Application of Global Value Chains to Seafood Sustainability: Lessons from the mahi mahi industries of Ecuador and Peru

Abstract

Fish products have become the most traded food commodities worldwide but wild fish stocks face ever-increasing pressure from rising demand (Smith et al., 2010). Over 75% of the world’s fisheries are currently either fully or over exploited (FAO, 2014). Developing sustainable fisheries is critical if seafood is to remain available for future generations. Global Value Chain (GVC) analysis frames these challenges holistically by linking global and local scales in order to elucidate operations and relationships throughout the international supply chain. In this study we employ the GVC framework to analyze the production of mahi mahi (Coryphaena hippurus) from Ecuador and Peru that is exported to the United States. Information was collected from stakeholder interviews and analyzed in conjunction with trade and production data. This information was then used to construct product flow patterns, characterize governance structures, and provide insights for potential economic and environmental improvements. The importance of mahi mahi as an export commodity to small-scale fishers in developing countries combined with its highly migratory life history typify many of the challenges facing modern global fisheries. Peru and Ecuador together produce the highest volumes of mahi mahi globally. Nearly 60% of all mahi mahi imported into the United States comes from these two countries. In this analysis, we examine global trends in production and trade and track the two main product forms of mahi mahi—fresh and frozen—through the supply chain. This study also examines the transactions between actors in the supply chain and the private and public institutions acting upon them. Government regulations for fisheries, human health and safety, as well as international standards exert control at each level of the supply chain. Recently sustainability has become an additional criterion guiding the sourcing and sale of seafood. The US, one of the largest seafood buyers in the world, imports over 80% of its seafood. Private, market-based initiatives have emerged as a means of improving seafood sustainability in areas outside US fisheries management. The most prominent of these programs is the Marine Stewardship Council (MSC), which aims to create demand-driven premiums or preferences for certified products. Motivated by their substantial shares in the US market, Ecuador and Peru are undergoing Fishery Improvement Projects for their mahi mahi fisheries, ultimately aimed at attaining MSC certification. Through an analysis of the governance structures our study examines the influence of various actors within the value chain. We thereby determine which actors hold the greatest leverage to affect changes regarding the decision-making and enforcement of sustainability. Adoption of initiatives that engage in more sustainable seafood sourcing by retailers in the United States creates pressure downstream to implement sustainability standards. Large companies and supply chain segments that are highly integrated can exert more power through the products they buy and sell on downstream supply chain actors. The Peruvian and Ecuadorian mahi mahi fleets are largely comprised of informal networks of artisanal fishers with relatively low technological capabilities. This scenario poses challenges to the effective implementation of private standards and fishery regulations. By contrast, processing plants exert a high degree of control over the supply and production of fish, better positioning them to implement or enforce sustainability measures. Our study recommends improvements for the industry’s environmental and economic outcomes. We do so by evaluating the position of both Ecuador and Peru in the global market and their progress on pre-existing sustainability programs. These include discussion on the importance of sustainable and innovative financing tools for market-based initiatives as well as the need for increased transparency and coordination. Our recommendations, informed by a comprehensive understanding of the value chain, may prove useful to industry leaders and environmental organizations interested in improving sustainability practices.