Operation Phakisa: Unlocking the Economic Potential of South Africa’s Oceans Aquaculture Lab Report 19th September 2014 Contents Executive summary Detailed lab report Glossary of terms Appendices 1 Contents Executive summary 1.1 Quick glance 1.2 Overview of the Aquaculture sector 1.3 Overview of issues 1.4 Overview of initiatives Detailed lab report Glossary of terms Appendices 2 EXECUTIVE SUMMARY: 1.1 QUICK GLANCE Quick Glance The Aquaculture lab undertook the task of unblocking the potential of the Aquaculture sector in South Africa. The goal is to grow Aquaculture to play a major role in the supply of fish products, and an enhanced role in job creation and contribution to national income. South Africa’s Aquaculture sector has high growth potential due to increasing demand for fish in the face of declining fish stocks in the ocean and South Africa’s abundance of marine and freshwater resources. The sector also offers significant potential for rural development, especially for the marginalised coastal communities. The Aquaculture Lab aims to grow sector revenue from R0.67bn to R3bn; production by 20,000 tonnes; jobs from 2,227 to 15,000 and ensure increased participation to support transformation in the sector. Currently, the sector in South Africa is at a very small-scale, and faces a number of challenges. Production is focused on a few high value species such as abalone, oysters, mussels, finfish and trout – driven mainly by the high cost of production. Other challenges include regulatory barriers, difficulty in accessing funding, poor access to markets, limited pool of skills, poor access to quality inputs, fragmented R&D, limited infrastructure in rural areas and inclusivity in the sector. The lab identified 8 key initiatives, which are expected to spur the growth of the sector. One initiative will address the selection and implementation of 24 projects, improving both the number and productivity of the new farms. Three initiatives relate to the creation of an enabling regulatory environment, and others focus on funding support, increasing skills pool and awareness and improving access to markets. To deliver on these initiatives, the Aquaculture lab created detailed implementation plans and accompanying budgets, a proposed governance system to take responsibility for initiatives and key performance indicators to help monitor delivery. SOURCE: Lab Discussion 3 EXECUTIVE SUMMARY: 1.1 QUICK GLANCE The Aquaculture lab worked for 6 weeks to identify issues, develop solutions and action plans 6 weeks Prioritising and Developing Gathering Developing detailing detailed action Documentation of issues solutions solutions plans • Development of Development of Detailed Detailed supporting Documentation of Lab Aspiration solutions implementation budgets and KPIs to lab efforts and plans with implementation outputs • Identification of timelines plans issues and root causes Lab Aspiration 8 initiatives 30 Implementation Budget and KPIs Lab Report and 9 key developed plans for 30 plans issues identified (19 projects and 11 initiatives) SSOOUURRCCEE:: AAqquuaaccuullttuurree LLaabb 4 Contents Executive summary 1.1 Quick glance 1.2 Overview of the Aquaculture sector 1.3 Overview of issues 1.4 Overview of initiatives Detailed lab report Glossary of terms Appendices 5 EXECUTIVE SUMMARY: 1.2 OVERVIEW OF THE AQUACULTURE SECTOR Overview of the Aquaculture Sector The Aquaculture sector in SA is nascent and sub-scale. In order to fast-track growth and development, aquaculture will need to rapidly increase scale of production, and stimulate demand in local and international markets. Scale: Current players (producers, suppliers, processing facilities, etc.) across the value chain Supply Demand • • Value chain Consumption • • Cost of Production Price • • Regulations International Trade • • Funding Market maturity 6 EXECUTIVE SUMMARY: 1.2 OVERVIEW OF THE AQUACULTURE SECTOR Global aquaculture industry produces ~67 MT, with SA contributing 0.00003% of global production Globally, the aquaculture industry Countries with similar coastline length to South Africa produces ~67 MT ($ 138 bn) of fish produce >100X SA’s aquaculture production Million tonnes Share of aquaculture Coastline length production km % Marine 25 Indonesia 54,716 5 China 14,500 62 India 7,000 6 Freshwater 42 Vietnam 3,444 5 Thailand 3,219 2 Total 67 South Africa 2,798 0.00003424 SOURCE: FAO State of World Fisheries and Aquaculture 2014; FishStatJ 7 EXECUTIVE SUMMARY: 1.2 OVERVIEW OF THE AQUACULTURE SECTOR Nations with similar length of coastline are producing ~1,000 times SA’s Aquaculture production volume Nations with similar size of length of coastline as South Africa Share of Aquaculture Global Aquaculture production Coastline length production Million tonnes % km China 41.1 61.7 14,500 India 4.2 6.3 7,000 Vietnam 3 4.6 3,444 Indonesia 3 4.6 54,716 Bangladesh 1.7 2.6 580 Norway 1.3 25,148 Thailand 1.2 1.9 3,219 Chile 1 1.6 6,439 Egypt 1 1.5 2,450 Myanmar 0.8 1.38 1,930 South Africa 0.002 0.00003424 2,798 8 SOURCE: FAO 2014 State of World Fisheries ; CIA World Factbook EXECUTIVE SUMMARY: 1.2 OVERVIEW OF THE AQUACULTURE SECTOR Globally, the aquaculture sector has contributed significantly to important socio-economic priorities ▪ Egypt employs 580,000 people in its Aquaculture sector (more than all other Job Creation African countries combined ▪ In many developing countries, labour intensive processing methods provide livelihood support for many poor rural economies ▪ Over 80% of Aquaculture farmers in Asia are small-scale; often represents the only source of income ▪ small-scale Aquaculture enterprises are major contributors to food production in many developing countries ▪ Contributions of small-scale Aquaculture enterprises to poverty alleviation and food security has received significant global attention (e.g., Rio+20 UN conference) Human Capital ▪ Several countries (e.g., US, Norway, Philippines) provide training, bachelors’, and Development advanced degrees in Aquaculture studies ▪ In countries where there is considerable competition for positions in the industry, advanced degrees are frequently required for positions in research or management ▪ Aquaculture is a new industry in developing countries and women are making Gender Equality valuable contributions ▪ Division of labour between men and women vary by scale of operation: – Small-scale Aquaculture: Women provide 46% of total labour (marine: 36% women, inland: 54% women) – Examples: Sri Lanka – 90% women, Uruguay – 52% women, Brazil – 57% women SOURCE: FAO, World Review of Fisheries and Aquaculture 9