South Africa

Op-Ed: The Promise and Peril of small-scale fishing co-operatives in South Africa

By Oliver Schultz 4 November 2016

It is important to bear in mind factors that increase the likelihood of a fishing co-operative achieving its goals when considering the implementation of the Small-Scale Fisheries Sector in South Africa Policy, and the prospects for the small-scale fishing co-operatives at the heart of this process. By OLIVER SCHULTZ.

This has been an important year for small-scale fishers in South Africa, with the Department of Agriculture, Forestry and Fisheries (DAFF) having initiated the implementation of the highly anticipated Policy for the Small-Scale Fisheries Sector in South Africa (SSF Policy) (DAFF 2012). At the heart of the SSF Policy implementation process is the co-operative model. Co-operatives are set to serve as the principal economic structure through which small-scale fishing communities will (as workers-owners) conduct their harvest and post-harvest activities, while also serving as an important political structure through which communities will participate in fisheries management processes.

Given that much of the policy’s fate is tied to the co-operative model, it is worth considering the current realities on the ground, and what these realities might mean for the viability of co-operatives as vehicles for the empowerment of small-scale fishers in South Africa.

A brief word on co-operatives

The subject of co-operatives is vast, complex, and varies considerably depending on the context. However, co-operatives are often viewed from simplified ideological positions of antipathy or reverence. Ideology aside, there is a wealth of research demonstrating that the co-operative model deserves, at the very least, to be taken seriously. For instance: a recent survey of 65 countries by the World Co-operative Monitor (2014) found that co-operatives in these countries provided partial or full employment to more than 250-million people, and that the largest 300 co-operatives had a global turnover of $2.2-trillion in 2012.

In the field of fisheries, co-operatives have long been part of the lives and livelihoods of coastal fishing communities. A diversity of experiences from developed and developing countries such as India, the US, Japan, Norway, Turkey, the Philippines, Chile, Mexico and Belize confirm that it is possible for fishers and fish workers to use co-operatives as a way to generate secure employment, negotiate favourable marketing agreements, increase harvesting efficiencies, reduce operational costs, as well as influence fisheries management, policy and legislative processes.

Nonetheless, the fact remains that the co-operative model is not a panacea, and does not automatically lead to the empowerment of fishers and fishworkers, a fact conclusively illustrated in South Africa, by the many unsuccessful fishing co-operatives formed over the last five years through the Department of Trade and Industry (DTI). While there is no universal recipe for success, there are certain factors that increase the likelihood of a fishing co-operative achieving its goals. These factors include:

  • Detailed preparatory research and planning;
  • Mutual solidarity and cohesion between members;
  • Members committed to a shared vision for their co-operative;
  • Members with sufficient organisational capacity (financial and operational business management expertise);
  • Members with sufficient institutional capacity (collective decision-making, conflict resolution);
  • Members with economic capacity (access to capital, assets and infrastructure);
  • In developing countries – access to state support, and an enabling legislative and policy environment;
  • Access to fisheries resources (legally secure and economically viable).

It is vital to bear these factors in mind when considering the implementation of the SSF Policy in South Africa, and the prospects for the small-scale fishing co-operatives at the heart of this process.

Co-operatives and the implementation of the SSF Policy

The SSF Policy proposed in 2012 that “community-based legal entities” be established to serve as the core economic and representational structure in each small-scale fishing community. Under the policy, communities were free to choose the form of the community-based legal entity that best suited their needs. Four years later, the Regulations Relating to Small-Scale Fishing (2016) (SSF Regulations) that govern the implementation of the SSF Policy (and which were developed with virtually no participation) stipulate that community-based legal entities must take the form of co-operatives, thus nullifying communities’ autonomy to select their preferred form of community-based legal entities.

Now, with the much awaited implementation of SSF Policy, primary co-operatives will be formed over the next few months in roughly 300 designated small-scale fishing communities, and community-based fishing rights will be allocated to each co-operative, which will play a central role in the harvest and post-harvest activities conducted by these communities. This could potentially be a positive development for some communities, as several co-operatives formed through the DTI currently illustrate. For example, in Lamberts Bay and Doringbaai on the Cape West Coast there are a number of co-operatives that have (unlike many other DTI co-ops) been able to operate profitably, providing employment and income, not only to their small group of members but also to people in the broader community (the legal status of the DTI co-operatives in relation to the SSF Policy is not yet known).

Though most small-scale fishers recognise the potential value of the co-operative model, they nevertheless have serious concerns about the practical challenges facing the co-operatives to be established under the auspices of the SSF Policy.

To begin with, there is the unavoidable ecological fact of finite fisheries resources that are increasingly under pressure. Then there is the balance of forces in South Africa’s fisheries economy, in which industrial fishing companies and fish brokers wield disproportionate power at a national and local level respectively, and in which small-scale fishers are structurally disempowered. There are also challenges relating to the tensions and divisions that exist in many small-scale fishing communities, which limit the possibilities for mutual solidarity and commitment among co-operative members. Compounding the latter is the SSF Policy verification process, which in many cases is facilitating the inclusion of individuals who have little or no prior involvement in fisheries, and with whom established fishers may be reluctantly forced to work in the same co-operative.

To get a clearer sense of the challenges confronting the co-operatives that will be formed under the SSF Policy, it’s worth taking a closer look at two other crucial issues: i) membership capacity deficit, ii) fishing rights.

i) Membership capacity

Multiple generations of structural poverty and marginalisation have left most small-scale fishing communities with a large capacity deficit. Many people in these communities have relatively low literacy levels, and limited business and co-operative management expertise, and therefore lack the formal organisational and institutional capacity necessary to develop profitable, democratic, and sustainable co-operatives.

In addition, many people in small-scale fishing communities have low levels of economic capacity, and will be unable to provide financial capital to establish and operate co-operatives – as one fisher on the Cape Peninsula observed, it is very difficult to “pool poverty”. In most cases, co-operative members will be forced to seek capital from external sources. With limited organisational capacity, co-operative members may struggle to secure sufficient funding, or if such funding is secured, they may struggle to manage it effectively.

One of the most serious challenges associated with the lack of economic capacity among small-scale fishing communities relates to the balancing of short-term and long-term needs. Economically desperate co-operative members require regular income to survive, and may not have the luxury of deferring benefits in order to make necessary long-term investments in the business, creating a fundamental tension that could sabotage the co-operative’s sustainability, while also igniting conflict between members.

The capacity deficit inevitably raises the issue of support for members of small-scale fishing co-operatives established in South Africa under the SSF Policy. As in other developing countries, members of these co-operatives will require support from the state (at least in the early stages). Such support will need to include measures such as education and training, financing (funding and loans on favourable terms), infrastructure development, the allocation of economically viable fishing rights, and preferential tax treatment.

However, there is evidence to suggest that the state itself lacks the capacity to provide the support that small-scale fishing co-operatives require. While the post-1994 period has seen the creation of a progressive policy and legislative framework for co-operatives, and multiple agencies and programmes have been established to provide support to co-operatives, the state itself has acknowledged that this support system is “negligible”, “unfocused”, and “scattered” (DTI 2012, p52) – a central reason for the low (12%) survival rate for co-operatives in South Africa (DTI 2012: p39). It’s unlikely that the system of state support for co-operatives (now the mandate of the Department of Small Business Development) will improve dramatically any time soon. In all probability, small-scale fishing co-operative members will be compelled to:

  • Rely on their own ingenuity;
  • Tap into accounting, business management and related expertise held by non-fishers in their broader coastal community;
  • Engage with other SSF communities who have experience with co-operatives;
  • Identify and access institutional sources of support beyond the state.

ii) Fishing rights allocations

Obtaining legally secure and economically viable access to fisheries resources is a fundamental challenge facing small-scale fishing co-operatives. Under the SSF Policy, DAFF is required to allocate a locally-specific, multispecies “community-based” fishing right to a primary co-operative established in each small-scale fishing community, with co-operative members utilising the right collectively.

However, the reality on the ground is that fishers still do not know exactly which species they will be allocated, or what the quantum of these allocations will be. This uncertainty is a primary source of apprehension for fishers. Without greater clarity on the specific composition of their community-based fishing right, they are unable to make a rational assessment of the possible economic viability of small-scale fishing co-operatives (an assessment which fishers understandably place great stake in).

At present, the SSF Regulations state that the precise composition of the small-scale fishing right will be determined by DAFF in consultation with each community, once the verification and co-operative formation processes have been concluded. According to the SSF Regulations, each community will – in consultation with DAFF – be required to select a number of species from two lists provided in the SSF Regulations, one list designating species that can only be used for “own consumption” purposes, and one list designating species that can either be eaten or sold.

Several concerns are raised by the rights allocation arrangement as prescribed by the SSF Regulations. For instance, the species lists negate the fundamental overlap between commerce and subsistence in small-scale fisheries. Furthermore, there is legitimate reason to be concerned about the potentially undemocratic nature of the upcoming rights allocation consultations between communities and DAFF. Conscious of the fraught politics and power asymmetries that define fisheries governance in South Africa, many fishers are wondering: to what extent will SSF communities be able (or unable) to influence the outcomes of these participatory engagements?

Complicating the situation significantly is the fact that DAFF has pre-empted the SSF Policy by conducting two new rounds of long-term fishing rights allocations in 2013 and 2015/2016 (formally referred to as the Fishing Rights Allocation Process or FRAP). Under FRAP, DAFF has allocated rights (eight to 10 years in duration) in 18 large and medium-scale commercial fishing sectors for a range of species, some of which are also targeted by small-scale fishers. FRAP has thus constrained the possibilities for the upcoming allocation of rights under the SSF Policy process, and deepened the pre-existing uncertainty and apprehension within small-scale fishing communities.

In September, the looming threats facing small-scale fishing co-operatives grew substantially, with the gazetting of DAFF’s decision that small-scale fishing rights will only be allocated for a three-year period, with no clear stipulation regarding what happens at the end of this period. DAFF’s dramatic and unexpected decision directly contradicts the spirit, aims and principles of the SSF Policy, and was taken without informing (let alone consulting with) small-scale fishing communities. Indeed, this decision means that DAFF is basically ignoring its obligation to recognise and restore small-scale fishing communities’ rights to access and benefit from South Africa’s marine and coastal commons, as legally required by the Equality Court Order of 2007, and by the Marine Living Resources Act Amendment of 2013. By decreeing that rights will only be allocated for three years, DAFF is institutionalising a highly precarious form of tenure for small-scale fishing communities, thereby weakening the very basis for the development of economically viable small-scale fishing co-operatives.

Looking ahead: promise and peril

There is widespread recognition among small-scale fishers in South Africa that – in theory – the co-operative model holds considerable promise. Nevertheless, fishers are not naive about the scope of the practical challenges facing co-operatives to be established under the SSF Policy. They are fully cognisant that the co-operatives face great peril in relation to capacity deficits at the community and state level, widespread community tensions, uncertainty about fishing rights, not to mention finite fisheries resources and the dominance of the fisheries economy by a few industrial fishing companies and fish brokers. Left unaddressed, these challenges will seriously jeopardise the economic viability of the proposed small-scale fishing co-operatives, and their potential contribution to incomes, food sovereignty, and social advancement in disenfranshised coastal fishing communities. DM

Oliver Schultz is a Post-Doctoral Research Fellow at the University of Cape Town)

Photo: Fishermen throw Cape snoek onto the quay at Kalk Bay harbour in Cape Town, South Africa, Wednesday, 24 August 2005. (EPA)

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