Stuck in troubled waters, seafood sector seeks aid to tide over crisis

The sector provides employment to nearly one lakh of the population is on the verge of collapse, thanks to shrinking markets and mounting losses caused by the Covid-induced crisis.
For representational purposes
For representational purposes

KOCHI: The seafood export sector that contributes Rs 6,000 crore to the state’s economy and provides employment to nearly one lakh of the population is on the verge of collapse, thanks to shrinking markets and mounting losses caused by the Covid-induced crisis. The industry body has approached the Union Commerce Ministry and the Kerala chief minister, seeking immediate relief to help the sector survive.

"With fishing activities yet to resume, the processing units are also unable to function due to the lack of supply. The exports have nose-dived to 20 per cent of what they were before, as our regular customers overseas have gone bankrupt and are not placing orders. Besides, the prices have also declined by 20 per cent, with many units being forced to go for distress sales at rock-bottom prices to sustain themselves,” said Alex K Ninan, regional president of Seafood Exporters Association of India.

The fishing industry in Kerala had lost a huge number of fishing days due to the floods in the past two years. The landing patterns have changed and the volume of sea-caught items has fallen drastically, leaving the industry with very little raw material. The sector is dependent on high-value catches like
shrimp, squid, cuttlefish, octopus, and clams, among other fishes.

"Marine fishing has almost come to a complete halt due to the closure of fishing harbours. Distressed over the loss of livelihood, many boats have moved to other states. A majority of the pre-processing centres have been shut down due to a lack of raw material. Now, peeling activities have also moved to villages in Tamil Nadu, Karnataka, Andhra Pradesh, and Odisha," Alex pointed out.

He added that high-valued stocks meant for summer and Easter sales could also not be shipped due to the restrictions on international trade, which led to the large-scale cancellation of orders during the peak season. "This was a major blow to the reeling industry. Many ports were shut down and the cargo that was already on the high seas had to be called back or sold on huge discounts. There were also many instances of non-payments from buyers," he said.

KSEB turns villain

It is at this point that the Kerala State Electricity Board (KSEB) enters, issuing disconnection notices to processing units as they failed to pay their arrears during the lockdown period. "The government had postponed the payment of the arrears, which had come as a big relief to the distressed industry. But
now, the KSEB is demanding the payment in a lump sum. This is a very drastic move, as unlike other industries, we cannot run our frozen warehouses withouelectricity," Alex said.

The processed marine products have to be kept at a temperature of minus 18-degree Celsius round the clock. "Hence, major processing units incur an electricity bill of Rs 18-20 lakh per month. Small units have to pay up to Rs 8-10 lakh. Amid the lockdown, the units have been served bills ranging from `30 lakh to Rs 1 rore, and our pleas to allow payment in instalments have been rejected. If the
electricity is disconnected, our stocks will perish and we will go bankrupt,” he explained, adding that the companies would also be drastically affected by the sudden large outflow of working capital to clear the electricity dues. "We request the government to allow us to clear the dues in instalments," he said.

The industry has been supporting its workforce despite the crisis, as they could not afford to lose their skilled and trained workers. Though the Union government had promised support, the banks did not waive interests during the lockdown. They instead granted additional loans with a higher rate of interest, and that too, by taking personal security. The crisis has led to the downgrading of CRISIL rating, and the banks are using this as a tool to deny loans and charge higher interests.

"Considering our situation, the government should provide diesel at subsidised rates to fishermen, in addition to ensuring financial support for pre-processing units. Banks should waive the interest rates at least for the lockdown period, and provide temporary working capital at subsidised rates so we can tide over the crisis. The government should also provide at least 50 per cent of the salary paid during the lockdown period through ESI," he said.
 

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