A REPORT ON INDONESIAN

FISHERIES SECTOR

SEPTEMBER 19, 2023

SUBMITTED BY
D.SHIVA SHANKAR
EXECUTIVE SUMMARY:
The development and procedures in the Indonesian fisheries sector are thoroughly
examined in this paper. It looks at the industry's historical background, present state,
difficulties, and hopes for the future. The research also examines the crucial procedures
associated with managing fisheries, such as legal frameworks, techniques of harvest, and
activities that take place after harvest. On top of that, it explores potential for business
development in the Indonesian fishing sector.

1. INTRODUCTION:
1.1 BACKGROUND:
The Indonesian fisheries sector has played a vital role in the country's economy and food
security. With over 17,000 islands and abundant marine resources, Indonesia possesses one
of the most diverse and productive fisheries ecosystems in the world.

1.2 OBJECTIVES:
The objectives of this report are to:

 Analyse the historical growth trends of the Indonesian fisheries sector.

 Assess the current status of the industry, including production volumes and value.
 Identify the challenges faced by the sector and potential strategies for sustainable
growth.
 Examine the key processes involved in fisheries management.

1.3 SCOPE:
This report primarily focuses on the growth and processes of fisheries sector in
Indonesia. It includes an overview of regulatory frameworks and post-harvest activities. It also
examines the potential business opportunities in Indonesian fisheries sector.
2. HISTORICAL GROWTH TRENDS
2.1 PRE INDEPENDENCE ERA:
Prior to independence, fishing in Indonesia was largely traditional and subsistence-
based, with limited commercial activities. Prior to independence, most fishing in Indonesia
was artisanal, using manual, small-scale methods. These techniques included cast netting,
hand lining, fish traps, and conventional fishing vessels made from indigenous materials. To
catch fish during tidal fluctuations, coastal tribes frequently used traps and weirs built of
bamboo or woven materials. To take advantage of natural fish movements, these structures
were carefully positioned in estuaries, rivers, and coastal regions.

Communities along the coastline had a strong connection with the fishing industry.
These towns were frequently close to good fishing areas, providing easy access to coastal
resources. Large commercial fleets and industrial-scale fishing were mostly absent during this
time. Fishing operations were often small-scale, family-run businesses. While there was
considerable inter-island business in fishery products, export-focused commercial fisheries
were not common, and there was no global trading in marine resources.

2.2 POST-INDEPENDENCE GROWTH:

Following independence, concerted efforts were made to develop the fisheries sector.
Policies and investments were directed towards modernizing fishing fleets, promoting
aquaculture, and improving processing facilities. The nation's vast archipelago, with over
17,000 islands, provides an ideal environment for a thriving fisheries industry. Here's an
overview of the post-independence growth of the Indonesian fisheries sector.

2.2.1 Early Challenges and Policy Initiatives (1945-1970s):

When Indonesia first gained its independence, controlling the fisheries industry
presented various difficulties. Growth was hampered by overfishing, poor infrastructure, and
outdated technology. The government introduced laws to control access to fishing sites,
regulate fishing activity, and encourage sustainable fishing methods in order to address these
problems.

2.2.2 Modernization and Technology Adoption (1980s-1990s):

Indonesia started making steps to modernise its fishing industry in the 1980s and
1990s. Advanced technologies were introduced in this process, including mechanised boats,
sonar technology, and freezer facilities. The industry's production and efficiency have greatly
grown as a result of these developments.
2.2.3 Export-Oriented Growth (1990s-2000s):
Indonesia's fisheries sector shifted towards being export-focused throughout the
latter half of the 20th and the beginning of the 21st centuries. The nation developed into a
significant global provider of seafood goods, including prawns, tuna, and numerous fish
species, because to its abundant marine resources.

2.2.4 Aquaculture Expansion (2000s-Present):

The Indonesian government made major investments in this sector as it saw
aquaculture's potential. Fish farms expanded significantly, especially those for shrimp and
tilapia. This helped ease pressure on marine fish species in addition to giving the economy a
boost.

2.2.5 Sustainable Practices and Conservation Efforts (2010s-Present):

Indonesia has taken initiatives to support sustainable fisheries management in
response to increasing concerns about overfishing and environmental degradation. This
consisted of establishing catch limits, regulations, and marine protected areas to prevent
illegal, unreported, and unregulated (IUU) fishing. To enhance monitoring and enforcement,
the government collaborated with foreign organisations.

2.3 RECENT TRENDS:

The Indonesian fisheries industry has seen remarkable trends in recent years. With
tougher laws against IUU and overfishing, sustainable practises have risen to prominence. In
order to supply the growing global demand for seafood, aquaculture is still growing. The
sector's economic contribution has increased as a result of a focus on processing with added
value and export diversification. Modernising operations are also technology developments,
such as digitalized fisheries management systems. However, issues like the effects of climate
change and the preservation of marine resources continue. Overall, Indonesia's fisheries
industry is developing into one that is more technologically advanced, commercially robust,
and sustainable.
3. CURRENT STATUS OF FISHERIES SECTOR IN INDONESIA
3.1 Production Volumes and Value
As of [Year], Indonesia ranks among the top global fish producers. The sector contributes
[Percentage] to the national GDP, with a total production volume of [Volume] tons valued at
[Value] USD.

3.2 Employment
The fishing industry in Indonesia continues to be a significant employment. Millions of
people, particularly in coastal regions, rely on it for their living. Traditional and artisanal small-
scale fisheries continue to serve as the industry's backbone and employ an important
proportion of the workforce. The farming of fish, prawns, and other aquatic species has
turned into an important source of employment, creating jobs in both urban and rural
locations.

3.3 Export Markets

Indonesia has been a significant exporter of various seafood products, including
shrimp, tuna, and various fish species. China, the United States, Japan, and nations in the
European Union have historically been among the top importers of seafood from Indonesia.
Additionally, neighbouring countries in Southeast Asia also serve as important markets.
However, it's important to note that the dynamics of export markets can be influenced by a
range of factors including global trade policies, consumer preferences, and economic
conditions. Changes in these factors can lead to shifts in export destinations and product
preferences.

4. CHALLENGES AND STRATEGIES

4.1 OVERFISHING AND SUSTAINABILITY
Overfishing is a critical issue facing the Indonesian fisheries sector. The combination of high
demand for seafood, inadequate enforcement of regulations, and technological
advancements in fishing gear has put immense pressure on marine resources. This has led to
declining fish stocks, ecosystem imbalances, and economic hardships for fishing communities.
To combat overfishing, Indonesia has implemented various measures. These include marine
protected areas, catch quotas, and regulations against illegal, unreported, and unregulated
(IUU) fishing. The government has also encouraged sustainable fishing practices through
initiatives like the Sustainable Fisheries Partnership.
 However, challenges persist. Enforcement of regulations can be difficult, particularly
in the vast archipelago, and there is often resistance from those who depend on fishing for
their livelihoods. Moreover, climate change effects, such as rising sea temperatures and
ocean acidification, add further stress to marine ecosystems. The move towards sustainability
is crucial. Balancing economic interests with environmental conservation is essential for the
long-term viability of the Indonesian fisheries sector. Continued efforts in education,
regulation, and the promotion of sustainable practices are vital to ensure that future
generations can benefit from the rich marine resources of Indonesia.

4.2 REGULATORY FRAMEWORKS

Indonesia has a comprehensive regulatory framework governing its fisheries sector. The
key components of this framework include:

1. Fisheries Law (No. 31/2004): This law is the cornerstone of Indonesia's fisheries sector
regulation. It outlines principles for sustainable fisheries management, conservation
of marine resources, and the rights and responsibilities of stakeholders.

2. Exclusive Economic Zone (EEZ): Indonesia's EEZ, one of the largest in the world,
extends up to 200 nautical miles from its coastline. This grants Indonesia sovereign
rights over the exploitation, conservation, and management of living and non-living
resources within this zone.

3. Licensing and Quotas: The government issues various licenses for fishing activities,
including commercial, artisanal, and aquaculture licenses. Quotas and catch limits are
established to ensure sustainable exploitation of resources.

4. Traceability and Product Certification: Indonesia has introduced traceability systems

to monitor the entire supply chain, from catch to market, to ensure the legality and
sustainability of seafood products. Certification schemes like the Indonesian
Sustainable Fisheries Certification (SWPI) have been implemented.
5. Community-Based Fisheries Management (CBFM): This approach empowers local
communities to manage their own fisheries resources in a sustainable manner, with
government support and guidance.
6. International Agreements and Cooperation: Indonesia collaborates with
neighbouring countries and international organizations to manage shared fisheries
resources, combat IUU fishing, and promote regional cooperation in fisheries
management.
7. Post-Harvest and Export Regulations: Standards for processing, handling, and
exporting seafood products are set by the government to ensure quality and safety
for both domestic consumption and international trade
8. Marine Protected Areas (MPAs): Indonesia designates specific areas as MPAs to
conserve marine biodiversity and ecosystems. These areas are subject to special
regulations to restrict or regulate fishing activities.
 9. Illegal, Unreported, and Unregulated (IUU) Fishing: Indonesia has enacted strict
measures to combat IUU fishing, including vessel monitoring systems, port controls,
and sanctions for violations.
10. Environmental Impact Assessment (AMDAL): Projects with potential environmental
impacts, including those in the fisheries sector, are subject to an AMDAL process to
assess and mitigate potential negative effects.

4.3 CLIMATE CHANGE AND ENVIRONMENTAL IMPACTS

Climate change poses a growing threat to the fisheries sector through impacts on ocean
temperature, acidity, and sea-level rise. Adaptation strategies, such as promoting resilient
aquaculture practices, are essential.

1. Sea Level Rise and Coastal Erosion: Rising sea levels and coastal erosion threaten
coastal communities and fishing infrastructure. This can disrupt fishing activities,
damage boats, and reduce the availability of suitable landing sites.

2. Ocean Warming and Acidification: Rising ocean temperatures and acidification can
alter marine ecosystems. Some fish species may migrate to cooler waters, affecting
local fisheries. Additionally, acidification can harm shellfish and coral reefs, which are
critical habitats for many marine species.

3. Extreme Weather Events: Increased frequency and intensity of storms and typhoons
can lead to dangerous conditions for fishing vessels. Damage to boats, gear, and
coastal infrastructure can have long-lasting economic impacts on fishing communities.

4. Changes in Fish Migration Patterns: Altered oceanic conditions can influence the
migration patterns of fish species. This can lead to shifts in the distribution and
abundance of commercially valuable species, impacting catch volumes and the
livelihoods of fishers.

5. Loss of Biodiversity: Climate change can lead to shifts in species composition and
biodiversity within marine ecosystems. This may result in the decline or loss of certain
species, affecting both the ecological balance and the livelihoods of those dependent
on them.

6. Regulation and Adaptive Management: To mitigate these impacts, Indonesia has

implemented measures such as marine protected areas, seasonal fishing closures, and
stricter regulations on fishing practices. Additionally, adaptive management strategies
are being employed to enhance the resilience of coastal communities and the fisheries
sector.
 7. Opportunities for Aquaculture: Climate-resilient aquaculture practices, such as land-
based and integrated multi-trophic systems, present opportunities to diversify and
strengthen the fisheries sector. These practices can help reduce pressure on wild fish
stocks and provide a more stable income for fishers.

5. POTENTIAL BUSINESS OPPORTUNITIES IN THE INDONESIAN FISHERIES

SECTOR:
5.1 MARKET ANALYSIS:
5.1.1 Demand Trends:
Global demand for seafood is rising as a result of population growth, rising health
consciousness, and a move towards diets high in protein. With a large amount of its products
shipped to foreign markets, Indonesia plays an important role in meeting this need.

5.1.2 Export Opportunities:

Various fish species, prawns, tuna and prawns are just a few of the items that
Indonesia exports from its fisheries. The United States, Japan, China, and European nations
are important export markets.

5.2 POTENTIAL SUBSECTORS FOR INVESTMENT:

5.2.1. Aquaculture
Overview: Aquaculture, including fish and shrimp farming, represents a significant growth
area in the Indonesian fisheries sector.

Opportunity:

Expansion of Species: There is significant economic potential in diversifying into high-value

species like prawns, grouper, and barramundi.

Technology Adoption: Implementing advanced technologies for water quality management,

automated feeding systems, and disease prevention can enhance productivity.

5.2.2. Processing and Value-Addition

Overview: There is an increasing global demand for processed seafood products.

Opportunity:

Modern Processing Units: High returns can be achieved by investing in modern filleting,
canning, and packing operations.
Value-Addition: To satisfy a range of consumer tastes, unique value-added goods including
marinades, ready-to-cook meals, and snacks can be created.

5.2.3. Sustainable Fishing Practices

Overview: Embracing sustainable harvesting methods is crucial for the long-term viability of
the fisheries sector.

Opportunity:

Eco-Friendly Gear: Developing and marketing eco-friendly fishing gear and practices, such as
pole-and-line fishing, can attract environmentally-conscious consumers.

Certification and Labelling: Obtaining certifications like MSC (Marine Stewardship Council) or
ASC (Aquaculture Stewardship Council) can open up premium markets.

5.2.4. Seafood Export

Overview: Indonesia is a major player in the global seafood export market.

Opportunity:

Market Diversification: Exploring new and emerging markets, particularly in Asia, can provide
avenues for expansion.

Value-Added Exports: Exporting processed and value-added seafood products can fetch
higher margins compared to raw exports.

5.2.5. Technology and Innovation

Overview: Leveraging technology can revolutionize various aspects of the fisheries sector.

Opportunity:

ICT Solutions: Implementing Information and Communication Technology (ICT) for data-
driven decision-making, traceability, and supply chain management.

Aquatic Robotics and Automation: Utilizing robots and automation in aquaculture and
processing operations can increase efficiency and reduce labour costs.

5.2.6. E-commerce and Direct-to-Consumer Models

Overview: The e-commerce landscape in Indonesia is burgeoning, presenting opportunities
for direct seafood sales.

Opportunity:

Online Platforms: Establishing e-commerce platforms for direct consumer sales of fresh and
processed seafood products.

Subscription Models: Offering subscription-based services for regular delivery of seafood

products to consumers' doorsteps.

5.2.7. Environmental Services and Consultancy

Overview: With increasing environmental concerns, there is a demand for services related to
sustainability and conservation.

Opportunity:

 Environmental Impact Assessment (EIA): Providing EIA services for fisheries projects
to ensure compliance with environmental regulations.

 Consulting on Sustainable Practices: Offering consultancy services to businesses

looking to adopt sustainable practices and obtain relevant certifications.

6. CONCLUSION:
The fisheries sector of Indonesia stands as a vital cornerstone of the nation's economy
and culture. From its early post-independence years to the present, it has demonstrated
remarkable growth and adaptation. Embracing modernization and sustainability, Indonesia
has become a global player in seafood exports, providing livelihoods to millions, particularly
in coastal communities. However, the sector is not without its challenges. Climate change,
overfishing, and environmental degradation remain pressing concerns. Nevertheless, through
strategic policies, technological advancements, and a commitment to sustainable practices,
Indonesia's fisheries sector is poised for continued resilience and prosperity. As it navigates
the complexities of a changing world, the sector remains a beacon of hope for the nation's
coastal communities and a testament to Indonesia's rich maritime heritage.