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Community Panchayats in Fish Marketing

In the marketing of fish, all kinds of market maladies confront the participants, especially the fisherfolk in disposing of their perishable catch at the best possible price. As a result of perceived market exploitation, there has been a community initiative among the fisherfolk near Chennai to voluntarily establish an organisation to control and regulate fish marketing and thereby protect their interests.

Community Panchayatsin Fish Marketing

In the marketing of fish, all kinds of market maladies confrontthe participants, especially the fisherfolk in disposing of theirperishable catch at the best possible price. As a result of perceivedmarket exploitation, there has been a community initiativeamong the fisherfolk near Chennai to voluntarily establish anorganisation to control and regulate fish marketing and

thereby protect their interests.

KARUNAHARAN K, THANGAMUTHU C

M
arket performance, according to the new instituionalists, is a function of social institutions and their interaction with the market treated as a social sub-system. Market as an institution cannot function effectively and fruitfully in the absence of other enabling social institutions and values. In many underdeveloped countries, the market is intricately meshed up with institutional milieu. Market as such is more a western concept. Hence the relevance of creating an appropriate institutional structure (socio-politico and economic) that would enable the market function, as it should function, cannot be overemphasised. The New Institutionalist Economics (NIE), which studies these issues, is an important milestone in modern economic thinking.

In the NIE theoretical framework, in order to ameliorate market failures, society responds positively by organising new institutions, self-imposed code of conduct, rules and practices to the members of the community engaged in marketing. But the sustained performance and success of such social organisations depend on the mutual benefit, faith and confidence among the members, transparency in working and the credibility and efficiency of the leadership in such organisations. In the absence of these variables, the organisations that are engineered by the society are bound to fail.

This article, in this regard, seeks to examine the emergence of a social organisation and its role and performance in striving to remove the deficiencies in a market typically known for these, namely, fish marketing. In the marketing of fish, all sorts of market maladies do confront the market participants, especially the fisherfolk in disposing their perishable catch at the best possible price. The fisherfolk become vulnerable to the influence of traders and middlemen in the market. As a result of market exploitation as perceived by the fisherfolk, there has been a community initiative among them to voluntarily establish an organisation to control and regulate the marketing of fish and thereby protect their interests. One such organisational effort is evaluated here.

There are 261 traditional marine fishing villages located along the Coromandel coast. In these villages different fish marketing systems are in vogue and most of them have been institutionalised through unwritten practices and conventions. Pattinavar is the dominant fishing community in this region. Most of the fishing villages have strong fishermen community panchayats (FCP) which are based on the kinship structure of the Pattinavar community. The Coromandel coast lies in the northern part of Tamil Nadu including the villages starting from Thiruvallore district up to Nagapattinam district. It covers nearly half of the coastal distance of the state (350 km).

Community Arrangements

The entire Coromandel coast can be classified into four different regions:

(i) Pulicat Lake region; where the FCPs lease the annual marketing right through open bidding; (ii) Chennai region; villages in this region have close links with urban fish market. Hence most of the village fisherfolk have direct contact with urban traders. So the role of FCP in fish marketing at the landing site is negligible;

(iii) South of Chennai region; where a majority of the villages have fish markets at the landing sites controlled by their FCPs. In case of villages with internal social or political problems, these will be reflected in the FCP’s functioning. The functioning of FCP thus fluctuates; and (iv) Cuddalore and Nagapattinam region; where the role of FCP in landing-site fish marketing is virtually absent. The fisherfolk have direct contact with traders to sell the export variety species, on advance payment. They receive advances from traders on the assurance of a regular supply of export variety fish. This advance amount would be adjusted against the fish supplies to the traders. The role of FCP is confined to resolving any dispute arising out of this advance amount and the trading contract.

We have purposively selected a village, south of the Chennai region, known as Egatoor Karikkattukuppam, near Mahabalipuram on the Coromandel coast. It is located about 40 kms south of Chennai, closer to east coast road. This village has a fairly good record of FCP functioning over the period. It has also experienced success and failure in various measures.

The FCP in Egatoor Karikkattukuppam has a long tradition and a well-defined structure. The organisational structure includes a ‘chettiar’ and ‘sinna (small) chettiar’, who would be the leaders of the FCP. In addition, at least five to seven ‘panchayatars’ are selected from each kinship group. One ‘kariyatarisi’ (accountant) is selected from amongst the panchayatars. They help the chettiar in the FCP activities (apart from this, the president of the government-sponsored panchayat is treated with respect in their village meetings and he may give his suggestion on important issues). Those among the kinship groups, who had migrated to this village from outside, are not considered for nomination as panchayatar. Panchayatars are selected once a year through nomination, representing different kinship groups, but the chettiars are hereditary and permanent. If the village leaders do not have unity, the selection of panchayatars are difficult and delayed.

Initially (until 1950) the FCP served as a cultural entity, mostly engaged in organising village festivals, settling family/ community disputes. It had seldom been involved in any significant regulatory role that had a bearing on fishing activities. During the 1950s the FCP slowly took on some elementary economic roles such as maintaining a register of fishermen in the village and trying to regulate the fishing activity particularly in terms of fishing net size and the periodicity of its usage. During the lean season, the FCP used to provide some succour to the fishermen in distress, out of donations collected from the neighbouring industries and businessmen.

Economic and Political Weekly November 25, 2006

These “donations” are, strictly speaking, a misnomer. For instance, in one case the FCP extracted money as “compensation” for allowing the drainpipe of a neighbouring prawn hatchery to pass through the seashore. Such forced collections are made for the community welfare. Whenever there was a need for funds for celebrating temple festivals, the FCP could devise its own method of collecting funds from members. Sometimes, they arrange to borrow from the neighbouring FCP or a big fish-trader. Such loans would be repaid along with interest, from out of the contributions made by FCP members later on. Thus the FCP emerged largely as an institution of social security and also a stabiliser of social relations.

The role of FCP underwent a perceptible change in the last three or four decades. It is during this period that the adoption of Norwegian technology into fishing operations via the mechanisation of boats and other technical improvements in fishing gear and craft made the fishing a more lucrative activity. Further, thanks to the impact of globalisation and opening up of new markets for special varieties of fish, the export potential widened the potential of market earnings of fishermen. Against this backdrop, the FCP took to organising and regulating marketing of fish catch, through the introduction of some new practices. As part of securing a guaranteed minimum price and also reducing the impact of risk and uncertainty associated with fishing, the FCP arranged for a “community lease” and thereby avoiding internal competition among the fishermen in selling the fish to the traders.

This is ensured by fixing a lease for every year, wherein the FCP would be paid a lump sum of lease amount, in return for which the lessee is permitted to collect as his commission charges 10 per cent of daily fish catch value at the seashore marketsite. The auctioning of daily fish sales is arranged by the lessee in which, of course, the lessee can compete along with other fish traders.

The community arrangement is generally subject to inherent pressure and counter pressure from the members. The problem of free-riders cannot also be ruled out.

FCP Performance

We attempt here to understand the factors that account for failure or success in FCP marketing from an institutional dimension rather than technological domain. The concept of success or failure is viewed from the performance level of FCP in controlling and regulating fish market. But the fishermen may have their own perceptions about the very performance and relevance of FCP. The fisherfolk may consider even a performing FCP as a hindrance to their individual initiative (especially of the more enterprising) and effort to make better bargain in the market. Such negative perceptions about FCP’s role are evident in the present empirical study also.

The performance of FCP largely depends upon mostly the institutional conditions that exist in this village. The conflicts between kinship groups, differences among the individual fishermen, political group disputes among the fisherfolk, corruption alleged by villagers against panchayat members, and conflict between the mechanised and nonmechanised fishermen have all an impact on the performance of FCP. If these issues crop up and if the local panchayat fails to solve them, then the panchayat collapses as does its role in marketing. The underlying socio-economic conditions of the FCP’s successes or failures are quite interesting and worth investigating.

In the successful phase, rules and regulations of FCP are implicitly adhered to by the fisherfolk. The initial floor-bid amount for the annual lease is fixed by the FCP, considering the previous year’s lease amount and also the expected catch. Then the traders may bid for the lease. The highest bidder is fixed as the lessee for one-year period by the FCP. The lessee has to pay one-third of the lease amount to the FCP on the bidding day itself and the rest can be paid within a year, in two instalments, as mutually agreed upon between the FCP and the lessee. The lessee would get, in return, 10 per cent of the daily fish catch value as his share.

In actual working every day, the fish catches are placed at the seashore auction shed in front of the lessee or his assistant (male assistant known as ‘yelakkarar’ or female assistant known as ‘yelakkaramma’) generally, the fishermen segregate the fish catch into two types. The abundantly available popular types of fish are grouped and disposed under ‘periyakuthu’ and the smaller quantity of exportable fish types such as prawn is disposed under ‘sinnakuthu’. All fishes should be sold with the knowledge of the lessee through auction; otherwise, the panchayat imposes a fine on fishermen who refuse to sell. The yelakkarar/yelakkaramma fixes the floor price for each fisherman’s fish catch at the shore. The traders from different places and also the lessee can purchase the fish by participating in this daily auction. But since the lessee prefers to allow other traders to purchase the fish in the open auction, he is content with collecting 10 per cent share from fishermen.

The lessee helps the FCP in collecting one or two varieties of fishes from each fishermen depending upon the size of their catch. The fish thus collected are called “uoor meen” (village fish) and these fishes

Economic and Political Weekly November 25, 2006 are sold and the amount is deposited to the FCP fund. This fund is used for offering alms to beggars or poor persons who come to the village from outside.

The FCP spends the lease amount towards the temple festival and also helps the fisherfolk during off-season. Hence fishermen feel justified in parting with 10 per cent share of their fish catch to the lessee who had paid the lump sum amount to the FCP. From each trader, Rs 2 is collected per basket by the village panchayat. If one load of timber for kattumaram making is unloaded at the village, then the wood trader has to give Rs 400 to the village panchayat. If a kattumaram is sold by fishermen, 1 per cent of the sale value is collected from buyer of the ‘kattumaram’. All these would go to the FCP coffers.

Salaried persons and school children, if they had enrolled their names as village members, have to pay Rs 100 per month to the village panchayat. This is because they get a share of benefits from village fund, without the contribution in the form of fishing activity.

During the panchayat meeting no one goes for fishing. And each fisherman is given Rs 50 as compensation for not fishing. Generally there is a social stigma against those who are irregular. Since everyone gets the benefit of FCP fund, the shirkers are abused and they are admonished to go for fishing regularly. This is the success phase where in the writ of the FCP rules and the community members also cooperate since they all believe that the FCP is to their social advantage.

Weak FCPs

In the case of a weak and failing FCP, the annual lease system and the corresponding restrictions are virtually absent. Mostly women (yelakkaramma, i e, women auction agents) are involved in auction activities. They are not paid cash wage, but some commission in kind (fish). The fishermen bring their fish and stand in the queue until their turn comes. After their turn comes, they put their fish on the mat or sand in front of the yelakkaramma. She then begins to announce the initial floor price for the fish. The retail traders from outside and also within the village participate in the bidding. The fish is sold to the highest bidder. Yelakkaramma takes one or two fish from the fishermen for her service. Then the next fisherman in the line comes to sell his fish; the auction goes on till the last fish is cleared. The details of the fishermen and traders and the value of transaction are recorded in a note book for future verification. If the fisherman is not happy with the price at auction, he may decline to sell his fish at auction. And he can take it and sell it to the nearest market.

Since the lease system and the FCP restrictions are not there, the fishermen have the “freedom” (sometimes become vulnerable when the traders tend to exploit) to sell their catch directly to the traders. The fishermen generally segregate the export-valued prawns and others from their total catch and sell them to the traders directly. The traders take advantage of this and induce the fishermen to sell it to them by offering a loan amount or an incentive amount. This tie-up arrangement emerges, in the absence of FCP’s control.

Generally, it is perceived that because of the tie-up arrangement, the fishermen are forced to part with their fish catch for the price quoted by the trader (who had paid him some incentive advance amount), which at times may be lower than market price.

Executive Director Vasundhara, Bhubaneswar, Orissa

Vasundhara is a NGO working on environmental conservation and sustainable livelihood issues in Orissa. Vasundhara undertakes research, advocacy, networking and action in the thematic areas of Community Forestry; Sustainable Livelihoods & Economic Democratization; Land Rights, Access and Tenure; and Conservation and Livelihoods (see: www.vasundharaorissa.org). Organization work culture values and supports democracy, individual and organizational learning, risk-taking and creativity.

Position Description

The Executive Director provides programmatic and administrative leadership to the organization to help realize organizational goals. The person should have an in-depth understanding of natural resources management and livelihood issues, with expertise in one or more areas of Vasundhara’s thematic intervention and a commitment to interdisciplinary research and value-based practice. Desired qualifications include a postgraduate degree in relevant discipline, and about 10 years of relevant work experience including experience in a leadership position, preferably with experience in fund-raising and human resources management.

Application Process

Please send your detailed CV and a one page covering letter explaining reasons for application, selfassessment of suitability for this position, and salary expectations by December 15, 2006 to the email address: directorad.vasundhara@gmail.com.

Economic and Political Weekly November 25, 2006

Apparently, during the declining phase of FCP, the fisherfolk might appear to enjoy freedom to sell their catch (including freedom to get into tie-up arrangement with the traders). But this freedom has turned out to be not to their long-time advantage, nor to the community welfare at large. Under FCP arrangement, the distress period is taken care of by the FCP, besides ensuring some order/stability to the fishing and marketing system.

The reasons for failure, inter alia, include the poor leadership profile of FCP which lacks education and training in good management practices. Generally, the leader of FCP (chettiar) happens to be illiterate and hence unable to maintain accounts properly. Most of the accounts are presented orally at the general body meetings, which gives room for suspicion or apprehension among members. Members raise objections and shout in high pitch of their voice leading to commotion. Many meetings end abruptly without passing any formal resolution. Out of frustration, members tend to quit the FCP system. The “exit and voice” hypothesis of Hirschman could explain the exit of fisherfolk from the FCP when their voices are not heeded to.

The success of FCP in fish marketing largely depends upon the right type of leadership in the FCP, good kinship relationship, harmony and cooperation among the fisherfolk, a sense of commitment to pool their efforts for social security during lean season, among others. In any such collective organisation, prevalence of freeriders may act as a disincentive to those who work hard and put in more effort. Notwithstanding the avowed community benefits accruing from the FCP, success does not seem to be sustained because of the lack of right type of leadership and transparency in management and absence of a sense of mutual benefit to the members, alleged corrupt practices, information asymmetry between FCP leaders and the member fishermen and hence lack of mutual trust.

Besides institutional factors, technology also plays a vital role. The role and performance of the FCP have, in fact, widened and strengthened after the advent of new technology. The expectations of a higher revenue for FCP (for common good) were raised after envisaging the positive impact of technology. It is not as though the new technology and the consequential commercialisation have weakened the structure and performance of FCP, a kinship electoral politics (arising from state-level institution. On the other hand, the fact panchayat/assembly elections) did account remains that given the impact of technical for the fluctuation in the cohesion and changes, the institutional dimension plays a performance of the FCP. more decisive role. Many times institutional disturbances, including the upheavals on Email: karunaharan66@rediffmail.com account of community divisions caused by c_thangamuthu@yahoo.com

EPW

Economic and Political Weekly November 25, 2006

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