ACRJ-Fishing in Troubled

ASIAN CASE RESEARCH JOURNAL, VOL.
21, ISSUE 1, 149–174 (2017)
ACRJ
Fiamchi: Fishing in Troubled Waters
by 117.241.159.188 on 07/09/18. Re-use and distribution is strictly not permitted, except for Open Access articles.
This case was prepared by

Assistant Professor Atul As he glanced at his phone and noticed that it was 5.00 am
Arun Pathak and Associate
Professor Manish Singhal on 25 September 2014 already, Abhijeet Naik decided that
Asian Case Res. J. 2017.21:149-174. Downloaded from www.worldscientific.com
of XLRI Jamshedpur, India,

as a basis for class discus-
he needed a strong cup of coffee to clear his mind. He had
sion rather than to illustrate spent the entire night in discussions with Amit, Saumitra,
either an effective or ineffective
handling of an administrative and Alok, cofounders of Fiamchi, a fisheries venture that they
or business situation. Some of had started together. They had focused on finalizing the busi-
the figures have been changed
to ensure confidentiality. ness model for the fisheries project that they were planning
to launch before the end of October 2014. However, their dis-
Please send all correspon-
dence to Assistant Professor cussions had remained inconclusive. While the opportunity
Atul Arun Pathak, XLRI looked attractive to them, there were too many challenges to
Jamshedpur, XLRI Campus,
CH Area (East), Jamshedpur, which they needed to find solutions, and they needed to do
Jharkand State, 831001, India.
E-mail: atul@xlri.ac.in
so quickly. If not, their entire venture was in danger of falling
apart before it even commenced commercial operations.
BACKGROUND
Abhijeet Naik, Amit Khirwal, Saumitra Verma and Alok Jain

had met only a month ago as participants of a six-month
long, residential, certificate program in entrepreneurship
being held at a leading management institute in Jharkhand,
India. Abhijeet recalled,
“It was fortuitous that we were allocated hostel rooms
that were adjacent to each other. We had hit off really well
from day one and had quickly become good friends even
though we came from very diverse backgrounds.”
Abhijeet, who was 37 years old, had a master’s degree in
fishery science and aqua culture and was a serial entrepre-
neur based out of Goa. While his educational background
© 2017 by World Scientific Publishing Co. DOI: 10.1142/S0218927517500055
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150 ACRJ
was in fisheries, he had been working in the higher educa-

tion sector for nearly 10 years and was running his own
business in training aspirants for competitive exams. He had
also recently taken a lake in Goa on long term lease with a
view to start an outbound learning and tourism related
venture there in future. Amit, who was 30 years of age, and
a chartered accountant, had a thriving family business in
retailing of garments in Jamshedpur. He had completed his
education a couple of years ago and was looking to explore

other opportunities rather than directly joining his family
business.
Saumitra, who had just turned 33, had an undergrad-

uate degree in environmental science and an MBA degree,
belonged to a wealthy family of doctors in Jamshedpur.
Saumitra had started a software development company called
E-bellwethers that employed 15 engineers and was keen to
be part of a “less technical” business. Alok, who at 24 years
of age was the youngest of the group, had an undergraduate
degree in biotechnology and belonged to a family that owned
a chain of retail shops that sold spectacles, sunglasses and
eye-care products. Alok was also keen to branch out of the
family business and start a venture of his own.
Bonding over management case discussions and group
assignments, the group had hit upon the idea of starting a
business together. They felt that they had the opportunity to
do all the groundwork simultaneously with the six-month
course that they were attending. Amit had already started
exploring the opportunity of starting a fisheries business in
Jharkhand even before he had joined the entrepreneurship
course. He laid out the basic idea to the others one night.
Amit recalled,
“Over the last few months, I had done some groundwork
that would enable me to diversify from my current family
business. While exploring various opportunities I had come
across fish production as a possible business idea. My
initial inquiries suggested that there was a good demand
for fish in Jamshedpur. However, I had not pushed
forward on my own. There were too many unknowns that
I had no answers to, and I did not think that I could do
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FIAMCHI: FISHING IN TROUBLED WATERS 151
this all alone. Meeting Abhijeet, Saumitra and Alok and

our frequent discussions on embarking on a new venture
together had rekindled this project in my mind. That is
why I brought up this idea in one of our discussions.”
To move forward on the venture, the group of friends estab-
lished a partnership firm which they named “Fiamchi”. Each
of them held an equal share in the firm.
MARKET FOR FISH IN JAMSHEDPUR

Jamshedpur, a city located in the southern part of the state

of Jharkhand, was the largest and most industrialized city in
the state. It had a cosmopolitan population with its average
income level and education level indicators being much
better than the rest of the state (refer to Exhibit 1 for further
information about Jamshedpur city).
Abhijeet, Amit, Alok and Saumitra were considering
Jamshedpur as the first market that they hoped to enter.
Accordingly, they had informally carried out some basic
market research. Talking about the Jamshedpur market,
Abhijeet stated, “Our market research indicated that the daily
demand for fish in Jamshedpur was about 10 tons, of which,
the Pangasius1 breed of fish accounted for about 50–60%
demand. Another 2.5 tons per day was consumed in the areas
immediately surrounding Jamshedpur city.”
According to an estimate provided by the state gov-
ernment of Jharkhand, about 60–65% of the total population
of the state consumed fish habitually. However, the per
capita consumption of fish was only about 7–10 kilograms
per annum, which was much lower than the national average.
In Jharkhand, an estimated 115,000 tons of fish was con-
sumed annually,2 wherein about 62% of the supply came
1 Pangasius:A breed of fish that belonged to the catfish family and was a native of
Thailand and Vietnam. It grows to full size in about six months and an adult fish
weighs about 1.0 kilograms. In recent years, this fish had been successfully cultivated
in neighboring states such as Andhra Pradesh and Chhattisgarh.
2Website of Jharkhand Government, www.jharfish.com. Retrieved September 29,
2014.
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152 ACRJ
from Jharkhand itself and the rest of the supply was mainly
from the states of Andhra Pradesh and West Bengal (refer to
Exhibit 2 for further information about Jharkhand state).
Cultural factors also affected the demand for fish.
Amit explained, “While the demand for fish was distributed
almost uniformly across the rest of the year, the demand fell
drastically in the month of Shravan according to the Hindu
calendar (spread over July–August) as many Hindus did not
consume non-vegetarian food during this period. Funnily

enough, the selling price of fish also went up by 30–50%
during this period because supply from Andhra Pradesh was
severely limited during the month of Shravan.”

Explaining how fish was sold in Jamshedpur at present,
Abhijeet added, “There were four main agents in Jamshedpur
who controlled the sales of fish. All the fish producers needed
to inform them in advance of their delivery schedule. These
agents took delivery of the fish and paid the producers,
sometimes on a cash basis and sometimes on credit. The
main wholesale market was located at Sakchi in Jamshedpur.
Retailers purchased their requirements from the wholesale
market in Sakchi.”
Giving an indication of the competition in the local
market, Amit added, “Our market research revealed that in
the context of the Jamshedpur market, the most organized
were the producers from Andhra Pradesh. Local producers
were mainly unorganized. In addition, the department of
fisheries of the government of Jharkhand also supplied about
3–4 tons of fish daily to the market in Jamshedpur.”
THE VENTURE
Amit explained the basics of his business idea to Abhijeet,

Alok and Saumitra. He stated that at present the city of
Jamshedpur relied on other states for its demand for fish.
Whatever local supply was available came mainly from
fishermen who used fishing as a source of livelihood and sus-
tenance. There were hardly any organized players locally that
were involved in fish production using modern techniques.
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Amit stated, “Given India’s poor road infrastructure and the

complex set of rules and permits required, a lot of delays
were possible when moving goods from one state to another.
These would be crucial drawbacks in a business dealing with
a product as perishable as fish. My assumption, therefore,
was that transporting fish over long distances must be expen-
sive when compared to selling local produce. Although, I
don’t know much about the technical aspects of fish produc-
tion, I had a hunch that there existed a market opportunity in

this space that could be exploited.”
Although Abhijeet had never worked in the fish pro-
duction industry, his technical education in this field was

useful for the group to understand the basics of this industry.
Explaining how the business was actually carried out,
Abhijeet stated,
“The fisheries business comprised of two fairly distinct
value chains. Various stakeholders were involved at various
stages of the value chain. Firstly, there was the fish produc-
tion or capture chain. In this, the main participants were
the fisherman and all those who supplied inputs to him.
The actual production and capture of fish was carried out
by fishermen. In India, these were either of the subsistence
variety or very small businesses. The other participants
included suppliers of nets, boats, fisheries equipment, fish
food, fish seeds,3 veterinary services, owners of water bodies,
providers of labor, etc. The government agencies and
various NGOs played a key role in R&D, infrastructure
development, skill development, building awareness about
modern techniques, and providing subsidies for various
technological improvements and capital expenditure.
Secondly, there was the post production phase which
involved freezing, processing and packaging the fish, trans-
portation, warehousing, wholesale, retailing, etc. There were
a variety of middlemen involved in this chain. These were
mainly active in the post production/capture phase and
played the role of auctioneers, wholesalers and transporta-
tion service providers.
3“Fish seeds” are the fertilized eggs of fish. Fish seeds have extremely high mortality
rates.
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154 ACRJ
The first phase was relatively less organized and was

mostly carried out as a micro or small scale business in
most parts of India. The second phase was relatively more
industrial in nature — except for the retailing stage, which
was again rather unorganized.”
One option for Fiamchi was to set up a fish seeds hatchery.
Abhijeet stated, “In the fisheries business, access to high
quality fish seeds was a critical success factor. Based on our
discussions with the District Fisheries Officer (DFO), we esti-

mated that if the entire water area of Jharkhand state was
utilized for aqua-culture, then at least 1000 million fish seeds
would be required. To achieve this nearly 4000 million fish

spawn4 would be required.” However, making the fish seeds
available to every fish-farmer in the state required a complex
distribution chain.
Another option was to take part in each stage of the
fish rearing value chain. This could be achieved by leasing
out a tank from either the government or from a private
owner. The fish rearing cycle would start from procurement
of spawn from the department of fisheries. The spawn would
then be raised to the fry-stage fish.5 After selling some pro-
portion of the fry-stage fish, the remainder would be grown
to the next stage i.e., to fingerlings.6 Again, some propor-
tion of the fingerlings would be sold commercially and the
remainder would be grown out to the full maturity stage.
Explaining the economics of growing fish in a perennial,
leased, private tank of about 1 acre area, Abhijeet stated,
“We estimated that for a 1 acre area tank we would have
had to purchase about 2 million fish spawn at a cost of
4Fish spawn: Marine animals such as bony fish reproduced externally. This is
referred to as fish spawning. The female fish releases a very large number of unfertil-
ized eggs into the water. This occurs when the chances of fertilization of the eggs are
high and the conditions are suitable for the survival of the fertilized eggs.
5Fry-stage fish: Juvenile fish develop through various stages from birth to adulthood.
When the baby fish have developed to a stage where they can feed themselves and
their yolk sac completely disappears is referred to as fry-stage fish.
6Fingerlings: In the development of fish from birth to adulthood, the fingerling stage
is the stage subsequent to the fry-stage fish. Juvenile fish are referred to as finger-
lings when they have developed scales and working fins. Fingerlings are typically
the size of human fingers.
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INR 6,000 per million spawn. The rearing took about

30 days and incurred a cost of INR 200 per day for feed.
We would have required 2 laborers for the entire 30 days
period at INR 150 per laborer per day. Apart from this
we expected miscellaneous expenses of INR 5000 for each
30 day cycle. From spawn to fry stage the survival rate
is about 35% and the weight of fry-stage is such that we
would get about 1400 fry-stage fish per kg. Of these fry-
stage fish we would have sold about 70% and retained the
rest for growing out to the next stage. Fry-stage fish were
sold at a price of about INR 175 per kg.
The fry-stage fish grow to fingerling-stage in about 45
days. For this stage we would have incurred INR 150 per
day for feed cost. We would have needed 1 laborer for 45
days and an additional laborer for the last 15 days during
harvesting. We also estimated miscellaneous expenses of
INR 7,500 for the 45-day cycle. From fry-stage to finger-
ling stage, the survival rate was estimated to be about 75%.
Fingerlings could be sold in the market for about INR
400,000 per million fingerlings.
In the next stage we would have stocked the 1 acre
tank with about 2,000 fingerlings. The cycle to rear finger-
lings into fully grown fish is 90 days long. We would have
needed 1 laborer for 90 days and an additional laborer for
the last 15 days during harvesting. Feed cost for this cycle
was estimated to be INR 200 per day. We also estimated
miscellaneous expenses of INR 15,000 for the 90-day cycle.
The survival rate of fingerlings to fully grown fish is 80%.
We estimated that our fish would be sold for a price of
about INR 100–INR 125 per kg.”
An alternative to rearing fish in open tanks was to utilize the
new technology that the government was trying to promote
and grow the fish using the cage farming method. Using this
technique, large cages of dimensions 18 feet in length, 12 feet
width and 8 feet depth were constructed out of polymers,
metal and wire mesh. These were placed in water bodies in
such a way that they were held in position with about 6 feet
immersed in water. Using this method, the fish remained
within the cage throughout their lifecycle and thereby farmers
would be able to feed them, guard them and harvest them
with ease. The government provided a very high subsidies
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156 ACRJ
to cover the upfront cost of these cages and also provided

training to fishermen who wished to learn this new tech-
nique of fish rearing. Explaining the economics of growing
Pangasius breed of fish in a reservoir using the cage farming
method, Abhijeet stated,
“We had detailed discussions with the DFO and also with
the local fishermen. Four cages together was referred to as
a battery. The estimated upfront capital cost of a battery

with storage was INR 300,000. Of this cost the government
offered a subsidy of 90%. We would have had to spend
another INR 50,000 for installation of the 4-cage battery.
The cages were quite strong and had a life of about 10

years. In a reservoir we would have produced one batch
per year as the duration for which the fish were reared was
8–9 months. We needed to purchase about 3,000 fish seeds
per cage at the cost of INR 3 per seed. We were told that
the survival rate was about 80% and at the time of harvest
each fish would weigh between 900 grams to 1 kg. In addi-
tion, we needed to pay for labor costs. We needed about
240 man days of labor for growing the fish and an addi-
tional about 60 man days for harvesting the fish. Labor was
available in the locality at about INR 150 per man day. In
this method of fish culture, we required about 1.2 kg of fish
feed per 1 kg bodyweight of the fish. Fish feed was avail-
able at the cost of INR 30 per kg of feed. Over and above
these costs, we estimated miscellaneous expenses of about
INR 10,000 per battery. We estimated that despite market
fluctuations we would safely have sold our fish for a price
of about INR 90 to INR 100 per kg.”
STATUS OF FISH PRODUCTION IN JHARKHAND
The government of Jharkhand state recognized the impor-

tance of fisheries as an important employment activity that
provided employment and additional income to many poor
people. This sector was important because for each person
involved in fish capture and aquaculture activities, an addi-
tional three persons found employment in related secondary
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activities.7 In the state of Jharkhand, approximately 71,000

tons of fish was produced in 2013 mainly by small, unorga-
nized fish-farmers.8 Fisheries were also an important source
of employment for people engaged in related activities such
as boat making, manufacturing fishing nets, producing fish
seeds, transportation of fish to the market, and wholesale and
retail sale of fish.
The state had 80 fish farms that were owned by the
government. It had 19 privately-owned hatcheries and 12

government-owned hatcheries. The state government had set
up two training centers and one state level research center. In
all there were 312 fisherman cooperative societies that were

operational in Jharkhand and were registered with the state
government.
Jharkhand state was well suited for promoting fisheries
as the state was well endowed with inland water resources.
According to the animal husbandry and fisheries department
of the Jharkhand state government, the state had a wide
variety of water bodies that were suitable for fisheries. The
government controlled 15,496 tanks covering an area of
14,973 ha. Also, there were 85,849 privately-owned tanks
covering an area of 40,561 ha. In addition, there were 104
large reservoirs spread over an area of 94,000 ha, 148 small
reservoirs that covered 21,000 ha and 1,184 check dams
that offered a water area of 4,570 ha. In addition, the state
was endowed with nearly 1,800 kilometers of river length
flowing through it. The main rivers in Jharkhand were Koel,
Damodar, Brahmani, Kharkai and Subarnarekha.
Despite such an abundant level of water resources,
Jharkhand state only managed to produce 1,600 kg/ha per
year and lagged significantly behind the national average of
fish production of 2,150 kg/ha per year. Various reasons were
attributed for this low productivity level and these included
heavy siltation of old tanks, weed infestation, poor technical
support and untrained manpower. Another issue was that
7 H Sinha and A Kumar, 2013. Governance of Commons and Livelihood Security. Xavier
Institute of Social Service, Ranchi.

8Website of Jharkhand Government,
http://ah.jharkhand.gov.in/?ulink=fish/overview.htm. Retrieved September 29, 2014.
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158 ACRJ
in Jharkhand, a large number of the water bodies depended

exclusively on the annual rainfall and went dry whenever
rains were scant.9
In 2013, inspired by the success of neighboring states
such as Andhra Pradesh and Chhattisgarh in cultivating
Pangasius breed of fish in floating cages and in open ponds,
the department of fisheries of Jharkhand state had also started
encouraging production of this breed.10 The Jharkhand gov-
ernment had invested in efforts in cultivating the required

fish seeds and hoped that large scale production of this
breed of fish would be possible in many parts of the state.
According to Mr. Sahmbhu Prasad Yadav, a DFO, “We have

observed a growing demand for Pangasius fish for which
we have started its cultivation here”.11 According to Mr.
Shambhu Yadav, the Jharkhand government had started
Pangasius production in 72 cages in the Tenughat dam and
two cages in the Konar dam as a start. Also, there were plans
to start cultivation in 28 government-owned lakes and 120
private ponds soon. Mr. Yadav stated that they expected to
cultivate about five tons of Pangasius fish per cage. According
to Mr. Yadav, “In six months, the fish will be ready to be sold
in the market. Pangasius production would improve financial
condition of the fish farmers in the area as it was considered
as Any Time Money (ATM) for them.”
GOVERNMENT SUPPORT FOR FISHERIES
On its part, the state government had set itself an aim of

helping make Jharkhand state self-sufficient in meeting the
demand for fish. To this end, various developmental schemes
were launched to help fish farmers in the state. These
schemes aimed at providing financial assistance and subsidies
9 Agricultural Finance Corporation Ltd. 2014. Impact Study on Fisheries Development

Programs in Jharkhand.
10Jharkhand Gears Up to Produce New Variety of Fish,
http://timesofindia.indiatimes.com/city/ranchi/Jharkhand-gears-up-to-produce-new-
variety-of-fish/articleshow/20695048.cms. Retrieved October 07, 2014.
11Jharkhand Gears Up to Produce New Variety of Fish, op.cit.
S0218927517500055.indd 158 19-06-17 2:19:27 PM

to fish farmers for a variety of purposes.12 An overview of the

important schemes of the government is provided in Exhibit 3.
The government also set up fish farms and aqua parks used
for providing fish seed around the year as well as for dem-
onstration and training purposes. As seen in Exhibit 4, in
order to provide support and develop fisheries in Jharkhand,
the state fisheries department had organized itself under
the Director (Fisheries). The Director (Fisheries) had a team
of one Joint Director, and four Deputy Directors (one each

for training, headquarters, north region, and south region).
In addition there was an Assistant Director (Research) and
23 DFOs.
OPERATIONAL ISSUES
The Fiamchi team was aware that the success of the new ven-
ture depended upon them being able to design a business model
that suited the local operational conditions. Alok mentioned,
“Of all the aspects of the new business that we were grap-
pling with, we found the social issues to be the toughest to
handle. When we spoke to the DFO, he had also raised this
as possibly being our biggest problem.”
The main issue was that most water bodies in Jharkhand
state that were suitable for setting up a fisheries business,
were surrounded by tribal villages that considered the lakes
and tanks as common property. They depended on these as
a source of their livelihood and also used water from these
lakes and tanks for their daily household requirements. The
access roads leading to these tanks or lakes were through
these tribal settlements or villages. Saumitra brought up the
issues that were troubling him from the very beginning of
this venture. He stated,
“What would happen if we set up all the infrastruc-
ture and made investments for the fish seeds and feed
and then the local villagers blocked access to the tank or
12 Website of Jharkhand Government, http://ah.jharkhand.gov.in/?ulink=fish/

schemes.asp. Retrieved September 29, 2014.
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160 ACRJ
demanded compensation in some form or other? We were

dependent upon local villagers as labor for our project.
What if someone instigated them against our project and
stopped our labor supply? It was impossible to get youth
from urban areas or other parts of the state to come and
work on the fish farm. Even if we did find someone from
outside, the local villagers would make life hell for them
and they would not stay for long.”
Abhijeet, who was quite confident about the market potential

and technological adequacy of the project was not convinced
that these issues were insurmountable. He asked,
“Would it not be possible for us to seek police protection

so that our property is not damaged? After all, we would
be embarking on the project with Government subsidies
and technical support.”
Saumitra, recalled their meeting with the DFO and replied,

“The DFO had been very clear about this. The police had
very limited control on this region. In fact, there were parts
of the region that were under the de facto administrative
control of Naxalite separatists (refer to Exhibit 5 for further
details on the Naxalite problem in Jharkhand). These
Naxalite leaders illegally collected tax from the residents
and businesses and even administered justice and settled
disputes in areas under their control. The whole area was
such that the Naxalites could easily disappear into the
dense forests and escape capture by either the police or
the para military forces deployed there. For all you know,
they would knock on our doors from the first day of the
commencement of our business and we would have to
fulfill their demands and offer inducements to allow us to
continue.”
Amit echoed Saumitra’s sentiments and raised another issue,

“Besides, the tribal folk worshiped nature. We, therefore,
need to also consider the religious angle. What if their
religious beliefs did not allow us to cultivate fish using
modern technology and methods in lakes that they consid-
ered sacred? It was likely that they may get influenced by
their religious leaders and oppose our project.
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In general, tribal opposition to development projects

and industrialization in Jharkhand had been a recurring
theme. Even far back in 1990s the Koel Karo hydroelectric
power project had met with violent protests as it would
have submerged the sarna-sasan-diri (religious sites) of
the tribal communities.13 That proposal finally had to be
shelved by the government after eight tribals lost their
lives in the agitation. For the tribal people it was not about
money or compensation. After all, for them the forest land

and water resources were the heritage of their ancestors
and part of their religious and cultural identity.
Remember how even in the year 2005, Shibu Soren, the
chief of the Jharkhand Mukti Morcha, a leading regional

political party, had called on tribal people of Jharkhand to
be prepared to give up their lives to protect their water,
forest and land.14 The situation was still the same in 2014
where if you were perceived as trying to grab water, forest
or land resources of the tribal people they were likely to
take up arms against you.15 Over the years the tribal folk
of Jharkhand seemed to have lost faith in the promises of
development. This was because they felt they had repeat-
edly been cheated by the government officials, industrial-
ists and middlemen.
What if someone raised rumors about our project being
harmful for the water body and the tribal villagers believed
these rumors? It was very easy for the locals to sabotage
our project. Just a bottle of any harmful chemical thrown
into our cage would have killed all our fish crop. The DFO
had cited a few such past cases, hadn’t he? At the begin-
ning of the project we were unable to calculate the prob-
abilities of such an eventuality.”
Alok brought up other problems that they faced,
“None of us was from a tribal background and so we
could not understand all the cultural issues involved. It
13 M Basu, 2013. The Voice of Jharkhand. Economic & Political Weekly, Vol 23. http://
www.epw.in/web-exclusives/voice-jharkhand.html. Retrieved June 21, 2015.
14Jharkhand tribal groups up in arms against projects, http://www.rediff.com/
news/2005/nov/15jhar.htm. Retrieved June 21, 2015.

15Exclusive: Deep in the Torpa forests, tribals reject democracy, polls, http://www.
news18.com/news/jharkhand/assembly-polls-fear-of-naxals-keeps-development-
away-from-tribal-areas-642305.html. Retrieved June 21, 2015.
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162 ACRJ
was difficult for us to even communicate with the tribal

villagers as we did not know their dialects. We needed an
intermediary who could connect us to the locals. Local pol-
iticians had a huge influence on how the tribal folk reacted
to outsiders. We would have to invest time and money
to build influence with the local politicians if we were to
succeed here. None of us had any connections locally that
we could have leveraged immediately. Besides, with elec-
tions to the state assembly coming up in the near future we

would have had to hedge our bets and build relationships
with all the larger parties. After all, we had no idea which
one of them would win the upcoming elections and be in
power for the next five years.”

Adding on to the social and political issues, Amit summa-
rized the issues related to the inherent nature of the product,
“The problem was that fish was a product that was fragile
and perishable by nature. We needed to maintain a con-
stant watch on the tanks to prevent pilferage and sabotage.
We had to frequently test the water for various parameters
and prevent contamination. The fish needed to be provided
feed at appropriate frequency. Once it reached maturity,
the fish needed to be harvested within a short timeframe
for us to gain maximum value out of the venture. Any
disruptions in any of these operations would lead to
disastrous consequences.”
Having heard all these issues that were being raised rapidly,
Abhijeet was worried that his partners would form a com-
pletely pessimistic view about the project without giving it a
fair chance. He argued,
“Rather than considering these as insurmountable issues,
we should put our brains together and ensure that we
found solutions to them. As a start, we ought to have
made a list of our options. I saw that there were three
possible approaches for us. First, we could approach this
venture purely as a business. Second, we could consider
this as a social venture that was for the uplift of the local
community. And finally, we could ally with a large orga-
nization and carry out our venture under the aegis of
their corporate social responsibility (CSR) program. Each
approach had its own pros and cons.”
S0218927517500055.indd 162 19-06-17 2:19:27 PM

ALTERNATIVE APPROACHES
Having identified the three alternative approaches that they

could consider, Abhijeet explained further,
“No matter what we did, we had to involve the local com-
munity in our venture. What would vary was the extent
of involvement and the nature of the relationship. Based
on this, we could influence the nature and degree of risk

involved in our venture. The way we engaged with the
local community was also a factor in determining the long
term survival and sustainability of the venture.”
The first approach was to treat this purely as a business

venture. Amit explained, “All four of us were outsiders. We
neither appreciated the local issues very much nor did we
have a great interest in them. However, given that our entire
business depended on whether or not the locals supported it,
we gave it a lot of attention.” Saumitra added, “We quickly
understood that the business venture needed the support of
the local community. We thought that one way to gain this
support was buying peace.” They were certain that some of
the local families would benefit from gaining employment in
their venture. At least these families would be on their side.
The issue was how to handle any opposition or issues raised
by those who they had not employed. Abhijeet stated,
“We were confident that this was a high margin venture.
Therefore some of the profits could be used to buy peace.
We made a list of the people who had to be paid off to be
our supporters in case a need for such support arose. First,
the local village leader or politician would have to be on
our side. In matters where our venture was threatened
by violence, we would need the support of the nearest
police station. In India, timely intervention by the police
was not always assured unless some gratuitous payments
were made from time to time. We also needed to identify
any religious leaders who influenced the beliefs and senti-
ments of the local population and had to make sure that
they were on our side. For this we had to understand their
requirements and provide for these.
The government department of fisheries was also
important for us. We were dependent on the DFO for fish
S0218927517500055.indd 163 19-06-17 2:19:27 PM

164 ACRJ
seeds, various clearances, financial subsidies and technical

knowhow. It was not clear to us whether we would get
these as a matter of course or whether any bribes would be
required to get these.”
Considering all these issues, Abhijeet summarized their situa-
tion as:
“When we made this long list of “beneficiaries” of our
venture, it left us slightly unenthusiastic. We were not clear

whether after adjusting for all these payments our venture
had enough profits for us to carry on. Also, as we made
investments into the venture, we would get in a poorer
bargaining position with all these informal stakeholders.

They would know that without their support we would be
ruined and hence they could squeeze more out of us at a
later stage. We were yet to figure out what contracts could
be put in place with each of these parties and how best
these could be enforced.”
Recalling their conversation with the DFO, Alok explained
that aligning with the government agency had certain advan-
tages. He stated:
“One route that looked promising to us was based on a
passing remark by the DFO. He had mentioned the pos-
sibility that we could set up our batteries of cages in the
same lakes where the government department of fisheries
was running their training and demonstration projects.
These lakes were certainly large enough to accommodate
as many batteries that we wished to put up in the initial
stage of our venture. If we were located in the same lake
as the government projects then access to these could not
be blocked easily by the local community. Any obstruction
to our venture would mean that the government’s projects
would also suffer and then the government officials would
actively step into resolve the issues. Also, the government
carried out many developmental activities in the villages
that surrounded their projects. By co-locating our venture
with the government projects, we would gain from any
goodwill that the government efforts generated among the
community.”
There were certain disadvantages of being collocated with
the Government projects. Amit explained, “We heard all the
S0218927517500055.indd 164 19-06-17 2:19:27 PM

time about corruption in the government departments. If we

were located next to them then they would certainly be able
to keep an eye on us. If we did well, they would surely be
tempted to ask for their share of the profits. Since we relied
on the government department for various permissions,
licenses and also for our basic raw material, our bargaining
power would be very limited”. Saumitra added, “Don’t forget
that the government representatives are, more often than not,
the target of Naxalite violence. If we come to be associated

with them, would it not expose us to greater danger?”
Another possibility was that Fiamchi conceived the
venture as a social venture for the uplift of the local com-

munity. To do so they would have to set up a social service
focused non-governmental organization (NGO). The aim
would be to empower the people of the region and provide
them with a source of livelihood and development. This
involved grassroots level work with the local community and
required the NGO to work hand-in-hand with various gov-
ernmental agencies also working for the development of the
region. Abhijeet explained,
“All of us knew that this was often the model with the best
chance of success in rural India. The Amul brand of milk
products that came out of the Gujarat Cooperative Milk
Marketing Federation16 was a prime example of this. After
all what Dr. Kurien had started in Gujarat was a people’s
development movement. Now it was a rich federation with
a lot of money. However, the origins were humble there
and the intention was social service and uplift of poor
dairy farmers. We also realized that it had taken years and
years for the transformation to happen in Gujarat. In com-
parison Jharkhand was a much more underdeveloped state
and the local problems here were much more complicated.
At least in Gujarat they did not have to deal with the
16Amul and GCMMF: Amul is an Indian dairy brand, which was founded in 1946.
It is headquartered in Gujarat state and managed by the cooperative body called
Gujarat Cooperative Milk Marketing Federation (GCMMF). Having been set up
to reduce the exploitation of milk producers by milk traders and intermediaries, it
is one of the largest success stories in the field of cooperative dairy farming in the
world. It helped India become one of the largest producers of milk in the world.
Today Amul is jointly owned by over 3 million milk producers.
S0218927517500055.indd 165 19-06-17 2:19:27 PM

166 ACRJ
Naxalite issues. Also the population of milk producing

farmers there was not of tribal origin.”
Amit confessed, “We were not sure about this route. None
of us had a genuine interest in social service. Neither did
any of us have roots in the local community of Jharkhand. If
at all we did this, it would be with a hidden profit motive.
We were unsure whether this façade could be sustained for
a long time. Also, we were more worried about what would

happen if and when our real motive for the venture would
get exposed. Surely, facing the wrath of hundreds of villagers
and their political leaders was not what we were bargaining
for. In general, we were unsure whether we would be able

to sustain our interest for a long term if we were unable to
make profits for ourselves from this venture.”
The fourth approach that they thought of was to get
into a formal or an informal alliance with the corporate social
responsibility (CSR) department of a large corporate such
as Tata Steel or Tata Motors that was active in carrying out
development work in the areas surrounding Jamshedpur.
Amit explained,
“We were aware that all the large Jamshedpur-based cor-
porates had very active CSR cells. They were involved in
a variety of developmental initiatives in the surrounding
areas of Jamshedpur. These were not for profit initia-
tives and focused on various needs of the local population
including education, healthcare, employment generation,
skills development, and promotion of small scale business
and entrepreneurship. These CSR activities were mostly
viewed favorably by the local population. However, when-
ever they ventured into new territories they were initially
viewed with suspicion by the locals. We could learn a lot
from the CSR cells as to how to approach the local com-
munity and develop their trust. Also, if we went as a joint
effort with the CSR cells we would have easier access
to the areas where they were already active and well
entrenched. However, we were not sure as to why these
large corporate entities would get involved with us. Our
best bet was if Saumitra used his family’s business connec-
tions to get us into initial discussions with the CSR cells.
Also, the other issue was that the CSR initiatives were
S0218927517500055.indd 166 19-06-17 2:19:27 PM

not aimed at making any direct financial profits while we

were motivated by a profit orientation. Therefore, we were
worried that our approach may not be compatible.”
CONCLUSION
The founding team of Fiamchi realized that time was running

out for them. If they did not start soon, they would miss this
year’s production season which would mean that their entire
project would be set back by one year. However, without
finding an appropriate solution to the issues that they had

identified, making financial investments may be a strategic
blunder that they could ill afford.
S0218927517500055.indd 167 19-06-17 2:19:27 PM

168 ACRJ
Exhibit 1
Information about Jamshedpur City
Jamshedpur was the most industrialized and largest city in the state
of Jharkhand. It was a city founded by the late Jamshedji Nusserwanji
Tata. The city of Jamshedpur had developed around the factories of
large Tata group companies such as Tata Steel, Tata Motors, Tata
Tinplate and nearly 1,200 other small and medium companies that
were suppliers to these companies. According to the 2011 census,

Jamshedpur had a population of about 1.34 million and it ranked 36th
among 53 cities in India that had a population greater than 1 million.
The city was well planned and was counted among the cleanest cities
of India. People of Jamshedpur mainly spoke Hindi, English, Bengali

and tribal languages such as Santali and Ho were also popular. The
city was well connected by road and railway to other large cities of
India. However, it lacked a commercial airport and the nearest air
connectivity was from Ranchi, the capital of Jharkhand, nearly 130
kilometers away.
Sources:
1. Website of Jharkhand Government,
http://jharkhand.gov.in/web/guest/facts&figures. Retrieved October 6, 2014.
2. http://www.tatanagar.com/index.php/about-city/introduction-.html.
Retrieved October 6, 2014.
3. http://en.wikipedia.org/wiki/Jamshedpur. Retrieved October 6, 2014.
S0218927517500055.indd 168 19-06-17 2:19:28 PM

Exhibit 2
Information about Jharkhand State
Jharkhand, literally meaning “land of the jungles”, was carved out of

the state of Bihar in the year 2000. Jharkhand shared its boundaries
with the states of Bihar, Uttar Pradesh, Orissa, Chhattisgarh and
West Bengal. The city of Ranchi was the capital of Jharkhand with
Jamshedpur, Dhanbad and Dumka being other important cities. From
an administrative perspective, the state of Jharkhand had 5 Divisions,

24 Districts, 38 Sub-divisions, 260 Blocks and 4,562 Panchayats.
Jharkhand was rich in natural resources and it was estimated that
about 40% of the mineral resources of India were in Jharkhand.
According to the 2011 census estimates, Jharkhand state had a total

area of 79,716 square km and a population of 32.9 million of which
28% were tribal. There were 32 tribal groups in Jharkhand. 68.5%
of the population of the state practiced Hinduism, 13.8% practiced
Islam, 13% practiced the animistic Sarna religion and 4.1% practiced
Christianity. Worship of nature was common among many tribes of
Jharkhand. The state had a literacy rate of 55.6% (64.3% for males and
46.4% for females).
Sources:
1. http://jharkhand.gov.in/web/guest/facts&figures. Retrieved October 6, 2014.
2. State SVEEP Plan 2014, Office of the Chief Electoral Officer, Jharkhand.
S0218927517500055.indd 169 19-06-17 2:19:28 PM

170 ACRJ
Exhibit 3
Government Programs and Schemes to Support Fisheries Industry
Subsidy to Fish Farmers: This scheme provided financial assistance

to fish seed growers for the construction of seed rearing ponds and
fish seed hatchery.
Fisheries Domestic Market: Under this scheme financial assistance

was given to fish sellers for purchasing show case-cum-freeze and

electronic balance.
Strengthening of Government fish seed farm and pond: The

objective of the scheme was to develop government tanks as well
as fish farms as fish seed banks. These would provide fish seed
throughout the year to farmers and acted as model demonstration
farms.
Fish Farmers Development Agency [75:25]: The main objective of

this scheme was renovation of tanks and development of new ponds,
farms, and hatcheries. It also aimed to develop water-logged areas.
The government provided 75% subsidy for fish seed and manure and
also provided training programs and loans to fish farmers.
Housing scheme for fishermen [50:50]: This scheme aimed to

develop model fishermen villages. The central and state governments
shared the cost of this scheme on a 50:50 basis.
Group accidental insurance scheme for Active fishermen [50:50]:

This scheme provided insurance coverage for active fishermen
registered with the state.
Fisheries Training and Extension Scheme (80:20): Under this

scheme, special training was imparted to progressive fish farmers of
the state with study tours to other states like Andhra Pradesh, Orissa
and West Bengal.
National Fisheries Development Board (90:10): This scheme

provided assistance for stocking of fingerling fishes in reservoirs
and provided special training for reservoir fisheries and reservoir
management. In addition, assistance for freshwater aquaculture and
marketing of fish was provided.
Reclamation and development of tank fisheries: This scheme

aimed to produce quality carp fish seed needed for increasing fish
production and stocking quality seed in different kinds of water
bodies.
S0218927517500055.indd 170 19-06-17 2:19:28 PM

Extension scheme for fisheries: The objectives of this scheme was

stocking of fish seed, survey of new ponds, training seminars,
conducting farmers’ meet at village level, and providing subsidy
for vehicles for the transport of fish and fish seed. It also aimed
to demonstrate poly-culture for brood stock production, provide
training and production of oil cakes as well as providing mentoring
to the individual fish farmers.
Fisheries Research Scheme: The objective of this scheme was to

conduct research to help fish farmers enhance fish production. It

aimed to undertake water and soil analysis to examine and analyze
the causes of low productivity of ponds. In addition, it targeted
prawn culture, river ranching, reproduction of aquarium fishes and
intensive fish culture.
Establishment of 6 new district offices: Six new district offices were

opened in the newly created districts- Latehar, Simdega, Koderma,
Pakur, Seraikella and Jamtara.
Source: Website of Jharkhand Govt., http://ah.jharkhand.gov.in/?ulink=fish/schemes.
asp. Retrieved September 29, 2014
S0218927517500055.indd 171 19-06-17 2:19:28 PM

172 ACRJ
Exhibit 4
Organization Chart of the Jharkhand State Government Fisheries Department
Director (Fisheries)
Joint Director (Fisheries)
Deputy Deputy Deputy Director (South Chotanagpur) Deputy Director (North

Director Director Chotanagpur)

(Headquarters) (Training)
Assistant • Ranchi – DFO Cum CEO • Ramgarh – DFO

Director • Khunti – DFO • Hazaribagh – DFO Cum CEO
(Research) • Gumla - DFO Cum CEO • Bokaro – DFO Cum CEO

• Simdega – DFO • Giridih – DFO Cum CEO
• Lohardaga – DFO Cum CEO • Dhanbad – DFO Cum CEO
• East Singhbhum – DFO Cum CEO • Kodarma – DFO
• West Singhbhum – DFO Cum CEO • Chatra – DFO Cum CEO
• Plamu – DFO Cum CEO • Pakur – DFO
• Latehar – DFO Cum CEO • Sahebganj – DFO Cum CEO
• Garwah – DFO Cum CEO • Godda – DFO Cum CEO
• Saraikela Kharsawan – DFO Cum CEO
• Deoghar – DFO Cum CEO
• Dumka – DFO Cum CEO
• Jamtara – DFO
Source: Website of Jharkhand Govt., http://ah.jharkhand.gov.in/?ulink=dept/organ.htm. Retrieved September 29, 2014.
S0218927517500055.indd 172 19-06-17 2:19:28 PM

Exhibit 5
Naxal Issue in Jharkhand
Naxals or Naxalites was a common term used to refer to various

militant guerilla groups who were affiliated to the ideology of the
Communist Party of India (Marxist). The movement originated
in the state of West Bengal and has spread to other states such as
Chhattisgarh, Jharkhand, Odisha, Andhra Pradesh and the eastern
region of Maharashtra. Violence by Naxals was declared as one of

the biggest problems faced by India by Prime Minister Manmohan
Singh in 2011. A variety of causes were attributed to have led to this
problem. These causes included widespread poverty, high levels
of illiteracy, exploitation of the tribal, high levels of corruption

in the law enforcement machinery, and conflict between various
classes in the society. The Naxal movement arose as a violent
protest against oppression and found mass support in many under
developed regions of Jharkhand. The violence by Naxalites was of
low intensity, mainly targeted at the police and other government
officials. They also extracted protection money from local businesses
in return for not targeting them with violence. Sometimes the Naxals
resorted to kidnapping of government officials and also business
executives to demand ransom money in return for the hostages.
This money was used to fund their activities. Apart from armed
operations, the Naxalites were also involved in organizing economic
blockades, strikes and various protest movements that affected the
economy of the state. They ran a parallel system of governance and
administration and also solved local disputes and dispensed justice in
kangaroo courts.
In Jharkhand, the Saranda forest region, an 800 square kilometers
forest area in the West Singhbhum district was considered as one of
the regions most affected by Naxalite violence. In many such parts
the government machinery was almost non-existent on the ground
and a parallel administration was in place which was controlled by
the Naxalites. The thickly forested regions of Jharkhand state, that
were also rich in iron ore, coal, uranium and other minerals were the
strongholds of Naxalites and offered them hiding places and secure
locations for their training camps.
Over the years, the central government and various state govern-
ments had launched a plethora of developmental programs aimed
at solving issues related to education, healthcare, drinking water,
and road connectivity in backward regions of the country that were
affected by Naxalite violence. For instance, in 2011, the Ministry
of Panchayat Raj issued a central grant of INR 15 billion to cover 60
districts spread across 9 states under its Integrated Action Plan. Of
S0218927517500055.indd 173 19-06-17 2:19:28 PM

174 ACRJ
this nearly INR 3.5 billion was allocated for the development of 14
backward districts of Jharkhand state.
In the Saranda forest area of Jharkhand, the government
had followed a Clear, Hold and Own (CHO) strategy to tackle
the Naxalite movement. This involved police and para military
operations to clear the area of the armed militants. This was followed
by a hold strategy which involved building trust of the local
population and establishing permanent camps of the para military
personnel in these regions. This was followed by the “Own” stage
of the operations whereby the government involved the heads of

various panchayat bodies, traditional heads of villages and tribes,
and local educated youth in spreading awareness about the various
developmental programs. There was greater focus on frequent and
multilevel communication between the government departments

and the local community. The government distributed necessary
items such as solar lanterns, bicycles and radio transistors in areas
that had no electricity. In the medium term the government focused
on development of road network, provision of medical facilities and
food security to people living in poverty.
Sources:
1. Development Initiatives Taken to Tackle the Naxal Issue in Saranda, Jharkhand: A
presentation by K Srinivasan, IAS, Director Information Technology, Jharkhand, at
the Planning Commission of India’s 2nd District Collectors of India conference.
2. http://www.ipcs.org/article/india/red-terror-over-jharkhand-1881.html. Retrieved
October 6, 2014.
3. http://en.wikipedia.org/wiki/Naxalite. Retrieved October 6, 2014.
4. http://pib.nic.in/newsite/erelease.aspx?relid=69078. Retrieved October 6, 2014.
S0218927517500055.indd 174 19-06-17 2:19:28 PM

ACRJ-Fishing in Troubled

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ASIAN CASE RESEARCH JOURNAL, VOL.

21, ISSUE 1, 149–174 (2017)

This case was prepared by

of XLRI Jamshedpur, India,

Abhijeet Naik, Amit Khirwal, Saumitra Verma and Alok Jain

© 2017 by World Scientific Publishing Co. DOI: 10.1142/S0218927517500055

S0218927517500055.indd 149 19-06-17 2:19:27 PM

was in fisheries, he had been working in the higher educa-

education a couple of years ago and was looking to explore

Saumitra, who had just turned 33, had an undergrad-

S0218927517500055.indd 150 19-06-17 2:19:27 PM

this all alone. Meeting Abhijeet, Saumitra and Alok and

MARKET FOR FISH IN JAMSHEDPUR

Jamshedpur, a city located in the southern part of the state

S0218927517500055.indd 151 19-06-17 2:19:27 PM

consume non-vegetarian food during this period. Funnily

severely limited during the month of Shravan.”

Amit explained the basics of his business idea to Abhijeet,

S0218927517500055.indd 152 19-06-17 2:19:27 PM

Amit stated, “Given India’s poor road infrastructure and the

tion, I had a hunch that there existed a market opportunity in

duction industry, his technical education in this field was

S0218927517500055.indd 153 19-06-17 2:19:27 PM

The first phase was relatively less organized and was

discussions with the District Fisheries Officer (DFO), we esti-

would be required. To achieve this nearly 4000 million fish

S0218927517500055.indd 154 19-06-17 2:19:27 PM

INR 6,000 per million spawn. The rearing took about

S0218927517500055.indd 155 19-06-17 2:19:27 PM

to cover the upfront cost of these cages and also provided

a battery. The estimated upfront capital cost of a battery

The cages were quite strong and had a life of about 10

STATUS OF FISH PRODUCTION IN JHARKHAND

The government of Jharkhand state recognized the impor-

S0218927517500055.indd 156 19-06-17 2:19:27 PM

activities.7 In the state of Jharkhand, approximately 71,000

government. It had 19 privately-owned hatcheries and 12

all there were 312 fisherman cooperative societies that were

Institute of Social Service, Ranchi.

http://ah.jharkhand.gov.in/?ulink=fish/overview.htm. Retrieved September 29, 2014.

S0218927517500055.indd 157 19-06-17 2:19:27 PM

in Jharkhand, a large number of the water bodies depended

ernment had invested in efforts in cultivating the required

According to Mr. Sahmbhu Prasad Yadav, a DFO, “We have

GOVERNMENT SUPPORT FOR FISHERIES

On its part, the state government had set itself an aim of

9 Agricultural Finance Corporation Ltd. 2014. Impact Study on Fisheries Development

S0218927517500055.indd 158 19-06-17 2:19:27 PM

to fish farmers for a variety of purposes.12 An overview of the

of one Joint Director, and four Deputy Directors (one each

12 Website of Jharkhand Government, http://ah.jharkhand.gov.in/?ulink=fish/

S0218927517500055.indd 159 19-06-17 2:19:27 PM

demanded compensation in some form or other? We were

Abhijeet, who was quite confident about the market potential

“Would it not be possible for us to seek police protection

Saumitra, recalled their meeting with the DFO and replied,

Amit echoed Saumitra’s sentiments and raised another issue,

S0218927517500055.indd 160 19-06-17 2:19:27 PM

In general, tribal opposition to development projects

money or compensation. After all, for them the forest land

chief of the Jharkhand Mukti Morcha, a leading regional

news/2005/nov/15jhar.htm. Retrieved June 21, 2015.

S0218927517500055.indd 161 19-06-17 2:19:27 PM