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Study examines fisheries development options

By Fili Sagapolutele

APIA, W. Samoa (Samoa News, Mar 20, 2009) - A study commissioned by the Western Pacific Regional Fishery Management Council (WPRFMC) outlined three possible scenarios for fisheries development for American Samoa and the report will be the subject of discussion during next week’s 144th meeting of the Council to be held at the Governor Rex Lee Auditorium.

Representative Va’amua Henry Sesepasara first raised the study during the confirmation hearing two weeks ago for Commerce Department director Faleseu Eliu Paopao when there was a discussion about future economic development for American Samoa.

Va’amua said WPRMC conducted a study on alternative fishery businesses that can be established in the territory as part of future economic development. Va’amua said he was involved in the study and suggested that DOC obtain a copy of the study from WPRFMC for a thorough review on how the recommended alternatives can be implemented.

Va’amua noted that there might be some grant funding to assist with local implementation of any recommendations in the study.

According to the WPRFMC agenda, there will be a discussion on Mar. 25 dealing with fisheries development in American Samoa and among the panel participants are the Governor’s Economic Advisory Council, Small-scale fisheries, the canneries and the local longliner industry.

Asked about the fishery development report, WPRFMC spokesperson Sylvia Spalding told Samoa News she believes Va’amua is referring to "Review of the Fishery and Seafood Marketing Development Potentials for American Samoa" study conducted by TEC Inc., for the Council (December 2007).

"The economic study...looked at various alternative scenarios for fishery development in American Samoa, which included increasing fresh fish exports from the longline fishery, increasing value added exports such as frozen swordfish, and a scenario where the canneries downsized to produce albacore only products," she said via e-mail from Honolulu.

Regarding Va’amua’s suggestion of possible grant funding, Spalding said the Council will discuss this issue at the Fisheries Forum at 6:30 p.m. on Mar. 25 at the Lee Auditorium, which is open to the public.

The 114-page report outlines three possible future fisheries ventures in the territory and the report says the three "scenarios are not true business plans because no specific investors or entrepreneurs were identified to implement them."

However, the scenarios incorporate ideas, market destinations, product forms or business structures mentioned by informants during American Samoa site visit interviews. Several companies have implemented elements of two scenarios -- fresh fish export to Hawaii and value-added processing of miscellaneous pelagic fish, the report notes.

[PIR Editor’s Note: The Samoa News presented the three different Scenarios on separate days from Friday, March 21 through Monday, March 23. PIR has consolidated the scenarios below for simplicity.]

Scenario 1

The first scenario explores the potential for fresh fish exported to Hawaii, if a buyer/middleman could motivate some American Samoa domestic longline vessels to land fresh bigeye tuna from their last three sets during lengthy fishing trips, targeting albacore tuna for shipboard freezing.

Also investigated was the potential for exporting fresh onaga for export when the main Hawaiian Islands’ deep bottomfish fishery is closed by government regulation (May 1-September 30 during 2007).

This fresh tuna export scenario could only be implemented if American Samoa’s domestic longline fleet remains actively fishing in the future, with canneries remaining open to purchase albacore tuna, the principal target of long lining.

The report notes several prerequisites necessary for this scenario to succeed, which includes exporter having sufficient working capital to pay cash for fish delivered dockside; exporter being well trained in grading fresh tuna for Hawaii market standards; and exporter has packaging and insulating materials adequate to keep fresh fish well chilled until it reaches the Honolulu buyer.

Additionally, exporter has made prior arrangements with Honolulu fish importer and Pacific Air Cargo (PAC) ground handling staff in American Samoa for fish quantities to be shipped and timing of delivery of fish cartons to Pago Pago International Airport.Moreover exporter would need large insulating blankets sufficient to wrap pallets of fish cartons after delivery to Pago Pago International Airport until loading onto the PAC freighter; and HACCP documents and FDA biosecurity registration of exporter are in order and prior notice of shipment is given to FDA.

Scenario 2

Scenario Two explores the potential for processing of value-added products from miscellaneous fish (species harvested incidentally by longliners that the canneries are unwilling to buy). At least one local wholesaler is already purchasing frozen at sea swordfish, marlin, wahoo, yellowfin and bigeye tuna directly from domestic longline vessels, but he does minimal processing before reselling these products to restaurants and retailers.

The local school lunch program represents a potentially large market for frozen fish fillets and portions that could be locally processed from miscellaneous pelagic fish species, the report notes.

However, it says that it’s possible with currently available information to estimate the additional local demand that exists for value-added Samoan food gifts taken on trips overseas or for local food exchanges at special events and family fa‘alavelave.

It notes that demand continues to grow in New Zealand and Australia for longline fishery products produced in these areas, and small markets are developing for imported pelagic fish of the same species.

"...there may already be some potential for frozen loins and fillets processed at an American Samoa facility from frozen miscellaneous pelagic species to be exported to New Zealand," it says.

Good manufacturing practices, seafood Hazard Analysis and Critical Control Point (HACCP) controls and product traceability will be needed to penetrate this market, it says.

"For both the local school lunch program and overseas marketing, frozen fish portions should be processed for constant portion thickness but variable portion weight," the report says. "This might pose a problem if purchasing specifications are for portions of uniform weight."

This scenario "could only be implemented if American Samoa’s domestic longline fleet remains actively fishing in the future, with canneries remaining open to purchase albacore tuna, the principal target of longlining."

For this scenario to succeed, the report offers several prerequisites such as: processor having sufficient working capital to pay cash for fish delivered dockside; suggested fish prices for species and quality gradations sufficient to satisfy longline vessel owners; and processor having sufficient quantities of packaging and insulating materials to prevent disruption in processing and shipping.

Additionally, processor should have large flat bed trucks and large insulated tubs suitable for ground transportation of frozen fish or boxed frozen fish portions (if there are deliveries to local schools.)

Moreover processor (should) make prior arrangements with New Zealand (or Australia) frozen fish importer and with American Samoa-based ocean shipping agent for a specific sailing and delivery time; and product quality is satisfactory to customers.

"A critical prerequisite is that local processors have an agreement with StarKist Samoa to deliver fish processing waste and wastewater because the American Samoa Government will not allow this material to be discharged into the government wastewater system that is not equipped to treat the additional nutrients for fish waste," it says.

For this reason, proximity to the canneries of a value-added processing facility would be a great advantage that would confer substantial savings in the cost of ground transportation of process waste.

Scenario 3

The third scenario explores a possible future for American Samoa’s domestic longline fishery if local canneries were to downsize to albacore-only processing centers.

"This should be considered a ‘doomsday’ scenario because complete closure of both canneries seems improbable if canneries can compensate for higher labor costs, smaller income tax credits, and less tariff protection on foreign-made tuna by eliminating light meat canning and the fish cleaners associated with that product and shifting to higher-priced white meat products, especially in pouches," the report says.

It was highlighted in the report that the cannery work forces are comprised largely of fish cleaners and a substantial reduction of this job type would sharply reduce wages that are spent in the local economy and cause a local economic downturn.

According to the report, former cannery workers, as well as other American Samoa residents who may lose jobs because of a decline in locally spent cannery wages, are likely to turn to subsistence fishing to provide food for their families.

A substantial increase in subsistence fishing of inshore marine resources should be expected under this scenario and the Department of Marine and Wildlife Resources needs to develop a contingency plan to manage additional subsistence fishing in the event of cannery downsizing and associated decline in the local cash economy.

With the economic future of both the local longline fishery and the canneries at stake in Scenario 3, "there would be greater incentive for establishing an American Samoa longline fishery cooperative than at present."

This scenario assumes such a cooperative would operate as a non-profit with two principal purposes: obtain cost savings for members in fuel, bait, fishing supplies and provisions; and develop and promote a custom-labeled and branded (e.g., "Rainmaker Brand") canned or pouched albacore product.

In a downsized economic environment, the canneries and the domestic longline fleet, or at least the portion owned by residents of American Samoa, would likely be more mutually supportive and have a closer working relationship than in the present economy.

"Therefore, Scenario 3 assumes that the cooperation of a local cannery can be obtained to manufacture and label the cooperative’s custom brand, although this brand could be competitive with the cannery’s own albacore products," the report notes. "Canneries already engage in tuna canning and labeling on behalf of institutional buyers, so this would not be a new practice."

Several prerequisites necessary for the success of this scenario include: American Samoa’s domestic longline fleet would maintain good (although cyclical) catches from a healthy South Pacific albacore stock; an American Samoa longline fishery cooperative is formed as a non-profit; co-op members agree to a cost and profit-sharing arrangement; arrangements are made with local canneries for custom production and private labeling of co-op brand canned or pouched albacore.

Additionally, a large working capital fund should be available to pay premium fish prices to co-op members who deliver albacore for packing under the co-op brand. The co-op would recover payouts to members through accounts receivable from marketing of branded albacore cans or pouches.

The report also provides costs analysis and marketing strategy for each scenario.

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