Global Integration? Small Producers in the Pole and Line Value Chain in North Maluku, Indonesia

Abstract

The thesis investigates various analytical dimensions to the value chain of the North Maluku Pole and Line tuna chain. The main contributions of this thesis is threefold. Firstly I have presented a value chain map, identifying the input-­put structure of the chain as well as its geographical territoriality. These are summarised in the maps presented in Figure 3 Map of North Maluku SJT Production and Distribution Patterns. Secondly the thesis presents an analytical argument regarding the governance structure, power structure and institutions in the chain with specific focus on the production node. It is argued that the main form of governance is vertical contractualisation, which increases demands on fishermen by commercial buyers in return for loans that cover operational costs. The issue of power reveals conflicting interests between fishermen, vessel owners and commercial buyers. horizontal upgrading cannot take place due to these conflictual interests. To understand institutional responses to the challenges of the value chain, I have investigated the inka mina programme. Whilst a good initiative for increasing fishing capacity, the Inka Mina programme is insufficiently managed in order to reduce poverty as it is designed to do. The programme is fraught with substantial corruption, favouritism and unequal access to the disadvantage of poor fishermen. Thirdly, the thesis analyses the value chain map, the fishermen profile and the inka mina programme in light of horizontal issues in the value chain. horizontal issues refer to terms of participation, poverty, vulnerability and risk and inequality. This analysis found that the terms of participation in the canned tuna value chain are suboptimal because fishermen are locked into contracts with commercial buyers that reduce their profit maximising potential in exchange for short term loans to covers operational expenses of fishing trips. Fishermen in the value chain are not destitute, however they can be seen as persistently poor with a risk of intergenerational transmission of poverty. Fishermen are vulnerable to shocks such as fuel price hikes, lack of live bait, oversupply of fish and illness. These issues cannot be dealt with directly through upgrading because there are conflicting interests between vessel owners and fishermen, because of the likely cost increases. The key to solving such issues is through empowering poor fishermen to demand better work conditions. This can be done with inka mina vessels, where fishermen formally have ownership, but in practice are exploited by wealthy and well-connected “financial managers”. The issue is more complex for privately owned vessels and their crew. Inequality of income for example, can also be reduced by enforcing legal property rights of registered fishermen to their inka mina grant vessels. This depends, however, on the resolve of institutional administrators that allowed private vessel ownership to occur in the first place. These analyses lead to the notion of upgrading. I suggest various upgrading strategies for poverty reduction and reduction of inequality. Furthermore, I present and argue a case for increased localised processing for the Japanese and Korean Katsuobushi markets. The answer to the research question and the conclusion is that increased global integration into the canned tuna value chain does not reduce poverty, it may in fact worsen the situation for poor fishermen. Instead, a suitable upgrading strategy may be to participate in the alternative Katsuobushi value chain. participation in that chain, could increase direct income for fishermen, allow diversified livelihoods strategy for household and, increase demand for landed catch. All in all, participation in this value chain is more likely to reduce poverty for PL fishermen in North Maluku.