm mommusm umc ammo
won
Hmuuamu
aw o.H wcfi3 pom oposm
\mw:HB msonumw mauuwouwamm Scum mafiom
cw o.~ wlq OOH a“ moaoufioam csmuo mumwusm nomom
ucmuusu ou
umaaowccoauma mafiumoam
m.H qua oomloma mafia unwfimuum mosh oommusm um: unfiua
ucoupsu ou
umHDOHUcmmpmm
o.m-m.m ens ooeuoma mafia uswsmuum emuonua< souuom own now
wcwumoaw
m.H NHIm oooloo~ ucoamauufiucm «mum communm um: wafim
AmmnuaHv
mufim ammz «AmaonuOhv mamaonummv muaummo youmS ca nouns a“
oumawxouaa< numwz summon mo venom: mafiafinoz aoauwmom om%a umz

 

 

 

 

 

 

 

 

woonozmuma Hmz MA<UmIAA<Zm mo onHmHmommo

m.~ mqm<a

22

of wooden paddles as a precautionary measure although other types of
propulsion may be used. Outboard engines vary from six to twenty—five
horsepower. Although many different brands (i.e., Mercury, Johnson,
Cthsler, etc.) are sold, Japanese brands dominate the market. Because
of Unanon-interchangeability of parts, each brand is serviced by its
own franchised retailer. Sails are usually sewn by local tailors from
flour sacks or imported tarpaulin. Wooden paddles are approximately
six to eight inches in width with a two to three foot handle. They are
carved locally by fishermen or carpenters.

Processing of the fish catch for the small-scale industry usually
consists of hot-smoking the fish immediately after landing for a period
of four to six hours. If the processor (usually the producer's wife)
is not assured of an immediate sale to a wholesaler, the fish are turned
and smoked for an additional two to three hours before storing. Smoking
is done on a raised platform (banda) about two to three feet above the
ground and usually covered with a heavy wire mesh. The platform size
varies from.twenty~four square feet to several hundred square feet
depending on the size of the fishing operation, estimated yield, and
availability of labor to do the processing.

Wholesalers from inland markets deveIOp informal buying rela-
tionships with fish producers and processors. If no wholesaler is
available, the processor may undertake the wholesaling activity. A
detailed description of the wholesaling—retailing industry will follow

in Chapter 5.

23

2.3 Trends in Domestic Supply and Demand for Fish

 

2.3.1 Supply Conditions

A degree of caution is advisable in interpreting domestic catch
statistics as secondary data on fish production are weak and fraught
with inconsistencies. Estimated trends in fish catch are shown in
Table 2.4. The sharp reduction in the small-scale marine catch in
1968 and its gradual recovery in 1969-70 was due to the expulsion of
some 1,700 Ghanian fishermen in early 1968 and their gradual replace-
ment by local entrepreneurs. At the same time the number of trawlers
based in Freetown declined and as a result the harvest of the large-
scale industry fell.

Pelagic (surface feeding) species comprise about 65 percent of
the total marine catch while demersal (bottom feeding) species account
for the remaining 35 percent [Shorunkeh-Sawyer, 1975]. Table 2.5
shows the relative importance of major species. For a detailed
description of major species and their respective average weights,
see Appendix J” The geographical origin of the domestic catch appears
to be highly concentrated in the Northern Region due to (1) the wide
continental shelf along the coast and the (2) relatively dense fish

stocks.

24

TABLE 2.4
ESTIMATED SIERRA LEONE FISH CATCH
FROM FRESH-WATER AND MARINE SOURCES, 1965—1973
(IN THOUSAND METRIC TONS)

 

I l I L L l _

-Yearr
S°ur°e 1965 1966 1967 1968 1969 1970 1971 1972 1973

4..
1

 

 

I Fresh-
water
fisheries 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0

11 Marine
fisheries
Small-scale
marine 29.8 29.0 30.7 20.8 21.5 26.8 27.3 46.8 47.4

Large-
scale
marine 1.8 2.2 1.9 1.7 3.0 2.8 2.3 3.2 2.9

 

Total
domestic
catch 32.6 32.2 33.6 23.5 25.5 30.6 30.6 51.0 51.3

 

 

 

 

 

 

 

 

 

 

SOURCES: Freshdwater and small-scale marine fisheries: [Government
of Sierra Leone, 1974-b]. Large-scale marine fisheries: years 1965-
1968 [FAO, 1976]; years 1969-1973 [Government of Sierra Leone, 1975-b].
Total domestic catch: [FAO, 1974-a].

8The sharp increase in 1972-1973 production figures was due to
revised estimating procedures by the Government of Sierra Leone.

25

TABLE 2.5
ESTIMATED COMPOSITION OF FISH CATCH BY SPECIES

 

 

 

we D:::::::a::.:::2:::h
Bonga pelagic 52
Herring pelagic 10
Ladyfish demersal 7
Butterfish demersal 6
Shinenose demersal 6
Sheephead demersal 5
Gwangua demersal 2
Other __12
Total 100

 

 

 

SOURCES: Pelagic Species [Government of Sierra Leone, 1975-b],
Demersal Species [Williams, 1965].

Table 2.6 reveals a total area of continental shelf about one
third the size of the national land mass or 8,500 square miles which
is within the reach of most trawl, purse, and ring net technologies.
Eighty-two percent of the continental shelf area is concentrated
along the northern coastal front.

Perhaps the most detailed assessment of fisheries resources
along the West African coast was the Guinean Trawling Survey of 1964
by FAQ/UNDP [Williams, 1969]. Based on one-hour trawls at eight depths
ranging from 15 to 600 meters deep outward from the coast at sites
forty miles apart along the coast, the estimated live weight of fish
per mile of coastal front is shown in Table 2.7. Because trawl nets

were used, these estimates tend to underestimate the stock of inshore

26

 

 

 

 

 

.Hooma .mERaaaa3. soon emuame< "mom=0m
NAG.N H.~H awm.m N.¢N mmmum><
mom o.HH com N.o umpuon
amfiuonfia ou
Sodom OQHOSm
mom.H m.NH qu.m m.oq umpuon
mmswsw Ou
nuuoa onumnm

ucoum Hmummoo ucoum Hmummoo

cofiwmm pom oHHZ pom coawmm mom OHHZ Mom
mmHHz oumnvm mmHHZ mumsvm mmaflz mumsvm mmHHz mumsvm
HmOfiusmz Hmuoe Hmowusmz Hmowusmz Hmuoa amoeusmz dogwmm
Hmowaamuwomu
umumz oomlom noumz omImH

 

 

comma

 

 

 

mmmh<3 A<HMOHHMMNH mzoma <mmMHm szHHB

mmfimmn mDOHm<> H< mummm A<HzmzHBzou mo <mm< NH<ZHNOMmm<

©.N mane;

27

TABLE 2.7
SIERRA LEONEAN COAST: ESTIMATED WEIGHT OF STANDING CROP
(TOTAL LIVE WEIGHT OF FISH) IN METRIC TONS AT
VARIOUS DEPTHS PER MILE OF COASTAL FRONT

 

 

 

 

Depth
Geographical Region
15-50 meters 50-200 meters
Sherbro Island 900 m. ton (82% 191 m.t. (93%
to Guinea demersal Species) demersal)
Sherbro Island 10 m. ton (44% 135 m.t. (85%
to Liberia demersal species) demersal)

 

 

 

SOURCE: Calculated from data presented by Williams [1969].

pelagic species. Eighty-three percent of the total standing crop is
estimated to be found in the northern area between Sherbro Island and

the Guinean border.

2.3.2 Demand Conditions

Annual per capita consumption estimates range from 24.3 lbs.
in 1971 [Government of Sierra Leone, 1973] to 38.1 for the same year
[FAO, 1971-b] reflecting the uncertain estimates of domestic catch
and population statistics. Based on revised 1973 production figures
of 51,300 m. tons [FAO, 1974-a], plus fish imports of 5,980 m. tons
(Table 1.1), and an average population growth rate of 2.3 percent
annually since the 1964 census, per capita consumption in 1974 was cal-
culated as approximately 46.17 lbs. This agrees closely with a 1974
per capita total of 54,659 metric tons accounted for out of a total
supply estimate (domestic catch plus import) of about 57,280 metric

tons. This is reasonably close if one assumes a one percent spoilage

28

rate by weight of raw marine catch before it enters the market and that
much of the fresh water inland catch is consumed directly without
entering the market.

Effective demand for fish varies between different geographical
regions in the country and between rural and urban pOpulations in the
same region depending on income level, availability of substitute goods,
taste, etc. as shown in Table 2.8.

It is evident from Table 2.8 that per capita consumption in
Western Area is approximately six times the average per capita consump—
tion in the three provinces. This appears reasonable since the Western
Area has more direct access to the sea, a higher average income per
capita and has a greater distance from the supply regions of other
substitute goods, particularly beef, than have most of the provinces.
However subsistence consumption which was not included in Table 2.8
would tend to be slightly higher in the rural areas of the provinces
than in Western Area.

Urban per capita fish consumption is significantly higher than
rural consumption because per capita incomes are higher in the urban
centers and rural consumers rely to a greater extent on subsistence
production of bush meat and fresh-water fish than on purchased fish
products.

The domestic demand for fish is estimated by the current Five
Year Plan to grow at a rate of 5.9 percent per annum over the 1974-79
planning period, assuming (a) a population growth rate of 2.6 percent

per annum, (b) increases in per capita income of 3.6 percent,1 and

 

1The 3.6 percent rate of growth in per capita income appears to

be optimistic considering the historical rate of 2.1 percent over the
past decade.

.Honma .wcfiM pom omaumhmHEoum wouampm coauaeomaoo Hons» “manma .maooq
muumfim mo uaossum>ooa pom ”momfl .mooma muumfim mo ucmscum>oua Eoum nmummvm cowumsbmaoo can“: "mmumDOm

moaw>oum oposuuoz

pom c3onm mm mufiamo pom mpcson mm.n~ ma xomaH cowunfiamcoo mufimmo pom Hmuoa How muswam ommm
wooaw>oum

Honuo a“ coaumssmoou muHamu Hon CH mucouommap amnuslflmusu owmuo>m onu no momma cowumabmaoo
muwmmu Hoe mou< cumumoz coon: mo New on mononEoo coaumasmcoo muwamu Hon mmu< auoummz Hmuamm

n

29

 

 

 

 

 

 

 

 

 

I: amc.qm H.mmm.m mm.mq m¢~.om o.Nmo.N 0H.~N www.mm 0.5mm ¢N.Nm ocowg
l mHuOfim
oo.m qnm.mm o.qu oo.omH qmo.a o.oe «ma.mm omm.om 0.6mm qw.moH mou<
cumumms
Ho.a oom.w m.Ono om.mN mmq.q N.ooq mN.H~ Noo.¢ H.60N oa.mq nonfi>oum
auoummm
0H.H owq.w ¢.o©m qm.~m Hem.o o.mnq mm.om mmm.H w.mm Km.mq moca>oum
anonusom
noo.H moq.mH «.mNN.H mm.n~ «ON.NH N.NOH.H om.mm HON.N ~.oNH mo.n¢ ouofi>oum
cHOSuuoz
xmeaH mace Aooo.v muaamo mace Aooo.v, musamo mace Aooo.v muaamo
coauafiomcoo ownumz cowumasmom Mom owuuox aofiumfisaom umm uwuuoz cowumasaom pom
muwamo mom Hmuoy woumafiumm mpcaom Hmuoa moumsfiumm mpcsom HouOH pmumafiumm mwasom
Hmuoa
Hooch Hausa annum scamom

 

 

 

 

 

 

«Boa .mzomn <mmmHm ZH ZOHHmZDmZOU mmHh msz z QMH<SHHmm
w.N mam<e

30

(c) an income elasticity of demand for all fish of .9 during the
period [Government of Sierra Leone, 1974-b]. This appears to be over-
estimated in light of income elasticities of .80 and .83 respectively
in urban and rural Mauritius [Simons and Poleman, 1974] or .77 and .79
respectively in urban and rural Ghana [Lawson and Kwei, 1974]. Based
on a 12 month national survey of consumption purchases in 250 randomly
selected rural households in Sierra Leone, Byerlee and King [1976] found
an expenditure elasticity of .74. This closely agrees with Snyder's
estimate of an expenditure elasticity for fish in Freetown of .71
[Snyder, 1971]. Byerlee and King also found that fish purchases com-
prise approximately 11.8 percent Of total cash eXpenditures in rural
Sierra Leone.

Taking these findings into account, a more realistic estimate
of growth in domestic demand for fish is about 5.0 percent per annum,
based on a (a) pOpulation growth rate of 2.3 percent per annum, (b)
increase in per capita income of 3.6 percent,1 and (c) an income
elasticity of demand for fish of about .74. This would underline the
need to expand domestic production at least by five percent per year
in order to prevent higher fish prices or increased dependence on

foreign imports.

2.4 Role of Government in Fisheries Development
Public agencies have a long history of attempts to stimulate
and direct fisheries development in Sierra Leone. Hornell [1928]

undertook the first recorded survey of fisheries resources in Sierra

 

11f growth in per capita incomes remains at its historical
level of 2.1 percent,growth in domestic demand for fish would fall
to about 4.0 percent per annum.

31

Leone coastal waters and being impressed with the fisheries development
potential made specific recommendations to the Governor of Sierra
Leone.

The disruption of trade during World War II reduced the availa-
bility of fish imports causing the colonial government to purchase,
fit and operate the "Maid Honor," a 70 foot wooden ship designed to
supply ice chilled fresh fish to the Freetown markets [Stevens, 1945].
In 1942 steam powered naval ships were detached from West African
naval duties several days per month to operate trawls to relieve the
shortage of wartime fish supplies in Freetown. This emphasis on
promoting large-scale fishing schemes continued through much of the
colonial period. Cotton twine and hooks were sold by permit only to
bona fide fishermen through the Colonial Fisheries Development Officer,
in a marginal attempt to stimulate small-scale production.

Following independence in 1961, the government launched a
Fisheries Loan and Credit Scheme to facilitate increased small-scale
production. One hundred and fourteen loans at four percent interest
were made to individual fishermen for the purchase of outboard motors
and fishing gear. By 1968 out of total disbursements of Le 102,527
only 14 percent had been repaid [Aubray, 1971].

A fisheries extension service was begun in the mid 19603.
Starting with one officer in 1967,the trained extension staff grew to
seven officers in 1973. Also, a total of twenty-four staff members
spent time abroad studying marine engineering, marine biology and marine
mechanics [Government of Sierra Leone, 1975-b]. However, the limited
extension capacity of Fisheries Division remains a major constraint on

small-scale development. For example, an engine repair scheme was

32

halted due to "extreme difficulty in obtaining spare parts" [Govern-
ment of Sierra Leone, 1975-b]. An extension outstation in Southern
Province was closed due to insufficient extension staff and development
of the Shenge outstation was slowed down due to lack of materials and
supplies. The failure of an attempt to introduce improved smoke
processing at Shenge was attributed to the fishermen's preference to
continue using the traditional system.

Even though the past record of developmental and extension
activities of public agencies in fisheries have clearly had limited
success in Sierra Leone and other West African coastal countries [Lawson
and Kwei, 1974], frustrations with the current fish marketing system
have led some to advocate replacing the current system with another
quasi-public bureaucracy performing the required functions [Shorunkeh-
Sawyer, 1975].

In 1968 some 1700 Ghanian small-scale fishermen who had settled
in Sierra Leone in the mid 19503 were expelled. These skilled fishermen
had introduced the ali-ring net, synthetic nylon cord, and outboard
engines as well as the improved Ghanian-type fante boat. Local entre-
preneurs quickly replaced the Ghanians as skilled fishermen.

The bias toward large—scale production, which was initiated
by the colonial administrations and in other West African countries, is
evident in current government policies in Sierra Leone. For example,
while import duties on direct fish imports are only 10 percent of the
purchase value, import duties for nets, motors, and other small-scale
fishing equipment are 36 1/2 percent, the same rate that is applied to

such semi-luxury goods as cosmetics, carpets, etc. However, firms

33

importing equipment for large-scale trawlers can either (a) import
the trawler duty free and pay 10 percent of the value of all landings
of the trawler or (b) pay outright 10 percent of the purchase value of
the equipment itself. In addition large—scale firms have received
development certificates which grant such concessions as extended tax
holidays, exemption from import duty on packaging material and fishing
gear as well as reduced duty on trawlers, diesel fuel and lubricants.
In efforts to stimulate the current 1.6 percent per annum
growth in the agricultural sector, agriculture's share of total public
investment has increased from 8 percent in 1971-72 to 25.5 percent over
the next five year planning period [Government of Sierra Leone, 1974-b].
The goals of the current five year development plan include a 14.1 per-
cent annual growth rate in fisheries as compared with an average of
5.2 percent for the other three agricultural subsectors, and self-
sufficiency in fish production in 1977 [Government of Sierra Leone,
1974-b]. However, only about 7 percent or Le 7.5 million of agricul-
ture's share will be allocated for fisheries over the 1974-79 period.
Moreover, Le 5.0 million of this (67 percent) is scheduled over the
1974-79 period for building of a fleet of 10 large—scale trawlers,
20 purse seiners, 4 deep sea trawlers and their associated port
facilities. In contrast only Le .5 million (6.7 percent) is allocated

to the development of small-scale fisheries.

2.5 Summary

Sierra Leone has two fish production systems: small-scale and
large-scale. Current development policies tend to concentrate 67 per-

cent of public fisheries investment in the large-scale trawling

34

industry in Freetown which currently accounts for only six percent of
total domestic catch. In contrast, the small-scale industry which
consists of nearly 5,000 firms in rural coastal communities and pro—
duces over 92 percent of total domestic catch, is allocated less than
seven percent of public fisheries investment over the 1974-79 planning
period. A review of the past public policies indicates that the govern-
ment of Sierra Leone has had limited success in stimulating fish

output.

The demand for fish is expected to grow at approximately 5
percent annually over the next five years. Given the relatively small
growth in fisheries output in recent years, such an increase in demand
will result in shortages, higher fish prices, and increased fish
imports unless a number of steps are taken to increase domestic fish

production.

CHAPTER 3

SURVEY METHODOLOGY

3.1 Review of Methodology

 

Economic research in Asia and Africa has focused on agriculture
and largely overlooked the fisheries subsector. Fisheries researCh has
been primarily technical or biological in nature. The few Studies of
the economics of fisheries in developing countries have been primarily
concerned with isolated technological innovations and feasibility
studies for specific projects. Most of the economic studies of West
African fisheries have focused on the catch per unit effort of some
specific innovation. Several of the FAD/UNDP projects provide typical
examples. Grasset'[l972], a fishing gear technologist, compared an
improved purse seine with the traditional fishing gear in Senegal from
a technical efficiency point of view. He made 21 trips to sea at one
location over a one month period and compared weight of catch per unit
effort for both technologies. Although the catch per unit of fishing
effort was highest for the improved purse seine, he did not include the
cost and returns of the two techniques. Also, Grasset's research did
not consider Seasonality factors in making annual projections, and it
did not take account of differences in life expectancies of capital
equipment when evaluating alternative technologies.

The Government of Nigeria, in cooperation with the UNDP,under—

took a fisheries survey of Western and Mid-Western regions of Nigeria

35

36

from 1963 to 1968 in order to collect basic information on the factors
determining the exploitation and utilization of fisheries resources
[UNDP, 1969]. The survey was considered comprehensive because nearly
all coastal villages were visited once. Based on this census survey of
the size, number, and type of equipment used, it was concluded that
there was a need for improved technology. No discussion of costs or
returns to scaraafactors of production was reported in the study.

In his analysis of fish processing in Ghana, Kuranchie [1973]
interviewed 57 fish processors on a one—time basis over a period of Six
weeks and estimated seasonal purchased input costs and gross margins.
No consideration was given to allocation of labor production and proces-
sing activities over the season. No assessment of fixed capital inputs
was made. Based on single interviews of 16 fish smokers, Kuranchie
[1972] estimated the costs and returns to fish smoking. He calculated
seasonal labor inputs based on single estimates of hired labor costs
per basin of herring extrapolated to cover the total seasonal catch.

Raymond Firth's economic-anthropological study [1966] on the
east coast of Malaysia is one of the most complete micro-level fishery
surveys available from developing countries. Firth collected quanti-
tative economic data in a single fishing community on: (1) daily re-
cords of the value of catch from each of 20 fishing firms over a 6
month period, (2) a sample census of alternative enterprises such as
rice and vegetable production, recording labor input and yield and
(3) a general economic census of household labor and capital equipment
stock in 331 households. While not covering a complete annual produc—
tion period, Firth's data spotlight the seasonal variations in labor

allocations and returns.

37

In summary, it is evident that economic research on fisheries
in West Africa has been narrowly focused. It has frequently dealt with
a given technology in isolation from alternative technologies. Studies
have almost universally been short term in nature varying from single
visit surveys to surveys lasting several weeks but never covering the
production periods over the period of a year. Frequently the sample
size has been drawn from one locality and has covered only one segment
of the production-processing-delivery system. Since economic and
financial costs of the resources used in alternative technologies were
usually not computed it was almost impossible to provide sound policy
guidance.

3.2 Purpose of the 1974-75 Survey
of Sierra Leone Fisheries

 

Given the objectives as outlined previously, four interrelated
surveys were designed to examine the Sierra Leone fisheries subsector
as a complete production-delivery system. Each survey contained ques-
tionnaires dealing with specific aSpects of the system.— A small-scale
production-processing survey was designed to examine the detailed opera-
tion of firms involved in small-scale fish production and the immediate
processing of their catch. ’A survey of small-scale marketing was de-
signed to follow the catch of small-scale producers through the network
of wholesalers and retailers in order to estimate spoilage losses as
well as the returns to factors supplied by the marketing firms. The
cost-route method [Spencer, 1972] was used to obtain input-output data
from firms over the entire year. The cost-route method relied on
memory recall in order to generate data on the seasonality of the firm's

Operation in fishing and nonfishing enterprises.

38

Similar but less detailed data were also collected from large-

scale production and frozen fish marketing firms.

3.3 Small-Scale Production-MarketinggSurveys

 

3.3.1 Defining the Population

Since there are no records of the number of small—Scale firms,
the population of landing sites and boats was used as a proxy. The
base line survey of the 1974 National Fisheries Survey identifies a
total of 554 marine and estuarine landing sites with a total of 6,150
boats or canoes [Government of Sierra Leone, 1974-a]. This frame was
further stratified into three production-marketing regions.

The first region was defined as the Western Area which is pri-
marily a mountainous region with few commercial agricultural possibili-
ties as alternative means of local employment. Because of its close
proximity to Freetown, urban employment is an alternative to fisheries.
This region contains an asphalt road system.with twice daily public
buses connecting it with urban retail markets. Western Area primarily
supplies fresh and semidsmoked fish to the Freetown markets.

The Northern Region is defined as those land resource regions
as identified by Mitra [1968] whose shore lines extend from the Sierra
Leone River at Freetown north to the Guinea border. 'This region falls
within thepolitical boundary of Northern Province; including parts of
Kambia and Port Loko districts. Fishery resource potential is high in
the Northern Region partially due to its wide continental shelf (30-45
miles). The region is serviced by lateritic roads connecting it to
inland markets. Daily launches provide direct transport to Freetown

and to major ports on the Scarcies River.

39

The Southern Region consists of those coastal resource regions
[Mitra, 1968] between Western Area on the north and the Liberian border
on the south. It includes parts of Moyamba, Bonthe and Pujehun dis-
tricts of Southern Province. It has a relatively narrow continental
shelf (7-9 males) and consequently fewer good landing sites due to the
dangerously high surf. In summary, the Western Area had 108 landing

sites, Northern Region had 233 sites and Southern Region had 213 sites.

3.3.2 Selecting the Sample

From the total population frame of 554 landing sites, major
landing sites, having 20 or more boats based at that site, were identi-
fied. Ninety-five landing sites with an average of 37 boats per site
qualified as major sites.1 Five of the 95 major sites were randomly
selected with a probability proportional to the number of boats based
at each site. York Village was chosen from.Western Area, Yelebuya
Island of Samu Chiefdom and Mayaya-MOndoh of Kaffu-Bullom Chiefdom.were
chosen from Northern Region and Baba Barmot of Ribbi Chiefdom and Tissana
Point of Kagboro Chiefdom were selected from Southern Region. Five sites
were selected because it was assumed that 20 households could be
identified at each site, and this could provide a significant share
(2.5 percent) of the total population of firms.

A complete enumeration of all boat owners was undertaken at each
site to record major fish and nonfish sources of income. If less than
50 boat owners were based at a site, all boat owners at an additional

landing site nearest the selected site were also enumerated until 50 or

 

1Northern Region contained 40 percent of the major sites,
Southern Region contained 35 percent, while Western Area had only 25
percent of the major sites.

40

more boat owners were identified. From these boat owners, 20 owners
were randomly selected at each site using a table of random numbers.
An additional 5 boat owners were selected at each site for replacement
purposes. The 110 selected boat owners and their households provided
the basic sample for the small-scale production and processing surveys.
For the purposes of this survey, the household was defined as
the boatowner and all persons with whom he shared proceeds in common.
Tollens [1975] pointed out in the study of cotton farmers in Northern
Zaire, that the household, when defined as a consuming unit [Spencer,
1972] [Norman, 1973] may be different in size than when it is defined
as the producing unit because all members of the consuming unit may not
contribute to the producing unit. In the narrow sense this is also
true of fisheries in Sierra Leone, as some members of the consuming
unit may never contribute directly to the fish production unit. How-
ever, when the household unit is defined as the total production unit

for fish and nonfish enterprises this possible discrepancy disappears.

3.3.3 Description of Questionnaire Designl

Five questionnaires were designed for collecting data on small-
scale fish production and processing and three questionnaires dealt with
smoked fish marketing from the processor through the retail agent.
Table 3.1 provides a summary of the basic procedures followed and the
content of all questionnaires.

A household listing (FS-l) was administered to the entire popu-

lation at each of the five selected landing sites. This questionnaire

 

1See Appendix 2 for a description of the administration of the
survey.

41

TABLE
DESCRIPTION OF QUESTIONNAIRES

3.1
FOR MARINE FISHHIES SURVEY

 

 

 

 

 

 

 

 

 

 

 

 

 

Qiestion- Nam.- of San-pling 110151 heuuencv (bntents of Major Variables Derived firm
naim Qiestionnaire Procedure Sample 0 Qles estionn Eire ‘onnnire
Form Sim Interview
Nlnber
FS—l Fish household listing 1. Country divided into 3 coastal 5 (hoe Nana of Inst Sample frame for X’s—2, FS-Ii,
supply regions 1 only owners based at etc.
2. 2 landing sites selected frcm sits-s , the site—Mar
ogi n on pmhnblllty fish andnon
pmporntional to 5171- fish enterprises
on ”101974 National Fisheries
Su '
3. All that owners listed at that
Site
FS—2 Htmsehold and Shock 25 boat owners elected at each 110 Chce “OJ-Chum. of Fishing and rim—fishing (mp—
landing site households only "4“ m1 1‘5 stock “411 and la rstocks
8‘1“ D- -
livestock, I:
c
173-3 lnmt output 25 boat owners selected at ench 110 as Daily records of Housemld inccma and!
landings mmlds weekly hrs ywooed/man nsolna Islam
for Enters/day in— profiles of fishing andmr
9-12 Puts pur.,hi iishl g enterprise;
nnnths lab. ,fish a non- u ill on retu
fish twt ls abor; Returns to alternative
sales _loans production technologies
rs—4 Fish “Eights One honisomld selected ranrhnly 5 Moe Fresh weight of Conveision ratio fresh hr—d ry
‘ {mu muse ing inter— Whom: mnthly oft.) tch by species; Technical effi—
viwed [or l-‘S-Z type; clency oi’ dryi mz dilshon
weights tional Ba
of catch by
t : Mount of
fuel used for
drying; Hours
led
IVS—5 Transfer of infor- 50,3 of wands selected 55 Ghee ologicn Pattern for. transfer of
[nation and change for 135-2 in mach site mum-holds only chararteristlm imnnfomnt long I:
of useholder; patterns for individuals
es of trnns— terpr see; Men t of indebt-
Ier of iniomn— ess and inwr-bo
tion; Capital 1mg
inv ments in
l 10 years
(hoe Social 1on1 (bets andre sto whole
J's-6 Smked F1 h *- fly °f the “”15"“3015 m" 10 (my cham‘é‘énmm mle fish trader? “no:
Wholesale Marketing Etc 1 Wm oIbl of trader. constraints in wholanl e
rv ew at a site as poss e chasing prac— tisht trading
1:105 and ms:
involved
Smoked Fish Selecting traders whoc 10 011)I Detailed costs, Major constraints in viral:-
PS—7 Tracing Dowular narket charmels as once tine, SPO“ sale MS" trading; Return
revealed by 1.3. 3 problems of to labor and capital in
fish hholesal winiemle (is: trading
by etu-
i ally traveling
th the Era
and monitoring
continually
163.3 Smoked Fish Retail As rmny fish retailers as 57 Once and re- Ret to labor and capital
and Marketing possible who wrchme fish sh only venue in “8’" “1 retail m fiSh
HT-a mm W In IS-7 mailing finding
”me scale “sh All the fm 5 Once Olpital in— Mums to BETH-:1! capital
ppoduchm may having trawlers only vestnents, in large sale tra wllng
licensxi to operate tput technologies
Sierra Lame wat cords;
Grating was
:1 maximum
9 Ha or can fish “holmalers 1 Once ital invest- W1 Ind “91911
From Fish Wholeaal 5 fr (111): mtg: mg)“: in from fish "blade
reoo ds; Opera— “flu-'8
ting casts uni

 

 

 

 

 

 

 

 

 

42

provided a listing of all boat owners at each site and the relative
importance of fish production, processing and marketing enterprises
in each fishing household.

The stock questionnaire (FS—Z) was administered at the beginning
of the survey to all selected households, i.e., the 20 randomly selected
households at each site. This questionnaire recorded data on the house-
hold's family labor stock, fishing and nonfishing equipment stock,
produce and supplies in store, as well as investments in livestock
and economic tree creps.

The basic input-output questionnaire (FS-3) was administered
twice weekly to each selected household continuously over a 9 to 10
month period between October 1974 to October 1975 depending on the enu-
meration site. This questionnaire yielded a daily record of the activi-
ties and transactions of the household firm, including hours worked in
each enterprise by each household member and hired labor, all inputs
purchased and output sold each day, daily catch or harvest record and
its distribution by quantity eaten, processed and given away or paid to
hired labor.

Fish weighings were made on a twice monthly basis (FS-4). Be-
cause of the amount of time involved in the administration of this
questionnaire and the need to be present with the respondent at specific
intervals throughout the day of interview, it was administered to one
household only at each landing site, which was selected because of its
proximity to the enumerator's dwelling. This questionnaire was designed
to: (l) obtain data on the variation of fresh weights of different
species caught throughout the year, and (2) evaluate the technical

efficiency of drying fish on the traditional banda in terms of the

43

wet-dry conversion ratio by species, labor and fuel inputs used, total
drying time and capacity of equipment.

A general socioeconomic questionnire was administered by the
author to 50 percent of the selected small—scale households at each
site (FS-S), in order to obtain data on the socioeconomic relationships
within the family and village and the process by which technical innova-
tions were spread and adopted.

Since these structured questionnaires are not appropriate for
eliciting qualitative information on "non-marginal" events which direct-
ly or indirectly affects the firm's Operation [Vyas, 1974], a notebook
issued to each enumerator proved particularly valuable as a record of
qualitative information on community events. The enumerator recorded
socio-religious practices of the fishing community, disastrous events
affecting the firm such as fires, theft, court cases, and equipment
repossessed by creditors.

Primary marketing channels serving selected landing sites were
identified in the input-output questionnaire (FS-3) as the most free:-
quently stated market destination of fish sales for that fishing
village. Three marketing questionnaires were designed to enumerate
costs and returns to resources employed in these channels. The whole-
sale fish marketing questionnaire (FS—6) was designed to obtain data on
general purchasing practices and characteristics of traders from as
large a sample of traders as possible during an interview day at the
selected landing site. This was followed by a market-tracing question—
naire (ES-7) in which those traders covering the specific market chan-
nels of interest, were continuously monitored. An enumerator accom-

panied the trader enroute from the producer-processor to the wholesale

44

fish market. Data detailing direct tranSport, lodging, and market
costs as well as labor and equipment invested and breakage were
recorded. Similar data on retailing practices and costs were obtained
through a retailing questionnaire (MT-3 and FS-8) administered in the
four major inland consumption centers. Figure 3.1 illustrates the
primary marketing channels connecting production regions with the re-

tail markets in Makeni, Koidu, Bo, and Freetown.

3.3.4 Quality of Data

Throughout the survey, several problems affected the enumera-
tor's ability to collect accurate fishing data over a long period.
Spencer [1972] considers the ability of the enumerator to speak the
local language as a necessary condition to being accepted by the host
community. However, in two fishing sites it appeared that the ethnic
origin of the enumerator was also crucial. In two sites even though
the enumerators could speak the local language, fishermen and local
authorities reported that they preferred enumerators of common ethni-
city as "being one of them" even though they did not originate from
the immediate area. In the first case, the enumerator quit his posi-
tion after two months data collection and was replaced by an enumerator
of the same ethnicity as the respondents. In the second case, the
situation was discovered shortly before the termination of the research,
and the enumerator was allowed to complete his work.

Great difficulty was experienced in obtaining complete labor
input data. Norman [1973], Spencer [1972], Tollens [1975], and others
have cited the difficulty of estimating the hours of labor when most of

the respondents did not possess watches. Muslim prayer periods and the

45

 

 

 

 

 

 

 

 

 

 

 

 

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x
J 1 1 ,' 1
14° 13° 12° 11°
FIGURE 3.1

SIERRA LEONE:

MAJOR MARKET CHANNELS BETWEEN PRODUCTION AND CONSUMPTION CENTERS

 

46

position of the sun were used in the present survey to help generate
reliable labor data. In addition, when the boat owner moved his equip—
ment and part of his family to better fishing grounds along the coast
during certain seasons, it was impossible to secure a detailed break-
down of hourly labor input and the species caught. However, total
person days Spent by enterprise for the migratory labor was recorded.

Because of the lack of business records, enumerators relied
on the recall of data by the respondent over a four-day period. How—
ever at one landing site the size of household was so large that the
total recall of the activities of each household member resulted in
long interviews. The total sample size was decreased and activities
undertaken by a group of household members were recorded on'a group
basis rather than by individual members in order to facilitate the
interview.

The measurement of fish output was particularly difficult be-
cause of the large quantities landed and the resultant time pressure
to sell or process the fish quickly before putrifying. Traditionally
the catch is measured in units of single count, dozens, or volume.
However, the average weight per fish of a particular species reported
in dozens is generally less than the average weight per fish reported
in single units because the smaller fish are grouped into dozens for
sale while the larger fish are sorted singly, usually bringing a higher
price. Fish weighings had to be made species specific for single fish,
dozen counts and four different volume measures. Over 40 different
species were landed over the year, each varying in average weight. It
was also noted that average weights of the same species varied from

region to region. Consequently, weighings were made of 33 different

47

major Species specific for each region for each unit of measure. An
average unit weight was calculated for the remaining minor species for
each region.

No significant variation in average fish weight was noticed from
season to season. FAO [1973] attributed this relative stability in modal
fish size of pelagic species to a regular recruitment of young stock and
a removal of older fish from the area as a result of fish migration or

mortality.

3.4 Large—Scale Production-Marketing Surveys

As previously described, 44 large-scale fishing vessels possessed
valid licenses fromtflm:Ministry of Agriculture and Natural Resources for
fishing in Sierra Leone waters in June, 1975. A total of 11 of the 44
boats were registered as "owned" rather than chartered by local compa-
nies and were included in the study. The 33 chartered vessels were not
included in the survey population as their catch is not considered domes-
tic and much of it never enters the Sierra Leone market.

Because of the small number of large-scale vessels owned by five
locally based firms, an attempt was made to include the entire populaton
of firms in the sample. A questionnaire on large-scale production was
designed for the purpose of recording total capital investments, fixed
and variable operating costs as well as output and sales records of
large-scale trawler firms. Letters of introduction were sent by Njala
University College to the General Manager of each firm and interviews
were conducted by the author with their chief accountant. Because of
the dominancecfifexpatriate private interests in the large scale indus-

try, it was difficult to secure the cooperation of these firms.

48

Accurate input-output data were obtained for only three Of the eleven
vessels. Large-scale frozen fish wholesaling is conducted by a single

joint-venture corporation and accurate data were obtained for this firm.

CHAPTER 4
MICROECONOMIC ANALYSES OF SMALL-SCALE FISH PRODUCTION

In this chapter the small-scale fish production firm will be
examined in terms of the economic use of scarce resources by the firm
and cOmpared with large scale production firms. A description of the
socio-cultural environment in which the firm Operates will be discussed
in Section 4.1. Section 4.2 will present the methodology and justifi-
cation for grouping firms into nine representative firm types facili-
tating a linear programming model in Chapter 6. Sections 4.3 through
4.5 discuss the resource utilization of these nine firm types. The
composition and seasonal distribution of output produced by each firm
type is discussed in Section 4.6. Based on the result of Sections 4.3
through 4.6, representative firm budgets are develOped in Section 4.7
which are then compared with similar budgets for large-scale firms in

Section 4.8. Section 4.9 summarizes the major findings of the chapter.

4.1 The Socio-Cultural Environment

 

Five major ethnic groups populate the coastal regions of Sierra
Leone. The Krio predominate in rural Western Area while the Temne and
Susu dominate in the Northern Region and the Mende and Sherbro dominate

in the southern coastal region. However,regardless of the dominant

49

50

ethnicity of the coastal population, the Temne constitute the major
ethnic group among the fishermen in each region.1

The accessibility of educational and medical facil-
ities as well as other social amenities varied from village to village.
Table 4.1 shows that primary education is easily accessible to the
sample villages while secondary education and medical facilities are
less accessible. Slightly more than half of the villages were
accessible by vehicle year round. The majority of the villages which
were inaccessible by vehicle were located in the southern coastal
region where lowhlying mangrove swamps greatly restrict land travel.
However most villages had some contact with outside areas by means of
either boat or vehicle on a daily basis. All the villages without
daily transportation services were found in the Southern Region.

Along the Bullom Peninsula of Northern Region commercial agri-
culture provided important alternative means of employment. Onions,
tomatoes, and other fresh vegetables as well as swamp rice produced in
the region were readily marketable in Freetown. In other regions
surveyed, subsistence agriculture was the most important alternative to
fishing except in the Western Area where employment in Freetown was
attractive because of its close proximity.

The cultural setting in which the small—scale firm Operates
varies considerably from region to region. Different cultural and

ethnic beliefs generally prescribe what is the "accepted" practice in

 

1Over the entire sample of small-scale firms, the ethnic origin
Of the head of each firm was as follows: Temne, 56 percent; Susu, 20
percent; Sherbro, 7 percent; other ethnic origins, 17 percent. Approxi-
mately 2 percent of the sample were Ghanian fishermen.

51

TABLE 4.1

SOCIAL AMENITIES FOUND IN FISHING VILLAGES BY REGION

 

 

NORTHERN REGION

WESTERN AREA

SOUTHERN REGION

NATIONAL AVERAGE

 

NO. Of
Villages

Average

Distance
to Facility
(Miles)

NO. of
Villages

Average
Distance
to Facility
(Miles)

No. of
Villages

Average
Distance
to Facility
(Miles)

NO. of
Villages

Z of
Sample
Villages

Average
Distance

to Facility
(Miles)

 

m
c

a:

Total Sample Size

EV111age

Primary School
Present within
Village
Not Present in
Village

Secondary School:
Present within
Village

Not Present in
Village

Dispensary/Hospitak
Present within

Not Present in
Village

Post Office:
Present within
Village

Not Present in
Village

Agricultural
Instructor (HANK):
Present within
Village

Not Present in
Village

Religious Mosque
or Church
Present within
Village

Not present in
Village

Year Round
Accessiblity
by Road

Accessibility
by Sea Only

Vehicle/Boat
Transport
Service:

On Weekly Basis
Only

At Least Daily

 

 

17.6

13.7

14.3

 

NO

 

20

 

 

17.0

16.9

17.0

20.0

15.0

 

12

11

ll

12

252

752

1002

82

922

82

922

1002

672

332

672

332

582
422

 

 

16.8

14.7

13.5

18.6

15.0

 

52

a particular locality. Fishing on Sundays or Fridays was generally re-
stricted in Christian or MUSlim areas respectively. In addition, most
localities had special cultural practices affecting the fishing firms.
A day of feasting, dancing, saying prayers and feeding ancestral
spirits usually marks the beginning of construction of a new boat as
well as its first trip to sea. Less involved ceremonies are also
arranged by the household head when a new net or outboard motor is
purchased. During periods of unusually poor catch or high accident
rate at sea, similar ceremonies involving the entire community may be

repeated.

4.2 Classification of Representative Firms

Based on the census survey (FS—l), 110 small-scale firms were
randomly selected from the five landing sites. Approximately nine firms
were dropped from the survey during the year due to death, permanent
migration or because the chosen fisherman had ceased active fishing.
As a result, the survey finished with 101 firms. Of these, 93 firms
were stratified into nine different production technologies.1 Eight
firms were not included in any representative production firm strata
because complete data on total catch or purchased inputs were not
available. The extent of their incompleteness distorted any measures
of efficiency Of resource use in these firms.

When stratifying firms into representative groupings, Day [1963]

points out that only under specific conditions will the Optimal linear

 

1Ideally a representative sample of each production technology
would be chosen from each production region. However this two-fold stra-
tification by technology and region was impractical as it would have re-
quired a considerable increase in the number of landing sites surveyed be-
cause all production technologies are never found at a single landing
site.

53

programming aggregate solution based on these groupings equal the
direct aggregation of the optimal solutions for the individual firms.
These conditions are (l) proportional variations of resources and
behavioral "bounds," (2) proportional variation of net return expecta—
tions among all firms and (3) common technical coefficients on the
constraining resources. Miller [1966] attempts to relax Day's condi~
tions by proposing that essentially two conditions are necessary to
avoid aggregation bias when using representative firm groupings, namely:
(1) all firms have identical coefficient matrices and (Z) all firms
have qualitatively homogeneous output vectors, i.e., the optimal solu-
tion for the individual firms would include the same set of activities
but their levels may differ. Buckwell and Hazell [1972] point out that
one of the principle problems with Day's and Miller's conditions is
that full. foreknowledge of the technical matrices of the individual
firms is required, when the very reason for using representative

firms is to avoid the need for full data on all firms. They emphasize
that the literature offers no help in solving the problem and that in
reality aggregation bias is unlikely to be totally avoided in any
empirical model due to other inaccuracies and discrepancies in the
aggregating model.

In an effort to reduce aggregation bias, firm groupings were
made according to production technology Specifying the various boat,
net and propulsion combination used. Table 4.2 describes the nine
representative firm types and their corresponding fishing technologies.

Various economic ratios can be used to provide some general

indicators of relative productivities of various inputs among different

54

\

zen mama sauna amazes Ono mo Ammuvaum ucosowmcma Esau cw o=Ho> muww snowy o:~o> ~ommo>xo sea as women wa~s> we assay a“ vocwuov we: unease

.vom: honed song; use auuamu coon mucouucu ponmqu

.OOOOO name“ OOu>uom can «manage! oommnousm

a

.uuo .Houumwu «0 ounce cow>uom assess mo
mocowq .uoan mo meson ..o.« .moauu>«uom cowuoovoum gnaw a“ monunmu: Amuanu30v moousomou mo 30am assess any so vauaaauuwo who: newumu HH<
m

 

 

 

 

 

 

 

 

 

 

 

mH.mH Hw.m~ em.o~ w¢.e Mn.oH 0H.mo mn.- mo.aH mm.m~ coo:
Sauna kuuamU1uonwA
on. em. mm. as. mm. um. um. me. he. saw:
Owumx nonmqlusauso
o A
em.m n¢.w oo.m nm.n ~c.m mo.- Nm.o m~.m mn.w use:
Ouumm HmuumeMuamuso
enm0auwm owaocOOm
o w m m o m _m mg 5 exam vacuum amuoh
II. II it ll MI. .1! mm. ml. NW. eouwux suosusom
m 0H auu< cucumo:
o m m a o - ~ scams. Eons—oz
”afiaaom an «luau mo heels:
.m.=oNA .m.=w~v .m.=m~A .m.=mmv
vuwoaOSO ousonuao ousonuao vuoonuao .oavvom cavvom awam a autumn deem a ouvvom anew a vacuum unawaHSAOHQ no made was weak
saw; a moon
uoz wow“ uoz we“: uoz wean uoz mafia oauom sound was we: anew us: away: no: uum uoz mead "vow: Oman uoz
umom munch noon Ouedh anon madam anon snawm anon madam assoc Oahu mouse vuevsdum condo vuuveaum 00:00 vusveuum noon: unhu anon
H x u m m a u n d
mark numb muwuuuuauuuunzu

 

 

 

mauam=mHm NA<UmIAA<Zm UZOZ< mumrh :MHh M>Haihzmmmmmum

NJ H.349

55

technologies as well as the intensity with which scarce resources are
used in combination. Comparison of the different firm types in Table
4.2 shows that the greatest amount of output in terms of value added
can be Obtained per unit of scarce capital available in firm type D

as well as the highest productivity of labor. Since labor is one of
the major inputs supplied by the firm household, the productivity of
labor is of Special interest in defining homogeneous representative
firm groups. The value added/labor ratio is an indication of labor
productivity or the intensity with which labor is utilized in combina—
tion with other capital inputs. The firms Operating salla and fante
boats with larger outboard engines have a labor productivity consider-
ably higher than the small standard and Kroo canoe firms.

An analysis of variance in the value added/labor ratios between
firms in different regions and different firm types revealed that
regional effects were not significant even at the 30 percent level,
whereas the firm type was significant at the .1 percent level. The R2
for this analysis was .7, indicating that a high percentage of varia—
tion can be explained by differences in equipment technology and a low
percentage due to regional difference. This suggests a high degree of
homogeneity in firm groupings.

The lower labor/capital ratio of firm type F indicates a greater
capital intensity in this firm type than in all other small-scale firm
types examined. Although there is a wide range of labor/capital ratios
between different technology types, from a low of 6.98 in firm type F
to a high of 43.10 in firm type D, the labor capital ratio of most firm
types are closely clustered between 16.73 and 23.81. It is hypothesized

that the choice of technology would be quite insensitive among these

56

centrally clustered firm types to changes in the relative factor prices
between labor and capital inputs. This hypothesis will be analyzed

further in Chapter 6.

4.3 Labor Utilization by the Firm

 

4.3.1 Family Labor Characteristics

The stock of family labor present in the household is shown in
Table 4.3 to range from 2.8 persons for firm type D (kroo canoe and
cast net), to 16.5 persons in firm type I (fante boat, >26 HP engine,
ring net). An hour of child labor (lo-15 years old) was considered as
half the value of an hour of adult labor of the same sex based on
Spencer and Byerlee's [1976] findings that child wages in Sierra Leone
are approximately half their adult equivalent. Children less than 10
years of age were not considered as contributing to the family labor
supply. If the family labor stock is discounted for these factors,
the number Of contributing members varied from a low of 2.4 adult equi-
valents in those firms Operating the small krOO canoes, firm type D, to
a high of 11.5 adult equivalents in the larger firms of type I (fante
boat, >26 HP engine, ring net). Household size is therefore closely
associated with the type of technological equipment employed by the firm.

Household heads possessed a variety of skills and backgrounds.
About 60 percent Of the household heads achieved their fishing skills
through informal training by a relative, while 26 percent had undergone
some form Of apprenticeship with more experienced fishermen for an
average term of 4 years. Formal English education was limited to an
average of only 1.3 years among all household heads.

The allocation of family labor between fish production, pro-

cessing and trading and nonfish enterprises varied by firm type, season

57

coauwaoaoa Hmuou :« onhu sumo mo mfisfim mo woman: vmumawumm mnu ou wafiwuooom owmuo>< emunwfiozm

 

 

 

 

HH.m me.HH mH.oH os.oa am.s oo.a os.~ wH.m e~.m mm.o muamHm>H=am “saga mo umnaaz
mm.o m¢.©H 0N.¢H om.MH «H.0H oo.m ow.N Nm.© om.¢ hm.h maomhwm mo HOQESZ HNHOH
Hm.H oo.m ma.q oN.m ma.m oo.~ as. SH.H NH.H as. Assume oHvV amnesaeo
wNJ mm. om. hm. Awummw mHIOHv fiOHUHH£U
mH.N mw.o mN.< O¢.¢ mm.N OO.m OO.H OH.N h¢.H ow.N Awhmmw +mHV mudflfl< OHNEmh
Nw.N ©©.¢ ww.m ON.© mm.m oo.¢ o¢.H om.N mm.H m¢.m Amhwmw +nHv mUan< OHNZ

mmwmuo>¢ H m w m m a u m <

Hmsoaumz mama swam moaumwuouomumso

 

 

 

 

mm H zmHm fin MNHm QAOmMmDom mw<mm><

m.< MAQ<H

58

and sex. It is evident from Table 4.4 that fish production occupies

a major share of the males' economic activity while females are pri-
marily involved in the fish processing activities. Exceptions to this
are noted in firm type F in which fishing holds a minor position in
relation to other nonfishing enterprises. The increased amount of fe-
male labor allocated to fish production in those firms using larger
mechanized Salla and Fante boats (type C, H and I) is primarily due to
the extra time required to cook meals for a larger hired labor force
employed by the firms in fish production.

Hours of economic activity used in Table 4.4 were limited to
those hours spent at the enumeration site in activities which directly
contribute to some business enterprise of the firm. Time spent rest-
ing, or out of town for business or liesure purposes was not included.

A majority of the firms comprising firm type D were located in
Western Area. Consequently wholesale trading of fish in Freetown
accounted for a greater prOportion of female economic activity. Simi-
larly in the sample, firm type F was primarily found in the Northern
region where commercial agriculture tends to absorb a higher prOpor-
tion of male and female economic activity.

Almost 42 percent of the male labor allocated for fish produc-
tion in the entire sample was used to repair nets, whereas only 52
percent of fish production labor was actually spent at sea in fish
harvesting activities. The only exception is firm type D which Operates
a shallow cast net which seldom needs repair.

Seasonal variation in labor inputs in fisheries is affected by
weather, fish migratory patterns, type of equipment used, seasonality

of competitive nonfish enterprises, and other factors. During the

59

003010.000 333 :3 0000

fine no a: me .3305: 000153000 2: 3 0:30.33- uw-uEE 03:30
.E: 000 03:33:. 0.59— 3.30000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Vflhul CHER HIHOF
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. :30.— 33350 «3.:
0 0 0 u 0 u 0 <
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0.1033 cue-m anon 331w 093-0 Deni 0°50 unqvfilum
35533.0
0E :30 133

 

 

 

 

IHE E in mmmwflas SHE: c; 95:63 as: 350.220.

«.0 ~35“.

60

height of the rainy season (July-August) the sea becomes rough and
hazardous for small craft loaded with net and other gear. In addition,
high waves move the nets which need to remain perpendicular in the
water to encircle the fish. At the beginning of the dry season,

Bonga and other species which have a low salinity tolerance tend to move
in closer to shore and even up into the river estuaries, well within

the reach of small scale technologies.

Figure 4.1 shows the seasonal labor profiles for the nine repre-
sentative firm types. It is clear that on the average, June through
September are the months of lowest activity in fisheries. With the end
of the rains in October-November, and continuing through until February
or March, more labor is used in fisheries.

The type of boat, net and propulsion equipment operated by the
firm also affects the seasonal distribution of labor. Firm types A
through D all Operate small canoes propelled by paddle or sail relative—
ly close to shore, however type B operates a set net positioned near
the sea floor. Consequently it is less dependent on surface weather
conditions for ideal operation than are types A, C, and D which Operate
surface nets. As a result the variation seen in season labor use for
fishing by firm type B is considerably less than types A, C, or D.

In comparing the seasonal labor variation of all firm types
operating canoes (types A through D) and larger boats (types E through
I), there is significantly less variation in the seasonal labor use by
the latter group. This is expected since their boats are larger and
more seaworthy and therefore capable of safe operations under most

weather conditions.

61

FIGURE 4.1

SEASONAL PROFILES FOR TOTAL FIRM LABORa BY REPRESENTATIVE FIRM TYPES,
1974-1975

a) Representative Firm A, b) Representative Firm B, c) Representative
Firm C, d) Representative Firm D, e) Representative Firm E, f) Repre-
sentative Firm F, g) Representative Firm G, h) Representative Firm H,
i) Representative Firm I.

aInclude both Hired and Family Labor measured in Adult Equivalent
Hours. One hour of child labor (ages 10-15) equals .5 hours of adult
labor (over age 15).

62

 

 

 

 

 

 
  

700
Hours 600
of
Labor 500
Per 400
Month Fish
300 Labor
200
100 /.’o—'O-—o——.—-.—.fl’3‘~.‘~.‘_-o/ ‘\\. Nonfish
0,L! I I I I L_J J I I I ILab"
O N D J F M A M J J A S 0
Months
a) Representative Firm A.
700
Hours 600
of
Labor 500 Fish
Per 400 Labor
Month 300
200
100
o. .|.L.1 ILIII 1,1. I I I
O N D J F M A M J J A S 0
Months
b) Representative Firm B-
o ' '0. O
. Total
Hours 400 Fish
of 300 Labor
Lgbor 200
er /.___..\\ ',,"~~._” Nonfish
Month 100 o" ' \\._-,r‘~0 __.... Labor
0 IIIgIIIIIIITI

 

 

I

O N D J F M A M J J A S O
Mbnths

c) Representative Firm C.

63

 

 

 

 

 

 

 

300 '
Hours
Labor Labor
100
Per Nonfish
Month ’.___.___. ’/'\‘ L b
0 I..01'*‘I‘~I" I I r I I“‘1-'-II--—I-—I 30‘
O N D J F M A M J J A S 0
Month
d) Representative Firm D
700
600
Hours
of 500
Labor 400
Per
Month 300
200
. Nonfish
100 ,.._.....-.—--\,~ // ‘\\ Labor
0L__I---I"'I I I I I" “I I I’”I‘~I
0 N D J F M A M J J A S 0
Month
e) Representative Firm E
1400 ’
Hours 1200
of
Labor 1000
Per
Month 800
600 Nonfish
Labor
400
Fish
200 Labor
0 I I l I I | I I I I | l I

 

 

f) Representative Firm F

64

  

 

 

 

 

 

 

5000 “- ..... - .
Hours 3 °. 3 .
Of 4000 a 0.. .. '0‘“...u
Labor 3000 . " ° Fish
Per Labor
Month 2000 I \
\ /'--~-.._.._ / ---.Nonfish
1000 "\ I '~—"“" ‘~./ ' L b
0 I \y I I I I I I I I I I I a °r
O N D J F M A M J J A S 0
Month
g) Representative Firm G
7000
Hours 6000
of
Labor 5000
Per 4000
Month
3000 Fish
2000 Labor
1000 Negligible amount allocated to nonfish enterprises
0 I l l L 41 i1 1 LA l,__J l_ l. I
0 N D J F M A M J J A S 0
Month
h) Representative Firm H
7000
Hours 6000
of
Labor 5000
Per 4000
M°9th 3000
2000 Fish
1000 Labor
Negligible amount allocated to nonfish enterprises
0 l l l oiJ I l | I l L___J J J
0 N D J F M A M J J A S 0
Month

i) Representative Firm I

65

From Figure 4.1 it is evident that agriculture and other non-
fishing enterprises actively compete with fishing for the limited labor
supply. For example, in firm type A, as long as fishing enterprises
absorb less than 300 hours of labor per month, labor used in nonfish
enterprises tend to vary in the same direction as the fishing enter-
prises. However when labor requirements in fishing rise above the
300 hour per month level, a counterbalancing change in the Opposite
direction is evidentin the nonfishing enterprises. The same opposing
trends appear in all other firm types which are engaged in both fishing
and nonfishing enterprises. This could be due to the fact that given
the fixed supply of family labor, peak seasonal demands for labor in
fishing result in a shortage of labor and precipitates a contraction of

nonfishing activities.

4.3.2 Hired Labor Characteristics

In the extended family system found in many coastal villages,
the distinction between hired and family labor is difficult to define.
Frequently the "employee" was distantly related and had joined the firm
for several possible reasons: 1) an opportunity to earn cash income,
2) informal on-the-job training for a future occupation, 3) to establish
some socioeconomic ties with the firm head who would then be responsible
for the "employee" in times of future need, i.e., buying initial equip—
ment for his own firm, marriage arrangements, court cases, etc., or
4) to provide the basic essentials for oneself such as a room, clothes,
and food. A combination of several or all of these factors usually

led the "employee" to offer his services.

66

This informal hiring relationship meant that accurate assess-
ment of wages received for services rendered was extremely difficult
if not impossible to obtain as a supplemental payment may be delayed
two or more years until a time of crisis or celebration required it.
However an attempt was made to record all payments of goods in kind
such as meals, fish, cigarettes, medicines, etc., as well as cash
payments in figuring the wage rate as shown in Table 4.5. The value
of fish paid to hired labor usually varied with the size of the catch,
but no negotiated percentage was identified. In times of poor catch
the workmen may get no part of the catch, while in times of abundance
he may receive a sizable share. In some areas a specified day (for
example every Saturday) is set aside for the workmen to use the boat
and equipment for their own catch with the firm paying all purchased
input costs, such as petrol, oil, and net repair.

The average total wages varied from region to region depending
on the demand for labor in fisheries as well as in alternative indus-
tries in that region.

The average wage rate for women was approximately 66 percent of
the male wage rate over the entire sample. Only about 6.4 percent of
the wages were paid in cash with the remaining 93.6 percent being paid
in kind. ‘Raw fish constituted the most common form of payment in kind;

followed by payments in meals.

67

TABLE 4.5

WAGE RATE PER HOUR IN FISHERIES BY REGION BY SEX

(Leones per hour)

 

 

 

 

Region Sex
Male Female
Western .09 .06
Northerna .15 .08
Southern .ll .09

 

 

 

aNorthern contained two enumeration sites.
One site revealed the values shown in the table.
The second site revealed values less than half
that of the surrounding nonfish industries
[Spencer and Byerlee; 1976].
that the low recorded values of the second site
were understated due to the large number of
persons employed per household at this site in
comparison with other sites which made it ex-
tremely difficult for respondents to recall the
exact amount paid.

It is believed

Hired labor was usually used in fishing activities

as shown

in Table 4.4 and on the average less than 22 percent of all labor hired

by the firms was allocated to nonfishing enterprises. The

types vary widely in their use of hired labor.

various firm

The firms operating the

larger mechanized salla and fante boats use mostly hired labor while

other firms depend on family labor.

Hired labor is also more important

in fish enterprises while family labor is more important in nonfish

enterprises. Firm type D (Kroo canoe, cast net, paddle) is almost

completely family operated while hired labor accounted for 75 percent

of total labor inputs for those firms operating salla and fante boats

(types G, H, and I). In these firm types, family labor assumes more a

68

managerial role. In the entire sample, males supplied over 96 percent
of the hired labor allocated to fisheries production.

Seasonal distribution of hired labor use closely follows the
profile of family labor use presented in Figure 4.1. Firm type G
through I employ much of their hired labor in the beginning of the dry
season (December through April) which are their peak fishing months.
Firm types A through F experience their peak demand for hired labor in
the October to December period; this difference in peak seasons may be
partially due to the fact that firm types G through I operate technolo-
gies which allow them to follow the fish migrations in more distant
offshore fishing grounds, thus extending the prime fishing season.

Firm types A through F are more limited to inshore fishing and must
utilize the brief period in October to December when fish come close to

shore.

4.4 Capital Utilization

 

4.4.1 Level of Capital Stock

Capital stock among small-scale fishing firms consists primarily
of working stock capital in the form of supplies and outputs held in
store and equipment capital which includes nets, boats, propulsion equip-
ment and other minor tools. Because of the rapid rate of fish putrifi-
cation, inventories of smoked fish output were minor. Table 4.6 shows
the level of working stock capital inventories at the beginning of the
survey.

Fish net supplies such as cork, lead, and nylon thread consti-
tutes a major share of total working stock capital. Local traders
handle a ready supply of most purchased inputs such as petrol, oil,

nylong etc., so daily requirements are usually purchased directly.

69

 

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mat—no: uo suoum aqua...
S.~ fl. 8.“ Q. 34 S. a.“ 3:23. a»: :18
3.3 2...: 3.: 85 on; 3.0 o: 8.3 2.: 32.35 an: i:
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a = o u u a u n <
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nuns ac: no: as: 9.3 no: 9.: an: «an: .m sun: 02%: an: aura no: new no: 9.:
13.70 So: :5
menu—hon union 3th nylon madam non—G 09.: 0250 waive-um
a
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“Sod-z . NE 5.:
F

 

 

 

 

Ammzonmuv mm: 53h m>HH<Hzmmm¢mNm rm ASSAZU xuosw 93:03 ho mad.)

0 . « H.392.

70

In contrast to the low level of working stock capital, equipment
stocks are significant. Equipment stocks valued at their acquisition
cost as estimated by the household head are shown in Table 4.7.

The wide range in total value of equipment in Table 4.7 shows
the large amount of variation between different technology types. A
new firm entering the industry usually begins as firm type A through D
because of its relatively low initial capital investment needed. Over
the life of the firm, it may expand to new more capital-intensive tech-
nologies as seen in types E through I. The cost of net equipment com-
prises over 60 percent of total equipment acquisition costs for the
small canoe firms (types A through D) but only 46 percent of total
equipment costs for large boats (type E through I) in which a relatively
higher share of total equipment costs are derived from outboard engines.
Imported equipment requirements which comprise about 60 percent of
total equipment cost or an average of Le 165 per firm among the canoe
firms (types A through D) increase to over 81 percent of total equipment
costs or an average of 2001 leones per firm among the large boat firms
(types E through I). With a major portion of the equipment being
imported, the current 36 1/2 percent import duty results in a consid-

erable increase in total equipment costs for small-scale firms.

4.4.2 Sources of Capital Accumulation

Over the life of a firm, several sources of capital funds are
used to acquire fishing equipment. Fifty-three percent of initial
investment capital came from previous savings while 47 percent was
obtained through loans. Employment by other fishermen provided 32

percent of the capital derived from savings while agriculture, trading,

71

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mat. 53m
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n . a “332.

72

and other sources supplied 18, 21, and 29 percent of the saved capital,
respectively. Family members were the most important source of loans
for initial capital supplying 56 percent of the borrowed funds. Friends
and traders each supplied 20 percent while the commercial banking system
was never used by members of the sample as a source of borrowed funds
in establishing small-scale fishing firms.

Working capital requirements for daily purchased inputs were
most frequently met from retained earnings. However, during periods of
poor catch or natural disasters which depleted the working stock
capital, the local trader was the most frequent source of short term
working capital loans. In that event fishermen may receive nylon,
petrol, etc. on credit from the local shopkeeper to be repaid the same
day after the catch has been sold but most frequently it involved a
long term symbiotic relationship with a local fish wholesaler. Approxi-
mately 57 percent of the firms borrowed regularly from their "customer,"
i.e., fish wholesaler. Repayment of these short term loans (average
length of loan was 33 days) was almost universally made in kind, i.e.,
raw or smoked fish. Fish used as repayment were usually valued at 8
to 11 percent less than the market price at the time of repayment.
While the loan was outstanding the fisherman was obligated to sell
only to his "customer" whenever she was in the locality. This
provided the wholesaler with an assured source of supply and a mon0pso-
nistic bargaining position but it also allowed the fisherman a ready
source of secure credit to meet his needs. Approximately 70 percent
of the firms who had borrowed from fish traders were currently indebted

to them.

73

Larger medium-term loans for equipment capital usually came
from larger trading firms in the area, usually from Sierra Leoneans of
Arab descent. Within the sample of 93 fishermen, 12 such loans were
currently being repaid. All had been obtained to purchase new out—
board engines varying in size from 8 to 26 horsepower. The average
size of loan from this source was Le 764. The following formula1 was

used to solve for the interest rate "r" in the rural money market:

A A . A A
P=(l—d) r + r + r +...+ r n+(d)(g)(E)
(1+ 12 (1+ 12 (1+ 12 (1+—ff)
where: P = principal
d = the default rate
A = the amount of each monthly repayment
g = the probability of actually repossessing the defaulted
engine
E = the depreciated value of the engine at the time of
repossession
n = the number of months since the loan was received
r = the interest rate

At the time the loan was received, the average repayment schedule
legislated by the trader, assuming no default (i.e., d = 0), implied
an annual interest charge of 169 percent. For example, the terms for
one fisherman were stated as follows: a) Le 460 cash for the engine
or b) Le 530 credit with Le 160 downpayment and Le 100 repayment per
month for the next 3.7 months. That is, P = 530 - 160 = 370, A =

100 and n = 3.7. However, for 83 percent of the loans which were

 

1Bottomley [1975] develops a theoretical framework for incor-
porating risk premiums, administration costs, monopoly profit, and the
opportunity cost of capital in his examination of rural interest
rates.

74

repaid, delayed payments usually extended the life of the loan and thus
reduced the actual interest rate of repaid loans to 73 percent annually.
If this actual rate is adjusted for the risks involved through loan
default, computed as d = 16.77 percent of all loans, the "realistic"

interest rate reduces to 43.3 percent annually.1

4.4.3 Annual User Cost of Capital

In order to assess the annual flow of services derived from
working and equipment capital stocks, all stocks of capital were con-
verted into annual user service costs. This was done by applying the

capital recovery formula [Yotopoulous, 1967]:

R._.__rz_:fi
l - (1+r)

where V is the original acquisition cost of the capital item; r is an
apprOpriate discount rate reflecting the Opportunity cost of the
capital and n is the life expectancy of the capital item. The come
puted R is a constant annual capital service cost or rental value of
the capital reflecting both the opportunity cost of funds invested in
the capital and the depreciation in the value of capital over its ex-
pected life. Data on the original acquisition cost and the life ex—
pectancy of equipment items were collected from respondent estimates.
To provide some degree of allowance for individual differences in

management, maintenance and intensity of use, the respondent's actual

 

1Assumes a 50 percent probability (c) of repossessing the
defaulted engine after 3 months use during which the engine depre-
ciates on a straight line depreciation schedule over its expected
life.

75

life expectancy estimate was used.1

The source of capital is a major factor in determining its
actual cost. It Was noted earlier that indigenous traders receive
slightly over 40 percent annual interest on medium term (4-5 month)
loans when adjusted for default risk. On the other extreme, commer-
cial banks are reported to charge a maximum discount rate Of 12 percent
[Liedholm and Chuta, 1976]. Initially the actual cost of capital
facing small-scale firms (i.e., 40 percent) was used as the apprOpriate
discount factor. Table 4.8 shows the annual service cost Of equipment
capital by representative firm group using the estimated 40 percent
as the Opportunity cost Of capital. As the size of firm in terms of
total capital investment increases from the small canoe firms (types
A through D) to the larger boat firms (types E through I), the service
cost Of boat and net equipment represent a smaller fraction of total
service cost. This is due to the relatively long expected life of
these items in comparison with the short-lived outboard engine which is
purchased by the larger firms. The annual service cost of propulsion
equipment increases dramatically from Le 1.05 for the firm Operating
a small Kroo Canoe to over Le 1068.00 for firms operating the large
Fante boats. Particularly noteworthy is the wide range Of total
annual service cost from a low Of Le 35 to over Le 2600. This is

primarily due to the differences in propulsion equipment used.

 

1If the life expectancy was unknown or the respondent's

estimate was greater than three standard deviations from the mean
sample estimate for that item, the sample mean expected life for the
item was used.

76

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77

4.5 Purchased Material Inputs

 

The annual cost Of purchased material inputs vary considerably
depending on the type of technology used, the location Of the landing
site, and the area Of sea most frequently harvested. The design Of a
particular equipment item and the intensity with which it is used
affect the amount Of operating, maintenance and repair costs needed
annually. Table 4.9 describes the annual purchased material input
costs for the ring, drift, and set nets which are frequently torn by
larger fish or by large rocks on the sea floor, while the cast net (firm
type D) is designed for small fish captured in the top three to four
fathoms Of surface water and thus requires less maintenance costs.

The location of the landing site affects Operating and maintenance
costs in two respects. First, if the site is near a main urban

center the retail price of petrol, nylon thread, paint, etc. is

lower than in the more isolated sites. Second, if the site is located
near major fishing grounds, fewer costs are involved in getting to

and from the fishing area. Firms which operate in deeper waters (types
G, H, I) or in regions Of the continental shelf which has a sandy
bottom have fewer net maintenance costs per unit of fishing time than
firms Operating in shallow waters with a rocky sea floor.

It is evident that the large firms (types F through I) have
significantly higher purchased input costs due to the Operation and
repair of the outboard engine which alone accounts for over 85 percent
Of total purchased input costs for these firms. Nearly all Of these
additional costs are for imported materials which are currently subject

to substantial import duties. Hence a potentially important policy

78

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3.3 853 :43 .8.qu 8.3 3.2 2; No.3 2.3 3.3 3:33:32 002
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79

issue which will be analyzed later is the impact of changing import

duties on the profitability of various technologies.

4.6 Output Harvested

 

There is large variation in size, type, and quantity of fish
caught depending on the type of technology employed by fishing firms.
The type of net which determines the position of the net in the water
as well as the size of the net's mesh is selective in capturing
particular demersal or pelagic species. This is illustrated in
Table 4.10 which describes the t0p ten species in terms of pounds of
annual catch by each firm type. The selectivity of technologies is
evident in several respects. A majority of firm types (A, C, E, F, G,
H, 1) fish primarily in surface water (tOp 12 fathoms). Bonga consti-
tutes almost 80 percent of their total catch while comprising only 4
percent of the total catch of firms fishing at lower depths (types B
and D). Particular species such as Coureh, Couta, Joefish, Keni,
Snapper, and Shark are found in higher concentration in the catch of
firm types B and D which operate nets or lines on the sea floor. A
majority of these species are demersal types which are of higher
quality and command a higher price in the wholesale market. Even
within a single species, different firm types selectively capture a
particular size and maturity of fish. For example, firm type D, which
Operates a cast net, captures a negligible amount of adult Bonga but a
substantial amount of its catch is Awefue, an immature Bonga. The top
ten species account for between 75 and 99 percent of the total catch

depending on the firm type.1

 

1See Appendix 1 for a listing of all major commercial species
and their reSpective weights.

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81

The market value of the catch depends on the type, size, and
quality of the fish, the demand for fish in terms of the number of
traders actively buying in a given locality at the time of landing
and the proximity of urban consumption centers to the landing site.
Table 4.11 shows the annual average price per pound for raw fish of
the major species sold in each region. The higher prices evident
in western Area are largely due to the fresh fish demand in nearby
Freetown.

Total catch varies seasonally over the production year with
migration of fish and changes in weather conditions. Upswellings of
nutrient rich water during the early rainy season and rich river
water runoff provide a period of growth for plankton upon which fish
feed. In addition, favorable weather conditions provide calm seas
late in the rainy season or early dry season and allow small boats to
operate more frequently. Figure 4.2 graphically illustrates a
seasonal profile of the total catch by each firm type. Although there
is considerable variation between firm types, lowest production occurs
on the average some time in the early to mid rainy season (July-
September) while highest production occurs in the late rainy season
to early dry season. Figure 4.3 shows that the total sawfish supply
generated by the small-scale industry is 61 percent higher during the
six month period between October and March than during the April

through September period.

4.7 Enterprise Budgets for Small—Scale Fishing Firms
A better understanding of small-scale production is obtained by

examining the firm as a complete entity combining the working and

82

TABLE 4.11

AVERAGE ANNUAL EX VESSEL SALES PRICE FOR MAJOR SPECIES BY REGION, 1974

 

 

 

 

 

 

 

 

 

 

 

Common Name REGION

Northern Region Western Area Southern Region
Leones Per Lb.--
Awefue .090 .120 .080
Bonga .090 .189 ‘ .079
Catfish n.a. .186 .121
Coureh n.a. .205 .071
Couta n.a. .188 n.a.
Crocus .094 .173 .120
Cutmoney .068 .055 .039
Gwangwa .093 .136 .095
Herring .136 .038 .044
Joe-fish n.a. .095 n.a.
Keni n.a. .106 .057
Ladyfish .061 .173 .074
Lattie .081 n.a. .048
Mackerel .068 .180 .135
Mullet .121 .042 .064
Shark .249 .136 .186
Shinenose .085 .191 .090
Skeet .068 .140 .108
Snapper .079 .170 n.a.
Spanish .094 .219 .147
Whiting .078 .133 .182
SOURCE: Survey Data.

n.a.:

did not appear in sample sales data for this region.

83

FIGURE 4.2

SEASONAL PROFILES FOR FISH CATCH BY REPRESENTATIVE FIRM TYPE,
1974-1975

a) Representative Firm A, b) Representative Firm B, c) Representa-
tive Firm C, d) Representative Firm D, e) Representative Firm E,
f) Representative Firm F, g) Representative Firm G, h) Representa—
tive Firm H, 1) Representative Firm I.

Total
Catch
(lbs/mo)

2500

2000

1500

1000

500

 

84

Total
Catch

a) Representative Firm A

Total
Catch
(lbs/mo)

1500

1000

500

0

 

b) Representative Firm B

Total
Catch
(lbs/mo)

1500

1000

500

0

 

Total
Catch

 

c) Representative Firm C

Total
Catch
(lbs/mo)

1000

500

0

 

d) Representative Firm D

85

Total
Catch
(lbs/mo)

5500
4500
4000
3500

3000 Total

Catch
2500
2000
1500
1000

500

 

e) Representative Firm E

Total 6000

Catch

(lbs/mo) 5000

4000
3000
2000

1000

 

f) Representative Firm F

Total
Catch

 

 

 

 

 

 

3000
Total 2500
Catch Total
(lbs/mo) 2000 Catch
1500
1000
0 I I I I I I I I | I
O N D J F M A M J A 0
Month
g) Representative Firm G
4000
T°tal 3000 Total
Catch
(lbs/mo) Catch
2000
1000
OLIIIIIJJ 11 1
ONDJFMAM JA 0
Month
h) Representative Firm H
3000
Total 2500
Catch
(lbs/mo) 2000
Total
1500 Catch
1000
500
0 | I l J I I I I J I
O N D J F M A M J A O

i) Representative Firm I

87

6000
5500
Metric
Tons 5000
Per
Month. 4500
4000
3500

3000 Total

Cth
2500 ac

2000
1500
1000

500

 

FIGURE 4.3

TOTAL DOMESTIC SEASONAL SUPPLY FROM SMALL-SCALE FISHERIES,
1974-1975

88

equipment capital with the family and hired labor resources at its
disposal. In order to estimate costs and returns to scarce re—
sources used by the firms in fish production, enterprise budgets for
each firm type are shown in Table 4.12. All costs and returns shown
in Table 4.12, 4.13, 4.14, and 4.15 refer to the financial or
private costs and returns to the fisherman; that is all inputs and
outputs are valued at the prices fishermen actually paid or received.

The wage rates used in valuing family and hired labor were the
actual regional wage rates by sex group employed in the region in which
the firm was located. The exvessel price of output was based on the
regional raw fish price for each species comprising the actual catch
of the firm type. In contrast, economic costs and returns to the
system value the resources and output from the point of view of the
national economy, eliminating factor-price distortions between the
various submarkets within the economy. Table 4.15 approximates the
economic costs and returns as costs of capital and import duties are
nearly equalized between the large and small-scale industries.

The net profit for the firm may be termed a "pure" financial
profit as it consists of the remainder after paying all factors of
production including family labor, its actual market value for that
firm type and that location. In comparing the net profits between
the different firm types (line E) in Table 4.12, all firm types are
obtaining some degree of "pure" profit or return to the managerial
skill of the household. However, the range of net profit is consi-
derable, from a low of Le 373 for type C to the most profitable firm
type R with net earnings of over Le 6000. These differences may be

explained due to either regional differences in the cost of inputs as

 

89

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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:J MAIS—

90

well as sales price for the outputs received by the firm or to
differences in the technological differences among the firm types.

The regional differences in raw fish sales prices and wage rates were
shown to vary significantly in Tables 4.11 and 4.5 respectively. Firm
types B and D are comprised of firms from Western Area which obtained
the highest raw fish sales prices and the lowest average rural wage
rate of all regions. Firm types A, C and E are primarily composed of
firms from Southern Region while types F through I come from Northern
Region where rural wage rates are high and average raw fish prices are
low in relation to other regions. However, these relative disadvan-
tages for Types F through I are not reflected in either net profit or
in returns to labor, Which would tend to indicate efficiency differ-
ences in the technologies being practiced by the firm types. When
comparing firms F through I, the possibility of regional influences is
removed as the firms all pay the same unit cost for inputs and receive
the same exvessel price for fish. It is interesting that when firms
expand in the form of more mechanization and larger boat types, pure
financial profits increase up to firm type H which has less than 26
horsepower. But when additional horsepower and boats of the same tech-
nological type are added, pure financial profits decline.

The net returns per hour of family labor (line F) in Table 4.13
are computed by costing all inputs except family labor at their current
market value with the remainder being divided by the amount of family
labor used. An implicit average value per hour of household labor is
derived, which ranges from the lowest of Le .36 per hour from firm type
C to a high of Le .82 per hour in firm type H which uses less family

labor and more hired labor.

91

Public policy makers having a primary goal of producing fish in
the least cost method would tend to compare firms across the line C,
the cost per metric ton landed. Such a comparison, however, could be
misleading as costs per metric ton do not reflect differences in
value of the landing due to locational advantages of the landing with
respect to lowest cost delivery to consumers and due to quality
differences in the composition of the catch. A more appropriate
comparison might be the cost per Leone of fish landed as shown in line
'J. Using this comparison, firm type E which ranked as best in the
previous comparison fell to fifth rank behind firm types A, B, C and D.

Tables 4.13, 4.14 and 4.15 present a summary of similar budgets
under alternative assumptions of varying the cost of capital and the
import duty of fish equipment. In comparison with Table 4.12, Table
4.13 shows that while decreasing the cost of capital from 40 percent
to 20 percent benefits firm types F, G, H and I relatively more than
smaller firms (type A through E), it is insufficient to decrease total
costs per Leone of fish landed enough to change the relative ranking
of any firm in this comparison. This relative insensitivity to
changes in capital costs between small-scale firms is primarily due to
the small amounts of capital used in relation to other resources.

The policy implications of this are discussed in Chapter 7.

If the rate of import duty is lowered to ten percent, i.e., the
rate currently charged large scale equipment, the resulting budgets
are shown in Table 4.14. This reduced rate would apply to imported
canvas cloth for sails, nets and net supplies, and outboard engines
and engine Spare parts but not to petrol or oils used in outboard

operation. It is evident that such a change would provide a greater

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95

relative benefit in terms of increased net profits and returns to
family labor for the larger firm types.

In Table 4.15 budgets are presented for the case when both the
cost of capital to small-scale producers is lowered to 20 percent and
the import duty is decreased to ten percent. In spite of the fact that
the benefits of such policy changes are biased in favor of the larger,
more capital intensive firms (types F through I), it is insufficient
to alter their relative ranking with other firms in terms of cost per

leone of fish landed.

4.8 Comparison with Large-Scale Fish Production

 

As previously mentioned, large-scale fish production is
concentrated in five firms based in Freetown. Of these five firms
producing for the domestic market, three firms are strongly influenced
by expatriate management and ownership. These firms have the
advantage of ready access to international capital SOurces. In con-
trast to the 40 percent estimated cost of capital in the small-scale
industry, the large—scale firms have access to ten percent loans from
domestic and international credit institutions.

The large-scale survey revealed that of the eleven vessels
currently licensed for fishing, two boats were in irreparable condition.
Interviews were denied in four of the five firms, but the data obtained
from the one cooperating firm represents one third of the total vessels
in operation.

Table 4.16 reveals the production budget for the large-scale
firm operating three vessels equipped with bottom trawls. In contrast

to small-scale production in which the annual costs of capital account

FISH PRODUCTION ENTERPRISE BUDGET FOR LARGE-SCALE FIRMS BASED ON SURVEY OF ONE LARGE-SCALE FIRM

96

TABLE 4 .

16

IN FREETOHN. SIERRA LEONE

 

 

Acquisition Cost

 

 

 

Item
925%
(a) Equipment and Building Capital:
1. Industrial Buildings 60000
2. Buildings Leased for 10
year base 1800
3. 3 trawlers (average tonnage
32.72 m.t.) 165000
4. Hooden boxes 7200
5. Coolers and refrigerator
units 20000
6. 3 vehicles 30000
7. Office Equipment 1000
8. Nets and Landing Equipment 62500
9. Miscellaneous repair
Equipment 8500
10. Total Equipment and Building
Capital Costs
(b) Horking Stock Capital:
1. Net Inventories and Spares 1000
2. Vessel Inventories and '
Spares i 2000
3. Total working Stock Capital 1
Costs I

(c) Total Equipment. Building and

Working Stock Capital Costs

(d) Labor: 1
1. Hsgcs and Salaries |
(1) Sea Skilled '
(ii) Sea Unskilled
(iii) Shore Skilled
(iv) Shore Unskilled
(v) Administrative Skilled
(vi) Total Salaries and Wages I
Other Benefits I
(1) Medical 3
(ii) Residential Property
Rented ]
(iii) Total Other Benefits

2.

(e) Total Labor Costs

(f)
1. Ice Purchases (6000 m.t.

9 Le15.25 per m.t.)

Insurance (.52 of

acquisition cost)

3. Net Maintenance i
4. Fuel and Oils '
5. Electricity, water,

telephone, etc.

Total Purchased Material
Input Costs

l
Purchased Material Inputs: I
l

2.

(g)

(h) Total Annual Operating

Expenditures

Incomes“ F

(1) Peak Season Revenues |
(Le9160 per week for :

30 weeks) ;

Slack Season Revenue

(Le5760 per week for

22 weeks)

Total Annual Gross Revenueb

Less Total Annual Operating *

Expenditures f

(m) Profit for the firm ‘

(n) Cost Per Metric Ton Produced

(o)Net Return Per Hour of Labor Employedc
(p)Net Return Per Leone of Capital Invested
(q)Profit Per Leone of Fish Produced

(j)

(k)
(I)

(assume 20 year life)
(per year)

10 year life)
3 year life)

(assume
(assume

5 year life)
5 year life)
5 year life)
10 year life)

(assume
(assume
(assume
(assume

(assume 5 year life)

354200

3000

 

 

 

 

Annual Service Input Costs Annual Service Input Costs
(10: Cost of Capital) (202 Costs of Capital)
Y onnnn
7048 12321
1980 2160
26853 39356
2895 3418
5276 6688
7913 10031
263 334
10171 14907
2242 2842
64941 92057
100 200
200 400
300 600
64941 92657
i 19200 19200
92970 92970
7200 7200
10582 10582
12000 12000
141952 141952
1000 1000
5500 5500
__ޤ99 6500
148452 148452
91500 91500
1771 1771
2000 2000
19140 19140
6100 6100
120511 122211
333904 361620
274793 274793
126716 139116
401509 401509
333904 361620
67605 39889
257.64' 279.03
2.01 1.75
.37 .37
.17 .10

 

 

 

IValued at exvessel price.

stsed on the following production figures derived from interviews with chief accountants. Average of two trips of two days each per week

per vessel yielding 375 boxes of 30 pounds each during peak season and 208 boxes during slack season.

per vessel as compared with

Production per vessel: peak season - 375 boxe

per trip per vessel @30 pounds per box 92 trips per week for 22 weeks - 274.560 pounds. totaling 949,560 pounds (949,560 pounds - 432 n.t.

vessel per year).

cAssumes 1500 hours per person per year.

This results in 208 fishing days per year

an average of 219 fishing days per year per vessel over the 1971-73 period [Fisheries Division Report. 1967-73; 1975].

per trip per vessel @2 trips per week for 30 weeks - 675.000 pounds and slack season - 208 boxes

per

97

for only 23 percent of total operating expenditures, even when dis-
counted at 40 percent, annual cost of capital in the large-scale pro-
duction when discounted at only ]I) percent, comprise over 43 percent
of operating expenditures.

While the value of labor used contributes 52 percent of small-
scale production costs, it accounts for only 44 percent in the large
scale industry. Approximately 30 percent of total labor costs for
large—scale production are due to skilled technical and managerial
staff, the majority of which is imported.

Crude measures of labor productivity such as the ratio of
value added per leone of labor used take into consideration the differ-
ences in skill level employed as well as the differences in quality of
catch produced. The ratio of value added per leone of labor for
large-scale production is 1.27 while it is 2.60 for small-scale pro-
duction. This indicates that indigenous labor, can be utilized more
productively in small-scale fisheries than in large-scale production.
This factor outweighs the influences of more capital equipment used in
combination with labor in the large-scale industry.

When the cost of capital for the small-scale and large-scale
industries are equalized at the assumed economic Opportunity cost of
20 percent, small—scale production generates an average of Le .52 of
"pure" economic profit per leone of fish produced by all firm types.
In comparison, large-scale production generates only Le .10 of "pure"
economic profit per leone of fish landed, in spite of its locational
advantage of being based in Freetown, the main urban consumption center.

In summary, the large-scale sector tends to make more intensive

use of skilled labor and capital, two resources in extremely limited

98

supply in Sierra Leone, than was evident in the small-scale industry.
In addition, virtually all of the capital equipment and much of the
skilled labor needed in large-scale production is imported at consider-
able foreign exchange drain. In contrast, approximately 25 percent of
the capital equipment in small-scale production is of indigenous
materials and the local labor force supplies all of the labor skill
needed in the small-scale industry.

In spite of the fact that output of the large—scale sector
contains a greater percentage of high-quality Species, and is landed
near the Freetown consuming center, under current price conditions it
costs approximately 83 cents per leone of fish landed by large-scale
techniques in comparison with an average of only 53 cents per leone of
fish landed using small-scale techniques. These conSiderations would
indicate that investment in small-scale production might provide a
viable alternative to large-scale production when considering

possible employment and output results.

4.9 Summary

The analysis of the socioeconomic environment in which the small-
scale firm Operates revealed considerable variation between the Northern
Region with alternative employment in commercial agriculture the Western
Area which is largely urbanized and the more economically isolated areas
of Southern Region.

Nine homogeneous firm groupings were constructed based on the
type of production technology employed. Labor utilization varied by
firm type in terms of the amount of labor employed relative to other

resources, the type of labor used and the distribution of labor between

99

fishing and nonfishing enterprises. At one extreme, firm type D

(Kroo canoe, cast net, paddle) relied exclusively on family labor in
fishing activities while those firm types operating salla and fante
boats (types G, H, and I) employed hired labor for 75 percent of their
total labor inputs. The amount of labor used annually in fish produc-
tion by the different firm types ranged from 32 man—years for firm type
I (fante boat, ring net, >26 HP eng.) to only one man-year in firm
type D (Kroo canoe, cast net, paddle). This range partially reflects
the greater seaworthiness of the larger boat types which permits
continued Operation of the craft under more adverse weather conditions.
It was found that a high preportion (42 percent) of total male labor
was allocated to net repair compared to actual fishing.

The seasonal profiles revealed that the October through March
period was the peak fishing season, both in terms of monthly labor
employment and output harvested. This period had a 61 percent in-
crease in the monthly fish catch over the six month period between
April and September. The annual output produced per firm ranged from
2.3 metric tons for firm type D (Kroo canoe, cast net, paddle) to
slightly over 100 metric tons in firm type H (fante boat, ring net,
<26 HP eng.).

Initial capital requirements for small—scale fisheries came
primarily from retained earnings from previous employment, however
noninstitutional credit sources (traders, friends, and relatives) pro-
vide almost half of the initial investment capital. The cost of capital
for the small-scale firm was calculated at approximately 40 percent in
comparison to a ten percent cost of capital for large-scale firms. The

largest single item in terms of initial capital investment as well as

100

input costs was the fish net, although for firm types F through I, the
cost of operating and repairing the outboard engine accounted for over
85 percent of purchased input costs.

In the enterprise budget analysis of the different firm types,
it was found that all small-scale technology types yielded "pure"
economic profits. In comparison to the level of economic profits per
leone of output produced in agricultural enterprises, the economic
profits from small—scale fisheries surpass those attained in most
types of rural production actiVities found in the coastal regions.
When comparing the profit per leone of fish produced among the small—
scale firm types, firm type D (Kroo canoe, cast net, paddle) had t0p
ranking. In general the more labor intensive types had the higher
profits per leone of fish landed. However all small-scale firms had
significantly higher profits (lower costs) per leone of fish
produced than did the large-scale firms. It was also found that
lowering the cost of capital from 40 percent to 20 percent did not
change the relative profitability rankings among small—scale firm

types.

CHAPTER 5
PROCESSING AND MARKETING OF FISH SUPPLIES

An analysis of processing and marketing is vital to the study
of the marine fisheries subsector. Since fish are extremely perishable
in a trOpical climate, the value of the producer's catch is dependent
on the availability of processing facilities or a large number of con-
sumers in the immediate vicinity. Since a majority of Sierra Leone
consumers live a considerable distance from fish producing areas, an
understanding of the indigenous system of small scale traders and pro-
cessors is essential to developing fisheries as a low—cost, high—
quality protein source.

~ Field research examined four segments of the processing-marketing

system; (1) smoke processing, (2) smoked fresh fish wholesaling, (3)
smoked fresh fish retailing and (4) raw frozen fish wholesaling. Des—
criptions of other minor segments such as small-scale raw fresh fish
wholesaling-retailing, which were not covered by the field research
will be constructed from available data.1

This chapter will provide a brief overview of the processing—
marketing system followed by a more detailed examination of costs and
returns of smoke processing, smoked fresh fish wholesaling and

retailing, and finally raw frozen fish wholesaling. The modified

 

1These are presented in Appendix 5, 6, and 7 and will be dis—
cussed in Chapter 6 where they are used to complete the aggregate
model.

101

102

altona oven which has been developed by the Rural Fisheries Project in
Elmina, Ghana,will be presented as an alternative to traditional smoke

processing technologies.

5.1 Overview of Marketing Channels

 

The domestic fish supply comes from three different sources.
Raw fresh fish are landed in relatively smaller catches by a large
number of small-scale producers as well as in relatively larger quanti-
ties by a few large-scale producers in Freetown. These sources are
supplemented by imports of raw frozen fish from foreign trawling fleets.
Separate market channels have evolved to accommodate the variability
and form of these three sources. A large number of smoke processors,
each processing a small quantity, handle the daily catch of the isolated
small-scale producers. Smoked fish wholesalers aggregate small-scale
catches and deliver them to inland markets where they may be purchased
either by other wholesalers who carry the product further inland or by
retailers who supply local urban and rural consumers.

The large-scale catch is landed in Freetown where it is quickly
retailed in the raw form to nearby urban markets. The large size of
the urban population relative to the volume of the large-scale daily
catchiacilitates immediate sale with little or no processing necessary.
In contrast, the frozen fish from foreign producers is imported and
wholesaled by a single joint-venture company which owns cold storage
facilities in eleven urban centers. The frozen fish must then be
either retailed raw within six to eight hours or smoke processed

because the retailer does not have frozen storage facilities.

103

5.2 Description of Smoke Processing

 

Most of the small—scale domestic catch is preserved and eaten in
the smoked form. Usually smoke processing is undertaken by the fisher-
man's wife as soon as the catch is landed. Larger species are gutted
and sectioned to increase the surface area of the fish exPosed to the
heat and smoke, thus facilitating a faster and more thorough drying
process.

The traditional techology of the smoking platform (banda) is al-
most universally used throughout the coastal areas. The raised smoking
platform may vary in size but in general, its efficiency is limited
because the heat generated by the fire below is used only once as it
passes through the single layer of fish. In contrast, the improved
smoking ovens of Nigeria, Ghana, and Mali, layer the fish on six or
seven wire racks stacked on t0p of each other, allowing the heat to
pass through several layers before escaping; thus reducing fuel costs.

The traditional banda may be housed in a small corner of the
family kitchen or in a separate well-ventilated structure. During the
dry season, additional platforms may be constructed out of doors to
facilitate processing of the increased seasonal catch. Local hardwoods
provide the basic fuel with preference being given to trees of low
pitch content. Coconut hulls, rice hulls and other combustible by-
products may also be used. Kerosine is frequently used to ignite the
fuels in order to create a more even temperature throughout the drying
surface when a large catch is being quickly processed.

The costs and returns per 100 pounds of raw fish equivalents in
the traditional smoke processing technique are shown in Table 5.1. All

figures are based on raw fish equivalents because it was found that the

104

TABLE 5.1

COSTS AND RETURNS FOR SMOKE FISH PROCESSING USING TRADITIONAL TECHNOLOGY BASED ON SURVEY

OF 93 FIRMS IN SIERRA LEONE (PER 100 POUNDS OF RAW FISH)

 

 

 

 

Item Northern RegionI Western Area j Southern Region
. Leon‘s
EXPENDITURES
A. User Service Capital Costs8
1. Fish Processing Equipment .05 .05 .05
2. Fish Smoking Platform .04 .04 .04
3. Inventory of Working Capital .01 .01 .01
a) Total Capital Costs .10 .10 .10
3. Labor Costs:
1. Male Family -21 hrs. .032 .019 .023
2. Female Family 2.48 hrs. .198 .149 .223
3. Male Hired .05 hrs. .008 .005 .006
4. Female Hired .56 hrs. .045 .034 .050
a) Total Labor Cost .28 .21 .30
C. Purchased Material Inputs:
1. Firewood .27 .27 .27
2. Kerosine and Miscellaneous Inputs .01 .01 .01
a) Total Purchased Material Inputs .28 .28 .28
D. Total Operating Expenditures .66 .59 .68
INCOMES
1. Value of Smoke Fish 9.86 12.95b 10.47
2. Less Value of Raw Fish 9.15 12.33 9.73
B. Cross Margins .71 .62 .72
1. Less Operating Expenditure .66 .59 .68
F. Net Profit to the Firm .05 .03 .04
G. Return Per Hour Family Labor .10 .07 .11
H. Cost Per Leone of Smoke Fish Processed .O7 .05 .06
Assuming 20 Percent Cost of Capital:
A. Total Capital Costs .08 .08 .08
B. Total Operating Expenditures .64 .57 .66
C. Net Profit to the Firm .07 .05 .06
D. Return to .11 .08 .12

 

 

 

 

aDiscount factor of 40 percent.

b

The average value of raw fish used in smoking is less than the value of raw fish sold because the
fresh fish market in Freetown provides an outlet for 1arger,better quality,raw fish which are more difficult
to smoke adequately.

105

weight loss during the drying process varied with the length of time on
the drying platform and the size and Species Of the fish. Samples of

70 selected catches in the five landing sites were weighed before and
after smoking and it was found that Species Of raw fish weighing less
than one pound experienced a 42 percent reduction in weight during the
drying process. Species averaging more than one pound per fish had only
a 24 percent reduction in weight per fish. Therefore, although the
value per smoked fish is on average only 7 percent above its corres-
ponding raw fish value; due to the weight loss factors, the price per
pound of dried fish may be 40 to 85 percent greater than the price per
pound Of raw fish. The traditional technology is Similar throughout

the coastal regions, but the cost Of inputs, particularly labor, varies
between regions. Fuels comprise the largest Single input cost, covering
about 44 percent of all drying costs while labor costs constitute an
additional 36 to 44 percent depending on the region.

Returns per hour Of family labor in Smoke processing are signi-
ficantly lower than in the fish production sector. However, since
female labor comprises over 76 percent of all labor used in processing,
the relevant comparison is with the regional wages for females. This
reveals that returns to labor in processing are slightly higher than
the corresponding female wage rate in each region.

Because the annual service cost Of capital constitutes a minor
part Of the Operating costs, a reduction in the cost Of capital from 40
to 20 percent has a minor influence on the returns to labor and firm
profits. From line H, of Table 5.1 it can be seen that processing
costs constitute approximately six cents or six percent of the value of

smoke processed fish.

106

For purposes Of comparison, technical efficiency ratios Of the
modified altona oven were adapted to Sierra Leone resource costs in con-
structing Table 5.2. The oven consists of seven square wooden-framed
trays measuring four feet by four feet with wire mesh across the bottom,
which are layered inside the oven. The oven is made Of local brick
with a thin cement plaster on the inside and has a corregated iron roof.
The modified altona oven requires considerably more capital investment
than the traditional banda but uses approximately 40 percent less fuel
and onlytxxafourth the labor required by the banda per unit Of fish
processed.

An additional advantage Of the altona oven, not reflected in
Table 5.2 is that it produces a more uniform product having a longer
shelf life than is capable on the traditional banda. Fish, hot-smoked
for three-four hours on the traditional banda, frequently need addition-
al re-drying by wholesalers and retailers after four-five days while
fish having been smoked a comparable time in the altona oven have an es-
timated shelf life of six to ten days depending on humidity and initial
moisture content. This preliminary examination indicates that the altona
oven has distinct advantages over current processing technologies in re-
ducing the required amount of labor and fuel, the two largest cost
items in using the traditional banda technique. Therefore the altona

oven merits further research and development for Sierra Leone conditions.

5.3 Wholesaling_of Smoked Fish in Urban Centers
The relationship between the smoked fish wholesaler and the
producing community is many faceted. As previously mentioned, the

small-scale producer turns to the fish wholesaler as his major source

107

TABLE 5.2

COSTS AND RETURNS FOR SMOKE FISH PROCESSING USING MODIFIED ALTONA OVEN (PER 100 POUNDS OF RAW FISH)

 

 

 

Item Northern Region Western Area Southern Region
EXPENDITURES ---------- — - — Leones — — — __________
A: User Service Capital Costs3

1. Fish Processing Toosl .05 .05 .05

2. Modified Altona Ovenb .08 .08 .08

3. Inventory of working .01 .01 .01

a. Total Capital Costs .14 .14 .14

8. Labor Costs

Female family .07 .05 .08
C. Purchased Material Input

1. Firewood .15 .15 .15

2. Kerosine and Miscellaneous Inputs .01 .01 .01

a. Total Purchased Material Inputs 16 .16 16

D. Total Operating Expenditures .37 .35 .38
INCOHES

1. Value of Smoke Fish 9.86 12.95 10.47

2. Less Value Of Raw Fish 9.15 12.33 9.73
E. Gross Margin .71 .62 .72

1. Less Operating Expenditures .37 .35 .38
F. Net Profit to the Firm .34 .27 .34
G. Return Per Hour Family Labor .38 .30 .38
Assuming 20 percent Cost of Capital
A. Total Capital Costs .10 .10 .10
B. Total Operating Expenditures .33 .31 .34
C. Net Profit to the Firm .38 .31 .38
D. Return per hour family labor .42 .34 .42

 

 

 

 

 

aDiscount factor of 40 percent.

bTotal cost Of oven of 260 lb capacity is 82.92 with expected lifetime of 5 years operating 200

per year.

Sources: [Goverment of Ghana/International Development Research Center Rural Fisheries Project, 1973],
DiSCUssions with Staff of the Fisheries Division. Government of Ghana.

108

of short term working capital. Approximately 30 percent of the small-
scale producers had a Single fish wholesaler from Outside their region
to whom they regularly sold their catch. In addition, a study of 33
wholesale traders interviewed in the producing regions revealed that

25 percent of them bring other products, including foodstuffs, into

the region for sale. Seventy-five percent considered their destination
of fish sale as their home locality while only 20 percent originated
from within the producing region.

Table 5.3 reveals the cost and returns to smoked fish wholes.
saling in various market channels based on a study of 20 traders who
were monitored enroute throughout the channel from producer to consumer.
Since traders could not be identified for some channels data for simi-
lar routes were used tO construct representative budgets. The construc-
ted budgets revealed several channels in which the gross margins be-
tween producing region and wholesaling destination were insufficient to
cover labor and, in some cases, non-labor Operating costs. Therefore,
returns to trader's labor were far below the average female wage rate
for that region which explains why no traders could be identified who
covered these particular market channels.

Initially, wholesale. labor was valued at the unskilled urban
wage rate at the respective urban destination. In those routes for
which data were actually attained, the simple average returns tO the
wholesale trader's labor was approximately 55 percent more than their
respective urban wage rates. MOre appropriately returns could be
weighted by the actual pounds of fish marketed in each channel which

will be determined in the aggregate model in Chapter 6.

109

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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110

Some variable costs, such as transport, revealed consierable
economies Of Size. Although the total transport cost varied directly
with distance, the cost per unit delivered did not always convey this
relationship, as a larger volume per trip was carried on longer trips
than on shorter distances such as the Northern Region-tO-Western Area
channel. This was reinforced with the findings that 38 percent Of
smoked fish retailers in urban Western Area are regularly undertaking
wholesaling activities in purchasing small quantities Of smoked and
raw fish from the Bullom Peninsula or rural Western Area on a twice
weekly basis.

Over the sample of 20 traders monitored continuously enroute,
it was found that breakage averaged between five to seven percent of
the weight carried, depending on distance and the number of vehicle
transfers needed in route. The broken fish were sold at a loss Of
34 percent Of the average retail price of fish in good condition.

In the public's Opinion, the fish wholesaler is believed to be
extracting unusually high returns due to her monopsonistic position in
the fishing community and the Opportunity for collusion between traders
in the same locality. The findings Of the present study would tend
to indicate that while the returns to female labor in wholesaling are
three or four times the female wage rate in the rural producing region,
they are significantly less than the returns which could be earned in
alternative entrepreneurial activities such as gara making [Liedholm

and Chuta, 1976] in the community from which their labor is drawn.

111

5.4 Smoked Fish Retailing in Urban Centers

 

After reaching the urban wholesale market, smoked fish are
usually purchased in smaller quantities by urban retailers (averaging
ten days' supply). Even when larger quantities are purchased, the
fish are completely unpacked from wholesaling containers, counted and
examined for spoilage and breakage before being repacked by the retailer.
Table 5.4 shows the costs and returns associated with smoked fish
retailing in urban centers of the three provinces and Western Area.
Variable costs such as market fees, storages, etc., differed between
urban centers depending on the facilities available. In the Northern
Province all Of the retailers stored fish in their personal living
quarters but an imputed cost Of storage was determined from the whole-
saling firms which averaged .08 cents per pound per day on the unsold
balance. However, in Western Area 54 percent Of the traders stored
in commercial storage where average charges were .17 cents per pound
per day on the unsold balance. Based on interviews with 81 retail
traders dealing with bonga species in seven urban markets over an
eight month period, the average retail price was 44 percent higher
than the average wholesale price.

The return per hour Of retailing labor was considerably below
the urban wage rate for the area and approximately one third the returns
to labor in wholesaling. While Table 5.4 is based on retailers who
purchased locally and undertook retailing activities only, approximately
44 percent Of smoked fish retailers were conscious of the higher returns
in wholesaling and were purchasing their own supplies directly from

producers in the coastal regions.

112

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113

5.5 Frozen Fish Wholesaling

 

Imported frozen fish are wholesaled to seven cold storage
depots in major provincial cities and four depots located near differ-
ent markets in the greater Freetown area. Table 5.5 presents the
costs per metric ton Of frozen fish delivered to the various centers.
Higher per capita incomes and larger urban populations combine to make
the Eastern Province one of the largest frozen fish outlets followed
in rank by Western Area, Northern Province and Southern Province.

Most of the wholesaling operation is administered by the firm's
central Office in Freetown. Therefore, many Of the variable expenses
are not locational specific. The firm.does not own transportation
vehicles but hires private truck Operators who are provided with an
insulated truck box and are paid a fuel subsidy as well as a flat
freight charge per ton delivered to the different centers.

In order to compare the costs Of wholesaling smoked fresh fish
and raw frozen fish in 1974, it is necessary to secure an accurate
estimate of the annual tonnage passing through both channels to various
inland areas. While aggregate wholesaling data were obtained in the
field research, aggregate small—scale wholesaling weights by destina-
tion were generatedin the 1974 base run Of the aggregate model to be
discussed in Chapter 5. A second condition for a meaningful comparison
was that the products are uniform. Since a majority Of the frozen
fish are smoked before retailing, both channels were compared as to
the unit costs of transforming raw fish at the coast into smoked fish
at the inland wholesale markets.

Using the ton miles of fish transported according to the 1974

base run in Chapter 5, the weighted average cost per ton Of

114

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AZOH UHMHmZ mmm Hmouv shad .mMMHzmo mMZszoo 24mm: OH quA<mmuomz mmHm szQmm

m.m mamdfi

115

transforming raw fish at the coast into smoked fish at the inland
wholesale market for frozen imported fish was approximately 18 percent
less than the cost for fresh domestically produced fish. The actual
cost per ton mile Of transportation and Operation Of the wholesaling
firm was Le .79 per ton mile for frozen fish versus Le 1.18 per ton
mile for fresh fish or approximately 60 percent greater for fresh
fish. Because frozen fish are processed in the urban centers where
higher wage rates are paid, the smoke processing costs accounted for
26 percent of the total wholesaling costs. Fresh fish, being har-
vested in the rural coastal communities, is smoke processed paying low
rural wage rates. Consequently, processing costs contribute only
nine percent of total marketing costs for fresh domestically produced

fish.

5.6 Summary

In conclusion this chapter has examined the costs and returns
to resources used in smoke processing, wholesaling and retailing Of
smoked fresh fish as well as wholesaling raw frozen fish. It was
found that smoke processing using the traditional banda resulted in a
40 to 85 percent increase in the value of raw fish, partially due
to the extreme perishability of raw fish. Fuel and labor costs in-
volved in traditional smoke processing constitute 80 to 90 percent of
the total costs of processing. It was found that these costs could be
drastically reduced by introducing the modified altona oven which
because Of its improved heat circulation, uses 40 percent less fuel
and only one fourth the labor per unit of fish compared to the tradi—

tional banda processed.

116

The analysis of the wholesaling and retailing industries for
smoked fish revealed that the fish wholesaler does not Obtain unusually
high returns when compared with alternative enterpreneurial activities
possible in the urban center. The returns to urban retailers were
considerably below that earned by wholesalers. Lastly a comparison of
the costs per ton for wholesaling fresh versus frozen fish revealed
that total wholesaling costs per ton were 18 percent less for frozen
fish than for fresh fish. However because Of the necessity for pro-
cessing much Of the frozen fish in urban centers, the proportion Of
total wholesaling costs incurred because of processing the frozen

fish was nearly triple the share incurred by processing fresh fish.

CHAPTER 6
AN AGGREGATE MODEL OF THE FISHERIES SUBSECTOR

The economic Operations Of nine small—scale production firm
types and a large-scale production firm were described and analyzed
in Chapter 4. Their associated smoke processing, wholesaling, and
retailing industries were evaluated in Chapter 5. Building on these
preceding analyses, this chapter will present an aggregate linear prO-
gramming model representing the combination and interaction of each
of the various types of production, processing and marketing agents
in the fisheries sector. The purpose Of the model will be to evaluate
alternative deve10pment strategies which will maximize the returns
to the subsector subject to regional equipment, labor, and capital and
demand constraints. A diagrammatical explanation of the production-pro-
cessing-delivery systems is followed by a mathematical formulation of
the model describing the interactions of the system. Basic assumptions,
constraints and activities in the model are discussed before the various
runs of the model depicting the 1974 and the projected 1980 situations

are analyzed.

6.1 Description of the Model
The country was stratified into three small—scale production
regions, with large-scale production and importation being located at

Freetown. Consumption demand was identified for the rural and urban

117

118

populations in the three Provinces and Western Area. Figure 6.1
provides a description of the alternative production-processing—
marketing channels incorporated in the aggregate model.

Demand for raw and smoked fish in rural and urban areas (acti-
vities 15 through 17) must ultimately be met from three sources Of
supply; small—scale producers, large-scale domestic producers or
imported from large-scale foreign producers. This transfer from
producer to consumer isaccomplished through siijasic channels. Smoke
fish may be delivered from (a) small-scale producers (activities l-4—9-
12-17) or from (b) raw frozen fish imports (activities 3-7-8-10-14-17).
Raw fish in urban areas may originate either from (c) small-scale
producers whose output is wholesaled-retailed directly (activities 1-5-
11-16) or from (d) large-scale producers delivering directly to Freetown
markets (activities 2-6—11-16) or from (e) raw foreign fish imports
(activities 3—7-8-10-13-16). Finally, raw fish in the rural coastal
regions may be purchased directly from the small-scale producing firms
(activities 1-5-15). Processing Of the domestic catch is primarily
done at the place of catch while frozen imports remain raw, ungutted
until after thawing by the urban retailer who may gut, section
(activity 13) and/or smoke process (activity 14) depending on the
demand. Because of the rapid putrification of raw fresh fish,
wholesaling and retailing (activity 11) is vertically integrated with

the same agent carrying the product from producer to consumer.

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120

In defining the COStS and revenues involved, the following

symbols, subscripts and superscripts are used:

 

Symbols
Z = net returns tO the subsector or total "economic" profit
T = total cost
M = purchased material input costs per unit of output
W = wage rate per unit Of labor
L = units Of laborper unit of output; man-hours for small-
scale industries, man-years for large-scale industries
Lb= fixed labor constraint; man-hours for small-scale indus-
tries, man-years for large-scale industries
Q = quantity in 100 pound raw fish equivalent units
P = price per 100 pound raw fish equivalent unit
F = boat equipment unit consisting of boat with associated
net and prOpulsion equipment
-F = fixed constraint on number of boat equipment units
available
K = annual capital cost Of equipment and working capital
stocks per unit of output where,
K = rV -n
l - (1+r)
with r = discount rate of capital,
n = average life expectancy Of capital item,
and V = the original acquisition cost Of the capital
item
His fixed constraint on annual capital costs.
superscripts

 

O = production

1

n

import

smoke processing

121

h = wholesaling
r = retailing
d = demand

Subscripts

 

i = form of fish product delivered, i.e., raw fresh, raw
frozen, smoked fresh, or smoked frozen

a = demand area

j = type Of technology employed by either production or proces-
sing firms

k = production region

s = sex group for labor in small-scale industries and Skill
level for labor in large-scale industries

ka = interregional transfer from production region "k" to

demand area "a"

6.1.1 Objective Function

In mathematical formulation, the aggregate model consists of

the following set of equations.

h
i

. . _ d O i n r
max1mize Z ZizapiaQia (T + T + T + ZiT + ZiTi) (l)

The Objective function may be defined as maximizing the difference
between total revenue from sales in activities 15 through 17 and total
cost incurred in activities 1 through 14 excluding activities 3 and

7 in Figure 6.1.

6.1.2 Activity Vectors

Domestic Production (Figure 6.1, activities 1 and 2)

 

O _ O O O
T — [:ijijk + stjzkwskszk + ijkKjk ij (2)

122

In the case of large-scale production, only one (j) type of
technology, i.e., trawling, is available which is Operated in one (k)
region, i.e., Western Area. The interest rate (r) used in calculating
the annual capital cost (K;)’ cost is held constant for different tech-
nology types within any one industry but usually differs between
large and small-scale industries due to the fragmented capital market

in Sierra Leone.

Foreign Importation (Figure 6.1, activity 8)

 

Tci = PciQi (3)

The purchased material costs of imports consists Of the inter-
national price of frozen fish plus the import duties levied per 100

pounds Of fish.

Smoke Processing (Figure 6.1, activity 4 and 14)

 

T“ = [zjzkn‘fk + 28szka k1.: jk + 2321331.] q“ jk (4)
In the initial 1974 model on1y_one (j) type of smoke processing
is incorporated in the model, i.e., the traditional banda. However in
the 1980 model the modified Altona oven may be activated to an equi-
valent Of 30 percent Of the total smoked fish produced in each region
k in 1974. The Altona oven uses only two labor types (8), i.e.,
female family and female hired as compared to four labor types in
traditional smoke processing technologies. In Equation 6 below frozen
fish are smoked by the retailer (activity 14); only the traditional

technology is available and all processing labor is valued at the wage

123

rate in the demand area (a) where the processing occurs rather than
production region (j).

Raw processing (activities 5 and 6) does not involve invest-
ment of material, labor or capital costs as the fish are already in
this form when harvested. Market channel 1-5-15 depicts direct con-
sumption including subsistence consumption in the producing regions

and as a result it does not incur any processingmmarketing costs.

Wholesaling (Figure 6.1, activities 9, 10, and 11)

 

h Lh
£1111 ‘ Eizkghika + 2123 + 2 izka K1111 Qi (5)

«isa Liska

When the form of fish product (i) being considered is smoked or
raw fresh (activities 9 and 11), the labor type (3) refers to the
female labor invested at the unit cost of the small-scale industrial
uneducated urban wage in the demand area (a) served. Otherwise when
"1" indicates frozen fish (activity 10), labor types (3) refers to
skill level and is valued at that large-scale industrial skill level
salary in urban Western Area (a). The same small-scale versus large—
scale distinction applies when considering interest rate (r1) and

expected equipment life (11).

Retailing (Figure 6.1, activities 12, 13 and l4)

r _ r

Z:iTi —[zizaMra + Z:izszaw isaLisa + Z i: aKia] Qia (6)
Costs of transport from urban market to rural consumers are

included in purchased material costs Mr for retailing smoked fish to

rural demand areas. Since all retailing is undertaken by the

124

small-scale industry, the interest rate (r1) and life eXpectancy
(11) remain constant for all firms. However the amount of equipment

required varies by type of retailing.

6.1.3 Resource and Demand Constraints

Demand Constraints_

 

 

zizaogi z zjqugk + Qi (7)
Imports are allowed to compete with domestic production in
satisfying area demands and all effective demand must be met.
Production Equipment Constraints
F. <'f (8)

Jk'_ jk

The total number of available boat/net/propulsion units
(Rsk) is fixed in the 1974 model but in the 1980 model is allowed to
adjust with the varying flexibility constraints of 50 percent more
and 50 percent less than the 1974 ”fidk" in particular runs or 100
percent more and 50 percent less in alternative runs depending on the
assumed rate of new boat construction. The only exception to the 50
percent lower flexibility constraint was in the case of large-scale
production equipment. Because large—scale firms can dispose of non-
profitable equipment stocks through international sales or transfers,
the lower flexibility constraint was established at 66 percent less

n" n
than the 1974 ij .

Regional Labor Constraints

 

_ 0 n
Lsk 3— Zj (szk + szk) (9)

125

Small—scale production and smoke processing labor was uncon-
strained in the 1974 base run model but was then constrained by sex
by region in the 1980 base run at a level permitted byaa4.6 percent
compound annual growth rate in the quantity used in the 1974 base run.
However, female labor in rural Western Area was left unconstrained in
the 1980 model because it is primarily used to prepare meals for hired
labor, a task which can easily be augmented by labor from other enter-
prises or from nearby urban labor pools. Large-scale labor was assumed
unconstrained in both models as the higher skilled labor (sea captains,
managers) are frequently recruited abroad and lower skilled labor can

be easily drawn from urban unemployed in Freetown.

Small-scale Annual Production Capital Constraints

 

E 3_Z 2 K? ? + Z Z Kn ?
J k JQJk j k jQJk

(10)
Like labor, capital was unconstrained in the 1974 base run but

was constrained nationally for production and processing industries in

the 1980 model at a level attained by a 5.4 percent compounded annual

growth rate in the quantity required by the 1974 base run.

This corresponds to the annual growth in new productive

capacities in the agricultural sector proposed for the current plan-

ning period.

LargEescale Annual Production Capital Constraints

 

0

K _>_ Kijjk

(11)

126

Large-scale production capital was constrained in the same
manner as small-scale capital described above, except in the closed-
economy run of the 1980 model where an annual growth rate of 10.8
percent was required to attain a feasible solution given the other
constraints. This can be justified since international capital
supplies are accessible through joint-venture corporate ownership

arrangements for large-scale firms.

6.2 Parameters of the MOdel

 

Since the aggregate model was based on the microeconomic survey
described in previous chapters, Table 6.1 presents the sources for the
various model parameters.

The present survey analyzed the cost and returns for smoked
fresh and raw frozen fish wholesaling as well as smoked fresh fish
urban retailing. These channels encompass a major portion of the total
fish marketed. However a minor share of the total fish consumed are
marketed in other forms through alternative markets such as raw whole-
saling-retailing and rural smoked retailing not covered directly in the
survey data. Based on data obtained in the surveyed channels and the
author's familiarity with the other markets, activity vectors were
constructed for these alternative channels to complete the aggregate
model (see Appendices 5, 6, and 7).

The model is used to determine the following aggregate
variables: (a) the quantity of output produced by both small-scale and
large-scale industries as well as imports needed to meet domestic de-
mand, (b) the number of establishments by type of technology producing,

(c) the number of pe0ple employed in the production-processing-

127

TABLE 6.1

SOURCES FOR PARAMETERS OF THE AGGREGATE MODEL

 

 

Activity Parameter Source
Production ij Appendix 3
Mgk Tables 4.12 and 4.16
W Table 4.5 and Appendices 5,
sk
6, and 7
o
L . Table 4.4
83k
K; Tables 4.12 and 4.16
n n
Processing Mgk'szk’Kj Table 5.1 and 5.2
h h
' 5. , . i 5
Wholesaling Mgka’Liska 1 Tables 3 5 5 and Append x
r r r
Retailing M L K Table 5.4 and Appendices 6
ia isa i
and 7
Total Revenue an Appendix 4
Pia Table 5.4 and Appendices 5, 6,

 

 

and 7

 

marketing system by region, (d) the quantity of smoked and raw fish

marketed by each region through the various market channels (see

Figure 6.1).

In addition the model solves for the net economic re-

turns to the subsector after paying the market price for all resources.

The final aggregate statistic generated is the subsector's contribu-

tion to the country's Gross Domestic Product.

128

6.3 Modeling of the 1974 Situation
The activity vectors presented in the preceding sections com-
pose the model describing the situation in 1974. The maximum number
of boat units available were set as less than or equal to the number
available in 1974. Table 6.2 provides a comparison of the base run

with the actual 1974 conditions.

Base Run 1974. Since smoked and raw fish are close
substitutes, one would expect their demand schedules to be closely
interrelated. Retail Sales of smoked fish compete with raw fish
sales in satisfying domestic demand. For this reason,
the base run integrates inland urban demand for smoked
and raw fish supplied from both fresh and frozen sources.

This is done by creating a single smoked fish demand in inland areas
and allowing both fresh and frozen fish to compete in the markets
after it is smoked. However, at the coastal urban areas (Freetown)
fresh domestic and frozen imported fish supplies compete in satisfying
both raw and smoked urban demands. In the rural coastal areas, raw
fish demand is met by intraregional production only.

The result of this run is an optimal solution closely repli-
cating the actual 1974 conditions yet allowing imported frozen and
domestic fish supplies to compete freely in smoked and raw fish markets.
Frozen imports which are required to meet domestic demand rose to
6,700 metric tons in the base run, just 12 percent more than actual
reported imports for 1974. Conversely, domestic small-scale production
industries were operating at over 91 percent of capacity while large-

scale producers were operating at over 45 percent capacity. Because

129

TABLE 6.2

COMPARISON OF ALTERNATIVE RUNS OF 1974 MODEL WITH ACTUAL

1974 SITUATION

 

 

 

Actual Base Run Frozen
1974 Fish Competing
Situation With Fresh Fish
1. Parameters
Cost of Capital in Small—Scale Industries .40 .40
Cost of Capital in Large-Scale Industires 10 .10
Import Duty on Frozen Fish 10 .10
Import Duty on Small-Scale Equipment .36 .36
Import Duty on Large—Scale Equipment 10 .10
2. Number of Establishments:
Type A, Std. Canoe, Ring Net, Paddle & Sail 569 569
Type B, Std. Canoe, Set Net, Paddle & Sail 1222 785
Type C, Std. Canoe, Drift Net, Paddle & Sail 2542 2542
Type D, Kroo Canoe, Cast Net, Hook & Line,
Paddle ‘ 234 234
Type E, Salla Boat, Beach Seine, Paddle 147 147
Type F, Salla Boat, Ring Net, < 15 HP Eng. 203 203
Type C, Salla Boat, Ring Net, > 15 HP Eng. 79 79
Type H, Fante Boat, Ring Net, < 26 HP Eng. 114 114
Type I, Fante Boat, Ring Net, > 26 HP Eng. 51 51
Large-Scale trawlers 9 4
3. Small-Scale Fisheries Employment (man-years)b
Production-Processing n.a.
Western Area 4149
Northern Province 7413
Southern Province 5045
Wholesaling-Retailing
Western Area 10421
Northern Province 12731
Southern Province 8005
Eastern Province 8352
4. Large-Scale Fisheries Employment (man-years)
Production n.a
Unskilled Labor 196
Skilled Labor 13
Wholesaling
Unskilled Labor 23
Semi-Skilled Labor 79
Skilled Labor 5
5. Output of Small-Scale Industries (metric tons) n.a 46205
6. Output of Large—Scale Industries (metric tons) n.a 1751
7. Frozen Fish Import Requirements (metric tons) 5980 6703
8. Net Economic Returns to the Subsector
(million Leones) n.a. 1.87
9. Value Added to Gross Domestic Product by the
Subsectorc (million Leones) n.a. 17.28

 

 

 

a . .
Derived from secondary sources discussed in Chapter 2.

b
Assumes 1500 working hours per man year in small-seal subsector.

c
Calculated as value of output less purchased inputs except labor and capital costs.

n.a. means not available.

130

this closely approximates the actual 1974 situation this was used as
the base run for projections to 1980.

This base run indicates that the smallescale production-pro-
cessing industry employed approximately 16,600 full time employees
while large—scale producers employed 209 people. This derived eme
ployment level is about 25 percent more than other previous estimates
of rural small-scale fisheries employment [Aubray, 197l,--10,000;
FAO, 19734b;41,500;vaernment of Sierra Leone, l973-b,--11,000]..
Wholesaling and retailing of smoked and raw fish provide incomes for
an additional 39,000 people. In total, the base run indicates that
the fisheries subsector employs approximately 56,000 people or five
percent of the labor force,in some aspect of the fish production-
delivery system and contributes about 17 million leones to Gross
Domestic Product, or nearly four times the subsector's estimated con-
tribution in the early 19703.

The interregional flows of fish indicated by the base run of
the model in 1974 are shown in Table 6.3. All of 1974 small-scale
production in Western Area was marketed raw to western Area rural and
urban markets. In addition to satisfying intraregional subsistence
consumption, the Northern Region marketed 18.4 thousand metric tons
of which 85 percent was smoked-processed in the region. This smoked
output was then wholesaled to Freetown (36 percent) and to Northern
Prbvince inland markets (64 percent). The remaining 15 percent of
marketed production from Northern Region was wholesaled raw to Free-
town. Northern Region was the primary center for small-scale produc-
tion, yielding 44 percent of all small-scale output. Marketed output

from Southern Region small-scale producers was smoke processed and

131

TABLE 6.3

INTERREGIONAL COMMODITY FLOW IN 1974 AND 1980

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Southern Northern Eastern [
Western Area . . .
Prov1nce Prov1nce Province
1 Total
Supply
From Supply Area Raw Smoked Raw Smoked Raw Smoked Raw Smoked
1
He ric Tons—---
1974 Base Run
Frozen Imports 2701 4002 6703
Large-Scale Western Area 1751 1757
Small—Scale Western Area 12070 12070
Small-Scale Southern Region 1808 6388 978 4498 13672
Small-Scale Northern Region 2797 ‘_5656 2092 9918 20463
'Total Demand 16618 5656 1808 6388 2092 13597 8500 54659
1980 Base Run
Frozen Imports 2688 3702 5485 11875
Large-Scale Western Area 1858 1858
Small-Scale Western Area 16090 16090
Small-Scale Southern Region 2867 6098 3029 6166 18160
Small-Scale Northern Region 4028 7753 2478 11906 26165
Total Demand 22776 7753 2867 8786 2478 18637 11651 74948
Run 1:
Frozen Imports 5926 2688 3702 5485 17801
Large-Scale Western Area 2419 2419
Small-Scale Western Area 14755 14755
Small-Scale SOuthern Region 2867 6098 1285 6166 16416
Small-Scale Northern Region 5602 1827 2478 13650 23557
Total Demand 22776 7753 2867 8786 2478 18637 11651 74948
Run 4:

‘ Frozen Imports 2224 3702 5435 11411
Large-Scale Western Area 1295 1295
Small-Scale Western Area 17021 17021
Small-Scale Southern Region 2867 6562 3029 6166 18624
Small-Scale Northern Region 4460 _fi7753 2478 11906 29222
Total Demand 22776 7753 2867 8786 2478 18637 11651 74948

Run 5:
Frozen Imports 1176 3702 5485 10363
Large—Scale Western Area 3240 3240
Small-Scale Western Area 16882 16882
Small-Scale Southern Region 2867 7610 2751 6166 19394
Small-Scale Northern Region 2654 7753 2478 12184 25069
Total Demand 22776 7753 2867 8786 2478 18637 11651 74948

Run 6:
Frozen Imports 137 2688 3702 5485 12012
Large—Scale Western Area 1721 1721
Small-Scale Western Area 16882 16882
Small-Scale Southern Region 2867 6098 3029 6166 18160
Small-Scale Northern Region 4173 7616 2478 11906 2§173
Total Demand 22776 7753 2867 8786 2478 18637 11651 74948

Run 7:
Frozen Imports 0
Large-Scale Western Area 1295 1295
Small-Scale Western Area 21481 755 22236
Small-Scale Southern Region 2867 8786 11651 23304
Small-Scale Northern Region 6998 2478 18637 28113
Total Demand 22776 7753 2867 8786 2478 18637 11651 74948

 

 

132

then wholesaled to other areas within Southern Province (54 percent),
Eastern Province (38 percent) and Northern Province (8 percent).

The marginal values per leone of fish produced through increased
production equipment are shown for each technological type and

each region in Table 6.4. This table reveals that under 1974 price

and resource conditions, an additional leone of fish produced by

the salla boat with beach seine technology will pay for all resources
used plus a "pure" profit to the subsector of Le 1.22 if it is produced
in Western Area and Le .71 or Le .64 if produced in Southern or Nothern
Regions respectively. It is apparent that the salla boat with beach
seine and the standard canoe with either the ring or drift nets yield
the highest marginal values per leone of fish landed.

Considerable differences also exist in the level of marginal
value of additional production of any one firm type when comparing
across regions. Because of their closer proximity to higher income
urban populations in Freetown and Eastern Province; Western Area and
Southern Region are the most profitable regions for Operating additional
small-scale boats..‘However, increased production in the large-
scale industry would not increase the level of "pure" profits to the
subsector as it would be displacing production from other more pro-
fitable technologies including foreign imports.

6.4 Evaluation of Alternative Development
Strategies in 1980

 

Based on the results of the 1974 base run, projections of the
subsector's performance under alternative deve10pment strategies were
made up to 1980,the end of the current planning period as shown in

Table 6.5. Over this period it was assumed that the 1974 demand for

133

TABLE 6.4

MARGINAL VALUE PER LEONE OF FISH PRODUCED FOR ADDITIONAL
EQUIPMENT UNITS BY TYPE OF FISHING TECHNOLOGY AND BY REGION
IN 1974 BASE RUN

 

 

 

 

Region
Type of Technology
Western Northern Southern
— Leone-—- ----------

Std. Canoe, Ring Net, Paddle &

Sail .76 .35 .42
Std. Canoe, Set Net, Paddle &

Sail .18 0 .03
Std. Canoe, Drift Net, Paddle

& Sail .82 .38 .46
Kroo Canoe, Cast Net and Hook

& Line, Paddle .53 .23 .31
Salla Boat, Beach Seine,

Paddle 1.22 .64 .71
Salla Boat, Ring Net, < 15 H.P.

EnSine .60 .21 .25
Salla Boat, Ring Net, > 15 H.P.

Engine .32 .08 .12
Fante Boat, Ring Net, < 26 H.P.

EnSine .48 .16 .22
Fante Boat, Ring Net, > 26 H.P.

EnSine .24 .05 .05
Trawler 0

 

 

 

 

134

TABLE 6.5

LEVEL OF RESOURCE UTILIZATIGI AND AGGREGATE RESULTS OF ALTERNATIVE 1980 RUNS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Open Economy Im-
lavor- Pavor— Untavor- “int:
Unit Va ainry g Rea source able To able l'o able To ha:
Availability Small rn— rgr
Scale Scale Scala
Bale l 2 3 4 5 6 7
1 Parameter Percent
Cost of Capital for Small—Scale Production Induatriea 40 40 40 40 20 40 40 40
Coat of Capital for Large-Scale Production Induatrloa 10 10 10 10 10 10 20 10
Coat of Capital for Small-5c lel Mar 3 Industrial 40 40 40 40 40 40 40 40
Coat of Capital for Large— -Scale Marketing Industrial 10 10 10 10 10 10 20 10
Import Duty on Frozen Flo h 10 10 10 10 10 40 10 --
Import Dutyon mmaS ll- Scale Equipment 36 36 36 10 36 36 36
Import Duty an Large-Scale Equipment 10 10 10 10 10 10 20 10
Annual Grow: in Labo 4.6 2.3 4.6 2.3 4.6 4.6 4.6 7.5
Annual Growth in Small-Scale Capital 5.4 5.4 2.7 2.7 5.4 5.4 5.4 7.9
Annual Growth in Large-Scale Capit 5.4 5.4 5.4 5.4 5.4 10.8 5.4 -4.9
Maxi-1m Growth in Capital Stock of Boats 50 50 50 50 100 50 50 100
Maximum Decline in Capital Stock of Boats 50 50 50 50 50 50 50 50
2. Nunber of Establishment to Number
Type Std. Canoe, Ring He t. Paddle 6 Sail 855 855 855 855 1139 855 855 1139
Type 8, Std. Canoe. So at He t, Paddle 6 Sail 758 612 612 612 758 758 609
Type C. Std. canoe, Drift Net, Paddles Sail 3812 3 12 3812 3812 5083 3812 5083
Wpc D. Kroo Canoe, Cant No or and Hook 6 Line. Paddle 319 117 351 117 117 223 319 468
Type E, Salla Boat, Beach Seine. Paddle 223 2 223 223 294 223 223 294
Type F. Salla Boat, Ring Net. <15 HP Engine 305 305 121 293 405 305 305 405
Ty , Salla Boat. Ring Net. > 5 HP Engine 76 6 49 39 63 7 74
Type 11, Panto Boat, Ring Net, <26 HP Engine 174 152 174 157. 1.33 174 174 188
ype I, Panto Boat, Ring Net. >26 HP Engine 39 26 24 52 39 51
Large-Scale Traulera 4 3 5.6 5.6 5.6 3.0 7.5 4.0 3.3
3. ubor El playun mn-yun‘
Sma ll-Scale Production/Processing
5453 4765 5392 4765 5435 5453 5453 714
Northern 9273 8218 B443 8217 9250 9275 9268 l0274
Southarn 6645 5&9 6127 5808 6646 6714 6645 8164
Small-Scale mWholraling/htailing
14308‘112810113265 12797 14365 14126 14286 13735
Southern AProvince “M" "“ ‘ "“'“ "m“ 10369 066 10236 1003
Baatern From 11450 11450 11450 11450 11450 11450 11450 13152
No rternh Pro vim: 17470 17446 17457 17446 17470 174 1.7470 17995
Largo-Scale Production _ 223 287 7 155 388 206 155
Large-Scale Wholesaling/Retailing 1.90 .285 247 285 182 165 192
4. Clpitl mu Le
Small- -Scale Production/Protesting Capital 1751 1.577 1571 L571 1.129 1762 1751 211.5
Large-cs a1: Production ptal 94 120 120 120 65 16 132 65
Small- Scale Whole saling/gtaillng Capital 444 442 442 441 445 445 444 456
Large-Sula "holes-1m: Capital 147 221 191 222 m 119 as: -
5. Aggregate Maulta
Output of Small-Scale Industrial H Tons 61215 54728157117 54682 62240 61345 61215 7X52
Out Hint of Large-Scale lnduatrl? ll IIona 1858 2419 2419 2419 1295 3240 1721 1295
"0““ “lb II IHPO H. Iona 11875 17M“ 15412 17847 11411 10363 12012 —-
Nte tEcon omic Returnl to the Subaector 1. La 2.81 2.09 2.45 2.09 4. 5 2. 2.66 3.54
Value Added to Groau Do-eatic Product by tho Sub-ector Mil. Le 23.32 21.71 22.59 21.70l23.80 22.87 23.28 26.10

 

 

 

 

IAnnular 1500 working hours per man year on anall-acala induatriaa.

oto: Altona Oven Capacity for amok: proculing VII used to maxi-n in
t.ovn

acale catch van mark-tad ran to Free:

all regions except Heater-n Area vhara anall-

135

fish would continue to grow at a compound annual rate of 5.0 percent
per annum based on (a) a population growth rate of 2.3 percent per
annum, (b) an annual increase fllper capita income of 3.6 percent,

and (c) an income elasticity of demand for fish of .74 as derived
from a household budget study [Byerlee and King, 1976]. Other con-
straining resources (labor and capital) are allowed to grow at vary-
ing rates depending on the deve10pment strategy. Capital constraints
in the 1980 models took two forms, (a) a total capital constraint

for each production industry, both small-scale and large-scale, and
(b) flexibility constraints on the number of boat and associated pro-
duction equipment units available thus limiting the growth in new
establishments. The level of capital constraints vary among the differ-
ent runs.

The various runs of the 1980 model will trace the consequences
of alternative assumptions on (a) the number of establishments, (b) the
level of output produced by each industry as well as frozen fish im-
ports required, (c) the level of employment by industry by region,

(d) the capital requirements by industry and (e) the subsector's con-
tribution to Gross Domestic Product. The assumptions or parameters
governing the model will deal with changes in the (a) cost of capital,
(b) import duty on frozen fish and imported fishing equipment, (c) an-
nual growth in labor supply, (d) level of investment and (e) the

annual growth in the capital stock of boats.

136

6.4.1 Policies Varying Resource Availability

Base Run 1980. If current import policies with respect to frozen

 

fish and fish equipment as well as capital policies regarding small and
large-scale capital costs are continued, the results are represented in
the base run of the 1980 model. Although the actual growth in labor
supply for small-scale fisheries is not known, the fact that returns were
higher in fisheries than in other agricultural enterprises in the several
rural coastal regions and that a considerable share of the respondents
interviewed had migrated to the coastal communities would indicate a
growth in labor supply greater than the 2.3 percent due to natural
pOpulation growth alone. This run assumes an annual 4.6 percent
growth rate in labor supply. Such an accelerated growth in fisheries
manpower is possible only through a continuation of an active informal
apprenticeship training program supplemented by more formal training
proposed for implementation by the Fisheries Division in the current
development plan. The current indigenous practice of four years of
apprenticeship under a skilled fisherman, would most likely not
facilitate the required growth in skills. The annual growth in small
and large-scale capital is established at 5.4 percent, the rate of
growth in new productive capacities proposed for the agricultural
sector over the current planning period. Other parameters are
assumed as specified in Table 6.5.

In comparing Base Run 1974 (Table 6.2) with the Base Run 1980

(Table 6.5), it is evident that certain more profitable technologies

137

have established new firms at the maximum growth rate1 possible

(types A, C, E, F and H) while others have increased less rapidly and
in some cases have declined over the period (types B, G, and I). At
the same time, Table 6.3 shows that small-scale production increased
by 33 percent in Western Area and Southern Region followed by 28 per-
cent in Nothern Region. These results are confirmed by the relative
magnitudes of marginal values per leone of fish produced by additional
boat production units when comparing across technologies and across
regions in Table 6.6.

Total employment in small-scale production-processing in-
creased from 16,607 man-years in 1974 to 21,371 in 1980 or 4.3 percent
annually according to the 1980 base run. Additional male labor
commanded a higher marginal value in Southern Province than in Northern
Province, but both were lower than the value attained in Western Area.
If the growth in female labor supplied in rural Western Area was con-
strained to the natural population growth rate of 2.3 percent annually,
additional female labor had a marginal value nearly 20 times the urban
unskilled wage rate. This would be quite unlikely as labor would
easily flow from alternative enterprises into fish production activi-
ties. Because of the ease of this transfer in Western Area, the
supply of female labor was considered unconstrained in the 1980 model.

Small-scale output rose from 46,205 metric tons in 1974 to

61,344 metric tons in 1980 or approximately 5.5 percent annually while

 

1Flexibility constraints on the construction of production
equipment units permitted a maximum of 50 percent increase over the
number of boat units available in 1974.

138

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139

the absolute level of large-scale output declined slightly over the
period. The subsectors' contribution to Gross Domestic Product in
terms of total leones increased by 5.1 percent annually over the
period as shown in Table 6.5. In contrast, the absolute quantity of
imports rose by 10 percent annually and the relative share of
domestic supply coming from foreign imports increased from 12.3 per-
cent in 1974 to 15.8 percent in 1980.

Analysis of the marketing pattern in the 1980 base run
shown in Table 6.3, revealed that a greater prOportion of Northern
Regions' output supplies Freetown markets than in 1974 while smoked
frozen imports are now necessary to meet demands in Southern Region

which was self-sufficient in 1974.

Run l—-Slow Growth in Labor Supply. The 1980 base run
assumed a growth in trained and untrained labor supply of 4.6
percent annually facilitated by some form of active recruitment
and training program as proposed in the development plan. Run 1
traces the aggregate effects if such a program is not effectively
implemented and the annual growth in manpower is the same as the pOpu-
lation growth rate of 2.3 percent. The results of Run 1 reveal that
frozen imports rose by nearly 50 percent above the level required in
the Base run and increased approximately 18 percent annually' from 1974.
At the same time due to the relative labor scarcity, domestic produc-
tion shifts to the more capital intensive large-scale firms.
A greater prOportion of the small—scale catch is now sold raw
rather than smoked which requires scarce rural labor (see Table 3.6).

This is compensated for by smoking frozen fish using urban retail

140

labor, a resource not constrained in the model.

In summary, Run 1 confirms the importance of deve10ping an
extension-manpower training program as well as the economic incentives
necessary to increase the supply of trained manpower available to
small-scale producers above the population growth rate of 2.3

percent.

Run 2-—Reduced Investments in Small-Scale Fisheries. A second

 

assumption in the 1980 base run, was a 5.4 percent annual growth rate
in capital as projected in the development plan--a growth rate
considerably higher than in recent history. Run 2 presents the

model results if such a capital growth rate does not materialize

and the capital stock grows at a rate of 2.7 percent.

In this run imports increased by 30 percent over the 1974
level as compared with a 50 percent increase in Run 1 when the labor
supply was constraining. Also evident is the 7 percent drop in employ-
ment in small-scale production occurring primarily in Northern Region
and a shift among the small-scale firms to the more labor intensive
types as exemplified by firm type D and to large-scale production
for which the rate of investment was not reduced.

In comparing Run 1 and Run 2, it is clear that a reduced
growth in trained manpower for fisheries has a stronger impact in in-
hibiting domestic fisheries development than does the projected

slow growth in capital stock.

Run 3—-Slow Growth in Both Labor and Capital Stock Supply.
Run 3 combines the worst assumptions of both Runs 1 and 2 by

assuming that neither available capital nor trained manpower grow at

141

the projected rates as in the base run but rather grow at 2.7 and 2.3
percent respectively.

This run conforms more closely to investment and manpower per-
formance of the 19608 and assumes a continuation of the past trends
in resource use in fisheries. The net result in terms of domestic
catch, labor employment, Gross Domestic Product and choice of produc-
tion technology utilized, differs very little from the results of run
1. This again supports the evidence that an adequate supply of trained
manpower is more critical to expanding domestic production than is

increased access to capital.

6.4.2 Policies More Favorable to Small-Scale Production

Run 4—-Reduced Capital Costs and Increased Growth in Capital
gtggk. In an effort to design a development strategy favorable to
small-scale production, several alternative runs were examined which
are not shown in Table 6.5. As mentioned earlier, the indigenous
trader provides small-scale producers with their major source of
Operating and medium term investment credit at an annual cost of
capital of over 40 percent in 1974. If this source is augmented by
1980 through an institutional credit program so as to reduce the cost
of capital to its assumed economic opportunity cost of 20 percent,
while leaving all other parameters unchanged, the first alternative run
indicated that no change would occur in either the level or composition
of technological firm types in Operation, or the level of employment,
output or Gross Domestic Product from the 1980 base run. The fact
that no change occurred in the optimum choice of small-scale technology

type is partially due to the relatively small amounts of capital used

11.. I I -‘ II III I . I.

142

by small-scale firms and the considerable differences in profitability
between technology types. This indicates relatively little potential
for capital-labor substitution between small-scale technologies over
this range of interest rates.

However if small-scale capital costs are reduced to 20 per-
cent and the construction of profitable boat types accelerated so
that their population doubles by 1980 while leaving all other para-
meters at their 1980 base run levels, Run 4 shows that domestic pro-
duction shifts from large-scale to small—scale firms due to the
relatively cheaper capital in the small-scale sector and the available
boats of firm types which are more profitable than large-scale firms.
Within small-scale production, Table 6.6 indicates that only firm
types A, C, E, and F yield positive marginal values per leone of fish.
produced by additional equipment resources. The population of these
firm types doubled over the 1974-1980 period the maximum rate possible
under the assumed flexibility constraint while the population of firm
types B, D, G, H and I remain constant or decline over the period.

Total output by the small—scale industries and the subsector's
contribution to Gross Domestic Product increases by nearly 20 percent
over the base run and imports and large-scale output drop to their
lowest level of any run considered thus far. Table 6.4 shows that
the largest increase in small-scale production occurs in Southern Re-
gion followed closely by Northern Region. The increased production in
Southern Region replaces part of the frozen imported fish previously
required by Southern Province, while the increased production in North-

ern Region is marketed raw to Freetown replacing large-scale production.

143

Further policies designed to benefit capital intensive small-
scale firms such as subsidizing petrol and oil costs at 25 and 40
percent rates were not sufficient to alter the small-scale production

performance achieved in Run 4.

6.4.3 Policies More Favorable to Large-Scale Production

Run 5-—Increased Growth in Large—Scale Capital and Increased

 

 

Import Duties on Foreign Fish. Large-scale firms can obtain access to
external capital from international markets. Therefore runs were
executed which assumed an annual growth in large-scale production
capital of 10.8 percent in contrast to the 5.4 percent previously
assumed. Since some large-scale production capital was unused at a
5.4 percent growth rate, this change by itself did not produce results
which differed from the base run.

When the import duty on frozen fish was increased from 10
to 20 percent in conjunction with the accelerated large-scale capital
growth rate, three additional large-scale trawlers were activated to
replace 1290 metric tons of frozen imports. Large-scale capital be-
came constraining with a marginal value on additional capital of .42
leones. No change occurred in the small-scale industrial operation.

However, if the import duty on frozen fish was further in-
creased to 40 percent, as is reported in Run 5, not only are the three
large—scale trawlers activated but there is a shift within small-scale
production from the labor intensive firms (type D) to firm type I
(fante boat, ring net, >26 HP engine), in Western Area, which is a more
capital intensive firm containing slack boat resources in the base run.

Large-scale production capital becomes even more constraining. An

144

additional leone of large-scale production capital would repay the
borrowed leone and increase the economic profits of the subsector by
Le 1.39. The increased large-scale production from the three addition-
al trawlers replaces raw fish being marketed in Freetown from the
Northern Region production within Northern Province which in turn
frees more of Southern Region production for meeting demands within
Southern Province.

In summary a policy of increasing the annual growth of large-
scale production capital to 10.8 percent as well as increasing the im-
port duty on frozen fish to 40 percent results in a 13 percent reduc-
tion in frozen fish imports, a 75 percent increase in large-scale pro-
duction and a slight increase in small-scale production over the base
run results. However, the subsector's annual contribution to Gross
Domestic Product actually declines by two percent as compared to an

increase of two percent when small-scale firms were favored in Run 4.

6.4.4 Policies Unfavorable to Large-Scale Production

Run 6--Increased Capital Costs and Increased Import Duties on

 

Production Equipment. Due to the high import requirements of large-
scale producers and the scarcity of foreign exchange earnings, or
because of the greater economic profitability and employment potential
in small—scale industries, a policy aimed at shifting production away
from the large-scale industry may be justified. Run 6 is designed to
approximate such a shift.

The cost of capital for the large-scale industry is increased
from 10 percent to 20 percent, the assumed economic opportunity cost of

capital. At the same time, the import duty on large-scale equipment is

145

increased to 20 percent. All other parameters affecting the small-
scale industry and the frozen fish imports remain unchanged from their
1980 base run levels.

The result of these changes is that large-scale production
declined from 1,858 metric tons in the 1980 base run to 1,721 metric
tons or by nearly eight percent. This was replaced by an off- _
setting increase in frozen fish imports from 11,875 metric tons in the
1980 base run to 12,012 metric tons. Small-scale production remained
constant as those firms which were more economically profitable than
frozen imports were already fully utilized; therefore frozen imports
increase rather than small-scale production. This run would indicate
that a policy of increased large-scale capital costs and increased
import duties on large-scale equipment would have little effect on
small-scale employment or output unless it is accompanied by policies
aimed at increasing the productive resources available in the small—
scale industry. The result of Runs 5 and 6 indicate that frozen fish
imports compete primarily with large-scale production and that there
is little competition between small-scale fish production and frozen

fish imports.

6.4.5 A Policy of Self-Sufficiency

Run 7f-Increased Growth in Labor Supply, Investment Capital,
and, Capital Stock of Boats. The last run of the 1980 model determines
one possible means of attaining self-sufficiency by the end of the
current planning period. It is assumed in Run 7 that policies affecting
the cost of capital and import duties for both small-scale and large-scale

firms remain unchanged from the actual 1974 situation. The flexibility

146

constraints on the growth in the capital stock of boats are relaxed
so that the population of profitable boat types can double over the
1974-1980 period if necessary. Labor supply as well as small-scale
and large-scale production capital were left unconstrained so that
the actual growth rate required would be derived by the model. This
permits the more efficient technology types to completely utilize
their capital stock of boats before activating less efficient types.
The results of this run reveal that while self-sufficiency
is possible, the level of resources necessary to achieve the goal make
its attainment in the 1974-1980 period highly improbable. Trained
labor supply employed in small-scale production.would be required to
grow at 7.5 percent annually, or nearly three times the growth in labor
supply due to population growth alone. Total labor employed in the
fisheries subsector gunm;from 56,432 in 1974 to 81,621 in 1980 if self-
sufficiency is attained.
Among the different small-scale technologies, firm types A, C,
D, E, and F increased their number of establishments at the maximum
growth rate of 100 percent over the six year period. The other small-
scale firm types (B, G, H, and I) either experienced a moderate in-
crease in the number of firms or declined. The population of large-
scale trawlers declined from 4.3 to three trawlers over the 1974-1980
period, which the lowest level permitted by the flexibility cons
straints. Consequently, large-scale production fell from 1,751 metric
tons in 1974 to 1,295 metric tons in 1980 or approximately five
percent annually. Conversely, small-scale production grew by
nearly 8.2 percent annually, rising from 46,205 metric tons in 1974

to 73,652 metric tons in 1980. In order to achieve this increase in

147

small-scale production, invested capital available for production pur-
poses was required to grow at nearly eight percent annually, or nearly
50 percent faster than is projected in the development plan.

In summary this run would indicate that self-sufficiency in
fish by 1980 is highly unlikely unless there is a considerable increase
in several essential resources. The rate of increase in resources
available to fisheries would require considerable transfer from other
productive employment. Should such resources become available
fisheries' contribution to Gross Domestic Product would increase to
26.H)nflllion leones, over 50 percent more than the contribution attained

by the base run 1974.

6.5 Summary

This chapter has developed an aggregate model closely replica-
ting the 1974 situation in the fisheries subsector and has then used
that model to evaluate the effects of alternative development strategies
on the level of employment, output, frozen fish imports, contribution
to Gross Domestic Product and the choice of small-scale technology. The
model was presented as a series of total cost equations for various
activity vectors and resource constraints covering six basic production-
processing—marketing channels.

The 1974 base run closely replicated the number of firms actual«
1y producing in 1974 as well as the level of frozen fish imports re-
quired to meet domestic demand. However the 1974 model shows that the
level of employment and the subsector's contribution to Gross Domestic
Product are considerably more than past estimates would indicate.

According to the 1974 base run, nearly five percent of the labor force

148

derive income from some aspect of the fisheries production-delivery
system as compared with two percent estimated by Propesca [1974].
The subsector's total contribution to Gross Domestic Product was placed
at about 17 million leones or nearly four times its estimated contri-
bution in the official national accounts in 1972.1

A series of eight runs of the 1980 model were reported which
were used to evaluate five alternative deve10pment strategies:
(a) varying the resources available while maintaining the 1974 policies
on cost of capital and imports, (b) encouraging small-scale fishing
industries, (c) encouraging large-scale fishing industries, (d) actively
discouraging large-scale fishing industries, and (e) closing the economy
to frozen fish imports to force self-sufficiency by 1980.

The first strategy of varying resource availability revealed
that an inadequate labor supply impeded small-scale production to a
greater extent than did an inadequate growth in capital. A policy of
changing the cost of capital from 40 percent to 20 percent by itself
produced negligible affects on the level of production by small-scale
firms. This indicates that even though there are different small-scale
technologies, there are few possibilities for capital-labor substitu-
tions over the changes in capital costs examined. The implications of
this finding for credit policy will be discussed in Chapter 7. In
order for domestic production to be able to maintain its 1974 relative
share of total fish supply with respect to frozen fish imports, the

level of trained manpower would need to grow at approximately 4.6

percent annually. The 1980 base run indicates that if present policies

 

1Much of the increase in Gross Domestic Product originates from
the wholesaling-retailing industries where nearly 70 percent of the
fisheries labor force is employed.

149

are continued and if the supply of trained manpower fisheries grew

at the accelerated rate of 4.6 percent annually, then firm types A
(standard canoe, ring net, paddle & sail), type C (standard canoe,
drift net, paddle & sail), type E (salla boat, beach seine, paddle),
Type F (salla boat, ring net, <15 HP engine), and type H (fante boat,
ring net, <26 HP engine) are chosen as the most economically profitable
technologies. When comparing the same technology type across regions,
it was found that Southern Region and Western Area yielded higher
marginal values per leone of fish produced than did Northern Region.
This is due to the locational advantages of the Western Area and
Southern Region near the high income consumption areas of Freetown

and Eastern Province respectively. Other possible locational advantages
such as greater access to richer fishing grounds could not be incorpo-
rated into the model as the survey sample did not yield sufficient
numbers of identical firm types in different regions to adequately
assess the regional specific production equations.

If the labor supply grows at less than the 4.6 percent rate
of the 1980 base run, domestic production fell and according to Run 1,
frozen imports increased by 50 percent over the 1974-80 period. If the
rate of invested capital were insufficient, domestic production fell
slightly and imports rose by 30 percent.

The strategy of deve10ping policies more favorable to small-
scale production yielded the highest level of "pure" economic profits
for the total fisheries subsector of any strategy tested and the
highest level of subsectoral contributions to Gross Domestic Product of

any strategy except for the last strategy of forced self—sufficiency.

150

The two strategies of encouraging and discouraging large—scale
production showed that large-scale and foreign frozen fish imports
are strongly competitive so that policies favorable or unfavorable to
large-scale production primarily affected the level of imports with
small-scale production remaining relatively constant as its resources
remain near full utilization.

Lastly, a strategy of forced self-sufficiency by 1980 revealed
that attainment of such a goal is highly improbable in the current
planning period as it requires a mobilization of resources considerably
greater than recent performance would indicate is possible. Trained
manpower would need to grow at 7.5 percent annually; small-scale in-
vested capital would need to grow at 7.9 percent annually (50 percent
greater than is projected in the development plan) and the population
of profitable small-scale boats would need to double over the six year
period.

In conclusion, a comparison of all the strategies reveals that
the policy of increased small-scale production would be most pro-
fitable from the point of view of the entire economy and would yield
the greatest contribution to Gross Domestic Product of any strategy
examined except for the apparently unrealistic strategy of self-

sufficiency.

CHAPTER 7
SUMMARY AND POLICY IMPLICATIONS

Several alternative protein sources have been unable to
provide an adequate quantity of high-quality protein to satisfy a
broadébased effective demand in Sierra Leone. Consequently Sierra
Leone remains dependent on imported frozen fish to meet domestic needs
while local stocks of pelagic species are under-exploited. Given the
government's goal of self-sufficiency in fish, this study examines
alternative strategies aimed at deve10ping the domestic fisheries
industry.

This research is the first micro-economic survey of small-
scale marine fisheries in Sierra Leone and one of the first fishery
surveys undertaken in West Africa which combines the micro-economic
Operations of small-scale producers, processors, wholesalers, and re—
tailers into an integrated fish delivery system. The Objectives of
the study were to: (1) describe the micro-economic operations of al-
ternative technologies currently practiced in fish production, proces-
sing and marketing enterprises, (2) identify major constraints on im-
proved performance of the fisheries production-delivery system,

(3) examine aggregate impacts of policies affecting marine fisheries
production including improved credit systems, increased manpower
training and extension programs and alternative import policies

affecting duties on capital equipment as well as frozen fish imports,

151

152

and on the basis of the above to (4) evaluate alternative strategies
for fisheries development in Sierra Leone.

The field research was conducted over a 12 month period in five
randomly selected small-scale production sites along the coast of
Sierra Leone. Interviews were also donducted with one large-scale pro-
duction firm. Processors and traders were surveyed covering the major
wholesaling—retailing channels between the selected producers and the
four largest urban consumption centers. The present chapter will
summarize the basic findings of the study and identify alternative

policies for Sierra Leone fisheries deve10pment.

7.1 Summary of Findings

 

The domestic marine fisheries subsector is divided into the
small-scale and the large-scale production industries with their asso-
ciated processing-marketing channels. The small-scale industry is
composed of over 5,000 fishing firms which employ approximately 16,000
people and produce over 90 percent of total domestic production. The
large-scale industry consists of nine trawlers operated by five firms

based in Freetown and produces about six percent of domestic production

7.1.1 Micro-Economic Analysis

The small-scale production industry employs nine distinct types
of technologies which vary considerably in their capital intensity.
Firm type E (salla boat, beach seine, paddle) had the highest capital-
labor ratio of .14 while at the other extreme, firm type D (kroo canoe,
cast net, paddle) had the lowest capital-labor ratio of .02. Firm type
A (standard canoe, ring net, paddle), type B (standard canoe, set net,

paddle), type C (standard canoe, drift net, paddle), type F (salla

153

boat, ring net, <15 HP engine), type C (salla boat, ring net, >15 HP
engine), type H (fante boat, ring net, <26 HP engine) and type I

(fante boat, ring net, >26 HP engine) were closely clustered around the
midpoint with an average capital-labor ratio of .05. In contrast, the
capital-labor ratio of the large-scale production industry was .44.

It was also found that generally, as labor intensity increased
across firm types, the seasonality of labor employment decreased and a
larger proportion of total labor was supplied by hired labor. Female
labor comprised a larger proportion of total labor used in fish produc-
tion and the more labor intensive firms because they prepare meals for
hired labor. The sexual roles of male and female labor in fish enter-
prises were clearly delineated with female labor concentrated in pro-
cessing activities and male labor in production. Nearly half of all
male labor was employed in net maintenance and repairs.

The acquisition of capital by small-scale firms appeared parti-
cularly constraining in several respects. The survey revealed that
initial capital for establishing new firms came primarily from earnings
saved from the entrepreneur's previous employment. Small-scale firms
borrowed capital primarily from.noninstitutional sources at a discount
rate of approximately 40 percent while institutional sources provide
capital to large-scale firms at a discount rate of 10 percent. In
considering the foreign exchange cost of equipment it was found that
over 75 percent of small-scale equipment was imported at a 36 percent
import duty while virtually 100 percent of large-scale equipment was
imported at a duty of only 10 percent. Imported net equipment
accounted for over 57 percent of investment costs. Net mending

accounted for over 20 percent of total variable material input costs.

154

Levels of investment in equipment stock varied considerably
between the nine technology types, ranging from a low of Le 57 for the
firm.with a Kroo canoe with cast net, hook and line and paddle to over
Le 4000 for the firm owning a fante boat powered by an engine of greater
than 26 horsepower and operating a ring net. Firm profits ranged from
Le 475 for firm type D (Kroo canoe, cast net, paddle) to Le 6185 for
firm type H (fante boat, ring net, <26 HP engine).

Small-scale production was more concentrated than the distri-
bution of firm types would indicate. Approximately 30 percent of total
small-scale output by weight was produced by firm type H (fante boat,
<26 HP engine, ring net) which represented 3 percent of the total
small-scale firm population. Bonga was the single most important
species caught accounting for over 67 percent of total weight harvested
by all firm types. Labor use and fish harvests were seasonally concen—
trated in the October-March period which yielded 61 percent larger har-
vests than the six month period of April-September.

In evaluating the traditional smoke processing technology
returns per hour to total labor used were approximately one third that
achieved in small-scale fish production enterprises. Yet it is com-
parable to the wage rate for rural women who supply most of the proces-
sing labor. Average total costs were approximately Le .67 per 100 lbs.
of raw fish processed. The modified Altona Oven as developed in Ghana,
but with construction and operational costs adopted to conditions in
rural Sierra Leone, used one fourth the labor and one fifth the fuel
required per 100 lbs. of fish processed using traditional technologies

and was significantly more profitable than the traditional banda.

155

The small-scale fish wholesaler has been traditionally accused
of obtaining "excessive" profits. However, the present study indicates
that while the returns to the wholesaler's labor were approximately
three to four times(the returns to the wholesaler's labor were
approximately three to four times the female wage rate in the rural
processing enterprises from which they purchased supplies,
they were considerably less than could be earned in alternative enter-
preneurial activity such as gara dying in the urban center from which
they originated. Returns to labor in smoked fish urban retailing were
comparable to the rural female wage rate in the sales region and below
the established urban unskilled wage.

An examination of the average annual fish price by species
arevealed considerable locational advantage for production in Western
Area largely due to direct access to nearby markets in Freetown. This
same locational factor is evident in comparing the marginal value of

additional production units in the aggregate analysis.

7.1.2 Aggregate Analysis

A linear programming model was constructed in order to inte-
grate the micro-economic operations of each of the production-pro-
cessing-marketing activities examined. The purpose of the model was to
examine the effects of alternative development strategies on output,
employment, capital and boat utilization and type of technology
chosen as well as the subsector's contributions to Gross Domestic
Product. I

The model of the 1974 situation revealed that, based on survey

data, employment in fish production is approximately 40 percent higher

156

than previously estimated. The major employment in fisheries occurs
in the wholesaling and retailing industries with roughly 39,000 people
employed. Approximately five percent of the national labor force
derive income from the fisheries subsector. The model also confirmed
that at current costs of production, large-scale trawlers receive
strong competition from frozen fish imports while there is relatively
little competition between frozen fish imports and small-scale produc-
tion.

Among the small-scale firms, types A (standard canoe, ring net,
paddle), type C (standard canoe, drift net, paddle), type E (salla
boat, beach seine, paddle), type F (salla boat, ring net, <15 HP
engine), and type H (fante foat, ring net, <26 HP engine) had the
highest marginal values per leone of fish produced.

Shifts between different technological firm types in small-
scale production occurred as relative resource availability was altered.
When capital was relatively more scarce than labor as in Run 2, produc-
tion shifted to more labor intensive technologies such as firm type
D (Kroo canoe, cast net, paddle). When small-scale firms were encour—
aged through decreased capital costs and accelerated growth in new boat
capacities, small-scale production shifts from either the extremely
labor intensive or extremely capital intensive technologies towards
firm type A (standard canoe, ring net, paddle), firm type C (standard
canoe, drift net, paddle & sail) and type E (salla boat, beach seine,
paddle) which have relatively high returns to both labor and capital.
When a strategy unfavorable to large-scale production is implemented,

the composition of small-scale firm types comprising the industry

157

remain relatively unchanged while the major increase occurs in frozen
fish imports.

A comparison of alternative aggregate model runs reveal that
two major paths are open for checking the dependency on frozen fish
imports over the 1974-1980 period. First, a strategy favoring the
small-scale industry through decreased capital costs and increased
boat construction lowered imports by four percent from the 1980 base
run and at the same time yielded the highest level of "pure" economic
profits for the total fisheries subsector of any strategy tested.
Economic profits for the subsector under this strategy were nearly
double that attained from a strategy of favoring large-scale produc-
tion. It also yielded a subsectoral contribution to Gross Domestic
Product of 23.8 million leones, larger than any other open economy
strategy. However previous runs indicated that a key factor in
expanding small-scale production was an increase in skilled manpower
at an annual rate of 4.6 percent or approximately double the rate
expected from population growth alone.

This strategy illustrated that given a reduced cost of capital
to its economic Opportunity cost (20 percent) a program of accelerated
boat and equipment construction (doubling the population of the most
profitable firm types) and an increased growth rate in labor supply
the small-scale subsector is capable of responding rapidly by increaSe
ing output, decreasing imports and increasing the subsector's total
contribution to the nation's Gross Domestic Product.

Alternatively large-scale production can be encouraged through

increasing import duties on frozen fish, its closest substitute

158

product, to 40 percent and increasing the capital available for large-
scale expansion by 10.8 percent annually. Large-scale production does
respond by decreasing imports by 12 percent but the subsector's total
contributfmnto the Gross Domestic Product falls four percent below the
level attained when small—scale firms were favored. Such an increase
in import duties would, at least in the immediate future, raise the
cost of fish to consumers.

Although the current national development plan aims for self-
sufficiency in fish production by the end of the current planning
period, the closed economy strategy of the present study would indicate
that this is highly unlikely unless (a) wage rates in rural fishing
areas rise sufficiently to attract labor from other industries at a
rate more than triple the natural population growth rate and (b) the
growth in small-scale capital is nearly double the rate of investment
in new productive capacity projected for the entire agricultural
sector in the current planning period and (c) the number of available
boat and associated equipment units increases by 100 percent above
its 1974 level.

Should these resources be mobilized to this extent, female
labor would still be constraining in both Southern and Northern
Regions. This could be partially relieved by more rapid introduction
of improved smoke processing ovens. Additional drying capacity has
a high marginal value in both Northern and Southern Regions if the
self-sufficiency strategy is implemented.

When comparing the marginal value per leone of fish produced
by additional boat and equipment units across different production

regions, Southern Region usually produced the highest marginal value

159

followed by Western Area and Northern Region. However, such cross
regional comparisons should be viewed with caution as they reflect
locational advantages due to transportation and labor costs but they
do not adequately consider locational advantages arising from the
region's relative proximity to more productive fishing grounds as
the survey sample did not yield a sufficient number of identical
firms of each type to compute both region and technology Specific
production costs and returns.

An important finding of the model was that in the different
runs, changes in pricing policy such as changes in the cost of capital
and import duties on frozen fish and fishing equipment, where implemen-
ted in isolation from other policies which altered resource availabil-
ity, have some effect on large-scale production but little effect on

small-scale production.

7.2 Policy Implications

 

This study indicated that all small-scale firm types yield
"pure" economic profits and are capable of producing fish with greater
profits per leone of fish produced than is possible with large—
scale technologies. The aggregate model confirmed the relative economic
advantages of small-scale production by revealing that strategies which
are favorable to small-scale industries result in greater "pure" econo—
mic profits to the subsector and greater subsectoral contributions to
Gross Domestic Product. Because of the considerable potential which
small-scale industries have for fisheries expansion, a majority of the
policy implications will be concerned with the expansion of small-

scale production.

160

7.2.1 Small—Scale Fisheries Policies

A package of interrelated policies will be developed in this
section which are consistent with the goal of stimulating expansion
of the small-scale sector and shifting production away from the higher
cost large-scale industries toward those small-scale technologies
which are most economically profitable. Such a shift could be facili-
tated by reducing the 36 percent import duties on small-scale equip—
ment to the 10 percent level now imposed on large-scale equipment.
This would reduce the barriers to new firms from entering the small-
scale industry which arise from high initial investment costs necessary
to establish firms of the more profitable technology types.

The aggregate model repeatedly indicated that an adequate
supply of labor, knowledge of boat, or engine maintenance and training
in general fishing skills was a crucial factor in the deve10pment of
marine fisheries. The current reliance on an indigenous four year
apprenticeship program is unlikely to produce the necessary increase
in trained fishermen. However a program to establish a regional
fisheries development center for each of the three regions is currently
being considered by the Fisheries Division of the Ministry of Agricul-
ture and Natural Resources. If implemented it could provide a focal
point where manpower training in equipment construction, maintenance,
and Operation would be readily available to the entrepreneur. A
trained cadre of extension staff in such centers could offer the
practical and technical advice necessary in encouraging the more pro-
fitable technological equipment types.

Other services could be developed at these regional centers

which stimulate small-scale production. The high cost of borrowed

161

capital facing small-scale firms and the slow process by which savings
from previous employment is accumulated as a source of initial invest-
ment capital tend to inhibit investment in new productive capacities
and improved technologies. An improved credit delivery system in
rural fishing communities would stimulate investment in small-scale
productive capacities. This could be accomplished in several ways.
Maximum lending rates permitted by lending institutions could be
increased to cover the added costs of providing and supervising loans
in more isolated coastal communities. To assure that credit was
actually used for fish production purposes and to facilitate input
delivery and the introduction of new technologies, a program offering
credit—in—kind to the fishing entrepreneur could be implemented through
the proposed regional centers. Using this method of credit adminis-
tration, the IDA Agricultural Development Project in Eastern Province
has been relatively successful in loan repayment among rice farmers.
This form of credit would have the added benefit of being able to con—
solidate the large variety of different brand name engines and equip-
ment available into a few more uniform types, facilitating the availa-
bility Of spare parts and supplies. Likewise greater influence could
be exercised over the type and rate of introduction of improved tech-
nologies. An expanded extension staff at the regional centers could
administer the selection, supervision, and repayment of credit to
prevent the reoccurrence of the ill-fated 1961 subsidized credit
scheme.

This study revealed that rapid expansion of small-scale pro-
duction in the 1974-1980 period requires that the population of new

boats be doubled over the period. The proposed regional development

162

centers could not only make available the necessary tools and supplies
required by indigenous boat builders but could itself test and demon-
strate improved boat construction of the most profitable boat types.
Among the small-scale boat types, the standard canoe, the salla boat
and the fante boat as found in firm types A, C, E, F, and H had the
highest marginal values per leone of fish produced indicating that
under current conditions these technologies could be more profitably
encouraged both from a financial and economic point of view in future
fiSheries development than could large-scale production or other
small-scale types. The high returns to these firm types when valued
from a private or social point of view indicates that they would be
profitable ventures for public investment by national development
credit institutions or international financial sources.

In the present survey several key production-marketing points
along the coast have been identified as possible sites for regional
centers. Rural Western Area, the area surrounding the mouth of the
Scarcies River of Northern Province and the Shenge-Bonthe region of
Southern Province appear to possess distinct locational advantages
for future fisheries deve10pment in terms of close access to rich

fishing grounds as well as consumer markets.

7.2.2 Large-Scale Fisheries Policies

The aggregate model indicated that frozen fish imports strong-
ly compete with large-scale production and that neither competes ef-
fectively with the low-cost production of small-scale industries.
Although emphasis has been given thus far to policies which stimulate

small-scale production, the current stock of large-scale equipment

163

already available could be more fully utilized in replacing frozen fish
imports. A policy of increasing the import duties on frozen fish

from 10 percent to 40 percent could stimulate increased fresh fish
production by large—scale firms but this decision would need to be
carefully weighed against the resultant short-run increase in retail
prices paid by consumers and possible decrease in the Gross Domestic
Product. Any policy which would encourage the expansion of new produc-
tive capacities by large-scale firms could not be justified by the

findings of the present survey.

7.2.3 Future Research Needs

I At the same time as small-scale production is expanding, an
active program of applied research and development needs to be centered
on improved smoke processing technologies. There is evidence in this
study to indicate that as production expands, the traditional smoke
processing technology will become an even greater constraint on the
processing-delivery system. The micro-economic analysis of this study
has shown that the modified Altona Oven has considerable potential
in alleviating the female labor constraint anticipated for processing
and increased output for the small—scale sector.

The economic feasibility of developing facilities for freezing
part of the domestic small-scale catch for supplying raw fish demands
inland should he examined in future economic research. The present
research indicates that wholesaling costs for smallescale output can
possibly be reduced if it is stored and transported in larger quanti-
ties as is currently done with frozen fish wholesaling. While the

present study primarily concentrated on evaluating alternative

164

production technologies in small-scale fisheries, alternatives to
technologies within the large-scale production and processing indus—
tries remain unexamined.

This survey being the first micro-economic study of small-
scale fisheries in Sierra Leone has laid the basic framework for
future micro-economic research in the fisheries subsector and provides
a bench mark analysis of the subsector which can later be used to de—
termine the rate and direction of change in the subsector. This
study has firmly established the vital role of small-scale fisheries
in Sierra Leone both as a current source of employment, income and
dietary protein for much of the Sierra Leone population and as an
economically profitable industry for potential expansion in the

future.

APPENDICES

APPENDIX 1

MAJOR COMMERCIAL FISH SPECIES OF SIERRA LEONE

 

 

 

Creole Name Genus & Species Average
Weight
Lbs. Per
Fish
Awefu Ethmalosa fimbriata (juvenile) .12
Bonga~ Ethmalosa fimbriata (adult) .42
Catfish (marine) Arius Spp. 1.57
Coureh (Horse Mackerel) Caranx carangus 6.61
Couta (Barracuda) Sphyraena dubia 5.10
Crocus Pomadasys jubelini 1.81
Grouper (rose or red) Lutjanus agenes 2.32
Gwangwa Pseudotolithus elongatus 1.01
Herring (round) Sardinella aurita
(or Cameronensis) .15

Hognose Plectorhinchus macrolepis 1.84
Joe-fish Trachinotus goreensis 1.49
Ladyfish Pseudotolithus senegalensis 2.11
Mackerel Scomber japanicus 1.20
Flat Mollit (mullet) Mugil falcipinnis .84
Record (red cod) Epinephelus aeneus 1.25
Shark (Selachians) Scolodion Spp. 3.72
Sheephead Drephane africana 2.08
Shinenose Galeoides decadactylus .81
Skeet (sting ray) Dasyatis Spp. 1.43
Black Snapper Dentex angolensis 1.49
Spanish Polydactylus quadrifilis 2.02
Whiting Pseudotolithus brachygnathus 1.99

 

165

 

166

APPENDIX 2

ADMINISTRATION OF THE SURVEY

Selection and Training of Enumerators

 

Enumerators were recruited by advertising on the national radio
and by word of mouth. An initial interview was conducted with each
applicant reviewing his past employment record, areas of study and
school certificates. An attempt was made to evaluate the applicant's
language capability, maturity and basic mathematical skills. Based on
these interviews, a select group of applicants were invited for a 10-
day period of intensive training. During this period the purpose and
design of the questionnaires was explained; practice interviews were
conducted and homework exercises and examinations given. This period
of close interaction between potential enumerator and the author per-
mitted exceptional talents and attitudes to be detected. At the end
of the training period a final selection was made based on performance
in oral and written examination and homework exercises, alertness
during training, general personality and attitude toward work. Those
enumerators which were finally hired were then issued equipment such
as raincoats, clipboards, lantern, and water containers where needed.
Other equipment such as bicycles were purchased by the enumerator if
desired through a salary advance and an additional monthly bicycle

maintenance was paid.

167

Field Establishment and Sgpervision

 

Letters of introduction were sent to the Paramount Chief1 of
each selected landing site explaining the purpose of the survey,
soliciting their support and establishing an expected arrival date in
his area. Immediately after enumerator selection was completed, a
series of meetings were held in each area with the respective Paramount
Chief, Section Chief and lastly with the general fishing population at
the landing site. During these meetings, the purpose of the survey and
the selection process were explained, and the enumerator introduced.
The presence and support of local and regional authorities at these
meetings aided in securing local cooperation at the site.

Several important issues and questions were commonly raised
during these meetings. First, the idea that their community was
randomly chosen to represent all the fishing communities in their region
universally received a positive response. However an issue usually
raised immediately was: "How do we know that your research will help
us? We have had many people from Fisheries Division and others come to
ask questions but have seen no helpful results." Other concerns were:
"Will the information be used for taxes or to license our boats? Will
the data on individual households be revealed to the government?"

After the initial interviews were conducted and the sample of
respondents selected, the author would go with the enumerator to each

individual household to again explain the purpose, answer questions,

 

1Sierra Leone's three provinces are divided into 13 districts
which are subdivided into 146 chiefdoms. The Paramount Chief holds a
life-time position as the top executive officer of the Chiefdom.

168

solicit cooperation as well as give the enumerator criticism and
guidance in improving his interviewing technique.

The actual timing of the interview with the respondent varied
from site to site depending on the type of equipment Operated, the tide
schedule and the relative importance of nonfishing enterprises.

Usually interviews were held immediately after fishermen had returned
from the sea and had disposed of the catch.

Once initially established in the field, each enumerator was
visited on an unannounced basis at least once or twice a month. During
each visit, the forms were individually checked for completion,
accuracy and inconsistencies between different sections of the ques-
tionnaire. If inconsistencies occurred, or peculiar uniform trends
began to surface, the form was returned by the author and cross
checked with the fishermen.

Frequent visits and overnight stays by the author at the
enumeration site helped establish good rapport with the enumerator,
made the field staff more alert and generally contributed to better
village re3ponse as the author's presence conveyed an air of importance

to the project.

169

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BIBLIOGRAPHY

 

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