ECONOMYNEXT – Sri Lanka has initiated a project to raise milk fish (ChanosChanos) for use as bait by long line fishing vessels under a private public partnership, with around 4,000 tonnes of bait being imported a year.
The cabinet of minister had approved a proposal by the Minister of Fisheries & Aquatic Recourses Development Mahinda Amaraweera to lease an 12.14 hectare area owned by Sri Lanka Aquaculture Development Authority in Bangadeniya, the state information office said.
Aquaculture Development Authority and an association of fishermen representing multi-day fishing boats will grow the fish under intensive aquaculture.
The proposal however was couched in language that had led to exploitative domestic production industries that sell overpriced goods under cover of import duties.
The proposal said Sri Lanka's long line fishing vessels uses about 7,000 tonnes of bait, but only 3,000 tonnes of fish such as milkfish and salaya were available domestically.
The balance was imported.
The proposal said that imports of squid and milkfish cost the equivalent in 1,000 million rupees of foreign exchange. It also claimed and that local culturing will also be cheaper and it will improve export competiveness.
‘Saving foreign exchange' is a word used by rent-seeking domestic production businesses in Sri Lanka that sell overpriced goods under import duty protection.
Unlike export oriented industries the building of ‘import substitution' domestic industries in the past however had not led to cheaper products.
Such industries lobby for import duty protection to exploit customers with high prices.
Several politically connected tinned fish companies already exploit final consumers. Some ‘domestic production pharmaceutical firms are also by-passing competitive procurement and targeting the state health budget.
However import duty protection for inputs reduce the competitiveness of final products in export markets, through a process economists call ‘effective taxation.' Sri Lanka's weak overall exports have been partly due to effective taxation.
The bait will be used in long line vessels fishing for bill fish which are exported. (Colombo/Dec09/2017)