Agri Business

Kerala’s fisheries sector in deep waters, post note-ban and GST

V Sajeev Kumar Kochi | Updated on January 27, 2018 Published on November 20, 2017

Rising input costs, dwindling catch and falling margins add to the woes



With Kerala’s fisheries sector — a forex spinner for the State — struggling to recover from the massive slump it witnessed in the wake of the demonetisation, the Goods and Service Tax (GST) regime has added to its woes.

Govt’s false claims

The introduction of GST has left the sector in dire straits, pushing up input costs and bringing down the margins.

The revenue erosion is happening at a time when the sector is already passing through a crisis with rising operational costs and dwindling catch.

However, the rise in input costs contradicts the government’s claims that GST has not impacted the agricultural sector, though fishing comes under its purview.

With a 600-km coast, the fisheries sector provides livelihood to over 14 million in the State, directly or indirectly.

The drop in money circulation after demonetisation has impacted job opportunities, says Joseph Xavier Kalappurackal, General Secretary, All Kerala Fishing Boat Owners Association.

“The depletion of fish stock and diminishing prices of various varieties added to the woes of the fishermen. Moreover, there is an unholy nexus between middlemen and traders to exploit those venturing into the sea to take cost advantage of their catch,” he alleged.

Before demonetisation, there was liquidity and daily cash transactions ran up to ₹25-30 crore. This has come down to ₹10-12 crore.

There has been a decline in catch, reflected in fish landings, which now hover at 1,000 tonnes a week compared to the 15,000 tonnes earlier. Quoting a CMFRI study, he said Kerala has lost its dominance to Gujarat in fish landings, slipping to the fourth position.

“In the absence of any collateral, banks are unwilling to help the fishing community,” he said, when asked about the government aid to the ailing sector. This has forced a majority of fishermen to fall back on private lenders. The government’s promise to extend sufficient credit for conducting business and construction of boats and infrastructure remains unmet, he added.

The introduction of GST, according to him, has badly affected the sector as several items, which had zero tax under VAT, now attract levy. They include ice-boxes, fishing hooks, rods, ropes and twines, which at present carry a tax tag in the range of 5 to 12 per cent, whereas for outboard engines, the rates have been hiked to 28 per cent from 14 per cent earlier.

Repercussions

All this will contribute to issues such as climate change, reduced catch per unit and poor landings, he observed.

In general, the technology needed to steer the sector may take a back seat due to thehigherrates imposed on navigational equipment.

Expressing a similar view, KR Ramesh, President of Inland Fish Workers Society, said the rising diesel prices is another concern. This is despitethe fishing community’s long-pending demand for a fuel subsidy. Moreover, the increase in the price of subsidised kerosene has led to severe shortage, forcing fishermen to source it through the black market.

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Published on November 20, 2017
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