NGO Sponsors Trip to Expand Fish Exports

Next month, 10 Cambodian fish traders are scheduled to visit the Thai Frozen Food Associ­a­tion in Bangkok to tour a fish processing plant.

While 10 fishermen visiting a plant may not seem like a big deal, an NGO called Small and Medi­um Enterprise Cambodia, which is sponsoring the trip, is hoping it will begin to transform Cambo­dia’s fishermen into legitimate global market competitors, as well as crumble the domestic trade barriers that currently stifle Cambodia’s fish exports.

“Plenty of high-quality fish are being sold to Thailand as if it were gravel,” said Tony Knowles, founder of SME. “A mafia on the Thai side controls the fish industry. For a Cambodian fish trader, that is quite an impregnable wall to get through.”

The idea, Knowles said, is to get the fish traders, who are part of a working group that has met to discuss problems in the industry, past the “wall” and into Bang­kok, where they can understand the quality and packaging standards required to compete internationally.

Once the fish traders see this process firsthand, Knowles said, they can start to make the chan­ges needed to transform Cam­bodia’s fish trade—changes that will become essential if the kingdom enters the World Trade Organization in Septem­ber.

The problems currently inhibiting Cambodia’s fish exports are well-documented, most notably in a January 2002 study endorsed by the Ministry of Commerce, the WTO, the World Bank, the International Monetary Fund, the International Trade Commission and the UN. Though Cambodia is the world’s fourth-largest producer of freshwater fish, the study said, nearly half of all fish are exported illegally “to avoid official taxes and charges.”

The study, which took much of its information on fish exports from SME, urged developing private sector business associations and privatizing the state-owned Kamfimex, which was the sole licensed exporter of fish products.

“Due to a number of factors, including limited export experience, relatively few fish processing and packaging facilities, and poorly developed marketing capa­bility, Cambodia is not benefiting from value added exports,” the study said.

About 75 percent of Cambo­dia’s fish is ex­port­ed to Thai­land for about $367 per ton, the study found. Far fewer processed fish exported to Hong Kong sold for $9,472 per ton.

A more recent study by the Cam­bodia Devel­op­ment Re­source Institute presented last month showed that the fish trade today remains primarily the same as in early 2002. While Kamfimex no longer has monopoly control and 20 companies are now licensed to export fish, the study found that a series of informal, arbitrary fees and lack of a cold storage facility near the border to keep fish fresh leads to widespread corruption and handicaps fish traders when they reach the Thai fish markets.

As part of the CDRI study, researcher Yim Chea followed exporters shipping 3.1 tons of fish from Kompong Chhnang prov­ince to the Thai fish market. During the trip, the exporters paid 24 fees to 15 institutions.

“At the checkpoint, the fee collector just looks in the back of the truck and tells the trader what to pay,” said Suos Thida, a fish export specialist with SME. “There are lots of illegal fees. ”

The fees on the trip followed in the CDRI study totaled $76.10 per ton. If the exporters had paid the official prices according to the law, they would have been charged $219.60 per ton. The $25.30 per ton profit the fish exporters made on the trip, the CDRI study found, would have turned into a loss of $118.20 per ton if they paid the correct amount.

Once Cambodian fish traders pay a 10 percent export tax and cross the border, researchers found that they are at the mercy of the Thais. The Cambodians must sell the fish quickly or it will spoil; they cannot go back to Cambodia because they will be charged im­porting fees and lose any chance for a profit.

“At the border, informal back­door deals take place that are not characterized by professionalism,” Knowles said. “The Cambodian fish traders are not organized, and the Thais take advantage to get the fish as cheap as possible.”

Thai officials are eager to share their expertise with the 10 fish traders who will visit Bangkok in August, Knowles said.

“Thailand would rather have rich­er neighbors than poorer neighbors,” Knowles said. “The problem is that on the working end of the Thai border, the gov­ern­ment doesn’t control anything. Things on the street work differently.”

With Cambodia close to entering the WTO, Knowles said, the fish trade will face challenges, as will other industries, because of how the economy is structured.

“There is not a serious effort to work from the bottom up and make the economy independently viable,” Knowles said. “This economy is not organized to function in the WTO. It is still organized from the top down.”

At the Ministry of Agriculture, Fisheries Director Nao Thuok was optimistic that WTO membership would increase the profits of fish traders.

“The WTO will make Cambo­dian dealers compete on the global market,” Nao Thuok said. “They will be able to sell their catch for more money.”

Nonetheless, Knowles is confident that an empowered private sector can produce change faster than government initiatives.

“As we take the private sector abroad, the government gets anxious,” Knowles said. “Once fish traders go abroad and know how the world works, they might not go along with the old system.”

 

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