Private fish exporters raise concerns over MIFCO subsidy
Complaints like not being able to catch fish, not getting ice to store fish and not getting the same price for fish are always heard from fishermen.
Maldives Seafood Processors and Exporters Association (MSPEA) on Sunday sent a letter to the parliament expressing concern over the government's proposal in the 2023 budget to continue providing subsidy to state-owned fish company MIFCO.
Requesting that the letter be shared with the budget review committee, the association requested that the subsidy given to fishermen be amended as is proposed now and that subsidy should be given to all fisheries companies without discrimination.
The letter stipulates:
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As per the government's policy, MIFCO procures fish at a price lower than the market rate in order to provide the equilibrium price to fishermen; MIFCO exports fish at a price that is lower than the market price, causing loss major to the company.
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Government provides financial assistance to MIFCO in the form of 'cash flow injection' to make up for this loss; MIFCO’s losses will be compensated by the government's subsidy.
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Private companies doing business in different markets of the fisheries sector do not receive such financial support; they have been directly affected, cash flow to buy fish has reduced and things have reached a point where employers are unable to manage expenses.
"While this is the case, if the government's budget for 2023 also proposes an indirect subsidy to provide financial assistance to MIFCO, the result is that private sector companies will have to bear the negative impact of the economic depression that has taken place in the market due to MIFCO buying and selling fish at a price higher than the market rate," the letter read.
Noting that the Russia-Ukraine war has resulted in higher oil prices and increase in the purchase price of fish by MIFCO this year irrespective of market rate, it said:
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If MIFCO is given subsidy at this juncture, it will lose space for more competitive business in the fishing market.
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Over the years, private companies will lose out on the gains made in exporting local fish to overseas markets.
"In addition, it is of the considered view that the government's policy of subsidising MIFCO in lieu of its losses is inconsistent with existing legal systems and has unfair consequences," the letter said.
With this, the MSPEA pointed out:
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As per policy, the benefit is only for MIFCO fishing vessels; other fishing vessels do not benefit.
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If the government's objective is to improve the condition of fishermen, then all fishermen should benefit from such a policy through equal policies without discrimination.
Keeping these concerns in mind, it has sought a solution to the issue when the National Budget for 2023 is passed. It also demanded that a meeting be arranged with members of parliament's budget committee to discuss the issue further.
Fishermen in L. Manadhoo have been protesting on Saturday and Sunday, alleging that Horizon Fisheries, a company owned by one of the coalition partners and business tycoon Gasim Ibrahim, has not paid for the fish weighed in at the factory in the island amounting to MVR 21 million.
Complaints like not being able to catch fish, not getting ice to store fish and not getting the same price for fish are always heard from fishermen.
