For about a week now the Tanzania Fisheries Union (TAFU), an umbrella organisation of artisanal Nile perch fishermen on Lake Victoria, has been waging a frontal campaign to convince the fishermen to boycott selling their catches to fish processors, accusing the latter of conspiring to lower local market prices.
The union reached the decision after last week’s sharp fall in the Nile perch prices whereby a kilo of fresh perch dropped by 60 percent, reaching Sh2,500 per kilo down from Sh4,000.
According to TAFU, the sharp fall in the price was caused by a conspiracy among Lake Victoria fish processors in a move aimed at ‘exploiting’ the fishermen.
Some politicians have also joined TAFU’s bandwagon, echoing the claim that the sharp fall in prices in the domestic market was a result of a conspiracy among the local fish processors. However, so far no convincing evidence has been produced to back the grave allegations.
TAFU has also threatened fishermen who will ignore the boycott, calling on its members to attack any fisherman who will be found selling Nile perch to fish factories in the Lake Victoria zone.
The truth of the matter is that local fish processors have been promoting the Nile perch industry for about two decades now, dating back to 1992 when the first fish factory was built in Mwanza city. Since then, we have witnessed a boom in the region’s economy which has been growing in leaps and bounds.
Neither TAFU nor politicians were aware before 1992 that the Nile perch industry would one day become the backbone of Lake Victoria zone’s economy, overtaking cotton. It should be borne in mind that before 1992 the Nile perch fish was considered a food item for the poor and hence had little market value.
Although we can’t rule out a possible conspiracy among fish processors in bringing down the Nile perch prices at the local level, it would nevertheless be foolhardy to deny the impact of the current Eurozone crisis on the local Nile perch industry, which directly affects fishermen on Lake Victoria.
While the cities of Athens and Barcelona may indeed be thousands of kilometres away from Mwanza city, the ravages of their financial predicament emanating from the Eurozone crisis have overtaken the distances among the three cities, adversely affecting thousands of Nile perch fishermen in Tanzania.
With Europe’s economy facing a grim future due to the ongoing Eurozone crisis, millions of fish buyers in European countries have turned to cheaper alternatives to Nile perch fillets, such as pork and chicken. While a kilo of pork or chicken costs a mere euro 3 (Sh6,000) the same kilo of Nile perch fillets, in comparison, costs euro 10 (Sh20,000).
Since Europe is the biggest buyer of Nile perch from Lake Victoria, consuming 80 percent of the total catches, according to statistics from the fish processors and exporters, a drop in demand in those countries (and in this particular case it is a big one) will willy-nilly spell gloom and doom for the Nile perch suppliers.
Between 2008 and 2011, the Nile perch industry faced a number of challenges, both locally and globally. At the local level the perch faced unsustainable fishing, leading to the dwindling of its stocks in Lake Victoria, while at the global level it was hit by the world financial crunch, coupled with stiff competition from farmed ‘tilapia,’ better known as Bassa, and Pangasius produced in Vietnam and China.
But, according to a recent study released two months ago, the Australian barramundi has been recognised as one of the foods likely to become another strong competitor to the Nile perch market. The competition from this quarter is noteworthy at this juncture because the fish is said to enjoy a better reputation as its “flesh is extremely low in toxin levels, but full of heart and brain healthy Omega-3s.”
These are facts on the ground which TAFU cannot be blind to. It should therefore educate its members about the current global economic trends, especially with regard to what is happening in the European market. In a free market economy, commodity prices are determined by demand and supply.
We are in a globalised economy where we have no power to set the prices of what we produce. The global forces, or market forces, set the prices of our products - and that’s a reality nobody can do anything about. If Europe doesn’t buy more fish from Lake Victoria because of the current crisis it’s facing, fish processors will have no choice but to cut down their production levels.
A reduction in the production levels by Nile perch processors while the supply of fish by small-scale fishermen remains the same or marginally higher, will automatically lead to a drop in the fish prices owing to a mismatch between supply and demand. Under this situation, the prices will fall no matter whether or not there is a boycott to sell the fish.
Today we are told that this year the demand for cotton on the world market will be lower than the global supply, and hence the crop’s prices in the local market will necessarily fall drastically. Should this then be interpreted as a conspiracy by cotton exporters? No; far from it. It’s just another effect of the globalised economy over which we have no controls.