REELING IN VALUE

Oman 2019 | AGRICULTURE | FOCUS: FISHERIES’ VALUE CHAIN

Development of the fishing industry's value chain will recapture economic benefits currently exported with raw catch.

Centuries before oil was first discovered in Oman, the vast coastline and shipping fleets controlled by the country's tribes dominated the economy. These waters held and still hold the region's largest fish stocks. Yet today, the hydrocarbon industry accounts for around 40% of the Sultanate's GDP, while the fishing industry's contribution is less than 2%.

Lack of investment in the Omani fishing industry's value chain and other structural-level issues have limited growth. According to a World Bank estimate, the fishing sector could contribute an additional OMR2.4 billion to GDP from improved management of current catches alone.

The first problem lies in the small capacity of boats within the nation's fleet. Currently, 99% of powered vessels in Oman are less than 12m in length, and as a result, this 99% of the fishing industry in Oman is considered artisanal. This is in part due to government policies promoting employment: fewer, larger vessels would drive down the number of on-boat workers. But the current fleet's limited capacity is restricting overall catch, which is in turn restricting job growth in areas of the industry off the boats.

Finding a middle ground, in mid-2018 the government introduced an initiative to grow the number of medium-scale vessels in the fleet as prescribed by the Tanfeedh fisheries labs. The Ministry of Agriculture and Fisheries (MAF) partnered with Tanfeedh, the national program for economic diversification, to pinpoint challenges and propose solutions in Oman's fishing industry. It was a six-week collaboration that produced more than 70 initiatives. In total, these initiatives are set to cost OMR1 billion but add OMR543 million to GDP and 8,000 Omani jobs by 2023.

According to the plan, 480 coastal fishing vessels—ships with an average capacity of 300 tons capable of staying at sea for weeks and docking at any of Oman's 23 fishing harbors—will be added to the fleet, representing a 336% increase in the number of medium-sized vessels. An effort to bypass the need for such a fleet is also underway. MAF has formulated a 30-year master plan for aquaculture development as part of the effort to retain economic benefits in Oman. The plan places emphasis on fish farms. In practice, this has prompted plans for a group of open ocean fish farms off of Oman's North Al Batinah coast. Production from these farms is expected to commence in 2019 or 2020, with output reaching 8,000-10,000 tons per year by 2023.

The more vexing problem lies ashore. Oman's fishing value chain—processing, packaging, logistics, wholesale, and retail markets—is underdeveloped, which is exporting much additional economic growth along with the raw catch. GCC nations account for 60% of Oman's fish exports; the UAE alone imports 44% of that share. And in many cases, these countries process and package the fish themselves for consumption or re-export to other markets.

Setting the course for the Oman's fishing value chain is development in the Duqm Special Economic Zone (SEZAD). Upon completion, Duqm's fishery port will measure 600ha, making it the largest in Oman. The broader area will include 60 fish manufacturing facilities, cooling and freezing stores, and ship maintenance and repair workshops. In addition to adding value, development of onshore infrastructure will recapture losses due to spoilage. It is estimated that around 24% of annual catch, or OMR25 million, is lost due to spoilage—a problem that can be solved largely by developing Oman's cold chain infrastructure. To address spoilage, MAF is developing cold storage facilities at nine fish markets, enabling the investment in 41 refrigerated trucks, and assisting with a plan to construct a 15,000-ton-capacity cold storage complex along the Al Batinah coast. Pieced together, these efforts and the several other initiatives will create value along the supply chain, rebalance Oman's economy, and reposition fishing as a key industry in the Sultanate.