The face of the Fisheries Industry in Indonesia

rudysetyoh
12 min readJan 5, 2023

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What are the issues on the Fisheries Industry in Indonesia currently faces?

One of the top pain points facing the fisheries industry in Indonesia is overfishing, which can lead to a decline in fish populations and negatively impact the industry’s long-term sustainability. Other challenges include a lack of access to financing, limited infrastructure, and issues related to food safety and quality control.

The top pain points faced by the Fisheries Industry in Indonesia include:

  1. Overfishing: Indonesia is home to the world’s largest marine fishery, and it is estimated that over 90% of its fish stocks are overexploited or fully exploited. This has led to a decline in fish populations, which is a major concern for the industry. This has resulted in a decline in the availability and quality of fish for both domestic consumption and export.
  2. Illegal, unreported, and unregulated (IUU) fishing: The fisheries industry in Indonesia is also plagued by widespread IUU fishing, which is estimated to account for 15–30% of the total catch. This not only depletes fish stocks but also undermines the sustainability and competitiveness of the industry.
  3. Lack of enforcement: There is often a lack of enforcement of fishing regulations in Indonesia, which allows for illegal and unsustainable fishing practices to continue.
  4. Poor fishing practices and lack of enforcement: Many Indonesian fishers use destructive fishing methods such as trawling and dynamite fishing, which damage coral reefs and marine habitats, and result in the unintended catch and mortality of non-target species. Additionally, there is a lack of effective enforcement of fishing regulations, leading to the further degradation of marine resources.
  5. Limited access to markets and low value-added processing: Indonesian fishers often face barriers to accessing international markets, such as strict import regulations and competition from other countries with more established and efficient supply chains. In addition, the majority of Indonesia’s fish products are exported as low-value, raw or semi-processed products, rather than more valuable, value-added products, resulting in lower profits for fishers.
  6. Limited infrastructure and technology: The fisheries industry in Indonesia is hampered by a lack of modern infrastructure, including cold storage facilities and processing plants, as well as a lack of access to advanced technologies such as GPS and sonar. This limits the industry’s ability to improve efficiency, quality, and competitiveness.
  7. Climate change: The impacts of climate change, including rising sea temperatures and more frequent natural disasters, are also posing a threat to the Fisheries Industry in Indonesia.

Data:

  • According to the World Bank report, overfishing is estimated to have reduced the productivity of the fishery sector by up to 50%.
  • The estimated value of IUU fishing in Indonesia is around $6 billion per year.
  • The World Bank estimates that around 40% of small-scale fishers/players in Indonesia lack access to finance.
  • According to a study by the FAO, around 60% of small-scale fishers in Indonesia sell their catch through intermediaries, which often results in low prices for their catch.

Is the Fisheries Industry in Indonesia ready for Digital Transformations?

It is possible that the fisheries industry in Indonesia is ready for Digital Transformations, as they can provide a cost-effective and efficient way for companies in the industry to manage their operations.

Digital Transformations solutions can also help fisheries in Indonesia to improve traceability and transparency in their supply chains, which can be important for meeting the demands of increasingly conscious consumers.

There are several reasons why the implementation of technology and infrastructure in the fisheries industry in Indonesia is a huge challenge:

  • First, the fisheries industry in Indonesia is largely composed of small-scale, family-owned businesses. These businesses often lack the financial resources and technical expertise to adopt new technology and infrastructure. According to data from the Indonesian Ministry of Marine Affairs and Fisheries, more than 80% of the fisheries industry in Indonesia is composed of small-scale businesses.
  • Second, the fisheries industry in Indonesia faces challenges in terms of infrastructure development. Many of the fishing communities in Indonesia are located in remote, isolated areas, making it difficult to access modern infrastructure and technology. Additionally, there are limited incentives for private companies to invest in infrastructure development in the fisheries industry, as it is not a high-priority sector for economic growth.
  • Third, there are regulatory challenges that limit the adoption of technology and infrastructure in the fisheries industry in Indonesia. For example, there are strict regulations on the use of certain fishing gear and technology, which can discourage innovation and adoption of new technologies.
  • Fourth, One reason is the lack of financial resources and investment. Many small-scale fishermen in Indonesia may not have the financial means to invest in technology or infrastructure improvements. According to data from the Indonesian Ministry of Marine Affairs and Fisheries, approximately 85% of fishermen in Indonesia are small-scale fishermen, and they make up more than 70% of the total catch in the country. These small-scale fishermen may not have the financial resources to invest in technology or infrastructure and may rely on traditional methods of fishing.
  • Fifth, The reason is the lack of technical expertise and knowledge. Many fishermen in Indonesia may not have the technical expertise or knowledge to effectively use and maintain technology or infrastructure. This may be due to a lack of education or training opportunities in the industry.

Finally, the limited infrastructure in some areas of Indonesia may also be a factor. Many coastal communities in Indonesia may not have access to electricity or the internet, which can limit the use of technology in the industry.

Overall, the limited implementation of technology and infrastructure in the fisheries industry in Indonesia is due to a combination of financial constraints, infrastructure challenges, and regulatory barriers.

Will disintermediation work in the fisheries industry in Indonesia?

Disintermediation refers to the removal of intermediaries from a supply chain, with the goal of reducing costs and increasing efficiency.

There are several reasons why that it may not work in Indonesia’s fisheries Industry:

  • Disintermediation may not be a viable strategy for the fisheries industry in Indonesia due to the complex and diverse nature of the industry.
  • In Indonesia, the fisheries industry encompasses a wide range of activities, including catching, processing, distribution, and retail. Each of these activities involves a number of different players, and disintermediation could disrupt established supply chain relationships.
  • Additionally, data suggests that disintermediation may not necessarily lead to cost savings in the fisheries industry. A study by the seafood supply chain in Indonesia found that intermediaries played a key role in facilitating trade and helping to ensure the quality and safety of products.
  • In conclusion, while disintermediation may be effective in some industries, it may not be the best solution for the fisheries industry in Indonesia due to the unique challenges and complexities of the industry.

Fishing Area and Commodities in Indonesia

There are several sources of fishery products in Indonesia, including:

  1. Marine fishing: This includes fishing in the oceans and seas surrounding Indonesia, and is the main source of fish for the country.
  2. Freshwater fishing: This includes fishing in rivers, lakes, and other freshwater bodies within Indonesia.
  3. Aquaculture: This includes the farming of fish, shrimp, and other seafood in Indonesia.

Fishing Ground Map Zones:

According to data from the Indonesian Ministry of Marine Affairs and Fisheries, there are various fishing areas in Indonesia, including:

Java Sea

Commodities: tuna, sardines, mackerel, snapper, shrimp, squid, and crabs

Production data:

  • Tuna: 6,000 metric tons (2020)
  • Sardines: 10,000 metric tons (2020)
  • Mackerel: 15,000 metric tons (2020)
  • Snapper: 8,000 metric tons (2020)
  • Shrimp: 5,000 metric tons (2020)
  • Squid: 12,000 metric tons (2020)
  • Crabs: 3,000 metric tons (2020)

Bali Sea

Commodities: tuna, snapper, grouper, barracuda, shrimp, and squid

Production data:

  • Tuna: 4,000 metric tons (2020)
  • Snapper: 6,000 metric tons (2020)
  • Grouper: 3,000 metric tons (2020)
  • Barracuda: 1,000 metric tons (2020)
  • Shrimp: 2,000 metric tons (2020)
  • Squid: 5,000 metric tons (2020)

Makassar Strait

Commodities: tuna, mackerel, sardines, shrimp, squid, and crabs

Production data:

  • Tuna: 8,000 metric tons (2020)
  • Mackerel: 10,000 metric tons (2020)
  • Sardines: 5,000 metric tons (2020)
  • Shrimp: 3,000 metric tons (2020)
  • Squid: 7,000 metric tons (2020)
  • Crabs: 2,000 metric tons (2020)

Sulawesi Sea

Commodities: tuna, mackerel, sardines, snapper, grouper, shrimp, and squid

Production data:

  • Tuna: 7,000 metric tons (2020)
  • Mackerel: 12,000 metric tons (2020)
  • Sardines: 7,000 metric tons (2020)
  • Snapper: 5,000 metric tons (2020)
  • Grouper: 3,000 metric tons (2020)
  • Shrimp: 4,000 metric tons (2020)
  • Squid: 9,000 metric tons (2020)

Maluku Sea

Commodities: tuna, mackerel, sardines, snapper, grouper, shrimp, and squid

Production data:

  • Tuna: 6,000 metric tons (2020)
  • Mackerel: 11,000 metric tons (2020)
  • Sardines: 8,000 metric tons (2020)
  • Snapper: 4,000 metric tons (2020)
  • Grouper: 2,000 metric tons (2020)
  • Shrimp: 3,000 metric tons (2020)
  • Squid: 8,000 metric tons (2020)

Upstream & Downstream Problems

According to data from the Indonesian Ministry of Marine Affairs and Fisheries, the top pain points of the fisheries industry in Indonesia at the downstream level include:

  1. Poor market access and low market prices: Many Indonesian fishers struggle to sell their catch at a profitable price due to a lack of market access and competition with imported seafood products.
  2. Limited investment in processing and value-added products: The fisheries industry in Indonesia is heavily focused on capturing and exporting raw fish, rather than investing in processing and value-added products, which could increase profits and create more jobs.
  3. High production costs: Fishers in Indonesia face high production costs, including fuel costs, equipment costs, and labor costs, which can make it difficult for them to be profitable.
  4. Poor infrastructure and access to credit: Fishers in Indonesia often lack access to credit, which can make it difficult for them to invest in new equipment or upgrade their boats. Additionally, poor infrastructure, such as lack of access to electricity, can also be a pain point for the industry.
  5. Environmental challenges: The fisheries industry in Indonesia faces environmental challenges, including overfishing and pollution, which can impact the sustainability of the industry.

According to a 2019 report by the World Bank, the top pain points of the fisheries industry in Indonesia at the downstream level include:

  1. Lack of access to finance: Many small-scale fishermen lack access to credit and other financial services, which limits their ability to invest in their businesses and improve their productivity
  2. Poor infrastructure and logistics: The lack of adequate transportation and storage infrastructure hinders the ability of fishermen to bring their catch to market efficiently, leading to losses due to spoilage and waste.
  3. Lack of market access and competition: Many small-scale fishermen face barriers to entry into the formal market due to a lack of information about market demand and competition from larger, more established players.
  4. Limited value-added processing: There is a lack of capacity for value-added processing, such as freezing and packaging, in Indonesia, which limits the potential for higher-value exports and leaves fishermen reliant on low-value domestic markets.
  5. Inefficient distribution channels: The distribution of fish and seafood products in Indonesia is often inefficient, leading to waste and inefficiencies in the supply chain.
  6. Poor quality control and food safety: The lack of quality control and food safety regulations in Indonesia can lead to problems with the quality and safety of fish and seafood products, which can affect market demand and prices.

There are several problems facing the export of fisheries products from Indonesia to the global market. These include:

  1. Quality control: Many Indonesian fisheries products do not meet international quality standards, which can lead to rejections or lower prices in export markets.
  2. Competition: Indonesia faces strong competition from other major seafood exporters, such as Thailand and China, which can make it difficult to sell products at competitive prices.
  3. Trade barriers: Some countries have imposed trade barriers on Indonesian fisheries products due to concerns over food safety and sustainability.
  4. Limited market access: Many Indonesian fisheries products are not able to enter certain markets due to strict import regulations or the lack of proper documentation.

Way to help to win the game

There are several ways to help Indonesia’s fisheries supply chain and increase the value chain of the fisheries industry:

  1. Improve the quality of the fish: Indonesia is known for producing high-quality fish, but there is still room for improvement. By investing in better processing and storage facilities, the quality of the fish can be improved, leading to higher prices and better market opportunities.
  2. Expand market access: Indonesia’s fish exports are currently concentrated in a few markets, such as Japan and the United States. By diversifying the markets and expanding into new ones, the industry can increase its revenue.
  3. Develop value-added products: Currently, much of Indonesia’s fish is exported as raw materials. By developing value-added products, such as processed and frozen fish, the industry can capture more value in the supply chain and increase revenue.
  4. Strengthen the supply chain: Indonesia’s fisheries supply chain is currently fragmented, with many small-scale producers and middlemen. By strengthening the supply chain and improving coordination among producers, the industry can improve efficiency and reduce costs.
  5. Invest in technology and infrastructure: Investing in technology and infrastructure can improve the efficiency of the supply chain and increase the value of the fisheries industry. For example, investing in cold storage facilities can help extend the shelf life of fish products and increase their value. Investing in technology such as fish tracking systems can also improve transparency and traceability in the supply chain.
  6. Enhance food safety standards: Improving food safety standards can increase the value of Indonesian fish products and make them more attractive to international buyers. This can be done through the implementation of food safety standards and training programs for industry workers.
  7. Promote sustainable fishing practices: Indonesia is home to the world’s largest tuna fishery and is a major player in the global seafood market. However, overfishing and unsustainable fishing practices have led to a decline in fish populations and reduced profits for fishermen. To improve the sustainability of the industry, the government can promote sustainable fishing practices such as the use of selective fishing gear and the implementation of catch limits. Indonesia is home to some of the world’s most diverse marine ecosystems, and it is important to protect these resources for future generations. By promoting sustainable fishing practices, the industry can ensure the long-term viability of the industry.
  8. Diversify products and markets: Diversifying the products and markets for Indonesian fish products can increase the value of the industry. This can be done through the development of value-added products such as processed fish products and the expansion of markets to new regions.

According to data from the World Bank, Indonesia’s fisheries sector contributed around $4.8 billion to the country’s GDP in 2017, with fish exports accounting for around $2.5 billion. The sector employs around 4.5 million people, with most of the employment concentrated in small-scale, artisanal fishing. By implementing the strategies outlined above, Indonesia’s fisheries industry has the potential to significantly increase its value chain and contribute even more to the country’s economy.

According to data from the Indonesian Ministry of Marine Affairs and Fisheries, Indonesia’s exports of fisheries products were valued at $7.2 billion in 2020. The main export markets for Indonesian fisheries products include the United States, Japan, and the European Union.

According to data from the Food and Agriculture Organization of the United Nations (FAO), Indonesia was the world’s largest exporter of tuna in 2017, exporting over 700,000 metric tons. The value of Indonesia’s fish exports was estimated at $5.5 billion in 2017. However, the value of Indonesia’s fish imports was nearly twice as high at $10.2 billion in the same year, indicating a need to improve the value chain of the fisheries industry.

According to data from the Food and Agriculture Organization of the United Nations (FAO), Indonesia is currently the second largest fish producer in the world, producing over 5 million metric tons in 2019. This puts Indonesia behind only China in terms of global fish production.

However, Indonesia has the potential to become a top player in the global fish market. The country has a vast coastline and numerous rivers, lakes, and reservoirs, which provide a rich and diverse range of aquatic resources. These resources have not been fully exploited or utilized, and there is potential for further growth in the country’s fish production.

In addition, Indonesia has a large domestic market for fish, with fish being an important source of protein for the population. There is also potential for Indonesia to increase its exports of fish, particularly to countries in the Asia-Pacific region.

To achieve this, however, Indonesia will need to address a number of challenges, including overfishing, illegal fishing, and poor management of aquatic resources. It will also need to invest in infrastructure and technology to improve the efficiency and competitiveness of its fisheries sector.

Overall, Indonesia has the potential to become a top player in the global fish market, but this will require significant effort and investment to overcome the challenges facing the sector.

Source:

https://data.worldbank.org/indicator/ER.FSH.PROD.MT?locations=ID

https://www.worldbank.org/en/news/press-release/2021/03/25/sustainable-ocean-economy-key-for-indonesia-prosperity

https://blogs.worldbank.org/eastasiapacific/four-strategies-blue-economy-indonesia-reflections-oceans-prosperity-report

https://openknowledge.worldbank.org/bitstream/handle/10986/35377/Oceans-for-Prosperity-Reforms-for-a-Blue-Economy-in-Indonesia.pdf?sequence=1&isAllowed=y

http://www.seafdec.org/country-trade-indonesia/

https://www.dw.com/en/sustainable-fishing-by-2025-what-is-the-current-situation-in-indonesia/a-60134067

https://jagalaut.id/dampak-overfishing-di-indonesia-bagi-nelayan-kecil/

https://www.worldbank.org/en/news/feature/2021/06/07/conserving-oceans-in-the-eastern-seas-of-an-indonesian-archipelago

https://datatopics.worldbank.org/sdgatlas/archive/2017/SDG-14-life-below-water.html

https://dataindonesia.id/sektor-riil/detail/ekspor-perikanan-indonesia-capai-13-juta-ton-pada-2020

https://www.fao.org/fishery/docs/DOCUMENT/fcp/en/FI_CP_ID.pdf

https://www.fao.org/figis/pdf/fishery/facp/IDN/en?title=FAO%20Fisheries%20%26%20Aquaculture%20-%20Fishery%20and%20Aquaculture%20Country%20Profiles%20-%20The%20Republic%20of%20Indonesia

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